This chapter assesses how Managing Authorities and other organisations in the Management and Control System are strategically poised to get the most from European Structural and Investment Funds. Three elements in particular are examined: whether organisational arrangements and procedures are “fit-for-purpose” to carry out their roles; the mechanisms for knowledge management in order to build and maintain institutional capacity over time; and the capacity for resource flexibility in order to adapt to changing strategic needs and circumstances.
Strengthening Governance of EU Funds under Cohesion Policy
Administrative Capacity Building Roadmaps
OECD Multi-level Governance Studies
Chapter 3. Strategic, agile and responsive Managing Authorities
Abstract
Introduction
The challenge for public sector organisations today is to align policies across organisations and units to meet strategic objectives and public expectations; as well as to anticipate and plan for future needs and challenges and redeploy resources quickly as needs change (OECD, 2015[1]). The same is true for implementing European Structural and Investment Fund (ESIF) programmes and projects: an evidence-based, forward-looking strategy that prioritises objectives and corresponding funding streams should be in place; programming and project selection should be aligned accordingly; and processes and procedures should facilitate the effective, timely and integral execution of projects. Management and Control System (MCS) and Managing Authorities (MAs) must be structured in ways that are conducive to implementing strategic objectives, with the right arrangements, processes, systems and tools. The role of leadership in ensuring these elements are in place is tantamount (Figure 3.1).
Figure 3.1. Agile, fit-for-purpose organisations
Source: Authors’ illustration
Fulfilling these steps is a colossal undertaking, with governments having established complex “institutional machineries” to achieve objectives in compliance with European Commission regulations and deliver the best value-for-money for society. These include not only the institutional arrangements of MCS, but also the core set of policies underpinning their oversight and management functions: public procurement rules, internal control and audit oversights, budgeting and financial management procedures, monitoring and evaluation exercises, and of course human resources management (HRM) rules and practices.
This pillar of the diagnostic framework, therefore, sought to assess how MAs and other MCS organisations were strategically poised to get the most from Cohesion Policy funding. Three elements in particular were examined: whether organisational arrangements and procedures were “fit-for-purpose” to carry out their roles; the mechanisms for knowledge management in order to build and maintain institutional capacity over time; and the capacity for resource flexibility in order to adapt to changing strategic needs and circumstances.
Ensuring organisational structures and procedures are fit for purpose
A country’s MCS, including MAs, is the “machinery” that public administrations use to deliver on their ESIF-funded development policies effectively. The European Union (EU) has issued extensive Guidance on ESIF, including on the set-up of MCS (European Commission, 2014[2]).
However, countries still have discretion in how MCS and MAs are organised. The OECD does not support a single “best practice” in terms of organisational set-up of public administrations (nor of MAs), respecting the different missions, activities and contexts of governments and cohesion strategies. At a minimum, administrations should be able to demonstrate, however, that they are organised in ways that avoid duplication and fragmentation of tasks; respect integrity (i.e. with sufficient accountability mechanisms and “arms-length” institutions to provide objective, independent oversight); and with adequate horizontal and vertical mechanisms for information-sharing and communication (OECD, 2019[3])
Also, while it should be emphasised that the European Commission and MCS clearly attribute functions to MAs and Intermediate Bodies (IBs) (at least in writing), in practice the application of these rules becomes less concrete. For example, when exceptional or project-specific problems occur, who should be responsible and how the problem should be addressed may not be well laid out in the MCS.
With regards to organisations’ management policies and procedures, rationalisation is key. The OECD’s Recommendation on Regulatory Governance supports “smart” regulation over “red tape” that can work against achieving goals effectively and efficiently (OECD, 2012[4]). Given the number of regulatory dimensions involved (from supranational to local), as well as the number of functional areas (HRM, budgeting, internal control and audit, public procurement), rationalisation and clarity can be difficult to achieve.
