1. THE BULGARIAN EXPERIENCE IN APPLYING THE REVISED GUIDELINES
Certification Audit of the European Agricultural Funds Executive Agency
THE BULGARIAN EXPERIENCE IN APPLYING THE REVISED GUIDELINES
Ms Sevelina Ignatova– Director, Directorate “Audit Work” June 2018

2. Development of the Certification function 2000-2016
Certification Audit of the European Agricultural Funds Executive Agency
Development of the Certification function
Pre-accession SAPARD Programme – Public Authority
– EAGF and EAFRD – Private companies, selected trough procurement procedure
2016 onwards - Public Authority-CAEAF, designated through Council of Ministers Decree

3. Allocation 2014-2020 (mln. euro) Certified expenditure (mln. euro)
Certification Audit of the European Agricultural Funds Executive Agency
CAEAF Capacity
Total number of staff – 30 at present (22 in the beginning)
Audit staff – 24 at present (16 in the beginning)
Allocation (mln. euro)
EAGF
5 336
RDP
2 339
EMFF 88
Total
7 763
Certified expenditure (mln. euro) FY
EAGF
EAFRD
2016
726
129
2017
797
194
Work done - IACS FY
Parcels
Animals (No of B)
2017
2 147
10 B
2018
834
14 B

4. Certification Audit of the European Agricultural Funds Executive Agency
CAEAF Capacity
More than 60 % with international audit certificates: CIA,CGAP, CCSA, CRMA, CFSA, CICA, CFE, ongoing certification for ACCA and CISA
Different expertise – internal/external audit, EU funds audit and control, EU funds management, legal experts, engineer
Operational Programme “Good governance” project for capacity building and equipment supply, esp. helpful since we perform all the work ourselves, including OTSCs
November 2017 onwards – Audit Authority for the European Maritime and Fisheries Fund, designated trough Council of Ministers Decree

5. FY 2017 – application of the old Guidelines
Certification Audit of the European Agricultural Funds Executive Agency
FY 2017 – application of the old Guidelines
Risk assessment
4 Matrices for Assessment for the ICS per population;
Risk model used based on analyses of the risks identified for each measure/scheme.
Set confidence level as follows:
ERR
IRR
IACS
Non-IACS
EAGF
80%
85%
75%
EAFRD

6. FY 2017 – application of the old Guidelines (continued)
Certification Audit of the European Agricultural Funds Executive Agency
FY 2017 – application of the old Guidelines (continued)
Sampling approach
MUS conservative approach, no stratification for operational transactions
Non-statistical approach for compliance testing and non-operational transactions – systematic choice by random selection
Use of specialized software for data analysis Arbutus Analizer for both - defining the sampling size for statistical sampling and choosing the sample units for the random selection

7. FY 2017 – application of the old Guidelines (continued)
Certification Audit of the European Agricultural Funds Executive Agency
FY 2017 – application of the old Guidelines (continued)
Work done in numbers
Operational transactions:
Non-operational:
EAGF
IACS
Non-IACS
Compliance testing 15
Substantive testing
123 ( S1 121)
93 ( S1 79)
EAFRD
IACS
Non-IACS
Compliance testing 15
Substantive testing
123 ( S1 121)
101 ( S1 93)
Compliance/Substantive testing for EAGF and EAFRD
IACS
Non-IACS
Execution of payments 15
Accounting for payment
Advances and securities
N/A 20
Debt management 65

8. FY 2018 – adoption of the new methodology
Certification Audit of the European Agricultural Funds Executive Agency
FY 2018 – adoption of the new methodology
Risk assessment - I
4 Matrices for Assessment for the ICS per stratum/population for Audit objective 2;
2 Matrices for Assessment for the ICS per stratum/population for Audit objective 1;
Risk model used based on analyses of the risks identified for each process
Findings from ECA, EC and CB audits;
Cases of irregularities, (suspected) fraud, including conflict of interest;
Key changes in personnel;
Significant changes in legislation and/or IT systems compared to previous financial year

