1. The director shall perform the duties of authorising officer. He or she shall implement the revenue and expenditure of the budget in accordance with the financial rules of the Union body and the principle of sound financial management under his or her own responsibility and within the limits of the appropriations authorised.
2. Without prejudice to the responsibilities of the authorising officer as regards prevention and detection of fraud and irregularities, the Union body shall participate in fraud prevention activities of the European Anti-fraud Office.
Information on transfers of personal data for audit purposes
In any call made in the context of grants, procurement or prizes implemented in direct implementation, potential beneficiaries, candidates, tenderers and participants shall, in accordance with Regulation (EU) 2018/1725 be informed that, for the purposes of safeguarding the financial interests of the Union, their personal data may be transferred to internal audit services, to the European Court of Auditors, or to the European Anti-Fraud Office and between authorising officers of the Union bodies, the Commission and the executive agencies.
1. The director may delegate the powers of budget implementation to staff of the Union body covered by the Staff Regulations, in accordance with the conditions laid down in the financial rules of the Union body adopted by the management board. Those so empowered may act only within the limits of the powers expressly conferred upon them.
2. The delegatee may subdelegate the powers received with the explicit agreement of the director.
1. Financial actors within the meaning of Chapter 3 of this Title and other persons, including the members of the Management Board, involved in budget implementation and management, including acts preparatory thereto, audit or control shall not take any action that may bring their own interests into conflict with those of the Union body. They shall also take appropriate measures to prevent a conflict of interest from arising in the functions under their responsibility and to address situations which may objectively be perceived as a conflict of interest.
Where there is a risk of a conflict of interest, the person in question shall refer the matter to the competent authority. The competent authority shall confirm in writing, whether a conflict of interest is found to exist. In that case, the competent authority shall ensure that the person concerned ceases all activities in the matter. The competent authority shall take any further appropriate action.
2. For the purposes of paragraph 1, a conflict of interest exists where the impartial and objective exercise of the functions of a financial actor or other person, as referred to in paragraph 1, is compromised for reasons involving family, emotional life, political or national affinity, economic interest or any other direct or indirect personal interest.
3. The competent authority referred to in paragraph 1 shall be the director. If the member of staff concerned is the director, the competent authority shall be the management board or, where the constituent act allows it, the executive board. In case of a conflict of interest involving a member of the management board, the competent authority shall be the management board, exclusive of the member concerned.
4. The Union body shall adopt rules on the prevention and management of conflict of interests and shall publish annually on its website the declaration of interests of the management board members.
CHAPTER 2
Method of implementation of the budget of the Union body
1. The budget of the Union body shall be implemented by the director in the departments placed under his or her authority.
2. In order to facilitate the implementation of their appropriations, Union bodies may conclude service-level agreements as referred to in Article 59 of Regulation (EU, Euratom) 2018/1046.
3. Technical expertise tasks and administrative, preparatory or ancillary tasks not involving the exercise of public authority or the use of discretionary powers of judgement may be entrusted by contract to external private-sector entities, where this proves to be indispensable.
The duties of authorising officer and accounting officer shall be segregated and mutually exclusive.
The Union body shall provide each financial actor with the resources required to perform his or her duties and a charter describing in detail his or her tasks, rights and obligations.
1. The authorising officer shall be responsible for implementing revenue and expenditure in accordance with the principle of sound financial management, including through ensuring reporting on performance and for ensuring compliance with the requirements of legality and regularity and equal treatment of recipients of Union funds.
2. The authorising officer shall put in place the organisational structure and the internal control systems suited to the performance of the duties of authorising officer, in accordance with the minimum standards or principles adopted by the management board or, where the constituent act allows it, by the executive board, on the basis of the Internal Control Framework laid down by the Commission for its own departments and having due regard to the risks associated with the management environment, including where applicable specific risks associated to decentralized offices, and the nature of the actions financed.
The establishment of such structure and systems shall be supported by a comprehensive risk analysis, which takes into account their cost-effectiveness and performance considerations.
The authorising officer may establish within his or her departments an expertise and advice function to help him or her control the risks involved in his or her activities.
3. To implement expenditure, the authorising officer shall make budgetary and legal commitments, shall validate expenditure and authorise payments and shall undertake the preliminary steps for the implementation of appropriations.
