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Group of the Progressive Alliance of Socialists & Democrats in the European Parliament

Group of the Progressive Alliance of Socialists & Democrats in the European Parliament CONT Round Table Brussels, 9 December 2010 SHAPING THE FINANCIAL REGULATIONS TO SERVE OUR POLITICAL GOALS THE EXTERNAL AID PERSPECTIVE Alexandra Mège-Pellicier. ActionAid. Aprodev. Austrian platform.

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Group of the Progressive Alliance of Socialists & Democrats in the European Parliament

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  1. Group of the Progressive Alliance of Socialists & Democrats in the European Parliament CONT Round TableBrussels, 9 December 2010 SHAPING THE FINANCIAL REGULATIONS TO SERVE OUR POLITICAL GOALS THE EXTERNAL AID PERSPECTIVE Alexandra Mège-Pellicier

  2. ActionAid Aprodev Austrian platform Belgian platform British platform Caritas Cidse Czech platform Danish platform Dutch platform Eurodad CARE Eurostep Finnish platform French platform German platform Greek platform IPPF Irish platform Italian platform Luxembourg platform Malta platform Portuguese platform Slovakian platform Solidar EU-CORD Spanish platform Swedish platform Terre des Hommes Slovenianplatform Plan World Vision Oxfam Adra Hungarian platform Poland platform Cyprus WIDE Estonia platform Bulgaria CBMI Latvia platform Members of CONCORD 43 members in2010 Save the Children Representing over 1600 European Development and Relief NGOs

  3. Preliminary remarks • There are still many topics that add a lot of administrative and technical burden to the daily work of organisations active in the field of external aid. • A better balance should be sought between operationality and accountability. Increased administrative burden does not lead to increased efficiency, impact or financial rigour. • The present revision of the Financial Regulation has to be in line with the new Treaty and the correct mandate of the European External Action Service (EEAS).  CONCORD supports the European Court of Auditors’ observations concerning the importance “to preserve and enhance accountability, responsibility, and quality of financial management at Delegation level”. The future organizational structure of the EU Delegations should not put at risk the effectiveness of their operational and financial functions and their segregation of duties.

  4. CONCORD welcomes the following changes • Higher thresholds on cascading grants per organisation (50.000 euros) and no maximum total ceiling any more (art. 120 FR and art 184.a of IR) • Suppression of the obligation to pay back interest accrued on the EC pre-financing (art. 5.4 FR and art. 4.a.1 IR) • Possibility to re-invest income generated by an action into the project (link to the non-profit rule) (art. 169.b FR)

  5. Disagreement and worries about the following modifications • Against a general application of lump sums & flat-rate (with the exception of the possibility for grant beneficiaries to use average personnel costs at their own choice) (art.108.a FR and art. 180.a IR, art. 181 IR) • Against performance based agreements for development projects (art. 108.a FR) • Against excessive control and worries about the new notion of “systemic error” for grant contracts (art. 119 FR and art. 180 IR, art. 183 IR)

  6. Need for clarification on… • Double Co-financing level and possibility to charge ineligible costs within the co-financing (art. 164.d.i IR) • The threshold of 7% of indirect costs and the possibility to go beyond? (art. 181.4 IR) • Possibility of the evaluation committee to negotiate budget / project and the associated risks (art. 116 FR and art. 178.3 IR, art. 178.4 IR) • The fact that the requirement of lodging a bank guarantee is NOT removed  but let at the discretion of the authorizing officer (art. 118 FR and art. 182.1 IR, art. 182.2 IR)

  7. Further recommendations… • Prevalence of the Financial Regulation over all the other Regulation to ensure consistencies of across EU funding instruments • Eligibility of taxes (incl. VAT) in all cases to ensure actual coherence of EU policies • Need for proper consultation on the definition of programming documents (this is even more important when such programmation cycle covers several years) (art. 110 FR and art. 166 IR/note)

  8. Thank you for your attention Alexandra Mège-Pellicier amege@handicap-international.org

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