ECHO.C - Resources, Partnerships and Operational Support

Transcription

1 EUROPEAN COMMISSION DIRECTORATE-GENERAL HUMANITARIAN AID AND CIVIL PROTECTION - ECHO ECHO.C - Resources, Partnerships and Operational Support Brussels, 30 October 2013 C3 REVISION OF THE PARTNERSHIP AGREEMENTS STATE OF PLAY AND MAIN CHANGES The purpose of this note is to provide information on the current status of the revision of the Partnership Agreements that DG ECHO signs with its partners, specifically on the changes introduced into the legal texts and supporting documents. 1. THE REVISION PROCESS The revision of the Partnership Agreements is an exercise which takes place every 5 years that is when the Framework Partnership Agreement (FPA) signed with NGOs comes to an end. The current FPA with NGOs remains valid until the end of December While the Partnership Agreements with United Nations Agencies and International Organisations (FAFA and FPA IOs) do not have an end date, on the occasion of the revision of the FPA for NGOs, also the documents relating to these key partners are updated. Therewith ECHO can ensure coherence between the various agreements. Commissioner Georgieva transmitted a clear political signal to DG ECHO partners at the 2011 partners' conference when she advocated for professionalism, excellence, accountability and increased visibility. Her declaration represents the starting point of a comprehensive and inclusive revision process: The first step of the revision process, carried out by DG ECHO during the year of 2013, has been to take stock of the achievements of the former FPA, by contrasting them against the objectives established at the time of its introduction. An external evaluation was carried out which produced around 60 recommendations. Two thirds of these recommendations have, in one way or another, been integrated into the revision. Following the evaluation, DG ECHO organised brainstorming sessions with all the different categories of partners and representatives from DG ECHO staff. This exercise brought to light the expectations of the partners with regards to the upcoming FPA. Commission européenne/europese Commissie, 1049 Bruxelles/Brussel, BELGIQUE/BELGIË - Tel Office: L-86 - Tel. direct line

2 In parallel, an analysis of the Consensus and the Good Donorship Principles was carried out so as to make sure that these vision documents, which have been adopted after the 2008 FPA, are properly reflected in our partnership tools. The revision also integrated the new financial and legal rules and procedures established by the 2012 Financial Regulation. Finally, the process review brought a set of new workflows, procedures, and benchmarking, aimed at improving the quality and efficiency of DG ECHO. The FPA, or at least its implementation, will have to take into consideration these decisions. The main elements and conclusions gathered from the process described above have been analysed and summarised in a concept paper that was presented at the 2012 Partner's conference. This concept paper was organised around 4 guiding principles: Accountability, Visibility, Flexibility and Simplification. These principles have been translated into concrete measures which have in turn led to the FPA revision presented in the sections below. 2. SUMMARY OF THE MAIN CHANGES 2.1. Partnership issues Application procedure applicable to new partners The application procedure has been revised with the aim to better clarify the eligibility and suitability criteria for new applicants. The diversity of partners is maintained through the introduction of differentiated selection criteria/thresholds, which will be applicable to organisations working in very specific or underrepresented sectors ("niche"). Clearer benchmarks have been established to determine the minimum capacity that is required for an NGO to become a DG ECHO partner. Thus when reviewing the operational capacity and experience, DG ECHO will take a stronger note of the qualitative aspects/results of previous actions and the specific crisis/country contexts. For a better assessment of the applicants' operational capacity, professionalism, and added value for ECHO, those applicants that pass a preliminary desk review will be invited, on a systematic basis, for a meeting, which will represent the final stage of the selection process. As the benchmarks applied and the assessment criteria used by DG ECHO will be published, when applying, organisations will have a better understanding of what is expected from them. The questionnaire has also been revised; the number of documents requested has been significantly reduced and the administrative capacity section has been better aligned with the audit questionnaire. The IT Tool has been updated to facilitate the exchange of information between the applicants and DG ECHO. A deadline of 30 days has been fixed to send a first advice to 2

3 the applicants on their application. Lastly, the revised procedure foresees all new partners to be audited by DG ECHO after signature of the first agreement Recognition of the mandate of each category of partners The management modes of the Financial Regulations of 2002 (i.e. centralised, shared, decentralised and joint management) have been replaced in the FR 2012 by: o o o direct management, implemented by the Commission, the Executive Agencies, and EU Heads of Delegations; indirect management, where the Commission entrusts budget implementation tasks to International Organisations (IOs); and shared management with Member States. This means that, as of January 2014, the management mode to be applied to the UN organisations, the IOM, the ICRC and IFRC, is the indirect management mode. The indirect management mode implies that the Commission delegates essential tasks related to budget implementation to these organisations, based on the assurance received from a 6 pillars review on the capacities of these organisations to manage funds on behalf of the Commission. The International Organisations, on their side, commit to respect the principles of sound financial management, transparency and non-discrimination and to ensure the visibility of Union action when they manage Union funds. They are also required to guarantee a level of protection of the financial interests of the Union equivalent to that required under the Financial Regulation Respecting the principle according to which DG ECHO cannot audit the same things twice Based on this principle, the quantity and nature of verifications and controls performed by DG ECHO has been revised so as to ensure that our partners are not submitted to multiple controls focusing on the same information. Similarly, elements linked to compliance issues, for instance the procurement annex or information on security trainings, have been removed from the Single Form. Likewise, the periodic assessment has been revised and simplified, with a specific focus on the financial risks presented by the partners, on operational performance and on a follow-up of the audit recommendations Differentiation of partners based on financial risks The A & P control mechanisms have demonstrated their effectiveness; however they will be replaced by a financial risks assessment at contracting and final payment stage. This will serve DG ECHO to overcome certain limitations of the previous mechanisms and to reduce the administrative burden. The risks assessment will be performed once a year on the basis of the information provided by the partners in APPEL. 3

