Implementation
of the Norwegian Financial Mechanism 2009-2014
in Lithuania
Strategic Report No.2
Reporting period:
1 January 2012 - 31 December 2012
Prepared by the National Focal Point (Ministry of Finance)
Contents
Abbreviations
1EXECUTIVE SUMMARY
2ASSESSMENT OF IMPACT AT NATIONAL LEVEL
2.1Cohesion
2.2Bilateral relations
3MANAGEMENT AND IMPLEMENTATION
3.1Management and control systems
3.2Compliance with EU legislation, national legislation and the MoU
3.3Status of Programmes
3.4Irregularities
3.5Audit, monitoring, review and evaluation
3.6Information and publicity
3.7Work plan
4REPORTING ON PROGRAMMES
5SUMMARY LISTING OF ISSUES AND RECOMMENDATIONS
5.1Experienced problems
5.2Future risks
6ATTACHMENTS TO THE STRATEGIC REPORT
Abbreviations
AAAudit Authority
CACertifying Authority
CPMACentral Project Management Agency
CCCooperation Committee
DoRISDocumentation, Reporting and Information System
DPPDonor Project Partner
EEAEuropean Economic Area
FMCFinancial Mechanism Committee
FMOFinancial Mechanism Office
GrantsEuropean Economic Area and Norway Grants 2009-2014
IFRInterim Financial Report
IRAIrregularity Reporting Authority
NBFNational Bilateral Fund
NFPNational Focal Point
NMFANorwegian Ministry of Foreign Affairs
MCSManagement and Control System
MoUMemorandum of Understanding
PAProgramme Agreement
POProgramme Operator
RAIRequest for additional information
RegulationRegulation on the implementation of the Norwegian Financial Mechanism 2009-2014
SFMISStructural Funds Management Information System
1EXECUTIVE SUMMARY
During the reporting period the preparation of programmes was finished and all programme proposals were submitted to the FMO’s appraisal. 4 out of 6 programmes operated by Lithuanian POs (LT09, LT11, LT12 and LT13) were already approved by the NMFA. However, the Programme Agreements were still in the process of harmonisation at the end of 2012 and actual implementation was not started yet (only preparatory match-making events were organised under the programme LT09).
The management and control system on the Beneficiary State level was finalised and its description together with the Audit Authority’s positive conclusion regarding the compliance with the Regulation was submitted to the FMO. The basis for the management and control systems on programme level – the standardised Rules on Financing and Implementation of Programmes and Projects – was also prepared by the NFP (although officially adopted on 29 January 2013). Preparation of public procurement documentation for creation and maintenance of the SFMIS subsystem for the EEA and Norway Grants was started.
The Work Plan for the National Bilateral Fund was prepared and submitted to the FMO. After consultations with the Donors and related national institutions it was decided that the key priority areas of the Fund will be good governance, equal opportunities and social inclusion, academic and research cooperation, cultural exchange and reinforcement of the bilateral elements of the programmes. The Fund will be divided into 3 components: 1) reimbursement scheme to compensate travel expenses related to participation in bilateral cooperation events; 2) pre-defined projects related to the Lithuanian EU Presidency and 3) open calls for short-term ad hoc initiatives of bilateral cooperation in the key priority areas.
Communication Strategy was prepared and approved. A launching event of the EEA and Norway Grants 2009-2014 was held together with the Norwegian Embassy in Vilnius. Joint Communication Working Group for coordination of communication activities among the POs and the NFP was established. Preparation of public procurement documentation for creation and maintenance of the joint website was started. A survey to identify the baseline public awareness about the Grants was carried out.
The main problems encountered during the reporting period, which delayed the start of the actual implementation into 2013, were longer than initially expected programme appraisal and harmonisation of Programme Agreements, as well as protracted preparation of standardised Rules on Financing and Implementation of Programmes and Projects due to difficult harmonisation process with the POs and the CPMA having different interests related to specificity of different programmes. The most immediate tasks of the upcoming year should be directed at mitigating the risks arising from the accumulated delays, first and foremost approval of the remaining programmes and signing of Programme Agreements, as well as preparation for project selection and launch of the open calls and start of implementation of pre-defined projects.
2ASSESSMENT OF IMPACT AT NATIONAL LEVEL
2.1Cohesion
Due to the size of the Norway Grants it is impossible to measure the impact at the national level. The impact is further defragmented by rather high number of relatively small programmes. However, as the choice regarding the programmes to be financed during the MoU negotiation stage was based on the most pronounced need for financial support in specific areas that were not covered by other financial instruments, some quite significant and appreciable effects can be expected in these targeted niches.
Only one of the programmes financed from the Norway Grants, namely LT09, could be regarded as directly related to the economic development. The other ones could be described as being more of the social character. The programme LT09 will help Lithuanian SMEs to create and implement innovations that will allow to use energy and other resources at a higher efficiency and to minimize waste in the production process. This will lead to the increased competitiveness. Expanding companies will most likely create new workplaces, although concrete predictions regarding the numbers are impossible at current stage.
