The current CAP framework set up by the European Commission has 'significant design weaknesses', according to a new report.
The new role for national audit bodies of checking the legality and regularity of spending under the Common Agricultural Policy (CAP) is a 'positive step', but the current framework has 'significant design weaknesses', according to the report from the European Court of Auditors.
The auditors examined the framework set up to enable national Certification Bodies to form their opinions in line with EU regulations and international audit standards. They make a number of recommendations for improvement, to be included in new Commission guidelines due into force from 2018.
Certification Bodies appointed by the EU Member States have been independently auditing their respective country’s CAP paying agencies since 1996.
Since 2015, they have also had to provide an opinion on the legality and regularity of spending for which reimbursement has been requested from the Commission.
'Significant weaknesses'
The auditors conclude that “The framework designed by the Commission for the first year of the new system has significant weaknesses. As a result, the Certification Bodies’ opinions do not fully comply with audit standards and rules in important areas.”
The auditors note that the Commission’s assurance model continues to be based on the Member States’ control statistics. In 2015, the Certification Bodies’ opinion was merely one factor taken into account.
Once the Certification Bodies’ work is done in a reliable manner, say the auditors, it should become the key element.
The auditors identified a number of weaknesses in the guidelines, relating to the risk of inflating assurance derived from internal controls, the representativeness of samples, the type of testing allowed, the calculation of two different error rates and how these rates were used, and opinions being based on an understated error.
The CAP has a budget of €363 billion for the 2014-2020 period, which represents around 38% of the total amount of the multiannual financial framework 2014-2020.
