Commission Implementing Regulation (EU) No 908/2014 of 6 August 2014 laying down rules for the application of Regulation (EU) No 1306/2013 of the European Parliament and of the Council with regard to paying agencies and other bodies, financial management, clearance of accounts, rules on checks, securities and transparency

CHAPTER I

PAYING AGENCIES AND OTHER BODIES

Article 1

Procedure for the accreditation of paying agencies

Member States shall designate an authority at ministerial level responsible for:

(a) the issuing, reviewing and withdrawing of accreditation of paying agencies;

(b) carrying out the tasks assigned to the competent authority under this Chapter.

The examination (pre-accreditation review) to be carried out by the audit body shall cover, in particular:

(a) the procedures and systems in place for the authorisation and execution of payments;

(b) the division of duties and the adequacy of internal and external control in respect of transactions financed by the European Agricultural Guarantee Fund (EAGF) and the European Agricultural Fund for Rural Development (EAFRD), hereinafter together referred to as ‘the Funds’;

(c) the extent to which the procedures and systems put in place are apt to safeguard the Union budget including risk-based anti-fraud measures;

(d) the security of information systems;

(e) the maintenance of accounting records.

The audit body shall prepare a report detailing the audit work carried out, the results of that work and its assessment as to whether the paying agency complies with the accreditation criteria. The report shall be provided to the competent authority which shall then issue the accreditation act where it is satisfied that the paying agency complies with the accreditation criteria.

Pending the implementation of any necessary changes in order to fulfil such specific conditions, accreditation may be granted provisionally for a period to be determined taking into account the severity of the problems identified, which shall not exceed 12 months. In duly justified cases, the Commission may, upon request of the Member State concerned, grant an extension of that period.

The information provided for in point (a) of the first subparagraph of Article 102(1) of Regulation (EU) No 1306/2013 shall be communicated immediately after the paying agency is first accredited and in any case before any expenditure effected by it is charged to the Funds. That information shall be accompanied by declarations and documents concerning:

(a) the responsibilities vested in the paying agency;

(b) the allocation of responsibilities between the departments of the paying agency;

(c) the relationship of the paying agency with other bodies, public or private, which are responsible for implementing any measures under which the paying agency charges expenditure to the Funds;

(d) the procedures by which claims by beneficiaries are received, verified, and validated, and by which expenditure is authorised, paid and accounted for;

(e) the provisions concerning the security of information systems;

(f) the report of the pre-accreditation review carried out by the audit body referred to in paragraph 3.

Article 2

Review of accreditation

Every three years, the competent authority shall report in writing to the Commission on its supervision of paying agencies and monitoring of their activities. The report shall include a review of the paying agencies’ continuous compliance with the accreditation criteria, together with a summary of the actions taken to remedy the deficiencies. The competent authority shall confirm whether a paying agency for which it is responsible continues to comply with the accreditation criteria.

Article 3

Management declaration

The management declaration shall be in the form set out in Annex I to this Regulation and may be qualified by reservations quantifying the potential financial impact. In the event that reservations are expressed, the declaration shall include a remedial action plan and a precise a time frame for its implementation.

Article 4

Coordinating body

The coordinating body referred to in Article 7(4) of Regulation (EU) No 1306/2013 shall act as the Commission’s sole interlocutor for the Member State concerned for all questions relating to the Funds as regards:

(a) the dissemination of information and guidelines relating to the functions and operations of the paying agencies to those paying agencies and to bodies responsible for the implementation of such guidelines, as well as the promotion of their harmonised application;

(b) the communication to the Commission of the information referred to in Articles 7 and 102 of Regulation (EU) No 1306/2013;

(c) the availability to the Commission of a full record of all accounting information required for statistical and control purposes.

Article 5

Certification

That opinion shall be based on the audit work to be carried out in accordance with Articles 6 and 7 of this Regulation.

The certification body shall draw up a report of its findings. The report shall cover the functions delegated. The report shall state whether, for the period covered by the report:

(a) the paying agency complied with the accreditation criteria;

(b) the paying agency’s procedures were such as to give reasonable assurance that the expenditure charged to the Funds was effected in compliance with Union rules, thus ensuring that the underlying transactions were legal and regular, and that recommendations for improvements, if any, have been followed up;

(c) the annual accounts referred to in Article 29 of this Regulation were kept in accordance with the books and records of the paying agency;

(d) the statements of expenditure and of intervention operations were a materially true, complete and accurate record of the operations charged to the Funds;

(e) the financial interests of the Union were properly protected as regards advances paid, guarantees obtained, intervention stocks and amounts to be collected.

The report shall include information on the number and qualifications of staff conducting the audit, the work done, the number of transactions examined, the level of materiality and confidence obtained, any weaknesses found and recommendations made for improvement and the operations of both the certification body and other audit bodies, internal and external to the paying agency, from which all or part of the certification body’s assurance on the matters reported was gained.

