EN Regional Policy EUROPEAN COMMISSION 1 DG Regional Policy’s evaluation of the compliance assessment process for the programming period COCOF 30 June 2010 Michael Ryan DG Regional Policy

EN Regional Policy EUROPEAN COMMISSION 2 Introduction DG Regio working group - post 2013 Objective – develop ideas to feed into the discussion on the assurance model for post 2013 period One of the first topics identified as relevant was the Compliance Assessment process Lessons learned – conclusions to be drawn for post 2013

EN Regional Policy EUROPEAN COMMISSION 3 Assurance model How assurance will be built up Managing Authority- Keystone of the Control System Audit opinion at closure Commission audits Annual opinion based on national audits Certification of expenditure, Management verifications Compliance assessment Guarantees in programme negotiations Ex post During implementation Ex ante

EN Regional Policy EUROPEAN COMMISSION 4 Background to Compliance Assessment CA is key element in strengthening Commission assurance (Art 71 of Reg. 1083/06) for It replaced Article 5 procedure for where there were problems (e.g. set up of systems not adequate – led to problems later which could have been avoided) It involves independent verifications of management & control systems Roles - Member State (CAB) and Commission level

EN Regional Policy EUROPEAN COMMISSION 5 Member State / Commission role Member State Assumes accountability from the start System set up must be sufficient to ensure legality and regularity of expenditure This is confirmed by a CAB More reliance placed by the Commission on the CAB and the AA than previously Commission CAR must be approved by Commission before interim payments made Mainly desk based review (but on-spot possible) Feedback by Commission (non-acceptance letters)

EN Regional Policy EUROPEAN COMMISSION 6 Compliance assessment process As at 1 June 2010 CARs received for 314 of the 317 (99%): 301 of the 314 programmes accepted (96%) 193 rejections, [127 once 27 twice (=54) and 4 three times (=12)] Average period between OP approval and submission of CARs = 1.1 years approx (just over 1 year period in regulations) 62% of CARs within 1 year, 37% outside 1 year Reason for delays - due to preparation time and discussions at national level

EN Regional Policy EUROPEAN COMMISSION 7 Benefits / Value added by the CA process Provided clarity from the start for MAs and IBs It allowed feedback to be given (by CAB and Commission) in key areas of the MS systems Led to tangible improvements in design of systems in key areas Reduced the risk of significant weaknesses being found later Key areas included –Computerised accounting & monitoring systems –Segregation of functions –Management verifications –Audit arrangements (incl. Audit strategy, staffing, independence)

EN Regional Policy EUROPEAN COMMISSION 8 Audits Positive results of audits by –ECA: –reasons for rejections by Commission were justified –delays at national level; this increases the risk of systems not preventing errors early in programming period

EN Regional Policy EUROPEAN COMMISSION 9 Conclusions - worthwhile Considerable value added through process –Assurance obtained on set up from start of period –MS can be satisfied that they have complied with the regulations – clarity provided at national level –Feedback given on Commission’s expectations –Led to tangible improvements –Reduced risk of significant weaknesses being found later – therefore CA was preventive Commission’s intervention has sometimes supported / reinforced position of CAB / AA

EN Regional Policy EUROPEAN COMMISSION 10 Lessons for post 2013 Consider adapting the approach to take account of lessons learned Limit Commission role in CA process where system is essentially unchanged from Build upon the assurance from the period rather than ‘starting from scratch’

EN Regional Policy EUROPEAN COMMISSION 11 Criteria Establish criteria to limit Commission’s role -Small programmes ( e.g. 50% less CAs but 93% funding coverage) -Same structure, same bodies -High level of assurance on management and audit bodies -Low error rates Efficient use of scarce resources, reduce administrative burden Incentive for and recognition of effective management

EN Regional Policy EUROPEAN COMMISSION 12 What do you think ? In relation to the Compliance Assessment procedure for post 2013 do you think that we should…… -continue it unchanged ? -scrap it ? -adjust it ? Thank you for listening