EUROPEAN COMMISSION

DIRECTORATE-GENERAL FOR AGRICULTURE AND RURAL DEVELOPMENT

Directorate J. Audit of agricultural expenditure

Version: 30 December 2022

GENERAL QUESTIONS
Key and Ancillary controls

Questions and Answers

DISLAIMER: The document below is not exhaustive and may be subject to updating or completing as necessary. This document has therefore
been established for information purposes only and as a working tool.
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No Member State Question Answer
MS concerns about the number of key controls – representing an With the KAC lists the COM is putting on paper
increased risk of financial corrections being applied. what has been the practice already in the
application of the current Guidelines, updating
them to take into account the new legal
1. DK, SW, ES, SI framework, notably the new eligibility
conditions. The key and ancillary controls are
all based on legal obligations and the obligation
to control those legal obligations.

Having separate key controls on the quantity and the quality of The reason for separating the qualitative and
controls further increases the risk of financial corrections. Therefore quantitative aspect of key controls is that it is
should be grouped into one key control for on-the-spot checks. necessary to be able to differentiate the amount
at risk between cases where one of the two
Given the wording in the definition of key controls in regulation aspects is not met from cases where both the
907/2014 only three types of key controls should be necessary. Key two are not met.
controls shall be the administrative and on-the-spot checks necessary to
determine the eligibility of the aid and the relevant application of reductions For example, if only 3% of the beneficiary were
and penalties. Legal requirements that do not fit in under these three controlled on-the-spot (i.e. instead of 5%) this is
headings should be considered ancillary. a deficiency in a key control, creating a certain
2. DK, SW, ES
financial risk to the Funds.
It should be possible to respect all legal requirements by transforming
key controls into components. If, in addition to the insufficient level of OTSC,
it is found that the quality of these OTSC is not
Alternatively we would like to suggest two ways of regrouping the legal satisfactory, this is a weakness in a second key
requirements into four key controls. The first suggestion would be 1) control, creating a higher financial risk then in
administrative checks (merge all administrative checks in one key the first case justifying thus a higher financial
control) 2) on-the-spot checks 3) subsidy, reductions and sanctions and correction.
4) national provisions. The second would be 1) eligibility checks 2)
administrative checks 3) on-the-spot checks and 4) subsidy, reductions This logic applies both for the administrative
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No Member State Question Answer
and sanctions. and on-the-spot checks.

See also the answers to questions No. 4. and 5.

The key control to detect of artificial creation of conditions to receive The detection of artificial creation of conditions
premium could be considered as administrative control and to include to receive premium has become a component of
3. ES
also in the proposed unique administrative control. administrative control in all lists.

The number of key- to ancillary controls is out of proportion and does
not reflect the actual risk to the funds. It is Denmark’s opinion that
despite the increased focuses on calculation and extrapolation, the
Commission shoots over the bar. Costly flat-rates ought to give
incentives for precise calculation of the actual risk to the funds, but they
are not in proportion to the actual risk to the funds.
Sweden is hesitant when it comes to the number of controls listed since
this will make flat rate corrections disproportionate.
4. DK, SW, ES Spain thinks that would be very convenient the reduction of the number
of the key and ancillary controls to avoid that the financial corrections
increase with the implementation of the CAP Reform. This reduction of
the number of controls would decrease the risk of flat-rate financial
correction.
The Commission services believe that the
number of key controls reflects adequately the
number of eligibility conditions and the need
to ensure the proportionality with the risk of
flat-rate financial corrections.
The intention of the new legal framework and
the preparation of the KAC lists has not been to
increase current flat-rate corrections, but rather
to provide for more transparency in relation to
the approach applied for the calculation of flat-
rate financial corrections and to indicate -
already at the very early stage of the
conciliation procedure - the possible rate of
financial correction.

It is also to be emphasized that flat rate

corrections are to be used only as a last resort –
MS have the possibility to calculate the exact
risk to the Fund wherever possible.