Public sector capacities will be improved though the bilateral cooperation of public institutions and local authorities under the programme LT10.The programme will be implemented in line with regional policy provisions, striving to ensure the high quality of life for all the inhabitants of the whole country territory. During calls priority will be given to institutions in problem territories and regional growth centres, hence the well-being in these regions will be impacted through better daily results and quality of the provided services of strengthened institutions to local communities.
Although the programme LT11 is not big, but its concentration on the specific problem of health inequalities in Lithuania and efforts directed at creating the monitoring system on national level will make a significant impact in selected area. Health inequalities in Lithuania are ranked as one of the largest in Europe and tend to increase in the context of consequences of financial–economic crisis. According to the data of 2010 the difference in life expectancy at birth between women and men was 10,8 years, between rural and urban men – 4 years, between rural and urban women – 2 years[1]. General trend of deterioration of health of children and youth due to harmful lifestyle is also noticeable. Implementation of measures required for consistent monitoring of health inequalities together with development of model for the provision of youth-friendly health care services and introduction of such services at the municipal level will create prerequisites for improvement of policy in this area to be able to address the problems in more effective way.
Justice sector receives the largest part of the Norway Grants assistance in Lithuania –18,8 MEUR or 44,6% of the total net assistance. All 3 programmes in this sector will be implemented exceptionally through the pre-defined projects(only one small call will be organised under LT14) as the sector is in the sphere of state monopoly, but this also means that the results created will be mainly of the national level importance. Better capacities of police and customs to fight and prevent cross-border crimes will contribute to the safer environment for Lithuanian citizens. Modernisation of judicial system will make it more effective and easier accessible to all citizens, which is one of the main preconditions for protection of human rights. It significantly contributes to the safeguarding of democracy, equity and better quality of life. Moreover, raising awareness and improving understanding of ordinary people in court activities will improve their ability to defend their rights through legal means.Crime situation in Lithuanian is among the worst in the EU (eg. rate of homicides is the highest in the EU – 8,3 per 100 000 inhabitants compared to 1,3 in EU27 based on average yearly data of 2007-2009[2]).The situation with imprisonment rates is equally bad – 248,7 prisoners for 100 000 inhabitants compared to EU27 average of 126,9 (in 2009[3]). Correctional system in Lithuania is overloaded with long lasting problems, however sufficient funds have not been available to implement lager scale reforms. High recidivism rate indicates that re-socialisation system in not really effective.It is expected that Norway Grants will help to significantly improve imprisonment conditions, implement measures of alternatives to prison and improve effectiveness of the re-socialisation system. Return of the convicts to be full-fledged society members participating in its social and economic life is essentialin safeguarding the security of the population, as well as human and social development.
2.2Bilateral relations
Existence of several different instruments (Donor Programme Partnership, National Bilateral Fund, bilateral funds under programmes, encouragement of even requirement of partnership under open calls) will ensure that bilateral relations will be increased and strengthened on both programme and project level and probably even outside the immediate boundaries of the implementation of the Norwegian Financial Mechanism.
National Bilateral Fundwork plan was developed by the NFP after several rounds of consultations with the FMO, Norwegian Embassy in Vilnius, Lithuanian Ministry of Foreign Affairs and relevant national line ministries. Due to a limited size of the Fund it was decided to limit its scope to 5 key priority areas which were selected in line with the Donors’ interests indicated in the Annual Meeting held on 6 June 2012 in Vilnius. These areas are:
- Good governance;
- Equal opportunities and social inclusion;
- Academic and research cooperation;
- Cultural exchange;
- Reinforcement of the bilateral elements of programmes indicated in the MoUs.
The first draft of the work plan was submitted to the FMO on 19 November 2012. The NBF is planned to be divided into 3 parts:
- Reimbursement Scheme(up to 70 000 EUR) will be used to compensate travel expenses related to experience sharing events whenconfirmation from the FMO is received that the specific event is organized with support of the Donors and costs are eligible to be finance under the NFB. It can also be used by the POs and pre-defined project promoters in the programme preparation phase for travels needed to strengthen bilateral aspects of the programmes and prepare the ground for future cooperation (for example, completion of pre-defined partnership project proposals) until the bilateral funds at programme level become available. This scheme will be used only for actions that cannot be financed from other sources (because of limited size or eligibility rules applicable to the programme preparation costs).
- Pre-defined Projects.It is planned to have up to two pre-defined EU Presidency related events in 2nd half of 2013 which aim at establishing longer term, more structured and institutionalized cooperation, e.g. organization of a big conference, a series of events or awareness raising campaigns. Preliminary 150 000 EUR are reserved for this goal. One of such initiatives in line with general key priority areas of the Fund and specific topics suggested by the Donors is the Vilnius University project “Gender equality implementation in research institutions”.
- Open calls will be organized (starting from 2014) to finance ad hoc initiatives that consist mainly of one or several related specific actions (e.g. participation in events, meetings, or release of joint publications) with clear implementation schedules. Specific thematic priorities (in line with the indicated key priority areas) will be agreed in the annual work plans and specified in the guidelines for the open call. Indicative budget reserved for the open calls is 200 000EUR.
