Data quality in budget support: weaknesses in some indicators and in the verification of the payment for variable tranches

Summary:

Budget support is a form of EU aid which involves transferring money to the national treasury of a partner country, subject to that country’s compliance with agreed conditions for payment. Budget support payments are made in the form of either fixed or variable tranches. The amounts paid from variable tranches depend on the performance achieved by partner countries, which is measured by pre-defined performance indicators. We examined whether the Commission used relevant and reliable performance data for disbursing budget support variable tranches. We conclude that one third of the performance indicators reviewed had design weaknesses, which allowed for different interpretations as to whether targets had been achieved. Furthermore, the Commission’s assessment of whether variable tranche indicators had been met was not always reliable. We make a number of recommendations to improve the formulation of indicators, increase the use of outcome indicators and improve the verification of the performance data used to disburse variable tranches.

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