1. Project funded by The European Union Government of the Republic of Serbia European Integration Office INDUCTION TRAINING SEIO SECTOR APPROACH (SA) IN IPA PROGRAMMING FOR SERBIA

2. Project funded by The European Union Government of the Republic of Serbia European Integration Office Training Objectives  Overall the training will provide SEIO staff with an understanding of the history /background of the Sector Approach (SA) and the EC’s motivation for adopting SA in pre-accession assistance. The overall objective is for SEIO staff to understand how EC requirements for SA can be met in Serbia.  Specifically, the training will explain:  how criteria for sector selection should be used in Serbia;  how to use the 7 EC assessment criteria for SA;  how to carry out assessments of ‘sector maturity’ in the Serbian context;  how to incorporate the results of sector assessments in future IPA programming.

3. Project funded by The European Union Government of the Republic of Serbia European Integration Office Paris Declaration: Aid Effectiveness Paris Declaration (02/03/2005) principles are: 1) Ownership; 2) Alignment; 3) Harmonization; 4) Managing for results; 5) Mutual accountability Indicators  Countries put in place national development strategies with clear strategic priorities (OWNERSHIP).  Donors align their aid with national priorities and provide the information needed for it to be included in national budgets (ALIGNMENT)  Co-ordinated programmes aligned with national development strategies provide support for capacity development (ALINGNMENT)  As their first option, donors use fiduciary systems that already exist in recipient countries (ALINGNMENT).  As their first option, donors use procurement systems that already exist in recipient countries (ALINGNMENT).  Aid is released according to agreed schedules (ALINGNMENT).

4. Project funded by The European Union Government of the Republic of Serbia European Integration Office Sector Definition Policy AreasSectors Defined for Country Strategy Papers 1 Transition Process & Capacity Building 1.Democracy and Governance 2.Rule of Law and Fundamental Rights Regional Development3.Environment 4.Transport 5.Energy 6.Competitiveness and Innovation Employment, Social Policies & Human Resource Development 7.Education, Employment and Social Policies Agriculture & Rural Development 8.Agriculture & Rural Development 1 Taken from ‘A Quick Guide to IPA Programming’. DG ELARG December 2013.

5. Project funded by The European Union Government of the Republic of Serbia European Integration Office Criteria for Sector Definition 1.Sector should be have relevance for EU accession and/or national socio-economic development. 2.Sector should be wide enough to be significant for national accession /development objectives, but narrow enough for institutional coherence 3.Sector should have a clearly established institutional framework, institutional leadership & responsibilities, ideally there should be one lead institution; 4.Sector should have a clear linkage to the national budgetary process

6. Project funded by The European Union Government of the Republic of Serbia European Integration Office EC Assessment Criteria for Sector Approach Key Criteria 1.National sector policies/ strategies 2.Institutional setting, leadership & capacity 3.Sector & donor coordination 4.Mid-term budgetary perspective 5.Monitoring & performance assessment Sector Reform Contracts  6. Public finance management  7. Macro-economic framework

7. Project funded by The European Union Government of the Republic of Serbia European Integration Office National Sector Policy/ Strategy There are 3 groups of criteria for assessing the quality of national sector policies /strategies: 1.Nature of policy process & ownership 2.Quality of policy objectives 3.Implementation arrangements

8. Project funded by The European Union Government of the Republic of Serbia European Integration Office National Sector Strategic Frameworks : Example

9. Project funded by The European Union Government of the Republic of Serbia European Integration Office Sector Policy /Strategy: Key Questions  Is the sector policy authored by domestic actors?  Is there enough political support & stakeholder involvement to ensure ownership & future sustainability?  Are policy objectives coherent with national development objectives?  Are the objectives sufficiently SMART?  Is there an ‘Action Plan’ showing the timing & sequencing of planned operations & showing institutional responsibilities for these?

10. Project funded by The European Union Government of the Republic of Serbia European Integration Office Institutional Setting There should be a Lead Ministry which:  Plays a leading role on donor coordination within the sector & works closely with the NIPAC  Is responsible for coordinating the planning /drafting of Sector Support Programmes  Coordinates with other relevant stakeholders  Coordinates the implementation of IPA funded sector support.  Coordinates the collection and analysis of monitoring data (indicators) for IPA sector support.

