Transcript Titre du slide show

European Union
Republika Slovenija
Homologues Group Meeting
Slovenia, October 2009
Coordination between the Commission and the Audit
Authorities of the Member States
(Application of Article 73 of Council Regulation (EC) No 1083/2006)
Jean-Pierre Jochum
President of the CICC
Audit Authority FRANCE
Ljubljana, 12-13 October 2009
1
European Union
Republika Slovenija
Homologues Group Meeting
Slovenia, October 2009
Introduction
 Coordination over the period 20002006
 Provisions for 2007-2013
 A few ideas to follow up
Conclusion
Ljubljana, 12-13 October 2009
2
European Union
Republika Slovenija
Homologues Group Meeting
Slovenia, October 2009
INTRODUCTION
• The aim of this presentation is to provide an overview of
coordination efforts over the period 2000-2006
• And, within the new regulatory framework, to look at what should
be retained and how the ‘‘single audit’’ could work
Ljubljana, 12-13 October 2009
3
European Union
Republika Slovenija
Homologues Group Meeting
Slovenia, October 2009
1. COORDINATION OVER THE PERIOD
2000-2006
A. Rules
Ljubljana, 12-13 October 2009
4
European Union
Member States had to:
Republika Slovenija
Homologues Group Meeting
Slovenia, October 2009
1
- inform the Commission about the organisation of the authorities and
the management systems in place;
- carry out system audits and audits of operations;
- submit an annual control report to the Commission;
- issue a closure declaration through an independent body when
each assistance was wound up.
Ljubljana, 12-13 October 2009
5
European Union
Republika Slovenija
Homologues Group Meeting
Slovenia, October 2009
The Commission and the Member States had to:
- coordinate audit plans, methodology and implementation on the
basis of bilateral arrangements;
- hold an annual bilateral meeting at least once a year, to examine
and assess:
the results of audits;
any observations made by other control bodies;
the financial impact of irregularities detected and the measures
already taken or which would be taken to correct them.
Ljubljana, 12-13 October 2009
6
European Union
Republika Slovenija
Homologues Group Meeting
Slovenia, October 2009
Po
1. COORDINATION OVER THE PERIOD
2000-2006
B. The contract of confidence
Ljubljana, 12-13 October 2009
7
European Union
Republika Slovenija
Homologues Group Meeting
Slovenia, October 2009
The Member States undertook to:
- establish an audit strategy;
- submit system audit reports to the Commission and the Court of
Auditors;
- submit the Article 13 annual control report, drawn up according to a
standard model. This report had to be signed or countersigned by the
winding-up body; the Commission had to provide its observations on
the report by the first bilateral meeting after receipt of the report, at the
latest.
Ljubljana, 12-13 October 2009
8
European Union
Republika Slovenija
Homologues Group Meeting
Slovenia, October 2009
•
Before the contract of confidence was concluded, the Commission had
to:
have received sufficient guarantees concerning the compliance of
systems;
have approved the audit strategy.
•
The Commission undertook to restrict its audit activity to establishing
that the audit strategy had been implemented effectively, and that the
annual reports and winding-up statement were reliable.
To ensure that the strategy was implemented effectively and that Article
13 reports were reliable, the Commission could carry out audit activities,
in particular:
- assessing the work of national audit and control bodies and the
winding-up body;
- participating in the audit activities of national audit and winding-up
bodies.
Ljubljana, 12-13 October 2009
9
European Union
Republika Slovenija
Homologues Group Meeting
Slovenia, October 2009
•
Beyond those activities mentioned, the Commission said it did not
itself intend to carry out audits and controls
•
but it could ask a Member State to carry out an audit on one or more
specific operations
• and, in the event of indications suggesting that serious irregularities or
failings had not been detected or had not been subject to adequate
corrective measures, it could carry out any audit activity that it
deemed necessary to ensure that the conditions of the contract of
confidence were still satisfied.
• With regard to closure, the Commission did not intend to carry out
detailed checks of the declaration submitted in relation to matters
covered by the Article 13 reports.
Ljubljana, 12-13 October 2009
10
European Union
Republika Slovenija
Homologues Group Meeting
Slovenia, October 2009
The contract was thus based on the Commission’s confidence in the
national audit activities. It took matters in hand:
- where audit activities did not conform to the audit strategy it had
approved;
- where annual control reports were not reliable;
- where audit activities were not effective, i.e., when they failed to
detect serious irregularities or failings.
