A letter sent by the European Commission to Bulgaria on May 8 2008 showed the EC's firm position on how Bulgaria managed its EU funds spending.
The full text of the letter was published by Bulgarian news agency Focus on May 13 2008 and shows the EC's attitude towards Bulgaria's efforts in overcoming the problems that led to EC halting payments under all pre-accession programmes.
The letter sent by Michael Leigh director-general of DG Enlargement with the European Commission was addressed to Bulgarian Deputy Finance Minister Dimitar Ivanovski who is also National Authorising Officer (NAO).
The letter assessed the measures Bulgaria had taken to overcome its problems with EU funds spending. Unfortunately, it said that “the steps taken to date do not fully address the points raised in my letter of 28 February.
"They do not provide the Commission with a sufficient basis to determine that the PHARE and Transition Facility contracts concluded by the Finance Ministry and Ministry of Regional Development and Public Works are legal, regular and in conformity with the applicable rules”.
The EC was going maintain the suspension of payments to the two ministries until its concerns had been adequately addressed.
When the EC started freezing payments to Bulgaria in January 2008, the Government decided to continue paying the beneficiaries with its own money in order to avoid the bankruptcy of small and medium-sized firms.
“I would suggest that you take stringent measures to ensure the legality and regularity of any further contracts concluded by these two agencies (within the two ministries) before they are signed,” Leigh said in this regard.
Once again, Leigh said that the corrective measures taken to date were insufficient. “I am, therefore, preparing a recommendation that the Decision of 29 June 2007 on conferral of management under the extended decentralised implementation system (EDIS) be repealed”.
Repealing the decision would mean that, from now on, any transactions by the two agencies concerned would not be considered eligible for financial assistance under the Phare pre-accession aid programme or the Transition Facility.
Moreover, contracts already concluded under EDIS, whose legality or regularity are in doubt, would require financial corrections.
Leigh gave Ivanovski a deadline until June 16 to take the necessary corrective actions set out in the annex to his letter and provide him with a report containing evidence that all these areas of concern were being addressed.
“This report will provide a basis for determining whether to proceed with a recommendation to repeal the EDIS Decision for these two agencies”.
One such measure was for Ivanovski in his capacity as NAO to introduce a new monthly reporting based on a template agreed with the EC.
This should include updated procurement plans, irregularity overview tables, lists of contracts/contractors awarded in the previous month, a summary of results from payment controls and observer role by NAO in evaluation committees.
Furthermore, Ivanovski had to establish a new policy to improve working-level contacts with EC services and provide working level contact persons in each agency that handles EU funding. More open communication to improve transparency and reduce room for misunderstandings would be encouraged.
The lack of proper communication was cited as one of the major problems Bulgaria had with the EU by Miglena Plougchieva, recently appointed as Deputy Prime Minister without portfolio in charge of EU spending in Bulgaria.
In regards to her appointment, Leigh said: “We welcome the appointment of Plougchieva. I had a constructive meeting with her and had the opportunity to explain to her the EC's concerns”.