Complex institutional arrangements, including cumbersome processes and procedures, are perceived by stakeholders as hindering effectiveness and agility
The complexity of institutional arrangements was raised by several, though not all, MAs. In most cases the root or cause of the challenges were from the adoption of structures for historical reasons rather than for current or future needs. Common issues reported included:
Complex institutional architectures in terms of the number of actors and hierarchal layers, causing uncertainty over roles, potential duplication and fragmentation, and a tendency for disconnects between “front-line” and “back-office” expertise meant critical knowledge about beneficiaries, projects, etc. did not feedback into management and strategy processes;
Internal functional arrangements (of teams, units) caused duplication in tasks and uneven workflows and burdens amongst staff;
Ineffective, weak or underused coordination mechanisms (working or thematic groups);
Excessive and misaligned oversight mechanisms (too many external oversight actors), causing not only duplication but delays.
Concerning issues raised around specific processes and procedures, this was cited in all MAs and at all levels, from personnel to beneficiaries and external stakeholders. Many of these issues included:
Lack of clarity in regulatory texts, and a lack of practical guidance (guidelines, manuals, etc.) for interpreting regulations accurately and consistently. Beneficiaries in particular faced the largest hurdles in accessing and applying regulations;
Lack of coherence between supranational, national, and local regulations;
Lack of consistency in the interpretation of regulations in ex-post audits and evaluations, at times requiring financial adjustments and losses for projects.
In short, while internal regulations for MAs and beneficiaries are considered “necessary evils” that must exist to ensure effectiveness, value-for-money, and integrity; if not developed and carried out correctly they can have the adverse effect of causing delays and increased costs. Moreover, they create a rigid set of constraints where MAs cannot adapt to changing externalities, such as changing societal needs, changing market conditions (including labour market conditions), changing or evolving technologies, etc. Ultimately, beneficiaries and citizens pay with unused funding, delays, or poorly-executed projects.
Ensuring structures are fit-for-purpose and simplifying processes and procedures
The Roadmaps highlight several actions for re-evaluating current structures in light of strategies and objectives. Roadmaps do not prescribe a “best practice” in terms of how MCS and MAs should be set-up, but rather focuses on analysing where existing issues of duplication and fragmentation lie, and considering a better balance of workflows and workloads across entities in the system. These analyses should also examine the current communication channels among entities in the MA/MCS, as well as regular coordination platforms where they can summarise lessons-learned from the exceptional/unusual cases and minimise the ambiguity in daily operations.
When recalibrating or refining the roles and mandates with respect to Operational Programme (OP) implementation is needed – from the strategic design process to project monitoring and evaluation – it is essential to consult and coordinate with all relevant actors. Proper analyses should be undertaken, based on internal and external discussion with IBs and beneficiaries to determine the actual needs, costs and benefits of any proposed adjustment(s). For example, when should dual IB/beneficiary functions be eliminated and how to accomplish this? To what extent should certain monitoring functions be contracted out? When the process is fit-for-purpose, it could alleviate some of the pressure on the MA staff, facilitate OP administration, and enhance the management of the investment cycle. In those cases where municipalities act as IBs and beneficiaries, adjustments to tasks or responsibilities could free up limited local authority resources by enabling them to concentrate on one function.
Table 3.1 below highlights some possible actions identified by the five MAs participating in this pilot project, and their stakeholders, to address complex organisational structures.
Table 3.1. Sample Action Table: improve the agility of MAs
The complexity of rules and procedures (for HRM, audit, procurement, financial management, etc.) were raised universally across the MAs. They are perceived as perhaps one of the most important hindrances to productivity, and were a source of frustration for many. Actions related to these challenges are discussed more in Chapter 5 since, in the majority of the cases, changes required legal reforms which were outside the control of MCS and MAs. However, there are actions for MAs that are within their remit of influence, namely about providing more support to staff in the form of manuals, guidelines, and training (including induction training), to help staff as much as possible. In some Roadmaps, the innovative action (also featured in Chapter 5) of audit committees in order to establish more consistency in the interpretation of rules and procedures could, over time, help MCS and MA staff avoid unnecessary delays and losses. Intranets and other knowledge management tools centralising regulations in one place, with Frequently Asked Questions (FAQs) and other resources, also aim to support staff learn about and correctly apply procedural rules, and are discussed further in the following section.
