This book portrays the multilevel governance structure of the EU's Cohesion Policy, describes and critically assesses the evolution of the functions and responsibilities of the national audit authorities. Furthermore, this analysis puts a focal point on the impact of the audit authorities' work on the assurance level of the EU’s spending in the Cohesion Policy.
The European Union (EU) is committed to creating more and better jobs and a socially inclusive society. In this sense, EU cohesion policy plays a key role, as it aims to reduce development disparities between countries and regions, restructure declining industrial areas and encourage cross‐border, transnational and interregional cooperation in the EU in order to strengthening economic, social and territorial cohesion.
The budget for this policy field has developed steadily and represents meanwhile more than one third of appropriations for the current multiannual financial framework. It is therefore the EU’s main investment policy.
In order to achieve Cohesion Policy’s objectives and to ensure high impact for limited funds, a proper and effective management and control system is vital. Cohesion Policy is implemented under shared management, which means that responsibility for implementing the policy and the related funds, including control activities, is shared between the European Commission and the Member States.
For the 2007-2013 programming period, a formal three-level control structure was introduced at national level for the first time, with the audit authority as the first “independent” audit layer. In a multi-level governance system, and based on the single-audit concept, audit authorities act as cornerstones of the overall assurance process by providing the European Commission with assurance as to the effective functioning of the management systems and internal controls for operational programmes – and thus the legality and regularity – of the expenditure certified by the Member State to the Commission.
Together with other structural reforms, the formalisation of the internal control structure with a clear separation of functions and greater independence for management and control bodies is regarded as a material contribution towards a more robust governance system in relation to the audit of Cohesion expenditure.
Table of Contents
1 INTRODUCTION
2 WHAT IS COHESION POLICY ABOUT? – THE FUNDAMENTALS
2.1 Understanding Cohesion Policy
2.1.1 Definition of Cohesion Policy
2.1.2 Importance of Cohesion Policy in the overall political context
2.1.3 Implementation means
2.2 Governance structure and dimensions of Cohesion Policy
2.3 Cohesion Policy from a financial point of view
2.3.1 Financial planning of Cohesion Policy
2.3.2 Financial dimensions of Cohesion Policy
2.4 The multilevel governance system
2.4.1 Multilevel governance as an implementing model for Cohesion Policy
2.4.2 The principle of shared budget management as a result of a multi-level governance structure
2.5 The organisational set-up of Cohesion Policy and its main stakeholders
2.5.1 Main stakeholders at European level
2.5.1.1 The European Commission
2.5.1.2 The Council
2.5.1.3 The European Parliament
2.5.2 Programming and main stakeholders at national and regional level
2.5.2.1 Programming at national and regional level
2.5.2.2 Main stakeholders at Operational Programme level
2.6 The audit authorities’ role
2.7 The single-audit concept
2.7.1 Background
2.7.2 Audit standards and guidance
2.7.3 Benefits of the single-audit concept
2.7.4 General principles for the application of the single-audit concept
3 RESPONSIBILITIES OF AUDIT AUTHORITIES
3.1 Introduction
3.2 Responsibilities of audit authorities
3.2.1 Compliance assessment of the management and control system
3.2.1.1 Programming period 2007-2013
3.2.1.2 Programming period 2014-2020
3.2.1.3 Programming period 2021-2027
3.2.2 Audits of operations
3.2.2.1 Programming period 2007-2013
3.2.2.2 Programming period 2014-2020
3.2.2.3 Programming period 2021-2027
3.2.3 Systems audits
3.2.3.1 Programming period 2007-2013
3.2.3.2 Programming period 2014-2020
3.2.3.3 Programming period 2021-2027
3.2.4 Annual control report
3.2.4.1 Programming period 2007-2013
3.2.4.2 Programming period 2014-2020
3.2.4.3 Programming period 2021-2027
3.2.5 Annual summary / Annual clearance
3.2.5.1 Programming period 2007-2013
3.2.5.2 Programming period 2014-2020
3.2.5.3 Programming period 2021-2027
3.2.6 Work at programme closure
3.2.6.1 Programming period 2007-2013
3.2.6.2 Programming period 2014-2020
3.2.6.3 Programming period 2021-2027
3.2.7 Checks on the reliability of performance data
3.2.7.1 Programming period 2007-2013
3.2.7.2 Programming period 2014-2020
3.2.7.3 Programming period 2021-2027
4 IMPACT OF THE AUDIT AUTHORITIES’ WORK ON THE ASSURANCE LEVEL OF EU SPENDING
4.1 Development of error rates reports by the ECA
4.2 How does the ECA assess the AAs’ work?
4.3 A modified assurance setup for the 2021-2027 programming period
5 CONCLUDING REMARKS
Research Objectives and Key Topics
This study investigates the role of national Audit Authorities as assurance providers within the European Union's Cohesion Policy. It examines the evolution of their responsibilities across several programming periods, exploring the effectiveness of internal control systems and the impact of the single-audit concept on ensuring the legality and regularity of EU-funded projects.
