CIBR Blog

The way Structural Funds are allocated, managed and paid.
 
“For the period 2007 – 2013 in Romania”
 

This article describes how the funds are managed, how the EU money is transferred to Romania and how it works in general.

 
Structural Funds and decentralised management
 
The Commission transfers the funds to member states when the development programmes are adopted and actually being implemented. To encourage the launch of a new programme, the EU makes a payment on account of 7% when the programme is officially adopted. The Member States must then apply for payments to the Commission, which reimburses only certified expenditures.

For each programme the member state designates a managing authority responsible for selecting projects. The "paying authority" is responsible for certifying expenditures and applying to the Commission for payment. The paying authorities must guarantee that all expenditures declared to the Community Funds complies with eligibility rules and Community policies on, for example, the environment, equal opportunities and state aids. If the Commission finds that national checks are inadequate or if it finds irregularities, it may suspend payments or even require the payback of amounts already paid out. The Structural Funds are not directly allocated to projects chosen by the Commission. While the main priorities of a development programme are defined in cooperation with the Commission, the choice of projects and their management are solely the responsibility of the national and regional authorities. This greater decentralisation is one of the main innovations of recent programming period. Once projects have been selected, they are financed from both national and Community funds, since programme budgets are always composed of EU funds as well as national sources (public or private). EU funding is always added to national funding so that the country may overcome the limits imposed by its own financial capacity. However, Community funding is not provided as a mean for countries to make savings in their own national budgets.

The member states bear the main responsibility for the development of areas in difficulty. The Union helps them achieve more and obtain better results than they could acting on their own. That is the real added value of the Structural Funds.
 
EU versus member states decision making process
 
The Council, that consists of all the members of the Union, acting on a proposal from the European Commission negotiated with the European Parliament, decides on the budget for the Structural Funds and the basic rules governing its use. The Structural Funds are broken down by country and by Objective. The areas which may benefit from this funding are laid out by the Commission in agreement with the countries concerned. The Commission proposes common thematic guidelines. Following these decisions, each MemberState or region draws up its proposals and groups them in a development plan of areas in difficulty or of vulnerable social groups by taking into account the Commission's thematic guidelines. Actors in economic and social affairs are involved in this exercise.Once they have been completed, these plans are sent to the Commission.The MemberStates and the Commission discuss the contents of these documents and the appropriate national and Community funds to be used to implement them.When both sides have agreed on all these issues, the Commission adopts the resulting plans and programmes. A payment on account is made so that Member States may begin implementing the programme. These are known as Community Support Frameworks (CSF’ s) or Single Programming Documents (SPD ‘s), depending on whether a Commission decision is required to implement the programmes.              
 
The details of these programmes, namely the Programme Complements, are decided by the national or regional authorities. The Commission does not take part in these negotiations but is kept informed. Once they have been approved, these documents enable the authorities to launch these projects according to their operating methods (calls for project proposals, calls for tenders for the construction of infrastructure, etc). The programmes then become operational.The relevant authorities select the projects which best correspond to the goals of the programme and inform the tenderers of their choice.                                                  
 
The bodies selected may then implement their project, which must be completed before the deadline laid down in the programme since the timetable for the disbursement of Community aid is fixed at the start.The appropriate authorities on a regular basis monitor the progress of programmes, keep the Commission informed and provide it with proof that the money is being used in the best way possible (certification of expenditure). The Commission keeps track of the audit systems that is put in place and gradually pays out the remainder of the contribution from the Structural Funds. It analyses the development of the monitoring indicators and evaluation studies and conducts theme exchanges. The persons responsible for programmes are notified when any new Community priorities which have an impact on regional development are adopted.  
 
Who decides what activities receive EU Structural Funds ?
 
To attarck EU Structural Funds each MemberState must draw up and submit to the European Commission a plan setting out its investment priorities for EU Structural Funds. This plan forms the basis of negotiations between the Member State Government and the European Commission on the allocations of EU funding, and the subsequent negotiation process results in the agreement of a Community Support Framework (CSF). The CSF document includes an outline of priorities for action, objectives and targets, anticipates financial resources, and monitoring, evaluation and control systems.
 
What areas of activity are funded by the Structural Funds ?
 
The National Development Plan (NDP) is divided into a number of different Operational Programmes (OP) The Structural Funds are contributing to investment under each OP.
 
How subjects apply for Structural Funds ?
 
Many activities supported by the Structural Funds under the NDP/CSF are open to individuals, Educational Establishments, Local & Regional Authorities, companies or other groups to submit applications for funding. Qualifying criteria and applications procedures vary depending on the type of activity supported. Funding applications are processed by the Government Departments (ministries), State Agencies and Local/Rural Development Agencies responsible for implementing activities (measures) under the NDP/CSF.
 
How much money can be paid to a project ?
 
The maximum contribution of the funds to a project depends on the type of project and where it takes place. Basically each project needs co-financing. So beside EU funds also national funds are needed. It is normally the responsibility of the applicant to find the remaining funding which must usually include public funding to match the Structural Funds contribution.
 
Dipl. ir. Freddy M.E. Jacobs
PBS Worldwide
frjacobs@pandora.be
0032478/331.799
 
WWW.PBSWORLDWIDE.COM