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FROM INTERREG III 2000-06 TO TERRITORIAL COOPERATION 2007-2013: A GENERAL OVERVIEW

FROM INTERREG III 2000-06 TO TERRITORIAL COOPERATION 2007-2013: A GENERAL OVERVIEW. The new Cohesion Policy 2007-2013: More strategic, less bureaucratic, better focused approach.

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FROM INTERREG III 2000-06 TO TERRITORIAL COOPERATION 2007-2013: A GENERAL OVERVIEW

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  1. FROM INTERREG III 2000-06 TO TERRITORIAL COOPERATION 2007-2013:A GENERAL OVERVIEW

  2. The new Cohesion Policy 2007-2013: More strategic, less bureaucratic, better focused approach A. More strategic: linked to the Lisbon and Göteborg agendas (more and better jobs/sustainable growth)B. Less bureaucratic: budgetconcentration, decentralisation of funds managementC. Better focused approach: geographical concentration on MS and regions with greatest needs 3 OBJECTIVES – financial allocations: Source: European Commission – DG Regio

  3. Infrastructure, Innovation, Investments etc. Vocational training, Employment aids etc. Environmental & transport infrastructure, renewable energy All Member States and regions Member States with a GNI/head below 90% Structural Funds and instruments of the Cohesion Policy 2007-2013 Objectives Structural Funds and instruments Convergence ERDF ESF Cohesion Fund Regional Competitiveness and Employment ERDF ESF European territorial Cooperation ERDF Source: European Commission – DG Regio

  4. THE NEW EU COHESION POLICY 2007-2013REGULATORY FRAMEWORK

  5. General Regulation 1083/2006 on the ERDF, the ESF and the Cohesion Fund • ERDF Regulation: 1080/2006 • ESF Regulation: 1081/2006 • Cohesion Fund Regulation: 1084/2006 • Regulation 1082/2006establishing a European Grouping of Territorial Cooperation (EGTC) Commission Regulation nº 1828/2006 for the Implementation of General Regulation 1083/2006: Information & Publicity, Financial control and Financial corrections New: General Regulation applies to the Cohesion Fund; a new Rural Development Fund and a Fisheries instrument now outside Cohesion Policy; one Commission regulation instead of five on specific aspects; eligibility rules simplified 2007-2013 regulatory framework Council by unanimity, assent European Parliament ERDF, ESF: Co-decision; Cohesion Fund: assent European Parliament Co-decision 5

  6. 2007-2013 regulatory framework

  7. OBJECTIVE 3: EUROPEAN TERRITORIAL COOPERATION 1. General aims2. Programmes and instruments3. Main innovations4. Main changes in terminology5. Financial allocations

  8. OBJECTIVE 3: European Territorial Cooperation

  9. EUROPEAN TERRITORIAL COOPERATION 2007-13Types of Cooperation: 1. Cross-Border Cooperation2. Transnational Cooperation3. Interregional Cooperation

  10. CROSS-BORDER COOPERATION 1. Eligible areas2. Key issues3. Main topics

  11. Cross-border cooperation: Eligible areas GUIDELINE: LARGER TERRITORY COVERED, SHORTER NUMBER OF PROGRAMMES 2000-2006 2007-2013 For 2007-2013, CBC applies to all NUTS 3 regions along the external and internal borders, terrestrial as well as maritime

  12. Cross-border cooperation: Main topics 2000-2006: • Urban, rural and coastal development • Entrepreneurship, SMEs and employment • Labour market integration and social inclusion • Research, technology, education, culture… • Environment and energy • Transport, information and communication • Legal and administrative cooperation • Human and institutional potential 2007-2013: 5 Priorities: • Encouraging entrepreneurship • Natural & cultural resources/risk prevention • Urban and rural areas • Reduction of isolation • Infrastructures

