© 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.

© OECD

A j

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Jan Gregor

THE NATIONAL FUND VS. NATIONAL BUDGET

PROCESS

Seminar on Budget and EU FundsSkopje, 14-15 May 2007

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

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

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

1990Minister

Deputy MinisterBUDGET

Deputy MinisterFOREIGN AFF.

CFA

CFCU

Deputy MinisterCONTROL

CONTROL

STATE BUDGET

FINAL ACCOUNT

1998Minister

NAO NAC

CFA

CFCU

Deputy MinisterCONTROL

CONTROL

STATE BUDGET

FINAL ACCOUNT

2001Minister

NAO NAC

CFA

CFCU

Deputy MinisterCONTROL

CONTROL

STATE BUDGET

FINAL ACCOUNT

NF

Mid 2002Minister

NAO NAC

CFA

CFCU

Deputy MinisterCONTROL

IA

STATE BUDGET

FINAL ACCOUNT

NF

CHU/CA

2004Minister

Deputy MinisterBUDGET

Deputy MinisterFOREIGN AFF.

CFA

Deputy MinisterCONTROL

IA

STATE BUDGET

FINAL ACCOUNT

PA/NF

CHU/W-U

CFCU

2007Minister

Deputy MinisterBUDGET

Deputy MinisterFOREIGN AFF.

CFA

Deputy MinisterCONTROL

IA

STATE BUDGET

FINAL ACCOUNT

PCO/PA/NF

AO/W-U/CHU

CFCU

MRD Ministry of Finance

Line Ministry

MAOP/SPD

MCOP

SPD

PUIB

PA

Financial Flows

Certification

On-the-spot checks

Winding-up

MCCSF MA CSF

IA

IA

IA

IA

EUROPEAN COMMISSION

Final Beneficiaries / Final Recipients

Parallel Flow of EU Funds (2004-2006)

Strategic Community Guidelines

National Strategic Ref. Framework

OP 1 OP 2 OP 3 OP x

27-28

37-41

National Budget System

About 18 legislative possibilities for the Use of EU funds

25-26

Art

.Li

nks

to A

rtic

les

of

the G

enera

l R

egula

tion

Flow of EU Funds via National System (2007-13)

Art

.Li

nks

to A

rtic

les

of

the G

enera

l R

egula

tion

Thematic Operational Programmes

MF

Ministry

MAOP

MCOP

PCA

Financial manag.

Certification

Beneficiary

Sample Audits

Audit Authorit

y

MCCSF

MA CSF

IAIA

EUROPEAN COMMISSION

Budget Dept.

Fin. Dep

t

61

63

62

60

62, 1b

75-98

62, 1a

ProgrammingImplementationFinancial FlowCertification/Audit Authority

Art

.Li

nks

to A

rtic

les

of

the G

enera

l R

egula

tion

Regional Programmes

MRD MF

RR

MAROP

MCROP

PCO

Financial manag.

Certification

Beneficiary

Sample Audits

Audit Authorit

y

MCCSF

MA CSF

IAIA

EUROPEAN COMMISSION

Budget Dept.

Fin. Dep

t63 60

62, 1b

62, 1a

75-98 61 62

ProgrammingImplementationFinancial FlowCertification/Audit Authority

Authorising

Officer

Accounting Officer

Authorising Officer

Budget Admini-strator

Accounting Officer

MA PA AO

Internal Management andControl System

European Union

Member state

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

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: ???

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

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

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

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

Thank you for attention

[email protected]