4. To implement revenue, the authorising officer shall draw up estimates of amounts receivable, establish entitlements to be recovered and issue recovery orders. Where appropriate, the authorising officer shall waive established entitlements.
5. In order to prevent errors and irregularities before the authorization of operations and to mitigate risks of non-achievement of objectives, each operation shall be subject at least to an ex ante control relating to the operational and financial aspects of the operation, on the basis of a control strategy which takes risk and cost-effectiveness into account.
The extent in terms of frequency and intensity of the ex ante controls shall be determined by the authorising officer taking into account the results of prior controls as well as risk-based and cost-effectiveness considerations, on the basis of his or her own risk analysis. In case of doubt, the authorising officer responsible for validating the relevant operations shall, as part of the ex ante control, request complementary information or perform an on-the-spot control in order to obtain reasonable assurance.
6. For the purpose of controls, a series of similar individual transactions relating to routine expenditure on salaries, pensions, reimbursement of mission expenses and medical expenses may be considered by the authorising officer to constitute a single operation.
7. For a given operation, the verification shall be carried out by staff other than those who initiated the operation. The staff who carry out the verification shall not be subordinate to the members of staff who initiated the operation.
8. The authorising officer may put in place ex post controls to detect and correct errors and irregularities of operations after they have been authorized. Such controls may be organised on a sample basis according to risk and shall take account of the results of prior controls as well as cost-effectiveness and performance considerations.
9. The ex post controls shall be carried out by staff other than those responsible for the ex ante controls. The staff responsible for the ex post controls shall not be subordinate to the members of staff responsible for the ex ante controls.
The ex post controls may take the form of financial audits at the premises of the beneficiaries.
The rules and modalities, including timeframes, for carrying out audits of the beneficiaries shall be clear, consistent and transparent, and shall be made available when signing the grant agreement.
10. Authorising officers and staff responsible for budget implementation shall have the necessary professional skills. They shall respect a specific code of professional standards adopted by the Union body and based on standards laid down by the Commission for its own departments.
11. If a member of staff, involved in the financial management and control of transactions, considers that a decision he or she is required by his or her superior to apply or to agree to is irregular or contrary to the principles of sound financial management or the professional rules which that member of staff is required to observe, he or she shall inform the director who shall, if the information is given in writing, reply in writing. If the director fails to take action within a reasonable time given the circumstances of the case and in any event within a month or confirms the initial decision or instruction and the member of staff believes that such confirmation does not constitute a reasonable response to his or her concern, the member of staff shall inform the relevant panel referred to in Article 143 of Regulation (EU, Euratom) 2018/1046 and the management board in writing.
12. In the event of any illegal activity, fraud or corruption which may harm the interests of the Union, a member of staff or other servant, including national experts seconded to the Union body, shall inform their immediate superior, the director or the management board of the Union body or the European Anti-Fraud Office or the European Public Prosecutor's Office directly. Contracts with external auditors carrying out audits of the financial management of the Union body shall provide for an obligation of the external auditor to inform the director or, if the latter may be involved, the management board of any suspected illegal activity, fraud or corruption that may harm the interests of the Union.
Where powers of budget implementation are delegated or subdelegated in accordance with Article 41, the relevant provisions of Article 45 shall apply mutatis mutandis to the authorising officers by delegation or subdelegation.
Keeping of supporting documents by authorizing officers
1. The authorising officer shall set up paper-based or electronic systems for the keeping of original supporting documents relating to budget implementation. Such documents shall be kept for at least five years from the date on which the European Parliament grants discharge for the financial year to which the documents relate.
2. Documents relating to operations not definitively closed shall be kept for longer than provided for in paragraph 1, namely until the end of the year following that in which the operations are closed.
3. Personal data contained in supporting documents shall, where possible, be deleted when those data are not necessary for budgetary discharge, control and audit purposes. Article 88 of Regulation (EU) 2018/1725 shall apply to the conservation of data.
