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					ROMANIA

EU STRUCTURAL INSTRUMENTS
 OPERATIONAL PROGRAMMES
2007-2013




Draft

ANNEX
TO
IMPLEMENTATION
GUIDANCE MANUAL



Examples of management tools from EU Member States


November 2005

ANNEX
TO
IMPLEMENTATION GUIDANCE MANUAL


CONTENTS


INTRODUCTION
•    STATUS OF MATERIALS CONTAINED IN THE ANNEX
•    ADDING TO THE ANNEX


A. POLICY DEVELOPMENT, PROGRAMMING, PROGRAMME MONITORING
AND EVALUATION

A.1. PROGRAMMING
•      A.1.1. Operational Programmes (OPs)
o      Example 1 - Methodology for quantification of indicators (Fraser Assoc.)
A.2. PARTNERSHIP MANAGEMENT
•      A.2.1. OP Monitoring Committee
o      Example 1 – Monitoring Committee Terms of Reference (Wales, UK)
•      A.2.2. Regional Coordinating Committees
•      A.2.3. Broader partnership management

A.3. PROGRAMME MONITORING
•      A.3.1. Annual and Final Implementation Reports
o      Example 1 – Annual Report format – Objective 1 - 2004-2006 (Hungary)
•      A.3.2. Implementation Review

A.4. PROGRAMME EVALUATION
•      A.4.1. Ex-ante, mid-term and ex-post OP evaluation

A.5. MODIFICATIONS TO THE PROGRAMME
•     A.5.1. Rules governing OP modification
•     A.5.2. Allocation of reserves

A.6. INFORMATION AND PUBLICITY
•      A.6.1. Compliance with information and publicity rules
o      Example 1 – Communications Action Plan 2000-2006, Eastern Scotland (UK)

B. MANAGEMENT OF PROGRAMME IMPLEMENTATION AND PERFORMANCE

B.1. PROGRAMME MANAGEMENT
•      B.1.1. Management of OP performance
•      B.1.2 Managing Technical Assistance under an OP
o      Example 1 – Menu of possible Technical Assistance actions – (Polish TA Manual
2004-2006)

B.2. BUILDING THE PROJECT PIPELINE
•      B.2.1. Project development
o      Example 1 – Guidance on project development through local partnerships –
Objective 1, 2000-2006 (Wales UK)
o      Example 2 – Environmental sustainability checklists for capital (i.e. „hard‟) and
revenue (i.e. „soft‟) projects – Objective 2, 2000-2006 (North East England, UK)
o      Example 3 – Equal opportunities checklist for projects – Objective 2, 2000-2006
(North East England, UK)
•      B.2.2. Project applications
o      Example 1 – ERDF application form and guidance notes – Objective 1, 2000-
2006 (Wales UK)

B.3. PROJECT APPRAISAL
•      B.3.1 Project eligibility check
o      Example 1 – Project eligibility checklist (adapted)
•       B.3.2. Project technical appraisal
o       Example 1 – Project appraisal scoring grid (adapted)
•       B.3.3. Compliance of projects with EC rules on state aids
•       B.3.4. Compliance of projects with EC rules on public procurement
•       B.3.5. Compliance of projects with detailed national rules on eligibility of
expenditure
o       Example 1 – Eligibility rules taken from Commission Regulation (EC) 1685/2000
as applied during the 2000-2006 period

B.4. PROJECT SELECTION
•      B.4.1 Project Selection methodology
•      B.4.2. Approval procedure for „major‟ projects (>€25m and >€50m)

B.5. PROJECT CONTRACTING
•      B.5.1 Signing project contracts
o      Example 1 – Possible project contract model (Adapted Hungarian template)
•      B.5.2 Modifying project contracts

B.6. AFTERCARE SERVICES
•      B.6.1 Providing aftercare to Beneficiaries




C. FINANCIAL MANAGEMENT AND CONTROL


C.1. VERIFYING DELIVERY OF OPERATIONS
•      C.1.1. Verification of Beneficiaries‟ expenditure claims
o      Example 1 – Structural Funds claim form and associated guidance note –
Objective 1, 2000-2006 (Wales, UK)
•      C.1.2. On the spot verification of operations
o      Example 1 – Extracts from UK guidance package for on the spot verifications
•      C.1.3 Authorisation of payments to Beneficiaries
•      C.1.4 Monitoring of outputs and results

C.2. FINANCIAL CORRECTIONS
•      C.2.1 Detecting and reporting irregularities
o      Example 1 – Extracts from UK guidance package on reporting irregularities
•      C.2.2 Correcting irregularities

C.3. CERTIFICATION OF EXPENDITURE
•      C.3.1 Certification of expenditure at programme level
•      C.3.2 Compliance with the n+2 rule
o      Example 1 – N+2 monitoring table – adapted to Romanian situation from a UK
spreadsheet tool
•      C.3.3. Management of OP financial tables
o      Example 1 – Financial tables and exchange rate management spreadsheet tool
•      C.3.4 Programme closure

C.4. AUDIT TRAIL
•      C.4.1 Maintenance of audit trail on operations
o      Example 1 – Description of audit trail in response to Commission questionnaire
(Objective 1 Regional Development OP 2004-2006 - Hungary)


INTRODUCTION



The Annex to the Guidance Manual contains examples of operational documents, forms
and tables etc., which are used in EU Member States. These documents provide
additional material to support many, but not all, of the Sections of the Guidance Manual.


STATUS OF MATERIALS CONTAINED IN THE ANNEX

The materials in the Annex are presented for illustrative purposes only. They largely
cover activities relevant to the current 2000-2006 phase of implementation. Such
materials will need to be adapted to the requirements of the 2007-2013 Structural
Instruments regulations, if used for future OP implementation in Romania.

In some cases materials presented in the Annex have been adapted, under Phare
Twinning projects, to Member States partners‟ best estimate of the Romanian situation
after accession and of the new regulatory framework for the Structural Instruments.
These will also need to be checked thoroughly against the final implementation
provisions agreed in Romania and the requirements of the final version of the 2007-2013
regulations.


ADDING TO THE ANNEX

The Annex is a more „open‟ document that the Guidance Manual itself. New materials
which are considered relevant may be added at any time.


MAINTAINING AND UPDATING THE ANNEX
TO THE GUIDANCE MANUAL
•      The person responsible for updating this Manual is [Name, Institution].

Any new materials proposed for insertion into the Annex should be sent by Email to the
following address [insert Email address]



A.   POLICY    DEVELOPMENT,                       PROGRAMMING,              PROGRAMME
MONITORING AND EVALUATION

A.1. PROGRAMMING


A.1.1. – Operational Programmes (OPs)



Example 1 – Methodology for quantification of indicators (Fraser Associates)



The following pages set out a simple example of the quantification process, in this case
based on assistance to new and existing SMEs.

There are five steps: to the quantification process:

•      Assume distribution of resources across Measure.
•      Apply assumptions on unit costs.
•      Apply assumptions on gross economic outcomes.
•      Apply assumptions on the gross-net adjustment.
•      Check rationality against baseline data.

The last step is to ensure that the target set is a sensible one. There is no sense setting a
target for assistance for 200 existing environmental businesses if there are only 100 in the
sector, for example. Also, the process of comparing the beneficiary target with the
baseline population helps to inform whether:

•      the total resource is adequate to address a priority.
•      there is an appropriate balance of resources between different priorities.
A.2. PARTNERSHIP MANAGEMENT


A.2.1. – OP Monitoring Committee



Example 1 – Monitoring Committee Terms of Reference – Wales (UK)




OBJECTIVE 1: MONITORING COMMITTEE

Terms of reference

Meetings

1. The Monitoring Committee will determine its pattern of meetings so as to ensure the
proper and timely conduct of the Committee‟s business. It will be expected to meet
broadly at quarterly intervals, though more frequent meetings might be appropriate in the
early part of the Programme period. For the convenience of members, the Monitoring
Committee will agree a forward schedule showing the timing, venue and location of
meetings, normally one year in advance.

2. Meetings will normally be convened by the Chair on his/her own initiative; at the
request of the European Commission; or, exceptionally, with the Chair‟s agreement, at
the request of another member of the Committee. Notice of at least 15 working days will
normally be given although exceptionally this notice may be shorter.

3. The Chair will draw up the agenda, and will include items requested by more than
three members of the Committee. Any such requests must be made in writing at least 15
working days before the date of any meeting. The minutes of the previous meeting will
be included on the agenda which will normally be sent out at least 10 working days
before the date of any meeting. On the initiative of the Chair, or at the request of another
member of the Committee with the approval of the Chair, items for the agenda may be
tabled less than 10 working days before the meeting. All working papers for the meeting
will be circulated with the agenda, although exceptionally papers may be circulated at a
later date.

4. The Monitoring Committee will decide whether its meetings, in whole or in part,
should take place in public or in private. However, the Chair may propose to the
Committee that discussion of any particular agenda item should take place in public or on
a more restricted basis.

Participation in Meetings

5. Members of the Committee will be eligible, subject to paragraph 6 below, to
participate in all business transacted by the Committee. Individual members who are
unable to attend a particular meeting may be represented by their named alternates,
provided that the Chair is notified before or at the beginning of the meeting. Any advisor
who, by agreement of the Chair, accompanies a member shall not be eligible to
participate in the Committee‟s business.

6. Members of the Committee are required to declare any interest they may have in a
particular agenda item before discussion of it begins. A member declaring an interest may
be asked by the Chair to withdraw from the meeting for the duration of discussion on that
item, or otherwise requested not to participate in that item of business.

7. The Monitoring Committee and its subordinate groups will operate on the basis of
consensus. In the event of a disagreement the Chair, using all appropriate channels, shall
seek to resolve any differences arising within the partnership.

Written procedures

8. At the initiative of the Chair or, with the agreement of the Chair, at the initiative of
another member of the Committee, proposals may be submitted to the Committee for
adoption by written procedure. Members will normally be asked to give their written
opinion on any such proposal within 15 working days. The proposal shall be deemed
agreed by the Committee in the absence of any written objections within that period.

9. Where written objections from any member are received by the Secretariat within 15
working days, the Chair will determine whether:
a. the proposal shall be deemed lost;
b. discussion should take place with the relevant member concerning their objection; or
c. the proposal should be referred back to the Committee for further consideration.

10. A member may withdraw written objections to any proposal at any time and, when
every written objection is withdrawn, the proposal shall be deemed agreed by the
Committee.

11. Following the 15 working day period, the Secretariat shall inform the Committee:
a. whether any proposal submitted to the MC for adoption has, in the absence of any
written objection, been deemed agreed; or
b. if any member has registered written objections to a proposal and, if so, what the Chair
has determined.

Schedule: Key Tasks
12. The Monitoring Committee shall establish a schedule detailing the timing and
arrangements to be followed in carrying out certain key tasks, including the preparation
of annual and final implementation reports and the mid-term evaluation of the
programme.

Working Groups

13. The Monitoring Committee will be free to establish any subsidiary working groups
which it feels necessary for the speedy and efficient conduct of business.

Secretariat

14. The Secretariat to the Committee will be provided by the Welsh European Funding
Office, which will assist and advise the Committee in respect of all the functions and
procedures set out above.
A.3 PROGRAMME MONITORING


A.3.1. Annual and Final Implementation Reports



Example 1 – Model for Implementation Reports Hungary – Objective 1 (2004-2006)



Model for Implementation Reports

Both the annual and the final implementation report should be structured according to the
following chapters.

1) Executive summary

The executive summary should contain information on aim of the report and a brief
description of all the key issues covered in detail in the following chapters.


2) Changes in general conditions with importance for the implementation of the
assistance

Under this chapter the report shall include the key and new elements modifying the
existing situation when the assistance was conceived and started being implemented. The
potential consequences of those changes on programme implementation particularly
regarding coherence between the different Structural Funds or between them and other
financial instruments like the Cohesion Fund or the EIB should be described. Problems if
any related to the national matching funds (both public and private) should also be
referred to.

3) Progress in the implementation of each priority

The report should present progress achieved in the implementation of each priority, for
each Fund. It should include the available information regarding physical or output
indicators in order to measure progress. It is accepted that the first annual report may not
include all relevant data on this area but in that case the second annual report should fill
in those missing parts.

In addition to quantifying and analysing the physical indicators mentioned in the OP and
in the programme complement, the report should:
•       Justify the modifications in any of the programme complement approved by the
OP monitoring committee (scope or contents of measures, physical indicator, etc);
•       Describe the main problems and difficulties faced during the year and how they
have been overcome;
•       Present a comparison between programming of each priority and progress
achieved so far – through quantification of indicators the report should demonstrate if
execution is in time and if implementation is being pursued in the right direction
according to plan. Any positive or negative element influencing the outcome of the OP
should be explained and corrective actions already taken should be described;
•       Include information on financial engineering techniques (as in article 28 (3) of
Regulation 1260/1999).

       4) Financial progress

         The report should show the updated financial data concerning the programme by
filling in the table annexed to this report model. That financial table should include only
eligible actually paid certified expenditure. The annual report should also comprise
detailed information on the financial flows regarding the Structural Funds transfers from
the Commission to the Competent Body for payments.

        Both for national expenditure and for Structural Funds transfers it would be useful
to present the annual and the cumulated financial situation from the starting point of the
programme. A comparison between programmed and real figures should be made.
Shortcomings should be justified and measures taken to improve the situation should be
described.

       The report should present as well the fields of intervention coded for each
measure using the standard classification on the level of 3 digits (according to annex IV.
point 3 of Regulation no. 438/2001). Where needed (in the case of heterogeneous
measures) more than one code should be given with the corresponding estimated share.
       It should be clear that total expenditure to be certified by the paying authority
should correspond to payments effected by final beneficiaries and supported by paid
invoices of by accounting documents of equivalent probative value.

       5) Steps taken by the managing authority and the monitoring committee to ensure
the quality and effectiveness of implementation.

        The report should indicate initiatives taken by the managing authority and by the
monitoring committee to improve quality and impact of the operational programme. In
particular all modifications of the programme complement made by initiative of the
managing authority or at request of the monitoring committee, notably to change the
relative financial share of a given measure within a priority axis, should be mentioned.

       5.1) Monitoring and evaluation actions

       The report should mention efforts undertaken to develop the monitoring and
evaluation system. This comprises:
•      The state of data collection for the establishment of indicators referred to in the
NSRF, OP and programme complement;
•      Any problem encountered in applying indicators should be analysed and details
provided on the measures taken to overcome it;
•      Outline of discussions and decisions taken by the monitoring committee on this
topic;
•      The status, development and issues covered by any steering committee set up to
review the progress of monitoring and evaluation;
•      The development and issues covered by any thematic working group set up to
deal with specific policy area (environment, equal opportunities);
•      Summary of any evaluation studies carried out the previous year;
•      A description of how equality between men and women has been taken into
account in monitoring and evaluation activities.

       5.2) Financial control actions

        The Romanian authorities being the first responsible for financial control of
operations funded by the Structural Funds, the report should include:
•       A notice on the annual report on the management and control systems as provided
for in article 13 of Regulation no. 438/2001;
•       The confirmation that the Structural Funds monies are used in accordance with
the sound financial management principles;
•       A summary of the most important problems that have been faced in managing the
programme and the measures taken to overcome them;
•       The financial impact of detected irregularities, the corrective measures already
taken and if necessary the modifications to be made on the management and control
system.

       5.3) Summary of main problems encountered
       This is the most strategic part of the report. The report should describe the most
important problems encountered in managing the programme and the initiatives taken to
overcome them. It should include all quantitative and qualitative aspects that have
influenced progress of the programme implementation both internal and external to the
programme.

        Measures to correct the situation may be taken by initiative of the managing
authority or of the Member State government, at the request of the OP monitoring
committee or following recommendations of the European Commission.

       The EC recommendations may be made in order to improve effectiveness of the
monitoring and management arrangements (according to article 34 (2) of Regulation
1260/1999) or to correct detected irregularities that have not yet been corrected
(according to article 38 (4) of Regulation 1260/1999).

        If the managing authority decides not to follow the EC recommendations pursuant
to article 34 (2), it should explain the reasons for that decision in the report. In case of
irregularity correction (article 38 (4)) the managing authority is obliged to comply with
the Commission recommendation and should describe the measures taken to overcome
the problem.

       5.4) Use of technical assistance

         The report should describe how the managing authority used the technical
assistance allocation over the previous year. In particular a distinction must be made
between expenditure linked to management, implementation, monitoring and control
activities which are subject to specific ceilings (in accordance with eligibility sheet no. 11
of Regulation 1685/2000) and all other expenses.

       5.5) Measures taken to ensure publicity of the OP

        Publicity and information actions focused on potential final beneficiaries (to
inform them about the new opportunities offered by the Programme) and on the general
public (to make it aware of the role played by the European Union on economic and
social development of Romania) should be described in the report. In fact progress in
implementing the communication plan should be analysed and the main impacts of the
publicity actions should be presented.

       6) Steps taken to ensure compatibility with other Community policies and to
ensure overall co-ordination

       The managing authority should indicate initiatives taken to ensure full respect of
Community policies including competition, public procurement, environment protection,
elimination of inequalities and promotion of equality between men and women.
        Regarding competition policy, the report should confirm that the state aids
provided for in the programme have been implemented as planned and did not exceed the
approved rate of assistance ceilings. In particular it is important to ensure coherence
between the data provided in the report and the annual reporting system to the DG
Competition on state aid to SME and on “de minimis” aids. Any modification to the state
aid table annexed to the OP should be mentioned and justified.

       The coordination of the community assistances – e.g. support from the single
Structural Funds, Operational Programmes, Community Initiative Programmes, Cohesion
Fund, and the European Investment Bank – also have to be mentioned.

       7) Progress and financing of major projects and global grants

        Detailed information should be provided on the financial progress and main
results of major projects (see Articles 25-26 of Community Regulation 1260/1999) and
global grants (see Article 27 of Community Regulation 1260/1999) included in the
operational programme.

Financial table* for annual/final implementation report by priority

       Commission Reference No of the related OP:
       Title:
       Year:
       (in euro)
       Priority/
       Measure               Total***
       (1)           Total eligible actually paid and certified expenditures
       (2)           % of eligible cost
       (3=2/1)               Other           Field of intervention**
       Priority 1
        Measures 1.1
        Measures 1.1
        etc.
       Priority 2
        Measures 2.1
        Measures 2.1
        etc.

       Technical assistance

        Total ERDF

       Total
       N.B. Measure-level information required during 2000-2006 may no longer be
required by the Commission for 2007-2013
         * A table covering last calendar year and a table covering cumulative amount up
till the end of pervious year (in the case of annual report) should be presented.
         ** The field of intervention should be coded for each measure using the standard
classification on the level of 3 digit where needed (in case of heterogeneous measures)
more than one code should be given with the corresponding estimated share.
         *** This column contains the amounts that are the basis of calculation of the
Funds (either the total eligible cost, or the total public/eligible cost.
A.6. INFORMATION AND PUBLICITY

A.6.1. Compliance with information and publicity rules



Example 1 – Communications Action Plan 2000-2006, Eastern Scotland (UK)




COMMUNICATIONS ACTION PLAN

In accordance with the Commission Regulation (EC) No 1159/2000 of 30 May 2000 on
information and publicity measures, the Programme Monitoring Committee (PMC) of the
East of Scotland Objective 2 Programme will ensure that appropriate actions will be
undertaken to publicise the European Structural Funds.

In particular, publicity actions will be aimed at informing the following groups of the role
of Structural Funds support:

•       Potential and final beneficiaries
•       Project operators and promoters
•       The end beneficiaries
•       Local and regional public authorities
•       Trade and professional bodies
•       Economic and social partners, bodies promoting equal opportunities and the
relevant non-governmental organisations about the opportunities afforded by the
assistance;
•       General public

Accordingly, the Managing Authority, in consultation with the Programme Monitoring
Committee, shall inform the European Commission on an annual basis of the initiatives
which have been undertaken to fulfill the proposed publicity actions as detailed in
Section 6.4 of the Plan.

At a minimum the publicity actions to be undertaken to ensure the above target groups
involved will include:
•       Guidance to applicants detailing publicity requirements, including the provision
of detailed guidelines
•       Development and maintenance of the East of Scotland Programme Website
providing an extensive range of information and guidance
•       Promotional Literature including biannual Newsletters
•       Good practice Case Studies/Project exemplars
•       Press Releases
•       Mobile Exhibition Boards for use at seminars and conferences
•       The widespread application of the Scottish European logo “Europe and Scotland-
Making it Work Together”

The Communications Action Plan for the Programme is detailed on the following pages
and will be consistent with the Communications and Publicity Strategy for the European
Structural Funds in Scotland 2000-2006.




7.1    BACKGROUND AND RATIONALE

This plan details the proposals to publicise and promote the Structural Funds assistance
within the East of Scotland Programme for the period 2000 to 2006. An effective
Communications Action Plan will form an integral part of Programme implementation
and will seek to increase public awareness, transparency and visibility of the activities of
the European Structural Funds. Monitoring of the Plan will be undertaken by the
Programme Management Executive and reviewed formally by the Programme
Monitoring Committee. In accordance with the General Regulation (EC) 1260/1999, the
Annual Implementation Report will detail the measures taken to implement the
Communications Action Plan.

7.2    AIM

The East of Scotland Programme Communications Action Plan aims to:

Promote a positive image of the East of Scotland Programme, of the European Structural
Funds and the European Union.

7.3    OBJECTIVES

•      To raise awareness and promote a better understanding of the activities of the
Structural Funds and the benefits which accrue from their effective application to the
regional development effort.
•      To provide information and advice of the opportunities afforded by and the role of
the European Structural Funds to the following target groups:
•      To inform the general public of the role of the European Union, in co-operation
with the Member State, in the provision of European Structural Fund support
•      To assist in the delivery of a transparent Programme.

7.4    TARGET GROUPS

•       Whilst the Communications Action Plan seeks to promote the Programme as
widely as possible, the following audiences will be targeted:
•       Potential and final beneficiaries
•       Project operators and promoters
•       Local and regional public authorities
•       The end beneficiaries
•       Trade and professional bodies
•       Economic and social partners, bodies promoting equal opportunities and the
relevant non-governmental organisations about the opportunities afforded by the
assistance;
•       General public




7.5    PRACTICAL IMPLEMENTATION MEASURES

A range of practical measures will be utilised to deliver the Communications Action Plan.
The means and methods will vary according to the nature of the audience and information
publicised. These methods will be reviewed and monitored to ensure they are appropriate
and, if necessary, new ones explored. Where appropriate, other language and audio
versions will be produced of relevant documentation to enable wider accessibility.

