Coordinated control of funds intended for financing projects implemented under the Operational Programme of Cross-border Cooperation Czech Republic – Polish Republic 2007–2013
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The emerging community of Europe's population is the driving force of cross-border cooperation as an integral part of the wider territorial cooperation, which is part of our lives of the last 20 years.
Therefore, let this community provide an introductory word to this common report of two supreme audit institutions adjacent to the countries:
“185 million EU citizens (i.e. 37% of the population) live in border areas.
These areas are usually a few developed and marginal areas, often the remains of the darker parts of the history of Europe.
The main objective of cross-border cooperation is to help mitigate the existence of borders as administrative, legal and physical barriers and further help the development of existing potential of border regions.
Programs cover various border regions: some cover seaside areas, other inland borders within the EU or the border shared with candidate countries.
Most programs are bilateral, but some include more than two neighbouring countries.”
The programmes last seven years and a total of 5.7 billion will be allocated on them from the EU budget. EUR.
“Programmes include the following activities: repairs and reconstruction of cross-border roads, cycling trails and bridges, investments in cross-border waste management systems, healthcare facilities, research centres, flood measures, etc., joint administration of natural locations or development of tourist destinations, development of joint services for locals, consultancy on employment issues, creating thematic networks and clusters for innovation.
Support from the programme is provided under the condition that organizations from both sides of the border (e.g. regional authorities, universities or small and medium-sized enterprises) will join the implementation of projects based on the needs of the border region.
Representatives of cooperating regions, relevant ministries and other local partners meet regularly and decide which projects will be supported.
This system should lead to a sustainable form of cooperation even after the program itself ends.
Funds are provided with the condition that project partners from both sides of the border cooperate in a way that fills at least two of the following four characters: common preparation, joint implementation, common staff, joint financing.”
As part of the partnership, tasks and responsibility for the preparation, implementation, financing and control of the project activities are clearly defined and divided into relevant partners.
The main attributes of the partnership include: a common choice of a partner's head, a joint preparation of the project and a application, a joint agreement on partnership signed by all partners, taking over the overall responsibility for the implementation of the project by the head of the partner, the total payment of support accepts the leading partner and performs their transfer to the relevant project partners.
The eligible projects implemented in the regions and Voivodeship adjacent to the common border may be supported.
CONTROL AND ROZSAH CONTROL
On 11 December 2007, the European Commission (EC) approved the Operational Programme of Cross-border Cooperation Czech Republic – Polish Republic 2007–2013 (OPPS ČR–POL).
258 187 467 € were allocated to the implementation of the Operational Programme.
The total sum contained a contribution from European funds (ERDF) in the total amount of 219 459 344 € (85%), which must be exhausted by the end of 2015.
Financial data on the drawdown of EU funds from the Operational Programme cross-border cooperation Czech Republic – Polish Republic 2007–2013 at the end of 2013 are listed in the following table:
The agreement on cooperation of the highest audit institutions of the Czech Republic (NKÚ) and the Polish Republic (NIK) was concluded by the presidents of both authorities on 27 February 2013 after previous mutual negotiations at the meeting of the head of the highest audit institutions of the Visegrad Four, Austria and Slovenia, which took place in September 2012 in Lovasberen in Hungary.
The aim of the cooperation was to examine whether the implementation of the Operational Programme takes place in accordance with the legal regulations and with binding programme documents or agreements whether the control and control system works reliably whether the objectives of the Operational Programme are achieved and whether selected projects are implemented in accordance with the specified conditions provided by the support.
This cooperation had a form of parallel control, during which the audit authorities were independently examined by topics whose content was discussed in advance together.
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The control also included elements of performance audit.
Selected topics were verified on the sample of projects for project partners on both sides of the border.
The result of the audits carried out was the audit conclusions published in the usual way by both authorities.
Based on both control conclusions referred to in the Annex, this joint report was created.
The selected joint control sample included six projects (Annex 1), which fall into the area of support 1.1 – Strengthening traffic availability and support area 2.2 – Support for tourism development.
