EY working with the EU institutions - United States

EY working with the EU institutions


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Contents 5

Building trust by improving accountability

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Policymaking for impact

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Doing more with less

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Igniting growth, creating jobs

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Getting the best out of European Structural and Investment Funds

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Toward a sustainable and connected Europe

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Prosperous world, stable Europe

Our commitment to EU institutions This is a time of challenge and change for the European Union (EU). To emerge stronger and more prosperous than before, the EU aims to steer its economy back to growth and competitiveness and to deepen reforms that strengthen the single market. It aspires to policies that are aligned with the real needs of citizens and that bring demonstrable impact. It seeks to make the world and Europe more prosperous and stable by strengthening its role as a global player. In short, it aims to build a stronger Europe equipped to address the challenges of a changing world. The Juncker Commission has defined an ambitious strategy founded on 10 key priorities to achieve these aims,

and EY has a role to play in helping to provide it. EY has worked with the EU institutions and agencies over the last 25 years, building a relationship rooted in deep collaboration, shared priorities and a mutual passion for a prosperous, stable and united Europe. But a lot still needs to be done. At EY, our purpose is to build a better working world for our clients, our people and our communities. We strive to help create a legacy of improved business performance, confidence and trust. A global mindset, diversity and a collaborative culture inspire EY professionals to ask better questions, co-create more innovative answers and provide long-lasting results.

For EY, a better working world also means collaborating with EU institutions on answering big, complex issues and helping provide a growing, stable, smart, sustainable and united Europe. We stand committed to using our international experience, network of relationships in government and private sector insights to support the EU institutions in attaining this Europe.

Alessandro Cenderello EU Institutions Leader alessandro.cenderello@ be.ey.com

Supporting the EU around the world EY member firms help organizations around the world to manage a broad range of policy and business issues. EY draws on a global workforce of 211,450 people. Our member firms are organized into 28 Regions, which are grouped into four geographic Areas: Americas; Europe, Middle East, India and Africa (EMEIA); Asia-Pacific; and Japan. Global coverage: EY people and member firm offices

65,457

102,176

36,116

7,701

Americas

Europe, Middle East, India and Africa (EMEIA)

Asia-Pacific

Japan

Information taken from EY’s Global review 2015 EY working with the EU institutions

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EY presence in Member States EY presence in candidate countries

EY in the EU

EY has a presence in every Member State of the EU.

Meet the EU team EU-28 country coordinators and contact points Austria

Elfriede Baumann [email protected]

Belgium

Joris De Smedt [email protected]

Bulgaria

Milen Raikov [email protected]

Croatia

Tauno Olju [email protected]

Cyprus

Gabriel Onisiforou [email protected]

Czech Republic

Romana Smetankova [email protected]

Denmark

Jonas Groes [email protected]

Estonia

Keiu Roa [email protected]

Finland

Kaj Tyopponen [email protected]

France

Marie Brunagel [email protected]

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Germany

Poland

Greece

Portugal

Hungary

Romania

Ireland

Slovakia

Italy

Slovenia

Latvia

Spain

Lithuania

Sweden

Luxembourg

United Kingdom

Malta

EU Services general mailbox:

Endre-Sandor Erdödi [email protected]

Ioanna Kokkinou [email protected]

Timea Palvolgyi [email protected]

Derval Cummins [email protected]

Francesca Migliavacca [email protected]

Renate Strazdina [email protected]

Ruta Makareviciute [email protected]

Pierre Mangers [email protected]

Simon Lee Barberi [email protected]

Netherlands

Sacha Koppert [email protected]

Agnieszka Bryl [email protected]

Luis Florindo [email protected]

Michele Giove [email protected]

Vladimir Kastier [email protected]

Lidija Sinkovec [email protected]

Fernando Lillo Cuevas [email protected]

Linda Andersson [email protected]

Jackie Harvey [email protected]

[email protected]

Building trust by improving accountability

The EU has stated its strong commitment to making its institutions and agencies more transparent and accountable, and to ensuring that EU funds are spent properly. At EY, we are dedicated to this aim and ideally placed to help the European Institutions increase accountability. As the market leader in providing assurance services to the EU, we perform more audits for more Directorates-General (DGs) than any other firm. Having provided assurance services to European institutions for over 25 years, our team of audit professionals at the Center of Excellence for the audit of EU funds is highly professional in performing audit assignments in an EU context. Our auditors cover a full range of audit and audit-related tasks and have extensive experience in different EU policy areas and budget implementation modes, allowing us to match the needs and requirements of each institution. All our professionals dedicated to audits of EU funding receive regular audit training which is tailored to the specific contexts of the audits they carry out. Our services include: Financial audits: Many DirectoratesGeneral count on the work of framework contract auditors to obtain assurance on the legality and regularity of expenditure. We audit EU-funded activities on

behalf of various bodies, for example, the International Cooperation and Development (DG DEVCO), the European External Action Service (EEAS), the Directorate-General for Budget (DG BUDGET), the Directorate-General for Regional and Urban Policy (DG REGIO) and the SESAR Joint Undertaking. For each audit, the audit program is based on the applicable regulations and further adjusted to its specific context. Furthermore, our teams also carry out audits of annual accounts of EU agencies. Systems audits: Within our framework contracts with the European Commission, we also carry out systems audits of organizations or projects. Systems audits are often performed in combination with financial audits of beneficiaries, with the objective of determining whether the internal control system set up and operated by a project was suitably designed and effectively operated. They may also be performed at the level of authorities, whose internal control system for managing EU funds is examined. First-level controls for beneficiaries of EU funds: We also help organizations certify expenses incurred in an EU-funded

project. Our involvement consists of verifying expenses as requested by the organization implementing the project. The latter benefits from our excellent understanding of EU requirements and our extensive experience working in an EU context in policy areas such as research and development. Institutional compliance assessments and pillar assessments: Before organizations can cooperate with the European Commission under indirect management, they must “pass” a comprehensive assessment of their main operations. The institutional compliance assessment covers up to seven pillars and is performed within an assessment framework established by the commission. Our long-standing experience in performing pillar assessments for the European Commission — and our extensive technical knowledge in the assessment pillars — ideally positions us to help organizations during the important step of institutional compliance assessments. Over the past few years, EY has performed more than 70 organizational assessments of different types of organizations in various locations.