9. FY 2018 – adoption of the new methodology (continued)
Certification Audit of the European Agricultural Funds Executive Agency
FY 2018 – adoption of the new methodology (continued)
Risk assessment - II
Use of plan for rotation of controls for a 3-year period
All high risk processes, and
50 % of Medium risk processes, and
20 % of Low risk processes will be audited annually;
Use of dual-purpose testing;
Use of two separate samples – one for each audit objective
Confidence level set for Audit objective % for EAGF and 70% for EAFRD;
Confidence level set for Audit objective % for EAGF IACS and 70 % EAGF non- IACS; 80 % for EAFRD IACS/non IACS;

10. FY 2018 – adoption of the new methodology (continued)
Certification Audit of the European Agricultural Funds Executive Agency
FY 2018 – adoption of the new methodology (continued)
Sampling approach
MUS standard approach, no stratification for operational transactions
Pilot sample for all populations and two-period sample for non-IACS populations
Non-statistical approach for compliance testing and non- operational transactions – systematic choice by random selection
Use of specialized software for data analysis Arbutus Analizer for both - defining the sampling size for statistical sampling and choosing the sample units for random selection

11. FY 2018 – adoption of the new methodology (continued)
Certification Audit of the European Agricultural Funds Executive Agency
FY 2018 – adoption of the new methodology (continued)
Work to be done in numbers
Audit objective 1:
Audit objective 2:
*Due to lack of historical data for standard-deviation of the errors for the population in past periods, we used a pilot sample of 35 items
Compliance/Substantive testing
EAGF
EAFRD
Execution of payments 30
Accounting for payment
Advances and securities
As per Strategy/GL2
Debt management
EAGF
IACS
Non-IACS
Compliance testing 15
Substantive testing
35* (119)
35*
EAFRD
IACS
Non-IACS
Compliance testing 15
Substantive testing
35* (77)
35*

12. Sampling Unit Beneficiary/Claim for IACS
Certification Audit of the European Agricultural Funds Executive Agency
Sampling Unit Beneficiary/Claim for IACS
Reduction of work load
Administrative checks – approx. 20 % reduction (246 transactions for FY 2017 versus 196 for FY 2018)
OTSCs documentation verification
Reduction of travelling costs
Approx. 70% reduction OTSCs for FY 2017 versus 58 for FY 2018

13. Certification Audit of the European Agricultural Funds Executive Agency
Challenges
IRR for IACS – how shall the CB report the incompliances found during the administrative checks (not taken into account in the IRR calculation as per GL2);
IRR for the EAFRD Non-IACS - combining and interpreting the results from two sample approaches – MUS conservative (FY 2017) and MUS standard (FY 2018);
Need for methodology to implement two period stratified sample for non-IACS schemes;
Annexes 4 and 14 of Guideline 3 – presentation of information for IACS (claim or transaction level);
KAC for checking Audit objective 1 – execution of payments, accounting and advances and securities?

14. We warmly embrace … The new content of Guideline 3
Certification Audit of the European Agricultural Funds Executive Agency
We warmly embrace …
The new content of Guideline 3
More comprehensive
Better structured – audit objective 1 (at Fund level) and audit objective 2 (at population level)
Clear distinction between the opinion given on the annual accounts on one hand and the legality and regularity of expenditure respectively the opinion on the MD on the other hand
The idea for IT audits

15. Special thanks to DG AGRI;
Certification Audit of the European Agricultural Funds Executive Agency
Special thanks to
DG AGRI;
Our colleagues from other CBs for the dedicated exchange of experience and methodology sharing.

16. Our web as a sharing point
Certification Audit of the European Agricultural Funds Executive Agency

17. Thank you for your attention
Certification Audit of the European Agricultural Funds Executive Agency
Thank you for your attention