TITLE V

Management and control systems shall, in accordance with Article 5(7), provide for: a description of the functions of each body involved 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 body responsible 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; the prevention, detection and correction of irregularities, including fraud, and the recovery of amounts unduly paid, together with any interest on late payments. In accordance with the principle of shared management, Member States and the Commission shall be responsible for the management and control of programmes in accordance with their respective responsibilities laid down in this Regulation. Member States shall fulfil the management, control and audit obligations and assume the resulting responsibilities, which are laid down in the rules on shared management set out in the Financial Regulation and this Regulation. Member States shall prevent, detect and correct irregularities and shall recover amounts unduly paid, together with any interest on late payments. They shall notify the Commission of irregularities that exceed EUR 10000 in contribution from the Fund and shall keep it informed of significant progress in related administrative and legal proceedings. The Member States shall not notify the Commission of irregularities in relation to the following cases: where the irregularity consists solely of the failure to execute, in whole or in part, an operation included in the co-financed operational programme owing to the bankruptcy of the beneficiary; those brought to the attention of the managing authority or certifying authority by the beneficiary voluntarily and before detection by either authority, whether before or after the payment of the public contribution; those which are detected and corrected by the managing authority or certifying authority before inclusion of the expenditure concerned in a statement of expenditure submitted to the Commission. In all other cases, in particular those preceding a bankruptcy or in cases of suspected fraud, the detected irregularities and the associated preventive and corrective measures shall be reported to the Commission. 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 budget of the Union. Member States may decide not to recover an amount unduly paid if the amount to be recovered from the beneficiary, not including interest, does not exceed EUR 250 in contribution from the Fund. The Commission shall be empowered to adopt delegated acts in accordance with Article 62 laying down additional detailed rules on the criteria for determining the cases of irregularity to be reported, the data to be provided and on the conditions and procedures to be applied to determine whether amounts which are irrecoverable shall be reimbursed by Member States. The Commission shall adopt implementing acts in accordance with the advisory procedure under Article 63(2) setting out the frequency of the reporting and the reporting format to be used. Member States shall ensure that effective arrangements for the examination of complaints concerning the Fund are in place. The scope, rules and procedures concerning such arrangements shall be the responsibility of Member States in accordance with their institutional and legal framework. Member States shall, upon request by the Commission, examine complaints submitted to the Commission falling within the scope of their arrangements. Member States shall inform the Commission, upon request, of the results of those examinations. All official exchanges of information between the Member State and the Commission shall be carried out using an electronic data exchange system. The Commission shall adopt implementing acts in order to establish the terms and conditions with which that electronic data exchange system is to comply. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 63(3). Each Member State shall designate, for each operational programme, a national public authority or body as managing authority. The same managing authority may be designated for two operational programmes. The Member State shall designate, for each operational programme, a national public authority or body as a certifying authority, without prejudice to paragraph 3. The same certifying authority may be designated for two operational programmes. The Member State may designate, for an operational programme, a managing authority to carry out in addition the functions of the certifying authority. The Member State shall designate, for each operational programme, a national public authority or body, functionally independent from the managing authority and the certifying authority, as audit authority. The same audit authority may be designated for two operational programmes. Provided that the principle of separation of functions is respected, the managing authority, the certifying authority for OP I and, for OP II for which the total amount of support from the Fund does not exceed EUR 250000000, 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 authority 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 an 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 of its administrative and financial management capacity. The Member State shall lay down in writing rules governing its relationship with the managing authorities, certifying authorities and audit authorities, the relations between such authorities, and the relations of such authorities with the Commission 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: where relevant, support the work of the monitoring committee referred to in Article 11 and provide it with the information it requires to carry out its tasks, in particular the data relating to the progress of the operational programme in achieving its objectives, financial data and data relating to indicators; draw up and, after consultation of the relevant stakeholders, while avoiding conflicts of interests, for OP I, or after approval the monitoring committee referred to in Article 11 for OP II, submit to the Commission annual and final implementation reports referred to in Article 13; make available to intermediate bodies and beneficiaries information that is relevant to the execution of their tasks and the implementation of operations respectively; establish a system to record and store in computerised form data on each operation necessary for monitoring, evaluation, financial management, verification and audit, including data on individual participants in operations co-financed by OP II; ensure that the data referred to in point (d) is collected, entered and stored in the system, referred to in point (d) in compliance with the provisions of Directive 95/46/CE and where available, broken down by gender. As regards the selection of operations, the managing authority shall: draw up and, where relevant once approved, apply appropriate selection procedures and/or criteria, that are non-discriminatory and transparent; ensure that the selected operation: falls within the scope of the Fund and the operational programme; fulfils the criteria set out in the operational programme and in Articles 22, 23 and 26; takes into account, where relevant, the principles set out in Article 5(11), (12), (13) and (14); ensure that the beneficiary is provided with a document setting out the conditions for support for 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; satisfy itself that the beneficiary