N.3.1 De commitment and financial planning
The European Commission pays the EU funds to the MA/JS only in accordance with the corresponding budget commitments of the Programme.
If EU funds are not spent in accordance with the defined schedule the European Commission will de-commit the unspent funds from the Programme¹.
¹ REGULATION (EU) 2021/1060, Article 105
The Programme and project commitments and spending are interconnected. In the application, the project has to set out its spending plan (commitments). During project implementation, the lead partner must request payments in accordance with the reporting timeframe established in BAMOS+ and at least to the extent defined in the spending plan. Underspending may result in de-commitment.
It is thus essential that the projects avoid underspending. To avoid or to minimise the risk of projects underspending the MA/JS recommends the following for the application stage:
the spending target of the overall project should derive from the targets on the partner level. Therefore, it is essential that every partner has its own realistic spending plan, and
the spending rate of a project is usually lower at the beginning of the implementation phase. Therefore, projects should not plan too ambitious spending rates for the beginning of the project, unless they can be assured of a swift start.
N.3.2 De-commitment calculation
In cases where the Programme faces de-commitment and the de-commitment cannot be secured by other means the MA/JS will reduce budgets granted to the delayed projects.
The de-commitment would – in the first instance – concern projects whose implementation phase is half finished and whose underspending equals or exceeds 10% compared to the spending plan in the application. The MA/JS has defined this threshold of 10% based on the experience that project spending is delayed in the first months and that an underspending of 10% can be tolerated. Nevertheless. should the Programme’s de-commitment amount in question not be compensated by the project budget cuts the 10% threshold will be further lowered and additional projects might be included in the de-commitment procedure.
The final decision on which projects are affected by the de-commitment will be based on an assessment of the project’s spending plan as specified in the application form and the actual spending rate of the projects.
The reference period for the calculation of the project funds to be de-committed starts with the project’s first reporting period. It ends with the most recent reporting period of the year which is affected by the de-commitment.
For the reference period, the difference between the project’s target (sum of planned payment requests (ERDF only)) and actual requests for payments (sum of eligible payment requests and payments (ERDF only)) – both cumulated until the end of the latest reporting period – is calculated in % and EUR. The amount in excess of the 10% threshold is the maximum amount to be de-committed from the project’s ERDF funding.
After the European Commission provides official information about the amount to be de-committed from Programme funds, the MA/JS calculates the amount to be de-committed from the project funds.
As a result, the affected projects must lower the ERDF co-financing budget. The MA/JS will communicate the respective procedures to the partners, should such a situation occur.