EU Funds: Fraud Risk Management
Experience of the Managing Authority for the
Operational Programme Infrastructure and
Environment in the area of fraud prevention
and detection.
Presentation layout:
1. Short introduction: Managing Authority and
system of implementation of OP I&E 2014-2020
2. Experience gained during 2007-2013
programming period: suspected fraud and
counter-measures
3. Anti-fraud policy in OP I&E 2014-2020
4. Managing Authority best practice
Part one – introduction
• Infrastructure and Environment is the biggest national OP in the
years 2014-2020 with 27.4 billion EUR to support
(in Poland there are 22 programmes: 6 national and 16 regional).
• The main objective of the Programme: Supporting resource
efficient and sustainable economy conducive to social and
territorial cohesion.
• Its predecessor was OP I&E 2007-2013 with wide range of project
from water treatment plant through road and rail infrastructure
to soft project in the field of environmental education.
• OP I&E 2014-2020 is implemented by Managing Authority
(Ministry of Economic Development) with support of 5
Intermediate Bodies and 4 Implementing Authorities
(called also Intermediate Bodies of the second level)
Part one – introduction
Variety of beneficiaries:
• small and medium-sized enterprises,
• large enterprises,
• public administration,
• local government units,
• entities performing public tasks,
• healthcare institutions,
• civil society organisations and religious associations,
• cultural institutions.
Part one – introduction
Diversity of support areas:
• Shifting towards a low carbon economy
• Environmental protection including adaptation to climate change
• Development of the TEN-T road network and multimodal transport
• Road infrastructure for the cities
• Development of railway transport
• Development of low-carbon public transport in cities
• Improving energy security
• Protection of cultural heritage and development of cultural
resources
• Strengthening the strategic healthcare infrastructure
Part one – introduction
• MA is responsible for implementation of OP I&E
2014-2020 in accordance with the principle of
sound financial management.
• Who else at the national level safeguard OP I&E
2014-2020 compliance with 'applicable law’
Certifying Authority, Audit Authority,
Public Procurement Office, Supreme Audit Office,
Regional Chambers od Audit, Treasury Control
Offices, the Office of Competition and Consumer
Protection, the Police and other law enforcement
authorities, Prosecutors… secret service
Part two – experience
Lesson learned from 2007-2013 programming period
• Alleged collusions case in three road infrastructure projects
secret service suspected collusions  2010 judicial proceedings
 2012 indictment  2015 acquittal
• MA informed EC as soon as obtained information about initiation
of judicial proceedings and then updated information
• EC sent letter of interruption in payment for all road projects
within OP after press information concerning indictment.
• Trial ended in acquittal of the accused of collusion.
Alleged collusions case - action taken by MA:
• enhancement of cooperation with the General Prosecutor in order to ensure an
efficient flow of information,
• development of Antifraud Strategy for OP I&E 2007-2013 in particular including
prevention of collusions ,
• analysis of all General Directorate for National Roads and Highways‘ tender
procedures in the OP I&E 2007-2013 projects:
• in cooperation with The Centre for EU Transport Projects (IB),
• with the use of a dedicated methodology following the guidelines contained in the COCOF
Note – Information Note on Fraud Indicators for ERDF, ESF and CF (18.02.2009, COCOF
09/0003/00-EN) and the Guidelines for Fighting Bid Rigging in Public Procurement (July
2009, OECD), and drawing on the experience of the Office of Competition and Consumer
Protection,
• covered 89 tender procedures within 45 OP I&E 2007-2013 projects,
• multistage process consisting of: indicator analysis, in-depth analysis of identified cases,
• additionally in accordance with EC request tenders from in-depth analysis were sent to the
Office of Competition and Consumer Protection, Minister of Internal Affairs and General
Prosecutor’s Office,
• General Prosecutor’s Office informed that there was no justification to take any action by
the prosecution due to lack of grounds for reasonable suspicion of offence,
• participation in the process of amendment of the Act on competition and
consumer protection.
Part three – Anti-fraud policy
Syste m o f p re ve nt i o n , d ete c t i o n , c o r re c t i o n
a n d p ro s e c u t i o n o f f ra u d i n O P I & E 2 0 1 4 - 2 0 2 0
a s a n e n h a n c e m e nt o f t h e 2 0 0 7 - 2 0 1 3 o n e
Antifraud Strategy for OP I&E 2014-2020:
• based on strategy for previous period and with reference to
European Structural and Investment Funds Guidance for Member
States and Programme Authorities Fraud Risk Assessment and
Effective and Proportionate Anti-Fraud Measures,
• contains guidelines for implementing institutions concerning four
core stages: prevention measures; detection and reporting;
investigation, correction and prosecution,
• implements Governmental Anti - Corruption
Programme 2014 -2019 at OP level,
• contains declaration of mission.
