Division 5 AUDITS OF OPERATIONS

This section shall include the following information:

1. 5.1

   Indication of the bodies (including the audit authority) that carried out the audits of operations (as foreseen in Article 127(1) of the Regulation (EU) No 1303/2013 and Article 27 of Regulation (EU) No 480/2014).

2. 5.2

   Description of the sampling methodology applied and information whether the methodology is in accordance with the audit strategy.

3. 5.3

   Indication of the parameters used for statistical sampling and explanation of the underlying calculations and professional judgement applied. The sampling parameters include: materiality level, confidence level, sampling unit, expected error rate, sampling interval, population value, population size, sample size, information on stratification (if applicable). The underlying calculations for sample selection and the total error rate (as defined in Article 28(14) of Regulation (EU) No 480/2014) shall be disclosed in section 10.3 below, in a format allowing an understanding of the basic steps taken, in accordance with the specific sampling method used.

4. 5.4

   Reconciliation between the total expenditure declared in euro to the Commission in respect of the accounting year and the population from which the random sample was drawn (column ‘A’ of table in section 10.2 below). Reconciling items include negative sampling units where financial corrections have been made in respect of the accounting year.

5. 5.5

   Where there are negative sampling units, confirmation that they have been treated as a separate population according to Article 28(7) of Commission Delegated Regulation (EU) No 480/2014. Analysis of the principal results of the audits of these units, namely focusing on verifying whether the decisions to apply financial corrections (taken by the Member State or by the Commission) have been registered in the accounts as withdrawals or recoveries.

6. 5.6

   In case of the use of non-statistical sampling, indicate the reasons for using the method in line with Article 127(1) of Regulation (EU) No 1303/2013, the percentage of operations/expenditure covered through audits, the steps taken to ensure randomness of the sample (and thus its representativity) and to ensure a sufficient size of the sample enabling the audit authority to draw up a valid audit opinion. A projected error rate is calculated also in case of non-statistical sampling.

7. 5.7

   Analysis of the principal results of the audits of operations, describing the number of sample items audited, the respective amount and types^f1 of error by operation, the nature^f2 of errors found, the stratum error rate and corresponding main deficiencies or irregularities^f3, the upper limit of the error rate (where applicable), root causes, corrective measures proposed (including those intending to avoid these errors in subsequent payment applications) and the impact on the audit opinion. Where necessary, provide further explanations on the data presented in sections 10.2 and 10.3 below, in particular concerning the total error rate.

8. 5.8

   Explanations concerning the financial corrections relating to the accounting year and implemented by the certifying authority/managing authority before submitting the accounts to the Commission, and resulting from the audits of operations, including flat rate or extrapolated corrections, as detailed in section 10.2 below.

9. 5.9

   Comparison of the total error rate and the residual total error rate^f4 (as shown in section 10.2 below) with the set materiality level, in order to ascertain if the population is materially misstated and the impact on the audit opinion.

10. 5.10

    Information on the results of the audit of the complementary sample (as established in Article 28(12) of Regulation (EU) No 480/2014), if any.

11. 5.11

    Details of whether any problems identified were considered to be systemic in nature, and the measures taken, including a quantification of the irregular expenditure and any related financial corrections.

12. 5.12

    Information on the follow-up of audits of operations carried out in previous years, in particular on deficiencies of systemic nature.

13. 5.13

    Conclusions drawn from the overall results of the audits of operations with regard to the effectiveness of the management and control system.