EGESIF_14-0011_Guidance on audit strategy.doc.doc

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21/05/2014

EUROPEAN COMMISSION

EGESIF_14-0011

DRAFT

European Structural and Investment Funds

Guidance for Member States and Programme

Authorities



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)*%T#%TS

+,ST *F A)R*%-MS A%D A..R#/,AT,*%S................................................................................3

,0 PR#AM.+#...........................................................................................................................4

,,0 )*%T#%T *F T# A$D,T STRAT#G-.................................................................................5

. Introduct!on.........................................................................................................................5

". #e$al %as!s and Scope.........................................................................................................&

3. R!s' Assessment..................................................................................................................(

4. Met)odolo$*.......................................................................................................................(

4. %r!e+ descr!pt!on o+ t)e aud!t c*cle................................................................................(

4." For s*stem aud!ts.........................................................................................................,

4.3 For aud!ts o+ operat!ons..............................................................................................."

4 4 For a d!ts o+ t)e acco nts 5



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+,ST *F A)R*%-MS A%D A..R#/,AT,*%S

AA / Aud!t Aut)or!t*

Aud!t %od* / %od* carr*!n$ out aud!ts under AA0s rem!t

AO / Aud!t Op!n!on

CA / Cert!+*!n$ Aut)or!t*

CCI / Code Commun d0Ident!+!cat!on 1re+erence num2er o+ eac) pro$ramme attr!2uted 2* t)e

Comm!ss!on

CR / Control Report

CR 6 Comm!ss!on ele$ated Re$ulat!on 1EU No 4&,7",4 o+ 3.3.",4 supplement!n$

Re$ulat!on 1EU No 3,37",3 o+ t)e European Parl!ament and o+ t)e Counc!l

la*!n$ do8n common prov!s!ons on t)e European Re$!onal evelopment Fund t)e

European Soc!al Fund t)e Co)es!on Fund t)e European A$r!cultural Fund +or Rural

evelopment and t)e European Mar!t!me and F!s)er!es Fund and la*!n$ do8n

$eneral prov!s!ons on t)e European Re$!onal evelopment Fund t)e European

Soc!al Fund t)e Co)es!on Fund and t)e European Mar!t!me and F!s)er!es Fund

CPR / Common Prov!s!ons Re$ulat!on 1Re$ulat!on 1EU No 3,37",3 o+ t)e European

P l! t d + t) C !l + 9 2 ",3 l ! d



,0 PR#AM.+#

:)e o2?ect!ve o+ t)!s document !s to prov!de $u!dance to t)e Aud!t Aut)or!t* 1AA respons!2le

+or t)e preparat!on o+ t)e aud!t strate$* 1)erea+ter @t)e strate$*@ under Art!cle "914 o+ t)e

Common Prov!s!ons Re$ulat!on 1EU No 3,37",3 1CPR appl!ca2le to t)e Structural

Funds and Co)es!on Fund 1)erea+ter @t)e Funds@ and t)e European Mar!t!me and F!s)er!es

Fund 1EMFF.

:)!s $u!dance does not esta2l!s) ne8 reu!rements 2ut sets out t)e Comm!ss!on0s

recommendat!ons +or t)e var!ous sect!ons o+ t)e strate$*. :)ese are dra8n not onl* +rom t)ea2ove6ment!oned prov!s!ons 2ut also +rom t)e Comm!ss!on0s e;per!ence 8!t) aud!t strate$!es

o+ t)e prev!ous pro$ramm!n$ per!od e;!st!n$ !nternat!onall* accepted aud!t standards and

2est pract!ce.

:)e strate$* !s a means o+ esta2l!s)!n$ t)e AABs purpose and determ!n!n$ t)e nature o+ t)e

contr!2ut!on !t !ntends to ma'e 8)!le prede+!n!n$ c)o!ces t)at 8!ll s)ape dec!s!ons and

act!ons2. :)e strate$* !s a 2u!ld!n$ 2loc' !n t)e assurance model +or t)e Funds and EMFF as

!t !s a 5lanning document t)at sets out !n accordance 8!t) Art!cle "914 o+ t)e CPR t)e

aud!t met)odolo$* t)e sampl!n$ met)od +or aud!ts on operat!ons and t)e plann!n$ o+ aud!ts !n

relat!on to t)e current account!n$ *ear 1+or t)e +!rst *ear t)!s means t)e per!od +rom t)e start

date +or el!$!2!l!t* o+ e;pend!ture unt!l 3, >une ",5 and t)e t8o su2seuent account!n$

*ears.

:)e re+erence per!od +or e;pend!ture to 2e aud!ted corresponds to t)e account!n$ *ear. In t)e

! ! d ",4 ",", t)! + ! d t t + > l + N d d !