Prior to the start of the audit, the drawdown of funds from these two areas of support was more than 60% of funds paid by the recipients by the end of 2012 from the ERDF for all implemented projects throughout the OPPS CR–POL.
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In addition to the control of the joint sample of six projects, the SAO audited another 13 projects and NIK two more (all of the support areas 1.1 and 2.2).
The funds paid by the beneficiaries from the ERDF, which were controlled by the SAO and NIK, reached a total amount of 25 362 174 € (NKÚ) and 8 450 784 € (NIK).
The audited volume of funds represented 41% of all funds paid to beneficiaries from the areas of support 1.1 and 2.2.
MAIN CONTROL FACILITIES
Both inspections independently carried out the SAO on the Czech side and NIK on the Polish side showed that the level of identified irregularities did not exceed the level of significance.
Implementation of the OPPS CR–POL, including the functioning of the control and control system and the implementation of selected projects, was successful.
The audited persons who have been part of the control and control system have taken steps leading to the restriction of the risk of incorrect use of funds and the use of the funds provided from the ERDF.
The proof of efficiency of implemented projects within the Operational Programme is the high level of fulfilment of the set goals supported by the results of the social evaluation of the implementation of projects.
SHRNUTÍ RESULTS CONTROLES
A. Evaluation of the control and control system
The coordinated approach enabled the control and control system OPPS ČR–POL implemented by the following institutions in both countries: the control body (Ministry for Regional Development of the Czech Republic), national coordinator (Ministry for Regional Development POL) and auditors (Centre for Regional Development and Voivodeship).
The coordinated audit also enabled the evaluation of tasks and functions implemented by the joint technical secretariat and monitoring committee.
During the evaluation of the control system, the control focused on activities carried out in connection with the setting and performance of the function of the control body and national coordinator, especially in connection with setting the objectives of the program and monitoring the achieved progress, evaluation activities and annual reports, assessment, evaluation, selection and approval of project applications, drawing of program funds and fulfilling the obligation to publish the correct, complete and up-to-date information about subsidies, as well as control activities of the control body, setting up the performance of activities and outputs from audits authorized by the audit entity and with the system of reporting and monitoring of irregularities and its compliance, at the same time was verified coordination of tasks and cooperation between institutions involved in the OPPS CR–POL.
Furthermore, the activities of the relevant authorities in the field of risk analysis and the assembly of plans for inspections in the place of implementation of projects and the evaluation of project applications were assessed by independent evaluators.
The verification of the control system included a review of administrative inspections and inspections carried out on the site that enabled approval e.g. deliveries of goods and co-financed services, competence of expenditure submitted to reimbursement and the compliance of the payment of these funds and related activities (or their parts) with national legislation and EU legislation.
Significant deficiencies were found to control the SAO in the field of publication of the correct, complete and current information on the subsidies provided.
The risk of non-transparency of this process has been found in the evaluation and approval of projects.
Other deficiencies were found in the field of monitoring monitoring indicators and in the system of reports of irregularities.
Based on these findings, the Supreme Audit Office (SAO) assessed the control and control system implemented by the control body as partially effective.
The discrepancies identified by NIK, which concerned the functioning of the control and control system in Poland in relation to the violation of applicable laws and rules, were not evaluated as significant.
These inconsistencies had an impact only on individual projects and did not have a substantial impact on the implementation of the entire OPPS CR–POL.
Despite the identified irregularities, NIK evaluated the functioning of the system positively.
B. Evaluation of project results
The control did not prove the conflict between indicators and targets set out for individual projects and those defined by the operating program.
In all audited projects, expected results were achieved, financed activities were implemented and indicators (measurable parameters) set out in the project applications of the operating programme were fulfilled.
The auditing conclusions are in accordance with the result of the survey of social evaluation of the implementation of projects described further in the text.
An important aspect, which the SAO and NIK paid attention to in their conclusions, is a limited possibility of objective evaluation of the performance of the expected results of individual projects with regard to the objectives of individual projects and at the same time on the objectives of the entire operating programme.
