Control and audit. One of the main concerns of the EU COMM. Single audit system recommended by European Court of Auditors:

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1 Control and audit One of the main concerns of the EU COMM. Single audit system recommended by European Court of Auditors: Integrated audit approach whereby the work of auditors at one level may be used by auditors at a higher level Assurance on the methodology and quality of the audit work performed Co-ordination and co-operation between the respective audit services

2 Programming period Regulations issued at an early stage (before 2007) Clearer rules and simplification (*) Guidelines are being prepared for the main tasks of the Authorities of Operational programmes Some problems with general systems will be fixed before starting the execution: Compliance assessment should identify problems earlier For example: Assignement of Functions Independence Control systems

3 Authorities in Regulations for Three pillars for each operational programme: - Managing Authority. Responsible for the managing of the OP. - Certifying Authority. Certifies statements of expenditure and applications for payment before they are sent to COMM. - Audit Authority (not something external or added to system, but one of its main elements)

4 Controls at the different levels Managing Authority (First level control) Verifications on legality and regularity of operations: Administrative, financial, technical and physical aspects of operations, to ensure that: expenditure declared is real the products or services have been delivered correct applications for reimbursement by beneficiary compliance with Community and national rules procedures to avoid double-financing (EU and national schemes, other programming periods).

5 Controls at the different levels Audit authority (AA): responsible for verifying the effective functioning of the management and control system, which has to base its opinions on its own work and on controls done by other bodies. - Audits to verify effective functioning of management and control system of all OPs, to assess the risk level - Audits on operations on the basis of an appropriate sample to verify certain conditions on expenditure declared. No minimum % required

6 Audit Authorities in Spain Audit authority at central level in Spain (IGAE, depending on the Ministry of Economy and Finances) will share this role with control bodies of the regions (Autonomous Communities), for all structural funds ERDF, ESF, Cohesion Fund (one OP; environment and transport infrastructures). Fisheries will not be a structural fund anymore, but it will work in the same way.

7 Compliance assessment One of the first tasks of the AA: Compliance assessment, giving an opinion on the basic principles of the system. No intermediate payments until Compliance assessment is approved. Deadline: 12 months from approval of OPs or first claim for reimbursement sent to COMM (previous filter by COMM with the approval of the Ops).

8 Other tasks of the Audit Authority Audit strategy Annual control report Opinion as to whether the management and control system functions effectively; reasonable assurance of correct statements of expenditure and legal and regular underlying transactions Declaration for closure (partial/final) Cooperation between AA-COMM to coordinate annual plans and methods and to share results.

9 Some questions to be taken into account Community legislation or interpretation of the national legislation by COMM can be more restrictive than national rules. There are many requirements for a correct use of the funds. Irregularities lead to corrections. Principle of proportionality to be considered. Corrrections by Member state allow re-use of funds (but they have an effect on the error rate); corrections by COMM mean net reduction of funds.

10 Questions to be checked /usual deficiencies Independence. Segregation of duties Control and supervision. Compliance of community policies (environment, equality, state aids) Audit trail and Formalisation (checklists, manuals ) Publicity Elegibility rules (at national level for ) Public procurement

11 Measures for a better result - Careful definition of systems from the very first moment - Training and information to beneficiaries - Report on deficiencies asap (re-use of funds) - Coordination between all relevant bodies - Respect of EU rules which can be more restrictive; in case of doubt, no certification