Seminar for Beneficiaries on the Closure of 2011 Annual Programmes - - PowerPoint PPT Presentation

Seminar for Beneficiaries on the Closure of 2011 Annual Programmes Programmes

Venue: Westin Dragonara Resort, St. Julian’s

Date: 18th July 2014 Time: 8.30am

• !""

"##$% &#' ())*##+#

General Programme Solidarity and Management of Migration Flows 2007 - 2013

SOLID Funds Achievements during 2013 under the 2011 Annual Programmes; An overview of 2012 and 2013 Annual Programmes

General Programme Solidarity and Management of Migration Flows 2007 - 2013 – Background

External Borders Fund European Refugee European Return European Fund for the Integration

• f third Country

Four Funds Borders Fund Fund Fund

• f third Country

Nationals Total EU Funds of € 93,008,285.26 Co-Financing rate: 75% / 80% EU Funds

General Programme Solidarity and Management of Migration Flows 2007 - 2013 - Background

4 Multi Annual Programmes covering 2007 - 2013

EBF Annual Programme covering a 2 and a half implementation period ERF Annual Programme covering a 2 and a half implementation period RF Annual Programme covering a 2 and a half implementation period EIF Annual Programme covering a 2 and a half implementation period

For a total of 28 Annual Programmes by closure of Programme

General Programme Solidarity and Management

• f Migration Flows 2007 - 2013

Achievements in 2013 Achievements in 2013

After the conclusion of the projects in June 2013,

2014 saw the successful closure of the 2011 Annual Programme with the implementation of: 29 Projects

External Borders Fund 5 Projects For a total investment of € 5,492,116.38 in EU Funds European Refugee Fund 12 Projects European Return Fund 4 Projects European Integration Fund 8 Projects

2011 Annual Programmes

Name of Fund

• No. of Projects

Committed Amount in EU Funds as per Grant Agreement Actual Expenditure in EU Funds IF 8 € 296,941.77 € 247,225.94 IF 8 € 296,941.77 € 247,225.94 RF 4 € 724,403.92 € 537,568.32 ERF 12 € 2,470,574.44 * € 2,330,522.91 EBF 5 € 2,396,307.06 € 2,376,799.21 * includes emergency measures Technical Assistance N/A € 381,568.25 € 380,120.46

Some of the results that were achieved during

the 2011 Annual Programme:

Enhancement of border surveillance through the purchasing of cars for coastal

External Borders Fund

purchasing of cars for coastal patrol

The Procurement of 11 saloon vehicles for the Malta Police Force

External Borders Fund

The signing of a

Memorandum of Understanding with Ghana, Gambia and Sudan on return management management

The Forced Return of 33

migrants

The assisted voluntary

return of 73 migrants

European Return Fund

Amongst the activities implemented were the:

The Procurement of 3 RHIBS for the Maritime Squadron of

the AFM

External Borders Fund

Document examination equipment, visa mobile enrolment Workstations for the Ministry for Foreign Affairs

External Borders Fund

The procurement of 100 mobile homes through the

emergency measures

European Refugee Fund

The provision of around 140,000 meals in the closed

reception centres through the emergency measures

European Refugee Fund

The setting up of food tasting activities by migrants in 28

events and the publication of a recipe book

European Refugee Fund

The provision of security services at the Open reception

centres through the emergency measures

The provision of medical services and renovation works at

the Marsa open centre

European Refugee Fund

The Training of 135 teachers in lesson plans for a cultural

diverse class

European Fund for the Integration

• f Third Country Nationals

The provision of computer lessons, art and drama classes for

the general public including Third Country Nationals at the Qawra Access Centre

European Fund for the European Fund for the Integration of Third Country Nationals

The provision of Maltese language courses, clinical practices

and theoretical modules on the Maltese geriatric setting for 72 third country national nurses in Malta

European Fund for the Integration

• f Third Country Nationals

Commitments under 2012 and 2013 Annual Programmes

2012 Annual Programmes

Name of Fund

• No. of Projects

Total amount of EU Funds as per Annual Programme Committed Amount of EU Funds as per Grant Agreement IF 9 € 510,000.00 € 301,885.94 RF 3 € 762,000.00 € 597,754.46 ERF 14 € 2,319,335 * € 2,143,798.82 EBF 5 €14,645,924.92 € 14,645,924.92 * Includes emergency measures Technical Assistance N/A € 474,523.50 € 474,523.50

2013 Annual Programmes

Name of Fund

• No. of Projects

Total amount of EU Funds as per Annual Programme Committed Amount of EU Funds as per Grant Agreement IF 8 € 555,999.00 * € 404,751.11 RF 2 € 757,690.56 * € 373,963.94 ERF 15 € 4,788,782 € 4,779,755.71 EBF 9 € 20,683,005 € 20,501.480.46 * Two IF projects are still under review * Further approvals are still to be issued with respect to RF projects Technical Assistance N/A € 599,117.44 € 599,117.44

2013 saw the continued implementation of the

2012 Annual Programme with the approval of: 31 Projects

External Borders Fund 5 Projects For a total commitment of EU Funds of €17,696,007.75 European Refugee Fund 14 Projects European Return Fund 3 Projects European Integration Fund 9 Projects

Of the 31 approved projects 2 projects have successfully

been implemented through the Emergency measures for the provision of: 100 mobile homes An X ray Machine with mobile health units

