Management of EU Funds

European Level

When arranging the mid-term plan of the European budget expenses, the so-called financial perspective, the top level European Council consisting of the highest representatives of Member States (presidents, prime ministers) decides on the volume of finances intended for various EU policies, inter alia also for the economic and social cohesion policy (ESC).

Once a unanimous agreement is reached within the European Council, the European Commission (EC) has to prepare draft European legislation in the form of regulations defining the rules of using the finances from the European budget allocated through individual funds.

Regulations have to be approved by the European Parliament and the EU Council consisting of ministers of member state governments.

Thereafter, the EU Council approves the Community Strategic Guidelines on Cohesion (CSGC) defining priorities of the European Union development as an orientation framework for Member States within preparation of National strategic reference frameworks and operational programs.

Then it is up to the Member States to prepare their National Development Plans (NDP) and National Strategic Reference Frameworks (NSRF) describing the priority development areas and in relation to them, the states defined objectives they are planning to achieve using the finances from the EU funds. The NSRF defines a system of operational programs (OP), which the Member State wants to use for drawing from the EU funds.

A Member State has to present the NSRF and the system of all OPs for approval to the European Commission, that is responsible for the ESC policy at the European level. The Commission assesses the accord of NSRF and OP with regulations and CSGC.

Once NSRF and OPs are approved by the European Commission, the drawing from the European funds may start and from that point, it is fully in the hands of the Member States. The EC only monitors and assesses its course and it sends money from the EU funds to a special account opened for this purpose in each Member State. In the case of any problems however, the Commission may request justification and remedy from Member States under the penalty of suspended drawing, and possibly even repayment of the unjustly drawn finances to the European budget.

Nevertheless, when managing the operational programs as well as implementing the projects, all Member States start from five fundamental principles of the ESC policy: the principal of programming, partnership, concentration, complementarity and the principle of monitoring and evaluation.

Those implementing the projects as well as administrators of operational programs also have to respect two horizontal priorities transecting all supported activities: equal opportunities and sustainable development.

National Level

The Czech Republic has defined the following four basic institutions for management and coordination of NSRF:

• National Coordination Authority
• Monitoring Committee of NSRF - Management and Coordination Committee
• Paying and Certifying Authority - National Fund
• Audit Authority - Central Harmonization Unit for Financial Control

National Coordination Authority

Member States set up a body that is in charge of preparation of NDP and NSRF and conducts negotiations with the European Commission. In the Czech Republic, this body is the Ministry for Regional Development (MRD), within which the National Coordination Authority (NCA) is established as a coordinating and methodical body responsible for realization of NSRF to the government of the Czech Republic. It is an official partner of the EC as concerns realization of the policy of economic and social cohesion as a whole; it creates a uniform framework of the implementating environment for management, realization, control, monitoring and evaluation of operational programs. This means that for example it ensures the nation-wide information campaign about EU funds in the Czech Republic, it evaluates the course of drawing for all operational programs, it processes methodologies and manuals applicable to all operational programs, etc. In the period 2004-2006, the coordination authority was the Community Support Framework (CSF) established also at the MRD.

Monitoring Committee of NSRF - Management and Coordination Committee

The Management and Coordination Committee (MCC) provides the widest coordination with assistance of not just the authorities engaged in implementation but also of the economic and social partners. The MCC in particular discusses and recommends financial and material changes of the approved operational programs, it discusses proposals and changes of procedural processes and rules, it coordinates system measures like the monitoring and information system, institutional structures, etc.

Expert, organization, administrative and technical conditions for the activity of MCC are provided by NCA. In order to reinforce coordination, four coordination committees have been established by four strategic objectives (SO) of NSRF:

• Coordination Committee for Competitive Czech Economy (SO 1);
• Coordination Committee for Open, Flexible and Cohesive Society (SO 2);
• Coordination Committee for Attractive Environment (SO 3);
• Coordination Committee for Balanced Territorial Development (SO 4).

Paying and Certifying Authority - National Fund

The National Fund Department of the Ministry of Finance ensures the flow of finances from the EU funds to the Czech Republic in relation to all operational programs.

Audit Authority - Central Harmonization Unit for Financial Control

The Central Harmonization Unit for Financial Control operating within the Ministry of Finance is centrally responsible for performance of audits in order to verify an effective functioning of the managing and controlling system of realization of EU funds support.

Level of Operational Programs

Each operational program has a defined system of several authorities that are engaged in its successful realization:

Managing Authority

The management of individual operational programs including the selection of projects and supervision over their realization falls within the powers of the so-called managing authorities, which are the corresponding departmental ministries in relation to the thematic OPs and the regional councils of the cohesion regions in relation to regional OPs.

Intermediate Body

The managing authority may delegate a part of its activities, within which one most frequently comes into contact with the applicants and project implementators (for example execution of calls, collection and evaluation of project applications, consultations with applicants and project implementators, etc.), to intermediate bodies, which are frequently institutions with regional branches (for example the labor offices, CzechInvest, regions, the State Fund of the Environment, etc.) but which might be also various departments of ministries. As concerns regional operational programs, programs for Prague and programs of the objective of European Territorial Cooperation, no intermediate bodies but joint technical secretariats and regional bodies are established or all activities are carried out directly by the managing authorities respectively.

Monitoring Committee

The realization of an operational program is supervised by the monitoring committee, which together with the managing authority solves in particular the incurred problems, approves the final and the annual report for the operational program or proposes changes in the operation program and in the connected sets of program documents.

Paying and Certifying Authority

In the Czech Republic, there is one central authority that provides the flow of finances from the EU funds to the Czech Republic, and that is the National Fund Department of the Ministry of Finance of the Czech Republic. The project implementators do not communicate with the Paying and Certifying Authority (PCA) directly but they receive payments via the intermediate body or via the managing authority respectively directly from the state budget that pre-finances the projects. Only then PCA asks the European Commission for a transfer of the finances from the EU budget to its account and then these finances are transferred to the respective budget chapter of the ministry that pre-financed the corresponding payments.

Audit Authority

In the Czech Republic, a sole body, namely the department Audit Authority - Central Harmonization Unit at the Ministry of Finance of the Czech Republic is in charge of the audit of readiness of the managing and control system of all operational programs, the setting of the managing and control systems of operational programs, the methodical management of all audit bodies engaged in realization of operational programs and other tasks connected with an audit.

Institutional provision of management of particular operational programs has its specifics, so we recommend you consult a more detailed description in the section Management and Monitoring of each operational program.