European Commission DG Agriculture (Unit I.4)

European Commission DG Agriculture (Unit I.4) 1

FINANCIAL MANAGEMENT OF THE COMMON

AGRICULTURAL POLICYe-Farmer Conference

Budapest

31 January-1 February 2007


Agenda

Principles of EAGF Financial Management

Budget and detailed budget nomenclature

Information to be transmitted to the Commission

Electronic transmission of data Figures


Principles of EAGF financial management

4

Financing the CAP

via:• European Agricultural Guarantee Fund (EAGF) - Formerly EAGGF Guarantee;• European Agricultural Fund for Rural Development (EAFRD) - Formerly EAGGF Guidance • form part of the general budget of the European Communities

European Commission DG Agriculture (Unit I.4)


Council Regulation (EC) No 1290/2005 on the financing of the CAP;

Commission Regulation (EC) No 883/2006 laying down detailed rules as regards the keeping of accounts by the paying agencies, declarations of expenditure and revenue and the conditions for reimbursing expenditure under EAGF and the EAFRD;

Commission Regulation (EC) No 884/2006 laying down detailed rules as regards the financing of EAGF intervention and accounting of public storage operations by the paying agencies of the Member States;

Commission Regulation (EC) No 885/2006 laying down detailed rules as regards the accreditation of paying agencies and other bodies and the clearance of accounts of the EAGF and the EAFRD.

Key regulations


Participation of the European Agricultural Guidance and Guarantee Fund in the Budget of the European Community

(Financial report 2005)

2005

46%

3%26%

25%EAGGF Guarantee

EAGGF Guidance

other Structural Fund

others


The presentation focuses on EAGF;

Represents the highest part of the budget of the European Community;

Includes direct payments to farmers;

Managed by DG AGRI Unit I/4.

EAGF


WHAT is financed by the EAGF?

Art. 3 (1) Reg. 1290/2005Shared management (MS pays the beneficiary, the Commission reimburses the MS)

Refunds on exports to third countries; Intervention (storage and other measures) to stabilise

the agricultural market; Direct payments to farmers; Sugar Restructuring Fund (restructuring aid, aid for

diversification, additional aid for diversification and transitional aid for the sugar industry);

Promotion of agricultural products.


WHAT is financed by the EAGF?

Art. 3 (2) Reg. 1290/2005

Direct management by the Commission/centralised management (the Commission pays the beneficiary directly):

Certain veterinary measures and plant health measures; Establishment of an agricultural accounting and survey system; Fisheries markets.

Art. 1 (2) Reg.1258/1999 (old system)


EAGGF-Guarantee expenditure by measure type

2005

6% 2%14%

69%

9% export refunds

storage

rural developmentdirect aid

others

(Economic nature of expenditure, based on decimal nomenclature)


WHO is responsible for EAGF expenditure administration?

The Commission is responsible for the administration in co-operation with the Member States (=shared management),Art. 3 (1) Reg.1290/2005;

Consultation of the Member States in the monthly meetings of the “Committee on the Agricultural Funds” (written procedure in August), Art. 41 (1) Reg.1290/2005.


What does shared management mean?

Responsibilities of the Commission:

Monthly payments (for payments effected minus revenue received by the paying agencies) to the Member States;

Ensures budgetary discipline (respect of budget appropriations, payment deadlines, financial ceilings);

Checks management and control systems in the Member States (e.g. missions in the Member States, clearance of accounts procedure).



Responsibilities of the Member State (ministerial level):

Accredits or withdraws the accreditation of the paying agencies and the coordinating body (Art. 6 (2-4) Reg.1290/2005);

Defines the number of paying agencies (Art. 6 (2) Reg.1290/2005);

Informs the Commission of its decisions (Art. 8 Reg.1290/2005).



