10/04/200810/04/2008 11

TWG of ESF CommitteeTWG of ESF Committee10 April 200810 April 2008

Franck SébertFranck SébertHead of unit DG EMPL/I/1Head of unit DG EMPL/I/1

Relations with Control AuthoritiesRelations with Control Authorities

Action plan to strengthenAction plan to strengthenthe Commission’s supervisorythe Commission’s supervisory

role of Structural actionsrole of Structural actions

TWG of ESF Committee - 10/04/2008TWG of ESF Committee - 10/04/2008 22

ECA 2006 Annual ReportECA 2006 Annual Report

Control systems in Member States Control systems in Member States generally ineffective or moderately generally ineffective or moderately effectiveeffective

Commission maintains only moderately Commission maintains only moderately effective supervisioneffective supervision

Reimbursement of expenditure subject to Reimbursement of expenditure subject to material error – at least 12%material error – at least 12%

TWG of ESF Committee - 10/04/2008TWG of ESF Committee - 10/04/2008 33

Commission analysisCommission analysis

Measures taken over last 5 years to improve Measures taken over last 5 years to improve supervisionsupervision

– Increased audit activityIncreased audit activity– Remedial action plans in MMSSRemedial action plans in MMSS– Suspensions and correctionsSuspensions and corrections

But But ── no measurable impact on reliability of no measurable impact on reliability of certified expenditurecertified expenditure

TWG of ESF Committee - 10/04/2008TWG of ESF Committee - 10/04/2008 44

Transition between programme Transition between programme periodsperiods

Strengthened control arrangements for 2007-2013:Strengthened control arrangements for 2007-2013:– Compliance assessment procedureCompliance assessment procedure– Approval of audit strategiesApproval of audit strategies– Annual audit opinionsAnnual audit opinions– More detailed regulatory requirementsMore detailed regulatory requirements– Better guidanceBetter guidance

But But ── impact on reimbursements not significant impact on reimbursements not significant before 2009before 2009

TWG of ESF Committee - 10/04/2008TWG of ESF Committee - 10/04/2008 55

Basis of the Action PlanBasis of the Action Plan

Joint REGIO / EMPL actions to strengthen Joint REGIO / EMPL actions to strengthen impact of audits in October 2007impact of audits in October 2007

Discharge hearing of 18 December 2007Discharge hearing of 18 December 2007

Preparation to 2Preparation to 2ndnd discharge hearing of 25 discharge hearing of 25 February 2008February 2008

TWG of ESF Committee - 10/04/2008TWG of ESF Committee - 10/04/2008 66

Objectives of Action PlanObjectives of Action Plan

Political commitment to strengthen Political commitment to strengthen Commission supervision of structural Commission supervision of structural actionsactionsSingle framework for all current and new Single framework for all current and new actions to achieve improved supervisionactions to achieve improved supervisionSpecific outputs / indicators / deadlinesSpecific outputs / indicators / deadlinesFormal monitoring and reportingFormal monitoring and reporting

TWG of ESF Committee - 10/04/2008TWG of ESF Committee - 10/04/2008 77

Link to recommendations of Link to recommendations of ECA ECA (1)(1)

11 recommendations identified11 recommendations identifiedMost important:Most important:

– Complete, transparent, reliable information on Complete, transparent, reliable information on financial corrections and recoveriesfinancial corrections and recoveries

– Improve effectiveness of Commission’s Improve effectiveness of Commission’s supervisory controlssupervisory controls

– Ensure sound closure procedures for 2000-Ensure sound closure procedures for 2000-20062006

TWG of ESF Committee - 10/04/2008TWG of ESF Committee - 10/04/2008 88

Link to recommendations of Link to recommendations of ECA ECA (2)(2)

– Focus on improving first level controlsFocus on improving first level controls– Encourage use of simplification for 2007-2013 Encourage use of simplification for 2007-2013

periodperiod– Increase impact of audit activity by better use Increase impact of audit activity by better use

of suspensions and correctionsof suspensions and corrections

TWG of ESF Committee - 10/04/2008TWG of ESF Committee - 10/04/2008 99

Action PlanAction Plan

Communication adoptedCommunication adopted19 February 200819 February 2008

10 components – 37 actions10 components – 37 actions

Mid-term report 31 October 2008Mid-term report 31 October 2008

Final report 31 January 2009Final report 31 January 2009

TWG of ESF Committee - 10/04/2008TWG of ESF Committee - 10/04/2008 1010

Strengthening Commission's Strengthening Commission's supervisory rolesupervisory role

Action plan time line Action plan time line (number of actions to be implemented)(number of actions to be implemented)

34

1

9

4

0

2

4

6

8

10

12

14

16

19/02/2008 March 2008 April 2008 May 2008 June 2008 September2008

December2008

January2009

February2009

Rep

ort

on

31

/01/

09

Rep

ort

on

31

/10/

2008

5

1517 actions

24 actions

TWG of ESF Committee - 10/04/2008TWG of ESF Committee - 10/04/2008 1111

Component 1 – Joint audit strategy Component 1 – Joint audit strategy 2000-20062000-2006