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“I believe that, at its heart, there has been a crisis of confidence and a breakdown in trust on the part of citizens in some of our most important financial and governmental institutions that can only be addressed by effective measures to improve EU-level governance. But these measures need to make adequate provisions for ensuring transparency, accountability and audit. Not only because problems of governance, transparency and accountability contributed to the crisis but, more importantly, because they are key to rebuilding and maintaining trust and confidence in the medium to long term.” Vítor Manuel da Silva Caldeira, President of the European Court of Auditors

Performance audit and value-for-money audit: Performance audits can play a vital role in assessing whether best value for money has been achieved and can provide a degree of transparency and accountability in the use of public resources. They provide information about what money has been spent on, in which way and what the impact of an activity has been. That can help verify that money is going to the “right” measure, program or project, and that it serves its intended purpose. A performance audit will ultimately focus on assessing whether resources have been used according to the principles of economy, efficiency and effectiveness. The scope of a performance audit will depend on the main focus chosen: we can examine the overall operations of an entity or a selected unit, look at one activity or process, or audit a specific project. Thus, the performance audit aims to identify recommendations for improvement and produce lessons learned. Extra-financial reporting: While extra-financial reporting has become mandatory for large private organizations in Europe, public institutions can also benefit from demonstrating their impact and contribution to environmental and social objectives. We have extensive experience in helping organizations measure, monitor, verify and report their environmental and social performance. We are able to measure the direct, indirect and induced impacts of organizations, and provide meaningful performance indicators to inform strategic management decisions as well as increase the transparency and effectiveness of organizations. Fraud examinations and forensic assignments: We help to combat fraud and corruption by assessing and improving

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the anti-fraud policies of institutions and governments. We can also detect problems, either as part of the audit process or through data analytics, and give technical support to the European AntiFraud Office (OLAF) or the DirectorateGeneral for Competition in investigating possible cases. Our work has been wellreceived by the Transparency Commission.

• Economic and Financial Affairs (ECFIN)

International Public Sector Accounting Standards (IPSAS) and European Public Sector Accounting Standards (EPSAS): Finally, we help governments make their public finances more transparent by implementing international accounting standards, and we are closely involved in the discussion about how to translate those standards into European Public Sector Accounting Standards.

• Environment (ENV)

Framework contract management: Most of our audits performed on behalf of the European Commission are carried out under audit framework contracts. The dedicated framework contract management is part of the Center of Excellence: experienced contract managers act as an interface between the EU and the global EY network of offices in 150 countries. Thus, we provide policy, sectorial and geographic coverage in our auditing work, tailored to the context and needs of each Directorate-General.

• Research and Innovation (RTD)

EY has provided audit services to numerous DGs: • Agriculture and Rural Development (AGRI) • Budget (BUDG) • Climate Action (CLIMA) • Communications Networks, Content and Technology (CONNECT)

• Education and Culture (EAC) • Employment, Social Affairs and Inclusion (EMPL) • Energy (ENER) • Enlargement (NEAR) • Enterprise and Industry (GROW) • Development and Cooperation (DEVCO) • Health and Consumers (SANTE) • Informatics (DIGIT) • Joint Research Centre (JRC) • Mobility and Transport (MOVE) • Regional Policy (REGIO) • Service for Foreign Policy Instruments (FPI) Supporting Eurostat: a clear picture of accounting and auditing practices across the EU To start thinking about how to standardize public accounting and auditing practices across the EU, Eurostat needed to understand the status quo. We were tasked with looking into the practices in every Member State and at every level — from central government to social security funds and a sample of public corporations. The project required us to work with colleagues across Europe to collect and review large amounts of information about what countries were doing, as well as analyze current and future reforms.

“In order to coordinate the assurance services provided by EY to the EU institutions, EY has established the Center of Excellence for the audit of EU funds. This Brussels-based department is composed of over 40 professionals who are fully dedicated to the audit of EUfunded programs and actions under various audit framework contracts signed with the EU institutions. Carrying out audits on behalf of the EU institutions is our way of building a better working world at EY.” Danielle Vermaelen, Ernst & Young Réviseurs d’Entreprises

Performance audit for DG CONNECT EY carried out a performance audit of a beneficiary that had been receiving funding over several years. Under the DG Budget Audit Framework, DG CONNECT selected EY for the audit of the grant agreement in view of questions related to economy, efficiency and effectiveness of the funding. The defined audit scope covered areas such as governance and organizational structure, internal control and procurement, performance measurement, communication and dissemination, organizational strategy, and added value perceived by stakeholders. The audit approach included desk review of documents, fieldwork at the entity, walk-through of key processes, stakeholder survey and focus groups. The results from the performance audit supported the beneficiary in tackling identified weaknesses and fostered discussion with the commission on how the funding can be spent in the best way. Thus, the performance audit also contributed to the exchange about the future priorities and direction of the funding scheme.

Pillar assessments and verification missions of UN organizations In 2014, EY was selected to carry out pillar assessments of 10 UN organizations on behalf of DG DEVCO. Over a period of one year, a team of 15 auditors was involved in assessing organizations’ readiness to be entrusted with indirect management tasks by the European Commission. The objective of the assignment was to assess organizations policies, systems and procedures in the so-called ‘pillars’: internal control, accounting, external audit and selected additional areas such as procurement, grants, financial instruments and sub-delegation. Fieldwork was performed in various countries including the US, France, Denmark, Italy and Austria. The selection of EY for this assignment has been evidence of the extensive experience gained by the EU Assurance Team in contributing to the commission’s assessment methodology as

well as in carrying out such assessments over the past decade. Our understanding of the UN system, which we have also intensified through numerous verification missions of actions managed by the UN all over the world, has been crucial in our work. More recently, this experience has been complemented by assessments requested by UN organizations directly, which aim for this certification to enter into specialized cooperation mode with the European Commission. Thus, we contribute to DG DEVCO’s efforts in cooperating with international organizations in implementing its development agenda.