  13. TRANSNATIONAL COOPERATION 1. Programme areas2. Main topics

  14. TRANSNATIONAL COOPERATION: 13 programmes INTERREG IIIB 2000-2006 INTERREG IVB 2007-2013 • MAIN CHANGES for 2007-2013: • CADSES splits into 2 new programmes: EAST CENTRAL SPACE - SOUTH EAST SPACE • MEDOCC and ARCHIMED are merged in the new MEDITERRANEAN SPACE • SUDOE and ATLANTIC AREA will no longer comprise the outermost regions of Madeira, Azores and Canary Islands • NORTHERN PERIPHERY programme is enlarged to Ireland and all regions in Scotland • NORTH SEA programme adds the region of Kent (UK)

  15. Transnational cooperation: Main topics 2000-2006: • SPATIAL PLANNING STRATEGIES • CITIES AND RURAL/URBAN COOPERATION • TRANSPORT AND COMMUNICATION NETWORKS • ENVIRONMENT AND NATURAL RESOURCES MANAGEMENT • CULTURAL HERITAGE MANAGEMENT • SMALL SCALE INFRASTRUCTURES • INSULAR AND MARITIME COOPERATION • COOPERATION WITH THE ULTRA-PERIPHERAL REGIONS 2007-2013: 4 Priorities: • Innovation • Environment • Accessibility • Sustainable urban development

  16. INTERREGIONAL COOPERATION 2007-2013MAIN FEATURES: • 321 MEUR, one programme; • One MA: Conseil Régional Nord – Pas de Calais – Lille (F); four Information Points: Rostock, Katowice (with support from Vienna), Valencia and Lille; • One Audit Authority: CICC – FS; • One Certifying Authority: Caisse des Dépôts et Consignations; • Focus on Lisbon and Gothenburg agenda; • Whole EU territory is eligible; • Rate of assistance up to 75 % (up to 85% for Convergence Regions)

  17. MEMBER STATES – Responsibilities • Ultimate responsibility for all activities carried out on a MS’s territory • Eligibility and information • Providing information on national eligibility rules for the OP (included in the description of systems and procedures) • Providing the MA, CA and AA with access to the information they need to carry out their functions (Implementing Regulation § 24) • Control: • Designating First and Second Level control bodies • Ensuring that the appointed FLC body completes certification within max 3 months • Ensuring that all expenditure spent by partners in the MS comply with Community and national rules through FLC • Establishing procedures for ensuring that all documents in the audit trail meet national and audit requirements • Irregularities: • Detecting • Correcting • Recovering

  18. PROGRAMME MANAGEMENT BODIES: The Monitoring and Steering Committees The Monitoring Committee (MC) • MS representation in the programme to safeguard and ensure fulfillment of MS responsibilities • Responsible for deciding, monitoring and adjusting programme implementation and strategy • Should be kept informed of progress towards programme objectives, the status of programme finances, any management problems • Regular reporting on project allocations and spend against targets and on TA budget spend against targets through the business plan The Steering Committee (SC) • Responsible for selection of projects (need objective assessments of project financial plans and their impact on priorities and budgets) • SC decisions on ERDF allocations have a major impact on meeting programme objectives - The MC should monitor them • Bias in selection may result in poorer projects and decommitment problems (so to be avoided)

  19. PROGRAMME MANAGEMENT BODIES:The Managing Authority: Responsibilities (1) • Ensuring that projects are approved, delivered and monitored in accordance with agreed criteria • On-the-spot-checks on at least a sample of projects • Recording and storing MA accounting records • Ensuring project accounting standards, maintenance of the project audit trail and that payment has been certified correctly (by the LP first level controller) • Ensuring that adequate information is provided to the Certifying Authority • Guiding the MC and providing it with documents (not necessarily chairing) • Drawing up and submitting reports to Commission

  20. PROGRAMME MANAGEMENT BODIES:The Managing Authority: Responsibilities (2) • Ensuring evaluations are carried out and meet quality standards (Responsible for ex-ante evaluation and on-going evaluation (yearly or mid-term or both) • Ensuring compliance with information and publicity requirements • In Territorial Cooperation programmes not responsible for ensuring compliance with national and Community rules (FLC task) • Ensuring that project partners are aware of the terms under which grants are awarded and that they have sufficient capacity to fulfil these conditions (Implementing Reg. §13.1) • Maintaining a list of all bodies holding documentation in the audit trail (Implementing Reg. §19) • Keeping and publishing a list of beneficiaries, operations financed and amount of grant received (Implementing Reg. §7) • Subsidy contract is mandatory (art. 15.2 Regulation 1080/06) • Memoranda of Understanding art.59.3 Regulation 1083/06