Improving knowledge management and information sharing in the MA and MCS
Managing complex programmes such as OPs for ESIF requires, and generates, a great deal of information. Information related to rules and procedures, calls and proposals, project implementation and evaluation can all contain valuable insights that can help inform the work of all sectors within the MA and the broader MCS. This suggests a challenge related to systematic knowledge management: to improve the way MAs generate, organise, store and disseminate information so as to improve institutional memory, share knowledge internally and with external partners and stakeholders.
All organisations face challenges with knowledge management. This is because knowledge tends to be accumulated in small work units, or even in the heads of individuals, without being transferred to the wider organisation and made useable by others. This can often be seen in areas such as problem solving. Problems faced by certain individuals in an MA have likely also been experienced by others within this MA or among other MAs in the same MCS. Without effective knowledge management processes, each of these problems is a major challenge to productivity as they require starting from the beginning, rather than building on the accumulated experience of the MA. It can also present a problem for the MAs stakeholders and beneficiaries if they are not getting consistent information or solutions to the challenges they face.
Common tools used to improve knowledge management can include formal systems and informal networks. Information and Communication Technology (ICT) systems can be used to track MA activities and generate insights into work processes. They can function as an internal knowledge bank, where employees can find answers to their questions and build on the experience of others. On the informal side, staff mobility and networking can provide ample opportunities for sharing knowledge as long as organisational incentives promote knowledge-sharing behaviours.
Internal communications and information-sharing mechanisms could be strengthened
MAs tend to recognise the importance of internal communications and knowledge management. It was a core area that emerged in all of the workshops conducted as part of this pilot action. In most MAs, there was a sense from employees and others that jobs and roles in managing ESIF appear to be fragmenting into tasks and siloed work streams, requires more effective IT tools and communication structures to ensure coherence and productivity in operations.
The challenges related to knowledge management and internal communications are intrinsically linked to the challenges in organisational design highlighted earlier in this chapter. The more dispersed the operations of the MA are, the bigger the challenges with knowledge management. In MAs with many IBs, for example, there is a much greater challenges to ensure a common understanding of process, and to enable a common approach to information management. This is particularly challenging when these IBs are units in other agencies and ministries who may have their own knowledge management standards and procedures that may not align to those of the MA.
In one MA, which provides a useful example, it is often the responsibility of individual sectors to carry out the calls for proposals, to select projects, to reach out to beneficiaries and reply to their queries, to oversee the payment of funds and monitor the implementation of projects, etc. In short, they are on “the front line” of project implementation with considerable responsibilities. In these departments, however, few if any “specialists” in ESIF funds management exist. Some of these departments have assigned dedicated staff, with expertise in the specific rules and regulations governing the use of European Regional Development Fund (ERDF), to these projects, but others assign personnel on an ad hoc basis, often because there are insufficient staff to have dedicated resources. However, this practice, combined with often changing rules and regulations, resulted in a failure to build institutional knowledge and expertise in ESIF management over the longer-term. The MA has established an informal network of “contact points” in these departments, but more could be done to formalise, support and recognise personnel in these roles.
This is also a challenge in MAs where multiple units do similar kinds of work, such as those divided by sector or fund (e.g. European Social Fund vs ERDF). A recurring theme in stakeholder interviews at one MA was the lack of a harmonised team culture across the formerly separate parts of the MA, resulting in an inability to develop joined-up solutions to effectively manage the MA as one coherent organisation with common practices and organisational culture. This lack of organisational harmonisation was perceived to risk duplication of effort, miscommunication, and in some cases frustration as different teams allegedly approach key reporting requirements with differing degrees of urgency and method.
