EUROPEAN COMMISSION Budget

Transcription

1 Ref. Ares(2011) /12/2011 EUROPEAN COMMISSION Budget The Accounting Officer of the Commission Brussels, BUDG/C2 NOTE FOR THE ATTENTION OF MRS C. CASTILLO DEL CARPIO HEAD OF UNIT, SECRETARIAT OF THE COMMITTEE ON BUDGETARY CONTROL, EUROPEAN PARLIAMENT Subject: Quarterly report on financial corrections at 30" September 2011 Cohesion policy As requested by the Budget Authority during the 2006 discharge exercise, please find enclosed the report on the financial corrections made in 2011 for programmes under the Cohesion policy at ЗО* September Copy: Mrs A. Vitrey, Director Budgetary Affairs Commission européenne, B-1049 Bruxelles - Belgique. Téléphone: (32-2) Bureau: BRE2 9/383. Telephone: ligne directe (32-2) Télécopieur: (32-2)

2 ** TĪT \ * \ -й *** EUROPEAN COMMISSION Budget The Accounting Officer of the Commission FINANCIAL CORRECTIONS UNDER THE 2011 REPORT AT 30 th SEPTEMBER 2011 PROVISIONAL FIGURES

3 INDEX 1. INTRODUCTION 4 2. RECOVERY OF EXPENDITURE UNDER 4 3. ANALYSIS OF 2011 FINANCIAL CORRECTIONS 4

4 1. INTRODUCTION During the 2006 discharge exercise the Commission was asked to provide the Budget Authority with regular information on the financial corrections made to programmes under the Cohesion policy. This report covers the situation of 2011 financial corrections at the end of September RECOVERY OF EXPENDITURE UNDER Financial corrections are the main tool used for the correction of errors and irregularities in the context of shared management. Financial corrections are made by the European Commission so as to exclude from EU funding expenditure that is not in accordance with applicable rales and regulations. Financial corrections can result from controls and audits at any level of the control system in the Member States or from audits by the Commission or the European Court of Auditors or OLAF investigations. Member States are primarily responsible for making financial corrections in relation to irregularities committed by beneficiaries. Where the Member State agrees to make a correction as a result of its own or EU control and audit activity, so as to implement the financial correction, it may withdraw the amount of irregular expenditure in the following declaration of expenditure or deduct the irregular amount from a next payment claim as soon as it has recovered it from the concerned beneficiaries, and thus re-use the EU funding released for other expenditure under the programme concerned (but not related to the operation or operations that were the subject of the correction). The European Commission may take a formal decision to apply financial corrections to the Member State where the Member State has failed to make the required corrections or where there are serious failings in the management and control systems which could lead to systemic irregularities. A financial correction applied by Commission decision involves a net reduction of EU funding to the programme concerned. The corrections initiated by Member States and resulting from their own controls are not registered in the Commission's accounting system. 3. ANALYSIS OF 2011 FINANCIAL CORRECTIONS The financial corrections reported below result from audit work performed at EU level (i.e. by the Commission, the Court of Auditors and OLAF) for the programming periods , for which the closure process has started, , and for the closure of the programming period These corrections were either decided or accepted in the period from 1 st January 2011 to 30* September The following tables 1 do not include the results of the Member States' own checks of Structural fund expenditure. For the programming period, Member States are required to submit annual reports to the Commission on withdrawals, recoveries or pending recoveries of EU contributions included in payment requests sent to the Commission for the preceding year. Thus information on implementation of financial corrections based on EU work and accepted at Member State level is, for the current programming period, available only annually. The Commission will receive information for 2011 by 31 st March All figures are rounded two digits after the decimal. It should be noted that due to rounding of figures, somefiguresin the tables may not add up.

5 The financial corrections are shown per Structural fund, per programming period and per classification of financial correction. The tables below are a consolidation of submissions received from the responsible Directorates General on the basis of the information at their disposal. FINANCIAL CORRECTIONS CONFIRMED/DECIDED AT 30 TH SEPTEMBER 2011 ACCRUAL BASIS EUR millions 1 ĘRDF V.:CF *,.' :..;,;.ĘSF'7 : FIFG EAGGF Guidance TOTAL Financial Corrections period: 6,89 0,04 6,93 1,76 0,01 1,76 Not yet implemented 1,63 0,87 2,50 Sub-total period 10,28 0,91 0,01 11,20 Financial Corrections : 5,15 2,97 8,12-6,53 3,95 0,03-2,56 10,17 63,72 73,89 Not yet implemented 117,96-71,30 8,63 7,05 62,34 Sub-total period 126,75-0,66 8,63 7,07 141,78 Financial Corrections : Į Not yet implemented 0,25 9,21 9,46 Sub-total period 0,25 96,05 96,29 Total financial corrections confirmed/decided at end September ,28-0,66 105,59 7,08 249,28 * The negative amount of EUR 71,30 millions reported under is the result of a correction of a financial correction for EUR 82,93 millions previously reported under the Cohesion Fund but actually pertaining to the ERDF. The figures are presented on an accrual basis, which means that financial corrections decided or accepted during the reporting period from Γ 1 January 2011 to 30 th September 2011 are included, even if those corrections have not been implemented during that period. In the reporting period, out of a total of EUR 249,28 million of financial corrections decided/accepted, EUR 15,05 million were implemented by the issuance of a recovery order. The total amount is lower compared to the corresponding quarter of 2010 (EUR 721,27 million). This is firstly explained by the fact that most of the programmes for the programimng period are reaching the end of the closure process and very few amounts of financial corrections remain outstanding. Secondly, most financial corrections decided/accepted in 2011 relate to the programming period , which is currently at closure stage. Closure documents have been received by the Commission services and are now being processed. This exercise will give rise to amounts being reported as financial corrections at closure in future reporting. Thirdly, concerning the current programming period , financial corrections based on EU work accepted/decided are still limited, which is normal in the early years of implementation of programmes. It should also be noted that due to the "single audit" approach embedded in the regulatory framework (Commission reliance on programmes' audit authorities), 2010 and 2011 Commission audit activity focused mainly on re-performance of the work of audit authorities to ascertain their audit results, and less on samples of operations. The results of other, risk-based audits, including

