Operating Guidelines For the LEADER Programme Funds Programmes/European... · 2018-11-29 · Rural...

Rural Development Programme (2014-2020) – Operating Guidelines for the ‘LEADER’ Programme

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Operating Guidelines

For the

LEADER Programme

Version 1.4

29/11/2018

Drawn up by the Managing Authority, EAFRD

Funds and Programmes Division, MEAE, Ministry for

European Affairs and Equality


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Glossary of Terms, Abbreviations and Acronyms

Term, Abbreviation and

Acronyms

Meaning

Administration Costs The administration costs of LAG’s may be up to a maximum of 25% of their total public

expenditure of the Local Development Strategy (as per Article 35 (2) Support from the ESI Funds

for community-led local development of Regulation (EU) No 1303/2013)

Agreement The Agreement between the MA and LAG’s under the sub-measures of M19

AOB Any Other Business.

ARPA The Agriculture and Rural Payments Agency Malta

CB The certifying body (IAID)

CMEF ‘Common Monitoring and Evaluation Framework’: a general approach developed by the

European Commission and the Member States defining common indicators relating to the

baseline situation and the financial execution, outputs, results and impacts of the programme;

DC The Decision Committee (DC) is the body elected according to the stipulated clauses in the

statute between the founding members of the LAG. The DC is responsible for the decision-

making processes related to the implementation of the Local Development Strategy.

EAFRD The European Agricultural Fund for Rural Development, a single fund which provides financial

support for rural development across Europe.

EC Evaluation Committee within the LAG’s.

ENRD European Network for Rural Development

EU European Union.

Grant The funds allocated by a LAG to the selected LAG beneficiaries

IMU Investments Measures Unit within the ARPA.

IT Information Technology.

IAID Internal Audit and Investigations Department

CRPD Commission for the Rights of Persons with Disability

LAG The Local Action Group (LAG) is a broad-based local public-private partnership with the aim of

improving the long-term potential of the rural region. The LAG is selected to implement a Local

Development Strategy.

LEADER Liaison Entre Actions de Dévelopement de l'Économie Rurale’ - ‘Links between the rural economy

and development actions’.

The LEADER Programme refers to the implementation of the actions included in the Local

Development Strategies by the Local Action Groups to address specific local issues in line with

the Rural Development Programme for 2014-2020.

/continued


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Term, Abbreviation and

Acronyms

Meaning

LDS A Local Development Strategy (LDS) is the strategic plan submitted to the MA for which the LAG

has set the rural development objectives and a number of actions pertaining to the territory

represented by the LAG.

MA The Managing Authority of the RDP 2014-2020

Measure A set of actions and operations within the Rural Development Programme

NACE ‘Nomenclature Générale des Activités Économiques dans les Communautés Européennes’ -

European Classification of Economic Activities.

NGO Non-Governmental Organisation.

NRN The National Rural Network for Malta, which will provide a range of services and support for

those involved in the delivery of the Rural Development Programme for Malta.

OG’s The Operating Guidelines for LAG’s issued by the Managing Authority

ORB Other Relevant Business.

PSAB Project Selection Appeals Board.

PSC Project Selection Committee (for the Rural Development Programme)

Project An operation or activity, which has been the subject of an application for grant aid.

Project Applicant An operator, body or firm, whether public or private applying with the Local Action Group for

grant aid under the Rural Development Programme through the LAG’s.

Public Funding The European funding and Government funding made available to the LAG’s and LAG’s

beneficiaries for the implementation of the LDS.

RDP Rural Development Programme 2014-2020.

VAT Value Added Tax.


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Contents

Glossary of Terms, Abbreviations and Acronyms ................................................................................................ 2

1 Preamble .............................................................................................................................................................. 8

1.1 Introduction ..................................................................................................................................................... 8

1.2 Objectives ........................................................................................................................................................ 9

1.3 Interpretation of the OG's ............................................................................................................................. 10

1.4 Activity 2014-2020 ........................................................................................................................................ 10

1.5 Review of LDS and Action Plans .................................................................................................................... 10

2 General Matters ............................................................................................................................................ 11

2.1 Area of Operations ........................................................................................................................................ 11

2.1.1 Beneficiaries under M19.2 .................................................................................................................... 11

2.2 Equal Opportunities ...................................................................................................................................... 11

3 LAG Operations .................................................................................................................................................. 12

3.1 Outline of Responsibilities of the Local Action Group ................................................................................... 12

3.2 Decision Committee ................................................................................................................................... 13

3.2.1 Project Selection ........................................................................................................................................... 13

3.3 Evaluation Committee ................................................................................................................................... 14

3.3.1 EC Roles and Responsibilities ................................................................................................................ 14

3.4 LAG Manager ....................................................................................................................................................... 15

4 Execution by the LAG ......................................................................................................................................... 16

4.1 Rates of Aid ................................................................................................................................................... 16

4.2 Measure 19 ................................................................................................................................................... 16

4.2.1 Rationale ............................................................................................................................................... 16

4.2.2 Objective ....................................................................................................................................................... 17

4.2.3 Eligible Activities ................................................................................................................................... 17

4.2.4 Implementation Procedures ......................................................................................................................... 17

4.2.5 The following provides in-depth details of some of the above implementation procedures to be followed

by the LAG. ............................................................................................................................................................. 18

4.2.5.1 General Provisions ................................................................................................................................ 18

4.2.5.2 Commitments of Aid ............................................................................................................................. 19


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4.2.5.3 Preparation of Guidelines and Application Form including Manual for EC & Appeals Board .......... 20

4.2.5.4 Communication and Publicity ........................................................................................................... 20

4.2.5.5 Publication of Call, Receipt and uploading of Applications on System .................................................. 21

4.2.5.6 Administrative and Eligibility Checks, including Rejection of Applications ........................................... 22

4.2.5.7 Evaluation of the application and Presentation of Reports to the DC, including appeals procedure.

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4.2.5.8 Ranking of Projects and Selection Process, notification to applicants and necessary updating of

IACS 24

4.2.5.9 Appeals window open and appeals lodged with Chairperson of appeals board .............................. 25

4.2.5.10 Letter of Offer and Letter of Acceptance ..................................................................................... 26

4.2.5.11 Contracting of Selected Beneficiaries by the LAG, including possibility of Advance payments to

LAG Beneficiaries ............................................................................................................................................... 26

4.2.5.12 Monitoring and Control of Projects by the LAG ................................................................................... 27

4.3 Measure 19.4 Running Costs, Skills & Animation ......................................................................................... 32

4.3.1 Rationale ............................................................................................................................................... 32

4.3.2 Objective ............................................................................................................................................... 32

4.3.3 Eligible Activities ....................................................................................................................................... 32

4.3.4 Eligibility of Running Costs ........................................................................................................................ 34

4.3.5 Running Costs Budget ............................................................................................................................... 34

4.3.6 Employment .......................................................................................................................................... 34

4.3.7 Attendance ........................................................................................................................................... 35

4.3.8 Financial/Other Charges and Legal Expenses ....................................................................................... 35

4.3.9 Rental Agreements................................................................................................................................ 35

4.3.10 Fuel and Mobile Phone for LAG Manager ......................................................................................... 35

4.3.11 Procurement Procedure ................................................................................................................... 36

4.3.12 Payment Procedure, including interim payments ............................................................................ 36

4.3.14 Evidence of Title/Leasehold/Rent/Proof of use or access .................................................................... 36

4.3.15 Technical Assistance ............................................................................................................................. 36

4.3.16 Marketing by the LAG ........................................................................................................................... 36

4.3.17 Training ................................................................................................................................................. 37

4.3.18 Leasing .................................................................................................................................................. 37


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4.3.19 Bank Interest ........................................................................................................................................... 37

4.3.20 VAT ........................................................................................................................................................ 37

4.8.20 Ineligible Activities ..................................................................................................................................... 37

5 Controls .............................................................................................................................................................. 38

5.2 EU and MT Controls and Inspections ......................................................................................................... 39

5.3 Exclusions and Deductions ......................................................................................................................... 39

5.4 Sanctions, Penalties and Deductions ......................................................................................................... 40

5.5 Recovery of Grant Aid ................................................................................................................................ 40

6 Reporting ........................................................................................................................................................... 40

7 Procurement ...................................................................................................................................................... 41

7.1 Payments ................................................................................................................................................... 41

7.2 Bank Accounts ............................................................................................................................................ 42

8.1 General Documentation and Inventory ..................................................................................................... 42

8.2 Inventory .................................................................................................................................................... 43

8.3 Project Documentation .............................................................................................................................. 44

8.4 Other Documentation ................................................................................................................................ 45

8.4.1 Minutes of Meetings ............................................................................................................................. 45

9.1 Eligibility Queries ....................................................................................................................................... 46

9.2 VAT and Taxation ....................................................................................................................................... 46

9.3 National Rural Network (NRN) ................................................................................................................... 46

9.4 Seminars/Training Organised by the LAG ...................................................................................................... 47

9.5 Overseas Travel .......................................................................................................................................... 47

9.5.1 Agenda ...................................................................................................................................................... 47

9.5.2 Subsistence Allowance .............................................................................................................................. 47

9.6 Political Activities ............................................................................................................................................. 48

9.7 Fraud and Risks ................................................................................................................................................ 49

9.7.1 Fraud ............................................................................................................................................................. 49

9.7.2 Preventive Actions ........................................................................................................................................ 50

9.7.3 Detective Actions .......................................................................................................................................... 50

9.7.4 Effective and proportionate anti-fraud measures ........................................................................................ 51

9.8 Inter Ministerial Co-Ordination Committee (IMCC) ......................................................................................... 52


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Tables

Table 1 - Rates of Aid 5

Table 2 - Financial Allocation 16

Table 3 - Eligible Items: Measure 19.4 36

Table 4 - Guarantee Amount 39

Table 5 - Relevant Regulations 52

Table 6 - Localities Covered by LAGS 53

Table 7 - Inventory Table 69

Table 8 - LAG Project approval 89

Table 9 - Employment Checklist 125

Table 10 - Per Diem Allowance 158

Figures

Figure 1 -Programme Stakeholders 11

Figure 2 - Implementation Circuit for Open Calls under Measure19 30

Figure 3 -Measure 19 and 19.3 LAG Projects 33


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1 Preamble

1.1 Introduction

The scope of the OG’s is to set out the administrative and operational procedures, for the selected LAG’s, based on

EU and National regulations. These set out the general guiding principles for LAGs in their delivery of Measure 19

of the RDP; LAG’s are required to observe such principles. The MA shall provide any clarifications sought by the

LAG’s vis-a-vis the interpretation of these principles; likewise, ARPA will provide feedback to LAG’s on assessment

of eligibility of costs. In case there is lack of agreement on the interpretation of these guidelines the decision of the

MA will be considered as final.