  21. PROGRAMME MANAGEMENT BODIES:The Joint Technical Secretariat RESPONSIBILITIES: • ‘…shall assist the MA, the MC and, where appropriate, the AA, in carrying out their respective duties.’ (ERDF Regulation, §14.1) • Does not need to be located within the MA, but should be located close to facilitate joint management • Process applications, organise project assessment and make proposals for selecting projects to the selection committee • Provides help and support to projects at all stages • Should have a representative international staff – it is not a national institution

  22. PROGRAMME CONTROL BODIES:The Certifying Authority RESPONSIBILITIES: • Certifies accuracy and standards used to calculate statement of expenditure • Draws up claims to the Commission • Receives funds and makes payments to LP • Maintains computerized accounting records • Supervises the MA by ensuring systems & documentation are in place (current Art. 9) • Recovers amounts unduly paid to beneficiaries (with LPs and Member States) • Generally advises on liquidity management

  23. Certifying Authority 1. Core function: certifying expenditure declared to the Commission 2. Ensuring the reliability of the MA’s work 3. Claims to the Commission 4. Accounting records on programme level Managing Authority 1. Approves individual project claims 2. Main contact to project LPs 3. Verifies that products and services are delivered 4. On-the-spot verifications of operations 5. Ensures there is system for recording and storing project accounting records 6. Ensures that project documents and procedures meet requirements for adequate audit trail Managing Authority and Certifying Authority core functions • Clear separation of functions and independence essential • There should be no duplication of control – satisfactory results of e.g. systems controls of the MA can lead to limiting of CA’s actual control work NB: Information based on CDRR-06-0004-00

  24. FROM INTERREG III 2000-06 TO TERRITORIAL COOPERATION 2007-13 PROGRAMME DOCUMENTS: 1. Operational Programme2. Description of systems and procedures 3. Memoranda of Understanding/Letter of Agreement

  25. PROGRAMME DOCUMENTS 1. The Operational Programme (OP) • Priorities and type of actions that will be funded under each Priority • Joint programme financial tables showing ERDF split by programme year, and total funding for the whole period and per Priority (NB: Without breakdown by Member State) • Basic implementation arrangements, structures and responsibilities 2. Description of systems and procedures – formal requirements: Art. 71 Reg 1083/2006(Former Declaration Art 5 Regulation 438/2001) • Within 12 months of OP approval a detailed description of programme financial management procedures, approved by a ‘compliance assessment body’ (possibly the Audit Authority) including: • Responsible bodies in particular the MA and CA; separation of tasks and their independence • Systems for ensuring that the audit trail is maintained down to final beneficiary level • Procedures for the ongoing audit of management and control systems • Additional requirements: Systems and procedures describing the document and information flow in and out of the programme. Need decisions on: - Financial procedures – Who does what? - Time limits – When should things happen? - Authorising TA spending + staff recruitment - Procedures for making changes 3. The Letter of agreement / Memorandum of Understanding • Additional agreements between programme bodies covering specific demands (e.g. additional reporting requirements to MS) • Harmonise general programme procedures with particular national requirements

  26. PROGRAMME DOCUMENTATION: THE AUDIT TRAIL • Must allow auditing authorities to: - Trace all declared expenditure to original invoices (or documents of equivalent probative value) - Verify the transfer of funds to final beneficiaries • Clear description of the accounting evidence at each level, and communicate this to everyone involved, including project partners • Accounting evidence should include: - Staff - Overheads - External experts - Travel and accommodation - Meetings and events - Promotion - Investments

