Commission Delegated Regulation (EU) 2022/127 of 7 December 2021 supplementing Regulation (EU) 2021/2116 of the European Parliament and of the Council with rules on paying agencies and other bodies, financial management, clearance of accounts, securities and use of euro

The information regarding documentary evidence of the authorisation, accounting and payment of claims, performance reporting and handling of advances, securities and debts shall be available in the paying agency to ensure at all times a sufficiently detailed audit trail.

3. INFORMATION AND COMMUNICATION

(A) Communication

The paying agency shall adopt the necessary procedures to ensure that every change in the Union’s regulations, and in particular the rates of aid applicable, are recorded and the instructions, databases and checklists updated in good time.

(B) Information systems security

The information systems security shall be certified in accordance with International Standards Organisation 27001: Information Security management systems – Requirements (ISO).

Member States may certify, provided it is authorised by the Commission, the information systems security in accordance with other accepted standards if those standards guarantee a level of security at least equivalent to that provided by ISO 27001.

The first and second paragraphs shall not apply to paying agencies responsible for the management and control of a yearly expenditure not higher than EUR 400 million, if the Member State concerned has informed the Commission of its decision to apply one of the following standards instead:

• — International Standards Organisation 27002: Code of practice for Information Security controls (ISO);

• — Bundesamt für Sicherheit in der Informationstechnik: IT-Grundschutzhandbuch/IT Baseline Protection Manual (BSI);

• — Information Systems Audit and Control Association: Control objectives for Information and related Technology (COBIT).

4. MONITORING

(A) Ongoing monitoring via internal control activities

The internal control activities shall cover at least the following areas:

• (i) monitoring of the technical services and delegated bodies responsible for carrying out the controls and other functions to ensure a proper implementation of regulations, guidelines and procedures;

• (ii) initiating of system changes in order to improve control systems in general;

• (iii) reviewing claims and requests submitted to the paying agency as well as other information providing suspicion of irregularities;

• (iv) monitoring procedures to prevent and detect fraud and irregularity with particular regard to those areas of CAP expenditure under the paying agency’s competence which are exposed to a significant risk of fraud or other serious irregularities.

Ongoing monitoring shall be built into the normal, recurring operating activities of the paying agency. At all levels the daily operations and controls activities of the agency shall be monitored on an ongoing basis to ensure a sufficiently detailed audit trail.

(B) Separate evaluations via an internal audit service

The paying agency shall adopt procedures to comply with the following rules:

• (i) the internal audit service shall be independent of the paying agency’s other departments and shall report directly to the paying agency’s director;

• (ii) the internal audit service shall verify that procedures adopted by the agency are adequate to ensure that compliance with Union rules is verified and that the accounts are accurate, complete and timely. Verifications may be limited to selected measures and to samples of transactions provided that an audit plan ensures that all significant areas, including the departments responsible for authorisation, are covered over a period not exceeding 5 years;

• (iii) the internal audit service’s work shall be performed in accordance with internationally accepted standards, shall be recorded in working papers and shall result in reports and recommendations addressed to the agency’s top management.

ANNEX II

Accreditation criteria for coordinating bodies referred to in Article 2(3) as regards the compilation of the Annual Performance Report

1. INFORMATION AND COMMUNICATION

(A) Communication

The coordinating body shall adopt the necessary procedures to ensure that every change in the Union’s regulations are recorded and the instructions and databases updated in good time.

(B) Information systems security

The information systems security shall be certified in accordance with International Standards Organisation 27001: Information Security management systems – Requirements (ISO).

Member States may certify, provided it is authorised by the Commission, the information systems security in accordance with other accepted standards if those standards guarantee a level of security at least equivalent to that provided by ISO 27001. When a paying agency acts as a coordinating body, its certification fulfils this condition.

ANNEX III

Obligations of the paying agencies referred to in Article 3(1)

I. OBLIGATIONS OF THE PAYING AGENCIES

A. Checks

1. Frequency and representativeness

Each storage point shall be inspected at least once every year in accordance with the rules set out in part II, to ascertain in particular:

• (a) the procedure for collecting information on public storage;

• (b) whether the accounting data held on the spot by the storer tallies with the information sent to the paying agency;

• (c) physical presence shall be established by a sufficiently representative physical inspection, covering at least the percentages set out in part II and making it possible to conclude that the entire quantities listed in the stock accounts are actually present.

