1. 1 Typical problems arising in the audit of the Cohesion Fund Jacques PONCET

2. 2 a)of public procurement rules b)of environmental directive c)of Decision 96/455 on publicity d)of the eligibility of expenditure rules 1. Non-respect 2.Under - evaluation of receipts from income generating projects Type of irregularities noted during audits

3. 3 1. Award of contracts without a formal call for tenders 2.Cost increases on contracts which were not due to unforeseeable circumstances 3.Artificial splitting of contracts to avoid having to respect the requirements of the Public Procurement Directives Public procurement (1)

4. 4 4. Use of the criterion previous professional experience as a criterion for the award of contracts, even though this can only be used as a selection criterion. 5. Non-respect of Annex II Art. I of Regulation (EC) 1664/94 Public procurement (2)

5. 5 Examples: 1. No environmental impact study (EIS) carried out for projects. 2. Projects which do not comply with the terms of the Waste Directives Environmental Directives

6. 6 Commission Decision 96/455 sets out a number of requirements for the final beneficiary depending on the size/cost of the project Publicity signs Production of leaflets, brochures A joint preface by both the national authorities and the Community authorities Production of audio visual material including a video in the case of large projects Publicity

7. 7 Regulation 16/2003 sets out the rules regarding the eligibility of expenditure for Cohesion Fund projects Eligibility of expenditure (1)

8. 8 Types of irregularities 1. Purchase of land already in public ownership 2. Purchase of equipment and other running costs (office equipment, computers, vehicles) 3. Non-respect of the initial and final eligibility dates 4. Requests for payments Demandes de paiements anticipés en dehors des acomptes légaux Eligibility of expenditure (2)

9. 9 5. Salary cost of national public administration staff 6. Financing of the capital of the Final beneficiary company 7.Financing of additional supplementary works which were not approved or foreseen in the Decision Types of irregularities Eligibility of expenditure (3)

10. 10 The problems arising in the audit of Cohesion Fund projects are similar to those of ERDF Programmes. However, the advantage with the audit of the Cohesion Fund is that it is project based thus facilitating a more complete and global approach to the audit. On the other hand, it makes it more difficult to apply extrapolation of financial corrections, although these are nonetheless possible. Conclusions

11. 11 Financial corrections decided by the Commission always involve a net reduction in the Community financial commitment to the project. To ensure a consistent approach, these rules should also be used for ERDF projects. Conclusions