The guidelines may be updated from time to time at the discretion of the Managing Authority, also having regard

to the European Commission's guidelines for the Programme.

These OG’s and the respective Grant Agreement for each LAG cannot be viewed in isolation but are linked to the

Rural Development Programme for Malta 2014-2020, which was approved by the European Commission on the

26th November 2015, and which may be amended from time to time. The RDP has been prepared and managed in

accordance with the provisions of Council Regulation (EC) 1305/2013 on support for rural development by the

European Agricultural Fund for Rural Development and Commission Regulation (EC) 808/2014. Reference should

also be made to EU Reg 1306/2013. In case of any arising conflicts, the RDP, the National and EU regulations will

supersede the principles outlined in this document.

The aim of Measure 19 is to prepare and implement Local Development Strategies consistent with the Programme.

The LEADER approach will comprise of:

Area-based local development strategies, developed and delivered by LAGs as approved by the PSC;

A bottom-up approach to the implementation of the local development strategies;

The implementation of innovative approaches;

The implementation of co-operation projects1; and

The networking of local partnerships.

1 Reference should also be made to ENRD document, ‘GUIDANCE FOR IMPLEMENTATION OF THE LEADER CO-

OPERATION ACTIVITIES IN RURAL DEVELOPMENT PROGRAMMES 2014-2020’ [last updated 19/11/2014]

https://enrd.ec.europa.eu/sites/enrd/files/20141119_leader_cooperation_guide_2014-20.pdf

https://enrd.ec.europa.eu/sites/enrd/files/20141119_leader_cooperation_guide_2014-20.pdf


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1.2 Objectives

The main objective of these OG's is to serve as guidelines for the LAG Manager, LAG Decision Committee members

and any other relevant stakeholders on how the LEADER Programme under the RDP shall be administered by the

LAG’s.

Being a set of guiding principles, these intend to reduce ambiguity in the implementation of the LEADER Programme

by harmonising certain procedures across the approved Local Action Groups.

The OG's are categorised into a number of specific chapters with separate yet inter-related objectives.

Chapter 1 encompasses a general introduction on key conditions pertaining to these guidelines, followed by the

overarching objectives of the document, interpretation of the guidelines and context for reviewing the Local

Development Strategy.

Chapter 2 expands on certain general matters including the area of operations applicable to each LAG and an equal

opportunities policy in the assessment of applications.

The objective of Chapter 3 is to give an overview of the roles and responsibilities of the key bodies forming the LAG

structure including the LAG as a legal entity, the Decision Committee, the Evaluation Committee and the LAG

Manager.

After giving an overview of the specific rationale and conditions of the measures applicable by the LAGs, Chapter 4

aims to comprehensively guide the LAG on the procedure to be followed in the execution of the strategy and

Chapter 5 gives an overview of the controls to be implemented.

Chapter 6 identifies the reporting procedures that are expected to be followed by the LAG including inter alia

reporting project implementation, administration reporting, reporting infringements, procurement, and the

mechanism to be followed for the submission of a payment claim and the bank accounts that shall be held by the

LAGs.

Chapter 7 refers to the Procurement Procedure.

Chapter 8 seeks to stress on the importance of maintaining proper documentation, filing and archiving. It also

guides the LAG on how these are to actually take place.

Chapter 9 encompasses other operational issues and conditions, including the grant aid ceiling and de-minimise,

taxation, the importance of innovation, information, publicity, and the National Rural Network (NRN), which can

all have an impact on the implementation of the LEADER Programme.


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1.3 Interpretation of the OG's

In remote circumstances of an unforeseen conflict between the OG's and National and EU regulatory requirements,

the RDP, the National and EU regulatory requirements shall take precedence.

Any changes deemed appropriate by the MA to these OG's will be notified to the LAGs. The MA may also, from

time to time, consult with LAGs, with the ARPA or with the CB regarding additions, revisions or amendments to the

Rules. The MA shall have the power to amend the applicable guidelines accordingly.

The LAG and the MA shall agree on the date as from when the changes will be deemed effective.

1.4 Activity 2014-2020

Grants signed between the LAG and its beneficiaries shall ensure completion of the projects in time for the LAG to

submit to the MA and/or ARPA any documentation linked to the closure of the LDS implementation period2.

With regards to the LAG service and supplies’ contractors, these shall cease to be eligible for funding in time for

reimbursement (in line with ARPA Payment MOP) to be completed by 31st December 2023.

1.5 Review of LDS and Action Plans

In case the LAG wishes to amend and review the LDS and/or Action Plans, as approved by the PSC/MA, including

budget shifts, unless otherwise guided, the LAG has to submit such request to the MA following the respective DC

approval. Depending on the level of deviation from the original LDS, the MA will decide and guide the LAG

accordingly. Such decision/guidance by the MA may include varying approval procedures, such as:

direct approval by the MA or

approval through the PSC.

2 The LDS implementation period may be revised by the MA throughout the RDP programming period.


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2 General Matters

2.1 Area of Operations

With the exception of inter-territorial and trans-national activity, each LAG shall only seek to support actions that

are implementable within the geographic area as identified in the LDS.

2.1.1 Beneficiaries under M19.2 Eligibility of potential beneficiaries of respective LDS actions shall be established by the LAG in the respective LDS,

and further detailed in the calls’ guidelines linked to said actions.

Each LAG is required to accept applications from natural/private/NGO bodies and LAG Members (Local Councils

and Public Authorities where applicable) regularly operating or providing a service within the geographic area

covered by the LAG, as outlined in the respective Action eligibility criteria. Such eligibility criteria should in no way

be linked to LAG membership.

Local Councils should be strongly encouraged to maintain active membership and involvement in the LAG

operations to ensure successful fulfilment of the LDS both at the level of the LAG as well as for the benefit of the

said locality/ies.

In line with the above, the LAG will be responsible to verify the admissibility of the applications at the time of the

call.

It is being clarified that the LAG cannot be a direct beneficiary of M19.2.

2.2 Equal Opportunities

Besides observing legal obligations, the principle of equal opportunities should be enshrined in the overall

operations of the LAG and due consideration is given during the selection of the projects.


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3 LAG Operations

This chapter provides an overview of the operations of the LAG and the roles and responsibilities of the processes

required to execute the LDS.

3.1 Outline of Responsibilities of the Local Action Group

The Local Action Group (LAG) is responsible for devising and implementing the Local Development Strategy in line

with the Rural Development Programme of Malta 2014-2020 and in line with any guidelines provided by MA.

LAG’s are to also ensure that tasks and roles as indicated by Article 34 of EU Reg 1303/2013 (and more specifically

sub-article 3) are adhered to. LAGs shall also create ECAS account and maintain updated profiles for SFC access.

Without prejudice to the tasks outlined in Article referred to above, LAGs are expected to:

Follow the Local Development Strategy (LDS) as approved and the detailed action

plan (as approved);

Act as the administrative actors for the implementation of the approved Local

Development Strategies including but not limited to issuing calls for proposals,

receipt of applications, evaluation of applications, monitoring of project

implementation and the satisfactory performance of the whole process;

Monitor, verify, filter and check payment claims submitted by beneficiaries prior

to handing same to PA;

Such monitoring and checks are not only linked to desk based checks but it is also

expected that LAG’s perform regular site visits, and keep records accordingly, to all

approved project sites;

Make complete, full and timely use of the electronic platform dedicated to RDP

Measures, including LEADER Measure;

Be responsible for the animation of the LAG territory;

Report progress on the delivery of the LDS to the MA when requested, including

through progress reports (MA may provide dedicated templates);

Ensure a continuous capacity build-up by providing the necessary training and skills

acquisition to the DC and LAG staff. The LAG is expected to attend training

organised by the MA during the duration of the implementation program;

Keep constant communication with the MA and provision of requested

information;

Maintain updated records of projects, beneficiaries and other operations in a

format that can be easily retrievable and handed as and when requested;

Attend and actively contribute towards meetings organised by the MA or other stakeholders;


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Provide Reports on the activities and progress towards the targets set by the respective LDS;

Contribute with writing of articles and delivery of presentations during any activity linked to the RDP.

3.2 Decision Committee

The DC of the LAG is the decision-making body in relation to all activities. All decisions taken during its meetings

must be formally recorded in the minutes.

All decisions will be made in conformity with the Commission Guidelines, EU regulations, National legislation, the

Rural Development Programme for Malta 2014-2020 and, the LAG’s Grant Agreement with the MA.

3.2.1 Project Selection

The role of the DC includes the assessment and review of all recommendations made by the Evaluation Committee

(EC, refer to section 3.3), giving points to each eligible project and eventually ranking and selecting the projects

together with the subsequent allocation of funding. Where the DC’s decision is not in accordance to the

recommendations made by the EC, reasons backing the decision must be documented. In cases where the Decision

Committee members, whether voting or non-voting members, have a conflict of interests, these cannot sit on the

selection board assessing that particular application. The Decision Committee has to appoint other independent

members as replacements. It shall be ensured that replacements do not carry any direct or indirect conflict of

interest; no remuneration through M19.4 should be applied to ad-hoc DC replacements.

The DC may be assisted by a Technical Expert, as selected and appointed by the DC, during the selection process.

Once the selection process is concluded, the Decision Committee will proceed to publish the preliminary result.

The Decision Committee will also need to set up an autonomous and independent appeals board. Any appeals

presented must be lodged with the Chairperson of the appeals board. No members from the evaluation committee

or decision committee can be nominated to sit on this board.

The outcome of the appeals process is final and cannot be altered by the Decision Committee. The Managing

Authority has the right to undertake checks throughout the process including verification of results and ensure that

a fair and transparent process has been undertaken. In case of irregularities identified by either the MA or the PA,

remedial actions can be taken; the LAG will also be requested to take the necessary actions from its end.

DC Manual should be available for the chairman to follow and to guide all members. All decisions taken must be

documented and comments should be included on the scoring sheet explaining how and why points have been

given.


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3.3 Evaluation Committee

The EC shall be appointed by the LAG and can be constituted by at least 2 members. This can include the LAG

Manager and a LAG Secretary.

None of the members of this committee hold any voting rights; both are responsible for administratively checking

the applications. An external Technical Expert may be contracted directly by the LAG where deemed necessary.

The Technical Expert’s role on the Evaluation Committee is to perform the Technical checks for each application,

where applicable and deemed necessary.

3.3.1 EC Roles and Responsibilities

The role of the Evaluation Committee is to make recommendations to the Decision Committee on administrative

and technical aspects of each application. This Committee shall prepare two reports for consideration by the DC:

an administrative report, together with a technical report to which the Project Assessment Sheet is to be attached.

