Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the Fund for European Aid to the Most Deprived
Date: 2012-10-24
Institutions: European Commission
Subjects: administrative check, aid to disadvantaged groups, co-financing, economic and social cohesion, eligibility criteria, fund (EU), homelessness, poverty, socially disadvantaged class

EUROPEAN 
COMMISSION 

Brussels, 24.10.2012  
COM(2012) 617 final 

2012/0295 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

on the Fund for European Aid to the Most Deprived 

{SWD(2012) 350 final} 
{SWD(2012) 351 final}

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EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

1.1. 

Poverty and material deprivation in the Union 

Within  the  framework  of  its  Europe  2020  strategy,  the  European  Union  has  set  itself  the 
objective of reducing by at least 20 million the number of people in or at risk of poverty or 
social  exclusion  by  2020.  Yet  the  economic  crisis  has  exacerbated  poverty  and  social 
exclusion, raising concerns over the social consequences for individuals and society at large.  

In  2010,  nearly  one  quarter  of  Europeans  (116  million)  were  at  risk  of  poverty  or  social 
exclusion. This is about 2 million more than in the previous year and the first figures available 
for 2011 confirm this trend.  

While the needs of those who are at the margins of the society keep growing, the ability of 
Member States to support them has in many cases diminished. Social cohesion is threatened 
by  fiscal  constraints  more  than  ever  before.  In  many  Member  States  it  is  felt  that  policies 
decided at European level are in some ways responsible for these developments. 

The  increasing  levels  of  poverty  impact  negatively  on  the  living  conditions  of  European 
citizens, about 40 million of whom suffer from severe material deprivation. While this figure 
dropped  markedly  between  2005  and  2008,  it  began  to  rise  again  between  2009  and  2010, 
with 342 000 additional people encountering severe material deprivation in just one year.  

One  of  the  main  features  of  material  deprivation  is  the  inability  to  access  appropriate 
quantities and quality of food. The share of the Union population unable to afford a meal with 
meat,  chicken  or  fish  (or  vegetarian  equivalent)  every  second  day  –  something  which  is 
defined as a basic need by the World Health Organisation – was 8.7% in 2010, i.e. more than 
43 million persons and the first figures available for 2011 indicate a worsening trend.  

A  particularly  severe  form  of  material  deprivation  going  well  beyond  food  deprivation  is 
homelessness.  The  extent  of  homelessness  is  difficult  to  quantify,  but,  estimations  indicate 
that  there  were  4.1  million  homeless  people  in  Europe  in  2009/2010.  A  recent  increase  in 
homelessness is due to the social impact of low and uneven growth and rising unemployment. 
Even  more  worryingly,  a  new  profile  of  homeless  people  is  emerging  which  consists  of 
families with children, young people and people with a migrant background.  

There are 25.4 million children at risk of poverty or social exclusion in the Union. Overall, 
children are at greater risk of poverty or social exclusion than the rest of the population (27 % 
against 23 %). This exposes them to material deprivation going beyond (poor) nutrition. For 
example,  5.7  million  children  have  to  go  without  new  (not-second  hand)  clothes  and  4.7 
million do not have two pairs of properly fitting shoes (including a pair of all-weather shoes). 
Children suffering from these forms of material deprivation are less likely than their better-off 
peers to do well at school, enjoy good health and realise their full potential as adults.  

1.2. 

The Union's response to poverty and material deprivation 

The  main  Union's  instrument  for  supporting  employability,  fighting  poverty  and  promoting 
social inclusion is and will remain the European Social Fund (ESF). This structural instrument 
invests  directly  in  people  and  their  skills  and  aims  at  improving  their  labour  market 

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opportunities.  Yet  some  of  the  most  vulnerable  citizens  who  suffer  from  extreme  forms  of 
poverty  are  too  far  removed  from  the  labour  market  to  benefit  from  the  social  inclusion 
measures of the ESF. 

The EU's Food Distribution programme  for  the  Most  Deprived  People  (MDP)  has  for  more 
than  two  decades  provided  food  aid  for  those  persons.  It  was  created  in  1987  to  make 
meaningful  use  of  agricultural  surpluses,  which  might  otherwise  have  been  destroyed,  by 
making  them  available  to  Member  States  wishing  to  use  them.  Over  the  years,  the  scheme 
became an important source of provisions for organisations working in direct contact with the 
least  fortunate  members  of  society,  providing  them  with  food.  The  expected  depletion  and 
high unpredictability of intervention stocks over the  period 2011-2020, as a consequence of 
successive reforms of the Common Agricultural Policy, has deprived the MDP of the original 
rationale underpinning it and it will be discontinued at the end of 2013.  

However, material deprivation still causes serious problems and there continues to be a need 
for  EU  assistance  to  the  society’s  most  deprived  persons.  In  its  proposal  for  the  next 
multiannual financial framework the Commission has reflected this and reserved a budget of € 
2.5 billion for a new instrument designed to fight extreme forms of poverty and exclusion.  

Against this background, the proposed Regulation establishes for the period 2014-2020 a new 
instrument that will complement the existing cohesion instruments and notably the European 
Social  Fund,  by  addressing  the  worst  and  most  socially  corrosive  forms  of  poverty,  food 
deprivation  as  well  as  homelessness  and  material  deprivation  of  children  while  supporting 
accompanying measures aiming at the social reintegration of the most deprived persons of the 
Union.  

2. 

RESULTS OF CONSULTATIONS WITH THE INTERESTED PARTIES AND 
IMPACT ASSESSMENTS 

2.1. 

Position of interested parties 

Discussions  in  the  Council  and  the  European  Parliament  and  with  civil  society  and  local 
authorities on the current forms of aid for the most deprived under the MDP programme have 
provided  meaningful  insights  and  ideas  for  the  future.  Moreover,  the  Commission  has  been 
open to stakeholders' views and consulted EU-level umbrella organisations representing both 
deliverers of food aid and the end recipients. 

The  potential  significant  cut  in  the  support  provided  under  the  MDP  scheme  in  2012  was 
heavily  criticized  by  civil  society  organisations,  with  regional  and  local  authorities' 
representatives stressing the importance of this support and pleading for its continuation at a 
time when needs are increasing.  

Large  charities  and  civil  society  organisations  representing  food  banks,  as  well  as 
organisations working with children and homeless people have expressed repeatedly the need 
for public and specifically EU support.  

Two  meetings  with  umbrella  associations  of  organisations  representing  not  only  the 
beneficiaries  but  also  the  actual  end  recipients  were  held.  In  general  the  organisations 
welcomed  the  possible  broadening  of  the  scope  of  the  instrument  beyond  food  aid  and  the 
idea of a people-centred approach.  

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Member  States  views  about  such  an  instrument  are  divided:  seven  Member  States  have 
expressed  their  opposition  to  continuation  of  the  MDP  beyond  2013.  Other  Member  States 
have argued strongly in support of the scheme. Thirteen Member States issued a statement in 
December 2011, in which they requested continuation of the MDP post-2013.  

The European Parliament has repeatedly expressed strong support for the continuation of the 
food aid programme in the interest of better social cohesion in Europe.  

In  December  2011,  eleven  umbrella  organisations  wrote  to  Commissioner  Andor  and  the 
Director  General  for  Employment,  Social  Affairs  and  Inclusion  asking  for  progress  to  be 
made towards an EU Homelessness Strategy. In addition, the European Parliament called for 
such a strategy - first in a Written Declaration (2010) and then in a Resolution (2011). 

The Compact for Growth and Jobs adopted by the European Council on 29 June 2012 notes 
that "in the implementation of the country-specific recommendations, Member States will put 
particular emphasis on tackling unemployment and addressing the social consequences of the 
crisis effectively  […and] developing and  implementing  effective policies to  combat poverty 
and support vulnerable groups". 

2.2. 

Impact assessment 

The  core  issue  examined  by  the  impact  assessment  concerned  the  scope  of  the  new 
instrument.  The  options  considered  were  (0)  no  funding,  (1)  a  successor  instrument  to  the 
current MDP limited to dispensing food aid, (2) an instrument which would complement the 
distribution  of  food  aid  with  support  for  accompanying  measures  aiming  at  the  social 
inclusion of the food aid recipients, and (3) a comprehensive instrument supporting material 
relief in terms of food, goods for homeless people and goods for materially deprived children, 
combined  with  accompanying  measures  aiming  at  the  social  reintegration  of  the  most 
deprived persons.  

The net impact of option zero depends on how the funds made available are reallocated. But it 
would  certainly  be  seen  as  attesting  to  an  erosion  of  solidarity  in  Europe  at  a  time  when 
poverty  is  increasing.  Compared  to  option  one,  option  two  and  even  more  so  option  three 
entail a reduction of the food aid distributed as some resources are allocated to other types of 
actions. However, the accompanying measures should also ensure greater sustainability of the 
results  achieved.  Option  three  is  preferred  because  it  best  allows  tailoring  the  supported 
interventions to local needs.  

3. 

LEGAL ELEMENTS OF THE PROPOSAL 

EU action is justified on the grounds of Article 174 (TFEU) which provides for the Union to 
"promote  its  overall  harmonious  development"  by  "developing  and  pursuing  its  actions 
leading  to the  strengthening  of its economic, social and territorial cohesion", and on Article 
175 (TFEU) which specifies the role of the EU structural funds in achieving this objective and 
makes provisions for the adoption of specific actions outside the Structural Funds.  

EU-level action is necessary given the level of poverty and social exclusion in the Union and 
the  unacceptable  diversity  of  the  situation  among  individual  Member  States,  further 
aggravated  by  the  economic  and  fiscal  crisis,  which  has  led  to  a  deterioration  of  social 
cohesion  and  lessened  the  chances  of  achieving  the  Europe  2020  strategy's  objective  in 
relation to the fight against poverty and social exclusion.  

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European financial support helps to catalyse action at national level, coordinate efforts and to 
develop and introduce instruments to promote social inclusion. It allows the Union to lead by 
example. 

4. 

BUDGETARY IMPLICATION  

The  Commission  proposal  for  a  multi-annual  framework  envisages  an  amount  of  EUR  2.5 
billion, within cohesion policy, for the period 2014-2020. 

In  accordance  with  article  84(3)  of  Regulation  EU  Nº  …  (CPR),  the  support  to  a  Member 
State  through  the  Fund  shall  be  considered  as  part  of  the  share  of  the  Structural  Funds 
allocated to the European Social Fund. 

Proposed budget 2014-2020 

EUR billion 

Cohesion Policy (Structural Funds)  

Of which Fund for European Aid to the Most Deprived 

*All figures are in constant 2011 prices 

339 

2.5 

5. 

CONTENT OF THE REGULATION  

5.1. 

Objectives and scope 

The  general  objective  of  the  Fund  for  European  Aid  to  the  Most  Deprived  (the  Fund)  is  to 
promote social cohesion in the Union by contributing to the achievement of the Europe 2020 
strategy's objective of reducing by at least 20 million of the number of people in or at risk of 
poverty and social exclusion.  

This translates into the specific objective of supporting national schemes which provide non-
financial assistance to the most deprived persons through partner organisations. 

In  terms  of  scope,  the  Fund  addresses  food  deprivation,  homelessness  and  material 
deprivation  of  children.  Each  Member  State  may  choose  to  address  one  or  more  of  these 
forms  of  deprivation.  It  may  also  support  accompanying  measures,  complementing  material 
support, to contribute to the social reintegration of the most deprived persons. 

5.2. 

Eligible population and targeting 

The  population  eligible  to  receive  material  assistance  are  the  most  deprived  persons  of  the 
Union. Definition of the criteria for identifying the most deprived persons to be assisted will 
be  the  responsibility  of  the  Member  States  or  the  partner  organisations  since  they  are  best 
placed to target the assistance taking local needs into account.  

By defining the type of goods that will be distributed, namely food or basic consumer goods 
for personal use of homeless persons or of children, the Regulation also contains an indirect 
targeting mechanism.  

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5.3. 

Partner organisations 

The partner organisations are the ones that deliver directly or indirectly the food or goods to 
the  most  deprived  persons.  In  order  to  ensure  that  the  Fund  will  contribute  to  sustainable 
reduction  of  poverty  and  to  improvement  of  social  cohesion,  the  partner  organisations  that 
deliver directly the food or goods will themselves have to undertake activities complementing 
the  provision  of  material  assistance,  aiming  at  the  social  integration  of  the  most  deprived 
persons. The Fund itself may support such accompanying measures.  

The  national  authorities  may  either  purchase  the  food  or  goods  or  make  them  available  to 
partner organisations or provide the partner organisation with funding for the purchase of the 
food or goods. If the purchase of food or goods is undertaken by a partner organisation, it can 
either distribute the items itself or entrust the distribution to other partner organisations.  

5.4. 

Implementation provisions 

The  Fund  will  be  implemented  following  the  model  of  cohesion  policy,  i.e.  through  shared 
management on the basis of one 7-years operational programme per Member State covering 
the period 2014 to 2020.  

The  Regulation  follows  the  approach  of  the  structural  funds  in  terms  of  implementation 
arrangements,  allowing  notably  the  Member  States  to  use,  if  they  so  wish,  the  structures, 
designated  authorities  and  procedures  set  up  for  the  European  Social  Fund,  in  order  to 
minimize  the  administrative  burden  related  to  the  transition  from  the  current  scheme  for 
distribution  of  food  to  the  most  deprived  persons  to  the  new  Fund  for  European  Aid  to  the 
Most  Deprived.  The  provisions  relating  to  programming,  monitoring,  evaluation  and 
information  and  communication  are,  however,  streamlined  and  simplified  in  order  to  be 
commensurate to the specificity of the objectives and target populations of the Fund.  

The eligibility rules are also designed to take into account the nature of the Fund and of the 
various  actors  that  will  be  involved  in  its  implementation.  In  particular,  the  Regulation 
provides for simplified cost methods for the majority of categories of expenditure and opens 
options for the others categories.  

The financial management and control system equally derives from the structural funds logic. 
Also, some provisions have been adapted and simplified to be fully adequate to the types of 
operations that will  be  supported  by  the Fund, notably in  terms of  pre-financing,  content of 
the payments applications to the Commission as well as proportional control.  

The partner organisations have a limited capacity to advance the funds necessary. Equally, the 
Member  States  may  have  difficulties  to  mobilise  the  resources  necessary  to  pre-finance  the 
operations. In addition, the Member States facing the greatest fiscal constraints are likely to 
be those with the highest number of most deprived people. In order to address this situation, 
that could put at risk the achievement of the Fund's objective,   the level of pre-financing is set 
at 11% of the total allocation to a Member State.  This will allow covering up to 90% of the 
costs  of  the  first  year's  aid  campaign  not  counting  technical  assistance,  transport, 
administrative costs and the accompanying measures.  

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2012/0295 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

on the Fund for European Aid to the Most Deprived 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article175 (3) thereof, 

Having regard to the proposal from the European Commission, 

After transmission of the draft legislative act to the national Parliaments, 

Having regard to the opinion of the European Economic and Social Committee1,  

Having regard to the opinion of the Committee of the Regions2,  

Acting in accordance with the ordinary legislative procedure, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

In  line  with  the  conclusions  of  the  European  Council  of  17  June  2010,  whereby  the 
Union strategy for smart, sustainable and inclusive growth was adopted, the Union and 
the  Member  States  have  set  themselves  the  objective  of  having  at  least  20  million 
fewer people at risk of poverty and social exclusion by 2020. 

The number of persons suffering from material or even severe material deprivation in 
the Union is increasing and those persons are often too excluded to benefit from the 
activation measures of Regulation (EU) No […CPR], and, in particular of Regulation 
(EU) No […ESF]. 

Article  174  of  the  Treaty  provides  that  in  order  to  promote  its  overall  harmonious 
development, the Union shall develop and pursue actions leading to the strengthening 
of its economic, social and territorial cohesion.  

The  Fund  for  European  Aid  to  the  Most  Deprived  (hereinafter  the  'Fund')  should 
strengthen social cohesion by contributing to the reduction of poverty in the Union by 
supporting national schemes that provide non-financial assistance to the most deprived 
persons  to  alleviate  food  deprivation,  homelessness  and  material  deprivation  of 
children.  

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OJ L , , p. . 
OJ L , , p. . 

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(5) 

(6) 

(7) 

(8) 

(9) 

Under  Article  317  of  the  Treaty,  and  in  the  context  of  shared  management,  the 
conditions allowing the Commission to exercise its responsibilities for implementation 
of the general budget of the Union should be specified and the responsibilities in terms 
of  cooperation  by  the  Member  States  clarified.  Those  conditions  should  enable  the 
Commission to obtain assurance that Member States are using the Fund in a legal and 
regular  manner  and  in  accordance  with  the  principle  of  sound  financial  management 
within  the  meaning  of  Council  Regulation  No  […]  on  the  Financial  Regulation 
applicable  to  the  general  budget  of  the  European  Communities  (hereinafter  ‘the 
Financial Regulation')3.  

Those  provisions  also  ensure  that  the  operations  supported  shall  comply  with 
applicable Union and national laws, notably in regard to the safety of the goods that 
are distributed to the most deprived persons. 

In  order  to  set  out  an  appropriate  financial  framework,  the  Commission  should 
establish, by means of implementing acts, an annual breakdown of global resources by 
Member State using an objective and transparent method reflecting disparities in terms 
of poverty and material deprivation. 

The  operational  programme  of  each  Member  State  should  identify  and  justify  the 
forms of material deprivation to be addressed, and describe the objectives and features 
of  the  assistance  to  the  most  deprived  persons  that  will  be  provided  through  the 
support  of  national  schemes.  It  should  also  include  elements  necessary  to  ensure 
effective and efficient implementation of the operational programme. 