Targeted audits on high risk bodiesTargeted audits on high risk bodies

Completion of follow-up of 27 current Completion of follow-up of 27 current remedial actions plansremedial actions plans

Conclude 20 suspension and correction Conclude 20 suspension and correction procedures 2000/2006 and 34 correction procedures 2000/2006 and 34 correction procedures 1994/1999procedures 1994/1999

Follow-up individual 2006 DAS casesFollow-up individual 2006 DAS cases

TWG of ESF Committee - 10/04/2008TWG of ESF Committee - 10/04/2008 1212

Component 2 – IICF Action PlanComponent 2 – IICF Action Plan

Action 9 – co-ordination and sharing of audit Action 9 – co-ordination and sharing of audit resultsresultsAction 10 – estimating cost of controlsAction 10 – estimating cost of controlsAction 11n – verifying reliability of national Action 11n – verifying reliability of national reporting on correctionsreporting on correctionsAction 14b – guidance on controlsAction 14b – guidance on controlsAction 15 – promotion of contracts of Action 15 – promotion of contracts of confidenceconfidenceAction 16 – co-ordination of audit standardsAction 16 – co-ordination of audit standards

TWG of ESF Committee - 10/04/2008TWG of ESF Committee - 10/04/2008 1313

Component 3 – Preventive actions for Component 3 – Preventive actions for closure 2000-2006closure 2000-2006

Completion of audit enquiry on winding-up Completion of audit enquiry on winding-up bodiesbodies

Finalise internal procedure for closureFinalise internal procedure for closure

Raise awareness of MMSS on closure Raise awareness of MMSS on closure guidelinesguidelines

TWG of ESF Committee - 10/04/2008TWG of ESF Committee - 10/04/2008 1414

Component 4 – Preventive actions Component 4 – Preventive actions 2007-20132007-2013

Review of compliance assessment reports Review of compliance assessment reports and opinionsand opinions

Review of national audit strategiesReview of national audit strategies

Actions on simplification – partial Actions on simplification – partial closure/use of flat rates for overheadsclosure/use of flat rates for overheads

Clarification on eligibility issuesClarification on eligibility issues

TWG of ESF Committee - 10/04/2008TWG of ESF Committee - 10/04/2008 1515

Component 5 – Primary controlsComponent 5 – Primary controls

Seminar for managing authorities and Seminar for managing authorities and certifying authoritiescertifying authorities

Update guidance notes on primary Update guidance notes on primary controls and certification functioncontrols and certification function

Provision of self-assessment tool for Provision of self-assessment tool for managing authoritiesmanaging authorities

TWG of ESF Committee - 10/04/2008TWG of ESF Committee - 10/04/2008 1616

Component 6 – Reporting on Component 6 – Reporting on financial corrections by Member financial corrections by Member

StatesStatesFollow-up on data reported by deadlineFollow-up on data reported by deadline

On the spot verifications of a sample of On the spot verifications of a sample of Member StatesMember States

TWG of ESF Committee - 10/04/2008TWG of ESF Committee - 10/04/2008 1717

Component 7 – Reporting by Component 7 – Reporting by CommissionCommission

Improvements in systems for reporting on Improvements in systems for reporting on follow-up of audit recommendationsfollow-up of audit recommendations

Improvements in systems for reporting on Improvements in systems for reporting on corrections resulting from Commission corrections resulting from Commission auditsaudits

TWG of ESF Committee - 10/04/2008TWG of ESF Committee - 10/04/2008 1818

Component 8 – Increase impact of Component 8 – Increase impact of Commission audit activityCommission audit activity

Launch suspension procedure more Launch suspension procedure more quickly when serious deficiencies detectedquickly when serious deficiencies detected

Speed-up procedures for adopting Speed-up procedures for adopting Commission decisions on suspensions Commission decisions on suspensions and correctionsand corrections

TWG of ESF Committee - 10/04/2008TWG of ESF Committee - 10/04/2008 1919

Component 9 – Annual activity Component 9 – Annual activity reportreport

Actions to improve quality of reporting on Actions to improve quality of reporting on assessment of MMSS systemsassessment of MMSS systems

Analysis of summaries and follow-up Analysis of summaries and follow-up action in cases of non-complianceaction in cases of non-compliance

Component 10 – Annual Component 10 – Annual summariessummaries

TWG of ESF Committee - 10/04/2008TWG of ESF Committee - 10/04/2008 2020

To sum up : To sum up : Commission action plan is about Commission action plan is about

squeezing the residual risk on programmes squeezing the residual risk on programmes by time of closureby time of closure

Improved supervisory and control systems

Decreased error rate

Increased recovery rate

Improved information and strengthened correction mechanisms

Err

or r

ate

To close the gap and reduce the risk to a tolerable level!