F3The relevant authority shall provide for appropriate procedures for submitting applications for support, payment claims and other declarations relating to non-area-related or non-animal-related rural development measures.

For measures under Articles 15(1)(b), 16(1) F4and 19(1)(c), and Article 27 of Regulation (EU) No 1305/2013, the beneficiary shall submit an annual payment claim.

Administrative checks shall be carried out on all applications for support, payment claims or other declarations required to be submitted by a beneficiary or a third party, and shall cover all elements that can be checked and are appropriate to be checked by means of administrative checks. The procedures shall require recording of the control work undertaken, the results of the verification and the measures taken in the event of discrepancies.

Administrative checks on applications for support shall ensure the compliance of the operation with applicable obligations established by F5the law applying in the constituent nation or by the rural development programme, including those of public procurement, State aid and other obligatory standards and requirements. The checks shall in particular include verification of:

1. (a)

   the eligibility of the beneficiary;

2. (b)

   the eligibility criteria, commitments and other obligations of the operation for which support is requested;

3. (c)

   F6compliance with the selection criteria, where those criteria apply;

4. (d)

   the eligibility of the costs of the operation, including compliance with the category of costs or calculation method to be used when the operation or part of it falls under Article 67(1)(b), (c) and (d) of Regulation (EU) No 1303/2013;

5. (e)

   F6for costs referred to in Article 67(1)(a) of Regulation (EU) No 1303/2013, excluding contributions in kind and depreciation, a verification of the reasonableness of the costs submitted. The costs shall be evaluated using a suitable evaluation system, such as reference costs, a comparison of different offers or an evaluation committee. For operations with a support rate up to 30 % or for operations supported under Article 35 of Regulation (EU) No 1305/2013, the verification of the reasonableness of the costs may be carried out at the stage of the administrative checks on payment claims. For operations with eligible costs up to EUR 5 000, the reasonableness of the costs may be established by a draft budget agreed ex ante by the managing authority.

Administrative checks on payment claims shall include in particular, and where appropriate for the claim in question, verification of:

1. (a)

   F6the completed operation compared with the operation for which the application for support was granted;

2. (b)

   the costs incurred and the payments made, except where a form or method as referred to in Article 67(1)(b), (c) or (d) of Regulation (EU) No 1303/2013 is applied.

Administrative checks shall include procedures to avoid irregular double financing with other F7schemes in the constituent nations and with the previous programming period. Where financing from other sources exists, those checks shall ensure that the total support received does not breach the maximum permissible amounts or support rates.

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

However, the competent authority may decide not to carry out such visits for duly justified reasons, such as the following:

1. (a)

   the operation is included in the sample for an on-the-spot check to be carried out in accordance with Article 49;

2. (b)

   the competent authority considers that the operation in question is a small investment;

3. (c)

   the competent authority considers that the risk that the conditions for receiving support are not met is low, or that the risk that the investment has not been realised is low.

The decision referred to in the second subparagraph and its justification shall be recorded.

Administrative checks shall be carried out on all applications for support, payment claims or other declarations required to be submitted by a beneficiary or a third party, and shall cover all elements that can be checked and are appropriate to be checked by means of administrative checks. The procedures shall require recording of the control work undertaken, the results of the verification and the measures taken in the event of discrepancies.

Administrative checks on applications for support shall ensure the compliance of the operation with applicable obligations established by the law applying in the constituent nation or by the rural development programme, including those of public procurement, ... and other obligatory standards and requirements. The checks shall in particular include verification of:

1. (a)

   the eligibility of the beneficiary;

2. (b)

   the eligibility criteria, commitments and other obligations of the operation for which support is requested;

3. (c)

   compliance with the selection criteria, where those criteria apply;

4. (d)

   the eligibility of the costs of the operation, including compliance with the category of costs or calculation method to be used when the operation or part of it falls under Article 67(1)(b), (c) and (d) of Regulation (EU) No 1303/2013;

5. (e)

   F6for costs referred to in Article 67(1)(a) of Regulation (EU) No 1303/2013, excluding contributions in kind and depreciation, a verification of the reasonableness of the costs submitted. The costs shall be evaluated using a suitable evaluation system, such as reference costs, a comparison of different offers or an evaluation committee. For operations with a support rate up to 30 % or for operations supported under Article 35 of Regulation (EU) No 1305/2013, the verification of the reasonableness of the costs may be carried out at the stage of the administrative checks on payment claims. For operations with eligible costs up to £5 000, the reasonableness of the costs may be established by a draft budget agreed ... by the managing authority.

