Proposal for a Council Decision on the use of interest from the European Development Fund to finance the cost of implementing the internal system of management for individual consultants working in the ACP states
Date: 2002-12-20
Institutions: European Commission
Subjects: ACP countries, European Development Fund, fact-finding mission, general budget (EU), personnel administration, servant (EU)

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 20.12.2002
COM(2002) 752 final

Proposal for a

COUNCIL DECISION

on the use of interest from the European Development Fund to finance the cost of
implementing the internal system of management for individual consultants working in
the ACP states

(presented by the Commission)

EXPLANATORY MEMORANDUM

1.

INTRODUCTION

To  meet  with  the  need  for  long-term  expertise  in  non-member  countries  in  receipt  of
Community aid, the Commission calls on individual consultants. These consultants carry out
technical  assistance  missions  outside  the  EU  in  the  framework  of  projects  within  the
administrations of beneficiary countries, including ACP countries, humanitarian assignments
(ECHO experts) and Commission Delegations.

The individual consultants given employment contracts by the Commission are recruited from
a  list  of  consultants  drawn  up  following  the  call  for  candidates  published  in  the  Official
Journal of the European Communities C 274 of 26 September 2000 and on the internet, this
call remaining open permanently.

At the end of 2002 the number of active individual consultants will stand at about 350.

Since  1998,  following  an  international  procurement  procedure,  two  companies  (GTZ  and
AGRER) were put in charge of supplying the administrative and logistic support related to the
sending  of  such  technical  assistance;  the  contracts  for  this  support  are  concluded  directly
between the Commission and the consultants concerned.

The  fixed  costs  of  this  system  of  technical  assistance  management  by  service  providers  are
covered  partly  by  the  budget  and  partly  by  the  EDF.  In  view  of  the  scale  of  technical
assistance  in  the  ACP  countries,  coverage  of  these  costs  using  interest  generated  by  EDF
funds was approved by Council Decision 98/461/EC of 13 July 1998.

the  system  for  managing 

The  renewal  of 
individual  experts  consultants  beyond
31 December 2002  in  its  current  form  would  contravene  Article  57  of  Council  Regulation
(EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the
general budget of the European Communities1 and the corresponding provision in the proposal
for  the  EDF  Financial  Regulation  (Article  15(7)).2  These  provisions  do  not  authorise  a
situation  whereby  external  companies  sign  contracts  and  make  payments  on  behalf  of  the
Commission.  Here,  however,  even  though  the  consultants  are  selected  and  recruited  by  the
Commission  and  contracts  are  concluded  directly  between  the  Commission  and  the
consultants, the two management companies do subsequently make payments3 and sign some
contracts4 on behalf of the Commission.

1

2

3

4

OJ L 248, 16.9.2002, p. 19.
Proposal  for  a  Council  Regulation  on  a  Financial  Regulation  applicable  to  the  9th  European
Development Fund (COM(2002) 290 final/2).
Remuneration  and  allowances,  insurance,  pension  funds,  travel,  transport  of  personal  effects  and
accommodation.
Contracts connected with the supply of professional logistics.

2

                                                
2.

INTERNALISATION  OF  THE  MANAGEMENT  OF 
CONSULTANTS

INDIVIDUAL

Therefore,  in  the  light  of  the  provisions  of  the  new  Financial  Regulations,  the  Commission
decided on 30 April 2002 to reorganise the system of management of individual consultants.
The solution adopted was to internalise management, starting on 1 January 2003.

This  internalisation  means  that  the  unit  of  the  EuropeAid  Cooperation  Office  currently
responsible for recruiting individual consultants and the European Community Humanitarian
Office (ECHO) will take over, in accordance with the agreement on the sharing of work and
responsibilities between the two departments, all operational and financial management in this
area.  It  also  entails  increasing  staff  numbers,  especially  for  the  administrative  work  of
drawing up contracts and dealing with various aspects of the consultants' rights: remuneration,
insurance, travel, logistics, and so on.

3.

COSTS AND FINANCING OF THE NEW SET-UP

The  total  cost  of  internal  management  by  the  Commission  of  all  individual  consultants  is
estimated  at  €2 500 000/year:  this  covers  the  cost  of  22  auxiliary  staff  at  headquarters  and
26 local staff in the Delegations to deal with all geographical areas.

