1. Winding-up Declaration and Audit Requirements at the Closure of INTERREG III programmes ( ) Directorate General Regional Policy Audit and Control Claude Tournier Brussels, 28 April 2008

2. Agenda Closure of INTERREG II 1994-1999 – Lessons learned
Closure of INTERREG III
- Calendar
- Winding-up declaration
- Audit Requirements
- Guidance note on closure of INTERREG III
- Irregularities
Questions and Answers

3. Closure of INTERREG II Lessons learned 1/2
Good news:
INTERREG II almost closed
INTERREG II projects have given rise to new INTERREG III projects
Bad news: What were the main problems?
Process too long
Inconsistent documents due to lack of coordination
Supplementary work could have been avoided
Closure of INTERREG II Lessons learned 1/2

4. Closure of INTERREG II Lessons learned 2/2
What was the calendar of Interreg II?
Bottleneck at the Commission
Inconsistent documents have led to significant delays
 Projects were paid late - 51 programmes not closed today, of which 7 INTERREG II programmes.
Programming period
Closure of INTERREG II Lessons learned 2/2
Eligible expenditure
Final payment
request

5. Closure of INTERREG III Calendar 1/1
INTERREG III: 81 programmes to be closed
 INTERREG III is "mono-fund“: only one DG involved in the process
Programming period
Closure of INTERREG III Calendar 1/1
Eligible expenditure
Final payment
request

6. Closure of INTERREG III Winding-up declaration 1/2
The winding-up declaration has to be sent together with the final implementation report and the final payment request in order to get the final payment.
Article 32(4) of Regulation (EC) No 1260/99
sets as a condition of payment of the final balance for a programme the submission by the Member State of the winding-up declaration.
Regulation EC No 438/2001 – Art Annex III (model)
Regulation EC No 1260/1999 – Art. 38 1, f)
Closure of INTERREG III Winding-up declaration 1/2

7. Closure of INTERREG III Winding-up declaration 2/2
What is behind the winding-up declaration?
The Winding-up Body has to prove that is has obtained assurance on expenditure declared for the whole programming period and area based on conclusions of all previous checks carried out
Art. 38 1, f of Regulation EC No 1260/1999
"This declaration shall summarise the conclusions of the checks carried out during previous years and shall assess the validity of the application for payment of the final balance and the legality and regularity of the transactions covered by the final certificate of expenditure.“
 The person or department signing the winding-up declaration takes a responsibility towards the Commission: "I certify…"
 The declaration covers expenditure of 7 +2 years: be careful i) to be informed, and ii) on the quality of written documentation
Closure of INTERREG III Winding-up declaration 2/2

8. Closure of INTERREG III Audit Requirements 1/4
What are the principle checks carried out during the previous years?
Article of Regulation EC No 438/2001 checks.
These articles lay down the basic audit requirements to be filled and of which conclusions have to be drawn before the winding-up declaration can be signed.
Closure of INTERREG III Audit Requirements 1/4

9. Closure of INTERREG III Audit Requirements 2/4
What are the requirements of Article 10 checks?
Regulation EC No 438/2001 – Art. 10
"Member States shall organise checks on operations on an appropriate sample designed in particular to
a) verify the effectiveness of the management and control systems in place;
b) verify selectively, on the basis of risk analysis, expenditure declarations made at the various levels concerned."
 The checks shall cover at least 5% of the total eligible expenditure and be based on a representative sample of the operations approved.
Closure of INTERREG III Audit Requirements 2/4

10. Closure of INTERREG III Audit Requirements 3/4
What are the requirements of Article 11?
Article 11 of Regulation EC No 438/2001
"Through the checks, the Member States shall endeavour to verify" inter alia:
the audit trail;
compliance with Community provisions, with what has been
approved and execution of works;
payments to final beneficiaries
availability of the appropriate national co-financing”
correct rates of contribution (Art. 29 of 1260/1999)
respect of rules on competition and award of public contracts
(Art. 12 of 1260/1999)
Interpretation: Communication of the Commission of
 The verification of payments to final beneficiaries may include correct payments from lead partners to partners.
 Awards of public contracts need be checked in depth even if values concerned are below the EU Directives thresholds
Closure of INTERREG III Audit Requirements 3/4

11. Closure of INTERREG III Audit Requirements 4/4
What are the requirements of Article 12?
Article 12 of Regulation EC No 438/2001
"The checks shall establish whether any problems encountered are of a systemic character."
Causes of such situation have to be identified and further examined
 Detected systemic errors should result in preventive action and/or financial corrections
Closure of INTERREG III Audit Requirements 4/4

