1. COMMISSION SEMINAR ON IMPLEMENTATION OF RURAL DEVELOPMENT PROGRAMMES 2007 – 2013 - Brussels, 3 and 4 October 2007 - Member State: GERMANY Coordination : Federal Ministry for Food, Agriculture and Consumer Protection (BMELV) Subject: Financial management of rural development programmes. Administrative and financial tasks Presenter: Dr. Hanns-Christoph EIDEN (BMELV)

2. Table of contents I.Introduction II.Financial management 1.Main Task 2. The universe of rules describing the conditions for a sound financial management of rural development programmes 3. Bodies involved 4. Framework for financial management 5. Role of the paying agencies 6. Role of the coordinating body. 7. Overall structure in Germany 8. Specific solutions 9. The coordinating experience in Germany III.Conclusions

3. –Germany is a federal state with 16 autonomous regions Following the German constitutional law the German regions (“Länder”) are in general responsible for the implementation of the Rural development measures. The federal government is responsible for the coordination. –National framework Germany has used the option to present a national framework with measures which may be applied by all German “Länder”. I. Introduction

4. In their programmes, the German “Länder” established the concrete support measures and the allocation of funds to the respective measures in accordance with their specific baseline situation and in conformity with National Strategy and the European guidelines. Germany presented the European Commission 14 regional programmes (EAFRD-contribution in total = 8,112,517,055 €). The Commission has formally approved 5 programmes. The adoption of 3 further programmes is expected before November 10. - Regional programmes

5. –Key Objectives of the regional programmes - Improving the competitiveness; - Developing new income potential and thereby creating and maintaining jobs within and outside agriculture and forestry; - Improving the level of education, skills and innovation potential; - Strengthening environmental protection, nature conservation and animal welfare; - Improving product quality; - Protecting and developing the cultural landscapes especially through farming; - Maintaining and improving the quality of life in rural areas. - Objectives

6. II. Financial Management 1.Main task: Protection of the financial interest of the Community Member states shall adopt all provisions and take other measures necessary to ensure effective protection of the financial interests of the Community. Member States shall check the genuineness and compliance of operations financed by the EAFRD, prevent and pursue irregularities, recover sums lost as a result of irregularities or negligence, set up an efficient management and control system.

7. 2.The universe of rules describing the conditions for sound financial management of rural development programmes Council Regulation No. 1290/2005 on the financing of the common agricultural policy Commission Regulation No. 883/2006 on the keeping of accounts by the paying agencies, declarations of expenditure and ….. and the condition for reimbursing expenditure Commission Regulation No. 885/2006 on the accreditation of paying agencies and other bodies and the clearance of accounts

8. Articles 73 – 75 of Council Regulation No. 1698/2005 on support for rural development Commission Regulation No. 1975/2006 on control procedures in respect of rural development support measures

9. 3.Bodies involved paying agencies, which, in respect of payments made by them, provide sufficient guarantees that the eligibility of requests and the procedure for allocating aids, as well as their compliance with community rules are checked certifying bodies certifying the truthfulness, completeness and accuracy of the accounts of the paying agency Coordinating body of the Paying agencies, promoting harmonised application of the Community rules managing authority in charge of the management of the programme concerned Member states have to ensure a clear allocation and separation of functions between the managing authority and the paying agency.

10. 4.Framework for financial management Rules on EAFRD – accounts in Regulation No. 883/2006 Quarterly declarations of expenditure Use of SFC 2007 a safe electronic system Annual financial clearance, based on the annual accounts, the statement of assurance, delivered by the head of the paying agency, the report of the certifying body and its certificate Conformity clearance

11. 5.Role of the Paying Agencies Key role in the financial management! = Community financing only if it has been effected by accredited paying agencies. = First and prime interlocutor for the Commission in every request concerning financial management, especially concerning conformity audits and possible financial corrections. = Commission considers the paying agency responsible for every expenditure and for the efficiency of the control and administration system for the whole underlying transaction.

