Article 72 Financial corrections by the Commission
United Kingdom
The Commission shall make financial corrections by cancelling all or part of the Union contribution to a programme and effecting recovery from the Managing Authority in order to exclude from Union financing expenditure which is in breach of applicable law or related to deficiencies in the programme management and control systems which have been detected by the Commission or the European Court of Auditors.
A breach of applicable law shall lead to a financial correction only in relation to expenditure which has been declared to the Commission and where one of the following conditions is met:
the breach has affected the selection of a project or a technical assistance contract or in cases where, due to the nature of the breach, it is not possible to establish that impact but there is a substantiated risk that the breach has had such an effect;
the breach has affected the amount of expenditure declared by the programme or in cases where, due to the nature of the breach, it is not possible to quantify its financial impact but there is a substantiated risk that the breach has had such an effect.
In particular the Commission shall make financial corrections where, after carrying out the necessary examination, it draws any of the following conclusions:
there is a serious deficiency in the programme management and control systems of the programme which has put at risk the Union contribution already paid;
the Managing Authority has not complied with its obligations under Article 71 prior to the opening of the financial correction procedure under this paragraph;
the expenditure declared in the annual or final report is irregular and has not been corrected by the Managing Authority prior to the opening of the financial correction procedure under this paragraph.
The Commission shall base its financial corrections on individual cases of irregularity identified and shall take account of whether an irregularity is systemic. When it is not possible to quantify precisely the amount of irregular expenditure, the Commission shall apply a flat rate or extrapolated financial correction.
The Commission shall, when deciding the amount of a financial correction under paragraph 3, respect the principle of proportionality taking into account the nature and gravity of the irregularity and the extent and financial implications of the deficiencies in management and control systems found in the programme.
Where the Commission bases its position on reports of auditors other than those of its own services, it shall draw its own conclusions regarding the financial consequences after having heard the Managing Authority and the auditors.
The closure of the programme shall not prejudice the Commission's right to undertake, at a later stage, financial corrections vis-à-vis the Managing Authority.
The criteria for establishing the level of financial correction to be applied and the criteria for applying flat rates or extrapolated financial correction are those adopted in accordance with Regulation (EU) No 1303/2013f1, in particular Article 144, as well as those contained in the Commission Decision of 19 December 2013f2.
Annotations
Footnotes
- f1
-
Regulation (EU) No 1303/2013 of the European Parliament and of the Council of 17 December 2013 laying down common provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund, the European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund and laying down general provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund and the European Maritime and Fisheries Fund and repealing Council Regulation (EC) No 1083/2006 (OJ L 347, 20.12.2013, p. 320).
- f2
-
Commission Decision of 19 December 2013 on the setting out and approval of the guidelines for determining financial corrections to be made by the Commission to expenditure financed by the Union under shared management for non-compliance with the rules on public procurement (C(2013)9527).