Internal rules for detection, registration, reporting, follow up and monitoring of irregularities in EU co-financed programs and projects implemented by RIA

APPROVED BY: signed-ill.

ENG. LAZAR LAZAROV

CHAIRMAN OF THE MANAGEMENT BOARD OF RIA

INTERNAL RULES

TO DETECTION, REGISTRATION, REPORTING, FOLLOW UP AND MONITORING IRREGULARITIES IN EU CO-FINANCED PROGRAMMES AND PROJECTS IMPLEMENTED BY THE ROAD INFRASTRUCTURE AGENCY

CHAPTER ONE. GENERAL

   Art. 1. (1) These internal rules have been developed on the basis of Art. 13, para 2, item 1 in connection with para. 1, item 1 of the Ordinance for determination of the procedures for administration of irregularities under funds, instruments and programmess co-financed by the European Union (adopted by CMD 285 / 30.11.2009, promulgated SG No. 97/2009, amended SG No. 6 of 20 January 2012).

(2) These internal rules govern:

1. The internal organization in RIA for detection, registration, reporting, follow-up and monitoring of cases of irregularities and fraud on projects financed / co-financed by the European Union, as well as measures to stop irregularities and eliminate their harmful effects in order to provide:

• protection of the financial interests of the EU and the Republic of Bulgaria;
• prevention of irregularities;
• recovery of amounts unduly paid;
• introduction and maintenance of systems and procedures to ensure prevention and avoidance of irregularities in the operational activities of RIA;
• interaction with the relevant competent authorities for identification, prevention and fight against irregularities and offenses with international effect;
• establishing the unreliability of public procurement contractors in order to ensure efficiency.

2. Regulate the responsibilities of officials.
3. The conditions and requirements to the form and content, registration, the order for drawing up the documents, figuration, as well as their coordination, approval, validation and storage of the documentation and files of the registered cases of irregularities and signals of irregularities or suspicions of fraud.
4. The reporting to the Coordination of the Fight against Offenses Affecting the Financial Interests of the European Union (AFCOS) Directorate in the Ministry of Interior and the Managing Authority of the respective programme in the Ministry of Transport, Information Technology and Communications and the Ministry of Regional Development and Public Works, according to the requirements of the Ordinance on determining the procedures for administration of irregularities under funds and programs co-financed by the European Union and the annexes to the Procedural and Operational Manuals under the Instrument for Structural Policies for Accession / Cohesion Fund (Regulation 1164/94), Transport Operational Programme and Regional Development Operational Programme.
5. The current internal rules in the operational activity and control of the Road Infrastructure Agency shall ensure the application of:

• Convention for the Protection of the Financial Interests of the EC;
• Regulation No 1605/2002;
• Regulation No 2988/1995;
• Regulation (EC) 1083/2006;
• Regulation (EC) 1828/2006;
• Regulation 1164/1994 (Cohesion Fund);
• The Law on Financial Management and Control in the Public Sector;
• The Law on the State Financial Inspection;
• CMD No. 18 of 2003 on the establishment of a Coordination Council in the fight against offenses affecting the financial interests of the European Union, as amended. SG no. 54 of 15.07.2011;
• The Ordinance for determining the procedures for administration of irregularities under funds and programs co-financed by the European Union (adopted by CMD 285 / 30.11.2009, promulgated SG No. 97/2009, amended SG No. 6 of 20 January 2012) and the methodological instructions of the AFCOS Directorate for the implementation of the ordinance;
• Mandatory note no. DNF No.08 of 29.12.2009 of the Ministry of Finance;
• Other mandatory instructions from the competent authorities.

6. The employees of the RIA from the central and specialized administration shall observe the requirements and in the performance of their official duties shall apply:

• RIA's internal rules for detection, registering, reporting, following up and tracking irregularities in EU-co-financed programmes and projects implemented by RIA;
• the manual, procedures and mandatory instructions for prevention, identification, reporting and elimination of irregularities in projects approved by the Managing Authority of the Regional Development Operational Programme in the Ministry of Regional Development and Public Works - in monitoring and surveillance of projects and public procurement contracts financed under the Regional Development Operational Programme.
• the manual, procedures and mandatory instructions for prevention, identification, reporting and elimination of irregularities in projects approved by the Managing Authority of the Cohesion Fund Programme (Regulation (1164/94) in the Ministry of Transport, Information Technology and Communications - in monitoring and surveillance of projects and public procurement contracts financed under the Cohesion Fund under Regulation 1164/94;
• the manual, procedures and mandatory instructions for prevention, identification, reporting and elimination of irregularities in projects approved by the Managing Authority of the Transport Operational Programme in the Ministry of Transport, Information Technology and Communications - in monitoring and surveillance of projects and public procurement contracts financed under Transport Operational Programme;
• project management manual and mandatory instructions for bilateral cross-border cooperation programmes between Romania and the Republic of Bulgaria 2007-2013;
• project management manual and mandatory instructions for bilateral cross-border cooperation programmes at the EU's external borders between the Hellenic Republic and the Republic of Bulgaria 2007-2013;
• the manual, procedures and mandatory instructions for prevention, identification, reporting and elimination of irregularities in projects approved by the respective international financial institution - when performing operational control and risk management of projects financed by the respective international financial institution;
• the manual, the procedures and the mandatory instructions for prevention, identification, reporting and elimination of irregularities in projects, approved by the competent state authorities - when performing operational control and risk management on the implementation of the projects financed from the state budget.

