Closure of the Structural Funds programme programming period

Transcription

1 Closure of the Structural Funds programme programming period Court s experience Turning ideas into reality! 20 th September 2012

2 The closure process Legal definition The closure of an operational programme is the financial settlement of any outstanding EU budgetary commitments towards the programme, through payment of the final balance due to the Member State, by cancellation of the remaining budgetary commitments relating to any unused balance (decommitment), or by recovery of any amount unduly paid. 3 documents to be submitted to the Commission for each OP: o The final implementation report provided by the Managing Authority (MA); o a declaration by the winding-up body (WUB), summarising the conclusions of checks carried out during the programming period, and assessing the validity of the application for final payment and the regularity of the transactions covered by the certified statement of expenditure; o a certified statement of expenditure, drawn up by the paying authority (PA), together with an application for final payment 2

3 The closure process Flow of the process in time Member State Commission Final Implementation Report Declaration on winding-up of the assistance Certified statement of final expenditure Assessment of the closure documents Closure letter sent to the MS (no legal deadline) Opinion on the final implementation report Payment of the final balance (if the balance is positive) (N+ 2) 01/ / / months +5 months +2 months +9 months Legal provisions Programming Period final date of eligibility* deadline for submission of closure documents deadline for review and opinion on the final implementation report** time for the MS to agree/disagree with the closure letter time for the MS to apply for correction of the final balance payment *the final date of eligibility of expenditure (originally ) has been extended by the Commission for some MS in accordance with Art. 14 and 15 of Regulation (EC) No 1260/1999 **interruptions for request of additional documentation possible 3

4 Concentration of workload The closure process 4

5 The closure audit approach Why o By ending the multi-annuality the final status of the OP s execution (reaching objectives) and assurance (regular and legal) can be defined o At this moment previous observations from the ECA and the replies of the COM can be concluded When: early in the process and not at definite closure o Checking whether lessons learnt are implemented o The closure process is too long to wait until all Ops are closed o An early conclusion can also provide an opinion and still allows the process to be corrected 5

6 The closure audit approach What the focus 1. Preparation of the COM internally and towards MS and the management of the progress of the closure process 2. The effectiveness of the substituted expenditure 3. Legal compliance: e.g. compliance of the 2nd level checks, regularity and eligibility of the expenditure, timely submission of closure documents, etc. by focus on the WuD How the approach o o o Review of COM s closure guidelines, manuals & procedures & checklists, monitoring and reporting (point1&2) Examination of the assessment of the closure documents of 31 Ops Audit of WUBs in Italy and UK (point 3 &2) o Co-ordinated audited with Italian SAI (point 2 and 3) 6

7 The closure audit lessons learnt Still weaknesses in 2 nd level checks, e.g.: o Compliance to public procurement rules o Even spread over the period and measures o Checks performed on the spot o Omission of reporting quantifiable errors Results of 2 nd level checks not available by submission deadline Insufficient resources to perform or supervise outsourced checks 7

8 The closure audit lessons learnt Good example: UK closure methodology o A common closure methodology was drawn up on time. o The winding-up teams had sufficient, properly trained staff. o The winding-up body went beyond reporting of second level sample checks. In order to address the closure requirements it performed further work: analysis of system audits performed during the period, review of a sample of first and second level checks, cut-off test ensuring eligibility at period end, analysis of payments, analysis of irregularities and their follow-up and reporting, analysis of errors classified as systemic and their follow-up in the system, correctness of the debtors ledger and recoveries. 8

9 The closure audit lessons learnt Late notification of changes to the final payment request by the PA Variable impact of financial corrections on management and control systems 9

10 The closure audit lessons learnt Unjustified reduction of the final error rates o 23 of the 31 WuDs examined, reported an error rate below 2% o 12 of these 23 the error rate of the 2 nd level checks was above 2% Atypical errors (anomalies): main justification given for decreasing the error from 2nd level checks o Applied in 8 cases of which 7 unjustified o The size of these atypical(s) decreases the error rate significantly and brings it mostly below 2% Other methods: o The calculation methodology applied for determining the error rate o Only considering the low and medium risk projects o Not quantifying errors detected 10

11 The closure audit lessons learnt The impact of deduction of atypical errors: Note: In two further cases, the impact of the decrease could not be quantified from the information in the closure documents. OP Total certified amount (euro) 11 Error rate before withdrawing atypical Error rate reported A ,78 2,83% 0,84% A ,25 2,88% 0,74% A ,52 10,55% 6,37% A ,95 2,83% 1,14% A ,65 2,87% 0,23% A ,98% 1,22% A ,86 2,4% 2,28% A ,74% 1,26% A ,12 6,72% 1,19%

12 The closure audit lessons learnt Audit opinions not in line with the programme error rate The majority of the programmes received an unqualified opinion while on the basis of 2nd level checks the error rate was above 2% e.g. DG EMPL 81/194 reported >2% Projects receiving retrospective EU co-financing demonstrate higher errors in compliance, but it can also distort the initial programming of measures. (see presentation mrs. Polito of the Corte dei Conti Italiana) 12

13 The closure audit lessons learnt The analysis performed by the Commission o The Commission was better prepared o In general, the Commission analyses all information provided in the WuD, its report and the annexes and requests further information when not clear o Is being impeded by the unreliability of the WuDs making the analysis a time consuming exercise for both COM and MS o Should have been more critical esp. in the arguments brought forward to justify atypicals o Will result in net financial corrections. 13

14 CONCLUSION The closure of a programme can only report on the past. It can not remedy in last instance the previous 8 year of spending. A well controlled programme execution is the best preparation for a fluent programme closure. 14