Second Level Control: process and most common findings

Transcription

1 The CENTRAL EUROPE Programme Second Level Control: process and most common findings Training on Project, Finance Management and Communication Vienna - 11 September 2013

2 Content 1. Second Level Control process Legal basis and functions Flowchart of the process Steps of the process 2. Most common findings Formal/sub-system findings Financial findings

3 Legal basis and functions The body in charge of carrying out Second Level Controls is the Audit Authority (AA) The AA is set up in accordance with Art. 59 (1) (c) of EC Reg. 1083/2006 Legal Basis for Second Level Control Art 62 of EC Reg. 1083/2006 Art 16 of EC Reg. 1828/2006 Chapter 4 of Control and Audit Guidelines Art. 9 of Subsidy Contract Art. 6 of Partnership Agreement

4 Flowchart of the process Step 1 Step 2 Step 3 Step 4 Step 5 Step 6 Projects sampled by AA and approved by GoA JTS introduction to LP/PPs On-the-spot audit visit Draft Audit Report Final Audit Report JTS corrective and followup measures Auditors to LPs/PPs to plan audit visit Contradictory procedure FAR sent to LPs/PPs/FLC /JTS PM&FM Corrective measures/fcf/ Recovery Letter sent to LP/PP/FLC

5 Projects sampled by AA and approved by GoA The JTS provides the Audit Authority with an overview table including expenditures declared to EU COM for the reference audit year The Audit Authority takes the sample of projects to be audited [approved by Group of Auditors (GoA)] on a random basis The sample together with the explanatory note is then communicated to the MA/JTS

6 JTS introduction to LP/PPs On the basis of the sample communicated by the AA, the MA/JTS send out an introduction to LPs/PPs to announce audit visits by auditors. Such communication: Copies First Level Controller (FLC), GoA Member, Lead Partner (in case of PP) and JTS Project and Finance Managers Reminds the audited LP/PP the duties set out in 9 of Subsidy Contract and 6 of Partnership Agreement (e.g. relevant project documentation available, responsible persons present during the audit, etc.) Informs the LP/PP that it will be further contacted by auditors to fix the date of the audit and to be given more information

7 On-the-spot audit visit The on-the-spot audit visit usually takes place in one or two days at the premises of the relevant LP/PP Even if the audit visit runs smoothly and no findings are detected on-thespot, this does NOT prevent or exclude that findings may be later included in the Draft Audit Report The MA/JTS encourage FLC participation in audit visits in order to provide support to LP/PPs.

8 Draft Audit Report Once the on-the-spot audit visit is completed, the Draft Audit Report (DAR) is drawn up by the auditors and approved by GoA member DAR is sent to MA/JTS that initiate the contradictory procedure (via e- mail) involving audited LP/PP, LP (in case of PP) and FLC and providing a deadline within which all comments shall be received Once the contradictory procedure is finalized, the MA/JTS send out the comments received to the AA

9 Final Audit Report Once contradictory procedure is finalized, AA prepares the Final Audit report (FAR) based on comments put forward by LP/PP, FLC and MA/JTS FAR is provided to the MA/JTS that send it to relevant LP/PP copying FLC, LP(in case of PP) and JTS Project and Finance Managers

10 JTS corrective and follow-up measures In case of findings included in FAR, the MA JTS take the relevant corrective and follow-up measures If finding is formal - MA/JTS checks that LP/PP/FLC take remedial action. If finding is financial - MA/JTS kick off relevant procedure to withdraw or recover the ineligible amount: If project is still running - a Financial Correction Form is generated by the MA/JTS and sent to the LP If project is closed - a Recovery Letter is sent out If financial finding is systemic - MA/JTS ask FLC to take corrective measures

11 Most common findings Audits of Operations carried out in 2012 Main findings detected concerning FLC and/or LP/PPs: LP/PPs No posting of expenditures in the separate accounting system Incorrect allocation of costs among WPs/BLs Public procurement issues (e.g. contract not sufficiently detailed - lack of link between services delivered and services contracted) FLC Lack of check concerning immediate transfer of ERDF payments from LP to PP Incorrect annulling procedure/stamp Checks not performed on originals but on copies of documents Lack of check of proof of payment

12 Most common findings Audits of Operations carried out in 2012

13 Most common findings Audits of operations - Comparing financial findings detected in 2011 and 2012 Audit of Operations 2011 Audit of Operations 2012