Setting Up the New Cohesion Policy Implementation System

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Nov 10, 2013 (3 years and 8 months ago)

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Anthoula Charalambous Savvides

Senior Coordination Officer, Planning Bureau


Structural and Cohesion Funds Directorate

Managing Authority


Budapest 5 October

20
12







Setting Up the New Cohesion Policy
Implementation System


Objectives and Challenges

Lessons Learnt from PP 2007
-
2013





Overview




2



Management and Control System (MCS)

2014
-
2020 Legal Basis
(
not final
)



MCS Key Objectives



Good Governance



Internal Controls



Institutional Framework



Tools for Effective Operation of the MCS



E
-
Cohesion Policy



Strengths and Weaknesses
-

Cyprus case









Cohesion Policy Implementation System

PP 2014
-
2020



Objective
:

Simplification

of

the

cohesion

policy

delivery

system,


a
iming at the reduction of administrative burden for beneficiaries


Challenge
:

Balance

the

accountability

of

designated

bodies

to

the

complex

regulatory

environment,

with

the

public

interest,

by

bringing

about

positive

outcomes

and

added

value


Distinction between the soundness of the management
and control procedures and processes and the goals that
they are meant to achieve remains very important


(Goal:
efficient and effective allocation of resources, consistent
with policy priorities)


Management and Control System

PP 2014
-
2020,
Legal Basis (
not final
)

Common

Provisions Regulation, Part 2
-
Common
Provisions Applicable to CSF Funds, Title VIII
Management and Control, Chapter III, Article 65


Commission Powers and Responsibilities

Common

Provisions Regulation, Part 3
-

General
Provisions Applicable to the ERDF, the ESF and
the CF, Title VI, Chapter I, Management and
Control Systems, Articles 113
-
116

Designation and functions of MA, CA and AA

Financial Rules Regulation, Article 56


Shared Management with Member States

4





Common Provisions Regulation (CPR),
Management and Control,

Commission Powers and Responsibilities
(
not final
)



satisfies

itself

that

MS

have

set

up

management

and

control

systems

which

function

effectively

and

in

compliance

with

the

CPR

and

the

Fund
-
specific

rules


may

carry

out

on
-
the

spot

audits

or

checks

respecting

the

principle

of

proportionality
,

by

taking

into

account

the

need

to

avoid

duplication

of

audits,

the

level

of

risk

to

the

Union

Budget

and

the

need

to

minimize

administrative

burden

to

beneficiaries


Scope of Commission’s audits,


v
erification of effective functioning of systems and


a
ssessment of the sound financial management of programs


5

The Commission
,










Financial Rules Regulation, Article 56
Shared Management with Member States


respect the principles of sound financial management, transparency and non
-
discrimination

The Commission and Member States


ensure correct and effective implementation in accordance with applicable
rules


designate and supervise bodies responsible for the management and control


carry out controls respecting the principle of proportionality and prevent, detect
and correct irregularities

Member States


monitors the Management and Control Systems set in MS


respects the principle of proportionality and level of assessed risk in its audit
work

Commission


provide the Commission by 15 February, annual accounts, annual summary of
final audit reports and of controls (accompanied by an opinion of an
independent audit body)

Designated Bodies









Member

States


Designate

MAs

(public

or

private

body)

and

CAs

(public

body)
.

MA

which

is

public

body

may

carry

out

the

functions

of

CA


Designate

AA

functionally

independent

from

MA

&

CA


May

designate

IBs

to

carry

out

certain

tasks

of

MA

&

CA

(arrangements

between

IBs

and

MA&CA

formally

recorded

in

writing)




MA,

CA

&

AA

may

be

part

of

the

same

public

body

for

the

investment

for

growth

and

jobs

goal,

for

programs

EU

contribution<

250

mln


Notification

of

formal

designation

of

MA

and

CA

prior

to

submission

of

1
st

application

for

payment



Designation

based

on

a

report

&

an

opinion

of

independent

audit

body
.

Audit

work

may

not

be

carried

out

where

the

MCS

essentially

the

same

as

for

2007
-
2013

&

evidence

of

effective

functioning
.

