The Financial Regulation (FR) applicable to the General Budget of the European Union (EU) sets out that under indirect management the Commission can entrust budget implementation tasks to certain countries, organisations and bodies (further referred to as 'Entities').
The systems, rules and procedures of these Entities must ensure a level of protection of the EU’s financial interests equivalent to that under direct management in the following areas:
- internal control system
- accounting system
- independent external audit
- provision of financing to third parties
- financial instruments
- exclusion from access to funding
- publication of information on recipients
- protection of personal data
Pillar Assessments are used to assess whether the protection of the EU’s financial interests is equivalent.
In order to start the Pillar Assessment process, interested Entities need to submit an application (Application form for pillar assessment) to the Commission. The Commission service(s) concerned will then carry out opportunity and (legal) eligibility checks. If the result of the checks is positive, a Pillar Assessment can take place. The Pillar Assessment is usually carried out by external consultants contracted by the interested Entity. In exceptional cases, external consultants are contracted by the Commission service(s) concerned.
Terms of Reference (ToR) for Pillar Assessments are available here: Terms of reference for a pillar assessment contracted by an entity requesting to be entrusted with implementation of the EU budget
(adopted by Commission Decision C(2019)2882 on 17/04/2019)
The use of these ToR is compulsory.
Based on the results of the Pillar Assessment the Commission will decide whether it can entrust budget implementation tasks to the Entity and whether it can conclude specific agreements (i.e. indirect management contribution agreements) under indirect management with the entity.