COUNCIL OFBrussels, 23 January 2006
THE EUROPEAN UNIONPUBLIC
Interinstitutional File: 5576/06
LIMITE
2005/0046 (COD) 2005/0047 (COD)
2005/0048 (CNS)
2005/0049 (COD)
ASILE
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MIGR 7
FRONT 13
CADREFIN 7
CODEC 60
NOTE from :
Commission Services
No. Cion prop. : 8690/05 ASILE 6 MIGR 16 FRONT 74 CADREFIN 100 CODEC 319 Subject :
Communication from the Commission to the Council and the European Parliament establishing a framework programme on Solidarity and the Management of Migration Flows for the period 2007-2013
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-Comparison between the European Refugee Fund currently in place (ERF II)
and the proposals for the four instruments as regards the provisions relevant for the daily management of the Funds by the Member States
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-The contents of the provisions in the proposals on management and control are in principle
the same as what has been agreed upon under the Council Decision on the European Refugee
Fund and the Commission Decisions implementing the Council Decision, agreed by the ERF
Committee October last year, with a few exceptions.
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-New are the provisions on the role of the Commission in appraising programmes (following
current practice under the ERF II), the revision of the multi-annual programme (more
flexible); the introduction of an independent compliance assessment by the Member States for
the management and control systems at the beginning of the multi-annual programming
period, the wholeness of payments, the use of the Euro, and descriptions of the procedures
relating to the interruption and suspension of payments and the payment of the balance.
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-These new provisions are in essence inspired by the proposed reform on shared management
in the area of the structural funds and seek to establish more clarity in the respective
responsibilities of the Member States and the Commission on the management and control of
the programmes.
Introduction
Provisions of the proposals for Decisions of the European Parliament and the Council establishing
the ERF for the period 2008-2013 (hereafter the `ERF proposal'), the External Borders Fund for the
period 2007 -2013 and the European Return Fund for the period 2008 2013, as well as the
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-Commission Decision 2006/... /EC laying down detailed rules for the implementation of
Council Decision 2004/904/EC as regards Member States management and control
systems, and rules for the administrative and financial management of projects co-
financed by the European Refugee Fund, (hereafter `Implementing Decision 1'), which
was examined and approved by the ERF Committee on 6 October 2005 and will be published
in the OJ after adoption by the Commission in January 2006;
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-Commission Decision 2006/.../EC laying down detailed rules for the implementation of
Council Decision 2004/904/EC as regards procedures for making financial corrections in
the context of actions co-financed by the European Refugee Fund, (hereafter
`Implementing Decision 2'), which was also examined and approved by the ERF Committee
on 6 October 2005 and will also be published in the OJ after adoption by the Commission in
January 2006;
In turn, Implementing Decisions 1 and 2 are inspired by a Commission Decision implementing the
first ERF Decision (Council Decision 2000/596/EC of 28 September establishing a European
Refugee Fund, published in OJ L 252, 6.10.2000), namely the Commission Decision of 18
December 2001 laying down detailed rules for the implementation of Council Decision
2000/596/EC as regards management and control systems and procedures for making financial
corrections in the context of actions co-financed by the European Refugee Fund (OJ L106,
23.4.2002).
The chapters in the proposals relevant for the daily management of the Funds by the Member States
Chapter IV (Programming)
Article ERF proposal ERF II Council Implementing Implementing
Decision Decision 1 Decision 2
Article 18: Adoption of guidelines 15§2
Article 19: Multi-annual programmes 15§2-4
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-§1 (a) (d), (f) 15§2 (a) (d), (e)
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-§1 (e) 5§5 + Annex 4
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-§1 (g) 5§1 (4, 11, 12) + Annex 1, annex i)
Article 20: Revision of multi- annual programmes - - -
Article 21: Annual programmes 16
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1.Contrary to the ERF II Council decision, in the proposals the phases in the programming
system are presented in chronological order: adoption of strategic guidelines, preparation and
approval of multi-annual programmes, revision of such programmes, preparation and
adoption of annual programmes.
