As some Member States report a very low number of fraudulent irregularities, in particular in relation to the amount of funds allocated to them, the Commission recommends strengthening their work on detecting and/or reporting fraud:

Member States are requested to further improve quality control of the information submitted via the Irregularity Management System (IMS), in particular information on:

The requirements to safeguard the CAP from fraud are contained in Regulation 907 of 2014. Paying agencies in the UK are audited annually by the Certifying Body and are assessed by the auditors against Reg 907/2014 accreditation criteria and we have not been found to be deficient in this area.

The UK’s approach to CAP fraud is based on prevention during the claim processing, administration and payment processes. For EU funding programmes, all UK agencies with responsibility for distributing CAP funds have processes in place to monitor and report fraud in line with current regulations. The high standard of checks means that levels of such fraud are low in the UK. Any cases of fraud pre/post-payment are reported to the EU Anti-Fraud Office. The low levels of reporting show that the UK’s approach is effective. Nevertheless, the UK Authorities continue to strive to do more to address this important issue.

In the area of agriculture the anti-fraud training has continued as part of the EU Paying Agency’s training activities. Efforts have been made in order to raise the level of fraud awareness among the controllers and auditors of the funds. In addition, the checklists used by the controllers have been updated and more fraud-related questions added. A new information system with reporting tools also allows more specific statistical analysis.

When reporting on irregularities in Slovenia under Objective 1, the reviewer (acting as the manager) particularly closely inspects whether all the required fields have been completed; we pay utmost attention to the completion of fields 1.16 and 1.17 in conjunction with the data entered under points 3 and 4, 6 and 7, and also 8 and 9. The last two concern the financial consequences of an identified irregularity and the recovery of funds. Where no, incomplete or inconsistent data is entered, the manager will reject the report and send it back to the author with comments. Support to the manager is provided in the form of the IMS manual (which could be more detailed) as well as any information and instructions received by email from OLAF (Unit 2D) on how to enter data into the IMS. This information, i.e. guidelines, is being forwarded to report drafters as assistance for entering data, i.e. reporting on irregularities.

AKTRP is working to improve on identifying fraud. Lately the emphasis has been on improvements to the register of fraud indicators.

When filling in the report in the IMS system, the AKTRP always seeks to provide a detailed description of the irregularities under the heading Modus Operandi. The description, for the most part, is taken verbatim from the request for the recovery of funds sent to the client by the paying agency.

-In relation to the above, we would point out that it is not just the Member States that are responsible for the quality of IMS data, the Commission’s actions also have a major impact here.

-Any shortcomings identified by the Commission in the IMS database are, however, to be linked to the migration of data during the Commission’s implementation of successive IMS versions over the last few years. These successive versions merged individual modules, codified data, modified the report form and transferred certain content to other fields, which resulted in part of the information being irretrievably lost. This loss cannot be blamed on Member States because the entire migration of data was carried out without their participation by the Commission alone, in line with the strategy adopted. Another example of Commission actions that have had a very negative effect on the quality of IMS data is the deletion of names and project numbers in all declarations in the database, along with the locking of the manual adjustment to make way for a drop-down list in the future (this turned out not to be technically feasible as, for example, in Poland, just for cohesion policy for the periods 200713 and 2014-20, over 160 000 agreements have been signed to date for funding projects, and more are being signed every day). In Poland’s opinion, the day-to-day management and updating of such a list of all projects, only a small percentage of which are affected by irregularities and actually used by IMS, is unnecessary and practically impossible. Moreover, in subsequent IMS versions, the Commission dropped functionalities that served to prevent errors (e.g. automatic totalling of amounts or system corrections for subsequent fields in the form).

-Poland has duly implemented uniform national procedures and guidelines for individual reporting for the period 2000-20. In each reporting period, it continuously monitors and verifies the accuracy of the reports submitted. In the light of the above, all declarations sent by Poland contain information of similar quality, scope and level of detail and, in each case, meet the requirements laid down in EU legislation.

-Poland is doing everything it can to meet its obligations under the rules governing the process for reporting irregularities. As show in the Commission’s annual PIF Report, Poland also differs from other Member States with regard to the cases of irregularities and suspected fraud it reports to the Commission, in that it is quick to pass on data it obtains to the Commission, enabling appropriate risk analyses to be carried out in this area and used for their intended purpose. Over the last few years, Poland has built up considerable experience on the reporting of irregularities; it has been actively involved in COCOLAF and has helped the Commission draft implementing and delegated acts on the reporting of irregularities for the period 2014-20 and draw up the new Guidelines.

Furthermore, recoveries relating to one or more years earlier can also be made in the case of multiannual commitments (in particular for agri-Furthermore, recoveries relating to one or more years earlier can also be made in the case of multiannual commitments (in particular for agri-environmental measures). The high number of administrative checks carried out in this sector means that cases of fraud can generally no longer occur. There are therefore de facto now only very few, sporadically arising cases of suspected fraud. In nearly all cases, the irregularity consists simply in the non-fulfilment of one or more of the funding conditions. The subsequent recoveries (starting from 1 euro cent) are registered immediately and more than 90 % are made within a year by setting them off against other claims.

All the planned control measures are aimed at detecting any irregularities before disbursement, where appropriate taking account of penalties when calculating the aid payment.

·any irregularities that are already known (concerning the applicant and/or measure) are to be considered.

Depending on the aid measure, the required on-site inspections are carried out for between 5 % and 100 % of the aid applications. Risk factors are to be taken into account in the selection of control samples, whereby factors such as

A comprehensive monitoring system is in place to detect any irregularities and fraud in relation to these payments. The system encompasses all stages, from the submission of an application to disbursement. The relevant conditions are set out in Regulations Nos 1306/2013, 907/2014 and 908/2014.

It should be borne in mind that aid in the agricultural sector is disbursed by officially authorised paying agencies which are supervised by the Member State and by the Commission.

When account is taken of the abovementioned points, Austria's reports on the agricultural sector for 2016 should already be almost fully complete.

The printout of a dossier currently requires 12 pages (rather than the previous maximum of 3 pages) for the same volume of information. This makes quality control more difficult.

The new IMS reporting system means that 2015 was a year of ‘apprenticeship’ for Austria. The following is to be noted:

·the Working Group of the EU funds irregularities inspectors set up by Order of the Minister of Finance of the Republic of Lithuania No.1K-115 of 16 April 2009 “On the Establishment of the Working Group of the EU Funds Irregularities Inspectors” (as amended by Order No. 1K-75 of 2 March 2016) has incorporated the STT representatives as observers. The working group is responsible for both 2007-2013 and 2014-2020 programming periods and tackles the issues related with detection, investigation, elimination and prevention of irregularities (including the suspected fraud cases), coordinates the respective activities and addresses the issues on irregularities and suspected fraud risk management. For example, the meeting of the Working Group on 29 November 2016 discussed the amendments to the legal acts on the administration of irregularities, other relevant issues raised by institutions, would-be and already implemented anti-fraud and anti-corruption measures as well as actions to be taken upon the suspicion of criminal offences.

·the procedure for the provision of information on pre-trial investigations to the managing authority has been adjusted. It has been established that STT and FNTT should inform the managing authority in accordance with the procedure prescribed by laws on the opened and/or terminated pre-trial investigations into the suspected criminal acts related with the unlawful receipt and/or use of the EU structural funds. The managing authority, ministries and implementing authority must immediately report the suspected corruption-related criminal acts and suspected fraud cases to STT and FNTT respectively. Information on the afore-mentioned offences must be accordingly provided to the managing authority, implementing authority and the respective ministry (Resolution of the Government of the Republic of Lithuania No. 485 of 18 May 2016 “On the Amendment of Resolution of the Government of the Republic of Lithuania No. 1090 of 3 October 2014 “On the Approval of the Rules of Administration of the Operational Programme for the European Union Structural Funds Investments in 2014-2020”; Order of the Minister of Finance of the Republic of Lithuania No. 1K-184 of 18 May 2016 “On the Amendment of Order of the Minister of Finance of the Republic of Lithuania No. 1K-316 of 8 October 2014 “On the Approval of the Project Administration and Financing Rules”);

·the EU structural funds administration system 2014-2020 including, inter alia, Financial Crime Investigation Service (FCIS), has also incorporated the Special Investigation Service (STT) responsible for detection and investigation of corruption-related criminal acts and development and implementation of corruption prevention measures (Resolution of the Government of the Republic of Lithuania No. 473 of 11 May 2016 „On the Amendment of the Resolution of the Government of the Republic of Lithuania No. 528 of 4 June 2014 'On the Allocation of Responsibilities and Functions among the Institutions Implementing the Operational Programme for the European Union Structural Funds Investments in 2014-2020'). Both pre-trial investigation institutions participate in the implementation of the Operational Programme for the European Union Structural Funds Investments in 2014-2020 approved by the EC Implementing Decision of 8 September 2014 (notified under document No. C(2014)6397);

In order to strengthen cooperation of institutions administering the EU structural funds and pre-trial investigation institutions and enhance their administrative capacities in counteracting fraud and corruption in the area of administering the EU structural funds, the following measures were implemented in 2016:

During the administration of projects in the programming period 2007-2013, 14 irregularities classified as Suspected Fraud (IRQ3) were reported to the EC via IMS before 19 January 2017 (see the attached list). Furthermore, the EU Structural Assistance Computer-Based Information Management and Monitoring System (SFMIS) show that on 15 December 2016 the court recognised criminal offences in two projects (No. VP3-1.3-ŪM-06-K-02-075 and No. VP2-2.1-ŪM-02-K-02-153). On this basis, information on them will be updated in IMS (IMS case No. 96159 and No. 88849) after the updated reports on the irregularities are received from the IA administering the projects.

