Management of EU Funds

European level

When negotiating the medium-term plan for European budget expenditures (the financial perspective), the resources earmarked for the various European Union policies, including the economic and social cohesion (ESC) policy, are decided on by the European Council, which comprises the highest representatives of the Member States (presidents, prime ministers). 
After attaining unanimous agreement at the European Council, the European Commission (EC) has to draft European legislation in the form of regulations defining the rules for utilising resources from the European budget allocated via the various funds.
Regulations have to be approved by the European Parliament and the Council of the EU, which comprises the ministers of the governments of the Member States.
The Council of EU then approves the Community Strategic Guidelines on Cohesion (CSGC) defining the priorities for the development of the European Union as a referential framework for the Member States when preparing national strategic referential frameworks and operational programmes.
Then it is the turn of the Member States to prepare their own National Development Plan (NDP) and a National Strategic Referential Framework (NSRF), describing the priority areas of development, and define the respective objectives they plan to attain using resources from EU funds. The NSRF defines the body of operational programmes (OP) that a Member State wishes to use for utilising resources from EU funds.
Member States have to submit the NSRF and all OPs to the European Commission, which is the body responsible for ESC policy on the European level, for approval. The Commission assesses compliance of the NSRF with the regulations and the CSGC.
After the NSRF and OPs are approved by the European Commission, utilisation of resources from the European Funds, which is fully in the hands of the Member States, may commence.  The EC only monitors and assesses its course and sends money from the EU Funds to a special account set up in each Member State for this purpose. In case of problems, however, the Commission can request an explanation and rectification under the threat of suspension of funding, or even request that funding be returned to the European budget if it is found that it is not being used legitimately. 
Nevertheless, when managing operational programmes and even when implementing projects, five basic principles of ESC policy are applied in all Member States: the principles of programming, partnership, concentration, and complementarity and the principle of monitoring and assessment.
The project implementers and administrators also have to respect two horizontal priorities that run across all supported activities: equal opportunity and sustainable development.

National Level

The Czech Republic has defined these four basic institutions for managing and coordinating the NSRF:

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

National Coordination Authority

Member States appoint a body that is responsible for preparing the NDP and NSRF and conducting negotiations with the European Commission.  In the Czech Republic, this entity is the Ministry of Regional Development (MoRD), under which the National Coordination Authority (NCA), as the coordination and methodological body which answers to the Government of the Czech Republic with regard to the implementation of the NSRF, is established. It is the official partner with regard to the EC with regard to the implementation of economic and social cohesion policy as a whole. It creates a common implementation framework for managing, executing, controlling, monitoring and evaluating the operational programmes. This means that, for example, it arranges a nation-wide information campaign about EU funds in the Czech Republic, assesses the way funds are utilised by all operational programmes, processes methodologies and manuals valid for all operational programmes, and so on. In the 2004-2006 period, the coordination authority also established the Community Support Framework (CSF) at the MoRD.

NSRF Monitoring Committee - Management and Coordination Committee

 The Management and Coordination Committee (MCC) guarantees maximum coordination with the assistance of not only the implementation authorities, but also of the economic and social partners.  The MCC discusses and recommends financial and material changes of the approved operational programmes, negotiates proposals and changes in procedural approaches and rules, coordinates system measures such as the monitoring and information system, institutional structures, and the like.
Expert, organisational, administrative and technical conditions for the activities of the MCC are provided by the NCA.  To strengthen coordination, four coordination committees have been established in accordance with the four strategic objectives (SO) of the 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 guarantees the flow of resources from the EU funds to the Czech Republic in relation to all operational programs.

Audit Authority - Central Harmonisation Unit for Financial Control

The Central Harmonisation Unit for Financial Control operating under the Ministry of Finance is centrally responsible for conducting audits to verify the effective functioning of the managing and control system applicable to the implementation of support from EU funds.

Operational Programme Level

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

• Managing Authority

The management of the various operational programmes, including the selection of projects and supervision over their implementation, falls within the purview of the Managing Authorities, which, in the case of the thematic OPs, are the corresponding departmental ministries and, in the case of regional OPs, the regional councils of the cohesion regions.

• Intermediate Body

The Managing Authority may delegate a part of its activities that see the most frequent contact with applicants and project implementers (e.g. execution of calls, collection and evaluation of project applications, consultations with applicants and project implementers, etc.) to intermediate bodies, which are frequently institutions with regional branches (e.g., the labour offices, CzechInvest, the regions, the State Environmental Fund, etc.) but which might also be the various ministerial departments.   As concerns regional operational programmes, programmes for Prague and programmes of the European Territorial Cooperation Objective, no intermediate bodies but joint technical secretariats and regional bodies are established or all activities are carried out directly by the Managing Authorities, as the case may be.

• Monitoring Committee

Implementation of an operational programme is overseen by the Monitoring Committee, which, together with the Managing Authority, solves in particular any problems that arise, approves the final and the annual report for the operational programme or proposes changes in the operation programme and in the related programme documents.

• Paying and Certifying Authority

In the Czech Republic, there is only one central authority that ensures the flow of resources from the EU funds to the Czech Republic: the National Fund Department of the Ministry of Finance of the Czech Republic.      The project implementers do not communicate with the Paying and Certifying Authority (PCA) directly, but receive payments via the Intermediate Body, or, as the case may be, the Managing Authority directly from the state budget, which  pre-finances the projects. Only then does the PCA ask the European Commission to transfer the resources from the EU budget to its account. These resources are then transferred to the respective budget heading of the ministry that pre-financed the corresponding payments.

• Audit Authority

In the Czech Republic, a single body, namely the Audit Authority - Central Harmonization Unit at the Ministry of Finance of the Czech Republic    , is in charge of auditing the readiness of the managing and control system of all operational programmes, setting the managing and control systems of the operational programmes, methodologically managing all audit bodies engaged in implementing the operational programmes and other tasks connected with an audit.
The institutional arrangements for the management of the various operational programmes are specific. A more detailed description thereof is available in the Management and Monitoring section of each operational programme.