Bulgaria wrestles for EU funds and credibility

The European Commission is set to withdraw the accreditation of two Bulgarian agencies and bar them for using EU funds after details of a European Commission report on Bulgaria’s fight against corruption and organised crime will be officially issued on July 23. Two agencies under the Ministry of Regional Development and Public Works and the Finance Ministry will lose their permits to operate with EU funding under the bloc’s pre-accession programme PHARE. This could deprive Sofia of about €600 million. Two other agency/programme can meet the same procedure.

Some average reader could think that some clever crocks have put nice sum in their pockets because the report highlights corruption, organized crime and economical fraud activities in Bulgaria. Undoubtedly this kind of crimes has happened. However the question about administration of EU funds is more complex than simple crimes. I have worked some 15 years with EU projects and would like bring forward some other aspects from fieldlevel of project management.

EU has some 500-800 different programmes from where individual projects can have 10-100 % financing of their costs. There is some general guidelines, but nearly every programme has also individual regulations, practice and details. For administration it is huge task to manage, coordinate and implement this puzzle.

EU funding/payment can be delayed or revised e.g. if project manager has offered coffee to participants during training session in one programme when this is allowed with other EU programme. Also he can make mistake using real exchange course in payment claim when only monthly average course is allowed. Most projects need own or SME financial contribution but sometimes according one programme rules it comes from too big company, or company is wrong side of municipal border while implementing regional development project. In payment claim some costs can be in wrong budget line or project manager has forgot to ask amendment/revision decision from Management Authority to do so. Some times it is also difficult to interpret if part of project partners´administrative work is its normal development work (uneligible cost) or strictly project development work (eligible cost).

So there is different regulations which are eligible costs in each project depending from which programme main financing is coming. Many times while programme period changes even the EU officials do not know all details which to apply on the beginning of programme period – how then the project manager or province/state level managing authority could forecast them.

Before mentioned boring details can give picture about bad project management, when similar details occurs with most of the projects one can judge situation as bad programme/EU fund management. But one can also see, that this kind of details are far away from organized crime scene.

What is crime from my point of view is that most EU officials/Management Authorities are more interested about small financial details than the outcome of programme/projects. It is possible to keep budget lines, make a perfect financial report where every cent is in right place without any impact on the field. It is as well possible to implement project with excellent results, superb beneficiary feedback, with many spin-offs and follow-ups which following an insufficient financial report will be doomed as failure.

In accordance of my opinion EU should shift the emphasis of the activity from financial nitpicking to goal orientated approach and the first question from EU officials should be the results on the field. The priorities could be e.g. following:

  • Is there any sence in proposed Logical Framework of programme/project
  • What are the results, are they verified and real
  • How the results were achieved (not to estimate justification of costs but to find best practices for similar cases in other regions/fields)
  • How much were the costs (to compare relation of results to investment)

In case of Bulgaria I do not know how much the question is corruption, organized crime etc. and how much simply problems with applying  complex EU bureacracy  in new member state.  However as taxpayer I would like to see EU concentrating to big lines in real world instead detail hooning between specialists about topics those influence to average citizen are close to zero.

One Response to Bulgaria wrestles for EU funds and credibility

  1. […] July 2008 I wrote an article “Bulgaria wrestles for EU funds and credibility”  about different aspects of misuse of EU funds. In addition to normal crimes etc. I highlighted […]

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