Presentation by the Presentation by the Northern Ireland Paying Agency Northern Ireland Paying Agency Our experience of the Our experience of the Audit of Legality and Regularity Audit of Legality and Regularity Andrew Elliott Andrew Elliott – Director of Area Based Schemes Director of Area Based Schemes Richard Crowe Richard Crowe – Head of Integrated Controls Head of Integrated Controls
A beautiful and diverse landscape A beautiful and diverse landscape
The challenge of diversity and land eligibility The challenge of diversity and land eligibility
The Scale of the Paying Agency • 750,000 field parcels • 38,000 claimants • Single Payment, Natural Handicap and Agri- environment Schemes
Disallowance • Hurts more than the Audit of Legality and Regularity! • 5% flat rate correction to Area Aids for Pillar 1 and 2 area based schemes from 2005-2008 • Successive critical commission Audit reports: • LPIS weaknesses • On the spot check weaknesses • Method of applying penalties
Our response • Significant change • On the spot control to a programme (£20m spent high standard to date) • Crucial importance of • Major communications demonstrating exercise improvements to Commission • New LPIS introduced 2013 • Voluntary audit of legality • Significant reductions in and regularity attractive area error and risk to for us fund achieved
AUDIT OF LEGALITY & REGULARITY • AGRI/D(2010) 251540 Rev1 • To provide reinforcement of assurance of IACS environment 2011 and 2012 • Paying Agency – Department of Agriculture and Rural Development • Certifying Body – the Northern Ireland Audit Office
AUDIT OF LEGALITY & REGULARITY To present concisely the evidence gained, together with clear statements regarding the following: • A conclusion as to whether the amounts found eligible for payments as established by the PA, recorded in its database/records and paid are free from material misstatements. • A conclusion as to whether the control statistics reported to Commission are correctly compiled and reconciled to the database by the PA, & are free from material misstatements.
Assessment and Stages of the Audit As per AGRI/D(2010) 251540 Rev1 the CB is required to prepare a Report of their findings including an assessment of; 1. The control environment – assessment of 3 control elements; administrative controls, OTS checks and payment controls 2. Detailed testing - PA OTS checks re-performed in the field. Confirming the eligibility of the payments made by the PA and recorded in its database/records 3. Validating the control statistics reported to the Commission 4. The report must be submitted by 1 September each year
Timetable 2011-2013 • 2011 • June – November OTSC carried out • June Audit Strategy prepared • July Procurement of services by CB • September Commission training • October-December Field re-performance visits (57) • 2012 • February - April Administration and payment checks • May – June Compilation of draft report • 15 July Submission of control statistics • August 2011 Report finalised and sent to the Commission • September 2012 Audit preparation and procurement October – February Field re-performance visits (71) • • 2013 • March - May Administration and payment checks
CB Legality and Regularity Assessment of 2011
Assessment and Stages of the Audit - CB submitted the completed Audit of Legality and Regularity Report for 2011 on schedule before 1 September 2012 - ECA Audit October/November 2012 - Commission considering response to 2011 audit
Challenges for the Paying Agency 1. Time and cost – some Euro 250,000 excluding internal staff and resource cost creating organisational pressures 2. Delayed training 3. Re-performance for internal controls – additional work pressure at all levels of control staff 4. Further resource pressures due to almost full re- performance of CB and PA re-performance by ECA 5. Farmer experience and resistance
Challenges for the Paying Agency The potential farmer experience Visit 1 PA first OTS field check Visit 2 PA supervisory reperformance Visit 3 PA Internal Audit reperformance Visit 4 CB Legality and Regularity reperformance Visit 5 ECA reperformance Visit 6 EC J5 reperformance? Visit 7 ECA J3 reperformance?
Challenges for the Certifying Body 1. Draft guideline too prescriptive on level of control assurance to be taken in the first year of implementation without due regard to previous knowledge and assessments 2. Draft guideline for 2011 and 2012 not based on International Standards of Auditing 3. Some areas of clarity were sought and received from the Commission about the logistics of carrying out re-performances
The Department of Agriculture and Rural Development as the Paying Agency for NI; • Welcome the positive report of the Certifying Body in respect of the Audit of Legality and Regularity 2011, and have repeated the audit in 2012, with all field visits completed to date • Recognise the challenges of delivering the Audit, particularly the significant expense and personnel needed, and the lack of integration with the PA internal re-performance checks • Look forward to the European Commission providing feedback on the 2011 report and further clarity on this process for CAP reform Audit of Legality and Regularity Audit of Legality and Regularity
Thank you for your attention Thank you for your attention
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