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There are two main types of EU funding: funds which are managed centrally and directly by the European Commission, e.g. for research; and funds whose management is shared between the EU and the Member States, e.g. the Structural Funds and the Cohesion Fund. The EU entrusts management of the latter to the Member States. The bulk of EU spending involves funds which come under shared management by the EU Member States.
For funds in 'shared management', the Commission currently entrusts the Member States with implementing programmes at national level. Member States then allocate these funds to end recipients (e.g. companies, farmers, municipalities, etc.). The Member State has primary responsibility for setting up a management and control system which complies with the requirements of the Regulations, ensuring that this system functions effectively and also preventing, detecting, and correcting irregularities. The Commission plays a supervisory role by satisfying itself that the arrangements governing the management and control system are compliant. It does so by verifying the effective functioning of this system and making financial corrections, where necessary.