Paying agencies:

Make payments to beneficiaries (ensures eligibility, controls, etc.);

Provide guarantee for proper accounting, archives, control systems, etc.;

Present the requisite documents within the time limits to the coordinating body or to the Commission (Art. 6 (1) Reg.1290/2005)

Adopt all necessary measures to prevent and pursue irregularities, recover sums lost and ensure certification of accounts (Art. 9 Reg. 1290/2005).



coordinating body (if more than one paying agency)

Acts as intermediary between the paying agencies and the Commission;

Disseminates Community texts and guidelines to paying agencies;

Makes available to the Commission all necessary accounting information;

Promotes harmonised application of Community law; Communicates all necessary information collected from

the paying agencies to the Commission.

Art. 6 (3) Reg. 1290/2005, Art. 4 (1) Reg. 885/2005 Sends to the Commission the annual accounts (Art. 8 (1) c

(iii) Reg.1290/2005, Art. 6, 7 (1-2) Reg. 885/2006)

CERTIFICATION OF ACCOUNTS BY ANINDEPENDENT BODY

Designated by the Member State; Private or public institution, operationally

independent of the paying agency (Art. 5 (1) Reg.885/2006);

Audits the paying agencies’ procedures; Controls the financial reports; Certifies the accounts.

Art. 7 Reg. 1290/2005, Art. 5 Reg.885/2006:


Certification Body


Example

Member State

Coordinating Body

Paying Agency 1 Paying Agency 2 Paying Agency 3

Beneficiaries(farmers, producers, traders, exporters, etc)



Certification body 1 Certification body 2


Particularities

The “EAGF–year” = “budget exercise” (e.g. for 2007) covers the Member States expenditure from 16 October 2006 to 15 October 2007(Art. 5 Reg.883/2006);

The month November covers 46 days (16.10 – 30.11), (Art. 15 (4) Reg.1290/2005);

The month October covers only 15 days (1.10 – 15.10),(Art. 15 (4) Reg.1290/2005);

Monthly payments are made to the Member State on the 3rd working day of the second month following that in which the expenditure was effected (i.e. the month after declaration),(Art. 15 (3) Reg.1290/2005);

At the end of the calendar year (in December), an additional (13th) payment is made (to cover outstanding rounding and possible corrections).


Financial Flow

M= calendar month

M Paying agency pays beneficiary with funds mobilised by the Member State, Art.14 (2) Council Regulation (EC) No 1290/2005;

M+1 Member State sends declaration of expenditure and revenue to the Commission;

M+2 (3rd working day) Commission reimburses Member State based on the payment declaration of the Member State. MS shall open a (bank) account to receive the monthly payments (Art. 11 (1) Reg.883/2006), name and number of this account shall be notified to the Commission;EU budget resources that are not spent within the financial year are “lost” and can not be used in the following year.


Reduction of payments by the Commission

Art. 17 Reg.1290/2005

Reduction due to:late payments to the beneficiary by the MSOverrun of financial ceilings

MS has the opportunity to submit its comments before reduction.


Contact units in the Commission

Directorate-General for Agriculture and Rural Development (DG AGRI)

AGRI I.1 Budget management

AGRI I.4 Financial management of EAGF

AGRI F.2 Financial management of EAFRD

AGRI J Audit of agriculture expenditure(Clearance of accounts, X-tables,

debtors’ ledger)


Budget and detailed budget nomenclature


Topics

Financial framework;Activity Based Budgeting;Budget nomenclature;Detailed budget nomenclature.


Financial perspectives

Parliament, Council and Commission agree in advance on the main budgetary priorities for the following periodand establish a framework for Community expenditure in the shape of a financial perspective.The Financial perspectives show the maximum amount and the composition of foreseeable Community expenditure for a given periodThe amounts entered are expenditure ceilingsAre laid down in Interinstitutional Agreements.


