1. MONITORING SYSTEM OF EU STRUCTURAL FUNDS: PHYSICAL INDICATORS International Conference for New Member States February 1-2, 2012, Vilnius (Lithuania) European Social Fund European Regional Development Fund Cohesion Fund The Ministry of Finance of the Republic of Lithuania

2. Aim and structure of the presentation Aim is to overview Lithuanian monitoring system of physical indicators, as background for the discussion on experience of other countries Structure: – Planning process of indicators – Data gathering process – Progress made and problems to be solved – Challenges for the future

3. Categories of physical indicators NSRF: context indicators OP: context, core, result and product indicators Evaluations: impacts

4. Planning Process of Indicators (I) Top-down Approach OPERATIONAL PROGRAMMES: OP indicators (priority level) OP COMPLEMENTS: OP and national indicators (measure level) APPLICATIONS AND CONTRACTS: OP, national and project indicators (project level) GUIDELINES FOR APPLICANTS: OP and national indicators (calls for proposals)

5. Planning Process of Indicators (II) 4 OP: HRD, EG, PC, TA. 16 OP priorities. 195 OP measures. Each OP priority is implemented through approximately 12 OP measures. Each OP priority has approximately 10 OP indicators (5 output and 5 result indicators). Each OP measure has approximately 1 OP indicator and 3 national indicators. Total number of OP indicators: 160 (86 output and 76 result indicators). Total number of national indicators: 537 (282 output and 255 result indicators).

6. Methodological Guidelines Basic principles for the planning, monitoring and calculation of indicators are laid down in the Guidelines adopted by the Managing Authority. In accordance with these guidelines the general descriptions for the calculation of all indicators have been prepared by the ministries and approved at the committee for OPs management. Concrete descriptions for the calculation and measurement of indicators of the specific measures are being approved in every guidelines for applicants for a particular OP measure.

7. Code of indicator Code of indicator at higher level Name of indicator Explanation of indicator Measurement of indicatorResponsible institution Unit of measurement Type of calculation Calculation formula Source of information Time Examples of the Descriptions of Indicators

8. Data Gathering OP’s OP complements IT system Contracts Payment claims Project reports after project completion Targets / baselines Achievements Studies / evaluations Reports

9. NoProgress in 2007-2013 1. More specific and informative indicators. National indicators are used (when OP indicators are not sufficient for the monitoring of measures funded). 2. Descriptions of OP and additional national indicators are prepared in advance and are known for the applicants during the preparation of the project. 3.3. Data on the achievements are collected using IT system: data from e-forms of payment claims is automatically imported to the IT system and is being aggregated electronically. 4. Data on the achievements are collected together with data on project activities and financial data. Funds are not allocated to beneficiaries until the data on the achievements of physical indicators indicated in the e-forms of payment claims is not confirmed. Progress made

10. In progress… Amendment of indicators and their targets set in the OP’s. Unification of the descriptions of the same OP indicators. Preparation of the methodology for application of financial sanctions for beneficiaries. Creation of risk managements tools for the achievement of indicators and their targets. Development of an instrument for simulation/ prognosis of likelihood of achieving targets.

11. Example 1: main principles for application of financial sanctions for beneficiaries If value of indicator is decreased or not achieved directly due to the decrease or non-fulfillment of scope of project activity, then implementing body should adopt decision to decrease funds allocated to the project or to return part of the disbursed funds proportionately according to the scope of decreased/non-fulfilled project activity. If value of indicator is decreased or not achieved because of the influence of external factors which do not depend on (non)activity of beneficiary, then decision to decrease funds allocated to the project or to return part of the disbursed funds is not taken. If the value of indicator is decreased or not achieved because of the non- effective performance of project activity, then it should be adopted decision to decrease or return part of the funds proportionately according to the scope of non-effectively performed project activities or decreased/non- achieved part of the indicator in project budget following the methodology prepared in advance by implementing bodies.

12. Example 2: risk managements tool for the achievement of indicators Risk level is assessed comparing: Share of targets of physical indicators planned in the OP or its complements with shares of contracted values of physical indicators and allocations. Share of targets of physical indicators planned in the OP or its complements with shares of achieved values of physical indicators and expenditure paid. Share of contracted values of physical indicators and allocations with shares of achieved values of physical indicators and expenditure paid.

13. Example 3: an instrument for annual forecasts of likelihood of achieving targets The aim of the instrument is to see tendencies of achieving targets from the beginning of the period until the end of the period (2015) and to get forecast of the achievements in each upcoming calendar year. The basis of forecast is data from contracts: –Targets that should be achieved during the project will be assigned to that calendar year in which the project is supposed to be finished. –Targets that should be achieved after the project completion will be assigned to that calendar year after the project implementation which is attributed to certain indicators. Weakness: forecasts will be available only for the targets set in the contracts.

14. Problems to be solved Annual plans for achievement of physical indicators are not prepared and intermediate targets are not set. No any formal linkage between physical and financial indicators in planning process (at OP or project levels). Financial sanctions for the beneficiaries are not applied systematically in case of underachievement of physical indicators.

15. Challenges for the future Result-based management: Result-based management: – Setting of mid-term targets for outputs and results in performance framework. – Unit costs for indicators? Integrated financial and physical progress planning and periodic monitoring. – Performance review leading to performance bonus or financial sanctions. Annual plans for the achievement of physical indicators are needed? New logic for result indicators New logic for result indicators (in ERDF): – Data collection from projects and external sources. Use of national statistics for result indicators. – Evaluation of EU structural funds’ impact to the changes of result indicators. Contribution of other factors. Contrafactual evaluations. Can physical indicators provide sufficient information? …?

16. Thank You for Your Attention For more questions: e-mail: v.krasauskaite@finmin.lt