Conditions for reducing or increasing financial on-the-spot controls
Article 4
1. The Responsible Authority shall ascertain the level of the error rate in the Union contribution controlled in the annual accounts referred to in Article 39 of Regulation (EU) No 514/2014 for financial year N. 2. The Responsible Authority may reduce the coverage of financial on-the-spot controls in the following financial year N+1 when the two following conditions are met: (a) the error rate is less than 2 % of the Union contribution controlled in the annual accounts for financial year N, (b) the financial on-the-spot controls carried out since the start of the national programme cover a minimum of 10 % of the cumulated Union contribution to all the projects declared as finalised in the annual accounts since the start of the programme. 3. Where the error rate is greater than or equal to 2 % of the Union contribution controlled in the annual accounts for financial year N, the Responsible Authority shall analyse the significance of this error rate in order to establish the scale and effect of the errors and to determine whether the error rate is representative of the entire population of payments declared. The Responsible Authority shall take the necessary preventive and corrective measures, including additional controls, and shall set out the results of such analysis in the annual summary referred to in point (b) of the first subparagraph of Article 59(5) of Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council ( 3 ) . The financial on-the-spot controls for the following financial year (N+1) shall cover a percentage of the cumulated Union contribution to the projects declared as finalised in the annual accounts for the financial year N+1 that is higher than the corresponding percentage in financial year N. This higher percentage shall not be lower than 10 %. Additionally, up to financial year N+1 the financial on-the-spot controls carried out since the start of the national programme shall cover a minimum of 10 % of the cumulated Union contribution to all the projects declared as finalised in the annual accounts since the start of the programme. Where the error rate resulting from the increased controls carried out in year N+1 falls below 2 %, the Responsible Authority shall, in the next financial year (N+2) carry out financial on-the-spot controls on a minimum of 10 % of the cumulated Union contribution to the projects declared as finalised in the annual accounts for financial year N+2.