Administrative checks on payment claims shall include in particular, and where appropriate for the claim in question, verification of:

1. (a)

   the completed operation compared with the operation for which the application for support was granted;

2. (b)

   the costs incurred and the payments made, except where a form or method as referred to in Article 67(1)(b), (c) or (d) of Regulation (EU) No 1303/2013 is applied.

Administrative checks shall include procedures to avoid irregular double financing with other schemes in the constituent nations and with the previous programming period. Where financing from other sources exists, those checks shall ensure that the total support received does not breach the maximum permissible amounts or support rates.

Administrative checks on investment operations shall include at least one visit to the operation supported or the investment site to verify the realisation of the investment. Those checks shall, to the extent possible, be carried out before the final payment is made for an operation.

However, the competent authority may decide not to carry out such visits for duly justified reasons, such as the following:

1. (a)

   ...

2. (b)

   the competent authority considers that the operation in question is a small investment;

3. (c)

   the competent authority considers that the risk that the conditions for receiving support are not met is low, or that the risk that the investment has not been realised is low.

The decision referred to in the second subparagraph and its justification shall be recorded.

As regards the financial instruments referred to in Article 38(1) and (c) of Regulation (EU) No 1303/2013, paragraphs 1 to 5 of this Article shall neither apply to the contribution to the financial instrument nor to the support to the final recipient. However, Articles 58 and 59 of Regulation (EU) No 1306/2013 and Article 9 of Commission Delegated Regulation (EU) No 480/201424 shall apply.

F12The relevant authority shall organise on-the-spot checks on approved operations using an appropriate sampling basis. Those checks shall, to the extent possible, be carried out before the final payment is made for an operation.

F13By way of derogation from the first sub-paragraph, no physical inspection is required for the on-the-spot checks related to claim year 2021. The competent authority will draw a definitive conclusion from the use of photo-interpretation of satellite or aerial ortho-images or other relevant evidence including such evidence provided by the beneficiary at the request of the competent authority.

The inspectors undertaking the on-the-spot check shall not have been involved in administrative checks of the same operation.

F6The expenditure covered by on-the-spot checks shall represent at least 5 % of the expenditure referred to in Article 46 and co-financed by F14rural development support which is claimed to the paying agency each calendar year and which does not concern operations for which only advance payments have been claimed.

F15Where an operation subject to on-the-spot check has received advance or interim payments, those payments shall be counted towards the expenditure covered by on-the-spot checks as referred to in the first subparagraph.

F16As regards financial instruments, only the payments to the final recipients subject to on-the-spot checks shall be counted towards the expenditure covered by on-the-spot checks as referred to in the first subparagraph.

F6Only checks carried out until the date foreseen for submission of the control data and control statistics according to Article 9 shall be counted towards the achievement of the minimum level referred to in paragraph 1.

Payment claims found not to be eligible after administrative checks shall not be counted towards the achievement of the minimum level referred to in paragraph 1.

Only checks meeting all the requirements of Articles 49 and 51 may be counted towards achievement of the minimum level referred to in paragraph 1.

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

1. (a)

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

2. (b)

   any risk factors identified following F17... checks;

3. (c)

   the type of operation’s contribution to the risk of error in implementation of the rural development programme;

4. (d)

   the need to maintain a balance between the measures and types of operations;

5. (e)

   the need to select randomly between 30 % and 40 % of expenditure.

Where on-the-spot checks reveal any significant non-compliance in the context of a support measure or type of operation, the competent authority shall increase the control rate to an appropriate level in the following calendar year for the measure or type of operation concerned.

By way of derogation from paragraph 1, F18the relevant authority may decide to reduce the minimum level of on-the-spot checks carried out each calendar year as referred to in paragraph 1 to 3 % of the amount co-financed by F19the rural development support.