In  order  to  maximise  effectiveness  of  the  Fund,  in  particular  as  regards  the  national 
circumstances, it is appropriate to set out a procedure for potential amendment of the 
operational programme. 

(10)  Exchanges  of  experience  and  best  practices  have  a  significant  added  value  and  the 

Commission should facilitate such dissemination. 

(11) 

(12) 

In  order  to  monitor  the  progress  of  operational  programmes  implementation,  the 
Member  States  should  draw  up  and  provide  to  the  Commission  annual  and  final 
implementation reports thus ensuring the availability of essential and up-to-date date 
information. For the same purposes, Commission and each Member State should meet 
every year for a bilateral review, except if they agree otherwise. 

In  order  to  improve  the  quality  and  design  of  each  operational  programme  and 
evaluate the effectiveness and efficiency of the Fund, ex ante and ex post evaluations 
should  be  conducted.  Those  evaluations  should  be  supplemented  by  surveys  on  the 
most  deprived  persons  who  have  benefited  from  the  operational  programme  and,  if 
necessary,  by  evaluations  during  the  programming  period.  The  responsibilities  of 
Member States and the Commission in this respect should be specified. 

(13)  Citizens have the right to know how the Union’s financial resources are invested and 
to what effects. For the purpose of ensuring wide dissemination of information about 
the achievements of the Fund and to ensure accessibility and transparency of funding 
opportunities,  detailed  rules  about  information  and  communication,  especially  in 

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relation  to  the  responsibilities of  the  Member  States  and  the  beneficiaries,  should  be 
set out. 

(14)  Union  legislation  concerning  the  protection  of  individuals  with  regard  to  the 
processing  of  personal  data  and  on  the  free  movement  of  such  data,  in  particular 
Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 
on the protection of individuals with regard to the processing of personal data and on 
the free movement4 of such data is applicable. 

(15) 

It  is  necessary  to  establish  a  maximum  level  of  co-financing  from  the  Fund  to  the 
operational  programmes  to  provide  for  a  multiplier  effect  of  Union  resources,  while 
the  situation  of  Member  States  facing  temporary  budget  difficulties  should  be 
addressed. 

(16)  Uniform and equitable rules on the eligibility period, operations and expenditures for 
the  Fund  should  be  applied  across  the  Union.  The  conditions  of  eligibility  should 
reflect  the  specific  nature  of  the  Fund’s  objectives  and  target  populations,  notably 
through adequate conditions of eligibility of the operations as well as forms of support 
and rules and conditions of reimbursement. 

(17) 

(18) 

(19) 

[Proposal for a] Regulation of the European Parliament and of the Council establishing 
a  common  organisation  of  the  markets  in  agricultural  products  (Single  CMO 
Regulation)5 provides that products bought under public intervention may be disposed 
of by making them available for the scheme for food distribution to the most deprived 
in the Union if that scheme so provides. Given that, depending on the circumstances, 
obtaining  of  food  from  the  use,  processing  or  sale  of  such  stocks  might  be 
economically  the  most  favourable  option,  it  is  appropriate  to  provide  for  such  a 
possibility in this Regulation. The amounts derived from a transaction concerning the 
stocks should be used for the benefit of the most deprived, and should not be applied 
so as to diminish the obligation of the Member States to co-finance the programme. In 
order  to  ensure  the  most  efficient  possible  use  of  the  intervention  stocks  and  the 
proceeds  thereof,  the  Commission  should  in  accordance  with  Article  19(e)  of  the 
Regulation  (EU)  No  [CMO]  adopt  implementing  acts  establishing  procedures  by 
which  the  products  in  intervention  stocks  may  be  used,  processed  or  sold  for  the 
purposes of the most deprived programme. 

It is necessary to specify the types of actions that can be undertaken at the initiative of 
the  Commission  and  of  the  Member  States  as  technical  assistance  supported  by  the 
Fund. 

In accordance with the principle of shared management, Member States should have 
the  primary  responsibility,  through  their  management  and  control  system,  for  the 
implementation and control of their operational programme. 

(20)  Member  States  should  adopt  adequate  measures  to  guarantee  the  proper  set  up  and 
functioning  of  their  management  and  control  systems  to  give  assurance  on  the  legal 
and  regular  use  of  the  Fund.  The  obligations  of  Member  States  as  regards  the 
management  and  control  systems  of  their  operational  programme,  and  in  relation  to 

4 
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OJ L 281, 23.11.1995, p. 31 

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the  prevention,  detection  and  correction  of  irregularities  and  breaches  of  Union  law 
should therefore be specified. 

(21)  Member  States  should  designate  a  managing  authority,  a  certifying  authority  and  a 
functionally  independent  auditing  authority  for  their  operational  programme.  To 
provide flexibility for Member States in the set-up of control systems, it is appropriate 
to provide the option for the functions of the certifying authority to be carried out by 
the  managing  authority.  The  Member  States  should  also  be  allowed  to  designate 
intermediate  bodies  to  carry  out  certain  tasks  of  the  managing  authority  or  the 
certifying  authority.  The  Member  States  should  in  that  case  lay  down  clearly  their 
respective responsibilities and functions. 

(22)  The  managing  authority  bears  the  main  responsibility  for  the  effective  and  efficient 
implementation of the Fund and thus fulfils a substantial number of functions related 
to  operational  programme  management  and  monitoring,  financial  management  and 
controls  as  well  as  project  selection.  Its  responsibilities  and  functions  should  be  set 
out. 

(23)  The  certifying  authority  should  draw  up  and  submit  to  the  Commission  payment 
applications.  It  should  draw  up  the  annual  accounts,  certifying  the  completeness, 
accuracy and  veracity of the  annual accounts and that the expenditure entered in the 
accounts  complies  with  applicable  Union  and  national  rules.  Its  responsibilities  and 
functions should be set out. 

(24)  The audit authority should ensure that audits are carried out on the management and 
control systems, on an appropriate sample of operations and on the annual accounts. 
Its responsibilities and functions should be set out. 

(25)  Without  prejudice  to  the  Commission's  powers  as  regards  financial  control, 
cooperation between the Member States and the Commission in the framework of this 
Regulation  should  be  ensured  and  criteria  should  be  established  which  allow  the 
Commission to determine, in the context of its strategy of control of national systems, 
the level of assurance it should obtain from national audit bodies. 

(26)  The powers and responsibilities of the Commission to verify the effective functioning 
of the  management and control  systems, and to require Member State action, should 
be laid down. The Commission should also have the power to carry out audits focused 
on issues relating to sound financial management in order to draw conclusions on the 
performance of the Fund. 

(27)  Union budget commitments should be effected annually. In order to ensure effective 
programme  management,  it  is  necessary  to  lay  down  common  rules  for  interim 
payment requests, the payment of the annual balance and the final balance. 

(28) 

In  view  of  ensuring  reasonable  assurance  for  the  Commission,  the  application  for 
interim  payment  should  be  reimbursed  at  a  rate  of  90%  of  the  eligible  expenditures 
included in the payment application. 

(29)  A  pre-financing  at  the  start  of  the  operational  programme  should  ensure  that  the 
Member  State  has  the  means  to  provide  support  to  the  beneficiaries  in  the 
implementation  of  the  operations  from  the  adoption  of  the  operational  programme. 

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(30) 

(31) 

(32) 

(33) 

(34) 

This  pre-financing  should  be  used  exclusively  for  this  purpose  and  beneficiaries 
should receive enough funding to start up an operation upon its selection. 

In order to safeguard the Union's financial interests, there should be measures limited 
in  time  that  allow  the  authorising  officer  by  delegation  to  interrupt  payments  where 
there  is  evidence  to  suggest  a  significant  deficiency  in  the  functioning  of  the 
management  and  control  system,  evidence  of  irregularities  linked  to  a  payment 
application, or a failure to submit documents for the purpose of the examination and 
acceptance of accounts. 

In order to safeguard the Union's financial interests and provide the means to ensure 
effective  programme  implementation,  there  should  be  measures  allowing  for  the 
suspension by the Commission of payments. 

In  order  to  ensure  that  expenditure  financed  by  the  Union  budget  in  any  given 
financial  year  is  used  in  accordance  with  the  applicable  rules,  an  appropriate 
framework should be created for the annual examination and acceptance of accounts. 
Under  this  framework,  the  designated  bodies  should  submit  to  the  Commission,  in 
respect of the operational programme, a management declaration accompanied by the 
certified annual accounts, an annual summary of the final audit reports and of controls 
carried out and an independent audit opinion and control report. 

It  is  necessary  to  specify  the  detailed  procedure  for  the  annual  examination  and 
acceptance  of  accounts  applicable  to  the  Fund  to  ensure  a  clear  basis  and  legal 
certainty  for  those  arrangements.  It  is  important  to  envisage  a  limited  possibility  for 
the Member State to define a provision in its annual accounts for an amount, which is 
subject to an on-going procedure with the audit authority. 

In order to safeguard the Union budget, and to provide legal certainty to the Member 
States,  it  is  appropriate  to  lay  down  the  specific  arrangements  and  procedures  for 
financial  corrections  by  Member  States  and  by  the  Commission,  and  in  particular 
define the circumstances under which breaches of the applicable Union or national law 
can lead to financial correction. 

(35)  The  frequency  of  audits  on  operations  should  be  proportionate  to  the  extent  of  the 
Union's support from the Fund. In particular, the number of audits carried out should 
be reduced where the total eligible expenditure for an operation does not exceed EUR 
100 000. Nevertheless, it should be possible to carry out audits at any time where there 
is evidence of an irregularity or fraud, or as part of an audit sample. In order that the 
level  of  auditing  by  the  Commission  is  proportionate  to  the  risk,  the  Commission 
should be able  to reduce its audit work in  relation  to  operational  programmes  where 
there are no significant deficiencies or where the audit authority can be relied on. In 
addition,  the  scope  of  audits  should  take  fully  into  account  the  objective  and  the 
features of the target populations of the Fund. 

(36) 

In order to ensure financial discipline, it is appropriate to define the arrangements for 
de-commitment of any part of the budget commitment in an operational programme, 
in  particular  where  an  amount  may  be  excluded  from  de-commitment,  notably  when 
delays  in  implementation  result  from  circumstances  which  are  independent  of  the 

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party  concerned,  abnormal  or  unforeseeable  and  whose  consequences  cannot  be 
avoided despite the diligence shown. 

(37) 

In  order  to  supplement  and  amend  certain  non-essential  elements  of  this  Regulation, 
the  power  to  adopt  acts  in  accordance  with  Article  290  of  the  Treaty  should  be 
delegated  to  the  Commission  in  respect  of  the  responsibilities  of  Member  States 
concerning  the  procedure  for  reporting  irregularities  and  recovery  of  sums  unduly 
paid, the modalities of exchange of information of operations, the arrangements for the 
adequate  audit  trail,  the  conditions  of  national  audits,  the  designation  criteria  for 
managing  authorities  and  certifying  authorities,  the  identification  of  commonly 
accepted data carriers, and the criteria for establishing the level of financial correction 
to be applied. It is of particular importance that the Commission carry out appropriate 
consultations during its preparatory work, including at expert level. 

(38)  The  Commission,  when  preparing  and  drawing  up  delegated  acts,  should  ensure  a 
simultaneous,  timely  and  appropriate  transmission  of  relevant  documents  to  the 
European Parliament and Council. 

(39)  The  Commission  should  be  empowered  to  adopt,  by  means  of  implementing  acts 
decisions setting out the annual breakdown of the global resources by Member State, 
decisions  setting  out  annual  financial  allocations  for  each  Member  State,  decisions 
adopting  operational  programmes,  decisions  suspending  payments,  decisions  on 
financial corrections and, in the case of decommitment, decisions to amend decisions 
adopting programmes. 

(40) 

In  order  to  ensure  uniform  conditions  for  the  implementation  of  this  Regulation,  the 
implementing powers relating to the template for the annual and final implementation 
reports  and  the  list  of  common  indicators,  the  template  for  the  structured  survey  on 
end recipients, the electronic data exchange system between the Member State and the 
Commission,  the  template  for  the  management  declaration,  the  models  for  the  audit 
strategy, opinion and annual control report and methodology for the sampling method, 
the rules concerning use of data collected during audits, and the template for payment 
applications should be exercised in accordance with Regulation (EU) No 182/2011 of 
the  European  Parliament  and  of  the  Council  of  16  February  2011  laying  down  the 
rules and general principles concerning mechanisms for control by Member States of 
the Commission's exercise of implementing powers6. 

(41)  This Regulation respects fundamental rights and observes the principles recognised in 
particular  by  the  Charter  of  Fundamental  Rights  of  the  European  Union,  including 
respect for human dignity and for private and family life, the right to the protection of 
personal data, the rights  of  the child, the rights of the  elderly, equality between men 
and  women,  and  the  prohibition  of  discrimination.  This  Regulation  must  be  applied 
according to these rights and principles. 

(42)  Since the objective of this Regulation, namely to improve social cohesion in the Union 
and contribute to the fight against poverty and social exclusion, cannot be sufficiently 
achieved by Member States but can be better achieved at Union level, the Union may 
adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 

6 

OJ L 55, 28.2.2011, p.13. 

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of the Treaty on European Union. In accordance with the principle of proportionality, 
as  set  out  in  that  Article,  this  Regulation  does  not  go  beyond  what  is  necessary  to 
achieve that objective, 

HAVE ADOPTED THIS REGULATION: 

TITLE I. GENERAL PROVISIONS 

Article 1 

Subject matter  

1. 

This  Regulation  establishes  the  Fund  for  European  Aid  to  the  Most  Deprived 
(hereinafter  ‘the  Fund’)  for  the  period  from  1  January  2014  to  31  December  2020 
and  determines  the  objectives  of  the  Fund,  the  scope  of  its  support,  the  financial 
resources  available  and  the  criteria  for  their  allocation  and  lays  down  the  rules 
necessary to ensure the effectiveness of the Fund.  

Article 2 

Definitions  

(1) 

(2) 

(3) 

(4) 

(5) 

The following definitions shall apply: 

'most  deprived  persons'  means  physical  persons,  whether  individuals,  families, 
households or groups composed of such persons, whose need for assistance has been 
established  according  to  the  objective  criteria  adopted  by  the  national  competent 
authorities, or defined by the partner organisations and which are approved by those 
competent authorities; 

'partner  organisations'  means  public  bodies  or  non-for-profit  organisations  that 
deliver the food or goods directly or through other partner organisations to the most 
deprived  persons,  and  whose  operations  have  been  selected  by  the  managing 
authority in accordance with Article 29(3)(b); 

'national schemes' means any scheme having, at least partly, the same objectives as 
the  Fund  and  which  is  being  implemented  at  national,  regional  or  local  level  by 
public bodies or non-for-profit organisations; 

'operation' means a project, contract or action selected by the managing authority of 
the operational programme concerned, or under its responsibility, contributing to the 
objectives of the operational programme to which it relates;  

'completed operation' means an operation that has been physically completed or fully 
implemented  and  in  respect  of  which  all  related  payments  have  been  made  by 
beneficiaries  and  the  support  from  the  corresponding  operational  programme  has 
been paid to the beneficiaries; 

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(6) 

(7) 

(8) 

(9) 

(10) 

'beneficiary' means a public or private body responsible for initiating or initiating and 
implementing operations; 

'end recipient' means the most deprived persons receiving the food or goods and/or 
benefiting from the accompanying measures;  

‘public  support'  means  any  financial  support  given  to  an  operation  that  originates 
from  the  budget  of  national,  regional  or  local  public  authorities,  the  budget  of  the 
Union  related  to  the  Fund,  the  budget  of  public  law  bodies  or  the  budget  of 
associations  of  public  authorities  or  any  body  governed  by  public  law  within  the 
meaning of Article 1(9) of Directive 2004/18/EC of the European Parliament and of 
the Council;  

'intermediate  body'  means  any  public  or  private  body  which  acts  under  the 
responsibility  of  a  managing  or  certifying  authority,  or  which  carries  out  duties  on 
behalf of such an authority in relation to beneficiaries' implementing operations; 

'accounting  year’  means  the  period  from  1  July  to  30  June,  except  for  the  first 
accounting  year,  in  respect  of  which  it  means  the  period  from  the  starting  date  for 
eligibility of expenditure until 30 June 2015, the final accounting year being from 1 
July 2022 to 30 June 2023; 

(11) 

'financial year' means the period from 1 January to 31 December. 

Article 3 

Objectives 

The Fund shall promote social cohesion in the Union by contributing to achieving the 
poverty  reduction  target  of  at  least  20  million  of  the  number  of  persons  at  risk  of 
poverty and social exclusion in accordance with the Europe 2020 strategy. The Fund 
shall contribute to achieving the specific objective of alleviating the worst forms of 
poverty  in  the  Union  by  providing  non-financial  assistance  to  the  most  deprived 
persons.  This  objective  shall  be  measured  by  the  number  of  persons  receiving 
assistance from the Fund. 

Article 4 

Scope of support 

1. 

2. 

The Fund shall support national schemes whereby food products and basic consumer 
goods for the personal use of homeless persons or of children are distributed to the 
most deprived persons through partner organisations selected by Member States. 

The  Fund  may  support  accompanying  measures,  complementing  the  provision  of 
food and goods, contributing to the social inclusion of the most deprived persons. 

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14 

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3. 

The  Fund  shall  promote  mutual  learning,  networking  and  dissemination  of  good 
practices in the area of non-financial assistance to the most deprived persons.  

Article 5 

Principles 

(12) 

The part of the Union budget allocated to the Fund shall be implemented within the 
framework of shared management between the Member States and the Commission, 
in  accordance  with  Article 55(1)(b)  of  the  Financial  Regulation,  with  the  exception 
of  technical  assistance  at  the  initiative  of  the  Commission,  which  shall  be 
implemented  in  the  framework  of  direct  management  in  accordance  with  Article 
55(1) (a) of the Financial Regulation.  

