AER Committee C Technical Seminar „Managing Structural Funds“ 14 October 2004 in Eger

1. Dortmund Essen Duisburg Cologne Düsseldorf Ruhr Region NRW Daniela Glimm-LükewilleObjective 2 Secretariat AER Committee C Technical Seminar „Managing Structural Funds“ 14 October 2004 in Eger Experiences from theObjective 2 Programme North-Rhine Westphalia

2. NRW Objective 2 Funding Area • The Objective 2 area comprises large parts of the Ruhr Area.

3. Programme Structure - Priorities Priority 1: Business and start-up finance (5 measures; 12.7 % of total budget) Priority 2: Innovation and development of competence (10/11 measures; 41.5 % of total budget) Priority 3: Innovation-related infrastructure (5 measures; 36.9 % of total budget) Priority 4: Support for particular target groups (4 measures; 7.6 % of total budget) Priority 5: Technical Assistance (1.3 % of total budget) • All in all, the programme has a total volume of 2 billlion Euro, of which about 1 billion Euro are EU-funds (ERDF: € 859.7 mio.; ESF: € 153.1 mio.). It is currently the second largest Objective 2 programme in Europe.Until now (30. June 2004), approximately 1.300 ERDF-projects have been committed (with 924  mio. Euro EU and Land contribution), as well asca. 1000 ESF-projects (with 116 mio. Euro EU and Land contribution).

4. Legal, political and and administrative framework General framework conditions • In Germany • Länder governments are legally responsible for regional policy • Länder dispose of own tax revenues and budget which can be used for economic development (e.g. co-financing of Structural Funds) • Democratic control by regional parliament (‘Landtag’) • Little or no interference of the federal government in regional policy (exception: ”joint task” of the federal and regional governments) • Structural funds programmed and managed by Land governments • In NRW • Traditionally high commitment of the Land government for domestic regional policy • EU structural funds mainly subsumed under existing regional aid schemes • Long tradition of regionalised structural policy, currently reorganisation of (sub-)regional structures aiming at integrating economic policy and labour policy • Monitoring committee is established at the Land-level

5. MONITORING COMMITTEEPolitical or executive directors level ManagingAuthority Ministry of Economic Affairs and Labour NRW Unit EU-Affairs andEU StructuralFunds Paying Authority NRW.BANK SectionPaying Authority Independent Body Ministry ofEconomic Affairs and Labour NRW Unit in Departm. f. Internal Services Audit Body NRW.BANK Section Audit Body Objective 2 Secretariat Commissionedto agiplan GmbH INTERMEDIATE BODIES Sectoral Ministries NRW.BANK SpecialAgencies Private Auditors Subordinate Bodies Administrative structures, NRW Objective 2 Programme 2000-06 About 70 !!

6. A very good management system and close dialogue with implementing bodies is of greatest importance! Legal, political and and administrative framework Programme management framework: Subsumed Implementation Structure Structural Fund resources are aligned closely to pre-existing policies, schemes and administrative structures • Advantages: • High involvement of regional structures • High expertise and good knowledge of local conditions in the implementing bodies • Only limited need to establish new structures • High degree of accordance with regional political strategies • Disadvantages: • Low “visibility” of Structural Funds programme; lack of own (strategic) profile • High effort for coordination and information transfer

7. Programme management - positive and negative experienceDaily management • Example: Monitoring • High degree of quantification of objectives • Extensive indicator system (financial and physical indicators) • Yearly updates • Close monitoring of financial project performance (n+2) • Monitoring of achievement of horizontal objectives • Regular „Traffic light reports“ to the Monitoring Committee • Advantages: • Close monitoring of project, measure and programme performance - early warning - early action • Disadvantages: • High effort for applicants and implementing bodies (online interface not yet in place) • Too many indicators which are partly not made use of • Difficulties: • Project assessment, especially concerning job creation, Horizontal Themes

8. Programme management - positive and negative experienceDaily management Example: Monitoring / Traffic Lights for commitments (priority level)

9. Programme management - positive and negative experienceFinancial management Example: prevention of automatic decommitment due to the n+2-Rule • Steps taken: • Direct contacting of intermediate bodies and of project managers, partly revision of annual tranches and formal agreement with project managers including annual automatic decommitment of non-spent funds and regular reporting to intermediate bodies; joint problem-solving, • Shifting of funds from 2004 to 2003 (2005 to 2004) for measures with high spending, • Mobilisation of additional funds for co-financing, • Establishment of endowment funds managed by intermediaries, • Retrospective funding (inclusion of eligible projects formerly funded through other sources), • Partial postponement of scrutiny of requests for payment, • Change of modalities for reimbursement of expenditures in income-generating projects, • Extension of the period for the submission of the payment requests at the federal government, • Review of projects in order to check whether co-financing previously declared as private could be accepted as public (higher intervention rates).

10. Programme management - positive and negative experienceFinancial management / control Example : The 'Prüfstelle' The 'Prüfstelle' (audit body) has bees established on a voluntary basis to guarantee an accompanying quality control. It carries out additional management system and project checks in order to identify potential problems or irregularities at an early stage. • Advantages: • Opportunity to prevent mistakes that might lead to financial corrections by the Commission later on • Awareness-raising and expert information concerning the financial rules and regulations for all persons involved in programme implementation • Disadvantages / Difficulties: • Project managers and programme implementing bodies often do not recognise that the control activities of the “Prüfstelle” are undertaken in order to support them and are not meant to be a formal, restrictive instrument. Thissometimes leads to a lack of cooperation.

11. Programme management 2007-2013 - opinion concerning the Commission‘s proposals (selected issues) • Agreement: • Attempts to simplify and decentralise Structural Policy (Mono-fund programmes, payments on priority-basis, etc.) • Disagreement: • Too little influence for regional level (but full risk) • Strategic reference framework – too detailed and too complex • Annual national progress reports - too cumbersome • Possible necessity of adaptations of OPs after annual consultation; right of initiativefor the Commission - too high administrative effort and lack of planning reliability • Co-financing only of public funds - private participation important (PPP), leverage effect would be reduced • N+2-Rule - no general rejection but need for flexibility in order not to impede innovative, high-quality approaches • Performance reserve - has not proved to be of value (no incentive for higher effectiveness); inappropriate indicators • Reserve for unexpected sectoral or local shocks: too bureaucratic

12. Programme management 2007-2013 – recommendations to the Commission • Do not over-regulate Structural Policy • Attach more importance and more scope of decision to regional (sub-national) level • More risk-sharing between EU, national and regional level • Allow more flexibility in funding actions eligible under ESF in ERDF-programmes and vice-versa (e.g. 15% instead of 5%) • Allow more flexibility for regions to quickly adapt programmes according to need • Abolish performance reserve and reserve for unexpected sectoral or local shocks • Adapt n+2-Rule in order to create more flexibility • Interregional cooperation should not be prescribed (discretionary provision instead of mandatory regulation)

13. Thank you for your attention! • Daniela Glimm-Lükewille • agiplan GmbH • Kölner Straße.80-82 • 45481 Mülheim an der Ruhr • GERMANY • E-Mail: dglimm@agiplan.de • Website: http://www.agiplan.de • or: • Ziel 2 Sekretariat • im Ministerium für Wirtschaft und Arbeit • des Landes Nordrhein-Westfalen • Haroldstraße 4 • 40190 Düsseldorf • Tel.: +49 (0)211-837-2553 • Fax: +49 (0)211-837-2665 • E-Mail: daniela.glimm-luekewille@mwa.nrw.de • Website: www.ziel2-nrw.de