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Activity of the conciliation Body

Activity of the conciliation Body. Daniel PERRIN Chairman of the conciliation Body. The mission of the conciliation Body (1/2). Reconcile the views of a Member State and the Commission’s services regarding the conclusions to be drawn from a conformity audit Produce a report :

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Activity of the conciliation Body

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  1. Activity of the conciliation Body Daniel PERRIN Chairman of the conciliation Body

  2. The mission of the conciliation Body (1/2) • Reconcile the views of a Member State and the Commission’s services regarding the conclusions to be drawn from a conformity audit • Produce a report : • Expressing an independent opinion, based on the financial correction proposed • Measuring the strength of the findings made and • Providing assurances to the Member State on the analysis and the comprehensive review of management procedures and controls implemented by the latter

  3. The mission of the conciliation Body(2/2) • Contribute to : • improving the understanding between the Member States ans the Commission • The « shared management » of the CAP • Assist decision-making of the College of Commissionners concerning the financial correction • Eventually reduce the number of the appeals before the Court of First Instance (CPI) and the European Court of Justice

  4. The cases dealt with by the Body between March 2008 and March 2010 and the Members State concerned • The Body adopted 69 reports in two years (an average of 35 reports per year) • The total proposed corrections examined in this context is in the order of about 1 550 M€ • 22 Member States were concerned by reports • Of which 1 Member State concerned by 14 reports and 1 par 8 reports • 5 Member States by a number of reports between 4 and 6, and • 15 Member States by a number of reports between 1 and 3

  5. Sectors concerned • Aids related to surface : 38 cases, including : • Direct aids, IACS 12 cases • Cross compliance 10 cases • Rural development 7 cases • Animal premiums 5 cases • SAPS 4 cas • Financial audit (late payments/budget ceiling) and irregularities 8 cases • Market measures : 23 cases, including : • Fruits and vegetables (recognition and operational programs ) 5 cas • Fruits ans vegetables (processing) 3 cases • Export refunds 3 cases • Dairy 3 cases • Aid to the most deprived 2 cases • Olive oil, cotton, fodder, raisins , tobaco, potato starch and promotion, 1 case each Répartition des cas relevant des aides à la surface Répartition des cas relevant des aides de marché

  6. Corrections after conciliation • Conformity decisions number 13 (May 2003) to 32 (Avril 2010) • Proposal maintained 93 (54,70%) • Proposal reduced > 10% 48 (28,23%) • Proposal reduced < 10% 23 (13,52%) • Proposal withdrawn 6 (3,52%) • Décisions de conformité numéros 27 (avril 2008) à 32 (avril 2010) • Proposal maintained 26 (46,42%) • Proposal reduced >10% 18 (32,14%) • Proposal reduced < 10% 12 (21,42%) • Proposal withdrawn 0 (0%) Décisions de la Commission prises entre mai 2003 et avril 2010 Décisions de la Commission prises entre avril 2008 et avril 2010

  7. Some observations from expérience (1/7) • The Body has no jurisdiction and thus cannot comment on the interpretation of Community legislation • However, the Body strives to obtain full assurance that all arguments of the Member State and possibly its own observations are rewieved and considered before the final decision concerning the financial correction

  8. Some observations from expérience (2/7) • The bilateral meeting is an essential phase of the conformity procedure: • All administrative information, technical and legal relating to the audit can be treated • A clear focus on the motives and the level of the proposed correction should at this stage be given to the Member State • A pro-active approach should be adopted by the participants • A summary of the main conclusions of the meeting should be agreed between the participants at its end • The conciliation procedure cannot be understood to be a second chance at a bilateral meeting or replace the bilateral meeting

  9. Some observations from expérience (3/7) • The Body reserves the right to make observations that were not or were only partially developed by one of two parties • The tendency to use flat-rate corrections could be offset by increased efforts to quantify the financial corrections

  10. Some observations from expérience (4/7) • Arguments, if any, may lead the Commission to adapt its proposal by reducing the basis of the financial correction: • Some expenses or sectors concerned by a correction proposal pose less financial risk than others • The seriousness of deficiencies is not the same for all expenses or sectors concerned by the proposal (e.g. in the case of alternative controls) • Specific regional situations sometimes allow a differentiation of risk • The action of the Member State is based on a national program approved by the Commission

  11. Some observations from expérience (5/7) • Some arguments may lead the Commission to adapt its proposal by reducing the level of the financial correction (1/2): • Presentation of evidence-based information on other controls whose documented results suggest a reduction of risk • Presentation of evidence-based information (technical) showing that the financial risk is lower than originally estimated or non-existent

  12. Some observations from expérience (6/7) • Some situations encountered during the conciliation do not result in an adaptation of the proposed financial correction: • Lack of documented evidence of effective implementation of the control system put in place • No detailed and documented justification of information given at the hearing • Results of national controls on the quality of controls laid down simply copying these controls

  13. Some observations from expérience (7/7) • Some situations encountered during the conciliation do not result in an adaptation of the proposal (2 / 2): • Mitigating factors already taken into account when notified of the proposed correction • The existence of mitigating circumstances if the proposal has only a correction rate of 2%; • The proposed alternative controls have not been approved ex ante by the Commission services • Appeal concerning legitimate expectations as applied to a situation previously unaudited; • Appeal concerning some ambiguities in the texts; • Breach of a position established by the Court of Justice • Failures reported that were remedied but after the period audited

  14. Conclusion • If the conciliation procedure rarely leads to a truly shared conciliation, the Body: • plays an important role in terms of transparency, • acts as a kind of quality control for procedures implemented in a conformity audit, • while ensuring that use of Community funds is in compliance with legislation

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