5. DK, SW, UK The role of the different components in a given control? How are the The controls are the different major aspects of

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No Member State Question Answer
different components weighted when it comes to assessing if a control is the management and control systems specific to
deficient or not? one or more aid schemes/measures and which
may lead to a significant risk to the Fund if
Keeping these aspects in mind, and in combination with the ‘Level of deficient. The definition of the component is
flat rate corrections’ in chapter 3.2, the likelihood of future financial provided under point 1.2 of the new Guidelines:
corrections seems rather extreme, especially with nearly all regulation individual legal requirements concerning the
provisions being key controls. same major aspect (key or ancillary control) of
the control system. The COM has set out in
In order to better understand the deficiency or failure of a control; can writing those components in order to be more
the Commission explain the purpose of the components and sub- transparent. By definition, those components
component? could have been also considered as individual
key controls – the approach applied finally,
What is the rationale behind what is considered a control and what is shows COM willingness to LIMIT the number
considered a component, i.e. how legal requirements are put together to of K&A controls. The lists create a balance and
form controls. leave enough space for DG AGRI for applying
professional judgment in relation to the impact
The UK Authorities have noted the introduction of components of on the overall effectiveness of the related
components.  With reference to the guidance on financial corrections, control and the financial risk represented by the
we are concerned that the Commission seem to think that the failure of a non-compliances found. In other words: they
component will render the whole control ineffective.  We would allow COM auditors to have a more precise
disagree with this.  The relevant regulations require a proportionate estimate of the risk to the Fund and to ensure
approach to be taken and we would expect that the effective application that the higher flat rates for 3 or more
of components of a control should be taken into account as something deficiencies are not applied automatically; the
which contributes to the assurance derived.  This is particularly deficiencies concerning the components of the
important in light of the proposed aggregation of control failures to same control will not be accumulated. From the
justify an increased rate of correction.  By establishing a myriad of stand "guidance" nature of the document it also helps
alone control requirements from control activities which are closely MS and auditors to see what are the elements of
related, the prospect of a multiple control failure is increased unduly and the key or ancillary control in question and
artificially. provides for more transparency, as well.
For example, in the case of an ancillary control,
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No Member State Question
Following your request for comments for the draft documents on key
and ancillary controls in various schemes (Ares (2015)180630 dated
18.01.2015) the Romanian Rural Investments Financing Agency would
like to complete these documents with information regarding the
meaning and interpretation of the artificial conditions, taking into
account the experience of the cases identified by the EC experts in
different member states, for example similar investments/
6. RO complementary within minimis measures for which the beneficiaries
have different links (common shareholder, common working places), See also Q & A No. 3.
also any other situations which lead to obtain the maximum aid by the
beneficiaries.
We consider that it is very important to have a list with all the cases
found in all member states where were found situations framed in the
artificial conditions observations.
Some controls in the lists provided are formulated quite vague. In a
number of lists the following ancillary control is formulated: Adequate
supervision procedures. What is exactly the meaning and scope of this
7. NL, SI control? We think a more detailed description is necessary because no
article from the Regulations is mentioned in this case. Could you please
give a clearer description of this control?
Answer
the auditors will have to asses if the deficiency
in the components results in the total failure or
not of that ancillary control. In the case of a key
control, the auditors will have to asses if the
deficiency is systematic and results in the
control not being carried out in the number,
frequency and depth required by the regulation
or it is the result of individual error(s).
We know that the control of the "artificial
creation of conditions to receive the premium"
is a complex issue. It is also true that it is
applied only in a limited number of cases, under
exceptional conditions. However, it is a legal
requirement, therefore it should be controlled.
DG AGRI is open to discuss the issue.
Details concerning this ancillary control are
provided in the generic list rev 3 . It refers to the
supervision requirements mentioned in the
Annex 1 of R. 907/2014: supervision by a
second official ("four eyes principle"),
supervision by a senior staff member as well as
the review of the delegated tasks.
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No Member State Question Answer
The different lists are not entirely consistent. The list on Rural The reporting requirements have been moved to
Development mentions Control Statistics en X-tables as ancillary the list of ancillary controls on the Generic list.
controls 5 and 6. In the other lists no reporting requirements are This lists is prepared based on the legal
mentioned at all. Could you please add the reporting requirements in requirements in the horizontal Regulations
8. NL
every list as ancillary control? 1306/2013 and 907/2014, therefore contains key
and ancillary controls applicable to all
schemes /measures.

I couldn't find a document "Key and Ancillary Controls concerning debt The list will be prepared and presented in the
9. SI management applicable in relation to conformity clearance procedures framework of the upcoming AFC in April 2015.
launched as from 01/01/2015" on CircaBC
To further enhance the transparency and because of the lists of Key and The Commission will consider presenting the
Ancillary controls’ importance (& consequences), Slovenia lists, as proposed.
recommends the Commission to also present them at specialized
10. SI (“vertical”) Commission Ag Committees’ meetings. As the attendees
of those committees are usually MS’ managers of CAP measures /
schemes, they could benefit the presentation “first hand”.

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