In cases where IA suspects a criminal act but on the basis of the assessment of all the circumstances related with it has no grounds, within the scope of its competence, to establish the occurrence thereof (e.g. is not entitled to state that a proof of expenditure raising the suspicion of fraud is actually forged), the investigation of the irregularity is terminated without establishing the irregularity and the results of pre-trial investigation and court decision regarding the criminal act are anticipated. Having received the court decision, the investigation of the regularity is reopened, the occurrence of irregularity is approved and it is classified as Fraud (IRQ5). If the irregularity in question were related to amounts of more than EUR 10 000 chargeable to the general budget of the European Communities, the EC would be notified via IMS.

Irregularities are reported electronically to the EC during a 2-month period that follows the quarter in which the irregularity was detected via the Irregularities Management System (IMS) administered by OLAF. Irregularities whereon pre-trial investigation institutions are informed or which are related with pre-trial investigations conducted by these institutions with regard to a respective project are qualified as a Suspected Fraud (IRQ3) and are reported via the IMS.

Having detected irregularities (i. e. having taken a decision that the irregularity has been committed and related ineligible costs have been identified), IA reports these irregularities to the EC taking onto account the exceptions provided for in the EC regulations.

In the case of suspecting criminal acts, IA should immediately inform about that relevant pre-trial investigation institutions such as FCIS (in the case of suspected fraud) or STT (in the case of suspected corruption) that shall take a decision on the institution of a pre-trial investigation.

IA may suspect irregularities and institute the investigation of irregularities in the course of administration of the project, having noticed information in the mass media or having received information from other institutions (e.g. managing authority, certifying authority, audit authority, other IA, EC, European Court of Auditors, Public Procurement Office, Competition Council, Financial Crime Investigation Service (FCIS), Special Investigation Service (STT, anticorruption agency), the public or any other sources).

The procedure of detection, investigation and reporting of irregularities related with the projects co-financed from the EU structural funds (further - projects) is established in the legal acts regulating the administration of the EU structural funds. The established procedure provides for the detection and investigation of irregularities by the project Implementing Authority (further – IA).

In order to ensure that the data and information provided is relevant and qualitative, the examination of the reports cross-checks are done on two levels - both paying agency level, which is responsible for reporting, verification and transmission of information to the Managing Authority by using the IMS facilities, as well as on the level of the Managing Authority who’s responsibility is to evaluate the report, to verify it and submit to Commission, via the IMS. Each institution level checks respects the four-eye principle, thus providing relevant data and information relevance and quality. IMS reports are filled in accordance with the respective requirements and quality.

Information about irregularities in OLAF reporting system is detected by FEAD Intermediate body, which is responsible for decisions regarding the acceptance of irregularities.

In regards to the FEAD: The Ministry of Welfare as a FEAD Managing authority has delegated to FEAD Intermediate body establishing and maintaining FEAD Information system, in which the FEAD Certification authority gathers and saves information of amounts due to be recovered, and of amounts withdrawn following cancellation of all or part thereof (in accordance with Article of Regulation No 223/2014 32. Article 2 () ("d", "e" and 33 'd "," g "," h "().

In addition once a year after OLAF request to check data indicated in IMS (in order to ensure that all figures are correct in Annual Reports on the protection of the EU's financial interests), the Managing Authority of Latvia (hereinafter – MA) exports prior year irregularities from IMS in order to check correctness of the data and is it necessary to update information about irregularity.

To ensure the best possible analysis of irregularities concerning breaches of procurement rules, Latvia introduced a new drop-down-list for irregularity type “Breaches of the procurement rules” in the national Cohesion Policy Funds information management system analogous to drop-down-list of type of irregularity “Public procurement” in European Anti-Fraud Office Irregularity Management system. Mentioned measure has been implemented in order to provide exceptionally detailed analysis of breaches of the procurement rules, as a result it will contribute towards enhancement of measures aimed to reduce the amount of irregularities in procurement sphere, as well to provide methodology support, aimed to the most weakness branches of procurement as a control mechanism.

The Managing Authority for EU structural funds and the Cohesion Fund, Namely ESF, CF and ERDF has made the following improvements:

Additionally, SCIF as a coordinative body of the AFCOS system in Croatia and main contact point with OLAF checks quality of irregularity reports prior to reporting to OLAF and if necessary returns reports to a body concerned for a correction.

Moreover, SCIF continuously conducts regular meetings with Irregularity Reporting System bodies (IMS users) in relation to implementation of Guidelines in the context of Structural instruments and ESI Funds as well as it conducts meetings with AFCOS Network bodies in cases of suspected fraud.

Furthermore, during 2016, SCIF organized several workshops in regards to use of IMS for the relevant IMS users. During workshops special emphasis was put on the improvement of quality of irregularity reports within IMS.

In order to improve the quality of irregularity reports within IMS, Service for Combating Irregularities and Fraud (hereinafter: SCIF) drafted new version of Guidelines on Irregularity Management in the context of Structural instruments and ESI Funds (hereinafter: Guidelines) which were adopted by Minister of Finance on December 7, 2016. Purpose of Guidelines is to prescribe procedures for prevention, detection, treatment, reporting and follow up of established irregularities related to the use of Structural instruments and ESI Funds in the context of irregularity reporting. According to Article 5 (3) a of Regulation on the Institutional Framework of the System of Combating Irregularities and Fraud (OG 144/2013) Irregularity Reporting System bodies (IMS users) are obliged to follow procedures which are described within the Guidelines concerned.

·stepping up cooperation in the fight against fraud between the paying agency and the external control bodies: organisation of information exchange meetings on dealing with intentional noncompliance with a view to establishing an early warning system for cases of suspected fraud identified during post-clearance controls.

·development of an area dedicated to dealing with fraud risks on the institution’s intranet (rules, instructions, alert procedures, minutes of knowledge-sharing meetings, etc.).

·first meeting of the dedicated governance body (validation of the alert procedures; presentation of the fraud statistics following ex-post controls (EAGF non-IACS — integrated management and control system);

·the improvement of knowledge sharing in respect of cases of fraud or attempted fraud detected by the institution and the external control bodies: the establishment of a factsheet on fraud cases, sharing of the factsheets with all stakeholders (management and on-the-spot checks; accounting department), proposal for the improvement of the control systems;

·a review of the fraud penalty systems provided for in Community horizontal and/or sectoral legislation, and if necessary, the improvement of the national framework (agricultural sector);

·the formalisation of alert procedures in the event of suspected fraud, either external or internal, or where there is a risk of conflict of interest;

·awareness-raising sessions focusing on the prevention, detection and handling of fraud risks. 454 people were trained (including 96 in the regional departments). The 3 EU funds in which the institution is involved, either as paying agency — PA (EAGF) or intermediate body — IB (FEAD and EMFF) are covered as are the authorities dealing with public procurement matters;

- Finally, the paying agency for agricultural aid (FranceAgriMer - FAM) bolstered its internal control action plan in 2015 with anti-fraud measures (awareness-raising activities for staff, educational initiatives: analysis of fraud cases encountered and exchanges on these cases, etc.). A memorandum stressing the sensitive nature of the subject of ‘fraud’ and describing the action plan to be deployed was circulated to all staff on 16 June 2015. It was accompanied by a memorandum on the agency’s internal control policy and a presentation on the different components of the plan.

- the Office of the Commissioner General for Territorial Equality (CGET) has organised regular meetings for all the authorities responsible for European programmes, covering different topics including the fight against fraud; the aim is to facilitate and safeguard the implementation of programmes co-financed by the European Structural and Investment Funds (ESIF). Since 2013, the CGET has set up an inter-fund working group on this subject in direct response to requests by the authorities responsible for European programmes (internal control, conflict of interest, whistle-blowers, etc.) and has also drawn up reference documents. Furthermore, in the context of fortnightly meetings with the Directors in charge of implementing the operational programme, the CGET has invited a representative of the National Anti-fraud Delegation (DNLF - the French Antifraud Subcommittee (SCAF)/Anti-fraud Coordination Service (AFCOS) to come and outline the Commission’s expectations with regard to the fight against fraud under the Structural Funds. The tools developed by OLAF and the DNLF for detecting fraud in connection with the ESIF are available on the CGET’s digital platform, bringing together all actors involved in implementing the ESIF in France. Finally, the national technical assistance programme 2014-2020 plans to fund training courses for programme management authorities, certifying authorities and audit authorities on different areas, including public procurement, taking particular account of the European Court of Auditors’ Special Report on problems with public procurement in connection with the ESIF. A national-level working group has been set up to organise the implementation of these training courses, in particular in the following areas:

- the Inter-ministerial Commission for the Coordination of Inspections (CICC), audit authority for EU funds in France (CICC-Structural Funds), has developed new instruments to help its operations auditors incorporate the anti-fraud dimension in the performance of their tasks. This was particularly the case when the list of public procurement controls was being reviewed to ensure proper use of the ARACHNE tool in accordance with the instructions issued by the department responsible. The CICC has also developed a training programme for its operations auditors. One of the training modules focuses on raising awareness of issues related to detecting fraud or suspected fraud.

In response to recommendation No 3 on improving the quality of the information submitted on irregularities, which recommends that efforts be stepped up in detecting and/or reporting on fraud, the French authorities have implemented the following measures:

These provisions are without prejudice to the rules on reporting of irregularities and suspected fraud set out in General Instruction 2/2015 of the Spanish Agricultural Guarantee Fund on measures for fraud prevention and detection.

