EU Cohesion Policy 2014-2020 Proposals from the European Commission Structural Actions Working Party 12-13 October 2011

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EU Cohesion Policy 2014-2020Proposals from
theEuropean CommissionStructural Actions
Working Party12-13 October 2011
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Legislative package

• The General Regulation
• Common provisions for cohesion policy, the rural
  development policy and the maritime and fisheries
  policy
• Common provisions for cohesion policy only (ERDF,
  CF, ESF)
• Fund specific regulations
• ERDF regulation
• CF regulation
• ESF regulation
• ETC regulation
• EGTC regulation

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Building Blocks

• Financial Framework and co-financing rates
• Strategic approach
• Conditionalities and performance
• Programming
• Territorial development
• Financial instruments
• Monitoring, evaluation and indicators,
  information and communication
• Conditions of assistance, including simplified
  costs
• Management and control and financial management
• Scope, thematic concentration in ERDF and CF
  regulations
• Scope, thematic concentration in ESF regulation
• European territorial cooperation
• Comitology, etc.

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Block 1
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Mission and Goals

• Mission of EU cohesion policy
• to reduce disparities between Europe's regions
  strengthening economic, social and terrritorial
  cohesion in line with article 174 of the Treaty
• to contribute to the Union Strategy of smart,
  sustainable and inclusive growth
• Two goals
• Investment for growth and jobs
• European Territorial cooperation

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Budget for Cohesion Policy post 2013
  billion EUR (2011 prices)
Cohesion Fund 68.7
Less developed regions 162.6
Transition regions 39.0
More developed regions 53.1
Territorial Cooperation 11.7
Extra allocation for outermost and northern regions 0.9
TOTAL 336.0
Connecting Europe facility for transport, energy and ICT 40.0
TOTAL 376.0
Cohesion Fund will ringfence 10 billion EUR for the new Connecting Europe Facility Includes 2,5 billion EUR allocation for food for deprived persons Cohesion Fund will ringfence 10 billion EUR for the new Connecting Europe Facility Includes 2,5 billion EUR allocation for food for deprived persons
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Geographical coverage of support

• Three categories of regions
• Less developed regions (GDP per capita lt 75 of
  EU average)
• Transition regions (GDP per capita between 75
  and 90)
• More developed regions (GDP per capita gt 90)
• The new category of transition regions replaces
  the current statistical phasing-out and
  phasing-in regions
• Why a new category for transition regions?
• Fairer system for regions with similar level of
  economic development
• Helps to soften the transition between less and
  more developed regions
• Safety net for regions whose GDP per capita is
  below 75 of the EU average in 2007-2013

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• Cohesion Fund for Member States with GNI per
  capita lt90
• Investments in the fields of environment and
  trans-European transport Networks
• On the basis of latest GNI figures, Greece and
  Cyprus will benefit from phasing-out of Cohesion
  Fund

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Financial support from the Funds

• Maximum co-financing rates at the level of the
  priority axis
• 85 for the Cohesion Fund
• 85 for the less developed regions of Member
  States whose average GDP per capita for the
  period 2007 to 2009 was below 85 of the EU-27
  average during the same period and for the
  outermost regions
• 80 for the less developed regions in Member
  States eligible for the transitional regime of
  the Cohesion Fund on 1 January 2014
• 75 for the less developed regions in Member
  States other than those mentioned above
• 75 for all regions whose GDP per capita for the
  2007-2013 period was less than 75 of the average
  of the EU-25 for the reference period but whose
  GDP per capita is above 75 of the GDP average of
  the EU-27
• 60 for other transition regions
• 50 for the more developed regions (apart from
  those whose GDP per capita was less that 75 of
  EU average in 2007-2013)
• 75 for European Territorial Cooperation

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Technical assistance

• No changes in coverage or scope only
  clarification
• TA at the initiative of the Commission 0,35
• TA at the initiative of the MS
• Up to 4 for mainstream programmes
• Up to 6 for ETC, but no less than EUR 1 500 000
• One Fund can finance technical assistance for
  other Funds (multi-fund programmes, separate OP
  for technical assistance), however only up to 10
  of any Fund can be allocated to TA

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Block 2
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Common Principles for all Funds (1)

• Strengthening partnership and multi-level
  governance
• Introduction of a binding European Code of
  conduct
• Sets out objectives and criteria to support the
  implementation of partnerships
• Facilitates sharing of information and good
  practices among Member States
• Compliance with Union and national law

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Common Principles for all Funds (2)

• Reinforcement of gender equality and
  non-discrimination
• Horizontal principle of the regulations
• Specific actions in OPs, covered by ex-ante
  evaluation
• Opinion of the national equal opportunities body
  on the OPs
• Project selection
• Followed up in reporting
• Promoting sustainable development
• Horizontal principle of the regulations
• Specific actions in OPs, covered by ex-ante
  evaluation
• Project selection
• Followed up in reporting
• Tracking of expenditure for climate change
  objectives

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Thematic Objectives to Deliver Europe 2020

• Strengthening research, technological development
  and innovation
• Enhancing access to, and use and quality of,
  information and communication technologies
• Enhancing the competitiveness of small and
  medium-sized enterprises, the agricultural sector
  (for the EAFRD) and the fisheries and aquaculture
  sector (for the EMFF)
• Supporting the shift towards a low-carbon economy
  in all sectors
• Promoting climate change adaptation, risk
  prevention and management
• Protecting the environment and promoting resource
  efficiency
• Promoting sustainable transport and removing
  bottlenecks in key network infrastructures
• Promoting employment and supporting labour
  mobility
• Promoting social inclusion and combating poverty
• Investing in education, skills and lifelong
  learning
• Enhancing institutional capacity and an efficient
  public administration

