In accordance with European regulations, all expenditure of beneficiaries of European Union (EU) funds needs to comply with the applicable national and European legislation.
In accordance with European regulations, all expenditure of beneficiaries of European Union (EU) funds needs to comply with the applicable national and European legislation. When discrepancies are found, Member States are required to impose financial corrections which represent a deduction in the grants provided to the beneficiaries under the respective operational programmes.
Financial corrections pose one of the main risks to Bulgaria in the effective use of EU Structural and Cohesion Funds and, as a result, to the successful implementation of the EU Cohesion Policy in our country. This calls for the establishment of a mechanism to analyse them regularly at national level. It would help to improve the overall EU funds management through identifying, at an early stage, potential areas for enhancement of the control systems, thus helping to manage the risk of imposing financial corrections.
To assist the Council of Ministers to improve EU funds managements, KPMG conducted a review of the reasons why financial corrections are imposed in the seven operational programmes under the Structural and Cohesion Funds in Bulgaria as of 31 December 2013.
KPMG proposed measures to reduce financial corrections in the future, including resolving problems related to public procurement, optimization and development of the methodology on financial corrections, enhancement of the management and control systems of Managing Authorities, and obtaining higher sustainability of investments.
KPMG presented the main results of its analysis of financial corrections at a round table with all stakeholders at the Council of Ministers on 1 September 2014. In the following months, some of the measures proposed by KPMG were introduced through legislation, including improvement of the appeal procedure, introduction of a mechanism for sharing the responsibility for the financial corrections between the beneficiaries and Managing Authorities, and regular analysis of the financial corrections.
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