The administrative authority which received the request from OLAF must notify OLAF that the classification of the irregularities as suspected fraud was carried out in compliance with these rules and that the measures have been sent to the National Anti-Fraud Coordination Service, which OLAF may contact to obtain the information requested.

In the event that the European Anti-Fraud Office (OLAF) requests information on the follow-up of irregularities classified as suspected fraud under these rules, and the request was addressed to the administrative authority which had reported the irregularities concerned, the National AntiFraud Coordination Service must be notified of the request, so that it can manage relations with OLAF with regard to the follow-up of the irregularities.

If possible, the authority concerned shall immediately inform the National Anti-Fraud Coordination Service of the irregularities reported in relation to the operations or projects that were subject to the criminal proceedings and submit to the Service a copy of the report or measure in which the administrative authority confirms the existence of the irregularities in question.

Where, prior to receiving any notification from the National Anti-Fraud Coordination Service, an administrative authority responsible for the management, certification or audit of one of the funds referred to in section ONE is aware of the existence of the legal proceedings referred to in that section, the authority concerned shall inform the Service so that the latter may initiate the measures referred to in sections THREE and FOUR of these rules.

SIX – Measures to be taken when the authorities responsible for the management, certification or audit of the funds referred to in section ONE are aware of the legal proceedings.

5. The measures referred to in the previous sections shall be carried out provisionally where the initial judgment has been delivered and, if necessary, amended, once the judgment has become final.

4. From the moment the authorities referred to in the preceding point receive the final judgment from the National Anti-Fraud Coordination Service, the classification of the new irregularities detected in the operations or projects concerned by the proceedings shall be conducted in accordance with the guidelines set out in Community legislation and in any instructions approved by the competent bodies.

The National Anti-Fraud Coordination Service shall also send the judgment to the other administrative authorities with responsibility for the management, certification and audit of EU funds which financed operations or projects concerned by the criminal proceedings.

In the subsequent notification to the Commission the authorities shall update their reports on those irregularities as established for each case in point 2 of this section, as well as reporting the update to the National Anti-Fraud Coordination Service.

It shall also indicate separately to each of those authorities the irregularities which fall under 2a) of this section and those which fall under 2b) of this section.

3. For the purposes of complying with the provisions in point 2 of this section, the National AntiFraud Coordination Service shall forward the final judgment to the authorities which notified the European Commission of the irregularities detected in operations or projects concerned by those proceedings.

c) In relation to conduct classified as a criminal offence by the above judgment which did not give rise to any reporting of irregularity under the procedures for reporting irregularities referred to above, the National Anti-Fraud Coordination Service shall inform the European Commission under those procedures of an irregularity for each act, and shall be required to classify them as ‘established fraud’ for the purposes of that reporting.

Without prejudice to the previous paragraphs, if, prior to the completion of the criminal proceedings, the National Anti-Fraud Coordination Service has clear evidence that any of the irregularities detected in the operations or projects concerned is in no way related to the conduct under investigation or are being prosecuted, it may instruct the reporting authority to withdraw the classification as suspected fraud by updating the report under the procedures for reporting irregularities laid down in Community legislation.

This applies without prejudice to any further measures or pending legal proceedings which might affect the entity or the operations or projects concerned by the judgment, provided that such measures have not been completed.

b) In relation to irregularities reported to the European Commission which do not correspond to any of the acts classified as a criminal offence by the judgment, the reporting of these irregularities to the European Commission must be updated to the effect that they are no longer classified as ‘suspected fraud’ under the procedures for reporting irregularities set out in the Delegated and Implementing Regulations referred to above.

a) Those irregularities reported to the European Commission which correspond to conduct classified as a criminal offence in the judgment must be classified as ‘established fraud’ for the purpose of reporting to the European Commission under the procedures for reporting irregularities set out in the Delegated and Implementing Regulations referred to above.

2. In view of the content of judgment, the following action shall be taken in respect of the irregularities detected in the operations or projects concerned by the criminal proceedings:

1. After the end of the criminal proceedings referred to in the above sections, the National Anti-Fraud Coordination Service shall analyse the final judgment and identify any conduct classified as a criminal offence therein.

5. The provisions in point 4 of section THREE of these rules shall apply to irregularities that the competent administrative authorities detect and/or report to the European Commission after the notification referred to in point 1 of this section in respect of operations or projects affected by the criminal proceedings in question.

4. Each time that, through the procedures set out in Community legislation, the competent administrative authorities report a new irregularity in operations or projects concerned by the criminal proceedings, the reporting authority shall notify the National Anti-Fraud Coordination Service and shall forward to it, within 15 days, a copy of the report or measure in which the administrative authority confirms the existence of the irregularity, as well as any other documentation that the Service may request in that regard.

3. For the purposes of the previous paragraph, and in the light of the information obtained on the criminal proceedings, the National Anti-Fraud Coordination Service may recommend to the competent administrative authorities that additional measures or controls be carried out on operations or projects implemented by the same entity or related to those that are subject to the criminal proceedings.

2. Where any of the actions that were the subject of the criminal proceedings aimed at establishing whether they constituted a criminal offence was not reported as an irregularity under the procedures referred to above, the National Anti-Fraud Coordination Service shall assess the circumstances for the purpose of reporting the conduct in question as an irregularity to the European Commission. The irregularity shall be classified as suspected fraud, the costs being borne on the basis of the outcome of the legal proceedings and, therefore, there would be no need to initiate a recovery procedure until the irregularity is established in the judgment closing the legal proceedings.

The notification shall specify that, from receipt of that notification, any new irregularity subsequently detected and/or reported to the European Commission in relation to those projects or operations must be classified from the outset as suspected fraud under the procedures for reporting irregularities set out in the Delegated and Implementing Regulations referred to above.

1. Without prejudice to the procedure set out in section THREE, and as soon as the Member State becomes aware of the existence of the legal proceedings referred to in section TWO, the National Anti-Fraud Coordination Service shall notify all administrative authorities with responsibility for the management, certification and audit of the EU funds which financed the projects or operations of the existence of the proceedings and the operations or the projects affected by them.

FOUR – Procedure to be followed for the irregularities subsequently detected and/or reported to the European Commission.

4. Where the circumstances of the case allow, the National Anti-Fraud Coordination Service shall inform the public prosecutor or the court concerned of all the irregularities detected in operations or projects subject to the legal proceedings and may provide them with any related documentation from the competent authorities under the provisions of the previous point of this section, and shall inform them in any event that the documentation relating to the irregularities is available from the National Anti-Fraud Coordination Service.

3. After updating the reports through the procedures set out in Community legislation, each of the authorities referred to in the previous paragraph shall notify the National Anti-Fraud Coordination Service of the update and shall forward to it, within 15 days, a copy of the report or measure in which the administrative authority confirms the existence of the irregularities concerned, as well as any other documentation that the Service may request in that regard.

Where the person or entity subject to the legal proceedings is known, but none or only part of the operations or projects concerned could be identified, the National Anti-Fraud Coordination Service, in the light of the circumstances of the case, shall consider how to deal with the irregularities reported to the European Commission in relation to that person or entity, as regards their classification as suspected fraud. The same shall apply to irregularities detected and/or reported in relation to that person or entity after the notification referred to point 1 of section FOUR.

2. Subsequently, the Service shall notify the authorities which reported those irregularities of the existence of criminal proceedings affecting the operations or projects in which the irregularities were detected and instruct them to immediately update the initial report for the purpose of classifying the irregularities as suspected fraud.

1. As soon as the existence of the legal proceedings referred to in section TWO becomes known, the National Anti-Fraud Coordination Service shall identify the irregularities detected in operations or projects concerned by those proceedings that have been notified to the European Commission under the procedures set out in the Delegated and Implementing Regulations referred to above.

THREE – Procedure to be followed for the irregularities already detected and reported to the European Commission.

For the purposes of implementing the above paragraph, the procedure set out below shall be followed.

Whenever by any truthful means the existence of legal proceedings aimed at establishing conduct which may constitute a criminal offence affecting operations or projects fully or partly financed from one of the Funds referred to in section ONE becomes known, all irregularities detected in those projects or operations must be classified as ‘suspected fraud’ for the purpose of reporting them to the European Commission under the procedures for reporting irregularities set out in the Community Regulations referred to above.

The classification of an irregularity as a suspected fraud in accordance with these provisions shall be solely for purpose of reporting to the European Commission under the procedures for reporting irregularities under those Funds set out in Delegated Commission Regulations (EU) 2015/1970, 2015/1971, 2015/1972, 2015/1973 of 8 July 2015, and Commission Implementing Regulations (EU) 2015/1974, 2015/1975, 2015/1976 and 2015/1977 of 8 July 2015, or in those replacing them in the future.

This document is intended to establish guidelines on the classification as suspected fraud of irregularities detected under the European Regional Development Fund, the European Social Fund, the Cohesion Fund, the European Maritime and Fisheries Fund, the European Agricultural Fund for Rural Development, the European Agricultural Guarantee Fund, the Fund for European Aid to the Most Deprived, the Asylum, Migration and Integration Fund and the instrument for financial support for police cooperation, preventing and combating crime, and crisis management, where the existence of legal proceedings aimed at establishing conduct which may constitute a criminal offence affecting operations or projects fully or partly financed by those Funds becomes known.

