Brunis, *00007 REGIO Il/AI/rs D(2008) /970002

Transcription

1 Final version of 09/01/2008 COCOF 07/0063/03-EN ** * TUT ŕr Ä- EUROPEAN COMMISSION DIRECTORATE-GENERAL REGIONAL POLICY The Director-General Brunis, *00007 REGIO Il/AI/rs D(2008) / To: Subject: Delegates of the Committee for the Coordination of Funds (COCOF) Guidance note on the annual summary under Article 53b(3) of amended Financial Regulation 1 The guidance note on the annual summaries was finalised and issued on 18 December 2007 given the importance for the Member States to be fully aware of the expectations of the Commission and in view of the 15 February 2008 deadline. I understand that many Member States in COCOF have given clear indications of their disagreement with some elements of the guidance note and have expressed their concern that the Commission should nevertheless proceed to distribute a final text. I therefore wish to explain to you personally why the Commission has decided to maintain some of the contested points in the guidance note and to inform you of the legal arguments in support of that position. Even though we accept the obligation to take into account as far as possible the different points of view expressed by Member States, there are instances where the Commission has to take a position which may not be shared by some Member States, particularly where its responsibility for the EU budget is concerned. The Member States were consulted on three different occasions on the content and format of the guidance note, where they had the opportunity to examine and give their views as well as the possibility to make written observations. It was presented by the Commission in the COCOF meetings of 24 October and 28 November 2007, as well as in a technical meeting of 16 November between the audit services of the Structural Funds Directorates General and the audit authorities of the Member States. As a result of the comments of the Member States, the guidance note has been significantly changed from its original version. I am sure you appreciate this. However, three issues, remain contested by the Member States, following the meeting of 28 November: the applicability of the measure to expenditure of the programming period, the inclusion of information on audits between July and December for the period, and the overall analysis. The Commission has obtained advice from its Legal Service on these three issues. A copy of the advice as such cannot be Regulation (EC, Euratom) No 1995/2006 of 13 December 2006 amended Regulation (EC, Euratom) n l 605/2002 on the Financial Regulation applicable to the general budget of the European Communities

2 circulated due to Commission policy. However the essential points are set out in the attached non-paper. Firstly, for the applicability of the period, there is clear confirmation that the requirement of the annual summaries relates to all expenditure in the preceding year (2007 being the first year), regardless of the programming period. The Commission therefore expects Member States to follow the guidance and provide the information relating to this period. Secondly, for the available information on audits for the period undertaken in a given year between July and December, the Commission maintains that this is a reasonable and logical element to include, in order to ensure that all relevant information concerning the year is provided. In this respect the guidance note has been carefully worded so as to maintain the appropriate balance and be fully compliant with the legal texts. Thirdly, regarding the overall analysis, the Commission has adapted the guidance note to make it clear that this is a recommendation and not a clear requirement. Nevertheless, Mr Kallas in his letter of 13 November 2007 to the President of the EU Council of Economic and Finance Ministers states that "A summary which is no more than a catalogue of available audits has no value added, and would make this a meaningless additional reporting exercise'". As a result, in order to ensure that there is a real added value to the exercise, Member States are strongly urged to follow the recommendation. I trust in your continued good collaboration and look forward to receiving your first annual summaries by 15 February for the Director General absent, Michele Pasca-Raymondo Deputy Director General DirkAhner Attachment: Non-paper on guidance note on annual summary CC: Mr Romero Requeña, Director General DG BUDG, Mr Van der Pas, Director General DG EMPL, Mr Fotiadis, Director General DG FISH

