According to what is anticipated, the financial audit in the framework of the Operational Programme “Information Society” is conducted in the “Management and Audit System of the Operational Programme of the Community Support Framework 2000-2006".
The said system was compiled in the framework of the obligation of Greece, as a member state of the European Union, to observe the provisions of Regulation (EC) 438/2001, of the Committee of the 2nd March, 2001: “For laying down detailed application rules of Regulation (EC) 1260/1999 of the Council, as regards the management and audit system of the interventions of the Structural Funds”.
It is common for all Operational Programmes and incorporates:
- The provisions included in the regulatory framework for the management and audit systems of the member states and, more specifically, in Regulation (EC) 1260/1999 and Regulations (EC) 438/2001 and 448/2001 which analyse it.
- The institutional framework at a national level which governs all the audit systems, that is:
- Law 2860/2000 for the management, monitoring and audit of the Community Support Framework and other provisions.
- The application provisions for the Community Support Framework which was approved with the approval decision for the CSF of the Commission [Ε(2000) 3450 of 28.11.2000].
- The application provisions for the Operational Programme “Information Society” as approved with the decision of the Commission (C 2001/551) of 14.03.2001
| Preventive audits |
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In 2004, Unit C conducted a preventive legitimacy audit for 27 tenders and contracts, with a budget from 160,000 up to 58,080,000€, following a relevant circular of the Managing Authority of the CSF.
At the same time and following relevant requests of Units B, it conducted a preventive audit for three calls of projects proposed to the Special Management Service for integration and for two contracts of integrated projects without an on-site audit.
Finally, in the framework of preventive audit actions, Unit C concluded and updated the “Ultimate Beneficiaries Guide” with the recent changes of the institutional framework.
This volume concerns the Ultimate Beneficiaries and includes directions for the proper execution of the financed projects, describes and explains the obligations of the Ultimate Beneficiaries as regards the on-site audits and clarifies certain points of the legal framework governing the public services of the procurements and services which are the reason for usual irregularities and deviations leading to financial corrections.
| On-site audits |
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The projects to be audited were selected using a detection methodology of the Ultimate Beneficiaries implementing many projects each one so as to have an audit of the system and the procedures in parallel as well as of the financial management mechanisms of the important Ultimate Beneficiaries. By 31/12/2004, the Special Management Service (SMS) had conducted 39 on-site audits; 38 of these audits were regular ones (6 in 2004) and one extra-ordinary (in 2004).
Twenty nine (29) Ultimate Beneficiaries had been audited in total. They implement 287 actions with a total budget of 1,232,309,785€, that is, 41,24% of the budget of the Operational Programme. In 2004, seven (7) actions were audited on-site, of a total budget of 59,892,026€ (6 actions financed by the European Regional Development Fund [ERDF] and 1 action financed by the European Social Fund [ESF]) implemented by 7 Ultimate Beneficiaries.
The aim of the on-site audits was to verify whether the terms and conditions for the integration of the projects to the Operational Programme “Information Society” were observed and more specifically as regards:
- the observance of legitimacy of the procedures followed in the framework of the project;
- whether the supporting and the other contract documents concerning the carried out expenses are complete and whether their account monitoring was correct and in accordance with the terms of the integration decision;
- the verification of the reliability of the declared particulars by the audited body in the standardized forms of communication with the SMS and, more specifically, of the particulars that the body declares in the following:
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- Technical Report of Project/ Subprojects
- Monthly Expenses Reports
- Quarterly Monitoring Reports
- the certification of the physical scope taking into account the completion stage of the project during the audit.
Problems detected
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From the on-site audits in 2004 conducted by the Audit Unit (C) of the SMS some irregularities and deviations from the national and community legislation were detected. These irregularities can be categorized in systemic irregularities and irregularities concerning the implementation of actions. Indicatively, we mention some of the most important ones.
A) Systemic irregularities
- Deficiencies in the audit and expenses certification system
- Lack of distinguished competencies in the management instruments of the project body
- Weaknesses in the internal audit procedure.
