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1. For the part of the Facility funding made available as financial assistance, the Commission shall rely on the audit authorities established in each beneficiary for the purpose of controlling public expenditure. Where applicable, the Anti-Fraud Coordination Services of each beneficiary established in the framework of IPA III shall be involved. As appropriate, the Commission shall also rely on further democratic scrutiny as referred to in Article 4(8). The Reform Agendas shall prioritise in the first years of their implementation reforms related to negotiation chapter 32, particularly on public financial management and internal control, as well as on the fight against fraud, together with chapters 23 and 24, particularly when it comes to justice, corruption and organised crime and chapter 8, particularly on State aid control.

2. The beneficiaries shall report any irregularities, including fraud, which have been the subject of a primary administrative or judicial finding, without delay, to the Commission and shall keep the Commission informed of the progress of any administrative and legal proceedings in relation to such irregularities. Such reporting shall be done by electronic means, using the Irregularity Management System, established by the Commission.

3. The entities referred to in paragraph 1 shall maintain regular dialogue with the Court of Auditors, OLAF and, where appropriate, EPPO.

4. The Commission may carry out detailed systems reviews of the beneficiaries’ budget implementation based on a risk-assessment and dialogue with audit authorities, and issue recommendations for improvements in the systems.

5. The Commission may adopt recommendations to the beneficiary on all cases where in its views competent authorities have not taken the necessary steps to prevent, detect and correct fraud, corruption, conflicts of interest and irregularities that have affected or seriously risk affecting the sound financial management of the expenditure financed under the Facility and in all cases where it identifies weaknesses affecting the design and functioning of the control system put in place by the those authorities. The beneficiary concerned shall implement such recommendations or provide a justification on why it has not done so.