The role of pre-accession non-reimbursable funds in preparing the access to and the absorption of non-reimbursable assistance of the 2007-2013.
Marinas, Laura Elena ; Cercel, Mihai Ovidiu
The pre-accession instruments that supported the adhesion of new
Member States in 2004 and 2007, as well as the new instrument, have an
important component of technical assistance designed to support future
Member States to access and manage structural funds--the main form of
non-reimbursable assistance to Member States. The technical assistance
measures applied are designed to support future Member States to build
institutional and legal framework, including the training of human
resources required for the new created structures.
Using pre-accession financial assistance in preparing the framework
for accessing post-accession non-reimbursable funds
Prior to joining the European Union, the financial resources
available under the Phare pre-accession instruments ISPA and SAPARD have
been directed mainly to projects aimed at creating the institutional
system (legal framework, working procedures, training human resources)
to ensure a high level of accessing future EU non-reimbursable
funding--the structural funds; some of these projects have included
information and training of potential beneficiaries. Most of these
institutional construction projects were funded by Phare.
As a general trend in the new Member States, Phare was used for two
types of actions aimed at creating the preconditions necessary to the
institutional construction of the national management framework of
structural instruments:
1) Information and training of potential beneficiaries about the
opportunities and how to access these new instruments of accession. The
objectives of these actions cover both the visibility and providing
necessary information about these financial instruments and issues of
access, and create a pool of eligible projects for funding by structural
instruments. Analysis of Member States experience indicates that it is
important that such actions have a high impact if carried out in the
last year prior to joining the EU and, at most, in the first year of
implementation of structural instruments in the new Member States. It is
also extremely important that while these measures are implemented,
priorities for use of non-reimbursable assistance is irrevocably set,
otherwise there is risk of transmission of incorrect information,
inconsistent with the reality. In most new Member States, using
pre-accession assistance for training potential beneficiaries has
included at least two dimensions:
a) Presentation of the main elements of the new conditions of
access and implementation of new European Union financial instruments;
b) Presentation of the basic concept concerning financial
priorities related to the new financial instruments and means of
implementation.
In most new Member States, the main entities concerned
2) Institutional building, including the creation of the
institutional framework for accessing and managing post-accession
non-reimbursable assistance. These actions were initiated in the new
Member States in the last 3 years prior the accession of these countries
to the European Union. The main institution-building activities
included:
a. Financial support and expertise provided by the EU in order to
define priorities and objectives for the implementation of which will be
used post-accession non-reimbursable assistance. In most new Member
States, defining priorities for non-reimbursable assistance, for the
first programming period in which they used structural instruments, was
generally an exercise in taking over the priorities identified at
European level; in the new Member States, there are differences only in
terms of ranking / relative importance given to the European priorities.
Taking over the priorities is a natural consequence of the participation
of EU experts in defining national priorities for directing structural
instruments, and the absence of a coherent national policy framework in
the Member States, in the sense of the existence of well-defined
sectoral strategies. Taking European priorities at national level was a
simple approach, given the general character of the objectives set out
in the European Union. For example, in Romania, defining funding
priorities of structural instruments was based on an exercise of
national economic and social analysis, but the national priorities set
were a simple transposition of European goals. In the absence of clearly
defined national strategy, priorities have kept a general character,
without precise targeting to national policy objectives; for this
reason, the expected impact on economic and social development is, in
relative terms, smaller, general formulation of priorities ensuring
greater dissipation of financial resources and inadequate application of
the principle of concentration, specific to these financial instruments.
As regards the new Member States, for those who joined the EU in 2004,
the first programming period was the period from 2004 to 2006 (this is
the period for which pre-accession financial assistance was used),
unlike the case of Romania and Bulgaria, for whom the first programming
period in which they benefit of pre-accession non-reimbursable financial
assistance is from 2007 to 2013 (pre-accession assistance to facilitate
the preparation and definition of priorities for this period). For
Member States that joined in 2004, 2004-2006 brought an added value, the
first programming year being an exercise that ensure institutional
learning in 2007-2013 to better align European priorities for which
fulfillment is being used non-reimbursable financial assistance of the
EU, to national development needs.