12. Closure of INTERREG III Guidance Note 1/7
The guidance note on closure of INTERREG III programmes is available now via CIRCA in the three working languages of the Commission.
Decision of the Commission adopted on 1 August (COM(2006)3424 final of 1/08/2006): Guidelines on closure of assistance ( ) from the Structural Funds
The INTERREG guidelines should be regarded as a complement to the general guidelines
 Control activities between participating regions or Member states have to be coordinated
Closure of INTERREG III Guidance Note 1/7

13. Closure of INTERREG III Guidance Note 2/7
What is the specific features of the INTERREG closure?
Guidance Note
"A single winding-up declaration should be submitted by programme, and there is no exception to this rule when two or more Member States are involved in a programme.“
The winding-up declaration may in some cases consist of two or three different parts in the preparation phase – but! the different parts must be accurately consolidated into one single winding-up declaration.
Coordination is indispensable
Closure of INTERREG III Guidance Note 2/7

14. Closure of INTERREG III Guidance Note 3/7
Who is involved?
Managing Authority – to compile final declaration of expenditure, final implementation report (list of projects)
Paying Authority – to certify the final declaration of expenditure
Winding-up Body – to sign the winding-up declaration
 Coordinate and use of the same cut-off date!
Closure of INTERREG III Guidance Note 3/7

15. Closure of INTERREG III Guidance Note 4/7
The Managing Authority has to comply with its supervisory duties
Guidance Note
"The Managing Authority has to ensure that the management checks cover all operations in the whole programming area. This can be achieved by the intervention of national controllers or intermediate bodies or by outsourcing the control tasks. In such cases, independence from project partners and qualification of the intervening bodies has to be ensured.“
 In case of outsourced Article 4 checks, a complete analysis of the detected findings is necessary and if applicable, financial corrections have to be done.
Closure of INTERREG III Guidance Note 4/7

16. Closure of INTERREG III Guidance Note 5/7
The Paying Authority has to get all relevant information to certify the accuracy, eligibility and regularity of the amounts declared
Guidance Note
The Paying Authority has to “ensure that there is sufficient information from the Managing Authority or intermediate bodies to be able to certify the accuracy, eligibility and regularity of the amounts declared. This should include precise information on how the Managing Authority complies with its control duties under Article 4 of Regulation (EC) No 438/01 in the whole programming area.“
It has to “satisfy itself through its own checks covering operations in the whole programming area, including where appropriate the review of the work of a subsidiary paying authority.
 The Paying Authority ensures itself that it gets sufficient information from the Managing Authority. It is up to itself to decide what kind of information it needs to issue the declaration of expenses.
Closure of INTERREG III Guidance Note 5/7

17. Closure of INTERREG III Guidance Note 6/7
… and the Paying Authority has to satisfy itself on the follow-up of findings
Guidance Note
The Paying Authority has to “satisfy itself that all errors/irregularities have been satisfactorily treated and findings and recommendations of audits fully implemented, which requires that the Paying Authority is fully informed about the way the controls in the different participating regions are performed and about their results.“
 List of irregularities and reconciliation with OLAF lists by Member state.
Closure of INTERREG III Guidance Note 6/7

18. Closure of INTERREG III Guidance Note 7/7
The Winding-up Body (Art. 15) has to obtain assurance across borders
Guidance Note
"This declaration must be signed by the body(ies) designated following Article 15 of Regulation (EC) No 438/01, after having made all necessary enquiries to obtain reasonable assurance that the certified statement of expenditure is correct and that the underlying transactions are legal and regular.“
 It is NOT sufficient to carry out a control for completeness and obvious inconsistencies! If necessary, substantive controls, including content and quality checks, have to be carried out.
Closure of INTERREG III Guidance Note 7/7

19. Closure of INTERREG III Irregularities 1/1
How to deal with irregularities?
Article 1 of Regulation (EC) 2035/2005
"Irregularities (…) shall be reported by the Member State in which the expenditure was incurred. The Member State shall at the same time inform the managing authority and the paying authority for the programme and the person or body designated to establish declarations on winding-up under Article 15 of Regulation (EC) No 438/2001.”
Further information
Letter DG REGIO Mr Ahner 22 January 2007 (
There is a clear requirement for INTERREG III to track back the amounts recoverable /recovered and cancellations and reconcile those with closure documents and OLAF records
Closure of INTERREG III Irregularities 1/1

20. Thank you for your attention!
Questions & Answers