1. Regional governance in the context of globalisation: reviewing governance mechanisms & administrative costs The first systematic and evidence-based mapping of the administrative workload and costs of the implementation of ERDF and Cohesion Fund for Member State public authorities
A study for DG Regio CONTRACT NO 2008.CE.16.0.AD.056 / CCI NO 2008CE160AT090 – 092
COCOF meeting - 30 June 2010
Dr Kai Böhme, SWECO

2. Purpose: Review governance and administrative structures at the national and regional levels for ERDF and Cohesion Fund programmes during the period. The focus is on administrative costs.
Results: This study establishes for the first time systematic and evidence-based information on the administrative workload and costs of the implementation of ERDF and Cohesion Fund for Member State public authorities. The results cover the whole of the EU.
The study is not an evaluation and the information on administrative costs are not a comment on the efficiency or effectiveness of the administration. 2

3. Differences between Member States administrative bodies involved.
Country
Total eligible expenditure in EUR
ERDF & CF funding in EUR
No. of Operational Programmes
No. of bodies involved in programme management
No. of bodies involved in programme certification
No. of bodies involved in programme audit AT
 733 9 20 2 1 BE
 316 4 6 3 BG
 988 5 7 CY
 868 CZ
 152 14 24 DE
 001 18 90 23 DK
 240 EE
 771 16 ES
 519
200+ FI
 445 60 FR
 887 30 73 GR
 973 10
100 HU
 420 13 IR
 096 IT
 694 28 50 26 25 LT
 664 LU
85 107 216 LV
 364 15 MT
 354 NL
 000 PL
 404 74 17 PT
 699 46 RO
 612 34 SE
 558 8 SI
 031 SK
 288 UK
 121
Differences between Member States
administrative bodies involved.
total eligible budgets

4. Administrative workload over time
Administrative workload assuming similar workload cycles for all programme periods
Administrative workload over time
The programming period is rather front-loaded with 2009 being the most work intensive year (dark blue line).
There are time overlaps in the administration of different programming periods and 2015 are peak years if all programming periods are taken together.

5. Administrative workload over time
Administrative workload considering a one year delay of the closure of the period
Administrative workload over time
The programming period is rather front-loaded with 2009 being the most work intensive year (dark blue line).
There are time overlaps in the administration of different programming periods and 2015 are peak years if all programming periods are taken together.

6. Total administrative costs
EU Cohesion Policy –administrative workload (in person years per million EUR total eligible expenditure) EU Cohesion Policy – administrative costs (in EUR per million EUR total eligible expenditure)
Full programme cycle , from preparation of national framework documents to programme closure:
Administrative workload:
approx. 170,000 person years
Variation between countries mainly in the range of 0.3 to 0.8 person years per million EUR of total eligible expenditure
Administrative costs:
approx. EUR 12.5 billion
Variation between countries mainly in the range of EUR 23,000 to 56,000 per million EUR of total eligible expenditure
Administrative costs of beneficiaries and final beneficiaries are not included.

7. Administrative costs of national coordination
National policy level Administrative workload (in person years per Member State) Administrative costs (in EUR per Member State) Workload over time
Full programme cycle , incl. preparation of NSRF, NSR and national coordination activities:
Administrative workload: approx. 5,800 person years
Variation between countries mainly in the range of 10 to 300 person years per Member State
Administrative costs: approx. EUR 800 million
Variation between countries mainly in the range of EUR 850,000 to EUR 16.5 million per Member State
National co-ordination efforts vary considerably. The preparation of the NSRF and NSR represents only a minor part of the coordination in most Member States.
Annual workload as share of the total workload of this function.

8. Administrative costs of programme preparation
Programme preparation Administrative workload (in person years per programme) Administrative costs (in EUR per programme) Workload over time
Drafting of the programmes, ex-ante evaluation, designation of authorities and creation of management and control systems:
Administrative workload: approx. 3,500 person years
Variation between programmes mainly in the range of 3.5 to 14 person years per programme
Administrative costs: approx. EUR 370 million
Variation between programmes mainly in the range of 300,000 to 1 million EUR per programme
Preparation of the OPs and creation of the management and control systems are the main tasks.
Annual workload as share of the total workload of this function.

9. Administrative costs of programme management
Programme management Administrative workload (in person years per million EUR total eligible expenditure) Administrative costs (in EUR per million EUR total eligible expenditure) Workload over time
Full programme cycle , incl. all tasks related to the programme management:
Administrative workload: approx. 136,000 person years approx. 40% of which by Intermediate Bodies
Variation between programmes mainly in the range of to 0.8 person years per million EUR of total eligible expenditure
Administrative costs: approx. EUR 9.7 billion
Variation between programmes mainly in the range of EUR 17,000 to 48,000 per million EUR of total eligible expenditure
Project selection and verification of deliverables and compliance are the main tasks.
Annual workload as share of the total workload of this function.

