1. Financial means in BSR INTERREG III B & IIIA The basics all stakeholders should know about the financial management in BSR INTERREG III B and IIIA Belarus Denmark Estonia Finland Germany Latvia Lithuania Norway Poland Russia Sweden

2. Questions 1.Where does the programme get its money from? 2.What is the role of the Secretariats? 3.What is the TA Budget and what is it for? 4.How much will the new Member States contribute to it? 5.What is a ERDF co-financing rate? 6.What is a grant rate?

3. The way of the money/ the Secretariats role (Project funds) INTERREG IIIA COM+Nor MS+Nor (national, regional or local level) Projects request payments from COM financial monitoring payments to beneficiaries Joint Secretariat (Management of funds) Paying Authority (Transfer of funds) ERDF/Nor funds National co-financing ERDF/Nor funds

4. The way of the money/ the Secretariats role (TA funds) INTERREG IIIA COM+Nor MS+Nor (national, regional or local level) Projects Joint Secretariat Paying Authority (Transfer of funds) ERDF/Nor funds National co-financing Providing imlementation services

5. Principle to consider -funds of all MS will be subject to actual payment requests (activity of projects), therefore: ERDF funds allocated eventual ERDF outpayments (to individual states)(to projects in that country)

6. Technical Assistance (TA) Nature of TA: Technical Assistance (TA) is one part of the total programme budget. It consists of ERDF funds and a national contribution, just like the budget for the projects. Application of funds: Technical Assistance (TA) is used to finance costs for the implementation of the programme. It refers to costs concerning administration, information, and acquisition of equipment, development and operation of computerised systems, monitoring, evaluation and control. Programme Complement, 2003

7. Contributions of new Member States to BSR IR III B & A priorities (preliminary figures) No additional funds from DK, GER, SWE, FIN, NOR: original contribution unchanged

8. Underlying considerations applied with budget preparation - IR IIIA TA budget under IR III B umbrella but: separate compilation for each individual budget -Management of Prio. 1-3 (III B incl. enlargem.) -Management of Priority 4 -Management of Prio. 5-6 (IIIA) - total TA budget (just as budgets for projects) depends on national co-financing rate (large varations possible) - different current TA-rates considered (III B=5.4%, Prio.4=5.0%, IIIA=5.0%)

9. Calculation of TA ERDF Projects TA 5 % National co- financing 50 % Assumptions: - TA share = 5% of total ERDF budget (e.g. IIIA) - TA: common ERDF co-financing rate (50%) 95 %

10. ERDF co-financing rate = share (in %) of ERDF funds in the total public budget paid out to a project (project level) ERDF National public participation min. 25 % up to 75 % Total public eligible costs of a project Partners from non-objective 1 areas: entitled to receive up to 50% ERDF Partners from objective 1 areas: entitled to receive up tp 75% ERDF ->actual share of ERDF funds set by SC See also: http://europa.eu.int/comm/regional_policy/ interreg3/foire/faq3_en.htm#5

11. Grant rate = share (in %) of ERDF funds in the total public budget paid out to projects over all projects cumulated (programme level) (also called: average ERDF co-financing rate) ERDF National public participation min. 25 % up to 75 % (extreme case) Total public budget of the programme COM will make payment of ERDF funds only up to max. grant rate level approved in programme documents! (currently: 53.2%) decommittment if actual rate is higher!)

12. Grant rate set for payment requests made by JS to COM currently:53.2% (each payment to COM request must not have a higher grant rate!) goal: set high enough in new CIP to cover all possible peaks in upcoming payment requests reasons:1. already now peaks of up to 67.6% 2. many objective 1 area partners expected proposal: increase rate to 70% execution: retro-actively (to approved/paid funds) to claim funds already decommitted (as stated in an earlier COM-comment)

13. Example calculations 1. Sample programme situation (Programme consists of only 2 projects): - 2 projects from non-objective 1 area apply for ERDF funds ERDF co-financing 50% National co-financing 50% 50.000 (50.000+50.000) 200.000 = 0. 50 Grant rate =50% ERDF co-financing 50% National co-financing 50% 200.000 Overall share of ERDF funds (=grant rate) Total programme budget Project budget (by fin. Source) Project Budget 1 100.000 Project Budget 2 100.000

14. Example calculations ERDF co-financing 75% National co-financing 25% 75.000 25.000 75.000 25.000 (75.000+75.000) 200.000 = 0.75 Grant rate =75% ERDF co-financing 75% National co-financing 25% 200.000 Overall share of ERDF funds (=grant rate) Total programme budget Project budget (by fin. Source) 2. Sample programme situation (Programme consists of only 2 projects): - 2 projects from objective 1 area apply for ERDF funds Project Budget 1 100.000 Project Budget 2 100.000

15. Example calculations 3. Sample programme situation (Programme consists of only 2 projects): - 1 project from non-objective 1 area - 1 project from objective 1 area ERDF co-financing 50% National co-financing 50% Project Budget 1 100.000 50.000 75.000 25.000 Overall share of ERDF funds (=grant rate) (50.000+75.000) 200.000 = 0.625 Grant rate =62,5% Project Budget 2 100.000 ERDF co-financing 75% National co-financing 25% Total programme budget 200.000 Project budget (by fin. Source)