The following Table indicates the proposed measures in more detail:

METHOD         DESCRIPTION            TARGET AUDIENCES             MONITORING
Programme Publications and Guidelines
        The Programme Complement will be published on a CD format. Other
publications are planned around specific themes e.g. the Horizontal Themes, LMI reports.
A set of guidelines will be produced for general use, but more particularly to assist
potential and final beneficiaries in making applications to the Programme. The
guidelines will include details on the Programme structures and membership, application
procedures, selection criteria, intervention rates, horizontal themes and a glossary.
        Available to all target groups with specific relevance to potential and final
beneficiaries. Feedback will be through a general request on the website and also
through regular updates following the annual review process, inviting comments from the
main partners.
Publicity Guidance Guidance including a copy of the regulation text will be provided
to all applicants as part of the project approval package. This guidance will also be
available on the website and as general guidance to any interested parties. Also publicity
guidelines on acknowledging EU Structural Fund Assistance will be published and made
available to all partners.     All approved project applicants – but available to any
interested party.       Formal monitoring of compliance with the publicity regulation will
be carried out through checks on claims submitted and physical monitoring and
verification visits undertaken by the PME and the Scottish Executive.
Website         The further development and enhancement of the East of Scotland website
is a key element of this communications action plan. The site will include a variety of
information:
        Full text of Programme Complement
        Programme documentation (applications forms, guidance, guidelines) which will
be downloadable
        Details of application processes; selection criteria
        Details of the programme structures and membership
        Explanation of the funds and examples of past projects
        Answers to commonly asked questions
        Minutes of meetings, lists of project approvals
        Annual implementation reports; evaluation reports
        Good practice and case studies
The website is not viewed as a static communications tool, rather one which will be
updated, enhanced and adapted on a regular basis in line with the needs of the
Partnership. All target groups.        Feedback is requested on the website which will
regularly be considered by a website working group within the Programme Management
Executive. More formally, the Committee members will be invited to comment on the
website through the annual reviews.


METHOD            DESCRIPTION            TARGET AUDIENCES                MONITORING
Newsletter        A biannual newsletter will be produced and widely distributed to the target
groups. The newsletter will include:
         statistical updates on the distribution of the funds; their effects; relevant economic
statistics (including labour market updates) for the East of Scotland Programme Area;
         details of all awards offered and key Committee decisions and policies;
         publicising projects;
         advertising events, application deadlines and new guidance available
The newsletter will also be available on the website. All target groups           Feedback will
be requested within the newsletter and comments on the newsletter will form part of a
general survey to be undertaken of the Programme Management Executive annually.
Workshops/Seminars Regular seminars and workshops will be undertaken throughout
the lifetime of the Programme. These will largely focus on applying for funds; claiming
funds; monitoring and evaluation and the horizontal themes. More than 10 workshop
seminars have already been undertaken to publicise and explain the new Programme and
provide guidance in completing the new application forms. Over 500 people have
already attended such workshops. Slides from workshop seminars will be available on
the website.
The PME and Scottish Executive will also be actively involved in undertaking
presentations on the Programme when requested to ensure the Programme is actively
publicised as widely as possible.
        Depending on the workshop content, all target groups. Focus on key sectoral
project applicants for some. Feedback invited through the general survey on the work of
the PME and also following some workshops.
Good Practice Case Studies The Programme Management Executive will actively seek
to ensure good practice examples are integrated into guidelines, accessible on the website
and publicised through the newsletter. Good practice examples from the previous
Objective 2 Programme on sustainable development are already incorporated into
guidelines and these will be updated include examples of equal opportunities and other
areas of interest.      All target groups.  Regular updates to be incorporated.


METHOD          DESCRIPTION           TARGET AUDIENCES              MONITORING
Exhibition Display Boards/Promotional Material Display boards were used to
publicise the previous Programme and provide examples of activity funded by the
Programme. This will continue and form a useful way of publicising the funds at events
run by the Partnership and also by partnership bodies who will be able to use the boards
on loan.        All target groups.    Content to be reviewed by PME on an annual basis.
Commemorative Plaques          Standard permanent plaques for internal use have been
designed and produced and are available to project sponsors at cost.        Project
Sponsors of Infrastructure Projects
Press Releases Press releases will be prepared to make the public aware in advance of
changes to the Programme and to disseminate general information. Of particular interest
is the press release announcing Committee decisions on project approvals with a list
which will be made widely available to any interested party. The PME and Scottish
Executive will also provide articles and features, on request for relevant publications.
        All target groups.     The regularity and content of press releases to form part of
the annual review process.

7.6    Monitoring and Evaluation of the Communications Action Plan

The Annual Implementation Reports will contain information on publicity measures in
accordance with Article 35 of the Regulation No 1260/1999. The Table above indicates
the regular monitoring to be undertaken of the Communications Action Plan. At the core
of the monitoring process will be the annual review which the Programme Monitoring
Committee will undertake when it will consider all aspects of programme
implementation. The annual review will provide the platform for amending or enhancing
the actions undertaken to ensure effective publicity of the Programme and the European
Structural Funds to all interested parties.

7.7    Financing the Communications Action Plan
The indicative budget for the Communications Action Plan is £100,000 over the
Programme period. This will be monitored and reviewed by the ESEP Board in the first
instance reporting to the Programme Monitoring Committee.

7.8    Responsibility for Implementation

The Scottish Executive will have overall responsibility for the implementation of the
Communications Action Plan. The designated officer is:
Name………………..
Address……………..
Email………………..
Telephone…………..

The designated officer for the East of Scotland Programme Management Executive is:
Name………………..
Address……………..
Email………………..
Telephone…………..



B. MANAGEMENT OF PROGRAMME IMPLEMENTATION AND PERFORMANCE

B.1. PROGRAMME MANAGEMENT


B.1.2 Managing Technical Assistance under an OP



Example 1 – Menu of possible Technical Assistance actions – (Polish TA Manual 2004-
2006)
N.B. This example is based on application of the EU detailed eligibility rules for 2000-
2006 enshrined in Commission Regulation (EC) 1685/2000.




TECHNICAL ASSISTANCE

Eligible actions under Polish TA – OP 2004-2006

Under the 200-2006 regulations the scope of eligible expenditure under Technical
Assistance was relatively broad, although ceilings were applied to certain types of
expenditure. The detailed rules on eligible expenditure and ceilings presented below may
be different in the context of the new regulations for 2007-2013.
Eligible expenditure under technical assistance
The common rules concerning the eligibility of expenditure for actions in the field of the
technical assistance were provided for in Commission Regulation No. 1145/2003 laying
down detailed rules for the implementation of Council Regulation No. 1260/1999.


Eligible activities will be guided by the final content of the Technical Assistance OP vis a
vis any Technical Assistance measures in the other OPs. A menu of possible eligible
activities is set out below (based on Polish TA Manual for 2004-2006)

Training

The expenditure eligible for financing is as follows:
-       costs of training services rendered by experts, consulting companies and advisory
and training companies,
-       costs of renting the premises and the multimedia equipment,
-       catering costs,
-       accommodation costs,
-       costs of travelling of the participants to the training centre,
-       costs of preparing and copying the training materials,
-       costs of advisory services and external services,
-       costs of preparing and carrying out the training,
-       costs of renting the premises and the multimedia equipment,
-       costs of elaboration or renting of publications and of distribution of the didactic
and information materials,
-       costs of purchasing didactic and information materials.


Monitoring

Projects concerning the following may be financed:
-      administrative servicing of the Operational Programme Monitoring Committees,
-      administrative servicing of the Operational Programmes Monitoring sub-
Committees,
-      collection, gathering, analysing and processing of the data for monitoring
purposes, comparison of the data with the stipulated indicators and elaboration, in
collaboration with the social partners, of decisions concerning modifications to the
Operational Programme,
-      preparation by the Managing Authority and Intermediate Bodies regular, annual
and final reports on the progress of Operational Programme implementation,
-      preparation of the reports on the implementation of the particular Community
horizontal policies under the Operational Programme,
-      preparation of the periodical reports on the implementation of the Operational
Programme.

The expenditure eligible for financing is as follows:
-      costs of organising the Committee meetings,
-      costs of preparing and copying the materials,
-      costs of renting the premises and the multimedia equipment,
-      costs of communication and exchange of information with the Committee
members,
-      costs of seconding the employees,
-      travelling costs,
-      catering costs,
-      accommodation costs,
-      costs of services rendered by the experts appointed to participate in the
Committee meetings,
-      costs of collection, gathering, processing and analysing of the data for the
monitoring purposes,
-      costs of preparing, copying and dissemination of the reports on the Committee
meetings and the annual and final reports.


Expert‟s Opinions, Analyses, Research and Innovative Measures

The project types and expenditure eligible for financing are as follows:
-      costs of expert‟s opinions and analyses for the purpose of both the elaboration of
the methodology of an effective management, monitoring and control and the
standardisation of procedures,
-      costs of expert‟s opinions and analyses of the process of preparing the Structural
Funds future interventions,
-      costs of studies and concepts for the purpose of the improving the efficiency of
the Operational Programme implementation, the improvement of achieving the objectives
provided for and the delivery of the priorities stipulated, the introduction of the necessary
modifications and reallocations and which support the process of preparing the Structural
Funds future interventions,
-      costs of printing, copying and distribution of the concepts, analyses, expert‟s
opinions and studies,
-      costs of preparing the presentations.


Evaluation

Types of projects eligible for financing:
-       eligible administrative costs relating to the servicing of the evaluation unit for the
Operational Programme, including mainly the costs of organising the meetings,
preparation, copying and distribution of the working materials, costs of communication
and exchange of information between the bodies involved in the process of Operational
Programme evaluation,
-       costs of seconding, catering and accommodation, travel costs, staff costs of the
employees (including the social security contributions) seconded to carry out the tasks
related to evaluation,
-      costs of the evaluation carried out by the external evaluators,
-      costs of translations/interpretations necessary in the process of evaluating the
Operational Programme,
-      expert support in the form of the work of experts, preparation of expert‟s
opinions, analyses, studies and concepts for the purpose of the elaboration of the
evaluation methodology and standards and their on-going improvement,
-      costs of the fees of national and foreign experts,
-      costs of preparing the expert‟s opinions and analyses,
-      costs of preparing the studies and concepts,
-      costs of translations/interpretations for the purpose of assessment (evaluation),
-      costs of printing, copying and distribution of concepts, analyses, expert‟s opinions
and studies,
-      costs of preparing the presentations.


Equipment

The expenditure eligible for financing is as follows:
-       costs of preparing terms of reference for the tendering procedure and of carrying
out the tendering procedure,
-       costs of purchasing computer hardware,
-       costs of purchasing licences and software,
-       costs of installing computer hardware,
-       costs of purchasing other electronic appliances belonging to the office equipment,
-       costs of purchasing and installing computer hardware,
-       costs of purchasing and installing network active elements,
-       costs of purchasing and installing routers,
-       costs of purchasing and exploitation of the IT and telecommunications equipment,
-       costs of purchasing and installing the data transmission appliances,
-       costs of purchasing and subscription of the publications concerning the IT and
telecommunications techniques.

Development and maintenance of MIS systems

Objectives:
-       ensuring of a smooth exploitation of the MIS system on a daily basis,
-       on-going development of the system and its improvement,
-       improvement of the quality of the maintenance and the services provided for by
the system to its users,
-       day-to-day maintenance and development of the MIS network in order to ensure
an effective communication between all the institutions responsible for the
implementation of the OP

Types of projects which will be financed should concern:
-       the organisational development (modification of the organisation, modification of
the users‟ roles, etc.),
-      the administrative development (possible amendments in the legal acts, forms and
key reports),
-      the functional development (modification or expansion of the system
functionalities) and the technical development (expansion of the network, equipment and
software),
-      ensuring of a smooth exploitation of the system on a daily basis by:
•      emergency service,
•      operational maintenance,
•      administration and maintenance of the system,
-      exploitation and development of the MIS wide area network by:
•      day-to-day maintenance of the MIS dedicated network,
•      day-to-day use of the commutation links (alternative access to the System for the
users not covered by the MIS network),
•      connecting of the additional users to the MIS network,
•      increase of the MIS capacity (as required).

The expenditure eligible for financing is as follows:
-      costs of preparing the terms of reference for the tendering procedure and of
carrying out the tendering procedure,
-      costs of advising,
-      costs of preparing the System development,
-      costs of the System development,
-      costs of the System maintenance.


Publicity and dissemination of information

The following types of projects may be delivered within the measures concerned:
-       elaboration, publication and distribution of the information materials
(publications, brochures, leaflets, CD-ROMs and other possible forms) and the materials
promoting the Operational Programme and the Structural Funds,
-       organisation of the campaigns and actions promoting and informing about the
Operational Programme and the Structural Funds,
-       promotion of “the best projects” and “the best practices”,
-       organisation of the information and promotion campaigns concerning the
possibilities of using the structural assistance under the Operational Programme,
-       organisation of the seminars and workshops concerning the exchange of
experience between the Managing Authority and the Managing Authorities and
Implementing Institutions for complementary programmes supported by the Structural
Funds,
-       elaboration, publication and distribution of the information materials, procedure
manuals and guides for the beneficiaries and the potential project providers,
-       elaboration, publication and distribution of the annual reports on the progress of
Operational Programme implementation,
-       organisation of the periodical meetings involving the participation of the technical
service and the system users for the purpose of exchanging the experiences and informing
about the difficulties encountered as regards the handling and using of the ROP MIS
system, software deficiencies, need to modify the software and its functions, obtaining
answers to the most frequently asked questions (FAQ),
-       organisation of the seminars and conferences the result of which should be the
elaboration of proposals of decisions affecting the optimising of the MIS system and its
evolution and coming to an agreement as regards the introduction of the modifications
proposed,
-       organisation of the on-line assistance in the form of the telephone info-line,
preparation, issuance and distribution of the information materials, organisation of the
Internet information services, etc.
-       organisation of the thematic meetings aiming at the information and promotion of
the Structural Funds,
-       advisory assistance as regards the creation of detailed promotion plans for the
Operational Programme,
-       creation and maintenance of the telephone information posts (help-desks),
-       creation and maintenance of a website concerning the OP.

The expenditure eligible for financing is as follows:
-       costs of printing and distribution of leaflets, brochures and other materials
informing about the Structural Funds and the Operational Programme,
-       costs of purchasing the consumables – data carriers, paper, foil, toner, ink
cartridges for printers, etc.,
-       costs of the website development,
-       costs of the development and maintenance of the MIS information services,
-       costs of organising the working meetings and workshops,
-       costs of the on-going updating of information,
-       costs of the website modification,
-       costs of maintenance and day-to-day servicing of the website,
-       costs of the website promotion, costs of carrying out the tendering procedure,
-       costs of running the info-line,
-       costs of preparing the promotion materials,
-       costs of preparing the stands, banners and other materials used for marking
projects and publicity events,
-       costs of rendering the consultation services,
-       costs of renting the premises and multimedia equipment,
-       costs of consecutive interpretations during conferences and seminars,
-       costs of translating the information materials,
-       costs of elaboration, publication and dissemination of the information materials,
copies of programmes, leaflets and brochures, multimedia presentations, manuals and
guides,
-       costs of the promotion posters,
-       costs of presentations concerning the examples of the best practices and the best
projects at the fairs and publicity events,
-       costs of purchasing the consumables – data carriers, paper and foil, toner and ink
cartridges for printers, etc.
-       costs of preparing the plan of publicity and information activities,
-        costs of communication with the social and economic partners,
-        costs of communication with the managing authorities and the implementing
institutions,
-        costs of seconding, travelling and accommodation of the employees,
-        costs of travelling of the participants to the training centre,
-        catering costs,
-        accommodation costs.


Ceilings on certain types of eligible expenditure
According to the provisions of Regulation 1145/2003 concerning the approval of
expenditure relating to the actions co-financed by the Structural Funds, eligible actions
described above were classified as follows:
Actions subject to the expenditure limit in accordance with Rule 11.2
−        expenditure relating to the selection, monitoring and control of the projects,
assistance and actions. These operations will include the funding of expert‟s opinions
necessary for the selection of projects and the costs of experts supporting the project
selection committees. It is also possible to finance the audit to be carried out by an
external auditing company,
−        costs relating to the operation of the Monitoring Committee – costs of the
meetings of the Monitoring Committee and its Sub-committees are eligible costs
according to Regulation 1145/2003 (it is provided for to cover the costs of participation,
i.e. travelling, accommodation and subsistence for the Committee permanent members as
well as for the experts participating in the work of such Committees, and the costs of
preparing the reports concerning the progress in the Programme implementation),
−        reimbursement of the salary costs, including the social security contributions,
relating to the civil servants, public officials or any other staff seconded to carry out the
abovementioned tasks,
−        upgrading the skills of the personnel implementing the Operational Programme,
−        it is also provided for to carry out training for the persons dealing with the
implementation, which would aim at the exchange of experience, improvement of the
work effectiveness and the familiarisation with any possible modifications under the
Programme.

The amount of the Community contribution to the funding of actions subject to the
expenditure limit shall not exceed the values stipulated in point 2.4. of Rule no. 11 of the
abovementioned Regulation, i.e. a percentage contribution from the Structural Funds to
the funding of the Programme in relation to the total value of the Community assistance
for the Programme concerned according to the following formula:
−       2.5 % of that part of the total Structural Funds' contribution which is less than or
equal to the amount of EUR 100 million,
−       2 % of that part of the total Structural Funds' contribution which exceeds the
amount of EUR 100 million but is less than or equal to EUR 500 million,
−       1 % of that part of the total Structural Funds' contribution which exceeds the
amount of EUR 500 million but is less than or equal to EUR 1 000 million,
−     0.5 % of that part of the total Structural Funds' contribution which exceeds the
amount of EUR 1 000 million.

Actions not subject to the expenditure limit in accordance with Rule 11.3
There is no limit on the percentage contribution from the Structural Funds for Technical
Assistance activities listed below:
−       promotion of the Operational Programme operations,
−       information campaign for the potential recipients of the assistance. As part of
such a campaign, conferences and seminars for the Beneficiaries are held, programming
documents as well as aid applications together with the completion instructions are
distributed and the website providing current information on the Programmes
implementation is maintained,
−       upgrading the skills of the personnel dealing with the Operational Programme
implementation,
−       it is also provided for to carry out training for the persons involved in the
implementation process, which would aim at the exchange of experience, improvement
of the work effectiveness and the familiarisation with any possible modifications
introduced to the Programme,
−       purchase of the computer hardware used directly for the management and
monitoring of the Operational Programme.


B.2. BUILDING THE PROJECT PIPELINE


B.2.1. Project development



Example 1 – Guidance on project development through local partnerships –Objective 1
2000-2006 (Wales UK)



WEST WALES AND THE VALLEYS: OBJECTIVE 1

GUIDANCE FOR LOCAL PARTNERSHIPS (extracts)

INTRODUCTION

1.1     Objective 1 can only account for part of the economic development that takes
place in an area. Some local partnerships have therefore found it useful to broaden their
remit to cover economic development more generally. This guidance looks at the key
roles to be covered in respect of Objective 1, i.e. to:
•      develop and review a strategy to target Objective 1 resources to local areas of
need and opportunity;

•      monitor progress in implementing the strategy and identify gaps in provision;

•       assist applicants in developing and delivering projects which will fulfil       the
objectives of the strategy;

•      promote the Programme locally.

but suggests that wherever possible this should be set in the context of wider economic
development.

1.2     To a large extent the day-to-day work on these tasks will be carried out on behalf
of the partnership by its secretariat; it is up to the partnership to decide to what extent
tasks should be delegated to the secretariat. Collectively the partnership and secretariat
should adopt a proactive approach to encouraging and assisting delivery of the
Programme in their area.

MONITORING AND REVIEW OF STRATEGY

2.1    Local partnerships have prepared local strategies for their areas. These have been
agreed by the PMC and summaries are available on the WEFO web-site.

2.2     WEFO provides partnerships with details of commitments, spend and outputs of
local projects in each Measure of the Programme. It also provides details of outputs of
sub-regional and regional projects that are being delivered within the partnership area.

2.3     In the light of this information and more detailed information that they may gather
locally, partnerships should monitor performance against their targets and review their
strategy on an ongoing basis. Strategies were reviewed in June 2003 and will be reviewed
again in 2004 after the Mid Term Review of the Programme.

2.4    The review should cover:

a)      a review of monitoring information on the performance of Objective 1 projects
delivering in the area; other indicators of economic performance; external developments
affecting the economy;

b)     consideration, in the light of this, of whether changes are needed:

i       in the implementation of the strategy; are there, for example, gaps in the provision
of certain types of activity; and

ii     in the strategy itself.
2.5   Partnerships will want throughout to ensure that their strategy for Objective 1
complements national and other local or regional policies or programmes.


DEVELOPMENT AND ASSESSMENT OF PROJECTS

3.1    Local partnerships have a crucial role to play in ensuring that robust, good value-
for-money and well-developed projects are put forward and selected for appraisal and
funded. There are three stages to this:

a)      gateway/enquiry handling

3.2       Where the partnership identifies gaps in its strategy that it feels local projects can
fill, it should adopt a proactive approach to encouraging potential applicants to develop
projects.

