Kiri

Summary of audits for the Recovery and Resilience Facility as carried out by Financial Control Department Ministry of Finance of the Republic of Estonia 18/12/2023  System audits Tallinn Urban Environment and Public Works Department RRF component Sustainable Transport EU measure No EE-C[E]-I [5-4-.5-4-] Name of the Construction of the Tallinn Old Port tram line measure Organization Tallinn Urban Environment and Public Works Department Organization in relation to the Audit carried out Final recipient Audit Authority Recovery and by Resilience Facility Responsible for In the first payment claim: following EE-C[E]-I [5-4-.5-4-]-M [89] milestones and In the second payment claim: targets EE-C[E]-I [5-4-.5-4-]-M [90] Opinion on the Key Requirement 2: Effective implementation of proportionate anti-fraud, anti-corruption following key measures and measures to effectively avoid conflict of interests and double funding – requirements Category I Timetable of the 14/04/2023 - 05/12/2023 audit Public Public procurement No 248480 “Design and construction of a tram line connecting Old Port procurements or and Ülemiste passenger terminal” – tested for compliance with Key Requirement 2 state aid Significant No significant findings findings Final classification Category 1 – Unqualified opinion  Sampling tests To carry out sampling tests, a risk assessment was carried out on the milestones and targets of the third payment claim, as per the Audit Strategy. The purpose of the sampling tests was to ascertain that the milestones and/or targets had been met and that documents annexed to the summary pages give a sufficient assurance on the matter. The population contained 18 milestones and/or targets in total with the following numbers: 7, 24, 41, 47, 49, 63, 76, 78, 82, 92, 95, 96, 99a, 108, 109, 116, 118, and 122. To select the milestones and targets for auditing, the milestones and/or targets would be grouped by financial risk. In addition, when selecting the items for testing, it would be kept in mind that the sample would need to contain at least one case of public procurement, at least one case of state aid, at least one from each of targets and milestones and at least one from each of reforms and investments. Drawing items for the sample would continue until all criteria have been met. By financial risk, three groups emerged. 41 and 99a with high risk, 7, 47, 49, 76, 78 and 92 with average risk and all the rest with low risk. Based on that assessment, a selection was then carried out. From the high-risk group, 41 and 99a would normally be both included. However, since 99a had been previously covered by another audit, it was decided to include that result for 99a instead, with a quick additional review added. Thus, only 41 was selected for sample. The item 41 also contained state aid. From the average-risk group, one item was selected with a simple random equal probability draw. This gave 49 as a result. The item 49 was also a target (previous selection having been a milestone), a reform (previous selection having been an investment) and contained public procurement. From the low-risk group, one item was selected with a simple random equal probability draw. This gave 95 as a result. As the selection would in principle have contained four items (two from high-risk, one from average-risk and one from low-risk groups), but after the deselection of 99a the sample only contained three items, one additional item was selected from all the population with a simple random equal probability draw. This gave 82 as a result. Thus, the final sample for testing included milestones and/or targets No 41, 49, 82 and 95 (four out of 18, or 22,2%), with another previously carried out audit for item 99a added separately.  Milestone: EE-C[B]-I [2-7-.2-7-] -M [41] Creating opportunities for the uptake of renewables-based green hydrogen technologies. Accelerating the Green RRF component EU measure No EE-C[B]-I [2-7-.2-7-] Transition in Enterprises Creating opportunities for the uptake of renewables-based green hydrogen Name of the measure technologies Responsible ministry Ministry of Climate Environmental Investment Responsible authority Audit carried out by Audit Authority Centre Summary Development of project selection criteria, and entry into force of the ministerial decree on the conditions for granting support for projects related to integrated green hydrogen technologies. The terms of reference for this support shall Milestone description include eligibility criteria that ensure that the objectives of the selected projects comply with the ‘Do no significant harm’ Technical Guidance (2021/C58/01) using an exclusion list and the requirement of compliance with the relevant EU and national environmental legislation. Development of project selection criteria. YES Entry into force of the ministerial decree on the conditions for granting support for projects related to integrated green hydrogen technologies. YES The terms of reference for this support shall include eligibility criteria that Milestone verification ensure that the objectives of