The Technical Report may include, keeping in line with the respective scope and selection criteria of the specific

call/action, reference to verifiability of costs, feasibility of projects, reasonableness of costs, timing, addressing of

action objectives and indicators amongst others.

The Administrative Report should include an Administrative Checklist signed by the Secretary of the EC, who shall

be responsible for the first Administrative Checks, and then signed and verified by the LAG Manager who shall be

responsible to verify the first round of checks undertaken by the secretary.

The EC must also ensure that the quotations submitted with applications are valid, comparable, legitimate and

reasonable3.

Checks will be undertaken by the LAG to ensure that no other funding has been sought for the project proposals

presented.

3 The LAG can contact the MA for further guidance


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3.4 LAG Manager

The Manager of the LAG is responsible for ensuring the sound operational and financial management of the LAG

and the implementation of the LDS in line with National and European regulations and guidance, as well as MA

guidelines.

Duties of the LAG Manager are also set in the engagement process by the LAG.

It suffices to re-state that the LAG Manager shall prepare and present reports to the DC on inter alia, the

implementation of the actions identified in the LDS, on the administration of the LAG and other operating activities

carried out by the LAG for the scrutiny and discussion of the DC members during the DC meetings.

The LAG Manager shall also lead the evaluation process of applications.

He / She shall work closely with the Chairperson of the Decision Committee to ensure effective functioning of the

LAG and delivery of the Local Development Strategy.

The LAG Manager shall liaise with the Managing Authority whenever necessary and shall be available for meetings

with the Managing Authority. The LAG Manager shall submit documentation in relation to the LAG as requested by

the Managing Authority or Paying Agency and certifying body.

More details on the jobs and roles of the LAG Manager are included in Chapter 4 of this document.

The Manager of the LAG shall carry out his responsibilities with due diligence and in good faith.


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4 Execution by the LAG

4.1 Rates of Aid

The co-financing element and the aid intensity on projects under the respective measures shall be as follows.

Table 1 – Rates of co-financing and Aid Intensity

Measure Public Co-financing Private Co-

financing

Aid Intensity / Private

component

19.2– Implementation of the Local Development

Strategies.

75% 25% 80 / 20 %

19.3 – Inter-territorial and Transnational Cooperation

75% 25% 80 / 20 %

19.4 – Running Costs, Acquisition of Skills and Animation 75% 25% 100 / 0 %

Support for running costs and animation shall not exceed 25 % of the total public expenditure incurred within each

community-led local development strategy as per Article 35(2) 1303/2013.

4.2 Measure 19

Measure 19 – ‘Implementation of the Local Development Strategies’

4.2.1 Rationale

Measure 19 of the RDP provides an opportunity for Local Action Groups in Malta to implement a Local Development

Strategy (LDS) based on the real needs of their specific area. The LDS should be based on in-depth local consultation

and should highlight the key priority issues in the area and the means by which these needs can be addressed using

the partnership model.

The local actions identified by the LAGs must be complementary to the RDP and should contribute to the RDPs

horizontal and specific objectives.


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4.2.2 Objective

The objective of Measure 19.2 is to stimulate local actors to successfully implement actions and projects in line

with the targets and objectives of the developed for the region.

LAGs must focus on activities that meet the overall strategic objectives of the RDP. Measure 19 also seeks to

promote integrated approaches involving farmers and other rural actors. It can safeguard and enhance the local

natural and cultural heritage, raise environmental awareness, and stimulate investments in, and promotion of,

speciality products, tourism, and renewable resources for energy to name a few potential outcomes.

4.2.3 Eligible Activities

Funding will be provided for all eligible actions that have been approved within the Local Development Strategy,

subject to budget availability.

4.2.4 Implementation Procedures

1) General Provisions

2) Commitments of Aid

3) Development of guidelines and application form for call, including Manual for Evaluation Committee

and Appeals Board

4) Launch of publicity and information actions, including information sessions

5) Publication of call, preceded by a pre-call

6) Receipt of Application

7) Inputting of all Applications in IACS (prior to eligibility checks)

8) Administrative checks for any missing documentation and information

9) Notification to applicants for submission of missing documents

10) Rejection of application, failing to provide information / documentation required

11) Eligibility checks on admissible applications

12) Presentation of Evaluation Reports, checklists and relevant information to the Decision Committee

13) Selection concluded by the Decision Committee and preliminary ranking list published

14) Procedure to be adopted in case of conflict of interest

15) Letters notifying applicants of selection outcome

16) Notification to appellants of outcome

17) Appeals window open and appeals lodged with Chairperson of appeals board

18) Letter of Offer and Letter of Acceptance

19) Contracting of selected beneficiaries by the LAG, including possibility of Advance payments to LAG

Beneficiaries


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20) Monitoring and Control of project by the LAG, including on-the-spot check by LAG officials; records of

such checks to be maintained (including soft format). Ex-post checks on project to be carried out by

LAG up to the durability obligation period (for both investments and documentation)

21) Receipt and verification of beneficiaries’ payment claims by LAG prior to forwarding to ARPA

22) Processing of interim payments by ARPA

23) Support ARPA’s requests with additional information/documentation within stipulated timeframes

24) Upon completion of 80% of project (or as decided by ARPA) an on-the-spot check is carried out by the

Control Unit within ARPA

25) Once outcome of check is positive, ARPA to process final payment

26) Provide MA, ARPA and any other appointed body with ongoing and ex-post data and information

4.2.5 The following provides in-depth details of some of the above implementation procedures to be followed by the LAG.

4.2.5.1 General Provisions

The following criteria must be ensured in determining the eligibility of every project:

● That the proposal is consistent with the objectives of the Programme and the LDS.

● EU and National regulatory requirements.

● In line with the relevant section(s) of the guidelines of the respective call for proposals

● The availability of funding from other Government Departments, state agencies and others to ensure no

deadweight or double funding. If projects or project phases qualify for aid under other schemes and

programmes, they are ineligible for aid under the RDP. In their actions, LAGs and entities applying to the

LAG must always ensure to provide a clear rationale for requiring RDP support to avoid deadweight and

potential risks of double funding with programmes outside the RDP 2014-2020.

● All projects must be assessed for viability.

● That the proposal is consistent with the LAGs approved Local Development Strategy.

● That applicable State Aid acquis are respected.

● Each LAG must operate a scrupulously impartial and consistent system for processing applications. All

complaints and appeals should be dealt with expeditiously and courteously, whether they are considered

to be justified or not. The LAG must also co-operate with the MA/PA in relation to any complaints made

to it.


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● The LAG must operate in compliance with EU and National sectoral policies, Competition Policy, the

Common Agricultural Policy, and other National frameworks. The LAG must, therefore, acquaint itself with

the objectives of, and aid available under, other official programmes. In this regard, LAGs should maintain

close liaison with other development agencies by participating in the National Rural Network.

● Grant Assistance may be provided in respect of non-recoverable VAT. Written confirmation from the VAT

Department that the project applicant is not registered for VAT must be presented by applicant.

4.2.5.2 Commitments of Aid

A valid commitment of grant aid exists only when: -

● There is a formal decision by the Decision Committee;

● A detailed letter of offer and ideally a draft contract is issued to the applicant,4

● The offer or contract has been accepted in writing by the applicant within a period specified by the LAG.

● The commitment is only valid when abiding by these rules:

● Grant offers shall only be made in respect of the specified eligible investments and shall set out the

percentage aid level and grant amount ceiling in all cases. The reallocation of funds within a project may

only be done with expressed approval from all the relevant authorities. In this case the decision of the

LAG should be formally recorded in the relevant Decision Committee minutes and in the relevant project

file.

The LAG shall specify a closing date on all commitments/contracts in line with the specific guidelines of the call.

The purpose of the time limit is to prevent funds being needlessly tied up in projects that are not progressing. LAG’s

shall also include, in their contractual agreements (as also reflected in other documentation such as guidelines),

the penalties/recoveries linked to failure of projects to progress as per submitted schedule.

Project deadlines shall only be extended following recommendations and approval by the DC of the LAG. When the

project is being implemented by the LAG in case of TNC, the extension period has to be granted by the MA.

Project modifications shall only be approved following the approval of the DC, who shall re-assess the implications

of such modification to the selection of the project.

4 The same procedure should be undertaken if the applicant is the LAG.


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Funds committed may be revised by the LAG, MA or PA as a result of projects not progressing, or the inability of

the applicant to draw-down the full grant offered, with the result that such funding is committed to other projects.

Wherever necessary, the ARPA may recover funding disbursed from M19 beneficiaries.

If for any reason, the LAG or MA or PA consider it necessary to revoke a grant or part of the offer to a project

applicant, a letter (or email) should be issued informing the applicant that the grant has been revoked and the

letter should contain details of the amounts to be revoked, the timeframes by when this should be affected and

any other conditions. In case the contract was signed by the PA, approval for extensions should be issued by the

LAG.

4.2.5.3 Preparation of Guidelines and Application Form including Manual for EC & Appeals Board

Prior to launching the call for applications, the LAG manager has to submit to the DC for clearance the following, in

line with approved LDS:

The exact amount of budget that shall be committed to the particular call;

Measure Guidelines;

Measure Application

The eligibility and selection criteria;

The mechanism for an ‘open call’ procedure (unrestricted calls);

The time schedule for the call.

EC Manual of Procedures, including procedure for appeals.

Following DC clearance, copies of the above would have to be sent to the MA for information purposes. The MA

may provide feedback, however it is up to the DC to ensure compliance with procedures and alignment with LDS

and RDP.

4.2.5.4 Communication and Publicity

The LAG shall develop a communication and publicity plan which shall be made public on the LAG’s webpage. This

plan shall be forwarded to the MA for information.

The LAG shall implement communication activities, before the launching of calls for interested parties to apply for.

The publicity requirements of the calls are as follows:

Adequate pre-announcement of the calls to be issued (not more than 4 weeks);

Information sessions to be organised targeting potential beneficiaries, which information sessions shall be

publicised with the scope of attracting potential beneficiaries;


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At pre-launch or at actual call stage, the LAG shall publish an advert on a national newspaper. A request

for quotation from the national papers being circulated on the day (i.e. whether it is a weekday, Saturday

or Sunday) is to be sent asking for the cost and the circulation rate. The LAG can choose one or more, based

on the highest circulation;

LAG’s can issue joint adverts either for multiple calls within the same LAG and also across multiple LAG’s;

Prominent advert on the LAG website (Homepage);

On the notice-Board of the LAG within its office;

On the notice-Boards of the Local Councils within the territory; and

Any other publicity channels that may be deemed appropriate. The advertisements for the call should aim to

include the following information: -

Address and contact details of the LAG;

Title and reference number of the call;

Details of the expected outcome as defined in LDS ;

Deadline for receiving clarification requests and applications;

General co-financing rates;

Budget allocated to the call and

Logos of the European Union, of the Republic of Malta, of the LEADER Programme and of the Ministry for

European Affairs and Equality (MEAE).