Similarly, MAs with central and regional presence have to ensure knowledge is shared among all the units in effective ways that enable an appropriate level of standardisation across all regions and between the central and local operations. One MA with various regional offices has created OP implementation guidelines and provided instructions to stakeholders, however information sharing is formal and centres on questions raised by IBs and beneficiaries and formally submitted (in writing) to the corresponding MA department. This approach can ensure clarity in response, but there does not appear to be a mechanism in place to share the knowledge imparted among the different regions and thereby enable them to answer more questions at source. In addition, the approach can cause delays in project implementation as formal written communications can take longer than informal but equally enlightening conversations. More flexible and responsive mechanisms for internal and external communication are needed, including between the MA’s central and regional operations.
ICT systems and intranet sites exist in most MAs, and aim to provide some level of common information. However these were recognised by staff as being less effective than intended. In one MA, staff reported that they had to feed the same information into three separate IT systems to establish a correct audit trail. This illustrates an issue that appeared to be a challenge across all MAs. In another MA, staff involved in conducting internal audit have to ask relevant departments for specific documents rather than being able to access a central repository of documents required for audit, suggesting that the existing system is not meeting its full productivity potential.
When ICT systems exist, they tend to be under-used and ill adapted to the day-to-day realities of the MA’s operations. In some cases, the ICT systems are designed by central coordination authorities in order to track MAs, rather than with the intention of facilitating MA knowledge management and sharing. In an ideal system, both of these objectives would be facilitated by one system, however this was rarely the case.
MAs are also using a range of committee structures and systems to enable knowledge sharing, usually among the executive management groups. While regular management team meetings across MAs and within the broader MCS are essential, there was often a sense that these tools were less helpful at the operational level. Employees suggested that important information was slow to trickle down to operations levels, and often felt powerless to raise issue and questions that could benefit from discussion in these kinds of bodies.
ICT systems and informal technical or thematic working groups could better be exploited to facilitate communication and information-sharing
No matter what organisational structure exists, divisions will always need to be overcome through effective knowledge management activities. As mentioned at the start, these may include formal mechanisms – usually structured ICT systems with operational protocols, supported by formal committees for information sharing and communications – and informal tools, such as networking opportunities across MAs and mobility schemes which can have a positive benefit on information sharing (discussed previously).
In cases where MAs work with a wide range of ministries and agencies, networks of contact points in those entities could be formalised and professionalised by establishing a distinct Community of Practice (CoP) comprised of staff working on ESIF funded projects. At a minimum, it would facilitate the sharing of information, offer continuity and improve knowledge management over time, as well as further professionalise the management of ESIF either through training of existing staff and/or recruitment of staff. Different forms of CoPs could fit different contexts. They may include the mapping of skills and competencies needed so that members can be trained together, building the community further.
Another common suggestion that emerged from the diagnostic phase of the Roadmap development process was for the creation of centralised electronic platforms for personnel working on ERDF-financed projects. These platforms could take many forms depending on the MA’s starting point. Ideally the content would be developed and tested jointly by the MA staff and the broader stakeholder community, including the National Coordination Authority, IBs and representatives of beneficiaries.
Whatever the final format of the platform, a platform can not only be a centralised location of essential information (i.e. rules, regulations, etc.), but should incorporate practical tools for project managers. These could include, for instance, a FAQs section, a user-created internal Wiki, guides, manuals, templates, calendars, contact points, consultants database, audit planning calendar and past audit decisions, etc. Given that such a tool would have benefits for all MAs and actors in a given MCS, this may be best developed centrally with input from various MAs across the system to ensure common standards and content.
The Greek MA has recently developed a new ICT system that is intended to enable greater harmonisation across its different sectoral operations and has the potential to support greater knowledge sharing and thereby improve the harmonisation of the MA. The work of the MA is supported by an Integrated Document Management system1 recently developed to replace the previously operating intranet which was used for the daily communication between the staff and the Units, as well as between the Staff and the Management level of the MA. This system is a complete and integrated platform for the electronic management, digital signature and distribution of documents and handling of business processes, within a unified philosophy, compatible with the European regulatory framework with regards to document management and advanced qualified signature. Communication is a fundamental input to a harmonised culture. A practical approach to improving information and knowledge exchange could include a mechanism such as this, dedicated to recording problem-solving and decision-making processes or histories. This electronic platform could be expanded for knowledge dissemination is another option. Ensuring accessibility and proper use across the MA’s sectors and units is fundamental, as is ensuring it is regularly maintained and updated.
