Of the EEA Financial Mechanism 2009-2014

Implementation

of the EEA Financial Mechanism 2009-2014

in Lithuania

Strategic Report No.2

Reporting period:

1 January 2012 - 31 December 2012

Prepared by the National Focal Point (Ministry of Finance)

Contents

Abbreviations

1EXECUTIVE SUMMARY

2ASSESSMENT OF IMPACT AT NATIONAL LEVEL

2.1Cohesion

3MANAGEMENT AND IMPLEMENTATION

3.1Management and control systems

3.2Compliance with EU legislation, national legislation and the MoU

3.3Status of Programmes

3.4Irregularities

3.5Audit, monitoring, review and evaluation

3.6Information and publicity

3.7Work plan

4REPORTING ON PROGRAMMES

5SUMMARY LISTING OF ISSUES AND RECOMMENDATIONS

5.1Experienced problems

5.2Future risks

6ATTACHMENTS TO THE STRATEGIC REPORT

Abbreviations

AAAudit Authority

CACertifying Authority

CPMACentral Project Management Agency

CCCooperation Committee

DoRISDocumentation, Reporting and Information System

DPPDonor Project Partner

EEAEuropean Economic Area

FMCFinancial Mechanism Committee

FMOFinancial Mechanism Office

GrantsEuropean Economic Area and Norway Grants 2009-2014

HRMIHuman Rights Monitoring Institute

IFRInterim Financial Report

IRAIrregularity Reporting Authority

NBFNational Bilateral Fund

NFPNational Focal Point

NMFANorwegian Ministry of Foreign Affairs

MCSManagement and Control System

MoUMemorandum of Understanding

PAProgramme Agreement

POProgramme Operator

RAIRequest for additional information

RegulationRegulation on the implementation of the EEA Financial Mechanism 2009-2014

SFMISStructural Funds Management Information System

1EXECUTIVE SUMMARY

During the reporting period the preparation of programmes was finished and all programme proposals were submitted to the FMO’s appraisal. 3 out of 6 programmes operated by Lithuanian POs (LT05, LT06 and LT07) were already approved by the Donors, as well as the NGO programme LT04 operated by the FMO. However, the Programme Agreements were still in the process of harmonisation at the end of 2012 and actual implementation was not started yet.

The management and control system on the Beneficiary State level was finalised and its description together with the Audit Authority’s positive conclusion regarding the compliance with the Regulation was submitted to the FMO. The basis for the management and control systems on programme level – the standardised Rules on Financing and Implementation of Programmes and Projects – was also prepared by the NFP (although officially adopted on 29 January 2013). Preparation of public procurement documentation for creation and maintenance of the SFMIS subsystem for the EEA and Norway Grants was started.

The Work Plan for the National Bilateral Fund was prepared and submitted to the FMO. After consultations with the Donors and related national institutions it was decided that the key priority areas of the Fund will be good governance, equal opportunities and social inclusion, academic and research cooperation, cultural exchange and reinforcement of the bilateral elements of the programmes. The Fund will be divided into 3 components: 1) reimbursement scheme to compensate travel expenses related to participation in bilateral cooperation events; 2) pre-defined projects related to the Lithuanian EU Presidency and 3) open calls for short-term ad hoc initiatives of bilateral cooperation in the key priority areas.

Communication Strategy was prepared and approved. A launching event of the EEA and Norway Grants 2009-2014 was held together with the Norwegian Embassy in Vilnius. Joint Communication Working Group for coordination of communication activities among the POs and the NFP was established. Preparation of public procurement documentation for creation and maintenance of the joint website was started. A survey to identify the baseline public awareness about the Grants was carried out.

The main problems encountered during the reporting period,which delayed the start of the actual implementation into 2013, were longer than initially expected programme appraisal and harmonisation of Programme Agreements, as well as protracted preparation of standardised Rules on Financing and Implementation of Programmes and Projects due to difficult harmonisation process with the POs and the CPMA having different interests related to specificity of different programmes. The most immediate tasks of the upcoming year should be directed at mitigating the risks arising from the accumulated delays, first and foremost approval of the remaining programmes and signing of Programme Agreements, as well as preparation for project selection and launch of the open calls and start of implementation of pre-defined projects.

2ASSESSMENT OF IMPACT AT NATIONAL LEVEL

2.1Cohesion

Due to the size of the EEA Grants it is impossible to measure the impact at the national level. The impact is further defragmented by rather high number of relatively small programmes. However, as the choice regarding the programmes to be financed during the MoU negotiation stage was based on the most pronounced need for financial support in specific areas that were not covered by other financial instruments, some quite significant and appreciable effects can be expected in these targeted niches.None of the programmes financed by the EEA Grants are directly targeted at economic development, but instead could be described as being more of the social character. Though they will not promote economic growth, their role is important in financing the society needs that could not otherwise be afforded by the state at its current economic capacity.