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,,0 )*%T#%T *F T# A$D,T STRAT#G-

10 ,ntroduction

.. Ident!+!cat!on o+ t)e operat!onal pro$rammes 1CCI num2er and t!tle and Funds

covered 2* t)e aud!t strate$*.

.". Ident!+!cat!on o+ t)e aud!t aut)or!t* respons!2le +or dra8!n$ up mon!tor!n$ and

updat!n$ t)e aud!t strate$* and o+ an* ot)er 2od!es t)at )ave contr!2uted. The status

o$ the audit authorit *nationa%' regiona% or %oca% pub%ic bod+ and the bod in which

it is %ocated

.3. E;planat!on o+ t)e procedure +ollo8ed +or dra8!n$ up mon!tor!n$ and updat!n$ t)e

aud!t strate$*.

:)e e;planat!on o+ t)e procedure de+!ned 2* t)e AA +or dra8!n$ up t)e strate$* s)ould

!nclude 8)ere aud!ts are carr!ed out 2* a 2od* ot)er t)an t)e AA 1)erea+ter @aud!t 2od*@ t)e

process o+ coord!nat!on 8!t) t)at aud!t 2od* cover!n$ not onl* t)e !nstruct!ons transm!tted 2*t)e AA 1top6do8n approac) 2ut also t)e !n+ormat!on prov!ded +rom t)e aud!t 2od* to t)e AA

12ottom6up approac).

In sect!on .3 o+ t)e strate$* t)e AA s)ould descr!2e also t)e process o+ approval o+ t)e

strate$* and )o8 t)e !mplementat!on o+ t)e strate$* 8!ll 2e mon!tored 2* t)e AA to ensure

t)at t)e o2?ect!ves are met !n part!cular 8)en aud!ts are carr!ed out 2* an aud!t 2od*.

C) t t) d!t t t ) ld 2 d! l d ! t! 3 + t) t l t 1@C)



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:)e AA s)ould )ave a clear mandate to per+orm t)e aud!t +unct!on !n accordance 8!t) Art!cle

"9 o+ t)e CPR. :)!s mandate !s ord!nar!l* documented !n an aud!t c)arter t)at s)ould 2e

+ormall* accepted 2* t)e AA 8)en t)e mandate !s not alread* set out !n nat!onal le$!slat!on.-)ere an aud!t c)arter e;!sts +or t)e aud!t +unct!on as a 8)ole t)e AA mandate s)ould 2e

!ncorporated. A stron$ aud!t c)arter contr!2utes to !ncrease t)e !ndependence o+ t)e AA.

For E:C pro$rammes t)e spec!+!c!t!es o+ t)e +unct!ons and respons!2!l!t!es o+ eac) o+ t)e

aud!t actors 1AA $roup o+ aud!tors and ot)er aud!t 2od!es s)ould 2e descr!2ed !n t)e rules o+

procedure. :)e strate$* s)ould re+er to t)e rules o+ procedure. In case t)e AA !s aut)or!sed to

carr* out d!rectl* !ts +unct!ons !n t)e 8)ole o+ t)e terr!tor* covered 2* t)e pro$ramme !t

s)ould 2e !nd!cated +or eac) Mem2er State or t)!rd countr* part!c!pat!n$ !n t)e pro$ramme !+ a nat!onal aud!tor 8!ll ?o!n t)e AA. In case eac) Mem2er State or t)!rd countr* !s respons!2le

o+ carr*!n$ out t)e +unct!ons under Art!cle "9 o+ t)e CPR !t s)ould 2e clearl* descr!2ed +or

eac) Mem2er State or t)!rd countr* part!c!pat!n$ !n t)e pro$ramme 2* 8)om and )o8 t)e

results o+ t)e aud!ts on !ts terr!tor* 8!ll 2e transm!tted to t)e aud!t aut)or!t* !n order +or t)e

aud!t aut)or!t* to per+orm !ts assessment.

.. Ind!cat!on o+ t)e !ndependence o+ t)e aud!t aut)or!t* +rom t)e mana$!n$ aut)or!t* and

cert!+*!n$ aut)or!t*.

.9. Con+!rmat!on 2* t)e aud!t aut)or!t* t)at t)e 2od!es carr*!n$ out aud!ts pursuant to

Art!cle "91" o+ Re$ulat!on 1EU No 3,37",3 )ave t)e reu!s!te +unct!onal

!ndependence 1and or$an!sat!onal !ndependence 8)ere appl!ca2le under Art!cle

"315 o+ Re$ulat!on 1EU No 3,37",3.

