SCOs and FNLC in practice in the IPA countries

For the European Investment Funds (ESIF) 2021-2027 programming period, SCOs and FNLC have been put forward as key to reducing administrative burden and costs for beneficiaries and managing bodies, while maintaining a high level of assurance of legality and regularity.

Estimates suggest a reduction of total administrative costs by 20-25% if these options are applied consequently (COM(2018) 375 final, 2018). The overall objective of the study has been to promote better and smarter practices in Interreg programmes in Central and South East Europe in the 2021-2027 programming period with the aim of helping them in designing and implementing SCOs. Through the study, empirical evidence has however suggested that 2021-2027 Interreg IPA programmes do not use any FNLC. Moreover, SCOs are used nearly exclusively at the so-called lower level, i.e. not making use of the upper level options provided by Article 94 of the Common Provision Regulation.

Overall, the study confirms that SCOs offer significant potential to simplify administrative processes, reduce errors and increase efficiency, in particular by automating calculations and freeing up resources for on-the-spot checks. However, their successful implementation requires careful consideration of cost structures, as inadequate approximations and excessive flexibility can undermine fairness and effectiveness. This topic is also particularly important for EU candidate countries which are willing to implement IPA III operational programmes or further preparing for EU accession, especially for chapter 22.