1 THE MINISTRY OF FINANCE OF MONTENEGRO INFORMATION ...

THE MINISTRY OF FINANCE OF MONTENEGRO
INFORMATION ON THE SECOND PHASE OF ESTABLISHMENT OF THE DECENTRALISED
IMPLEMENTATION SYSTEM FOR THE MANAGEMENT OF EU FUNDS IN MONTENEGRO I. INTRODUCTION Introduction of Decentralised Implementation System (DIS) for the
management of European Union funds represents the challenge to the
Montenegrin administration in the upcoming period, taking into
consideration the requirements of the process, as well as the mechanisms
that shall be established. The process itself aims at conferral of
management powers for pre-accession funds from the European Commission (EC)
on Montenegro. There are two phases of Conferral of Management of EU funds: 1. DIS phase, with ex-ante controls - in which the Contracting Authority
submits to the EC for its prior endorsement all the results of tender
procedures and contracts to be signed; and
2. EDIS phase, with ex-post controls - in which decisions on the results
of tender procedures and contracts to be signed are taken by the
Contracting Authority, without prior endorsement by the EC.
Management of funds entails: programming, tendering, contracting, payments
to final beneficiaries and contractors, monitoring and evaluation.
Currently, these activities have been conducted by the Delegation of the
European Commission in Montenegro under centralised system of management of
EU funds. Introduction of DIS is not directly connected to the achievement of
candidate country status by the country tending to become an EU member
state. However, these two processes are running in parallel and have
separate demands. Introduction of DIS is a clear sign that a state has
built the capacities for management of funds available through the
Instrument for Pre-Accession Assistance (IPA), which implies the increased
credibility to the EC. Having in mind that Montenegro has a status of potential candidate country
towards the membership in the EU, Montenegro can currently benefit from
first two IPA components: 1. Transition Assistance and Institution Building
and 2. Cross-Border Cooperation. These components target development of
institutions and capacity building of crucial actors in pre-accession
period, legal harmonisation, and development of good neighbouring relations
with the countries from the region, adoption of European standards and
reforms in the area of political requirements, socio-economic criteria and
obligations emerging from the future EU membership. According to MIPD, for
the period 2008-2010 Montenegro has received assistance in total amount of
99,9 million E by virtue of IPA instrument. Allocation of funds split per
year is shown in the table bellow: |Component |[2007] |2008 |2009 |2010 |2008-2010 |
|I. Transition |[27.5] |28.1 |28.6 |29.2 |85.9 |
|Assistance and | | | | | |
|Institution | | | | | |
|Building | | | | | |
|II. Cross-Border |[3.9] |4.5 |4.7 |4.8 |14.0 |
|Cooperation | | | | | |
|Total |[31.4] |32.6 |33.3 |34.0 |99.9 |
Table No 1: Multi-annual Indicative Planning Document - Montenegro (mill
E)
Once having been awarded a candidate country status, Montenegro will get
access to the EU funds from IPA Component 3 - Regional Development,
Component 4 - Human Resources Development, Component 5 - Rural Development.
These funds provide support in area of transport, environmental
protection, regional development, human resources development, and rural
development. By managing these funds through DIS, the public administration
shall develop its capacities for future management and implementation of
Structural and Cohesion funds that will become available to Montenegro as
an EU member state. The sole process of obtaining the status of a candidate country does not
automatically entail the use of funds from Components 3, 4, and 5 but
requires prior award by the EC of the DIS accreditation for the components
concerned. Allocated funds for Components 3, 4, and 5 will become
accessible to Montenegro after accreditation of the DIS system[1]. It has
to be noted that the request for accreditation should be submitted for each
component or programme separately. Opening of these new components does not imply (automatic) opening of
additional EU funds, but (could mean) partial reallocation of IPA funds
from the first two components to the last three. At the moment, Montenegro
has on its disposal an annual allocation of app 30 mill E being allocated
to Montenegro through Multi-annual Indicative Planning Document that is
annually a subject of revision. It should be noted that the main condition
for the use of funds is a preparation of projects that fulfil requirements
of relevant standards, built-up administrative capacity of national
institutions, political support to the whole process, as well as necessary
co-financing ensured by the Montenegrin institutions as final beneficiaries
of IPA projects.
