1997R2064 — EN — 10.11.1998 — 001.001 — 1
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►B COMMISSION REGULATION (EC) No 2064/97
of 15 October 1997
establishingdetailedarrangementsfortheimplementationofCouncilRegulation(EEC)No4253/
88asregardsthefinancialcontrolbyMemberStatesofoperationsco-financedbytheStructural
Funds
(OJ L 290, 23.10.1997, p. 1)
Amended by:
Official Journal
No page date
►M1Commission Regulation (EC) No 2406/98 of 6 November 1998 L 298 15 7.11.1998
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COMMISSION REGULATION (EC) No 2064/97
of 15 October 1997
establishing detailed arrangements for the implementation of
Council Regulation (EEC) No 4253/88 as regards the financialcontrol by Member States of operations co-financed by the Struc-
tural Funds
THE COMMISSION OF THE EUROPEAN COMMUNITIES,
Havingreg ard to the Treaty establishingthe European Community,
Having regard to Council Regulation (EEC) No 4253/88 of 19
December 1988 layingdown provisions for implementingReg ulation(EEC) No 2052/88 as regards coordination of the activities of thedifferent Structural Funds between themselves and with the operationsof the European Investment Bank and the other existingfinancial instru-ments(
1), as last amended by Regulation (EC) No 3193/94 (2), and in
particular the fourth subparagraph of Article 23 (1) thereof,
Havingconsulted the Advisory Committee on the Development and
Conversion of Regions and the Committee set up pursuant to Article124 of the Treaty,
Whereas Article 23 (1) of Regulation (EEC) No 4253/88 lays down the
principles governing the financial control by Member States of theoperations co-financed by the Structural Funds;
Whereas it is necessary, in order to ensure an acceptable level of
financial control throughout the Community, for certain minimumcontrol requirements to be specified in detail;
Whereas, in view of the specific constitutional and administrative char-
acteristics of each Member State, it is necessary for this Regulation tobe supplemented by appropriate administrative arrangements to be madebetween the Commission and each Member State;
Whereas this Regulation should apply to the forms of assistance
provided for in Article 5 (2) of Regulation (EEC) No 2052/88 of 24June 1988 on the tasks of the Structural Funds and their effectivenessand on coordination of their activities between themselves and with theoperations of the European Investment Bank and the other existingfinancial instruments(
3), as last amended by Regulation (EC) No 3193/
94, provided that the forms of assistance are administered by theMember States;
Whereas the Member States’ management and control systems should
be such as to ensure efficient and proper implementation of the opera-tions co-financed by the Structural Funds;
Whereas rules should be established for the conduct of controls by the
Member States and arrangements should be made for periodic consulta-tions between Member States and the Commission designed to maxi-mize the useful effect of the overall resources devoted to control atnational and Community level;
Whereas the Member States should ensure that apparent irregularities
reported by national or Community controls are investigated and satis-factorily treated;
Whereas the Member States should present to the Commission, as part
of the closure of forms of assistance, an independent statementprovidingan overall conclusion as to the validity of the request for finalpayment and allowingthe identification and satisfactory treatment ofany weaknesses or irregularities;
(1) OJ L 374, 31. 12. 1988, p. 1.
(2) OJ L 337, 24. 12. 1994, p. 11.
(3) OJ L 185, 15. 7. 1988, p. 9.