Assessment of arrears in an enlargement country When a country is granted the status of candidate from the EU, it still has a long way before becoming an effective Member State. In 2014, EY performed an agreed-upon procedures assignment to assess the arrears of a candidate country with respect to works, goods and services contracts. Arrears, defined as identified payments outstanding for a period of 30 days or more, had arisen within the central government, extrabudgetary agencies, local government and social security funds of the government concerned. Acknowledging the existence of a large amount of unpaid obligations, the government had developed a strategy to start paying back the arrears. EY was selected by an EU delegation to assess this strategy. The main objectives of this assignment were to assess the validity of the arrears and compliance with the defined strategy, to formulate recommendations on the process and, in order to prevent future arrears, to obtain and analyze payable balance confirmations from suppliers and to formulate a procedure to the Arrears Committee in order to reconcile discrepancies between arrears. The work carried out by EY lasted about one year and involved key EY experts in specific fields such as local law, fraud, taxation and statistics.


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Policymaking for impact

The European Commission has clearly stated its aim to deliver on its priorities efficiently and effectively, bringing about a tangible impact. An evidence-based approach to policymaking is central to this aim. Also essential is a leaner Europe: reducing initiatives, making existing ones more efficient, and streamlining administration and regulation, particularly through the European Commission’s Regulatory Fitness and Performance program (REFIT). These aims are closely aligned with our skills, experience and mission of building a better working world. We can help EU institutions and agencies write policies that work in practice. We have skills and knowledge in areas that feed the process of evidence-based policymaking, such as data analytics and economic modeling. We can also assess the impact that policies and regulations have on businesses, governments, jobs, the environment and society. We consider not only which option is most likely to succeed but also which offers the appropriate balance of cost and effectiveness. Once a policy is in place, we can support the commission in measuring its results by evaluating how effective, efficient and sustainable it is. We mine our network across Member States to evaluate how they implement directives and what results they achieve. We also use our close ties with businesses and entrepreneurs to understand what real-life challenges the private sector faces in relation to EU policies. Our services include: Impact assessment: Impact assessments form an integral part of evidence-based

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policymaking at the European level. Their role has been reinvigorated by the commission’s increased emphasis on lawmaking procedures that ensure the highest standards of transparency and public consultation. We support the commission’s policymaking by identifying and assessing the problem, the possible responses and the best-performing scenario. Our approach focuses on a solid analysis of the status quo, the extensive involvement of stakeholders at all stages of the process, and the balancing of qualitative and quantitative methods for assessing potential impacts. Evaluation: The commission is undertaking major efforts to assess the implementation of existing legislation, as well as the progress and performance of programs and action plans. The goal is to make sure that the EU interventions and the existing body of EU law are fit for the purpose and to improve it where necessary. With our evaluation services, we help the European institutions meet this commitment by offering sound knowledge of evaluation methodologies and by applying the full

range of assessment criteria defined by the commission (relevance of the intervention against stakeholders’ needs, effectiveness in achieving objectives, efficiency, coherence and EU added value). We mobilize a range of professional services and sectorial knowledge from EY Global and European practices, and we have established a network of country contact points composed of EY professionals who are experienced in public sector and policy analysis. That supports the collection and analysis of information in all EU Member States and beyond. Policy advisory: We are also active in advising EU institutions and national governments on the design, implementation and monitoring of policies and strategies that are high on the EU agenda (such as the promotion of innovation and digital entrepreneurship policies and the single market strategy). We provide support in designing and implementing communication strategies, and identifying and engaging stakeholders and target groups, reaching out to them through events and online engagement.

“We have looked at what we are planning with a critical eye: will this initiative contribute to jobs and growth? Will it add value beyond what Member States are able to do? Will it be effective in changing things on the ground without adding unnecessary burdens?” Frans Timmermans Commission First Vice-President, commenting on the 2015 Work Programme

“When we get feedback on what the EU does with our recommendation — that’s when we really feel the value of our contribution.” Claudia Gallo, Ernst & Young Financial Business Advisors S.p.A.

Economic modeling: EY can mobilize solid analytic skills, and enhanced quantitative assessment and statistical modeling to feed into impact assessments, evaluations and research studies. Our professionals around the EU can provide support for analyzing and quantifying the economic impact of government policies and regulatory or tax changes. They can also help with macroeconomic forecasting and modeling studies supporting key decisions by governments, both at the EU and the national level. EY has professionals who are experienced in economic impact assessment. They examine how regulations and policies at different levels of the economy — at the sector or company level, and both nationally and locally — will affect employment, labor productivity, GDP, and sectorial or company competitiveness. Our professionals also offer advice in modeling the optimal options of intervention and communicating approaches to stakeholders. Compliance assessments: The commission constantly needs to collect updated information on whether EU Member States and involved entities are implementing regulations in compliance with their obligations. EY can leverage its multidisciplinary teams and EU-wide coverage to assess whether the rules, procedures, and management and

control systems established by Member State authorities, agencies and other entities comply with the requirements of EU legislation.

Evaluation of cluster initiatives managed by DG Enterprise and Industry EY undertook a comprehensive survey of beneficiaries of cluster initiatives. The aim was to gather information on the efficiency and effectiveness of the actions supported, and to identify the types and scale of results and, ultimately, the impacts achieved. We produced case studies tracking how the support provided through the initiatives to cluster organizations has led to second- or thirdorder effects on small- and medium-sized enterprises (SMEs).

