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Principles
Concept of legality and regularity
Legality
An act may be illegal on the grounds of lack of competence (of those adopting the act); infringement of an essential procedural requirement; infringement of the Treaties or of any rule of law relating to their application, or misuse of powers ([link new-window title="Article%20263%20of%20the%20TFEU" link="https%3A%2F%2Feur-lex.europa.eu%2Flegal-content%2FEN%2FTXT%2FPDF%2F%3Furi%3DCELEX%3A12012E%2FTXT%26from%3DEN%23page%3D116" icon="external-link" /]
)
Regularity
Irregularity means any infringement of a provision of EU law resulting from an act or omission by an [a-glossary term="Economic%20operator"]economic operator[/a-glossary]
which has, or would have, the effect of reducing or losing revenue or including an unjustified item of expenditure ([link new-window title="Regulation%20(EC%2C%20Euratom)%20No%202988%2F95" link="https%3A%2F%2Feur-lex.europa.eu%2Flegal-content%2FEN%2FTXT%2F%3Furi%3DCELEX%3A31995R2988" icon="external-link" /]
).
In view of the difficulty in the Union sphere of drawing a precise boundary between the concepts of legality and regularity, and given that the consequences of non-compliance with these rules are exactly the same for the [a-glossary term="Statement%20of%20Assurance"]Statement of Assurance[/a-glossary]
, ECA does not make a distinction between the two concepts. Thus, ECA verifies that the transactions are both legal and regular and the term “regular” is used to represent both concepts.
Legal and regular
To be legal and regular, a transaction must comply in all material respects with:
- Union legislation, comprising the financial rules (
[link new-window title="TFEU" link="https%3A%2F%2Feur-lex.europa.eu%2Flegal-content%2FEN%2FTXT%2FPDF%2F%3Furi%3DCELEX%3A12012E%2FTXT%26from%3DEN" icon="external-link" /]
, [link new-window title="Financial%20Regulation" link="https%3A%2F%2Feur-lex.europa.eu%2Flegal-content%2FEN%2FTXT%2F%3Furi%3DCELEX%3A32018R1046" icon="external-link" /]
), the basic legislation establishing the policy, programme or activity concerned, any rules or regulations established in accordance with that basic legislation, and the contractual framework.
- Where Union legislation requires or empowers member states to draw up national laws or rules for the management of Union programmes, then conformity with these laws or rules is examined in the context of legality and regularity.
- Legislation of a purely national nature is relevant in the context of an
[link title="audit%20of%20the%20legality%20and%20regularity" link="%2Faware%2FGAP%2FPages%2FECA-types-of-audits.aspx" /]
if this introduces compliance requirements on the EU funding. This is particularly relevant in [link title="shared%20management" link="%2Faware%2FGAP%2FPages%2FEU-budget-management-modes.aspx" /]
.
Double legal basis and budgetary commitment
Expenditures in the European Union context must have a double legal basis (a basic act and a legal commitment) and a budgetary commitment.
Basic act
The basic act, adopted by the [a-glossary term="Legislative%20authority"]legislative authority[/a-glossary]
, provides the legal foundation necessary for the Union measure and the related expenditure. Basic acts are the regulations, directives and decisions of the Council and of the Parliament, of the Council or of the Commission referred to in [link new-window title="Article%20288%20of%20the%20TFEU" link="https%3A%2F%2Feur-lex.europa.eu%2Flegal-content%2FEN%2FTXT%2FPDF%2F%3Furi%3DCELEX%3A12012E%2FTXT%26from%3DEN%23page%3D125" icon="external-link" /]
.
Legal commitment
The [link new-window title="legal%20commitment" link="https%3A%2F%2Feur-lex.europa.eu%2Flegal-content%2FEN%2FTXT%2F%3Furi%3DCELEX%3A32018R1046%23d1e2043-1-1" icon="external-link" /]
is the act whereby the authorising officer enters into or establishes an obligation which results in a charge. It may consist of a financing decision or contract.
- Financing decisions, which are required for all operational expenditure, are taken by the Commission. These decisions specify the activities which will be undertaken to implement the budget for a given year. In order to be implemented, they must be followed by award decisions.
- Award decisions (e.g. contracts) are separate implementation decisions generally taken by the responsible authorising officer, on the basis of a financing decision already adopted by the Commission. An award decision specifies to whom contracts or grants are awarded.
Budgetary commitment
The [link new-window title="budgetary%20commitment" link="https%3A%2F%2Feur-lex.europa.eu%2Flegal-content%2FEN%2FTXT%2F%3Furi%3DCELEX%3A32018R1046%23d1e2043-1-1" icon="external-link" /]
is the operation reserving the appropriation necessary to cover subsequent payments to honour a legal commitment. It is based on an appropriation made available in the budget by the [a-glossary term="Budgetary%20authority"]budgetary authority[/a-glossary]
. Revenue and expenditure are shown in the budget in accordance with a binding nomenclature which reflects the nature and purpose of each item, as imposed by the [a-glossary term="Budgetary%20authority"]budgetary authority[/a-glossary]
.
The requirement for a double legal basis and budgetary commitment is highlighted in the following diagram.
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[rules]
[link new-window title="Art%20263" link="https%3A%2F%2Feur-lex.europa.eu%2Flegal-content%2FEN%2FTXT%2FPDF%2F%3Furi%3DCELEX%3A12012E%2FTXT%26from%3DEN%23page%3D116" /]
[link new-window title="%2C%20287%20and%20288%20TFEU" link="https%3A%2F%2Feur-lex.europa.eu%2Flegal-content%2FEN%2FTXT%2FPDF%2F%3Furi%3DCELEX%3A12012E%2FTXT%26from%3DEN%23page%3D125" /]
[link new-window title="Art%202%20FR" link="https%3A%2F%2Feur-lex.europa.eu%2Flegal-content%2FEN%2FTXT%2F%3Furi%3DCELEX%3A32018R1046%23d1e2043-1-1" /]
[link new-window title="Regulation%20(EC%2C%20Euratom)%20No%202988%2F95" link="https%3A%2F%2Feur-lex.europa.eu%2Flegal-content%2FEN%2FTXT%2F%3Furi%3DCELEX%3A31995R2988" /]
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