This period may vary from measure to measure, and is to be determined and set by the LAG.

4.2.5.4.1 Assisting Applicants

There is likely to be a significant number of applications for each call, so the LAG must ensure that there is sufficient

time allowed for the LAG Manager to meet potential applicants as and where requested.

The LAG Manager and staff shall not fill in application forms on behalf of potential beneficiaries. All meetings and

telephone calls with potential and actual project applicants should be recorded on the corresponding meeting and

telephone report forms.

4.2.5.5 Publication of Call, Receipt and uploading of Applications on System

The LAG shall maximise publicity for each call in order to create the necessary awareness within the region.


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Applicants, must submit their application, together with the required supporting documentation as indicated in the

Guidelines for Applicants. The LAG shall create profiles for beneficiaries on the IACS system, where new profiles

are required and update profiles as necessary.

A receipt for the delivery of the proposal must be issued by the LAG or through the online system if one is available.

Should an online system be in place, the applications will be automatically uploaded in the IACS system.

4.2.5.5.1 Duration of Call

This period may vary from measure to measure, and is to be determined and set by the LAG. Open calls can also

be adopted.

4.2.5.6 Administrative and Eligibility Checks, including Rejection of Applications

As defined earlier in Chapter 3, ‘LAG Operations’, once an application is received, the Evaluation Committee of the

LAG will commence evaluating the submission and conducting administrative checks provided for under Article 26

of Commission Regulation (EC) No. 640/2014 to select eligible projects. The eligibility (and eventually, the selection)

parameters identified in the guidelines for applicants must be strictly respected. The aim of the administrative and

eligibility check process is to ensure/verify that:

Each application receives a file reference number, including a sequence number and date; ensure that the

application proposal fits within the scope of the measure;

Ensure that the same proposal was not previously presented for funding under other measures within the

RDP.

An application is considered correct and complete only if it contains all the required information requested

in the application form, together with all the obligatory necessary supporting documentation; obligatory

information be notified for rejection by the DC in writing;

Applicants with missing required information are given a maximum of 5 working days from the date of the

notification issued by the LAG to present the required missing documents or information. The

administration must maintain a system capable of tracking the process; should the applicant fails to

respond satisfactorily, the application be notified for rejection to the DC, and a rejection letter shall be

sent informing the applicant accordingly.

Any false or misleading information leads to the immediate rejection of an application.

An application is deemed to be eligible and moved to the selection process only if all the obligatory and

required information and annexes are satisfactorily submitted, through the DC.


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The above list is not exhaustive and the LAG’s are to ensure that the spirit of any National and EU regulations are

observed when checking applications, including procurement procedures.

Once the Administrative checks are completed by the Evaluation Committee, the latter shall continue the

evaluation of the proposals based on the selection criteria in order to identify whether the project proposed is

eligible for funding.

Whenever an application lacks crucial information for the evaluation process, it will be automatically disqualified

and rejected.

4.2.5.6.1 Eligibility

It is important that in each call, the LAG defines what information and documentation is considered:

Obligatory that must be included in the original submission

Required to be submitted within a pre-defined period of time.

It shall also include the period of time by when the required documentation shall be submitted, in line with the

Manual of Procedures of the EC.

4.2.5.7 Evaluation of the application and Presentation of Reports to the DC, including appeals procedure.

Evaluation of the application must be strictly carried out on the basis of the information as submitted by the

applicant. The Evaluation Committee may request clarifications; such clarifications submitted AFTER the closing

date of the application period SHALL NOT contribute to additional marks during evaluation. This to ensure that no

unfair advantage is given over other applicants that may have submitted the application in full within the deadline.

Any amendments to the content of the application, as requested by the DC, The LAG is to ensure that the trail and

order of correspondence is maintained.

The Evaluation Committee will prepare an administrative and technical report for each application including

recommendations for project funding or rejection. Furthermore, the LAG manager at this stage must also present

a report for the DC based on the deliberations of the Evaluation Committee. The MA may request details of the

entire process, including copies of reports.

The Decision Committee will initiate the selection process and once this is concluded, the Decision Committee will

proceed to publish the preliminary results.


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The Decision Committee will also need to set up an autonomous & independent appeals board. Any appeals

presented must be lodged with the Chairperson of the appeals board. No members from the evaluation committee

or decision committee can be nominated to sit on this board.

The outcome of the appeals process is final and cannot be altered by the Decision Committee.

Prior to the commencement of the selection process, and thereafter where any changes occur, each DC and EC

member including the Chairperson, and LAG Manager, shall furnish a declaration of impartiality that encompasses

all potential situations that may lead to a conflict of interest. .

It is being emphasised that a fresh declaration must be submitted prior to each selection procedure for each

separate call. This declaration of impartiality must pre-date the assessment of project selection.

4.2.5.8 Ranking of Projects and Selection Process, notification to applicants and necessary updating of IACS

The Decision Committee (DC) will carry out the ranking and selection of applications.

Based on the preparatory work of the EC, the DC members must carry out an initial review of the project and

identify any points that may need to be clarified with project applicants and/or other organisations, should it be

the case. Technical experts can be invited to provide an input.

The scoring sheet is to be completed by the DC, and signed by the voting members of the Committee (including the

neutral/independent person replacing the DC member that would have registered a conflict of interest)

participating in the specific call. The Chairperson shall only possess a casting vote which can be used in case of a tie

during voting. The DC must compile a list of projects ranked according to the assessment carried out.

The grant aid must be decided by the Decision Committee for each beneficiary. Once the final funding decisions

have been detailed, a report shall be published. The report will include:

Administrative report

Technical report

Administrative checklist

Eligibility checklist

Marking sheets

Preliminary ranking of project with the corresponding amount proposed for funding for each project

The above details must also be reflected and kept in soft version (word/excel/pdf or similar)

It is required that details of operations supported from the EAFRD are published. This information will be made

available on the website of the respective LAG. The publication must include:


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The provisional ranking prior to the appeals period

The final ranking list following the appeals period/procedure

Once the projects have been selected:

- The details of the selected project, including a brief of the operations; and

- The total amount of public funding received by the beneficiary for the particular project.

Once the selection procedure is completed, the LAG shall notify all applicants accordingly (both successful and

failed applications).

The LAG Manager shall ensure that all necessary details are uploaded on IACS, including Project Results. The LAG

shall also ensure that when selection facility is provided on IACS, this is to be used by the LAG and DC Members.

4.2.5.9 Appeals window open and appeals lodged with Chairperson of appeals board

As a minimum, the Appeals Board should contain a Chairperson and three members. The functions of the Board

shall be regulated by a Terms of Reference prepared and approved by the DC.

Members of the Appeals Board shall not be bound to the formalities of a court but must ensure transparency and

impartiality. They shall outline the reasons which led them to that decision in a clear form. Their decision shall be

final and binding.

The Appeals Board shall also sign a declaration of impartiality for each case.

The Appeals Procedure

Unsuccessful applicants have the right of appeal on the outcome of the evaluation and selection process. Appeals

have to be presented to the Chairperson of the Appeals Board in writing through a registered letter within 5 working

days from receipt of the email/letter of notification (whichever the earliest) of result sent by the LAG.

The appeal should include a detailed explanation of the reason/s the appeal is being made, supported by any

relevant documentation/testimonials. The Appeals Board will not consider late appeals.

Upon submission of the appeal, the Appeals Board shall be convened within no later than 5 working days to review

the appeals presented. All necessary relevant documents will be made available to the Appeals Board by the LAG

Manager.


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The Appeals Board must conclude the process of appeals by no later than 15 working days from the appeals closure

date. Upon finalisation of the process, a detailed report articulating all decisions taken must be presented to the

DC. The decision of the Appeals Board is final and cannot be contested by the DC.

The DC must notify in writing the decisions to each appellant.

The appeals procedure shall be published on LAGs website.

4.2.5.10 Letter of Offer and Letter of Acceptance

The DC must publish a final result with a list of the projects eligible for financial support on the notice Boards of the

LAG, and on the LAGs website. The LAG must issue a letter of offer to each successful applicant.

4.2.5.10.1 Letter of Acceptance

The project applicant will have 10 working days to submit the letter of acceptance, which is attached to the letter

of offer. If, after 10 working days, the LAG does not receive the letter of acceptance, it will be considered that the

applicant is no longer interested in undertaking the project and funds will be relocated according to the discretion

of the LAG.

Should the beneficiary accept the offer, eligible period of expenditure should start as per original letter of offer

(grant award letter).

4.2.5.11 Contracting of Selected Beneficiaries by the LAG, including possibility of Advance payments to LAG Beneficiaries

Contracts are to be signed between the LAG chairperson (or any formally authorised delegate) and a legal

representative of the beneficiary (the MA will not be a witness to the contracts). In case where the signatory on

behalf of the beneficiary is not a legal representative, a power of attorney must be presented showing delegation

of signatories between the legal representative and the appointed signatory. This power of attorney is to be

endorsed by a public notary. The contract shall be given to the beneficiary for verification prior to it being signed.

The contract shall be signed in two originals, one for each party involved (i.e. LAG and Beneficiary). Copies must

be maintained in a secure location (including uploading of contracts on IACS by the LAG) two years from the period

from 31 December following the submission of the accounts in which the final expenditure of the completed

operation is included, in line with Article 140 Regulation (EU) No 1303/2013 of the European Parliament and of the

Council.


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Should advances be made available by the MA and PA, LAG’s shall provide the facility of advance payment for

investments type actions to its beneficiaries5, subject to a relevant bank guarantee or equivalent, in line with ARPA

requirements.

4.2.5.12 Monitoring and Control of Projects by the LAG

The LAG is responsible for monitoring the projects’ implementation in line with the criteria and specifications set

out in the respective contracts and guidelines.

Site visits, bilateral meetings (records to be kept) and reminders should be sent to beneficiaries notifying them of

project closure dates and other relevant milestones that might affect project implementation. Regular updating of

the financial and implementation status of the project shall also be carried out.

With regards to Projects under Measure 19.2, bi-lateral meetings shall be organised by the LAG on a regular basis

(suggested period of approximate 2 months although the LAG may decide otherwise) with the beneficiaries in order

to discuss progress and implementation. The frequency of such meetings shall also be dependent of the rate of

progress of each respective project, and/or as may be considered necessary by the LAG. The LAG is to make sure

that a report of the outcomes of the bi-lateral meeting are recorded and shared with beneficiary (similar nature of

meeting minutes) to facilitate follow-up from both ends. Additionally, the LAG is to make sure that the beneficiary

submits the Project Progress Report on request and that disbursement schedules and project outcomes are being

respected by the beneficiary, as per contract where applicable.

