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Technical Meeting 11.12.2009
Closure 2000-06:Winding-up declaration
and Commission procedures
Elina Hakonen-MeddingsDG REGIO J4
Technical Meeting on Closure 2000-2006, 11 December 2009European UnionCohesion Policy
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Commission procedures
1. WUD and Commission procedures (E. Hakonen-Meddings)- Experiences 1994-99- Legal requirements + guidance- Preparation- Content of WUD + report- Commission procedures for analysing WUD- Possible financial corrections
2. Reporting data on irregularities (L. Högnäs)
3. The planned audit approach (M. Schelfhout)
Technical Meeting on Closure 2000-2006, 11 December 2009• European Union• Cohesion Policy
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Experiences from 1994-99 closure• Lengthy process resulting in long delays in final
payment/closure
• Main problems with WUD– Insufficient coverage of sample checks – Checks not of sufficient quality – Insufficient information on spread, coverage and sampling method– High error rates not analysed– Irregularities/errors not treated satisfactorily– No quantification of impact of irregularities– No clear opinions given– Inconsistency between documents/conclusions– Final statements of expenditure changed after WUD– Delays in receiving additional information requested from MS– Key personnel changed
• Number of flat rate corrections applied
Technical Meeting on Closure 2000-2006, 11 December 2009• European Union• Cohesion Policy
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How to learn from past to ensure successful closure of 2000-06• Plan, prepare in time, sufficient resources• Coordinate with all relevant parties• Ensure continuity also after submission• Close/treat irregularities before closure• Be aware of riskier expenditure declared at the end
of the period and of large "replacements" of irregular expenditure
• Allow time for additional checks/work needed• Submit before deadline to avoid risk of
inadmissibility• Ensure consistency of documents/conclusions• Follow regulations and guidelines
Important: Last opportunity to ensure low error rates
Technical Meeting on Closure 2000-2006, 11 December 2009• European Union• Cohesion Policy
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Legal requirements and Guidance for WUD• Art. 38.1f) of Reg. 1260/1999, + Art. 32. 4 (final payment) • Art. 15-17 + Annex III of Regulation 438/2001 • Guidelines on closure of Assistance (2000-06) from the SF
(COM(2006)3424 of 1/08/2006) : 4.3, annex 2 • Guidance note on closure of INTERREG III programmes
2000-2006 (COCOF Ref. 2008 07/0078/02 ) • Register of Questions and Answers
http://ec.europa.eu/regional_policy/conferences/closure/qa_en.htm
• EC Internal: Manual of Procedures (checklists + standard notes)
• In preparation: Internal guidance for corrections to be applied at closure to ensure equal treatment and proportionality at closure
• Audit enquiry (EPM) for closure
Technical Meeting on Closure 2000-2006, 11 December 2009• European Union• Cohesion Policy
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Submission deadlines
• DG REGIO to receive 368 WUD for ERDF OPs• Submission deadlines for all three closure
documents (final report, final expenditure declaration and WUD): 15 months after final date for eligibility of expenditure (Art. 105.3 of Reg. 1083/2006)End of eligibility date Deadline for
submission of WUDNo of ERDF OPs
31.12.08/ 30.4.09 31.3.10/ 31.7.10 104
With extension to 30.6.09 30.9.10 246
With extension to 31.12.09 31.3.11 18
Technical Meeting on Closure 2000-2006, 11 December 2009• European Union• Cohesion Policy
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Preparatory work in MS
MA + IB: • Receive expenditure claims from
beneficiaries• Complete remaining issues for Art 4 checks• Compile final expenditure declaration for PA• Ensure audit trail• Ensure that all errors have been treated
satisfactorily and all recommendations followed
Technical Meeting on Closure 2000-2006, 11 December 2009• European Union• Cohesion Policy
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Preparatory work in MS
PA:• Prepare certificate of final expenditure• Satisfy itself that all errors have been
treated satisfactorily and all recommendations followed
• Request more information or do own verifications where necessary
• Summary table on irregularities
Technical Meeting on Closure 2000-2006, 11 December 2009• European Union• Cohesion Policy
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Preparatory work in MSBodies responsible for Art. 10 checks:• Complete final sample checks• Ensure sufficient coverage (5%, even spread over
period, mix of types and sizes of operations, all main IBs or beneficiaries)
• Identify systemic errors, carry out further checks to determine/quantify problem
• If error rate above 2%, take appropriate measures (corrections, or further checks to determine/quantify problem)
• Ensure that recommendations (own/EU/ECA) fully implemented
Technical Meeting on Closure 2000-2006, 11 December 2009• European Union• Cohesion Policy
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Work by independent body
• Analyse quality of system audits• Analyse quality of sample checks• Analyse sufficiency of coverage • Analyse frequency of errors, systemic
character, error rate• Analyse sufficiency of treatment of
irregularities/ errors (by national auditors/EU/ECA)
• Analyse closure procedures by MA and PA• Additional work if necessary
Technical Meeting on Closure 2000-2006, 11 December 2009• European Union• Cohesion Policy
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Winding-up declaration
• Provided for each programme (also for Interreg)– Multi-fund OPs may submit WUD by fund– Very exceptional cases multiple declaration may be
accepted
• An indicative model of the WUD in Annex III to Regulation 438/2001. (Prior agreement should be sought from EC if model not followed)
• That declaration should be prepared in accordance with Article 38(1)(f) of Regulation 1260/1999 and Chapter V of Regulation 438/2001.