3.3     The partnership also provides one of the contact points for potential sponsors
making enquiries about the Programme. The partnerships should advise the applicant on
the issues covered in the WEFO web-site guidance, i.e.:

•       whether the activity proposed is eligible;

•       which Measure of the Programme it might fit into;

•       whether there is funding available in the Measure and whether the activity fits
within the priorities identified for the remaining resource;

•       what sources of assistance are available to the applicant in developing their
project, e.g. the local partnerships and private and voluntary sector units.

and also:

•       whether the proposed activity fits within the local strategy;

•       what approved projects may already provide sources of funding, e.g. key funds;

•      whether other projects offering a similar service or activity have already         been
approved (and duplication can therefore be avoided);

•      if Objective 1 funding is not appropriate, what other sources of funding might be
available.

b)      the development of local projects

3.4     WEFO and other partners will encourage the sponsors of local projects to seek
assistance from the local partnership at as early a stage as possible, for two main reasons:
i       to enable the project sponsor to understand how his/her project can be developed
to contribute most effectively to the local strategy; this will include how it complements
and links to other activity in the area, whether this is delivered by Objective 1 projects or
not, and ways in which the cross-cutting themes should be applied in local circumstances.

ii      to give the less experienced project sponsor practical advice in Objective 1
procedures and documentation. It may for example, be helpful for the partnership to
discuss with the applicant how the project fits with the core criteria against which it will
be scored by WEFO. The attention of the applicant ought also to be drawn to the
guidance available on application of the crosscutting themes. In addition to helping
applicants with the application procedures, partnerships should draw sponsors' attention
to post-approval claim and reporting responsibilities. They will also want to draw the
attention of project sponsors to the availability of the “Guide to Setting up a European
Project Manual” and to the training available to project managers.

3.5    The assistance of partnerships at the development stage can make a significant
contribution to ensuring that a project proceeds smoothly and speedily through WEFO's
appraisal process.

c)      comment on projects under appraisal

3.6     WEFO will seek comments from the local partnership on applications for local
projects which are submitted to it; these will represent an important element of WEFO‟s
appraisal of the project‟s overall value for money         Partnerships will be invited to
comment on:

i       the extent to which the project addresses the needs and responds to opportunities
identified as priorities within the strategy; the assessment should consider, for example,
the location of proposed employment opportunities, the type and quality of employment
proposed, the target beneficiaries (young people, economically inactive etc) and their
relevance to the strategy;

ii     the links of the project to other Objective 1 projects and to other policies and
programmes;

iii     the extent to which the project proposes maximisation of the opportunities for
local people, e.g. in terms of encouraging use of local labour in construction and giving
local people the best chance of accessing jobs;

iv     the extent to which the cross-cutting themes are built into the project, taking
account of the opportunities available locally;

v      the degree of innovation, in terms of the activity itself or the way it is delivered.
3.7     The partnership is also invited to comment on other relevant issues which relate to
local circumstances, the quality and deliverability of the project, e.g. the track record and
competence of the applicant locally in delivering successful projects, the realism of
outputs and expected demand. Partnerships are not asked to score projects against the
core criteria, which would duplicate WEFO's role, but may wish to cover these in a
checklist of points for discussion with applicants.

3.8     Where partnerships have been involved in the development of projects they may
wish to provide a letter of support to the applicant, covering the points in 3.6 and 3.7
above, to accompany the application; a template is attached at Annex A.

3.9   WEFO will also alert local partnerships to other projects that are under appraisal.
This will enable local partnerships to be aware of proposed regional projects and draw
WEFO's attention to any overlap with existing activity in the local area .


d)    support for projects in measures where there are local funding allocations

3.10 In those measures of the Programme where allocations have been made to local
partnerships and a project sponsor is seeking to use some of a partnership‟s allocation the
partnership will need to consider, taking into account the criteria in paragraph 3.6,
whether they wish to support the project. Decisions should be taken by the partnership
board; they should be reached in a transparent way and clearly recorded, with a
justification based on the above criteria, in the minutes of the board.

3.11 If the partnership board has decided to support the project the partnership should
provide the applicant with letter of support which confirms that they are content for their
local allocation to be drawn; a template is provided at Annex A.

3.12. If the partnership board has decided not to support the project, the applicant should
be informed of the decision and advised of his or her right to seek clarification.


PROMOTION OF THE PROGRAMME

5.1     The local partnerships are uniquely placed to ensure that local residents are aware
of the opportunities that the Programme makes available to them both directly and
indirectly.

5.2     The partnership thus has a threefold, proactive role:

a)      to publicise the Programme to those who may be able to contribute to its delivery
as project applicants; in practice most public sector applicants will be aware of the
possibilities, but there may be some in the private and voluntary sectors who are not
familiar with the opportunities;
b)     to publicise the opportunities available to those who may benefit from projects
already approved, e.g. providing business support or training, whether these be local or
regional projects;

c)     to make the wider public aware of the way that the Programme is progressing and
general economic and other improvements that it is bringing to the area.

5.3    The partnership itself will be best placed to consider how local information and
media outlets can be used to undertake this role most effectively. Throughout, the
partnership will need to take into account of and complement WEFO's communication
programme.

MEMBERSHIP

6.1     The principal decision-making and advisory body for the local partnership area is
the partnership; membership of the board should reflect the characteristics of the area and
the opportunities identified in the local strategy.

6.2    The exact size of the board is for the discretion of the partnership. A balance
should be struck between the need to ensure efficient conduct of business and
representation of relevant interests. It is envisaged that it should not normally be
necessary for the number of members to exceed that of the PMC, i.e. 18 members.

6.3    There should be equal representation from the public sector, the social partners,
and from the community and voluntary sector:

•       the public sector covers those from central and local government, other
democratically elected bodies, statutory agencies and organisations funded fully or in
significant part by central government or local taxation;

•       the social partners cover the business sector, individual businesses as well as
business representative bodies, and representation from the trade union movement and
related organisations;

•      the community and voluntary sectors cover not-for-profit voluntary sector
organisations which are independent of the public or private sectors but may include
community businesses. Not-for-profit, non-statutory bodies, whose membership or board
comprises a majority of either public or private sector members, are not included.

6.4     Members should be chosen according to the experience and expertise of the
individuals concerned. They will normally be nominated by an organisation in their
sector; in accepting a place on the board they will, however, be expected to put the wider
economic interests of the local partnership area before sectoral or other, narrower,
interests (see section below on conflicts of interest).
6.5    There should also be an approximate gender balance amongst members of the
partnership. The PMC have agreed that each gender should be represented by a
minimum of 40% of the membership, which is the minimum level of participation set out
by the Commission.

6.6     In order to ensure that they can observe this requirement on gender balance and,
more generally, that the membership continues to reflect those sectors of the community
most concerned with its economic development, all partnerships should have a process
for reviewing their membership. The membership from each sector should be reviewed
each year. Specifically, the members of each sector should meet separately to consider:

•       whether the existing membership adequately reflects the interested organisations
in the area. There may be a case, for example, for rotation of representation between
different organisations, whilst ensuring that sufficient continuity is maintained at the level
of individual members to ensure smooth operation of the partnership.

•      whether any changes in the individuals representing those organisations are
appropriate, taking into account the wishes of the organisations concerned and the wishes
as well as the expertise and experience of existing members. Normally, no individual
member should serve for longer than four years and the sector should manage this
requirement by agreeing, for example, a staggered timetable for bringing in new
members.

6.7     The sector should agree, by consensus, a recommendation to the full board on
representation from the sector for the following year. In reaching this recommendation
the sector should bear in mind that:

•      overall, membership of the board will need to observe the required gender
balance;

•      a reasonable level of continuity should be maintained;

6.8    To reflect these points, where a change in representation is recommended, either
of organisation or individual, two nominations should be put forward, one of each gender.
This may mean that a single organisation will put forward two nominations, to be
endorsed by the sector, or that the sector will agree that two nominations from different
organisations should go forward. The partnership will then consider the recommendation
from the sector and formally select and agree its membership for the next year.

6.9     Each sector should also recommend to the partnership alternate members for each
full member of the partnership. Alternate members should represent a similar range of
interests to those of full members.

6.10 The Chair of the partnership should be elected by the whole board. He/she may
come from any of the three sectors. The Chair should be re-elected every year and no
individual should serve for longer than three years. The board may also wish to elect one
or two vice-chair[s], who should come from sectors other than that of the Chair.


Advisors

6.11 The PMC has decided in relation to its own functions and activities to make use
of the experience and expertise of a range of statutory and other bodies. These bodies are
invited to attend meetings and, through circulation of papers and minutes, are kept fully
informed of programme development. Partnerships are recommended to adopt a similar
practice. In the case of the PMC the relevant bodies are the:

•      Countryside Council for Wales
•      Environment Agency, Wales
•      Disability Rights Commission
•      Equal Opportunities Commission
•      Commission for Racial Equality
•      Wales Tourist Board
•      Welsh Arts Council
•      Welsh Language Board, and
•      Chwarae Teg.

6.12 There may be other bodies who have particular expertise to offer, e.g. in the area
of ICT, and who could also be included as advisors; partnerships should, however,
restrict advisor status to organisations who have specialist knowledge to offer in a
relevant field. If the board feels it desirable at any time to have expertise available on
any other subject, it is open to them to invite advisors on an ad hoc basis.

7          OPERATION

Meetings

7.1        It is for the partnership to decide how often it wishes to meet. The number of
members constituting a quorum for decisions to be taken is a matter for the local
partnership.

7.2    As a general rule partnership meetings should be open to members of the public.
However, there may be items on the agenda, in particular those that relate to the
discussion of specific projects, where the board may decide that this would be
inappropriate.

Sub-groups

7.3    Given the extent of the task, it may be appropriate for partnerships to establish
sub-groups to carry out particular activities. Sub-groups should include members with an
appropriate mix of skills and experience – it is not necessary for there to be equal
representation from the three sectors – and should be fully accountable to the board.

Conflicts of interest

7.4     It is essential that the procedures of the partnership should be transparent and that
there are procedures in place to handle any conflicts of interest that may arise. The
underlying principle, set out in the Code of Conduct for PMC and partnership members,
is that where a member has a financial or non-financial interest which would prejudice or
give the appearance of prejudicing his or her ability to participate in a disinterested
manner in discussion of a particular matter, he or she must make an oral statement
declaring the nature of the interest and should not remain in the room for discussion of
the matter concerned.

7.5     Potential conflicts of interest for members are most likely to arise in the 7ontext
of discussion about individual projects. The two most likely scenarios are:

a) where a member of the partnership has a direct interest in a project, in terms of :

i      a personal financial interest,

ii      being employed by the organisation making the application (except as indicated in
b (i) below), or

iii    any other direct interest, such as being a member of the management board of the
applicant organisation;

b) an indirect association with a project, by virtue of, for example:

i       being employed by the applicant organisation, but in a capacity in which the
member has not had and will not have any role in the development or management of the
project;

ii       being employed by, or otherwise directly associated with, an organisation which
is not the project applicant but is providing match funding for the project.

7.6     In the case of interests which fall within the definition at (a), the member
concerned must declare that interest and not be present in the room for discussion of that
project. It is for the secretariat to present all projects to the partnership and to respond to
questions about them. It is not acceptable for a member of the applicant organisation to
present a project and then leave the room for subsequent discussion of it, as this can put
applications from organisations who are not represented round the table at a
disadvantage.
7.7    In the case of interests which fall within the definition at (b), the member
concerned should declare his/her interest but may remain in the room for the discussion
and may speak if invited to do so by the Chair.

7.8    This guidance may not cover all situations which can arise. In such cases, it is for
the Chair of the meeting to decide on the procedure to be followed, bearing in mind the
underlying principle set out above.

Secretariat

7.9    Each partnership has appointed a lead body which provides the secretariat to the
partnership. The secretariat acts as the executive arm of the partnership in carrying out a
range of functions, under the overall direction and advice of the partnership or, in some
instances, WEFO. The secretariat will, for example, take the lead in work on revising
and updating the strategy, collate monitoring information, provide a contact and enquiry
point for the partnership, assist project applicants, liaise with other partnerships and
organisations and with WEFO.

7.10 It is acknowledged that there can be strains and tensions in partnerships from time
to time. In most cases the partnership itself will be able to resolve these. If WEFO is
made aware of these it will discuss the issues with the partnership concerned and its lead
body with a view to finding a way of resolving them. If appropriate, it will refer the
issue(s) to a small sub-group of the PMC for their advice.




Annex A



[Project name]
[Project sponsor]
[Priority: Measure: ]
[Supporting Partnership]


The [name of partnership] Partnership Board confirms its support for the enclosed project
application on [date] following an assessment based on fit with its strategy and the
criteria set out in paragraphs 3.6 and 3.7 of the Local Partnerships section of the West
Wales and the Valleys Objective 1 – Guidance for Partnerships and Thematic Advisory
Groups.



Where relevant

The Partnership has also endorsed use of £[…] of its indicative allocation for Priority [.. ]
Measure [.. ] for the project, subject to the project application for structural funds to
WEFO being successful.

An extract of the minutes of the meeting confirming the Partnership‟s support is attached.




Signed




[Partnership Name] Secretariat

Example 2 – Environmental sustainability checklists for capital (i.e. „hard‟) and revenue
(i.e. „soft‟) projects – Objective 2, 2000-2006 (North East England, UK)




Example 3 – Equal opportunities checklist for projects – Objective 2, 2000-2006 (North
East England, UK)


Equal Opportunities Checklist

This checklist will form a mandatory part of the process of checking the quality threshold
of projects.
•       the checklist should demonstrate how equal opportunities have been
mainstreamed into the project
•       if you answer No to any question you must provide details as to why it is not
relevant to your project
•       if a particular criteria is Not Applicable an explanation is required
•       if your project does not secure a “Positive” score on at least 4 of the criteria, a
meeting will be arranged with the European Secretariat‟s equal opportunities expert, who
will be able to provide advice on how to achieve improvements

Before considering how equal opportunities impacts on your project you should refer to
the equal opportunities profile in part 1 Section 2 of the SPD and Section 1 of the
Programme Complement which sets out the strategy and objectives for mainstreaming
Equal opportunities in the Objective 2 Programme.

Organisation Name
Project Title
Programme Measure

Q1. In designing and developing the project have the needs of the equal opportunities
target groups been addressed?
Yes - Positive 0
No - Negative 0
Not Applicable 0

Please provide details of how you have identified the needs of the target groups and
integrated these into the project:


If Not Applicable please justify this:


In designing and developing your project you need to be aware of how it will address the
equal opportunities strategy of your Partnership and the SPD? Have target groups been
consulted during the design and development stages of the project? Have representatives
of under-represented groups taken part in the decision making process i.e. has the project
been marketed and promoted using positive images of the target groups in locations
used/accessed by these groups

Q2. Will all clients/beneficiaries receive advice/guidance/training on equal opportunities
legislation/issues as part of the project?
Yes 0
No 0
Not Applicable 0

Please describe action taken to promote equal opportunities legislation:
If Not Applicable please justify this:


Projects should include positive actions to promote equal opportunities issues through
training and dissemination of information (advice should be sought from the European
Secretariat on whether these costs could be included as part of the overall project
expenditure). Business plans should include an Equal Opportunities Statement (ESF
applications include specific equal opportunities questions covering similar areas).
Guidance and advice for the projects will be available from the equal opportunities expert
in the European Secretariat as well as the web-site and the Equal Opportunities Guidance
pack.

Q3. Will the project be delivered at flexible times/locations?
Yes 0
No 0
Not Applicable 0

Please provide details:


If Not Applicable please justify this:


In delivering the project consideration must be given to the needs of under-represented
groups. Are the premises/locations accessible to all under-represented groups e.g. access
for people with disabilities, safe and secure environment for vulnerable members of
society? Will the project be delivered at times convenient to all target groups?

Q4. Does the project promote family friendly policies?
Yes 0
No 0
Not Applicable 0

Please provide details:


If Not Applicable please justify this:


In promoting family friendly policies consideration should be given to the provision of
childcare facilities as an integral part of the project. Is the location a safe and secure
environment for all target groups? The Equal Opportunities Guidance pack provides
advice on positive actions that can be taken to encourage family friendly policies.
Q5a. Will the project ensure that all target groups have equality of access to training
opportunities?
Yes 0
No 0
Not Applicable 0

Please provide details:


If Not Applicable please justify this:


The project needs to demonstrate how target groups have equality of access to training
opportunities. Has promotional literature, information and application forms been
devised to be user friendly/large print/multi-lingual. Has ICT been used for distance
learning?
Do training delivery methods take account of accessibility issues e.g. open learning
packages or community based training?

Q5b. Has the project in providing business support advice addressed the needs of the
target groups?
Yes 0
No 0
Not Applicable 0

Please provide details:


If Not Applicable please justify this:


Details of how the project has addressed the needs of the target groups should be
provided. Are these opportunities for members of under-represented groups to train/seek
employment in posts where traditionally they are under represented such as
professional/managerial/technical positions? Are there opportunities for target groups to
access finance to start up new businesses? Are application forms for finance user
friendly, available in a range of formats from large print to electronic and multi-lingual?




B.2.2. Project applications
Example 1 – ERDF application form and guidance notes – Objective 1 2000-2006 (Wales
UK)



       Example of application form

OBJECTIVE 1 WALES (Adapted)

See also Guidance on how to complete the application form (embedded below)



EUROPEAN GRANT APPLICATION - ERDF

•       Please read the accompanying guidance notes when completing each section of
this form.

•      You MUST attach a Project Plan to this application.


1.     NAME OR PROPOSED NAME OF PROJECT




2.     SUPPORTING PARTNERSHIP NAME (where applicable)




3.     PRIORITY AND MEASURE

Identify, from the Operational Programme Document and the Programme Complement,
the Priority and the Measure that your project is intended to help deliver.

Priority       Measure




4.     PROJECT COSTS

Total eligible project cost:   Grant requested:
Grant rate:




5.      THE APPLICANT

Organisation name:


Address (include County and Postcode):




Web site (if you have one):



        Organisation Category Code and Registration Number(s)

This information is necessary to ensure that we can account properly for any grant that
may be awarded to your project. If you think that more than one code might apply,
please consult Intermediate Body.

Code No:


All Private Sector applicants and others that have not previously submitted an application
for European Funds: please attach a copy of your most recent and the two previous years
audited accounts and a copy of your Articles of Association or Memorandum of
Agreement. All applicants: please also quote your registration number(s) below (as
appropriate).




6.      CONTACT DETAILS

First Contact: Second Contact:

Name:
Title/role:



Telephone number:



Fax number:



Email address:




7.      TIMETABLE

Proposed start date    End date




8.      PREVIOUS STRUCTURAL FUND GRANT

        Has the project received Structural Funds before? Yes: 0 No: 0

If YES, please insert the Programmes and the project reference numbers. These can be
found on the Approval Letters.




9.      LOCATION

Is the project to be delivered at a different location from the Applicant?

Yes:   0      No: 0

If Yes, please indicate the location or locations by inserting the names of the local
authorities and wards here.
A location map is required for all Capital projects and for any project that will operate in
more than one location.


10.    PURPOSE

Please summarise the purpose of the project here. Explain how it will deliver the aims of
the Priority and Measure. Full details should be included in the Project Plan.




11.  DIRECT LINKS WITH OTHER EC STRUCTURAL FUND PROJECTS OR
PROJECTS FUNDED FROM OTHER PUBLIC SECTOR SOURCES

Please record any such links here.




12.    INVOLVEMENT OF OTHER ORGANISATIONS

Will any organisations other than the Applicant be involved in the delivery of the project?
If so, please state who, what their involvement will be, and/or the intended procurement
arrangements.




13.    PROJECT OWNERSHIP

Will the project or any of its assets be owned by an organisation OTHER THAN the
Applicant?

Yes:   0     No:     0

If Yes, please explain why this is necessary and describe the arrangements that will be
made to ensure that the assets will be used for only the purposes stipulated in the grant
offer.
14.    ENVIRONMENTAL SUSTAINABILITY

Will the project include any activity within or have any other impact on any of the
following?

NATURA 2000 designated site        0
Area of Outstanding Natural Beauty 0


National Nature Reserve         0
Site of Special Scientific Interest   0


Scheduled Ancient Monument or Listed Building        0
National Park 0


Any other designated area (please specify below)     0
None apply 0


Describe the positive and negative Environmental impacts of the project, or refer to the
relevant section of the Project plan. Remember that if there will be no adverse effects, or
the effects will be positive, you must justify your view. Indicate any authorisations (eg
Environment Agency consents for discharges or emissions) that will be required and
whether these have been obtained. If your project requires an environmental impact
assessment please supply a copy.




PLANNING PERMISSION

Is Planning Permission required?                            Yes:    0      No:     0

If Yes, have you obtained all the necessary consents:       Yes:    0      No:     0
If Yes, attach a copy of the permission including any conditions and the relevant plans as
approved. Also attach (where relevant) building regulation approval and ground
investigation reports, structural/building surveys, and asbestos/timber treatment surveys.

If you are waiting for planning permission, please state the planning application
registration number and when you expect to receive it. If you do not know when you
expect to receive it, please say why.




Grant aid may be withheld until the necessary permissions have been obtained.


Does your application involve a development on the following:

Greenfield site               Yes:   0       No:     0

Brownfield site                      Yes:    0       No:    0




If on a greenfield site please give details of the consideration you gave to brownfield
alternatives:




If your organisation has an Environmental policy please attach a copy.

15.    ICT

All grant-aided projects should make a positive contribution to ICT. Outline how ICT
opportunities have been integrated into the project design and implementation,
mentioning any specific components that show this.




If your organisation has an ICT strategy please attach a copy.


16.    EQUAL OPPORTUNITIES
All grant-aided projects should make a positive contribution to equality of opportunity for
all. Outline how equal opportunities have been integrated into the project design and
implementation, mentioning any specific components that show this.




If your organisation has an Equality Strategy please attach a copy.

17.    ADDED VALUE

We need to know to what extent the project is dependent on grant.

What will you do if ERDF grant is refused? Tick one box only.

Go ahead as planned: 0


Go ahead as planned, but over a longer timescale       0


Go ahead, but on a reduced scale:     0


Will not go ahead at all:        0



18.    STATE AID

This is a complex subject, so it is PARTICULARLY IMPORTANT that you read the
guidance notes before you complete this section of the form. The decision on whether
and how state aids regulations might impact on your project depends on both what you
are delivering and whether there are or could potentially be commercial competitors for
that activity. If you are unsure how State Aid rules apply to your project please contact
the Intermediate Body for advice.


What the project will deliver:

Will the project deliver assistance to organisations        Yes:      0    No:     0
operating in a competitive market?