The 25th additional provision of Law 38/2003 of 17 November 2003 (General Law on Subsidies – LGS) states in paragraph 2c) ‘it is for the National Anti-Fraud Coordination Service ... to establish channels for coordinating and sharing information on irregularities and suspected fraud between the various national bodies and OLAF’. The Service is thus responsible for establishing the procedures and common guidelines for action referred to in the preceding paragraphs, as well as managing relations with OLAF with regard to the information the latter may request in relation to the follow-up of irregularities which in accordance with these instructions have been classified as suspected fraud.

In view of the above, and specifically with respect to legal proceedings, this document sets out the criteria and procedures for the national authorities responsible for reporting irregularities to the Commission to have access to information regarding the legal proceedings aimed at establishing conduct which may constitute a criminal offence affecting operations or projects fully or partly financed with funds from the European Union, and to classify the irregularities relating to those projects or operations under the procedures for reporting irregularities to the European Commission in order to ensure uniform and coordinated action by the national authorities involved.

In this context, paragraph 5.1 (on the concept of ‘suspected fraud’) of the working document on the fight against fraud and other illegal activities - requirements for the reporting of irregularities by the Member States, drawn up by the European Anti-Fraud Office (OLAF) in 2011, states among other things that any irregularity should be classified as suspected fraud if it is reported to the public prosecutor for the purpose of taking the appropriate action.

The existence of administrative or judicial proceedings aimed at establishing the presence of fraud is thus a decisive factor in classifying a given irregularity as suspected fraud for the purpose of reporting it to the Commission.

Suspected fraud means ‘an irregularity that gives rise to the initiation of administrative or judicial proceedings at national level in order to establish the presence of intentional behaviour, in particular fraud, as referred to in Article 1(1)(a) of the Convention on the protection of the European Communities’ financial interests’.

CRITERIA ON THE CLASSIFICATION OF AND ACTION TO BE TAKEN IN RELATION TO IRREGULARITIES AND SUSPECTED FRAUD IN OPERATIONS OR PROJECTS THAT ARE SUBJECT TO CRIMINAL PROCEEDINGS.

Finally, two cases of irregularities reported as suspected fraud in 2016 under the Common Agricultural Policy were based on the application of the criteria of the National Anti-Fraud Coordination Service referred to above.

In addition, the data currently contained in IMS show, in the context of the Cohesion Policy, an increase in irregularities reported as suspected fraud in 2016 (5) compared with those initially reported in 2015 (1). Irregularities for the last quarter of 2016 are still to be reported; the deadline being the end of February.

Thanks in part to the adoption of the above criteria by the National Anti-Fraud Coordination Service, a large number of irregularities in 2015 have been classified as suspected fraud. As can be seen in the IMS application, at present 102 irregularities are classified as suspected fraud in Cohesion Policy – compared with a single case in the 2015 PIF report – and one irregularity is classified as suspected fraud in the Common Fisheries Policy, compared with no cases in the 2015 PIF report.

A procedure is also established for the National Anti-Fraud Coordination Service to follow up on those irregularities.

That being the case, the fundamental idea behind the above criteria established by the National Anti-Fraud Coordination Service (a copy of which is attached as an annex to this document) is that whenever knowledge is acquired by any truthful means of the existence of legal proceedings aimed at establishing conduct which may constitute a criminal offence affecting operations or projects funded in whole or in part by one of the funds under the IMS system, all irregularities detected in those projects or operations must be classified as ‘suspected fraud’ for the purpose of reporting them to OLAF under the procedures for reporting irregularities set out in the Community rules referred to above.

In this context, section 5.1 (on the concept of ‘suspected fraud’) of the working document on the fight against fraud and other illegal activities - requirements for the reporting of irregularities by the Member States, drawn up by the European Anti-Fraud Office (OLAF) in 2011, states among other things that any irregularity should be classified as suspected fraud if it is reported to the public prosecutor for the purpose of taking the appropriate action.

The existence of administrative or judicial proceedings aimed at establishing the presence of fraud is thus a decisive factor in classifying a given irregularity as suspected fraud for the purpose of reporting it to OLAF.

The criteria are based on the assumption that, in accordance with the applicable European rules, suspected fraud means ‘an irregularity that gives rise to the initiation of administrative or judicial proceedings at national level in order to establish the presence of intentional behaviour, in particular fraud, as referred to in Article 1(1)(a) of the Convention on the protection of the European Communities’ financial interests’.

2) With regard to the need to improve the reporting of irregularities which constitute fraud or suspected fraud, it should be noted that on 3 February 2016 the National Anti-Fraud Coordination Service adopted criteria on the classification of and procedure on action to be taken in relation to irregularities and suspected fraud in operations or projects subject to criminal proceedings, addressed to all the authorities responsible for the management, certification and audit of all European funds which are required to report irregularities via the IMS system.

The training will be eminently practical and aimed at pointing out the most relevant fields of the IMS system that should be filled in in every case, as well as the specific information to be included in each field, thereby clarifying any doubts which people may have.

In order to solve this problem, once IMS 5 is operational – and both the entities reporting irregularities via IMS and those that will have to start doing so in the new 2014-2017 framework are familiar with the new system and have solved the problems arising from the transition from one system to another — in the course of 2017 the National Anti-Fraud Coordination Service and the National Audit Office, which is responsible for validating the reports of irregularities by all the bodies and entities in the system before they are sent to OLAF, intend to organise a number of training days for those responsible for filling in the necessary fields for reporting irregularities.

In the light of the problem raised in the 2015 PIF report, and with a view to improving reporting of irregularities, at the meetings held over the year with the various bodies and entities which report irregularities – and thus must fill in the necessary fields – it was found that the cause of the shortcomings in the information provided is usually the lack of clear instructions on how to fill in the different fields in the system.

This coupled with the plethora of intermediate bodies at national level, means that a large number of bodies and entities are obliged to report irregularities in Spain, which hampers effective coordination.

1) As regards the quality control of the information on irregularities sent via IMS, it should be pointed out that Spain has a highly decentralised administrative structure in which the Autonomous Communities manage a substantial share of European funds, each of them in turn through a multitude of bodies and entities.

Our institutions detect a few fraudulent irregularity cases every year and we keep OLAF informed of the situations of the cases by sending via the IMS additional reports with essential information quarterly until the case is completely (if applicable, including judgement) and finally solved.

So far OLAF has not had any complaints regarding the quality of the reports on Estonian irregularities. Our SF Managing Authority, who is responsible for the irregularity reporting to OLAF, does thorough data checks and approves correct data only. The 2nd level Intermediate Authorities must enter into our Managing Information System (MIS) an irregularity report as soon as they have first or new additional information. That means, we do not have an extra burden at the end or beginning of each quarter. The Managing Authority just imports from the MIS into the IMS all irregularity reports exceeding EUR 10 000 in the specific quarter.

The structural funds’ managing authority also keeps abreast of the Commission’s and Member States’ activities for drawing up more detailed guidelines for reporting irregularities.

In line with the current internal organisation of the structural funds’ managing authority, which aims to ensure enhanced and consistent assessment of cases of suspected fraud, emphasis is also placed on improving the internal procedure for reporting irregularities, including the information transmitted via IMS.

Denmark gives priority to observing the Commission’s guidelines for reporting via IMS. With regard to irregularities involving the agricultural funds, in 2014-2015 Denmark revised the reporting procedure, thus greatly improving the consistency and accuracy of reports.

The AFCOS Directorate coordinates the use at national level of the electronic Irregularity Management System (IMS) in line with the relevant OLAF guidelines, thereby ensuring its proper functioning. IMS maintenance and administration requires daily correspondence with OLAF and the national units authorised to use the system to ensure access, troubleshooting and other technical and methodological support. The AFCOS Directorate conducts training events for the employees of the competent institutions on IMS use.

The AFCOS Directorate is responsible for ensuring and monitoring compliance with irregularity administration procedures within the units responsible for the management of EU funds. The outcomes of conducted checks are set out in dedicated reports, containing the relevant findings, along with recommendations and timeframes for their implementation.

By the end of each month following the previous quarter, the units responsible for the administration of EU funds, instruments and programmes report all new detected irregularities and actions taken to rectify them to the AFCOS Directorate, which then reports all irregularities subject to a requirement for reporting to OLAF within the second month following the end of each quarter. As a result of the controls conducted by the AFCOS Directorate on the process of reporting irregularities, the quality of reporting to OLAF has improved.

Bulgaria ensures strict compliance with its obligations to report irregularities to the European Commission within the relevant timeframes laid down by law. In line with the national mechanism for irregularity reporting put in place the AFCOS Directorate of the Ministry of Internal Affairs (MVR) makes arrangements for and co-ordinates the reporting of irregularities to the competent national authorities and the European Commission at national level and monitors and controls the process.

The role of managing and paying authorities in detecting fraud has grown since 2012 and should be further enhanced in the coming years under the new regulatory framework for the 2014-2020 period. The Commission believes that this role could be further enhanced if these authorities make systematic use of appropriate IT tools.

Recommendation 4 Given the complexity of the operations managed and the high number of beneficiaries concerned, Member States (managing authorities/paying agencies and audit/control authorities) are invited to plan and focus their audits and control activities on the basis of risk analysis and performing IT tools. The Commission has developed and put at the Member States’ disposal systems and tools such as Arachne, IMS and the Fraud Risk Assessment tool. The Commission encourages Member States to use these systems and tools more systematically and efficiently, unless other comparable alternatives are already available to them.