Independence !s t)e +reedom +rom cond!t!ons t)at t)reaten t)e a2!l!t* o+ t)e AA to carr* out

!t !2!l!t! d A t! l "9 + t) CPR ! 2! d : )! t) d



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As results +rom Art!cle "314 o+ t)e CPR t)e AA must 2e functionally inde5endent +rom

t)e MA and t)e CA. :)e term @+unct!onall* !ndependent@ means t)at t)e AA does not )ave

an* role !n t)e +unct!ons perta!n!n$ to t)e MA t)e CA or to I%s carr*!n$ out tas's o+ t)emana$!n$ or t)e CA under t)e respons!2!l!t* o+ t)at aut)or!t*. :)!s concept !s also re+lected !n

t)e st para$rap) o+ Art!cle "315 o+ t)e CPR 8)!c) allo8s t)e AA to 2e part o+ t)e same

pu2l!c aut)or!t* or 2od* 1e.$. a m!n!str* to$et)er 8!t) t)e MA and7or t)e CA prov!ded t)at

t)e pr!nc!ple o+ separat!on o+ +unct!ons !s respected and under t)e cond!t!ons set out !n t)e last

para$rap) o+ t)e same prov!s!on.

:)e same approac) appl!es to t)e aud!t 2od!es carr*!n$ out aud!ts under t)e AA0s rem!t. In

case 8)ere aud!t 2od!es are !nternal aud!t un!ts spec!al cons!derat!ons s)ould 2e ta'en !ntoaccount t)e AA s)ould 2e a8are o+ t)e or$an!sat!onal set up and report!n$ l!nes 8!t)!n t)e

or$an!sat!on !n uest!on !n order to est!mate t)e pos!t!on o+ t)e !nternal aud!t un!t and t)e r!s'

o+ !mpa!red !ndependence. For E:C pro$rammes con+!rmat!on o+ t)e !ndependence o+ eac)

mem2er o+ t)e $roup o+ aud!tors s)ould 2e o2ta!ned 2* t)e AA 8)ere t)e mem2ers o+ t)e

$roup o+ aud!tors carr* out aud!t 8or' t)emselves !n t)e!r Mem2er State or

superv!se7outsource t)e aud!t 8or'. In cases 8)ere t)e aud!t 8or' !s outsourced t)e

contractor s)ould 2e o2l!$ed 2* t)e contract to !mmed!atel* !n+orm t)e aud!t aut)or!t* !n caseo+ poss!2le con+l!ct o+ !nterests so t)at t)e aud!t aut)or!t* ass!sted 2* t)e $roup o+ aud!tors

can ta'e appropr!ate measures.

:)e AA s)ould !nd!cate )o8 t)e ment!oned +unct!onal !ndependence !s ensured descr!2!n$

t)e relat!ons 2et8een t)e AA and t)e MA CA and 8)ere appl!ca2le t)e I%s 8!t) re+erence to

t)e relevant or$an!sat!on c)art and t)e report!n$ l!nes 2et8een t)e AA and t)ese 2od!es and

8)ere appl!ca2le t)e pu2l!c aut)or!t* or 2od* to 8)!c) t)e MA and7or t)e CA also report.



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20 +egal .asis and Sco5e

". Ind!cat!on o+ an* nat!onal re$ulator* +rame8or' t)at a++ects t)e aud!t aut)or!t* and !ts+unct!ons.

:)e AA !s e;pected to prov!de under t)!s sect!on an overv!e8 o+ t)e prov!s!ons !n t)e nat!onal

re$ulator* +rame8or' t)at a++ect t)e +unct!ons o+ t)e AA and o+ t)e aud!t 2od!es. :)e AA

s)ould also !dent!+* 8)et)er t)ere are an* d!screpanc!es 2et8een suc) +rame8or' and t)e

relevant EU re$ulat!ons and !+ d!screpanc!es e;!st )o8 t)!s a++ects t)e 8or' o+ t)e AA and o+

t)e aud!t 2od!es. I+ t)!s !s t)e case !t s)ould 2e !nd!cated 8)at act!on 8!ll 2e ta'en 2* t)e

Mem2er State to address t)e d!screpanc!es. I+ t)ere are no d!screpanc!es t)!s s)ould 2espec!+!ed !n t)e strate$*.

"." Con+!rmat!on t)at t)e strate$* covers t)e current account!n$ *ear and t)e t8o su2seuent

account!n$ *ears.

".3 In case o+ a common s*stem spec!+!cat!on o+ t)e common 'e* control elements ?ust!+*!n$ t)e

common s*stem.