However, the national authorities also had to prove that they were
capable of taking corrective measures, which falls outside the
competence of the auditor.
Ljubljana, 12-13 October 2009
11
European Union
Republika Slovenija
Homologues Group Meeting
Slovenia, October 2009
1. COORDINATION OVER THE PERIOD 2000-2006
C. Best practices
France has not signed the contract of confidence: it has therefore not
benefited from the reduction in the Commission’s audit activities.
However, the winding-up body has established an audit strategy,
written its Article 13 reports in accordance with the model and
submitted its system audit reports. Furthermore, together with the
Commission, it has implemented practices which have facilitated the
work of both parties.
Ljubljana, 12-13 October 2009
12
European Union
Republika Slovenija
Homologues Group Meeting
Slovenia, October 2009
• Genuine review of the audit plans, leading to the workload of the
different programmes being shared or joint audits being carried out
(possibly sharing the fieldwork)
• Follow-up of the audits carried out by the other party
This could only be based on an agreement on observations and
recommendations (sometimes after intense discussions); this mutual
understanding has been facilitated by joint audits
This agreement also enables to identify the points which will need to
be checked again during closure
• Regular dialogue on the assurance obtained following audits (when
the Commission receives system audit reports from the CICC and at
annual bilateral meetings)
Ljubljana, 12-13 October 2009
13
European Union
Republika Slovenija
Homologues Group Meeting
Slovenia, October 2009
2. PROVISIONS FOR 2007-2013
A. The general framework
Ljubljana, 12-13 October 2009
14
European Union
Republika Slovenija
Homologues Group Meeting
Slovenia, October 2009
•
The audit authority or an independent body (no longer the Member
State) must assess system descriptions and issue a compliance
assessment.
•
The audit authority must establish an audit strategy.
•
It is responsible for carrying out system audits and checking operations
under the required conditions.
•
In addition to the control report, which it must draw up in accordance
with a standard model, it issues an opinion on the functioning of the
systems each year.
•
In addition to the closure declaration, it may issue partial closure
declarations.
The main requisites of the contract of confidence (audit strategy, model
for the annual control report) are now obligations.
Ljubljana, 12-13 October 2009
15
European Union
Republika Slovenija
Homologues Group Meeting
Slovenia, October 2009
The Commission bases its assurance on the following (in accordance
with Article 72 of Regulation (EC) No 1083/2006):
- system description and compliance assessment documents;
- annual control reports and annual opinions;
- its own audits;
- audits carried out at its request.
Ljubljana, 12-13 October 2009
16
European Union
Republika Slovenija
Homologues Group Meeting
Slovenia, October 2009
2. PROVISIONS FOR 2007-2013
B. Cooperation between the Commission and the audit
authority
(Article 73(1))
Ljubljana, 12-13 October 2009
17
European Union
Republika Slovenija
Homologues Group Meeting
Slovenia, October 2009
It is stated that the aim of cooperation is to "make the best possible use
of resources and to avoid unjustified duplication of work".
This includes provisions relating to:
- coordination of audit plans and methodologies;
- bilateral meetings with a broader scope (exchange of views on other
issues relating to the improvement of the management and control
systems).
In addition, immediate exchange of views on the results of system
audits, which would require submission of the respective audit reports.
Clearly, only the final reports following the contradictory procedure may
be submitted by the audit authority.
The best practices in place for 2000-2006 (consultation on audit plans,
exchange of views on the assurance obtained regarding systems) can
therefore continue.
Ljubljana, 12-13 October 2009
18
European Union
Republika Slovenija
Homologues Group Meeting
Slovenia, October 2009
2. PROVISIONS FOR 2007-2013
C. The “single audit”
(Article 73(2) to (4))
Provisions based on the annex to the contract of confidence, but with an extra
condition added
Ljubljana, 12-13 October 2009
19
European Union
Republika Slovenija
Homologues Group Meeting
Slovenia, October 2009
In determining its own audit strategy, the Commission may choose to
base its assurance:
- on the opinions issued by the audit authority, although it may also
carry out its own audits;
- or to reply principally on the annual opinion on the effective
functioning of systems issued by the audit authority.
