Indirect management with the partner country versus budget support

Indirect management with the partner country is, whatever the scope of delegation, a transfer of budget-implementation tasks from the Commission to the partner country. The policy choices have been made by the Commission even if they were normally established, given the aid effectiveness principle of ownership, in agreement with the partner country. The Commission remains politically responsible, within the framework of the discharge, for how the partner country carries out the budget-implementation tasks entrusted to it. For this reason, the Commission puts in place controls on the entity that carries out these tasks.

Budget support constitutes a transfer of EU resources to the national treasury of a partner country in support of a national development or reform policy and strategy (or in support of a sector programme in the case of sector budget support) conditional upon the achievement of defined results by the partner country. It is paid after the results have been obtained and could, hence, not have been used to achieve them. The funds are fungible and become a part of the overall budget resources of the partner country. They are spent through its normal systems and are not and do not have to be traced by the Commission further. The political responsibility of the Commission ends where it paid the budget support after having ascertained itself that the conditions are fulfilled (disbursement criteria). One of the basic conditions is, however, that the public finance management (i.e. the management of the country's overall budget resources) is sufficiently transparent, accountable, reliable and effective.

Further information on budget support may be found at:

https://myintracomm.ec.europa.eu/dg/devco/eu-development-policy/budget-support-macroeconomic-analysis/pages/guidelines.aspx (link to DEVCO intranet — accessible only to Commission staff)

Although the objectives and some of the means used are similar (e.g. increasing ownership and responsibility of the partner country by allowing that country to use country rules, procedures and systems), budget support (under direct management) as compared to project modality under indirect management with the partner country entails very different roles and responsibilities for the Commission.

It is thus important for the responsible authorising officer to bear these elements in mind when the aid delivery method and the management mode are chosen.