Coordinated control of funding for projects implemented under the Operational Programme of cross-border cooperation Czech Republic-Poland 2007-2013
INTRODUCTION
Europe's emerging community is a driving force for cross-border cooperation as an integral part of the broader territorial cooperation that has been a part of our lives for the past 20 years.
So let this community give an introductory statement to this joint report by the two Supreme Audit Institutions of neighbouring countries:
"185 million EU citizens (that is, 37% of the population) live in border areas.
These areas are usually underdeveloped and marginal territories, often a relic of darker parts of Europe's history.
The main objective of cross-border cooperation is helping to alleviate the existence of borders as administrative, legal and physical barriers and to further help the development of the slumbering potential of the border regions.
The programmes cover different border regions: some cover coastal 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 are allocated a total of EUR 5.7 billion from the EU budget.
"Programs include the following activities: repair and reconstruction of cross-border roads, bike paths and bridges, investment in cross-border waste systems, medical facilities, research centres, anti-flood measures, etc., joint management of natural sites or the development of tourist destinations, development of joint services for the local population, advising on matters of employment, the creation of thematic networks and clusters for innovation.
Support from the programme shall be granted on condition that organisations from both sides of the border (such as regional authorities, universities or SMEs) join together to implement projects based on the needs of the border region.
Representatives of the cooperating regions, the relevant ministries and other local partners to meet regularly and decide, which projects will be supported.
This system should lead to a sustainable form of cooperation even after the programme itself ends.
Funds are granted with the condition that the project partners from both sides of the border cooperate in a way that fulfills at least two of the following four characters: joint development, joint implementation, joint personnel, joint financing.“
In the framework of the partnership are the tasks and the responsibility for the preparation, implementation, financing and control of the activities of the project clearly defined and distributed to relevant partners.
Among the main attributes of partnership include: the common choice of a leading partner, joint project preparation and application, the conclusion of the joint partnership agreement signed by all the partners, taking overall responsibility for the implementation of the project the lead partner, the total payment of the support receives the head of the partner and implementing their transfer to the competent partners of the project.
Eligible projects carried out in the territory of the regions and the Voivodeship adjacent to the common border may be supported.
OBJECTIVES AND SCOPE OF CONTROL
11. December 2007 approved by the European commission (EC) Operational programme of cross border cooperation Czech republic – republic of Poland 2007-2013 (op cbc CR–POL).
€258,187,467 were earmarked for the implementation of the Operational Programme.
The total included a contribution from the European funds (ERDF) totalling € 219,459,344 (85 %), which must be exhausted by the end of 2015.
Financial data on the use of EU funds from the Operational Programme of cross – border cooperation Czech Republic-Poland 2007-2013 at the end of 2013 are presented in the table below:
The cooperation agreement between the Supreme Audit Institutions of the Czech Republic (Sao) and the Republic of Poland (NIK) was concluded by the presidents of both offices on 27. February 2013 after the previous mutual negotiations at the meeting of the heads of the supreme audit institutions of the Visegrad four, Austria and Slovenia, which took place in September 2012 in Lovasberény, Hungary.
The aim of cooperation was to examine whether the implementation of the operational programme takes place in accordance with the legislation and with the binding programming documents or agreements, whether management and control system works reliably, whether they are achieved the objectives of the operational programme and whether the selected projects are implemented in accordance with the terms of the support provided.
This cooperation took the form of a parallel control in which the control authorities on the basis of its legal mandate to independently examine the topics, the content of which was in advance jointly discussed.
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The audit carried out also contained elements of the performance audit.
The selected topics were examined on a sample of projects by project partners on both sides of the border.
As a result of the checks carried out, the control conclusions published in the usual way by both authorities were published.
On the basis of the two control conclusions set out in the annex, this joint report was established.
The joint control sample selected included six projects (Annex 1) which fall under aid area 1.1 – strengthening transport accessibility and aid area 2.2 – promoting tourism development.