1. The authorising officer shall report to the management board on the performance of his or her duties in a form of a consolidated annual activity report containing:
(a)
information on:
(i)
the achievement of the objectives and results set in the Single Programming Document referred to in Article 32 through the reporting on the set of Performance Indicators;
(ii)
the action plan to follow-up on the conclusions of the evaluations referred to in paragraph 3 of Article 29 and the report on its progress in accordance with Article 29(4);
(iii)
the implementation of the body's annual work programme, budget and staff resources referred to in Article 32(5)(c);
(iv)
the contribution of the Union body to the achievement of the Union political priorities;
(v)
organisational management and on the efficiency and effectiveness of the internal control systems including the implementation of the body's anti-fraud strategy, the summary of number and type of internal audits carried out by the internal auditor, the internal audit capabilities, the recommendations made and the action taken on these recommendations and on the recommendations of previous years, as referred to in Articles 82 and 83;
(vi)
any observations of the Court of Auditors and the actions taken on these observations;
(vii)
the agreements referred to in Article 7;
(viii)
the service-level agreements referred to in Article 43;
(ix)
the acts of delegation and subdelegation referred to in Article 41.
(b)
a declaration of the authorising officer stating whether he or she has a reasonable assurance that unless otherwise specified in any reservations related to defined areas of revenue and expenditure:
(i)
the information contained in the report presents a true and fair view;
(ii)
the resources assigned to the activities described in the report have been used for their intended purpose and in accordance with the principle of sound financial management;
(iii)
the control procedures put in place give the necessary guarantees concerning the legality and regularity of the underlying transactions.
The consolidated annual activity report shall indicate the results of the operations by reference to the objectives set and performance considerations, the risks associated with the operations, the use made of the resources provided and the efficiency and effectiveness of the internal control systems, including an overall assessment of the costs and benefits of controls.
The consolidated annual report shall be submitted to the management board for the assessment.
2. No later than 1 July each year the consolidated annual activity report together with its assessment shall be sent by the management board to the Court of Auditors, to the Commission, to the European Parliament and the Council.
3. Additional reporting requirements may be provided in the constituent act in duly justified cases, in particular when it is required by the nature of the field in which the body operates.
The management board shall appoint an accounting officer who shall be responsible in the Union body for:
(a)
properly implementing payments, collecting revenue and recovering amounts established as being receivable;
(b)
preparing and presenting the accounts in accordance with Title X;
(c)
keeping the accounts in accordance with Title X;
(d)
implementing the accounting rules and the chart of accounts in accordance with the provisions adopted by the Commission's accounting officer;
(e)
laying down and validating the accounting systems and, where appropriate, validating systems laid down by the authorising officer to supply or justify accounting information;
(f)
treasury management.
With respect to the tasks referred to in point (e) of the first subparagraph, the accounting officer shall be empowered to verify at any time compliance with the validation criteria.
Appointment and termination of duties of the accounting officer
1. The management board shall appoint an accounting officer, covered by the Staff Regulations, who shall be completely independent in the performance of his or her duties. The accounting officer shall be chosen by the management board on the grounds of his or her particular competence as evidenced by diplomas or by equivalent professional experience.
2. Two or more Union bodies may appoint the same accounting officer. In such case, they shall make the necessary arrangements in order to avoid any conflict of interest.
Union bodies may also agree with the Commission that the accounting officer of the Commission shall also act as accounting officer of the Union body.
Union bodies may also entrust the accounting officer of the Commission with part of the tasks of an accounting officer of the Union body, taking into account the cost-benefit analysis referred to in Article 28.
3. A trial balance shall be drawn up without delay in the event of termination of the duties of the accounting officer.
The trial balance accompanied by a hand-over report shall be transmitted by the accounting officer who is terminating his or her duties or, if it is not possible, by a member of staff in his or her department to the new accounting officer.
The new accounting officer shall sign the trial balance in acceptance within one month from the date of transmission and he or she may make reservations.
The hand-over report shall also contain the result of the trial balance and any reservations made.
The accounting officer of the Union body shall apply the rules adopted by the accounting officer of the Commission based on internationally accepted accounting standards for the public sector.
For the purposes of the first paragraph of this Article, Articles 80 to 84 and 87 of Regulation (EU, Euratom) 2018/1046 shall apply. Articles 85 and 86 of Regulation (EU, Euratom) 2018/1046 shall apply mutatis mutandis.
The Union body shall present to the Commission requests for payment of all or part of the annual Union contribution pursuant to Article 16(6) under terms and at intervals agreed with the Commission.
The authorisation of recovery is the act by which the authorising officer instructs the accounting officer, by issuing a recovery order, to recover an amount receivable that that authorising officer has established.
