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Matthoula Triantafyllou Head of Special Service of Institutional Support

Management & Control procedures for state aid operations in Operational Programmes 2007-2013 Case study: Greece Ljubljana, 12-13 October 2009. Matthoula Triantafyllou Head of Special Service of Institutional Support National Coordination Authority Ministry of Economy and Finance, Greece.

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Matthoula Triantafyllou Head of Special Service of Institutional Support

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  1. Management & Control procedures for state aidoperations in Operational Programmes 2007-2013Case study: GreeceLjubljana, 12-13 October 2009 Matthoula TriantafyllouHead of Special Service of Institutional Support National Coordination Authority Ministry of Economy and Finance, Greece Ljubljana, 12-13 October 2009

  2. Outline • Specific characteristics of the co-financed state aid operations in OPs 2007-2013 • Provisions designed for the management & control proceduresof the state aid operations, implemented by the IBs. • Provisions designed to offer assurance to the Managing Authority that the tasks of the IBs have been properly carried out. • Guidance and templates issued • Conclusions Ljubljana, 12-13 October 2009

  3. Specific characteristics of the state aid operations in OPs 2007-2013 (I) Intermediate bodies responsible for the management of state aid operations: • public administration bodies which have the responsibility to select the recipients, to allocate the individual grants according to national law provisions • private bodies which have been selected through open call for proposals (e.g. financial institutions) Different categories of state aid actions: • aid schemes covered by the block exception and concern SMEs investment and employment aid, aid for research and development and innovation in the form of non-repayable aid, loans, guarantees, interest subsidies or/and state aid through financial engineering instruments • de minimis support • measures which require notification Ljubljana, 12-13 October 2009

  4. Specific characteristicsof the state aid operations in OPs 2007-2013 (II) The Ministry of Economy and Finance / National Coordination Authority has: • the overall responsibility for the design of the common Management & Control System of the OPs • and the coordination of the State Aid Schemes. Within the common Management & Control System of OPs 2007-2013 specific provisions for state aid operations are forseen. Ljubljana, 12-13 October 2009

  5. Criteria used to assess the effective functioning of systems (I) Designing the management & control procedures, we took into account the assessment criteria for each key requirement, which are used when the system is audited. The key requirements include: • Definitions of functions between and within MA / IB • Adequate procedures for the selection of projects • Adequate information and guidance to beneficiaries • Adequate Management Verifications • Adequate audit trail • Reliable accounting, and financial reporting system • Necessary preventive and corrective actions Ljubljana, 12-13 October 2009

  6. criteria used to assess the effective functioning of systems (II) For each key requirement: • specific provisions concerning the IB responsibilities for the state aid operations have been designed, • guidance and templates have been issued for the proper implementation Ljubljana, 12-13 October 2009

  7. Definition, allocation and separation of functionsbetween the MA /IBs(I) A formal document is issued (ministerial decision or contract) which provides: • the tasks delegated by the MA to the IB: • selection of operations, • verifications procedures, • requirements for adequate audit trail. • the obligations of the IB to report to the MA • maintenance of the documents Ljubljana, 12-13 October 2009

  8. Definition, allocation and separation of functionswithin the IBs(II) In order to avoid risks arising from the fact that the IB is responsible for the selection and approval of operations and for the management verifications, adequate segregation of duties should be ensured between these two functions, either by: • ensuring different units within the IB are responsible for each function, or • ensuring different persons carry out the specific procedures. Ljubljana, 12-13 October 2009

  9. Adequate procedures for the selection of operations (I) The IB organises the selection procedure and ensures that the operations are selected according to the applicable criteria of the OP and that they comply with EC state aid rules: • experts from the public or private sector assess the proposals. The selection criteria may vary depending upon the type of the operations but they include inter alia: • the assessment of the financial status of the beneficiary • the technical and financial assessment of the proposal • the sustainability of the investment project • that there is no overlapping of aid from different sources which could breach the de minimis rule or the applicable rules on the cumulation of aid Ljubljana, 12-13 October 2009

  10. Adequate procedures for the selection of operations (II) • a specific committee confirms the assessment result and proposes the approval or rejection of the proposal • an approval decision is communicated to the beneficiary/or a contract is signed with beneficiary Depending on the type of state aid action: • proposals are assessed electronically based on numerical selection criteria and • approval is issued based on the assessment result. • The approval decisions are published on the website (in some cases they are also published in the Government Gazette) Ljubljana, 12-13 October 2009

  11. Adequate information and guidance to beneficiaries (I) The IB is responsible to inform the beneficiaries on the specific conditions concerning: • the products or services to be delivered under the operation • the financing plan • the time limit for implementation • the financial and other information to be kept and communicated. To this purpose: Before the approval decision is taken • the IB is responsible to operate info points or/and helpdesk/ websites, to organise seminars, workshops, to issue leaflets etc to ensure that the beneficiaries are informed Ljubljana, 12-13 October 2009

  12. Adequate information and guidance to beneficiaries (II) After the approval decision is taken, the beneficiary’s obligations are provided in the approval decision: • information and publicity measures • requirements concerning separate accounting systems • availability of documents • obligations to avoid double financing for the project • acceptance of auditors Ljubljana, 12-13 October 2009

