FINAL REPORT ON SAPARD PROGRAMME IMPLEMENTATION IN ROMANIA

Transcription

1 MINISTRY OF AGRICULTURE AND RURAL DEVELOPMENT MANAGING AUTHORITY FOR SAPARD PROGRAMME FINAL REPORT ON SAPARD PROGRAMME IMPLEMENTATION IN ROMANIA Consolidated version ROMANIA June, 2011

2 CONTENT CHAPTER I - EXECUTIVE SUMMARY... 6 CHAPTER II - INTRODUCTION CHAPTER III - OPERATIONAL INFORMATION Changes in the general conditions of Romania and their impact on the SAPARD Programme implementation Information on complementarity with other community funds CHAPTER IV - PROGRAMME ADMINISTRATION AND MANAGEMENT The activities of the SAPARD Programme Monitoring Committee The National Programme for Agriculture and Rural Development amendments Details of major amendments to programme s management and monitoring systems over the course of the programme period Using the Technical Assistance during SAPARD Programme s implementation period The involvement of the local authorities and central institutions structures in the SAPARD Programme implementation Information and publicity measures Data to demonstrate that Community funds have not replaced funding already available Activities performed in order to solve the problems identified in the implementation of SAPARD Programme CHAPTER V - SUMMARY OF RESULTS ON CONTROLS CARRIED OUT Amendments in the control systems introduced during the programme period and information on when the Commission was informed accordingly Control missions performed by the Control and Antifraud Directorate during Types and numbers of controls List of irregularities detected and notified to OLAF and description of measures taken (and recoveries made) Audit missions The stage of implementation regarding the recommendations of the European Commission Audit missions carried out by the Internal Audit Directorate within PARDF

3 CHAPTER VI - PROGRAMME IMPLEMENTATION Financial implementation Situation of all expenditures programmed, committed and paid for the overall programme and the entire programming period General aspects related to the monitoring of accreditation in Declarations of expenditure and requests of funds to the European Commission Payments from the National Fund to SAPARD Agency in Interest accrued Written- off debts according to art. 14 (2.8) from Section A of the MAFA annex Clearance and conformity clearance of accounts Implementation on SAPARD Programme s individual measures Synthesis on the implementation stage of the SAPARD Programme Qualitative and quantitative description based on the relevant monitoring indicators Analysis of the progress recorded in the implementation of SAPARD Programme measures. Assessment of the extent to which the Programme objectives have been achieved at Programme, measure and sub-measure level for the implementing period First assessment of the economic, social and environmental impact of the programme at the different levels Main recommendations resulted following the updating mid-term assessment of the SAPARD Programme and the Romanian authorities point of view CHAPTER VII - COORDINATION OF SAPARD PROGRAMME WITH OTHER FINANCIAL INSTRUMENTS FOR INTERNATIONAL SUPPORT General framework Assistance under PHARE Programme during Other financial instruments The Rural Development Project for the Apuseni Mountains funded by IFAD Projects financed by the World Bank CHAPTER VIII - THE EXPERIENCE RESULTED FROM IMPLEMENTING THE SAPARD PROGRAMME

4 Acronyms approx. - approximate AFD Antifraud Fight Department AFA Annual Financing Agreement Art. Article CAD Control and Antifraud Directorate - Paying Agency for Rural Development and Fishery CAP Common Agricultural Policy CCIR Chamber of Commerce and Industry of Romania CGFSME Credit Guarantee Fund for Small and Medium Enterprises COAC County Offices for Agriculture Consultancy CICGS Council for the Implementation of the Competitive Grant Schemes CPORDF - County Paying Offices for Rural Development and Fishery CU/S - Contracting Unit/Service DARD Directorate for Agriculture and Rural Development DC - Coordination Directorate DG Agri Directorate General for Agriculture and Rural Development European Commission DGRD Directorate General for Rural Development Romanian Ministry of Agriculture and Rural Development DNA Directorate National Anti-Corruption EAFRD European Agricultural Fund for Rural Development EAGF European Agricultural Guarantee Fund EAGGF European Agricultural Guidance and Guarantee Fund EC European Community EIA - Environment Impact Assessment EIB European Investment Bank EU European Union FIFG Financial Instrument for Fishery Guarantee FOP Fishery Operational Programme GD Government Decision GDP Gross Domestic Product GEO Government Emergency Ordinance GO Government Ordinance IAD Internal Audit Directorate Paying Agency for Rural Development and Fishery IBRD International Bank for Reconstruction and Development IC Info-Centres ICT Information and Communication Technology IFAD International Fund for Agricultural Development ISPA Instrument for Structural Policies for Pre-Accession IWUA Irrigation Water User Association JMC Joint Monitoring Committee 4

5 MA Managing Authority for SAPARD Programme MAFA Multi-Annual Financing Agreement MAFF Ministry of Agriculture, Food and Forests MAFRD Ministry of Agriculture, Forests and Rural Development MAI Ministry of Administration and Interior MC Monitoring Committee ME Ministry of Environment MPF Ministry of Public Finance MH Ministry of Health MT Ministry of Transport and Infrastructure NAAC National Agency for Agricultural Consultancy NAFA National Agency for Fishery and Aquaculture NALC National Agency for Land Consolidation NAO National Authorising Officer NF-National Fund NFI Non-banking Financial Institution NGO Non-Governmental Organisations No. - number NPARD National Programme for Agriculture and Rural Development NRB National Romanian Bank NRDP - National Rural Development Programme NSVFSA National Sanitary Veterinary and Food Safety Authority OG Official Gazette PARDF Paying Agency for Rural Development and Fishery PAS - Payment Accountancy Service PHARE Poland Hungary, Aid for Reconstruction of the Economy PIAA Paying and Intervention Agency for Agriculture PIAD - Public Internal Audit Directorate PPD - Project Payment Directorate PMU Project Management Unit RCGF Rural Credit Guarantee Fund RFP Rural Financing Project ROISP - Regional Offices for the Implementation of SAPARD Programme RPCRDF Regional Paying Centres for Rural Development and Fishery SVFSD - Sanitary Veterinary and Food Safety Directorate SAPARD Special pre-accession Programme for Agriculture and Rural Development SAD-Selection, Assessment Directorate SAO/S Selection, Assessment Office/Service MARS- Monitoring, Assessment, Reporting Service SDR Special Draft Right STAR Committee Agricultural and Rural Structures Committee TDS Technical Delegated Services ToR Terms of Reference TP - Technical Project UPS - Under Pressure Station USD - US Dollar T - tone 5

6 CHAPTER I EXECUTIVE SUMMARY In accordance with the provisions of Article 8, section B of the Annex to the Multi-Annual Financing Agreement between the Government of Romania and the Commission of the European Community (MAFA), signed on 2 nd of February 2001 in Brussels (Agreement ratified by Law no. 316/2001 published in the Official Gazette (OG) no. 362/2001), Romania has the responsibility of elaborating and submitting to the European Commission, until 30 of June 2010, the Final Report on SAPARD Programme implementation for The Final Implementation Report presents the data corresponding to the entire period , as well as distinctly the data corresponding to The Final Report is elaborated in compliance with the European Commission s Guidelines on the elaboration of the Annual Report of the SAPARD implementation in 2009 and the Final SAPARD Report, sent by address no / Regarding the geographical coverage, is to be mentioned that the SAPARD Programme is a national programme, being implemented on the entire Romanian territory. The Special pre-accession Programme for Agriculture and Rural Development SAPARD represents a financial contribution of the European Community (EC), provided for in the Council Regulation (EC) no. 1268/21 st of June 1999 on Community support for pre-accession measures for agriculture and rural development in the applicant countries of central and eastern Europe in the pre-accession period. Changes in the general conditions of Romania and their impact on the SAPARD Programme implementation As regards the macro-economic trends and structural characteristics of the Romanian economy, it can be noticed that between 2002 and 2008, the Romanian economy recorded a significant growth, as well as deflation and an unemployment rate decrease (registered by the National Agency for Employment), hence confirming the progress made towards a sustainable economic development. The country s GDP recorded a significant growth during , reaching 514,654.0 million lei in In 2009, the GDP decreased to 491,273.7 million lei. The annual average inflation rate marked a decrease in In 2009, it amounted 5.59 percent, compared to 7.85 percent in During a decrease in the unemployment rate has been observed, as recorded by labour placement agencies compared to 2009, when it began to rise, reaching 6.8 percent compared to 5.8 in

7 In the agricultural production sector, compared to the previous year, were recorded increases in 2001 (up 22.7 percent), 2003 (up 7.5 percent), 2004 (up 18.1 percent), 2006 (up 2.9 percent), as well as in the year 2008 (up to 21.2 percent). As of July 1 st 2009, Romania s population totalled million inhabitants, its rural population accounting for 44.9 percent of the total. A negative birth growth rate combined with external migration led to a continued decline in Romania s population (down thousand inhabitants in July 1 st July 1 st 2009; down thousand inhabitants in July 1 st July 1 st 2009). Programme administration and management The institutional framework of implementing the SAPARD Programme was regulated by the Multi Annual Financing Agreement (MAFA), the Romanian authorities having tasks on the management and implementation of the Programme, being: SAPARD Agency (PARDF) National Fund Managing Authority Certification Body For the technical and financial implementation of Special Instrument for Pre-accession, Agriculture and Rural Development, the Romanian Government adopted on 14 th of September 2000 the Government Emergency Ordinance no. 142/2000, approved under Law no.309/2001 concerning the setting up, organising and functioning of SAPARD Agency, unit subordinated to the Ministry of Agriculture, Food and Forests, organized at central and regional level (8 regional offices corresponding to the 8 development country regions). Also, in 2006, through GEO no.13/2006 the SAPARD Agency was reorganized, resulting the setting up of Paying Agency for Rural Development and Fishery (PARDF). As provided at art.2 (a), section A within Law no. 316/2001 on ratifying the Multi-Annual Financing Agreement, the National Fund represents the body named by Romania and under the National Authorizing Officer acting as Competent Authority for SAPARD Programme. The Managing Authority for the SAPARD Programme has functioned first within the Ministry of European Integration, afterwards being taken over by the Ministry of Public Finances, subsequently being taken over by the Ministry of Agriculture, Forests and Rural Development. The function is performed by Directorate General for Rural Development, having attributions of Managing Authority for the SAPARD Programme and Managing Authority for the National Rural Development Programme. The Certifying Body function is performed by the Audit Authority within the Romanian Court of Accounts. The Managing Authority for the SAPARD Programme took actions both in the process of accreditation preparation and afterwards, initiating arrangements and promoting decisions for the purpose of: closing, ratifying and notifying the Financing Agreements between the Romanian Government and the Commission of the European Communities; 7

8 setting-up the Monitoring Committee for the SAPARD Programme (Prime Minister Decision no. 271/2001, with the subsequent amendments and completions) and organizing the reunions of the Monitoring Committee; elaborating the annual reports on implementing the SAPARD Programme; institutional support for completing the organizational structure and ensuring the location and the necessary endowments of the SAPARD Agency; developing the specific procedures for accrediting the measures comprised in the National Plan for Agriculture and Rural Development; improving the Programme s publicity; presenting the proposals concerning the amendments of the Programme in order to be approved by the STAR Committee, as well of the financial table within NPARD; organizing, together with the European Commission, the ex-ante, mid-term and expost Programme s assessment; notifying to the involved bodies on the priorities of action in the legislative and institutional field; other institutional and legislative initiatives required for attaining the specific objectives of the SAPARD Programme and for increasing the activities efficiency. During , MA organised seventeen reunions of the Monitoring Committee. During the reunions were adopted decisions regarding the: modify and complete the structure of, and representation within, the SAPARD MC by including the new member; modify the MC Statute to enable the Committee to work more efficiently, with a new procedure on approving the meetings minutes. set up consultative working groups on measures while also involving the economic and social partners, in order to constantly keep professional associations and economic and social partners up to date as to the SAPARD measures modification, the most frequently-encountered problems regarding their implementation, and the progress made in their implementation; amendment of NPARD, respectively financial tables reallocation within the measures amendment of the measures technical fiches SAPARD Programme s implementation annual reports approval; approval of the Plan for the implementation of Measure 4.2 Technical Assistance and action plans regarding the SAPARD absorption. The amendments of the National Programme for Agriculture and Rural Development have been approved under the EC Decisions from: , , , , , , and Among these, five of them regarded the amendment of the NPARD financial table, respectively EC Decisions from: 11 th of July 2002, 17 th of September 2004, 4 th of July 2005, 11 th of April 2006 and 27 th of December The last amendment proposal for the financial table was approved under EC Commission Decision from December 20 th 2006, modifying EC Decision C(2000)3742/12 th of December 2000 regarding the approval of the SAPARD Programme in Romania. 8

9 Details of major amendments to programme s management and monitoring systems The main amendments in the Programme s management consisted in moving MA SAPARD from the Ministry of European Integration, to the Ministry of Public Finances and afterwards to MAFRD, as well the setting up of the Paying Agency for Rural Development and Fishery, by the re-organizing of the SAPARD Agency. Regarding the main amendments of the monitoring system, during the implementation of the SAPARD Programme, new tables with indicators were approved in order to monitor differently the damaged projects financed under Measures 1.1, 2.1, 3.1 and 3.4. Thus, by the amendment of the PARDF s functioning chart, the collection of the indicators and the submission of the monitoring tables from the regional level to central level is no longer carried out by an IT expert within the Programme Implementation Department, but by an expert within the Evaluation, Contracting Unit. From the beginning of the programme, PARDF submitted to NAO/CPA services a number of 122 instructions for the modifications of the procedures, all of them transmitted to EC services by NAO for examination/information. Also NAO has submitted a number of 23 instructions for the modifications of the procedures, modifying the National Funds procedures. Using Technical Assistance 10 projects in value of thousand LEI 5,839.98, representing MEUR 1.54, were approved by the end of 2008 under the technical assistance measure. The approved projects ensure technical assistance for the Monitoring Committee (1 project), national workshops (2 projects), information and advertising campaigns (2 projects), training studies for other measures (2 projects), development of a data base containing reference prices (1 project) and the accomplishment of the intermediary assessment of the Programme (2 projects). All the projects financed under this measure were finalized by December 31 st 2008 and payments in value of thousands LEI 5,214.57, representing MEUR 1.42, were authorized and executed. As regards Measure 4.1 Improvement of vocational training, 5 projects were approved by the end of 2008, in value of thousand LEI 13,287.55, representing MEUR All these projects had been contracted in The approved projects ensure the improvement of the vocational training for production practices, the training of the heads of agricultural and forestry holdings in the economical, technical and legal fields, the diversification or the re-orientation of different activities in rural area, the processing and marketing of agricultural and fishery products according to specific technologies, the protection of the environment, setting up of producers groups and to promote their objectives, principles and functioning, as well as the training of the members of the certified producers groups, in order to improve their activity. All the projects financed under this measure were finalized by December 31 st 2008 and payments in value of thousands LEI 10,521.61, representing MEUR 3.03, were authorized and executed. 9

10 The involvement of the local authorities and central institutions structures in the SAPARD Programme implementation To attain the Programme objectives and ensure efficient information dissemination among potential beneficiaries, a decisive role is played by the local authorities and by the decentralised structures of central public institutions involved in the Programme implementation. Thus, in order to ensure institutional transparency between the central and local and/or regional bodies, the authorities have stepped up actions at central and local level, being permanently concerned with increasing the efficiency of institutional communication with the Programme target audience. The prefectures and the rural town halls, on the one hand, and the Regional Offices for SAPARD Implementation, the DARD/MAFRD and the County Offices for Agriculture Consultancy, on the other hand, intensified dissemination and support activities aimed at the potential beneficiaries of the Programme during the Programme implementation. The local authorities have been involved in implementing the SAPARD Programme by their participation to the publicity campaign and to other information sessions. The activities related to the promotion of SAPARD Programme aimed at three main directions: the elaboration and distribution of informative materials (leaflets, brochures, presentations); participation to different seminars, symposiums and fairs; information activities by media, consultancy companies, agriculture and agri-food institutions and bodies. Data to demonstrate that Community funds have not replaced funding already available According to the provisions of art. 3 Complementarity and technical assistance from the Council Regulation (EC) no.1268/1999 on Community support for pre-accession measures for agriculture and rural development in the applicant countries of central and Eastern Europe in the pre-accession period, "Community action complements national actions appropriate or contribute to them". To these provisions, the Romanian Government promotes a policy to support the agricultural producers. Of the budget for 2009, in order to support the agricultural producers within the vegetal and animal sector on the basis of the financial support programmes promoted by the Ministry of Agriculture and Rural Development has been allocated the amount of 2,543,791,885 lei. Activities performed in order to resolve the issues that appeared in implementing the SAPARD Programme In order to resolve the issues that appeared in implementing the SAPARD Programme, have been performed the following actions and measures: actions to ensure the necessary personnel; activities to train the personnel; measures regarding the legal framework during SAPARD implementation period ; activities aimed at improving the implementation of SAPARD Programme; activities carried out by the IT Unit in order to solve the problems identified during the SAPARD Programme s implementation; 10

11 measures related to endowments during SAPARD Programme s implementation period ; activities carried out by the Control and Antifraud Directorate in order to solve the issues identified during SAPARD Programme s implementation. Control missions performed by the Control and Antifraud Directorate during The Control and Antifraud Directorate (CAD), is a directorate directly subordinated to the General Director of PARDF, which carries out, in compliance with the accredited procedures, technical and financial verification of the projects as regards the compliance, eligibility, selection, procurements, payments, the maintenance of the projects eligibility on a monitoring period of 5 years since the last payment, and the internal control, aiming at preventing fraud and at assuring the proper use of the funds, by observing the qualitative requirements specified in the project. The main control activities included the followings: I. the verification of the projects during their implementation and execution period; II. the verification of the projects after the last payment (ex-post verification). Audit missions Between 2000 and 2009 the representatives of the European Commission carried out the following audit missions: Missions related to the clearance of the SAPARD Agency s accounts according to art. 11, Section A from MAFA for the years based on the information sent by the Romanian authorities for the annual accounts and their certification; Missions related to the SAPARD Agency s conformity clearance, according to art. 12, Section A from MAFA: - Between June 28 th July 2 nd 2004, for measure 1.1 for 2004; - Between October 24 th 28 th 2005, for Measures 1.1, 2.1, 3.1 and 3.4 for 2005; - Between September 18 th 22 nd 2006 for Measures 1.1 and 2.1 for 2006; - Between September 17 th 21 st 2007 for Measures 1.1, 2.1 and 3.1 for 2007; - Between September 8 th 12 th 2008 for Measures 1.2, 3.1, 3.3 and 3.5 for 2008; - Between November 23 rd 27 th 2009 for the year 2009 and aimed at verifying the management and control systems and whether the expenditures registered under SAPARD Programme observe the legal dispositions of the European Union; As regards the observance of the accreditation criteria according to MAFA stipulations, an audit mission was carried out in the interval June 3 rd 13 th The Audit missions during , of the Internal Audit Directorate within PARDF are detailed presented in this Report. Programme implementation On July 31 st 2007 Romania has ceased signing contracts with final beneficiaries under the SAPARD program and the total amount contracted was of Euro 1,131,853, EU contribution, under 4,746 contracts signed. At December 31, 2009, the total contracted value was of Euro 1,023,409, EU contribution, under 4,451 projects, with a decrease by 9.58% of the contracted value and by 6.22% of the number of projects approved, due to the cancellation of certain projects. 11

12 During the programme implementation, Romania received from the European Commission the amount of Euro 1,030,733, out of which, the amount of Euro 75,074, represent the value of the two advances received in 2002 and 2004 and the amount of Euro 955,658, represents the reimbursement of the declarations of expenditure and payment applications submitted to EC. The amount of Euro 1,030,733, includes financial correction in amount of Euro 13,964, in accordance with Commission Decision C(2009)3850 on and which has already been retained by the EC in conformity with the notification no.gjv/fk/fa/d(2009)218502/dg AGRI- G4 no on The interest accrued on is in amount of Euro 2,900, (the amount accrued during 2009 was of Euro 812,669.83). Also, the total interest accrued on the Euro Sapard account on is in amount of Euro 3,281, Therefore, the amount to be refunded to the European Commission will be the final balance of the SEA, which includes interest accrued on SEA by the transfer cutoff date to the EC. SAPARD Programme s implementation of measures For the 10 measures accredited under SAPARD Programme, during 2009 the implementation of the contracted projects was continued by executing a number of 479 payment instalments to the beneficiaries of the SAPARD Programme reaching a total value of MEUR At the end of 2009, the total value of the financial commitments under SAPARD Programme was of MEUR 1, , resulting in a coverage degree of 100% of AFA for and of 32.04% for AFA As regards the consumption rate of the allocated funds, at the end of 2009, the total value of the payments executed to the beneficiaries of the SAPARD Programme was of MEUR 1, , representing a consumption rate of 100% of AFA for and of 29.22% for AFA Until December 31 st 2009, projects were approved with a public value of MEUR 1, , on the investment measures. Out of these projects 10.57% represent contracts under Measure 1.1, 0.46% represents contracts under Measure 1.2, 17.70% represent contracts under Measure 2.1, 44.11% are projects contracted under Measure 3.1, 0.07% are projects contracted under Measure 3.2, 0.02% are projects contracted under Measure 3.3, 24.44% are projects contracted under Measure 3.4 and 2.62% are projects contracted under Measure 3.5. The public contracted value, afferent to the contracts on Measure 1.1, was of MEUR , representing 25.90% out of the total commitments of the PARDF. On Measure 1.2 the public contracted value was of MEUR i.e. 2.63% out of the total commitments of the PARDF. On Measure 2.1, the public contracted value was of MEUR i.e % out of the total commitments of the PARDF. On Measure 3.1, the public contracted value was MEUR i.e % out of the total commitments. On Measure 3.2, the public contracted value was MEUR i.e. 0.01% out of the total commitments. On Measure 3.3, the public contracted value was MEUR i.e % out of the total commitments. On Measure 3.4, the public contracted value was MEUR i.e. 5.19% out of the total commitments of the PARDF. On Measure 3.5 the public contracted value was MEUR i.e. 4.93% out of the total commitments. 12

13 At the same time, by 31 December 2009, a number of 120 projects affected by natural disasters were approved having a public value of MEUR on the investments measures. Out of these projects, 2.50% represent contracts on Measure 1.1, 69.17% represent contracts on Measure 2.1 and 25.83% represent contracts on Measure 3.1, respectively 2.50% are projects contracted on Measure 3.4. The contracted public value afferent to the contracts affected by disasters on Measure 1.1 was of MEUR 6.057, representing 8.48% from the total PARDF commitments. On Measure 2.1, the public contracted value was of MEUR , respectively 80.93% from the total PARDF commitments. On Measure 3.1, the public contracted value was of MEUR 7.133, respectively 9.98% from the total commitments and on Measure 3.4, the public contracted value was of MEUR 0.432, respectively 0.60% from the total PARDF commitments. Up to 31 st of December 2009, the amount of the paid projects on measures was of MEUR 1, , respectively MEUR for year 2009, out of which: MEUR for Measure 1.1, MEUR for the year 2009, respectively. The amount of executed payments on 2009 shows a 3% increase as compared to the amount of the projects paid until 31 st of December 2008; out of the total of executed payments for Measure 1.1, the amount of MEUR represents the executed payments for the projects affected by floods; MEUR for Measure 1.2, MEUR for the year 2009, respectively. The amount of executed payments on 2009 shows a 64% increase as compared to the amount of the projects paid until 31 st of December 2008; MEUR for Measure 2.1, MEUR for 2009, respectively. The amount of executed payments for year 2009 shows a 4% increase as compared to the value of the projects paid prior to 31st of December 2008; out of the total of executed payments for Measure 2.1, the amount of MEUR represents the amount of executed payments for the projects affected by floods; MEUR for Measure 3.1, MEUR for 2009, respectively. The amount of the payments executed for year 2009 shows a 3% increase as compared to the value of the projects paid prior to 31st of December 2008; out of the total executed payments for Measure 3.1, MEUR represents the value of the payments executed for the projects affected by disasters; MEUR for Measure 3.2, MEUR for 2009, respectively. The amount of the payments executed for year 2009 shows a 95% increase as compared to the value of the projects paid prior to 31 st of December 2008; MEUR for Measure 3.3, MEUR for the year 2009, respectively. The amount of executed payments on 2009 shows a 2% increase as compared to the amount of the projects paid until 31 st of December 2008; MEUR for Measure 3.4, MEUR for year 2009, respectively. The amount of the payments executed for year 2009 shows a 5% increase as compared to the amount of projects paid prior to 31st of December 2008; out of the total of executed payments for Measure 3.4, MEUR represents the amount of payments executed for the projects affected by floods; MEUR for Measure 3.5, MEUR for the year 2009, respectively. The amount of executed payments on 2009 shows a 35% increase as compared to the amount of the projects paid until 31 st of December 2008; The amount of executed payments for Measure 4.1, is in value of MEUR; The amount of executed payments for Measure 4.2, is in value of MEUR. 13

14 By December 31 st 2009, 4,374 projects were finalized, out of which 450 on Measure 1.1, out of which 3 finalized projects being projects affected by natural disasters, 19 projects were finalized on Measure 1.2, 843 projects were finalized on Measure 2.1 out of which 83 finalized projects being projects affected by natural disasters, 1,916 projects on Measure 3.1 out of which 31 finalized projects being projects affected by natural disasters, 1,018 projects on Measure 3.4, out of which 3 finalized projects being projects affected by natural disasters, 113 projects on Measure 3.5, 5 projects on Measure 4.1 and 10 projects were finalized on Measure 4.2. Out of 4,374 projects, 409 projects were finalized in 2009 as follows: 20 projects under Measure 1.1, 13 projects under Measure 1.2, 94 projects under Measure 2.1, 109 projects under Measure 3.1, 116 projects under Measure 3.4, 57 projects under Measure 3.5. First assessment of the economic, social and environmental impact of the programme at the different levels A preliminary assessment of the implementation results and achieving the objectives established for the SAPARD measures was presented at the beginning of chapter 6. A quantitative and qualitative analysis of the implementation effects and of the progress from a social-economic and environment point of view shall be available at the end of the SAPARD Programme s ex-post assessment report. Conclusions of the mid-term assessment s recommendations and the recommendations taken into consideration in implementing the post-accession programmes Updating the Mid-term assessment of the SAPARD Programme for , has been performed by an independent evaluator, the Agrotec Consortium including Kvistgaard Consult/DDH Consulting in association with a number of local and international experts, during October 27 th February 28 th It has been performed under a project financed under measure 4.2 Technical Assistance, project that ended with a Report subjected to analysis of the Monitoring Committee and forwarded to the European Commission on May 5 th 2006 together to the Managing Authority and PARDF s position on the conclusions and recommendations formulated by the evaluator. Coordination of SAPARD Programme with other Financial Instruments for International Support In order to coordinate the Programme and to avoid overlaps and ensure a transparent use of international funding instruments, Romania has created the structures needed to ensure the coordination, information and monitoring of the international financial assistance. Regarding the technical assistance performed under PHARE, during , the personnel of the Directorate General of Internal Audit and of the National Fund within the Ministry of Public Finances, as well as the personnel of Romania s Court of Accounts, involved in implementing of the SAPARD Programme, have benefited from technical assistance. Concerning the technical assistance provided under the PHARE Programme, during , PARDF benefited from numerous projects. Also, through other international financial instruments, the following projects have been financed: The IFAD - funded Rural Development Project for the Apuseni Mountains; 14

15 The Rehabilitation and Reforming of the Irrigation Sector project financed by the IBRD; Rural Development Project financed under the World Bank; Rural Financing Project; The Modernizing the Agricultural Knowledge and Information Systems (MAKIS) project funded by the World Bank. The experience resulted from implementing the SAPARD Programme The lessons learnt from implementing the SAPARD Programme, especially regarding the difficulties on applying, have been taken into consideration for drawing up of the new Programme. 15

16 CHAPTER II INTRODUCTION In accordance with the provisions of Article 8, section B of the Annex to the Multi-Annual Financing Agreement between the Government of Romania and the Commission of the European Community (MAFA), signed on 2 nd of February 2001 in Brussels (Agreement ratified by Law no. 316/2001 published in the Official Gazette (OG) no. 362/2001), Romania has the responsibility of elaborating and submitting to the European Commission, until 30 of June 2010, the Final Report on SAPARD Programme implementation for The Final Implementation Report presents the data corresponding to the entire period , as well as distinctly the data corresponding to Previous to the submission to the Commission, the Managing Authority for SAPARD Programme (MA) in collaboration with the institutions involved in the Programme s implementation, draws up the report and submits it for analysis and approval to the members of the Monitoring Committee for SAPARD Programme. Up to date, Romania has drawn up six annual reports on SAPARD Programme implementation, the first one covering the 1 st of August 2002 the 31 st of December 2003 implementation period, the second one: 1 st of January st of December 2004, the third: 1 st of January st of December 2005, the fourth: 1 st of January st of December 2006, the fifth: 1 st of January st of December 2007 and the sixth : 1 st of January st of December The Final Report on SAPARD Programme implementation in Romania covers the implementation period and, in compliance with Article 8 (5), Section B of MAFA, includes information on: the changes in general conditions of relevance to the implementation of the Programme, in particular, the main socio-economic trends, changes in national, regional or sector policies and, where applicable, their implications for the consistency between SAPARD assistance and that from other Community financial instruments; the progress in the implementation of the priorities and the measures in relation to the attainment of the objectives of the Programme, their specific targets in the Programme, which allows for a quantification of the physical indicators and indicators of results and of impact, in the Programme; the steps taken by the Managing Authority, the Paying Agency for Rural Development and Fishery (the former SAPARD Agency) and, where appropriate, by the Monitoring Committee to ensure the quality and the effectiveness of the implementation; 16

17 the steps taken to ensure the co-ordination of the entire Community pre-accession assistance; the financial tables showing the expenditure per measure and, where appropriate, per sub-measure. The Final Report is drafted in compliance with the European Commission s Guidelines on the elaboration of the Annual Report of the SAPARD implementation in 2009 and the Final SAPARD Report, sent by address no / The Implementation of SAPARD Programme in Romania The Special pre-accession Programme for Agriculture and Rural Development SAPARD represents a financial contribution of the European Community (EC), provided for in the Council Regulation (EC) no. 1268/21 st of June 1999 on Community support for pre-accession measures for agriculture and rural development in the applicant countries of central and eastern Europe in the pre-accession period. Regarding the geographical coverage, is to be mentioned that the SAPARD Programme is a national programme, being implemented on the entire Romanian territory. According to Article 1(2) of Regulation no. 1268/1999, the Community support for the period, aims to contribute to the achievement of the following general objectives: a) the implementation of the acquis communautaire concerning the common agricultural policy and related policies; b) solving the priority and specific problems for the sustainable adaptation of the agricultural sector and rural areas in the applicant countries. The purpose of SAPARD Programme is to lay dawn the necessary framework for the implementation of a performing agriculture and a sustainable development of the rural areas in the candidate countries. The SAPARD Programme promotes the undertaking of the acquis communautaire and the progressive adaptability of the market mechanisms to the principles governing the Common Agricultural Policy. The SAPARD Programme grants to the candidate countries full responsibilities regarding the management of the investment projects, beginning with the selection stage until the payment execution, with the purpose of accumulating experience in the implementation of EU practices and rules, as well as in the appropriate management of the post-accession funds. On the basis of performance criteria for all the candidate countries (agricultural surface, population occupied in agriculture, gross domestic product, specific territorial situation, less favoured areas), the Commission Decision no. 595/EC/1999 lays down the annual indicative allocations granted to the applicant countries; thus the financial community contribution for Romania represents about 151 million Euro/year (prices/1999). On the basis of implementing the SAPARD Programme was the National Plan for Agriculture and Rural Development (NPARD), drawn up by the Ministry of Agriculture, Forests and Rural Development and approved in accordance with the Commission Decision EC (2000) no of 12 th of December

18 The National Plan for Agriculture and Rural Development was adopted under the Law no.157 in September 2000 on the National Plan for Agriculture and Rural Development corresponding to the SAPARD Programme for co-financing it from the state budget. NPARD classifies the Romanian priorities regarding the sustainable development of rural areas in four axes: Priority 1: Improving the access to markets and the competitiveness of agricultural processed products; Priority 2: Improving infrastructures for rural development and agriculture; Priority 3: Development of rural economy; Priority 4: Development of human resources. In Romania, these priority axes are sustained through 10 measures (from a total of 15 provided for in the Council Regulation (EC) no. 1268/1999) considered by the Romanian authorities as being relevant for rural development priorities, as follows: Measure 1.1: Measure 1.2: Measure 2.1: Measure 3.1: Measure 3.2: Measure 3.3: Measure 3.4: Measure 3.5: Measure 4.1: Measure 4.2: Improvement of processing and marketing of agricultural and fishery products; Improving the structures for quality, veterinary and plant-health controls, for the quality of foodstuffs and consumer protection; Development and improvement of rural infrastructure; Investments in agricultural holdings; Setting-up producers groups; Agricultural production methods designed to protect the environment and maintain the countryside; Development and diversification of economic activities, providing for multiple activities and alternative income; Forestry; Improvement of vocational training; Technical assistance. The implementation of NPARD measures began gradually, starting on the 31 st of July 2002, when the European Commission adopted the Decision 2002/638/EC conferring the management of SAPARD aid implementing agencies for the first three measures, respectively, measure 1.1 Improvement of processing and marketing of agricultural and fishery products, measure 2.1 Development and improvement of rural infrastructure and measure 4.2 Technical assistance. On 5 th of December 2003, the Commission adopted the Decision 2003/846/EC conferring the management of SAPARD aid implementing agencies for three more measures, respectively, measure 3.1 Investments in agricultural holdings, measure 3.4 Development and diversification of economic activities, providing for multiple activities and alternative income and measure 4.1 Improvement of vocational training. During 2006, the last 4 measures of NPARD 1 were accredited, respectively measure 1.2 Improving the structures for quality, veterinary and plant-health controls, for the quality of 1 After the consultation with the Community, the Romanian authorities have decided not to implement measure 2.2. MAFRD, submitted to complete the measure 2.1 Development and improvement of rural infrastructure with a new sub-measure Infrastructure for the preventing and the protection against floods. 18

19 foodstuffs and consumer protection, measure 3.2 Setting-up producers groups, measure 3.3 Agricultural production methods designed to protect the environment and maintain the countryside and measure 3.5 Forestry, after the submission to the European Commission on 30 th January 2006 of the final version of the procedures manual for their implementation. The European Commission Decision no. EC/298/2006 of conferring the assistance management for the above mentioned measures was adopted on 20 th of April In order to define the rules and the management conditions of the SAPARD Programme in Romania, the Government of Romania and the Commission of the European Communities signed, in Brussels, on 2 nd of February 2001, the SAPARD Multi-Annual Financing Agreement (MAFA). This agreement was ratified by Law no. 316/ 2001 (OG no. 362/ ). According to the provisions of MAFA, the Community financial contribution, as well as the validity period of this contribution is annually established, in the annual financing agreements. Up to the present, the Romanian Government and the Commission of the European Communities signed the Annual Financing Agreements (AFA) afferent to the years 2000, 2001, 2002, 2003, 2004, 2005 and 2006 as follows: AFA 2000 signed on 27 th of February 2001 and ratified by Law no. 317/2001 (OG no. 338/ ) providing for a Community financial contribution of 153,214,194 Euro; AFA 2001 signed on 30 th of January 2002 and ratified by Law no. 416/2002 (OG no. 508/ ) providing for a Community financial contribution of 156,328,303 Euro; AFA 2002 signed on 1 st of April 2003 and ratified by Government Emergency Ordinance no. 26/2003 (OG no. 283/ ) providing for a Community financial contribution of 160,630,119 Euro; AFA 2003 signed on 31 st of July 2003 and ratified by Law no. 496/2003 (OG no. 843/ ) providing for a Community financial contribution of 162,223,385 Euro. This agreement was amended by AFA 2003/II signed on 24 th of December 2004 and ratified by Law no. 258/2005 (OG no. 861/ ) providing for an increase of Community financial contribution to 163,339,076 Euro. AFA 2004 signed on 12 th of May 2005 and ratified by Law no. 265/2005 (OG no. 920/ ) providing for a Community financial contribution of 157,640,000 Euro. AFA 2004 introduced in MAFA the provisions of Council Regulation no. 2008/2004 on the new limits for the rates of aid, establishing that, in respect of investments in projects except those in infrastructure of a type not generating substantial net revenue, the public aid (cumulative) of granted from all sources cannot exceed 50% of total eligible cost. The above mentioned Agreement was amended by AFA 2004/II signed on 7 th of July 2005 and ratified by Law no. 25/2006 (OG no. 205/ ) that provides for a increment of the EC contribution for 2004, up to 158,690,000 Euro. 19

20 AFA 2005 signed on 29 th December 2005 at Bucharest and on 3 rd of January 2006 at Brussels foresees a financial contribution of 175,210,000 Euro. The amendments brought to MAFA consist in the modification of the financial rules regarding the public procurements, in compliance with the new Financial Regulation in force in the European Community, as well as in introducing specific rules of reducing the community co-financing for the cases where the interval between receiving the supporting documents needed to make the payment and issuing of the payment order exceeds three months. AFA 2005 provides, also, the compulsoriness of using the accounting and financial reporting system which meets the internationally accepted accounting standards and internationally accepted auditing standards. The Romanian Government and the European Communities Commission signed on 31 st October 2006 at Bucharest and respectively at Brussels, the Annual Financing Agreement 2006 (AFA 2006). The agreement was ratified by Law no. 66/2007 (OG no. 228/ ). AFA 2006 entered into force on the 12 th of April 2007, when the European Commission received the official notification regarding the ratification of the Agreement by Romania. The provisions comprised in AFA 2006 refer both to establishing the financial commitment of the Community for Romania for 2006, as well as amending the MAFA and the Annual Financial Agreements for the years Therefore, the maximal yearly contribution foreseen for Romania for 2006 is 192,374,000 Euro. The agreement also foresees the extension of the validity term of the financial commitments established through the Annual Financial Agreements 2003, 2004 and 2005, namely until 31 st December 2007 for AFA 2003 and 2004 and, respectively, until 31 st December 2008 for AFA At the same time, AFA 2006 foresees a provision that is also included in article 3 of the Annual Financial Agreements according to which no contract that involves Community funds for AFA shall be concluded by PARDF with a beneficiary after the date Romania begins to conclude contracts through EAFRD. AFA 2006 also foresees the amending of the Multi-Annual Financial Agreement, both by introducing new provisions regarding Section A, B and F of the Annex to the Multi-Annual Financial Agreement, and also by adding a new Section H, that has as main purpose to establish rules regarding the Community external assistance. The Romanian Government and the European Communities Commission signed on 4 th of December 2008 at Bucharest and respectively at Brussels, the Agreement between the Romanian Government and the European Communities Commission, on behalf of the European Commission, regarding the modification of the Annual Financing Agreement The agreement was ratified by Government Emergency Ordinance no. 213/2008 (Official Gazette no.842/ ) and approved by Law no. 82/2009 published in the Official Gazette no. 230/ AFA 2006 / II came in force on 13 th of January 2009, date on which the European Commission sent the official notification regarding the fulfilment of all the necessary formalities concerning the ratifying of the Agreement. The agreement also foresees the extension of the validity term of the Community s financial commitments up to 31 st of December 2009, thus allowing to avoid the decommitment of the funds allocated to Romania under the SAPARD Programme for

21 CHAPTER III OPERATIONAL INFORMATION 3.1 Changes in the general conditions of Romania and their impact on the SAPARD Programme implementation Institutional and political framework in Romania During period, presidential elections took place in 2000, 2004 and Following the presidential and parliamentary elections taking place in Romania on 28 th of November 2004, the country witnessed a number of changes at the level of its public institutions. With the new Government being invested in December 2004, the following period saw a series of restructuring actions at the level of central and local public administration. To this end, in March 2005, the Ministry of Agriculture, Forests, and Rural Development went through a reorganisation, under Government Decision (GD) No. 155/2005, published in the Official Gazette no. 211/ Thus, through Government Emergency Ordinance no. 24/2007 regarding the setting out of reorganization measures for the central public administration (O.G. no. 247/ ), at the beginning of 2007 the structure and composition of the Romanian Government was modified. In this regard, in April 2007, the Ministry of Agriculture and Rural Development was submitted to a re-organization, on the basis of Government Decision no. 385/2007 on the organization and functioning of the Ministry of Agriculture and Rural Development, published in the O.G. no. 282/ Following the parliamentary elections of 30 November 2008, the structure and composition of the Romanian Government was modified, through Government Emergency Ordinance no. 221/2008 regarding the setting out of reorganization measures for the central public administration (O.G. no. 882/ ). In this regard, at the beginning of 2009, the Ministry of Agriculture, Forests and Rural Development was submitted to a re-organization, on the basis of Government Decision no. 8/2009 on the organization and functioning of the Ministry of Agriculture, Forests and Rural Development, published in the O.G. no. 38/ The changes of structure and componence of the Government involved, where necessary, the reorganization, fusion, and taking over of the activities and specialised structures on various domains or ceasing the activities of some structures. 21

22 Structural characteristics of Romanian economy and the macro-economic development During , the Romanian economy recorded a significant growth, as well as deflation and an unemployment rate decrease (registered by the National Agency for Employment), hence confirming the progress made towards a sustainable economic development. The country s GDP recorded a significant growth during , reaching 514,654.0 million lei in In 2009, the GDP decreased to 491,273.7 million lei. The annual average inflation rate marked a decrease in In 2009, it amounted 5.59 percent, compared to 7.85 percent in During a decrease in the unemployment rate has been observed, as recorded by labour placement agencies compared to 2009, when it began to rise, reaching 6.8 percent compared to 5.8 in In 2008, in nominal terms, total household income 2 was monthly lei/person, up with lei compared to Also, the income by farming household increased with lei in comparison with In the agricultural goods and services sector, during , the largest share was held by plant crops. In the agricultural production sector, compared to the previous year, were recorded increases in 2001 (up 22.7 percent), 2003 (up 7.5 percent), 2004 (up 18.1 percent), 2006 (up 2.9 percent), as well as in the year 2008 (up to 21.2 percent). In 2009, the livestock production increased by 7.6% and the vegetal production 42.0% in comparison with the previous year. The denomination process of the national currency has started in 2005 and came into force on July 1 st, according to the strategy elaborated by the National Bank and approved by Law in On July 1 st 2005, the national currency, leul, was denominated thus that 10,000 lei became 1 new leu. The main macro-economic indicators corresponding to the period are presented in Table Includes revenues from salaries, agriculture, independent non-agricultural activities, social services, ownership, sale of household assets, and other financial income, as well as income in kind (equivalent in RON); 22

23 The main macro-economic indicators corresponding to the period Table ) ) National gross income - million lei; current prices 80, , , , , , , , ,678.5 GDP million lei; current prices 80, , , , , , , , , ,273.7 Annual GDP growth rate (previous year =100) % Gross value added share million lei; current prices 72, , , , , , , , ,935.4 Agriculture, forestry, game economics, fishery 8, , , , , , , , , ,768.0 Industry, including energy 21, , , , , , , , , ,474.8 Constructions 3, , , , , , , , , ,386.4 Trading, fixing vehicles and domestic items; hotels and restaurants; transport and communications. Financial activities, real estate, renting and enterprises services. 17, , , , , , , , , , , , , , , , , , ,133.4 Other service activities 9, , , , , , , , , ,880.3 Gross value added share -(previous year =100) % Agriculture, forestry, game economics, fishery Industry, including energy Constructions Trading, fixing vehicles and domestic items; hotels and restaurants; transport and communications. Financial activities, real estate, renting and enterprises services , Other service activities Agriculture, forestry, game economics, fishery. - % in GDP , Goods and services export -(previous year =100) % , Goods and services import -(previous year =100) % Annual average inflation rate - %

24 Table 3.2 Agriculture and rural development: basic data ( ) Indicators ) ) Agricultural branch production - million lei; current prices Total 16,071 27,843 31,585 40,412 55,314 46,540 50,650 47,700 66,994 60,352 - Crops 9,910 17,482 18,084 25,919 38,097 27,959 31,327 28,723 45,742 36,394 - Livestock 5,962 10,045 13,139 14,118 16,825 18,186 18,849 18,292 20,536 23,266 - Agricultural services Agricultural branch production indices (previous year = 100) % Total Crops Livestock Agricultural services Livestock numbers thousand head 3) Cattle total 2,870 2,800 2,878 2,897 2,808 2,862 2,934 2,819 2,684 2,503 - cows, heifers and buffaloes 1,775 1,746 1,759 1,757 1,756 1,812 1,810 1,732 1,639 1,528 Swine total 4,797 4,447 5,058 5,146 6,495 6,622 6,815 6,565 6,174 5,893 -breeding sows Sheep and goats total ,195 7,776 7,945 8,125 8,086 8,298 8,406 9,334 9,780 10,385 Equines total Poultry total 70,076 71,413 77,379 76,616 87,014 86,552 84,991 82,036 84,373 83,631 Layer hens 40,760 42,156 44,667 44,122 51,889 49,725 50,278 45,208 45,529 39,834 Bee families thousand ,106 Source: National Statistics Institute of Romania 1) Semi-final data 2) Provisional data 3) Livestock numbers as of December 1, 2004, 2005, 2006, 2007, 2008 and 2009 and December 31,

25 Demographic developments and population characteristics in Romania As of July 1 st 2009, Romania s population totalled million inhabitants, its rural population accounting for 44.9 percent of the total. A negative birth growth rate combined with external migration led to a continued decline in Romania s population (down thousand inhabitants in July 1 st July 1 st 2009; down thousand inhabitants in July 1 st July 1 st 2009). During , the rural population downsized with thousand inhabitants, and the urban one decreased with thousand inhabitants. In 2009, the drop was triggered also by the population decline in the rural area (down thousand inhabitants compared to 2008). The drop in the rural area was more prevalent among the female population. Consequently, the country s average population density decreased compared to 2008, reaching in inhabitants per square km (with 46.5 inhabitants per square km in the rural area); also this decrease can be noticed compared to 2000, when the average population density was of 94.1 inhabitants per square km (with 47.9 inhabitants per square km in the rural area). The age structure of the population confirmed that the slow, but steady, trend of demographic aging continued, with higher numbers in rural areas. In the rural area, the female population is older than the male one. The average population age higher among the female one has risen in both areas compared with 2008, as well as compared to 2000 (Table 3.3). Education wise, in the third quarter of the year 2009, 60.8 percent of the population of 15 and over has at least high-school education (52.1 percent high-school, and percent higher education graduates), while 37.7 percent of the population of 15 and over presents a low education level. There are differences between the urban and the rural population structures in terms of their level of education. Thus a larger concentration of the 15+ population with higher education is found in the urban area (with 77.4 percent of people being high-school or upper education graduates), while in the rural area, the low-education population prevails (about 56.7 percent have graduated the elementary or secondary school or have no education at all). The most significant gap is found among higher education graduates, whose share is seven times higher in the urban area. 25

26 Population & density Population - 1 st of July 1) (number) Table Romania 22,435,205 22,408,393 21,794,793 21,733,556 21,673,328 21,623,849 21,584,365 21,537,563 21,504,442 21,469,959 Rural (absolute numbers) 10,190,607 10,164,645 10,186,058 10,133,399 9,777,730 9,743,952 9,670,427 9,659,904 9,669,114 9,646,443 - % Density (inh/km 2 ) Romania - % Rural - % ) Data were calculated based on the Population and Homes Census compiled on March 18, Population structure by age Romania 0-14 years years 65 years and over of which: rural 0-14 years years 65 years and over ,

27 Average age of population Total Male Female Total Male Female Total Male Female Romania Rural Average age of population Total Male Female Total Male Female Total Male Female Romania Rural Average age of population Total Male Female Total Male Female Total Male Female Total Male Female Romania Rural Source: National Statistics Institute of Romania 27

28 Agricultural and rural development policy in Romania The year 2000 marked the beginning of the integration decade, characterized by reforms meant to prepare Romania s accession to the European Union (adopting the Community acquis), obtaining the market economy and supporting the commercial holdings. For those, were granted different forms of support in order to improve the holding s technical endowment, supporting the good s production and resulting inputs. In the vegetal sector: During this period were implemented programmes for the improvement of the agriculture s technical endowment, thus: Acquisition programme for tractors, agricultural machines, facilities, equipments, by supporting with 45%-55% of the acquisition price; Acquisition programme for irrigation installations, by supporting with 50%-70% of the acquisition price; During 2001 a direct support of 1 million ROL/ha was granted for: wheat, barley, two-row barley and rapeseed for oil seeded in autumn of 2000; sugar beet and for fodder, spring wheat, sunflower, corn, spring two-row barley, oats, newly set up fodder crops, sorghum, soy, bean, potatoes, field vegetables, greenhouse, medicinal and aromatic herbs, flax and hemp, seeded/planted in the spring of 2001; a state direct support was granted during amounting 2 million ROL/ha for holdings with arable land up to 5 ha, support increased for areas seeded in autumn 2004 to 2.5 million ROL/ha; was subsidized the goods production for cereals, oilseed, vegetables and fruits, grapes, potatoes, sugar beet; during 2003 was granted, free of charge, an aid in chemical fertilizers to the small agricultural producers owning and working arable land in unincorporated area, in total surface of up to 2.5 ha (a bag of fertilisers of 50 kg for each ha); were granted compensation for natural disasters in wheat, barley,two-row barley and rapeseed crops damaged by frost and drought in ; were granted subsidies for insurance bonus to wheat, sunflower, soy, sugar beet, vineyards, orchards/fruit gardens; was granted financial support for seeds and seeding material; was supported the strategic plant-health programme, in order to perform the plantheath treatments to combat diseases and parasites to national importance crops. In animal husbandry was performed since 2002 the Programme for the acquisition of animals for reproduction, growth and fattening, for taurines and swines and getting new facilities specific to animal husbandry activities; was subsidized the agricultural goods production delivered for processing: meat, egg, honey production; was supported the milk production, the breeding and genetic heritage activity; were subsidized the insurance bonus for bovine effectives. 28

29 Other support forms In 2003 started the Programme for increasing the competitiveness of the agri-food products, under which was granted to the economic agents up to 75% (but not more than 50 thousands euro/project) of the expenditures performed for: implementing and certifying quality management systems and/or environment management systems; endowment and/or modernising of the testing and standardization labs, as well as their accreditation, if necessary ; registration and protection on the external market of the Romanian brands, invention patents, designs and industrial patterns. The receiving of the documentation for accessing the support, lasted until the end of During the efficient allocation of budgetary resources in order to support the agricultural producers, as measure of the Government Programme , followed the Common Agricultural Policy strategy concerning direct payments. Was granted direct support to the producers, through bonus and subsidies, in order to increase the quantity and quality of the agricultural production and was drafted the legal framework for the implementation, the specific conditions and eligibility criteria for applying the direct payments scheme and national complements to direct payments within the vegetal sector. In the vegetal sector: in 2005 was granted a support of 1.5 million ROL/ha for areas set up during the spring of 2005, as vouchers for obtaining seeds, fertilisers and pesticide; in the autumn of 2005 was granted a financial support, in order to set up autumn crops, amounting 1.75 million ROL/ha, for surfaces up to 5 ha, as vouchers ; in 2005 was granted a subsidy of 5000 ROL/ diesel fuel liter for setting up autumn crops, and for performing mechanized agricultural works of setting up and maintaining some agricultural crops that were seeded in the spring of 2006, was granted to the agricultural producers a financial support of 0,7 lei/liter in order to purchase diesel fuel; was financially supported the setting up of 2006 autumn crops, amounting 150 lei/ha, as vouchers for the acquisition of seeds and/or fertilisers and/or pesticides; was granted direct support to the agricultural producers in the vegetal sector in 2006 as vouchers (in the first stage) and cash (in the second stage) for the surface cultivated with sugar beet, soy, textile plant, rice, medicinal and aromatic herbs, hops, field vegetables and early potatoes, solarium vegetables, plantation trees, fruit trees and strawberries, noble grape vine and ecology crops (soy, sunflower, medicinal and aromatic herbs, trees, fruit trees and strawberries, vegetables), varying on crops; for setting up crops in 2006 was granted to the agricultural producers a financial support of 1 leu/ litre in order to purchase diesel fuel and/ or biodiesel. Autumn and spring crops, specified in the Government s Emergency Ordinance no. 20/ 2006 concerning direct support of the state granted to the agricultural producers from the vegetal sector in 2006, have been supported. 29

30 Calamity Compensations: announcing the natural calamity in agriculture for crops sowed in autumn 2004 and springtime 2005, following floods between April September in 41 counties and Bucharest. Were granted compensations for autumn and spring wheat, barley, autumn and spring two-row barley, autumn and spring rape, corn grain, sunflower, soy, sugar beet, potatoes, fodder crops, field vegetables, grape vine and fruit trees. announcing the natural calamity in agriculture for crops sowed in autumn 2005 and springtime 2006, following floods from long ways Danube counties for autumn and spring wheat, barley, autumn and spring two-row barley, autumn and spring rape, corn grain, sunflower, soy, sugar beet, potatoes, fodder crops and field vegetables. announcing the natural calamity for excessively low temperature between January and March 2006 and river outflow floods, abundant and long standing raining between March and July 2006 in all country counties for autumn and spring wheat, barley, autumn and spring two-row barley, autumn and spring rape, corn grain, sunflower, soy, sugar beet, potatoes, fodder crops and field vegetables 100% affected. In horticulture, the specific support granted for: setting up wine growing crops; plantation trees of seeding species apple tree, pear tree and germ species apricot tree, peach tree, plum tree, cherry tree, almond tree and walnut tree; setting up fruit trees plantation; producers groups running for commercialization of vegetables and fruits; greenhouse vegetables and mushrooms producers in 2006; certain quantities of vegetables (tomatoes, peas, beans, peppers) and fresh fruits (apple for concentrate juice, plums, peaches, grapes) for industrial processing in 2006; tobacco producers, support as production bonus granted with the purpose of increasing the productivity and the quality of this crop; bonus granting for wines export. In 2005 was carrying on the tractors and farming machines purchasing Programme and was running a programme in order to purchase endowment specific for mountain area. In the animal breeding sector: in 2005 was activated a Programme of financial support for the frozen seminal material and liquid azote; in 2005 agricultural producers benefited by direct support of the government through granting of subsidies to the agricultural producers from animal sector, for increasing animal and aquaculture production, also animal livestock; in 2006 was activated a Programme of financial support for horses belonging to the national genetic patrimony; were financed the costs for protecting the animal genetic patrimony; starting from 2006, at cattle species, the support was orientated to encourage some measures of genetic quality improvement, of milk performance productions and beef production, also for porcine species to encourage apply legislation regarding the 30

31 system of classifying EUROP frame similar with the system applied in European Union countries; for sheep and goat species, the support was granted in order to increase the dimension of agricultural holdings at a lasting and efficient level; agricultural producers owning meadows in mountain area benefited between 2006 and 2007 of direct support of the government by surface, as vouchers within the programme Lasting development of the vegetal sector, of the animal breeding and aquaculture sector, as well as other programmes which Ministry of Agriculture and Rural Development has to implement. in order to produce milk according EU standards, were supported family farms owning at least 3 cows in order to purchase milkers, refrigerating and storage milk installations (60% from the cost); have been running the programme of preservation and animal population usage which are living in limiting conditions, in danger of loose. the loan for production have been subsidized as percentage quota between 5% and 15%, calculated from the volume of the loans granted. Agricultural research Starting with 2006 was brought in the national system of agricultural research the CDI Sector Plan of MARD which is running between 2006 and 2010, in order to reinforce the government strategies and to improve the agricultural politics of those. The objectives foundation of the sector plan was made in accordance with law no. 290/ 2002 regarding the arrangement and activity of the development-research organizations from agricultural, forestry, food industry domains and of Gheorghe Ionescu-Şişeşti Forestry and Agriculture Science Academy, with the thereafter amendments and additions. The financing of the sector plan was made separately by the CDI national plan financed by Ministry of Education and Research through the National Authority for Scientific Research. Analysis of the situation at the moment of joining EU In the vegetal sector was registered a decrease of the cereals for grains areas and productions in 2006 in regard to 2001 with 18.8%, respectively 16.5%. It was registered a five-time increase of the rice area and approximately twelve-time the total production of this crop. The sunflower crop surface increased with 23%, and the total production nearly doubled. The rape crop surface increased with 33% and with about 72%. The soy crop surface and the total production registered a four-time increase, and the total production for sugar beet registered an increase of 30%. In horticulture In 2006 in regard to 2001 the vegetable crop surface increased with about 10 thousands hectares and the production increased with about 7.5%. The area cultivated with fruit trees had a slow decrease, and the fruits production decreased with circa 20%, the principal cause being the ageing of the existent plantation. 31

32 In the animal breeding sector was registered a decrease of the total livestock in 2006 in regard to 2000: cattle (-9%), swines (-8%), sheep (-9.5%), but the poultries livestock has increased with 24.5%, and the number of bees family was increased with 43.2%. In spite of this decreases, the total beef production, in terms of thousands tones alive weight, was increase between with 4.2%. On species, were recorded increases of 23% for poultry meat, 16% for bovine meat and of 1.8% for sheep/goat. In the same period, the pork meat production has registered a decrease of 9.8%. The total milk production (including the milk intended for feeding the calves) has increased during the period analysed with 14% and for cow milk and females bull with12.0%. The egg production has increased with 37.5%, and the hen egg production with 41%. The quantity of extracted honey has increased with 77%. The trade balance with agri-food products during the period has registered a gradual deficit of balance account, as highlighted in the table below: Year Export Import Balance account The year 2007, the date of Romania s joining to the European Union, marked a new era in agricultural economy and rural development of our country. In this context, Romania had to adapt quickly the agricultural economy and rural development in order to integrate itself in the internal European market and to integrally adopt the Common Agricultural Policy (CAP). The act of joining EU was the most important factor of pressure for a quick reform of agriculture and Romanian rural economy, due to the necessity of a successful accession in the European rural economy. The agricultural European model is based on a competitive branch market oriented, comprising other civil positions such as: environment protection, providing more convenient residential buildings for rural area population, and for rural integration with environment and forestry. The Common Agricultural Policy moves the accent from direct subsidises (pillar I) towards integrated development of the rural economy and the protection of the environment (pillar II). The Romanian rural economy, mostly dominated by agriculture was weakly integrated in the market economy. In the context of the market economy, the welfare of the rural and urban areas habitants depends on marketing techniques used, as well as the welfare of the agriculture producers. 32

