Fraud Risk Assessment and Effective and Proportionate Anti-Fraud Measures

This guidance note provides assistance and recommendations to managing authorities (MAs) for the implementation of Article 125(4)(c) CPR, which lays down that the MA shall put in place effective and proportionate anti-fraud measures taking into account the risks identified. The Commission also provides guidance for the audit authority's (AA) verification of the compliance of the MA with this article.

The Commission recommends that MAs adopt a proactive, structured and targeted approach to managing the risk of fraud. For the Funds, the objective should be proactive and proportionate anti-fraud measures with cost-effective means. All programme authorities should be committed to zero tolerance to fraud, starting with the adoption of the right tone from the top. A well-targeted fraud risk assessment, combined with a clearly communicated commitment to combat fraud can send a clear message to potential fraudsters. Effectively implemented robust control systems can considerably reduce the fraud risk but cannot completely eliminate the risk of fraud occurring or remaining undetected. This is why the systems also have to ensure that procedures are in place to detect frauds and to take appropriate measures once a suspected case of fraud is detected. The guidance is intended to help as a step-by-step guide to addressing any remaining instances of fraud once other sound financial management measures have been put in place and are implemented effectively. However, the overall objective of the regulatory provisions is cost-effective fraud risk management and the implementation of effective and proportionate anti-fraud measures, which in practice means a targeted and differentiated approach for each programme and situation.