For  programmes  covered  by  geographical  or  horizontal  budget  lines,  the  financing  will  be
charged  against  the  BA  budget  lines  in  strict  compliance  with  the  remarks  for  each  budget
heading. For EDF-financed programmes financed in the ACP countries, the financing will be
charged against EDF interest.

The scale of the contribution proposed by the Commission on the basis of the current volume
of  technical  assistance  for  management  of  EDF-financed  programmes  is  27%.  Staffing
accounts  for  €675 000  in  management  costs  annually,  i.e.  a  total  cost  of  €2 700 000  to  be
covered by EDF interest for the period 2003-2006.

4.

CONCLUSIONS

In  view  of  the  new  Financial  Regulation  applicable  to  the  general  budget  of  the  European
Communities,  and  in  particular  Article  57  thereof,  and  the  corresponding  provisions  in  the
proposal  for  the  EDF  Financial  Regulation,  the  Commission  to  decided  to  internalise  the
management of individual consultants.

In view of the need to continue to use the individual consultants system for the ACP area and
of the adequate amount of interest generated by EDF funds lodged with the paying agents in
Europe5, the Commission proposes that the Council decide to draw some €2 700 000 from the
interest generated by the funds deposted under the various EDFs for the purpose of financing
the cost of implementing the  internalised system  for managing  individual  consultants  in  the
ACP States.

5

In July 2002 total cash in the form of EDF interest stood at €27 488 698.

3

                                                
For  the reasons set out above the Commission  proposes  that the Council adopt  the  attached
Decision.

4

Proposal for a

COUNCIL DECISION

on the use of interest from the European Development Fund to finance the cost of
implementing the internal system of management for individual consultants working in
the ACP states

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community,

Having regard to the third ACP-EEC Convention,

Having  regard  to  the  fourth  ACP  Convention  signed  at  Lomé  on  15  December  1989,6  as
amended by the Agreement signed in Mauritius on 4 November 1995,7

Having  regard  to  the  Internal  Agreement  of  19  February  1985  on  the  financing  and
administration of Community aid, and in particular Article 9(2) thereof,8

Having regard to the Internal Agreement of 16 July 1990 on the financing and administration
of  Community  aid  under  the  fourth  ACP-EC  Convention  (hereinafter  referred  to  as  the
Internal Agreement on the 7th EDF), and in particular Article 9(2) thereof,9

Having regard to the Internal Agreement of 20 December 1995 between the Representatives
of the Governments of the Member States, meeting within the Council, on the financing and
administration of Community aid under the Second Financial Protocol to the fourth ACP-EC
Convention  (hereinafter  referred  to  as  the  Internal  Agreement  for  the  8th  EDF,  and  in
particular Article 9(2) thereof,10

Having regard to the proposal from the Commission,

Whereas:

(1) 

(2) 

6

7

8

9

10

Article 57 of the new Financial Regulation  adopted by  the Council on  25 June  2002
stipulates  that  the  Commission  may  not  entrust  measures  of  budget  implementation,
especially payments and recoveries, to external private-law bodies or organisations.

The  proposal  for  a  Council  Regulation  on  a  Financial  Regulation  applicable  to  the
9th EDF, which was drawn up conformity with the Financial Regulation applicable to
the general budget, does not allow external private-law bodies or organisations to sign
contracts or execute payment orders on behalf of the Commission.

OJ L 229, 17.8.1991, p.3.
OJ L 156, 29.5.1998, p.3.
OJ L 86, 31.3.1986, p. 210.
OJ L 229, 17.8.1991, p. 288.
OJ L 156, 29.5.1998, p. 108.

5

                                                
(3) 

(4) 

In order to comply with the new provisions of the Financial Regulations and anxious
to  improve  the  system  for  managing  individual  consultants,  the  Commission  has
internalised this management system, starting on 1 January 2003.

The financial resources required should be drawn from the interest generated on funds
deposited  under  the  different  EDFs  and  which  are  in  the  EDF’s  cash  accounts,  in
accordance with the Internal Agreements applicable to the 6th, 7th and 8th EDFs,

HAS DECIDED AS FOLLOWS:

Article 1

The sum of €2 700 000 shall be deducted from the interest on the funds deposited under the
various Funds in the cash accounts of the European Development Fund (EDF) to finance the
costs of internalising the management system for individual consultants working in the ACP
states and OCTs.