F20The relevant authority may apply the first subparagraph only if the general conditions for reducing the minimum level of on-the-spot checks laid down F21... in accordance with Article 62(2)(b) of Regulation (EU) No 1306/2013 are fulfilled.

Where any of the conditions referred to in the second subparagraph are no longer met, F22the relevant authority shall immediately revoke their decision to reduce the minimum level of on-the-spot checks. They shall apply the minimum level of on-the-spot checks referred to in paragraph 1 as of the following calendar year.

The expenditure covered by on-the-spot checks shall represent at least 3% of the expenditure referred to in Article 46 and co-financed by rural development support which is claimed to the paying agency each calendar year and which does not concern operations for which only advance payments have been claimed.

Where an operation subject to on-the-spot check has received advance or interim payments, those payments shall be counted towards the expenditure covered by on-the-spot checks as referred to in the first subparagraph.

As regards financial instruments, only the payments to the final recipients subject to on-the-spot checks shall be counted towards the expenditure covered by on-the-spot checks as referred to in the first subparagraph.

Only checks carried out until the date foreseen for submission of the control data and control statistics according to Article 9 shall be counted towards the achievement of the minimum level referred to in paragraph 1.

Payment claims found not to be eligible after administrative checks shall not be counted towards the achievement of the minimum level referred to in paragraph 1.

Only checks meeting all the requirements of Articles 49 and 51 may be counted towards achievement of the minimum level referred to in paragraph 1.

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

1. (a)

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

2. (b)

   any risk factors identified following ... checks;

3. (c)

   the type of operation’s contribution to the risk of error in implementation of the rural development programme;

4. (d)

   the need to maintain a balance between the measures and types of operations;

5. (e)

   the need to select randomly between 30 % and 40 % of expenditure.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

On-the-spot checks shall verify that the operation has been implemented in accordance with the applicable rules and shall cover all the eligibility criteria, commitments and other obligations relating to the conditions for the granting of support, which can be checked at the time of the visit and have not been the subject of administrative checks. They shall ensure that the operation is eligible for F23rural development support.

On-the-spot checks shall verify the accuracy of the data declared by the beneficiary against underlying documents.

This includes a verification that the payment claims submitted by the beneficiary are supported by accounting or other documents, including, where necessary, a check on the accuracy of the data in the payment claim on the basis of data or commercial documents held by third parties.

On-the-spot checks shall verify that the use or intended use of the operation is consistent with the use described in the application for support and for which the support was granted.

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

As regards the financial instruments referred to in F24Article 38(1) and (c) of Regulation (EU) No 1303/2013, paragraphs 1 to 4 of this Article shall neither apply to the contribution to the financial instrument nor to the support to the final recipient. However, Articles 58 and 59 of Regulation (EU) No 1306/2013 and Article 9 of Delegated Regulation (EU) No 480/2014 shall apply.

Ex-post checks shall be carried out on investment operations to verify the respect of commitments pursuant to Article 71 of Regulation (EU) No 1303/2013 or detailed in the rural development programme.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The sample for operations to be checked in accordance with paragraph 1 shall be based on an analysis of the risks and financial impact of different operations, types of operations or measures. F26...

Ex-post checks shall be carried out on investment operations to verify the respect of commitments pursuant to Article 71 of Regulation (EU) No 1303/2013 or detailed in the rural development programme.

The ex-post checks shall cover in each calendar year at least 1 % of rural development support expenditure for investment operations that are still subject to commitment as referred to in paragraph 1 and for which the final payment has been made from the rural development support. Only checks carried out until the end of the calendar year in question shall be taken into account.

The sample for operations to be checked in accordance with paragraph 1 shall be based on an analysis of the risks and financial impact of different operations, types of operations or measures. A sample shall be selected randomly.

Ex-post checks shall be carried out on investment operations to verify the respect of commitments pursuant to Article 71 of Regulation (EU) No 1303/2013 or detailed in the rural development programme.

The ex-post checks shall cover in each calendar year at least 1 % of rural development support expenditure for investment operations that are still subject to commitment as referred to in paragraph 1 and for which the final payment has been made from the rural development support. Only checks carried out until the end of the calendar year in question shall be taken into account.

