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Management verifications
Michael Ryan ([email protected]) Axel Badrichani ([email protected])
European UnionCohesion Policy
“Train the trainers”European Commission seminar for managing and
certifying authorities 9 June 2009
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Commission guidance note
– Issued in June 2008
– To assist managing authorities (MA) and intermediate bodies (IB)
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Background
One of the 7 Key Requirements related to the MA – see EC guidance on systems evaluation issued in June 2008
This key requirement was further developed into 28 questions in the “self assessment tool” sent to the MAs.
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Legal basis - Council regulation
Article 60 of Regulation (EC) N°1083/2006 details the functions of the managing authority
Art. 60 (b) part 1: “The managing authority (MA) shall be responsible (…) for verifying that the co-financed products and services are delivered and that the expenditure declared by the beneficiaries for operations has actually been incurred and complies with Community and national rules (…).”
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Legal basis-Implementing rules
• Article 13 (2) of Regulation (EC) N° 1828/2006:
Sets out scope:• The verifications (…) shall cover
administrative, financial, technical and physical aspects of operations, as appropriate.
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Legal basis-Implementing rules
Article 13 (2) of Regulation (EC)N°1828/2006: • Verifications shall ensure that the
expenditure declared is real, that the products or services have been delivered in accordance with the approval decision, that the applications for reimbursement by the beneficiary are correct and that the operations and expenditure comply with Community and national rules. They shall include procedures to avoid double-financing of expenditure with other Community or national schemes and with other programming periods.
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Legal basis-Implementing rules
• Article 13 (2) of Regulation (EC) N°1828/2006:
• Verifications shall include the following procedures:
(a) administrative verifications in respect of each application for reimbursement by beneficiaries(b) on-the-spot verifications of individual operations
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Legal basis-Implementing rules
Article 13(3) of Regulation (EC)N°1828/2006:• Where on-the-spot verifications (…) are
carried out on a sample basis (…) the managing authority shall keep records describing and justifying the sampling method and identifying the operations or transactions selected for verification.
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Menu
Legal basis What are management verifications ? Types of verifications (Admin / on the
spot) How much should be done ? Intensity Efficient and effective verifications
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What are management verifications ?
Day to day management checks to ensure the legality and regularity of the expenditure
Verification of the administrative, financial, technical and physical aspects of operations
Verification of compliance with Community and national rules
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Compliance with Community and national rules
Section 3 of guidance note• Public Procurement• Environment• State aid schemes• State aid• Financial engineering instruments• Revenue generating projects• Durability of operations• Equality and non-discrimination
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Types of verifications
Administrative verifications
On the spot verifications
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Administrative verifications
Desk-based documentary verifications of ALL of payment claims (interim & final)
Examination of supporting documentation • (list of) payments / invoices – audit
trail• lists of participants and timesheets
(ESF) Examination of progress reports WHEN ? - Before declaring expenditure
to level above and before certification of expenditure to Commission by CA
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Administrative verifications
• Aim to verify (inter alia):– Correctness of claim– Expenditure declared is within eligible
period– Expenditure complies with grant decision– Existence of adequate audit trail– Compliance with eligibility rules, publicity
requirements, public procurement
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On the spot verificationsAim to verify (inter alia):
– Reality of operations (incl. costs)– Delivery of products or services in
accordance with terms of reference – Physical progress as reported– Technical and physical aspects of
operation– Administrative capacity of beneficiary– Compliance with publicity requirements– Existence of adequate audit trail
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On the spot verifications - Intensity
Intensity depends on– Nature of operation (tangible/ intangible)– Sampling - risk oriented, complemented
by random sample– Amount and type of documentation
available for desk based checks– Computerised management information
system
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Documenting verifications
Use Checklists Record sampling methodology Checks carried out and documentation
reviewed (Short) written report of on the spot
verification
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Efficient & effective verifications
Efficient only if grant decision / contract absolutely clear : clear definition of operation, expected outputs, financing plan, eligibility rules, administrative (reporting) obligations of beneficiary…
Training for verification staff on : risk factors, methodology, legal and accounting principles, eligibility rules…
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KEY POINTS FOR MANAGING AUTHORITIES
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KEY POINTS
Day to day checks to ensure the eligibility of expenditure and compliance with Community and national rules
Balance between administrative and on the spot checks
Need to understand and assess the specific programme risks
Develop a strategy for managing risks. This is the reference point for intensity of verifications
Develop a preventive approach by providing information and advice to beneficiaries and training for those carrying out verifications
Document verifications
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KEY POINTS
MAs are recommended to carry out a self assessment (see “self assessment tool”)
Will allow the MA to detect the areas which need to be strengthened and to take the appropriate remedial actions
Presentation 2008 webstream http://ec.europa.eu/regional_policy/conferences/manauth/programme_en.htm (Session 1 - 44 min. on)
