Initial eligibility assessment and

1. Initial eligibility assessment and ex-post monitoring of State aid in EU funds co-financed projects

2. Content • Initialeligibilityassessment • Assessment of aid objectives • Assessment stages • Preparation stage • Project appraisal 2. Ex-postmonitoring • Monitoring of project implementation 3. Payment of costs

3. Goals of project appraisal • Reduce market distortions to minimum • Prevent fraud in EU funded projects • Prevent inappropriate or disproportionally large support to beneficiary

4. Payment of costs • Payment is made to the beneficiary only after a full 3-step check-up that includes: • Appraisal and approval of the project application; • Verification that the actual expenditure has been made in compliance with the program provisions (i.e.,as per contract); • Verification that the objectives of the program (e.g. commencement of economic activity based on the purchased equipment) have been reached.

5. Preparation stage for receipt of projects • Preparing for project selection • Launch of informative campaign on the program provisions: • publication in local newspapers on the opening of a program; • organizing public seminars; • draw-up and distruibution of informative portfolio; • publications on IDAL’s website; • consultations on the program provided by IDAL’s customers service. • Informing potential applicants of project monitoring and fraud prevention

6. Appraisal of project applications • Documentation checklist procedure: • Non-eligible sectors; • Eligibility check on project activities and costs; • Requested aid does not exceed the amount of aid under the program; • Aid intensity; • Time-set for project implementation corresponds to that provided for by state aid program; • Cumulation of aid; • SME status; • Verification whether enterprise is not in financial difficulties; • Initial investment, the definition of experimental development • Goal of the documentation checklist procedure is to disallow project applications from non-compliance with program provisions

7. Appraisal of project applications • In-depth appraisal of the project: Validity check of the costs ear-marked for eligibility based on: • publicly available information; • expert rating; • information provided by equipment manufacturers or service providers.

8. Evaluation system of project appraisal • An inter-institutional body (IIB) carries out an in-depth appraisal (including objective conformity check) • IDAL arranges and provides information to IIB, and does secretarial work • IDAL carries out the documentation checklist procedure • The first evaluation phase ends up with the signing of the contract • IDAL ensures a contract monitoring function

9. Contract signing and implementation • IDAL drafts a model contract for each state aid program, which includes provisions required by state aid program; the model contract is then proposed for approval to the Managerial Body (Ministry of Economics); • Project reviewed and approved by IIB becomes an integral part of the contract upon conclusion of the contract; • Amendments to the contract (if such) proposed by the beneficiary go under review to ensure they are not in conflict with provisions of state aid program.

10. Project implementation and post-monitoring • On-the-spot checks: • During project implementation; • After the final payment. • Interim and final checks: • Progress report checks (every 6 months of the project); • Verification of payment claims and expenses incurred.

11. Compliance with state aid requirements (I) • Objective – to check whether the objectives of the project have been reached and review the eligibility and accuracy of costs incurred for achieving these objectives. • Activities: • On-the-spot checks– verification of the actual works, performed supplies and services based on the project and supporting documentation: • contracts for works, supplies or services provided; • transactions and supporting documents; • Progress report check: verifying whether the project implementation has been carried out in compliance with the project provisions.

12. Compliance with state aid requirements (II) • Eligible costs: • Adequacy of costs (illegal arrangement of costs): • Public information; • Equipment manufacturers; • Expert rating; • Documentation check: • Check the payment claims included in the cost of items and the supporting documents; • Double financing check to make sure eligible expenses are not included in beneficiary’s operating expenses and any other EU or national, or local project co-financed expenditure: • Accounting records present separate accounts for the project costs; • Existing a separate banking account for the project; • The project documentation bears a reference to the contract concluded with IDAL.

13. Compliance with state aid requirements (III) • The maximum amount and intensity – check whether the payment claim does not exceed the required amount of support stipulated by the contract and state aid requirements • Project duration –the extension of the project is disallowed if it exceeds the aid program; • Specific requirements by aid programwhich may provide that: • On-the-spot-checks are to verify whether the installations or technologies acquired are new; • The experimental results of development are not used for commercial purposes;

14. Payment of costs • After all activities under the project have concluded • After IDAL has made it sure that the project objective has been achieved (e.g., the equipment is used for the purpose of beneficiary’s economic activity) • After the final payment IDAL carries out monitoring of the project for 3-5 years

15. Thank you for your attention!