4.2.5.12.1 Publicity

In case of physical investments, a plaque must be fixed on site where a project has been undertaken. In all cases

the LAG or beneficiaries must follow the Publicity Guidelines issued by the MA.

The LAG and all of its beneficiaries must follow the latest version of the publicity guidelines which can be downloaded from the link below:

http://eufunds.gov.mt/en/Operational%20Programmes/Publicity/Pages/Cohesion-Policy-2014-

2020.aspx

Information and Publicity

5 Reference to M19.2, MA or ARPA may dictate what type of projects can be subject to Advance payments.

http://eufunds.gov.mt/en/Operational%20Programmes/Publicity/Pages/Cohesion-Policy-2014-2020.aspx

http://eufunds.gov.mt/en/Operational%20Programmes/Publicity/Pages/Cohesion-Policy-2014-2020.aspx


28

The LAG shall follow publicity circular dated 30.07.2014 (as may be amended). The LAG may also present any

suggestions or recommendations to the MA/PA for the improvement of the LEADER programme.

The LAG shall maintain an updated list of beneficiaries on its website in line with Article 111 of EU Regulation

1306/2013.

Transnational Co-Operation

‘Implementation of the ‘Inter-territorial and transnational cooperation’, which includes co-operation projects

within the Member State (inter-territorial co-operation) or co-operation projects between territories in several

Member States or with territories in third countries (transnational co-operation, TNC).

Measure 19.3

Funding will become available for trans-national and inter-territorial cooperation projects following a dedicated

call which shall be launched by the MA. The support rate for M19.3 is 80%, with the remaining 20% coming from

private contributions. Support will be available for projects which complement any of the measures for which the

LAGs have responsibility, and which support TNC activities outlined in the Local Development Strategy. In this

context, preparatory activity, co-ordination and animation are eligible for funding through M19.3. Funding will

normally be made available under this measure for co-operation projects involving partners in EU Member States.

Following a selection process, a grant agreement will be signed with successful applicants. Only after that stage can

expenditure related to transnational cooperation be incurred. The MA will approve cooperation projects between

LAGs in different territories and local public-private partnerships in other types of areas, which are implementing

a local development strategy. Co-operation must not consist purely of an exchange of information, but must consist

of a joint project between the groups involved, possibly including training across territories, or joint marketing

initiatives.

Preparatory technical support for inter-territorial and transnational co-operation projects, on condition that local

action groups are able to demonstrate that they are envisaging the implementation of a concrete project.

Pre-Development Funding

Preparatory activity, co-ordination and animation costs in respect of inter-territorial and trans-national projects

may be eligible for funding. This preparatory technical support is available on condition that local action groups are

able to demonstrate that they are envisaging the implementation of a concrete project.

Such costs must relate to specific activities and costs must be related to specific projects, i.e. there must be a

concept or proposal in place before any development begins, and will include items such as travel costs and

associated expenses.


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Trans-national and inter-territorial projects are 80% co-funded. These costs must be approved by the MA through

the M19.3 application.

Eligibility Criteria

The Eligibility Criteria for Measure 19.3 – ‘Inter-territorial and Transnational Cooperation’ are almost the same as

for Measure 19 – Implementation of the Local Development Strategies, the only difference being the eligibility of

the following items of expenditure:

International Travel

Travelling by any staff or DC members of the LAG related to the implementation of the LEADER Programme must

follow the conditions for travelling as per Section 9.5 Travel.

A per Diem6 allowance sheet is found on the MA website (kindly make sure that the latest allowances are being

followed. Checks with MA need to be done). Each person travelling shall submit 3 quotes for any flights, together

with an adjudication report. Upon return original boarding passes need to be presented as part of the claim for re-

imbursement.

The MA/PA reserves the right to make amendments to these procedures and shall inform the LAG of any revisions

to the conditions for travelling. A travel report of meetings attended abroad must be duly submitted to the MA/PA

by not later than six working days following arrival.

Implementation Circuit

The implementation circuit in Figure 3 applies in circumstances where the LAG implements co-operation projects

under Measure 19.3.

Measure 19 and Measure 19.3

The implementation circuit below corresponding to Figure 3 applies where the LAG implements projects which

have been planned within the Local Development Strategy under Measure 19.

6 Refer to

http://eufunds.gov.mt/en/EU%20Funds%20Programmes/European%20Agricultural%20Fund/Pages/Links%20and%20Downloads/Lin

ks-and-Downloads.aspx


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Figure 3 - Measure 19 and Measure 19.3 - LAG Projects

Application Procedure

The Managing Authority shall issue a Call for Proposals for actions falling under Measure 19.3. In this scenario the

LAG must work to develop a detailed project action plan for submission to the MA. The action plan must include a

detailed project plan, budget and timeline. The application must forecast expenditure for the project in a detailed

cash flow projection, and identify the expected number of interim payments expected to the PA.


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Before submitting the request for proposal including the project plan to the MA, the LAG Manager should first

submit it to the DC for consideration and clearance.

Administrative and Eligibility Checks

Once requests for proposals are received, the MA will commence evaluating the submissions and conduct the

administrative checks. The aim of the eligibility checks is to ensure that the proposal fits within the scope of the

measure, and that the same proposal was not presented for funding under other measures or actions, including

those of other programmes.

A proposal will be considered correct and complete only if it contains all the required information requested

together with all the supporting documentation. All information must be included in accordance with the specified

format.

Lags who submit proposals that do not contain all the necessary information must be notified in writing by the MA.

The LAG must be given 5 working days from the date of the receipt of the notification letter to present the required

missing documents or information.

If the LAG fails to respond as requested, the application will be automatically eliminated and a rejection letter will

be sent informing the applicant of this situation.

Checks for validity of all presented documentation need to be undertaken by the MA. Any false or misleading

information will lead to the immediate rejection of the proposal.

Eligibility of Expenditure

Proposals verified for financial aid will be checked for eligibility of expenditure and reasonableness of costs by the

MA. The eligibility parameters identified in the guidelines for applicants must be strictly respected.

A proposal is deemed eligible and passed on to the selection process only if all mandatory requirements are met.

Should the proposal fail to comply with the eligibility requirements, the LAG will be notified in writing to the effect

that the proposal has been rejected including the reasons that led to the rejection of the proposal.

Project Approval

The MA will review the project to ensure that it is consistent to the objectives of the RDP. The MA will issue written

approval to the LAG so that they can begin implementing the project.

Project Implementation

The LAG will carry out the work in accordance with the project approval from the MA. The LAG will submit a written

progress report to the MA as part of any request for an interim payment for the project. In this way the MA will

monitor the progress of the project on an ongoing basis.

Payment Procedures


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Once the PA, in line with ARPA internal procedures, has reviewed the request for payments the PA shall issue the

first (or subsequent), interim payments for the project. These will be defined by the PA in its MOP.

Project Completion

Once the LAG has completed the project, the LAG Manager will prepare the following documents for submission

to the MA/PA to effect the final payment:

Final Project Report;

Fiscal receipts/invoices related to the final payment and

Proof of payment.

Prior to payments being effected the PA may request the Control Unit to carry out an on-the-spot check.

Publicity Requirements

A plaque should be situated on site to acknowledge LAG and EU Funding where applicable. See publicity section

and refer to Publicity Guidelines issued by the MA.

4.3 Measure 19.4 Running Costs, Skills & Animation

4.3.1 Rationale

In order to implement the approved strategy, managing public funding, assist potential beneficiaries, monitoring

of projects’ progress etc., the LAGs are eligible for running costs under M19.4 of the RDP. Through this measure,

the LAG may receive running costs up to a maximum of 25% of the value of the LDS in line with Article 35 (2) of EU

Reg. 1303/2013.

4.3.2 Objective

The objective of Measure 19.4 – ‘Support for running costs and animation’ is to provide LAGs with sufficient

resources to efficiently ensure the adequate administration of the LDS.

4.3.3 Eligible Activities

● Animation Activities


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Animation activities relate to the process of engaging and maintaining partners involved in the projects’

preparation and implementation phases. As per article 35 (1)(e), Animation of the community-led local

development strategy in order to facilitate exchange between stakeholders to provide information and to promote

the strategy and to support potential beneficiaries with a view to developing operations and preparing applications.

Animation must be carefully planned and cover all project phases;

● Running costs

In line with Article 34 (d) of EU Reg. 1303/2013, all running costs incurred by the LAG in managing, delivering,

evaluating and reporting of the LEADER Programme are eligible; (d) running costs linked to the management of the

implementation of the community-led local development strategy consisting of operating costs, personnel costs,

training cost, costs linked to public relations, financial costs as well as the costs linked to monitoring and evaluation

of that strategy as referred to in point (g) of Article 34(3).

These expenses include, though not exclusively, the items listed below. In the case of extraordinary items not listed

in table 3, the LAG should always check eligibility with the MA prior to committing.

Table 3 - Eligible Items: Measure 19.4

Ref. Eligible Items7

1 Manager wage

2 Secretary wage

3 Performance Bonus – (up to the maximum stipulated in the

employment contract)

4 Government Income supplement

5 Social Security

6 Legal / Expert Advice

7 Accountant/Auditor

8 Operations and Maintenance

9 Electricity

10 Water

11 Stationery and adverts

12 Postage

13 Telephony expenses and internet

14 Rent (excludes maintenance)

15 Cleaning Services (excludes cleaning equipment/material unless

same is part of a cleaning contract agreement)

16 Insurance Policy on Operations

7 The LAG’s shall consult with and shall adhere to any guidelines/circulars issued by the Paying Agency with regards to the submission of claims related to M19.4.


34

17 Office equipment strictly linked to the implementation of the

LDS

18 ’Mileage’ costs in line with Government established circular

19 DC Members’ Allowance

20 Animation costs

21 Special initiatives as endorsed by the MA

22 Evaluation of the LEADER

23 Holding of training conference and seminars

24 Website costs

25 Printing & Publications

Evaluation

In line with Article 34 (g) of EU Reg. 1303/2013, LAG’s shall ensure that evaluation of the strategy is carried out; (g)

monitoring the implementation of the community-led local development strategy and the operations supported and carrying

out specific evaluation activities linked to that strategy.

Reference should be made to the guidelines of the Evaluation Helpdesk, ‘GUIDELINES EVALUATION OF LEADER/CLLD’ (August

2017), in particular document Chapter 1.2.2.

