Revision of Financial Regulation: Trust Funds Brussels, 16 November 2010
description
Transcript of Revision of Financial Regulation: Trust Funds Brussels, 16 November 2010
1
EuropeAidRevision of Revision of
Financial Regulation: Trust FundsFinancial Regulation: Trust Funds
Brussels, 16 November 2010Brussels, 16 November 2010
2
EuropeAidSUMMARY
1. RATIONALE OF THE PROPOSAL
2. INVOLVEMENT OF DONORS
3. MANAGEMENT OF THE TRUST FUND
3
EuropeAid
1RATIONALE OF THE PROPOSAL
4
EuropeAidRationale of the proposal
• 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.
5
EuropeAidRationale of the proposal
• Trust Fund will remain exceptional:
o Limited scope: emergency, post-emergency, thematic actions.
o Only where there is agreement between donorso 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
6
EuropeAidRationale of the proposal
• Why are Trust Funds placed in a special account outside the EU Budget?
o own purpose and nature of Trust Funds: accounts detached from the budget of the managing organisation
o Shared decision-making structure: Management Board
o 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
7
EuropeAid
2INVOLVEMENT OF DONORS
8
EuropeAidInvolvement of donors
• Establishment: involvement at two levels:
o Donors: agreement to establish a EU Trust Fundo 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 Boardo All Member States represented in Committee: approval of Financing Decisions (i.e.
additional EU Contribution, extension of duration)
9
EuropeAidInvolvement of donors
• 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 donorso Any extension is requested by Management Boardo After expiration of duration: Commission takes formal
decision
10
EuropeAid
3MANAGEMENT OF THE TRUST FUND
11
EuropeAidManagement of the Trust FundRegulatory framework
• Outside the EU Budget BUT Financial Regulation rules apply:
o Grantso Procuremento Financial Instruments
o Methods of implementation: direct or indirect
12
EuropeAidManagement of the Trust FundAccounts
• 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
13
EuropeAidManagement of the Trust FundAudit
• 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
14
EuropeAidManagement of the Trust FundReporting
• 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
15
EuropeAidManagement of the Trust FundManagement fee
• 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
16
EuropeAidFurther information• On EuropeAid:http://ec.europa.eu/europeaid/index_en.htm
• On the speakers:
Javier RAYA AGUADOHead of Contractual matters [email protected]
Dolores DOMINGUEZ PEREZContractual matters [email protected]
Unit G7: Financial and contractual matters, and legal affairs