Recommendations

When and how to develop effective recommendations to help improve financial management and the performance of EU programmes and policies.

Performance audit Compliance audit Financial audit

Reporting

Ref: 18.260

Principles

In our reports, we make relevant, useful, practical and cost-effective recommendations to help our auditees address weaknesses we identify. We use them to suggest ways of improving financial management and the performance of EU programmes and policies. We follow up on the extent to which our recommendations have been implemented. We make recommendations that:

address the cause of problems identified in the audit;
are constructive, well-founded and flow logically from the findings and conclusions;
provide feasible, practical and cost-effective remedies;
address the entities with the responsibility and competence to act;
state clearly who needs to do what, and by when;
are phrased to avoid truisms or simply inverting the audit conclusions;
have been discussed with the auditee(s).

We follow a rigorous and evidence-based process for preparing recommendations, and document the reasons for making them. We start developing potential recommendations early in the audit process, and test them against evidence as the audit proceeds. We consult on and discuss potential recommendations with colleagues and the hierarchy and with the auditees before submitting the draft report to the chamber. Where our experience and knowledge of an area is limited, or we cannot think of a suitable and effective remedy based on good practice, we do not provide a recommendation. However, in this case we ensure the conclusion is sufficiently clear to identify that corrective action is needed. Publishing unconvincing or empty recommendations is counterproductive and could undermine the credibility of our audit findings. It is the auditees’ responsibility to consider and implement necessary corrective action in line with our findings and conclusions.

Instructions

Start developing recommendations early on in the audit

When planning the audit already start considering ideas for potential good practice and potential recommendations, particularly in areas with a high level of risk. Refer to previous audits, for example search the ECA website or the Timeline by using keywords to identify relevant reports. You can also consult previous conclusions and recommendations recorded in the ECA database, RECODB, which allows you to filter by chamber, year, report type, auditee, task number, follow-up status and keywords. Use this information to ensure the consistency of recommendations over time. Consider knowledge management work to identify areas for potential recommendations. Present potential recommendations or potential areas for improvement as a likely outcome of the audit in the task plan.

Document the reasoning behind recommendations

Document for each potential recommendation the reasoning for it, with reference to facts, analysis and conclusions. Where applicable, set out the reasons for dropping those that have been removed in the process. Where possible, include in the documentation criteria or benchmarks for use when following up the recommendations later on, once published. Include the documentation in Assyst, to allow the hierarchy and reviewers to ensure that recommendations are sound, add value and are based on well-evidenced observations.

Examples of documenting reasoning for recommendations

Consider costs versus benefits

When developing recommendations, as far as possible compare the likely cost of the measures proposed, with the expected benefit. Consider the likely cost of implementing recommendations by consulting the auditee. Only make recommendations where the value of the desired improvement exceeds the cost associated with implementation. Document your comparison of expected costs and benefits, for example using a Swiss red line chart.

Discuss potential recommendations

During the examination phase of the audit, test potential recommendations (including possible alternatives) by discussing them regularly within the team and with the member’s office, to help assess their relevance, cost-effectiveness and feasibility. Consider including a discussion of the recommendations during the drawing conclusions process. As well as the audit team, it is useful for the principal manager, the director and the reporting member to be present or represented at this discussion. Consider inviting interested colleagues from other chambers or the DQC, since they may be aware of good practice in other policy areas, and of how auditees have responded to similar recommendations. To support structured discussion you can illustrate the reasoning and logic underlying your proposal in a table. If you are using external experts, consider asking them to help assess the qualities of the potential recommendations. As part of the ‘no surprises approach' discuss potential recommendations with the auditee(s) throughout the audit process, whilst making their provisional status clear. Doing so allows you to explore their feasibility and cost-effectiveness before including them in the draft report. It can also help gain auditees’ support for the suggested changes and give them a degree of ownership of proposed actions, so that they are ready to take responsibility for the improvements. Once the recommendations have been included in the draft report, and the reporting member is satisfied with them, and has given permission, consider sharing them with the auditee(s), emphasising that they may be subject to change before the chamber approves the draft report. Ways of doing this include, for example, sending parts of all of the draft of the report to the auditee, which includes the recommendations, or presenting only the draft recommendations to the auditee(s), to invite oral feedback. Explain that this working draft has not been approved by the ECA and therefore may be subject to change. Take account of auditee comments as far as possible. If necessary, consider whether or how to adjust the wording, or even whether to withdraw the recommendation. Document key points in this process, for example in minutes of meetings, e-mail exchanges or track changes to the original text. Complete this exercise before sending the draft report for independent quality review.