Article 2

This Decision shall enter into force on the day of its adoption.

Done at Brussels, […].

For the Council
The President

6

LEGISLATIVE FINANCIAL STATEMENT

Policy areas(s): management of EC-ACP aid

Activity: financing the management system for individual consultants working in the ACP
States with EDF interest

1.

2.

2.1

2.2

2.3

a)

BUDGET LINE(S) + HEADING(S): EDF INTEREST

OVERALL FIGURES

Total allocation for action: €2 700 000 million for commitment

Period of application: January 2003 - December 2006

Overall multiannual estimate on expenditure:

Schedule of commitment appropriations/payment appropriations (financial intervention)
(see point 6.1.1)

(€ million to three decimal places)

Year
2002

0

0

2003

2004

2005

2006

2007

Total

2.700

0.675

0.675

0.675

0.675

2.700

2.700

Commitments

Payments

b)

Technical and administrative assistance and support expenditure (see point 6.1.2) - Not
applicable - EDF financing

Commitments

Payments

Subtotal a+b

Commitments

Payments

7

c)

Overall financial impact of human resources and other administration expenditure (see
points 7.2 and 7.3) Not applicable - EDF financing

Commitments/
payments

TOTAL a+b+c

Commitments

Payments

2.4

Compatibility with the financial programming and the financial perspective

[X] Proposal is compatible with existing financial programming.

[...] Proposal  will  entail  reprogramming  of  the  relevant  heading  in  the  financial

perspective.

[...] Proposal  may  require  application  of  the  provisions  of  the  Interinstitutional

Agreement.

2.5

Financial impact on revenue

[X] Proposal  has  no  financial  implications  (involves  technical  aspects  regarding

implementation of a measure).

OR

[...] Financial impact - the effect on revenue is as follows:

(€ million to one decimal place)

Situation following action

[Année
n]

[n+1]

[n+2]

[n+3]

[n+4]

[n+5]

Prior
to
action
[year
n-1]

Budget
line:

Revenue

Revenue in absolute terms

Change in Revenue

3.

BUDGET CHARACTERISTICS - NOT APPLICABLE - EDF FINANCING

Type of expenditure

New

EFTA
contribution

Contributions
from
candidate
countries

Heading
Financial
Perspective

Comp/
Non-comp

Diff/ Non-
diff

YES/NO

YES/NO

YES/NO

No

8

4.

LEGAL BASIS

–  The Internal Agreement of 19 February 1985 on the financing and administration of

Community aid under the third ACP-EC Convention.

–  The  Internal  Agreement  of  16  July  1990  on  the  financing  and  administration  of

Community aid under the fourth ACP-EC Convention.

–  Internal  Agreement  of  20  December  1995  on  the  financing  and  administration  of
Community  aid  under  the  second  Financial  Protocol  to  the  fourth  ACP-EC
Convention.

5.

5.1

DESCRIPTION AND GROUNDS

Need for Community intervention

5.1.1

Objectives pursued

A desire to comply with the new provisions of the Financial Regulation adopted by the
Council on 25 June 2002 and to improve the individual consultants' management system
has led the Commission to internalise this management system from 1 January 2003.

5.1.2. Measures taken in connection with ex ante evaluation

Administrative and budgetary decision taken by the Commission at its 1565th meeting
on Tuesday 30 April 2002.

5.2

Actions envisaged and arrangements for budget intervention

The total internalisation of individual consultants' management, as well as fulfilling the
aim of complying with the new Financial Regulations, means that the specialised unit of
the EuropeAid Cooperation Office and the European Community Humanitarian Office
(ECHO) must take over, in accordance with the agreement on the sharing of work and
responsibilities between the two departments, all operational and financial management
of contracts, which will in turn require more staff.

5.3

Implementation arrangements

Appropriations will be made available to and managed by the Commission as part of the
devolution process, in accordance with the provisions of the Financial Regulation adopted
by  the  Council  on  16  June  1998  and  applicable  to  development  financing  cooperation
under the fourth ACP-EC Convention (OJ L 191, 7.7.1998, p. 53).

9

6.

