Transnational training seminar for potential Lead
Partners and Partners to INTEREGG IIIB-CADSES
procedures for 3° call for proposal
CADSES implementation procedures: a short
overview of the subsidy contract, the reporting
obbligations, the cash flow and the audit and financial
control issues
Brno 9 th November 2004
Ms Concetta Collarile
MA1 CADSES PROGRAM
We talk about
 Subsidy
contract
 Reporting obligations
 ERDF payment circuit
 Audit and financial controll issues
What is a subsidy contract?
The subsidy contract is the legal basis that
regulates the relationship between the
Managing Authority and Lead Partner.
Who signs the Subsidy contract?
The MA is the legal person in whose name
contracts are concluded. The Ministry for
Infrastructures and Transports concludes subsidy
contracts with the ERDF Lead Partners of projects
in its own name, thus being liable for ERDF funds
in the first place as contracting partner.
Subsidy contract’s object
The subsidy is awarded exclusively for the
project as it is described in the application
approved by the requirements
Steering Committee.
Subsidy contract’s information
In the subsidy is specified:
the total Project budget and its cofinancing:
 ERDF subsidy
 National co-financing
Furthermore it is indicated the Project
duration:
From ____ until ____
How is the subsidy contract composed by?
It is composed by:
 the (final) application form,
 the co-financing statements,
 the joint convention between the LP and
the project partners
 the approval decision of the Steering
Committee
LP’s Obligations
 to
present payment requests to the MA
 to present progress reports to the JTS
 to ensure that the project partners fulfil
their obligations under the subsidy
contract
LP’s Obligations
 to
co-ordinate the start of the project
according to the action plan approved by
the Steering Committee;
 to co-ordinate the implementation of the
project within the time schedule stated in
the approved action plan;
 to inform the JTS immediately if changes,
concerning the approved project, happen
LP’s Obligations
 To
submit the first request for payment
within 6 months after the conclusion of the
subsidy contract,
 to submit the final report to the JTS within
three months after completion of the
project;
 to comply with European Union and
national legislation including public
procurement
LP’s Obligations

to point out in public statements (reports,
publications, etc.) that the project was
implemented through financial assistance from
ERDF funds within the framework of the
INTERREG III B CADSES Programme in
accordance with Commission Regulation (EC)
No 1159/2000 on information and publicity
measures to be carried out by the Member
States concerning assistance from the Structural
Funds
Right of withdrawal
The MA is entitled to withdraw from the
subsidy contract and to demand
repayment of funds in full or in part:
 If the LP fails to fulfil a condition or an
obligation resulting from the subsidy
contract;
 if the LP has obtained the subsidy through
false
statements
or
incomplete
information;
Right of withdrawal

If the LP wholly or partly closes down, sells,
leases or lets the project to a third party ;
 in case of insolvency or banckruptcy of LP or
other institutions involved into the project;
 if the LP repeatedly fails to produce progress
reports;
 If the LP does not submit payment requests
within 6 months since the signature of the
contract
Right of withdrawal

If the co-funded project cannot or could not be
realized respectively in due time, or a
precondition for the approval of the project is
lost;
 If the LP fails to provide immediate information
about circumstances that delay, hinder or make
impossible the realization of the co-funded
project;
 If the regulations of the EU law;
 If irregularities
are identified during the
implementation of the project
Reporting obligations
 To
submit to JTS the “Progress report”
twice a year;
 To submit to MA the “Payment claim” four
time a year.
Progress report
It consists of:
 Activity
Report
 Financial
Report
Payment claim
There are four deadlines per year to submit
the Payment Claims to the MA in Rome:
 April 1st
 July 1st
 October 1st
 December 1st
Payment claim
The Payment Claim consists of the
following documents:
 1.
Demand for reimbursement of
expenditures
 2. Description of Incurred Expenditures
 3. Certifications of Expenditures (one per
each project partner)
ERDF FINANCIAL CIRCUIT
PROJECT
PARTNER
CERTIFYING
BODY
PROJECT
PARTNER
SENDS CERTIFIED
EXPENDITURES TO
LEAD PARTNER
LEAD
PARTNER
CERTIFYING
BODY
LEAD
PARTNER
AGGREGATES
1 Apr
1 July
1 Oct.
1 Dec.
MANAGING
PAYING
EUROPEAN
AUTHORITY
AUTHORITY
COMMISSION
VALIDATES
AGGREGATES &
CERTIFIES
Management and control system’s aims
 To
verify the delivery of the products and services cofinanced and the reality of expenditure claimed;
 to ensure compliance with the terms of the relevant
Commission decision under Article 28 of Regulation (EC)
No 1260/1999 and with applicable national and Community
rules on, in particular, the eligibility of expenditure for
support from the Structural Funds under the assistance
concerned, public procurement, State aid (including the
rules on the cumulations of aid), protection of the
environment and equality of opportunity.
Audit and financial control
The Reg. 438/2001 laying down rules for
the management and control systems for
assistance granted under the Structural
Funds envisages two control’s level:
 1 st level control
 2 nd level control
1 st level control

The 1 st control aims to check all invoices
and activities of the project participants and is
carried out in relation to each Payment
Claim.
 As the first level control lies in the
responsibility of each Member State
according to art. 38 (1) Reg 1260/1999 and it
is organized and managed at national level.
1 st level control
a certification of Expenditures per each
project partner, verifying the accuracy and
compliance with relevant EC regulations
and National legislations and program
specific rules on budget and finances,
must be annexed to the Payment Claim,
which then the Lead Partner itself has to
send to the MA.
2 nd level control
The second level control lies in the responsibility of
each Member State, it will be carried out by an
audit private company.
The second level control is performed on an
appropriate sampling basis, and it is designed in
particular to:
 (a) verify the effectiveness of the management
and control systems in place;
 (b) verify selectively, on the basis of risk
analysis, expenditure declarations made at the
various levels concerned.
FCG
The FCG will be responsible to:
 verify
the
effectiveness
of
the
management and control system in place;
 verify selectively, on the basis of risk
analysis, expenditure declarations made at
the various levels concerned.
Partner
ERDF CIRCUIT
forwards
National Coordinator
( 1st level control
certifiers )
starts National
Funding
certifies
Forwards its
payment claim
Validates & communicates in carbon copy
Starts
ERDF
Forwards payment claims related to
the projects
Managing Authority
Paying Authority
THANK YOU!
MA
Ministry for Infrastrucutures and transport
Via Nomentana 2
00191 Rome (Italy)
Tel 0039 06 44126426
0039 06 44267336
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