Article 6

Audit principles

The Commission shall establish guidelines which contain, in particular:

(a) further clarification and guidance in respect of the certification audit to be performed;

(b) the determination of the reasonable level of audit assurance to be achieved from audit testing.

Article 7

Audit methods

CHAPTER II

FINANCIAL MANAGEMENT OF THE FUNDS

SECTION 1

General provisions

Article 8

Paying agencies’ accounts

As regards the EAFRD, each paying agency designated for a rural development programme shall keep accounts enabling all the operations for each programme and each measure to be identified. Such accounts shall include in particular:

(a) the amount of public expenditure and the amount of the Union contribution paid for each operation;

(b) the amounts to be recovered from beneficiaries for irregularities or negligence found;

(c) the amounts recovered, with an indication of the original operation.

SECTION 2

EAGF accounts

Article 9

Provision of information by Member States

Member States shall collect and keep available for the Commission information on total expenditure effected and assigned revenue received each week as follows:

(a) by the third working day of each week at the latest, information on total expenditure effected and assigned revenue received from the beginning of the month until the end of the preceding week;

(b) by the third working day of the month at the latest, where the week runs over two months, information on total expenditure effected and assigned revenue received during the preceding month.

Article 10

Communication of information by Member States

In accordance with points (c)(i) and (ii) of the first subparagraph of Article 102(1) of Regulation (EU) No 1306/2013, Member States shall send to the Commission, electronically, the following information and documents, subject to Articles 11 and 12 of this Regulation:

(a) by the third working day of each month at the latest, information on total expenditure effected and assigned revenue received during the preceding month, on the basis of the model made available by the Commission to Member States through information systems, and any information explaining any substantial difference between the estimates drawn up in accordance with paragraph 2(a)(iii) of this Article and expenditure effected and assigned revenue received;

(b) by the 12th day of each month at the latest, the declaration of expenditure referred to in Article 18(3) of Regulation (EU) No 1306/2013. However, the communication on expenditure effected and assigned revenue received between 1 and 15 October shall be sent by 27 October.

The declaration of expenditure referred to in paragraph 1(b) shall consist of:

(a) a statement, drawn up by each paying agency on the basis of the model made available by the Commission to Member States through information systems, broken down according to the nomenclature of the Union budget and by type of expenditure and revenue, based on a detailed nomenclature made available to the Member States covering: (i) the expenditure effected and assigned revenue received during the preceding month; (ii) total expenditure effected and assigned revenue received from the beginning of the financial year until the end of the preceding month; (iii) estimates of expenditure and assigned revenue, covering, as appropriate: — the current month and the following two months only, — the current month, the following two months and to the end of the financial year; (iv) additional data, if needed;

(b) a summary, made by the Member State concerned on the basis of the model made available by the Commission to Member States through information systems, of the data referred to in point (a), for all that Member State’s paying agencies;

(c) the accounts evidencing expenditure and revenue relating to public intervention, as referred to in Article 19(2).

Article 11

General rules on the declaration of expenditure and on assigned revenue

That expenditure and revenue shall be entered in the accounts of the EAGF budget in respect of financial year N.

However:

(a) expenditure which may be paid prior to the implementation of the provision permitting it to be wholly or partially borne by the EAGF may be declared only: — in respect of the month during which the provision in question was implemented, or — in respect of the month following implementation of that provision;

(b) assigned revenue which the Member State owes the Commission shall be declared in respect of the month during which the time limit for payment of the corresponding amounts, laid down in Union legislation, expires;

(c) corrections decided by the Commission under the clearance of accounts and the conformity clearance shall be deducted from or added to the monthly payments referred to, as appropriate, in Article 33(2) or Article 34(8) directly by the Commission.  However, Member States shall include the amounts corresponding to those corrections in the declaration drawn up for the month for which the corrections are made.

Where corrections to assigned revenue lead, at paying agency level, to the declaration of negative revenue assigned for a budget line, surplus corrections shall be carried over to the following month. They shall, where appropriate, be settled when the accounts for the year concerned are cleared.

Where payments due under the EAGF are encumbered by claims, they shall be deemed to have been effected in their entirety for the purpose of applying paragraph 1:

(a) on the date of the payment of the sum due to the beneficiary, if the claim is less than the expenditure settled;

(b) on the date of set-off, if the expenditure is less than or equal to the claim.

Article 12

Special rules on declarations of expenditure relating to public storage

However:

(a) in the case of operations carried out in the course of September, the values and amounts shall be entered in the accounts by paying agencies by 15 October at the latest;

(b) in the case of the overall depreciation amounts referred to in point (e) of Article 3(1) of Delegated Regulation (EU) No 906/2014, the amounts shall be entered in the accounts on the date laid down in the decision providing for them.

Article 13

Payment decision by the Commission

Article 14

Making resources available to Member States

When the payments to be made by the Commission lead to a negative amount for a Member State, the surplus deductions shall be carried over to the following months.