If yes, which of the following methods do you propose to use to comply with the state
aids regulations:
De minimis block exemption Yes:       0       No:    0

SME block exemptionYes:       0       No:     0

Training aid block exemption Yes:     0       No:    0
Employment aid block exemption        Yes:    0      No:

Already approved notified scheme Yes: 0              No:     0
If already approved, please supply the following:

Approval Date Date of notification to the Commission         Aid number assigned by the
Commission Amount of Aid
€




Your competitors

Does your organisation undertake economic activities         Yes:    0      No:     0
which may have commercial competitors?

Could the activity for which you are seeking support         Yes:    0      No:     0
have commercial competitors?

If so, state aids regulations may constrain the amount of public funding you may receive.
Please seek advice from Intermediate Body.

19.    QUANTIFIABLE TARGETS

This table should be completed to show the calendar year in which the “outputs” and
“results” of the project will be delivered. Remember that the entries in this table relate
specifically to the Measure that you specified at Section 5 of this form. If the application
is for a regional project please breakdown the targets by local partnership on a separate
sheet.
Note that the definitions you use here should follow the wording in the Programme
Complement for the chosen Priority and Measure.




20.    PROJECT COSTS
Set out the eligible only costs of the Measure specified at Section 3 of this form, and
show in which calendar year the costs will occur. You should explain the basis for each
cost heading in the project plan.

Eligible Capital costs

*    Please attach an open market value in accordance with national valuation and
appraisal standards
** Please attach a site plan, an elemental breakdown of building and construction costs
(including fees breakdown).
*** If the eligible costs include any mobile or portable items please give details on a
separate sheet.


Eligible Revenue (current) costs


**** Please attach job descriptions.

21.    ELIGIBLE EXPENDITURE PROFILE



* Private sector capital projects should attach a development appraisal.

22.    PROJECT FUNDING PACKAGE

Set out how the cost of the project will be met. Written confirmation of match funding
must be provided by each individual organisation and must be attached to this
application.
SOURCES OF FUNDS               Total cost   Eligible cost**      Date confirmation of
funding received / to be received
Applicant‟s own funds, if in Public Sector



Other Public Sector funds:
1st organisation



2nd organisation



3rd organisation
4th organisation



EC Funds (not ERDF),
1st source



2nd source



TOTAL OF PUBLIC FUNDS



Applicant‟s own funds, if in private sector



Other private sector funds:
1st organisation



2nd organisation



3rd organisation



TOTAL PRIVATE SECTOR FUNDS



Voluntary Sector funds:
1st source
2nd source



3rd source



TOTAL VOLUNTARY SECTOR FUNDS



Contributions in Kind from Public Sector*



Contributions in Kind from Private Sector*



Contributions in Kind from Voluntary Sector*



TOTAL CONTRIBUTIONS IN KIND*



Project Income



ERDF Funds requested



TOTAL ALL FUNDING




*If you have included Contributions in Kind, please supply full details on a separate sheet
(land and property contributions need to be based upon a valuation report).
** The grand total of Eligible Costs must equal the grant total in Section 21.
23.    ERDF GRANT RATE

Please show the amount of ERDF grant requested as a percentage of the total eligible
costs of the project.




24.    OTHER GRANTS

Will ERDF Grant replace expenditure that already has been or will be financed from
other grant programmes?

Yes:   0       No:     0

If Yes, attach a full explanation as to how this is consistent with the need for ERDF grant.

25.    PUBLICITY

Describe the arrangements that you will make to meet the European Community‟s
publicity requirements.




26.    CHECKLIST OF ATTACHMENTS

The following is the list of supporting documents mentioned elsewhere in this form.
Please use it to ensure that you enclose all the documents that apply to this application for
grant.

Project Plan – obligatory     Yes:    0       No:     0

Location Map(s) (see section 9)       Yes:    0       No:    0

Last 3 years audited accounts (see Section 4) Yes:    0      No:     0

Articles of Association or
Memorandum of Agreement (see Section 4) Yes:          0      No:     0

Planning Permission and
any attached conditions (see Section 14)    Yes:    0      No:    0

Building regulation approval (see Section 14)       Yes:   0      No:   0

Ground investigation, structural/building,
Or asbestos/timber treatment surveys (see Section 14)      Yes:   0     No:   0

Architects Plans (see Section 14)    Yes:   0       No:    0

Environmental Policy (see Section 14)       Yes:    0      No:    0

ICT Strategy (see Section 15) Yes:   0      No:     0

Equal Opportunities Policy (see Section 16) Yes:    0      No:    0

Site Plan (see Section 20)   Yes:    0      No:     0

Fees breakdown (see Section 20)      Yes:   0       No:    0

Apportion of Plant and Machinery costs (see Section 20)    Yes:   0     No:   0

Elemental Building and Construction costs (see Section 20) Yes:   0     No:   0

Job Descriptions (see Section 20)    Yes:   0       No:    0

Details of Contributions in Kind (see Section 21)   Yes:   0      No:   0

Valuation Report (see Section 20 and 21)    Yes:    0      No:    0

Letters confirming match funding (see Section 21) Yes:     0      No:   0

Development appraisal (see Section 21)      Yes:    0      No:    0


Explanation of other Grants (see Section 24) Yes:   0      No:    0

Other supporting documents – please specify below Yes:     0      No:   0




If all necessary supporting documents are not attached, the application may not be
accepted.
27.    CERTIFICATE

I certify that the entries in this form and the details in the Project plan and any other
attachments enclosed are, to the best of my knowledge and belief, correct and the grant
applied for this minimum required for the project to proceed as described.

I can also confirm that I am not aware of any reason why the project may not proceed or
be delayed other than those reasons declared and the commitments can be made within
the timescales indicated in the Operational Programme Document to which this project
relates.

I understand that if the application is not complete in all relevant details and every aspect,
including this section, it may not be accepted.



Signature        Position in organisation




Name (BLOCK CAPITALS please) Date




Telephone number:




Fax number:



Email address:
B.3 PROJECT APPRAISAL

B.3.1 Project eligibility check


Example 1 – Project eligibility checklist (adapted)


Project Eligibility Checklist

Operational Programme ……………………

Name of Project: _____________________________________________________

Registration Number: _________________________________________________

Applicant:____________________________________________________________

Eligibility Criteria  Meets Criteria       Comments
Section A - Applicant

Organisation is eligible as set out in OP Measure call for applications
Applicant is a legal, registered entity in Romania
Project will be developed and undertaken in Romania
Application has proof of the availability of co-financing resources

Section B – Project

Corresponds with sectoral strategy
Corresponds with regional / local strategy
Project/ investment will take place within the Programme period
All obligatory studies have been/ will be completed and are /will be made available

Application complies with the call for proposals
Project meets Programme, Priority and Measure criteria
Funding required is within the measure budget.
Meets EC polices and addresses: Equal Opportunties and
Sustainable Development criteria

Project is deemed eligible / ineligible.


Signature_________________________ Date___________________________________


B.3.2. Project technical appraisal
Example 1 – Project appraisal scoring grid (adapted)




Operational Programme ………………………………..

Selection criteria (scoring framework)

Name of Project: _____________________________________________________

Registration Number: _________________________________________________

Applicant:____________________________________________________________

Section : A Compliance with programme, priority and measure objectives

        Criteria        Score Comments
1       Relationship with programme objectives:
priority and measure
        20 - fully meets
10 - partially meets
  5 - weak links
2       Project is coherent and feasible and activities are in compliance with other
projects /objectives of the programme          20 - fully meets
10 - partially meets
  5 – poor links
3       Project is located in a target area / identified as a priority target with the local
Strategy. Evidence of partnership working. 25 – High
10 – Medium
  5 – Low priority
4       Realistic, relevance and quantifiable indicators (measurable outputs / results, the
definition of clear and reachable objectives as set out in ROP)       25 – Very good
10 – Good
  5 – Poor
5       Project is in line with other ROP measures and EU/national programmes. The
project does not conflict with other projects. 10 – meets all EU and ROP objectives
5 – meets some
1 – poor correlation
Section B Reasonability / feasibility of the project

6        Quality of the application (transparent layout, coherency, details, reasonability/
justification)
         25 – Good /Visible
10 – Average
  3 – Poor / unclear
7        Methodology – development and preparation of the project is good (project based
on a clear conception). Detailed and feasible schedule of activities that will allow project
to start and finish on time.
         20 – Clear /Visible and very well developed
10 – Average, some more work is needed
  3 – Poor / unclear, unlikely to move forward within proposed time scales
8        Sustainability
-        Financial (project profitability, return analysis);
-        applicant has the professional expertise to sustain the project;
-        from the point of view of environmental protection;
-        multiplier effects associated with project implementation
-        size of affected population
-        project has a clearly defined exit strategy and applicant will maintain project for
its full economic life (minimum 5 years).
         25 – Very good
15 – Good
  5 – Poor
9        Budget and cost efficiency
-        accuracy and degree of detail of budget;
-        compliance of the expenses planned with the objectives set; justifiability and
reality of their volumes;
-        necessity of proposed expenses for project implementation
-        project offers good value for money and cost : outputs ratio
-        budget control and accountability are effective.     30 – Very good
20 – Good
  5 – Poor
         Total Score Max 200

Projects scoring between 200 and 80* proceed to full appraisal.

Projects below quality threshold either referred back to applicant for more development
or rejected.

* quality threshold set by PMC (this is based on a judgment taking into account quality,
volume of applications, risk factors, experience and/or the desire to seek improvements.
Weightings can also be varied to factor in certain features that are considered more
important.)
Scoring procedure conducted by ____________________________________(Name)




Operational Programme ………………………………

Validation and Summary of project scoring


Name of Project: _____________________________________________________

Registration Number: _________________________________________________

Applicant:___________________________________________________________

Scorer*       Score Comments
First scorer
Second scorer
Average Score


First scorer ___________________________

Second scorer _________________________


Agreed Project Score ________________________#

Comments by the Validating Officer:


Score Validated by ____________________

* to maintain anonymity scorers can be giver identifier numbers.

# The agreed project score can be the average score or a modified score arrived at by the
Officer carrying out the validation.


Operational Programme …………………………

Selection and Scoring Procedure - Ranked List of Scored Projects
Priority:                (Title                 and                  no.)
________________________________________________________________________
___

Measure:                 (Title                 and                  no.)
________________________________________________________________________
_____

Budget available for this call _____________               Quality Threshold applied by
PMC________


Rank No     Project name and Reference Applicant    Score Grant    Requested
      Cumulative Grant    Comments
1
2
3
4
____ Budget cut off __________ _______        __________ _________
5
6
____       Quality Threshold____       _______      __________ _________
7
Total


Programme Managers comments and advice to the Project Selection Committee:


Signed________________________________________

Date ________________________________________

Head of Managing Authority.

Notes:

Projects 1 to 4 can be funded

Projects 5 and 6 are placed on a reserve list. Alternatively the MA recommends to PSC
that the grant requests of one or more projects (1 to 4) are reduced, to allow funding of
more projects (5 and/or 6).

Project 7 is rejected (below quality threshold).

B.3.5. – Compliance of projects with detailed national eligibility rules
Example 1 – Eligibility rules taken from Commission Regulation (EC) 1685/2000 as
applied during the 2000-2006 period
N.B. The rules contained in this example may help to serve as a guide only. National
rules for eligibility of expenditure will apply for 2007-2013.



Commission Regulation (EC) 1685/2000

ELIGIBILITY RULES INDEX - 2000-2006

1       Expenditure actually paid out

2    Accounting treatment of receipts
3    Financial and other charges and legal expenses

4    Purchase of second-hand equipment

5       Purchase of land

6    Purchase of real estate

7    VAT and other taxes and charges

8       Venture capital and loan funds

9       Guarantee funds

10      Leasing

11      Costs incurred in managing and implementing the Structural Funds

12      Eligibility of expenditure depending on the location



Rule No 1:
Expenditure actually paid out

1.      Payments by final beneficiaries
2.      Payments by final beneficiaries within the meaning of the third subparagraph of
Article 32(1) of Council Regulation (EC) No 1260/1999 of 21 June 1999 (hereinafter
General Regulation), shall be in the form of cash subject to the exceptions indicated in
point 1.5.

2.1     In the case of aid schemes under Article 87 of the Treaty and aid granted by
bodies designated by the Member States, “payments by final beneficiaries” means aid
paid to individual recipients by the bodies which grant the aid. Payments of aid by final
beneficiaries must be justified by reference to the conditions and objectives of the aid.

2.2     Payments into venture capital, loan and guarantee funds (including venture capital
holding funds) are treated as “expenditure actually paid out” within the meaning of the
third subparagraph of Article 32(1) of the General Regulation provided that the funds
meet the requirements of Rules 8 and 9 respectively.

2.3    In cases other than those referred to in point 1.2, “payments by final
beneficiaries” means payments effected by the bodies or public or private firms of the
type defined in the programme complement in accordance with Article 18(3)(b) of the
General Regulation having direct responsibility for commissioning the specific operation.

2.4     Under the conditions set out in points 1.6,1.7 and 1.8, depreciation, contributions
in kind and overheads can also form part of the payments referred to in point 1.1.
However, the Structural Funds‟ co-financing of an operation shall not exceed the total
eligible expenditure actually paid, excluding contributions in kind, at the end of the
operation.

2.5     The cost of depreciation of real estate or equipment for which there is a direct link
with the objectives of the operation‟s eligible expenditure, provided that:
a)      national or Community funds have not contributed towards the purchase of such
real estate or equipment;

b) the depreciation cost is calculated in accordance with the relevant accountancy rules;
                                                                                      c) the
cost relates exclusively to the period of the co-financing of the operation in question.

1.7     In-kind contributions are eligible expenditure provided that:
a) they consist in the provision of land or real estate, equipment or materials, research or
professional activity or unpaid voluntary work;
b) they are not made in respect of financial engineering measures referred to in Rules 8,9
and 10;
                c) their value can be independently assessed and audited;
                d) in the case of the provision of land or real estate, the value is certified
by an independent qualified valuer or duly authorised official body;
                e) in the case of unpaid voluntary work, the value provided is determined
by the amount of time spent nd the normal hourly and daily rate for the work carried out;
and
                f) the provisions of Rules 4, 5 and 6 are complied with where applicable.
1.8     Overheads are eligible expenditure provided that they are based on real costs
which relate to the implementation of the operation co-financed by the Structural Funds
and are allocated pro rata to the operation, according to a duly justified fair and equitable
method.
1.9     The provisions of points 1.5 to 1.8 are applicable to individual recipients referred
to in point 1.2 in the case of aid schemes under Article 87 of the Treaty and aid granted
by bodies designated by Member States.

1.10 Member States may apply stricter national rules for determining eligible
expenditure under points 1.6, 1.7 and 1.8.


3.     Proof of Expenditure

3.1    As a rule, payments by final beneficiaries, declared as interim payments and
payments of the final balance, shall be supported by receipted invoices. Where this
cannot be done, payments shall be supported by accounting documents of equivalent
probative value.

3.2     As regards rural development, the provisions specified in point 2.1 applies
without prejudice to specific rules established in Commission Regulation (EC) No
445/2002 laying down detailed rules for the application of Council Regulation (EC) No
1257/1999 on support for rural development from the European Agricultural Guidance
and Guarantee Fund (EAGGF) for the case of the determination of standard unit costs for
certain investments in the forestry sector.

3.3    In addition, where operations are executed in the framework of public
procurement procedures‟ payments by final beneficiaries, declared as interim payments
and payments of the final balance, shall be supported by receipted invoices issued in
accordance with the provisions of the signed contracts. In all other cases, including the
award of public grants, payments by final beneficiaries, declared as interim payments and
payments of the final balance, shall be justified by expenditure actually paid (including
expenditure referred to in point 1.5) by the bodies or public or private firms concerned in
implementing the operation..

4.     Subcontracting

4.1     Without prejudice to the application of stricter national rules, expenditure relating
to the following subcontracts is ineligible for co-financing by the Structural Funds:

•      subcontracting which adds to the cost of execution of the operation, without
adding proportionate value to it;

•      subcontracts with intermediaries or consultants in which the payment is defined as
a percentage of the total cost of the operation unless such payment is justified by the final
beneficiary by reference to the actual value of the work or services provided.
4.2     For all subcontracts, subcontractors shall undertake to provide the audit and
control bodies with all necessary information relating to the subcontracted activities.



Rule No 2:
Accounting treatment of receipts


1.      “Receipts” for the purposes of this rule covers revenue received by an operation
during the period of its co-financing or during such longer period up to the closure of the
assistance as may be fixed by the Member State, from sales, rentals, services,
enrolments/fees or other equivalent receipts with the exception of:

a) receipts generated throughout the economic lifetime of the co-financed investments
and subject to the specific provisions of Article 29(4) of the General Regulation;
b) receipts generated within the framework of financial engineering measures referred to
in Rules 8,9 and 10;
c) contributions from the private sector to the co-financing of operations, which appear
alongside public contributions in the financing tables of the relevant assistance.

2.      Receipts under point 1 represent income which reduces the amount of co-
financing under the Structural Funds that is required for the operation in question. Before
the Structural Funds‟ participation is calculated and no later than at the time of the
closure of the assistance, they are deducted from the operation‟s eligible expenditure in
their entirety or pro rata, depending on whether they were generated entirely or only in
part by the co-financed operation.



Rule No 3:
Financial and other charges and legal expenses


1.     Financial charges

Debit interest, other than expenditure on interest subsidies to reduce the cost of
borrowing for businesses under an approved State aid scheme, charges for financial
transactions, foreign exchange commissions and losses and other purely financial
expenses are not eligible for co-financing by the Structural Funds. However, charges for
transnational financial transactions within assistance under PEACE II and the
Community Initiatives (INTERREG III, LEADER+, EQUAL and URBAN II) are
eligible for co-financing by the Structural Funds after deduction of interest received on
payment on account. Furthermore, in the case of global grants, debit interest charges paid
by the designated intermediary prior to payment of the final balance of the assistance are
eligible, after deduction on payment on account.

2.     Bank charges on accounts

Where co-financing by the Structural Funds requires the opening of a separate account or
accounts for implementing an operation, the bank charges for opening and administering
the accounts, are eligible.

3.     Legal fees for advice, notary fees, the costs of technical or financial expertise and
accountancy or audit costs

These costs are eligible if they are directly linked to the operation are necessary for its
preparation or implementation or, in the case of accounting or audit costs, if they relate to
requirements by the managing authority.

4.     Costs of guarantees provided by a bank or other financial institutions

These costs are eligible to the extent that the guarantees are required by national or
Community legislation or in the Commission Decision approving the assistance.

5.     Fines, financial penalties and expenses of litigation

These expenses are not eligible.


Rule No 4:

Purchase of second-hand equipment

The purchase costs of second-hand equipment are eligible for co-financing by the
Structural Funds under the following three conditions without prejudice to the application
of stricter national rules:
a) the seller of the equipment shall provide a declaration stating its origin and confirming
that at no point during the previous seven years has it been purchased with the aid of
national or Community grants;
b) the price of the equipment shall not exceed its market value and shall be less than the
cost of similar new equipment; and
c) the equipment shall have the technical characteristics necessary for the operation and
comply with applicable norms and standards.



Rule No 5:
Purchase of land
1.     General rule

1.1    The cost of purchase of land not built upon shall be eligible for co-financing by
the Structural Funds under the following three conditions without prejudice to the
application of stricter national rules:

a) there shall be a direct link between the land purchase and the objectives of the
operation co-financed;
(b)     except in the cases described in point 2, the land purchase may not represent more
than 10% of the total eligible expenditure of the operation, unless a higher percentage is
fixed in the assistance approved by the Commission.

(c)    a certificate shall be obtained from an independent qualified valuer or duly
authorised official body confirming that the purchase price does not exceed the market
value.
1.2    In the case of aid schemes under Article 87 of the Treaty, the eligibility of land
purchase shall be assessed in terms of the aid scheme in its entirety.


2.     Environmental Conservation Operations

For environmental conservation operations, all the conditions indicated below shall be
met for the expenditure to be eligible:
- the purchase is the subject of a positive decision by the managing authority
- the land is devoted to the intended use for a period determined in that decision,
- the land is not for agricultural purposes save in duly justified cases accepted by the
managing authority,
- the purchase is made by or on behalf of a public institution or a body governed by
public law.

Rule No 6
:
Purchase of real estate

1.     General rule

The cost of purchase of real estate, i.e. buildings already constructed and the land on
which they are built, is eligible for co-financing by the Structural Funds if there is a direct
link between the purchase and the objectives of the operation concerned under the
conditions set out in point 2 without prejudice to the application of stricter national rules.

2.     Terms of eligibility

2.1     A certificate shall be obtained from an independent qualified valuer or duly
authorised official body establishing that the price does not exceed the market value and
either attesting that the building is in conformity with national regulations or specifying
the points which are not in conformity where their rectification by the final beneficiary is
foreseen under the operation.

2.2    The building shall not have received, within the previous 10 years, a national or
Community grant which would give rise to a duplication of aid in the event of co-
financing of the purchase by the Structural Funds.

2.3   The real estate shall be used for the purpose and for the period decided by the
managing authority.

2.4     The building may only be used in conformity with the objectives of the operation.
In particular, the building may be used to accommodate public administration services
only where such use is in conformity with eligible activities of the Structural Fund
concerned.


Rule No 7:

VAT and other taxes and charges


1.      VAT does not constitute eligible expenditure except where it is genuinely and
definitively borne by the final beneficiary or individual recipient within the aid schemes
pursuant to Article 87 of the Treaty and in the case of aid granted by the bodies
designated by the Member States. VAT which is recoverable, by whatever means, can not
be considered eligible, even if it is not actually recovered by the final beneficiary or
individual recipient. The public or private status of the final beneficiary or the individual
recipient is not taken into account for the determination whether VAT constitutes eligible
expenditure in application of the provisions of this rule.

2.     VAT which is not recoverable by the final beneficiary or individual recipient by
virtue of the application of specific national rules shall only constitute eligible
expenditure where such rules are in full compliance with the Sixth Council Directive
77/388/EEC on VAT.
3.     Where the final beneficiary or individual recipient is subject to a flat-rate scheme
under Title XIV of the Sixth Council Directive 77/388/EEC on VAT, VAT paid is
considered recoverable for the purposes of point 1.

4.    Community co-financing may not exceed total eligible expenditure excluding
VAT, without prejudice to the provisions of Article 29(6) of the General Regulation.