4.3.4 Eligibility of Running Costs

Eligibility of M19.4 shall be triggered from the date of the award letter by the MA (6th November 2017); hence,

support under M19.1 would seize to be eligible as of the 5th November 2017 to avoid the any possibility of double

funding. Expenditure and Budget shall be in line with articles EU Reg 35(1)(d)(e).

4.3.5 Running Costs Budget

The Decision Committee together with the LAG Manager must present to the MA, an indicative budget on the

management of the running costs for the duration of the strategy. This budget must be in line with established

rules and procedures and must not exceed the total budget allocated for M19.4 allocated in the grant agreement

for the duration of the entire strategy implementation period (by latest December 2023). The LAG must revert (ex-

ante) to MA approval should budget shifts between line items be sought; although no contract addendum would

be required, the MA, should it positively considers the request for shift of funds, would have to amend line budgets

on the IACS.

Remuneration of board members including Chairman should be tied and proportional to attendance.

4.3.6 Employment

The LAG must follow Chapter 452 of the Employment and Industrial Relations Act and any other subsequent

conditions of employment identified in Maltese Law. This information can be accessed on:


35

http://www.justiceservices.gov.mt/DownloadDocument.aspx?app=lom&itemid=8918&l=1

It is expected that each LAG will carry out all recruitment processes within the spirit of national regulations (such

as discrimination based on gender etc.) and through the public employment service of Malta (i.e. Jobs Plus).

Whenever there is an employment vacancy, besides going through the Jobs Plus procedure mentioned above, it is

recommended a call is to be issued on at least 1 local newspaper and also on the website of the LAG. The LAG must

keep records of all publicity and information related to the call.

The results of all recruitment processes must be published on the notice Board of the LAG’s office and also on the

website of the LAG.

Remuneration paid shall be in accordance with the terms and conditions stipulated in the employment contract.

4.3.7 Attendance

Each LAG is to have a system of effectively recording attendance of any staff employed by the LAG. The attendance

is to be duly verified by the Chairperson of the Decision Committee every calendar month or every 4 weeks ending,

depending on the salary period established by the LAG.

4.3.8 Financial/Other Charges and Legal Expenses

Bank Guarantees may only be considered as an eligible costs if they are needed to meet the requirements of EU

co-financing as required in Article 63 of the regulation 1305-2013. Other bank fees and charges are ineligible.

4.3.9 Rental Agreements

Legal rental agreements in respect of movable and immovable property rented out by the LAG must be provided

in writing.

4.3.10 Fuel and Mobile Phone for LAG Manager

LAG managers are also eligible for allowances on mobile phones8.

The LAG manager shall keep a fuel logbook to log his/her fuel usage for trips related to LAG business. A receipt

must be presented and fuel expenses will be reimbursed according to the number of kilometres claimed on the log

book. The Latest Approved rates must be followed.

8 The LAG’s shall consult with and shall adhere to any guidelines/circulars issued by the Paying Agency with regards to the submission of claims related to fuel and mobile phone expenses.

http://www.justiceservices.gov.mt/DownloadDocument.aspx?app=lom&itemid=8918&l=1


36

4.3.11 Procurement Procedure

The LAGs are to follow the spirit of Public Procurement which would be reflected in guidelines that may be provided

by the MA (similar to a process adopted during the RDP 07-13 period through the MA Circular MA01/14).

4.3.12 Payment Procedure, including interim payments

LAG’s shall consult with and shall adhere to any guidelines/circulars/MOP issued by the Paying Agency with regards

to payment procedure related to M19.4.

4.3.13 Provision of Advance Payment

An advanced payment of up to 50% of the budgetary allocation (Public support) of Measure 19.4 may be provided

to each LAG for administrative purposes (i.e. for running and animation costs) for the implementation of the Local

Development Strategy. This subject to MA approval and satisfactory guarantee arrangements with the ARPA.

Advance payment for the scope of M19.2 may also become a possibility. Both advance payments possibilities are

subject to MA approval.

4.3.14 Evidence of Title/Leasehold/Rent/Proof of use or access

The LAG must ensure evidence of Title/Leasehold/Rent/Proof of use or access in respect of investments linked to

the operations of the LAG.

4.3.15 Technical Assistance

The LAGs can submit a request for Technical Assistance for the consideration of the MA both in terms of training

practices and capacity building.

4.3.16 Marketing by the LAG

Marketing activities by the LAG may include, but not exclusively, the following items:

Implementation of marketing plans;

Social Media;

Development of web-sites;

Development, printing and distribution of marketing material;


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Attendance at fairs and marketing events;

Advertising; and

Promotions.

4.3.17 Training

Eligible costs for training may include, but not exclusively the following items:

Trainer’s fees;

Hiring of training venues;

Printing of training material.

4.3.18 Leasing

Leasing is eligible for grant aid.

4.3.19 Bank Interest

Interest on debt shall not be met from Programme funds. Bank interest incurred by the LAG is not an eligible

expense.

4.3.20 VAT

VAT is not eligible for funding with the exception of non-recoverable VAT when it is genuinely and definitively borne

by the LAG. Proof from VAT Department must be presented in order for the PA to consider eligibility or otherwise

of VAT element (as well as beneficiaries under M19.2).

4.8.20 Ineligible Activities

Funding under this Programme is not designed to be a mainstream funding mechanism. The Programme is designed

to enable the LAG to identify specific local needs, and to develop a strategy to address these needs. M19.1 may not

be used to fund activities or initiatives that received mainstream national funds or EU funds;

Funds shall not be used or paid in respect of the following mainstream categories:

Healthcare activities; and


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Housing

Funds shall not be used or paid in respect of the following activities: 9

Conventional motor vehicles, including cars, vans, buses and other similar vehicles;

Courses of instruction or training which form part of normal education programmes or systems at

secondary or higher levels;

Insurance for project applicants;

Loans;

Nursing homes;

Sport activities;

Second-hand equipment; and

Working capital (including stock).

5 Controls

EU Commission Regulation 808/2014 of 17th July 2014 lays down detailed requirements in relation to the

management and control of European Agriculture Fund for Rural Development. To comply with the requirements

of this Regulation, the Internal Audit Unit of the PA may carry out an audit plan on LAG activities. The Control Unit

will carry out controls on projects approved for funding by the LAG, and on all projects that are promoted and

implemented by the LAG.

When requested, the LAG must provide the MA and PA with a report of its activities. Where necessary, additional

information on the operations of the LAG may also be requested.

MA/PA checks will concentrate on, but may not necessarily be confined to, establishing that the LAG: -

● Complies with EU regulations and National legislation as appropriate;

● Is properly constituted, i.e. that it is a legal entity and operates in accordance with its statute, the OG's and

EU Legislation;

● Assesses and approves projects in accordance with EU and/or national regulatory requirements;

● Monitors progress and informs MA and PA when modifications in the financial plan are necessary;

● Records payments and respective documentation of all its activities and transactions

9 The list is an indicative list and is not exhaustive


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5.1 Project Inspection by LAG

The LAG shall undertake on the spot checks on all projects at any point in time during (1) the lifetime of the project,

(2) upon project completion and (3) follow up with such checks up to the end of the durability obligations following

completion. Checks shall involve controls on the intervention supported, durability obligations and documentary

checks of files and documentation kept by the applicant.

Separately from the above, upon the completion of a project, a final inspection may be undertaken by officers from

the Control Unit within the PA. The inspectors will inspect the work carried out, and verify that the grant allocated,

and the costs outlined have been carried out in accordance with the Grant Agreement. Checks should also be done

to make sure that the results, indicators envisaged were reached.

The LAG may be asked to provide the MA and ARPA with periodical updates on inspections carried out.

5.2 EU and MT Controls and Inspections

The European Commission, the European Court of Auditors, the Certifying Body, the National Audit Office and any

other authorised Control body may carry out on-the-spot inspections to verify that all activities carried out by the

LAG are in conformity with applicable EU and National regulations.

5.3 Exclusions and Deductions

Controls on payment claims

Payments to project applicants including the LAG payments shall be calculated on the basis of eligible invoices only.

The eligible amount shall be the amount claimed by the project applicant less any elements considered ineligible

by the LAG and/or PA. It is the responsibility of the authority processing payments to ensure that they conform to

all EU and national requirements governing the management of the Programme.

Control checks will determine, amongst other things, whether amounts grant aided are eligible for support.

Where LAGs fail to de-commit ineligible amounts, such amounts shall form the basis of a deduction from the

respective LAGs total Programme allocation. LAGs will have to meet these amounts from their own

resources.


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5.4 Sanctions, Penalties and Deductions Upon submission of the payment claim by the beneficiary, which can also be the LAG, the PA shall verify and

authorise the eligible amounts to be paid. This will be calculated on the basis of all supporting documentation

as requested by the PA.

The PA shall undertake checks in conformity with Regulation 640/2014, apply sanctions and/or deductions

in conformity with EC Regulation 65/2011and including guidelines for compliance with the spirit of public

procurement regulations.

Where a project beneficiary including the LAG is found to have intentionally submitted a false claim, the

expenditure in question will be de-committed and the beneficiary shall be excluded from receiving support

from the Programme for a period of three years from the date of recovery of the ineligible amount. The

agreement will be revoked.

5.5 Recovery of Grant Aid

In line with Article 71 of EU regulation 1303/2013, an operation comprising investment in infrastructure or

productive investment shall repay the contribution from the EAFRD if within five years (3 years in case of an

SME) of the final payment to the beneficiary or within the period of time set out in State aid rules, where

applicable, it is subject to any of the following:

(a) a cessation or relocation of a productive activity outside the programme area;

(b) a change in ownership of an item of infrastructure which gives to a firm or a public body an undue

advantage;

(c) a substantial change affecting its nature, objectives or implementation conditions which would result in

undermining its original objectives. Sums unduly paid in respect of the operation shall be recovered by the

Member State in proportion to the period for which the requirements have not been fulfilled (in line with

Article 71, Reg 1303).

The PA shall carry out on-the-spot checks as it deems appropriate and in accordance with EC Regulation 640/2014.

6 Reporting

6.1.1 Reports

The LAG is expected to submit any reports requested by the MA and the PA within the stipulated timeframes

and in format and quality as outlined by MA/PA and regulation, where applicable. If the need arises, the LAG


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Manager will be invited to bi-lateral meetings with the Managing Authority and Paying Agency, as required, in

order to discuss the work progress, projects implementation and any other issues deemed necessary.

LAG may also be required to present such progress at other formal/informal for a, such as Monitoring

Committee, National Rural Network and Annual Meetings with the European Commission.