Art!cle "914 o+ t)e CPR +oresees t)e poss!2!l!t* o+ ela2orat!on o+ a s!n$le aud!t strate$*8)ere a common s*stem appl!es to more t)an one operat!onal pro$ramme. Cons!der!n$ t)at

t)e !dent!+!cat!on o+ a common s*stem !s done +or t)e purposes o+ determ!n!n$ t)e sampl!n$

approac) !t !s adv!sa2le t)at t)e e;!stence o+ a common s*stem !s a$reed 2* t)e AA. A

common s*stem can 2e cons!dered to e;!st 8)ere t)e same mana$ement and control s*stem

supports t)e act!v!t!es o+ several operat!onal pro$rammes. :)e cr!ter!on to ta'e !nto account

!s t)e presence o+ t)e same 'e* control elements !.e. 8)en t)e +ollo8!n$ elements are

essent!all* t)e same +or a set o+ operat!onal pro$rammes



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&0 Ris6 Assessment

3. E;planat!on o+ t)e overall r!s' assessment met)od +ollo8ed !nclud!n$ an !nd!cat!ono+ t)e r!s' +actors ta'en !nto account !nclud!n$ t)ose +or t)e spec!+!c t)emat!c areas

descr!2ed under para$rap) 4.".3 2elo8 r!s' scor!n$ used t)e e;tent to 8)!c) t)e results

o+ prev!ous aud!ts o+ t)e 2od!es and s*stems )ave 2een ta'en !nto account 1+or e;ample

aud!ts +rom t)e ",,96",3 per!od !+ relevant cover!n$ t)e mana$!n$ aut)or!t* cert!+*!n$

aut)or!t* and !ntermed!ate 2od!es.

3." Procedures +or updat!n$ t)e r!s' assessment.

-)en sett!n$ up t)e overall r!s' assessment met)od +or pr!or!t!s!n$ t)e s*stem aud!t 8or' on

t)e measures 2od!es and7or 'e* reu!rements t)e AA s)ould cons!der t)e relevant r!s' +actors

and appl* t)em to all pr!or!t!es and 2od!es relat!n$ to t)e pro$ramme1s covered 2* t)e

strate$*. Some e;amples 8)!c) ma* 2e cons!dered are t)e +ollo8!n$ amount mana$ement

competence ual!t* o+ !nternal controls de$ree o+ c)an$e o+ sta2!l!t* !n t)e control

env!ronment t!me o+ last aud!t en$a$ement comple;!t* o+ t)e or$an!sat!onal structure t*pe

o+ operat!ons t*pe o+ 2ene+!c!ar!es r!s' o+ +raud etc.

As a 2est pract!ce t)e results o+ t)e AA0s r!s' assessment are reported !n a ta2le 8)ere t)e

pro$rammes and t)e ma!n 2od!es !nvolved !n t)e mana$ement and control s*stem are

class!+!ed 2* r!s' level. A non7e8hausti9e e;ample o+ suc) ta2le !s prov!ded !n section ,,, o+

t)!s document. :)e e;ample ta2le 8ould need to 2e adapted and complemented 2* t)e AA

8!t) t)e r!s' +actors 8)!c) t)e AA cons!ders t)e relevant ones +or t)e pro$rammes concerned.

For small s*stems e.$. 8)ere all 2od!es and ma!n 'e* reu!rements can 2e aud!ted !n t)e +!rst

! t) ! ' t 2 l l 2 t d



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4..3 Re+erence to t)e !nternat!onall* accepted aud!t standards t)at t)e aud!t aut)or!t*

!ntends to +ollo8.

4..4 Re+erence to t)e procedures !n place +or dra8!n$ up t)e control report and aud!t

op!n!on to 2e su2m!tted to t)e Comm!ss!on !n accordance 8!t) Art!cle "915 o+

Re$ulat!on 1EU No 3,37",3.

:)e descr!pt!on o+ t)e plann!n$ and des!$n o+ aud!ts s)ould !nclude a re+erence to mater!al!t*

t)res)olds and ot)er uant!tat!ve and ual!tat!ve +actors to cons!der 8)en assess!n$ t)e

mater!al!t* o+ aud!t +!nd!n$s +or s*stem aud!ts aud!ts o+ operat!ons and aud!ts o+ t)e accounts.

Report!n$ !s !ntended to cover a re+erence to t)e d!++erent p)ases o+ report!n$ 1suc) as dra+t

aud!t reports contrad!ctor* procedure 8!t) t)e aud!tee and +!nal aud!t reports deadl!nes +or

report!n$ +ollo86up processes. :)e descr!pt!on o+ t)e report!n$ s)ould also !nclude an

e;planat!on o+ t)e report!n$ process to 2e used 2et8een t)e aud!t aut)or!t* and t)e

coord!nat!n$ 2od*1!es t)at ma* 2e des!$nated 2* t)e Mem2er State under Art!cle "31& and

Art!cle "&1" o+ t)e CPR. Follo86up processes s)ould 2e descr!2ed so as to !nclude

procedures +or mon!tor!n$ t)e !mplementat!on o+ recommendat!ons and correct!ve measures

result!n$ +rom aud!t reports.