33 In this period of time started payments granting by the single payment on surface plan, as well as the national direct complementary payments for agricultural crops and animals. The new direct payment systems have changed the previous subsidise model, has introduced a transparent way of management and control and increase the responsibility of those working the land and growing animals without requirements of sustainable management resources. In the vegetal sector was granted: SAPS Payments for crops placed on arable land, SAPS eligible: cereals (common wheat, rough wheat, rye, barley, oats, corn, sorghum, rice, triticale, sweet corn and others), protean crops (pease, field beans, sweat lupin and lentil), industrial plants (sunflower, rape, conventionally soy, linseed and hemp, tobacco, linseed for oil, medicinal herbs, other), root crop (stock beet, sugar beet), potatoes, fresh vegetables, strawberries, melons, flowers and ornamental plants, feed plants, seed-tree lot, other crops on arable land, natural grass land, meadow land, permanent crop (tree, vineyard), uncultivated land; Payments uncoupled of production for wheat, rye, barley, two-row barley, oats, corn and sorghum, rice, sunflower, rape, conventionally soy, vegetables for grain, potatoes, medicinal and aromatic herbs, field vegetables and solaria, solarium vegetables, sugar beet crops, other arable crops; Payments joined of production for flax and hemp, hops, tobacco; Payment plans for sugar and energetic crops (sunflower, rape, soy and corn) for biofuel production. Taking into account the necessity of restarting the production cycle by applying a specific technology to each agricultural crop and the lack of financial resources of agricultural producers, they benefited by a financial support of 1 leu/ litre to purchase diesel-fuel required for setting up spring crops in Merchandise production continued to be supported for sugar beet, rice, linseed and hemp and soy. Following the excessively drought between autumn 2006 and summer 2007, was announced the calamity crisis in all country counties and were granted compensations for wheat, rye, triticale, barley, two-row barley, rape for oil, corn and sunflower crops. In this context was adopted a measure to subsidise the costs with purchasing material resources (diesel fuel, seeds, pesticides, fertilizer) required to set up agricultural crops in autumn 2007, as vouchers. In 2008 was announced the calamity crisis as repercussion of floods from rivers overflows between July and August 2008 in 7 counties from Moldavia, 2 from Banat-Crisana and 5 from Transylvania. Were granted compensations for wheat, rye, triticale, barley, two-row barley, oats, rape, grain corn, sunflower, soy, sugar beet, grain peas, mustard, field vegetables, potatoes, feed plants and medicinal herbs crops. In order to set up autumn crops in 2008, was granted de minimis support of 200 lei/ hectar for an area of minimum 1 hectar until 120 hectars included per agricultural holdings. Also, in 2008 was granted subvention for merchandise production capitalized for rice, sugar beet and soy crops. 33

34 In horticulture In the vegetables-fruit sector, the support was granted for a proper running of the recognized producers groups and for the implementation of the EUREGAP Good Practices, green house vegetables growing and mushrooms growing in aerated spaces. For winegrower have been allocated amounts for wine-growing plantation in order to produce DOC wine grapes, for the wines authentication and stamping with a controlled origin label (DOC), for plant-health treatments for noble wine-growing plantation, table grapes and wine, including DOC wines and for restructuring and reconversion of the wine-growing plantation. Also benefited from financial support, the following: potatoes producers for industrialisation, medicinal and aromatic herbs and flower producers, dendrological and ornamental plants producers. Was granted financial support for seeds and planting material to the potatoes, fruit growing and wine-growing producers. In the animal breeding sector have been introduced the complements to direct national payments for cattle, sheep and goats registered in the official evidence, have been supported the improvement of the animal breeding livestock, the improvement of the quality animal products, production and merchandising beekeeping products. Supporting the improvement of the livestock the programme was designed to improve the genetic structure of the cattle, sheep, swine and birds livestock, in order to consolidate some sustainable and viable agricultural holdings, in order to ensure the food products needed. Supporting the improvement of the quality animal products referring to the implementation of the pork and cattle carcass classification system, purchasing farms gilts resulted from pure breed or cross-breeding reproduction farms, at first bringing forth, supporting chicken meat broiler chicken and honey and milk production. In order to encourage livestock cattle growing within agricultural holdings, meat and traditional products production, have been approved the complements to direct national payments for period Were allocated important amounts in order to preserve and use the resources genetic of animals in critic stage and in danger of disappearance, purchasing frozen bull seminal material and also was supported the official control of the cattle productions. Intervention measures and commercial market measures within milk sector and dairy products implemented according to the regulations regarding Common Market Organizations: Intervention for butter, skim powder milk and meat Private storage for butter and meat Milk within schools Support for casein and caseinates production Support for butter used by NGOs Support for powder milk exploitation for animals feed Promotion milk and dairy products consumption Licenses and taxes for imports Returns for exports 34

35 Other forms of support The associations from agriculture constituted according to GO no.26/2000 were supported to acquit the necessary dues and taxes, in order to participate in the international forums. According to the credit Law for production, the grants for production credits were established for year 2007 and public funds worth 43 million lei were allotted. In the plant-health sector the project Acquisition of equipment (measurement stations and reception stations) for completing the AGROEXPERT surveillance and warning system for fighting disease and pests in the 42 fitosanitary units was financed through the SAPARD Programme, measure 1.2, financing contract no. C / signed between the Ministry of Agriculture and Rural Development trough the National Fitosanitary Agency as beneficiary and the Paying Agency for Rural Development and Fishery as contracting party authority; Total eligible amount of the contract: 2,876, RON without VAT; Project objective: The completion of the Agroexpert system equipment for agri - meteorological surveillance and warning for fighting disease and pests, present in the 42 fitosanitary units with 250 measurement stations and 60 reception stations necessary for monitoring the crops in each county; The implementation of the project on territorial level was carried on/finalized according to the terms established in the Payment Contract. In 2009 the majority of supporting forms granted in the years 2007 and 2008 for agricultural producers were continued in order to carry out the stipulations in the Governing Programme during regarding the quantitative and qualitative increase of agricultural production and ensuring food security as following: SAPS support for crops located on arable land, SAPS eligible: cereals (common wheat, rough wheat, rye, barley, oat, corn, sorghum, rice, triticals, sweet corn and other cereals), protean crops (pea, field bean, sweet lupin and lentil), industrial plants (sunflower, rape, conventional soy, flax and hemp, tobacco, flax for oil, medicinal herbs, other industrial plants), root crops (stock beet, sugar beet), potatoes, fresh vegetables, strawberries, melons, flowers and ornamental plants, feed plants, seed-tree lot, other crops on arable land, natural pastures, hay fields, permanent crops (fruit trees, vineyard), uncultivated land. Was granted an advance, representing 70% of the amount according to the unique payment Scheme onto surface (SAPS) due for year National complementary payments: Payments uncoupled of production for the following crops: wheat and rye, barley, two-row barley, corn and sorghum, rice, sunflower, rape, conventional soy, legumes for grain, potatoes, medicinal and aromatic plants, field vegetables and solarium, greenhouse vegetables, sugar beet, other arable crops; Payments joined of production for: flax and hemp for fibers, hops and tobacco; Separate payment plan for sugar: for sugar beet crops, destinated to sugar production; Payment plan for energetic crops for sunflower, rape, soy and corn crops destinated to biofuel production; The subvention of diesel fuel used in mechanical work for setting up agricultural crops in the year 2009, in amount of 1 leu/liter; 35

36 It was provided financial support to the agricultural producers activating in the following sectors: vegetables-fruits, wine growing, potatoes, medicinal and aromatic herbs, flowers, dendrology and ornamental plants, such as: 1) vegetables-fruits: implementing the Good Practices System EUREPGAP/GLOBALGAP in the activity of the recognised producers groups; vegetables produced in warm greenhouse; crop mushrooms in aerated spaces; vegetables and fruit for industrial processing; purchase of packages and other materials necessary for packaging vegetables and fruit to be commercialised in fresh conditions; expenditure for agricultural products storage; supporting electric and thermic energy for vegetables and mushrooms obtained in warm greenhouse and solariums 35 % from thermic and/or electric and/or all type of fuel invoice amount (without VAT). 2) wine-growing: authorization of wine-growing plantations for production of wine grape (DOC); wine certification and marking with the control label origin (DOC); plant-health treatments in wine-growing plantations with noble table and wine grape, including for wines (DOC). 3) hop and potato merchandise production for industrialization, including potato; 4) seeds, whole plants and medicinal and aromatic root plants production support; 5) flowers, dendrology and ornamental plants production support, in field and warm greenhouse. It was created the legal frame for: Transitory payment on surface for processing; Financial support for fruit-growing loss due to spring late frost ; Was carry on the payment of de minimis support activated in 2007 in vegetablesfruits sectors and ecological agriculture (support examination cost and ecological certification, arable field crops, permanent pasture and meadows in conversion, vineyards and fruit-gardens, bees families ecological certificated); Were supported producers groups preliminary recognized (support for setting up and for investments provided in accreditation plan) and producers organization in vegetables and fruits sector (financing measures which carry on for the access of specific European founds); Was carry on financial support for wine-growing sector from European founds for promoting on third markets, vineyards reorganization and reconversion, harvest assurance, using of concentrate must, first land clearing; Was granted financial support for internal seeds production and propagating and planting material officially certificated, indented for seeding or planting in autumn 2008 agriculture campaign and spring 2009 for potato, planting material for fruitgrowing, fruit shrub, wine-growing material planting material; Were supported national plant-health treatments for elimination of pests. 36

37 In the animal breeding sector were granted: Complements to direct payments for cattle, sheep, goats in order to be acquit in 2 parts; Support for sustaining livestock population improvement and improvement of animal products quality, as follow: 1) Sustaining livestock population improvement: Management of genealogic registers for cattle, sheep and goats; Operating an official control of the performance production for sheep and goats (milk, wool, fells, meat); Introduction at farm level of new techniques, biotechnologies and new practices of reproduction for animal species, as acquisition of containers for preserving frozen seminal material with over 20 litters capacity and dynamic autonomy about 90 days; Supporting expenditures for testing males of cattle, sheep and goats for reproduction; Operating analysis of animal products quality in order to genetically evaluate the animals; Setting up and maintaining the informatics system, formation of the data bases and estimating the amelioration value of the animals. 2) Supporting the animal products quality improvement: Increasing the quality of meat productions through financial support for implementing carcasses classification system (swine E and U, cattle carcasses ); Improvement the quality and the parameters of increasing the animal livestock through supporting of meat productions (gilts from commercial holdings, chicken meat) and eggs; Improving the quality of honey production by financial sustaining of the bees families; Improving the quality and hygiene of cow milk for processing in order to reach EU standards quality, as support for the delivered milk with a total number of germens less or equal than /ml and somatic cellules less or equal than /ml. Also, the funds were intended for: Support for frozen seminal cattle acquisition; Support for official control of the cattle productions; Support measures production and commercialisation of bee keeping products: prices without VAT, for medicines acquisition in order to control the virosis, for mother bee, cluster, and family bees acquisition; Financing the preserving and using programmes of the livestock in a critical stage, in danger of disappearance and those vulnerable, by species and races; There were granted expenditures for neutralisation of animal waste recovery; There was providing support for acquisition of reproduction males from sheep, goat species; Animal compensations were granted epizooties 37

38 Other support forms: Was continued the supporting of agricultural associations in order to participate at organisations constituted at European Union level. Allotting a grant of 30% from the amount of agriculture credits for production of agricultural producers. In the agricultural research field: supporting research sector plan; investments and endowments; financing projects by grants competitiveness scheme. The sector plan of MARD was structured on 8 general objectives (established by the general directorates experts and the speciality directorates of MARD), being financed in a competitive system 64 CDI projects in a total amount of 85,495, lei, as following: Evaluation of the natural resources potential 2 projects; Sustainable and performant systems with a low pollutant impact 10 projects; Horticultural sector management 5 projects; Performant technics for improvement and breeding animals 16 projects; Agricultural resources development 7 projects; Economy, organisation, management and marketing in agriculture 13 projects; Systems and performant technologies regarding sustainable exploitation of aquatic bio resources 3 projects; Legal framework Forestry and sustainable forests management 7 projects; Implementing measures of the National Plan for Agriculture and Rural Development actions 1 project. In order to harmonize the national legislation with the European legislation, concerning the rural development, during the period , the following regulatory decisions were elaborated and approved: GEO no. 142/2000, concerning the setting up, organising and functioning of SAPARD Agency for technical and financial implementation of Special Instrument for Pre-accession, Agriculture and Rural Development (OG no. 471/ ); Law no.317/2001 on ratifying the Annual Financing Agreement between Government of Romania and the Commission of the European Community on the Special Preaccession, Agriculture and Rural Development Programme, signed in Brussels on (OG no. 338/ ); Law no.416/2002 on ratifying the Annual Financing Agreement 2001, between Government of Romania and the Commission of the European Community on the Special Pre-accession, Agriculture and Rural Development Programme, signed in Brussels on (OG no. 508/ ); GEO no.26/2003 on ratifying the Annual Financing Agreement 2002 between Government of Romania and the Commission of the European Community on the Special Pre-accession, Agriculture and Rural Development Programme, signed in Brussels and Bucharest on (OG no. 283/ ); 38

39 Law no.496/2003 on ratifying the Annual Financing Agreement 2003 between Government of Romania and the Commission of the European Community on the Special Pre-accession, Agriculture and Rural Development Programme, signed in Brussels and Bucharest on (OG no. 843/ ); Law no. 277/2004, concerning the setting-up, recognition and the functioning of the producers groups for the commercialisation of agricultural, forestry and fishery product (OG no. 580/ ); Mountain Law no. 347/ with subsequent completions and amendments (OG no. 670/ ); Governmental Decision no. 1779/2004, concerning the development of sustainable development strategy for the mountain area (OG no. 1024/ ); Law no. 435/ , concerning the support granted by the state to young people from rural area (OG no. 989/ ); Governmental Decision no. 153/2004 concerning the approval of the technical fiche for Measure 3.4 Development and diversification of economic activities, providing for multiple activities and alternative incomes from NPARD (OG no. 155/ ); Governmental Decision no. 711/2004 concerning the guarantee of some internal credits necessary for improving the Measure 2.1 Development and improvement of rural infrastructure within SAPARD Programme (OG nr. 445/ ), modified by Governmental Decision no. 893/2004 (OG no. 533/ ) and Governmental Decision no. 1251/2004 (OG no. 764/ ); Law no. 530/ for completion of article 2 from GEO no. 142/2000, concerning the setting up, organising and functioning of SAPARD Agency for technical and financial implementation of Special Instrument for Pre-accession, Agriculture and Rural Development (OG no. 1149/ ); Governmental Decision no. 497/ concerning the establishment of the institutional framework for the structural instruments coordination, implementation and management (OG no. 346/ ), modified by Governmental Decision no. 1179/2004 (OG no. 690/ ) and Government al Decision no. 2001/2004 (OG no. 1144/ ); MAFRD Order no. 301/ concerning the nomination of the authorized responsible involved in the technical implementation of Measure 4.2 Technical Assistance of the SAPARD Programme; MAFRD Order no. 409/2004 concerning the constitution of the Support Committee and monitoring the SAPARD Agency activity; Order no. 641/ concerning the nomination of the Managing Authority President for SAPARD Programme; Law no.258/2005 on ratifying the Agreement between Government of Romania and the Commission of the European Community, on amending the Annual Financing Agreement 2000, 2001, 2002 and 2003 and the Multi-Annual Financing Agreement, signed in Brussels and Bucharest on (OG no. 861/ ); Law no.265/2005 on ratifying the Annual Financing Agreement 2001, between Government of Romania and the Commission of the European Community on the Special Pre-accession, Agriculture and Rural Development Programme, signed in Brussels and Bucharest on (OG no. 920/ ); Government Emergency Ordinance (GEO) no. 103/2005 amending Law No. 1/2004 regarding the establishment, organisation, and operation of the Paying and Intervention Agency for Agriculture, Food Industry and Rural Development and GEO 39

40 No. 142/2000 regarding the establishment, organisation, and operation of the SAPARD Agency for the technical and financial implementation of the Special Pre- Accession Instrument for Agriculture and Rural Development (OG no. 646/ ); Law no. 300/2005 regarding the institution of import and export licences for agriculture products (OG no. 955/ ) which is a simplified transposition of EC Regulation no. 1291/2000 on the establishment of common standards for the implementation of import/export licences and advance fixing certificates for agriculture products; Law no. 299/2005 on the institution of securities system for imports and exports of agriculture products (OG No. 956/ ) which is a simplified transposition of EEC Regulation no. 2220/1985 laying down the detailed common standards for the implementation of the securities system for agriculture products and of Section IV of EC Regulation no. 1291/2000 laying down the common standards for the implementation of import and export licences and of advance fixing certificates for agriculture products; Government Decision no.46/2005 on acceleration of SAPARD fund absorption by guarantee of co-financing funds with the actives purchased within the SAPARD projects. (OG no. 755/ ); Law no. 218/2005 on stimulating SAPARD fund absorption by covering risks through guarantee funds (OG No. 610/ ); GD no. 876/2005 approving the implementation Regulations of Law No. 218/2005 on stimulating SAPARD fund absorption by covering risks through guarantee funds (OG no. 739/ ); Law no. 231/2005 on stimulating agriculture investments (OG no. 608/ ); GD no. 934/2005 approving the implementation Regulations of Law No. 231/2005 on stimulating agriculture investments (OG no. 784/ ); GD no. 668/2005 approving technical fiches of Measures 1.1 Improvement of Processing and Marketing of Agriculture and Fishery Products, 1.2 Improving the Structures for Quality, Veterinary and Plant Health Controls for the Quality of Foodstuffs and for Consumer Protection, 2.1 Development and Improvement of Rural Infrastructure, 3.1 Investments in Agriculture Holdings, 3.2 Setting Up Producer Groups, 3.3 Agriculture Production Methods Designed to Protect the Environment and Maintain Countryside, 3.4 Development and Diversification of Economic Activities Generating Multiple Activities and Alternative Income ; 3.5 Forestry, 4.1 Improvement of Vocational Training and 4.2 Technical Assistance in the National Programme for Agriculture and Rural Development, funded by SAPARD (OG no. 727 bis/ ); GD no. 1512/2005 declaring localities damaged by floods in April-September 2005 as disaster-struck areas (OG no. 1132/ ); GO no. 37/2005 on the recognition and operation of producer groups for merchandise of agriculture and forestry products (OG no. 652/ ) approved by Law No. 338/2005 (OG no. 1098/ ); Common Order No. 143/2005 by the MAFRD and Administration and Internal Affairs Ministers regarding the definition and characterisation of the rural area (OG no. 382/ ); MAFRD Minister Order No. 979/2005 approving the List of investment objects and the maximum ceiling of loans available in 2005 under Law No. 231/2005 on stimulating agriculture investments (OG no. 876/ ). 40

41 MAFRD Minister Order no. 242/2005 on the operation of Delegated Technical Services working under the Directorate-General for Rural Development as well as under the Bucharest Directorate and the county DARDs regarding the implementation of SAPARD Measures 3.2 Setting up Producer Groups and 3.3 Agricultural Production Methods Designed to Protect the Environment and Maintain the Countryside within SAPARD Programme; GEO no.59/2006 on ensuring from state budget of the public non-refundable cofinancing for the SAPARD Programme investment projects (O.G. no. 759/ ); Law no. 25/2006 regarding the ratification of the Agreement between Romania and the Commission of the European Communities, in name of the European Community, which modifies the 2004 Annual Financing Agreement, signed in Brussels and respectively, in Bucharest on the 7 th of July 2005 (O.G. no. 205/6th of March 2006); Law no. 283/2006 for the ratification of the 2005 Annual Financing Agreement between the Romanian Government, on Romania s behalf, and the Commission of the European Communities, signed in Bucharest on the 29 th of December 2005 and, respectively, in Brussels on the 3 rd of January 2006 (O.G. no. 602/ 12 th of July 2006); Government Decision no. 759/2006 regarding the approval for the technical fiches of measures 1.1 Improvement of processing and marketing of agricultural and fishery products, 1.2 Improving the structures for quality, veterinary and plant-health controls, for the quality of foodstuff and consumer protection, 2.1 Development and improvement of rural infrastructure, 3.1 Investments in agricultural holdings ; 3.2 Setting up producers groups, 3.3 Agricultural production methods designed to protect the environment and maintain the countryside, 3.4 Development and diversification of economic activities providing for multiple activities and alternative income, 3.5 Forestry, 4.1 Improvement of vocational training and 4.2 Technical Assistance from the National Agriculture and Rural Development Programme financed from SAPARD funds (O.G. no. 531/ 20 th of June 2006); Government Ordinance no.10/2006 for amending and completing Law no. 218/2005 regarding the stimulation of SAPARD funds absorption by undertaking the risk by the guarantee funds, which lead to the possibility of guaranteeing the credits for: Local Councils and Associations of Local Councils for rural infrastructure projects: technical-town and forestry roads; the National Administration for Land Consolidation for the protection and prevention against floods; the county Sanitary Veterinary and Food Safety Directorates for extending and modernizing the constructions, equipping the laboratories and for extending the national informatics network; physical and legal private persons for forestry projects (O.G. no.83/ 30 th of January 2006); Government Ordinance no. 12/2006 for approving the measures regarding the support for financing the technical documentation for the projects within measure 2.1 Development and improvement of rural infrastructure from the SAPARD Programme which has created the possibility to elaborate, in emergency regime, the feasibility studies for roads, water supplies, sewerage networks in the villages affected by the 2005 floods and for the technical projects for the 24 protection and prevention against floods objectives (O.G. no.83/30 th of January 2006); Government Emergency Ordinance no. 13/2006 regarding the setting up, organization and functioning of the Paying Agency for Rural Development and Fishery (PARDF), by reorganizing the SAPARD Agency, which shall ensure the continuity for the new 41

42 rural Development Programme as well as the unrolling of the SAPARD Programme (O.G. no. 185/ 27 th of February 2006); Order no.100/2006 for approving the Investment Objectives List, the granting technical criteria, as well as the maximum ceiling for the credits granted in 2006, within the terms of Law no. 231/2006 regarding the stimulation of agricultural investments (O.G. no. 185/ 27 th of February 2006); Government Emergency Ordinance no. 120/2007 for amending and completing the Government Emergency Ordinance no. 67/2006 on the management of nonrefundable funds for the financing of the Common Agricultural Policy allocated by the European Community, as well as of the co-financing and pre-financing funds allocated from state budget (O.G. no. 745 from November 2 nd 2007); Law no.66/2007 on ratifying the Annual Financing Agreement 2006, between Government of Romania and the Commission of the European Community, signed in Brussels and Bucharest on (OG no. 228/ ); Government Decision no. 142/2007 for amending Annexes no.1 and 2 of the Methodological Norms for the application of Government Emergency Ordinance no. 59/2006 on ensuring from state budget of the public non-refundable co-financing for the SAPARD Programme investment projects, approved through Government Decision no. 1644/2006 (O.G. no. 122 from February 19 th 2007); Government Decision no. 177/2007 for amending several annexes of Government Decision no. 759/2006 for approving the technical fiches of measures from the National Programme for Agriculture and Rural Development financed from SAPARD funds (O.G. no. 171 from March 12 th 2007); Government Decision no. 725/2007 for amending Annexes no. 11, 12, 13 and 14 of Government Decision no. 759/2006 for approving the technical fiches of measures from the National Programme for Agriculture and Rural Development financed from SAPARD funds (O.G. no. 465 from July 11 th 2007); Government Ordinance no. 31/2007 on regulating several financial measures for stimulating the absorption of the funds allocated through the SAPARD Programme (O.G. no. 537 from August 8 th 2007); Government Emergency Ordinance no. 213/2008 for the ratification of the Agreement between the Government of Romania and the Commission of the European Communities, signed in Bucharest and, respectively, Brussels on December 4th 2008, for the amendment of the 2006 Annual Financing Agreement between the Government of Romania and the Commission of the European Communities, on behalf of the European Community, signed in Bucharest and, respectively, Brussels on the 31st of October 2006 (O.G. no. 842 from ); Government Emergency Ordinance no. 65/2008 for the amendment and completion of Government Emergency Ordinance no. 13/2006 regarding the setting up, organization and functioning of the Paying Agency for Rural Development and Fishery, by reorganizing the SAPARD Agency and establishing several measures for increasing the efficiency of activity of the Paying and Intervention Agency for Agriculture (O.G. no. 418 from ); Government Decision no. 688/2008 on the amendment of Government Decision no. 876/2005 for the approval of the methodological norms for applying Law no. 218/2005 on the stimulation of the absorption of the SAPARD funds by undertaking the risk by the guarantee funds (O.G. no. 493/ ); 42

43 Government Ordinance no. 20/2008 on the amendment and completion of Government Ordinance no. 79/2003 regarding the control and recovery of Community funds, as well as of corresponding co-financing funds, improperly used (O.G. no. 613/ ) Information on complementarity with other Community funds Romania had to ensure the co-ordination of assistance between SAPARD and pre-accession instruments ISPA, PHARE and the assistance from the European Investment Bank (EIB), as well as with other international financial instruments. The overall objective of the PHARE Programme was to help candidate states to prepare in order to accede to the European Union, the support focusing on the priorities leading to the achievement of the Copenhagen accession criteria, mainly: Establishing the institutions garanting democracy, rule of law, compliance of the human rights, protecting the minorities; Existence of a functional market economy and the capacity to face competitive pressure and market forces from the European Union; Capacity to undertake the EU member state obligations. The Programme focused on two aspects: institutional development, supporting the candidate member state governments in implementing the acquis communautaire; investments, supporting the candidate states in aligning their industrial activities and infrastructure on the EU standards basis, by mobilizing the required investments. The SAPARD Agency benefited from support under the PHARE Programme, through many technical assistance projects, presented in detail in chapter 7 of the present report. Beginning with year 2000, the European Union started a lush financing programme, entitled ISPA (Instrument for Structural Policies for Pre-accession), under which is granted to a number of 10 states (Romania, Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, Slovenia) an amount of 1 billion euro annually to implement some projects regarding environment and transport. The Programme was created in order to support these states in aligning the environment and transport infrastructure with that of EU. Another Programme from which Romania benefited, regards the Rural Development Project for the Apuseni Mountains, financed under International Fund for Agricultural Development (IFAD). Furthermore, projects financed through the World Bank unrolled: Rural Development Project; Rural Finance Project; Project on Rehabilitation and Reform of the Irrigation Sector. 43

44 CHAPTER IV PROGRAMME ADMINISTRATION AND MANAGEMENT The institutional framework of implementing the SAPARD Programme was established by the Multi-Annual Financing Agreement (MAFA), the Romanian authorities having tasks on the management and implementation of the Programme, being: SAPARD Agency (PARDF); National Fund; Managing Authority; Certification Body. For the technical and financial implementation of Special Instrument for Pre-accession, Agriculture and Rural Development, the Romanian Government adopted on 14 th of September 2000 the Government Emergency Ordinance no. 142/2000 (OG no. 471/ ), approved under Law no.309/2001 concerning the setting up, organising and functioning of SAPARD Agency, unit subordinated to the Ministry of Agriculture, Food and Forests, organized at central and regional level (8 regional offices corresponding to the 8 development country regions). The European Commission conferred to the Romanian authorities, the SAPARD assistance management, by adopting the following decisions: Decision 2002/638/EC conferring the management of SAPARD aid implementing agencies for the first three measures, respectively, measure 1.1 Improvement of processing and marketing of agricultural and fishery products, measure 2.1 Development and improvement of rural infrastructure and measure 4.2 Technical assistance. Decision 2003/846/EC conferring the management of SAPARD aid implementing agencies for measure 3.1 Investments in agricultural holdings, measure 3.4 Development and diversification of economic activities, providing for multiple activities and alternative income and measure 4.1 Improvement of vocational training. Decision no. EC/298/2006 of conferring the assistance management for measure 1.2 Improving the structures for quality, veterinary and plant-health controls, for the quality of foodstuffs and consumer protection, measure 3.2 Setting-up producers groups, measure 3.3 Agricultural production methods designed to protect the environment and maintain the countryside and measure 3.5 Forestry. In 2006 was adopted GEO no.13/2006 for the setting up, organization and functioning of the Paying Agency for Rural Development and Fishery by reorganization of the SAPARD Agency (O.G. 185/ ), foreseeing the setting up of PARDF, by reorganizing the 44

45 SAPARD Agency (dissolved). According to this Ordinance, PARDF takes over the attributions resulting from the SAPARD Agency s technical and financial implementation. Nevertheless, the newly set up structure is to undertake attributions concerned the rolling of funds allocated to Romania for rural development under European Agricultural Fund for Rural Development and European Fund for Fishery (EFF), functioning as paying authority. Under the normative act above mentioned, was also defined the institutional structure of the Agency. Hence, besides the integral takeover of the SAPARD Agency personnel, the Paying Agency for Rural Development and Fishery extended its operations also at county level, by taking over a number of 386 jobs corresponding to the technical delegated bodies within the County Agricultural and Rural Development Directorates. PARDF has in its structure eight regional County Paying Offices for Rural Development and Fishery, as well as a Paying Office at the level of each county. In compliance with the Government Decision no. 208/2005 on organizing and functioning of the Public Finances Ministry and National Agency for Fiscal Administration, the National Fund role for national pre-accession assistance, including SAPARD goes to the Paying Authority, General Directorate within the Public Finances Ministry. As provided at art.2 (a), section A within Law no. 316/2001 on ratifying the Multi Annual Financing Agreement, the National Fund represents the body named by Romania and under the National Authorizing Officer acting as Competent Authority for SAPARD Programme. The Managing Authority, in accordance with the provisions set out in Art of Section B on Programme management, monitoring, and assessment of the Multi-Annual Financial Agreement, has tasks regarding the monitoring, annual and final reporting and mid-term and ex-post evaluation of the SAPARD Programme, being the main body responsible with the efficiency and reliability of the coordination and reporting carried out in relation to the monitoring and evaluation of the SAPARD Programme. The Managing Authority (MA) is the authorized body that can make proposals to the Commission on any adjustments that need to be brought to the Programme, after consultations with the Paying Agency for Rural Development and Fishery (PARDF) and after receiving the agreement of the Monitoring Committee s members. The Managing Authority for SAPARD Programme operated during the period within the Ministry of European Integration pursuant to Government Decision no. 339/2001 (O.G. no. 161/ ) on setting up of the Managing Authority for SAPARD Programme within the Ministry of European Integration. In 2004, through the Central Public Administration reorganization measures, the Ministry of Public Finance has taken over the responsibilities of coordination, reporting, monitoring and evaluation of the SAPARD Programme, performing the function of Managing Authority for SAPARD Programme, pursuant to Government Decision no. 1574/2003 (OG no. 2/ ) for the organization and functioning of the Ministry of Public Finances and of the National Agency for Fiscal Administration, amended by Decision no. 403/ (O.G. no. 275/ ). Also, in 2004, in accordance with the Governmental Decision no. 409/ (OG no. 784/ ) on the organisation and functioning of the Ministry of Agriculture, Forests and Rural Development, amended by Government Decision no. 1125/ (OG no. 45

46 697/ ), has been set up, within the Managing Authority - Sectorial Operational Programme for Agriculture, Rural Development and Fishery, the SAPARD Programme Management service with 12 posts. Under the provisions of GD no. 155/2005, published in O.G. no.211/ , has been set up the General Directorate for Rural Development which has the function and tasks of Managing Authority for the SAPARD Programme. MAFRD s tasks regarding rural development, established under GD.155/2005 were amended and completed under GD.no.374/2005 (O.G. no. 398/ ) foreseeing that the General Directorate for Rural Development has the function and tasks of Managing Authority for the SAPARD Programme, as well as Managing Authority for the National Rural Development Programme. During significant organizational changes took place within MAFRD, including DGRD, mainly targeting the creation and consolidation of the institutional structure needed to implement Common Agricultural Policy and to absorb Community funds. Thus, the General Directorate for Rural Development has been reorganized, currently carrying out the functions and attributions of both Managing Authority for the SAPARD Programme, as well as Managing Authority for the National Rural Development Programme According to its specific functions, the Managing Authority for the SAPARD Programme took actions both in the process of accreditation preparation and after that, initiating arrangements and promoting decisions for the purpose of: Closing, ratifying and notifying the Financing Agreements between the Romanian Government and the Commission of the European Communities; Setting-up the Monitoring Committee for the SAPARD Programme (Prime Minister Decision no. 271/2001, with the subsequent amendments and completions) and organizing the reunions of the Monitoring Committee; Elaborating the annual reports on implementing the SAPARD Programme; Institutional support for completing the organizational structure and ensuring the location and the necessary endowments of the SAPARD Agency; Developing the specific procedures for accrediting the measures comprised in the National Plan for Agriculture and Rural Development; Improving the Programme publicity; Presenting the proposals concerning the amendments of the Programme in order to be approved by the STAR Committee, as well of the financial table within NPARD; Organizing, together with the European Commission, of the ex-ante, mid-term and expost Programme s assessment; Notifying to the involved bodies on the priorities of action in the legislative and institutional field; Other institutional and legislative initiatives required for attaining the specific objectives of the SAPARD Programme and for increasing the activities efficiency. The role of Certification Body belongs to the Audit Authority, set up within the Romanian Court of Accounts. Its main tasks are certifying the truthfulness, completeness and accuracy of the accounts, reporting on the management and control systems, and control of the cofinancing elements. 46

47 4.1. The activities of the SAPARD Programme Monitoring Committee As a structure, the Monitoring Committee is a collective body made up of representatives of ministries and public authorities as well as of several professional associations and nongovernmental organizations. The Committee is also attended by European Commission officials, as observers. The president of the Monitoring Committee is the minister of agriculture and rural development, and the secretariat of the Monitoring Committee is ensured by the Evaluation, Reporting Unit from the Directorate General for Rural Development MAFRD. The SAPARD Monitoring Committee was set up through the Prime Minister s Decision no. 271/ Given the transfer of responsibilities regarding the SAPARD Programme, starting with April 2004, the Monitoring Committee President was the Public Finances Minister, according to the Prime Minister s Decision no. 87/ Starting with September 2004, the Monitoring Committee President is the minister of agriculture, forests and rural development, according to the Prime Minister s Decision no.188/ The need to include new members as well as updating the titles of the involved public central institutions, given the Government s restructuring, the MC has been affected by a series of transformations throughout its operation. At the beginning of 2005, following the reorganisation of central public administration, the structure of, and representation within the Monitoring Committee went through several changes. For this purpose, the MC President Decision no. 1/ was adopted to amend Prime Minister s Decision no. 271/2001 on the establishment of the SAPARD Programme Monitoring Committee. By this Decision, the Committee included a new member, namely the Health Ministry representative. Hence, at the end of 2005, the MC structure comprised thirtyone voting members. In 2007, in order to include within the MC structure the newest ministries resulted following the Government s restructuring, was issued a new Decision no. 1/72492/2007. The latest decision was adopted in The Monitoring Committee carries out its activity based on an organization and functioning regulation which was adopted within the first reunion of the Committee on During , MA organised seventeen reunions of the Monitoring Committee, as follows: first reunion ; second reunion ; third reunion ; fourth reunion ; fifth reunion ; sixth reunion ; 47

48 seventh reunion ; eight reunion ; ninth reunion ; tenth reunion ; eleventh reunion was considered the approval, by the Monitoring Committee members, in written procedure of the SAPARD Annual Report 2005, of NPARD measures 1.1, 2.1, 3.1 and 3.4 and applying the flexibility rules for measure 1.1; twelve reunion ; thirteenth reunion was considered the approval, by the Monitoring Committee members, in written procedure of the SAPARD Annual Report 2006; fourteenth reunion ; fifteenth reunion was considered the approval, by the Monitoring Committee members, in written procedure of the SAPARD Annual Report 2007; sixteenth reunion ; seventeenth reunion During this reunions were adopted decisions regarding the: modify and complete the structure of, and representation within, the SAPARD MC by including the new member; modify the MC Statute to enable the Committee to work more efficiently, with a new procedure on approving the meetings minutes; set up consultative working groups on measures while also involving the economic and social partners, in order to constantly keep professional associations and economic and social partners up to date as to the SAPARD measures modification, the most frequently-encountered problems regarding their implementation, and the progress made in their implementation; amendment of NPARD, respectively financial tables reallocation within the measures; amendment of the measures technical fiches; SAPARD Programme s implementation annual reports approval; approval of the Plan for the implementation of Measure 4.2 Technical Assistance and action plans regarding the SAPARD absorption. Also were presented the main aspects regarding the: stage of SAPARD implementation of measures, progresses registered regarding the implementation of the SAPARD Programme, implementing stage of measures 4.1 and 4.2, measures taken as a result of the findings of the Audit Report developed by the Certifying Body, legislative pack adopted in the view of easing the access for the beneficiaries to the SAPARD funds, analysis of the SAPARD financial implementation including interest accumulated on the SAPARD Euro account, controls performed and the solving the complaints received by PARDF, mid-term assessment of the Programme, infos on ratifying the Annual Financial Agreements and rules established for the conclusion of the Programme. The Managing Authority has ensured the MC s secretary of the works, sent infos to the members regarding the legislative measures adopted in order to speed up the absorption of SAPARD funds and has maintained a permanent contact with the bodies represented within the MC, in order to identify the issues faced by those. 48

49 Regarding the activity from 2009, within the seventeenth MC reunion on 9 th of July 209, were presented issues regarding the: analysis of the SAPARD financial implementation including interest accumulated on the SAPARD Euro account; problems related to absorption under the Programme in 2008 and 2009 including payments to final beneficiaries; information for the implementation of the action plan to overcome the weaknesses in the system for management and control of SAPARD and forecast for the financial implementation until the end of 2009; report on the results of the controls and the manner of solving the allegations received by the Paying Agency for Rural Development and Fishery; modification proposals of the financing table from NPARD; Annual Report on SAPARD Programme Implementation for Within this reunion, the Managing Authority proposed the financial table modification, respectively the relocation of million Euro of the EC contribution for measure 2.1 Development and improvement of rural infrastructure from the affected areas to notaffected areas. In this regard, compared to the last reallocation approved by the SAPARD Monitoring Committee on the 25 th of November 2008, the Managing Authority for the SAPARD Programme proposed the reallocation of 1.5 million Euro from the EC contribution under measure 2.1 from affected areas to not-affected areas. Thus, the value foreseen in the Decision of the European Commission of the 27 th of December 2006 for measure 2.1 not affected areas, shall be increased from 387,204,554 Euro to 433,704,554 Euro, decreasing the value for the affected areas from 137,604,545 Euro to 91,104,545 Euro, without modifying the initially assigned amount for this measure, respectively of million Euro. Also within this reunion, the MC members approved the Annual Report on SAPARD Programme Implementation for Furthermore, took place discussions on the content of the Annual Report on SAPARD Programme Implementation for 2008, following which the EC representatives requested the completion with the reasons of cancelling a significant number of projects contracted since the end of contracting period within the SAPARD Programme, up to the MC reunion. Pursuant to the requirements of the EC representatives, the consolidated version of the Annual Report on SAPARD Programme Implementation for 2008 has been sent to the MC members and EC representatives on the 11 th of September The National Programme for Agriculture and Rural Development amendments Technical fiches amendments Each amendment the Programme starts with consultations between the Managing Authority, SAPARD Agency (PARDF) and representatives of the European Commission pursuing the achievement of a common agreement on certain texts in the Programme. After these mutual consultations, the proposals of amendment are submitted to the 49

50 Monitoring Committee for discussions and approval. Once the MC has accepted the proposal formally, this was to be analysed by the special services within EC, then sent to the STAR Committee in view of approval. After the opinion of the STAR Committee has been given, the European Commission issues the Decision on amending the Programme. The National Programme for Agriculture and Rural Development has been modified eight times, respectively under the EC Decisions from: , , , , , , and Internally, the technical fiches of the SAPARD measures, with the amendments approved by the Commission, were approved under the following Government Decisions: no. 535/ approving technical fiches of measures 1.1 Improvement of Processing and Marketing of Agriculture and Fishery Products, 2.1 Development and Improvement of Rural Infrastructure, 3.1 Investments in Agriculture Holdings, 4.1 Improvement of Vocational Training and 4.2 Technical Assistance in the National Programme for Agriculture and Rural Development, funded by SAPARD (OG no. 355/ ); no. 916/ on the financial allocations for the achievement of the priority measures approved under NPARD, financed under the SAPARD Programme and their financial resources (OG no. 593/ ); no. 153/ approving the technical fiche of Measures 3.4 Development and Diversification of Economic Activities Generating Multiple Activities and Alternative Income in the National Programme for Agriculture and Rural Development, funded by SAPARD (OG no. 155/ ); no. 668/2005 approving the technical fiches of measures 1.1 Improvement of Processing and Marketing of Agriculture and Fishery Products, 1.2 Improving the Structures for Quality, Veterinary and Plant Health Controls for the Quality of Foodstuffs and for Consumer Protection, 2.1 Development and Improvement of Rural Infrastructure, 3.1 Investments in Agriculture Holdings, 3.2 Setting Up Producer Groups, 3.3 Agriculture Production Methods Designed to Protect the Environment and Maintain Countryside, 3.4 Development and Diversification of Economic Activities Generating Multiple Activities and Alternative Income, 3.5 Forestry, 4.1 Improvement of Vocational Training and 4.2 Technical Assistance in the National Programme for Agriculture and Rural Development, funded by SAPARD (OG no. 727 bis/ ); no. 759/ regarding the approval for the technical fiches of measures 1.1 Improvement of processing and marketing of agricultural and fishery products, 1.2 Improving the structures for quality, veterinary and plant-health controls, for the quality of foodstuff and consumer protection, 2.1 Development and improvement of rural infrastructure, 3.1 Investments in agricultural holdings, 3.2 Setting up producers groups, 3.3 Agricultural production methods designed to protect the environment and maintain the countryside, 3.4 Development and diversification of economic activities providing for multiple activities and alternative income, 3.5 Forestry, 4.1 Improvement of vocational training and 4.2 Technical Assistance from the National Agriculture and Rural Development Programme financed from SAPARD funds (O.G. no. 531/ ); 50

51 I. Within the STAR Committee reunions on the 26th of June 2002 and 9 th of April 2003, were presented and approved the amendments and completions corresponding to the technical fiches of measures 1.1 Improvement of Processing and Marketing of Agriculture and Fishery Products, 2.1 Development and Improvement of Rural Infrastructure, 3.1 Investments in Agriculture Holdings, 4.1 Improvement of vocational training and 4.2 Technical Assistance as follows: Measure 1.1 Measure 2.1 Completing the technical fiche of the measure with the submeasure flax and hemp processing ; Reviewing the justifying documents pursuant to the national legislation. Introducing the rural roads notion instead of communal roads and reviewing the justifying documents pursuant to the national legislation. Measure 3.1 Measure 4.1 Measure 4.2 Re-updating the initial text of the measure (elaborated in 2000) according to the national legislation required amendments of each chapter. Extending the applicability area of the measure for all the SAPARD Programme measures; Establishing the Ministry of Agriculture, Food and Forests (MAFF) responsibility for implementing this measure. Mentioning the activities financed under this measure; Establishing the responsibility of the two measure beneficiaries: MA SAPARD and MAFF. These amendments were approved under the Decision of 11 th of July 2002 and 27 th of May II. On 23 rd of July 2003, within the reunion of STAR Committee, under the Decision of 1 st August 2003, the following proposals for the amendment of measure 3.4 Development and diversification of economic activities providing for multiple activities and alternative income received favourable assent: introducing the processing of berries and bush fruits, of aromatic plants, of mushrooms and of aquaculture products at the farm level and also the production and processing of frogs and snails; were clarified the eligible investments realised by the agricultural machines rings; were clarified the types of agri-tourism and handicraft activities; 51

52 was adapted the definition of viability, the eligibility and ranking criteria, the eligible investments and the supporting documents accompanying the financial application; were performed certain technical and editorial adaptations. III. Within the reunion of STAR Committee from 20 th of July 2004, Decision 17 th of September 2004, the following proposals for NPARD amendment presented by MA received favourable assent: the amendments of the technical fiche of measure 1.1: the processing units must be in compliance with the EU standards; the selection criteria regarding the environment investments being replaced by the priority criteria for the slaughterhouses; the private co-financing for the cereals sector was modified from 70% to 50%, except for the units located in ports; the cooperative societies are admitted in the eligible beneficiaries list, and the maximum ceiling increased from 2 million Euros to 4 million Euros; the percentage of the investments in cereals was established to 10% of the total allocation for the measure; the rural area concept was introduced in chapter Geographical Area ; the annexes 2 The status of the processing capacities in 2004 and 3 The status of the units in compliance with EU standards were updated. the amendments in the technical fiche of measure 2.1: modification of the financial provisions, which were completed with the use of interest within this measure, monitoring this measure by the EC and MC (the entire interest amount resulted from the Euro SAPARD account for the entire programming period, shall be spent for projects within this measure, pursuant to the provisions of art.10 (3), section A of MAFA); modification and completion of the geographical area for projects located in the communes that have became cities after the conclusion of the financing contract; including in the financing conditions the necessity that the locality would be in the SIRUTA Code, when submitting the financial request; the last amendment for this measure is referring to the administrative system of implementation due to the transfer of the checking experts from the Ministry of Transport, Constructions and Tourism to the SAPARD Agency. the modifications performed in the technical fiche of measure 3.1: completion of the action field at the sub-measure vegetal production farms with equipment for processing the vegetables waste; At the eligibility conditions it was reformulated the compulsoriness to foreseen the professional training taking into account that the measure 4.1 was behindhand; the specific criteria regarding the varieties of fruit trees and vineyard were completed the varieties of fruit trees and vineyard must be registered in the catalogue of the varieties from Romania approved for the current year by the minister order or must be registered in the E.U. catalogues, be scheduled in the E.U. suppliers list and the material must be in accordance with the E.U. quality conditions and the national standards; 52

53 the condition regarding the animals acquisition was reformulated, mentioning only the basic breeds and also those which result from their origin, fact proved by the pedigree or by the origin and productivity certificate; was dropped the obligativity that, at the finalisation of the investment, the farm must have a specific size; the inferior limit of the eligible value for a project decreased from 10,000 EURO to 5,000 Euro; for the indicative budget at the sub measure Other vegetable farms and animals and poultry breeding farms it was mentioned only for products designed to the human consumption ; within this measure the spaces attributed for the free use in accordance with the Government Ordinance no. 168/2001 in order to be financed and arranged were also introduced; at the chapter Geographical area, the provisions regarding the redefining of the rural area were introduced; was completed the annex 3 the potential areas, as a result of the finalisation of the study drawn up within the measure 4.2 Technical assistance regarding the potential areas and the gross margin; Annex 4 was also dropped out. the modifications presented for measure 3.4, except the modifications proposed for the sub-measure rural tourism: the eligibility criteria where it was introduced the projects position in accordance with the rural space definition; the obligation to prove the vocational training which was reformulated as a result of the delay of measure 4.1; the statement made for the tourism activities and other types of investments, which will be placed in the economical areas less developed, but with an elevated touristy potential; the chapter regarding the categories of beneficiaries was completed with the Consumption Cooperatives and crafts cooperatives. NPARD modifications initiated, during 2005, by the Managing Authority for SAPARD Programme following consultations with the European Commission DG Agri and relaying on the consent of the Monitoring Committee were discussed and endorsed in the reunions of STAR Committee during February and December, The amendments concerned the encouraging and stimulation of the potential beneficiaries of SAPARD Programme to carry out SAPARD projects for setting up and develop businesses in rural areas and applications of art. 16 Section A within MAFA regarding the exceptional natural disasters (article introduced by AFA 2002, ratified through GEO no. 26/2003). IV. Within the reunion of STAR Committee from the 23 rd of February 2005, the following proposals for NPARD amendment presented by MA received favourable assent: the inclusion in the beneficiaries category of the commercial companies with private capital equal or more than 75%, making also possible the participation of the companies with mixed, public and private capital in SAPARD projects implementation; 53

54 increasing the total eligible value of the projects financed through Measure 3.1 for animal breeding and poultry farms up to 2,000,000 Euro, respecting the following terms: - for farms that are developing projects with a value less or equal to 500,000 Euro, the investment developed under SAPARD funds must be in compliance with the veterinary, fitosanitary, hygienic, animal welfare and environmental EU legislation, and the entire farm in accordance with national standards; - for farms with more than 500,000 Euro value of the projects, the entire farm must be in compliance with the veterinary, fitosanitary, hygienic, animal welfare and environmental EU legislation; increasing the public financial aid for the projects under Measure 3.1, carried out by young farmers (the public contribution, in this particular case, is of 55%), and also for the projects located in mountain areas (60% public contribution). If the project is developed in mountain area by a farmer up to 40 years old, the financial public aid reaches 65%. increasing the total eligible value to 500,000 Euro for the investment projects in aquaculture financed through Measure 3.4. The modifications presented on February in STAR Committee were approved by Commission Decision on 4 th of July V. During both reunions of Monitoring Committee from 2005, MA presented several NPARD amendments proposals that were presented and received favourable consent in STAR Committee on 14 th December The above-mentioned amendments can be configured into three categories, as follows: 1. amendments of accredited measures, respectively measures 1.1, 2.1, 3.1 and 3.4, for the application of art. 16 Section A of MAFA regarding the exceptional natural disasters; 2. other amendments of accredited measures; 3. necessary amendments in order to accredit SAPARD Agency for the new measures implementation. 1. Modifications of accredited measures, respectively measures 1.1, 2.1, 3.1 and 3.4, following the application of art. 16 Section A of MAFA regarding the exceptional natural disasters Having in regard the registered damages, including those of the SAPARD projects found within the calamity areas, the Romanian authorities have initiated the necessary actions in order to apply the provisions of art. 16 (1), (1) (a) and (1) (b) Section A of MAFA for the projects located in areas affected by severe floods throughout the period April - September These provisions are referring to: 1. the increase of community co-financing support from 75% to 85% for measures 1.1, 2.1 (with the exception of the sub-measure Prevention and protection against floods ), 3.1 and 3.4 art. 16 (1); 54

55 2. the increase of public co-financing support from 50% to 75% for measures designed for private beneficiaries, respectively 1.1 (with the exception of sugar and oilseeds sectors), 3.1 and 3.4 art.16 (1) (a). Therefore, within Measure 1.1 Improvement of processing and marketing of agricultural and fishery products, the approved amendments were the following: for the localities with a degree of damage higher than 30% the provisions of art. 16 (1) and 16 (1) (a) Section A from MAFA will be applied, and the following investments would be eligible: investments for modernization for all beneficiaries of this measure; new investments, only for the beneficiaries who fulfil the criteria established by the national legislation in force for small and medium enterprise; for the localities with a degree of damage between 10% and 30%, the provisions of art. 16 (1) and 16 (1) (a) Section A from MAFA will be applied, thus the investments for modernization for all beneficiaries of this measure which presented a document proving they were affected by the floods during the period April September, 2005 would be eligible. The document shall be issued by the Local Committee for emergency situations 5 set up at commune level. Within Measure 2.1 Development and improvement of rural infrastructure, for villages with a degree of damage higher than 5%, the EC financial contribution increased to 85% from total eligible value of the projects, with the exception of sub-measure for works for prevention and protection against floods. It is necessary to underline that the eligible projects with no financing source, included on the SAPARD Agency waiting list had priority. For Measures 3.1 Investments in agricultural holdings and 3.4 Development and diversification of economic activities providing for multiple activities and alternative income the conditions established for the application of art. 16 Section A of MAFA are the same, respectively: for the localities with a degree of damage higher than 30% the provisions of art. 16 (1) and 16 (1) (a) Section A from MAFA will be applied, therefore the investments for modernization and new investments for all beneficiaries of this measure being eligible; for the localities with a degree of damage between 10% and 30%, the provisions of art. 16 (1) and 16 (1) (a) Section A from MAFA will be applied, therefore the investments for modernization and new investments for all beneficiaries of this measure which presented a document proving they were affected by the floods during the period April September, 2005 being eligible. The document was issued by the Local Committee for emergency situations set up at commune level. To guarantee the legal conditions necessary to the application of art. 16 Section A of MAFA, Romanian authorities approved the Government Decision No. 1512/2005 in order to 5 The Local Committee for emergency situations is set up in accordance with the GD No. 1491/2004 for the approval of the framework Regulation regarding the organising structure, tasks, functioning and endowments of the committees and operatives centres for emergency situations (GD no 885/ ). 55

56 declare the localities affected by flood during April September 2005, as calamities-struck areas, which in attachable annexe contains: the list of localities affected by floods during the period April September 2005, which are declared as calamites-struck areas (counties/communes/ villages and damage degree); the list of projects for prevention and protection against floods that can be financed within Measure 2.1 Development and improvement of rural infrastructure of SAPARD Programme. The application of these amendments is conditioned by a decision of Solidarity Fund certifying that the conditions of aid in case of disaster stipulated by Solidarity Found are fulfilled. Such a decision is also involving the recognition of fulfilling the conditions stipulated in art. 16 concerning the declaration of exceptional natural disaster. It is also necessary to specify that the provisions of art. 16 (1) and (1) (a) regarding the increasing of community co-financing rate and public co-financing will be applied to the projects approved by SAPARD Agency until June 30, Other modifications of the accredited measures Within Measure 1.1 Improvement of processing and marketing of agricultural and fishery products the financial public support was increased for the investment projects for submeasure Oilseeds from 30% to 50%, for the investments for environmental protection. This modification is aimed at reducing the private contribution in order to stimulate the environmental protection investments and to harmonise this sector with the provisions of the acquis communautaire. Within Measure 2.1 Development and improvement of rural infrastructure the submeasure Prevention and protection against floods was included for 24 land reclamation projects. The National Land Reclamation Administration is the beneficiary of this submeasure. Within this sub-measure the projects will uphold the following works categories: Rehabilitation and consolidation of rivers banks and dikes in areas affected by floods and with flood risk; these works have in view the consolidation of dikes for defense of embanking captures both at the Danube and inner rivers, and also to fight against bank erosion in the area of suction piping and/or pumping stations situated at Danube; Maintaining draining off capacity for excess water from embanking areas through the channel network; Rehabilitation of certain hydro technical structures from areas affected by floods and with the high risk of flood; these works have in view the rehabilitation of some dams with mitigation role against floods and protection of localities and agricultural land from this area; Small Forest belts built-up for protection and consolidation of the river bank; Regulating the leaking on versants; Stabilization of slippery soil; Elimination of humidity excess by setting up rainfalls collecting channels on slopes and their directioning towards natural outlets; Arrangement of valleys and ravines by setting up proper hydro-technical structures. 56

57 For Measure 3.1 Investments in agricultural holdings the following modifications were operated: renouncing to the enumeration of animal breeds with high genetic potential which can be purchased within this measure and introducing the following text: for populating the animal farms pure breeds reproduction animals as well as breeds derived from them, from European Union countries, accession countries and candidate countries having a pedigree origin and productivity certificate, issued according with legislation in force of the country of origin are eligible. increasing the number of milk cows with high genetic potential that can be purchased by family associations, from 15 to 20 cattle heads. For Measure 3.4 Development and diversification of economic activities providing for multiple activities and alternative income a new sub-measure was added, respectively Processing, at farm level, of attested traditional products and/or with organic certification with the condition that minimum 50% of used raw materials to result from beneficiary own production. Through this sub-measure it is allowed to: construct and modernize spaces and utilities necessary for processing, storing, conditioning and marketing of traditional and/or organic certified foodstuff and milk and dairy products, meat, meat products, fruits and vegetables; purchase equipments and installations specific for processing; purchase specialized transport vehicles for transport of foodstuffs of whom necessity and capacity are proved through the feasibility study. 3. Modifications necessary in order to accredit SAPARD Agency for the new measures implementation The fiche of Measure 3.2 Setting up producers groups was completed with the producer groups for goats purchasing and breeding that have been omitted in English version, and also, for the mixed categories, in the two versions, the method of calculation for the material base and for the production value has been explained. For Measure 3.3 Agricultural production methods design to protect the environment and to maintain the countryside the following modifications were endorsed: Completing the sub-measure Conservation of mountain pastures and meadows with those located in sub-mountains areas that cover around 1.6 million hectares and have high natural value. Saschiz area (Mureş county) was proposed as pilot project; Completing with more counties the pilot areas within sub-measures Soil conservation and protection against erosion and Organic farming ; Establishing the slope of 8% instead of 10% at the specific eligibility criteria. The amendment of the NPARD was approved by Commission Decision no 1194/

58 NPARD amendments initiated, during 2006, by the Managing Authority for SAPARD Programme following consultations with the European Commission DG Agri and relaying on the consent of the Monitoring Committee were discussed and endorsed in the reunions of STAR Committee during June and December, The amendments took into consideration the fostering of SAPARD funds absorption during the ending of the Programme implementation period, and in the second part of 2006, the readjustment of the financial allocations between measures in order to conclude the Programme. VI. Within the reunion of STAR Committee from of June 2006, the following proposals for NPARD amendment presented by MA received favourable assent: the approval to extend the application period of the art. 16, Section A, MAFA, regarding the exceptional natural disasters for measures 1.1 Improvement of processing and marketing of agricultural and fishery products, 2.1 Development and improvement of rural infrastructure, 3.1 Investments in agricultural holdings and 3.4 Development and diversification of economic activities generating multiple activities and alternative income from 30 th of June 2006 until 31 st of December 2006 (the project s approval date). The Managing Authority solicited this extent because the application of the provisions regarding the exceptional natural disasters for the projects of the above mentioned measures had been approved by the Commission in April 2006, through the Decision of 11 th of April, and the period left for approving the projects was extremely short (2 months and half). the approval of the technical fiche modification for measure 1.1 Improvement of processing and marketing of agricultural and fishery products Sub-measure Cereals, respectively, the limitation of the public contribution at 25.6 million Euro, only for the processing and marketing units projects, by eliminating this restriction for the investment projects in storage capacities. the amendment of the technical fiche for 3.1 measure Investments in agricultural holdings respectively the increase of the maximum eligible ceiling for investments in vineyard holdings from 500,000 Euro to 1 million Euro. The amendments presented in June, in the STAR Committee, have been approved through the Commission Decision C (2006) from 5 th of July 2006 regarding the amendment of the Commission Decision C(2000) 3742 from 12 th of December 2000 for approving the SAPARD Programme for Agriculture and Rural Development for Romania. Amendments of the NPARD financial table The initial NPARD financial table was approved together with the Programme, under the Commission Decision C(2000) 3742 from 12 th of December During the implementing period of the NPARD, was imposed the amendment of the financial table on various occasions, respectively under the EC Decisions from 11 th of July 2002, 17 th of September 2004, 4 th of July 2005, 11 th of April 2006 and 27 th of December