The Supreme Audit Chamber's initiative took place a public opinion survey, which took place in the summer of 2013 in the place of realization of projects selected in the joint control sample.
The survey and its evaluation was carried out by the School of Higher Vocational Education in Nyse (Poland).
After agreement with the Supreme Audit Office, the investigation was carried out on both sides of the border between 2 820 respondents, both in the public in Poland in relation to the part of the project implemented by Polish project partners, as well as in the Czech public in relation to the part of the project implemented in the Czech Republic.
The survey concerned mainly suitability, quality, exchange of information, use of funds and social functions of projects, including implemented investments.
The number of respondents for individual projects is specified in Annex 2.
The assessment of the response from the survey suggested that the overall social evaluation of the projects was good and the value of 4.8 point (on a scale with a maximum of 8 points) was achieved, meaning that the results of the projects were positively perceived mostly by respondents both with regard to the goals and according to other parameters referred to in the project applications.
According to the respondents, the examined projects were examined expressed in the Operational Programme.
Respondents also noticed a positive impact of investment on improving the quality of transport and tourist infrastructure, transport availability, tourist attractions, business conditions, quality of life of citizens and renewal of contacts between the inhabitants of the border region.
On the other hand, it indicated the overall evaluation of responses certain difference between the actual level of fulfilment of goals/parameters (real impact rate) and the level of expected respondents.
This difference applies to the evaluation of the results of individual projects, where in some cases there is a significant difference.
The results of the survey were in accordance with the opinions of the participants of panel discussions (target groups) carried out within the framework of NIK control on the Polish side, who pointed out the need for realization of projects and confirmed their positive acceptance of the public and the performance of the expected results.
C. Evaluation of legality of audited projects
For support recipients, the compliance of the material and time implementation of the project with schedule and content of the project application was examined, the performance of the set goals and the purpose of the project was verified, fulfilling binding monitoring indicators, management of changes in projects, handling of the project's income, fulfilling the obligation of a separate accounting register of project transactions, compliance with the ban on financing projects from other EU sources, implementation of project partnership and compliance with its conditions, fulfilling compulsory publicity concerning the dissemination of awareness of sources of financing projects from the EU, compliance with the conditions of competence of project expenditure, picking suppliers and verifying the delivered performance on the basis of public procurement.
The total financial value of qualified SAO and NIK deficiencies as expenditure of an eligible financing from EU funds was found in the amount of 85 094 €.
However, this amount exceeded the specified level of significance related to the overall controlled volume of funds for the project sample.
Despite the founding inconsistencies, the SAO and NIK assessed the implementation of selected projects of beneficiaries positively.
In most cases, the obligations arising from the conditions of support for the recipient were properly fulfilled.
The funds intended for implementation of audited projects were spent in accordance with EU and national law regulations.
Nevertheless, in seven of the eight recipients of support controlled by NIK, irregularities in the performance of material and financial obligations were found.
It was individual cases of non-systemic nature and concerned particularly inconsistent preparation of project documentation and violation of rules for public procurement, which had no impact on the selection of a supplier or delivery of contractually agreed work.
Only in one of all projects controlled by NIK can be detected inconsistency that concerned not fulfilling the obligation in the field of reporting, evaluated as an unused expenditure in the amount of 43 003 PLN (of which 8 231 € financed from the ERDF).
On the other hand, the SAO identified the SAO in three of the 19 audited projects did not cause an eligible expenditure of 2 098 053 CZK (of which 76 863 € financed from the ERDF).
Inconsistencies included non-delivery of paid material and work or expenditure for the modernization of the property owned by the person who did not have a binding on the project or as a recipient of support, nor as a project partner.
CANCELLATION
The joint recommendation of the SAO 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 operational programme priority axis.
Generally, it is also necessary to strive to determine such indicators at the level of the program and projects that allow more reliable verification of the performance of the specified impacts.
Notes and recommendations arising from checks carried out on both sides of the border are included in separate control conclusions of the SAO and NIK on CD.
COMMUNICED
The report was prepared in Czech, English and Polish and signed by the presidents of the highest audit institutions of the Czech Republic and the Polish Republic.