Financial Framework 2007-2013

For 2007-2013: Interinstitutional Agreement between the European Parliament, Council, Commission on budgetary discipline and sound financial management (2006/C 139/01))


Activity Based Budgeting (ABB)

The budget is the instrument which, for each year, forecasts and authorises all revenue and expenditure considered necessaryThe budget shall be established on the basis of Activity Based Budgeting (ABB)Financial resources are allocated to policy areas and activitiesThe ABB nomenclature is a common budget structure for planning, budgeting and management of expenditure


Budget Nomenclature

Budget is adopted by the Budgetary Authority (Council and Parliament) at the level of:

Title Chapter Article Item

The text in the Budget refers to the legal base of expenditure for every budget line.

All payments must have a legal base!


Structure of Budget Nomenclature (expenditure)

Title = policy area 05 – Agriculture and rural development

Chapter 05 03 – Direct aids

Article 05 03 01 – Decoupled direct aids

Item 05 03 01 02 – SAPS (Single Area Payment Scheme)

Sub-item 05 03 01 02 0000 003 – Single Area Payment Scheme – new Member States – R.1782/03, Art.143b) – calendar year 2006 – CY, CZ, EE, HU, LU, LT, PL, SK

There is a need for planning, management, control and follow-up of measures by:


Why a detailed nomenclature?

Marketing year;

Product;

Deadline for the payments;

Financial ceiling of the expenditure.


Legal base

Item 05 03 01 02 — SAPS (Single Area Payment Scheme)

Appropriations 2006 Appropriations 2005 Outturn 2004 1 740 000 000 1 394 000 000 RemarksFormer Item 05 02 12 02 This appropriation is intended to cover expenditure under the single area payment scheme for the new Member States, in accordance with the Act of Accession and in accordance with Title IVA of Council Regulation (EC) No 1782/2003.

Legal basisCouncil Regulation (EC) No 1782/2003 of 29 September 2003 establishing common rules for direct support schemes under the common agricultural policy and establishing certain support schemes for farmers and amending Regulations (EEC) No 2019/93, (EC) No 1452/2001, (EC) No 1453/2001, (EC) No 1454/2001, (EC) No 1868/94, (EC) No 1251/1999, (EC) No 1254/1999, (EC) No 1673/2000, (EEC) No 2358/71 and (EC) No 2529/2001 (OJ L 270, 21.10.2003, p. 1), as last amended by Regulation (EC) No 2217/2004 (OJ L 375, 23.12.2004, p. 1).


Legal base

Item 05 03 01 02 — SAPS (Single Area Payment Scheme)

Legal basis cont.Act concerning the conditions of accession of the Czech Republic, the Republic of Estonia, the Republic of Cyprus, the Republic of Latvia, the Republic of Lithuania, the Republic of Hungary, the Republic of Malta, the Republic of Poland, the Republic of Slovenia and the Slovak Republic and the adjustments to the treaties on which the European Union is founded (OJ L 236, 23.9.2003, p. 33), and in particular Annex II thereto ‘List referred to in Article 20 of the Act of Accession‚ 6A as amended by Decision 2004/281/EC (OJ L 93, 30.3.2004, p. 1).

Reference actsCommission Regulation (EC) No 118/2005 of 26 January 2005 modifying Annex VIII to Council Regulation (EC) No 1782/2003 and establishing budgetary ceilings for partial or optional implementation of the Single Payment Scheme and annual financial envelopes for Single Area Payment Scheme provided for in that Regulation (OJ L 24, 27.1.2005, p. 15).


The detailed budget nomenclature

Is a more detailed specification of articles and items defined in the “General Budget” (there are around 150 items and 2500 sub-items);

Is the compulsory level of declaration of EAGF expenditure in the monthly detailed declaration table (T 104) that has to be sent from the Member States to the Commission (Reg.883/06, Art.4 2(a)).


The detailed budget nomenclature

To identify the budget sub-item under the expenditure has to be declared:

examine legal base for the support measureexamine the budget (legal basis, remarks)study the detailed nomenclatureif necessary, contact the Commission.