59 The first amendment of the financial table was approved within the STAR Committee reunion of 26 June The amendment was determined by the fact that during the were accredited only 3 measures: 1.1 Improvement of processing and marketing of agricultural and fishery products, 2.1 Improvement and development of the rural infrastructure and 4.2 Technical assistance and consisted in the re-allocation of funds foreseen for measures not accredited in The above mentioned amendments were approved under the Commission Decision of 11 th July Within the STAR Committee reunion of 20 July 2004, were presented and approved the proposals regarding the financial allocation for the NPARD measures: the inclusion of the value approved for AFA 2003 (EU contribution 163,339,086 EURO) and the reduction of the financial allocation scheduled for technical assistance at the European Commission disposal to million Euro for the period. The allocation for Measure 2.1 Improvement and development of the rural infrastructure was supplemented with the resulted amounts. These amendments were approved under the Commission Decision of 17 th September Within the STAR Committee reunion of 23 rd February 2005, were approved the proposals regarding the financial reallocation between the SAPARD measures, being adopted the Commission Decision of 4 th July Thus, was approved the increase of allocations for the following measures: 1.1 (52,000,000 Euro), 2.1(49,782,046 Euro), 3.1 (26,040,000 Euro),as well as decreasing the allocation for measures 2.2 (17,527,000 Euro), 3.2 (9,754,982 Euro), 3.5 (22,500,000 Euro) and 4.1 (45,000,000 Euro). Within STAR Committee on 14 of December 2005 was approved another NPARD financial table modification, the redistribution of million Euro from measures 2.2, 3.2, 3.3, 3.4, 3.5, 4.1 and 4.2 to measure 2.1. Out of this total value, 40 million Euro public contribution (EC contribution and national budget) are designated for sub-measure Infrastructure for prevention and protection against floods. The amount the modifications of measure 2.1, was decreased from the following measures: Measure 2.2 Agriculture water resources management 15 mil. euro Measure 3.2 Setting up producer groups 7.7 mil. euro Measure 3.3 Agri-environmental measures 19.2 mil. euro Measure 3.4 Development and diversification of economic activities providing for multiple activities and alternative income 50 mil. euro Measure 3.5 Forestry 65 mil. euro Measures 4.1 Improvement of vocational training 10 mil. euro Measures 4.2 Technical assistance 2 mil. euro This modifications of the NPARD financial table were approved by Commission Decision on 11 th of April

60 Following the intercession performed by the MA, the European Commission approved to apply the provisions of art. 16 Section A of MAFA for exceptional natural disasters for measures 1.1, 2.1, 3.1 and 3.4. Within the Commission Decision, the financial allocations corresponding to these measures, were mentioned separately, areas affected by floods (damaged) and areas non-affected by floods (not damaged), starting with 11 th of April Furthermore, the EU contribution corresponding to 2005 and 2006 for measures1.1, 2.1, 3.1 and 3.4 within the areas affected by floods, increased to 85%, and for the areas non-affected by floods of these measures as for the other measures remained at 75%. Thus, within STAR Committee from 20 th of December 2006, the financial reallocation proposals received a favourable assent, the European Commission Decision from 27 th December 2006 being adopted, which modifies the Decision C(2000) 3742/12 th of December 2000 regarding the approval of SAPARD Programme in Romania. The new financial table approved by the Commission includes the following reallocations between measures: For measure 1.1 Improvement of processing and marketing of agricultural and fishery products an additional amount of 41,968,346 Euro was granted for the projects for meat processing units with approved reorganizing programmes, from the B and C lists of the National Sanitary-Veterinary and Food Safety Agency agreed with DG SANCO. The allocation for measure 1.2 Improvement of the structures for quality, veterinary, and plant-health controls, foodstuffs and consumer protection has been reduced with 2,555,541 Euro; Within measure 2.1 Development and improvement of the rural infrastructure, the financial allocation suffered a decrease of 30,453,696 Euro due to the fact that the projects for the prevention and protection against floods, after elaborating the technical projects, had smaller values than the ones initially foreseen. The expenses for the feasibility studies for the technical infrastructure projects and the ones for the technical projects of the investment projects for prevention and protection against floods have been supported from the national budget. The financial allocation for measure 3.1 Investments in agricultural holdings has been decreased with 242,921 Euro; For measure 3.2 Setting up producer groups, the allocation has been reduced with 2,354,981 Euro due to the short period of implementation, having in regard that the measure was accredited in April For measure 3.3 Agri-environmental measures, the allocation has been reduced with 10,780,760 Euro due to the short period of implementation, having in regard that the measure was accredited in April

61 The financial allocation for measure 3.4 Development and diversification of economic activities providing for multiple activities and alternative income was supplemented with 514,412 euro. The financial allocation for measure 3.5 Forestry was supplemented with 8,239,842 Euro for completing the initial financial allocation and for financing several projects for forest roads that obtained the same selection score. For measures 4.1 Improvement of vocational training and 4.2 Technical assistance, the financial allocation was reduced with 2,824,826 Euro (measure 4.1) and 1,509,875 Euro (measure 4.2), due to the fact that there is no physical time for the implementation of the projects proposed within these measures. Within the seventeenth MC reunion, the MC members approved the Managing Authority proposal on the reallocation of 1.5 million Euro from the EC contribution under measure 2.1 from affected areas to not-affected areas. Thus, the value foreseen in the Decision of the European Commission of the 27 th of December 2006 for measure 2.1 not affected areas, was to be increased from 387,204,554 Euro to 433,704,554 Euro, decreasing the value for the affected areas from 137,604,545 Euro to 91,104,545 Euro, without modifying the initially assigned amount for this measure, respectively of million Euro. Following the discussions with the EC representatives, it was agreed that it would not be imposed the amendment of the NPARD financial table, due to the fact that the reallocations were smaller than 10% allocated to a measure. In this respect, the last applicable financial plan for the Romanian SAPARD Programme is the one approved under the Commission Decision on 26 th of December 2006 (Annex 1). 4.3 Details of major amendments to programme s management and monitoring systems over the course of the programme period Details of major amendments to programme s management The Managing Authority role for the SAPARD Programme has been taken over by the Ministry of Agriculture, Forests and Rural Development, in the spring of 2004, prior MA functioning within the Ministry of European Integration, respectively in the Ministry of Public Finances. Also, in 2006, through GEO no.13/2006 for the setting up, organization and functioning of the Paying Agency for Rural Development and Fishery, the SAPARD Agency was reorganized, resulting the setting up of PARDF. According to this Ordinance, PARDF takes over the attributions resulting from the SAPARD Agency s technical and financial implementation. 61

62 Details of major amendments to monitoring systems During the implementation of the SAPARD Programme, new tables with indicators were approved in order to monitor differently the damaged projects financed under Measures 1.1, 2.1, 3.1 and 3.4. Thus, by the amendment of the PARDF s functioning chart, the collection of the indicators and the submission of the monitoring tables from the regional level to central level is no longer carried out by an IT expert within the Programme Implementation Department, but by an expert within the Evaluation, Contracting Unit. From the beginning of the programme, PARDF submitted to NAO/CPA services a number of 122 instructions for the modifications of the procedures, all of them transmitted to EC services by NAO for examination/information. Also NAO has submitted a number of 23 instructions for the modifications of the procedures, modifying the National Funds procedures. Before issuing the approval, NAO submitted all the proposals for modification of the procedures to PIAD-MFP, which confirmed that the criteria of accreditation are respected. In this respect during the year 2009, PARDF issued the following modifications of the working manuals: Instruction no concerning the modification of the procedure of irregularity finding and debts recovery for SAPARD Programme G 8 IRD, approved by NAO and submitted to EC by the letter no / Instruction no. 120, concerning the upgrading of the manuals of procedures of the SAPARD Programme, according to the Order no. 123/ , issued by the Ministry of Agriculture, Forests and Rural Development on the substantiation of the new structure and of the Organizing and Functioning Regulation for PARDF, approved by NAO and submitted to EC by the letter no / The substantiation of the new structure and of the Organizing and Functioning Regulation for PARDF has been submitted to EC by our letter no / Instruction no. 121, concerning the modification / completion of Public Relation and Internal Audit Procedures, issued by the Ministry of Agriculture, Forests and Rural Development, approved by NAO and submitted to EC by the letter no / Also, in 2010, the Instruction no. 122, concerning the modification / completion of the procedure manual for Control and Anti-fraud G9-CA approved by NAO and submitted to EC by the letter no / (Romanian version) and no / (English version). Regarding the monitoring system exercised by the central level over the regional and county levels, for the assessment stage, the procedure provides additional sample control calculated based on an algorithm applied to the total eligible value to be verified, namely 20% out of the total eligible value requested for each region, so that each region, measure, be verified on a sample of 20%. 62

63 As regards the payment stage, according to the latest version of the payment authorizing Procedure for the SAPARD Programme, approved based on the Instruction no.120, once a month, on the first working day of the month, the heads of the Public Procurement Unit- Projects Payment Directorate (PPU-PPD) and Technical Verification Unit - Projects Payment Directorate (TVU PPD) draw up a sample of the projects assessed by the Public Procurement Unit (PPU) PRCRDF and the Payment Claims Verification Unit (PCVU) PCORDF/ Technical Verification Unit (TVU) PRCRDF, based on 5 risk factors. The purpose of this further assessment is for PARDF to verify the manner of compliance with the payment authorization Procedure by the PPU PRCRDF and the PCVU PCORDF/ TVU PRCRDF, and implicitly to ensure the uniform implementation of the payment authorization Procedure, given that the verification of the payment claim dossiers was decentralized at the levels of the PRCRDF and PCORDF. The conclusions reached following the verification on the payment claim dossiers included in the sample are submitted to the attention of the PRCRDF s directors in order for them to take measures for the remediation of the problems signaled. The Director-General and the Deputy Payments Director-General may propose administrative measures for the subordinated staff. Likewise, in compliance with the provisions under the above mentioned payments authorization Procedure, the head of the TVU PPD, receives on a daily basis, electronically, the Status of the payment claim dossiers on the date... F3, in order to monitor the observance of the procedural terms for the verification of the Payment claim dossiers. The head of the TVU PPD receives electronically, twice a month, from the Monitoring Unit, the status of the projects execution - F4, in order to monitor the execution stages of the projects. The Public Procurement Unit within the SAPARD Agency carried out the following verifications on the procurement procedures for the public beneficiaries of the SAPARD Programme: verifications carried out in entirety on 438 projects of the public beneficiaries under Measure 2.1, contracted in 2003; verifications carried out in entirety on 169 projects of the public beneficiaries under Measure 2.1, contracted in 2004, by semi- decentralized procedure: one expert from PPU at central level together with an expert from the Regional Centers; for the projects contracted in 2006 was used the decentralized procedure, the verifications being carried out in entirety by the Regional Centers and the PPU at central level carried out verifications on a sample of minimum 5%, in value and physical, of the projects verified by PRCRDF. The projects contracted in 2006 were the following: M 2.1 = 252 projects M 1.2 = 20 projects M 3.5 = 77 projects The system for ex post monitoring In order to ensure the on-the-spot control on the projects finalized under the SAPARD Programme at least once during five years period, and in order to check the maintenance of the projects eligibility, following the implementation of the control and antifraud procedures G9 CA, version 02, amended by Instruction 118 approved by NAO and submitted to the Commission s services by letter no. 295/September 25 th 2008, starting with January 1st, 2009 the ex- post control has been decentralized at the regional centers level. 63

64 As regards the monitoring of the ex post control activity of the regional centers structures, starting with January 1st, 2009, the Control and Antifraud Directorate has undertaken the following measures, along with the ex post control decentralization, in compliance with the provisions of the Control and Antifraud Procedure Manual, G9-CA version 02, consolidated by Instruction 118: the PARDF s ex-post control Plan is drawn up by the Control and Antifraud Directorate, is approved by the Director General and is submitted for information to all the regional structures, in order to set up the control schedule and the control teams. Starting with January 1st, 2009, the projects included in the ex post control plans have been selected in chronological order, depending on the date of the last payment, so as not to disregard any project in terms of the on-the-spot control, at least once during a five years period since the last payment; following the submission of the PARDF s ex post control Plan to the regional structures, the Control and Antifraud Directorate, through the ex post control Unit, shall carry out its own on-the-spot checks on the beneficiary s completed projects, in compliance with the control plan on a sample of minimum 10% out of the projects checked on-the-spot by the regional structures. The projects included in the CAD s sample control Plan were selected based on the risk analysis. The ex-post on-the-spot control from the central level was scheduled having in view that the projects selected on the ex-post control Plan be checked on-the-spot subsequent to the control carried out by the regional structures. This measure was adopted in order for CAD to make sure both whether the regional structures observe the procedural provisions regarding this type of control, as well as whether the regional structures had carried out checks in order to verify the maintenance of the projects eligibility during 5 years since the final payment, namely the manner in which the verified projects are handled. Taking into account the above-mentioned, it is verified whether the Checklist on the projects eligibility maintenance during 5 years since the final payment (CA 7.5.5) filled in by the C.A.D. s expert during the on-the-spot control, contained all the aspects checked on-the-spot by the regional structures, in compliance with CA 7.5.5A checklist. Moreover, C.A.D. shall verify whether the experts with ex post responsibilities form the regional levels have carried out the on-the-spot control and whether the regional structures have observed the control procedure. The Control Reports drawn up by C.A.D. Ex post Control Unit, subsequent to the on-the-spot check of the projects, include both the aspects regarding the projects eligibility maintenance for receiving the community co-financing, as well as the manner in which the experts with ex post control responsibilities within the regional structures observed the procedure s provisions. As regards the ensurance of the control on the completed projects at least once during 5 years since the last payment, we would like to point out the following: all the projects completed in 2004 and a part of the projects completed in 2005, which had not been subject to the ex-post on-the-spot control during , had been checked during 2009; all the projects completed in 2005 and a part of the projects completed in 2006, which had not been subject to the ex-post on-the-spot control during , had been checked during 2010; in 2011, all the projects implemented in 2006 and 2007 which have not been subject to the ex post on-the-spot check during are to be checked ex post on- 64

65 the-spot. Thus, was drawn up the PARDF s ex-post control Plan no of December 16 th /2010; in 2012, PARDF aims to ensure the ex post on-the-spot check of the projects implemented in 2008; in 2013, PARDF aims to ensure the on-the-spot ex-post checks of all the projects implemented in The decentralization of the contracting and payment functions from central to regional and county levels was achieved as follows: In terms of the contracting function, this function has not been decentralized, continuing to be achieved at the central level. As regards the decentralization of the payment function by Instruction 110 on June 27 th, 2007, the payment authorization manual was amended for Measures 1.1, 1.2, 2.1, 3.1, 3.2, 3.3, 3.4, 3.5, 4.1 and 4.2, at county, regional and central levels, compared to: the accredited and revised versions on December 20 th, 2005, (for measures 1.1, 3.2, 3.3 and 3.5) related to the SAPARD Programme financed under EU and the State Budget; the version approved by Order no.794 bis/ December 14 th 2006 (for Measures 1.1, 3.1 and 3.4) related to the SAPARD Programme financed from the State Budget funds. In July 2007, the consolidated payment authorization procedure came into force. The amendments consisted in: the submitting of the documentation related to the payment claim files at the Paying County Offices for Rural Development and Fishery; the authorization of payment at the Paying Regional Centers for Rural Development and Fishery; the check on sample at central level of the payment claim files authorized for payment at county and regional level. This decentralization was performed based on the strategy regarding the absorption of the SAPARD funds allocated to Romania for Regarding the decentralization of the checking carried out on the procurement procedures from the PARDF s central level to the Regional Center, this was carried out in compliance with the provisions of the Rules and Procedures Manual for the Public Procurement Contracts for Services, Goods and Works version 10, edition 2, accredited by the European Commission on April 20 th, Thus, the checking of the public procurement procedures was entirely taken over by the Regional Centres and the Public Procurement Unit within PARDF carried out the re check on a sample of a minimum 10% out of the eligible value and the number of the projects on each Regional Centre and on each Measure (M2.1, 1.2, 3.5). Following the request from the European Commission to offer information on the indicators used to monitor the implementation of the SAPARD Programme, such as the absorption rate, as well as the problems and their solutions, must be mentioned the following: Within the reunions of the Monitoring Committee, was analysed the stage of implementation for the measures, and the consumption rate of the allocations, respectively the report between 65

66 the value of paid payments and the allocation for at the level of each measure. Depending on the situation of the commitments and payments for each measure/submeasure, were performed actions in order to foster the absorption rate of the funds allocated within the SAPARD Programme: the Strategy regarding the actions for the encouragement of the absorption of funds allocated for Romania through the SAPARD Programme for the year 2007 was drafted; the financial table was modified, respectively were performed reallocations within the measures and was applied the flexibility rule for measures 1.1 and 2.1; the Government Ordinance no. 31/2007, on regulating some financial measures in order to stimulate the absorption of funds allocated under SAPARD Programme was drawn up and approved, through it being supported the beneficiaries of measures 2.1 Development and improvement of the rural infrastructure and 3.5 Forestry, in order to ensure the necessary sources for the administrativeterritorial units to perform the payments corresponding to an instalment payment for the settlement the construction works resulting from the financing contracts for the investments objectives in rural infrastructure under the SAPARD Programme. The norms for the Farmer Programme,under which are supported the beneficiaries in order to ensure the private co-financing of the projects, respectively Law no. 231/2005 on stimulating agricultural investments,law No. 218/2005 regarding the encouraging of SAPARD fund absorption, by taking over the risk by the guarantee funds and Government Ordinance No. 46/2005, regarding the speed up of SAPARD funds absorption, by the guarantee of the cofinancing loans with the purchased assets within SAPARD projects. The credits were thus guaranteed by actives purchased under projects financed within measures 1.1 Improvement of processing and marketing of agricultural and fishery products, 3.1 Investments in agricultural holdings, 3.4 Development and diversification of economic activities generating multiple activities and alternative incomes and 3.5 Forestry Furthermore, the Romanian authorities performed actions in order to prolong the deadline of valability for the financial commitments established under the Annual Financial Agreements 2003, 2004, 2005 and 2006, until the 31 st of December 2007 for AFA 2003 and 2004, until 31 st of December 2008 for AFA 2005 and respectively until 31 st of December 2009 for AFA The absorption of SAPARD funds policy has focused on the following pillars: 1. identify efficient legal and institutional solutions to solve problems related to private co-financing; 2. identify and support potential beneficiaries; 3. improve the Programme implementation system-the Technical and Financial Implementation System of the SAPARD Programme was improved in order to facilitate the efforts of the potential beneficiaries regarding the preparation of the claim payments request, the veriofication and approval of the claim request, contracting the financial aid and approval of payment; 4. increase the SAPARD Programme visibility in target environments; 5. Identify efficient solutions to solve problems related to the lack of consultancy. 66

67 In terms of the general problems that affected the Programme implementation, it must be said that unlike the rural infrastructure measure, which benefited from a state guarantee for bank loans engaged to finance works by the local councils, as well as from a 100-percent public funding of project value, the private beneficiaries faced a series of major problems, as they were confronted with the following deficiencies of the business environment: the high cost of co-finance bank loans, which in real terms ranges between 8.5 and 11 percent, against a general background of modest average profit rates for agriculture, or related, activities; the quasi-generalised lack of guarantee to access these loans, especially among small and medium-sized enterprises and small farmers; the lack of viable strategies and interest among trade banks and other lenders in financing agriculture and rural development; the lack of qualified staff within financial institutions, which makes it impossible to carry out a lending activity that would suit the agriculture sector; difficult access to consultancy services to get assistance with project preparation and implementation, the high cost of these services, and, not rarely, their poor quality, corroborated with the still limited operation of the National Agency for Agricultural Consultancy; debts to the state budget among companies, caused by the financial squeeze prevailing in the national economy, which prevents access to SAPARD funding; difficulties in attesting ownership/usage rights related to real estate (land or buildings to be upgraded), caused by the lack of final legislation on ownership and the current volatility in this field, entailing numerous litigations; the poor level of information among the population, caused by the insufficient information campaigns on the Programme content Using the Technical Assistance during SAPARD Programme s implementation period Measure 4.2 Technical Assistance should cover technical assistance needed for preparing and implementing all measures within the SAPARD Programme. The aim is to provide the necessary technical assistance support in accordance with the implementation priorities, as well as assistance in monitoring and evaluation of the Programme and its possible subsequent modification. To achieve this general objective the following specific objectives had to be carried out: ensuring an adequate information and publicity flow, informing the general public and potential beneficiaries about SAPARD funds; supporting the preparation of Programme measures and increasing the efficiency of their implementation; supporting the activity of the Monitoring Committee, including its meetings and the experts and outsourcing of specialised services needed to achieve the Monitoring Committee s operational objectives; providing support for specific activities of monitoring and evaluation of the SAPARD Programme and adjustment of Programme baselines and indicators; supporting external expertise, studies, visits and seminars necessary for the successful implementation of the SAPARD Programme. 67

68 According to European Commission Guide s provisions for the candidate countries regarding the technical assistance within SAPARD Programme, all the projects and activities to be financed under Measure 4.2 Technical Assistance have been approved by the President of the Monitoring Committee. They were also included in the Action Plans for SAPARD Technical Assistance approved within the framework of the Monitoring Committee s meetings. Through Technical Assistance measure, in the period during the following projects were implemented: 1. Mid-term evaluation of the SAPARD Programme Budget: 200,000 EURO Value of Framework Contract for Financing: 666,000 lei Value of Service Contract: 195,500 Euro The mid-term assessment aimed to provide an insight into program implementation, to help improve implementation and facilitate decision making concerning a possible diversion programme. The service contract for mid-term assessment of the SAPARD programme in Romania was signed on May 13, 2003 between the Ministry of European Integration, as contracting authority, company URS Corporation in the United Kingdom, as a contractor. The mid-term assessment was conducted in two phases, the first of which was performed by URS Corporation, while completing the final report has been entrusted Kvistgaard Consult Company as a subcontractor of URS Corporation. In accordance with the terms of reference, the assessor has prepared and submitted an initial report of the Managing Authority, two mid-term reports and draft of the Final Report. This final report was submitted to the Monitoring Committee and submitted to analysis to the European Commission. The Steering Committee considered and endorsed the reports of activity performed by an independent evaluator (initial report, mid-term reports and final report). Following the comments and recommendations of the assessment steering committee members, was completed the initial report on the work methodology, and it was approved by the MA. Having examined the draft Final Report and as a consequence of the application to improve the quality ratio, expressed as evaluation steering committee members, as well as the European Commission, Managing Authority requested the evaluation team evaluator strengthening and expansion of activities to complete the document so that it can be considered at least acceptable. Given the delays in the development of mid and for the Final Report completed in the shortest time, the Management Authority has recommended sub-contracting a consultant with a very good experience in the assessment of agriculture and rural development programmes. Following the recommendation of the Managing Authority, the URS Company has contracted Consult Kvistgaard Company to complete the mid-term assessment. 68

69 The mid-term assessment report was submitted to the SAPARD Managing Authority on March 22 nd, Based on observations and comments of members of the Managing Authority and that of the Coordination Committee of the SAPARD members, the contractor has developed the final version of the Assessment Report, which he submitted to the Managing Authority, on March 31 st, On 27 th of April 2004, the Coordination Committee approved the mid-term assessment report conducted for the period of implementation of SAPARD Programme in Romania, report being submitted to the European Commission on May 17 th, Informing and Publicity Campaign for SAPARD Programme Budget: 199,000 Euro Value of Framework Contract for Financing: 709,972.3 lei Value of Service Contract: 709,972.3 lei Through this project, the beneficiary, MAFRD, has implemented a national information and communication campaign, including interactive events (conferences at regional and national level), production and dissemination of promotional materials, media promotion of the Programme through press and TV. Through this project, the beneficiary MAFRD, has implemented a national information and communication campaign. In this campaign were included: press conferences at regional and national level (a national press conference and 7 regional press conferences); producing and disseminating promotion materials (6,000 pieces General Information Brochure, pieces posters, 8,000 pieces Applicant s Guides for Measure 3.1 and Measure 3.4, 8,000 CD-s Financing Applications corresponding to the Measures 3.1 and 3.4, 55 pieces indoor portable displays); mediating the SAPARD Programme through press materials (10 press materials/articles in newspapers, magazines; a 30-second TV advertisement, a 10- minute presentation film of the SAPARD Programme, a 30-second radio advertisement). 3. Study for determination of the potential areas, the geographic areas and of the unitary standard gross margins within Measure 3.1 Investments in Agricultural Holdings of SAPARD Programme Budget: 87,500 Euro Value of Framework Contract for Financing: 312, lei Value of Service Contract: 312,000 lei Within the project, potential areas on types of culture and species of animals and poultry had been established, as well as the geographic areas through delimitation of communes on three main categories of relief. A methodology regarding unitary standard gross margins was also elaborated. 69

70 Through this study, were achieved the following: Setting up the criteria to determine the high, medium, low potential areas according to the database and the current methodologies for weather, soil, land slope and rural area development degree; Setting up the high, medium, low potential areas for vegetal production (field crops, industrial plants, vegetable gardening, vineyards, trees, grass fields, hey fields) and animal breeding (bovines, pigs, sheep, horses, poultry); Framing the rural localities (communes) in the three potential areas for the vegetal and animal production; Setting up the criteria for the main relief forms: plain, hill and mountain; Setting up the limits for each relief form; Framing the rural localities (communes) in the three relief forms; List of the rural localities from the mountain area; for the territorial administrative (rural) units, partly located in the in the mountain area, villages located in mountain area were specified; Elaboration of a book including the unitary standard gross margins and the working hour s contribution for the vegetal production, animal breeding in view of carrying out the economical financial analyses of the projects of Measure The justification for the requirements of the content for Adults Training Courses within Measure 4.1 SAPARD Improvement of Vocational Training Budget: 65,000 Euro Value of Framework Contract for Financing: 231,900.5 lei Value of Service Contract: 195,000 lei The project has endorsed the preparation of Measure 4.1. Types of courses on SAPARD measures and sub-measures had been established, as well as occupational standards regarding vocational training for the specializations required for each measure and sub-measure, correlation between performance criteria for professional competence and types of courses proposed. Through this project, vocational training objectives were defined and settled out: the specific system for SAPARD vocational training; list of the occupation standards which are subject to professional training; list of vocational training programs/modules and their content; number of potential trainees; minimum requirements necessary for the vocational training providers; possible scenarios to implement Measure 4.1; estimation of the vocational training expenditures. The results of this study were used by MAFRD, the beneficiary of Measure 4.1, in drawing up the Standard Project Fiche and the Terms of References for the projects under Measure Organizing a National Seminar on Measure 4.1, on the Opportunities of Adults Training in Rural Area, on the Conditions and Institutional and Legal Framework for 70

71 Ensuring the Efficient Implementation of the Measure and its Positive Impact on Human Resources Investments in Agriculture and Rural Area Budget: 13,000 Euro Contracted amount: 53,554.8 lei The objective of the project is the national promotion of Measure 4.1 through activities of information, communication and visibility for this measure and for the opportunities of adults training in the rural area. 6. Information and advertising campaign for SAPARD Programme in Romania Budget: 600,000 Euro Value of Framework Contract for Financing: 2,446,320 lei Value of Service Contract: 2,425,872.8 lei The project s purpose was to carry out a complete national communication and promotion campaign. 7. Organising and preparing the Monitoring Committee meetings for 2005, 2006 and 2007 Budget: 60,000 Euro Value of Framework Contract for Financing: 233,070 lei Value of the Services Contract: 195,000 lei In view of increasing the efficiency of the Monitoring Committee, the project had as purpose to finance the expenses related to the preparation of these meetings for 2005, 2006 and Updating of the Mid-term Evaluation of the Special Pre-Accession Programme for Agriculture and Rural Development Budget: 200,000 Euro Value of Framework Contract for Financing: 776,900 lei Value of the Services Contract: 198,500 Euro The project aims at evaluating the quality and efficiency of SAPARD Programme implementation to improve it and, if necessary, to re-direct the Programme. 9. Data base with reference prices for goods, works and services purchased within the projects implemented under the SAPARD Programme. Budget: 100,000 Euro Value of Framework Contract for Financing: 364,690 lei Value of Service Contract: 356,000 lei By creating a database of reference prices for goods, works and services was intended the correlation of the SAPARD implementation with the principles of an efficient and economic financial management, a realistic determination of costs incurred in relation to activities 71

72 proposed by the project and thus ensure better protection in terms of how they are using public money from the EU and national contribution. 10. Organizing a national seminar dedicated to measure 3.5 Forestry from the SAPARD Programme Budget: 13,000 Euro Value of the Financing Framework Contract: 45,399 lei Value of the Services Contract: 44,491 lei The project aimed at maximizing the efficiency and impact of the investments in the forestry field, at setting up a discussion body regarding the specific aspects of Measure 3.5, which comprises the relevant institutions and organizations with responsibilities regarding the measures implementation and at informing the public about this measure. Until the end of 2008, the measure was approved 10 technical assistance projects worth 5, lei, representing 1.54 mil. Euro. All the projects financed under this measure were finalized by December 31 st 2008 and payments in value of 5, thousands LEI, representing 1.42 mil. Euro, were authorized and executed. During the same period were cancelled the following projects: 1. Elaborating practical guides for potential beneficiaries, for each sub-measure within Measures 3.1 and 3.4 Budget: 70,000 Euro The project was cancelled because the successful bidder had not submitted evidence to support the elements presented in the technical bid (diplomas, certificates etc.). 2. Workshops on presentation of procedural requirements in developing a project financed by Measure 3.4 Developing and diversifying economic activities to generate multiple activities and alternative income of the SAPARD Programme Estimated budget: 80,000 Euro The project was cancelled because its funding was not considered feasible. 3. Improving the monitoring system for the SAPARD Programme Estimated budget: 50,000 Euro The contract was cancelled because at least three bids were received to proceed with the evaluation. 4. Workshops on presentation of procedural requirements in developing a project financed by Measure 3.1 Investments in agricultural holdings of the SAPARD Programme Estimated budget: 80,000 Euro The project was cancelled because its funding was not considered feasible. 72

73 5. Printing of adhesive sticker for a better visibility of the SAPARD Programme Budget: 30,000 Euro The contract was cancelled following receipt of the SAPARD note no. 5726/ on specific procedural provisions SAPARD Programme. 6. Workshops in the pilot areas named - Introducing procedural requirements for financing the measure 3.3 Agricultural production methods designed to protect environment and maintain the countryside Estimated budget: 60,000 Euro The project was cancelled because its funding was not considered feasible. 7. Workshops in each region entitled, "Presenting the procedural requirements in developing a project funded by the measure 3.5 Forestry of the SAPARD Programme Estimated budget 60,000 Euro The project was cancelled because its funding was not considered feasible. 8. Seminars in every Region Presenting the procedures requirements in the elaboration of a project financed under Measure 3.1 Investments in Agricultural Holdings of the SAPARD Programme. Estimated budget: 160,000 Euro The project was cancelled because there was no financial support from the budget for Seminars in every Region Presenting the procedures requirements related to the elaboration of a project financed under Measure 3.4 Development and diversification of economic activities, providing for multiple activities and alternative incomes Estimate budget: 160,000 Euro The project was cancelled because there was no financial support from the budget for Measure 4.1 Improvement of Vocational Training The objective of Measure 4.1 Improvement of Vocational Training was to grant specialized assistance to improve the knowledge and professional skills for an efficient management of agricultural activities. The improvement of vocational training addresses the farmers and other persons involved in agricultural, fishery and forestry activities, and also in case of these activities conversion to non-agricultural activities. This target was in accordance with article 2 of the Council Regulation (EC) no. 1268/1999, with article 5 of the Commission Regulation (EC) no. 2759/1999 and with the stipulations of Chapter III, Title II of Council Regulation (EC) no. 1257/

74 Within measure 4.2 Technical Assistance, a study for measure 4.1 was concluded on the vocational training needs. Through this study the types of courses for each measure and submeasure, themes for the courses on modules, their duration and the number of participants were established, according to the competences identified trough the occupational standards. 1. Vocational training in agriculture Module I Vocational training for the general management of the holding/company, for the vegetal and zoo-technical production, Module II Vocational training of farmers for vegetal production, Module III Vocational training of farmers for dairy cow breeding, Module IV Vocational training of workers from agro-tourist households. Budget: 967,950 Euro Value of Financing Framework Contract: 3,693,406.8 LEI Value of the Services Contract: 966,130 Euro The results of the project were as the follows: Module I Vocational training for the general management of the holding/company, for the vegetal and zoo-technical production: 4 training actions organised at national level; 50 trainees/action; 166 participants trained. Module II Vocational training of farmers for vegetal production 3 training actions organised at regional level; 50 trainees/action; 113 participants trained. Module III Vocational training of farmers for dairy cow breeding 3 training actions organised at regional level; 50 trainees/actions; 151 participants trained. Module IV Vocational training of workers from agro-tourist households. 2 training actions organised at regional level; 50 trainees/action; 86 participants trained. Within the project, had been trained a number of 516 participants of 600 foreseen in the Service contract. The project was completed in February Vocational training to improve the skills related to general management of processing and the marketing of the agricultural and fishery products (including quality management) Budget: 496,613 Euro Value of Financing Framework Contract: 1,734,272 lei Value of the Services Contract: 496,613 lei 74

75 The results of the project were as the follows: Module I General management of processing units for agricultural and fishery products: 4 training actions organised at national level; 50 trainees/action; 196 participants trained. Module II Marketing and financial-accounting management in processing units of agricultural and fishery products 3 training actions organised at national level; 50 trainees/action; 146 participants trained. Under the project had been trained a number of 342 participants of 350 foreseen in the Service contract. The project was completed in February Vocational training for the development of competencies related to agricultural methods aiming to protect the environment and conserve the rural landscape Budget: 595,725 Euro Value of Financing Framework Contract: 2,195,664 lei Value of the Services Contract: 595,350 Euro The results of the project were as the follows: Module I- Agricultural production methods designed to protect the environment and the countryside: have been implemented in good conditions 25 seminars (40 hours each) in 14 counties; have been trained a number of 703 trainees, with 128 trainees more than the number stipulated in the contract trainees; The project was completed in December Vocational training for improving the skills in vegetal production and animal breeding area Budget: 993,225 Euro Value of Financing Framework Contract: 3,468,540 lei Value of the Services Contract: 804, euro The results of the project were as the follows: Module I - Animal breeding and field crops: 6 training actions organised at national level; 50 trainees/action; 407 participants trained. 75

76 Module II Horticulture: 4 training actions organised at national level; 50 trainees/action; 240 participants trained. The project was completed in December Vocational training aimed at developing competences in the forestry field Budget: 595,725 Euro Value of Financing Framework Contract: 2,195,664 lei Value of the Services Contract: 595,707 euro The results of the project were as the follows: Module I Training in forest management unit administrative, operational or processing nurseries 2 training actions organised at national level; 50 trainees/action; 100 participants trained. Module II - Professional training in primary wood processing 2 training actions organised at national level; 50 trainees/action; 106 participants trained. Module III Professional training in forest nurseries (forest cultures) 2 training actions organised at national level; 50 trainees/action; 113 participants trained. Module IV - Professional training in mining and forest roads 2 training actions organised at national level; 50 trainees/action; 99 participants trained. Within the project were trained a number of 418 trainees from 400 as was provided in the Service Contract. The project was completed in December Vocational training for improving the skills related to development and diversification of economic activities generating multiple actions and alternative incomes Budget: 595,725 Euro Value of Financing Framework Contract: 2,080,391 lei The Financing framework contract was cancelled in October 2006 because the time was of 4-5 months of contracting services and project contracting had to be taken up on

77 7. Vocational training related to management of associations for capitalizing and marketing agricultural, forestry and fishery products Budget: 695,888 Euro Value of Financing Framework Contract: 2,430,180 lei The Financing framework contract was cancelled in October 2006 because the time was of 4-5 months of contracting services and project contracting had to be taken up on As regards Measure 4.1 Improvement of vocational training, 5 projects were approved by the end of 2008, in value of 13, thousand Lei, representing 3.65 mil. Euro. All these projects had been contracted in All the projects financed under this measure were finalized by December 31 st 2008 and payments in value of 10, thousands Lei, representing 3.03 mil. Euro, were authorized and executed The involvement of the local authorities and central institutions structures in the SAPARD Programme implementation To attain the Programme objectives and ensure efficient information dissemination among potential beneficiaries, a decisive role is played by the local authorities and by the decentralised structures of central public institutions involved in the Programme implementation. Thus, in order to ensure institutional transparency between the central and local and/or regional bodies, the authorities have stepped up actions at central and local level, being permanently concerned with increasing the efficiency of institutional communication with the Programme target audience. The prefectures and the rural town halls, on the one hand, and the Regional Offices for SAPARD Implementation, the DARD/MAFRD and the County Offices for Agriculture Consultancy, on the other hand, intensified dissemination and support activities aimed at the potential beneficiaries of the Programme during the Programme implementation. The local authorities have been involved in implementing the SAPARD Programme by their participation to the publicity campaign and to other information sessions. The Regional Offices for SAPARD Programme Implementation that had an ongoing collaboration with the local authorities, had as objective to ensure the presence of the representatives of the Local Councils at the information sessions. The purpose of these actions was that the representatives of the Local Councils became carriers of information in the communes they administer. The meetings with these representatives indicated their particular interest in the Measures 1.1, 3.1 and 3.4 from the point of view of opportunities for investing in the rural area under these measures. For enhancing the interest of the local authorities in participating to the implementation of the SAPARD Programme, information and training sessions had permanently been organized 77

78 attended by potential beneficiaries and representatives of Local Councils, both as auditors and lectors. The sessions, held in communes and villages of the counties belonging to the corresponding Regional Office, focused on informing the potential beneficiaries on the real financing opportunities and on presenting the future measures not yet accredited. Informative materials, such as Applicant s Guides, leaflets, brochures, SAPARD Guidelines, posters were distributed on the occasion of each session. Within the information flow carried out in 1,012 communes in Romania, under the Promotion and Publicity Campaign in 2005, financed under Measure 4.2 Technical Assistance of SAPARD Programme, the local authorities were directly involved in organizing the meetings with the potential beneficiaries and disseminating the information specific to SAPARD Programme. During 2005, the local authorities had an active involvement in managing the problems caused by the floods. In this respect, it must be pointed out that, for the identification of the localities affected by calamities and the damage degree of those, a close collaboration between the central and local level was developed. Thus, through the Ministry of Administration and Internal Affairs, the Prefectures from each county had the responsibility of gathering the data regarding the rural localities affected by floods. Based on the mayors reports from the affected villages and communes, the Prefectures sent to the centre the lists of affected localities in order to be included in the Government Decision for declaring localities damaged by floods in April-September 2005 as disaster-struck areas. Given the current circumstances in the Romanian agriculture and the preparations for EU accession, the consulting experts with the NAAC, its county offices, and local centres became involved in the promotion and support activities aimed at helping agriculture producers to gain access to SAPARD funds, by assisting them with filling the documentation and getting the co-financing loans, clearance, and necessary papers. Through its forty-two county offices, the NAAC carried out the following activities: ensured the publication, multiplication, and free distribution of information materials: information slips, posters, brochures, and electronic materials; ran weekly information campaigns at village and county levels, joined by DARD and ROISP experts; participating within the SAPARD Caravan together with the representatives of local Authorities, the Directorate for Agriculture and Rural Development (DARD), regional Paying Centres for Agriculture and Rural Development, the Rural Credit Guarantee Fund; the participation of county consultancy specialists within the Farmer Bureau set up within DARD; mediating the SAPARD and the Farmer Programmes within the national and local media; provided interested people with technical assistance on how to access SAPARD funds; developed model-projects in the livestock, fruit trees, viticulture, and vegetable sectors; 78

79 monitoring the beneficiaries of the SAPARD and Farmer Programmes financing; setting up meetings and debates at commune level with the potential beneficiaries of the SAPARD and Farmer Programmes; Also, under the MAFRD Minister s Order no. 121/2004, the DARDs monitor the investments financed under the SAPARD Measure 2.1 Development and Improvement of Rural Infrastructure. With this action, the DARD Technical Services in charge with implementing the SAPARD Programme monitored the physical stage thereof as well as the more significant problems pertaining to investments. Within this context, a verification report was produced on the way in which the investments performed in operation, so that, all the economic and administrative systems concurring in the SAPARD implementation could remedy emergent deficiencies in a timely and efficient manner. In order to identify and support potential beneficiaries, based on a review of the stage of implementation of SAPARD accredited measures and of contracts signed by the SAPARD Agency, it was determined that measures would be taken at the local level to improve access to funding Information and publicity measures On July 31 st 2002 the European Commission issued Decision EC/638/ conferring the Romanian authorities the management of SAPARD assistance. At that point the promotion of SAPARD Programme was assured through the Promotion Communication Unit within the Programme Coordination Directorate. The Promotion Communication Unit (PCU) included one head of unit and two experts. During The SAPARD Programme s Information and Advertising Strategy was drawn up by the staff within PCU and was implemented, in the first stage, with the help of Europe Fund project financed under PHARE for a period of 1 year. This project represented a substantial support and an opportunity to constitute a network of Regional Centers for Information on the Community Agriculture Policy and Programmes. Thus, a number of eight information regional centers were set up and functioned within SAPARD Agency s Regional Offices, assuring the transparency and the distribution of the information related to the Common Agriculture Policy, to the general legal framework and sole UE market, ensuring at the same time the access to the information sources. The activities related to the promotion of SAPARD Programme aimed at three main directions: 1. The elaboration and distribution of informative materials (leaflets, brochures, presentations); 2. Participation to different seminars, symposiums and fairs; 3. Information activities by media, consultancy companies, agriculture and agri-food institutions and bodies. 79

80 Thus, PCU elaborated a series of informative leaflets including details on the SAPARD Programme s general framework, as well as a short presentation of the two investment measures the Agency planned to launch following the accreditation. Different presentation materials were drawn up for the symposiums and fairs where SAPARD Agency was represented. As regards the distribution of the informative materials, an approximate number of 11,900 leaflets were distributed at the central headquarters and at the Regional Offices for the Implementation of SAPARD Programme (ROISP). The distribution of the leaflets to the target audience was carried out through the Technical Delegated Bodies (TDB), the National Agency for Consultancy in Agriculture (NACA) and the County Offices for Consultancy in Agriculture (COCA). At the same time, the information content of SAPARD Agency s website, was elaborated. SAPARD Agency s representation at different events (seminars, symposiums, fairs and scientific sessions) was set as a priority for a more efficient promotion of SAPARD Programme. Thus, the representatives of the central ad regional centers took part at such events (Finagra 2001, Simpolact 2001, Simopan 2001, INDAGRA 2001, training seminar at Poiana Brasov, where 180 persons participated). In order to identify the targeted audience and SAPARD Programme s potential beneficiaries, were taken the following measures: creating a data base comprising all social partners and mass-media representatives; consulting the social partners and those of involved institutions/bodies; creating links with other similar programmes; participating at dedicated TV and radio shows, in order to promote the SAPARD Programme. In order to inform the potential beneficiaries on the procedures and on the conditions to access the funds granted under SAPARD Programme, during May 2002 the projects preparation process was started. Within this process the Applicant s Guides were launched, giving instructions on the manner to fill in the Financing Application and the annexed documents, including information on the eligibility and selection criteria, on the budget of the programme, the technical fiches of the measures, the content of the feasibility study and the model of a business plan, etc. At the same time, PCU drew up the Call for projects and submit it to the national media. This activity was preceded by a preparatory stage of the call for projects on the two measures, starting with May 7 th, 2002, which aimed at: - informing the applicants on the preliminary conditions to participate at the calls for projects on Measures 1.1 and 2.1, related to the compliance of the financing application, the eligibility and selection criteria by taking part at conferences, seminars, meeting with the representatives of the local communities, media broadcasting and by permanent contact with the potential beneficiaries; - launching the projects preparation by the potential beneficiaries. The informative package for Measures 1.1 and 2.1 was distributed to ROISP in order to be distributed to the applicants and to all the entities involved in the implementation of SAPARD Programme: County Councils, NACA, the Ministry of Agriculture, other ministries and institutions. At the same, the documentation was posted for the applicants on SAPARD Agency s website ( 80

81 Another initiative consisted in the elaboration and transmission of an informative material regarding the official opening of SAPARD Programme on August 1 st, 2002 to all the potential beneficiaries found in ROISP s database. Thus, SAPARD Agency organized a press conference in order to officially launch SAPARD Programme and the two investment measures. 166 media broadcasts with the representatives of SAPARD Agency and ROISP management were held, as follows: 30 TV broadcasts, 37 radio interviews and 99 interviews published in the written media. During this period of time, the Agency s staff participated to the events held in order to promote SAPARD Programme, as follows: At the central headquarters 14 events/ work meetings/ presentations; Regional Office 1 North East Iaşi 6 events; Regional Office 2 South - East Constanţa - 3 events; Regional Office 3 South - Muntenia Târgovişte - 8 events; Regional Office 4 South - Vest Oltenia Craiova 19 events; Regional Office 5 West Timişoara 19 events; Regional Office 6 North West Satu Mare 13 events; Regional Office 7 Center Alba Iulia 9 events; Regional Office 8 Bucharest Ilfov 9 events. Within all these events the assistance regarding the access to the funds was assured and informative brochures, guides and posters were distributed. At the same time, starting with December 2002 the Promotion Communication Unit began drawing up a monthly bulletin in order to inform the people interested on SAPARD Programme In order to assure the transparency of SAPARD Agency s activity and implementation stage, at the central headquarters (since 2001) an information desks functioned, where the experts within the Promotion Communication Unit gave information and promotional materials to the potential beneficiaries. An important part in SAPARD Programme s promotion and in the distribution of information in the territory was played by NACA, who distributed the promotional materials and the Applicant s Guide. NACA s involvement in giving consultancy to the potential beneficiaries grew once with Measures 3.1 Investments in Agricultural Holdings and 3.4 Development and diversification of economic activities, providing for multiple activities and alternative incomes launch. The programme s advertising was developed by information through media, as follows: the organization of a press conference on February 5 th 2003, in order to communicate the status of the activities related to the submission, evaluation and selection of the projects submitted during the monthly sessions; the organization of a press conference on February 18 th and 19 th 2003 in order to promote the Programme following the conclusion of the financing contracts for the projects submitted in August 2002 sessions on both measures. At the same time, starting with February, SAPARD Agency transmitted weekly press releases to the media regarding SAPARD Programme s implementation stage for a correct promotion of the Programme. 81

82 Moreover, at both national and regional levels, SAPARD Programme s promotion strategy was implemented with the help of the media, by giving interviews, publishing series of articles in the specialized newspapers. Thus, the agency s representatives, including ROISP representatives gave 59 interviews in the written media, had 17 TV broadcasts and 14 radio interviews. During this period of time, the Agency s staff participated to the events held in order to promote SAPARD Programme, as follows: At the central headquarters 18 events/ work meetings/ presentations; Regional Office 1 North - East Iaşi 8 events; Regional Office 2 South East Constanţa 15 events; Regional Office 3 South Muntenia Târgovişte 10 events; Regional Office 4 South - West Oltenia Craiova 6 events; Regional Office 5 West Timişoara 16 events; Regional Office 6 North West Satu Mare 15 events; Regional Office 7 Center Alba Iulia 12 events; Regional Office 8 Bucharest Ilfov 7 events. SAPARD Agency staff permanently updated the official website which included useful information for the potential beneficiaries, assuring at the same time the transparency by posting the most frequent questions together with their answers The Promotion, Communication and Mass-Media Relations Directorate within SAPARD Agency was set up on March 31 st 2004 aiming at constantly promoting SAPARD Programme through the media and directly to the potential beneficiaries of the Programme. The directorate was structured in two units: Promotion Communication, including a head of unit and 3 experts and the Mass-Media Relations, including a head of unit and 3 experts. The importance and efficiency of the promotion department was mirrored by the informing and encouraging the potential beneficiaries to apply for the European funds for agriculture and rural development. The Promotion, Communication and Mass-Media Relations Directorate had a contribution of approximately 20% to this process - a significant share for the implementation of SAPARD Programme in Romania according to the estimates made in the reports subsequently drawn up. The activities related to the information of the potential beneficiaries and of the people interested by SAPARD Programme (media, consultancy companies, agriculture and agrofood institutions and bodies) continued during 2004 by giving information at the headquarters, by written communication or by telephone. At the same time, weekly press releases on the SAPARD Programme implementation stage were transmitted to the media, in order to correctly promote the programme. The information included in the advertising brochures and on SAPARD Agency s website was updated. Through the Information Campaign implemented under Measure 4.2 Technical Assistance SAPARD Programme was promoted, in addition to the current promotion activity. Thus, this campaign assured the adverting of SAPARD Programme by media articles (newspapers, magazines, specialized publications), by making a 30 seconds advertising spot and broadcasting it on national television stations, by producing a 10 minutes 82

83 video material to be presented within the press conferences, seminars and different TV shows. At the same time, the representatives of the Agency and ROISP s management gave over 50 interviews in specialized shows and magazines. On the investment Measures 1.1 and 2.1, approximately 2,000 posters, 500 sets of seven Romanian language leaflets and 150 sets of English language leaflets, around 2,700 guides on Measure 1.1 in Romanian language and 300 on Measure 2.1, also in Romanian language, were distributed. Through NACA, the followings were printed and distributed: on Measure ,000 leaflets (re-printed series), on Measure ,000 leaflets and 20,000 copies of the Applicant s Guide, on Measure ,000 leaflets and 20,000 copies of the Applicant s Guide, on measure ,000 leaflets. At the same time, under Measure ,000 posters, 6,000 SAPARD brochures (closed A5 format, 60 pages), 8,000 copies of the Applicant s Guide on Measures 3.1 and 3.4, 4,000 copies on each measure, were edited. The Promotion Communication Unit continued to draw up the monthly bulletin for informing the people interested on accessing SAPARD Programme. For supporting SAPARD Programme s promotion and in order to assure the equality of chances in accessing the European funds, a special attention was given to the participation to different events (seminars, symposiums, fairs, and scientific sessions). The representatives of SAPARD Agency s central structure and of ROISP participated to over 120 such events. SAPARD Programme s communication and promotion activity consisted in the distribution of the information regarding the conditions for accessing the measures financed under the Programme, as follows: the organization of a national press conference and 7 regional conferences for promoting the programme, having around 500 participants. 700 copies of the Applicant s Guide, 1,000 leaflets and 700 brochures were distributed within these conferences. the elaboration and distribution of the brochure How to obtain non-reimbursable funds for an European agriculture 6,000 copies; the implementation of two Programme s promotion campaigns, in collaboration with CENTROCOOP and the Chamber of Commerce and Industry of Romania and Bucharest (CCIRB). The promotion campaign was organized in collaboration with CENTROCOOP and was implemented at national level. In each region a meeting was held with the handcraft companies, the potential beneficiaries of Measure 3.4 under SAPARD Programme, having a total of 250 participants. In collaboration with CCIRB, the SAPARD Agency established the Information Plan for the potential beneficiaries through the county branches of CCIRB. The activities work meetings and regional conferences were planned to be carried out starting with August 2004, thus assuring continuity until the end of SAPARD Programme; the implementation of SAPARD 2004 campaign, in collaboration with the Directorates for Agriculture and Rural Development within the Ministry of Agriculture, Forests and Rural Development. During this campaign 40 county teams 83

84 including 4 experts within the institutions involved in the promotion campaign travelled in 1,500 communes in all counties of Romania. 30,000 people received informative materials as well as information regarding the programme s general framework and on the manner to access SAPARD funds.; the organization of press conferences and issuing press releases, activities having as a result the increase of the positive perception of SAPARD Programme in the media from 30% to 85% in At the same time, during 2004 the national SAPARD Programme promotion conference was held in Bucharest on February 17 th 2004, and 5 campaigns were held at regional level in Constanta (February 20 th ), Timişoara (February 24 th ), Craiova (February 26 th ), Târgovişte (March 2 nd ), Alba Iulia (March 4 th ), Satu Mare (March 11 th ) and Iasi (March 16 th ) In 2005 the Promotion Communication Unit offered information to 7,200 beneficiaries by direct discussions, by phone or by mail and letters. Monthly share of those who demanded information was about 600 people - an average of 30 Requests daily. Also, at regional level, the monthly share of those who demanded information was about 56-7 Requests per each regional Center - which represent about 672 Requests during 12 months. Also, in 2005, 160,000 informative materials have been distributed, out of which: Applicant s Guide - 85,000 unit; Leaflets - 65,000 unit; Brochures 5,000 pieces; Posters - 5,000 pieces. Promoting, Communication and Mass Media Relations Directorate drawn up the Applicant s Guide, consolidated version for Measures 1.1, 3.1 and 3.4, with significant modifications which aims at understanding the SAPARD Programme. In the first quarter of 2005, 8,000 Applicant s Guides have been distributed to Regional Centers, Applicants and institutions involved in the implementation of the SAPARD Programme, as follows: for Measure 1.1 (2,000 pieces), for Measure 3.1 (3,000 pieces) and Measure 3.4 (3,000 pieces). At the same time, the Promoting, Communication and Mass Media Relations Directorate assured the implementation of the promotion and advertising campaign financed under Measure 4.2 of the SAPARD Programme and carried out by Mercury Promotions. The project was implemented during a period of 9 months, starting with March 17 th, 2005 and was structured in three main components, such as: Component 1 Setting up and functioning of SAPARD Infocenters; Component 2 Mass media campaign; Component 3 Creation and dissemination of promotional and informative materials. By Component 1 of the project, SAPARD InfoCenters, the following activities were carried out: Setting up SAPARD Infocenters with the following results: 7 SAPARD InfoCenters set up and fully equipped; Recruitment of 21 assistants for Infocenters; local training for 21 Infocenters assistants; learning- by- doing courses for assistants of the Regional Centres; extra-training for assistants made by key - experts within the Infocenters; Assistant s assessment. 84

85 The caravan with the following results: selection and training of 18 promoters; assessment of 14 promoters; 1,012 localities visited and organized presentations (125,000 kilometres covered); 23,307 potential beneficiaries informed during the caravan s meetings; dissemination of leaflets, brochures, Applicant Guide and other promotional materials; filling in the preliminary assessment sheets. Consultancy and information activities with the following results: 42,209 persons informed and advised by the InfoCenters, Agency s staff and informing Caravan on the investment measures financed under SAPARD Programme: 38,675 leaflets distributed to the potential beneficiaries (and by Caravan); 77 activities of Mobile Infocenters (2,447 potential informed beneficiaries); 103 specific exhibitions (fairs and exhibitions) organized for SAPARD Programme s promotion, 5,695 potential beneficiaries being directly informed; brochures and other promotional materials distributed to potential beneficiaries; 4,200 potential beneficiaries informed by the Sending Letters Campaign (I + II); 4,856 preliminary assessment fiches filled in; 12,379 contacts introduced in the database with SAPARD Programme potential beneficiaries. The second component of the project, mass-media campaign, involved the following activities: The relationship with mass media with the following results: press conference organized at SAPARD Agency s headquarter when the caravan was launched; 7 press conferences organized when the Infocenters were launched, local media campaign; articles published in various local newspapers, local radio interviews given by the coordinators and assistants; interview on Hungarian televisions channel Duna TV, 7 journalists of central media took part at the Caravan s meetings. Developing the creative concept of the campaign with the following results: carrying out and implementing the creative concept of the campaign ( If you know, you have ), including the graphics for all components of the campaign; carrying out and approving the Key visual for campaign and project as well as the SAPARD logo, implementing by declining the creative concept for newspapers, radio and TV. Campaign in print media with the following results: creating 3 advertisements for print media; publishing 61 model releases; publishing 49 informative presentation of the investments carried out under SAPARD; publishing 9 calls for projects to be financed under SAPARD; we estimate that about 230,000 persons were informed by materials published in print media; these persons viewed the model at least 3 times (optimal exposure both for obtaining and assimilating information). Radio Campaign with the following results: creating 3 radio spots of 30 seconds; promotion of radio spot 144 broadcasts. TV campaign with the following results: creating 3 TV spots for audio visual media, promoting the TV spot by 268 broadcasts; broadcasting 10 SAPARD coverages carried out by Promotion, Communication and Mass Media Relations Directorate s staff in order to present the investments carried out with SAPARD funds; we estimate that 469,000 persons were informed by this broadcasting; these persons viewed the 85

