Ia. Information on the management and control systems for Structural Funds in Greece - general overview 1. Financial Envelopes of Structural & other EU Funds (2007-2013, EU ERDF Cohesion Fund ESF Cohesion Policy EAFRD EFF 2007-2013 12.14 3.69 4.36 20.21 3.70 0.207 2. 2007-2013 Operational Programmes and Financial Allocations by Fund There are 14 operational programmes under the Greek National Strategic Reference Framework (NSRF) 1, of which 5 regional (multi-thematic, funded by ERDF), 3 sectoral funded by EDRF, 2 sectoral funded by ERDF+CF, and 4 sectoral funded by ESF, adopted by the Commission between October 2007 and late spring (ESF programmes were approved last). Each programme is managed by a separate Managing Authority (or Intermediate Managing Authority for the regional OPs, see below). Operational Programme Structural Funds Convergence Objective Competitiveness & Entrepreneurship Digital Convergence Technical Assistance Western GR-Peloponnesus-Ionian (Gonv.) Attica (Phasing-out) Macedonia-Thrace (Çonv. &, Phasing-out) ThesŚaly-Continental GR-Ëpirus (Çonv. & Phąsing-in) Crete & Aegean (Conv. & Phasing-in) Improvement of Accessibility Environment & Sustainable Development CF Convergence Objective Improvement of Accessibility Environment & Sustainable Development EUR million 1291 860 192 ;^ ;:::'-::- ν-91'4; : - : ':-:' ; -I'',- ž i3^' : - ;;; ',. ; ' ': i : -'У-ъШ:- : гт'л\:., ^:У'^-:7Ш:'^:: ;.: : :' ; 731;-;Л 1583 220 11642 2 117 1580 3 697 ESF Convergence Objective The reference document for programming Structural and Cohesion Fund interventions in a manner consistent with the Strategic Guidelines in Cohesion Policy 2007-2013. It defines the strategy chosen by the Member State and presents a list of national and regional Operational Programmes which it is seeking to implement.
Human Resources Development Education & Lifelong Learning Administrative Reform National Contingency Reserve convergence (ERDF+ CF+ESF) Structural Funds Competitiveness ERDF Thessaly-Continental Greece-Epirus Crete & Aegean Islands ESF Human Resources Development Education & Lifelong Learning Administrative Reform competitiveness (ERDF+ ESF) Objective Structural and Cohesion Funds (excluding cooperation objective) 2 191.2 1 396.1 489.6 158.8 4 235.8 19 574.9 367 140.4 507.3 68.7 43.8 15.3 128 635.3 20 210 Central government structures and their role in OP implementation: Coordination of interventions funded by the Structural Funds is done by the Ministry of Economy. The Ministries of Infrastructure and of Environment are of capital importance to SF implementation, as they are leading services for most large infrastructure projects. Other Ministries responsible for the implementation of co-funded interventions of substantial budgets are: Education; Employment; Health; Culture and Tourism; Protection of the Citizen (Interior). Regions and their role in OP implementation: The country is divided into 13 regions forming devolved units of the central state administration. They have their own budget (derived from central government transfers without any independent sources of revenue worth mentioning), and civil service, and are run by a Secretary General, appointed by the President of the Republic on the Prime Minister's recommendation. The Secretary General is the head of all the region's services (including of the Managing Authorities of regional operational programmes) and can be considered the executive body of the regional administration as well as the representative of the central government in the region. Therefore regions are not autonomous entities authorized to formulate policy differentiated along regional specificities. In Greece, policy-making authorities for each sector are still the national ministries. Of the 13 (NUTS-2) regions, 5 belong to the pure convergence objective, 3 are phasing-out and 2 are phasing-in (RCE objective).
