In early 2020, the outbreak of COVID-19 changed the economic, social and budgetary outlook in Spain, the European Union (EU) and the world. This demanded and still demands today a coordinated response at both a national and European Union level to deal with the effects of the pandemic. Although all countries have been affected by the pandemic and the restrictive measures implemented to control it, the economic impact has been disparate, complicating the Union’s process of convergence and cohesion.
The Member States' capacity to deal with the economic consequences of the pandemic will depend on their budgetary room for manoeuvre to take measures that mitigate, as far as possible, the social, financial, and health impact of the crisis.
As established in the Recovery and Resilience Facility Regulation, for a Member State to be eligible for a financial contribution, it was required to submit a recovery and resilience plan. The Government of Spain submitted its Recovery, Transformation and Resilience Plan (PRTR) on 29 April 2021. The PRTR has been evaluated extremely positively by the services of the European Commission, obtaining the highest rating in ten of the eleven variables analysed. The Council’s economy and finance ministers (ECOFIN) approved the Spanish Plan at a meeting on 13 July. The milestones and targets associated with the reforms and investments detailed by each Member State will have to be achieved according to the timetable and description included in the Council Implementing Decision (CID).
The six pillars on which the process of recovery and resilience building is based are as follows:
For a Member State to receive a financial contribution, it must submit a recovery and resilience plan. The Spanish State presented the Recovery, Transformation and Resilience Plan on 29 April 2021, which is currently validated by the European institutions. The milestones and targets associated with the reforms and investments detailed by each Member State will have to be achieved according to the timetable and description included in the Council Implementing Decision (CID).
As it is part of the Recovery and Resilience Facility (RRF), the regulations that apply to it are both at national and European level, in particular and without prejudice to the regulations that develop the content of the RRF and the Recovery, Transformation and Resilience Plan, among others:
Commission staff working document - Guidance to Member States Recovery and Resilience Plans - Part 1
Guidance to Member States Recovery and Resilience Plans - Part 2
Annex to the Guidance to Member States on the Recovery and Resilience Plans: Tables for the template
The RTRP is designed to cover a wide range of reforms and investments, which is why the RTRP is mainly aimed at Spanish consumers and companies. One of the main objectives of the RTRP is to improve SMEs (small and medium-sized enterprises), seeking to promote an economic recovery that leaves no one behind, improving the ecological and digital transition of our country. Also the bodies of the General State Administration, Autonomous Communities and Local Entities and any other public sector entities, which will also manage the RTRP, favoring the co-governance of our country, channeling the funds they are going to receive and the milestones and
CID objectives that each participant must meet in an appropriate manner.
The milestones and targets included in the RTRP have to be associated with measures, i.e. reforms and investments that have been implemented between February 2020 and August 2026.
The configuration of the Recovery and Resilience Facility as a results-oriented funding instrument and the binding nature of the milestones and objectives set in the Recovery, Transformation and Resilience Plan at country level to be achieved with the action of all the Public Administrations involved, and the commitment that each one of them acquires in this respect must be clear.
All participants are responsible for their fulfilment, including Ministries, Autonomous Communities, local entities, other public sector entities (whether state, regional or local), private sector beneficiaries, such as contractors, subcontractors and grant recipients, and other end beneficiaries. We are all responsible for achieving the CID milestones and targets that correspond to us, transferring this responsibility to those who receive the RRF funds.
Good management of the Recovery, Transformation and Resilience Plan (RTRP) will depend mainly on establishing an adequate management and monitoring system, through the design of strategies and instruments to ensure its effective impact.
The management of the funds of the Recovery and Resilience Facility (RRF) corresponds to the Public Administrations, which is why they must have a global vision of the projects in which the different measures are specified (in the RTRP 102 Reforms and 110 Investments are incorporated, with a total of 416 Milestones and CID Objectives). Thus, the management and monitoring system will incorporate the different projects that specify the objectives agreed with the EU in the RTRP, and will allow the monitoring of the amounts reflected in euros and through the defined indicators (in indicator units, for example: number of projects, kilometres, hectares, actions, etc.), which will be required of those who participate in the management of the RRFF.
Those responsible for executing the measures will have to define and plan the projects that will materialise the PRTR measures in accordance, at all times, with the
CID, or any other monitoring provisions established by the European Institutions to which Spain commits, and record their undertakings in the management and monitoring system.
The management and monitoring system is a fundamental instrument intended to accomplish the milestones and targets set out in the
CID by defining, planning, executing, monitoring and controlling the projects and sub-projects into which the measures (reforms or investments) included in the Recovery, Transformation and Resilience Plan’s components are broken down. For these purposes, an information system supported by a computer application called CoFFEE-MRR has been configured. The system allows information flows to be channelled between the different agents involved in managing the Plan, facilitating compliance with the requirements outlined in the applicable EU and national regulations.
