Control mechanisms:
1.u0009A reporting system which supports the certification process of payment claims;
2.u0009A monitoring system to check all large projects and funds throughout their implementation;
3.u0009A monitoring system for random spot checks of up to 5% of all supported projects each year, and;
4.u0009Monitoring of projects which are considered to be at risk or which have had problems over the course of their implementation
How do the control mechanisms work?
The control mechanisms are based upon cooperation between the three donor states and the beneficiary states, with both shared and divided responsibility and control checks.
1.u0009Financial control of payment claims: The grants are paid out on the basis of incurred project costs, e.g. costs which have already been invoiced and paid by the project promoters. The exception to this rule is advance payments of up to 10% which are given for the start-up of many projects, especially projects being implemented by non-governmental organisations.
Over the life of a project, the project promoters provide a series of interim reports, along with a breakdown of funds spent. These reports are usually provided at intervals of 3-6 months and include a payment claim for funds spent by the project managers.
The control of the grant reimbursements is split between:
a.u0009the beneficiary states, who certify project progress and the details of how the funds have been spent, matching invoices and receipts to payment claims; and
b.u0009the FMO in Brussels, which carries out a second, shorter check of the payment claim, including a check of grant management, and a check related to adherence to the grant agreement, prior to disbursing funds to cover the payment claims.
2.u0009Monitoring projects in implementation. In addition to the financial check, the projects implemented under the EEA and Norway Grants are monitored to ensure that the grants are spent as intended. The donors states and beneficiary states have developed a monitoring system that divides the work between the Focal Points in each beneficiary state and the FMO in Brussels.
The 15 beneficiary states are obliged to carry out monitoring and report on every project prior to the end of the grant. Annually, the beneficiary states report on the grant programmes in their countries, including the monitoring of projects. In addition, the FMO works closely with each country to schedule planned as well as spot checks of projects in progress. All projects granted more than €2.5 million are monitored, a random selection of up to 5% of projects annually are checked, as are projects that are perceived to be at risk.
The aim of the monitoring is to ensure that the projects are progressing as planned. Questions asked by the FMO during monitoring are wide-ranging, and cover such points as:
- Is the project going according to plan and is the timeline being met? If not, what can be done to overcome project delays?
- Is the management sound?
- What control mechanisms for fiscal management and for managing risks that can occur over the life of the project are being used?
- Are the planned results being achieved, according to benchmarks and indicators established to measure the success of the project? If not, what can be done either by the FMO or the beneficiary state to help or ease any unforeseen burdens?
- Is the project sustainable over the long-run?
If a project is monitored and deemed to have significant problems, the FMO follows up with suggestions on how to improve things and a repeat monitoring is later conducted to see if the problems have been solved.
The monitoring systems in place seek to ensure, to the greatest extent possible, that all 1200 projects foreseen are implemented in the manner in which the grants were intended and that there is sufficient financial control in place so that money does not go astray. No project is expected to go exactly according to a precise timeline and plan, however, the sufficient control mechanisms shall be in place to contribute to funds not being misappropriated or mismanaged during the life of the projects.
So, who is minding the store? The oversight work is carried out by both the beneficiary state monitoring agencies and the FMO in Brussels. Cooperation between both sides is key to success, and both sides are continuously working to improve the monitoring process.