EU pre-accession assistance to Turkey: Only limited results so far

Executive summary

I

EU financial assistance planned for Turkey from 2007 until 2020 through the Instrument for Pre-accession Assistance (IPA) amounts to over 9 billion euros. Our objective was to assess the design and effectiveness of the IPA to Turkey, the purpose of which is to align the candidate country with the acquis and strengthen its administrative capacity. We examined the IPA I (2007-2013) and IPA II (2014-2020) programming periods and focused on the priority sectors of the rule of law, governance and human resources (i.e. education, employment and social policies), to which a budget of 3.8 billion euros had been allocated. Due to implementation delays with IPA II, we could only examine IPA I’s implementation, notably through 15 IPA I projects which amounted to 112 million out of the 1.5 billion euros which had been contracted under IPA I for these sectors.

II

We concluded that the IPA objectives were well designed by the Commission, in particular because it properly identified the requirements necessary to progress towards EU accession and made conclusive sector approach assessments. In practice, however, the IPA funds spent insufficiently addressed some fundamental needs in the rule of law and governance sectors, where some critical reforms are overdue. In areas where there was more political will, such as customs, employment and taxation, IPA I projects have contributed to aligning Turkey with the acquis and strengthening its administrative capacity. However, the sustainability of these results is at risk because of the difficulties in spending the available IPA funds and backsliding on reforms. We therefore consider that the IPA’s effectiveness was only limited.

III

As regards the design of the IPA, we found that the Commission set IPA objectives properly because they were specific and consistent with the legal framework. More concretely, the IPA objectives for the rule of law, governance and human resources were relevant and based on needs which Turkey had identified in order to align itself with the acquis and strengthen its administrative capacity.

IV

However, in reality, the funds spent under the IPA I objectives have barely addressed some fundamental needs: the independence and impartiality of justice, the fight against high level corruption and organised crime, press freedom, the prevention of conflicts of interest, and reinforcing external audit and civil society. According to the Commission’s own analysis, progress in these areas has been unsatisfactory for several years, as there is a lack of political will of the Turkish authorities.

V

The Commission decided to implement IPA II through the sector approach, whereby IPA would support sector-wide reforms rather than stand-alone projects. Before applying this new approach, the Commission assessed the sectors’ readiness to absorb IPA II funding. These sector assessments provided for a relevant and conclusive analysis to identify where IPA II could be implemented using the sector approach. However, they were not always comprehensive, notably in the case of three of the five assessment criteria used: Turkey’s donor coordination, sector budget analysis and its performance assessment framework.

VI

In addition to EU funding, IPA conditionality can help to foster the reform process. Despite the continuing unsatisfactory progress highlighted in its Turkey Reports, we found that the Commission had made little use of IPA conditionality to support reforms in the priority sectors where progress was unsatisfactory. In particular, the Commission seldom used conditions such as the option of recentralising the management of IPA projects or corrective measures if project conditions were not met. Furthermore, the possibility of suspending IPA I funding if the principles of democracy and rule of law were not complied with was not explicitly reflected in the IPA II regulations.

VII

As regards the implementation of the IPA, the projects audited generally delivered the intended outputs, which contributed to aligning Turkey with the acquis and strengthening its administrative capacity, even if these were often delayed. We found that the sustainability of these positive results is at risk, mainly due to a lack of political will, worsened by the large-scale dismissals, suspensions of public officials and restrictions on civil society.

VIII

There were shortcomings in the monitoring of project performance, such as projects not being selected by the Commission’s ROM framework, and indicators which were sometimes irrelevant or unreliable, or not accompanied with a relevant baseline.

IX

Another source of concern is that due to widespread programming and implementation backlogs, the IPA was significantly delayed. This led to reductions in the funding and time available for the Turkish authorities to implement subsequent IPA II budget and projects, and will further contribute to delaying project tendering and contracting. The reasons for these delays were known: weak administrative capacity at some ministries for preparing project proposals, the transition to the sector approach and excessive staff turnover at the CFCU, which manages most of the IPA funds spent in Turkey.

X

The report sets out five measurable recommendations to improve the design and implementation of pre-accession assistance to Turkey. Furthermore, the audit results will feed into the Commission's mid-term review of IPA II, as well as into the design of future pre-accession assistance programmes for the benefit of the EU enlargement countries.

Introduction

01

Located at the crossroads of Europe and the Middle East (Figure 1), the Republic of Turkey has traditionally played a leading role in international relations. It is a key EU partner for defence, foreign policy and trade. In the context of the refugee crisis, Turkey has gained even more importance for the EU and vice versa (e.g. visa liberalisation dialogue, the three-billion euro ‘Facility for Refugees in Turkey’).

