Regulations on the Cohesion Fund: Council Regulation (EC) No. 1164/1994 establishing a Cohesion Fund, amended by Council Regulation (EC) No. 1264/1999 and 1265/1999, as well as Commission Regulations connecting to these; national legislation: Government Decree No. 1/2004 (I. 5.) and 360/2004 (XII.26.), as well as connecting Ministry Decrees (Commission Regulation (EC) No. 1386/2002, etc.)

The tasks detailed below relate to managing and monitoring implementation, and financial management and control: 


Cohesion Fund Managing Authority

In accordance with the Council Regulations referred to above, the Cohesion Fund Managing Authority (CF MA) is responsible for the implementation of projects approved by the Cohesion Fund, which consequently constitutes the central component of the Cohesion Fund institutional system. The CF Managing Authority bears overall and general liability for reconciling operations relating to Cohesion Fund use.   

The MA is responsible for coordinating the implementation of approved projects, which covers the following:

Development of the Cohesion Fund framework strategy and ensuring compliance with the specific operational programmes of the National Development Plan;
Compiling the list of projects proposed for Cohesion Fund financing on the basis of proposals put forth by the intermediate bodies, and submitting this list to the Government, followed by the control of applications and submitting these to the European Commission;   
Approval of head of intermediate body appointments;
Ensuring compliance of proposed projects with the directives of the European Community, as well as the National Development Plan;
Negotiations with the European Commission in connection with the use of funding granted from the Cohesion Fund;
Development of financial and procedural guidelines adjusted to the use of funding granted from the Cohesion Fund;
Managing evaluations relating to the use of funding;
On-going monitoring of the use made of funding granted from the Cohesion Fund; monitoring whether requirements needed for this are satisfied, in order for intermediate bodies to be able to use the funding granted by the Fund in an efficient and regular manner;  
Operation of the Standardised Monitoring Information System (SMIS);
Operating and managing the Cohesion Fund Monitoring Committee;
Reconciling and undertaking tasks in connection with publicity and providing information on assistance granted from the Cohesion Fund;
Operating the reporting system within the scope of competency of the MA and sending reports to authorised organisations.

Dr Péter Heil, Vice President, is the head of the CSF Managing Authority within the scope of the National Development Office.

Cohesion Fund Intermediate Bodies

Organisations set up under the management of the ministry of the two supported sectors (namely, environmental protection and transport) play a key role in the implementation of projects approved by the Cohesion Fund, which organisations undertake operational tasks connecting to implementation. Accordingly, the two intermediate bodies undertake the following tasks: 

Develop a proposal for the Cohesion Fund framework strategy;
Compile the list of projects recommended for financing from funding granted by the Cohesion Fund within the concerned sector;
Compile applications for funding describing project proposals in detail;
Collaborate in the implementation of public procurement procedures required for implementing projects;
Ensure the preparation of all documents needed for project preparation and implementation; review of the quality of these by an independent expert/consultant; 
Make sure that preconditions and permits/license required for the planned and efficient implementation of the concerned project are set up and available prior to the submission of applications;   
Concluding assistance contracts with the beneficiaries of the project;
Compiling financial statements and forecasts;
On-going monitoring of the implementation of projects; supervision of physical implementation; 
Certify physical and financial performance; organise payments and applications for assistance;
Upload data required for updating the Standardised Monitoring Information System, monitoring indicators, as well as evaluation;
Registration in the accounting and archives registry;
Undertake and reconcile tasks in connection with publicity and providing information on projects receiving funding granted from the Cohesion Fund under the management of the Intermediate Body; Compile a communication action plan reconciled with the Managing Authority; maintain a website; 
Regular and case-by-case provision of data to the Managing Authority and Paying Authority;
Identify and analyse problems constraining implementation; developing and implementing measures targeting the solution of these in cooperation with the Cohesion Fund Managing Authority.

Intermediate Bodies:

Ministry of Economy and Transport:
Ministry of Environmental Protection and Water:

Cohesion Fund Beneficiaries and Implementing Organisations

The beneficiaries are the ones that effectively implement the projects. In the case of transport projects, the transport and road network (motorway) companies (e.g. Hungarian State Railway, National Motorway Company) are the organisations implementing projects, which organisations generally implement several projects receiving funding granted from the Cohesion Fund concurrently. Local governments or local government associations are the beneficiaries of environmental protection projects. Therefore, intermediate bodies may delegate certain tasks – pursuant to the approval and consent of the Managing Authority responsible for setting up the institution system – within the scope of the Assistance Contract to implementing organisations or beneficiaries. The scope of delegated tasks may vary according to organisation. However, in general terms, in addition to implementing public procurements, these organisations are responsible for managing the physical implementation of projects, certifying performance, administering invoices, as well as on-going reporting to the Intermediate Body. Implementing organisations and beneficiaries keep in contact with the intermediate bodies.

Implementing Organisations:

Hungarian State Railway:
Road Management and Coordination Directorate:
National Motorway Company:

Unit for Procurement Coordination and Control (UPCC)

UPCC, as government advisory body, undertakes quality assurance of co-financed projects and tenders and the assessment of public procurements. (

Monitoring implementation

Cohesion Fund Monitoring Committee

A separate Monitoring Committee is set up for monitoring the implementation of projects receiving funding granted from the Cohesion Fund, the scope of tasks and competency of which organisation can be summarised according to the following:

Regular assessment of progress made in the course of the implementation of assistance targets, review of the results of implementation, with special regard to reaching targets set in the case of specific projects;
Analysis and approval of annual and final implementation reports, and submitting these to the European Commission.

Standardised Monitoring Information System (SMIS)

The objective of SMIS is to provide support for data registration and processing required for the efficient and transparent operation of the tendering system. 

SMIS ensures access to data registered in the system, as well as the potential for further processing of this data, through which means it is promotes the on-going and updated uploading of the database, in addition to enabling system users to undertake their daily work in a comfortable and efficient manner. Naturally, the system feeds processed data to statistics and analysis functions as well.    

Financial management

Paying Authority

The Ministry of Finance ( has been nominated as Paying Authority in the case of the Structural Funds and the Cohesion Fund, pursuant to which the Ministry is responsible for compiling and submitting requests for funding, as well as receiving payments from the Commission. The Paying Authority also undertakes the following within the scope of responsibility:  

Submits a payment forecast to the Commission each year up to 30 April;
Administers payments to the accounts of the Funds;
Compiles certified requests on the basis of effective expenditures of beneficiaries, and submits these to the Commission;
Ensures that final beneficiaries receive EU funding as quickly as possible;
Repayment - to the Funds - of financial corrections applied due to irregularities or events arising in the course of programme management, or pursuant to the detection of administrative errors; compiles a statement on repayments on an annual basis and submits this report to the Commission.


Every institution or body that is involved in the implementation of funding granted from the Cohesion Fund is required to set up and operate its own internal control unit, which organisational unit undertakes conventional internal audit tasks. In accordance with legislation in effect, every budgetary organisation is required to operate an internal audit unit, which reports directly to the management. The internal audit units of ministries (reporting directing to the minister or the state secretary) and the internal audit units of managing authorities and paying agencies (reporting directly to the MA/PA management) are functionally and structurally independent.   

Government Control Office

GCO is responsible for verifying that payments have been performed in compliance with applicable rules and regulations at the end of the project, in addition to issuing a compliance clause and undertaking mandatory project controls covering a minimum 15% of certified expenditures.  (

State Audit Office

SAU examines/is authorised to examine the operations and financial management of specific players within the framework of verifying the implementation of the state budget. (