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2.The description of the purpose of the strategic guidelines and the procedure for their adoption
in Article 18§1 and 2 ERF proposal is new. The idea itself is not: ERF II Council Decision
states in Article 15§2 that for each programming phase, multi-annual programmes will be
adopted "on the basis of guidelines for the priorities of the multi-annual programmes". The
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3.The elements of the multi-annual programmes as listed in Article 19§1 ERF proposal are
based upon (a) the elements listed in the ERF II Council Decision and (b) the reporting
obligation of the MS on the management and control systems to be put in place, as specified
in Implementing Decision 1. In view of the responsibility of the MS to manage projects co-
financed by the Fund in accordance with the applicable Community legislation and the
principle of sound financial management (Article 12§2 sub (c) of ERF II Council Decision),
Member States are required to describe the implementing system they put in place in the
context of the programming information submitted to the Commission. In fact, according to
Article 5§1 of Implementing Decision 1 the responsible authority shall be responsible for
submitting to the Commission the multi-annual programme in accordance with the model in
Annex 1 of the Decision. Annex i) to Annex 1 consists of a model for the description of the
management and control system put in place by the MS for the implementation of the Fund.
Thus, under the current framework, MS already submit to the Commission the information on
the implementing provisions listed under Article 19§1(g) of the proposal and the list of
elements therefore codifies existing practice.
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4.The element listed under Article 19§1(e) ERF proposal is based on the need to properly
evaluate the impact of Community funding in general and the co-financing of national actions
in particular. The information is part of the reporting duties on the annual programmes. In the
context of the principle of sound financial management, the Financial Regulation refers to the
need to set specific, measurable, achievable, relevant and timed objectives (SMART) to be
monitored by performance indicators (Article 27 FR). According to Article 5§5 of
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5.New is the description of the role of the Commission in appraising the draft national multi-
annual programmes and the list of criteria according to which the drafts are judged by the
Commission (19§4). Also new is the procedure what happens in case of doubt by the
Commission (19§5). However, the description of this procedure reflects the experience so far
with the examination of the multi-annual programmes 2005-2007 under the ERF II Decision
framework.
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6.Provisions on the revision of an approved national multi annual programme are also new
(Article 20). In the current framework revision is possible "in the event of significant changes
which imply a transfer of funds between actions exceeding 10% of the total amount" (Article
16§5 ERF II Decision). The proposal is more flexible. It provides for the possibility of a
revision in case changed circumstances in the Member States have been adequately recorded
and assessed: "Multi-annual programmes may be re-examined in the light of evaluations
and/or following implementation difficulties".
Chapter V (Management and control systems)
Article ERF proposal ERF II Council Implementing Implementing
Decision Decision 1 Decision 2
Article 23: Implementation 10
Article 24: General Principles 3
Article 25: Designation of authorities 2, 4
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2.Article 25 ERF proposal is based upon Article 2 (definition of the three authorities) and
Article 4 (Designation of authorities) Implementing Decision 1. According to the ERF II
Decision Member States are obliged to set up a responsible authority (13§1) and the
possibility to have a delegated authority is recognised (13§2). Moreover, it is acknowledged
that declarations of expenditure must be certified by "an individual or department
operationally independent of any authorising department of the responsible authority" (24§2).
This is the certifying authority, which is further described in Implementing Decision 1.
