MoP SF 07 04 2008 - version 1

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1. INTRODUCTION ....................................................................................... 14

2. ROLES AND RESPONSIBILITIES................................................................. 16

2.1 Managing Authority (MA)2.1 Managing Authority (MA)2.1 Managing Authority (MA)2.1 Managing Authority (MA)........................................................................................................................................................................................................................................................................................................................................................16161616

2.2 Paying Authority (PA)2.2 Paying Authority (PA)2.2 Paying Authority (PA)2.2 Paying Authority (PA) ............................................................................................................................................................................................................................................................................................................................................................................17171717

2.3 Intermediate Body (IB)2.3 Intermediate Body (IB)2.3 Intermediate Body (IB)2.3 Intermediate Body (IB) ........................................................................................................................................................................................................................................................................................................................................................................18181818

2.4 Department of Contracts (DoC)2.4 Department of Contracts (DoC)2.4 Department of Contracts (DoC)2.4 Department of Contracts (DoC) ................................................................................................................................................................................................................................................................................................................20202020

2.5 General Contracts Committee (GCC)2.5 General Contracts Committee (GCC)2.5 General Contracts Committee (GCC)2.5 General Contracts Committee (GCC) ....................................................................................................................................................................................................................................................................................21212121

2.6 Special Contracts 2.6 Special Contracts 2.6 Special Contracts 2.6 Special Contracts Committee (SCC)Committee (SCC)Committee (SCC)Committee (SCC) ............................................................................................................................................................................................................................................................................................21212121

2.7 Public Contracts Appeal Board (PCAB)2.7 Public Contracts Appeal Board (PCAB)2.7 Public Contracts Appeal Board (PCAB)2.7 Public Contracts Appeal Board (PCAB) ............................................................................................................................................................................................................................................................................21212121

2.8 Accountant General (AG)/Treasury2.8 Accountant General (AG)/Treasury2.8 Accountant General (AG)/Treasury2.8 Accountant General (AG)/Treasury................................................................................................................................................................................................................................................................................................21212121

2.9 Central Bank of Malta (CBM)2.9 Central Bank of Malta (CBM)2.9 Central Bank of Malta (CBM)2.9 Central Bank of Malta (CBM) ....................................................................................................................................................................................................................................................................................................................................22222222

2.10 Budget Office (MFIN)2.10 Budget Office (MFIN)2.10 Budget Office (MFIN)2.10 Budget Office (MFIN) ........................................................................................................................................................................................................................................................................................................................................................................22222222

2.11 Internal Audit & Inv2.11 Internal Audit & Inv2.11 Internal Audit & Inv2.11 Internal Audit & Investigations Directorate (IAID)estigations Directorate (IAID)estigations Directorate (IAID)estigations Directorate (IAID)....................................................................................................................................................................................................23232323

2.13 National Audit Office (NAO)2.13 National Audit Office (NAO)2.13 National Audit Office (NAO)2.13 National Audit Office (NAO) ................................................................................................................................................................................................................................................................................................................................24242424

2.14 Line Ministry2.14 Line Ministry2.14 Line Ministry2.14 Line Ministry ........................................................................................................................................................................................................................................................................................................................................................................................................................24242424

•••• EU Affairs DirectorEU Affairs DirectorEU Affairs DirectorEU Affairs Director........................................................................................................................................................................................................................................................................................................................................................................................24242424

•••• Accounting OfficerAccounting OfficerAccounting OfficerAccounting Officer ....................................................................................................................................................................................................................................................................................................................................................................................25252525

2.15 Final Beneficiary2.15 Final Beneficiary2.15 Final Beneficiary2.15 Final Beneficiary....................................................................................................................................................................................................................................................................................................................................................................................................25252525

2.16 Contractor2.16 Contractor2.16 Contractor2.16 Contractor ....................................................................................................................................................................................................................................................................................................................................................................................................................................26262626

2.17 Monitoring Committee for Structural Funds (MC)2.17 Monitoring Committee for Structural Funds (MC)2.17 Monitoring Committee for Structural Funds (MC)2.17 Monitoring Committee for Structural Funds (MC)....................................................................................................................................................................................................26262626

2.18 Sectoral M2.18 Sectoral M2.18 Sectoral M2.18 Sectoral Monitoring Subonitoring Subonitoring Subonitoring Sub----Committees (SMSC)Committees (SMSC)Committees (SMSC)Committees (SMSC) ........................................................................................................................................................................................................................27272727

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2.19 Regional Project Committee (Gozo) {RPC}2.19 Regional Project Committee (Gozo) {RPC}2.19 Regional Project Committee (Gozo) {RPC}2.19 Regional Project Committee (Gozo) {RPC} ................................................................................................................................................................................................................................................28282828

2.20 Project Selection Committee (PSC)2.20 Project Selection Committee (PSC)2.20 Project Selection Committee (PSC)2.20 Project Selection Committee (PSC) ........................................................................................................................................................................................................................................................................................29292929

2.21 State Aid Monitoring Board (SAMB)2.21 State Aid Monitoring Board (SAMB)2.21 State Aid Monitoring Board (SAMB)2.21 State Aid Monitoring Board (SAMB) ....................................................................................................................................................................................................................................................................................29292929

2.22 Malta Environment & Planning Authority (MEPA)2.22 Malta Environment & Planning Authority (MEPA)2.22 Malta Environment & Planning Authority (MEPA)2.22 Malta Environment & Planning Authority (MEPA) ........................................................................................................................................................................................................30303030

2.23 National Commission for the Promotion of Equality for Men and Women2.23 National Commission for the Promotion of Equality for Men and Women2.23 National Commission for the Promotion of Equality for Men and Women2.23 National Commission for the Promotion of Equality for Men and Women........................................................31313131

2.24 Department of VAT2.24 Department of VAT2.24 Department of VAT2.24 Department of VAT ................................................................................................................................................................................................................................................................................................................................................................................32323232

3. COMPLIANCE WITH COMMUNITY POLICIES ......................................... 33

3.1 State Aid3.1 State Aid3.1 State Aid3.1 State Aid........................................................................................................................................................................................................................................................................................................................................................................................................................................................33333333

3.2 Environment3.2 Environment3.2 Environment3.2 Environment ................................................................................................................................................................................................................................................................................................................................................................................................................................34343434

3.3 Equal Opportunities3.3 Equal Opportunities3.3 Equal Opportunities3.3 Equal Opportunities ....................................................................................................................................................................................................................................................................................................................................................................................34343434

3.4 Public Procurement3.4 Public Procurement3.4 Public Procurement3.4 Public Procurement ........................................................................................................................................................................................................................................................................................................................................................................................34343434

4. PROGRAMMING PROCEDURES.............................................................. 36

4.1 Part I 4.1 Part I 4.1 Part I 4.1 Part I –––– Selection of Priorities and Measures Selection of Priorities and Measures Selection of Priorities and Measures Selection of Priorities and Measures ........................................................................................................................................................................................................................................36363636

4.1.1 Single Programming Document4.1.1 Single Programming Document4.1.1 Single Programming Document4.1.1 Single Programming Document ....................................................................................................................................................................................................................................................................................................36363636

4.1.4.1.4.1.4.1.2 Programme Complement2 Programme Complement2 Programme Complement2 Programme Complement............................................................................................................................................................................................................................................................................................................................................37373737

4.2 Part II 4.2 Part II 4.2 Part II 4.2 Part II –––– Selection of Projects Selection of Projects Selection of Projects Selection of Projects....................................................................................................................................................................................................................................................................................................................................38383838

4.2.1 Call for Projects4.2.1 Call for Projects4.2.1 Call for Projects4.2.1 Call for Projects ................................................................................................................................................................................................................................................................................................................................................................................................38383838

4.2.2 Receipt of Projects4.2.2 Receipt of Projects4.2.2 Receipt of Projects4.2.2 Receipt of Projects ................................................................................................................................................................................................................................................................................................................................................................................39393939

4.2.3 Preliminary assessment and pre4.2.3 Preliminary assessment and pre4.2.3 Preliminary assessment and pre4.2.3 Preliminary assessment and pre----ranking:ranking:ranking:ranking: ........................................................................................................................................................................................................................................40404040

4.2.4 Evaluation by th4.2.4 Evaluation by th4.2.4 Evaluation by th4.2.4 Evaluation by the Project Selection Committee (PSC)e Project Selection Committee (PSC)e Project Selection Committee (PSC)e Project Selection Committee (PSC)............................................................................................................................................................................41414141

4.2.5 Selection of Projects4.2.5 Selection of Projects4.2.5 Selection of Projects4.2.5 Selection of Projects........................................................................................................................................................................................................................................................................................................................................................................41414141

4.2.6 Unsuccessful Project Proposals & Appeals Procedure4.2.6 Unsuccessful Project Proposals & Appeals Procedure4.2.6 Unsuccessful Project Proposals & Appeals Procedure4.2.6 Unsuccessful Project Proposals & Appeals Procedure........................................................................................................................................................................42424242

5. AID SCHEMES TO THE PRIVATE SECTOR FOR MEASURES 1.3, 3.1, 3.2 & 3.3

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5.1 Programming5.1 Programming5.1 Programming5.1 Programming............................................................................................................................................................................................................................................................................................................................................................................................................................43434343

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5.25.25.25.2 ImplementationImplementationImplementationImplementation ........................................................................................................................................................................................................................................................................................................................................................................................44444444

5.2.15.2.15.2.15.2.1 Transparency GuidelinesTransparency GuidelinesTransparency GuidelinesTransparency Guidelines ....................................................................................................................................................................................................................................................................................................................44444444

5.2.25.2.25.2.25.2.2 Setting up of an Evaluation and SelecSetting up of an Evaluation and SelecSetting up of an Evaluation and SelecSetting up of an Evaluation and Selection Committeetion Committeetion Committeetion Committee ............................................................................................................................................45454545

5.2.35.2.35.2.35.2.3 VAT Reimbursement in case of Aid SchemesVAT Reimbursement in case of Aid SchemesVAT Reimbursement in case of Aid SchemesVAT Reimbursement in case of Aid Schemes ................................................................................................................................................................................................47474747

5.2.45.2.45.2.45.2.4 Retention of Documents for Final RecipientsRetention of Documents for Final RecipientsRetention of Documents for Final RecipientsRetention of Documents for Final Recipients ................................................................................................................................................................................................48484848

5.2.55.2.55.2.55.2.5 Project ImplementationProject ImplementationProject ImplementationProject Implementation ............................................................................................................................................................................................................................................................................................................................48484848

5.2.65.2.65.2.65.2.6 ExExExEx----Post Management ControlPost Management ControlPost Management ControlPost Management Control ........................................................................................................................................................................................................................................................................................49494949

5.25.25.25.2.7.7.7.7 OnOnOnOn----thethethethe----spot check procedure for Aid Schemesspot check procedure for Aid Schemesspot check procedure for Aid Schemesspot check procedure for Aid Schemes................................................................................................................................................................................51515151

6. TECHNICAL ASSISTANCE ........................................................................ 52

6.1 Introduction ............................................................................................................................................................................................................................................................................................................................................................................................................................52525252

6.2 Technical Assistance under Malta’s SPD ........................................................................................................................................................................................................................................................52525252

6.3 General Objectives of the Technical Assistance ............................................................................................................................................................................................................52525252

6.4 Eligible Actions Under TA ................................................................................................................................................................................................................................................................................................................................................53535353

6.5 6.5 6.5 6.5 Request ProceduresRequest ProceduresRequest ProceduresRequest Procedures ....................................................................................................................................................................................................................................................................................................................................................................................54545454

6.5.1 Request for procurement single activities/initiatives/items....................................................................................................................54545454

6.5.2 Requests for initiatives comprising of multiple activities........................................................................................................................................55555555

6.5.3 Requests for capacity building initiatives ....................................................................................................................................................................................................................................55555555

6.6 Payment Process6.6 Payment Process6.6 Payment Process6.6 Payment Process ........................................................................................................................................................................................................................................................................................................................................................................................................56565656

6.6.1 Payment Process for procurement single activities/initiatives/items ............................................................56565656

6.6.2 Payment Process for inititiatives comprising of multiple activities [Sub

projects] 58585858

6.6.3 Payment Process for capacity building initiatives....................................................................................................................................................................................58585858

6.76.76.76.7 Audit Trail Audit Trail Audit Trail Audit Trail ............................................................................................................................................................................................................................................................................................................................................................................................................................................63636363

7. CONTRACTING ....................................................................................... 65

7.1 Introduction7.1 Introduction7.1 Introduction7.1 Introduction ................................................................................................................................................................................................................................................................................................................................................................................................................................65656565

7.2 General Principles7.2 General Principles7.2 General Principles7.2 General Principles ................................................................................................................................................................................................................................................................................................................................................................................................66666666

7.3 Contracts that do not exceed 7.3 Contracts that do not exceed 7.3 Contracts that do not exceed 7.3 Contracts that do not exceed €47,000 (Lm20,000)€47,000 (Lm20,000)€47,000 (Lm20,000)€47,000 (Lm20,000) (organisations under schedule 2 (organisations under schedule 2 (organisations under schedule 2 (organisations under schedule 2

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of the Procurement Regulations)of the Procurement Regulations)of the Procurement Regulations)of the Procurement Regulations) ................................................................................................................................................................................................................................................................................................................................67676767

7.4 Contracts that exceed 7.4 Contracts that exceed 7.4 Contracts that exceed 7.4 Contracts that exceed €47,000€47,000€47,000€47,000 (Lm20,000)(Lm20,000)(Lm20,000)(Lm20,000) ........................................................................................................................................................................................................................................68686868

7.4 1 Administrative Steps7.4 1 Administrative Steps7.4 1 Administrative Steps7.4 1 Administrative Steps ....................................................................................................................................................................................................................................................................................................................................................................69696969

7.5 Evaluation Committees7.5 Evaluation Committees7.5 Evaluation Committees7.5 Evaluation Committees....................................................................................................................................................................................................................................................................................................................................................................70707070

7.7 Contact Point7.7 Contact Point7.7 Contact Point7.7 Contact Point ............................................................................................................................................................................................................................................................................................................................................................................................................................73737373

7.8 Employment Contracts7.8 Employment Contracts7.8 Employment Contracts7.8 Employment Contracts ....................................................................................................................................................................................................................................................................................................................................................................74747474

7.9 Procurement of Equipment7.9 Procurement of Equipment7.9 Procurement of Equipment7.9 Procurement of Equipment ............................................................................................................................................................................................................................................................................................................................................74747474

7.10 Late Payments MF Circular 3/20057.10 Late Payments MF Circular 3/20057.10 Late Payments MF Circular 3/20057.10 Late Payments MF Circular 3/2005 ....................................................................................................................................................................................................................................................................................76767676

7.11 Approval of Additional Costs & Addenda to a Contract7.11 Approval of Additional Costs & Addenda to a Contract7.11 Approval of Additional Costs & Addenda to a Contract7.11 Approval of Additional Costs & Addenda to a Contract ................................................................................................................................................................76767676

7.11.1 Additional Costs to a Contract7.11.1 Additional Costs to a Contract7.11.1 Additional Costs to a Contract7.11.1 Additional Costs to a Contract ....................................................................................................................................................................................................................................................................................................76767676

7.11.2 Addenda to a Contract7.11.2 Addenda to a Contract7.11.2 Addenda to a Contract7.11.2 Addenda to a Contract ................................................................................................................................................................................................................................................................................................................................................77777777

7.12 Non7.12 Non7.12 Non7.12 Non----Compliance with contractual obligationsCompliance with contractual obligationsCompliance with contractual obligationsCompliance with contractual obligations ....................................................................................................................................................................................................................77777777

7.13 Releas7.13 Releas7.13 Releas7.13 Release of Financial Guaranteese of Financial Guaranteese of Financial Guaranteese of Financial Guarantees........................................................................................................................................................................................................................................................................................................78787878

8. MONITORING ............................................................................................. 80

8.1 Strategic Level8.1 Strategic Level8.1 Strategic Level8.1 Strategic Level ....................................................................................................................................................................................................................................................................................................................................................................................................................81818181

8.1.1 The Monitoring Committee8.1.1 The Monitoring Committee8.1.1 The Monitoring Committee8.1.1 The Monitoring Committee................................................................................................................................................................................................................................................................................................................................81818181

8.2 Sectoral Level8.2 Sectoral Level8.2 Sectoral Level8.2 Sectoral Level ........................................................................................................................................................................................................................................................................................................................................................................................................................82828282

8.2.1 The Sectoral Monitoring Sub8.2.1 The Sectoral Monitoring Sub8.2.1 The Sectoral Monitoring Sub8.2.1 The Sectoral Monitoring Sub---- Committees Committees Committees Committees ....................................................................................................................................................................................................................................82828282

8.3 Territorial Level8.3 Territorial Level8.3 Territorial Level8.3 Territorial Level ............................................................................................................................................................................................................................................................................................................................................................................................................83838383

8.3.1 The Regional Projects Committee (Gozo)8.3.1 The Regional Projects Committee (Gozo)8.3.1 The Regional Projects Committee (Gozo)8.3.1 The Regional Projects Committee (Gozo) ............................................................................................................................................................................................................................................83838383

8.4 Day8.4 Day8.4 Day8.4 Day----ttttoooo----Day MonitoringDay MonitoringDay MonitoringDay Monitoring................................................................................................................................................................................................................................................................................................................................................................83838383

8.5 Controls8.5 Controls8.5 Controls8.5 Controls ........................................................................................................................................................................................................................................................................................................................................................................................................................................................84848484

9. STRUCTURAL FUNDS DATABASE REPORTING............................................. 85

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10. REPORTING............................................................................................... 87

10.1 On10.1 On10.1 On10.1 On----going Progress Reportsgoing Progress Reportsgoing Progress Reportsgoing Progress Reports ................................................................................................................................................................................................................................................................................................................................87878787

10.1.1 Biannual progress reports and updates10.1.1 Biannual progress reports and updates10.1.1 Biannual progress reports and updates10.1.1 Biannual progress reports and updates ................................................................................................................................................................................................................................................87878787

10.1.2 Priority 410.1.2 Priority 410.1.2 Priority 410.1.2 Priority 4 ................................................................................................................................................................................................................................................................................................................................................................................................................................87878787

10.2 Reports of Sectoral Monitoring Sub10.2 Reports of Sectoral Monitoring Sub10.2 Reports of Sectoral Monitoring Sub10.2 Reports of Sectoral Monitoring Sub----CommitteesCommitteesCommitteesCommittees ....................................................................................................................................................................................................88888888

10.210.210.210.2.1 SMSCs Reports.1 SMSCs Reports.1 SMSCs Reports.1 SMSCs Reports ................................................................................................................................................................................................................................................................................................................................................................................................88888888

10.3 Annual Reports10.3 Annual Reports10.3 Annual Reports10.3 Annual Reports ........................................................................................................................................................................................................................................................................................................................................................................................................89898989

10.3.1 Contribution by the various players10.3.1 Contribution by the various players10.3.1 Contribution by the various players10.3.1 Contribution by the various players ....................................................................................................................................................................................................................................................................89898989

10.4 Final Reports10.4 Final Reports10.4 Final Reports10.4 Final Reports ....................................................................................................................................................................................................................................................................................................................................................................................................................96969696

11. EVALUATION ............................................................................................ 98

11.1 Overview11.1 Overview11.1 Overview11.1 Overview ............................................................................................................................................................................................................................................................................................................................................................................................................................................98989898

11.2 Evaluation 11.2 Evaluation 11.2 Evaluation 11.2 Evaluation criteriacriteriacriteriacriteria ........................................................................................................................................................................................................................................................................................................................................................................................98989898

11.3 Ex11.3 Ex11.3 Ex11.3 Ex----ante Evaluationante Evaluationante Evaluationante Evaluation ....................................................................................................................................................................................................................................................................................................................................................................................99999999

11.4 Mid Term Evaluation11.4 Mid Term Evaluation11.4 Mid Term Evaluation11.4 Mid Term Evaluation ........................................................................................................................................................................................................................................................................................................................................................................99999999

11.5 Ex11.5 Ex11.5 Ex11.5 Ex----post Evaluationpost Evaluationpost Evaluationpost Evaluation....................................................................................................................................................................................................................................................................................................................................................................................99999999

11.6 Recommendations11.6 Recommendations11.6 Recommendations11.6 Recommendations ............................................................................................................................................................................................................................................................................................................................................................................100100100100

12 FINANCIAL MANAGEMENT AND PAYMENTS ........................................ 101

12.1 Rate of Exchange12.1 Rate of Exchange12.1 Rate of Exchange12.1 Rate of Exchange ....................................................................................................................................................................................................................................................................................................................................................................................101101101101

12.2 Co12.2 Co12.2 Co12.2 Co----financingfinancingfinancingfinancing ............................................................................................................................................................................................................................................................................................................................................................................................................101101101101

12.2.1 Savings12.2.1 Savings12.2.1 Savings12.2.1 Savings to the Project to the Project to the Project to the Project................................................................................................................................................................................................................................................................................................................................................102102102102

12.3 Pre12.3 Pre12.3 Pre12.3 Pre----financingfinancingfinancingfinancing............................................................................................................................................................................................................................................................................................................................................................................................................102102102102

12.3.1 Budgetary Allocation12.3.1 Budgetary Allocation12.3.1 Budgetary Allocation12.3.1 Budgetary Allocation ....................................................................................................................................................................................................................................................................................................................................................102102102102

12.4 Eligibility of Costs12.4 Eligibility of Costs12.4 Eligibility of Costs12.4 Eligibility of Costs ................................................................................................................................................................................................................................................................................................................................................................................104104104104

12.5 Invoice Payment Process12.5 Invoice Payment Process12.5 Invoice Payment Process12.5 Invoice Payment Process ........................................................................................................................................................................................................................................................................................................................................104104104104

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12.6 Payment Process12.6 Payment Process12.6 Payment Process12.6 Payment Process ........................................................................................................................................................................................................................................................................................................................................................................................115115115115

12.6.1 Payment Process 12.6.1 Payment Process 12.6.1 Payment Process 12.6.1 Payment Process –––– Salaries Salaries Salaries Salaries ................................................................................................................................................................................................................................................................................................................116116116116

12.7 12.7 12.7 12.7 Invoice Status Certificate (SAMPLE)Invoice Status Certificate (SAMPLE)Invoice Status Certificate (SAMPLE)Invoice Status Certificate (SAMPLE)............................................................................................................................................................................................................................................................................117117117117

12.8 Trea12.8 Trea12.8 Trea12.8 Treatment of VATtment of VATtment of VATtment of VAT ................................................................................................................................................................................................................................................................................................................................................................................120120120120

13 DRAWDOWN OF FUNDS FROM THE EUROPEAN COMMISSION............ 122

13.1 Letter of Offer13.1 Letter of Offer13.1 Letter of Offer13.1 Letter of Offer........................................................................................................................................................................................................................................................................................................................................................................................................122122122122

13.2 Statement of Expenditure and Declarations3.2 Statement of Expenditure and Declarations3.2 Statement of Expenditure and Declarations3.2 Statement of Expenditure and Declarations............................................................................................................................................................................................................................122122122122

13.2.1 Statement of Expenditure by project and Declaration:13.2.1 Statement of Expenditure by project and Declaration:13.2.1 Statement of Expenditure by project and Declaration:13.2.1 Statement of Expenditure by project and Declaration: ................................................................................................................................................122122122122

13.2.2 Statement of Expenditure by measure and Declaration13.2.2 Statement of Expenditure by measure and Declaration13.2.2 Statement of Expenditure by measure and Declaration13.2.2 Statement of Expenditure by measure and Declaration ............................................................................................................................................127127127127

13.3 Verification Process3.3 Verification Process3.3 Verification Process3.3 Verification Process........................................................................................................................................................................................................................................................................................................................................................................132132132132

13.4 Certificati13.4 Certificati13.4 Certificati13.4 Certificationononon....................................................................................................................................................................................................................................................................................................................................................................................................................133133133133

13.4.1 13.4.1 13.4.1 13.4.1 –––– Validation Validation Validation Validation ........................................................................................................................................................................................................................................................................................................................................................................................................133133133133

13.4.2 13.4.2 13.4.2 13.4.2 ---- Certification Certification Certification Certification ............................................................................................................................................................................................................................................................................................................................................................................................134134134134

13.5 P13.5 P13.5 P13.5 Payment from the European Commissionayment from the European Commissionayment from the European Commissionayment from the European Commission ........................................................................................................................................................................................................................................138138138138

13.6 Transfer to Central Government Revenue13.6 Transfer to Central Government Revenue13.6 Transfer to Central Government Revenue13.6 Transfer to Central Government Revenue ........................................................................................................................................................................................................................................139139139139

13.7 Forecasts13.7 Forecasts13.7 Forecasts13.7 Forecasts ....................................................................................................................................................................................................................................................................................................................................................................................................................................140140140140

14 AUDIT & CONTROL .................................................................................. 141

14.1 Introduction14.1 Introduction14.1 Introduction14.1 Introduction....................................................................................................................................................................................................................................................................................................................................................................................................................141141141141

14.2 Financial Control Mechanisms14.2 Financial Control Mechanisms14.2 Financial Control Mechanisms14.2 Financial Control Mechanisms ........................................................................................................................................................................................................................................................................................................141141141141

14.3 First Level of Control & On the spot checks14.3 First Level of Control & On the spot checks14.3 First Level of Control & On the spot checks14.3 First Level of Control & On the spot checks ............................................................................................................................................................................................................................142142142142

14.3.2 On14.3.2 On14.3.2 On14.3.2 On----thethethethe----Spot Checks on IBsSpot Checks on IBsSpot Checks on IBsSpot Checks on IBs ............................................................................................................................................................................................................................................................................................................146146146146

14.3.3 Follow14.3.3 Follow14.3.3 Follow14.3.3 Follow----up Action to Onup Action to Onup Action to Onup Action to On----TheTheTheThe----Spot ChecksSpot ChecksSpot ChecksSpot Checks ....................................................................................................................................................................................................................147147147147

14.3.14.3.14.3.14.3.4444 Template for documentary on the spot checks Template for documentary on the spot checks Template for documentary on the spot checks Template for documentary on the spot checks ............................................................................................................................................................................................149149149149

14.3.14.3.14.3.14.3.5555 Documentary on Documentary on Documentary on Documentary on----thethethethe----spot checks followspot checks followspot checks followspot checks follow----up reportup reportup reportup report ............................................................................................................................................................167167167167

14.3.14.3.14.3.14.3.6666 Template for documentary on the spot checks on Template for documentary on the spot checks on Template for documentary on the spot checks on Template for documentary on the spot checks on FRsFRsFRsFRs ................................................................................................................................................170170170170

14.3.14.3.14.3.14.3.7777 Template for documentary on the spot checks on IBs Template for documentary on the spot checks on IBs Template for documentary on the spot checks on IBs Template for documentary on the spot checks on IBs ....................................................................................................................................................173173173173

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14.4 Second Level of Control14.4 Second Level of Control14.4 Second Level of Control14.4 Second Level of Control................................................................................................................................................................................................................................................................................................................................................176176176176

14.5 EU Audits and Assessment of Risk14.5 EU Audits and Assessment of Risk14.5 EU Audits and Assessment of Risk14.5 EU Audits and Assessment of Risk ................................................................................................................................................................................................................................................................................178178178178

14.5.2 Follow14.5.2 Follow14.5.2 Follow14.5.2 Follow----up to Auditsup to Auditsup to Auditsup to Audits ........................................................................................................................................................................................................................................................................................................................................................180180180180

14. 6 Winding Up14. 6 Winding Up14. 6 Winding Up14. 6 Winding Up ....................................................................................................................................................................................................................................................................................................................................................................................................................181181181181

14.7 Ex14.7 Ex14.7 Ex14.7 Ex----PPPPost Management Controlost Management Controlost Management Controlost Management Control ............................................................................................................................................................................................................................................................................................................181181181181

15.1 Irregularities & Financial Corrections15.1 Irregularities & Financial Corrections15.1 Irregularities & Financial Corrections15.1 Irregularities & Financial Corrections ................................................................................................................................................................................................................................................................183183183183

15.2 How to report an Irregularity15.2 How to report an Irregularity15.2 How to report an Irregularity15.2 How to report an Irregularity ................................................................................................................................................................................................................................................................................................................183183183183

15.3 Content of Structural Funds Irregularity Report15.3 Content of Structural Funds Irregularity Report15.3 Content of Structural Funds Irregularity Report15.3 Content of Structural Funds Irregularity Report ....................................................................................................................................................................................................185185185185

15.4 Reporting to the Commission15.4 Reporting to the Commission15.4 Reporting to the Commission15.4 Reporting to the Commission ............................................................................................................................................................................................................................................................................................................186186186186

15.5 Types of Irregularity15.5 Types of Irregularity15.5 Types of Irregularity15.5 Types of Irregularity....................................................................................................................................................................................................................................................................................................................................................................187187187187

15. 6 Methods of Detecting Irregularities15. 6 Methods of Detecting Irregularities15. 6 Methods of Detecting Irregularities15. 6 Methods of Detecting Irregularities........................................................................................................................................................................................................................................................................188188188188

15.7 Template of Irregularity Repor15.7 Template of Irregularity Repor15.7 Template of Irregularity Repor15.7 Template of Irregularity Report (A)t (A)t (A)t (A) ............................................................................................................................................................................................................................................................................190190190190

15.8 Template of Irregularity Report (B)15.8 Template of Irregularity Report (B)15.8 Template of Irregularity Report (B)15.8 Template of Irregularity Report (B) ................................................................................................................................................................................................................................................................................197197197197

15.9 Template of the Declaration on Irregularities (NIL RETURN) at Projec15.9 Template of the Declaration on Irregularities (NIL RETURN) at Projec15.9 Template of the Declaration on Irregularities (NIL RETURN) at Projec15.9 Template of the Declaration on Irregularities (NIL RETURN) at Project Levelt Levelt Levelt Level ................................203203203203

15.10 Template of the Quarterly Report on Irregularities (NIL RETURN) at Measure Level15.10 Template of the Quarterly Report on Irregularities (NIL RETURN) at Measure Level15.10 Template of the Quarterly Report on Irregularities (NIL RETURN) at Measure Level15.10 Template of the Quarterly Report on Irregularities (NIL RETURN) at Measure Level

............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................204204204204

15.11 Financial Recover15.11 Financial Recover15.11 Financial Recover15.11 Financial Recoveriesiesiesies ............................................................................................................................................................................................................................................................................................................................................................205205205205

15.12 Financial Corrections15.12 Financial Corrections15.12 Financial Corrections15.12 Financial Corrections........................................................................................................................................................................................................................................................................................................................................................206206206206

16 RETENTION OF DOCUMENTS................................................................... 207

16.1 General Remark16.1 General Remark16.1 General Remark16.1 General Remark ............................................................................................................................................................................................................................................................................................................................................................................................207207207207

16.2 What records are needed?16.2 What records are needed?16.2 What records are needed?16.2 What records are needed? ................................................................................................................................................................................................................................................................................................................................207207207207

16.3 Delegation of Authority16.3 Delegation of Authority16.3 Delegation of Authority16.3 Delegation of Authority ................................................................................................................................................................................................................................................................................................................................................209209209209

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16.4 Who may carry out checks?16.4 Who may carry out checks?16.4 Who may carry out checks?16.4 Who may carry out checks?............................................................................................................................................................................................................................................................................................................................209209209209

16.5 Procurement Documentation16.5 Procurement Documentation16.5 Procurement Documentation16.5 Procurement Documentation ................................................................................................................................................................................................................................................................................................................209209209209

16.6 Filing System by the16.6 Filing System by the16.6 Filing System by the16.6 Filing System by the FB for project FB for project FB for project FB for project----related Documentsrelated Documentsrelated Documentsrelated Documents........................................................................................................................................................225225225225

17 INFORMATION AND PUBLICITY .............................................................. 227

17.1 General Principle17.1 General Principle17.1 General Principle17.1 General Principle........................................................................................................................................................................................................................................................................................................................................................................................227227227227

17.2 Aims17.2 Aims17.2 Aims17.2 Aims ............................................................................................................................................................................................................................................................................................................................................................................................................................................................227227227227

17.3 Responsibilities & Funding17.3 Responsibilities & Funding17.3 Responsibilities & Funding17.3 Responsibilities & Funding ............................................................................................................................................................................................................................................................................................................................228228228228

17.417.417.417.4 Implementation of publicity measuresImplementation of publicity measuresImplementation of publicity measuresImplementation of publicity measures ........................................................................................................................................................................................................................................................228228228228

17.4.1 Communication Plan17.4.1 Communication Plan17.4.1 Communication Plan17.4.1 Communication Plan ....................................................................................................................................................................................................................................................................................................................................................228228228228

17.4.2 Tasks17.4.2 Tasks17.4.2 Tasks17.4.2 Tasks ............................................................................................................................................................................................................................................................................................................................................................................................................................................236236236236

17.5. Language17.5. Language17.5. Language17.5. Language................................................................................................................................................................................................................................................................................................................................................................................................................................237237237237

17.6 Logos, Billboards and Commemorative Plaques17.6 Logos, Billboards and Commemorative Plaques17.6 Logos, Billboards and Commemorative Plaques17.6 Logos, Billboards and Commemorative Plaques....................................................................................................................................................................................................238238238238

17.6.1 Billboards17.6.1 Billboards17.6.1 Billboards17.6.1 Billboards ....................................................................................................................................................................................................................................................................................................................................................................................................................241241241241

17.6.2 Posters17.6.2 Posters17.6.2 Posters17.6.2 Posters ....................................................................................................................................................................................................................................................................................................................................................................................................................................242242242242

17.6.3 Publicity of Schemes17.6.3 Publicity of Schemes17.6.3 Publicity of Schemes17.6.3 Publicity of Schemes ....................................................................................................................................................................................................................................................................................................................................................242242242242

18. COMMUNICATION ................................................................................ 249

19. DELEGATION OF AUTHORITY ................................................................ 251

19.1 Delegation of Authority Form19.1 Delegation of Authority Form19.1 Delegation of Authority Form19.1 Delegation of Authority Form ............................................................................................................................................................................................................................................................................................................252252252252

19.2 Termination and Change of Pro19.2 Termination and Change of Pro19.2 Termination and Change of Pro19.2 Termination and Change of Project Leadershipject Leadershipject Leadershipject Leadership ....................................................................................................................................................................................................253253253253

ANNEX1 - CHECKLISTS ................................................................................ 254

Annex 1.1 Checklist of the SPDAnnex 1.1 Checklist of the SPDAnnex 1.1 Checklist of the SPDAnnex 1.1 Checklist of the SPD ................................................................................................................................................................................................................................................................................................................................254254254254

Annex 1.2 Annex 1.2 Annex 1.2 Annex 1.2 Checklist of the PCChecklist of the PCChecklist of the PCChecklist of the PC ................................................................................................................................................................................................................................................................................................................255255255255

10

Annex 1.3Annex 1.3Annex 1.3Annex 1.3 Checklist Checklist Checklist Checklist Aid Schemes to the Private SectorAid Schemes to the Private SectorAid Schemes to the Private SectorAid Schemes to the Private Sector................................................................................................................................................................252525256666

Annex 1.4Annex 1.4Annex 1.4Annex 1.4 Checklist Checklist Checklist Checklist for Bifor Bifor Bifor Bi----annual Reportsannual Reportsannual Reportsannual Reports....................................................................................................................................................................................................................................257257257257

Annex 1.5Annex 1.5Annex 1.5Annex 1.5 Checklist Checklist Checklist Checklist for SMSC reportsfor SMSC reportsfor SMSC reportsfor SMSC reports....................................................................................................................................................................................................................................................................258258258258

Annex 1.6Annex 1.6Annex 1.6Annex 1.6 Checklist Checklist Checklist Checklist for Annual Reportsfor Annual Reportsfor Annual Reportsfor Annual Reports........................................................................................................................................................................................................................................................259259259259

Annex 1.7Annex 1.7Annex 1.7Annex 1.7 Checklist Checklist Checklist Checklist for Final Reportfor Final Reportfor Final Reportfor Final Report............................................................................................................................................................................................................................................................................261261261261

Annex 1.8Annex 1.8Annex 1.8Annex 1.8 Checklist Checklist Checklist Checklist for certification by PA for certification by PA for certification by PA for certification by PA –––– Stage 1 Stage 1 Stage 1 Stage 1 ............................................................................................................................................................................262262262262

Annex 1.9Annex 1.9Annex 1.9Annex 1.9 Checklist Checklist Checklist Checklist for certification by PA for certification by PA for certification by PA for certification by PA –––– Stage 2 Stage 2 Stage 2 Stage 2 ............................................................................................................................................................................264264264264

Annex 1.10Annex 1.10Annex 1.10Annex 1.10 Checklist Checklist Checklist Checklist for Irregularitiesfor Irregularitiesfor Irregularitiesfor Irregularities........................................................................................................................................................................................................................................................................266266266266

ANNEX 2 – TREASURY FORMS...................................................................... 267

Annex 2.1 TR/S-1............................................................................................................................................................................................................................................................................................................................................................................................................267267267267

Annex 2.2 TR/S-2................................................................................................................................................................................................................................................................................................................................................................................................................269269269269

Annex 2.3 TR/S-9................................................................................................................................................................................................................................................................................................................................................................................................................272272272272

3 ANNEXES OF COVENANTS AND TORS................................................. 274

Annex 3.1 Covenant between the Managing Authority and the Paying AuthorAnnex 3.1 Covenant between the Managing Authority and the Paying AuthorAnnex 3.1 Covenant between the Managing Authority and the Paying AuthorAnnex 3.1 Covenant between the Managing Authority and the Paying Authorityityityity ................................274274274274

Annex 3.1.1 Verification Process Annex 3.1.1 Verification Process Annex 3.1.1 Verification Process Annex 3.1.1 Verification Process –––– Structural Funds (Article 4 of Regulation 438/2001) Structural Funds (Article 4 of Regulation 438/2001) Structural Funds (Article 4 of Regulation 438/2001) Structural Funds (Article 4 of Regulation 438/2001)

for Annex 3.1for Annex 3.1for Annex 3.1for Annex 3.1 ........................................................................................................................................................................................................................................................................................................................................................................................................................................282282282282

Annex 3.2 Annex 3.2 Annex 3.2 Annex 3.2 CovenCovenCovenCovenant between the Managing Authority and the Ministry for the Family ant between the Managing Authority and the Ministry for the Family ant between the Managing Authority and the Ministry for the Family ant between the Managing Authority and the Ministry for the Family

and Social Solidarity as the Intermediate Body for the European Social Fund (ESF) and and Social Solidarity as the Intermediate Body for the European Social Fund (ESF) and and Social Solidarity as the Intermediate Body for the European Social Fund (ESF) and and Social Solidarity as the Intermediate Body for the European Social Fund (ESF) and

National Support Structure for EQUAL.National Support Structure for EQUAL.National Support Structure for EQUAL.National Support Structure for EQUAL.........................................................................................................................................................................................................................................................................................289289289289

Annex 3.2.1 Verification Process (Article 4 of Regulation 438/2001) for Annex 3.2Annex 3.2.1 Verification Process (Article 4 of Regulation 438/2001) for Annex 3.2Annex 3.2.1 Verification Process (Article 4 of Regulation 438/2001) for Annex 3.2Annex 3.2.1 Verification Process (Article 4 of Regulation 438/2001) for Annex 3.2................300300300300

Annex 3.3Annex 3.3Annex 3.3Annex 3.3---- Covenant between the Managing Authority and the Ministry for Rural Affairs Covenant between the Managing Authority and the Ministry for Rural Affairs Covenant between the Managing Authority and the Ministry for Rural Affairs Covenant between the Managing Authority and the Ministry for Rural Affairs

and the Environmeand the Environmeand the Environmeand the Environment as the Intermediate Body for the EAGGF (Guidance) and FIFGnt as the Intermediate Body for the EAGGF (Guidance) and FIFGnt as the Intermediate Body for the EAGGF (Guidance) and FIFGnt as the Intermediate Body for the EAGGF (Guidance) and FIFG....................305305305305