02

Counting over 80 million inhabitants, Turkey has one of the biggest Muslim populations in the world, large Kurdish and Roma communities, and a number of religious minorities (Christians, Jews).

03

Since the 1950s, Turkey has slowly but consistently moved towards the EU; it recognises the European Court of Human Rights’ jurisdiction and, since 1999, it has been a candidate country for EU membership¹. Since the 2002 general elections, the ruling party has been the conservative ‘Justice and Development Party’ or ‘AKP’², which has run the country under the leadership of Prime Minister and, since 2014, President of the Republic, Recep Tayyip Erdoğan.

04

Meanwhile, the process of EU accession negotiations has been notoriously slow and, by 2017, only 16 out of 35 chapters had been opened for accession negotiations (only one chapter had been closed). Annex II shows the status of Turkey’s accession process by chapter.

05

EU pre-accession assistance accompanies this accession process and consists of the Instrument for Pre-accession Assistance (IPA), which aims at supporting candidate countries in their progressive alignment with EU standards and policies with a view to EU membership, commonly referred to as the acquis (see Box 1).

06

In partnership with the Turkish authorities, pre-accession assistance consists of the European Commission funding projects in a wide range of policy areas, such as the rule of law, governance, agriculture, infrastructure (e.g. environment, transport), and human resources development through education, employment and social policies. With the planning of IPA I allocations (2007-2013) of 4.58 billion euros and IPA II allocations (2014-2020) of 4.49 billion euros (see Annex III), Turkey is the top beneficiary country of EU aid outside the EU. The Commission manages the IPA assisted by the EU Member States, as members of the IPA II Committee³.

07

Whilst the Commission bears the overall responsibility for IPA management, it has entrusted the Turkish authorities with the responsibility of managing the major part of the IPA under the ‘indirect management’ mode of EU budgetary management. With this mode of budgetary management, under its own responsibility and in accordance with the principle of sound financial management, the Commission has delegated budgetary management to the Turkish authorities⁴. This decentralised approach towards IPA management is akin to the shared management of most of the EU funds, such as the European Regional Development Fund or the European Social Fund, by the Commission and the EU Member States.

08

In Turkey, this approach requires the Turkish authorities to undertake the planning, implementation, monitoring and audit of IPA funds under a combined set of EU and national rules. Whereas the National IPA Coordinator (NIPAC) is responsible for coordination between the different Turkish stakeholders, it is the Treasury’s Central Finance and Contracts Unit (CFCU) which manages 87.2 % of IPA I funds and 84.2 % of IPA II funds⁵ under the supervision of a National Authorising Officer (NAO).

09

The Commission implemented IPA I using the traditional project approach, by making funding decisions on individual projects. The sector approach is the Commission’s strategic choice for implementing IPA II. Under this approach, funding decisions are based on national sector policy objectives. The aim is to complement government efforts in a sector, thereby increasing synergies and national ownership over public policy and decisions on resource allocations within a sector. IPA funding would therefore focus on achieving national sector policy objectives and results which are relevant for accession⁶. The sector approach is applied on a sector-by-sector basis, after an assessment by the Commission.

10

Since 2013, reforms in Turkey have been backsliding. Particularly since the July 2016 military coup attempt, Turkey’s resort to a state of emergency and extensive suspensions, dismissals and detentions has undermined Turkey’s position vis-à-vis the EU. These repressive post-coup measures, which the Turkish government defended as anti-terror measures, have affected the whole spectrum of Turkish society: Judiciary, police, gendarmerie, army, civil service, academia, teachers, lawyers, the media and the business community⁷.

11

The sheer scale of these measures has affected Turkey’s administrative capacity, as well as complicated and delayed its alignment with the acquis. Box 2 features three examples of such measures in the three sectors covered by this audit. In November 2016, amid a context of souring political relations between the EU and Turkey, the European Parliament called on the Commission and the EU Member States to initiate a temporary freeze of the ongoing accession negotiations with Turkey⁸.

Audit scope and approach

12

Our objective was to assess the design and the effectiveness of IPA implementation in Turkey, the purpose of which was to align the candidate country with the acquis and strengthen its administrative capacity. The audit focused on answering the following question: ‘Has EU pre-accession assistance to Turkey been well designed and effective?’ This question was broken down into two main questions:

1. Was the IPA in Turkey well-designed by the Commission?
2. Was the IPA effective in supporting its priority sectors in Turkey?