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Whereas the Member States should report to the Commission annually
on their application of this Regulation;
Whereas the Member States are required by the second subparagraph of
Article 23 (1) of Regulation (EEC) No 4253/88 to notify the Commis-sion of the description of their management and control systems;whereas these descriptions should where necessary be completed andupdated;
Whereas, in the case of forms of assistance involvingmore than one
Member State, provision should be made for administrative cooperationbetween the Member States concerned and the Commission;
Whereas the Member States should be free to apply national control
rules more rigorous than those prescribed in this Regulation;
Whereas this Regulation should be without prejudice to the provisions
of Council Regulation (Euratom, EC) No 2185/96 of 11 November1996 concerningon-the-spot checks and inspections carried out by theCommission in order to protect the European Communities’ financialinterests against fraud and other irregularities(
1) and Council Regula-
tion (EC) No 1681/94 of 11 July 1994 concerningirreg ularities and therecovery of sums wrongly paid in connection with the financing of thestructural policies and the organization of an information system in thisfield(
2);
Whereas, in accordance with Article 214 of the EC Treaty, it is neces-
sary to ensure that professional secrets obtained in the course of thecontrols provided for by this Regulation are not disclosed to unauthor-ized persons;
Whereas the measures laid down in this Regulation are in accordance
with the opinion delivered by the Management Committee on Agricul-tural Structures and Rural Development and the StandingManag ementCommittee for Fisheries Structures,
HAS ADOPTED THIS REGULATION:
Article 1
This Regulation shall apply to the forms of assistance provided for in
Article 5 (2) of Regulation (EEC) No 2052/88 and administered by theMember States.
Article 2
1. Member States’ management and control systems shall:
(a) ensure the proper implementation of the forms of assistance in
accordance with the objectives of sound financial management;
(b) provide satisfactory certification of the validity of claims for
advance payments and final payments based on expenditure actuallyincurred;
(c) provide a sufficient audit trail;
(d) specify the organization of responsibilities and in particular the
controls applied at the different levels to guarantee valid certifica-tions;
(e) facilitate the identification of possible weaknesses or risks in the
execution of actions and projects;
(f) provide for corrective measures to be taken to eliminate weak-
nesses, risks or irregularities identified in the course of projectexecution, in particular as regards financial management.
2. For the purposes of this Regulation, a sufficient audit trail is one
which permits:
(1) OJ L 292, 15. 11. 1996, p. 2.
(2) OJ L 178, 12. 7. 1994, p. 43.
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(a) reconciliation of the summary amounts certified to the Commission
with the individual expenditure records and supportingdocumentsat the various administrative and final beneficiary levels, and
(b) verification of the allocation and the transfers of the available
Community and national funds.
3. An indicative description of the information requirements for a
sufficient audit trail is given at Annex I.
Article 3
1. Member States shall organize controls of projects or actions (here-
inafter referred to as controls) on an appropriate samplingbasis,designed in particular to:
(a) verify the effectiveness of the management and control systems in
place;
(b) verify selectively, on the basis of risk analysis, expenditure declara-
tions made at the various levels concerned.
2. The controls carried out before the closure of each form of assis-
tance shall cover at least 5 % of the total eligible expenditure and arepresentative sample of the projects or actions approved, takingaccount of the requirements of paragraph3.
For forms of assistance approved before the entry into force of this
Regulation, the percentage may be reduced proportionally.
Member States shall seek to spread the implementation of the controls
evenly over the period concerned.
3. The selection of the sample of projects or actions to be subject to
controls shall take into account:
(a) the need to control an appropriate mix of types and sizes of projects
or actions;
(b) any risk factors which have been identified by national or
Community controls;
(c) the concentration of projects under certain implementingauthorities
or certain final beneficiaries, so that the main implementingauthori-ties and final beneficiaries are subject to at least one control beforethe closure of each form of assistance.
Article 4
Through the controls, the Member States shall seek to verify the
following:
(a) the practical application and effectiveness of the management and
control systems;
(b) for an adequate number of accountingrecords, the correspondence
of those records with the supportingdocuments at the level of thefinal beneficiary and the intermediate authorities;
(c) the presence of a sufficient audit trail;
(d) for an adequate number of expenditure items, that the nature and
timingof the relevant expenditure (commitments and payments)correspond to the Community requirements, to the approved phys-ical characteristics of the project and to the works actuallyexecuted;
(e) that the use or intended use of the project is consistent with the use
described in the application for Community co-financing;
(f) that the Community financial contributioins are within the limits
provided for in Article 13 of Regulation (EEC) No 2052/88 and anyother applicable Community provisions and are paid to final benefi-ciaries without any reductions or unjustified delays;
(g) that the appropriate national co-financing has in fact been made
available;
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(h) that the co-financed actions have been implemented in accordance
with the requirements of Article 7 (1) of Regulation (EEC) No2052/88.
