EU-FUNDED PROJECTS HOW TO WORK WITH EUROPEAN UNION

European Union funding EU world’s largest development donor, it provides over half the world’s total Overseas Development Aid (ODA); One sixth of this is administered directly by the European Commission (EC). EC is a significant UN partner, contributing over €1 billion in support of external assistance programmes and projects. The financial and contractual aspects of programmes funded by the EC have been explained in the Financial and Administrative Framework Agreement (FAFA).

EU financial instruments - FAO Two distinct sources of funding from the EU: 1.The 1 st source is the General Budget of the EU. Most important instruments available to FAO are: A.The Development Cooperation Instrument (DCI) managed by DG DEVCO. B.The Humanitarian Aid Instrument, managed by the DG ECHO. C.The Seventh Framework Programme for Research and Innovation (FP-7) for all countries 2.The 2 nd source is the European Development Fund (EDF) only applicable to African, Caribbean and Pacific (ACP) countries

EU financial instruments - FAO DCI is managed by DG DEVCO. The available budget in DCI is EUR 16,897 million. EUR.10,057 are for “Geographic Programmes”, while EUR.5,596 million are for “Priority Themes” Priority themes are: Investing in People, Environment and Sustainable Management of Natural Resources, etc. FP7 funding opportunities: EU considers crucial to tackle challenges related to research in Food, Agriculture and Fisheries and Biotechnology. Specific support to international cooperation in FP7 - WP 2013 is based on a mutual benefits' approach and focus on key strategic partners: i.e. China, Australia, Canada, New Zealand, Argentina etc. The FP7 - WP 2013 action also supports commitments to the Rio+20 United Nations Conference on Sustainable Development.

Project Identification EC priorities and budget in a given country or region are available at the local European Union Delegation (EUD). Country Strategy Paper (CSP), or Regional Strategy Paper (RSP). The Thematic Strategy Papers (TSP) are programmed by DG-DEVCO in Brussels. EC, FAO, IFAD and WFP signed a ‘Strategic Programmatic Framework on Food Security and Nutrition’ it sets out priority areas for programmatic cooperation.

Project Identification FAO can benefit from the EU financial instruments in three different ways: 1.FAO can contact EU using a concept note and a logical framework matrix. If successful, EU may approve FAO for the management of tasks and contribute funds through a joint management mode; 2.FAO can respond to the EU’s call for proposals by consulting online notices in ADSSChck= &do=publi.welcome&userlanguage=en ADSSChck= &do=publi.welcome&userlanguage=en 3. FAO can be awarded a grant by direct agreement in the exceptional cases foreseen in Art. 168 of the EU Implementing Regulation such as in cases of humanitarian and crisis management; in cases where FAO has a somehow monopoly based on a legal act; or in cases of urgency.

Project Formulation Once the EU has expressed firm interest, except for the projects that respond to a “Call for Proposals” the project is elaborated based on FAO’s in-house standard project document. A logical framework matrix and Euro budget should be appended. Pay attention that the EU’s budget format must match with the FAO Oracle account codes. PSC: EU accepts a rate of 7% for indirect costs. The difference with 13% may be recovered from eligible direct costs. Administrative and operational costs (e.g. staff time related to this project in the operating unit, FAOR, etc.) for a total up to 6% of the net budget may be included in the budget.

Appraisal and Approval All types of projects are subject to FAO’s in-house appraisal and approval procedures. Once a project is endorsed, TC-ADG officially submits it to the EU: Regional and global projects are submitted to EU Brussels while country- specific projects are submitted to the local EUD. When an agreement is reached between EU and FAO, the EU signs a Contribution Agreement with FAO and a Financial Agreement with the Government. At the same time, FAO signs a Project Agreement with the Government. The Contribution Agreement includes in one of its annexes General Conditions on the administrative and financial provisions for the action.

Implementation and Monitoring Project EOD is the date when funds are credited in FAO’s account. EOD cannot be changed. FAO ADG-TC signs a OM declaring the project operational and designates a budget holder. FAO co-financing may be provided in kind. In kind contributions may be identified from RP-funded work relevant for the achievement of objectives defined in EU-funded projects. EU-funded projects should have at least one budget revision per year based on revised annual work plans. Budget revisions requiring EC approval (when you need to exceed 15% in any given budget line) formalized in an addendum should be submitted to TCSR. Projects should ensure EC visibility in accordance with EC guidelines.

Evaluation Evaluation can be organized jointly or separately by FAO and the EU (inviting each other). EU funded projects are also subject to verification by the EU. The procedure entails sampling up to a maximum of five transactions. Should a problem be identified, an additional five transactions will be sampled. If a problem remains unresolved, the Auditor-General of FAO shall take action. If the verification ends up with unjustified/unverifiable expenditures, FAO will have to reimburse them to EU.

Closure (operational and financial) The Final Narrative Report and Financial Statement are cleared by the competent services, after which FAO Financial Services will call for funds for the outstanding balance of the EC contribution. After NTE BH proceeds with operational closure as per FAO rules and regulations. When operational closure is confirmed, and no further charges are expected, financial closure of FAO’s Oracle project account will be requested by the project Budget Holder.

To be noted Read carefully the “FAFA” the “General Conditions applicable to EU Contributions” The project implementation is pre-funded by FAO The reimbursement is paid by EU whenever the BH has delivered at least 70% of the previous advance Only “eligible” expenditures are recognized for the reimbursement Monitor very closely the project delivery and the exchange rate between € and US$ to avoid over-expenditures in €. We can exceed the allocation on each BL by max 15% without any BR (you inform by the EUD). If you need to exceed above 15% you must submit a BR in advance. Avoid do it retroactively because it may be refused. The last BR can be submitted at the latest 1 month before the NTE Financial reports are submitted in €. Keep a shadow budget in both currencies Every time the BH asks for the transfer of cash s/he has to submit a progress report