europeaid 1 delegated cooperation and co-financing : application of aid effectiveness to ec...
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EuropeAidDELEGATED DELEGATED COOPERATION COOPERATION
AND CO-FINANCINGAND CO-FINANCING::Application of Aid Effectiveness Application of Aid Effectiveness
to EC proceduresto EC procedures
October 2009AIDCO/G7
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EuropeAidSUMMARY
1. Introduction
2. Common characteristics
3. Delegating to national agencies: indirect centralised management
4. Delegating to beneficiary countries: decentralised management
5. Delegating to international organisations: joint management
6. Transfer of funds from donors to the EC
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EuropeAidContext
• Aid effectiveness:
o Paris Declaration (2005) and Accra follow-up (2008); o European Consensus (2005); o Code of Conduct on Division of Labour (2007)
• Principles:o Ownershipo Harmonisationo Alignment
• Drivers: Use of country systems and Division of Labour
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EuropeAidNew specific legal basis for joint co-financing with and delegating to other donors
POOL FUND(Joint-co financed funds):
Managed by whom?
Donor 1 Donor 2 Donor 3
BEFORE 2007
ONLY by IOs
AFTER 2007
ALSO EC & national agencies & Benef countries
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EuropeAidManagement mode/Methods of implementation
executiveagencies
bodies set up byCommunities
"(tradit. agencies) "
bodies with a publicservice mission"(nat. agencies)"
centralisedjoint
(International
Organisations)
shared(MemberStates )
direct indirect
decentralised(Third
Countries)
The Commission may also manage funds received from other donors
(International organisations)
joint
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EuropeAidOverview
Entity Management mode
Legal instruments
Procedures for management
mode
1. Delegation to international organisation
joint management contribution agreement
procedures of the international organisation
2. Delegation to public or
private body with a public
service mission
indirect centralised management
delegation agreement
choice between the EC rules or that of
the delegated body
3. Delegation to beneficiary
country
decentralised management
financing agreement
choice between the EC rules, that of the beneficiary
country or that of other donor
4. Reception of funds by European
Commission
Defined in the AAP, usually direct centralised:
this modality refers only to the source of financing
transfer agreement
Depending on management
mode defined in AAP (usually EC’s
procedures)
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EuropeAidDELEGATED COOPERATION: Common characteristics- What does it mean?
Role of the delegatee entity (Beneficiary country, national agency, an IO): it becomes Contracting Authority instead of Commission
Launch procedures & sign contracts, Depending on the degree: manage payments to
contractors/grant beneficiaries Control
Delegated cooperation works both ways: The Commission can also be delegated by other donors : assigned revenues.
The use of Delegated Cooperation (management mode) has to be included in Financing Decision/AAP
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EuropeAidDELEGATED COOPERATIONCommon characteristics- Pillar Review
• The delegation of budgetary tasks requires an ex ante
assessment of the entity (pillars):
1) transparent procurement and grant-award procedures;
2) internal control system
3) accounting system
4) audit;
5) adequate annual ex post publication of beneficiaries
6) (for ICM only : access to documents)
Assessment carried out by G2/ responsible AO
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EuropeAidDelegation to a national body:Indirect centralised management (II)
CONDITIONS
- Who is concerned? Article 54(2)(c) FR/25(3)(b) FR 10th EDF:
national bodies or bodies governed by private law with a public-
service mission providing adequate financial guarantees.
- Choice of the entity: if complies with the principles of
economy, effectiveness, sound financial management and
efficiency and its is chosen in an objective, transparent and
non discriminatory manner + pillars (Art 56 FR / 26 FR 10th
EDF)
• Justification to the European Parliament.
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EuropeAidIndirect centralised management (III)
APPLICABLE PROCEDURES
- The assessment would determine the possibility for the national
body to use its own procedures or those of the Commission
(grants: difference between EDF and Budget).
- Steps: The use of the management mode and, in general, the name
of the chosen body is contained in the financing decision (Annual
Action Programme). This is approved by the relevant Committee and
the Commission (College)
- The agreement to be used is the Delegation Agreement (There
may be other documents: MoU amongst donors)
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EuropeAidIndirect centralised management (IV)
DELEGATION AGREEMENT
- Applicable fee: maximum 7%
- Contracting with third parties: procedures and rules of
nationality and origin.
- Are in-house activities eligible?
- Rules on eligibility of costs
- Financial aspects: Bank accounts and interests
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EuropeAidDecentralised management (I)(EC & EDF funds)
BC acts as CA:
- Always delegated: award and signature of contracts.
-May be further decentralised:
- Payments (financial management
- Procedures to be used (finance & proc)
FA
Commission:
-Control (ex ante or ex post) always “centralised” =
residual tasks
Procedure:
-Pillar assessment for non EC procedures
-Decision college (decentralised management)
- Signature of a Financing Agreement
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EuropeAidDecentralised Management (II): Co-financing amongst donors
FA
MoU
HOW TO ENSURE REDUCTION OF TRANSACTIONAL COSTS?
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EuropeAidJOINT MANAGEMENT (I)
CA
Procedure:
- Pillar assessment
- Decision college (joint management)
- Signature of a Contribution Agreement
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EuropeAidTRANSFER AGREEMENTS (II) PRINCIPLES
• Commission can receive funds from other donors:o Member Stateso Other third donor countryo International Organisations
• Authorization by the College to receive funds: Financing decision/Annual Action
Programme
• Priority of consumption of assigned revenues (funds received by donors)
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EuropeAidTRANSFER AGREEMENTS (III)MAIN ELEMENTS OF THE AGREEMENT
• Contributions would be incorporated in budget after signature of
a Transfer Agreement. Main elements:o The normal EC procedures will be followed to implement
these funds – so the Commission comply with the Financial
Regulations and Implementing Rules (audits, internal
control, procurement, accounting, etc)o Assigned revenues: “prioritary consumption” (art 10 RF)o Fee: average of 4%o Reports, visibility, etc
• Possible Memorandum of Understanding amongst donors