July 19, 2011
Str. Sevastopol
nr. 13 - 17,
Sector 1
Bucureşti
tel 021 212 3126
021 212 3127
fax 021 212 3108
e-mail
office@ipp.ro
www.ipp.ro
Main conclusions of the Institute for Public Policy Monitoring Report
on the Structural Funds managing practices (case studies: the Regional
Operational Program (ROP), the Operational Program for Human Resources
Development (SOP HR), the Operational Program for Public Administrative
Capacity Development (SOP ACD).
Context
Although we reached half of the current Financial Cycle of the Structural Funds in
Romania, apparently the main concern of the Government is to access European
funds – namely to increase “absorption capacity” no matter how, thus not paying
the necessary attention to the sustainable results of these funds absorption, nor to
the evaluation and project management criteria. Looking at what has been
absorbed in what fields and what kind of projects, one can easily see that there
has been no vision about what Romania plans to develop by using these
resources.
The recent report of the Institute for Public Policy identifies a number of structural
problems with regards to the management of structural funds in Romania, that
concern the evaluation and selection of projects procedures and the questionable
impact that some of them have upon the desirable sustainable objectives at the
national level.
Methodology
The research that supported the elaboration of IPP Report has been implemented
during the last 4 months, from March to June 2011, although preliminary collection
of information has been initiated before. Main tool of accessing data was the law
no. 544/2001, law on citizens’ access to public information. Also the research team
carefully analyzed the information available on internet, precisely on the official
WebPages of the monitored governmental bodies. Similar monitoring reports of
organizations from Bulgaria were very useful in this process of documentation.
At this point, IPP questioned three managing authorities that are responsible for
the management of: the Regional Operational Program, the Operational Program
for Human Resources Development, the Operational Program for Public
Administration Development Capacity and the Authority for Structural Funds
Coordination. Each of these authorities was questioned about:
- List of approved projects per all Axes and major domains of interventions,
together with information about the scope and objectives of each of these
projects co-financed through structural funds
- Copy of the technical assistance contracts
- Nominal list of members of project evaluation committees from when the
very first calls for proposals were launched until present.
Each of these questions raised several obstacles in relation with the Managing
Authorities, IPP being asked to justify the need of receiving the information, being
asked to visit the premises of the Ministries to make copies of some documents,
etc. Finally, the only documents that were given access to were the contracts for
the technical assistance provided to each of the Managing Authorities.
The available data was later analyzed in relation to the development priorities as
included in important strategic documents such as: the 2007 - 2013 National
Development Plan, the Framework documents supporting the Operational
Programs, the Terms of References for each of the Programs, the minutes of the
Managing Authorities meetings etc.
The three Managing Authorities were also asked about whether a plan of
organizing consultations with the civil society with regards to the next Financial
Programming 2014 - 2020 was elaborated. All of them said that no process has
been initiated in the light of future Financial Cycle so far.
Main outlines of the documentation process
There is a severe lack of transparency with regards to the management of
structural funds at all levels of administration in Romania, especially at the top level
of the Government. The public authorities do not perceive that structural/European
funds are public money that has to be spent in full transparency and accountability
to the European taxpayers. The efforts for having access to information based on
which the current report was elaborated were enormous, still some information was
not communicated to IPP. Names of projects’ evaluators, projects management
teams and even copies of the projects themselves are still kept secret by the
Managing Authorities, evoking thousands of reasons except from the need of
acting transparent since there is public money involved. Unfortunately, even some
EU officials tend to think the same, which is at the detriment of a country that has
to learn act European.
The absorption rate is very low. The most serious problem is the calculation
methodology that is presented by each Managing Authorities that seems to
different from one Authority to another, thus misinforming the Prime Minister and
further European officials about the current situation in Romania.
Strategic development documents that Romanian governing authorities elaborated
in the last years are not consistent with the objectives/terms of references for the
approved projects under structural funds. From all data that we could access it was
obvious to IPP that there has been no vision when programming these structural
funds objectives in the very first instance and this lead to frequent cases of
potential overlapping of finances (eg. in the area of human resources training).
Although there are large amounts of money allocated for the technical assistance
of the Managing Authorities and the decentralized bodies, the actual management
of the process is very poor. There have been important amounts of money
allocated for training/international exchange visits for the personnel of the
Managing Authorities who in the end outsourced almost the whole management
process to private companies that also gained huge amount of money for:
evaluating projects, training the personnel of the Authorities etc.
Detailed conclusions
The main conclusions of more than 4 months monitoring activities undertaken by
the Institute for Public Policy with regards to the current management of structural
funds in Romania, at least at the level of three Managing Authorities, showed the
following:
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•
Absorption rate, specifically the structural funds that are already spent, is
still very small, from 7% at the Regional Operational Program to almost
20% from the Operational Program for Human Resources Development.
What is important to underline are the differences of figures between the
Management Authorities and the Structural Funds Coordination Authority
(ACIS), determined by the different calculus formula used by MAs.