(13) 

The Commission and the Member States shall ensure that support from the Fund is 
consistent with the policies and priorities of the Union and complementary to other 
instruments of the Union. 

(14) 

Support  from  the  Fund  shall  be  implemented  in  close  cooperation  between  the 
Commission and the Member States. 

(15)  Member  States  and  the  bodies  designated  by  them  for  that  purpose  shall  be 
responsible  for  implementing  the  operational  programmes  and  carrying  out  their 
tasks  under  this  Regulation  in  accordance  with  the  institutional,  legal  and  financial 
framework of the Member State and subject to compliance with this Regulation. 

(16) 

(17) 

(18) 

(19) 

(20) 

(21) 

Arrangements  for  the  implementation  and  use  of  the  Fund,  and  in  particular  the 
financial  and  administrative  resources  required  in  relation  to  reporting,  evaluation, 
management  and  control  shall  take  into  account  the  principle  of  proportionality 
having regard to the level of support allocated. 

In accordance with their respective responsibilities, the Commission and the Member 
States  shall  ensure  coordination  with  the  European  Social  Fund,  and  with  other 
Union policies and instruments.  

The  Commission  and  the  Member  States  and  the  beneficiaries  shall  apply  the 
principle  of  sound  financial  management  in  accordance  with  Article  26  of  the 
Financial Regulation. 

The Commission and the Member States shall ensure the effectiveness of the Fund, 
in particular through monitoring, reporting and evaluation. 

The  Commission  and  the  Member  States  shall  carry  out  their  respective  roles  in 
relation  to  the  Fund  with  the  aim  of  reducing  the  administrative  burden  for 
beneficiaries. 

The Commission and the Member States shall ensure that equality between men and 
women and the integration of the gender perspective are promoted during the various 
stages of the implementation of the Fund. The Commission and the Member States 

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shall  take  appropriate  steps  to  prevent  any  discrimination  based  on  sex,  racial  or 
ethnic  origin,  religion  or  belief,  disability,  age  or  sexual  orientation  in  obtaining 
access to the Fund.  

(22) 

Operations  financed  by  the  Fund  shall  comply  with  applicable  Union  and  national 
law. In particular, the Fund may only be used to support distribution of food or goods 
that are in conformity with the Union legislation on consumer product safety.  

(23)  Member States and beneficiaries shall choose the food products and the goods on the 
basis  of  objective  criteria.  The  selection  criteria  for  the  food  products,  and  where 
appropriate for goods, shall also take into consideration climatic and environmental 
aspects, in particular with a view to reduction of food waste.  

TITLE II RESOURCES AND PROGRAMMING 

Article 6 

Global resources 

1. 

2. 

3. 

The  global  resources  available  for  budgetary  commitment  from  the  Fund  for  the 
period 2014-2020 shall be EUR 2 500 000 000 at 2011 prices, in accordance with the 
annual breakdown set out in Annex II.  

For the purpose of programming and subsequent inclusion in the general budget of 
the Union, the amount of resources shall be indexed at 2% per year.  

The Commission shall adopt a decision, by means of implementing acts, setting out 
the annual breakdown of the global resources by Member State, in accordance with 
Article  84(5) of Regulation (EU) No… (CPR), without prejudice to paragraph 4 of 
this Article, taking into account the following indicators established by Eurostat: 

(a) 

the population suffering from severe material deprivation; 

(b) 

the population living in households with very low work intensity. 

4. 

0.35%  of  the  global  resources  shall  be  allocated  to  technical  assistance  at  the 
initiative of the Commission. 

Article 7 

Operational programme 

1. 

Each  Member  State  shall  submit  to  the  Commission  one  operational  programme 
covering  the  period  between  1  January  2014  and  31  December  2020  within  three 
months of the entry into force of this Regulation, containing the following items: 

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(a) 

(b) 

(c) 

(d) 

(e) 

(f) 

(g) 

(h) 

(i) 

an identification of and a justification for selecting the type(s) of material 
deprivation  to  be  addressed  under  the  operational  programme  and  a 
description  for  each  type  of  material  deprivation  addressed  of  the  main 
characteristics and the objectives of the distribution of food or goods and 
the accompanying measures to be provided, having regard to the results 
of the ex ante evaluation carried out in accordance with Article 14;  

a  description  of  the  corresponding  national  scheme(s)  for  each  type  of 
material deprivation addressed; 

a description of the mechanism setting the eligibility criteria for the most 
deprived  persons,  differentiated  if  necessary  by  type  of  material 
deprivation addressed; 

the  criteria  for  the  selection  of  operations  and  a  description  of  the 
selection  mechanism  differentiated  if  necessary  by  type  of  material 
deprivation addressed; 

the criteria for the selection of the partner organisations differentiated if 
necessary by type of material deprivation addressed;  

a description of the mechanism used to ensure complementarity with the 
European Social Fund; 

a  description  of  the  provisions  for  implementing  the  operational 
programme  containing  the  identification  of  the  managing  authority,  the 
certifying authority where applicable, the audit authority and the body to 
which payments are to be made by the Commission and a description of 
the monitoring procedure; 

a  description  of  the  measures  taken  to  involve  the  competent  regional, 
local  and  other  public  authorities  as  well  as  bodies  representing  civil 
society  and  bodies  responsible  for  promoting  equality  and  non-
discrimination in the preparation of the operational programme; 

a  description  of  the  planned  use  of  technical  assistance  in  accordance 
with  Article  25(2),  including  actions  to  reinforce  the  administrative 
capacity  of  the  beneficiaries  in  relation  to  the  implementation  of  the 
operational programme; 

(j) 

a financing plan containing following tables: 

(i)  

a table  specifying  for each year in accordance with Article 18 the 
amount  of  the  financial  appropriation  envisaged  for  support  from 
the Fund and the co-financing in accordance with Article 18; 

(ii)   a table specifying, for the whole programming period, the amount 
of  the  total  financial  appropriation  in  respect  of  support  from  the 
operational  programme  for  each  type  of  material  deprivation 
addressed as well as the corresponding accompanying measures. 

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The  partner  organisations  referred  to  in  point  (e)  that  deliver  directly  the  food  or 
goods shall themselves undertake activities complementing the provision of material 
assistance,  aiming  at  the  social  inclusion  of  the  most  deprived  persons,  whether  or 
not these activities are supported by the Fund. 

Operational  programmes  shall  be  drawn  up  by  Member  States  or  any  authority 
designated  by  them  in  cooperation  with  the  competent  regional,  local  and  other 
public authorities as well as bodies representing civil society and bodies responsible 
for promoting equality and non-discrimination. 

The Member States shall draft their operational programmes in accordance with the 
template set out in Annex I. 

Article 8 

Adoption of the operational programme 

The Commission shall assess the consistency of the operational programme with this 
Regulation and its contribution to the objectives of the Fund, taking into account the 
ex ante evaluation carried out in accordance with Article 14.  

The  Commission  may  make  observations  within  three  months  of  the  date  of 
submission  of  the  operational  programme.  The  Member  State  shall  provide  to  the 
Commission all necessary additional information and, where appropriate, revise the 
proposed operational programme. 

Provided  that  any  observations  made  by  the  Commission  in  accordance  with 
paragraph  2  have  been  satisfactorily  taken  into  account,  the  Commission  shall,  by 
means  of  implementing  acts,  approve  the  operational  programme  no  later  than  six 
months  after  its  formal  submission  by  the  Member  State,  but  not  before  1  January 
2014. 

Article 9 

Amendments of the operational programme 

Member State may submit a request for amendment of the operational programme. It 
shall be accompanied by the revised operational programme and the justification for 
the amendment. 

The Commission shall assess the information provided in accordance with paragraph 
1, taking account of the justification provided by the Member State. The Commission 
may  make  observations  and  the  Member  State  shall  provide  to  the  Commission  all 
necessary additional information.  

The Commission shall, by means of implementing acts, approve the amendment of 
an operational programme no later than five months after their formal submission by 

2. 

3. 

1. 

2. 

3. 

1. 

2. 

3. 

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the  Member  State  provided  that  any  observations  made  by  the  Commission  have 
been satisfactorily taken into account.  

Article 10 

Platform 

The Commission shall set up a Union level platform to facilitate the exchange of experience, 
capacity building and networking, as well as dissemination of relevant outcomes in the area of 
non-financial assistance to the most deprived persons.  

In  addition,  the  Commission  shall  consult,  at  least  once  a  year,  the  organisations  which 
represent the partner organisations at Union level on the implementation of support from the 
Fund. 

TITLE III MONITORING AND EVALUATION, INFORMATION AND 
COMMUNICATION 

Article 11 

Implementation reports and indicators 

1. 

2. 

3. 

4. 

From 2015 to 2022, the Member States shall submit to the Commission, by 30 June 
of each year, an annual implementation report for the operational programme in the 
previous financial year. 

The Member States shall draft the annual implementation report in accordance with 
the  template  adopted  by  the  Commission,  including  the  list  of  common  input  and 
outcome indicators.  

The  annual  implementation  reports  shall  be  admissible  where  they  contain  all  the 
information  required  in  accordance  with  the  template  referred  in  paragraph  2, 
including  the  common  indicators.  The  Commission  shall  inform  the  Member  State 
concerned  within  15  working  days  from  the  date  of  receipt  of  the  annual 
implementation report if it is not admissible. Where the Commission has not sent that 
information within the time limit, the report shall be deemed admissible. 

The  Commission  shall  examine  the  annual  implementation  report  and  inform  the 
Member  State  of  its  observations  within  two  months  of  the  receipt  of  the  annual 
implementation report.  

Where  the  Commission  does  not  provide  observations  within  this  time  limit,  the 
reports shall be deemed to be accepted. 

5. 

The Member State shall submit a final report on  implementation of  the operational 
programme by 30 September 2023.  

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The Member States shall draft the final implementation report in accordance with the 
template adopted by the Commission. 

The  Commission  shall  examine  the  final  implementation  report  and  inform  the 
Member State of its observations within five months of receipt of the final report.  

Where  the  Commission  does  not  provide  observations  within  this  time  limit,  the 
reports shall be deemed to be accepted. 

The  Commission  shall  adopt  the  template  for  the  annual  implementation  report, 
including  the  list  of  common  indicators  and  for  the  final  implementation  report  by 
means  of  implementing  act.  This  implementing  act  shall  be  adopted  in  accordance 
with the advisory procedure referred to in Article 60(2). 

The  Commission  may  address  observations  to  a  Member  State  concerning  the 
implementation of the operational programme. The managing authority shall within 
three months inform the Commission of the corrective measures taken. 

The managing authority shall make public a summary of the contents of each annual 
and final implementation report. 

Article 12 

Bilateral review meeting 

The Commission and each Member State shall meet every year from 2014 to 2022, 
unless  otherwise  agreed,  to  examine  the  progress  in  implementing  the  operational 
programme, 
the 
the  annual 
Commission's observations referred to in Article 11(7), where applicable. 

implementation  report  and 

taking  account  of 

The bilateral review meeting shall be chaired by the Commission. 

The Member State shall ensure that appropriate follow-up is given to any comments 
of the Commission following the meeting. 

Article 13 

General provisions on evaluation 

Member  States  shall  provide  the  resources  necessary  for  carrying  out  evaluations, 
and  shall  ensure  that  procedures  are  in  place  to  produce  and  collect  the  data 
necessary for evaluations, including data related to the common indicators referred to 
in Article 11. 

Evaluations  shall  be  carried  out  by  experts  that  are  functionally  independent  of  the 
authorities  responsible  for  operational  programme  implementation.  All  evaluations 
shall be made public in their entirety. 

6. 

7. 

8. 

1. 

2. 

3. 

1. 

2. 

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Article 14 

Ex ante evaluation 

1. 

2. 

Member States shall carry out an ex ante evaluation of the operational programme. 

The ex ante evaluation shall be carried out under the responsibility of the authority 
responsible  for  preparing  the  operational  programmes.  It  shall  be  submitted  to  the 
Commission  at  the  same  time  as  the  operational  programme,  together  with  an 
executive summary.  

3. 

Ex ante evaluations shall appraise the following elements:  

(c) 

(d) 

(e) 

the  contribution  to  the  Union  objective  of  at  least  20  million  fewer  people  at 
risk of poverty and social exclusion by 2020, having regard to the selected type 
of  material  deprivation  to  be  addressed,  taking  into  account  national 
circumstances  in  terms  of  poverty  and  social  exclusion  and  material 
deprivation; 

the internal coherence of the proposed operational programme and its relation 
with other relevant financial instruments; 

the consistency of the allocation of budgetary resources with the objectives of 
the operational programme; 

(f) 

contribution of the expected outputs to the results; 

(g) 

the suitability of the procedures for monitoring the operational programme and 
for collecting the data necessary to carry out evaluations. 

Article 15 

Evaluation during the programming period 

1. 

2. 

3. 

During  the  programming  period,  the  managing  authority  may  carry  out  evaluations 
for assessing the effectiveness and efficiency of the operational programme.  

The managing authority shall carry out a structured survey on end recipients in 2017 
and  2021,  in  accordance  with  the  template  provided  by  the  Commission.  The 
Commission  shall  adopt  the  template  by  means  of  an  implementing  act.  This 
implementing  act  shall  be  adopted  in  accordance  with  the  advisory  procedure 
referred to in Article 60(2). 

The  Commission  may  carry  out,  at  its  own  initiative,  evaluation  of  operational 
programmes.  

EN 

Article 16 

Ex post evaluation 

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At  its  own  initiative  and  in  close  cooperation  with  the  Member  States,  the 
Commission  shall  carry  out,  with  the  assistance  of  external  experts,  an  ex-post 
evaluation, to assess the effectiveness and sustainability of results obtained as well as 
to measure the added value of the Fund. This ex post evaluation shall be completed 
by 31 December 2023.  

Article 17 

Information and communication  

The Member States shall provide information on and promote the actions supported 
by  the  Fund.  The  information  shall  be  addressed  to  the  most  deprived  persons,  the 
media and the wider public. It shall highlight the role of the Union and ensure that 
the contribution from the Fund is visible. 

The  managing  authority  shall,  in  order  to  ensure transparency  in the support of the 
Fund,  maintain  a  list  of  operations  supported  by  the  Fund  in  CSV  or  XML  format 
which  shall  be  accessible  through  a  website.  The  list  shall  include  at  least 
information  on  the  beneficiary  name,  its  address  and  allocated  amount  of  Union 
funding as well as the type of material deprivation addressed.  

The list of operations shall be updated at least every twelve months.  

the 

implementation  of  an  operation, 

During 
the  beneficiaries  and  partner 
organisations  shall  inform  the  public  about  the  support  obtained  from  the  Fund  by 
placing at least one poster with information about the operation (minimum size A3), 
including about the financial support from the Union, at a location readily visible to 
the  public,  at  each  place  of  provision  of  the  food,  goods  and  any  accompanying 
measure, except if this is not possible due to the circumstances of the distribution. 

Those beneficiaries and partner organisations which have websites shall also provide 
a short description of the operation, including its aims and results, and highlighting 
the financial support from the Union. 

All information and communication measures undertaken by the beneficiary and the 
partner  organisations  shall  acknowledge support  from  the  Fund  to  the  operation  by 
displaying the emblem of the Union together with a reference to the Union and the 
Fund. 

The  managing  authority  shall  inform  beneficiaries  of  publication  of  the  list  of 
operations  in  accordance  with  paragraph  2.  The  managing  authority  shall  provide 
information  and  publicity  kits,  including  templates  in  electronic  format,  to  help 
beneficiaries  and  partner  organisations  to  meet  their  obligations  as  set  out  in 
paragraph 3. 

In processing personal data pursuant to this Article, the managing authority as well 
as the beneficiaries and partner organisations shall comply with Directive 95/46/EC.  

1. 

2. 

3. 

4. 

5. 

6. 

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22 

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TITLE IV FINANCIAL SUPPORT FROM THE FUND 

Article 18 

Co-financing 

1. 

2. 

3. 

1. 

The co-financing rate at the level of the operational programme shall not be higher 
than 85% of the public eligible expenditure. 

The  Commission  decision  adopting  an  operational  programme  shall  fix  the  co-
financing rate applicable to the operational programme and the maximum amount of 
support from the Fund.  

The technical assistance measures implemented at the initiative of, or on behalf of, 
the Commission may be financed at the rate of 100%. 

Article 19 

Increase in payments for Member States with temporary budgetary difficulties  

At  the  request  of  a  Member  State,  interim  payments  and  payments  of  the  final 
balance  may  be  increased  by  10  percentage  points  above  the  co-financing  rate 
applicable to the operational programme. The increased rate, which can not exceed 
100%, shall apply to requests for payment relating to the accounting period in which 
the  Member  State  has  submitted  its  request  and  subsequent  accounting  periods 
during which the Member State meets one of the following conditions: 

(h)  where  the  Member  State  concerned  has  adopted  the  euro,  it  receives  macro-
financial  assistance  from  the  Union  in  accordance  with  Council  Regulation 
(EU) No 407/20107; 

(i)  where  the  Member  State  concerned  has  not  adopted  the  euro,  it  receives 
medium-term financial assistance in accordance with Council Regulation (EC) 
No 332/20028; 

(j) 

financial  assistance  is  made  available  to  it  in  accordance  with  the  Treaty 
establishing the European Stability Mechanism. 

2. 

Notwithstanding  paragraph  1,  Union  support  through  interim  payments  and 
payments  of  the  final  balance  shall  not  be  higher  than  the  public  support  and  the 
maximum  amount  of  support  from  the  Fund,  as  laid  down  in  the  Commission 
decision approving the operational programme. 