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3.New is the reference to a compliance assessment body (25§1 sub (e)). The body is meant to
give an independent assurance to the Member State concerned and the Commission, before
implementation, at the beginning of the programming cycle of the quality and conformity of
the management and control systems in terms of defined standards. The introduction of this
body is meant to enhance security by requiring Member States to carry out an initial
assessment before the Commission proceeds with the pre-financing payment. It is first
mentioned in the September 2004 Communication on the respective responsibilities of the MS
and the Commission in the shared management of the Structural Funds and the Cohesion
Fund (COM (2004) 580 final, 06.09.2004). Enhancing security through such an independent
initial assessment should contribute to the drive towards a positive declaration of assurance
(DAS) by the Court of Auditors on the area where shared management applies. N.B. For
another consequence of the inclusion of such an initial assessment, see below under Chapter
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5.Article 27 ERF proposal is mainly based on Article 13§3 ERF II Decision. Some provisions
are based on Implementing Decision 1: §1 takes on the wording of Article 5§1 Implementing
Decision 1; §2 sub (b) of Article 5§1 (a) and (b) Implementing Decision 1 and §2 sub (e) of
Article 5§5 Implementing Decision 1. §2 sub (g), (h) and (i), on the other hand, follow from
more general obligations resting upon the MS on monitoring and control of Community
funding, the responsibility for which should be allocated clearly to one of the authorities
defined in Article 25.
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6.Article 29§1 ERF proposal is based on Article 8 Implementing Decision 1, except for sub (d),
which specifies that the general obligation to provide for reliable accounting systems in
computerised forms is applicable to the certifying authority as regards expenditure and which
is found in Article 9§3 (b) Implementing Decision 1.
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7.Article 30 ERF proposal provides a general description of the remit of the audit authority that
is resulting from the principle that a Member State is the first to take responsibility for
financial control of the actions co-financed (25§1 ERF II Decision). A more precise
description of the character of the sampling and the nature of the verifications to be carried
out by the audit authority is found in Article 7 Implementing Decision.
Chapter VI Controls
Article ERF proposal ERF II Council Implementing Implementing
Decision Decision 1 Decision 2
Article 31: Responsibilities MS
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-§1: sound financial management 12§2(d) 12§1
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-§2: guidance to authorities 12§1
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-§3: prevent, detect and correct irregularities 25§1(b)
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-§4: financial control of actions 12§2(d)
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-§5: cooperation statistics 12§2(f)
Article 32: Management and control systems 12§2(d)
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-§1: setting up of systems 12§2
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-§2: submitting their description 12§3
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-§3: report of the compliancy assessment body - - -
Article 33: Responsibilities Commission 13§3(b),(c) 13
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-§1: assessment of the systems 12§1(b)
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-§2+3: on the spot audits 26§1
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-§4+5: publicity, consistency 12§3(b), (c)
Article 34: Cooperation with control bodies MS - - -
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2.The only new obligation in Article 32 ERF proposal is found in §4 and this relates to the task
of the compliance assessment body.
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3.Article 34 ERF proposal is entirely new. The purpose of the provision is to coordinate the
audit strategies of the Commission and the national audit authorities to ensure adequate risk
assessment, and to establish a cooperation mechanism with a view to a more efficient use of
resources by both Commission and Member States. For the ERF this would be a new method
of working, based on the proposal for a Regulation on the Structural Funds. Under Article 38
of Regulation (EC) No 1260/1999 and Article G of Annex II of Regulation (EC) No 1164/94
(Structural Funds), the Commission has encouraged the setting up of administrative
cooperation on audit methodology with the Member States in order to improve the
coordination of checks and the exchange of results between the Commission and the Member
State concerned and to apply the same audit methodology. The advantage of the mechanism
proposed in Article 34 is that when the Commission obtains the assurance on the existence
and sound functioning of the national management and control system an assurance based
on national audits it will be able to base its own assurance concerning the legality and
regularity of the declared expenditure on the results of these national controls. Accordingly, it
will be able to limit its own on the spot audits to exceptional circumstances only.
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4.As far as the assurances by Member States on their management and control systems are
concerned, under the proposals they will need to be provided by the Member States at three
consecutive moments: 1) at the beginning of each multi-annual programming period, an
Chapter VII Financial Management
Article ERF proposal ERF II Council Implementing Implementing
Decision Decision 1 Decision 2
Article 35: Eligibility declarations of expenditure 21
Article 36: Wholeness of payment - - -
Article 37: Use of the euro - - -
Article 38: Commitments 22
Article 39: Pre-financing payments 23§1, 23§2, 23§3
Article 40: Balance payments 24§3
Article 41: Interruption
Article 42: Suspension 26§2
Article 43: Conservation of documents (26§2) 9§4 -
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1.Article 35§1 ERF proposal defines what should be included in a declaration of expenditure.