Providing DG RTD with an analysis of the role and impact of industry participation in the framework program The objective of this evaluation was twofold: • To better understand the motivations of industry to participate in framework programs (FPs), and to reveal new patterns of cooperation, emerging

clusters and evolving trends across several generations of FPs • To explore the quantitative and qualitative societal impacts of industry participation in FPs with special regard to assessing the impact on innovation and job creation

Evaluation for DirectorateGeneral for Justice and Consumers (DG JUST) of the impact of free movement of EU citizens at local level The commission wanted to evaluate the efficiency and impact of the European framework set up by Directive 2004/38/EC on the free movement of European citizens. Six cities that promote a “welcome culture” to aid the inclusion and participation of EU citizens moving from other Member States were selected as test cases. The study focused on local policies aimed at the “newcomers,” in several fields: information and communication instruments and campaigns, policies for employment and entrepreneurship, programs for the inclusion of foreign children in schools, language training, housing, participation in local elections and political life, and policies and events promoting diversity and intercultural dialogue.

Helping to shape future tax policy The Directorate-General for Taxation and Customs Union (DG TAXUD) aims to implement an alternative to the current system for taxing goods and services in the EU, in place since 1993. Officials asked us to assess the five alternatives suggested by the VAT Expert Group and to recommend the best one to take forward — including assessing which option would most

reduce tax fraud and the “VAT gap.” So far, we have surveyed our network of contacts and used their responses to review the five options from a legislative and a business perspective. We are now assessing the impact each one would have at the business, Member State and EU level before making our final recommendation.


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Doing more with less

EU institutions and agencies face rapidly growing pressure to rationalize their operations and optimize their use of human and financial resources. Decisions by the European Commission clearly demonstrate that efficiency is one of its key priorities: a policy of zero growth in human resources, a 5% reduction of staff in all EU institutions by 2018 and the goal of maintaining administrative expenditures under inflation rates as per the 2014–2020 Multiannual Financial Plan. These targets point to a need to deliver demonstrable impact and value to citizens within the confines of increasingly limited resources. This can be done through performance improvement programs that build structures and processes in alignment with targeted results and efficient use of resources. At the same time, the optimal use of information technology and digital tools is critical. EY can help EU institutions and agencies pursue these important aims through a set of tailored services that aim to improve structures, processes and resources.

People and organizational change: proposing and assisting in the implementation of systems, processes and structures to provide efficiency

We can help EU institutions and agencies improve their performance and be more efficient by working to align their structure and operations with their strategy. To do this, we draw on tried-and-tested methods and an extensive track record in helping corporate clients, as well as national governments, improve performance by streamlining their operations. In fact, we have helped many European governments become more efficient and reduce their administrative burden. Underpinning these capabilities are our strengths and skills in day-to-day operations, management and strategic decision-making. These skills are concentrated in four areas:

The world continues to change as a result of developments in globalization, demographics, technology and regulation. The pressure on the public sector to rationalize its way of working and optimize its use of both human and financial resources is rapidly growing. The commission has taken some decisions that demonstrate clearly that (cost) efficiency is one of its key priorities:

Strategy: defining achievable strategies with clear results and building a framework to provide them

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• A policy of zero growth in post will be implemented. • By 2018, a 5% reduction of staff in all EU institutions is foreseen. • In line with the 2014-2020 Multiannual Financial Plan, administrative expenditures are to be kept under inflation rates.

These disruptive forces require EU organizations to change rapidly — and they need their people to be agile and adaptable to that change. By focusing on how they manage and engage their people, leading organizations are not only managing these global disruptions, but in fact are running more efficiently. These contextual aspects will have a great impact on how the European institutions operate. It is clear that the institutions are looking for support to keep providing highquality work within the limits of stable or decreasing resources (for the established organizations). Many institutions will look for ways to re-skill and redeploy staff to adjust to new requirements and organizational challenges. Looking at people as part of an integrated business strategy, organizations are able to gain a competitive people advantage. Our People Advisory Services is an endto-end offering dedicated to addressing

“I want to work for a union that is committed to democracy and reform; that is not meddlesome but works for its citizens rather than against them. I want to work for a union that delivers.” Jean-Claude Juncker Commission President

big, complex people, organizational and compliance issues. Backed by a global ecosystem of consultants and industry professionals, we are experienced in performance, talent, systems, reward, mobility and analytics — all with a shared sense of purpose and values.

The diversity of our talent, global connectivity and collaborative philosophy means we’re inspired to ask better questions to help organizations design better outcomes, attain long-lasting results and achieve a competitive advantage.

Helping DG INFSO become DG CONNECT The Directorate-General for Information Society and Media (DG INFSO) needed to change to face the future. By changing its structure, culture and mission, it would become “more flexible, with fewer managers, less fragmented, and better finding the links between policy and research areas.” It would also change its name to DG CONNECT to represent the key areas it covers. The Directorate-General called for tenders for multiple framework contracts to provide it with support services in making strategic decisions and developing its future vision and mission statements. EY was one of the organizations selected. Through our advisory services, we helped the DG become more effective and efficient at shaping its policies, forming its decisions, and achieving its mission and goals.

Helping to make Europe more secure and resilient EY has helped shape Europe’s information security strategy. We took part in the 2015 Cyber Europe — the only Big Four organization to do so. We have also provided projects for the European Network and Information Security Agency, including Secure ICT Procurement for Secure Electronic Communications. We created a buyer’s guide and a seller’s guide with advice for avoiding the pitfalls of this kind of transaction. In the long term, the study may help define regulation.

IT advisory, transformation, risk services and cybersecurity: helping improve business performance by addressing the IT and business agendas together Program management: advising on large transformation programs from start to finish

European structural funds, we helped roll out e-government in the Baltics — either by helping national bodies choose and implement an online solution or by working with authorities to define what e-government meant in that country — and put the central infrastructure in place. Our work has benefited the clients and citizens alike: the services are fast, effective and transparent, with less risk of corruption. A cost-benefit analysis (CBA) we did in Lithuania also revealed a multimillion-euro impact.

Efficiency analysis of Swedish National Public Employment Office We reviewed the agency’s organizational and management structures, and its management and government processes. The focus was strategic analysis and evaluation of the head office functions, but the review also had bearing on the management structure of the core business. The analysis resulted in recommendations for a new organizational structure, changes in the management structure and processes, and the introduction of national governance and support services. In a second phase, we assisted with support in implementing our recommendations. This included streamlining the organization by establishing new organizational entities. Furthermore, we supported the agency in process mapping and developing national support services to streamline and rationalize the support of the head office to the core business.