4 Risks assessment at contracting stage means that DG ECHO will assess the financial solidity of the NGOs against financial standard indicators, such as net equity, net result, liquidity ratio, turnover and dependency with regards to DG ECHO. Partners with robust indicators will work without any thresholds, whereas for partners with weaker indicators, specific measures such as financing thresholds based on open amount or a limited prefinancing will be taken to mitigate the financial risks incurred by DG ECHO. The risk assessment at liquidation stage will entail an assessment of the error rate at audit and liquidation stage. For partners with an error rate below 2%, DG ECHO will apply a fast liquidation procedure with lighter ex post financial checks. For partners with an error rate above 2%, DG ECHO will apply the standard procedure in terms of ex post financial checks Accountability, indicators and markers Key Result indicators Following the process review, the concept of Key Result Indicators (KRIs) has been introduced to facilitate quality assurance and to reinforce the coherence of ECHO funded projects with DG ECHO priorities and policies. KRIs will also improve the measurability of what DG ECHO-funded projects have achieved, including their quality. The KRIs will be available at result level. Partners will have the possibility to identify the most relevant KRI for their actions from a drop-down list available in the Single Form. KRIs are proposed for those sectors which cover the lion's share of DG ECHO funding: food, nutrition, health, wash and shelter Gender-Age Marker The European Consensus on Humanitarian Aid highlights the importance of integrating gender considerations, incorporating protection strategies and promoting the participation of women in humanitarian aid. The European Commission is committed to strengthening a gender-sensitive humanitarian assistance. Following the adoption of the Staff Working Document on 'Gender in Humanitarian Aid: Different Needs, Adapted Assistance', DG ECHO will introduce a Gender-Age Marker in This Marker, which is integrated in the Single Form, aims at fostering and tracking gender- and age-sensitive projects. It will also increase dialogue between partners and DG ECHO on how each humanitarian action adequately responds to specific gender- and age-related needs Visibility and communication The visibility requirements have been further clarified in the new FPA. At proposal stage, the partner needs to define if it intends to follow only the basic visibility requirements, or if it plans to perform additional actions. At final report stage, the partner will have to demonstrate that it complied with the minimum requirements. Unjustified and recurrent failure to comply with the visibility requirements may lead to a reduction of the grant or the application of a penalty. for visibility actions going beyond the basic requirements, the obligation for the partner to submit a visibility/communication plan for DG ECHO's approval, prior to finalising the grant agreement is maintained. 4

5 Data reporting capacities The Single Form has been structured in a way allowing for a better extraction of information in order for DG ECHO to improve its reporting capacities; for instance, encoding of beneficiaries, the KRIs, key financial information, etc Focus on results rather than inputs The new FPA and Single Form put more focus on the results rather than the inputs. This is particularly translated in the integration of Key Result Indicators, the suppression of the means and costs sections and the staff section in the Single Form. Financial information about the project will be made available via a detailed financial statement provided in an annex. This will allow DG ECHO to assess whether sufficient resources are available to achieve the objective. The details are however limited to level 3 (e.g. 1 Human resources, 1.1 Expatriate, Coordinator). The partners are also asked to provide an estimate of the cost allocation per result Simplification and flexibility The Single Form The Single Form is no longer annexed to the FPA. This will ease its adaptation in case of need (for instance in the event of an IT modification or other type of modification). It has been decided to adapt the Single Form format to the specificities of the partners and the nature of the crisis. This is called the modular approach. Therefore the partners will have the possibility to choose a SF for emergency actions, non-emergency actions or complementary actions. Based on this choice, specific sections of the Single Form will appear or disappear. The same concept applies to the different categories of partners according to the specific procedures and rules applicable to them (NGO generalist, NGO niche, the UN, IOs). The Single Form has been revised also by considering the need to: maintain the existing operational sections with a particular focus on the appraisal criteria used by DG ECHO; reduce the volume of information requested and simplify the encoding as much as possible; ease the encoding with the help of efficient IT solutions (sections only displayed when needed); take the compliance issues out of the Single form (e.g. procurement procedures, pre-audit of finances, etc.); integrate data that can be easily extracted for reporting purposes; and provide a platform for quality assurance by introducing standard indicators and markers. 5

