3. PRESENTATION OF MAJOR ERROR RATES CAUSES AND CORRECTIVE ACTION REPORT
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1 EUROPEAN COMMISSION DIRECTORATE-GENERAL FOR AGRICULTURE AND RURAL DEVELOPMENT Directorate G. Horizontal aspects of rural development G.3. European Network and monitoring of rural development policy Brussels, 12/6/2013 ARES AGRI G.3 JDD (2013) MINUTES SEMINAR ON THE ROOT CAUSES FOR ERRORS IN THE IMPLEMENTATION OF RURAL DEVELOPMENT PROGRAMMES AND CORRECTIVE ACTIONS 29 APRIL 2013, ROOM CCAB 0A (Joint meeting, 72 nd Rural Development Committee & 95 th Agricultural Funds Committee) 1. INTRODUCTION In his opening speech, Mr. Jerzy Plewa, Director General, DG Agriculture and Rural Development explained the political context and the importance of the actions plan on the root causes for errors in the implementation of rural development plans, the actions undertaken to date and the next steps to take by Member States and Commission services. 2. THE CONCEPT OF ERROR RATE The Commission's presentation of the concept and calculation of the error rate showed the differences between the error rate based on MS' control statistics and the rate determined by the ECA, and the evolution of the error rate over time. The importance of the quality of the checks performed by the Managing Authorities and Paying Agencies in order to avoid increased error rates was underlined. 3. PRESENTATION OF MAJOR ERROR RATES CAUSES AND CORRECTIVE ACTION REPORT The presentation on the outputs of the consultation process between Commission services, managing authorities and paying agencies gave an overview on major root error causes detected and the related corrective and preventive actions. The most important root causes for errors related to area based measures are: The system of reductions in cases of non-compliance with agri-environmental commitments was not proportionate. Beneficiaries did not realise the changes caused by the update of the LPIS system or other legal changes. Lack of exchange of information between authorities involved in the implementation. Pre-conditions to enter the agri-environmental scheme have been established as eligibility conditions in the programme. Commitments are not linked to the environmental objective of the measure. Commitments are difficult to implement and verify. Beneficiaries provide incorrect area declarations. Commission européenne/europese Commissie, 1049 Bruxelles/Brussel, BELGIQUE/BELGIË - Tel Office: L-130 6/196 - Tel. direct line AGRI-RDC@ec.europa.eu
2 Beneficiaries do not respect commitments For investment measures the following root causes are the most relevant: Deficiencies in the procedures to process beneficiaries' payment request. Weakness in the check of the reasonableness of costs/eligibility. Application of public procurement rules and tender procedures. Incorrect system of checks and deficient administrative procedures. Tendering procedures from private beneficiaries. Non-eligible expenditure. Handling of the payment claims by beneficiaries. 4. PRESENTATION BY THREE MEMBER STATES OF THEIR EXPERIENCE IN ADDRESSING THE ERROR RATE IN RURAL DEVELOPMENT Germany, Spain and Romania gave presentations about their administrative and coordination structures, especially in the regionalised Member States (DE, ES), and major root causes and innovative approaches to correct them. The presentations confirmed the findings presented in the DG AGRI presentation and underlined the importance of a coordinated approach to address errors in the implementation of rural development policy. The representatives also highlighted the importance of addressing the issues in the programming process. In this context, Article 69 of the draft proposal will contribute to the quality of the measures in RDPs. 5. WORKING GROUPS Four working groups discussed the following questions: 1) Do MS agree on the root causes for errors identified in the exercise? Are there any additional relevant root causes which should be added? 2) Are the corrective and preventive actions presented efficient to address the errors? Are there additional actions which should be mentioned? 3) Are there any remarks on the process of identification of root causes and corrective and preventive actions? What difficulties did MS encounter? Are there any best practices to share? The working groups presented the following conclusions: Area related errors, role of the administration: 1) Participants shared the relevance of the major root causes of errors presented by Commission services and the respective preventive and corrective actions. 2) Some actions were in particular mentioned by the group: Training and communication actions. IT tools. The possible added value of an ex-ante assessment from DG AGRI audit services. Sharing of findings from DG AGRI audit services with all Member States authorities. 3) The process related to the identification of root causes was organised in a way to comply with the new Article 69. 2
