Stricter fiscal discipline measures for EU funds institutions envisaged
To ensure more efficient utilization of budget resources, improve the quality of budgeting and budget execution discipline, on Tuesday, March 8, the Government approved proposals of the Ministry of Finance (MoF) as the European Union (EU) funds managing authority for stricter fiscal discipline for the institutions involved in the EU funds management.
The decision on the fiscal discipline proposals was made considering the informative report of the MoF on the acquisition of foreign financial resources (EU structural funds and Cohesion Fund, European Economic Area Financial Mechanism, Norwegian Financial Mechanism and Latvian-Swiss Cooperation Programme) by December 31, 2010.
To ensure as balanced acquisition throughout the year as possible and timely inflow of the financing in the economy and to avoid increase in the administrative burden during the last two months of the year on the institutions involved in the EU funds administration, the Government approved payment goals for 2011 for each ministry according to the state budget resources available in the budgets of the ministries.
Thus it will be possible to prevent “freezing” of the financing in the programmes of the ministries and the financing will be timely available for the implementation of new projects, and this will also discipline and motivate beneficiaries to acquire the financing in a more timely manner and plan it better, emphasises the MoF.
By December 31, 2011 responsible line ministries in total will have to ensure payments to the beneficiaries for the EU funds co-financing part in amount of at least 511.5 million lats, including within the framework of the European Social Fund payments in amount of 88 million lats, within the framework of the European Regional Development Fund ~283 million lats, but within the framework of the Cohesion Fund – 140.3 million lats.
It was decided that at the budget programme (fund) level the ministries will have to plan not more than 20% in December, but 40% in the last quarter. However if in two consecutive months the financing plan of the ministry will not be executed by more than 250 thousand lats and at least 10% of the planned amount, the remaining financing will be available for other ministries, including for commencement of new projects.
Responsible ministries will also have to take responsibility for irregularities within the projects of budget institutions. The Government decided that in case non-eligible expenditure will be found in the projects implemented by state budget institutions in amount exceeding 85 lats, the respective institution will be subject to an official inspection according to the State Administration Structure Law and, if necessary, a disciplinary case against responsible officials and public administration officials will be launched.
The MoF informs that majority of violations are made during the EU funds procurement procedures, especially during the procurement procedures carried out by local governments and local government institutions within the framework of EU funds projects. The MoF will still submit it proposals to the CoM for elimination of such violations.
Also incompliances with legislation have been detected, for example, works have been carried out which cannot be referred to particular EU funds activity, limits of determined expenditure have been exceeded, beneficiaries do not carry out economic activities according to what was planned, and the amount of planned works does not comply with what was envisaged in the procurement contract.
The CoM decided that by March 28, 2011 ministries and other central institutions shall evaluate and, if necessary, submit to the Treasury amendments to EU funds financing plans for 2011, updating them according to the latest information about the planned monthly payments within the EU projects, at the same time during the 4th quarter planning not more than 40% and in December not more than 20% of the sum of financing plans of the state budget programme (EU fund).
However in order to ensure project implementation monitoring within the EU funds activity regarding the development of information systems and electronic services and facilitate common solutions for the implementation of information and communication technology projects, the Government decided that by March 22, 2011 the Ministry of Environmental Protection and Regional Development shall submit to the CoM a draft decree on the establishing of the Information Society Council.
EU funds in the programming period 2007-2013:
In total, by January 31, 2011 EU fund projects were concluded in amount of ~2.3 billion lats or 74.5% of total allocation, but beneficiaries were paid 942 million lats or ~30% of total EU funds allocation for the period. The programming period 2007-2013 Latvia has 3.18 billion lats of the EU funds financing available. Latvia can utilize this financing by the end of 2015. EU funds resources are planned in three directions or operational programmes – “Human Resources and Employment”, “Entrepreneurship and Innovations” and “Infrastructure and Services”.
Detailed informative report and draft Minutes-Decision is available on the web site of the CoM.
Information prepared by:
Agnese Beļkeviča
Communication Division
Phone: 67083938
Agnese.Belkevica@fm.gov.lv
