Transnational training seminar for potential Lead Partners and Partners to INTEREGG IIIB-CADSES procedures for 3° call for proposal CADSES implementation procedures: a short overview of the subsidy contract, the reporting obbligations, the cash flow and the audit and financial control issues Brno 9 th November 2004 Ms Concetta Collarile MA1 CADSES PROGRAM

We talk about Subsidy contract Reporting obligations ERDF payment circuit Audit and financial controll issues

What is a subsidy contract? The subsidy contract is the legal basis that regulates the relationship between the Managing Authority and Lead Partner.

Who signs the Subsidy contract? The MA is the legal person in whose name contracts are concluded. The Ministry for Infrastructures and Transports concludes subsidy contracts with the ERDF Lead Partners of projects in its own name, thus being liable for ERDF funds in the first place as contracting partner.

Subsidy contract’s object The subsidy is awarded exclusively for the project as it is described in the application approved by the Steering Committee. requirements

Subsidy contract’s information In the subsidy is specified: the total Project budget and its cofinancing: ERDF subsidy National co-financing Furthermore it is indicated the Project duration: From ____ until ____

How is the subsidy contract composed by? It is composed by: the (final) application form, the co-financing statements, the joint convention between the LP and the project partners the approval decision of the Steering Committee

LP’s Obligations to present payment requests to the MA to present progress reports to the JTS to ensure that the project partners fulfil their obligations under the subsidy contract

LP’s Obligations to co-ordinate the start of the project according to the action plan approved by the Steering Committee; to co-ordinate the implementation of the project within the time schedule stated in the approved action plan; to inform the JTS immediately if changes, concerning the approved project, happen

LP’s Obligations To submit the first request for payment within 6 months after the conclusion of the subsidy contract, to submit the final report to the JTS within three months after completion of the project; to comply with European Union and national legislation including public procurement

LP’s Obligations to point out in public statements (reports, publications, etc.) that the project was implemented through financial assistance from ERDF funds within the framework of the INTERREG III B CADSES Programme in accordance with Commission Regulation (EC) No 1159/2000 on information and publicity measures to be carried out by the Member States concerning assistance from the Structural Funds

Right of withdrawal The MA is entitled to withdraw from the subsidy contract and to demand repayment of funds in full or in part: If the LP fails to fulfil a condition or an obligation resulting from the subsidy contract; if the LP has obtained the subsidy through false statements or incomplete information;

Right of withdrawal If the LP wholly or partly closes down, sells, leases or lets the project to a third party ; in case of insolvency or banckruptcy of LP or other institutions involved into the project; if the LP repeatedly fails to produce progress reports; If the LP does not submit payment requests within 6 months since the signature of the contract

Right of withdrawal If the co-funded project cannot or could not be realized respectively in due time, or a precondition for the approval of the project is lost; If the LP fails to provide immediate information about circumstances that delay, hinder or make impossible the realization of the co-funded project; If the regulations of the EU law; If irregularities are identified during the implementation of the project

Reporting obligations To submit to JTS the “Progress report” twice a year; To submit to MA the “Payment claim” four time a year.

Progress report It consists of: Activity Report Financial Report

Payment claim There are four deadlines per year to submit the Payment Claims to the MA in Rome: April 1st July 1st October 1st December 1st

Payment claim The Payment Claim consists of the following documents: 1. Demand for reimbursement of expenditures 2. Description of Incurred Expenditures 3. Certifications of Expenditures (one per each project partner)

ERDF FINANCIAL CIRCUIT PROJECT PARTNER CERTIFYING BODY LEAD PARTNER CERTIFYING BODY MANAGING AUTHORITY PAYING AUTHORITY EUROPEAN COMMISSION LEAD PARTNER 1 Apr 1 July 1 Oct. 1 Dec. PROJECT PARTNER SENDS CERTIFIED EXPENDITURES TO LEAD PARTNER AGGREGATES AGGREGATES & CERTIFIES VALIDATES

Management and control system’s aims To verify the delivery of the products and services co-financed and the reality of expenditure claimed; to ensure compliance with the terms of the relevant Commission decision under Article 28 of Regulation (EC) No 1260/1999 and with applicable national and Community rules on, in particular, the eligibility of expenditure for support from the Structural Funds under the assistance concerned, public procurement, State aid (including the rules on the cumulations of aid), protection of the environment and equality of opportunity.

Audit and financial control The Reg. 438/2001 laying down rules for the management and control systems for assistance granted under the Structural Funds envisages two control’s level: 1 st level control 2 nd level control

1 st level control The 1 st control aims to check all invoices and activities of the project participants and is carried out in relation to each Payment Claim. As the first level control lies in the responsibility of each Member State according to art. 38 (1) Reg 1260/1999 and it is organized and managed at national level.

1 st level control a certification of Expenditures per each project partner, verifying the accuracy and compliance with relevant EC regulations and National legislations and program specific rules on budget and finances, must be annexed to the Payment Claim, which then the Lead Partner itself has to send to the MA.

2 nd level control The second level control lies in the responsibility of each Member State, it will be carried out by an audit private company. The second level control is performed on an appropriate sampling basis, and it is designed in particular to: (a) verify the effectiveness of the management and control systems in place; (b) verify selectively, on the basis of risk analysis, expenditure declarations made at the various levels concerned.

FCG The FCG will be responsible to: verify the effectiveness of the management and control system in place; verify selectively, on the basis of risk analysis, expenditure declarations made at the various levels concerned.

ERDF CIRCUIT National Coordinator ( 1st level control certifiers ) Partner forwards starts National Funding certifies Forwards its payment claim Validates & communicates in carbon copy Starts ERDF Forwards payment claims related to the projects Managing Authority Paying Authority

THANK YOU! MA Ministry for Infrastrucutures and transport Via Nomentana 2 00191 Rome (Italy) Tel 0039 06 44126426 0039 06 44267336 Technical Assistance provided by