15. Underlines the fact that the Commission surveys show that not only access to finance but also access to skills, including managerial skills and financial and accountancy knowledge, are critical factors for SMEs in accessing funds, innovating, competing and growing; believes that the delivery of EU financial instruments should therefore be accompanied by the provision of appropriate mentoring and coaching schemes and knowledge-based business services;

5. Given that budget support constitutes 34 % of 2010 EDF payments, is concerned that the Court of Auditors found that budget support payments in the first half of 2010 were affected by a high frequency of non-quantifiable errors due to the lack of a structured assessment of the progress of public finance management (PFM) reforms by the recipient governments; in this respect, welcomes the introduction in June 2010 of a new format for Delegations’ annual reporting on PFM reforms in recipient countries and urges Delegations to apply this new framework consistently; urges the Commission to address the remaining weaknesses in the methodolo ...[+++]gy and management of its general budget support programmes, in particular the lack of a sound risk management framework and an evaluation methodology to estimate the impact on poverty reduction, as well as insufficient coordination with the Member States on budget support contracts and payments; considers the Green Paper launched in 2010 a positive contribution to the reflection on how to turn budget support into a more efficient and effective instrument for poverty reduction;

53. Notes the donor commitment to channel at least 50 % of development aid through the Afghan Government's core budget within two years; emphasises, however, that budget support must go hand in hand with tangible improvements in the situation of governance in the country and increased donor confidence in Afghan public financial management (PFM), and requires urgent reforms and capacity building to strengthen PFM systems, reduce corruption and improve budget execution; invites the Commission to assess – taking into account the financ ...[+++]ial capacity of Afghan institutions and the pace of progress on key PFM reforms – whether specific Afghan ministries or other institutions, including at a decentralised level, could become eligible as recipients of sectoral budget support in the future, and if so, under what conditions;

4. Notes the donor commitment to channel at least 50 % of development aid through the Afghan Government’s core budget within two years; emphasises, however, that budget support must go hand in hand with tangible improvements in the situation of governance in the country and increased donor confidence in Afghan public financial management (PFM), and requires urgent reforms and capacity building to strengthen PFM systems, reduce corruption and improve budget execution; invites the Commission to assess – taking into account the financi ...[+++]al capacity of Afghan institutions and the pace of progress on key PFM reforms – whether specific Afghan ministries or other institutions, including at a decentralised level, could become eligible as recipients of sectoral budget support in the future, and if so, under what conditions;

13. Acknowledges that when budget support funds have been released to an ACP State, these funds are spent and controlled according to national and not EDF control procedures; is aware that this necessitates a change in the Commission's follow-up procedures away from traditional controls and checks of transactions towards an assessment of the state of public finance management based on monitoring information and performance indicators; however, notes that the Court of Auditors finds that criteria used to release budget support funds essentially consist of macroeconomic indicators but provide only partial information about public finance ...[+++] management, and that no separate, clear analysis and evaluation of the quality of public finance management is produced;

The promotion of sound public finance management and efficient control of the use of public finance is critical in this regard. It includes the promotion of effective, efficient, fair and transparent tax systems and the fight against fraud and illicit financial flows.Sound public finance management is a key element of good governance and a key basis for an effective and resilient public sector.