PUBLIC PROCUREMENT IN THE CONTEXT OF ESI FUNDS IN THE REPUBLIC OF CROATIA Zagreb, 10 June 2015 Tatjana Borovina Head of Sector for Set-up and Improvement of the System www.mrrfeu.hr Ministry of Regional Development and EU Funds 1 Management and Control System ESI Funds Management and control system (MCS) prevents, detects and corrects irregularities in use of ESI funds by performing management verifications public procurement is one of the activities of the Beneficiary
of ESI Funds that is being controlled by MCS www.mrrfeu.hr What is actually MCS? - legal framework (EU and national legal acts) - agreements on delegated functions - procedures (standardised CNR and internal MoPs) - administrative capacities 2 National Legal Framework 2014-2020 ESI Funds www.mrrfeu.hr Act on the Establishment of Institutional Framework for the Implementation of European Structural and Investment Funds in
the Republic of Croatia in the Financial Period 2014-2020 (Official Gazette, No. 92/2014) Decree on the Bodies of the Management and Control Systems of the European Social Fund, the European Regional Development Fund and the Cohesion Fund, regarding Investment for Growth and Jobs Goal (Official Gazette, No. 107/2014, 23/2015) Agreement on delegated functions (between MA and IBs) Common National Rules (CNR) Rule on eligibility of expenditure (Official Gazette, No. 143/2014) + standardised procedures at the OP level (applied by all MCS bodies) Manuals of Procedures (MoP) internal procedures of MCS bodies 3 Instutional Set-up ESI Funds AA MF/SCIF Irregularities
CB CA M A MF/SA Unit State Aid IB1 www.mrrfeu.hr IB2 4 Public Procurement in ESI Funds
Where is public procurement in ESI Funds? It is with the Beneficiary / Contracting Authority. www.mrrfeu.hr MCS Grant contract Beneficiary/ Contracting Authority Public procurement MCS
What is the role of MCS in ESI Funds? To ensure that expenditure declared to the EC is legal and regular. 5 Public Procurement in ESI Funds How is this achieved? Layers of control of public procurement in the context of ESI funds in the Republic of Croatia: 1. Intermediate Body level 2 2. Managing Authority 3. Certifying Authority 4. Audit Authority www.mrrfeu.hr 5. EC (relevant DG, ECA, OLAF)
Possible additional assurance of legality and regularity of PP 6. Civil control mechanisms Integrity Pacts pilot project 6 Public Procurement in ESI Funds What is being controlled and how? from tender documentation to the award of the contract www.mrrfeu.hr implementation of the contract compliance with EU and national legal framework, especially that PP principles are respected, ensuring transparency, fair market competition and equal treatment of all economic operators; that expenditure declared for works, supplies and services has actually been incurred by the Beneficiary, and this in the period of eligibility; that illegal and irregular expenditure is neither declared to the
European Commission nor paid to the Beneficiary. 7 Public Procurement in ESI Funds 1st level control of PP by IB2 - IB2 performs ex-ante control of public procurement plan prepared by the Beneficiary, performs risk assessment as a base for ex-ante control of tender documentation which results with a recommendation (responsibility for PP procedure stays with the Beneficiary) - IB2 performs ex post control management verifications (administrative and on-the-spot checks) prior to payment to the Beneficiary and certifying expenditure to EC 2nd level control of PP by MA MA performs system level verifications to get assurance that IB2 properly performs delegated functions (under the responsibility of MA) www.mrrfeu.hr
3rd, 4th, 5th level control of PP by CA, AA, EC 8 Irregularities in Public Procurement Definition of irregularity: any breach of Union law, or of national law relating to its application, resulting from an act or omission by an economic operator involved in the implementation of the ESI Funds, which has, or would have, the effect of prejudicing the budget of the Union by charging an unjustified item of expenditure to the budget of the Union. Examples of irregularities: - drafting of tailor-made specifications to favour certain bidders - splitting of public tenders in smaller tenders to avoid competitive procedures www.mrrfeu.hr - conflicts of interest affecting various stages of procedures - disproportionate and unjustified selection criteria - unjustified exclusion of bidders, often formal reasons
- unjustified use of emergency procedures (additional supplies, works contracted with no justification for unforeseen circumstances)... 9 Financial corrections Guidelines for determining financial corrections Commission Decision of 19.12.2013 - rates of correction: 5%, 10%, 25%, 100% www.mrrfeu.hr - level of corrections to be applied in line with the principle of proportionality and taking into account the case-law of the Court of Justice of the European Union - seriousness of an irregularity related to non-compliance with the rules on public procurement and the related financial impact to the Union budget is assessed taking into account the following factors: level of competition, transparency and equal treatment - 100% - most serious cases (irregularity favours certain tenderer(s)/
candidate(s), conflict of interest, fraud) 10 Public Procurement in ESI Funds Thank you for your attention! www.mrrfeu.hr [email protected] 11
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