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Revīzijas iestādes jaunā loma – rezultātu un izpildes rādītāju audits Olga Guza, vecākā eksperte, ES fondu revīzijas departaments, Finanšu ministrija. Content of the presentation. Output and result indicators Goals at different stages and performance reserve

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  1. Revīzijas iestādes jaunā loma – rezultātu un izpildes rādītāju auditsOlga Guza, vecākā eksperte, ES fondu revīzijas departaments, Finanšu ministrija

  2. Content of the presentation • Output and result indicators • Goals at different stages and performance reserve • Auditing approaches and requirements • Available data, IT system, reporting and information from beneficiaries • Timetable and extent of auditing

  3. Output and result indicators • Indicators and corresponding targets established in order to assess progress in programme implementation aimed at achievement of objectives as the basis for: • monitoring • evaluation • review of performance • Those indicators include: • output indicators relating to the operations supported • result indicators relating to the priority concerned • Defined in the programme

  4. Indicators in the programme

  5. Structure of indicators 121 result indicators in OP of Latvia 135 output indicators in OP of Latvia

  6. Example

  7. Performance review • EC in cooperation with MS, shall undertake a review of the performance of the programmes in each MS in 2019 (the 'performance review') • with a view to monitoring progress towards the objectives and targets set for each priority over the course of the 2014 - 2020 programming period • to ensure that the budget of the Union is not used in a wasteful or inefficient way • Performance review will be carried out with reference to the performance framework set out in the respective programme

  8. Performance framework • Performance framework consists of up to four different types of indicators: financial, output and result indicators and key implementation steps 121 → 0 135 → 31

  9. Performance framework in the OP Performance framework Performance framework • Progress is reviewed twice during the programming period against the milestones and targets set in the programme.

  10. Goals at different stages 2018: • Milestones are intermediate targets, directly linked to the achievement of the specific objective of a priority • The milestones are intermediate targets set for indicators to be achieved by 31 December2018 and to be assessed in 2019 2023: • Targets • The targets themselves are set to be achieved by 31December 2023 and their accomplishment will be assessed at the closure of theprogramme period in 2025

  11. Performance reserve • 6 % of ERDF, ESF and Cohesion Fund under the Investment for Growth and Jobs goal, EAFRD and to measures financed under shared management in accordance with the EMFF Regulation • Established in the Partnership Agreement and programmes • Established inorder to facilitate the focus on performance and attainment of the objectives of the Union strategy for smart, sustainable and inclusive growth

  12. Allocation of Performance reserve

  13. Consequences of poor performance (after Performance review) At the end of 2018: If 2 indicators, any of indicators < 65% of milestone value If > 2 indicators, any 2 of indicators < 65% of milestone value

  14. Consequences of poor performance (after EC examination of the final implementation report) At the end of 2023: If 2 indicators, any of indicators < 65% of target value If > 2 indicators, any 2 of indicators < 65% of target value

  15. Auditing approaches and requirements – Designation procedure • 2 ways of carrying out audit work: • Full audit work in accordance with EC guidance and checklist • But if management and control system is essentially the same as for the 2007-13 programming period + audit evidence of its effective functioning during that period is present → conclusion that the relevant criteria are fulfilled without carrying out additional audit work • In both cases - for the new criteria (including procedures to ensure reliability of data on indicators/milestones/progress of the OP in achieving its objectives), audit work will have to be performed in order to assess the compliance in these areas

  16. During designation procedure • Check whether following procedures are in place and address following issues?

  17. Auditing approaches and requirements – system audits and audits of operations • Wording of the Opinion: • «In my opinion, and based on the audit work performed … the management and control system put in place function properly» • «The audit work carried out does not put in doubt the assertions made in the management declaration» • Wording of the Management declaration – «Furthermore, I/we confirm the reliability of data relating to indicators, milestones and the progress of the operational programme required under article 125(2)(a) of Regulation (EU) No 1303/2013»

  18. System audits • The audit scope includeverification that the relevant authorities properly ensure reliability of data relating to: • output indicators • milestones (financial and output indicators, key implementation steps) • progress of the programme in achieving its objectives • AuditAuthority should assess: • whether effective controls are implemented over collecting, summarizing and reporting the related data • whether the reported compiled figures reconcile with the source data

