Commission Regulation (EC) No 1975/2006 (repealed)Show full title

TITLE II U.K. Rural development support under Axis 1 and Axis 3 and certain measures under Axis 2 and Axis 4

CHAPTER I U.K. General provisions

Article 25 U.K. Scope

This Title shall apply to:

(a)

the support measures set out in Articles 20 and 52 of Regulation (EC) No 1698/2005;

(b)

the support measures set out in Articles 36(a)(vi), (b)(vi), (b)(vii) and 39(5) of that Regulation and in Articles 36(b) (i) and (iii) of that Regulation as far as the establishment costs are concerned;

(c)

support granted in accordance with Article 63(a) and (b) of that Regulation with regard to operations corresponding to measures provided for in points (a) and (b) of this Article.

SECTION I U.K. Controls

Article 26 U.K. Administrative checks

1. Administrative checks shall be carried out on all applications for support or payment claims, and shall cover all elements that it is possible and appropriate to control by administrative means. The procedures shall require the recording of control work undertaken, the results of the verification and the measures taken in respect of discrepancies.

2. Administrative checks on applications for support shall in particular include a verification of:

(a) the eligibility of the operation for which support is requested;

(b) the respect of the selection criteria set out in the rural development programme;

(c) the compliance of the operation for which support is requested with applicable national and Community rules on, in particular, and where relevant, public procurement, State aid and the other appropriate obligatory standards established by national legislation or established in the rural development programme;

(d) the reasonableness of the costs proposed, which shall be evaluated using a suitable evaluation system, such as reference costs, a comparison of different offers or an evaluation committee;

(e) the reliability of the applicant, with reference to any previous co-financed operations undertaken since 2000.

3. Administrative checks on payment claims shall include in particular, and as far as this is appropriate for the claiming question, a verification of:

(a) the delivery of the products and services co-financed;

(b) the reality of expenditure claimed;

(c) the completed operation compared with the operation for which the application for support was submitted and granted.

4. Administrative checks relating to investment operations shall include at least one visit to the operation supported or the investment site to verify the realisation of the investment.

However, Member States may decide not to carry out such visits for smaller investments, or where they consider that the risk that the conditions for receiving aid are not fulfilled, or that the reality of the investment has not been respected, is low. That decision and its justification shall be recorded.

5. Payments by beneficiaries shall be supported by invoices and documents proving payment. Where this cannot be done, payments shall be supported by documents of equivalent probative value.

6. Administrative checks shall include procedures to avoid irregular double financing with other Community or national schemes and with other programming periods. Where financing from other sources exists these checks shall ensure that the total aid received does not breach the maximum permissible aid ceilings.

7. For support relating to food quality schemes recognised by Member States, as provided for in Article 32 of Regulation (EC) No 1698/2005, paying agencies may, where appropriate, make use of evidence received from other services, bodies or organisations to verify the respect of eligibility criteria. However, they must have assurance that the service, body or organisation is operating to a standard sufficient to control compliance with the eligibility criteria.

Article 27 U.K. On-the-spot checks

1. Member States shall organise on-the-spot checks on approved operations on an appropriate sampling basis. These shall be, as far as is possible, carried out before the final payment is made for a project.

2. The expenditure controlled shall represent at least 4 % of the public expenditure that has been declared to the Commission each year, and at least 5 % of the public expenditure declared to the Commission over the whole programming period.

3. The sample of approved operations to be checked in accordance with paragraph 1 shall take into account in particular:

(a) the need to check an appropriate mix of types and sizes of operations;

(b) any risk factors which have been identified following national or Community checks;

(c) the need to maintain a balance between the axes and measures.

4. The results of the on-the-spot checks shall be evaluated to establish whether any problems encountered are of a systemic character, entailing a risk for other similar operations, beneficiaries or other bodies. The evaluation shall also identify the causes of such situations, any further examination which may be required and the necessary corrective and preventive action.

5. Advance notice of on-the-spot checks may be given, provided that the purpose of the control is not jeopardised. If the advance notice exceeds 48 hours then it should be limited to the minimum necessary, depending on the nature of the measure and the operation being co-financed.