13

The ECA’s last audit report on pre-accession assistance to Turkey was published in 2009¹². Since then, the IPA has been deployed in two consecutive programming periods and EU-Turkey relations have significantly evolved. This report should feed into the Commission’s mid-term review of IPA II, as well as the EU’s strategy regarding allocations for pre-accession assistance to Turkey under IPA II (2014-2020) and the forthcoming programming period.

14

We focused on three priority sectors defined by the Council and valid for both the IPA I (2007-2013) and IPA II (2014-2020) programming periods combined, which represents a total allocation of 3.8 billion euros¹³:

1. The rule of law, including fundamental rights, home affairs and justice, for a total of 1.2 billion euros;
2. Governance, including support to civil society, public administration reform and public finance management (PFM), for a total of 1.6 billion euros; and
3. Human resources, including education, employment and social inclusion, for a total of 1 billion euros.

15

Under IPA I, the EU funds contracted to these sectors amounted to 1.5 billion euros. Out of these, we examined 15 projects worth 112 million euros in total (7.5 %)¹⁴, which constituted our sample. We selected these projects so as to have balanced coverage of the different policy areas and geographical regions which received pre-accession assistance in the sectors of the rule of law, governance and human resources. We looked at project implementation, as well as the types of implementing partners (Turkish or UN organisations).

16

An important part of our work was to assess what the EU programmes and projects had achieved in terms of results¹⁵. We gathered evidence through desk review and interviews with various Commission departments, the EU Delegation in Ankara, Turkish authorities, international organisations and civil society organisations (CSOs)¹⁶. The audit included a two-week visit to Turkey in March 2017. It did not include support provided through the ‘Facility for Refugees in Turkey’¹⁷.

17

Any reference to IPA in this report covers both IPA I and IPA II, unless otherwise specified. Due to widespread programming and implementation delays, we could not assess IPA II projects in the sectors selected for this audit, which represent 2 billion euro in IPA II allocations.

Observations

The Commission designed the IPA objectives well, but it encountered difficulties in supporting sector-wide reforms and made limited use of conditionality

18

In this section, we assessed whether the IPA in Turkey had been well-designed by the Commission to support the reforms necessary for progressing towards EU accession. In particular, we assessed whether the Commission:

1. Aligned its strategic objectives for Turkey with the IPA’s regulatory objectives and addressed Turkey’s needs in the audited sectors;
2. Appropriately applied the sector approach to channel IPA II funding, on the basis of relevant, conclusive and comprehensive IPA sector assessments; and
3. Set and applied relevant conditions in order to foster the necessary reforms in Turkey.

The Commission set the IPA objectives properly but, in practice, some fundamental needs in the rule of law and governance sectors were insufficiently addressed

19

The Commission set specific IPA programme objectives in its strategic papers, which consist of strengthening Turkey’s ability to fulfil EU membership obligations and support for political reforms, as well as economic, social and territorial development¹⁸. These strategic IPA objectives were further detailed in the Commission’s financing agreements with the Turkish authorities. All these objectives were compliant with the IPA’s legal basis, which sets out the IPA’s legal objectives with respect to aligning the candidate country with the acquis, including the Copenhagen criteria, and strengthening its administrative capacity¹⁹.

20

The IPA’s objectives for the three priority sectors of the rule of law, governance and human resources were relevant, as they were based on needs which Turkey had clearly identified in its national plans for the alignment with the acquis, multi-annual development plans, and more than 40 national strategies developed since 2007 to strengthen its administrative capacity.

21

We looked at IPA I funds spent in the three selected priority sectors and found that, in practice, some fundamental reforms in the rule of law and governance sectors necessary for Turkey’s accession²⁰ had not been sufficiently addressed mainly due to the lack of political will of the Turkish authorities.

Fundamental needs insufficiently addressed in the rule of law sector

22

IPA support for the rule of law sector was designed to bring a wide range of sensitive state bodies, such as ministries, agencies, police forces and the judiciary, closer to the acquis, mainly by means of advice and training in areas identified in Turkey’s national plans for the alignment with the acquis, multi-annual development plans and national strategies.

23

However, only 4.4 % of the total IPA I amounts contracted in the rule of law sector addressed the following policy areas, the progress of which has consistently been highlighted as unsatisfactory in the Commission’s annual Turkey Reports since 2014²¹:

1. the independence and impartiality of justice²² (7.6 million euros contracted);
2. the fight against corruption and organised crime²³ (9.5 million euros); and
3. press freedom²⁴ (2.7 million euros; see Box 3).

24

An additional sign that the Commission and the Turkish authorities did not pay sufficient attention to these policy areas is the absence of indicators to measure progress in preventing conflicts of interest²⁵ and the fight against high level corruption²⁶.

