GUIDANCE DOCUMENT ON THE FUNCTIONS OF THE CERTIFYING AUTHORITY

1. GUIDANCE DOCUMENT ON THE FUNCTIONS OF THE CERTIFYING AUTHORITY for the 2007 – 2013 programming period Recoveries and Withdrawals Laurent SENS, European Commission, DG Employment, Social Affairs & Equal opportunities

2. General objective to ensure the correct functioning of the multiannual management system. • Strategic importance of recoveries and withdrawals given the high error rate detected in Structural Funds. • Ensure that irregular expenditure is detected and excluded from co-financing by the EU budget. • Supervisory role of the Commission: ensure a reliable system of monitoring the process of financial corrections due to the identification of irregularities. Member States reporting will be reflected in the Commission’s reporting to the European Parliament Recoveries and Withdrawals Their importance

3. Legal basis • Definition of withdrawals and recoveries • The responsibilities of the Certifying Authority on withdrawals and recoveries • Reporting responsibility: Annual statement (annex XI of Regulation 1828/2006) • Good practice Recoveries and Withdrawals The presentation

4. LEGAL BASIS • Article 61 (f) of Regulation 1083/2006 – Functions of the Certifying Authority “ f) Keeping an account of amounts recoverable and of amounts withdrawn following cancellation of all or part of the contribution for an operation. Amounts recovered shall be repaid to the general budget of the European Union prior to the closure of the operational programme by deducting them from the next statement of expenditure.” Recoveries and Withdrawals Legal basis

5. Article 20(2) Documents submitted by the Certifying Authority and Annex XI of Regulation 1828/2006 “ 2. By 31 March each year as from 2008, the certifying authority shall send … a statement, in the format in Annex XI, identifying for each priority axis of the operational programme: a) the amounts withdrawn …; b) the amounts recovered …; c) a statement of amounts to be recovered ….” • Point 4.5 recoveries of Annex XII Description of Management and control systems of Regulation 1828/2006 Recoveries and Withdrawals Legal basis

6. When identifying an irregularity the MS has two means of proceeding with the financial correction either by: 1) Recovering the unduly paid amount from the beneficiary, the irregular expenditure is kept in the programme pending the outcome of proceedings to recover the unduly amount paid from the beneficiaries => Recovery at the MS level before the deduction from the statement of expenditure sent to the Commission. Recoveries and Withdrawals Definitions

7. … OR by: 2) Withdrawing the irregular expenditure from the funding: The irregular expenditure is immediately removed from the programme (independently of the recovery procedure) by deduction in the next statement of expenditure It is expected that the MS will follow-up recovery at the beneficiary level. The debtors ledger should keep records on these actions as well. • Recovery at the MS level after the deduction from the statement of expenditure sent to the Commission. Two similar methods: difference in the timing of the deduction from the statement of expenditure: before or after the recovery. Recoveries and Withdrawals Definitions (2)

8. Withdrawals and Recoveries are a responsibility of the Certifying Authority(2000-2006 responsibility less clear: Managing authority or Paying authority) 1- Keeping records The Certifying Authority should keep records and an audit trail on these amounts for reconciliation purposes. 2- Repayment to the Commission Any recovered amount should be deducted from the next statement of expenditure and at the latest at closure of the programme Recoveries and Withdrawals Responsibility of the Certifying Authority

9. Responsibility of the Certifying Authority: 3- Reporting Annual statement by 31st of March on recoveries, withdrawals and pending recoveries, to be sent to the Commission services through SFC2007.  Recommendation: All procedures concerning recoveries and withdrawals should be set out in a manual. Recoveries and Withdrawals Responsibility of the Certifying Authority

10. Information to be covered by the annual statement due on the 31st March: • Amounts withdrawn in statements of expenditure in the preceding year • Amounts recovered and deducted in statements of expenditure in the preceding year Recoveries and Withdrawals Annual statement Annex XI

11. Information to be covered by the annual statement due on the 31st March: 3. Amounts of pending recoveries at the end of the preceding year Recoveries and Withdrawals Annual statement Annex XI

12. Information to be covered by the annual statement due on the 31st March = Corrections arising from the definition of irregularity (Art.2.7 of Reg. 1083/2006) - Corrections arising from irregularities above and below the threshold of 10.000€ - For expenditure already declared to the Commission Recoveries concern public expenditure Note: Clerical/technical errors do not have to be reported BUT have to be corrected by MS. Recoveries and Withdrawals Annual statement Annex XI

13. Reporting on recoveries and withdrawals: • Annual statement from the Certifying Authority by 31st of March on recoveries, withdrawals and pending recoveries (art.20.2 of Reg.1828/2006) in the format of annex XI of Reg. 1828/2006 • Other Reports – Reminder: • Quarterly report to OLAF from Member States on new irregularities, their follow-up and irrecoverable amounts (art.28 of Reg.1828/2006) • AnnualSummary from Member States by 15th of February (includes a chapter on recoveries) (art. 53b(3) of Reg. 1995/2006) Recoveries and Withdrawals Annual statement Annex XI

14. Good practice Indicate which amounts recovered or withdrawn result from: - audits performed by EU bodies - controls and audits by national authorities Recoveries and Withdrawals Good practice