86 spot at least 3 times, we estimate that about 440,000 persons were informed by the reports broadcasts; these persons viewed the reports at least once. Production of a video with the following results: a video documentary of 15 minutes on the SAPARD program for audio-video media, approx. 900 presentations of the video in meetings in the villages visited. The third Component of the project Creating and distributing promotional and informative materials, involved the following: Production of leaflets and posters with the following results: 200,000 leaflets produced and distributed, 15,000 posters produces and distributed. Production of brochure with the following results: 50,000 brochures SAPARD Guideline produced and distributed. Production of other promotional materials with the following results: 3 banners produced and delivered; 470 caps produced and delivered; 500 custom vests produced and delivered, 500 custom shirts produced and delivered, 500 custom bags produced and delivered, 502 badges produced and delivered; 6000 block notes produced and delivered; 6000 maps produced and delivered; 2000 custom briefcase produced and delivered. Carrying out the Applicant s Guidelines and related CDs: 67,000 applicant s guidelines produced and distributed; 30,000 related CDs produced and distributed. Publishing of notice of call for project: PCMMRD monthly drew up the notice of the call for projects that was submitted to the European Commission Delegation, the Regional Centers and the Directorates for Agriculture and Rural Development (DARD), to MAFRD and to Adevărul, România Liberă and Evenimentul Zilei newspapers. Promotion, Communication and Mass media Relations Directorate carried out the promotion of the SAPARD Programme by: press releases, press conferences, meetings with mass media, effective communication with the media. Communication with the media in 2005 was improved and aimed at maintaining good relations with the representatives of media channels (Rompres, Mediafax, Radio Romania News, Europa FM, BBC National TV, Reality TV, TVR 1, Prima TV, Truly, truly, Economic, Stock, Capital, Newspapers, The Economist, Evenimentul Zilei, Jurnalul National, Romania Libera, Ziarul Financiar). Starting with April 2005, the Fiche for supporting and preliminary assessing the SAPARD Programme applicants was introduced, in order to avoid situations in which the applicant received a certain information material (the Applicant Guide, brochures, leaflets, address, etc.) without receiving the necessary clarifications directly and illustrative. The supporting fiche was unitary applied to all institutions which offered information on SAPARD Programme (ROISP, DARD, COCA). Thus, 3,952 supporting fiches were filled in. The supporting fiches were monthly centralized at the SAPARD Agency, in order to assess the information provided, the number of applicants on each region, but also to set up a database with potential beneficiaries. 86

87 2006 The local authorities have been involved in the promotion of the SAPARD Programme and in the absorption of the SAPARD non-reimbursable funds available for the public investments. From this point of view, the SAPARD Agency which subsequently has became the Paying Agency for Rural Development and Fishery (PARDF) continued, in 2006, the information policy supported by the communication with the local authorities and with the decentralized structures of the central public institutions involved in the Programme s implementation. PARDF initiated and took part to the information sessions organized in the communes and the villages of counties assigned to the 8 Paying Regional Centres for Rural Development and Fishery (PRCRDF). By all these sessions, PARDF aimed at correctly informing on the financing opportunities, on the impact of the investments financed under SAPARD Programme in the rural area, but also presenting some information about the next post adhesion funds. Likewise, PARDF aimed at involving the local authorities by inviting them as auditors and lecturers. During the all meetings, informative and promotion materials were distributed to the participants (the Applicant s Guideline, leaflets, brochures, SAPARD Guideline, banners). The most important activities related the above mentioned consisted of the informing and vocational training seminars in order to access the European funds organized at national level with the local public authorities. The seminars were organized by Eurocom with the direct involvement of PARDF. From January up to December 2006, the Agency assured the distribution of the information during 6 seminars. In the same time, the PARDF s representatives took also part to the National Meeting regarding the possibilities to be financed under SAPARD, organized by Prefectures and County Councils. During 2006, the promotion of the SAPARD Programme allowed the efficiently distribution of the information regarding the available SAPARD funds and the possibility to access the Programme to about 290,000 potential beneficiaries (by informative and promotion activities, by drawing up informative materials). This fact has positively influenced the increase of the absorption of the SAPARD Programme. In this respect, the Paying Agency for Rural Development and Fishery took some promotion activities, such as: Informing the potential beneficiaries The experts of PARDF s central and regional level offered information to 9,988 potential beneficiaries by direct conversations, by phones, by e- mail and by letters. The monthly share of those who requested information on the nonreimbursable SAPARD funds is over 800 persons, 40 requests being daily recorded. During this period of time, the potential beneficiaries have been provided information, as follows: 5,811 natural persons, 4,177 legal persons. The direct communications had the highest share (7,683), followed by the s (1,807) and those in writing (498). Drawing up and distributing the informative materials At the same time, about 55,000 potential beneficiaries were informed by the distribution of 27,740 printed informative materials, out of which: the Applicant s Guideline (Measure 1.1, 1.3, 3,4) 5,790 pieces, Leaflets 5,950 pieces; Brochures 3,000 pieces, Banners 2,000 pieces. Also, PARDF drew up the consolidated version of the Applicant s Guideline for Measures 3.2, 3.3 and

88 In the second quarter of ,000 copies of Applicant s Guidelines were printed and distributed to the PARDF s Regional Centers, to the applicants and to the institutions involved in the implementation of the SAPARD Programme for Measure 3.2 (3,000 pieces), Measure 3.3 (3,000 pieces) and for Measure 3.5 (5,000 pieces). Publishing the call for projects PARDF drew up 11 call for projects during January November 2006 and submitted them to the newspapers Adevărul, România Liberă and Evenimentul Zilei and to the European Commission Delegation. Also, the calls were posted on and were made public by PARDF s regional structures. Taking part at the promotion and informing events PARDF took part and assured the representation of the SAPARD Programme by the Promotion, Communication and Mass Media Relations Directorate at the most important promoting and informing events. During these events, the Paying Agency for Rural Development and Fishery presented the opportunities offered by SAPARD, distributed informative materials and offered detailed information to the target public on the manner of obtaining the non-reimbursable funds. Advertising the SAPARD Programme - The Paying Agency for Rural Development and Fishery has given a particularly attention to this type of communication, ensuring the SAPARD Programme advertising, through: Press releases: the impact of this type of information has had the effect of maintaining the percentage of positive and neutral references at about 80% of the total broadcasts about SAPARD, with direct influence on the increase of the interest regarding the SAPARD Programme. Meetings organized with mass media During informing and presenting seminars were organized, including working visits, with representatives of the most important media channels. These meetings took place in Region 3 Targoviste (June 30th July 2nd, 2006), the second in Region 2 Constanta (September 1st 3rd, 2006). During these meetings several projects financed under the SAPARD Programme by financing Measures 1.1, 2.1, 3.1 and 3.4 were visited. One of the most important objectives of the media communication segment was to maintain a permanent communication with mass media by mediating the contact between these institutions and PARDF s management and by quickly and completely information of the journalists. The PARDF s numerous media broadcasts (about 290, with a weekly average of 7 broadcasts) have created a stable positive image of the SAPARD Programme During 2007, the promotion of the SAPARD Programme allowed the efficient distribution of information related to the SAPARD funds in the same time with those related to EAFRD, in order to allow the conceptual association of the two European programmes to about 250,000 potential beneficiaries (by information and promotion activities and by drawing up informative materials). This fact has positively influenced the opinion regarding SAPARD Programme and indirectly, regarding the European funds, as well as the interest ton the financing possibilities under post adhesion non reimbursable funds. In this respect, the Paying Agency for Rural Development and Fishery has undertaken many promotion activities, namely: 88

89 Informing the potential beneficiaries In 2007, the PARDF s experts from central, regional and county level offered information to about 65,532 potential beneficiaries through direct communications, by phone, by and by letters. The monthly share of those who have requested information about the non-reimbursable funds was over 5,400 persons, an average of 273 requests being daily recorded. During 2007, information have been offered to the potential beneficiaries, the direct phone calls (32,499) had the highest share and then the information provided directly to our headquarter (27,867), those on writing (3,145) and the electronic ones (2,021). The Paying Agency for Rural Development and Fishery continued to focus on this type of communication, assuring the promotion of the SAPARD Programme by the following activities: Press releases: 12 press releases were sent to media, a large majority of these press releases being used by media. The impact of this type of information had the effect of maintaining the percentage of positive references and neutral in about 80% out of the total broadcasts about SAPARD, with direct influence on the increasing of the interest for SAPARD Programme. The PARDF s numerous broadcasts (about 200 broadcasts in media with an weekly average of 10 broadcasts) have created a stable positive image of the SAPARD Programme. The positive presentations of the SAPARD Programme were also reflected in all the publications monitored during 2007 but also in all the TV and radio reports. The most broadcasts were reported in April 2007, namely 28 reports related to PARDF and SAPARD Programme. The following months with many broadcasts were March (25 reports) and January (19 reports). The promotion of the SAPARD Programme, carried out by PARDF managed to increase the public interest having as a result the numerous reports about SAPARD Programme and about the Paying Agency for Rural Development Taking into account that since the end of 2006 the accession to SAPARD funds was not possible due to the fact that the funds allocated for this program were finished, starting with 2008 PARDF ceased the promotion and information actions, as the performance of such actions was not justified from the financial and informational impact point of view. Thus, PARDF has not carried out informative materials related to the SAPARD Program, focusing only on the information regarding the accession of the National Rural Development Program (NRDP). The information on SAPARD Programme was limited to provide examples of success within the events to which PARDF s representatives participated, but also to provide information on the procurement procedures and the reimbursement of payments executed under SAPARD Programme. Starting with January 5 th, 2009, PARDF set up a TelVerde number phone in order to increase the degree of access to information and facilitate the drawing up and submission of the complaints regarding the implementation of the European funds for agriculture and rural development. TelVerde number phone can be accessed free of charge and appealed from any telephone network. Up to present, 16 complaints (all complaints have 89

90 been resolved as required by law) and other 500 calls for request specific information were recorded. Conclusions The main achievements of the Promotion Communication and Mass - Media Relations Directorate (Public Relations Directorate later) aimed at creating a positive image of the SAPARD Agency, in a rate of 84%. As a result of the positive references in the media, the number of applicants for information on SAPARD Programme has doubled starting with the period from 2004 to For example, if at the early of 2005 an average of 15 daily requests was recorded, in the second half of that year, the average was 30 requests. The informative materials and answers to requests have been drawn up in direct style, avoiding as much as possible the specific terms in order to facilitate the understanding of the SAPARD Programme. The PARDF s several media broadcasts - about 850 media broadcasts in a year, the weekly average being of 30 broadcasts as well as the participations in various fairs and promotional events have created a positive stable image of the SAPARD Programme. The average of the positive broadcasts related both to the Programme s image and to the Agency reflected in all the monitored publications (Adevărul, Cotidianul, Curentul, Curierul Naţional, Gândul, România Liberă, Evenimentul Zilei, Jurnalul Naţional, Ziua, Libertatea şi weekly newspaper Capital) and in all tv and radio broadcasters was of 65%, the neutral share of the image was 21% and the negative broadcasts were 14%. PARDF has successfully managed to attract the public interest by promoting the SAPARD Programme. Evidence in this sense is significant articles which focused on the SAPARD Programme, as well as the number of the projects submitted to be financed under SAPARD Programme Data to demonstrate that Community funds have not replaced funding already available According to the provisions of art. 3 Complementarity and technical assistance from the Council Regulation (EC). 1268/1999 on Community support for pre-accession measures for agriculture and rural development in the applicant countries of central and Eastern Europe in the pre-accession period, "Community action complements national actions appropriate or contribute to them." To these provisions, the Romanian Government promotes a policy to support the agricultural producers. In order to support the agricultural producers within the vegetal and animal sector, on the basis of the financial support programmes promoted by the Ministry of Agriculture and Rural Development, of the budget approved for , the following amounts have been allocated: 730,120,000 lei for year ,217,560,000 lei for year ,027,070,000 lei for year ,128,852,251 lei for year ,826,043,041 lei for year ,743,785,944 lei for year

91 3,127,090,019 lei for year ,543,791,885 lei for year 2009 During Romania benefited from production financial support rather than from the state budget. Of the budget for 2009, in order to support the agricultural producers within the vegetal and animal sector on the basis of the financial support programmes promoted by the Ministry of Agriculture and Rural Development has been allocated the amount of 2,543,791,885 lei, thus: A. The vegetal sector: 756,329,584 lei 77,437,936 lei, representing the financial support granted to agricultural producers according to the scheme De minimis aid for crop establishment in autumn 2008, (Government Decision no.1153/2008) amounting 200 lei/ha for an area of minimum 1 ha up to maximum 120 ha per exploatation (wheat - 65,964,446 lei, rapeseed- 2,706,902 lei, barley/ two-row barley-6,490,019 lei, other crops -2,588,404 lei); 24,646,810 lei, representing the financial support for purchasing diesel used to perform mechanised works for setting up agricultural crops in autumn of 2008 (Government Decision no.277/2008) amounting 1leu/l; 309,861,976 lei, representing the public funds granted to agricultural producers according to the Law of agricultural credit, representing the allowance granted to the volume of credits hired and reimbursed to the financing banks; 55,427,814 lei, representing the financial support granted to agricultural producers within the vegetal sector in the year 2008 (Government Decision no. 570/2008), of which: - Implementing the European System of Good Agricultural Practice (EUREPGAP) in vegetable and fruits sector (up to 10,000 lei/contract) 82,902 lei; - Mushrooms cultures produced and harvested from conditioned spaces (800 lei/t) 1,315,616 lei; - Vegetables produced and harvested from heated greenhouses (600 lei/t) 12,187,734 lei; - Vegetables and fruits to be industrially processed (gherkin pickles 150 lei/t, podded beans 350 lei/t, green podded pease 300 lei/t, pepper 300 lei/t, tomatoes 350 lei/t, apples 160 lei/t, grapes for consumption 300 lei/t, peaches 300 lei/t, plumes 200 lei/t) 16,920,308 lei; - Purchasing encasements and other material necessary for packing vegetables and fruits (up to 4 lei/piece) 2,102,437 lei; - The wine sector (authorising vineyards for wines with controlled designation of origin 10 lei/ha, certification and marking of wines with controlled designation of origin 12 lei/hl, the application of plant protection treatments in viticulture plantations bearing grapes 500 lei/ha) 4,020,675 lei; - Potatoes production (150 lei/t) 2,836,744 lei; - medicinal and aromatic herbs sector (for crops using seeds 600 lei/t, for crops using the entire plant 800 lei/t) 3,695,632 lei; - Recognized operating producers groups (400 lei/group) 200,000 lei; 91

92 - Thermic and electric energy, crops within solariums and heated greenhouse (35% of the invoice amount) 11,002,149 lei; - Storing agricultural products (apples) 803,617 lei; - Storing potatoes 259,999 lei. 32,480,550 lei, representing the financial support granted to agricultural producers within the vegetal sector in 2009 (Government Decision no. 693/2009), of which: - Mushrooms cultures produced and harvested from conditioned spaces (800 lei/t) 3,006,633 lei; - Vegetables produced and harvested from heated greenhouses (600 lei/t) - 15,658,483 lei; - Thermic and electric energy, crops within solariums and heated greenhouse (35% of the invoice amount) 90,779 lei; - Thermic and electric energy, crops within solariums and heated greenhouse (35% of the invoice amount) 6,099,438 lei; - Vegetables and fruits to be industrially processed (gherkin pickles 150 lei/t, podded beans 350 lei/t, green podded pease 300 lei/t, pepper 300 lei/t, tomatoes 350 lei/t, apples 160 lei/t, grapes for consumption 300 lei/t, peaches 300 lei/t, plumes 200 lei/t, sweet cherries 200lei/t, cherries 200 lei/t ) 944,918 lei; - Purchasing encasements and other material necessary for packing vegetables and fruits (up to 4 lei/piece) 372,333 lei; - medicinal and aromatic herbs sector (for crops using seeds 600 lei/t, for crops using the entire plant 800 lei/t) - 1,554,730 lei; - flowers, dendrological and ornamental plants (in the out 5,000 lei/ha, for crops into greenhouse 10,000 lei/ha) 200,000 lei; - The wine sector (authorising vineyards for wines with controlled designation of origin 10 lei/ha, certification and marking of wines with controlled designation of origin 12 lei/hl, the application of plant protection treatments in viticulture plantations bearing grapes 500 lei/ha) 4,553,236 lei. 18,144,990 lei, representing the financial support for seeds or seeding material used for seeding or planting in the campaigns during autumn of 2008 and spring of 2009 (Government Decision no. 1343/2008), of which: - 224,304 lei tree growing seeding material; - 9,541,755 lei vineyard seeding material; - 8,363,393 lei potatoes; - 15,538 lei fruit-growing trees; 24,564,804 lei, representing the financial support, amounting 300 lei/t, granted to the agricultural producers for the soy production performed in 2008 (Gov. Decision no. 1387/2008); 37,326,750 lei, representing the financial support granted to agricultural producers for sugar beet, rice and performed in 2008 (Gov. Decision no. 1380/2008), of which: - 20,265,000 lei for sugar beet (aid amount is of 30 lei/t); - 17,025,000 lei for rice (aid amount is of 500 lei/t); - 36,750 lei for flax (aid amount is of 250 lei/t). 92

93 41,204,198 lei, representing the de minimis aid for the vegetal fruit sector and organic farming, (Gov. Decision no. 1195/2008); 66,121,104 lei, representing the financial support for purchasing diesel used to perform mechanised works for setting up agricultural crops in autumn 2009 (Gov. Decision no 1626/2008) amounting 1 leu/l; 832,500 lei, representing the support of agricultural associations in view to participate to organizations established at the EU level (Gov. Decision no. 569/2009) corresponding to the expense account submitted by DARD Bucharest to the ministry on July 7 th 2009; 2,341,277 lei, representing the financial support for losses caused by late spring frost in 2007 in tree growing sector (Gov. Emergency Ordinance no. 41/2008); 11,575,198 lei, representing compensations granted to agricultural producers who have suffered damages due to unfavourable weather conditions (floods) during July - August 2008, for crops seeded in autumn of 2007 and spring of 2008, (Gov. Decision. no. 1550/2008); 50,295,478 lei, representing life annuity corresponding to year 2008, granted according to the provisions of title XI from Law no. 247/2005; 3,400,000 lei, have been allocated to the Rural Credit Guarantee Fund in order to manage and guarantee the certificate of deposit, according to provisions of Government Ordinance no.7/2009 on setting up of the temporary support system for development of business within the seeds for consumption sector; 668,199 lei, representing fostering the investments in agriculture, according to the provisions of Law no. 231/2005. B. Animal husbandry sector: 1,587,433,739 lei 410,210,067 lei, representing national complements to direct payments within the animal husbandry sector in 2008 (Gov. Decision no. 1230/2008), granted differentially on species, 495 lei/head bovine and 43,9 lei/head sheep and goats, of which : - 202,842,905 lei bovine; - 207,367,162 lei sheep and goats. 225,574,422 lei, representing the financial support granted to agricultural producers within the animal husbandry in 2008 (Gov. Decision no. 3/2008), of which: - Improving the quality of pork meat production by supporting the implementation of carcass classification system carcass class (120 lei/carcass) 73,323,582 lei; - Improving the quality of pork meat production by supporting the implementation of carcass classification system carcass class U (100 lei/ carcass) 6,379,050 lei; 93

94 - Improving the quality of bovine meat by supporting the implementation of carcass classification system (100 lei/ carcass) 1,103,450 lei; - Improving the quality and production parameters regarding the increase of effectives by supporting the sow production from commercial holdings (150 lei/head) 1,849,275 lei; - Improving the quality and production parameters regarding the increase of effectives by supporting the broiler poultry production (1,6 lei/head) 69,713,917 lei; - Improving the quality and production parameters regarding the increase of effectives by supporting the eggs for consumption production (0,05 lei/piece) 19,766,982 lei; - Improving the quality of honey production by supporting bee families (20 lei/bee family) 4,285,061 lei; - Improving the quality and hygiene of cow milk (0,3 lei/kg) 49,127,792 lei; - Acquisitions containers for seminal material conservation 25,313 lei. 1,633,046 lei, representing the support in 2008 of the rams and/or buck for reproduction procurement, (Gov. Decision no. 1099/2008) amounting 60% of the procurement with VAT included, but not more than lei/ram or buck; 3,260,305 lei, representing compensations for animals slaughtered to prevent and combat Epizooties, (Gov. Decision no. 1415/2004) established at the replacement value and market price of the animal slaughtered; 34,576,005 lei, representing the direct support granted for the neutralization of animal waste (Gov. Decision no. 1211/2005); 542,857,534 lei, representing the financial support granted to agricultural producers within the animal husbandry sector in 2009 (Gov. Decision no. 1627/2008), for the following activities: - Improving the quality of pork meat production by supporting the implementation of carcass classification system carcass class E (120 lei/carcass) 163,655,760 lei; - Improving the quality of pork meat production by supporting the implementation of carcass classification system carcass class U (100 lei/carcass) 12,815,200 lei; - Improving the quality of bovine meat by supporting the implementation of carcass classification system (100 lei/ carcass) (100 lei/carcass) 1,918,100 lei; - Improving the quality and production parameters regarding the increase of effectives by supporting the sow production from commercial holdings (150 lei/cap) 4,641,600 lei; - Improving the quality and production parameters regarding the increase of effectives by supporting the broiler poultry (1,6 lei/head) 189,400,995 lei; - Improving the quality and production parameters regarding the increase of effectives by supporting the eggs for consumption production (0,05 lei/piece) 39,998,755 lei; - Improving the quality of honey production by supporting bee families (20 lei/bee families) 10,970,499 lei; - Improving the quality and hygiene of cow milk (0,3 lei/kg) 119,886,422 lei; 94

95 - Performing the official control of sheep performance 58,109 lei; - Acquisitions containers for seminal material conservation 399,613 lei; - Setting up and managing genealogical sheep books 35,502 lei. 1,928,053 lei, representing the financial support granted for the acquisition in 2008 of frozen seminal material from bulls certified and officially authorized used in the artificial insemination; 3,748,525 lei, representing the financial support granted for the acquisition in 2009 of frozen seminal material from bulls certified and officially authorized used in the artificial insemination 274,082 lei, representing finance from the state budget of some measures for conservation and use of animal genetic resources in critical condition, in danger and vulnerable, for 2008; 16,000 lei, representing support in 2009 of males from sheep/goat species for reproduction, (Gov. Decision. no. 700/2009) amounting 50% of the acquisition price with V.A.T included, but not more than 1000 lei/head; 363,355,700 lei, representing national complements to direct payments within the animal husbandry sector for bovines (Gov. Decision no. 1252/2009) and sheep in 2009 (Gov. Decision no. 1261/2009), respectively first instalment/block/portion for bovine species 200 lei/head (267,765,200 lei) and sheep/goats 15 lei/head (95,590,500 lei). C. The land improvements sector: 87,547,477 lei 68,184,842 lei, representing the state insurance for infrastructure operating of land improvements in 2009 (Gov. Decision no. 269/2009), under the Organizations of Irrigation Water Users (OIWU) management; 19,362,635 lei, representing the state insurance for infrastructure operating of land improvements in 2008 (Gov. Decision no. 420/2008), under OIWU management. D. The SAPARD Programme 112,481,085 lei 112,481,085 lei, representing non-reimbursable co-financing from the state budget for investments projects within the SAPARD Programme (Romanian SAPARD) (Gov. Decision no. 59/2006). 4.8 Activities performed in order to solve the problems identified in the implementation of SAPARD Programme Actions to ensure the necessary personnel Based on the provisions of the Multi-Annual Financing Agreement - Law no. 316/2001, was established the legal framework for the functioning of the SAPARD Agency. The aim of the Agency was the technical and financial implementation of SAPARD Programme. 95

96 MAFA s requirements related to the organization and functioning of the Agency were put into practice setting up SAPARD Agency based on GEO no. 142/ 2000, approved by Law no. 319/2001. The characteristics of SAPARD Agency reflected its two functions, implementation and payment, whose achievement was possible by the organizational structure of the Agency. During 2001 February 2006 the Agency was structured on two organizational levels: central and regional (the regional level consisted of 8 regional offices) and reflected the separation of the following functions: - Implementation responsibility of the deputy general director on technical implementation, who coordinated three directorates (Program Coordination, Selection Contracting, Technical Assistance and Vocational Training) and also the units involved in Programme s implementation at the level of Regional Offices. - Payment - responsibility of the deputy general director project payments who coordinated two directorates (project Payment and Economic) and also the units involved in the pre-authorization process at the level of Regional Offices. - The general director of the Agency had under his coordination three directorates (Human Resources, Internal audit and control and Antifraud) an also the IT Unit. The authority at each level specified above is represented by directors, who are helped in carrying out their duties by the heads of units. The approved number of positions for was of 145, distributed based on the order issued by the Minister of Agriculture in 73 positions at central level and 72 positions at regional level, so as the supervision and the 4-eye verification principle should be observed within each organization structure according to art , Annex I Law no. 316/2001. At regional level 8 positions were given for the two services 5 positions within the programme implementation unit and 3 positions within payments pre-authorization unit. According to the number of measures accredited based on the national Plan for Agriculture and Rural Development, in 2003 the number of approved positions was of 186. In 2004 the Technical Delegated Body within MPWTH representing 50 positions became part of SAPARD Agency. 10 out of the 50 positions were distributed at central level creating the Technical Verification Unit which verified the payment claims for measure 2.1, the rest of 40 positions were distributed to the 8 Regional Centres where Technical Verification Units were created. During 2004 the number of positions was supplemented by 80, thus the number of approved positions being of 316. In 2005 the supplementation of position by 160 was approved and the number of position for the entire institution reached 476 at both central and regional levels. In 2006 in order to strengthen the organizational structure of SAPARD Agency, according to GEO no. 1/2006, the number of positions was supplemented by 400. Further on, based on GEO 13/ 2006 on setting up, organization and functioning of the Paying Agency for Rural Development and Fishery by reorganizing SAPARD Agency, 386 experts of the technical delegated bodies within the General Directorates for Agriculture became part of PARDF. Thus, in March 2006 the structure of the Agency included: central, regional and county levels and had a number of 1,262 positions. 96

97 In order to observe the accreditation criteria according to EC Regulation no. 885/2006 and to fulfil appropriately the attributions regarding the payment of SAPARD projects, during September 2006 December 2007 the vacant positions were reallocated between the three levels of the Agency, according to the necessity on each level. (See the table below). The reallocation aimed at strengthening the Technical Verification Units at regional level and the Ex-post Control Units, Monitoring and Payments Authorization Units at central level. In order to prepare the flow regarding the submission of EAFRD projects, the Own Preventive Financial Control Unit and Payments Accounting Unit were strengthened by including the experts with such attributions from the Payments Authorization Units at regional levels to the two central units, in order to ensure the segregation of duties according to EC Regulation no. 885/2006. The consolidation of these Units during 2008 had been done so as not to affect the activity of the Payments Authorization Unit as regards the handling of the payment claims related to the SAPARD Programme, taking into account that the SAPARD Programme was approaching the end of the implementation period. In 2008 the number of positions within the Agency was of 1,613, supplemented with 350 positions as compared to the number of positions approved in 2007 according to the provisions of GEO no. 65/2008. In 2009 the number of approved positions is 1,613. Number of personnel during Table 4.1. Year No. of approved Occupancy rate/ no. of positions filled in positions No. of positions supplemented out of which: 73 at central level 72 at regional level out of which: 103 at central level 83 positions at regional level out of which: 150 at central level 166 at regional level 173 positions filled in 93% occupancy rate 300 positions filled in 94% occupancy rate 41 positions as compared to the number approved in 2002, distributed as follows: At central level 30 At regional level 11 positions for the preauthorization of payments units 130 positions as compared to the number approved in 2003, distributed as follows: 80 vacancies received from MAFWE 50 positions representing the taking over of the staff with SAPARD duties from MTBT The distribution of positions: At central level 47 97

98 out of which: 197 at central level 279 at regional level ,262 out of which: 213 at central level 327 at regional level 722 at county level The distribution of positions during March August 2006 was the following: At central level 219 At regional level 324 At county level 719. The distribution of positions during September December 2006 was the following: At central level At regional Level At county level ,262 out of which: At central level 259 At regional level 323 At county level out of which: At central level 323 At regional level 451 At county level out of which: At central level positions filled in 88% occupancy rate 1,184 positions filled in 94% occupancy rate 1,215 positions filled in 96% occupancy rate 1,461 positions filled in 88% occupancy rate 1,437 positions filled in 86% occupancy rate At regional level positions as compared to the number approved in 2004, distributed as follows: At central level 47 At regional level 113 During 2006 by taking over 386 experts from the technical delegated bodies within the General Directorates for Agriculture, the number of staff within the Agency was supplemented. 400 positions remained vacant as follows: At central level 16 At regional level 48 At county level vacancies 351 vacancies 98

99 At regional level 440 At county level 848 Name of the Institution SAPARD Agency Legal basis for setting up the institution GEO no.142/2000 on the setting up, organization and functioning of SAPARD Agency for the technical and financial implementation of the special preaccession programme for agriculture and rural development LAW no. 309 / 2001 for the approval of the GEO no. 142/2000 on the setting up, organization and functioning of SAPARD Agency for the technical and financial implementation of the special preaccession programme for agriculture and rural development EO no. 11/2004 establishing reorganization No. of employees since setting up till present During employees In employees In employees In employees Subordinat ed units 8 Regional Offices Orders issued b the minister to modify the organizational structure of the institution - Order no. 203/ ; - Order no. 170/ ; - Order no. 332/ ; - Order no. 352/ ; - Order no. 446/ ; - Order no. 215/ ; - Order no. 522/ ; - Order no. 933/ ; - Order no. 141/ ; - Order no. 124/ ; - Order no. 160/ ; Order no. 179/ ; Order no. 180/ issued by the minister of agriculture, forests and rural development approved both the organizational structure and the organization and functioning regulation Order 505/ ; no. Table 4.2 Orders issued b the minister to approve the duties of the institution Order no. 171/ ; Order no. 261/ ; Order no. 191/ ; Order no. 161/ ; Order no. 804/ ; Order no. 539/

100 Paying Agency for Rural Development and Fishery measures within the central public administration GEO no.13/2006 for the setting up, organization and functioning of the Paying Agency for Rural Development and Fishery by reorganizing SAPARD Agency Law no. 198/2006 Approving GEO no. 13/2006 for the setting up, organization and functioning of the Paying Agency for Rural Development and Fishery by reorganizing SAPARD Agency During employees 8 Paying Regional Centers for Rural Developmen t and Fishery 42 paying County Offices for Rural Developmen t and Fishery Order 776/ ; Order 137/ ; Order 669/ ; Order 152/ ; Order 123/ no. no. no. no. no. GEO no. 65/2008 for the modification and completion of the GEO no. 13/2006 for the setting up, organization and functioning of the Paying Agency for Rural Development and Fishery by reorganizing SAPARD Agency and for establishing measures to make In employees In employees 100

101 PIAA s activity more efficient Activities to train the personnel The training of SAPARD Agency s staff took place based on the training plans from 2002 and Thus, training courses for specialized people having direct attributions in the implementation of the new measures (1.1, 2.1, 3.1, 3.4 and 4.1), as well as training sessions for the staff involved in human resources, legal assistance, technical assistance, IT and internal audit. The financing of these training courses was insured from the budget of SAPARD Agency and from the following twining projects: - PHARE 2000 RO The agricultural and rural policy at national level ; - PHARE 2001 RO ; - PHARE 2000 RO Special attention (training workshops, training on the job) was given to the staff of the Regional Offices directly involved in the implementation of the Programme and a number of 81 experts were trained Based on SAPARD Agency s training plan, training sessions on accredited measures 1.1, 2.1, 3.1, 3.4, 4.1 were organized for the Agency s staff. Through PHARE project RO 001/ , training sessions were organized in order to enhance the professional competence of the staff involved in the methodology for the evaluation, selection, contracting, public procurement authorization, debt recovery payment s execution technical control, financial control and antifraud processes. The above-mentioned project included six training modules directed to 174 people holding either leadership or execution positions within the Agency at both central and regional levels new employees took part in a special on the job training programme and were supervised by their immediate superiors people holding leadership or execution in the implementation, control and internal audit directorates took part in international training sessions on the manner of implementing the structural funds PARDF s professional training aimed at improving the professional competences according to the requirements of the job and to PARDF s strategy regarding the development in the following fields: IT, rural development, legislation, integration, management, communication and accounting. The number of employees included in the training programme was of PARDF s professional training aimed at improving the professional competences according to the requirements of the job and to PARDF s strategy regarding the development in the following fields: IT security, measures of rural development regarding the measures of rural development, evaluation, contracting, authorization, payments accounting, debt recovery, 101

102 legislation, management and communication. The number of employees included in the training programme was of PARDF s professional training aimed at improving the professional competences according to the requirements of the job and to PARDF s strategy regarding the development in the following fields: IT security, measures of rural development regarding the measures of rural development, evaluation, contracting, authorization, payments accounting, debt recovery, legislation, management and communication. The number of employees included in the training programme was of IT security, measures of rural development regarding the measures of rural development, evaluation, contracting, payments authorization and accounting, debt recovery, legislation, management, communication and the unitary application of the procedures related to SAPARD and EAFRD procedures. The number of employees included in the training programme was of 1,400. The staff having SAPARD duties was trained within the Agency, while the staff having EAFRD duties was trained both within the Agency (on applying the procedures) and also under: Twinning project RO2006/IB/AG/02 "organizing proper structures able to absorb the post accession European funds for rural development ; 2005 PHARE Programme Training the staff within the institutions involved in the implementation of National Rural Development Programme, in the Operational Programme for Fisheries, as well as of the potential beneficiaries. RO 2004/ PHARE Programme "Training for the Managing Authority s personnel and the staff of the other institutions involved in EFARD s and EFF s programming and implementation process Measures regarding the legal framework during SAPARD implementation period In order to assure the proper framework for SAPARD Programme s implementation, and for accelerate the funds absorption degree, the following normative documents were issued: 2000 Emergency Ordinance no. 142 on September 21 st 2000 on the setting up, organizing and functioning of SAPARD Agency for the technical and financial implementation of the special pre-accession instrument for agriculture and rural development; 2001 Law no. 309 on June 7 th 2001 for approving the Government Emergency Ordinance no. 142/2000 on the setting up, organizing and functioning of SAPARD Agency for the technical and financial implementation of the special pre-accession instrument for agriculture and rural development; Emergency Ordinance no. 140 on October 25 th 2001 for the modification of article 1 of the Government Emergency Ordinance no. 142/2000 on the setting up, organizing and functioning of SAPARD Agency for the technical and financial implementation of the special pre-accession instrument for agriculture and rural development ; 102

103 Law no. 130 on March 18 th 2002 on the approval of the Government Emergency Ordinance no. 140 on October 25 th 2001 for the modification of article 1 of the Government Emergency Ordinance no. 142/2000 on the setting up, organizing and functioning of SAPARD Agency for the technical and financial implementation of the special pre-accession instrument for agriculture and rural development; Law no. 240 on June 6 th 2003 for approving the Government Emergency Ordinance no. 14/2003 on the modification of the Government Emergency Ordinance no. 142/2000 on the setting up, organizing and functioning of SAPARD Agency for the technical and financial implementation of the special pre-accession instrument for agriculture and rural development; Emergency Ordinance no. 14 on November 13 th 2003 on the modification of the Government Emergency Ordinance no. 142/2000 on the setting up, organizing and functioning of SAPARD Agency for the technical and financial implementation of the special pre-accession instrument for agriculture and rural development; 2004 Emergency Ordinance no. 116 on November 24 th 2004 for the modification of article 5 of the Government Emergency Ordinance no. 142/2000 on the setting up, organizing and functioning of SAPARD Agency for the technical and financial implementation of the special pre-accession instrument for agriculture and rural development; Law no. 490 on November 10 th 2004 regarding the financial stimulation of the staff implementing community funds; Government Decision no on July 29 th 2004 for the modification and completion of the Government Decision no. 497/2004 on establishing the institutional framework for the coordination, implementation and management of the structural funds; Emergency Ordinance no. 11 on March 23 rd 2004 on establishing certain reorganization measures within the public central administration; Law no. 165 on May 14 th 2004 for the modification of paragraph (1) of article 1 of the Government Emergency Ordinance no. 142/2000 on the setting up, organizing and functioning of SAPARD Agency for the technical and financial implementation of the special pre-accession instrument for agriculture and rural development; Law no. 530 on November 25 th 2004 for the completion of article 2 of the Government Emergency Ordinance no. 142/2000 on the setting up, organizing and functioning of SAPARD Agency for the technical and financial implementation of the special pre-accession instrument for agriculture and rural development; 2005 Government Ordinance no. 46 on August 11 th 2005 on accelerating the absorption of the SAPARD funds by guaranteeing the co-financing credits with the assets procured under SAPARD projects; Emergency Ordinance no. 103 on July 14 th 2005 for the modification and completion of Law no. 1/2004 regarding the setting up, organizing and functioning of the Paying and Intervention Agency for Agriculture, Food Industry and Rural Development and of Government Emergency Ordinance no. 142/2000 on the setting up, organizing and functioning of SAPARD Agency for the technical and financial 103

104 implementation of the special pre-accession instrument for agriculture and rural development; Law no. 359 on December 12th 2005 on the approval of the Government Emergency Ordinance no. 103 on July 14th 2005 for the modification and completion of Law no. 1/2004 regarding the setting up, organizing and functioning of the Paying and Intervention Agency for Agriculture, Food Industry and Rural Development and of Government Emergency Ordinance no. 142/2000 on the setting up, organizing and functioning of SAPARD Agency for the technical and financial implementation of the special pre-accession instrument for agriculture and rural development; Emergency Ordinance no 13/2006 on the setting up, organizing and functioning of the Paying Agency for Rural Development and Fishery, by re-organizing SAPARD Agency; Law no. 198 on May 22nd 2006 on the approval of the Government Emergency Ordinance no. 13/2006 on the setting up, organizing and functioning of the Paying Agency for Rural Development and Fishery, by re-organizing SAPARD Agency; Order of the Minister of Agriculture, Forests and Rural Development no. 137/ on the approval of the organizational structure, the organizing and functioning regulation and of the number of positions for the Paying Agency for Rural Development and Fishery; Emergency Ordinance no. 120/2007 on the modification of the Emergency Ordinance no. 67/2006 regarding the management of the non-reimbursable funds for financing the common agricultural policy allocated by the European Community, as well as of the co-financing and pre-financing funds allocated from the state budget; Government Decision for the approval of the methodology norms for the Government Emergency Ordinance no. 67 on September 13th 2006 regarding the management of the non-reimbursable funds for financing the common agricultural policy allocated by the European Community, as well as of the co-financing and prefinancing funds allocated from the state budget; Government Decision for the approval of the methodology norms for the Government Emergency Ordinance no. 79 on August 28 th 2003 regarding the control and recovery of the community funds, as well as of the related co-financing funds improperly used; Government Ordinance no. 31/2007 on regulating certain financial measures for stimulating the absorption degree of the funds allocated under SAPARD Programme Law no. 324/2007 for the approval of the Government Ordinance no. 31/2007 on regulating certain financial measures for stimulating the absorption degree of the funds allocated under SAPARD Programme; Order no. 700/2006 of the Minister of Agriculture, Forests and Rural Development for the approval of the methodology norms for the application of the Government Ordinance no. 31/2007 on regulating certain financial measures for stimulating the absorption degree of the funds allocated under SAPARD Programme; 2008 Government Emergency Ordinance no. 65 on May 21st 2008 for the modification and completion of the Government Emergency Ordinance no. 13/2006 on the setting 104

105 up, organizing and functioning of the Paying Agency for Rural Development and Fishery, by re-organizing SAPARD Agency, as well as for establishing certain measures for the efficiency of the Paying and Intervention Agency for Agriculture s activity published in the Official Journal no. 418 on June 4 th 2008; Order of the Minister of Agriculture and Rural Development no. 152 on July 4th 2008 on the approval of the organizational structure, the organizing and functioning regulation and of the number of positions for the Paying Agency for Rural Development and Fishery; Government Ordinance no. 20 on August 13th 2008 for the modification and completion of the Government Ordinance no. 79/2003 regarding the control and recovery of the community funds, as well as of the related co-financing funds improperly used published in the Official Journal no. 613/ ; Emergency Ordinance no. 213 on December 4 th 2008 for ratifying the Agreement between the Romanian Government and the Commission of the European Communities, on behalf of the European Community, signed at Bucharest and Brussels on December 4 th 2008, for the modification of the 2006 Annual Financing Agreement between the Romanian Government and the Commission of the European Communities, on behalf of the European Community, signed at Bucharest and Brussels on October 31 st 2006 published in the Official Journal no. 842/15/12/2009; 2009 Order of the Minister of Agriculture and Rural Development no. 123 on March 31 st 2009 on the approval of the organizational structure, the organizing and functioning regulation and of the number of positions for the Paying Agency for Rural Development and Fishery Activities regarding the procedures improvement During 2009 the following accredited procedure manuals for the implementation of SAPARD Programme were modified: - By Instruction no. 119 the Procedure Manual for finding irregularities and debts recovery, code G8-IRD was modified. The modifications operated within the manual implemented the recommendations of the Audit Authority within the Romanian Court of Accounts regarding the implementation of the SAPARD Programme s Action Plan and the recommendations of DG AGRI following the control missions. At the same time the modifications occurred due to the modification of the organizational structure and of PARDF s organizing and functioning regulation, modifications approved by MARD Order no. 123/2009. Instruction no. 119 was applied starting with July 24 th 2009, after its transmission to EC and following the communication to the Regional Centres and County Offices. - By Instruction no. 120 the following procedure manuals were correlated with the new organizational structure of PARDF, approved by MARD Order no. 123/2009: - Payments authorization manual, code G5-AP; - Payments accounting manual, code G5-AP; - Management manual, code G5-AP; - Methodology manual, code G5-AP; 105

106 - Monitoring, evaluating and reporting manual, code G5-AP; - Payments Execution manual, code G5-AP; - Control and Antifraud manual, code G9-CA; - Archiving manual, code G10-AR - General presentation manuals on Measures 2.1, 1.1, 3.1, 3.4, 1.2, 3.2, 3.3 and 3.5. Instruction no. 120 was applied by PARDF starting with August 17 th 2009, after its transmission to EC and following the communication to the Regional Centres and County Offices. - By Instruction no. 121 for updating the Internal Audit and the Public Relations procedures for both SAPARD Programme and EAFRD, considering the Cancellation Note no / , and their replacement with: - Internal Audit procedure manual, code M02-02; - Public Relations procedure manual, code M The procedure manuals are common for both SAPARD and NRDP programmes and they were approved by MAFRD Order no. 525/2009. Instruction no. 121 is applied by PARDF starting with December 7 th Regarding the procedures for implementing projects affected by natural disasters, must be mentioned that those have been amended and submitted for approval to the European Commission, in compliance with the article 16 (1) (a) Section A of MAFA. The SAPARD Agency received the Decision C (2006) 1194 from April 11 th, 2006 for amending and approving the procedures Activities aimed at improving the implementation of SAPARD Programme In order to appropriately implement the Programme, the Agency signed framework agreements with the Directorate for Rural Development within the Ministry of Agriculture, Forests, Food and Environment (MAFFE) a collaboration agreement with the National Agency for Consultancy in Agriculture and also addenda to the collaboration agreements concluded with Sanitary Veterinary National Agency, the Environment Department within MAFFE, Ministry of Health. These addenda stipulate that the Agency should be immediately notified in the event modifications are brought to the initial terms and permits specified in the agreements. Moreover, the concluded collaboration agreements and addenda aimed at the consolidation of the ensuring role the permits have as regards the observance of standards. At the same time, to improve the monitoring activities and also to avoid double financing a project, agreements were concluded with the Ministry of European Accession and the Managing Unit for the Programme related to Enterprises Restructuring and Professional Retraining (MUPERPR). Furthermore, in order to facilitate the access to co-financing sources, the Agency concluded 26 agreements with commercial banks to insure the cooperation related to the implementation of SAPARD measures. Thus the loans were guaranteed through the Fund for the Guarantee of Rural Loan. The beneficiaries were granted a facility when requesting loans to insure the co-financing with SAPARD Programme so that they would not have to elaborate supplementary 106

107 documentation or pay extra tax or bank fees for the analysis of the documents and for the issuance of the comfort letter In order to insure other facilities for the private beneficiaries of SAPARD Programme, the Agency concluded a series of new agreements with the authorities involved in the implementation of the Programme. Thus, on September 9 th 2004, the Agency concluded a collaboration agreement with the National Council of Small and Medium Size Private Enterprises from Romania, which stipulated that the signing parties would collaborate to achieve the following: The improvement of access given to small and medium size private enterprises (SMSPE) to the information regarding the activities of the Agency; The improvement and promotion of the activities carried out by the small and medium size private enterprises in the field of agriculture; The put into practice of the principles related to the decision making transparency and information at national, regional, county and local levels; The stimulation of enterprising, building an enterprising culture and positive image of the enterpriser. On November 17 th, 2004, an agreement was signed with the Sanitary Veterinary and Foodstuff Safety National Agency (SVFSNA). The object of the agreement is for SVFSNA to verify the conformity of the projects, or, by case, the units of SAPARD potential beneficiaries/ beneficiaries with the legislation of the European Union in terms of hygiene, animal welfare and issuance of the sanitary veterinary endorsements and permits. At the same time, on November 24 th, 2004 another agreement was signed between the Agency and the National Agency for Consultancy in Agriculture, the Deposits and Consignments House, the Rural Credit Guarantee Fund, the National Fund for the Guarantee of Loans given to SMSE and the National Agency for SMSE and Cooperation. The objective of the agreement was to support the applicants who did not have their own cofinancing funds and did not have the possibility to draw up SAPARD financing application in order to make investments up to 10,000 Euros under measure 3.1 Investments in agricultural holdings and Measure 3.4 Development and diversification of economic activities generating multiple activities and alternative incomes. On December 22 nd, 2004 the Agency signed the agreement with the Ministry of Health, according to which the ministry verifies the conformity of the projects or by case the units of the potential beneficiaries/ beneficiaries with the legislation of the European Union in terms of hygiene, public health and issuance of the sanitary endorsements and permits. On the same date, December 22 nd, 2004, the Agency signed the agreement concluded with the Ministry of Environment and Water Management (MEWM). The objective of this agreement is that the MEWM verifies the conformity of the projects or by case the units of the potential beneficiaries/ beneficiaries with the legislation of the European Union in terms of environment. The agreements signed in 2004 with the Sanitary Veterinary and Foodstuff Safety National Agency, Ministry of Health, Ministry of Environment and Water Management represent 107

108 consolidated versions of the agreements previously concluded with these institutions. They were updated in order to meet the requirements of the modified fiches of the accredited measures, approved by the European Commission In order to intensify the institutional collaboration SAPARD Agency concluded a number of agreement with the authorities involved in the implementation of SAPARD Programme, as follows: On August 25, 2005 an agreement was signed with the Sanitary Veterinary and Foodstuff Safety National Agency (SVFSNA). The objective of the agreement is for SVFSNA to verify the conformity of the projects, or, by case, the units of SAPARD potential beneficiaries/ beneficiaries with the legislation of the European Union in terms of hygiene, animal welfare and issuance of the sanitary veterinary endorsements and permits. On September 28, 2005 the Agency signed the agreement with the Ministry of Health, according to which the ministry verifies the conformity of the projects or units of the potential beneficiaries/ beneficiaries with the legislation of the European Union in terms of hygiene, public health and issuance of the sanitary endorsements and permits. The agreements signed in 2005 with the Sanitary Veterinary and Foodstuff Safety National Agency and with the Ministry of Health represent consolidated versions of the agreements previously concluded with these institutions. They were updated in order to meet the requirements of the modified fiches of the accredited measures, approved by the European Commission, as well as the measures about to be accredited On March 24 th, 2006, PARDF and the National Agency for the Protection of the Environment (NAPE) concluded an agreement establishing the legislative, administrative and operational framework based on which NAPE and also the National Environmental Guard which coordinates the Regional and County Commissariats were to collaborate with PARDF in order to verify the projects financed under SAPARD measures. Moreover, PARDF signed 3 more collaboration agreements with financing institutions in order to grant loans to the beneficiaries who meet the financing requirements of SAPARD Programme. The banks are the following: Agreement no. 32 on concluded with ProCredit Bank S.A.; Agreement no. 35 on concluded with OTP Bank România S.A.; Agreement no. 38 on concluded with C.R. Firenze România S.A. Thus, at the end of 2006, 34 collaboration agreements had been concluded with financing institutions in order to improve the absorption of SAPARD funds. 108

109 Activities carried out by the IT Unit in order to solve the problems identified during the SAPARD Programme s implementation During this period of time a series of PHARE projects for the endowment of the Agency with hardware equipment, as well as software projects were implemented, as follows: RO L001 on the procurement of IT network equipments in order to establish the initial IT topology. RO (RO981IB/SPP/03) on creating SAPARD Agency s website. RO on the procurement and update of the IT equipments in order to use the Agency s VPN intranet network. RO 2002/ on the procurement of IT equipments, among which we can mention: Application Cluster Server (2 clusters), Database Cluster Server (2 clusters) and a Data Base Server for each Regional Center. RO 2002/ EuropeAid/116225/D/SV/RO on creating an integrated software system for the implementation of SAPARD Programme. During the Proteus accounting application for EU payments accounting (Visual Fox PRo) was implemented and updated, mainly assuring: the accounting records in extra-balance accounts (registering the commitments and payments in accounting ledgers, different from the expenditure ledgers of SAPARD Agency) detailed registration of the debts to be recovered; periodic summing the expenditures; periodic and annual statements to EC. During the Prosys accounting application (SGBDR MS-SQL) was implemented, replacing Proteus application as regards the EU accounting part of SAPARD Programme. The new application considers the legislative modifications and the modifications occurred due to the beneficiary s internal regulations. Within this application the procedures for saving/restoring data were updated, the insurance policies related to data security and to data access were updated, the programs updating was assured. All these were assured by the supplier of the application. During SIMEC (Informatics system for economic management) application was implemented. This application is used for own internal accounting and for the financialaccounting management, a programme structured on modules, elaborated in VISUAL FOX PRO 6: Financial-accounting Management; Budget Management; Partnership Management (Suppliers/Clients/Debtors/Creditors); Fixed Assets Management; Stocks and inventory objects Management; Extra-balance Management. In 2008, SIMEC application was replaced by the non-eu module of SIVAPPS accounting application. 109

110 For the equipment procured, the MS Windows operation systems, SQL databases, as well as for the IT systems security, training sessions were organized for the IT experts at central and regional levels. A database with estimative reference prices for the products procured under SAPARD projects was elaborated. A database with SAPARD projects was elaborated in compliance with the requirements of the European Commission (in order to take over historical data from the financing application s file and from the files of the projects submitted for SAPARD Programme during ). During the elaboration all the necessary data were collected from the financing application s file and from the files of the financed projects, procedures for data saving/restoring were implemented, insurance policies for data security and access to the database were implemented, a mechanism for granting access rights at the users level was created, the export format of the database to the European Commission was assured, a daily record of the data inserted in the database was elaborated, checklists for the data within the database were elaborated, monitoring reports for the data loading process were designed, elaborated and developed, procedures for automatic update of the programs installed were elaborated, the verification of the integrity and correlations of the database that shall be submitted to the European Commission, was performed. In order to harmonize the IT standards used for the management of both SAPARD Programme and EAFRD, the IT manuals were combined in version 0.9.3c. Although the setting up of a reference prices database was not an accreditation criteria under MAFA, the Romanian authorities launched the necessary procedures with a view to contract a service supplier for setting up this database. On February 25 th, 2005 the SAPARD Agency (at present PARDF) signed the Framework Agreement as Contracting Authority with SIVECO in order to set up the above-mentioned database. The database aims at supporting the beneficiaries and the Paying Agency s staff in the assessment process. During the assessment of the financing application, the Agency could check the reasonability of the price. During the payment claim process, the Agency shall only check the invoices and ensures that the amounts submitted do not exceed the amounts mentioned in the procurement contracts. On April 21st, 2007, the project Database with reference prices for goods, works and services procured by the SAPARD Programme (DBRP) was completed. The reception minutes provided the necessity of ensuring the maintenance and updating the DBRP application. Considering the completion date of the database, the latter was used during the verification process of the awarded offers for the SAPARD projects. Based on the contract concluded with SIVECO, the reference prices database was implemented on the new PARDF s site at which the EAFRD s beneficiaries also have access. The users have access to the database. The searching browsers were improved in order to render better results. In the same window, the users also have access to the following functions: enter search criteria, displaying the results in table format, showing details of a product or service, display of products and services selection for future reference, which can also be seen in the Microsoft Office Excel form. 110

111 In accordance with article 26 (2) (d) of Regulation (EC) no. 1975/2006 for projects financed by the EAFRD, the reasonableness of proposed costs must be assessed by a suitable assessment system, such as reference costs, comparison of different offers or an assessment committee. As regards the financing application assessment process, the EAFRD procedure provides that the reasonability of the prices should be checked by comparing the amounts submitted by the beneficiaries with the amounts included in the estimates of each object and with the amounts included in the price reference database, based on the investment s type. Should these amounts comply with the accepted limits provided by the price reference database, they will be accepted. Thus, the PARDF also decided to regard the comparison of certain offers, the obligation to present at least three compliant offers for the tender selection procedure representing a guaranty as regards the insurance of the prices reasonability, until the costs are regulated at national level. The checks carried out during the payment claim verification process aim at ensuring that the amount authorized for payment of the goods/services/works do not exceed the prices of the goods/works/services included in the awarded offers and in the procurement contracts and their endorsed values. Currently, the application is functional and can be accessed at the PARDF s following site (Paying Agency for Rural Development and Fishery): both by experts as well as by beneficiaries, advisers, suppliers The IT Unit assured during 2009 the support for the informatics activities related to the registration of SAPARD Programme s implementation and finalization Measures related to endowments during SAPARD Programme s implementation period In order to assure the endowments necessary for carrying out the activity, during SAPARD Programme s implementation period, namely sources from the state budget were assured for the optimum progress of the activities at the central headquarters, at the 8 Regional Offices and at the level of the 42 County Offices, since their taking over in 2006, according to GEO no. 13 on the Paying Agency for Rural Development and Fishery setting up, organizing and functioning, by re-organizing SAPARD Agency, approved and modified by Law no. 198/2006, with further modifications and completions. The sources from the state budget were used for assuring the maintenance and functioning expenditures for all the above-mentioned structures, as well as for assuring the endowments necessary for the Agency staff in order to successfully implement SAPARD Programme. Among the main endowments procured during this period of time, we would like to mention the followings: Computers working stations for the entire staff employed since the launch (2000) until the end of the programme; Network servers; Copying machines; Faxing machines; 111

112 Cars; Network laser printers; Office furniture; Telephone switchboards; Heating stations; Secured access system for the central headquarters and for a part of the territorial structures; Licenses; GPS receivers for land measurements; Metallic shelves for the archives of the central headquarters and all territorial structures. In addition to the above-mentioned endowments, from the state budget sources amounts have been assured for their maintenance, as well as for other current expenditure necessary for carrying out the activity, as follows: Spare parts and accessories for computers and IT peripherals; peripheral maintenance services for the telephone switchboard and for the IT applications; consultancy services for auditing the public procurements under SAPARD Programme; office supplies, stationery and other office consumable; services for documents archiving; consolidation works, arrangements and rehabilitation PRCRDF Satu Mare headquarters; repair works, re-arrangements, works for the hygiene of the headquarters, as well as arranging archiving spaces for all applicants; services for documents binding and archiving; consultancy services for the accreditation of the Agency according to the ISO standard; assuring the transport of the staff, assuring the equipment necessary for performing the on-the-spot controls and for SAPARD Programme s promotion activities, in all the areas of the country. At the same time, we would like to specify that during the implementation of SAPARD Programme, in addition to the allocations received from the state budget, the Agency was the final user of different procurements of IT equipments financed with PHARE funds, whose value exceeded the amount of 6,100 thousand lei (RON) Activities carried out by the Procurement Unit During 2009 the Procurements Unit performed activities related to the coordination of the Regional Centres, as follows: a. Drawing up and transmitting to the Regional Centres the modifications occurred in the legislation related to public procurements, when necessary (GEO no. 34/2006 with further modifications and completions, orders issued by NARMPP, MPF/PPCVU, etc.) b. permanently monitoring the procurement procedures by: 112

113 - transmitting the necessary information to the Regional Centres at the end of each procurement procedure; - transmitting (on weekly basis) to PRCRDF the situation regarding the status of the procurement procedures for each project under implementation - drawing up (on weekly basis) the databases for each measure as regards the status of the procurement procedures. c. Organizing training sessions for the staff within PRCRDF and PCORDF (when necessary) as regards the application of the legal provisions related to public procurements and of the instructions for the private beneficiaries (modifications of the legislation or of the procedure, case studies/simulations). d. Organizing training sessions for the representatives of the public beneficiaries, responsible for applying the legislation related to procurements. e. Specialized coordination and technical assistance for the correct application of the legislation and of the procedural provisions regarding the procurements carried out by the public and private beneficiaries. f. Permanently informing the Regional Centres on the inter-institutional cooperation procedures between NARMPP-MPF/PPCVU and PARDF as regards the fulfilment of the functions and attributions within each institution s competences (exchange of information following the verifications carried out by each party, in order to observe the legislation related to the public procurements). g. Drawing up points of view/instructions (when necessary) for certain procedural provisions contributing to the implementation of the projects within the contractual terms. h. Transmitting information letters to the public and private beneficiaries as regards the application of the procurements procedures. i. Analyzing (at PRCRDF s headquarters) and closely monitoring the projects dealing with difficulties by the Public Procurement Unit. Thus, among the problems encountered as regards the public procurement procedures, we would like to point out the following: During the implementation of the public procurement procedures, there were several appeals in particular against the call for tenders for the works execution or "overall services" and against the call for tenders for design services, which led to the extension of the procurements completion deadline. There were several beneficiaries who postponed the drawing up of the public procurement files or the organising of the calls for tender, preferring to leave them to the end of the contract period. Different ways of interpretation by the public beneficiaries of the provisions under the instruction manual for public procurement contracts for services, goods and works." Private procurements In 2009 a procedure for re-checking the procurements for the private beneficiaries as regards the reasonability of the prices and the compliance of the three offers was drawn up. Thus, the projects already completed had been re checked on a sample of at least 5%, and the projects under the payment process had been 100% re checked. 113

114 As regards the private procurement issues, we would like to mention that they were related to the offers compliance, eg: the tenderers failed to present the NACE code specific to the activity for which they submitted the offer (at the moment of the offer submission they were not authorized to carry out the activity). Regarding the checking of the three offers validity, the difficulties encountered by the PARDF have mainly focused on: possible agreements between tenderers; authenticity of offers, if the three tenderers were real entities at the time of the offers submission Activities carried out by the Control and Antifraud Directorate in order to solve the issues identified during SAPARD Programme s implementation In addition to the control activity, CAD also carried out the following activities: the improvement of the control procedure related to SAPARD Programme following DG AGRI s recommendations included in the Letter of Observation transmitted in July 2008; the letter of observation was issued following DG AGRI s mission in June 2008; the elaboration of the Action Plan requested by the European Commission (EC), which implied the modification of the control procedure due to the fact that EC did not accept the provisions of Instruction no. 105; the elaboration of Instruction no. 118 for the modification of the control procedure; the elaboration of a sample increased to 15% for the projects not-finalized until November 30th 2008; the participation to numerous meetings with the Certifying and Paying Authority (CPA) and the Managing Authority (MA). 114

