Annexes to COM(2010)622 - ANNUAL REPORT ON THE INSTRUMENT FOR STRUCTURAL POLICIES FOR PRE-ACCESSION (ISPA) 2009 SEC(2010)1304 final - Main contents
Please note
This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2010)622 - ANNUAL REPORT ON THE INSTRUMENT FOR STRUCTURAL POLICIES FOR PRE-ACCESSION (ISPA) 2009 SEC(2010)1304 final. |
|---|---|
| document | COM(2010)622  |
| date | November 4, 2010 |
The audit unit of DG REGIO originally planned to carry out an audit of ISPA projects in Croatia during 2009. The intention was to ensure that the information concerning the execution and financial flows related to ISPA projects provides assurance as regards: 1) the legality and regularity of expenditure declarations to the Commission; 2) compliance with EU policies, in particular as regards publicity requirements; 3) compliance with the principles of a sound financial management. However, due to a variety of reasons the audit had to be put back until early 2010.
The main focus of attention for the audit unit in 2009 was on activities connected with the launch of the IPA[4]. Despite not carrying out any missions to Croatia in 2009 the audit unit (and the EU Delegation) continued to apply pressure on the Croatian authorities to improve their institutional capacity by continuing the recruitment and training of staff.
The EU Delegation in Zagreb continued as the main mechanism for ensuring sound financial management and control. The rejection rate for ISPA documents continues to be high which is a clear sign that still more work needs to be carried out by the Croatian authorities before confidence exists of their ability to correctly manage ISPA funds independently. It should be noted in this context that the EU Delegation remains understaffed following further unsuccessful recruitment attempts and this, combined with the significantly increased workload related to IPA activities, has placed a huge strain and workload on the staff of the Delegation.
DIS
The requirement for the DIS (Decentralised Implementation System) accreditation of the implementing agency in Croatia, the CFCA, follows the provision of Article 164 of the Financial Regulation[5]. DIS accreditation was awarded by the Commission on 13th February 2006.
EDIS
Since ISPA ended in 2006 with the introduction of the Instrument for Pre Accession (IPA) the purpose of moving ISPA to EDIS (using the Extended Decentralised management Implementation System – EDIS with only ex-post control by the Commission) has become superfluous. Recent efforts by the Croatian authorities have therefore been concentrated on preparing the IPA structures for the move to EDIS as these structures will be in place for the foreseeable future until accession. In the meantime the EU Delegation in Croatia continues to perform its important role in supervising the daily management, implementation and monitoring of the ISPA measures.
16. RISK ASSESSMENT
The audit strategy planned for 2009 was based on the results of an analysis of the state of ISPA implementation and the related objectives of the Audit Directorate of Directorate General for Regional Policy. The audit strategy sets out the objectives which are defined by the senior management of Directorate General for Regional Policy. These objectives are defined on the basis of detailed discussions with the operational directorates during which information on potential risk is shared. The audit strategy then sets out the actions to achieve the objectives, taking account of the risks identified. In general, risk is minimized by implementing this strategy. Despite originally planning to carry out an audit of ISPA in Croatia during 2009, none were carried out. The planned audit has been rescheduled to take place in early 2010.
Under the system of ex-ante approval, priority is given to ensuring that sufficient control procedures are put in place regarding project implementation and payments. However, the management of pre-accession funds carries an inherent risk since the funds are delivered by a variety of organisations and systems. Eligibility of expenditure is determined by compliance with rules and conditions fixed at EU and national level which can lead to complexity and risk of misinterpretation.
17. EUROPEAN COURT OF AUDITORS FINDINGS
No missions or audits were carried out in Croatia during 2009.
18. CO-FINANCING PARTNERS – EIB AND EBRD
Given their expertise in project preparation and implementation, the Commission has maintained regular contact with these lending institutions, both at a horizontal level to co-ordinate policy and methodological issues related to programming and implementation, and at country level. The specialist skills of these Banks in structuring grant/loan combinations of funding, including public-private partnership arrangements, is highly useful for improving the quality of projects funded from ISPA. Nevertheless, the European Investment Bank is not involved in any ISPA project in Croatia.
The European Bank of Reconstruction and Development is the only International Financial Institution which is actively involved in an ISPA project in Croatia with the provision of a EUR 10 million loan for an environmental project approved in 2005 – the Karlovac Water and Wastewater Treatment Programme. Representatives of the EBRD therefore took part in both ISPA Monitoring Committees held in Croatia in 2009.
