Revision of
EuropeAid
Financial Regulation: Trust Funds
Brussels, 16 November 2010
1
SUMMARY
EuropeAid
1. RATIONALE OF THE PROPOSAL
2. INVOLVEMENT OF DONORS
3. MANAGEMENT OF THE TRUST
FUND
2
EuropeAid
RATIONALE OF THE
PROPOSAL
3
Rationale of the proposal
EuropeAid
• Trust funds constitute a commonly used mechanism for aid
delivery:
o 100% of the EU financial contributions to the World
Bank;
o 26% of the EU financial contributions to the United
Nations.
• EU budget currently contributes to 71 development-related
trust funds / EUR 2.5 billion.
• Request by European Parliament in 2007 and 2008 discharge
procedures: more visibility and enhanced control of funds.
4
Rationale of the proposal
EuropeAid
• Trust Fund will remain exceptional:
o
o
o
Limited scope: emergency, post-emergency, thematic
actions.
Only where there is agreement between donors
EU has an added value compared to other alternatives
• Not designed to replace the use of third organisations.
• Trust Fund addresses the constraints of Assigned Revenues
5
Rationale of the proposal
EuropeAid
• Why are Trust Funds placed in a special account outside the
EU Budget?
o
o
o
own purpose and nature of Trust Funds: accounts
detached from the budget of the managing organisation
Shared decision-making structure: Management Board
Rules on receipt of funds from other donors into the EU
budget and the decision-making relating to the
commitment of EU funds are slow and cumbersome
6
EuropeAid
INVOLVEMENT OF DONORS
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Involvement of donors
EuropeAid
• Establishment: involvement at two levels:
o
o
Donors: agreement to establish a EU Trust Fund
All Member States: participation in approval of the
Programming Documents and Financing Decision
establishing the Trust Fund (Committee)
• During life of Trust Fund:
o Donors represented in Management Board
o All Member States represented in Committee: approval of
Financing Decisions (i.e. additional EU Contribution,
extension of duration)
8
Involvement of donors
EuropeAid
• Role of Management Board:
o decide on the activities to be financed and approve the
report and the accounts of the Trust Fund
o Commission has veto power: it is responsible for
execution of funds: in order to ensure consistency with
political and operational framework and the financial
rules
• Liquidation:
o Duration initially agreed by donors
o Any extension is requested by Management Board
o After expiration of duration: Commission takes formal
decision
9
EuropeAid
MANAGEMENT OF THE TRUST
FUND
10
Management of the Trust Fund
Regulatory framework
EuropeAid
• Outside the EU Budget BUT Financial Regulation rules apply:
o
Grants
Procurement
Financial Instruments
o
Methods of implementation: direct or indirect
o
o
11
Management of the Trust Fund
Accounts
EuropeAid
• The accounting officer of the Trust Fund is the Accounting
Officer of the Commission;
• The bank account management will be done following the
rules established by the Accounting Officer;
• Trust fund accounts will be consolidated in the Commission's
annual accounts;
• Trust fund accounts approved by Management Board
• Accounts presented to the budgetary authority within the
discharge procedure of the Commission
12
Management of the Trust Fund
Audit
EuropeAid
• Commission's internal auditor shall have the same powers as
regards any other actions carried out by the Commission;
• European Court of Auditor shall have the same unrestricted
powers as regards any other actions carried out by the
Commission;
• External audit every year: beyond practice by main Trust
Fund managers
13
Management of the Trust Fund
Reporting
EuropeAid
• Reporting (both narrative and financial) will be twice a year
(instead of a yearly report in case of international
organisations)
• Annual report approved by Management Board
• Report is presented to the budgetary authority within the
discharge procedure of the Commission
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Management of the Trust Fund
Management fee
EuropeAid
• Donors charged up to 7% of contribution as management fee
• Maximum fee based on EU cap on indirect costs to delegatee
entities
• Actual fee calculated on extra costs entailed by Trust Fund
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Further information
EuropeAid
• On EuropeAid:
http://ec.europa.eu/europeaid/index_en.htm
• On the speakers:
Javier RAYA AGUADO
Head of Contractual matters section
[email protected]
Dolores DOMINGUEZ PEREZ
Contractual matters section
[email protected]
Unit G7: Financial and contractual matters, and legal
affairs
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Aidco presentation : Trustfunds - Practitioners Network of European