115 CHAPTER V SUMMARY OF RESULTS ON CONTROLS CARRIED OUT 5.1 Amendments in the control systems introduced during the programme period and information on when the Commission was informed accordingly The improvement of the control procedure on SAPARD was achieved through the 118 and 120 Instructions. The Commission was notified on September 26 th, 2008 with respect to the procedural amendments brought by the 118 Instruction and on July 30 th, 2009 with respect to the procedural amendments brought by the 120 Instruction. 5.2 Control missions performed by the Control and Antifraud Directorate during Types and numbers of controls. The Control and Antifraud Directorate (CAD), is a directorate directly subordinated to the General Director of PARDF, which carries out, in compliance with the accredited procedures, technical and financial verification of the projects as regards the compliance, eligibility, selection, procurements, payments, the maintenance of the projects eligibility on a monitoring period of 5 years since the last payment, and the internal control, aiming at preventing fraud and at assuring the proper use of the funds, by observing the qualitative requirements specified in the project. The main control activities included the followings: I. the verification of the projects during their implementation and execution period; II. the verification of the projects after the last payment (ex-post verification). I. The verification of the projects during their implementation and execution period 1. Control on sample of the projects before and after the first payment; 2. The settlement, within the limits of its competences, of the petitions intimations, complaints and notifications submitted from within PARDF, from the beneficiaries, legal or natural persons, involved institutions, media, or following acknowledgment, including the ones related to the quality of the works executed under measure 2.1 and other measures; 3. the analysis and monitoring of the irregularities received from the other directorates/units involved in the verification and control activity, and reporting these irregularities to the European Commission, through the National Fund within the Ministry of Public Finances; 4. the analysis, documentary and, by case, on-the-spot verification, of the intimations/notifications received from other control bodies, OLAF, DLAF, NAD. 115

116 At the same time, starting with 2006 CAD s experts were part of: Commissions for the verification of the manner certain projects are implemented, in order to establish the prejudice and to draw up the enforceable Control Minutes with acknowledgement of the debt, based on G.O. no. 79/2003. CAD s experts were part in approximately 139 control processes, out of which: 23 were in 2006, 32 in 2007, 35 in 2008 and 49 in 2009; Commissions for the settlement of the appeals against the minutes, approximately 117 appeals, out of which: 10 in 2006, 40 in 2007, 40 in 2008 and 27 in Control on sample CAD s first control on sample was performed in The control on sample was established based on risk analysis method, according to the control and antifraud procedure, on 5% or 10% out of the total eligible value contracted. The sample was established for each PRCRDF, based on the total number of projects contracted, and based on their values, taking into account the provisions of the control procedure, namely: 30% out of the projects included in the sample must be verified before the first payment and 70% must be verified after the execution of the first payment. 352 projects were verified based on sample control between 2004 and 2009, out of which: 14 in 2004, 62 in 2005, 101 in 2006, 44 in 2007, 68 in 2008 and 63 in As regards the projects verified documentary and on-the-spot, control reports were drawn up and approved by the General Director, their status being as follows: in projects on measure 1.1 (10% sample) out of which on 12 projects irregularities without financial implications were found (86% compared to the number of projects) and on 2 projects irregularities with financial implications were found (14% compared to the number of projects); in projects on measure 2.1 (10% sample), out of which: for 41 projects (respectively 66.13%) no irregularities were found, or the ones found have no financial implications and on 21 projects (respectively 33.87% ) irregularities with financial implications were found. Comparing the value of implications, namely the amounts for which the making of the debt was requested for each of the 21 projects, to the total eligible value of the 62 projects, results a percentage of around 1.8%. in projects on measure 3.1 (10% sample) and 47 projects on measure 3.4 (10% sample), their status being the following: - on measure 3.1, for 50 projects (92.6%) no irregularities were found, or the ones found have no financial implications and for 4 projects (7.4%) irregularities with financial implications were found. - on measure 3.4, for 36 projects (76.59%) no irregularities were found, or the ones found have no financial implications, for 6 projects (12.76%) irregularities with financial implications were found, 2 projects were cancelled (0.04%) and 3 projects (0.06%) were submitted to the police for 116

117 supplementary investigations. At present two of them are still under investigations, as for the third one the suspicions were not confirmed. In projects on measure 1.1 (5% sample) and 27 projects on measure 3.1 (5% sample), their status being the following: - on measure 1.1 for 16 projects (94.11%) no irregularities were found, or the ones found have no financial implications and for 1 project (5.88%) irregularities with financial implications were found; - on measure 3.1, for 21 projects (77.7%) no irregularities were found, or the ones found have no financial implications and for 6 projects (22.23%) irregularities with financial implications were found. In projects on measure 3.1 (5% sample), 26 projects on measure 2.1 (10% sample), and 13 projects on measure 3.5 (10% sample), their status being the following: - on measure 3.1, for 26 projects (89.65%) no irregularities were found, or the ones found have no financial implications, for 2 projects (6.89%) irregularities with financial implications were found and 1 project (3.44%) was submitted to the Financial Guard for supplementary investigations and for which no reply was received. - on measure 2.1, for 23 projects (88.5%) no irregularities were found, or the ones found have no financial implications, for 3 projects (11.5%) irregularities with financial implications were found. Comparing the value of the debts made, namely Lei 259, to the total eligible value of the 26 projects included in the sample of Lei 145,068,889, results that the debts made represent a percentage of 0.18%. - on measure 3.5, for 13 projects (100%) no irregularities were found, or the ones found have no financial implications. CAD s control on sample in 2009 According to CPA and DG AGRI s recommendations, included in Letter no. D/28332/ regarding the action plan, CAD extended the sample from 10%, as provided in the accredited control procedure, to 15% out of the total eligible value contracted for the projects not finalized until November 30 th The sample was established for each regional centre, based on the total number of projects not finalized until November 30 th 2008, namely 412 projects and depending on the values of these projects, thus resulting a number of 63 projects to be verified. The control missions established were carried out according to the Control plans approved and registered under nos. 636/ and 2012/ Following the verifications of the 63 projects not finalized until November 30 th 2008, report controls were concluded and approved by the general director for all projects, their status being the following: a) Projects where no irregularities were found, or the ones found had no financial implications 60 projects, representing 95.24%; 117

118 b) Projects where irregularities with financial implication were found 3 projects, representing 4.76%. We would like to specify that only the irregularities leading to the making of a debt were considered as irregularities with financial implications. The main irregularities without financial implications were the following: Deficiencies found on-the-spot, at works execution; Non execution of individual connections and giving up part of the street wells; A good procured under SAPARD Programme was not found on-the-spot; The procurement of animals was done before the finalization of the works, thus negatively influencing their life conditions; Following the comparison of the copies with the beneficiary s original documents, it was found that certain copies of the Local Council s Decisions do not correspond to the original and that their registration numbers are different; Incomplete number of animal heads procured under SAPARD Programme; During the control, non executed works were found, but these works were requested for payment by the beneficiary in the payment claim which was under processing at PARDF s territorial structures; Lack of the advertising banner, according to the requirements; Exceeding with 500 m the length of the road provided in the technical project; On certain parts of the road the pluvial waters eviction trenches were clogged; The beneficiary s accounting related to the project implemented under SAPARD Programme does not include all the registrations related to the investment; The side roads are covered with adequate coats on a length of 10 m, not 30 m as provided in the Feasibility study; The procured fixed assets did not bear the inventory numbers given by the accounting unit. The main proposals given following the control of the projects were the following: the remedy of the deficiencies found on-the-spot within the deadlines established by PARDF and the verification of the remedy works by PARDF s territorial structures; procurement of the good that was not found on-the-spot from the beneficiary s own sources; the amount authorized for payment by PARDF, representing quotas not found in the constructor s offer shall be discounted from the value of eligible expenditure accepted for the following payment instalment; the transmission of letters to the competent authorities (the Public Health Authority, the Agency for Environment Protection) for the verification of the projects involving animal breeding farms, for the re-verification of the project as regards the functioning permits and the ex-post monitoring of the project, every year, until the end of the 5 years period since the last payment; the transmission of the aspects found for investigation to the County Police Inspectorate; notifying the beneficiary on the condition to provide the maintenance expenditures in the Local Council s Budget; the procurement of the missing pregnant heifers from the same supplier, within the deadline established by PARDF; 118

119 the finalization of the non executed works within the deadlines established by PARDF; the rejection from the last payment instalment of the expenditures related to the works not executed at the moment the control was performed; advertising the project according to the requirements; redoing the accounting record related to SAPARD Programme; unclogging the pluvial waters eviction trenches and providing the maintenance expenditures of the investment in the Local Council s Budget; not discounting from payment the part of the road that exceeded the length provided in the technical project; the beneficiary shall arrange the side roads with adequate coats on a length of 30 m, and PRCRDF shall verify the remedy of these deficiencies; writing the inventory numbers given by the accounting unit on the procured fixed assets, until the submission of the last payment claim; verifying ex-post in order to find the remedy of the deficiencies and the verification in order to maintain the project s eligibility on a period of 5 years since the finalization; monitoring the maintenance of the specific activity provided in the contract and in the financing application, by the Ex-post Control Unit. The main irregularities with financial implications were the followings: discounting the expenditures related to certain quotas from the closing estimate, which were not included in the constructors offer; exceeding the execution period stipulated in the addendum, the modification of the technical solution without concluding an addendum, the non-observance of the specific eligibility criterion E.S.2.4 (exceeded accommodation capacity). For the irregularities with financial implications the procedure for debts recovery was launched according to the legal provisions in force (GO no. 79/2003, methodology norms for the application of GO no. 79/2003). The irregularities having as a result, for example, the remedy of the deficiencies found onthe-spot within the deadline established by the Agency and the verification of these remedies by the territorial structures, the notification of the regional centres in order to not discount certain amounts in case the beneficiary shall request them, were included in the category of the irregularities without financial implications. CAD considered that the irregularities without financial implications do not influence the project s eligibility, thus proposing to continue their implementation. As regards the case where irregularities with financial implication were found, the procedure for debts recovery was launched according to the legal provisions in force (GO no. 79/2003, methodology norms for the application of GO no. 79/2003). 2. Appeals, complaints and intimations CAD solved during a total of 799 divergences, intimations, complaints and appeals, out of which: in 2002, concluding 112 control reports; in 2003, concluding 161 control reports; 119

120 - 150 in 2004 concluding: 119 control reports related to intimations and complaints (one report control was drawn up for all the appeals against the tender organized by a local council); -155 in 2005 concluding: 128 control reports related to appeals (one report control was drawn up for all the appeals against the tender organized by a local council); - 62 in 2006 concluding: 36 control reports related to appeals; 3 closing notes; 14 replies to the requests of NAD and DLAF regarding the implementation manner of certain projects, intimations and irregularities found during their implementation and the manner these were solved; 9 minutes for the settlement of the appeals against making of a debt in 2007 concluding: 71 control reports related to intimations and appeals; 23 reply letters without drawing up control reports; - 34 in 2008 concluding: 20 control reports related to intimations and appeals; 14 reply letters without drawing up control reports. -31 in 2009 concluding: 17 control reports related to intimations and appeals; 13 reply letters without drawing up control reports; Out of all the intimations, were approved the following: % in % in % in % in % in 2009 One of the intimations was closed. The aspects included in the intimations and appeals processed by CAD during the abovementioned period of time were: the manner the services, goods and works tenders were organized and awarded, conflict of interest, the use of SAPARD funds for other purposes, payment situations, the procurement of second-hand equipment, deficiencies in the execution of work (non executed works or improperly executed), the eligibility of the projects, divergences between TVU-PPD and TVU-PRCRDF related to a payment instalment, divergences between the PRCRDF s experts and the Audit Authority s auditors regarding the manner the beneficiary procured the goods, the non-payment entirely of the invoices issued by the executant of the works, although the work is finalized and the amounts are discounted by PARDF, the non-observance of the contractual obligations on a period of 5 years since the last payment, the re-verification of certain expenditures rejected from payment, the non acceptance of addenda, the implementation of the investment on a different domain, not the 120

121 public one, suspicion of fraud, the manner to verify the public procurement procedure at PRCRDF s level, respectively at SCD-PAU s level, discounting certain expenditures in advance, lands under litigation on which boarding houses are built, etc., on measures 1.1, 1.2, 2.1, 3.1, 3.4. Most of the irregularities found were made by those who implemented the projects and were not the result of inappropriate use of the internal control system. The irregularities deriving from the inappropriate implementation of the control system were under 1% out of all the irregularities found. As regards the irregularities deriving from the inappropriate implementation of the internal control system, the persons found guilty by the PARDF s Discipline Committee were sanctioned. Following the control reports, the followings were drawn up and transmitted: reply letters to petitioners; informing letters to the local councils related to the notifying authorities; reply notes on certain issues notified by the European Commission or OLAF, through MAFRD; Notes representing a briefing of the report control and the measures to be taken, note that was transmitted to the involved units; Notes to the Prime Minister s Office Inspections Department as regards the suspicions of fraud; the conclusions of CAD s investigations to the involved PRCRDFs, to DLAF, Court of Accounts, Environment Guard, CPI, by case; Notes to the Technical Verification Units within PRCRDF, regarding the compulsoriness to verify the fulfilment by the beneficiary of the measures proposed by CAD and informing CAD on these verifications. All these intimations were drawn up and transmitted to CAD by: The Director General following the report of the Court of Accounts, the directorates within PARDF and/or PRCRDFs; The central and local public administration institutions (National Fund, the Ministry of Agriculture and Rural Development, DLAF, NAD, Police, Financial Guard, the Consumer s Protection, Court of Accounts, etc.); The trading companies, tenderers at the public procurement tender; Natural persons (inhabitants of the communes, beneficiaries of SAPARD Programme, local councillors of the Local Councils beneficiaries of SAPARD Programme); Different articles published in the media; DG AGRI and OLAF, Brussels. In order to settle these intimations the following activities were performed: documentary control; on-the-spot-control, consisting in: physical examination and measurements, diggings and taking samples from the road structure, visual examination and measurements on the component layers; taking samples and transmitting them to the authorized laboratories in order to establish their components, verifying on sample random the pipes assembled on the distribution and water supply networks as established by the project, as regards the water supply projects. 121

122 The measures proposed by CAD and transmitted to the involved entities were the followings: clarifying the aspects submitted by each petitioner; re-evaluating the offers, appointing a new commission; re-drawing up the terms of supply and re-organizing the tender; cancelling the tender and re-launching the procurements procedure according to GO no. 34; re-executing the damaged works; making debts (works executed, but not put into practice, sub-contracting entirely the construction works to a company whose associate and administrator is the same person or not paying entirely the invoices issued by the works executant, although the works are finalized and the amounts are discounted by PARDF) or not discounting the expenditures for improper works; cancelling contracts; transmitting to DLAF for investigation (suspicion of forgery in documents). depending on DLAF s results the necessary measures shall be taken; transmitting to NAD for investigation (placing certain boarding houses in the urban or peri-urban areas). Depending on NAD s results, PARDF shall decide whether to cancel the contracts concluded with the beneficiaries; cancelling the financing contract and the payments until the legal issues are settled (the land on which the boarding house is planned to be built is in legal dispute); creating the list of the design companies with irregularities in SAPARD Programme s implementation on PARDF s website submitting facts for investigation to the County Police Inspectorates (forgery and use of forgery); In case no irregularities were found following CAD s controls, it was proposed to continue the implementation of the projects. 3. Analyzing and monitoring the irregularities During , 529 irregularities with or without financial implications (IR 1.1) were drawn up and registered, distributed on years as follows: irregularities; irregularities; irregularities out of which 5 irregularities without financial implications and 69 irregularities with financial implications; irregularities with financial implications; irregularities with financial implications; irregularities with financial implications. 4. Analyzing and verifying the intimations/requests received from other control bodies 27 answers to OLAF following the Control notes drawn up by DLAF and transmitted to OLAF; 124 answers to the requests submitted by OLAF, NAD, DLAF, PGI, FG, Ministry of Internal Affairs and Administrative Reform; Following these requests certain projects were verified on-the-spot; 42 projects under Measure 1.1 were verified documentary following EC s recommendations (DG AGRI and OLAF). 122

123 19 answers to OLAF s requests following certain intimations processed by this institution or the transmission of information regarding certain projects; 4 controls carried out following the notifications of DLAF, NAD and MPF; 20 controls on-the-spot following OLAF s requests; processing 31 information notes transmitted by DLAF to PARDF; 159 answers to the requests of documents and information submitted by NAD, DLAF, PGI; control missions for identifying the conflict of interests as regards 85 payment claims at the request of the Internal Audit Directorate (2004). The analysis and verification of the intimations/requests submitted by other control bodies was concluded in 2009 by: 38 answers to OLAF s requests following certain intimations processed by this institution or the transmission of information regarding certain projects; 3 controls carried out following the notification of DLAF, NAD, MPF; 10 controls on-the-spot following OLAF s request; 94 answers to the requests of documents and information submitted by NAD and DLAF; 4 answers to PGI s requests; II. The verification of the projects after the execution of the final payment (Ex-post control) The ex-post control became possible following the setting up of the ex-post control unit within the Control and Antifraud Directorate by G.O. no.13/2006. The control missions regarding the verification of the projects on the ex-post sample aimed at the verification of the following criteria related to the maintenance of the eligibility, criteria that were established according to the provisions of MAFA: keeping the location (placement) of the production activity co-financed according to the contract and Financing application; keeping the nature of the ownership on all the infrastructure elements; keeping the nature of the ownership on the production means; keeping the implementation conditions provided in the contract; granting an unjustified advantage to a company or public body; keeping the specific activity provided in the contract and Financing application; ceasing the co-financed production activity. According the ex-post control plans, starting with 2006, until 2009, 231 projects were verified as follows: Ex-post verifications in projects under Measures 1.1, , 3.4 Following the verifications irregularities without financial implications were found. Ex-post verifications in projects under Measures 1.1, 2.1, 3.1, 3.4 As a result of the verifications, the following were found: - irregularities with financial implications on 5 projects; - irregularities without financial implications on 45 projects; 123

124 Ex-post verifications in projects under measures 1.1, 2.1, 3.1, 3.4 As a result of the verifications, the following were found: - irregularities with financial implications on 2 projects; - irregularities without financial implications on 59 projects; Following the control mission, CAD issued the Control Reports related to the respective missions and the General Director approved them. During the main findings and recommendations given subsequent to the control missions and included in the control reports referred to the following deficiencies: a) Irregularities without financial implications: non-compliant advertising banners, sanitary, sanitary-veterinary and environment endorsements expired or under updating; not informing PARDF on the change of the legal/technical representative; incorrectly registering the investment in the financial-accounting documents; investments affected by natural disasters under remedy and repair of the effects of the natural disasters; clarification of the legal status on buildings and lands following the finalization of the investment; the conclusion of the contracts related to the maintenance and operation of the investments as regards the water supply and sewerage of the localities, with operators authorized by the National Regulatory Authority for Public Services Community Services (NRAPSCS); roads with deteriorated parts under repair. b) Irregularities with financial implications: not using the procured goods according to the specifications provided in the financial application and technical project; withdrawing the classification certificate by the National Tourism Authority; ceasing the production activity. CAD considered that the above-mentioned irregularities without financial implications do not influence the eligibility of the projects. As regards the verified projects where irregularities with financial implications were found, these were submitted to monitoring until the remedy of the deficiencies. As regards the projects under monitoring, in case the beneficiaries did not fulfilled PARDF s requests according to the contractual provisions, the procedure for the recovery of the non-reimbursable financial support was launched. This situation was identified for 2 projects. As regards the projects where irregularities with financial implications were found, the Control reports proposing the making of the debt were drawn up and the debt s recovery procedure was launched. Starting with 2007 the experts within the ex-post control unit together with the councillors within CAD and other directorates, took part at the processing and settlement of certain intimations, complaints and recommendations of other authorities having control attributions, as follows: 20 projects were verified ex-post and monitored in order to give answers to the findings and recommendations issued by the Audit Authority within the Romanian Court of Accounts; 124

125 answers were given to the findings and recommendations issued by the Internal Audit Directorate within PARDF; answers were given to the requests of OLAF, Prosecutor s Office, DLAF, answers that were based on the control of the projects; the intimations submitted by the citizens and media were settled, by carrying out documentary control, and for part of them on-the-spot control; performing the monitoring activity on 85%of the projects verified on-the-spot, in order to remedy the deficiencies found following the controls. Ex-post verification in 2009 During 2009, when the ex-post control activity was decentralized at the level of the regional structures, the activities specific to the ex-post control were performed by both the ex-post unit within CAD and the Finalized Projects Control Office set up at the level of PRCRDF. The ex-post activities were performed in order to give a reasonable assurance regarding the maintenance of the eligibility for the Community co-financing, namely that the projects were not substantially modified during a period of 5 years since the final payment was executed by PARDF. Thus, the following ex-post activities were carried out in 2009: The Ex-Post Control Unit within the Control and Antifraud Directorate During 2009 the following ex-post activities were carried out: - on-the-spot control, according to the Ex-post control plan, on 67 projects, distributed as follows: - Measure projects; - Measure projects; - Measure projects; - Measure projects; - Measure project; Out of the 67 projects verified on-the-spot by the Ex-post Control Unit in 2009, 52 projects represent the 10% sample (established based on risk analysis) out of the projects verified onthe-spot by the regional centers; the remaining 15 projects were included in the control plan following certain intimations submitted by IAD, the Audit Authority within the Romanian Court of Accounts, DLAF, OLAF, etc. - on-the-spot control, in addition to the ex-post control plan on 2009, following the registration at PARDF of intimations and complaints received from the citizens, EC, the Audit Authority within the Romanian Court of Accounts, DLAF, OLAF, and as a result of PARDF self-intimations on 7 projects, distributed as follows: - Measure project; - Measure projects; - Measure project; - Measure projects; out of which: o 2 projects verified as a result of PARDF self-intimation; o 2 projects verified following the complaints of the citizens; o 1 project verified following DLAF s intimation; 125

126 o 1 project verified following the recommendations issued by the Audit Authority within the Romanian Court of Accounts; o 1 project verified following EC s intimation. - 7 projects were monitored in order to give answers to the findings and recommendations issued by the Audit Authority within the Romanian Court of Accounts. As regards 3 projects out of the 7, an ex-post control shall be performed in 2010; - elaborating the database necessary for drawing up the ex-post control plan to be implemented in 2010 at both regional and central levels; - drawing up the Control Minutes with acknowledgement of the debt and of the Decisions for the settlement of the appeals against the acknowledgement of the debt; - drawing up and editing the answer to DG AGRI s observations; The Ex-post Control Unit performed monitoring activities on the projects verified on-thespot, in order to remedy the deficiencies found following the on-the-spot controls. The monitoring activity covered approximately 85% out of the verified projects. Following the control missions, CAD issued the control reports related to the respective missions and the General Director approved them. At the same time, the Ex-post Control Unit within CAD verified, through the ex-post control plan, the manner the experts within the regional structures having ex-post attributions observed the procedural provisions related to this type of control. the Finalized Projects Control Offices within the Paying Regional Centres for Rural Development and Fishery The FPCO set up at the level of PRCRDF carried out during 2009 verifications on 500 projects under SAPARD Programme, distributed on regions as follows: Total number of projects/ Measure 1.1 Measure 2.1. Measure 3.1 Measure 3.4 Region PRCRDF PRCRDF PRCRDF PRCRDF PRCRDF PRCRDF PRCRDF PRCRDF Total The ex-post control was performed by FPCO as follows: - during January 1 st 2009 and August 16 th 2009 the ex-post control was carried out in compliance with the provisions of the Procedures manual on control and antifraud G9-CA, version 02, consolidated by Instruction no. 118; - during August 17 th 2009 December 31 st 2009 the ex-post control was carried out in compliance with the provisions of the Procedures manual on control and antifraud G9-CA, version 03, consolidated by Instruction no Following the control missions the related Control Notes were drawn up and approved. 126

127 The main findings and recommendations issued following the control missions and included in the control reports refer to the following deficiencies: a) irregularities without financial implications: non-compliant advertising banners; sanitary, sanitary-veterinary and environment endorsements expired or under updating; not informing PARDF on the change of the legal/technical representative; incorrectly registering the investment in the financial-accounting documents; not updating the public domain inventory by including the investment implemented under SAPARD Programme as regards the public beneficiaries; investments affected by natural disasters under remedy and repair of the effects of the natural disasters; clarification of the legal status on buildings and lands following the finalization of the investment; the conclusion of the contracts related to the maintenance and operation of the investments as regards the water supply and sewerage of the localities, with operators authorized by the National Regulatory Authority for Public Services Community Services (NRAPSCS); roads with deteriorated parts under repair; As regards the projects where irregularities without financial implications were found, these were submitted for monitoring until the remedy of the deficiencies. b) Irregularities with financial implications: not using the procured goods according to the specifications provided in the financial application and technical project; ceasing the production activity, alienating the goods procured under SAPARD Programme and registering certain negative economical-financial results. As regards 22 projects where following the controls irregularities with financial implications were identified, control reports/control notes were drawn up by proposing the making of the debt and the debts recovery procedure was launched according to the legislation in force. In the case of 3 projects it was found that the beneficiaries were subject to the insolvency procedure in order to be re-organized. Thus, the Legal Directorate was informed in order to submit PARDF s request to be part of the creditors assembly. As a result of the ex-post control activity s findings, the following measures were proposed and monitored: the remedy of the found deficiencies; exchanging correspondence with the beneficiaries in order to remedy the deficiencies found on-the-spot; giving deadlines in order to accomplish the remedy works for the deficiencies found on the projects financed under SAPARD Programme; drawing up the finding minutes in order to recover the non-reimbursable financial support as regards the projects where irregularities with financial implications were identified; re-verifying on-the-spot certain projects during 2010 in order to control the manner the beneficiaries implemented the recommendations issued by FPCO. Summary of results of controls carried out per measure and indication of percentage of beneficiaries as partly or fully compliant The results of CAD controls on measures and the percent for the beneficiaries partly or entirely non compliant subsequent the sample verification, prior the last payment execution, are the following: 127

128 Measure projects out of which 33 projects (89.19%) were found with no irregularities or the irregularities found had no financial implications and 4 projects (10.81%) were found with financial implications irregularities. In 2009 out of 7 verified projects 5 projects were found with no irregularities (71.42%) and 2 projects were found with irregularities (28.57%). Measure projects out of which 78 projects (76.47%) were found with no irregularities or the irregularities found had no financial implications and 24 projects (23.53%) were found with financial implications irregularities. In 2009 out of 30 verified projects 26 projects were found with no irregularities (86.66%) and 4 projects were found with irregularities (13.33%). Measure projects out of which 110 projects (89.44%) were found with no irregularities or the irregularities found had no financial implications and 13 projects (10.56%) were found with financial implications irregularities. In 2009 out of 16 verified projects 14 projects were found with no irregularities (87.5%) and 2 projects were found with irregularities (12.5%). Measure projects out of which 54 projects (80.60%) were found with no irregularities or the irregularities found had no financial implications, 10 projects (14.92%) were found with financial implications irregularities and 3 projects (4.48%) entirely non compliant (cancelled projects). In 2009 out of 30 verified projects 24 projects were found with no irregularities (80%) and 6 projects were found with irregularities (20%). Measure projects (100%) were found with no irregularities or the irregularities were with no financial implications. In 2009 out of 8 verified projects 7 projects were found with no irregularities (87.5%) and 1 project was found with irregularities (12.5%). Measure projects (100%) were found with no irregularities or the irregularities were with no financial implications. 5.3 List of irregularities detected and notified to OLAF and description of measures taken (and recoveries made) Situation of reporting the irregularities found by various control attribute bodies regarding the way of using the European funds (OLAF, DLAF, NAD) during 2008 and 2009 is presented in Annex no. 2. We mention that for the reports mentioned, PARDF has not established the debts at the level of 2008 and 2009, but were set up debts at the level of 2010, or undergo investigations within 128

129 different bodies with attributions in this respect, following that at the end of these investigations, PARDF would apply the measures that are imposed. Debtors status in 2004 In 2004, 32 debts were made up in amount of 417, lei (102, Euro at the exchange rate at the date of debts making up). All these debts were entirely recovered and the recovered amount is 417, lei (103, Euro at the exchange rate at the date of debts making up). Also, as a result of failure to pay in due time the debt amounts delay penalties were set up and recovered in amount of 8, lei. For the debts made up in 2004 no appeals were submitted. Measure M 1.1 M 1.2 M 2.1 M 3.1 M 3.3 M 3.4 M 3.5 Total 2004 No. of debts Debtors status in 2005 In 2005, 71 debts were made up. Out of these debts 5 were cancelled following some decisions issued by PARDF or by the national competent bodies. The debts were in amount of 2,689, lei (738, Euro at the exchange rate at the date of debts making up). Out of the 66 debts 64, in amount of 2,632, lei (714, Euro at the exchange rate at the date of debts making up), were recovered. Delay penalties were made up in amount of 961, lei and were recovered. The 2 debts remained to recover were submitted for forced foreclosure procedure and the amount afferent to the EC contribution was prescribed. For 2005, 7 administrative appeals were submitted and 16 appeals to the national competent courts. Measure M 1.1 M 1.2 M 2.1 M 3.1 M 3.3 M 3.4 M 3.5 Total 2005 No. of debts Debtors status in 2006 In 2006, 64 debts were made up. Out of these debts 4 were cancelled following some decisions issued by PARDF or by the national competent bodies. The 60 debts were in amount of 5,433, lei (1,541, Euro at the exchange rate at the date of debts making up. Out of these debts 56 were recovered in amount of 2,106, lei(579, Euro at the exchange rate at the date of debts making up), whereas the delay penalties made up and recovered were in amount of 689, lei. The debts remained to recover were submitted for forced foreclosure procedure and the amount afferent to the EC contribution was prescribed. In 2006, 19 administrative appeals were submitted and 16 appeals to the national competent courts. Measure M 1.1 M 1.2 M 2.1 M 3.1 M 3.3 M 3.4 M 3.5 Total 2006 No. of debts

130 Debtors status in 2007 In 2007, 83 debts were made up. Out of these debts 8 were cancelled following some decisions issued by PARDF or by the national competent bodies. The made up debts were in amount of 15,035, lei (4,492, Euro at the exchange rate at the date of debts making up. Out of the 75 debts 66 were recovered in amount of 7,951, lei (2,184, Euro - at the exchange rate at the date of debts making up whereas the delay penalties made up and recovered were in amount of 1,441, lei. The 11 remained to recover were submitted for forced foreclosure procedure and the amount afferent to the EC contribution was prescribed. In 2007, 32 administrative appeals were submitted and 8 appeals to the national competent courts. Measure M 1.1 M 1.2 M 2.1 M 3.1 M 3.3 M 3.4 M 3.5 Total 2007 No. of debts The 11 debts constituted in 2007 and written off in 2009 are the following: Number of the debt sheet Date of the debt sheet Debtor Code of the financing contract May-07 SC TERALUCA METAL CONSTRUCT SRL C May-07 CL PAULESTI PRAHOVA C Jun-07 AF LUPU NICOLAE RASINARI SIBIU C Jul-07 SC SUPER MAX SRL SALAJ C Aug-07 CL PAULESTI PRAHOVA C Aug-07 CL VOINESTI DAMBOVITA C Aug-07 SC CASA CRISTINA SRL C Oct-07 ACL POPRICANI IASI C Oct-07 CL VLADENI IASI C Nov-07 SC SAFIR COM SRL C Nov-07 CL ROZAVLEA MARAMURES C Debtors status in 2008 In 2008, 150 debts were made up. Out of these debts 15 were cancelled following some decisions issued by PARDF. The amount of the 135 debts is of 21,752, lei (6,022, Euro at the exchange rate at the date of debts making up). Out of these debts 82, in amount of 5,756, lei (1,511, Euro at the exchange rate at the date of debts making up), were recovered whereas the delay penalties made up and recovered were in amount of 172, lei. The debts remained to be recovered were submitted for forced foreclosure procedure and the amount afferent to the EC contribution was prescribed. In 2008, 82 administrative appeals were submitted and 1 appeal to the national competent courts. 130

131 Measure M 1.1 M 1.2 M 2.1 M 3.1 M 3.3 M 3.4 M 3.5 Total 2008 No. of debts Debtors status in 2009 In 2009, 118 debts were made up. Out of these debts 10 were cancelled following some decisions issued by PARDF. The amount of the 108 debts is 59,102, lei (14,012, Euro at the exchange rate at the date of debts making up). The high amount of these debts is due to the existence of a large number of projects with high amount which were cancelled. Out of these debts 15, in amount of over one million lei, were cancelled. Out of 108 made up debts 47 were recovered, in amount of 4,051, lei (1,511, Euro at the exchange rate at the date of debts making up). Also, delay penalties were recovered in amount of 124, lei. All the debts which failed to be paid in due time by the beneficiaries were submitted to the competent bodies for forced foreclosure procedure. 62 administrative appeals were submitted by the beneficiaries. Measure M 1.1 M 1.2 M 2.1 M 3.1 M 3.3 M 3.4 M 3.5 Total 2009 No. of debts Currently, 108 debts are registered in the Debtors Ledger. The cancelled debts out of those constituted in 2009 are the following: Number of the debt sheet Date of the debt sheet Debtor Code of the financing contract /01/2009 SC ALINVEST TOUR SRL C /01/2009 SC MARIA TRADING SRL C /01/2009 SC MARIA TRADING SRL C /06/2009 SC LABORATOARELE FARES BIO VITAL SRL C /06/2009 CL DELENI IASI C /06/2009 CL PLUGARI IASI C /06/2009 SC EURO-CASA PROD SRL C /07/2009 ACL TANSA IASI C /11/2009 SC TRANS-ANBER SRL C /12/2009 CL SACELU GORJ C A detailed list including all the debts made up during is presented in Annex no. 3. Diminished debts Information regarding the diminishing of some debts is provided in the column Comments within the Debtors Ledger. Also, the Debtors Ledger includes a column providing the Amount of the initial debt which in case of diminished debts is different from the Debt s amount in lei. 131

132 According to the data provided in the Debtors Ledger, the following debts were diminished: No. of debt sheet Date of debt sheet Debtor Amount of initial debt Amount of the debt in lei /08/2007 CL TATARANI DAMBOVITA 110, , /08/2007 CL VOINESTI DAMBOVITA 38, , /08/2007 SC ITALOVINI SRL 64, , /01/2008 CL SAGNA NEAMT 236, , /01/2008 CL BUCHIN CARAS SEVERIN 54, , /03/2008 CL IORDACHEANU PRAHOVA 274, , /10/2008 SC TRANSIM SRL 202, , /01/2009 ACL TIGANASI - PROBOTA 285, , /01/2009 SC TURUL 2004 SRL HARGHITA 78, , /03/2009 SC NOVA HYGEIA SRL 319, , /05/2009 SC LEGOFRUCT SRL 501, , /07/2009 SC PASTOREL SRL 1,303, , /07/2009 D.S.V.S.A. SUCEAVA 45, , /01/2010 CL PLUGARI IASI 3,483, , /09/2010 SC ELECTRICA SA 113, , Regarding the debt made up to the Local Council of Tatarani Commune, Dambovita County: The High Court of Justice issued the Decision 895/ , related to the case 168/42/2008, through which the Decision / , regarding the appeal settlement, and the Minutes / , were partly cancelled, i.e. the amount of 89, lei, as this amount represented an eligible expenditure for the goods (structure installation works and equipment related to the electrical systems) which will remain in the ownership of the network s user and not of the network s operator. 2. Regarding the debt made up related to the Local Council of Voinesti, Commune, Dambovita County: Through the civil injunction 111/ , issued regarding the case 2050, 8/42/2007, the Court of Appeal Ploiesti partly admitted the proceeding submitted by the Local Council of Voinesti Commune and decided the partly cancelling of the Control Minutes 878/ in the way that the debt amount of this beneficiary, as non-eligible expenditures, is not of 38, lei but of 14, lei. The last amount represents the non eligible amount as these expenditures represent the amount of the installations which pertained to SDFEE Targoviste s patrimony and not to the beneficiary as per the financing provisions. We mention that the appeal submitted by PARDF against this Decision was rejected by the High Court of Justice which means that the Decision issued by the Court of Appeal Ploiesti remained definitive and irrevocable. 3. SC Italovini SRL the debt was diminished due to partly admission of the appeal, due to: 132

133 The conflict of interests uncovered could not be considered as the responsibility of the beneficiary who managed to fulfill the contract s terms regarding the selecting of a complying tender from a single supplier. According to the SAPARD procurement procedures the beneficiary was not obliged to get three offers and only one compliant offer was enough. However, this contract term was observed by the beneficiary. The supplier of designing services, which was not entitled to carry out the design activity because of missing of this object of activity, was identified in the documents provided by the Office of the Romanian Trade Register as having the structure designing as the secondary object of activity. As result of this evidence the appellant was exonerated from the obligation to pay the amount of 37,812.9 lei. 4. LC SAGNA Neamţ - The debt representing the arrangements of the cross roads was cancelled, as the spot verifications revealed that two of them had already been arranged whereas the other two were yards entrances and needed no arrangements. - The debt regarding the small bridges was cancelled, as the document and the spot verifications revealed that the amount of the small bridges was higher than the amount paid. Out of the payment stages resulted that 17 small bridges had been paid whereas 21 completed similar bridges were identified on the spot verifications. 5. LC BUCHIN, Caraş Severin The debt in amount of 13, lei which was cancelled through the Decision of settlement of appeal had been made up by PARDF because the company which executed the structure works included in the indirect expenditures estimate a percent of 9.5%, whereas the works stage list, submitted to DLAF, provided 5.5% as indirect expenditures. The debt was cancelled because 5.5% indirect expenses were paid, therefore no differences of direct expenditures between the tender and what was paid were found. 6. LC IORDĂCHEANU, Prahova County - 12,500 lei for the site management because the contract between the Local Council IORDACHEANU and SC CORIMEX INTERNATIONAL SRL was concluded on whereas the deadline for the debts accumulated by the company was on and the amounts in the above mentioned certificate cannot be considered outstanding debts to the state budget. - 5,600 lei for the design verification services because the issue signaled by DLAF was not an irregularity able to influence the contract s eligibility. It was a human error which, however, did not result in the prejudice of the community funds (the certificates submitted by the project s verifier were submitted after the date of contract s signing) , lei profit of SC CONDORII SULT SRL because the tender company, SC CONDORII SULT SRL, was eligible at the date of contract s signing and DNA, through the Decision on the date , decided the non suite on the persons involved in the project s development in the case suspicion of forgery and use of forgery, signaled by DLAF. - Later on, the project was cancelled at the request of OLAF. 7. SC TRANSIM SRL, Arges County The debt was diminished and the profit from the works execution contract was retained because although no conclusive evidence was found, the suspicion that the 133

134 work had been executed by another company besides the winning one was maintained. 8. LCA ŢIGĂNAŞI, Probota The appeal was partly admitted because the company which executed the design (IPTANA) was accused of debts to the state budget. However, it was proved that the debts had been paid prior the contract s signing and therefore the debt was diminished with the amount of 96, lei, representing the amount of the designing contract. 9. SC TURUL 2004 SRL, Harghita Irregularity: invoices paid with cash by the beneficiary Through the Decision of settlement of appeal the debt was recalculated based on the financial document submitted within the payment installment and the reached conclusion was that out of the initial debt of 78, lei the amount considered eligible is subtracted after the calculation, i.e. 38, lei, which resulted in a final debt of 40, lei. 10. NOVA HYGEIA SRL Irregularity: Breaching of the financing contract, Annex IV, procurement provisions for the private beneficiaries, through which the contracts award should have complied with the principle of free competition and transparency and as per Art 293 paragraph g, in Government s Emergency Ordinance no.34/2006 regarding the public procurement, breaching of the non discrimination, free competition and transparency, this case represents a contravention which is sanctioned with penalty, as per article 294 in the same Emergency Ordinance (as also provided in the appeal of the beneficiary). The Annex I of the Financing Contract, article 17 (3), provides that the Contracting Authority is entitled to apply possible sanctions in case of failure to comply with some terms regarding the finding of some irregularities. The Commission of settlement the appeal considered that sanctions could be applied regarding the breaching of non discrimination principle, free competition and transparency. The sanction included the diminishing with 5% (profit) from the payment stages for structure installations works in total amount of 14,849 lei (afferent to the amount of 319, lei). 11. SC LEGOFRUCT SRL The debt in amount of 456,140 lei, made up related to the consultancy services (contract 06/ , concluded between SC LEGOFRUCT SRL and SC EURO AGRI PROIECT SRL) as per Finding Minutes 9930/ , was cancelled because the beneficiary proved that SC ALFA PROIECT SRL, company participating to the tender selection, was established as legal person as well as the date of submission the tenders and the date of closure the selection procedure. 12. SC PĂSTOREL SRL Having in view that the investment was entirely executed in compliance with the submitted project, is operational and no irregularities or prejudices on the non reimbursable funds were identified along the project s execution, as resulted from the verifications of PCORDF Timis and PRCRDF 5 Timisoara, we consider that the cancellation decision taken by the control team regarding the formal aspects rather than the background aspects is discrepant in comparison with the found irregularities. 134

135 Thus, the Commission of settlement the appeal considered as substantiated only the irregularity regarding the purchase the transport vehicles. Therefore, the debt cancellation, through the Finding Minutes / , was determined and making up of a debt in amount of 292, lei (1 st Installment = 161, lei, 2 nd Installment = 131, lei) representing the amount of the purchase for the transport vehicles. 13. DSVSA Suceava The reason of the making up the debt was the splitting of the amount destined to site inspectors (the beneficiary had concluded 3 contracts for site inspector, installations site inspector and electric installations site inspector). The Commission for settlement the appeal considered that when the beneficiary decided the splitting of the amount aimed to the site inspectors was justified in case of the structure site inspector but unjustified in case of the installations site inspectors as one can speak about only two fields of certification (structure and installations) instead of three as the beneficiary considered. Therefore, the debt afferent to the services of structure inspector was cancelled. 14. LC PLUGARI, Iaşi The debt was diminished as following the spot control it was found that the water supplied via the water supply system was not compliant with the drinking characteristics due to the concomitant using of the surface water source through drainage having incompliant drinking characteristics. The Commission for settlement the appeal considered that the only negligence of the project financed through SAPARD Programme is the source of surface water supply and therefore the debt was made up only for the works representing the surface intake source drainage. It was considered that the rest of the water supply system, developed through the SAPARD Programme, was able to ensure the drinkable water to the local population and therefore it was not necessary to recover the financial support. 15. SC ELECTRICA SA The initial debt was made up regarding all the works stages and therefore a correct assessment was carried out for all the paid works which were incompliant with the initial technical design. For these works, the Commission, based on the technical design, the winner tender and payment stages, analytically made up debts on estimate items for each incompliant payment stage included in the Finding Minutes 18905/ Thus, debts were made up only for estimate items remained unexecuted, i.e. 28, lei (50% - 14, lei). However, the unexecuted works does not affect the project s operation. The main irregularities found by the PARDF s control team, which lead to the debts making up within the Finding Minutes and the reasons of their further on cancellation, through the Decisions of settlement the appeals, following the verification of weak points emphasized in the Finding Minutes, were the following: 135

136 One participant to the tender selection failed to have the appropriate object of activity and the representative of this company declared to DLAF that he did not attend the tender selection. The debt was cancelled through the Decision of settlement the appeal because the beneficiary proved that the tender selection participant had the appropriate object of activity and the representative of this company declared, in spite the statement to DALF, that he attended the tender selection procedure. The DNA decided non suite in this case. Non eligible expenditures were authorized for payment representing works including amounts of the materials higher than the one put in operation. The commission of settlement the appeal analyzed the concrete larger enclosed to the payment claim along with the works stage and the sample of material and found that superior brands of concrete were used in terms of quality which required a higher amount of items (cement). Therefore, the amount of material in excess is considered eligible expenditure. Conflict of interest former PARDF expert provided site management services to a SAPARD project. After the verifications carried out at the time of settlement the appeal it was concluded that the above mentioned expert had no implication in the financing application file and therefore, one cannot consider the existence of a conflict of interests. For this reason the debt regarding the site management services was cancelled. The Finding Minutes was drawn up based on the indictment of DNA. The appeal was approved as in legal terms the indictment did not represent evidence. The beneficiary is entitled to benefit from the innocence presumption. The winning company on a tender selection organized by the beneficiary had debts to the state budget. The debt was cancelled after the settlement of the appeal as the beneficiary proved that the company in question did not have debts to the state budget. During the ex-post control it was found that water supply system was not in operation and the beneficiary failed to provide documents proving the system s operation: operation permits, analysis bulletins proving the water drinkability, subscription contract concluded with Apele Romane, Minutes confirming the intake water volumes from the underground, current condition of the individual connections to the public water supply system. During the appeal settlement it was found that all the deficiencies had been remedied by the beneficiary, the investment was operational, had the related permits and the beneficiary provided the documents proving that the public water supply system was operational and proved its public efficiency. Changing of two key experts designing services during the drawing up of the technical design. The decision confirmed that the key experts were replaced from substantiated reasons and the new key experts had the appropriate professional training. Delay at the implementation of the project resulting in the failure to submit the payment claim within the agreed deadline. During the settlement of the appeal it was found that the delay of the project s implementation was not caused by the 136

137 beneficiary but by the legal trial between the beneficiary and the construction company which was delayed and therefore the debt was cancelled. Non operation of the sewage treatment station for a period of time when the building was sealed by the County Police Inspectorate. The debt was cancelled because the non operation of the sewage treatment station was not because of the beneficiary but due to its sealing by the Police until the completion of the legal trial due to the stealing of some equipment from the sewage treatment station. The supplier of the consultancy services had the finding certificate with the provision: issued by Trade Register Office (TRO), code 7412 instead of code 7414 which provided activities for consultancy in business and management. The debt was cancelled because it was found that the code provided in the certificate covered the consultancy activities for which the contract was concluded. We mention that besides the debts cancelled through the Decision of settlement the appeal debts cancelled as result of legal appeals were found. 5.4 Audit missions The stage of implementation regarding the recommendations of the European Commission Between 2000 and 2009 the representatives of the European Commission carried out the following audit missions: 1) Missions related to the clearance of the SAPARD Agency s accounts according to art. 11, Section A from MAFA for the years based on the information sent by the Romanian authorities for the annual accounts and their certification; 2) Missions related to the SAPARD Agency s conformity clearance, according to art. 12, Section A from MAFA: Between June 28 th July 2 nd 2004, for measure 1.1 for 2004; Between October 24 th 28 th 2005, for Measures 1.1, 2.1, 3.1 and 3.4 for 2005; Between September 18 th 22 nd 2006 for Measures 1.1 and 2.1 for 2006; Between September 17 th 21 st 2007 for Measures 1.1, 2.1 and 3.1 for 2007; Between September 8 th 12 th 2008 for Measures 1.2, 3.1, 3.3 and 3.5 for 2008; Between November 23 rd 27 th 2009 for the year 2009 and aimed at verifying the management and control systems and whether the expenditures registered under SAPARD Programme observe the legal dispositions of the European Union. 3) As regards the observance of the accreditation criteria according to MAFA stipulations, an audit mission was carried out in the interval June 3 rd 13 th The main recommendations issued following the above-mentioned audit missions included the following aspects, and their stage of the implementation is presented below: Based on the recommendation related to detailing the control reports for Measures 1.1, 2.1, 3.1 and 3.4 issued in the years 2004, 2005, 2006, 2008 and 2009 the procedure for payments authorization was modified as regards the on-the-spot verifications so as the reports include the details related to on-the-spot and 137

138 administrative verifications, the method and the result of the control, the application of sanctions in case the terms of the project are not observed; As regards the administrative checks related to the feasibility studies from years 2004, 2005, 2006 and partly 2007 for Measure 2.1, the Commission recommended carrying out more detailed verifications as regards the quality and economical data presented in the feasibility studies in order to obtain a reasonable assurance related to the usefulness and feasibility of the design solution. For this recommendation the Romanian Authorities presented explanations and justifying documents as regards the types of controls included in the procedures and in the national legislation related to the feasibility studies so as to prove the usefulness of the project; As regards the identification of the conflicts of interest risk, included in the working procedures for public procurement Measure 2.1, the European Commission agreed to the recommendations of the Romanian Authorities made for the years 2003 and In this respect the, by the measures taken, including the debts making and recovery, Agency proved that addressed this recommendation appropriately. As regards the fairness of prices, the EC auditors recommended the implementation of supplementary procedures able to establish how correct the prices presented by the beneficiaries were. Based on the answers given by the Romanian authorities, the recommendation was closed for years In addition, in order to address this recommendation, in 2009 a procedure was elaborated for the reverification of the procurements made by the beneficiaries of SAPARD Programme. The procedure aimed at the reverification of the procurements as regards the conformity of the submitted offers and the fairness of prices presented by the awarded tender, based on which the supplementary reverifications were carried out; As regards the observance of the segregation of duties principle related to the ex-post controls, the Agency took supplementary and assuring measures by creating an office for the control of finalized projects at the level of each Regional Centre. Improving the Agency s procedures regarding debtors and reporting of irregularities, improving the form and content of the information from the Debtors Ledger and transmitting numerous additional information and supporting documents regarding the stages covered from the discovery of the irregularity to the creation of the debt for a very large number of debts. The Agency has ensured the improvement of its procedures regarding debtors, the modification of the Debtors Ledger and submitted all requested information for the clearance of the accounts audit missions from 2007, 2008 and 2009 for which this recommendation was issued. Until December 2010 the European Commission has not yet communicated any clearance decision regarding the mentioned period. Supplying explanations for exceeding the deadline of 3 months between the date of receiving supporting documents needed to make the payment and the payment execution date to beneficiaries mentioned at art. 8, par. 6, Section A from MAFA. The Agency has submitted the information and supporting documents requested, but until December 2010 the European Commission has not yet communicated any clearance decision regarding the years We mention that the European Commission s Letters of Observations regarding the clearance of the accounts for the years included also observations regarding the work performed by the Certifying Body mainly for the following aspects: regarding the evaluation of errors from the Certifying Body s reports for the years 2007, 2008, the EC auditors recommended that this should be strictly in accordance 138

139 with EC s guidelines and recommendations issued for the sampling and errors evaluation methodology; continuous monitoring by the Certifying Body of the recommendations included in the previous reports issued; but their implementation is the responsibility of the Audit Authority from the Romanian Court of Accounts (Certifying Body). Based on the analysis of the answers and of the justifying documents presented by the Romanian authorities, on the date the present report was issued (May 2011), the stage of the European Commission s missions was the following: following the audit missions for the clearance of the accounts for the years , no financial corrections were proposed by the EC representatives; following the audit mission for the clearance of the accounts for the year 2008, were held two bilateral meetings on the 19 th -21 st of May 2010 and on 13 th of October 2010, following to be received a Decision of the European Commission on the clearance of the accounts of the Agency following the audit mission for the clearance of the accounts for the year 2009, the Agency has submitted during September 2010 to the national authorities (Certifying and Paying Authority within the Ministry of Public Finance) the necessary answers and the supporting documents for the EC s Letter of Observations. following the conformity clearance audit missions carried out in 2004 and 2005, financial corrections were applied for Measures 1.1, 2.1, 3.1 and 3.4, subsequent to bilateral meeting held with DG AGRI representatives and Conciliation Body within the European Commission; following the conformity clearance audit mission carried out in 2006, financial corrections were proposed for Measures 1.1 and 2.1, subsequent to bilateral meeting held with DG AGRI representatives, and to the meeting with the Conciliation Body within the European Commission, as a result of the steps taken in this respect by the Romanian authorities. We mention that after the meeting with the Conciliation Body, the European Commission decided to apply the financial corrections proposed for Measure 1.1 and 2.1; for the conformity clearance audit mission carried out in 2007, were held two bilateral meetings with DG AGRI representatives, on 16th of October, 2008 and 28 th of October 2010 A decision of the European Commission was to be issued regarding the Agency s conformity clearance. Following the conformity clearance audit mission carried out in 2008 a bilateral meeting took place for this audit mission on the 28 th of October A decision of the European Commission was to be issued regarding the Agency s conformity clearance; Following the audit mission carried out in 2008 as regards the observance of the accreditation criteria, subsequent to the elaboration and implementation of an Action Plan by the Romanian authorities, the payments from community funds were resumed in July Also, the European Commission has communicated in October 2010 the decision to not apply financial corrections following this audit mission; Following the conformity clearance audit mission carried out in 2009, in 28 th of October 2010 took place a bilateral meeting, a decision of the European Commission was to be issued regarding the Agency s conformity clearance. 139

140 Audit missions carried out by the Internal Audit Directorate within PARDF Audit missions carried out in 2003 In 2003 the Internal Audit Directorate carried out a number of activities according to the internal audit annual plan for 2003 which was part of the Audit Strategic Plan for , drawn up by the director of the Internal Audit Directorate and approved by the General Director of the Agency on December 20, Thus, the following audit missions were planned and carried out: Audit missions for the 100% reverification of the projects submitted under measures 2.1 and 1.1 during the session from August 2002; The self assessment of the accreditation for measures 3.1, 3.4 and 4.1; The follow-up of the recommendations included in the audit report issued by Deloitte&Touche audit company for the accreditation of measures 3.1, 3.4 and 4.1; The follow-up of the recommendations included in the observation Letters issued by the EC for the accreditation of measures 1.1, 2.1, 4.2, 3.1, 3.4 and 4.1; The follow-up of the recommendations included in the audit report issued by the Certifying Body in April 2003 as regards the certification of the annual accounts for 2002; The follow-up of the recommendations included in the preliminary audit report issued by the Certifying Body in December 2003 as regards the certification of the annual accounts for 2003; The results of the follow-up missions regarding the implementation of the recommendations submitted to the national fund and to the external auditors; Special audit missions referring to the evaluation of the proposals to modify the accredited procedures issued by the following entities: Coordination-Promotion Directorate, Selection-Contracting Directorate, Project Payments Directorate, Technical Assistance and Vocational training Directorate, the Technical Delegated Bodies for the implementation of Measure 1.1 and the Technical Delegated Bodies for the implementation of Measure 2.1. The activities carried out in 2003 by the Internal Audit Directorate were planned and achieved according to the Audit Strategic Plan for and aimed at assuring the management of the Agency a reasonable assurance as regards the following aspects: The structure and the process of verifying the conformity and eligibility of the projects under measure 2.1 were operational the way they were provided in the procedures; The objectives of SAPARD Agency were achieved at the required standards and in compliance with accreditation criteria stipulated in the Multi-Annual Financing Agreement and with the regulations in force (National legislation, requirements of the European Commission); The procedures of SAPARD Agency were observed by all the experts; The financial interests of the EU were protected; Internal controls regarding the pre-authorization of a project, the verifications before executing the payments, the accounting and the payments procedures of SAPARD 140

141 Agency were operational and able to give the reasonable assurance regarding the processes in question; The projects were evaluated according to the accredited procedures, both during the technical and financial implementation stages; The conclusions related to the eligibility of the financing applications and the authorization of the payment claims were executed correctly. The Audit Strategic Plan for was drawn up by the director of the Internal Audit Directorate and approved by the General Director of the Agency on December 20, Subsequent to carrying out these missions, the Internal Audit Directorate issued audit reports which were submitted to the management of SAPARD Agency, the National Fund and to the external auditors. The following summary points out the findings included in the abovementioned reports: a) Sound financial management During the activities carried out in 2003 the external and internal auditors of SAPARD Agency had identified the necessity of a database including prices estimated for goods, raw material and the quantities of materials necessary for the execution of the project or works, so as a type of control could exist as regards the payments under the accredited measures. The management of SAPARD Agency initiated the elaboration of such a database, the process being on going. b) Verifications of the Indicative Budget The internal auditors recommended that the experts involved in the process of payments verification should also verify whether the payments had been included in the chapters of expenditures mentioned in the indicative budget. The management of SAPARD Agency took into consideration the recommendations issued by the Internal Audit Directorate, but for the improvement of the verifications it was necessary for a unitary verification to be performed by the experts within Projects Payments Directorate Payments Authorization Unit. c) The Administrative and Institutional Capacity The internal auditors noticed lacks in the administrative and institutional capacity at the level of the entities involved in the implementation of SAPARD Programme. This aspect could have led to delays in the processes of both projects verification and payments, thus affecting the beneficiaries. The management of SAPARD Agency took into consideration the recommendations issued by the Internal Audit Directorate, but for applying a rigorous verification process, improvements needed to be brought so as the experts within the Projects Payments Directorate Payments Authorization Unit could perform a unitary verification. d) SAPARD Agency s Site The internal auditors thought it necessary that SAPARD Agency s site be updated in compliance with the latest information regarding the modifications brought to the procedures for the accredited measures, which could be of interest for the potential beneficiaries. The management of SAPARD Agency updated the site and appointed a person responsible for its maintenance. e) Cross Checks The internal auditors pointed out the importance of the segregation of duties during the verification of eligibility, process carried out at both central and regional levels, so as the 141

