Performance framework review and reserve 2014-2020 Jan Marek Ziółkowski Evaluation and European Semester Unit DG for Regional and Urban Policy 5-6 December 2013, Brussels RegionalPolicy

Results Orientation vs. Performance Framework Interlinked but distinct: Results orientation is wider and locates the programme in its context Performance Framework is about efficient implementation of the programme and it will not answer the impact question

Challenges for Performance Frameworks Keeping it as simple as possible (minimise number of indicators) Coverage of the Priority Axis Setting realistic milestones and targets Consistency within a MS for similar priorities (should be described in Partnership Agreement) Regional Policy 3

Building blocks Indicators (priority level) Milestones (intermediate targets) – to be achieved end of 2018 – formally reviewed in 2019 – reserve excluded Targets – to be achieved end of 2023 – formally reviewed in 2025 – reserve included Financial Must be included Total amount of eligible expenditure entered into the accounting system of the certifying authority and certified (except for EAFRD) Output Chosen from among indicators already selected for the programme Limited number (majority of resources allocated)

Building blocks Indicators (priority level) Milestones (intermediate targets) Targets Result To be used where appropriate Different approach fund by fund (ERDF, CF, EMFF – not recommended, EARDF – excluded, ESF – immediate only) Key implementation steps To be used when necessary (no or insignificant outputs) Should not be used as outputs must be delivered by then

Information to be recorded… …should allow for verification if the criteria are met and include, but not limit itself to: Criteria as set out in Annex II of the CPR Information realistic and achievable data or evidence used to estimate the value of milestones and targets and the calculation method transparent, with objectively verifiable targets and the source data identified and, where possible, publicly available verifiable, without imposing a disproportionate administrative burden

Information to be recorded… Criteria as set out in Annex II of the CPR Information capturing essential information on the progress of a priority rationale for selection of output indicators, as well the method applied to calculate the share, which must exceed 50% of the financial allocation consistent across programmes, where appropriate information on how the methodology and mechanisms to ensure consistency were applied in line with the Partnership Agreement Relevant and consistent with the nature and character of the specific objective of the priority  intervention logic

Complex priorities For priorities which concern more than one ESI Fund or more than one category of region, indicators, their milestones and targets, and actual values have to be broken down by Fund or category of region. The representativeness of output indicators and achievement of milestones and targets are assessed independently for each Fund and each category of region within such a priority. The reserve is allocated and suspension of payments and financial corrections may be applied independently for each Fund and each category of region within such a priority.

Agreeing the Performance Framework Partnership Agreement the methodology and mechanisms to ensure consistency in the functioning of the performance framework across programmes and ESI Funds (and information on the allocation related to the performance reserve) Operational Programmes a table including information on the priority axis concerned, the indicator and its measurement unit, its milestone and target values (broken down by ESI Fund and category of region where relevant) Basis for selection of indicators and setting milestones and targets Brief information to be provided in the OP; full information available at request

Examination by the European Commission: based on the information on the selection of indicators and setting of milestones and targets, recorded by the managing authorities; carried out by the desk officers and units negotiating the programmes; to verify if appropriate indicators have been selected and check if both the milestones and targets meet their criteria. Insufficient evidence that the milestones and targets meet the criteria - the Commission will ask for additional explanations and may ask for more indicators to be selected and milestones and targets to be adjusted.

Performance review examines the performance of the programmes at the level of priorities against the milestones set for the end of 2018 carried out in 2019, based on the data input by the managing authorities into the SFC2014 system (no scope for negotiations) within two months from the receipt of the annual implementation report for 2018 (end of June 2019), the Commission adopts a decision, by means of implementing act, to determine for each Member State and ESI Fund, the programmes and priorities which have attained their milestones (by ESI Fund and by category of region for complex priorities).

Allocation of performance reserve Reserve = 6% of the resources allocated to the ESI Funds, with the exception of the ETC goal, the Youth Employment Initiative (and some other categories) and between 5 and 7% of the allocation to each priority with the exception of TA and SMEs initiative. Allocated definitively to successful priorities after the review. The reserve linked to priorities that failed to achieve the milestones to be re-allocated to successful priorities, based on the MS request to amend programmes. The EC has two months to approve the amendment request and may make observations only in limited cases.

No performance framework or no reserve? Category of resources Performance framework Performance reserve European Territorial Cooperation goal Yes No Youth Employment Initiative and matching ESF funding Technical assistance No* SMEs initiative

What is the serious failure? A priority, whose performance framework includes will be deemed to have… if... no more than 2 indicators seriously failed to achieve the milestone or the target any of these indicators has failed to attain by the end of 2018 at least 65% of milestone value or by the end of 2023 at least 65% of the target value more than 2 indicators at least two of these indicators has failed to attain by the end of 2018 at least 65% of milestone value or by the end of 2023 at least 65% of the target value If a priority concerns more than one ESI Fund or more than one category of region, the assessment has to be carried out by Fund and by category of region within that priority.

Suspension of payments The EC may suspend all or part of an interim payment of a priority of a programme if the following conditions are jointly met: a serious failure to achieve the milestones (only financial and output indicators, and key implementation steps) due to clearly identified implementation weakness. The EC has communicated previously to the managing authority this clearly identified implementation weaknesses and the MS has failed to take the necessary corrective action to address it.

Financial corrections At the end of programming period, the EC may apply financial corrections if the following conditions are jointly met: a serious failure to achieve the targets (only financial and output indicators, and key implementation steps) due to clearly identified implementation weakness. the EC has communicated previously to the managing authority this clearly identified implementation weaknesses and the MS has failed to take the necessary corrective action to address it. no socio-economic or environmental factors, significant changes in the economic or environmental conditions in a Member State or force majeure seriously affecting implementation of the priorities concerned

Level of financial corrections based on flat rates Level of the achievement/absorption coefficient to indicate appropriate flat rate. The coefficient equals an average of the final achievement rate for all output indicators selected for the performance framework under a given priority divided by the final achievement rate of the financial indicator (all achievement in excess of 100% counted as 100%). The external factors contributing to the failure, will be considered on case by case basis, and may be a justification for a lower rate of correction than set out above. In such situations the rate of correction may be lowered by up to 50%, depending on the importance of contribution of these factors.

Flat rates for financial corrections achievement/absorption coefficient Rate of financial correction Not less than 65% Below 65% but no less than 60% 5% Below 60% but no less than 50% 10% Below 50% 25% The flat rate financial correction will be applied to all expenditure charged to the ESI Fund under the priorities concerned, after deduction of the amounts refused further to any prior financial correction.

In the pipeline: Updated Guidance on Performance Framework (to be translated - FR and DE – and made available on InfoRegio) Implementing Act covering 4 areas: Information to be recorded on the establishment of milestones and targets; Requirements for different types of indicators; Ensuring that milestones and targets are realistic and achievable; Verification of the attainment of milestones and targets. Delegated Act on setting the level of financial corrections

Reference documents - Guidance Monitoring and Evaluation for ERDF/CF Performance Framework & Reserve – under preparation Ex ante evaluation (ERDF, ESF, CF) http://ec.europa.eu/regional_policy/information/evaluations/guidance_en.cfm#1 RegionalPolicy