The environmental programmes LT02 and LT03 were probably the only ones that were chosen more based on the obligatory requirement to allocate at least 30% of the EEA Financial Mechanism assistance to environmental sector than the persistence of problems in the sector due to the lack of financing. As the environment is an important priority under the EU funds, a lot of the projects are already being implemented in this area. Almost 1,13 billion EUR is allocated solely to the priority of environment and sustainable development from the EU funds 2007-2013 and even more measures under other priorities have environmental implications. 25,9 MEUR are allocated to the environment monitoring measure and 67,6 MEUR are allocated to the biodiversity measure[1]. Nevertheless, the programmes LT02 and LT03 were concentrated on the fields that were not yet covered by the EU assistance and are expected to produce important results in terms of tools developed for environmental status assessment and predictionand management of protected areas. This will strengthen the capacities of the responsible state institutions to deal with the relevant challenges and contribute to the improvement of the environmental status, which is one of the essential elements of sustainable development.

The EEA Grants support is already well known by the Lithuanian NGOs sector and the new period of assistance is very much awaited. Together with the Swiss Contribution programme the EEA Grants NGOs Fund are still the biggest instruments directed at strengthening of the sector as such. Contrary to previous period of Grants when assistance was made available to any kind of NGOs acting in favour of the public interest without prioritisation of specific areas, the programme LT04 will be more concentrated, therefore more tangible impact is expected in the selected areas (democracy and good governance, human rights, vulnerable groups, protection of environment and climate change).

Through the development of the network of child day-care centres and open youth centres, as well as the establishment of the new method of integration of necessary care services for children subjected to sexual abuse the programme LT05 will strive for improving the well-being of vulnerable groups of children and youth, protect them from violence, abuse and exploitation. Currently the services provided by the child day-care centres and open youth centres cover only a small fraction of the total estimated number of children at risk (22 073 in 2011[2]). With the help of the programme the coverage level should be increased by 6% in case of child day-care centres and by 33% in case of open youth centres.

The cultural heritage sector is another area where the EEA Grants can really make a difference. Although preservation of cultural heritage objects is also financed from the EU funds, this assistance is strictly limited by linking it to the tourism development while other uses of cultural heritage are not supported. Currently only 15-20 objects per year at best[3] are being restored from state funds. Given that the programme LT06 is expected to finance restoration of 10 wooden and 5 non-wooden cultural heritage objects, i.e. more than half of the yearly number of the whole country, the results will be extremely significant for the sector. In addition the programme will provide considerable amount of work for traditional craftsmanship which is not only important in respect of preservation of the crafts, but will have an effect to the economic situation of people in this line of work. The programme LT07 dedicated to the cultural exchange will especially target the regions outside the more developed biggest cities and prioritise national minorities, therefore it will directly contribute to the diminishing of sociocultural inequalities in Lithuania.

Taking into account the existing mobility possibilities in higher education, the programme LT08 chose to concentrate on other level of education, especially giving attention to lifelong learning. Lithuania is lagging behind many EU countries according to the share of adults (25-64 years old) engaged in lifelong learning. In 2010 only 4% of Lithuanian adult population took part in adult learning during the four weeks prior to research, which was extremely low compared with the EU average of 9.1%.Although 218 MEUR is dedicated for this priority from the EU funds[4], some added value can be expected from the bilateral element of the programme.

2.2. Bilateral relations

Existence of several different instruments(Donor Programme Partnership, National Bilateral Fund, bilateral funds under programmes, encouragement of even requirement of partnership under open calls) will ensure that bilateral relations will be increased and strengthened on both programme and project level and probably even outside the immediate boundaries of the implementation of the EEA Financial Mechanism.

National Bilateral Fundwork plan was developed by the NFP after several rounds of consultations with the FMO, Norwegian Embassy in Vilnius, Lithuanian Ministry of Foreign Affairs and relevant national line ministries. Due to a limited size of the Fund it was decided to limit its scope to 5 key priority areas which were selectedin line with the Donors’ interests indicated in the Annual Meeting held on 6 June 2012 in Vilnius.These areas are:

1. Good governance;
2. Equal opportunities and social inclusion;
3. Academic and research cooperation;
4. Cultural exchange;
5. Reinforcement of the bilateral elements of programmes indicated in the MoUs.

The first draft of the work plan was submitted to the FMO on 19 November 2012. The NBF is planned to be divided into 3 parts:

• Reimbursement Scheme(up to 70 000 EUR) will be used to compensate travel expenses related to experience sharing events whenconfirmation from the FMO is received that the specific event is organized with support of the Donors and costs are eligible to be finance under the NFB. It can also be used by the POs and pre-defined project promoters in the programme preparation phase for travels needed to strengthen bilateral aspects of the programmes and prepare the ground for future cooperation (for example, completion of pre-defined partnership project proposals) until the bilateral funds at programme level become available. This scheme will be used only for actions that cannot be financed from other sources (because of limited size or eligibility rules applicable to the programme preparation costs).
• Pre-defined Projects.It is planned to have up to two pre-defined EU Presidency related events in 2nd half of 2013 which aim at establishing longer term, more structured and institutionalized cooperation, e.g. organization of a big conference, a series of events or awareness raising campaigns. Preliminary 150 000 EUR are reserved for this goal. One of such initiatives in line with general key priority areas of the Fund and specific topics suggested by the Donors is the Vilnius University project “Gender equality implementation in research institutions”.
• Open callswill be organized (starting from 2014) to finance ad hoc initiatives that consist mainly of one or several related specific actions (e.g. participation in events, meetings, or release of joint publications) with clear implementation schedules. Specific thematic priorities (in line with the indicated key priority areas) will be agreed in the annual work plans and specified in the guidelines for the open call. Indicative budget reserved for the open calls is 200 000EUR.