Where the Union body collects fees and charges referred to in point (b) of Article 6(3), an overall provisional estimate of such fees and charges shall be included in the Single Programming Document referred to in Article 32.
Where fees and charges are entirely determined by legislation or decisions of the management board, the authorising officer may abstain from issuing recovery orders and directly draw up debit notes after having established the amount receivable. In this case, all details of the Union body's entitlement shall be registered. The accounting officer shall keep a list of all debit notes and provide the number of the debit notes and the global amount in the Union body's report on budgetary and financial management.
Where the Union body uses a separate invoicing system, the accounting officer shall regularly, and at least on a monthly basis, enter the accumulated sum of fees and charges received into the accounts.
The Union body shall provide services by virtue of the tasks entrusted to it only after the corresponding fee or charge has been paid in its entirety. However, in exceptional circumstances, a service may be provided without prior payment of the corresponding charge or fee. In cases where service has been provided without prior payment of the corresponding charge or fee, Articles 63 to 70 shall apply.
1. A budgetary commitment shall be preceded by a financing decision. Administrative appropriations may be implemented without a prior financing decision.
2. The annual and multi-annual work programmes of the Union body included in the single programming document referred to in Article 32 shall be equivalent to a financing decision for the activities it covers, provided that the elements set out in Article 32(2) and (3) are clearly identified. A multiannual financing decision shall specify that the implementation of the decision is subject to the availability of budget appropriations for the respective financial years after the adoption of the budget or as provided for in the system of provisional twelfths.
3. The financing decision shall also set out the following:
(a)
for grants: the type of applicants targeted by the call for proposals or direct award and the global budgetary envelope reserved for the grants;
(b)
for procurement: the global budgetary envelope reserved for procurements;
(c)
for prizes: the type of participants targeted by the contest, the global budgetary envelope reserved for the contest and a specific reference for prizes with a unit value of EUR 1 000 000 or more.
1. Every item of expenditure shall be committed, validated, authorized and paid.
At the end of the periods referred to in Article 75, the unused balance of budgetary commitments shall be decommitted.
When executing operations, the authorising officer shall ensure that the expenditure complies with the Treaties, the budget, this Regulation and other acts adopted pursuant to the Treaties as well as with the principle of sound financial management.
2. The authorising officer shall make a budgetary commitment before entering into a legal commitment with third parties.
The first subparagraph shall not apply to legal commitments concluded following a declaration of a crisis situation in the framework of a business continuity plan, in accordance with the procedures adopted by the Union body.
3. The authorising officer shall validate expenditure by accepting that an item of expenditure is charged to the budget of the Union body, after having checked the supporting documents attesting the creditor's entitlement as per the conditions set in the legal commitment when there is a legal commitment. For this purpose, the authorising officer responsible shall:
(a)
verify the existence of the creditor's entitlement;
(b)
determine or verify the reality and the amount of the claim through the endorsement ‘certified correct’;
(c)
verify the conditions according to which payment is due.
Notwithstanding the first subparagraph, the validation of expenditure shall also apply to interim or final reports not associated with a request for payment in which case the impact on the accounting system will be limited to the general accounts.
4. The validation decision shall be expressed through electronically secured signature in accordance with Article 146 of Regulation (EU, Euratom) 2018/1046 by the authorising officer or by a technically competent member of staff, duly empowered by a formal decision of the authorising officer or, exceptionally, for paper workflow, take the form of a stamp incorporating that signature.
With the endorsement ‘certified correct’, the authorising officer or a technically competent member of staff, duly empowered by the authorising officer, shall certify that:
(a)
for the pre-financing: the conditions required in the legal commitment for the payment of the pre-financing are met;
(b)
for interim and balance payments in contracts: the services provided for in the contract have been properly provided, the supplies properly delivered or that the work has been properly carried out;
(c)
for interim and balance payments in grants: the action or work programme carried out by the beneficiary is in all respects in compliance with the grant agreement including, where applicable that the costs declared by the beneficiary are eligible.
In the case referred to in point (c) of the second subparagraph, cost estimates shall not be deemed to comply with the eligibility conditions set out in Article 186(3) of Regulation (EU, Euratom) 2018/1046. The same principle shall also apply for interim and final reports not associated to a payment request.