By way of derogation from the first sub-paragraph, the control rate for ex-post checks shall be at least 0.6 % in calendar year 2021. In calendar year 2021, no physical inspection is required for ex-post checks. The competent authority will draw a definitive conclusion from the use of photo-interpretation of satellite or aerial ortho-images or other relevant evidence including such evidence provided by the beneficiary at the request of the competent authority.

The sample for operations to be checked in accordance with paragraph 1 shall be based on an analysis of the risks and financial impact of different operations, types of operations or measures. Between 20 % and 25 % of the sample shall be selected randomly.

Ex-post checks shall be carried out on investment operations to verify the respect of commitments pursuant to Article 71 of Regulation (EU) No 1303/2013 or detailed in the rural development programme.

The ex-post checks shall cover in each calendar year at least 1 % of rural development support expenditure for investment operations that are still subject to commitment as referred to in paragraph 1 and for which the final payment has been made from the rural development support. Only checks carried out until the end of the calendar year in question shall be taken into account.

The sample for operations to be checked in accordance with paragraph 1 shall be based on an analysis of the risks and financial impact of different operations, types of operations or measures. Between 20 % and 25 % of the sample shall be selected randomly.

Every on-the-spot check under this Section shall be the subject of a control report which makes it possible to review the details of the checks carried out. The report shall indicate in particular:

1. (a)

   the measures and applications or payment claims checked;

2. (b)

   the persons present;

3. (c)

   whether notice was given to the beneficiary of the visit and, if so, the period of prior notice;

4. (d)

   the results of the checks and, where applicable, any particular observations;

5. (e)

   any further control measures to be carried out.

Paragraph 1 shall apply mutatis mutandis to ex-post checks under this Section.

The beneficiary shall be given the opportunity to sign the report during the check, to attest the beneficiary’s presence at the check and to add observations. Where F27the relevant authority makes use of a control report established by electronic means during the check, the competent authority shall provide for the possibility of an electronic signature by the beneficiary or the control report shall be sent without delay to the beneficiary giving him the opportunity to sign the report and to add any observations. Where any non-compliance is found, the beneficiary shall receive a copy of the control report.

F29The relevant authority shall implement an appropriate system for supervision of local action groups.

In respect of expenditure incurred under Article 35(1)(b) and (c) of Regulation (EU) No 1303/2013, F30the relevant authority may delegate the carrying out of the administrative checks provided for in Article 48 of this Regulation to local action groups by a formal act. However, F30the relevant authority shall remain responsible for verifying that those local action groups have the administrative and control capacity to undertake that work.

In case of delegation referred to in the first subparagraph, the competent authority shall carry out regular checks of the local action groups, including bookkeeping checks and repetition of administrative checks on a sample basis.

The competent authority shall also carry out on-the-spot checks as referred to in Article 49 of this Regulation. As regards the control sample for expenditure concerning LEADER, at least the same percentage as that referred to in Article 50 of this Regulation shall apply.

In respect of expenditure incurred under Article 35(1)(a), (d) and (e) of Regulation (EU) No 1303/2013 and Article 35(1)(b) and (c) of that Regulation where the local action group itself is the beneficiary of the support, administrative checks shall be carried out by persons independent of the local action group concerned.

By way of derogation from Article 48(2)(e), in respect of operations implemented by a local action group and covering a group of projects under a common theme, the verification of the reasonableness of costs may be carried out at the stage of the administrative checks on payment claims concerning that group of projects.

In respect of expenditure incurred under Article 69(3)(a) of Regulation (EU) No 1303/2013, administrative checks and on-the- spot checks shall be carried out with reference to the beneficiary and depending on the realisation of the operation concerned. F28 The risk analysis in accordance with Article 50 of this Regulation shall cover, at least once, the operation concerned on the basis of the discounted value of the subsidy.

The competent authority shall ensure, via administrative checks and, if necessary, via in-situ visits to the intermediate financial institutions and to the beneficiary, that the payments to the intermediate financial institutions are in conformity with F31the law applying in the constituent nation and with the agreement concluded between the competent authority and the intermediate financial institution.

If interest rate or guarantee fee subsidies are combined with financial instruments in a single operation targeting the same final recipients, the competent authority shall carry out checks at the level of final recipients only in those cases established in Article 40(3) of Regulation (EU) No 1303/2013.