Ljubljana, 12-13 October 2009
20
European Union
Republika Slovenija
Homologues Group Meeting
Slovenia, October 2009
The Commission may rely principally on the annual opinion where:
- the description of the system and the compliance assessment are without
reservations, or where reservations have been withdrawn following corrective
measures;
- the audit strategy is satisfactory; and
- reasonable assurance has been obtained that the systems function effectively
on the basis of the results of audits by the Commission and the Member State.
To reach such a conclusion, audits must have previously been carried out.
It is also necessary that the results of these audits allow reasonable assurance to
be given regarding the effective functioning of the system.
It is therefore not enough that the audit authority’s results and conclusions are
reliable.
Ljubljana, 12-13 October 2009
21
European Union
Republika Slovenija
Homologues Group Meeting
Slovenia, October 2009
If these conditions are met, the Commission may decide that it will only carry
out its own on-the-spot audits only:
- if there is evidence to suggest shortcomings in the system affecting
expenditure declared to the Commission in a given year;
- and if the relevant annual opinion was issued without reservations regarding
these shortcomings (i.e., if the work of the audit authority did not detect these
shortcomings or if the annual opinion did not draw the correct conclusions).
It is therefore necessary that the work and conclusions of the audit authority are
reliable.
"Confidence" must therefore be re-examined every year, since every year there
could be discrepancies between the annual opinion and evidence obtained by the
Commission suggesting the existence of shortcomings.
Ljubljana, 12-13 October 2009
22
European Union
Republika Slovenija
Homologues Group Meeting
Slovenia, October 2009
This issue is complex.
- The audit authority’s work and conclusions must, obviously, be reliable
but this reliability can be challenged every year, which also seems legitimate, if
shortcomings affecting certified expenditure have not been detected or
highlighted.
- On the other hand, in order to grant "confidence", the Commission must have
previously obtained reasonable assurance that the system functions effectively.
It is therefore not enough that the audit authority’s work and conclusions are
reliable.
The entire "single audit" provision hinges on the interpretation given to the term
"effective" in relation to the functioning of the system.
Ljubljana, 12-13 October 2009
23
European Union
Republika Slovenija
Homologues Group Meeting
Slovenia, October 2009
3. WHICH IDEAS TO FOLLOW UP?
Ljubljana, 12-13 October 2009
24
European Union
Republika Slovenija
Homologues Group Meeting
Slovenia, October 2009
Conditions:
in addition to the conditions relating to the compliance assessment and the
audit strategy, which are clear,
- reliability of the work and conclusions of the audit authority;
- assurance given on the effective functioning of the system, on the basis of
audits carried out previously by the Commission and the audit authority.
Ljubljana, 12-13 October 2009
25
European Union
Republika Slovenija
Homologues Group Meeting
Slovenia, October 2009
A solution?
- the basis: the first annual opinion which is complete, i.e., based both on
system audits and on audits of operation carried out at a national level,
complemented by Commission audits. This opinion would of course also have
to be reliable.
- Two possible situations:
. Functioning of the system does not raise any reservations, reasonable
assurance is obtained by the Commission: no problem.
. The annual opinion includes reservations, but sets out the action plans
implemented, together with a timetable. Can it be said in this case that the
system functions effectively, given that it detected shortcomings and will
correct them?
A fortiori, it can be said that the system functions if the action plans have
been completed when the annual opinion is issued.
Ljubljana, 12-13 October 2009
26
European Union
Republika Slovenija
Homologues Group Meeting
Slovenia, October 2009
The key to the "single audit" provision lies in the answer to this question: if the
answer is "yes", an effective system is one that detects errors and
shortcomings and corrects them, in which case Article 73 can be applied in its
entirety; if not, it would be difficult to do this.
This answer is not straightforward: no doubt every case will have to be
examined individually. The annual bilateral co-ordination meeting should be
the occasion to reach a decision, after consultation.
Ljubljana, 12-13 October 2009
27
European Union
Republika Slovenija
Homologues Group Meeting
Slovenia, October 2009
CONCCONCLUSIONLUSION
CONCLUSION
This is just one idea, but it is one that is "reasonable", given that perfection is
not possible and what is expected of a system is that is should be able to
detect errors and correct them.
Ljubljana, 12-13 October 2009
28
European Union
Republika Slovenija
Homologues Group Meeting
Slovenia, October 2009
Thank you for your attention
E-mail : [email protected]
Tel : 00 33 1 53 44 23 07
Ljubljana, 12-13 October 2009
29