• (d) checks on quality shall comprise visual, olfactory and/or organoleptic checks and, if there are any doubts, in-depth analyses.

2. Additional checks

If an anomaly is detected during the physical inspection, a further percentage of the quantities in intervention storage shall be inspected using the same method. If necessary, inspection may extend to weighing all the products in the lot or store being inspected.

B. Inspection reports

• 1.The internal inspection body of the paying agency or the body authorised by the latter shall draw up a report on each of the checks or physical inspections carried out.

• 2.The report shall contain at least the following information:

• (a) the name of the storer, the address of the store visited and the description of the lots inspected;

• (b) the date and time when the inspection began and ended;

• (c) the place where the inspection took place and a description of the conditions of storage, packaging and accessibility;

• (d) the full identity of the persons conducting the inspection, their status and the terms of their authorisation;

• (e) the inspection measures undertaken and procedures used to establish volume, such as measuring methods, calculations, interim and final results, and the conclusions drawn;

• (f) for each lot or quality stored, the quantity in the paying agency’s books, the quantity in the store’s books and any discrepancies between the two sets of books;

• (g) for each lot or quality physically inspected, the information referred to in point (f) and the quantity verified on the spot and any discrepancies, the lot or quality number, the pallets, boxes, silos, vats or other receptacles involved and the weight (both net and gross if appropriate) or volume;

• (h) the statements made by the storer where there are discrepancies or differences;

• (i) the place, date and signature of the person drawing up the report and of the storer or representative;

• (j) any extended inspection conducted in the case of anomalies, specifying the percentage of the stored quantities covered by the extended inspection, discrepancies found and explanations given.

• 3.The reports shall be sent immediately to the head of the department responsible for keeping the accounts of the paying agency.

• Immediately after receipt of the report, the paying agency’s accounts shall be corrected in the light of the discrepancies and differences detected.

• 4.The reports shall be available to Commission staff and persons authorised by the Commission.

• 5.A summary document shall be drawn up by the paying agency listing:

• (a) the checks carried out, clearly indicating which are physical inspections (inventory checks);

• (b) the quantities checked;

• (c) the anomalies detected in relation to the monthly and annual statements, and the reasons for those anomalies. The quantities checked and the anomalies detected shall be indicated for each product concerned, in terms of weight or volume and as a percentage of the total quantities held. This summary document shall list separately the checks to verify the quality of the products stored. It shall be sent to the Commission at the same time as the annual accounts referred to in Article 9(3), first subparagraph, point (a), of Regulation (EU) 2021/2116.

II.   PHYSICAL INSPECTION PROCEDURE BY SECTOR OF THE CAP FOR THE CHECKS PROVIDED FOR IN PART I

A. Butter

• 1.The sample of the lots to be checked shall represent at least 5 % of the total quantity in public storage. The lots to be checked shall be selected prior to the visit to the store on the basis of the paying agency’s accounting data, but the storer shall not be informed.

• 2.The presence of the lots selected and their composition shall be verified on the spot by:

• (a) identifying the control numbers of the lots and boxes on the basis of purchase or entry notes;

• (b) weighing the pallets (one in 10) and the boxes (one per pallet);

• (c) visually checking the contents of a box (one in five pallets);

• (d) checking the condition of the packaging.

• 3.A description of the lots physically inspected and any shortcomings noted shall be included in the inspection report.

B. Skimmed-milk powder

• 1.The sample of the lots to be checked shall represent at least 5 % of the quantity in public storage. The lots to be checked shall be selected prior to the visit to the store on the basis of the paying agency’s accounting data, but the storer shall not be informed.

• 2.The presence of the lots selected and their composition shall be verified on the spot by:

• (a) identifying the control numbers of the lots and bags on the basis of purchase or entry notes;

• (b) weighing the pallets (one in 10) and bags (one in 10);

• (c) visually checking the contents of a bag (one in five pallets);

• (d) checking the condition of the packaging.

• 3.A description of the lots physically inspected and any shortcomings noted shall be included in the inspection report.