Fundamental needs insufficiently addressed in the governance sector

25

Within the governance sector, the Commission supported very specific needs in terms of public administration reform and in a few components of the budget cycle, such as tax collection, internal audit and statistics, mainly through advice and training.

26

However, despite the importance of external audit and civil society organisations in the accession process and their role in the fight against corruption and organised crime, the IPA did not address the reinforcement of external audit and dealt too little with Turkey’s capacity to engage with civil society²⁷. In spite of the magnitude of Turkish CSO needs, of which the Commission was aware, the amount allocated remained low due to limited absorption capacity by the Turkish authorities (see Box 4).

Despite some weaknesses, the Commission’s sector approach assessments provided relevant information to identify where the sector approach could be implemented

27

Whilst the legal basis of IPA II does not explicitly define the sector approach (see paragraph 9) and this approach is not legally binding for the beneficiary³⁰, the Commission included it in its enlargement strategy³¹. The country’s readiness to adopt a sector approach is determined through sector assessments carried out by the Commission in partnership with the Turkish authorities. According to the Commission, the sector approach is a ‘continuous process which needs to be carried out all through the programming cycle’³². This assessment is based on five key assessment criteria:

1. Well-defined national sector strategies;
2. Institutional setting, leadership and capacity for implementation of the sector strategy;
3. Donor coordination, including at sector level³³;
4. Policy implementation based on sector budget analysis and realistic sector allocations; and
5. Performance assessment frameworks to monitor performance.

28

For the audited sectors, the sector assessments allowed the Commission to conclude in 2016 that only the human resources sector and, within the rule of law sector, the sub-sectors justice and home affairs were ready to absorb IPA II funding through the sector approach³⁴. Although the sector assessments gave a relevant and consistent sector analysis based on five key criteria, through our review we found the following weaknesses:

1. For the rule of law sector, the Commission’s assessment on home affairs was not conclusive as regards whether Turkey was actually ready for the sector approach; and
2. The Commission’s sector assessments did not properly cover the impact of some significant weaknesses in Turkey’s public administration (see Box 5) on three of the five key assessment criteria (see paragraph 27).

29

Furthermore, we found that the Commission’s sector assessments could not yet take into account the impact on Turkey’s administrative capacity of the large-scale dismissals and suspensions that followed the July 2016 coup attempt (see Box 2).

The Commission made little use of IPA conditionality to support the reform process in priority sectors

30

In addition to funding, policy and political dialogue, another means at the disposal of the Commission to support reforms in priority sectors in Turkey is conditionality. Conditionality is the setting and use of conditions prior to contracting or paying assistance. In the case of the IPA, the Commission’s successive enlargement strategies repeatedly referred to ‘strict conditionality’ but without defining the term specifically³⁹. Under the IPA, conditionality can be used at political level, notably through opening and closing benchmarks regarding accession negotiations, as well as at project level.

31

We reviewed the IPA legal framework to identify the different types of conditionality available. We examined the extent to which the Commission actually used these in Turkey in order to support the reform process in the priority sectors of the rule of law, governance and human resources.

32

At political level, the EU legislator, as the budgetary authority, has the power to reduce future assistance. In addition to this, under IPA I, without the need to suspend accession negotiations, the Council had the possibility of suspending IPA assistance if the principles of democracy and rule of law had not been complied with⁴⁰. Recently, the European Parliament has called for a suspension of all pre-accession funds if accession negotiations are suspended⁴¹. However, we found that, under IPA II, the EU legislator had not explicitly provided for such a possibility⁴².

33

Under the IPA regulations, the Commission may use two major types of conditionality to foster reforms:

1. At the end of 2017 and 2020 (for IPA II), it could decide not to award the performance reward to the IPA beneficiary country for progress made towards EU alignment, efficient IPA implementation and the achievement of good results⁴³; and
2. It could ‘recentralise’ the management of IPA projects, whereby the Commission can effectively take over their management from the national authorities.

At the time of the audit, despite the continuing unsatisfactory progress highlighted in its Turkey Reports (see paragraph 23), the Commission had not yet taken action regarding the performance award. However, it has subsequently decided to take over the management of 18 million euro for CSO projects, which it had originally planned to be managed by the Turkish authorities⁴⁴.

34

At project level, the Commission may set project conditions prior to contracting or payment and, if these are not met, it can take corrective measures, such as cancelling the project or reducing its scope and funding. The Commission has actually set project conditions in four out of the 15 projects audited; these four projects were all in the rule of law sector. The Commission did not set conditions⁴⁵ for one project in this sector⁴⁶, or for any of the five governance and five human resources projects. We found three projects where the Commission decision did not set project conditions prior to contracting and this negatively affected the project results (see Box 6).