6 More flexibility in amending the agreement The new FPA is introducing more flexibility with regards to the modifications of the agreement. There are no more untouchable elements. However, the effect of the modification should not call into question the award of the grant or be contrary to the equal treatment of partners Paperless environment Most of the communication with our partners related to a specific Action will be done in the near future via e-tools. Even though the functionality of an e-signature will only be developed on the long term, the FPA foresees the possibility of an e-signature Changes to the legal texts for the FPA NGOs This section presents the main modifications introduced into the FPA texts: Framework Partnership Agreement The emphasis on coherence of Union-funded actions with sectorial policies of the Commission was strengthened -> ref. Preamble and Article 3. The electronic exchange system (APPEL) was formally established in the legal framework, for all communications related to the Specific Grant Agreements -> ref. Article 4(1)(b). Reference to zero tolerance for sexual exploitation and abuse, as well as a specific reference to resilience, were introduced -> ref. Article 5(e)(iv) and 5(e)(v). The periodic assessment procedure was simplified -> ref. Article 6. The A & P control mechanisms were abolished. Actions shall thus be subject to controls at the grant award and final payment stages, based on the risk assessment of the financial management capacity of the partner -> ref. Article 7. Provisions on confidential and sensitive information, processing of personal data by the Commission and liability for damages were introduced -> ref. Articles 11, 12, and Specific Grant Agreement Reference to the relevant terms of the FPA was introduced -> Article 1. Article on the bank account was deleted due to the fact that the bank account is registered and modified in the electronic exchange system (APPEL) -> Article 5. 6

7 By default, an Interim Report is not required in the case of urgent actions or short actions with a duration of less than 10 months, unless it is operationally justified. The default reporting deadline is set to 3 months, but a different deadline may be established when operationally justified General Conditions The use of the electronic exchange system (APPEL) in communication concerning the Specific Grant Agreements, including amendments, has been explained in detail -> ref. Article 4. The possibility for the Commission to impose a financial penalty of 2%, reduce the grant or terminate the Specific Grant Agreement when the Humanitarian Organisation fails to comply with the visibility-communication obligations, was introduced -> ref. Article 7(6). Pursuant to the new Financial Regulation, the Article on eligibility of costs refers to costs "incurred" rather than cost "committed". This means that, while previously the emphasis was placed on the fact that a legal commitment needs to be made for the cost to be eligible, the emphasis is now placed rather on the fact that costs relate to activities performed, or services rendered during the implementation period of the Action, for them to be eligible -> ref. Article 8(1). The eligibility conditions of costs of procurement contracts were revised. A difference is made between those elements that are eligibility criteria, and those which may result in the reduction of the grant-> ref. Article 9. The definitions of "equipment" and goods were clarified, the scope of entities to which a donation can be made was widened, the thresholds for the allowance for low value equipment were increased -> ref. Article 10. The possibility for the Humanitarian Organisation to use its own depreciation system was extended to all partners -> ref. Article 10(2). The conditions to be upheld when delivering financial support to beneficiaries were introduced in line with the new Financial Regulation -> ref. Article 11. The distinction between "exchange of letters" and "amendment by supplementary agreement" was abolished; in order to simplify the amendment procedure, all changes are to be done through amendment by mutual consent (exchange of letters) and through APPEL -> ref. Article 12(2). The elements requiring an amendment were clarified -> ref. Article 12(2). A clause on clerical errors was introduced -> ref. Article 12(3). The requirements concerning financial reporting have been simplified -> ref. Article 16. 7

8 While the default option is reimbursement based on actual costs, the possibility to agree that the grant will take the form of a reimbursement of pre-determined unit costs, unit contributions, lump sum costs or flat rate costs, was introduced -> ref. Article 17(c). More detailed and legally sound provisions on ownership and intellectual rights were introduced -> ref. Article 25. Pursuant to the Financial Regulation, the Article on Administrative and Financial Penalties was introduced. Administrative penalties thus include an exclusion from Union-funded grants and contracts, and financial penalties may range from 2% to 10% of the Union's contribution, or from 4% to 20% of the Union's contribution in case of another infringement -> ref. Article Principles and Procedures applicable to Procurement Contracts awarded within the framework of Humanitarian Aid Actions financed by the European Union (Annex III) Annex III was substantially simplified, particularly due to the removal of the procurement procedures that will from now on form part of the guidelines. In the current form, Annex III consists of the mandatory principles of humanitarian aid procurement and of the special provisions in relation to procurement of food and medical supplies. Clear definitions of "medical supplies", "food supplies", "pre-certification" and "pre-qualification" were introduced -> ref. Article 4(1) Next steps All proposals submitted in the framework of the 2014 HIPs will have to be submitted using the 2014 Single Form. It will be possible to sign the new FPA after the conference. The partners will be informed just after the conference on the conclusions of the risks assessments carried out for their respective organisations and of the possible ceilings applied to their organisations. Transition measures will be applied to actions funded under the 2008 FPA. Training sessions are currently being developed. The first training of partners will start on 18 November in Europe while abroad trainings will start as of January Prepared by C3 8