7

8

OJ L 118, 12.5.2010, p.1. 
OJ L 53, 23.2.2002, p. 1. 

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23 

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Article 20 

Eligibility period 

1. 

2. 

3. 

4. 

1. 

2. 

3. 

Expenditure  shall  be  eligible  for  a  support  from  the  operational  programme  if  it  is 
incurred and paid by a beneficiary between 1 January 2014 and 31 December 2022.  

Operations  shall  not  be  selected  for  support  by  the  operational  programme  where 
they have been physically completed or fully implemented before the application for 
funding  under  the  operational  programme  is  submitted  by  the  beneficiary  to  the 
managing authority, irrespective of whether all related payments have been made by 
the beneficiary. 

This  Article  shall  be  without  prejudice  to  the  rules  on  eligibility  of  technical 
assistance at the initiative of the Commission as set out in Article 25. 

In  the  case  of  amendment  of  an  operational  programme,  expenditure  becoming 
eligible  because  of  the  amendment  to  the  operational  programme  shall  only  be 
eligible  from  the  date  of  submission  to  the  Commission  of  the  request  for 
amendment. 

Article 21 

Eligibility of operations 

Operations supported by the operational programme shall be located in the Member 
State covered by the operational programme. 

Operations  may  receive  support  from  the  operation  programme  provided  that  they 
have been selected in accordance with a fair and transparent procedure, on the basis 
of the criteria laid down in the operational programme. 

The food and the goods  for  homeless  persons or  for children may be purchased  by 
the partner organisations themselves.  

They may also be purchased by a public body and made available free of charge to 
the  partner  organisations.  In  that  case,  the  food  may  be  obtained  from  the  use, 
processing  or  sale  of  the  products  in  intervention  stocks  made  available  in 
accordance with Article 15 of the Regulation (EU) No [CMO], provided that this is 
economically the most favourable option and does not unduly delay the delivery of 
the  food  products  to  the  partner  organisations.  Any  amount  derived  from  a 
transaction concerning those stocks shall be used for the benefit of the most deprived 
persons,  and  shall  not  be  applied  so  as  to  diminish  the  obligation  of  the  Member 
States, provided in Article 18 of this Regulation, to co-finance the programme. 

The Commission shall apply the procedures adopted pursuant to Article 19(e) of the 
Regulation  (EU)  No  [CMO]  by  which  the  products  in  intervention  stocks  may  be 

EN 

24 

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used,  processed  or  sold  for  the  purposes  of  this  Regulation,  in  order  to  ensure  the 
most efficient possible use of the intervention stocks and the proceeds thereof. 

That  material  assistance  shall  be  distributed  free  of  charge  to  the  most  deprived 
persons.  

An  operation  supported  by  the  Fund  shall  not  receive  support  from  another  Union 
instrument.  

4. 

5. 

Article 22 

Forms of support 

The Fund shall be used by Member States to provide support in the forms of grants, 
procurement or a combination thereof. 

Article 23 

Forms of grants 

1. 

Grants may take the following forms: 

(k) 

reimbursement of eligible costs actually incurred and paid; 

(l) 

reimbursement on the basis of unit costs; 

(m) 

lump sums not exceeding EUR 100 000 of public support; 

(n) 

flat-rate  financing,  determined  by  the  application  of  a  percentage  to  one  or 
several defined categories of costs. 

The options referred to in paragraph 1 may be combined only where each is applied 
to  different  categories  of  costs  or  where  they  are  used  for  successive  phases  of  an 
operation. 

The  amounts  referred  to  in  paragraph  1(b),  (c)  and  (d)  shall  be  established  on  the 
basis of: 

2. 

3. 

(a) 

a  fair,  equitable  and  verifiable  calculation  method  based  on  one  of  the 
following: 

(i) statistical data or other objective information; or 

(ii)  the  verified  historical  data  of  individual  beneficiaries  or  the 

application of their usual cost accounting practices; 

EN 

25 

   EN 

 
(b)  methods and corresponding unit costs, lump sums and flat-rate financing 
applied  under  schemes  for  grants  funded  entirely  by  the  Member  State 
concerned for a similar type of operation and beneficiary; 

(c) 

rates established by this Regulation; 

(d) 

a case-by-case basis by reference to a draft budget agreed ex ante by the 
managing authority, where public support does not exceed EUR 100 000. 

4. 

5. 

The amounts calculated in the forms referred to in paragraph 1(b), (c) and (d) shall 
be  regarded  as  eligible  expenditure  incurred  and  paid  by  the  beneficiary  for  the 
purpose of applying Title VI. 

The document setting out the conditions for support for each operation shall set out 
the  method  to  be  applied  for  determining  the  costs  of  the  operation  and  the 
conditions for payment of the grant. 

Article 24 

Eligibility of expenditure  

1. 

The costs eligible for a support from the operational programme shall be: 

(o) 

the  costs  of  purchasing  food  and  basic  consumer  goods  for  personal  use  of 
homeless persons or of children; 

(p)  where a public body purchases the food or basic consumer goods for personal 
use  of  homeless  persons  or  of  children  and  provide  them  to  partner 
organisations, the costs of transporting of food or goods to the storage depots 
of the partner organisations at a flat rate of 1 % of the costs referred to in point 
(a);  

(q) 

(r) 

the  administrative,  transport  and  storage  costs  borned  by  the  partner 
organisations at a flat rate of 5% of the costs referred to in point (a);  

the  costs  of  social  inclusion  activities  undertaken  and  declared  by  the  partner 
organisations  delivering  directly  the  material  assistance  to  the  most  deprived 
persons at a flat rate of 5% of the costs referred to in point (a); 

(s) 

costs incurred pursuant to Article 25. 

2. 

The  following  costs  shall  not  be  eligible  for  a  support  from  the  operational 
programme: 

(t) 

interest on debt; 

(u) 

costs of second-hand goods; 

(v)  value added tax. However, VAT amounts shall be eligible where they are not 
recoverable under national VAT legislation and are paid by a beneficiary other 

EN 

26 

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than a non-taxable person as defined in the first subparagraph of Article 13(1) 
of Council Directive 2006/112/EC9. 

Article 25 

Technical assistance 

1. 

2. 

At the initiative of, or on behalf of the Commission, subject to a ceiling of 0,35 % of 
its  annual  allocation,  the  Fund  may  finance  preparation,  monitoring,  administrative 
and  technical  assistance,  audit,  information,  control  and  evaluation  measures 
necessary  for  implementing  this  Regulation  as  well  as  activities  related  to  the 
platform, pursuant to Article 10.  

At  the  initiative  of  the  Member  States,  subject  to  a  ceiling  of  4  %  of  the  Fund 
allocation,  the  operational  programme  may  finance  preparation,  management, 
monitoring,  administrative  and  technical  assistance,  audit,  information,  control  and 
evaluation measures necessary for implementing this Regulation. It may also finance 
technical assistance and capacity building of partner organisations.  

TITLE V MANAGEMENT AND CONTROL 

Article 26 

General principles of Member State management and control systems 

Management and control systems shall provide for: 

(b) 

(c) 

(d) 

(e) 

(f) 

(g) 

(h) 

a  description  of  the  functions  of  each  body  concerned  in  management  and  control, 
and the allocation of functions within each body; 

compliance  with  the  principle  of  separation  of  functions  between  and  within  such 
bodies; 

procedures for ensuring the correctness and regularity of expenditure declared; 

computerised  systems  for  accounting,  for  the  storage  and  transmission  of  financial 
data and data on indicators, for monitoring and for reporting; 

systems for reporting and monitoring where the responsible body entrusts execution 
of tasks to another body; 

arrangements for auditing the functioning of the management and control systems; 

systems and procedures to ensure an adequate audit trail; 

9 

OJ L347, 11.12.2006, p.1. 

EN 

27 

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(i) 

the  prevention,  detection  and  correction  of  irregularities,  including  fraud,  and  the 
recovery of amounts unduly paid, together with any interest; 

Article 27 

Responsibilities of Member States 

Member States shall fulfil the management, control and audit obligations and assume 
the resulting responsibilities laid down in the rules on shared management set out in 
the  Financial  Regulation  and  this  Regulation.  In  accordance  with  the  principle  of 
shared  management,  Member  States  shall  be  responsible  for  the  management  and 
control of operational programmes. 

Member  States  shall  prevent,  detect  and  correct  irregularities  and  shall  recover 
amounts unduly paid, together with any interest on late payments. They shall notify 
these  irregularities  to  the  Commission  and  shall  keep  the  Commission  informed  of 
the progress of related administrative and legal proceedings. 

When  amounts  unduly  paid  to  a  beneficiary  cannot  be  recovered  and  this  is  as  a 
result of fault or negligence on the part of a Member State, the Member State shall be 
responsible  for  reimbursing  the  amounts  concerned  to  the  general  budget  of  the 
Union. 

The  Commission  shall  be  empowered  to  adopt  delegated  acts  in  accordance  with 
Article  59  laying  down  detailed  rules  concerning  the  obligations  of  the  Member 
States specified in this paragraph. 

Member  States  shall  establish  and  implement  a  procedure  for  the  independent 
examination and resolution of complaints concerning the selection or implementation 
of operations co-financed by the Fund. Member States shall report the results of such 
examinations to the Commission upon request. 

All  official  exchanges  of  information  between  the  Member  State  and  the 
Commission  shall  be  carried  out  using  an  electronic  data  exchange  system 
established  in  compliance  with  the  terms  and  conditions  laid  down  by  the 
Commission  by  means  of  implementing  acts.  Those  implementing  acts  shall  be 
adopted in accordance with the examination procedure referred to in Article 60(3). 

Article 28 

Designation and organisation of management and control bodies 

The  Member  State  shall  designate  a  national  public  authority  or  body  as  managing 
authority.  

The Member State shall designate a national public authority or body as a certifying 
authority, without prejudice to paragraph 3.  

1. 

2. 

3. 

4. 

1. 

2. 

EN 

28 

   EN 

 
3. 

4. 

5. 

6. 

7. 

8. 

1. 

2. 

The Member State may designate a managing authority which carries out in addition 
the functions of the certifying authority. 

The  Member  State  shall  designate  a  national  public  authority  or  body,  functionally 
independent  from  the  managing  authority  and  the  certifying  authority,  as  audit 
authority.  

Provided  that  the  principle  of  separation  of  functions  is  respected,  the  managing 
authority, the certifying authority, where applicable, and the audit authority may be 
part of the same public authority or body. 

The  Member  State  may  designate  one  or  more  intermediate  bodies  to  carry  out 
certain  tasks  of  the  managing  or the certifying  authority under the responsibility of 
that  authority.  The  relevant  arrangements  between  the  managing  authority  or 
certifying authority and the intermediate bodies shall be formally recorded in writing. 

The Member State or the managing authority may entrust the management of part of 
the  operational  programme  to  an  intermediate  body  by  way  of  an  agreement  in 
writing between the intermediate body and the Member State or managing authority. 
The  intermediate  body  shall  provide  guarantees  of  its  solvency  and  competence  in 
the domain concerned, as well as its administrative and financial management. 

The  Member  State  shall  lay  down  in  writing  rules  governing  its  relations  with  the 
managing  authority,  certifying  authority  and  audit  authority,  the  relations  between 
such authorities, and the relations of such authorities with the Commission. 

Article 29 

Functions of the managing authority 

The  managing  authority  shall  be  responsible  for  managing  the  operational 
programme in accordance with the principle of sound financial management. 

As  regards  the  management  of  the  operational  programme,  the  managing  authority 
shall: 

(a)  draw  up  and  submit  to  the  Commission  annual  and  final  implementation 

reports; 

(b)  make  available  to  intermediate  bodies  and  beneficiaries  information  that  is 
relevant  to  the  execution  of  their  tasks  and  the  implementation  of  operations 
respectively; 

(c) 

(d) 

establish a system to record and store in computerised form data necessary for 
monitoring, evaluation, financial management, verification and audit; 

ensure that the data referred to in point (c) is collected, entered and stored in 
the system, in compliance with the provisions Directive 95/46/CE. 

3. 

As regards the selection of operations, the managing authority shall: 

EN 

29 

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(e)  Draw up and apply appropriate selection procedures and criteria that are non-

discriminatory and transparent; 

(f) 

ensure that the selected operation: 

(i)  

falls within the scope of the Fund and the operational programme; 

(ii)   fulfils  the  criteria  set  out  in  the  operational  programme  and  in 

Articles 20, 21 and 24; 

(iii)   takes into account the principles set out in Article 5(10), (11) and 

(12). 

(g)  provide to the beneficiary a document setting out the conditions for support of 
each operation including the specific requirements concerning the products or 
services to be delivered under the operation, the financing plan, and the time-
limit for execution; 

(h) 

(i) 

satisfy  itself  that  the  beneficiary  has  the  administrative,  financial  and 
operational capacity to fulfil the conditions defined in point (c) before approval 
of the operation; 

satisfy itself that, where the operation has started before the submission of an 
application  for  funding  to  the  managing  authority,  Union  and  national  rules 
relevant for the operation have been complied with; 

(j) 

determine  the  type  of  material  assistance  to  which  the  expenditure  of  an 
operation shall be attributed. 

4. 

As regards the financial management and control of the operational programme, the 
managing authority shall: 

(k)  verify that the co-financed products and services have been delivered and that 
expenditure  declared  by  the  beneficiaries  has  been  paid  by  them  and  that  it 
complies  with  applicable  Union  and  national  law,  the  operational  programme 
and the conditions for support of the operation; 

(l) 

ensure  that  beneficiaries  involved  in  the  implementation  of  operations 
reimbursed  pursuant  to  Article  23(1)(a)  maintain  either  a  separate  accounting 
system  or  an  adequate  accounting  code  for  all  transactions  relating  to  an 
operation; 

(m)  put in place effective and proportionate anti-fraud measures taking into account 

the risks identified; 

(n) 

set up procedures to ensure that all documents regarding expenditure and audits 
required  to  ensure  an  adequate  audit  trail  are  held  in  accordance  with  the 
requirements of Article 26(g); 

(o)  draw up the management declaration and annual summary referred to in Article 

56 (5) (a) and (b) of the Financial Regulation. 

EN 

30 

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5. 

Verifications pursuant to paragraph 4(a) shall include the following procedures: 

(p) 

administrative verifications in respect of each application for reimbursement by 
beneficiaries; 

(q)  on-the-spot verifications of operations. 

The frequency and coverage of the on-the-spot verifications shall be proportionate to 
the amount of public support to an operation and the level of risk identified by these 
verifications and audits by the audit authority for the management and control system 
as a whole. 

On-the-spot verifications of individual operations pursuant to paragraph (5)(b) may 
be carried out on a sample basis. 

Where  the  managing  authority  is  also  a  beneficiary  under  the  operational 
programme,  arrangements  for  the  verifications  referred  to  in  paragraph  4(a)  shall 
ensure adequate separation of functions. 

The  Commission  shall  adopt  delegated  acts,  in  accordance  with  Article  59,  laying 
down the modalities of the exchange of information in paragraph 2(c). 

The  Commission  shall  adopt  delegated  acts,  in  accordance  with  Article  59,  laying 
down rules concerning arrangements for the audit trail referred to in paragraph 4(d). 

The  Commission  shall  adopt,  by  means  of  implementing  acts,  the  template  for  the 
management declaration referred to in paragraph 4(e). Those implementing acts shall 
be adopted in accordance with the advisory procedure referred to in Article 60(2). 

6. 

7. 

8. 

9. 

10. 

Article 30 

Functions of the certifying authority 

The certifying authority shall be responsible in particular for the following: 

1. 

2. 

3. 

4. 

drawing  up  and  submitting  to  the  Commission  payment  applications  and  certifying 
that these result from reliable accounting systems, are based on verifiable supporting 
documents and have been subject to verifications by the managing authority; 

drawing  up  the  annual  accounts  referred  to  in  Article  56  (5)  (a)  of  the  Financial 
Regulation; 

certifying  the  completeness,  accuracy  and  veracity  of  the  annual  accounts  and  that 
the expenditure entered in the accounts complies with applicable Union and national 
rules  and  has  been  incurred  in  respect  of  operations  selected  for  funding  in 
accordance  to  the  criteria  applicable  to  the  operational  programme  and  complying 
with Union and national rules; 

ensuring  that  there  is  a  system  which  records  and  stores,  in  computerised  form, 
accounting  records  for  each  operation,  and  which  supports  all  the  data  required  for 
drawing up payment applications and annual accounts, including records of amounts 

EN 

31 

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5. 

6. 

7. 

8. 

1. 

2. 

3. 

4. 

recoverable, amounts recovered and amounts withdrawn following cancellation of all 
or part of the contribution for an operation or the operational programme; 

ensuring for the purposes of drawing up and submission of payment applications that 
it has received adequate information from the managing authority on the procedures 
and verifications carried out in relation to expenditure; 

taking into account when drawing up and submitting payment applications the results 
of all audits carried out by or under the responsibility of the audit authority; 

maintaining  accounting  records  in  a  computerised  form  of  expenditure  declared  to 
the Commission and the corresponding public contribution paid to the beneficiaries; 

keeping  an  account  of  amounts  recoverable  and  of  amounts  withdrawn  following 
cancellation  of  all  or  part  of  the  contribution  for  an  operation.  Amounts  recovered 
shall  be  repaid  to  the  general  budget  of  the  Union  prior  to  the  closure  of  the 
operational programme by deducting them from the next statement of expenditure. 

Article 31 

Functions of the audit authority 

The  audit  authority  shall  ensure  that  audits  are  carried  out  on  the  management  and 
control systems, on an appropriate sample of operations and on the annual accounts. 