According to Royal Decree-Law 36/2020, the Competent Authority is the Secretariat General for European Funds. It will, therefore, be responsible for ensuring the correct functioning of the system, which will be used by decision-making and management bodies at the three different levels of Public Administration (state, autonomous community and local) and be available to EU authorities and the Control Authority to facilitate the functions that correspond to them under the applicable regulations. Documentation accrediting the achievement of the milestones and targets, as well as duly formalised management reports, will be held in the system.
Non-compliance with the Recovery, Transformation and Resilience Plan (RTRP) by any of the entities or beneficiaries (legal or natural persons) that have received funding under the Recovery and Resilience Facility (RRF) leads to an obligation to repay these funds. This non-compliance can mainly arise from not complying with the established timetable, not reaching the milestone or
CID target to which they have committed, not complying with any of the principles established in the RRF regulations, among others:
In particular, the reimbursement is articulated in accordance with
Article 7 of Law 11/2020, of 30 December, on the General State Budget for the year 2021, which establishes:
"In the public bodies and other state public sector entities with an estimated budget, the Autonomous Communities and Local Corporations and their dependent entities, the income from grants received from the General State Administration, from the Recovery and Resilience Facility and REACT-EU, are legally earmarked to finance the projects or lines of action included in the Recovery, Transformation and Resilience Plan, with the degree of detail specified therein. In the event that the expenditure is not incurred or in the event of total or partial non-fulfilment of the planned objectives, the aforementioned entities must reimburse the funds received to the Public Treasury. The repayment procedure for these purposes shall be regulated by Order of the head of the Ministry of Finance.
In the case of the financing of projects managed by private entities, through the two aforementioned instruments, the articulation of such financing must be linked to the fulfilment of the objectives foreseen in the plan, as well as to the estimation of costs linked to them. In the event of non-execution of the expenditure or in the event of total or partial non-fulfilment of the objectives foreseen, the above-mentioned entities must reimburse the funds received. The refund procedure for these purposes shall be regulated by Order of the head of the Ministry of Finance."
Royal Decree 682/2021, of 3 August, which develops the basic organic structure of the Ministry of Finance and Public Administration and amends Royal Decree 139/2020, of 28 January, which establishes the basic organic structure of the ministerial departments, establishes explicitly that the Secretariat General for European Funds is the competent authority accountable to the European Institutions in matters concerning the Recovery and Resilience Facility. Among other aspects, the aforementioned article refers to coordination functions that require it to act as a point of contact for the European Commission in terms of monitoring progress towards the Plan’s milestones and targets.
The Recovery, Transformation and Resilience Plan (RTRP) establishes that the Secretariat General for European Funds, in its capacity as Responsible Authority, is responsible for monitoring and integrating the management information and results carried out by the bodies responsible for each component.
As established in Article 20 of Royal Decree-Law 36/2020, of 30 December, which approves urgent measures for the modernization of the Public Administration and for the implementation of the RTRP, the management center of the Ministry of Finance with competence in European funds (Secretariat General for European Funds) will act as the responsible authority before the European institutions, in the terms established in the European regulations, developing for this purpose the competencies established by law and regulations.
Article 20(2) of the same legal text sets out the functions to be exercised by this management center:
a. Coordination, as a point of contact with the European Commission.
b. Ensure coordination with ministries, public bodies, autonomous communities and local entities and other national and community entities involved in the National Recovery, Transformation and Resilience Plan.
c. Monitoring progress with respect to the milestones and targets of the Plan.
d. The submission of the reports foreseen in the RRF regulations, of the requests for payment of the financial contribution and, where appropriate, of the loan tranche foreseen therein. All of the above, on the basis of the results of the checks carried out.
e. Steering the Technical Committee of the Recovery, Transformation and Resilience Plan, coordinating its work.
f. The technical secretariat functions of the Sectoral Conference of the Recovery, Transformation and Resilience Plan.
4.6 of the Recovery, Transformation and Resilience Plan regulates Control and Audit. It is structured around the following controls:
a. Internal control of the implementing body (Level 1). Scope of each body responsible for the implementation of an action. This is a primary and basic control. It includes regulations aimed at preventing fraud, corruption, conflict of interest and double financing.
b. Internal control by an independent body (Level 2). Entrusted to the independent internal control bodies of the various administrations involved. They act with complete autonomy and independence. In ministries and public bodies it is the
delegated intervention (under the Ministerio de Hacienda y Función Pública) and in public companies and business entities its own internal control bodies that act independently of management. The role of
legal advice services is also important in this area.
c. National ex-post controls and audit regime. The IGAE is the Supervisory Authority of the RRF. An audit strategy shall be approved and updated at least annually. The methodology of the IGAE audits will be based on the methodology of the Structural Funds, with the fundamental difference being the emphasis on the verification of compliance with milestones and targets. The supervisory authority shall coordinate the activity of the Autonomous Regions to ensure that the work to be carried out is carried out properly.
d. Audits on payment requests sent to the Commission. They provide assurance to the Commission on the achievement of the relevant milestones and targets.
e. Audits on the existence of adequate measures to prevent, detect and correct fraud, corruption and conflicts of interest. It will be based on the methodology foreseen in the area of Structural Funds control on the issue. As for the differences:
The IGAE will carry out these audits. The results of the audits will be included in the summary of audits
(Article 22.2.c) .ii) of Regulation (EU) 241/2021, of 12 February, which establishes the Recovery and Resilience Facility).
f. Audits on double financing of projects/linkage of expenditure to RRF. To be included in the audit strategy.
g. Audits of legality and regularity of expenditure: national control systems. IGAE and General Intervention Boards of the Autonomous Communities.
h. Coordination in the fight against fraud. The National Anti-Fraud Coordination Service (‘SNCA’) will be at the heart of the model. A specific complaints channel will be set up. The SNCA shall exercise its powers in full independence.