has the administrative, financial and operational capacity to fulfil the conditions referred to 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, applicable law relevant for the operation has been complied with; determine the type of material assistance for OP I and the type of action for OP II to which the expenditure of an operation shall be attributed. As regards the financial management and control of the operational programme, the managing authority shall: verify that the co-financed products and services have been delivered and that expenditure declared by the beneficiaries has been paid and that it complies with applicable law, the operational programme and the conditions for support of the operation; ensure that beneficiaries involved in the implementation of operations reimbursed on the basis of eligible costs actually incurred maintain either a separate accounting system or an adequate accounting code for all transactions relating to an operation; put in place effective and proportionate anti-fraud measures taking into account the risks identified; 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 point (g) of Article 28; draw up the management declaration and annual summary referred to in point (a) and (b) of the first subparagraph of Article 59(5) of the Financial Regulation. Verifications pursuant to point (a) of paragraph 4 shall include the following procedures: administrative verifications in respect of each application for reimbursement by beneficiaries; 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 to the level of risk identified by such 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 point (b) of the first subparagraph of paragraph 5 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 point (a) of paragraph 4 shall ensure adequate separation of functions. The Commission shall be empowered to adopt delegated acts, in accordance with Article 62, laying down rules specifying the information in relation to the data to be recorded and stored in computerised form within the monitoring system established under point (d) of paragraph 2 of this Article. The Commission shall adopt implementing acts laying down the technical specifications of the system established under point (d) of paragraph 2 of this Article. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 63(3). The Commission shall be empowered to adopt delegated acts, in accordance with Article 62, laying down the detailed minimum requirements for the audit trail referred to in point (d) of paragraph 4 of this Article in respect of the accounting records to be maintained and the supporting documents to be held at the level of the certifying authority, managing authority, intermediate bodies and beneficiaries. The Commission shall, in order to ensure uniform conditions on the implementation of this Article, adopt implementing acts concerning the model for the management declaration referred to in point (e) of paragraph 4. Those implementing acts shall be adopted in accordance with the advisory procedure referred to in Article 63(2). The certifying authority of an operational programme shall be responsible in particular for: drawing up and submitting payment applications to the Commission and certifying that they result from reliable accounting systems, are based on verifiable supporting documents and have been subject to verifications by the managing authority; drawing up the accounts referred to in point (a) of the first subparagraph of Article 59(5) of the Financial Regulation; certifying the completeness, accuracy and veracity of the accounts and that the expenditure entered in them complies with applicable law and has been incurred in respect of operations selected for funding in accordance with the criteria applicable to the operational programme and complying with applicable law; 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 accounts, including records of amounts recoverable, amounts recovered and amounts withdrawn following cancellation of all or part of the contribution for an operation or an operational programme; ensuring for the purposes of drawing up and submitting payment applications that it has received adequate information from the managing authority on the procedures and verifications carried out in relation to expenditure; taking account, when drawing up and submitting payment applications, of the results of all audits carried out by or under the responsibility of the audit authority; maintaining, in a computerised form, accounting records of expenditure declared to the Commission and of the corresponding public contribution paid to 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 budget of the Union prior to the closure of the operational programme by deducting them from the subsequent statement of expenditure. The audit authority shall ensure that audits are carried out on the proper functioning of the management and control system of the operational programme and on an appropriate sample of operations on the basis of the declared expenditure. The declared expenditure shall be audited based on a representative sample or, where appropriate, on substantive testing and, as a general rule, on statistical sampling methods. A non- statistical sampling method may be used on the professional judgement of the audit authority, in duly justified cases, in accordance with internationally accepted audit standards and in any case where the number of operations for an accounting year is insufficient to allow the use of a statistical method. In such cases, the size of the sample shall be sufficient to enable the audit authority to draw up a valid audit opinion in accordance with point (b) of the first subparagraph of Article 59(5) of the Financial Regulation. The non-statistical sample method shall cover a minimum of 5 % of operations for which expenditure has been declared to the Commission during an accounting year and 10 % of the expenditure which has been declared to the Commission during an accounting year. Where the total amount of support from the Fund to an OP I does not exceed EUR 35000000, the audit authority shall be allowed to limit the audit activities to an annual system audit that includes substantive testing on a combination of random and risk-based testing of operations. The audit work shall be carried out in accordance with internationally accepted audit standards and shall quantify annually the level of error included in the declarations of expenditure certified to the Commission. 