MINISTRY OF ECONOMY AND FINANCE CERTIFYING AUTHORITY MANAGEMENT & CONTROL SYSTEM PROGRAMMING PERIOD 2007 – 2013 CERTIFICATION OF EXPENDITURES MINISTRY OF ECONOMY & FINANCE SINGLE PAYING AUTHORITY Certifying Authority 2007-2013 22/2/2019

Management & Control System MINISTRY OF ECONOMY AND FINANCE CERTIFYING AUTHORITY Management & Control System CERTIFYING AUTHORITY COORDINATION AUTHORITY Control Verification AUDIT AUTHORITY Audit Supervision Co-ordination MANAGING AUTHORITY / INTERMEDIATE BODIES Control Verification BENEFICIARY EXTERNAL QUALITY CONTROL OF TECHNICAL PROJECTS Quality Control PROJECT 22/2/2019 PROGRAMMING PERIOD 2007-2013

MINISTRY OF ECONOMY AND FINANCE CERTIFYING AUTHORITY Certifying Authority Independent Authority under the General Secretariat of Investments & Development ISO 9001:2000 certified AUDIT UNIT On the spot checks M. A/I.B. Monitoring of Audit Findings Management of Projects Quality control TECHNICAL & ADMINISTRATIVE SUPPORT UNIT FINANCIAL FLOW UNIT Payment Requests Payment Forecasts Follow up of withdrawals recoveries Temporary Exclusion of Payments from the Certification Monitoring and checking of Beneficiaries Payments 22/2/2019

Certification of Expenditure MINISTRY OF ECONOMY AND FINANCE CERTIFYING AUTHORITY Certification of Expenditure Certifying Authority is responsible for drawing up and submitting to the Commission certified statements of expenditure and applications for payment. The basic aim is that C.A. is able to conclude that it has sufficient assurance to submit to the Commission a certified statement of expenditure that complies with the requirements of the Article 61, EC Regulation 1083/2006. In order to achieve its role and to draw up reliable statements of expenditure certifying them in accordance with the regulatory requirements, C.A. implicates a total of systems, procedures, and data. 22/2/2019

Certification of Expenditure (Procedures, Systems, Data) MINISTRY OF ECONOMY AND FINANCE CERTIFYING AUTHORITY Certification of Expenditure (Procedures, Systems, Data) The basic “tools” of the Certifying Authority : Monitoring Information System (MIS), a key element of the overall Managing and Control System. The use of MIS is mandatory for all involved parties (data and procedures of Beneficiaries and M.A.). The implementation of specific certification procedure through which the MIS data reliability and the respect of procedures followed by M.A. / Beneficiaries are verified. The results of on the spot checks to the M.A./Intermediate Bodies, the administrative controls that C.A. performs as well as the results of the projects quality controls proceeding to remedial actions, if necessary. The results of all audits carried out by or under the responsibility of Audit Authority or other bodies and the corrections imposed, if necessary. The formal declaration submitted by the Managing Authority at the end of the certification procedure. 22/2/2019

MINISTRY OF ECONOMY AND FINANCE CERTIFYING AUTHORITY MIS Overview MIS implements all functions and data of Management and Control System. It is about a multi dimension tool (Information System) to serve all needs of an : Evaluation, Monitoring and Management System Audit and Control System Accounting System 22/2/2019

MIS Entities and Rights MINISTRY OF ECONOMY AND FINANCE CERTIFYING AUTHORITY MIS Entities and Rights Audit Authority Audits Certifying Authority Payment Requests Payment Forecasts Follow up of recoveries Exclusion of Payments Audits System On the spot checks: Managing Authorities Intermediate Bodies Projects Management of Audit results / Verifications & Inspections Findings Proposals for Exclusions of payments Management of Projects Quality Control Monitoring System Accounting System Beneficiary Progress Reports Declare Expenses and Monitoring System Management and Evaluation System Programming Managing Authorities / Intermediate Bodies Project selection / Approval/Rejection O.P. evaluation Annual Report Publicity Project Management Final Beneficiaries guidance & support Control, verification of Progress Reports Validation of MIS data Public procurement On the spot checks 22/2/2019

MIS as an Accounting System Main characteristics: The overall amount of financial data is stored (payments, corrections, withdrawals), through specific entries. No compensation of sums is permitted. The overall procedure is recorded (submission of payment related data by the Final Beneficiary, results of controls from the Managing Authorities). All corrections resulting from the competent authorities’ controls and inspections are stored and classified. All data required to provide sufficient audit trail are included 22/2/2019

