Closure ESF programs 1994-1999 Very brief overview of where we stand with this exercise.

Closure file : 4 documents Closure 1994-99 programs Closure file : 4 documents Final payment application Final report (1994-1999) Annual report 1999 Statement on controls (art.8 Reg. 2064/97) to be sent before 31 March 2003 Article 52.5 Regulation 1260/99 : automatic de-commitment for incomplete files - 4 main documents - For the vast majority of programs, these documents were sent just days or even hours before the final due date, which shows that it was a tremendous work for the MS authorities to put together all the necessary documents. In the further persentation (closure procedure at the Commission) it will be clear that it is a difficult exercise, both for the MS and for the Commission, and that it is really an exercise done in partnership.

analysis/verification closure documents Closure 1994-99 programs Closure procedure : analysis/verification closure documents verification with OLAF database if necessary, request for additional info analysis additional information calculation of final payment flexibility / maximum intervention rate / exchange rate / corrections on previous years - Analysis of reports : special attention to financial information, coherence between the 4 main documents. Article 8 statement examined as to independence of the controller, 5% rule (proportionally reduced), the distribution of controls over years/measures, whether appropriate action has been taken for errors/irregularities found, etc. - Verification with OLAF database : art.8 statement coherent with cases reported to OLAF, recuperation of amounts unlawfully paid, etc. - Requests for additional info : in the case of incomplete or missing info necessary for closure, clarification for essential elements, etc. Requests suspend the term of payment. - Analysis additional info transmitted by designated authorities - Calculation final payment : - - Flexibility = max. additional budget per measure of max. 10% of the budget for the priority, and max. 10% of the initial budget for the measure. - - Maximum intervention rate : rates can not be higher than rates in last financial plan - - exchange rate : especially for non EMU countries - - corrections on previous years : check whether corrections have been integrated correctly in the payment claim, and their possible impact on respecting the financial plan.

Closure procedure (cont.) : Closure 1994-1999 programs Closure procedure (cont.) : Financial unit : verification and execution final payment Closure letter to MS Reply MS De-commitment of remaining budget - verification and execution of final payments by the financial unit - once final payment is processed, letter to MS to inform them of the calculation, the amount that is paid, and the remaining budget to decommit. - MS are expected to reply on this letter within 2 months, either agreeing with the amounts, orexplaining their arguments when contesting the amounts. - When the MS contests the final payment amount, this will be further investigated. The remaining budget is only decommitted when the MS agrees with the closure or when there are no valid arguments to change the calculation.

Mainstream programs : Progress report 30/06/2003 - 15/09/2003 Closure 1994-99 programs Mainstream programs : Progress report 30/06/2003 - 15/09/2003 First : the mainstream programs (Obj.1, 2, 3, 4, 5b, 6 programs). This table shows the progress on the number of files treated since the end of June. During this period, we went from 10% to now 23 % of the programs closed. This means that now 79 programs are closed. As you can see, there is a backlog of 28 files that have not yet been treated by the financial unit, which will probably be paid in the coming days. At present, 15% of the files has been actually paid out. For some of the files the financial unit needs some clarification on the calculations which can also explain part of this delay. Only very few decommitments, but as said before, this is only done once the MS expressed it's agreement with the closure calculation.

Mainstream programs : Progress report 30/06/2003 - 15/09/2003 Closure 1994-99 programs Mainstream programs : Progress report 30/06/2003 - 15/09/2003 Same table but this time progress achieved mey-wise. Whereas 15% of the files have been paid out, only 10% of the remaining budget has been used for these payments. This shows that the remaining budget is not indicative for the remaining work charge. As said before, decommitments are only done after reply of the MS, therefore decommitment should not be regarded in the same time frame as the payment cycle.

State of play as per 15 September 2003 : in number of files Closure 1994-99 programs Mainstream programs : State of play as per 15 September 2003 : in number of files in financial volume

Closure 1994-1999 programs Overview per country. Not possible to comment on the situation of the individual countries, herefore country desk officers can be contacted for questions on particular cases.

Closure 1994-99 programs Same table per country, but this time on financial volume. This table shows payments and remaining budget. recovery orders have not been integrated in this table, files closed with a recovery order are represented as files giving rise to a zero payment.

Community Initiatives : Closure 1994-99 programs Community Initiatives : Progress report 30/06/2003 - 15/09/2003 Community Initiatives include mainly the Employment and Adapt programs, but also a great number of programs for Leader, Interreg etc. where there were sometimes small ESF budgets. Here 40% of the files have been treated. Reporting is somewhat different from that for mainstream programs : Paid = treated by the desk, so there might be a small backlog in the financial unit, but latest figures for this are not available.

Community Initiatives : Closure 1994-99 programs Community Initiatives : Progress report 30/06/2003 - 15/09/2003 In financial volume : With 40% of the files treated, payments only represent 8% of the remaining budget. This shows that available budgets have not been absorbed at 100%, and that proportionnally smaller files have been closed. Reporting different from reporting for mainstream programs : paid out and decommitted = amounts treated by desk, not necessarilly by financial unit.

Community Initiatives : State of play as per 18 September 2003 Closure 1994-99 programs Community Initiatives : State of play as per 18 September 2003 in number of files in financial volume

Closure 1994-99 programs Community Initiatives Closed files per country. Questions on the situation per country : desks can be contacted. Certain inconsistencies in this table with regard to remaining budget. Clearly, for some countries, the initial remaining budget which was downloaded from the accounting database did not include all programs. Therefore the presently remaining budget for these countries shows negative amounts. These figures should therefore only be read as indicative, the elements with regard to total numbers and the closed files are however correct.

Main raisons for suspension / delays : Closure 1994-99 programs Main raisons for suspension / delays : bottle-necks, internal procedures, informal requests for clarification/additional info incoherences in financial information payment claim / final report / article 8 statement corrections on previous years controls : inappropriate distribution incomplete vis-à-vis OLAF database inconclusive / limitations to control examinations qualified opinion Without going into the situation per country or program, the main reasons that can be distinguished for delays and suspensions in the closure : - admit that bottle-necks, many files arriving at the same moment, etc. have caused delays in the process, both internally at DG EMPL, as in OLAF where the statements of all the programs had to be checked with the database on reported irregularities. In some cases, additional clarifications and information have been asked informally, in order to be able to analyse the reports and statements. - incoherences between final report, payment application and article 8 statement have led to the suspension of files, asking the MS authorities to explain or give additional information. - corrections on previous years could be integrated into the payment claim for the last year, but report should give detail per year and per priority and measure, to check flexibility rules. In a number of files, this information was absent. - controls : main problems encountered -- Art. 3 of Reg. 2064/97 on financial controls by MS asks that controls should be spread evenly over the period. Even though the total control percentage could be reduced proportianally, controls should also cover years prior to 1998. -- In a number of cases, the errors and irregularities reported in art.8 statement did not correspond to the cases present in the OLAF data base. -- In certain cases, the conclusions or limitations expressed in the art.8 statement did not allow to form an opinion on the correct amount of expenditure to take into account. -- in some cases, the art.8 statementsexpressed a qualified opnion, but did not give sufficient information as to allow the Commission to define the impact on the amount to be paid.