Presidency of the Council of Ministers - ENI CBC MED PROGRAMME

SELECTION OF AUDITORS BY PROJECT BENEFICIARIES

The expenditure verification required by article 32 of the Implementing Rules shall be carried out by private external audit firms only. The beneficiary will be required to pick an auditing firm which must be registered at the Lebanese Association of Certified Public accountants (LACPA) according to the requirements set by the ENI Implementing Rules (art. 32) and in compliance with the following national requirements:

The beneficiary provisionally selects an auditor (member of LACPA) through a transparent, fair and competitive procurement procedure.;

The beneficiary submits an official letter requesting the prior approval of the Control Contact Point at mchreif@pcm.gov.lb with the following attachments:

A notification of the name of the External Auditor filled/signed/stamped by the beneficiary using this template (Model 1) along with all required annexes;

A declaration filled/signed/stamped by the auditor using this template (Model 2) along with all required annexes;

The full procurement procedure (Request for Quotation, quotation received, evaluation report (if any)).

The Control Contact Point reviews all the documents and conclude a decision the soonest possible;

The beneficiary signs the service contract with the auditor and sends a soft copy to the National Authority.

The chosen audit firm will verify the expenses declared in each payment claim, according to EU rules and procedures and the requirements of the grant contract. The procedure shall be as follows:

SUPPORT TO MANAGING AUTHORITY IN RECOVERIES

The Managing Authority shall in the first instance be responsible for making the financial corrections required and pursuing recovery in connection with individual or systemic irregularities detected in projects, technical assistance or the Programme.

After issuing a recovery order the financial corrections may involve:

Reducing the amount of the EU contribution reimbursed to programme bodies receiving Technical Assistance funds;
Off-setting the cancelled amount against a future payment of an EU contribution to the project beneficiary(ies) or the programme bodies receiving technical assistance funds;
Recovering the amounts of EU contribution unduly received from project beneficiary(ies) or the Programme bodies.

The body responsible for the support in the recoveries is:

The Presidency of the Council of Ministers through the National Contact Point

SUPPORT IN ANTI-FRAUD MEASURES AND IN PREVENTING, DETECTING AND CORRECTING IRREGULARITIES

Lebanon will follow the general procedures, as defined in this DMCS document. The bodies responsible for this support shall be:

The Presidency of the Council of Ministers

The body responsible for the relationship with OLAF, as indicated in art. 7 of Special Conditions of FA, is the PCM acting as National Authority of the Programme.

As far as the prevention, detection and correction of the irregularities are concerned, in addition to the general procedures foreseen by the Programme, the following actions will be carried out:

a) Preventive actions:

Drafting of a national manual/informative notes concerning the Lebanese national legislation applicable for the implementation of projects;
Training of the staff working within the Lebanese Programme bodies on the specific rules of the Programme and ensuring training of project auditors in cooperation with the MA;

b) Detective actions:

Quality check on the expenditure verification reports may be performed by the CCP;
Supporting MA on the spot checks through the CCP;
Follow up monitoring by NA (NCP) in cooperation with the JTS and MA.
Informing immediately the MA and the NA (in the event the error has been detected by the CCP or the NCP) on recurrent errors.

c) Corrective actions:

Ensuring the cooperation with the MA on the adoption of proportionate corrective measures, including financial corrections, taking into account the nature and gravity of the irregularity, including flat rate corrections, if relevant;
Inform all national stakeholders, including project beneficiaries, in order to prevent the same irregularity in the future.

TAX EXEMPTION

In order to get the tax exemption, the project beneficiaries should submit a specific request to the Ministry of Finance.

Tax and customs provisions are determined by the framework agreement signed between the EU and Lebanon and concluded under Law no 26 / 2015, with all its eventual modifications or replacements. Reference is made to this under the Financing Agreement specific to the ENI CBC 2014-2020 Programme.

OPENING BANK ACCOUNTS IN EURO

All Lebanese beneficiaries may open a bank account in euro. However as far as the public entities identified in the Special Conditions of the Financing Agreement (ministries/administrations) are concerned, they must follow a specific procedure set into force following the circular issued by the President of the Council of Ministers N. 14/2011 dated August 3, 2011 by the memorandum issued by ministry of finance number 3510/s1 dated November 21, 2011 and adjusted by the memorandum number 1257/s1 dated April 2, 2012. The bodies responsible for this procedure are:

The Presidency of the Council of Ministers
Ministry of Finance
Lebanese Central Bank

Any monetary grant to a ministries/administration (beneficiary) shall be deposited in an account for “grants and donations” opened under the Ministry of Finance treasury account in the same currency of the received grant.

Treasury account for grants and donations in Euro is:
Number 700362123-69 IBAN LB 56 0999 0000 0001 0697 0036 2123

A project special account shall be requested by the beneficiary. This special account will be opened under the main account of Ministry of Finance but managed by the beneficiary.

INTEGRATION OF PROJECT BUDGET IN THE PUBLIC BUDGET

Ministries/administration will need to follow the national procedure to integrate the project budget within national budget according to the above mentioned circular n. 14/2011.
The grant procedure is described as follows:
Step 1:
Monetary grants shall be accepted only through a decision from the Council of Ministers followed by a decree.
The decree shall contain the following:

Approval of the grant in its whole value.
Implementation period of the project funded through the grant.
Delegation to the Ministry of Finance to open a credit account for the funds transferred from the donor during the whole period of implementation of the project.
Grant expenditure appropriation for its whole value.

Step 2:
Upon decree issuance, a project special account shall be requested by the beneficiary. This special account will be opened at BDL in the same currency of the received grant, under the main account of Ministry of Finance but managed by the beneficiary.
Cash grants transferred to “grants and donations” account shall be channelled each time to the project special account opened at BDL through Emergency Budget Advance that is issued automatically once it is requested by the line ministry/administration (beneficiary).

Step 3:
Expenditure shall be managed by the grant’s beneficiary, following the donor rules and procedures or as stipulated by the financing agreement.
Remaining funds at the end of each year will be carried forward through a request made by the beneficiary as stipulated by the public accounting law and the budget law of 2017.
Emergency Budget Advances support documents shall be in two copies, one for the donor’s usage and the second for the Ministry of Finance.

Step 4:
Beneficiary shall deposit Cash Management Department at Ministry of Finance on semi-annual basis, within maximum seven days, financial report showing the accounts movements versus appropriations.