Integrated Administration and Control System (IACS)
Member States have to take the necessary measures to assure that transactions financed by the European Agricultural Guarantee Fund are actually carried out and executed correctly, and to prevent and deal with irregularities. To this end, for all direct payments, Member States should operate an Integrated Administration and Control System.
What is the purpose of IACS?
According to the principle of shared management, Member States must take the necessary measures to ensure that transactions financed by the European Agricultural Guarantee Fund (EAGF) are not only actually carried out but are also implemented correctly. Furthermore, Member States must prevent irregularities and take the appropriate action if they do occur. For this purpose, the national authorities are required to operate an Integrated Administration and Control System (IACS) in order to ensure that payments are made correctly, irregularities are prevented, revealed by controls, followed up and amounts unduly paid are recovered.
In financial terms, direct aids account for approximately 90% (around € 40 billion) of the expenditure financed from the EAGF.
How does IACS work?
IACS is the most important system for the management and control of payments to farmers made by the Member States in application of the Common Agricultural Policy. It provides for a uniform basis for controls and, among other requirements, it covers the administrative and on-the-spot controls of applications and the IT system which supports the national administration in carrying out their functions.
IACS is operated in the Member States by accredited paying agencies. It covers all direct payment support schemes as well as certain rural development measures. Furthermore, it is also used to manage the controls put in place to ensure that the requirements and standards under the cross-compliance provisions are respected.
The legal requirements concerning IACS are laid down in Council Regulation (EC) No 73/2009 establishing common rules for direct support schemes for farmers and in Commission Regulation (EC) No 1122/2009 laying down the implementing rules.
IACS applies to direct support schemes as well as to rural development measures which are granted based on the number of hectares or animals held by the farmer.
What does IACS consist of?
In physical terms, IACS consists of a number of computerized and interconnected databases which are used to receive and process aid applications and respective data. Thus it provides for:
- a unique identification system for farmers;
- an identification system covering all agricultural areas called Land Parcel Identification System (LPIS);
- an identification system for payment entitlements;
- a system for identification and registration of animals (in Member States where animal-based measures apply).
The system ensures a unique identification of each farmer as well as of all agricultural parcels of land and, if needed, of animals. The system covers also the processing of the aid applications.
How do controls take place under IACS?
The fulfilment of the criteria for receiving aid is assessed through administrative controls and through checks carried out on-the-spot. The administrative controls consist of a number of cross-checks of the information contained in each beneficiary's application. The cross-checks are performed automatically by the system. For the purpose of the on-the-spot-checks the authorities of the Member States check a number of farms selected either randomly or through risk analysis techniques. However, by means of available technology such as aerial or satellite photographs of the agricultural parcels, it is in many cases possible to carry out an independent measurement of the size of a given parcel and to check the plant coverage without actually going to the field.
If the checks reveal irregularities, penalties in the form of reductions of support are imposed upon the beneficiary. The reduction has to be effective and proportionate and can also imply multi-annual reductions. Reductions mainly relate to eligibility conditions such as the declaration of the size of the parcels, cross compliance and the respect of application deadlines.
Based on the applications made by the farmers and the possible reductions to be applied, the final payments to the farmers are calculated. When it is determined that a payment has been unduly made, the Member State has to make a recovery.
Is the IACS being reviewed?
The IACS databases have to be regularly updated by the Member States and the historical data for the farmers must be saved. Regular reviews take place in order to take into account new available techniques as well as to simplify the system.
Member States report annually to the Commission by submitting detailed statistics on applications, controls and reductions.
The European Court of Auditors has repeatedly confirmed that – where properly applied – IACS is an effective control system in limiting the risk of irregular expenditure.