ISSN electronic version 2081-8319
Economic and Environmental Studies
Vol. 10, No. 1 (13/2010)113-124, March 2010
Correspondence Address: Anna Zamiar, Wrocław University, Faculty of Social Sciences, Institute of Sociology, Koszarowa 3, 51-149 Wrocław, Poland. Email: [email protected].
The evaluation of institutions implementing
structural funds in Poland
Anna ZAMIAR
Wrocław University, Wrocław, Poland
Abstract: Structural policy, also referred to as regional structural policy, aims at preserving both economical and
social consistency in the development of EU member countries with social and economic sustainable development as its main objective. This article concentrates on the structure of managing Union funds on the example of Poland. A description is provided of the activities of implementing institutions which, as they are directly in touch with project suppliers, are considered to play a key role in realizing the ideas of sustainable development. The results of research carried out by the author in 2007 are presented. This research aimed at evaluating the efficiency of implementing institutions on the territory of the Lower Silesia region covered the project suppliers who applied for the support within specific operation programs and co-operated with implementing institutions.
Keywords: Structural Policy, Structural Funds, European Union, Operational Programmes, Implementing
Institutions, Lower Silesian Regional Labour Office (DWUP -Dolnośląski Wojewódzki Urząd Pracy), Polish Agency For Enterprise Development (PARP - Polish Agency For Enterprise Development).
1. Introduction
All structural funds and especially the European Social Fund (ESF) are one of the EU's key financial tools, and are an important instrument in creating European structural policy. The policy aims for sustainable development of all Member States, in both economic and social fields. The European Social Fund has been created in order to facilitate employment increase through adjusting people’s skills and qualifications to the needs of the labour market, and through increasing their mobility within individual Member States and inside the whole EU.
The Financial means from the ESF 2004-2006 for investments in human resources were passed on to the beneficiaries on the basis of two main programmes: The Sectoral Operational Programme and The Human Resources Development and Integrated Regional Development
Programme. Thanks to numerous advisory and training measures and projects, each of the Programmes managed to enhance the human resources development, increase employment and people’s adjustments to the labour market needs and, as a result, to enhance the country’s social and economic competitiveness within the EU.
Therefore, the main problem that should be dealt with is whether the chosen Polish implementing institutions, such as Dolnośląski Wojewódzki Urząd Pracy - DWUP (Lower Silesian Regional Labour Office) and Państwowa Agencja Rozwoju Przedsiębiorczości - PARP (Polish Agency For Enterprise Development) stay in line with the ideas of effective completion of the structural policy and consequently of sustainable development. Also the following question should be asked: “What bureaucratic and institutional factors may nowadays impede the effective completion of projects within European Social Fund help programmes in Poland?”
In order to provide the most reliable results of the discussed issue evaluation, the research covered the respondents who were responsible for the creation and completion of the ESF financial projects for the Sectoral Operational Programme and the Human Resources Development and Integrated Regional Development Programme in Lower Silesia region in 2004-2006. Due to their professional duties these people were in touch with the implementing institutions most often; firstly when they applied for financing and secondly when they worked on particular projects. Therefore these people are able to provide a verified and objective opinion on the above mentioned institutions.
A questionnaire divided into two parts was the main instrument used during the research. The first part described the cooperation between the implementing institutions (PARP and DWUP) and the Beneficiaries during the initial phase of the application preparation and searching for information on financing possibilities for particular measures. The second part described the relation between the implementing institutions and the applicants during the project's completion and accounting. Moreover, the analysis and evaluation of literature and sources was used.
2. Structural Policy and European Social Fund
The main aim of structural policy, also called regional structural policy, is “maintaining social and economic cohesion in regional development of the EU Member States” while “[t]he main objective of this policy is to decrease the gaps between less and more developed regions (Wojtaszczyk, 2004: 299).” The ESF is the oldest existing and operating structural fund, thanks to which the Member States are able to perform a joint social policy. Over the past years it has greatly supported ideas and priorities connected with the social aspect of EU Member States' operations.
In 2000-2006 the ESF had an amount of EUR 64 billion for the financing of the above mentioned goals. Within each Member State these goals referred to support areas. Each of the areas had their priorities which described the goals. The main support areas in ESF include (www.funduszestrukturalne.gov.pl, 2008).
