Financial regulation of 27 March 2003 applicable to the 9th European Development Fund

For payments made by the accounting officer by sub-delegation, the authorising officer responsible shall ensure that checks are carried out either before or after their execution and on their entry in the accounts.

Where revenue and expenditure operations are managed by means of computer systems, documents may be signed by a computerised or electronic procedure.

Where computer systems and subsystems are used to process financial implementation operations, a full description of each system or subsystem shall be required.

The data in computer systems and subsystems shall be saved periodically and kept in a safe place.

The internal auditor shall advise the Commission on dealing with risks, by issuing independent opinions on the quality of management and control systems and by issuing recommendations for improving the conditions of implementation of operations and promoting sound financial management. He may be called on to advise the authorities of ACP countries or OCTs on the same topics.

The internal auditor shall enjoy full and unlimited access to all the information he requires to perform his duties, where necessary on the spot, including in the Member States and in third countries.

The internal auditor shall report to the Commission on his findings and recommendations. The Commission shall ensure that action is taken on recommendations resulting from audits. The internal auditor shall also submit to the Commission an annual internal audit report indicating the number and type of audits carried out, the recommendations made and the action taken on those recommendations.

Each year the Commission shall send the authority responsible for discharge a report summarising the number and type of internal audits carried out, the recommendations made and the action taken on those recommendations.

Public contracts are contracts for pecuniary interest concluded in writing by a contracting authority within the meaning of Article 73 in order to obtain, against payment of a price paid in whole or in part from EDF resources, the supply of movable or immovable assets, the execution of works or the provision of services.

This Title does not relate to grants.

The following shall be contracting authorities for the purposes of this Title:

The procurement procedures shall be laid down in the financing agreements referred to in Article 51(3).

Where the Commission acts as contracting authority for the implementation of humanitarian aid or emergency aid within the framework of the ACP-EC Agreement or the Overseas Association Decision, it shall be required to comply with the relevant Community rules on procurement.

Participation in tendering procedures in respect of contracts financed by the EDF shall be open on equal terms in accordance with the conditions laid down in Article 20 of Annex IV to the ACP-EC Agreement.

Nationals of countries other than ACP States and the Member States, including the OCTs, may be authorised to take part in the tendering procedures in accordance with the conditions laid down in Article 22 of Annex IV to the ACP-EC Agreement.

Within the limits of the powers conferred on it by the ACP-EC Agreement, the Commission shall take all appropriate measures to ensure the effective dissemination of information for the economic operators concerned, notably through periodic publication of the programmes and projects to be financed from EDF resources.

The Commission shall ensure in particular that the following information is published in the most appropriate media, with an indication of the subject matter, content and value of the proposed contracts:

Within the limits of the powers conferred on it by the ACP-EC Agreement, the Commission shall ensure that the results of tendering procedures are published at the earliest opportunity.

This Title shall govern the direct labour and indirect decentralised operations provided for in Article 24 of Annex IV to the ACP-EC Agreement. It shall apply mutatis mutandis to financial cooperation with the OCTs.

In the case of direct labour operations, projects and programmes shall be implemented directly through public departments of the ACP State or States concerned.

In the case of indirect decentralised operations, the contracting authority within the meaning of Article 73(1)(a) shall entrust tasks relating to the implementation of projects or programmes to bodies governed by public law of the ACP State or States concerned or bodies governed by private law that are legally distinct from the ACP State or States concerned. In such cases, the body concerned shall assume responsibility for the management and implementation of the programme or project in place of the National Authorising Officer. Tasks so delegated may include the power to conclude contracts and manage contracts and the supervision of works on behalf of or for the account of the ACP State or States concerned.

Direct labour operations and indirect decentralised operations shall be implemented on the basis of a programme of measures to be carried out and an estimate of their cost, hereinafter referred to as the ‘programme estimate’. The programme estimate is a document laying down the human and material resources required, the budget and the detailed technical and administrative implementing arrangements for execution of a project over a specified period by direct labour and, possibly, by means of public procurement and the award of specific grants. Each programme estimate shall be prepared by the imprest administrator and the accounting officer referred to in paragraph 2, in the case of direct labour operations, or by the body referred to in paragraph 3, in the case of indirect decentralised operations, and shall then be approved by the National Authorising Officer and the Commission’s responsible authorising officer before the activities it provides for commence.

In the context of the implementation of the programme estimates referred to in paragraph 4, the procurement and grant award procedures shall comply with those laid down in Titles IV and VI respectively.

The financing agreements referred to in Article 51(3) must make provision for the implementation of direct labour operations or indirect decentralised operations.