7. These rules shall be applied in the operational activity and the control systems of RIA and in the activity of the contractors, to which RIA has assigned the implementation of public procurements.

   Art. 2. The internal rules aim to ensure a clear audit trail in tracking the information in the RIA system for detection, registering, reporting, following up and tracking cases of irregularities and fraud in compliance with the basic principles and requirements of current European and national legislation.

   Art. 3. These internal rules apply to the administration of irregularities in funds and programmes financed / co-financed by the European Union in connection with the activities of the Risk Analysis and Operational Control (RAOC) Directorate, which performs the functions of preventive, current and follow-up control in the systems for financial management and control of the Road Infrastructure Agency.

CHAPTER TWO.

RESPONSIBILITIES

   Art. 4. (1) The Road Infrastructure Agency, as a beneficiary of the Transport Operational Programme and Regional Development Operational Programme and an intermediate unit of the CF (Regulation 1164/94), is responsible for detecting, registering, reporting and following up all cases of irregularities and fraud, as well as assisting the competent authorities for subsequent resolution of all registered cases of irregularities.

1. The Risk Analysis and Operational Control Directorate is responsible for establishing and assessing the facts and data on irregularities and violations established during the preliminary, current and subsequent control.

Reports to the Management Board on signals of irregularities and suspicions of fraud, cases of irregularities, damages, unjustified payments, as well as cases in which irregularities may be presumed.

2. Assists the managing authorities in the relevant operational programmes for monitoring implementation, in accordance with the terms of the relevant financing memorandum, operational or framework agreement.
3. Organizes initial and ongoing training of RIA employees in order to get acquainted with the procedures and rules on irregularities, prevention of risks and violations.
4. Keeps a register of irregularities and signals of irregularities in the operational activities of the Agency.

   Art. 5. (1) For the purposes of registering and reporting cases of irregularities, the Chairman of the Management Board of RIA appoints employees for irregularities in the Risk Analysis and Operational Control Directorate, who are responsible for the administration of irregularities, prepare reports to the Director of the directorate and to the Management Board of RIA and carry out operational interaction with the managing authorities of the respective programmes in the Ministry of Transport, Information Technologies and Communications (MTITC), the Ministry of Regional Development and Works /MRDW/ and the Coordination of Combating Offenses Affecting the Financial Interests of the European Union (AFCOS) Directorate in the Ministry of interior.

(2) Irregularities officers at RAOC receive initial and ongoing training to provide introductory information on procedures and rules on irregularities and to exchange experiences and update information in the field of irregularities.

   Art. 6. The Irregularities officers in the RAOC Directorate shall carry out the necessary actions with regard to the detection, registration, reporting, follow-up and tracking of cases of irregularities and fraud on projects implemented by the Road Infrastructure Agency.

   Art. 7. (1) The irregularities officers in the Control Activities and Risk Analysis Department of the RAOC Directorate acquaint all participants in the process of absorption of European funds, incl. the structures of the RIA and the beneficiaries, with the definition of irregularity and suspicion of fraud, as well as with the current internal rules on the procedure for reporting and administration of irregularities and their obligation to notify those specified under Art. 5 irregularity officers for all cases of irregularities or suspected fraud.

(2) For this purpose, the persons who have concluded with RIA civil contracts, as well as the beneficiaries shall sign a declaration for acquaintance according to a model, approved by an order of the Chairman of the Management Board.

(3) The documentation for the public procurements and the standard contracts for public procurements shall include a standard clause, through which shall be provided acquaintance and observance of the requirements for prevention of irregularities.

   Art. 8. All employees of the Road Infrastructure Agency from the central and specialized administration sign declarations that they are familiar with the definition of “irregularity” and “suspected fraud” and the procedure for reporting irregularities in RIA for programmes and projects co-financed by the EU.

   Art. 9. (1) The staff of RIA owes assistance and provides access to the employees of the RAOC Directorate in the performance of their duties.

(2) Public procurement participants and contractors owe assistance and provide access to RAOC inspectors in the performance of their duties, which is ensured through standard clauses in the procurement documents and procurement contracts.