In spite of implementation delays, IPA projects delivered the intended outputs, but their sustainability is at risk due to a lack of political will

35

From 2007 onwards, the IPA has been the only EU funding instrument established to assist Turkey in its alignment with the acquis and strengthen its administrative capacity. We assessed the effectiveness of the IPA’s implementation in the priority sectors of the rule of law, governance and human resources, and considered whether the Commission and the Turkish authorities had:

1. delivered the intended project outputs and monitored the results;
2. delivered these outputs without delays or had mitigated the delays; and
3. produced sustainable results.

36

We assessed 15 IPA I projects, which were all managed under indirect management and had Turkish public organisations as their end beneficiaries⁴⁹. Out of our sample, 14 had been implemented to a point where it was possible to assess the results achieved⁵⁰.

The IPA generally delivered the intended outputs, but these were often delayed

37

Our work was based on our analysis of monitoring indicators, contractor reports, monitoring visit reports from the EUD delegation in Ankara and the Turkish authorities, minutes of steering committees or other equivalent project management bodies, ROM reports⁵¹, site visits⁵², and interviews with the Commission and the project beneficiaries⁵³.

38

Overall, we found that in 13 out of these 14 IPA I projects, the Commission and the Turkish authorities had delivered the contractually planned project outputs. Hence, these projects strengthened the country’s administrative capacity in the relevant sectors. However, eight out of the 14 ongoing projects were delayed (see Annex IV).

39

Whilst the Commission and the Turkish authorities had monitored project outputs, our review of the available monitoring documentation identified the following shortcomings in performance monitoring:

1. The ROM framework, as applied for Turkey, included neither supply contracts, nor contracts in the human resources sector⁵⁴;
2. In six out of the 15 IPA I projects audited, results indicators were sometimes vague and not reliable. Moreover, the related baseline values of these indicators were often missing, so that results could not be measured against the initial situation⁵⁵. Box 7 shows an example of such a project.

IPA projects for human resources

40

In order to align Turkey with Chapter 19 – Social policy and employment, the IPA supported education, employment and social inclusion projects. These were aimed at capacity building, as was the case for the Social Security Institution in its fight against unregistered work (see project No 13, Box 6), or to meet the needs of specific target groups within the Turkish population (see projects Nos 11, 12, 14 and 15). In the case of the latter projects, the target groups were given the chance to use learning equipment (e.g. curricula, IT equipment), as well as to receive counselling and training:

1. Women dependent on unregistered work in the hazelnut-growing region of Trabzon (project No 11);
2. Young entrepreneurs and small businesses in the capital region of Ankara (projects Nos 12 and 14); and
3. Roma children throughout the country (project No 15, see Box 7).

41

The five audited projects were fully delivered, although three were delayed by more than two months (projects Nos 11, 13 and 15⁵⁶). Whilst these delays had no impact on project results, they were symptomatic of the weak administrative capacity of the Turkish Ministry of Labour and Social Security to implement IPA projects on time (see paragraph 46).

IPA projects for good governance

42

In this sector, IPA funded a limited number of bespoke projects where the Turkish authorities were willing to use IPA funds in order to align Turkey with the acquis⁵⁷ and strengthen its administrative capacity. The audited projects were aimed either at strengthening public sector-civil society cooperation (see project No 8, Box 6), or building capacity in public institutions such as:

1. The NAO, for supervising IPA management in Turkey (project No 6);
2. The Revenue Administration, for fighting tax evasion through undeclared wages (project No 7, which was not yet implemented at the time of the audit);
3. The Ministry of the Interior for strengthening local planning (project No 9); and
4. The Turkish Customs Administration (project No 10, see Box 8).

43

Projects No 6, 9 and 10 implemented in the governance sector were delivered on time. These projects contributed to good governance in Turkey’s public finances (PFM) and its reforms in its administration. However, in the case of project No 8 (see Box 6), the impact of the delay was only mitigated by the Commission authorising a modification of the project design and an 18 month extension, which is symptomatic of the MEUA’s weak administrative capacity to timely implement IPA projects (see paragraph 46).

IPA projects for the rule of law

44

With a view to aligning Turkey with the acquis⁵⁸ and strengthening administrative capacity in selected areas within the rule of law, the five projects audited aimed at building capacity in:

1. Justice: Setting up a network of judicial spokespersons (project No 2, see Box 9) and providing expertise and training to professionals in the field of criminal justice (project No 4);
2. Home affairs: Mine clearance and increasing border surveillance capacity on Turkey’s Eastern borders (project No 1), setting up a network of civilian oversight committees (project No 3), and providing IT equipment, expertise and training for the fight against money laundering and terrorist financing (project No 5).

