CHAPTER IVRULES ON CHECKS
SECTION 1General rules
Article 41Reduction of on-the-spot checks
F11.
The relevant authorities may decide to reduce the minimum level of on-the-spot checks in accordance with Article 59(5) of Regulation (EU) No 1306/2013. For the reduced control rate to apply:
(i)
the relevant constituent nation shall conduct an applicable audit that is appropriate in order to deliver an opinion (on the completeness, accuracy and veracity of the annual accounts);
(ii)
the opinion must validate both that the internal control system is functioning properly and that the error rate for the population concerned was below the materiality threshold of 2.0%;
(iii)
the opinion must cover at least the two consecutive financial years preceding the year in which the reduced rate is intended to apply.
F2(1.
The relevant authorities may decide to reduce the minimum level of on-the-spot checks in accordance with Article 59 (5) of Regulation (EU) No 1306/2013 (the relevant authority may use the certification audit results from 2017 to apply the reduced control rate until the scheme year 2019). Thereafter, for the reduced control rate to apply, the relevant constituent nation shall:
(i)
conduct an applicable audit that is appropriate in order to deliver an opinion (on the completeness, accuracy and veracity of the annual accounts);
(ii)
the opinion must validate both that the internal control system is functioning properly and that the error rate for the population concerned was below the materiality threshold of 2.0%;
(iii)
the opinion must cover at least the two consecutive financial years preceding the year in which the reduced rate is intended to apply.
F32.
3.
Where any of the cumulative conditions laid down in paragraph 1 F6or any additional condition provided for in sector-specific legislation is no longer met, F7the relevant authority shall immediately revoke their decision to reduce the minimum level of on-the-spot checks and apply as of the following claim year the minimum level of on-the-spot checks established by the sectoral agricultural legislation.
Article 41Reduction of on-the-spot checks
1.
The relevant authorities may decide to reduce the minimum level of on-the-spot checks in accordance with Article 59 (5) of Regulation (EU) No 1306/2013 (the relevant authority may use the certification audit results from 2017 to apply the reduced control rate until the scheme year 2019). Thereafter, for the reduced control rate to apply, the relevant constituent nation shall:
(i)
conduct an applicable audit that is appropriate in order to deliver an opinion (on the completeness, accuracy and veracity of the annual accounts);
(ii)
the opinion must validate both that the internal control system is functioning properly and that the error rate for the population concerned was below the materiality threshold of 2.0%;
(iii)
the opinion must cover at least the two consecutive financial years preceding the year in which the reduced rate is intended to apply.
1.
The relevant authorities may decide to reduce the minimum level of on-the-spot checks in accordance with Article 59(5) of Regulation (EU) No 1306/2013. For the reduced control rate to apply, the paying agency must confirm that—
(a)
the internal control system is functioning correctly; and
(b)
the error rate for the population concerned was below the materiality threshold of 2.0%.
2.
The relevant authority may decide to reduce the minimum level of on-the-spot checks in accordance with the levels and, where appropriate, the additional conditions laid down in sector-specific legislation.
...
3.
Where any of the cumulative conditions laid down in paragraph 1 or any additional condition provided for in sector-specific legislation is no longer met, the relevant authority shall immediately revoke their decision to reduce the minimum level of on-the-spot checks and apply as of the following claim year the minimum level of on-the-spot checks established by the sectoral agricultural legislation.
Article 41Reduction of on-the-spot checks
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SECTION 2Scrutiny of transactions
Article 42Scrutiny by F8the relevant authorities
1.
The systematic scrutiny of the commercial documents of undertakings referred to in Article 80(1) of Regulation (EU) No 1306/2013 F9shallF9may apply, for each period of scrutiny referred to in paragraph 4 of this Article, to a number of undertakings which may not be less than half the undertakings whose receipts or payments, or the sum thereof, under the system of financing F10of the direct payment and CMO support, exceeded F11EUR 150 000F11£150 000F12in the United Kingdom financial year preceding the beginning of the period of scrutiny in question.
2.
In relation to each scrutiny period, F13the relevant authority F14shallF14mayF15, without prejudice to their obligations laid down in Article 80(1) of Regulation (EU) No 1306/2013, select the undertakings to be scrutinised on the basis of a risk analysis for all measures where it is practicable to do so. F16A relevant authority F14shallF14may submit to the F17Accounting Officer their proposals for the use of the risk analysis at least six months before the beginning of the scrutiny period. The proposals shall include all relevant information concerning the approach, the techniques and the data used for the analysis, and the criteria and expected method of implementation of the checks to be carried out. F18.... Each F19relevant authority F14shallF14may take account of the F20Accounting Officer's comments on the risk-analysis proposal, which F14shallF14may be given within eight weeks of receipt.
3.
For measures for which a F21relevant authority considers the use of a risk analysis not to be practicable, F22it shall be compulsoryF22the relevant authority may scrutinise for undertakings the sum of whose receipts or payments or the sum of those two amounts within the system of financing F23of the direct payment and CMO support exceeded F24EUR 350 000F24£350 000 and which were not scrutinised in accordance with this Regulation and Chapter III of Title V of Regulation (EU) No 1306/2013 during either of the two preceding scrutiny periods F25, to be scrutinised.
4.
Article 43Access to commercial documents
Undertakings shall keep the commercial documents for at least three years, starting from the end of the year in which they were drawn up. F28The relevant authority may prescribe a longer period for the retention of these documents.
F29Article 44Joint actions
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F30Article 45Mutual assistance
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Article 46Annual programmes and reports
1.
The annual programme of scrutinies referred to in Article 84 of Regulation (EU) No 1306/2013 shall be drawn up in accordance with the specimen form shown in Annex XI to this Regulation.
2.
The annual report referred to in Article 86(1) of Regulation (EU) No 1306/2013 shall set out any difficulties encountered and the measures taken to overcome them and put forward, where appropriate, suggestions for improvements.
It shall include detailed information on each of the aspects of the application of Chapter III of Title V of Regulation (EU) No 1306/2013 listed in Annex XII to this Regulation, set out in clearly identified sections under the headings referred to in that Annex.
3.
The information to be submitted under this Article and Article 45 may be communicated in paper form or in electronic form, in a format to be agreed between the sender and the recipient.
F314.
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Article 47Special departments
1.
The special departments referred to in Article 85 of Regulation (EU) No 1306/2013 F32shall be responsibleF32may, in addition to the tasks referred to in that Article F33, for:
(a)
(b)
2.
Special departments shall be entrusted by F37a relevant authority with all the powers necessary to perform the tasks referred to in paragraph 1.
They shall consist of a sufficient number of officials who are suitably trained to carry out those tasks.
3.
F38A relevant authority where the minimum number of undertakings to control is less than 10 shall not be required to establish a special department.