Tsvyatko VelikovTsvyatko VelikovDG REGIO BulgariaDG REGIO Bulgaria

Tsvyatko.Velikov@ec.europa.euTsvyatko.Velikov@ec.europa.eu

N+3 as a Tool for Strategic N+3 as a Tool for Strategic Fund ManagementFund Management

LOTHAR - the way it worksLOTHAR - the way it works

Key principles to set up the systemKey principles to set up the system

A uniform approach across OPsA uniform approach across OPs Using same method for all (with a view to Using same method for all (with a view to

aggregate data)aggregate data) Forecast at the lowest meaningful level Forecast at the lowest meaningful level

(considering time and efficiency)(considering time and efficiency) Forecast as much as possible Forecast as much as possible Forecast as far as possible and using your best Forecast as far as possible and using your best

guessguess Freeze the forecast and establish baseline Freeze the forecast and establish baseline

monitoringmonitoring

The key principles in a diagram The key principles in a diagram

OP level

Priority axis 1 Priority axis 2.. Priority axis N

Operation 1 Operation NOperation 2..

Call 1/ Major project 1-Funds Contracted

-Funds paid to beneficiaries -Funds certified to the Commission

Call 2/Major project 2...

Call 3/Major project 3...

The elements of LOTHARThe elements of LOTHAR

Flash sheets for the state of playFlash sheets for the state of play N+3 sheets for the forecastN+3 sheets for the forecast

Flash sheets Flash sheets

3 core indicators: contracting, payment, 3 core indicators: contracting, payment, certification certification

Sub-indicators for each of the core Sub-indicators for each of the core indicatorsindicators

Sub-indicators are different for calls and Sub-indicators are different for calls and for major projectsfor major projects

30 columns and 70 rows – printable in A3 30 columns and 70 rows – printable in A3

An overview of the Flash sheet An overview of the Flash sheet OP OP

structustructurere

Calls Calls specificatiospecification n budget, EU budget, EU funds, funds, interventiointervention raten rate

Project Project selection selection projects projects receivedreceived/selected//selected/total budgettotal budget

Contracts Contracts performanperformancece projects projects contracted, contracted, total total budget, budget, forecastforecast

Payments Payments performanperformanceceTotal paid, Total paid, EU share,EU share,forecastforecast

CertificatiCertification on performanperformanceceTotal Total certified, certified, EU share,EU share,forecastforecast

Operation 1 -nOperation 1 -n

Call 1-nCall 1-n

Major project 1-Major project 1-nn

Works Contract Works Contract 1-n1-n

N+3 SheetsN+3 Sheets

The Commitment profile and the N+3 The Commitment profile and the N+3 profile are based on the total OP profile are based on the total OP allocations. These targets are imposed.allocations. These targets are imposed.

The contracting, payment and certification The contracting, payment and certification forecast are established by e.g. the MAforecast are established by e.g. the MA

Indicators measure the real contracting, Indicators measure the real contracting, payment and certification performancepayment and certification performance

Charts and 120 excel sheets for each OP Charts and 120 excel sheets for each OP and priority axesand priority axes

An overview of an OP N+3 sheetAn overview of an OP N+3 sheet

Commitment Commitment profileprofile

N+3/2 N+3/2 profileprofile

Contracts Contracts forecast forecast and and performanceperformance

Payments Payments forecast forecast and and performanceperformance

CertificationCertification forecastforecast and and performanceperformance

QI 2007QI 2007

QII 2007QII 2007

……..

IV/2015IV/2015

Analysis of the flash Analysis of the flash sheet sheet

a case study a case study

The analysis of the Flash Sheet - The analysis of the Flash Sheet - contractingcontracting

The grid of the Flash Sheet follows The grid of the Flash Sheet follows the project cycle, both for calls and the project cycle, both for calls and projects. The analysis allows to projects. The analysis allows to establish:establish:

The pipeline for calls (could also The pipeline for calls (could also be projects):be projects):

When are the next calls; what are When are the next calls; what are the deadlines for submission of the deadlines for submission of projects?projects?

The pipeline for project contractingThe pipeline for project contracting When does project selection When does project selection

start?+ How many proposals? start?+ How many proposals? How complex is evaluation? How How complex is evaluation? How complex is the negotiation of complex is the negotiation of contracts? How long does it take contracts? How long does it take to transform some project to transform some project proposals into contracts? (i.e. proposals into contracts? (i.e. award of financing)award of financing)

The analysis of the Flash Sheet – The analysis of the Flash Sheet – payment and certificationpayment and certification

The pipeline for paymentsThe pipeline for payments What are the provisions for advance What are the provisions for advance

payments, re-imbursements and final payments, re-imbursements and final paymentspayments

The pipeline for certificationThe pipeline for certification How long does it take to process a bill, from How long does it take to process a bill, from

submission by Beneficiary to submission of submission by Beneficiary to submission of certifications of expenditure to the European certifications of expenditure to the European CommissionCommission

ForecastingForecastingAn example: 1 January 2009 forecastAn example: 1 January 2009 forecast

10 million € call for proposals10 million € call for proposals

Call deadline: 31 January 2009Call deadline: 31 January 2009 500 projects anticipated (jungle drums) = more 500 projects anticipated (jungle drums) = more

than expected. Only 100 can be financed than expected. Only 100 can be financed Project selection in two phases: technical + Project selection in two phases: technical +

quality. Result only when all projects evaluated. quality. Result only when all projects evaluated. Originally expected 2 month, now 3 month, i.e. Originally expected 2 month, now 3 month, i.e. 30 April30 April

Contract negotiation easy, while standardised Contract negotiation easy, while standardised contract + no major eligibility question. Contracts contract + no major eligibility question. Contracts can be signed gradually: 25 contracts per week, can be signed gradually: 25 contracts per week, 100 contracts signed 31 May100 contracts signed 31 May

ForecastingForecastingAn example: 1 January 2009 forecastAn example: 1 January 2009 forecast

10 million € call for proposals10 million € call for proposals

No certifiable advance payments. Project selection No certifiable advance payments. Project selection based on mature documents (e.g. building permits; based on mature documents (e.g. building permits; tender documents). Tendering needed, but small scale:tender documents). Tendering needed, but small scale:

Average 3 months from award of contract to tender Average 3 months from award of contract to tender resultresult

first bills expected from Beneficiaries 5 months after first bills expected from Beneficiaries 5 months after contractingcontracting

First bills available for estimated 20% of project value, First bills available for estimated 20% of project value, for estimated 25% of all projects having reached this for estimated 25% of all projects having reached this stage (the rest are delayed) by 31 Octoberstage (the rest are delayed) by 31 October

Expected expenditure Expected expenditure 31 October = 5 million €31 October = 5 million € Expected certification submission 3 months later = 31 Expected certification submission 3 months later = 31

January 2010January 2010