142 quality of the verifications be improved and responsibility of each entity involved in the implementation of SAPARD Programme be enhanced. The recommendation of the Internal Audit Directorate was accepted and put into practice by the management of SAPARD Agency, except for measure 2.1 under which no projects were submitted any longer. f) Double financing The Internal Audit Directorate recommended the Agency to make sure that the verifying experts checked whether the projects received also non-reimbursable funding other than the one allocated through SAPARD Programme. The management of SAPARD Agency decided that before executing the payments reconciliations were to take place between the Agency and other institutions involved in managing other international funds. The recommendation issued by the Internal Audit Directorate was that all the verifications and reconciliations be documented. g) The Reporting System The Internal Audit Directorate recommended the Agency to buy/ develop a software system so as to ensure the monitoring and reporting processes related to the stage of the projects under each accredited measure. SAPARD Agency decided to purchase a VPN system for the implementation of SAPARD Programme in order to improve data security, internet traffic, access restrictions, information security policy, at both central and regional level. h) The quality of eligibility verification The differences as regards the eligible/ non-eligible expenditures and the selection criteria were settled at regional level (Regional Offices for the Implementation of SAPARD Programme). The Selection-Contracting Directorate should have established a percentage (10% for example) from the eligible value of the project in case differences occurred between Regional Offices for the Implementation of SAPARD Programme and the Technical Delegated Bodies. The management of the Agency decided that the differences related to the eligible/ noneligible expenditures and the selection criteria be settled by the experts within the Evaluation- Selection Unit. i) The quality of payments authorization verifications The Internal Audit Directorate recommended that all the documents be correctly and accurately filled in and/or verified by experts, signed, dated and stamped as proof that the verifications had been carried out. Subsequent to the recommendation of the Internal Audit Directorate the quality of the internal documents drawn up by the experts within Project Payments Directorate and the quality of the verifications carried out was improved. j) Information Security and the IT System Both the logical and physical security of Proteus system used by the Project Payments Directorate Payments Accounting Unit was unsatisfactory as compared to the latest updates in the field. Thus, the activity of the IT system was focused on the improvement of the Information Security System. 142

143 k) The on-the-spot checks carried out by the Technical Delegated Bodies The procedure manuals for the experts at regional level did not contain proper indications for the registration of the on-the-spot verifications. Under these circumstances, no records of the on-the-spot verifications were found when the regions were audited. The recommendation of the Internal Audit Directorate was that a report should be drawn up after each on-the-spot visit and the beneficiary should stamp the travel orders of the experts. The management of the Technical Delegated Bodies updated the procedure manuals for measure 1.1 in accordance with the recommendations issued by the Internal Audit Directorate. For measure 2.1 the recommendation was under implementation on that date. l) Specific findings and recommendations issued subsequent to the verification of projects under measure 1.1 Applicant s Guide The conditions regarding the eligible expenditures submitted for payment were stipulated only in the procedure of the Technical Delegated Bodies Directorate for Agriculture and Rural Development Ministry of Agriculture, Forests, Waters and Environment, Section B The Payment Claim and were not included in the Applicant s Guide. The Applicant s Guide should have been correlated with all the requirements mentioned in the procedure of the Technical Delegated Bodies. The management of the Technical Delegated Bodies for measure 1.1 agreed the implementation of the recommendations issued by the Internal Audit Directorate. The Business Plan The experts within the Agency/ Technical Delegated Bodies verified only the accuracy of the figures in the tables containing the financial indicators without analyzing and concluding on the economical-financial performance of the beneficiary. The information given by the Financial Statements should have been used for the analysis of the economical viability of the beneficiary and of the veracity of the Financial Plan. The management of the Agency agreed the implementation of the recommendations issued by the Internal Audit Directorate. m) Specific findings and recommendations issued subsequent to the verification of projects under measure 2.1 Procurements According to the procurements procedure, the experts within the Procurement Unit verified the procurement dossiers for the projects submitted under Measure 2.1 only from procedural point of view. Subsequently, during the stages of pre-authorization and authorization of payments, the contents of the procurement dossiers were not verified in detail as regards the validity and accuracy of the documents. The public procurement procedure should have included clear references regarding the detailed verifications performed in terms of the validity of the documents annexed to the procurement files. The management of the Agency agreed the implementation of the recommendations issued by the Internal Audit Directorate. Audit missions carried out in 2004 In compliance with the audit plan for 2004, the Internal Audit Directorate carried out the following activities: 143

144 Audit missions to SAPARD Agency s central level. The following directorates were audited: Selection Contracting Unit Selection Evaluation Unit, Public Procurement Unit, Contracting Unit; Payment Projects Directorate Payment Authorization and Debts Recovery Unit, Payments Execution Unit, Accounting Unit; Human Resources Directorate; Economic Directorate; IT Unit; 100% Re-performance for Measure 3.1, Measure 3.4 and Measure 4.2; Follow up of the recommendations mentioned in Letters of Observation issued by EC for the accreditation of Measure 1.1, Measure 2.1, Measure 4.2, Measure 3.1, Measure 3.4 and Measure 4.1; Follow up of the recommendations made by the European Commission on the Instructions for amending the procedures; Follow up of the recommendations mentioned in the audit reports issued by the Certifying Body in December 2003 and April 2003 regarding the certification of the annual accounts for 2003; Follow up of the recommendations made by IAD s reports on the 100% reperformance audit mission for measures 1.1 and 1.2; Special audit missions regarding the assessment of the proposals to modify the accredited procedures made by the following entities of SAPARD Agency: Programmes Coordination Directorate, Promotion, Communication and Mass Media Relations Directorate; Selection Contracting Directorate; Projects Payments Directorate; Technical Assistance and Vocational Training Directorate; Control and Antifraud Directorate; Special audit missions carried out at the request of the SAPARD Agency s Director General, which aimed at: verifying the manner in which the pre-authorization payments procedures and the period for carrying out the checks by the ROISP 3 Targoviste s staff are observed; assessing the knowledge of ROISP s staff involved in the implementation of the new procedures for payments pre authorization for Measure 2.1; Assessing the responsibilities of the SAPARD Agency s staff provided in the job description; verifying the manner in which the procurement procedure and the instruction related to the verification of the conflict of interest for Measure 2.1 by the Iasi ROISP s staff is observed; classifying the issues related to the calculation and the reimbursement of the supply rate for the materials of the works from the works tables. The Internal Audit Directorate carried out audit missions regarding the Measures 1.1, 2.1, 3.1, 3.4 and 4.2 to the SAPARD Agency, to the Regional Offices and Delegated Technical Units in order to provide the Agency s management with reasonable assurance on the following issues: The structure and the verification process of the compliance and the eligibility of the financing applications and the payment requests for these measures were operational as provided for in the procedures; The projects were assessed according to the accredited procedures, both in the technical implementation stage and in the financial implementation stage; The procedures for assessing the eligibility of the financing applications and for authorizing the payment claims lead to the correct conclusions; The SAPARD Agency s procedures were observed by the experts; The internal controls related to the project s pre-authorization, pre-payment checks, accountance and payment procedures of the SAPARD Agency were operational and provided reasonable assurance on the process; 144

145 The objectives of the SAPARD Agency were implemented to the standards required and in accordance with the accreditation criteria set out in the Multi- Annual Financing Agreement and with all applicable regulations. (National Regulations, the European Commission regulations); The EU financial interests were protected. The main findings and recommendations of audit reports issued in 2004, and the manner in which the SAPARD Agency s management handled them, were as follows: a) Sound financial management During the activities carried out in 2004, the SAPARD Agency s internal auditors found that a database with prices estimated for goods, materials and quantities of materials needed in the implementation of the project, of the works, etc, in order to have a better control of the payments executed for the accredited measures. The SAPARD Agency s management initiated the drawing up of such database, the process is ongoing. b) The adequate protection both of the European Union and Romania s financial interest. During the audit missions carried out in 2004, the internal auditors verified the correctness and the accuracy of the manner in which the payments were executed for the SAPARD Programme s accredited measures. In this respect, audit missions which aimed at checking the observance of the procedure manuals for verifying the payment claims were carried out. Internal auditors made recommendations which aimed at correcting the found deficiencies. In those cases in which it was found that an undue payment was executed to the beneficiaries, the internal auditors requested to start the procedure for making of a debt in order to recover all the undue paid amounts. The SAPARD Agency s management approved the recommendations of internal auditors and ordered to undertake some actions in order to implement the recommendations made by internal auditors. c) Simplifying the procedures for verifying the projects and descentralizing the verification process for Measures 1.1, 2.1, 3.1 and 3 4. In 2004, SAPARD Agency initiated proposals for modifying the accredited procedures aiming at decentralizing the verification of the projects by delegating the responsibilities and tasks from the SAPARD Agency s central level to the Regional Offices. Also, the procedures were modified in order to remove redundancies and overlapping between the tasks of the various entities involved in the verification process. The Internal Audit Directorate assessed these proposals in order to make sure that as a result of the proposed modifications, the accreditation criteria are still observed. The internal auditors recommended the maintenance of a supervising and monitoring function at central level if the verification system would be descentralized. The SAPARD Agency s management considered the recommendations of the Internal Audit Directorate and improved the proposals for the modification of the procedures. d) Prevention, approach and settlement of the conflict of interest During the audit missions, following the findings made by the internal and external auditors of susceptible cases which may rise some conflict of interests and the recommendations, a verification procedure was drawn up in order to prevent the occurrence of similar cases in the future. The internal auditors assessed this procedure and made recommendations regarding its content. 145

146 Likewise, following the finding of some conflict of interest, the internal auditors made recommendations regarding the making of the debts for the verified projects. The SAPARD Agency s management approved the recommendations made by the internal auditors and undertook the necessary measures in order to correct the deficiencies found and to recover the debts. e) Double checking The internal auditors emphasized the importance of ensuring the separation of responsibility during the check of the eligibility carried out both at central and regional levels, in order to improve firstly the checks quality and to increase the responsibility of each entity involved in the implementation of the SAPARD Program. The recommendation made by the Internal Audit Directorate has been accepted and endorsed by the SAPARD Agency s management. f) Double financing The Internal Audit Directorate recommended SAPARD Agency to make sure that the experts had verified whether the projects also received other non-reimbursable funds then those granted under SAPARD Programme. The SAPARD Agency s management decided that reconciliation between the Agency and other institutions involved in the management of other international funds shall be made before the execution of the payments. The Internal Audit recommended that all the verifications and reconciliations carried out shall be documented. g) Accuracy of accounts The Internal Audit Directorate made recommendations aiming at improving the manner in which the accounts are drawn up, in order to fairly reflect the current situation. The SAPARD Agency s management started to implement the recommendations regarding the improvement of the accounting system. h) The quality of the verifications of the payments authorization The Internal Audit Directorate recommended that all the documents are properly and accurately filled in and/or checked by the experts, signed, dated and stamped as a proof that the verifications were made. Internal Audit Division recommended that all documents are properly and accurately completed and / or reviewed, signed, dated and stamped by the experts as proof that the checks were made. Following the recommendation made by the Internal Audit Directorate, the quality of the internal documents drawn up by the Project Payments Directorate and the quality of the carried out checks were improved. i) Verifying the Business Plan Following the checks, it was found that the procedures require only to verify whether the correct of the figures in the tables which contain only the financial indicators without analyse and conclude on the economic financial performance of the beneficiary. The Internal Audit Directorate recommended that the information provided by the Financial Statements to be used in order to analyse the economic viability of the beneficiary and the reality of the Financial Plan. The SAPARD Agency s management approved to implement the recommendations made by the Internal Audit Directorate. 146

147 j) Information Security and IT System Both the logical and physical security of the Proteus System used by the Project Payments Directorate Payments Accounting Unit was unsatisfactory as compared the latest updates in the field. Thus, the activity of the IT system was focused on the improvement of the Information Security System. k) Verifying the procurement files for the projects related to the Measure 2.1 According to the procurement procedure, the experts of the Procurement Unit carried out only a procedural verification of the procurement files for the projects of Measure 2.1. Subsequently, in the stage of the pre-authorization and authorization of the payment, the content of the procurement files were no longer verified in detail in terms of validity and accuracy of the documents. The public procurement procedure should include clear references regarding the detailed checks of the validity of the documents attached to the procurement files. The SAPARD Agency s management approved the implementation of the recommendations made by the Internal Audit Directorate. Audit missions carried out in 2005 In 2005, the Internal Audit Directorate carried out a series of activities according to the Annual Plan for 2005 and the Audit Strategic Plan , as well as at the request of the SAPARD Agency s General Directorate. The audit missions carried out by the Internal Audit Directorate aimed at verifying the following issues: The self-assessment process for the accreditation of the Measures 1.2; 3.2; 3.3 and 3.5; Auditing the entities from central, regional and county levels for Measures 3.1 and 3.4; Follow up missions of the implementation stage of the recommendations included in the audit reports regarding the re verification of the 100% process ( 100% reperformance ) for Measure 2.1, Measure 1.1, Measure 3.1, Measure 3.4 and Measure 4.2 (according to the European Commission s request); Verifying the manner in which the budgetary allocations are used and the manner in which the national legislation regarding the public procurement is observed by the Economic Directorate; Verifying the completeness, accuracy and veracity of the accounts of the SAPARD Agency accounting system; monitoring the technical assistance project for strengthening and extending the applications system in the Communication and IT Technology for the SAPARD program; audit missions carried out at the level of SAPARD Agency s Directorates: Economic Directorate and Control and Antifraud Directorate (in compliance with MAFA s provisions). special audit missions related to the assessment of the proposals for modifying the accredited procedures (according to the Director General s request); monitoring the implementation stage of the recommendations included in the previous reports issued by the Internal Audit Directorate; monitoring the implementation stage of the recommendations made by the external auditors and assisting them (European Commission, Romanian Court of Accounts, European Court of Accounts). 147

148 The Internal Audit Directorate Missions were carried out in order to provide the Agency s management a reasonable assurance on the following issues: The structure and the verification process of the compliance and eligibility of the projects for measures 1.1, 2.1, 3.1, 3.4 were functional as they were referred to in the procedures; SAPARD Agency s objectives were achieved at the required standards and were in accordance with the accreditation criteria provided for in the Multi-Annual Financing Agreements with all the regulations in force (national legislation, EU s requirements) and with all regulations (national legislation, the European Commission requirements) The experts observed the Agency s procedures; The EU financial interests were protected; The internal controls regarding the pre-authorization of the projects, the verifications carried out prior to the payments execution, the payment and accounting procedures of the SAPARD Agency were operational and ensured a reasonable assurance on the process; The projects were assessed according to the accredited procedures, both during the technical and financial implementation; The conclusions regarding the eligibility of the financing applications and pre authorization of the payment claims were correct; The proposal for modifying the procedures ensured the verification of the compliance with the MAFA s provisions; In order to implement the recommendations of the internal and external auditors, the appropriate measures were undertaken. Following the performance of these audit missions, the Internal Audit Directorate issued audit reports which were submitted to the SAPARD Agency s management, to the National Fund and the external auditors within the Audit Authority of the Romanian Court of Accounts, European Commission and the European Court of Auditors. The main findings and recommendations made following the audit missions and presented in the audit reports drawn up in 2005 aimed at the following deficiencies: a. The principles of a sound financial management According to the MAFA s provisions, the assessment of the projects shall be carried out by observing the principles of a sound financial management. In order to observe this principle, the Agency s staff should have an indicative database containing the estimated prices of the main goods, raw materials and quantities of materials necessary for the execution of the project, works, etc. The recommendation of the internal audit regarding the setting up of a database with prices in the field used for the object of the financing application was being under implementation at that time. Thus, the database is being to be delivered during the first quarter of 2006 and be regularly updated until February 21 st, b. Protocols signed with the entities involved in the implementation of the new measures 1.2, 3.2, 3.3 and 3.5 On the date the Self assessment report regarding the accreditation of the new measures 1.2, 3.2, 3.3 and 3.5 was issued, no protocol with the entities involved in the implementation of these measures was signed, namely the Ministry of Agriculture, Forests and Rural Development, the Ministry of Environment and Water Management, the Ministry of Health, 148

149 National Sanitary Veterinary and Food Safety Agency. Following the recommendations of the internal audit, protocols of collaboration with the entities above mentioned were signed. c. Activity of the technical delegated bodies Although the Delegation Framework Agreement provided that the Technical Delegated Bodies staff to be available for the activities carried out for the SAPARD Programme s implementation, the TDB s staff carried out other activities that those mentioned by the TDB s staff in the job description. The Internal Audit made recommendations on the observance of the Framework Agreement and job description. This deficiency is to be remedied by taking the TDB s staff in the structure of the Agency and the implementation of the recommendation made by IAD is to be monitored in the next audit missions. d. The technical fishes of the new Measures 1.2, 3.2, 3.3 and 3.5 On the date the Self assessment report for the accreditation of the new measures 1.2, 3.2, 3.3 and 3.5 was issued, it was found some inconsistencies between the Romanian version and English version of the technical fishes for the Measures 1.2, 3.2, 3.3 and 3.5. Following the recommendations of internal audit, the differences found were corrected. e. The description of the checks in the working procedures There are cases where the experts do not carry out the checks in a uniform manner due to the fact that the SAPARD Agency s working procedures do not regulate certain issues identified by the expert during the project s verification. The Internal Audit made recommendations regarding the improvement of the details in the working procedures as regards the found issues. Some of the recommendations were implemented and the working procedures were accordingly amended. There are differences between the procedures for verifying the projects, for measures 1.1, 2.1, 3.1, 3, 4 and 4.2 and the provisions of the technical fishes of these measures. Some of the recommendations made by the internal audit were implemented and the working procedures were accordingly amended. The procedures for payments authorization did not provide the exchange rate lei/euro used for determining the eligible amount (LEI) in case of the imports of goods for which payment was made in euro. The internal audit made recommendations regarding the details of the instructions drawn up and the monitoring of their uniform implementation for all the verifications carried out that have not yet been implemented. f. The quality of the verifications regarding the establishment of the eligibility of the financing applications and the payment authorization. Was found, with respect to projects under Measure 3.4, that for one project out of four projects checked (namely 25 %), the verifications performed in order to determine the eligibility of the financing application were inadequate because they did not ensure the compliance with the national legislation. The recommendations of the internal audit with respect to performing a review of the project s eligibility were not implemented. For a number of eight projects out of 63 projects checked (namely 12%) under Measures 2.1, 3.1 and 3.4 was found that certain expenditures were authorized for payment based on incomplete or on insufficient supporting documents. Following the recommendations of the internal audit, SAPARD Agency undertook appropriate measures for the implementation of 149

150 the recommendations with respect to performing a review of the reimbursed expenditures eligibility for two out of the eight projects mentioned. In the case of 2 projects out of 33 projects checked (namely 6%), under Measure 3.4, the minimum requirements provided by in the national legislation for rating boarding house at 3 stars were not met either because the bathrooms for each accommodation were lacking, or because a clear separation of the space intended for serving dinner to tourists was not mentioned. The entities, audited at the time, considered the recommendations of the internal audit. In the case of a project aiming at building a tourist boarding house, the beneficiary failed to submit complete procurement files for works / services and draw up supporting documents in accordance with the procedural requirements and with the national legislation, although part of the works carried out for setting up this boarding house had been completed. The entities, audited at the time, considered the recommendations of the internal audit. In the case of 3 out of 33 projects checked (namely 9 %), under Measure 3.4, the tenderers for works / services / goods procurement failed to provide the categories of works / services for which they submitted the tenders (according to NACE code) in the company s object of activity. The entities, audited at the time, considered the recommendations of the internal audit. In the case of 33 projects checked (namely 9%), under Measure 3.4, possible conflicts of interest, regarding the existence of links between the tenderers within the procurement procedures for works / goods, were identified. The entities, audited at the time, considered the recommendations of the internal audit. In the case of 3 out of 33 projects checked (namely 9%), under Measure 3.4, the estimate procurement file contained offers with miscalculations based on which SAPARD Agency granted reimbursements. The entities, audited at the time, considered the recommendations of the internal audit. In the case of two projects, it is impossible to demarcate the area of the investments carried out by two beneficiaries of Measure 3.4 as the projects aimed at modernizing a common building with two separate entrances. The entities, audited at the time, considered the recommendations of the internal audit. In case of a project for Measure 3.4 invoices issued prior to the date of signing the procurement contract were reimbursed. The entities, audited at the time, considered the recommendations of the internal audit. A beneficiary of Measure 3.4 sub-contracted designing services without informing the SAPARD Agency. The entities, audited at the time, considered the recommendations of the internal audit. In the case of 5 projects out of the 33 verified projects (namely 15%) for Measure 3.4 the provisions of the feasibility study and/or of the technical project or of the financing application were not observed. The entities, audited at the time, considered the recommendations of the internal audit. 150

151 The accounting reports drawn up by 6 beneficiaries out of 30 verified (namely 20%) for Measure 3.4 were incomplete or wrong. The entities, audited at the time, considered the recommendations of the internal audit. In the case of 2 projects out of the 33 projects verified (namely 6%) for Measure 3.4 the provisions of the national legislation on the rating of the tourist boarding houses were not observed. The entities, audited at the time, considered the recommendations of the internal audit. g. Minimum hygiene and sanitary veterinary standards The issuance of the authorizations /permits regarding the observance of the European Union Standards with respect to public and sanitary veterinary hygiene did not observe the provisions of the protocols signed with the issuant entities. The Internal Audit recommended SAPARD Agency and MAFRD to monitor the observance of these protocols. The recommendations were not implemented. h. Payments accounting The accountancy on the commitments were not complete as regards the registration in the accountancy of the amounts decommited for 7 out of 30 verified contracts (namely 23%) for measures 1.1, 2.1 and 3.1. Following the recommendations of the internal audit, the SAPARD Agency undertook measures in order to correct the accountancy in the case of 5 out of 7 contracts, and for 2 contracts the recommendation made is under implementation. i. Information and IT systems security The procedures detailed in the IT procedure manual are not observed and were not updated taking into account the modification of the SAPARD Agency s IT infrastructure. One of the reasons was the insufficient number of the IT Unit s staff. The Internal Audit recommended updating the IT procedure manual to the required standards in the field and to the existent infrastructure which are under implementation. The deadline set up the Agency s management for drawing up the new procedure manual is June There were delays with respect to the implementation of the project regarding the integrated IT system. The internal audit recommended to diminish the risk generated by these delays. These recommendations were approved by the Agency s management and were under implementation at that time. j. The training of the Technical Delegated Bodies staff The training of the TDB s staff for implementing measures of the SAPARD Programme was necessary as the staff was not qualified in these fields. The recommendation of the Internal Audit regarding the training of the TDB s staff was under implementation at that time. The SAPARD Agency s management and MAFRD initiated the necessary measures in order to ensure the staffs s training. The Internal Audit Directorate recommended to improve the above mentioned issues and informed the Agency s management about these issues. The SAPARD Agency s management undertook measures for implemented the recommendations made by the Internal Audit Directorate. These recommendations were under implementation at that time. 151

152 Audit missions carried out in 2006 In 2006, the Internal Audit Directorate carried out several activities according to the Annual Audit Plan for 2006 and the Audit strategic Plan for , as well as some activities at the request of the Agency s director general. The activities and audit missions carried out by the Internal Audit Directorate during 2006 concerned the following issues: verifying the completeness, accuracy and veracity of the Agency s accounts; verifying the manner in which the accredited procedures and the national legislation are observed by the staff of the Control and Antifraud Directorate; verifying the conflict of interests identified by the Agency between in Satu Mare region; 100% re verifying the projects related to the Measure 4.1; verifying the uniformity and the accuracy of the manner in which the consolidated procedures for measures 1.1, 3.1, 3.4 are implemented at central, regional and county level; verifying the manner in which the public procurement procedures for the projects related to the measure 2.1 from the regions affected by natural disasters are observed; verifying the capital expenditures for the years 2003, 2004, 2005 and travel expenses in the country and abroad for the years 2004, 2005; monitoring the technical assistance project for strengthening and extending the application system within the Communication and IT Technology for SAPARD Programme; ad-hoc audit missions regarding the assessment of the new drawn up procedures and the proposals for modifying the accredited procedures following the modification of the technical fiche of the measures, the modification of the national legislation regarding the setting up and the functioning of the Agency, the experience resulted from the implementation of the accredited procedures, the necessity to accelerate the absorption of the funds allocated for the SAPARD Programme and the recommendations of the internal and external auditors; follow up audit missions for the recommendations made by the internal and external auditors (European Commission, European Court of Auditors, National Fund, Certifying Body); activities for advising the Agency s management. The activities carried out in 2006 by the Internal Audit Directorate were scheduled and executed according to the Annual Plan for 2006 and the Internal Audit Strategic Plan for , in order to provide the Agency s management a reasonable assurance regarding the following issues: the structure and the process for the verification of the compliance and the eligibility of the projects for Measures 1.1, 2.1, 3.1, 3.4, 4.2 and 4.1 were operational as outlines in the procedures; The Agency s objectives were carried out at the required standards and in accordance with the accreditation criteria provided for in the Multiannual Financing Agreement and with all the regulations in force (national legislation, the European Commission s requirements); The experts observed the Agency s procedures; The European Commission s financial interest were protected; 152

153 The internal controls regarding the pre authorization of the project, the checks preliminary to the payments, accountancy and payment procedures of the Agency were operational and provided a reasonable assurance on the process; The projects were assessed according to the accredited procedures, both during the technical and the financial implementation; The new drawn up procedures and the proposals for modifying the accredited procedures ensured the verification of the compliance with MAFA s provisions; In order to implement the recommendations of internal and external auditors, the appropriate measures were undertaken. Following the performance of the audit missions, the Internal Audit Directorate issued audit reports which were submitted to the Paying Agency for Rural Development and Fishery management, to the National Responsible with the Financing Authorization and to the Audit Authority s external auditors Romanian Court of Accounts, European Commission and to the European Court of Accounts. The main findings and recommendations with a high level of importance made as a result of the audit missions and presented in the audit reports drawn up in 2006, aimed at verifying the following deficiencies: 1. The implementation of the working procedures 1.1. Non-observing the legal provisions for the categorization of the boarding houses For two projects related to the Measure 3.4 was found that the minimum conditions provided by the national legislation in order to qualify a boarding house at the level of 3 stars, thus: Boarding house located in a high traffic area, exposed to noise and emissions (city s belt road); In the case of other boarding houses, the facilities from the rooms and the toilets for tourists were not available only for tourists, the building, including the annexes, requiring renovation and maintenance/permanent cleaning, the access roads and their surrounding areas were not properly maintained, the space for meal s preparation was not adequate and was not hygienic, the furniture was not uniform in style and had no an adequate quality, the rooms refurnishment did not comply with the provisions of the national legislation in the field. The Internal Audit recommended: to request additional information from Ministry of Transport, Buildings and Tourism National Authority for Tourism and to perform some re verifications on the manner in which the projects meet the minimum criteria for the classification as boarding house; to analyse the cases and the possibility to reject the projects which, although they obtained all the licenses and authorizations, following the on-the-spot checks it was found that the projects had not observed the minimum standards of health and hygiene and to take the appropriate remedial measures; if during the on-the-spot checks, it is found that the minimum sanitary and hygiene standards are not observed, this aspect shall be mentioned in the reports drawn up by the County Offices experts, even if the beneficiaries submit documents showing that the standards are met. Recommendations were being implemented at that time. 153

154 The financial implications for these findings were in amount of RON 398, Conflict of interests In case of 4 projects related to Measures 1.1, 1 project related to Measures 2.1, 3 projects related to Measure 3.1 was found some potential conflict of interests within the procedures for the procurement of works/services/goods, such as: the existence of some potential links between the beneficiaries of the SAPARD Programme s measures and the tenderers: the existence of some potential links between the shareholders of the tenderers or the tenderers have common shareholders. The Internal Audit has recommended to review the links between the beneficiaries and the tenderers or between the tenderers and the shareholders of the tenderers and to apply the procedure for the recovery of the debts in case some conflicts of interest are identified. Was also recommended to improve the procedures and the checklists of the conflict of interests by including the checking of the shareholding of all the tenderers and of the beneficiaries who are companies with foreign capital. The recommendations were not approved and were not implemented. The financial implications for these findings were in amount of RON 681, The quality of the on-the-spot checks in order to authorize the payments Following the checks carried out on-the-spot for a project financed under Measure 3.4, we found that the operational structure of the building does not correspond with the specifications of the Technical Project. The Internal Audit recommended the Agency to request the beneficiary to submit documents that clarify and substantiate the modifications, and in case these documents will not be submitted, the Agency shall take the necessary measures according to the contractual provisions. The audit agreed the manner in which the issue found was solved; the beneficiary had submitted the justifying documents for the modifications carried out. This finding has no financial implications. 1.4 Accounting commitments and payments With respect to Measures 1.1, 2.1, 4.2, 2.2, 3.2, 3.5 and 4.1 was found more and/or less differences between the values of national financial grants provided by Government Decision no. 668/2005, the values registered in the Agency s accountancy system and the values mentioned in the inventory of Monitoring, Evaluation and Reporting Unit. The Internal Audit recommended the undertaking of the necessary measures for registering in the accountancy, in the accountancy of Monitoring, Evaluation and Reporting Unit respectively, the values provided by the legislation in force at the date the verifications were performed. The recommendation was implemented, but subsequent to the issuance of the final internal audit Report, a new bill amended the financial grants related to the SAPARD Programme. The financial implications of this finding were of Euro 24,607, (namely about RON 91,712,237.86). 154

155 For measure 2.1, contracts had been concluded and registered in the accountancy. These contracts had a higher value than the value of the grants related to this measure, stipulated in Government Decision no. 668/2005, related to years , for which the Annual Financing Agreements were ratified. Was recommended undertaking the necessary steps in order for MAFRD budget to include the amounts that would cover the value of the European Commission contribution for the financing agreements concluded or for the 2005 and 2006 Annual Financing Agreements to be signed and ratified. The recommendation was not implemented, but, subsequent to the issuance of the audit s final Report, a new bill amended the financial grants related to the SAPARD Programme. The financial implications of this finding were of Euro 16,445, (European Union Contribution), namely Euro 12,877, (national budget contribution). 2. The assessment of the procedures and instructions of amending the accredited procedures. 2.1 Failing to provide detailed description of the responsibilities in the procedures. Was ascertained that the newly elaborated procedures and the proposals for the amendment of the accredited procedures did not establish or give sufficient details of the personnel s responsibilities provided in the Job Description or that the responsibilities described in the Job Descriptions did not match the procedural flow and the performed activities. The internal audit recommended the drawing up of job Description for the newly created jobs, the establishment and detailing of the specific responsibilities and mentioning, in the procedure, the responsibilities, which are incumbent to the personnel, according to PARDF s organization charter. The recommendation was implemented by establishing and detailing the specific responsibilities in the procedure and in the job description. 2.2 Performing amendments to the old procedure versions The amendments of the manual General Overview for the measures 1.1, 3.1 and 3.4 were performed based on a version which was not the last one, chronologically speaking. The internal audit recommended the use of the last version of procedure for performing the amendments. The recommendation was implemented. 2.3 Failing to update the procedures in conformity with the technical Fiches. The proposals for amending the procedures with a view to the implementation of measures 1.1, 2.1, 3.4 and 4.1 did not always, thoroughly and accurately, reflect the amendments brought to the technical Fiches of these measures. The internal audit recommended the correlation and updating of the procedures in conformity with the amendments from the technical fiches of the measures posted in the Official Journal. The recommendation had been implemented. 2.4 Failing to detail the procedural flow. 155

156 The stages that needed to be undertaken, the steps that had to be executed within each stage, the terms that needed to be observed and the persons (experts) involved in each activity had not been mentioned in the methodological procedure. The contracting procedure and the procedure for payment pre-authorization at regional level does not provide the submission of documents (procurement dossier, budget trail) to entities in charge with their verification or who should have known the information included in these documents (PCORDF). The recommendations of the internal audit aimed at the introduction and detailing in the procedure, of all stages/steps that are to be undertaken, highlighting the terms that needed to be observed and the persons involved in the stage/activity. The recommendation was implemented in the procedure for payments pre-authorization at regional level. 2.5 Failing to correlate the procedures Was found some inconsistencies between the information of different procedures, including the applicant s guideline and the forms related to the submission and verification of the payment claim dossier. Was recommended that all the procedures include a uniform specification of the procedural flow for submitting and verifying the payment claim dossier. The recommendation was partially implemented. 2.6 Failing to correlate/ lack of provisions in the technical fiches of the measures. Was found that certain information had not been provided, or there were some inconsistencies with respect to the technical fiches of measures 2.1 and 3.4, between both the provisions of the Romanian version and the provisions of the Romanian and English version. The internal audit recommended the correlation of the technical fiches provisions of the above-mentioned measures, as well as their correlation with the national legislation in force and the correlation of the English version with the Romanian one. The recommendation regarding the technical fiche of measure 2.1 was in full process of implementation. The recommendation regarding the correlation of the technical fiche of measure 3.4 was not implemented. 2.7 Lack of procedural provisions Following the assessment of the procedures for the implementation of measures 2.1, 3.1, 3.4 and of the accountancy procedure, we found several gaps and ambiguous statements, which did not provide a reasonable assurance regarding the conclusion of the performed verifications. The internal audit recommended the detailing of all the verifications performed by the experts and the introduction of all the documents necessary for issuing an accurate and unambiguous conclusion on the result of the performed verifications. The recommendation was implemented. 2.8 Failing to detail the procedures amending instructions The procedures amending instructions were not sufficiently detailed in order to be able to justify these amendments; in addition, no references were made with respect to the chapters that were being amended in the procedures. 156

157 The internal audit recommended the substantiation of all the amendments brought to the procedures by instructions, and the attachment, to the instructions, of supporting and substantiation documents of the amendments brought to the procedures. The recommendation was implemented. 3. The implementation of the integrated IT system at the Agency s level. 3.1 Delays with respect to the testing and implementation of the integrated IT system Was found that at the beginning of 2006 there was a general delay in the unrolling of the project. The consequence of this delay was the speeding of the contract s completion towards the contract s ending and the emergence of errors in the system s development, in the testing and acceptance procedure. The internal audit recommended the Agency s project manager, to supervise the terms agreed with the provider, and their observance. 3.2 Testing performed at the Agency s regional level The internal audit recommended the performance of tests at the level of a regional centre located far from Bucharest (Târgovişte) in order to better simulate the reality, as we considered that a roll out, in the eight locations at the regional level, ought to be performed only after at least one testing of the integrated system. 3.3 Acceptance tests The internal audit recommended that the performance of the acceptance tests last at least three days in each location. Moreover, each acceptance test should be performed with the attendance of one expert from IT Unit, offering technical support to the person responsible with signing the tests and one expert from Internal Audit Directorate, pointing out and verifying the aspects that require the Agency s special attention. 3.4 Generating reports in electronic format During the project s implementation, the Monitoring, Evaluation, Reporting Unit submitted, to the provider, a new set of reports that need to be included into the system. Was recommended the overseeing of the reports implementation, as well as the training of a person within IT Unit in order to achieve the modification of the reports according to the requirements of the Monitoring Unit after the project s completion. 3.5 The Interface of the integrated system with the Agency s IT applications The provider s representatives stated that the integration would resume to the display of the technical specifications by which another programme can be interconnected with the integrated software. Moreover, the project s calendar did not mention any deadline for the remediation of the problem. Thus, there is a risk that the integrated system fails to communicate with the Agency s IT pre-existing systems. The internal audit recommended to clarify this situation and to nominate the entity in charge with performing the integration of the existing IT systems. 3.6 The users manual Was considered that a person within the IT Unit should have submitted the users manuals and the documentation in Romanian, before being submitted by the provider within the training procedure of the final users. Thus, the Internal Audit Directorate recommended the 157

158 training of the users and the availability of the Romanian version of the integrated system manual, before performing the tests and the acceptances. In addition, the Internal Audit Directorate submitted a proposal with respect to the terms and periods, during which the project s main stages should be developed, to the Agency s management, IT Unit and project manager. This aimed at achieving the goals while observing the extension of the term of the contract concluded with the provider. Audit missions performed in 2007 In 2007, Internal Audit Directorate performed several missions according to the Annual Audit Plan for 2007 and the Audit Strategic Plan for for SAPARD Programme as well as some ad-hoc missions at the request of the Agency s Director General. The Audit missions performed by Internal Audit Directorate during 2007 included verifications with respect to the following: The assessment of the internal control and management systems of the recovery of debts resulting from irregularities and/or fraud, subsequent to undue use of European funds and of related co-financing funds; Verifying the manner of observing the procedures related to the implementation of Measures 1.2, 3.3, 3.5 and 4.1 ( 100% Re-performance ); Verifying the uniformity and accuracy of the manner of implementation of the consolidated procedures for M 1.1, M 3.1, M 3.4 by the experts of SA, PRCRDF, PCORDF; Verifying the thoroughness, accuracy and veracity of the Agency s accounts during January 1 st, - December 31 st, 2007; Assessing the manner of organization and performance of the own preventive financial control during In 2007, Internal Audit Directorate had planned and performed the missions with the aim of offering a reasonable assurance, to the management, with respect to the following aspects: The structure and the process of the verification performed on the projects conformity and eligibility for Measures 1.1, 2.1, 3.1, 3.4, 4.2 and 4.1 were functional, exactly as they were provided by the procedures ; The Agency s objectives were accomplished at the requested standards and were compliant with the accreditation criteria stipulated by the Multi-Annual Financing Agreement and by the regulation in force (national legislation, European Commission s requirements); The Agency s procedures had been observed by the experts; The European Commission s financial interests had been protected; The internal controls with respect to the project s pre-authorization, the verifications proceeding the payments, the accountancy and the Agency s payment procedures were functioning and offered a reasonable assurance of the projects; The projects were evaluated according to the accredited procedures, both in the technical and in the financial implementation stages; The conclusions regarding the eligibility of the financing claims and the authorization of the payment claims were accurate. After performing this audit missions, the Internal Audit Directorate issued audit reports, which were submitted to the management of Paying Agency for Rural Development and 158

159 Fishery, to the National Authorizing Officer, to the Audit Directorate within MARD, to the external auditors within the Audit Authority Romanian Court of Auditors, to the European Commission and European Court of Accounts. The most important findings and recommendations laid down, subsequent to the audit missions and described in the audit reports drawn up in 2007, regarded the following deficiencies: 1. Projects verification: 1.1 The quality of the verifications on the payment authorization A miscalculation, for a project related to Measure 1.2, consisting in that the prices described in the annex attached to the invoice were higher than those in the offer, was found during the verification of the eligible values that should have been reimbursed to the beneficiary. Internal Audit Directorate recommended that the difference, resulting from this miscalculation, between the prices in the invoice and those in the offer should be excluded from the total expenditure that is to be reimbursed to the beneficiary at the next payment instalment. Moreover, this should be registered into the accounts. The recommendation was implemented. 1.2 How appropriate the prices are When performing the verification of the prices on seven projects related to Measure 3.5 and on six projects related to Measure 2.1, in the technical implementation stage, the following was found: The Agency s experts have failed to perform, in all cases, an actual verification of the prices because the database containing the reference prices was incomplete or was being finalized; There were inconsistencies between the checks carried out by the Agency s staff at central and regional levels on the comparison of the prices with the database. This occurred in as far as, the regional level staff mentioned in the checklists that it had performed comparisons of the prices with the database with respect to the same assets, while the staff at the central level mentioned that those assets were not found in the database and described the verification procedure by analyzing the beneficiary s offers. Internal Audit Directorate recommended the Regional Centres experts, to consult the database in the future. If they fail to identify the prices of certain assets, they should consult other sources, attaching them as supporting documents. In addition, they should mention in the checklist the manner of comparison of the reasonableness of prices for the verified projects and make periodical proposals to supplement and update the database with reference prices of materials / works / goods not covered or which the experts considered as unreasonable (minimum and maximum limits). The recommendation should have been followed at the next audit missions. 1.3 Potential conflicts of interest Links between companies bidding for the purchase of a machine were found with respect to their shareholders in the case of a project related to Measure

160 Thus, it was considered that the provisions of MAFA had been violated with respect to the existence of minimum three compliant bids for the private beneficiaries procurements, which exceed the threshold of EUR 10,000. A possible family relationship between the beneficiary and the shareholder of one of the bidding company was found in the case of a project related to Measure 2.1. In addition, in the case of other two projects related to the same measure the shareholders were the same/or were related, and economic ties were found between the tenderers. Internal Audit Directorate recommended the review of the accuracy of the procurement organized by the beneficiaries. In case of a conflict of interest, the recommendation is to make a debt for the procurement value affected by the conflict of interest. The recommendation was not implemented Deficiencies resulting from the analysis of the provisions applicable to the eligibility of the expenditures for Measure 3.4. Following the verification of a project related to Measure 3.4, the following deficiencies were found: Failing to correlate the provisions of the Eligible expenditure List for Measure 3.4, between the Romanian version and the English one submitted for approval to the European Commission by the Managing Authority for the SAPARD Programme within MARD. The existence of a different point of view of the Managing Authority for the SAPARD Programme to that of PARDF, regarding the eligible expenditure for Measure 3.4, sub - measure Rural tourism; There is the possibility of interpreting the List of eligible expenses for Measure 3.4, considering the fact that the general provisions of GEO no. 109 / 2005 on road transports were not correlated with the SAPARD Programme implementation s goal. According to Emergency Ordinance no. 109 / 2005, passenger transportation, which can be financed having regard to the List of eligible expenses, are classified by the following categories: bus, intercity bus, coach; The Agency informed the beneficiaries on the eligible expenses related to Measure 3.4, sub- measure Rural tourism without obtaining insurance that the European Commission approved the latest version of the List of eligible expenses for Measure 3.4 Contradictory information was posted on the Agency s site with respect to the eligible expenses for Measure 3.4; Providing the potential beneficiaries with the Applicant s Guide without the information posted on the Agency s site regarding the eligible expenditures for Measure 3.4, thus, achieving discrimination against people who wished to access the SAPARD Programme. Measures for the remediation of the created situation had been undertaken, but the deficiencies were not corrected sufficiently enough by PARDF s specialized departments Reallocation of amounts Subsequent to the checks that have been carried out, it was found that the compliance with the amounts allocated to each measure was not observed, thus: For Measure 1.2 the re-allocation of the amounts to other measures of SAPARD Programme was performed without taking into account the value engaged within the measure at the time of the re-allocation. 160

161 For Measure 4.1 due to the re-allocations to other measures, the value of the annual financial allocations from the overall budget specified in the Invitation Letter was exceeded. The recommendation of the Internal Audit Directorate was to undertake the necessary actions in order to cover the amounts contracted. The recommendations were implemented. Subsequent to the verifications performed on the value of the financial allocations related to Measure 3.5, we found a disparity between the Decision of the European Commission from December 2006 and the Government Decision no. 177/ 2007, on the values of the financial allocations. Internal Audit Directorate recommended to the Agency s management to inform Directorate General for Rural Development within Managing Authority for the SAPARD Programme on the disparity between Government Decision and EU Decision. The recommendation was implemented, subsequent to the issuance of the audit report, by the emergence of Government Decision no. 725/ Internal Control system 2.1 Incorrect accounts In the case of a project related to Measure 3.5, the accounts on the budgetary and legal commitments were erroneously performed, taking into account the provisions of the financing agreement concluded with the Agency. With respect to the accuracy of PARDF s accounts for 2006, Internal Audit Directorate found several deficiencies regarding: the registration of the amounts representing the financial allocations from the national budget; the payments executed and reflected in the Accountancy Reports on the payments executed ; debts resulting from penalties / delays; Internal Audit Directorate recommended the following: Amending the accounts and its values with respect to the budgetary and legal commitments related to the project in question, so that they reflect the content of the supporting documents under which they were undertaken. undertaking the necessary steps in order to amend the accounting software, that is restraining the possibility of performing amendments of the reports submitted subsequent to the conclusion of the financial year; a thorough, accurate and on time registration into the Debtors Ledger of the amounts that are: debts made/ debts to be recovered/ and recovered debts; The management of Contracting Unit within Selection Contracting Directorate and of Payment Accountancy within Project Payment Directorate fell in with the recommendations and undertook measures for the remediation of the deficiencies. 2.2 Performing amendments to the accounting software subsequent to the conclusion of the financial year During the audit mission, "Checking the completeness, accuracy and veracity of the Agency's accounts for 2006, the Internal Audit Directorate found that it was possible to perform amendments/ corrections in 2007 on the Agency's accounting software, subsequent to the conclusion of 2006 financial year. 161

162 The answer of the Payment Accounting Unit s management pointed out the fact that the possible corrections of the aspects described in the accounting reports were due to finding some errors, which required the intervention of the application s developer. 2.3 Late application of the accredited procedures for authorizing payments at central level Was found that the application of the final version of the procedure manual on the authorization of payments at the Agency s Central level for SAPARD programme was delayed because the experts had not been informed in writing and on time with respect to the entry into force of these versions of the procedure. Internal Audit Directorate recommended: to establish the date for the entry into force/ the date of the amending instructions implementation after the notification of the European Commission on this matter or after PARDF receives the EC s decision of approval of changes in the procedure. to ensure uniform implementation of the amendments brought to the procedures. This shall be done by officially communicating to all entities involved the approval date and the date of the procedures amendment application and of the content of the changes brought to the approved procedures. The recommendation was implemented for the amendments brought to PARDF s procedures subsequent to the issuance of the audit report. 2.4 Deficiencies in drawing up the documents regarding the public procurement procedure. In some cases the ledgers of the public procurement procedures, and of the conflict of interest verification for the public beneficiaries were eighter filled in by unauthorized persons or were not signed and dated at each check, were not drawn up at the date stipulated by the procedure or were not registered at PRCRDF. Internal Audit Directorate recommended: to ensure a thorough completion of the documents related to the procurement procedure, and to the conflict of interest verification, respectively, in the future. to provide training for the experts who perform checks on the procurement procedure conducted by the public beneficiaries The recommendation was implemented with the occasion of subsequent audit missions. 3. Drawing up procedures 3.1 The provisions of instruction no. 66/ The provisions of instruction no. 66/ on the verification of the conflict of interest with respect to the SAPARD Projects private beneficiaries procurements are incomplete. Internal Audit Directorate recommended, the experts in charge with performing verifications to make sure that for the remaining payments to be made under the SAPARD programme, the non-eligible expenditure resulting from procurements based on a contract corrupted by conflict of interest, will not be reimbursed. In addition, in future time, they shall ensure thorough verification of possible conflicts of interest that may arise in the procurement process conducted by private beneficiaries of EAFRD. The recommendation was under consideration at the time the audit report was being issued. Audit missions performed in 2008 In 2008, Internal Audit Directorate performed the following types of activities/audit missions: 162

163 The audit with respect to the manner of observing the procedures related to the implementation of Measures 1.2, 3.2, 3.3 ( 100% Re-performance ) and the implementation of the recommendations related to these verifications; The integrity, accuracy and the veracity of the Agency s accounts in 2006 and 2007; The audit with respect to the manner of observing the public procurement procedures for the projects related to Measure 2.1 from the areas affected by natural disasters. The assessment of the PROSYS application; The assessment of the manner of establishing the public procurement procedure (G3 ACP), applicable for the acquisitions made in 2007 by the beneficiaries of Measures 1.2 and 2.1; Identifying the causes that led to certain differences between the accountancies of the Agency s directorates for the projects financed under SAPARD Programme. The assessment of the audit trail for the instructions and circular letters issued in order to amend the procedures for the SAPARD Programme implementation. The assessment of the Recording and Debt Recovery Procedure Manual, G8 IRD; The assessment of the amending proposals of the payment execution procedure, G6 EP; The assessment of the amending proposals of the procedures drawn up for the implementation of the SAPARD Programme in compliance with the provisions of MARD Regulation no. 63/ 2008; The assessment of the amending and completion proposals of the procedures drawn up for the implementation of the SAPARD Programme in compliance with the recommendations of the European Commission from Letter no / 07/09/2008; Following the recommendations and observations made by the authorized external entities, namely the European Court of Auditors, European Commission auditors, Audit Authority attached to the Romanian Court of Accounts, Ministry of Public Finances -Public Internal Audit Directorate, Government s Control Department, Directorate General of Technical Inspection and Control of MARD. The Internal Audit Directorate s activities performed in 2008 were planned and executed according to the Annual Plan for 2008 and to the Internal Audit strategic plan for for SAPARD Programme, with the aim of providing the management with a reasonable assurance with respect to the following aspects: The structure and the process of conformity and eligibility verification of the projects for Measures 1.1, 1.2, 2.1, 3.1, 3.2, 3.3, 3.4, 3.5, 4.1 and 4.2 were functioning according to the procedures. The Agency s goals were achieved at the required standards and were compliant with the accreditation criteria stipulated by the Annual Financing Agreement between the European Commission and Romania for SAPARD programme; The Agency s personnel observed the procedures; The interests of the European Commission s have been protected. The internal controls regarding the project s pre-authorization, the pre-payment checks, the Agency s accountancy and payment procedures were running and provided a reasonable assurance of the processes; The projects were assessed according to the accredited procedures, both in the technical and financial implementation stages. The conclusions with respect to the eligibility of the financing applications and the authorization of the payment claims were correct. 163

164 Internal Audit Directorate issued the audit reports, which were submitted to the management of the Paying Agency for Rural Development and Fishery, to the National Authorizing Officer, to Internal Audit Directorate within MARD, to the external auditors within the Audit Authority attached to the Romanian Court of Accounts, to the Ministry of Public Finances Public Internal Audit Directorate and to the European Commission, subsequent to the performance of the audit missions. The most important findings and recommendations laid down, subsequent to the audit missions and described in the audit reports drawn up in 2008, regarded the following deficiencies: a.executing excessive payments; Was found that in the case of a payment claim for Measure 1.2 submitted to PRCRDF Timis a higher amount than the one established was approved for payment. Was recommended either the exclusion of this undue amount from the next payment instalment or making a debt for the recovery of the amount. This highly important recommendation was implemented by making a debt for the excessive payment and recovering the debt. b.failing to observe the principle of sound financial management, in compliance with the provisions of MAFA, Section B, art. 4 Was found that incomplete checks had been performed on a number of 3 projects in Region 3 Târgovişte and on all projects in Region 4 Craiova or that no checks had been performed with respect to the reasonability of materials/works prices. Was recommended the following: The experts of Regional Centres 3 Târgovişte and 4 Craiova, are recommended to consult the database and if they fail to find prices for certain services / materials / works the experts should consult other sources, attaching them as supporting documents, and state in the contract s Checklist the comparison with respect to the reasonableness of prices for the verified projects; Selection Contracting Directorate Procurement Unit is recommended to make periodical proposals for the completion /amendment / updating of the database with the reference prices of the materials /works/ services, which are lacking or which the checking experts consider unreasonable The experts of Selection Contracting Directorate Procurement Unit are recommended to re-check the reasonableness of the awarded tender s prices for the projects in Region 4. If they are unreasonable, we recommend ceasing the endorsement of the works/services contract or proceeding to an adequate reduction in the value. Based on the answers received, the auditor s opinion with respect to the recommendations was: the recommendation of consulting the data base with the reference prices was not implemented; The recommendation made to the personnel of Selection Contracting Directorate and PRCRDF of making periodical proposals for the completion /amendment / updating 164

165 of the database with the reference prices of the materials /works/ services, which are lacking or which the checking experts consider unreasonable, will be taken into account for EAFRD projects. The recommendation regarding the reverifications of Region 4 projects by Selection Contracting Directorate Procurement Unit experts was not approved. c. Completion and/ or clarification of the procurement procedures. The Circular Letter no. 164/ , supplementing the public procurement procedure G3-ACP, version 010 with Alternative no. 3 package bidding of the designing services and of work execution stipulated that the documentation for the work financial offer will be drawn up in uniform prices broken down on material, execution fee, equipment and transport without a technical project. Was mentioned that the circular letter did not specify the following: the deadline for the execution of the technical project and its submission to the Regional Centre; The persons in charge and the deadline established for performing the verification of the correspondence between the awarded tender and the technical project. Was recommended that, for the projects for which the provisions of Circular no. 164/08/30/2006 are applicable, the management of Selection, Contracting Directorate should establish and inform the Regional Centres and the beneficiaries with respect to the following: the deadline for the execution of the technical project and its submission to the Regional Centres in order to observe the deadlines for the investments specified into the financing application; The persons in charge and the deadlines established for performing the verification of the correspondence between the awarded tender and the technical project. Audit s opinion: Was considered that the recommendation needn t be implemented any longer, taking into account that at the time the audit report was being issued, the public procurement procedures were 94 % completed for measure 2.1, though no measures had been taken for its implementation. d. Failure to correlate the procedure manual G8 IRD with the rest of the PARDF procedures elaborated for SAPARD Programme or with other documents in the national regulation. Discrepancies were found between the Manual of procedures G8 IRD and the Manual of control and antifraud procedures G9 CA, regarding the following aspects: The situation of payment suspension; Execution by CAD of the preliminary control i.e. the verifications regarding the intimations submitted by the bodies having attributions of control/investigations; Exclusive competence of CAD to analyze the irregularities received from both the inside and outside of PARDF, updating the procedure with the national regulation regarding the recovery of the debts and the provisions of the Circular Letter no. 152/ 2006 as well as drawing up of the documents which are not necessary within the procedure s flow; Was recommended the correlation of the provisions in the two manuals for the unitary application of the procedures i.e. prevention of activities redundancy. 165

166 The recommendation was implemented. e. Failure to observe the provisions of the in force national legislation regarding the public procurements. Was found that for 5 projects afferent to measure 2.1 and 8 projects afferent to measure 1.2 for which some procurement procedures were started up after the date of (call for attendance in 2007) the provisions of the national regulations regarding the public procurement failed to be observed as therefore the provisions of MAFA and the notifications of the European Commission, on the applicable regulations after the date of accession to the European Union, failed to be observed. Was recommended the excluding from the expenditure statement the amounts already paid regarding the related procurements as well as non-introducing in the statements of the future amounts regarding the procurements to be paid. The recommendation failed to be implemented. f. Lack adoption the ensuring measures Was found that PARDF decided the cancellation of the bid procedures carried out in compliance with the manual elaborated based on the European Commission s Manual for 5 public beneficiaries and recommence of the procedures as per the national regulations without the elaboration of a monitoring plan regarding the projects execution in order to comply with the set up contract terms. Was recommended a close monitoring of the execution of these projects so that to ensure their completion within the deadlines initially set up in the financing contract. The recommendation was implemented. g. Using of a procedure manual which failed to observe the requirements of the European Commission Was found that until the end of February 2007 the procedure manual regarding the public procurements procedure failed to be drawn up in compliance with the GEO 34/2006 although the Agency was informed by the European Commission through the letter 35029/ on the provisions of the transition Regulation from SAPARD Program to the post accession rural development programs regarding the public procurements will be applicable retroactively starting with the date of accession as well as the fact that the draft of the regulation including the provision of the retroactive application was favourable endorsed within the Star Committee in November Was recommended for the future to study the regulation amendments from the release of the first information regarding these amendments as well as their impact on the existing procedures in order to prevent similar situations. The recommendation failed to be agreed. h. Incomplete procedure provisions h1. Incomplete procedure provision regarding the introduction, identification and operative correction of the wrong or incomplete information were found in the existing the system. Was found that the procedural provisions regarding the introducing, identification and operative correlation of the wrong or incomplete information in the system are inconsistent. 166

167 Was found that the procedural provisions only aimed the elimination of the possibility of electronic processing of some wrong information but in fact an adequate frame able to diminish the rate of errors caused by the introducing in the system of some wrong or incomplete information is missing. The quality of the information presented in the electronic format was influenced by the degree of covering of some specific needs: The process of management of the system information, i.e. the appropriate organization, operation and protection; Supervising the activity of introducing, extraction and reporting of the information in the way of lack of supervising the compliance of the data introduced in the system with the basic information. Was recommended the setting up of some specific procedural norms regarding the ensuring of the quality of the information introduced in the system able to ensure the accuracy, integrity and completeness as well as reliability of the information coming from the collecting areas. The recommendation failed to be implemented. h2. Incomplete procedural provisions Monitoring, Evaluation and Reporting Was found that CD-MERU ensures the collecting, processing and submission of various data to the entities within PARDF and MA although nu procedural provisions were set up in this way. This information collected at regional level and processed by CD-MERU was received only in electronic format and there is no certitude that they were correctly collected and supervised. Was recommended specific measures regarding the including in the CD-MERU procedure of some provisions able to cover the activities carried out which are outside the procedural provisions. The recommendation was implemented. h3. Incomplete procedural provisions - Contracting Following deficiencies were found regarding the progress of the monthly reconciliation related to the contracts and addenda concluded by the Agency as follows: The units involved in the development of the reconciliations: (CSD-CS, PPD PCU, CD-MERU, TAD) failed to fill in a sole reconciliation form; The reconciliation between CD-MERU and CSD-CS would be carried out by processing by CD-MERU of the data base submitted by CSD-CS and comparison with the amounts of CD-MERU amounts received also from DSC-SC without the existence of an independent source of comparison of the amounts related to the contracts; The explication of the differences would be ensured by CD-MERU and aimed the round up of the amounts of the contracts generated by the denomination only that these differences would increase to tens of lei with the risk of multiplication which was not noticed in the processes of reconciliation between CD-MERU and CSD-CS; Another explanation of the differences resulted from the reconciliations between CD- MERU and CSD-CS aimed the cancelled contracts which were taken over in the data base by CD-MERU in the month of cancellation whereas by CSD-CS and PPD PCU when receiving the information from PPD regarding the cancellation; 167

168 The discrepancies within the reconciliations regarding the cancelled contracts occurred also due to the delay of the submission of the information regarding the cancellation as a result of the relatively long period of processing the de-commitment of the amounts resulted from the cancellations (signing by OPFCU, credit ordinator etc); Recording in the data base of the CSD-CS of the contracts, addenda, cancelled contracts or processing of the amounts de-commitments failed to be executed at the time of receiving the afferent document. These operations were carried out at the end of the reconciliation month or at a certain period of time by a single person within the unit which affected the efficiency of this operation and could have generated errors beyond the will of the expert in charge; The reconciliation between CD-MERU and CSD-CS would be carried out during the month afferent the reconciliation (current inlets) without a reconciliation of the global amounts of the contracts within the SAPARD Program. This could have generate the risk of failure to discover an error in case of occurrence in the previous month; The reconciliation among PCU, CSD and TAD regarding the contracts and the addenda (CP 18.J.1.) was outside the procedural frame as in the case of the lists of contracts and addenda, which were the object of the reconciliations, the payment responsible persons failed to prove the acknowledgement by signature or the names of the responsible persons were missing; Was recommended the following: 1. Reconciliations among all the three units involved in the process of reporting regarding the amounts contracted through SAPARD Program (CSD-CS, PPD PCU, CD-MERU), within a sole form which should the explain the differences resulted as well as the acknowledgement by the three responsible persons. In this way all the three units will see the possible differences which could occur regarding the contracted amounts within the SAPARD Programm and not only among the units which make reconciliation as presently carried out (CD- MERU and CSD-CS or CSD-CS and CD- MERU). Also, we recommended to carry out the reconciliations both monthly, regarding the current inlets, and on the global amounts recorded from the beginning of SAPARD Programme until present. 2. In case that all the differences from the reconciliations resulted from the round up of the amounts due to the denomination trended to be significant we recommended the necessary actions for the identification of the contracts generating these differences and correction of the amounts in all the data bases existing at the level of PARDF. 3. Setting up of the exact period to operate in the data bases the recording of the cancelled contracts in order to prevent such differences within the reconciliations considering the discrepancy generated by the signing and approval of the Proposals of commitment of expenditure. 4. In order to increase the efficiency of registration in the data base of CSD-CS and the carrying out of the reconciliation regarding the contracted amounts allocation of more experts was necessary regarding this activity. 5. Was recommended for all the reporting carried out at the level of units/directorates to include the position, name and signature of the involved persons. Based on the received replies the audit directorate concluded that the first 3 recommendations failed to be implemented whereas the last one was implemented. 168