C. Cereals and rice

1. Physical inspection procedure

The inspection shall be carried out as follows:

• (a) Selection of bins or storerooms to be checked, representing at least 5 % of the total quantity of cereals or rice in public storage. Selection shall be based on the paying agency’s stock records, but the storer shall not be informed.

• (b) Physical inspection:
• (i) verification of the presence of cereals or rice in the selected bins or storerooms,
• (ii) identification of the cereals or rice;
• (iii) inspection of storage conditions and check on the quality of the products stored in the conditions provided for in Commission Delegated Regulation (EU) 2016/1238 ([^E0009]);
• (iv) comparison of the place of storage and identity of the cereals or rice with the store’s records;
• (v) evaluation of the quantities stored by a method previously approved by the paying agency, a description of which shall be lodged at its head office.

2. Procedure where discrepancies are found

Some tolerance is permitted when verifying the volume.

The rules laid down in Annex IV, section II, shall thus apply where the weight of the products stored as recorded during the physical inspection differs from the book weight by 5 % or more for cereals and for rice in the case of storage in silos or on-floor storage.

Where cereals or rice are stored in a warehouse, the quantities weighed on entry into storage may be recorded instead of those resulting from a volume assessment if the latter does not provide an adequate degree of accuracy and provided the difference between the two figures is not excessive.

The paying agency shall make use of this option where justified by circumstances, on a case-by-case basis and on its own responsibility. It shall indicate that it has done so in its inspection report, based on the following indicative model:

CEREALS – STOCK INSPECTION

Product:	Storer: Store, silo: Cell number:	Date:
Lot	Quantity stated in stock accounts	Quantity stated in stock accounts

(a) Stocks in silo

Chamber No	Volume stated in specification m3 (A)	Free volume recorded m3 (B)	Volume of stored cereals m3 (A-B)	Specific gravity recorded kg/hl = 100	Weight of cereals or rice

Total (a): …

(b) Stocks in on-floor storage

	Storeroom No	Storeroom No	Storeroom No	Storeroom No	Storeroom No	Storeroom No
Area covered … Height …	…	…	…	…	…	…
Area covered … Height …	m2	…	m2	…	m2	…
Area covered … Height …	…	m3	…	m3	…	m3
Area covered … Height …	…	…	…	…	…
Area covered … Height …	… m		… m		… m
Corrections …	… m3	… m3	… m3	… m3	… m3	… m3
Volume …	… m3	… m3	… m3	… m3	… m3	… m3
Specific gravity …	… kg/hl	… kg/hl	… kg/hl	… kg/hl	… kg/hl	… kg/hl
Total weight	… tonnes	… tonnes	… tonnes	… tonnes	… tonnes	… tonnes

Total (b): …

Total weight in the store: …

Difference from book weight: …

In %: …

…, [date]

… (Stamp and signature)

Paying agency inspector:

D. Beef and veal

• 1. The sample of the lots to be checked shall represent at least 5 % of the total quantity in public storage. The lots to be checked shall be selected prior to the visit to the store on the basis of the paying agency’s accounting data, but the storer shall not be informed.

• 1. On-the-spot verification of the presence of the lots selected and of their composition. Verification shall comprise:
• (a) for bone-in meat:
• (i) identification of the lots and verification of the number of pieces;
• (ii) verification, for each type of cut and/or quality, of the weight of 20 % of the pieces;
• (iii) visual check on the condition of the packaging.
• (b) for boned meat:
• (i) identifying the lots and pallets and verifying the number of boxes;
• (ii) checking the weight of 10 % of the pallets or containers;
• (iii) checking the weight of 10 % of the boxes from each pallet weighed;
• (iv) visually checking the contents of the boxes and the condition of the packaging in each box. The pallets shall be chosen having regard to the different cuts in store.

• 1. A description of the lots physically inspected and any shortcomings noted shall be included in the inspection report.

ANNEX IV

Obligations and general principles relating to storers’ responsibilities, to be included in storage contracts concluded between paying agencies and storers referred to in Article 3(2)

I. GENERAL OBLIGATIONS OF STORERS

Storers shall be responsible for ensuring that the products covered by Union intervention measures are properly conserved. They shall bear the financial consequences of any failure to do so.