The Fund is not meant to fund long term or complex projects, but rather defined complementary initiatives such as conferences, workshops, study tours, studies, information activities, etc. As the size of the Fund is limited, also seeking to minimize the administrative burden, only direct expenditure will be covered, overheads will not be eligible.

The NFP shall be responsible for the management of the Fund, however Donor State entities, Lithuanian Embassy in Oslo [TBC], Paying Authority, Certifying Authority and other national entities according to the need will be also involved in its implementation. A simple scheme presenting the relations among the different institutions is presented below:

The Fund Committee shall be established with the members from the NFP, Royal Norwegian Embassy in Vilnius, Ministry of Foreign Affairs of the Republic of Lithuania [TBC], other experts may also be invited on the need. The Fund Committeewill consult the NFP regarding any issue related to the use and implementation of the Fund at the intervals of the annual meetings. It will also participate in the selection of applications.

The implementation system shall be developed taking into consideration the relatively small size of the Fund and seeking to have as simple and flexible system as possible in the existing legal environment.

Expected bilateral relations results under programmes can be described in the following four dimensions:

• Extent of cooperation. 5 out of 6 programmes operated by Lithuanian POs will be implemented with Donor Programme Partners from Norway. No DPPs will be involved in Lithuanian programmes from Iceland and Lichtenstein.1 pre-defined project is already known to be implemented with a donor project partner under the programme LT05 (“Establishment of a Support Centre for Child Victims of Sexual Abuse”; promoter – State funded Mother and Child Care Centre “Užuovėja”; partner – Icelandic Government Agency for Child Protection “Barnaverndarstofa”; project budget – 868 860 EUR).Compulsory partnership requirements are planned to be set in the calls under programmes LT07 and LT08. Bilateral cooperation will be encouraged and prioritised in the calls under programmes LT03, LT05 and LT06. Existence of programme bilateral funds will facilitate partner search for potential applicants – measure “a“ will be used in all programmes containing open calls, i.e. except LT02. The most common form of implementation of measure “a” will be partner search forums organised by POs with the help of DPPs. Measure “b” will provide opportunities for bilateral initiatives in addition to the ones already included into the projects. It will be used in most of the programmes except LT07 and LT08 where the small total budget of the programmes also limits the size of bilateral funds which will be fully used up by measure “a”.
• Shared results. The programmes themselves that are implemented in cooperation with the DPPs are already to some extent shared results. Although the extent of DPPs’ actual involvement in the preparation process differed among the programmes. The same can be said about project level, where partnership projects (and even those without formal partnership but having ad hoc cooperation elements) will definitely create some shared results although it is hard to forecast the scope and relevance of these results at this stage.The most likely types of shared results are joint articles on specific subjects published and new technologies/practices/methodologies introduced.
• Knowledge and mutual understanding. This has already materialised to a significant extent on the level of PO-DPP cooperation while preparing programme proposals. Both sides had opportunities to learn a lot about various practices and organisation of systems in respective policy areas which theoretically has a potential to lead even to the wider effects in related areas which are not the direct targets of the programmes.At least one visit of the PO to Norway and one visit of the DPP to Lithuania were carried out in each programme during the programme preparation stage. Live contact and visits on site made possible to learn more in the shorter period of time compared to other communication means. Although this aspect of bilateral relations is difficult to measure it might be even more pronounced than the other ones as it builds up even when truly shared results are not planned to be created or fail due to some external reasons. On project level additional effect is expected when project promoters and partners participate in various related conferences, workshops and other events where third parties will also learn about the practices of partnering entities and countries as well as the EU and the EEA Agreement.
• Wider effects. Successful partnerships are likely to generate further cooperation initiatives but it depends heavily on the availability of additional resources. However, improved knowledge and capacitiestend to have spill-over effects into other areas both on the institutional and individual level.

The most prominent risk related to achieving bilateral goals at current stage is availability of partners from Donor States. With the total number of 15 Beneficiary States and only 3 Donor Countries it is obvious that Beneficiary States will be practically competing for partners among themselves. The programmes that start earlier will have a relative advantage, but even obtaining a partner can not secure smooth implementation. The effect of partners’ overload has already manifested in PO-DPP cooperation while preparing the programmes. As all DPPs also have other POs they are partnering in other Beneficiary Countries, as well as their direct responsibilities in the respective policy area sometimes it proved to be difficult to find suitable times for both sides to meet and the time to receive the DPPs’ input into documents under preparation was in some cases longer thanideally expected despite the very positive cooperative attitude of the DPPs. This protracted the programming phase and added up to the risk of already quite short period for actual implementation of projects. Similar effect might occur on the project level, too.