What is it and what is it for?

INFORMATION NETWORK.

In Spain, the management of structural funds is centralised in various ministries of the General State Administration (GSA):

• Ministry of Finance and Civil Service (with regard to ERDF).
• Ministry of Labour and Social Affairs (for ESF).
• Ministry of Agriculture, Fisheries and Food (which exercises its powers in EAGGF-Guidance and FIFG).

From Spain's point of view, each department acts as a central "node" of the network, interacting with the European Commission on the one hand and with the various beneficiaries of the aid on the other (Central Government, local and regional governments, and the private sector).

These central nodes are in turn closely interrelated to allow the consolidation and integration of the necessary information.

By increasing the level of functional detail, we can distinguish between different types of agent involved in the management of these Community funds:

• The Administrative Units of the ERDF, ESF, EAGGF-O and FIFG, which act in some cases as the Managing Authority and in others as the Paying Authority.
• The various Executing Agencies (Final Beneficiaries) of the aid, which must also contribute their own funding.
• Intermediate Organisations, which each contain a series of Executing Agencies.
• The Directorate-General of the Treasury and Financial Policy of the Ministry of Finance and Civil Service, which centralises the financial flows resulting from this management (payments received from Brussels and payments made to the final beneficiaries). This centralization is essential to guaranteeing that the different executing bodies and intermediary bodies are integrated into the system.
• The European Commission.

MAIN FEATURES OF THE SYSTEM.

The Community information system resides at the Secretariat of State for Budgets and Expenditure, which reports functionally to the Directorate General of Community Funds and technologically to the Budgetary IT services of the Government Comptroller's Office. It is composed of several modules, each designed for a specific purpose and interconnected through the relevant interoperability interfaces.

The above system is centralised at the Budgetary IT Production Centre of the Government Comptroller's Office (IGAE) and can be accessed by different users through three basic channels:

• Intranet, method reserved for users of the Secretariat of State for Budgets and Expenditure. In this method, the IGAE manages the "internal" network and the connectivity costs.
• Internet, i.e. through this public network and service providers on both sides (users and Budgetary IT). In this case, the users accessing the system must have digital certificates to confirm their identity.
• Extranet, using dedicated lines whose costs are borne by the Community Agent outside the Secretariat General for Budgets and Expenditure. Thus, it improves the response times of the solution above – and pays for the service. In this case, the communications of the parties must be managed by each in line with the standards set by Budgetary IT.

The system modules also have the following features:

• They run on Sun/Solaris computers, with iAS as the application server (which includes Apache as the web server), Reports Server as the print server and Oracle 9i as the database manager.
• They are developed with Java and PL/SQL.
• They only require a thin client. All of their features can be requested from a "standard" interface composed of HTML and PDF (in the latter case, exclusively for the formatted reports of the system).

Although each module of the Community system "physically" has a single database (and they all share the same manager), for "logical" reasons, three different types of database are simulated for the different user categories:

• The "Executing Agencies" database accessed by the Final Beneficiaries.
• The "Administrative Units" database used by public authorities.
• The "European Commission" database, of which Brussels is the exclusive client.

This allows for the simultaneous and parallel use of the modules by different users without undesired mutual interference, ensuring that any information entered in the system by an individual will only be made available to other authorised users when so requested by the former.

BASIC FUNCTIONS OF THE SYSTEM MODULES.

From an operational point of view, the Community system is designed to support the integrated management of the Madeira-Azores-Canary Islands programme 2000-2006, allowing:

• Initial multi-year programming of the structural funds and annual preparation of the cohesion funds (in both cases, of financial plans and physical and financial indicators).
• Entry of monitoring implementation, both financial and of physical and financial indicators.
• Financial management per se (this is an important topic that will be discussed in more detail later).
• The editing of official documents of the monitoring committees that are required to be held on a regular basis (at least annually) with the participation of all Community Operators involved.
• Re-programming and modification of the initial programming and drafting.

The data model implemented is extraordinarily complex but has the following basic characteristics in relation to structural funds:

• It distinguishes between Operational Programmes (OPs, or forms of assistance under Objective 1), Single Programming Documents (SPDs of Objective 2) and Programmes of Community Interest (PCIs) approved outside the Framework and charged to existing community initiatives.
• The preparation of the initial programming and its presentation to Brussels and subsequent approval are carried out at the level of the OPs, SPDs and PCIs, before being developed in a programme complement at a lower level and in greater detail (POMedida and ICMedida).
• Financial implementation and the implementation of indicators are entered at a (still) higher level of disaggregation (called Project, Operation or Action). At this level, we can distinguish between two basic types of project:
  • Infrastructure, which are similar to budget investments.
  • Aid, which are closely related to public subsidies (in the rest of this article, the term "aid" will be used to refer to aid in its strict sense and to the funds used to finance infrastructure).

