Addressing challenges linked with Structural Funds
Summary of the 2nd High Level Group meetingBrussels, 28 June 2016 | Published in Energy, Economy
The High Level Group (HLG) set by the European Commission in 2015 is responsible for monitoring the simplification for beneficiaries of the ESI Funds. This is the second edition of recommendations.
In 2015-2016, the High Level Group (HLG) addresses administrative bottlenecks that have been identified in the access to the ESI Funds as well as promote good practices in different areas. In March the group gave propositions on simplified costs options about which we reported (link at the bottom of the page).
The meeting on 23 June tackled different issues including the “goldplating” practice problem. Areas where the issue is arising include audit of the management authorities. The zero-error and zero-fraud management rationale put a burden on beneficiaries.
Propositions of the Group:
- Subsidiarity should be better applied: giving more space to act to Member States with predefined rules on what, when and how projects would be audited and they would be binding for all levels. And the Commission should move its priority from a control of the regularity of expenses to a result oriented type of audit.
- On the question of how far the ESIF should be subject to EU state aid policy, the HLG believes that if the Commission could propose a derogation with regards to the Investment Plan for Europe and EFSI, and to funding directly managed by the Commission such as through Horizon 2020 programme, this should be possible also for ESI funds, at least for the similar projects.
Regarding delayed timetable in implementing the OPs: In 2016 some managing authorities are still in the process of being appointed, the majority of OPs have only been started spending, some interpretation notes e.g. on financial instruments are still pending
Propositions of the Group:
- ESIF legislation for post 2020 should be streamlined to a coherent package of regulations – now it is both difficult to read and understand the CPR alone and the specific regulations in addition (Post 2020 simpler implementation framework –summer 2017)
-EC will prepare a draft legislation package at the end of 2016, The Council and the Parliament should approve it by mid/end of 2018
- The HLG also proposes a stricter deadline for the completion of OPs negotiation between OPs and member states as well as a fixed deadline for ex post controls on closed Ops.
- Surprisingly the group also proposes that instead of more guidance notes, a wide dissemination of good practices implemented in member states
- Further the group suggests to introduce a non-retroactive effect in the implementation of regulations or of interpretation guidance by the Commission, member states and audit authorities.
Concerning public procurement (PP), gold-plating issue is also relevant here. RCA data shows that 48% of ESIF are spent through public procurement and shows high levels of errors in this field.The main problems include lack of planning regarding the acquisitions necessary for project implementation, difficulties in selecting the procedure (the most used procedure is open tender, regardless of the complexity of the acquisition); incomplete, poor quality of tender documents; errors in the evaluation processes; incomplete award communication.
However, the recently adopted new PP Directive should bring more effectiveness.
- The PP texts should be directly applicable in the MS in order to avoid national transposition processes and an overproduction of national regulations
- In the audit of PP, EC could introduce less formalized procedures concerning expenditure of smaller values. Also the group proposes more ex-ante, preventive audits than ex-post in order to reduce the level of the financial corrections and to provide input for future procedures (objective: to improve the implementation and not to punish)
- The HLG suggests, that any new decision by the European Commission that identifies applicable sanctions should not have a retroactive effect but should only concern those projects starting from the date of the decision.
As far as monitoring and evaluation are concerned, the HLG welcomes the result-led approach of the Commission, however the different individual fund regulations foresee different provisions in monitoring, which generates complexity (Each operation is linked to a very high number of indicators). Therefore, the indicators needed to be collected from each ESF projects' participant is burdensome.
- elements that do not reflect a result led approach (e.g. accounts and financial data) should be deleted
- reporting mechanisms between ERDF and ESF should be aligned
- The EC should reduce the number of indicators and harmonize the existing ones-this clearly needs the revision of ERDF and ESF regulations
Member States should not impose additional reporting requirements on beneficiaries-reporting should made easier online.