Coordinated control of funds for financing projects carried out under the Operational Programme of Cross-border Cooperation Czech Republic - Poland 2007-2013
INTRODUCTION
The emerging community of Europe's population is the driving force behind cross-border cooperation as an integral part of the wider territorial cooperation that has been part of our lives for the last 20 years.
So let this community provide the opening word for this joint report of the two highest control institutions of neighbouring countries:
′′ 185 million EU citizens (i.e. 37 % of the population) live in border areas.
These areas are usually underdeveloped and peripheral territories, often the remains of the darker parts of Europe's history.
The main aim of cross-border cooperation is to help to mitigate the existence of borders as administrative, legal and physical barriers and to further help develop the dormant potential of border regions.
Programmes cover various border regions: some cover seaside areas, other inland borders within the EU or borders shared with candidate countries.
Most programs are bilateral, but some include more than two neighboring countries."
The programmes last seven years and a total of 5,7 billion is earmarked from the EU budget. EUR
′′ The programmes cover the following activities: repairs and reconstruction of cross-border roads, cycling trails and bridges, investments in cross-border waste management systems, medical facilities, research centres, flood measures, etc., common management of natural sites or tourist goals, development of common services for the local population, employment advice, thematic networking and clusters for innovation.
Support from the program is provided on the condition that the organization from both sides of the border (for example regional authorities, universities or SMEs) combines to implement projects based on the needs of the border region.
Leaders of cooperating regions, relevant ministries and other local partners regularly meet and decide which projects will be supported.
This system should lead to a sustainable form of cooperation even after the program itself is finished.
Funds are provided with the condition that project partners from both sides of the border cooperate in a way that fulfils at least two of the following four characters: joint preparation, joint implementation, joint staff, joint financing."
Within the partnership, tasks and responsibilities for the preparation, implementation, financing and control of project activities are clearly defined and distributed to the relevant partners.
Among the main attributes of partnership include: Joint Leader's Choice, Joint Project Development and Application, Joint Partnership Agreement signed by all partners, taking over overall responsibility for the implementation of the project by the leading partner, total payment of support receives by the partner and executes their transfer to the relevant project partners.
Eligible projects carried out in the territory of regions and voivodeship adjacent to a common border may be supported.
OBJECTIVES AND SCOPE OF CHECK
On 11. December 2007, the European Commission (EC) approved the operation programme of cross-border cooperation Czech Republic - Poland 2007-2013 (OPPS Czech-POL).
258 187 467 €. has been earmarked for the implementation of the operational programme.
The total amount included a contribution from the European Funds (ERDF) totalling 459 219 344 (85 %) to be exhausted by the end of 2015.
Financial data on the drawing of EU funds from the Cross-border Cooperation Operational Programme Czech Republic - Poland 2007-2013 at the end of 2013 are given in the following table:
The agreement on cooperation of the highest control institutions of the Czech Republic (NKU) and the Republic of Poland (NIK) was concluded by the presidents of both offices on 27. February 2013 following previous negotiations at the meeting of the heads of the highest control institutions of the Visegrad four, Austria and Slovenia in September 2012 in Lovasberény, Hungary.
The aim of the cooperation was to check whether the implementation of the operational programme is in accordance with the legislation and with binding programming documents or agreements, whether the management and control system works reliably, whether the operational programme goals are achieved and whether the selected projects are implemented in accordance with the specified conditions of the aid granted I'm sorry.
This cooperation took a form of parallel control, whereby the inspection authorities independently examined topics whose content was discussed in advance by their legal mandate.
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The inspection carried out also included elements of the performance audit.
The selected topics were tested on a sample of projects with project partners on both sides of the border.
The results of the checks carried out were the checks foundations published in the usual way by both authorities.
Based on both control conclusions set out in the Annex, this Joint Report was created.
The selected common control sample included six projects (Annex 1) that fall within the aid area 1.1-Strengthening transport availability and support area 2.2-Supporting tourism development.
