Commission Regulation (EC) Audit of the management and control systems for assistance granted from the Cohesion Fund Commission Regulation (EC) No 1386/2002 of 29 July 2002

Methodology Analytical review of information Systems Audit Substantive Testing On-the-spot visits

Analytical review of information Analysis of the descriptions of the management and control systems communicated to the Commission in 2001 and 2002. Analysis of the updated system descriptions that were to be communicated by Member States by the 7th November 2002.

Systems Audit The audit should provide : a complete description of the procedures put in place an assessment of whether the procedures and arrangements come up to the standards required and provide sufficient assurance a basis for recommendations for improvements to the systems an assessment of possible consequences if systems are not improved

Substantive Testing It was not foreseen to carry out any substantive testing of selected projects only where test cases were needed to assess the system

On-the-spot visits No on-the-spot visits to projects were planned. However visits to intermediate bodies have been necessary where important management and/or payment functions have been delegated to such bodies. On-the-sot visits were done to control bodies where these are externalised or decentralised.

Conclusion (1) The Member States are sufficiently advanced in complying with (1) : the application and approval process, to ensure that projects submitted for Cohesion Fund aid and the decisions taken regarding these projects comply with the relevant rules the procedures to verify the correct technical execution of the projects from preparatory stage through the entry into service of the investment

Conclusion (2) The Member States are sufficiently advanced in complying with (2): the arrangements in place regarding an accurate documentation of the audit trail the arrangements in place concerning accounting records the audit arrangements in place as regards the organisation and the definition of responsibilities

Conclusion (3) On the contrary, the auditors have identified some areas which need to be adequately addressed (1) : an effective segregation of duties between staff responsible for managing the projects and staff responsible for processing the payments a re-definition of the role of the intermediate bodies to ensure an actual and effective verification of expenditure done at the appropriate level

Conclusion (4 - end) On the contrary, the auditors have identified some areas which need to be adequately addressed (2) : guidance to all bodies concerned as regards publicity and information measures and respect of public procurement rules the execution of controls, at national, regional and local level the correct attribution of the responsibility for issuing the final declaration at the winding up of projects