Annual management and performance report for the EU budget :Financial year 2023. Volume 2, annexes 1 to 3

Table of Contents

• Contents 5
• Annex 1 – Performance achievements in 2023 7
• 1. Performance of the EU budget 9
• Budget implementation in 2023 9
• Monitoring performance 10
• Performance embedded in the design of the programmes 12
• Reinforcing the reliability of performance information 12
• 2. Priorities of the European Commission 13
• A European Green Deal 13
• Towards net zero greenhouse gas emissions 13
• Ensuring a fair transition 14
• Making use of green bonds 15
• Helping conserve biodiversity 16
• A Europe fit for the digital age 17
• Developing and deploying digital technologies and investing in digital skills 17
• Investing in artificial intelligence 19
• Connecting Europeans: enhancing digital connectivity 19
• Investing in space technology for the benefit of people in the EU 20
• An economy that works for people 21
• Research and innovation help to make the economy work for the people 21
• Developing and improving infrastructure across the EU 22
• Developing and supporting rural Europe 23
• Supporting investments in people 24
• A stronger Europe in the world 25
• Providing humanitarian and military assistance to Ukraine 25
• The EU’s response to the Middle East crisis 26
• Strengthening European defence and security 26
• Promoting international partnerships and providing emergency aid across the globe 27
• Supporting our neighbourhood and candidates for enlargement 29
• Promoting our European way of life 31
• Addressing migration pressure and asylum 31
• Ensuring free movement within the EU 32
• ERASMUS+ 34
• European Solidarity Corps 35
• Investing in European culture 35
• Fighting cancer in Europe 36
• A new push for European democracy 37
• Promoting the rights and values of the EU 37
• Enabling young Europeans to participate in civic society and democratic life 38
• Tackling cybersecurity challenges, disinformation, and safeguarding the 2024 EU elections 38
• 3. Horizontal policy priorities in the EU budget 40
• Green budgeting 40
• Focus on results ( ) 41
• Measuring the actual impact of NextGenerationEU investments 42
• Taxonomy 42
• Climate mainstreaming 43
• Achievements 43
• How much do we spend? 43
• Biodiversity mainstreaming 45
• Achievements 45
• How much do we spend? 45
• Clean air 46
• Achievements 46
• How much do we spend? 47
• Gender equality mainstreaming 48
• Achievements 48
• How much do we spend? 49
• Recovery and Resilience Facility 51
• Gender-disaggregated data 52
• Digital tracking 53
• Achievements 54
• How much do we spend? 54
• Digitalisation of businesses and public services 56
• Supporting the development and deployment of digital technologies and research 57
• Investing in digital skills 57
• Enhancing digital connectivity 57
• The twin transition: exploiting synergies 58
• The EU budget and the sustainable development goals 59
• What do we do? 59
• Annex 2 – Internal control and financial management 63
• 1. Strong tools to manage the EU budget in a complex environment 65
• 1.1. The EU budget: a wide variety of areas, recipients and spending in a complex environment 65
• 1.2. A robust governance system underpinning the College’s responsibility 67
• 1.3. A robust internal control framework contributing to the achievement of the Commission’s objectives 69
• 1.3.1. The internal control framework continued to evolve with its environment 69
• 1.3.2. A mature internal control framework adapted to the functioning of the Commission departments 70
• 1.4. Multiannual control strategies to ensure that expenditure is legal and regular 72
• 1.5. Fight against fraud: the Commission’s anti-fraud strategy and further proposals 74
• 1.5.1. Revision of the Commission’s anti-fraud strategy 74
• 1.5.2. Other tools to increase the efficiency of the fight against fraud 75
• 1.6. The conditionality regime is being implemented 76
• 1.7. Revision of the financial regulation (recast) 78
• 2. Cost-effective controls protecting the EU budget. 80
• 2.1. The Commission’s control results confirm that the EU budget is well protected 81
• 2.1.1. Overall results for 2023 81
• 2.1.2. Control results per lower-, medium- and higher-risk programme segments 82
• 2.1.3. Control results by policy areas 85
• Heading 1 – single market, innovation and digital 85
• Heading 2 – cohesion, resilience and values 87
• Heading 3 – natural resources and environment 90
• Heading 4 – migration and border management 92
• Heading 5 – security and defence 94
• Heading 6 – neighbourhood and the world 95
• Heading 7 – European public administration 96
• 2.1.4. Efficiency measures have been taken 97
• 2.1.5. The costs of controls are proportionate to the associated risks 99
• 3. Management assurance 100
• 3.1. Assessments, assurance and reservations declared by authorising officers 100
• 3.2. Work of the Internal Audit Service and overall opinion 101
• 3.3. Assurance obtained through the work of the Audit Progress Committee 102
• 3.4. The opinions of the European Court of Auditors on the 2022 accounts and on the legality and regularity of transactions 103
• 3.5. Discharge of the budget for 2022 104
• Annex 3 – The Recovery and Resilience Facility 105
• 1. The Recovery and Resilience Facility – an innovative and successful crisis-response tool 107
• 1.1. Future-proofing through revised plans 107
• 1.2. Implementation is on track 108
• 1.3. Achieving performance results 109
• 2. Control results confirm the satisfactory fulfilment of all milestones and targets for payments made in 2023 112
• 2.1. A dedicated control environment to ensure the protection of EU funds 112
• 2.2. Control results are predominantly positive 115
• 2.2.1. Full approval of the revised plans following their assessment 115
• 2.2.2. Ex ante controls at the payment stage 115
• Positive assessment before payment of the satisfactory fulfilment of milestones and targets 115
• Positive assessment of the specific milestones on audit and control for all Member States 116
• Analysis of management and audit summaries confirms the Commission’s initial assessment 116
• 2.2.3. Ex post audits on milestones and targets confirm the satisfactory fulfilment of milestones and targets 116
• 2.2.4. System audits on the protection of the financial interests of the EU confirm adequacy of systems in place 117
• 2.2.5. Other audits and controls 118
• Audits of the national audit authorities 118
• All the Member States assessed complied with their obligation regarding public procurement and State aid rules 118
• 2.2.6. Annual audit and management opinions 118
• 2.2.7. Ongoing work of the European Court of Auditors in the context of the statement of assurance 2023 119
• 2.2.8. Qualitative assessment of payments on legality and regularity and on the protection of the financial interest of the Union generally indicates low risk 119
• 2.3. The authorising officer by delegation for the facility confirmed they had reasonable assurance 121