11. Project funded by The European Union Government of the Republic of Serbia European Integration Office Institutional Mapping: e.g. Justice Sector Lead MinistryMinistry of Justice (MoJ) Body Responsible for Priority P1: MoJP2: Office of Human and Minority Rights (OHMR) Body Responsible for Measure M1.1, M1.2, M1.3: MoJM2.1, M2.2: OHMR Potential end beneficiaries  High Judicial Council  State Prosecutorial Council  Supreme Court of Cassation  The Public Prosecutor’s Office  The Prosecutor’s Office for Organised Crime  Judicial Academy  The Anti-Corruption Agency  Ombudsman’s Office  Office of the Commissioner for Equality  Directorate for Gender Equality (in Ministry of Labour and Social Policy)  Commissariat for Refugees and Migration

12. Project funded by The European Union Government of the Republic of Serbia European Integration Office Functional Analysis Policy Making Resource Planning Resource Allocation Policy Implementation Monitoring Coordination Institution 1  Institution 2  Institution 3  Institution N

13. Operating Structure IPA Monitoring Committee Sector Monitoring Committee Sector Working Group SECTOR OPERATING STRUCTURE Sector Lead Institution Body Responsible for Measure 1 Body Responsible for Measure 2 Body Responsible for Measure N Contracting Authority End Beneficiaries Contractors /Service Providers NIPAC/ NIPAC-TS EC-HQ / EUD National Authorising Officer /National Fund

14. Project funded by The European Union Government of the Republic of Serbia European Integration Office Institutional Capacity  The Lead Ministry and other institutions within the Operating Structure must have the capacity to absorb existing and planned IPA financial support  Recent workload analyses of the Serbian administration (carried out in support of DIS /DMS accreditation) have show that, at present staffing levels, certain Lead Ministries will experience difficulties in absorbing IPA funds over the 2014-16 period.

15. Project funded by The European Union Government of the Republic of Serbia European Integration Office Absorption Capacity (I): Ministry of Justice 1.Inherited Workload  IPA 2012 (2 service+1 supply+1 works+1 direct grant)  IPA 2013 (3 service+1 supply+ 3 twinnings+1 works) 2.The Procurement Plan Year of Contracting 201320142015Total Number of Contracts 19313 Year20132014201520162017201 8 Total (M€) IPA 2012-13 Disbursement: Contracting 1.607.129.727.434.4230.29 IPA 2014-16 Disbursement: Contracting 30.80 M€ (for 3 yr SPD)

16. Project funded by The European Union Government of the Republic of Serbia European Integration Office Absorption Capacity (II): Ministry of Justice 4.Existing and Planned Staffing Levels are as follows:  Available staff (incl. Heads of Division)=6;  Systematised staff (i.e. Planned)=9 5.Conclusion. Unless missing staff are recruited, the MoJ will not be able to implement IPA 2012-13 according to the Procurement Plan. The peak demand will be in 2014-15 which coincides with additional demands for contracting IPA2 Sector Programmes. The capacity of the MoJ to absorb IPA II funding will be low. Year201320142015201620172018 WLA staff needed for IPA 2012-13 477543 3.Workload Analysis (WLA) for staffing needs to implement IPA 2012- 13 shows the following minimum staffing levels needed to meet the Procurement Plan, these are as follows:

17. Project funded by The European Union Government of the Republic of Serbia European Integration Office Institutional Setting & Capacity: Key Questions  Has the sector been defined with institutional coherence in mind?  Is there a lead Ministry in the Sector?  Are there inter-institutional agreements showing responsibilities for achieving sector targets?  Have workload analyses of the institutions in the Implementing Structure been carried out?  Is capacity building envisaged?  How & when will a needs assessment be carried out?

18. Project funded by The European Union Government of the Republic of Serbia European Integration Office Sector Coordination Covers 2 components: (1) Coordination of government institutions & key non-government stakeholders; (2) Coordination of donors.  Lead Ministry /Institution responsible for establishing & coordinating an ‘Operating Structure’ composed of the main government institutions involved in sector policy /strategy making and implementation.  Functional, government-led Sector Working Groups.  Government manages database(s) of external assistance per sector.  Government publishes regular monitoring/ progress reports for each sector.

19. Project funded by The European Union Government of the Republic of Serbia European Integration Office Sector Coordination: Key Questions  Do appropriate coordination mechanisms exist within, and between, the responsible government institutions?  Are there coordination mechanisms between the government and non-state actors?  Are there functional donor coordination arrangements in place?  Is there an up to date database of donor assistance?  Is the coordination effective and inclusive?  Is there sector leadership and willingness of government to take the lead in donor coordination or does the government show potential to develop leadership role effectively in the short term?

