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DELEGATED COOPERATION AND CO-FINANCING : Application of Aid Effectiveness to EC procedures

DELEGATED COOPERATION AND CO-FINANCING : Application of Aid Effectiveness to EC procedures. October 2009 AIDCO/G7. SUMMARY. Introduction Common characteristics Delegating to national agencies: indirect centralised management Delegating to beneficiary countries: decentralised management

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DELEGATED COOPERATION AND CO-FINANCING : Application of Aid Effectiveness to EC procedures

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  1. DELEGATED COOPERATION AND CO-FINANCING: Application of Aid Effectiveness to EC procedures October 2009 AIDCO/G7

  2. SUMMARY • Introduction • Common characteristics • Delegating to national agencies: indirect centralised management • Delegating to beneficiary countries: decentralised management • Delegating to international organisations: joint management • Transfer of funds from donors to the EC

  3. 1 INTRODUCTION

  4. Context • Aid effectiveness: • Paris Declaration (2005) and Accra follow-up (2008); • European Consensus (2005); • Code of Conduct on Division of Labour (2007) • Principles: • Ownership • Harmonisation • Alignment • Drivers: Use of country systems and Division of Labour

  5. 2 DELEGATED COOPERATION AND CO-FINANCING UNDER PRAG : Common characteristics

  6. New specific legal basis for joint co-financing with and delegating to other donors Donor 1 Donor 2 Donor 3 BEFORE 2007 ONLY by IOs AFTER 2007 ALSO EC & national agencies & Benef countries POOL FUND (Joint-co financed funds): Managed by whom?

  7. Management mode/Methods of implementation shared decentralised joint joint (International centralised (Member (Third (International organisations) States ) Countries) Organisations) The Commission may also manage funds received from other donors direct indirect bodies set up by bodies with a public executive service mission Communities agencies "(tradit. agencies) " "(nat. agencies)"

  8. Overview

  9. DELEGATED COOPERATION: Common characteristics- What does it mean? • Role of the delegatee entity (Beneficiary country, national agency, an IO): it becomes Contracting Authority instead of Commission • Launch procedures & sign contracts, • Depending on the degree: manage payments to contractors/grant beneficiaries • Control • Delegated cooperation works both ways: The Commission can also be delegated by other donors : assigned revenues. • The use of Delegated Cooperation (management mode) has to be included in Financing Decision/AAP !

  10. The delegation of budgetary tasks requires an ex ante assessment of the entity (pillars): transparent procurement and grant-award procedures; internal control system accounting system audit; adequate annual ex post publication of beneficiaries (for ICM only : access to documents) Assessment carried out by G2/ responsible AO DELEGATED COOPERATIONCommon characteristics- Pillar Review

  11. 3 DELEGATION TO NATIONAL AGENCIES Under Indirect Centralised Management

  12. Indirect Centralised management (I) DA MoU

  13. CONDITIONS Who is concerned?Article 54(2)(c) FR/25(3)(b) FR 10th EDF: national bodies or bodies governed by private law with a public-service mission providing adequate financial guarantees. - Choice of the entity: if complies with the principles of economy, effectiveness, sound financial management and efficiency and its is chosen in an objective, transparent and non discriminatory manner + pillars (Art 56 FR / 26 FR 10th EDF) Justification to the European Parliament. Delegation to a national body:Indirect centralised management (II)

  14. APPLICABLE PROCEDURES The assessment would determine the possibility for the national body to use its own procedures or those of the Commission (grants: difference between EDF and Budget). Steps: The use of the management mode and, in general, the name of the chosen body is contained in the financing decision (Annual Action Programme). This is approved by the relevant Committee and the Commission (College) The agreement to be used is theDelegation Agreement (There may be other documents: MoU amongst donors) Indirect centralised management (III)

  15. DELEGATION AGREEMENT Applicable fee: maximum 7% Contracting with third parties: procedures and rules of nationality and origin. Are in-house activities eligible? Rules on eligibility of costs Financial aspects: Bank accounts and interests Indirect centralised management (IV)

  16. INDIRECT CENTRALISED MANAGEMENT (V): Sub-delegation & use of country system? DA FA? MoU

  17. 4 DELEGATION TO BENEFICIARY COUNTRIES Under Decentralised Management

  18. Decentralised management (I)(EC & EDF funds) • Procedure: • Pillar assessment for non EC procedures • Decision college (decentralised management) • - Signature of a Financing Agreement • Commission: • Control (ex ante or ex post) always “centralised” = • residual tasks FA • BC acts as CA: • Always delegated: award and signature of contracts. • May be further decentralised: • Payments (financial management • Procedures to be used (finance & proc)

  19. Decentralised Management (II): Co-financing amongst donors FA MoU HOW TO ENSURE REDUCTION OF TRANSACTIONAL COSTS?

  20. Decentralised Management (III): Cofinancing + Residual tasks FA DA MoU

  21. 5 DELEGATION TO INTERNATIONAL ORGANISATIONS Under Joint Management

  22. JOINT MANAGEMENT (I) Procedure: - Pillar assessment - Decision college (joint management) - Signature of a Contribution Agreement CA

  23. 6 RECEIVING FUNDS FROM OTHER DONORS: Assigned revenue/Transfer Agreements

  24. TRANSFER AGREEMENTS (I)How to receive funds from other donors TA TA TA MoU

  25. Commission can receive funds from other donors: Member States Other third donor country International Organisations Authorization by the Collegeto receive funds: Financing decision/Annual Action Programme Priority of consumption of assigned revenues (funds received by donors) TRANSFER AGREEMENTS (II) PRINCIPLES

  26. Contributions would be incorporated in budget after signature of a Transfer Agreement. Main elements: The normal EC procedures will be followed to implement these funds – so the Commission comply with the Financial Regulations and Implementing Rules (audits, internal control, procurement, accounting, etc) Assigned revenues: “prioritary consumption” (art 10 RF) Fee: average of 4% Reports, visibility, etc Possible Memorandum of Understanding amongst donors TRANSFER AGREEMENTS (III)MAIN ELEMENTS OF THE AGREEMENT

  27. 7 MORE INFORMATION

  28. Where can I find the information ? • Internet on procedural aspects relating to Delegated Cooperation and Cofinancing: http://ec.europa.eu/europeaid/work/procedures/implementation/international_organisations/index_en.htm

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