• Mobilisation of the unemployed and less-favoured persons,
• Fighting social exclusion and promoting equal opportunities in the labour market, • Developing educational systems within life-long learning,
• Strengthening economy forces and developing entrepreneurship, • Professional mobilisation of women.
The above mentioned support areas and priorities are defined on the basis of the joint structural policy of the EU, while the help (operational) programmes are formed by the appropriate national institutions of the Member States. It must however be done in such a way that strategic national measures for each stay in line with ESF goals and priorities. In this way they also stay in line with the social community policy of the EU. According to the Treaty establishing the European Community (art. 136) both the Community and the Member States are obliged to promote employment, improved living and working conditions, proper social protection and supporting the activities that promote human resources development. Also the Member States are responsible for fighting social exclusion and support of professional mobilisation in order to decrease unemployment levels. As has been argued,
[i]n order to enhance the employment possibilities on a local market and thus improve the living standard, the following has been decided in accordance with the ESF: it facilitates employment and increases the employees’ mobility inside the EU. At the same time the ESF helps the
employees to adjust to changes in industry and production systems, mainly through vocational education and trainings (Barcz and Michoński, 2003: 451).
To sum up: all Member States are obliged to run a joint social and structural policy. The instruments used to perform these objectives are structural funds, including the European Social Fund. It must be highlighted that despite the fact the ESF is a financial instrument of community regional policy it also facilitates the realization of the EU social policy. The issues of regional and social policies are strongly connected with each other, as the goals of the regional policy stay in line with the EU social policy.
3. Polish Regional Policy on the Example of Lower Silesia Region
According to the rules and regulations of the European Union, development strategies for the Member States are planned on central and regional levels. For Poland the “central” planning document was the National Development Plan 2004-2006.
The main objective of the National Development Plan was to develop competitive industry based on knowledge and entrepreneurship, capable of long-term, harmonized development that could ensure a higher employment rate and better social, economic and spatial coherence with the Union, on both regional and national levels (Ministerstwo Gospodarki i Pracy, 2004: 66).
Both the main and specific objectives of the National Development Plan greatly influenced development strategies of each region of the country. Following the Union’s directives, the above mentioned document included detailed guidelines referring to the range of using structural funds.
The financial help for Poland was distributed in two phases. The first phase was money for the Beneficiaries within Sectoral Operational Programmes. In 2004-2006 there were five of them: Improvement of the Competitiveness of Enterprises, Human Resources Development, Fisheries and Fish Processing, Transport and Restructuring and Modernisation of the Food Sector and Rural Development. Due to the subject matter of this case study which mainly deals with human resources development and investments in that area, it will contain information on the Sectoral Operational Programme of Human Resources Development. It is important to remember that although all the above mentioned programmes were implemented in all regions of the country, they were managed at the central level – by state administration. The second phase was
money from the Integrated Regional Operational Programme (IROP). It was the Ministry of the Economy, Labour and Social Policy (MELSP) that prepared the programme. A crucial element of preparation was consultations on socio-economic issues with local self-governments in all voivodships involved. While the general goals, priorities and measures apply to the whole country, there are local and regional differences in implementation due to differing socio-economic circumstances, requiring different strategies (Urząd Marszałkowski Województwa Dolnośląskiego, 2005: 15). It should be emphasised at this point that although all projects within SOP HRD were implemented and managed at the national level, the projects within IROP were mainly carried out in particular regions of the country (see Tab. 1)
Table 1. Managing and Intermediary Institutions for each Programme.
Operational
Programme Managing Institution Intermediary Institution
Sectoral Operational Programme - Human
Resources Development Ministry of Labour
Ministry of National Education, Ministry of Science and Higher Education
Integrated Regional Operational Programme
Ministry of Regional Development
and each voivodship self-government Voivodship Offices Source : based on: ( Ministerstwo Gospodarki i Pracy, 2004: 165).
The above described allocation of the financial means for Poland within structural funds has both advantages and disadvantages. The years 2004-2006 focused on money being in the hands of national rather than regional institutions. The following budget years, i.e., 2007-2013 meant shifting financial means to local self-governments. This situation occured due to the fact that local authorities have better knowledge as far as regions’ needs and problems are concerned. Thanks to that they can be more effective locally and as a result they ensure each region develops faster.