Part three – Anti-fraud policy
In the field of prevention and detection Anti-Fraud Strategy points
out:
• how to counter conflict of interest, corruption and crime
against the credibility of the documents,
• what to do when red flags (risk factors) occur,
• how to whistle blow via fraud notification mechanism,
• an obligatory fraud risk self-assessment.
Anti-Fraud Strategy indicates how to deal with fraud suspicion
i. a. to whom report and what should be done to prevent recurring
such a case.
Detailed information about reporting and recoveries are included in
Recommendations for the institutions involved in the
implementation of the OP I&E 2014-2020.
Part four – MA best practice
MA conducts active training policy in broad cooperation
with the Central Anti-Corruption Bureau, Central Police
Forensic Laboratory, the Office of Competition and
Consumer Protection results in series of training sessions:
•
•
•
•
•
in the field of detection of collusion (141 participants),
anticorruption measures (118),
criminal offences concerning absorption of EU funds (140),
detection of forged documents (260),
and other planned i.a. how to make a fraud risk selfassessment.
• Participation in international conferences in order to
stay up to date.
Part four – MA best practice
MA presents receptive attitude towards cooperation
with NGOs
• MA cooperates with Stefan BATORY FUNDATION:
• Integrity Pacts,
• Fraud Risks Barometer in Public Procurement,
• in the field of whistleblowing (i.a fraud notification
mechanism will be linked at one of BATORY website
http://www.sygnalista.pl/)
Part four – MA best practice
Analysis of the risk of collusion based on the methodology
worked out in the cooperation with the Office of
Competition and Consumer Protection:
• worked out after the first alleged collusions case,
• ongoing in the quarterly basis,
• divided into market segments in the field of transport
infrastructure: roads, railways,
• Includes : collusion indicators, rules of quantifying of
benchmarking of indicators and whether further
action is required.
Part four – MA best practice
Exchange of information within Anti-fraud Group:
• e-mail network covering Managing Authorities,
Prosecutors’ Offices, Police Headquarter,
• plenary meetings,
• working meetings ,
• trainings,
• conferences.
Part four – MA best practice
MA policy of conflict of interest prevention:
• consulted with the Central Anti-Corruption Bureau,
• as a part of procedure book,
• consists both compulsory statements about absence
of conflict of interest and awareness raising actions.
• All Intermediate Bodies and Implementing Authorities
are obliged by interinstitutional agreements
to have it in written .
• All Beneficiaries are obliged to have it (more details on
Slide 17)
Part four – MA best practice
The fraud notification mechanism:
• Enable whistleblowers to send information by using:
• web-based information system
http://www.pois.gov.pl/nieprawidlowosci or
• dedicated e-mail address [email protected]
• There is a written procedure how to proceed with
alleged fraud notifications.
• All web pages of Intermediate Bodies and Implementing
Authorities have link to fraud notification mechanism.
• Beneficiary is obliged to inform thereabout.
Part four – MA best practice
Responsibilities of the beneficiary under the grant agreements:
• Preventing, reporting taking remedies of conflicts of interest during
project implementation and its durability time within the meaning of
Article 57 of Financial Regulation (Regulation No 966/2012 Of The
European Parliament And Of The Council),
• application of high integrity and ethical standards,
• making information about the fraud notification mechanism publicly
available also amid project staff,
• non-retaliation for whistle-blowers,
• taking into account the fraud risks concerning project implementation,
• putting in place effective and proportionate anti-fraud measures .
MA rights on the grounds of the grant agreements:
• interruption of payments until clarification of suspicion of
applicable law breaching has been undertaken,
• expenditures incurred in connection with fraud are ineligible.
Conclusion
• Till now there is no IRQ5 (proven fraud) report in
OP I&E 2014-2020.
• Most reported are suspicion of irregularities
especially in the public procurement field.
• Suspected fraud are rare cases but they led to
review of related internal control systems to
mitigate exposure to the potential or proven fraud.
• Because of the difficulties in proving fraudulent
behavior and repairing reputational damage it is
better to prevent than to cope with fraud.
Thank you very much
for your attention!
Małgorzata Kaczanowska
Irregularity Unit
Department of Infrastructural Programmes
Ministry of Economic Development
[email protected]