•
There is a severe lack of vision and poor capacity of negotiating the
budgetary implications of the programs that has been perceived from the
moment of the Operational Programs negotiations years ago until present.
This explains why the Government is currently concerned with only
spending as much as possible rather than focusing on impact and results of
these investments. We currently have development strategies financed with
thousands of Euro (eg. The County Council of Bacău), golf resorts in
villages or projects of millions of Euro run by NGOs which never before
managed more than a several thousands, while at the same time we have
sectors such as the health sector which is currently desperately needing
financial resources to support the reform.
•
Same lack of vision could explain the fact that the Terms of References for
the current projects have no impact indicators or some minimum indicators
that do not justify an investment of millions of Euro as they do not contribute
to real economic development (this is more obvious in projects financed
undr HR SOP).
•
The Managing Authorities do not communicate explicit information about
the stage of reaching their Operational Program’s objectives. Apart from the
global figures of absorption (which in fact represent the number of signed
contracts and not the spent money), the Managing Authorities do not
explain to the public, for example, how many km of roads were rehabilitated
with the structural funds so far? How much revenues are collected by the
local authorities as one of the stated goals of the SOP ACD is to increase
the local revenues? How many trained citizens actually found a job after
being trained in a Human Resources Project?
•
There is a serious lack of transparency at the level of Managing Authorities
with regards to the way the structural funds are managed at present; the
general excuse is that Brussels is demanding to be discrete with such data.
Current study elaborated by the Institute for Public Policy explains that such
practices are of Romanian origin.
•
Information is poorly organized at the level of the Managing Authorities. IPP
couldn’t access information about the scope and objectives of the financed
projects, nor about the projects management teams, although all such data
is concerning public money.
•
From all gathered data we acknowledge that presently the Authority for
Structural Instruments Coordination has actually no role in coordinating and
unifying the working practices of the Managing authorities, not even in the
area of public information communication. We wonder in this context what is
the real contribution of ASIC apart for managing the Operational Program
for Technical Assistance that finances important public institutions’
personnel salaries. We therefore suggest that its responsibilities will be
transferred to a newly created Ministry managing the elaboration of a
national development framework in key sectors of the society as well as
with harmonizing these framework objectives with the structural funds
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opportunities. The new Ministry should be made responsible for
accomplishing the stated objectives and also should be empowered to
impose sanctions on Managing authorities for any deficiency that is
encountered in administrating the sectoral structural funds. The creation of
such a state authority is not enough unless it will have qualified personnel
that will be recruited more carefully than who were the current Managing
authorities employees. At the same time, a single data base with all related
structural funds spending information (all financed projects per domains,
listing scopes and objectives of the projects, all beneficiaries, geographical
regions where various projects were implemented in order to avoid
overlapping, etc.) should be created and updated by the newly established
body.
•
Costs with the civil servants and employees managing this process are
huge; technical assistance is of aproximately 450 millions of euro, money
that is largely used in outsourcing services related to managing the process
while also paying the personnel of the managing authorities/ministries
working in this area, etc.
•
Important amounts of money are invested in training the public institutions
personnel although almost the entire management process is outsourced to
private consultancy companies. Therefore we wonder what is the
explanation for spending so much money with the training of the personnel
to manage the process while almost the entire structural funds managing
process is externalized? ROP for example paid the services of a contracted
company to train its personnel in monitoring and evaluating the program
and ultimately outsourced this service to a different private entity.
•
One common practice is to finance variety of projects aimed at advising,
qualifying and professionally training all those seeking for new jobs in a
county, whereas there are public entities, such as the County Eployment
Agencies, which are supposed to do that. We therefore wonder if the
decision-makers are considering to restructure these entities, that are left
with no role under these circumstances.
•
There are frequent cases of projects that are gained by private entities
which afterwards externalize the entire project thus proving their incapacity
to manage it.
•
Many public authorities, especially the Ministries, coordinate their own
projects of millions of euro consisting in carrying on in fact their legal
responsibilities. Most relevant example is of the Ministry of Public
Administration which gained a project for the purpose of writing laws. We
wonder what will motivate the civil servants to further draft other legislation
when the project will be over.
•
The generous available resources of the structural funds have absurdly
twisted the IT market in Romania: in the majority of the structural funds, all
IT deliverables cost millions of euro, as mentioned in the requirements
specified in the Terms of References. Unfortunately, Romania doesn’t have
IT specialists working for the National Agency for Regulating and Monitoring
the Public Procurements, nor in the Court of Accounts in order to properly
assess whether these are the real costs or artificial costs that allows the
beneficiaries to finally benefit from the transaction by being paid-back a
share. Moreover, most of these IT applications are never really used or get
old in maximum 2 years.
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•
There is a certain automatism in drafting proposals under structural funds,
the only concern being to submit it as soon as possible, regardless the
quality of the proposed activities. This mostly applies to HR SOP where first
one who came was also first served which facilitated the development of a
whole network of consultancy companies specialized in delivering standard
projects following the minimum requirements but submitted immediately
under ActionWeb.
