1. © OECD A joint initiative of the OECD and the European Union, principally financed by the EU Jan Gregor THE NATIONAL FUND VS. NATIONAL BUDGET PROCESS Seminar on Budget and EU Funds Skopje, 14-15 May 2007

2. Content Historical Context Continuous adjustments of Structures EU funds parallel to National System EU funds within National System Internal Control System Planning of co-financing Legislative Changes General Strategy to get ready Our Challenges

3. Historical Context 1990: EU assistance started by Phare 1998: Central MoF Responsibility 2000: New instruments (ISPA, SAPARD) 2001: National Fund Department 2004: EU Accession 2007: New Financial Perspective

4. Main tasks of the NF Pre-accession Financial Management of PHARE, ISPA, SAPARD EDIS (x SAPARD) Regional Policy Negotiation Chapter Preparations for SF and CF Post Accession Paying and Certifying Authority for SF/CF/EFF Competent body for CAP (accreditation) Own Resources System Review of EU Budget

5. 1990 Minister Deputy Minister BUDGET STATE BUDGET FINAL ACCOUNT Deputy Minister FOREIGN AFF. CFA CFCU Deputy Minister CONTROL

6. 1998 Minister NAO STATE BUDGET FINAL ACCOUNT NAC CFA CFCU Deputy Minister CONTROL

7. 2001 Minister NAO STATE BUDGET FINAL ACCOUNT NF NAC CFA CFCU Deputy Minister CONTROL

8. Mid 2002 Minister NAO STATE BUDGET FINAL ACCOUNT NF NAC CFA CFCU Deputy Minister CONTROL CHU/CA IA

9. 2004 Minister Deputy Minister BUDGET STATE BUDGET FINAL ACCOUNT PA/NF Deputy Minister FOREIGN AFF. CFA Deputy Minister CONTROL CHU/W-U CFCU IA

10. 2007 Minister Deputy Minister BUDGET STATE BUDGET FINAL ACCOUNT PCO/PA/NF Deputy Minister FOREIGN AFF. CFA Deputy Minister CONTROL AO/W-U/CHU CFCU IA

11. MRD Ministry of Finance Line Ministry MA OP/SPD MC OP SPD PU IB PA Financial Flows Certification On-the-spot checks Winding- up MC CSF MA CSF IA EUROPEAN COMMISSION Final Beneficiaries / Final Recipients Parallel Flow of EU Funds (2004-2006)

12. Strategic Community Guidelines National Strategic Ref. Framework OP 1OP 2OP 3OP x 27-28 37-41 National Budget System About 18 legislative possibilities for the Use of EU funds 25-26 Art. Links to Articles of the General Regulation Flow of EU Funds via National System (2007-13)

13. Art. Links to Articles of the General Regulation Thematic Operational Programmes MF Ministry MA OP MC OP PCA Financial manag. Certification Beneficiary Sample Audits Audit Authority MC CSF MA CSF IA EUROPEAN COMMISSION Budget Dept. Fin. Dept 61 63 62 60 62, 1b 75-98 62, 1a Programming Implementation Financial Flow Certification/Audit Authority

14. Art. Links to Articles of the General Regulation Regional Programmes MRD MF RR MA ROP MC ROP PCO Financial manag. Certification Beneficiary Sample Audits Audit Authority MC CSF MA CSF IA EUROPEAN COMMISSION Budget Dept. Fin. Dept 63 60 62, 1b 62, 1a 75-986162 Programming Implementation Financial Flow Certification/Audit Authority

15. Authorising Officer Accounting Officer Authorising Officer Budget Admini- strator Accounting Officer MAPAAO Internal Management and Control System European Union Member state

16. Planning of co-financing Advance modelling needed Outputs are used in the budgetary process Numbers in the State Budget usually differ from expert estimates (upwards) Commitments vs. Payments (not generally understood) National Programmes to be integrated

17. Legislative Changes 1990-2007 Pre-accesion instruments based on International treaties 2000: Budgetary Rules (NF established) 2000: Regional Development 2001: Financial Control Act Other changes of Budgetary Rules 2006: Regional Development amended 2007: Budgetary Rules to be amended 2010: ???

18. General Strategy to get ready 100% adjustments of national system –Language, Will to change, … Parallel System to National Budget –Flexibility, Coordination, … Parallel System and Step-by-Step integration into national processes –Flexibility First, General Adjustments later –Appears to be the Czech Case

19. Our Challenges Modernization of the Budget System (accrual base budgeting, accounting, State Funds) Motivation and Stabilization of Staff dealing with EU funds Limit Ad-hoc changes of the System

20. Abbreviations I MoF – Ministry of Finance NAO – National Authorising Officer NAC – National Aid Coordinator CFA – Centre for Foreign Assistance CFCU – Central Financing and Contracting unit NF – National Fund PA – Paying Authority PU – Paying Unit PCA - Paying and Certifying Authority CA – Control Authority (Phare) CHU – Central Harmonization Unit W-U Winding-up Body AO – Audit Authority IA – Internal Audit Translations to be added

21. Abbreviations II MRD – Ministry for Regional Development SF – Structural funds CF – Cohesion Fund EFF – European Fisheries Fund CAP – Common agriculture policy OP – Operational Programme SPD - Single Programming Document MC – Monitoring Commitee CSF - Community Support Framework MA – Managing Authority IB – Intermediary Body Translations to be added

22. Thank you for attention jan.gregor@mfcr.cz