VadeMecum to set up a programme on European subsidies

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Vade-Mecum to set up a programme on European
subsidies
Philippe Le Guen (leguen_at_racine.fr)

• Ankara October 20, 2004

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PART ONE

• getting started

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Preparatory stage

• The Preparation Phase is of special importance
  and serves four purposes
• It defines the strategy and the activities that
  will be undertaken, estimates their cost and
  allocates it between all stakeholders or
  partners
• It forms basis for resolving potential problems
• It provides a contractual basis on which the
  Authorities can approve these activities during
  implementation of the work plan.
• You are advised to use an effective planning
  tool. For example the Logical Framework Approach
  or Project Cycle Management could be useful.
• This system is based on an approach where
  activities are shaped by filling in the grid from
  top to bottom, moving from top-left to
  bottom-right. In order to check the
  appropriateness and viability of the activities
  you have set out you verify the connections
  between steps, moving in the opposite direction.

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The logical framework for planning a European
project Overview
Intervention
Intervention
Sources of
Sources of
Assumptions
Assumptions
Logic
Logic
Verification
Verification
How to measure
How to measure
How to collect the
How to collect the
The contribution of
The contribution of
Overall
Overall
the objective,
the objective,
information, by
information, by
the project to
the project to
including Quantity,
Objectives
including Quantity,
Objectives
when and by whom
when and by whom
broader objectives
broader objectives
Quality, Time
Quality, Time
How to measure
How to measure
If the Purpose is
If the Purpose is
Direct benefits to
How to collect the
How to collect the
Project
Project
the objective,
the objective,
achieved, what
achieved, what
information, by
information, by
the target group(s)
including Quantity,
assumption must hold
including Quantity,
assumption must hold
Purpose
Purpose
when and by whom
when and by whom
Quality, Time
true to achieve the OO
true to achieve the OO
Quality, Time
How to measure
If Results are achieved,
Better products/ services or processes or
capabilities
How to collect the
Results
Results
the objective,
what assumption must
How to measure
If Results are achieved,
How to collect the
information, by
hold true to achieve the
including Quantity,
the objective,
what assumption must
when and by whom
information, by
when and by whom
Purpose
Quality, Time
including Quantity,
Quality, Time
hold true to achieve the
Tasks to be undertaken to produce results
If Activities are com
-
Tasks to be
undertaken to
Means
Cost
Means
Cost
Activities
Activities
pleted
, what
assump
-
If Activities are com
-
undertaken to
produce the results
tions
must hold true to
pleted
, what
assump
-
produce the results
deliver the results
deliver the results
tions
must hold true to
Conditions that
"Purpose" Describes the expected improvement
concerning the specific problem for which the
project wants to provide innovative solutions
Pre
-
conditions
must be met
before starting
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Establishing the work plan
Resource Scheduling What resources are required?
How much? When?
Work plan What must be done? When? Who is
responsible?
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Points to consider before starting the project

• You must state the start date of the project in
  the application form. This must fall within the
  funding period.
• Bidding rounds are sometimes delayed due to late
  approval for the release of funds at Member State
  and EU levels. So project approvals may be
  delayed.Moreover, you need to consider how the
  project may be funded from other sources if the
  European application fails.
• You should also consider the effect on your
  project if it starts late. For example, will you
  still be able to deliver it as described in the
  application? If not, you should tell the
  authorities about any significant changes as soon
  as possible.
• Risk analysis and risk management of the ESF
  project
• As well as the rewards, there are risks to
  operating European projects.