Contribution to European Union policies
19. PUBLIC PROCUREMENT
The fulfilment of the legal requirements for sound, fair and transparent public procurement as enshrined in the PRAG rules has proved to be a major challenge in the implementation of ISPA projects. Difficulties in ensuring compliance with EU procurement principles have led to delays in the implementation of ISPA projects and in several cases, the repeating of tenders. It has therefore continued to be necessary for the Commission services - especially the EU Delegation in Zagreb - to intervene to ensure that procedures were correctly applied and errors rectified. In addition on occasion it has had to assist the Implementing Agency in liaising with dissatisfied bidders. Overall the quality of the tender documents has improved, but this improvement is somewhat erratic.
The ex-ante approval by the Commission, which governs the tendering and contracting of ISPA projects, continues to be entirely justified as plans to move to EDIS have now been dropped (see above). Under the current ex-ante system of approval and in line with the DIS decision for the conferral of management, only the CFCA plays the role of the contracting authority responsible for project implementation, whereas the Commission endorses each step of the procurement process. It follows that, although the Commission is not a contracting partner, it bears shared responsibility for the procedural correctness of the procurement process (without the Commission’s approval, contracts concluded between beneficiaries and contractors are not valid).
20. COMPETITION POLICY
As ISPA assistance is directed primarily to cover public expenditure - or equivalent - concerning utility projects, this does not generally raise problems of incompatibility with the EU rules on competition. Unless the rules on public procurement are infringed, and provided free access to such infrastructure is guaranteed for all operators meeting the necessary technical and legal conditions, such assistance does not confer any special advantage to specific firms.
21. ENVIRONMENT POLICY
By providing direct assistance to priority projects for the environment, ISPA also contributes to the implementation of environmental policy and to the compliance with EU standards in Croatia. Experience gained through project development and implementation develops administrative capacity and accelerates sector reform in the environment sector. In particular, administrative capacity is being strengthened with regard to environmental investment planning and prioritisation. Steady progress has also been made in the correct implementation of the EIA directive[6], particularly the aspects related to public consultation. It is hoped that ISPA will in these ways contribute towards progress in environmental protection in Croatia.
It is important to emphasise that, as far as Croatia is concerned, the introduction of IPA, with its greater number of bodies and a stream of additional projects, the provision of sufficient financial and human resources for implementation (including monitoring, inspection, the provision of permits and reporting) needs to be ensured.
22. TRANSPORT POLICY
The transport networks in Croatia, agreed in accordance with TINA (Transport Infrastructure Needs Assessment) and REBIS (Regional Balkans Infrastructure Study) were constructed around the framework of pan-European corridors. Several of them run across the territory of Croatia including Corridors VII (the Danube river), X (Salzburg-Ljubljana-Zagreb-Beograd-Nis-Skopje-Veles-Thessaloniki, including branch Xa) as well as Corridor V, which has two branches in Croatia (Vb - Budapest, Zagreb Rijeka, and Vc - Budapest, Sarajevo, Ploče). These networks were used as the planning basis for the national transport strategy for ISPA purposes. As a consequence the single ISPA transport (railway) project forms part of the TINA and REBIS networks, i.e. it concerns the construction or rehabilitation of a section, nodal point or access relating to the networks. The TEN-T networks for Croatia are based on SEETO (South East Europe Transport Observatory) recommendations.
Co-ordination among pre-accession instruments
Co-ordination with EU Delegations
Periodic meetings were organised by the Commission services (DGs Enlargement, External Relations and Regional Policy) with the experts in the Delegations responsible for PHARE and ISPA to discuss programming and implementation issues, in particular those related to tendering and contracting.
Co-ordination with the IPA instrument
In order to ensure the efficient coordination of activities and the prevention of any duplication, the two ISPA Monitoring Committees held in Croatia in 2009 were organised taking into consideration issues relating to the Regional Development component of IPA. 2 of the technical assistance measures being funded through ISPA relate to the preparation of project pipelines for implementation using IPA co-finance.
23. PUBLICITY ACTIONS
No significant publicity actions took place in 2009 with regard to the ISPA projects.
[1] No projects have been approved since 2006 due to the ending in that year of the ISPA programme.
[2] SEC(2008) 415 of 28.3.2008
[3] Council Regulation (EC) No 1267/1999 of 21 June 1999 establishing an Instrument for Structural Policies for Pre-accession [OJ L 161, 26.6.1999, p. 73].
[4] The main focus of audit unit in 2009 was to seek reasonable assurance that the systems for the management and control of IPA projects continue to comply with the requirements of the applicable regulations and function effectively.
[5] Provision, however, deleted as of 1 May 2007 by Regulation (EC, Euratom) No 1995/2006 [OJ L 390, 30.12.2006, p. 1].
[6] Council Directive 85/337/EEC of 27 June 1985 on the assessment of the effects of certain public and private projects on the environment [OJ L 175, 5.7.1985, p. 40].