  13. Adequate management verifications (I) The IB has the responsibility to carry out management verifications: • The IB verifies on the spot each application for reimbursement by the beneficiary. In specific cases the applications should be subject to administrative verifications, e.g.: • advance payments to beneficiaries. The IB verifies the bank guarantee of an equivalent effect • specific types of finance for which the reality cannot be verified on the spot (e.g. guarantees, loans) Ljubljana, 12-13 October 2009

  14. Adequate management verifications (II) • The IB verifies on the spot : • that the delivery of the products/services is in accordance with the terms of the approval decision (examines the physical and technical elements of the project) • that the expenditure complies with the specific eligibility criteria (aid rules and national rules) • that the expenditure is realised within the eligible period and after the submission of the application for aid • the correct registration of the source documents in the beneficiary’s accounting books • the compliance with publicity rules • that there is no double financing of the aid, which could breach the applicable rules on the cumulation of aid • The IB is responsible to grant the aid : • payments to beneficiaries are made based on the verifications results. Ljubljana, 12-13 October 2009

  15. Adequate audit trail • The IB keeps detailed data, concerning: • the detailed accounting records and supporting documents for each payment of the public contribution to the beneficiary • the verification that the selection criteria have been applied (beneficiary proposal, justified assessment reports of the project, technical specifications and financial plan, documents concerning the approval decision) • progress reports and verifications and audits reports carried out Ljubljana, 12-13 October 2009

  16. Reliable accounting system Detailed accounting records of the operations and data on the implementation (progress reports and reports on verifications and audits carried out etc) are kept in computerised form in the monitoring system of the IB. The IB is responsible to transfer data in the central Monitoring Information System to which the Certifying Authority has full access. In addition to the aforementioned, data also include: • the Regulation on which the state aid scheme is based / or the notification no and the approval of the Commission • the category of the state aid action • the title of the project, the technical description and the monitoring indicators • the name and the VAT Registration Number of the enterprise and the code of the economic activity and the form of finance Ljubljana, 12-13 October 2009

  17. Necessary preventive and corrective actions (I) Preventive actions by the Managing Authority • For each call for application, it verifies: • the compatibility with the conditions and the objectives of the Operational Programme • the compatibility with the EC rules on state aid • that the selection criteria are in accordance with the Monitoring Committee’s decisions • the provision of advertising and information points • that the selection and verification procedures are compatible with the terms of the Programme and the MCS • Structural Funds’ contribution Ljubljana, 12-13 October 2009

  18. Necessary preventive and corrective actions (II) Preventive and corrective actions by the Managing Authority In case the IB is a public body, the MA monitors: • the detailed data entered in the cMIS (accounting records of operations and the data of implementation) • annual/semi annual reports and • the audit reports In case the IB is a private body, the MA also: • may carry out on the spot verifications at the level of the beneficiary, taking into account the level of risk for the type of beneficiaries and the operations concerned Ljubljana, 12-13 October 2009

  19. Necessary preventive and corrective actions (III) Preventive actions by the National Coordination Authority (MEF): • provides periodic training to IB and MA staff • runs a helpdesk for MAs and IBs • monitors the audit reports and the implementation of the system through reports provided by the cMIS Ljubljana, 12-13 October 2009

  20. Necessary preventive and corrective actions (VI) Corrective actions by the IB: • When an irregularity is detected, the IB is responsible to withdraw the specific amount from the cMIS and to inform the Certifying Authority and the Managing Authority. • After the completion of the objection procedure between the IB and the beneficiary, the withdrawal is finalised. • The IB (public body granting the aid) is responsible to recover the public expenditure from the beneficiary, with interest from the date the subsidy ends until the date of the actual payment. Ljubljana, 12-13 October 2009

  21. Necessary preventive and corrective actions (V) Corrective actions by the National Coordination Authority: Depending on the audit findings or on other problems arising during the management and implementation of state aid actions, the National Coordination Authority • issues circulars, guidance or takes any other necessary measures to avoid systemic errors Ljubljana, 12-13 October 2009

  22. Templates, guidance To support the management procedures, the following have been issued: • a manual for all the IBs with basic guidelines, specified depending on the type of the state aid operation • standard documents including: • the ministerial decision for the delegation of management tasks to the IB • the call for applications kept in the cMIS (specific information for state aid) • the approval decision which is kept in the cMCS (specific information for the recipients of state aid) • the data to be kept by MA and IB to ensure audit trail • the financial and progress report kept in the cMIS • an indicative detail questionnaire for verifications on the spot of investment projects which is specified depending on the type of the state aid • an indicative verification report • the IB’s certification report to Certifying Authority Ljubljana, 12-13 October 2009

  23. Conclusion • Designing the management procedures for the state aid operations, we took into consideration the Regulations of the Structural Funds and the rules on state aid. • The proper implementation of the management & control procedures shall be verified by the auditors. Ljubljana, 12-13 October 2009

  24. Thank you for your attention! Email:mtriantafilou@mnec.gr Tel: +30-2103742014 Ljubljana, 12-13 October 2009

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