Annex 3.3.1Annex 3.3.1Annex 3.3.1Annex 3.3.1---- Verification Process (Article 4 of Regulation 483/2001) for Annex 3.3 Verification Process (Article 4 of Regulation 483/2001) for Annex 3.3 Verification Process (Article 4 of Regulation 483/2001) for Annex 3.3 Verification Process (Article 4 of Regulation 483/2001) for Annex 3.3 ........314314314314

11

Annex 3.4 Monitoring Committee For The Structural Funds Annex 3.4 Monitoring Committee For The Structural Funds Annex 3.4 Monitoring Committee For The Structural Funds Annex 3.4 Monitoring Committee For The Structural Funds –––– Single Programming Single Programming Single Programming Single Programming

Document 2004 Document 2004 Document 2004 Document 2004 –––– 2006 2006 2006 2006 ----Terms of ReferenceTerms of ReferenceTerms of ReferenceTerms of Reference ............................................................................................................................................................................................................................................319319319319

Annex 3.5 Annex 3.5 Annex 3.5 Annex 3.5 ---- Covenant between the Managing Aut Covenant between the Managing Aut Covenant between the Managing Aut Covenant between the Managing Authority, the Intermediate Body for the hority, the Intermediate Body for the hority, the Intermediate Body for the hority, the Intermediate Body for the

European Social Fund (ESF) and the Regional Project Committee for GozoEuropean Social Fund (ESF) and the Regional Project Committee for GozoEuropean Social Fund (ESF) and the Regional Project Committee for GozoEuropean Social Fund (ESF) and the Regional Project Committee for Gozo ........................................................................323323323323

Annex 3.5.1 Regional Project Committee (Gozo) Annex 3.5.1 Regional Project Committee (Gozo) Annex 3.5.1 Regional Project Committee (Gozo) Annex 3.5.1 Regional Project Committee (Gozo) ---- Terms of Reference Terms of Reference Terms of Reference Terms of Reference ........................................................................................327327327327

Annex 3.6 Project Selection Committee Annex 3.6 Project Selection Committee Annex 3.6 Project Selection Committee Annex 3.6 Project Selection Committee –––– EU Structural Funds Programming Document EU Structural Funds Programming Document EU Structural Funds Programming Document EU Structural Funds Programming Document

2004200420042004----2006 2006 2006 2006 –––– Terms of Reference Terms of Reference Terms of Reference Terms of Reference ....................................................................................................................................................................................................................................................................................................................332332332332

ANNEX 4....................................................................................................... 335

4.1 Letters of Acknowledgement4.1 Letters of Acknowledgement4.1 Letters of Acknowledgement4.1 Letters of Acknowledgement ........................................................................................................................................................................................................................................................................................................................335335335335

4.1.1 Letter of Acknowledgement from MA4.1.1 Letter of Acknowledgement from MA4.1.1 Letter of Acknowledgement from MA4.1.1 Letter of Acknowledgement from MA............................................................................................................................................................................................................................................................335335335335

4.1.2 Letter of Acknowledgement from ESF IB4.1.2 Letter of Acknowledgement from ESF IB4.1.2 Letter of Acknowledgement from ESF IB4.1.2 Letter of Acknowledgement from ESF IB ............................................................................................................................................................................................................................................338338338338

4.1.3 Letter of Acknowledgement from RPC4.1.3 Letter of Acknowledgement from RPC4.1.3 Letter of Acknowledgement from RPC4.1.3 Letter of Acknowledgement from RPC........................................................................................................................................................................................................................................................340340340340

4.2 Assessment Sheets4.2 Assessment Sheets4.2 Assessment Sheets4.2 Assessment Sheets ................................................................................................................................................................................................................................................................................................................................................................................344344344344

4.2.1 Project Selection Committee Evaluation Sheet4.2.1 Project Selection Committee Evaluation Sheet4.2.1 Project Selection Committee Evaluation Sheet4.2.1 Project Selection Committee Evaluation Sheet ........................................................................................................................................................................................................344344344344

4.2.2 ESF IB Adjustment Note4.2.2 ESF IB Adjustment Note4.2.2 ESF IB Adjustment Note4.2.2 ESF IB Adjustment Note ............................................................................................................................................................................................................................................................................................................................................346346346346

4.2.3 Assessment Sheet of the Regional Project Committee (Gozo)4.2.3 Assessment Sheet of the Regional Project Committee (Gozo)4.2.3 Assessment Sheet of the Regional Project Committee (Gozo)4.2.3 Assessment Sheet of the Regional Project Committee (Gozo) ................................................................................................................347347347347

4.3 Project Ranking Form of the PSC4.3 Project Ranking Form of the PSC4.3 Project Ranking Form of the PSC4.3 Project Ranking Form of the PSC....................................................................................................................................................................................................................................................................................................348348348348

4.4 Sample Letter of Offer4.4 Sample Letter of Offer4.4 Sample Letter of Offer4.4 Sample Letter of Offer ................................................................................................................................................................................................................................................................................................................................................................349349349349

ANNEX 5....................................................................................................... 359

5.1 Application Form for ERDF TA5.1 Application Form for ERDF TA5.1 Application Form for ERDF TA5.1 Application Form for ERDF TA ................................................................................................................................................................................................................................................................................................................359359359359

5.2 Application Form for ESF TA (excluding Capacity Building)5.2 Application Form for ESF TA (excluding Capacity Building)5.2 Application Form for ESF TA (excluding Capacity Building)5.2 Application Form for ESF TA (excluding Capacity Building) ........................................................................................................................................360360360360

5.3 Capacity Building Request Form for Overseas Training 5.3 Capacity Building Request Form for Overseas Training 5.3 Capacity Building Request Form for Overseas Training 5.3 Capacity Building Request Form for Overseas Training –––– CBSF001 CBSF001 CBSF001 CBSF001................................................................................................361361361361

5.4 Capacity Building Request Form for Local Training 5.4 Capacity Building Request Form for Local Training 5.4 Capacity Building Request Form for Local Training 5.4 Capacity Building Request Form for Local Training ---- CBSF002 CBSF002 CBSF002 CBSF002 ....................................................................................................................363363363363

5.5 Statement of Expenditure for TA Capacity Building5.5 Statement of Expenditure for TA Capacity Building5.5 Statement of Expenditure for TA Capacity Building5.5 Statement of Expenditure for TA Capacity Building........................................................................................................................................................................................365365365365

ANNEX 6....................................................................................................... 366

6.1 Action to be taken by SMSC6.1 Action to be taken by SMSC6.1 Action to be taken by SMSC6.1 Action to be taken by SMSC................................................................................................................................................................................................................................................................................................................................366366366366

6.2 Action taken by SMSC6.2 Action taken by SMSC6.2 Action taken by SMSC6.2 Action taken by SMSC ................................................................................................................................................................................................................................................................................................................................................................367367367367

6.36.36.36.3 SMSC Impact Report GuidelinesSMSC Impact Report GuidelinesSMSC Impact Report GuidelinesSMSC Impact Report Guidelines....................................................................................................................................................................................................................................................................................368368368368

FOOTNOTES .................................................................................................. 371

12

List of Acronyms

AG Accountant General

CAU Compliance and Assurance Unit

CBM Central Bank of Malta

DAS Departmental Accounting System

DCS Director,(Corporate Services)

DoC Department of Contracts

EAGGF European Agriculture Guidance and Guarantee Fund (Guidance Section)

ERDF European Regional Development Fund

ESF European Social Fund

EU European Union

FB Financial Beneficiary

FIFG Financial Instrument for Fisheries Guidance

GCC General Contracts Committee

General

Regulation Refers to Council Regulation 1260/1999

IAID Internal Audit and Investigations Directorate

IB Intermediate Body

ISC Invoice Status Certificate

L.N. Legal Notice

MA Managing Authority

MC Monitoring Committee for Structural Funds

MEPA Malta Environment and Planning Authority

MFIN Ministry of Finance

MGOZ Ministry for Gozo

MoP Manual of Procedures

MRAE Ministry for Rural Affairs and Environment

MFSS Ministry for the Family & Social Solidarity

NAO National Audit Office

NCU National Currency Unit

NGO Non-Governmental Organisation

OLAF European Anti-Fraud Office

13

PA Paying Authority

PC Programme Complement

PPCD Planning and Priorities Co-ordination Division

PSC Project Selection Committee

RPC Regional Project Committee (Gozo)

SAMB State Aid Monitoring Board

SCC Special Contracts Committee

SFD Structural Funds Database

SFIR Structural Funds Irregularity Report

SMSC Sectoral Monitoring Sub-Committee

SOE Statement of Expenditure

SPD Single Programming Document

TA Technical Assistance

TORs Terms of Reference

14

1. Introduction

1. This manual of procedures (MoP) has been designed as a guide to all key players

involved in the management and implementation of Malta’s Single Programming

Document (SPD) 2004-2006.

2. In Malta the co-ordination of the four EU Structural Funds - European Regional

Development Fund (ERDF), European Social Fund (ESF), European Agricultural

Guidance and Guarantee Fund (EAGGF) (Guidance Measure only), Financial

Instrument for Fisheries Guidance (FIFG), falls under the direct responsibility of

the Planning and Priorities Co-ordination Division (PPCD) within the Office of the

Prime Minister, which is the designated Managing Authority (MA).

3. Malta has drawn up the Single Programming Document (SPD) for the period

2004-2006 (which can be downloaded from www.ppcd.gov.mt), a document

which identifies a strategic plan for which the EU Structural Funds will be used.

The SPD comprises a series of priorities and measures agreed upon between

Malta and the European Commission. The SPD is accompanied by a Programme

Complement (PC) which gives more detail of how the priorities and measures will

be implemented (also downloaded from www.ppcd.gov.mt ).

4. This MoP aims to provide practical help and guidance in setting up an effective

framework for the four Structural Funds which are:

• the European Regional Development Fund (ERDF) - the objective of this

fund is to promote economic and social cohesion within the European Union

through the reduction of imbalances between regions or social groups;

(http://europa.eu.int/comm/regional_policy/funds/prord/prord_en.htm)

• the European Social Fund (ESF) – this fund is the main financial instrument

allowing the European Union to realise the strategic objectives of its

employment & social policy;

(http://europa.eu.int/comm/regional_policy/funds/prord/prords/prdsb_en.ht

m)

• the European Agricultural Guidance and Guarantee Fund (EAGGF). The

Programme Complement 2004-2006 covers the Guidance Section of this

15

fund, which contributes to the structural reform of the agriculture sector and

to the development of rural areas;

(http://europa.eu.int/comm/regional_policy/funds/prord/prords/prdsc_en.ht

m)

• the Financial Instrument for Fisheries Guidance (FIFG), the specific Fund for

the structural reform of the fisheries sector.

5. It is important to note that the above Structural Funds will never cover the total

cost of a project. There will always be an element of national co-financing from

either the public or the private sector or both. This MoP applies for all projects

being co-financed under the SPD, regardless of any other sources and the co-

financing rate of financing from the Funds.

6. Note: In case of changes to the MoP, all project leaders will be informed. A

version indicating changes will be placed on the website for two weeks before

being replaced by a consolidated version..

16

2. Roles and Responsibilities

2.1 Managing Authority (MA)2.1 Managing Authority (MA)2.1 Managing Authority (MA)2.1 Managing Authority (MA)

1. The Planning and Priorities Co-ordination Division (PPCD) within the Office of the

Prime Minister has been designated as the Managing Authority (MA) in terms of

Article 9(n) of Regulation (EC) 1260/99 by Cabinet decision 405/2000 of 20

September 2000.

2. The MA shall carry out the following tasks:

• act as the counterpart of the European Commission for issues concerning

the Structural Funds;

• lead the negotiations on the Single Programming Document (SPD) and

the Programme Complement (PC) before and after accession;

• prepare the SPD and the PC;

• preside over the project selection process (the selection criteria will be

prepared by the MA and submitted to the Monitoring Committee (MC) for

approval in line with Article 35-3(b) of the General Regulation ;

• propose adjustment of the PC in accordance with Article 34(b) of General

Regulation for approval by the MC;

• draw up and submit for approval to the MC the annual implementation

report; submit the approved annual implementation report to the

European Commission;

• ensure follow-up by the relevant bodies to the Commission’s

comments/recommendations concerning the annual report;

• ensure follow-up by the relevant bodies in line with information received

from auditors;

• assist the Commission in organising the ex-post evaluation referred to in

Article 43 of the the General Regulation;

• inform IBs on the relevant Regulations concerning the Structural Funds;

• act as Government’s central contact/information point for issues

concerning the Structural Funds;

• establish a central information system to gather financial and statistical

information on the status of implementation of the programmes and

17

projects and ensure that the relevant data is forwarded to the

Commission in line with the requirements of relevant Regulations;

• inform the respective IBs and the project leaders about the outcome of

the project selection process;

• ensure the correctness of operations financed by the Structural Funds by

keeping with the principles of sound financial management and acting in

response to any observations or requests for corrective measures in line

with Article 34(1)(f) of the General Regulation ;

• co-ordinate with the Paying Authority (PA) and the Internal Audit and

Investigations Directorate (IAID) on issues pertaining to financial

management and control systems;

• co-operate with the PA on preparation of annual payment forecasts;

• receive any irregularity reports from all stakeholders.

The MA may be contacted on:

Tel: 22001142

Email: [email protected]

2.2 Paying Authority (PA)2.2 Paying Authority (PA)2.2 Paying Authority (PA)2.2 Paying Authority (PA)

3. The EU Paying Authority Directorate within the Ministry of Finance (MFIN) will act

as the Paying Authority (PA) for all the Structural Funds in accordance with

Article 9.o of the General Regulation.

4. The PA shall be responsible:

• for the Certification Process:

- ensuring that the Statements of Expenditures by projects and by

Measure are correct and the relevant declarations are attached;

- Prepare the Statement of Expenditure by Fund

• prepare the certificate of Annex II of Regulation 438/2001;

• prepare the application for payments;

• forward the above documentation to the European Commission;

18

• receive and account for funds transferred by the European Commission

including:

- payments on account;

- interim and final payments;

• transfer funds to the Public Account

• account for any discrepancies between certified claims and fund transfers and

inform MA accordingly;

• provide financial data of all claims and receipts to the Pertinent Authorities,

including the MA.

5. Please refer to Annex 3.1 for covenant between the MA and PA.

Contact person at the EU Paying Authority is:

Mr. Edwin Camilleri

EU Programme Manager

EU Paying Authority (MFIN)

Tel: 25998339

Email: [email protected]

2.3 Intermediate Body (IB)2.3 Intermediate Body (IB)2.3 Intermediate Body (IB)2.3 Intermediate Body (IB)

6. There are two Intermediate Bodies (IB):

a. The Ministry for the Family and Social Solidarity is the Intermediate Body

for ESF;

b. The Ministry for Rural Affairs and the Environment is the Intermediate

Body for EAGGF (Guidance) and FIFG.

There is no IB for ERDF. For ERDF, the day-to-day contact shall be with the

MA.

7. The main functions delegated to the IBs are outlined in the Covenants between

the MA and MFSS and the MA and MRAE (Annex 3.2 and Annex 3.3 respectively

which will be issued in the near future) regulating the relationship between the

Managing Authority and the IBs. The IB will act as the primary focal point for

19

information pertaining to the specific fund and projects that are co-financed

under the specific fund.

8. Amongst others, the IB shall carry out the following functions as outlined in the

relevant covenant:

a. Projects are implemented in accordance with Regulation 1260/99;

b. information and publicity as delegated and agreed upon by the MA;

c. receipt of project applications;

d. the relevant stage of the verification process (statement of expenditure by

measure) (Please refer to Chapter 13 of this MoP);

e. day-to-day monitoring of implementation;

f. detection and follow-up of irregularities;

g. make proposals to the MA regarding the adjustment of the PC;

Contact Person at the ESF IB is:

Mr. Mark Musu’

Director EU Affairs

EU Unit

Ministry for Family and Social Solidarity

Tel: 25903384

Email: [email protected]

20

Contact Person at the MRAE IB is:

Mr. Joe De giorgio

EU Affairs Director

Ministry for Rural Affairs & Environment

Tel: 21 225141

Email: [email protected]

2.4 Department of Contracts (DoC)2.4 Department of Contracts (DoC)2.4 Department of Contracts (DoC)2.4 Department of Contracts (DoC)

9. The Department of Contracts (DoC) within the Ministry of Finance is responsible

for the administration of the procurement procedures as laid down in the Public

Contracts Regulations (L.N. 299 of 2003 and as amended by any other

subsequent legislation. As of June 2005 LN 177 & LN 178 of 2005 have entered

into force). The DoC must ensure that the relevant tenders are launched and

published in accordance with the above mentioned regulations and that contracts

are awarded in conformity with the principles of free access, fair competition and

transparency.

10. The DoC provides advice and guidance to FBs regarding on all issues pertaining

to public contracts.

Contact person at the DoC is:

Mr. Anthony Cachia

Department of Contracts

Notre Dame Ravelin

Floriana

Tel Nos: 21220212 or 21 247686

Fax: 21 247681

Email: [email protected]

21

2.5 General Contracts Committee (GCC)2.5 General Contracts Committee (GCC)2.5 General Contracts Committee (GCC)2.5 General Contracts Committee (GCC)

11. The role of the General Contracts Committee (GCC) is to:

• assist the Director General of Contracts in the execution of duties;

• advise on all matters relating to public contracts and procurement;

• open tenders and evaluate definite recommendations made by the FBs for the

award of tenders.

2.6 Special Contracts Committee (SCC)2.6 Special Contracts Committee (SCC)2.6 Special Contracts Committee (SCC)2.6 Special Contracts Committee (SCC)

12. The Special Contracts Committee (SCC) is appointed whenever the Prime

Minister determines that the adjudication of a tender requires special expertise

and skills. The SCC will remain in operation throughout the adjudication process

until the tender is awarded or else the Director General of Contracts declares

that the adjudication of the public contract is withdrawn.

2.7 Public Contracts Appeal Board (PCAB)2.7 Public Contracts Appeal Board (PCAB)2.7 Public Contracts Appeal Board (PCAB)2.7 Public Contracts Appeal Board (PCAB)

13. The Public Contracts Appeal Board (PCAB) is an independent and autonomous

board (composed of the Chairman and two members) appointed by the Prime

Minister for a period of three years and may be re-appointed. The PCAB is

responsible for deciding complaints lodged by aggrieved bidders on all tenders

issued by the DoC, public authorities and/or public undertakings.

2.8 Accountant General (AG)/Treasury2.8 Accountant General (AG)/Treasury2.8 Accountant General (AG)/Treasury2.8 Accountant General (AG)/Treasury

14. The AG is also referred to as the Director (Treasury) and heads the Treasury

Department under the Ministry of Finance. In the context of Structural Funds

the Treasury is responsible for:

• checking that sound accounting policies and procedures are applied at all levels;

• effecting payments through the Central Bank of Malta to 3rd parties in respect of

approved projects;

22

• managing the Public Bank Account and accounting for the Consolidated Fund and

the EU Funds that are transferred by the Director EU Paying Authority.

Contact person at the Treasury is:

Mr. Albert Zahra

EU Financing Unit

Treasury

Tel: 25967131

Email: [email protected]

2.9 Central Bank of Malta (CBM)2.9 Central Bank of Malta (CBM)2.9 Central Bank of Malta (CBM)2.9 Central Bank of Malta (CBM)

15. The Central Bank of Malta (CBM) is the official banker of the Government of

Malta. The CBM will:

• maintain and operate accounts regarding funds advanced by the EU to

finance programmes/projects as instructed by the Director EU Paying

Authority;

• in the case of payments for projects co-financed through EU funds, the CBM

will transfer funds into the contractor’s bank account once it receives

instructions from the Treasury.

• will issue a Debit Advice to the Treasury, once the transfer is effected.

2.10 Budget Office (MFIN)2.10 Budget Office (MFIN)2.10 Budget Office (MFIN)2.10 Budget Office (MFIN)

16. The Ministry of Finance) is responsible for ensuring that Malta respects all its

national co-financing obligations and its commitments under the principle of

additionality in accordance with Article 11 of Regulation 1260/99. At a

management level, the Budget Office will be assisted by the MA and the PA to

manage the national co-financing. This co-financing will feature as a separate

and distinct item within the national budget of the respective line ministries.

23

2.11 Internal Audit & Investigations Directorate (IAID)2.11 Internal Audit & Investigations Directorate (IAID)2.11 Internal Audit & Investigations Directorate (IAID)2.11 Internal Audit & Investigations Directorate (IAID)

17. The Internal Audit and Investigations Directorate (IAID) is the executive branch

of the Internal Audit Investigation Board (IAIB) within the Cabinet Secretariat of

the Office of the Prime Minister and is regulated by the Internal Audit and

Financial Investigations Act 2003 (Chapter 461, Laws of Malta).

18. The IAID is responsible to:

• certify to the EU the adequacy of financial control, procurement and operational

management structures and systems when utilising EU Structural Funds;

• perform “a priori” audits, examining internal systems, procedures and controls

and issuing certificates in this regard;

• carry out “ex-post” performance auditing. This also includes responsibilities for

performing joint-audits with EU services;

• perform full financial investigations into the misuse and/or fraudulent

mismanagement of funds, thereby also fulfilling its role as the national

counterpart for DG OLAF in Malta;

• perform specific audits on the MA, the PA and IBs and any other relevant

stakeholders;

• carry out checks in accordance Article 10 of Regulation 438/2001 (including the

mandatory 5% sample checks) ;

• submit annually an update by end of June on Article 12 of Regulation 438/2001

to the Commission;

• undertake independent ex-post audit reviews of the effectiveness or otherwise of

the monitoring benchmarks applied during the implementation of particular

projects or initiatives. The report will be submitted solely to the MA;

• issue a declaration on winding up of the assistance for the Structural Funds

according to internationally accepted audit standards.

Contact Person at IAID is:

Mr. Robert Camilleri

IAID

Tel: 21 237737

Email: [email protected]

24

2.13 National Audit Office (NAO)2.13 National Audit Office (NAO)2.13 National Audit Office (NAO)2.13 National Audit Office (NAO)

19. The National Audit Office (NAO) is the external auditor of the Government of

Malta and is wholly independent of the executive arm of Government and

responsible to Parliament where the Auditor General’s reports are debated by the

Public Accounts Committee (PAC).

20. Since projects co-financed by the Structural Funds are considered to be financed

by public funds, the NAO may carry out audits as the external auditor of

Government.

2.14 Line Ministry2.14 Line Ministry2.14 Line Ministry2.14 Line Ministry

• EU Affairs DirectorEU Affairs DirectorEU Affairs DirectorEU Affairs Director

21. The EU Affairs Director is present within each line Ministry. The EU Affairs

Director will be responsible for the co-ordination of the implementation of

approved projects falling under the responsibility of the Director’s line ministry,

signing of each Invoice Status Certificate (ISC) and the relevant checklist.

PAYMENTS CANNOT BE PROCESSED IF NOT SIGNED BY THE EU

AFFAIRS DIRECTOR. The EU Affairs Director must ensure that projects are

implemented in line with the relevant EU and national regulations and

procedures particularly those pertaining to procurement, financial control and

reporting. Moreover, with regards to reporting on irregularities, the Director EU

Affairs must:

• report any irregularities upon detection;

• certify and forward to the MA the Declaration on Irregularities (Nil

Returns) received from the FBs.

In the event that the Director EU Affairs is away from office, the Director should

delegate authority to another officer(preferably the Assistant Director of EU Affairs

Directorate). The Director should fill in the form for Delegation of Authority which can be

found in Chapter 19 of this MoP1.

25

• Accounting OfficerAccounting OfficerAccounting OfficerAccounting Officer

22. The Accounting Officer in the line ministry must input into the Departmental

Accounting System (DAS) the amount of each tender and should also fill in the

soft Commitment Form. The Accounting Officer must ensure that the payments

related to the EU funded project are made from the correct Budget Lines.

23. The Accounting Officer must keep in close contact with the Treasury to ensure

that payments are processed efficiently and correctly.

2.15 Final Beneficiary2.15 Final Beneficiary2.15 Final Beneficiary2.15 Final Beneficiary

24. In accordance with Article 9 (1) of the General Regulation, the final beneficiaries

(FBs) are the bodies, public and/or private organisations that are responsible for

the commissioning of the operations. In the case of aid schemes pursuant to

Article 87 of the Treaty and aid granted by bodies appointed by the Member

States, the FB is the body that grants and manages the aid.

25. The FBs must:

• adhere to the terms and conditions set out in the Letter of Offer;

• follow the procedures outlined in this MoP;

• fulfil the requirements of Regulation 1159/2000 with regards to publicity and

information with respect to the individual operation;

• ensure compliance with the Public Contracts Regulation;

• ensure compliance with Community policies on environment, equal opportunities,

fair competition and state aid;

• retain all documents as specified in the chapter on Retention of Documents of

this MoP;

• input financial, procedural and procurement data into the Structural Funds Data

Base on a regular basis;

• fill the relevant parts of the Invoice Status Certificate (ISC) in relation to

payments to be made to contractors;

• stamp all invoices with a Structural Funds stamp before passing the invoice to

26

the EU Affairs Director together with the Invoice Status Certificate;

• fill in the Statement Of Expenditure (SoE) every two months and relevant

declarations as specified in the chapter on Financial Control in this MoP;

• provide quarterly reports to the MA and the IB through the EU Affairs Director of

the respective line ministry as specified in the chapter on Monitoring of this MoP;

• provide any required input for the drawing up of the annual report;

• support and adhere to the checks required by national and EU Regulations;

• supply promptly any information relative to errors or omissions which may lead

to recovery of funds;

• send immediately the irregularity report of any irregularities detected in relation

to the co-financed operation. The FB must also send the report on irregularities

(nil return) at quarterly intervals;

• inform the MA and the IB on any possible civil, penal or administrative judicial

procedures which might have repercussions on the co-financed operations;

• has an obligation to notify all grants to the SAMB and should retain documents

pertaining to state aid as specified in the chapter on Retention of Documents of

this MoP.

2.16 Contractor2.16 Contractor2.16 Contractor2.16 Contractor

26. The contractor will be the provider of works, supplies or services that has been

awarded a contract following the launch of a tender/call for application/request

for quotations in line with Public Contracts Regulation (L.N. 299 of 2003 as

amended by any other subsequent legislation. As of June 2005 LN 177 and LN

178 of 2005 have entered into force).

2.17 Monitoring Committee for Structural Funds (MC)2.17 Monitoring Committee for Structural Funds (MC)2.17 Monitoring Committee for Structural Funds (MC)2.17 Monitoring Committee for Structural Funds (MC)

27. The Monitoring Committee (MC) has been established and is chaired by the

Principal Permanent Secretary, OPM, and is comprised of Government

representatives, social and economic partners, representatives of fisheries and

agricultural sector and NGOs.

28. The MC must satisfy itself with the effectiveness and quality of the

implementation of EU-co-financed expenditure. The MC is responsible for

27

adjusting the PC.

29. The following organisations participate in the MC:

• the Principal Permanent Secretary Office of the Prime Minister as Chairman;

• The Permanent Secretary of each Government Ministry;

• the Head of the Managing Authority;

• a representative of each of the organisations represented in the Malta Council for

Economic and Social Development;

• a representative of the Regional Project Committee (Gozo);

• a representative of the National Council for Women;

• a representative of each of two environment NGOs;

• a representative of the fisheries sector;

• a representative of the agricultural sector;

• representatives of the European Commission;

• and a representative of the European Investment Bank (EIB) when appropriate.

The Secretariat to the MC is provided by the MA.

A copy of the Terms of Reference and rules of procedure of the MC are attached in

Annex 3.4

2.18 Sectoral Monitoring Sub2.18 Sectoral Monitoring Sub2.18 Sectoral Monitoring Sub2.18 Sectoral Monitoring Sub----Committees (SMSC)Committees (SMSC)Committees (SMSC)Committees (SMSC)

30. The Sectoral Monitoring Sub-Committees (SMSC) will monitor the implementation

of projects selected for EU funding under the SPD on a sectoral basis. There will

be five SMSCs covering the following sectors:

• Agriculture & Fisheries

• Tourism & Enterprise

• Environment

• Transport

• Human Resource Development

31. The SMSCs will be chaired by the Permanent Secretary (or his/her designate) of

the sectoral line Ministry, co-chaired by the Director, EU Affairs. Members will

28

include the project leaders, the MA, the PA, the IB (where applicable), the DoC,

(MEPA, SAMB and the Commission for the Promotion of Equality between Men

and Women if and when required). The Chairperson shall appoint a Secretary

from the same line Ministry.

32. The main objective of the SMSC is to monitor the impact of the interventions on

the sector/s. The SMSC will receive periodic guidelines from the MA.

2.19 Regional Project Committee (Gozo) {RPC}2.19 Regional Project Committee (Gozo) {RPC}2.19 Regional Project Committee (Gozo) {RPC}2.19 Regional Project Committee (Gozo) {RPC}

33. The Regional Project Committee (Gozo) {RPC} is responsible to deal with matters

related to projects falling under Measure 4.1 and 4.2 of Priority 4 and other Gozo

projects falling under other Priorities of the PC.

34. The RPC shall specifically:

• prepare the selection of projects and measures for all priorities for Gozo and

forward to the MA;

• to seek and obtain from the competent authorities all the information needed on

the implementation by the same authorities of these projects and measures;

• to follow up the implementation by the relevant implementing bodies of

Structural Funds funded projects in Gozo;

• inform the MA on all necessary action to be taken by the relevant bodies to

ensure smooth implementation of the Gozo projects;

• draw up quarterly implementation reports to the attention of the MA with

recommendations for remedial action where necessary (copied to the IB in the

case of Measure 4.2);

• to submit through the Ministry of Gozo (MGOZ), the quarterly and annual

implementation report to the MA (copied to the IB in the case of Measure 4.2);

• to submit to the MA proposals for adjusting the PC as regards the Gozo related

priority.

35. A copy of the covenant between the MA, ESF IB and the RPC and the TORs of

the RPC can be found in Annex 3.5 (which will be issued in the near future) and

Annex 3.5.1 respectively.

29

2.20 Project Selection Committee (PSC)2.20 Project Selection Committee (PSC)2.20 Project Selection Committee (PSC)2.20 Project Selection Committee (PSC)

36. Projects are selected by the Project Selection Committee (PSC) which is chaired

by the Managing Authority. The role of the PSC is to:

i. evaluate projects in terms of eligibility;

ii. rank the eligible projects in terms of the selection criteria of the PC;

iii. select projects and make recommendations to Cabinet.

A copy of the Terms of Reference of the PSC can be found in Annex 3.6.

2.21 State Aid Monitoring Board (SAMB)2.21 State Aid Monitoring Board (SAMB)2.21 State Aid Monitoring Board (SAMB)2.21 State Aid Monitoring Board (SAMB)

37. The State Aid Monitoring Board (SAMB) provides advice and guidance with

respect to State Aid in order to ensure that the EU funded projects are in line

with Community State Aid regulations. Upon request of the FB, the SAMB will

assess any State Aid implications on each project proposal. The SAMB can carry

out audits on individual projects on issues related to state aid once

implementation is underway.

38. The FB should refer to Legal Notice 210/2004 (State Aid Monitoring Regulations)

to ensure compliance with State Aid requirements.

Contact persons from the State Aid Monitoring Board are:

Dr Yana Haber/Dr. Lawrence Galea

SAMB

St. Calcedonious Square

Floriana

Tel: 21 252757/21 223878

Email: [email protected] and/or [email protected]

30

2.22 Malta Environment & Planning Authority (MEPA)2.22 Malta Environment & Planning Authority (MEPA)2.22 Malta Environment & Planning Authority (MEPA)2.22 Malta Environment & Planning Authority (MEPA)

39. The Malta Environment and Planning Authority (MEPA) is the national body

responsible for the regulation of environment and land use planning in Malta

(Environment Protection Act, Chapter 435 & Development Planning Act, Chapter

356 of the Laws of Malta). Applicants must ensure that proposals submitted for

Structural Funds assistance are compliant with national environmental and land

use planning regulations and are encouraged to seek guidance from MEPA

regarding their proposals prior to the submission of projects to the MA. MEPA will

provide guidance on the potential environmental and planning impacts of the

proposal, on the legislative implications, as well as on the processing time

required for relevant permits to be determined. Projects having a significant

impact on the environment may be required to undergo an Environmental

Impact Assessment in terms of the LN 204/2001.

For general queries and guidance on project related issues will be provided by:

Ms. Marie Briguglio

EU and Multilateral Affairs Unit

MEPA

St. Francis Ravelin

Floriana

Tel: 22901586/22900000

Fax: 22901533

Email: [email protected]

Guidance on Planning matters will be provided to applicants by:

Mr. Joseph Borg

Urban Conservation Area Team

Planning Directorate

MEPA

St. Francis Ravelin

Floriana

Tel: 2290 1037

Fax: 2290 2295

Email: [email protected]

31

Guidance on Environmental matters will be provided to applicants by:

Mr. Michael Sant

Environmental Permits Team

Environment Protection Directorate

MEPA

St. Francis Ravelin

Floriana

Tel: 2290 1578

Fax: 2290 2295

Email: [email protected]

2.23 National Commission for the Promotion of Equality for Men and 2.23 National Commission for the Promotion of Equality for Men and 2.23 National Commission for the Promotion of Equality for Men and 2.23 National Commission for the Promotion of Equality for Men and

Women Women Women Women

40. Equal Opportunities is one of the key horizontal themes. The Commission for the

Promotion of Equality for Men and Women provides guidance and advice to all

stake holders including the FB on issues related to equal opportunities. The

Maltese legislation referring to equal opportunities is Chapter 456 of the Laws of

Malta.

Contact person for equal opportunities considerations is:

Ms. Sina Bugeja

Executive Director

2, Cavalier Str

Valletta CMR 02

Tel Nos: 25903850

Tel Nos: 25903851

Email: [email protected]

32

2.24 Department of VAT2.24 Department of VAT2.24 Department of VAT2.24 Department of VAT

41. FBs should contact the Department of VAT to make the necessary arrangements

to settle the payment of the VAT component for each contract that the FB

launches and signs. Guidance notes on VAT issues can be downloaded from

www.vat.gov.mt For further guidance the FB should contact:

Mr. Joseph Sammut

Director General

VAT Department

Centre Point Building

Ta’ Paris Road

Brikirkara CMR 02

Tel: 21 499311

Fax: 21 499365

Email: [email protected]

33

3. Compliance with Community Policies

3.1 S3.1 S3.1 S3.1 State Aid tate Aid tate Aid tate Aid

1. It is important to make a distinction between state aid under a block exemption

and state aid under the de minimis rule. Any aid received under the block

exemption should not be included in the €100,000 state aid allowed under the de

minimis rule.

2. The FB should refer to Legal Notice 210/2004 (State Aid Monitoring Regulations)

to ensure compliance with State Aid requirements and any subsequent

amendments thereof.

3. For a project to be eligible for consideration by the PSC, the FB must seek

clearance from the State Aid Monitoring Board. In addition, any changes to a

project must be cleared by the SAMB prior to the change being presented to the

MA for approval. Contact details of the SAMB can be found under Section 2.21 of

Chapter 2 of this MoP.

4. With reference to the de minimis rule, a firm may not receive more that

€100,000 of state aid (public funds which include EU funds) over a three year

period. If a firm has been granted e.g. €10,000 in 2004, the full €10,000 is listed

as stated aid which that firm has been granted. If the firm does not utilise the

full grant e.g. it utilises only €9,000 of the grant it was entitled to (in 2004),

account should be taken as what has been disbursed i.e. €9,000.

5. Final beneficiaries are responsible for clearing the aid scheme with the SAMB (as

per legal notice) and for ensuring that all measures are taken to ensure that

state aid regulations are complied with. It is also the responsibility of the aid

donor (FB) to monitor aid prior to launching a scheme under the de minimis.

Final beneficiaries should ask final recipients to declare their status with respect

to state aid. It is important to note that if a final recipient of aid is found in

breach of state aid requirements, the funds must be recovered from the final

recipient including interests and fines.

34

3.2 E3.2 E3.2 E3.2 Environmentnvironmentnvironmentnvironment

6. Environment is a cross cutting theme and all efforts should be made by the FB to

include an environment dimension within the project. Project leaders should take

a pro-active approach to environment issues when drafting projects and

throughout the project’s life cycle. Further information may be available from

Malta Environment and Planning Authority. Contact details for MEPA can be

found under Section 2.22.

7. It is important to note that environmental matters should be taken into

consideration at all stages of the design of the project. The project should be

structured to ensure minimum environmental damage and maximum benefits.

8. In addition time frames stipulated by national law and procedures must be taken

into account.

3.3 E3.3 E3.3 E3.3 Eqqqqual Opportunities ual Opportunities ual Opportunities ual Opportunities

9. Equal Opportunities is a cross cutting theme and all efforts should be made by

the FB to include this element within the project. Further information may be

available from the National Commission for the Promotion of Equality for

Men & Women

10. It is important to note that the FB should take a pro-active approach to equal

opportunities. The FB must ensure that equal opportunities have to be taken into

consideration at all stages of the design of the project. The project has to be

structured to ensure equal opportunities at all stages of the project’s operations.

3.4 P3.4 P3.4 P3.4 Public Procurementublic Procurementublic Procurementublic Procurement

11. When preparing the tender dossiers, FBs must follow the tendering procedure in

line with Public Contracts Regulations that are in line with the EU Directives

(LN299/2003 and amendments thereafter). It should be noted that as of June

35

2005 LN 177 & 178 of 2005 have entered into force. For further information on

Contracting, please refer to Chapter 7 of this MOP and consult the Department of

Contracts.

36

4. Programming Procedures

4.1 Part I 4.1 Part I 4.1 Part I 4.1 Part I –––– Selection of Priorities and Measures Selection of Priorities and Measures Selection of Priorities and Measures Selection of Priorities and Measures

4.1.1 Single Programming Document

1. Based on a number of sectoral policy documents and statistics from the National

Statistics Office and Eurostat, the MA draws up an socio-economic analysis of all

sectors in Malta. The analysis is complemented with a comparison with EU data

(average of Member States) and a SWOT analysis highlighting the strengths,

weaknesses, opportunities and threats as seen in the Maltese context.

Workshops and meetings are held with stakeholders.

2. Once all relevant information has been collected, the MA draws up a strategy

based on the needs identified in the socio-economic analysis and the results of

the SWOT. The strategy identifies a number of priorities and measures that

contribute towards the socio-economic development of Malta in line with the EU’s

economic and social cohesion policy. Due consideration is given to EU strategies

and policies on the respective sectors. Each priority is accompanied by a list of

indicators to show what will be the expected impact of the priority.

Once priorities and measures are identified, the MA draws up the relevant

financial tables.

3. An ex-ante evaluation of the Single Programming Document (SPD) is carried out

by a team of independent evaluators. Recommendations made by evaluators are

considered by MA and be taken on board, where appropriate.

4. The MA produces the first draft of the SPD, consisting of the socio-economic

analysis complemented with statistical data and SWOT analysis, summary of

projects carried out under EU and other external funds in the previous period,

strategy for structural funds with identified priorities and measures, an ex-ante

evaluation of the strategy, financial tables in line with communication by

Commission on allocation of funds by year, coordination of structural funds with

37

other funds, state aid table as per template, additionality chapter, information on

respect of partnership principle, implementation arrangements and relevant

annexes.

The draft SPD is presented to the Chairman MCESD and discussions are held, as

appropriate.

The draft SPD is discussed in the relevant inter-ministerial committee.

The SPD is submitted to the EU Commission.

5. The Commission draws up a list of comments on the submitted document and

informs on the starting of negotiations. Negotiations are held between the

Commission and the Member State.

6. A Commission decision is issued officially approving the SPD. The Commission

decision lays out the rules that regulate the granting of aid under the SPD.

