REPORTof the Audit on the Implementation of

the National Development Plan

Presented to theSeminar on the experience gained during the winding up of

the programming period 2000-2006

Budapest, 20-21 September, 2012

Katalin Tth Kiss, Audit Manager

2

CONTENT

1. The role of the SAO in the evaluation ofthe National Development Plan (NDP)

2. Technology of the performance audit3. Findings strengths, areas to be

developed4. Recommendations5. Lessons learnt, questions for the future

3

The role of the SAIs in the evaluation of NDP

Main targets of the performance audit were:

evaluation of the effectiveness from 3Es

evaluation of the sustainability of the results

4

Role from the strategy of SAO of Hungary

To show an overall, independent and realisticview of the performance of the OPs.

To define strengths and the areas to be developed

To contribute to good governance

To inform stakeholders

5

NDP (Structural Funds) in Hungary

Source: Community Support Framework

6

Distribution of the NDP

Source: accepted plan of NDP for 2004-2006, EUR ~2700 Million

ARDOP 422,8

RDOP 476,4EIDOP 440,3

HRDOP 750,4

ECOP 606,4

7

Technology of the audit

Fact / Plan data analysisBase of the audit

- Final implementation report of each OP - On-site audits of the projects at the beneficiaries

sampling according to ISSAI 3000 - Utilizing other evaluations

Evaluation at the level of NDP, at individual OPs and projects

Selecting 3 indicators characteristic of the projects for the evaluation for each project.

8

Strengths

1. NDP facilitated Hungarys integration with the EU(environmental, traffic, health and educational investments, rural development)

2. Favourable fund utilisation(Additional domestic expenditure: stand-by projects, projects taken out of EU cost settlement and replaced by domestic sources, loans for domestic co-financing.)

9

Favourable fund utilisation

Developments in the absorption of NDP operational programmes

available funds = 100%

97,80% 97,03% 97,23% 99,36%105,65%106,71%107,21%105,66%

0%

20%

40%

60%

80%

100%

120%

EAGGF FIFG ERDF ERDF ESF ERDF ERDF ESF

ARDOP ECOP HRDOP EIOP RDOP

10

Strengths

3. Many successful projects Contributing factor according to beneficiaries: their own preparedness.

11

Area to be developed

1. Efficiency of the source utilisationMaximum benefit for society was missing

- 2004-2006: absorption, regularity orientation, - lack of overall development strategy- lack of defined points to outbreak

12

Area to be developed

2. Concentration on key targets Too much diversified targets

Partial results

Central-Hungarian region produced a strong growth,4 regions on EUs 20 poorest regions list (based on per capita GDP to the EU, 2008)

13

Area to be developed

2. Catalyst role of the cohesion policy

Cohesion policy meant a safety net against the effects of economical recession and not really its catalyst role showed up.

14

Area to be developed

3. Measurement of the results, calling to account Planning deficiencies (lack of baseline data)

Great number of targets and indicators Data supplied by beneficiaries were not always

suitable for evaluation (e.g.: gross added value, job creation)

Contribution of an intervention=

Effect of an intervention (many other effects)

15

Area to be developed

4. Numerous projects have been realised.Actual results compared to plans?

Internal and external conditions influenced the implementation and sustainability of the programmes/projects

Financial re-allocations among priorities indicators had been modified?

Targets and indicators of the NDP document did not change

16

Realised projects

ARDOP - cold store

ARDOP - harvesting machine

17

Realised projects

ECOP processing herbs

18

Realised projects

ECOP machine procurement

ECOP- advisory project

19

Realised projects

HRDOP - competence-based education

EIDOP railway development

20

Realised projects

EIDOP wind powerstation

21

Realised projects

RDOP Day of the village

22

Achieved outputs,actual results

34 500 new and retained jobsECOP, RDOP, ARDOP

Gross added value:ECOP: HUF 128 BillionARDOP: 0,5% increase

23

Achieved outputs,actual results

335 000 persons participating in human resources development and training programmes

24

Achieved outputs,actual results

179 km new and modernised roads (EIDOP, RDOP)

113 000 residents provided with new or renewed water purification and sewage treatment capacities

25

Area to be developed

6. Targets of projects and/or in sustainability of the resultsUp to 30% due to financial-economical crisis

In agriculture: weak crop or creation of excess crop silo capacity

In public education: because of reduction of normative supports

26

Fulfilment of project targets

Implementation status of the project targets at programmes closures

82 projects; 75%

28 projects; 25%

Partly fulfilled (one of the selected indicators was fulfilled under 80%) 28 projects

The indicators of the targets were fulfilled or over-fulfilled 82 projects

27

Recommendationsthe Minister of National Development and the Minister of RuralDevelopment

1. Continue the development of the future grant system in light of the EU objectives for the period after 2013 in a way that in parallel with the avoidance of the loss of funds and with regularity, the accomplishment of strategic goals and thesustainability of projects also become priorities.

2. In the interest of the protection of domestic financial interests, take measures to review NDP projects that have been taken out of the EU cost settlement and have been settled in full at the expense of the domestic budget.

3. Have the substantiation of the action plans of projects dealing with utilisation problems reviewed, and if necessary have new action plans prepared.

28

Lessons learnt

Have to focus on the main targets.Have to show that we have invented the

sources, not only spent themImportant to measure the results

compared to plans, and to reason differences

Methodology of the evaluation influence on effectiveness

29

2014-2020: New approach in the cohesion policy

The European Council approved the Europe 2020priorities

June 2010

The Commission has proposed a number of important changes to the way cohesion policy is designed and implemented.

Key changes:

- concentration on Europe 2020 targets;- rewarding performance;

- supporting integrated programming(combining investments);

- focusing on results and closer monitoring of progress;

- reinforcing territorial cohesion; and- streamlining delivery.

October 2011

30

Questions for the future

In general, it is clear what the money is intended to be spent on in a programme, but how great change should be achieved in the results?

Will the same interventions of the individual countries be comparable: costs and results?

Will there be baseline data available in each country to measurechanges?

Will it be possible to collect data by the use of a uniform method in different countries (for progress, for the evaluation of the effects)?

Will using different data collection methods not influence the extent of the effects on the same type of interventions in different member countries?

31

THANK YOU FOR YOUR ATTENTION!