In the context of centralised management, grants are direct financial contributions, awarded by the Commission by way of donation from EDF resources in order to finance:

The following shall not constitute grants for the purposes of this Title:

The award of grants shall be subject to the principles of transparency and equal treatment. Grants may not be cumulative; they may not be awarded retrospectively; and they must involve co-financing.

The grant may not have the purpose or effect of producing a profit for the beneficiary.

Where, in the context of centralised management, an action provides for financing in the form of grants, the operational plan for that action shall contain a programme, except in the case of crisis management aid or humanitarian aid operations.

The grants awarded shall be published annually with due observance of the requirements of confidentiality and security.

One action may give rise to the award of only one grant from EDF resources to any one beneficiary.

A beneficiary may be awarded only one operating grant from EDF resources per financial year of the beneficiary.

A grant may be awarded for an action which has already begun only if the applicant can demonstrate the need to start the action before the agreement was signed.

The agreement on an operating grant may not be signed more than four months after the start of the beneficiary's budget year. Expenditure eligible for financing may not have been incurred before the date when the grant application was submitted or the start of the beneficiary's budget year.

Grant applications shall be eligible where they fall under the ACP-EC Agreement or the Overseas Association Decision or a programme or project adopted in accordance with that Agreement or Decision and are submitted in writing by legal persons. By way of exception, depending on the nature of the action or the objective pursued by the applicant, natural persons may receive grants in accordance with the conditions laid down in the Agreement or Decision.

Grants may not be awarded to applicants whose situation, at the time of a grant award procedure, is such that they fall to be classed as ineligible under the Community rules applicable to public procurement.

Effective, proportionate and dissuasive administrative and financial penalties may be imposed by the Chief Authorising Officer on applicants who are excluded under paragraph 2.

The selection criteria shall be such as to make it possible to assess the applicant's ability to complete the proposed action or work programme.

The award criteria shall be such as to make it possible to assess the quality of the proposals submitted in the light of the objectives and priorities set.

Proposals shall be evaluated, on the basis of pre-announced selection and award criteria, by an evaluation committee set up for that purpose, with a view to determining which proposals may be financed.

On the basis of the evaluation provided for in paragraph 1, the authorising officer responsible shall draw up the list of beneficiaries and the amounts approved.

The authorising officer responsible shall inform applicants in writing of the decision on their application. If the grant requested is not awarded, he shall give the reasons for the rejection of the application, with reference in particular to the selection and award criteria previously announced. Applicants shall be informed within 15 days of the award decision being forwarded to the beneficiaries.

The amount of the grant shall not become final until after the Commission has accepted the final reports and accounts, without prejudice to subsequent checks by the Commission.

Should the beneficiary fail to comply with his legal or contractual obligations, the grant shall be suspended and reduced or terminated after the beneficiary has been given the opportunity to make his observations.

Where implementation of the action requires the award of procurement contracts by the beneficiary, the grant agreements referred to in Article 82(1) shall make provision for procedures that comply with the Community rules on procurement applicable to cooperation with non-member countries.

Each grant agreement shall provide expressly for the Commission, OLAF and the Court of Auditors to exercise their powers of control, on documents and on the spot, over all contractors and subcontractors who have received financial assistance from EDF resources.

The Commission shall draw up, by 31 July each year at the latest, the accounts of the EDF describing the financial situation of the Fund as at 31 December of the preceding year. The EDF Accounts shall comprise:

The EDF accounts shall be accompanied by a report on financial management during the preceding year containing an accurate description of:

In accordance with the principle of accrual-based accounting, the financial statements referred to in Article 100 shall show the charges and income for the financial year, regardless of the date of payment or collection.

The value of assets and liabilities shall be determined in accordance with the valuation rules provided for in Article 111.

The financial statements shall be prepared by the accounting officer and presented in millions of euro. They shall comprise:

The annex to the financial statements shall supplement and comment on the information presented in the statements referred to in paragraph 1 and shall contain notes indicating which accounting principles were applied in the preparation and presentation of the accounts.

The reports on financial implementation shall be prepared by the accounting officer and presented in millions of euro. They shall comprise the financial outturn account, which sets out all financial operations for the year in terms of revenue and expenditure. The annex to the financial outturn account shall supplement and comment on the information presented in it.

The reports on financial implementation shall comprise the following tables, presented in millions of euro and prepared by the Chief Authorising Officer in conjunction with the accounting officer:

The Court of Auditors shall, by 15 June at the latest, make its observations on the provisional accounts as regards the part of the EDF resources for which the Commission is responsible for financial management under Article 1(2), so that the Commission can make the corrections deemed necessary for drawing up the final accounts.

