Managing authority
Article 39
1. For the purposes of the selection and approval of operations, under Article 59(a) of the basic Regulation, the managing authority shall ensure that beneficiaries are informed of the specific conditions concerning the products or services to be delivered under the operation, the financing plan, the time limit for execution, and the financial and other information to be kept and communicated. It shall satisfy itself that the beneficiary has the capacity to fulfil those obligations before the approval decision is taken. 2. The verifications to be carried out by the managing authority under Article 59(b) of the basic Regulation shall cover the administrative, financial, technical and physical aspects of operations, as appropriate. Verifications shall ensure that the expenditure declared is real, the products or services have been delivered in accordance with the approval decision, the applications for reimbursement by the beneficiary are correct and that expenditure complies with Community and national rules. They shall include procedures to avoid double-financing of expenditure with other Community or national schemes and with other programming periods. The verifications shall include the following procedures: (a) administrative verifications in respect of each application for reimbursement by beneficiaries; (b) on-the-spot verifications of individual operations. 3. Where on-the-spot verifications under paragraph 2(b) are carried out on a sample basis for the operational programme, the managing authority shall keep records describing and justifying the sampling method and identifying the operations or transactions selected for verifications. The managing authority shall determine the size of the sample in order to achieve reasonable assurance as to the legality and regularity of the underlying transactions having regard to the level of risk identified by the managing authority for the type of beneficiaries and operations concerned. The managing authority shall review the sampling method each year. 4. The managing authority shall establish written standards and procedures for the verifications carried out under paragraph 2 and shall keep records for each verification, stating the work performed, the date and the results of the verification and the measures taken in respect of any irregularities detected. 5. Where the managing authority is also a beneficiary under the operational programme, arrangements for the verifications referred to in paragraphs 2, 3 and 4 of this Article shall ensure the adequate separation of functions in accordance with Article 57(1)(b) of the basic Regulation.