Transcript Slide 1

FINANCIAL MANAGEMENT
OF THE EUROPEAN
AGRICULTURAL
GUARANTEE FUND (EAGF)
Owen Jones DG AGRI I.4
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Directorate-General for Agriculture and
Rural Development (DG AGRI)
 AGRI I.1 Budget management
 AGRI I.4 - Financial management of EAGF
 AGRI F.2 Financial management of EAFRD
 AGRI J
Audit of agriculture expenditure
(clearance of accounts, X-tables, debtors’
ledger, accreditation, controls)
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Council Regulation (EC) No
1290/2005
 Commission Regulation (EC) No 883/2006 of 21/06/2006:
keeping of accounts by the paying agencies, declarations of
expenditure and revenue and the conditions for reimbursing
expenditure under EAGF and the EAFRD;
 Commission Regulation (EC) No 884/2006 of 21/06/2006:
financing of EAGF intervention and accounting of public
storage operations by the paying agencies of the Member
States;
 Commission Regulation (EC) No 885/2006 of 21/06/2006:
as regards the accreditation of paying agencies and other
bodies and the clearance of accounts of the EAGF and the
EAFRD.
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Shared management
•Export refunds
•Intervention
•Direct payments
•Sugar restructuring Fund
•Promotion of Agricultural Products
… and direct management (Commission
responsibility)
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Responsibilities of the
Commission
 Monthly payments (for payments effected minus
revenue received by the paying agencies) to the
Member States;
 Ensures budgetary discipline (respect of budget
appropriations, payment deadlines, financial
ceilings);
 Check management and control systems in the
Member States (e.g. missions in the Member
States, clearance of accounts procedure)
(Directorate J).
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Budget management tasks
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Prepare and maintain budget nomenclature;
Control ceilings, deadlines;
Eligibility control of expenditure;
Importation of MS declarations;
Correction of expenditure;
Reimbursement of monthly payments to the MS;
Accounting for monthly payments;
Follow-up of consumption of credits;
Management of payment reductions due to nonrespect of payment deadlines;
The Early Warning System (forecasts).
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Budget and detailed budget
nomenclature
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The detailed budget nomenclature
 Is a more detailed specification of articles and items
defined in the “General Budget” (there are around
140 items and around 2000 sub-items);
 Is the compulsory level of declaration of EAGF
expenditure in the monthly detailed declaration
table (T 104) that has to be sent from the Member
States to the Commission (Reg.883/06, Art.4 2(a)).
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Why a detailed nomenclature?
 Marketing/calendar year
 Product/Measure
 Deadline for the payments
 Financial ceiling of the expenditure
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The detailed budget nomenclature
 The detailed nomenclature changes each year
because it has to be adapted to the
nomenclature of the EU Budget;
 The detailed nomenclature changes also
throughout the year (e.g. budget amendments,
new measures);
 After the start of the exercise, amendments are
made in form of revisions & addenda;
 Changes are presented in the monthly
“Agricultural funds committee” and on the
website “CIRCA”;
 All languages
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Budgetary discipline
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FINANCIAL and BUDGETARY DISCIPLINE
 Respect of the global ceiling FEAGA - Multiannual
Financial Perspectives;
 Possible adjustment of direct aids (Art. 11 (1)
Council Regulation (EC) No 73/093) (Financial
Discipline) when risk of exceeding the global
ceiling;
 If the budget is exceeded then payments to
Member States are reduced proportionally for the
month in question and corrected next year to
ensure that all Member States get the same global
financing rate;
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BUDGETARY DISCIPLINE
 The Early Warning System is a forecast system
of the Commission to ensure, that the budget
ceiling will not be exceeded. It is based on
monthly expenditure profiles;
 Monthly early warning reports are presented in
the Committee of Agricultural Funds and to the
Budget Authority (= European Parliament and
Council AGRIFIN Working Group) on a monthly
basis.
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Budgetary Discipline
Reductions
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Reduction of payments by the Commission
Art. 17 Council Regulation (EC) No 1290/2005
 Payment deadlines in EU legislation must be respected
in order to respect the budgetary discipline and treat
beneficiaries equally
 A Working document is distributed to the Member States
in the EAGF Committees indicating the earliest and
latest payment deadlines per sub-item
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Reduction of payments by the Commission
Art. 17 Council Regulation (EC) No 1290/2005
 With the exception of direct payments, if expenditure
effected after the (payment) deadlines is equal to 5% or
less of the expenditure paid in time: No reduction;
 Above the 5 % threshold, all further expenditure effected
shall be reduced for a delay of:
• Up to one month:
by 10%,
• Up to two months:
by 25%,
• Up to three months:
by 45%,
• Up to four months:
by 70%,
• For a delay of 5 months or more:
by 100%.