The rollout of such a system can, in itself, be an opportunity for communication and knowledge management by integrating face-to-face learning, networking and exchange as a priority in the planning and operational development of the MA. In that sense, group trainings and workshops could help to generate common understandings around project management processes, and exchange around working cultures in the different sectors and/or different functions with the MA and the broader MCS.
Table 3.2 below highlights some possible actions identified by the five MAs participating in this pilot project, and their stakeholders, to make the most of internal communication and knowledge flows.
Table 3.2. Sample Action Table: making the most of internal communication and knowledge flows
Addressing resource flexibility through better workforce planning and mobility
In order to put strategic agility into practice, governments need to be able to quickly and flexibly reallocate resources from one priority to another. MAs are aware more than anyone that implementing ESIF projects does not always go according to plan. While an excellent strategy and planning process might be in place, unpredictable external factors can arise (economic downturns, elections, environmental challenges, etc.). Project managers reported during the diagnostic phase that unexpected issues often occurred – a shortage of suppliers to contract, price changes, unexpected (high or low) interest to certain calls for proposals, etc. Managers often found themselves in situations where they had to either fast-track or delay projects, but were met with high resistance from “the system” in terms of moving and shifting financial and human resources as needed. In short, strategic agility was lacking.
Many governments have greatly increased budget flexibility in recent years by decentralising the budget process and giving line ministries more freedom to manage their own resources. This practice provides line ministries with the means to reallocate resources between programmes under their sectoral responsibility. This decentralisation of responsibility has helped align the incentives for ministries to better manage their budgets and to innovate in order to make the best use of limited resources. Moreover, in recent years countries have facilitated managerial flexibility by permitting other practices including: re-appropriations within the same fiscal year (transferring funds between programmes or line items); allowing carry-overs (the shift of unused appropriations to future fiscal years); and the borrowing against future appropriations (spend their appropriation for the year in the knowledge that they will be able to borrow from next year’s appropriation if unexpected spending needs arise) (OECD, 2014[5]). However, as explained in the following section, these conditions have been restricted following the economic crisis.
Resource flexibility is not only about budgets, but also about ensuring that the right human resources can be acquired, developed, and deployed in line with shifting priorities. Strategic Human Resource Management (SHRM) means going beyond narrow conceptions of Human Resource Departments as mere transactional providers of administrative services relating to traditional HR operations such as recruitment and payroll. Over time, units adopting a SHRM model can build an evidence base to inform targeted interventions aimed at mobilising the right resources, skills and competencies and directing them where they are most needed – now and in the future.
MAs reported considerable difficulties in shifting (human and financial) resources where and when needed
As mentioned, MAs reported constraints in financial and human resource flexibility that limited their agility and capacity to respond to changing circumstances. It also ultimately limits the absorption of funds. In some MAs, recent fiscal austerity measures (increased top-down controls from Ministries of Finance) meant difficulties in re-appropriating funds in situations where projects were delayed. For example, if a project was delayed, managers felt they were unable to shift funds to another project or carry-over funds to future fiscal years for the initially planned project. Interestingly, some of these constraints may be perceived rather than actual. While MAs maintained the perception that budgetary rules were rigid, auditors and Ministries of Finance argued that flexibility measures were in place yet not used. It may that a lack of communication, a lack of training, or the high complexity of approval procedures are limiting the adoption of some of these practices.
