Structural Funds Financial management and Control, Romania 1.1 Introductions Structural Funds Financial management and Control, Romania System of Payments Mgr. Danka Kovaľová kovalova@ca-slovakia.sk June 2006

FM – Budget Commitments Effected annually for each Fund and objective in the OPs First budget commitment – before the OP approval by the Commission Following commitments – by 30 April each year Transfer from national contingency reserve to other OP upon request by the MS – by 30 September of the year n

FM – Rules for Payments I Forms of Payments: Pre-financing Interim payments to apply co-financing rate Payment of the final balance to apply co-financing rate Community Contribution (IP, FP) ≤ Public contribution and max. assistance amount for each priority axis Forecast of likely payment applications submitted to the Commission by MS – by 30 April every year (for n & n+1 year) (see form 1)

FM – Rules for Payments II Statement of Expenditures (by priority axis) Total amount of eligible expenditures and corresponding public contribution Expenditure paid by beneficiaries – justified by invoices or accounting documents of equivalent value (documents kept by the beneficiary) (see Form 2) Partial / final closure of OP (see Form 3)

FM – Rules for Payments III Accumulation of pre-financing and of interim payment shall not exceed 95% of the Funds’ contribution to the OP When 95% reached – the CA continues transmitting to the Commission: Certified statement of expenditure on 31 December of the year n Amounts recovered during the year for each Fund no later than by the end of February of the year n+1

FM – Rules for Payments IV Use of Euro Amounts of expenditure incurred in national currency – to be converted to euro Exchange rate used: monthly accounting exchange rate of the Commission in the month during which the expenditure was registered in the accounts of the CA of the OP concerned This exchange rate – to be published by the Commission each month

FM – Rules for Payments V Pre-Financing Payment – 5% (2% in 2007, 3% in 2008) of SF or 7% (2% in 2007, 3% in 2008, 2% in 2009) of SF; 7,5% (2%, 3%, 2.5%) of CF or 10.5% (2.5%, 4%, 4%) of CF Interest – posted to the OP concerned being regarded as resource for MS as national public contribution / declared to the Commission at the time of the final closure Interim Payment (form 2) Payment of Final balance (form 2) Programme Closure (from 3)

FM – Rules for Payments Va Interim Payment (form 2) made by the Commission upon Submission of Payment application and a statement of expenditure No more than max. of assistance approved for OP has been paid by the Commission during the whole period for each priority axis Submission of the most recent annual implementation report No opinion by the Commission in respect of an infringement If at least one condition is not met – EC informs MS in one month 1st interim payment - within 2 months of the date of receipt of the report on the assessment of the setting up the management and control – if no reservations Other payments – within 2 months

FM – Rules for Payments Vb Programme Closure (form 3) Partial closure made upon the following conditions: Statement of expenditure for the operations completed up to 31 Dec. of the previous year Declaration for partial closure assessing the legality and regularity concerned - prepared by the Audit Authority Conditions for the payment of the Final Balance MS submitted the payment application by 31 Dec. 2017 Application for payment of the final balance and statement of expenditure Final implementation report for OP (MA) Closure declaration (AA) Failure in submitting – automatic decommitment of the final balance EC opinion - within 5 months, payment in 45 days

FM – Rules for Payments VI Interruption of payments By the delegated authorising officer for a maximum period of six months MS informed immediately and takes the necessary measure for correction Suspension of payments by the Commission: all or part of interim payments at the level of priorities or programmes MS gets the opportunity to presents its observation and takes the necessary measure for correction

FM – Rules for Payments VII Automatic decommitment any part of a budget commitment in an OP not used for payment of the pre-financing or interim payments or not applied for The part of commitments still open on 31 December 2015 – if no application for it by 31 March 2017 Extension of automatic decommitment when GR enters into force after 1 January 2007

Request for payment - Beneficiary Summary Request for Payment-B Request for Payment-B Request for Payment-B B MA IB/MA PU PA

Financial flows EC Funds EC Funds PA PU B Co-financing from SB

Types of financing Prefinancing – granting of financial resources from state budget to the beneficiary from public sector for reimbursement of initial commitments toward a supplier within the due date based on submission of the accounting documents issued by the supplier Payment on account – once project implementation has been started, final beneficiary from the public sector (ESF) will request IB/MA for payment on account in compliance with agreement conditions. Refunding– providing the funds to the final beneficiary from EC sources as an addition to his disposable sources, on the basis of submitted accounting documents

ERDF private sector public sector -refunding - prefinancing - refunding ESF private sector public sector -refunding - payment on account

System of the financial flows (B from the private sector) profitable projects Types of projects non-profitable projects Non-profitable projects: a) Non-government organizations: - refunding of 100% eligible expenditures from the sources ESF+ SB - refunding of 95 % eligible expenditures from the sources ERDF+SB b) Enterpriser, which implements non-profitable project out of the competition - payment is reimbursed up to the amount of 95% eligible expenditure from the sources EC+ SB - sum up by the sources of the Final Beneficiary in the amount of 5%.

System of the financial flows (B from the private sector) Profitable projects: Assistance is provided with regard to state aid scheme for the relevant measures or sub-measures of the program documents in compliance Assistance is provided with regard to state aid by the means of non-repayable financial contribution, which includes EC sources and SB sources. non-repayable financial contribution is not to be provided as an payment on account, but refunding, on the basis of submitted documents which will prove factual amount of eligible costs.

System of the financial flows (B from the public sector) Projects from the public sector:: Each payment is reimbursed only up to total amount of EC sources + state budget (95%), i.e. - sum up by the sources of final beneficiary in the amount of 5% 2 periods: prefinancing period or payment on account – release of expenditure from the state budget refunding period from the EC resources

Cofinancing strategy It has been settled: contribution of EC sources on total eligible costs in the maximal amount maximal intensity of state aid Contribution of final beneficiary sources (except state administration entities) on co-financing in the amount of 5 % from the total eligible costs in case, where state aid rules are not applicable