MIS as an Accounting System MINISTRY OF ECONOMY AND FINANCE CERTIFYING AUTHORITY MIS as an Accounting System Basic Fields of a typical accounting record OP PRIORITY SECTORAL CODE PROJECT CONTRACT PAYMENT REPORT DATE OF ACTUAL PAYMENT DATE OF VALIDATION No OF CONTRACTOR’S INVOICE No OF BENEF. ACCOUNTING DOCUMENT PAID AMOUNT ELIGIBLE AMOUNT CATEGORY OF ELIGIBLE EXPENDITURE Information to verify that an expenditure actually incurred is reported Numerous automatic controls are performed, e.g.: Cross check of the uniqueness of accounting documents Cross check of eligibility dates Cross check of the total amount reported with the budget of the project 22/2/2019

Management of Audit Results MINISTRY OF ECONOMY AND FINANCE CERTIFYING AUTHORITY Management of Audit Results Audit Body validates Audit Findings MA VALIDATES AUDIT CORRECTION MIS automatically subtracts corrected amounts Statement of Expenditure incorporates the result Unduly paid amount Any unduly paid amount when validated into MIS is automatically and definitely subtracted from the statement of expenditure The subtracted amount is released and can be used by other projects Automatic Recoveries maintenance record 22/2/2019

MINISTRY OF ECONOMY AND FINANCE C.A. Administrative Controls - Monitoring of Audits / Verifications /Inspections Findings CERTIFYING AUTHORITY Before the issuing of the certification and further to the automatic checks performed by MIS, C.A proceeds to a series of verifications regarding: The application of corrections due to audits and inspection results The quality of MIS data Cross – checks ( sample cross –checks of the expenditures entered into the Accounting System with Banking data assuring their realization) The correlation of deliverables with the financial data The reports regarding the quality control of projects Any well documented information regarding unsafe payments 22/2/2019

Temporary Exclusion of Payments MINISTRY OF ECONOMY AND FINANCE CERTIFYING AUTHORITY Temporary Exclusion of Payments Based on the results of the Administrative control and on any well documented information regarding unsafe payments C.A. temporarily excludes any payment implying future danger 22/2/2019

MINISTRY OF ECONOMY AND FINANCE CERTIFYING AUTHORITY Temporary Exclusion of Payments Release of payments Regular payments Payments in doubt The payments are not included in the payment request Exclusion Further control Financial correction Irregular payments 22/2/2019

Standardized Procedure for Certification of Expenditures MINISTRY OF ECONOMY AND FINANCE CERTIFYING AUTHORITY Standardized Procedure for Certification of Expenditures The basic stages are the following : - Dispatching of a circular to all involved bodies: Announcing the program for all O. P. Underlining the standard obligations of M.A. and imposing additional obligations if necessary Asking the updating of the audit results from the Audit Authority Preparatory Stage Checks and confirms whether all the involved bodies, including Managing Authorities & Intermediate Bodies, have accomplished their tasks and no pending issues exist Completion of the tasks of C.A. responsibility (Evaluation of Audits/Verifications/Inspections results, quality control of MIS data, cross-checks with the relevant documentation etc) Assurance that the certification of expenditures includes only regular payments Completion Decision making regarding exclusion of payments based on the acquired information by the head of C.A. Formal Declaration for the specific Payment Request by the head of the relevant Managing Authority The aim of the payment request procedure is to ensure that C.A. has received all required information and to acquire the required assurance that the expenditures declared are in accordance with the current Community and National rules. 22/2/2019

Payment Request Procedure (flowchart) MINISTRY OF ECONOMY AND FINANCE CERTIFYING AUTHORITY Payment Request Procedure (flowchart) HEAD OF C.A. DISPATCH OF CIRCULAR ADMINISTRATIVE CONTROLS C.A. EXCLUSION OF UNSAFE PAYMENTS, CROSS CHECKS & PROCESS OF PAYMENT REQUEST C.A. FINAL CHECK C.A. CERTIFICATION OF EXPENDITURES C.A. DECISION MAKING MANAGEMENT OF AUDIT FINDINGS PROPOSAL FOR EXCLUSIONS OF PAYMENTS C.A. COMPLETION OF THEIR TASKS COMMUNICATE INFORMATION M.A. INTERM. BODIES CONFIRMATION OF THE DATA OF THE STATEMENT OF EXPENDITURES (FORMAL DECLARATION) MANAGING AUTHORITIES AUDIT REPORTS AUDIT AUTHORITY 22/2/2019