Management and control systems for assistance granted under the Structural Funds

The purpose of the Regulation is to ensure that Member States' management and control systems for assistance granted under the Structural Funds operate smoothly. This will in turn ensure uniform quality when certifying expenditure for which payments from the Structural Funds are requested.

ACT

Commission Regulation (EC) No 438/2001 of 2 March 2001 laying down detailed rules for the implementation of Council Regulation (EC) No 1260/1999 as regards the management and control systems for assistance granted under the Structural Funds.

SUMMARY

The Commission is responsible for implementing the budget in accordance with the principles of sound financial management.

Decentralised management

The general Regulation on the Structural Funds makes the management of assistance in the period 2000-06 more decentralised. This requires improved provision for inspection, which is a matter for the Member States. The Commission will ensure that the systems set up operate efficiently and smoothly.

The Regulation contains provisions on the following structures at national, regional or local level:

• the managing authorities (the public or private authorities or bodies responsible for managing assistance);
• the paying authorities (the public or private authorities or bodies responsible for drawing up and submitting applications for payments and receiving them from the Commission);
• the intermediate bodies (the public or private bodies or departments acting on behalf of a managing or paying authority vis-à-vis final beneficiaries or bodies and firms implementing actual operations).

Management and control systems

Each Member State must provide the managing and paying authorities and intermediate bodies with guidelines on the organisation of management and control systems. These systems are to include the definition, breakdown and separation of functions within the organisation concerned and procedures permitting checks on:

• the provision of the products and services part-financed;
• the genuine nature of the expenditure declared;
• the expenditure's compliance with national and Community rules on expenditure eligibility, public procurement, State aid, environmental protection and equal opportunities.

Member States must send these guidelines to the Commission, which will check that all the provisions comply with the Community legislation in force. Member States also inform the Commission of the procedures and measures for

• receiving, verifying and validating applications for the reimbursement of expenditure;
• authorising, implementing and accounting for payments to beneficiaries;
• auditing management and inspection systems.

Audit

The management and inspection systems in the Member States must generate an audit, which is considered sufficient when it permits:

• reconciliation of the summary accounts certified and sent to the Commission with the individual statements of expenditure and the supporting documents;
• inspection of the allocation and transfer of the available Community and national funds;
• provision of information such as the accounting records of expenditure actually carried out by the final beneficiaries for each operation financed.

Each managing authority is to keep all accounting documents available for the Commission for three years following payment of the balance for an item of assistance.

The managing and paying authorities must keep accounts of the amounts to be recovered from payments of Community assistance already made and ensure the rapid recovery of the amounts in question.

Certification of expenditure

A person or department in the paying authority, independent of all departments authorising payments, is to draw up intermediate and final certificates of declaration of expenditure.

Declarations of expenditure are to cover only expenditure:

• actually incurred during the period of eligibility, corresponding to expenditure paid by the final beneficiaries and supported by receipted invoices;
• concerning operations selected for part-financing under the assistance in question;
• concerning measures for which the Commission has formally approved any State aid.

Random inspection of operations

Member States must organise inspections of operations to check that the management and inspection systems are operating properly.

A representative sample of operations approved should take account of the need to inspect operations of different kinds and scales and of the risk factors identified. The main intermediate bodies and final beneficiaries are to be inspected at least once over the whole period.

The Member States must check:

• the effective implementation of the management and inspection systems and their sound operation;
• that the accounting and supporting documents correspond;
• that the audit is adequate;
• that the nature and date of expenditure on an appropriate number of individual items comply with Community requirements;
• that the actual purpose of the operation corresponds to the objectives of the application for Community part-finance;
• compliance with Community rules and policies (competition, public procurement, environment, equal opportunities) and in particular the rates of Structural Funds contributions depending on the place and nature of the assistance;
• the actual national and/or regional part-financing provided.

Declaration on the closure of an item of assistance

The person or department responsible for the declaration closing an item of assistance must base their decision on an examination of the management and inspection systems.

If there are shortcoming preventing endorsement of the application for payment of the balance and the final certificate of expenditure, the declaration should estimate the extent of the problem and its financial impact.

Form and content of the accounting information

As far as possible, the accounting archives are to be kept in the form of computer records for use in documentary and on-the-spot inspections. The Commission will agree with each Member State the content of the records, their method of transmission and the time required to establish computer systems. It will ensure the confidentiality and security of the information.

Member States must send it their archives within 10 working days of receiving a written request from the Commission.

RELATED ACTS

Communication of 6 September 2004 from the Commission to the European Parliament and the Council entitled "The respective responsibilities of the Member States and the Commission in the shared management of the Structural Funds and the Cohesion FundCurrent situation and outlook for the new programming period after 2006" [COM (2004) 580 - Not published in the Official Journal].

Commission Communication of 25 April 2003 on the simplification, clarification, coordination and flexible management of the structural policies 2000-06 [C(2003) 1255 - Not published in the Official Journal].

Commission Regulation (EC) No 448/2001 of 2 March 2001 laying down detailed rules for the implementation of Council Regulation (EC) No 1260/1999 as regards the procedure for making financial corrections to assistance granted under the Structural Funds [OJ L 64, 6.3.2001]. This Regulation determines the procedure for implementing the financial corrections applicable to assistance granted under the Structural Funds and carried out by either the Member States or the Commission.

Last updated: 20.12.2005