Bringing e-government to the Baltics E-government saves time and money and makes services more efficient, but moving services online comes at a cost. Using


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Igniting growth, creating jobs

The commission has made growth and job creation its number one priority. The €315 billion European Fund for Strategic Investments (EFSI) forms a big part of the commission’s strategy for kick-starting the economy. The conviction we share with the commission is that we cannot obtain economic growth without investing in job creation, and that is why we need to direct public and private investment toward enterprises, especially SMEs. Our service offering spans the spectrum of areas linked to growth and job creation, including: Financing growth: We seek innovative financing structures through financing options, financial engineering and blending so that all sources of financing are tapped. Business-enabling environment: We advise on streamlining processes and regulations to make it quicker and cheaper to do business in a country or region. We formulate recommendations on tax policies and codes conducive to doing business easily. We advise on a framework for production and labor costs to keep cost structures competitive.

Trade and investment: We develop investment and trade promotion strategies. We develop investment propositions for sectors, regions and countries. We run attractiveness surveys around the globe to identify key dimensions of countries’ and regions’ appeal in the eyes of international investors. Entrepreneurship and innovation: Our belief in entrepreneurship as the engine of growth is evident in our many global initiatives: Entrepreneur Of The Year®, Entrepreneurial Winning Women™ and the Strategic Growth Forum™. We advise on a framework conducive to promoting innovation (R&D, finance, links with universities, clusters). We accompany

entrepreneurs on their journey into markets by advising on financing, business plans, positioning, expansion strategies and operational structures. Skills for jobs: Aligning education and skills with the needs of the economy is central to achieving sustainable growth in Europe. We have been active in designing programs to promote job skills, advising on educational reforms and programs to reflect the job-creation agenda, and implementing incentives for employing young people.

“We have to revive Europe’s culture of entrepreneurship by building on the Entrepreneurship 2020 Action Plan. Only if a large number of Europeans have an entrepreneurial spirit will economic growth materialize in the long term.” Elżbieta Bieńkowska, Commissioner for Internal Market, Industry, Entrepreneurship and SMEs

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“On its own, [the European Fund for Strategic Investments] is not a magic wand to transform the European economy. But, and it is a very important but, if we implement all three elements of our plan, we will change the European investment landscape permanently, and structurally, for the better.” Jyrki Katainen, Commission Vice-President for Jobs, Growth, Investment and Competitiveness

Entrepreneur Of The Year® Attractiveness “Our work with European SMEs and the EY Entrepreneur Of The Year program helps us to bridge the gap between fast-growing, innovative companies and the commission. Two years ago, we held a workshop for 12 EY Entrepreneurs Of The Year and 12 representatives from EC Directorates who were dealing with innovation and growth, with a view to identifying any potential gaps with EU financial incentives. At the end of the day, we had clear ideas and recommendations for policy improvements, several of which the commission has since adopted.” Patrice Lefeu, Ernst & Young Société d’Avocats SELAS

Digital entrepreneurship in Europe: As part of the Digital Agenda for Europe initiative, DG GROW wanted to explore how the EU could help SMEs and industry embrace digital technologies to boost competitiveness, jobs and growth. We helped DG GROW set up a Strategic Policy Forum on Digital Enterprise and worked with its members to consider how the commission, Member States and industry could support European SMEs in adopting these technologies and changing their business models to offer new products and services.

Creating demand instead of supply Supply-side innovation policies make it easier for businesses to innovate. Without demand for innovation, though, there is no need for supply. So the commission and national governments are focusing on demand-side innovation policies. For DG GROW, we devised a framework for monitoring how well these policies were working. We studied examples, organized workshops to understand the kinds of projects Member States had undertaken and analyzed the results. Based on this framework, we will supply guidance for the commission and Member States to monitor and evaluate these policies.

Building skills for job mobility in Europe

to job seekers, employers and citizens across the EU-28. Since 2009, we have been training 1,000 EURES staff members in the skills they need to do this work, as well as providing technical assistance to the commission. Our training covers everything from taxation and social security issues to using social media and innovative technologies to communicate what they do. We also measure success in a concrete way so EURES can clearly see what works.

Building competitiveness in Lithuania The national Government in Lithuania wanted its SMEs to increase their exports and become more productive. To help achieve this, it asked us to build a competitiveness center that would improve the performance of 120 companies. First, we applied criteria for choosing the companies and compared them with relevant businesses. Then we developed competitiveness improvement plans for each business and allocated consultants to help put them into practice. By the end of the project, productivity and exports had increased far more among the participating companies than in the control group — just one small contribution to Lithuania’s rise in the International Institute for Management Development (IMD) world rankings.

The European Employment Services (EURES) is an important tool in pushing forward labor mobility in Europe. Every day, its advisors provide information, advice and job-matching services


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Getting the best out of European structural and investment funds

European Structural and Investment Funds (ESIF) have done much to create cohesion among Europe’s regions by helping to close the economic and social gaps between the most- and least-developed countries in the EU. As part of its plan to make better use of ESIFs, the commission aims to target these funds at the areas of focus for the European Fund for Strategic Investments. An additional point of emphasis is seeing that the recipient authorities absorb the funds in a comprehensive and effective way. EY has worked on cohesion policy since the first programming period and is well-equipped to help the commission and Member States with these aims. We provide technical assistance to help recipients absorb, manage and control funds, including identifying a pipeline of eligible projects. We evaluate operational programs in a range of Member States. Our knowledge in areas of policy focus for the commission, including competitiveness, job creation, energy, infrastructure and skills, equips us to advise on the planning and implementation of programs and to carry out specific feasibility or research studies. Our people are organized in cross-border networks, so they can share their on-theground knowledge of what has worked in other Member States. Meanwhile, our Brussels-based EU account team can identify the people from our global network who can best support our clients. Our services include: Policy planning: The commission and managing authorities count on reliable information to build their strategies,