The Commission shall approve the final accounts and send them to the European Parliament, the Council and the Court of Auditors by 31 July of the following financial year at the latest.

The final accounts shall be published by 31 October of the following financial year in the Official Journal of the European Union together with the statement of assurance given by the Court of Auditors in respect of the part of the EDF resources for which the Commission is responsible for financial management under Article 1(2).

The Commission and the EIB shall monitor, each to the extent to which it is concerned, the use of EDF assistance by the ACP States, the OCTs or any other beneficiary, and the implementation of projects financed by the EDF, having particular regard to the objectives referred to in Articles 55 and 56 of the ACP-EC Agreement and in the corresponding provisions of the Overseas Association Decision.

The EIB shall periodically inform the Commission regarding the implementation of projects financed from the EDF resources it administers, following the procedures set out in the operational guidelines of the Investment Facility.

The Commission and the EIB shall provide the EDF Committee with information on the operational implementation of EDF resources through the national and regional allocations set out in the Annex. Such information shall also cover projects and programmes financed from the Investment Facility. The Commission shall send that information to the Court of Auditors in accordance with Article 32(4) of the Internal Agreement.

The accounting system is the system serving to organise the financial information in such a way that figures can be input, filed and registered.

The accounts shall consist of general accounts and financial accounts. Those accounts shall be kept in euro on the basis of the financial year.

The figures in the general accounts and the financial accounts shall be adopted at the close of the financial year so that the accounts referred to in Chapter 1 can be drawn up.

Notwithstanding paragraphs 2 and 3, the Chief Authorising Officer may keep analytical accounts.

Movements on the accounts and the balances shall be entered in the accounting ledgers.

All accounting entries, including adjustments to the accounts, shall be based on supporting documents, to which they shall refer.

The accounting system shall be such as to leave a trail for all accounting entries.

The financial accounts shall allow detailed monitoring of the financial implementation of EDF resources.

When commitments, payments and debts are expressed in national currencies, the accounting system shall make it possible, where necessary, for them to be recorded in national currencies as well as in euro.

The commitments defined in Article 51 shall be recorded in euro for the value of the financing decisions taken by the Commission.

The conversion rates to be used for final accounting of payments made under the projects or programmes referred to in Part 4 of the ACP-EC Agreement and Annex IV thereto or in the Overseas Association Decision shall be the rates applicable on the date on which the Commission accounts referred to in Article 28 of this Regulation were debited.

All accounting records referring to the fulfilment of a commitment shall be kept for a period of five years from the date of the decision giving discharge in respect of the financial implementation of EDF resources, referred to in Article 119, concerning the financial year during which the commitment was closed for accounting purposes.

The accounting officer shall adopt the applicable accounting rules and methods. He shall prepare and, after consulting the Chief Authorising Officer, adopt the chart of accounts to be applied to the EDF's operations. In so doing he shall be guided by the internationally accepted accounting standards for the public sector but may depart from them where justified by the specific nature of the EDF's activities.

Entries in the accounts shall be made on the basis of the chart of accounts using a nomenclature which makes a clear distinction between the general accounts and the financial accounts. The chart of accounts shall be sent to the Court of Auditors.

In respect of cooperation with the ACP States, the Court of Auditors, when examining whether all revenue has been received and all expenditure incurred in a lawful and proper manner, shall have regard to the provisions of the ACP-EC Agreement, this Regulation and all other acts adopted pursuant to those instruments.

In the performance of its task, the Court of Auditors shall be entitled to consult, in the manner provided for in paragraph 6, all documents and information relating to the financial management of departments or bodies with regard to operations financed or co-financed from EDF resources. It shall have the power to make enquiries of any official responsible for a revenue or expenditure operation and to use any of the auditing procedures appropriate to those departments or bodies.

The Court of Auditors shall ensure that all securities and cash on deposit or in hand are checked against vouchers signed by the depositories or against official memoranda of cash and securities held. The Court may carry out such checks itself.

At the request of the Court of Auditors, the Commission shall authorise financial institutions holding EDF deposits to enable the Court of Auditors to ensure that the external data tally with the accounts.

The Commission shall afford the Court of Auditors all the facilities and give it all the information which the latter deems necessary for the performance of its task. It shall place at the disposal of the Court of Auditors all documents concerning the award and performance of contracts and all accounts of cash or materials, all accounting records or supporting documents, and also administrative documents relating thereto, all documents relating to revenue and expenditure, all inventories, all organisation charts which the Court of Auditors considers necessary for auditing the financial outturn report on the basis of documents or on the spot and, for the same purposes, all documents and data created or stored on a magnetic medium.