European Refugee Fund

Emergency Measure Procurement of Mobile Homes European Refugee Fund

Side by Side: A newspaper promoting integration and diversity in Malta European Fund for the Integration of Third- Country Nationals (IF)

Cooperation between Malta and African countries - Study visit in Malta. European Return Fund

Procurement of a twin-engine helicopter External Borders Fund (EBF)

34 Projects

Number of Projects currently implemented under 2013 AP

External Borders Fund 9 Projects For a total commitment of EU Funds of € 26,059,951.22 European Refugee Fund 15 Projects European Return Fund 2 Projects European Integration Fund 8 Projects

European Fund for the Integration of Third Country Nationals

• RESS (Reading and Spelling Software)

IF-2013-08, DQSE

• Supporting TCNs Integration through enhancing their awareness on the Maltese legal and social context

IF-2013-10, IOM

• Core Competences Online Assessment Tool (CCOAsT)

IF 2013-06 DQSE

• Language Learning and Parerntal Support for Integration (LLaPSI 2)

IF 2013-05 DQSE IF 2013-05 DQSE

• A study of acculturative stress, coping and quality of life of third country nationals

F-2013-16, University of Malta

• Mainstreaming a common model of intercultural competence for integration process of TCNs

IF-2013-14, IOM

• Valletta Living Together: Promoting integration through enhancing intercultural city status

IF-2013-12. SOS

• Pan-European Conference: Integration and Immigrant Spouses and Children

IF-2013-11, IOM

External Borders Fund

• Embarkation on mobile handheld border check devices by Border Control Officers

EBF-2013-05, Malta Police Force

• Procurement of Additional Police Radios to Border Control Officers

EBF-2013-03, Malta Police Force

• Purchase of a twin-engine helicopter

EBF-2013-01, AFM

• Strengthening of Ground Support Facilities at the Maritime Squadron

EBF-2013-08, AFM

• Upgrading of the AFM Microwave Carrier Link Network

EBF-2013-02

• Maximising on Malta's capacity to issue Visas

EBF-2013-07, MFA

• Purchase and installation of a system that integrates existing police and border control systems with API data Acquisition

services EBF-2013-09 Malta Police Force

• IT-related Equipment for Border Control

EBF-2013-06, Malta Police Force

• VIS roll-out

EBF-2013-04, Malta Police Force

European Return Fund

• Assisted Voluntary Return and Reintegration in the Country of Origin (RESTART V)

RF 2013-04 IOM

• Enhanced cooperation between Malta and Migrants' Countries of Origin. Lessons

learned and sharing of experience with other European Countries. RF 2013-04 IOM

European Refugee Fund

• Enhancing security within open centres

ERF-2013-05 AWAS

• Improving the safety and living conditions of Peace Laboratory Residents

ERF 2013-08 PeaceLab

• Provision of support services to residents of the Marsa Open Centre 2 (PSSR 2)

ERF 2013-10 FSM

• Provision of Food supplies (Breakfast, Lunch and Dinner) to Asylum seekers residing at Safi and Hal-Far Detention Centres

ERF 2013-01 Detention ERF 2013-01 Detention

• Provision of service by medical doctors and qualified nurses to workork with irregular immigrants held at detention centres.

ERF 2013-02 Detention

• Language Learning and Parerntal Support for Integration (LLaPSI 3)

ERF 2013-15 DQSE

• Info Sessions to residents of open centres

ERF 2013-04 AWAS

• Enhancing structural and material facilities of the Office of the Refugee Commissioner

ERF 2013-07 REFCOM

• Setting up a database for the electronic management of documentation during the asylum process and the insurance of new

protection certificates ERF 2013-06 REFCOM

In order for EU funds to be absorbed and made

available to organisation in the field: 53 Calls for applications have been issued throughout the 7 year period throughout the 7 year period

External Borders Fund 9 Calls European Refugee Fund 14 Calls European Return Fund 15 Calls European Integration Fund 15 Calls

Thank you for your attention attention

• !""

"##$% &#' ())*##+#

Internal Internal Audit and Audit and Investigations Department Investigations Department

Ms Maria Camilleri

Cabinet Office, Office of the Prime Minister

• !""

"##$% &#' ())*##+#

Contents:

1.

The IAID

2.

Functions of the Audit Authority

3.

Roles and Responsibilities

4.

Auditing Process

5.

Sample checks

6.

Audit trail

7.

Recommendations

• 1. Internal Audit and Investigations

Department (IAID)

• has been designated as the Audit Authority in relation to the

four Funds under the SOLID Programme;

• is a self-contained independent Unit within the Office of the

Prime Minister and its work is overseen by the Internal Audit Prime Minister and its work is overseen by the Internal Audit and Investigations Board whose Chairman is the Secretary to the Cabinet;

• is functionally independent both of the Responsible Authority

and of the Certifying Authority;

• is regulated by the Internal Audit and Financial Investigations

Act (Chapter 461 of the Laws of Malta).

• 2. Functions of the Audit Authority...
• As per articles in the basic acts, the Audit

Authority is responsible for verifying in accordance with internationally accepted accordance with internationally accepted audit standards the effective functioning

• f the Management and Control Systems

for the implementation of the four Funds.