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Strengthening the Strategic Approach
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Common Strategic Framework

• Sets a comprehensive investment strategy for all
  the funds, including rural development and
  maritime and fisheries policies
• Translates the thematic objectives into key
  actions for Member States and regions
• Establishes priority areas for cooperation
  activities
• Ensures better coherence and consistency with the
  National Reform Programmes

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Partnership Contract

• Prepared at national level with close involvement
  of partners
• Agreed between the Commission and Member State,
  includes
• The contribution of the CSF Funds towards the
  achievement of thematic objectives
• An integrated approach for territorial
  development supported by the CSF Funds
• Arrangements for effective implementation
  involvement of partners, ex-ante
  conditionalities, performance framework,
  additionality
• Arrangements for efficient implementation
  administrative capacity, administrative burden
  reduction

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Adoption and amendment of the partnership contract

• The Commission shall assess the consistency of
  the Partnership Contract with the CPR, with the
  Common Strategic Framework, and the
  country-specific recommendations under Article
  121(2) of the Treaty and the Council
  recommendations adopted under 148(4) of the
  Treaty, taking account of the ex ante evaluations
  of the programmes
• The Commission shall adopt a decision approving
  the Partnership Contract within 6 months of its
  submission
• If the Common Strategic Framework is revised, the
  Member States shall propose amendments, where
  necessary, to their Partnership Contract and
  programmes to ensure their consistency with the
  revised Common Strategic Framework

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Block 3
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Ex-ante conditionality

• Conditions to be fulfilled prior to submission
  of Partnership Contracts and operational
  programmes
• Directly related to the thematic objectives or
  horizontal conditions of effectiveness
• Specified criteria for fulfilment defined in
  annex IV of CPR
• Conditionalities must be fulfilled within two
  years of the approval of the Partnership Contract
  or by end of 2016
• Non-fulfilment of conditionalities at the time of
  the adoption of the programmes or by the deadline
  outlined above constitutes a basis for suspension
  of payments

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Reinforced macroeconomic conditionality for the
Funds

• Closer link between cohesion policy and the
  economic governance of the Union in two areas
• Council recommendations
• The broad economic guidelines, the employment
  guidelines as well as the Eurozone-specific
  measures
• The excessive deficit procedure
• The macroeconomic imbalances procedure
• Union financial assistance to a Member State
• under the European financial stabilisation
  mechanism
• under the facility providing medium-term
  financial assistance for Member States' balances
  of payments
• in the form of an ESM loan

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Amendment of programmes and partnership contracts

• Commission may request or propose amendments to
  the Partnership Contract and relevant programmes
  where it is necessary to
• support the implementation of Council
  recommendations
• maximise the impact of the funds where the Member
  State receives financial assistance from the EU
• Commission can suspend payments where Member
  State fails to react to Commission requests or
  observations within the established deadlines

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Specific provisions linked to adjustment
programmes

• Where a Member State receives Union financial
  assistance linked to an adjustment programme,
  the Commission may amend the Partnership Contract
  and the OPs without a proposal by the Member
  State
• In this case the Commission will become directly
  involved in the management of the programmes

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Automatic suspension of payments

• The Commission shall suspend part or all of
  payments and commitments where
• the Council decides or concludes that a Member
  State
• does not comply with measures set out by the
  Council in relation to the economic policy
  guidelines for Eurozone members,
• has not taken effective action to correct its
  excessive deficit,
• has not taken the necessary measures to correct
  macro-economic imbalances
• it concludes that the Member State has not taken
  measures to implement the adjustment programme
  and decides not to authorise the disbursement of
  the financial assistance granted to this Member
  State
• the Board of Directors of the European stability
  mechanism concludes that the conditionality
  attached to an ESM financial assistance in the
  form of an ESM loan to the concerned Member State
  was not met and as a consequence decides not to
  disburse the stability support granted to it.

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Application and lifting of suspension

• When deciding to suspend part or all of the
  payments or commitments the Commission shall
  ensure that the suspension is
• proportionate and effective,
• takes into account the economic and social
  circumstances of the Member State concerned,
• and respects the equality of treatment between
  Member States, in particular with regard to the
  impact of the suspension on the economy of the
  Member State concerned.
• All suspensions shall be lifted without delay
  when the underlying cause for suspension has been
  addressed

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Performance framework

• Focuses on the achievement of programme
  objectives
• Sets out milestones and targets for performance
  of programme priorities for 2016, 2018 and 2022
• Milestones established for 2016 shall include
  financial indicators and output indicators
• Milestones established for 2018 shall include
  financial indicators, output indicators and where
  appropriate, result indicators
• Milestones may also be established for key
  implementation steps

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Performance review

• The performance framework shall constitute the
  basis for the performance review in 2017 and 2019
  and the disbursement of the performance reserve
• Information for the performance review is drawn
  from the progress reports
• Member States are expected to react to
  significant shortfalls in the achievement of
  milestones (measures to improve performance,
  reprogramming)
• In the absence of sufficient action, Commission
  can suspend payments
• Significant failure to achieve the targets set
  for 2022 in the performance framework can lead to
  a financial correction at the end of the
  programming period