Before starting the checks represented a disbursement of funds from these two areas of support more than 60% of the funds reimbursed to the beneficiaries by the end of 2012 from the ERDF for all projects implemented in the framework of the entire op cbc CR–POL.
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In addition to checking the joint sample of six projects, the SAO has checked 13 more projects and two more (all from support 1.1 and 2.2).
The funds paid to the beneficiaries of the ERDF, which were controlled by the SAO and NIK, amounted to a total of € 25,362,174 (Sao) and € 8,450,784 (NIK).
The controlled volume of appropriations represented 41% of all appropriations paid to aid beneficiaries in the aid areas 1.1 and 2.2.
MAIN CONTROL CONCLUSIONS
The two checks, independently carried out by 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.
The implementation of the OPPS CR-POL, involving the operation of the management and control system and the implementation of selected projects, was successful.
Controlled entities, which were part of the management and control system, take steps to limit the risk of improper use of funds and underutilization of the resources granted from the ERDF.
Evidence of the effectiveness of the implemented projects in the framework of the operational programme is the high level objectives set, which has been supported by the results of the survey of social assessment of the implementation of projects.
SUMMARY OF CONTROL RESULTS
And. Evaluation of the management and control system
The coordinated approach allowed to perform the control of the management and control system applicable to the op cbc CR–POL embedded in the following institutions in both countries: the managing authority (the Ministry for regional development of the CZECH republic), national coordinator (Ministry for regional development POL) and supervisors (Center for regional development and the voivodship).
At the same time, a coordinated audit made it possible to evaluate the tasks and functions carried out by the Joint Technical Secretariat and the monitoring committee.
During the evaluation of the control system to the inspection focused on the activities carried out in connection with the setup and performance of the functions of the managing authority and the national coordinator, in particular in connection with the setting of programme objectives and monitoring of progress, evaluation of activities and annual reports, assessment, evaluation, selection and approval of project applications, the uptake of the programme and fulfilment of obligations to publish accurate, complete and current information about subsidies, further with the control activities of the managing authority, setting the performance of the activities and outputs of the audits of the designated audit body and the system for reporting and monitoring irregularities and his compliance with, at the same time was investigated the coordination of tasks and cooperation between institutions involved in the op cbc CR–POL.
Furthermore, it was investigated the activity of the competent authorities in the field of risk analysis and drawing up control plans in place implementation of the projects and reviewed the evaluation of project applications carried out by independent evaluators.
Examination of the control system included a review of the administrative checks and inspections carried out on the spot, which allowed for the approval of e.g. the supply of goods and co-funded services, the eligibility of expenses submitted for payment and at the same time, the compliance of the disbursement of these funds, and related activities (or their parts) with the national legislation and EU legislation.
Significant shortcomings were identified by the Sao's control in the field of publishing correct, complete and up-to-date information on the subsidies provided.
The risk of non-transparency of this process has been identified in the field of Project Evaluation and approval.
Other deficiencies have been identified in the monitoring indicator settings and in the irregularity Reporting System Settings.
Based on these findings, assessed, the Supreme audit office control and the control system implemented by the managing authority as partially effective.
Discrepancies identified NICHES, which were related to the functioning of the management and control system in Poland in relation to violations of the applicable laws and rules, have not been assessed as significant.
The said irregularities had an impact only on individual projects and has not had a significant impact on the implementation of the op cbc CR–POL.
Despite the discrepancies identified, NIK evaluated the functioning of the system positively.
B. Evaluation of project results
The control did not show a discrepancy between the indicators and objectives set for each project and those defined by the Operational Programme.
In all the projects examined have achieved the expected results, the funded activities have been implemented and have been met indicators (measurable parameters) set out in the project applications operational programme.
The control conclusions are in line with the result of the social evaluation survey of project implementation described in the text below.
An important aspect, which the SAO and NIK pay attention to in its conclusions, is the limited possibility of an objective evaluation of the performance of the predicted results of individual projects with regard to the objectives of individual projects and at the same time, the objectives of the operational programme.
