ANNEX IISupplementary provisions
ANNEX II Model for the annual audit report 1. INTRODUCTION 1.1. Identification of the external audit firm that has been involved in preparing the report. 1.2. Reference period (e.g. 01 July N-1 to 30 June N). 1.3. Identification of the financial instrument(s)/mandate(s) and operational programme(s) or rural development programme(s) covered by the audit report. Identification of the funding agreement to which the report relates to (the ‘Funding agreement’). 2. AUDIT OF INTERNAL CONTROL SYSTEMS APPLIED BY THE EIB/EIF OR OTHER INTERNATIONAL FINANCIAL INSTITUTIONS Results of the external audit of the internal control system of the EIB or other international financial institutions (IFIs), in which a Member State is a shareholder, assessing the set-up and effectiveness of this internal control system and covering the following elements: 2.1. Mandate acceptance process. 2.2. Process for the appraisal and selection of financial intermediaries: formal and quality assessment. 2.3. Process for the approval of transactions with financial intermediaries and signature of relevant funding agreements. 2.4. In case of financial contribution to financial instruments set up at Union level, including SME Initiative instruments and in case of ESI Funds/EFSI combination under Article 39a of Regulation (EU) No 1303/2013, process for the set-up of the instrument in line with the rules defined in the relevant Articles (e.g. Article 39, Article 39a of Regulation (EU) No 1303/2013). 2.5. Processes for the monitoring of financial intermediaries relating to: 2.5.1. reporting by financial intermediaries; 2.5.2. maintenance of records; 2.5.3. disbursements to final recipients; 2.5.4. eligibility of support to final recipients; 2.5.5. management fees and costs charged by the financial intermediaries; 2.5.6. visibility requirements; 2.5.7. implementation of State aid requirements by the financial intermediaries, and in the case of EAFRD (partly exempted from State aid rules) the implementation of Fund-specific requirements, including rules on cumulation of aid, when applicable; 2.5.8. differentiated treatment of investors, where relevant; 2.5.9. compliance with tax-related requirements of Article 38 of Regulation (EU) No 1303/2013 as updated in Regulation (EU, Euratom) 2018/1046. 2.6. Systems for the processing of payments received from the managing authority. 2.7. Systems for the calculation and payment of amounts related to management costs and fees. 2.8. Systems for the processing of payments to financial intermediaries. 2.9. Systems for the processing of interest and other gains generated by support from the ESI Funds to financial instruments. In relation to points 2.1 to 2.4 above following the submission of the first annual audit report: information only on the updates or changes to the procedures or arrangements in place and their assessment for subsequent annual reports. In relation to points 2.5 to 2.9 above: results of the audit testing covering the relevant internal applicable systems and processes. 2.10. At closure, the following elements shall be covered in the last annual audit report in addition to the elements mentioned in points 2.1 to 2.9 above: 2.10.1. Use of differentiated treatment of investors. 2.10.2. Achieved multiplier ratio compared to the agreed multiplier ratio in the guarantee agreements for financial instruments delivering guarantees. 2.10.3. Amount of capitalised interest rate subsidies or guarantee fee subsidies in line with Article 42(1)(c) of Regulation (EU) No 1303/2013. 2.10.4. Amount of capitalised management costs and fees in line with Article 42(2) of Regulation (EU) No 1303/2013. 2.10.5. Amount of programme contribution paid into an escrow account in line with Article 42(3) of Regulation (EU) No 1303/2013. 2.10.6. Use of interest and other gains attributable to the support from the ESI Funds paid to financial instruments in line with Article 43 of Regulation (EU) No 1303/2013. 2.10.7. Use of resources paid back to financial instruments, which are attributable to the support from the ESI Funds, until the end of the eligibility period and arrangements put in place for the use of those resources after the end of the eligibility period in line with Articles 44 and 45 of Regulation (EU) No 1303/2013. 3. AUDIT CONCLUSIONS 3.1. Conclusion as to whether the external audit firm can provide reasonable assurance on the set-up and effectiveness of the internal control system put in place by the EIB or other IFIs, in which a Member State is a shareholder, in accordance with the applicable rules, as per the elements referred to in section 2. 3.2. Findings and recommendations resulting from the audit work carried out Points 3.1 and 3.2 shall be based on the results of the audit work referred to in section 2 and where relevant, take account of the results of other national or Union audit work carried out in relation to the same body implementing financial instruments and/or to the same mandate for financial instruments.