b. Defining the institutions involved in the management of these
instruments at national level, defining working procedures and training
staff of those institutions. In terms of institution building, there are
differences between the new Member States. In the new Member States that
joined in 2004, institutional construction was carried out from 2002 to
2004, according to the institutional model prescribed by European
legislation in force at that time. Given the legislative changes adopted
in 2006 regarding access and management of structural instruments valid
for the period 2007 to 2013, these Member States were in position to
rethink and restructure the institutional framework for the period 2007
to 2013, to ensure compliance with the new institutional model defined
at European level by the 2006 Regulations. In these Member States, the
restructuring of institutional framework implied a significant
rethinking of the institutions involved in the management of structural
instruments and their functions; their main advantage is the existence
of institutional experience in the development and application of
working procedures and qualified human resources with experience working
with these new tools. As a common feature of the new Member States
examined, it is to emphasize the fact that the institutional management
of structural instruments was built on the "skeleton" of the
institutions involved in the management of pre-accession financial
assistance. This approach allowed the internalization of institutional
good practice and experience gained from managing pre-accession
financial assistance. An important component of institution building was
the use of pre-accession assistance in the form of technical assistance
for the development of work procedures and training of human
resources/personnel of the institutions involved in the management of
post-accession non-reimbursable assistance. In the case of States which
joined the EU in 2004, changing the legal framework and European
institutional model from 2007 to 2013 involved complete change of
working procedures and self-financing staff training processes; in this
case, Romania and Bulgaria, which joined in 2007, have enjoyed a
substantial advantage in that they received substantial pre-accession
non-reimbursable funds for implementation of new rules for accessing EU
non-reimbursable assistance.
Lessons learned from the experience of new Member States in the
period 2004-2006 of using EU post-accession non-reimbursable assistance
from 2007 to 2013.
In the process of building national management and control systems
of available non-reimbursable funds as structural instruments in the
programming period 2007-2013, the new Member States have sought, first,
compliance with the specific Community principles and regulations, but
also to improve from good practices and difficulties encountered during
the programming period 2004-2006.
The main weaknesses identified in the operation of the
implementation were:
1) The difficulty of coordinating measures between the different
structures involved in the management of structural instruments--these
differences were evident in the case of Member States with an
implementation system which included a large number of institutions,
each with their own interests, practices and policies. Overcoming these
difficulties has been possible in the new Member States that joined in
2004 for the period 2007-2013 and found an extremely difficult exercise
in Romania and Bulgaria (e.g. in Romania, the preparation of
documentation for programming EU non-reimbursable assistance started in
2005 and was completed during April-October 2007, unlike the Member
States which already have joined in 2004, where the process started in
late 2006 and was completed in mid 2007). The experience of Member
States that joined in 2004 was integrated by them between 2007 and 2013,
in the process of building the management and control system and in
defining priorities for financing from 2007 to 2013. Despite the
exchange of experiences between Member States (including those that
joined in 2004) and Romania, best practices were not integrated in the
process of institution building and in defining financial priorities of
post-accession non-reimbursable funds. Difficulties in reconciling
financing priorities were derived from structural instruments in
Romania's case, the difficulties of relating the various sectoral
or regional objectives of ensuring complementary financial assistance
from different financial instruments (structural instruments, other
community programs and national public funds) and the absence of a
coherent national sectoral strategy. In Romania, The National
Development Plan 2007-2013, approved by the Government in 2005, and The
National Strategic Reference Framework 2007-2013 have shown a large
number of priorities, which simultaneous accomplishment limits the
effectiveness of non-reimbursable assistance by non-reimbursable
instruments. 2) Little experience in developing and implementing
projects financed by structural instruments, especially the new Member
States, including in those states which joined in 2004, compared to the
EU-15. For the Member States which accessed in 2004, the experience in
implementation of structural instruments, relatively higher (due to the
advantage of a programming exercise above, namely 2004-2006) to that of
Romania and Bulgaria, has been eroded by changes in the legal management
of structural instruments in 2007-2013. However, the main gains of the
new Member States derived from attending a group exercise in 2004
(incomplete) of non-reimbursable assistance by structural instruments,
implied an advantage to the Member States which joined in 2007,
materialized mainly in:
-Improving the information, communication and visibility of EU
non-reimbursable assistance, in terms of identifying the main categories
of potential beneficiaries, and concrete ways to address them. This
derived from the 2004/2006 experience. Hungary, for example, in an early
stage, lacked of information offices. For a later stage they were poorly
organized, monitoring and evaluation teams being unable to cope with
thousands of phone calls daily. The practical outcome was that the
creation and expansion of geographic information points and help-desks,
functional and efficient. In Romania, the functionality of these
information measures in 2007-2009 was reduced from a number of reasons,
which can be listed, non-exhaustive: lack of experience of the staff of
these structures located at the level of non-reimbursable assistance
management structures; the variety of concrete situations in which it
was necessary to interpret the rules of implementation of structural
instruments derived from the variety of priorities and objectives to be
achieved with the assistance of structural instruments.