BE a) REPLY from the Walloon Region: Managing Authority of the Regional Operational Programme ‘Wallonie-2020.EU’ The anti-fraud and irregularity policy applied to the management of ERDF programmes in Wallonia is centred on detecting and preventing risk, correcting possible irregularities or fraud, and prosecutions. 1. Risk detection Except for the handful of adaptations imposed by regulatory changes, the 2014-2020 management and control system of the ERDF managing authority in Wallonia is identical to that used during the 2007-2013 programming period. The risks identified (gross risks) at the start of the programming period are therefore broadly the same. As well as identify based on experience and previous audits, the Walloon managing authority is considering using the ‘fraud risk self-

Assessment tool’ established by the European Commission, or a similar approach. In addition, the managing authority is set to use the Arachne system, which is a tool for identifying operations that are liable to exposure to risk of fraud, conflicts of interest or irregularities. 2. Risk prevention The measures taken to prevent (or mitigate) these risks follow on from those applied during the 2007-2013 programming period, bearing in mind the highly positive results of the 2007-2013 system audits on the selection and approval of projects and their implementation, as well as on expenditure. The same was true for the system audits performed in the departments of various functional administrations and intermediate bodies. This documentation was therefore essential in estimating a low probability of net risks, as well as in capitalising on skills and knowledge. The entities participating in the management and implementation of the 2014-2020 Walloon ERDF OP are mostly the same as in previous programming periods and the degree of experience acquired contributes to programme management being more effective and efficient, thereby minimising the probability level of risks occurring. Risk prevention measures include the following: - project selection by a group of independent experts, - a communication to beneficiaries on their rights and obligations, on a regular basis and immediately following a call for projects (keeping proper accounts, public procurement, the existence of various levels of control, retention of supporting documents, penalties applicable, etc.). Work tools (vademecum, user manuals, templates, etc.) are also made available to them, in particular through the website WalEurope , which is updated daily; - the existence of clear, relatively simple eligibility rules specific to the operational programme; - the exhaustive nature of first level document checks; - a reliable and efficient computerised project monitoring system; - support from functional administrations (FA) through ad hoc forums; - a check performed by the FAs, whose systematic validation of indicators allow the programme’s physical progress to be monitored, as well as their verification based, in particular, on the content of progress reports and during on the spot checks; - the clear separation of functions between the three Authorities; - the regular dissemination of information for Managing Authority staff on the application or development of the rules, including on irregularity and fraud (in particular via the OLAF working party); - the organisation of seminars and/or training days on the applicable regulations, including on the fight against fraud; - The strict adherence by Managing Authority staff (as agents of the Public Service of Wallonia) to the ‘Code of Good Administrative Conduct’, which incorporates principles of ethics and integrity. The latter can be found in Annex I to the Walloon Government Decree of 18 December 2003, as amended, on the Walloon Civil Service Act. A part of the Act, which is applicable to statutory staff, also concerns contract staff, in accordance with the provisions of the Walloon Government Decree of 18 December 2003 on the conditions of engagement and the administrative and financial situation of contract staff. In particular, Article 2 of the Act incorporates principles of integrity, conscience, loyalty, non-discrimination and responsibility; - the participation of the three Authorities in the OLAF working party, allowing effective and reciprocal information to be provided from those Authorities relating to cases of irregularity and fraud. Domains where risks of fraud or irregularity are higher systematically draw more attention, and specific action plans are applied. This has been the case with public procurement, in particular following the ‘Pressetex’ judgment (CJUE, 454/06). Therefore, a useful written instruction has been distributed and related training organised for the beneficiaries. The following, in particular, was used as support: Guidance on public procurement for practitioners ‘On the avoidance of the most common errors in projects funded by the European Structural and Investment Funds’ (European Commission, 2015). 3. Correcting cases of irregularity and fraud Irregularities and cases of fraud must be communicated to the European Anti-Fraud Office (OLAF). These procedures are described in the rules of procedure of the working group responsible (at OP ERDF level) for referring cases of irregularities to OLAF. Following a meeting of the OLAF working party, functional administrations (AF) must apply the necessary measures to irregularity cases falling within their remit. If it emerges that an FA has not satisfactorily followed up a case three months after its referral to the OLAF working party, the case will be submitted to the Minister responsible for the Structural Funds, to the Minister who is competent at functional level and, where appropriate, to the Walloon Regional Government, in order to determine measures to be implemented Any irregularity or case of fraud detected will systematically trigger a procedure to recover any sums paid unduly. 4. Proceedings If appropriate for the case, criminal and civil proceedings are launched. In accordance with Article 29 of the Code of Criminal Procedure, any public official who suspects fraud while carrying out his or her duties must inform the public prosecutor about the matter and pass on all information, statements and acts in connection with the suspicion. b) Contribution of the Department of Agriculture and Fisheries (Departement Landbouw en Visserij) – Flemish paying agency for agricultural funds The specific IT tools offered by the EU, such as ARACHNE, are less useful for agricultural funds. When the annual accounts are submitted, the director of the paying agency confirms in his annual management declaration that, in accordance with Article 58 of Regulation (EU) No 1306/2013, effective and proportionate anti-fraud measures have been introduced which take the risks identified into account. The layout and application of the risk analysis is sector specific and offers adequate assurance in terms of combating and preventing fraud. The 2017 risk management scheme of the Flemish Government’s Department of Agriculture and Fisheries will take more structured account of existing efforts. c) Reply from the Flemish WSE (‘labour and social policy’) policy area’s ESF department responsible for implementing the 2014-2020 ESF, AMIF, EGF and YEI programmes as managing/certifying authority The ARACHNE, IMS and Fraud Risk Assessment tools are used. The ‘integrity policy and code of ethics’ (Integriteitsbeleid en Deontologische code) was adapted based on the risk analysis. The managing authority also uses random samples of data available from the ARACHNE tool to conduct on-the-spot checks. d) ERDF Flanders Please note that ERDF Flanders will use the Commission’s ARACHNE tool for the 2014-2020 programming period. e) Federal Public Service of the Interior, European Funds unit The EU funds unit of Belgium for the AMIF-ISF funds (DG Home) uses the Fraud risk assessment tool to elaborate our anti-fraud policy and to implement the necessary fraud risk detection and prevention measures. This is an ongoing process that has been validated by our Audit authority. • One of the possible measures of the Fraud risk assessment tool is the use of the Arachne tool. Arachne is a risk-scoring tool that helps to reduce the error rate and detects and prevents potential irregularities in projects or contracts. We’ve explored the tool during an information session together with representatives from DG Home and DG Employment. In order to use the Arachne tool for the AMIF-ISF funds it is necessary to have enough participating Member States to justify the supplementary cost for using the tool. At this moment this is not the case. We are waiting for a participation of other Member States. To finance the supplementary licenses for the tool DG Home wants a minimum number of participating Member States. • Concerning the irregularity management system (IMS) of OLAF, access has been granted by our liaison officer. Actually we are setting up the login procedure (passwords, certificates, etc.). In our anti-fraud policy it is foreseen to use the IMS tool to report fraud and irregularities. • We have not yet encountered any fraud or irregularities in the on-going projects.

