PowerPoint Presentation INTERREG IVC

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Introduction to First Level Controls First Level
Control Meeting Lille, 10 June 2008 Dominique
Bouchez
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• Introduction to Control and Audit System
• The First Level Control Systems
• Designation of the Controllers
• Quality measures

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• 1. Introduction to Control and Audit System

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European Commission
Control audit system
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• Peculiarity of the First Level Controllers
• They are the basis of the pyramid of checks,
  controls and audits
• They have the opportunity to
• Be the first ones to check the expenditures
• Check 100 of the expenditures declared
• Have the full range of information
• Have a thorough knowledge of the rules applicable
  in the Member State of the partner they check
• Therefore they have much more chances to detect
  anomalies

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..

• As the cornerstone of the pyramid, a good
  quality of the first level control is
  prerequisite to have a high level of confidence
  in the sound functioning financial management of
  the whole system
• During INTERREG IIIC Programme, some weaknesses
  were identified concerning the First level
  control
• There is room for improvement

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• 2. The First Control Systems

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Design of first level control systems

• Legal basis Art. 16 of R. 1080/2006
• In order to validate expenditure, each Member
  State shall set up a control system ()

• 4 systems possible
• Centralised control at MS level by a public
  administrative body
• Centralised control at MS level by a private
  audit firm
• Decentralised control by controllers selected by
  the project partner from a central shortlist
• Decentralised control by internal or external
  controller proposed by the project partner and
  approved at national level

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Steps to the establishment of INTERREG IVC FLC
system

• JTS provided to EU-MS Norway on how to meet
  this Regulation requirement
• Guidance note
• Questionnaire
• Each EU-MS Norway described FLC system in the
  questionnaire and sent it to the JTS
  (prerequisite to signature of the Agreement
  MSNorway, Switzerland/MA/CA)

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Centralised control system (14 MS)

• Through Public Administrative body
• Belgium (Walloon Region)
• Czech Republic
• Estonia
• Hungary
• Ireland
• Luxembourg
• Latvia
• Malta
• Poland
• Romania
• Sweden
• Slovenia
• Slovakia

• Through Private Audit firm
• Lithuania

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Decentralised control system (13 MS)

• Controllers selected by project partners and
  confirmed at national level
• Austria (for Federal Chancellery)
• Belgium (Bruxelles Capitale)
• Belgium (Flanders)
• Denmark
• Finland
• France
• Poland (for Marshall offices)
• Spain
• The Netherlands
• United Kingdom

• Controllers selected in a short list
• Austria (FederalLand)
• Bulgaria
• Cyprus
• Norway
• Portugal

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• Member States with FLC not established yet
• Germany
• Greece
• Italy

• Member States with no Agreement signed yet
• Belgium Bruxelles Capitale
• Bulgaria
• Germany
• Greece
• Hungary
• Italy
• Romania
• United Kingdom

Partners expenditure of these MS cannot be
reported for the time being
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• 3. Designation of the First Level Controllers

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Designation of the first level controllers

• Legal basis Art. 16 of R. 1080/2006
• It is the responsibility of the Member States to
  designate the controllers responsible for
  verifying the legality and regularity of the
  expenditure declared by each beneficiary
  participating in an operation

? Member States (MS) shall design their own
system to ensure that expenditure is correctly
checked by the PP/LP before the submission of
progress reports by the operations
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• What is the first level controllers aim?
• Check at the project partner and lead partner
  level the sound financial management and more
  particularly check that
• invoices and payments are correctly recorded and
  sufficiently supported
• activities have actually taken place
• conditions of the programme have been observed
  and followed
• community rules have been respected
• ensuring that the costs are eligible

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• Scope of the work expected
• The work expected is not only to check that the
  expenditure declared is sufficiently documented
• But also that the expenditure is eligible
• Check if the expenditure is in line with the EU
  and national requirements, the application form,
  the subsidy contract
• Check if the expenditure is clearly related to
  the project
• Delivery of the product

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• The JTS has provided a checklist (Annex 4)
  summarizing the minimum requirements to appoint
  first level controllers
• Competences, skills and experience
• Knowledge of English and of ERDF funds
• Independence from finances and activities
• No conflict of interest
• The work has to be documented
• Compliance with delays

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• Knowledge expected from a first level controller
• General prerequisite knowledge of
• International and national audit standards
• EU rules
• Regulation (EC) 1080/2006
• Regulation (EC) 1083/2006
• Regulation (EC) 1828/2006
• Directive (EC) 2004/18/EC (public procurement)
• National rules
• The rules applying to the programme
• The programme manual
• English

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• Knowledge expected from a first level controller
• More specific knowledge of the project
• The application form
• Is the expenditure complying with the objectives
  as described in the application form?
• The subsidy contract
• Are the provisions of the subsidy contract
  correctly applied?
• The partnership agreement

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• Other requirements
• Concerning independence
• To be independent from project implementation
• No conflict of interest
• Concerning the achievement of the work
• To document the work carried out
• To deliver the work in the delays

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• All MS shall keep in mind all these requirements
  when designating the first level controllers

And more particularly
in the decentralised system when the first level
controller is proposed by the project partner
(PP), the minimum requirements of the Annex 4
shall be even more carefully checked by the
central approbation body
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• Designation in case of decentralised system
• The PP proposes to a central approbation body the
  controller
• The central approbation body checks that the
  controller proposed by the PP fulfils all the
  requirements
• If all the requirements as described in Annex 4
  checklist are fulfilled, the central approbation
  body officially confirms the choice of the PP
  (cf. approbation form)
• The confirmation official appointment of the
  first level controller

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• 4. Quality Measures

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• Quality measures for the first level control
• Main challenge having an homogeneous first
  level control for the whole programme
• At programme level
• Training and seminars
• Documents
• Checklist
• At national level
• Training sessions
• Seminars to exchange experience among bodies in
  charge of FLC
• Handbook, manuals, official notes
• Websites

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• Thank you for your attention!