-The creation, between 2004-2006, of a critical mass of
organizations and qualified human resources capable of relatively
rapidly integrate and apply new rules for 2007-2013, specific to
structural instruments. In 2004-2006, Hungary, Poland, and the Czech
Republic witnessed the development of a true industry of consulting
firms, resulting in thousands of practically similar projects, with
minor adaptations, without a legal mechanism to refuse them. The
situation has continued similarly in Romania between 2007-2010,
resulting in emergence of expert advice in preparing applications for
funding and reduced ability to use structural elements to address real
structural problems of development. The lesson of Poland, Hungary and
the Czech Republic was integrated by Romania only partially in the
concept of access and absorption of structural instruments; in Romania,
the Operational Program Human Resources Development (POSDRU) is
distinguished by multiplying the type of projects developed by
consulting firms, while for the Sectoral Operational Program--Increase
of Economic Competitiveness (POSCCE) for certain lines of financing
involves accessing European funds in preparing the grant application by
consulting firms approved by the Intermediary Bodies for POSCCE.
3) The pressure to launch calls for proposals, due to the need to
respect the "n+2" rule, caused in 2004-2006 an overloading of
the Management Authorities and Intermediary Bodies with a large number
of requests for funding that had to be evaluated and contracts. Coupled
with the use of evaluation and selection criteria, either too flexible
or too restrictive, there were inevitably delays in approving funding,
and appeals that have contributed to delays postponed the final results.
In Romania, over 2007-2013, this pressure was increased significantly
due to relatively delayed approvals of operational programs. The
continuous launching of calls for projects and the use of extremely
flexible evaluation criteria and a highly flexible interpretation were
the "bad practices" of the new Member States group which
joined in 2004, integrated in the practice of POSDRU in Romania during
2007-2010, which is the program under which a project approval takes on
average more than one year from the date of submission of the grant
application by the beneficiaries.
4) Improper working procedures in 2004-2006 resulted in
implementing errors in the new Member States, which led to an increase
in cases of irregularities, of which the most cases and the highest
values being irregular in Poland (157 cases, over 12 million Euros in
2006), and Hungary (97 cases, over 6,3 mil Euros in 2006). Romania and
the new Member States generally have integrated this lesson in
2007-2013, most actions taken by the anti-fraud departments having a
preventive character and being materialized in the form of training and
information sessions to post-accession non-reimbursable funds recipients
(at least one training seminar for each operational program, per
trimester, in Romania, from 2007 to 2010). However, Bulgaria has not
exploited this lesson and was confronted in 2009 with the European
Commission decision to suspend the implementation of certain lines of
funding in 2009.
5) Implementing difficulties, high number of irregularities,
increased bureaucracy, especially in Member States and operational
programs to implement the system based on a large number of intermediary
bodies. In these Member States (Hungary, Poland), there was need to
reduce the number of intermediary bodies and to provide more tasks to
the remaining ones. For Romania, this lesson was not internalized into
the management system of non-reimbursable accession funds from
structural instruments. Thus for three Operational Programs the number
of intermediary bodies remains high (this is the case of the Regional
Operational Program--8 intermediary bodies, the Sectoral Operational
Program Human Resources Development--13 intermediary bodies, the
Sectoral Operational Program--Increase of Economic Competitiveness--4
intermediary bodies). In addition, in 2004-2006, in Hungary, Poland,
Czech Republic, the frequent changes of rules and application
conditions, an inefficient informational flow, as well as insufficiently
harmonized legislation (public procurement, financial control) and high
staff turnover were specific difficulties of the new Member States that
affected the process of access and implementation of structural
instruments. These negative aspects as well as those of a large number
of intermediary bodies in the same program already materialized in the
case of Romania, during 2007-2010 in weak institutional coherence, at
the same program's level, pursuant to specific rules of
implementation of structural instruments (e.g. the adoption of decisions
on completely different financial management for similar situations by
various intermediary bodies).
6) Difficulty in meeting deadlines and malfunction management
system for EU non-reimbursable assistance from structural instruments.
Thus, between 2004 and 2006, in Hungary it was observed that: much of
the required documentation was useless, unable to comply with
regulations and procedures in order to obtain funding by the applicants;
double-checking system has led most often to a useless duplication of
work. In Hungary there was no time limit for conclusion of funding
contracts, but generally it was 6 months (between selection and
contracting effects). The monitoring system has proven to be slow,
inefficient with the procedures and useless costs. The installment
payments to 20% when the project is completed were difficult to be
accepted by the applicants from Hungary. Systems for receiving and
approving projects were too complicated (e.g. the Czech Republic) and
led to increased costs and the proliferation of nontransparent project
selection methods.