•
Many projects tend to hide the real expenses that are aimed to bring profit
to beneficiaries. Business Centers for example that are financed through
ROP are in fact office buildings that are rented for the only benefit of the
project beneficiaries. Nobody checks these aspects.
•
Some structural funds priorities not only that do not properly meet the
development objectives but they finance investments that are against these
objectives. This is the case of the projects financed through ROP in the field
of social infrastructure where despite the national engagements of
deinstitutionalizing most of the persons from the system, thousands of
millions of euro still cover the rehabilitation or even the expanding of the old
establishments.
•
Then obligation of organizing events/launching events at the beginning of
the projects proved of being nothing else but an unnecessary spending.
Sometimes they only bring profit to the events’ organizers. These
beneficiaries should be asked to include all necessary information about the
activities of the projects in one single portal/webpage where to update all
data about accomplishment of project indicators.
•
Lack of coordination between Managing Authorities as well as the lack of
minimum information about concrete objectives of the projects’ beneficiaries
implies the risk of overlapping financing in the same county, for example. It
is likely that an NGO, a company or even the local public administration will
implement the same activity aiming to reach the same target group. All
interested targeted groups should have free access to information about the
project.
•
One category of information that IPP couldn’t access at the level of the
three Managing Authorities concerned the evaluators of the projects.
Claiming that potential pressures could be exercised upon evaluators or
that the evaluation process is outsourced and that the information is no
longer available, the Managing authorities denied IPP’s access to such
information. The Institute still argues that learning the evaluators names is
the only way of preventing conflict of interests therefore we further demand
that these names should be made public along with other key information
about the projects and published in the same unique website that will be
administered by one public entity in charge with the management of
structural funds in Romania.
•
The huge budgets currently administered by the nongovernmental
organizations could generate situations of mismanagement or event
financial failure. The pre-accession funds experience showed that NGOs
were in general managing thousands of euros while today they are in the
position of managing millions of euro (eg. Association Sanse Egale pentru
Fiecare, an organization which in 2009 has revenues of 17.265 lei/aprox.
4.000 euro is currently implementing a HR SOP project of over 18 million
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lei, Colfasa Association - project of over 14 million lei and the Association of
Women and Families from Rural Areas currently managing a project of over
15 million lei). It will be interesting to follow their results after implementing
the projects, especially those accessing strategic grants.
•
One the other side, there is a trend of confiscating the civil society which
has the tendency of becoming bureaucratic, working only in partnership or
even subordination relation with the Managing authorities. An important role
in preventing such phenomenon should have been played by the
representation structures of the civil society which unfortunately made the
same mistake, defending the needs of the project beneficiaries rather than
the general needs of the sector.
•
A lot of projects are financing foreign partners - international private entities
even when these entities participation is not required by the Terms of
References. One possible explanation is the inclusion of exchange visits in
other countries for the Romanian beneficiaries.
•
Representatives of all political parties benefited from the structural funds.
For example, in what concerns ROP, The Democrat Liberal Party (PDL)
gained 271 projects of 5.758.515.882 lei (aprox. 1,37 bil. Euro), The Social
Democrat Party (PSD) gained 236 projects of 4.063.939.643 lei (over 67 bil
euro), The National Liberal Party (PNL) gained 83 projects of 1.128.764.326
lei (apro. 270 million euro), the Democratic Union of Hungarians (UDMR) 44 projects of 613.953.548 lei (aprox. 146 millions of euro) and the
Conservative Party (PC) - 1 project of 5.254.257 lei (aprox. 1,25 millions
euro). In what concerns ACD SOP, here are the figures: PSD gained 69
projects of 35.761.753,13 lei (8.514.703 euro), PNL gained 40 projects of
19.925.929,16 lei (4.744.269 euro), PDL - 37 projects of 17.993.760,12 lei
(4.284.228 euro), UDMR - 15 projects, 8.033.401,13 lei which means
1.912.715 euro and PC - 4 projects of 2.407.991, 12 lei (573.331 euro). The
exchange rate is of 4,2 lei/euro.
We publicly demand to both Managing Authorities and the Government to explain
how much from the stated objectives have been reached so far in order to avoid
similar mistakes during the future financial cycle that is considered of no priority at
this point. The consultation with the civil society in the light of future financial
support for Romania should not only serve the formal obligation of conducting such
procedure, but will really have to take into account the third sector’ feedback. At
the same time, the opposition parties should involve more in monitoring the
structural funds spending and implicitly in the institutional reform that is supported
by European money, as they have to avoid similar mistakes related to the current
financial cycle, in case they will assume the governing of the country.
For any further questions, please contact Elena Iorga, Programs Director - Institute
for Public Policy, Bucharest, ROMANI at + 4 021 212 3126, e-mail: elena@ipp.ro.
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