• The IAID carries out audits to this effect

• 2. Functions of the Audit Authority...
• Draws up the audit strategy relevant to

the four funds and presents it to the Commission; Commission;

• Performs systems audits on the systems,

procedures and controls in place;

• Performs audits on the actions (and

expenditure).

• 2. Functions of the Audit Authority...
• The IAID carries out audits on actions on the

basis of an appropriate sample to verify basis of an appropriate sample to verify expenditure declared; the sample represents at least 10% of the total eligible expenditure for each Annual Programme per Fund.

• 2. Functions of the Audit Authority...

For each Annual Programme, the IAID drafts a report per Fund comprising:

• an annual audit report setting out the findings of the

audits carried and reporting any shortcomings found in the systems for the management and control; an opinion, on the basis as to whether the functioning

• an opinion, on the basis as to whether the functioning
• f the management and control system provides

reasonable assurance that declarations of expenditure presented to the Commission are correct and that the underlying transactions are legal and regular;

• A declaration assessing the validity of the request for

payment or statement of reimbursement of the final balance and the legality and regularity

• f

the expenditure concerned.

• 3. Roles and responsibilities
• The Responsible Authority and Beneficiaries in

the role of Management maintain responsibility;

• for the systems and controls and expenditure

incurred; and

• to establish and maintain proper control systems.
• The Audit Authority in the role of the Auditor;
• recommends and provides an opinion on the

control environment for the actions and systems assessed; and

• reports to the Responsible Authority and the

Commission.

4.Auditing process…

Planning Fieldwork Reporting

• 4. Auditing process…

a) Risk assessment exercise is performed to determine the sample checks and systems reviews; b) The annual audit plan is formulated and PLANNING b) The annual audit plan is formulated and communicated to the Responsible Authority and the Commission, by 15th February; c) Audit Notification letter sent to the beneficiary and the Responsible Authority; d) Review of documentation; e) Initial meeting.

• 4. Auditing process…

a) Interviews with the officials concerned; b) Testing of the internal control systems;

FIELDWORK

c) Testing of transactions; d) Review and examination of documentary evidence; e) Site visits / On the spot checks.

4.Auditing process…

a) Issue the draft report of all issues and

• pinions and communicates it to

management = Contradictory procedure;

REPORTING

management = Contradictory procedure; b) Receipt and review of feedback from management; c) Exit meeting; a) Final report.

• 5. Sample checks…

There are two different types of checks;

A.

Monitoring and verification visits carried out by management i.e. Responsible Authority; by management i.e. Responsible Authority; and

B.

In depth audit checks of at least 10% of the total eligible expenditure per programme performed by the Audit Authority.

• 5. Sample checks…

The Regulation stipulates that the sampling method adopted by the Audit Authority shall: a) Include an appropriate mix of types and sizes of actions; and sizes of actions; and b) Take account of any risk factors which have been identified by National

• r

Community controls (including own previous audits).

• 5. Sample checks…

Through Sample Checks the Audit Authority will be verifying that:

i.

the project meets the selection criteria for the annual programme and has been implemented in accordance with the grant agreement;

ii.

the expenditure declared corresponds to the accounting records and supporting documents;

iii.

the use or intended use

• f the project is

consistent with the

• bjectives,

actions and measures set out in the basic act;

iv.

the public or private contribution has been paid to the final beneficiary;

5.Sample checks…

v.

the items of expenditure correspond to:

a.

the eligibility requirements,

b.

the requirements specified during the national selection procedure,

c.

the terms of the grant agreement and

c.

the terms of the grant agreement and

d.

to the actual works carried out.

vi.

there is an adequate audit trail

vii.

good value for money has been achieved. Commission representatives may also carry out audits

• n

the effective functioning

• f

the management and control systems.

• 6. Audit trail…
• Both the Responsible Authority and the Project

leader within the beneficiary organisation /

• ffice shall ensure that all related evidence is

kept sequentially and adequately.

• Thus all information and evidence directly

pertaining to and resulting from the implementation

• f

the project must be recorded and made available to the auditor in a timely manner.

• 6. Audit trail…

A proper Audit Trail shall:

a)

permit reconciliation of amounts certified to the Commission with the detailed accounting records and supporting documents; records and supporting documents;

b)

permit verification of payment of the public contribution to the final beneficiary,

• f

allocation and transfer of the Community funding and of the sources of co-financing of the project;

A proper Audit Trail shall:

c)

permit verification of the application of the selection criteria;

6.Audit trail…

d)

contain in respect

• f

each project, as appropriate, the technical specifications and financing plan, documents concerning grant approval, documents relating to public procurement procedures and reports on the verifications and audits carried out.

• 7. Recommendations…

The following needs to be ensured:

a)

all relevant documentation is complete and dated in an adequate manner to reflect the actual sequence of events; events;

b)

adherence to the Public Procurement Regulations;

c)

staff costs adhere to national legislation;

d)

expenditure is being backed up by adequate supporting evidence and audit trail;

e)

four eyes principle is present in all claims raised;

• 7. Recommendations…

f)

inventory sheets are kept and updated accordingly;

g)

Grant agreements need to provide detailed information

• n the eligible expenditure;

h)

adherence to the provisions of the contract agreement; adherence to the provisions of the contract agreement;

i)

proof of delivery and acceptance of the items procured is maintained;

j)

time sheets need to be adequately and sufficiently compiled;

k)

required documentation is made available in a timely manner.