The task of establishing that the revenue has been received and the expenditure incurred in a lawful and proper manner and that the financial management has been sound shall extend to the utilisation by bodies outside the Commission of EDF resources which they have received and managed in the form of grants in accordance with Title VI. All financing from EDF resources granted to beneficiaries outside the Commission shall be subject to the agreement in writing by the beneficiaries or, failing agreement on their part, by the contractors or subcontractors, to an audit by the Court of Auditors of the use made of the financing granted.

Use of integrated computer systems may not have the effect of impairing access by the Court of Auditors to supporting documents.

The national audit authorities of the beneficiary states shall be encouraged to participate in the work of the Court of Auditors.

After the closure of each financial year, the Court of Auditors shall draw up an annual report in accordance with paragraphs 2 to 6.

The Court of Auditors shall transmit to the Commission, by 15 June at the latest, any observations which, in its opinion, are such that they should appear in the annual report. Those observations must remain confidential. The Commission shall address its replies to the Court of Auditors by 30 September at the latest.

The annual report shall contain an assessment of the soundness of financial management.

The Court of Auditors may add any summary report or any general observations which it sees fit to make.

The Court of Auditors shall take all necessary steps to ensure that the Commission's replies to its observations are published immediately after the observations to which they relate.

The Court of Auditors shall send its annual report, together with the Commission's replies, to the authorities responsible for giving discharge and to the Commission, by 31 October at the latest, and shall ensure the publication thereof in the Official Journal of the European Union.

The Court of Auditors shall notify the Commission of any observations which, in its opinion, are such that they should appear in a special report. Those observations must remain confidential.

The special reports referred to in paragraph 1, together with the Commission's replies, shall be transmitted without delay to the European Parliament and the Council, each of which shall decide, where appropriate in conjunction with the Commission, what action is to be taken in response.

The Court of Auditors may, at the request of one of the other institutions, issue opinions on matters relating to the EDF.

Before 30 April of year N + 2, the European Parliament, upon a recommendation from the Council acting by a qualified majority, shall give a discharge to the Commission in respect of the financial implementation for year N of the EDF resources, which it manages in accordance with Article 1(2). If that date cannot be met, the European Parliament or the Council shall inform the Commission of the reasons for the postponement. Should the European Parliament postpone the decision giving discharge, the Commission shall make every effort to take measures, as soon as possible, to facilitate removal of the obstacles to that decision.

The discharge decision shall cover the accounts referred to in Article 96, except the part thereof provided by the EIB in accordance with Article 125(2). The discharge decision shall include an assessment of the responsibility of the Commission in the execution of the financial management during the preceding period.

With a view to granting the discharge, the European Parliament shall, after the Council has done so, examine the EDF accounts referred to in Article 96. It shall also examine the annual report made by the Court of Auditors together with the Commission's replies, any special reports by the Court of Auditors relevant to the financial year in question and the Court of Auditors' statement of assurance as to the reliability of the accounts and the legality and regularity of the underlying transactions.

The Commission shall take all appropriate steps to act on the observations accompanying the European Parliament's discharge decision and the comments accompanying the discharge recommendation adopted by the Council.

At the request of the European Parliament or the Council, the Commission shall report on the measures taken in the light of those observations and comments, and, in particular, on the instructions given to those of its departments which are responsible for the financial implementation of EDF resources. That report shall also be sent to the Court of Auditors.

The decision giving the discharge shall be published in the Official Journal of the European Union.

The contributions referred to in Article 39 and adopted by the Council shall be paid by the Member States to the EIB via a special account opened in the name of each Member State.

Save where the Council decides otherwise regarding the remuneration of the EIB in accordance with Article 8 of the Internal Agreement, proceeds received by the Bank via the credit balance of the special accounts referred to in paragraph 1 of this Article shall be recorded in an account in the Commission's name, and used for the purposes set out in Article 9 of the Agreement.

Any rights resulting from operations carried out by the EIB using EDF resources, and particularly rights as creditor or owner, shall be vested in the Member States.

The EIB shall undertake the treasury management of the amounts referred to in paragraph 1 in accordance with the detailed rules laid down in the management agreement provided for in Article 128.

The Investment Facility shall be managed in accordance with the conditions laid down in the ACP-EC Agreement, the Overseas Association Decision and the Internal Agreement.

The EIB shall keep the accounts of the Investment Facility, including interest rate subsidies, financed by the EDF to provide a trail for the full circuit of the funds, from receipt to disbursement and then to the revenue to which they give rise and any subsequent recoveries. The EIB and the Commission shall draw up the relevant accounting rules and methods by common agreement and inform the Member States accordingly.