Information to be transmitted to the Commission


Transmission of data by the Member States

Throughout the exercise: declaration of expenditure =

payment request forecasts of expenditureFollowing the exercise: annual accounts of the

accredited paying agencies

Art. 8 (1) c) Reg.1290/2005


Transmission of data by the Member States

Art. 4 (1) Reg.883/2006

The global expenditure declaration;

Declaration of expenditure (Fax of the 10th):

Transmitted by the 10th day of each month;

Set of documents (T104 +…):Transmitted by the 20th day of each month.


Calculation of the monthly payments

Monthly payments concerning the payments made by Member states in the month ‘n’ (January)

Month ‘n’ (January ) Month ‘n +1’ ( February ) Month ‘n+2’ ( March )

10th 20th 3rd working day 10th of the

month declaration : expenditure ‘n’

Monthly detailed declaration of expenditure ‘n’

Monthly paymentup to the 3 rd wor king

day

EAGF Committee: consultation of Member States

Decision of the Commission concerning the amounts of the

monthly payment to transfer


Global Expenditure Declaration

Art. 8 (1) (c) (i) Reg.1290/2005, Art. 4 (1) (a) Reg.883/2006

WHEN (By the third working day of each week: keep available information = situation until the end of the previous week),Transmission: by the third working day of each month;

WHAT Total expenditure effected and assigned revenue received during the preceding month (n);+Any information explaining any substantial difference between the forecasts given for this month and the expenditure effected and assigned revenue received.

FORM Annex I of Commission Regulation (EC) No 883/2006


Declaration of expenditure (Declaration (Fax) of the 10th)

Art. 15 (2) Reg.1290/2005, Art. 4 (1) (b) Reg.883/2006

WHEN By the 10th of the month “n+1”

(for the period from 1st to 15th of October by October 25th);

WHAT The total amount of expenditure incurred and assigned revenue received during the preceding month “n” and relating to public storage during the month “n-1” according to Reg.884/2006;

BY Articles or items;

FORM Annex II of Commission Regulation (EC) No 883/2006.

Art.8 (1) Reg.883/2006

On the basis of the Fax of the 10th declaration the Commission shall adopt decisions and make monthly payments (without prejudice to corrections and reductions);

Monthly payments cover the expenditure less the corresponding amount of assigned revenue;

Paid on the 3rd working day of the month following the declaration.


Payment decision by Commission


Set of documents (T104 + …)

Art. 4 (1) (c) Reg.883/2006

WHEN By the 20th of the month “n+1”(for the period from the 1 to 15 October by 10 November);

WHAT A set of documents permitting the booking to the Community Budget of expenditure effected and assigned revenue received by the paying agency during the preceding month.


Set of documents (T104 +…)

Art. 4 (2) Reg.883/2006

Table 104 : monthly detailed declaration for each paying agency;

Table 103 : a summary of table 104 for all paying agency in a MS;

Table 101 : difference between the monthly expenditure declaration (= Fax of the 10th) and table 104;

e-FAUDIT tables : accounts relating to public storage operations.


Monthly detailed declaration (Table 104)

Art. 4 (2) (a) Reg.883/2006

This is a detailed declaration for a month “n” based on the ABB nomenclature of the EAGF at the level of sub-item.

Expenditure effected and assigned revenue received in month “n”;

Total expenditure effected and assigned revenue received from the beginning of the EAGF-year until the end of the month “n” = cumulative amounts

Estimates of expenditure and assigned revenue (forecasts)

FORM: Statement in form of a message in IDES, Annex V of Reg.883/2006.


Table 103

Art. 4 (2) (b) Reg.883/2006:

Summary of the data in Table 104 for all paying agencies (by Member State):

expenditure / assigned revenue /net amount

Electronically and on paper (signed) Art. 4 (3) Reg.883/2006;

Form: Annex IV of Reg.883/2006.

Art. 4 (2) (c) Reg.883/2006

Table 101 is a statement of any difference (with the reasons for such differences) between:

The total expenditure effected and assigned revenue received communicated by the Fax of the 10thand Table 104.

Differences will be included in the next monthly payment.

