Preparing IPA II Sector Planning Documents - Serbia

Project funded byThe European Union

Government of the Republic of SerbiaEuropean Integration Office

PREPARING IPA II SECTOR PLANNING DOCUMENTS

(SPDs)

Ruggero TabossiGeorge Chabrzyk

All presentations are available on the PPF5 website: www.ppf5.rs


Government of the Republic of Serbia

European Integration Office

Training Objectives To explain: The IPA II legal basis and regulatory framework The hierarchy of EC and Serbian strategic planning documents for programming IPA II assistance The ‘Sector Approach’ in the context of EU enlargement and IPA II EC criteria for assessing sector maturity and readiness for adopting a Sector Approach How sector assessments are undertaken in Serbia Types of IPA II Programmes /Actions IPA II and Sector Budget Support Standard templates for Sector Planning Documents (SPDs)/ Action Documents (ADs) SPD Intervention Logic SPD Sequencing and Budgeting SPD Indicators and Targets



IPA II REGULATORY FRAMEWORK




Legal Framework EU Enlargement Package (Enlargement Strategy +

Progress Report) EU Financial

Regulation (+RAP)IPA II

Regulation (+RAP)

Common Implementing

RulesIPA II Common Strategic Framework

Country /Multi-Country Strategy Papers

Framework Agreements

IPA II Programmes (Country /Multi-Country /CBC)




Hierarchy of Strategic Documents

IPA II Regulation / Rules of Application

Enlargement Package (EU Enlargement Strategy, EC Progress Report /SAA/ European Partnership)

Country /Multi-Country Strategy Paper

National Sector Programme or (IPA-specific) Sector Planning Document -SPD)

Action Documents (ADs)

(Draft) Action Programme (AP)

Financing Proposal

Commission Implementing Decision

Financing Agreement

Annexed: SPDs

Annexed: ADs

Annexed: AP




Programme Types




Programming Terms used in IPA II Action Programme: A group of Actions which address CSP

targets and which are the subject of a Commission Implementing Decision

Action: A coherent set of coordinated activities carried out to meet a defined objective, which have an estimated total cost plus implementation schedule and performance parameters.

Activity: A component of an Action which can be clearly identified by its costs and type of financing (procurement, grant etc.)

Measure: A set of operations contributing to one or more common objectives

Operations: Projects and /or contracts




There might also be cases where an individual Action Programme is made up of one single Action, particularly where an Action (and therefore the entire Action Programme) focuses on a defined sector (e.g. through Budget Support).

There might also be cases where an individual Action Programme is made up of one single Action, particularly

where an Action (and therefore the entire Action Programme) focuses on a defined sector (e.g. through

Budget Support).



Proposed Sector Planning Document (SPD) Template




Sector Planning Document SPD Template PurposeSection 1: Sector Description

To systematically address the EC criteria for Sector Approach and show that the sector in question is sufficiently mature to adopt a Sector Approach. Also the steps being undertaken to increase sector maturity.

Section 2: Sector Programme Rationale

To provide justification for the proposed programme to explain the focus of IPA assistance within the whole scope of the sector An overall picture of the problems to be solved with the support of IPA funded sector support.

Section 3: Sector Programme Description

To describe in detail the proposed programme covering: overall /specific objectives; impact indicators; results; measures & operations; institutional arrangements for implementation.

Section 4: Budget

To provide an indicative 3-year sector budget based on all sources

Section 5: AnnexesLog FrameInstitutional ArrangementsImplementation Schedule

To provide inputs for the associated Action Documents




Sector Planning Document1. Sector Description1.1 National Sector Policy & Strategy1.2 Sector Institutional Framework, Coordination, Capacity1.3 Performance Assessment Framework2. Sector Programme Rationale2.1 Sector Status and Problem Analysis 2.2 SWOT Analysis2.3 Links with National Documents, Sector Strategies and

Country Strategy Paper 2.4 Cross-Cutting Issues 2.5 Links with other sectors 3. Sector Programme Description3.1 Overall & Specific Objectives 3.2 Impact Indicators3.3 Results3.4 Measures & Operations3.5 Past and on-going experience, lessons learned3.6 Sustainability3.7 Assumptions & Pre-conditions3.8 Institutional Arrangements for Implementation 4. Budget4.1 Summary of Indicative Budget4.2 Budget breakdown per year

INTERVENTION LOGICSPD 2.1SPD 2.2SPD 3.1SPD 3.3.

