Issuing, Withdrawing or Suspension of Accreditation for Decentralized
Management of the European Union Funds
1. Accrediting
Definitions of accreditation and conferral of management powers over the
European Union funds, are defined by legislative framework for application of the
pre-accession assistant instruments (IPA), such as: IPA Implementing Regulation
(hereinafter referred to as: “IPA IR“), as well as Framework Agreement1, signed
by every beneficiary country with the European Community Commission. In this
way, the Framework Agreement becomes binding document for all signing
countries and accepts prescribed criteria for accrediting by the European
Commission (hereinafter referred to as: “Commission “).
Article 11, IPA IR – General Requirements – subsection 1, define that the
Commission is making sure that the country concerned meets the conditions
referred to in Article 56(2) of Regulation (EC, Euratom) No 1605/2002
(hereinafter referred to as: the “Financial Regulation”), in particular as regards
the management and control systems established, and that the accreditations.
Article 56, of the Financial Regulation sets forth that the audit, accounting and
procurement systems of beneficiary country is equivalent to the rules established
in the European Union countries, i.e. in accordance with the rules and legislation
of the European Community, as well with due account for internationally
accepted standards.2 Apart from aforementioned requirements, it is necessary to
have accreditations in force of the National Fund, the NAO and operational
structures. In that manner, in compliance with defined requirements,
management and control systems established within beneficiary country are
providing efficient controls in the following areas: where the control is carried out
(as to establishment of organization and its management), risk planning and
management, control activities, monitoring and communication.
IPA IR Regulation sets forth that where specific persons have been given
responsibility for an activity in relation to the management, implementation and
control of programmes, the beneficiary country shall enable such persons to
exercise the duties associated with that responsibility, including in cases where
there is no hierarchical link between them and the bodies participating in that
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Framework Agreement between the Government of Montenegro and the European Community
Commission, on rules for cooperation related to the financial assistance of the European Community to
Montenegro within implementing IPA (“Official Gazette of Montenegro, No. 01/08 – International
Treates) and the Regulation of the Commission (EC), No. 718/2007 as of 12th June 2007, implementing
Framework Regulation IPA- IPA IR – Chapter II – Management and control systems, Articles 11-17. Commission Regulation (EC) No 718/2007 of 12 June 2007 implementing Council Regulation (EC) No
1085/2006 establishing an instrument for pre-accession assistance (IPA)
2
See Article 56(2) (EC,EURATOM) -Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002
on the Financial Regulation applicable to the general budget of the European Communities
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activity. The beneficiary country is in particular providing those persons with the
authority to establish, through formal working arrangements between them and
the bodies concerned:
(a) an appropriate system for the exchange of information, including the power to
require information and a right of access to documents and staff on the spot if
necessary;
(b) the standards to be met;
(c) the procedures to be followed.
The Competent Accrediting Officer (or Competent Authorizing Officer as
being defined in Montenegro - CAO3), is responsible for the accreditation of the
National authorizing officer (NAO)4, both as the head of the National Fund, since
the NAO is managing this unit. Prior to accrediting the NAO, the CAO is making
sure that the applicable requirements set out in Article 56(2) of the Financial
Regulation are fulfilled, as well as criteria set forth in the Annex IPA IR
(Accrediting Criteria). Aforementioned must be supported by an audit opinion
drawn up by an external auditor functionally independent from all actors in the
management and control systems. The audit opinion is based on examinations
conducted according to internationally accepted auditing.
The CAO is informing the Commission of the accreditation of the NAO, not
later than the notification of the accreditation of the first operating structure.
Moreover, the NAO is obliged to provide all relevant supporting information
required by the Commission. The CAO immediately informs the Commission of
any changes concerning the NAO or the National Fund, where a change affects
the NAO or the National Fund in relation to financial management, therefore
accreditation validity. Where such a change is significant, the CAO shall also
notify the Commission of his decision concerning the accreditation.
Regardless the IPA component, the NAO is responsible for the
accreditation of the operating structure. Prior to accrediting an operating
structure, the NAO is making sure that the requirements set out in Article 11, of
the IPA IR, are fulfilled by the operating structure Concerned, being identical
situation as in accrediting the NAO and the National Fund. This means that the
NAO must assure that all requirements prescribed by the article 56(2) of
aforementioned Financial Regulation, as well as all criteria set forth in the Annex
. Both in case of accrediting operating structures as in the case of accrediting the
National Fund and the NAO, the assurance has to be supported by an audit
CAO – Mr. Igor Luksic, PhD, Finance Minister is the Competent Authorizing Officer.
NAO – Mr. Dušan Perović, Assistant Minister for Treasury Operations, is the National Authorizing
Officer.
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opinion drawn up by an external auditor functionally independent from all actors
in the management and control systems. Moreover, the audit opinion shall be
based on examinations conducted according to internationally accepted auditing
standards.
It is necessary to emphasize that the NAO is the person who should
inform the Commission of the accreditation of operating structures, as well as to
provide all relevant supporting information required by the Commission, including
a description of the management and control systems.
