National
Development Agency

Hungary has been operating successfully as regards the implementation of National Development Plan I. 17 600 projects receive assistance from a rate of funding of 700 billion HUF. Approximately 600 projects have already been completed and the beneficiaries of these have already received a rate of funding of 480 billion HUF. This is equivalent to 72% of the total framework. Therefore Hungary is also performing well in international comparison; the report issued by the European Commission at the end of August – taking the state of affairs valid at the end of June as a basis – reinforces that Hungary is still ranked third amongst the new member states.

However, project implementation was in many cases delayed and many beneficiaries received funding late. This is why NDA started „spring-cleaning” at the end of March targeting the elimination of arrears, which was successfully completed by the middle of September. According to the latest data, the ratio of invoices in which case payments have not been made for a period of 91-365 days is now 1.15%. Arrears in payment exceeding a period of 1 year have now practically all been eliminated, since the ratio of these is 0.2%. This means that there are 12 project hosts that have not received a part of the assistance for a period exceeding 1 year (10 ECOP, 4 HRDOP). 110 project hosts have been waiting to receive a part of the assistance for a period exceeding 3 months. This affects 0.1% and 0.9% of projects currently being implemented (approximately 12 thousand).

The institutional system registered 60 000 unsettled invoices at the end of March, out of which approximately 40 000 invoices were not paid due to errors committed by the institutional system. 80 000 invoices were paid – also including invoices that were received in the meantime - during the spring-cleaning period; therefore, a rate of funding of 77 billion HUF was transferred to 3400 applicants. As a comparison: 2200 applicants received funding during the same period in 2006; therefore, this year one and half times more applicants received funding. Consequently, only 2500 invoices not paid within a 90-day period due to errors committed by the institutional system still need to be settled, representing a value of 0.9 billion HUF.

The series of measures simplifying the work of applicants and the institutional system, as well as the introduction of the performance-oriented work in the case of the employees of the managing authorities and intermediate bodies contributed to the success of the spring-cleaning action.

The assessment also revealed the most common reasons for delays. From the side of the applicants, documents justifying the grounds of the invoice were in many cases either missing or incomplete; moreover, not all amendments required were undertaken, or were performed late. The way in which the beneficiary is not carrying out the activity set out in the contract, or according to the set schedule also causes arrears in payment. Moreover, the way in which the beneficiary has public debts is a common error. The assistance cannot be transferred until this is settled.

There are also typical errors characteristic of the institutional system. The most significant problem in the course of the implementation of NDP I relates to how the intermediate bodies sent the notification on amendment to beneficiaries in several rounds. This cannot be done within the framework of the New Hungary Development Plan, since it is necessary to draw the attention of beneficiaries to the need of correcting all errors in a single round. The way in which there was a significant degree of variation in the rules of procedure from one programme to the other, as well as how changes could be made to these also made payments difficult. The rules of procedure have been standardised, as has the scope of documents certifying the same activities within the framework of NHDP.

On the basis of experiences gained during the spring-cleaning action, the National Development Agency will assess whether it is necessary to increase the number of experts at the intermediate bodies in order to make the implementation of the two national development plans more efficient. In addition, the Agency also finds it necessary to harmonise the rules of procedures of NDP I and develop IT support.