The  Commission  shall  be  empowered  to  adopt  delegated  acts  in  accordance  with 
Article 59 to set out the conditions which those audits shall fulfil. 

Where  audits  are  carried  out  by  a  body  other  than  the  audit  authority,  the  audit 
authority shall ensure that any such body has the necessary functional independence. 

The  audit  authority  shall  ensure  that  audit  work  takes  account  of  internationally 
accepted audit standards. 

The  audit  authority  shall,  within  six  months  of  adoption  of  the  operational 
programme, prepare  an  audit strategy for performance  of audits.  The audit  strategy 
shall  set  out  the  audit  methodology,  the  sampling  method  for  audits  on  operations 
and  the  planning  of  audits  in  relation  to  the  current  accounting  year  and  the  two 
subsequent accounting years. The audit strategy shall be updated annually from 2016 
until  and  including  2022.  The  audit  authority  shall  submit  the  audit  strategy  to  the 
Commission upon request. 

5. 

The audit authority shall draw up the following: 

(r) 

an audit opinion in accordance with Article 56 (5) of the Financial Regulation; 

(s) 

an annual control report setting out the findings of the audits carried out during 
the preceding accounting year. 

The  report  under  point  (b)  shall  set  out  any  deficiencies  found  in  the  management 
and control system and any corrective measures taken or proposed to be taken. 

EN 

32 

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6. 

7. 

1. 

2. 

3. 

4. 

5. 

The  Commission  shall  adopt,  by  means  of  implementing  acts,  models  for  the  audit 
strategy, the audit opinion and the annual control report, as well as the methodology 
for the sampling method referred to in paragraph 4. Those implementing acts shall be 
adopted in accordance with the examination procedure referred to in Article 60(3). 

Implementing rules concerning the use of data collected during audits carried out by 
Commission officials or authorised Commission representatives shall be adopted by 
the Commission in accordance with the examination procedure referred to in Article 
60(3). 

Article 32 

Procedure for designation of the managing and the certifying authorities 

Member states shall notify to the Commission the date and form of the designation of 
the  managing  authority  and,  where  appropriate  the  certifying  authority,  within  six 
months of the adoption of decision adopting the operational programme. 

The designation referred to in paragraph 1 shall be based on a report and an opinion 
of  an  independent  audit  body  that  assesses  the  management  and  control  system, 
including the role of intermediate bodies therein, and its compliance with Articles 26, 
27, 29 and 30, in accordance with criteria on internal environment, control activities, 
information and communication, and monitoring established by the Commission by 
means of delegated act in accordance with Article 59. 

The  independent  body  shall  carry  out  its  work  in  accordance  with  internationally 
accepted audit standards.  

Member States may decide that a managing authority or a certifying authority which 
has  been  designated  in  relation  to  an  ESF  co-financed  operational  programme 
pursuant to Regulation (EU) No [CPR] is deemed to be designated for the purposes 
of this Regulation. 

The  Commission  may  request,  within  two  months  of  receipt  of  the  notification 
referred to in paragraph 1, the report and the opinion of the independent audit body 
and the description of the management and control system. 

The  Commission  may  make  observations  within  two  months  of  receipt  of  those 
documents. 

The Member State shall supervise the designated body and withdraw its designation 
by  formal  decision  if  one  or  more  of  the  criteria  referred  to  in  paragraph  2  are  no 
longer met, unless the body takes the necessary remedial actions within a period of 
probation  to  be  determined  by  the  Member  State  according  to  the  severity  of  the 
problem. The Member State shall notify the Commission immediately of the setting 
of any probation period for a designated body and of any withdrawal decision. 

EN 

33 

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Article 33 

Commission powers and responsibilities 

The Commission shall satisfy itself on the basis of available information, including 
the  information  on  the  designation  of  the  managing  authority  and  the  certifying 
authority,  annual  management  declaration,  annual  control  reports,  annual  audit 
opinion, annual implementation report and audits carried out by national and Union 
bodies,  that  the  Member  States  have  set  up  management  and  control  systems  that 
comply  with  this  Regulation  and  that  these  systems  function  effectively  during  the 
implementation of operational programme. 

Without prejudice to audits carried out by Member States, Commission  officials or 
authorised  Commission  representatives  may  carry  out  on-the-spot  audits  or  checks 
upon giving adequate prior notice. The scope of such audits or checks may include, 
in  particular,  verification  of  the  effective  functioning  of  management  and  control 
systems in an operational programme or a part thereof, operations and assessment of 
the sound financial management of operations or operational programme. Officials or 
authorised representatives of the Member State may take part in such audits. 

Commission officials or authorised Commission representatives, duly empowered to 
carry  out  on-the-spot  audits,  shall  have  access  to  all  records,  documents  and 
metadata, irrespective of the medium in which they are stored, relating to operations 
supported by the Fund or to management and control systems. Member States shall 
provide  copies  of  such  records,  documents  and  metadata  to  the  Commission  upon 
request. 

The  powers  set  out  in  this  paragraph  shall  not  affect  the  application  of  national 
provisions  which  reserve  certain  acts  for  agents  specifically  designated  by  national 
legislation.  Commission  officials  and  authorised  representatives  shall  not  take  part, 
inter alia, in home visits or the formal questioning of persons within the framework 
of  national  legislation.  However,  they  shall  have  access  to  the  information  thus 
obtained. 

The Commission may require a Member State to take the actions necessary to ensure 
the effective functioning of their management and control systems or the correctness 
of expenditure in accordance with this Regulation. 

The Commission may require a Member State to examine a complaint submitted to 
the  Commission  concerning  the  implementation  of  operations  co-financed  by  the 
Fund or the functioning of the management and control system. 

Article 34 

Cooperation with audit authority 

The Commission shall cooperate with audit authorities to coordinate their audit plans 
and  methods  and  shall  immediately  exchange  the  results  of  audits  carried  out  on 
management and control systems. 

1. 

2. 

3. 

4. 

1. 

EN 

34 

   EN 

 
2. 

The  Commission  and  the  audit  authority  shall  meet  on  a  regular  basis  and  at  least 
once  a  year,  unless  otherwise  agreed,  to  examine  the  annual  control  report,  the 
opinion  and  the  audit  strategy,  and  to  exchange  views  on  issues  relating  to 
improvement of the management and control systems. 

TITLE VI FINANCIAL MANAGEMENT, EXAMINATION AND ACCEPTANCE OF 
ACCOUNTS, FINANCIAL CORRECTIONS, DECOMMITMENTS 

Chapter 1. Financial management 

Article 35 

Budget commitments 

The  budget  commitments  of  the  Union  in  respect  of  each  operational  programme  shall  be 
made  in  annual  instalments  during  the  period  between  1  January  2014  and  31  December 
2020.  The  decision  of  the  Commission  adopting  the  operational  programme  shall  constitute 
the  financing  decision  within  the  meaning  of  Article  81(2)  of  the  Financial  Regulation  and 
once notified to the Member State concerned, a legal commitment within the meaning of that 
Regulation. 

The budget commitment for the first instalment shall  follow  the adoption of the  operational 
programme by the Commission. 

The budget commitments for subsequent instalments shall be made by the Commission before 
1 May of each year, on the basis of the decision referred to in the second subparagraph, except 
where Article 13 of the Financial Regulation applies. 

Article 36 

Payments by the Commission 

1. 

2. 

Payments by the Commission of the contribution from the Fund to each operational 
programme  shall  be  made  in  accordance  with  budget  appropriations  and  subject  to 
available  funding.  Each  payment  shall  be  posted  to  the  earliest  open  budget 
commitment of the Fund. 

Payments shall take the form of pre-financing, interim payments and payment of the 
annual balance, where applicable, and of the final balance. 

Interim payments, payment of the annual balance and payment of the final balance by 
the Commission 

Article 37 

EN 

35 

   EN 

 
1. 

2. 

3. 

4. 

1. 

2. 

3. 

4. 

The Commission shall reimburse as interim payments 90% of the amount resulting 
from  applying  the  co-financing  rate  laid  down  in  the  decision  adopting  the 
operational programme corresponding to the public eligible expenditure included in 
the  payment  application.  It  shall  determine  the  annual  balance  in  accordance  with 
Article 47(2). 

Notwithstanding Article 19, the Union support through the interim payments and the 
payment  of  the  final  balance  shall  not  be  higher  than  the  maximum  amount  of 
support from the Fund as laid down in the decision of the Commission approving the 
operational programme.  

The cumulative total of pre-financing and interim payments and the annual balance 
by the Commission shall not exceed 95 % of the contribution from the Fund to the 
operational programme. 

When the ceiling of 95 % is reached, the Member States shall continue transmitting 
requests for payment to the Commission. 

Article 38 

Payment applications to the Commission 

The  payment  application  to  be  submitted  to  the  Commission  shall  provide  all  the 
information  necessary  for  the  Commission  to  produce  accounts  in  accordance  with 
Article 65(1) of the Financial Regulation. 

Payment applications shall include for the  operational programme as a whole and for 
technical assistance referred to in article 25.2: 

(t) 

(u) 

(v) 

the total amount of eligible expenditure incurred and paid by beneficiaries for 
implementing  the  operations,  as  entered  into  the  accounts  of  the  certifying 
authority;  

the  total  amount  of  public  eligible  expenditure  incurred  in  implementing 
operations as entered into the accounts of the certifying authority; 

the  corresponding  public  eligible  contribution  which  has  been  paid  to  the 
beneficiaries, as entered in the accounts of the certifying authority. 

Expenditure  included  in  a  payment  application  shall  be  supported  by  receipted 
invoices  or  accounting  documents  of  equivalent  probative  value.  For  the  forms  of 
grants  referred  to  in  Article  23(1)(b)  and  (c)  and  (d),  the  amounts  included  in  a 
payment application shall be the amounts paid to the beneficiaries by the managing 
authority.  

The  Commission  shall  adopt,  by  means  of  implementing  acts,  the  template  for 
payment applications. Those implementing acts shall be adopted in accordance with 
the advisory procedure referred to in Article 60(2). 

EN 

36 

   EN 

 
Article 39 

Payments to beneficiaries  

1. 

2. 

1. 

2. 

3. 

1. 

2. 

3. 

Managing authority shall ensure that, in the case of grants to partner organisations, 
beneficiaries are provided with a flow sufficient to ensure proper implementation of 
the operations.  

Managing  authority  shall  ensure  that  the  beneficiaries  receive  the  total  amount  of 
public support as quickly as possible and in full and in any event before the inclusion 
of  the  corresponding  expenditure  in  the  payment  application.  No  amount  shall  be 
deducted  or  withheld  and  no  specific  charge  or  other  charge  with  equivalent  effect 
shall be levied that would reduce these amounts for the beneficiaries.  

Article 40 

Use of the Euro 

Amounts set out in operational programme submitted by Member States, statements 
of expenditure, requests for payment, annual accounts and expenditure mentioned in 
the annual and final implementation reports shall be denominated in euro. 

Member States which have not adopted the euro as their currency on the date of an 
application for payment shall convert the amounts of expenditure incurred in national 
currency  into  euro.  This  amount  shall  be  converted  into  euro  using  the  monthly 
accounting  exchange  rate  of  the  Commission  in  the  month  during  which  the 
expenditure was registered in the accounts of the managing authority. This rate shall 
be published electronically by the Commission each month. 

When the euro becomes the currency of a Member State, the conversion procedure 
set  out  in  paragraph  1  shall  continue  to  apply  to  all  expenditure  recorded  in  the 
accounts  by  the  managing  authority  before  the date  of  entry  into  force  of  the  fixed 
conversion rate between the national currency and the euro. 

Article 41 

Payment and clearance of pre-financing 

Following  the  Commission  decision  adopting  the  operational  programme,  a  pre-
financing  amounting  11%  of  the  Fund  overall  contribution  to  the  operational 
programme concerned shall be paid by the Commission.  

Pre-financing  shall  be  used  only  for  making  payments  to  beneficiaries  in  the 
implementation  of  the  operational  programme.  It  shall  be  made  available  without 
delay to the responsible body for this purpose. 

The total amount paid as pre-financing shall be reimbursed to the Commission if no 
payment  application  for  the  operational  programme  concerned  is  sent  within  24 
months  of  the  date  on  which  the  Commission  pays  the  first  pre-financing  amount. 

EN 

37 

   EN 

 
The  Community  contribution  to  the  operational  programme  concerned  shall  not  be 
affected by such reimbursement. 

4. 

The  amount  paid  as  pre-financing  shall  be  totally  cleared  from  the  Commission 
accounts at the latest when the operational programme is closed.  

Time limit for presentation of interim payment applications and for their payment 

Article 42 

1. 

2. 

3. 

4. 

5. 

1. 

The  certifying  authority  shall  submit  on  a  regular  basis  an  application  for  interim 
payment  covering  amounts  entered  in  its  accounts  as  public  support  paid  to 
beneficiaries in the accounting year ending 30 June. 

The certifying authority shall submit the final application for interim payment by 31 
July following the end of the previous accounting year and, in any event, before the 
first application for interim payment for the next accounting year. 

The first application for interim payment shall not be made before the notification to 
the  Commission  of  the  designation  of  the  managing  authority  and  the  certifying 
authority in accordance to Article 32(1). 

Interim payments shall not be made for an operational programme where the annual 
implementation  report  has  not  been  sent  to  the  Commission  in  accordance  with 
Article 11. 

Subject  to  available  funding,  the  Commission  shall  make  the  interim  payment  no 
later than 60 days after the date on which a payment application is registered with the 
Commission. 

Article 43 

Interruption of the time limit payment  

The time limit for the payment of an interim payment claim may be interrupted by 
the authorising officer by delegation within the meaning of the Financial Regulation 
for a maximum period of nine months when the following conditions are met: 

(w)  on  the  basis  of  the  information  provided  by  a  national  or  Union  audit  body, 
there  is  evidence  to  suggest  a  significant  deficiency  in  the  functioning  of  the 
management and control system; 

(x) 

the  authorising  officer  by  delegation  has  to  carry  out  additional  verifications 
following information coming to his attention alerting him that expenditure in a 
request  for  payment  is  linked  to  an  irregularity  having  serious  financial 
consequences; 

(y) 

there is a failure to submit one of the documents required under Article 45(1). 

EN 

38 

   EN 

 
2. 

The  authorising  officer  by  delegation  may  limit  the  interruption  to  the  part  of  the 
expenditure  covered  by  the  payment  claim  affected  by  the  elements  referred  to  in 
paragraph  1.  The  authorising  officer  by  delegation  shall  inform  the  Member  State 
and the managing authority immediately of the reason for interruption and shall ask 
them  to  remedy  the  situation.  The  interruption  shall  be  ended  by  the  authorising 
officer by delegation as soon as the necessary measures have been taken. 

Article 44 

Suspension of payments 

1. 

All or part of the interim payments may be suspended by the Commission where: 

(z) 

there  is  a  serious  deficiency  in  the  management  and  control  system  of  the 
operational programme for which corrective measures have not been taken; 

(aa)  expenditure  in  a  statement  of  expenditure  is  linked  to  an  irregularity  having 

serious financial consequences which has not been corrected; 

(bb)  the  Member  State  has  failed  to  take  the  necessary  action  to  remedy  the 

situation giving rise to an interruption under Article 43; 

(cc)  there  is  a  serious  deficiency  in  the  quality  and  reliability  of  the  monitoring 

system or of the data on indicators. 

The Commission may decide, by means of implementing acts, to suspend all or part 
of interim payments, after having given the Member State the opportunity to present 
its observations. 

The Commission shall end suspension of all or part of interim payments where the 
Member State has taken the necessary measures to enable the suspension to be lifted. 

Chapter 2 Examination and acceptance of accounts 

Article 45 

Submission of information 

For  each  year  from  2015  until  and  including  2022,  by  15  February  of  the  year 
following the end of the accounting period, the designated bodies shall submit to the 
Commission the following documents and information in accordance with Article 56 
of the Financial Regulation: 

(dd)  the  certified  annual  accounts  of  the  relevant  bodies  designated  pursuant  to 

Article 32 as referred to in Article 56(5) of the Financial Regulation; 

(ee)  the  management  declaration  as  referred  to  in  Article  56(5)  of  the  Financial 

Regulation; 

2. 

3. 

1. 

EN 

39 

   EN 

 
(ff)  an  annual  summary  of  the  final  audit  reports  and  of  controls  carried  out, 
including an analysis of the nature and extent of errors and of weaknesses, as 
well as corrective actions taken or planned; 

(gg)  an  audit  opinion  by  the  designated  independent  audit  body  as  referred  in 
Article  56(5)  of  the  Financial  Regulation,  accompanied  by  a  control  report 
setting out the findings of the audits carried out relating to the accounting year 
covered by the opinion. 

2. 

Upon  request  by  the  Commission,  the  Member  State  shall  provide  further 
information  to  the  Commission.  If  a  Member  State  does  not  provide  the  requested 
information  by  the  deadline  for  its  submission  set  by  the  Commission,  the 
Commission may take its decision on the acceptance of the accounts on the basis of 
the information in its possession. 

Article 46 

Content of accounts 

1. 

The  certified  accounts 
the 
accounting  year  and  shall  include  the  following  as  a  whole  and  for  technical 
assistance expenditure referred to in article 25.2: 

for  each  operational  programme  shall  cover 

(hh)  the  total  amount  of  eligible  expenditure  entered  into  the  accounts  of  the 
certifying  authority  as  having  been  incurred  and  paid  by  beneficiaries  in 
implementing  operations,  the  total  amount  of  public  eligible  expenditure 
incurred  in  implementing  operations  and  the  corresponding  eligible  public 
contribution which has been paid to beneficiaries;  

(ii) 

the amounts withdrawn and recovered during the accounting year, the amounts 
to  be  recovered  as  at  the  end  of  the  accounting  year  and  the  irrecoverable 
amounts; 

(jj)  a  reconciliation  between  the  expenditure  stated  pursuant  to  point  (a)  and  the 
expenditure  declared  in  respect  of  the  same  accounting  year  in  payment 
applications, accompanied by an explanation of any differences. 