BG А. OPERATIONAL PROGRAMMES, APPROVED FOR THE PERIOD 2014-2020, CO-FINANCED BY THE EUROPEAN STRUCTURAL AND INVESTMENT FUNDS (ESIF) AND THE FUND FOR EUROPEAN AID TO THE MOST DEPRIVED (FEAD) 1.EXECUTIVE AGENCY AUDIT OF EUROPEAN FUNDS The risk assessment model used by the Audit Authority for strategic planning purposes is based on an analysis of the risks for compliance with various Key Requirements (KR) for the management and control systems in line with the European Commission’s Guidance note on assessment of management and control systems. The following risks have been identified: §Importance of KR as an instrument used to limit the certification of ineligible expenditure; §Risk of fraud, including conflict of interest; §Systemic deficiencies detected in the framework of conducted audits on operations; §Number of low, medium and high priority findings from previous systems audits; §Major changes to legislation as compared to the previous period. The risk level for each Key Requirement is an aggregate value resulting from the assessment of all risk factors. Risk level is graded on a scale comprising three categories (low, moderate and high risk), the aim being to cover all key requirements within the three-year period 2016 – 2018. Risk factors are rated on a scale from 1 to 4 (1 indicating the lowest and 4 the highest level of risk, respectively). The risk key requirements associated with high and moderate levels of risk are subject to more frequent checks. When developing its audit methodology, the Audit Authority conducts an assessment of the steps in the respective processes that carry the highest risk and includes detailed checks in the relevant checklists to ensure detection of all irregularities in high-risk areas. The checklists contain guidance on conducting an in-depth analysis of the detected irregularities on the basis of which auditors form an opinion on the presence/absence of suspected fraud. Given the very high share of detected irregularities with implications for public procurement (more than 90 %), the checklists used to assess the legality of public procurement calls are very detailed and fully in line with the Guidelines for determining financial corrections to be made to expenditure financed by the Union under shared management, for non-compliance with the rules on public procurement (European Commission Decision of 19 December 2013). According to the European Union the checklists used by the Audit Authority are adequate and sufficiently detailed and their use by all bodies concerned in the management of EU funds has been recommended as a good practice. 2. ACCREDITATION AUDITS OF THE MANAGING AUTHORITIES In accordance with Article 124(2) of Regulation (EU) No 1303/2013 the Audit Authority has conducted accreditation audits on the managing authorities of all nine operational programmes, co-financed by the ESIF and the FEAD and approved for the programming period 2014 – 2020, notably: OP Regions in Growth (OPRG); OP Environment (OPE); OP Transport and Transport Infrastructure (OPTTI); OP Innovation and Competitiveness (OPIC); OP Initiative for Small and Medium-sized Enterprises (OPISME); OP Human Resources Development (OPRD); OP Good Governance (OPGG); OP Science and Education for Smart Growth (OPSESG); and OP Food and/or Basic Material Aid (OPF), cofinanced by the Fund for European Aid for the Most Deprived. The audits were conducted in accordance with the European Commission’s Guidance for Member States on Designation Procedure (EGESIF_14-0013-final of 18 December 2014) and include an assessment of the criteria for designation of Managing Authority (MA) and Certifying Authority (CA) as regards the procedures put in place for monitoring and reporting of irregularities, risk management and effective and proportionate anti-fraud measures. On the basis of the conducted audits the Audit Authority has ascertained that written procedures for administering irregularities, including fraud, have been approved under all programmes. The procedures in question include rules for the detection, registration and reporting of irregularities, including suspected and ascertained fraud, and monitoring the progress achieved in administrative and criminal proceedings relating to detected irregularities. Rules on the co-ordination of anti-fraud measures have been approved, including an obligation for quarterly reporting to the AFCOS Directorate. Detailed descriptions of the duties and responsibilities of staff, including in relation to the reporting of irregularities and fraud, have been compiled. The anti-fraud measures are structured around four key elements of the anti-fraud cycle — prevention, detection, rectification and prosecution. The descriptions compiled by all relevant bodies contain risk assessments at both programme and project level to be conducted in line with the Commission’s Guidance Note on Fraud Risk Assessment and Effective and Proportionate Anti-fraud Measures — Ares(2013)3769073 — 19/12/2013, EGESIF 14-0021-00/16/06/2014) EGESIF_14-0021-00). In line with the above-mentioned Guidance Note, for the purpose of risk assessment in the context of monitoring, including of the risk of fraud, at project level, the respective organisations have taken on a commitment to use the specialist risk scoring tool ARACHNE. Its use does not require additional effort from staff as the Managing and Monitoring Information System (MMIS) for the programming period 2014 – 2020 has already been rolled out and is fully functional. Automated interface of the MMIS ensures access to all requisite data in a predefined and structured format. Where information is detected via ARACHNE that indicates a higher risk of irregularity and fraud under a project, the experts responsible for monitoring take mitigating measures by conducting unannounced on-the-spot checks, modifying the terms and conditions for project implementation, issuing mandatory guidelines for beneficiaries, notifying the competent bodies, etc. The use of the risk scoring tool ARACHNE is expected to enable the bodies responsible for the management and monitoring of funds available under the operational programmes to raise the efficiency of project selection, verification and audit and further improve the identification, prevention and detection of fraud. The Central Co-ordination Unit Directorate of the Council of Ministers is the designated national coordinator for ARACHNE and manages system access and access profiles. By Order No R-249 of the Deputy Prime Minister responsible for EU Funds and Economic Policy of the Republic of Bulgaria of 2 December 2015 a procedure for the management of access to the ARACHNE irregularity and fraud risk scoring tool was approved. In 2016, profiles enabling the access of 51 users from all managing authorities were created. The preliminary audit reports on accreditation detail certain detected deficiencies and set out corresponding recommendations for improvement of the descriptions of the systems put in place by the management authorities for irregularity reporting and monitoring, risk management and introduction of effective and proportionate anti-fraud measures. The managing authorities have accepted all recommendations, implementing most of them by the time the final audit reports were published. In particular, the following recommendations have been fully or partially implemented: 1)that the managing authorities make arrangements enabling the use of ARACHNE and/or develop a detailed procedure for the use of ARACHNE under OPRG, OPE, OPTTI, OPIC, OPISME, OPRD, OPGG and OPF (fully implemented); 2)That the MA conducts an initial fraud risk assessment following the designation of the bodies responsible for the management of the OPRG, OPE, OPTTI, OPIC, OPISME, OPRD, OPGG and OPF (ongoing implementation); 3)All other recommendations (see below) were implemented by the time the final audit reports were published: -3.1) compile a more detailed description of the Risk Assessment methodology for the OPE, OPIC, OPHRD, OPSESG and OPGG; -3.2) develop a procedure for providing information to the Audit Authority and other competent national bodies about cases of suspected fraud under the OPTTI that were detected by the MA; -3.3) introduce a requirement for the reporting of irregularities by the staff responsible for the management and monitoring of the OPISME; -3.4) develop a procedure for the prevention of conflicts of interest in line with the principle of impartiality and independence in the management and implementation of the OPSESG; -3.5) develop rules for the recovery of unduly paid amounts/financial corrections in respect of expenditure that has been certified and declared to the European Commission under the OPSESG. The implementation of the recommendation for conducting an initial assessment of the risk of fraud under the operational programmes was verified during the systems audits and the relevant findings set out in the accreditation audits were closed. 3. SYSTEMS AUDITS In 2016, the Audit Authority conducted systems audits on six out of the nine approved operational programmes in line with Article 127 of Regulation (EU) No 1303/2013 in 2016. The programmes in question are OPTTI, OPE, OPIC, OPHRD, OPGG and OPF. The audits were conducted in line with the Guidance Note for the Commission and Member States on a common methodology for the assessment of management and control systems in the Member States for the programming period 2014 – 2020 (EGESIF_14-0010-final 18/12/2014). The audits focused on an assessment of the management and controls systems put in place by the managing authorities to ensure compliance with Key Requirement 7 Efficient implementation of proportionate anti-fraud measures. The aim of the audit checks was to verify whether the managing authorities: §had conducted a risk assessment at the beginning of the programme implementation period to determine the probability of fraud risk realisation and its impact on the key processes relating to programme implementation; §had developed anti-fraud measures that are structured around four key elements of the anti-fraud cycle — prevention, detection, rectification and prosecution; §had introduced adequate and proportionate preventative measures tailored to address specific situations with a view to reducing residual risk to an acceptable level (mission, code of conduct, top to bottom communication lines, separation of duties and responsibilities, training and awareness raising activities, data analysis and up-to-date knowledge of the red flag warnings and indications of fraud; §had introduced and are effectively applying red flag detection measures; §had put in place a procedure for the follow-up actions to be taken in the case of suspected fraud to ensure that clearly defined and coordinated mechanisms are in place for reporting suspected fraud and deficiencies in the controls carried out vis-à-vis the Audit Authority, the competent investigating bodies of the Member State and OLAF; §had put in place appropriate processes enabling follow-up in all cases of suspected fraud and the actions to be taken to recover unduly paid EU funds in such cases; §had introduced procedures that enable proper follow-up on all processes, including control procedures and mechanisms in connection with potential or actual fraud, and reporting the results of the follow-up actions taken to ensure that they are taken into consideration for the purpose of subsequent reviews of fraud risk assessment. On the basis of the conducted systems audits certain deficiencies were detected, which prompted the following recommendations: The checklists used to conduct controls on the selection of operations, project implementation by beneficiaries and verification of expenditure by the managing authorities of the OPGG, OPHRD, OPF, OPIC and OPTTI do not contain detailed instructions for analysis of detected irregularities with a view to identifying fraud indicators (red flags), including the actions to be taken in such cases. Detailed instructions were solely included in the checklists to be used to document the controls performed on the contractor selection procedures conducted by beneficiaries. In connection with this, a recommendation was given to modify the checklists by including detailed instructions on the fraud indicator (red flag) identification. The recommendation was accepted and implemented by the managing authorities of the OPF and OPHRD by the time the final audit reports were published and is currently being implemented by the managing authorities of OPGG, OPIC and OPTTI. 1)A recommendation has been given to the managing authorities of the OPIC and OPGG to adopt dedicated anti-fraud rules/policy in line with Annex 3 of the Commission’s Guidance Note on Fraud Risk Assessment and Effective and Proportionate Anti-fraud Measures (EGESIF_14-0021-0016/06/2014). The managing authorities have accepted the recommendation and its implementation is ongoing; 2)A recommendation has been given to the MA of the OPGG to compile a detailed description of the minimum set of documents/evidence to be annexed to the irregularity files and introduce appropriate controls to verify the completeness of irregularity / suspected fraud files. The Managing Authority has accepted the recommendation and its implementation is ongoing; 3)A recommendation has been given to the MA of the OPHRD to expand the list of identified risks for 2015 and 2016 and the Risk Management Plan with examples of fraud affecting the programme implementation processes set out in the Commission Guidance Note. The recommendation has been accepted and implemented; 4)A recommendation has been given to the MA of the OPIC to clearly define the duties and responsibilities of MA staff in connection to the processes of preventing, detecting and rectifying cases of fraud. The recommendation has been accepted and in currently being implemented; 5)A recommendation has been given to the managing authorities of the OPHRD, OPIC and OPF to develop detailed rules for the use of the ARACHNE risk scoring tool and designate users to whom access to the system be granted. The MA of the OPF has implemented the recommendation and the managing authorities of the OPHRD and OPIC are currently working to ensure its implementation; 6)A recommendation has been given to the MA of the OPTTI to conduct a risk assessment and develop an action plan for risk mitigation that sets out specific steps, actions, responsibilities and timeframes to ensure implementation of planned controls. The recommendation has been accepted and is currently being implemented. In the framework of the system audits performed the Audit Authority followed up on the implementation of the recommendations for conducting initial assessments of the risk of fraud under the operational programmes and closed the findings set out in the accreditation reports. 4. CERTIFYING AUTHORITY The Certifying Authority (Directorate National Fund of the Ministry of Finance) makes full use of the systems and tools made available by the European Commission. The officials to whom access to the ARACHNE tool system has been granted were designated by an order issued by the Minister of Finance. B. RURAL DEVELOPMENT MEASURES FINANCED BY THE EUROPEAN AGRICULTURAL GUARANTEE FUND (EAGF) AND THE EUROPEAN AGRICULTURAL FUND FOR RURAL DEVELOPMENT (EAFRD) 1.EXECUTIVE AGENCY CERTIFICATION AUDIT OF EUROPEAN AGRICULTURAL FUNDS Executive Agency Certification Audit of European Agricultural Funds (IASOSEZF) was established pursuant to Council of Ministers’ (CoM) Decree No 89 of 18 April 2016, amended and supplemented by CoM Decree No 218 of the Council of Ministers of 25 August 2016, and became fully operational after August 2016. During the period April – September 2016 efforts were focused on staff recruitment, creating an appropriate work environment and launching certification activities. At the stage of strategic planning of its work the IA SOSEZF chose to apply a certain risk assessment model. In line with the European Commission’s Guidelines for the Certification Audit of EAFG/EAFRD Accounts, the developed model for material misstatement risk assessment includes audit procedures for risk identification in several stages: -gaining an understanding of the Paying Agency (RA) and its environment — a review of applicable legislation, internal rules and procedures, and conducting interviews; -assessment of the changes to the internal control system; -assessment of the efficiency of the risk management process put in place by the RA; -verification of identified risks and determination of target functions. The risk of material misstatements for the financial year (FY) 2016 is to be assessed on the basis of an internal control system assessment performed by the previous Certifying Authority. Following that assessment, the underlying assumptions as regards the level of control risk, respectively risk of material misstatements, are to be reviewed, if necessary, including by expanding the scope of the work to be carried out. The audit procedures performed confirmed the initial assumptions and a further review of planned indicators were deemed unnecessary. The Certifying Authority conducted the checks on the management and control systems of the Paying Agency in line with the Guidance Note on Anti-fraud Measures as foreseen in the context of Accreditation Criteria, 26 February 2014) of Directorate-General for Agriculture. 2.PAYING AGENCY – STATE FUND AGRICULTURE In 2016, the State Fund Agriculture (DFZ) continued to apply an effective fraud and irregularities prevention approach, conducting checks based on an analysis of risk criteria for fraud with implications for the EU and national budget under various support measures. Risk analysis is performed on the basis of: - The operational experience of the Anti-fraud Department; - Omissions and deficiencies detected prior to conducting the risk analysis in the checks performed on grant applications in accordance with the accredited rules of procedure of Directorate Contracting for the Implementation of Rural Development Measures (PMRSR). - The use of the full functionalities of IACS and EXCEL; Risk analysis is also performed by the Internal Audit Department of the DFZ within the framework of strategic and annual planning and the scope of individual audits. The analysis was conducted on the basis of pre-defined criteria, including an assessment of the quality, adequacy and capabilities of the control environment and the controls out in place to prevent fraud and irregularities. One of the tools used by the Internal Audit Directorate is the specialist software Arbutus. Examples where the RA was particularly successful in applying risk analysis to detect fraud: ØBy Order No 03-RD/176 of 25 January 2016 of the Head of the State Fund Agriculture a working group was tasked with conducting an additional check to ascertain cases of fraud and irregularities and verify the compliance with applicable law of the grant applications submitted under Measure 4.1 Investment in agricultural holdings of the Rural Development Programme during the period stipulated in Order RD 09-213 of 27 March 2015 of the Minister for Agriculture and Food. The check was to be performed on the basis of risk analysis on 30 approved grant applications received during the period for submission of applications specified in Order RD 90-213 of 27 March 2015, which were rated as carrying the highest overall risk. The following criteria and corresponding weight factors were taken into account for the purpose of risk assessment: -a weight factor of 0.2 assigned to grant applications seeking the highest amounts of investment funding; -a weight factor of 0.2 assigned to grant applications, where the staff of the MPRSR Directorate have modified the status of an applicant into the Integrated Administration and Control System (IACS) from ‘negative compliance assessment report’ to ‘ongoing entry of data from order on application refusal’; -a weight factor of 0.2 assigned to grant applications, where reference prices were used to calculate the eligible amount of support for the acquisition of assets (agricultural equipment); -a weight factor of 0.2 assigned to grant applications seeking investment support for planting and/or replanting perennial crops; -a weight factor of 0.2 assigned to grant applications that were awarded 8 points for energy efficiency in the ranking; An order was issued to apply the following additional criteria to high-risk grant applications in order to select 30 that carried the highest overall risk: -grant applications seeking support for investments to be made in geographic areas situated in close proximity; -grant applications submitted by natural and legal persons entered into the commercial registry after 1 October 2014. Checks were initially conducted on 30 projects. On the basis of the report drawn up by the working group specific guidelines and recommendations were issued for all grant applications. On the basis of the outcomes of conducted checks, cases of suspected irregularities and fraud were singled out and additional checks based on tips were carried out on 100 projects. Irregularities were detected under 32 projects and in 23 cases the information was referred to the Prosecution Service for investigation. In 9 cases the checks revealed that artificial conditions for financing had been created in order to obtain an advantage in breach of the aims of the measure. ØBy Order No 03-RD/2005 of 29 June 2016 of the Executive Director of the DFZ, the working group was instructed to carry out an additional check - for irregularities, fraud and compliance with applicable law – on the procedure for receiving and processing applications for assistance under sub-measure 4.2 Investments in the processing/marketing of agricultural products of the RDP 2014 – 2020. The check was to be performed on applications for assistance which were received during the period for receipt specified in Order RD 09-781 of 6 November 2015 of the Ministry of Agriculture and Food and allocated for processing; on the basis of a risk analysis, the 15 applications with the highest comprehensive risk indicator were to be determined. The following criteria and corresponding weighting factors were taken into account in the risk assessment: -a weighting factor of 0.2 was assigned to applications seeking the highest amounts of investment funding; -a weighting factor of 0.1 was assigned to applications with a confirmed negative compliance report; -a weighting factor of 0.1 was assigned to applications where, in the calculation of activities/assets costs eligible for assistance, the reference prices were not used and the respective activities/assets accounted for more than 50 % of the costs for which assistance was applied for under the project; -a weighting factor of 0.2 was assigned to applications submitted by beneficiaries who had projects approved under Measures 121 and 123 of the RDP 2007 – 2013 and/or sub-measure 4.1 of the RDP 2014 –2020; -a weighting factor of 0.2 was assigned to applications submitted by beneficiaries whose owners/managers/representatives had been reported to the Prosecution Service by the DFZ or had had pre-trial proceedings initiated against them in connection with misuse of EU funds; -a weighting factor of 0.2 was assigned to applications submitted by natural and legal persons entered in the Commercial Register after 1 January 2015. Checks were initially conducted on 15 projects. After a report had been drawn up by the working group, specific guidelines and recommendations were issued for additional checks on all applications for assistance. As a result of the actions taken, suspicions of irregularities and fraud were expressed, and checks were carried out in response to reports of irregularities in 22 projects. Irregularities and fraud were established in 13 of those projects, and 5 cases were referred to the Prosecution Service. In 8 cases, the checks revealed that artificial conditions for funding had been created in order to obtain an advantage contrary to the objectives of the measure MARITIME AND FISHERIES PROGRAMME The Maritime Affairs and Fisheries Directorate of the Ministry of Agriculture and Food is the designated Managing Authority of the Maritime and Fisheries Programme 2014 – 2020 (MFP), having taken over the functions of managing authority from the Executive Agency for Fisheries and Aquaculture (IARA), with a large number of the Agency’s employees being transferred to the Directorate. The "Description of the functions and procedures of the MFP 2014 – 2020 and MFP Manual", approved by the Head of the Managing Authority of the MFP, sets out detailed rules and procedures for the administration of irregularities and the effective prevention and combating of fraud to be followed both by the Managing Authority and the Intermediate Body (State Fund Agriculture). A procedure for the provision of access to the ARACHNE tool was also approved. It is laid down that, at the first stage of project proposal assessment, the MA of the MFP must request an excerpt from the Irregularities Register for the Operational Programme Fisheries Sector Development 2007 – 2013 kept at the IARA and the DFZ, along with a report on bad debtors from the DFZ's register. Potential beneficiaries must be required to declare, in an annex to the application form, that they are familiar with the definition of an irregularity laid down in Article 2(36) of Council Regulation (EU) No 1303/2013. Given that the Managing Authority is a completely new unit with new functions, additional staff training will be provided in the near future to raise awareness levels in connection with the fight against fraud and irregularities. In addition, members of staff will be designated for work involving use of IMS, ARACHNE and the EDES-DB database. The information system used for the programme is UMIS 2020, which permits fully electronic submission of documents and - at a later stage - reporting on project implementation. INTERREG IPA CROSS-BORDER COOPERATION PROGRAMMES The functions of Managing Authority for the Cross-border Cooperation Programmes under the Instrument for Pre-accession Assistance 2014 – 2020 (IPA) are carried out by the Territorial Cooperation Management Directorate of the Ministry of Regional Development and Public Works (MRRB). The Directorate has implemented a fraud risk self-assessment tool and identified 14 risks spread over 5 key processes relating to the implementation of the IPA Cross-border Cooperation Programmes between Bulgaria and Serbia, Bulgaria and Macedonia and Bulgaria and Turkey.