10. Administrative costs of certification
Certification Administrative workload (in person years per million EUR total eligible expenditure) Administrative costs (in EUR per million EUR total eligible expenditure) Workload over time
Full programme cycle , incl. all certification tasks:
Administrative workload: approx. 10,600 person years
Variation between programmes mainly in the range of to 0.04 person years per million EUR total eligible expenditure
Administrative costs: approx. EUR 580 million
Variation between programmes mainly in the range of EUR 500 to 2,000 per million EUR of total eligible expenditure
The certification of statements of expenditure and expenditure declarations are the main tasks.
Annual workload as share of the total workload of this function.

11. Administrative costs of audit
Audit Administrative workload (in person years per million EUR total eligible expenditure) Administrative costs (in EUR per million EUR total eligible expenditure) Workload over time
Full programme cycle , incl. all audit tasks:
Administrative workload: approx. 14,100 person years
Variation between programmes mainly in the range of to 0.06 person years per million EUR of total eligible expenditure
Administrative costs: approx. EUR 1 billion
Variation between programmes mainly in the range of EUR 500 to 4,500 per million EUR of total eligible expenditure
The audit of samples is the main task, followed by the audit of the management and control system.
Annual workload as share of the total workload of this function.

12. Final recipients
The administrative costs vary considerably. One explanatory factor is the type of actions funded.
Some estimations based on information from 149 projects are:
Infrastructure investment projects: 1 – 2% of the eligible expenditure
Business development support: 3 – 13% of the eligible expenditure
Establishment of (social) platforms: 8 – 27% of the eligible expenditure
Studies and investigations: 2 – 18% of the eligible expenditure
The response rate from the beneficiaries is very low and many had difficulties to fully indicate their administrative costs. Therefore, these figures are only indications which have to be treated with great care.

13. Understanding the variations
There is considerable variation in administrative workload and costs.
Differences in the level of complexity are a key reason including:
budgetary volume of programmes and projects
thematic orientation
programme geography
The costs are also influenced by the different salary levels.
Differences in management and implementation systems play only a minor role. 13

14. Budgetary volume
The budgetary volume of the programmes and the funded actions influence the administrative workload and costs.
Programmes with small budgets tend to have a higher administrative workload and costs per million EUR of total eligible expenditure than larger ones.
Also the financial size of the funded actions influence a programme’s administrative costs.
Programme management – administrative costs by financial prog. volume * (in EUR per million EUR total eligible expenditure)
* This overview does not over European Territorial Cooperation Programmes.

15. Thematic orientation
Based on a classification of programmes (own classification based on programme titles).
The administrative workload per million EUR of total eligible EU expenditure rises with the complexity of the thematic orientations of the programmes.
Administrative workload for the programme management (in person years per million EUR total eligible expenditure)

16. Geographical coverage
Administrative workload and costs per million EUR of total eligible expenditure are lower for programmes with national rather than regional coverage.
Reasons for this include the generally larger budgetary volumes associated with national programmes and the stronger orientation to specific sectors.
Territorial Cooperation Programmes have very complex structures and often comparably small budgets. Viewed per million EUR of total eligible expenditure, they therefore have the highest administrative workload and costs.
Administrative workload Administrative costs (in person years per million EUR total eligible expenditure) (in EUR per million EUR total eligible expenditure)

17. Management and implementation systems
Variation in administrative workload is minor between different management and implementation systems.
Advantages and disadvantages of different systems balance each other out.
Administrative workload for programme management (in person years per million EUR total eligible expenditure)

18. Main conclusions
The administration of programmes requires approx. 3 to 4 % of the total eligible budget.
There are considerable variations regarding the administrative costs and workload. These are mainly due to programme geographies, the financial volume of the programmes and their funded actions, and the thematic orientation of the programmes.
The choice of the management and implementation system has only a limited effect on the administrative workload and costs.
The administration costs and workload of EU Cohesion Policy vary considerably over time.
The financial management and control systems are issues of concern and there are various proposals for improvements.
There is considerable uncertainty about the regulations in this field. This partially explains national ’gold plating’ and the statement that ”no changes to the regulations would be the best improvement”.

19. Issues for further investigation
Data improvements relating in particular to overheads, the involvement of Intermediate Bodies and staff costs.
The administrative costs associated with co-funding procedures in some Member States.
Extent of national ‘gold plating’ and reasons for this practice.
The administrative costs of regional policies not funded through EU Cohesion Policy.
Inertia and the costs of changes to the regulations.
Proposals for improvements and simplifications.

20. The project team
The study has been carried out by SWECO in collaboration with a European-wide team of experts:
ADT Consulting (FR), Archidata (IT), AUREX (SK), Berman Group (CZ), BGI Consulting (LT), ECORYS (NL), E-Cubed (MT), EPRC (IR, UK), EUROREG (PL), Infyde (ES), IPoP (SI), LG Consulting (RO), LKN (CY, GR), LogiPlan (HU), NetEffect (FI), ÖIR (AT), PhDB Consultant (BE), ProInfraConsult (BG), Spatial Foresight (LU), SWECO (DK, EE, SE), TAURUS-ECO (DE, PT), University of Latvia (LV).
Contact:
Dr Kai Böhme SWECO