4.1.2 Programme Complement

7. Upon agreement of the SPD, the MA drafts the Programme Complement (PC) in

line with the Vademecum on Structural Funds. For each measure, the eligible

actions, indicators and selection criteria are identified. An action plan for publicity

and information on the arrangements for exchange of electronic data are

included in the PC.

The PC is presented to the Monitoring Committee for approval.

8. Upon approval of the PC by the Monitoring Committee, the PC is to be sent to

the Commission for information within three months from issue of Commission

decision approving the SPD.

38

4.1.2.1 Changes to the Programme Complement

9. Changes to the PC must be presented to and agreed by the MC. FBs or any

other relevant organisation proposing the change must send the change to the

MA (as secretariat to the MC) through the appropriate channels. In the case of

public sector organisations changes must be approved by the Permanent

Secretary and IB (where relevant) and then forwarded to the MA for

consideration and subsequent distribution to the MC. The relevant documents

must reach the MA well in time to allow for appropriate analysis and distribution

within the time limits of the MC’s TORs. The organisation may be asked to make

a presentation to the MC on the day of the meeting.

Please refer to Annex 1.1 for checklist Drafting the Programming of the SPD and

Annex 1.2 for checklist Programming of the PC.

4.2 Part II 4.2 Part II 4.2 Part II 4.2 Part II –––– Selection of Projects Selection of Projects Selection of Projects Selection of Projects

4.2.1 Call for Projects

10. A call for projects is issued by the Managing Authority (MA). In case of EAGGF

Guidance and FIFG projects, the call is restricted to the relevant public

organisations responsible for the agriculture and fisheries sectors. A deadline is

set in the call for receipt of projects with instructions on submission of

application (who is to submit application and to whom). The call will be

accompanied by guidance notes.

11. The call is also issued as a press release to the Department of Information and

published on the Managing Authority’s website. Moreover, given the public sector

dimension of the SPD, an email is sent (electronically) by the Head of the

Managing Authority (in accordance with OPM Circular No 14/2000 emails are

considered to be official correspondence) addressed to Permanent Secretaries

and copied to Director EU Affairs informing them of the call for proposals.

12. The template project application forms and annexes with guidance notes are

made available in electronic format on the PPCD website for download by

39

potential applicants. A help desk is also available on the same website

(ppcd.gov.mt).

In order to ensure the correctness of applications received, the Managing

Authority may hold information sessions for all potential applicants, if deemed

necessary.

Related documents: Template project application form and annexes & Guidance

notes to applicants.

4.2.2 Receipt of Projects

13. Project applications for ERDF are received at the Office of the Managing

Authority by a Programme Manager within the established deadline. The

Programme Manager is to ensure that the project application form is duly signed

by the indicated officers and all required documentation is attached. The

Programme Manager will issue a receipt certifying the receipt of application,

when and by whom it has been received.

14. Project applications for ESF are received by the designated Intermediate Body

(IB) for ESF. The IB officer is to ensure that the project application forms are

duly signed by the indicated officers and all required documentation is attached.

The IB officer will issue a receipt certifying that receipt of project application,

when and by whom it has been received.

15. Project applications for EAGGF and FIFG are received at the Office of the

Managing Authority by a Programme Manager within the established deadline.

The Programme Manager is to ensure that the project application form is duly

signed by the indicated officers and all required documentation is attached. The

Programme Manager will issue a receipt certifying the receipt of application,

when and by whom it has been received.

16. In case of ERDF and ESF projects under Priority 4, the project applications are

received by an officer from the EU Affairs Directorate of the Ministry for Gozo on

behalf of the Regional Project Committee for Gozo. A receipt is issued.

40

Related documents: Template of letter of acknowledgement of application by

MA (Annex 4.1.1);

Template of letter of acknowledgement of ESF application

by IB (Annex 4.1.2);

Template of letter of acknowledgement by MGOZ obo RPC

(Annex 4.1.3 to be issued in the near future);

4.2.3 Preliminary assessment and pre-ranking:

17. For ESF projects (Priority 2), the ESF IB will carry out a preliminary assessment

of the projects and send the documentation (project applications and supporting

documentation) within an established deadline to the Managing Authority.

18. For projects under Priority 4, the RPC discusses and prepares the selection of

the submitted projects. The project applications are then submitted by EU Affairs

Directorate, Ministry for Gozo to the Managing Authority in case of ERDF (same

procedure as for ERDF) and to the ESF Intermediate Body in case of ESF.

19. The Secretariat to the PSC reviews the project applications received under the

respective measures and prepares an evaluation sheet with information on each

submitted application. The Secretariat will check the application in terms of

overall coherence, eligibility and contribution to horizontal priorities, budget,

readiness and PC indicators.

Related documents: Assessment Sheet used by Secretariat to PSC (Annex

4.2.1)

Assessment sheet used by IB (Annex 4.2.2)

Assessment sheet used by MGOZ obo RPC (Annex 4.2.3)

41

4.2.4 Evaluation by the Project Selection Committee (PSC)

20. An agenda for PSC meeting with project applications, related project documents

(application + Annex 1 of the Application Form) and evaluation sheets are sent

to the members of the PSC by the Secretary.

21. The PSC members carry out an initial review of the projects and identify points

which need to be clarified with project applicants and/or other organisations.

Technical experts can be invited to provide input.

22. Should clarifications/further information be required, the Chair of the PSC sends

a letter to the project leader (in case of public entities copied to Permanent

Secretary and Director EU Affairs) asking for clarifications on the points identified

by the PSC. A deadline is given for a reply by the Project Leader.

Reply by project leader is discussed by the PSC.

4.2.5 Selection of Projects

23. The PSC will proceed to decide on the projects in terms of the PC criteria and

rank the projects accordingly.

24. A form assessing each project with marks is filled in by the PSC and signed by all

the members of the committee. The PSC draws up a list of projects ranked

according to assessment carried out.

25. The Managing Authority prepares a Cabinet memo (with selected projects) with

recommendations for discussion and approval by Cabinet.

26. Upon approval by Cabinet of list of projects, the MA informs the project leaders

by email and then proceeds to draw up a letter of offer of grants to selected

applicants stating the conditions of the grant.

42

4.2.6 Unsuccessful Project Proposals & Appeals Procedure

27. Unsuccessful applicants will receive a letter from the MA informing that the

project was not chosen and stating the reason/s why it was not chosen.

28. Appeals Procedure

Unsuccessful applicants may request further clarifications on the reasons outlined

in the letter mentioned under point 27. Such requests for clarifications must be

received within 10 working days of the date of the letter sent from the MA to the

applicant.

29. Unsuccessful applicants may also appeal to the decision. Appeals should be made

in writing by the project leader (through Director EU Affairs and relevant PS in

the case of a public sector organisation) to the Principal Permanent Secretary.

Appeals should reach the PPS within 10 working days of the date of the letter by

the MA. Appeals should include a detailed explanation/justification supported by

relevant documentation/testimonials as to why the applicant does not agree with

decision. Late appeals WILL NOT be considered.

Related documents: Ranking Form of projects (Annex 4.3) [will be issued at a later

stage]

Related documents: Sample Letter of Offer (Annex 4.4)

43

5. Aid Schemes to the Private Sector for Measures 1.3, 3.1,

3.2 & 3.3

5.1 5.1 5.1 5.1 ProgrammingProgrammingProgrammingProgramming

1. When submitting a project proposal consisting of an aid scheme to the

private sector, the project applicant (the public body applying to manage the

grant) is to attach the application forms and guidelines that will be used in

the implementation of the proposed aid scheme. The applicant is also to

provide details on the composition of the selection committee.

2. The guidelines are to contain the total amount allocated, the public co-

financing share, the EU logo and reference to the programme/measure/fund,

the selection criteria on which the projects will implement the actions being

offered under scheme, the eligible and non-eligible expenses, target

beneficiaries (who can apply), additional documents to be provided with the

application, verification checks on the selected projects, evaluation of

applications, information on submission of application forms, information

contact point details (telephone number/fax number/email), and a general

audit trail (from receipt of proposal to payment of invoices) including

information on recovery of funds.

3. On selection of the project by the PSC and approval by Cabinet, the MA will

view the application form and guidelines and, where necessary, recommend

changes to the documents to bring them in line with the PC and the PSC

decisions. If the MA is satisfied that the documents are in line with the PC

measure as well as in line with the PSC decision, the MA will approve and

authorise the launch of the scheme by the selected final beneficiary.

44

5.25.25.25.2 ImplementationImplementationImplementationImplementation

4. The FB will issue a call for proposals for the intended target groups. The call

is to be adequately publicised via press releases, information meetings and

other means of communication media such as local newspapers, and relevant

websites (as appropriate).

5.2.15.2.15.2.15.2.1 Transparency GuidelinesTransparency GuidelinesTransparency GuidelinesTransparency Guidelines

5. When issuing a call for projects, the final beneficiary is to request that the

applicant is to submit with the application three quotes from three different

suppliers of the equipment/services for which co-funding is being requested.

The applicant is expected to base the request on the least priced quote,

failing which the applicant is to provide a justification as to why a higher

priced quote should be preferred. In cases where the equipment (which may

include also software/service) is provided from one source only, the applicant

is to provide an explanation proving that market research has been carried

out and that only one supplier is available.

6. In case of services which may include such costs as expert fees, travel and

accommodation expenses to attend tradefairs or contribution in kind, the

final beneficiary is expected to draw up cost ceilings e.g travel expenses

where the eligible cost will be 500 Euros of which 60% will be public funds. If

the air ticket exceeds 500 Euros, the applicant will be expected to pay 40%

of 500 Euros and the additional cost. With regards to experts fees the FB can

set ceilings according to years of experience, e.g. an expert of at least 10

years experience can receive a fee of 100 Euros a day. In setting these

ceilings, the FB should carry out market research to establish expert fees in

Malta.

7. The application forms are to be made available to applicants on websites for

downloading.

8. On receipt of the application form, the FB must issue a letter of

acknowledgement to the applicant.

45

5.2.25.2.25.2.25.2.2 Setting up of an Evaluation and Selection CommitteeSetting up of an Evaluation and Selection CommitteeSetting up of an Evaluation and Selection CommitteeSetting up of an Evaluation and Selection Committee

9. In order to ensure transparency and correctness it is recommended that the

following steps are adhered to:

10. The Final Beneficiary is responsible for the setting up of an evaluation and

selection committee to evaluate, rank and select projects submitted under

the aid scheme. The evaluation and selection of the projects is to be based

on the selection criteria of the aid scheme.

11. The Final Beneficiary should establish a procedure for the evaluation and

selection committee. The Final Beneficiary must also provide the selection

criteria which have been established for the aid scheme. Furthermore

reference should be made to the SPD, PC, Cabinet decision approving project

and any manuals or other documents related to the aid scheme.

12. The Final Beneficiary is to appoint an Evaluation and Selection Committee.

The members of the committee must be approved by the head of the FB

responsible for the aid scheme.

13. When appointing a selection committee the following rules are guidelines

which should assist FBs in their work and it is recommended that:

i) the Evaluation and Selection Committee have 1 Chairperson, 1 Secretary, and

at least 3 Evaluators. The number of evaluators must always be an odd

number and the Chairperson and Secretary are non-voting members and are

responsible to guide the committee in the correct application of the

procedure;

ii) the evaluators are expected to be knowledgeable on the subject. In this

regard a curriculum vitae is to be provided and recorded in a file containing

all documents related to the committee (such as appointment and approval

of members, evaluation forms duly filled in with comments made by

evaluators);

46

iii) any conflicts of interest are to be avoided.

iv) where possible, hierarchical relations between evaluators are to be avoided.

14. The received application forms are evaluated and ranked by this Selection

Committee. If the project is not eligible, it will not be ranked.

15. Once the eligible projects are ranked, a list of projects must be published

with 1 indicating the project with the highest ranking. The selected projects

may be limited by the available budget.

16. The successful applicants are informed in writing that their project has been

selected and that a letter of agreement with details of the amount and

conditions of the grant will be issued [by the organisation managing the

scheme] in due course. Non-successful applicants must also be informed

accordingly explaining why their project was not selected.

17. The letter of agreement is issued to successful applicants and it must

contain:

• amount of grant;

• details of the project;

• implementation timeframe;

• submission of receipt for reimbursement indicating the content of receipt

(Net Amount + VAT = Total Amount);

• clause on recovery of funds;

• conditions of grant;

• clause on verification and checks;

• documents to be retained by the final recipient;

• publicity measures to be undertaken by the final recipient.

18. On receipt of invoice for expenditure of a selected project, the FB must check

that the invoice is in line with the conditions of the letter of agreement (i.e.

that the expense is an eligible expense and that the invoice is correctly

presented) and that the works or delivery of the goods/services have

effectively been carried out. The FB must undertake checks on all invoices.

47

19. The FB must also ensure that the final recipient is complaint with the letter of

grant issued.

5.2.25.2.25.2.25.2.2.1.1.1.1 Unsuccessful PrUnsuccessful PrUnsuccessful PrUnsuccessful Project Proposals & Appeals Procedureoject Proposals & Appeals Procedureoject Proposals & Appeals Procedureoject Proposals & Appeals Procedure

20. Non-successful applicants should receive a letter from the FB informing them

that the project was not chosen and the reason/s why the project was not

chosen.

21. Unsuccessful applicants may request further clarifications on the reasons

outlined in the letter mentioned under point 19.

22. Unsuccessful applicants may also appeal to the decision. In the case of

appeals for aid schemes under EAGGF and FIFG, appeals should be made in

writing by the applicant to the IB (intermediate body) within 10 days of the

letter by the FB (letter informing the applicant that the project proposal was

not successful). In case of appeals for aid schemes under ERDF, appeals

should be made in writing by the applicant to the MA within 10 days of the

letter by the FB. The appeals should include a detailed explanation supported

by relevant documentation/testimonials as to why the applicant cannot

accept the decision. Late appeals WILL NOT be considered.

5.2.35.2.35.2.35.2.3 VAT Reimbursement in case of Aid SchemesVAT Reimbursement in case of Aid SchemesVAT Reimbursement in case of Aid SchemesVAT Reimbursement in case of Aid Schemes

23. VAT is to be paid (over and above the co-financing) by the final recipient.

[entrepreneur, fisherman, farmer receiving the aid] The final recipient is

responsible for claiming back VAT in the usual manner. When reclaiming VAT,

the VAT Department reserves the right to check the original receipts. To this

effect given that the Treasury retains the original receipt as proof of payment

the VAT Department has agreed that for the final recipient of a grant to be

able to reclaim VAT, the Treasury will (upon the request of the final recipient)

present the final recipient with a copy of the original Tax Invoice which will

be stamped and signed by the Treasury Official thus confirming that the

document is a certified true copy. It is important to note that the Tax Invoice

clearly indicates the VAT amount and the VAT number of the final recipient.

48

5.2.45.2.45.2.45.2.4 RetentiRetentiRetentiRetention of Documents for Final Recipon of Documents for Final Recipon of Documents for Final Recipon of Documents for Final Recipientsientsientsients

24. It is important that the FB takes note of the documentation that should be

retained by the final recipient. The FB should refer to Retention of

Documents Chapter 16 and point 5.2.3 above

25. Furthermore, the FB must inform the FR of their obligations in line with

Section 14.3.1 On-the-Spot checks, Chapter 14 of this Manual of Procedure,

Audit & Control. This section lists the documents that are required to be kept

at project level (i.e. at the Final Recipient) and subsequently the documents

which will be verified during audit missions and spot checks which take place

at the Final Recipent. ‘Inventory of equipment’ is of particular relevance to

aid schemes (Bullet 13 of paragraph 16). Any equipment/supplies bought

must be inventorised. This can be done by means of a sticker or through

some other permanent means, (equipment must be referenced with an

inventory number and a list of such inventory is to be kept). When there is a

change of any equipment/supplies parts, records must be kept and the

inventory updated to reflect the new serial numbers. The old serial number

must also be retained. Please note that the final recipient is liable to replace

any lost or damaged articles. The FB will inform the FRs accordingly by

issuing a letter to the FRs informing them of the obligation to have an

inventory.

5.2.55.2.55.2.55.2.5 Project ImplementationProject ImplementationProject ImplementationProject Implementation

26. Execution of interventions should be carried out in accordance with the

budget lines approved as per contract between FB and FR. FBs need to notify

FRs that the FBs must be informed of cases where interventions will not be

carried out whereby it needs to be back up by a valid justification and that it

is important that FRs formally know that any changes need to be notified to

and approved by the FB.

27. In accordance with the ‘Invoice Payment Process’ section 12.5 of Chapter 12

of this MoP - Financial Management and Payments, the FR will be reimbursed

49

for the expenditure spent. Before generating the ISC for payment the FB

must ensure that:

a. the expenditure is in line with the conditions of the letter of

agreement signed between the FB and FR.

b. correct fiscal documentation has been submitted by the FR. This has

to be in line with Chapter 406 of the Laws of Malta (VAT legislation)

5.2.65.2.65.2.65.2.6 ExExExEx----Post Management ControlPost Management ControlPost Management ControlPost Management Control

28. In accordance with Article 30.4 of Regulation 1260/99, the FB must ensure

that the final recipient retains the contribution from the Funds only if that

operation does not, within five years of the date of the decision of the grant

by the public organisation managing the scheme, undergo a substantial

modification:

a) affecting its nature or its implementation conditions or giving to a final

recipient an undue advantage; and

b) resulting either from a change in the nature of ownership in an item

of infrastructure or a cessation or change of location in a productive

activity.

29. The FB should ensure that checks are in place to monitor projects during the

period in question (the full five years). The MA will specifically request the FB

to put in place such checks and controls.

30. The FB should also ensure that the final recipient (entrepreneur, farmer,

fisherman) is aware of the possible implications (financial corrections) if

found in breach of Article 30 (4)of 1260/99.

31. Failure to comply with Article 30 (4) of Regulation 1260/99 could result in

financial corrections in accordance with Article 39 of Regulation 1260/99.

32. For issues pertaining to Article 4 of Regulation 438/2001 please refer to

Chapter 14 of this MoP, Audit and Control. One of the main objectives of

50

these checks is to verify that the good/services/works are being delivered in

accordance with the contract between the FB and the FR and that the

invoices correspond to the claim being raised. The report must be signed by

the FB and FR and must be uploaded on the SFD by the Final Beneficiary.

33. On a general note, it is very important that where possible photos are taken

of any works carried out, services delivered and training conducted. These

are to be attached to the report covering the check.

34. An adequate conduction of physical on-the-spot checks should be

undertaken. Where necessary measurements are to be taken, the quality of

materials is to be verified and specifications/serial numbers of items need to

tally with invoices/warrant/guarantee documentation presented by the FR.

Proper verification of documentation should also be carried out, officials from

the respective FB must check the files to ensure that all relevant

documentation is being retained by the FR.

35. It is important that all the entities that conduct Article 4 on-the-spot checks

on FRs follow a common procedure when verifying expenditure. The MA must

be informed of all the checks that are scheduled irrespective of who is

leading the check. The entity undertaking the check must send an e-mail to

the Financial Control Coordinator and the Programme Manager at the MA

responsible for the respective Measure. The Article 4 On-the-spot check

flowchart that follows illustrates the whole process one should follow for

every FR project that is checked under Article 4 Reg. (EC) 438/2001.

36. The signed report is to be uploaded on the Structural Funds Database (SFD)

upon completion of the report. Delay in uploading the report will hinder the

monitoring done by the MA and the Paying Authority (PA). A quarterly

updated list should be kept by the FB of the Article 4 checks being

undertaken, this is to be filed in the respective project file.

Please refer to Annex 1.3 of this MoP for checklist for aid schemes to private

sector- this is to be filled in and filed in the project file by the FB in accordance

with the project’s lifetime.

51

5.2.75.2.75.2.75.2.7 OnOnOnOn----thethethethe----spot check procedure for Aid Schemesspot check procedure for Aid Schemesspot check procedure for Aid Schemesspot check procedure for Aid Schemes

52

6. Technical Assistance2

6.1 Introduction

1. Technical assistance supports and accompanies the programme implementation

in accordance with article 23 of the General Regulation of the Structural Funds

and will support actions related to the management, monitoring, evaluation,

control, information and publicity of Malta’s Single Programming Document (SPD)

2004-2006.

6.2 Technical Assistance under Malta’s SPD

2. Priority 5 of Malta’s SPD consists of two measures:-

• Measure 5.1 – ERDF TA – This measure, although funded by the ERDF,

also caters for needs arising under the EAGGF and the FIFG.

• Measure 5.2 – ESF TA

Both measures will be directly managed by the Planning and Priorities

Coordination Division, Office of the Prime Minister, herein referred to as

Managing Authority (MA)3.

3. An annual progress report is to be drawn up for both measures using the

information available in the SFD.

6.3 General Objectives of the Technical Assistance

4. The general objectives of the TA are to:

• ensure the proper administration of the programme through an effective

application of the regulations;

53

• ensure a smooth implementation of the SPD with regards to its defined

objectives;

• optimise the programme quality and efficiency of the interventions;

• increase the visibility and awareness of structural funds interventions through

dissemination of relevant information and targeted publicity actions.

6.4 Eligible Actions Under TA

5. It is important to note that specific technical assistance related to individual

projects should be charged to the project’s budget. The assistance available

under priority 5 is restricted to support the PROGRAMME. The following actions

are eligible under TA of Measure 5.1 & 5.2:

Measure 5.1

Expenditure on the management, implementation, monitoring and control of the

structural funds programme:

• Maintenance of the Structural Funds Database and related software services

(including procurement of IT, office and other related equipment) for

management, monitoring and evaluation of funds;

• Technical assistance (including studies and exchange of experience) for the

preparation and implementation of Structural Funds programmes;

• Technical assistance (including studies) to prepare for the evaluation of the

programme;

• Administrative costs and all other expenditure including expenditure on

salaries in line with rule 11 (2) of Regulation 448/20044;

• Publicity actions (including printing of information material and other

publications, as well as conducting seminars, workshops, information and

mobilisation events and media campaigns) for projects under ERDF, EAGGF

and FIFG;

• Technical assistance including studies, ex-ante evaluation and other

preparatory work in relation to 2007-2013 Structural Funds programme.

54

Measure 5.2

Expenditure on the management, implementation, monitoring and control of

structural funds programme:

• Maintenance of the Structural Funds Database and related software services

(including procurement of IT, office and other related equipment)

• Actions aimed at the capacity building within Structural Funds related bodies,

partners and stakeholders (including training, studies and exchange visits);

• Technical assistance (including studies, training and exchange of experience)

for the preparation and implementation of Structural Funds programmes;

• Administrative cots and all other expenditure including expenditure on

salaries in line with rule 11 (2) of Regulation 448/2004*;

• Technical assistance in relation to evaluation of the programme;

• Publicity actions (including printing of information material and other

publications, as well as conducting seminars, workshops, information and

mobilisation events and media campaigns) for projects under the ESF section.

6.5 6.5 6.5 6.5 Request ProcedureRequest ProcedureRequest ProcedureRequest Proceduressss

6. Organisations wishing to make a request for technical assistance under ERDF or

ESF should inform the MA accordingly and obtain the relative technical assistance

request form [Annex 5 of this MoP] as follows:

6.5.1 Request for procurement single activities/initiatives/items

7. For each item requested, applicants will submit the completed request form to

the MA together with three quotations or an evaluation report. All the sections of

the request form have to be filled in. The MA reserves the right to ask for

clarifications and to request re-submission if not enough details are provided.

Refer to:

Annex 5.1 – ERDF Technical Assistance Request Form [Measure 5.1]

55

Annex 5.2 – ESF Technical Assistance Request Form [Measure 5.2]

8. Requests will be processed and assessed by the MA. Approvals will be done in

writing.

9. Following approval by the MA, the selected applicant will proceed to procure the

goods/services according to the procurement regulations respecting any

conditions of the grant.

6.5.2 Requests for initiatives comprising of multiple activities

10. Where requests comprise of a number of activities or initiatives, organisations

should refer to the sub-project application form. The template application form to be

used is the same as referred to in paragraph 12 which can be downloaded from the

PPCD website. All the sections of the request form have to be filled in. The MA

reserves the right to ask for clarifications and to request re-submission if not enough

details are provided.

11. Following approval by the MA, a letter of offer will be drawn up and presented to

the applicant organisations. The applicant will proceed to procure the goods/services

according to the procurement regulations respecting any conditions of the grant.

6.5.3 Requests for capacity building initiatives

12. Eligible activities for funding through Technical Assistance are training sessions,

seminars, conferences and study visits. All activities should be relating to the

management, monitoring and/or implementation of Structural Funds. Eligible

activities can be held either locally or abroad.

Refer to:

Annex 5.3 – CBSF001 for overseas activities

Annex 5.4 – CBSF002 for local activities

13. The Time frames set within this document are to be adhered to. Request for

approval and for funding can be refused if these are not done within the stipulated

time frames.

56

Overseas Training

At least 3 weeks prior to travel, applicants must send the original signed CBSF001

form (sections 1-17 to be filled in) to the MA. Supporting documents, namely the

invitation letter and programme/agenda of the training activity to be attached.

The MA will either approve or reject the request following consultation with the

relevant stakeholders. Upon approval, the MA will fill in section 20-22 of the

CBSF001 and forward it to applicant.

Applicants must quote the per diem rates referred to in the latest MPO travel circular

available on www.ppcd.gov.mt. Contingencies are not eligible.

Local Training

At least 3 weeks prior to the training activity, applicants must send the original

signed CBSF002 [sections 1-17 to be filled in]. Supporting documents, namely the

invitation letter and programme/agenda of the training activity are to be attached.

The MA will either approve or reject the request following consultation with the

relevant stakeholders. Upon approval, the MA will fill in sections 20-22 of the

CBSF002 and forward it to applicant;

Applicants must quote the latest euro paid rates for per diems of foreign

experts/trainers found on

http://europa.eu.int/comm/europeaid/perdiem/perdiem.pdf

6.66.66.66.6 Payment Process Payment Process Payment Process Payment Process

14. It is important to note that OPM has two direct votes for technical assistance

under the cost centre.

6.6.1 Payment Process for procurement single activities/initiatives/items

57

15. Payments in relation to activities arising from OPM will follow the same payment

process as outlined under Chapter 12 of this manual.

16. Technical assistance requested from other Ministries/Departments cannot be

charged to their own Structural Funds cost centre since these do not include funds

for technical assistance. Once the approval of the grant has been issued by the MA,

the organization generating the activity will charge the vote closest to the purchase

(example: if IT equipment is being purchased, this is charged to the IT vote) of the

respective line Ministry and will inform the MA in writing that payment has been

effected [identifying the vote] and send a copy of the payment voucher to the MA as

proof that expenditure has been made.

17. The MA will then proceed to reimburse the vote that was charged with the

expense from the relative [ERDF or ESF] technical assistance vote. This would

ensure that the financial impact will ultimately fall on the Structural Funds technical

assistance.

18. The input of data into the SFD and the download of the ISC will be triggered by

the request for reimbursement, by the ERDF or ESF TA vote of the Ministry’s cost

centre.

MA credits quoted vote of

line Ministry

Line Ministry charges vote

most re lated to purchase

Presentation of payment

confirmation to MA

Verification of payment by

MA

Final Recipient submits

invoice to line Ministry

58

6.6.2 Payment Process for inititiatives comprising of multiple activities [Sub projects]

19. Payments arising from sub-projects will follow the same payment process as

outlined under Chapter 12 of this manual.

20. Beneficiaries of Sub projects are to be referred to as second level beneficiaries.

6.6.3 Payment Process for capacity building initiatives

Refer to:

Annex 5.5 – Statement of Expenditure

Annex 2.3 of Annex 2 – TRS 9 Financial Identification form

59

Overseas Training

Public Officers:

Accounting officers of the applicant’s

ministry/department should charge the

votes closest to the items of expenditure.

These votes must be quoted in section

19 when making a claim for refund to

the MA;

By not later than one week from travel,

the applicant must send the original

CBSF001 and the statement of

expenditure to the accounting officer of

the respective Line Ministry.

The accounting officer should:

• Fill in section 18 and 19 of the

CBSF001;

• Copy the statement of expenditure

on the back of the CBSF001 and

certify correct (Annex 5.5);

• Attach the original documents listed

in point 23 and forward the request

to the MA.

Non Public Officers:

By not later than one week of travel

applicants must:

• Prepare the statement of expenditure

(Annex 5.5)

• Fill in the TR#S-9 form (Annex 2.3)

• Fill in section 18 and 19 of the request

form;

• Certify correct all relative documents and

forward them all to the MA.

V. Upon receipt of the request for reimbursement, the MA will:

a. enter the respective information in the SFD;

b. the last date of the training activity is to be used as the invoice date;

c. raise an Invoice Status Certificate;

d. raise a Structural Funds Commitment for the expenses incurred by the applicant;

60

and

e. forward the documents to Treasury for reimbursement.

The Treasury will reimburse the amounts quoted in section 18 of the CBSF001 to the

respective line item/bank account referred to in section 19 of the CBSF001.

61

Local Training

Public Officers:

Accounting officers of the applicant’s

organisation should charge the votes

closest to the items of expenditure

accordingly. These votes must be quoted

in section 19 when making the claim for

refund to the MA;

By not later than one week of the training

activity, the applicant must send the

original CBSF002 and the statement of

expenditure to the accounting officer of his

Ministry.

The accounting officer should:

Fill in section 18 and 19 of the CBSF002.

Attach the original documents listed in

point 23 and forward the request to the

MA.

Non Public Officers:

By not later than one week of the training

activity, the applicant must:

Fill in section 18 and 19 of the CBSF002.

Fill in the TR#S-9 form (Annex 2.3).

Send the above-mentioned original

documents as listed (in point 23) together

with original receipts to the MA.

Upon receipt of the documentation, the MA will:

a. enter the respective information in the SFD;

b. use the last day of the training activity as the invoice date;

c. raise an Invoice Status Certificate;

d. raise a Structural Funds Commitment for the expenses incurred by the applicant; and

e. forward the documents to Treasury for reimbursement.

The Treasury will reimburse the amounts quoted in section 18 to the respective line

item/bank account referred to in section 19 of the CBSF002.

62

Refer to:

Annex 5.5 - Statement of Expenditure

Annex 2.3 - TRS 9 Financial Identification form

63

6.6.6.6.7777 Audit Tr Audit Tr Audit Tr Audit Trail ail ail ail

Yes

Are details

submitted in

request complete?

Request scrutinised and

processed by MA

Request is considered by

selection committee at

MA

Approval is issued to

applicant

Yes

No

Letter of rejection is

issued to applicant

No Has the request

been approved?

Request for Standard TA

Application Form from MA

Submission of request

including relevant

documentation per item to

MA

64

ANNEXED DOCUMENTS

Annex 5.1 – ERDF Technical Assistance Request Form [Measure 5.1]

Annex 5.2 – ESF Technical Assistance Request Form [Measure 5.2]

Annex 5.3 – CBSF001 for overseas activities

Annex 5.4 – CBSF002 for local activities

Annex 5.5 – Statement of Expenditure

Annex 2.3 [of Annex 2] – TRS 9 Financial Identification form

65

7. Contracting

7.1 Introduction7.1 Introduction7.1 Introduction7.1 Introduction

1. It is important to note that the following are only guidelines. These

guidelines are not intended to substitute in any way the relevant

regulations and guidebooks issued by the DoC. The MA insists that

advice should be sought ON ALL ISSUES relating to contracting from

the DoC.

2. When preparing the tender dossiers, the FB must refer to Public Contracts

Regulations. It is important to note that as of June 2005 LN 177 & LN 178 of

2005 are in force. It is important to note that ONLY tenders issued under

Regulations which are in line with the EU directives are eligible for EU co-

financing.

3. The FB must also refer to the public procurement guidebook which can be

obtained from the DoC.

4. In Accordance with Articles 17-20 of Regulation 177, public contracts with an

estimated value of less than €47,000 (Lm20,000), are not administered by

the DoC. It is the Authority where the FB is located that administers the

contract in compliance with the Public Contracts Regulations.

5. In the case of public contracts above the €47,000 (Lm20,000) threshold, the

responsibility of the tendering process lies with the Department of Contracts

as per relevant schedule of the Public Contracts Regulations. The relevant

tendering templates and a detailed guidebook to Public Procurement are

available at the EU Unit, Department of Contracts, Notre Dame Ravelin,

Floriana. [Refer to Section 2.4 of Chapter 2 of this MoP]

66

7.2 General Principles7.2 General Principles7.2 General Principles7.2 General Principles

6. The following principles must be observed for all contracts:

- tenders are initiated by the FB;

- contracting must be done in line with the approved project proposals and

must be in line with the letter of offer;

- the tender dossier must stipulate all items in detail in order to determine

eligibility of costs;

- irregularities in the contracting process may render the project ineligible

for EU funding;

- the setting up of an evaluation committee (see section 7.5 below);

- bidders – in case of an international tender it is important to note that

even non-EU bidders may bid for tenders. It is important to note that

purchases outside the EU might be subject to taxes if and when

applicable. In this regard, it is recommended that clarifications are sought

from the relevant tax authorities (e.g Customs + VAT prior to the

conclusion of evaluating reports).;

- it is important to ensure transparency and competition e.g different

quotes to choose the best option;

- when preparing the tender dossier, the FB must observe the EU

requirements in particular environment, equal opportunities and

information technology. In executing the tender, the FB must ensure that

the contracted party observes EU & national environment and equal

opportunities legislation. The FB may also recommend ways in which

these requirements are observed;

- splitting of contracts is not in line with the Public Contracts Regulations

and the EU directives on Public Procurement and must be avoided;

- in cases where the content of the tender is subdivided into several lots

and each lot is subject of a single contract, the estimated value of each

lot must be taken into account for the purposes of calculating the

estimated value of the public contract. (However, this rule is NOT

applicable in the case of services or works, when any lot has an estimated

value (net of VAT) less than the thresholds applicable to lots, provided

that the value of such lots does not exceed 20% of the total value of all

67

the lots) ;

- All tenders must be issued in Euros. Ex-ante approval has to be sought

from the Ministry of Finance for contracts to be signed in other

currencies.

- Offers must be submitted in Euros and contracts must be signed in Euros

(unless ex-ante approval has been given to the FB by MFIN to sign the

contract in other currencies and the DoC must be informed immediately).

In the letter of offer the MA will give the indicative amount for the project

in Euros;

- the FB must also prepare a payment schedule and insert it in the special

conditions of the tender dossier;

- the contract shall clearly indicate the contractor’s bank name and

address, account number and any other relevant information, wherein

remittance shall be effected;

- safeguards, such as a bank guarantee must be put in place to recover

funds in the case of advance payments;

- VAT and all other taxes must be quoted separately by the tenderers.

When the contract is signed, the FB must contact the Department of VAT

to fix an appointment to make the necessary arrangements for the

payment of VAT. Please refer to Section 2.24 of Chapter 2 of this MoP for

the contact details of the VAT Department & Section 12.8 of Chapter 12

of this MoP;

- once the contract is awarded and signed, the contract must be scanned

onto the SFD by the FB;

- once the contract is awarded and signed, the Department of Contracts

will indicate that the contract has been finalised on the SFD.

7.3 Contracts that do not exceed Contracts that do not exceed Contracts that do not exceed Contracts that do not exceed €47,€47,€47,€47,000000000000 (Lm20,000) (Lm20,000) (Lm20,000) (Lm20,000) (organisa(organisa(organisa(organisations tions tions tions

under schedule 2 of the Procurement Regulations)under schedule 2 of the Procurement Regulations)under schedule 2 of the Procurement Regulations)under schedule 2 of the Procurement Regulations)

7. Public contracts with an estimated value of less than €47,000 (Lm20,000),

are administered directly by the implementing department and /or authority

(listed under Schedule 2). It is important to note that although such

contracts are not processed by DoC, the Head of the relevant organisation is

responsible to ensure that procurement has taken place in line with

68

legislation. Procurement Officers in the line ministries may be consulted.

8. Tenders will be evaluated by means of an Evaluation Committee

recommended and appointed by the head of the FB responsible for the

contract. FBs should refer to Section 7.5 of this Chapter of further guidance

on Evaluation Committees.

9. Once the contract is awarded and signed, the complete tender dossier

(including dossier, evaluation report, contracts, CVs of the Evaluation

Committee members and any subsequent addenda to the contract) must be

sent to the DoC.

10. The FB must also send a copy of the contract and/or letter of award of a

departmental tender and/or quotations, addenda to the contract where

applicable, to the MA.

11. For additional information on the procedure to follow for contracts with a

value of less than €47,000 (Lm20,000), please refer to section 5.2 of the

Public Procurement Guidebook (a copy of this guidebook can be obtained

from the DoC).

7.4 Contracts that exceed 7.4 Contracts that exceed 7.4 Contracts that exceed 7.4 Contracts that exceed €47,000€47,000€47,000€47,000 (Lm20,000)(Lm20,000)(Lm20,000)(Lm20,000)

12. In the case of public contracts with an estimated value that exceeds €47,000

(Lm20,000), works and supplies:

• if the FB is a contracting authority listed under Schedule 2 of the Public

Procurement Regulations, the contracts within the above mentioned limits shall

be administered by the DoC;

• if the FB is a contracting authority listed under Schedule 3, then the FB will issue,

administer and determine the public contracts in accordance with the provisions

of the Public Contracts Regulations;

69

7.4 1 Administrative Steps7.4 1 Administrative Steps7.4 1 Administrative Steps7.4 1 Administrative Steps

13. The following are administrative steps to be carried out by the relevant stake

holders:

• The FB must initiate tenders and compile the Tender Dossier in accordance with

the Public Contracts Regulations 2003 (LN 299/2003 & LN 377/2004) and the

Public Procurement Guidebooks;

• The FB must compile forms for publication on the EU Official Journal if tender

value exceeds the relevant thresholds. Such forms are available on-line on

www.contracts.gov.mt or www.simap.eu.int;

• The FB must forward the tender dossier and the publication forms (if any), in

soft copy to the EU Unit, Department of Contracts, Notre Dame Ravelin, Floriana,

for vetting. Such documents have to be accompanied by the Commitment Form

which can be found in Section 7.6 of this Chapter. It is important to note that the

Commitment Form must be submitted immediately as the tender cannot be

launched if the Commitment Form is not submitted to DoC. A copy of the

commitment form must be sent to the MA, the Assistant Director (Capital

Expenditure) MFIN and the accounting officer of the respective Line Ministry.

Once there is approval from the DoC, all the above documents must be sent in

both hard and soft copy to the DoC;

• The EU Unit within the Department of Contracts will carry out the vetting and

advise the FB on any amendments if necessary;

• If amendments are required, the FB will take on board such changes and refer

back to the EU Unit for further vetting;

• Once the tender dossier is vetted, or no amendments are required, the EU Unit

will advise the FB to forward thirty hard copies of the tender dossier;

• The EU Unit will take the necessary steps to forward the publication forms to the

Official Journal (where applicable) and also to publish the tender on the

Government Gazette;

• Once the tender deadline elapses, the tender bids are opened in public by the

General Contracts Committee and in the presence of the Chairperson and

Secretary of the Evaluation Committee and scheduled;

• The tender bids or proposals/offers will be forwarded to the evaluation

committee for evaluation;

70

• The FB shall submit an evaluation report, signed by the evaluators and endorsed

by the Head of Department/Agency/Authority concerned to the Director General

of the Department of Contracts, for the consideration of the General Contracts

Committee consideration;

• Once a contractor has been selected but prior to signature of the contract, the

DoC will ask the contractor to reaffirm the contractor’s capacity to undertake the

contract within the stipulated timeframes.