4. Implementing System of the European Social Fund
In 2004 Poland became a Member State of the European Union and consequently a beneficiary of the structural funds. As a consequence, Poland is obliged to follow the EU guidelines for implementing and accounting for the financial means. The Polish government had to create structural policy and administrative and legal systems that would respect rules and
regulations of the Union and would conform to Polish Law. Among the many decisions that had to be made regarding implementation of the ESF, the following are the most important (Ministerstwo Pracy i Polityki Społecznej, 2001: 50):
• Division and delineation of competences between the managing institutions for operational programmes,
• Division and delineation of financial competences, • Expected delegated powers,
• A division into support areas implemented mainly horizontally and regionally, • Priorities’ details (within support areas).
Already before Poland joined the EU, many specialists were concerned that efficiency and skills of public administration at the local and central level would be the most important determinant of ESF funds absorption. For this reason, the pre-accession period should be used by public administration at different levels as well as Beneficiaries to develop such legal and institutional structures that support efficient absorption of funds, while facilitating implementation and co-operation between public agencies and regional social partners (Grewiński, 2001: 260). In order to make structural help effective a special implementing system was introduced and the following institutions took part in it (see Fig. 1).
The implementing institutions appear to be the most important agents from the point of view of the economic subjects applying for support. For the Beneficiaries they not only manage but also monitor the whole process. They stay in touch with the above mentioned institutions during the whole project. The character of this relationship not only defines the realisation of European strategy for human resources development in Poland. It also determines the results of particular projects. Therefore a question that needs to be answered is whether the character of the relationship between the applicants and the implementing institutions can determine the projects’ effectiveness and whether it influences “willingness” to call for additional funds.
In the case of the above mentioned institutions, the structure of the mutual contacts is very complex and can be divided into two main phases. The first one includes all measures connected with the procedure of submitting and evaluating the applications for grants. The second phase is the completion of particular projects that received grants within particular projects and programmes. The first phase begins when the Implementing Institution announces the call for proposals for particular measures. The Applicant is obliged to provide both a paper and an
electronic version of the application within the deadlines set by the Implementing Institution. Some bureaucratic problems appeared already during that phase as the application needed to be submitted in original, signed by an authorised person, with three additional copies. Each of the copies should bear the stamp confirming its conformity with the original. In practice it meant stamping and signing approx. 400-500 pages of documents. It is important to realise that such regulations are not imposed by the European Union but result from the Polish legal system. A lot of implementing institutions have created their own methods and rules and they are used for all contacts with applicants. The next important yet troublesome issue is the obligation of filling in the application with the use of a special Application Generator. Its goal was to facilitate the whole procedure but it appeared otherwise.
Figure 1. Implementing System of the European Social Fund.
Source: based on: (Monitor Unii Europejskiej, 2004: 21-24; Ministerstwo Gospodarki i Pracy, 2004). Managing Authority Control institutions Financial management Intermediate Bodies
2nd Level Intermediate Body - implementing institutions
After the applications are submitted for measures (for both SOP HRD and 2nd Priority IROP the procedures are nearly the same) the formal aspects are verified. At this stage the Implementing Institution can reject the application or, in rare situations, ask for some corrections to be made. In the case that there are no formal mistakes, the application content is evaluated. Formal mistakes in an application may vary, including: a missing signature, late delivery (e.g., one day later than the deadline). Sometimes these mistakes are not made by the applicants but by the institution issuing such documents, e.g., a bank or an agency. It happens quite often that an application with very good content is rejected because of such minor defaults. It must be remembered that total costs resulting from the preparation of an application (such as expertise, surveys etc.) are covered by the applicant only. Therefore, a rejection of an application for the above mentioned reasons may cause stress and disappointment.