   Art. 10. In case of an irregularity, or a report of irregularity or suspicion of fraud, the Risk Analysis and Operational Control Directorate takes timely action to administer, notify the Management Board of RIA and the managing authority of the respective European programme, and according to the instructions and the decisions taken, take further corrective action.

   Art. 11. The Road Infrastructure Agency, through the RAOC Directorate, reports all cases of registered irregularities and signals to the Managing Authority of the respective programme in the MRDW, MTITC and sends information to the Coordination of Combating Offenses Affecting the Financial Interests of the European Union (AFCOS) Directorate in the Ministry of Interior.

CHAPTER THREE

REGISTRATION AND ADMINISTRATION OF REPORTS OF IRREGULARITIES

   Art. 12. Citizens, organizations and the Ombudsman can report to the Chairman of the Management Board of RIA about irregularities, suspicions of fraud, abuse of power, corruption, projects implemented by the Agency with European co-financing and other illegal actions or inactions of managers and employees of the agency. Reports must include an indication of the specific facts and circumstances surrounding the infringement for which they are being filed.

   Art. 13. The Road Infrastructure Agency provides the opportunity to report irregularities or suspected fraud - the reports can be submitted to the specified postal address in the office. The Information Systems and International Affairs Directorate ensures publicity and the hotline, the e-mail address and the procedure for submitting signals are announced on the website.

   Art. 14. Reporting irregularities or suspected fraud can also be submitted anonymously. Oral signals are documented by the employee who received the signal. All received signals are entered in the record keeping system of the agency and are transmitted to the RAOC Directorate for inspection by the employee for irregularities.

   Art. 15. Everyone has the right to report irregularities or suspicions of fraud arising in connection with the implementation of projects co-financed by the EU and implemented by RIA and under current law is protected from dismissal or other adverse effects, as a result of reporting an irregularity or suspected fraud.

   Art. 16. (1) All RIA employees from the central and specialized administration are obliged to report irregularities or suspicions of fraud to employees of irregularities in the RAOC Directorate. Upon submission of the signal, the respective employee is obliged to provide the employee of irregularities with all available documentation on the signal.

(2) Any signal for irregularity, which is not related to the activity and is not within the competence of the RIA, shall be forwarded to the institution to which it refers, and the sender of the signal shall be notified at the address indicated by him.

   Art. 17. (1) In case of presence or suspicion of connection of any of the persons to whom the signals for irregularities should be submitted, with the case of irregularity, the information shall be submitted in the following order:

1. In case the received information on irregularity affects the employees on irregularities, in the Control activities and risk analysis Department of the RAOC directorate, the head of the department or the director of RAOC, they shall not participate in the procedure, as:
2. The functions of the irregularity reporting officer shall be taken over by the Head of the Control and Risk Analysis Department of the RAOC Directorate;
3. The functions of the Head of the Control Activities and Risk Analysis Department for reporting the irregularity shall be taken over by the director of the RAOC Directorate;
4. The functions of the director of RAOC for reporting the irregularity shall be taken over by the Chairman of the Management Board of RIA or an official authorized by him in RIA.
5. An official of the administrative structure who is aware of the report of irregularity or suspected fraud shall be entitled to report directly to one or more of the following institutions:

• the heads of the structures administering European funds and programmes;
• the line deputy minister or head of department of the managing authority;
• the President of the Council or the director of the Coordination of the Fight against Offenses Affecting the Financial Interests of the European Union (AFCOS) Directorate in the Ministry of the Interior;
• OLAF European Anti-Fraud Office;
• Upon receipt of information about an irregularity or suspicion of fraud involving a member of the Management Board of RIA, or an official of the management of the agency, the employee who is familiar with the signal immediately takes action under Art. 6 and according to item 4 of the Ordinance for determination of the procedures for administration of irregularities under funds and programmes co-financed by the European Union (adopted by CMD 285 / 30.11.2009, promulgated in the State Gazette No. 97/2009, amended SG No. 6 of 20 January 2012)

6. In cases where the irregularity report contains information on suspicion of fraud involving persons referred to in Art. 17, the report shall be forwarded to the relevant law enforcement authorities with a copy to the Director of the Coordination of Combating Offenses Affecting Financial Interests of the European Union (AFCOS) Directorate in the Ministry of Interior.