(
Report

and

opinion

of

audit

body

may

be

requested

by

Commission

for

OPs

exceeding


250

mln

and

for

which

there

are

significant

changes)


Common Provisions Regulation,

Provisions Applicable to ERDF, ESF and CF

Management and Control Systems (
not final
) (1)










Managing Authority
, responsible for managing the OP in
accordance with the principle of sound financial management
(management of OP, selection of operations, financial
management & control, verifications)


Certifying Authority
, responsible for payment applications, for
drawing up accounts (Art 56 of FR) and certifying their
accuracy, completeness & veracity, for amounts recoverable
and withdrawn, for maintaining accounting records


Audit Authority
, carries out audits on the proper functioning of
the MCS and responsible, for audit opinion according to
Article 56 of FR and control report





Common Provisions Regulation,

Provisions Applicable to ERDF, ESF and CF

Management and Control Systems (
not final
) (2)








MCS Key Objectives

To view the management and control system only through the
regulatory and technical prism would distort the picture


Design a system based on the key objectives it is supposed to
achieve

Key Objectives
:


Allocation of resources consistent with policy priorities (requires
good planning
)


Expenditure control (requires effective
internal controls system
)


Good operational management to promote efficiency and
effectiveness


(requires
good coordination
among involved
Authorities)


Basic Requirement: good governance




Good Governance

Accountability


Officials
answerable and
have
consequences
for acts of
commission or
omission

Predictability


clear laws
and
regulations
enforced
uniformly and
effectively

Transparency


clear roles and
responsibilities,
access to
information,
open program
preparation,
execution and
reporting

Participation


by all
stakeholders
for feedback
and reality
check

Internal Controls

appropriate

cost effective

functioning
consistently
as planned

promote orderly,
economical, efficient
and effective
operations

safeguard resources
and
adhereance

to
laws and regulations

develop and
maintain reliable
data

Institutional Framework


Poor efficiency and effectiveness is partly rooted in institutional
issues. Institutions comprise both formal and informal rules
(“established practices”). Three basic points:



Failure to take into account key informal rules is likely to lead to a
failure of the system (
it was the unexposed part of the iceberg that sank the
Titanic
). Improvements may fail if in conflict with the less visible
informal rules.


Total stock of institutions is always larger than is visible on the formal
surface.


Organizations and units can be merged, restructured, recombined
and new created, but no change in outcomes will result unless the
basic processes and procedures change as well.


Build the management and control system based on the new legal
framework and taking into consideration the existing
institutional framework


E
-
cohesion




The E
-
cohesion initiative stemmed from the need to,


simplify implementation by reducing the administrative burden on

beneficiaries, so the ‘only once’ principle may be applied and to


increase transparency and openness


To comply with the e
-
Cohesion initiative MS are expected to have in place, for the PP 2014
-
2020, an IT environment enabling the secure exchange of information in an electronic way.




Consider reengineering processes to maximize efficiency (to apply

advanced IT to inefficient processes means to computerize

inefficiency)



IT cannot substitute for good management and internal controls


IT system should meet the following criteria,


fit real objectives and user requirements


go hand in hand with improved rules and processes


protect data and systems integrity


aim at an integrated strategy and avoid piecemeal approach






Management and Control System

2007
-
2013
-

Cyprus case

Tools for Effective Operation of the MCS

MCS

Circulars

(
common
procedures
)

MIS

(tools and
reports)

Support

(continuous)


Seminars
and
Workshops

14

Management and Control System


2007
-
2013 Lessons Learnt

Strengths
-

Cyprus case

Common/Single system of monitoring and controls (and
MIS) enforced through MA circulars,
enhanced efficiency

Emphasis on internal system of controls, ex
-
ante
verifications (administrative and on
-
the
-
spot , timing and
content controlled by MA and inbuilt in MIS)
ensured
correctness of operations

Emphasis on capacity building/strong IBs (staff / training /
support)
promoted effectiveness

Close communication and coordination between
responsible bodies
ensured better planning and
coordination
of activities, financial management and
control

Help Desk (provision of continuous support to
Beneficiaries and IBs)

15

Management and Control System


2007
-
2013 Lessons Learnt

Weaknesses
-

Cyprus case

Extensive controls at Beneficiary and IB level
delaying submission and verification of expenditure


Management Information System not integrated with
national accounting system and/or other IT systems


Different financial flow system for different kinds of
beneficiaries (effort not to create parallel structures,
but designed number of financial flows systems)

MIS does not support electronic submission of data
from aid schemes’ Beneficiaries (mainly private
sector)

IBs performing extensive controls on Beneficiaries
that are Government Departments (expend. already
well controlled because of national procedures)

16

Conclusions






Implementation systems should be more efficient and effective
,


reconsider

procedures,

processes

and

specific

roles


rethink

what

we

do

and

what

we

can

do

differently


gather,

process

and

store

information

and

transform

it

to

knowledge

and


wisdom



give

more

emphasis

on

Beneficiaries’

needs

and

improve

accessibility



face

bureaucracy

built

in

our

systems

and

challenge

the

structures


learn

from

our

experiences



Management should be more than administration
.
Care should be
taken so that we are not reduced to systems and controls
. To achieve
efficiency and effectiveness we should

a)
simplify

b)
simplify and

c)
simplify more

Thank you

for your attention

http://www.structuralfunds.org.cy