If an application was submitted by an authorised beneficiary, and it did not have any defaults that would make registration impossible i.e. both paper and electronic versions matched, it stayed in line with the call rules and regulations and was positively evaluated from the formal point of view, then it was passed on for the content related evaluation (Ministerstwo Gospodarki i Pracy, 2005: 41)
The content related evaluation of applications is done by the Evaluation Committee. The Committee consists of experts from the Implementing Institution. During the content related evaluation each application receives points. The maximum score is 100. All points referring to the above mentioned issues are evaluated. Approval for completion is given when the application “scores 60% of all possible points and when it scores 40% in individual points in content related evaluation (Ministerstwo Gospodarki i Pracy, 2005: 3).” The applications that score over 60 are approved for completion or they can be negotiated if the Implementing Institution grants lower amounts than they applied for. For the applications approved for completion the last phase of the whole procedure is signing a contract for granting between the Implementing Institution and the Applicant. Signing a contract equals granting the activities described in the application. It means specific obligations and formalities that must be followed by the applicant.
Grants for the goals described in the application are paid in tranches, meaning the applicants are not immediately in possession of the whole amount granted to them. Each time the amount is transferred to the applicant’s account after they apply for payment and the application is approved by the Implementing Institution. In practice it often means lack of liquidity towards
sub-contractors in the project. As a result, the applicants are often forced to cover such expenses from their own resources or to take loans from banks. The project must be completed according to the schedule irrespective of the above mentioned situations. Current accounting and granting of the project requires constant obligatory monitoring and reporting. It is important that it can be verified by the Implementing Institution. In the case of any discrepancies or mistakes the contract can be terminated or granting can be withdrawn.
Each beneficiary is obliged to monitor their project and to make reports, according to the contract and the Implementing Institution guidelines. The two areas that require to be monitored are: financing and scope and results of measures. It means that both interim and final reports must be provided. All reporting must be done following the Implementing Institution template (Ministerstwo Gospodarki i Pracy, 2005, 48).
Other Applicants’ obligations, sometimes quite laborious, include applying for the Implementing Institution’s permission for any, even minor alterations to the project. That refers to both content and budget. All alterations need to be provided in writing, explained and described in detail. They can be applied only after receiving the Implementing Institution permission. The Applicant is also obliged to store all relevant documents for several years.
As it can be seen from the descriptions above, the relationship between the applicants and the Implementing Institutions is very complex and formalized during all stages of the cooperation. The scope of applicants’ duties is very wide and their decision-making possibilities are very limited. If the Applicant fails to follow the rules and regulations set by the Implementing Institution it will result in legal sanctions resulting from the contract and in freezing the up-coming tranches. Such complicated and imposed structure of the relationship and a huge number of often troublesome obligations greatly endanger the effectiveness of the projects completed. Thus, it would be interesting to find an answer to the question whether the relationship between DWUP and PARP and their beneficiaries influences the quality of completed projects. Also it would be worth knowing whether these institutions are evaluated positively or negatively by the applicants.
5. Key conclusions from the survey carried out and further scientific suggestions
The research aiming at analysing the character of relationship between Implementing Institutions and Applicants was carried out in 2007 in the Lower Silesia region. The research was
divided into two phases – an exploration followed by an explanation. A database of all Lower Silesian entities that have completed SOP HRD and IOPR projects since 2004 was created as a result of a query on the Implementing Institution's web sites. This database was used for a random choice of entities for the main research. The explanatory phase was run with the help of questionnaires which aimed at creating a picture of the Implementing Institutions for the Applicants. The choice of institutions was done by random arbitrary purposive sampling (n=50) mainly due to the fact that the population of people working in institutions applying for European funds in the whole country, not only of the Lower Silesian region, is rather homogeneous. According to the prevailing guidelines they have the same scope of duties towards Implementing Institutions. The aspect in which they may differ is their profile and their legal personality. However, when they submit applications for granting to PARP or to DWUP their measures seem alike, concentrating mainly on education and trainings.