Regional Operational Programmes: For the purposes of the implementation of structural aid in 2007-2013 the Greek government lumped together the above 13 regions in 5 territorial units called "supra-" or "greater" regions in order to achieve managerial advantages in developmental policy. This measure has proven of doubtful usefulness, as the new territorial units comprised regions belonging to different objectives, thus complicating OP architecture and, consequently, implementation progress. However, the measure was also aimed at preparing the Greek public for the gradual revision of the country's administrative map for purposes that go beyond EU regional policy. Each of these 5 supra-regions is covered by a regional territorial programme (see shaded cells in table above), managed on a day-to-day basis by an Intermediate Managing Authority. The five Intermediate Managing Authorities are under a single Managing Authority for the Regional Operational Programmes, which is part of the Secretariat Generalfor Investments and Development of the Ministry of Economy. This means that the management of the regional programmes is partly centralized. 3. Implementation Progress; Impact of Management Systems on Implementation Implementation of the NSRF in Greece is very limited, with payments on the ground (not yet fully declared to the Commission) barely exceeding 1 by mid-march 2010, or approx. 4% of the entire financial envelope of 25.9 (Community assistance + national cofunding). Results indicate a higher degree of activation for the ERDF, which is mainly attributed to the greater progress of the OP "Competitiveness and Entrepreneurship" and the 5 Regional OPs. The level of ESF and Cohesion Fund activation has been substantially lower. This grave delay in overall implementation is due to various reasons. First and foremost, insufficient liquidity, which manifested itself in public finances as early as mid-, resulted in serious difficulty to provide national co-financing; consequently, scarce national resources were almost entirely dedicated to the completion of the 3 r CSF, whose extension to the end of 2009 diverted financial and managerial efforts away from NSRF implementation. The ensuing delay was compounded by a complex NSRF "architecture, " resting on a division between sectoral and regional programmes, with cross-cutting policies which need to be implemented by various Managing Authorities through more than one programme. The management of certain parts of the envelope of regional programmes (sometimes entire priority axes) has been delegated to the Managing Authorities of thematically relevant sectoral programmes. Finally, inclusion of projects in the programmes requires approval by the competent Ministries (e.g. Education, Culture, Health) -a time-consuming process so far. To regulate all that, a very large number of secondary legal instruments (ministerial and interministerial decisions) needed to be issued in addition to the main national law (3614/2007) setting up the framework for the management and control systems (MCS) of the NSRF. Thus the architecture itself necessitates high resource input to ensure mere coordination. The slow maturation of large infrastructural projects and the non-timely completion of the specification and planning of actions by the Managing Authorities have added to the delay. In mid-march, the new government in place since October 2009 submitted to the Parliament a bill amending the original law 3614/2007 with the aim of simplifying MCS. However, the opinion of the REGIO geographical desk maintains serious doubts about the degree to which this revision can deliver the promised efficiency gains.
Ib. Information on the management and control systems for Structural Funds in Greece - audit issues 1. Audit activity on the 2000-2006 programming period resulting from audits prior to the previous Committee's delegation visit (6-9 May 2007). Concerning ERDF and the issue of public procurement, an action plan was agreed between the Greek authorities and the Commission in February 2004. The Commission subsequently reached the conclusion that the deliverables of the action plan were not satisfactory and a financial correction decision was adopted by the Commission. Decision 1731/2005 addressed all major issues relating to public procurement in Greece, i.e. tendering with incomplete studies leading to major changes of the physical object during project implementation and the use of the mathematical formula for awarding contracts. As a consequence, the Greek authorities had to pay back to the Commission 518 million and agreed to apply a 10% correction on all future expenditure declared to the Commission. An annual correction is performed by the Paying Authority and this is monitored by the geographical Unit of DG Regional Policy. 2. Audit activity on the 2000-2006 programming period following the previous Committee's delegation visit (6-9 May 2007). Concerning the Cohesion Fund and following a system audit done in May 2005, an action plan was proposed asking to review the amendments in the physical objects of the contracts ("epi elatton"), to identify all irregularities concerning studies contracts and to establish an exliaustive list of the contracts for which the mathematical formula was used. A Commission Decision E () 5026 was issued on 11.09.. The Commission Decision led to a correction of 23.261.707,62. A. List of audits related to the European Regional Development Fund Year of audit 2009 Audited programmes/ bodies Specific audit mission on OP Culture. Follow up mission focusing on state aid in Greece Review of the Main findings/ State of follow up Non-respect of public procurement rales; non respect of Commission Decision 1731/2005; irregular extension of contract; the internal regulation for one museum for awarding contracts was not finalised. In the follow up letter the proposed financial correction is 1.157.627,75, on projects with value equal to 43.554.670 (EU contribution). Audit open. Weaknesses in the management of state aids - large number of final beneficiaries granting aid in the absence of a centralised monitoring system => risk of non-respect of de minimis rules, non-identification of large projects, potential artificial splitting. Audit open. Non-classification of findings, lack of assessment of
