CHAPTER I — Financial contribution by the Union
Eligibility of expenditure
1. Prior to the conclusion of the relevant financing agreement in accordance with Article 13, contracts and addenda signed, expenditure incurred and payments made by the IPA II beneficiary, shall not be eligible for funding under Regulation (EU) No 231/2014.
2. The following expenditure shall not be eligible for funding under Regulation (EU) No 231/2014:
(a)
purchase of land and existing buildings, except where duly justified by the nature of the action in the financing decision;
(b)
other expenditure as may be provided for in the sectoral or financing agreements.
CHAPTER II — Rules relating to indirect management by the IPA II beneficiary
Reporting on suspected fraud and other irregularities
The IPA II beneficiary shall report suspected fraud and other irregularities which have been the subject of a primary administrative or judicial finding, without delay, to the Commission and keep the latter informed of the progress of administrative and legal proceedings. Reporting shall be done by electronic means using the module provided by the Commission for this purpose.
Financial corrections
1. In order to ensure that the IPA II funds have been used in accordance with the applicable rules, the Commission shall apply financial correction mechanisms.
2. A financial correction may arise from the following:
(a)
identification of a specific error, irregularity or fraud;
(b)
identification of a weakness or deficiency in the management and control systems of the IPA II beneficiary.
3. The Commission shall apply the financial corrections on the basis of identification of amounts unduly spent and on the basis of financial implications for the budget. Where such amounts cannot be identified precisely in order to apply individual corrections, the Commission may apply flat-rate corrections or corrections based on an extrapolation of the findings.
4. Financial corrections shall be made as appropriate by compensation.
5. When deciding the amount of a correction, the Commission shall take into account the nature and gravity of the specific error or irregularity and/or the extent and financial implications of the weaknesses or the deficiencies found in the management and control system in the programme concerned.
Source: EUR-Lex (Publications Office of the EU), © European Union, reuse permitted under Commission Decision 2011/833/EU.
