Simplification, clarification, coordination and flexible management of the structural policies
To make it easier to manage the Structural Funds in order to speed up the utilisation of appropriations.
Communication from the Commission on the simplification, clarification, coordination and flexible management of the structural policies 2000-2006 [C(2003) 1255 - Not published in the Official Journal].
The Commission and the Member States have embarked on an exercise to simplify the procedures for managing the Structural Funds with a view to speeding up the utilisation of appropriations. This simplification exercise is in line with the provisions in place on the Structural Funds which do not need to be amended. The simplification measures relate to ten separate areas. They concern the preparation of the programmes of the future Member States during the next programming period.
Ten areas are affected:
- adjusting the programmes;
- mid-term review;
- result and impact indicators;
- performance reserve;
- the annual meeting between the Commission and the managing authorities;
- the Commission's role in the monitoring committee;
- financial management;
- speeding up the Commission's internal procedures.
MEASURES WHICH HAVE BEEN AGREED AND CAN BE IMPLEMENTED IMMEDIATELY
Adjusting the programmes
The adjustment of the programmes is possible in the interests of sound management, including financial management. In this case, it involves either adjusting the programme complement alone (the document giving details of the measures announced in the programme documents), or amending the decisions by which the programmes were approved.
Adjusting only the programme complement is possible where:
- the content and financial allocation (Community and national contributions) of the measures have changed without retroactive effect;
- the breakdown of public funding between national/federal, regional and local levels has changed;
- the breakdown of public/private funding in a national co-financing arrangement is adjusted, by, for example, the inclusion of a completely new private contribution.
The approval decisions may need to be amended in order to improve the management process. Any automatic decommitments resulting from the application of the "n+2" rule are also covered here.
Significant changes in the socio-economic situation can also result in the adjustment of the programmes. An exceptional situation, such as the floods in central Europe in 2002, requires the development strategy to be revised and operations to be redirected at areas where assistance is required most urgently.
The Commission must publish a report setting out a comparative analysis of national systems of financial management and control which identifies best practice.
Regulation (EC) No 438/2001 on the management and control systems for assistance granted under the Structural Funds was amended at the end of 2002. It now includes very clear rules on storing documents.
New measures will be introduced to ensure that controls can be coordinated more effectively. As of 2003, the Commission will publish its audit programme for the Structural Funds on the CIRCA site each year. Ad hoc or unannounced audit visits will still be possible. The Commission will also update the Structural Funds Audit Manual. Once the Commission is able to rely on the audit work of national bodies, it will have enough leeway to limit its own on-the-spot audit activity. The Member States will be encouraged to draw up their audit programmes before the start of the next calendar year and to submit them to the Commission in order to avoid duplication of effort. From 2004, they will have access to SYSAUDIT -- the database containing all the audits of the Community and national bodies. The Court of Auditors will also be asked to take part, the ultimate objective being, to adopt a properly coordinated strategy.
The mid-term review
At the end of August 2003, the Commission published its revised guidelines for the programmes for 2000-2006. These guidelines will not result in a renegotiation of the assistance provided.
The annual meeting in autumn 2003 between the Commission and the management authorities should provide an opportunity to discuss a possible mid-term review of the programmes. Where appropriate the Monitoring Committee, at its first meeting in 2004, will discuss and approve an amended programme complement and will adopt a formal proposal for adjusting the assistance. The Committee will, within two weeks, send the Commission the new programme complement (for information) and the formal proposal for adjusting the assistance (for adoption). In April 2004, the Member State and the Commission will have to reach an agreement. In accordance with the flexibility clause, the Commission's decision will not depend on the opinion of the expert committees. Where possible, the Commission will take a decision within two months of receiving the request for an adjustment.
In order to reduce the large number of reports, the Member State will be able to incorporate the annual control report into the "controls" chapter of the single annual report. The information contained in the report will be limited to the monitoring, control and evaluation of action taken and to the measures introduced to deal with the problems encountered.
Result and impact indicators
In partnership with the Member States, the Commission will examine the indicators used to monitor and evaluate assistance, particular in the case of multifund programmes. In order to reduce the administrative burden, the Commission proposes using financial indicators in real time and implementation and result indicators annually. It is also proposed that (mid-term and final) evaluation be used for calculations involving the impact indicators.
