- On April 30, 2024, the European Commission’s Directorate-General for Agriculture and Rural Development (DG AGRI) issued an “ultimatum,” warning that payments could be suspended.
- On May 13, 2024, Paraskevi Tycheropoulou, then head of the organization’s Internal Audit Directorate, alerted the organization’s president, Kyriakos Babasidis, to the risks.
By Vangelis Triantis
Data Journalists have released new evidence regarding the OPEKEPE scandal. The documents warn of the risk that OPEKEPE could be placed under a payment suspension regime.
One of these documents was sent by the European Commission’s Directorate-General for Agriculture and Rural Development (DG AGRI) on April 30, 2024, to OPEKEPE’s administration at the time. DG AGRI deemed it a “bombshell” document and warned that, if OPEKEPE failed to comply with the accreditation criteria, DG AGRI would deem it “necessary to initiate the procedure” to place the organization under payment suspension.
The second document is a letter dated May 13, 2024, from Paraskevi Tycheropoulou, the former head of OPEKEPE’s Internal Audit Directorate, addressed to the organization’s former president, Kyriakos Babasidis. In the letter, Ms. Tycheropoulou expressed concern that OPEKEPE might be placed under payment suspension. She outlined the problems she had identified in detail, as well as the necessary actions. Ultimately, Ms. Tycheropoulou’s recommendations were ignored, and she now faces disciplinary and criminal proceedings. Why OPEKEPE’s administration disregarded the warnings remains a question, as it led to the serious payment issues the organization is facing today. But let’s start from the beginning.
The Commission’s “bombshell” document to OPEKEPE
On April 30, 2024, the Directorate-General for Agriculture and Rural Development (DG AGRI) of the European Commission sent OPEKEPE’s administration a highly important document. The document concerned the “Decision on the Clearance of Accounts for the 2023 Financial Year” of the organization. It contained a series of “observations and recommendations arising from the financial clearance process” regarding OPEKEPE’s compliance with the accreditation criteria.
The Directorate-General for Agriculture and Rural Development (DG AGRI) was clear and left no room for misinterpretation. OPEKEPE would be deemed in violation if it failed to comply, which would necessitate the initiation of the procedure outlined in Articles 34 of Regulation (EU) No. 908/2014 and 52 of Regulation (EU) No. 1306/2013. In other words, OPEKEPE’s accreditation would be suspended. This meant that Greece’s sole payment agency, responsible for distributing subsidies to farmers and livestock breeders, risked becoming unable to make payments. The problem actually began almost a year earlier. On June 8, 2023, DG AGRI requested that the competent authority—the Ministry of Rural Development and Food—assess the possibility of placing OPEKEPE’s accreditation under supervision. On September 15, 2023, the Ministry of Rural Development informed DG AGRI that it had decided not to place OPEKEPE’s accreditation under review. The ministry argued that “most of the deficiencies identified by DG AGRI and the certifying body had already been addressed within the framework of the improvement plan previously implemented.”
However, the report for the 2023 financial year once again found “several serious deficiencies in the Payment Agency’s internal control system and compliance with the accreditation criteria.” Specifically, the April 30, 2024, letter listed a series of findings concerning the payment agency’s compliance with the accreditation criteria.
OPEKEPE’s organizational structure was described as “highly unstable at both managerial and non-managerial levels, as well as in its IT systems.” OPEKEPE also had a “lack of staff and specialized personnel,” and its internal audit service identified very high and extreme risks.
The document noted that the existing institutional framework did not ensure a clear separation of responsibilities between the Ministry of Rural Development and Food and the payment agency. It identified delays of up to 16 months in information provided by the payment agency to the certifying body and a “lack of monitoring, including oversight of the bodies to which responsibilities had been delegated.” The Declaration Reception Centers (KYD) are one such example. The European Public Prosecutor’s Office later highlighted them as playing a pivotal role in the OPEKEPE subsidy scandal.
Additionally, the document stated that, based on information from the ongoing certification audit and the certifying body’s inspection report, the Directorate-General for Agriculture and Rural Development (DG AGRI) noted a clear deterioration in the payment agency’s internal control system and its compliance with the accreditation criteria.
“In DG AGRI’s view, the deficiencies identified in previous financial years were not properly addressed, as no structural or effective corrective measures were taken to address their root causes,” the document stated.