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Performance reserve

• A performance reserve of 5 is set aside at the
  beginning of the programming period (exception
  for ETC)
• The performance reserve is established per CSF
  Fund, per Member State and per category of region
• The 5 reserve is allocated to each Member State
  following the performance review in 2019
• Allocation can only be used for priority axes
  where performance has been satisfactory
  (milestones have been achieved) based on Member
  State proposal

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Additionality

• Only for MS in which less developed and
  transition regions cover at least 15 of the
  total population
• between 15 and 70 verification at national
  and regional level
• 70 verification at national level
• Reference level in the Partnership Contract
  based on ex-ante verification by the Commission
  having regard to the average level of public or
  equivalent structural expenditure per year in the
  period 2007-2013
• Mid term verification in 2018 and ex-post
  verification in 2022
• Exceptional circumstances to be taken into
  account, revision of reference level possible
  after mid-term verification
• Shortfall of more than 3 from reference level at
  ex-post verification financial corrections up
  to 5
• Information drawn from Stability and Convergence
  programmes

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Block 4
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Programming

• Common provisions on preparation, adoption and
  amendment, as well as on the shared elements of
  the content
• Specific provisions on the content of operational
  programmes under cohesion policy
• Strategy for smart, sustainable and inclusive
  growth
• Description of priority axes
• Contribution to territorial development
• Arrangements to ensure effective implementation
• Financing plan
• Implementing provisions
• Specific actions (related to horizontal
  principles)
• Operational programmes submitted shall be
  accompanied by the ex-ante evaluation

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Adoption and amendment of operational programmes

• The Commission shall assess the consistency of
  programmes with this Regulation, the
  Fund-specific rules, their effective contribution
  to the thematic objectives and the Union
  priorities specific to each CSF Fund, the Common
  Strategic Framework, the Partnership Contract,
  the country-specific recommendations under
  Article 121(2) of the Treaty and the Council
  recommendations adopted under 148(4) of the
  Treaty, taking account of the ex ante evaluation.
  
• The Commission shall adopt a decision approving
  the operational programmes within 6 months of its
  submission
• Any amendment to an operational programme shall
  be duly substantiated and shall set out the
  expected impact of the amendment. Where necessary
  the Commission will amend the Partnership
  Contract at the same time with the amendment of
  the operational programme

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Reinforcing Integrated Programming

• Integrated programme approach
• The Common Strategic Framework at EU level and
  the Partnership Contract at national level
  covering all the CSF Funds
• Possibility for Member States to prepare and
  implement multifund programmes combining ERDF,
  ESF and the Cohesion Fund
• Possibility for Member States to establish
  "multi-category" operational programmes which
  cover less developed, transition, and more
  developed regions or any combination of these.
• Integrated approaches for territorial development
  supported by the CSF Funds

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Major projects

• A coherent approach focusing on
• realistic planning
• the preparation of the project pipeline
• monitoring and regular reporting
• 2007-2013 threshold maintained
• Clear information requirements
• Major projects submitted must correspond to the
  list in the operational programme
• Limiting the scope of Commission appraisal
• Expenditure can be declared only upon approval of
  the major project by the Commission

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Joint actions plans

• Optional approach operation implemented and
  financed based on outputs and results agreed
  between the Member State and the Commission
• JAP adopted by the Commission, based on a
  proposal by the Member State
• Negotiation on
• Outputs and results necessary to reach an
  objective such as an education reform
• Pricing of outputs and results based on lump
  sums and standard scales of unit costs
• Payments correspond to the achievement of
  milestones
• Control of outputs and results, not expenditure
  by the beneficiary
• National management practices at beneficiary level

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Block 5
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Reinforcing community-led local development

• Integrated approach to community-led local
  development
• Facilitates integrated investment by small
  communities including local authorities, NGOs,
  and economic and social partners
• Integrated local development strategies
• Local action groups to design and implement these
  strategies
• Integrated approach and common rules can be
  financed jointly from ERDF, ESF, EAFRD and EMFF

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Reinforcing Territorial Cohesion

• Focus on sustainable urban development
• At least 5 of the ERDF resources to be allocated
  to integrated actions for sustainable urban
  development
• Creation of an urban development platform
• To promote capacity-building and networking
  between cities and exchange of experience on
  urban policy at EU level
• Adoption of a list of cities to participate in
  the platform
• Support for innovative actions in the field of
  sustainable urban development - Subject to a
  ceiling of 0,2 of the annual funding
• Integrated territorial investments
• Investments under one or more Operational
  Programmes can take the form of integrated
  territorial investments
• Adressing the specific needs of geographical
  areas most affected by poverty or target groups
  at highest risk of discrimination or exclusion
  with special regard to marginalised communities
• contribution highlighted in the content of each
  OP

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Block 6
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Financial Instruments (1)

• Common rules for the cohesion policy, the rural
  development policy and the maritime and fisheries
  policy
• Clarification of implementation rules
• Reinforcement of legal certainty
• Extension of the present scope of financial
  instruments
• Simplification of access to instruments such as
  JEREMIE, JESSICA and JASMINE

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Financial Instruments (2)

• Necessity for an ex ante assessment which has
  identified market failures or suboptimal
  investment situations, and investment needs
• Combination with grants, interest rate subsidies
  and guarantee fee subsidies
• Combination with other financial instruments
• Eligibility of in-kind contributions in limited
  circumstances