:)e AA0s aud!t manual needs to prov!de a descr!pt!on o+ t)e 8or'!n$ procedures +or t)e

d!++erent p)ases o+ an aud!t !.e. aud!t plann!n$ prel!m!nar* surve* r!s' assessment

per+ormance o+ en$a$ements record!n$ and documentat!on superv!s!on report!n$ ual!t*

assurance process and e;ternal rev!e8 us!n$ t)e 8or' o+ ot)er aud!tors use o+ an* computer

ass!sted aud!t tec)n!ues 1CAA:s sampl!n$ met)ods used etc.

4 5 F E:C l t! + ) t) d!t t) !t ! t d t



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4.".3 Ind!cat!on o+ an* s*stem aud!ts relat!n$ to 'e* reu!rements tar$eted to spec!+!ct)emat!c areas suc) as

6 ual!t* o+ mana$ement ver!+!cat!ons !nclud!n$ !n relat!on to t)e respect o+ pu2l!c

procurement rules State a!d rules env!ronmental reu!rements eual opportun!t!es

6 ual!t* o+ pro?ect select!on and mana$ement ver!+!cat!ons related to t)e

!mplementat!on o+ +!nanc!al en$!neer!n$ !nstruments

6 t)e +unct!on!n$ and secur!t* o+ I: s*stems set up !n accordance 8!t) Art!cles 9"1d"51"1d and "1d o+ Re$ulat!on 1EU No 3,37",3 and t)e!r connect!on 8!t) t)e

I: s*stem @SFC",4@ as +oreseen !n Art!cle 9414 o+ Re$ulat!on 1EU No 3,37",3

6 t)e rel!a2!l!t* o+ data relat!n$ to !nd!cators and m!lestones and on t)e pro$ress o+ t)e

operat!onal pro$ramme !n ac)!ev!n$ !ts o2?ect!ves prov!ded 2* t)e mana$!n$ aut)or!t*

under Art!cle "51"1a o+ Re$ulat!on 1EU No 3,37",3

6 report!n$ o+ !rre$ular!t!es 8!t)dra8als and recover!es

6 t)e !mplementat!on o+ e++ect!ve and proport!onate ant!6+raud measures underp!nned

2* a +raud r!s' assessment !n l!ne 8!t) Art!cle "5141c o+ Re$ulat!on 1EU No

3,37",3

Concern!n$ t)e s*stem aud!ts on t)e rel!a2!l!t* o+ data report!n$ t)e pro$ramme0s

per+ormance t)e AA s)ould assess 8)et)er e++ect!ve controls are !mplemented over

collect!n$ summar!!n$ and report!n$ t)e related data and 8)et)er t)e reported comp!led

+!$ures reconc!le 8!t) t)e source data.



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!0& For audits of o5erations

4.3. Spec!+!cat!on o+ t)e 2od* or 2od!es respons!2le +or t)e aud!t 8or' 1aud!taut)or!t* or ot)er !ndependent aud!t 2od!es as +oreseen !n art!cle "91" o+ Re$ulat!on

1EU No 3,37",3.

4.3." Spec!+!cat!on o+ t)e sampl!n$ met)odolo$* to 2e used !n l!ne 8!t) t)e sa!d

Art!cle "91 !nclud!n$ t)e procedures +or !ts rev!s!on 8)en necessar* t)e cr!ter!a

+or determ!n!n$ t)e assurance level o2ta!ned +rom s*stem aud!ts descr!pt!on o+ t)e

arran$ements to ta'e !nto account t)e proport!onal control o+ operat!onal pro$rammes

as esta2l!s)ed !n Art!cle 4&1 o+ Re$ulat!on 1EU No 3,37",3.:)e sampl!n$ met)odolo$* 1sampl!n$ met)od sampl!n$ un!t and t)e parameters +or

calculat!n$ t)e sample s!e !s determ!ned 2* t)e AA 2ased on pro+ess!onal ?ud$ment and

ta'!n$ !nto account t)e re$ulator* reu!rements and +actors suc) as t)e c)aracter!st!cs o+ t)e

populat!on and t)e e;pectat!on re$ard!n$ t)e level and var!a2!l!t* o+ errors. !++erent

sampl!n$ met)ods and t)e!r respect!ve advanta$es and cons!derat!ons +or t)e!r appl!cat!on are

presented !n t)e @Gu!dance on sampl!n$ met)ods +or aud!t aut)or!t!es@ developed +or t)e

",,96",3 pro$ramm!n$ per!od 1COCOF ,&6,,"6,3 updated vers!on o+ ,47,47",3. :)e

need +or rev!s!n$ t)e sampl!n$ met)odolo$* s)ould 2e assessed re$ularl* and espec!all*

2e+ore eac) sampl!n$ e;erc!se.