With respect to human resources procedures, MAs also reported a lack of flexibility. Following the crisis, fairly recent reforms to downsize or limit the growth of the public service workforce through hiring freezes, coupled with constant pressures to contain costs and increase value for money, have limited the capacity of MAs to manage human resources in a more strategic way. This stemmed from hiring freezes that did not allow MAs to recruit the required skillsets needed, but also from rigid procedures that did not allow the re-assignment of personnel to match work demands across institutions. Staff seemed to sit in rigid hierarchies for many years with unclear promotion prospects and opaque criteria around the possibility and value of internal mobility. Furthermore, in some of the MAs, there appeared to be a lack of formalisation around job roles and hierarchical levels across MCS/MA systems, which resulted in people doing the same work but for different pay. This also limited mobility since standard roles and pay scales did not facilitate the movement of people across organisations within the MCS. Ultimately, these constraints limited the ability of MAs to carry out effective workforce planning. This approach to HR management – as a reactive process rather than a forward looking process – relegated HRM professionals to administrative roles rather than strategic roles.
Strategic workforce planning
The OECD’s Recommendation on Public Service Leadership and Capability (see Chapter 2) is based on a strategic orientation to Human Resources Management. For example, one principle recommends that OECD countries develop, “a long-term, strategic and systematic approach to people management based on evidence and inclusive planning.” This includes evidence-based assessments of skills needed and skills available to meet current and future core business requirements; setting strategic direction and priorities with input from relevant stakeholders; ensuring alignment with organisational strategic planning processes and including appropriate indicators to monitor progress, evaluate the impact of HR policies and processes, and inform decision-making.
The second pillar of the same Recommendation also sets out a series of principles that are particularly relevant at an organisational level, such as an MA. They begin with an assessment of the skills and competencies needed to achieve the objectives of the organisation today and into the future. Once identified, the organisation can align its processes and policies to attract qualified candidates with these skills, recruit them using transparent criteria and objective selection methods. These skills can also be assessed among existing employees through well-calibrated performance management tools, and used to inform a strategic approach to learning and development. As such, many of the Roadmaps include actions for skills gaps and competency assessments as a starting point for workforce planning mechanisms.
Strategic HRM is key to align people management with the strategic goals of public sector organisations. It allows governments to have the right number of people at the right place and with the right competencies. Such practices not only help governments meet strategic objectives, but also increase efficiency, responsiveness and quality in service delivery. Strategic HRM also encourages governments to look to the future, thinking strategically about the right mix of people and skills that will be needed to respond to changing societal needs. Common elements for strategic HRM are included in the OECD’s composite index for this variable (Figure 3.2), and include such practices as: the systematic evaluation of HRM capacities; the inclusion of HRM targets/goals in senior managers’ performance evaluations; consideration of changing social needs in workforce planning; and the consideration of outsourcing possibilities in workforce planning (Box 3.1).
Figure 3.2. OECD Strategic HRM composite index
Note: Data for Japan, Luxembourg and Mexico are not available.
Source: 2010 OECD Survey on Strategic Homan Resources Management in Central/Federal Government, (OECD, 2011[6]).
Box 3.1. More effective workforce planning
Tracking staff numbers in itself does not constitute workforce planning, rather it is only one facet of workforce planning. Workforce planning requires an accurate understanding of the composition of the public administration’s workforce, including skills, competences and staffing numbers in the immediate, medium and longer term and how to cost-effectively utilise staff to achieve objectives. Generally, workforce planning models are comprised of similar elements, including:
defining the organisation’s strategic direction;
scanning the internal and external environments;
understanding the current workforce;
assessing future workforce needs;
identifying gaps in the required numbers and capability;
developing and implementing strategies to close the gaps; and
monitoring the effectiveness of strategies and revising them as required.
The time horizon for planning activities should cover in the short term, i.e. 0 to 2 years; the medium term, i.e. 3 to 5 years; and the long term, 6 to 15 years. However, in terms of workforce planning, long-term sector-based planning (e.g. the health sector workforce) should ideally extend to 30-year projections.
The efficiency and effectiveness of the public administration and of public service provision is greatly dependent on the effective use and deployment of its human resources. Workforce planning can elevate HR activities into a more strategic domain and ensure their relevance by providing greater awareness and control over staff numbers and costs, and better understanding of the required skills mix to ensure effectively targeted HR strategies.