45

Whilst four of the five projects audited were delivered, project No 1 was not delivered as intended and did not achieve its expected results (see Box 10). Furthermore, four rule of law projects were delayed by more than two months (projects No 1, 2, 3 and 5)⁵⁹. In one case, this delay had a serious impact on project results (project No 1) and indicated that the Turkish authorities were not sufficiently prepared to implement the project. In another case (project No 5), the impact of the delay could be mitigated by the Commission authorising a five-month extension. Overall, these delays were symptomatic of the weak administrative capacity of the Ministry of Interior and Ministry of Justice to timely implement IPA projects (see paragraph 46).

The IPA’s programming was significantly delayed

46

Apart from the IPA I project implementation delays, the IPA I programming delays were significant and harmful because they have caused reductions in the remaining funding and time available for the Turkish ministries to implement the subsequent IPA II budget and projects.

47

For instance, in 2017, under the 2014 IPA Financing Agreement, the Turkish authorities still had to contract more than 93 % (see Table 1), which indicates a significant backlog in implementation. This backlog was already visible on the basis of the size of the decommitments with regard to the two previous financing agreements, which amounted to more than 110 million euros⁶⁰.

Table 1

Percentages of decommitments and funds to be contracted out of annual IPA funds, per programming year

Financing Agreement	EU funding	Amount decommitted	% decommitments	% to be contracted
2012	225 749 161	56 437 290	25 %	Expired
2013	236 750 014	53 979 003	23 %	Expired
2014	366 040 000	Not yet established	N.a.	93 %
2015	255 100 000	Not yet established	N.a.	92 %
2016	477 890 000	Not yet established	N.a.	100 %

Source: Commission, September 2017.

48

The reasons for this backlog are persistent and are thus well known to the Commission and the Turkish authorities⁶¹. In 2017, the three main reasons are as follows:

1. According to both the CFCU and the EU Delegation, weak administrative capacity at some ministries when preparing project proposals, particularly open tenders, which caused major delays;
2. Turkey’s difficulties in ensuring a smooth transition from IPA I to IPA II, in particular when moving to a sector approach and handling more demanding responsibilities for the lead institutions’ operating structures shown in Annex VI, so that Turkey had to manage projects which were increasingly complex and numerous;
3. Excessive staff turnover at the CFCU. As shown in Figure 2, the CFCU’s annual staff turnover since 2002 has often been above 20 %.

49

The CFCU’s persistent staffing problems are a critical bottleneck in the IPA’s future implementation: Staff turnover is high and frequent recruitment means that significant working time has to be invested in coaching and training newcomers.

50

Whilst the NIPAC coordinates and monitors all IPA programmes with a view to facilitating implementation, the NAO accredits monitors and controls the CFCU, as well as the IPA operating structures in Turkey⁶². Although they were clearly in a position to act, neither the NIPAC, nor the NAO, took timely ownership of the IPA’s widespread programming delays in sufficient time. Therefore, staffing problems remained. These difficulties in addressing the CFCU’s excessive staff turnover effectively will further contribute to delays in project tendering and contracting.

51

It was only in the second half of 2016 that the Treasury started conducting detailed workload analyses, as well as staff recruitment and retention strategies for each of the IPA operating structures, with a view to reducing the accumulated backlogs⁶³. Hence, it is too early to assess the results of these measures.

Project sustainability is at risk due to a lack of political will

52

In order for the IPA to fulfil its objectives of strengthening Turkey’s administrative capacity and aligning the country with the acquis, it is necessary that the positive contributions of IPA projects as described in paragraphs 40 to 44 (e.g. capacity building, dissemination of EU good practice) are sustained overtime. For instance, this is the case when legislative or administrative reforms are put in place and maintained, codes of conduct, guides and handbooks are kept in use and the staff trained remain in active duty in the area for which they have been trained for.

53

We assessed the sustainability of our sample of 15 projects through an in-depth review of project documentation, site visits and interviews with project stakeholders. Amongst the 14 projects in the sample which had been implemented, we found that the Commission and the Turkish authorities had in six cases managed to convert project outputs into results likely to be sustainable: One rule of law, three governance and two human resource projects⁶⁴.

54

Box 11 shows an example of an audited governance project and explains why it is likely to be sustainable.

55

However, for eight out of the remaining 13 implemented projects, we found that the project outputs were at risk or unlikely to be sustainable⁶⁵. The reasons are summarised in Table 2.