Lessons learned by new EU Member States during pre-accession
The main "lessons" from accessing pre-accession
non-reimbursable funds for new Member States transferred in the process
of accessing and managing post-accession financial assistance were:
1) Building the institutional management framework of structural
instruments determined the integration of best practices in each state,
based on national assessments. Institutional framework for access and
management of post-accession non-reimbursable funds from structural
instruments must be built before starting to use post-accession
financial instruments, as faster as possible, more accurately and
adapted to national specificities. The evaluation of the pre-accession
period indicated that institutional structures cannot be automatically
copied/replicated from one State to another, but they must take into
account peculiarities of administrative organization and traditions of
each State. In Romania, building the institutional management framework
of post-accession non-reimbursable funds was generally completed only by
the time of its accession; afterwards, the frequent changes of
government structures influenced the allocation of responsibilities for
management of structural instruments (e.g. moving the IB--Energy from
the Ministry of Economy to the Ministry of Finance and then back to the
Ministry of Industries). In the case of POSDRU, building national
management framework was not yet completed at the end of June 2010 (i.e.
two intermediary bodies had not yet been designated);
2) Overall, simple management structures of the EU non-reimbursable
assistance are considered more effective, more flexible, more
transparent and requiring a less expensive institutional building; such
structures are easy to manage. Even so, simple management structures at
national level are at risk to develop tree-like structures downstream,
difficult to access, information, control the use of non-reimbursable
assistance funds to the beneficiaries. In Romania, the institutional
framework is a complicated one, which includes 18 national management
authorities and contact points, over 30 intermediary bodies with
national and/or regional responsibilities, etc.
3) The ability to access and manage non-reimbursable assistance
depends, essentially, on the existence of qualified personnel, efficient
and sufficient in number and structure. One of the aspects to be
considered in the management of post-accession non-reimbursable
assistance is related to the recruitment and motivation of the personnel
working within the national management structures of these instruments.
In Romania, in May 2010, due to budgetary constraints in 2009 and 2010,
the effectiveness of financial motivation of the human resources from
the management authorities and intermediary bodies was seriously
affected and caused "migration" of the human resources to
other sectors, so that coverage on the whole did not exceed 60%. This
situation has negative effects on the absorption of structural
instruments (increased processing time and verification of projects
funded, etc.).
4) Development, prior to starting the process of accessing and
implementing post-accession non-reimbursable funds, of a set of working
procedures in order to ensure efficient and sound financial management
of these financial instruments. The set of working procedures must be
available prior to accession and must be adjusted continuously, as more
appropriate to actual conditions of access and management of structural
instruments, facilitating access and absorption of post-accession
non-reimbursable funds. The operating mode with these types of manuals
was experienced by the new Member States during the implementation of
pre-accession non-reimbursable funds. However switching to
post-accession assistance did not involve the automatic download of the
old procedures, such an approach is limited by the fact that the rules
applicable to grant post-accession assistance (EU regulations) are not
completely identical with the specific pre-accession assistance (e.g.
PRAG Manual). The existence and implementation of a coherent and
workable set of procedures will ensure a high degree of objectivity in
the management of structural instruments will facilitate the integration
of new staff employees in the management structures of post-accession
assistance and reduce dependence of key individuals in these structures.
5) Ignoring best practices and failures in pre-accession period
limits the effectiveness and functionality of management systems of
post-accession assistance, and thus the access and absorption of these
financial instruments in the new EU Member States.
6) Information and training of project beneficiaries from
structural instruments are essential for creating a larger pool of
project ideas, development of quality projects and the adequate
management, based on principles of sound financial management, of the
funded projects. The concentration of these actions, carried out by the
new Member States, the former beneficiaries of the projects financed
from pre-accession assistance, has enabled the rapid generation of a
large number of projects funded, but also presents a risk of repeating
the same errors that they have done during the pre-accession period, and
automatic implementation of pre-accession assistance under the rules,
completely ignoring the new conditions for post-accession
non-reimbursable funds.
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Cojanu V. (coordinator), PAIS II, Study 6, "Specific
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2006
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Laura Elena MARINAS, Bucharest Academy of Economic Studies Faculty
of International Business and Economics
Mihai Ovidiu CERCEL, University of Craiova, Faculty of Economics
and Bussiness Administration,.
Email: mihai.cercel@dae.gov.ro