Article 5
The controls shall establish whether any problems encountered are of a
systemic character, carryinga risk for other projects sponsored by thesame final beneficiary or administered by the same implementingauthority; they shall also identify the causes of such situations, anyfurther examination which may be required and the necessary correctiveand preventive action.
Article 6
Each Member State and the Commission shall consult at least once a
year with a view to coordinatingtheir prog rammes of controls so as tomaximize the useful effect of the overall resources devoted to controlsat national and Community level. These consultations shall cover therisk analysis techniques to be applied and shall take account of recentcontrols, reports and communications by national authorities, theCommission and the European Court of Auditors.
Article 7
1. Member States shall ensure investigation and satisfactory treat-
ment of apparent irregularities reported following national orCommunity controls.
2. If an apparent irregularity has not received satisfactory treatment
within six months of beingreported to the implementingauthorityconcerned, the Member State shall inform the Commission of the situa-tion, unless it has already done so pursuant to Regulation (EC) No1681/94.
3. For the purposes of paragraphs 1 and 2, satisfactory treatment
shall mean the presentation, by the final beneficiary or the imple-mentingauthority to the appropriate person or org anization responsiblefor control in the Member State, of sufficient evidence that the apparentirregularity does not exist or has been corrected.
If an irregularity is of a systemic character, satisfactory treatment shall
further mean the adoption of the necessary steps for the correction ofthe cases which have not been individually identified by the controlsand for the prevention of recurrence.
4. The evidence referred to in paragraph 3 may consist of copies of
the accountingrecords and supportingdocuments or any other neces-sary element.
Article 8
1. No later than at the time of the request for the final payment and
the final declaration of expenditure in respect of each form of assis-tance, Member States shall present to the Commission a statement, ofwhich an indicative model is given at Annex II, drawn up by a personor organization functionally independent of the implementing service.The statement shall summarize the conclusions of the control examina-tions made in the previous years and provide an overall conclusion as tothe validity of the request for the final payment and the legality andregularity of the operations underlying the final declaration of expendi-ture.
2. If the presence of important management or control weaknesses or
the high frequency of irregularities encountered does not allow theprovision of a positive overall assurance as to the validity of the requestfor final payment and the final declaration of expenditure, the statementshall refer to these circumstances and shall estimate the extent of theproblem and its financial impact.
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In such a case the Commission may ask that a further control be carried
out with a view to the identification and rectification of irregularitieswithin a specified period of time.
Article 9
Member States shall inform the Commission by 30 June each year and
for the first time by 30 June 1998 of their application of this Regulationin the previous calendar year, with special reference to the requirementsof Article 2 and includingany necessary completion or updatingof thedescription of their management and control systems required by thesecond subparagraph of Article 23 (1) of Regulation (EEC) No 4253/88.
Article 10
The Commission and the Member States shall work together to ensure
that the objectives of this Regulation are achieved within the frameworkof the administrative arrangement drawn up with each Member State.
Article 11
In the case of forms of assistance in which more than one Member State
participates or where there are beneficiaries in more than one MemberState, the Member States concerned and the Commission shall provideone another with any administrative assistance necessary for ensuringproper control.
Article 12
1. The persons or organizations responsible for the implementation
of the Communtiy co-financed operations shall ensure that all docu-ments and accountingrecords required for the controls are supplied tothe officials responsible for the controls or to the persons empoweredfor that purpose.
2. The officials responsible for the controls or the persons empow-
ered for that purpose may require that extracts or copies of the docu-ments or the accountingrecords referred to in parag raph 1 be suppliedto them.
Article 13
Information collected in the course of the controls shall be protected by
professional secrecy, in accordance with the relevant provisions ofnational and Community law. It may not be communicated to anypersons other than those who, by reason of their duties in the MemberStates or in the institutions of the Community, are required to haveknowledge thereof for the purposes of performing those duties.
Article 14
In accordance with the relevant national laws, Commission officials
shall have access to all documents prepared either with a view to orfollowingthe controls carried out under this Reg ulation and to the dateheld, includingthose stored in data-processingsystems.