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policies and programs. We support the policy planning process in conducting preparatory (thematic) studies and in drafting evidence-based policies, programs and strategies. Assistance with establishing program delivery systems: Within our technical assistance projects, we help the managing, certifying and coordinating authorities with management and control system design and implementation, process analysis and improvement, and the simplification of procedures. We also help address important challenges such as administrative burden reduction, the definition of a methodology for simplified cost options and result-oriented management. Capacity building, transfer of knowhow: Efficient management of the European Regional Development Fund and the Cohesion Fund calls for a mix of competencies. Furthermore, the current program period introduced changes in the regulations, implying that new competencies are needed. We provide capacity-building services that address those needs, covering the competencies

required for the ESIF program management cycle. In our activities, we use tailored training and knowledge transfer modes, such as thematic seminars, technical meetings, continuous coaching, distance learning, on-the-job training and group training. Our services are based on hands-on experience in ESIF management. Support in selecting successful projects and building robust pipelines: The effectiveness of ESIF programs depends on successful projects. We help managing authorities communicate with beneficiaries, generate and screen project ideas, draft and manage calls for proposals, and appraise project applications. Furthermore, we aid beneficiaries by providing support for project design, feasibility and CBA studies, and project implementation, including financial management. Program monitoring and evaluation: Monitoring and evaluating outcomes are essential to improving the effectiveness and efficiency of the program. We assist program managers in defining indicators, collecting and analyzing

monitoring data, conducting financial monitoring and expenditure forecasting, and proposing corrective actions. Furthermore, we support the design of innovative monitoring tools and aid the Monitoring Committees. We also review the relevance, coherence, effectiveness, efficiency and added value of the programs by performing ex-ante, ongoing and ex-post evaluations, as well as impact assessments, and we provide management with practical recommendations.

Financial control and auditing: Financial control is an important issue in managing ESIF funds. We have extensive experience assisting programs with the certification of expenses, spot checks, first- and second-level control, and risk management. We have an excellent understanding of the EU requirements and can also advise on procedures and protocols. Setup, implementation and management of financial instruments: In the current

Working with DG REGIO to improve management of the European Regional Development Fund and the Cohesion Fund The global objective of our contract is to produce concrete results that will further professionalize the management of the European Regional Development Fund and the Cohesion Fund, and ultimately improve capacity in the administrations managing these funds. The results should help Member States and regions structure their administrations in a more efficient way and identify gaps in competencies and skills among their staff members, and thus define training and recruitment needs. The results can also be used to develop training modules at both national and European levels, and to develop curricula for academic training programs on managing structural funds.

Monitoring of operational program: research and competitiveness in Italy In 2007, the commission approved the Research and Competitiveness operational program for the Italian regions of Calabria, Campania, Puglia and Sicily, with the aim of improving R&D, business innovation and productivity for growth and jobs. We helped the managing authority implement and manage the

program period, the scope for the use of financial instruments has broadened and can be applied on a wide range of themes. We have excellent knowledge on the delivery modes and mechanisms of financial instruments and their legal feasibility. Our services cover the entire life cycle of the financial instrument, including ex-ante assessment, market gap analysis, feasibility studies, help with fund structuring, support on the selection of the intermediary, as well as monitoring and administration.

program. Our technical assistance included helping to roll out the program, overseeing its governance and managing the cash flow; offering legal support and aligning the program with legal regulations; and advising on the criteria for selecting qualifying projects in the regions concerned.

Helping Lombardy be more competitive The project provides technical assistance and support to the administration of the Lombardy region in implementing the operational program for the European regional Development Fund 2007–2013 Competitiveness Objective. It aims to strengthen the capacity of the managing authority in implementing and monitoring the operational program.

Advising Lithuanian authorities on structural funds EY provided technical assistance and consulting services to the managing authority, certifying authority and other institutions responsible for managing EU structural funds in Lithuania. This included consultations on the problems of ongoing operational program implementation and proposals for more effective implementation of the intervention measures in 2014–20.

Commission priorities 2014–20

Research, technology and innovation Information and communications technology (ICT)

Policy planning

Competitiveness of SMEs

Assistance to establishment of program delivery systems

Shift toward a low-carbon economy Climate change adaptation, risk prevention Preserving the environment and resource efficiency

Financial control and auditing

Sustainable transports, network infrastructures Sustainable and quality employment labor mobility Social inclusion, combating poverty and discrimination Education, training, lifelong learning Efficiency of public administration

Our services

Program monitoring and evaluation Support in selecting successful projects and building robust pipelines

Setup, implementation and management of financial instruments

Capacity building, transfer of know-how


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Toward a sustainable and connected Europe

Sustainable growth through a low-carbon, resource-efficient, and more competitive and inclusive economy is a key priority for Europe. EY is well-positioned to assist in this transition with regard to energy, transport, ICT and other important infrastructure such as water and waste management. We have dedicated teams experienced in a wide range of sectors such as renewable energy, power and utilities, transport and telecommunications that are supported by an international network of professionals across Europe and around the world. Our advisory services related to the diagnosis, development and the implementation of sustainability-focused strategies and approaches are well-adapted to governments and public institutions. Our position as a leading infrastructure advisor in Europe means we are central to driving major European infrastructure projects forward. Furthermore, we are investing in and reinforcing our capabilities in areas critical to the EU so that we are equipped to achieve in areas such as development assistance and energy. We also provide support to the Connecting Europe Facility (CEF), which aims to develop trans-European networks in the fields of transportation, telecommunications and energy, and the Trans-European Transport Network (TEN-T). We are versed in handling all aspects of an infrastructure project, from sourcing financing to conducting strategic environmental assessments to dealing with regulators. Energy is the subject of particular attention because of the EU’s ambition of creating an Energy Union to provide secure, sustainable, competitive, affordable energy for every European. Targets include reducing dependence on

