Article 38

General provisions 1. Without prejudice to the Commission's responsibility for implementing the general budget of the European Communities, Member States shall take responsibility in the first instance for the financial control of assistance. To that end, the measures they take shall include: verifying that management and control arrangements have been set up and are being implemented in such a way as to ensure that Community funds are being used efficiently and correctly; providing the Commission with a description of these arrangements; ensuring that assistance is managed in accordance with all the applicable Community rules and that the funds placed at their disposal are used in accordance with the principles of sound financial management; certifying that the declarations of expenditure presented to the Commission are accurate and ensuring that they result from accounting systems based on verifiable supporting documents; preventing, detecting and correcting irregularities, notifying these to the Commission, in accordance with the rules, and keeping the Commission informed of the progress of administrative and legal proceedings; presenting to the Commission, when each assistance is wound up, a declaration drawn up by a person or department having a function independent of the designated managing authority. This declaration shall summarise the conclusions of the checks carried out during previous years and shall assess the validity of the application for payment of the final balance and the legality and regularity of the transactions covered by the final certificate of expenditure. The Member States may attach their own opinion to this certificate if they consider it necessary; cooperating with the Commission to ensure that Community funds are used in accordance with the principles of sound financial management; recovering any amounts lost as a result of an irregularity detected and, where appropriate, charging interest on late payments. 2. The Commission in its responsibility for the implementation of the general budget of the European Communities shall ensure that Member States have smoothly functioning management and control systems so that Community funds are efficiently and correctly used. To that end, without prejudice to checks carried out by the Member States in accordance with national laws, regulations and administrative provisions, Commission officials or servants may, in accordance with arrangements agreed with the Member State in the framework of cooperation described in paragraph 3, carry out on-the-spot checks, including sample checks, on the operations financed by the Funds and on management and control systems with a minimum of one working day's notice. The Commission shall give notice to the Member State concerned with a view to obtaining all the assistance necessary. Officials or servants of the Member State concerned may take part in such checks. The Commission may require the Member State concerned to carry out an on-the-spot check to verify the correctness of one or more transactions. Commission officials or servants may take part in such checks. 3. The Commission and the Member States shall on the basis of bilateral administrative arrangements cooperate to coordinate plans, methods and implementation of checks so as to maximise the usefulness of those carried out. They shall immediately exchange the results of the checks carried out. At least once a year and, in any event, before the annual review provided for in Article 34(2) the following shall be examined and evaluated: the results of the checks carried out by the Member State and the Commission; any comments made by other national or Community control bodies or institutions; the financial impact of the irregularities noted, the steps already taken or still required to correct them and, where necessary, adjustments to the management and control systems. 4. Following this examination and evaluation and without prejudice to the measures to be taken immediately by the Member State under this Article and Article 39, the Commission may make observations, particularly regarding the financial impact of any irregularities detected. These observations shall be addressed to the Member State and the managing authority of the assistance concerned. The observations shall be accompanied, where necessary, by requests for corrective measures to remedy the management shortcomings found and correct those irregularities detected which have not already been corrected. The Member State shall have the opportunity to comment on these observations. Where, following or in the absence of comments from the Member State, the Commission adopts conclusions, the Member State shall take the necessary steps within the deadline set to comply with the Commission's requests and inform the Commission of its actions. 5. Without prejudice to this Article, the Commission, after due verification, may suspend all or part of an interim payment if it finds that the expenditure concerned is linked to a serious irregularity which has not been corrected and that immediate action is needed. The Commission shall inform the Member State concerned of the action taken and the reasons for it. If, after five months, the reasons for the suspension remain or the Member State concerned has not notified the Commission of the measures taken to correct the serious irregularity, the provisions laid down under Article 39 shall apply. 6. For a period of three years, unless otherwise decided in the bilateral administrative arrangements, following the payment by the Commission of the final balance in respect of any assistance, the responsible authorities shall keep available for the Commission all the supporting documents (either the originals or versions certified to be in conformity with the originals on commonly accepted data carriers) regarding expenditure and checks on the assistance concerned. This period shall be interrupted either in the case of legal proceedings or at the duly motivated request of the Commission.

Council Regulation (EC) No 1257/1999 of 17 May 1999 on support for… (EU) — sign in to see which provisions, and what they say.

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Source: EUR-Lex (Cellar) · retrieved 2026-11-08 · Text as adopted (Official Journal); later amendments are not incorporated in this text.