Contact details

Internal Audit and Investigations Department Lower Ground Floor, Valletta Buildings, South Street, South Street, Valletta Malta Telephone no.: 21 237737 Fax no.: 21 237681 Email: info.iaid@gov.mt

Thank you for your attention attention

• !""

"##$% &#' ())*##+#

The Certifying Authority - AP 2011 Findings

Mr Emanuel Borg

• !""

"##$% &#' ())*##+#

Finding no.1: the Certifying who?

Common questions from some beneficiaries “Who are these guys?” “My project ended in June 2013…. What do

they want from us now in January 2014?”

“What is your role please, sir?” “I am fed up of audits!!”

First Answer

THE CA IS NOT AN AUDIT BODY CA role is to declare expenditure (applicable to CA role is to declare expenditure (applicable to

Community and national rules) to the

• Commission. All EU co-financing under SOLID

has been paid with government pre-financing. Our role is to claim that share.

Does CA rely on auditors

• nly?

NO!! The Certifying Authority relies on the level of The Certifying Authority relies on the level of

assurance provided by every stakeholder in the system:

Treasury IAID Responsible Authority

Beneficiary: “You never contacted us”

You are right! Any CA Clarifications are issued to the RA

because any expenditure forwarded for certification was verified at RA level

Beneficiary: “So do you check every single invoice?”

Absolutely NOT!! CA performs expenditure testing on a sample

basis but everything depends on the nature of the project

When should the beneficiary expect any requests for clarifications from RA?

It is the CA which closes Annual

Programme through certification Programme through certification

Therefore, any clarification can be made

until 9 months after end of project implementation date

• Ex. AP 2012: Tuesday 31st March, 2015

Beneficiary: “We have plenty of time to submit invoices”

Definitely not the case!!! Finding no.2: TIME FACTOR AP not closed by Commission deadline =

risk of loss of funds

More projects, more expenditure

AP 2011 had double the number of

projects from AP 2010

Late forwarding of payments to Treasury

means clogging at Treasury level

Late Payments at Treasury

Consequences derived from such delay

results in:

Delays for RA to perform its OTS checks Delays for RA to perform its OTS checks Delays for CA to review RA’s OTS Delays for IAID to perform audits Delays for CA to review IAID reviews Delays for CA to perform expenditure testing

To this effect....please note

Circular 2/14 of RA dated 16th April, 2014 Circular 1/14 of CA dated 16th June, 2014 All documentation on SIS and hardcopies All documentation on SIS and hardcopies

submitted to RA not later than 18 July 2014

“Explanations will have to be provided to

the Certifying Authority – Ministry for Finance – for any unjustified delays”- Circular 1/14

Finding no.3: Project Indicators

Some beneficiaries did not reach project

indicators as declared in application

• Ex. 1000 leaflets published instead of 3000
• Ex. 50 TCNs trained instead of 150

Finding no.4: Project visibility

All project leaders are reminded that

publicity is an absolute requirement

• Art. 34 & Art. 35 of Implementing Rules

explain the obligations and technical requirements on the beneficiaries

Problems with project visibility

Art.34(3) – “Where a project receives

funding under an annual programme co- financed by the Fund, the final beneficiary financed by the Fund, the final beneficiary shall ensure that those taking part in the project have been informed of that funding”

Expenditure on consumables ex. food or

clothes is not exempted from requirement

Problems with project visibility

Example: Project application indicated that publicity Project application indicated that publicity

would be carried out specifically on TV, newspapers, magazines and press release

Problems with project visibility

• 1. OTS reveals that publicity was done
• nce on Sunday magazines only.

Therefore, a narrower public was informed Therefore, a narrower public was informed

• 2. Publicity was published a couple of

months after project termination

Required publicity obtained but suspicion of

invalid expenditure (i.e.post-deadline of 30 June) unless already declared irregular.

Conclusion

CA recommends that particular attention is

dedicated to procurement procedures

Court of Auditors is very sensible to this Court of Auditors is very sensible to this

area of project implementation

Don’t leave it up to bilateral meetings to

update situation with regards to procurement.

Thank you for your attention attention

• !""

"##$% &#' ())*##+#

EU Funds Management unit (EUFM) Treasury Department

Ms Letizia Mintoff

• !""

"##$% &#' ())*##+#

Overview

EUFM’s role Main improvements in relation to 2011 Main improvements in relation to 2011 Main problems encountered Recent initiatives Way forward

EUFM’s role

EUFM’s role

• Once the Responsible Authority has finalised the verifications, the necessary documents are

forwarded to the Treasury for the necessary payment

• The Treasury conducts its own checks and in cases where the Treasury has some

reservations, it will return the documentation to the RA, indicating the reasons. The Responsible Authority may need to consult back with the Beneficiary

• Once Treasury is satisfied with the documentation, payment is executed

VERY IMPORTANT: Payments will not be processed until all issues relating to the documentation have been cleared

Main improvements in relation to 2011

• New system – Solid Information System, formerly FO2 doc system
• SIS is similar to other databases of other EU funds
• SIS is a common system - Beneficiaries can have access to database

and check status of payments

• Introduction of an ISC based system of payment more straight forward

against the FO2 doc system

Main problems encountered

• Missing documentation/not original/printed on Government paper
• Invoice payable under different projects/funds
• No proof of payment in case of claims for reimbursement
• Incorrect data inputting
• Date of certification on ISC before date of certification on SIS