   Art. 18. (1) Information on irregularities, on the basis of which an inspection procedure is initiated, may be:

1. signal outside the RIA - from external control authorities, from the mass media, from individuals;
2. signal within the RIA - from internal control authorities, from the internal audit unit, from an employee in the performance of his official duties, in case of assigned inspection (documentary or on-site inspection) and others;

   Art. 19. (1) For all received signals for irregularities and frauds, the irregularity officer shall make appropriate inspections to establish the authenticity of the circumstances set out in the report and shall complete the inspection by preparing a report to the Director of RAOC. The report is sent to the Chairman of the Management Board of RIA for approval. The decision of the RIA Management Board is sent to the MA of the respective European competence programme and after receiving a Decision under Art.14, para. 2 of the Ordinance on administration of irregularities in the European Structural and Investment Funds, the MA takes the necessary actions to close the signal, or to start an irregularity registration procedure. The inspection is completed within 3 months from the receipt of the signal for irregularity and the receipt of a decision from the MA.

(2) The irregularities officer shall maintain, store and update a register of the submitted signals for irregularities, in accordance with the provisions of Art. 11/1 / of the Ordinance for determining the procedures for administration of irregularities under funds, instruments and programmes co-financed by the European Union (adopted by CMD 285 / 30.11.2009, promulgated in the State Gazette No. 97/2009, amended SG No. 6 of 20 January 2012)

The register of irregularity signals shall contain at least the following information:

1. date and registration number of the signal from the RIA record keeping system
2. number and name of the project / contract;
3. the programme under which it is financed;
4. description of the violation;
5. source of the signal;
6. stage of the inspection;
7. actions taken;
8. conclusion - number and date of the decision of the Management Board of RIA on the performed inspection;
9. issued registration number of the act by the MA under Art. 14, para 1 of the Ordinance for administration of irregularities under the European Structural and Investment Funds.

CHAPTER FOUR.

REGISTRATION, ADMINISTRATION AND REPORTING OF ESTABLISHED IRREGULARITIES

   Art. 20. RIA as a beneficiary is responsible for detecting, reporting, registering and assisting the competent authorities for the subsequent resolution of all registered cases of irregularities in the implementation of projects and programmes funded by the EU.

   Art. 21. (1) The Chairman of the Management Board of RIA takes the appropriate actions in connection with the alleged or established irregularity, ordering:

1. collection of all available original documentation, certifying the committed irregularity;
2. registration and storage of all documents in connection with the conducted investigation;
3. report to the competent authorities quarterly suspected and / or actual irregularities;
4. propose to the competent authorities the undertaking of procedures and sanctions in cases of established fraud or irregularity, and ensure proper accountability;
5. guarantee the implementation of the respective decision of the competent authorities and the recommended changes of the systems and procedures for management and control;
6. report immediately to the Managing Authority and to the Coordination of the Fight against Offenses Affecting the Financial Interests of the European Union (AFCOS) Directorate in the Ministry of the Interior of irregularities where there are grounds for believing that they would have a rapid impact outside the territory of the country, or when there is reason to believe that they constitute a new illegal practice;
7. when initiating an inspection by OLAF, immediately notify the AFCOS Directorate and the Minister for EU Funds Management (each beneficiary or contractor of an EU co-financed project shall, upon request, provide access to the assets and project information of the national inspection authorities - AFCOS Directorate and OLAF;
8. provide written information to AFCOS and the MA on the respective programme for the results of an inspection by OLAF within 5 days from the completion of the inspection;
9. upon receipt of a report or official information on the results of an inspection, OLAF shall submit a copy of all correspondence to AFCOS within 3 days of receipt.

   Art. 22. The irregularities officers in the Risk Control and Risk Analysis Department of the Risk Analysis and Operational Control Directorate are responsible for reporting and registering irregularities.

   Art. 23. (1) When irregularities are detected, employees should take prompt action.

(2) When a RIA staff member suspects or discovers an irregularity, he or she should report it to the irregularities officer, at Control and Risk Analysis Department, or the RAOC Director, regardless of the type of irregularity and the cause.

   Art. 24. (1) At the proposal of the Director of RAOC and after an observation of the Public Procurement and Legal Services Directorate, the Chairman of the Management Board takes corrective action, incl. measures to prevent such irregularities in the future and assign appropriate responsibilities, which include:

1. reporting the irregularities of the competent authorities in accordance with the source of financing;
2. reporting to the managing authority on the respective programme in MRDW and MTITC;
3. reporting to the Coordination of the Fight against Offenses Affecting the Financial Interests of the European Union (AFCOS) Directorate in the Ministry of Interior;
4. withholding of payments under a public procurement contract;
5. cancellation of concluded public procurement contracts;
6. notification of the State Financial Inspection Agency regarding violations of the budget order within 5 working days;
7. notification of the respective authorities, carrying out administrative and criminal prosecution, for allegedly committed administrative violations and crimes during and on the occasion of the operational and control activity of RIA, including during the implementation of projects financed by EU funds, international financial institutions and the state budget;
8. implementation of subsequent corrective actions;

   Art. 25. Errors detected by internal authorities and resulting from the application of appropriate management procedures are not normally reported as irregularities when the nature of the error indicates that other procedures may be applied, e.g. training or disciplinary action.

