clearance of accounts in rural development programmes richard croft
TRANSCRIPT
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CLEARANCE OF ACCOUNTS IN RURAL DEVELOPMENT PROGRAMMES
RICHARD CROFT
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Main messages
Financing of CAP brought under a common regulatory framework via Council Regulation 1290/2005
2 new Funds created: EAGF+EAFRD Annual financial clearance of accounts
procedure applies to both Many features are similar to those under “old”
EAGGF Guarantee rules
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Key Areas
The new overall framework (2) Features common to “old” and new rules (2) Overview of information flows Key new features of financial clearance
applying specifically to EAFRD (7) A brief overview of the conformity clearance
process (4) Final general principles
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The new overall framework: Legislation
Article 30 of Council Regulation (EC) No. 1290/2005 (replaces R.1258/99)
Article 10 of Commission Regulation (EC) No. 885/2006 (replaces R. 1663/95)
7 new Commission Guidelines
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The new overall framework: the 7 Guidelines
10 “old” Guidelines have now been replaced by 7 new ones – compliance is expected
Guidelines 1 (Recoveries), 2 (Accreditation) and 4 (Statement of Assurance) are of key interest to MS
Guidelines 3 (Audit Strategy), 5 (Model Report), 6 (Certificate) and 7 (Certifying Body’s opinion on the Statement of Assurance) concern mainly the CBs
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Financial clearance: features common to old EAGGF Guarantee rules – R. 1290/2005
Commission Decision by 30 April of FY n+1 covers the completeness, accuracy and veracity of the annual accounts submitted
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Financial clearance: features common to old EAGGF Guarantee rules – R. 885/2006
Communication to MS of our findings (“31st March letters”) and the treatment of disjoined accounts
Certifying Bodies - the issue of their report and certificate (Art 5)
The PA’s annual accounts (Art 6) Transmission of documentation (by, where
applicable, Co-ordinating Bodies – Art 7)
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Payment Data
CATSdatabase
Reconciliation
X-tabledata
Yearly
MonthlyDeclaration(table 104) AGREX
AnnualDeclaration
Yearly Summary
Totals MonthlyDeclarations
Yearly Summary
Monthly Summary(FEAGA)
COMMISSION DG-AGRIMEMBER STATE
Unit I4
Unit J1
Paying Agency
Coordinating BodyAnnual DeclarationMonthly DeclarationQuarterly DeclarationX-table data
COMBOdatabase
Financialcorrections
Financial andCompliance Audits
Clearance Procedure
Unit F2
RDISQuarterly
Declaration
Totals QuarterlyDeclarations
Yearly Summary
Quarterly Summary(FEADER)
Annual Declaration+ X-table aggregates
SFC2007
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New features of financial clearance (1) - Accounting
Rural development expenditure covered under a separate fund (EAFRD) for clearance purposes
Each PA’s accounts must distinguish between EAGF and EAFRD expenditure (Art 2(1) of Commission Regulation (EC) No. 883/2006)
Expenditure paid to beneficiaries prior to approval of RDPs (even if not yet part of a quarterly declaration) must be accounted for in the PA’s books
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New features of financial clearance (2) – Annual declarations
EAFRD expenditure should be summarised by programme and measure
Form and content of the annual declaration file – see Annex II of R. 1042/2007 and Annex IV
Table of differences between total annual expenditure and the sum of the quarterly declarations – see Annex IV
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New features of financial clearance (3) - Debtors
Compilation of Tables 3 and 4 (EAFRD irregularities: administrative and judicial procedures respectively) and 6, as per Annex III of R.885/2006
Tables 3, 4 and 6 are the EAFRD counterparts to Tables 1, 2 and 5 under EAGF (provided as part of the FY2006 clearance exercise)
Reporting as per Guideline on recoveries (No.1) – modified for FY 2007
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New features of financial clearance (4) – The Statement of Assurance
Requirement for PA directors to sign a statement of assurance (“SoA” - see Annex II of R. 885/2006)
Guideline no.4 gives details Certifying Bodies must give an opinion on
the SoA (Art 5(4)(b)): Guideline no.7 provides further information as to content/format
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New features of financial clearance (5) – Certifying Bodies’ auditing and reporting
Guidelines 2, 3 and 5 are interconnected (assessment of internal control system, the audit strategy and reporting of results)
IACS and non-IACS expenditure to be evaluated/reported on separately (3 EAFRD populations including debts)
Materiality raised from 1% to 2% of T104/population value
The audit report has two main sections: EAGF and EAFRD
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New features of financial clearance (6) – Certifying Bodies’ audit certificates
Separate audit opinions required for each Fund CBs’ certificates have been expanded to include a
statement on whether the PA’s internal control procedures have operated satisfactorily (Art 5(3) of 885/2006) – this must also be done separately for EAGF and EAFRD, unless both opinions are unqualified
Guideline no.6 provides options and formats
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New features of financial clearance (7) – Submission of information
Submission date advanced from 10 February to 1 February (Art 7(2) of R.885/2006)
Co-ordinating Bodies must send a synthesis of all SoAs and certificates by 15 February (Art 7(5))
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Conformity clearance (1) - overview
Rules for EAFRD are the same as for those relating to EAGF, i.e. Art 31 of R.1290/2005 and Art 11 of R.885/2006
The aim is to exclude from Community financing expenditure incurred in a way that has infringed Community rules
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Conformity clearance (2) – the “24 months” rule
Under Article 31(4) of 1290/2005, financing may not be refused for:
- multi-annual expenditure where the final obligation on the recipient occurs more than 24 months before Art 11 letter- EAFRD payments (but not multi-annual) by the paying agency made more than 24 months before the Art 11 letter
Not applicable to irregularities, national aids and infringements (see Art 31(5))
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Conformity clearance (3) – initial steps
Communication Art 11 by Commission (findings, corrective measures)
MS reply 2 months after receipt (possible extension)
Bilateral meeting MS communicates all the information within 2
months of the date of receipt of the bilateral minutes (possible extension)
Formal communication (COL); evaluation of expenditure to be excluded
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Conformity clearance (4) – further steps
Conciliation Body Final letter from Commission Correction then feeds into Commission (ad-hoc)
Decision New information: only admissible if it helps a
better estimate of the financial damage, and provided that the late transmission is justified due to exceptional circumstances
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Final general principles
Only expenditure declared by accredited PAs can be reimbursed (Art 10 of R.1290/2005)
Any activities not previously accredited under R.1663/95 (e.g. ex-EAGGF Guidance RD) must be formally accredited (new Act) by 16 October 2007 (Art 17(1) of R.885/2006)
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Thank you for your attention!