Financial management of the - Presentation

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Nov 10, 2013 (4 years and 4 days ago)

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FINANCIAL MANAGEMENT

OF

THE

EUROPEAN
AGRICULTURAL
GUARANTEE FUND (EAGF)



Owen Jones DG AGRI I.4


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Directorate
-
General for Agriculture and
Rural Development (DG AGRI)




AGRI I.1

Budget management



AGRI I.4
-

Financial management of EAGF




AGRI F.2

Financial management of EAFRD



AGRI J

Audit of agriculture expenditure



(clearance of accounts, X
-
tables, debtors’


ledger, accreditation, controls)

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Council Regulation (EC) No
1290/2005



Commission Regulation (EC) No 883/2006 of 21/06/2006:


keeping of accounts by the paying agencies, declarations of
expenditure and revenue and the conditions for reimbursing
expenditure under EAGF and the EAFRD;


Commission Regulation (EC) No 884/2006 of 21/06/2006:


financing of EAGF intervention and accounting of public
storage operations by the paying agencies of the Member
States;


Commission Regulation (EC) No 885/2006 of 21/06/2006:


as regards the accreditation of paying agencies and other
bodies and the clearance of accounts of the EAGF and the
EAFRD.

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Export refunds


Intervention


Direct payments


Sugar restructuring Fund


Promotion of Agricultural Products



… and direct management (Commission
responsibility)


Shared management

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Monthly payments (for payments effected minus
revenue received by the paying agencies) to the
Member States;



Ensures budgetary discipline (respect of budget
appropriations, payment deadlines, financial
ceilings);



Check management and control systems in the
Member States (e.g. missions in the Member
States, clearance of accounts procedure)
(Directorate J).


Responsibilities of the
Commission

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Budget management tasks



Prepare and maintain budget nomenclature;


Control ceilings, deadlines;


Eligibility control of expenditure;


Importation of MS declarations;


Correction of expenditure;


Reimbursement of monthly payments to the MS;


Accounting for monthly payments;


Follow
-
up of consumption of credits;


Management of payment reductions due to non
-
respect of payment deadlines;


The Early Warning System (forecasts).

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Budget and detailed budget
nomenclature

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The detailed budget nomenclature



Is a more detailed specification of articles and items
defined in the “General Budget” (there are around
140 items and around 2000 sub
-
items)
;



Is the compulsory level of declaration of EAGF
expenditure in the monthly detailed declaration
table (T 104) that has to be sent from the Member
States to the Commission (Reg.883/06, Art.4 2(a)).

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Why a detailed nomenclature?



Marketing/calendar year



Product/Measure



Deadline for the payments



Financial ceiling of the expenditure

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The detailed budget nomenclature


The detailed nomenclature changes each year
because it has to be adapted to the
nomenclature of the EU Budget;


The detailed nomenclature changes also
throughout the year (e.g. budget amendments,
new measures);


After the start of the exercise, amendments are
made in form of revisions & addenda;


Changes are presented in the monthly
“Agricultural funds committee” and on the
website “CIRCA”;


All languages

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Budgetary discipline

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FINANCIAL and BUDGETARY DISCIPLINE



Respect of the global ceiling FEAGA
-

Multiannual
Financial Perspectives
;


Possible adjustment of direct aids (Art. 11 (1)
Council Regulation (EC) No 73/093) (Financial
Discipline) when risk of exceeding the global
ceiling;


If the budget is exceeded then payments to
Member States are reduced proportionally for the
month in question and corrected next year to
ensure that all Member States get the same global
financing rate;

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BUDGETARY DISCIPLINE



The Early Warning System is a forecast system
of the Commission to ensure, that the budget
ceiling will not be exceeded. It is based on
monthly expenditure profiles;



Monthly early warning reports are presented in
the Committee of Agricultural Funds and to the
Budget Authority (
= European Parliament and
Council AGRIFIN Working Group) on a monthly
basis.


Budgetary Discipline



Reductions

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Reduction of payments by the Commission

Art. 17 Council Regulation (EC) No 1290/2005





Payment deadlines in EU legislation must be respected
in order to respect the budgetary discipline and treat
beneficiaries equally




A Working document is distributed to the Member States
in the EAGF Committees indicating the earliest and
latest payment deadlines per sub
-
item




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Reduction of payments by the Commission

Art. 17 Council Regulation (EC) No 1290/2005





With the exception of direct payments, if expenditure
effected after the (payment) deadlines is equal to 5% or
less of the expenditure paid in time: No reduction;



Above the 5 % threshold, all further expenditure effected
shall be reduced for a delay of:



Up to one month:

by 10%,



Up to two months:

by 25%,



Up to three months:

by 45%,



Up to four months:

by 70%,



For a delay of 5 months or more:

by 100%.