II. REVISED ACTION PLAN FOR INTRODUCTION OF DIS In February 2008, the Government of Montenegro adopted the Information on
Establishing the Decentralised Implementation System (DIS) accompanied with
the Indicative Time-lines. The Information contained the description of
responsibilities and competences of the structures, responsible authorities
and their functions which shall be set up, as well as short description of
the process for accreditation of structures[2] concerned. Following the consultations and suggestions by the European Commission, as
well as technical support provided by CARDS project "First steps toward the
establishment of DIS in Montenegro", the Indicative Time-lines in object
have been revised into the Action Plan (Annex I). The Action Plan contains
more detailed elaboration of individual steps in the process of preparation
for the accreditation and extended deadlines due to the complexity of the
activities that should be implemented.
III. INSTITUTIONAL FRAMEWORK FOR DIS INTRODUCTION AND IMPLEMENTATION OF
DIS 1. Structures and Authorities
(Introduction of provisions to enable the National Authorising Officer
- NAO and the Programme Authorising Officer - PAO to exercise the
duties associated with their responsibilities)
Legal basis for the establishment of DIS is given by the Law on
ratification of the "Framework Agreement between the Government of
Montenegro and the European Commission on the rules for the cooperation
regarding the financial assistance of EC to Montenegro under the
implementation of the Instrument of Pre-accession Assistance" (Official
Gazette of Montenegro, No 01/08). In the above-mentioned Framework
Agreement, the structures with key functions and responsibilities and
applicable rules are laid down, which establishment is mandatory for
introduction of DIS. In accordance with the Framework Agreement, as well as the IPA Implementing
Regulation of the European Commission No. 718/2007 (in continuation: IPA
IR), for establishment of DIS the following main authorities shall be
appointed and the structures established:
1. National IPA Coordinator - NIPAC[3];
2. Competent Accrediting Officer - CAO [4] ;
3. National Authorising Officer - NAO[5];
4. National Fund - NF;
5. Operating Structure - OS [6] ;
6. Audit Authority - AA;
7. Strategic Co-ordinator for the Regional Development Component and the
Human Resources Development Component (IPA Component III and IV). Completed Appointments . Referring to the Information of February 2008, the Government of
Montenegro in March 2008 by its Decision No: 03-2504/3 appointed Prof.
Dr. Gordana Djurovi?, Deputy Prime Minister for European Integration
as the National IPA Coordinator (NIPAC);
. By the Decision No: 03-2504/4 Dr. Igor Luk?i?, Minister of Finance,
has been appointed as the Competent Accrediting Officer (CAO);
. By the Decision of the Ministry of Finance No: 01-2193/1 Mr Du?an
Perovi?, Assistant to the Minister of State Treasury Sector has been
appointed as the National Authorising Officer (NAO);
. By the Decision of the Ministry of Finance No: 01-2194/1 Ms Nata?a
Kova?evi?, Coordinator of the Central Finance and Contracting Unit
(CFCU) has been appointed as the Programme Authorising Officer (PAO);
. Likewise, the Government has obliged all the ministries to appoint
Senior Programme Officers (SPOs) and to establish SPO offices, which
provide technical support to the PAO in the implementation of the
projects under DIS.
The above-listed appointments represent the starting point in setting up
the structures and fulfilment of requirements stated in the EC legal
documents.
It should be pointed out that in the system of centralised implementation
of the EU pre-accession funds that is currently in place in Montenegro, the
NIPAC has the leading role in the public administration, while in the
decentralised system the leading roles have both, the NIPAC and NAO. In accordance to the general requirements of DIS, the NAO and the NIPAC
represent two main hierarchically balanced pillars having clear segregation
of duties and responsibilities in respect of processes, where the NAO is
responsible for the establishment and efficient functioning of financial