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2.Article 35§2 ERF proposal copies Article 21§1 ERF II Decision. Article 35§3 ERF proposal
copies Article 21§2 ERF II Decision but includes the normal rule that the co-financed actions
must not have been completed before the starting date for eligibility. The rules that
expenditure eligible for financing may not be incurred prior to the date of submission of the
grant application and no grand may be awarded retrospectively for actions already completed
are found in Article 112 of the Financial Regulation.
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6.The paragraphs in the ERF II Decision on the balance of payments (23§4) and the deadline
for the final declaration of expenditure (24§3) are replaced in the ERF proposal by provisions
describing in detail the entire procedure relating to the payment of the balance. The provisions
lay down the condition for preparation of the payment of the balance (acceptance of the final
implementation report and the statement of validity) and describe step by step what happens,
including the options for the Commission to suspend or interrupt payments.
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7.The Articles in the ERF proposal on interruption (41) and suspension (42) are not entirely
new as Articles 26§2 and §3 ERF II Decision outline a procedure for suspension, but this
system is replaced with a two tier system. Interruption occurs in the case of doubts, whereas
suspension would only occur once it is established that there are serious shortcomings:
Interruption Suspension
Authorising officer by delegation Commission
Pre-financing and balance payments Pre-financing and balance payments
Inform the MS afterwards Give the MS three months to present observations before taken the decision to suspend payments
When the authorising officer a) has doubts as to the proper functioning of the management and control systems', b) needs further information When a) there is a serious deficiency in the management and control systems, b) a serious irregularity has not been corrected by the Member State or c) the Member State has not complied with its key obligations relating to control and audit under the proposal
or c) suspects serious
irregularities.
Maximum of six months, possibility to extend another six months if it is necessary to take a decision on suspension As long as it takes for the Member State to take the necessary measures to enable the suspension to be lifted.
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8.As regards the obligation to keep supporting documents in Article 43 ERF proposal, a similar
provision is found in Article 9§4 Implementing Decision 1. The difference lies in the duration
of the period (three years following the closure of the programme instead of five years
following the payment by the Commission of the final balance). Article 43 ERF proposal is
inspired by the Regulation on the Structural Funds. The obligation to record, number and keep
supporting documents for a beneficiary of a project is found in Rule No 6 of Annex I to
Commission Decision 2006/.../EC laying down detailed rules for the implementation of
Council Decision 2004/904/EC as regards the eligibility of expenditure within the framework
of actions co-financed by the European Refugee Fund implemented in the Member States
(which was examined and approved by the ERF Committee on 6 October 2005 together with
Implementing Decisions 1 and 2 and will also be published in the OJ after adoption by the
Commission in January 2006).
Chapter VIII Financial Corrections
Article ERF proposal ERF II Implementing Implementing
Council Decision 1 Decision 2
Decision
Article 44: Corrections by the MS 25 1-3
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-§1: obligation to investigate 25§1
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-§2: obligation to act and correct 25§2 1§2
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-§2: list of cancellation proceedings - 1§3
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-§2: default interest due 25§2 + 26§4
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1.The provisions on financial corrections found in Chapter VIII reflect firstly, the provisions
found in Article 25§1 sub (b) and 25§2 ERF II Decision for financial corrections by the
Member States and Article 26 ERF II Decision for financial corrections by the Commission,
and secondly, the key provisions of Implementing Decision 2.
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2.In Article 26§2 ERF II Decision criteria are listed for the suspension of payments by the
Commission. In Article 45§2 ERF proposal, suspension is within the discretion of the
Commission, but it goes without saying that the criteria for suspension must be in essence the
same as the criteria for cancellation by the Commission, as defined in Article 46§1.
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3.§2-4 of Article 46 provide for a series of principles and criteria for the Commission when
determining the size of the financial corrections.
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| publication date | 23-01-2006 |
|---|---|
| reference | 5576/06 |