The Member States will seek to put in place a simplified system of indicators with a view to allocating the performance reserve. Between eight and twelve representative indicators is appropriate.
A single decision will be taken with regard to the performance reserve and the revision of the programmes at the mid-term point.
Annual meeting between the Commission and the managing authorities
As regards the management of the Structural Funds, the "managing authority" is the public or private body, at national, regional or local level (or the Member State itself when it performs this function) which manages assistance. The "monitoring committee" for a particular programme is a body for monitoring assistance which brings together all the partners: the administrative authorities and those involved in the economic, social and environmental spheres. The Commission will play an advisory role in this regard.
The annual meeting between the Commission and the managing authorities is more political in nature than the meetings of the monitoring committee. At the annual meeting, the Commission will be represented at a more senior level than in the monitoring committee. Every effort should be made to prevent potential duplication between the Commission's annual control meeting with the Member State and the annual review. In the case of the programmes which function most effectively, the annual meeting could be replaced by an exchange of letters covering the implementation of the operations. Given that 500 programmes will be implemented during the 2000-2006 period, the Commission is planning to organise annual meetings as videoconferences in the interests of economy.
The Commission's role in the monitoring committee
It is essential that the monitoring committee be prepared effectively if positive results are to be achieved. The managing authorities will take steps early enough to provide an indicative timetable of the meetings of the monitoring committee. Within the monitoring committee, the Commission representation will comprise an official from each DG involved in the Structural Funds concerned. It will be headed by the representative of the lead DG, who will be responsible for the Commission's formal relations with the monitoring committee and will set out the Commission's position. Following each meeting, he will draw up a brief report on the main points of the meeting and on the measures which need to be taken internally.
The monitoring committee will focus on matters relating to general monitoring. It will deal with eligibility questions relating to the operation and will encourage exchanges of experience, particularly by inviting representatives from other Member States. The committee will meet at least once a year and will not take any decisions on individual projects.
The proposals for clarification cover the following four areas:
the "N+2" rule
The rule on automatic decommitments means that amounts are decommitted if they have not been the subject of a payment during the two years following their commitment. The simplification of this rule relates to the practical arrangements for the application and calculation of the amounts involved (reference dates and reference documents, prior information procedure for the Member States, directing financial contributions to the most promising items of assistance). However, it is impossible to calculate the decommitments for each programme, as the commitment is specific to each Fund;
rule on repayment of the payment on account
All or part of the initial payment on account of 7% must be repaid to the Commission if no payment application is submitted within 18 months of its decision to grant a contribution from the Funds. To reduce the level of risk, the Commission has developed an early warning system;
calculating interim reimbursements
The Commission proposes reimbursing applications for interim payments (based on the amounts due to final beneficiaries) either at the cofinancing rate for the measure or on the basis of the Community contribution. In the first case, this arrangement already applies. As regards reimbursement of the Community contribution at the level of operations, the Member States must explicitly inform the Commission of the programmes and Fund(s) to which they are asking for it to apply;
Irrespective of which system they choose, the national authorities will not be permitted to switch systems during the period of implementation. No legal changes are required. However, if the national authorities do not officially state which system they intend to use, the Commission will reimburse applications for payment on the basis of the co-financing rate for the measure.
The Commission's internal procedures
The national delegations on the Structural Fund committees have agreed no longer to be consulted formally on the amendments to the programming documents at the mid-term stage.
OTHER POINTS UNDER DISCUSSION
A "contract of confidence" for controls
The Commission has proposed a new "contract of confidence" based on the efficient coordination of national and Community controls. This "contract of confidence" is based on three elements:
- compliance with the legal provisions of Regulation (EC) No 438/2001 on the management and control systems for assistance granted under the Structural Funds;
- the drawing up of a satisfactory audit strategy by the national authorities for the 2000-2006 period;
- the submission of reports which provide an adequate basis for assessing the effective implementation of the audit strategy.
The "contract of confidence" will be applied using a management and control system which can cover a region, a fund or a programme. At the same time, the Community controls will be reduced and the period during which supporting documents must be kept will be shortened (three years).