Title page

Contents

DG EMPL IN BRIEF 4

Executive Summary 5

A. Key results and progress towards achieving the Commission's general objectives and DG EMPL's specific objectives 5

B. Key performance indicators 11

C. Key conclusions on internal control and financial management 12

D. Provision of information to the Commissioner(s) 14

1. KEY RESULTS AND PROGRESS TOWARDS ACHIEVING THE COMMISSION'S GENERAL OBJECTIVES AND SPECIFIC OBJECTIVES OF THE DEPARTMENT 15

General objective 1: A European Green Deal 16

General objective 2: A Europe fit for the digital age 17

Specific objective 2.1: A digitally skilled workforce 17

General objective 3: An economy that works for people 19

Specific objective 3.1: Effective support to Member States in their structural reforms and investments in the context of the European Semester 19

Specific objective 3.2: Stronger social dialogue 22

Specific objective 3.3: Decent and safe working conditions for all 24

Specific objective 3.4: Better functioning labour markets 26

Specific objective 3.5: Greater social fairness and more effective social protection 28

Specific objective 3.6: Enhanced labour mobility 30

Specific objective 3.7: More jobs created and sustained in micro- and social enterprises 32

General objective 4: A stronger Europe in the world 33

General objective 5: Promoting our European way of life 35

Specific objective 5.1: A skilled workforce to master the green and digital transition 35

Specific objective 5.2: Vocational education and traininge ffectively addresses the labour market needs and prepares people for the green and digital transition 37

General objective 6: A new push for European democracy 39

Specific objective 6.1: Equality 39

Managing the 2014-2020 ESF towards delivery of policy results 41

Implementation of 2014-2020 ESF 41

Assessment of programmes' performance 41

Status of programme implementation and key achievements 42

Managing the 2021-2027 ESF+ towards delivery of policy results 43

Enabling conditions 45

Reporting on performance 47

2. INTERNAL CONTROL AND FINANCIAL MANAGEMENT 48

2.1. Control results 49

2.1.1. Effectiveness of controls 51

2.1.2. Efficiency of controls 66

2.1.3. Economy of controls 68

2.1.4. Conclusion on the cost-effectiveness of controls 69

Audit observations and recommendations 69

2.2. Assessment of the effectiveness of internal control systems 72

2.3. Conclusions on the assurance 72

2.4. Declaration of Assurance and reservations 75

3. MODERNISING THE ADMINISTRATION 76

3.1. Human resource management 76

3.2. Digital transformation and information management 77

3.3. Sound environmental management 79

3.4. Examples of economy and efficiency 79

ANNEX 1: Statement of the Director(s) in charge of Risk Management and Internal Control 83

ANNEX 2: Performance tables 84

ANNEX 3: Draft annual accounts and financial reports 107

ANNEX 4: Financial scorecard 134

ANNEX 5: Materiality criteria 137

ANNEX 6: Relevant Control System(s) for budget implementation (RCSs) 143

ANNEX 7: Specific annexes related to "financial management" 151

ANNEX 7A: ESF/YEI AND FEAD: Brief INTRODUCTION TO SHARED MANAGEMENT AND ARCHITECTURE FOR BUILDING ASSURANCE 153

ANNEX 7B: 2014-2020 ESF/YEI and FEAD: Audit opinion and error rates 162

ANNEX 7C: 2014-2020 ESF/YEI and FEAD: List of programmes with deficiencies in the functioning of the management and control system (MCS) 179

ANNEX 7D: 2014-2020 ESF/YEI and FEAD: Audit authorities with weaknesses and requested improvements 181

ANNEX 7E: 2014-2020 ESF/YEI and FEAD: Actions to improve further the effectiveness of management and control systems and to boost the prevention,... 182

ANNEX 7F: 2014-2020 ESF/YEI and FEAD: On-the-spot audit work carried out by DG EMPL in 2023 184

ANNEX 7G: Preventive and corrective measures (2014-2020 programmes) 186

ANNEX 7H: 2014-2020 ESF / YEI / FEAD: Financial corrections applied by the Member States 196

ANNEX 7I: 2014-2020 ESF / YEI / FEAD: Typologies of irregularities reported by Member States with the 2020-2021 assurance packages and by DG EMPL auditors 204

ANNEX 7J: 2007-2013 ESF programmes: Assurance at closure 207

ANNEX 7K: 2021-2027 ESF+: Error rates 215

ANNEX 7L: Legality and regularity of other management modes 218

ANNEX 7M: Fraud prevention and detection 222

ANNEX 7N: European Court of Auditors 226

ANNEX 7O: Internal Audit Service: Audit observations and recommendations 235

ANNEX 7P: Glossary of terms 236

ANNEX 8: Specific annexes related to "assessment of the effectiveness of the internal control systems" 242