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energy from outside the EU, boosting the share of renewable energy and creating an internal energy market. Our team has strong experience in energy financing, policy analysis and market assessment, notably with a focus on energy efficiency and renewables. EY’s Cleantech and Sustainability team brings together experienced cross-border professionals to offer tailored financial and technical approaches for sustainabilityrelated challenges that are informed by our knowledge of industry trends, as well as our deep understanding of the challenges faced by companies and Member States. Our teams have been providing such services to public and private sector clients, as well as international organizations, for more than 15 years. Our services include: Infrastructure advisory: We design long-term infrastructure development programs for balanced economic growth. Our services include generating project

pipelines with an emphasis on job creation. We advise on financial engineering and financial instruments to identify optimal financing, and we facilitate projects that promote economic cities, clusters and investment regions. Sustainable performance and transformation: We help companies transition to a low-carbon, resourceefficient and sustainable economy. We assist them in developing new business models such as a functional and circular economy, working toward energy and resource efficiency, as well as developing and managing green products and portfolios. We also help companies define their sustainable development strategy, and determine relevant environmental and social indicators to track their performance over time. Public policy advisory and assessment: We provide strategic studies and CBA for public institutions on environmental issues that assist decision-makers in

charge of environmental and sustainable development policies. This work covers a range of subjects including sustainable energy production, waste management, integrated product policy, eco-labels, and resource and water management. We also carry out analyses and evaluations on environmental policies and programs for

public institutions, as well as technical, financial, legal and organizational reviews of projects. Climate change adaption and risk management: Our organization has a long-standing experience in CO2 emission monitoring, reporting and verification, in the context of the EU Emissions

Trading Scheme (ETS) and the Clean Development Mechanism, as well as identifying and addressing climate-related risks. Our team also works with financial institutions to develop environmental, social and governance (ESG) and climaterelated criteria to identify and address investment risk.

Projects Building an energy-efficient Europe The Juncker Commission has stated that it would like to go beyond the targets set in Europe 2020, particularly when it comes to making buildings more efficient. We are working on two projects that will help. • DG ENV is developing an EU-wide system that will provide organizations with a method of calculating the environmental footprint of their products or the business itself. Our task is to develop the method for verifying the information, including recommending who will carry out the checks. • DG ENER has recently chosen a consortium we are leading to help achieve the energy efficiency goals of the 2020 strategy. The first project is a legal and technical review of how well new energy efficiency standards for buildings work in a ‘live’ environment — starting with the DG ENER building.

European Commission — financing renewable energy in the EU market We conducted a study assessing the costs of renewable energy, and the support and financing instruments available for renewable energy R&D, demonstration projects and largescale deployment. It gives details of each Member State’s expenditures and use of community funds. The study identified alternatives to enable easy access to capital, analyzed the possible involvement of governments and suggested improvements in the sector’s access to capital.

Reviewing the pilot of European Project Bonds

investors, such as insurance companies and pension funds, to pay for large infrastructure projects in the fields of transportation, energy and information technology. We worked with the European Investment Bank to broker these deals. Then, once the pilot was over, we reviewed the PBI’s effectiveness and efficiency as a catalyst for infrastructure investment. We interviewed key stakeholders and analyzed their responses and performed our own evaluation of the pilot projects. Our findings showed that the PBI had achieved its goal, attracting a large pool of interested investors and getting positive feedback from nearly all stakeholders.

Nine rail corridors, one traffic management system Rolling out the European Rail Traffic Management System (ERTMS) is a big priority for DG MOVE. With the creation of a single system, trains will no longer need to communicate with a different system each time they cross a border, making it easier and more efficient to transport goods and people. DG MOVE asked us to provide technical and financial help. We worked with an engineering company, which took care of the technical side and helped us manage the project, while we created a set of financial indicators to measure what had been spent and how it had improved things. We also worked with DG MOVE and project managers across Europe to overcome problems.

The EU’s Project Bond Initiative (PBI) aimed to tap largely unexploited sources of long-term financing from institutional


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Infrastructure for growth Infrastructure development is essential to achieving the EU’s 2020 strategy of smart, sustainable and inclusive growth. The launch of the EFSI aims to kick-start the economy by providing €315 billion in additional private and public investment in the first three years of the commission’s term. It is bold not only in the amount being released and the speed of its intended delivery but also in its focus on areas of strategic importance for Europe: broadband, energy networks and transport infrastructure, renewable energy and energy efficiency, and education, research and innovation. Our dedicated market-leading Global Infrastructure Advisory team has provided significant input and leadership in the debate over how to improve infrastructure policy, financing and procurement outcomes. This team has also won numerous awards and has been ranked as the leading financial advisor in infrastructure projects by several leading infrastructure magazines, such as Infrastructure Journal, Project Finance International and Dealogic. The team stands ready to assist the EU institutions, its Member States and beneficiaries of EU development assistance throughout the infrastructure life

cycle (from feasibility to policy development, public-privatepartnership (PPP), and implementation and project monitoring) across key sectors (transport, energy and social infrastructure). Our services: • Feasibility studies • Policy development • Public-private partnerships • Project and program management • Project and program monitoring Areas of expertise: • Transportation — roads, rail, bridges, ports, airports • Energy — renewables, electricity, water, waste • Social infrastructure, health, housing, schools • Other sectors, including agribusiness, e-commerce and e-government

EY Renewable Energy Index Established in 2003, our global quarterly publication ranks 40 countries on the attractiveness of their renewable energy investment and deployment opportunities, based on a number of macro, energy market and technology-specific indicators.

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Prosperous world, stable Europe

Poverty and economic inequality are among the biggest barriers to stability and security in the EU and beyond. By the same token, helping a country develop economically brings big benefits in a number of areas important to the EU — trade, growth, migration and security. With offices in all 98 countries that benefit from EU development cooperation, we have an in-depth understanding of the local environment in beneficiary countries. We have seen firsthand how development cooperation, along with private investment and good governance, can transform economies around the world. By investing heavily in our practices in developing countries, we have ourselves become integral to the economies in those countries.