On t)e 2as!s o+ Art!cle "&1 o+ t)e CR t)e con+!dence level +or sampl!n$ !s determ!ned

accord!n$ to t)e rel!a2!l!t* level o2ta!ned +rom t)e s*stem aud!ts.

:)e complete c*cle o+ t)e assurance model !s !llustrated 2* t)e sc)eme presented !n sect!on

I o+ t)!s $u!dance.



21/05/2014

:)e approac) to 2e used 2* t)e AA !n re$ard to non6stat!st!cal sampl!n$ must compl* 8!t) t)e

reu!rements o+ Art!cle "91 o+ t)e CPR. As +ollo8s +rom Art!cle "&13 o+ t)e CR t)e

random sample dra8n 2* t)e AA +or !ts aud!ts o+ operat!ons )as to ena2le t)e AA toe;trapolate t)e results to t)e populat!on +rom 8)!c) t)e sample 8as dra8n also !n case a non6

stat!st!cal sampl!n$ met)od !s used. :)e sample s!e necessar* !s determ!ned 2* t)e AA 2ased

on pro+ess!onal ?ud$ment and ta'!n$ account o+ t)e level o+ assurance prov!ded 2* t)e s*stem

aud!ts. :)e m!n!mum reu!rement o+ 5 o+ operat!ons and , o+ t)e e;pend!ture !n Art!cle

"91 o+ t)e CPR corresponds to t)e 02est case scenar!o0 o+ )!$) assurance +rom t)e s*stem.

In l!ne 8!t) anne; 3 o+ t)e ISA 53, t)e )!$)er t)e aud!tor0s assessment o+ t)e r!s' o+ mater!al

m!sstatement t)e lar$er t)e sample s!e needs to 2e. :)ere+ore su2?ect to t)e pro+ess!onal

?ud$ment o+ t)e aud!t aut)or!t* t)e +ollo8!n$ m!n!mum sample s!es are recommended +or

ot)er scenar!os -)en t)e mana$ement and control s*stem prov!des an avera$e assurance 1!.e.

t)e s*stem 8or's 2ut some !mprovements are needed t)e sample s!e s)ould not 2e less t)an

, o+ operat!ons and ", o+ t)e e;pend!ture. In case t)e s*stem 8or's part!all* and

su2stant!al !mprovements are needed t)e sample s!e s)ould not 2e less t)an ", o+

operat!ons and 3, o+ t)e e;pend!ture. F!nall* 8)en t)e s*stem essent!all* does not 8or'

t)e sample s!e s)ould not 2e less t)an 3, o+ operat!ons and 4, o+ t)e e;pend!ture.

4.3.4 Spec!+!cat!on o+ t)e procedure +or recommend!n$ appropr!ate steps to 2e ta'en

2* t)e concerned aut)or!t!es 8)ere errors are detected 1or re+erence to t)e aud!t

manuals or procedures 8)ere t)!s matter !s set out.

:)e procedure on t)e act!on to 2e ta'en 2* t)e AA 1e.$. +urt)er aud!t 8or' needed !nvolv!n$

an add!t!onal sample or a complementar* sample and7or 2* t)e aud!tee 8)en errors

1!nclud!n$ !rre$ular!t!es and suspected +raud are detected s)ould 2e descr!2ed !n t)!s sect!on

! t) t t) AA ' ! t t ) ) t) d!t ' ! ! d t 2 t)



21/05/2014

escr!pt!on o+ t)e causeelement o+ +!nd!n$

Nature o+ cause Related to 8ea'ness !n t)e

MCS reu!r!n$ remed!al

act!ons

Not representat!ve o+

populat!on 1un!ue

es No es

Class!+!cat!on o+ error S*stem!c Random Anomalous

:)e report s)ould also ment!on !+ errors detected 8ere cons!dered as suspected +raud cases

and 8)at t*pe o+ act!on )as 2een or 8!ll 2e !n!t!ated 1transm!ss!on to O#AF to la8

en+orcement aut)or!t!es. All errors !dent!+!ed s)ould 2e corrected 2* t)e MA7CA. -!t)

re$ard to s*stem!c errors t)e +ollo8!n$ add!t!onal steps s)ould 2e ta'en

6 clear !dent!+!cat!on o+ 8ea'nesses to 2e corrected !n t)e mana$ement and control s*stem andde+!n!t!on o+ correspond!n$ act!on plan

6 coord!nat!on o+ t)e 2od!es t!me and resources !nvolved !n t)e !mplementat!on o+ t)e

act!on plan +or treatment o+ s*stem!c errors

6 !n t!me report!n$ c)annels o+ t)e 8or' and act!ons planned and carr!ed out.