  19. Relevant key requirements – Key requirement 2 • AC 2.1:The MA drew up, for approval by the Monitoring Committee, appropriate selection procedures and criteriathatensure the contribution of operations to the achievement of the specific objectives and results of the relevant priority • AC 2.4:All applications/projects are evaluated in accordance with the applicable criteria

  20. Relevant key requirements – Key requirement 4 • AC 4.1: The management verifications includeAdministrative verifications andOn-the-spot verifications of operations • AC 4.3: Written procedures and comprehensive checklists should exist to be used for the management verifications in order to detect any material misstatements

  21. Relevant key requirements – Key requirement 5 • AC 5.1: The detailed supporting documents for operations are kept at the appropriate management level (including progress in achieving outputs and results and monitoring reports) • The audit trail shall allow data in relation to output indicators for the operation to be reconciled with targets and reported data and result for the programme

  22. Relevant key requirements – Key requirement 6 • AC 6.1: The existence of IT system capable to collect, record and store dataon each operation, including data relating to indicators and milestones and on the progress of the programme in achieving its objectives • AC 6.2: Adequate procedures are in place to allow for the aggregation of the data where this is necessary for the purposes of evaluation, audits, as well as for payment applications and accounts, annual summaries, annual implementation and final reports, including reports on financial data, submitted to the Commission

  23. Thematic audits • System audits relating to key requirements targeted to specific thematic areas should be indicated in the Audit Strategy, which may include: • Thematic audit on the reliability of data relating to indicators and milestones and on the progress of the operational programme in achieving its objectives provided by the managing authority to the monitoring committee • Thematic audit on the functioning and security of IT systems

  24. Audits of operations • The audits of operations should cover: • that for expenditure declared to EC outputs and results underpinning payments to the beneficiary have been delivered • participant data or other records related to outputs and results are consistent with the information submitted to EC • required supporting documentation demonstrates an adequate audit trail

  25. Available data • Ex-ante evaluation • IT system • Information from beneficiaries • Reports at National level (including information submitted by the managing authority to the monitoring committee) • Annual Implementation Reports

  26. Ex-ante evaluation • Information on appraisal of: • the relevance and clarity of the proposed programme indicators • how the expected outputs will contribute to results • whether the quantified target values for indicators are realistic, having regard to the support from the Funds • the suitability of the procedures for monitoring the programme and for collecting the data necessary to carry out evaluations • the suitability of the milestones selected for the performance framework

  27. IT system Data on indicators: • common and programme specific output indicators (including measurement unit, target value, achievement level for each calendar year) • common and programme specific result indicators (including measurement unit, baseline value, target value, achievement level for each calendar year) Member States shall ensure that no later than 31 December 2015, all exchanges of information between beneficiaries and authoritiescan be carried out by means of electronic data exchange systems

  28. National reports (Latvia’s example) Participate in on-the-spot checks Carries out administrative and on-the-spot checks Reports Enters data to MIS on result indicators Enters data to MIS Provides info to Monitoring Committee MIS Prepares annual plan on achievement of outputs and results (milestones and targets) Monitors achievement of output and result indicators at the level of specific objectives Monitors achievement of output and result indicators at the level of projects Reports to MA Reports to MA Prepares AIR

  29. Annual Implementation Reports

  30. Extent of auditing ISA 330 • Controls that have not changed from previous audits: The auditor’s can make decision on whether to rely on audit evidence obtained in previous audits for controls that: • (a) have not changed since they were last tested; and • (b) are not controls that mitigate a significant risk, But the auditor shall test the controls at least once in every third year, and shall test some controls each year to avoid the possibility of testing all the controls on which the auditor intends to rely in a single audit period with no testing of controls in the subsequent two audit periods

  31. Timetable of auditing – multiannual (example)

  32. Timetable of auditing – one year

  33. Conclusions • Auditing approach should follow a common audit methodology for the Funds • Key focus on data related with financial and output indicators • Include specific information in the Audit Strategy • Audit during: • designation process • system audits (including thematic audits, IT audits) • audit of operations • Part of the audit opinion of the audit authorities

  34. Thank you for your attention! Olga Guza (+371) 6 708 3864 olga.guza@fm.gov.lv

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