Article 28 U.K. Content of on-the-spot checks

1. Through the on-the-spot checks, the Member States shall endeavour to verify the following:

(a) that the payments made to the beneficiary can be supported by accounting or other documents held by the bodies of firms carrying out the operations supported;

(b) for an adequate number of expenditure items, that the nature and timing of the relevant expenditure comply with Community provisions and correspond to the approved specifications of the operation and the works actually executed or services delivered;

(c) that the use or intended use of the operation is consistent with the use described in the application for Community support;

(d) that the publicly funded operations have been implemented in accordance with Community rules and policies, especially the rules on public tendering and relevant mandatory standards established by national legislation or established in the rural development programme.

2. The on-the-spot checks shall cover all the commitments and obligations of a beneficiary which can be checked at the time of the visit.

3. Except in exceptional circumstances, duly recorded and explained by the national authorities, the on-the-spot checks shall include a visit to the operation or, if the operation is intangible, to the operation promoter.

4. Only checks meeting the full requirements of this Article may be counted towards the achievement of the control rate set out in Article 27(2).

Article 29 U.K. Control of Early retirement and semi-subsistence farming measures

1. For applications for support under Articles 23 and 34 of Regulation (EC) No 1698/2005, the administrative checks shall additionally include those referred to in Article 11(2) of this Regulation.

2. For the measure provided for in Article 23 of Regulation (EC) No 1698/2005, Member States may dispense with on-the-spot checks after the first payment of the support, provided that administrative checks, including inter alia appropriate cross-checks, in particular with the information contained in the electronic database referred to in Article 19 of Regulation (EC) No 1782/2003, provide the necessary assurance of legality and regularity of payments.

Article 30 U.K. Ex-post checks

1. Ex-post checks shall be carried out on investment operations that are still subject to commitments pursuant to Article 72(1) of Regulation (EC) No 1698/2005 or detailed in the rural development programme.

2. The objective of the ex-post checks shall be to:

(a) verify the respect of Article 72(1) of Regulation (EC) No 1698/2005;

(b) verify the reality and finality of payments made by the beneficiary, except in the case of contributions in kind or standard costs;

(c) ensure that the same investment has not been financed in an irregular manner from different national or Community sources.

3. The ex-post checks shall cover each year at least 1 % of eligible expenditure for operations referred to in paragraph 1 for which the final payment has been made. They shall be carried out within 12 months of the end of the relevant EAFRD year.

4. The ex-post checks shall be based on an analysis of the risks and financial impact of different operations, groups of operations or measures.

The controllers for the ex-post checks shall not have been involved in pre-payment checks of the same investment operation.

SECTION II U.K. Reductions and exclusions

Article 31 U.K. Reductions and exclusions

1. Payments shall be calculated on the basis of what is found to be eligible.

The Member State shall examine the payment claim received from the beneficiary, and establish the amounts that are eligible for support. It shall establish:

(a) the amount that is payable to the beneficiary based solely on the payment claim;

(b) the amount that is payable to the beneficiary after an examination of the eligibility of the payment claim.

If the amount established pursuant to point (a) exceeds the amount established pursuant to point (b) by more than 3 %, a reduction shall be applied to the amount established pursuant to point (b). The amount of the reduction shall be difference between those two amounts.

However, no reduction shall be applied if the beneficiary can demonstrate that he/she is not at fault for the inclusion of the ineligible amount. The reductions shall be applied mutatis mutandis to ineligible expenditure identified during checks under Article 28 and 30.

2. If a beneficiary is found to have intentionally made a false declaration the operation in question shall be excluded from support of the EAFRD and any amounts already paid for that operation shall be recovered. Moreover, the beneficiary shall be excluded from receiving support under the same measure for the EAFRD year in question and for the following EAFRD year.

3. The penalties provided for in paragraphs 2 and 3 shall apply without prejudice to additional penalties provided for under national rules.

CHAPTER II U.K. Specific provisions for Axis 4 (Leader)

Article 32 U.K. Controls

In the case of expenditure incurred under Article 63(c) of Regulation (EC) No 1698/2005, the Member State shall organise controls in conformity with this Title. Those controls shall be carried out by persons independent from the local action group concerned.

Article 33 U.K. Responsibilities for control

1. In the case of expenditure incurred under Article 63(a) and (b) of Regulation (EC) No 1698/2005, the administrative checks referred to in Article 26 of this Regulation may be carried out by local action groups under a formal delegation. However, the Member State remains responsible for verifying that local action groups have the administrative and control capacity to undertake that work.

2. The Member State shall implement an appropriate system of supervision of the local action groups. This shall include regular controls of the operations of the local action groups, including bookkeeping checks and sample reperformance of administrative checks.