2. 

in 

certifying 

authority  may 

a  provision, 
specify 
The 
which  shall  not  exceed  5  %  of  the  total  expenditure  in  payment  applications 
presented  for  a  given  accounting  year,  where  the  assessment  of  the  legality  and 
regularity  of  the  expenditure  is  subject  to  an  on-going  procedure  with  the  audit 
authority.  The  amount  covered  shall  be  excluded  from  the  total  amount  of  eligible 
expenditure  referred  to  in  paragraph  1(a).  These  amounts  shall  be  definitively 
included in, or excluded from, the annual accounts of the following year. 

accounts 

the 

Article 47 

Examination and acceptance of accounts 

EN 

40 

   EN 

 
1. 

2. 

3. 

4. 

5. 

1. 

2. 

By 30 April of the year following the end of the accounting period, the Commission 
shall  decide  on  the  acceptance  of  the  accounts  of  the  relevant  bodies  designated 
pursuant to Article 28 for the operational programme. The acceptance decision shall 
cover the completeness, accuracy and veracity of the accounts submitted and shall be 
without prejudice to any subsequent financial corrections. 

For the purposes of calculating the amount chargeable to the Fund for an accounting 
year, the Commission shall take into account: 

(kk)  the  public  eligible  expenditure  incurred  in  implementing  operations  entered 
into the accounts referred to in Article 46(1)(a), to which shall be applied the 
co-financing rate defined in Article 18;  

(ll) 

the total amount of payments made by the Commission during that accounting 
year, consisting of the amount of interim payments paid by the Commission in 
accordance with Article 37(1) and Article 19. 

The annual balance which, as a result of the acceptance of accounts, is recoverable 
from the Member State shall be subject to a recovery order of the Commission. The 
annual  balance  payable  to  the  Member  State  shall  be  added  to  the  next  interim 
payment  made  by  the  Commission  following  the  examination  and  acceptance  of 
accounts. 

If, for reasons attributable to a Member State, the Commission is not in a position to 
accept the accounts by 30 April of the year following the end of an accounting year, 
the Commission shall notify the Member State of the actions that must be undertaken 
by  the  managing  authority  or  audit  authority,  or  of  the  additional  enquiries  the 
Commission proposes to undertake pursuant to Article 33(2) and (3). 

Payment of the annual balance by the Commission shall be based on the expenditure 
declared  in  the  accounts,  net  of  any  provision  made  in  respect  of  expenditure 
declared  to  the  Commission  which  is  subject  to  a  contradictory  procedure  with  the 
audit authority. 

Article 48 

Availability of documents 

The managing authority shall ensure that all supporting documents on operations are 
made available to the Commission and the European Court of Auditors upon request 
for a period of three years. This three year period shall run from 31 December of the 
year  of  the  decision  on  acceptance  of  accounts  by  the  Commission  pursuant  to 
Article 47 or, at the latest, from the date of payment of the final balance. 

This three year period shall be interrupted either in the case of legal or administrative 
proceedings or by a duly justified request of the Commission. 

The  documents  shall  be  kept  either  in  the  form  of  the  originals,  or  certified  true 
copies  of  the  originals,  or  on  commonly  accepted  data  carriers  including  electronic 
versions of original documents or documents existing in electronic version only. 

EN 

41 

   EN 

 
3. 

4. 

5. 

6. 

The documents shall be kept in a form which permits identification of data subjects 
for no longer than is necessary for the purposes for which the data were collected or 
for which they are further processed. 

The  Commission  shall  be  empowered  to  adopt  delegated  acts  in  accordance  with 
Article 59 to set out which data carriers can be considered as commonly accepted. 

The  procedure  for  certification  of  conformity  of  documents  held  on  commonly 
accepted data carriers with the original document shall be laid down by the national 
authorities  and  shall  ensure  that  the  versions  held  comply  with  national  legal 
requirements and can be relied on for audit purposes. 

Where documents exist in electronic version only, the computer systems used must 
meet  accepted  security  standards  that  ensure  that  the  documents  held  comply  with 
national legal requirements and can be relied on for audit purposes. 

Article 49 

Submission of closure documents and payment of the final balance 

1. 

Member States shall submit the following documents by 30 September 2023: 

(mm) an application for payment of the final balance; 

(nn)  a final implementation report for the operational programme; and 

(oo)  the documents referred to in Article 45(1) for the final accounting year, from 1 

July 2022 to 30 June 2023. 

2. 

The final balance shall be paid no later than three months after the date of acceptance 
of accounts of the final accounting year or one month after the date of acceptance of 
the final implementation report, whichever date is later.  

Chapter 3 Financial corrections and recoveries 

Article 50 

Financial corrections by Member States 

1. 

2. 

The  Member  States  shall  in  the  first  instance  be  responsible  for  investigating 
irregularities  and  for  making  the  financial  corrections  required  and  pursuing 
recoveries. In the case of a systemic irregularity, the Member State shall extend its 
investigation to cover all operations potentially affected. 

The Member State shall make the financial corrections required in connection with 
individual  or  systemic  irregularities  detected  in  operations  or  the  operational 
programme. Financial corrections shall consist of cancelling all or part of the public 
contribution to an operation or the operational programme. The Member State shall 
take into account the nature and gravity of the irregularities and the financial loss to 

EN 

42 

   EN 

 
3. 

4. 

5. 

1. 

the  Fund  and  shall  apply  a  proportionate  correction.  Financial  corrections  shall  be 
recorded in the annual accounts by the managing authority for the accounting year in 
which the cancellation is decided 

The  contribution  from  the  Fund  cancelled  in  accordance  with  paragraph  2  may  be 
reused by the Member State within the operational programme concerned, subject to 
paragraph 4. 

The contribution cancelled in accordance with paragraph 2 may not be reused for any 
operation  that  was  the  subject  of  the  correction  or,  where  a  financial  correction  is 
made  for  a  systemic  irregularity,  for  any  operation  affected  by  the  systemic 
irregularity. 

A  financial  correction  by  the  Commission  shall  not  prejudice  the  Member  State's 
obligation to pursue recoveries under the present Article.  

Article 51 

Financial corrections by the Commission 

The Commission shall make financial corrections, by means of implementing act, by 
cancelling  all  or  part  of  the  Union  contribution  to  an  operational  programme  and 
effecting recovery from the Member State in order to exclude from Union financing 
expenditure  which  is  in  breach  of  applicable  Union  and  national  law,  including  in 
relation  to  deficiencies  in  the  management  and  control  systems  of  Member  States 
which have been detected by the Commission or the European Court of Auditors. 

2. 

A breach of applicable Union or national law shall lead to a financial correction only 
when one of the following conditions is met: 

(pp)  the  breach  has  or  could  have  affected  the  selection  of  an  operation  by  the 

managing authority for support by the Fund; 

(qq)  the breach has or could have affected the amount of expenditure declared for 

reimbursement by the Union budget. 

Article 52 

Criteria for financial correction by the Commission 

1. 

The  Commission  shall  make  financial  corrections  after  carrying  out  the  necessary 
examination, it concludes that: 

(rr) 

there  is  a  serious  deficiency  in  the  management  and  control  system  of  the 
operational  programme  which  has  put  at  risk  the  Union  contribution  already 
paid to the operational programme; 

(ss) 

the Member State has not complied with its obligations under Article 50 prior 
to the opening of the correction procedure under this paragraph; 

EN 

43 

   EN 

 
(tt)  expenditure  contained  in  a  payment  application  is  irregular  and  has  not  been 
corrected by the Member State prior to the opening of the correction procedure 
under this paragraph. 

The  Commission  shall  base  its  financial  corrections  on  individual  cases  of 
irregularity identified  and  shall  take  account  of  whether  an  irregularity  is  systemic. 
When  it  is  not  possible  to  quantify  precisely  the  amount  of  irregular  expenditure 
charged to the Fund, the Commission shall apply a flat rate or extrapolated financial 
correction. 

The Commission shall, when deciding the amount of a correction under paragraph 1, 
take account of the nature and gravity of the irregularity and the extent and financial 
implications  of  the  deficiencies  in  management  and  control  systems  found  in  the 
operational programme. 

Where the Commission bases its position on reports of auditors other than those of 
its  own  services,  it  shall  draw  its  own  conclusions  regarding  the  financial 
consequences  after  examining  the  measures  taken  by  the  Member  State  concerned 
under Article 50(2), the notifications sent under Article 27(2), and any replies from 
the Member State. 

The  Commission  shall  be  empowered  to  adopt  delegated  acts  in  accordance  with 
Article 59 establishing the criteria for establishing the level of financial correction to 
be applied. 

Article 53 

Procedure for financial corrections by the Commission 

Before taking a decision on a financial correction, the Commission shall launch the 
procedure  by  informing  the  Member  State  of  the  provisional  conclusions  of  its 
examination  and  requesting  the  Member  State  to  submit  its  comments  within  two 
months. 

Where the Commission proposes a financial correction on the basis of extrapolation 
or  a  flat  rate,  the  Member  State  shall  be  given  the  opportunity  to  demonstrate, 
through  an  examination  of  the  documentation  concerned,  that  the  actual  extent  of 
irregularity  is  less  than  the  Commission's  assessment.  In  agreement  with  the 
Commission,  the  Member  State  may  limit  the  scope  of  this  examination  to  an 
appropriate  proportion  or  sample  of  the  documentation  concerned.  Except  in  duly 
justified  cases,  the  time  allowed  for  this  examination  shall  not  exceed  a  further 
period of two months after the two-month period referred to in paragraph 1. 

The Commission shall take account of any evidence supplied by the Member State 
within the time limits set out in paragraphs 1 and 2. 

Where  the  Member  State  does  not  accept  the  provisional  conclusions  of  the 
Commission, the Member State shall be invited to a hearing by the Commission, in 
order to ensure that all relevant information and observations are available as a basis 
for conclusions by the Commission on the application of the financial correction. 

2. 

3. 

4. 

1. 

2. 

3. 

4. 

EN 

44 

   EN 

 
5. 

6. 

1. 

2. 

1. 

2. 

3. 

In  order  to  apply  financial  corrections  the  Commission  shall  take  a  decision,  by 
means of implementing acts, within six months of the date of the hearing, or of the 
date  of  receipt  of  additional  information  where  the  Member  State  agrees  to  submit 
such  additional  information  following  the  hearing.  The  Commission  shall  take 
account  of  all  information  and  observations  submitted  during  the  course  of  the 
procedure.  If  no  hearing  takes  place,  the  six  month  period  shall  begin  to  run  two 
months  after  the  date  of  the  letter  of  invitation  to  the  hearing  sent  by  the 
Commission. 

Where  irregularities  affecting  annual  accounts  sent  to  the  Commission  are  detected 
by  the  Commission  or  by  the  European  Court  of  Auditors,  the  resulting  financial 
correction shall reduce support from the Fund to the operational programme. 

Article 54 

Repayments to the Union Budget - Recoveries 

Any repayment due to be made to the general budget of the Union shall be effected 
before the due date indicated in the order for recovery drawn up in accordance with 
Article  77  of  the  Financial  Regulation.  The  due  date  shall  be  the  last  day  of  the 
second month following the issuing of the order. 

Any  delay  in  effecting  repayment  shall  give  rise  to  interest  on  account  of  late 
payment, starting on the due date and ending on the date of actual payment. The rate 
of such interest shall be one-and-a-half percentage points above the rate applied by 
the  European  Central  Bank  in  its  main  refinancing  operations  on  the  first  working 
day of the month in which the due date falls. 

Article 55 

Proportional control of operational programmes 

Operations  for  which  the  total  eligible  expenditure  does  not  exceed  EUR  100  000 
shall  not  be  subject  to  more  than  one  audit  by  either  the  audit  authority  or  the 
Commission prior to the examination of all the expenditure concerned under Article 
47. Other operations shall not be subject to more than one audit per accounting year 
by  the  audit  authority  and  the  Commission  prior  to  the  examination  of  all  the 
expenditure  concerned  under  Article  47.  Those  provisions  are  without  prejudice  to 
paragraphs 5 and 6. 

Audit of an operation may cover all stages of its implementation and all levels of the 
distribution chain, with the exception of control of the actual end recipients, unless a 
risk assessment establishes a specific risk of irregularity or fraud.  

When  the  most  recent  audit  opinion  on  the  operational  programme  indicates  that 
there  are  no  significant  deficiencies,  the  Commission  may  agree  with  the  audit 
authority in the subsequent meeting referred to in Article 34(2) that the level of audit 
work  required  may  be  reduced  so  that  it  is  proportionate  to  the  risk  established.  In 
such cases, the Commission will not carry out its own on-the-spot audits unless there 

EN 

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4. 

5. 

6. 

1. 

2. 

3. 

is evidence suggesting deficiencies in the management and control system affecting 
expenditure  declared  to  the  Commission  in  an  accounting  year  for  which  the 
accounts have been accepted. 

If the Commission concludes that it can rely on the opinion of the audit authority for 
the operational programme, it may agree with the audit authority to limit its own on 
the  spot  audits  to  audit  the  work  of  the  audit  authority  unless  there  is  evidence  of 
deficiencies in the work of the audit authority work for an accounting year for which 
the accounts have been accepted. 

The  audit  authority  and  the  Commission  may  carry  out  audits  of  operations  at  any 
time  where  a  risk  assessment  establishes  a  specific  risk  of  irregularity  or  fraud,  in 
case of evidence of serious deficiencies in the management and control system of the 
operational  programme,  and,  during  the  3  years  following  acceptance  of  all  the 
expenditure of an operation under Article 47, as part of an audit sample.  

The Commission may at any time carry out audits  of  operations for the purpose of 
assessing the work of an audit authority by re-performance of its audit activity. 

Chapter 4 Decommitment 

Article 56 

Rules on decommitment 

The  Commission  shall  decommit  any  part  of  the  amount  calculated  in  accordance 
with the second subparagraph in an operational programme that has not been used for 
payment of the pre-financing, interim payments and annual balance by 31 December 
of  the  second  financial  year  following  the  year  of  budget  commitment  under  the 
operational programme or for which a payment application drawn up in accordance 
with Article 38 has not been sent in accordance with Article 42. 

For the purposes of the  decommitment, the Commission shall calculate the amount 
by  adding  one  sixth  of  the  annual  budget  commitment  related  to  the  2014  total 
annual contribution to each of the 2015 to 2020 budget commitments. 

By way of derogation from the first subparagraph of paragraph 1, the deadlines for 
decommitment shall not apply to the annual budget commitment related to the 2014 
total annual contribution. 

If the first annual budget commitment is related to the 2015 total annual contribution, 
by  way  of  derogation  from  paragraph  1,  the  deadlines  for  decommitment  shall  not 
apply  to  the  annual  budget  commitment  related  to  the  total  annual  contribution  of 
2015. In such cases, the Commission shall calculate the amount under the first sub-
paragraph  of  paragraph  1  by  adding  one  fifth  of  the  annual  budget  commitment 
related  to  the  2015  total  amount  contribution  to  each  of  the  2016  to  2020  budget 
commitments. 

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4. 

That part of commitments still open on 31 December 2022 shall be decommitted if 
any  of  the  documents  required  under  Article  47(2)  has  not  been  submitted  to  the 
Commission by 30 September 2023. 

Article 57 

Exception to the decommitment 

1. 

The  amount  concerned  by  decommitment  shall  be  reduced  by  the  amounts  that  the 
responsible body has not been able to declare to the Commission because of: 

(uu)  operations  suspended  by  a  legal  proceeding  or  by  an  administrative  appeal 

having suspensory effect; or 

(vv)  reasons of force majeure seriously affecting implementation of all or part of the 
operational  programme.  The  national  authorities  claiming  force  majeure  shall 
demonstrate 
the 
the  direct  consequences  of 
implementation of all or part of the operational programme; 

force  majeure  on 

the 

(ww) The reduction may be requested once if the suspension or force majeure lasted 
up  to  one  year,  or  several  times  corresponding  to  the  duration  of  the  force 
majeure or the number of years between the date of the legal or administrative 
decision  suspending  the  implementation  of  the  operation  and  the  date  of  the 
final legal or administrative decision. 

By 31 January, the Member State shall send to the Commission information on the 
exceptions referred to in paragraph 1 for the amount to be declared by the end of the 
preceding year. 

Article 58 

Procedure for decommitments 

The Commission shall inform the Member State and the managing authority in good 
time whenever there is a risk of application of decommitment under Article 56. 

On the  basis of  the information it has on 31 January, the Commission shall inform 
the  Member  State  and  the  managing  authority  of  the  amount  of  the  decommitment 
resulting from the information in its possession. 

The Member State shall have two months to agree to the amount to be decommitted 
or to submit its observations. 

By  30  June,  the  Member  State  shall  submit  to  the  Commission  a  revised  financing 
plan reflecting for the financial year concerned the reduced amount of support of the 
operational  programme.  Failing  such  submission,  the  Commission  shall  revise  the 
financing  plan  by  reducing  the  contribution  from  the  Fund  for  the  financial  year 
concerned.  

2. 

1. 

2. 

3. 

4. 

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5. 

The Commission shall amend the decision adopting the operational programme, by 
means of implementing act, no later than 30 September. 

Title VII. DELEGATION OF POWERS, IMPLEMENTING AND FINAL 
PROVISIONS 

Article 59 

Exercise of the delegation 

The  power  to  adopt  delegated  acts  is  conferred  on  the  Commission  subject  to  the 
conditions laid down in this Article.  