Β) Irregularities concerning the implementation of actions
- Incomplete observance of the publicity rules both as regards the tender calls as well as the promotion of the physical scope of the projects.
- Deviations from the national and community legislation as regards the contractor selection procedure
- Non observance of a separate bank account
- No regular expenses
- Difficult course in auditing expenses
- Delays in the implementation of the physical scope
- Physical scope which does not agree with the approved one
- Vagueness in the description of the physical scope of project contracts.
| Actions taken |
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The SMS took the following actions for the sensitization of the Ultimate Beneficiaries as regards irregularities detected in the on-site audits:
- Organised information meetings of the Ultimate Beneficiaries with special emphasis on specific issues
- Organised meetings with coordination bodies (e.g. ministries) in order to highlight and face both the specific as well as the horizontal problems found out in the audit reports.
| Financial corrections |
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Ten (10) financial correction resolutions were issued in 2004 as the result of prior audits.
The procedure of imposing financial corrections as it is determined by the joint ministerial decision, no 907 (Government Gazette/Β/878/2-7-03) and the application circular dated 8/4/2004 was applied in these cases.
| External Audits |
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Audits were conducted in 2004 for actions of the OP “Information Society” and for the Special Management Service by the Financial Control Committee (EDEL), the Payment Authority and the Court of Auditors. More specifically, the following were conducted in 2004:
- 3 audits by the Financial Control Committee
- 2 audits by the Payment Authority
- 1 audit by the Court of Auditors
| Actions taken in 2004 concerning conducted audits of previous years |
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Α) Audit by the Financial Control Committee (EDEL) (23.9.2003 – 26.9.2003)
The audit was carried out in the action “Training of teachers in the utilisation of the ICTs” with the code Integrated Information Systems (ΟΠΣ) 65109.
The findings of the audit were served to the SMS on 25/5/2004.
The audit unit makes recommendations in its findings about the timely submission of the Monthly Expenses Reports by the Ultimate Beneficiaries, the notification by the Ultimate Beneficiary of the Payment Authority and the CMA about the interests arising from the financing, the fact that the SMS should study the possibility of modifying the financial scheme of the project and accelerate the implementation of the sub-projects that show delay.
Furthermore, it suggested that the trained teachers should be certified by the Ultimate Beneficiary.
Finally, it suggested that the SMS should conduct an audit again upon the conclusion of the action.
The SMS, complying with the recommendations, answered to the above with the document, reg. no. 9381-Γ΄/13.10.2004.
Β) Audit by the Financial Control Committee (15.12.2003 – 18.12.2003)
The Financial Control Committee (EDEL) audited the effectiveness of the management and audit system of the SMS and, more specifically: (a) the “Go-Online” action, with the code Integrated Information Systems (ΟΠΣ) 62014 and more specifically subproject 1 “Strengthening of SMEs in information technology infrastructures – 1st cycle” with EOMMEX (Hellenic Organisation of Small Medium Sized Enterprises and Handicraft SA) being the Ultimate Beneficiary, (b) the action “Procurement of equipment for information technology labs of the Technical Vocational School of Ag. Nikolaos” with the code Integrated Information Systems (ΟΠΣ) 62889 and more specifically subproject 1 " Procurement of equipment for information technology labs of the Technical Vocational School of Ag. Nikolaos” and (c) the action “Procurement and installation of computer equipment of information technology labs in Lyceums, Technical Vocational Schools and ΣΕΚΝ”, with the code Integrated Information Systems (ΟΠΣ) 60515 and more specifically, subproject 1 “Procurement and installation of computer equipment of information technology labs in Lyceums, Technical Vocational Schools and ΣΕΚΝ”.
The findings of the audit were served to the SMS on 10/9/2004.
The audit group reported the following findings and recommendations:
1. To the SMS
The audit group in its findings ascertains shortages in the available means and, more specifically, in staffing, as well as the need for improving the executives’ training. It suggests a more systematic monitoring of the Technical Reports, the as-a- rule application of the comparative assessment of proposals and the systematization of the preventive audits.