Main problems encountered

• Reimbursement of salaries not submitted consecutively per month
• Several payments of a very small value to the same contractor

processed separately

• CBM exchange rate not used for payments in a foreign currency
• Checklist not marked properly

Recent Initiatives

Treasury Circular no 6

• Whenever a payment is found to be missing supporting documentation, the

beneficiary shall be notified and granted five working days to rectify issues beneficiary shall be notified and granted five working days to rectify issues and submit missing documentation after which documents shall be sent back

• Once all the requested documentation is in order, the EUFM shall proceed

with payment and the bank transfer shall be authorised within nine working days

Way forward

Payment process:

SIS electronic checklist SEPA payments - reduction of bank charges Automatic updating – reduction of errors, no need for manual

updating

Way forward

Manual of Procedures – EUFM

• Outline the payment process in general for all EU funds
• Include a list of required documentation for every payment type
• Expected to be finalised by end of September
• Provides reference to both Beneficiary and Responsible Authority
• Envisaged to improve the payment process

Thank you for your attention attention

• !""

"##$% &#' ())*##+#

Procurement Irregularities and how to avoid them

Mr Christopher Magri Funds and Programmes Division

• !""

"##$% &#' ())*##+#

Member States Obligations – Article 317 of the Treaty on the European Union

Implementation of the Budget and Discharge ...MS shall cooperate with the Commission to ensure ...MS shall cooperate with the Commission to ensure

that the appropriations are used in accordance with the principles of sound financial management

The regulations shall lay down the control and audit

• bligations of the MS in the implementation of the

budget and the resulting responsibilities...

Member States Obligations – Article 325 of the Treaty

• n the European Union

Combating Fraud The Union and the MS shall counter fraud and any other

illegal activities affecting the financial interests of the Union through measures to be taken in accordance with this Article, illegal activities affecting the financial interests of the Union through measures to be taken in accordance with this Article, which shall act as a deterrent and be such as to afford effective protection in the MS, and in all the Unions' institutions, bodies, offices and agencies.

...MS shall coordinate their action aimed at protecting the

financial interests of the Union against fraud...

Financial Rules applicable to the general budget of the Union (Ref 1605/2002)

• Article 59
• Where the Commission implements the budget under shared management,

implementation tasks shall be delegated to the MS. The Commission and the MS shall respect the principles of sound financial management, transparency and non-discrimination... and non-discrimination...

• ...the Commission and the MS shall fulfil their respective control and audit
• bligations and assume the resulting responsibilities laid down in this

regulation...

• ...MS shall take all the necessary measures, including legislative, regulatory

and administrative measures, to protect the Union‘s financial interests, namely by...

• ...preventing, detecting and correcting irregularities and fraud

Financial Rules applicable to the general budget of the Union (Ref 1605/2002)

Article 59...cont In order to protect the Union‘s financial interests, MS shall, respecting the

principle of proportionality, and in compliance with this article, and the relevant sector-specific rules, carry out ex ante and ex post controls including, where appropriate, on the spot checks on representative and/or risk based samples of transactions. They shall also recover funds unduly plaid risk based samples of transactions. They shall also recover funds unduly plaid and bring legal proceedings where necessary in this regard

MS shall impose effective, dissuasive and proportionate penalties on

recipients where provided for in sector specific and in specific provisions in national legislation

Bodies designated pursuant to paragraph 3 shall...set up and ensure the

functioning of an effective and efficient internal control system

Definition of irregularities (Common Provisions Regulation – 1303/2013)

Irregularity – means any breach of Union law, or of

national law relating to its application, resulting from an act or omission by an economic operator from an act or omission by an economic operator involved in the implementation of the ESI Funds, which has, or would have, the effect of prejudicing the budget of the Union by charging an unjustified item of expenditure to the budget of the Union

Definition of Fraud – Convention on Financial Interests

For the purposes of this Convention, fraud affecting the European

Communities’ financial interests shall consist of:

In respect of expenditure, any intentional act or omission relating to

The use or presentation of false, incorrect or incomplete statements or

documents, which has as its effect the misappropriation or wrongful documents, which has as its effect the misappropriation or wrongful retention of funds from the general budget of the European Communities or budgets managed by, or on behalf of, the European Communities

Non-disclosure of information in violation of a specific obligation, with

the same effect

The misapplication of such funds for purposes other than those for which

they were originally granted

Definition of Fraud – Convention on Financial Interests ...cont

For the purposes of this Convention, fraud affecting the European

Communities’ financial interests shall consist of:

In respect of revenue, any intentional act or omission relating to :

The use or presentation of false, incorrect or incomplete statements or

documents, which has as its effect the illegal diminution of the resources documents, which has as its effect the illegal diminution of the resources

• f the general budget of the European Communities or budgets managed

by, or on behalf of, the European Communities

Non disclosure of information in violation of a specific obligation, with

the same effect

Misapplication of a legally obtained benefit, with the same effect

SOLID Regulations – Basic Acts

General principles of management and control systems - the

management and control systems of multiannual programmes set up by MS shall provide for:

(d) procedures for ensuring the correctness and regularity of the (d) procedures for ensuring the correctness and regularity of the

expenditure declared under the annual programmes

(j) procedures for reporting and monitoring irregularities and for the

recovery of amounts unduly paid

SOLID Regulations – Basic Acts

Responsibilities of the Member States:

(1) MS shall be responsible for ensuring sound financial

management of multiannual programmes and the legality and regularity of underlying transactions and regularity of underlying transactions

(3) MS shall prevent, detect and correct irregularities.