Table 2

Implemented PA I projects in Turkey: Reasons for sustainability at risk

Project No	Lack of political will	High staff turnover	Weak administrative capacity	Absent or insufficient conditionality
1	✗	✗	✗	−
2	✗	✗	−	−
3	✗	✗	✗	−
4	✗	✗	−	✗
8	✗	−	✗	✗
11	−	−	✗	−
13	✗	−	−	✗
15	✗	✗	−	−

Source: ECA, September 2017.

56

We found that the main reason these eight IPA I projects were at risk of not being sustainable was the lack of political will, which has worsened in the context of Turkey’s backsliding (e.g. large-scale dismissals and suspensions of public officials, restrictions on civil society). An example of such a project is shown in Box 12 and Picture 3.

57

Additionally, the reductions in the remaining funding and time available for the Turkish ministries to implement IPA projects (see paragraphs 46 and 47) will reduce their capacity to sequence subsequent contracts related to the same project or meet needs not yet addressed by the IPA or Turkey. Hence, Turkey’s programming delays also directly affect the overall IPA project sustainability.

Conclusions and recommendations

58

We concluded that the IPA objectives were well designed by the Commission, in particular because it properly identified the requirements necessary to progress towards EU accession and made conclusive sector approach assessments. In practice, however, the IPA funds spent insufficiently addressed some fundamental needs in the rule of law and governance sectors, where some critical reforms are overdue. In areas where there was more political will, such as customs, employment and taxation, IPA I projects have contributed to aligning Turkey with the acquis and strengthening its administrative capacity. However, the sustainability of these results is at risk because of the difficulties in spending the available IPA funds and backsliding on reforms. We therefore consider that the IPA’s effectiveness was only limited.

59

As regards the design of the IPA, we found that the Commission set IPA objectives properly because they were specific and consistent with the legal framework. More concretely, the IPA objectives for the rule of law, governance and human resources were relevant and based on needs which Turkey had identified in order to align itself with the acquis and strengthen its administrative capacity (paragraphs 19 to 20).

60

However, in reality, the funds spent under the IPA I objectives have barely addressed some fundamental needs: the independence and impartiality of justice, the fight against high level corruption and organised crime, press freedom, the prevention of conflicts of interest, and reinforcing external audit and civil society. According to the Commission’s own analysis, progress in these areas has been unsatisfactory for several years, as there is a lack of political will of the Turkish authorities (paragraphs 21 to 26).

Recommendation 1 – Better target IPA funds under the objectives set

From the 2018 IPA programme onwards, the Commission should better target IPA funds in areas where reforms are overdue and necessary for credible progress towards EU accession, in particular for the independence and impartiality of justice, fight against high level corruption and organised crime, reinforcement of press freedom, prevention of conflicts of interest and strengthening external audit and civil society.

Target implementation date: From the 2018 IPA programme onwards.

61

The Commission decided to implement IPA II through the sector approach, whereby IPA would support sector-wide reforms rather than stand-alone projects. Before applying this new approach, the Commission assessed the sectors’ readiness to absorb IPA II funding. These sector assessments provided for a relevant and conclusive analysis to identify where IPA II could be implemented using the sector approach. However, they were not always comprehensive, notably in the case of three of the five assessment criteria used: Turkey’s donor coordination, sector budget analysis and its performance assessment framework (paragraphs 27 to 29).

Recommendation 2 – Improve the sector approach assessments

In its next update of its sector approach assessments, the Commission should comprehensively cover all the key features of Turkey’s donor coordination, sector budget analysis and, in particular, its performance assessment framework.

Target implementation date: 31 March 2019.

62

In addition to EU funding, IPA conditionality can help to foster the reform process. Despite the continuing unsatisfactory progress highlighted in its Turkey Reports, we found that the Commission had made little use of IPA conditionality to support reforms in the priority sectors where progress was unsatisfactory. In particular, the Commission seldom used conditions such as the option of recentralising the management of IPA projects or corrective measures if project conditions were not met. Furthermore, the possibility of suspending IPA I funding if the principles of democracy and rule of law were not complied with, was not explicitly reflected in the IPA II regulations (paragraphs 30 to 34).

63

As regards the implementation of the IPA, the projects audited generally delivered the intended outputs, which contributed to aligning Turkey with the acquis and strengthening its administrative capacity, even if these were often delayed. We found that the sustainability of these positive results is at risk, mainly due to a lack of political will, worsened by the large-scale dismissals, suspensions of public officials and restrictions on civil society (paragraphs 35 to 38, 40 to 45 and 52 to 57).

