37 th conference of the directors of paying agencies riga, 6-8 may 2015 christina borchmann director...
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37th Conference of the Directors of Paying Agencies
Riga, 6-8 May 2015
Christina BorchmannDirector
Directorate J: Audit of Agricultural ExpenditureDirectorate General for Agriculture & Rural Development
Annual Activity Report for 2014
Adjusted Error Rate
Market Intervention 3.87%
Direct Payments 2.54%EAGF 2.61%EAFRD 5.09%IPARD 3.19%CAP 3.10%
Corrective Capacity
• Corrective capacity is an essential element to give the Director General assurance.
• DG AGRI objective is NOT to increase financial corrections.
• The objective is to get the error rate down.
financial corrections
recoveries total
m EUR m EUR m EUR
Total CAP 650,027 213,467 863,494 1,55%
Corrective capacity
as % of 2014 expenditure
Reservation methodology
• Reservation necessary if error rate above 5% - unless amount at risk is below de minimis.
• Reservation necessary if error rate between 2 and 5% unless de minimis or mitigating factors apply:
• Deficiencies remedied,• 2014 expenditure covered by conformity clearance procedure
• No reservation if error rate for 2014 is below 2%.
• Where the amount of EU expenditure at risk is below the 1 million EUR de minimis threshold established in DG AGRI's materiality criteria, no reservation applies.
2014 financial clearance
• 30/04/2015: 81 letters to Paying Agencies
• 5 disjoined accounts for EAGF
• 7 disjoined accounts for EAFRD
• Reasons:• Late submission of accounts and of additional work
requested• Material error • Qualification of accounts by CB
Certification Bodies – Legality & Regularity
• 15 dedicated missions by DG AGRI
• Combination audits: include in the control sample some of the Certification Body checks carried out as well as those carried out by the Paying Agency.
Conformity Clearance – new deadlines
• Reg. 908/2014 includes a number of new mandatory legal deadlines for the Commission and for the MS at each stage of the procedure;
• Commission will need to apply the Regulation strictly to be able to meet the legal deadlines;
• A monitoring system is in place to ensure Commission meets deadlines;
• MS must request and justify deadline extensions where needed.
Conformity Clearance: new MS possibilities
• MS will be invited (in letter of findings) to calculate the risk to the EU budget.
• They are required to do this work at the beginning of the contradictory procedure.
• New information should come at the very latest at the time of commenting on the bilateral minutes (Reg. 908/2014, Art 34(3).
New financial correction guidelines
• Why are new guidelines necessary?
• Adapt existing rules to the new legal provisions (Art.52 of R. 1306/2013 and Art.12 of R. 907/2014)
• Improve clarity and transparency of the rules
• Take stock of experience gained/lessons learned
• New elements introduced:
• Calculated/Extrapolated corrections: more detailed instruction
• Additional levels of flat-rate financial corrections
• Entry into force of the new rules from 1.1.2015.
Key & ancillary controls• Definitions clarified, harmonised content & layout.
• Lists finalised (20)
• Future lists
• Application date: for conformity clearance procedures launched as from 1.1.2015
• Intention is to increase transparency - not to increase financial corrections
Cost of Control
• 4 billion EUR
• New information gathering exercise:
• Cost of control for how many controls• Keeping LPIS up to date• CAP reform implementation• IT systems• CB work
• Starts Autumn 2015.