6.1.2 Indicator Reports and Evaluation

The LAG shall submit the necessary updates on the indicators pertaining to LDS for monitoring purposes. Data

and other relevant information shall also be used for LAG Evaluators as well as MA Evaluators and other bodies

carrying out such tasks as may be indicated by the MA/PA.

6.1.3 Status Report

LAGs may be requested by the MA to provide feedback on LEADER implementation for drafting and compilation

of Annual Implementation Reports which has to be presented to the European Commission by end May of each

calendar year. LAG shall submit feedback in format as requested by the MA, normally within the first quarter of

the year (starting 2018).

6.1.4 Reporting Irregularities

Upon performing controls, the LAG is to report to the MA, PA and the Co-ordinating committee (EU funds)

set up in terms of Article 23 of the of the Internal Audit Investigations Act (Cap 461 of the Laws of Malta)

about any irregularities identified and found.

6.1.5 Other Reports

Upon request by the MA and/or PA, the LAGs can also be requested to provide specific reports as may be

required from time to time, including those linked to Parliamentary Questions. Possibly, such reports may be

required at very short notice and also outside office hours.

7 Procurement

7.1 Payments Beneficiaries must present a payment claim through the LAG so that the necessary verifications and controls

are undertaken prior to submission to ARPA for processing. LAG shall strictly abide by ARPA guidance.


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7.2 Bank Accounts The LAG shall keep a separate and adequate accounting system in relation to all monies received and spent

by it arising out of the operation of Measures 19.2 and M19.4, including monies received from private

sources. Such accounts and all associated documentation shall be retained by the Second Party for a

minimum of a two year period from 31 December following the submission of the accounts in which the final

expenditure of the completed operation is included.

When opening these accounts, the LAG must inform the bank in writing that the public monies lodged are

held in trust by it (the LAG), and may not be offset against any LAG debts to the bank which may arise from

time to time. A written acknowledgement of this arrangement should be obtained from the bank upon the

opening of the relevant accounts and forwarded to PA. Under no circumstances should Programme funds be

lodged to other existing bank accounts apart from those mentioned above.

All cheques, bank mandates, fund transfers etc., must carry the signature of at least two LAG officials

approved by the DC.

Some LAGs may wish to make certain payments online, e.g. salaries. Where on-line banking is used, the

following must apply:

● Approval to do so is sought and received from the Decision Committee

● All such transactions are printed down to hard copy and subsequently signed by two signatories as noted

above, and retained for audit purposes.

8 Documentation, Filing and Archiving

8.1 General Documentation and Inventory

Each LAG is responsible for the supervision and distribution of public funds (EU and national) and is required to

demonstrate accountability for all expenditure under the Programme, for which it is responsible. The Agreement

requires the LAG to keep an adequate accounting system and to fully and properly document its operations.

All documents pertaining to the Implementation of the LEADER Programme must be retained by the LAG; LAG’s

are obliged to retain all supporting documentation for a two (2)-year period from 31 December following the

submission of the accounts in which the final expenditure of the completed operation is included (which possibly

can be 2023).


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This is to facilitate Audits and the ex-post evaluation of the programme. Key documents in this respect include:

● Complete project dossiers where the LAG is a beneficiary;

● Financial reports;

● Minutes of the decision and evaluation committees;

● Correspondence, especially correspondence between the LAG and the MA and PA and

● Any other documentation deemed relevant.

Also, a signed inventory, listing any items bought in connection with the project, should be compiled and held on

site and this should be made available to ARPA whenever requested.

A copy of the inventory can be downloaded from the following link:

https://eufunds.gov.mt/en/EU%20Funds%20Programmes/European%20Agricultural%20Fund/Pages/Circula

rs.aspx

8.2 Inventory

All capital investments, including furniture, IT equipment and peripherals, machinery and other equipment are to

be kept in the inventory table. In case of circumstances whereby goods are stolen, a police report should be

obtained as proof of this. The LAG is required to fill in an Inventory of the fixed assets list of all assets and where

available, the following details should be included:

Contract number

Name of supplier

Serial / ID number – Where serial number is not visible, a unique inventory number should be assigned

Date of purchase / installation

Total cost or value

Location of asset

Description of asset

Quantity

Whether a guarantee has been applied or not.

The beneficiary should also list any equipment that has undergone any alterations following acquisition.

The inventory list / fixed asset register of each project should be frequently updated to include the relevant

details of the assets purchased. The list is to be signed and certified correct by the manager and made

available to the MA or ARPA and any other auditors upon request.

https://eufunds.gov.mt/en/EU%20Funds%20Programmes/European%20Agricultural%20Fund/Pages/Circulars.aspx

https://eufunds.gov.mt/en/EU%20Funds%20Programmes/European%20Agricultural%20Fund/Pages/Circulars.aspx


44

LAGs must keep in mind that:

a) When fixed assets are purchased through EU funds, it is imperative that they are kept in good working

order throughout and after the project life in line with durability clause in the Grant Agreement.

b) LAG is to make sure that an asset comes with the appropriate warranties.

c) If any fault results in an asset, all documentation in relation to the repair must be kept and when that asset

needs to be replaced, it is important that all documentation is kept on file.

d) If an asset is replaced, both the old and new serial numbers must be retained.

e) If an asset is faulty and / or damaged and is replaced at the supplier’s or the LAG expense – whether under

guarantee or not – the replacement must perform the same function and be of the same or higher

specifications as the asset being replaced.

f) Relocation of an asset needs to be reflected in the inventory

g) The LAG shall make sure that the relevant publicity appears on the equipment purchased as well as on the

relevant documentation (proportionality should apply in the case of infrastructural project whereby the

whole building or area is co-financed).

8.3 Project Documentation

The LAG will be responsible for properly filing and archiving all the applications administered and monitored by

the LAG.

The objective of the archive is to ensure security and confidentiality of the application files and supporting

documentation submitted by the applicants under M19.2 EAFRD as well as all the internal documents issued

and received such as correspondence, contracts and proof of payments where applicable.

Once an application is submitted, an application file should be opened and registered with a unique project

number for each individual file. This project reference number follows the application file all through the cycle.

Following administrative and eligibility checks, selection, ranking and contracting of project documentation has

to be kept in file. A copy of all the received application files is to be kept at the Lags offices.

A well organised project dossier must be maintained in respect of each project considered for grant aid.

Ideally, one file is to be kept for each project proposal submitted for grant aid with the LAGs.

If a single file is used for multiple project proposals, then the file must be clearly segmented by dividers for the

sake of an adequate audit trail, having only one project proposal within each section or one file for every project

Each project file shall include all documentation in respect of that project and most importantly must

contain the following: -

● A checklist of all documents required for processing the application;

● A completed formal application for grant aid, which must be signed and dated by the applicant, and

countersigned and dated by an appropriate staff member in the LAG; and


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● All the relevant documentation as indicated in each respective call for proposals.

8.4 Other Documentation

8.4.1 Minutes of Meetings The minutes of meetings constitute an important legal and historical record of the adopted policies and

business activities of the LAG.

They are a valuable record for the guidance of management about policy actions and directives as well as

possible eventual auditing purposes. They also provide a source of information for Decision Committee

meetings and actions to be reported at the annual meeting.

Promptly after each Decision Committee meeting, the minutes must be written in permanent form and

placed on file at the LAGs office by the LAG secretary. The minutes must include:

● Date, place, and time of meeting;

● A record of the people who attended the meeting and those who were excused/absent;

● A brief statement of all matters pertaining to the business of the LAG during the meeting;

● All motions, resolutions, and votes by the Decision Committee;

● If a roll call vote is taken each individual response shall be recorded;

● Synopsis of the Manager’s reporting;

● Details of all grant decisions including referrals, commitments of aid and rejections; and

● Signature of the board secretary and Chairperson. A copy of minutes should be approved by the DC,

signed by the Chairman and sent to the MA following each meeting (N.B. MA is not confirming or

approving any of the decisions taken throughout the DC meetings and within the approved minutes).

9 Other Conditions

The LAGs are obliged to coordinate with the state aid monitoring board in relation to measure 19.2 of the RDP.

LAGS shall ensure that every project partner that falls within the remit of state Aid regulations should be obliged

to send any information requested by the State Aid Monitoring Board through the MA.

The SAMB is charged with the monitoring of state aid in Malta. The SAMB provides advice and

guidance to Beneficiaries and other stakeholders with respect to State Aid in order to ensure

that the EU funded projects are in line with Community State Aid Regulations. Prior to the

projects going through the assessment stage, the LAG shall consult with the SAMB to

determine that these project proposals do not involve state aid. The SAMB can carry out


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checks on individual projects on issues related to state aid once project implementation is

underway.

Please refer to Legal Notice 210/2004 (State Aid Monitoring Regulations) to ensure

compliance with State Aid requirements.

The SAMB can be contacted on:

Tel. no: 2125 2757

Email: [email protected]

9.1 Eligibility Queries

In order to maintain the integrity and consistency of internal control activities, project eligibility queries and

requests for approval must be addressed solely to the MA. Expenditure related eligibility queries can be conveyed

to PA, since the PA will collaborate closely with the MA when determining eligibility of expenditure in line with

these guidelines.

9.2 VAT and Taxation

Article 69(3)(c) of EU Reg (1303/2013) shall apply in terms of VAT, both for the LAG as RDP beneficiary as well as

beneficiaries of LAG’s under M19.2 (hence LAG’s shall ensure that the same processes and principles are applied

and ensured vis-à-vis M19.2 beneficiaries).

For the purposes of VAT, LAGS may be considered as VAT eligible pending VAT Department declaration. Where

LAG’s cannot recover VAT, LAGs could therefore also be eligible to be reimbursed on VAT elements of expenses

incurred for Measures 19.4/19.3 in which the LAGs are direct beneficiaries. In case LAGS change their legal status

they must immediately notify the MA and provide proof to the VAT department whether or not they can recover

VAT.

As for income tax matters, the LAGs should be aware of their own responsibilities through consultation with their

financial advisors or the Inland Revenue Department.

9.3 National Rural Network (NRN)

Each LAG is required to participate fully in any Programme networking arrangements as may be guided by the MA

and/or NRN.


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9.4 Seminars/Training Organised by the LAG

Whenever the LAG organises seminars or training, it must be ensured that:

● All seminar participants are duly registered for the event;

● Photographs of the event are taken and upload on the website; and

● A copy of seminar material is retained in file.

● Officials from the Managing Authority and the Paying Agency must be invited to attend seminars

organised by the LAG.

9.5 Overseas Travel

The following rules apply for overseas travel:

9.5.1 Agenda

A copy of the agenda is always to be provided to the MA.

9.5.2 Subsistence Allowance

For further clarifications on subsistence allowance and other travel related queries, please refer to PSMC,

Manual on Transport and Travel Policies and Procedures and other circulars10 .