Form: Annex III of Reg.883/2006.


Table 101

Art. 4 (2) (d) Reg.883/2006

A declaration of tables (15 in total) drawn up each month in the form shown in Annex III of Reg.884/2006, that relate to the possible public storage operations for the following products:

Bread making wheat, barley, maize and sorghum; Paddy rice; White sugar and raw sugar; Butter and skimmed milk powder; Alcohol.


e-FAUDIT tables


Example – Global amount, Fax of the 10th and T 104deadlines for transmission

01/01/2007 – 31/01/2007Global amount → 05/02/2007Fax of the 10th → 12/02/2007Table 104 → 20/02/2007

01/02/2007 – 28/02/2007Global amount → 05/03/2007Fax of the 10th → 12/03/2007Table 104 → 20/03/2007

…… last period: 01/10/2007 – 15/10/2007

Global amount → 18/10/2007Fax of the 10th → 25/10/2007

Table 104 → 05/11/2007


Electronic transmission of data


• Access to DG AGRI Web systems• Transmission of electronic declarations• CAP-ED assistance tool• CIRCA dissemination tool

Topics

49


• AWAI (Agriculture Web Applications Interface) is a “single sign-on” Portal, used by Member States to access all the Web applications of DG AGRI by using a unique userid / password .

• AWAI is accessible via the Internet or via TESTA(*)

(*) Trans European Services for Telematics between Administrations (*) Trans European Services for Telematics between Administrations

50

Access to DG AGRI Web systems


Transmission of declarations• NewIDES is a software package which

allows the processing of data files that are sent by the Member States to the various services of the DG AGRI.

• The Web Upload Secure Interface (WUSI) is an Internet application, which allows the easy and safe transfer of these data files to NewIDES.

51


AW

AI

Por

tal

Upload report

Acknowledgement

Email transmission (only for TEST)

NewIDES

Treats the messages.

Sends data to DG AGRI applications.

Sends acknowledgements to message originators.

DG AGRI Applications

(AMIS,AGREX etc)

WUSI

Message(s) in an e-mail

NotificationInternal

notification

Notification

Public DomainPublic Domain EU DomainEU Domain

Member States

File transfer overview

52


What is CAPED

• CAP-ED (Common Agriculture Policy - Electronic Dictionary) is a system aiming to simplify and facilitate the data exchanges between the actors involved in the CAP, by defining a common electronic dictionary available electronically.

• CAP-ED contains the definitions of the codes to be used for the data exchanges (e.g., the EAGF Detailed Nomenclature, Codes to be used for T104 declaration)

53


DG

AG

RI

DG

AG

RI

Applica

tions

Applica

tions

CAP Electronic Dictionar

y

Ministries

Public Bodies

Other EU Institutions International Organisations

CAP-ED overview

AW

AI

Por

tal

Member States

54


Example


Example


What is CIRCA

• CIRCA (Communication & Information Resource Centre For Administrations) is an information dissemination tool, fine-tuned to EU and Public Administrations needs.

• It enables a given community to maintain a private space on the Internet, where they can share information, documents.

• Library of EAGF related documents

57


Example


Example


Example

61

Figures (financial exercise 2005)