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Major risks

• Failure to deliver numbers (including target
  groups) and outcomes described in the
  application.If the actual delivery shows that
  numbers and outcomes are significantly reduced,
  the whole basis on which the project was approved
  may be questioned and could lead to the European
  grant being withdrawn and influence the success
  of future applications.
• Be realistic with your target setting, look at
  the performance of similar projects, consult
  local partners, use local market information and
  other knowledge to assess the feasibility of the
  project in your area.
• Lack of financial planning, including
  organisational risks. Failure to adequately plan
  for the flow of cash may lead to liquidity
  problems (a lack of cash to run the business and
  could lead to its closing down).
• It is important to consider the organisations
  cash resources as well as the individual
  cashflows associated with a particular project.
  You should draw together a cash forecast as
  accurately as you are able, building in the
  outgoings and receipts, as they are likely to
  arise. You should then identify when you will
  need to meet any particular cash shortages.

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• Risks of incurring significant additional costs
  which are not covered by funding if the financial
  projections in the application are not accurate.
  The programme will not fund more than the
  approved costs declared in the application, so if
  the project overspends it is at your risk. This
  will be particularly important if elements of the
  project are to be delivered by partners or
  subcontractors.
• You should get clear estimates of costs from them
  at the application stage and contracts put in
  place once the project is approved should make
  sure that responsibility for overspending is
  clearly defined and understood by all parties.
• Failure to share knowledge with your
  organisations strategic decision makers. At a
  very early stage senior management should have
  considered the aims of the project and its links
  to the organisations goals and objectives. It is
  important that they are informed of the risks as
  well as the rewards of operating European
  projects.
• The senior management team and anyone else who
  should be involved should be informed as early as
  possible of the project and the risks. This
  briefing should also make clear the
  responsibilities of you and your partners to find
  the balance of funds, maintain detailed records
  and to meet the requirements of the contract.
• It is essential that you regularly report on the
  performance of projects to the senior management
  so they can assess how well the project is
  meeting the organisations objectives and how it
  is performing against the original profile. They
  can then identify where action may be needed to
  put things right and assess the general
  performance of the activity.

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• Failure to project partners
• The vast majority of projects are now delivered
  in partnership with other partners or
  subcontractors. All the risks also relate to the
  delivery of elements of the project by third
  parties. However, you are responsible for the
  correct operation of the European project
  regardless of who is delivering it, where the
  records are held or where errors have been found.
  So it is your responsibility to repay sums due as
  a result of any errors.
• It is recommended that you draw up a contract
  with significant partners and subcontractors.
  This should set out the exact nature of the
  relationship, how the project will be funded, the
  record keeping requirements, the reporting
  requirements, the expenditure eligibility.
• Signing a contract alone does not provide you
  with absolute peace of mind that the third
  parties are keeping appropriate records and are
  following the relevant rules. You should monitor
  them to make sure that they are keeping to the
  requirements of the contract at least once during
  the life of the project.

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PART TWO

• Contracting

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Types of procedures

• According to the different European programmes or
  funds, several type of procedures may apply, such
  as
• Procedures involving publication international
  open tender (supplies/works), and restricted
  tender (services) are published on the EuropeAid
  Co-operation Office website http//www.europa.eu.i
  nt/comm/europeaid/index_en.htmthe EU Official
  Journal and the appropriate media in the
  candidate country. Local open tender
  (supplies/works) are published only in the
  recipient country.
• Procedures not involving publication simplified
  procedure (direct consultations of companies with
  receipt and evaluation of at least three valid
  offers), Framework Contracts for services (rapid
  consultation of three potential already
  pre-selected contractors) and negotiated
  procedure (no competition possible only under
  strict conditions).
• Open procedure open invitation to take part in
  competitive tendering.
• Restricted tender not all applicants qualify to
  submit a tender dossier. The first procedure is
  to invite interested companies to express their
  interest. The Contracting Authority draws up a
  shortlist and only short-listed applicants are
  given the opportunity to submit a tender dossier.