• Upon award of the tender, and when applicable, the EU Unit will publish the

award notice in the Official Journal;

• The DoC will issue a letter of award/contract to the successful bidder copying the

FB. The FB should also consult the website of the Department of Contract to

follow progress on the award of a contract;

• In the case of contracts exceeding the value of €931,750 (Lm400,000) excluding

VAT, and where VAT is not considered an eligible cost, the FB will only pay the

net amount to the contractor. The VAT due on that amount will be settled

directly by the FB to the VAT Department. Where VAT is an eligible cost

(indicated to FB by the MA) the payment to the contractor will be made in full

(with VAT). Guidance should be sought from the MA on how to proceed

with the issue of VAT;

• Once the tendering procedure is completed, the DoC will fill in the tendering

process checklist which is attached to each tender file of the DoC. Once the

checklist is complete, the DoC will send a copy of this checklist to the relevant

programme manager at the MA.

• In the case of departmental tenders, once the tendering procedure is completed,

the FB must send to the EU Unit, Department of Contracts a copy of:

- Tender document

- Evaluation report

- Approval of the evaluation report

- Contract

7.5 Evaluation Committees7.5 Evaluation Committees7.5 Evaluation Committees7.5 Evaluation Committees

14. Tenders will be evaluated by means of an Evaluation Committee (including

departmental tender). In case of Evaluation Committees for tenders above

€47,000 (Lm20,000), the members of the committee are recommended by

71

the Director EU Affairs of the respective Line Ministry and approved by the

DoC. In case of tenders below €47,000 (Lm20,000), the evaluation

committee is recommended and appointed by the FB responsible for the

contract.

15. The Evaluation Committee must consist of at least five people and must have

a chairperson, a secretary and at least 3 evaluators. The chairperson and the

secretary will not have voting rights and the number of Evaluators must

always be an odd number.

16. A detailed Curriculum Vitae on the appropriate template of all Evaluation

Committee members must be submitted to the DoC, stating the expertise of

the selected members. Evaluation Committees should avoid (where possible)

hierarchical relationships between employees.

17. The Chairperson and the Secretary of the Evaluation Committee together

with the General Contracts Committee must be present for the tender

opening session. Following the opening session, all members of the

evaluation committee must be present for all other evaluation sessions.

18. Documentation related to the evaluation process (including C.Vs) should be

retained as an integral part of the project documentation (see Chapter 16

Retention of Documents).

72

7.6 Funds Commit7.6 Funds Commit7.6 Funds Commit7.6 Funds Commitment Formment Formment Formment Form

STRUCTURAL / COHESION FUNDS COMMITMENT FORM

FOR CONTRACTS DEPARTMENT FILE

Original to accompany tender documents in Contracts Department file

Copy to be sent to Director General (Planning & Priorities Co-ordination Division),

OPM

Copy to be sent to Assistant Director (Capital Expenditure), Ministry of Finance

Copy to be sent to the Accounting Officer of the Line Ministry

Measure :

Project :

Tender :

CT Reference (This should be issued by Department of Contracts. However, in case of Malta

Maritime Authority, Water Services Corporation, Enemalta, the Department/Corporation /

Authority’s file reference number should be quoted instead of the CT number) :

With the issue of this tender (estimated at € ___________ excluding VAT), it is

confirmed that the total project cost (estimated at € __________ excluding VAT)

will not be exceeded.

Name and Signature of Project Leader:

Name and Signature of Director, EU Affairs:

Date

Ministry:

73

7.7 Contact Point7.7 Contact Point7.7 Contact Point7.7 Contact Point

Contact person at the DoC is:

Mr. Anthony Cachia

Department of Contracts

Notre Dame Ravelin

Floriana

Tel Nos: 21247686

Fax: 21 247681

Email: anthony.j. [email protected]

���� NB. Proven Irregularities in the tendering process will render the contract

ineligible for funding.

74

7.8 Employment Contracts7.8 Employment Contracts7.8 Employment Contracts7.8 Employment Contracts

19. Services can be contracted either through a service tender (in which case

normal procurement procedures apply) or through employment contracts.

The FBs should note that service contracts usually carry VAT while

employment contracts carry obligations such as social security contributions.

20. If the FB is employing a person on an employment contract for the project

co-financed through Structural Funds, the normal employment procedures of

the FB (which should be documented) should be utilised. The DoC does not

get involved in employment contracts.

21. If the FB employs a person on an employment contract, a clause should be

inserted in the contract that the employment of this person is only for a

specified period (in line with project document)and the contract is non-

renewable.

22. Please refer to Chapter 12 Section 12.6.1 para 16 for payment process of

salaries for persons employed on an employment contract basis.

7.9 7.9 7.9 7.9 Procurement of EquipmenProcurement of EquipmenProcurement of EquipmenProcurement of Equipmentttt

23.When purchasing equipment it is important that the equipment is used for

the specific reasons bought and in accordance with the contract and

conditions of the grant. All documentation in relation to the purchase and

use has to be filed. The following are important things to keep in mind:

� When a FB purchases equipment through Structural Funds it is

imperative that such equipment is kept in working order

throughout and after the project life.

� If any fault results in the equipment, all documentation must

be kept in relation to the repairs and, in the worse case

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scenario replacement of equipment.

� If replaced, both the old and new serial numbers must be

retained and if this equipment is bought from funds allocated

to a grant scheme, the final recipient must inform the Final

Beneficiary in writing accordingly. If equipment is faulty and

replaced by the supplier/beneficiary – whether under

guarantee or not, the replacement must carry out the same

function and be of the same or higher specifications. This is in

line with Article 30(4) the General Regulation.

� The purchasing of equipment that is fully co-financed from

Structural Funds must be exclusively used for the project

implementation. For example computers must contain files and

folders that are related only to the Structural Funds project.

Failure to comply with these rules may lead to financial

corrections to the project.

� In addition, the project leader must also prepare an inventory

list of all the items of equipment that have been purchases

through the Structural Funds project budget. The equipment

and inventory are the responsibility of the FB that has been

granted Structural Funds assistance with which the

procurement has been purchased. The project leader must sign

the inventory and keep it in the project file.

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7.7.7.7.10101010 Late Payments Late Payments Late Payments Late Payments MF Circular 3/2005 MF Circular 3/2005 MF Circular 3/2005 MF Circular 3/2005

24. As of 1 July 2005 LN 233 of 2005 came into force and provides that unless

the period for payment and rate of interest are specified in the contract,

interest at the Central Bank of Malta intervention rate plus 7% shall become

payable automatically after 30 days following receipt of invoice or receipt of

goods or services.

25. Prior to signing a contract, FBs must comply with MF Circular 3/2005 to

ensure that payments for procured goods and services are effected within 30

days. Alternatively, the conditions attached to public tenders should explicitly

indicate the period for payment, as well as the rate of interest payable in the

event of late payment. Close liaison should therefore be maintained with the

Department of Contracts for the inclusion of appropriate clauses during the

preparation of the tender documents. Penalties in general and also those

arising from late payments are not eligible for co-financing.

7.11 Approval of Additional Costs7.11 Approval of Additional Costs7.11 Approval of Additional Costs7.11 Approval of Additional Costs & Addenda to a Contract & Addenda to a Contract & Addenda to a Contract & Addenda to a Contract

7.11.1 Additional Costs to a Contract 7.11.1 Additional Costs to a Contract 7.11.1 Additional Costs to a Contract 7.11.1 Additional Costs to a Contract

26. For any additional costs arising during the implementation of a contract, the

FB must inform the Department of Contracts and the MA at the earliest

possible. When the thresholds for additional costs which are allowed the FB

by the Public Contract Regulations are to be exceeded, the approval of the

General Contracts Committee is required. The FB must present to the

Department of Contracts a detailed report of the additional costs to be

incurred in the contract implementation in question, together with a sound

justification and recommendations. It is to be noted that variations must be

supported by justifiable reasons to prove that unforeseen circumstances were

the cause of the request.

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27. In the case of infrastructural projects which also have a supervisor

overseeing the works, the supervisor must present a report to the FB

together with his/her recommendations on the additional costs to be

incurred. The FB will present both the supervisor’s report as well as the

report prepared by the project leader (who will also make his/her

recommendations).

28. Following the receipt of a report by an independent technical expert engaged

by the Department of Contracts the General Contracts Committee may

approve the additional costs/variations. The FB and/or the supervisor must

prepare a new cost estimate of the contract based on the rates and

quantities approved by the General Contracts Committee. This cost estimate

must then be submitted to the Department of Contracts and an addendum to

the contract will be prepared by the Department, with Annexes if applicable

to be prepared by the FB.

7.11.2 Addenda to a Contract7.11.2 Addenda to a Contract7.11.2 Addenda to a Contract7.11.2 Addenda to a Contract

29. Whenever an agreement is reached between the Department of Contracts,

the FB and a contractor, that necessitates an addendum to a contract, it is

the FB’s responsibility to ensure that the addendum is actually prepared and

signed by the DoC and the Contractor

7.127.127.127.12 Non Non Non Non----Compliance with contractual obligationsCompliance with contractual obligationsCompliance with contractual obligationsCompliance with contractual obligations

30. The Department of Contracts informs that it is important to note that it is the

responsibility of the FB, more specifically of the project leader, to ensure that

a contractor is abiding by the obligations stipulated in the contract. Should a

contractor fail in meeting the contractual obligations, the project leader

should bring this to the attention of the contractor, in writing, and should

also copy the correspondence to the Department of Contracts and to the

respective Programme Manager within the MA.

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31. Should the contractor continue to fail to meet with contractual obligations

and no action by the contractor is taken to rectify these obligations, the FB

may, in the first instance, ask the Department of Contracts to caution the

contractor. Should the contractor persist in failing to abide by the contract

despite having been cautioned, the project leader can initiate the procedure

to implement the necessary penalties as stipulated in the contract. It is

important to note that it is the project leader that must initiate this procedure

and not the Department of Contracts. Penalty payments notified and duly

recorded, are to be deducted from the final payment and the contractor

notified accordingly of all procedures taken.

32. The project leader is responsible to alert all concerned that a contractor is

not abiding by the terms and conditions stipulated in the contractor. The

project leader is obliged to inform the Department of Contracts and the MA

should such a situation arise. It is important that the FB gives an early

warning of such a situation in order to limit any undesirable consequences on

the project. Failure by the FB to raise such concerns could result in the EU

funds being lost due to the short implementation period of the 2004-2006

Programme.

7.17.17.17.13333 Release of Financial Guarantees Release of Financial Guarantees Release of Financial Guarantees Release of Financial Guarantees

33. It is important to note that a financial guarantee is only to be released

following confirmation that all contractual obligations have been fulfilled and

a final completion certificate issued, unless stated otherwise in the conditions

stipulated in the contract. In the case of tenders below the €47,000

(Lm20,000) threshold, the project leader is responsible for the release of the

financial guarantee.

34. In the case of tenders above the €47,000 (Lm20,000) threshold and which

are the responsibility of the Department of Contracts, a financial guarantee is

made payable to the Director of Contractors and is retained by the

Department of Contracts throughout the implementation of the contract and

until a final completion certificate is issued. Upon completion of a contract, it

is the project leader, through the proper channels, that must inform the

79

Department of Contracts that the contract has been completed and that all

obligations have been fulfilled accordingly. The FB cannot undertake any

agreement with the contractor on the release of bank guarantees without

prior consultation with the Department of Contracts. The bank guarantee will

be released by the Department of Contracts in accordance with the

conditions stipulated by the contract and only if it results that all contractual

obligations have been fulfilled. Therefore, it is worth noting the importance

that the FB provides a realistic assessment to the Department of Contracts in

order for the release of the financial guarantee to be authorised.

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8. Monitoring

1. Articles 34, 35, 36 & 37 of the General Regulation deal with the monitoring of

the Structural Funds. Monitoring is an on-going process of examining the

progress of interventions and expenditure under the SPD 2004-2006.

2. Monitoring of the Structural Fund programme is facilitated through the use of

indicators (Article 36 of Regulation 1260/99). These indicators include specific

targets, show the stage reached in terms of physical implementation, results

and impacts and should also show the progress made in relation to the

financial plan. In the Structural Fund Programme For Malta 2004-2006, there

are three types of indicators:

• Output Indicators: these capture the physical output or product activity

undertaken, i.e. that which is directly obtained in exchange for public

expenditure;

• Result Indicators: these measure the immediate benefits of the programme

for its beneficiaries;

• Impact indicators: these capture the longer-term effects of the programme

on a national level.

3. The attainment of the targets of the project is an essential condition

of the grant.

4. The MA must gather statistical and financial information from FBs required

for monitoring of the programme and the individual projects. This will be

done by gathering information through the Structural Funds Database System

and by carrying out on-the-spot checks.

5. The Ministry for Family and Social Solidarity is the IB for ESF i.e. for projects

falling under measures 2.1, 2.2 and 2.3 of Priority 2 and measure 4.2 of

Priority 4 while the Ministry for Rural Affairs and Environment is the IB

EAGGF (Guidance) and FIFG i.e. for projects falling under measures 3.1, 3.2

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and 3.3 Priority 3. These IBs shall conduct monitoring activities with regards

to ESF, EAGGF and FIFG projects on behalf of the MA.

6. There are different levels of monitoring for Structural Funds:

8.1 Strategic Level 8.1 Strategic Level 8.1 Strategic Level 8.1 Strategic Level

8.1.1 The Monitoring Committee 8.1.1 The Monitoring Committee 8.1.1 The Monitoring Committee 8.1.1 The Monitoring Committee

7. The Strategic level of monitoring is dealt with by the Monitoring Committee

which is composed of Government, social partners, NGOs and the European

Commission (as an advisory capacity). The purpose of the MC is to ensure

that the objectives and targets of the measures are being met. The MC will

meet at least once every quarter and the chairperson may convene the MC as

often as necessary. The rules of procedure allow for a written procedure.

8. The main tasks of the MC are:

• to monitor the implementation of Malta’s Single Programming Document 2004-

2006;

• to consider and approve the criteria for selecting the operations earmarked for

financing under the various measures within six months from the date of

approval of assistance by the European Commission;

• to confirm or adjust the Programme Complement, including project selection

criteria, physical and financial indicators (Article 35.3(a) and 35.3(b)Reg.

1260/99);

• to review the progress being made towards achieving objectives and targets

(Article 35.3(c), Reg.1260/99);

• to examine the results of implementation, particularly achievement of the targets

set for the different measures (Article 35.3 (d), Reg. 1260/99);

• to approve annual and final implementation reports (Article 35.3(e),

Reg.1260/99) which are presented to the Monitoring Committee by the Managing

Authority;

• to consider and approve any proposal intended to amend the contents of the

Commission decision on the contribution/allocation of assistance;

82

• to approve the amendments arising from a proposal to the Managing Authority

on its own initiative (Article 35.3(g), Reg 1260/99);

• to propose to the Managing Authority adjustments or review of the Structural

Funds assistance (Article 35.3(g), Reg. 1260/99). Any adjustments to the

assistance shall be made in accordance with Article 34.3;

• to carry out monitoring by reference to physical and financial indicators specified

in the Single Programming Document or Programme Complement in accordance

with Article 36, Regulation 1260/99;

• to ensure compliance with all Community Policies;

• to examine the findings and recommendations in the evaluations of the

assistance programmes, in accordance with Article 40-43, Regulation 1260/99.

The TORs of the MC can be found in Annex 3.4.

8.2 Sectoral Level 8.2 Sectoral Level 8.2 Sectoral Level 8.2 Sectoral Level

8.2.1 The Sectoral Monitoring Sub8.2.1 The Sectoral Monitoring Sub8.2.1 The Sectoral Monitoring Sub8.2.1 The Sectoral Monitoring Sub---- Committees Committees Committees Committees

9. The Sectoral level of monitoring is dealt with by the Sectoral Monitoring Sub-

Committees (SMSC). There are five SMSCs that monitor projects in the

following sectors:

• Environment

• Transport

• Tourism & Enterprise

• Agricultural and Fisheries

• Human Resource Development

10. The SMSCs will be chaired by the Permanent Secretary of the sectoral line

ministry concerned. The Chairperson is to ensure the participation of all

relevant stakeholders, including MGOZ.

11. The SMSCs will:

• monitor the implementation of individual projects under the sector;

• discuss with project leaders the implementation of projects;

83

• check the forecast of each project and revise the forecasts whenever necessary;

• prepare templates of Annexes 6.1 & 6.2 on action to be taken and action taken

by the respective SMSC highlighting issues for the respective sector;

• recommend to the MA the transfer of funds from one measure to another where

applicable;

• propose to the MA substitution of a problematic project with a new project where

applicable;

• support the FBs when the latter presents requests to the MA for changes to

projects and make recommendations on administrative issues when necessary;

• highlight any problems and issues encountered in the implementation of projects

related to the respective sector.

8.3 Territorial Level 8.3 Territorial Level 8.3 Territorial Level 8.3 Territorial Level

8.3.1 The Regional Projects Committee (Gozo)8.3.1 The Regional Projects Committee (Gozo)8.3.1 The Regional Projects Committee (Gozo)8.3.1 The Regional Projects Committee (Gozo)

12. The Regional Project Committee (Gozo) {RPC} is composed of Government,

Social Partners, Corporations and NGOs. The RPC is responsible to follow up

the implementation by the relevant final beneficiaries in Gozo and draws up

quarterly and annual implementation reports (The TORs of the RPC can be

found in Annex 3.5.1).

8.4 8.4 8.4 8.4 DayDayDayDay----totototo----Day MonitoringDay MonitoringDay MonitoringDay Monitoring

13. Day-to-day monitoring is based on a bottom-up approach and by regularly

updating the status of projects through the SFD and the production of

relevant monitoring reports. The input into the SFD and the production of

reports are a condition of the grant.

14. The FB will undertake day-to-day monitoring of the individual projects

through the SFD by updating the financial commitments (both the contracting

and disbursements) and the indicators. It is very important that the FB must

regularly update the financial and implementation status of the project.

84

15. The EU Affairs Director of the Line Ministries direct will also contribute to day-

to-day monitoring of projects that fall under responsibility of the respective

line ministry. The EU Affairs Director is involved in monitoring the financial

commitment due to the fact that the EU Affairs Director must certify

expenses submitted by the FBs.

16. The IBs (where applicable) will monitor, through the SFD, the implementation

process of projects falling under their respective measures. Input of

individual FBs will allow the IBs to register the progress achieved at measure

level both on a financial level as well as on the actual implementation.

17. Through the information inputted in the SFD, the MA will monitor the

implementation schedule of each project. The MA will compare the progress

of the project with the forecasted implementation schedule and indicators.

8.5 Controls 8.5 Controls 8.5 Controls 8.5 Controls

18. The Managing Authority wishes to inform all the bodies implementing and

monitoring projects part-financed by the Structural Funds of the need to

record controls being carried out by the FB on the project.

19. In view of the fact that it is ultimately the Final Beneficiary that is responsible

of the projects, it is important that all project leaders keep in the project file

evidence of any controls they perform (on site or documentary) in order to

ensure that funds are spent in accordance to the letter of offer and in

accordance to the contracts signed. Evidence of controls should always be

signed and dated by the person carrying out the control. These may take the

form of eg, reports of on site visits, reports of coursework done (in case of

training), and reconciliations prior to payments, controls over timesheets,

minutes of meetings etc.

20. Any evidence of checks done to ensure the actuality and accuracy of a

payment is to be kept in the project file and available to all stakeholders that

are responsible to check the activities performed by the project.

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9. Structural Funds Database Reporting

1. The Structural Funds Database (SFD) is a centrally administered system that

captures information at different levels of the administration across all relevant

line Ministries, authorities and entities. The data gathered by the SFD is exported

from the system by means of interface files and reporting.

2. The reports that are issued by the system can be clustered into two main groups.

3. The first type of reporting is the reports that are sent to the European

Commission (EC) at regular intervals or on preset commitments. Electronic

reporting files to the EC include the following interface files;

� The programming files include:

� Financial Table for the Single Programming Document by priority and by year.

� Financial Table for the Programme Complement by priority and by measure.

� The payment request interface file; (generally requests by each fund are made 3

times yearly)

� Financial table attached to the Payment Request by priority and measure.

� The forecast interface file; (to be submitted by the end of April for each Nth year

and year N+1)

� Forecasts of applications for payments for Programme Complement.

� The annual/final report interface files; (to be submitted by end of June of the

following year)

� Financial table for annual/final implementation report by priority and measure.

86

4. The second type of reporting is used to facilitate the local process particularly

with respect to payments and monitoring purposes. On a day to day basis, the

FB must input into the Structural Funds:

• Financial data

• Monitoring indicators

• Regular executive summary

5. Kindly note that more system-specific information on reporting is found in the

SFD manual.

87

10. Reporting

10101010.1 On.1 On.1 On.1 On----going Progressgoing Progressgoing Progressgoing Progress Reports Reports Reports Reports

1. The FB must regularly update the project implementation status in the Structural

Funds Database. At intervals, the respective Programme Manager at the MA will

collate a status report on each project through the Structural Funds Database.

2. Project Summary Updates must be updated by the FB on a bi-annual basis within

the stipulated deadlines as the SFD will deny access after the deadline.

3. Should the MA deem that a project leader has provided insufficient reporting, the

Programme Manager responsible for the Measure must contact the project leader

and request that the report is amended accordingly.

10.1.1 Biannual progress reports10.1.1 Biannual progress reports10.1.1 Biannual progress reports10.1.1 Biannual progress reports and updates and updates and updates and updates

4. The Programme Managers at the MA will prepare a project progress report. This

project progress report is filled in once every six months.

10101010.1.2.1.2.1.2.1.2 Priority 4 Priority 4 Priority 4 Priority 4

5. In the case of projects falling under measure 4.1 and 4.2 of Priority 4, in addition

to the above reporting requirements, the secretariat of the RPC will prepare a

quarterly and an annual implementation report on each measure, (in line with

Article 3 of the Covenant between the MA, IB and RPC). The report must be in

Word format.

This report must contain:

- an aggregate per measure of indicators and payments;

- progress on implementation of projects;

- financial forecasts of projects;

- any problems/issues encountered in the implementation of the projects;

88

- information on publicity measures for Gozo projects;

- if required, make recommendations to the Monitoring Committee.

The report should reach the MA after it is approved by the RPC.

Please refer to Annex 1.4 for checklist for Bi-Annual Progress reports and RPC Quarterly

Reports.

10101010.2 Reports of Sectoral Monitoring Sub.2 Reports of Sectoral Monitoring Sub.2 Reports of Sectoral Monitoring Sub.2 Reports of Sectoral Monitoring Sub----CommitteesCommitteesCommitteesCommittees

6. There are five Sectoral Monitoring Sub-Committees:

• Agriculture & Fisheries which will be chaired by the PS MRRA (or

designate),

• Tourism & Enterprise which will be chaired by the PS (Information,

Tourism & Sustainable Development) OPM (or designate)

• Human Resource Development & Employment which will be chaired

by PS Ministry of Education, Culture, Youth and Sport MEDC (or

designate),

• Environment which will chaired by the PS MRRA (or designate),

• Transport which will be chaired by the PS MITC (or designate).

10101010.2.1 SMSCs Reports.2.1 SMSCs Reports.2.1 SMSCs Reports.2.1 SMSCs Reports

7. The secretariat of the respective SMSC will issue a request to all project leaders

to provide an update on their respective projects prior to the SMSC meetings.

8. Once the project leaders have provided this update, the secretariat of the

respective SMSC will provide the information to the members of the SMSC for

discussion.

9. Following the SMSC meeting, the secretariat of the respective SMSC will fill in

Annex 6.1 listing the actions to be taken by the SMSC. The secretariat of each

the SMSC will forward this template together with the minutes of the meeting to

the MA within ten workings days of the SMSC meeting.

89

10. The secretariat to the SMSC must ensure that follow-up action is taken. Prior to

the subsequent SMSC meeting, the secretariat of each SMSC must fill in Annex

6.2 listing the actions taken by the SMSC as a result of the previous SMSC

meeting.

11. The SMSC must also submit an impact report to the MA highlighting the impact

that the Structural Funds projects falling under the responsibility of the

respective SMSC are having on the respective sector. The SMSC’s Impact Report

Guidelines can be found in Annex 6.3. The SMSC must also monitor the sectoral

progress achieved through the analysis of the indicators. Draft reports should be

sent and endorsed by stakeholders prior to being adopted by SMSC and Chair

and sent to PPCD.

Please refer to Annex 1.5 for checklist for SMSC Reports.

10101010.3 Annual Reports.3 Annual Reports.3 Annual Reports.3 Annual Reports

12. Article 37 (1) of Council Regulation 1260/99 requires the MA to submit to the

European Commission, after approval of the MC, an annual implementation

report not later than six months after the end of each full calendar year of

implementation. It is important that the annual report contains information that

is coherent with the annual certification.

10101010.3.1 Contribution by the various players.3.1 Contribution by the various players.3.1 Contribution by the various players.3.1 Contribution by the various players

Final Beneficiaries:

13. The information inputted into the SFD by the FBs on the individual projects will

be utilised in preparation of the annual reports.

Intermediate Bodies:

14. In the case of Priorities 2, 3 and Measure 4.2 of Priority 4, the relevant IBs shall

provide the MA with the following input respectively:

90

- a detailed explanation of any significant problems encountered during the

course of the implementation of the assistance - summary of any significant

problems encountered and measures taken to rectify them including any

organisational and procedural problems encountered by the administration,

the difficulties encountered in implementing measures and, steps taken to

resolve them;

- input into the Structural Funds Database throughout the lifetime of the

projects and upon completion, the progress in the implementation of the

priority and measures for ESF, EAGGF and FIFG in relation to their specific

targets, with a quantification, wherever and whenever they lend themselves

to quantification of the output, result and impact indicators;

- Performance Indicators.

- The following table must be filled in by the IB at Measure Level:

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Progress in the implementation of measures

Description of Measures

C. Financial Implementation of the Measure as at 31/12/2005

Monitoring of the committed funds by the Managing Authority and payments

executed by Treasury as at 31/12/200 in Euros

Measure Year Eligible Costs Realised

Committed % Payments %

2004

2005

2006

Total

A. Measure

Description of the Measure

Financial Plan at Measure level and in Euros

Total

Investment

(including

VAT)

Eligible

Costs

EU Co-

financing

Malta Co-

financing

Private

Contribution

(where

applicable)

B.

92

Certified Public Expenditure and Interim Payments Received from the Commission

in Euros

Year Certified Public Expenditure Interim Payments

Received from the

Commission

Both EU & Malta

Share

EU Share

2004

2005

2006

Total

C.1 Eligibility of Expenditure

C.2 Revenue-Generating projects

C.3 Complementarity with pre-accession and Cohesion Fund projects

93

D. Indicators

Indicators Expected results (as in PC) Actually realised as

31/12/200

Output

Results

Impact

E. Comments and observations on the procedural, physical and financial

advancement

Where figures are not available, the IB will have to state when they will be

available;

- for assistance co-financed by the ESF, there should be a description of the

contribution (qualitative, quantitative and financial) of the programme to

European Employment Strategy and National Reform Programme for

Employment actions. There should be a description of how the three

horizontal priorities (local environmental development, equal opportunities for

women and men and employment potential of the information society), as

defined in Article 2 of Regulation (EC) No 1784/99 on the ESF, have been

94

taken into account;

- In the case of EAGGF the IB should provide the STAR Committee tables in

accordance with Article 61 (1) of Commission Regulation 817/2004 of 29 April

2004 laying down detailed rules for the application of Council Regulation (EC)

No 1257/1999 on support for rural development from the European

Agricultural Guidance and Guarantee Fund (EAGGF). Additional information

may be required and the MA will contact the IB accordingly;

- In the case of FIFG the IB should provide the Infosys in accordance with

Article 1 of Commission Regulation 366/2001of 22 February 2001 laying

down detailed rules for implementing the measures provided for in Council

Regulation (EC) No 2792/1999.

���� NB: This information shall be forwarded in a Word formatted document

with the above data and submitted to the MA within the stipulated deadlines

set by the MA.

Regional Project Committee:

15. In the case of Priority 4, the Secretariat of the RPC will prepare an annual

implementation report on measure 4.1 & 4.2 on behalf of the RPC. The report

should include:

- actions taken to ensure the smooth and efficient implementation of projects;

- actions taken with regards to recommendations made by the MC and the MA;

- recommendations of the RPC;

- information about the publicity measures for Gozo projects.

���� NB: This report will be prepared in Word format and sent to the MA within

the stipulated deadlines set by the MA.

95

Paying Authority:

16. The PA will collate the following financial information as applicable:

- Information concerning financial engineering techniques;

- Financial Implementation of the Programme:

• in accordance with Article 32 (7) of Regulation 1260/99 the Paying

Authority shall submit a forecast by end of April of each full calendar

year;

• interim request payments submitted to and received from the European

Commission - date of receipt;

• advance payments received from the European Commission;

- Progress in the implementation of priorities and measures: - Financial

implementation of the Measure at 31/12/200N - Figures indicated must be

consistent with those presented in the payment requests made to the

Commission. With reference to the Commission's letter n. 108715 of

13.08.2002, expenditure declared in the annual report and certified by the

MS may be reconciled if, for both, reference is made to the date when such

payment was entered into the accounts of the PA.

The above information will be utilised by the MA for the annual report. The PA will

forward this information to the MA by mid-February of each calendar year.

Malta Environment & Planning Authority:

17. With respect to the annual report, MEPA will draw up its contribution regarding

the impact of the programme on environment and to what extent

recommendations agreed upon by the SMSCs have been followed up by the

relevant stakeholders.

Internal Audit & Investigations Directorate:

18. Audit and Controls – in line with the Commission’s Communication on

simplification, the annual audit report on controls prepared in terms of the

96

requirements laid down by Reg. 438/2001 may form part of the Structural Funds

Annual Implementation Report and submitted as an Annex to the Annual

Implementation Report.

Managing Authority:

19. The MA will compile an annual implementation report on progress achieved on

the Programme in relation to all four Structural Funds. This report is compiled on

the basis of information supplied by the various stakeholders and the SFD

administered by the MA.

20. The draft report must be presented by the MA to the MC for approval (Article

34.1 of Regulation 1260/99).

21. Upon approval by the MC, the MA will submit the annual report to the European

Commission within six months of the end of the calendar year (30th June of every

year) to which the report relates to.

22. The Commission can make recommendations as part of the review. The

Commission will send the recommendations to the MA.

23. Following consultations with the relevant bodies, the MA prepares a draft

detailed response to each recommendation made by the Commission (Article

34.2 of Regulation 1260/99).

24. The MA submits the draft responses to the MC for approval. The MC addresses

the recommendations and response. The MC exercises its discretion whether to

implement the response as proposed or to vary the response. Once the MC

approves the draft responses, the MA submits the final responses to the

Commission.

Please refer to Annex 1.6 for checklist for Annual Reports.

10101010.4 Final Reports.4 Final Reports.4 Final Reports.4 Final Reports

25. The MA prepares a final report (containing information similar to that of the

97

annual reports) for the period 2004-2006. This final report must be submitted to

the European Commission by end-June 2009. The same procedure to prepare

the annual reports will apply for the preparation of the final report.

Please refer to Annex 1.7 for checklist for Final Reports

98

11. Evaluation

11.1 Overview11.1 Overview11.1 Overview11.1 Overview

1. In the framework of EU interventions, evaluations are instruments aimed at

assessing and improving the performance of projects, programmes, and policies.

Evaluations are independent analysis whereby the ultimate goal is to improve

design, management, coordination or implementation of programmes and

projects.

2. Articles 40, 41, 42 & 43 of Regulation 1260/1999 deal with the evaluation of

expenditure of Structural Funds. In order to gauge its effectiveness, Community

structural assistance is subject to evaluations which are designed to appraise the

impact of the assistance with respect to the objectives set out and to analyse its

effects on specific structural problems.

11.2 Evaluation 11.2 Evaluation 11.2 Evaluation 11.2 Evaluation criteriacriteriacriteriacriteria

3. All evaluations must address five key evaluation questions:

� Rationale for the intervention or programme ;

� Continued relevance of the intervention;

� Effectiveness of the intervention;

� Efficiency of the intervention;

� Impact.

Im p a c ts

U ti l i tyS u s ta in a b i li ty

S o c ie tyE c o n o m yE n v iro n -m e n t

P ro g ra m m e

E v a lu a tio nR e le v a n c e E ff ic ie n c y

E ffe c t iv e n e s s

O u tp u tsIn p u tsO b je c t iv e s

O u tc o m e s / R e s u lts

N e e d sp ro b le m s

is s u e s

99

4. In the context of EU structural interventions, a number of evaluations should be

carried out over the life of a programme. Regulation 1260/1999 states that

evaluation will take place at distinct phases:

� Ex-ante evaluation

� Mid-term evaluation

� Ex-post evaluation largest

11.3 Ex11.3 Ex11.3 Ex11.3 Ex----ante Evaluationante Evaluationante Evaluationante Evaluation

5. The Member State has primary responsibility for the ex-ante evaluation. The ex-

ante evaluation is incorporated in the SPD.

6. The purpose of the ex-ante evaluation is to provide an analysis of socio-

economic needs as well as an independent assessment of the strategy outlined in

the SPD, the rationale for the investments proposed and the plan’s consistency

with EU and national policies.

7. The Ex-ante Evaluation is the responsibility of the MA. The latter issues a tender

for independent evaluators to carry out this evaluation.

11.4 Mid Term Evaluation11.4 Mid Term Evaluation11.4 Mid Term Evaluation11.4 Mid Term Evaluation

8. There will be no real mid-term evaluation for this programming period. However,

a reduced evaluation focusing on efficiency was undertaken in 2005, the results

of which are being utilized for the next programming period. The MA is

responsible for contracting/carrying out this self-evaluation.

11.5 Ex11.5 Ex11.5 Ex11.5 Ex----post Evaluationpost Evaluationpost Evaluationpost Evaluation

9. The Commission (in partnership with the Member State) has primary

responsibility for the ex-post evaluation. The objective of the ex-post evaluation

is defined and focuses on impact. The ex-post evaluation is carried out by an

independent evaluator within three years of the end of the programming period.

100

10. The Ex-post evaluation by independent evaluators must be completed by the end

of June 2009 at the latest and must examine the utilization of resources and the

efficiency, effectiveness and impact of the expenditure.

11. The MA will work with the Commission on ex-post evaluation.

12. The European Commission will issue a tender for independent evaluators to carry

out the ex-post evaluation.

11.6 Recom11.6 Recom11.6 Recom11.6 Recommendationsmendationsmendationsmendations

13. Evaluation reports should state recommendations. Evaluators will take account of

the cost implications of recommendations with due regard to the opportunity

cost of public expenditure in general. The evaluators will present their report and

recommendations to the Commission and the Managing Authority.

14. The Managing Authority will consult with the Final Beneficiaries, the Intermediate

Bodies and other relevant stakeholders concerned by the recommendations of

the evaluators to discuss how the recommendations should be addressed.

15. The Managing Authority will prepare a response paper for the Monitoring

Committee to this effect. Once the response paper is approved, the Managing

Authority will forward this response to the Commission.

101

12 Financial Management and Payments

12.1 Rate of Exchange 12.1 Rate of Exchange 12.1 Rate of Exchange 12.1 Rate of Exchange

1. In April 2005 Malta joined the ERM II, the Exchange Rate for Malta is

EUR1.00 = MTL0.429300. This rate of exchange is fixed in the SFD.

12.212.212.212.2 Co Co Co Co----financingfinancingfinancingfinancing

1. The financing of all projects benefiting from EU Structural Funds will have an

element of national co-financing. The project will be financed through a

percentage of EU funds and a percentage of national funds.

2. The EU and Malta co-financing rates for each priority are agreed upon with

the Commission, and are stated in the Single Programming Document (at

priority level) and the Programme Complement at measure level. The rate of

EU and Malta co-financing of the respective project, which can vary from that

of the respective measure under which the project is being considered (e.g.

depending on outcome of feasibility studies). The EU and Malta co-financing

rates of the selected project will be stated in the letter of offer issued to the

final beneficiary. The co-financing rates as stated in letter of offer are to be

applied by the Final Beneficiary for payments.

3. The letter of offer will also stipulate the source of the national co-financing

and VAT, particularly where these have to be provided by the organisation’s

own funds (as agreed with MFIN). In such cases it is important for line

Ministries to ensure receipt of the relevant part payment (VAT and /or

national co-financing) from the relevant FB prior to making the full payment

(as per invoice) to the contractor.

4. In the case of projects under Measures 1.3, 3.1, 3.2 and 3.3, the EU and

Malta grant will cover only a part of the net cost of the projects presented

under the approved aid scheme. The remaining net cost of the projects will

be covered by the funds of the selected private sector enterprises. In addition

102

the full VAT cost of the project will be paid for by the selected private sector

enterprise over and above the private co-financing share of the project. The

letter of offer (from the MA to the FB) will indicate the EU, Malta and private

co-financing rates.

5. In the case of such schemes the FB (managing the grant) is to ensure that

the co-financing rates of the individual operations are clearly communicated

to the final recipient in the grant agreement.

12.2.1 Sav12.2.1 Sav12.2.1 Sav12.2.1 Savings to the Projectings to the Projectings to the Projectings to the Project

6. It is important to note that as a general rule any savings to a project will go

back to the Structural Funds Programme 2004-2006 as savings to the

measure under which the project has been co-financed. In this regard the FB

is to inform the MA of any savings as soon as these occur.

7. The FB cannot utilize any savings without prior authorization from the MA. If

the FB needs to utilize the savings, the FB should first inform the MA in

writing that there are savings from the project and make a request to utilise

the savings.

12.312.312.312.3 Pre Pre Pre Pre----financingfinancingfinancingfinancing

8. In general public sector projects will be pre-financed by Government in the

Ministries’ budgetary allocations. Each project will be specifically mentioned in

the Financial Estimates and FBs and Line Ministries are to ensure that the

correct sub-line and item is debited when raising commitments. In this case it

is of utmost importance that all procedures are correctly and timely followed

by stakeholders to enable Malta to recover the funds from the European

Commission

12.312.312.312.3.1 Budgetary Allocation.1 Budgetary Allocation.1 Budgetary Allocation.1 Budgetary Allocation

9. The expected annual cash flow of each project will be provided for in the

Financial Estimates of the respective year under Line Item 7173 of the Line

103

Ministry responsible for the selected final beneficiaries. Each project will have

its own sub-item. There will be two sub-items within the project allocation;

sub-item 1 will contain the EU allocation while sub-item 2 will contain the

Malta allocation and the VAT cost (where the latter is not considered an

eligible cost). In the case where VAT is considered an eligible cost, the total

cost of the project will be deducted proportionately from the two sub-items

(EU and Malta) as per co-financing rate.

10. Note: In case where the national co-financing element and the VAT cost will

be provided for from the budget of the final beneficiaries, Line Item 7173 of

the respective Line Ministry will contain only funds under the EU allocation

(the Malta component will be registered as O). The Malta component will only

be credited by the FB (as per para 3 of section 12.1 above).

11. In cases where Accounting Officer foresees a shortfall of funds for a particular

year, the MA should always be informed at once (copying the Director Budget

Office {MFEI}) giving the necessary details (i.e. amount remaining and amount

required {in cash} and for which project). In addition, the accounting officer

will require the approval of the Budget Office within the Ministry of Finance in

case of a:

� transfer of funds from an ‘EU Funds’ sub-item to a ‘Malta Funds’ sub-items;

� provision of additional funds under a sub-item, in respect of which no

compensatory savings are identified.

The approval from Budget Office is not required in case of a:

� transfer of funds from an ‘EU Funds’ sub-item to another ‘EU Funds’ sub-

item;

� transfer of funds from a ‘Malta Funds’ sub-item to another ‘Malta Funds’

sub-item; and

� transfer of funds from a ‘Malta Funds’ sub-item to an EU Funds’ sub-item.

12. Permanent Secretaries are reminded that the Structural Fund vote cannot be

accessed for any other reason/operation other than those approved and stated

in the letter of offer for each project.

104

13. Non-public organizations will be informed in the letter of offer regarding the

location of the funds allocated for their projects.

