10/04/20081 TWG of ESF Committee 10 April 2008 Franck Sébert Head of unit DG EMPL/I/1 Relations with Control Authorities Action plan to strengthen the Commissions supervisory role of Structural actions

TWG of ESF Committee - 10/04/20082 ECA 2006 Annual Report Control systems in Member States generally ineffective or moderately effective Commission maintains only moderately effective supervision Reimbursement of expenditure subject to material error – at least 12%

TWG of ESF Committee - 10/04/20083 Commission analysis Measures taken over last 5 years to improve supervision –Increased audit activity –Remedial action plans in MMSS –Suspensions and corrections But no measurable impact on reliability of certified expenditure

TWG of ESF Committee - 10/04/20084 Transition between programme periods Strengthened control arrangements for : –Compliance assessment procedure –Approval of audit strategies –Annual audit opinions –More detailed regulatory requirements –Better guidance But impact on reimbursements not significant before 2009

TWG of ESF Committee - 10/04/20085 Basis of the Action Plan Joint REGIO / EMPL actions to strengthen impact of audits in October 2007 Discharge hearing of 18 December 2007 Preparation to 2 nd discharge hearing of 25 February 2008

TWG of ESF Committee - 10/04/20086 Objectives of Action Plan Political commitment to strengthen Commission supervision of structural actions Single framework for all current and new actions to achieve improved supervision Specific outputs / indicators / deadlines Formal monitoring and reporting

TWG of ESF Committee - 10/04/20087 Link to recommendations of ECA (1) 11 recommendations identified Most important: –Complete, transparent, reliable information on financial corrections and recoveries –Improve effectiveness of Commissions supervisory controls –Ensure sound closure procedures for

TWG of ESF Committee - 10/04/20088 Link to recommendations of ECA (2) –Focus on improving first level controls –Encourage use of simplification for period –Increase impact of audit activity by better use of suspensions and corrections

TWG of ESF Committee - 10/04/20089 Action Plan Communication adopted 19 February components – 37 actions Mid-term report 31 October 2008 Final report 31 January 2009

TWG of ESF Committee - 10/04/ Strengthening Commission's supervisory role Action plan time line (number of actions to be implemented) Report on 31/01/09 Report on 31/10/ actions 24 actions

TWG of ESF Committee - 10/04/ Component 1 – Joint audit strategy Targeted audits on high risk bodies Completion of follow-up of 27 current remedial actions plans Conclude 20 suspension and correction procedures 2000/2006 and 34 correction procedures 1994/1999 Follow-up individual 2006 DAS cases

TWG of ESF Committee - 10/04/ Component 2 – IICF Action Plan Action 9 – co-ordination and sharing of audit results Action 10 – estimating cost of controls Action 11n – verifying reliability of national reporting on corrections Action 14b – guidance on controls Action 15 – promotion of contracts of confidence Action 16 – co-ordination of audit standards

TWG of ESF Committee - 10/04/ Component 3 – Preventive actions for closure Completion of audit enquiry on winding-up bodies Finalise internal procedure for closure Raise awareness of MMSS on closure guidelines

TWG of ESF Committee - 10/04/ Component 4 – Preventive actions Review of compliance assessment reports and opinions Review of national audit strategies Actions on simplification – partial closure/use of flat rates for overheads Clarification on eligibility issues

TWG of ESF Committee - 10/04/ Component 5 – Primary controls Seminar for managing authorities and certifying authorities Update guidance notes on primary controls and certification function Provision of self-assessment tool for managing authorities

TWG of ESF Committee - 10/04/ Component 6 – Reporting on financial corrections by Member States Follow-up on data reported by deadline On the spot verifications of a sample of Member States

TWG of ESF Committee - 10/04/ Component 7 – Reporting by Commission Improvements in systems for reporting on follow-up of audit recommendations Improvements in systems for reporting on corrections resulting from Commission audits

TWG of ESF Committee - 10/04/ Component 8 – Increase impact of Commission audit activity Launch suspension procedure more quickly when serious deficiencies detected Speed-up procedures for adopting Commission decisions on suspensions and corrections

TWG of ESF Committee - 10/04/ Component 9 – Annual activity report Actions to improve quality of reporting on assessment of MMSS systems Analysis of summaries and follow-up action in cases of non-compliance Component 10 – Annual summaries

TWG of ESF Committee - 10/04/ To sum up : Commission action plan is about squeezing the residual risk on programmes by time of closure Improved supervisory and control systems Decreased error rate Increased recovery rate Improved information and strengthened correction mechanisms Error rate To close the gap and reduce the risk to a tolerable level!