169 h4. Incomplete procedural provisions Payments Was found that after the payment of the last instalment to the beneficiary in case of a significant difference between the contracted amount and the total paid amount, in the lack of a document through which the remained amount to be de-committed, a significant period of time was recorded when the amount would remain unavailable to be re-committed for other contracts. Was recommended necessary actions to be carried out regarding the reducing of the period of de-commitment of the unused amounts by monitoring the period of appeal of the beneficiaries and starting up the de-commitment of these amounts. Was considered the recommendation concluded regarding the implementation of SAPARD Program as the level of funds absorption cannot be affected. h5. Incomplete procedural provisions Regarding the drawing up of the Declaration of expenditures we found the following deficiencies: 1. The document is filled in by hand by collecting the information direct from the justifying documents with the risk of missing some recordings or writing of some figures which were not updated; 2. The document was filled in by a single person (Head of PCU) without any prove regarding the document s supervision. This finding was also mentioned on the occasion of other audit mission when some errors were found within the Declarations of Expenditures. The following were recommended: 1. Implication of several persons regarding the drawing up of the Declaration of Expenditures aimed to ensure an appropriate level of control and surveillance. 2. Introducing of a report to be the base of the Declaration of Expenditures which should be provided by the accounting soft ware based on the accounting data. Based on the received replied the opinion of the audit directorate on the recommendations issued is the following: 1. Recommendation implemented; 2. Recommendation partly implemented as the software is not able to generate the Declaration of Expenditures. h6. Inefficient communication Regarding the use of the procedures of payment authorization was found that different version of these procedures were used at the level of CO and RO (PRCRDF , PCORDF the official one) due to the inefficient communication of the procedural amendments operated in time at PARDF level and of the modification operated in track changes as well as of the procedures posted on the common area, fileserver, pertaining to the Methodology Unit. Also, a table of signing for acknowledgement is missing for the experts of the RC and CO levels regarding the procedural amendments. Was recommended the improvement of both the communication and submission process of the documents among the entities within PARDF as well as improvement of the internal control. Recommendation partly implemented. 169

170 Audit missions carried out in 2009 During 2009 the Audit Directorate carried out the following audit missions: The audit of the capital expenditures for the years 2006, 2007, 2008: opportunity, reality and legal correctness of the public procurement of goods and services; Verification of the adequacy of the new locations regarding the carrying out of the activities mainly the security systems, as per the recommendation of EC during the audit mission carried out during 3-13 June 2008; Audit of the expenditures regarding the local and abroad travels of the employees for the years 2006, 2007 and 2008: opportunity and efficiency of the travels; Verification of the efficiency and accuracy of the way of application the procedures of authorization, payment execution and accounting for the Measure 2.1 by the experts of PARDF from the central, regional and county level; Verification of the completeness, accuracy and actuality of the accounts of PARDF for the period ; Surveillance of the recommendations of MAFRD AD issued during the audit missions in 2008 at PARDF; Surveillance of the findings and recommendations resulted after the assessment of the IT application PROSYS for the SAPARD Programme. In the course of 2009, the Internal Audit Directorate carried the following ad-hoc audit missions at the request of the General Director: Assessment of the proposals of modification the procedures elaborated regarding the implementation of SAPARD Programme as per the provisions of the MAFRD Order 123/ 2009; Surveillance of the implementation of the recommendations of IPAD MPF provided in the previous audit reports regarding the SAPARD Programme. Carrying of an audit mission regarding the verification of 5% of the projects affected by the application of the Circular Letter 172/ During 2009, the Internal Audit Directorate carried out several activities of counselling regarding the activities afferent the implementation of the SAPARD Programme as follows: Participation of IAD within a working group regarding the identification of the risks found after the elaboration of the technical specification aimed to contracting a possible study regarding the analysis of the reasonability of the prices for the purchase of the goods by the beneficiaries of the Measure 1.1, sub-measure 0.2; Centralization of the irregularities found by RCC, CPA, EC and IAD which were the object of the first administrative or legal finding; Issue of IAD opinion regarding the comments of the IPAD, within the Ministry of Public Finances, subsequent the study of the proposals of amendment the irregularity finding and debts recovery G8- IRD by mean of the Instruction no. 119; Comments issued by IAD regarding the procedure of re-verification of the procurements carried out by the private beneficiaries of SAPARD Programme; Comments issued by Internal Audit Directorate regarding the way of implementation of the recommendation of CPA regarding the proposals of amendments the Instruction no. 120; Comments issued by IAD regarding the appointment of the persons in charge with the registration of IRD 01; 170

171 Comment regarding the compliance with the principle of separation of responsibilities at the level of ex-post control; Comment on the proposals of modification the procedure manuals of Internal Audit M and Public Relations as well as the way that these amendments could affect the accreditation criteria. In the course of 2009, the internal auditors monitored the way of implementation the recommendations of the European Commission, as follows: Surveillance of the recommendations of the European Commission regarding the clearance of accounts of the Agency for the SAPARD Programme issued as a result of audit mission carried out during 8-12 September 2008; Surveillance of the recommendations of the European Commission resulted following the audit mission regarding the verification of the system of management and control as well as the expenditures executed regarding the SAPARD Programme Clearance of accounts During 2009, the internal auditors participated as observers at the audit mission of ECA regarding the audit of payments and the control systems carried out for SAPARD Programme Statement of Insurance Also, in 2009 the internal auditors monitored the way of implementation of the recommendations of MPF IPAD included in the previous audit reports regarding the SAPARD Programme. Also, a priority of the audit missions was established and the ones considered as very important were prevalently carried out. During 2009 the Internal Audit Directorate started all the audit missions provided in the annual plan for SAPARD. Most of the audit missions were concluded with the issuing of a preliminary or final internal audit report. The activities carried out in 2009 by the Internal Audit Directorate were planned and carried out with the aim to provide to the management a reasonable ensuring regarding the following aspects: The objectives of the Agency were achieved at the required standards and were in compliance with the accreditation criteria provided in the Multi-Annual Financing Agreement between the European Community and Romanian regarding SAPARD; The procedures were observed by the employees of the Agency; The financial interests of the European Commission were protected; The internal controls regarding the pre-authorization of the project, the preliminary payment verifications, accounting and payment procedures would operate and provided a reasonable insuring regarding the processes. The Internal Audit Directorate allocated significant resources regarding the monitoring activities of the audit missions carried out by the European Commission and European Court of Accounts by preparing the requested documents or by accompany the external auditors in the visits at the regional centres and county offices as well as at the places of implementation the projects. 171

172 The main findings and recommendations with high level of relevance issued subsequent the audit missions and provided in the audit reports drawn up in 2009, aimed the following deficiencies: 1) The of elaboration an internal procedure regarding the carrying out of the public procurements Following the audit mission no. 2/2009 was found that no procedure manual was drawn up regarding the specific of the public procurement activity as per OMFP 946/ 2005 with the further completion and amendments to detail the procedural steps as well as the attribution of the Economic Directorate regarding this activity. Out of the employees of the Administrative Unit only the head of unit had detailed attributions regarding the carrying out of the public procurement procedure. Was recommended the elaboration of internal procedural norms to detail the steps end the necessary documents regarding the awarding of the procurement contracts mainly the ones which are not regulated by the GEO 34/2006 (e.g. direct procurement) as well as the improvement of the jobs descriptions of employees within the Economic Directorate including the provisions regarding the observing of the national related legislation and the internal procedure. 2) Deficiencies regarding the security and the protection of the working area Regarding the verifications carried out at the head office of PRCRDF CRPDRP 6, Satu Mare, the head office of PCORDF, PCORDF Dolj, PCORDF Bihor, PCORDF Buzău, was found the following deficiencies: The system of control/monitoring of the persons inside access is missing; The existing alarm system on the 3 arranged levels of the building where PRCRDF 6 NV Satu Mare operates, was operational but not connected to the Police alarm system, a protection security company or to the telephone of an authorized person within PRCRDF; No fire fighting or prevention systems were present. i.e. smoke detection system, sprinkler system, fire drencher, hydrants, etc; No specific norms/instructions, emergency exit maps, useful telephone numbers were displayed in visible places; No specific equipment necessary to carry out the spot verifications were found (measuring tools, protection equipment, etc) The building failed to be provided with access ramp for the disable persons as provided in the Law 448/ 2006 regarding the protection and promotion of the rights of the disable persons with further completions and amendments. Also, we found that due to the building s structure the access of the disabled persons to the upper floors of the building was not possible. Was recommended the necessary actions regarding the remedy of the above mentioned deficiencies: procurement of the necessary assets and equipment necessary to carry out in optimum and safety conditions of the activity as well as ensuring the documents safety (under implementation); implementation of an access ramp for the access of the disabled persons (implemented); display in a visible place of some posters showing the above mentioned information (implemented). 172

173 3) Failure to draw up the documents specified by the in force regulations or incomplete drawing up Following the verification of the payment orders related to the transportation as well as the ones related to the paying back of the difference cashed by the titular regarding the expenses uncovered by the advanced payment we found that the payment orders regarding the transportation as well as the expenses related to the paying back of the differences cashed by the titular regarding the expenses uncovered by the advanced payment were drawn up and paid despite the missing of all the necessary approvals as per the in force regulation. Was recommended the compliance with the in force regulation regarding the payment of the expenditures, compliance with the separation of the attributions of the credit ordinator, head of financial compartment accountant, cashier and OPFC as well as the necessary actions regarding the organization at PCORDF level of the own preventive financial control considering the possibility of using the existing IT integrate system and the current staff with OPFC attributions. The recommendation was under implementation at the time of issuing the hereinafter audit report. 4) Failure to comply with the regulation regarding the accounting registration of the operations related to the currency cash in and payment. The amount in lei in the internal currency ledger afferent to the payments in advance related to the external travels was drawn up at an exchange rate different from the NRB exchange rate in the day of registration despite of the methodological norms regarding the organization and management of the accounting system of the public institutions approved by the Order 1917/ Was recommended the registration in the accounting system of the operations regarding the currency cash in and payments at the current exchange rate, submitted by NBR, in compliance with the methodological norms regarding the organization and management of the accounting system of the public institutions approved by the Order 1917/ The recommendation was implemented. 5) Failure to comply with the in force regulation regarding the advance payments approval Approval of the advance payments to a single titular despite the fact that the justification of this advanced payment included payments and accommodation expenditures for three persons. Thus, the provisions of Article 30 in the Annex of the Decree 209/ 1976, regarding the advanced payment (e.g. Târziu Viorel, advance payment 1215 euro/ for three 3 persons; Gârban Gabriel, advance payment of 6200 euro/ for 3 persons). Was recommended the compliance with the of Article 30 in the Annex of the Decree 209/ 1976, regarding the advanced payment as well as opening of a EURO account to which several bank cards to be attached in order to allow several persons to travel abroad. The recommendation was under implementation at the time of issuing the hereinafter audit report. 173

174 6) Failure to observe the payment authorization procedure and the contract s provisions. Subsequent the tests carried out we found the following deficiencies: 6.1. The declaration of the payment claim as compliant with comments/incompliant regarding the LC Baldovineşti, Olt County. Thus, the Technical Verification List, section A1, elaborated by the Payment Claim Verification Unit PCORDF (AP 1.4) the basic documents related to which the payment claim was declared compliant with comments was the payment orders and bank statements although according to the procedure the documents related to which the payment claim was declared compliant with comments ware only environmental and sanitary veterinary permits. Also, the same technical and financial check list elaborated by the Technical Verification Unit PRCEDF, Section A2 (AP 1.4), includes checking items which failed to be filled in and signed by expert 2 and the Head of TVU, was dated ( ) previous the date of submission the payment claim (payment claim submitted on the ) although from the verifications carried out by the experts of PAU PRCDRF and provided in the Check List of the Payment Claim filled in by PAU (AP 2.1) resulted that the procedure regarding the compliance of the content, conformity and the contract and administrative provisions had been observed. Was recommended the compliance with the in force procedure regarding the verification of the conformity of the payment claim file and the exercise of the internal control by related the heads of units. The recommendation will be monitored during the future audit missions Failure to comply with the contract s provisions: a) By exceeding of the period when the beneficiary took the commitment to elaborate the technical design with over 6 months from the signing of the financing contract. (CL Brăeşti); b) By investment s failure to operate: in case of the beneficiary ANIF RA Vaslui, although the project had been finalized the maintenance works on the tranches and the adjacent area were covered with vegetation. c) Failure to maintain the eligibility criteria with the consequence of prejudice on the European Commission funds and the state budget. Thus, in the case of CL Livada, the legal representative specified that in order to submit the last payment claim rehabilitation works were necessary on the two old existent pumping stations and the sewage station. For the receiving of the operation permit these works should have been completed. The real stage of these works showed no works execution on the sewage station which failed to operate although had a capacity of 1,560 cm/day (18l/second) for the drainage networks on 8.33 km (2.2 km of existing network and 6.13 km developed through the project). Was recommended spot verifications during the ex-post monitoring to ensure that the beneficiary carried out maintenance works as pet the commitments, along five years from the project s completion as well as the investment wholeness and in case of damage/destruction of the elements to be replaced so that to maintain the operation along the entire life time of the project. The recommendation was under implementation at the time of the issuing the audit report Exceeding of the validity period of the documents. Thus, in the case of CL Livada was found the exceeding of the validity period of the insurance contract of the works during the execution period, the guarantee of good execution for the services and works whose period of 174

175 validity was exceeded at the time of works completion; the construction permit which was out of validity at the date of works completion, too. Was recommended all the necessary actions in order to ensure that all the documents submitted at this payment instalment complied with the validity periods and cover the entire period until de moment of the works completion. The recommendation was implemented Failure to comply with the procedural provisions in case of two beneficiaries: CL Urmeniş and CL Silivaşu de Câmpie which failed to commission the complete investments as until the date of spot visit ( ) no contract of connection to the water supply system had been concluded in order to ensure the drinkable water management and supply. Was recommended the monitoring of all the projects to ensure the maintenance of the eligibility conditions on 5 years from the completion so that to prove the operational and technical viability. The recommendation was under implementation at the time of issuing the audit report. 7) Incomplete procedural provisions Following the tests was found that two distinct instructions and procedures for SAPARD Programme financed from the state budget and the EC budget and for the SAPARD Programme entirely financed from the state budget were elaborated although both included provisions regarding both programs. Was recommended the specification in the payment authorization procedure the provisions which are applicable exclusively to the community SAPARD Programme and their including in the modification instructions or by the elaboration of some distinct payment authorization procedures for each program (SAPARD Programme entirely financed from the state budget and from the EC s budget) which should include exclusively the provisions applicable to the related program. The recommendation was implemented. At the same time was found that the instruction and the procedure provided that the Head of Ex-post Control Unit together with the CAD Director verify on the way the Offices of Completed Projects Control comply with the procedural procedures but no check list specific to this activity was provided. Was recommended the elaboration of a control and antifraud procedure and a check list regarding the verification of carrying out the supervision of the activity of the Offices of Completed Projects Control within the Regional Centres. The supervising activity should be carried out by the Head of Ex-post control Unit and the Director of CAD regarding the way of compliance with the procedures. The recommendation was implemented. 175

176 CHAPTER VI PROGRAMME IMPLEMENTATION 6.1. Financial implementation Situation of all expenditures programmed, committed and paid for the overall programme and the entire programming period. At the end of 2009, the total amount committed is MEUR 1, for the entire Programme, resulting a commitment rate of 89.06% as compared to allocations. As regards the executed payments, by 31 st of December 2009, the total amount is MEUR 1, , resulting a consumption rate of 88.60% as compared to the allocations. The detailed situation of commitments and payments on each measure and sub-measure is presented at point

177 Allocated/committed/paid amounts under SAPARD Programme at Table 6.1 EURO Measure Allocation Public expenditure Community contribution National public contribution Committed amount ( ) Community contribution National public contribution Commitm ent rate % out of allocation Paid amount ( ) Community contribution National public contribution Commitm ent rate % out of allocation Total certified (Community + National public contribution) Community contribution National public contribution 1.1Improving processing and marketing of agricultural and fishery product 1.2 Improving the structures for quality, veterinary and plant-health controls, for the quality of foodstuffs and for consumer protection 379,513, ,868, ,644, ,407, ,661, ,746, % 351,024, ,854, ,170, % 348,353, ,851, ,502, ,791, ,343, ,447, ,697, ,273, ,424, % 29,355, ,016, ,338, % 29,355, ,016, ,338, Development and improvement of rural infrastructure 678,160, ,809, ,351, ,066, ,081, ,985, % 600,300, ,897, ,403, % 592,515, ,039, ,476, Investments in agricultural holdings 259,072, ,418, ,654, ,537, ,616, ,921, % 236,839, ,382, ,457, % 235,251, ,176, ,074, Setting-up of producer groups 3.3 Agricultural production methods designed to protect the environment and maintain the countryside 3.4 Development and diversification of economic activities, multiple activities, alternative incomes 1,000, , , , , , % 57, , , % 57, , , ,849, ,387, , , , , % 190, , , % 129, , , ,220, ,255, ,964, ,768, ,119, ,648, % 68,196, ,191, ,004, % 66,251, ,733, ,518, Forestry 74,451, ,838, ,612, ,086, ,314, ,771, % 57,599, ,199, ,399, % 57,389, ,041, ,347, Improvement of the vocational training 3,949, ,961, , ,901, ,175, , % 3,028, ,271, , % 3,028, ,271, , Technical assistance 1,441, ,153, , ,374, ,099, , % 1,424, ,139, , % 1,424, ,139, , TOTAL 1,521,449, ,159,785, ,663, ,354,928, ,023,409, ,519, % 1,348,015, ,018,137, ,877, % 1,333,755, ,007,409, ,346, The difference between the value of the performed payments and the value of contracts results from the cancelled contracts for which were not performed payments. The difference between the value of the performed payments and the value of certified amounts is represented by the value of debts. 177

178 General aspects related to the monitoring of accreditation in 2009 According to the stipulations of art. 6 of the EC Regulation no.248/2007 regarding the measures concerning the multi-annual financing agreements and the annual financing agreements signed on the basis of SAPARD Programme, as well as to the transition from the SAPARD Programme to the programmes for rural development, the National Authorizing Officer (NAO) informed the European Commission as soon as it was proposed any modification in the implementing of SAPARD Programme during Following the recommendations submitted by the auditors EC-DG AGRI, as a result of the monitoring mission of SAPARD Program in Romania, during June, , the Romanian authorities set up an Action plan in order to address the weaknesses and the deficiencies identified by the EC auditors in relation to the functioning of the management and control systems and to the compliance of the SAPARD Program with the accreditation criteria, as required by MAFA. By the letter / the NAO confirmed that the Action plan was implemented with respect to its major aspects by the PARDF and National Fund (CPA), namely that the Romanian authorities took the necessary steps in order to implement the EC recommendations and that the management and control systems have significantly been improved. This was also confirmed by the Certifying Body (CB) through their final report on the implementation of the Action plan, issued in April 2009 and submitted to EC on the occasion of the said NAO letter. On the NAO submitted to EC the letter containing clarifications to the EC Letter / clarifying the aspects raised in relation to: i) the use in process of verifications of the final payments a reliable price data base which is continuously updated, ii) the tests/verifications of the CB on the price reliability for a sample of 20 conformity cases checked was done based on the SAPARD procedure approved by NAO on 24 March 2009, iii) the materiality level of 2% that was not reached of any of the conformity verifications realized, iv) the registration of the debts and irregularities in the Debtors ledger. In exercising its role in monitoring the accreditation, NAO continued to rely also on its internal audit function as follows: Based on the 2009 Internal audit plan of PIAD-MPF, it was performed, during March, a system audit mission regarding the maintaining of the SAPARD accreditation criteria - first quarter The internal audit mission contributes also to the monitoring at the national level to the implementing of the action plan that was set up by the Romanian authorities involved in the technical and financial implementation of the SAPARD Programme, being one of EC s recommendations resulted from the audit mission held in Romania between The conclusion of the auditors relies on: the evaluation of compliance with the legal and procedural framework: Following the verification of the supporting documents provided to the audit team, the operations considered in the overall objective have a high degree of conformity with the applicable legal and procedural framework. 178

179 the evaluation of the internal control system: The final level of assurance given by the audit team is based on the evaluation of maintenance of the accreditation criteria, exclusively/solely through the established specific objectives, formulated based on the analysis of the conformity level, with the legal and procedural framework and with the diagnosis of the internal control system. In this respect, the audit team considers that, in reasonable way/terms, the SAPARD accreditation criteria as presented in MAFA, section A, article 14, are respected. PIAD performed during the Audit mission concerning the monitoring of the implementation of the recommendations from the previous internal audit missions, on SAPARD Programme, respectively for the recommendations issued during This audit mission took into consideration the results of the mission performed during 2008, this time being evaluated the recommendations not implemented at that time and the recommendations issued by the same body later on. The overall objective was to evaluate the stage of implementation of these recommendations and to give a reasonable assurance to the MPF s officials and NAO concerning the correctness of the management of the audited structure. The level of assurance issued after the auditors evaluation was satisfactory, the ongoing ones being related to the necessity of modifying the legal frame at national level or certain budgetary restriction, none of them affecting the implementation of SAPARD Programme in Romania. Also, during , PIAD performed an audit mission on Maintaining of the SAPARD accreditation criteria - second quarter 2009, having as: general objectives: to ensure MPF s officials, especially NAO that the accreditation criteria on SAPARD Programme, are complied according to MAFA, section A, art.14; maintaining the accreditation criteria. supplementary objective: assurance that the information supplied by PARDF to NAO s services on the action plan issued following the audit mission , are correct. The key elements for this objective are: use of the re-verification procedure for the public procurement for the private beneficiaries of SAPARD Programme and re-evaluation of this activity within PARDF existence of the re-verifications performed on the projects belonging to measure 1.1, sub-measure Meat and meat products and eggs the recovery stage of the debts that were on the conciliation procedure with the Audit Authority. The conclusion of the auditors relies on: the evaluation of compliance with the legal and procedural framework: Following the verification of the supporting documents provided to the audit team, the operations considered in the overall objective have a high degree of conformity with the applicable legal and procedural framework. 179

180 the evaluation of the internal control system: The final level of assurance given by the audit team is based on the evaluation of maintenance of the accreditation criteria, exclusively/solely through the established specific objectives, formulated based on the analysis of the conformity level, with the legal and procedural framework and with the diagnosis of the internal control system. In this respect, the audit team considers that, in reasonable way/terms, the SAPARD accreditation criteria as presented in MAFA, section A, article 14, are respected. the supplementary objective The conclusion is that the information provided by PARDF to NAO s services is correct and PIAD notified only minor deficiencies none of them affecting the compliance with the accreditation criteria. Moreover PARDF initiated immediate corrective measures and had the recommendations implemented Declarations of expenditure and requests of funds to the European Commission The total amount allocated by the European Commission for the SAPARD program in Romania during was Euro 1,159, , most of this amount (99.65%) being allocated to the priorities 1, 2 and 3 (Improvement of competitiveness of processed agricultural and fishery products, Improving infrastructures for rural development and agriculture and Development of rural economy). On July 31 st 2007 Romania has ceased signing contracts with final beneficiaries under the SAPARD program and the total amount contracted was of Euro 1,131,853, EU contribution, under 4,746 contracts signed. At December 31, 2009, the total contracted value was of Euro 1,023,409, EU contribution, under 4,451 projects, with a decrease by 9.58% of the contracted value and by 6.22% of the number of projects approved, due to the cancellation of certain projects. According to the supplementary Declaration of expenditure and the final Payment Application (no. 41), with cut off date December 2009, the total value of expenditures included in the declarations of expenditure submitted to the European Commission from the beginning of the program up to December 2009 is Euro 1,007,409,291.93, this amount also including the amount of Euro 685, representing payments made from the interest accrued in the Euro SAPARD account and which, according to EC s recommendations, have been included in table A1 of the Declarations of expenditures and Request of funds (staring with the Declaration of expenditure no. 36 in 2008). During the programme implementation, Romania received from the European Commission the amount of Euro 1,030,733, out of which, the amount of Euro 75,074, represent the value of the two advances received in 2002 and 2004 and the amount of Euro 955,658, represents the reimbursement of the declarations of expenditure and payment applications submitted to EC. The amount of Euro 1,030,733, includes financial correction in amount of Euro 13,964, in accordance with Commission Decision C(2009)3850 on and which has already been retained by the EC in conformity 180

181 with the notification no.gjv/fk/fa/d(2009)218502/dg AGRI- G4 no on In 2009, the National Fund submitted to EC- DG AGRI, the Declarations of expenditure and Requests of funds in amount of Euro 97,445,415.14, out of which Euro 49,879, represent the value of declaration of expenditure corresponding to the financial year 2009 and Euro 47,566, representing the value of the supplementary declaration of expenditures no. 37 for December Moreover, the total value of the declarations of expenditure performed during the year 2009 in amount of Euro 49,879, can be divided into quarters, as follows: declaration of expenditure and Request of funds no. 38 for the first Quarter of the year 2009, in amount of Euro 9,379,818.51, submitted to the European Commission by letter no of August 07, 2009; declaration of expenditure and Request of funds no. 39 for the second Quarter of the year 2009, in amount of Euro 18,606,620.71, submitted to the European Commission by letter no of October 09, 2009; declaration of expenditure and Request of funds no. 40 for the third Quarter of the year 2009, in amount of Euro 9,426,023.27, submitted to the European Commission by the letter no of November 19, 2009; supplementary declaration of expenditure and Payment application no. 41 with cut off date December 11, 2009, in amount of Euro 12,466,908.62, submitted to the European Commission by the letter no of December 29, During 2009 the European Commission reimbursed to the National Fund a total amount of Euro 187,195, from the total eligible amount requested through the declarations of expenditure related to the year 2008 submitted to EC in 2008 (declaration of expenditure for the first quarter of 2008 and the supplementary declaration of expenditure with cut off date November 30, 2008) and 2009 (supplementary declaration of expenditures for December 2008). The amount of Euro 187,195, includes financial correction in amount of Euro 13,964, in accordance with Commission Decision C(2009)3850 on and which has already been retained by the EC in conformity with the notification no.gjv/fk/fa/d(2009)218502/dg AGRI- G4 no on Reimbursements from European Commission during 2009 Table 6.2 No. of declarat ion Declaration of expenditure and Payment Application Declaration of expenditure and payment application for the first quarter of 2008 Declaration of expenditure and payment application for the third quarter of 2008 Supplementary declaration of expenditure and payment application with cut off date Amount requested Date of submission to EC Amount transferred from EC Date of transfer 28,332, Jun-08 29,479, iul Nov ,021, Dec ,199, iul

182 November 30, Declaration of expenditure and payment application for the fourth quarter of 2008 Declaration of expenditure and payment application for the first quarter of 2009 Declaration of expenditure and payment application for the second quarter of 2009 Declaration of expenditure and payment application for the third quarter of 2009 Supplementary Declaration of expenditure and payment application with cut off date December 11, 2009 TOTAL Out of which: ,566, May-09 32,552, aug ,379, Aug-09 18,606, Oct-09 9,426, Nov-09 12,466, Dec ,799, ,919, ,231, ,879, The amount of Euro 173,231, transferred was smaller than the amount requested, of Euro 187,919,754.22, the difference of Euro 14,688, representing mainly the financial correction for the year (in amount of Euro 13,964,315.00) and the payments made from the interest accrued in the Euro SAPARD (in amount of Euro 685,167.89, as included in table A1 of the Declarations of expenditures and Request of funds no. 36 according to EC s recommendations) which is not to be reimbursed. Moreover, was mention that the value of expenditure declared for the year 2009 in amount of Euro 49,879, will not be reimbursed funds from the EC, because they represent the justification of part of the advanced received from EC between Payments from the National Fund to SAPARD Agency in 2009 SAPARD Agency prepared and submitted to the National Fund requests for funds twice per month or singular per month. During 2009, the National Fund transferred to SAPARD Agency a total amount of 52,774, Euro representing EC contribution for SAPARD Programme. Also, due to the exhausting of the available amount in Euro SAPARD account, determined by the time difference between its use and their reimbursement by the European Commission (EC), in 2009 has been transferred from buffer fund to SAPARD Agency an amount of 26,549, Euro. At the end of 2009 the buffer fund account have been replenished with the amount of 144,213, Euro (amount used in 2008 from buffer fund and not replenished and amount used in 2009 from buffer fund). This amount has been returned to the state budget after the restart of the EC payments to Romania. 182

183 Interest accrued The interest accrued on is in amount of Euro 2,900, (the amount accrued during 2009 was of Euro 812,669.83). Also, the total interest accrued on the Euro Sapard account on is in amount of Euro 3,281, Therefore, the amount to be refunded to the European Commission will be the final balance of the SEA, which includes interest accrued on SEA by the transfer cutoff date to the EC. There have been encountered problems with respect to the delayed transfer of the amounts recovered by the fiscal administrations, subsequent to the specific performance. As a result, several meetings and discussions have been held with the entitled persons within the National Agency for Fiscal Administration, with respect to the incumbency of observing the GO 79/2003 provisions on control and recovery of Community funds, as well as of corresponding co-financing funds, improperly used, with further amendments and completions, and the detailed rules for the application of the GO 79/2003 by the territorial structures. Following these discussions, the National Agency for Fiscal Administration pledged to notify all the subordinated structures on the provisions of the GO 79/2003 and to emphasize the importance of compliance with these provisions and their implications Written- off debts according to art. 14 (2.8) from Section A of the MAFA annex The first SAPARD debts become written off starting with the year 2007 and the total value of this type of debts from the beginning up to March 2010 being mil. EUR 3.20, amount to which the Euro SAPARD account was replenished with state budget funds. The amount of penalties recovered related to the written off debts which also replenished the Euro SAPARD account is of EUR ,09. The written- off debts according to art 14 (2.8) from Section A of the MAFA annex have been mentioned in Table A4 Debts written off and subtracted from this Declaration of Expenditure" (attached to each Declaration of expenditure). In 2009 for the written-off, the National Fund replenished the Euro SAPARD account with the total amount of 1,954, Euro, amounts from the state budget. Nr. crt No/Debt date Irregularity code 1 191/ RO/07/011/S 2 194/ RO/07/013/S Beneficiary SC Teraluca Metal Construct SRL, Bihor CL Paulesti, jud.prahova Approval date by NAO / / Written off amount belonging to EC contribution (RON) Written off amount belonging to EC contribution (Euro) 71, , Table 6.3 Recovered penalities and replenished in ESA not recovered yet 1,165, , , Declaration of expenditure and Request of funds from which it was deducted Decl. no 39/2009 Decl. no 39/ / RO/07/020/S AF Lupu Nicolae, jud.sibiu / , not recovered yet Decl. no 39/

184 4 219/ RO/07/031/S SC Super Max SRL, jud.salaj / , , not recovered yet Decl. no 40/ / RO/07/033/S 6 224/ RO/07/035/S 7 225/ RO/07/036/S CL Paulesti, jud.prahova CL Voinesti, jud.dambovit SC Casa Cristina SRL / , , , / , , / , , not recovered yet not recovered yet Decl. no 40/2009 Decl. no 40/2009 Decl. no 40/ / RO/07/045/S ACL Popricani si Movileni, jud.iasi / ,374, , not recovered yet Decl. no 41/ / RO/07/047S / RO/07/049/S / RO/07/052/S CL Vladeni, jud.iasi SC Safir Com SRL, jud Cluj CL Rozavlea, jud.mm / / / ,741, , , , ,062, , not recovered yet not recovered yet not recovered yet Decl. no 41/2009 Decl. no 41/2009 Decl. no 41/2009 TOTAL 6,574, ,954, , The SAPARD Agency is also in charge with the recovery of these debts according to Government s Ordinance no. 79/2003 regarding the control and the recovery of the Community s funds, as well as of the co-financing ones, irregularly used, with the subsequent modifications and completions, the prescription of the recovery of the debt occurring in the terms of the national legislation. The recovery procedure is in progress for all the beneficiaries (after the closure of the SAPARD Programme), all the legal methods in view of recovering the debts being enforced (notifications, specific performance, the Court), as well as The procedure for finding irregularities and recovering the debts for the SAPARD Programme in force Clearance and conformity clearance of accounts Clearance of accounts decisions For the years 2003, 2004, 2005, 2006 the EC submitted to Romania its decisions confirming that the accounts for the respective years were cleared. Clearance of accounts in 2009 and 2010 During 2009 it continued the procedures stipulated in MAFA concerning the Clearance of accounts Decision for the financial years 2007, for which the Romanian authorities prepared and submitted to EC additional information and explanations regarding the EC recommendations following the audit mission. On , representatives of NF and PARDF participated in Brussels to a bilateral meeting (1 st one) in order to analyze the outstanding aspects concerning the DG AGRI findings included in the letter no. DG AGRIGK/DA/D (2009) /

185 The letter no , refers as well to the correspondence submitted by the national authorities as replies (no / and no / ), to the requirements included in the DG AGRI letters no / After the bilateral meeting held in Brussels, there have been submitted to EC supplementary information, mainly through correspondence, according to auditors requirements. During , it took place the second bilateral meeting, mainly for the clearance of the accounts for the financial year According to the Multi-Annual Financing Agreement, the National Authorizing Officer submitted to EC the Annual Declaration of Accounts for the Year 2008, accompanied by the Certificate and the Audit Report for 2008 of the Certifying Body, on May, 6 th 2009 (Annual declaration of PARDF, the Certifying Body s Certificate and the Audit report), by the letter no and May, 15 th 2009 (English version of the Audit report). Also, supplementary aspects related to the clearance of the financial years 2006, 2007, 2008, have been addressed also during the DG AGRI visit performed in Romania during for the second bilateral meeting above mentioned and the Romanian authorities are expecting the EC conclusions in relation to the clearance decision for the three years involved. According to the Multi-Annual Financing Agreement, the National Authorizing Officer submitted to EC the Annual Declaration of Accounts for the year 2009, accompanied by the Certificate and the Audit Report for 2009 of the Certifying Body, on April, 30 th 2010 by the letter no (Annual declaration of PARDF, the Certifying Body s Certificate and the Audit report), and May, 12 th 2010 (English version of the Audit report and of the Certifying Body s Certificate). Conformity clearance of accounts decisions EC services issued conformity clearance of accounts only for the period In this respect, in order to issue the Conformity Clearance for expenditures declared by Romania under SAPARD Programme in years 2004 and 2005, the services of DG-AGRI have proposed (in accordance with art.12, section A of annex to MAFA) a flat-rate financial correction in total amount of EUR The National Authorizing Officer, following the consultation with SAPARD Agency, Ministry of Agriculture and Rural Development and Audit Authority (Certification Body), decided to ask for the conciliation procedure to Conciliation Body in accordance with art.12, (3), Section A of annex to MAFA and point 9, Section F of annex to MAFA. In collaboration with all Romanian authorities involved in management system for implementation of the SAPARD Programme in Romania, it was elaborated a document which included the Romanian authorities argue in order to diminish the financial correction proposed. This document was submitted to Conciliation Body on 9 th of October 2007 together with the letter no regarding the request for conciliation procedure. 185

186 After the hearing of DG-AGRI on 11 th of December 2007 and the hearing of Romanian authorities on 13 th of February 2008, the Conciliation Body issued the Final Report. In its conclusion, the Conciliation Body has recommended to DG-AGRI to re-evaluate the proposal of financial correction. Following the re-assessment of the procedure the financial correction applied for was in amount of 13,964, Euro, this amount has been off-set from the amounts reimbursed from EC in Implementation on SAPARD Programme s individual measures Synthesis on the implementation stage of the SAPARD Programme. For the 10 measures accredited under SAPARD Programme, during 2009 the implementation of the contracted projects was continued by executing a number of 479 payment instalments to the beneficiaries of the SAPARD Programme reaching a total value of MEUR At the end of 2009, the total value of the financial commitments under SAPARD Programme was of MEUR 1, , resulting in a coverage degree of 100% of AFA for and of 32.04% for AFA As regards the consumption rate of the allocated funds, at the end of 2009, the total value of the payments executed to the beneficiaries of the SAPARD Programme was of MEUR 1, , representing a consumption rate of 100% of AFA for and of 29.22% for AFA 2006 (Table 6.4). Allocation Allocated Amount (Meur) Contracted Absorbed Table 6.4 Deadline for the absorption of funds AFA % 100% Absorbed AFA % 100% Absorbed AFA % 100% Absorbed AFA % 100 % Absorbed AFA % 100 % Absorbed AFA % 100 % Absorbed AFA Meur 78,50 Meur 71, % 29.22% December 2009* Total Meur Meur 1, Meur 1, , % 88.60% * AFA 2006 = n+3 Note: the allocations represent the public value EC contribution and national contribution On the whole programme, the total committed amount (Meur 1, ), resulted in a degree of absorption of 89.06% at the end of 2009, as compared to the allocations. Divided on measures, the situation of the commitments within SAPARD Programme is as follows (Table 6.5): 186

187 on measure 1.1, the total contracted public value related to the contracts was of Meur , representing 24.90% from the total committed amount of SAPARD Programme; on measure 1.2, the total contracted public value was of Meur representing 2.49% from the total committed amount of SAPARD Programme; on measure 2.1, the total contracted public value was of Meur representing 45.69% from the total committed amount of SAPARD Programme; on measure 3.1, the total contracted public value was of Meur representing 17.01% from the total committed amount of SAPARD Programme; on measure 3.2, the total contracted public value was of Meur representing 0.001% from the total committed amount of SAPARD Programme; on measure 3.3, the total contracted public value was of Meur representing 0.001% from the total committed amount of SAPARD Programme; on measure 3.4, the total contracted public value was of Meur 66,768 representing 4.93% from the total committed amount of SAPARD Programme; on measure 3.5, the total contracted public value was of Meur 63,086 representing 4.66% from the total committed amount of SAPARD Programme; on measure 4.1, the total contracted public value was of Meur representing 0.21% from the total committed amount of SAPARD Programme; on measure 4.2, the total contracted public value was of Meur representing 0.10% of the total committed amount of SAPARD Programme. MEASURE No. of projects contracted by 31 st December Committed amounts by 31 st No. of projects contracted by 31 st December 2008 December 2009 (Meuro) Table 6.5 Committed amounts by 31 st December 2009 (Meuro) Measure Measure Measure Measure 3.1 1, , Measure Measure Measure 3.4 1, , Measure Measure Measure TOTAL 4,549 1, ,451 1, As regards the payments executed to beneficiaries, the total amount registered at the end of 2009 (Meur 1, ) is reflected by an absorption degree of 88.60% as compared to the allocations. The situation divided on measures is the following (Table 6.6): Meur for measure 1.1, representing 26.04% of the total amount of the executed payments; Meur for measure 1.2, representing 2.18% of the total amount of the executed payments; Meur for measure 2.1, representing 44.53% of the total amount of the executed payments; 187

188 Meur for measure 3.1, representing 17.57% of the total amount of the executed payments; Meur for measure 3.2, representing 0.004% of the total amount of the executed payments; Meur for measure 3.3, representing 0.01% of the total amount of the executed payments; Meur 68,196 for measure 3.4, representing 5.06% of the total amount of the executed payments; Meur 57,599 for measure 3.5, representing 4.27% of the total amount of the executed payments; Meur for measure 4.1, representing 0.22% of the total amount of the executed payments; Meur for measure 4.2, representing 0.11% of the total amount of the executed payments; MEASURE No. of payments by 31 st December Payments amount No. of by 31 st December payments by st December (Meuro) 2009 Table 6.6 Payments amount by 31 st December 2009 (Meuro) Measure 1.1 1, , Measure Measure 2.1 3, , Measure 3.1 3, , Measure Measure Measure 3.4 2, , Measure Measure 4.1* Measure 4.2* TOTAL 10,644 1, ,116 1, * As regards Measures 4.1 and 4.2, the value of the payments in lei is equal to the value of the contracts signed in lei. The difference occurs due to the fact that different ex-change rates were used in order to express the amount of the contracts and payments in euros. For the same reason there are differences between the total paid values expressed in euros and the values of the contracts expressed in euros Qualitative and quantitative description based on the relevant monitoring indicators The monitoring of SAPARD Programme is performed using the indicators corresponding to the specific character of the assistance and social-economic, structural and environmental situation in Romania. At PARDF s level the monitoring indicators are grouped as follows: regional indicators, financial monitoring indicators, and achievement indicators. The regional indicators give information on the position of SAPARD aid taking into account the development regions in Romania. They are very useful to point out the correlation of SAPARD Programme and regional development strategies. 188

189 Financial monitoring indicators deal with the degree of the financial allocations execution pointing out, for the entire Programme and each measure, the total eligible costs programmed, committed and executed. These indicators can be used as an instrument to programme the allocations at national and regional level. At the same time the indicators signal deficiencies that can occur during the implementation of the Programme regarding allocations commitments payments flow. Achievement indicators measure the direct effects appeared as a result of the activities performed within each measure under the Programme, quantifying the operational objectives of the measures. For instance, the number of the approved projects, the involved capacities, the eligible costs, the public contribution paid to the beneficiaries in order to invest in machine work capacities, storing and marketing capacities (measure 1.1), or for the modernization of communal roads (measure 2.1) are achievement indicators. The monitoring activity supposes the cooperation of the parties involved in this process at national and regional levels. At local level, the experts responsible with the monitoring within the Regional Paying Centers for Rural Development and Fishery of SAPARD Programme monthly collect primary data and fill the regional indicators in the monitoring tables. The monitoring tables containing regional indicators are to be transmitted to the headquarters, where they are centralized and based on these the monitoring indicators at national level are obtained. The monitoring tables approved by the top management of PARDF are then transmitted to the Managing Authority which forwards them to the European Commission to prepare the meetings of the Monitoring Committees. Detailed information is presented in Monitoring Indicators Annexes (Financial Tables Annex 4, Monitoring tables Annex 5, Approved Projects Annex 6). To ensure an efficient system to trace and point out the SAPARD Programme s implementation stage, a series of actions related to monitoring reflected in various daily, weekly or monthly situations regarding the collection of information and indicators in different stages a project goes through: application, selection, notification, contracting, payment claim application, payment authorization and the actual payment of the installment. Regarding the result indicators, they have been set up on each Programme measure. Taking into account that these indicators suppose complex statistical research, there is no quantification of them regarding annual monitoring situations presented by PARDF, following to be completed /quantified in the ex-post assessment of the SAPARD Programme. Thus, in accordance with the provisions of art.11 of Section B Programme management, monitoring and assessment of the MAFA, concluded between the Romanian Government and the European Communities Commission, MAFRD under MA SAPARD is responsible for the ex-post assessment of the SAPARD Programme in Romania, during Having in regard the fact that the results must be communicated to the European Commission until the end of 2011, MA has initiated the steps in order to organize it. 189

190 At the end of 2009, MA has initiated under measure 511 Technical assistance within NRDP the project Drawing up the ex-post assessment on implementing the SAPARD Programme in Romania during In this regard, have been drawn up the terms of reference and has been published the participation announcement no on The Electronic System for Public Acquisitions (SEAP) on 24 th of December Following the end of the acquistion, the winner has been designated, during that in June 2010 to be signed the contract Analysis of the progress recorded in the implementation of SAPARD Programme measures. Assessment of the extent to which the Programme objectives have been achieved at Programme, measure and sub-measure level for the implementing period Approved projects situation Measure 1.1 Improvement of processing and marketing of agricultural and fishery products - projects not-affected by natural disasters During the 48 sessions held during August July 2006, 736 projects were submitted, out of which 456 were contracted having a total eligible approved value of LEI 1,198, thousand, respectively MEUR Approximately 43% of the projects approved under this measure concerns meat, meat products and eggs sector, focusing mainly on the improvement of the processing standards for swine units (2 approved projects), for poultry processing units (4 approved projects), for the mixed units (138 approved projects), for abattoirs (51 approved projects) and for the improvement of the conditions for eggs storing and packaging (1 approved project). Milk and dairy products sector holds 20% out of all the approved projects under Measure 1.1, mainly envisaging units for milk processing for which 88 projects were approved. The diagram below (Diagram 6.1) presents the stage of the submitted, approved and rejected projects under Measure 1.1 in the related period and according to the related sector: milk and dairy products (1), meat, meat products and eggs (2), fruits, vegetables and potatoes (3), wine (4), fishery (5), cereals (6), oil seeds (7). Diagram

191 In terms of the project objective, the approved projects have as main objective the improvement or the rationalization of the processing (approx. 46%) and the achievement of new investments in processing, storing and marketing capacities (approx 36%). The rest of 18% projects approved under Measure 1.1 have as objective the alignment to the European Union standards on food hygiene, improvement and control of the production quality and the adoption of technologies for the new products, for improving the packaging, the storage capacities and for improving the monitoring quality and for a better use and removing of the by-products or residua resulted after processing and other. Measure 1.1 Improvement of processing and marketing for agricultural and fishery products projects affected by natural disasters During the 3 sessions held between May-July 2006, out of the 4 submitted projects, 3 projects were contracted having a total eligible approved value of LEI 21, thousands, respectively MEUR The 3 contracted projects belong to the cereals submeasure (2 projects) and meat, meat products and eggs submeasure (1 project), from the objective point of view of, these aim at improving the storage capacities, improving or rationalizing of the processing procedures and new investments in processing, storing and marketing capacities. Diagram presented below (Diagram 6.2) shows the situation of the submitted, approved and rejected projects on Measure 1.1, during the period in question, and taking into account the sector referred to: Diagram 6.2 Measure 1.2 Improving the structures for quality, veterinary and plant health-control, for the quality of food stuffs and for consumer protection During the 5 sessions held between May October 2006, out of the 20 submitted projects, 20 projects were contracted having a total eligible approved value of LEI 120, thousand, respectively MEUR

192 Within this measure, the highest rate is held by the sanitary-veterinary control sub-measure having 85% (17 approved projects), submeasure fitosanitary control has a weight of 10% (2 approved projects), and the submeasure Control of foods staff quality control has a weight of 5%. All the 20 contracted projects aim at construction extending, modernizing and endowing with equipment and specialized instruments (18 projects) and the IT national network, procurement of specific IT equipment (2 projects). The diagram presented below (Diagram 6.3) shows the situation of the submitted, approved and rejected projects on Measure 1.2 during the period in question: Diagram 6.3 Measure 2.1 Development and improvement of rural infrastructure - projects notaffected by natural disasters During the 9 sessions held between August - November 2002 and between April August 2006 for Measure 2.1 Development and improvement of rural infrastructure, out of the 781 submitted projects, 764 projects were contracted having a total eligible approved value of LEI 2,062, thousand, respectively MEUR The diagram presented below (Diagram 6.4) shows the situation of the submitted, rejected and contracted projects on sub-measure: Diagram

193 Out of the total number of approved projects for Measure 2.1, approximately 50% are under the sub-measure Roads in rural areas (382 approved projects), 36% are under the submeasure Drinkable water supply in centralised system in rural areas (273 approved projects) and 11% are under the sub-measure Sewerage in centralised system in rural areas (87 approved projects) and 3% are approved projects for sub-measures on prevention and protection works against floods (22 approved projects). 92% of the projects under sub-measure Roads in rural areas have as objective the modernisation of the existing roads; 67% and respectively 82% of the approved projects under sub-measures Drinkable water supply in centralised system in rural areas and Sewerage in centralised system in rural areas have as objective the execution of new works. Measure 2.1 Development and improvement of rural infrastructure projects affected by natural disasters During the 4 sessions held between April July 2006 for Measure 2.1 Development and improvement of rural infrastructure, out of the 96 submitted projects, 83 projects were contracted having a total eligible approved value of LEI 206, thousand, respectively MEUR The diagram presented below (Diagram 6.5) shows the situation of the submitted, rejected and contracted projects affected by natural disasters on sub-measures: Diagram 6.5 Out of the total number of approved projects affected by natural disasters under Measure 2.1, approximately 72% belong to roads in rural area sub-measure (60 approved projects), 23% belong to water supply sub-measure (19 approved projects), 5% are projects approved under sewerage sub-measure (4 approved projects). As compared to the case of roads sub-measure, under which, out of the total number of projects, 83% aimed at modernizing of the existing roads, in the case of water supply sub- 193

194 measure out of the total number of approved projects 63% aim at executing of new works and as regards the sewerage sub-measure, 50% of projects aim at repairing the sewerage systems. Measure 3.1 Investments in agricultural holdings - projects not-affected by natural disasters During the 32 sessions held between December 2003 July 2006, from the total number of submitted projects 2,984 projects, 1,904 were contracted with a total eligible approved value of LEI 805, thousand, respectively MEUR Approximately 62% of the approved projects for this measure are for investments in submeasure Field crops (1,186 approved projects), regarding mainly the procurement of machinery and independent equipments. Likewise, sub-measure Dairy cows/buffalo cows holds a quota of 12% (227 contracts), out of the total number of approved projects for measure 3.1 most of the investments have as objective the building of stables for cattle and buffalo cows (70% of the investments under this submeasure, respectively 160 contracts) and only 12%, respectively only 28 contracted projects have as objective the procurement of animals with high-quality genetic value. With reference to the two sub-measures aforementioned, 56% of the total number, respectively 323 young farmers are beneficiaries of investments in field crops and 13%, respectively 74 young farmers are beneficiaries of investments in dairy cows/buffalo cows. The diagram bellow (Diagram 6.6) presents the situation of the submitted projects, approved and rejected ones for measure 3.1 during the reference period and depending on the field of activity: Field crops (1), Horticulture (2), Vineyards (3), Fruit cultivation (4), Greenhouses (5), Dairy cows/buffaloes (6), Cattle-rearing and fattening (7), Sheep/goats farms (8), Young muttons fattening farms (9), Pig farms (10), Poultry farms (11), Other vegetal and animal poultry breeding farms (12). Diagram

195 Measure 3.1 Investments in agricultural holdings - projects affected by natural disasters During the 5 sessions held between March July 2006, out of the 45 submitted projects, 31 projects were contracted having a total eligible approved value of LEI 25, thousand, respectively MEUR The diagram presented below (Diagram 6.7) shows the situation of the submitted, approved and rejected projects on Measure 3.1, for the period in question: Diagram 6.7 Approximately 87% of the projects, out of the approved projects under this measure, refer to investments on field crops sub-measure (27 approved projects), mostly aiming at procuring of machines and independent equipment. Measure 3.2 Setting up of the producers groups During the 5 sessions held between July November 2006, 4 projects were submitted, 3 projects were contracted having a total eligible approved value of LEI thousand, respectively MEUR The approved projects for this measure refer to the investments on submeasure Milk. The diagram below (Diagram 6.8) presents the stage of the projects submitted and approved on Measure 3.2 in the reference period: 195

196 Diagram 6.8 Measure 3.3 Agricultural production methods designed to protect the environment and maintain the countryside During the 5 sessions held between July November 2006, 48 projects were submitted, out of which 1 was contracted with a total eligible approved amount of thousand LEI, namely MEUR The contracted project aim at types of activities regarding the preserving the biodiversity by using the traditional agriculture practices. The above diagram (Diagram 6.9) presents the stage of projects submitted and approved on Measure 3.3, in the reference period. Diagram

197 Measure 3.4 Development and diversification of economic activities generating multiple activities and alternative income - projects not-affected by natural disasters During the 32 sessions held between December 2003 July 2006, from the total number of 1,658 submitted projects, 1,055 projects were contracted, with a total eligible approved value of LEI 239, thousand, respectively MEUR Approximately 59% of the approved projects for this measure is for investments in submeasure Rural Tourism (625 approved projects). Likewise sub-measure Other Activities holds a quota of 31% (330 contracts), out of total number of approved projects for measure 3.4, most of the investments are made in bee-keeping (213 contracts representing 65% out of the total number for this sub-measure) and to a smaller extent in snail and frog breeding (85 contracts representing 26% of the total number for this sub-measure). The diagram 6.10 presents the situation of the projects submitted, approved and rejected for measure 3.4 during the related period and depending on the envisaged sub measure: Rural tourism (1), Other types of tourism in rural area (2), Handcraft activities (3), Aquaculture (4), Other activities (5) Snails and Frogs, Beekeeping, Mushrooms, Wild berries and fruit bushes processing. Diagram 6.10 Measure 3.4 Development and diversification of economic activities, providing for multiple activities and alternative incomes projects affected by natural disasters During the 2 sessions held between June - July 2006, out of the 7 submitted projects, 3 projects were contracted having a total eligible approved value of LEI 1, thousand, respectively MEUR The diagram 6.11 presented below shows the situation of the submitted, approved and rejected projects on Measure 3.1, for the period in question and taking into account the respective sub-measure: 197

198 Diagram 6.11 Measure 3.5 Forestry During the 3 sessions held between May - July 2006, out of the 158 submitted projects, 113 projects was contracted having a total eligible approved value of LEI 223, thousand, respectively MEUR Within this Measure the highest weight is represented by the investments in forestry roads, namely 66% (75 approved projects). The diagram 6.12 presented below shows the situation of the submitted, approved and rejected projects on Measure 3.5, for the period in question and taking into account the respective sub-measure: Diagram

199 Measure 4.1 Improvement of vocational training As regards measure 4.1, by the end of 2009, 5 projects with a total value of LEI 10, thousand were approved meaning MEUR 2.901; all these projects were contracted during The approved projects ensure improvement of vocational training for production practices, agriculture and forestry holdings management in the economic, technical and legal, diversification or reconverting of different activities in rural area, processing and marketing of agriculture and fishery products in compliance with the specific technologies, environment protection. Measure 4.2 Technical Assistance By the end of 2009, 10 projects, with a total value of LEI 5, thousand, meaning MEUR 1.374, were approved under Measure 4.2. The approved projects ensure technical assistance for: Monitoring Committee meeting (1 project), national seminars (2 projects), informative and publicity campaigns (2 projects), making preparatory studies for other measures (3 projects) and making the mid-term evaluation of the Programme (2 projects). Conclusions Until December 31 st 2009, projects were approved with a public value of MEUR 1, , on the investment measures. Out of these projects 10.57% represent contracts under Measure 1.1, 0.46% represents contracts under Measure 1.2, 17.70% represent contracts under Measure 2.1, 44.11% are projects contracted under Measure 3.1, 0.07% are projects contracted under Measure 3.2, 0.02% are projects contracted under Measure 3.3, 24.44% are projects contracted under Measure 3.4 and 2.62% are projects contracted under Measure 3.5. The public contracted value, afferent to the contracts on Measure 1.1, was of MEUR , representing 25.90% out of the total commitments of the PARDF. On Measure 1.2 the public contracted value was of MEUR i.e. 2.63% out of the total commitments of the PARDF. On Measure 2.1, the public contracted value was of MEUR i.e % out of the total commitments of the PARDF. On Measure 3.1, the public contracted value was MEUR i.e % out of the total commitments. On Measure 3.2, the public contracted value was MEUR i.e. 0.01% out of the total commitments. On Measure 3.3, the public contracted value was MEUR i.e % out of the total commitments. On Measure 3.4, the public contracted value was MEUR i.e. 5.19% out of the total commitments of the PARDF. On Measure 3.5 the public contracted value was MEUR i.e. 4.93% out of the total commitments. At the same time, by 31 December 2009, a number of 120 projects affected by natural disasters were approved having a public value of MEUR on the investments measures. Out of these projects, 2.50% represent contracts on Measure 1.1, 69.17% represent 199

200 contracts on Measure 2.1 and 25.83% represent contracts on Measure 3.1, respectively 2.50% are projects contracted on Measure 3.4. The contracted public value afferent to the contracts affected by disasters on Measure 1.1 was of MEUR 6.057, representing 8.48% from the total PARDF commitments. On Measure 2.1, the public contracted value was of MEUR , respectively 80.93% from the total PARDF commitments. On Measure 3.1, the public contracted value was of MEUR 7.133, respectively 9.98% from the total commitments and on Measure 3.4, the public contracted value was of MEUR 0.432, respectively 0.60% from the total PARDF commitments. Details concerning the approved projects (project code, beneficiary, project value) are included in the Annex 6 Approved Projects. 200

201 Table 6.7 Summary table of approved projects Region M 1.1 M 1.2 M 2.1 M 3.1 M 3.2 M 3.3 M 3.4 M 3.5 No. projects Contracted value (EURO) No. projects Contracted value (EURO) No. projects Contracted value (EURO) No. projects Contracted value (EURO) No. projects Contracted value (EURO) No. projects Contracted value (EURO) No. projects Contracted value (EURO) No. projects Contracted value (EURO) 1 North-East Iasi 2 South East Constanta 72 45,650, ,689, ,534,006, ,551, ,00 0 0, ,137, ,465, ,092, ,296, ,060, ,952, ,00 0 0, ,765, South Muntenia Targoviste 70 58,199, ,654, ,860, ,781, ,00 0 0, ,173, , South West Oltenia Craiova 28 24,103, ,450, ,577, ,593, ,00 0 0, ,099, ,931, West Timisoara 6 North -West Satu Mare 7 Centre Alba Iulia 8 Bucharest Ilfov 44 42,806, ,668, ,106, ,888, ,00 0 0, ,626, ,338, ,898, ,024, ,005, ,869, ,00 0 0, ,253, ,716, ,075, ,509, ,152, ,547, , , ,760, ,149, ,524, ,403, ,953, ,220, ,00 0 0, , TOTAL ,350, ,697, ,250, , ,404, , , ,055 66,336, ,086, * Euro conversion was made at the exchange rate on the date of signing the selection report 201