12.412.412.412.4 E E E Eligibility of Costsligibility of Costsligibility of Costsligibility of Costs

14. Eligible project costs incurred after 1st January 2004 may be debited to the

project budget as long as they satisfy the following criteria:

• costs are approved costs as per letter of offer and listed in the approved

budget breakdown (annex 1 of letter of offer). In case of doubt, contact the

Programme Manager at the MA or IB (where applicable);

• costs have been procured in line with Public Procurement Regulations.

12.512.512.512.5 Invoice Payment Process Invoice Payment Process Invoice Payment Process Invoice Payment Process

15. Stakeholders involved in the payment process (FB, Line Ministry {EU

Affairs Director and Accounting Officer} and Treasury) are to ensure

that the payment process moves in the shortest time possible since

Malta will only be able to draw funds from the Commission on the basis

of payments effected to the contractor/final recipient. It is the

responsibility of the project leader to ensure that invoices and the relevant

documentation are sent in time and correctly (first time round) in order not to

slow down the process.

105

Functions

Responsible

Body

1

Issuing/ Receiving Invoices

In principle, all contracts/invoices/payments shall be made in Euros (€).5

The contractor shall issue the invoice according to stipulations in the

contract and deliver it to the Final Beneficiary.

���� ‘The contractor shal l c learly indicate on the invoice his bank name and address, account number and any other relevant information, wherein remittance shall be effected. ’ Whenever the FB receives an invoice for the first time from a contractor/final recipient, the Treasury requires that the FB should request that the contractor/final recipient fills in a Financial Identification Form (FIF) (draft template Annex 2.3, TR/S-9), wherein the FB will provide the Treasury with adequate information on the contractor/final recipient for the proper execution of a bank credit transfer. This solution is applicable to both local and cross-border payments. The Treasury reserves the right to contact directly the final recipient to obtain the information required in the FIF template.

In every invoice the VAT element is to be presented separately.

The FB must ensure that the final recipient includes in the invoice the :

• VAT Number • The bank name • Full address of the bank • IBAN number

Contractor

(sending)/

Final

Beneficiary

(receiving)

Contractor/

Final Recipient

(sending)/

Final

Beneficiary

(receiving)

106

• Swift Code BIC and account number

���� In case of financial grants to private sector enterprises, the selected enterprise on acquisition and payment of goods is to present a receipt (not an invoice given that the grant is on a reimbursement basis) clearly indicating the net cost and the VAT element. For transactions over €2500 (Lm1,000), payments are to be effected either by cheque or bank transfer6. This permits a clear audit trail when tracing a payment done.

Final recipient

(sending)

/Final

Beneficiary

(receiving)

2

3

Regular Payments

The FBs and the Line Ministry are to ensure that invoices are received and

payments processed in the shortest time possible as the MA may issue

proposed schedules for the start of the verification process, as the case

may arise.

Certifying Works/Services/Goods

The Final Beneficiary shall certify work prior to forwarding the invoice

and Invoice Status Certificate (ISC) to the Line Ministry. (The ISC is

printed from the EU Structural Funds Database and a sample is attached

under Section 12.6 of this chapter).

In this regard, the Final Beneficiary shall:

a. validate the invoice – validation implies that the data on the invoice is

correct. The Final Beneficiary shall ensure that the following data items

are included in the invoice raised and that the information is accurate

and correct:

- date (as agreed in contract);

-line item;

- quantity;

Final

Beneficiary

Final

Beneficiary

107

- amount;

- the VAT element is included in the bill as a distinct component of the

total7;

- the invoice is addressed to the Final Beneficiary and issued by the

company that is awarded the contract. Invoices should not be issued by

subsidiary companies. The company that issues the invoice must

be identical to the name of the company listed in the contract.

b. ensure that the invoice is based on and reflects the schedule of

payments as stated in the respective contract (which contract is based

on the 'Letter of Offer' issued by the Managing Authority);

c. verify the delivery (including quality) of the supplies, works and/or

service (except where the invoice refers to an advance payment);

d. confirm compliance with Community and national rules, especially

Regulation 448/2004 on Eligibility;.

The Final Beneficiary shall complete the checklist on the ISC [the checklist

is a means of confirming that all the above checks (a-d) were carried out.

The ISC checklist can be found in Section 12.6 of this chapter] and sign it.

The original invoice must be certified correct, signed and stamped and

ISC are transmitted to the Line Ministry;

Before transmitting the ISC to the Line Ministry, the Final Beneficiary shall

mark the status of the ISC as complete in the Insertion of Invoice and

Certify Works FB sections in the invoice payment process on the EU

Structural Funds Database and scan the Invoice and place it on the EU

Structural Funds Database. Invoices and ISC should not be sent to the

Line Ministry prior to updating of the SFD. The invoice and ISC should be

sent to the respective Line Ministry together with all the necessary

documentations.

Note: In case where the Malta co-financing and VAT cost is being

provided for from the final beneficiary’s own budget, the final beneficiary

108

is to debit the Malta amount and the VAT cost of the project from its own

budget and credit the respective project’s Malta sub-item cost of the

respective Line Ministry (see point 3 under section 12.2 above). It is

important that this payment reaches the Line Ministry in time with the ISC

in order not to delay full payment to contractors by Line Ministry.

4 Authorising Payment

The Line Ministry shall confirm the checks made by the Final Beneficiary

and sign the invoice and the ISC prior to authorising payment.

The signature on the Invoice Status Certificate by the Line Ministry entails

that the Line Ministry:

a. confirms that the Final Beneficiary carried out the relevant checks and

has completed the ISC as required;

b. confirms that adequate controls exist at the Final Beneficiary to ensure

that the technical implementation of the project is being monitored;

c. completes the relevant checklist on the ISC;

d. ensures that the commitment and debit advice are raised through DAS.

This task shall be carried out by the accounting officer but the EU

Affairs Directorate shall ensure that the commitment has been made:

Tasks and Responsibilities – Accounting Officer

Step 1 - Request Commitment

The commitment request routine is the first stage of the commitment cycle wherein, accounting officers in Line Ministries must insert ample description of the goods or services required by the final beneficiary, the prospective contractor and the total cost involved. Although, in principle, a single commitment cannot accommodate more than one contractor, even if the supply or service may have similar characteristics, the Accountant General may direct otherwise, as referred to in Article 28 of Chapter 174 of the Laws of Malta. However, payments

EU Affairs

Directorate of

the line

Ministry

Accounting

Officer of the

line Ministry

109

expressed in foreign currency can only be dealt with individually. Accounting officers must keep in mind that, whenever the final recipient is a non VAT registered body, the vendor number must be replaced by ‘CBM0001 (ADVANCES)’. A typical example can be the payment of grants or schemes.

Step 2 - Procure Commitment

The procure commitment routine enables accounting officers to ascertain that the details of the commitment are correct before authorisation is granted for advancing the commitment to the next stage.

Step 3 - Soft Commitment

The soft commitment shall be considered as a pivotal stage in the whole process of the commitment cycle. In this stage accounting officers must allocate the relative expenditure to the specific account – Structural Funds account in the estimates (7173 under capital expenditure). Special attention needs to be taken into account whenever expenditure cannot be covered by existing provisions allocated under the budgetary estimates for that purpose. Any potential budgetary implications should be immediately brought to the attention of the competent authorities (MA/IB/copied to the Budget Office MFIN) for remedial action. Failure to properly manage EU related spending may result in severe delays in payments.

Step 4 - Hard Commitment

This final routine sets the type of purchase document required and consolidates the commitment cycle. In order to prevent the misuse of Structural Funds budgetary allocations, the creation of a new transaction type was envisaged. As a result, a new code, specifically for Structural Funds related payments, was introduced within the system – 08. It is therefore recommended that, prior to proceeding to the ‘print document’ routine, accounting officers ascertain that the correct document type is selected. Accounting officers are responsible for the propriety, regularity and accuracy of the payments they authorise. In this regard, desk instructions are laid out to give guidance on the principles to be observed prior to submitting documents to the Treasury for payment execution. Furthermore, Accounting Officers shall:

���� check that a valid invoice or similar demand for payment has been presented and this corresponds to the commitment. Whenever significant disparities are recognised, accounting officers are responsible for taking remedial action, and if necessary, produce a fresh commitment at once.

���� ascertain that the provisions on the treatment of VAT has

110

been thoroughly observed. Further guidance can be sought from the Treasury.

���� where a single commitment is created in order to accommodate more than one contractor, a detailed list (refer to draft template Annex 2.1 {TR/S-1}), giving appropriate account of every individual payment, shall complement the commitment document.

���� debit the EU share of the net cost of the invoice under 7173 EU sub-item and the Malta share of the net cost plus total VAT cost under 7173 Malta sub-item. The EU and Malta share are indicated in the letter of offer and the Structural Funds Database (except where VAT is considered to be an eligible cost when the procedure outlined under point 7 of section 12.2.1 above)

Step 5 – Transmission of documents

The line Ministry shall send the original Invoice, debit advice and ISC to

the Treasury authorising payment. A copy of these documents shall be

kept by the Line Ministry. Treasury reserves the right to refer documents

back to the relevant Line Ministry for correction.

Before transmitting the ISC to the Treasury, the Line Ministry shall mark

the status of the ISC as complete Confirmation Line Ministry in the

Invoice Payment section of the EU Structural Funds Database.

The EU Affairs Directorate is responsible for:

• liaising with the accounting officer with regard to the preparation

of the required documents,

• signing the relevant checklist on the ISC (already signed by the

FB); and

• ensuring that TR/S-1 (Annex 2.1) has been duly filled in;

• transmitting all documents to the Treasury.

A copy of the ISC is attached in Section 12.6 of this chapter.

EU

Affairs

Directorate

111

5

Effecting Payment

Following the receipt of the relevant documents from the Line Ministry, the Treasury shall:-

���� confirm that the original invoice and ISC are validated by the final beneficiary and EU Affairs Directorate respectively.

���� ensure that the expenditure has been approved by the accounting officer and the commitment is in accordance with any agreed contract or other documentation governing the transaction.

���� determine the correctness of the commitment. In this regard, the commitment and invoice must have common recipient names, similar VAT identification numbers and analogous amounts. In those exceptional circumstances where a commitment is made out with the normal procedures, i.e. payment of grants, a corresponding list of (recipients), as set out in draft template Annex2.2 TR/S-2), must be included.

���� check that the claim and/or invoice is arithmetically correct.

���� ensure that the invoices comply appropriately with legislative requirements particularly to those contained in the Financial Administration and Audit Act8 and the Value Added Tax Act9.

���� ensure that the commitment has been raised out of the appropriate incidence of charge – Budget line 7173 (Capital)– and that the VAT treatment is correct.

���� ascertain that any VAT payable directly by the line Ministry on behalf of the contractor has in effect been settled (in line with the last bullet under point 11 of section 7.4.1). A sufficient proof of payment must be provided promptly.

���� confirm that the line Ministry has performed the required data entry in the EU Structural Funds Database.

On completion of these checks and provided that the above conditions are adequately met, the Treasury shall proceed with the relevant payment. The Treasury will:-

���� certify the Invoice Status Certificate;

���� create the required document for transferring funds from the Public Account to the ad-hoc CBM Funds account;

���� prepare the necessary documents for payment execution on the prescribed CBM forms – Debit Advice; Funds Transfer and Bank Draft;

���� determine the authorised signatories in accordance with approved bank mandates;

���� prior to submitting documents to the Central Bank of Malta

Treasury

112

(CBM), through an automated IT system, consolidate all payment documents in one statement. At the point of entry, a unique number will be allocated to every document. Upon receipt of documents the CBM shall acknowledge and return a copy of the statement to the Treasury;

The Treasury, after making the relevant checks in line with the national

procedures, will instruct the Central Bank of Malta (CBM) to debit the

relevant account and issue a CB debit advice.

The Treasury shall scan the Invoice Status Certificate (signed by Final

Beneficiary, the line Ministry and Treasury) and copy it into the EU

Structural Funds Database.

The Treasury shall keep the original invoice and ISC in the relevant file. A copy of the signed ISC will be scanned by Treasury and posted on the SFD.

Note: In case of financial grants to private sector enterprises, after reimbursing the private enterprises with the EU and Malta contribution, upon written request from the final recipient, the Treasury Officer is to make a copy of the receipt and certify (through signature and Treasury stamp containing name of officer and Treasury) that the copy is a true copy of the original. The Treasury will then send the copy to the selected private sector enterprise.

6 Role of the Central Bank of Malta

The Central Bank shall issue a CBM debit advice for all relevant

payments and forward it to the Treasury

CBM

7

Suspension/Interruption/Withholding of Payment

The responsibility for necessary corrections rests with Line Ministries and,

should there be proposals for payment which do not meet these

requirements or which depart from the normal rules or procedures, the

Treasury reserves the right to refer documents back to the relevant Line

Ministry for correction.

Should an irregularity be detected funds may be suspended, interrupted

Treasury

113

or payments may be withheld.

8 Post-Payment

Following the receipt of the CBM Debit Advice, the Treasury shall:

���� update DAS as necessary;

���� perform a bank reconciliation exercise as quickly as possible and certainly not later than 15 clear days following the date of receipt of the statements of accounts;

���� ensure that all accounting records and supporting documents are maintained appropriately and in an organised manner as to facilitate audit controls.

���� insert the relevant data (including uploading the complete ISC) in the SFD immediately upon receipt of the debit advice issued by the CBM confirming payment. This information is available for review by all bodies and is particularly important in relation to the Statement of Expenditure. Each Statement of Expenditure printed from the EU Structural Funds Database shall only include expenditure for which the notification of issue of the CBM debit advice is inserted in the database.

���� send a copy of the CBM debit advice to the Paying Authority.

Treasury

9 Bank Transfers vs Cheques

Rather than effecting payments directly out of the Departmental Accounting System, the Treasury has opted to disburse and account for payments in individual bank accounts of the contractors/recipients by bank transfer. Nevertheless, these accounts shall form part of the Public Account proper. On the basis of the information available, the Treasury shall instruct the CBM to effect a bank credit transfer. In case where a bank transfer is not possible, the Treasury will instruct CBM to issue a cheque.

It is important to note that it is highly recommended that FBs strongly encourage the use of bank credit transfers as this will ensure a smooth flow of funds and an efficient arrangement for the transmission of payments.

It is important to note that the issue of cheques will only be carried out in exceptional circumstances and with prior approval of the Accountant General.

In this respect, further guidance regarding banking matters can be specified at contracting stage. In practice, Special Conditions – Terms of Payment, can ask for the minimum requirements needed to ensure an adequate level of banking information for the execution of payments.

Treasury

114

10

Receipt

It is important to note that once the Treasury instructs the CBM to issue payment via a bank credit transfer to the contractor / final recipient (latter in case of schemes), the Treasury will issue a letter to the /contractor /final recipient informing that payment has been effected indicating:

• the CBM reference number of the transaction; • the value date; • the name of the Bank and the bank branch; • the account number; • the contractors address; • the Line Ministry responsible for the project; • and title of the project.

In the case of payment being effected by a cheque, the Treasury will ask the contractor / final recipient to collect the cheque by hand from the Treasury and the contractor / final recipient will be asked to sign a receipt which confirms that payment has been received.

It is the responsibility of the FBs to ensure that upon receipt of payment contractor issues a receipt confirming that payment has been effected. The receipt should include VAT where applicable.

It is important to note that the contractor / final recipient must issue a receipt within 3 to 5 days of receiving payment.

Treasury

Treasury

Final

Beneficiary

Contractor /

Final Recipient

115

Managing Authority Paying Authority Intermediate Bodies

ESF, EAGGF,

FIFG

Final Beneficiary

Contractor

Central Bank

payment

All relevant documents available on SFD

Invoice/Rec

receives invoice, performs

checks & signs ISC

Line Ministry

confirms checks, issues

debit advice,signs ISC &

authorises payment

Treasury

instructs CBM to effect

payment & signs ISC

12.612.612.612.6 Payment Process Payment Process Payment Process Payment Process

116

12.612.612.612.6.1.1.1.1 Payment Process Payment Process Payment Process Payment Process –––– Salaries Salaries Salaries Salaries

16. In case of payments consisting of salaries (e.g. project management), in

principle salaries payable to contractees should be processed in the normal

manner (from the salaries vote of the organisation). Every month there

should be a replenishment from the Structural Fund vote of the project

concerned (under which the person has been contracted) to the salaries vote

of the organisation (from where the payment to the contractee was made) so

that ultimate impact is on the Structural Fund item. For ad hoc instructions

please refer to the Treasury contact person (section 2.8 of chapter 2 of this

MoP).

17. In the case of FBs employing persons on an employment contract basis to

implement the Structural Funded project, the FB will issue the salary of such

people from the FB’s salary vote or account. The FB should then prepare (as

often as the FB wants but at least once every quarter) an Invoice Status

Certificate together with proof of payment of salary for reimbursement form

the Treasury. In the case of ministries/departments, the Treasury will only

transfer money from the 7173 vote to the salary vote of the FB concerned. In

the case of a corporation, the Treasury will issue a reimbursement for the

7173 vote to the corporation’s account.

117

12.12.12.12.7 7 7 7 Invoice Status Certificate (SAMPLE)Invoice Status Certificate (SAMPLE)Invoice Status Certificate (SAMPLE)Invoice Status Certificate (SAMPLE)

INVOICE STATUS CERTIFICATE (ISC) (SAMPLE) Invoice Details

Certificate Date Invoice Date

Invoice Number VAT Number

Contractor

Address

Accounts Number Bank

Invoice Amount (MLT) VAT Amount (MLT)

Remarks

Invoice Lines

Description / Remarks Amount VAT Total Amount

Contract Information

Contract Level Number Contract Date

Guarantees

Date / Remarks Type Executed Date

Project Execution Indicators

Indicator

Status

Target

Payment Request Information

Planned Date

Conditions

Remarks

Checklist – Final Beneficiary

Is the original Invoice attached? Yes/No

Validation of Invoice:

� Is the invoice based on a contract which is in line with the 'letter of

offer' issued by the Managing Authority? Yes/No

118

� Does the invoice reflect the schedule of payments in the respective

contract?

Yes/No

� Is the contract still valid? Yes/No

� Are the following details on the Invoice all correct: date, line item,

quantity, amount, contractor's details (including bank account name and

number), VAT element? Yes/No

Delivery of product / service:

� Unless the invoice is for an advance payment, have the

works/products/services been delivered according to contract

specifications? Yes/No

Compliance with National and Community rules:

� Have all national and Community rules, including the Public Contracts

Regulations and Regulation (EC) 448/2004 on Eligibility been complied

with? Yes/No

� Is the line item on the invoice eligible according to Regulation (EC)

448/2004? Yes/No

Signature: Date:

Checklist – Line Ministry / EU Affairs Director

Ensuring that the Final Beneficiary carried out the required checks:

� Has the final beneficiary carried out the required checks and

completed the Invoice Status Certificate (ISC) as required? Yes/No

� Have all National and Community rules, including the Public Contracts

Regulations and Commission Regulation (EC) 448/2004 on eligibility

been complied with? Yes/No

� Does the payment correspond to a valid contract? Yes/No

� Has the Final Beneficiary uploaded the invoice or equivalent into the

SFD? Yes/No

� Has the Final Beneficiary confirmed the status of the Insertion of

Invoice and Certify Work as complete on the SFD? Yes/No

Raising the Commitment (Debit Advice):

� Has the debit advice been raised through DAS by the respective

Accounting Officer of the relevant Ministry? Yes/No

119

� Does the debit advice and the invoice have common recipient names,

common corresponding VAT identification numbers and analogous

amounts? Yes/No

Confirmation of Checks by Line Ministry on SFD

� Upon confirmation of the above, has the Line Ministry confirmed the

status of Confirmation by Line Ministry as complete on the SFD? Yes/No

Signature: Date:

Checklist – Treasury

Checking the Invoice and ISC:

� Have the Final Beneficiary and the EU Affairs Director completed the

ISC and signed it? Yes/No

Confirming the Commitment:

� Is the debit advise issued by the Accounting Officer in the Line

Ministry accurate? Yes/No

� Has the commitment been produced out of the correct incidence of

charge - budget line? Yes/No

� Is the invoice or equivalent in line with national rules? Yes/No

SFD:

� Have the final beneficiary and the EU Affairs Director marked the

status of the ISC as complete in the relevant section of the SFD? Yes/No

Instructing CBM to transfer funds:

� Were the required payment documents prepared and forwarded to the

CBM for payment execution? Yes/No

Uploading the ISC:

� Has the complete ISC with all signatures been uploaded onto the

database by the Treasury? Yes/No

Signature: Date:

120

12.812.812.812.8 Treatment of VAT Treatment of VAT Treatment of VAT Treatment of VAT

18. Before finalising a contract, the FB should refer to the VAT presentation which

was delivered by officers of the VAT Department on 3rd December 2004 to see

under which section of the VAT legislation, the contract falls. The VAT

presentation can be downloaded from the PPCD website: http://ppcd.gov.mt and

click on Useful Links and Downloads.

19. It is highly recommended that the FB contacts the VAT Department to seek

clarifications on issues related to VAT/ to make the necessary arrangements for

the payment of VAT.

20. VAT is not always an eligible expense. In cases where VAT is considered an

eligible expenditure, it can be reclaimed from the Programme according to the

co-financing rates established for the individual project and is to be included in

the verification and certification process referred to in Chapter 13 of this MoP.

21. If VAT is not an eligible expense, the FB should note that the VAT component of

every payment should be charged to the ‘Malta Funds’ line item of the project. In

such cases the VAT component is excluded from the verification and certification

processes referred to in Chapter 13 of this MoP.

22. In the case of contracts with a value of €931,750 (Lm400,000) (net of VAT) and

over and where VAT is not an eligible expense, falling under all Measures, the FB

should contact the VAT Department to make the necessary arrangement for VAT.

23. The FBs are to ensure that foreign contractors that should be registered in Malta,

have in fact registered and have a VAT certificate.

121

24. Guidance notes on VAT issues can be downloaded from www.vat.gov.mt For

further assistance on the issue of VAT, Final Beneficiaries are kindly asked to

contact:

Mr. Joseph Sammut (Director General)

VAT Department

Centre Point Building

Ta Paris Road Birkirkara CMR 02

Tel: 21 499311

Fax: 21 499365

Email: [email protected]

Website: www.vat.gov.mt

25. Any clarifications should be submitted in writing (even e-mail) and should be

copied to the relevant Programme Manger at the MA, IB PA the DOC and

Assistant Director (Capital Expenditure) MFIN.

122

13 Drawdown of Funds from the European

Commission

13.1 Letter of Offer13.1 Letter of Offer13.1 Letter of Offer13.1 Letter of Offer

1. The Letter of Offer issued by the Managing Authority shall require Final

Beneficiary to implement the project in a way which is compliant with

Commission Decision C 2004(2130) approving the SPD and Community and

national rules, especially rules concerning public procurement, eligibility, State

Aid, protection of the environment and equality of opportunities. Please refer to

Annex 4.8 for sample of the letter of offer.

13.2 Statement of Expenditure and Declarations3.2 Statement of Expenditure and Declarations3.2 Statement of Expenditure and Declarations3.2 Statement of Expenditure and Declarations

11113.2.1 Statement of Expenditure by project and Declaration: 3.2.1 Statement of Expenditure by project and Declaration: 3.2.1 Statement of Expenditure by project and Declaration: 3.2.1 Statement of Expenditure by project and Declaration:

13.2.113.2.113.2.113.2.1.1.1.1.1 Statement of Expend Statement of Expend Statement of Expend Statement of Expenditure by project:iture by project:iture by project:iture by project:

2. FBs and Line Ministries are to ensure that invoices are received

and payments are processed in the shortest time possible. The MA

will periodically issue proposed schedules for the verification/certification process.

���� Failure to ensure that payment procedures are initiated and

processed efficiently will result in Malta losing funds.

3. Upon request, the Final Beneficiary shall prepare a Statement of Expenditure

(which is downloaded from the SFD) including the payments for which a CBM

debit advice was issued since the previous verification. The Statement of

Expenditure shall be prepared for every project separately10.

4. The Statement of Expenditure shall be accompanied by a Declaration (section

13.2.1.2 of this Chapter) stating that all relevant tasks and checks were fulfilled.

Both the Statement of Expenditure and the Declaration shall be signed by the

Final Beneficiary:

123

The signature entails that:

a. no irregularity concerning the expenditures included in the Statement

of Expenditure was detected;

b. the relevant checks concerning each invoice were carried out and that

the Invoice Status Certificate for each expenditure included in the

Statement of Expenditure was adequately completed and filled in (a

copy of the ISC including signatures of the Final Beneficiary, the Line

Ministry and the Treasury will be available on the EU Structural Funds

Database).

5. The signed Statement of Expenditure by project prepared by the Final

Beneficiary shall be sent to the Intermediate Bodies for ESF, EAGGF (Guidance)

and FIFG projects and to the Managing Authority for ERDF projects within the

established deadlines.

124

13.2.1.1a13.2.1.1a13.2.1.1a13.2.1.1a Statement of Expenditure by P Statement of Expenditure by P Statement of Expenditure by P Statement of Expenditure by Project (Sample):roject (Sample):roject (Sample):roject (Sample):

Statement of Expenditure - End of ……. Project Level

Program: Single Programming Document

Fund:

Measure:

Project:

Date:

Project Level Status:

Measure Level Status:

Fund Level Status:

Programme Level Status:

Invoice No. Payment

Date

Payment

Reference

Amount

(€)

VAT

Eligible

(€)

VAT

Not Eligible

(€)

Total

(€)

125

TOTAL

Fund Generic Type Fund Code Amount (€)

Community

National Public

TOTAL

126

13.2.1.213.2.1.213.2.1.213.2.1.2 Declaration by the Final Beneficiary Declaration by the Final Beneficiary Declaration by the Final Beneficiary Declaration by the Final Beneficiary

I declare that:

• all products/works/services relevant to the attached Statement of

Expenditure by project have been delivered according to contract

specifications;

• all expenditures were incurred for the implementation of the project entitled

____________________________, project number ___________________,

of Measure ______ of the Single Programming Document;

• all expenditures were incurred in terms of the letter of offer issued by the

Managing Authority;

• no irregularity concerning the expenditures included in the attached

Statement of Expenditure was detected;

• the provisions in the audit trail pertaining to my organisation were

maintained;

• the relevant checks concerning each invoice were carried out and that the

Invoice Status Certificate for each expenditure included in the Statement of

Expenditure was adequately completed and filled in;

• national and Community rules were followed and all expenditures included in

the Statement of Expenditure are eligible ;

• all relevant documents are filed according to Chapter 16 of the Manual of

Procedures – Retention of Documents.

_______________________ _______________________

Project Leader Date:

127

13.2.2 Statement of 13.2.2 Statement of 13.2.2 Statement of 13.2.2 Statement of Expenditure by measureExpenditure by measureExpenditure by measureExpenditure by measure and Declaration and Declaration and Declaration and Declaration

13.2.2.1 Statement of Expenditure by Measure: 13.2.2.1 Statement of Expenditure by Measure: 13.2.2.1 Statement of Expenditure by Measure: 13.2.2.1 Statement of Expenditure by Measure:

6. The Intermediate Bodies for ESF, EAGGF (Guidance) and FIFG and the Managing

Authority for ERDF shall prepare a Statement of Expenditure by Measure

(downloaded from the EU Structural Funds Database) based on the statements

by project prepared by the FB.

7. The Statement of Expenditure by Measure shall be signed by the Intermediate

Bodies for ESF, EAGGF (Guidance) and FIFG and by the Managing Authority for

ERDF. The Statement of Expenditure will be accompanied by a Declaration

signed by the Intermediate Body for ESF, EAGGF and FIFG and the Managing

Authority for ERDF (a copy of the Declaration is attached in Section 13.2.2.2).

8. The signature on the Declaration entails that:

a. the amounts stated in the Statement of Expenditure by measure are

an aggregation of all invoices for which a CBM debit advice was

issued during the relevant period and corresponds to the statements

of expenditure by project prepared by the line Ministry;

b. the audit trail was maintained (from when the invoice was issued by

the contractor until payment from the Central Bank of Malta) – that

there is an ISC supporting each invoice;

c. where on-the-spot checks were carried out, the reports for these

checks are available on the EU Structural Funds Database.

9. All Statements of Expenditures (by project and by measure) in case of ESF,

EAGGF (Guidance) and FIFG and the relevant Declarations shall be forwarded to

the Managing Authority by the relevant IB once statements of expenditure from

the FBs are received.

128

10. The Managing Authority shall forward all Statements of Expenditure and

Declarations (by project and by measure) to the Paying Authority.

11. NOTE: Failure to comply with the deadlines of the verification process

deadlines will result in Government of Malta not being able to recover

funds already spent.

129

13.2.2.1a Statement of Expenditure by Measure (Sample):13.2.2.1a Statement of Expenditure by Measure (Sample):13.2.2.1a Statement of Expenditure by Measure (Sample):13.2.2.1a Statement of Expenditure by Measure (Sample):

Statement of Expenditure - End of ………. Measure Level

Program: Single Programming Document

Fund:

Measure:

Date:

Measure Level Status:

Fund Level Status:

Programme Level Status:

Accepted Statement of Expenditures – Projects

Project Details SOE

Date

Amount

(€)

VAT

Eligible

(€)

VAT

Not Eligible

(€)

Total

(€)

TOTAL

Rejected Statement of Expenditures – Projects

Project Details SOE

Date

Amount

(€)

VAT

Eligible

(€)

VAT

Not Eligible

(€)

Total

(€)

TOTAL

130

Fund Generic Type Fund Code Amount (€)

Community

National Public

Private

TOTAL

Statement of expenditure for Measure as at

Printing Date:

Signature:

131

13.2.2.2 13.2.2.2 13.2.2.2 13.2.2.2 Declaration by the Intermediate Body/Managing AuthorityDeclaration by the Intermediate Body/Managing AuthorityDeclaration by the Intermediate Body/Managing AuthorityDeclaration by the Intermediate Body/Managing Authority

I declare that:

• the amounts included in the Statement of Expenditure by measure are an

aggregation of all invoices for which a CB debit advice was issued during the

relevant period and corresponds to the Statements of Expenditure by project

prepared by the line Ministry;

• the audit trail was maintained and an Invoice Status Certificate supporting

each Invoice has been uploaded onto the Structural Funds Database;

• no irregularity concerning the expenditures included in the attached

Statement of Expenditure was detected

• national and Community rules were followed and all expenditures included in

the Statement of Expenditure are eligible;

• where on-the-spot checks were carried out, the reports for these checks are

available on the EU Structural Funds Database;

• all relevant documents are filed according to Chapter 16 of the MoP –

Retention of Documents.

_______________________ ______________________

Head IB/MA Date:

132

13.3 Verification Process3.3 Verification Process3.3 Verification Process3.3 Verification Process

Final Beneficiary Prepares SOE

by project &

declaration

Managing Authority

prepares SOE by measure for ERDF,

declaration* & ensures congruency

with SOEs by project

Intermediate Bodies

prepares SOE by measure for

ESF /EAGGF /FIFG,

declaration* & ensures

congruency with SOEs by

project

Is it an ERDF project ?

N

Y

Managing Authority

Forwards all SOEs by project

and measure to the Paying

Paying Authority

* The declaration entails that the MA (ERDF) or IB (ESF, FIFG, EAGGF) have ensured that the

audit trail in the payment process.

133

13.4 Certification 13.4 Certification 13.4 Certification 13.4 Certification

12. The Paying Authority shall perform the certification process according to

Article 9 of Regulation (EC) 438/2001, every time a request for reimbursement is

made to the Commission. Such request for payment shall be made at least three

times a year.

This process shall be undertaken in two stages which in effect are inter-related:

13.4.1 – Validation

13. The Validation Officer in charge of a particular fund within the EU Paying

Authority shall:

a) Review all relevant documentation, namely:

� Statements of Expenditure by measure and by project and the

attached Declarations;

� the invoices and Invoice Status Certificates;

� the reports on the on-the-spot checks carried out by the

Managing Authority [or the Intermediate Body on its behalf for

ESF, EAGGF and FIFG].

b) Print out the Statement of Expenditure by fund including all

measures for all Priorities [based on Annex II of Regulation

438/2001] from the EU Structural Funds Database and ensure:

� that every expenditure in the Statement of Expenditure is

supported by the Statements of Expenditure by measure and by

project and the relevant Declarations provided by the Managing

Authority and Intermediate Bodies;

� that a CBM debit advice has been issued for every expenditure

therein;

� that every expenditure was actually effected within the eligibility

134

period;

� that every expenditure was incurred in operations that were

selected for funding and are in line with the letter of offer;

� that every expenditure relates to measures for which all State

Aid has been formally approved, where relevant;

� compliance with all relevant national and Community rules,

especially Regulation 448/2004 on eligibility.

14. Once the above points have been satisfied, the validation officer fills in the

relative checklist (Annex 1.8 Checklist for Certification Stage I), signs and dates

it. The checklist together with the relevant documentation is submitted to the

Assistant Director who makes the necessary counter checks and signs the

checklist. All the relevant documentation is then passed on to the Certifying

Officer to prepare the Certificate and Application for Payment in accordance with

Annex II of Regulation 438/2001.

13.4.2 - Certification

15. Following the first stage, the PA-Certifying Officer shall issue the Certificate and the Application for Payment in accordance with Annex II of Regulation 438/2001.

16. The Certifying Officer shall draw up the Certificate of Expenditure against the

Statement of Expenditure and Declarations. Prior to drawing up the Certificate,

he/she has to be satisfied that operations are progressing in accordance with the

objectives laid down in the decision and with the provisions of Regulation

1260/99 particularly with regard to:

• Compliance with the provisions of the Treaty and instruments adopted

under it with Community policies, in particular the rules on

competition, Procurement regulations, Environmental protection, and

elimination of inequalities and the promotion of gender equality

(Article 12)

• Application of management and control procedures to the assistance

• Availability of all the supporting documents for a minimum period of

three years following payment of the balance by the Commission

(Article 18(6) of the Regulation)

135

• The programme complement/annual report has been sent to the

Commission by the MA

• If any recommendations on management have been made by the

Commission under Article 34.2, and whether these have been

followed;

• If any requests for corrective measures on controls have been made

by the Commission under Article 38.4, and whether these measures

have been applied;

• None of the certified expenditure has been suspended under Article

39.2;

• None of the certified expenditure comes under a measure containing

state aid that has not yet been approved by the Commission.

17. Without prejudice to the on-the-spot checks which the PA Certifying Officer may

carry out from time to time, such assurances would emanate from the

documentation and declarations submitted by the MA and the IBs.

18. The PA Certifying Officer shall also complete the Application for Payment (Annex

II of Regulation 438/2001). The PA Certifying Officer shall ascertain the status

of:

• The Programme Complement and the date when it was adopted;

• The latest annual report/final report on implementation (Article 37 of the

General Regulation)

• Any follow-up to recommendations for improving the monitoring and

management arrangements made by the Commission under Article 34(2)

of the General Regulation. ;

• Follow-up to requests for corrective measures under Article 38(4) of the

General Regulation .

19. Other requirements that the PA Certifying Officer has to take account of are:

• Decisions of the MA and the MC are consistent with the total amount

of Fund contribution to the priorities concerned;

• Whether certified expenditure has been suspended pursuant to Article

39(2) of the General Regulation.

136

20. Finally the PA Certifying Officer has to deduct any recoveries effected since the

previous certified statement of expenditure. It has to be ensured that account of

such recoveries are taken in the Statement of Expenditure and Certificate being

drawn up and that the Appendix for recoveries (Annex II of Regulation

438/2001) is duly completed and attached to the former documents.

21. The PA Certifying Officer shall complete the Certification Checklist (Annex 1.9

Checklist for Certification – Stage II) and endorse accordingly.

22. The Statement of Expenditure by fund, the Certificate and the Request for

Payment shall be sent to European Commission through the EU Structural Funds

Database.

23. Subject to available funding, the Commission shall make interim payments to the

relative bank account at the Central Bank of Malta within no more than two

months of receipt of an acceptable payment application from the PA.

It is important to point out that the verification and certification process is the

basis on which the claim for reimbursement of funds can be made to the EU

Commission. Thus all bodies involved in this process are to ensure that the steps

outlined above are followed in a correct and transparent manner.

24. Errors committed may result in delays in the certification process which could

have serious implications on the automatic decommitment (n+2) of the funds.

137

Certification Process: EU Paying Authority Certification Process: EU Paying Authority Certification Process: EU Paying Authority Certification Process: EU Paying Authority

Stage I - Validation

Receives SOEs and declarations

from MA, generates SOE by Fund

from SFD,

Review SOEs by Fund and ensures

congruency with SOEs received

from MA

Stage II - Certification

Prepares Certificate and

application for payment and

transmits to Commission

Transfer of Funds

Financial management of certified

claims and transfer of funds

effected by the Commission

138

13.5 Payment from the European Commission13.5 Payment from the European Commission13.5 Payment from the European Commission13.5 Payment from the European Commission

25. Payments from the European Commission can consist of:

• Payment on account

• Interim payment

• Payment of the balance

26. Payment on Account - the Advance Payment for this Programming period

amounts to 16% - paid in 2 instalments, 10% in the first year and the balance of

6% of the commitment when the SPD is approved by the Commission (article

32.2 of the General Regulation) in the second year. Payments on account are

made to the PA per Fund. After this initial payment is effected, all future claims

from the EU must be based on certified expenditure incurred.

27. If no payment application is made (i.e., if there is no evidence that the

programme is being implemented) within 18 months of the Commission’s

decision [Art. 31(2) of the General Regulation], all or part of the payment on

account must be repaid by the PA to the Commission (article 32.2 of the General

Regulation)

28. Interim Payments - Interim Payments are made by the Commission on the basis

of certified expenditure applications from the PA and are subject to a number of

conditions, including the submission by the Managing Authority of the annual

implementation reports and mid-term evaluation being submitted at the

appropriate times. Interim payments are made to reimburse the Government

with the EU component of the actual expenditure incurred by final beneficiaries

and certified by the Paying Authority.

29. The Commission has indicated that, as far as possible, payments should be

grouped three times a year, the last application being submitted by the PA not

later than 31st October each year. Payments are based on expenditure at Fund

level and at the co-financing rate indicated in the Programme Complement.

139

30. The PA must ensure that the advance plus interim claims do not exceed 95% of

the EU allocation per Fund.

31. Final Balance - The final balance of 5% is paid once the Paying Authority submits

a certified statement of expenditure following the submission of the final

implementation report by the Managing Authority. An independent statement of

assurance (winding-up declaration) summarizing the adequacy of control checks

carried out is also required for closure of the programme (articles 32.4 and 38.1

(f) of Council Regulation 1260/99). The winding up declaration is complied by the

IAID.

32. The PA must ensure that the final payment request is made within 6 months of

the deadline for payment laid down in the decision granting a contribution from

Funds.

33. The PA must ensure that ALL payments received by Malta are recorded in the

SFD.

13.6 Transfer to Central Government Revenue13.6 Transfer to Central Government Revenue13.6 Transfer to Central Government Revenue13.6 Transfer to Central Government Revenue

34. Since the Constitution of Malta stipulates that all money received by the

Government of Malta has to be accounted for in the General Public Account,

upon receipt of payment from the Commission, the PA ensures that:

• It issues an official letter authorizing the CBM, in conjunction with the Treasury

Department, to debit the CBM Account and credit the Government’s Revenue

Account in the appropriate revenue Line item;

• The official letter bears a double signature as a security requirement, of the

persons authorized to perform such duty in relation to the PA Head and the

Director General Finance and Administration or those Public Officers delegated

with the authority to perform such tasks in the absence of the former two;

• The transfer of Funds through a “Transfer Schedule of Payments” is effected;

• And subsequent “Receiving Schedule of Payments” evidencing the above

mentioned transaction shall be kept recorded in the relevant PA file.