They shall notify these to the Commission, and keep the Commission informed of the progress in the administrative and legal proceedings

SOLID Regulations – Basic Acts

Suspension of payments: All or part of the pre-financing and payments of

the balance may be suspended by the Commission when: when:

(b) expenditure in a certified declaration of expenditure

is linked to a serious irregularity which has not been corrected

SOLID Regulations – Basic Acts

Financial corrections:

MS shall bear the responsibility for investigating irregularities MS shall make the financial corrections required in

connection with the individual or systematic irregularities connection with the individual or systematic irregularities detected in actions or annual programmes

Corrections made by MS shall consist in cancelling and if

applicable recovering all or part of the Community contribution

Types of irregularities and frauds typical to procurement

• Conflicts of interests
• Non respect of tender rules
• Setting up/designing tenders for particular bidders
• Fake tender documents
• Bribery of public officials
• Altering specifications in favour of one bidder
• Repetitive solicitation of the same vendors, which seem to win numerous bidding

exercises

• Splitting of contracts in order to allow easier tendering under a lower threshold
• Lack of segregation of functions in tendering process
• Unclear award and selection criteria

Commission Decision C (2013) 9527 final – financial corrections

• In line with Reg 966/2012, the Commission is required to :
• Make financial corrections to exclude from Union financing expenditure

incurred in breach of applicable law

• Base its financial corrections on the amounts unduly spent, and the

financial implications for the budget and where such amounts cannot financial implications for the budget and where such amounts cannot be identified precisely, the Commission may apply extrapolated or flat rate corrections

• When deciding on the amount of a financial correction, take account of

the nature and gravity of the breach of applicable law and the financial implications for the budget, including the case of deficiencies in management and control systems

Commission Decision C (2013) 9527 final – financial corrections

• Applicability:
• Although the corrections were developed for structural funds, similar provisions

exist in other specific regulations, and the financial corrections apply accordingly

• The guidelines are applicable to all shared management funds included in the

programming periods 2007-2013 and 2014-2020, including those not constituting continuation of the existing Funds (such as support for police cooperation) programming periods 2007-2013 and 2014-2020, including those not constituting continuation of the existing Funds (such as support for police cooperation)

• The guidelines apply primarily in the case of irregularities which constitute

breaches of public procurement rules applicable to contracts financed from the Union budget and subject to the shared management method

• The rates of corrections are also applicable to contracts not (or not fully) subject

to the procurement directives after the Court of Justice confirmed that the rules and the principles of the EC Treaty apply also to contracts that fall outside the scope of the procurement directives.

Commission Decision C (2013) 9527 final – financial corrections

• The types of the irregularities described in the decision are the most frequently

found types of irregularities and therefore provide a very important guideline for procurement of any fund

• The amount of financial correction is calculated on the expenditure amount

declared to the Commission and related to contract (or part of it) effected by the irregularity irregularity

• The same correction rate should be applied also to any expenditure related to

the same affected contract, before such expenditure is certified to the Commission

• When an irregularity is only of a formal nature without any actual or potential

financial impact, no corrections will be made

• Where a number of irregularities are detected in the same tender procedure, the

rates of correction are not cumulated, the most serious irregularity being taken as an indication to decide the rate of correction

Commission Decision C (2013) 9527 final –Contract notice and tender specifications - 1

• Lack of publication of contract notice.
• The contract notice was not published in accordance

with the relevant rules (e.g. publication in the Official Journal of the European Union (OJEU) where this is required by the Directives).

Commission Decision C (2013) 9527 final –Contract notice and tender specifications - 2

• Artificial splitting of works/services/supplies

contracts. contracts.

• A works project or proposed purchase of a certain

quantity of supplies and/or services is subdivided resulting in its coming outside the scope of the Directives, i.e., preventing its publication in OJEU for the whole set of works, services or supplies at stake.

Commission Decision C (2013) 9527 final –Contract notice and tender specifications – 3

• Non-compliance with - time limits for receipt of

tenders; or - time limits for receipt of requests to tenders; or - time limits for receipt of requests to participate.

• The time limits for receipt of tenders (or receipt of

requests to participate) were lower than the time limits in the Directives.

Commission Decision C (2013) 9527 final –Contract notice and tender specifications - 4

• Insufficient time for potential tenderers/candidates to obtain

tender documentation

• Time for potential tenderers/candidates to obtain tender

documentation is too short, thus creating an unjustified obstacle to documentation is too short, thus creating an unjustified obstacle to the opening up of public procurement to competition. Corrections are applied on a case by case basis. In determining the level of the correction, account will be taken of possible mitigating factors related to the specificity and complexity of the contract, in particular a possible administrative burden or difficulties in providing the tender documentation.