Address each recommendation to a single auditee

Address recommendations to auditees responsible for taking, and having the capacity and competence to take corrective action. This depends on the management mode for budget implementation and the legislative set-up. The identifies the auditee/s and sets out the roles and responsibilities of key actors in the audited area. Address each recommendation to a single auditee, and if necessary for clarity, specify in which capacity or role. Note that:

we address most of our recommendations to the Commission, our main auditee and responsible for the overall implementation of the budget; and
the Treaty or other legislation gives partial or exclusive responsibility to member states in some policy areas, or parts of policy areas. In such cases, we make recommendations to member states we have audited.

Make recommendations to other

EU bodies

as appropriate, when we have included them in the scope of the audit. During the audit, we sometimes observe that a policy has been set up with unclear objectives or in an inefficient or ineffective way. If appropriate, address recommendations that would require legislative change for their implementation to the Commission, not to the co-legislators.

Use clear and unambiguous language

Draft recommendations using clear and unambiguous language.

Use one-sentence recommendations to state the main message for a single addressee, using a positive tone, active verbs and concise language.
Make clear who needs to do what and, where appropriate, how, when, and where, including in exceptional cases when there are multiple addressees.
Avoid using a preamble to the recommendation, since the reason for the recommendation should be clear from the conclusion.
As far as possible, present each action in a separate recommendation.
Use the same terminology throughout the report, so that readers can quickly identify the observations linked to the conclusions and recommendations.
Avoid using abbreviations in the recommendations, apart from very common ones, such as ‘EU’. If it is necessary to use a limited number of abbreviations occurring frequently in the report, write them out in full the first time they appear in the conclusions and recommendations section.
Be careful when using non-actionable and insufficiently specific verbs and subjective adjectives, which can result in recommendations formulated in a way that makes them difficult to implement and follow up.
Avoid combining different issues in one recommendation. This helps avoiding that recommendations are later only partially accepted and / or partially implemented.

Present recommendations in a standardised way

Present conclusions and recommendations in a separate section at the end of the report. Recommendations follow the corresponding conclusions wherever possible.

Highlight recommendations by using boxes.
Include titles to the recommendations in the boxes, where possible using the active voice. Make sure the title of each recommendation reflects the content in meaning and terminology.
Do not include references to the observations paragraphs in the recommendations boxes.
Use the same format for all recommendations in the report.
Present recommendations logically to help readers. Follow the structure of the report as far as possible. Within each recommendations box, present the recommendations in order of importance.
If necessary split recommendations into sub-recommendations, for example by action. Label the sub-recommendations a), b), c) etc. and avoid further sub-division, because this becomes difficult to read. Do not use non-numbered bullet points, since this creates problems during the adversarial procedure and for follow up.
Use an introductory phrase (usually ‘We recommend that the Commission should:…’) that contains only words common to all of the recommendations in the list/box. Check that the introductory phrase, plus each recommendation make up a complete sentence for each sub-recommendation.
Include a target implementation date for each recommendation. Be as specific as possible, for example: ‘June 2022’, ‘(end of) 2023’ or ‘Annually, starting from the 2022 annual reports’. Avoid making implementation contingent on a legislative, regulatory, or revised management arrangement (such as ‘next Framework Programme’ or ‘during next revision to legislation/ procedures’). Do not use ‘immediately’ or ‘as soon as possible’.

Limit the number of recommendations

Avoid making too many recommendations as this can detract from the impact of a report. Aim not to exceed eight recommendations (including sub-recommendations) per published special report. Prioritise those recommendations that we can expect to add the most value.

When not to make recommendations

Not feasible or practical

When you show recommendations to the auditee/s, they may reply that the actions proposed are not feasible. Consider carefully the reasons given, which may relate to the degree of competence they have in the policy area under existing legislation, the target implementation date proposed, or non-proportionate costs. Together with the auditee/s, examine the potential benefits and costs of the actions proposed and consider whether or how to adjust the wording of the recommendations or the timeframe. Decide whether to withdraw the recommendation in favour of additional clarification of the weakness we have found in our audit in the report, and an invitation to the auditee to propose a solution in their reply. If we retain the recommendation, ask the auditee to state clearly in their reply the reasons for not accepting it.

Less significant deficiencies

Avoid making recommendations on immaterial or exceptional matters. Focus on making recommendations that address the most significant and systematic deficiencies.

Already implemented

The auditee/s may indicate in their draft replies that they have already undertaken the action proposed, or are in the process of doing so. Verify if this is indeed the case, and if so, describe and recognise it in the observations. If appropriate, point out that the action has been taken as a result of our audit. In such cases, do not retain the recommendation, unless there is a risk that the corrective action initiated will not be completed. Ask the auditee/s to indicate in their replies any further action they plan to take.

Inverting conclusions

Avoid writing a recommendation that simply inverts a conclusion, (for example, ‘Conclusion - the rules are not being followed. Recommendation – follow the rules’) as it should be clear from the conclusion when corrective action is required.