202 Table 6.8 Summary table of projects affected by natural disasters Region No. projects M 1.1 M 2.1 M 3.1 M 3.4 Contracted value (EURO) No. projects Contracted value (EURO) No. projects Contracted value (EURO) No. projects Contracted value (EURO) 1 North-East Iasi ,493, , South East Constanta 3 South Muntenia Targoviste 4 South West Oltenia Craiova ,977, ,410, , , ,659, , West Timisoara 1 2,766, , ,265, North -West Satu Mare 7 Centre Alba Iulia ,976, ,987, ,218, , , Bucharest Ilfov ,136, TOTAL 3 6,057, ,816, ,133, ,

203 Expenditures by measures Paid projects Up to 31 st of December 2009, the amount of the paid projects on measures was of MEUR 1, , respectively MEUR for year 2009, out of which: MEUR for Measure 1.1, MEUR for the year 2009, respectively. The amount of executed payments on 2009 shows a 3% increase as compared to the amount of the projects paid until 31 st of December 2008; out of the total of executed payments for Measure 1.1, the amount of MEUR represents the executed payments for the projects affected by floods; MEUR for Measure 1.2, MEUR for the year 2009, respectively. The amount of executed payments on 2009 shows a 64% increase as compared to the amount of the projects paid until 31st of December 2008; MEUR for Measure 2.1, MEUR for 2009, respectively. The amount of executed payments for year 2009 shows a 4% increase as compared to the value of the projects paid prior to 31st of December 2008; out of the total of executed payments for Measure 2.1, the amount of MEUR represents the amount of executed payments for the projects affected by floods; MEUR for Measure 3.1, MEUR for 2009, respectively. The amount of the payments executed for year 2009 shows a 3% increase as compared to the value of the projects paid prior to 31st of December 2008; out of the total executed payments for Measure 3.1, MEUR represents the value of the payments executed for the projects affected by disasters; MEUR for Measure 3.2, MEUR for 2009, respectively. The amount of the payments executed for year 2009 shows a 95% increase as compared to the value of the projects paid prior to 31st of December 2008; MEUR for Measure 3.3, MEUR for the year 2009, respectively. The amount of executed payments on 2009 shows a 2% increase as compared to the amount of the projects paid until 31st of December 2008; MEUR for Measure 3.4, MEUR for year 2009, respectively. The amount of the payments executed for year 2009 shows a 5% increase as compared to the amount of projects paid prior to 31st of December 2008; out of the total of executed payments for Measure 3.4, MEUR represents the amount of payments executed for the projects affected by floods; MEUR for Measure 3.5, MEUR for the year 2009, respectively. The amount of executed payments on 2009 shows a 35% increase as compared to the amount of the projects paid until 31st of December 2008; The amount of executed payments for Measure 4.1, is in value of MEUR; The amount of executed payments for Measure 4.2, is in value of MEUR; The diagram 6.13 presents the comparative stage by measures. The values are expressed in MEUR. 203

204 Diagram 6.13 As regards the distribution of the overall expenditures by each measure the situation is presented below. The amounts are expressed in MEUR. Diagram

205 Diagram 6.15 Diagram

206 Diagram 6.17 Diagram

207 Diagram 6.19 Diagram

208 Diagram 6.21 Diagram

209 Diagram 6.23 Diagram

210 Diagram 6.25 Diagram

211 Diagram Finalized projects By December 31 st 2009, 4,374 projects were finalized, out of which 450 on Measure 1.1, out of which 3 finalized projects being projects affected by natural disasters, 19 projects were finalized on Measure 1.2, 843 projects were finalized on Measure 2.1 out of which 83 finalized projects being projects affected by natural disasters, 1,916 projects on Measure 3.1 out of which 31 finalized projects being projects affected by natural disasters, 1,018 projects on Measure 3.4, out of which 3 finalized projects being projects affected by natural disasters, 113 projects on Measure 3.5, 5 projects on Measure 4.1 and 10 projects were finalized on Measure 4.2. Out of 4,374 projects, 409 projects were finalized in 2009 as follows: 20 projects under Measure 1.1, 13 projects under Measure 1.2, 94 projects under Measure 2.1, 109 projects under Measure 3.1, 116 projects under Measure 3.4, 57 projects under Measure 3.5. At the end of 2009, the following situation resulted for the entire program on the finalized projects: On Measure 1.1, the finalized projects on sub measures are as follows: Milk and dairy products 91 projects; Meat, meat products and eggs 192 projects, out of which 1 project is affected by natural disasters; Fruit, vegetables and potatoes 39 projects; Wine - 43 projects; Fish 18 projects; Textile Plants 1 project; Cereal 63 projects, out of which 2 projects is affected by natural disasters; Oil seeds 3 projects. 211

212 On Measure 1.2, the finalized projects on sub measures are as follows: Sanitary-veterinary control 16 projects; Phyto-sanitary control 2 projects; Food quality control 1 project. On Measure 2.1, the concluded projects on sub measures are as follows: Roads in the rural area 441 projects, out of which 60 projects are affected by natural disasters; Supplying with drinking water through centralized networks in the rural areas 292 projects, out of which 19 projects are affected by natural disasters; Sewage in centralized system in the rural areas 91 projects, out of which 4 projects are affected by natural disasters; Works for floods prevention and protection 19 projects; On Measure 3.1, the finalized projects on sub measures are as follows: Field crops 1,209 projects, out of which 27 projects are affected by natural disasters; Horticulture 76 projects; Wine-growing 62 projects; Fruit growing 71 projects; Greenhouses 44 projects; Milking animals 223 projects, out of which 3 projects are affected by natural disasters; Cattle-rearing and fattening 15 projects; Sheep/goats breeding 23 projects; Young mutton fattening 9 projects; Pigs 86 projects; Poultry 80 projects; Other vegetal and animal poultry breeding farms 18 projects, out of which one project is affected by natural disasters. On Measure 3.4, the finalized projects on sub measures are as follows: Agriculture Services 2 projects; Rural tourism 595 projects, out of which 3 projects are affected by natural disasters; Other types of tourism activities in the rural space 63 projects; Handcraft 17 projects; Aquaculture 16 projects; Frogs and Snails 82 projects; Sericulture 1 project; Apiculture 211 projects; Mushrooms 22 projects; Wild berry fruits and wild berry bushes processing 6 projects; Medicinal and aromatic plants processing 2 projects; Processing at farm's level of the certified traditional and/or organic products one project. 212

213 On Measure 3.5, the finalized projects on sub measures are as follows: Afforestation 3 projects; Nurseries 1 project; Investments for the improvement of primary wood processing and marketing of forest products 34 projects; Forestry roads 75 projects. On Measure projects were finalized. On Measure 4.2, the finalized projects on category of expenditures are as follows: Information and promotion campaign 2 projects; Seminars 2 projects; Monitoring Committee Meeting 1 project; Preparative studies for other measures 3 projects; Mid-term evaluation 2 projects. Was mentioned that there were taken into consideration as finalized projects only the projects 100% implemented and to which the final payment was executed. Detailed information is included in the annexed monitoring tables (Annexe no. 5) which contain the monitoring indicators Sensitive sectors Situation of the projects financed related to investments in the sensitive sectors under the SAPARD Programme is presented in the below table: 213

214 Sensitive sectors - for investments in improving the processing and marketing of agricultural and fishery products Period August 1 st 2002 December 31 st 2009 Sector Activity/product Reference unit Meat Capacity of slaughter house for: National capacity 1 in 2005 Capacity supported under the SAPARD Programme starting with 2000* Total 000 tone/year mixed 000 tone/year swine 000 tone/year cattle 000 tone/year sheep 000 tone/year poultry 000 tone/year Eggs Capacity of packing Million eggs/year Capacity of global use 000 hl/year 4, Capacity of producing drinking milk 000 hl/ year Milk Starch Centrifuged Capacity of producing powder 000 tons/year milk milk out of which: Whole milk 000 tons/year Capacity of producing cheese (on range of products) 000 tons/year Capacity of producing butter 000 tons/year Capacity of producing casein 000 tons/year Capacity of producing churn milk, powder 000 tons/year out of which: liquid 000 tons/year potatoes 000 tons/ year Capacity of producing starch corn 000 tons/ year from: wheat 000 tons/ year other cereal 000 tons/ year Table 6.9 Total of national capacity starting with

215 ordinary wheat 000 tons/year Milling Capacity of milling for: hard wheat 000 tons/ year rice 000 tons/ year other cereal 000 tons/ year Malt Capacity of producing malt 000 tons/ year Sugar Capacity of producing sugar: Capacity per tons/day day Agricultural 000 tons/seed age campaign Total hectolitres/ year 464, Wine Vine noble Capacity of producing the wine breed out of which: (QWPSR 4 ) hectolitres/ year 277, Table wine hectolitres/ year 186, * The new setting up capacities and capacity increases within the modernization projects are taken into consideration. The mentioned capacities in this column are different from those included in table 6.a.1.1. Within table 6.a.1.1, total capacities involved in the contracted projects are accounted, whereas in this table, the total involved capacities are accounted with regard to contracted projects for new investments. As regards modernization, only the difference between the capacity to be obtained at the project finalization and the capacity existing at the moment of SAPARD funds request is accounted. 1 - "Capacity" to be used shall be the same for the related columns. 2 If for 2000 any information is not available, to be included the most recent data, specifying the reference year. 3 To be mentioned the capacity supported under the SAPARD Programme, increase of capacity realized without SAPARD aid and closing of capacities. 215

216 Table 6.10 Sensitive sectors - for investments in improving the processing and marketing of agricultural and fishery products projects affected by natural disasters Period April 1 st 2006 December 31 st 2009 Sector Activity/product Reference unit National capacity 1 in 2005 Capacity supported under the SAPARD Programme starting with 2000* Total of national capacity starting with Total 000 tone/year mixed 000 tone/year Meat Capacity of slaughter house for: swine 000 tone/year cattle 000 tone/year sheep 000 tone/year poultry 000 tone/year Eggs Capacity of packing Million eggs/year Capacity of global use 000 hl/year Capacity of producing drinking milk 000 hl/ year Centrifuged Capacity of producing powder 000 tons/year milk milk out of which: Whole milk 000 tons/year Milk Capacity of producing cheese (on range of products) 000 tons/year Capacity of producing butter 000 tons/year Capacity of producing casein 000 tons/year Capacity of producing churn milk, powder 000 tons/year out of which: liquid 000 tons/year

217 Starch Capacity of producing starch from: potatoes 000 tons/ year corn 000 tons/ year wheat 000 tons/ year other cereal 000 tons/ year ordinary wheat 000 tons/year Milling Capacity of milling for: hard wheat 000 tons/ year rice 000 tons/ year other cereal 000 tons/ year Malt Capacity of producing malt 000 tons/ year Sugar Capacity of producing sugar: Capacity per tons/day day Agricultural 000 tons/seed age campaign Total hectolitre/ year Wine Vine noble Capacity of producing the wine breed out of which: (QWPSR 4 ) hectolitre/ year Table wine hectolitre/ year * The new setting up capacities and capacity increases within the modernization projects are taken into consideration. The mentioned capacities in this column are different from those included in table 6.a.1.1. Within table 6.a.1.1, total capacities involved in the contracted projects are accounted, whereas in this table, the total involved capacities are accounted with regard to contracted projects for new investments. As regards modernization, only the difference between the capacity to be obtained at the project finalization and the capacity existing at the moment of SAPARD funds request is accounted. 1 - "Capacity" to be used shall be the same for the related columns. 2 If for 2000 any information is not available, to be included the most recent data, specifying the reference year. 3 To be mentioned the capacity supported under the SAPARD Programme, increase of capacity realized without SAPARD aid and closing of capacities. 217

218 Sanctioned and cancelled projects By December 31 st 2009, according to the official data, 1,021 projects were cancelled and sanctioned due to irregularities, out of which 139 projects on Measure 1.1, 3 projects on Measure 1.2, 254 projects on Measure 2.1, 209 projects on Measure 3.1, one project on Measure 3.2, 92 projects on Measure 3.3, 303 projects on Measure 3.4, 9 projects on Measure 3.5, 2 projects on Measure 4.1 and 9 projects on Measure 4.2. On Measure 1.1 Improvement of processing and marketing of agricultural and fishery products, 60 financing contracts were cancelled, at the beneficiaries request or from various reasons. For 21 projects payment had been executed, of 36, thousand LEI, prior to contract ceasing. In 2009, 10 projects on this measure were cancelled. Other 79 projects were sanctioned (out of which 30 projects were sanctioned during 2009) due to some irregularities in implementing the projects, the sanctions value being of LEI 59, thousand. On the Measure 1.2 Improvement the structures for carrying out the veterinary, and phytosanitary quality control for food stuff and consumers protection, 3 projects were sanctioned (out of which one project was sanctioned during 2009), due to some irregularities found during the project s implementation in amount of thousand LEI. On Measure 2.1 Development and improvement of rural infrastructure, 17 financing contracts with PARDF were cancelled due to various reasons or at the beneficiaries request. For 5 projects payments had been executed prior the contract s ceasing, in amount of 16, thousand LEI. Other 237 projects were sanctioned (out of which 28 projects were sanctioned during 2009) due to some irregularities in implementing the projects, the sanctions value being of LEI 42, thousand. On Measure 3.1 Investments in agricultural holdings, 149 financing contracts with PARDF were cancelled due to various reasons or at the beneficiaries request; 17 beneficiaries required the projects cancellation in For 17 projects payment had been executed prior to contract s ceasing, in amount of 8, thousand LEI. Other 60 projects were sanctioned (out of which 24 projects were sanctioned during 2009), the sanctions having a total value of LEI 14, thousand. On Measure 3.2 Setting-up of producer groups, one financing contract was cancelled in No payments had been executed prior to the date of contract s ceasing. On Measure 3.3 Agricultural production methods designed to protect the environment and maintain the countryside, 46 financing contracts with PARDF were cancelled in For those projects payment had been executed prior to contract s ceasing, in amount of thousand LEI. Other 46 projects were sanctioned (out of which one project was sanctioned during 2009), the sanctions having a total value of LEI thousand. 218

219 On Measure 3.4 Development and diversification of economic activities, providing for multiple activities and alternative incomes, 213 financing contracts with PARDF were cancelled due to various reasons or at the beneficiaries request; 25 beneficiaries required the contracts cancellation in For 48 projects payments had been executed prior to contracts ceasing, in amount of 5, thousand LEI. Other 90 projects were sanctioned (out of which 60 projects were sanctioned during 2009), due to irregularities found during the projects implementation, the sanctions having a total value of LEI 9, thousand. On Measure 3.5 Forestry 5 contracts were cancelled at the beneficiary s request for which no payments had been executed prior to the date of contract s ceasing, one beneficiary required the contracts cancellation in projects were sanctioned during 2009, due to irregularities found during the projects implementation, the sanctions having a total value of LEI thousand. On Measure 4.1 Improvement of vocational training 2 contracts were cancelled. As regards Measure 4.2 Technical Assistance, 9 projects were cancelled Conclusions on the differences between Regions/Measures/Sub-Measures found in the projects implementation The execution of payments to the beneficiaries of SAPARD Programme started in September 2003, and the progress of the monthly payments executed during September 2003 December 2009 is included in Diagrams below. Diagram

220 Diagram6.29 Diagram

221 Diagram 6.31 Diagram 6.32 Diagram

222 Diagram 6.34 Diagram

223 Diagram 6.36 Diagram

224 An analysis of the implementing stage of the contracted projects shows that out of 4,451 contracted projects under the accredited measure, 4,374 projects have been finalized. On 31 st of December 2009, the distribution of the 4,451 contracted projects (having a total public value of LEI 4,922,656, , representing EUR 1,354,928, ) under measures 1.1, 1.2, 2.1, 3.1, 3.2, 3.3, 3.4, and 4.2 is as follows: projects under Measure 1.1; - 20 projects under Measure 1.2; projects under Measure 2.1; - 1,935 projects under Measure 3.1; - 3 projects under Measure 3.2; - 1 project under Measure 3.3; - 1,058 projects under Measure 3.4; projects under Measure 3.5; - 5 projects under Measure 4.1; - 10 projects under measure 4.2. The 4,374 finalized projects are divided on measures as follows: 450 projects under Measure 1.1; 19 projects under Measure 1.2; 843 projects under Measure 2.1; 1,916 projects under Measure 3.1; 1,018 projects under Measure 3.4; 113 projects under Measure 3.5; 5 projects under Measure 4.1; 10 projects under Measure

225 Out of the MEUR 1, representing the financial allocation under AFA related to the accredited measures financed within SAPARD Programme, the status of the committed amounts and executed payments is the following: Value of contracted projects - MEUR 1, ; Value of executed payments - MEUR 1, The analysis of the existing commitments shows that 46% of the total committed amount (MEUR 1, ) is represented by commitments under measure 2.1, with a value of MEUR A comparison of the status of the sub-measures implemented under SAPARD Programme, we may point out that the highest attractiveness is focused on the following sub-measures: Meat, meat products and eggs (197 contracted projects) measure 1.1; Milk and dairy products ( 91 contracted projects) measure 1.1; Field crops (1,213 contracted projects) measure 3.1; Milking animals (230 contracted projects) measure 3.1; Rural tourism (628 contracted projects) measure 3.4; Other activities (330 contracted projects) measure 3.4. A synthesis of the stage of the measures under implementation in Romania, until the end of 2009, shows that the public contracted amount of the contracts under Measure 1.1 The Improvement of processing and marketing of agricultural and fishery products was MEUR i.e 25% out of the total amount of PARDF s commitments. For the 459 contracted projects under Measure 1.1, payments of a total amount of LEI 1,241, thousand, i.e. MEUR (Table 6.12) 92.49% of the NPARD allocations for were authorized and executed. The situation of the commitments and payments on sub-measures within Measure 1.1 is presented in tables 6.11 and Table 6.11 Report on Executed Commitments by sub-measures under Measure 1.1 by Submeasure % out of the measure Allocation Value of contracted projects Euro Commitment rate % Meat products and eggs 23 87,288, ,703, Milk and milk products 23 87,288, ,469, Cereals 10 37,951, ,250, Oil seeds 3 11,385, ,104, Wine 9 34,156, ,996, Fruits, vegetables and potatoes 16 60,722, ,926, Fish and fishery products 6 22,770, ,288, Sugar 4 15,180, Textile Plants 6 22,770, , TOTAL , 513, ,407,

226 Table 6.12 Report on the Executed Payments by sub-measures under Measure 1.1 by Submeasure % out of the measure Allocation Value of executed payments Euro Consumption rate % Meat products and eggs 23 87,288, ,929, Milk and milk products 23 87,288, ,255, Cereals 10 37,951, ,003, Oil seeds 3 11,385, ,470, Wine 9 34,156, ,809, Fruits, vegetables and potatoes 16 60,722, ,181, Fish and fishery products 6 22,770, ,647, Sugar 4 15,180, Textile Plants 6 22,770, , TOTAL ,513, ,024, As regards the regional distribution of the projects not affected by floods under Measure 1.1, Region 7 Alba Iulia has the highest rate, namely 17.54% of all the projects approved under this measure; Followed by Region South East with a weight 17,33% and Region 1 North East has approximately 15.79% of the approved projects. In conclusion, these three regions hold 50.66% of the total approved projects which could be explained by the fact that these regions are traditional areas for milk and meat production. The milk and meat sectors are prevalent sectors out of the total amount of approved projects under Measure 1.1. The regional distribution of the projects approved under Measure 1.1 is presented in Diagram Diagram

227 As regards the regional distribution of the projects affected by natural disasters for Measure 1.1, Diagram 6.39 is presented below. Diagram 6.39 As regards Measure 1.2 Improving the structures for quality, veterinary and plant healthcontrol, for the quality of food stuffs and for consumer protection the public contracted projects was of MEUR , namely 2.49% out of the total PARDF commitments. As regards the 20 projects contracted under Measure 1.2, payments were authorized and executed in total amount of thousand LEI 114, , representing Meur % from the allocations NPARD The situation of the commitments and payments on sub-measures within Measure 1.2 is presented in tables 6.13 and Table 6.13 Report on Executed Commitments by sub-measures under Measure 1.2 by Submeasure % out of the measure Allocation Value of contracted projects Euro Commitment rate % Sanitary-veterinary control - 29,883, Plant-health control - 2,173, Food stuffs quality control - 1,641, TOTAL ,791, ,697,

228 Table 6.14 Report on the Executed Payments by sub-measures under Measure 1.2 by Submeasure % out of the measure Allocation Value of executed payments Euro Consumption rate % Sanitary-veterinary control ,775, Plant-health control ,960, Food stuffs quality control ,619, TOTAL ,791, ,355, As regards the distribution on regions of projects under Measure 1.2, the highest number of projects was registered in Region 8 Bucharest Iflov, namely 20% of the total number of projects approved on this measure, Region 1 North East has approximately 15% of all the projects approved under this measure and Region 7 Alba Iulia registered 15% of the total number of projects approved on the same measure (each of them has 3 approved projects). In conclusion, these three regions hold 50% of the total approved projects under this measure. The regional distribution of the approved projects under Measure 1.2 is presented in Diagram Diagram

229 As regards Measure 2.1 Development and improvement of rural infrastructure, the public contracted amount of the contracts was MEUR i.e 45.69% out of the total amount of PARDF s commitments. At the end of 2009 overall value of the contracts under this Measure meaning MEUR as compared to the amount allocated by AFA represents a commitment rate of 91.29% (Table 6.15). For the 847 projects contracted under Measure 2.1, payments of a total amount of LEI 2,265, thousand i.e. MEUR (Table 6.16) 88.52% of the NPARD allocations for were authorized and executed. Table 6.15 Report on Executed Commitments by sub-measures under Measure 2.1 by Euro Submeasure % out of the measure Allocation Value of contracted projects Commitment rate % Roads in rural areas ,080, ,229, Drinkable water supply through rural area district ,356, ,152, networks District system sewage in rural areas ,103, , Works of prevention and protection against floods ,620, ,056, TOTAL ,160, ,066, Table 6.16 Report on the Executed Payments by sub-measures under Measure 2.1 by Euro Submeasure % out of the measure Allocation Value of executed payments Consumption rate % Roads in rural areas ,080, ,048, Drinkable water supply through rural area district ,356, ,007, networks District system sewage in rural areas ,103, ,275, Works of prevention and protection against floods ,620, ,969, TOTAL ,160, ,300, In terms of the regional distribution of the projects not affected by natural disasters approved for this measure, 3 regions, namely Region 1 North East Iasi (26.57%), Region 2 South East Constanta (16.49%) and Region 3 South Muntenia Targoviste (19.24%) have 62.30% of the total percentage of the approved projects under this measure. 229

230 The regional distribution of the approved projects under Measure 2.1 is presented in Diagram Diagram 6.41 As regards the regional distribution of approved projects affected by natural disasters under this measure, three regions, respectively, Region 1 North East Iasi and Region 3 South Muntenia have approximately 20.48% of the total number of approved projects affected by natural disasters, while Region 4 South West Oltenia has 19.28%. In conclusion, these three regions hold 60.24% of the total approved projects affected by natural disasters. Regional distribution of the approved projects under measure 2.1 is presented in Diagram Diagram

231 Within Measure 3.1 Investments in agricultural holdings, the public contracted amount of the contracts was MEUR i.e 17.01% out of the total amount of PARDF s commitments. For the 1,935 projects contracted under Measure 3.1, payments of a total amount of LEI 832, thousand i.e. MEUR (Table 6.18) 91.42% of the NPARD allocations for were authorized and executed. The situation of the commitments and payments executed under each sub-measure within this measure is showed in Tables 6.17 and Table 6.17 Report on Executed Commitments by sub-measures under Measure 3.1 by Euro Submeasure % out of the measure Allocation Value of contracted projects Commitment rate % Field crops 19 49,223, ,053, Horticulture 8 20,725, ,975, Vineyard 8 20,725, ,295, Fruit tree farming 8 20,725, ,006, Green Houses 4 10,362, ,283, Milk animal farming 14 36,270, ,063, Cattle breading and 14 36,270, ,247, Goats and sheep fattening 3 7,772, ,927, Young rams fattening 3 7,772, ,122, Swine 10 25,907, ,175, Poultry 5 12,953, ,494, Other type of vegetable, animals and poultry farming 4 10,362, ,892, TOTAL ,072, ,537, Table 6.18 Report on the Executed Payments by sub-measures under Measure 3.1 by Euro Submeasure % out of the measure Allocation Value of executed payments Consumption rate % Field crops 19 49,223, ,857, Horticulture 8 20,725, ,138, Vineyard 8 20,725, ,738, Fruit tree farming 8 20,725, ,377, Green Houses 4 10,362, ,603, Milk animal farming 14 36,270, ,591, Cattle breading and 14 36,270, ,789, Goats and sheep fattening 3 7,772, ,601, Young rams fattening 3 7,772, ,956,

232 Swine 10 25,907, ,415, Poultry 5 12,953, ,762, Other type of vegetable, animals and poultry farming 4 10,362, ,007, TOTAL ,072, ,839, As regards the regional distribution of projects not affected by natural disasters under measure 3.1, Region 2 South East has the greatest rate, namely 25.00% out of the projects approved on this measure, Region 3 South Muntenia has o rate of approximately 19.01% out of the total number of approved projects, and Region 1 North East Iasi has 16.23%. Thus, these three regions have 60.24% out of the total approved projects. This aspect can be explained by the fact that these regions include areas with milk production traditions. These regions are also best represented as regards the total number of projects approved under measure 1.1. Diagram 6.43 shows the regional distribution of the projects under measure 3.1. Diagram 6.43 As concerns the regional distribution of projects affected by natural disasters under measure 3.1, Region 5 West Timisoara has the highest rate, namely 74.19% out of the total number of projects approved under this measure. Diagram 6.44 shows the regional distribution of projects under measure

233 Diagram 6.44 As regards Measure 3.2 Setting up producers groups, the public contracted value was of MEUR 0.075, namely 0.01% from the total of PARDF s commitments. For the 3 projects contracted under Measure 3.2, payments of a total amount of LEI thousand i.e. MEUR (Table 6.20) 5.72% of the NPARD allocations for were authorized and executed. The situation of the commitments and payments executed under each sub-measure within this measure is showed in Tables 6.19 and Table 6.19 Report on Executed Commitments by sub-measures under Measure 3.2 by Euro Submeasure % out of the measure Allocation Value of contracted projects Commitment rate % Cereals and Technical Plants Medicinal and aromatic plants Specialized crops (tobacco, hops) Vegetables and Potatoes Fruits, including grapes Wine grapes Mushrooms Flowers and decorative plants Milk , Meat Eggs for consumption Honey and beekeeping products

234 Fishery Products Forestry Products TOTAL 100 1,000, , Table 6.20 Report on the Executed Payments by sub-measures under Measure 3.2 by Euro Submeasure % out of the measure Allocation Value of executed payments Consumption rate % Cereals and Technical Plants Medicinal and aromatic plants Specialized crops (tobacco, Vegetables and Potatoes Fruits, including grapes Wine grapes Mushrooms Flowers and decorative plants Milk , Meat Eggs for consumption Honey and beekeeping products Fishery Products Forestry Products TOTAL 100 1,000, , The distribution on regions of projects under Measure 3.2 is given in Diagram Diagram

235 As regards Measure 3.3 Agricultural production methods designed to protect the environment and maintain the countryside the public contracted value was of MEUR from the total of PARDF s commitments, namely 0.001% of the total number of projects approved on this measure. For the projects contracted under Measure 3.3 payments were authorized and executed in value of thousand LEI , representing MEUR % from the allocations of NPARD The situation of the commitments and payments executed under each sub-measure within this measure is showed in Tables 6.21 and Table 6.21 Report on Executed Commitments by sub-measures under Measure 3.3 by Euro Submeasure Preservation of soil and protection against erosion Preservation of biodiversity by traditional agriculture methods % out of the measure Allocation Value of contracted projects Commitment rate % , , , Organic Farming , TOTAL 100 1,849, , Table 6.22 Report on the Executed Payments by sub-measures under Measure 3.3 by Euro Submeasure Preservation of soil and protection against erosion Preservation of biodiversity by traditional agriculture methods % out of the measure Allocation Value of executed payments Consumption rate % , , , Organic Farming , TOTAL 100 1, 849, , The distribution on regions of projects under Measure 3.3 is given in Diagram 6.46: 235

236 Diagram 6.46 In compliance with article 2 of the Commission Regulation (EC) no. 248/2007 of 8 March 2007 on measures concerning the Multi-annual Financing Agreements and the Annual Financing Agreements concluded under the Sapard programme and the transition from Sapard to rural development, in order to complete the SAPARD financing contracts, the Agency accomplished the following steps to transfer unsettled values, legally and financially engaged within NARDP, from the SAPARD Programme, in order to be settled under NRDP EAFRD: The amounts that remained unsettled until December 31 st, 2009, related to the SAPARD financing contracts which are subject to the transfer within NRDP EAFRD and to which, in compliance with the technical fiches of Measures 3.2, 3.3 and 3.5 provided by in NARDP, for which the value of the non-reimbursable aid is of 75% EU contribution and 25% national contribution, were de-committed; PARDF proceeded to the commitment of the amounts that remained to be discounted from EAFRD for each financing contract. According to the technical fiches related to the Measures provided in the NRDP, the value of the nonreimbursable aid will be committed with 80% EU contribution and 20% national contribution for Measures 142 and 221, and for Measure 214 the value of the nonreimbursable aid will be 82% EU contribution and 18% national contribution; The addenda by which the financing contracts were extended for the next implementation year and by which the values related to the next implementation year were engaged, were handled; For identification, the financing contracts received double code, respectively both the code allocated within the SAPARD Programme as well as the new code allocated within EAFRD have been recorded in the addenda; The maximum value of the non-reimbursable fund granted by the Contracting Authority is annually engaged based on the amounts included in the Annex III of the financing contract, namely in the indicative budget of the financing contract; 236

237 The national and community co-financing is granted within the maximum limit provided in the NRDP, namely by the technical fiche of each measure; The Addendum is handled based on the Report AP 1.5 on the verification of the payment claim, drawn up by Payment Claim Verification Unit (PCVU) - PCORDF or Technical Verification Unit (TVU) - PRCRDF, who certify the compliance/noncompliance with the conditions regarding the grant of the non-reimbursable fund; According to the payment procedure applied to the SAPARD financing contract, the PCVU PCORDF or TVU PRCRDF s experts check the payment claims; The other terms and conditions of the SAPARD financing contract remain unchanged. Within Measure 3.4 Development and diversification of economic activities generating multiple activities and alternative income, the public contracted amount of the contracts was MEUR i.e. 4.93% out of the total amount of PARDF s commitments. For the 1,058 projects contracted under Measure 3.4, payments of a total amount of LEI 239, thousand i.e. MEUR (Table 6.24) 80.97% of the NPARD allocations for were authorized and executed. Table 6.23 Report on Executed Commitments by sub-measures under Measure 3.4 by Euro Submeasure % out of the measure Allocation Value of contracted projects Commitment rate % Agriculture Services 2 1,684, , Rural tourism 25 21,055, ,727, Other types of tourist activities in rural area 20 16,844, ,053, Handcraft activities 10 8,422, ,203, Aquaculture 8 6,737, ,839, Other activities 10 8,422, ,719, Processing at farm's level of the certified traditional and/ or 25 21,055, , organic products TOTAL ,220, ,768, Table 6.24 Report on the Executed Payments by sub-measures under Measure 3.4 by Submeasure % out of the measure Allocation Value of executed payments Euro Consumption rate % Agriculture Services 2 1,684, , Rural tourism 25 21,055, ,783, Other types of tourist activities in rural area 20 16,844, ,250,

238 Handcraft activities 10 8,422, ,170, Aquaculture 8 6,737, ,830, Other activities 10 8,422, ,922, Processing at farm's level of the certified traditional and/ or organic products 25 21,055, , TOTAL ,220, ,196, As regards the general distribution of projects unaffected by natural disasters under measure 3.4, Region 7 Centre Alba Iulia is best represented holding 31.37% from the total of the projects approved on this measure; Region 1 North-East Iasi holds approximately 16.87% from the total of the approved projects, and Region 4 South-West Oltenia holds 13.84%. Thus, these three regions hold 62.08% from the total of the approved projects, aspect which can be explained by the fact that many areas with a tradition in agro-tourism are present in these regions. The regional distribution of projects under measure 3.4 is presented in Diagram 6.47 Diagram 6I.47 The regional distribution of projects affected by natural disasters within measure 3.4 is presented in Diagram

239 Diagram 6.48 Within measure 3.5 Forestry, the public contracted value was of Meur representing 4.66% from the total committed amounts of PARDF. The total value of the contracted projects on this measure (Meur ) represents 84.74% of AFA (Table 6.25). For the 113 projects contracted on Measure 3.5 payments were authorized and executed in value of thousand LEI 218, , representing MEUR (Table 6.26) 77.37% from the allocations of NPARD Table 6.25 Report on Executed Commitments by sub-measures under Measure 3.5 by Euro Submeasure % out of the measure Allocation Value of contracted projects Commitment rate % Afforestation 10 7,445, , Nurseries 5 3,722, , Investments for the improvement of primary wood processing and 15 11,167, ,030, marketing of forest products Forestry roads 20 14,890, ,930, Forest exploitation 50 37,225, TOTAL ,451, ,086, Table

240 Report on the Executed Payments by sub-measures under Measure 3.5 by Euro Submeasure % out of the measure Allocation Value of executed payments Consumption rate % Afforestation 10 7,445, , Nurseries 5 3,722, , Investments for the improvement of primary wood processing and 15 11,167, ,409, marketing of forest products Forestry roads 20 14,890, ,068, Forest exploitation 50 37,225, TOTAL ,451, ,599, As regards the regional distribution of the projects on Measure 3.5, Region 7 Centre Alba Iulia is best represented, holding 32.74% from the total number of the projects approved within this measure. Region 6 North - West holds approximately 30.09% from the total number of the approved projects, while Region 5 West Timisoara has 15.93%. In conclusion, these three regions hold 78.76% of the total approved projects under this measure. The regional distribution of the approved on measure 3.5 is presented in Diagram Diagram 6.49 For Measure 4.1 Improvement of Vocational Training, the public contracted amount was MEUR i.e 0.21% out of the total amount of PARDF s commitments. For the 5 projects contracted under Measure 4.1 payments were authorized and executed in value of thousand LEI 10,521.61, representing MEUR (Table 6.27 and 6.28) 76.69% from the allocations of NPARD

241 Report on the Executed Commitments - Measure 4.1 by Table 6.27 Euro Measure 4.1 Allocation Value of contracted projects Commitment rate % TOTAL 3,949, ,901, Table 6.28 Report on the Executed Payments by sub-measures under Measure 4.1 by Euro Measure 4.1 Allocation Value of executed payments Commitment rate % TOTAL 3,949, ,028, For Measure 4.2 Technical Assistance, the public contracted amount was MEUR i.e. 0.10% out of the total amount of PARDF s commitments. For the 10 projects contracted under Measure 4.2, payments of a total amount of LEI 5, thousand i.e. MEUR (98.79% out of the NPARD allocations for ) were authorized and executed (Table 6.30). Report on the Executed Commitments - Measure 4.2 by Table 6.29 Euro Measure 4.2 Allocation Value of contracted projects Commitment rate % TOTAL 1,441, ,374, Report on the Executed Payments by Measure 4.2 by Table 6.30 Euro Measure 4.2 Allocation Value of executed payments Consumption rate % TOTAL 1,441, , 424, In view of the funds absorption under the SAPARD Programme, as well as in view of fostering the performance of investments, the Payment authorization procedure for Measure 2.1 had been amended by including part payment installments, approved at that time by representatives of the European Commission. This procedure would have assumed receiving and verifying the payment claim Dossiers, and subsequent to the completion of the 241

242 verification, the beneficiaries would be notified in order to submit the documents proving the payment and the extracts of account (total/part). Thus, the beneficiaries could carry out the projects financed under the SAPARD Programme. Likewise, during the implementation of the SAPARD Programme, payments have been executed, subsequent to the re-verifications performed on the documents presented by the beneficiaries, following their complaints, according to national laws and the Payment authorization procedure in force. The 3 months term for the payment execution does not apply to the appeals, as the beneficiary does not submit a payment claim dossier, which involved undergoing all verification stages under the provisions of the payment authorization procedure in force. Also, we would like to add that, along with the appeals filed, the beneficiaries bring clarifications and/or additional supporting documents for the amounts that were rejected for payment Assessment of the extent to which the Programme objectives have been achieved at Programme, measure and sub-measure level for the implementing period. Measure 1.1 The Improvement of processing and marketing of agricultural and fishery products The general objective of the measure is to increase the efficiency of the processing and marketing of agricultural and fishery products, having as a result the increase of the quality of the products in order to contribute to the implementation of the community acquis, the increase of competitiveness and products added value, and the creation of new jobs. Investments made under this measure are to contribute to: orientating the production in compliance with the predictable market tendencies, improving or rationalizing the collecting networks and en-gross trade, improving the presentation and conditioning of agricultural and fishery products on the market, increasing the efficiency by using modern technology, improving the quality of the processed products and the quality control for foodstuff by observing the minimum requirements for food safety, promoting production methods which do not harm the environment, creating new jobs in rural area as well as maintaining the existing ones. Data regarding investments financed in the reference period per main objective of the project are presented in Annex no. 5 with the monitoring tables i.e. table a.1.1 and a.3.1 affected by natural disasters. Capacities provided to be achieved or modernized under this measure, for the projects not affected by natural disasters and for the ones affected by natural disasters, are presented in the below tables: Table 6.31 Projects not affected by natural disasters Sector Number of projects Reference unit for the approved projects Approved Unit of Involved capacities measure New Improved Milk and dairy products 91 hl/year 2,677,455 6,881,813 Milk collecting 2 hl/year 9, ,000 From which Milk processing units 88 hl/year 2,667,843 6,610,813 Meat and meat products and eggs 196 t/year 346, ,

243 From which processing Thousand pieces eggs/year 0 6,000 Beef 0 t/an 0 0 Pork 2 ' 0 14,200 Mutton 0 ' 0 0 Poultry 4 ' 9,097 3,240 Combined , ,661 Slaughterhouses 51 ' 181, ,172 Laboratories 0 ' 0 0 Fruits, vegetable and potatoes 40 ' 132, ,308 From which Fresh 20 ' 125,659 25,329 Processed 20 ' 7, ,979 Wine 44 ' 51, ,063 From which Laboratories 5 ' 3,000 3,140 Storage capacity 12 16, ,662 Fish 18 ' 19,541 22,154 Textile plants Cereals 63 ' 2,660,242 Oil seeds 3 ' 0 252,600 Sugar 0 ' 0 TOTAL 456 Sector Number of projects Approved Table 6.32 Projects affected by natural disasters Reference unit for the approved projects Unit of measure Involved capacities New Improved Milk and dairy products 0 hl/year Milk collecting 0 hl/year From which Milk processing units 0 hl/year t/year 11, Meat and meat products and eggs 1 Thousand From which pieces 0 0 eggs/year Beef 0 t/an processing Pork 0 ' Mutton 0 ' Poultry 0 ' Combined Slaughterhouses 1 ' 11, Laboratories 0 ' Fruits, vegetable and potatoes 0 '

244 From which Fresh 0 ' Processed 0 ' Wine 0 ' From which Laboratories 0 ' Storage capacity 0 ' Fish 0 ' Textile plants 0 ' Cereals 2 ' 18, Oil seeds 0 ' Sugar 0 ' TOTAL 3 Under sub-measure Milk and dairy products, the highest rate of investments is directed towards milk processing units, within this sector, new capacities of 2, thousand hl/year for milk collecting and processing are provided to be achieved and capacities of 6, thousand hl/year are provided to be modernized. Under sub-measure meat, meat products and eggs a new capacity for meat processing of approximately thousand tone/year are provided to be achieved and capacities with a value of thousand tone/year and thousand pieces eggs /year will be modernized, and for projects affected by natural disasters a new capacity is to be made of about thousand tone/year. The highest quota of the capacities is focused on the combined meat processing and slaughterhouse sector. Under sub-measure Fruit, Vegetables and Potatoes, new capacities of thousand tones are provided to be achieved, mainly focused on fresh vegetable storage, while modernized capacities of about thousand tone/ year are oriented mainly towards fruit, vegetable and potatoes processing. Through wine sub-measure, consisting of 44 contracts, at the end of 2009, new capacities of thousand to/year are envisaged to be created and capacities of thousand tone/ year are envisaged to be rehabilitated. In the fishery sector new capacities of about thousand tone/year will be created and existing capacities of thousand to/year will be rehabilitated. Under Textile Plants Sub-Measure, new capacities of about thousand tone/year will be set up. As regarding cereals, through the contracted projects the existing capacities of approximately 2, thousand tone/year will be modernized for projects not affected by natural disasters, and of approximately thousand tone/year for the projects affected by natural disasters. Through the contracted financed under Seed Oils Sub-Measure, the existing capacities of approximately thousand tone/years will be improved. Complete data on the capacities provided to be achieved or modernized are presented in the table 6.31 and

245 In conclusion, regarding the assessment of extent to which the Programme s objectives were achieved, is mentione that according to NPARD estimated the achievement of 2,100 projects which are included in the processing and marketing of the agricultural products, for the following sectors: milk, meat, cereals, oilseeds, wine, fruit and vegetables, potatoes, fish. On Measure projects remained contracted by the end of The measure fiche provides that within this measure projects with a total eligible value of 30,000 up to 4,000,000 EURO will be financed. Observing the rule of the measure fiche, the 456 projects managed to benefit from the entire amount allocated to this Measure. Measure 1.2 Improving the structures for quality, veterinary and plant health-control, for the quality of food stuffs and for consumer protection Capacities provided to be achieved under this measure, for the approved projects are presented in the table below: Laboratories Number of approved projects Table 6.33 Capacity no. of analysis types Sanitary-veterinary type 17 2,232 Phyto-sanitary control 2 13 Quality control for food products TOTAL Within this measure, the highest rate concerns the number of analysis types for the sanitaryveterinary control, namely 2,232 types of analyses. The complete information on the capacities provided to be achieved are presented in Tables In conclusion, regarding the assessment of extent to which the Programme s objectives were achieved is mentioned that according to NPARD was estimated the achievement of 178 projects which aim at improving the quality s control system. By the end of 2009, 20 projects were contracted under Measure 1.2. In the measure fiche it is mentioned that projects with a total eligible value between 50,000 2,000,000 Euros will be financed under this measure. Observing the specification of the measure fiche the 20 projects managed to benefit from the entire amount allocated to this Measure. Taking into account that the signing of the contracts for this Measure started in September 2006, some of the projects that have been approved to be financed under NPARD were implemented from the national budget. Measure 2.1 Development and improvement of rural infrastructure Through the projects approved in the period in question for this measure, it is provided the achievement of km of new communal roads, modernization of 2, km of communal roads and reparation of 73,898 km of the roads affected by natural disasters, the 245

246 highest rate being represented of the modernization of communal roads, namely 95% out of the total works. For the projects affected by natural disasters, modernization of km of communal roads and reparation of km for the roads affected by natural disasters are provided. In case of the Water Supply Sub-Measure, only 28% from the contracted projects represent modernizations of the existing networks, the highest rate of the investments aimed at executing of new works of drinkable water supply, namely approximately 3, km of pipe. In view of rehabilitation of the drinkable water supply systems for the areas affected by natural disasters the execution of about km of pipe is provided. For the projects affected by natural disasters, execution of new km of pipe, modernization of approximately km of pipe and reparation of km of pipe are provided. As regards the Sewerage in Centralized System Sub-Measure, aimed at works executing on a total of approximately km of pipes, out of which the execution of new works represents 86%, the modernization of the existing systems represents 14% from the total while for the reparation of the sewerage systems, the achievement of km of pipe is provided. For the projects affected by natural disasters, execution of new 5 km of pipe, modernization of approximately km of pipe and reparation of km of pipe are provided. As regards the Works for Prevention and Protection against Floods Sub-Measure, the execution of km is provided. These percentages are correlated with the situation on rural infrastructure in the diagnosis section of NPARD. The implementation of the sub-measures for Water Supply and Sewerage has an impact upon a total number of approximately 1.33 million of inhabitants, namely 0.05 million of inhabitants for the projects affected by natural disasters. The complete information on the objectives types provided under Measure 2.1 are presented in the tables below. Action Roads in rural areas from which: Number of approved projects Table Projects not affected by natural disasters Unit of measure Reference Unit Approved projects Quantity Concluded projects On-going projects 382 km 2, , building of new communal roads 10 km modernizing of communal roads 353 km 2, , rehabilitation of floods damaged roads Drinkable water supply in centralized network in rural areas from which: 19 km km of pipeline lines no. of covered inhabitants 5, , , ,

247 execution of new water supply works 184 extension and/or modernization 78 rehabilitation of drinkable water supply systems in the floods damaged areas Sewerage in centralized system in rural areas from which: execution of new sewerage works 71 extension and/or modernization 15 rehabilitation of sewerage systems in floods damaged areas Works for floods prevention and protection 1 22 TOTAL 764 km of pipeline lines km of pipeline lines km of pipeline lines km of pipeline lines no. of covered inhabitants km of pipeline lines km of pipeline lines km of pipeline lines 3, , , , , ,318 1, km ha 3, , Table Projects affected by natural disasters Action Reference Unit Number of approved Quantity Unit of projects measure Approved Concluded On-going projects projects projects Roads in rural areas from which: 60 km building of new communal roads 0 km modernizing of communal roads 50 km rehabilitation of floods damaged roads 10 km ,375 Drinkable water supply in km of pipeline centralized network in rural lines 19 areas no. of covered 45,332 45,332 0 from which: inhabitants execution of new water supply km of pipeline 12 works lines extension and/or modernization 5 km of pipeline lines rehabilitation of drinkable water supply systems in the floods damaged areas Sewerage in centralized system in rural areas from which: 2 4 km of pipeline lines km of pipeline lines no. of covered inhabitants , ,327 8,

248 execution of new sewerage works 1 extension and/or modernization 1 rehabilitation of sewerage systems in floods damaged areas Works for floods prevention and protection 0 TOTAL 83 2 km of pipeline lines km of pipeline lines km of pipeline lines km ha In conclusion, regarding the assessment of extent to which the Programme s objectives were achieved, is mentione that according to NPARD estimated the achievement of 1,800 km of communal road, which represent a rise with 180% out of the total modernized roads; On Measure 2.1 not damaged, sub measure roads, 381 projects with a capacity of 2, km have been finalized by the end of Also, 60 damaged projects with a capacity of 282,474 km have been finalized by the end of ,700 km of drinking water pipelines which represent a 20% increase compared to the existing length. It is mentioned that on Measure 2.1 not damaged, sub measure Drinking water supply by centralised networks in the rural areas, 273 projects with a capacity of 5, km have been finalized by the end of Also, 19 damaged projects with a capacity of km have been finalized on the sub measure Drinking water supply by centralised networks in the rural areas. Within the NPARD were estimated 1,300 km of waste water pipelines (sewage), representing with 1.6more than the existing length ( 864 km); On Measure 2.1 not damaged sub-measure Sewage in centralized system in the rural areas, 87 project with a capacity of km have been finalized by the end of Also, 4 damaged projects with a capacity of km have been finalized on the sub-measure Sewage in centralized system in the rural areas. Measure 3.1 Investments in agricultural holdings As a result of the approved investments for this measure, in the feasibility studies for the contracted projects the following capacities are provided (Tables 6.36 and 6.37): Modernizing or building 879 stables and other buildings within the farm, namely 5 stables and other constructions within farms for the projects affected by natural disasters; Modernizing of 16 greenhouses on a surface of ha and building 79 new greenhouse on a surface of ha; Procurement of 8,388 machinery or equipment, from which 99% are tractors, combines and other equipment, namely the procurement of 244 of machines and equipment for the projects affected by natural disasters; Procurement of 9,894 heads of animals with high quality genetic value; Setting up or modernizing of ha of orchards and ha vineyards. 248

249 Table 6.36 Projects not affected by natural disasters Number Reference unit for approved projects of Investment type approved Measure Amount/Area projects unit number ha Constructions 347 pieces Out of which: Out of which: Stables for cows/buffaloes 160 pieces Pig fattening 71 pieces Poultry farms 38 pieces Other stables 18 pieces Green houses Newly built covered area 36 pieces/ha and adequate equipments Modernized covered area 8 pieces/ha Other constructions in farm 16 pieces Tools and equipments- independent 1,400 pieces 8, , Tractors, combine, other equipments 1,377 pieces 8, , Sewerage/ installations for treating used water 0 pieces Irrigation installations 20 pieces 75 5, Installations for complex processing of animal fodder 3 pieces Septic tank and stable waist platforms 0 pieces Acquisition of animals with high genetic value 43 heads 9, Milking cows/buffaloes 28 heads Out of which: Swine 1 heads Sheep/goats 14 heads 9, Agricultural plantations 62 ha 85 1, Out of which: Fruit growing 34 ha Vineyard 28 ha Vineyards nurseries 0 ha Other , TOTAL 1,904 Investment type Table 6.37 Projects affected by natural disasters Number of approved projects Reference unit for approved projects Measure unit number Amount/Area Constructions 3 pieces Out of which: Stables for cows/buffaloes 1 pieces Pig fattening 0 pieces Poultry farms 0 pieces Other stables 1 pieces Green houses Newly built covered area 0 pieces/ha and adequate equipments Modernized covered area 0 pieces/ha Other constructions in farm 1 pieces ha 249

250 Tools and equipments- independent 28 pieces 244 7, Tractors, combine, other equipments 28 pieces 244 7, Sewerage/ installations for treating used water 0 pieces Out of Irrigation installations 0 pieces which: Installations for complex processing of animal fodder 0 pieces Septic tank and stable waist platforms 0 pieces Acquisition of animals with high genetic value 0 heads Milking cows/buffaloes 0 heads Out of which: Swine 0 heads Sheep/goats 0 heads Agricultural plantations 0 ha Out of which: Fruit growing 0 ha Vineyard 0 ha Vineyards nurseries 0 ha Other TOTAL 31 In conclusion, regarding the assessment of extent to which the Programme s objectives were achieved, is mentioned that according to NPARD estimated the achievement of 40,000 ha with conditions improved for irrigations and drainage representing 5% of the used area. On Measure 3.1 the type of investment irrigation systems, 20 projects with a surface of 5, ha remained contracted by the end of NPARD estimated 11,000 projects for the investments in the agricultural holdings for 12,000 agricultural producers out of which 20% would be young farmers; On Measure 3.1 Investments in the agricultural holdings, 1,904 projects for 580 young beneficiaries remained contracted by the end of In the measure fiche, it is stipulated that under this measure projects with a total eligible value between 5, ,000 EURO would be financed. The total eligible value can reach 2,000,000 Euros only for the projects which aim at implementing the community acquis in the farms for breeding the livestock and poultry after the implementation of the investment. The total amount of the contracts on this measure (1904) is between 5,000-2,000,000 EURO. Also, on Measure 3.1, 31 damaged projects were contracted whose beneficiaries are 14 young farmers. NPARD estimated 10,600 equipments for the mechanization of the agriculture. On Measure 3.1 on the type of the investment «Machines and independent equipments, 1,400 projects which a capacity of 8,388 machines and equipments remained contracted by the end of

251 Also, on Measure 3.1, 28 damaged projects which have a capacity of 244 machines and equipments were contracted. NPARD estimated newly build or modernized stables. On Measure 3.1 types of investment Stables for cows/buffalos and Other stables, 178 projects which aim at building 379 stables remained contracted by the end of 2009 Also, on this measure a damaged project which aimed at building a stable for cows/buffalos and a project financed under the type of investment: Other stables with a capacity of 1 stable were contracted. Measure 3.4 Development and diversification of economic activities generating multiple activities and alternative income After the approval of the investments for this Measure, in feasibility studies, for contracted projects are mentioned the following capacities (Tables 6.38 and 6.39): For the 2 approved projects on agricultural services, a number of 6 organizations and 8 persons is registered; Modernization or setting up of adaptation places of 9,944 beds in rural tourism, as well as 50 beds for the projects affected by natural disasters and 1,258 in other type of tourist activities in rural area; Involvement in handicraft activities of 164 artisans; Producing and processing of about 1, tones of aquaculture products, tones of snails and frogs, 2, kg of sericulture products, 1, tones of bee-keeping products, 3, tones of mushrooms, 2, tones wild berry fruits and wild berry bushes and tones of medicinal and aromatic plants-processing; Processing at farm level of the traditional products certified of 38, hl/year and of tone/year. Table 6.38 Projects not affected by natural disasters Number of Reference unit for approved projects Actions approved projects Measure Unit Amount no of organisations 6 Agricultural services 2 no of persons 8 Rural tourism 625 no of beds 9,944 Other types of tourist activities in rural area 63 no of beds 1,258 Handicraft activities 18 no of artisans 164 Aquaculture 16 tones/year 1, Snails and frogs 85 tones/year Sericulture 1 tones/year 2, Bee-keeping 213 tones/year 1, Mushrooms 23 tones/year 3, Fruit of berries and bush fruits processing Medicinal and aromatic plantsprocessing 6 tones/year 2, tonnes/year

252 Processing at farm's level of the certified traditional and/ or organic products Processing of organic products 0 Processing of traditional products 1 TOTAL 1,055 1 hl/ year 38, tonnes/year hl/ year tonnes/year hl/ year 38, tonnes/year Table 6.39 Projects affected by natural disasters Number of Reference unit for approved projects Actions approved projects Measure Unit Amount no of organisations 0 Agricultural services 0 no of persons 0 Rural tourism 3 no of beds 50 Other types of tourist activities in rural area 0 no of beds 0 Handicraft activities 0 no of artisans 0 Aquaculture 0 tones/year 0.00 Snails and frogs 0 tones/year 0.00 Sericulture 0 tones/year 0.00 Bee-keeping 0 tones/year 0.00 Mushrooms 0 tones/year 0.00 Fruit of berries and bush fruits processing Medicinal and aromatic plantsprocessing TOTAL 3 0 tones/year tonnes/year 0.00 In conclusion, regarding the assessment of extent to which the Programme s objectives were achieved, is mentioned that according to NPARD estimated the achievement of 7,000 projects for the diversification of the economic activity out of which 3,700 units for tourism and forestry tourism (representing 1,2 of the existing ones). On Measure 3.4 Development and diversification of economic activities, providing for multiple activities and alternative incomes, 1,055 projects remained contracted by the end of 2009, out of which 625 projects on Rural Tourism and 63 project on other types of tourist activities in the rural area. Also, 3 damaged projects were contracted on Measure 3.4, on rural tourism. 252

253 Measure 3.5 Forestry The capacities for the approved projects provided to be achieved under this measure are presented in the table below: Measures Afforestations Number of approved projects private 3 public 0 Table 6.40 Reference unit for the approved projects 2 Measurement unit Quantity ha thousand piece 468 ha thousand piece 0 Nurseries 1 ha Investments for improvement the wood No. of piece, 207 primary processing and marketing of forestry 34 equipment, machines products m 3 /year 736, Forestry roads, out of which private 1 km public 74 km Equipment number Management of woods 0 Constructions numbers Associatio 0 Members number ns of the Out of which 0 Equipment number forest Constructions owners numbers TOTAL 113 In conclusion, regarding the assessment of extent to which the Programme s objectives were achieved, is mentioned that according to NPARD estimated the achievement of 1,200 km of build or improved forestry road. On Measure 3.5, 1 project with a capacity of km was contracted on the sub measure forestry private roads, and 74 projects with a capacity of km were contracted on the sub measure forestry public roads by the end of Taking into account that the signing of the contract financed under this Measure started in October 2006, some of the projects considered in NPARD could not be implemented. NPARD estimated ha of afforestation mainly on degraded agricultural lands. On Measure 3.5 sub-measure Private afforestation, 3 projects with a capacity of ha remained contracted by the end of According to the NPARD estimated 400 timber s operation and supporting the procession of the wood companies. On Measure 3.5 sub-measure «Investments for the improvement of primary wood processing and marketing of forest products 34 projects remained contracted by the end of

254 Within measure 3.2 Setting up opf the producers groups, NPARD estimated 500 supported producer groups, which include about 16,800 farmers out of which 3,300 are young. On Measure 3.2, 3 projects with 3 producer groups which have 98 young farmers as beneficiaries remained contracted by the end of The signing of the contracts for this measure began in January NPARD, within Measure 3.3 Agricultural production methods designed to protect the environment and maintain the countryside estimated 36,000 ha covered by agri-environment measures. On this measure, 1 project remained contracted by the end of 2009 on the activity B2 Conservation of the pastures and Alpine grassland which covers an area of 50 ha. Taking into account that the signing of the contract for this Measure began in January 2007 and the financing conditions were more advantageous under the EAFRD Programme, some of the beneficiaries withdrew the projects contracted under the SAPARD Programme, preferring to access the EAFRD Programme. Also, within NPARD, measure 4.1 Improvement of vocational training estimated 150,000 of farmers or forests owners trained by specialized programmes ; On Measure 4.1 Improvement of vocational training, the section: the training of the agricultural and forestry holdings management in the economic, technical, legal, fiscal fields, out of which: forestry, 412 students attended by the end of Summary regarding the situation of payments performed on measures 1.1, 2.1, 3.1 and 3.4 defalcated on sub-measures and 4.1, 4.2 is showed in Table

255 Table

256 256

257 * Given the impossibility to contract projects in stand by on M 2.1, has been decided their exclusion from submission and selection reports as numbers as well as value. ** Note The value of contracts has been rectified with additional acts and decommitted values until 30 of April First assessment of the economic, social and environmental impact of the programme at the different levels A preliminary assessment of the implementation results and achieving the objectives established for the SAPARD measures was presented at the beginning of this chapter. A quantitative and qualitative analysis of the implementation effects and of the progress from an social-economic and environment point of view, shall be available at the end of the SAPARD Programme s ex-post assessment report. The implementation of the SAPARD Programme has shown the considerable effects on relevant indicators used to measure the results and impact. These effects include important contributions to the economic growth of beneficiaries financially supported, especially within the agricultural and processing sector of food, more than the average economic growth from Romania, creating numerous jobs in the primary production and in the processing sector, and an improved competitivity and productivity achieved according to the EU standards regarding the quality and safety of products, environment, work conditions and animal welfare. 257