Documents considered by the Committee on 7 November - European Scrutiny Committee Contents


3 EU development for drinking water and basic sanitation

(34296)

14531/12

Court of Auditors' Special Report: "European Union Development Assistance for Drinking-Water Supply and Basic Sanitation in Sub-Saharan Countries"

Legal base
Document originated3 October 2012
Deposited in Parliament5 October 2012
DepartmentInternational Development
Basis of considerationEM of 18 October 2012
Previous Committee ReportNone
Discussion in CouncilTo be determined
Committee's assessmentPolitically important
Committee's decisionFor debate in European Committee B along with (34335) SWD(12) 277: Commission Staff Working Document: Meeting the challenge of rapidly increasing humanitarian needs in Water, Sanitation and Hygiene (WASH)[5]

Background

3.1 The European Court of Auditors carries out audits, through which it assesses the collection and spending of EU funds. It examines whether financial operations have been properly recorded and disclosed, legally and regularly executed.

3.2 It also, via its Special Reports, carries out audits designed to assess how well EU funds have been managed so as to ensure economy, efficiency and effectiveness.[6]

The Court of Auditors' Special Report No 13/2012

3.3 This Court of Auditors Special Report looks at the European Commission's management of development assistance for drinking water and basic sanitation in Angola, Benin, Burkina Faso, Ghana, Nigeria and Tanzania — six sub-Saharan countries selected for their financial significance amongst the ten most important recipients. The audit assessed whether EU development assistance in this field is leading to sustainable results. It focused on two questions:

—  were the planned results achieved, and are they sustainable?

—  did the Commission take appropriate steps to ensure sustainable results?

3.4 The audit work was carried out between February and December 2011. Detailed examination of EU-funded water and sanitation projects in the six beneficiary countries included visits to Burkina Faso, Nigeria and Tanzania. The audit examined a sample of 23 projects and programmes, under contracts financed through the 7th, 8th and 9th European Development Funds, including the first ACP-EU Water Facility (funded by the 9th EDF), and from the EU general budget. The total cost of these contracts was over €400 million, 49% of which was funded by the EU. The total EU contribution to the 23 selected projects amounted to €219 million; as the Commission contracted more than €1 billion for water and sanitation projects in 46 sub-Saharan African countries from 2001 to 2010, the Court's audit thus covered 22% of the amount contracted.

3.5 The report explains how EU development assistance for water and sanitation is guided by the 2002 Commission Communication on Water Management and is funded through both thematic and geographical (national and regional) programmes, as well as in the context of humanitarian aid operations.

3.6 The report found that equipment had been installed as planned, the technology used was appropriate, and it was in working order. However, fewer than half the projects delivered results that were meeting the beneficiaries' needs. For a majority, medium and long term results and benefits would not continue to arise unless non-tariff revenue was ensured. Water tariffs had been set on the basis of the ability to pay, or a lack of willingness to pay; or there was ineffective billing and collection. Although project management procedures covered sustainability comprehensively, the Commission failed to tackle important matters regarding the sustainability of results. Monitoring, verification and evaluation reports were not fully used, limiting the Commission's capacity to introduce corrective measures. Moreover, in most of the completed projects, the absence of ex-post monitoring or evaluation did not allow assessment of the sustainability of results. EU support had thus increased access to drinking water and basic sanitation in the six sub-Saharan countries audited, using standard technology and locally available materials, but had met beneficiaries' needs in fewer than half of the projects examined. For a majority of projects, medium and long term results and benefits would not continue unless non-tariff revenue could be ensured. Despite comprehensive management procedures, the Commission did not tackle important matters regarding sustainability.

3.7 The Court of Auditors recommends that the Commission should:

"(a) Ensure that its procedures are properly applied, especially concerning the following points at project appraisal stage:

"(i) the definition of explicit project objectives (quantities, type of equipment, location, direct and indirect beneficiaries);

"(ii) the description of and justification for the technological solutions proposed (wherever applicable, with reference to alternative options); and

"(iii) establishment of objective verifiable progress indicators, as well as baseline values and quantified targets for project results.

"(b) Carry out sufficient economic and financial analysis to allow easy identification of the expected sources of project funding in the future (including estimated contribution amounts and timing).

"(c) Explicitly consider before project approval whether the conditions for success, including partner country commitments, are likely to be met.

"(d) Ensure that full use is made of the results of monitoring, verification and evaluation work, and that recommendations made in the reports are considered and carried out."

3.8 In its response, the Commission says that it "is of the view that care must be taken in drawing any general conclusions from the results of the Court's examination of these 23 diverse projects." In most projects, it says, several needs were identified of which at least one or more were met; a lot were very ambitious and some needs, mainly secondary ones, were not fulfilled. Moreover, the Commission argues that most of the audited projects were approved before the establishment of Quality Support Groups (QSG) in 2005, since when "greatly improved rules are now applied during the identification and the formulation phases." While capacity development is "one of the most critical dimensions … its success depends on social and political factors which are often out of the scope of the project." The Commission "takes note of the recommendation of the Court and will continue to improve the quality of development cooperation practices and operations and ensure that the existing procedures are fully implemented."