• Specific guidance on the preparation and contents of the winding-up declaration in Annex 2 to closure guidelines (and Interreg closure guidance).
Technical Meeting on Closure 2000-2006, 11 December 2009• European Union• Cohesion Policy
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Winding-up declaration• Summarises conclusions of the checks carried out during all
previous years and assesses validity of the application for payment of the final balance as well as the legality and regularity of the transactions concerned (Art 38(1)(f) of 1260/1999)
• Includes a summary on all irregularities: MS requested to attach a table in an electronic format with the list of irregularity cases to their WUD, clarifying amounts recovered, waiting for recovery or irrecoverable (Art 8 of 438/2001)
• Is accompanied by a report which shall include all relevant information to justify the declaration including a summary of the findings of all checks carried out by national and Community bodies to which the independent body has had access. (Art. 16 of 438/2001)
• MS may attach their own opinion to WUD if they consider it necessary (Art 38(1)(f) of 1260/1999)
Technical Meeting on Closure 2000-2006, 11 December 2009• European Union• Cohesion Policy
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Content of WUDModel of Annex III to Reg. 438/2001: • Introduction: person and intervention• Scope of the examination
- Report attached (details on procedure, info used, conclusions of checks, i.e. all relevant information to justify the declaration)
• Observations– limitations – Frequency of errors/irregularities, systemic nature,
satisfactory treatment (Table on irregularities)
• Conclusion: unqualified, qualified, no opinion• Date and signature
Technical Meeting on Closure 2000-2006, 11 December 2009• European Union• Cohesion Policy
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WUD Report (closure guidelines annex 2)
• Details of independent body• Details of programme• Summary of controls carried out under
Article 10• Work undertaken by independent body• Limitations to the scope of examination • Treatment of errors and irregularities• Frequency of errors and irregularities
Technical Meeting on Closure 2000-2006, 11 December 2009• European Union• Cohesion Policy
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Commission procedure for WUD
No regulatory deadline for assessment of WUD. To be realised within a "reasonable period".
• Reminder to MS sent 2 months prior to the submission deadline (final eligibility date + 13 months)
• Non-submission or late submission of the WUD (final eligibility date + 15 months + 14 calendar days): If WUD is not received, closure will be carried out on the basis of certified statement of final expenditure and final report + automatic decommitment of unpaid balance + correction.
Technical Meeting on Closure 2000-2006, 11 December 2009• European Union• Cohesion Policy
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Admissibility Check of WUD
• Internal delay of 5 days• Checklist (is WUD signed, dated and prepared by WUB,
is there an opinion, a report, a table of irregularities, does it follow model?)
• MS will be informed if further information is to be provided or if WUD is not admissible
• OLAF is consulted on all fraud cases and all irregularity cases are checked in the OLAF database.
Technical Meeting on Closure 2000-2006, 11 December 2009• European Union• Cohesion Policy
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Quality Checks of WUD
• Analysis based on a checklist
• Results of all previous audit work carried out and EC assessment of residual risk taken into account
• Internal delay 30-120 days in DG REGIO
• Inter-service consultation on draft conclusions for multi-fund programmes or when joint authorities with other funds
Technical Meeting on Closure 2000-2006, 11 December 2009• European Union• Cohesion Policy
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Checklist
Sections:• Basic requirements• Art. 10 System audits• Art. 10 Sample checks• Work carried out by WUB• Audits by other national or Community bodies• Frequency of errors and irregularities• Observations and conclusion of WUD
Technical Meeting on Closure 2000-2006, 11 December 2009• European Union• Cohesion Policy
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Checklist
Overall conclusion of the auditor:– Accept WUD without additional action needed– Accept WUD under condition that a deduction to
payment claim is made (correction)– Interruption requesting for information or additional
audit work from MS (Art 17 of Reg. 438/2001) – Interruption due to additional audit work by EC (EPM
for closure)
Assessment of residual risk of WUD and residual risk estimated on the basis of all audit work done over the programming period => Is further EC audit on-the-spot necessary
Technical Meeting on Closure 2000-2006, 11 December 2009• European Union• Cohesion Policy
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Financial corrections may be applied when:
• Lack of submission or late submission of WUD -> Automatic de-commitment of balance and a financial correction
• WUD not submitted and signed by the designated person or department: WUD considered non-admissible -> non-submission
• Minimum percentage of obligatory sample checks not achieved
• Insufficient quality of controls: cannot be included in 5% -> above case
• Non-representativeness of sample• High level of irregularities • Insufficient treatment of errors/irregularities
Technical Meeting on Closure 2000-2006, 11 December 2009• European Union• Cohesion Policy
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Financial corrections may be applied when:
• WUD does not come to a conclusion about validity of final balance application or legality and regularity of transactions
• WUB does not conclude on frequency of irregularities or does not estimate extent of the problem and financial impact
• WUB issues reservations related to systemic weaknesses but does not estimate the financial impact of these weaknesses, or if it makes a general reservation or declares itself incapable of giving an opinion
• Insufficient quality of other information in WUD or report -> Additional information requested to MS. If not submitted a correction
Technical Meeting on Closure 2000-2006, 11 December 2009• European Union• Cohesion Policy
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Thank you for your attention.
Questions, comments?
Technical Meeting on Closure 2000-2006, 11 December 2009• European Union• Cohesion Policy