Portugal is one of the compliers. One of those that do not register many cases of fraud related to European funds – below the European average, which stands at 0.75%. This is the assessment of the European Commission and anti-fraud entities. However, the amount that must reach our country in the coming years is very high. And money brings responsibility.
For now, five supervisory entities have been designated and a National Anti-Fraud Plan has been drawn up. Will it be necessary to curb misuses?
133.7 billion euros. This is the amount that Portugal will receive, until 2029, in European funds. Values that have to be available and inspected. Because any fraud, however small, implies the loss of millions of euros. And the Court of Auditors is a key player in this control. At this moment, “the court is in the conclusion phase of an audit on the implementation of the 2014-2020 Multiannual Financial Framework”, the supervisory institution tells the DN. And it happens that “it continues to develop its actions within the scope of the Recovery and Resilience Plan and the New Multiannual Financial Framework 2021-2027”.
Ongoing work and one of the flags of the European Commission, the fight against fraud has already given rise to several mechanisms in order to ensure that the money available in the next funds is protected against any kind of illegal actions. Just to get an idea of the importance of the topic, the Commission allocated, for the period 2021-2027, 181 million euros to “support the efforts of member states to combat fraud, corruption and other irregularities that affect the budget of the European Union”. This scrutiny tends to increase. This is the opinion of Elisa Ferreira, issued at the end of last year and reinforced in June this year. The MEP and European Commissioner for Cohesion and Reform ensures that Brussels has zero tolerance for fund fraud. More money brings more responsibility. This was an idea that tried to convey, defining, however, that the chances of fraud in the past do not reach 1% of cases.
And Portugal? Is it a compliant country? What image does the country have with associations such as the European Anti-Fraud Office (OLAF)? The general idea is that Portugal is well positioned, or at least not one of the most non-compliant. As mentioned by Dário Gaspar, manager of We Incentivos, Portugal even has a good execution rate of funds, but usually tends to run after the loss when the end of the cycle approaches. António Costa, in June, at the opening session of the conference “European Funds: management, control and responsibility”, stated that “Portugal has a history of good use of funds, with high economic impact and low levels of fraud and irregularities” . On the occasion, the prime minister elucidated the importance of this source of financing, stating that without it the national gross domestic product (GDP) would be 1.9 points lower.
This perception of a compliant country is consolidated by documents issued by the European Commission. The OLAF report on 2020 reports only one incident with Portugal (Italy is champion with 13 cases). The same report gives another important data. In the analysis of the detection of irregularities by the Member State / OLAF and their financial impact on the area of Traditional Own Resources for the period 2016-2020, 129 fraudulent and non-fraudulent irregularities were recorded in Portugal with a financial impact of 2.29 %. It sounds like a lot … until we compare, for example, with Spain (1554 cases; 2.08% impact). But perhaps more interesting is the comparison with Greece, which, despite having only registered 277 cases, had an impact of 4.37%, the highest in the table.
A national anti-fraud strategy
On September 20, the Commission issued a document in which it addressed the areas of combat carried out by the member states, considering that, last year, special attention was paid to anti-fraud strategies and incidents of conflicts of interest. Portugal, like most countries, registered three measures that focused on the areas of public procurement (one) and financial crime. In fact, Portugal was one of the 14 who reported, by the end of last year, that they had already adopted a national anti-fraud strategy – up to the date of issuance of the document, however, the Commission had not officially granted the communication of this approval.
Specifically for the funds that practice there, Portugal has defined five supervisory entities for management and execution: the Agency for Development and Cohesion (AD&C), the General Inspectorate of Finance, the Judiciary Police, the Central Department of Investigation and Criminal Action and the Audit Office. Is this the correct strategy? Shouldn’t everything be centralized in a single entity? Dário Gaspar believes that at least a centralizing or even aggregating entity should be created for these monitoring and inspection entities, equally with a specific function aimed at monitoring the exercise and execution of the funds involved and in full synchronization with the Transparency Portal, which should always be up to date. “Tight scrutiny is imperative to following the biggest financial package ever in the history of major funds,” he says.
In any case, what matters is the management and execution of the funds that must be carried out in the next few years, “not leaving a large portion of unrealized investment for the last year of execution of the staff involved”.
What real risks are there related to European funds? Helena Abreu Lopes, counselor judge at the Portuguese Court of Auditors, head of the European Funds, Environment and Natural Resources Area, was particularly brief. In his presentation in June, he stated that it starts with the risk of not being able to fully absorb the funds. This is because Portugal has, traditionally, a low level – or more precisely a slow pace – of execution. Dário Gaspar, on the other hand, argues that it was useful to have mechanisms to streamline processes and reduce bureaucracy of information in applications for incentive systems, Vitam the quick and efficient execution of European funds. “Constituting a structure that allows companies to know which incentive systems will come out and prepare their projects in time, but a structure that really was coherent and flawless, as happened with Portugal 2020”, arbitrated, explaining that it could also , similarly to Horizonte Europa, there will be continuous calls with evaluation in order of arrival and where the analysis deadlines are met.
There is still an essential point. Refunds. In order for reimbursement requests and respective payments to companies to occur, it is necessary that “intermediate bodies are endowed with resources to be able to carry out analyses” these requests and follow the processes. “A higher percentage of advances on incentives will also allow companies a better cash management margin to initiate eligible project investments,” says the manager of We Incentivos.
Fortunately… few cases
The fight against fraud is one of the flags of the European Commission and that no value attributed to the various European organizations that work in this matter is substantiated. In the case of Portugal, in recent years, the number of frauds detected with competent funds is around 2.3 million euros.
A high value, some will say, but relatively low compared to other European countries. This does not mean that these cases should not be “attacked”. Also because in recent times there have been reports of fraud cases related to European funds. Earlier this year, for example, the Court of Coimbra sentenced a sentiment to six years in prison for fraud with European funds and willful insolvency of a printing company that defrauded the State by more than half a million euros. And at the end of last year, a PJ carried out 70 searches in the north of the country to investigate possible fraud in obtaining European funds.
All these cases led the Central Department of Investigation and Criminal Action (DCIAP) to create a think tank, with a view to developing the strategy for preventing and combating fraud with European funds. Over the next two years, the group will aim to identify high risk areas of fraudulent behavior; define guidelines for fraud prevention in the management and control of European funds; and implement action methodologies adjusted to identified fraudulent behavior.