Coordinated control of funds intended for financing projects implemented under the Operational Program for Cross-Border Cooperation Czech Republic - Poland 2007–2013
INTRODUCTION
The developing community of the people of Europe 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.
Let us therefore give this community an introductory word on this joint report of the two supreme audit institutions of the neighboring countries:
"185 million EU citizens (37% of the population) live in border areas.
These areas are usually underdeveloped and peripheral areas, often a remnant of the darker parts of European history.
The main objective of cross-border cooperation is to help alleviate the existence of borders as administrative, legal and physical barriers and to further develop the dormant potential of border regions.
The programs cover different border regions: some cover maritime areas, others inland borders within the EU or borders shared with candidate countries.
Most programs are bilateral, but some include more than two neighboring countries. "
The programs run for seven years and receive a total of € 5.7 billion from the EU budget.
"The programs include the following activities: repairs and reconstruction of cross-border roads, cycle paths and bridges, investments in cross-border waste management systems, medical facilities, research centers, flood defenses, etc., joint management of natural sites or development of tourist destinations, development of joint services for local people, employment counseling, the creation of thematic networks and clusters for innovation.
Support from the program is provided on the condition that organizations from both sides of the border (such as regional authorities, universities or small and medium-sized enterprises) come together to implement projects that are based on the needs of the border region.
Representatives of the cooperating regions, relevant ministries and other local partners meet regularly to decide which projects will be supported.
This system should lead to a sustainable form of cooperation even after the end of the program itself.
Funding is provided on condition that the project partners on both sides of the border cooperate in a way that fulfills at least two of the following four characteristics: joint preparation, joint implementation, joint staff, joint financing. "
Within the partnership, the tasks and responsibilities for the preparation, implementation, financing and control of project activities are clearly defined and divided by the relevant partners.
The main attributes of the partnership include: joint choice of the lead partner, joint preparation of the project and application, conclusion of a joint partnership agreement signed by all partners, assumption of overall responsibility for project implementation by the lead partner, total support payments received by the lead partner and transferred to the relevant project partners.
Eligible projects implemented on the territory of regions and voivodships adjacent to the common border may be supported.
OBJECTIVES AND SCOPE OF CONTROL
On 11 December 2007, the European Commission (EC) approved the Operational Program for Cross-Border Cooperation Czech Republic - Poland 2007–2013 (OPPS ČR – POL).
€ 258,187,467 was allocated for the implementation of the operational program.
The total amount included a contribution from European Funds (ERDF) in the total amount of € 219,459,344 (85%), which must be used by the end of 2015.
Financial data on the drawing of EU funds from the Operational Program for Cross-Border Cooperation Czech Republic - Poland 2007–2013 at the end of 2013 are given in the following table:
The Agreement on Cooperation between the Supreme Audit Institutions of the Czech Republic (SAO) and the Republic of Poland (NIK) was concluded by the Presidents of both authorities on 27 February 2013 following previous mutual negotiations at the September 2012 in Lovasberény, Hungary.
The aim of the cooperation was to verify whether the implementation of the operational program is in accordance with legislation and binding programming documents or agreements, whether the management and control system works reliably, whether the objectives of the operational program are achieved and whether selected projects are implemented in accordance with the conditions. .
This co-operation took the form of a parallel audit, in which the audit authorities, on the basis of their statutory mandate, independently examined the topics, the content of which had been discussed together in advance.
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The performed audit also included elements of a performance audit.
Selected topics were examined on a sample of projects at project partners on both sides of the border.
The result of the performed inspections were audit conclusions published in the usual way by both authorities.
This joint report is based on the two audit conclusions set out in the Annex.
The selected joint control sample included six projects (Annex 1), which fall into the area of ​​support 1.1 - Strengthening transport accessibility and the area of ​​support 2.2 - Support for the development of tourism.
Prior to the start of the audit, the drawing of funds from these two areas of support represented more than 60% of the funds paid to the beneficiaries by the end of 2012 from the ERDF for all implemented projects within the entire OPPS CR-POL.
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In addition to the inspection of a joint sample of six projects, the SAO inspected another 13 projects and the NIK inspected another two (all from the area of ​​support 1.1 and 2.2).
The funds paid to the beneficiaries of ERDF support, which were audited by the SAO and the NIK, totaled € 25,362,174 (SAO) and € 8,450,784 (NIK).
The controlled volume of funds represented 41% of all funds paid to beneficiaries from support areas 1.1 and 2.2.
MAIN AUDIT CONCLUSIONS
Both inspections carried out independently by the SAO on the Czech side and the NIK on the Polish side showed that the level of identified irregularities did not exceed the level of materiality.
The implementation of the OPPS CR-POL, including the functioning of the management and control system and the implementation of selected projects, was successful.
The auditees, who were part of the management and control system, took steps to reduce the risk of misuse of funds and non-utilization of ERDF funds provided.
Proof of the effectiveness of the implemented projects within the operational program is the high level of fulfillment of the set objectives, which was also supported by the results of the survey of social evaluation of project implementation.
SUMMARY OF CONTROL RESULTS
A. Evaluation of the management and control system
The coordinated approach made it possible to control the management and control system of OPPS CR-POL implemented by the following institutions in both countries: the managing authority (Ministry for Regional Development of the Czech Republic), the national coordinator (Ministry for Regional Development POL) and controllers (Center for Regional Development and Voivodship).
At the same time, the coordinated audit enabled the evaluation of the tasks and functions performed by the Joint Technical Secretariat and the Monitoring Committee.