Article 15
Nothingin this Reg ulation shall prevent Member States applying
national control rules more rigorous than those prescribed herein.
Article 16
In so far as they relate to EAGGF Guidance Section, the controls
carried out pursuant to Council Regulation (EEC) No 3508/92 (
1) and
(1) OJ L 355, 5. 12. 1992, p. 1.
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Commission Regulation (EEC) No 3887/92 (1) may also be regarded as
carried out pursuant to this Regulation.
Article 17
This Regulation shall enter into force on the 20th day following its
publication in the Official Journal of the European Communities .
Article 8 shall apply from 1 January 1998.
▼M1
However, Article 8(1) need not be applied, from 1 January 1998, toforms of intervention for which the first decision granting assistancesets the final date for Community and national commitments up to lJanuary 1997.
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B
This Regulation shall be binding in its entirety and directly applicable in
all Member States.
(1) OJ L 391, 31. 12. 1992, p. 36.
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ANNEXI
INDICATIVE DESCRIPTION OF INFORMATION REQUIREMENTS
FOR AUDIT TRAIL
(Article 2 (3))
A sufficient audit trail, as referred to in Article 2 (3), is present when, for a given
form of assistance:
1. Accountingrecords kept at the appropriate manag ement level provide detailed
information about expenditure actually incurred by final beneficiaries for eachco-financial project, includingthe date of the accountingrecord, the amountof each expenditure item, the identification of the supportingdocument andthe date and method of payment; the records are supported by the necessarydocumentary evidence (e.g. invoices).
2. In cases of expenditure items relatingonly partly to the Community co-
financed operation, sufficient justification is present of the accuracy of theallocation of the amount between the Community co-financed and the otheroperations. Similar justification is present also for types of expenditure whichare recognized as eligible within limits or in proportion to other costs.
3. The technical and financial plans of the project, the progress reports, the
documents concerningthe g rant approval, the tenderingand contractingprocedures, etc., are kept available at the appropriate management level.
4. In reportingexpenditure actually incurred to an intermediate authority, the
information referred to in paragraph 1 is aggregated in a detailed statement ofexpenditure indicatingfor each Community co-financed project all individualexpenditure items with a view to composingthe total certified amount. Thesedetailed statements of expenditure constitute the supportingdocuments of theaccountingrecords of the intermediate authorities.
5. The intermediate authorities keep accountingrecords for each individual
project and for the summary amounts of expenditure certified each time bythe final beneficiaries. In reportingto the desig nated authority referred to inArticle 21 (5) of Regulation (EEC) No 4253/88, intermediate authoritiespresent a list of the projects approved under each form of assistance, togetherwith information for each individual project comprisingat least a completeidentification of the project and the final beneficiary, the date of approval ofthe grant, the amounts committed and paid, the expenditure period coveredand the sums of expenditure by measure and by sub-programme. This infor-mation constitutes the supportingdocumentation of the accountingrecords ofthe designated authority and is the basis for the preparation of the declarationsof expenditure to be presented to the Commission.
6. In cases of final beneficiaries reportingdirectly to the desig nated authority,
the detailed statements of expenditure referred to in paragraph 4 constitute thesupportingdocumentation of the accountingrecords of the desig natedauthority, which is responsible for drawingup the list of projects referred toin paragraph 5.
7. In cases of more than one intermediate authority interveningbetween the final
beneficiary and the designated authority, each intermediate authority for itsarea of responsibility requires detailed statements of the expenditure amountsprocessed at the lower level to be used as supportingdocumentation for itsown accountingrecords of which it reports upwards at least a summary of theexpenditure amounts for each individual project.
8. In cases of other models of organization of the management and information
procedures, includingcomputerized data transfers, all authorities concernedobtain sufficient information from the lower level to justify their accountingrecords and the sums reported upwards, thus ensuringa satisfactory audit trailfrom the summary amounts certified to the Commission to the individualexpenditure items and the supportingdocuments at the final beneficiary level.
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ANNEXII

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