1. Brussels, 29th September 20041 ASSESSMENT OF ADMINISTRATIVE CAPACITIES FROM ABSORPTION POINT OF VIEW Some aspects regarding administrative absorption capacity in the Czech Republic, Estonia, Hungary, Slovakia and Slovenia Open Days Workshop “ Managing Regional Development ” Andrej Horvat

2. Brussels, 29th September 20042 TABLE OF CONTENTS 1.Motivation 2.Literature/documents 3.Absorption problems 4.Administrative absorption capacities… 5.…and new Member States 6.Discussions and Conclusion

3. Brussels, 29th September 20043 MOTIVATION Growth Theory, Regional Development and EU Funds Commonly agreed General Regulations on Structural Funds (EC) 1260/1999 (2052/88 and 2081/93) Only few studies done (Herves/Holzmann, 1998; NEI; 2002) No calculations of absorption rates for Structural Funds´ programmes executed on multi-annual basis so far (Ex-Post) Different execution of the SF Policy in Member States Accession Countries (case studies)

4. Brussels, 29th September 20044 Managing SF and Absorption Structural Policy Absorption and problems Evaluations State of the art in New Member Countries Administrative preparations for implementation Czech Republic, Hungary, Slovakia, Estonia, and Slovenia

5. Brussels, 29th September 20045 LITERATURE Studies/Documents “Key indicators for Candidate Countries to Effectively Manage Structural Funds”; Netherland Economic Institute, 2002 “Administrative Capacity Study”; Papadopoulos, 2003 A Study on the Efficiency of the Implementation Methods for Structural Funds (Inception Report), ÖIR NDPs/CSFs/SPDs; both of the EU Member States and the Candidate Countries Questionnaire European Commission; various documents

6. Brussels, 29th September 20046 ABSORPTION PROBLEMS

7. Brussels, 29th September 20047 DEFINITION General definition (NEI, 2002) of absorption capacity is: ”the extent to which a member state is able to fully spend in an effective and efficient way the allocated financial resources from the Structural Funds“ The absorption rate is defined as: ”the level of spending as a percentage of the total amount of Structural Funds available”.

8. Brussels, 29th September 20048 ABSORPTION CATEGORIES The macroeconomic absorption capacity, (amount of Structural Funds allocated; as % GDP); The administrative absorption capacity the abilities and skills of central, regional and local authorities top-down vs. bottom-up The financial absorption capacity, (the ability to co-finance EU supported programmes and projects)

9. Brussels, 29th September 20049 MEASURING ADMINISTRATIVE ABSORPTION CAPACITY

10. Brussels, 29th September 200410 THE CONCEPT (1) The importance of a proper design (Structure, Human Resources, Systems and Tools) as an input for managing Structural Funds, in relation to the requirements. DESIGN Structures Human Resources Systems & Tools REQUIREMENTS General Regulation (EC) 1260/1999

11. Brussels, 29th September 200411 THE CONCEPT (2) DESIGN Structure relates to the clear assignment of responsibilities and tasks to national institutions that are dealing with the structural funds in the field such as: (1) management, (2) programming, (3) implementation, (4) evaluation and monitoring, (5) financial management and control.

12. Brussels, 29th September 200412 THE CONCEPT (3) DESIGN Human Resources relate to the ability to detail tasks and responsibilities at the level of (1) job descriptions, to estimate (2) the number and qualifications of staff, and (3) to fulfil the recruitment needs. Systems and Tools relate to the availability of instruments, methods, gudielines, manuals, procedures, forms etc.

13. Brussels, 29th September 200413 CONCEPT´s LIMITATIONS FOR THE CEECs Three variables: Performance to be determined ex-post Functioning using Pre-Accession experience? Design (input variable) most attention!!!

14. Brussels, 29th September 200414 The Structural Funds Management Grid KEY INDICATORS FOR CEE COUNTRIES

15. Brussels, 29th September 200415 IMPLEMENTATION STRUCTURE Ex-ante MONITORING COMMITTEE MA IB PA Audit trail EC Audit trail Mid-term Ex-post Monitoring

16. Brussels, 29th September 200416 SF´s MANAGEMENT GRID AND KEY INDICATORS FOR CEE COUNTRIES Establish the appropriate structrues quickly and precisely ; these structures can not be directly copied from Member States, but need to reflect the existing administrative structures and traditions. Simple management structures (SPDs vs. CSFs) require less administrative capacity than complicated structures. Human resources are vital : detail the staff requirements and provide the conditions for recruiting, retaining and training qualified staff. Develop systems, precedures, manuals, guidelines and other tools in order to reduce the vulnerability of organisations and their dependence on individuals. Use existing experience that have been gained in the pre-accession stage Management attention to all areas of the policy life cycle, notably on financial management and control and implementation, but also on programming and monitoring and evaluation.

17. Brussels, 29th September 200417 ADMINISTRATIVE CAPACITIES IN NEW MEMBER STATES

18. Brussels, 29th September 200418 Figure 1: Three phases of Programming Regiopnal Development in Accession Countries

19. Brussels, 29th September 200419 Administrative absorption capacity Ready – Steady - Go?! HUCZSKEESLO Total* 1. Management (max. 24) 2118152117 77% 2. Programming (max. 15) 12 61312 73% 3. Implementation (max. 25) 1814131713 60% TOTAL SCORE (max. 64) 51 4434 51 42 70%

20. Brussels, 29th September 200420 A: Overall Strong Capacity: ready for Structural Funds B: Overall Sufficient Capacity, but certain weaknesses to be addressed C: Not yet Sufficient Capacity, various and serious weaknesses to be addressed D: Insufficient Capacity, no basis for administering the Funds Administrative absorption capacity

21. Brussels, 29th September 200421 Administrative absorption capacity Horizontal and Vertical Assessment by Countries HUCZSKEESLO Horizontal Assessment ManagementBBCBC ProgrammingBBDBB ImplementationCCCCC Vertical Assessment Structures (max.19)B (16)B (15) A (18) B (14) Human Resources (max.17)C (13)C (12)D (7)C (14)C (10) Systems & Tools (max.10)C (6)C (5)D (4)C (6)C (5) Functioning (max. 18) A (16) C (12)D (8)B (13)C (12)

22. Brussels, 29th September 200422 Discussion 1: Political change and consequences for absorption Continuity in personnel (HU yes, SLO no) Continuity in institutions Time Political position of new institution within a government

23. Brussels, 29th September 200423 Discussion 2: How much funds to be administered per administrator? in MEUR and in number of staff (1) Total Funds (SF+CF) (2) Structural Funds only (3) Total Staff (Planned in 2003) (4)=(1)/(3) Total Funds per administr ator (5)=(2)/(3) Structural Funds per administr ator HU 2,8471,8531,967 1.450.9 CZ 2,3281,490672 3.52.2 SK 1,5601,051424 3.7 2.5 EE 618 342 532 1.20.6 SLO 405 237 102 4.0 2.3

24. Brussels, 29th September 200424 Questions?! andrej.horvat@gov.si