Source: (OECD, 2012[7])
Mechanisms for mobility are also found in several Roadmaps. For example, in the MA where staff were managed in parallel structures, a frequent observation was that different parts of the MA were busy – to the point of being overloaded – at different parts of the programming cycle. A natural solution was to propose that staff with expertise in one area – preparing calls for tender, for example – move between teams temporarily and apply their expertise on projects funded through a different ESIF stream in order to ease the burden on their colleagues. Secondary benefits to such internal mobility would also include facilitating the cross-pollination of ideas and using secondments as an engagement and motivational tool. The possibility to facilitate secondments already existed and it had been used occasionally on an ad hoc basis. Yet, it had not been conceived of as strategic possibility, i.e. as a tool that, with appropriate investment and planning, could benefit the MA in the long run and make a tangible difference to day-to-day operations and work-life balance.
Finally, Strategic HR management cannot stay within the HR community but must also be embraced across an MA’s management team. Therefore, networking and learning opportunities about strategic HRM are also encouraged in the Roadmaps. For example, in some MA’s there is a sense that the HR community is fragmented and not sharing the type of information needed to provide a coordinated approach to people management across the MA, and/or across the agency that houses the MA. Regular meetings around certain strategic HR themes can provide a forum to discuss common challenges, share success factors, and coordinate responses.
Table 3.3 below highlights some possible actions identified by the five MAs participating in this pilot project, and their stakeholders, to address resource flexibility.
Table 3.3. Sample Action Table: improving resource flexibility in MAs
Introducing greater managerial flexibility in budgeting processes
As mentioned earlier, in several of the participating MAs financial flexibility has been restricted as part of austerity measures in place following the crisis. Spending ceilings and rules concerning the re-allocation of funding during the fiscal year have meant that, as priorities change or project delays occurs, implementing institutions are not able to shift funds as needed. Figure 3.3 below, for example, shows how austerity measures put in place following the crisis reduced managerial flexibility in many ministries through the requirement of approvals (usually from Ministries of Finance) for the carry-over of funds.
Figure 3.3. Carry-over regimes in 2012 and 2007
Source: (OECD, 2014[5])
Roadmap actions pressed MAs to discuss directly with Ministries of Finance how to improve budget flexibility for their projects, especially now since in many countries rules were beginning to ease. The possibility of setting single budget lines or envelopes for ESIF-funded projects was raised (see also Chapter 5). Overall however, better initial project planning and cost-estimates should be prioritised in order to avoid spending deviations if at all possible. Often this required more training of project managers (Chapter 2) on industry-standard methodologies. Finally, improved strategy and programming processes (Chapter 4) would also reduce unexpected issues for project managers, since there would be greater clarity in project selection and goals from the outset.
References
[2] European Commission (2014), Guidance for Member States on Designation Procedure, https://ec.europa.eu/regional_policy/sources/docgener/informat/2014/guidance_ms_designation_en.pdf.
[3] OECD (2019), Draft Policy Framework on Sound Public Governance, https://www.oecd.org/governance/policy-framework-on-sound-public-governance/.
[1] OECD (2015), Achieving Public Sector Agility at Times of Fiscal Consolidation, OECD Public Governance Reviews, OECD Publishing, Paris, https://dx.doi.org/10.1787/9789264206267-en.
[5] OECD (2014), Budgeting Practices and Procedures in OECD Countries, OECD Publishing, http://dx.doi.org/10.1787/9789264059696-en.
[4] OECD (2012), Recommendation of the Council on Regulatory Policy and Governance, https://www.oecd.org/gov/regulatory-policy/49990817.pdf.
[7] OECD (2012), Slovenia: Towards a Strategic and Efficient State, OECD Public Governance Reviews, OECD Publishing, Paris, https://dx.doi.org/10.1787/9789264173262-en.
[6] OECD (2011), “Strategic human resources management” in Government at a Glance 2011, OECD Publishing, http://dx.doi.org/10.1787/gov_glance-2011-22-en.
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