The SMS, complying with the recommendations, answered to the above with the document, reg. no 8491-Γ΄/4.2.2005 where it is mentioned that:
- the necessary actions have been taken so that the increase in the personnel is possible (modification of the Joint Ministerial Decision for the setting up of the SMS) and actions for the relocation of the SMS;
- the effort for the systematic monitoring and support of the Technical Reports has been intensified;
- the comparative assessment of the submitted proposals is already being implemented as a rule;
- with the restructuring of the SMS (modification of the Joint Ministerial Decision for the setting up of the SMS), a Preventive Audit Office is organised and operates.
2. To the EOMMEX (Hellenic Organisation of Small Medium Sized Enterprises and Handicraft SA)
The audit group recommends the acceleration of the project implementation and the submission of a request for the modification of the project implementation schedule. Furthermore, it recommends the compliance to the publicity rules in the websites of the body, the timely dispatch of the Monthly Expenses Reports and the Quarterly Monitoring Reports to the Managing Authority and the full agreement of the books with the amounts of money entered in the Integrated Information System.
The relevant answer of the Ultimate Beneficiary which was served to us mentions that the Beneficiary has complied with the above recommendations and the only thing left is the definite agreement of the books with the Integrated Information System for the fiscal year 2002.
| External audits conducted in 2004 |
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Α) Audit by the Payment Authority (26.1.2004 - 30.1.2004)
It was carried out with the aim of auditing the management and control system of the SMS of the OP “Information Society” as well as of the action “GO-ONLINE” of the Ultimate Beneficiary (EOMMEX), with the code Integrated Information System (ΟΠΣ) 62014.
The findings of the audit were served to the SMS on 7.1.2005.
The audit group made recommendations to the SMS as regards the compilation of an internal operation regulation as well as the establishment of an internal audit, the promotion of the observations about the Integrated Information System operation to a central level, the auditing of the Technical Assistance projects by the competent Audit Unit of the SMS with the SMS as an Ultimate Beneficiary for possible fragmentations and the publication of a new invitation for the compilation of an evaluators register.
The SMS, complying with the recommendations, answered to the above with the document, reg. no. 1604-Γ΄/1.3.2005 where it is mentioned that:
- the internal audit of the operation will also be included in the application framework of the ISO 9001 standard;
- a help-desk is systematically used for the submission of proposals which aim at improving and complementing the operation of the Integrated Information System;
- the auditing of the Technical Assistance projects with the SMS as an Ultimate Beneficiary is scheduled;
- There is cooperation with the CMA in order to deal with the issue of compiling an evaluators’ register.
Β) Audit by the Court of Auditors (16.2.2004 - 20/2/2004)
The following actions of the Operational Programme “Information Society” were audited:
1. Measure 2.1 “Study about the preparation of the operational programme of the Ombudsman” with the code Integrated Information System (ΟΠΣ) 58427 and the Ombudsman as the Ultimate Beneficiary.
2. Measure 2.2 “Citizen Service Centre of the Municipality of Pefki”, with the code Integrated Information System (ΟΠΣ) 72930 and the Municipality of Pefki as the Ultimate Beneficiary.
3. Measure 3.2 “Transition of the information system of the Public Prosecutor’s Office of the Court of First Instance of Athens to Euro”, with the code Integrated Information System (ΟΠΣ) 60123 and the Public Prosecutor’s Office of the Court of First Instance of Athens as the Ultimate Beneficiary.
4. Measure 3.2 “Adjustment of all the information systems of the Athens Eye-Clinic which support the financial management procedures in Euro” with the code Integrated Information System (ΟΠΣ) 65992 and the Athens Eye-Clinic as the Ultimate Beneficiary.
The audit group ascertained the following per each audited Ultimate Beneficiary:
- Ombudsman: The way the contractor was paid through the credits recorded for the implementation of the Local Government Authorities projects was considered irregular.
- The Athens Eye-Clinic: The following expenses were considered not selectable: a) for the “Education and support of the system” given the fact that the “contractors of information technology projects in the public sector are obliged, apart from the other contractual responsibilities and obligations, to educate personnel of the body of the procurement…”; b) the “expenses for the technical support for a period of 3 months from the operation of each application in Euro” since this service was a contractual obligation of the contractor.