On the initiative of the Supreme Audit Chamber, an opinion poll was conducted in the summer of 2013 at the place of implementation of projects selected for the joint audit sample.
The survey and its evaluation were carried out by the School of higher vocational education in the NYSE (Poland).
After agreement with the Supreme audit office, the investigation was carried out on both sides of the border between the 2 820 respondents, both among the public in Poland in relation to the part of the project implemented by the Polish project partners in the Czech public in relation to the part of the project implemented in the Czech republic.
The survey mainly concerned the appropriateness, quality, information exchange, resource usage, social functions and projects including investments.
The number of respondents for each project is set out in Annex 2.
The assessment of responses from the survey indicated that the overall social evaluation of projects was good and reached the value of 4.8 points (on a scale with a maximum of 8 points), which means that the results of the projects were positively perceived by most respondents as having regard to the objectives, so according to the other parameters listed in the project applications.
According to the respondents, the projects examined met the criteria expressed in the Operational Programme.
Respondents also noted the positive impact of investments on improving the quality of transport and tourism infrastructure, transport accessibility, tourist attractiveness, business conditions, the quality of life of citizens and the resumption of contacts between the inhabitants of the border region.
On the other hand, the overall response assessment indicated a certain difference between the actual level of achievement of objectives/parameters (actual impact rate) and the level expected by the 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 views of the participants of the panel discussions (focus groups) carried out under the control of NIK on the Polish side, who have pointed out the need for the implementation of projects and confirmed their positive public acceptance and fulfilment of expected results.
No. Evaluation of the legality of controlled projects
The beneficiaries examined the compliance of the project's factual and timing with the timetable and content of the project application, the implementation of the objectives and purpose of the project, the fulfilment of binding monitoring indicators, the management of changes in projects, the management of any revenues of the project, the fulfilment of the obligation of separate accounting of project transactions, compliance with the ban on eligibility of project expenditure, selection of suppliers and verification of delivered transactions on the basis of procurement contracts.
The total financial value of the shortfalls of qualified Sao and NIK as non-EU financing expenditure was found to be € 85,094.
However, this amount did not exceed the established level of materiality relating to the total controlled volume of funds for the sample of projects.
Despite the irregularities identified, the SAO and NIK evaluated the implementation of the selected projects positively by the beneficiaries.
In most cases, the obligations arising from the conditions of the aid were duly fulfilled by the beneficiary.
Funds for the implementation of controlled projects were spent in accordance with EU regulations and national law.
Nevertheless, seven of the eight beneficiaries of the aid controlled by NIK found irregularities in the fulfilment of material and financial obligations.
It was about individual cases of non-systemic nature and were especially inconsistent preparation of project documentation and violation of rules for public procurement, which, however, should not impact on the selection of the supplier or the delivery of the contractually agreed work.
Only in one of all projects controlled NICHES can be identified by the irregularity, which concerned failure to comply with obligations in the area of reporting, evaluated as ineligible expenditure in the amount of 43 003 PLN (8 of 231 € to be financed from the ERDF).
On the other hand, the Sao identified ineligible expenditure of CZK 2,098,053 in three of the 19 projects audited (of which € 76,863 financed by the ERDF).
Irregularities included the non-delivery of paid material and work or of the expenditure for upgrading of property owned by a person who didn't have feedback on the project either as recipient, or as a project partner.
RECOMMENDATION
The joint recommendations of the SAO and NIK refers to the improvement of the monitoring system, especially with regard to a consistent definition of the proper monitoring indicators for all specific objectives of the priority axis of the operational programme.
Generally it is also necessary to strive for the establishment of such indicators at the program level and projects, which will allow a more reliable verification of compliance impacts.
Notes and recommendations arising from the inspections carried out on both sides of the border are included in the separate audit conclusions of the SAO and NIK on the CD.
COMMUNIQUE
Report has been drawn up in Czech, English and Polish language and signed by the presidents of the supreme audit institutions of the Czech republic and the Polish republic.