3 Area related errors 1) The groups highlighted the following root causes: Errors in filling in area declarations. Non-respect of agri-environmental commitments, in particular linked to: o Live-stock density (minimum or maximum limits) o Time-limits for certain agricultural practices (e.g. mowing) o Reporting obligations for farmer o Reductions of inputs (fertilizers, pesticides, etc.) 2) The following corrective actions were identified by the groups: Information to beneficiary, through: o SMS/ s o Local information actions e.g. road shows o IT/electronic applications o Mapping with IT tools Actions to increase the awareness of beneficiaries of the content of contracts at the moment of the signature. Compulsory training for certain targeted measures. 3) The process focused on the set up of different task force groups or coordination bodies. Non-area related errors, role of the administration 1) There was no disagreement with the DG AGRI presentation. Some comments were made about the disproportionate application of reductions, even for small non-respect issues (e.g formal aspects on public procurement or communication e.g. EU logo indication). 2) Some of the corrective and preventive actions underlined were: Guidance document on non-eligible costs. Inclusion of private procurement in MA's official websites. Guidance on the assessment of reasonable costs in the context of innovative projects. 3) Regarding the process, the participants found this exercise of exchanging information between Commission services, paying agencies and managing authorities very useful. They also pointed out the different conclusions as regards the eligibility of operations, depending on the auditing body (ECA, AGRI audit services or certifying bodies). Finally, the ECA method for determining the error rate and the 2% material error rate was discussed by participants. Non-Area related errors, role of the beneficiary 1) Some participants reported that the implementation of the Leader scheme is an important source of error. 2) With regard to corrective and preventive actions, participants highlighted the following points: The application of proportional reductions for investment measures. The need for clear rules for implementation, and for clear instructions to beneficiaries. 3) The importance of an appropriate coordination between Managing Authorities and Paying Agencies was stressed. 3
4 6. COURT OF AUDITORS' PRESENTATION ON THE DAS Mr. Robert Markus, ECA Head of Unit for Rural Development presented the ECA approach in calculating error rates, but also advanced interesting findings from the last 2 DAS reports: Error rate is widespread geographically and throughout measures. There is no indication for a positive development. Investment measures are more prone to errors (around 58%). Main cause of errors is non-compliance with eligibility conditions. He stressed that most of the information found in the ECA's audits is easily available for Managing Authorities (non-area related) and many errors could be avoided by the MS authorities. The importance of rigorous checks by Member States was highlighted. 7. DG REGIO PRESENTATION ON ITS ERROR RATE ACTION PLAN Mr. Fringiscos Nikollian, Deputy Head of Unit C1, Audit Directorate, DG REGIO, organized the presentation around two axes: the situation that DG REGIO encountered in 2006 regarding high error rate levels; and the process put in practice and results achieved. 8. CONCLUSIONS The main conclusions of the Seminar were outlined, mainly: Increased transparency on eligibility conditions must be assured in RDPs. Simplified costs approach should be used wherever appropriate. Commission services will increase efforts on the production of guidance documents for the measures, especially the investment-related and agri-environmental measures. Commission services intend to reinforce the assessment of programmes by Paying Agencies together and Managing Authorities on verifiability and impact on errors in Article 69. The importance of this cooperation exercise for the coming programming period was underlined. A next stocktaking meeting of the progress would be envisaged for Autumn Signed José Manuel SOUSA UVA Director 4
5 Participants Seminar on the root causes for errors in the implementation RDPs and corrective actions, (Joint meeting, 72nd Rural Development Committee & 95th Agricultural Funds Committee) 29 April 2013 MS Ministry//Permanent Representation/ Organisation Participants BE Ministerie van Landbouw/Ministère de l Agriculture Ministerie van Landbouw/Ministère de l Agriculture Coordinating body Ministerie van Landbouw/Ministère de l Agriculture Ministerie van Landbouw/Ministère de l Agriculture BG / / CZ DK DE EE EL ES FR IE IT CY LV LT LU HU MT NL Bundesministerium für Verbraucherschutz und Landwirtschaft BLE Hessen Bundesrat (Brussels office) BAY STMELF / Munich ARIB/PA ARIB/PA Ministère de l Agriculture, Direction de la Programmation et des Structures Agricoles..".." FEGA FEGA OFICINA EXTREMADURA Ministère de l Agriculture, de l alimentation, de la pêche et des affaires rurales ASP Ministère de l Agriculture, de l alimentation, de la pêche et des affaires rurales Department of Agriculture Department of Agriculture Ministero delle Politiche Agricole, Alimentari e Forestali Ministero dell'economia AGEA Permanent Representation Rural support service Rural support service Ministère de l Agriculture, de la Viticulture et du Développement rural Ministry of Rural Development Ministry of Rural Development MRRA 5
6 AT PL PT A SI SK FI SE UK CROATIA Active observer Coordinating body Coordinating body PAPDF and Environnment Agency for Rural Affairs."."." Board of Agriculture " " Department for Environment, Food and Rural Affairs Rural Payment & Inspection Division DARD UK Coordinating body 6
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