They shall keep available a plan of the warehouse and the measurements for each silo or storeroom at each storage point.

The cereals or rice shall be stored in such a way that their volume may be verified.

II.   QUALITY OF PRODUCTS

Where the quality of intervention products in storage deteriorates as a result of poor or inappropriate storage conditions, the losses shall be borne by the storer and entered in the public storage accounts as a loss resulting from deterioration of the product due to storage conditions.

III.   MISSING QUANTITIES

• 1.The storer shall be responsible for all discrepancies between the quantities in store and the details given in the stock statements sent to the paying agency.

• 2.Where the missing quantities exceed those allowed under the relevant tolerance limit(s), in accordance with Article 4, Annex III, part II, section C, point 2, and Annex V, or under sectoral agricultural legislation, the entire amount shall be charged to the storer as an unidentifiable loss. Storers contesting the missing quantities may require the product to be weighed or measured, in which case they shall bear the costs of the operation unless it is found that the quantities declared are actually present or the difference does not exceed the relevant tolerance limit(s), in which case the costs of weighing or measuring shall be charged to the paying agency.

• The tolerance limits set out in Annex III, part II, section C, point 2, shall apply without prejudice to the other tolerances referred to in the first paragraph of this point.

IV.   SUPPORTING DOCUMENTS AND MONTHLY AND ANNUAL DECLARATIONS

1. Supporting documents and monthly declarations

• (a) The documents relating to the entry, storage and removal of products used to draw up the annual accounts must be in the storer’s possession and contain at least the following information:
• (i) place of storage (with identification of the bin or vat where relevant);
• (ii) quantity carried over from the previous month;
• (iii) entries and removals by lot;
• (iv) stock at the end of the period.

These documents shall permit precise identification of the quantities in store at any time, and shall take account of purchases and sales that have been agreed but for which the corresponding entries or removals of stock have not yet occurred.

• (b) The documents relating to the entry, storage and removal of products shall be sent by the storer to the paying agency at least once a month, in support of a summary monthly stock statement. They shall must be in the paying agency’s possession before the tenth day of the month following that to which the stock statement relates.

• (c) A specimen summary monthly stock statement (indicative model) is set out below. It shall be made available to storers in electronic form by the paying agencies. Monthly stock statement Products: Storer: Store: No: Address: Month: Lot Description Quantity (kg, tonnes, boxes, items, etc.) Date Comments Entry Exit Quantity carried over Quantity to be carried over

(Stamp and signature)

Place and date:

Name:

2. Annual declaration

• (a) The storer shall prepare an annual stock declaration on the basis of the monthly statements described in point 1. It shall be sent to the paying agency no later than the 15 October following the closure of the accounting year.

• (b) The annual stock declaration shall give a summary of the quantities in store, broken down by product and place of storage, and shall give for each product the quantities in store, the lot numbers (except in the case of cereals), the year of their entry into store and an explanation of any anomalies detected.

• (c) A specimen summary annual stock declaration (indicative model) is set out below.

It shall be made available to storers in electronic form by the paying agencies.

Annual stock statement

Products:	Products:	Storer: Store: No: Address:	Year:
Lot	Description	Quantity and/or weight booked	Comments

(Stamp and signature)

Place and date:

Name:

V. COMPUTERISED STOCK ACCOUNTS AND AVAILABILITY OF INFORMATION

Public storage contracts concluded between the paying agency and the storer shall contain provisions which make it possible to guarantee compliance with Union legislation.

They shall require the following:

• (a) the keeping of computerised intervention stock accounts;

• (b) direct, immediate availability of a permanent inventory;

• (c) availability at all times of all the documents relating to the entry, storage and removal of stock and the accounting documents and records drawn up in accordance with this Regulation and held by the storer;

• (d) permanent access to those documents for staff of the paying agency and the Commission, and for any person duly authorised by them.

VI.   FORM AND CONTENT OF THE DOCUMENTS SENT TO THE PAYING AGENCY

The form and content of the documents referred to in section IV shall be established in accordance with Article 92 of Regulation (EU) 2021/2116.

VII.   KEEPING OF DOCUMENTS

Supporting documents relating to all public storage operations shall be kept by the storer for the full period required under the rules adopted based on Article 92 of Regulation (EU) 2021/2116 for the clearance of accounts procedures, without prejudice to the relevant national provisions.