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Financial Instruments (3)

• Options for set-up
• 1) EU level platforms
• 2) Financial instruments established by the
  Member States complying with standard terms and
  conditions laid down by the Commission (standard
  models)
• 3) Financial instruments of specific design
  established by Member States
• Support may be given by
• Investment in the capital of legal entities
• Entrusting implementation tasks to the EIB,
  international financial institutions or a body
  selected in accordance with applicable Union and
  national rules
• Direct implementation by the managing authority
  (for loans and guarantees only)

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Financial Instruments (4)

• Special management and control provisions for
  instruments set up at EU level
• Special provisions for financial management
• more flexible co-financing arrangements
• the 2 year rule
• clarification of eligible expenditure at closure
• re-use of resources until closure
• the use of legacy resources
• specific reporting requirements (deadlines
  aligned with annual reports on implementation)

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Block 7
Monitoring, evaluation and indicators
Information and communication (both common and
specific provisions)
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A Focus on Results Indicators

• Fund Specific Common Indicators
• Common output and, where appropriate, result
  indicators
• Fund specific rules on baselines, targets and
  reporting
• Programme Specific Indicators
• Output indicators, where appropriate
• Result indicators related to the priority axis

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A Focus on Results Monitoring Reporting (1)

• No annual report in 2015
• Lighter annual reports on implementation
• Information of financial progress and indicators
• Actions to fulfil ex-ante conditionalities
• Issues which affect the performance of the
  programme
• Information on the implementation of major
  projects and JAPs
• Thorough information and analysis of all the
  elements of the OP required only in 2017, 2019
  and for the final report

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A Focus on Results Monitoring Reporting (2)

• Financial data to be submitted electronically 4
  times a year
• the total and public eligible cost of the
  operations and the number of operations selected
  for support
• the total and public eligible cost of contracts
  or other legal commitments entered into by
  beneficiaries in implementation of operations
  selected for support
• the total eligible expenditure declared by
  beneficiaries to the managing authority
• A progress report (at national level) common for
  the CSF Funds to be submitted in 2017 and 2019
  content corresponds to that of the Partnership
  Contract

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A Focus on Results Evaluation (1)

• Ex-ante evaluation
• Justification for selected thematic objectives
  contributing to EU2020 consistency, relevance
  and realism of indicators, targets financial
  allocations
• Monitoring and evaluation capacities and
  appropriate data collection arrangements
• Milestones for performance framework

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A Focus on Results Evaluation (2)

• Evaluation during the programming period
• Evaluation plan obligatory to be adopted by
  first Monitoring Committee
• More evaluation of the effects of interventions
  (impact)
• Implementation evaluations when necessary
• Synthesis report of evaluations by MS in 2020
• Ex-post evaluation by the Commission

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Information and Communication

• Rules on information and communication is part of
  main regulation
• 7 year strategy with yearly updates (no
  Commission approval, Monitoring Committee
  adoption)
• List of operations with comparable information
• Single national website/portal for all programmes
• Designation of national information officers
• Networks to ensure exchange of experience and
  good practice

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Block 8
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Revenue generating operations

• Review of the rules on revenue generation
• Member States can choose between
• The current approach based on the funding gap
  analysis
• A new approach based on application of a flat
  rate revenue percentages established at EU level
  for different types of operations
• Where revenue cannot be determined in advance,
  the net revenue must be deducted retrospectively
• Maintaining current exemptions (for all ESF
  operations, and operations under EUR 1 million,
  state aid and financial instruments) to ensure a
  proportionate approach

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Changes in eligibility rules (1)

• An operation may receive support from one or more
  CSF Funds and from other Union instruments,
  provided that the expenditure item included in a
  payment application for reimbursement by one of
  the CSF Funds does not receive support from
  another Fund
• Net revenue directly generated by an operation
  during its implementation which has not been
  taken into account at the time of approval of the
  operation, shall be deducted from the eligible
  expenditure of the operation in the final payment
  claim submitted by the beneficiary. This rule
  shall not apply to financial instruments and
  prizes
• Operations shall not be selected for support by
  the CSF Funds where they have been physically
  completed or fully implemented before the
  application for funding under the programme is
  submitted by the beneficiary to the managing
  authority

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Changes in eligibility rules (2)

• In the case of repayable assistance, the support
  repaid to the body that provided it, or to
  another competent authority of the Member State,
  shall be kept in a separate account and reused
  for the same purpose or in accordance with the
  objectives of the programme
• As a rule, VAT is not eligible. However, VAT
  amounts shall be eligible where they are not
  recoverable under national VAT legislation and
  are paid by a beneficiary other than non-taxable
  person as defined in the first subparagraph of
  Article 13(1) of Directive 2006/112/EC, provided
  that such VAT amounts are not incurred in
  relation to the provision of infrastructure

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Changes in eligibility rules (3)

• Eligibility of operations depending on their
  location
• Operations supported by the CSF Funds shall be
  located in the area covered by the programme
  under which they are supported
• Exemptions subject to conditions
• benefit to the programme area
• ceiling of 10 at the level of a priority axis
• Monitoring Committee approval
• fulfilment of management, control and audit
  obligations
• Only promotional activities may be financed
  outside the Union
• Provisions do not apply to ETC and ESF