It is necessary to make the difference between the National Accreditation,
when key players in accrediting process, i.e. the CAO and the NAO are assured
that upon appointed bodies, designed procedures and established control and
management system, there is a justified ground by national authorities to submit
the application for the next phase, which is conferral of management powers 5 by
the Commission, representing accrediting by the Commission.
Thus, prior to conferral of management powers, the Commission is
reviewing accreditations for the NAO, the National Fund and Operating structures
(CAO is submitting the application to the Commission for decentralized
management for the National fund, while NAO is submitting for relevant operating
structures). At the same time, the Commission is reviewing procedures and
structures of all relevant bodies or institutions in the beneficiary country, which
may include on – spot –verifications by its services or subcontracted to an audit
firm.
It may be the case that the Commission sets further conditions, with a
view to ensuring that the requirements referred to in Article 11, of the IPA IR are
met. These further conditions must be fulfilled within a fixed period determined by
the Commission for the conferral of management powers to remain effective. The
Commission Decision on the conferral of management powers should contain the
list of the ex-ante controls, if any, to be performed by the Commission on the
tendering of contracts, launch of calls for proposals and the award of contracts
and grants. This list may vary with the component or the programme. The ex
ante controls shall apply, depending on the component or programme, until the
Commission allows for decentralized management without ex ante controls, so
called EDIS, i.e. expanded DIS. Moreover, the Commission may define the
suspension or withdrawal of the conferral of management powers in relation to
specific bodies or authorities.
2. Withdrawal or suspension of the accreditation
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Conferral of management represents the last phase in so called DIS Road Map, or the first step in
independent management of the EU funds, when the European Commission is passing the Decision on
decentralized system.
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Regardless the Commission Decision on the conferral of management
powers, CAO is responsible for monitoring the continuing fulfillment of all the
requirements for accreditation to be maintained and shall inform the Commission
of any significant change related thereto. If any of the applicable requirements
set out in Article 11 are not, or are no longer, fulfilled, the CAO is obliged to either
suspend or withdraw the accreditation of the NAO, and immediately inform the
Commission of his decision and of the reasons for his decision. This assurance is
to be supported by an audit opinion. During the period when the accreditation is
not in force, all the euro accounts or the euro accounts for the components
concerned shall be blocked, because the accreditation refers to the work of the
National Fund or NAO.
With regard to accrediting operating structures, after the conferral of
management powers by the Commission, the NAO is responsible for monitoring
the continuing fulfillment of all the requirements for this accreditation to be
maintained and is informing the Commission and the CAO of any significant
change related thereto. If any of the requirements set out in Article 11, IPA IR are
not, or are no longer, fulfilled, the NAO will either suspend or withdraw the
accreditation of the operating structure concerned, and immediately inform the
Commission and the CAP of his decision and of the reasons for his decision.
Before restoring the accreditation to operating structure, the NAO will assure
himself that those requirements are again fulfilled. This assurance is supported
by an audit opinion. Where the accreditation of an operating structure is
withdrawn or suspended by the NAO, the Commission is not making transfers to
the beneficiary country of funds relating to programmes or operations
implemented by the operating structure concerned while its accreditation is
suspended or withdrawn. If the beneficiary country of funds failed to comply with
the requirements and conditions related to the conferral of management powers,
the Commission may make financial corrections, which means that in
accordance with the Articles 49-56, IPA IR, the beneficiary country of funds is
obliged to return the funds to the European Community.6
No new legal commitments made by the operating structure concerned
shall be considered eligible during the period when the accreditation is not in
force. The NAO shall be responsible for taking any appropriate safeguard
measures regarding payments made or contracts signed by the operating
structure concerned.
6 See Article 50, IPA IR: 1. The NAO, who bears in the first instance the responsibility for investigating
irregularities, shall make the financial adjustments where irregularities or negligence are detected in
operations or operational programmes, by cancelling all or part of the Community contribution to the
operations or the operational programmes concerned. The national authorising officer shall take into
account the nature and gravity of the irregularities and the financial loss to the Community contribution. In
case of an irregularity, the national authorising officer shall recover the Community contribution paid to the
beneficiary in accordance with national recovery procedures.
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3. Withdrawal or suspension of conferral of management powers
Irrespective of the decision by the CAO to maintain, suspend or withdraw
the accreditation of the NAO, or of the decision by the NAO officer to maintain,
suspend or withdraw the accreditation of the operating structure, the Commission
is continuously monitoring issued accreditation and therefore may withdraw or
suspend the conferral of management powers at any time, in particular in the
event that any of the requirements mentioned in Article 11, IPA IR are not, or no
longer, fulfilled. The Commission shall cease to make transfers of funds to the
beneficiary country. In case of misuse, the Commission may make financial
corrections, which means that in accordance with the Articles 49-56 of the IPA
IR, the beneficiary country is obliged to return funds to the European Community.
The Commission may lay down other consequences of such a suspension or
withdrawal in a specific Commission Decision.
Ms. Nataša Kovačević,
Assistant Minister,
CFCU
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