Recommendation 3 – Increase the use of conditionality

Given the impact that backsliding is already having on project sustainability in Turkey, the Commission should increase the use of political and project conditionality by:

1. Making proposals to the IPA II Committee to adjust total IPA II allocations for year ‘N’, including re-directing or reducing IPA II funds in order to address cases of backsliding in the rule of law and governance sectors identified in its annual Turkey Report in year ‘N-1’;
2. Deciding, by the end of 2017 and 2020, whether to award the performance reward to Turkey. This decision should accurately reflect the progress made towards enlargement, efficient IPA implementation and the achievement of good results;
3. Making progressively more use of the direct management mode to address fundamental needs where there is a lack of political will, in particular, for the fight against high level corruption and organised crime, reinforcement of press freedom, prevention of conflicts of interest and strengthening civil society.
4. For new projects and when applicable, setting conditions in the form of minimum requirements to support the timely delivery of expected outputs and sustainability. When these conditions are not met, this should lead to corrective measures (e.g. suspension of payment, project cancellation).

Target implementation date: (a) from 31 December 2018 onwards; (b): 31 December 2018 and 31 December 2020; (c) and (d): 31 December 2018.

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There were shortcomings in the monitoring of project performance, such as projects not being selected by the Commission’s ROM framework, and indicators which were sometimes irrelevant or unreliable, or not accompanied with a relevant baseline (paragraph 39).

Recommendation 4 – Improve monitoring of project performance

The Commission should widen the coverage of its ROM reports concerning EU-funded operations in Turkey and improve the relevance and reliability of its project indicators by including the availability of baseline data, when applicable.

Target implementation date: From 2018 onwards.

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Another source of concern is that due to widespread programming and implementation backlogs, the IPA was significantly delayed. This led to reductions in the funding and time available for the Turkish authorities to implement subsequent IPA II budget and projects, and will further contribute to delaying project tendering and contracting. The reasons for these delays were known: weak administrative capacity at some ministries for preparing project proposals, the transition to the sector approach and excessive staff turnover at the CFCU, which manages most of the IPA funds spent in Turkey (paragraphs 46 to 51).

Recommendation 5 – Reduce backlogs by applying indirect management selectively

Under IPA II, the Commission should apply indirect management selectively, taking into account the volume of funds involved, the complexity of the projects to be prepared and tendered by the Turkish authorities, and the CFCU’s capacity.

Target implementation date: Progressively, starting immediately.

This Report was adopted by Chamber III, headed by Mr Karel PINXTEN, Member of the Court of Auditors, in Luxembourg at its meeting of 6 February 2018.

Acronyms and abbreviations

CFCU: Central Finance and Contracts Unit

CSO: Civil Society Organisation

IPA: Instrument for Pre-accession Assistance

MEUA: Ministry for EU Affairs

NAO: National Authorising Officer

NIPAC: National IPA Coordinator

PFM: Public finance management

ROM: Results-oriented monitoring

UNDP: United Nations Development Program

Audit Team

The ECA’s special reports set out the results of its audits of EU policies and programmes, or of management-related topics from specific budgetary areas. The ECA selects and designs these audit tasks to be of maximum impact by considering the risks to performance or compliance, the level of income or spending involved, forthcoming developments and political and public interest.

This performance audit was carried out by Audit Chamber III External actions/Security and justice, headed by ECA Member Karel Pinxten. The audit was led by ECA Member Bettina Jakobsen, supported by Katja Mattfolk, Head of Private Office and Kim Storup, Private Office Attaché; Alejandro Ballester Gallardo, Principal Manager; Dennis Wernerus, Head of Task; Nicola Berloco, Thomas af Hällström, Cyril Messein and Alexandre Tan, Auditors. Fiona Urquhart provided linguistic support.

Contact

EUROPEAN COURT OF AUDITORS
12, rue Alcide De Gasperi
1615 Luxembourg
LUXEMBOURG

Tel. +352 4398-1
Enquiries: eca.europa.eu/en/Pages/ContactForm.aspx
Website: eca.europa.eu
Twitter: @EUAuditors

More information on the European Union is available on the internet (http://europa.eu).

Luxembourg: Publications Office of the European Union, 2018

PDF	ISBN 978-92-872-9550-7	ISSN 1977-5679	doi:10.2865/222335	QJ-AB-18-006-EN-N
HTML	ISBN 978-92-872-9555-2	ISSN 1977-5679	doi:10.2865/361346	QJ-AB-18-006-EN-Q

© European Union, 2018.

For any use or reproduction of photos or other material that is not under the European Union copyright, permission must be sought directly from the copyright holders.

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