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Reimbursement options

• Grants may take the following forms
• reimbursement of eligible costs actually
  incurred and paid, together with, where
  applicable, in-kind contributions and
  depreciation
• standard scales of unit costs
• lump sums not exceeding EUR 100 000 of public
  contribution
• flat-rate financing, determined by the
  application of a percentage to one or several
  defined categories of costs.
• The Member State may choose which option to use -
  exception for ESF operations lt 50.000 EUR only
  simplified costs are allowed

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Simplified costs (1)

• Simplified costs can be established on the basis
  of
• a fair, equitable and verifiable calculation
  method based on
• statistical data or other objective information
  or
• the verified historical data of individual
  beneficiaries or the application of their usual
  cost accounting practices
• methods and corresponding scales of unit costs,
  lump sums and flat rates applicable in Union
  policies for a similar type of operation and
  beneficiary
• methods and corresponding scales of unit costs,
  lump sums and flat rates applied under schemes
  for grants funded entirely by the Member State
  for a similar type of operation and beneficiary
• rates established by the CPR or the Fund-specific
  rules (no methodology required)
• on the basis of the project budget (for ESF
  operations below 100 000).

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Simplified costs (2)

• Rates established at EU level shall include
• a flat rate for indirect costs (all CSF Funds) -
  up to 15 of eligible direct staff costs
• for ETC - staff costs up to 15 of the direct
  costs other than the staff costs of that
  operation
• for ESF
• scales of unit costs/lump sums established by the
  Commission,
• 40 flat rate of direct staff costs to calculate
  the amount of all the other eligible costs.
• The rates established at EU level will not need
  to be justified by analysis at national or
  regional level.

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Durability

• Durability affected when an operation undergoes
• a cessation or relocation of a productive
  activity
• a change in ownership of an item of
  infrastructure which gives to a firm or a public
  body an undue advantage or
• a substantial change affecting its nature,
  objectives or implementation conditions which
  would result in undermining its original
  objectives.
• Clarification of situations where exemptions
  apply ESF, operations other than infrastructure
  and productive investment, financial instruments
  and non-fraudulent bankruptcy

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Block 9
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Responsibilities of Member States and of the
Commission

• Broad continuity of general responsibilities and
  obligations
• Links with the recast of the Financial
  Regulation general aim to strengthen the
  assurance process
• eCohesion Policy
• the Member States shall ensure that by the end of
  2014 all exchanges between the administration and
  beneficiaries can be carried out by way of
  electronic data exchange systems (without a
  duplicating paper trail)
• a possibility, not an obligation, for the
  beneficiaries to use electronic systems

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Structure of the management and control system

• There is broad continuity in the structure of the
  management and control system and in the division
  of tasks and the responsibilities of the managing
  authority, the certifying authority and the audit
  authority
• New elements
• Possibility to set up managing authorities which
  fulfil the functions of certifying authorities
• Requirement for the structural independence of
  audit authorities for operational programmes with
  total support from the Funds of above EUR 250
  million

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Accreditation

• Member State should designate an accrediting body
  at ministerial level responsibility for
  accreditation, continuous oversight, for fixing a
  probation period, and withdrawal of accreditation
• Both managing authorities and certifying
  authorities should be accredited
• Decision of national accreditation is to be made
  on the basis of an audit. The oversight by the
  accrediting authority shall be based on audit
  work of the audit authority no additional
  controls
• Interim payments will commence once the
  Commission has been notified of the accreditation
  decision
• Review by the Commission is risk based no review
  for programmes under EUR 250 million, or for low
  risk programmes

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The functions of the managing authority

• Definition of responsibilities relating to
• Programme management (supporting the Monitoring
  Committee, reporting, distribution of
  information, establishment of systems to record
  and store data, ensuring data collection and
  storage)
• Selection of operations (drawing up and
  application of selection criteria, ensuring that
  selected operations are eligible, informing
  beneficiaries of the conditions of support,
  ensuring that beneficiaries have sufficient
  capacity to implement operations, enforcing the
  rules on relocation, assigning intervention
  categories to operations)
• Financial management and control (verifications,
  ensuring separate accounting, putting in place
  anti fraud- measures, ensuring audit trail,
  drawing up the management declaration of
  assurance)

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The functions of the certifying authority

• Definition of responsibilities relating to
• drawing up, submission and certification of
  payment applications
• drawing up and certification of the annual
  accounts
• ensuring that there is a system which records
  and stores accounting records for each operation
• ensuring that it has received adequate
  information from the managing authority on the
  procedures and verifications carried out in
  relation to expenditure
• taking account results of all audits carried out
• maintaining accounting records in a computerised
  form of expenditure declared to the Commission
  and the corresponding public contribution paid to
  beneficiaries
• keeping an account of amounts recoverable and of
  amounts withdrawn

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The functions of the audit authority

• There are no major changes to the functions of
  the AA in comparison with 2007-2013, however
  there will be changes in the timing of audit work
  and in the coverage of the audit opinion
• AA shall submit on an annual basis an audit
  opinion on the annual accounts for the preceding
  accounting year, whose scope shall cover the
  completeness, accuracy and veracity of the annual
  accounts, the functioning of the management and
  control system and the legality and regularity of
  the underlying transactions

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Proportionate audit arrangements