   Art. 26. (1) In cases where there is a suspicion of an alleged or committed irregularity by a person outside the RIA, the director of the RAOC requires a reasoned justification and, if necessary, takes corrective action.

(2) When the person does not provide an adequate explanation within the specified period, the director of RAOC informs the Chairman of the Management Board, who informs at its discretion the relevant competent authorities, which take the necessary further action.

   Art. 27. (1) Irregularities that have a financial impact are covered by loss recovery measures. Corrective measures to recover losses must be:

1. proposed by the director of the RAOC Directorate;
2. approved by the chairman of the RIA;

   Art. 28. The irregularities officer in the Control and Risk Analysis Department of the RAOC Directorate analyzes each case of irregularity and prepares a report in order to ensure that corrective action is taken to improve the control system and subsequently avoid similar cases of irregularities in future, in case of repeated irregularities or those caused by deficiencies in the control system.

   Art. 29. The Head of the Control Activities and Risk Analysis Department of the RAOC Directorate controls the timely reporting of each case of irregularity in order to ensure that corrective action is taken to improve the control system and avoid similar cases in the future.

   Art. 30. The employees for irregularities maintain, store and update the registers for irregularities according to Art. 26 of the Regulations for the structure, activity and organization of work of RIA and Art. 13, para. 2, item 2 of the Ordinance for determination of the procedures for administration of irregularities under funds and programmes, co-financed by the European Union (adopted by CMD 285 / 30.11.2009, promulgated SG No. 97 / 2009, amended, SG No. 6 of 20 January 2012).

   Art. 31. The Chairman of the Management Board of RIA reports all cases of alleged and / or registered cases of irregularities to the relevant managing authority in MRDW and MTITC and to the Coordination of Combating Offenses Affecting the Financial Interests of the European Union (AFCOS) Directorate in the Ministry of Interior.

   Art. 32. In case of an established irregularity, which is confirmed by the MA under the respective European programme in MRDW or MTITC (with a Decision under Art. 14, para 1, Ordinance on administration of irregularities under the European Structural and Investment Funds), the employees on irregularities shall enter it immediately in the respective Register of Irregularities and send to the MA a notification of irregularity and the completed register.

   Art. 33. (1) The irregularities officer shall maintain, store and update a register of irregularities, in accordance with the provisions of Art. 13, para. 2, item 2 of the Ordinance for determining the procedures for administration of irregularities under funds, instruments and programs co-financed by the European Union (adopted by CMD 285 / 30.11.2009, promulgated SG No. 97/2009, Amended, SG No. 6 of 20 January 2012).

The register of irregularities shall contain at least the following information:

1. national identification number of the irregularity /NIN/;
2. the name of the respective European programme under which the project is financed;
3. number of the project / contract;
4. registration number of the act under Art. 14, para 1;
5. date of entry of the irregularity in the register;
6. short description of the irregularity;
7. state of the case /active, terminated, closed/.

   Art. 34. (1) The irregularities officer shall keep a file for each case of irregularity found.

(2) The file on the irregularity shall contain all available documentation, in connection with the respective case of irregularity, including:

1. reports on the irregularity;
2. the documentation from the inspection, incl. all written evidence in the case;
3. excerpts from audit reports, where applicable;
4. any kind of correspondence related to the establishment of the irregularity;
5. information related to court cases, information on the recovery of the due amounts and others.

(3) The file on the irregularity shall bear the national identification number, which shall be indicated by the MA under the respective programme.

(4) Each new case of irregularity shall be registered consecutively in the register of irregularities under a national identification number set by the Managing Authority.

(5) The file on the irregularity shall be kept by the employee on the irregularities in the Control activities and risk analysis Department at the RAOC Directorate.

   Art. 35. The Road Infrastructure Agency submits quarterly information to the Managing Authority for each European programme under which it implements projects and the Coordination of the Fight against Offenses Affecting the Financial Interests of the European Union (AFCOS) Directorate in the Ministry of Interior for all new cases of irregularities / fraud and follow-up, as well as changes to already reported cases of irregularities.

   Art. 36. (1) The deadlines for submitting a quarterly notification under and respectively the register of irregularities to the AFCOS Directorate are as follows:

1. for the first quarter of the current year - April 30 of the current year;
2. for the second quarter of the current year - July 31 of the current year;
3. for the third quarter of the current year - October 31 of the current year;
4. for the fourth quarter of the current year - January 31 of the following year.