Each year the EIB shall send the Council and the Commission a report on the implementation of operations financed from EDF resources under its management, including the financial statements drawn up in accordance with the rules and methods referred to in paragraph 1 and the information referred to in Article 101(2).

The provisions of this Title shall govern the transfer to the 9th EDF of the balances remaining from resources constituted under the Internal Agreements relating to the 6th (9), 7th (10) and 8th (11) EDFs (hereinafter referred to as ‘previous EDFs’).

The balances remaining from previous EDFs shall be used to finance projects, programmes and other forms of action that contribute to attaining the objectives of the ACP-EC Agreement and the Overseas Association Decision, in accordance with the provisions of that Agreement or that Decision, and with the conditions laid down in this Title.

Any resources transferred to the 9th EDF that were previously allocated to the indicative programme of an ACP State or an ACP region before the entry into force of the Financial Protocol set out in Annex I to the ACP-EC Agreement shall remain allocated to that State or region.

Resources that were allocated to OCTs before the entry into force of the Overseas Association Decision shall remain allocated to them. Any resources thus transferred to the 9th EDF after having been allocated previously to the indicative programme of an OCT or a region shall remain allocated to that OCT or to regional cooperation in the context of the implementation of the Overseas Association Decision.

The balance of revenue accruing from interest on the resources of previous EDFs shall be transferred to the 9th EDF and allocated for the same purposes as the revenue provided for in Article 1(3) of the Internal Agreement. The same shall apply to miscellaneous revenue of previous EDFs comprising, for example, default interest received in the event of late payment of contributions to those EDFs by Member States and the interest generated by the EDF resources managed by the EIB, that is payable to the Community.

In respect of the ACP States, any balance that is not allocated to a country or region, taking into account the transitional measures applicable up to the entry into force of the ACP-EC Agreement, shall be assigned to the unallocated amount of the 9th EDF, in accordance with the decision referred to in Article 132 of this Regulation.

In respect of the OCTs, any balance that is not allocated to an indicative programme on the date when the Internal Agreement enters into force shall be assigned to the non-allocated amount of the EDF.

Balances remaining from previous EDFs that are transferred to the 9th EDF shall be administered in accordance with the conditions laid down in this Title and in the relevant provisions of the ACP-EC Agreement, the Overseas Association Decision or the Internal Agreement.

As regards the ACP States, commitments relating to previous EDFs entered into before the entry into force of the ACP-EC Agreement shall continue to be implemented in accordance with the rules applicable to those EDFs, save as regards the duties of the Financial Controller, the presentation of accounts and the procedure for calling contributions, for which the provisions of this Regulation shall apply. With effect from the date on which the ACP-EC Agreement enters into force, the balances transferred to the 9th EDF shall be used in accordance with the conditions laid down in the ACP-EC Agreement, the Internal Agreement and this Regulation.

As regards the OCTs, commitments relating to the previous EDFs entered into before the entry into force of the Internal Agreement and this Regulation shall continue to be implemented in accordance with the rules applicable to those EDFs, save as regards the duties of the Financial Controller, the presentation of accounts and the procedure for calling contributions, for which the provisions of this Regulation shall apply. Resources from previous EDFs shall continue to be employed in accordance with the relevant provisions of Decision 91/482/EC, which shall remain applicable for that purpose until the entry into force of the Internal Agreement.

Decisions relating to previous EDFs for which the EIB undertakes the financial implementation shall continue to be implemented in accordance with the rules applicable to those EDFs, save as regards the duties of financial controller and the presentation of accounts. The procedure for calling contributions required to implement those decisions shall be that laid down in this Regulation in the case of operations managed by the Commission.

The procedures concerning Member States' contributions laid down in Articles 8, 38 and 40 shall apply for the first time in respect of the first instalment to be proposed after the entry into force of this Regulation.

The deadlines referred to in Articles 102, 103, 116 and 125 shall apply for the first time in respect of financial year 2005.

The provisions of Title VII of Part One shall apply gradually depending on technical possibilities in order to be fully effective for the financial year 2005.

In accordance with Articles 2 and 34 of the Internal Agreement, the Member States shall assess the degree to which commitments and disbursements have been carried out before the expiry of the EDF. On that occasion they shall also assess the Commission's needs in respect of the resources reserved for costs linked to implementation under Articles 4 and 9 of the Internal Agreement. The need for new resources to support financial cooperation and costs linked to implementation under Article 9 of the Internal Agreement shall be established in the light of that assessment. Due account shall be taken of the uncommitted and non-disbursed resources under the EDF.

Before the expiry of the 9th EDF, the Member States shall set a date beyond which the resources of the EDF may no longer be committed.