• At the level of operations
• Operations under EUR 100 000 max. one audit
  prior to closure
• Other operations max. one audit per accounting
  year prior to closure
• At the level of the operational programme
• No significant deficiencies COM may agree with
  AA to reduce the level of audit work and not to
  perform any direct on-the spot checks
• Where the COM can rely on the opinion of the AA,
  it may agree to limit its on-the-spot audits to
  the work of the AA
• COM can carry out audits if it identifies
  specific risks or there is evidence of serious
  deficiencies
• COM can carry out audits to assess the work of
  the AA
• No restrictions for audit work after closure of
  operations (within the retention period)

70
Accounting year and clearance of accounts
Compulsory interim payment application
Accounting year
Clearance of accounts
1 Feb N1
Dec N
30 Jun N
Dec N-1
30 Apr N1
1 Jul N -1
30 Jun N1
Preparation of the annual accounts, management
declaration, audit report, audit opinion
71
Pre-financing

• Initial pre-financing 4 paid in 3 instalments,
  cleared at the end of the programming period
• Annual pre-financing paid before 1 July
• 2 in 2016
• 2,5 in 2017-2022
• Annual pre-financing cleared annually with the
  clearance of accounts

72
Interim payments

• Regular submission of payment applications with a
  compulsory statement of expenditure at the end of
  accounting year (by 31 July, with the cut-off
  date of 30 June)
• Payments of the public contribution to
  beneficiaries and expenditure paid by
  beneficiaries before expenditure declared to
  Commission
• Payment by Commission limited to 90 of amount
  calculated
• Remaining balance to be paid after clearance of
  accounts

73
Decommitment

• N2 rule throughout the whole programming period
• Exception for the first year
• no automatic decommitment exercise for the first
  year commitment
• first year commitment spread over the following
  years (1/6)
• Exceptions for force majeure or legal proceedings
  and administrative appeals
• No exceptions for major project and state aids

74
Annual clearance of accounts

• Accounting year 1 July - 30 June
• Submission by 1 February n1 annually
• Annual accounts, certified by CA
• Management declaration report on controls
  carried out
• Audit opinion report on all available audits
• Content of certified annual accounts
• Total eligible expenditure entered in CA accounts
  paid by beneficiaries
• Corresponding public support paid
• Amounts withdrawn or recovered
• ERDF/CF operations completed
• Possible provision of maximum 5 for open audit
  issues
• Commission decision on clearance by 30 April N1
  
• Amount chargeable to the Fund (subject to
  subsequent financial corrections)

75
Closure

• Rolling closure of completed operations (ERDF,
  CF) or expenditure (ESF) within the process of
  annual clearance of accounts
• The 3- year retention period shall run from the
  31 December of the year of the annual clearance
  of accounts (interrupted for legal and
  administrative proceedings). No controls or
  audits of operations or expenditure closed beyond
  this period
• Final closure submission of documents by 30
  September 2013
• an application for payment of the final balance
• a final implementation report for the operational
  programme
• the documents for the annual clearance of
  accounts for the final accounting year from 1
  July 2022 to 30 June 2023.

76
Interruption of the payment deadline

• The payment deadline may be interrupted for a
  maximum of 9 months where
• following information provided by a national or
  Union audit body, there is evidence to suggest a
  significant deficiency in the functioning of the
  management and control system
• the authorising officer by delegation has to
  carry out additional verifications following
  information coming to his attention alerting him
  that expenditure in a request for payment is
  linked to an irregularity having serious
  financial consequences
• there is a failure to submit one of the
  documents required for annual clearance of
  accounts.
• Interruption may be limited to a part of
  expenditure covered by the payment application

77
Suspension of payments

• All or part of the interim payments at the level
  of priority axes or operational programmes may be
  suspended by the Commission where
• there is a serious deficiency in the management
  and control system of the operational programme
  for which corrective measures have not been
  taken
• expenditure in a statement of expenditure is
  linked to an irregularity having serious
  financial consequences which has not been
  corrected
• the Member State has failed to take the necessary
  action to remedy the situation giving rise to an
  interruption
• there is a serious deficiency in the quality and
  reliability of the monitoring system or of the
  data on common and specific indicators
• the Member State has failed to undertake actions
  set out in the operational programme relating to
  fulfilment of an ex ante conditionalities
• there is evidence resulting from a performance
  review that a priority axis has failed to achieve
  the milestones set out in the performance
  framework
• possibility of suspension envisaged in
  connection to the macro-economic conditionality.

78
Financial corrections by the Member State

• Member State is responsible for investigating
  irregularities and for making the financial
  corrections required and pursuing recoveries
• The Member State shall make the financial
  corrections required in connection with
  individual or systemic irregularities detected in
  operations or operational programmes
• The contribution recovered by the Member State
  may be reused by the Member State within the
  operational programme concerned, but not for
  operations that have been the subject of the
  correction or for any operation affected by a
  systemic irregularity

79
Financial corrections by the Commission (1)

• Commission shall make financial corrections
  where
• there is a serious deficiency in the management
  and control system of the operational programme
  which has put at risk the Union contribution
  already paid to the operational programme
• the Member State has not carried out the
  necessary financial corrections on its own
• expenditure contained in a payment application is
  irregular and has not been corrected by the
  Member State
• corrections envisaged in connection with the
  performance framework and review.
• A breach of applicable Union or national law
  shall lead to a financial correction only where
  one of the following conditions is met
• the breach has or could have affected the
  selection of an operation by the responsible body
  for support by the CSF Funds
• there is a risk that the breach has or could have
  affected the amount of expenditure declared for
  reimbursement by the Union budget.