3 ** r r Ά r ΐτ EUROPEAN COMMISSION Brussels, 21 December 2007 NON PAPER Of the Commission services Subject : Guidance note on the annual summary in relation to structural actions and the European fisheries fund under Article 53b (3) of the Financial Regulation (COCOF 07/0063//02-EN) Three questions have been raised in discussion with Member States on the guidance note in subject. 1. The questions are related to the interpretation of Article 53b (3) of the revised Financial Regulation (FR) 1 according to which: "Member States shall produce an annual summary at the appropriate national level of the available audits and declarations. " 2 1 Council Regulation (EC, Euratom) n 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities (OJ L 248 of , p. 1) as amended by Council Regulation (EC, Euratom) n 1995/2006 of 13 December 2006 ( OJ L 390 of , p. 1)) This FR provision is completed by Article 42a of the amended Implementation Rules of the Financial Regulation which reads as follows : " 1. The summary shall be provided by the appropriate authority or body designated by the Member State for the area of expenditure concerned in accordance with the sector-specific rules. 2. The part related to audits shall: (a) include, as concerns agriculture, the certificates established by the certification bodies, and, as concerns structural and other similar measures, the audit opinions provided by the audit authorities; (b) be provided by 15 February of the year following the year of the audit activity for agricultural expenditure and for structural and other similar measures. 3. The part related to declarations shall: (a) include, as concerns agriculture, the statements of assurance provided by the paying agencies, and, as concerns structural and other similar measures, certifications by the certifying authorities; (b) be provided by 15 February of the following financial year for agricultural expenditure and for structural and other similar measures." (Commission Regulation (EC, Euratom) n 2342/2002 of 23 December 2002 laying down detailed rules for the implementation of Council Regulation (EC, Euratom) n 1605/2002 on the Financial Regulation applicable to the general budget of the European Commission européenne, B-1049 Bruxelles /Europese Commissie, B-1049 Brussel - Belgium. Telephone: (32-2)

4 2. The Vice-President of the European Commission Mr Slim Kallas has also written a letter to the Presidency of the European Union Council on 13 November 2007 in which he insisted on the importance of the annual summaries referred to in Article 53b (3) FR for reaching the goal of obtaining a positive Declaration of Assurance (DAS) by the European Court of Auditors. 1 Application of Article 53b (3) FR for the expenditure incurred in the framework of the Operational programmes funded under the budgetary years A majority of Member States consider that Article 53b (3) FR applies only to expenditures incurred in the framework of the interventions. The Council Legal Service has also written a contribution supporting the same interpretation. 4. The legal argumentation to defend the position that Article 53b (3) FR applies also to expenditure incurred in the framework of interventions is set out in this document. 5. The very first argument is that Article 53b (3) FR does not provide any exception or limitation to its implementation. On 15 February 2008, Member States will have, firstly, to send to the Commission the audit opinions provided by the audit authorities and certifications by the certifying authorities available for the year 2007 and, secondly, to produce an annual summary of these documents. 6. The argument used by some Member States and the Council Legal Service, considering that the wording of the new Article 42a of the Implementing rules (IR), does not correspond to the wording of the Regulation 1260/ is not relevant. 7. Article 38 of Regulation 1260/1999 provides that Member States shall take responsibility in the first instance for the financial control of assistance. In particular, to that end, the measures they take shall include Communities (OJ L 357 of , p. 1) as lastly amended by Commission Regulation n 478/2007 of 23 April 2007 (OJ L 111 of , p. 13)). 3 Council Regulation n 1260/1999 of 21 June 1999 laying down general provision on the Structural Funds (OJ L 161 of , p. 1).

5 "...ensuring that assistance is managed in accordance with all applicable Community rules and that the funds placed at their disposal are used in accordance with the principles of sound financial management; "...certifying that the declarations of expenditure presented to the Commission are accurate and ensuring that they result from accounting systems based on verifiable supporting documents..." 8. Commission Regulation n 438/ also contains provisions related to Member States obligations for the intervention period concerning audit and declarations: pursuant to Article 7 ofthat Regulation, Member States' management and control systems shall provide a sufficient audit trail and Article 9 expresses the conditions of the certifications of expenditures. 9. These provisions which are still in force for the current expenditures financed on the basis of Regulation 1260/1999 clearly contain already requirements related to audit and declarations to be made by Member States. 10. Article 42a IR contains a general obligation applicable to expenditures based on all Financial instruments permitting shared management with Member States on a yearly basis 5. The obligation of the Member States laid down in Article 53b (3) FR and implemented in Article 42a IR can also cover audits and certification provided on the basis of their own national rules as soon as those audits and certifications concern expenditures coming from the EC budget. 11. The wording "audit opinions provided by the audit authorities" and "certifications by certifying authorities" have a general value. Article 42a IR is applicable to expenditures even where one does not find the exact same wording in the corresponding legal instruments on whose basis that expenditure has been incurred and paid. 4 5 Commission Regulation n 438/2001 of 2 March 2001 laying down detailed rules for the implementation of Council Regulation n 1260/1999 as regards the management and control systems for assistance granted under Structural Funds (OJ L 63 of , p. 21). See Article 105(1) of Regulation 1083/2006 on the transitional provisions: Regulation 1260/1999 continues to apply on projects co-financed by the Structural Funds on 31 December 2006 until their closure.

