1. Improve 1st level control for greater efficiency of Structural Funds José Santos Soeiro President Financial Institute for Regional Development

2. Topics to be approached  The FIDR in the NSRF  Control and audit model of the NSRF  Evolution from the CSF III to the NSRF  1st level control  Results of the control

3. To implement the regional development policy through the financial coordination of community structural funds and of the Cohesion Fund, through the coordination, management and financial monitoring of the ERDF and of the Cohesion Fund, and through exercising payment and control functions related with the interventions of these funds. The FIRD’s mission FIRD in the NSRF

4.  Technical Coordination  Certification Authority  Paying Entity  Audit of Operations Functions of the FIRD, ERDF and Cohesion Fund FIRD in the NSRF

5. Internal organization of the FIRD  Focus on objectives  Separation of functions FIRD in the NSRF

6. Internal organization of the FIRD Function Unit Audit of Operations Control and Audit Certification Control Financial Coordination Monitoring Evaluation Information Systems IS NSRF Payments Support for Institutional Management Coordination of Operational Management Guide lines Good Managing Practises FIRD in the NSRF

7. NSRF Model  Single audit and control model for the whole NSRF  Coordination and articulation between the different entities  Good financial management in the use of the funds  Assure that the separation of functions will be respected Control and audit model of the NSRF Guiding Principles Control and audit model of the NSRF Guiding Principles

8.  Management and control systems of the OP in line with Reg. (CE) 1083/2006  Effective operation so as to provide reasonable guarantees that expense declarations presented to the COM are correct and that the underlying transactions are legal and in order  To prevent and detect irregularities, working to correct and recover unduly paid funds NSRF Objectives NSRF Model

9. Audit Authority IGFIGF Audit of operations Segregated IFDR IGFSE structures Segregated Articulation Technical Audit Committee    The NSRF Audit includes NSRF Model

10.  To present a single audit strategy for the whole NSRF to the EC  To assess the conformity of the management and control systems  To perform systems audits  To issue the audit reports and opinions requested by the Regulations Audit Authority NSRF Model

11.  Annual audit plans on operations, including the preparation of the respective samples  Audits on operations Segregated FIRD IMESF audit structures Segregated FIRD IMESF audit structures NSRF Model

12.  Comprised by the IGF (Inspectorate General of Finance), which coordinates, and by the segregated audit structures of the IMESF and of the FIRD  Assures the necessary coordination and articulation between these entities Technical Audit Committee NSRF Model

13. Evolution from CSF III to NSRF  Concentration of the audit functions on operations  Concentration of the payment to beneficiaries functions  Concentration of the responsibilities for recoveries from beneficiaries Alterations to the audit and control model

14. 1st level control  The MA should guarantee to taxpayers that public money is well applied  To improve the management culture and the quality of management results  To develop risk evaluation practices in management Strategic objectives

15. Management Authorities are responsible for the implementation of an internal control system :  Which prevents and detects irregular situations, enabling timely and appropriate corrective measures to be adopted  Which ensures there is an appropriate and reliable system of validation of the expenses to be presented to the Certification Authority Internal control 1st level control

16.  Include the internal control system of the OP  The MA is responsible for Art. 4 Reg. 438/2001 Art. 60 Reg. 1083/2006 Art. 13 Reg. 1828/2006 Management checks 1st level control

17.  The carrying out of the operations  The effective supply of goods and services  Veracity of the expenses  Fulfilment of national and community rules Eligibility, Public Procurement, State Aid, Environmental regulations Internal control ensures 1st level control

18. Internal control Correct Payments Internal control allows  Allows 1st level control

19. Apply to diverse aspects of operations  Administrative  Financial  Technical  Physical  Information systems Management checks 1st level control

20.  Written procedures  Reviewed regularly and following audit recommendations  Adaptation to specific risk areas  Articulation between administrative checks and in situ checks  Intensity adapted to situations of risk and to the recommendations Good Practices 1st level control

21.  MA can delegate the performance of functions  Accountability is not delegated  Delegation is based on written procedures  MA should produce written guidelines for the IB  MA should obtain guarantees on the quality of the work of the IE Written procedures Intermediate entities 1st level control

22.  Based on a solid and reliable management system  Audits do not replace internal control  Indispensable for a favourable audit opinion Functions 1st level control

23. Results 59 % Financial consequences calculated by management / monitoring CSF III - ERDF  61 % Financial consequences recovered from the beneficiary  1.4 % Irregular expense calculated in control - article 10 

24. 54 % Irregularities communicated arising from management / monitoring actions CSF III - ERDF  56 % Irregularities communicated already recovered and closed  Results

25. FIRD To actively contribute towards realising the strategic objectives of the OP Our ambition  To contribute towards the good implementation of projects  To enhance the partnership with the MA 

26. To ensure there is utter confidence that expenses are in order Our obligation  To transmit confidence to the “owners” of the funds applied: The taxpayer  FIRD

27. Conclusions The Cohesion policy is certainly the community policy with the greatest level of accountability, independent evaluation and closest monitoring 1.  The continuity of this level of exigency is both a requirement and desirable 2.  3.  Práticas de controlo e de auditoria devem observar uma adequada relação custo / benefício

28. Portugal has a secure and effective system of audit and control of the Structural Funds which grants th e EC an adequate level of confidence 4.  The NSRF’s model of governance has made significant improvements to the efficacy of the audit and control system 5.  Conclusions

29. Thank you for your attention