The internal control system of the Structural Funds years 20072013

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The internal control system of the Structural
Funds (years 2007-2013)

• Supreme Chamber of Control
• Druskienniki, September 2008

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Performance of the audit

• Memorandum of Understanding approved by the
  Heads of SAIs of the Visegrád countries, Austria
  and Slovenia at their meeting in Visegrád on
  26-27 October 2006.

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Scope of the audit

• Functioning of the internal control system
  implemented in the budget year 2007 in one or
  several priority axes, operations or programmes
  selected by the individual SAIs, which get
  support to implement the convergence objective
  from the European Regional Development Fund
  (ERDF) 2007-2013.

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Scope of the audit

• The audits were carried out
• between January and June 2008.

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General audit objective

• Compliance of participating countries
  activities for the implementation of selected
  operational programs co-financed from the ERDF
  with the requirements of the Community law and
  their respective national law.

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Specific audit objectives

• whether the National Strategic Reference
  Framework (NSRF) complies with the relevant EU
  regulations from a point of view of substantive
  content
• whether the procedures followed in the course of
  its preparation were in harmony with the
  Community rules and the set deadlines were
  fulfilled

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Specific audit objectives

• whether the institutional system is able to
  ensure the operation of efficient internal
  control
• whether the relevant partners were involved in
  the different stages of programming covering the
  preparation, implementation, monitoring and
  evaluation of operational programmes

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Specific audit objectives

• whether the electronic data processing system is
  able to ensure quick and reliable information in
  the fields of monitoring and financial
  transactions
• whether the reporting obligations related to the
  financial management 2007 have been met

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Specific audit objectives

• whether the monitoring activities carried out in
  connection with the operational programme have
  been accomplished in a sound way
• whether the yearly implementation report for the
  Commission was completed by the deadline set and
  with the required content

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Specific audit objectives

• whether the system of irregularities
  identification and reporting is in compliance
  with the Community rules.

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Organizational and legal framework for the
years 2007-2013
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National Cohesion Strategy horizontal objectives
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Instruments for execution NCS objectives
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Financial frame of NCS

• total about 85.56 billion Euro
• on average yearly (up to 2015) about 9.5 billion
  Euro (5 of GDP)
• 67.3 billion Euro from EU budget
• 11.86 billion Euro from public funds (about 5.93
  billion Euro from state budget)
• about 6.4 billion Euro from private sector

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Financing level of programmes of the aim
Convergence
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Anticipated payment to NCSin the years 2007-2015
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Principles of the institutional system of EU
funds distribution
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Implementation level
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Institutions involvement in implementation with
regards to state programmes

• 32 intermediary bodies
• 56 implementing authority

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Certifing Authority

• independent of managing authorities
• placed in the structure of appropriate ministry
  with regards to regional development
• for regional operational programmes tasks will be
  seconded to voivodship offices/authorities

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Auditing authority

• General Inspector of Fiscal Audit
• additionally among Public Finance Sector Entities
  internal audit is carried out according to IIA
  standards

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Monitoring committees

• Coordinating Committee NCS
• Monitoring Committee of the programme

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Internal control among Public Finance Sector
Entities

• functional control
• internal audit
• internal control system based on commonly
  recognized international audit standards

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General evaluation of audited activity

• The Supreme Chamber of Control positively
  evaluates compliance of audited elements of
  management and control systems of ROP with the
  provisions of national and Community law, despite
  irregularities found due to which the evaluated
  procedures should be changed.

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General evaluation of audited activity

• Issuing positive evaluation the NIK took into
  account actions towards
• developing framework of institutional-
  organisational systems of management and control
  for the ROP, including the division of management
  and control functions between different bodies,

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General evaluation of audited activity

• obeying the rule of partnership in preparing and
  implementing the programmes, especially within
  appointing committees monitoring regional
  operational programmes and within their work,
• developing monitoring and reporting system,
• implementing the electronic system of exchange of
  data with the European Commission, as well as its
  implementation on the level of negotiating ROP
  with the Commission,
• developing a system of informing about
  irregularities.

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General evaluation of audited activity

• Irregularities observed included the following
• lack of sufficient control mechanisms in the
  procedures of Managing Authorities responsible
  for ROP, in the areas of
• - preventing parallel financing of the same
  operations from different sources
• - compliance with the Community law during
  evaluation of documents submitted by
  beneficiaries,
• - ensuring that no conflicts of interests arise
  among the staff of institutions

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General evaluation of audited activity

• failure to provide clear criteria for choosing
  the projects by some ROP Managing Authorities,
  which in turn resulted in changes of projects
  ranking position already after the evaluation
• lack of parts of procedures, which apply to
  fulfilment of tasks of a certifying institution,
  in the area of certifying regularities of
  expenses within regional operational programmes,
  concerning especially agreement on certified
  amounts with amounts revealed in credible
  accounting systems.

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• Thank you for your attention.