:)e AA s)ould assess t)e adeuac* o+ t)e act!on plan and 8)et)er !t )as 2een +ull*

! l t d



21/05/2014

!0! For audits of the accounts

Ind!cat!on o+ t)e aud!t approac) +or t)e aud!t o+ t)e accounts !nclud!n$ t)e procedure

+or recommend!n$ appropr!ate steps to 2e ta'en 2* t)e concerned aut)or!t!es 8)ere

errors are detected. :)e aud!t approac) s)ould ta'e !nto account t)e results o+ t)e

s*stems aud!ts carr!ed out on t)e cert!+*!n$ aut)or!t* results o+ t)e aud!ts on

operat!ons carr!ed out !n accordance 8!t) Art!cle "9 1 o+ Re$ulat!on 1EU No

3,37",3 and ver!+!cat!ons +oreseen !n Art!cle "(15 o+ t)e Comm!ss!on ele$ated

Re$ulat!on.

:)e AA s)ould ensure t)rou$) a s*stem aud!t 1!nclud!n$ control test!n$ t)at t)e CA )as

adeuate procedures !n place +or t)e report!n$ and mon!tor!n$ o+ !rre$ular!t!es and to account

+or t)e amounts to 2e 8!t)dra8n or to 2e recovered and to 2e deducted +rom pa*ment cla!ms

dur!n$ t)e account!n$ *ear as 8ell as to +ollo86up pend!n$ recover!es and !rrecovera2le

amounts.

:)e AA s)ould c)ec' +or eac) account!n$ *ear 2e+ore t)e su2m!ss!on o+ t)e accounts to t)e

Comm!ss!on t)at t)e results o+ an* aud!t or control act!v!t* are adeuatel* re+lected !n t)e

accounts 8)en t)ese aud!ts or controls )ave detected !nel!$!2le e;pend!ture or amounts at

r!s'. :)!s means t)at all !nel!$!2le e;pend!ture !dent!+!ed dur!n$ t)e aud!ts and controls !s

deducted 2e+ore t)e accounts are su2m!tted to t)e Comm!ss!on. :)e +ollo8!n$ aud!ts and

controls s)ould 2e cons!dered

d!



21/05/2014

:0 Audit 4or6 Planned

5. Ind!cat!on and ?ust!+!cat!on o+ t)e aud!t pr!or!t!es and spec!+!c o2?ect!ves !n relat!on

to t)e current account!n$ *ear and t)e t8o su2seuent account!n$ *ears to$et)er 8!t)

an e;planat!on o+ t)e l!n' o+ t)e r!s' assessment results to t)e aud!t 8or' planned.

5." An !nd!cat!ve sc)edule o+ aud!t ass!$nments !n relat!on to t)e current account!n$

*ear and t)e t8o su2seuent account!n$ *ears +or s*stems and t)emat!c aud!ts as

+ollo8s.

Aut)or!t!es7%od!

es or spec!+!c

t)emat!c areas to

2e aud!ted

CCI

num2e

r

Amount

approve

d

%od*

respons!2l

e +or

aud!t!n$

Result o+

r!s'

assessme

nt

20++

Aud!t

o2?ect!v

e and

scope

20++

Aud!t

o2?ect!v

e and

scope

20++

Aud!t

o2?ect!v

e and

scope

A d ! ! + ) ! ! d d ! ) d! ! ! ! d ) ? !+! ! ) ld



21/05/2014

ava!la2le at t)e level o+ t)e AA ot)er aud!t 2od!es and outsourced act!v!t!es separatel*. An

!nd!cat!on o+ ava!la2le aud!tor da*s per aud!t t*pe 1s*stem aud!t aud!t o+ accounts and aud!t

o+ operat!ons s)ould 2e !ncluded as 8ell as a s)ort descr!pt!on o+ t)e pro+ess!onal e;per!enceo+ aud!t sta++.

It !s essent!al to prov!de +or adeuate resources +rom t)e 2e$!nn!n$ o+ t)e pro$ramm!n$

per!od. :)e use o+ :ec)n!cal Ass!stance m!$)t 2e cons!dered as a poss!2!l!t* to meet t)e

needs. It !s recommended to )ave a lon$6term plann!n$ so t)at +uture reu!rements !n

recru!tment tra!n!n$ and cont!nu!n$ pro+ess!onal development can 2e adeuatel* planned !n

advance. :)e use o+ an* spec!al!st s'!lls reu!red s)ould 2e !dent!+!ed.