  27. FROM INTERREG III 2000-06 TO TERRITORIAL COOPERATION 2007-13 Financial framework:- Co-financing mechanisms - Priorities (and measures) - Financial tables The TA budget is the key to enabling effective action within this framework

  28. Measure 1 MAXIMUM FINANCING: 5% of total programme funds Preparation, selection, appraisal and monitoring Meetings of monitoring committees Audits and on the spot checks Salaries are only eligible in the case of: Civil servants or other public officials Other staff employed to carryout such tasks Measure 2 MAXIMUM FINANCING: Up to the amount approved in CIP Information actions Evaluation: Ex ante Mid term Ex post Purchase and installation of computerised systems for management and monitoring But: No salaries of officials TA BUDGET: Comparison periods 2000-2006: TA budget divided in 2 Measures TA budget in 2007-2013: no Measures TA co-financing: 6% of ERDF: For all activities (now covered under measure 1 and measure 2). This statement is still under discussion and supported by DG REGIO. DG EMPL says 6% of the total budget. The legal department of the Commission is currently supports this view.

  29. FINANCIAL FRAMEWORK ERDF grant rates: Maximums -2000-2006programmes: 50% or 75% - 2007-2013 programmes: 75% or 85% • Many programmes may try to use lower ERDF rates e.g. 50% ERDF • Minimum rate per Priority: 20% • Maximum rate per Priority: 100%

  30. FINANCIAL FRAMEWORK Grant rates at programme and project level: • Maximum grant rate of 75% at programme level (85% if an EU-14 country is involved) • Flexibility at priority and project level e.g. higher ERDF rates for strategic projects, BUT programmes’ decision • Higher grant rates = concentrated allocation of the risk of under-spend in a small number of projects • High grant rates = reduced financial commitment from participating partners

  31. FINANCIAL TABLES: MS / non- MS split Example of programme financial table in 2000–2006 (showing split by year)

  32. FROM INTERREG III 2000-06 TO TERRITORIAL COOPERATION 2007-13 Advance payment &Decommitment rule

  33. ADVANCE PAYMENT 2007-2013 for New Member States: 7% N + 3 N 2% 3% 2% 2007 2008 2009 2010 2011 2012 2013 2014 7% Advance Payment (ERDF) can be deducted from the first decommitment target amount

  34. ADVANCE PAYMENT 2007-2013 for Old EU-15 Member States: 5% N + 2 N 2% 3% 2007 2008 2009 2010 2011 2012 2013 2014 5% Advance Payment (ERDF) can be deducted from the decommitment target amount

  35. N+3 and decommitment N + 2 N + 2 N + 2 N + 2 N + 3 N + 3 N + 3 N + 3 N 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

  36. FROM INTERREG III 2000-06 TO TERRITORIAL COOPERATION 2007-13 Eligibility rules

  37. 2000-2006:12 Eligibility Rules(Regulation nº 448/2004) • Expenditure actually paid out (good general points) • Accounting treatment of receipts (income) • Financial and other charges and legal expenses • Purchase of second hand equipment • Purchase of land • Purchase of real estate • VAT and other taxes and charges • Venture capital and loan funds • Guarantee funds • Leasing • Costs incurred in managing and implementing the Structural Funds (TA) • Eligibility of operations depending on the location

  38. ELIGIBILITY RULES in 2007-2013 - Most eligibility issues will be regulated by MS national rules - MS obliged to publish their national eligibility rules for each OP within 12 months of OP approval: Implementing Reg. Art 21 and 22g: “The description of management and control systems submitted by MS to the Commission shall include: eligibility rules laid down by the MS and applicable to the OP” - Increased transparency and harmonisation of the eligibility rules Art 20 ERDF Regulation 1080/2006, keyfor new eligibility rules 2007-2013:10%- 20% flexibility: • Cross-border cooperation • Transnational cooperation • Cross-border, transnational and interregional cooperation