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Other important issues

• Co-financing
• Additional funding are often required from the
  following entities the beneficiary countrys own
  resources, an individual Member States bilateral
  assistance programme, international organisations
  such as UN agencies, the World Bank, the European
  Investment Bank (EIB) and the European Bank for
  Reconstruction and Development (EBRD).
• Key documents Terms of Reference (for service
  contracts) and Technical Specifications (for
  supply and work contracts) provide instructions
  and guidance to contractors at the tendering
  stage about the nature of the activity (services,
  works, supplies) tendered for.
• These documents are key to the success of a
  project, and must be followed thoroughly, to
  ensure that the project has been properly
  conceived, that the work will be carried out on
  schedule and that resources will not be wasted.

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Contract award procedures

• The basic principal governing the award of
  contracts is competitive tenderingThis is aimed
  at ensuring transparency and the desired quality
  of services, supplies and works at the best
  possible price.
• The best technical offer within the available
  budget will be selected.
• Feedback to applicants
• You will receive written feedback on your
  application. This will allow you to identify the
  strengths and weaknesses of your application. If
  your application has not reached the minimum
  level in a question, you will be told.
• If your application is not successful, you will
  be able to appeal. You can base your appeal only
  on the information you originally provided in the
  application no new information is allowed.

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Examples of questions for applicants

• Please provide details of the objectives of your
  Project, making it clear how they fit with the
  Programme theme you have chosen. Eight marks are
  allocated to this question. you must reach the
  minimum level of 5 out of 8 in this section to be
  eligible for selection.
• Full answer (8 marks) Your project has clear
  objectives that fit wholly with the priorities of
  your chosen theme and the leading principles of
  the European programme.
• Less-full answer (5 marks) There is the type of
  evidence listed above, but it is general rather
  than sharply focused or is incomplete (or both).
• Part answer (fewer than 5 marks) There is little
  evidence that your projects objectives fit well
  with the priorities of the programme (so your
  proposal does not justify support).

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• Please provide an overview of the nature of
  activities you will be delivering and indicate
  the main outputs you expect (500 words). Four
  marks are allocated to this question.
• Full answer (4 marks) You have identified some
  clearly-focussed and appropriate activities that
  fit well with the priorities of the programme.
• Less-full answer (3 marks) The response outlines
  the type of activities listed in the terms of
  reference, but the activities you have identified
  are less well focused and less appropriate to
  your project.
• Part answer (2 marks) There is little evidence
  that the activities you have identified fit well
  with the priorities of your project.
• No answer (0 marks) There is no evidence that
  the activities fit well with the priorities of
  your project.

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PART THREE

• Follow-up

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Recording and keeping evidence of the outputs and
outcomes of the project

• It is important to remember that every project
  totally or part-financed by European funds must
  deliver outputs, such as qualifications, jobs,
  business creation You must keep records to prove
  that these outputs have been achieved.
• The project application form will specify the
  outputs of the project. However, you need to
  check your contract and any relevant guidance
  notes to make sure that you are aware of any
  extra outputs needed to get the grant.
• To help track the performance of the project it
  may be beneficial to profile the forecast outputs
  on a monthly or quarterly basis. These profiles
  can then be compared with actual results and you
  can then take action if they are not on track. If
  you forecast the outputs are going to vary by
  more than 15 you must report this to the
  Authorities as a significant change and ask for
  their approval.
• Examples of appropriate evidence are
• Copies of reports or publications
• All financial records such as copy of invoices,
  as well as proof of payment
• Minutes of meetings or other relevant
  correspondence.

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Evaluating the effectiveness a European project
ex. Improving the situation of disadvantaged
target groups
Did it work?
Did we do what we planned?
Disadvantaged people situation
Is the situation of the disadvantaged improved?
PROJ. PURPOSE
Purpose achieved?
Process/product perspective
Have we improved our offering?
Has it enabled better products and services?
Internal process perspective
Have our activities been changed or added to?
Has it enabled better processes?
PROJ. RESULTS
Capabilities perspective
Have we changed or added to our tangible and
intangible capital?
Effectiveness evaluation provides information and
evidence concerning "have better capabilities
really helped to improve the processes and have
the improved processes really helped deliver
better products/services and thus more satisfied
clients?"