5. In order to authorize the expenditure, the authorising officer shall, after having verified that the appropriations are available, issue a payment order to instruct the accounting officer to pay an amount of expenditure that has been previously validated.
6. Where periodic payments are made with regard to services rendered, including rental services, or goods delivered, the authorising officer may, subject to that officer's risk analysis, order the application of a direct debit system from an imprest account.
1. Budgetary commitments shall fall into one of the following three categories:
(a)
individual: when the recipient and the amount of the expenditure are known;
(b)
global: when at least one of the elements necessary to identify the individual commitment is still not known;
(c)
provisional: to cover routine administrative expenditure where either the amount or the final payees are not definitively known.
2. Budgetary commitments for actions extending over more than one financial year may be broken down over several years into annual instalments only where the constituent act or basic act so provides or where they relate to administrative expenditure.
3. A global budgetary commitment shall be made on the basis of a financing decision.
The global budgetary commitment shall be made at the latest before the decision on the recipients and amounts is taken and, where implementation of the appropriations concerned involves the adoption of a work programme, at the earliest after that programme has been adopted.
4. The global budgetary commitment shall be implemented by the conclusion of one or more legal commitments.
5. Each individual legal commitment adopted following a global budgetary commitment shall, prior to signature, be registered by the authorising officer in the budgetary accounts and booked to the global budgetary commitment.
6. Provisional budgetary commitments shall be implemented by entering into one or more legal commitments giving rise to an entitlement to subsequent payments. However, in cases relating to expenditure on staff management, they may be implemented directly by payments.
1. Without prejudice to Articles 73(2) and 109(2) legal commitments relating to individual or provisional budgetary commitments shall be entered into by 31 December of year n, year n being the one in which the budgetary commitment was made.
2. Global budgetary commitments shall cover the total cost of the corresponding legal commitments concluded up to 31 December of year n + 1.
3. At the end of the periods referred to in paragraphs 1 and 2, the unused balance of such budgetary commitments shall be decommitted by the authorising officer.
4. The individual and provisional budgetary commitments for actions extending over more than one financial year shall, except in the case of staff expenditure, have a final date for implementation set, in accordance with the conditions in the legal commitments to which they refer, and taking into account the principle of sound financial management.
5. Any parts of budgetary commitments that have not been executed by payments six months after the final date for implementation shall be decommitted in accordance with Article 14.
6. The amount of a budgetary commitment for which no payment within the meaning of Article 76 has been made within two years of the signing of the legal commitment shall be decommitted, except where that amount relates to a case under litigation before judicial courts or arbitral bodies or where there are special provisions laid down in sector-specific rules.
1. Payment of expenditure shall be made by the accounting officer within the limits of the funds available.
2. Payment shall be made on production of proof that the relevant action is in accordance with the contract, the agreement or the basic act and shall cover one or more of the following operations:
(a)
payment of the entire amount due;
(b)
payment of the amount due in any of the following ways:
(i)
pre-financing providing a float, which may be divided into a number of payments in accordance with the principle of sound financial management; such pre-financing shall be paid either on the basis of the contract, the grant agreement or the basic act, or on the basis of supporting documents which make it possible to check that the terms of the contract or agreement in question are complied with;
(ii)
one or more interim payments as a counterpart of a partial execution of the action or performance of the contract. It may clear pre-financing in whole or in part, without prejudice to the provisions of the basic act;
(iii)
payment of the balance of the amounts due where the action or contract is completely executed.
The payment of the balance shall clear all preceding expenditure. A recovery order shall be issued to recover unused amounts.
3. A distinction shall be made in budgetary accounting between the different types of payment referred to in paragraph 2 at the time each payment is made.
4. The accounting rules referred to in Article 51 shall include the rules for clearing the pre-financing in the accounts and for the acknowledgment of the eligibility of costs.
5. Pre-financing payments shall be cleared regularly by the authorising officer responsible, according to the economic nature of the project and, at the latest, at the end of the project. The clearing shall be performed on the basis of information on costs incurred or confirmation of the conditions for payment being fulfilled in accordance with Article 125 of Regulation (EU, Euratom) 2018/1046 as validated by the authorising officer in accordance with Article 73(3) of this Regulation.
