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The term 'control and audit' refers to the sound financial management of the Cohesion policy funds. Management and delivery of the programmes is largely devolved to administrations at national and sub-national levels. Member States must assure the Commission that the Funds are being spent effectively and in accordance with the Regulations. They must provide reliable accounting, monitoring and financial reporting systems and identify the responsible bodies and procedures to ensure an adequate audit trail.
An audit authority must be designated for each operational programme.
That audit opinion should provide assurance to the Commission on three points, namely the legality and regularity of the declared expenditure, the effective functioning of the management and control systems and the completeness, accuracy and veracity of the accounts.
This authority provides the Commission with an audit strategy and an annual audit opinion and annual control report, taking into account issues identified during audits carried out during the previous 12 months.
The Commission has also the right to carry out on-the-spot audits (at a minimum 15 days' notice) or may request a Member State to audit specific programmes or projects.
The principle of proportionality is applied so that much smaller programmes do not require the same level of administration as far larger programmes, as well as the single audit principle that aims at reducing the number of controls and audits at beneficiary level and increases cross-reliance on audits.
Furthermore, when the Commission confirms that a programme has an effectively functioning management and control systems and an error rate of 2% or below for the last consecutive 2 years, Member States may apply enhanced proportionate arrangements. Participation into the European Public Prosecutor’s office is also positively considered in this assessment. However, the system may be reversed at any time during the programming period.
Enhanced proportionate arrangements allow the managing authority to apply only national procedures to carry out management verifications, as well as to limit its audit activity to audits of operations covering a sample based on a statistical selection of 30 sampling units for the programme or group of programmes concerned.
When enhanced proportionate arrangements apply, the Commission shall limit its own audits to a review of the work of the audit authority through re performance at its level only, unless available information suggests a serious deficiency in the work of the audit authority.
control, audit, financial management, reporting