The Supervisory Authority of the Recovery and Resilience Facility is the General Intervention Board of the State Administration (IGAE). It will be responsible for exercising the functions and powers attributed by European legislation to the supervisory authority of the European Recovery Instrument (article 21 of Royal Decree-Law 36/2020 of 30 December, approving urgent measures for the modernization of the Public Administration and for the implementation of the Recovery, Transformation and Resilience Plan).
The functions assigned to the IGAE in this area are:
The Monitoring Report is a monthly report that evaluates progress towards the milestones and targets and the budgetary execution at the different levels of the defined plan, thus making it possible to detect any potential deviations from that plan and take the necessary corrective actions.
The Forecast Report is a quarterly report which identifies possible risks of non-compliance and deviations from planning and establishes, where necessary, the appropriate preventive or corrective actions.
The Management Report is the document whereby the signatory takes responsibility for the information contained therein in relation to the implementation of the Recovery, Transformation and Resilience Plan.
This document certifies the status of the corresponding milestones and targets and the other requirements of
Regulation (EU) 241/2021 of 12 February establishing the Recovery and Resilience Facility, as well as the accounting information on the expenditure incurred.
The Management Reports shall constitute the basis for the accreditation, to the Community Authorities, of the fulfilment of milestones and targets and the regularity of the underlying operations.
Article 22(2)(c) of Regulation (EU) 241/2021 of 12 February establishing the Recovery Facility determines that the payment application shall be accompanied by two documents, on the one hand a summary of audits and controls carried out, including the deficiencies detected, as well as the corrective measures taken, and on the other hand a management declaration.
The Management Declaration is the document indicating that the funds have been used for the intended purpose, that the information submitted with the payment request is complete, accurate and reliable and that the control systems put in place provide the necessary guarantees that the funds have been managed in accordance with all applicable rules, in particular the rules on the prevention of conflict of interest, fraud, corruption and double financing from the Facility and other Union programmes, in accordance with the principle of sound financial management.
11.1.g) of Royal Decree 682/2021, of 3 August, it is established that the Secretariat General for European Funds, as the authority responsible for the RRF, is responsible for:
"The submission of the reports provided for in the Recovery and Resilience Facility regulation, the requests for payment of the financial contribution, the corresponding statement of assurance and, where appropriate, the loan tranche provided therein, all on the basis of the controls carried out by the IGAE. Everything is contingent on the results of the controls carried out under the terms and conditions provided for in the regulation governing the Recovery and Resilience Facility."
This is the document by which Spain may request payment of the amounts established in the Recovery, Transformation and Resilience Plan once it has complied with its provisions. Thus, Article 24 of Regulation (EU) 241/2021 of 12 February, establishing the Recovery and Resilience Facility, regulates the rules linked to the payment, in such a way that, once the corresponding agreed milestones and targets have been reached (these are included in the Annex to the Council Implementing Decision, distributed in eight instalments), the Member State must submit to the Commission a duly justified request (an audit summary and the Management Declaration, Article 22.2 of Regulation 241/2021), for payment of the financial contribution and, where appropriate, the loan.
In line with Recital 53 of Regulation (EU) 241/2021 and the above-mentioned Article 24, Member States should be able to submit payment requests twice a year. Spain has opted for this alternative, submitting a maximum of two payment requests per year.
As indicated in the previous answer, payments are to be made in tranches, which are included in the Annexe to the Council Implementing Decision. The Commission shall, on a preliminary basis and without undue delay, and at the latest within two months of receipt of the request, assess whether the relevant milestones and targets have been satisfactorily met. Satisfactory compliance will presuppose that the Member State has not revoked measures related to previously satisfactorily meet milestones and targets.
If the Commission's preliminary assessment is positive, it shall submit its conclusions to the Economic and Financial Committee and ask it to deliver an opinion, taking the same into account for its assessment. Following a positive assessment by the Commission, the financial contribution will be disbursed without undue delay.
According to Article 24.6 of Regulation 2021/241 establishing the Recovery and Resilience Facility, “If, as a result of the assessment referred to in paragraph 3, the Commission establishes that the milestones and targets set out in the Council implementing decision referred to in Article 20(1) have not been satisfactorily fulfilled, the payment of all or part of the financial contribution and, where applicable, of the loan, shall be suspended. The Member State concerned may present its observations within one month of the communication of the Commission’s assessment”.
All payments of financial contributions to Member States shall be made by 31 December 2026.