- The multi-level governance structure of Cohesion Policy and its specific management and control requirements.
- The operational evolution of Audit Authorities' tasks across the 2007-2013, 2014-2020, and 2021-2027 programming periods.
- The effectiveness and practical application of the single-audit concept to achieve assurance on EU spending.
- The influence of national audit work on reducing error rates and improving the robustness of the EU's internal control framework.
Excerpt from the Book
2.4.1 Multilevel governance as an implementing model for Cohesion Policy
From a neo-institutional viewpoint, the EU is increasingly viewed as an interconnected multi-level system, with a focus on interaction between the supranational, national and sub-national levels.42
A new school of thought known as multilevel governance emerged in the 1990s. This is essentially a combination of the theory of multi-level negotiations and the governance model of policy coordination and governance.43 According to this school, European integration is “a policy-creating process in which authority and policy-making influence are shared across multiple levels of government – subnational, national, and supranational”.44 Unlike state-centred approaches, which regard the state as a single player and national governments as its decision-makers, the multi-level governance approach disaggregates the state and investigates the decision-making power of individual state authorities.45 Multilevel-governance at European level derives from the EU principle of subsidiarity, which essentially means that authorities should perform only those activities, which cannot be carried out effectively at a lower level.46 The EU multilevel-governance theory is based on a bottom-up policy perspective, where stakeholders at subnational level have an important role to play and possess considerable leeway.47
For this school, national governments still have an important role to play, but their full individual and collective control over political decision-making is refuted for a variety of reasons. According to the multi-level governance model, decision-making powers are exercised at different levels rather than monopolised by state executives. In other words, supranational institutions – above all the European Commission, the Council, and the European Parliament – have independent influence over policy-making that does not derive from their role as agents of state executives.
Summary of Chapters
1 INTRODUCTION: This chapter highlights the commitment of the EU to cohesion and introduces the Cohesion Policy as a dynamic, multilevel investment tool, while outlining the study's focus on the role of national audit authorities.
2 WHAT IS COHESION POLICY ABOUT? – THE FUNDAMENTALS: This chapter defines Cohesion Policy within the EU's political and legal framework, detailing its governance structure, financial planning, and the specific principle of shared management.
3 RESPONSIBILITIES OF AUDIT AUTHORITIES: This chapter provides a comprehensive analysis of the tasks and evolving responsibilities of audit authorities throughout the programming periods, covering compliance assessments, audits of operations, and annual reporting.
4 IMPACT OF THE AUDIT AUTHORITIES’ WORK ON THE ASSURANCE LEVEL OF EU SPENDING: This chapter evaluates how the work of national audit authorities influences the legality and regularity of EU cohesion spending through the analysis of error rates and an assessment of current assurance frameworks.
5 CONCLUDING REMARKS: This final chapter synthesizes the main findings regarding the role of Audit Authorities as the "last line of defence," confirming the correlation between their professionalism and the improvement of the EU’s internal control system.
Keywords
Cohesion Policy, Audit Authority, European Union, Single-audit concept, Financial Management, Internal Control, Multilevel governance, Shared management, Error rates, Assurance, Programming period, Accountability, Legality, Regularity, Structural funds.
Frequently Asked Questions
What is the primary focus of this work?
The work focuses on the role of national Audit Authorities as assurance providers within the EU's Cohesion Policy and how they function as the last line of defence in the internal control framework.
What are the central thematic fields covered?
It covers Cohesion Policy fundamentals, the evolution of audit responsibilities, the single-audit concept, and the impact of audit work on the reliability of EU spending.
What is the primary goal of the research?
The primary goal is to critically assess how audit authorities contribute to the assurance level of EU cohesion expenditure across different programming periods.
Which scientific methods are employed?
The study primarily utilizes a synoptic comparison of the different programming periods (2007-2013, 2014-2020, and 2021-2027) based on legal frameworks, existing academic research, and analyses of audit reports.
What is treated in the main body of the work?
The main body treats the institutional setup of Cohesion Policy, the specific tasks of audit authorities (e.g., system audits, audits of operations), and the evolution of error rates and accountability measures.
Which keywords characterize this work?
Key terms include Cohesion Policy, Audit Authority, Single-audit, Financial Management, and Governance.
How does the transition from 2014-2020 to 2021-2027 affect the Audit Authorities?
The new period introduces simplification measures, such as the removal of the formal designation process, leading to a leaner governance structure but potentially challenging the Audit Authorities' ability to maintain current levels of assurance.
What is the importance of the "single-audit" concept described?
It acts as a governance principle that allows each level of control to build upon the prior audit work, thereby optimizing the use of audit resources and reducing the administrative burden on stakeholders.
- Arbeit zitieren
- Dr. Marcel Bode (Autor:in), The last Line of Defence at national Level for protecting the financial Interests of the European Union in the Cohesion Policy – Audit Authorities’ Role as Assurance Providers, München, GRIN Verlag, https://www.grin.com/document/1225484
