1. FINANCIAL MANAGEMENT OF THE EUROPEAN AGRICULTURAL GUARANTEE FUND (EAGF)
Owen Jones DG AGRI I.4

2. Directorate-General for Agriculture and Rural Development (DG AGRI)
AGRI I.1 Budget management
AGRI I.4 - Financial management of EAGF
AGRI F.2 Financial management of EAFRD
AGRI J Audit of agriculture expenditure (clearance of accounts, X-tables, debtors’ ledger, accreditation, controls)

3. Council Regulation (EC) No 1290/2005
Commission Regulation (EC) No 883/2006 of 21/06/2006:
keeping of accounts by the paying agencies, declarations of expenditure and revenue and the conditions for reimbursing expenditure under EAGF and the EAFRD;
Commission Regulation (EC) No 884/2006 of 21/06/2006:
financing of EAGF intervention and accounting of public storage operations by the paying agencies of the Member States;
Commission Regulation (EC) No 885/2006 of 21/06/2006:
as regards the accreditation of paying agencies and other bodies and the clearance of accounts of the EAGF and the EAFRD.

4. Shared management Export refunds Intervention Direct payments
Sugar restructuring Fund
Promotion of Agricultural Products
… and direct management (Commission responsibility)

5. Responsibilities of the Commission
Monthly payments (for payments effected minus revenue received by the paying agencies) to the Member States;
Ensures budgetary discipline (respect of budget appropriations, payment deadlines, financial ceilings);
Check management and control systems in the Member States (e.g. missions in the Member States, clearance of accounts procedure) (Directorate J).

6. Budget management tasks
Prepare and maintain budget nomenclature;
Control ceilings, deadlines;
Eligibility control of expenditure;
Importation of MS declarations;
Correction of expenditure;
Reimbursement of monthly payments to the MS;
Accounting for monthly payments;
Follow-up of consumption of credits;
Management of payment reductions due to non-respect of payment deadlines;
The Early Warning System (forecasts).

7. Budget and detailed budget nomenclature

8. The detailed budget nomenclature
Is a more detailed specification of articles and items defined in the “General Budget” (there are around items and around 2000 sub-items);
Is the compulsory level of declaration of EAGF expenditure in the monthly detailed declaration table (T 104) that has to be sent from the Member States to the Commission (Reg.883/06, Art.4 2(a)).

9. Why a detailed nomenclature?
Marketing/calendar year
Product/Measure
Deadline for the payments
Financial ceiling of the expenditure

10. The detailed budget nomenclature
The detailed nomenclature changes each year because it has to be adapted to the nomenclature of the EU Budget;
The detailed nomenclature changes also throughout the year (e.g. budget amendments, new measures);
After the start of the exercise, amendments are made in form of revisions & addenda;
Changes are presented in the monthly “Agricultural funds committee” and on the website “CIRCA”;
All languages

11. Budgetary discipline

12. FINANCIAL and BUDGETARY DISCIPLINE
Respect of the global ceiling FEAGA - Multiannual Financial Perspectives;
Possible adjustment of direct aids (Art. 11 (1) Council Regulation (EC) No 73/093) (Financial Discipline) when risk of exceeding the global ceiling;
If the budget is exceeded then payments to Member States are reduced proportionally for the month in question and corrected next year to ensure that all Member States get the same global financing rate;

13. BUDGETARY DISCIPLINE
The Early Warning System is a forecast system of the Commission to ensure, that the budget ceiling will not be exceeded. It is based on monthly expenditure profiles;
Monthly early warning reports are presented in the Committee of Agricultural Funds and to the Budget Authority (= European Parliament and Council AGRIFIN Working Group) on a monthly basis.

14. Budgetary Discipline
Reductions

15. Reduction of payments by the Commission Art
Reduction of payments by the Commission Art. 17 Council Regulation (EC) No 1290/2005
Payment deadlines in EU legislation must be respected in order to respect the budgetary discipline and treat beneficiaries equally
A Working document is distributed to the Member States in the EAGF Committees indicating the earliest and latest payment deadlines per sub-item

16. Reduction of payments by the Commission Art
Reduction of payments by the Commission Art. 17 Council Regulation (EC) No 1290/2005
With the exception of direct payments, if expenditure effected after the (payment) deadlines is equal to 5% or less of the expenditure paid in time: No reduction;
Above the 5 % threshold, all further expenditure effected shall be reduced for a delay of:
Up to one month: by 10%,
Up to two months: by 25%,
Up to three months: by 45%,
Up to four months: by 70%,
For a delay of 5 months or more: by 100%.