5       Other taxes and charges, (in particular indirect taxes and social security
contributions on wages and salaries), which arise from co-financing by the Structural
Funds do not constitute eligible expenditure except where they are genuinely and
definitively borne by the final beneficiary or individual recipient.
Rule No 8:

Venture capital and loan funds

1.     General rule

The Structural Funds may co-finance the capital of venture capital and/or loan funds or of
venture capital holding funds, (hereinafter funds), under the conditions set out in point 2.
For the purposes of this Rule, ”Venture capital funds and loan funds” mean investment
vehicles established specifically to provide equity or other forms of risk capital, including
loans, to small and medium-sized enterprises as defined in Commission Recommendation
96/280/EC as last amended by Recommendation of 6 May 2003. “Venture capital
holding funds” mean funds set up to invest in several venture capital and loan funds. The
Structural Funds‟ participation in funds may be accompanied by co-investments or
guarantees from other Community financing instruments.

2.     Conditions

2.1      A prudent business plan shall be submitted by the co-financiers or sponsors of the
fund specifying, inter alia, the targeted market, the criteria, terms and conditions of
financing, the operational budget of the fund, the ownership and co-financing partners,
the professionalism, competence and independence of the management, the funds‟ by-
laws, the justification and intended utilisation of the Structural Funds‟ contribution, the
investment exit policy and the winding-up provisions of the fund, including the
reutilisation of returns attributable to the contribution from Structural Funds‟. The
business plan shall be carefully appraised and its implementation monitored by or under
the responsibility of the managing authority.

2.2      The fund shall be set up as an independent legal entity governed by agreements
between the shareholders or as a separate block of finance within an existing financial
institution. In the latter case, the fund shall be subject to a separate implementation
agreement, stipulating in particular the keeping of separate accounts distinguishing the
new resources invested in the fund, (including those contributed by the Structural Funds),
from those initially available in the institution. All participants in the fund shall make
their contributions in cash.

2.3    The Commission cannot become a partner or shareholder in the fund.

2.4     The contribution from the Structural Funds shall be subject to the limits laid down
in Article 29(3) and (4) of the General Regulation.

2.5    Funds may invest only in SMEs at their establishment, early stages, (including
seed capital), or expansion and only in activities which the fund managers judge
potentially economically viable. The assessment of the viability should take into account
all sources of income of the enterprise in question. Funds will not invest in firms in
difficulty within the meaning of the Community Guidelines on State aid for rescuing and
restructuring firms in difficulty.

2.6     Precautions should be taken to minimise distortion of competition in the venture
capital or lending market. In particular, returns from equity investments and loans, (less
pro-rata share of the management costs), may be preferentially allocated to the private
sector shareholders up to the level of remuneration laid down in the shareholder
agreement, and after that, they shall be allocated proportionally between all shareholders
and the Structural Funds. Returns to the fund attributable to the Structural Funds‟
contribution shall be re-used for SME development activities in the same eligible area.

2.7     Management costs may not exceed 5% of the paid-up capital on a yearly average
for the duration of the assistance unless, after a competitive tender, a higher percentage
proves necessary.

2.8     At the time of the closure of the assistance, the eligible expenditure of the fund,
(the final beneficiary), shall be the capital of the fund that has been invested in, or loaned
out to, SMEs including the management costs incurred.

2.9     Contributions to funds from the Structural Funds and other public sources, as well
as the investments made by funds in individual SMEs, are subject to the rules on State
aid.
3.      Recommendations

3.1     The Commission recommends the standards of good practice set out in points 3.2
to 3.6 for funds to which the Structural Funds contribute. The Commission will regard
compliance with these recommendations as a positive element when it examines the
fund‟s compatibility with State aid rules. The recommendations are not binding for the
purposes of the eligibility of expenditure.

3.2  The financial contribution of the private sector should be substantial, and above
30%.

3.3    Funds should be large enough and cover a wide enough target population to
ensure that their operations are potentially economically viable, with a time scale for
investments compatible with the period of the Structural Funds‟ participation and
focusing on areas of market failure.

3.4    The timing of payments of capital into the fund should be the same for the
Structural Funds and the shareholders, and pro rata to the stakes subscribed.

3.5     Funds should be managed by independent professional teams with sufficient
business experience to demonstrate the necessary capability and credibility to manage a
venture capital fund. Management teams should be chosen on the basis of a competitive
selection process, taking into account the level of fees envisaged.
3.6     Funds should not normally acquire majority stakes in firms and should pursue the
objective of realising all investments within the life of the fund.


Rule No 9:

Guarantee funds

1.     General rule

The Structural Funds may co-finance the capital of guarantee funds under the conditions
set out in point 2. For the purpose of this Rule, ”Guarantee funds” mean financing
instruments that guarantee venture capital and loan funds within the meaning of Rule no
8 and other SME risk financing schemes, (including loans), against losses arising from
their investments in small and medium-sized enterprises as defined in Recommendation
96/280/EC as last amended by Commission Recommendation of May 2003. The funds
may be publicly supported mutual funds subscribed by SMEs, commercially-run funds
with private-sector partners, or wholly publicly financed funds. The Structural Funds‟
participation in funds may be accompanied by part-guarantees provided by other
Community financing instruments.

2.     Conditions

2.1     A prudent business plan shall be submitted by the co-financiers or sponsors of the
fund in the same way as for venture capital funds, (Rule no 8), mutatis mutandis and
specifying the target guarantee portfolio. The business plan shall be carefully appraised
and its implementation monitored by or under the responsibility of the managing
authority.

2.2      The fund shall be set up as an independent legal entity governed by agreements
between the shareholders or as a separate block of finance within an existing financial
institution. In the latter case, the “fund” shall be subject to a separate implementation
agreement, stipulating the keeping of separate accounts distinguishing the new resources
invested in the fund, (including those contributed by the Structural Funds), from those
initially available in the institution.

2.3    The Commission cannot become a partner or a shareholder in the fund.

2.4     Funds may only guarantee investments in activities that are judged potentially
economically viable. Funds shall not provide guarantee for firms in difficulty within the
meaning of the Community guidelines on State aid for rescuing and restructuring firms in
difficulty.

2.5    Any part of the Structural Funds‟ contribution left over after the guarantees have
been honoured shall be reused for SME development activities in the same eligible area.
2.6     Management costs may not exceed 2% of the paid-up capital on a yearly average
for the duration of the assistance unless, after a competitive tender, a higher percentage
proves necessary.

2.7     At the time of the closure of the operation, the eligible expenditure of the fund,
(the final beneficiary), shall be the amount of the paid-up capital of the fund necessary,
on the basis of an independent audit, to cover the guarantees provided including
management costs incurred.

2.8     Contributions to guarantee funds from the Structural Funds and other public
sources, as well as the guarantees provided by such funds to individual SMEs are subject
to the rules on State aid.

Rule No 10:

Leasing

1.     Expenditure incurred in relation to leasing operations is eligible for co-financing
under the Structural Funds subject to the rules set out in points 2 to 4.

2.     Aid via lessor

2.1     The lessor is the direct recipient of the Community co-financing, which is used
for the reduction of the lease rental payments made by the lessee in respect of assets
covered by the leasing contract.

2.1     Leasing contracts for which Community aid is paid shall include an option to
purchase, or provide for, a minimum leasing period equal to that of the useful life of the
asset to which the contract relates.

2.2     Where a leasing contract is terminated before expiry of the minimum leasing
period without the prior approval of the competent authorities, the lessor shall undertake
to repay to the national authorities concerned, (for credit to the appropriate fund), that
part of the Community aid corresponding to the remainder of the leasing period.

2.3    The purchase of the asset by the lessor, supported by a receipted invoice or an
accounting document of equal probative value, constitutes the expenditure eligible for co-
financing. The maximum amount eligible for Community co-financing must not exceed
that market value of the asset leased.
2.4    The purchase of the asset by the lessor, supported by a receipted invoice or an
accounting document of equal probative value, constitutes the expenditure eligible for co-
financing. The maximum amount eligible for Community co-financing shall not exceed
the market value of the asset leased.
2.5     Costs connected with the leasing contract, (notably tax, lessor‟s margin, interest
refinancing costs, overheads, insurance charges), other than the expenditure referred to in
point 2.4, are not eligible expenditure.

2.6     Community aid paid to the lessor shall be used in its entirety for the benefit of the
lessee by means of a uniform reduction in all the leasing rentals for the duration of the
leasing period.

2.7     The lessor shall demonstrate that the benefit of the Community aid will be
transferred fully to the lessee by establishing a breakdown of the rental payments or by an
alternative method giving equivalent assurance.

2.8    The costs referred to in point 2.5, the use of any fiscal benefits arising from the
leasing operation and other conditions of the contract should be equivalent to those
applicable in the absence of any Community financial intervention.


3.     Aid to lessee

3.1    The lessee is the direct recipient of the Community co-financing.

3.2    The leasing rentals paid to the lessor by the lessee, supported by a receipted
invoice or an accounting document of equivalent probative value, constitute the
expenditure eligible for co-financing

3.3      In the case of leasing contracts which include an option to purchase or which
provide for a minimum leasing period equal to the useful life of the asset to which the
contract relates, the maximum amount eligible for Community co-financing shall not
exceed the net market value of the asset leased. Other costs connected with the leasing
contract, (tax, lessor‟s margin, interest refinancing costs, overheads, insurance charges
etc.), are not eligible expenditure.

3.4     The Community aid in respect of leasing contracts referred to under point 3.3 is
paid to the lessee in one or more tranches in respect of leasing rentals effectively paid.
Where the term of the leasing contract exceeds the final date for taking account of
payments under the Community assistance, only expenditure in relation to leasing rentals
falling due and paid by the lessee up to the final date for payment under the assistance
can be considered eligible.

3.5    In the case of leasing contracts which do not contain an option to purchase and
whose duration is less than the period of the useful life of the asset to which the leasing
contract relates, the leasing rentals are eligible for co-financing by the Community in
proportion to the period of the eligible operation. However, the lessee must be able to
demonstrate that leasing was the most cost-effective method for obtaining the use of the
equipment. Where the costs would have been lower if an alternative method, (for
example hiring of the equipment), had been used, the additional costs shall be deducted
from the eligible expenditure.

3.6   Member States may apply stricter national rules for determining eligible
expenditure under points 3.1 to 3.5.

4.     Sale and leaseback

Leasing rentals paid by a lessee under a sale and leaseback scheme may be eligible
expenditure under the rules set out in point 3. The acquisition costs of the asset are not
eligible for Community co-financing.

Rule No 11:

Costs incurred in managing and implementing the Structural Funds

1.     General rule

Costs incurred by Member States in the management, implementation, monitoring and
control of the Structural Funds are ineligible for co-financing except as provided for in
point 2 and falling within the categories set out in point 2.1.

2.      Categories of management, implementation, monitoring and control expenditure
eligible for co-financing

3.      The following categories of expenditure are eligible for co-financing under
assistance under the conditions set out in points 2.2 to 2.7:

- expenditure relating to the preparation, selection, appraisal and monitoring of the
assistance and of operations (but excluding expenditure on the acquisition and installation
of computerised systems for management, monitoring and evaluation),
- expenditure on meetings of monitoring committees and sub-committees relating to the
implementation of assistance. This expenditure may also include the costs of experts and
other participants in these committees, including third-country participants, where the
chairperson of such committees considers their presence essential to the effective
implementation of the assistance,
- expenditure relating to audits and on-the-spot checks of operations.

3.1     Expenditure on salaries including social security contributions is eligible only in
the following cases:
a) civil servants or other public officials seconded by duly documented decision of the
competent authority to carry out tasks referred to in point 2.1;

b) other staff employed to carry out tasks referred to in point 2.1.
The period of secondment or employment may not exceed the final date for the eligibility
of expenditure laid down in the decision approving the assistance.

3.2    The Structural Funds‟ contribution to the expenditure under point 2.1 shall be
limited to a maximum amount which will be fixed in the assistance approved by the
Commission and shall not exceed the limits set out in points 2.4 and 2.5.


4.     For all assistance, except Community Initiatives, the PEACE II special
programme and innovative actions, the limit shall be the sum of the following amounts:

- 2.5% of that part of the total Structural Funds‟ contribution less than or equal to €100
million;
- 2% of that part of the total Structural Funds‟ contribution which exceeds €100 million
but is less than or equal to €500 million
 - 1% of that part of the total Structural Funds‟ contribution which exceeds €500 million
but is less than or equal to €1000 million;
- 0.5% of that part of the total Structural Funds‟ contribution which exceeds €1000
million.

4.1     For Community Initiatives, innovative actions and the PEACE II special
programme, the limit shall be 5% of the Structural Funds‟ total contribution. Where such
assistance involves the participation of more than one Member State this limit may be
increased to take account of higher costs of management and implementation and will be
fixed in the Commission‟s decision.

4.2    For the purposes of calculating the amount of the limits in points 2.4 and 2.5, the
Structural Funds‟ total contribution shall be the total fixed in each assistance approved by
the Commission.

4.3    The implementation of points 2.1 to 2.6 of this Rule shall be agreed between the
Commission and the Member States and laid down in the assistance. The rate of the
contribution will be fixed in accordance with Article 29(7) of the General Regulation. For
the purposes of monitoring, the costs referred to in 2.1 will be the subject of a separate
measure or sub-measure within technical assistance.


5.     Other expenditure under technical assistance

5.1     Actions which can be co-financed under technical assistance, other than those set
out in point 2 (such as studies, seminars, information actions, evaluation, and the
acquisition and installation of computerised systems for management, monitoring and
evaluation), are not subject to conditions set out in points 2.4 to 2.6. Expenditure on the
salaries of civil servants or other public officials in carrying out such actions is not
eligible.
6.     Expenditure by public administrations relating to the execution of operations

       The following expenditure of public administrations is eligible for co-financing
outside technical assistance if it relates to the execution of an operation, provided that it
does not arise from the statutory responsibilities of the public authority or the authority‟s
day-to-day management, monitoring and control tasks.

a) costs of professional services rendered by a public service in the implementation of an
operation. The costs must be either invoiced to a final beneficiary, (public or private), or
certified on the basis of documents of equivalent probative value which permit the
identification of real costs paid by the public service concerned in relation to that
operation.

b) costs of the implementation of an operation, including the expenditure related to the
provision of services, borne by a public authority that is itself the final beneficiary and
which is executing an operation on its own account without recourse to outside engineers
or other firms. The expenditure concerned must relate to expenditure actually and directly
paid on the co-financed operation and must be certified on the basis of documents which
permit the identification of real costs paid by the public service concerned in relation to
that operation.

Rule No 12:

Eligibility of expenditure depending on the location

1.     General rule

As a general rule, operations co-financed by the Structural Funds shall be located in the
region to which the assistance relates.

2.     Exception

2.1     Where the region to which the assistance relates will benefit wholly or partly from
an operation located outside that region, the operation may be accepted by the managing
authority for co-financing, provided the conditions set out in points 2.2 to 2.4 are
satisfied. In other cases an operation may be accepted as eligible for co-financing under
the procedure in point 3. For operations financed under the Financial Instruments for
Fisheries Guidance (FIFG), the procedure under point 3 must always be followed.

2.2   The operation must be located in a NUTS III area of the Member State
immediately adjacent to the region to which the assistance relates.

2.3    The maximum eligible expenditure of the operation is determined pro rata to the
proportion of the benefits from the operation which it is foreseen will accrue to the region
and shall be based on an evaluation by a body independent of the managing authority.
The benefits shall be assessed taking account of the specific targets of the assistance and
its expected target. The operation cannot be accepted for co-financing where the
proportion of benefits is less than 50%.

2.4    For each measure of the assistance, the eligible expenditure of the operations
accepted under point 2.1 should not exceed 10% of the total eligible expenditure of the
measure. In addition, the eligible expenditure of all operations in the assistance accepted
under point 2.1 should not exceed 5% of the total eligible expenditure of the assistance.

2.5     Operations accepted by the managing authority under point 2.1 shall be indicated
in the annual and final implementation reports of the assistance.

3      Other cases

In the cases of operations located outside the region to which the assistance relates but
which do not fulfil the conditions of point 2, and of operations financed under the FIFG,
the acceptance of the operation for co-financing shall be subject to prior approval by the
Commission on a case-by-case basis following a request submitted by the Member State,
taking into account in particular the proximity of the operation to the region, the level of
benefit to the region which can be foreseen, and the amount of the expenditure in
proportion to the total expenditure under the measure and under the assistance. In the
case of assistance relating to the outermost regions, the procedure in this point will be
applicable.



B.5 PROJECT CONTRACTING

B.5.1 Signing project contracts



Example 1 – Possible project contract model (adapted Hungarian template)


       Grant contract (sample)
       Reference number: ………… …………

       GRANT CONTRACT

       Established by and between

     (name) ………… …………
     (address) ………… …………
     (on behalf of the Managing Authority for ……………….., Government of
Romania) and
       (name) ………… …………
       (address) ………… …………
       tax register number ………… …………
       bank account number ………… …………
       as beneficiary (hereinafter: Beneficiary)

       with the contents as stated below.

       I. Grant subject

1.) The contents of this contract concern the part financing of the costs of the project
titled ………… ………… , registered under the reference number ………… …………
(hereinafter: project), granted as non-repayable direct assistance.

   The project start date is ………… …………, its completion date is …………
………… .

       Grant cannot be paid in relation to expenditure on ………… ………… .
       Grant can only be paid in relation to expenditure on ………… ………… .
       referred to in the project application:……

       2) Total project costs including non-recoverable VAT:……

       3) Location of project implementation:……

       4) Starting date …….., and end date ……… of project implementation.

       5) Project must be operated at least 5 years from the end day of implementation.

       II. The source, amount and payment of grants

       1) Grant will be paid from the following national and European funds:
•      …………
•      ………… .

      2) The amount of grant payable is calculated as a proportion of eligible
expenditure including non-recoverable VAT up to a level of …… %, but ……… at the
most

       3) After the approval of payment claim and performance the Sponsor remits the
proportional amount of the eligible costs including non-recoverable VAT to the account
No. ………. of the Beneficiary.

       4) The Beneficiary can solely account for the costs provided in the list of eligible
costs within the standard application package.
       III. Project progress report and claim for grant payment

        1) Claims for grant payment must be submitted quarterly. Each claim must cover
the three months in question (the first claim must cover the period till the end of the third
month from the date of signing the grant contract). It shall be submitted within 15
calendar days counted from the last calendar day of the preceding quarter. Failure to
adhere to this schedule may result in the termination of grant.

       The Beneficiary has to submit his/her claim for grant payment for the costs arisen
within 15 days after the written notice of the Managing Authority/Intermediate Body.
Arisen costs that are not included in the claim cannot be accounted for later on.

       Claims must be accompanied by original invoices and the documents certifying
the payment of the invoices, also the concerned certificates, documents, papers.

        Each claim must also be accompanied by a detailed report (project progress
report) describing progress made against the quantified targets set out in this grant
contract. The project progress report must be submitted every quarter even if no claim for
grants is made.

       For projects with a grant not more than € 100,000 or projects with duration of not
more than 6 months, only a single claim and project progress report must be submitted
when the project is completed.

       2) Once the Intermediate Body has received the fully documented claim, grant
will normally be paid, or the claim rejected, within 30 calendar days, unless it is
necessary for the Intermediate Body to seek further information to support the claim.

       3) After final payment, the Beneficiary must submit project progress reports
annually on quantifiable targets that can only be met after final payment. These reports
must include the implementation of the following quantifiable objectives: …………
………… .

        4) During the determination of the contract the Beneficiary submits a copy of
his/her final report (if obliged to prepare one) until May 31st of the current year.

       IV. Grant availability

The grant can only be utilized for the implementation and implementation cost of the
project for the amounts provided for in the budget detailed in Annex 1 and for actions
defined within the application.

The part of the grant not utilized according to the schedule defined in Annex 1 can only
be used up in case of the modification of this contract. The sponsor reserves the right to
refuse the Beneficiary‟s request regarding modifications.
The savings achieved against the planned budget proportionally reduces the amount of
support. Contingent added costs are not refunded by the Managing
Authority/Intermediate Body.

       V. Procurement

        1) Relevant public procurement regulations have to be complied with. Within the
coverage of the procurement directives, contracts above certain limits are required to be
advertised in the Official Journal (OJ) of the European Communities. Bids for contracts
must be assessed on an objective basis and contract awards should be published in the OJ.
Grant will be reclaimed if it is found subsequently that the procurement rules have not
been observed.

       VI. Information and Publicity

       1) Name of the Beneficiary, subject and amount of grant awarded will be
published by the Sponsor.

       2) Information and publicity measures for the general public shall include
(according to Commission Regulation No 1159/2000):

        a) in the case of infrastructure investments whose total cost exceeds €1 million:
        - billboards erected on site,
        - permanent commemorative plaques for infrastructures accessible to the general
public, to be installed (congress centres, airports, stations etc.).
        Representative of the Managing Authority/Intermediate Body have to be invited
for major milestones of the realisation of the investment.

        b) in the case of part-financed training and employment measures:
        - measures making beneficiaries of training schemes aware that they are
participating in an operation part-financed by the European Union and the state;
        - measures making the general public aware of the role played by the European
Union and the state in relation to operations financed in the field of vocational training,
employment and the development of human resources.

        c) in the case of investments in business, measures to develop local potential and
all other measures receiving financial assistance from the European Union and the state:
        - information for beneficiaries about their participation in an operation part-
financed by the European Union and the state in one of the ways described below.
        Representative of the Sponsor have to be invited for major milestones of the
realisation of the investment.

       3) Rules on the technical means of information and publicity

       a) Billboards
        Billboards shall be erected on the sites of projects involved in part-financed
infrastructure investments whose volume exceeds the amounts given above. Such
billboards shall include a space reserved for the indication of the European Union‟s and
the state‟s contribution. Billboards must be of a size which is appropriate to the scale of
the operation. The size of the billboard has to be in accordance with the scale of the
investment. The section of the billboard reserved for the European Union‟s and the state‟s
contribution must meet the following criteria:
        - it shall bear the European and the national emblem and the following text, to be
set out as shown below:



        Project part-financed by
        the European Union and
        the Romanian state
        - the emblems shall be presented in accordance with the current specifications;
        - the lettering used to indicate the financial contribution of the European Union
must be the same size as the lettering for the national indications, but fonts can be
different;
        - the Funds concerned may be mentioned;
        - the section of the billboard reserved for the European Union‟s contribution shall
take up at least 25 % of the total area of the billboard.