ANNEX V

Tolerance limits referred to in Article 4(2)

• 1. For quantity losses resulting from normal storage operations carried out in accordance with the rules, the following tolerance limits shall apply for each agricultural product which is the subject of a public storage measure:
• (a) cereals 0,2 %;
• (b) paddy rice, maize 0,4 %;
• (c) skimmed-milk powder 0,0 %;
• (d) butter 0,0 %;
• (e) beef and veal 0,6 %.

• 1. The percentage for allowable losses during boning of beef shall be 32. This percentage shall apply to all quantities boned during the accounting year.

• 1. The tolerance limits referred to in point 1 shall be fixed as a percentage of the actual weight, without packaging, of the quantities entering storage and taken over during the accounting year in question, plus the quantities in storage at the beginning of that year. These tolerances shall apply during the physical stock inspections. They shall be calculated, for each product, on the basis of all the quantities stored by a paying agency. The actual weight at entry and removal shall be the recorded weight minus the standard packaging weight, as laid down in the conditions of entry or, where no such conditions have been laid down, minus the average packaging weight used by the paying agency.

• 1. The tolerance shall not cover losses in terms of number of packages or number of registered pieces.

• 1. Losses arising from theft or other identifiable losses shall not be included in the calculation of tolerance limits provided for in points 1 and 2.

[^E0001]: Regulation (EU) No 228/2013 of the European Parliament and of the Council of 13 March 2013 laying down specific measures for agriculture in the outermost regions of the Union and repealing Council Regulation (EC) No 247/2006 (OJ L 78, 20.3.2013, p. 23).

[^E0002]: Regulation (EU) No 229/2013 of the European Parliament and of the Council of 13 March 2013 laying down specific measures for agriculture in favour of the smaller Aegean islands and repealing Council Regulation (EC) No 1405/2006 (OJ L 78, 20.3.2013, p. 41).

[^E0003]: Regulation (EU) No 1144/2014 of the European Parliament and of the Council of 22 October 2014 on information provision and promotion measures concerning agricultural products implemented in the internal market and in third countries and repealing Council Regulation (EC) No 3/2008 (OJ L 317, 4.11.2014, p. 56).

[^E0004]: Regulation (EU) No 952/2013 of the European Parliament and of the Council of 9 October 2013 laying down the Union Customs Code (OJ L 269, 10.10.2013, p. 1).

[^E0005]: Commission Implementing Regulation (EU) 2022/128 of 21 December 2021 laying down rules for the application of Regulation (EU) 2021/2116 of the European Parliament and of the Council on paying agencies and other bodies, financial management, clearance of accounts, checks, securities and transparency (OJ L 20, 31.1.2022, p. 131).

[^E0006]: Commission Delegated Regulation (EU) No 906/2014 of 11 March 2014 supplementing Regulation (EU) No 1306/2013 of the European Parliament and of the Council with regard to public intervention expenditure (OJ L 255, 28.8.2014, p. 1).

[^E0007]: Regulation (EU) No 1307/2013 of the European Parliament and of the Council of 17 December 2013 establishing rules for direct payments to farmers under support schemes within the framework of the common agricultural policy and repealing Council Regulation (EC) No 637/2008 and Council Regulation (EC) No 73/2009 (OJ L 347, 20.12.2013, p. 608).

[^E0008]: Regulation (EU) 2021/2117 of the European Parliament and of the Council of 2 December 2021 amending Regulations (EU) No 1308/2013 establishing a common organisation of the markets in agricultural products, (EU) No 1151/2012 on quality schemes for agricultural products and foodstuffs, (EU) No 251/2014 on the definition, description, presentation, labelling and the protection of geographical indications of aromatised wine products and (EU) No 228/2013 laying down specific measures for agriculture in the outermost regions of the Union (OJ L 435, 6.12.2021, p. 262).

[^E0009]: Commission Delegated Regulation (EU) 2016/1238 of 18 May 2016 supplementing Regulation (EU) No 1308/2013 of the European Parliament and of the Council with regard to public intervention and aid for private storage (OJ L 206, 30.7.2016, p. 15).