   Art. 37. When for the respective period /quarter/, no cases of irregularities have been identified and the irregularities registered in previous periods have been closed, RIA submits a declaration of no irregularities under each of the programmes co-financed with European funds /Instrument for Structural Accession Policies/ CF (Regulation 1164/94), Transport Operational Programme , Regional Development Operational Programme/ to the Managing Authority of the respective programme and information to the Coordination of the Fight against Offenses Affecting the Financial Interests of the European Union (AFCOS) Directorate in the Ministry of Interior.

   Art. 38. When for the respective period there is no significant change in already reported irregularities, RIA declares this circumstance to the Coordination of the Fight against Offenses Affecting the Financial Interests of the European Communities (AFCOS) Directorate in the Ministry of Interior.

   Art. 39. The quarterly notifications for irregularities under the Instrument for Structural Policies for Accession / CF (Regulation 1164/94) and Transport Operational Programme , Regional Development Operational Programme are sent to the MA under the respective programme. The information to the Coordination of the Fight against Offenses Affecting the Financial Interests of the European Union (AFCOS) Directorate in the Ministry of Interior shall be submitted by e - mail, on paper and on electronic media.

CHAPTER FIVE.

COMPLETION OF AN IRREGULARITY

   Art. 40. (1) A decision to complete the irregularity shall be taken in the cases of:

1. recovery of unduly paid and overpaid amounts, as well as funds illegally received or misappropriated;
2. completion of the initiated procedure by administrative-legal or judicial order with an entered into force administrative / judicial act;
3. completed administrative procedure of a control authority, without including the authorities administering European funds - when the inspection of the administrative authority or the authority authorized to revise the conclusion has been completed without any violations found;
4. when the irregularity is discovered before making payments on the project by the intermediate unit / beneficiary, respectively the managing authority.

(2) A decision for completion of an irregularity shall be taken in the cases under para 1, provided that the proceedings initiated under criminal law have been completed by an effective court act.

(3) In the event of new circumstances, the examination of the case may be resumed.

   Art. 41. Access to information from the Register of Irregularities is restricted to the irregularities officer in the RAOC Directorate and authorized by the Chairman of the Management Board of RIA.

   Art. 42. (1) The irregularities officer is responsible for organizing the process of submitting timely information for the purposes of accounting for irregularities that have financial implications to the Finance Department of the Budget, Finance and Project Payments Directorate.

(2) The information submitted by the irregularities officer should correspond to the content of the register of irregularities under the respective programme and contain at least the following data - national identification number /NIN/, project name and contract number, amount financed in EUR and BGN according to sources of financing, date of detecting of the irregularity.

   Art. 43. Budget, Finance and Project Payments Directorate in RIA, accounts for all amounts due at the project level, submitted by the MA of the respective programme.

   Art. 44. The irregularities officer in the RAOC Directorate shall notify in writing the Financial Department of the Budget, Finance and Project Payments Directorate and the MA of the European Programme of the date of closing the case of irregularity.

CHAPTER SIX.

GEBERAL

   Art. 45. The provisions of the respective programme shall apply to all issues not settled by these rules. Ordinance for determining the procedures for administration of irregularities under funds, instruments and programmes co-financed by the European Union (adopted by the CMD No 285 / 30.11.2009, promulgated by the State Gazette, issue 97/2009, amended No. 6/2012). Decree No 18 of 4 February 2003 on the establishment of a Coordination Council in the fight against offenses affecting the financial interests of the European Communities (promulgated by the State Gazette, issue 13 / 11.02.2003, amended No. 31 / 23.04.2010). Regulation (EC) No. 1083/2006, Regulation (EC) No. 1828/2006.

   Art. 46. (1) When detecting, registering, reporting, following up and tracking cases of irregularities and fraud on projects financed / co-financed by the European Union budget, as well as measures to stop irregularities and eliminate their harmful consequences, the following shall be observed:

1. Procedural Manual of the Instrument for Structural Policies for Accession / CF 1164/1994 in the Managing Authority of the Cohesion Fund (Regulation 1164/94) at MTITC;
2. The Operational Manual of the Transport Operational Programme in the Managing Authority of MTITC;
3. Operational Manual on Regional Development Operational Programme, Managing Authority in MRDW;
4. The applicable rules and approved procedural manuals of other donor programmes, when such are developed under the CBC in the MRDW;
5. Instruction for prevention, detection, reporting and resolution of irregularities in the context of the Instrument for Structural Policy in the Pre-Accession Process (ISPA), Transport Operational Programme, Regional Development Operational Programme.

CHAPTER SIX.

ADDITIONAL PROVISIONS

   The only paragraph, in the sense of the Ordinance for determining the procedures for administration of irregularities under funds, instruments and programmes co-financed by the EU /Ordinance on the administration of irregularities under the European Structural and Investment Funds/ and the Internal Rules for CA in the Road Infrastructure Agency”.