Article 15

Communication under public intervention

Paying agencies shall transmit to the Commission:

(a) at the Commission’s request, the documents and information referred to in Article 3(7) of Delegated Regulation (EU) No 907/2014 and the additional national administrative provisions adopted for the application and management of intervention measures;

(b) by the day provided for in point (b) of Article 10(1) of this Regulation, the information on public storage, on the basis of the models made available by the Commission to Member States through information systems.

Article 16

Content of the public storage accounts to be kept by paying agencies

The stock accounts provided for in point (a) of the first subparagraph of Article 3(3) of Delegated Regulation (EU) No 907/2014 shall contain the following categories of elements, shown separately:

(a) the quantities of products recorded on entry into and removal from storage, with or without physical movement;

(b) the quantities used for free distribution to the most deprived persons under the Fund for European Aid to the Most Deprived, and accounted for under Article 4(3) of Delegated Regulation (EU) No 906/2014, distinguishing those which are the subject of a transfer to another Member State;

(c) quantities taken as samples, distinguishing samples taken by purchasers;

(d) the quantities which, after checking by visual examination in the context of the annual stock-taking or during the inspection after taking into intervention, may no longer be repackaged and are the subject of direct sales;

(e) quantities missing, for identifiable or unidentifiable reasons, including those corresponding to the legal tolerance limits;

(f) quantities which have deteriorated;

(g) surplus quantities;

(h) missing quantities exceeding the tolerance limits;

(i) quantities which have entered into storage and been found not to meet the requirements and for which taking-over has therefore been refused;

(j) net quantities in storage at the end of each month or accounting year, which are carried forward to the next month or accounting year.

The financial accounts provided for in point (a) of the first subparagraph of Article 3(3) of Delegated Regulation (EU) No 907/2014 shall contain:

(a) the value of the quantities referred to in point (a) of paragraph 1 of this Article, showing separately the value of the quantities bought in and of the quantities sold;

(b) the book value of the quantities used or taken into account under the free distribution arrangements referred to in point (b) of paragraph 1 of this Article;

(c) the financing costs referred to in point (a) of Article 3(1) of Delegated Regulation (EU) No 906/2014;

(d) expenditure on physical operations as referred to in points (b) and (c) of Article 3(1) of Delegated Regulation (EU) No 906/2014;

(e) amounts resulting from depreciation as referred to in point (e) of Article 3(1) of Delegated Regulation (EU) No 906/2014;

(f) the amounts collected or recovered from sellers, purchasers and storers, other than those referred to in Article 20(2) of this Regulation;

(g) the amount from direct sales carried out after the annual stock-taking or following checks after products are taken into intervention storage;

(h) losses and gains on removals of products, taking account of depreciation as referred to in point (e) of this paragraph;

(i) other debits and credits, in particular those corresponding to the quantities referred to in points (c) to (g) of paragraph 1 of this Article;

(j) the average book value, expressed per tonne or per hectolitre, as the case may be.

Article 17

Accounting related to public intervention

The records and calculations referred to in paragraph 1 shall be made subject to the application of the following rules:

(a) the removal costs relating to quantities for which quantitative losses or deterioration have been recorded, in accordance with the rules laid down in Annexes VI and VII to Delegated Regulation (EU) No 906/2014, shall be entered in the accounts only for the quantities actually sold and removed from storage;

(b) quantities recorded as missing on transfer between Member States shall not be deemed to have entered storage in the Member State of destination and shall not be covered by standard entry costs;

(c) the standard entry and removal costs fixed for transport and transfer shall be entered in the accounts if those costs are not considered, under the Union rules, to be an integral part of the transport costs;

(d) unless specific Union rules provide otherwise, amounts accruing from sales of products which have deteriorated and any other amounts received in this context shall not be entered in the EAGF account records;

(e) any surplus quantities recorded shall be entered in the accounts as a negative amount, in the missing quantities in the stock situation and movements. Those quantities shall be included when determining the quantities exceeding the tolerance limit;

(f) samples other than those taken by purchasers shall be entered in the accounts in accordance with point 2(a) of Annex VII to Delegated Regulation (EU) No 906/2014.

Article 18

Dates for entering expenditure and revenue and product movements in the accounts for public intervention

However, the following dates shall apply in the cases set out below:

(a) the date of receipt, in the case of amounts received or recovered, as referred to in points (f) and (g) of Article 16(2) of this Regulation;

(b) the date of actual payment of costs relating to physical operations, where such costs are not covered by standard amounts.

However, the following dates shall apply in the cases set out below:

(a) the date of taking-over of products by the paying agency, in accordance with Article 31(2) and Article 33 of Commission Regulation (EU) No 1272/2009 (²), for quantities entering public storage without any change in the place of storage;

(b) regarding missing or deteriorated and surplus quantities, the date of the finding as to the facts in the case of missing or deteriorated and surplus quantities;

(c) the date of actual removal from storage, in the case of direct sales of products remaining in storage which can no longer be repackaged after visual examination in the context of the annual stock-taking or during the inspection after taking into intervention;