The Government's view

3.9 In her Explanatory Memorandum of 18 October 2012, Parliamentary Under-Secretary of State at the Department for International Development (Ms Lynne Featherstone) says that there are four main policy implications from this report. These, she says, are not new; rather they call for better implementation of existing policies and procedures.

3.10 She then says that the Commission needs to do the following:

—  "Make effective use of existing procedures in its programmes to be much clearer on setting objectives and how these are best achieved, and improved monitoring of progress using robust baseline data;

—  "Undertake thorough economic and financial analysis to allow easy identification of the expected sources of finance to secure future operation of services provided;

—  "Undertake a thorough assessment of whether the conditions necessary for success of projects, including partner country commitments, are likely to be met before embarking on the projects; and,

—  "Improve and make better use of monitoring, verification and evaluation ensuring that recommendations are acted upon."

3.11 The Minister then says that she regards the Report as a constructive contribution to the ongoing process of improving the effectiveness and results of EU support to drinking water supplies and basic sanitation in sub-Saharan countries; and then continues as follows:

—  "However, in terms of the delivery of Commission funded projects, there are significant areas for improvement. These include the need for projects to be more closely demand-led to ensure they meet the needs and expectations of their beneficiaries. At the design stage of projects, the Commission should secure sufficient long-term funding so that water supplies remain functional over time. The Commission should also consider all potential technical options in the design of projects, so they can be confident that the selected option is best suited to the local context. The failure to adequately address these factors has undermined the sustainability of Commission projects.

—  "We recognise the value of the Commission as a partner in the delivery of water, sanitation and hygiene projects and are encouraged that the auditors find that the processes are adequate. However, we are concerned that despite having good processes and procedures in place, the Commission's proper use and implementation of them is variable. Results show numerous examples where Commission projects are not sustainable, or where they have failed to meet beneficiaries' expectations. We are concerned that the Commission's response is that they have put in place further processes, rather than outlining their commitment to use their existing systems more effectively. We are also concerned that the Commission has not focused on the delivery of results, which represents a lack of accountability and transparency."

3.12 With regard to what the Minister proposes to do about the findings, she says:

"We plan to work with the Commission to improve their performance in two ways. We will ensure that the WASH sector features prominently in their wider work on transparency and accountability. We will also continue to participate in the EU Water Experts Group and use this to press the Commission to improve their performance on sustainability, and to fund projects that meet beneficiaries' expectations. We will also use this group to share our experiences from UK funded programmes and highlight new evidence on ways to improve sustainability and value for money."

Conclusion

3.13 Elsewhere in this Report we consider a related document, this time from the Commission itself, on WASH — "Meeting the challenge of rapidly increasing humanitarian needs in Water, Sanitation and Hygiene." Though centred on three main sectors of humanitarian operations (the others being food and health), the Commission says that humanitarian aid alone will not be able to continue to address the rapidly growing needs; and that improving resilience and Linking Relief, Rehabilitation and Development (LRRD) is "vital to helping meet these needs before they become humanitarian emergencies".

3.14 Nothing can do more to improve resilience in this (or any other such area) than projects that work over the medium and long term. However, it is plain from this Court of Auditors' Report that the Commission still has much to do (notwithstanding its special pleading; see paragraph 2.08 above). The Minister says, rightly, that she is concerned that:

—   despite having good processes and procedures in place, the Commission's proper use and implementation of them is variable;

—  results show numerous examples where Commission projects are not sustainable, or where they have failed to meet beneficiaries' expectations;

—  the Commission's response is that they have put in place further processes, rather than outlining their commitment to use their existing systems more effectively;

—   the Commission has not focused on the delivery of results, which represents a lack of accountability and transparency.

3.15 We are likewise concerned. Yet, when commenting (very briefly) on the Commission Staff Working Document on the WASH issues, she says that it has no policy implications. Since that document sets out how EU assistance is meeting humanitarian water, sanitation and hygiene needs at a time when the Commission's auditors have demonstrated its failings in managing water and sanitation projects effectively, we are bound to disagree. Moreover, when the Commission is so dismissive in its responses to the Court of Auditors' analysis and recommendations, we are not optimistic about the Minister's ability to be able to persuade the Commission to improve its performance in the ways that she, and we, would wish.

3.16 We accordingly recommend that this document and the Commission Staff Working Document on WASH should be debated in European Committee B, so that the Minister can outline her approach more fully and interested Members can satisfy themselves that the Government will be able to achieve its objectives and improve the Commission's future management of water and sanitation projects.

3.17 We are also drawing this chapter of our Report to the attention of the International Development Committee.



5   See chapter 4 of this Report. Back

6   See http://eca.europa.eu/portal/page/portal/eca_main_pages/home for full details of the ECA's work. Back


 
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Prepared 16 November 2012