Commission Decision C (2013) 9527 final –Contract notice and tender specifications – 5

• Lack of publication of - extended time limits for

receipt of tenders; or - extended time limits for receipt of requests to participate receipt of requests to participate

• The time limits for receipt of tenders (or receipt of

requests to participate) were extended without publication in accordance with the relevant rules (i.e., publication in the OJEU if the public procurement is covered by the Directives).

Commission Decision C (2013) 9527 final –Contract notice and tender specifications - 6

• Cases not justifying the use of the negotiated

procedure with prior publication of a contract procedure with prior publication of a contract notice.

• Contracting authority awards a public contract by

negotiated procedure, after publication of a contract notice, but such procedure is not justified by the relevant provisions

Commission Decision C (2013) 9527 final –Contract notice and tender specifications - 7

• For the award of contracts in the field of defence and security

falling under directive 2009/81/EC specifically, inadequate justification for the lack of publication of a contract notice

• Contracting authority awards a public contract in the area of

defence and security by means of a competitive dialogue or negotiated procedure without publication of a contract notice whereas the circumstances do not justify the use of such a procedure.

Commission Decision C (2013) 9527 final –Contract notice and tender specifications - 8

• Failure to state:
• the selection criteria in the contract notice; and/or
• the award criteria (and their weighting) in the contract notice or in
• the award criteria (and their weighting) in the contract notice or in

the tender specifications. The contract notice does not set out the selection criteria. And/or When neither the contract notice nor the tender specifications describe in sufficient detail the award criteria as well as their weighting

Commission Decision C (2013) 9527 final –Contract notice and tender specifications - 9

• Unlawful and/or discriminatory selection and/or

award criteria laid down in the contract notice or tender documents

• Cases in which operators have been deterred from
• Cases in which operators have been deterred from

bidding because of unlawful selection and/or award criteria laid down in the contract notice or tender

• documents. For example:
• - obligation to already have an establishment or

representative in the country or region; tenderers’ possession of experience in the country or region.

Commission Decision C (2013) 9527 final –Contract notice and tender specifications - 10

• Selection criteria not related and proportionate to the subject

matter of the contract

• When it can be demonstrated that the minimum capacity levels of

ability for a specific contract are not related and proportionate to the subject matter of the contract, thus not ensuring equal access for tenderers or having the effect of creating unjustified obstacles to the opening up of public procurement to competition.

Commission Decision C (2013) 9527 final –Contract notice and tender specifications - 11

• Discriminatory technical specifications
• Setting technical standards that are too specific, thus

not ensuring equal access for tenderers or having the effect of creating unjustified obstacles to the

• pening up of public procurement to competition

Commission Decision C (2013) 9527 final –Contract notice and tender specifications - 12

• Insufficient definition of the subject-matter of the

contract

• The description in the contract notice and/or the
• The description in the contract notice and/or the

tender specifications is insufficient for potential tenderers/candidates to determine the subject- matter of the contract

Commission Decision C (2013) 9527 final – Evaluation

• f Tenders - 13
• Modification of selection criteria after opening of tenders, resulting

in incorrect acceptance of tenderers.

• The selection criteria were modified during the selection phase,

resulting in acceptance of tenderers that should not have been accepted if the published selection criteria had been followed

Commission Decision C (2013) 9527 final – Evaluation

• f Tenders - 14
• Modification of selection criteria after opening of tenders, resulting

in incorrect rejection of tenderers

• The selection criteria were modified during the selection phase,

resulting in rejection of tenderers that should have been accepted if the published selection criteria had been followed

Commission Decision C (2013) 9527 final – Evaluation of Tenders - 15

• Evaluation of tenderers/candidates using unlawful selection or

award criteria

• During the evaluation of tenderers/candidates, the selection

criteria were used as award criteria, or the award criteria (or criteria were used as award criteria, or the award criteria (or respective sub-criteria or weightings) stated in the contract notice

• r tender specifications were not followed, resulting in the

application of unlawful selection or award criteria. Example: Sub- criteria used for the award of the contract are not related to the award criteria in the contract notice/tender specifications

Commission Decision C (2013) 9527 final – Evaluation

• f Tenders - 16
• Lack of transparency and/or equal treatment during evaluation
• The audit trail concerning in particular the scoring given to each bid

is unclear/unjustified/lacks transparency or is nonexistent. And/or The evaluation report does not exist or does not contain all the elements required by the relevant provisions

Commission Decision C (2013) 9527 final – Evaluation of Tenders - 17

• Modification of a tender during Evaluation
• Modification of a tender during Evaluation
• The contracting authority allows a

tenderer/candidate to modify its tender during evaluation of offers

Commission Decision C (2013) 9527 final – Evaluation of Tenders - 18

• Negotiation during the award procedure
• In the context of an open or restricted procedure, the contracting

authority negotiates with the bidders during the evaluation stage, leading to a substantial modification of the initial conditions set out in the contract notice or tender specifications

Commission Decision C (2013) 9527 final – Evaluation

• f Tenders - 19
• Negotiated procedure with prior publication of a contract notice

with substantial modification of the conditions set out in the contract notice or tender specifications contract notice or tender specifications

• In the context of a negotiation procedure with prior publication of a

contract notice, the initial conditions of the contract were substantially altered, thus justifying the publication of a new tender

