To lose or not to lose the funds

Ever wondered who will be responsible for managing the EU funds that will come Malta’s way? Kurt Sansone meets Marlene Bonnici, head of the Regional Policy Directorate, and gets a glimpse of how the funds will be managed

In a country obsessed with the financial aspect of EU membership, Marlene Bonnici may probably turn out to be the most important person after accession.

She heads the Regional Policy Directorate in the Office of the Prime Minister. In simple words she is the person who will be responsible for the structural and cohesion funds allocated to Malta by the European Union.

It is not a light responsibility by any measure. The EU has strict regulations on how funds are allocated and spent. Not any project will do for EU funding and the country risks losing allocated money if programming is not conducted in a professional manner.

Marlene Bonnici, a former foreign office official with three years’ experience at the Brussels embassy, admits that EU funding cannot be spent frivolously.

After accession Malta will be getting EUR79 million in structural and cohesion funds for the first three years of membership.

Ms Bonnici explains that the allocated funds have to be spent on projects that collectively improve the quality of life. "This is called the integrated approach. We cannot use the funds to only build roads, or just to give grants to SMEs. There must be co-ordination between the different projects and collectively they have to leave a positive impact on the life of each citizen."

One thing is for certain: EU funds are not a blank cheque. "There are regulations and general policies that have to be respected," Ms Bonnici cautions.

The whole process has to be tackled in a structured way. She elaborates: "There are three principles to which we have to adhere to. The first one is that we have to make sure that money is not lost. The second is that EU regulations are not negotiable and the third principle is that within these constraints projects have to have an impact on every citizen’s life."

The maxim, do not put all your eggs in one basket, applies. A balance has to be sought between the different sectors that are eligible for funding.

"It is not easy because you need to allocate enough money for the implementing agencies to be able to do something tangible, while at the same time we know that managing EU Structural Funds is a new experience for all. Therefore we have to do our best to ensure that the money is neither lost nor not spent."

Ms Bonnici knows that achieving this balance is not an easy task because it is very complex for people to understand how the system works. Nonetheless, she is confident that her directorate and the civil service in general can rise to the occasion.

The test has already been surpassed during the pre-accession phase during which Malta benefited from EUR38 million. These funds were directly linked to Malta absorbing the requirements of the acquis. Ms Bonnici says: "The bureaucracy has not hindered the absorption of funds allocated to Malta. Malta has the highest rate of absorption of pre-accession funds from all the candidate countries."

She says that initially, ministries were hesitant in presenting projects for pre-accession funding. "Our European counterparts had told us that the initial stages were always characterised by hesitation. However now that there is a certain amount of experience within the administration, ministries were competing for projects to be funded." We now have strong co-operation from all Ministries.

Once set up, the Regional Policy Directorate started by informing the ministries of the EU regulations related to funding. In the pre-accession phase projects were based on the requirements outlined in the national plan for the adoption of the acquis (NPAA).

"Projects have to be clearly identified and no ‘waffle’ is accepted. Budgets have to be clearly outlined and the time period for completion has to be stipulated."

Ms Bonnici stresses that it is necessary to have an administrative structure in place within the implementing agency to champion the project. "It is useless allocating funds to a project when the structure to manage those funds is not there. It would simply be a waste of money."

She explains the procedure to get a project approved during the pre-accession phase. "The ministries submit their respective projects and a short-list of the more feasible projects is drawn up by the directorate. The respective ministries are then asked to defend their projects in front of a panel made up of representatives of the EU Commission, the ministry of finance and our directorate.

"A final short list is then drawn up and project leaders are asked to present a detailed project plan (template and guidelines are given by the Regional Policy Directorate). There can be no mistakes because they simply have to fill in the blanks. The project plan document is very easy and straight forward."

Ms Bonnici explains that pre-accession funding was mainly directed at helping government build its administrative capacity. Strong investment was made in customs, taxation, IT and training. Other examples include: Agriculture where funds were directed amongst others towards the setting up of a database, which is a necessary tool to be able to tap funds from the EU’s Common Agriculture Policy upon membership, rural development, environment, the Occupational Health and Safety Authority, maritime safety and data protection.

Is the civil service culturally oriented to this sort of rigidity?

Ms Bonnici is not fazed by the argument. "I think that in the pre-accession stage we did well. My directorate follows every Euro that is allocated to make sure that things are in line. We co-ordinate closely with the Ministry of Finance and the European Commission to ensure strict controls. After accession the Commission will be less present in the process because it is assumed that as a Member State, Malta would be more responsible and the process is managed by the national administration with the Commission only retaining ex-post controls. "We want to retain the present system of controls," Ms Bonnici says.

"I am confident that we can handle the funds. We will not lose them. It is a learning curve for all concerned. We have to know how to compromise to be able to achieve what we want while at the same time adhere to regulations."

The directorate will be the managing authority of the funds. She elaborates: "The responsibility will be ours to programme and spend the money. However, we have identified key people in each ministry to which we have delegated part of our function. I am confident that the ministries, especially the big spenders would rise to the occasion. Obviously, some are more geared than others."

The directorate is leaving no stone unturned and the programming for the post-accession funds has already started.

Ms Bonnici explains: "We have conducted a detailed socio-economic analysis of the Maltese Islands. It is a comprehensive analysis and identifies the needs of the country. Then we identified the strategies and priorities. Foreign experts and consultants will be brought over to carry out an ex-ante evaluation of the programme, that is to check the coherence between the identified needs and the priorities outlined in the second stage. Once the report is in we can start working on particular projects."

Without letting slip any intricate details of how the post-accession funds are to be spent Ms Bonnici says that a big emphasis is to be made on improving the quality of the environment especially waste management and water quality.

"Transport is another area where funds are to be allocated. Other areas are human resources development, vocational training and projects aimed at SMEs. Gozo will be treated as a priority in its own right."

Will Malta be able to spend the funds allocated?

Ms Bonnici explains that once funds are allocated for an approved project they must be spent in three years. "A project must be complete at the end of the third year (of its life-time) and this means that invoices would have to be issued and settled. Projects have to be chosen diligently. All risks have to be assessed to ensure that projects are completed within stipulated time frames. If, for example the construction of a road requires the expropriation of land, that project is unsuitable for funding because it involves going to court to obtain an expropriation. This is a high risk factor and so the project would not even be considered – at least not for this period."

Malta being an Objective One country, the EU will finance up to 75 per cent of the cost incurred to implement identified projects. However, Ms Bonnici explains that not all projects will be financed at the maximum rate. "In our case the maximum intervention rate by the EU hovers between 70 and 75 per cent – depending on the project."

How does she feel occupying such an important position?

"I am very honoured that government has placed its trust in me. I hope I will not disappoint anyone. But I must thank the team around me. The team consists of public servants, some of whom are recruits from other departments and some of whom are external recruits. All of the new officials are graduates and the Directorate is fluent in five EU official languages (English, German, French, Italian and Spanish). Without them I won’t be able to carry on with my work."