Management mode (or method of implementation) is the term to describe the legal (contractual or legislative) arrangement through which the implementation of an action is managed and the way funds are channelled to the recipients. The management modes foreseen by the Financial Regulation (FR) are:
- Direct management: the Commission (i.e. its departments either in Headquarters or in EU delegations, or an EU executive agency) selects the recipients (running the procurement and grant award procedures preceding the conclusion of such contracts, including the award and rejection decisions), is the party to the contracts with them and manages these contracts (making payments, accepting or rejecting deliverables, enforcing the contract, carrying out checks and controls, recovering funds unduly paid).
Budget support is always implemented in direct management.
- Indirect management: the Commission delegates the implementation of an action including the award and management of contracts either to a partner country or to an organisation that has been pillar-assessed (or, exceptionally, an EU decentralised agency). Please note that policy choices may not be delegated. As prescribed by Article 62 FR, the following entities are eligible for indirect management:
(a) partner countries or the bodies they have designated;
(b) international organisations or their agencies;
(c) public law bodies, including Member State organisations;
(d) bodies governed by private law with a public service mission, including Member State organisations, to the extent that they provide adequate financial guarantees. Financial guarantees is to be understood as financial backing provided in line with existing EU law requirements by a Member State to such private law bodies in a form to be decided by that Member State and which does not necessarily require a bank guarantee;
(e) bodies governed by private law of a Member State that are entrusted with the implementation of a public-private partnership and that provide adequate financial guarantees;
(f) bodies or persons entrusted with the implementation of specific actions in the CFSP pursuant to Title V of the Treaty on European Union, and identified in the relevant basic act;
(g) the European Investment Bank (EIB) and the European Investment Fund (EIF) or both acting as a group (the EIB group); or
(h) an EU decentralised (not executive) agency.
When providing financing to third parties the implementing organisation / partner country either uses the Commission's rules (Practical Guide to Contract Procedures for EU External Actions (PRAG) for grants and public procurement) or follows its own rules if they have been positively assessed in the ex-ante check known as pillar assessment.
- Shared management: the Commission delegates the implementation of an action/programme to a Member State (acting through its managing authority). About 80% of the general budget of the EU is implemented in shared management, in particular in the structural funds and the common agricultural policy. DG DEVCO does not apply shared management.