Download European Commission

Structural Funds in Ireland
Financial management,
control & audit - Ireland
Dermot Byrne
Head of Unit
ERDF (& Cohesion Fund) Financial Control Unit,
Ministry of Finance, Ireland
OPEN DAYS – Brussels, 13 October 2005
Overview
 Background to Structural Funds in Ireland 2000/06
 Current financial control and audit model in Ireland
 Contrast Interreg and ERDF structures
 Changes & challenges for future
Ireland 1985-2005
Debt/GNP ratio:
Unemployment:
1985
131%
18%
2005
30%
4.4%
 Population 4.04m – most rapidly expanding population in Europe
annual increase of 1.6% / EU average 0.3%
 Average GDP growth 1997-2003 = 7.6%
 GDP growth of 5% per annum in 2004, 2005
 Average EU 15 growth < 2.5%
 Per capita GDP second highest in Europe after Luxembourg
National Development Plan
2000-2006
Border, Midland & Western
Region (OBECTIVE 1)
Southern & Eastern Region
(OBJECTIVE 1 in transition)
National Development Plan 2000/06
Operational Programmes
EU
€m
Economic and Social Infrastructure
Employment and Human Resources
Productive Sector
Southern & Eastern Region
Border, Midlands & Western Region
PEACE
Technical Assistance
1,491*
901
282
572
400
106
5
3,757
* Includes approx. €570m from Cohesion Fund
Total
€m
26,020
14,200 (no ERDF)
7,340
5,380
4,094
141
10
57,185
ERDF Cascade Structure
Ireland
Paying
Authority
Ministry of Finance
Managing
Authority
Government Ministry or Agency
Regional Assembly or Government Ministry
Intermediate
Body
Local Authority or State Agency
Final Beneficiary
Private firm receiving grant aid
Final Recipient
Regulation 438/2001
Management & Control Systems
(Article 4)
Audit function
(Article 10)
Systems (structures & procedures)
to ensure the delivery of products
and services co-financed by EU,
ensure compliance with national
and Community rules (eligibility,
public procurement etc). Systems
should include on-the-spot checks.
Independent verification of
(a) Management & Control Systems
(b) Expenditure declarations
ex-ante:
authorisation, segregation of
duties, accounting, physical,
Including written procedures
ex-post:
(a) Systems audits
(b) Minimum 5% verification (audit)
in order to give an opinion/assurance
on the effectiveness of (a) M&C Systems
and (b) accuracy of expenditure
declarations & supporting records.
ERDF Financial management,
control and audit structure
DG Regio Audit
ERDF Financial
Control Unit
M5% verifications
Systems audits
Paying
Authority
Internal
Audit
Managing
Authority
Internal
Audit
Intermediate
Body
Internal
Audit
Final Beneficiary
Internal
Audit
Final Recipient
(ERDF grant)
Key reporting relationships
DG Regio Audit
Sponsor - Audit Partnership
ERDF Financial
Control Unit
Managing
Authority
Management of programme
Paying
Authority
Certification of expenditure to the Commission
Summary - audit objectives
 Audit trail – complete and accurate supporting documentation at all levels
 Compliance with Eligibility Rules
 Compliance with Procurement rules
 Ensure adequate monitoring / cost control (Article 4 spot checks)
 Ensure that publicity / information requirements are met
 Comprehensive Procedures Manuals (including EU regulatory requirements)
Financial Control Unit
Structure and Key Activities
 Functionally independent of Paying Authority
 Legally supported by Statutory Instrument (Ministerial Directive)
 Co-funded by the European Union – 50% Technical Assistance
 Carries out sample checks – minimum 5% (ERDF)
 Responsible for planning, coordination & review of Systems Audits (ERDF)
 Body designated to issue declarations on winding up of assistance
 Administrative Agreement with DG Regio Audit / Internal audit units
 New development - “Contract of Confidence” with DG Regio
Contract of Confidence
 Single audit – “partnership” concept
 Audit strategy submitted to DG Regio (for Programme period, not just a year)
 Assurance on methodology and quality of audit in MS (e.g. risk assessment)
 Exchange of audit reports
 Annual report by MS Audit Authority
 Annual certification / Declaration of assurance
 Systematic feedback by the European Commission
 Facilitate reduced audit effort by EU audit services in Member State
Contrast: Interreg IIIB (NWE) v ERDF
Interreg IIIB (North West Europe)
European
Commission
European
Commission
Paying
Authority
ERDF
Financial
Control Unit
Paying
Authority
(Min. of Finance)
Managing
Authority
Managing
Authority
(S&E Reg. Ass)
Joint
Secretariat
(Lille)
Lead Partner
ERDF Ireland
Irish Partner
Internal
Audit
Internal
Audit
Intermediate
Body
Internal
Audit
Final Beneficiary
Internal
Audit
Interreg audit arrangements
 Member State is responsible for minimum 5% verifications …
 Expenditure declarations do not go through cascade structure (as ERDF)
 FCU has no direct access to Paying Authority / Managing Authority records
 Relies on information from PA / MA to facilitate audit of Partner in Ireland
 Southern & Eastern (S&E) Regional Assembly is liaison body in Ireland, but
 S&E Regional Assembly have no financial function (e.g. no Article 4 checks)
2007/13 – Challenges?
 Member State Audit Authority likely to be FCU
 Compliance Assessment Body likely to be FCU – review of proposed structures
and procedures at beginning of round + opinion as to adequacy
 If Structural Funds proportion is low, only national rules apply
 National audit strategy – basis for mutual confidence
 Adequate methodology
 Coordination of audit activity at central level in each MS (by who?)
Contact the FCU at:
ERDF Financial Control Unit
15 Lower Hatch Street,
Dublin 2
Ireland.
Phone:
Fax:
E-mail:
353 1 639 6217
353 1 639 6201
[email protected]
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