1. “Irregularity” is:

• any breach of a provision of Community and / or national law resulting from an act or omission of an economic operator which has or would have the effect of harming the general budget of the European Union and / or the national budget, taking into account unjustified expenditure. Definition: Council Regulation No 2988/95 (Euratom) on the protection of the EU's financial interests.
• “Unlawful” means any infringement of a provision of Community law as a result of an act or omission by an economic operator which has been or may be the result of a breach of the general budget of the Communities or of the budgets managed by them or by reducing of or loss of revenue arising from own resources which is collected directly on behalf of the Communities or by incurring unjustified expenditure.
• any action that does not comply with these requirements and any breach of management rules and / or control systems may be considered as an irregularity, whether involving actual or potential losses of funds. In particular, the definition covers:
• any conduct, whether intentional or unintentional (act or omission) of the economic operator, which has or would result in damage to the general or national budgets;
• the action must lead to a breach of European or national law;
• the Member State undertakes to set up management and control systems in order to ensure sound financial management and clear audit trails for the whole management and implementation system. In this sense, the violation of these rules can be considered an irregularity and reported to the EC.

All those involved in the implementation of EU-funded projects must take the necessary measures to prevent and follow up on irregularities, as well as to recover from irregularities. This system must cover both the general budget of the EU and the national budget.

• “Irregularity signal” /including anonymous/ - the information should give at least a clear reference for the specific site / project, funding programme, administrative unit and description of the irregularity.
• “Fraud affecting the financial interests of the European Communities” in terms of costs - any intentional act or omission related to:

• using or presenting false, incorrect or incomplete reports or documents, which would result in incorrect allocation or withholding of funds from the general budget of the EU or from other budgets managed directly by or on behalf of the EU;
• failure to provide information with the same effect, in case of non-fulfillment of a specific obligation;
• misuse of the above funds for purposes other than those for which they were granted;

• “Fraud affecting the financial interests of the European Communities” in terms of revenue - any intentional act or omission related to:

• using or presenting false, incorrect or incomplete reports or documents which would result in an illegal reduction in the resources of funds from the general budget of the EU or from budgets managed directly by or on behalf of the EU;
• failure to provide information with the same effect, in case of non-fulfillment of a specific obligation;
• improper use of legally obtained goods with the same effect.

• “Suspicion of fraud” is: any irregularity that provides sufficient grounds for initiating administrative or judicial proceedings at the national level in order to establish intent in a particular case of fraud, according to Art. 1 (1) letter “a” of the Convention of 26 July 1995 on the protection of the European Communities' financial interests, adopted on the basis of Art. K.3 of the Treaty establishing the European Community.

2. “Economic operator” means: any natural or legal person or other entity which benefits from funding received from European funds, with the exception of Member States in their capacity as public authorities;

3. “Primary administrative or judicial decision” shall be: the first written administrative or judicial act issued by a competent authority containing a conclusion on the basis of facts presented that an irregularity has been committed, while retaining the possibility that the conclusion may be reversed or revoked as a result of the development of administrative or judicial proceedings;

4. “Bankruptcy” is: any insolvency procedure within the meaning of Art. 2 (a) of Council Regulation (EU) No 1346/2000.

5. “Technical irregularities” are: the irregularities that arise during the supply of material or during the selection of labor, with a quality lower than that set in the public procurement contract.

6. “Contractual irregularities” are: those irregularities that arise from incorrect application of the respective public procurement contract. Complete knowledge of the basics of the contract is essential to avoid contractual irregularities. Contractual irregularities relate to:

• incorrect authorization (delegation of rights);
• certification of overpayments;
• incorrect instructions for the place of performance;
• incorrectly approved materials or proposals of the contractor;
• incorrect presentation of the annexes (modification of activities);
• improper management of the contractor's requests;

7. “Financial irregularities” are: fraud, theft or misappropriation of funds, including corrupt practices.

8. “Administrative irregularities” are: irregularities that arise as a result of non-compliance with the applicable norms in the selection of a public procurement contractor and in the conduct of public procurement procedures.

9. “Intentional irregularities” are: actions or omissions of a subject of the participants in the project implementation, performed for the purpose of personal enrichment or enrichment of another person, in contradiction with the normative acts or the rules of concluded contracts between RIA and public procurement contractor; as well as subcontracts.

10. “Careless irregularities” are: actions or omissions of an entity involved in the implementation of the project, caused by carelessness or arrogance, in most cases as a result of violation of approved procedures, errors or disadvantages.

11. “Irregularities of a financial nature” are: irregularities, which result in unjustified payment of unjustified expenses to a contractor. On the basis of a request from the RIA, the public procurement contractor within the period specified in the request is obliged to return the amounts unduly paid.

12. “Irregularities without financial nature” are: irregularities, discovered before payment of unjustified expenses to a public procurement contractor.

