Annex VIII - Controls and Sanctions for Project-Based Measures
Any project based measure adopted by MAFF under Regulation 1257/1999 shall be subject to a Scheme Implementation Plan. Such a plan will specify the control measures in place designed to fulfil the requirements of the Commission implementing Regulation 1750/1999 and Regulation 1663/95, laying down the procedure for the clearance of EAGGF guarantee section accounts. Each Scheme Implementation Plan will include the following elements.
1. A Definition of Scheme Objectives
2. The Legal Base for the Measure
2.1 This will include reference to Regulation 1257/1999 on support for Rural Development from the EAGGF and Regulation 1750/1999 laying down detailed rules for the application of the Regulation 1257/1999.
3. Timetable
3.1 Within the framework of the seven year Rural Development Programme running from 1 January 2000, the Scheme Implementation Plan will specify any additional constraints in terms of timing of activity and expenditure.
4. Risks
4.1 The Scheme Implementation Plan will outline the main types of irregularity which the measures in the Programme are designed to prevent, such as grant sought for ineligible activity, dual funding, failure to comply with conditions of grant.
5. Responsibilities
5.1 The Scheme Implementation Plan will summarise the responsibilities for all the elements within MAFF with a role in administering the scheme.
6. Delegation of Functions to Third Parties
6.1 Measures implemented through the approval of projects may involve a significant input from third parties, including services of the paying agencies or external bodies. Any delegation of functions to third parties will be carried out in accordance with Guidelines for the Certification of EAGGF accounts, Guideline No 9 on delegation of tasks to other bodies or services (Doc VI/5331/98).
7. Computer System Controls
7.1 The Scheme Implementation Plan will describe the measures designed to ensure the integrity of processes carried out on IT system. To include:
- that all information entered onto the system is validated to ensure that input errors are detected and corrected;
- only individuals with properly authorised access (including allocated passwords) may enter, modify or validate data;
- an operations log records the identity of officials entering or modifying data or programmes;
8. Pre-Approval Checks
8.1 All applications will be submitted in an approved format and contain all the information required to undertake an assessment and validity checks.
8.2 Any project application relating to areas or animals will be required to contain the detail necessary to complete cross-checks with the IACS system, i.e. details of individually identified parcels, numbers of livestock and eartag numbers in the case of bovines.
8.3 Application checks shall be completed using agreed checklists and include:
- the eligibility of the applicant;
- eligibility of the proposed expenditure;
- any potential conflicts with national or regional policy objectives;
- contribution towards rural development plan objectives;
- assessment of additionality/value for money.
8.4 Applications will be processed as far as possible within a target timescale.
9. Project Monitoring
9.1 Monitoring of projects is required to ensure that:
- grant is used for the purpose for which it was made available and that relevant terms and conditions are being met;
- projects failing to meet forecasts are identified at an early stage;
- the benefits achieved through support can be evaluated.
9.2 Monitoring may be defined into two categories. Administrative ‘routine monitoring’ of all projects to ensure they are on course and ‘on-the-spot’ inspection of projects based on a risk assessment selection.
9.3 ‘On-the-spot’ inspections shall be completed in respect of a minimum of 5% of beneficiaries each year. Notice of inspections will be limited to the minimum necessary.
9.4 Selection of projects for inspection will be on the basis of a risk analysis which will take into consideration factors including:
- the amount of aid awarded;
- any previous findings including routine progress reports;
- requests for variation from original spend profile.
9.5 In the case of capital projects under the marketing and processing measure, 100% of grant aided facilities will be subject to inspection prior to settlement of the final claim. This arises from experience gained under the previously operated Processing and Marketing Grant Scheme and is proposed in recognition of the particular risks to public health of food processing facilities.
9.6 In the case of capital projects under the investment in agricultural holdings measure and relevant Article 33 measures, 100% of grant aided facilities will be subject to inspection prior to settlement of the final claim. Administration controls on these investments will also include verification of the facts on which payments to beneficiaries are based.
9.7 High risk projects will be supplemented by a random sample for comparative purposes.
9.8 Checks undertaken shall be comprehensive covering all the relevant undertakings and conditions applicable to the project in question. The results shall be clearly reported in an agreed format and returned promptly.
9.9 Once a project has been selected for an on-the-spot inspection, payment of claims shall be withheld until such time as a satisfactory report has been received.
9.10 Where significant irregularities are identified within a specific measure consideration will be given to increasing the level of checks carried out in the following year. The levels of irregularity will be monitored nationally in order to identify any significant variation between Regions.
9.11 Where irregularities are identified, MAFF will undertake corrective action promptly whether this involves withdrawal of project approval, reduction or recovery of grant.
9.12 On-the-spot controls will be subject to quality control whereby a sample of inspections are subject to a management check by a senior line manager.
10. Claim Processing
10.1 Claims will be processed in a staged manner involving the separation of the key functions:
- claim input;
- recommendation;
- authorisation.
10.2 The checks carried out at each stage will be recorded on an agreed checklist which will be retained on file. The checks will in particular cover the eligibility of claimed expenditure - fully supported by original documentation.
10.3 Individual levels of delegated authority will be allocated on the basis of grade.
10.4 Management checks by higher grade staff will be undertaken on a sample of claims. These checks will be evidenced by the completion of a proforma placed on the file. The results will be reported on a quarterly basis to a central point for the identification of any common themes or control issues.
11. Penalties
11.1 Each measure will be subject to clear penalty provisions in the event of a breach of scheme rules or undertakings. For project based measures it will generally not be appropriate to apply a percentage penalty approach in respect of the grant awarded: grant awarded will generally be the minimum necessary for the project to proceed and as such a percentage penalty would normally lead to closure of a project. A decision will therefore need to be taken on whether or not to withdraw project approval. If approval is withdrawn then a further decision will be taken on whether or not to seek recovery of any grant already paid (plus interest). This decision will hinge on the extent to which the breach identified was within the control of, or due directly to the applicant.
11.2 Where an unforeseen event outwith the applicant’s control has directly resulted in a breach of the rules or related undertaking, MAFF will consider pleas of force majeure in line with Article 30 of Regulation 1750/1999.
11.3 In the case of false declarations, the penalties applicable under Article 48 of Regulation 1750/1999 shall apply.
12. Reporting Procedures
12.1 Requirements for regular reports to a central point will be outlined including:
- scheme commitments and expenditure;
- project outputs - expected and achieved;
- monitoring activity - to satisfy regulatory requirements;
- irregularity reporting;
- management checks.
Page last modified:
17 August, 2005
Page published: 10 December, 2002