Throughout the whole process the Implementing Institutions stay in touch with Applicants, supporting them with granting for the projects but also monitoring and accounting for the whole process. The way in which Poland is going to make use of the available granting from the European Union greatly depends of the quality of this cooperation. Thanks to initiating numerous social and economic measures and thanks to the appropriate absorption of the granting, the economic and social development of the country will be enhanced. Undoubtedly, creating an effective system that would manage using and accounting the grants would be the key element in making use of support offered by the European Union. In Poland this system created a multi-level structure, very often inefficient for the purpose. As the research shows, the relationship between the Implementing Institutions and the Applicants is complex and very formal throughout the whole process. The process of completing measures connected with receiving grants is negatively perceived by the Applicants. More than 50% of the respondents did not receive tranches in due time and 85% of the respondents were forced to use their own financial means. Such a situation undoubtedly impedes project completion. In case of such entities as Higher Education Institutions, searching for financial support, however complicated, is possible. However, for nongovernmental organisations, which very often operate thanks to subventions, providing project liquidity from their own means may result in bankruptcy.
The Implementing Institutions very frequently change the prevailing documents (which are often unclear anyway) and this is also perceived by the respondents as impeding
effectiveness. The officers are very often unable to make independent opinions on the rules and guidelines which also cause many stressful situations. Respondents claim that the officers are often afraid of making a mistake and they lack decisive independence. As a result the officers may be perceived as incompetent. The next often mentioned problem is incoherent, unclear and overly restrictive regulations. They are difficult to interpret not only for the Applicants but for the officers from the Implementing Institutions. Most respondents see the simplification of existing regulations and decreasing bureaucracy as the chance to enhance the quality of services provided. Bureaucracy is perceived as disturbing during the whole communication process, starting from submitting the application right to its completion. Rotation of the employees of the Implementing Institutions was perceived as a negative factor by 88% of the respondents. According to the them, rotation is caused by insufficient salaries, too many duties and by better chances in private companies, where clerks become highly paid specialists in structural grants.
Help provided with filling the application forms is perceived as satisfying and appropriate. 94% of the respondents claimed, that informational materials offered by the Implementing Institutions are easily accessible and 65% saw them as reliable and all-embracing. The weak points of these materials were: too formal language and too general content. Over 70% of the respondents declared having received all-embracing information on the application form with regards to preparation and granting. However, nearly 30% of the respondents were dissatisfied with the content-related knowledge of the officers or their unwillingness or inability to interpret unclear regulations and guidelines. A lack of independence in decision-making among the clerks was often mentioned.
Generally, the Implementing Institutions clerks were evaluated positively, being accessible and rather customer-oriented. For over 50% of the respondents the division of duties among the clerks was clear, while 46% of the respondents saw the clerks as incompetent. Over 50% of the respondents said they can trust the information they receive from the Implementing Institutions. The others were of the opinion that uncertainties may mainly result from unclear regulations, lack of independence in decision-making and inappropriate procedures. All the above described “weaknesses” of the Implementing Institutions greatly impede the effectiveness of structural policy completion and hence delay sustainable development. As a result Polish entities are less able to absorb grants offered by the European Union and thus opportunities for socio-economic development of Poland are reduced.
Literature
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Ocena instytucji wdrażających fundusze strukturalne w świetle zrównoważonego rozwoju regionu
Streszczenie
Polityka strukturalna, zwana także regionalną polityką strukturalną, jest ukierunkowana na utrzymanie zarówno gospodarczej, jak i społecznej spójności w ramach rozwoju regionalnego krajów członkowskich, a jej główny cel stanowi zrównoważony rozwój wszystkich państw członkowskich przy uwzględnieniu aspektów ekonomicznych i społecznych. Niniejszy artykuł koncentruje się na strukturze zarządzania funduszami Unii na przykładzie Polski i opisuje przede wszystkim działalność instytucji wdrażających, które z uwagi na kontakty z projektodawcami uważa się za kluczowe w realizacji idei zrównoważonego rozwoju. Artykuł przedstawia również wyniki badań przeprowadzonych przez autorkę w 2007 roku. Ich głównym celem była ocena efektywności instytucji wdrażających na terenie Dolnego Śląska, a obejmowały one projektodawców wnioskujących o wsparcie w ramach poszczególnych programów operacyjnych i współpracujących z instytucjami wdrażającymi.
Słowa kluczowe: zrównoważony rozwój, polityka strukturalna, fundusze strukturalne, Unia Europejska, programy operacyjne, instytucje wdrażające, Dolnośląski Wojewódzki Urząd Pracy (DWUP), Polska Agencja Rozwoju Przedsiębiorczości (PARP).