140

13.7 Forecasts13.7 Forecasts13.7 Forecasts13.7 Forecasts

35. In accordance with Article 32(7) of Regulation (EC) 1260/99, a forecast of

payments for the current year and the following year will be sent to the

Commission not later than 30 April of each year. This exercise will be carried out

with input provided by the MA.

141

14 Audit & Control

14.1 Introduction14.1 Introduction14.1 Introduction14.1 Introduction

1. This section is concerned with financial control procedures for EU co-financed

expenditure. The framework for proper financial management, control and audit

is set out in Council Regulation (EC) No 1260/99 and Commission Regulation

(EC) No. 438/2001.

2. Internal Control – It is Management’s responsibility to put in place and maintain

arrangements (i.e. control systems) to ensure the proper management of the

Funds. It is the responsibility of each management level in the cascade (FB, Line

Ministry, IB, MA, PA) to ensure that there are adequate internal control systems

not only at their own level, but also at the level below.

14.2 Financial Control Mechanisms14.2 Financial Control Mechanisms14.2 Financial Control Mechanisms14.2 Financial Control Mechanisms

3. Drawing down financing under the Structural Funds requires that proper

mechanisms of financial control are put in place. Member States must also certify

declarations of expenditure and ensure these are accurate and keep the

Commission informed of measures taken to prevent, detect and correct

irregularities (refer to Reporting on Irregularities, Section 15.7 of Chapter 15 of

this MoP).

4. Systems audit and verification checks are required to trace transactions and

validate the declared outputs and expenditure from a project – a clear audit trail

is established that allows reconciliation of amounts certified to the Commission

with individual expenditure records and supporting documents at various

administrative levels (e.g. project, measure, priority). The audit trail was

formulated by the MA with the support of the Internal Audit & Investigations

Directorate (IAID). The objectives of the audit trail ensure that the business

procedures utilized follow the steps as described in this MoP.

142

5. When carrying out an audit, auditors must verify the effectiveness of the

management and control systems and selectively verify, on the basis of risk

assessment, expenditure declarations made at the various levels of the cascade.

14.314.314.314.3 First Level of Control & On the spot checks First Level of Control & On the spot checks First Level of Control & On the spot checks First Level of Control & On the spot checks

6. In accordance with Article 4 of EC Regulation 438/2001 and as part of the 1st

level control, on-the-spot-checks will be carried out by the MA, the IB (on behalf

of the MA), the PA and the FBs (in case of Aid Schemes). The on-the-spot checks

will focus on the administrative, financial (verification of payments), technical,

publicity aspects and physical aspects of the project (where applicable). This is

specified in the on-the-spot check template which can be found in Section

14.3.6, 14.3.7 & 14.3.8 of this Chapter.

7. In the case of Aid Schemes, the FB will carry out an on-the-spot check on their

respective Final Recipients. A physical on-the-spot check is not required for every

invoice the Final Recipients claims for reimbursement, however checks should be

carried out on a regular basis and on 100% of the projects having received

assistance under the schemes by the end of the project. The MA and the IB may

also carry out checks on Final Recipients/contractors in conjunction with the FB.

8. In the case of EAGGF (Guidance) and FIFG projects, the IB is to check a sample

of projects implemented by the Final Recipients. At the same time the IB is to

make sure that the Final Beneficiary performs a complete check on-the-spot of

the projects implemented by the Final Recipients. This is carried out in order to

support the declarations being certified by the Final Beneficiary as per Invoice

Status Certificate. These checks should be carried out on a regular basis and by

the end of the programme all projects having received assistance under the

schemes are to be checked.

9. FBs are highly encouraged to develop their own template in accordance to the

aid schemes being managed by the respective FB. The template in Section 14.3.8

(spot checks on FRs) could be used as a guideline. Further more this template is

to be filled in by the MA/IB when carry out their own independent on-the-spot

checks.

143

10. When carrying out on-the-spot checks, the MA or IB (on behalf of the MA) must

ensure that all the requested information in the on-the-spot checks template is

duly filled in.

11. The controller must ensure:

� that the delivery of products and/or services has been carried out

� compliance with the audit trail and the retention of all necessary

documentation (see Chapter 16, Retention of Documents).

� compliance with Community and national rules throughout the implementation

of the projects

� compliance with regulations on information and publicity, state aid,

procurement, environment and equal opportunities.

12. The checklists in Sections 14.3.6, 14.3.7 & 14.3.8 of this Chapter, shall be used

by the Managing Authority and/or the Intermediate Bodies in accordance with

Article 4 of Regulation (EC) 438/2001 during the verification process.

13. On-the-spot checks may be carried out throughout the lifetime of the project.

• The MA/IB shall inform the FB that an on-the-spot check will take place at least

one day in advance;

• The template used during the visit is to be sent to the FB with the notification

as to help the FB preparing for the visit.

14. The on-the-spot check is carried out in the presence of the FB.

15. For planning and preparation of the checks, the following tasks have to

be considered:

• Gathering information about the project from the Structural Funds Database;

• Gathering all necessary information from the file kept by the MA/IB:

- Contents of the project;

- Letter of offer issued by MA;

- Financial commitments and payments already made (through

SFD);

144

• Information in writing to the FB at least one day in advance about the

proposed date for on the spot check and the required documents to be

presented for checks;

• Contact relevant authorities, (for example the Department of Contracts/

Treasury) for update on project status;

• Go through the Structural Funds Database and gather information on the

expenditure of the project;

• Go through previous on-the-spot report and take note of previous

recommendations to verify that these have been followed up by the project

leader.

16. The following shall be taken into consideration when carrying out on

the spot checks:

14.3.1 On-the-spot checks

17. The MA/IB shall ensure that the project is being implemented in respect to sound

financial management and to ensure that products/supplies/services are being

delivered. The on-the-spot checks shall cover the administrative, financial,

technical and physical aspects through the following:

• copy of application and relevant correspondence;

• original letter of offer;

• original letters of any agreed changes to the project;

• copies of documents required if procurement does not exceed €2500

(Lm1,000) as listed in Chapter 16 of this MoP - Retention of Documents;

• copies of documents required if procurement does not exceed €2500

(Lm1,000) but does not exceed €6000 (Lm2,500) as listed in Retention of

Documents Chapter 16 of the MoP;

• documents required if tenders falls under Schedule 2 of Public Contracts

Regulation and below the €47,000 (Lm20,000) threshold as listed in

Retention of Documents Chapter 16 of the MoP;

• documents required if tenders fall under Schedule 2 of Public Contracts

Regulation and above the €47,000 (Lm20,000) threshold as listed in

Retention of Documents Chapter 16 of the MoP;

145

• documents required for tenders falling under Schedule 3 of Public

Contracts Regulation as listed in Retention of Documents Chapter 16 of

the MoP;

• a copy of all invoices;

• a copy of the Invoice Status Certificates (ISC).The ISC should be filled in

and signed by the relevant bodies;

• original letter of guarantees (where applicable)

• a scanned copy of the completed Statements of Expenditure and attached

declarations;

• inventory of equipment;

• documentation required in case of second hand equipment as listed in

Chapter 16 of this MoP - Retention of Documents;

• documents required in case of training as listed in Chapter 16 of this MoP

- Retention of Documents;

• publicity records as listed in Chapter 16 of this MoP - Retention of

Documents;

• documents required in case of Business Support Projects as listed in

Chapter 16 of this MoP - Retention of Documents;

• State Aid documents as listed in Chapter 16 of this MoP - Retention of

Documents;

• Documentation required in case of Aid Schemes as listed in Chapter 16 of

this MoP - Retention of Documents;

• Copies of Executive Summaries;

• Reports on irregularities;

• Reports on irregularities (Nil Return);

The officer conducting the checks will have to make sure that the delivery of

products/supplies/services is in line with:

• Eligibility rules

• Community policies (environment, equal opportunities and state aid)

• Publicity

• Established timeframes for conclusion of project;

• Schedules of the contracts;

• Issuing of invoices and payments;

• Payment Process;

146

• Verification Process;

• Disbursement schedules.

14.3.2 On-the-Spot Checks on IBs

18. The MA reserves the right to carry out on-the-spot checks on the IBs. The MA

may carry out a documentary on-the-spot check on the MRAE IB and the ESF IB.

However, it is important to note that the ESF IB may be subject to another on-

the-spot check given that the ESF IB is the FB for TA under Measure 5.2. In this

case the ESF IB will be subject to the on-the-spot checks referred to in Section

14.3.6 of this chapter.

19. On-the-spot checks may be carried out throughout the lifetime of the

programming period.

The MA shall inform the IB that an on-the-spot check will take place at least one

day in advance;

20. The following shall be taken into consideration when carrying out on-the-spot

checks:

• Copy of project application forms and relevant correspondence;

• Copy of feasibility studies and Environment Impact Assessments where

applicable;

• Copy of the Letter of Offer;

• Copy of any agreed changes to projects;

• Original/copies of Delegation of Authority where applicable;

• Copy of Statement of Expenditure for every project;

• Copy of declaration attached to the State of Expenditure for every

project;

• Copy of Statement of Expenditure by Measure and declaration attached

(where applicable);

• Original Report of on-the-spot checks for individual projects if the check

has been conducted by the IB;

147

• Original copies of photographs taken to show that the individual projects

have been implemented;

• Copy of irregularity report;

• Relevant checklist (where applicable)

14.3.3 Follow-up Action to On-The-Spot Checks

21. Following an on-the-spot check the MA/IB shall send the report to the FB for

signature. The report will be uploaded on the SFD by the MA/IB or FB (in case of

Aid Schemes). An E-mail notification is sent to the FB, EU Affairs Director and the

Permanent Secretary of the relevant Line Ministry in order for these to download

it and print it from the SFD.

22. The report will give a deadline for implementation of the action

required/recommendation. In the case of non-compliance, the MA may decide to

suspend the operation concerned.

23. In the case of Aid Schemes, the FB will follow an Implementation and Monitoring

Report when conducting and on-the-spot check. This report includes a check on

the documents that are kept by the FRs ends’ and a check on the invoices where

a claim for reimbursement has been done.

24. The Implementation and Monitoring Report is signed by the FR and the FB. A

copy is uploaded on the SFD for the MA/IB to review it and keep track on the

checks that are done on the Aid Schemes.

148

149

14.3.4 Template for documentary on the spot checks

This template should be filled in by the MA/IB when carry out an on-the-spot check.

ARTICLE 4 ON-THE -SPOT CHECKS REPORT

REGULAT ION (EC ) 438/2001

1.0 General Information

Date:

Place:

Member State: MALTA

Programme Period: 2004-2006

Objective: 1

Quarter:

Priority:

Measure:

Project No.:

Title of Project:

Final Beneficiary:

Project Leader:

Person representing Project Leader (if PL is not available):

Place of meeting:

The following were present at the meeting:

2.0 Documentation

a. Are all the required documents kept in the project file as requested in the retention of

documents Chapter in the Manual of Procedures?

Yes No N/A11

Structural Funds Application Form

Feasibility studies12 [where applicable]

Letter of Offer

Addenda to the Letter of Offer13

Any related correspondence to the project14

3.0 Payment Process

Amount of money requested by the Final Beneficiary to the Treasury to date:

Where a sample of Invoice Status Certificates are checked, state %:

Comments:

4.0 Verification Process

Total Cost of Project

EU Funds

Malta Funds

Private contribution (where

applicable)

Total

Page 151

How many verifications have taken place to date? ________

List down the Statements of Expenditure (by project) to date with relevant amounts.

Statement of

Expenditure (by Date)

EU Funds

Malta Funds

Private contribution

(where applicable)

Total

Total amount of claim:

Where a sample of invoices are checked, state %:

Specify amount of expenditure checked:

Reality Check Invoice No. Company Amount Was the

product/service

/works delivered to

FBs satisfaction?

Yes No

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Comments:

5.0 Deliverables

5.1 Studies

Yes No N/A

Were any studies conducted about the project?

If yes, specify:

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5.2 Equipment

Yes No N/A

Does the project have procurement of equipment?

Please specify what equipment was procured:

Yes No N/A

Documentation of procured equipment listed in inventory

Does the inventory list include the items separately with the relative details

(e.g. serial/identification numbers, department where item is installed,

address and certification that item has been inventorised)?

Amount of EU Grant paid on inventory

Is the equipment operating on site? Add additional comments below:

Yes No N/A

Is the ‘User Acceptance Certificate’ filled in and signed?

5.2.1 Second Hand Equipment

Declaration by the seller stating origin, and that it has not been purchased

within the previous 7 years with the aid of national or EC Grant

Proof that it does not exceed market value or cost of similar new equipment

Is the ‘User Acceptance Certificate’ filled in and signed?

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5.3 Works15

Yes No N/A

Was the Certification of work done from works supervisor?

Relevant MEPA approvals/permits/Environment Impact

Assessments [where applicable]

List down all the documentation that is available on works certification to date on the project with

relative comments (if any):16

5.4 Training

Yes No N/A

Call for participants

Application form

Letter of Acknowledgement (sent by FB to applicants)

Eligibility of groups and individuals17

Letter to selected applicants18

Letter to non selected applicants19

Training costs (detailed time sheets)

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Signed attendance sheets (for both teachers and trainees)

Evaluation sheets/Feedback forms

Other documents used for training (e.g. presentations, notes, etc.)

Photographs showing that training took place

Yes No N/A

Copy of Certificates

Do the certificates have the EU emblem and the Republic of Malta coat of

arms?

Do the certificates make reference to the fund from where funding comes?

If the person conducting the checks visited any training session on-the-spot:

Place and time:

Name of training session:

No. of attendees:

Is a poster describing EU funds present in the place where the training is being delivered?

Where any trainers interviewed about their involvement in the project?20

In case of Project Managers/Coordinators paid through Structural

Funds

Yes No N/A

Part-time employees - Descriptive timesheet (with a brief report of the

activities carried out during the day)

Employees on a Service Contract – a monthly descriptive report of the

activities carried out

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Any other comments:

5.5 Aid Schemes

Public Call for applications from Final Beneficiary to potential Final

Recipients

Application forms and Guidelines

Evaluation Committee Member list

List of selected projects

Assessment of the application by the desk officer and the evaluation grid by

the Selection Committee with marks for each project

Letter of grant to successful applicants21

Letter to non selected applicants

Yes No N/A

(Bank) Guarantees22 (where applicable)

Copies of contract of Final Recipient with third parties (where applicable)

Copies of invoices and receipts

Notification of grant to State Aid Monitoring Board

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Reply from SAMB to FB on the notification of grant

Checks done by the Final Beneficiary on Final Recipients

Number of companies to be checked by the FB until the end of programming period:

Number of companies checked to date:

Amount of grant to be checked by the FB until the end of programming period:

Amount of grant checked to date:

Does the FB have a standard template when conducting checks23?

Any additional comments:

6.0 Public Procurement

Yes No N/A

6.1 Procurement which does not exceed €2,500 (Lm1000)24

a. Quotations

Or

b. Direct from the open market

- Justification taking into consideration the amount involved, the

urgency attached to the procurement & restrictions of choice &

availability

- Approval from the Head of Department

Page 158

LPO/Agreement (where applicable)

Yes No N/A

6.2 Procurement which exceeds €2500 (Lm1,000) but does not exceed €6000

(Lm2,500)25

a. Tenders -[Required documents are identified under the section “Tenders below the €47,000

(Lm20,000) threshold”]

b. Quotations

Or

c. Written approval by Minister or delegate

d. Direct from open market

- Justification taking into consideration the amount involved, the

urgency attached to the procurement & restrictions of choice &

availability

- Written Approval

LPO/Agreement, where applicable

6.3 Schedule 2 – Tenders BELOW the €47,000 (Lm20,000) threshold (Departmental

Tender)

Tender Document

Request and approval for direct order (negotiated procedure)

Adverts where tenders are made public (e.g. Newspapers, websites, etc)

Requests for explanations & published replies

Official letter of appointment of the Evaluation Committee and CV’s

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Tender opening report (indicating the number of bids received on time)

Evaluation Report

Contract (and any other document required by law)

Publication of the selection results

Recourse to Court and defence procedures

6.4 Schedule 2 – Tenders ABOVE the €47,000 (Lm20,000) threshold

Commitment Form

Tender Document

Request and approval for direct order (negotiated procedure)

Adverts where tenders are made public (e.g. Newspapers, websites, etc)

Tender opening report (indicating the number of bids received on time)

Yes No N/A

Evaluation Report

Contract (and any other documents required by law)

Recourse to Court and Defence procedures (if applicable)

6.5 Tenders above €133,000 (Lm58,700)

Commitment Form

Tender Document

Adverts where tenders are made public (e.g. Newspapers, websites, etc)

Contracts Notice [Official Journal Adverts - (if tender value exceeds the

Page 160

stipulated threshold)]

Requests for explanations & published replies

Official Letter of appointment of the evaluation Committee and CV’s

Tender opening report (indicating the number of bids received on time)

Evaluation Report

Contract Award Notice

Contract (and any other document required by law)

Recourse to Court and Defence procedures

Request and approval for direct order (negotiated procedure)

6.6 Schedule 3 – ALL Tenders

Tender Document

Adverts where tenders are made public (e.g. Newspapers, websites, etc)

Contracts Notice [Official Journal Adverts - (if tender value exceeds the

stipulated threshold)]

Requests for explanations & published replies

Official Letter of appointment of the evaluation Committee and CV’s

Tender opening report (indicating the number of bids received on time)

Evaluation Report

Contract Award Notice

Contract (and any other document required by law)

Page 161

Recourse to Court and Defence procedures

Yes No N/A

Request and approval for direct order (negotiated procedure)

6.7 Employment Contracts

Call for applications: position, requirements (qualifications, skills,

experience), any supporting documentation to be provided with application

Adverts where call was published (e.g. Newspapers, websites, etc)

Application forms, Curriculum Vitae, certificates and other requested

documents where applicable (costings, workplans) of all applicants

Shortlist of applicants– giving reasons for any rejection of applications

Interview Letters to short listed applicants

Selection Report

Letter of Appointment to successful applicant

Letters to non-successful applicants

Contract of employment

7.0 Publicity

Was the Regulation on Publicity (1159/2000) and the Programme Complement Publicity Action Plan

observed?

Yes No

If yes please specify which of the following communication tools were used:

Yes No

Media

Television

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Radio

Newspapers & Magazines

Newsletters

Publications

Leaflets/brochures

Newsletters

Posters

Videos

New Media

Internet

E-mail

CD-ROMs

Visual Identity

EU Flag

Structural Fund logo(s)

Maltese Coat of Arms

Signage

Billboards

Signs/plaques

Display Stands

Information Events

If not please specify:

8.0 Horizontal Priorities

8.1 Environment Protection

Yes No

Relevant MEPA approvals/permits/Environment Impact Assessments

[where applicable]

8.2 Equal Opportunities

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Yes No

Is the project in line with Community Policy on Equal Opportunities

Specify what is the project’s contribution to the development of Equal Opportunities

8.3 State Aid

Yes No

Is the project in line with Community Policy on State Aid

Was the state aid communicated to the State Aid Monitoring Board as

required by National Legislation LN 210/2004?

Was the state aid communicated to the EU Commission as set out in

Article 37 of EC Treaty (where applicable)

9.0 Checks on Final Recipient in case of Aid Schemes falling under

Measures 1.3, 3.1, 3.2 & 3.3 [where applicable]

Yes No N/A

Acknowledgement of application form

Letter of grant

(Bank) Guarantees (where applicable)

Contract/s with third parties (where applicable)

Yes No N/A

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Copies of quotes (where applicable)

Copies of invoices and receipts (where applicable)

Is the plaque/sticker clearly shown at the FRs premises?

Did the Final Recipient do any other forms of publicity?

If yes, please specify:

Grant allocated by Final Beneficiary to Final Recipient:

Amount of money requested by the Final Recipient as reimbursement to the Final Beneficiary to

date:

Invoice No. Company Amount Was the product/service

/works delivered in

accordance to Letter of

Grant?

Comments/Remarks

Comments:

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10.0 Project Implementation26

Yes No

Is the project being physically visited by the person conducting the check?

If yes, specify:

Date:

Place:

Time:

Is the project being implemented in accordance with:

Yes No

• The letter of offer

• The contract

• Eligibility rules

Does the present state of the project realisation ensure the

conclusion of the project within the set period?

If not what remedial action may be taken:

Comments

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11.0 Conclusion27

Concluding comments on findings, proposed follow-up and relevant deadlines

Officer Conducting Checks:

________________________ ________________________

Name in BLOCK LETTERS Signature

_______________________ ________________________

Designation Date

Project Leader:

________________________ ________________________

Name in BLOCK LETTERS Organisation/Department

PROJECT LEADER

_____________________ ________________________

Signature Date

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14.3.5 Documentary on-the-spot checks follow-up report

Should the need arise, the MA/IB may request that a follow-up on-the-spot check will be

scheduled with the respective FB. A follow up report (template below) should be filled as

part of the on-the-spot check undertaken by the MA and/or the IB (in the case of ESF,

FIFG & EAGGF).

ON-THE -SPOT CHECKS

FOLLOW-UP REPORT

1.0 General Information

Date:

Place:

Member State: MALTA

Programme Period: 2004-2006

Objective: 1

Quarter:

Priority: 2

Measure:

Project No.:

Title of Project:

Final Beneficiary:

Project Leader:

Person representing Project Leader (if PL is not available):

Place of meeting:

The following were present at the meeting:

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2.0 Follow-Up Action

Comments on the results of the verifications:

For documents which were not found during the On-the-Spot Visit please indicate if the

missing documentation was found during the follow-up visit. If not, please specify

reasons and remedial action to be taken highlighting the timelines.

Further follow-up visit:

Officer Conducting Checks:

________________________ _______________________

NAME IN BLOCK LETTERS Signature

________________________ ________________________

Designation on behalf of MA/IB

________________________

Date

Page 169

Project Leader:

________________________ ________________________

Name in BLOCK LETTERS Organisation/Department

PROJECT LEADER

________________________ ________________________

Signature Date

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14.3.6 Template for documentary on the spot checks on FRs

ERDF/FIFG/EAGGF

– MA report

Article 4 check

Final Beneficiary:

ERDF/FIFG/EAGGF

project No:

Final Recipient:

Contact Person:

Place of Visit

Date:

Documentation Report

(as per retention of documentation obligations for Final Recipients)

Yes No N.A

Copy of Application Form

Acknowledgement of Application Form from FB

Agreement Contract

Letters of any agreed changes to the Application

Form

Copies of three quotations per approved

interventions

Copies of Invoices/ Receipts

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Evidence of Publicity making reference to the

Structural Funds

Certification of Payments received from Treasury

Inventory of Equipment (if relevant)

Implementation Report

Total Amount of Grant Approved:

% of grant absorbed:

Is the project finished? If not at

which stage of completion is it?

Brief description of project:

List of Claims made by the FR

As per approved contract

Budget Lines

Claims made

Action Amount (€) Invoice No Amount (€)

Was the

product

/service/

works

delivered?

Comments/

Remarks

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Highlight any issues

changes during

implementation:

Concluding Remarks

Signed:

Managing Authority Official Final Recipient

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14.3.7 Template for documentary on the spot checks on IBs

This template should be filled in by the MA when carry out an on-the-spot check on an

IB

ON-THE -SPOT CHECK ON IB REPORT

1.0 General Information

Date:

Place:

Member State: MALTA

Programme Period: 2004-2006

Quarter:

Place of meeting:

The following were present at the meeting:

Comments on Findings:

Proposed Follow-Up and Relevant Deadlines:

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2.0 Documentary On-the-Spot Checks: Check List

Template for documentary on-the-spot checks on IBs

a. Are all the required documents kept in the project file as requested in the retention of

documents Chapter in the MoP?

Yes No N/A28

- Copy of relevant project application forms and relevant correspondence

- Copy of feasibility studies and Environment Impact Assessments (where

applicable)

- Copy of the letter of offers

- Copy of letters of any agreed changes to the project

- Copies of Delegation of Authority (if applicable)

- Copies of Statement of Expenditure by measure and corresponding

declaration

- Have checks been undertaken by the IB?

- Original report of on-the-spot checks for individual projects if the

checks have been undertaken by the IB.

- Were on-the-spot checks reports uploaded on the Structural Funds

Database?

- Original copies of photographs taken to show that the individual

projects have been implemented

- A copy of the monitoring tool

- A copy of the irregularity report

For documents which were not found, please specify reasons and remedial action:

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- Has follow-up action been undertaken by the IB?

b. Do all documents include the correct information and are they complete?

If not please specify which documents are not complete, why and any remedial action.

- Have all outstanding issues from previous on-the-spot checks been

resolved? If not, please specify.

Officer Conducting Checks

________________________ _______________________

Signature Date

________________________ ________________________

Designation on behalf of MA

Intermediate Body

________________________ ________________________

Name in BLOCK LETTERS Organisation/Department

PROJECT LEADER

________________________ ________________________

Signature Date

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14.4 Second Level of Control14.4 Second Level of Control14.4 Second Level of Control14.4 Second Level of Control

25. The 2nd level of control (Article 10 of EC Regulation 438/2001) will be carried out

by the Internal Audit and Investigation Directorate (IAID).

26. Article 10 Regulation 438/2001 stipulates a minimum of 5% checks must be

continuously undertaken by IAID and a project must be audited at least once

throughout the lifetime of the project (without prejudice to the random sampling

methodology).

27. In accordance with Regulation (EC) 438/2001, IAID will prepare audit

programmes for each year using a risk analysis approach in establishing the list

and priorities of projects to be controlled. This risk analysis will be based on both

historical and factual information available on the body to be controlled and

checked.

28. Risks can include both:

� inherent risks - the risk of irregularities or error occurring, for example when

complex rules and regulations govern the action, or there is a high degree of

staff turnover in the FBs;

� control risks – where there is a risk of controls and procedures not preventing or

detecting errors or irregularities occurring.

29. The following are amongst the risk factors that will be taken into the

consideration:

a. Type of Final Beneficiary (whether well established, NGO, etc);

b. Previous reported irregularities or errors (for the first exercise, this will

mainly depend on pre-accession and national funds);

c. Previous audits made by IAID and the National Audit Office;

d. Complexity of Project (the number of people involved in management,

the stages of the project, etc);

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e. Proportion of Structural Fund support for each project (the financing

element as seen in respect of the total Structural Funds available to

Malta);

f. Evidence of increased project cost (this will make more sense when a

project has started);

g. Mobility of staff within the various management bodies (to avoid

confusion with regards to who is managing, who is accounting, who is

doing the first level control, etc, including the ascertainment of the

appropriate staff competencies)

h. Pressure of work (understaffing, volume of transactions and backlogs);

i. Availability of documented procedures (availability of flowcharts,

organisation charts, checklists and manuals);

j. The stage of implementation of the project (to determine if everything is

going to plan, that budgets would not have been exceeded, etc);

k. Results of on-the-spot checks carried out by the Managing Authority, the

Paying Authority and Intermediate Bodies (the number of checks, the

frequency of errors, etc).

The above are but an example of the risk analysis factors and is therefore not

exhaustive.

30. These risk analysis factors will each be allotted a weight factor on a score

number. The higher the score means higher risk and therefore the relevant

beneficiary will be subject to increased control and checks.

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14.5 EU Audits and Assessment of Risk14.5 EU Audits and Assessment of Risk14.5 EU Audits and Assessment of Risk14.5 EU Audits and Assessment of Risk

31. Officials from various parts of the European Commission can undertake audits

such as the audit section of DG Regional Policy (in the case of ERDF projects),

the audit section of DG Employment (in the case of ESF projects), DG Agriculture

(in the case of EAFFG expenditure), and DG Fisheries (in the case of FIFG

expenditure). Officials from the Court of Auditors may also take part.

32. The Court of Auditors will inform the Auditor General’s Office (who will contact

the MA & PA), which measures and which years of expenditure they wish to

examine. Measures are selected, usually on the basis of a risk analysis. The

auditors examine the SoE submitted by the PA. Based on this, a Measure will be

selected for auditing. The PA will be requested to submit a list of projects

supporting the expenditure declaration. Based on this information the auditors

then decide which projects they wish to visit, again normally on the basis of an

assessment of risk.

33. Audits are usually directed towards those areas where risk is likely to be

greatest, although there should also be adequate coverage of low-risk areas.

34. It is then up to the MA who coordinates with the EU Commission and with the

main stakeholders a timetable for the audit, whereby auditors will spend time

visiting the offices of the various organizations involved in the payment process.

14.5.1 Audit Visits14.5.1 Audit Visits14.5.1 Audit Visits14.5.1 Audit Visits

35. The following bodies undertake the auditing of Structural Funds expenditure:

� The European Court of Auditors – may carry out audits on any body or

organisation receiving EU Funds;

� The European Commission Services – carry out audits of financial systems or

expenditure claims and performance audits within OPM;

� The Internal Audit & Investigations Directorate who examine and report on

the operation of a management and control systems. IAID is also responsible

for the 5% checks ( in terms of Article 10 of Commission Regulation (EC) No

438/2001 and the winding up declaration;

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� The National Audit Office – the external auditors of Government which carries

out audits of relevant public bodies.

36. In general, the auditors will want to spend a few days examining documentation

held by the MA, PA, IBs, project leaders and possibly also final recipients (in case

of grant schemes).

37. There will then be site visits to individual projects which essentially allow auditors

to associate physical progress and infrastructure with documentation and figures

of expenditure, certifications etc. Normally this involves reviewing financial

records and files, supplementing these with interviews with relevant staff where

necessary, and testing systems through examining a sample of transactions.

Information on other audits will also usually be sought. Those staff most familiar

with the project/programme should be available to meet with the auditors.

38. A meeting room should be available which can be used by the auditors, and has

sufficient space for the number of auditors and the documentation they will be

inspecting.

39. Typically, auditors will seek to examine the following items (using the original

version), and the MA, PA IBs and FBs should be prepared to ensure these are

made available during the audit:

� contracting;

� Official Journal advertisement (where applicable);

� list of response to advertisements;

� a record of the tender opening procedure and subsequent selection of

successful contractors;

� the tender document submitted;

� the contracts drawn between the FB and the contractors;

� the evaluation reports of the tender and all documents such as minutes and

decisions in relation to the selection of the contractor;

� payments:

- analysis and reconciliation of claims and SoE declared

- check of ledger and financial IT system

- certified copies of the original invoices (originals are held by the

Treasury)

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- statements providing the receipt of grant and payment to

contractors

- document verification of selected items of expenditure during

the site visits

� attendance sheets: During the provision of training, attendance sheets are to

be kept for each session. These are to be signed by the trainees and

countersigned by the trainer. The details on the attendance sheets should

include the course module and date together with reference to the fact that

training is being co-financed by ESF.

� project management/co-ordination: For better management and control,

timesheets of project coordinators/managers, paid on an hourly basis

through Structural Funds, should include a brief description of the activities

carried out during the day. In the case of project

managers/coordinators/supervisors (for ESF, ERDF and CF projects) on a

service contract, a report on the activities carried out by the

manager/coordinator/supervisor for the period covered in the invoice should

also be included with the invoice.

� verification of EU publicity (when applicable) during site visit;

� verification of monitoring information provided (monitoring reports);

� discuss local or national economic context of the project, especially in relation

to employment prospects and the socio-economic effects of the completed

investment;

� interaction with any other Government/private grants to the FBs.

40. Bodies managing aid schemes should ensure that final recipients are aware of

audit visits and the potential consequences of audit reports.

14.5.2 Follow14.5.2 Follow14.5.2 Follow14.5.2 Follow----up to Auditsup to Auditsup to Auditsup to Audits

41. Once the audit is complete, the auditors will then write an audit report with

findings and recommendations to improve the procedures and reduce the risks of

irregularities. An opportunity is given for the MA/PA to agree or disagree with

each recommendation in the audit report. Normally, the MA or PA would ask the

stakeholder in question and/or project leader to comment on the report. This

allows the MA/PA’s response to be co-ordinated.

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42. It is then up to the MA and the PA to make sure that corrective action takes

place. Normally, the appropriate Permanent Secretary will be addressed and

asked to report back and inform the MA/PA on the steps taken to correct the

situation and ensure that other similar practices are not taking place.

43. On an annual basis, each Member State, in consultation with the Commission,

must review the outcomes of the various checks undertaken, comments and

reports made by audit bodies and financial impact of any irregularities and how

these have been dealt with. Under Article 13 of EC Regulation 438/2001,

Member States must also report to the Commission on their application of the

Regulation each year.

14. 6 Winding Up14. 6 Winding Up14. 6 Winding Up14. 6 Winding Up

44. IAID is responsible for the winding-up declaration which will be done at the end

of the programme implementation.

45. It is important to note that IAID can carry out audits even after the project has

been concluded.

46. All documents must be retained, for audit purposes until 2012 (even if

the project ends before) in accordance with Chapter 16, Retention of Documents

in this MoP. The FBs managing the grant schemes are to ensure that the final

recipients are aware of such obligations.

47. In addition to the above, it is important to note that other organizations (such as

the SAMB) can also carry out checks on a project on particular issues e.g. state

aid, in order to ensure that the project is being implemented in line with the

relevant legislation.

14.7 Ex14.7 Ex14.7 Ex14.7 Ex----Post Management ControlPost Management ControlPost Management ControlPost Management Control

48. All FBs should take note of Article 30(4) of EC Regulation 1260/99. All grants are

bound by the conditionality in this article, namely that the relevant operation

financed by the grant (i.e. project) does not, within five years of the date of the

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letter of offer issued by the MA, undergo a substantial modification as outlined in

Article 30 (4) of EC Regulation 1260/99:

a. affecting its nature or its implementation conditions or giving to a final

recipient an undue advantage; and

b. resulting either from a change in the nature of ownership in an item of

infrastructure or a cessation or change of location in a productive activity.

49. All FBs are to inform the MA immediately of any such changes to the project.

Such changes may require that financial corrections be made in accordance with

Article 39 of Regulation 1260/99 which could result in the cancellation of all or

part of the EU contribution.

50. In the case of schemes, the five year period applies from the date of the letter of

grant issued by the organisation granting the aid to the FR. In this case FBs are

to ensure appropriate control of the projects they approve to the FRs. FBs are

bound to carry out on-the-spot checks for the five year period in question and

immediately inform the MA in writing , of any relevant changes.

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15 Reporting of Irregularities

15.1 Irregularities & Financial Corrections15.1 Irregularities & Financial Corrections15.1 Irregularities & Financial Corrections15.1 Irregularities & Financial Corrections

1. Irregularity means any infringement of a provision of Community law resulting

from an act or omission by an economic operator which has, or would have, the

effect of prejudicing the general budget of the Communities by charging an

unjustified item of expenditure to the Community budget.

2. Irregularities can be one-off or systematic. A systematic irregularity is a recurrent

error due to deficiencies in the management and control systems aimed at

ensuring the correct accounting and compliance with rules and regulations.

3. If an irregularity is systematic, recovery is done as usual, if there is something

wrong with the system, all stakeholders (horizontal) will be called in and the

system is changed and FBs informed.

15.2 How to report an Irregularity15.2 How to report an Irregularity15.2 How to report an Irregularity15.2 How to report an Irregularity

4. Commission Regulation (EC) No 2035/2005 regulates the reporting of

irregularities.

5. Any one of the key players (the MA, PA, Treasury, DOC, IB, Line Ministry, FB,

IAID or any other relevant entity) who, at any stage of contracting,

implementation and payment, becomes aware of an irregularity (whether one-off

or systematic), is duty bound to IMMEDIATELY report the irregularity in

accordance with the procedures specified in this chapter. The

person/organisation detecting an irregularity at any stage of the implementation

of the programme, shall prepare the Structural Funds Irregularity Report A (SFIR

(A)) (Section 15.7 of this Chapter) giving details on the relevant irregularity. It is

important to note that the SFIR (A) must be drawn up and immediately and

sent to the MA (copied to IAID and PA) as soon as the irregularity is

detected.

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6. There might be isolated circumstances where the relative officials feel

constrained to by-pass the normal system of reporting irregularities. Whenever

this situation arises, the official is given the opportunity to report any irregularity

directly by filling in form Structural Funds Irregularity Report B (SFIR (B))

(Section 15.7 of this Chapter).

7. Should there be no irregularities to report for the period in question; the project

leader has to submit the nil return (template 15.8) to the EU Affairs Director

within 7 days of the end of the quarter under review. This communication is

done through the ‘Declaration on Irregularities (Nil Return) at Project Level.’ The

EU Affairs Director certifies this information, compiles it by measure in the

‘Quarterly Report on Irregularities (NIL Return)’ (template 15.9) and

communicates it to the MA (copying the PA and IAID) within 7 days of receipt

from the FB.

8. The original reports are sent to the MA and a copy is concurrently sent to the PA

and the IAID. The IAID informs the Commission in terms of Article 6 of

Commission Regulation (EC) No 1831/94.

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Paying Authority

Managing Authority

detecting irregularities

Internal Audit & Investigations

Directorate

Intermediate Bodies

Final Beneficiaries

European CommissionDG OLAF

Treasury

Department of Contracts

EU Affairs

Internal Audit & Investigations Directorate

Paying Authority

15.3 Content of Structural Funds Irregularity Report15.3 Content of Structural Funds Irregularity Report15.3 Content of Structural Funds Irregularity Report15.3 Content of Structural Funds Irregularity Report

9. The SFIR (please refer to the SFIR template in Section 15.7 of this chapter)

should provide details concerning:

- the Structural Fund(s) involved, the name of the project, and form of assistance

in question;

- the provision/procedure which has been infringed (where applicable);

- the nature and amount of the expenditure (EU and Malta Funds);

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- in case where no payment has been made, the amounts which would have been

wrongly paid had the irregularity not been discovered, except where the error or

negligence is detected before payment and does not result in any administrative

or judicial penalty;

- the total amount and its distribution between the different sources of financing;

- the period during which, or the moment at which the irregularity was committed;

- the practice employed in committing the irregularity;

- the national authority/ies or body/ies detecting the irregularity;

- the financial consequences, the suspension, if any, of payments and where

applicable the procedure to be undertaken for recovery;

- the date and source of the first information that an irregularity was in evidence

where applicable;

- the date on which the official report on the irregularity was drawn up;

- the body involved, save in cases where such information is of no relevance in

combating irregularities on account of the character of the irregularity

concerned;

15.4 Reporting to the Commission15.4 Reporting to the Commission15.4 Reporting to the Commission15.4 Reporting to the Commission

10. The MA, PA and IAID will receive the report concurrently from the stakeholder

identifying the irregularity.

11. The IAID will report the irregularity to the European Anti-Fraud Office (OLAF),

copying the completed report to the MA and the PA.

12. During the two months following the end of each quarter, the IAID shall inform

the Commission, with reference back to any previous report made under Article 3

of EC Regulation No 2035/2005, of the procedures instituted following all

irregularities previously notified and of important changes resulting there from,

including:

- the amounts which have been, or are expected to be recovered;

- the interim measures taken by the Member State to safeguard recovery of

sums wrongly paid;

- the judicial and administrative procedures instituted with a view to recovering

sums wrongly paid and to imposing sanctions;

Page 187

- the reasons for any abandonment of recovery procedures (the Commission

shall as far as possible be notified before a decision is taken);

- any abandonment of criminal prosecutions where applicable.

13. The IAID shall notify the Commission of administrative or judicial decisions, or

the main points thereof, concerning the termination of these procedures.

15.5 Types of Irregularity15.5 Types of Irregularity15.5 Types of Irregularity15.5 Types of Irregularity

14. Accountability

� Absence of account

� Incorrect forms

� Falsified accounts

� Accounts not present

� Other cases of irregular accounts

15. Documents

� Request for aid incorrect or incomplete

� Request for aid falsified

� Request for aid false

� Supporting documents missing or incomplete

� Incorrect supporting documents

� False supporting documents

� Falsified supporting documents

� Other cases of irregularity documents

16. Actions

� Measure not eligible for aid

� Non eligible expenditure

� Incorrect identity

� Non existent operation

� Mis-description of use

� Irregular resumption of production

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� "Irregular termination, sale or reduction"

� "Non-termination, uprooting not carried out, slaughter not carried out"

� "Failure to respect National and Community rules"

� Operator/beneficiary not having the required quality

� "Absence of identification, of marking….."