SEQUENCING

SPD 3.3 SPD 3.4 SPD 4.1 SPD 4.2




AD Intervention Logic Intervention logic shows how planned results and

specific objectives will be achieved by sector action operations.

Overall Objective

Specific Objective

Result 1 Result 2 Result 3

Activities Activities Activities

Contracts Contracts Contracts




SPD: SequencingSector Planning

DocumentAction Document

Results

R1R2R3R4R5R6R7R8

Specific Objective 1

Specific Objective 2

Results2015R1R2

2016R3R4R5R6

2017R7R8



The Sector (Wide) Approach




What is the Sector Approach?The Sector Approach is a way of working together between: Government and Donors and other Key Stakeholders (NGOs, CSOs etc)It is a process aiming at broadening government and national ownership over public sector policy and resource allocation decisions within a sector by increasing the coherence between policy, spending and results, and reducing transaction costsIt involves a shift from stand-alone projects to programmes where donor assistance contributes to the development and implementation of a coherent, nationally owned programme across a whole sector (i.e. ‘Sector-Wide’)




Paris Declaration: Aid Effectiveness Paris Declaration (02/03/2005) principles are: 1) Ownership; 2) Alignment; 3) Harmonization; 4) Managing for results; 5) Mutual accountability

IndicatorsCountries put in place national development strategies with clear strategic priorities (OWNERSHIP).Donors align their aid with national priorities and provide the information needed for it to be included in national budgets (ALIGNMENT)Co-ordinated programmes aligned with national development strategies provide support for capacity development (ALINGNMENT)As their first option, donors use fiduciary systems that already exist in recipient countries (ALINGNMENT).As their first option, donors use procurement systems that already exist in recipient countries (ALINGNMENT). Aid is released according to agreed schedules (ALINGNMENT).




What is a Sector? There is no single definition of the policy area

that can be considered a sector, nor is there an exhaustive list of possible sectors.

A sector is a defined policy area under the responsibility of a line minister (following DG ELARG guidelines).




Criteria for Sector Definition1. Sector should be have relevance for EU accession

and/or national socio-economic development. 2. Sector should be wide enough to be significant for

national accession /development objectives, but narrow enough for institutional coherence

3. Sector should have a clearly established institutional framework, institutional leadership & responsibilities, ideally there should be one lead institution;

4. Sector should have a clear linkage to the national budgetary process




Indicative Sectors Policy Areas Sectors Defined for Country

Strategy Papers1

Transition Process & Capacity Building

1. Democracy and Governance2. Rule of Law and Fundamental

Rights

Regional Development 3. Environment4. Transport5. Energy6. Competitiveness and Innovation

Employment, Social Policies & Human Resource Development

7. Education, Employment and Social Policies

Agriculture & Rural Development

8. Agriculture & Rural Development

1Taken from ‘A Quick Guide to IPA Programming’. DG ELARG December 2013.




Rule of Law Chapter 23: Judicial and

Fundamental RightsChapter 24: Justice, Freedom and

Security1. Judiciary 1. Migration Impartiality 2. Asylum Independence 3. Visa Policy Accountability 4. External Borders & Schengen Professionalism, Competence, Efficiency

5. Judicial Cooperation in Civil, Commercial & Criminal Matters

2. Anti-Corruption Alignment of legislative framework with EU

6. Police Cooperation & the Fight against Organised Crime

Effective implementation 7. Fight against Terrorism Prevention awareness raising 8. Cooperation in the Field of Drugs3. Fundamental Rights 9. Customs Cooperation Minority rights and cultural rights Protection of personal data