Before the start of the inspection, the drawing of funds from these two areas of support accounted for more than 60 % of the funds paid to beneficiaries by the end of 2012 from ERDF for all projects implemented throughout the OPPS Czech Republic-POL.
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In addition to checking a common sample of six projects, NKÚ checked 13 other projects and NIK two more (all from support area 1.1 and 2.2).
The funds paid to beneficiaries of ERDF aid, controlled by NKÚ and NIK, amounted to a total of 362 25 (NKÚ) and 174 8 (NIK).
The controlled amount of funds accounted for 41 % of all funds paid to the beneficiaries of the aid areas 1.1 and 2.2.
MAIN CONTROL CONCLUSIONS
Both checks independently carried out by NKÚ on the Czech side and NIK on the Polish side showed that the level of identified irregularities did not exceed the level of importance.
The implementation of OPPS Czech Republic-POL, involving the functioning of the management and control system and the implementation of selected projects, was successful.
Controlled persons, who were part of the management and control system, took steps to reduce the risk of misuse of funds and unused ERDF funds provided.
Proof of the effectiveness of the projects implemented under the operational programme is the high level of achievement of the set goals, which were supported by the results of the social evaluation of project implementation.
SUMMARY OF CHECK RESULTS
And. Assessment of the management and control system
A coordinated approach enabled the control and control system of the OPPS Czech Republic-POL implemented by the following institutions in both countries: managing authority (Ministry of Local Development of the Czech Republic), national coordinator (Ministry of Local Development POL) and controllers (Center for Regional Development and Voivodeship).
At the same time, the coordinated audit enabled the evaluation of tasks and functions carried out by the Joint Technical Secretariat and the Monitoring Committee.
During the evaluation of the management system, the inspection focused on the activities carried out in connection with the set-up and performance of the function of the managing authority and the national coordinator, especially in the context of setting the programme's goals and monitoring of progress, evaluation activities and annual reports, evaluation, selection and approval project applications, drawing up program funds and fulfilling the obligation to publish correct, complete and up-to-date information on subsidies, further with the control activities of the managing authority, setting up the performance of the activities and output from the audits of the delegated audit body, and with the reporting and monitoring system of irregularities and compliance with the irregularities monitoring, at the same time it has been verified coordination of tasks and cooperation between institutions involved in the OPPS Czech Republic-POL.
The activities of the competent authorities in the field of risk analysis and the compilation of project monitoring plans were further examined and evaluation of project applications carried out by independent evaluators was assessed.
Verification of the control system included a review of administrative checks and on-the-spot checks, which allowed approval, e.g. supply of goods and co-financed services, eligibility of expenses submitted for reimbursement, while consistency of the payment of such funds and related activities (or parts thereof) with national and EU legislation.
Significant shortcomings have been identified by NKÚ control in the area of publishing correct, complete and up-to-date information on subsidies provided.
In the area of evaluation and approval of projects, the risk of non-transparentness of the process was identified.
Other shortcomings were identified in the area of monitoring indicators settings and in the settings of irregularity reporting system.
Based on these findings, the Supreme Supervisory Authority evaluated the control and management system implemented by the managing authority as partially effective.
Irregularities identified by NIK regarding the functioning of the management and control system in Poland in relation to violations of applicable laws and rules were not considered significant.
These irregularities only affected individual projects and did not have a significant impact on the implementation of the whole OPPS Czech Republic-POL.
Despite identified irregularities, NIK evaluated the functioning of the system positively.
B. Assessment of project results
The check did not show a contradiction between indicators and targets set for individual projects and those defined by the operational programme.
Expected results were achieved in all projects, funded activities were implemented and the indicators (measurable parameters) set out in the project applications of the operational programme were met.
The check conclusions are in line with the result of the survey of the social evaluation of projects described below in the text.
An important aspect that NKÚ and NIK have given attention to in their conclusions is the limited possibility of objective evaluation of the project's performance with regard to project goals and at the same time to the aims of the entire operational programme.