During the evaluation of the management system, the audit focused on activities carried out in connection with the setting up and performance of the function of managing authority and national coordinator, in particular in setting the program objectives and monitoring progress, evaluation activities and annual reports, assessments, evaluations, selection and approval project applications, drawing on program funds and fulfilling the obligation to publish correct, complete and up-to-date information on grants, as well as control activities of the managing authority, setting up activities and outputs from audits of the authorized audit entity and irregularities reporting and monitoring system. coordination of tasks and cooperation between institutions involved in the OPPS CR-POL.
Furthermore, the activities of the competent authorities in the area of ​​risk analysis and the compilation of on-site inspection plans were examined, and the evaluation of project applications carried out by independent evaluators was assessed.
The audit of the control system included a review of administrative and on-the-spot checks to approve, for example, deliveries of goods and co-financed services, eligibility of expenditure submitted for reimbursement and compliance of these funds and related activities (or parts thereof) with national legislation and legislation. EU.
Significant shortcomings were identified by the SAO's audit in the area of ​​publishing correct, complete and up-to-date information on the subsidies provided.
In the area of ​​project evaluation and approval, the risk of non-transparency of this process was identified.
Other shortcomings were found in the area of ​​setting monitoring indicators and in setting up the irregularity reporting system.
Based on these findings, the Supreme Audit Office assessed the control and management system implemented by the managing authority as partially effective.
The irregularities found by the NIK, which concerned the functioning of the management and control system in Poland in relation to breaches of applicable laws and regulations, were not assessed as significant.
These irregularities had an impact only on individual projects and did not have a significant impact on the implementation of the entire OPPS CR-POL.
Despite the identified discrepancies, the NIK assessed the functioning of the system positively.
B. Evaluation of project results
The audit did not show a discrepancy between the indicators and objectives set for individual projects and those defined by the operational program.
In all audited projects, the expected results were achieved, the financed activities were implemented and the indicators (measurable parameters) set out in the project applications of the operational program were met.
The audit conclusions are in accordance with the result of the survey of the social evaluation of the implementation of projects described below.
An important aspect to which the SAO and NIK paid attention in their conclusions is the limited possibility of objective evaluation of the fulfillment of the expected results of individual projects with regard to the objectives of individual projects and at the same time to the objectives of the entire operational program.
At the initiative of the Supreme Chamber of Control, a public opinion survey was conducted, which took place in the summer of 2013 at the place of implementation of projects selected for the joint control sample.
The survey and its evaluation were carried out by the School of Higher Vocational Education in Nysa (Poland).
Following an agreement with the Supreme Audit Office, the survey was conducted 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 part of the project in the Czech Republic.
The survey mainly concerned the suitability, quality, exchange of information, use of funds and the social function of projects, including investments made.
The number of respondents for individual projects is given in Annex 2.
The assessment of the survey responses indicated that the overall social evaluation of the projects was good and reached a value of 4.8 points (on a scale with a maximum of 8 points), which means that project results were positively perceived by most respondents both in terms of objectives and other parameters. specified in the project applications.
According to the respondents, the examined projects met the criteria expressed in the operational program.
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 evaluation of the responses indicated a certain difference between the actual level of fulfillment of the objectives / parameters (actual degree of impact) 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 line with the opinions of participants in panel discussions (target groups) carried out within the NIK inspection on the Polish side, who pointed out the need for project implementation and confirmed their positive public acceptance and fulfillment of expected results.
C. Evaluation of the legality of the audited projects
The compliance of material and time implementation of the project with the schedule and content of the project application was checked, the fulfillment of set goals and purpose of the project, fulfillment of binding monitoring indicators, management of changes in projects, handling of possible project revenues, fulfillment of separate accounting records of project transactions, compliance with the ban on financing projects from other EU sources, implementation of the project partnership and compliance with its conditions, compliance with mandatory publicity concerning especially raising awareness of EU project financing sources, compliance with conditions of eligibility of project expenditures, selection of suppliers and verification of delivered contracts.
The total financial value of deficiencies qualified by the SAO and NIK as expenditure ineligible for EU funding was found to be € 85,094.
However, this amount did not exceed the set level of materiality related to the total volume of funds controlled for the sample of projects.
Despite the identified irregularities, the SAO and NIK evaluated the implementation of selected projects positively by the beneficiaries.
In most cases, the obligations arising from the conditions of the aid were properly fulfilled by the beneficiary.
Funds intended for the implementation of audited projects were spent in accordance with EU regulations and national law.
Nevertheless, irregularities in the fulfillment of material and financial obligations were found in seven of the eight beneficiaries controlled by NIK.
These were individual cases of a non-systemic nature and concerned in particular the inconsistent preparation of project documentation and breaches of public procurement rules, which, however, did not have an impact on the selection of the contractor or the delivery of the contractually agreed works.
Only in one of all projects audited by the NIK can a detected irregularity concerning non-compliance with reporting obligations be assessed as ineligible expenditure, amounting to PLN 43 003 (of which € 8,231 financed from the ERDF).
On the other side of the border, the SAO identified ineligible expenditure in the amount of CZK 2,098,053 in three of the 19 projects audited (of which € 76,863 financed from the ERDF).
Irregularities included non-delivery of paid material and works or expenditure on modernization of real estate owned by a person who was not linked to the project either as a beneficiary or as a project partner.
RECOMMENDATION
The joint recommendation of the SAO and the NIK concerns the improvement of the monitoring system, especially with regard to the consistent setting of proper monitoring indicators for all specific objectives of the priority axis of the operational program.
In general, it is also necessary to strive for the establishment of such indicators at the level of the program and projects, which will enable a more reliable verification of the fulfillment of the determined impacts.
The comments and recommendations resulting from the inspections carried out on both sides of the border are included in the separate audit conclusions of the SAO and the NIK on CD.
COMMUNIQUE
The report was prepared in Czech, English and Polish and signed by the presidents of the supreme audit institutions of the Czech Republic and the Republic of Poland.