CZ In the case of the Czech Republic, both the relevant managing authorities and the audit authority used the ARACHNE information system in the 2007-2013 programming period as a pilot verification tool for identifying the corresponding risks within selected operational programmes (in particular the ESF). No case of confirmed fraud has been identified by means of this tool. For the 2014-2020 programming period the ARACHNE information system was incorporated into the management and control system of all operational programmes; only with one operational programme is a similar system used (Cribis). This tool is included in ex-ante, interim and ex-post control activities at managing-authority level and it supports the audit authority's activity. Following the identification of risks in the operational programmes for the 2014-2020 programming period, use has been made of the June 2014 Guidance for Member States and Programme Authorities entitled 'Fraud Risk Assessment and Effective and Proportionate Anti-Fraud Measures', including Annex I thereto: 'Fraud risk assessment tool and instructions on how to use the tool' (EGESIF_14-0021-00). Own risk analysis has been carried out in accordance with the procedure laid down at national level by the coordinating body and adapted to the individual operational programmes. Risk analysis serves to identify associated risks (including the risk of fraud) and use thereof enables management and control systems to be set up. In the context of designation audits, verification is carried out by an independent audit body and subsequently by means of an audit procedure forming part of the Audit Authority's system audits. IMS: this information system is mainly used by the LKB and the AFCOS Central Contact Point for forwarding information relating both to newly detected irregularities and to the acquisition of up-to-date information concerning developments in the investigation of previously reported irregularities detected in connection with the implementation of EU funds externally. In this connection the system will in future serve also as a tool for producing statistics and analyses.