For grant agreements or contracts above EUR 5 000 000, the authorising officer shall obtain at each year-end at least the information needed to calculate a reasonable estimate of the costs. That information shall not be used for clearing the pre-financing, but may be used by the authorising officer and the accounting officer to comply with Article 82(2) of Regulation (EU, Euratom) 2018/1046.
For the purposes of the second subparagraph, appropriate provisions shall be included in the legal commitments entered into.
The payment of expenditure shall be carried out within the time limits specified in, and in accordance with Article 116 of Regulation (EU, Euratom) 2018/1046.
CHAPTER 7 — INTERNAL AUDITOR
Appointment and powers and duties of the internal auditor
1. The Union body shall have an internal auditing function that shall be performed in compliance with the relevant international standards.
2. The internal audit function shall be performed by the Commission's internal auditor. The internal auditor may be neither authorising officer nor accounting officer neither of the Union body nor of the Commission
3. The internal auditor shall advise the Union body on dealing with risks, by issuing independent opinions on the quality of management and control systems and by issuing recommendations for improving the conditions of implementation of operations and promoting sound financial management.
The internal auditor shall be responsible, in particular, for:
(a)
assessing the suitability and effectiveness of internal management systems and the performance of departments in implementing programmes and actions by reference to the risks associated with them;
(b)
assessing the efficiency and effectiveness of the internal control and audit systems applicable to each operation for implementation of the budget of the Union body.
4. The internal auditor shall perform his or her duties in relation to all the Union body's activities and departments. He or she shall enjoy full and unlimited access to all information required to perform his or her duties, if necessary on the spot access, including in the Member States and in third countries.
5. The internal auditor shall take note of the consolidated annual activity report of the authorising officer and any other pieces of information identified.
6. The internal auditor shall report to the management board and the director of the Union body on his or her findings and recommendations. The Union body shall ensure that action is taken with regard to recommendations resulting from audits.
7. The internal auditor shall also report in any of the following cases:
(a)
critical risks and recommendations have not been addressed;
(b)
there are significant delays in the implementation of the recommendations made in previous years.
The management board or, where the constituent act allows it, the executive board, and the director shall ensure regular monitoring of the implementation of audit recommendations. The management board or, where the constituent act allows it, the executive board shall examine the information referred to in Article 48(1)(a) and whether the recommendations have been fully and timely implemented.
Each Union body shall consider whether the recommendations made in the reports of its internal auditor are suitable for an exchange of best practices with the other Union bodies.
8. The Union body shall make available the contact details of the internal auditor to any natural or legal person involved in expenditure operations, for the purposes of confidentially contacting the internal auditor.
9. The reports and findings of the internal auditor shall be accessible to the public only after validation by the internal auditor of the action taken for their implementation.
1. The internal auditor shall enjoy complete independence in the conduct of his or her audits. Special rules applicable to the internal auditor shall be laid down by the Commission and shall be such as to guarantee that the internal auditor is completely independent in the performance of his or her duties, and to establish the internal auditor's responsibility.
2. The internal auditor may not be given any instructions nor be restricted in any way as regards the performance of the functions which, by virtue of his or her appointment, are assigned to him or her under the Financial Regulation.
1. The management board or, where the constituent act allows it, the executive board may establish, with due regard to cost effectiveness and added value, an internal audit capability that shall perform its duties in compliance with the relevant international standards.
The purpose, authority and responsibility of the internal audit capability shall be provided for in the internal audit charter and shall be subject to the approval of the management board or, where the constituent act allows it, of the executive board.
The annual audit plan of an internal audit capability shall be drawn up by the Head of internal audit capability taking into consideration, inter alia, the director's assessment of risk in the Union body.
It shall be reviewed and approved by the management board or, where the constituent act allows it, by the executive board.
The internal audit capability shall report to the management board and the director on his or her findings and recommendations.
2. If the internal audit capability of a single Union body is not cost-effective or is not able to meet international standards, the Union body may decide to share an internal audit capability with other Union bodies functioning in the same policy area.
In such cases the management board or, where the constituent act allows it, the executive board of the concerned Union bodies shall agree on the practical modalities of the shared internal audit capability.
3. The internal audit actors shall cooperate efficiently through exchanging information and audit reports and, where appropriate, establishing joint risk assessments, and carrying out joint audits.
The management board or, where the constituent act allows it, the executive board, and the director shall ensure regular monitoring of the implementation of internal audit capability's recommendations.