80
Financial corrections by the Commission (2)

• Financial corrections by the Commission can be
  based on precise amounts, but they can also be
  extrapolated or based on flat rates if the
  irregular amount cannot be quantified precisely
• Financial corrections shall be proportionate
  taking into account the nature and the gravity of
  the irregularity
• Where irregularities affecting annual accounts
  sent to the Commission are detected by the
  Commission or by the European Court of Auditors,
  the resulting financial correction shall reduce
  support from the Funds to the operational
  programme.

81
Block 10
82
Scope of ERDF

• The scope defines what can and what cannot be
  supported by the ERDF
• Investments in infrastructure providing basic
  services to citizens in the areas of environment,
  transport, and ICT are limited to the less
  developed and transition regions
• More targeted support to large enterprises,
  focused on technology and applied research,
  including the first production of Key Enabling
  Technologies
• Restrictions for support to the ETS sector, the
  tobacco industry, decommissioning of nuclear
  power stations and undertakings in difficulties

83
Investment priorities

• All thematic objectives can be supported by the
  ERDF
• The regulation includes, for every thematic
  objective
• A definitive list of investment priorities which
  set the aims for intervention by the Fund
• Example
• Thematic objective supporting the shift towards
  a low-carbon economy in all sectors
• Investment priorities
• promoting the production and distribution of
  renewable energy sources
• promoting energy efficiency and renewable energy
  use in SMEs
• supporting energy efficiency and renewable energy
  use in public infrastructures and in the housing
  sector
• developing smart distribution systems at low
  voltage levels
• promoting low-carbon strategies for urban areas

84
Thematic Concentration for ERDF

• The ERDF allocation for energy efficiency and
  renewables, innovation and SME support shall form
  at least
• 80 of the total ERDF resources at national level
  in developed and transition regions
• 60 of the total ERDF resources at national level
  in more developed and transition regions whose
  GDP per capita in 2007-2013 is below 75 of EU
  average
• 50 of the total ERDF resources at national level
  in less developed regions.
• In addition the support to energy efficiency and
  renewables within this allocation must form at
  least
• 20 of the total ERDF resources at national level
  in more developed and transition regions
• 6 of the total ERDF resources at national level
  in less developed regions.

85
Areas with specific natural or demographic
features

• Specific additional allocation for the outermost
  regions and sparsely populated regions.
• Outermost regions can use the allocation to
  support thematic objectives, but also for freight
  transport services and start-up aid for transport
  services operations linked to storage
  constraints, the excessive size and maintenance
  of production tools, and lack of human capital in
  the local market, to finance operating aid and
  expenditure covering public service obligations
  and contracts in the outermost regions.
• At least 50 of the special allocation to outmost
  regions to be used for actions contributing to
  the diversification and modernisation of their
  economies, with particular focus on research and
  innovation, information and communication
  technologies and SMEs competitiveness

86
Scope of the Cohesion Fund

• Cohesion Fund supports
• investments in the environment, including areas
  related to sustainable development and energy
  which present environmental benefits
• trans-European networks in the area of transport
  infrastructure, in compliance with the guidelines
  adopted by Decision No 661/2010/EU
• technical assistance
• Appropriate balance of investments required
• Restrictions decommissioning of nuclear power
  stations, ETS sector, housing

87
Thematic objectives supported under the Cohesion
Fund

1. Supporting the shift towards a low-carbon economy
   in all sectors
2. Promoting climate change adaptation, risk
   prevention and management
3. Protecting the environment and promoting resource
   efficiency
4. Promoting sustainable transport and removing
   bottlenecks in key network infrastructures
5. Enhancing institutional capacity and an efficient
   public administration by strengthening of
   institutional capacity and the efficiency of
   public administrations and public services
   related to implementation of the Cohesion Fund

88
Investment priorities

• The regulation includes, for every thematic
  objective
• A definitive list of investment priorities which
  set the aims for intervention by the Fund
• Example
• Thematic objective Protecting the environment
  and promoting resource efficiency
• Investment priorities
• addressing the significant needs for investment
  in the waste sector to meet the requirements of
  the Union's environmental acquis
• addressing the significant needs for investment
  in the water sector to meet the requirements of
  the Union's environmental acquis
• protecting and restoring biodiversity, including
  through green infrastructures
• improving the urban environment, including
  regeneration of brownfield sites and reduction of
  air pollution

89
Block 11
90
Thematic Concentration for ESF
LESSDEVELOPEDREGIONS 60 budget on 4
priorities
MORE DEVELOPED REGIONS 80 budget on 4
priorities
TRANSITION REGIONS 70 budget on 4 priorities

20 budget on Social Inclusion - poverty
reduction
91
Scope of ESF
Human capital as driver for smart, sustainable
and inclusive growth

• 18 Investment priorities in 4
  thematic objectives
• Promoting employment and supporting labour
  mobility
• Promoting social inclusion and combating poverty
• Investing in education, skills and lifelong
  learning
• 4. Enhancing institutional and administrative
  capacities

• ESF contribution to the other thematic
  objectives notably
• Supporting an environmentally sustainable economy
  (low carbon)
• Enhancing the accessibility, use and quality of
  ICT
• Strengthening research and innovation
• 4. Enhancing the competitiveness of SMEs

92
Promoting employment and supporting labour
mobility

• Access to employment for job-seekers and inactive
  people including local employment initiatives
  and support for labour mobility
• Sustainable integration of young people not in
  employment, education or training into the labour
  market
• Self-employment, entrepreneurship and business
  creation
• Equality between men and women and reconciliation
  between work and private life
• Adaptation of workers, enterprises and
  entrepreneurs to change
• Active and healthy ageing
• Modernisation and strengthening of labour market
  institutions, including actions to enhance
  transnational labour mobility.