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Reduction of payments by the Commission

Art. 17 Council Regulation (EC) No 1290/2005

Procedure for reductions
:


Article 17 (1)

Reduction due to late payments

Other reasons for non
-
eligibility

The MS is asked to submit explanations and
the Commission may subsequently reduce the
monthly payments


Article 17 (2)

Overrun of financial ceilings

The MS is informed about the Commission’s
intention and has the opportunity to submit its
comments before reduction

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Recoveries

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Recoveries


Irregularities


Administrative error

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Information to be transmitted
to the Commission

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Transmission of data by the
Member States



i)
declaration of expenditure = payment request ;


to DG AGRI I.4



ii)

forecasts of expenditure;






to DG AGRI I.4


iii)


annual accounts of the accredited paying
agencies




-

to DG AGRI J.5


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Transmission of data by the
Member States





The
global expenditure (Declaration of
the 3
rd

day);




Declaration of expenditure (Declaration
of the 10
th

day):
Transmitted by the 10
th

day of each

month;



Set of documents (T104 +…):

Transmitted by the
20
th

day
of each
month. At sub
-
item level including
forecasts


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Set of documents (T101, 103, 104…)



Table 104 : monthly detailed declaration of
expenditure and revenue for each paying
agency, including forecasts;



Table 103 : a summary of table 104 for all the
Member State’s paying agencies;



Table 101 : difference between the monthly
expenditure declaration (= Fax of the 10th) and
table 104;




e
-
FAUDIT tables : accounts relating to public
storage operations.

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Public Storage e
-
FAUDIT


An IT application, using Internet
facilities, which enables Member
States to calculate in a uniform
manner the amounts reimbursed for
public intervention storage operations;


A new IT system is being developed
with your help.

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Based on
Declaration of the 10
th

;


Cover expenditure less assigned revenue;


Without prejudice to future corrections;


Paid on the 3
rd

working day of the month
following the declaration;


Funds committee consulted;


Document made available beforehand.

Payment decision by the
Commission

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Calculation of the monthly payments

Monthly payments concerning the payments made by

Member states in the month ‘n’ (September)


Month ‘n’ (September


)



Month ‘n +1’ (

October

)



Month ‘n+2’ (

November


)







10th



20th






3

rd


working day
























10

th


of the

month

declaration


:

expenditure

‘n’







Monthly


detailed


declaration


of

expenditure ‘n’







Monthly payment

up to the 3

rd


wor


king



day

























EA

GF

Committee
:

consultation


of Member


States





Decision

of the


Commission


concerning

the


amounts

of the



monthly payment



to transfer















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Forecasts

With the monthly detailed declaration (T104) MS also have
to communicate the forecasts for the following months.

The declaration of forecasts varies from item to item.


(A) = Forecasts have to be made until the end of the
exercise;

(B) = Forecasts have to be made for a three
-
month period;

(C) = Forecasts have to be made:


at the beginning of the exercise for a three
-
month
period,


from the declaration for the expenditure of February
until the end of the exercise.

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Why do good forecasts matter?


Reduces

the

risk

of

the Commission requesting
excessive new funds in

future budget proposal;


Budget authority: Improves the credibility of the
Commission and the Member State;


Commission can reallocate appropriations
without having

to call on for extra own
resources.


*Compulsory expenditure is reimbursed whatever
the forecast;




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Financial management of the
FEAGA


Shared Management


Conform to legislation


Consistent with sound budgetary management


A minimum of discipline and procedure to cope
efficiently with all the transactions and
exceptions.

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Financial management of the
FEAGA


Workshop




Shared Management



Please give us your views

Workshop
-

Q1


Q.1. Concerning the expenditure declarations
(10, T104, … declaration), can you suggest
improvements concerning the form of these
tables and the way to


communicate these
expenditure statements to the Commission?


Do
you have remarks on how any subsequent
correspondence with the Commission is
conducted regarding the eligibility of the
declared expenditure
.


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Workshop


Q2


Q.2. Concerning the EAGF/EAFRD forecasts,
can you explain how they are calculated? What
difficulties have you encountered in developing
these expenditure forecasts?


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