10. Counterfeiting the Euro



Implementing Actions: PRAG Contracts and/or

Budget Support




Types of Contract and Associated Documents

IPA ActionDocument

SERVICES

SUPPLIES

WORKS

Terms of Reference

Technical Specifications

Bills of Quantity

GRANTS Guidelines for Applicants

Procurement




Contracting & Disbursement DeadlinesDeadline for concluding the Financing Agreement

The final date for the signature of the Financing Agreement is X+1 (where X=year in which budgetary commitment was made). Conclusion of FA=year N

Contracting deadline The end date for the signature of contracts (including grant contracts) is 3 years from the date of conclusion of the Financing Agreement i.e. N+3

Deadline for the execution of contracts

The end date by which contracts (including grant contracts) must be finished is 3 years from the contract signature. The contracting deadline for the FA=N+3+3

Disbursement deadline The end date for making payments to contractors is 1 year after the deadline for executing contracts i.e. N+3+3+1

Final date for the implementation of the Financing Agreement

The end date for closure of the Financing Agreement is 8 years. After this date no financial transactions can be made legally under the Financial Agreement concerned




What is Budget Support (BS)?BS is a method of delivering financial assistance which normally has 4 steps: (Sector) Policy Dialogue Financial Transfers (in ‘tranches’) to National

Treasury Account Performance Assessment Capacity DevelopmentBS is delivered by means of ‘Sector Reform Contracts’.




Political and Economic Focus of IPA-BSCompliance with the political criteria should be

the primary focus of IPA2 BS. In particular, assistance should support preparations for acquis chapters 23 and 24 (The ‘Rule of Law’)

For the economic criteria, the main focus of IPA2 BS should be on supporting the establishment of a functioning market economy (Copenhagen Criteria: i.e. ‘The ability to withstand the pressures of the internal market’)




Assessment of EligibilityAssessment takes place at 2 stages in the programme cycle.

During programme preparation: assessment of relevance (are key constraints /weaknesses addressed?) and credibility (realism, institutional capacity, track record, political commitment)

During programme implementation: assessment of progress made in policy implementation (benchmarked against reform commitments)




Risk Management FrameworkRisk management is an internal assessment of risk levels based on the analysis of replies to questionnaires in 5 categories, namely:1. Political2. Macroeconomic3. Developmental4. Public Financial Management5. Corruption /FraudThere are 4 risk levels: Low Moderate Substantial HighBeneficiaries are expected to define their risk response by means of ‘Mitigation Measures’ (these are monitored)




Whether to Provide BS?The EC decision on providing BS is based on 3 assessments:1. Assessment of political commitment to a

reform agenda (in line with EU accession)2. Assessment of eligibility 3. Assessment of risks and mitigation

measures




Variable Tranches: Performance Reserves‘A Performance Monitoring System and related disbursement criteria is at the heart of any budget support operation’ (EC)BS disbursements are of 2 sorts:Base (or fixed) tranches: these are linked to eligibility

criteriaVariable tranches: these are intended to create an

incentive for improved performance and are based on performance indicators.

The EC limit (cap) the use of variable tranches to avoid unpredictability /volatility of disbursements. Typically, Sector Reform Contracts cover commitments for 3 years with an upper limit of 40% variable tranches




Variable Tranche (Performance) Indicators The following principles should be applied:1. Targets and indicators should be Coherent with

sector problem analysis and programme objectives2. Whilst combined indicators may be used, the

emphasis should be on Results3. Number of indicators should be limited to a

maximum of 8 per Tranche (to avoid loss of policy focus)

4. Indicators, targets and assessment methodology should be defined during programme preparation



Sector Assessment




EC Assessment Criteria for Sector ApproachKey Criteria 1. National sector policies/ strategies2. Institutional setting, leadership & capacity3. Sector & donor coordination4. Mid-term budgetary perspective5. Monitoring & performance assessment Sector Reform Contracts 6. Public finance management7. Macro-economic framework




National Sector Policy/ Strategy There are 3 groups of criteria for assessing the quality of national sector policies /strategies:

1. Nature of policy process & ownership2. Quality of policy objectives3. Implementation arrangements




National Sector Strategic Frameworks : Example

Adopted 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2013 2024 2025

National Programme for Environmental Protection 2010

National Waste Management Strategy 2010

Environmental Approximation Strategy 2011

Biodiversity Strategy 2011

National Strategy for Sustainable Use of Natural Resources and Goods

2012

Strategy for the Implementation of the Aarhus Convention

2011

National Cleaner Production Strategy 2009

Initial National Communication under the United Nations Framework Convention on Climate Change 2010

Strategy for Serbia's Inclusion in Kyoto Protocol's CDM for Waste Management, Agriculture & Forestry Segments 2010




Sector Policy /Strategy: Key Questions

Is the sector policy authored by domestic actors?Is there enough political support & stakeholder involvement to ensure ownership & future sustainability?Are policy objectives coherent with national development objectives?Are the objectives sufficiently SMART?Is there an ‘Action Plan’ showing the timing & sequencing of planned operations & showing institutional responsibilities for these?




Institutional Setting There should be a Lead Ministry which: Plays a leading role on donor coordination within the sector & works closely with the NIPACIs responsible for coordinating the planning /drafting of Sector Support Programmes Coordinates with other relevant stakeholdersCoordinates the implementation of IPA funded sector support.Coordinates the collection and analysis of monitoring data (indicators) for IPA sector support.




Institutional Mapping: e.g. Justice Sector Lead Ministry Ministry of Justice (MoJ)Body Responsible for Priority

P1: MoJ P2: Office of Human and Minority Rights (OHMR)

Body Responsible for Measure

M1.1, M1.2, M1.3: MoJ M2.1, M2.2: OHMR

Potential end beneficiaries

High Judicial Council State Prosecutorial

Council Supreme Court of

Cassation The Public

Prosecutor’s Office The Prosecutor’s

Office for Organised Crime

Judicial Academy The Anti-Corruption

Agency

Ombudsman’s Office Office of the

Commissioner for Equality

Directorate for Gender Equality (in Ministry of Labour and Social Policy)

Commissariat for Refugees and Migration


Government of the Republic of SerbiaEuropean Integration OfficeFunctional

Analysis

Policy Making

Resource Planning

Resource

Allocation

Policy

Implementation

Monitoring

Coordination

Institution 1 Institution 2 Institution 3 Institution N




Operating Structure IPA Monitoring Committee

Sector Monitoring Committee

Sector Working Group

SECTOR OPERATING STRUCTURE

Sector Lead Institution

Body Responsible for Measure 1

Body Responsible for Measure 2

Body Responsible for Measure N

Contracting Authority

End Beneficiaries

Contractors /Service Providers

NIPAC/ NIPAC-TS

EC-HQ /EUD

National Authorising Officer /National Fund

Audit Authority




Institutional Capacity The Lead Ministry and other institutions within the Operating Structure must have the capacity to absorb existing and planned IPA financial support Recent workload analyses of the Serbian administration (carried out in support of DIS /DMS accreditation) have show that, at present staffing levels, certain Lead Ministries will experience difficulties in absorbing IPA funds over the 2014-16 period.




Absorption Capacity (I): Ministry of Justice 1. Inherited Workload

IPA 2012 (2 service+1 supply+1 works+1 direct grant) IPA 2013 (3 service+1 supply+ 3 twinnings+1 works)

2. The Procurement Plan

Year of Contracting 2013 2014 2015 TotalNumber of Contracts 1 9 3 13

Year 2013 2014 2015 2016 2017 2018

Total(M€)

IPA 2012-13Disbursement:

Contracting

1.60 7.12 9.72 7.43 4.42 30.29IPA 2014-16

Disbursement:Contracting

30.80 M€ (for 3 yr SPD)




Absorption Capacity (II): Ministry of Justice

4. Existing and Planned Staffing Levels are as follows: Available staff (incl. Heads of Division)=6; Systematised staff (i.e. Planned)=9

5. Conclusion. Unless missing staff are recruited, the MoJ will not be able to implement IPA 2012-13 according to the Procurement Plan. The peak demand will be in 2014-15 which coincides with additional demands for contracting IPA2 Sector Programmes. The capacity of the MoJ to absorb IPA II funding will be low.