6 12. Some Member States and the Council Legal Services raise another argument based on the wording of point 44 of the Interinstitutional Agreement (IIA) of 17 May However, first of all, point 44 of the IIA also does not limit the requirement of audit and declaration to expenditure related to interventions. Moreover, this point 44 is part of the more general Part III of the IIA which contains the provisions related to sound financial management of EU funds and is not in Part I of the IIA which contains a definition and implementing provisions for the financial framework and applies for the duration of that financial framework. Secondly the IIA is a political agreement and not a legal text adopted on the basis of the EC Treaty 8. Consequently, this text cannot limit the implementation of a legal text such as the Financial Regulation which is based on Article 279 of the EC Treaty. 14. Finally, one can also raise the argument based on the consequences of the interpretation of certain Member States and the Council Legal Service. If one were to follow their interpretation of Article 53b (3) FR, this provision would begin to have some effect only in 2009 or At least for the years 2007 and 2008, it is clear that no audit or declaration will be available for the expenditures based on Regulation 1083/2006. Thus, if the will of the legislator had been that the requirement imposed by Article 53b (3) FR would be applicable only three or four years after its entry into force, it would have chosen, for example, to fix 2009 for the beginning of its implementation. But this is not the case. Interinstitutional Agreement of 17 May 2006 between the European Parliament, the Council and the Commission on budgetary discipline and sound financial management (OJ C 139 of , p. 1). Point 44 of this IIA reads as follows: "44. The institutions agree on the importance of strengthening internal control without adding to the administrative burden for which the simplification of the underlying legislation is a prerequisite. In this context, priority will be given to sound financial management aiming at a positive Statement of Assurance, for funds under shared management. Provisions to this end could be laid down, as appropriate, in the basic legislative acts concerned. As part of their enhanced responsibilities for structural funds and in accordance with national constitutional requirements, the relevant audit authorities in Member States will produce an assessment concerning the compliance of management and control systems with the regulations of the Community. Member States therefore undertake to produce an annual summary at the appropriate national level of the available audits and declarations." 7 Point 6 of the IIA. 8 The IIA is published in the C series of the OJ and not in the L series. 4

7 15. Consequently, Member States are bound to provide audits and declarations available in 2007 for all actions financed by EC expenditures. 16. If Member States do not respect the requirements of Article 53b (3) FR and 42 b IR, the Commission would be entitled to consider opening infringement procedures on the basis of Article 226 of the EC Treaty. 2 What can be considered to be an adequate "annual summary"? 17. The requirement of Article 53b (3) FR is simply the provision of an annual summary of the available audits and declaration. 18. This can be a complete synthesis of available information providing an overview of the assurance obtained from the audit activity and certification process but the further request "to analyse the result from the information provided in order to determine the implications at the level of the Member States as a whole, highlighting any systemic deficiencies and summarising the main cross-cutting issues" goes beyond the strict legal obligation. However, in order to provide greater added-value, Member States could be invited to complete the annual summary by such analysis on a voluntary basis. 19. Conversely, if a Member State were just to send a list of audits and certifications made during the year without any summary, the Commission could consider that the obligation provided by Article 53b (3) FR has not been fulfilled by this Member State and would be entitled to open an infringement procedure. 3 On the question concerning the point b of the draft guidance note 20. This question is raised because an annual control report, including an opinion, is already due by 31 December of a given year which shall include findings for a 12 month-period ending on 30 June of the year concerned. Some Member States consider that there is no legal basis to require information on audit and declaration for the period from 1 July to 31 December of the same year. 21. The Commission's services would point out in this regard that Article 53b (3) FR does not contain any additional requirement to carry out specific audits and certification activities. It is only a transparency provision.

8 22. On this basis, the solution proposed in the guidance document seems reasonable. Again, Member States are requested to provide their summary on the basis of the audits and declarations available.