For this reason, DG AGRI concluded that OPEKEPE “should be urgently placed under review and implement a certification action plan to address all deficiencies concerning the payment agency’s compliance with the accreditation criteria.”
The letter emphasized the “seriousness of the situation” and requested a technical meeting to discuss the competent authority’s assessment and planned corrective actions.
The document explicitly stated, “In DG AGRI’s view, the lack of sufficient, effective, and immediate corrective measures could lead to the withdrawal of OPEKEPE’s accreditation, in accordance with Article 2, paragraph 6 of Regulation (EU) 2022/128.”
The European Commission’s document
Tycheropoulou’s letter to Babasidis and her observations
On May 13, 2024, Paraskevi Tycheropoulou, the head of OPEKEPE’s Internal Audit Directorate at the time, sent an informative memorandum to the organization’s president, Kyriakos Babasidis. The memorandum concerned the “Decision on the Clearance of Accounts for the 2023 Financial Year” and followed a document from the European Commission.
In the same memorandum, Ms. Tycheropoulou referred to a series of “difficulties” she had identified regarding OPEKEPE’s accreditation and the criteria it was required to meet. She emphasized that the Internal Audit Directorate’s current organizational structure falls short of meeting basic criteria. It is also understaffed and lacks the necessary interdisciplinary personnel to carry out its work effectively.
Furthermore, although the Internal Audit Directorate is responsible for evaluating IT systems, it lacks IT specialists, consequently preventing the integration of IT systems into the annual audit program.
Ms. Tycheropoulou noted that the annual audit program was submitted to the president of the organization for approval at the beginning of February, but has not yet been returned or approved. This means that audit assignments cannot be allocated to auditors.
She also highlighted another issue concerning a “pending matter” from the previous administration regarding audits of the 2020 national reserve. She stated that numerous irregularities were observed in the management of the national reserve and that, for this reason, the previous president did not accept the report and requested a re-audit of the 2020 national reserve in order to recover undue payments.
However, as she emphasized, although there has been electronic correspondence with the IT Directorate since early February, they have never responded and have not provided the additional information requested to proceed with the re-audit.
Ms. Tycheropoulou also noted that the Internal Audit Directorate, through its head, was not invited to any preparatory meetings for submitting the Certifying Body’s 2023 report. Additionally, the Internal Audit Directorate was not invited to any preparatory meetings for audits following the European Commission’s document. As it turned out, significant elements of the observations concerned the Internal Audit system.
Ms. Tycheropoulou raised another issue concerning the OPEKEPE Board of Directors’ decision dated December 28, 2023. This decision involved transferring senior managers from one directorate to another in a rotational manner, resulting in the removal of employees who had recently handled critical European Commission investigations under challenging conditions. Ms. Tycheropoulou further emphasized that this transfer occurred at a critical time for the organization.
The proposals that were ignored
In addition to outlining existing problems, Ms. Tycheropoulou made a series of recommendations. These included restructuring the Internal Audit Directorate to generate statistical data for the other directorates, increasing audits in cases of irregularities such as those involving the national reserve, linking the Internal Audit Directorate to the Organization’s databases immediately, and digitizing the Directorate’s operational procedures.
Ms. Tycheropoulou made another recommendation concerning the migration of the organization’s systems to gov.gr, which was initiated in 2022. She described this migration as a necessary step to meet the requirements of the new CAP. She explained that the reason for this change was that the systems used until 2021 could not meet the new CAP requirements. These systems are outdated and increase the organization’s risk exposure, as evidenced by the recent ISO 27001 information security inspection.
Among her recommendations was the integration of the Single Aid Application on the Gov platform with all available databases of national authorities, such as AADE, KEPYO, and the Hellenic Cadastre (NPDD). She noted that this would offer multiple benefits, such as improving the reliability of the organization’s data and enabling immediate cross-checks that were previously impossible due to a lack of connectivity with these platforms.
Ultimately, Ms. Tycheropoulou’s recommendations were ignored. A year and a half later, she is facing disciplinary and criminal proceedings herself. Meanwhile, Greece is facing serious issues regarding its ability to disburse subsidies in the coming years following the European Public Prosecutor’s Office’s investigation.
Ms. Tycheropoulou’s letter