The Supreme Supervisory Chamber initiative took place in the summer of 2013 at the place of implementation of projects selected for the common control sample.
The survey and evaluation was carried out by the School of Higher Vocational Training in Nyse (Poland).
After agreement with the Supreme Supervisory Authority, the investigation was carried out on both sides of the border between 2 820 respondents, both with the public in Poland in relation to part of the project implemented by Polish project partners and with the Czech public in relation to the part of the project implemented in Czech Republic.
The survey mainly covered the suitability, quality, exchange of information, use of funds and social function of projects including investments made.
The number of respondents for each project is shown in Annex 2.
The survey response assessment suggested that the overall social evaluation of projects was good and reached a 4,8 point (on a scale with a maximum of 8 points), which means that the project results were positively perceived by most respondents both in terms of goals and according to other parameters specified in project applications.
According to respondents, the projects examined met the criteria expressed in the operational programme.
Respondents also noticed the positive impact of investments on improving the quality of transport and tourist infrastructure, accessibility, tourist attractiveness, business conditions, quality of life of citizens and renewal of contacts between residents of the border region.
On the other hand, the overall evaluation of the answers suggested a certain difference between the actual level of achievement of the goals / parameters (actual impact rate) and the expected respondents.
This difference applies to evaluation of the results of individual projects, where in some cases there is a significant difference.
The results of the survey were in line with the views of participants in panel discussions (target groups) conducted in the context of the NIK control on the Polish side, who highlighted the need for project implementation and confirmed their positive acceptance by the public and the expected results.
C. Assessment of the legality of controlled projects
The beneficiaries of the aid examined the consistency of the factual and time implementation of the project schedule and the content of the project application, further examination of the achievement of the set goals and purpose of the project, fulfilment of binding monitoring indicators, management of changes in projects, management of possible project revenue, fulfilment of the obligation separated project accounting records transaction, compliance with the ban on financing projects from other EU sources, implementation of project partnerships and compliance with its conditions, fulfilment of compulsory publicity regarding in particular the spread of awareness of sources of financing projects from the EU, compliance with the conditions of eligibility of project expenditure, selection of suppliers and verification of suppliers delivered on the basis of public awarded orders.
The total financial value of the shortcomings of qualified NKÚ and NIK as unfit for funding from EU funds was found at 094 85
However, this amount did not exceed the specified level of importance related to the total controlled amount of funds for sample projects.
Despite the discrepancies identified, NKÚ and NIK evaluated the implementation of selected projects positively.
In most cases, the commitments resulting from the conditions of the aid were properly fulfilled by the beneficiary.
Funds intended for the implementation of controlled projects were spent in accordance with EU regulations and national law.
Nonetheless, seven of the eight beneficiaries of the aid controlled by NIK were found to be inconsistencies in the fulfilment of factual and financial commitments.
These were individual cases of non-systemic nature and were concerned especially inconsistent preparation of project documentation and violation of public procurement rules, but did not affect the selection of contractors or supply of contracted works.
Only in one of all projects controlled by NIK can the discrepancies detected as an unfit spending of PLN 43 003 of which was financed by z 8 ERDF).
On the other hand of the border, the NKÚ identified in three of the 19 controlled projects ineligible spending of CZK 2 098 (of which 863 76 financed by the ERDF).
Irregularities included non-delivery of paid material and works or expenses for modernizing property owned by a person who had no connection to the project or as a beneficiary of the aid or as a project partner.
RECOMMENDATIONS
Joint recommendation of the NKÚ and NIK concerns the improvement of the monitoring system especially with regard to the consistent determination of proper monitoring indicators for all specific objectives of the priority axis of the operational programme.
In general, it is also necessary to aim to identify such indicators at program level and projects to enable more reliable verification of the performance of the established impacts.
Notes and recommendations resulting from checks carried out on both sides of the border are included in separate check conclusions of NKÚ and NIK on CD.
COMMUNICS
The report was drawn up in Czech, English and Polish languages and signed by presidents of the highest inspection institutions of the Czech Republic and the Polish Republic.
