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E. Control systems

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One consequence of the increased decentralisation in programme management was the strengthening of existing control arrangements in order to allow verification of the sound management of operations at any time. A range of mechanisms - including on-the-spot verification - has therefore been established. These make it possible to ensure proper use of funds and to certify that the expenditure made is legal and correct. They also enable the necessary corrections to be made in the event of irregularities.

The basic principle is that the Member State is generally responsible for controlling and correcting irregularities. To do this, it relies on the two "pillars" represented by the managing and payment authorities. These check that financial flows are transparent and operations are correct. The State must, furthermore, take the necessary measures to check that these two authorities actually do fulfil their duties in this area by, for example, requiring them to establish internal audit departments, or resort to some equivalent procedure, with a view to securing the required assurance regarding the effectiveness of their financial systems and procedures. Alternatively, it could appoint auditors who are independent of each authority and who could give the State the same assurance and confirm the legality of the requests submitted to the Commission. This is the only means for the State to give the European Commission effective assurance that the requests for funds are justified. On completion of an assistance measure, a person or department independent of the managing authority - the auditor, for example - must assess the validity of the final payment request. Also, in all cases, the responsible authorities must keep available for the Commission, for three years following payment of the balance, all the supporting documents relating to expenditure and control of assistance implementation. This information must be comprehensive and readily available.

The responsibility of the Commission is, above all, to verify the effectiveness of the control systems. To this end, it may carry out on-the-spot checks, in collaboration with the relevant State, or request the State to carry out these checks. In either case, at least once a year, the Commission and the State jointly examine the results from the checks carried out, the financial impact of the irregularities noted, the corrective measures already taken or still outstanding and, if relevant, changes to the management and control systems.

  • Commission Regulation (EC) No 2355/2002 of 27 December 2002 amending Commission Regulation (EC) No 438/2001 laying down detailed rules for the implementation of Council Regulation (EC) No 1260/1999 as regards the management and control systems for assistance granted under the Structural Funds

    ES, DA, DE, EN, FR, GR, IT, NL, PT, FI, SV

And in the event of irregularities ?

As soon as irregularities are noted, the established principle is to recover any undue payment together with, if relevant, interest on late payments. There has been a genuine commitment to improving the systems which make it possible to suspend or cancel assistance from the Funds in these circumstances. Here again, the main responsibility lies with the Member States. They make the financial corrections required by cancelling all or part of the Community contribution. The Commission is, however, kept directly informed of all the irregularities noted and of the progress in the administrative and financial proceedings undertaken. Where the Member States fail to comply with their obligations, the Commission may therefore take action.

In cases where the State does not make the necessary corrections, or even in the event of doubt as to the effectiveness of the management and control systems established, the Commission may suspend or cancel all or part of the Funds’ contribution to the assistance concerned. This financial correction may be limited to the irregularity noted, or extended if the irregularity results from a more general weakness in the management or control system. Financial corrections may also prove necessary for irregularities which do not have an exact financial value, for example in the event of non-compliance with a particular provision of Community law.


Financial corrections*

The Member State must ensure that an adequate control system is in place, and should correct financial irregularities as soon as they are noted. These may relate either to an individual dossier or be more systemic in nature. The released funds can then be re-used. If the Member State fails to correct the irregularity, or if the Commission concludes that there are serious failings in the management and control systems that may give rise to systemic irregularities, then the Commission may impose financial corrections on the Member State. The amount of any correction will be decided with respect for the principle of proportionality, and the extent to which the fund was put at risk by the shortcomings in the management or control systems.


* Article 39 of Council Regulation (EC) No. 1260/1999 of 21 June 1999 laying down general provisions on the Structural Funds.


 

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