1. Cohesion Policy 2014-2020 Financial Management
TWG October
Brussels

2. Financial system 2014-2020 3 Key objectives Tools Improved assurance
Reduced error rate
Maintain flexibility
Tools
Annual clearance of accounts & rolling closure
90% interim payment capping & annual pre financing
Net corrections, 3 years retention of documents
As now, EU reimbursement calculated at the level of priority axis

3. Reduced error rate: Clearance of accounts – annual cycle
Accounting year
Clearance of accounts
1 July N-1
Dec N-1
30 Jun N
Dec N
1 Feb N+1
30 Apr N+1
30 Jun N+1
Preparation of the annual accounts, management declaration, summary audit report, audit opinion

4. Annual clearance of accounts
MS by 1 Februrary:
Certified annual accounts by CA
Report on results of management controls, weaknesses, corrective actions / Declaration of assurance (on accounts, management and control system, legality & regularity of transactions, sound financial management) by MA
Summary audit report and audit Opinion on declaration of assurance by AA
Commission by 30 April: amount chargeable to the Funds. Payment (recovery) of annual balance with next interim payment claim.
 Net corrections if errors detected by EU bodies.

5. Content of certified annual accounts
Total eligible expenditure entered in CA accounts – paid by beneficiaries
Corresponding public support paid and public support incurred in implementing operations
Amounts withdrawn or recovered
ERDF/CF operations completed / ESF expenditure included in accounts
Possible provision of maximum 5% for open audit issues

6. Rolling closure
Clearance of accounts => all the elements for closure are available
For ESF, annual closure of expenditure (different for ERDF/CF)
Retention of documents : 3 years from 31 December of the year accounts are cleared.
No big bang at closure of OPs

7. INTERIM PAYMENTS
Regular submission of payment claims with a compulsory statement of expenditure 1 month after the end of accounting year (31 July)
Payments of the public contribution to beneficiaries before expenditure declared to Commission
Payment by Commission limited to 90% of amount calculated
Remaining 10% released after clearance of accounts

8. Change in interim payment claims
Identify public payments made to beneficiaries (even to public beneficiaries) => 3 columns
Total amount paid by beneficiaries
Total amount of public support incurred in implementing operations
Corresponding eligible public support which has been paid to the beneficiary

9. Calculating payments
No major change: rate of the priority axis applied to eligible expenditure, capped by priority axis to:
Public support in the payment application
Contribution of the fund in the decision
Art 118: at the latest by closure of the OP, amount of public support paid to beneficiaries shall be at least equal to the Funds paid by the Commission to the Member State.
Reminder: maximum co-financing rate now assessed by priority axis.

10. PRE-FINANCING Initial pre-financing 4% paid in 3 instalments (2+1+1)
Annual pre-financing (2.5%) paid by 1 July from 2016 to 2022
Annual pre-financing cleared with the clearance of accounts

11. Financial reporting 4 / year (Jan-Apr-Jul-Oct), by priority axis :
total & public eligible cost + number of operations selected;
total & public eligible cost of contracts or other legal commitments
total eligible expenditure declared by beneficiaries to MA
1 / year (Jan)
Same data broken down by categories of intervention
2 / year (Jan-Jul)
Forecast of payment applications for the current and subsequent financial years
 Monitoring purpose

12. AUTOMATIC DECOMMITMENT
N+2 rule for all
Exception for the first year (“Greek proposal”)
no automatic decommitment exercise for the first year
first year commitment spread over the following years (1/6)
Exceptions for force majeure or legal proceedings and administrative appeals
No exceptions for major projects and state aid schemes

13. Improved assurance Greater responsibility of MS
Accreditation of MA/CA by Accrediting body
Annual management declaration by MA
Better alignment of MS’ assurance through ACR/AO with COM’s AAR in order to reduce the current year gap
Interim payments capped at 90%

14. CHANGES COMPARED TO
Annual system focused on annual clearance of accounts
Closure on annual basis
Payments to beneficiaries before expenditure declared to Commission, payment application
Annual pre-financing on top of a reduced initial pre-financing
No more « m+24 » rule
Capping of interim payments
N+2 for all Member States
Financial reporting 4 x year