1 management verifications michael ryan (michael.ryan1@ec.europa.eu) axel badrichani...

1

Management verifications

Michael Ryan (michael.ryan1@ec.europa.eu) Axel Badrichani (axel.badrichani@ec.europa.eu)

European UnionCohesion Policy

“Train the trainers”European Commission seminar for managing and

certifying authorities 9 June 2009

2

Commission guidance note

– Issued in June 2008

– To assist managing authorities (MA) and intermediate bodies (IB)

3

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.

4

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 (…).”

5

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.

6

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.

7

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

8

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.

9

Menu

Legal basis What are management verifications ? Types of verifications (Admin / on the

spot) How much should be done ? Intensity Efficient and effective verifications

10

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

11

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

12

Types of verifications

Administrative verifications

On the spot verifications

13

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

14

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

15

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

16

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

17

Documenting verifications

Use Checklists Record sampling methodology Checks carried out and documentation

reviewed (Short) written report of on the spot

verification

18

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…

19

KEY POINTS FOR MANAGING AUTHORITIES

20

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

21

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)