2007 2007 work of the winding-up body (WUB) OP Epirus - MA, PA, Article 10 body and final beneficiaries OP Continental Greece - MA, PA, Article 10 body and FBs potential systemic character of irregularities, unclear and non-precise conclusions. During the follow up mission it was concluded that the action plan could be closed since the closure guidelines were issued and approved, the categorisation of the findings to "main" and "secondary", and to "systemic" and "non systemic" has taken place, the findings relating to a specific group of final beneficiaries are grouped and analysed together. Audit closed. The audit work carried out confirmed findings from the 2006 audit of the OP Competitiveness relating to state aid schemes, namely weak supervision by MA, problems in methodology for on-the-spot checks, lack of mechanism for monitoring of accumulation. Audit closed. Transversal issues on state aid issues were followed up in the mission on state aid carried out in. Weak methodology for on-the-spot controls; lack of sufficient documentation for on-the-spot checks canied out by Unit C of the MA; sampling method for on-the-spot checks for state aids; assurance for article 9; need to review additional files and performing walk-through tests during system audits; weaknesses in verifications on functioning of the MA. Furthermore, the auditors identified a case of a revenue generating project where the rate of co-financing might have to be revised. Audit closed. B. List of audits related to the Cohesion Fund Year of audit Audited programmes/ bodies Main findings/ State of follow up 2009 Closure of Cohesion Fund projects Closure of Cohesion Fund projects Water supply of Heraldion and Agios Nikolaos area from Aposelemi dam One sub project was not completed and not operational; the winding up declaration also concluded that subproject was not completed and not operational and therefore ineligible. For another project, the budgeted versus actual income and expenditure were not available. Another project had a problem in the audit trail. Audit open. Following a hearing, the deadline of 30/6/10 was fixed for the MS to inform the Commission on the status of the incomplete project. Two of the closed projects may be revenue generating; the third closed project was not operational at the time of the audit. The systemic findings were identified and followed up. Audit closed. Weaknesses in implementation deriving from delays due to expropriations, archaeological findings, and availability of funding; delays in implementation of contract for the construction of the dam; experience was used both as selection and as award criterion; an amount of 263.412,30
2007 2007 Special Service of OP Western Greece Special Service of OP Railways has been paid twice, this expenditure has not been declared to the Commission. There is an open OLAF enquiry regarding this project. Audit closed. Very few unit C controls were done, and the quality of documentation was poor. The contracts for 8 technical consultants were directly awarded. Lack ofinformation and publicity measures. Serious delays in project implementation. One contract examined had the requirement for "legal representative". The WUB is expected to malce appropriate corrections for contracts directly awarded. Audit closed. Unit C controls should be done on implementation, all Unit B 3 team was newly recruited, time delays in the implementation of projects. Audit closed. 3. Audit activity on the 2007-2013 programming period In accordance with the Enquiry Planning Memorandum of DG REGIO on the review of the work of audit authorities, the objective is to obtain assurance on the functioning of the systems through the review of the work of the Audit Authority (EDEL). Field work will start in June 2010 until December 2010 (5 missions) and will mainly consist of re-performance of the audit work performed by the Audit Authority. 4. Conclusion on the Management and Control system in place For the 2000-2006 programming period, there is reasonable assurance that the management and control systems in place are functioning effectively and in compliance with the applicable regulations (Council Regulation 1260/1999, Commission Regulation 438/2001, Council Regulation 1164/94, and Commission Regulation 1386/2002) except for the management of state aids that has a moderate impact on the functioning of key elements of the system. For the 2007-2013 programming period, the management and control system established complied with the applicable requirements of Articles 58 to 62 of Council Regulation (EC) No 1083/2006 and section 3 of Commission Regulation (EC) No 1828/2006 and functioned effectively so as to provide reasonable assurance that statements of expenditure presented to the Commission are correct and, as a consequence, reasonable assurance that the underlying transactions are legal and regular, except in the following respects, which have moderate impact: The systems audit work has been limited to the operational functions of the Managing Authorities/Intermediate Bodies; β No audits of operations were carried out during the audit period, in absence of certification of expenditures during. : Unit C is the management verification unit of the Greek Managing Authority. 1 Unit B is the project management unit of the Greek Managing Authority.