the selected projects comply with the ‘Do no significant harm’ Technical Guidance (2021/C58/01) using an exclusion list. YES The requirement of compliance with the relevant EU and national environmental legislation. YES Public procurements or state State aid granted in accordance with Commission Regulation (EU) No 651/2014 aid of 17 June 2014 – tested for compliance with State aid rules 1. Regulation of the Minister of Economic Affairs and Communications (signed and published) NOTE – responsible before the Ministry of Climate Files checked for verification 2. Selection criteria as an annex to the same Regulation (sample details, if used) NOTE – a minister in Estonia can adopt either a regulation or a directive, not a decree. Main findings No sampling was used. No findings. Conclusion Milestone achieved  Milestone: EE-C[C]-R [3-3-.3-3-] -T [49] Development of event services and digital gateway for entrepreneurs. RRF component Digital State EU measure No EE-C[C]-R [3-3-.3-3-] Name of the measure Development of event services and digital gateway for entrepreneurs Responsible ministry Ministry of Economic Affairs and Communications Information System Responsible authority Audit carried out by Audit Authority Authority Summary Number of IT development projects contributing to the implementation of the business event services and gateway that have successfully deployed new developments online. These development projects shall be either directly related to the development of the digital gateway for entrepreneurs or to the development of business-event Milestone description services, which additionally include the development of various related systems for interfacing with the digital gateway. As a result of each development project, at least a minimally functional IT solution shall be completed (i.e., the IT solution shall be operational at least in the basic parts for the end users (entrepreneurs) and shall be able to provide feedback for further development needs during the reform implementation period or afterwards). A description of the project and the corresponding developments successfully deployed online, including their contribution to the implementation of the business event services and gateway. YES Milestone verification Steering group’s protocol stating the completion of the IT developments and their testing, and receipt for key works performed. YES Link to the tools, as accessible to the users. YES Public procurement No 239011 “Eesti.ee digital gateway for entrepreneurs Public procurements or state analysis and development 2021-2022” – tested for compliance with Key aid Requirement 2 (measures against conflict of interest) 1. Tender documents 2. Tender in the procurement register Files checked for verification 3. Receipts of works (sample details, if used) 4. Various documents describing the project and development 5. Steering group protocol and slides 6. Links to tools No sampling was used. Main findings No findings. Conclusion Milestone achieved  Milestone: EE-C[E]-R [5-1-.5-1-]-M [82] Adoption of the Implementation Plan for green sustainable public transport development of the Transport and Mobility Development Plan 2021-2035. RRF component Sustainable Transport EU measure No EE-C[E]-R [5-1-.5-1-] Deploy safe, green, competitive, needs-based, and sustainable transport and Name of the measure energy infrastructure Responsible ministry Ministry of Climate Responsible authority Not applicable Audit carried out by Audit Authority Summary The implementation plan shall be approved by the Steering Committee of the Transport and Mobility Development Plan 2021-2035. It shall include the creation of the Tallinn capital region common transport system, actions to facilitate uptake of local biomethane, actions to develop sustainable and active urban mobility in bigger towns following the logic of integrated transport Milestone description corridors, planning multimodal infrastructure, increasing the connections, speed and safety of rail, making the maritime transport sector more competitive, greener and connect it multimodally, developing faster and safer road transport. The implementation plan shall include an annual reporting obligation on the responsible minister to the Government. The implementation plan shall be approved by the Steering Committee of the Transport and Mobility Development Plan 2021-2035. YES It shall include the creation of the Tallinn capital region common transport system. YES Actions to facilitate uptake of local biomethane. YES Actions to develop sustainable and active urban mobility in bigger towns following the logic of integrated transport corridors, planning multimodal Milestone verification infrastructure. YES Increasing the connections, speed, and safety of rail. YES Making the maritime transport sector more competitive, greener and connect it multimodally. YES Developing faster and safer road transport. YES The implementation plan shall include an annual reporting obligation on the responsible minister to the Government. YES Public procurements or state N/A, no public procurements