Assurance: We perform audits of EuropeAid funds as part of framework contracts. These give DG DEVCO assurance that the many beneficiaries of its funds are spending them compliantly — a crucial element in the EU’s continued support for the more than €50 billion it spends on development cooperation each year. We provide various types of services, such as financial audits, expenditure verification, pillar assessments, verification missions and other audit-related assignments.

Our work with EuropeAid is above all about shared values; it is about passion. For many of our people, development is not a job — it is a way of life. In addition to supporting both the commission and beneficiaries during our audits, we express that passion through the following services we offer in the field of development cooperation. DG DEVCO uses multiple audit framework contracts to manage the auditing of its many external aid projects and recipients. And we do more of these audits than anyone else. We do an annual report of all our audits, which DG DEVCO then feeds into a consolidated report for the European Court of Auditors.

Public finance management: We take pride in our long history of working with governments and institutions in Europe and around the world to improve their public finance management (PFM). We do this by supporting them throughout the budgetary cycle, from planning and executing budgets to reviewing their public expenditure and improving the way they manage debt. Private sector development: Growth is at the core of sustainable development, and private sector development is fundamental to sustainable growth. We offer services that promote entrepreneurship, job skills,

infrastructure for growth, increased competitiveness and a business-enabling environment that encourages economic activity. Infrastructure, energy and climate change: Sustainable infrastructure development is an important dimension of the EU’s development assistance. We work with beneficiary countries throughout the world in implementing projects that contribute to the development of infrastructure, energy and climate change objectives in developing countries. Enlargement: Our work with neighborhood and accession countries draws on our track record of working with Member States, most importantly the newest joiners, to align their regulations, institutions, structures, systems and processes with those of the EU. Through this work, we actively contribute to development in these countries, but also — in the long term — help them to prepare for adoption of the acquis communautaire.


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“We do not just want to be the biggest aid donor. We also want to be the most effective and efficient donor.” Neven Mimica, Commissioner for International Cooperation and Development

“We want to be a key partner for the countries on our doorstep while defending their right to choose their own way forward. We prefer to work with democracies in open trading relationships, because we believe this is better for everyone. And we want to have good working relationships on issues that affect us, like energy security, counterterrorism or migration.” Johannes Hahn, Commissioner for European Neighbourhood Policy and Enlargement

Building sound public finances in South Africa In the context of EU development cooperation in South Africa, EY worked with the National Treasury on a project to improve public finances. In particular, we focused on the need at the central, provincial and municipality level for enhanced management accounting (planning and budgeting), revenue

management, expenditure management, asset management (movable and immovable), financial accounting, supply chain management, internal control, risk management and internal audit.

Supporting a country under construction The EU has been working with the Palestinian Authority to build up the institutions of a future democratic, independent and viable Palestinian state, living side by side with Israel in peace and security. EY has a long history of supporting the EU in this area. In the West Bank and Gaza, we have provided advisory support to the EU’s Direct Financial Support programs (PEGASE) and helped strengthen the public financial management system

by bringing the internal control and internal audit functions in line with international best practices. These transformed functions have improved the treasury, accounting, and budget departments and their counterparts in the line ministries and other agencies of the Palestinian Authority.

Mediterranean Solar Plan (Middle East) The Mediterranean Solar Plan (MSP) was an ambitious effort to harness the Mediterranean region’s powerful natural asset — sunshine — to meet its growing energy needs. The EU helped finance and implement the plan in eight partner countries: Algeria, Egypt, Israel, Jordan, Lebanon, Morocco, Syria and Tunisia. We supported the design and initial

implementation of the plan by analyzing national energy policies and relevant regional cooperation projects and by interviewing stakeholders to understand the behaviors, needs and capacity of the players involved. Finally, we made recommendations for how to develop and implement the plan, including looking at the sustainability of its benefits and how attractive it was to private investors.

Strengthening management processes in Montenegro The Government of Montenegro needed support with strengthening the management of public and EU funds, and

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improving the regulatory framework for its administrative procedures.

“The projects we are involved in are transformational — we are contributing to a positive change in the countries benefiting from EU external assistance. An essential element of making our support sustainable is that EY teams have been on the ground before and they are there to stay and offer continuing help to the local public and private sectors. Hence, we are not incidental advisors who come and go; we invest for the better of the countries and their societies in the long run.” Dr. Julia Djarova, Ernst & Young Nederland LLP

“When you’re auditing EuropeAid funds, you see money being spent on really credible projects, like water and sanitation — things that really change people’s lives. The average person in Europe doesn’t get to see this, but I do. It’s a real privilege.” Marcello Leung, Ernst & Young Ltd (Mauritius)


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Our team Alessandro Cenderello EU Institutions Leader [email protected]

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Danielle Vermaelen

Assurance Leader [email protected]

Thomas Sileghem

Advisory Leader [email protected]

Tristan Dhondt

Transaction Advisory Services Leader [email protected]

Franky de Pril

Tax and Customs Leader [email protected]

Claudia Gallo

Policy Advisory and Evaluation Leader [email protected]

Leonidas Kovaios

Technology and Digital Leader [email protected]

Alexis Gazzo

Cleantech and Sustainability Leader [email protected]

Coordinating contacts Antonio de Rose

Infrastructure Advisory Coordination [email protected]

Julia Djarova

External Aid Coordination [email protected]

Joris de Smedt

Organization and People Coordination [email protected]

Sacha Koppert

ESIF Coordination [email protected]

Patrice Lefeu

Mobility and Defense Coordination [email protected]

Laura Delgado

Industrial Policy, SMEs, Research and Innovation Coordination [email protected]


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EY | Assurance | Tax | Transactions | Advisory About EY EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com. © 2016 EYGM Limited. All Rights Reserved. EYG no. 02708-164Gbl BMC Agency GA 0044_04438 ED None. In line with EY’s commitment to minimize its impact on the environment, this document has been printed on paper with a high recycled content. This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax or other professional advice. Please refer to your advisors for specific advice.

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