The Fund is not meant to fund long term or complex projects, but rather defined complementary initiatives such as conferences, workshops, study tours, studies, information activities, etc. As the size of the Fund is limited, also seeking to minimize the administrative burden, only direct expenditure will be covered, overheads will not be eligible.
The NFP shall be responsible for the management of the Fund, however Donor State entities, Lithuanian Embassy in Oslo [TBC], Paying Authority, Certifying Authority and other national entities according to the need will be also involved in its implementation. A simple scheme presenting the relations among the different institutions is presented below:
The Fund Committee shall be established with the members from the NFP, Royal Norwegian Embassy in Vilnius, Ministry of Foreign Affairs of the Republic of Lithuania [TBC], other experts may also be invited on the need. The Fund Committee will consult the NFP regarding any issue related to the use and implementation of the Fund at the intervals of the annual meetings. It will also participate in the selection of applications.
The implementation system shall be developed taking into consideration the relatively small size of the Fund and seeking to have as simple and flexible system as possible in the existing legal environment.
Expected bilateral relations results under programmes can be described in the following four dimensions:
- Extent of cooperation. 4 out of 6 programmes operated by Lithuanian POs will be implemented with Donor Programme Partners from Norway. 10 pre-defined projects are already known to be implemented with donor project partners, too. The list of partnership projects is provided in Annex 1 of this report. All the projects under the programme LT10 will be implemented with Norwegian partners, too. Compulsory partnership requirements are planned to be set in the callunder the programme LT09(only the small grant scheme will not have such a requirement). Existence of programme bilateral funds will facilitate partner search for potential applicants – measure “a“ will be used in all programmes containing open calls. The most common form of implementation of measure “a” is partner search forums organised by POs with the help of DPPs. Measure “b” will provide opportunities for bilateral initiatives in addition to the ones already included into the projects. It will be used in all the programmes except LT10 where partnership is already obligatory and all the efforts will be directed at facilitating partner search (measure “a”).
- Shared results. The programmes themselves that are implemented in cooperation with the DPPs are already to some extent shared results. Although the extent of DPPs’ actual involvement in the preparation process differed among the programmes. The same can be said about project level, where partnership projects (and even those without formal partnership but having ad hoc cooperation elements) will definitely create some shared results although it is hard to forecast the scope and relevance of these results at this stage. The most likely types of shared results are joint articles on specific subjects published and new technologies/practices/methodologies introduced.
- Knowledge and mutual understanding. This has already materialised to a significant extent on the level of PO-DPP cooperation while preparing programme proposals. Both sides had opportunities to learn a lot about various practices and organisation of systems in respective policy areas which theoretically has a potential to lead even to the wider effects in related areas which are not the direct targets of the programmes. At least one visit of the PO to Norway and one visit of the DPP to Lithuania were carried out in each programme during the programme preparation stage. Live contact and visits on site made possible to learn more in the shorter period of time compared to other communication means. Although this aspect of bilateral relations is difficult to measure it might be even more pronounced than the other ones as it builds up even when truly shared results are not planned to created or fail due to some external reasons. On project level additional effect is expected when project promoters and partners participate in various related conferences, workshops and other events where third parties will also learn about the practices of partnering entities and countries as well as the EU and the EEA Agreement.
- Wider effects. Successful partnerships are likely to generate further cooperation initiatives but it depends heavily on the availability of additional resources. The programme LT09 probably allows to have the most expectations here as business sector is self-sufficient and most capable of generating funds required to finance additional initiatives.But in cases of other programmes, too, improved knowledge and capacities can be expected to have spill-over effects into other areas both on the institutional and individual level.
The most prominent risk related to achieving bilateral goals at current stage is availability of partners from Norway. With the total number of 10 Beneficiary States and only 1 Donor Country it is obvious that Beneficiary States will be practically competing for partners among themselves. The programmes that start earlier will have a relative advantage, but even obtaining a partner can not secure smooth implementation. The effect of partners’ overload has already manifested in PO-DPP cooperation while preparing the programmes. As all DPPs also have other POs they are partnering in other Beneficiary Countries, as well as their direct responsibilities in the respective policy area sometimes it proved to be difficult to find suitable times for both sides to meet and the time to receive the DPPs’ input into documents under preparation was in some cases longer thanideally expected despite the positive cooperative attitude of the DPPs. This protracted the programming phase and added up to the risk of already quite short period for actual implementation of projects. Similar effect might occur on the project level, too.
3MANAGEMENT AND IMPLEMENTATION
3.1Management and control systems
On 29 June 2012 the description of the management and control system on the Beneficiary State level was submitted to the FMO together with the Audit Authority’s report and opinion in line with Art. 4.8 of the Regulation. The report stated that notwithstanding some minor recommended improvements to legal acts and internal procedures of involved institutions the established implementation system in Lithuania was in line with the Regulations and the managing institutions were capable of performing assigned functions. The full list of found minor deficiencies, provided recommendations and follow up actions taken to implement these recommendations is provided in Annex 2 of this report.