In case t)e AA and7or aud!t 2od!es are t)e same as t)ose +or t)e pro$ramm!n$ per!od ",,96

",3 !t !s !mportant t)at adeuate resources are also 2e planned 8!t) respect to t)e on6$o!n$

per!od. :)ere+ore t)e AA s)ould con+!rm t)at t)e resources !nd!cated are ava!la2le !n add!t!on

to t)e resources allocated to t)e rema!n!n$ aud!t 8or' +or t)e current pro$ramm!n$ per!od

)av!n$ !n m!nd t)at t)e 8or'load +or t)e closure o+ ",,96",3 pro$rammes 8!ll a++ect mostl*

t)e last t8o *ears o+ t)e +!rst strate$* +or t)e per!od ",46",", !.e. ",5 and ",.

In terms o+ aud!t resources $u!dance !s prov!ded 2* t)e IN:OSAI European Implement!n$Gu!del!nes NQ and t)e IIA standards.



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,,,0 #AMP+# *F A T#MP+AT# F*R A R,S3 ASS#SSM#%T TA.+# (T* .# ADAPT#D .- T# AA"

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Programme

)),

.ody (or

5rogramme

area PA<

measure<

etc"

,nherent ris6 factors;

T o t a l s c o r i n g f o r i n h e r e n t r i s 6 1 m a ; ! m u m F , , N 4

)ontrol ris6 factors

T o t a l s c o r i n g f o r c o n t r o l r i s 6 1 m a ; ! m u m F , , N 4

T o t a l r i s 6

s c o r e ( , n h e r e n t =

c o n t r o l r i s 6 "

%ud$etar*

amount

Comple;!t

* o+ t)e

or$an!sat!o

nal

structure&

Comple;

!t* o+

rules and

procedur

es

-!de

var!et* o+

comple;

operat!ons(

R!s'*

2ene+!c

!ar!es ,

Insu++!c!ent

sta++

and7or

#ac' o+

competenc

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> e$ree

o+

c)an$e

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",,96

",3"

ual!t* o+ !nternal controls

1'e* reu!rements +rom

Gu!dance on t)e assessment

o+ MCS !n t)e Mem2er

States3

e.$.

M.

> > M.&

",4;* MA

I%

For eac) +actor assess r!s' us!n$ a scale t)at ensures t)at t)e ma;!mum total scor!n$ +or t)e !n)erent r!s' !s ,,. -!t) +our r!s' +actors t)e scale can 2e D!$) "5 Med!um "5 #o8

"5. -!t) more r!s' +actors t)!s scale 8ould )ave to 2e mod!+!ed accord!n$l*. Some o+ t)e +actors ma* not 2e appl!ca2le to a $!ven 2od* !n t)!s case t)e scale needs also to 2e ad?usted !n

order to ensure t)at +or t)at 2od* t)e total !n)erent r!s' scor!n$ can reac) ,,

9 For eac) +actor assess r!s' us!n$ a scale t)at ensures t)at t)e ma;!mum total scor!n$ +or t)e control r!s' !s ,,. -!t) t8o r!s' +actors t)e scale 8ould 2e D!$) 5, Med!um "5 #o8

"5. -!t) more r!s' +actors t)!s scales 8ould )ave to 2e mod!+!ed accord!n$l*.

, :)e comple;!t* ma* 2e due to t)e num2er o+ actors7 I%s !nvolved and7or t)e!r relat!on 8!t) eac) ot)er 1e.$. a small s!ed MA respons!2le to superv!se several I%s or to a ne8 MA respons!2le

to superv!se e;per!enced I%s t)at are t)e ones 8!t) t)e e++ect!ve po8er !n t)e mana$ement o+ t)e pro$ramme.

(:)e comple;!t* o+ t)e operat!ons ma* 2e related 8!t) +!nanc!al !nstruments pu2l!c procurement State a!d amon$ ot)er areas 8)ere a )!$) de$ree o+ ?ud$ment and est!mat!on !s !nvolved. :)e

spec!+!c s!tuat!on appl!ca2le to eac) pro$ramme needs to 2e e;pla!ned !n deta!l !n a separate s)eet cross6re+erence to t)e r!s' assessment ta2le., %ene+!c!ar!es 8!t) no e;per!ence 8!t) t)e Funds rules and7or %ene+!c!ar!es 8!t) )!$) error rates !n past aud!ts.

:)e spec!+!c s!tuat!on !n terms o+ )uman resources allocated to t)e pro$ramme0s aut)or!t* needs to 2e e;pla!ned !n deta!l !n a separate s)eet cross6re+erence to t)e r!s' assessment ta2le.

" For e;ample No c)an$es K"5 Some c)an$es K"5 S!$n!+!cant c)an$es or totall* ne8 s*stem K 5,

3 Assessment 2ased on aud!t results +rom ",,96",3 per!od or t)e process o+ assess!n$ compl!ance 8!t) t)e des!$nat!on cr!ter!a. Scale e.$. Cate$or* 5 cate$or* " ", cate$or* 3 35

cate$or* 4 5,

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EGESIF_14-0011_Guidance on audit strategy.doc.doc

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