CHAPTER 7

Appropriations shall be used in accordance with the principle of sound financial management, namely in accordance with the principles of economy, efficiency and effectiveness. The principle of economy requires that the resources used by the Union body in the pursuit of its activities shall be made available in due time, in appropriate quantity and quality and at the best price. The principle of efficiency concerns the best relationship between resources employed and results achieved. The principle of effectiveness concerns the attainment of the specific objectives set and the achievement of the intended results. The Union body shall carry out a benchmarking exercise referred to in Article 50 of Regulation (EU, Euratom) No 966/2012. The benchmarking exercise shall include: a review of the efficiency of the Union body’s horizontal services, a cost-benefit analysis of sharing services or transferring them entirely to other Union body or the Commission. When carrying out the benchmarking exercise referred to in the first and the second subparagraph the Union body shall make necessary arrangements to avoid any conflict of interests. Specific, measurable, achievable, relevant and timed objectives shall be set for all sectors of activity covered by the budget of the Union body. The achievement of those objectives shall be monitored by performance indicators for each activity, and the information shall be provided to the management board by the director. That information shall be provided annually and at the latest in the documents accompanying the draft budget of the Union body. In order to improve decision-making, the Union body shall undertake both ex ante and ex post evaluations in line with guidance provided by the Commission. Such evaluations shall be applied to all programmes and activities which entail significant spending and evaluation results shall be sent to the management board. The director shall prepare an action plan to follow-up on the conclusions of the evaluations referred to in paragraph 5 and report on its progress twice a year to the Commission and regularly to the management board. The management board shall scrutinise the implementation of the action plan referred to in paragraph 6. The budget of the Union body shall be implemented in compliance with effective and efficient internal control. For the purposes of the implementation of the budget of the Union body, internal control is defined as a process applicable at all levels of management and designed to provide reasonable assurance of achieving the following objectives: effectiveness, efficiency and economy of operations; reliability of reporting; safeguarding of assets and information; prevention, detection, correction and follow-up of fraud and irregularities; adequate management of the risks relating to the legality and regularity of the underlying transactions, taking into account the multiannual character of programmes as well as the nature of the payments concerned. Effective internal control shall be based on best international practices and include, in particular, the following: segregation of tasks; an appropriate risk management and control strategy including control at recipient level; avoidance of conflicts of interests; adequate audit trails and data integrity in data systems; procedures for monitoring of performance and for follow-up of identified internal control weaknesses and exceptions; periodic assessment of the sound functioning of the internal control system. Efficient internal control shall be based on the following elements: the implementation of an appropriate risk management and control strategy coordinated among appropriate actors involved in the control chain; the accessibility for all appropriate actors in the control chain of the results of controls carried out; reliance, where appropriate, on independent audit opinions, provided that the quality of the underlying work is adequate and acceptable and that it was performed in accordance with agreed standards; the timely application of corrective measures including, where appropriate, dissuasive penalties; the elimination of multiple controls; improving the cost-benefit ratio of controls.

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Source: EUR-Lex (Cellar) · retrieved 2026-11-01 · Text as adopted (Official Journal); later amendments are not incorporated in this text.