       Billboards shall be removed not later than six months after completion of the
work and replaced by a commemorative plaque.

       b) Commemorative plaques

       Permanent commemorative plaques shall be placed at sites accessible to the
general public (congress centres, airports, stations, etc.) which represent projects part-
financed by the European Union and the state. In addition to the emblems, such plaques
must indicate the European Union‟s and the state‟s contribution and may mention the
Funds concerned.

     In the case of physical investments in commercial business premises,
commemorative plaques shall be installed for a period of one year.

         If a beneficiary decides to erect billboards or commemorative plaques, produce
publications or undertake any other information measure regarding projects below the
financial thresholds indicated above, the European Union‟s and the state‟s contribution
shall likewise be indicated.

       c) Posters
        In order to inform participants and the general public of the role played by the
European Union and the state in the development of human resources, vocational training
and employment, investment in firms and rural development, posters shall be displayed
indicating the European Union‟s and the state‟s contribution and possibly the Funds
concerned on the premises of bodies implementing or benefiting from measures covered
by this contract.

       d) Information and communication material

        Publications (such as booklets, leaflets and newsletters) about regional assistance
part-financed by the European Union and the state shall contain a clear indication on the
title page of the European Union‟s and the state‟s participation and, where appropriate,
that of the Funds concerned as well as the European and the national emblem.
Publications shall include references to the body responsible for the information content
and to the managing authority designated to implement the assistance package in
question.

       In the case of information made available by electronic means (websites,
databases for potential beneficiaries) or as audio-visual material, the principles set out
above shall apply by analogy. Websites concerning the Structural Funds should
       - mention the contribution of the European Union and, if appropriate, that of the
Fund concerned at least on the home page,
       - include a hyperlink to the other European Commission websites concerning the
Structural Funds.

       e) Information events

        The organisers of information events such as conferences, seminars, fairs and
exhibitions in connection with the implementation of operations covered by this contract
shall make the European Union‟s contribution to these assistance packages explicit by
displaying the European flag in meeting rooms and using the emblem on documents.

       VII. Documentation

        1) According to Article 38.6, Council Regulation No 1260/1999, documents
relating to the implementation of the project and its financing should be retained until
three years after the European Community has made the final payment in respect of the
programme under which the project is funded. Beneficiaries are therefore unlikely to be
able to destroy their documents before the end of 2019.

        Wherever possible, original documents or authenticated copies should be kept in a
separate folder. In case it is not possible to respect this rule, the folder should contain
clear information on the location of the original documents making sure that they are
easily available.
        The folder should contain the following documents or information on their
location:
        - copy of application form and required annexes,
        - copy of additional information or changes to the application,
        - grant contract, and modifications (in case the contract have been modified)
        - correspondence with the Managing Authority/Intermediate Body,
        - copy of project progress reports and required annexes
        - original of invoices and other annexes to claim & report forms,
        - documents of public procurement, if required,
        - evidence of publicity measures taken, if required (e.g. brochures, photos of
billboards),
        - any other evidence on background and rationale of the project (e.g. feasibility
study, needs analysis)

        2) As well as being made available to Romanian audit teams, the Beneficiary
must produce the original documents or verified true copies when required to do so by
the European Commission or the European Court of Auditors. Failure to produce the
original documents or satisfactory agreed substitutes could result in repayment of grant.

       VIII. Audit

       1) The Managing Authority/Intermediate Body and the organisations assigned by
law - the Managing Authority‟s Audit team, the Romanian Court of Accounts, the
European Commission and the European Court of Auditors - have the right with a
minimum of one working day‟s notice, to inspect the appropriation of grants used for the
implementation of the project including on-the-field inspections.

        2) The Beneficiary puts the documents, certifications, books, registers linked to
the implementation of obligations under this contract, at disposal during the period of
inspection, and provides information on facts and circumstances required for the
inspection.

       IX. Breach of contract and cancellation

1) The Managing Authority is entitled to request withholding of payments for the
maximum of 60 days, if the Beneficiary does not fulfil the obligations under this contract
or under rules defined in relevant laws. If the Beneficiary should maintain the violation of
the contract or laws the Managing Authority/Intermediate Body cancels the contract.

2) The Managing Authority/Intermediate Body cancels the contract in the following
cases:
•      if any of the information provided in the application for grant, in supporting or
subsequent correspondence or in claims for grant payments and project progress reports
is found to be substantially incorrect or incomplete;
•       there is a material change in the nature, implementation, scale, costs or timing of
the project such that the project no longer complies with the description set out in the
application and any amendments that may have been agreed subsequently;
o       Note: for projects awarded grant of up to €500,000, a material change is a one of
10% or more over the lifetime of the project to an individual expenditure category, the
expenditure profile and quantifiable targets. For larger projects, the Beneficiary should
seek advice from the Managing Authority/Intermediate Body.
•       the future of the project is in jeopardy, or there is unsatisfactory progress towards
completing the project; defined as a failure to meet the aims, forecast quantified targets or
profile of expenditure;
•       during a 5 year period after its implementation, the project undergoes substantial
change defined as being used for purposes other than those specified in the application or
having a change of owner without prior agreement of the Managing
Authority/Intermediate Body;
•       the Beneficiary has not followed the EC procurement directives for contracts
within scope, or has not demonstrated that contracts outside the scope of the EC
procurement directives were awarded after a satisfactory competitive tender process;
•       the Beneficiary fails to provide information about the project requested by the
Managing Authority‟s Audit team, the Romanian Court of Accounts the European
Commission or the European Court of Auditors or their representatives;
•       the Beneficiary fails to fulfil any of the obligations under this contract.

3) Should the Beneficiary fail to fulfill his/her obligations under the contract, he/she is
required to repay all or a proportional part of the utilized grant.

4) The Beneficiary must tell the Managing Authority/Intermediate Body in writing
immediately if for any reason
•      the project should fail, or is in jeopardy,
•      meets lasting difficulties,
•      the timing of the project is late so that the project no longer complies with the
description set in the contract,
•      there has been a change in the details of this contract.

5) If an associated Structural Fund project of the Beneficiary becomes subject to
investigation, payment of grant for this project may be suspended whilst the necessary
actions are carried out on the project in question by the appropriate body.

6) If the project cannot be implemented because of unforeseen circumstances, the
contract becomes extinct. If the project can be implemented through the modification of
the contract, the Beneficiary has to initiate modifications from the Managing
Authority/Intermediate Body.

       X. Securities
        1) The Beneficiary authorises the Managing Authority in respect of each of
his/her bank accounts for debiting his/her bank account by prompt collection order if the
Beneficiary does not satisfy any of the obligations under this contract.

       The Beneficiary accepts, that the statement on desistance shall be delivered
simultaneously with the submission of the prompt collection order.

        A prerequisite of payments is the submittal of the authorization letter according to
point 1 of the account executive bank of the Beneficiary to the Managing Authority.

      2) The Beneficiary lets a mortgage registered on the basis of a mortgage deed put
down in a public instrument concerning the asset ………… ………… for the benefit of
the Managing Authority/Intermediate Body.

       3) Grant can be transferred only if
       - the Managing Authority is authorised for prompt collection, and
       - the mortgage is registered by the Land Registry or by the Chamber of Notaries.

       XI. Settlement of legal disputes

       Any legal dispute arising out of or in connection with this contract – depending on
the sum in dispute – shall be settled by the High Court of Romania.

       This contract has been prepared in 3 original copies of … pages. The enclosed
attachments of … inseparably constitute part of the contract.


       Annexes:
•      Budget
•      Outputs, results and impacts
•      Authorisation(s) for prompt collection
•      Mortgage contract/ bank guarantee/ insurer‟s guarantee



       Done at, ………… …………

       ………… …………         ………… …………
       Beneficiary Sponsor

       Grant contract Annex 1: Budget

       Costs (Lei)
       year            2007           2008           2009            2010           2011
       2012            2013           2014           2015            Total
land acquisition

building and construction

plant and machinery

intangible assets

material investments

personal expenditure

non-recoverable VAT

Total


Funding (Lei and %)
grant applied for
other grants (please specify)
bank loans
other sources (please specify)
applicant‟s funds
in kind contribution
total                          100%


Annex 2: Outputs, results and impacts

Quantifiable targets
year           Baseline               2007          2008          2009
2010           2011          2012            2013          2014          2015
Total
(output indicator 1)


(output indicator 2)


(result indicator 1)


(result indicator 2)
       (impact indicator 1)


       (impact indicator 2)


       (project specific indicator 1)


       (project specific indicator 2)




C. FINANCIAL MANAGEMENT AND CONTROL

C.1. VERIFYING DELIVERY OF OPERATIONS


C.1.1. Verification of Beneficiaries‟ expenditure claims



Example 1 – Structural Funds claim form and associated guidance note – Objective 1,
2000-2006 (Wales, UK)


See embedded pdf files below




C.1.2. – On the spot verification of operations


Example 1 – Extracts from UK guidance package for on the spot verifications:
Template letter to beneficiary informing of an on the spot visit;
List of project documentation required for an on the spot visit
Advice for teams carrying out on the spot visits
Template of on the spot visit record




PROJECT DOCUMENTATION REQUIRED ON A SITE VISIT

Any of these documents may be requested for viewing during a monitoring visit. Not all
need to be checked.


       Available     Checked Unsatisfactory Comments
PROGRAMME MANAGEMENT DOCUMENTATION
Grant Contract / Addenda   •
•
•

Monitoring Information to verify project targets      •
•
•

General Programme Management Documentation            •
•
•

Details of any agreed amendments      •
•
•

Time sheets (where appropriate)       •
•
•

FINANCE
Accounting records     •
•
•

List of assets purchased under ERDF           •
•
•

Paid invoices •
•
•

Bank Statements           •
•
•

PUBLICITY RECORDS
Publicity Material •
•
•

EU logos on procured items •
•
•




ADVICE FOR TEAMS CONDUCTING ON THE SPOT VERIFICATIONS


Preparing for the visit

Prior to the meeting, familiarise yourself with the available documentation. As a
minimum, you should have copies of the application forms, as well as copies of the offer
letter and any correspondence that refers to the project. If it is an external partner or
contractor it may be useful to obtain a copy of their most recent annual report and
accounts in advance – use your discretion to decide on whether or not to request these.
Write down any questions that come to you while you are reading the papers.

The Beneficiary should have agreed the date and time of the visit and should have some
warning as to what to expect and what paperwork will need to be produced. So they
should know that they will be asked to produce original receipts to back up a particular
figure. It is a good idea to confirm the monitoring arrangements in writing with the
applicant, well in advance.

Who and what needs to be available on the day of the visit

Personnel

       Personnel who should be available on the day include
       The project manager
       Person(s) responsible for the activity of the project
       Person responsible for general record-keeping for the project
       Person responsible for the financial record-keeping of the organization
Supporting documentation

Some or all of the following should be available
      The project application
      The specification of the project and/or the workplan
      All general record-keeping documentation
      All financial record-keeping documentation
      Written methods of apportionment of staff and overhead costs
      Last set of audited accounts
      Organisation‟s financial records including salary records
      Last set of management accounts

Carrying out the visit

1.     Begin by finding out about the organization as a whole, or, for very large
organisations, the department as a whole. This is necessary because they may be trying to
fund non-project activity with EU project funding and you need to be able to judge
whether the levels and methods of apportionment are reasonable.

2.     Ask which of the staff have been trained in EU funding requirements.

3.      Ask about their financial systems and housekeeping. Do they have a simple cash
book system, a manual double entry or a computerised system? Is the cash book
reconciled with the bank statement on a regular basis? Is the petty cash balanced
regularly? Are regular meaningful financial reports produced? Do they have an organised
system for filing numbered invoices and receipts? Are these originals, and are they easily
retrievable? For larger organisation is it possible to extract information from their
complex financial system

4.     Do some testing of the general records using your documentation checklist

5.      Check that the project has systems in place for financial reporting, so that they
can monitor expenditure. The systems must be adequate for the needs of EU funding.
You must understand their method of apportioning staff time and overhead costs and that
this is based on project activity as a proportion of the activity of the organisation as a
whole

6.      Make sure that they are able to report against the headings in the financial section
of the EU application – that is, they have the system set up to do this. It is also important
to check that they are clear about exactly what costs they are able to claim – and at what
level – and that these are all eligible.

7.     Also check that co-financing (and revenue income where it cannot be used as co-
financing) is being provided at the levels agreed in the application. Make sure that any in-
kind funding is covering EU eligible costs and that this is properly documented. There
will almost certainly be a limit on the level of in-kind match funding that can be used –
check this carefully with current Commission regulations.

8.      Question them on how the project activity is progressing and whether they are
likely to deviate from the plan outlined in the application, partner agreement or contract.

Overall action plan for on the spot visits

Action By when          Notes
1.Select a project for a monitoring visit.              This could be for a range of reasons,
but is likely to have been discussed in advance with colleagues.
2.Telephone to arrange a date and time to visit         About 2 weeks in advance
         Request any directions or other necessary practical information.
3. Send letter to confirm date and time and to confirm areas for discussion and evidence
that may be examined.           Within 2 days of phone call Ensure copy of letter goes on
project file and that Project Officer is informed
4. Prepare for the visit using the project file and the database. Start to fill in the pro forma
         By the day prior to the visit Areas with gaps that will need particular discussion
may be identified here. Also, areas for potential concern may be raised.
5.Carry out the visit           Use pro forma and checklist document for taking notes and
ensuring that each area – and any particular questions raised in research – are covered.
Ensure before leaving that the Beneficiary is aware of the main areas that may require
action.
6.Write up the report Within 2 days of the visit        Recommendations for action to be
taken should be included and be very specific, achievable and with a timescale.
7. Send the report out to the Beneficiary along with a copy of the Action form to be filled
in by the Beneficiary. Also give a copy of the report to relevant persons within the IB
such as the Project Officer. Within 3 days of the visit        Clear deadline for the
Beneficiary to respond to the recommendations as to how they will be met and by when.

Ensure a copy of the monitoring report goes to the Project Officer and is also on the
project file
8. Transfer a copy of the recommendations onto the monitoring visits record sheet.
        At the same time as 7. This gives a summary of all recommendations for all
projects and tracks the completion of the agreed action.
9.Follow up recommendations            According to agreed timescale  Spreadsheet
will assist in this. Will probably need to see subsequent claims.



Dealing with problems or tricky issues during on the spot visits

This section highlights some common problems or tricky issues that may come up during
an on-site monitoring visit along with practical guidance on what to do if you come
across such a situation.
Is this the project we contracted?

One of the key elements we need to establish as part of the monitoring activity is whether
the applicant is delivering the project we contracted with and that the applicant is clear
about the contractual terms and conditions and the activity that is eligible and approved.
Often projects develop during appraisal with ineligible activity being excluded or other
activities being modified. Misunderstandings about what the project is or should be can
occur when the individuals involved in developing the project move on to new positions,
new roles, etc. It is often easy for the applicant to “slip back” to their original project and
undertake activities that are ineligible or otherwise inappropriate.

If there is a difference in understanding of what the project is this should be sorted as a
matter of urgency. The application and other correspondence on the file should indicate
what project we think we have contracted. We can then agree with the applicant what
activities are eligible, what activities are ineligible and what activities need to be
modified before they can be considered as part of the project. This should all be
confirmed, in writing, to the applicant and they should be given adequate time to make
any necessary changes. It would be sensible to undertake a follow-up visit soon after the
agreed deadline for implementing any necessary changes to ensure the project is now
back on course.

Are the contract conditions complied with?

Has the applicant complied with all conditions in the offer letter?

If not, are the conditions still relevant? If the conditions are no longer relevant
consideration should be given to issuing an addendum to the contract to remove
inappropriate or out-of-date conditions.

If the conditions are still relevant what does the applicant intend to do to comply with the
conditions?

Any areas of concern should be confirmed to the applicant in writing and the applicant
should be given sufficient time to address such issues. The applicant should be required
to provide evidence that the necessary action has been taken and consideration should be
given to undertaking a follow-up visit to establish that this is the case.

Is project delivery against contract?

Is the project progressing in accordance with the agreed profile for both spend and
outputs/results and are the outputs and results being properly accounted for?

If project progress is falling behind schedule or not delivering at all ask the applicant
probing questions such as
        why things are not going according to plan ?
        what has changed since the project was approved ?
       can they still deliver the original project or does it need to change?
       what steps are being taken to make up lost ground ?
       do they need support ?

Encourage the applicant to be realistic in his/her assessment of the situation and try to
separate the different issues so that you can deal more easily with each one. Do not
accept vague reassurances.

Try to separate the different issues so that you can deal more easily with each one. Agree
a re-profiling of the project or a reduction in the size and scope of the project and the
corresponding grant, if required.

If the project is ahead of schedule there may be scope to capture more outputs and results
or extend the project over a longer period and increase the grant available in return for a
corresponding increase in outputs and results.

Outputs definitions correctly understood and applied?

As part of the monitoring activity we should satisfy ourselves that outputs and results are
being properly recorded, in accordance with relevant output guidance. Often applicants
do not correctly understand the definitions and sign up to outputs and results targets,
which they later cannot deliver. At times applicants fail to correctly count the outputs –
they either underestimate or double count the outputs they are delivering. In some cases
they might be applying the definitions incorrectly and reporting outputs that they are
actually not delivering. For instance there is often lack of clarity as regards what
constitutes a „business assisted‟ or „capacity building project‟.

Where outputs and results are not being properly applied, recorded or reported we should
highlight this issue to the applicant and agree what action they should take to rectify the
situation. Consideration should be given to undertaking a follow-up visit to confirm that
the necessary action has been taken.

Are adequate records being kept?

Part of the monitoring process is to confirm that adequate records are being kept and that
expenditure claimed is eligible. The offer letter details the requirements for keeping
documentation and ensuring adequate audit trails exist. During the monitoring visit
monitoring officers should select a representative sample of items from recent claims and
ask the applicant to demonstrate the audit trail for that item(s). In particular outputs and
results reported by the applicant should be backed by proper evidence for instance
businesses assisted claimed by the project should be backed by time sheets / invoices
from consultants.

If discrepancies are found in record keeping processes these should be confirmed to the
applicant in writing stating exactly what they should do in the time available and what
will happen to them if they do not comply (e.g. that no further payments will be made
and steps will be taken to recover monies paid to date). The applicant should be given
adequate time to address these issues whereupon a follow-up visit should be undertaken
to check that the necessary changes have been implemented. In areas of particular
concern consideration should be given to referring the project to the audit team who can
then decide if a full audit might be appropriate.

Compliance with regulations?

The offer of Structural Funds assistance requires the applicant to comply with various EC
regulations covering areas such as:

        Record keeping

Article 88 of the draft General Regulations requires applicants to keep adequate records
of all transactions relating to assistance from Structural Funds programmes. Applicants
are required to keep such records for a period of three years after the European
Commission has made a final payment on the structural funds programme. As part of the
monitoring process checks should be undertaken to establish the adequacy of the
applicants‟ record-keeping systems.

In grant schemes, the final recipient‟s invoices need to be retained and this should be
checked. Any areas of concern should be confirmed to the applicant in writing and the
applicant should be given sufficient time to address these issues. A follow-up visit
should be undertaken to confirm that adequate record-keeping arrangements are now in
place.

   b. Public Procurement

The offer letter details the various regulations applicants must comply with. These cover
public works (Directive 93/37/EEC amended by Directive 97/52/EC), public supplies
(Directive 77/62/EEC amended by Directive 93/36 EC and 97/52/EC), public services
(Directive 92/50, as amended by Directive 97/52/EC) and utilities (Directive
90/531/EEC).

  c.   Publicity

Section II of the Implementing Regulation details the commission‟s publicity
requirements. These requirements are also summarised in the offer letter. Checks should
be made to ensure the applicant is meeting its contractual obligation to publicise
structural Funds assistance for a project.

       d. State Aids

What, if any, state aids issues were raised during appraisal.
If the project was approved on the basis of a block exemption or any other approved
scheme was the block exemption/ specially approved scheme ever lodged? If so, is there
a copy of the block exemption/ specially approved scheme on file? Make sure the
applicant understands their ongoing commitments to prepare annual reports, etc.

If the project was approved on the application of de minimis what records is the applicant
keeping to ensure, as far as possible, that they are not breaching de minimis aid levels?

Any failure to comply with any of these regulations must be resolved. The applicant
should be given an opportunity to suggest how they will comply with the
regulations/directives and should supply evidence that demonstrates the necessary
changes have been made. Consideration should be given to undertaking a follow-up visit
to confirm the necessary changes have been made.

Something about the project not quite right ?

On-site monitoring visits can be tricky as the applicant may try to distract you with free
lunch, a tour of the site or meeting with beneficiaries. Do not get side-tracked. Try to be
clear and do not accept any excuses for the following:
        Missing documentation
        Invoices for large amounts of money with no clear indication of the value of the
product or service
        Absent records (eg “they are with the auditors” or “the administration officer has
taken the file home”)
        Key staff are absent and no-one else is able to answer questions
        Unauthorised changes to project activity

Also make sure that the applicant is clear that your visit is not an audit or inspection
check. Sometimes the applicant might try to get your approval for using certain
accounting methodologies or record keeping practices. Remember you are not a financial
expert and are not expected to comment on such issues. If you are not sure, but suspect
that something is wrong, then you may decide that a follow up visit by yourself or the
audit team is required. Don‟t allow applicants to trick you into rubber- stamping their
overhead apportionment methodologies or other accounting practices or systems /
processes.

Feedback and reporting

You should give the project being verified verbal feedback on the day itself, and follow
up with a letter and written report. The letter and report should be as supportive as
possible and should specify any actions which the project must take in order to comply
with the Commission regulations and in accordance with the offer letter. You should give
them a time-scale in which to bring their records or practices up to standard and ask for
confirmation in writing when this has been done.
Preventing Fraud

If you suspect that fraud is taking place in a project that you have responsibility to
monitor, you must immediately seek advice from the MA on what action to take but in
the meantime suspend all payments to the project.



