1. Financial management system of structural funds

2. Entities involved in financial management system Managing Authorities (MA) Managing Authorities (MA) Intermediate Bodies under Managing Authorities (IB/MA) Intermediate Bodies under Managing Authorities (IB/MA) Paying Authority (PA) Paying Authority (PA) Paying Units (PU) Paying Units (PU)

3. Legislative framework  Council Regulation No 99/1260/EC – laying down the general provisions on the Structural Fund  Council Regulation No 438/2001/EC – laying down detailed rules for the management and control system for assistance granted under the structural funds.  Act No. 303/1995 on budgetary provisions as amended  Act No. 502/2001 on financial control and internal audit as amended  Concept of financing of projects supported from the pre-accession funds, structural funds and cohesion fund for the period 2004-2006 (adopted by the decree of the SR government No. 815 from 27.8.2003)  Concept of financial management system of structural funds (adopted by the decree of the SR government No. 1008 from 29.10.2003)

4. The function of PA is performed by department of paying authority for structural funds within the section of european affairs MF SR. (decree of the SR government No. 617 from 5.6.2002) The function of PA is performed by department of paying authority for structural funds within the section of european affairs MF SR. (decree of the SR government No. 617 from 5.6.2002)  Main tasks of PA concerning financial management: - receipt of EU sources at the off-budget account of the MF SR - transfer of structural funds resources from the special off-budget account of the MF SR to the revenue account of the respective ministry - coordination of Paying units within the respective ministries Paying Authority for structural funds in SR

5. - preparation and submission of application for interim payments to the EC for all the programmes co-financed by structural funds - elaboration and sending of application for payment of the final balance to the EC for all the programmes co-financed by structural funds - elaboration, certification and submission of statement of expenditure to the EC which is based on partial statements of expenditure and monthly list of effected payments submitted by the paying units and verification of selected declarations of verifications elaborated by managing authorities or IB/MAs. - preparation and submission to the EC of estimate of drawing of expected expenditure in the applicable year and in the following year based on documentation provided by the managing authorities by the 30 April each year. - return of payments unduly used or unused, including interest on late payment to the EC

6. Paying Units – institutional arrangement 1. Ministry of Economy (PU) – ERDF - SOP Industry and Services, CIP INTERREG IIIC - SOP Industry and Services, CIP INTERREG IIIC 2. Ministry of Construction and Regional Development (PU) – ERDF - OP Basic Infrastructure, SPD Bratislava Objective 2, INTERREG IIIA - OP Basic Infrastructure, SPD Bratislava Objective 2, INTERREG IIIA 3. Agricultural Paying Agency (PU) – EAGGF a FIFG - SOP Agriculture and Rural Development - SOP Agriculture and Rural Development 4. Ministry of Labour, Social Affairs and Family (PU) – ESF - SOP Human Resources, SPD Bratislava Objective 3, CIP EQAUL - SOP Human Resources, SPD Bratislava Objective 3, CIP EQAUL 5. Ministry of Environment (PU) – ERDF - OP Basic Infrastructure, CIP INTERREG IIIB CADSES - OP Basic Infrastructure, CIP INTERREG IIIB CADSES 6. Ministry of Education (PU) – ESF - SOP Human Resources, SPD Bratislava Objective 3 - SOP Human Resources, SPD Bratislava Objective 3 7. Ministry of Transport, Post and telecommunications (PU) – ERDF - OP Basic Infrastructure - OP Basic Infrastructure

7. Paying Units (PU) - tasks  Main tasks of PU concerning financial management: - transfer of EU funds and co-financing from the expenditure account of the state budget of the concerned ministry or budgetary organisation to the account of final beneficiary (in compliance with the Act No. 303/1995 on budgetary rules) - execution of ex-ante financial control (in compliance with the Act No. 502/2001 on financial control and internal audit) - completing and submission of summary request for payment and partial statements of expenditure to the paying authority

8.  Eligibility period for drawing structural funds (projects realisation) is from 1 st of January 2004

9. Request for payment - FB FB MA IB/MA PUPUPAPA Request for Payment-FB Request for Payment-FB Summary Request for Payment-FB

10. Financial flows PA PU EC Funds FB EC Funds Co-financing from SB

11. Types of financing Prefinancing – granting of financial resources from state budget to the final 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

12. ERDF private sector public sector - -refunding - prefinancing private sector public sector - -refunding - prefinancing - refunding - refundingESF private sector public sector -refunding - payment on account private sector public sector -refunding - payment on account - refunding - refunding EAGGFu a FIFG private sector public sector - refunding - prefinancing - refunding - prefinancing - refunding - refunding

13. System of the financial flows (FB from the private sector) profitable projects profitable projects Types of projects non-profitable 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/EAGGF+SB b) Enterpriser, which implements non-profitable project out of the competition 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 ES+ SB - payment is reimbursed up to the amount of 95% eligible expenditure from the sources ES+ SB - sum up by the sources of the Final Beneficiary in the amount of 5%.

14. Profitable projects:  Assistance is provided in regard to state aid scheme for the relevant measures or sub-measures of the program documents in compliance with the Act No. 231/1999 on state aid as amended  Assistance is provided in 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 (FB from the private sector)

15. System of the financial flows ( FB 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

16. Cofinancing strategy  resulting from the Concept of financing of projects supported from the pre-accession funds, structural funds and cohesion fund ((adopted by the decree of the SR government No. 815 from 27.8.2003) 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 cofinancingin the amount of 5 % from the total eligible costs in case, where state aid rules are not applicable

17. SB 2004MPSAF SR ME SR MCRDSRMASRMTPT SRME SRGeneral Treasury Administration SR TOTAL SOP IS 360,04 SOP HR296,4269,79 366,21 SOP ARD 325,70 OP BI 114,52 314,69174,91 604,11 SPD Obj. II 172,13 SPD Obj. III 129,5256,47 185,98 Interreg 3,0949,48 9,28 61,84 Equal 39,44 Reserve for struct. operation 525,38 Structural funds -total 465,37126,26363,14336,13325,70314,69184,18525,382640,84 Co-financing for projects of structural funds from SB 2004 (mil. Sk)

18. ERDFESF EAGGF/ FIFG InterregEqualTotal SOP Industry and Services 133,76 SOP Human Resources 251,65 SOP Agricultural and rural development 161,87 OP Basic Infrastructure373,62 Objective 1, Total507,38251,65161,87 920,9 SPD Objective 233 SPD Objective 3 39,9 Community Initiatives 36,819,756,5 Total540,38291,55161,8736,819,71 050,30 Share %51,4527,7615,413,51,88100 Share of particular funds initiatives included 54,95 %29,64 %15,41 % 100 % Allocation of financial sources for respective Operational programmes, Programming documents and Initiatives (stable prices of the year 1999) for the programming period 19994-1996