Commission Decision C (2013) 9527 final – Evaluation

• f Tenders - 20
• Rejection of abnormally low tenders
• Tenders appear to be abnormally low in relation to the goods,

works or services but the contracting authority, before rejecting those tenders, does not request in writing details of the constituent elements of the tender which it considers relevant

Commission Decision C (2013) 9527 final – Evaluation

• f Tenders - 21
• Conflict of interest
• When a conflict of interest has been established by a

competent judicial or administrative body, either from the part of the beneficiary of the contribution paid by the Union or the contracting authority

Commission Decision C (2013) 9527 final – Contract Implementation - 22

• Substantial modification of the contract elements set
• ut in the contract notice or tender specifications
• The essential elements of the award of the contract
• The essential elements of the award of the contract

include but are not limited to price, nature of the works, the completion period, the terms of payment, and the materials used. It is always necessary to make an analysis on a case by-case basis of what is an essential element

Commission Decision C (2013) 9527 final – Contract Implementation - 23

• Reduction in the scope of the contract
• The contract was awarded in compliance with the

Directives, but was followed by a reduction in the scope of the contract

Commission Decision C (2013) 9527 final – Contract Implementation - 24

• Award of additional works/services/supplies contracts (if such award

constitutes a substantial modification of the original terms of the contract) without competition in the absence of one of the following conditions - extreme urgency brought about by unforeseeable events; - an unforeseen circumstance for complementary works, services, supplies. circumstance for complementary works, services, supplies.

• The main contract was awarded in accordance with the relevant provisions,

but was followed by one or more additional works/services/supplies contracts (whether or not formalised in writing) awarded without complying with the provisions of the Directives, i.e., the provisions related to the negotiated procedures without publication for reasons of extreme urgency brought about by unforeseeable events or for award of complementary supplies, works and services

Commission Decision C (2013) 9527 final – Contract Implementation - 25

• Additional works or services exceeding the limit laid

down in the relevant provisions

• The main contract was awarded in accordance with

the provisions of the Directives, but was followed by

• ne or more supplementary contracts exceeding the

value of the original contract by more than 50%.

Tips - How to avoid common mistakes in procurement

• Ensure the provision of clear regulations, procedures and guidelines

at all levels – for example the RA provides comprehensive manuals

• f procedures, and in terms of procurement have clearly defined

guidelines, selection/award criteria, authorisation lines, etc

• On the other hand avoid unnecessary selection/award criteria
• On the other hand avoid unnecessary selection/award criteria

which you do not need – for example requiring technical specifications which are much higher than what is required or are not present in the market

• Plan the procurement process and allow appropriate timing – know

what you want to buy, carry out market research, ensure marshalling of resources towards the procurement process

Tips - How to avoid common mistakes in procurement

• Ensure that procurer is an intelligent customer, by for example

having access to technical expertise

• Ensure expertise in procurement processes – what process to

use, how to write tenders, adhering to legal provisions

• Ensure that there is proper management structure and

procedures, and internal controls within the beneficiary

• rganisation, and if there are risks address through mitigating

measures

• Ensure that there is proper supervision and monitoring at the

project/procurement level, particularly by the project leader

Tips - How to avoid common mistakes in procurement

• Carry out internal controls as soon as possible, preferably in an ex ante

manner – for example controls on procurement should be carried out immediately as soon as the process is finalised and surely before the payments are carried out

• As a customer know, understand and define needs

Name of your presentation

• As a customer know, understand and define needs
• Ensure the right management support. The conviction and buy in at the top
• f the organisation and their understanding of why and how to carry out the

procurement is imperative

• Ensure that market research is undertaken so that what is available and

trends in the market are known

Tips - How to avoid common mistakes in procurement

• The professional and ethical integrity of the procurement teams is

imperative and must be assured through careful nomination, norms and emphasis throughout the process

• Ensure integrity and fairness of the process, particularly by documenting,

signing and recording processes

• Use the right procurement procedure that enables the achievement of the

stated aims and objectives

• Ascertain that the procurement and or adjudication teams contain the

required skills, competences and expertise required to achieved the desired

• aims. There should be a balance of skills, which must include expertise in the

general and specific area of the procurement, finance, negotiation, procurement and legislation

Tips - How to avoid common mistakes in procurement

• Define and outline in advance the process and procedure,

and communicate it to all stakeholders so that everybody is cognizant of roles and responsibilities

• Ensure that the decision making processes of the
• Ensure that the decision making processes of the

procurement and adjudication teams are clear, communicated and understood by all

• Define a priori the governance process, including a

multilayered organisation designed to ensure separation of duties and appropriate reporting procedures

Tips - How to avoid common mistakes in procurement

• Define the responsibilities and roles during the negotiating processes and

meetings, and assign them and ensure that they are adhered to. The chairperson at each meeting should be assigned the authority to stop anyone who oversteps assigned boundaries, and ensures that the discussion adheres to the terms of reference

• Prepare a code of ethics to which all those on the procurement teams have
• Prepare a code of ethics to which all those on the procurement teams have

to sign and adhere strictly. The code may included termination clauses in cases of serious breach

• With the cognizance that integrity and trust in the procurement team is

imperative, attention to small things that collectively ensure the building of trust must be ensured. These include the provision of information in written form, documenting and communicating the whole process, provision of all important documentation including the code of ethics to suppliers.

Thank you for your attention attention

• !""

"##$% &#' ())*##+#