The per diem11 allowance shall be reimbursed in full against the submission of the relevant documentation to

the PA:

● Original boarding passes

10 Refer to http://publicservice.gov.mt/en/Pages/The%20Public%20Service/PSMC.aspx and https://eufunds.gov.mt/en/EU%20Funds%20Programmes/Financial%20Control%20Unit/Documents/Circulars/2018/Circular%20042018.pdf

11 Refer to

http://eufunds.gov.mt/en/EU%20Funds%20Programmes/European%20Agricultural%20Fund/Pages/Links%20and%20Downloads/Links

-and-Downloads.aspx

http://publicservice.gov.mt/en/Pages/The%20Public%20Service/PSMC.aspx

https://eufunds.gov.mt/en/EU%20Funds%20Programmes/Financial%20Control%20Unit/Documents/Circulars/2018/Circular%20042018.pdf

https://eufunds.gov.mt/en/EU%20Funds%20Programmes/Financial%20Control%20Unit/Documents/Circulars/2018/Circular%20042018.pdf

http://eufunds.gov.mt/en/EU%20Funds%20Programmes/European%20Agricultural%20Fund/Pages/Links%20and%20Downloads/Links-and-Downloads.aspx

http://eufunds.gov.mt/en/EU%20Funds%20Programmes/European%20Agricultural%20Fund/Pages/Links%20and%20Downloads/Links-and-Downloads.aspx


48

● Travel report

9.6 Political Activities

9.6.1 General

Public confidence in the impartiality of the administration of Public Funds shall not be

impaired in any way. Public Funds Administrators need to ensure that their participation in

political activities does not place them in conflict with their primary duty of administering

Public Funds in an efficient, effective and transparent manner.

9.6.2 Conflict of interest in cases of political activities

If for political considerations, a conflict of interest arises such Administrators, at their own

instance or at the instance of the Competent Authority, shall withdraw or be withdrawn from

those areas of their duties giving rise to the conflict of interest, or stop participating in

political activities.

9.6.3 Restrictions on political activities

Public Funds Administrators are invariably barred from indulging in political discussion or any

other political activity during working hours or on official premises.

Public Fund Administrators engaged in political activities are prohibited from publicizing or

referring to beneficiaries and applicants during any sort of public events which are of a political

nature.

9.6.4 Personal & Professional behaviour

Kindly refer to the following link in relation to personal and professional behaviour.

http://www.justiceservices.gov.mt/DownloadDocument.aspx?app=lom&itemid=8963

http://www.justiceservices.gov.mt/DownloadDocument.aspx?app=lom&itemid=8963


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9.7 Fraud and Risks

9.7.1 Fraud

The LAG shall put in place effective and proportionate anti-fraud measures taking into account any fraud risks

identified. Accordingly, the LAG performs an exercise to assess the impact and likelihood of specific fraud scenarios

occurring. The LAG utilises a fraud risk assessment tool provided by the European Commission which covers the

likelihood and impact of specific and commonly recognised fraud risks, focusing on these three key processes:

- Selection of beneficiaries;

- Implementation of projects by beneficiaries, focusing on procurement procedures and staff costs; and

- Durability checks.

The fraud risk assessment exercise is undertaken periodically or whenever a significant alteration to the

management and control system is made. This assessment is to be retained in file and made available to the MA/PA

when requested.

This exercise enables the LAG to provide risk responses which are proportionate to the risks identified to its specific

situations. However, although a well-targeted assessment of fraud risks is a requirement it cannot completely

eliminate the risk of fraud occurring or remaining undetected. Additional mitigating controls are therefore called

for and these are discussed further under other sections of these guidelines.

It is important at this point to distinguish between irregularities and fraud. Whilst irregularities involve breaches

of certain conditions of funding and are often the result of genuine errors (e.g. not filling out a form correctly, or

not respecting the proper tendering procedure) fraud is a deliberately committed irregularity constituting a

criminal offence.

Meanwhile, fraud, in respect of expenditure under the EAFRD, is defined, as any intentional act or omission relating

to the:

- Use or presentation of false, incorrect or incomplete statements or documents, which has as its effect the

misappropriation or wrongful retention of EAFRD funds;

- Non-disclosure of information in violation of a specific obligation, with the same effect;

- Misapplication of such funds for purposes other than those for which they were originally granted.


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As from 2006 a new term, i.e. suspected fraud, has been introduced. Suspected fraud means an irregularity giving

rise to the initiation of administrative and/or judicial proceedings at national level in order to establish the presence

of intentional behaviour, such as fraud.

A Beneficiary State shall take all necessary measures, including legislative, regulatory and administrative measures,

namely by preventing, detecting and correcting irregularities and fraud. The last three elements and ‘prosecution’

constitute the four key elements of the anti-fraud cycle.

The MA has a clear commitment to combat fraud and corruption both through preventive and detective control

mechanisms and it is determined to transmit cases to the competent authorities for investigations and sanctions.

9.7.2 Preventive Actions The MA is determined to prevent fraudulent activities. For this purpose, the MA encourages all LAGs to put in place

an effective internal control system with the aim of deterring potential fraudsters and also of maximising the

commitment of staff to combat fraud.

For this purpose, LAGs should:

raise awareness through formal training of all staff complement involved in the management of the

strategy about preventative and detective control measures as well as the specific roles and responsibilities

of all stakeholders and reporting mechanisms;

put in place effective separation of duties, particularly with respect to financial and control units;;

promote an ethical culture among staff to act honestly and with integrity to safeguard all resources;

make sure that staff involved in the management and implementation of the strategy is aware of possible

conflict of interest or fraudulent behaviour at every stage of implementation;

encourage staff to report any case of suspected fraud concerning EAFRD funds to the MA, either through

their respective hierarchy or directly if necessary;

Conduct regular verifications ensuring that staff in charge is aware of guidance on fraud indicators.

9.7.3 Detective Actions Effectively implemented, robust control systems can considerably reduce the risk of fraud but cannot completely

eliminate it occurring or remaining undetected. That is why the systems also have to make certain that procedures

are in place to detect fraud and to take appropriate measures once a suspected case of fraud is detected.

The procedure below highlights the authority levels, responsibilities for action and reporting lines established in

the event of suspicion of fraud.


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When any relevant authority or LAG or their members of staff, suspects that fraud has occurred, they must

notify their immediate superior. If it is inappropriate to raise the matter with the immediate superior, the

concern should be raised with the head of the LAG / MA. The official with whom the report was filed must

immediately relay the message to the head of the MA.

Timeliness plays a crucial role when addressing suspected cases of fraud. Consequently, when identifying

cases of potential fraud, an officer’s immediate action is to alert his / her direct superior verbally. The

case, which is treated with confidentiality (subject to legal obligations), is followed up by a written report

so that the relevant authorities can be informed and requested to investigate further.

The body reporting the suspected fraud must act with caution in dubious situations which might lead to

fraudulent transactions. In case of detection of possible forged documents, the Treasury is advised to

temporarily stop all payments addressed to the supplier / contractor in question.

The body identifying / reporting the irregularity / suspected fraud should inform in writing the head of the

MA, and the Internal Audit and Investigations Department in terms of Article 16 of the Internal Audit and

Financial Investigations Act (chapter 461 of the Laws of Malta), which states that ‘If an entity has reason

to suspect any irregularity and, or a suspected case of fraud of public funds, it shall refer the matter

forthwith to the Director (of IAID), and shall supply to the Director all information in his possession relating

thereto’.

In terms of Article 18 of the Internal Audit and Financial Investigations Act, ‘whenever, and as soon as the

Director firmly establishes the existence of suspected cases of irregularities and, or suspected cases of

fraud concerning the responsibilities of the auditee under review, the Director shall, if he is of the opinion

that the irregularity, if proved, would constitute a criminal offence immediately inform the Attorney

General’.

The Attorney General will evaluate the case in question and determine whether:

• To forward the case to the Malta Police for criminal investigation; or

• terminate proceedings of the case at that juncture.

The Commissioner of Police forwards to the body reporting the case a copy of the report of the

investigation including any court action to be taken by the Police.

Where the investigation report concludes that no criminal proceedings are required (i.e. it is prima facie

confirmed that the suspicion of fraud is not correct) the managing authority advises Treasury to proceed

with payment of pending invoices.

On the other hand, where the investigation report concludes that criminal proceedings are required (i.e. it

is confirmed that the suspicion of fraud is factual) the NFP recommends the withdrawal of any suspicious

payments from certification already carried out.

9.7.4 Effective and proportionate anti-fraud measures The LAG will use a fraud risk self-assessment tool to assess the impact and likelihood of common fraud risks

occurring. The tool identifies specific fraud risks in relation to three processes namely:


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i. Selection of applicants;

ii. Implementation and verification of the operations;

For each of the specific risks, the first step is to quantify the risk that a given fraud type would occur by assessing

impact and likelihood, ignoring the current mitigating internal controls (gross risk). The second step is to factor in

the current controls in place and assess the effectiveness of these controls to mitigate the gross risk. The resulting

risk (the residual risk) should then be assessed on whether it is tolerable or not; if it is not tolerable, additional

controls would have to be introduced till the risk level is considered by the NFP to be tolerable (target risk).

Thus the output of the fraud risk assessment identifies those specific risks with respect to which not enough is in

place to reduce the combined likelihood and impact of potentially fraudulent activity to an acceptable level. The

team carrying out the assessment should then come up with further corresponding anti-fraud measures mostly in

the form of mitigating internal controls.

With regards to Fraud and Risks, the MA shall ensure that it provides training and knowledge sharing opportunities

to LAG DC and staff.

9.8 Inter Ministerial Co-Ordination Committee (IMCC)

With respect to double funding, in order to ensure that operations awarded by the LAG have not been financed

through other funds, the LAG will be requested to participate/keep in contact with the Inter-Ministerial Co-

ordination Committee (IMCC) chaired by the Planning and Priorities Co-ordination Division and attended by

national contact points involved in the management of EU funds instruments. In addition, as part of its application

forms, a section is included whereby beneficiaries are asked to state whether an application has “been made for

assistance from any other Community source (including EAFRD, ERDF, ESF, Cohesion Fund, LIFE …) for the

operation, any part thereof or for any earlier phase of this project (including feasibility and preparatory phases)”.

Beneficiaries are asked to provide details accordingly. Should a project proposal indicate that it gives rise to double

funding, clarifications will be sought by the LAG at evaluation stage which may lead to the proposal/part of the

proposed activities being considered ineligible. It is also to be noted that the Application Form also includes a

Declaration to be signed by applicants whereby they confirm that “this project is not being supported through other

Community Funding”.

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