FIES Study tackles some specific purposes related to each other. The first one is to extend the traditional budgetary meaning of "EU financial interest" to that one of "financial interests of European scale." The stepping point is a shared, yet differentiated, responsibility among the European Union and the Member States in safeguarding financial interests and fighting against fraud that should be integrated by a more shaped concept of public benefit directly held by the Union. To that extent, it is requested to point out the EU as the holder of interests related to the sound management of its funds, which cannot merely cover only the "regular" expenditure of those financial resources as it also refers to the sound performance and, then, the effectiveness of actions eventually financed by the Union. The scale of the interests pursued by the Union through it also includes those related to their actual implementation. However, under this view, national and local authorities implementing measures and actions funded by the EU make up a complex (multilevel) administrative and managing system that cannot be considered as being separated or controlled through mere ex-post audits and reviews. The relevant question is whether a more harmonized legal safeguard of the financial interests at stake would be possible.
The second objective is to propose a new approach to fraud risk prevention as efficiency gains in managing ESI funds by national authorities. For this purpose, the project aimed to elaborate a series of risk-assessment macro alert signals (bias, fair proceeding, impartiality, etc.) as a method to detect potential prejudices to the ESI funding system irrespectively of the specific aim of the intention, thus covering irregularities, fraud or corruption.
Preparatory to this objective, the Study focuses on the role of European and National authorities in the prevention of illegal activities and cooperation mechanisms in force involving private financial initiatives such as public-private partnerships (PPP) and financial instruments.
For this reason, the Study looks at the mission carried on by the European Commission and OLAF regarding preventing fraud and other illegal activities (including irregularities) related to the allocation of ESI funds under shared management systems. To that extent, the analysis moves from the principle of loyal cooperation established by article 235 TFEU and the relevant European legislation to find an adequate balance between that principle and the (independence of) national managing authorities. The approach EU Institutions have followed so far is to progressively adopt "soft law tools" to standardize proceedings adopted by national and local managing authorities. However, the Study demonstrates that there are no theoretical constraints in speculating the adoption of binding cooperation schemes under article 197 TFEU to enhance a coordinated approach toward preventing risks related to fraud and other illegal activities. Therefore, after having analyzed tools issued by the EU Commission and OLAF to improve fraud prevention and coordination among national authorities, the Study argues that patterns based on preventive measures, nowadays available, do not consider enough specific fraud risks (in ESI funds managing) related to financial instruments and PPP operations.
The Study, then, focuses on the role of national managing authorities. National governments are recommended to coordinate and uniform their actions. From this perspective, the primary tool to reach those objectives should be the definition of an accurate National Anti-fraud Strategy (NAFS). The Study shows that NAFS is a chance for inter-institutional dialogues on fraud deterrence and contrast in the view of sharing policies among competent authorities rather than a proper legal tool. Although most recent annual reports include the selected legal systems among those who have implemented NAFS, the analysis shows critical results consistent with the conclusion reached by FIES Study.
Consequently, preventing irregularities, including fraud and other illegal activities, rests today on managing authorities. Indeed, the duty to establish an effective management and control system is left entirely to managing authorities, who have broad discretion in determining the extent of it, mainly through self-assessment. That is quite a fundamental outcome of the FIES Study.
As for PPP operations, the Study points out that those contracts may vary in risk levels associated with fraud, corruption, and other illegal activities compared to traditional grant schemes based on a combination of two key factors. On the one hand, PPP operations may combine public finance (ESI funds and contracting authority's resources) and private finance, referred to as blending. On the other, differently from traditional grant schemes, the number of players involved may include, at the same time, a private economic operator and a financial intermediate, the interests of whom might, in principle, be aligned with those of the contracting authority since private partners have an expected return on their investments on condition that the project performs in line with what contractually agreed.
For that reason, the Study also proposes a set of preventive measures based on symptoms of irregularities, fraud, or corruption among those already adopted by national legislations and/or managing authorities.
The first step in achieving this objective is to explore if and how managing authorities have (self)-implemented a system of preventive administrative measures involving some private financing. Indeed, the research team has designed a specific survey. Since the project's preliminary findings, it emerged that the information to gather is highly complex. Thus, the research team opted to design and implement a written questionnaire to submit to a list of k-questions to managing authorities to ascertain how effective current measures could be in supporting preventive actions. As an outcome, the heterogeneous array of measures adopted by those who have responded looks consistent with the daily difficulties faced by managing authorities to find effective and efficient methods to enhance fraud prevention. Once more, that situation also appears due to the lack of EU drivers.
As another objective, the Study clarifies the need to enhance coordination and cooperation among European and national managing authorities by drafting a harmonized scheme of risk-assessment indicators and preventive (administrative) measures. This would mean more robust coordination between European Institutions and national managing authorities and a homogeneous anti-fraud preventive system based on (EU) guidelines and standards, leveraging risk assessment and management methodologies. Consequently, the Study claims methods based on symptomatic figures of anomalies managing ESI funds in PPP contracts or financial instruments. Anomalies, here, are to be intended as the risk of fraud, corruption, or maladministration: thus, something potential. Yet – much before any enforcement of norms sanctioning frauds or other figures – it is possible to assess if players' (discretionary) decisions or behaviors taking place in managing ESI funds could be symptoms ("signals") of such risks. Assessment should take place on time, along with the ongoing administrative procedures awarding and performing PPP contracts or financial instruments.
Finally, the ultimate purpose of the FIES Study is to draft a scheme of anti-fraud (or other relevant illegal activities) preventive measures that could be generally implemented and applied by contracting and managing authorities. Such a purpose requires building up a common anti-fraud frame under new guidelines issued by EU Institutions vested with the power to protect EU financial interests: The Commission and OLAF's essential technical support.