  39. ELIGIBILITY RULES in 2007-2013 Costs ineligible in 2007-2013: Costs eligible in 2007-2013: • Interest on debt • Purchase of land for an amount > 10% of total eligible expenditure • Decommission of nuclear power stations • Recoverable VAT • Fines, financial penalties and expenditure on legal disputes • Purchase costs for depreciated assets used for an operation • In-kind contributions when calculated according to the approved methods • Depreciation costs • Overheads based on real costs. Flat rates may not exceed 25% of the overhead generating costs of an operation • Expenditure on housing for new MS only (OP with a new MS) • Charges for transnational financial transactions + bank charges for accounts required for implementation of the operation • Legal consultancy fees, notarial fees and costs of technical or financial experts necessary for implementation • Accounting and audit costs related to MA requirements • Bank guarantees required by legislation • Depreciation of assets actually used for an operation for the period of that operation Because of “nationalisation” of eligibility rules, it is advisable for each MS to designate an ultimate authority for deciding on eligibility questions

  40. FINANCIAL CONTROL STRUCTURE IN TERRITORIAL COOPERATION PROGRAMMES 2007 – 2013 Carried out by: First Level Control bodies designated by MS at the start of the programme and JTS / MA Purpose: To check project expenditure and activities Carried out by: Audit Authority Purpose: To check programme systems and procedures and a sample of operations Second Level Control First Level Control Outcome Control by CA Carried out by: Certifying Authority Purpose: To check that project controls have been satisfactorily carried out Check carried out by: The ’winding up body’ – Audit Authority. Purpose: To check that all checks have been satisfactorily completed and it is safe to close the programme

  41. OTHER CONTROL BODIES • Co-financing organisations • Member States • Commission Audit Service • Court of Auditors • OLAF Checks are not regular – but possible anytime

  42. FROM INTERREG III 2000-06 TO TERRITORIAL COOPERATION 2007-13 First Level Control

  43. FIRST LEVEL CONTROL Major changes in 2007-2013 • Each Member State must designate the controllers responsible for this work at the start of the programme period • Can be one per programme, one per country or several per country • Ensure independence from project implementation • Expenditures shall be validated within 3 months • Guidance documents available

  44. First Level Control – a process of several elements First Level Control includes • Formal checkthat expenditure has been calculated and documented in the proper way and is eligible (First Level Controller) • Activity checkthat all expenditure relates to approved and relevant activities (MA / JTS) • In some cases ‘on-the-spot’ checks(First Level Controller / JTS / MA / MS)

  45. FROM INTERREG III 2000-06 TO TERRITORIAL COOPERATION 2007-13 Second Level Control

  46. Audit – Second Level Control 2007 – 2013 • Regulations establish new body – the Audit Authority – for overseeing programme audit requirements • Each MS involved will nominate a representative to a “Group of Auditors” per programme, which will assist the AA • AA can be authorised to operate for the whole programme, without a group of auditors

  47. Selection of a sample for the Second Level Control 2000-2006: The selection of a 5% representative, risk-based sample of operations to be checked includes: • An appropriate mix of types and sizes of operations • Any risk factors identified by national or Community checks • The concentration of operations under certain intermediate bodies or final beneficiaries, so that the main intermediate bodies and final beneficiaries are checked at least once before the winding-up of each assistance 2007-2013: • Representative random sample • Not 5% of programme funds but enough to ensure at least 60% confidence level • Systems and procedures checks must continue throughout programme lifetime

  48. Second Level Control now and in the future – SUMMARY

  49. FROM INTERREG III 2000-06 TO TERRITORIAL COOPERATION 2007-13 Irregularities and Recoveries

  50. Irregularities under the reporting threshold 2007-2013 • MS shall keep accounts of amounts below EUR 10 000 threshold • MS shall keep accounts of amounts recovered or withdrawn following cancellation of the contribution to an operation • MS shall repay the recovered amounts to the general budget of the EC MS do not need to report irregularities if: • Irregularity is due to bankruptcy of the beneficiary • Beneficiary voluntarily informed MA and CA about it regardless if payment to beneficiary has already been made or not • MA and CA corrected it before payment was made to beneficiary and before inclusion of the irregular expenditure in a statement of expenditure submitted to the Commission

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