� Non-reconversion

� Other irregularities by the beneficiary

� Other irregularities by the operator

15. 6 Methods of Detecting I15. 6 Methods of Detecting I15. 6 Methods of Detecting I15. 6 Methods of Detecting Irregularitiesrregularitiesrregularitiesrregularities

17. Management and Control

� Checks made during payment process by FB, line Ministry and Treasury;

� Checks made during verification process by MA and IB;

� Checks made during certification process by PA;

� Checks made under Article 10 of EC Regulation 438/2001;

� Other checks made by the IAID.

� Checks made by the National Audit Office/ European Court of Auditors

� Checks made by European Commission services

18. Other Methods

� Fiscal control

� Initial/judicial enquiry

� Community initiative

� EC Regulation 1260/1999 and 438/2001

� Management and control

� A posteriori documentary check

� Correction of accounts

� Control on holding

� On the spot check

� Denunciation

� Grievance or complaint (unanimous or not)

� Situation of the operator

� Preventive control

Page 189

� Release of the guarantees

� Press Information

� Parliamentary statements

� Situation of the beneficiary

� National Ex-post controls

� Requests for documentary checks made to a member state

� Requests for documentary checks made to the issuing country

� Community controls

Page 190

15.7 Template of Irregula15.7 Template of Irregula15.7 Template of Irregula15.7 Template of Irregularity Reportrity Reportrity Reportrity Report (A) (A) (A) (A)

For MA Use: SFIR(A)

STRUCTURAL FUNDS IRREGULARITY REPORT [A]

1.0 General Information:

1.1 Member State: MALTA

1.2 Programme Period: 2004-2006

1.3 Case no (indicate whether this is a new case or an update. e.g. ERDF/No100.Case 1)

1.4 Date when the irregularity was detected:

1.5 Organisation who detected the irregularity:

1.6 Quarter when MA is informed:

1.7 Date when Commission is informed: (for IAID)

1.8 Fund:

1.9 Final Beneficiary:

1.10 Final Recipient29:

1.11 Priority:

1.12 Measure:

1.13 Title of Project & ref no:

STRUCTURAL FUNDS PROGRAMME

MALTA 2004 – 2006

Page 191

Service Supplies Works Training Salaries Aid Scheme 1.14 Type of Project:

(tick where

applicable)

EU Funds:

Malta Funds:

Private Contribution:

1.15 Total Project Cost:

(amount in Euro)

TOTAL

2.0 Provision Infringement

2.1 Community Regulations: (indicate the regulation/decision that has suffered the

infringement, where applicable)

2.2 National provisions:(indicate the national regulation that has suffered the infringement,

where applicable)

2.3 Infringement of other procedures (where applicable): Yes

2.4 What raised first suspicions of irregularity?

2.5 Date of first suspicion:

2.6 How was suspicion confirmed and irregularity discovered?

3.0 Type of Irregularity

3.1 (use Section 15.5 of Manual of Procedures for Structural Funds for reference)

3.2 Please provide a brief description of practices employed in committing the irregularity (i.e.

falsification of invoices by changing the original amounts)

3.3 "Dates on which, (or dates between which) irregularity took place."

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4.0 Organisation involved in committing irregularity

4.1 Person(s)/organisation involved in the irregularity

Name :

Address :

Post Code:

Position held:

4.2 (if there are additional entries please complete separately and attach to form)

5.0 Financial Details

5.1 Was the Irregularity discovered prior to the execution of payment?

Yes No N/A

5.2 Was the Irregularity discovered prior to the reimbursement request from the European

Commission?

Yes No N/A

5.3 Is there a case for recovery of funds?

Yes No N/A

5.3.1 If yes, state what is the nature of recovery

5.3.2 If no, why?

Page 193

5.4 Describe the actions and/or measures taken to settle the irregularity

5.5 Describe the actions and/or measures taken to prevent the recurrence of the irregularity

already detected

5.6 If there are any costs involved, were these reimbursed?

Yes No N/A

5.6.1 If yes, please give details

5.7 Was the Paying Authority informed30?

Yes No N/A

5.8 Was action taken to recover funds?

Yes No N/A

5.9 Give details on recovery (if applicable):

5.9.1 Invoice number/s

5.9.2 Total amount (in Euros) to be recovered:

5.9.3 Community share:

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5.9.4 National share:

5.9.5 Total amount recovered:

5.9.6 Community share:

5.9.7 National share:

5.9.8 "Prospects of irregularity reoccurring (if relevant) ( i.e. Likely, Unlikely due to……)" and

summary of procedures for recovery taken/to be taken

5.9.9 The total amount of Structural Funding31 that would have been wrongly paid if the

irregularity had not been discovered

5.10 Has further expenditure been suspended (Please complete where applicable)

Yes Amount

No Why not?

N/A

6.0 Is a follow up required?

Yes No N/A

6.1 If yes, what?

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6.2 Who is responsible to follow the follow up?

6.3 By when should action be taken?

7.0 Additional observations

Please give any additional information you believe is relevant.

8.0 Comments by Permanent Secretary or EU Affairs Director

Report submitted by:

_________________________________ _____________________________

Name in BLOCK LETTERS Name of Organisation/Department

________________________________ ____________________________

Designation Signature

________________________________

Date

_________________________________ ____________________________

Permanent Secretary/EU Affairs Director32 Signature

Page 196

_________________________________

Date

For office use:

Report received by:

___________________________

Name of Officer

________________________

Signature & Stamp

________________________

Date

Page 197

15.8 Template of Irregularity Report (B)15.8 Template of Irregularity Report (B)15.8 Template of Irregularity Report (B)15.8 Template of Irregularity Report (B)

For MA Use: SFIR(B)

STRUCTURAL FUNDS IRREGULARITY REPORT [B]

1.0 General Information:

1.1 Member State: MALTA

1.2 Programme Period: 2004-2006

1.3 Case no (indicate whether this is a new case or an update. e.g. ERDF/No100.Case 1)

1.4 Date when the irregularity was detected:

1.5 Organisation who detected the irregularity:

1.6 Quarter when MA is informed: 1.7 Date when Commission is informed: (for IAID)

1.8 Fund:

1.9 Final Beneficiary:

1.10 Final Recipient33:

1.11 Priority:

1.12 Measure:

1.13 Title of Project & ref no:

Service Supplies Works Training Salaries Aid Scheme 1.14 Type of Project:

(tick where

applicable)

EU Funds:

Malta Funds:

Private Contribution:

1.15 Total Project Cost:

(amount in Euro)

TOTAL

2.0 Provision Infringement

2.1 Community Regulations: (indicate the regulation/decision that has suffered the infringement,

where applicable

2.2 National provisions:(indicate the national regulation that has suffered the infringement,

where applicable)

2.3 Infringement of other procedures (where applicable): Yes

2.5 What raised first suspicions of irregularity?

2.5 Date of first suspicion:

2.6 How was suspicion confirmed and irregularity discovered?

3.0 Type of Irregularity

3.1 (use Section 15.5 of Manual of Procedures for Structural Funds for reference)

3.2 Please provide a brief description of practices employed in committing the irregularity (i.e.

falsification of invoices by changing the original amounts)

3.3 "Dates on which, (or dates between which) irregularity took place."

4.0 Organisation involved in committing irregularity

4.1 Person(s)/organisation involved in the irregularity

Name :

Address :

Post Code:

Position held:

4.2 (if there are additional entries please complete separately and attach to form)

5.0 Financial Details

5.1 Was the Irregularity discovered prior to the execution of payment?

Yes No N/A

5.2 Was the Irregularity discovered prior to the reimbursement request from the

European Commission?

Yes No N/A

5.3 Is there a case for recovery of funds?

Yes No N/A

5.3.1 If yes, state what is the nature of recovery?

5.3.2 If no, why?

5.4 Describe the action taken to settle the irregularity.

5.5 Describe the actions and/or measures taken to prevent the recurrence of the irregularity

already detected.

5.6 If there are any costs involved, were these reimbursed?

Yes No N/A

5.6.1 If yes, give details?

5.7 Was the Paying Authority informed34?

Yes No N/A

5.8 Was action taken to recover funds?

Yes No N/A

5.9 Give details on recovery (if applicable):

5.9.1 Invoice number/s

5.9.2 Total amount (in Euros) to be recovered:

5.9.3 Community share:

5.9.4 National share:

5.9.5 Total amount recovered:

5.9.6 Community share:

5.9.7 National share:

5.9.8 "Prospects of irregularity reoccurring (if relevant) ( i.e. Likely, Unlikely due to……)" and

summary of procedures for recovery taken/to be taken

5.9.9 The total amount of Structural Funding35 that would have been wrongly paid if the

irregularity had not been discovered

5.10 Has further expenditure been suspended (Please complete where applicable)

Yes Amount

No Why not?

N/A

6.0 Is a follow up required?

Yes No N/A

6.1 If yes what?

6.2 Who is responsible for follow up?

6.3 By when must action be taken?

7.0 Additional observations

Please give any additional information you believe is relevant.

8.0 Comments by Permanent Secretary or EU Affairs Director

Report submitted by:

_________________________________ _____________________________

Name in BLOCK LETTERS Name of Organisation/Department

________________________________ ____________________________

Designation Signature

________________________________

Date

For office use:

Report received by:

___________________________

Name of Officer

________________________

Signature & Stamp

________________________

Date

15151515.9.9.9.9 Template of the Declaration on Irregularities (NIL RETURN) at Project Level Template of the Declaration on Irregularities (NIL RETURN) at Project Level Template of the Declaration on Irregularities (NIL RETURN) at Project Level Template of the Declaration on Irregularities (NIL RETURN) at Project Level

DECLARATION ON IRREGULARITIES (NIL RETURN) AT PROJECT LEVEL

1.0 General Information:

1.1 Member State: MALTA

1.2 Programme Period: 2004-2006

1.3 Objective: 1

1.4 Quarter:

1.5 Priority:

1.6 Measure:

1.7 Project No.:

1.8 Project Title:

I declare that no irregularities according to Community and/or National Regulations were detected in

the above mentioned projects during the quarter covered by this report.

Submitted by:

________________________ ________________________

Name in BLOCK LETTERS Organisation/Department

PROJECT LEADER

________________________ ________________________

Signature Date

15.1015.1015.1015.10 Template of the Quarterly Report Template of the Quarterly Report Template of the Quarterly Report Template of the Quarterly Report on Irregularities (NIL RETURN) at Measure on Irregularities (NIL RETURN) at Measure on Irregularities (NIL RETURN) at Measure on Irregularities (NIL RETURN) at Measure

LevelLevelLevelLevel

QUARTERLY REPORT ON IRREGULARITIES (NIL RETURN)

1.0 General Information:

1.1 Member State: MALTA

1.2 Programme Period: 2004-2006

1.3 Objective: 1

1.4 Quarter:

1.5 Priority:

1.6 Measure*:

Project No. Title of Project Final Beneficiary

I declare that no irregularities according to Community and/or National Regulations were detected in

the above mentioned projects during the quarter covered by this report.

*The original copy is to be sent to the Managing Authority, copying the Paying Authority and the

Internal Audit & Investigations Directorate.

**A separate report is to be filled in for every Measure.

Report Submitted by:

________________________ ________________________

Name in BLOCK LETTERS Name of Ministry

________________________ ________________________

EU Affairs Director Signature

________________________

Date

For Office Use:

Report Received by:

________________________

Name of Officer

________________________

Signature & Stamp

________________________

Date

15.1115.1115.1115.11 Financ Financ Financ Financial Recoveriesial Recoveriesial Recoveriesial Recoveries

3.0 In case an irregularity necessitates recovery of funds the person/organisation

detecting the irregularity must ensure that recovery procedures are initiated

immediately. The person/organisation must:

• Detail the sums to be recovered – a breakdown of the amounts that are

to be recovered and how these sums have been wrongly incurred.

• If and when have the sums been claimed to the Commission – In

which payment request/s have these funds been included, if the funds have

been claimed to the Commission.

• Action taken – a description of the action that has been taken and of

follow-up if required.

• Expenses incurred – details of expenses incurred to recover funds wrongly

paid and whether these expenses have been reimbursed or not.

Manual of Procedure for Structural Funds 2004 - 2006

206

15.15.15.15.11112222 Financial Co Financial Co Financial Co Financial Correctionsrrectionsrrectionsrrections

4.0 It is important to note that if there are deficiencies with respect to the

application of rules and regulations, such irregularities can lead to financial

corrections.

5.0 The Commission can apply the following types of corrections:

• Specifically quantified corrections – corrections made where a

quantifiable irregularity is detected for an individual operation or several

individual operations. These will be applied where it is feasible to quantify the

correction. This would be the case where operations or parts thereof are

ineligible or do not respect EU legislation.

• Extrapolated corrections – these corrections will apply where the auditors

have detected in a representative sample of transactions a quantifiable

irregularity that it can be assumed will have recurred in other operations of

the same type, or throughout a measure or programme. The Commission can

apply such corrections when it has reason to believe that the irregularity

detected is not limited to specific cases investigated. The Commission has the

right to extrapolate the correction to be applied.

• Flat Rate corrections – these corrections will be applied for individual

breaches or systemic irregularities that are not in practice quantifiable, such

as those resulting from a failure to undertake checks effectively to prevent or

detect irregularity or to comply with a condition of the assistance or EU

legislation. These corrections will apply where it is not possible to calculate

the specific loss related to an individual case or several cases of irregularities.

They can also be applied when a Member State discovers such failures and

does not take corrective action. Flat rate corrections can vary from 2% to

100%.

Manual of Procedure for Structural Funds 2004 - 2006

207

16 Retention of Documents

16.1 General Remark16.1 General Remark16.1 General Remark16.1 General Remark

1. All documents related to projects shall be kept available for audit purposes

in accordance with Article 38 (6) of the General Regulation. This applies

to all organisations benefiting/or involved in the management of Structural

Funds including the final recipients.

2. All documents related to the projects shall be kept available for audit

purposes up to three years after closure of the programme in accordance

with Article 38 (6) of Regulation (EC) No 1260/99 and Commission

Closure Guidelines section 3.2.3, whereby the Commission will take as

starting point for such time period (the three years) whichever of the

following dates is applicable: (i) the date of execution of the last payment,

(ii) the date of execution of reimbursement by the member state to a fund,

(iii) the date of compensation or (iv) the date of the letter from the

Commission regarding closure where no final balance is paid because

payments already made have been sufficient to cover expenditure.

Therefore all documents related to projects shall be kept available for audit

purposes until 31st December 2015.

16.2 What records are needed?16.2 What records are needed?16.2 What records are needed?16.2 What records are needed?

3. In line with Reg. 438/2000 as amended by Reg. 2355/2002 (Art 2a) the

supporting documents regarding expenditure and checks shall comprise:

� Documents relating to specific expenditure incurred and declared and

payments made under the assistance and required for a sufficient audit trail

including documents constituting proof of the actual delivery of works,

goods or services co-financed;

� Reports and documents relating to checks carried out through:

- Verification of expenditure [438/2000 art 4]

- Certification of expenditure [438/2000 art 9]

Manual of Procedure for Structural Funds 2004 - 2006

208

- Checks on operations by MS organised on an appropriate sampling basis

[438/2002 art 10]

- Declaration at winding up of assistance [438/2002 Art 15]

4. As indicated below some organisations/departments would be required to

maintain documents in their original format while others would be

requested to keep copies of these originals. Copies of original documents

must be kept on commonly accepted data carriers, by a competent

officer, which include:

� Photocopies of original documents;

� Microfiches of original documents

� Electronic versions of original documents on optical data carriers (such as

CD-rom, hard disk or magnetic disk);

� Documents existing in electronic version only.

5. The Final Beneficiaries are required to hold a copy of any original

document related to the implementation of the project (if the original has

to be passed on to another authority) including where the latter are not

the final recipients of funding, the bodies or firms carrying out operations.

6. Copies of original documents must be certified as true copies of originals.

The person certifying such copies depends on the document to be copied.

Certification of true copies of original shall be done as follows: � FB - Project Leader;

� Line Ministry – Director (EU Affairs) or Director (Corporate Services)

as appropriate;

� MA – Director General, Planning & Priorities Co-ordination

Directorare;

� PA – Director, EU Paying Authority Directorate;

� IB - Head of Department;

� Department of Contracts - Director General Contracts;

� Budget Office – Director;

� Treasury - Head of Section.

Manual of Procedure for Structural Funds 2004 - 2006

209

16.3 Delegation of Authority16.3 Delegation of Authority16.3 Delegation of Authority16.3 Delegation of Authority

7. The responsible person to certify true copies of original must establish a

procedure where in his/her absence such person will delegate the

authority to sign to an official within the office. For further information

please refer to Chapter 19 of this MoP - Delegation of Authority.

16.4 Who may carry out checks?16.4 Who may carry out checks?16.4 Who may carry out checks?16.4 Who may carry out checks?

8. Documents should be made available for inspection by the persons and

bodies who would normally have the right to carry out checks/audits/

control missions. These persons and bodies shall be: � the Managing Authority;

� the Paying Authority;

� the Intermediate Body (where applicable);

� the FB in case of grant schemes;

� the services undertaking audits of management and control systems

(e.g IAID, National Audit Office);

� the IAID as the Directorate responsible for the winding up

declaration under Article 38 (1) (f) of EC Regulation 1260/99;

� mandated officials of national audit institutions and the European

Commission

� the European Commission

� the European Court of Auditors

Extracts or copies of the documents or accounting records are to be made

available to the representatives of these organisations to be supplied to them.

16.5 Procurement Documentation16.5 Procurement Documentation16.5 Procurement Documentation16.5 Procurement Documentation

9. NOTE: For the retention of documents related to procurement, the

information has been classified according to the thresholds and split

between schedule 2 and 3 as stipulated by the Public Contracts Regulation.

Schedule 2 refers to Contracting Authorities falling within the competence

of the Department of Contracts while Schedule 3 refers to the Contracting

Authorities who shall administer their own Public Procurement in

accordance with the provisions of the Public Contracts Regulations 2003.

To determine under which schedule an organisation/body falls please refer

to the Public Contracts Regulation (as of June of 2005 LN 177 and LN 178

of 2005.)

Manual of Procedure for Structural Funds 2004 - 2006

210

211

TABLE OF INDICATIVE DOCUMENTS THAT MUST BE RETAINED

Documentation MA IB PA FB Line

Ministry

Final

Recipient

36

DoC Budget

Office

Treasury CBM SAMB

1. Application Form

Structural Funds Application Form Original Copy Copy Copy

Feasibility studies and Environment

Impact Assessments [where applicable]

Original Copy Copy Copy

Letter of offer [and any revised

versions]

Original Copy Copy Original Original Copy Copy

Any agreed changes to the project37 Original

/Copies

Original

/Copies

Original

/Copies

Original

/Copies

Original

/Copies

Original

/Copies

Original

/Copies

Original

/Copies

Original

/Copies

Original

/Copies

Copies

2. General

Any related correspondence to the

project38

Original

/Copies

Original

/Copies

Original

/Copies

Original

/Copies

Original

/Copies

Original

/Copies

Original

/Copies

Original

/Copies

Original

/Copies

Original

/Copies

Original

/Copies

Delegation of Authority to sign39 [where

applicable]

Original

/Copies

Original/

Copies

Original

/Copies

Original

/Copies

Original

/Copies

Original

/Copies

Original

/Copies

Original

/Copies

Original

/Copies

Original

/Copies

212

Documentation MA IB PA FB Line

Ministry

Final

Recipient

DoC Budget

Office

Treasury CBM SAMB

Financial Estimates

(forecast)

Copy Copy Original

Project Management Costs [detailed

time sheets]

Original Copy Copy

3. Payment Process

Invoices related to all expenditure40 Copy Copy Copy Original

Invoice Status Certificate41 Copy Copy Original

SF Purchase Order (issued by the

Accounting Officer)

Copy Original

Guarantees (where applicable) Original

/Copy42

Original

/Copy43

Funds Transfers Document (BOP/8) Copy Original

Debit Advice (prepared by Treasury) Copy Original

Bank Draft (BOP/21) Copy Original

213

Documentation MA IB PA FB Line

Ministry

Final

Recipient

DoC Budget

Office

Treasury CBM SAMB

Letter for adjustment (prepared by

Treasury – where applicable)

Copy Original

Debit advice (prepared by Central Bank) Copy Original Copy

Receipts Original

44

Copy Certified

True

Copy45

Certified

True

Copy46

4. Verification Process

SOE by Project Copy Copy Original Copy

Declaration attached to SOE by Project Copy Copy Original Copy

SOE by Measure Copy Copy Original

Declaration attached to SOE by Measure Copy Copy Original

5. Certification Process

SOE by Funds Copy Original

214

Documentation MA IB PA FB Line

Ministry

Final

Recipient

DoC Budget

Office

Treasury CBM SAMB

Request for Payment47 Copy

Certificate48 Copy

Reports on checks made by PA Original

6. Tendering (Public Contracts Regulations)49

Commitment Form Copy Copy Copy Original Copy

6.1 Procurement which does not exceed €2,500 (Lm1,000)50

a. Quotations Copy Original

Or

b. Direct from the open market:

- Justification taking into consideration

the amount involved, the urgency

attached to the procurement &

restrictions of choice & availability

Copy Original

- Approval from the Head of Department Copy Original

LPO/Agreement, where applicable Original Copy

215

Documentation MA IB PA FB Line

Ministry

Final

Recipient

DoC Budget

Office

Treasury CBM SAMB

6.2 Procurement which exceeds €2,500 (Lm1,000) but does not exceed €6,000 (Lm2,500)51

a. Tenders -[Required documents are

identified under the section “Tenders

below the €47,000 (Lm20,000)

threshold”]

Copy Original

Or

b. Quotations Copy Original

Written approval by Minister or delegate Copy Original

Or

c. Direct from open market

- Justification taking into consideration

the amount involved, the urgency

attached to the procurement &

restrictions of choice & availability

Copy Original

- Written Approval Copy Original

LPO/Agreement, where applicable52 Copy Original

216

Documentation MA IB PA FB Line

Ministry

Final

Recipient

DoC Budget

Office

Treasury CBM SAMB

6.3 Schedule 253 – Tenders BELOW the €47,000 (Lm20,000) threshold

Tender Document Original Copy Copy

Adverts where tenders are made public

(eg. Newspapers, websites, etc)

Original

Requests for explanations & published

replies

Original

/ copies

Official letter of appointment of the

Evaluation Committee

Original Copy Copy

Bids by prospective bidders Original

Tender opening report (indicating the

number of bids received on time)

Original

Evaluation Report Original Copy Copy

Contract Award Notice Original Copy Copy

Contract (and any other document

required by law)

Copy Original Copy Copy

Publication of the selection results Original Copy Copy

217

Documentation MA IB PA FB Line

Ministry

Final

Recipient

DoC Budget

Office

Treasury CBM SAMB

Letter of Acceptance Copy

Letter to non successful bidders Copy

Recourse to Court and defence

procedures

Original

/Copies

6.4 Schedule 2 – Tenders ABOVE the €47,000 (Lm20,000) threshold

Tender Document Copy Original

Adverts where tenders are made public

(eg. Newspapers, websites, etc)

Copy Original

Contract Notice [Official Journal Adverts-

(if tender value exceeds the stipulated

threshold)]

Original

Requests for explanations & published

replies

Original

/Copies

Official Letter of appointment of the

evaluation Committee

Original Copy

Bids by prospective bidders Original

Tender opening report (indicating the

number of bids received on time)

Copy Original

Evaluation Report Copy Original

Minutes of the General Committee

Sitting

Original

218

Documentation MA IB PA FB Line

Ministry

Final

Recipient

DoC Budget

Office

Treasury CBM SAMB

Contract Award Notice Original

Contract (and any other documents

required by law)

Copy Original Original Copy

Publication of the selected results Original

Notification award letter Copy

Letter to non successful bidders Copy

Tendering Process Checklist54 Copy Original

Recourse to Court and Defence

procedures

Original

/Copies

Original

/Copies

6.5 Schedule 3 – ALL Tenders

Tender Document Original Copies

Adverts where tenders are made public

(eg. Newspapers, websites, etc)

Original Copies

Contracts Notice [Official Journal

Adverts - (if tender value exceeds the

stipulated threshold)]

Original Copy

Requests for explanations & published

replies

Original

/Copies

Copies

Official Letter of appointment of the

evaluation Committee

Original Copies

Bids by prospective bidders Original Copies

219

Documentation MA IB PA FB Line

Ministry

Final

Recipient

DoC Budget

Office

Treasury CBM SAMB

Tender opening report (indicating the

number of bids received on time)

Original Copies

Evaluation Report Original Copies

Contract Award Notice Original Copies

Contract (and any other document

required by law)

Original Copies

Publication of the selection results Original Copies

Letter of Acceptance Copy Copies

Letter to non successful bidders Copy Copies

Recourse to Court and Defence

procedures

Original

/Copies

Copies

6.6 Tenders above EU Thresholds

(€133,000 (Lm53,000) excluding

VAT) (applies to both sections 6.4 and

6.5)

Prior Indicative Notice Copy Copy Original

7. Monitoring

On the spot checks report55 Original

/Copy

Original/

Copy

Copy Copy Copy Copy56

220

Documentation MA IB PA FB Line

Ministry

Final

Recipient

DoC Budget

Office

Treasury CBM SAMB

Photographs to show that the Project

has been carried out (where

applicable)57

Original

/Copy

Original/

Copy

Original

/Copy

Input into Annual Reports Original Copy Copy

8. Irregularities

Structural Funds Irregularity Report58 Original

59

Copy

Irregularity Report (Nil Return)60 Original Copy Copy Original61

/Copy

9. Assets/Equipment

Date of Purchase Original

Description of asset/equipment Original

Price net recoverable of VAT Original

Amount of EU Grant paid Original

Location of the asset and of the title

deeds

Original

Serial or identification numbers Original

221

Documentation MA IB PA FB Line

Ministry

Final

Recipient

DoC Budget

Office

Treasury CBM SAMB

Date of Disposal Original

Sale of proceeds/net of VAT Original

Inventory Original

9.1 Second Hand Equipment

Declaration by the seller stating origin,

and that it has not been purchased

within the previous 7 years with the aid

of national or EC Grant

Original

Proof that it does not exceed market

value or cost of similar new equipment

Original

10. Publicity Records62

Copies of all publicity used (adverts,

press releases, photos, leaflets, posters,

etc)

Original

Evidence of using EU Flag and Malta

Coat of Arms notifying beneficiaries of

Structural Funds Contribution

Original

222

Documentation MA IB PA FB Line

Ministry

Final

Recipient

DoC Budget

Office

Treasury CBM SAMB

11. State Aid63

Declaration of organisation’s receipt of

state aid in the last three years

Original Copy

Notification of grant to SAMB Copy Copy Original

Reply from SAMB to FB on the

notification of grant

Copy Original Copy

If the assistance does not fall under the

‘de minimis’ rule, the original to be

submitted to SAMB for the notification to

the Commission.

Copy Copy Copy

12. Training/Schemes [where applicable]

Call for participants Original

Application form Original Copy

Acknowledgement Letter Copy Original

Eligibility of groups and individuals,

including a signed declaration by

beneficiary and Project Leader

Original

223

Documentation MA IB PA FB Line

Ministry

Final

Recipient

DoC Budget

Office

Treasury CBM SAMB

Information on the selection of target

beneficiaries64

Original

Letter of Offer to applicants Original Original

Letter to non selected applicants [with

reasons]

Copy

Synthesis on the kind/form of

training/scheme

Original

Training Costs [detailed time sheets] Original

Attendance sheets [for both teachers &

trainees] where applicable

Original

Evaluation sheets Original

Any other documents used for the

training/scheme [e.g. presentations]

Original

Outputs [where applicable, e.g. studies] Original

Certificates [for training only] Copy

Record of the support provided to each

individual/organisation

Original

224

Documentation MA IB PA FB Line

Ministry

Final

Recipient

DoC Budget

Office

Treasury CBM SAMB

Cash Flow information [for schemes

only]

Original

In case of project under priority 4,

proof that beneficiaries are in an

eligible area

Original

13. Aid Schemes for the Private Sector – falling under Measures 1.3, 3.1, 3.2 & 3.3 [where applicable]

Call for participants Copy65 Original

Application form and relevant annexes

and quotations (where applicable)

Original Copy

Acknowledgement Letter Copy Original

Information on the selection of target

beneficiaries66

Original

Letter of Agreement Original Original

Letter to non selected applicants [with

reasons]

Copy

Receipts Copy Copy Certified

True

Copy67

Original68

Relevant Evidence on Publicity Original

Inventory Original

On the spot checks report on Final

Recipients

Copy Copy Copy Original Copy Copy Copy

225

16.6 Filing System by the FB for project16.6 Filing System by the FB for project16.6 Filing System by the FB for project16.6 Filing System by the FB for project----related Documentsrelated Documentsrelated Documentsrelated Documents

9. The MA, IB, PA, FB and Line Ministry should open a file per project

(ideally ring files for ease of reference). This file should contain project-

related documents, which are identified in the above-mentioned table,

which must be readily available for any inspection made by the bodies

identified under section 16.4

10. Each Project File should be divided into sections. ERDF files must have a

green tag, ESF files must have yellow tag, FIFG must have a blue tag

while EAGGF must have a red tag on the back on the ring file. These

should reflect the sections identified in the table above and should strictly

follow the same order, with Section 1 being the one on top and Section

12 being at the very end. For ease of reference the sections are being

repeated below:

1. Application Form

2. General

3. Payment Process

4. Verification Process

5. Certification Process

6. Tendering

7. Monitoring

8. Irregularities

9. Assets/Equipment

10. Publicity Records

11. State Aid

12. Training/Schemes

13. Aid Schemes

11. The documents included under each of the above sections should be filed

in date order, with the most recent documents on top.

12. This system does not exempt organisations from using their usual filing

systems. The system under points 8 & 9 above is merely to facilitate

access. Copies should be kept in normal filing systems of the organisation

226

if this is a legal requirement by that organisation.

13. Day to day correspondence can be kept in usual Ministerial files.

227

17 Information and Publicity

17.1 G17.1 G17.1 G17.1 General Principleeneral Principleeneral Principleeneral Principle

1. Council Regulation (EC) No. 1260/99 and Commission Regulation (EC) No.

1159/2000, set out the requirements on information and publicity measures

to be carried out by Member States in relation to activities supported by the

Structural Funds. A simplified checklist of requirements has been produced,

together with a guide to ensure that the correct visual identity for the

European Union is employed.

17.2 Aims17.2 Aims17.2 Aims17.2 Aims

2. Communications actions related to Structural Funds Programmes should aim:

� to inform:

- potential and final beneficiaries;

- regional and local authorities and other competent public authorities;

- trade organisations and business circles;

- the economic and social partners;

- non-governmental bodies, especially bodies to promote equality between

men and women;

- bodies working to protect and improve the environment;

- project operators and promoters,

about the opportunities and benefits offered by joint assistance from the

European Union and the Member States in order to ensure the transparency of

such assistance.

� to inform the general public about the role played by the European Union in

co-operation with the Member States in the assistance concerned and its

results.

3. It is to be noted that publicity in the sense of the Regulation does not include

marketing activities. The latter must be clearly identified as a separate and

distinct component (not under publicity) in the project activities with an

indicative budgetary allocation.

228

17.3 Responsibilities & Funding17.3 Responsibilities & Funding17.3 Responsibilities & Funding17.3 Responsibilities & Funding

4. The MA and the IB on its behalf (where applicable), has the overall

responsibility for the general publicity of Structural Funds.Technical assistance

funds under Priority 5 of the SPD will be used for this purpose.

5. The FB is responsible for the publicity related to a specific project. The FB

MAY only use publicity to increase awareness of what the EU funds are used

for (project specific) and not be used to promote/market products/services or

infrastructure. The FB must include information/publicity costs in the project’s

budget.

6. In exceptional cases, particularly in the case of EAGGF/FIFG projects involving

schemes, the FBs may request information/publicity actions to be co-financed

under priority 5. In this case, a request is to be submitted to the MA which

should include the following:

- a brief description of the measure (s) proposed;

- the rationale for the measure (s) proposed, including aim(s) and target

group(s);

- a technical specification for the measure(s) proposed, including quantity,

size and frequency;

- a timetable for the measure (s) proposed , including preparation, approval

and production;

- a cost estimate(s) for the measure(s) proposed;

- the name(s) and contact details of the responsible implementing

agency(ies).

17.417.417.417.4 Implementation of publicity measuresImplementation of publicity measuresImplementation of publicity measuresImplementation of publicity measures

17.4.1 Communication Plan17.4.1 Communication Plan17.4.1 Communication Plan17.4.1 Communication Plan

7. A Communication Plan was included in the Programme Complement

(Annex V) in accordance with Article 18 (3) of EC Regulation No 1260/1999.

The Plan outlines how information and publicity measures will be undertaken

including aims and target groups, communication strategies, the budget and

those responsible for the implementation.

8. Measures which are compulsory under the Publicity Regulation are

highlighted in shaded boxes; other measures are not compulsory, but

recommended for use as resources permit.

229

Measures & Sub-Measures

Target Groups

Communications Tools

Frequency Organisation(s) Responsible

Signage: billboards / plaques as required by Regulation

Billboards during construction, plaques afterwards

Media: press releases, articles, interviews, limited advertising of particular projects / schemes (excluding public awareness campaign re. waste management – separate budget)

Ongoing

Publications Ongoing New media Ongoing Public inquiries Ongoing

1.1

Improvement of the Environmental Situation (ERDF)

Partners, potential contractors (Malta & EU), general public, environment / heritage interest groups & NGOs

Info events Ongoing

Relevant line-Ministry, WasteServ Malta, Water Services Corporation, MEPA, Malta Resources Authority, project implementers / contractors

Signage: billboards / plaques as required by Regulation

Billboards during construction, plaques afterwards

Media: press releases, articles, interviews, advertising of particular projects

Ongoing

Publications Ongoing

New media Ongoing

Public inquiries Ongoing

1.2.1

Transport Infrastructure (ERDF)

Partners, potential contractors (Malta & EU), general public, road transport / maritime interest groups & NGOs

Info events Ongoing

Relevant line-Ministry, Malta Transport Authority, Malta Maritime Authority, project implementers & contractors

Signage: billboards / plaques as required by Regulation

Billboards during construction, plaques afterwards

Media: press releases, articles, interviews, advertising of particular projects / schemes

Ongoing

Publications Ongoing

New media Ongoing

Public inquiries Ongoing

1.2.2

Education Infrastructure (ERDF)

Partners, potential contractors (Malta & EU), general public, women, students, education / IT interest groups & NGOs

Info events Ongoing

Malta College of Arts Science and Technology, Employment and Training Corporation, project implementers & contractors

230

Signage: billboards / plaques as required by Regulation

Billboards during construction, plaques afterwards

Media: press releases, articles, interviews, advertising of particular projects / schemes

Ongoing

Publications 2004 Q2, ongoing

New media Ongoing

Public inquiries Ongoing

1.2.3

Service Infrastructure for Industry (ERDF)

Partners, potential contractors (Malta & EU), general public, business organisations, trade unions, interest groups & NGOs

Info events Ongoing

Malta Enterprise, project implementers & contractors

Signage: billboards / plaques as required by Regulation

Billboards during construction, plaques afterwards

Media: press releases, articles, interviews, advertising of particular projects / schemes

Ongoing

Publications 2004 Q2, ongoing New media Ongoing

Public inquiries Ongoing

1.3

Support to Enterprises (ERDF)

Partners, potential contractors (Malta & EU), general public, business & tourism organisations, trade unions, tourism / heritage / environment interest groups & NGOs

Info events Ongoing

Malta Enterprise, Malta Tourism Authority, project implementers & contractors

Signage: billboards / plaques as required by Regulation

Billboards during construction, plaques afterwards

Media: press releases, articles, interviews, advertising of particular projects / schemes, international promotion of key developments

Ongoing

1.4

Support to the Tourism Sector (ERDF)

Partners, potential contractors (Malta & EU), general public, tourism & business organisations, trade unions, tourism / heritage / environment interest groups & NGOs

Publications 2004 Q2, ongoing

Relevant line-Ministry, Malta Tourism Authority, Heritage Malta, project implementers & contractors

231

New media Ongoing

Public inquiries Ongoing

Info events Ongoing

Media: press releases, articles, interviews, advertising of particular schemes

Ongoing

Publications: leaflets / posters re. particular schemes

2004 Q1, ongoing

New media Ongoing

Public inquiries Ongoing

2.1

Employability & Adaptability (ESF)

Partners, potential contractors, general public, women, unemployed, target sector workers, education system, business organisations, trade unions, women’s / sectoral interest groups & NGOs

Info events Ongoing

Relevant line-Ministry, Employment & Training Corporation, Malta College of arts, Science and Technology, Fisheries Conservation & Control Division, project implementers & contractors

Media: press releases, articles, interviews (incl. daytime radio), advertising of particular schemes

Ongoing

Publications: leaflets / posters re. particular schemes

2004 Q1, ongoing

New media Ongoing

Public inquiries Ongoing

2.2 Gender Equality (ESF)

Partners, potential contractors, general public, working & non-working women, education system, business organisations, trade unions, women’s interest groups & NGOs

Info events Ongoing

Relevant line-Ministry, National Commission for the Promotion of Equality for Men and Women, Employment & Training Corporation, Malta College of Arts, Science and Technology, project implementers & contractors

Media: press releases, articles, interviews, advertising of particular schemes

Ongoing

Publications: leaflets/posters re. particular schemes

2004 Q1, ongoing

2.3 Lifelong Learning & Social Inclusion (ESF)

Partners, potential contractors, general public, unemployed, disabled persons, education system, health sector,

New media Ongoing

Relevant line-Ministry, Malta Enterprise, Malta Tourism Authority, Employment & Training Corporation, WasteServ Malta, Malta Council for Science &

232

Public inquiries Ongoing business & tourism organisations, research organisations, trade unions, interest groups & NGOs

Info events Ongoing

Technology, (APPOGG), project implementers & contractors

Media: press releases, articles, interviews, advertising of particular schemes

Ongoing

Publications: leaflets / posters re. particular schemes

2004 Q1, ongoing

New media Ongoing

Public inquiries Ongoing

3.1

Investment in Agricultural Holdings (EAGGF)

Partners, farmers, general public, farmers’ organisations / cooperatives, farm service providers, rural interest groups & NGOs

Info events: seminars for partners, interest groups, NGOs

Ongoing

MRAE Rural Development Department, project implementers & contractors

Signage: billboards / plaques as required by Regulation

Billboards during construction, plaques afterwards

Media: press releases, articles, interviews, advertising of particular schemes

Ongoing

Publications 2004 Q1, ongoing

New media Ongoing

Public inquiries Ongoing

3.2

Improving the Processing & Marketing of Agricultural Products (EAGGF)

Partners, farmers, general public, farmers’ organisations / cooperatives, farm service providers, food processors, business organisations, rural interest groups & NGOs

Info events: seminars for partners, interest groups, NGOs

Ongoing

MRAE Rural Development Department, project implementers & contractors

233

Media: press releases, articles, interviews, advertising of particular schemes

Ongoing

Publications: leaflets / posters re. Particular schemes

2004 Q1, ongoing

New media Ongoing

Public inquiries Ongoing

3.3.1

Fleet Adjustment: Fleet Renewal & Modernisation, Adjustment of Fishing Effort including Small-Scale Coastal Fishing (FIFG)

Partners, fishermen, general public, fishermen’s organisations / cooperatives, boatyards, fishing service providers, maritime interest groups & NGOs

Info events: seminars for partners, interest groups, NGOs

Ongoing

MRAE Fisheries Conservation & Control Division, project implementers & contractors

Signage: billboards/ plaques as required by Regulation

Billboards during construction, plaques afterwards

Media: press releases, articles, interviews, advertising of particular schemes

Ongoing

Publications: leaflets/ posters re. Particular schemes

2004 Q1, ongoing

New media Ongoing

Public inquiries Ongoing

3.3.2

Structures: Fish Marketing & Processing, Aquaculture, Fishing Port Facilities (FIFG)

Partners, potential contractors (Malta & EU), fishermen, general public, ports, fishermen’s organisations/ cooperatives, fish marketers, food processors, aquaculture companies, maritime interest groups & NGOs

Info events: seminars for partners, interest groups, NGOs

Ongoing

MRAE Fisheries Conservation & Control Division, project implementers & contractors

4.1

Basic Infrastructure &

Partners, potential contractors (Malta & EU), general public,

Signage: billboards / plaques as required by Regulation

Billboards during construction, plaques afterwards

Ministry for Gozo, Malta College of Arts, Science and Technology, University of Malta,

234

Media: press releases, articles, interviews, church newsletters, community radio

Ongoing

Publications Ongoing

New media Ongoing

Public inquiries Ongoing

Development of the Tourism Sector (ERDF)

tourism / business organisations, Gozo interest groups & NGOs

Info events Ongoing

project implementers & contractors

Media: press releases, articles, interviews, church newsletters, community radio

Ongoing

Publications: leaflets / posters re. particular schemes

Ongoing

New media Ongoing

Public inquiries Ongoing

4.2 Human Resources (ESF)

Partners, potential contractors (Malta & EU), general public, women, students, disabled persons, business organisations, trade unions, education system, Gozo interest groups & NGOs

Info events Ongoing

Ministry for Gozo, Malta College of Arts, Science and Technology, Employment & Training Corporation, University of Malta, project implementers & contractors

Visual identity: guidelines for all projects & design of logo(s) for SFs

2004 Q1

Signage: display stands for conferences / exhibitions

2004 Q1

Media: press releases, conferences, articles, interviews

Ongoing

5.1 & 5.2

Technical Assistance (ERDF & ESF)

Programme-wide info for partners, general public, all target groups

Publications: SF booklet (jointly with MIC), leaflet, quarterly SF newsletter, poster, short video

Ongoing updates / newsletters

PPCD, in co-operation with MIC, EU Commission, DOI

235

New media: SF website, CD-ROMs, e-mail newsletters etc

Public inquiries: telephone enquiries, info to partners

Immediate

Info events: MIC annual conference, other conferences / seminars, exhibitions

Ongoing

236

17.4.2 Tasks17.4.2 Tasks17.4.2 Tasks17.4.2 Tasks

9. The FB should:

- inform and consult the MA about all media activities in advance prior to the

launching of project;

- inform the appropriate national and/or local media when projects part-financed

by Structural Funds are launched and during the main phases of

implementation; (steps involved may include press releases, press conferences,

radio & television commercials, articles & supplements in the most suitable

newspapers & or magazines and site visits);

- keep copies of articles, news items, TV commercials, Video clips, cds and

whenever possible send copies together with the Publicity Report (Section 17.8

of this chapter) to the MA;

- ensure that all advertising, press releases and other materials for the media

includes a balanced reference to the EU’s contribution and the purpose(s) of the

Fund(s) concerned and appropriate collaboration with the Commission’s office in

the country concerned must be ensured.