62

EAGGF TOTAL EXPENDITURE - 2005

EAGGF Guarantee Section Total 2005

1 224,92

6 503,14

2 753,99

6 406,49

9 968,93

1 806,21

5 499,73

1 256,34

1 235,68

891,86

902,89

956,28

1 034,52

4 215,05

463,80

77,45

58,78

137,54

291,21

44,97

716,81

9,87

1 838,97

127,34

247,50

0 2000 4000 6000 8000 10000 12000

BE

CZ

DK

DE

EE

EL

ES

FR

IE

IT

CY

LV

LT

LU

HU

MT

NL

AT

PL

PT

SI

SK

FI

SE

UK

in mio Euro

63

DIRECT PAYMENTS - 2005

Direct payments 2005

457,45212,42

918,155 014,04

21,231 819,85

4 666,587 707,91

1 209,164 015,18

7,88

81,7828,06

316,000,35

554,14651,44702,00

553,5624,72

483,28668,71

3 479,05

25,06

82,81

0 1000 2000 3000 4000 5000 6000 7000 8000 9000

BE

CZ

DK

DE

EE

EL

ES

FR

IE

IT

CY

LV

LT

LU

HU

MT

NL

AT

PL

PT

SI

SK

FI

SE

UK

in mio Euro

64

EXPORT REFUNDS - 2005

Export Refunds 2005

388,03

204,42

433,18

8,64107,57

524,85178,09

88,77

429,49

43,92

14,99

66,25

99,31

4,79

26,87

3,70

0,48

0,81

0,00

29,680,02

38,29

6,26

280,2773,26

0 100 200 300 400 500 600

BE

CZ

DK

DE

EE

EL

ES

FR

IE

IT

CY

LV

LT

LU

HU

MT

NL

AT

PL

PT

SI

SK

FI

SE

UK

in mio Euro

65

INTERVENTION - 2005

Storage2005

44,78

174,23

8,07

103,80

154,22

37,03

93,34

3,41

25,60

26,07

0,00

1,39

5,93

-0,18

-4,61

9,34

0,00

12,29

-29,77

1,73

6,69

33,54

1,55

0,00

143,05

-50 0 50 100 150 200

BE

CZ

DK

DE

EE

EL

ES

FR

IE

IT

CY

LV

LT

LU

HU

MT

NL

AT

PL

PT

SI

SK

FI

SE

UK

in mio Euro

66

RURAL DEVELOPMENT - 2005

Rural development 2005 (*)

182,00

50,40

25,10

110,00

164,10

201,90

9,00

961,00

94,40

133,10

157,25

170,66

336,89

179,53

479,11

63,44

15,91

679,59

859,99

357,42

533,78

157,25

803,62

46,14

55,77

0 200 400 600 800 1000

BE

CZ

DK

DE

EE

EL

ES

FR

IE

IT

CY

LV

LT

LU

HU

MT

NL

AT

PL

PT

SI

SK

FI

SE

UK

in mio Euro

67

OTHERS - 2005

Others2005

88,48

78,07

760,18

994,77

721,97

24,50

622,85

25,32

0,28

0,70

213,88

142,23

328,25

18,05

13,07

13,03

3,44

50,59

51,87

26,180,98

1,10

0,40

49,52

8,98

0 200 400 600 800 1000 1200

BE

DK

EE

ES

IE

CY

LT

HU

NL

PL

SI

FI

UK

in mio Euro

68

HUNGARY - 2005

EAGGF Guarantee Section Hungary 2005

4,14%

28,17%

44,08%19,96%

3,65%

Export Refunds

Storage

Rural development

Direct payments

Others

69

CZECH REPUBLIC - 2005

EAGGF Guarantee Section Czech Republic 2005

7,23%

39,24%

1,94%

45,80%

5,79%

Export Refunds

Storage

Rural development

Direct payments

Others

70

POLAND - 2005

EAGGF Guarantee Section Poland 2005

5,40%

38,17% 1,42%

52,26%

2,75%

Export Refunds

Storage

Rural development

Direct payments

Others

71

SLOVAKIA - 2005

EAGGF Guarantee Section Slovakia 2005

2,53%

33,46%

5,27%

4,97%

53,78%

Export Refunds

Storage

Rural development

Direct payments

Others


Questions and Answers

72

.


Athéné NESZMÉLYI Ph.D.European Commission

DG Agriculture and Rural DevelopmentEAGF Financial Management (I.4)

1049 Brussels, 130 Rue de la Loi, 10/03

Tel: +32 2 29 69450Fax: +32 2 29 66446

THANK YOU FOR YOUR ATTENTION!

e-mail: [email protected]

Documents

European Commission DG Agriculture (Unit I.4)