Template of the monitoring visit record

Reference Data
Programme
Date of Visit
Address of Premises Visited
Duration of Visit

Project Details
Project Title
Reference Number
Sub-Region
Priority
Measure

Monitoring Record
Date of last monitoring visit
Pending Actions from previous visits


Names of Personnel present during Visit
Name Job Title
      GO monitoring officer
      Project Personnel




Project Timeline
Start Date (offer letter)
Actual Start Date
Completion Date (offer letter)
Anticipated Completion Date
Reasons for Slippage
Implications


Action to be taken
Expenditure
        Offer Letter* Claimed to date*       Final Expected         Difference
Eligible Expenditure
Structural Funds
Implications


Actions to be taken




Project Management and Administration
Are the systems to ensure the effective implementation of the project in place as stated in
the application? Detail any alterations




Financial Management
What arrangements are there to control and monitor project expenditure? Detail any
problems.


List of invoices checked against claims (details such as invoice number, date and
amount cross referenced to claim)


Physical Progress and indicators
Comment on evidence, quality and eligibility of outputs/ impacts.

Also, make note of any additional outputs & results that the project may be achieving but
is not reporting

Are zero/baseline measurements made, when appropriate (eg number of employees in a
company at the start of the Programme)


Partnership
What role has each partner actually played in the implementation of the project?
How are the match funding arrangements working
Partner Funding       Contribution to Outputs        Indirect Support



Linkages
Provide details of how this project has integrated with other publicly funded projects,
how this has benefited the project and what future linkages are planned




Publicity
Has the project fulfilled its commitment to publicise the EU‟s contribution to this project
as stated in the application? Check evidence of this


Tendering and Procurement Procedures
Has the applicant adhered to public procurement regulation? Check evidence of this




Horizontal Themes
Horizontal Cross Cutting Theme Indicators – has the applicant agreed a set of horizontal
cross cutting theme outputs and results, have they the necessary systems in place, are they
recording them in the correct way? etc.
   Check on key horizontal theme aspects of application – are they delivering? (i.e.
where they state that they will do x where possible).
   Due to the inclusion of the horizontal themes in the programme, has the applicant
done more on these areas than they may         normally have done (i.e. is there any added
value?)? Give details.
   Has the applicant encountered any barriers to addressing the horizontal themes? Give
details.
Equal opportunity

ICT

Sustainability & Environmental




General Comments
Overall summary of the observations and conclusions

Are there any examples of good practice that could be publicised or promoted?



Action Points
Action points and deadline for response      Who is responsible for these action points?
       Action points completed?


Signatures:


Monitoring Officer:                                         Date:

Managing Authority      must have systems in place to check that action points are
implemented


Checklist of documentation

General Records
Criteria       Evidence Required To check           Satisfactory Comments            /
Description of Items Checked (if not included in main report)
                       Yes No
Project Specification & Workplan Detailed written plan of the project, Feasibility
Study, surveys agrees with application. Includes specific measurable objectives Sample

Project management Minutes of Board/ management meetings
Progress reports
Computerised systems & procedures
Tender documents
Fixed Assets register
Records to ensure sub-contractors are monitored & managed
Other documentation such as HSE records, disaster recovery plan, marketing plan etc
        Sample
Physical Progress     Relevant records for the output/result (eg payroll details in case of
job created)
Systems to ensure that project outputs & impacts are properly recorded and evidence of
achievement maintained
Monitoring information       All
Publicity Records
Criteria       Evidence Required To check          Satisfactory   Comments             /
Description of Items Checked (if not included in main report)
                      Yes No
Levels
of Publicity Letterheads, stationery
Billboards
Recruitment material Sample

Financial Records - Income
Criteria         Evidence Required To check            Satisfactory Comments           /
Description of Items Checked (if not included in main report)
                          Yes No
Match funding Written confirmations if available
Receipt of match funding in accounts
Back-up evidence eg remittance advice, bank statements All
Match funding
in kind How is this made up
Detailed audit trail eg payroll records, apportionment
Agreed methodology for valuing & monitoring the contribution          All
De-minimis State aid
(if applicable) Offer letter
Details of all public financial assistance received by applicant over the past 3 years
Detailed records of aid received        All
Revenue income
(if any) Items in books of accounts showing revenue income All
Private income        (if any) Items in books of accounts showing private income (check
that this is not ineligible)    All

Financial Records - Expenditure
Criteria        Evidence Required To check            Satisfactory Comments         /
Description of Items Checked (if not included in main report)
                        Yes No
Project direct costs Items in main books of accounts, showing total of project direct
costs All
Project direct costs Schedule of direct costs by headings shown in application
Audit trail to original documentation eg invoice, travel expense claims  Sample

Staff Wages/ salary costs     Salary records broken into actual costs per staff member
Apportionment of staff time to project       All
Overhead costs         Working papers showing source of overhead costs & how these are
charged to the project
Written methods / policy of apportionment Sample


Conclusion/Overall Assessment
C.2. FINANCIAL CORRECTIONS


C.2.1 Detecting and reporting irregularities



Example 1 – Extracts from UK guidance package reporting irregularities
Notification forms
Worked example
Guidance notes



NOTIFICATION FORMS



IDENTIFICATION OF COMMUNICATION
ANNEX A

Section A: to be completed by DTI
Member State:        UNITED KINGDOM Date Sent:

Case No:
Quarter:

Administrative department in Member State: Regional:     ODPM
      National:      DTI

Section B: to be completed by Government Office
Name of Reporting Officer:

ODPM Irregularity Report No.(ESAD to complete):
Position Within GO:
Date Reported:
Government Office: (blank)

Is this Irreg report:   NEW 0               AN UPDATE 0

Does this Irreg report CLOSE the irregularity (ie are all irregular funds recovered) YES 0
       NO 0



DETAILS OF IRREGULARITY

1       Description of operation

1.1 Community Support Framework
    (ESF Only)    (blank)

1.2 Name of Programme             (blank)

1.3 EC decision No and Date: (DTI to complete)

1.4 Member State‟s ref No: (DTI to complete)

1.5 ARINCO No:          (blank)




Organisation Name:

Type of organisation (CFE, VS, LA, etc)

Title of Project

Dossier Number

Measure (e.g. 3.2.2)


2       Provision infringed

2.1 Community Regulation: 1261/1999 ERDF

2.2 National Regulation:          the terms and conditions of the offer letter
3      Date of first information leading to suspicion of irregularity:

3.1 Source of first information leading to suspicion of irregularity (tick box)
Inspection:
Article 4 Monitoring:
Contract Management:
Audit Certification:
        0
0
0
0
Other Audit Visit:
Informant:

More… (select from drop down list):
(blank)
        0
0

Other (give brief details):


4      Manner in which the irregularity was confirmed

If the irregularity was confirmed in a manner different to how it was first suspected (as
described in Section 3) then give brief details below:
Details:


5      Type of irregularity (tick all that apply)

False Claim:
Inadequate match funding:
Inadequate beneficiary records:
Ineligible expenditure:
Project not delivered in line with its contract:      0
0

0
0

0
False Supporting Documents:
Poor management/financial control:
No publicity:
No added value:
Systemic issues (in one of above categories)
More… (select from drop down list)
(blank)
        0
0
0
0
0


Other (please specify)


5.1 Practices employed in committing the irregularity
Provide a brief description of the practices employed in committing the irregularity.


5.2 Are these practices considered new?        Yes: 0            No: 1

5.3 If Yes, has notification been sent under
    Article 4 of EC Regulation 1681/94 or 1831/94?               Yes: 0           No: 0
       Not Known: 0


6      Are other Member States involved?:               Yes: 0            No: 1

6.1 If Yes, has notification been sent under Article
     4 of EC Regulation 1681/94 or 1831/94?          No: 0                Not known: 0
         Yes: 0
If yes, date & references:


7      Period of the irregularity

7.1 Dates on, or between, which the irregularity took place:                   to


8      Authorities or bodies

8.1 Authorities or bodies which drew up the official report on the irregularity:          GO -

8.2 Authorities or bodies responsible for administrative or judicial follow up:           GO -


9      Date on which the irregularity report was drawn up:
10     Name and address of natural and legal persons involved


10.1   The name and official address of the organisation involved.

Organisation Name:

Organisation Address
(inc postcode):


FINANCIAL ASPECTS

11      Funding details
This is the agreed total level of funding for the project.

11.1 Total Amount of Operation
     (must equal 11.2 + 11.3)          £

11.2 ERDF Element £

11.3 Match Funding Element £


12      Nature and amount of IRREGULAR expenditure
Of the funding actually paid to the project this is the breakdown of the irregular amounts.

12.1 Nature of irregular expenditure
    (ie staff costs, other costs, match funding)


12.2 Irregular Total Expenditure
     (this must equal 12.3 + 12.4)     £

12.3 Irregular ERDF £

12.4 Irregular Match Funding           £

Are the entries in section 12 ESTIMATES? YES: 0              NO: 0


13     Amount of funding which would have been wrongly paid had the irregularity not
been discovered:
13.1 Total Expenditure (= 13.2 +13.3)       £

13.2 ERDF Element £

13.3 Match Funding £


14     Financial consequences

14.1 Amount of irregular expenditure (TDE) not yet paid
    (= 13.1 – 12.2) £

Amount of ERDF not yet paid (= 13.2 – 12.3)          £

Amount of Match Funding not yet paid (= 13.3 – 12.4)      £

14.2 Has further payment been suspended. YES: 0           NO: 0

If NO, why not?


15     Possibility of recovery

Potential for recovery of ERDF funds reported at 12.3:    Good 0Possible 0
Unlikely 0

Reasoning:


16     Irregular amount recovered (cumulative):

Total Declared Expenditure (TDE)    £

16.1 ERDF amount: £

16.2 Match funding amount: £


17     Irregular amount remaining to be recovered:

Total Declared Expenditure (TDE)    £

17.1 ERDF Amount £

17.2 Match funding amount £
18    Date of special report in accordance with Article 5(2) of Regulation
(EC)N°1681/94 or with Regulation (EC)N°1831/94: (to be completed by ODPM):




STAGE OF PROCEDURES

19      Action by Member State
This is any action taken under National Legislation to safeguard the recovery of irregular
payments




20      Administrative proceedings
Please indicate any action taken concerning the irregularity

Refund of irregular funds being pursued:       0
Off-setting against other payments: 0
Case forwarded to other authorities: 0

If fraud is suspected, has the case been referred to:
        the Police:                    0
        ODPM:                          0
Other action taken:


21      Judicial proceedings
If the case has become the subject of criminal proceedings then give details here.




22     Abandonment of recovery proceedings:

Have recovery proceedings been abandoned? Yes 0 No 1

If Yes then select a reason why: (blank)

22.1 Was the Commission notified before the decision to abandon the recovery
procedure was taken?
       No: 0 Yes: 0    If yes, then please give reference numbers:
23     Have criminal procedures been abandoned?

There have been no criminal proceedings: 1          No: 0          Not known: 0
       Yes: 0



Sections 24, 25 and 26 to be completed by ODPM and DTI


24     Termination of procedures

24.1 Has the Commission been notified of administrative or judicial decisions or the
main points thereof, concerning termination of proceedings in accordance with Article
5(1) of Regulation 1681/94 or with Regulation 1831/94:
No: 0 Yes: 0 If yes, then please give reference numbers:




25     Penalties imposed (administrative and/or judicial):




26     If Article 3(3) of Regulation 1681/94 or of Regulation 1831/94 applies:

26.1 to which of the above does it apply?:

26.2 has authorisation of the competent court or tribunal been applied for?:



27     Any additional observations:




ANNEX B

STRUCTURAL FUNDS IRREGULARITY REPORT (SFIR) GUIDANCE


1. Overview
This annex gives a brief overview of the irregularity reporting process as well as
examples of how to complete the „Financial Aspects‟ section of the form. Section 3
contains the step by step guidance for completing each section of the SFIR.

As described in Para 9 of the Action Note, an Irregularity Report (SFIR) is required
where an irregularity >€4000 (£2829 for 2005) has been identified.

The SFIR form is used for both initial reporting of Irregularities and updates on the action
taken to recover the funds at risk.


Stages of an irregularity:

* Note that some irregularities (particularly those found as a result of an Article 10
inspection) may be initially reported before the irregular amount is crystallised. In these
cases only complete Sections 1- 14.


2. Financial Aspects Section Examples

The information to be entered in the Financial Aspects section of the SFIR is explained in
the three scenarios below. (In all 3 cases a 50% intervention rate has been assumed for
simplicity)

It is assumed that a project has been approved the following:

Total Amount of Operation: £400,000
ERDF Element:              £200,000
Match Element:             £200,000




Cumulatively this would look like:

      Payment 1    Payment 2      Payment 3     Payment 4
*TDE (£)    100,000        200,000       300,000       400,000
ERDF (£)    50,000 100,000        150,000       200,000
MATCH (£) 50,000 100,000          150,000       200,000
                  * total declared expenditure

Scenario 1: 6 Months has elapsed since an irregularity was first identified. It is estimated
that the irregularity will be £75,000 ERDF. The error is identified after 2 payments have
been made to the project. No funds have been recovered as the irregular amount hasn‟t
yet been crystallised.
FINANCIAL ASPECTS

11      Funding details
This is the agreed total level of funding for the project.

11.1 Total Amount of Operation
     (must equal 11.2 + 11.3)     £ 400,000
11.2 ERDF Element £ 200,000
11.3 Match Funding Element £ 200,000

12      Nature and amount of IRREGULAR expenditure
Of the funding actually paid to the project this is the breakdown of the irregular amounts.

12.1 Nature of irregular expenditure
    (ie staff costs, other costs, match funding)
Other costs

12.2 Irregular Total Expenditure
     (this must equal 12.3 + 12.4) £ 150,000
12.3 Irregular ERDF £ 75,000
12.4 Irregular Match Funding        £ 75,000
Are the entries in section 12 ESTIMATES? YES: X                     NO: 0


13     Amount of funding which would have been wrongly paid had the irregularity not
been discovered:

13.1 Total Expenditure (= 13.2 +13.3)          £ 150,000
13.2 ERDF Element £ 75,000
13.3 Match Funding £ 75,000

14     Financial consequences

14.1 Amount of irregular expenditure (TDE) not yet paid
    (= 13.1 – 12.2) £ 0
Amount of ERDF not yet paid (= 13.2 – 12.3)       £ 0
Amount of Match Funding not yet paid (= 13.3 – 12.4)    £ 0
14.2 Has further payment been suspended. YES: 0         NO: X

If NO, why not?               Work is ongoing to determine the irregular amount at risk.

15     Possibility of recovery
Potential for recovery of ERDF funds reported at 12.3:       Good   0   Possible   0
       Unlikely 0

Reasoning:




16     Irregular amount recovered (cumulative):

Total Declared Expenditure (TDE)       £

16.1 ERDF amount: £

16.2 Match funding amount: £


17     Irregular amount remaining to be recovered:

Total Declared Expenditure TDE)        £

17.1 ERDF Amount £

17.2 Match funding amount £



Scenario 2: The irregularity identified in scenario 1 has now been crystallised at a
reduced amount of £10,000 ERDF. For 448/2001 purposes the contract has been reduced
by 20K and the irregular funds (10K ERDF) have been recovered by claw back.



FINANCIAL ASPECTS

11      Funding details
This is the agreed total level of funding for the project.

11.1 Total Amount of Operation
     (must equal 11.2 + 11.3)     £ 400,000
11.2 ERDF Element £ 200,000
11.3 Match Funding Element £ 200,000

12     Nature and amount of IRREGULAR expenditure
Of the funding actually paid to the project this is the breakdown of the irregular amounts.

12.1 Nature of irregular expenditure
    (ie staff costs, other costs, match funding)
Other costs

12.2 Irregular Total Expenditure
     (this must equal 12.3 + 12.4) £ 20,000
12.3 Irregular ERDF £ 10,000
12.4 Irregular Match Funding        £ 10,000
Are the entries in section 12 ESTIMATES? YES: 0                      NO: X


13     Amount of funding which would have been wrongly paid had the irregularity not
been discovered:

13.1 Total Expenditure (= 13.2 +13.3)         £ 20,000
13.2 ERDF Element £ 10,000
13.3 Match Funding £ 10,000

14     Financial consequences

14.1 Amount of irregular expenditure (TDE) not yet paid
    (= 13.1 – 12.2) £ 0
Amount of ERDF not yet paid (= 13.2 – 12.3)       £ 0
Amount of Match Funding not yet paid (= 13.3 – 12.4)    £ 0
14.2 Has further payment been suspended. YES: 0         NO: X

If NO, why not?              All funds have been recovered.

15     Possibility of recovery

Potential for recovery of ERDF funds reported at 12.3:        Good   X         Possible   0
       Unlikely 0

Reasoning:    All funds have been clawed back from the project.

16     Irregular amount recovered (cumulative):

Total Declared Expenditure (TDE) £ 20,000
16.1 ERDF amount: £ 10,000
16.2 Match funding amount: £ 10,000

17     Irregular amount remaining to be recovered:

Total Declared Expenditure TDE)       £ 0
17.1 ERDF Amount £ 0
17.2 Match funding amount £ 0

Scenario 3: This scenario is based on a systemic irregularity being found totalling
£40,000 ERDF. (£10,000 irregular in each of the four payment periods). The irregularity
was found and crystallised after the third payment to the project had been made resulting
in 30K ERDF to be recovered by claw back. The contract value has been reduced by the
total funding in error (80K) of which ERDF is 40K.


FINANCIAL ASPECTS

11      Funding details
This is the agreed total level of funding for the project.

11.1 Total Amount of Operation
     (must equal 11.2 + 11.3)     £ 400,000
11.2 ERDF Element £ 200,000
11.3 Match Funding Element £ 200,000

12      Nature and amount of IRREGULAR expenditure
Of the funding actually paid to the project this is the breakdown of the irregular amounts.

12.1 Nature of irregular expenditure
    (ie staff costs, other costs, match funding)
Other costs

12.2 Irregular Total Expenditure
     (this must equal 12.3 + 12.4) £ 60,000
12.3 Irregular ERDF £ 30,000
12.4 Irregular Match Funding        £ 30,000
Are the entries in section 12 ESTIMATES? YES: 0                     NO: X


13     Amount of funding which would have been wrongly paid had the irregularity not
been discovered:

13.1 Total Expenditure (= 13.2 +13.3)          £ 80,000
13.2 ERDF Element £ 40,000
13.3 Match Funding £ 40,000

14     Financial consequences

14.1 Amount of irregular expenditure (TDE) not yet paid
    (= 13.1 – 12.2) £ 20,000
Amount of ERDF not yet paid (= 13.2 – 12.3)       £ 10,000
Amount of Match Funding not yet paid (= 13.3 – 12.4)          £ 10,000
14.2 Has further payment been suspended. YES: 0               NO: X

If NO, why not?              All funds have been recovered and the contract has been
reduced.

15     Possibility of recovery

Potential for recovery of ERDF funds reported at 12.3:        Good    X         Possible   0
       Unlikely 0

Reasoning: All funds have been clawed back from the project.

16     Irregular amount recovered (cumulative):

Total Declared Expenditure (TDE) £ 60,000
16.1 ERDF amount: £ 30,000
16.2 Match funding amount: £ 30,000

17     Irregular amount remaining to be recovered:

Total Declared Expenditure TDE) £ 0
17.1 ERDF Amount £ 0
17.2 Match funding amount £ 0
Due to the systemic nature of the error, Section 13 and 14 reflect the potential irregularity
that could have been claimed and paid had the irregularity not been detected. Section 13.1
is the amount that the contract value has to be reduced by to satisfy the requirements of
EC regulation 448/2001.

Sections 16 and 17 should only reflect the recovery against the amounts reported in
section 12.


3. Step by Step Guidance

Additional help files can be found by pressing the F1 key when completing the SFIR.

Enter all dates in the format 12 March 2004 or 12/3/4. The dates will then be auto
formatted to the correct format of year/month/day – 04 03 12.

IDENTIFICATION OF COMMUNICATION

Section A to be completed by DTI

Section B
Name of reporting officer: Enter the name of the person completing the Irreg report.
GO Irregularity Report Number: Enter your own internal reference number.
Position within GO: Enter your position / job.
Date Reported: The date the Irreg report was filled in.
Government Office: Enter which Government Office you work for.
Is this Irreg: New/Update: If this is the first notification of the irregularity then select
NEW. If it is updating an irregularity previously reported then select UPDATE.
Does this Irreg report CLOSE the irregularity:
If you are reporting (either initially or as an update) that all irregular funds have been
fully recovered then select YES. If there are irregular funds still outstanding and to be
recovered then select NO.

DETAILS OF IRREGULARITY

1. Description of operation:

1.1    Community support framework:
Applies to ESF only
1.2    Name of programme:
In the case of a CSF, this would be the relevant operational plan within the CSF, i.e
England Objective 3. For all other programmes it is the programme title – i.e East
Midlands Objective 2.
1.3    EC decision N° and date: DTI to complete.
1.4    Member State‟s reference N°: DTI to complete
1.5    ARINCO N°: Select from the drop down list. (The programme name has been
included for easy identification)

2. Provision infringed
2.1 Community provision infringed:
This is the Regulation breached by the irregularity – it is usual to put in here the number
of the regulation relating to the fund concerned. They are 1261/1999 ERDF, 1262/1999
ESF, 1257/1999 EAGGF Guidance, and 1263/1999 FIFG. There are other regulations
relating to the operation of the funds, but the above are the main ones for the four funds.
If you are aware of the case being in breach of another irregularity, such as Publicity or
the Public Procurement Directive, for instance, then put the appropriate
regulation/directive number here.
2.2 National provision infringed:
This is usually “the terms and conditions of the offer letter”, so that statement is
adequate. Again, however, if you are aware of a specific legal infringement under UK
law, then put the details here.

3. Date of first information leading to suspicion of irregularity:
The date of any inspection, telephone call from informant, on the spot check, etc
3.1     Source of first information leading to suspicion of irregularity:
Detail here what caused the suspicion of an irregularity – informant, audit report,
inspection, on the spot check, monitoring visit or ECA Audit. Check the appropriate box
or select from the drop down list.
4. The manner in which the irregularity was discovered:
This is the manner in which the irregularity was confirmed – audit visit, monitoring visit,
etc. This can be the same as the above entry in some cases.