- report on communication actions undertaken in their progress report and future

activities to the Managing Authority on a quarterly basis (Publicity Report-

Section 17.8 of this chapter)

- send a nil report to the Managing Authority even if no progress is made

(Publicity Report – Section 17.8 of this chapter);

- where use is made of advertising inserts, the participation of the European

Union shall be clearly indicated.

10. The Managing Authority should:

- endeavour to ensure that information and publicity material is presented in a

uniform fashion and in accordance with the rules on the means of information

and publicity;

- make use of its website (http://www.ppcd.gov) that has been launched since

2002, and update it accordingly with any developments and other information

about the Structural Funds;

- inform the media in the most appropriate way about the structural assistance

part financed by the Union. (This information shall include a balanced reference

237

to the Union’s contribution and the messages shall state the tasks of each Fund

by setting out the specific priorities).

- present the publicity report to the Monitoring Committee;

- send the Commission all the information which it needs to take into account for

its annual report as provided for in Article 45 of the Regulation (in accordance

with Article 46 of EC regulation No 1260/1999). Such information must enable

the Commission to ascertain that the provisions of this Regulation have been

complied with.

11. The Monitoring Committee should:

- ensure that there is adequate information about their work. (Wherever possible,

they shall keep the media informed of the progress of the assistance packages

for which they are responsible. Contacts with the press shall be under the

responsibility of the chairman);

- make appropriate arrangements when important events are held in connection

with the Monitoring committee’s meetings, such as high-level meetings or

inaugural sessions. (The Commission and its offices in the Member States shall

be kept informed of the arrangements);

- debate the annual implementation report referred to in article 37 of EC

Regulation No 1260/1999 which, in accordance with Article 35 of the Regulation,

must contain a section on information and publicity.

17.5. Language17.5. Language17.5. Language17.5. Language

12. The language used can be Maltese or English or both, depending on the

target audience and the nature of the publicity action. The FBs are

encouraged to use the Maltese language to ensure the widest audience

possible. In the case of the Maltese language, the Maltese translation of EC

Regulation 1260/99 and EC Regulation 1159/2000 should act as reference

guide. The latter is available in Maltese online:

http://europa.eu.int/servlet/portail/RenderServlet?search=DocNumber&lg=mt&nb_d

ocs=25&domain=legislation&coll=&in_force=NO&an_doc=2000&nu_doc=1159&type

_doc=Legislation

238

17.6 Logos, Billboards and Commemorative Plaque17.6 Logos, Billboards and Commemorative Plaque17.6 Logos, Billboards and Commemorative Plaque17.6 Logos, Billboards and Commemorative Plaquessss

13. In addition to the standard EU requirements which include the EU flag, the

Maltese emblem is the official logo for Malta’s Structural Funds Programme

2004-2006. For the Malta emblem, the National Coat of Arms shall be used.

OPM circular No/17/99 (OPM/1163/63) explains the use of the Coat of Arms.

In general, project leaders are to use the Maltese emblem in black and white

(as per OPM circular No 17/99). The circular may be accessed from the

following link:

http://intra.gov.mt/genericdata.asp?pagecode=21&SubCategory=2&Data=954

Non-government departments can obtain a copy of the circular from the

Directorate for Corporate Services of their respective Ministry.

14. As regards the EU emblem, the blue rectangular flag with twelve gold stars

(situated at equal intervals which form an invisible circle) should be used. If

only black is available, the EU flag should be presented in a black outline

rectangle, white background and black stars. In the event that (Reflex) blue

is the only colour available, the stars may be reproduced in negative white

and the field 100% blue. For further information please consult the following

website:

http://europa.eu.int/abc/symbols/emblem/index_en.htm

For further information the FB may contact the MA.

It is important to note that the use of the Coast of Arms is regulated by law

and it can only be reproduced in relation to EU Structural Funds.

European Social Fund:

Structural Funds Programme for Malta 2004-2006

Tender co-financed by the European Union

European Social Fund (ESF)

Co-financing rate: 75% EU Funds; 25% Government of

Malta

239

Fond Soëjali Ewropew:

Programm ta’ Fondi Strutturali għal Malta 2004-2006

Offerta ko-finanzjat mill-Unjoni Ewropea

Fond Soëjali Ewropew (FSE)

Rata ta’ Ko-finanzjament : 75% Fondi UE; 25% Gvern

ta’ Malta

European Regional Development Fund:

Structural Funds Programme for Malta 2004-2006

Tender co-financed by the European Union

European Regional Development Fund (ERDF)

Co-financing rate: 75% EU Funds; 25% Government of

Malta

Fond Ewropew Għall-I Ŝvilupp Reājonali:

Programm ta’ Fondi Strutturali għal Malta 2004-2006

Offerta ko-finanzjat mill-Unjoni Ewropea

Fond Ewropew għall-IŜvilupp Reājonali (FEśR)

Rata ta’ Ko-finanzjament : 75% Fondi UE; 25% Gvern

ta’ Malta

240

Cohesion Fund:

Structural Funds Programme for Malta 2004-2006

Tender co-financed by the European Union

Cohesion Fund

Co-financing rate: 75% EU Funds; 25% Government of

Malta

Fond ta’ KoeŜjoni:

Programm ta’ Fondi Strutturali għal Malta 2004-2006

Offerta ko-finanzjat mill-Unjoni Ewropea

Fond ta’ KoeŜjoni

Rata ta’ Ko-finanzjament : 75% Fondi UE; 25% Gvern

ta’ Malta

The symbols may also be downloaded from the following websites:

http://europa.eu.int/abc/symbols/emblem/graphics1_mt.htm (Maltese Version)

http://europa.eu.int/abc/symbols/emblem/graphics1_en.htm (English Version)

http://doi.gov.mt/EN/state/symbols.asp (colour)

http://www.coe.int/02/LOGO/DOWNLOADLOGOE.asp

15. In addition to the logo, the FBs are to ensure that reference is made to the

source of financing (Structural Funds Programme for Malta 2004-2006), to

the specific fund (e.g. European Regional Development Fund) and where

241

applicable to the Community co-financing rate (without going into exact

amounts).

17.6.1 Billboards17.6.1 Billboards17.6.1 Billboards17.6.1 Billboards

16. If the applicant is implementing an infrastructural investment project:

� a billboard should be erected at or beside the site of the projects

involved during construction which would be replaced by a permanent

commemorative plaque within 6 months of completion of the project.

17. Billboards must be of a size which is appropriate to the scale of the operation

and must include a space reserved for the indication of the European Union's

contribution.

18. The section of the billboard reserved for the EU contribution must meet the

following criteria:

- it shall take up at least 25 % of the total area of the billboard;

- it shall bear the Community emblem and the following text, to be set out as

shown below:

19. The lettering used to indicate the financial contribution of the European Union

must be at least the same size as the lettering indicating involvement of the

national authorities, although the typeface may be different.

20. In the case of physical investments in commercial business premises,

commemorative plaques shall be installed for a period of one year. FBs

managing grant schemes are to ensure that the final recipients are informed

of such obligations.

242

17.6.2 Posters17.6.2 Posters17.6.2 Posters17.6.2 Posters

21. For projects part-financed by Structural Funds in the fields of training and

employment measures mainly:

- development of human resources;

- training schemes;

- vocational training and employment;

- investments in firms and rural development,

posters must be displayed on the premises of bodies implementing or

benefiting from the projects indicating the EU’s contribution and possibly the

Fund concerned.

17.6.3 Publicity of Schemes17.6.3 Publicity of Schemes17.6.3 Publicity of Schemes17.6.3 Publicity of Schemes

22. In the case of schemes, the publicity of the schemes (newspapers, brochures

etc) and forms issued concerning the launch of application for grant and

granting of assistance to final beneficiaries shall indicate the part financing by

the Community and the respective EU Structural Fund.(ERDF, ESF, EAGGF or

FIFG) The notification of aid sent to beneficiaries shall mention the amount

or percentage of the assistance financed by the relevant EU Structural Fund.

17.6.4 Notification17.6.4 Notification17.6.4 Notification17.6.4 Notification to beneficiaries to beneficiaries to beneficiaries to beneficiaries

23. All notifications of aid to beneficiaries must mention that it is part-financed by

the European Union and may state the amount or percentage of finance

provided by the Fund concerned. However, where space permits in addition

to stating the fact of the EU’s contribution, the purpose of each Structural

Fund should be described using the following descriptions or similar phrases

in Maltese and English:

� European Regional Development Fund (ERDF):

- ‘Helping to reduce the gap between development levels and living

standards among the regions and the extent to which least-favoured

regions are lagging behind.’

- ‘Helping to redress the main regional imbalances in the Community by

participating in the development and structural adjustment of regions

whose development is lagging behind and the economic and social

conversion of regions.’

� Fond Ewropew għall-IŜvilupp Reājonali (FEśR)

- “Għajnuna għat-tnaqqis tal-vojt bejn livelli ta’ Ŝvilupp u standards ta’ l-

243

għixien fost ir-reājuni u l-limitu li għalih reājuni inqas iffavoriti qegħdin

lura.”

- “Għajnuna sabiex jiāu rranāati l-iŜbilanë reājonali fil-Komunita’ bil-

parteëipazzjoni fl-iŜvilupp u l-aāāustament strutturali ta’ reājuni li l-

iŜvilupp tagħhom qiegħed lura u l-konverŜjoni ekonomika u soëjali ta’

reājun”

� European Social Fund (ESF):

- ‘Helping to develop employment by promoting employability, the business spirit and equal opportunities and investing in human resources.’

� Il-Fond Soëjali Ewropew (FSE)

- “Għajnuna għall- iŜvilupp ta’ l-impjieg billi tiāi promossa l-possibilita’ ta’; l-

impieg, l-ispirtu kummerëjali u l-opportunitajiet ugwali u l-investiment

f’ri Ŝorsi umani”

� European Agriculture Guidance & Guarantee Fund (EAGGF): - ‘Helping to preserve the link between diversified farming and the land.’

- ‘Improving and supporting the competitiveness of agriculture as a key activity in rural areas.’

- ‘Ensuring the diversification of the economy in rural areas.’ - ‘Helping to keep thriving communities in rural areas.’ - ‘Preserving and improving the environment, the landscape and the rural

heritage.’

� Il-Fond Ewropew għall-Gwida u Garanzija Agrikola (FEGGA)

- “Għajnuna għall-preservazzjoni tar-rabta bejn biedja diversifikata u r-raba.

Titjib u sostenn tal-kompetittivita’ ta’ l-agrikoltura bħala attivita’ prinëipali

f’ Ŝona rurali.”

- “Għajnuna għall komunitajiet f’Ŝoni rurali, sabiex jibqgħu jimxu ‘l quddiem.

Il-Preservazzjoni u t-titjib ta’ l-ambjent , il-paesaāā u l-wirt naturali.”

� Financial Instrument for Fisheries Guidance (FIFG):

- ‘Helping achieve a sustainable balance between marine resources and

their exploitation.’

- ‘Modernising fishing structures to ensure the future of the industry.’

- ‘Helping to maintain a dynamic and competitive fishing industry and to

revitalise areas dependent on fishing.’

- ‘Improving the supply and exploitation of fishery products.’

� L-Istrument Finanzjarju għall-Gwida tas-Sajd (SFGS)

- “Għajnuna sabiex jintlaħaq bilanë sostenibbli bejn riŜorsi marini u l-

244

esplojtazzjoni tagħhom ”

- “Il-modernizzazzjoni ta’ strutturi tas-sajd sabiex jiāi assigurat il-futur ta’ l-

industrija”

17.6.5. Publications and Information Materia17.6.5. Publications and Information Materia17.6.5. Publications and Information Materia17.6.5. Publications and Information Materialslslsls

24. Publications (such as booklets, leaflets and newsletters) about projects part-

financed by the Structural Funds must contain a clear indication on the title

page of the European Union's participation and, where appropriate, that of

the Fund concerned.

25. The Community emblem must also appear if a national or institution’s

emblem is used.

26. Publications must include references to the body responsible for the

information content and to the Managing Authority responsible for the

programme.

27. For websites and other electronic or audio-visual materials, the above

principles shall also apply by analogy. Websites concerning the Structural

Funds must:

- mention the contribution of the European Union and, if appropriate, that of

the Fund concerned at least on the home page;

- include a hyperlink to the other Commission websites concerning the

Structural Funds;

- consult and obtain approval from CIMU.

17.6.6 Information events17.6.6 Information events17.6.6 Information events17.6.6 Information events

28. Organisers of information events (such as conferences, seminars, fairs and

exhibitions) concerning projects part-financed by the Structural Funds shall

make the EU contribution explicit by displaying the European flag in meeting

rooms and using the Community emblem on documents. The Commission’s

office in the Member States shall assist, as necessary, in the preparation and

implementation of such events.

29. It is important to note that costs such as catering for information events, are

not eligible for financing through Structural Funds.

245

17.6.7 Media Space17.6.7 Media Space17.6.7 Media Space17.6.7 Media Space

30. Air space(TV/ Radio) is very expensive and should be used only if it really

adds value to the project. In general the use of air space should have the

prior approval of the MA. FBs are however, encouraged to make use of air

space that is offered for free (interviews, participation in programmes etc…)

17.717.717.717.7 Tender adverts issued by DoCTender adverts issued by DoCTender adverts issued by DoCTender adverts issued by DoC

31. Project Leaders are to ensure that such adverts comply with the hereunder.

The following text is to be included in adverts issued and paid by the Department of

Contracts featuring on the Government Gazette for tenders relating to the Structural

Funds Programme 2004-06:

Select one of the following as appropriate:

• This tender is co-financed by the European Union under the European

Regional Development Fund (2004-2006);

• Din l-offerta hija ko-finanzjata mill-Unjoni Ewropea taħt il-Fond Ewropew

għall- IŜvilupp Reājonali (2004-2006);

• This tender is co-financed by the European Union under the European Social

Fund (2004-2006);

• Din l-offerta hija ko-finanzjata mill-Unjoni Ewropea taħt il-Fond Soëjali

Ewropew (2004-2006);

• This tender is co-financed by the European Union under the Cohesion Fund

(2004-2006);

• Din l-offerta hija ko-finanzjata mill-Unjoni Ewropea taħt il-Fond ta’ KoeŜjoni

(2004-2006).

17.17.17.17.8888 Eligible Expenses Eligible Expenses Eligible Expenses Eligible Expenses

32. It is highly recommended that the FB should consult the MA to ensure

eligibility of expenditure undertaken for publicity.

246

17.17.17.17.9999 Template for Publicity Report Template for Publicity Report Template for Publicity Report Template for Publicity Report

33. The MA will send a request to all FBs to fill in the template for the publicity

report every quarter prior to the meetings of the Monitoring Committee. The

template is will assist the monitoring co-ordinator within the MA to monitor the

publicity actions undertaken by the respective project leaders.

34. The FBs must retain both hard and soft copies of the publicity material

produced for the project. The FB should also forward soft copies of the publicity

material to the respective programme manager of the MA.

247

17.17.17.17.9999 Template for Publicity Report Template for Publicity Report Template for Publicity Report Template for Publicity Report

Information and Publicity ActionsInformation and Publicity ActionsInformation and Publicity ActionsInformation and Publicity Actions

Priority:

Measure:

Project

Number:

Project Title:

Tool/ActionTool/ActionTool/ActionTool/Action Access PointsAccess PointsAccess PointsAccess Points Presentation Presentation Presentation Presentation

Mode *Mode *Mode *Mode * Audience **Audience **Audience **Audience **

Date of Date of Date of Date of

Implementation Implementation Implementation Implementation

************

Mention of EU Mention of EU Mention of EU Mention of EU

Contribution Contribution Contribution Contribution

****************

National and Local

Newspapers

Industry/ Business/

Organisation

Journals and

Magazines

Print Media

International

Publications

National TV and

Radio

Broadcast

Media Local Radio

Domestic Events

Conferences Events

Exhibitions

Local Websites Internet and

Websites International

Websites

Sectoral business

groups

Seminars,

Conferences or

Workshops Organised ad hoc

248

Participation during

trade exhibitions,

fairs, national

events, etc..

Promotional

Material

Supplied during

national events or

events focused at

different target

groups (ex: pens,

note pads, etc..)

Direct Mail

Actions

Distribution to

households on a

national or regional

basis

Sectoral, business

groups or interests

Posters

On site

Project Signage

Billboards

Plaques

On site

Other *****

* Choose between advertisements, articles, interviews, supplements and enclosed leaflets in national/Gozo

newspapers, discussion programmes and chat shows, information stands, press releases,

leaflets/publications/supplements/information on projects and events, tendering arrangements, presentations,

printed information on stationery, printed posters for display, project signage, plaques, etc...

** Describe the target groups, for example, the general public, young people, enterprises, fishermen etc.

*** Actual, in the case of implemented information and publicity

actions.

Actual/ Rough estimate in the case of planned information and publicity actions

****Specify whether it consists of an emblem, text "Project Part-Finaced by the European

Union

***** Please

specify

249

18. Communication

1. The following lines of communication must be followed.

2. Only the MA and the PA will directly communicate with the European

Commission on all issues concerning Structural Funds.

3. As secretariat to the MC, it is only the MA that will communicate with the

Monitoring Committee on issue pertaining to Structural Funds.

4. In the case of ERDF projects, the MA will communicate with the FB and the EU

Affairs Directors on issues pertaining to the individual projects. Any

communicate between the FB and the MA must be copied to the EU Affairs

Director.

5. In the case of ESF projects, the FB should first communicate with the ESF IB

at MFSS. Queries and replies may be copied to the relevant programme

manager at the MA.

6. In the case of EAGGF and FIFG projects, the FB should first communicate with

the IB at the MRAE. Queries and replies maybe copied to the relevant

programme manager at the MA.

7. The FB must consult with the DoC on issues pertaining to the tenders and

contracts.

8. The FB must consult with the SAMB on issues pertaining to state aid.

9. The FB must consult with MEPA on environmental and planning issues.

10. The FB must consult with the Commission for the Promotion of Equality

between Men and Women on issues pertaining to equal opportunities.

11. The FB must consult with the Department of VAT on issues pertaining to VAT.

Any clarifications should be submitted in writing (even by e-mail) and should

be copied to the relevant Programme Manager at the MA, PA, IB, the DoC and

Assistant Director (Capital Expenditure) MFIN.

250

12. The FB, Director EU Affairs and the Accounting Officers must ensure

continuous communication to ensure that the payment process is moving

ahead accordingly and within acceptable timeframes.

13. Any queries sent to the MA and/ or IB must be sent in writing. Clarifications to

these queries must be done in writing and should be filed in the project

dossier.

14. If an officer working in a stakeholder organisation, is transferred to another

stakeholder organisation, the officer must inform the MA accordingly. The

respective line Ministry must ensure that the MA has been informed

accordingly. The MA will change the rights to the Structural Funds Database

for the officer in question and will give rights according to the officer’s new

post. If the officer takes up a new post which does not involve the

management/implementation of Structural Funds, the officer must inform the

MA accordingly and access rights to the SFD will be terminated.

251

19. Delegation of Authority

1. It is highly recommended that due to the tight deadlines set by the verification

and certification processes, the project leader should delegate authority to

officials at the appropriate levels. The delegation of authority should only

relate to specific events such as when the project leader is:

• Abroad

• On Sick Leave

• On Vacation Leave

2. If the Director, EU Affairs of the respective Line Ministry will be away from the

office, it is recommended that authority is delegated to an officer of the EU

Affairs Directorate.

3. It is recommended that template 19.1 below is used when delegating authority

and both parties should sign the form.

4. Given that the covenant is signed between the MA and the Permanent

Secretary of the respective IB, a delegation of authority has to be sent to the

MA in the case that a specific Directorate has been designated to carry out the

functions of the IB.

5. With respect to point 4 above, the relevant delegation of authority is to be

signed by both sides that is the Permanent Secretary and the Head of the

delegated Directorate. The MA is to be informed through a letter (template

19.1) which Directorate will carry out these functions and the official/s

responsible and relevant copies are to be kept in the IBs’ files.

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19.1 Delegation of Authority Form19.1 Delegation of Authority Form19.1 Delegation of Authority Form19.1 Delegation of Authority Form

To Whom It May Concern

This is to notify that _____(name of person)_______________, who holds the

position of ___(position of person being authorised)_ within _____(name of

organisation/Ministry)_____, is hereby authorised to act and sign on behalf of

_(name of person delegating the authority)_ who holds the position of _(position of

person delegating the authority)_ within _______(name of

organsaiton/Ministry)_______, on all matters related to the EU co-financed project

____(name of project)________ while the latter is away from the office on duty travel

overseas, on vacation leave or on sick leave.

In addition, __(name of person delegating the authority)_delegates the authority to

(position of person being authorised)__ to participate in meetings related to the

above mentioned EU co-financed project.

Delegated by: (Name in block letters)

______________________

_____________________

Signature Position

Acceptance by: (Name in block letters)____

_______________________ _______________________

Signature Position

Date

253

19.2 Termination 19.2 Termination 19.2 Termination 19.2 Termination and Change and Change and Change and Change of Project Leadershipof Project Leadershipof Project Leadershipof Project Leadership

6. Should there be a change in project leadership, the current project leader and

the newly appointed project leader, should draft a letter informing the MA that

the current project leader will be terminating his/her project leadership,

specifying the name of the officer who will be taking over the project

leadership and the date when the project leadership is handed over. The letter

must be signed by both outgoing and newly appointed project leaders. This

procedure also applied for project leaders who will be retiring from their post

within the FB organisation. The respective Line Ministry must ensure that the

above procedure has been undertaken whenever there is a change in project

leadership.

254

Annex1 - Checklists

Annex 1.1 Checklist of the SPD Annex 1.1 Checklist of the SPD Annex 1.1 Checklist of the SPD Annex 1.1 Checklist of the SPD

This checklist must be filled in by the MA

Drafting of the Single Programming Document Yes No

Did the MA draw up an economic and social analysis of all sectors in Malta?

Did the MA draw up a strategy containing priorities and measures based on

the needs identified in the socio-economic analysis?

Did the MA draw up the relevant indicators and financial tables in line with

the identified priorities and measures?

Did independent evaluators carry out an ex-ante evaluation of the strategy?

Did the MA coordinate the finalisation of the first draft of the SPD in line with

Point 5 of Section 3.1.1?

Did the MA send the draft SPD to MCESD for feedback?

Did the MA present the SPD to the IMC for discussions and recommendation

to Cabinet for approval?

Did the MA submit the draft SPD to the European Commission?

Did the MA revise the SPD on the basis of the negotiations held with the

European Commission?

Did the European Commission issue a letter approving the SPD?

________________________ _________________________

Signature Date

________________________

Designation

255

Annex 1.2 Annex 1.2 Annex 1.2 Annex 1.2 Checklist of the PCChecklist of the PCChecklist of the PCChecklist of the PC

This checklist must be filled in by the MA

Programme Compliment Yes No

Did the MA draft the PC to the SPD in line with the Structural Funds

Vademecum?

Did the MA present the PC to the MC for approval?

Did the MC approve the PC?

Did the MA submit the approved PC to the European Commission within three

months of the formal approval of the SPD?

________________________ _________________________

Signature Date

________________________

Designation

256

Annex 1.3Annex 1.3Annex 1.3Annex 1.3 Checklist Checklist Checklist Checklist Aid Schemes to the Private SectorAid Schemes to the Private SectorAid Schemes to the Private SectorAid Schemes to the Private Sector

This checklist must be filled in by the FB throughout the project implementation

Aid Schemes to the private sector implementation checklist Yes No

Project Selection

Has the FB issued a call for proposals for the intended target group?

Has the call for applications been adequately publicised?

Can the application forms be downloaded from a website?

Has the FB issued a receipt for every application form received?

Has the FB appointed a Selection Committee that will be responsible for the

selection of the projects?

Has the appointed Selection Committee evaluated and ranked the project

proposals in accordance with the selection criteria of the project ?

Has the FB published a list of the selected projects?

Has the FB informed the successful project applicants that their project has

been chosen?

Has the FB informed the unsuccessful project applicants that their project has

not been chosen giving the reasons why the project was not chosen?

Project Implementation

Has the FB issued a letter of agreement to the successful applicants?

Does the letter of agreement contain:

• the amount of the grant

• details of the project

• implementation timeframe

• submission of invoice for reimbursement with indications on content

of invoices (Net Amount + Vat=Total Amount)

• clause on recovery of funds

• conditions of the grant

• clause on verification and checks

On receiving an invoice and receipt/tax invoice, did the FB check that the

invoice is in line with the conditions of the letter of agreement?

Did the FB check that works or delivery of goods have effectively been

carried out?

Project Finalisation

Did the FB undertake a check on at least 5% of all invoices?

Did the FB undertake a check of 100% on all FRs?

257

Signature Date

________________________

Designation

Annex 1.4Annex 1.4Annex 1.4Annex 1.4 Checklist Checklist Checklist Checklist for Bifor Bifor Bifor Bi----annual annual annual annual Reports Reports Reports Reports

This checklist must be filled in by Monitoring Co-ordinator of the MA at the end of

year

Bi-annual Project Summary Update for the Projects Yes No

Have all the Final Beneficiaries of the respective Measure prepared

the bi-annual updates for the projects on the SFD when requested

to do so by the MA?

Bi-annual Project Process Report by Project

Yes No

Have the Programme Managers of the MA prepared the bi-annual

project progress reports for their respective projects?

Quarterly Reports by Measure for Priority 4

Yes

No

Has the Secretariat of the RPC prepared a draft report by

Measure?

Has the Regional Project Committee (Gozo) approved the report?

Has the report been passed on to the MA?

_______________________ _____________________

Signature Date

_______________________

Designation

258

Annex 1.5Annex 1.5Annex 1.5Annex 1.5 Checklist Checklist Checklist Checklist for SMSC reportsfor SMSC reportsfor SMSC reportsfor SMSC reports

This checklist must be filled in by the Secretary of each SMSC following each report

Reports by Sectoral Monitoring Sub-Committees

Yes No

Did the SMSCs meet within the time schedule ?

Did the SMSC fill in Template 6.1 of Annex 6 (Action To be taken

by SMSC) following the meeting of the SMSC?

Prior to the next SMSC meeting, did the SMSC fill in Template 6.2

of Annex 6 (Action taken by SMSC)?

Did the SMSC submit a sectoral impact report to the MA?

Did the MA issue a receipt of the report?

Has MA made any recommendations for follow-up?

Have recommendations been passed on to the SMSC members ?

Has action been taken ? (or recommendations)

_______________________ _____________________

Signature Date

_______________________

Designation

259

Annex 1.6Annex 1.6Annex 1.6Annex 1.6 Checklist Checklist Checklist Checklist for Annual Reportsfor Annual Reportsfor Annual Reportsfor Annual Reports

This checklist must be filled in by the MA

Annual Reports Yes No

Have the IBs provided the MA with the data required for the

annual report?

Has the PA submitted the financial information required to the MA?

In the case of Priority 4, has the Secretariat of the RPC prepared a

draft annual report by measure?

Has the RPC approved the annual report?

Has the Secretariat of the RPC submitted the final annual report to

the MA?

Has the MA received all the information from the IBs, PA and the

annual report by measure for Priority 4 from MGOZ?

Has the MA received all the information from the PA

Has the MA received the annual report by measure for Priority 4

from the RPC?

Has the MA prepared an annual implementation report on the

progress achieved?

Has the draft annual report been sent to all MC members?

Has the MC approved the annual report?

Has the MA submitted this report to the European Commission?

Has the Commission sent a notifying receipt upon submission of

the annual report?

Did the Commission send any recommendations in reply to the

annual report submitted by the MA?

If the Commission has put forward any recommendations, has the

MA communicated the recommendations to the IBs, the relevant

stakeholders and the RPC?

Has action been taken in response to these recommendations?

Has the MA been informed of the any action taken in response to

the Commission’s recommendations?

If the Commission has put forward any recommendations, has the

MA prepared a draft detailed response to every recommendation?

Has the MA submitted these draft replies to the MC for approval?

Has the MC approved the replies?

If the MC has approved the replies, has the MA submitted these

replies to the European Commission?

Has the Commission made further recommendations?

260

If so, has the MA demonstrated that it has taken the necessary

steps?

If the MA did not take any action in reply to the Commission’s

recommendations, did the MA explain why such steps have not

been taken?

_______________________ _____________________

Signature Date

_______________________

Designation

261

Annex 1.7Annex 1.7Annex 1.7Annex 1.7 Checklist Checklist Checklist Checklist for Final Reportfor Final Reportfor Final Reportfor Final Report

This checklist must be filled in by the MA

Final Report Yes No

Has the MA prepared a final report for the PC for the period 2004-

2006?

Has the draft final report been passed on to the MC members

Has the MC approved the final report?

Has the MA submitted the final report to the European

Commission?

Did the Commission send a notification receipt of the final report?

Did the Commission send any recommendations in reply to the

final report submitted by the MA?

_______________________ _____________________

Signature Date

_______________________

Designation

262

Annex 1.8Annex 1.8Annex 1.8Annex 1.8 Checklist Checklist Checklist Checklist for for for for certification certification certification certification by PA by PA by PA by PA –––– Stage 1 Stage 1 Stage 1 Stage 1

Programming Period: Name of Fund:

Period covered by the Certification Process: from to

Yes No N/A

1.0 Documentation made available by MA/ IB/ FB

1.1 Statement of expenditure by measure

1.2 Statement of expenditure by project

1.3 Signed declaration by MA/IB and FB

1.4 Invoices/Invoice Status Certificate in the database

1.5 Are on the spot checking reports available on the database

2.0 Declaration from MA/IB/FB

Have the MA / IB provided the following assurances in regards to sound financial

management:

2.1 Prevention, detection, correction and notification of irregularities

2.2 Compliance with applicable rules re. Procurement, environment and

Equal opportunities.

2.3 Has the Audit Trail been maintained?

2.4 Has the delivery of service/products been confirmed?

2.5 Expenditure is in compliance with all relevant National and Community

rules particularly Reg. 448/04 .

3.0 Eligibility of Expenditure

Have the following been observed in the declarations referred to in Sec 2 above?

3.1 Expenditure is incurred in operations is eligible for funding (including the

eligibility period).

3.2 Expenditure is in line with the Letter of Offer.

3.3 Every expenditure is supported by a Debit Advice Payment Reference

number present in the SFD.

3.4 Are VAT/other taxes or charges eligible for financing (see Rule 7 of

Annex, EC Reg. 448/2004)?

3.5 Has the correct Rate of Exchange been applied throughout the SOE?

4.0 Recommendation

4.1 Can the Statement of Expenditure be forwarded to the next stage?

4.2 If 4.1 is yes, do you recommend the Certifying Officer to issue the

263

Certificate and Application for Payment?

___________

Assessment Officer – signature and name in block Date

Assistant Director – signature and name in block Date

264

Annex 1.9Annex 1.9Annex 1.9Annex 1.9 Checklist Checklist Checklist Checklist for for for for certification by PA certification by PA certification by PA certification by PA –––– Stage 2 Stage 2 Stage 2 Stage 2 Programming Period: Name of Fund: ______

Period covered by the Certification Process: from to

Yes No N/A

1.0 Documentation received

1.1 Statement of expenditure by measure

1.2 Statement of expenditure by project

1.3 Signed Stage I Checklist by Assessment Officer and Assistant Director

2.0 Certification Criteria reg 1260/99 Art 33

2.1 Has the Programme Complement been presented to the Commission?

2.2 Has the latest annual implementation report been forwarded?

2.3 Has the mid-term evaluation of the assistance been forwarded?69

2.4 Have recommendations made by the Commission on the annual

implementation report been acted upon?

2.5 Has State Aid been approved by Commission Decision?

2.6 Is there any suspension of payments?

2.7 If 2.7 is yes, suspend Certification Process?

3.0 Type of Request

3.1 Is it an interim request falling within the 95% co-financing threshold?

3.2 Is it a final request for the ultimo 5% balance?

3.3 If 3.2 is yes, have the following been executed:

3.4 Has the MA submitted the final implementation report to the

Commission?

3.5 Has the IAID submitted the Programme Winding-up Declaration?

4.0 Compilation of the Certificate and Application for Payment

4.1 Is the Statement of Expenditure by priority and measure satisfactory?

4.2 Have there been any recoveries since the last certified SOE?

4.3 If 4.3 is yes, have the relative amounts been taken into account?

4.4 Have the correct beneficiary’s bank details been included?

4.5 Has the Request for Payment been signed, stamped and dated?

4.6 Has the Certificate been signed, stamped and dated?

Date when Certificate, Statement of Expenditure and Application for payment have

been forwarded to the Commission _________________

265

Programme Manager – signature and name in block

Date

____________________________________________________________

Certifying Officer – signature and name in block

Date

266

Annex 1.10Annex 1.10Annex 1.10Annex 1.10 Checklist Checklist Checklist Checklist for Irregularitiesfor Irregularitiesfor Irregularitiesfor Irregularities

Detecting an Irregularity Yes No

Was an irregularity Detected?

If yes, who detected the irregularity? MA, PA, Treasury, DoC, IB,

line Ministry, FB, NAO, IAID or any other entity?

Please specify

Was the Structural Funds Irregularity Report filled in?

Was the Structural Funds Irregularity Report sent to the MA

copying in PA and IAID?

Upon receipt of report by the MA Yes No

Has the MA checked the Irregularity Report?

Has the MA completed the Report where necessary?

Upon receipt of the report by the IAID Yes No

Has the IAID checked the Irregularity report?

Has the IAID informed OLAF about the irregularity?

Has the IAID informed the MA of any decision suggested by the

Commission?

267

Annex 2 – Treasury Forms

Annex 2.1 TR/S-1

Form TR/S-1

(October 2004)

The Treasury Department

EU Financing Unit

Request for Payments [Structural Funds/Cohesion Fund]

Accounting Officers in Line Ministries shall

complete this form in full and submit to the

Treasury EU Financing Unit for payment

execution. In order to avoid unnecessary

delays it must be ensured that the relevant

supporting documents are attached.

Part I

Amount to be paid

inclusive of VAT

[as applicable]

Voucher

Number

[commitment as

generated by DAS]

Name of Final Recipient

[as indicated on invoice/claim]

VAT

Registration

Number

[if any] € F/currency

FOR

TREASURY USE

ONLY

[check list]

①

②

③

④

⑤

⑥

Print or type

To be completed by Accounting Officers in Line

⑦

268

⑧

⑨

⑩

⑪

⑫

⑬

⑭

⑮

Part II Append additional sheets as necessary.

� �

Signature of Officer Authorising Payments Capacity of Signatory

Authorised

� Make sure that you allow sufficient time – at least ten working

days – for the payment to reach the Final Recipient by due

date.

� Any enquiry regarding payments should be directed to the EU Date d d m m y y y y

Part III Received Checked Processed Remarks

FOR TREASURY

USE ONLY

A Photocopy of this Statement will not be accepted

269

Annex 2.2 TR/S-2

Form TR/S-2

(October 2004)

The Treasury Department

EU Financing Unit

Request for Payments (Aggregated Commitments)

[Structural Funds/Cohesion Fund]

Accounting Officers in Line Ministries shall

complete this form in full and submit to the

Treasury EU Financing Unit for payment

execution. In order to avoid unnecessary

delays it must be ensured that the relevant

supporting documents are attached.

Part I

Voucher

Number

[commitment as

generated by DAS]

Name of Final Recipient

[as indicated on invoice/claim]

VAT

Registration

Number

[if any]

Individual

Amounts

inclusive of VAT

(€)

Aggregated*

Amount

inclusive of VAT

(€)

FOR

TREASURY USE

ONLY

[check list]

①

②

③

④

⑤

⑥

⑦

Print or type

To be completed by Accounting Officers in Line

⑧

270

⑨

⑩

⑪

⑫

⑬

⑭

⑮

Part II Append additional sheets as necessary.

� �

Signature of Officer Authorising Payments

Capacity of Signatory

Authorised

� *Aggregated values must correspond to commitments as generated

by DAS.

� Make sure that you allow sufficient time – at least ten working

days – for the payment to reach the Final Recipient by due date.

� Any enquiry regarding payments should be directed to the EU Date d d m m y y y y

Part III Received Checked Processed Remarks

FOR TREASURY

USE ONLY

A Photocopy of this Statement will not be accepted

271

272

Annex 2.3 TR/S-9

Form TR/S-9(February 2004)

The Treasury Department

EU Financing Unit

Signature of

account holder� Date�

Name

Tick �

as

appropriate

Part III

Telefax Number Telephone Number

Address

Print or type

Details of Account Holder

Part I

Part II

Print or type

Details of Account Holder's Bank and Account

Number See Specific Instructions on page 2

Swift Code

Account Number

International Bank Account Number (IBAN) [obligatory]

Branch Address

Town/City and Post Code