The  delegations  of  power  referred  to  in  this  Regulation  shall  be  conferred  for  an 
indeterminate period of time from the date of entry into force of this Regulation. 

As soon as it adopts a delegated act, the Commission shall notify it simultaneously to 
the European Parliament and to the Council. 

The  delegated  acts  shall  enter  into  force  only  if  no  objection  has  been  expressed 
either  by  the  European  Parliament  or  the  Council  within  a  period  of  2  months  of 
notification of that act to the European Parliament and the Council or if, before the 
expiry of that period, the European Parliament and the Council have both informed 
the Commission that they will not object. That period shall be extended by 2 months 
at the initiative of the European Parliament or the Council.  

If,  on  expiry  of  that  period,  neither  the  European  Parliament  nor  the  Council  has 
objected  to  the  delegated  act,  it  shall  be  published  in  the  Official  Journal  of  the 
European Union and shall enter into force at the date stated therein. 

The  delegated  act  may  be  published  in  the Official Journal of the European Union 
and enter into force before the expiry of that period if the European Parliament and 
the  Council  have  both  informed  the  Commission  of  their  intention  not  to  raise 
objections. 

If the European Parliament or the Council objects to a delegated act, the act shall not 
enter into force. The institution that objects to the delegated act shall state the reasons 
for its objections. 

Article 60 

Committee Procedure 

The Commission shall be assisted by a Committee within the meaning of Regulation 
(EU) No 182/2011. 

Where  reference  is  made  to  this  paragraph,  Article  4  of  Regulation  (EU)  No 
182/2011 shall apply. 

1. 

2. 

3. 

4. 

1. 

2. 

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3. 

Where  reference  is  made  to  this  paragraph,  Article  5  of  Regulation  (EU)  No 
182/2011 shall apply. 

Where the opinion of the committee under paragraphs 2 and 3 is to be obtained by 
written procedure, that procedure shall be terminated without result when, within the 
time-limit for delivery of the opinion, the chair of the committee so decides or (…) 
[number of members] (a … majority of) [majority to be specified: simple, two-thirds, 
etc.] committee members so request. 

Where the committee delivers no opinion, the Commission shall not adopt the draft 
implementing act and the third subparagraph of Article 5(4) of Regulation (EU) No 
182/2011 shall apply. 

Article 61 

Entry into force 

This Regulation shall enter into force on the twentieth day after publication following that of 
its publication in the Official Journal of the European Union. 

This Regulation shall be binding in its entirety and directly applicable in all Member States. 

Done at Brussels,  

For the European Parliament 
The President 

For the Council 
The President 

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CHAPTER 

Section 

Sub-section 

1 IDENTIFICATION 

Annex I Operational Programme Template 

DESCRIPTION / OBSERVATIONS 

SIZE 

(characters) 

The  purpose  of  this  section  is  only  to  identify  the 
programme  concerned.  This  section  should  clearly 
state the following:  

200 

Member State 

Name of the Operational Programme 

CCI 

PROGRAMME 

2 
FORMULATION 

2.1 Situation 

2.x.Material 
deprivation 
addressed X 

2.x.1 Description 

An  identification  and  a  justification  of  the  material 
deprivation(s) to be addressed  

Indication  of  the  type  of  material  deprivation(s) 
retained for the OP. 

One  section  (and  the  corresponding  sub-sections) 
should  be  provided  for  each 
type  of  material 
deprivation to be addressed.  

4000 

200 

Description  of  the  main  characteristics  and  objectives 
of  the  material  assistance  to  be  provided  and  the 
corresponding accompanying measures. 

4000 

2.x.2. 
Schemes 

National 

Description of the national schemes to be supported 

2000 

2.4 Others 

Any other information deemed necessary  

3 IMPLEMENTATION 

3.1. Identification of 
Most Deprived 

of 

of 

Selection 

3.2 
operations  

3.3.  Selection 
partner 
organisations 

3.4. 
Complementarity 
with ESF 

4000 

2000 

2000 

2000 

Description  of  the  mechanism  setting  the  eligible 
criteria of the most deprived persons, differentiated if 
necessary by type of material deprivation addressed. 

Criteria  for  the  selection  of  operations  and  the 
description  of  the  selection  mechanism,  differentiated 
if necessary by type of material deprivation addressed. 

Criteria  for  the  selection  of  partner  organisations, 
differentiated 
type  of  material 
deprivation addressed. 

if  necessary  by 

of 
Description 
complementarity with the ESF 

the  mechanism 

to 

ensure 

4000 

EN 

50 

   EN 

 
 
 
 
 
 
 
 
 
CHAPTER 

Section 

Sub-section 

Institutional 

3.4. 
set-up 

3.5.  Monitoring  and 
evaluation  

3.6. 
Assistance 

Technical 

DESCRIPTION / OBSERVATIONS 

implementing  provisions  of 

Description  of 
the 
operational programme containing the identification of 
the managing authority, the certifying authority where 
applicable,  the  audit  authority  and  the  body  to  which 
payments will be made by the Commission 

This  sub-section  should  describe  how  the  programme 
in 
implementation  will  be  monitored.  There 
particular,  a  need  to  explain  how  indicators  will  be 
used 
implementation.  The 
indicators shall include financial indicators relating to 
expenditures allocated and output indicators relating to 
the operations supported.  

track  programme 

is, 

to 

The  description  of  the  planned  use  of  technical 
assistance  pursuant  to  Article  X(2),  including  actions 
the 
to  reinforce 
beneficiaries 
financial 
management of operations 

the  administrative  capacity  of 
to 
in 

relation 

sound 

4. 
PLAN 

FINANCIAL 

This section should contain:  

a  table  specifying  for  each  year  in  accordance 
(1) 
financial 
with  Article  18 
appropriation envisaged for support from the Fund and 
the co-financing. 

the  amount  of 

the 

SIZE 

(characters) 

4000 

4000 

4000 

Text: 1000 

Data in CSV 
or XLS 
format 

a table specifying, for the whole programming 
(2) 
period, the amount of the total financial appropriation 
of  the  support  from  the  operational  programme  per 
type  of  material  deprivation  addressed  as  well  as  the 
corresponding accompanying measures. 

FORMAT FOR FINANCIAL DATA (SECTION 4): 

4.1 .1. Financing plan of the operational programme giving the annual commitment of the 
Fund and corresponding national co-financing in the operational programme (in EUR) 

Total 

2014 

2015 

…. 

2020 

Fund (a) 

National 
financing  

co-

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(b) 

Public  eligible 
expenditure 

(c) = (a) + (b) 

financing 

Co 
rate* 

(d) = (a) / (c) 

* This rate may be rounded to the nearest whole number in the table. The precise rate used to 
reimburse expenditure is the ratio (d). 

4.1.2. Financing plan giving the amount of the total financial appropriations of the support 
from the Operational programme per type of material deprivation addressed as well as the 
corresponding accompanying measures (in EUR) 

Intervention area 

Public eligible 
expenditure 

Total 

Technical 
Assistance 

Food deprivation 

of which, 
accompanying 
measures 

Homelessness 

of which, 
accompanying 
measures 

Child material 
deprivation 

of which, 
accompanying 
measures 

EN 

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ANNEX II 

Annual breakdown of commitment appropriation for 2014 to 20020 

EN 

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LEGISLATIVE FINANCIAL STATEMENT 

1. 

FRAMEWORK OF THE PROPOSAL/INITIATIVE  

1.1.  Title of the proposal/initiative  

1.2.  Policy area(s) concerned in the ABM/ABB structure 

1.3.  Nature of the proposal/initiative  

1.4.  Objective(s)  

1.5.  Grounds for the proposal/initiative  

1.6.  Duration and financial impact  

1.7.  Management method(s) envisaged  

2. 

MANAGEMENT MEASURES  

2.1.  Monitoring and reporting rules  

2.2.  Management and control system  

2.3.  Measures to prevent fraud and irregularities  

3. 

ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE  

3.1.  Heading(s)  of  the  multiannual  financial  framework  and  expenditure  budget 
line(s) affected  

3.2.  Estimated impact on expenditure  

3.2.1. Summary of estimated impact on expenditure  

3.2.2. Estimated impact on operational appropriations  

3.2.3. Estimated impact on appropriations of an administrative nature 

3.2.4. Compatibility with the current multiannual financial framework 

3.2.5. Third-party participation in financing  

3.3.  Estimated impact on revenue

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LEGISLATIVE FINANCIAL STATEMENT 

1. 

FRAMEWORK OF THE PROPOSAL/INITIATIVE  

1.1. 

Title of the proposal/initiative  

Proposal for a Regulation of the European Parliament and of the Council on the Fund 
for European Aid to the Most Deprived  

1.2. 

Policy area(s) concerned in the ABM/ABB structure10  

4 Employment and social affairs 

0406 Most Deprived People 

1.3. 

Nature of the proposal/initiative  

(cid:131) The proposal/initiative relates to a new action  

(cid:133)  The  proposal/initiative  relates  to  a  new  action  following  a  pilot  project/preparatory 
action11  

(cid:133) The proposal/initiative relates to the extension of an existing action  

(cid:133) The proposal/initiative relates to an action redirected towards a new action  

1.4. 

Objectives 

1.4.1.  The  Commission's  multiannual 

strategic  objective(s) 

targeted  by 

the 

proposal/initiative  

The Fund shall promote social cohesion in the Union by contributing to achieving the 
poverty reduction targets of the Europe 2020 strategy. .  

1.4.2. 

Specific objective(s) and ABM/ABB activity(ies) concerned  

Specific objective No.1 

Further  to  the  general  objective,  the  Programme  shall  contribute  to  achieving  the 
specific objective of alleviating the worst forms of poverty in the Union by providing 
assistance other than financial support to the most deprived persons.  

ABM/ABB activity(ies) concerned 

0406 Most Deprived People 

10 
11 

ABM: Activity-Based Management – ABB: Activity-Based Budgeting. 
As referred to in Article 51(2)(a) or (b) of the Financial Regulation. 

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55 

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1.4.3.  Expected result(s) and impact 

Specify the effects which the proposal/initiative should have on the beneficiaries/groups targeted. 

The  new  instrument  will  allow  Member  States  to  assist  approximately  two  million 
most  deprived  persons  more  per  year  with  positive  impacts  on  the  health  status  of 
these  people,  social  inclusion,  employment  and  labour  market.  However,  the  social 
impact  of  the  Fund  for  European  Aid  to  the  Most  Deprived  is  expected  to  go  far 
beyond.  

1. 
By  providing  a  platform  around  which  practitioners  will  be  able  to  exchange 
information and experiences it will bring significant benefits for many stakeholders 
in terms of processes.  

2. 
The  evidence-based  and  mid-  to  long-term  oriented  implementation  of  the 
Fund for European Aid to the Most Deprived by means of operational programmes 
will  also  encourage  a  dialogue  between  various  stakeholder  groups  and  support  a 
strategic approach in the future. Improvements of the delivery mechanisms (notably 
simplification  and  reductions  of  the  administrative  burden)  should  ensure  the 
continued  relevance  of  process  effects.  The  Fund  for  European  Aid  to  the  Most 
Deprived  will  be  an  instrument  to  facilitate  a  practical  dialogue  between  European 
priorities and social cohesion policies. 

1.4.4. 

Indicators of results and impact  

Specify the indicators for monitoring implementation of the proposal/initiative. 

The institutions actually distributing the material assistance rely to a large extent on 
volunteer work and donations. Therefore putting heavy reporting obligations on such 
organisations  should  be  avoided  as  much  as  possible.  Still  it  can  be  expected  that 
these  organisations  will  need  to  inform  not  only  the  Commission  about  their  work 
but  also  other  donors  and  the  volunteers  so  to  keep  up  their  motivation.  The 
indicators proposed were discussed with European level umbrella organisations and 
deemed adequate and realistic.  

The first set of indicators regard the volume of resources deployed being: 

(1) In kind contributions from the programme; 

(2)  Financial  resources  broken  down  according  to  their  origin  (EU  and  other 
sources). 

The second set of common indicators informs about the volume of aid delivered and 
regards  the  number  of  packages  distributed;  of  meals  prepared/distributed  and  the 
number of most deprived people assisted. 

These data will be transmitted to the Commission by the managing authorities in an 
annual implementation report. 

This  basic  annual  reporting  will  be  accompanied  by  structured  surveys.  These 
surveys  will  be  mandated  by  the  Commission  itself  at  least  twice  during  the 
implementation  period.  They  will  provide  insights  on  the  recipients,  i.e.  whether 

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there is dominance of a certain age group or minorities etc., assess the importance of 
in-kind  contributions  other  than  goods  for  instance  voluntary  labour  and  services, 
and  on  the  impacts  of  the  programme  on  them.  It  is  expected  that  this  information 
will only be provided on the basis of informed guesses, as in several cases anonymity 
might be a precondition for a client to be able to accept the support.  

1.5. 

Grounds for the proposal/initiative  

1.5.1.  Requirement(s) to be met in the short or long term  

The  envisaged  programme  would  contribute  to  the  social  cohesion  objective  of  the 
Union. The legal basis of the proposed new instrument is Article 175 third paragraph 
of  the  TFEU  which  makes  provisions  for  specific  actions  outside  the  Structural 
Funds.  

In 2010, nearly one quarter of all Europeans (116 million) were at risk of poverty or 
social  exclusion.  Poverty  and  social  exclusion  are  not  uniform  across  the  EU.  In 
general,  problems  are  more  acute  in  eastern  and  southern  Member  States.  Besides 
aggravating  the  pre-existing  levels  of  poverty  and  social  exclusion,  the  economic 
crisis  (associated  with  fiscal  consolidation  pressures  related  to  sovereign  debt 
dynamics)  has  also  reduced  the  ability  of  a  number  of  Member  States  to  sustain 
social expenditure and investment at levels sufficient to reverse this negative trend. 

1.5.2.  Added value of EU involvement 

The Europe 2020 strategy for smart, sustainable and inclusive growth is based on a 
balanced vision of economic growth and social progress based on ambitious targets 
for  employment,  education  and  for  poverty reduction.  Poverty  and  social  exclusion 
are major obstacles to the achievement of the Europe 2020 objectives.  

By  addressing  basic  needs,  the  proposed  instrument  will  help  to  moderate  poverty 
and  social  exclusion  of  people  who  find  themselves  in  situations  of  severe 
deprivation. By enabling the most deprived members of the society to maintain their 
dignity  and  human  capital  it  will  contribute  to  strengthening  of  social  capital  and 
social cohesion within their communities.  

EU-level action in this respect is necessary given the level and nature of poverty and 
social  exclusion  in  the  Union,  further  aggravated  by  the  economic  crisis,  and 
uncertainty  about  the  ability  of  all  Member  States  to  sustain  social  expenditure  at 
levels  sufficient  to  ensure  that  social  cohesion  does  not  deteriorate  further  and  that 
the objectives and targets of the Europe 2020 strategy are achieved.  

1.5.3.  Lessons learned from similar experiences in the past 

This  is  a  new  instrument.  Experience  from  the  programme  of  aid  for  the  most 
deprived  people  (MDP)  is  however  relevant.  With  the  expected  absence  of 
intervention stocks, the MDP has thus lost the rationale underpinning it and will be 
discontinued  with  the  completion  of  the  2013  annual  plan.  Yet  over  the  years,  the 
scheme had become an important source of provisions for organisations working in 
direct contact with the least fortunate people of our society providing them food. A 

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summary  of  the  lessons  learned  can  be  found  in  the  Impact  Assessment 
accompanying the proposal. 

1.5.4.  Coherence and possible synergy with other relevant instruments 

The proposed European Fund for Aid for the Most Deprived will be supported with 
EUR 2 500 000 000 from the Structural Funds under the Investment for Growth and 
Jobs  goal  with  global  resources  of  EUR  327  115  655  850.  The  Fund  for  European 
Aid to the Most Deprived shall be considered as part of the share of Structural Funds 
allocated  to  the  ESF.  It  will  complement  and  not  overlap  with  the  already  existing 
cohesion  policy  tools  by  offering  temporary  remedial  actions,  enabling  most 
deprived members of society to start on a recovery path.  

The proposed instrument can, in conjunction with other types of support that can be 
co-financed notably from the ESF, also help improve the employability of the end-
beneficiaries, enabling them to make a contribution to the economy.  

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1.6. 

Duration and financial impact  

(cid:131) Proposal/initiative of limited duration  

–  (cid:131)  Proposal/initiative in effect from 01/01/2014 to 31/12/2020  

–  (cid:131)  Financial impact from 2014 to 2022  

(cid:133) Proposal/initiative of unlimited duration 

–  Implementation with a start-up period from YYYY to YYYY, 

–  followed by full-scale operation. 

1.7.  Management mode(s) envisaged12  

(cid:133) Centralised direct management by the Commission  

(cid:133)  Centralised  indirect  management  with  the  delegation  of  implementation  tasks 
to: 

–  (cid:133)  executive agencies  

–  (cid:133)  bodies set up by the Communities13  

–  (cid:133)  national public-sector bodies/bodies with public-service mission  

–  (cid:133)  persons entrusted with the implementation of specific actions pursuant to Title 
V of the Treaty on European Union and identified in the relevant basic act within 
the meaning of Article 49 of the Financial Regulation  

(cid:131) Shared management with the Member States  

(cid:133) Decentralised management with third countries  

(cid:133) Joint management with international organisations (to be specified) 

If more than one management mode is indicated, please provide details in the "Comments" section. 

Comments  

12 

13 

Details  of  management  modes  and  references  to  the  Financial  Regulation  may  be  found  on  the 
BudgWeb site: http://www.cc.cec/budg/man/budgmanag/budgmanag_en.html 
As referred to in Article 200 of the Financial Regulation. 