ANNEX 9: Specific annexes related to "Control results" and "Assurance: Reservations" 243

1. Annex related to "Control results" - Table X: Estimated risk at payment and at closure 243

2. Reservations 244

A. Reservation fiche 2014-2020 programming period 244

B. Reservations not issued or lifted in 2023 due to the application of the 'de minimis' threshold. 246

C. Operational programmes under reservation and targeted actions for the 2014-2020 programming period 246

D. Shared management: Reservations issued for Operational Programmes in last year's annual activity report and lifted in 2023 250

ANNEX 10: Reporting - Human resources, digital transformation and information management and sound environmental management 254

ANNEX 11: Implementation through national or international public-sector bodies and bodies governed by private law with a public sector mission (if applicable) 260

ANNEX 12: EAMR of the Union Delegations (if applicable) 262

ANNEX 13: Decentralised agencies and/or EU Trust Funds (if applicable) 263

ANNEX 14: Reporting on the Recovery and Resilience Facility 295

Table 1. Overview of the implementation of the ESF+ by specific objective 44

Table 2. Overview of ESF+ investments by policy area 45

Table 3. Expenditure Overview in 2023 per type of activities 49

Table 4. Overview of non-expenditure items 50

Table 5. Estimated risk at payment and at closure 63

Table 6. Preventive and corrective measures 64

Table 7. Share of DG EMPL's budget by management mode 66

Table 8. Indicators on control efficiency for shared management 67

Table 9. Indicators on control efficiency for direct and indirect management 67

Table 10. Overall conclusion 73

Charts

Chart 1. Assurance building process for programme accounts submitted and accepted in 2023 (annual accounts 2021-2022) 52

Chart 2. Assessment of the management and control systems, number of programmes 56

Chart 3. Reservations per Member State/UK and the year of the Annual Activity Report 57

Annex Tables

ANNEX 3: Draft annual accounts and financial reports 107

TABLE 1. OUTTURN ON COMMITMENT APPROPRIATIONS IN 2023 (in Mio €) for DG EMPL 108

TABLE 2. OUTTURN ON PAYMENT APPROPRIATIONS in 2023 (in Mio €) for DG EMPL 111

TABLE 3. BREAKDOWN OF COMMITMENTS TO BE SETTLED AT 31/12/2023 (in Mio €) for DG EMPL 114

TABLE 4. BALANCE SHEET for DG EMPL 124

TABLE 5. STATEMENT OF FINANCIAL PERFORMANCE for DG EMPL 125

TABLE 5bis. OFF BALANCE SHEET for DG EMPL 126

TABLE 6. AVERAGE PAYMENT TIMES for DG EMPL 127

TABLE 7. SITUATION ON REVENUE AND INCOME in 2023 for DG EMPL 128

TABLE 8. FINANCIAL IMPACT OF EX-ANTE AND EX-POST CONTROLS in 2023 for DG EMPL 129

TABLE 9. AGEING BALANCE OF RECOVERY ORDERS AT 12/31/2023 for DG EMPL 130

TABLE 10. Recovery Order Waivers 〉= 60 000 € in 2023 for DG EMPL 131

TABLE 11. Negotiated Procedures in 2023 for DG EMPL 131

TABLE 12. Summary of Procedures in 2023 for DG EMPL 132

TABLE 13. BUILDING CONTRACTS in 2023 for DG EMPL 132

TABLE 14. CONTRACTS DECLARED SECRET in 2023 for DG EMPL 133

TABLE 15. FPA duration exceeds 4 years - DG EMPL 133

TABLE 16. Commitments co-delegation type 3 in 2023 for DG EMPL 133

ANNEX 7H: 2014-2020 ESF / YEI / FEAD: Financial corrections applied by the Member States 202

Table 1. Follow-up of programmes with RTER above 2% and updated risk at closure from previous AARs 202

ANNEX 7J: 2007-2013 ESF programmes: Assurance at closure 207

able 1/Table 3. Closure of 2007-2013 programmes 207

ANNEX 7L: Legality and regularity of other management modes 218

Table 1. Programming, evaluation, selection of proposals and contracting 218

Table 2. Monitoring the execution 219

Table 3. Ex post controls - Audit work 220

Table 4. Subsidies paid by DG EMPL to decentralised agencies 221

ANNEX 9: Specific annexes related to "Control results" and "Assurance: Reservations" 243

Table 1/Table X. Estimated risk at payment and at closure 243

Annex Graphs

Graph 1. Assurance architecture for shared management 2014-2020 154

Graph 2. Assurance architecture for shared management 2021-2027 154

Graph 3. Control system 155

Graph 4. Annual assurance package and audits of operations 157

Graph 5. Assurance process covering different accounting years (July N to June N+1) 161