Our experience of the Our experience of the Audit of Legality and - - PowerPoint PPT Presentation

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

programme (£20m spent to date)

• Major communications

exercise

• New LPIS introduced 2013
• Significant reductions in

area error and risk to fund achieved

• On the spot control to a

high standard

• Crucial importance of

demonstrating improvements to Commission

• Voluntary audit of legality

and regularity attractive for us

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

• 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

As per AGRI/D(2010) 251540 Rev1 the CB is required to prepare a Report of their findings including an assessment of;

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

• rganisational 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

• ut re-performances

Audit of Legality and Regularity Audit of Legality and Regularity

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

Thank you for your attention

Thank you for your attention