- Citizen Service Centre of the Municipality of Pefki: In accordance with the above mentioned in the findings of the audit report: a) Subproject 1 (Procurement and installation of the information technology equipment) was not implemented in a legal way as no tender was conducted but the procurement was directly awarded; b) the other subprojects were implemented by the same contracting company which is not legalized as regards the awarding and implementation procedure because the physical scope of the Subprojects is essentially different from the objectives of the said company as numbered in its Articles of Association; c) the expenses arising from the signed contracts between the Ultimate Beneficiaries and the contracting parties of the project contract for the period of time between 1.11.2003 until 11.3.2004 are not selectable as no actions have been taken for the modification of the integration decision in the part concerning the project implementation schedule; d) the full payment of the contracting parties is not legal as they have not issued the required tax certified provision of services receipt; e) the way of the money flow followed, that is, indirect in the beginning and then direct payment, is not anticipated by the applicable legal framework.
The answer of the Ultimate Beneficiaries to the Court of Auditors has not been served to the SMS.
C) Audit by the Payment Authority (22.4.2004 – 26.4.2004)
The audit was conducted in the action “Adjustment of the information technology systems of the Institute of Geology and Mineral Exploration to Euro”, with the code Integrated Information System (ΟΠΣ) 53528 and in the headquarters of the Ultimate Beneficiary, that is, the “Institute of Geology and Mineral Exploration”.
The findings of the audit were served to the SMS on 9.7.2004.
The audit group ascertained that there were problems in the tender procedure as regards the suitability of the criteria of quality selection and award, the implementation of the physical scope, the auditing mechanism of the body for the approvals of the payments as well as the financial management system of the project.
The result of these findings was to impose a financial correction on the Ultimate Beneficiary which came up to 98,870.91€.
Furthermore, the court of auditors recommends to the Ultimate Beneficiary to avoid the confusion of the quality selection and award criteria in tenders, to strengthen the system and procedures of internal audit and re-examine the strategic planning and the implementation procedures of co-financed projects.
It is recommended that the SMS of the Information Society should carry out on-site implementation or completion audits for all co-financed projects of its competency having the Institute of Geology and Mineral Exploration as the Ultimate Beneficiary. This recommendation has been taken into account during the annual audit planning of the SMS of the Information Society.
D) Audit by the Financial Control Committee (19.7.2004)
The following actions were audited:
- “Advanced telematic services for the bodies of the academic network (GUnet), with the code Integrated Information System (ΟΠΣ) 62054, with the Greek Universities Network (GUnet) as an Ultimate Beneficiary.
- “Training in basic skills in the use of ICTs” with the code Integrated Information System (ΟΠΣ) 71591, with the “Special Application Service of Co-Financed Actions by the ESF” as an Ultimate Beneficiary and the Vocational Training Centre MENTOR Ekpedeftiki SA as a contractor for the implementation of Subproject 155.
The aim of the audit carried out in the above mentioned Ultimate Beneficiaries by the SMS of the Information Society was to ascertain:
- the existence of an adequate audit course;
- the rational management of the programme in relation to the audited projects by the Managing Authority as well as the effective execution of the actions by the Ultimate Beneficiaries;
- the implementation progress of the projects in accordance with the national and community provisions;
- the completeness and legality of the supporting documents and other payment particulars;
- the implementation of the physical scope of the actions, their consequences and results.
The findings of the audit were served to the SMS on 24.2.2005.
The audit group made recommendations to the SMS as regards the staffing of Unit C with specialized personnel, the organisation of a monitoring system of lodging monthly- quarterly reports and the auditing of the project “Training in basic skills in the use of ICTs” by the SMS of the Information Society.
The SMS, complying with the recommendations, answered:
- Unit C is in fact under staffed and they have asked for 6 employees, two of whom information technology executives, in order to be strengthened.
- It has been anticipated that a monitoring system will be set up in order to monitor the lodging of monthly – quarterly reports per Ultimate Beneficiary and per action within the current year in the framework of the project “Development and maintenance of a portal” of the SMS of the Information Society.