12. Paying agencies manage two funds of the CAP = use the experience gained under the regime of EAGGF – guarantee section = broaden the view in respect of structural policy needs = organise one annual clearance of accounts = establish one annual statement of assurance. Need for a stream – lined approach of the financial management of the two agricultural funds. Rules applicable for EAFRD and for EAGGF must be kept compatible.

13. 6.Role of the Coordinating body Promotion of a harmonised application of the Community rules. Commission’s interlocutor on member State level for questions relating to financial management. Declarations of expenditure, estimations of financial requirements and the annual accounts of the paying agencies must be transmitted by the Coordinating body. Accreditation requirement as regards the processing of the financial information underlines the value the Commission attributes to coordination.

14. 7. Overall Structure in Germany COORDINATION Federal Ministry for Agriculture - Unit 615 - EUROPEAN COMMISSION DG AGRI THURINGIA SCHLESWIG - HOLSTEIN HAMBURG SAXONY - ANHALT SAARLAND SAXONY RHINELAND - PALATINATE NORTH- RHINE- WESTFALIA LOWER – SAXONY / BREMEN HESSEN MECKLENBURG- WESTERN - POMMERANIA BRANDENBURG / BERLIN BAVARIA BADEN- WÜRTTEMBERG Responsability of the P A Y I N G A G E N C I E S of the „L Ä N D E R“ for the practical implementation

15. in most of the “Länder” the Paying agency is responsible for the application of the administration and control system in individual cases as well as for for the keeping of accounts, recovery of undue payments and the declaration of expenditure. Depending on the administration structure of a “land” some tasks have been delegated to other bodies In this case the paying agency is obliged to foresee and execute relevant supervision actions to fulfil the requirements in view of the overall responsibility of the paying agency.

16. 8.Specific solutions In cases of specific measures the paying agency in some German “Länder” executes payments to the managing authority as intermediate body, which in considered as a beneficiary in this case In some cases this approach has been chosen for a Land in general This approach is in line with Community legislation. It does not put into question the role of the paying agency as the prime responsible body in case of the clearance of accounts and conformity audits. Consequently the paying agency has to verify the concrete execution of administration tasks and controls by the intermediate body.

17. 9.The coordinating experience in Germany Rapid and efficient action is needed This is the expectation on the side of the Commission: = She seeks quick and trustworthy information from Germany = presentation of declaration of expenditure on time = rapid answers to questions and transmission of payments to the paying agencies without delay = an efficient control system and = clear competences.

18. This is also the expectation on the side of the German paying agencies: = They ask for full and rapid information on all developments on EU – level, = immediate transmission of payments = close cooperation on issues related to the control and administration system = effective “Lobbying” in Brussels

19. The coordination task in a federal state covers both the administration and control system and the processing of the financial information In respect to the processing of financial informations. This requires = checking of declaration of expenditure against the accounts of the paying agencies in order to give the necessary assurance to the Commission = Completion of the annual accounts, the statement of assurance and the certification by drafting a synthesis report = Organisation of a stream – lined financial management How does it work? Promote common solutions in constant discussions.

20. PAYING AGENCY MINISTRY OF AGRICULTURE or IMPLEMENTING BODY EXPENDITURE DECLARATION B U N D E S L Ä N D E R 1 - 15 (AUTONOMOUS REGIONS) COMMISSION GD BUDGET GD AGRI B M E L V (FEDERAL MINISTRY OF AGRICULTURE) SFC 2007 CCI 2007 DE 14 FPO 001: VERWALTUNGS-, FINANZ- und KONTROLLSTRUKTUR „BUNDESLAND“ (AUTONOMOUS REGION) SFC 2007 Payment BANK EXPENDITURE DECLARATION Payment BANK Visualised flow of claims and payments

21. III.Conclusions One common philosophy for the management of the two agricultural funds is needed Take into account the specific requirements for EAFRD But keep the system stream – lined! Take care of a smoothly working SFC 2007- programme.