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 eight months of adoption of an operational programme, prepare an audit strategy for the performance of audits. The audit strategy shall set out the audit methodology, the sampling or, where appropriate, substantive testing 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 2024. Where a common management and control system applies to two operational programmes, a single audit strategy may be prepared for the operational programmes concerned. The audit authority shall submit the audit strategy to the Commission upon request. The audit authority shall draw up: an audit opinion in accordance with point (b) of the first subparagraph of Article 59(5) of the Financial Regulation; a control report setting out the main findings of the audits carried out in accordance with paragraph 1, including findings with regard to deficiencies found in the management and control systems, and the proposed and implemented corrective actions. Where a common management and control system applies to two operational programmes, the information required under point (b) of the first subparagraph may be grouped in a single report. The Commission shall, in order to ensure uniform conditions for the implementation of this Article, adopt implementing acts laying down models for the audit strategy, the audit opinion and the control report. Those implementing acts shall be adopted in accordance with the advisory procedure referred to in Article 63(2). The Commission shall be empowered to adopt delegated acts, in accordance with Article 62, to set out the scope and content of audits of operations and audits of the accounts and the methodology for the selection of the sample of operations referred to in paragraph 1 of this Article. The Commission shall be empowered to adopt delegated acts, in accordance with Article 62, laying down detailed rules on the use of data collected during audits carried out by Commission officials or authorised Commission representatives. The Member State shall notify the Commission of the date and form of the designations, which shall be carried out at an appropriate level, of the managing authority and, where appropriate, of the certifying authority, prior to the submission of the first application for interim payment to the Commission. The designations referred to in paragraph 1 shall be based on a report and an opinion of an independent audit body that assesses the fulfilment by the authorities of the criteria relating to the internal control environment, risk management, management and control activities, and monitoring set out in Annex IV. The independent audit body shall be the audit authority, or another public or private law body with the necessary audit capacity, which is independent of the managing authority and, where applicable, of the certifying authority, and which shall carry out its work taking account of 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 1303/2013 is deemed to be designated for the purposes of this Regulation. The Commission may request, within one month of notification of the designations referred to in paragraph 1, the report and the opinion of the independent audit body referred to in paragraph 2 and the description of the functions and procedures in place for the managing authority or, where appropriate, the certifying authority. The Commission shall decide whether to request those documents on the basis of its risk assessment. The Commission may make observations within two months of receipt of the documents referred to in the first subparagraph. Without prejudice to Article 46, the examination of those documents shall not interrupt the treatment of applications for interim payments. Where existing audit and control results show that the designated authority no longer fulfils the criteria referred to in paragraph 2, the Member State shall, at an appropriate level, fix, according to the severity of the problem, a period of probation, during which the necessary remedial action shall be taken. Where the designated authority fails to implement the required remedial action within the period of probation determined by the Member State, the Member State, at an appropriate level, shall end its designation. The Member State shall notify the Commission without delay when a designated authority is put under probation, providing information on the respective period of probation, when following implementation of remedial actions the probation is ended, as well as when the designation of an authority is ended. The notification that a designated body is put on probation by the Member State, without prejudice to the application of Article 46, shall not interrupt the treatment of applications for interim payments. Where the designation of a managing authority or a certifying authority is ended, Member States shall designate, in accordance with the procedure provided for in paragraph 2, a new body to take over the functions of the managing authority or of the certifying authority, and shall notify the Commission thereof. The Commission shall, in order to ensure uniform conditions for the implementation of this Article, adopt implementing acts concerning the model for the report and opinion of the independent audit body and the description of the functions and procedures in place for the managing authority and, where appropriate, the certifying authority. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 63(3). The Commission shall satisfy itself on the basis of available information, including information on the designation of bodies responsible for the management and control, the documents provided each year, in accordance with Article 59(5) of the Financial Regulation, by those designated bodies, control reports, annual implementation reports 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 those systems function effectively during the implementation of operational programmes. Commission officials or authorised Commission representatives may carry out on-the-spot audits or checks subject to giving at least 12 working days' notice to the competent national authority, except in urgent cases. The Commission shall respect the principle of proportionality by taking into account the need to avoid unjustified duplication of audits or checks carried out by Member States, the level of risk to the budget of the Union and the need to minimise the administrative burden on beneficiaries in accordance with this Regulation. The scope of such audits or checks may include, in particular, verification of the effective functioning of management and control systems in a programme or a part thereof, in operations and assessment of the sound financial management of operations or programmes. Officials or authorised representatives of the Member State may take part in such audits or checks. Commission officials or authorised Commission representatives, duly empowered to carry out on-the-spot audits or checks, shall have access to all necessary 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, such officials and representatives shall have access to the information thus obtained without prejudice to the competences of national courts and in full respect of the fundamental rights of the legal subjects concerned. The Commission may require a Member State to take the actions necessary to ensure the effective functioning of their management and control systems or to verify the correctness of expenditure in accordance with this Regulation. The Commission shall cooperate with audit authorities to coordinate their audit plans and methods and shall immediately exchange with those authorities the results of audits carried out on management and control systems. To facilitate this cooperation in cases where a Member State designates more than one audit authority, the Member State may designate a coordination body. The Commission, the audit authorities and any coordination body shall meet on a regular basis and, as a general rule, at least once a year, unless otherwise agreed, to examine the annual control report, the audit opinion and the audit strategy, and to exchange views on issues relating to improvement of the management and control systems.

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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.