ERDF, CF implementation in 2007-2013 Annual Implementation Report 2010

1. ERDF, CF implementation in 2007-2013 Annual Implementation Report 2010 Annual Examination Meeting 13.09.2011 Latvia, Riga

2. Content • Follow-up from AEM in March 30, 2011 • Main conclusions in Annual Report 2010 • Memorundum of Understanding (SMoU) • Implementation progress • Management and control system • Strategic and future issues.

3. Follow-upfrom AEM inMarch 30, 2011

4. Follow-up from AEM in March 30, 2011 • Resumption of the payment flow from EC • Action plan onremainingeligibility issues withinfinancial engineering instruments • Spendingtargetsofresearchinfrastructureactivity • Action plan to strengthen management and control system, esp. procurement issues 5. Amendments of Operational Programmes 6. Improvedqualityofevaluationwork 7. Future of the Cohesion Policy post 2013

5. 2. Main conclusions in Annual Implemenation Report 2010

6. Conclusions in Annual Report 2010 - I • Satisfactory overall EU funds implementation progress in 2010 • SMoU and national targets for payments to final beneficiaries fully reached • Major project applications develepped and submitted to EC (7/7)

7. Conclusions from the Annual Report 2010 - II Main challenges Solutions 1. Strengthened EU funds procurement verifications 2. Involvement of banks 3. Prevention - disciplinary responsibility + education 4. Strict financial discipline 5. Improved monitoring – reporting 1. Procurement infringements 2. Difficulties with attraction of private financing 3. Amount of irregularities 4. Implementation delays 5. Improved monitoring of financial instruments on the ground

8. 3. Obligations in Memorundum of Understanding (SMoU)

9. Memorandum of Understanding • Sufficient budget & expenditure level • Improve the quality of evaluations; • By end-July 2011 reallocate funds when no Cabinet Regulations onactivityapproved by end of 2010 • Sign all contracts andmakepaymentswithin activity "Development of Research Infrastructure" by end-2011 5. Assessroadandbridgequalityproblems (JASPERS) 6. Eligibility of financial engineering instruments + leverage 7. Employmentactivisation & sufficientfinancing (inclreallocationsbetweenfunds)

10. 4. Implementation progress

11. Absorption 2007-2013 planning period to 31.08.2011 by funds(M LVL, % of EU funding, progress since 28.02.2011)

12. Reaching target of payments to financial beneficiaries in 2011 as to 31.08.2011 (M LVL, % of Target for all payments to FB’s in 2011)

13. Cash flow for EU funds 2007-2015(M LVL)

14. 4.1. Implementation by priorities Target by 31.12.2011 Progress by 31.08.2011

15. 2.1.Priority „Science and Innovations” M LVL, % of EU funding 34,0 (11%)

16. Key output, result indicators of 2.1.Priority „Science and Innovations”

17. Implementation by priorities:2.2.Priority „Access to Finances”

18. Implementation by priorities:2.2.Priority „Access to Finances” Activity 2.2.1.1. «Holding fund»

19. Implementation by priorities:2.2.Priority „Access to Finances” Activity 2.2.1.3. «Guarantees for development of enterprise competitiveness»

20. Implementation by priorities:2.2.Priority „Access to Finances” Activity 2.2.1.4. «Loans for development of enterprise competitiveness»

21. Keyoutput, resultindicatorsof 2.2.Priority „Access to Finances”

22. 2.3.Priority „Promotion of Entrepreneurship” 0,2 (0,5%)

23. Keyoutput, resultindicatorsof2.3.Priority „PromotionofEntrepreneurship”

24. 2.4.Priority „Technical Assistance”

25. 3.1.Priority „Infrastructure for Strengthening Human Capital”

26. Key output, result indicators of 3.1.Priority „Infrastructure for Strengthening Human Capital”

27. 3.2.Priority „Promotion of Territorial Accessibility”

28. Key output, result indicators of 3.2.Priority „Promotion of Territorial Accessability”

29. 3.3.Priority „Development of Transport Network of European Significance and Promotion of Sustainable Transport”

30. Key output, result indicators of 3.3.Priority „Development of Transport Network of European Significance and Promotion of Sustainable Transport”

31. 3.4.Priority „Quality Environment for Life and Economic Activity”

32. Key output, result indicators of 3.4.Priority „Quality Environment for Life and Economic Activity”

33. 3.5.Priority „Promotion of Environmental Infrastructure and Environmentally Friendly Energy”

34. Key output, result indicators of 3.5.Priority „Promotion of Environmental Infrastructure And Environmentally Friendly Energy”

35. 3.6.Priority „Polycentric Development”

36. Key output, result indicators of 3.6.Priority „Polycentric Development”

37. 3.7.Priority „Technical Assistance of ERDF”

38. 3.8.Priority „Technical Assistance of CF”

39. Keyoutput, resultindicatorsforTechnical Assistance

40. Main spending areas within Technical Assistance by 31.08.2011 Total payments - 22,7 M LVL

41. Implementation of major projects in 2007-2013, M LVL, % of planned payments *Advance payments

42. V EU funds management and control system issues and improvements Managing Authority of EU funds September 13th2011

43. MainconclusiononEU funds management and control system (1) MA assessmentofresultsof: • Audits (systems & operations) • EC missions • implementation reports of responsible authorities • MIS operationaldataandirregularityadministration • Evaluationresults leedsus to conclusionthatinovearall EU funds managementandcontrolsystemworkswell

44. MainconclusiononEU funds management and control system (2) Mainissuesforimprovement: • Elegibilityoffinancialengineering instruments • Strengtheningpublicprocurmentcontrols: • Ex-antecontrols & improvedstandardchecklists • Unjustifiedshorteneddeadlines • Potencialconflictofinterest • Lackofjustificationofestimatedprices

45. Other potential areas of improvment (3) Ssurveyonsatisfaction of beneficiariesin2011 : In general FBs satisfied with work of EU funds administrating institutions although some improvements welcome: • Reduce bureaucracy, simplify requirements fordocuments • Improve competence of employees • Improve consultations and more informative seminars • Shorten time for examination of documentation

46. Irregularity administration (4) MA considers irregularity administrationsystemas one of keytools for detection of weakest links in management and control system, thus - - irregularitymonitoring processs onquarterly bases: • Analysesduringquarterlymeetings • Reporting to the OLAF • Reporting to government • AFCOS (Interdisciplinarynetwork) • Guidelines & exchangeofbestpractice

47. Irregularities with financial impact (M EUR, % of the total amount)- by 30.06.2011 (5) Types of irregularities Types of financial beneficiary

48. Irregularities & recovery (M EUR, % of the total irregularityamount,by 30.06.2011 (6)

49. Financial impact of irregularity in activities of OP’s (7) *Inobservance of the regulations, Final beneficiaries are not performing planned economic activities;The amount of done activities mismatches the amount of contracted activities.

50. Actions for improvement (8) 1. Facilitated EU funds procurement monitoring system • Increased intensity of ex-ante controls of procurement documentation. • PMB provides methodological guidance and consultations (30.08.2011.) • Amendedregulations of CoM (30.08.2011.) 2. Preventionofirregularities • Disciplinary responsibility • Training for public prosecutors • AFCOS round table meetings • Quarterly based meetings to analyzeirregularities • 3. Improvedguidelines • 4. Riskmanagement