93
Investing in education, skills and life-long
learning

• Reducing early school-leaving and promoting equal
  access to goodquality early-childhood, primary
  and secondary education
• Improving the quality, efficiency and openness of
  tertiary and equivalent education with a view to
  increasing participation and attainment levels
• Enhancing access to lifelong learning, upgrading
  the skills and competences of the workforce and
  increasing the labour market relevance of
  education and training systems

94
Promoting social inclusion and combating poverty

• Active inclusion
• Integration of marginalised communities such as
  the Roma
• Combating discrimination based on sex, racial or
  ethnic origin, religion or belief, disability,
  age or sexual orientation
• Enhancing access to affordable, sustainable and
  high-quality services, including health care and
  social services of general interest
• Promoting the social economy and social
  enterprises
• Community-led local development strategies

95
Enhancing institutional capacity and efficient
public administration

• Investment in institutional capacity and in the
  efficiency of public administrations and public
  services with a view to reforms, better
  regulation and good governance
• Capacity building for stakeholders delivering
  employment, education and social policies and
  sectoral and territorial pacts to mobilise for
  reform at national, regional and local level

96
ESFs reinforced social dimension

• Focusing on the most vulnerable 20 of ESF
  allocations for social inclusion and poverty
  reduction actions
• Greater emphasis on fighting youth unemployment
• Mainstreaming specific support for gender
  equality non-discrimination
• Possibility to involve social partners and NGOs
  through global grants and through allocation of
  appropriate amounts of resources for capacity
  building

97
Financial instruments and ESF

• Key for leveraging resources
• Widening of ESF support through financial
  instruments to job creation, mobility of workers
  and students, social inclusion
• Enhance access to capital markets through an ESF
  policy based guarantee

98
Block 12
European Territorial Cooperation
99
Architecture

• Cross-border cooperation
• COM to adopt list of cross-border areas to
  receive support by programme (at NUTS 3 level)
• List specifies border areas covered by IPA/ENI
• List includes regions in NO, CH etc. and
  countries neighbouring outermost regions for
  information purposes
• Addition of adjacent NUTS 3 regions may be
  proposed when submitting programmes

100
Architecture

• Transnational cooperation
• COM to adopt list of transnational areas to
  receive support by programme (at NUTS 2 level)
• Third country regions covered by ENI (incl.
  Russia) and IPA can also be covered by programme,
  funding to be made available.
• Third country regions included in list for
  information purposes
• Addition of adjacent NUTS 2 regions may be
  proposed when submitting programmes
• Interregional cooperation EU-27, whole or part
  of territory of third countries may be covered

101
Financial Resources

• 3 categories
• 73 for cross-border cooperation (EUR 8.6 bn)
• 21 for transnational (EUR 2.4 bn)
• 6 for interregional (EUR 0,7 bn)
• EUR 50 million to be set aside from interregional
  allocation for outermost regions cooperation,
  ERDF support for outermost regions cooperation
  not to be less than 150 of 2007-2013 level)
• Population criterion for breakdown by Member
  State
• 75 co-financing rate (50 for outermost regions
  allocation)

102
Financial Resources

• ERDF transfer to ENI and IPA
• Amount to be transferred to be established by COM
  and MS
• If no programme submitted, funds to be allocated
  to internal CBC programmes of Member State
  concerned
• Programme to be discontinued if none of the
  partners countries have signed the financing
  agreement by deadline established in ENI
  regulation

103
Thematic Concentration

• 4 thematic objectives for cbc and transnational
• Interregional can cover all thematic objectives
• Definition of investment priorities in ERDF
  regulation apply
• Additional element in ETC regulation ESF-type
  actions, legal and administrative cooperation and
  cooperation between citizens and institutions,
  macro-regional strategies

104
Monitoring, Evaluation and TA

• First annual report to be submitted in 2016
• Lighter annual reports, regular electronic
  exchange of data
• More strategic reports in 2017 and 2019
• Annual review can also be carried out in writing
• Common output indicators, programme specific
  output and result indicators
• Programme TA Maximum of 6 of ERDF allocation,
  but not less than 1,5 mio. EUR

105
Implementing arrangements

• Eligibility rules established at EU level
  complemented by rules established by the
  Monitoring Committee (national rules as a last
  resort)
• Merger between the managing authority and the
  certifying authority controls and audits should
  be carried out for the programme area as a whole
• N3

106
EGTC regulation

• Amendment of the present regulation
• Broadening of the EGTC and its use, including
• the possibility to involve national authorities
• inclusion of members from third countries and
  overseas territories
• possibility to set up EGTC between 1 MS and 1
  non-MS
• New deadline for state approval of EGTC 6
  months

107
Block 13
Comitology, definitions etc.
Articles 1,2 and 80 of CPR Articles 141-147 of
CPR Articles 12-17 of the ER