6.1

FINANCIAL IMPACT

Total financial impact over the entire programming period

(The  method  of  calculating  the  total  amounts  set  out  in  the  table  below  must  be
explained by the breakdown in Table 6.2)

6.1.1

Financial intervention

Breakdown

2002

2003

2004

2005

2006

Total

Commitments in million (to three decimal places)

Action 1- Covering the
transition between the
current system and the
completely internalised
management system

Action 2- Running the
internal management
system

2.700

TOTAL

2.700

2.700

2.700

10

6.1.2.

Technical  and  administrative  assistance,  support  expenditure  and  IT  expenditure
(commitment appropriations)

[Year n ]

[ n+1 ]

[ n+2 ]

[ n+3 ]

[ n+4 ]

Total

[N+5 and
subs.
years]

1. Technical and
administrative assistance

a)  Technical  assistance
offices

b) Other technical and
administrative assistance:

- intra muros:

- extra-muros:

of which for construction
and maintenance of
computerised
management systems

Subtotal 1

2) Support expenditure

a) Studies

b) Meetings of experts

c) Information and
publications

Subtotal 2

TOTAL

11

6.2.

Calculation of costs by measure envisaged in Part B (over the entire programming
period)

(Where there is more than one action, give sufficient detail of the specific measures to be taken
for each one to allow the volume and costs of the outputs to be estimated.)

Breakdown

Commitments in € million (to the 3rd decimal place)

Type of
outputs
(projects,
files )

Number of
outputs

Average unit
cost

(total for
years 1…n)

Total cost

(total for years
1…n)

1

2

3

4=(2x3)

Action 1

- Measure 1

- Measure 2

Action 2

- Measure 1

- Measure 2

- Measure 3

etc.

TOTAL COST

(If necessary, explain the method of calculation)

12

7.

IMPACT ON STAFF AND ADMINISTRATIVE EXPENDITURE

7.1.

Impact on human resources

Staff to be assigned to management
of the action using existing and/or
additional resources

Description of tasks deriving
from the action

Types of post

Total

Number of

Number of

Permanent posts

temporary posts

Officials or

Temporary
staff

A

B

C

Other human
resources

Total

If necessary, a fuller description
of the tasks may be annexed.

Additional  support  staff  needed
at  headquarters  for  management
of  the  individual  contracts  of
consultants  working  in  the  ACP
countries

22 auxiliary
staff (B and C)

26 local staff

48 people

7.2

Overall financial impact of human resources

Type of human resources

Amount €

Method of calculation

Officials

Temporary staff

Other human resources

(give budget line)

Total

13

7.3

Other administrative expenditure deriving from the action

Amount €

Method of calculation

Budget line:

(number and heading)

Overall allocation (Title A7)

A0701 - Missions

A07030 - Meetings

A07031 - Compulsory committees (1)

A07032 - Non-compulsory committees (1)

A07040 - Conferences

A0705 - Studies and consultations

… Other expenditure (state which)

Information systems (A-5001/A-4300)

Other expenditure - Part A (state which)

Total

The amounts are total expenditure for twelve months.

(1) Specify the type of committee and the group to which it belongs.

Annual total (7.2 + 7.3)

Duration of action

Total cost of action (I x II)

(in euro)

years

(in euro)

(In  the  estimate  of  human  and  administrative  resources  required  for  the  action,  DGs/Services
must take into account the decisions taken by the Commission in its orientation/APS debate and
when adopting the preliminary draft budget (PDB). This means that DGs must show that human
resources can be covered by the indicative pre-allocation made when the PDB was adopted.

Exceptional cases  (i.e. those where the  action concerned could not be  foreseen  when  the  PDB
was being prepared) must be referred to the Commission for a decision on whether and how (by
means  of  an  amendment  of  the  indicative  pre-allocation,  an  ad  hoc  redeployment  exercise,  a
supplementary/amending budget or a letter of amendment to the draft budget) implementation of
the proposed action can be accommodated.)

14

8.

MONITORING AND EVALUATION

8.1.

Monitoring arrangements

Headquarters will carry out regular internal controls to check the quality of contract management
and adherence to procedures.

8.2.

Arrangements and schedule for the planned evaluation

9.

ANTI-FRAUD MEASURES

15