Financial rules of the Structural and Cohesion Funds

1. Financial rules of the Structural and Cohesion Funds DG Regio - Ispa Organised by DG REGIONAL POLICY Financial Management : the “n+2 rule” Michael Hill Regio.G1 Meeting of 9 and 10 April 2003 nkb

2. Financial rules of the Structural and Cohesion Funds DG Regio - Ispa • Financial Plans of SF programming documents: • Commitments in the EC Budget covering 2004, 2005 and 2006. • Total annual amounts fixed at the Copenhagen European Council • Figures in current prices still to be communicated by the Commission Meeting of 9 and 10 April 2003

3. Financial rules of the Structural and Cohesion Funds DG Regio - Ispa • Financial Plans of SF programming documents: • Payments on the ground from date of eligibility until end 2008. • Date of eligibility can be 1 January 2004 • “Reimbursements” are the general rule Meeting of 9 and 10 April 2003

4. Financial rules of the Structural and Cohesion Funds DG Regio - Ispa Financial Plans: 2004 2005 2006 Reimbursements Reimbursements Final payment 6 % advance Reimbursements 10 % advance 10 % advance paid after signature of decision in 2004 Remaining 6% of advance in 2005 on 2004 commitment All payments made from oldest commitment Meeting of 9 and 10 April 2003

5. Financial rules of the Structural and Cohesion Funds DG Regio - Ispa Financial Plans: 2004 2005 2006 “N + 2” Reimbursements Payments until 2007 6 % advance Reimbursements 10 % advance Final 5% Payments until 2008 Reimbursements • Automatic decommitment of any part not paid out after n+2 • Final 5% of total assistance held until closure Meeting of 9 and 10 April 2003

6. Financial rules of the Structural and Cohesion Funds DG Regio - Ispa Exceptions to the n+2 rule • Subsequent Decision by the Commission during the lifetime of an OP/SPD:(article 32§2.2): state aids; major projects • Operations subject to a judicial procedure (article 32§2.3) Meeting of 9 and 10 April 2003

7. Financial rules of the Structural and Cohesion Funds DG Regio - Ispa Article 32 (Structural Funds Regulation 1260/99) “All or part of a payment on account … shall be repaid to the Commission … if no payment application is sent to the Commission within 18 months of the decision … ” Meeting of 9 and 10 April 2003

8. Financial rules of the Structural and Cohesion Funds DG Regio - Ispa Article C § 5 of the Annex of the Cohesion Fund Regulation: “m+24” rule “Except in duly justified cases, the assistance granted to a project, group of projects or project stage on which work has not begun within 2 years from the date of its expected start as indicated in the decision granting assistance or the date of its approval if later, shall be cancelled.” Meeting of 9 and 10 April 2003

9. Financial rules of the Structural and Cohesion Funds DG Regio - Ispa • Summary - the crucial role of the managing authorities • Programming of the “SF” and the “CF” according to the different rules: n+2 / m+24 • Start preparing measures and projects now • Eligibility from 01/01/2004 (if EC rules followed) • IT systems • “Programme complement” = keep the structure simple • “Programme complement” = flexibility between measures • Co-financing : reimbursement is the rule > the need to find the financial means to “pay the bills” Meeting of 9 and 10 April 2003

10. The End Financial rules of the Structural and Cohesion Funds DG Regio - Ispa Questions Meeting of 9 and 10 April 2003