DK Danish Customs’ analysis units conduct risk analyses on data from a number of sources - mainly declaration information in the customs system. The data is analysed in the Business Intelligence (BI) and Tableau IT systems. An advantage of Tableau is its effectiveness in enabling trends and irregularities in import patterns to be visualised. In 2016, SKAT launched the process for analysing data, which mainly concerns declaration information in the BI and Tableau IT systems. Greater use of Tableau should make it easier to identify fraud patterns. A project involving BIC DATA is a new initiative launched by SKAT’s Customs and IT departments. This project also supports a similar initiative by the Commission in which Denmark is participating. The relevant Danish managing authorities systematically use the IMS IT tool for reporting. The structural funds’ managing authority regularly communicates with the Commission regarding the implementation of Arachne. On 9 June 2016 there was a visit by the Commission to present Arachne and discuss questions relating to the Personal Data Act. The Commission is drafting an Arachne charter to be concluded between the Commission and the Member States wishing to use Arachne. The Danish managing authorities are still awaiting the Commission’s final charter before they launch Arachne, so as to ensure compliance with the Danish Personal Data Act. The structural funds’ managing authority used the Commission’s Fraud Risk Assessment Tool when implementing its anti-fraud action plan at the start of the current programming period. The authority intends to use the tool again when reviewing the administrative set-up later in the programming period.

DE ERDF/ESF: On the expenditure side the managing authorities implementing the programmes are primarily responsible for setting up effective control systems and taking effective measures to prevent and combat fraud. The following are the managing authorities’ systems and tools for implementing risk assessments and for taking fraud prevention and anti-fraud measures together with the certifying bodies: The risk management and anti-fraud systems are essentially based on: ·the legal system in force for tackling fraud in the Federal Republic of Germany or the country concerned, ·the procedures/measures of the management and control system (MCS) and inhouse instructions on how to combat fraud for the administrative authority (e.g. administrative rules, e-learning etc.) and the intermediate bodies (banking standards, internal rules etc.), ·the regular programme-specific risk assessment (including prevention of corruption and fraud) carried out by a dedicated self-assessment team, in accordance with the ‘Guidelines on assessing the risk of fraud and effective and proportionate anti-fraud measures for the programming period 2014-2020’. In order to identify the risks the following documents/information were used: ·COCOF 09/0003/00 of 18 February 2009 – Information Note on fraud indicators for the ERDF, the ESF and the Cohesion Fund; ·OLAF guidance document on ‘Identifying conflicts of interest in public procurement procedures’; ·OLAF guidance document on ‘Identifying falsified documents’; ·Communication from the Commission to the European Parliament, the Council and the European Economic and Social Committee of 6 June 2011 on Fighting Corruption in the EU (COM(2011) 308); ·Transparency International’s Corruption Perceptions Index and the National Integrity System Report; ·Irregularities and cases of fraud during the funding period 2007-2013; ·Report from the Commission to the European Parliament and the Council - Protection of the European Union’s financial interests –Fight against fraud – Annual Report 2012 (COM(2013) 548 final) and 2013; ·Report from the Commission to the European Parliament and the Council – EU AntiCorruption Report (COM(2014) 38 final); ·the results of the EU Justice Scoreboard; ·the findings from sample checks and system audits carried out by the Audit Authority and other audit bodies. Procedures for risk assessment: Self-assessment teams have been set up for this task; these teams can consist of staff of the certifying authorities, managing authorities (management and control systems and technical assistance), possibly the intermediate bodies and contracting entities, and anticorruption officials from the relevant ministries. Representatives of the audit authorities may participate in an advisory capacity. The composition of the teams varies partly according to the action to be evaluated, but sometimes also depending on: ·the fund concerned (ERDF/ESF) ·the authorising agency concerned ·the individual financial instruments The Commission’s self-assessment tool has been reviewed and adapted to the specific situations in the German Länder, and further risks have been identified and added. If the systems and operational audits reveal audit findings in relation to fraud and corruption, suspicions of fraud or corruption or fraud-related irregularities, or if new systems are set up during the funding period, the assessment tool for the relevant groups are updated on a caseby case basis, reassessed, or, if necessary, extended to include an action plan. Systems which do not already require updating on a case-by-case basis are subject to a review at regular intervals. The risk management team regularly examines the level of risk of each administrative rule and each stage of the selection, authorisation, payment, finalisation and sustainability testing procedure, using the previous funding periods, available data and audits carried out by external bodies and the managing authorities as a basis. These checks include documentation and individual invoice checks, on-the-spot checks and, where necessary, checks on the data supplied for indicators. Each of these checks includes a risk assessment, on the basis of which a decision is taken. The on-the-spot checks and the payment procedures, for which random checks are carried out in line with the risk involved, merit special mention here. Should risks be identified, the risk management team draws up corrective measures and monitors their implementation. These measures may be preventive or systemic. Irregularities are dealt with in a systematic manner. The self-assessment tool covers the three areas proposed by the Commission: ·Selection of applicants ·Implementation of the projects by the beneficiaries with special attention paid to public procurement ·Certification of expenditure by the certifying authority and partly supplemented by the Managing Authority. For this reason the risk management team in each federal state regularly examines the level of risk of each administrative rule and each stage of the selection, authorisation, payment, finalisation and sustainability testing procedure, using the previous funding periods, available data and audits carried out by external bodies and the managing authorities as a basis. In individual cases the managing authority prepares fraud statistics, based on Sections 263 et seq. of the Penal Code (StGB), and reviews the risk using the Commission’s assessment tool on the basis of the risk management team’s findings. Should risks be identified, the risk management team draws up corrective measures and monitors their implementation. These measures may be preventive or systemic. Irregularities are dealt with in a systematic manner. The strategic approaches to prevent and combat fraud and corruption are laid down in more detail in the management and control systems of the individual operational programmes at Federal Government or federal state level. These programmes have already been largely checked and confirmed by the audit authorities in the context of the designation procedures for the 2014-2020 programming period. Measures at the level of the audit authorities: When checking the functioning of the management and control systems, the audit authorities also assess the effective application of anti-fraud measures set up by the managing authorities. The systems audits are mainly based on risk assessments supported by Excel or other commercial IT products. The risk assessment table provided by the Commission in chapter III of its ‘Guidance for Member States on Audit Strategy (programming period 2014-2020)’ - EGESIF_14-0011-02 final - of 27 August 2015 is also used. Details of the approach are explained in the respective audit strategies of the audit authorities. Agricultural (EAGF, EAFRD) and Fisheries Funds (EFF/EMFF): Alongside IMS, standard Office programmes such as Excel and Word are used for risk assessment. Other applications are also used to support the business processes in the management and implementation of the programmes. These include Monitoring Statistik, QChess, IDEA and efReporter (a database system for the exchange of information). In some federal states the fraud risk assessment tool is also used for the EMFF. AMIF/ISF: Risk assessments are carried out using the standard Office programmes Excel/Word, taking into account relevant parameters such as financial volume, type of project selected, project duration and project partners (increased management requirements, legal form, experience of project implementation).

EE We tested Arachne last year and it appeared that Arachne does not comply with our MIS at the moment. There have been some serious data matching issues that we have to solve before – in our MIS we use business entities’ registration codes (ID code) but Arachne needs VAT numbers to find the overlaps. Until these problems are solved we cannot make our final decision about using Arachne. When we have resolved these problems, the main potential of Arachne for Estonia will be international data. Therefore, we are thinking of using only some of the risk scores from Arachne, not all of them. Our own national systems (for example, tax and customs data) have specific data for the input and are therefore more substantial for assessing risks. We used the Fraud Risk Assessment tool developed by the Commission last year and got general results only. We plan to improve the risk assessment exercise but have not started to develop our red flag system in our MIS yet. We plan to amend our national law first, which would give us more possibilities and opportunities to plan risk-based controls. Our implementing bodies can use national MIS to plan the risk-based controls already now - they have an overview of all irregularities detected and information and knowledge on the fraud risks. We have already made some changes to our national public procurement register. Therefore, in some structural fund measures the private companies are required to use the public procurement register for their supplies. It has already reduced the costs of the goods or services and helps to use EU funds more economically and efficiently.

IE Regarding Recommendation 4, Ireland is currently evaluating the potential implementation of Arachne as a risk analysis tool for the Structural Funds programmes. We are working closely with our counterparts in the European Commission to evaluate the suitabili