17. Reduction of payments by the Commission Art
Reduction of payments by the Commission Art. 17 Council Regulation (EC) No 1290/2005
Procedure for reductions:
Article 17 (1)
Reduction due to late payments
Other reasons for non-eligibility
The MS is asked to submit explanations and the Commission may subsequently reduce the monthly payments
Article 17 (2)
Overrun of financial ceilings
The MS is informed about the Commission’s intention and has the opportunity to submit its comments before reduction

18. Recoveries

19. Recoveries Irregularities Administrative error Administrative error
In case of recoveries following administrative errors (no irregularity committed by the beneficiary) during the same financial exercise the corrections shall be made on the relevant expenditure lines.
In the case of outstanding amounts to be recovered at the end of the financial exercise due to administrative errors the outstanding amounts shall be credited to the EAGF via the annual declaration by item and sub-item (item where initial payment was made, correction by negative sign).
If the administrative error is (exceptionally) only detected after the annual financial clearance, the corresponding amount must be credited to the EAGF in the next annual declaration at the latest.
D REV.1. (CIRCA - EAGF Technical documents)

20. Information to be transmitted to the Commission

21. Transmission of data by the Member States
declaration of expenditure = payment request ;
to DG AGRI I.4
ii) forecasts of expenditure;
to DG AGRI I.4
iii) annual accounts of the accredited paying agencies
- to DG AGRI J.5

22. Transmission of data by the Member States
The global expenditure (Declaration of the 3rd day);
Declaration of expenditure (Declaration of the 10th day): Transmitted by the 10th day of each month;
Set of documents (T104 +…): Transmitted by the 20th day of each month. At sub-item level including forecasts

23. Set of documents (T101, 103, 104…)
Table 104 : monthly detailed declaration of expenditure and revenue for each paying agency, including forecasts;
Table 103 : a summary of table 104 for all the Member State’s paying agencies;
Table 101 : difference between the monthly expenditure declaration (= Fax of the 10th) and table 104;
e-FAUDIT tables : accounts relating to public storage operations.

24. Public Storage e-FAUDIT
An IT application, using Internet facilities, which enables Member States to calculate in a uniform manner the amounts reimbursed for public intervention storage operations;
A new IT system is being developed with your help.

25. Payment decision by the Commission
Based on Declaration of the 10th ;
Cover expenditure less assigned revenue;
Without prejudice to future corrections;
Paid on the 3rd working day of the month following the declaration;
Funds committee consulted;
Document made available beforehand.

26. Calculation of the monthly payments
Monthly payments concerning the payments made by
Member states in the month ‘n’ (September)
Month ‘n’ (September )
Month ‘n +1’ (
October
Month ‘n+2’ (
November
10th
20th 3 rd
working day 10 th
of the
month
declaration :
expenditure ‘n’
Monthly
detailed of
Monthly payment
up to the 3
wor
king
day EA GF
Committee:
consultation
of Member
States
Decision of the
Commission
concerning the
amounts of the
monthly payment
to transfer

27. Forecasts
With the monthly detailed declaration (T104) MS also have to communicate the forecasts for the following months.
The declaration of forecasts varies from item to item.
(A) = Forecasts have to be made until the end of the exercise;
(B) = Forecasts have to be made for a three-month period;
(C) = Forecasts have to be made:
at the beginning of the exercise for a three-month period,
from the declaration for the expenditure of February until the end of the exercise.

28. Why do good forecasts matter?
Reduces the risk of the Commission requesting excessive new funds in future budget proposal;
Budget authority: Improves the credibility of the Commission and the Member State;
Commission can reallocate appropriations without having to call on for extra own resources.
*Compulsory expenditure is reimbursed whatever the forecast;

29. Financial management of the FEAGA
Shared Management
Conform to legislation
Consistent with sound budgetary management
A minimum of discipline and procedure to cope efficiently with all the transactions and exceptions.

30. Financial management of the FEAGA
Workshop
Shared Management
Please give us your views

31. Workshop - Q1
Q.1. Concerning the expenditure declarations (10, T104, … declaration), can you suggest improvements concerning the form of these tables and the way to  communicate these expenditure statements to the Commission?  Do you have remarks on how any subsequent correspondence with the Commission is conducted regarding the eligibility of the declared expenditure.

32. Workshop – Q2
Q.2. Concerning the EAGF/EAFRD forecasts, can you explain how they are calculated? What difficulties have you encountered in developing these expenditure forecasts?