Year 2013 2014 2015 2016 2017 2018WLA staff needed for IPA 2012-13

4 7 7 5 4 3

3. Workload Analysis (WLA) for staffing needs to implement IPA 2012-13 shows the following minimum staffing levels needed to meet the Procurement Plan, these are as follows:




Institutional Setting & Capacity: Key Questions

Has the sector been defined with institutional coherence in mind?Is there a lead Ministry in the Sector?Are there inter-institutional agreements showing responsibilities for achieving sector targets?Have workload analyses of the institutions in the Implementing Structure been carried out?Is capacity building envisaged?How & when will a needs assessment be carried out?




Sector Coordination Covers 2 components: (1) Coordination of government institutions & key non-government stakeholders; (2) Coordination of donors. Lead Ministry /Institution responsible for establishing & coordinating an ‘Operating Structure’ composed of the main government institutions involved in sector policy /strategy making and implementation. Functional, government-led Sector Working Groups.Government manages database(s) of external assistance per sector.Government publishes regular monitoring/ progress reports for each sector.




Sector Budget There needs to be a clear link between sector policy & budgeting. Sector plans should be properly priced & prioritized within a realistic estimate of the resources available from the national budget & external donors.IPA II Sector Support Programmes are planned to be multi-annual & should be co-financed by predictable, multi-annual national funding. It is necessary to provide a brief description of the sector budget on an annual, & if possible, on a medium-term perspective (3-5 years). Ideally there should be a Medium Term Expenditure Framework (MTEF) for the sector.However, development of MTEFs will be gradual, at first assessments should focus on the existence of credible annual sector budgets. At minimum, it is crucial to verify whether the sector budget can be identified in the state budget.




Monitoring Performance Stand-alone project-based assistance emphasises the monitoring

of resource usage (inputs) & immediate deliverables (outputs) and relatively little on achieving objectives.

By contrast the sector approach will introduce much stronger results orientation to monitoring assistance & will focus national monitoring systems on measuring the achievement of policy objectives. There should be agreement on a Performance Assessment Framework (PAF).

Indicator Level

Function of Indicators Examples (judicial reform)

Impacts Measure the wider benefits beyond direct beneficiaries

% decrease in the backlog of civil cases% increase in satisfaction rates

Results Measure the benefits produced for direct beneficiaries

% reduction in number of appeals lodged due to inconsistent court rulings % increase in number of court rulings enforced




Public Finance Management (PFM): Key Questions Is there a PFM reform programme in place? What are the PFM mechanisms in place for the sector?Based on information available what are the possible

areas where support could be considered? How do the remaining weaknesses affect the sector

policy & what recommendations can be made to improve the situation?




Macro-Economic Framework

The purpose of the macro-economic assessment is to

assess the stability of the macroeconomic situation & consequent potential for future public funding

It is not expected that a separate macroeconomic analysis be carried out, but that a judgement on stability-oriented macroeconomic policies be made on the basis of existing documentation.




Overall Assessment

The purpose of assessments is to establish sector-level policy dialogues with beneficiary country authorities. Negative assessments of the key criteria do not necessarily prevent the adoption of a sector approach.

Few beneficiary countries will have functioning MTEFs & PAFs in place in 2014 but this is not a barrier to the introduction of sector approaches.

Sector assessment provides a basis for targeting necessary TA & capacity building activities.

However, 3 criteria are considered essential & must be in place before adopting a sector approach:

1) The existence of a national sector policy /strategy & a sector budget or a government commitment to develop these.

2) A lead institution/ ministry responsible for the sector/subsector3) The existence of a functional sector coordination framework or a

government commitment to develop one.




Overall Assessment: Key Questions

Are the priority sectors for IPA II assessed as being satisfactory on the 3 key criteria for a sector approach?

Can the problems revealed by negative assessments be addressed with domestic /IPA /other donor resources as part of programme preparation for 2014?

Can the problems revealed by negative assessments be mitigated by the time of the mid-term review?



Thank you for your attention

All presentations are available on the PPF5 website: www.ppf5.rs

Preparing IPA II Sector Planning Documents - Serbia

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