6 on operations, will be reflected in future reports, once contradictory procedures are completed. In addition, the timely interruption of payment deadlines by the Commission since 2010, as an additional preventive tool available in the current programming period to protect the EU budget as soon as problems are detected, as well as more stringent control provisions imposed by the regulations, encourage Member States to take early corrective measures at their level, before any Commission intervention. This is demonstrated by the already substantial level of corrections reported by Member States in 2010 expenditure for programmes (EUR 258 million resulting from Member States' work, see note 6 to the 2010 accounts, paragraph 6.5) Due to the combination of these factors one can expect the reporting of less corrections by the Commission for the current programming period. As a follow-up to the 2009 discharge recommendations, the Commission is also carrying out an enquiry on Member States' corrective capacity, based on the annual reports on withdrawals, recoveries and pending recoveries it received by March Depending on the results of this enquiry, there is room to reflect in future reporting to the European Parliament such improved information received from the Member States. The Commission committed to report on this enquiry in the 2011 annual activity reports of DG Regional policy, DG Employment, social affairs and inclusion and DG Maritime affairs and fisheries. FINANCIAL CORRECTIONS IMPLEMENTED AT 30 TH SEPTEMBER 2011 CASH BASIS EUR millions ERDF ' ' : 'C?..' '..,'ESF / у-щ&., 'EAĢGF:.. Guidance TOTAL Financial Corrections period: 11,42 0,04 11,52 4,75 4,75 Sub-total period 16,17 0,04 16,27 Financial Corrections : 7,65 3,84 11,49 144,31 19,14 0,11 163,55 11,85 78,70 90,55 Sub-total 2Ü period 163,80 101,68 0,11 265,58 Financial Corrections Willi recovery order Sub-total period Total financial corrections implemented at end September ,97 101,68 86,88 0,11 368,70 The figures are presented on a cash basis, which means that financial corrections implemented during the reporting period from 1 st January 2011 to 30 th September 2011 are included, whether they were decided or accepted in that period, or in previous years. In the reporting period, out of a total of EUR 368,70 million of financial corrections implemented, EUR 23,01 million were implemented by the issuance of a recovery order. The total amount of corrections implemented during the reporting period is lower compared to the corresponding quarter of 2010 (EUR 941,19 million). The implementation in 2011 of financial corrections for the programming period is linked to corrections decided/accepted in Concerning the programming period , financial corrections still to be implemented relate to programmes at closure stage. Even when the Member States have provided the Commission with information on the deduction of corrections from final

7 payment claims, this will be registered in the Commission's accounts only with the authorisation of final payments to the Member States and will therefore be reflected in future reports. FINANCIAL CORRECTIONS CONFIRMED/DECIDED CUMULATIVE FIGURES AT 30 SEPTEMBER 2011 ACCRUAL BASIS EUR millions ERDF. Virø^l???'.': : Period Period Period: 1 Totalašat 30/09/ '{' pirn: : Total ás at.31/12/2010: Cohesion Fund ESF FIFG EAGGF Guidance Total financial corrections confirmed at end September CUMULATIVE FIGURES AT 30 TH SEPTEMBER 2011 SITUATION OF FINANCIAL CORRECTIONS CONFIRMED/DECIDED NOT YET IMPLEMENTED EUR millions.}:,, ' " : >','/.-ý-;;':щощ CF' ' :';-:E.SE.: ' ; FIFG EAGGF, Guidance TOTAL perná 15,78 7,54 2,69 26, period 2.155,26 160,89 36,81 8, , period 0,53 9,21 9,74 Total financial corrections not yet implemented at end September ,58 168,43 48,71 8, ,58 p.m. Total financial corrections not yet implemented as at end ,27 270,77 3 1, ,99 The figures presented report the cumulative financial corrections confirmed/decided at 30 September 2011 since the first report in 2008, as well as the cumulative financial corrections not yet implemented at 30 th September 2011, regardless of the year when the financial correction was decided or accepted. Out of Е1Ж 8,868 million of corrections reported cumulatively at 30 September 2011, EUR 6,351 million (72%) have been implemented. EUR 2,517 million remain to be implemented. This includes financial corrections deducted from final expenditure claims received by the Commission services at the closure of programmes but not yet validated by payments from the Commission (EUR 2 billion), due the on-going closure process. Thus adjustments to previously reported amounts of implemented corrections have been included in this table following the final closure of the 2010 accounting exercise, to deduct such pending final claims from the above total. Therefore the total amount of financial corrections decided/accepted but not yet implemented is expected to decrease as soon as the concerned programmes are closed.