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Reduction of payments by the Commission
Art. 17 Council Regulation (EC) No 1290/2005
Procedure for reductions:
 Article 17 (1)
Reduction due to late payments
Other reasons for non-eligibility
The MS is asked to submit explanations and
the Commission may subsequently reduce the
monthly payments
 Article 17 (2)
Overrun of financial ceilings
The MS is informed about the Commission’s
intention and has the opportunity to submit its
comments before reduction
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Recoveries
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Recoveries
• Irregularities
• Administrative error
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Information to be transmitted
to the Commission
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Transmission of data by the
Member States
i)
declaration of expenditure = payment request ;
to DG AGRI I.4
ii) forecasts of expenditure;
to DG AGRI I.4
iii) annual accounts of the accredited paying
agencies
- to DG AGRI J.5
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Transmission of data by the
Member States
The global expenditure (Declaration of
the 3rd day);
Declaration of expenditure (Declaration
of the 10th day): Transmitted by the 10th
day of each month;
Set of documents (T104 +…):
Transmitted by the 20th day of each
month. At sub-item level including
forecasts
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Set of documents (T101, 103, 104…)
 Table 104 : monthly detailed declaration of
expenditure and revenue for each paying
agency, including forecasts;
 Table 103 : a summary of table 104 for all the
Member State’s paying agencies;
 Table 101 : difference between the monthly
expenditure declaration (= Fax of the 10th) and
table 104;
 e-FAUDIT tables : accounts relating to public
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Public Storage e-FAUDIT
An IT application, using Internet
facilities, which enables Member
States to calculate in a uniform
manner the amounts reimbursed for
public intervention storage operations;
A new IT system is being developed
with your help.
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Payment decision by the
Commission
•Based on Declaration of the 10th ;
•Cover expenditure less assigned revenue;
•Without prejudice to future corrections;
•Paid on the 3rd working day of the month
following the declaration;
•Funds committee consulted;
•Document made available beforehand.
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Calculation of the monthly payments
Monthly payments concerning the payments made by
Member states in the month ‘n’ (September)
Month ‘n’ (September
)
Month ‘n +1’ (October)
10th
10th of the
month
declaration :
expenditure ‘n’
3rd working day
20th
Monthly
detailed
declaration of
expenditure ‘n’
EAGF
Committee:
consultation
of Member
States
Month ‘n+2’November
(
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Monthly payment
up to the 3 rd working
day
Decision of the
Commission
concerning the
amounts of the
monthly payment
to transfer
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Forecasts
With the monthly detailed declaration (T104) MS also have
to communicate the forecasts for the following months.
The declaration of forecasts varies from item to item.
(A) = Forecasts have to be made until the end of the
exercise;
(B) = Forecasts have to be made for a three-month period;
(C) = Forecasts have to be made:
• at the beginning of the exercise for a three-month
period,
• from the declaration for the expenditure of February
until the end of the exercise.
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Why do good forecasts matter?
• Reduces the risk of the Commission requesting
excessive new funds in future budget proposal;
• Budget authority: Improves the credibility of the
Commission and the Member State;
• Commission can reallocate appropriations
without having to call on for extra own
resources.
*Compulsory expenditure is reimbursed whatever
the forecast;
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Financial management of the
FEAGA
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Shared Management
Conform to legislation
Consistent with sound budgetary management
A minimum of discipline and procedure to cope
efficiently with all the transactions and
exceptions.
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Financial management of the
FEAGA
Workshop
Shared Management
Please give us your views
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Workshop - Q1
• Q.1. Concerning the expenditure declarations
(10, T104, … declaration), can you suggest
improvements concerning the form of these
tables and the way to communicate these
expenditure statements to the Commission? Do
you have remarks on how any subsequent
correspondence with the Commission is
conducted regarding the eligibility of the
declared expenditure.
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Workshop – Q2
• Q.2. Concerning the EAGF/EAFRD forecasts,
can you explain how they are calculated? What
difficulties have you encountered in developing
these expenditure forecasts?
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