5. Type of irregularity:
This is what it says –what sort of irregularity – false claim, ineligible items claimed for,
lack of evidence of project existence, systemic etc Check the appropriate type of
irregularity or select more from the drop down list.

5.1     Practices employed in committing the irregularity:
This is text – a short statement of the irregularity, for instance if it is ineligible
expenditure, then here you would detail that ineligible expenditure.
5.2     Are these practices considered new?:
Here the answer is usually “No” – unless the aspects of the case are so novel that OLAF
should be informed in a special report to alert them so that they could let other Member
States know in order to prevent such occurrences across the EU.
5.3     If yes, has notification been sent under Article 4 of Regulation (EC)1681/94 or of
Regulation. (EC) 1831/94?
        Yes [] date and references, No [], Not known []
Tick the appropriate box. If “Yes” to 5.2 special report must be sent so tick yes box and
give the references, date etc of the special report in here –The special report should be
attached. This can be in the form of a letter stating the facts. I f you tick no or not known
then action should be taken to ensure that such a report under Article 4 is made as soon as
possible.

6. Other Member State and third countries involved:
Again, this is usually “No”, unless the case involves another Member State
6.1     If yes, has notification been sent under Article 4 of Regulation (EC) 1681/94 or of
Regulation (EC) 1831/94?
                Yes [] date and references, No [], Not known []
Tick the appropriate box. If “Yes” to 5.2 a special report must be sent so tick yes box
and give the references, date etc of the special report in here –The special report should
be attached. This can be in the form of a letter stating the facts. If you tick “no” or “not
known” then action should be taken to ensure that such a report under Article 4 is made
as soon as possible to OLAF.

7. Period of the irregularity:
7.1     Date on which, or dates between which, irregularity was committed: This is the
period of time covered by the irregular expenditure – although in the case of liquidation,
it could be the day on which the company went into liquidation/receivership.

8. Authorities or bodies
8.1    Authorities or bodies which drew up the official report on the irregularity:

8.2    Authorities or bodies responsible for administrative or judicial follow-up:
9. Date on which the official report on the irregularity was drawn up:
Date this form was completed

10. Name and address of natural and legal persons involved:
10.1 Organisation Name: This is the organisation or organisations involved in the
irregularity. Their full address including postcode is required. There can be more than
one legal entity involved so simply copy the format and add the appropriate details to
section 27 of the SFIR.
Organisation Address: Enter the registered address of the organisation including the
postcode.

FINANCIAL ASPECTS
See page 2 of this Annex for worked examples on completing sections 11 – 17

11. Funding Details
This is the agreed total level of funding for the project
11.1 Total amount of operation: The total value of the eligible expenditure.
11.2 ERDF Element: The ERDF share.
11.3 Match Funding Element: All National, including Private Sector if appropriate.
NOTE: 11.2 & 11.3 must add up to 11.1

12. Nature and amount of IRREGULAR expenditure:
Of the project‟s actual expenditure, this is the breakdown of the amounts found to be
irregular. NB These amounts should never be greater than the amount of funding the
project has had.
12.1 Nature of the expenditure: Give a brief description of the type of expenditure that
is being reported as irregular – Example “Salaries”, “Overheads”, “Capital equipment”
Free text –so any description is valid
12.2 Total amount of the expenditure: The total value of the ineligible expenditure
12.3 Irregular ERDF: this is the amount of ERDF found to be irregular.
12.4 Irregular Match Funding: NOTE – 12.3 & 12.4 MUST ADD UP TO 12.2
Are entries in section 12 ESTIMATES?: If the amount that is irregular is still under
review and is not yet crystallised tick YES

13. Amount which would have been wrongly paid had the irregularity not been
discovered:
This section shows the breakdown of funds of the total irregularity (in the case of
systemic errors this will include amounts not yet claimed by the project) Take care-
although irregular expenditure under section 12 may be de minimis, if the amount could
have been higher had the irregularity NOT been identified, then it should be reported.
13.1 Total Expenditure
13.2 ERDF Element
13.3 Match Funding
14. Financial consequences
14.1 Amount of irregular expenditure not yet paid: This is the amount of TDE that is
irregular that the project has not yet been paid. It is the difference between sections 13.1
and 12.2 (13.1 -12.2)
Amount of ERDF not yet paid: 13.2 – 12.3
Amount of Match not yet paid 13.3 – 12.4
14.2 Has further payment been suspended:
Yes [] No [],
If the answer here is “no”, then an explanation should be given as to why payments have
not been suspended.

15. Possibility of recovery:
A view should be given as to the recovery of the funds wrongly paid - good, possible,
unlikely – If the funds are already recovered, how this was achieved [by adjustment of a
future claim or by repayment].

16. Irregular amount recovered:
This is the breakdown of the irregular funds that have been recovered. The figures here
are the figures showing recovery of paid irregular funds as quoted in Section 12.
They should be the amounts recovered to date if funds are being recovered in instalments.
Total Declared Expenditure:
16.1 ERDF amount:
16.2 Match Funding amount:

17. Total amount to be recovered:
This will be for the funds not recovered. The figures here should match the amounts
quoted in Section 12, unless the funds are being recovered in part payment or instalments,
so the amount here could be the Section 12 amount less the Section 16 recovery.

17.1   ERDF amount:
17.2   Match Funding amount:

18. Date of special report in accordance with Article 5(2) of Regulation
  (EC)N°1681/94 or with Regulation (EC) N°1831/94:


STAGE OF PROCEDURES

19. Action by Member State

19.1   Interim measures:
This is any action taken under National legislation to safeguard the recovery of irregular
payments -free text. Complete this with whatever information you may think
appropriate.

20. Administrative proceedings:
Please indicate any action taken concerning the irregularity – decision to recover funds,
setting-off against other payments made to the beneficiary, case forwarded to any other
authorities for proceedings. In the case of suspected fraud, the case may have been
handed over to the Police or Serious Fraud Office.

21. Judicial proceedings:
If the case has become the subject of criminal proceedings, the give details here.

22. Reasons for any abandonment of recovery proceedings:
Give the reasons for the abandonment of recovery procedures –For example, bankruptcy,
liquidation, lack of assets, death of beneficiary or trustee with no estate
22.1 Was the Commission notified before the decision to abandon the
        Recovery procedure was taken?
Yes [] date and references, No [],
Give the details of the Special report submitted under Section 18 – and if necessary
explain why the Commission was not notified before the decision to abandon was made

23.    Have criminal procedures been abandoned?
       Yes [], No [], Not Known []
       Tick as appropriate

SECTIONS 24 to 26 to be completed by ODPM

24. Termination of procedures
25. Penalties imposed (administrative and/or judicial):
26. If Article 3(3) of Regulation (EC) N°1681/94 or of Regulation (EC) N°1831/94
applies:


27. Additional observations:
Please give any further information you feel is relevant. This is a free text area that can be
used to give supplementary information to any section in the SFIR.

ANNEX C                                                                       Annex C
NOTIFICATION OF INELIGIBLE SPEND


1. For Completion by Officer notifying ineligible spend

1.1 Applicant:
1.2 Project Number:

1.3 Project Measure:

1.4 Amount of Ineligible Spend (TDE):              £

1.5 Amount of Grant Recoverable (ERDF): £

1.6 Amount Contract to be reduced by:              £
Name:
Signature:
Date:

                         -ordinator for recording and tracking purposes


AGREEMENT/CONFIRMATION OF ACCOUNTING ACTIVITY


2. For completion by European Secretariat Contract Management Team

2.1 I agree/disagree the recommended action for recovery of the grant specified in
Section 1.


2.2 AGREEMENT CONFIRMED (** delete as appropriate)

** Interim Claim - I confirm that the irregular funding at 1.4 of £            should be
refunded/offset against future claims until full recovery has been effected. The contract
value has been reduced by the amount at 1.6.

** Final Claim - I confirm that on            accounting action has been taken to remove
the irregular funding at 1.4 of £                 from the ERDF computer system. The
contract value at 1.6 has been reduced and recovery of the amount (at 1.4) should now be
progressed.


2.3 AGREEMENT NOT CONFIRMED

If not confirmed please provide comments and return to Inspection Team/originator of
form.
Name:
Signature:
Date:


Irreg Co-    ordinator for updating of the ERDF computer system.


RECOVERY FORM

3. For completion by European Secretariat Payment Team

Project Information

1.1 Applicant:

1.2 Project Number:

1.3 Project Measure:

1.4 Amount of Ineligible Spend (TDE):              £

1.5 Amount of Grant Recoverable (ERDF):            £

Recovery Position to Date

3.1 Cumulative amount recovered to date:    £

3.2 Indicate whether recovery action completed (YES) or still ongoing (NO) (circle
relevant entry)

YES                     NO

3.3 Date full recovery made



Recovery 1

3.4 Amount recovered:         £

3.5 Date of Recovery:
3.6 Method of recovery: offset against subsequent claims/repayment /other (explain)
(delete as applicable)

3.7 Amount remaining to be recovered

Recovery 2

3.4 Amount recovered:       £

3.5 Date of Recovery:

3.6 Method of recovery: offset against subsequent claims/repayment /other (explain)
(delete as applicable)

3.7 Amount remaining to be recovered


Recovery 3

3.4 Amount recovered:       £

3.5 Date of Recovery:

3.6 Method of recovery: offset against subsequent claims/repayment /other (explain)
(delete as applicable)

3.7 Amount remaining to be recovered
Recovery 4

3.4 Amount recovered:       £

3.5 Date of Recovery:

3.6 Method of recovery: offset against subsequent claims/repayment /other (explain)
(delete as applicable)

3.7 Amount remaining to be recovered
Name:
Signature:
Date:

Update, print, and sign form until full recovery made. After each recovery transaction
send the signed form to GO Irreg Co-ordinator.


ANNEX D
SECTION 1 - NOTIFICATION OF INELIGIBLE SPEND

This section give details of the funding that is ineligible and is to be recovered either via
repayment in the case of final claims, or offset from future claims in the case of interim
claims. This should be completed in conjunction with the SFIR report confirming the
final amount at risk.

This will normally be completed by the person notifying the irregularity and requesting
accounting action/recovery of ineligible funds. As the majority of irregularity cases will
arise from inspection visits this will usually be the GO Inspection Team.

These instructions are applicable to all financial corrections arising from irregularities
irrespective of the source of the irregularity, including withdrawals.


1. For Completion by Officer notifying ineligible spend

1.1 Applicant:

1.2 Project Number:

1.3 Project Measure:

1.4 Amount of Ineligible Spend (TDE):                 £

1.5 Amount of Grant Recoverable (ERDF): £

1.6 Amount Contract to be reduced by:                 £
Name:
Signature:
Date:

1.1 Applicant As section 1.0 on SFIR report

1.2 Project Number As section 1.0 on SFIR report

1.3 Project Measure Necessary as 438/01 asks for summary of funds recovered by
measure. Where irregularities arise from inspection activity this should reconcile with
information on 5% return.

1.4 Amount of Ineligible Spend (TDE)          As section 12.2 on SFIR report

1.5 Amount of Grant Recoverable (ERDF) As section 12.3 on SFIR report

1.6 Amount contract to be reduced by          As section 13.1 on SFIR report. (Note this
will be the same as 12.2 except in cases of systemic error. See Scenario 3 in Annex B)
           – to ensure this form is acceptable to audit, electronic signatures should be
avoided.

          - this form should now be forwarded to the EU Secretariat Contract
Management Team along with relevant paperwork relating to the claim revisions.


SECTION 2 – AGREEMENT /CONFIRMATION OF ACCOUNTING ACTIVITY

This section provides contract managers/programme delivery teams with the option to
consider the information enclosed with the form, agree/disagree the findings/
recommendations and, if in agreement, give authority for recovery action to proceed.

For 5% inspection and irregularity monitoring and reporting purposes it confirms when
recovery action has commenced.

To be completed and signed by the person authorising/instigating the recovery action.

2. For completion by European Secretariat Contract Management Team

2.1 I agree/disagree the recommended action for recovery of the grant specified in
Section 1.


2.2 AGREEMENT CONFIRMED (** delete as appropriate)

** Interim Claim - I confirm that the irregular funding at 1.4 of £          should be
refunded/offset against future claims until full recovery has been effected. The grant
offered has been reduced by the amount at 1.6.

** Final Claim - I confirm that on        accounting action has been taken to remove
the irregular funding at 1.4 of £         from the ERDF computer system. The grant
offered at 1.6 has been reduced and recovery of the amount (at 1.4) should now be
progressed.

2.3 AGREEMENT NOT CONFIRMED

If not confirmed please provide comments and return to Inspection Team/originator of
form.


Name:
Signature:
Date:
2.1    Self-explanatory

2.2     Self-explanatory. Inspection teams – but note that in the case of interim claims the
column should remain blank until the recovery amount has been fully offset against
future claims. Only then can accounting action be regarded as completed.

2.3    Self explanatory

           – where confirmation is given for recovery action to commence on interim
claims it will be necessary to access the impact on profiles and contracts over the
remainder of the project lifespan, particularly where systemic error is the causal factor for
the irregularity.
          – It is important that accounting action on the ERDF computer system is not
delayed as this can have implications for the debtors control account balance as well as
the accuracy of claims to the Commission.
            – if 2.2 completed this form should now be forwarded to the team responsible
for progressing recovery action; if 2.3 return to form originator.


ANNEX E

EXEMPTIONS FROM THE OLAF REPORTING REQUIREMENT

1.     The de minimis rule [already in the regulation] – anything below €4,000 is not
reported, unless the Commission request that it be reported. The irregularity does have to
be mentioned in the relevant Annual Implementation Report but does not need to be
reported to OLAF

2.     Error or negligence detected before payment and not resulting in any
administrative or judicial penalty. If no money is paid out before the irregularity is
detected and there are no penalties resulting. No reporting requirement.

3.     Irregularities notified to the GO by the grant recipient without being compelled to
do so or before discovery by the GO, either before or after payment of the amounts
requested. No reporting requirement.

4.     Situations where the GO finds that it was mistaken as regards the eligibility of the
project financed and where the error was found before payment. No reporting
requirement.

C.3.2 Compliance with the n+2 rule


Example 1 – N+2 monitoring table – adapted to Romanian situation from a UK
spreadsheet tool
An example of an n+2 monitoring table is shown below. The Managing Authority
should complete sections D and E of this table to determine whether actual and forecast
expenditure up to the closest N+2 deadline is sufficient to avoid de-commitment of funds
by the European Commission. The data necessary to complete sections D and E should
come from the MIS system.

The table itself does not need to be submitted to the Commission. It is a tool solely for
the use of the Managing Authority, but may be tabled at the Programme Monitoring
Committee.




C.3.3. Management of OP financial tables




Example 1 – Financial tables and exchange rate management spreadsheet tool (embedded
Excel file)
N.B. The functionality of this spreadsheet tool should be built into the SMIS system




C.4. AUDIT TRAIL


C.4.1 Maintenance of audit trail on operations



Example 1 – Description of audit trail in response to Commission questionnaire
(Objective 1 Regional Development OP 2004-2006 - Hungary)
EXTRACT FROM HUNGARY‟S RESPONSE TO COMMISSION QUESTIONNAIRE
ON REVIEW OF DESCRIPTION OF MANAGEMENT AND CONTROL SYSTEMS -
2004

Audit Trail
Provide a description of the audit trail for the programme and/or for individual measures,
showing for all stages in the project cycle from application to final payment, the body
carrying out the process or making the decision, the documentation produced and
retained and the location of storage, (Reg. No 1260/1999 : Art. 38(6); Reg. No 438/2001:
Art. 7 and Annex I.)
It is recommended that the description of the audit trail follows the sequence set out in
Annex I of Reg. No 438/2001.
The Procedures Manual of the OP contains the detailed Audit Trail.
The audit trail presented above covers the MA and the IB as part of the institutional
system. This is because in the Hungarian system, all documents – including project level
invoices and related documentation – is kept on IB level, so the completeness of the audit
trail is not harmed by the non-inclusion of the final beneficiaries or final recipients as
such.

        Task             Responsible body/person               Documentation produced and
retained                 Location of storage
        Elaboration of calls for proposals and application documents (based on the PC
and the selection criteria)             MA / Programme Manager                Draft calls for
proposals and application documents             MA
        Approval of call for proposals *                MA / Head             Approval note
        MA
        Elaboration of guidelines for applicants               MA / Programme Manager
        Draft guidelines                MA
        Approval of guidelines for applicants*                 MA /Head
        Approval note            MA
        Publication of call for proposals               MA / Communications Manager
        Full text of calls for proposals published             MA Website
        Information and publicity tasks related to the call for proposals (e.g. roadshow
events, website, etc.)           MA / Communications Manager
        Communication Strategy, Action Plan, Reports and copies of publications
        MA, RDAs
        Receiving and registration of the applications                 RDA,           project
manager                  EMIR, registration number, notification letter for applicant
        RDA, applicant
        Accuracy check of the applications (completeness and eligibility)             RDA,
project manager                  Check lists            RDA
         Informing applicants submitting incomplete or ineligible applications
        RDA, project manager                    Letter for applicant to complete application;
rejection letter to the applicant               RDA, applicant
        Evaluation of project applications              RDA, project manager
        Check lists              RDA
        Proposal                 RDA, project manager, head of the unit               List of
applications supported and non supported               RDA
        Quality assurance of application selection procedure           VÁTI           Check
lists and list of applications supported and non supported             VÁTI
        Setting up Project Selection Committee (composition and tasks)                MA
        Rules and Procedures, List of Members                  MA
        Chairing Project Selection Committee                   MA             Minutes      of
Meeting                  MA
        Approval of the decision of the Project Selection Committee                   MA
        Lists of supported and not supported applications              MA
        Notice to applicants on the decision           MA              Notification letter to
applicants               MA, RDA, VATI
        Publication of data of supported projects              MA             Website notice
        Web server of MA
        Preparation of contracting or modification of contract                VÁTI
        Supporting contract             VÁTI
        Approval of the contracts and the modifications thereof               VÁTI
        Contract signed                 Beneficiary, VÁTI,
        Monitoring of project implementation process                   VÁTI RRO, project
manager                  Progress Report, Check lists          VÁTI RRO
        Interim on-the-spot inspections                VÁTI, project manager
        Report of on-the-spot inspection               Beneficiary, VÁTI,
        Receiving the beneficiaries‟ reimbursement claims              VÁTI,         account
manager                  Check lists
        Reports, invoices certification of performance and receipts and recorded
comments                 Beneficiary, VÁTI
        Formal and performance check of the reimbursement claims                      VÁTI
RRO, account manager                    Check lists            VÁTI RRO
        Interim on-the-spot inspections depending on the project risk                 VÁTI
RRO, project manager                    Report of on-the-spot inspection
        Beneficiary, VÁTI RRO
        Verification of beneficiaries‟ reimbursement claim             VÁTI RRO, project
manager                  Individual Performance Report                 VÁTI
        Verification of beneficiaries‟ reimbursement claim             VÁTI,          project
manager                  Performance Report            Beneficiary, VÁTI
        Filling out of verification report for payment approval.              VÁTI, project
manager                  Verification Report           VÁTI, MA
        Approval of verification report and payment request alongside                 MA
financial                Verification Report           MA
        Authorisation of payments to beneficiaries             VÁTI, account manager
        Copies of Transfer orders               VÁTI
        Transfer of the contribution from the Funds            PA             Bank transfer
sheet             MA/PA
        Claim for ex-post settlement of Community contributions to the MA
        VÁTI, account manager                   Copies of cover letter and application
        VÁTI
        Ex post on-the-spot inspections              VÁTI, project manager
        Report of on site inspection          Beneficiary, VÁTI,
        Claim for ex-post settlement of Community contribution to the PA           MA
        Form sheet "settling EC contribution"               MA & PA
        Compilation of Statement of Expenditure             MA            Statement of
Expenditure             MA & PA
        Compilation of MA Verification report               MA            Verification
report          MA & PA
        Compilation of Application for Payment              PA            Application
for Payment             PA
        Certification of expenditure declarations           PA            Certificate
        PA
        Submission of Certification of expenditure declarations and applications for
payment to the Commission             PA             Application for Payment
Certificate
Statement of Expenditure              PA & EC
        Documentation                 VÁTI           Relevant documents            VÁTI
        Regular reporting on the measure (applications, contracts, payments, etc.)
        VÁTI, MA               Various regular reports              VÁTI, EMIR, MA
        Input data related to the to the implementation of the measure into electronic
information system             VÁTI, MA, RDA                EMIR          EMIR

The description of the audit trail should be sufficient to demonstrate that reconciliation of
summary amounts certified to the Commission (See point 0) with the individual
expenditure records and supporting documents held at the various administrative levels,
by final beneficiaries, and by the bodies or firms carrying out the operations is possible.
Instructions on retention of documents necessary for audit trail by administrative levels
and beneficiaries
Have instructions been given on retention of supporting documents for claims by
beneficiaries (para.1 and 3 of Annex I Reg. No 438/2001 and Reg. No 1260/99: Art.38)
(Indicate form and reference)?
The Decree No. 233/2003. (XII.16.) (Art. 53. Par. (1)) determines the obligation of
keeping all documents related to the utilisation of Funds for a period of at least 3 years
after the final financial settlement of the program by the European Commission taking
into consideration also the provisions of the accounting regulations. Furthermore, the
beneficiaries are obliged to keep all of the documents defined in the grant contracts.

Describe how the national legislation regarding the retention of documents ensures
compliance with EU requirements (provide references).
The Hungarian legislation Decree 233/2003. (XII.16.) – attached as an annex to this
document - ensures full compliance with EU requirements in this respect.

In what format are these documents to be held, e.g., original, microfiche, electronic
version (Reg. No1260/99: art 38(6); Reg. No 438/2001: art 7 as amended by Reg. No
2355/2002) ?
All documents will be kept original, and whenever possible also in electronic version.
Describe the procedure for recording the name of the body holding the supporting
documents, its location and the person responsible.
The supporting documents are in archives, two copies are preserved by the Regional
Development Agencies, one copy is filed by Managing Authority, VÁTI Central Office
and VÁTI regional representations have each one copy.

				
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