- The audit of the project “Training in basic skills in the use of ICTs” has been included in the annual audit programming of the SMS of the Information Society.
As regards the Greek Universities Network (GUnet) it was recommended to calculate the credit interests of the 1st payment instalment and make them known to the Managing Authority.
The Ultimate Beneficiary sent the document no 357/12-5-2005 to the Managing Authority with the amount of the credit interests of the 1st payment instalment.
As regards the Special Application Service of co-financed actions by the ESF, it was recommended to observe the submission deadlines of the Monitoring Reports and make the payments to the contractors in agreement with the approved financial scheme.
No relevant answer of the Ultimate Beneficiary to the Financial Control Committee has been served to the SMS.
Ε) Audit by the Financial Control Committee (27.9.2004)
The following actions were audited:
a) “ARIADNE: A system of providing services and administrative information for citizens”, with the code Integrated Information System (ΟΠΣ) 60437 and the Ministry for the Interior, Public Administration and Decentralisation as the Ultimate Beneficiary;
b) “Development of a national research and technology network GRNET 2 (1st Phase)”, with the code Integrated Information System (ΟΠΣ) 61088 and the GRNET SA as the Ultimate Beneficiary.
The aim of the audit was:
As regards the SMS of the Information Society to audit: 1) the integration procedure of the audited actions in the Operational Programme “Information Society”, 2) the monitoring of the actions, in accordance with the national and community provisions, 3) the operation of Unit C of the SMS and 4) the implementation progress of the Operational Programme “Information Society”.
As regards the Ultimate Beneficiaries to ascertain: 1) the smooth execution progress of the action in accordance with the national and community provisions, 2) the completeness and legality of the supporting documents and other particulars.
The findings of the audit report were served to the SMS on 21.4.2005.
The audit group made recommendations to the Ultimate Beneficiaries as follows:
- To the Ministry for the Interior, Public Administration and Decentralization to assign directly a person responsible for subproject 7 and inform the Payment Authority as regards the interests arising for the audited subproject from the keeping of an interest bearing account by the Hellenic Agency for Local Development and Local Government SA.
- To the GRNET SA to keep separate accounts for the projects it implements and determine the ascertained difference in financing and declared expenses.
- No relevant answers of the involved Ultimate Beneficiaries to the Financial Control Committee have been served to us.
F) Audit by the Financial Control Committee (4.10.2004)
It was carried out in the action of Measure 3.5 “Programme of acquiring work experience (Stage) in information technology and communications specializations for unemployed degree holders”, with the code Integrated Information System (ΟΠΣ) 75336.
The audit was carried out in the SMS of the Operational Programme “Information Society”, the Ultimate Beneficiary of the project, which is the Greek Manpower Employment Organisation (OAED) and to the contractors of the subprojects with on-site visits: “Programme of acquiring work experience in information technology and communications specializations for unemployed degree holders by the Employment Promotion Centre of Ag. Paraskevi” and “Programme of acquiring work experience in information technology and communications specializations for unemployed degree holders by the Employment Promotion Centre of Patra”.
The aim of the audit was to ascertain:
- the existence of an adequate audit course;
- the rational management of the programme in relation to the audited projects by the Managing Authority as well as the effective execution of the action by the Ultimate Beneficiary;
- the implementation progress of the projects in accordance with the national and community provisions;
- the completeness and legality of the supporting documents and other payment particulars;
- the implementation of the physical scope of the action, its consequences and results
The findings of the said audit were served to the SMS on 29.3.2005.
The audit group recommends that the project should be audited by the SMS “Information Society”. This recommendation has been taken into account in the annual audit programming of the SMS “Information Society”.
As regards the Ultimate Beneficiary (OAED) it was recommended that the Monitoring Reports should be submitted in time. As regards the bank account through which the financing of the project is carried out, this must be charged only with expenses of the project. Furthermore, it is recommended to calculate the credit interests and inform the SMS “Information Society” about them.
No relevant answer of the Ultimate Beneficiary to the Financial Control Committee has been served to the SMS.