As explained above, the EU system allows for the complete financial management of Community aid, which simultaneously gives coherence to the system, encourages the integration of Executing Agencies, and constitutes its most critical aspect. The adjoining chart indicates the main milestones in the management of structural funds implemented in Fondos 2000:

• The Executing Agencies (also called "Final Beneficiaries") capture the implementation of co-financed projects in the system.
• Based on this information, the Intermediate Organisations issue certificates, which they send (through the system) to the Administrative Unit
• This Unit, in its capacity as Managing Authority, generates the statements of expenditure and reimbursement requests, which it sends to the Commission electronically and on paper with a handwritten signature.
• The Commission sends the funds to the Treasury and the aid is transferred to the relevant account located in the Bank of Spain.
• Subsequently, the relevant Administrative Unit, as the Paying Authority, organises the distribution of the funds among the various Final Beneficiaries who participated in the generation of the Community aid and sends the non-budget payment order proposal to the Treasury, on the basis of which the Treasury transfers the funds to the Final Beneficiary of the aid..

Hence, the financial management is "bottom to top" (disaggregated information to aggregated information"), from the implementation of the projects to the request for reimbursement made to the Commission and its receipt by the Treasury. After this point, the direction is "top to bottom" (aggregated information to disaggregated information).

The financial management also takes into account returns and refunds (as cash deposits or through compensation), and financial "adjustments" due to various causes (implementation failures, error correction, reprogramming, financial corrections, etc.).

In other words, in a single form of intervention (which can be likened to an Operational Programme), various Executing Agencies from diverse Authorities and Sectors can take part: Central, Regional and Local Government, State Undertakings, Private Enterprise, etc. The implementation performed by each of the Executing Agencies, initially entered separately, must subsequently be aggregated, since the statements of expenditure and reimbursement requests presented to the Commission must be made at Operational Programme level, which is also the level at which the Community aid is received.

Thus, after the funds have been paid into the Treasury, they must be split in order to transfer to each Executing Agency the corresponding part based on its participation in the implementation that resulted in the transfer from Brussels.

The procedure is complex due to the possibility of "decertification" (or implementation failures), errors and, most importantly, reprogramming and the imposition of financial corrections by the Commission, which affect the initial financial plans and the resulting implementation, both essential for calculating the transfers to the Final Beneficiaries.

MAC 2000-2006 is governed by the reimbursement principle, and the Community aid is granted when the actual implementation exceeds certain percentages of the annual amounts of the approved financial plans.

Therefore, when the financial plans or stated implementation are amended for the reasons indicated above, the reimbursements made to the Executing Agencies often have to be altered too. This is usually done by generating the necessary adjustments in the system, which must be cancelled in the future "by compensation" when management continues. This procedure is adopted to avoid having to request cash refunds from the Agencies.

INTERACTION WITH EXTERNAL SYSTEMS.

As is logical, the Community system described above is essentially aimed at supporting the management carried out by the Directorate-General of Community Funds of the Ministry of Finance and Civil Service, and is not intended to cover the varied and complex cases of all of the Agents that participate in the process.

Therefore, these agents must have their own specific systems which the Treasury regards as external to its own. Since much of the information fed into the database of the Community system is already stored in these external systems and the information of the Community system has to be transferred to these latter, a number of processes have been developed and implemented for the exchange of information between them.

Besides the specific transactions of the various modules described, standard data exchange formats have been defined to allow information to be uploaded from files outside the system.

To use this procedure, the different users need to enter the Community system and select the file they wish to upload from their local network environment. They must then "undergo" the necessary validations to ensure the integrity and consistency of the information they wish to store in the database and confirm that it is not redundant, before actually uploading the file.

The downloading of information from the Community system to feed into external databases can be performed using a similar procedure, i.e. by generating a standard file that the user requesting the download can save to his/her network environment for subsequent processing.

All of the data exchange formats are "open" (TXT, XML, etc.) to avoid the use of proprietary "extensions" (XLS, MDB, etc.) that would require the system users to have certain office automation products. This criterion also applies to the system's interoperability interface with its clients.