20. Project funded by The European Union Government of the Republic of Serbia European Integration Office Sector Budget  There needs to be a clear link between sector policy & budgeting.  Sector plans should be properly priced & prioritized within a realistic estimate of the resources available from the national budget & external donors.  IPA II Sector Support Programmes are planned to be multi-annual & should be co-financed by predictable, multi-annual national funding.  It is necessary to provide a brief description of the sector budget on an annual, & if possible, on a medium-term perspective (3-5 years). Ideally there should be a Medium Term Expenditure Framework (MTEF) for the sector.  However, development of MTEFs will be gradual, at first assessments should focus on the existence of credible annual sector budgets. At minimum, it is crucial to verify whether the sector budget can be identified in the state budget.

21. Project funded by The European Union Government of the Republic of Serbia European Integration Office Sector Budget: Key Questions  Can the sector budget be easily identified in the state budget?  What is the overall level of sector financing?  Is the share the sector within total government expenditures increasing?  If a Sector MTEF is not in place, are sector allocations secured & visible in the general budget?  Is there an on-going process leading to the setting up of Sector MTEF?  If a sector MTEF is foreseen by the government how can its elaboration be supported by the Sector Support Programme?

22. Project funded by The European Union Government of the Republic of Serbia European Integration Office Monitoring Performanc e  Stand-alone project-based assistance emphasises the monitoring of resource usage (inputs) & immediate deliverables (outputs) and relatively little on achieving objectives.  By contrast the sector approach will introduce much stronger results orientation to monitoring assistance & will focus national monitoring systems on measuring the achievement of policy objectives. There should be agreement on a Performance Assessment Framework (PAF). Indicator Level Function of IndicatorsExamples (judicial reform) ImpactsMeasure the wider benefits beyond direct beneficiaries % decrease in the backlog of civil cases % increase in satisfaction rates ResultsMeasure the benefits produced for direct beneficiaries % reduction in number of appeals lodged due to inconsistent court rulings % increase in number of court rulings enforced

23. Project funded by The European Union Government of the Republic of Serbia European Integration Office PAFs: Key Questions  Does a national monitoring system based on performance criteria (PAF) exist and/or is its development foreseen during implementation?  How does the PAF link to the IPA monitoring system?  What are the options foreseen to support PAF development/consolidation?

24. Project funded by The European Union Government of the Republic of Serbia European Integration Office Public Finance Management (PFM): Key Questions  Is there a PFM reform programme in place?  What are the PFM mechanisms in place for the sector?  Based on information available what are the possible areas where support could be considered?  How do the remaining weaknesses affect the sector policy & what recommendations can be made to improve the situation?

25. Project funded by The European Union Government of the Republic of Serbia European Integration Office Macro-Economic Framework  The purpose of the macro-economic assessment is to assess the stability of the macroeconomic situation & consequent potential for future public funding  It is not expected that a separate macroeconomic analysis be carried out, but that a judgement on stability-oriented macroeconomic policies be made on the basis of existing documentation.

26. Project funded by The European Union Government of the Republic of Serbia European Integration Office Macro-Economic Framework : Key Questions  What measures can be supported to improve the beneficiary's macroeconomic policy?  How do these measures influence the beneficiaries' sector policy?

27. Project funded by The European Union Government of the Republic of Serbia European Integration Office Overall Assessment  The purpose of assessments is to establish sector-level policy dialogues with beneficiary country authorities. Negative assessments of the key criteria do not necessarily prevent the adoption of a sector approach.  Few beneficiary countries will have functioning MTEFs & PAFs in place in 2014 but this is not a barrier to the introduction of sector approaches.  Sector assessment provides a basis for targeting necessary TA & capacity building activities.  However, 3 criteria are considered essential & must be in place before adopting a sector approach: 1)The existence of a national sector policy /strategy & a sector budget or a government commitment to develop these. 2) A lead institution/ ministry responsible for the sector/subsector 3)The existence of a functional sector coordination framework or a government commitment to develop one.

28. Project funded by The European Union Government of the Republic of Serbia European Integration Office Overall Assessment: Key Questions  Are the priority sectors for IPA II assessed as being satisfactory on the 3 key criteria for a sector approach?  Can the problems revealed by negative assessments be addressed with domestic /IPA /other donor resources as part of programme preparation for 2014?  Can the problems revealed by negative assessments be mitigated by the time of the mid-term review?

29. Project funded by The European Union Government of the Republic of Serbia European Integration Office