13. “Systemic irregularities” are: irregularities that recur or are at high risk of recurrence in the system, respectively within the various projects, such as they arise from gaps / errors in the financial management system and may occur horizontally in all projects.

14. “Isolated cases of irregularities” are: irregularities that occur in isolated cases in a particular project and not in the system as a whole, such as those resulting from actions or errors in a particular project and should not be reflected in other projects in the proper application of financial management procedures.

15. “The Control Departments of the RAOC Directorate” are: Control Activities and Risk Analysis Department and the Monitoring Department.

16. “RIA staff” are: the employees in the central administration and the specialized units of RIA, as well as the members of the project teams and the consultants hired under civil contracts.

17. “Exchange of risk information” is: interactive exchange of information and opinions during the process of risk analysis of hazards and risks, risk factors and risk perception between risk assessors and managers, consumers, road construction industry, academic community and other stakeholders, including clarification of the conclusions of the risk assessment and the reasons for the risk management decisions.

18. “Audit” is: a comprehensive and independent inspection in order to determine whether the activities and their results correspond to the planned ones, are implemented effectively and are appropriate for achieving the objectives.

19. “Danger” is: the presence or condition for the presence of causes that may lead to irregularities.

20. “External control of irregularities” is: control carried out by the competent authorities - management authorities, executive agencies, certification authorities, audit authorities, international financial institutions, the State Financial Inspection Agency, the National Audit Office and others, as well as external audit companies, for compliance with regulatory and contractual requirements for the operational activities and control system of RIA, including the implementation of projects with EU funds, international financial institutions and the state budget.

FINAL PROVISIONS

§ 1. The present internal rules shall be approved on the basis of Art. 21, para 3, item 16 of the Roads Act, the Regulations for the structure, activity and organization of work of the Road Infrastructure Agency and Art. 13, para. 2, item 1 in connection with para. 1, item 1 of the Ordinance for determining the procedures for administration of irregularities under funds, instruments and programmes co-financed by the European Union (adopted by CMD 285 / 30.11.2009, promulgated SG No. 97/2009, amended, SG No. 6 of 20 January 2012).

§ 2. These Internal Rules come into force from the date of their approval by a decision of the Management Board of RIA.

§ 3 The control over the observance of the present internal rules is carried out by the director of the Risk Analysis and Operational Control Directorate in RIA.

§ 4 These internal rules are an integral part of the procedural manuals for the activities of the Road Infrastructure Agency under the Instrument for Structural Policies for Accession / Cohesion Fund (Regulation 1164/94), Transport operational Programme, Regional Development Operational Programme and the Rules for the structure, activity and organization of work in the Road Infrastructure Agency.

§ 5 These internal rules may be supplemented, amended and repealed in the order in which they have been approved.

MINISTRY OF REGIONAL DEVELOPMENT AND PUBLIC WORKS

MINUTES

4094/12

   of a meeting of the Management Board of the Road Infrastructure Agency.

Today, 06.07.2012, in the administrative building of the Road Infrastructure Agency (RIA), a regular meeting of the Management Board of RIA was held, with the following agenda:

1. Consideration of a report No 93-01-3991 / 29.06.2012 by Vladislav Yolov - Director of the Risk Analysis and Operational Control Directorate on the approval of internal rules for the detection, registration, reporting, follow-up and tracking of cases of irregularities in programmes and projects EU co-financed and implemented by RIA.

The meeting was attended as follows:

Lazarinka Stoichkova – Member of the Management Board of RIA, signed-ill.

Iliana Zaharieva - Member of the Management Board of RIA, signed-ill.

Boryana Bratoeva

according to Order No. РД-11-785/2012

After discussing and disputing the items on the agenda, the Management Board of the Road Infrastructure Agency

DECIDED:

Under item 1 of the agenda:

1. 1. Accepts the proposal made in Mr Yolov's report.
   2. Instructs the RAOC Directorate to submit for approval a draft of the Internal Rules for the Detection, Registration, Reporting, Follow-up and Tracking of Irregularities of EU-Co-funded Programmes and Projects, implemented by RIA to all RIA CA directors, after which should be submitted for approval by the Management Board of RIA.
   3. Assigns to Lazar Lazarov - Chairman of the Management Board of RIA or Lazarnika Stoichkova - Member of the Management Board of RIA, due to the absence of the first and in accordance with Order No РД -02-14-1876 / 15.09.11 of the Minister of Regional Development and Public Works, to approve the rules under 1.2. after proper coordination with the directors of the CA of RIA.

Due to the exhaustion of the agenda, the meeting of the Management Board was closed.

MANAGEMENT BOARD:

Lazarinka Stoichkova

Member of the Management Board of RIA, signed-ill.

Iliana Zaharieva

Member of the Management Board of RIA, signed-ill.