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2. 

MANAGEMENT MEASURES  

2.1.  Monitoring and reporting rules  

Specify frequency and conditions. 

The  Managing  Authorities  will  submit  Annual  Implementation  Reports.  These 
reports  will  be  data  driven  and  contain  the  common  indicators  identified  under 
section  1.4.4.  This  reporting  will  be  accompanied  by  structured  surveys  and 
evaluations  mandated  by  the  Commission  at  mid-term  and  at  the  end  of  the 
programming  period.  Bilateral  review  meetings  will  examine  the  progress  in 
implementation of each programme.  

2.2.  Management and control system  

2.2.1.  Risk(s) identified  

The  management  and  control  system  are  largely  taken  over  from  Cohesion  Policy. 
Although this spending scheme is different compared to Cohesion Policy in terms of 
end recipients and implementing partners, it is expected that the risk factors will be 
similar,  in  particular  to  the  ESF.  The  major  source  of  errors  in  the  ESF  in  the  on-
going  programming  period  regards  eligibility.  (58  %  of  all  cumulative  quantifiable 
errors), accuracy issues (7%) and audit trail issues (35%). It is to address these issues 
that the eligibility rules are fully laid down in the draft regulation and a bigger use is 
made  of  flat  rates  set  in  the  regulation  itself.  A  factor  that  increases  the  risks  is 
however,  that  the  delivery  of  the  aid  to  the  final  recipients  will  depend  mostly  on 
NGOs and civil society organisations some of which with weak administrations and 
relying  largely  on  voluntary  labour.  The  Court  of  Auditors  has  already  raised  this 
issue in relation to the MDP in its 2009 report. For such organisations it will remain 
possible to limit the resources allocated to material assistance purchased centrally by 
the managing authorities and the payments of flat rates. 

2.2.2.  Control method(s) envisaged  

In accordance with the principle of the shared management, Member States have the 
primary  responsibility,  through  their  management  and  control  system,  for  the 
implementation  and  control  of  their  operational  programme.  Member  States  will 
designate a managing authority, a certifying authority and a functionally independent 
auditing authority for their operational programme. The Commission has the power 
to carry out audits focused on issues relating to sound financial management in order 
to  draw  conclusions  on  the  performance  of  Fund,  along  the  possibility  for 
interruptions, suspensions ad financial corrections. 

In Cohesion Policy the costs of tasks relate to control (at national and regional level 
and excluding the costs to the Commission) are estimated at around 2% of the total 
funding. These costs are related to the following areas of control: 1% is derived from 
national  coordination  and  programme  preparation,  82%  relates  to  programme 
management, 4% to certification and 13% to audits. 

EN 

60 

   EN 

 
Compared  to  cohesion  policy  however,  a  number  of  factors  should  help  to  reduce 
error  levels  and  control  costs.  The  new  programme  will  be  concentrated  on  only 
three  domains  of  action.  A  great  recourse  is  made  of  simplified  costs  options. 
Because of the nature of the operations and of the target groups, the end recipients 
will not be subject to audit, unless the risk assessment established a specific risk of 
irregularity or fraud. Together these factors should reduce the administrative burden 
for  beneficiaries,  lower  the  error  levels,  increase  inherent  assurance  and  thereby 
contribute to reduce control costs.  

The current DG EMPL error rate (the ECA's error rate) is 2.2%. It is estimated that 
the  factors  described  above  should  lead  to  a  reduction  of  1%  yielding  a  final 
expected programme error level of 1.2%. 

2.3.  Measures to prevent fraud and irregularities  

Specify existing or envisaged prevention and protection measures. 

The Structural Funds services together with OLAF have put into place a joint Fraud 
Prevention  Strategy  which  foresees  a  series  of  actions  to  be  carried  out  by  the 
Commission  and  the  Member  States  to  prevent  fraud  in  structural  actions  under 
shares management. This Joint Fraud Strategy will also be applicable to the Fund for 
European Aid to the Most Deprived.  

In  addition  the  proposal  includes  an  explicit  requirement  to  put  into  place  such 
measures under article 32(4). This should reinforce fraud awareness in member Sates 
among all bodies involved in the management and control of Fund for European Aid 
to the Most Deprived and thus reduce the risk of fraud. 

EN 

61 

   EN 

 
3. 

ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE  

3.1. 

Heading(s)  of  the  multiannual  financial  framework  and  expenditure  budget 
line(s) affected  

Heading of 
multiannual 
financial 
framework 

1 Smart 
and 
Inclusiv
e 
Growth 

New 
heading 
for 
2014-
2020 

Heading of 
multiannual 
financial 
framework 

•  Existing expenditure budget lines  

In order of multiannual financial framework headings and budget lines. 

Budget line 

Type of  
expenditure

Contribution  

Number  
[Description………………………...……….] 

Diff./non-
diff. 
(14) 

from 
EFTA15 
countries 

from 
candidate 
countries16 

from third 
countries 

within the 
meaning of Article 
18(1)(aa) of the 
Financial 
Regulation  

04.06.00.00 Most Deprived People  

Diff. 

/NO 

NO 

NO 

NO 

•  New budget lines requested  

In order of multiannual financial framework headings and budget lines. 

Budget line 

Type of 
expenditure

Contribution  

Number  
[Heading……………………………………..] 

Diff./non-
diff. 

from 
EFTA 
countries 

from 
candidate 
countries 

from third 
countries 

within the 
meaning of Article 
18(1)(aa) of the 
Financial 
Regulation  

[XX.YY.YY.YY] 

YES/N
O 

YES/N
O 

YES/N
O 

YES/NO 

14 
15 
16 

Diff. = Differentiated appropriations / Non-diff. = Non-Differentiated Appropriations 
EFTA: European Free Trade Association.  
Candidate countries and, where applicable, potential candidate countries from the Western Balkans. 

EN 

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3.2. 

Estimated impact on expenditure  

3.2.1. 

Summary of estimated impact on expenditure  

Heading of multiannual financial 
framework:  

Number 
1 

Smart and Inclusive Growth 

EUR million (to 3 decimal places) 

DG: EMPL 

(cid:121) Operational appropriations  

Number of budget line 

Number of budget line 

of 

Appropriations 
administrative 
 from the envelope for specific programmes17  
Number of budget line 

an 

2014 

2015 

2016 

2017 

2018 

2019 

2020 

TOTAL 

343.957  349.166  353.425  356.742  359.925  362.704  365.331 
274.038  277.152  277.152  277.152  277.152  277.152  277.152 

2,491.250 
1,936.950 

Commitments 

Payments 

Commitments 

Payments 

(1) 

(2) 

(1a) 

(2a) 

nature 

financed 

(3) 

1.250 

1.250 

1.250 

1.250 

1.250 

1.250 

1.250 

8.750 

TOTAL appropriations 
for DG EMPL18 

Commitments 

Payments 

=1+1a 
+3 

=2+2a 

+3 

345.207  350.416  354.675  357.992  361.175  363.954  366.581 

2,500.000 

275.288  278.402  278.402  278.402  278.402  278.402  278.402 

1,945.700 

17 

18 

EN 

Technical and/or administrative assistance and expenditure in support of the implementation of EU programmes and/or actions (former "BA" lines), indirect research, 
direct research. 
These appropriations are part of the Structural Funds under the Investment for Growth and Jobs goal with global comittments of EUR 327 115 655 850. The Fund for 
European Aid to the Most Deprived shall be considered as part of the share of Structural Funds allocated to the ESF. 

63 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
(cid:121) TOTAL operational appropriations  

Commitments 

Payments 

(cid:121)  TOTAL  appropriations  of  an  administrative  nature 
financed from the envelope for specific programmes  

(4) 

(5) 

(6) 

TOTAL appropriations  
under HEADING <….> 
of the multiannual financial framework 

Commitments 

=4+ 6 

Payments 

=5+ 6 

If more than one heading is affected by the proposal / initiative: 

(cid:121) TOTAL operational appropriations  

Commitments 

Payments 

(cid:121)  TOTAL  appropriations  of  an  administrative  nature 
financed from the envelope for specific programmes  

(4) 

(5) 

(6) 

TOTAL appropriations  
under HEADINGS 1 to 4 
of the multiannual financial framework 
(Reference amount) 

Commitments 

=4+ 6 

Payments 

=5+ 6 

EN 

64 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Heading of multiannual financial 
framework:  

5 

" Administrative expenditure " 

DG: EMPL 

(cid:121) Human resources  
(cid:121) Other administrative expenditure  

Year 
2014 

Year 
2015 

Year 
2016 

Year 
2017 

Year 
2018 

Year 
2019 

Year 
2020 

TOTAL 

EUR million (to 3 decimal places) 

1,016 

1,016 

1,016 

1,016 

1,016 

1,016 

1,016 

7,112 

TOTAL DG EMPL 

Appropriations  

1,016 

1,016 

1,016 

1,016 

1,016 

1,016 

1,016 

7,112 

TOTAL appropriations 
under HEADING 5 
of the multiannual financial framework  

(Total 
= Total payments) 

commitments 

1,016 

1,016 

1,016 

1,016 

1,016 

1,016 

1,016 

7,112 

Year 
N19 

Year 
N+1 

Year 
N+2 

Year 
N+3 

… enter as many years as 
necessary to show the duration 
of the impact (see point 1.6) 

TOTAL 

EUR million (to 3 decimal places) 

TOTAL appropriations  
under HEADINGS 1 to 5 
of the multiannual financial framework  

Commitments 

Payments 

19 

Year N is the year in which implementation of the proposal/initiative starts. 

EN 

65 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
3.2.2.  Estimated impact on operational appropriations  

–  (cid:133)  The proposal/initiative does not require the use of operational appropriations  

–  (cid:133)  The proposal/initiative requires the use of operational appropriations, as explained below. The Fund will be implemented in shared 
management. While the strategic priorities are set at EU level by the regulation, actual day-to-day management is vested in Managing 
Authorities. While common indicators are suggested by the Commission, actual targets will be proposed at the level of operational 
programmes by the Member States and agreed by the Commission. It is therefore not possible to indicate targets for outputs until the 
programmes are drafted, negotiated and agreed in 2013/2014.  

Year 
N 

Year 
N+1 

Year 
N+2 

Year 
N+3 

… enter as many years as necessary to show 
the duration of the impact (see point 1.6) 

TOTAL 

Commitment appropriations in EUR million (to 3 decimal places) 

OUTPUTS 

Cost 

r
e
b
m
u
N

s
t
u
p
t
u
o

f
o

Cost 

r
e
b
m
u
N

s
t
u
p
t
u
o

f
o

Cost 

r
e
b
m
u
N

s
t
u
p
t
u
o

f
o

Cost 

r
e
b
m
u
N

s
t
u
p
t
u
o

f
o

Cost 

r
e
b
m
u
N

s
t
u
p
t
u
o

f
o

Cost 

r
e
b
m
u
N

s
t
u
p
t
u
o

f
o

Cost 

Total 
numbe
r of 
output
s 

Total  
cost 

Indicate 
objectives and 
outputs  

(cid:216) 

Type 
of 
output
20 

Avera
ge 
cost  
of the 
output 

r
e
b
m
u
N

s
t
u
p
t
u
o

f
o

SPECIFIC OBJECTIVE No 121… 

- Output 

- Output 

- Output 

Sub-total for specific objective N°1 

SPECIFIC OBJECTIVE No 2… 

- Output 

20 
21 

Outputs are products and services to be supplied (e.g.: number of student exchanges financed, number of km of roads built, etc.). 
As described in Section 1.4.2. "Specific objective(s)…" 

EN 

66 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
Sub-total for specific objective N°2 

TOTAL COST 

EN 

67 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3.2.3.  Estimated impact on appropriations of an administrative nature 

3.2.3.1.  Summary  

–  (cid:133)  The  proposal/initiative  does  not 

require 

the  use  of  administrative 

appropriations  

–  (cid:59)  The  proposal/initiative  requires  the  use  of  administrative  appropriations,  as 

explained below: 

EUR million (to 3 decimal places) 

2014 

2015 

2016 

2017 

2018 

2019 

2020 

TOTAL 

HEADING 5 
of the multiannual 
financial framework 

Human resources  

1,016 

1,016 

1,016 

1,016 

1,016 

1,016 

1,016 

7,112 

Other administrative 
expenditure  

Subtotal HEADING 5 
of the multiannual 
financial framework  

Outside HEADING 522 
of the multiannual 
financial framework  

1,016 

1,016 

1,016 

1,016 

1,016 

1,016 

1,016 

7,112 

Human resources  

0,128 

0,128 

0,128 

0,128 

0,128 

0,128 

0,128 

0,896 

Other expenditure  
of an administrative 
nature 

Subtotal  
outside HEADING 5 
of the multiannual 
financial framework  

1,122 

1,122 

1,122 

1,122 

1,122 

1,122 

1,122 

7,854 

1,250 

1,250 

1,250 

1,250 

1,250 

1,250 

1,250 

8,750 

TOTAL 

2,266 

2,266 

2,266 

2,266 

2,266 

2,266 

2,266 

15,862

22 

Technical  and/or  administrative  assistance  and  expenditure  in  support  of  the  implementation  of  EU 
programmes and/or actions (former "BA" lines), indirect research, direct research. 

EN 

68 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
3.2.3.2.   Estimated requirements of human resources  

–  (cid:133)  The proposal/initiative does not require the use of human resources  

–  (cid:59)  The  proposal/initiative  requires  the  use  of  human  resources,  as  explained 

below: 

Estimate to be expressed in full amounts (or at most to one decimal place) 

2014 

2015 

2016 

2017 

2018 

2019 

2020 

(cid:121) Establishment plan posts (officials and temporary agents) 

04 01 01 01 (Headquarters and Commission’s 
Representation Offices) 

8 

8 

8 

8 

8 

8 

8 

XX 01 01 02 (Delegations) 

XX 01 05 01 (Indirect research) 

10 01 05 01 (Direct research) 

(cid:121) External personnel (in Full Time Equivalent unit: FTE)23 

XX 01 02 01 (CA, INT, SNE from the "global 
envelope") 

XX 01 02 02 (CA, INT, JED, LA and SNE in 
the delegations) 

04 01 04 01 24 

- at Headquarters25 

- in delegations  

XX 01 05 02 (CA, INT, SNE - Indirect 
research) 

10 01 05 02 (CA, INT, SNE - Direct research) 

Other budget lines (specify) 

2 

2 

2 

2 

2 

2 

2 

TOTAL 

10 

10 

10 

10 

10 

10 

10 

XX is the policy area or budget title concerned. 

The human resources required will be met by staff from the DG who are already assigned to 
management of the action and/or have been redeployed within the DG, together if necessary 
with any additional allocation which may be granted to the managing DG under the annual 
allocation procedure and in the light of budgetary constraints. 

Description of tasks to be carried out: 

Officials and temporary agents 

To contribute to the analysis, negotiations, modification and preparation for approval 
proposals  for  programmes  and  projects  in  Member  States.  To  contribute  to  manage, 
monitor  and  evaluate  the  implementation  of  programmes  and  projects  approved.  TO 
ensure compliance with the rules governing the programmes. 

External personnel 

Idem and/or administrative support 

23 

24 
25 

CA= Contract Agent; INT= agency staff ("Intérimaire"); JED= "Jeune Expert en Délégation" (Young 
Experts in Delegations); LA= Local Agent; SNE= Seconded National Expert;  
Under the ceiling for external personnel from operational appropriations (former "BA" lines). 
Essentially  for  Structural  Funds,  European  Agricultural  Fund  for  Rural  Development  (EAFRD)  and 
European Fisheries Fund (EFF). 

EN 

69 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
3.2.4.  Compatibility with the current multiannual financial framework  

–  (cid:133)  Proposal/initiative is compatible the current multiannual financial framework. 

–  (cid:133)  Proposal/initiative  will  entail  reprogramming  of  the  relevant  heading  in  the 

multiannual financial framework. 

Explain what reprogramming is required, specifying the budget lines concerned and the corresponding 
amounts. 

–  (cid:133)  Proposal/initiative requires application of the flexibility instrument or revision 

of the multiannual financial framework26. 

Explain what is required, specifying the headings and budget lines concerned and the corresponding 
amounts. 

3.2.5.  Third-party contributions  

–  The proposal/initiative does not provide for co-financing by third parties  

–  The proposal/initiative provides for the co-financing estimated below: 

Appropriations in EUR million (to 3 decimal places) 

Year 
N 

Year 
N+1 

Year 
N+2 

Year 
N+3 

… enter as many years as 
necessary to show the duration 
of the impact (see point 1.6) 

Total 

Specify  the  co-financing 
body  

TOTAL appropriations 
cofinanced  

26 

See points 19 and 24 of the Interinstitutional Agreement. 

EN 

70 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
3.3. 

Estimated impact on revenue  

–  (cid:133)  Proposal/initiative has no financial impact on revenue. 

–  (cid:133)  Proposal/initiative has the following financial impact: 

– 

– 

(cid:133) 

(cid:133) 

on own resources  

on miscellaneous revenue  

Appropriation
s available for 
the ongoing 
budget year 

Budget revenue line: 

Article …………. 

EUR million (to 3 decimal places) 

Impact of the proposal/initiative27 

Year 
N 

Year 
N+1 

Year 
N+2 

Year 
N+3 

… insert as many columns as necessary 
in order to reflect the duration of the 
impact (see point 1.6) 

For miscellaneous assigned revenue, specify the budget expenditure line(s) affected. 

Specify the method for calculating the impact on revenue.  

27 

As regards traditional own resources (customs duties, sugar levies), the amounts indicated must be net 
amounts, i.e. gross amounts after deduction of 25% for collection costs. 

EN 

71 

   EN