or state aid aid 1. Directive of the Minister of Economic Affairs and Communications (signed and published) NOTE – responsible before the Ministry of Climate 2. Implementation plan added to the same Directive Files checked for verification 3. Annexes 1 and 2 as parts of the implementation plan (sample details, if used) 4. Annexes 3 and 4 of the implementation plan (added and signed separately) 5. Minutes of the Steering Committee Main findings No sampling was used. No findings. Conclusion Milestone achieved  Milestone: EE-C[F]-R [6-1-.6-1-] -M [95] Approval of the Strategic Framework for addressing health workforce shortages. Healthcare and Social RRF component EU measure No EE-C[F]-R [6-1-.6-1-] Protection Name of the measure A comprehensive change in the organization of health care in Estonia Responsible ministry Ministry of Social Affairs Responsible authority Not applicable Audit carried out by Audit Authority Summary The Strategic Framework for addressing health workforce shortages shall outline: - measures on the organization of health care services in the different health sectors, in particular specialized care, Milestone description - allocation of physical and human resources to ensure the provision of health care throughout the territory, - financing, governance, and information exchange mechanisms that ensure performance throughout the country. Measures on the organization of health care services in the different health sectors, in particular specialized care. YES Allocation of physical and human resources to ensure the provision of health Milestone verification care throughout the territory. YES Financing, governance, and information exchange mechanisms that ensure performance throughout the country. YES Public procurements or state N/A, no public procurements or state aid aid Files checked for verification (sample details, if used) 1. Directive of the Minister of Health and Labor (signed and published) No sampling was used. No findings. Main findings Conclusion Milestone achieved  Other audits Audit No ERF-358/2022 of project No 2014-2020.2.04.18-0074 “Building of an advanced general hospital of county-level health center as a part of primary health care network. RRF component Healthcare and Social Protection EU measure No EE-C[F]-I [6-2-.6-2-] Name of the Construction of TERVIKUM measure Organization Foundation Viljandi Hospital Organization in relation to the Audit carried out Audit Authority Final recipient Recovery and by (for Regional Development Fund) Resilience Facility Responsible for following In the third payment claim: milestones and EE-C[F]-I [6-2-.6-2-]-M [99a] targets Opinion based on the original audit Significant findings of operation Timetable of the 19/02/2022 - 17/02/2023 original audit Public Public procurement No 231509 “Construction of Viljandi county hospital and health center” procurements or – procedures that were previously carried out reviewed again for compliance with Key state aid Requirement 2 (measures against conflict of interest) Finding No 4.1 – Public procurement procedure No 231509 was not carried out in Significant accordance with the Public Procurement Act. One condition set by the procurer, namely the findings requirement that a letter of guarantee regarding performance security is to be provided (original audit) solely by a credit institution, has an undue effect of limiting access to the tender process by bidders (Significant finding). No findings (review for Key NOTE – the finding was downgraded to a non-significant finding during the contradictory Requirement 2) procedures of the audit. No significant findings after contradictory procedures (original audit) Final classification No findings (review for Key Requirement 2 – measures against conflict of interest) The summary of audits is approved containing nine (9) pages. Audit Supervisor: Audit Manager: (Signed electronically) (Signed electronically) Kaur Siruli Mart Pechter Head of Financial Control Department Advisor of Financial Control Department  Attn.: Head of Unit European Commission Directorate-General for Economic and Financial Affairs Unit R2 [email protected] Ours 18.12.2023 no 11.1-8/23/3944-1 Office: CHAR 13/056 B-1049 Brussels, Belgium RRF - Second Request for Payment Dear Sir/Madam, We refer to Regulation (EU) 2021/241, notably Article 24 thereof, and the Financing Agreement dated 10.12.2022 and the addendum dated 28.11.2023 between the European Union, represented by the European Commission (the "Commission"), and Republic of Estonia. Terms defined in the Financing Agreement shall have the same meaning herein. We confirm that the relevant milestones and targets referred to under the third instalment for non- repayable support as specified in Section 2: Financial Support of the Annex to Council Implementing Decision (EU) 2023/0161(NLE) have been satisfactorily fulfilled and we hereby request the disbursement of EUR 142 977 720. We have uploaded the due justification for this payment request to the relevant tool as provided by the Commission. Furthermore, we have declared the total cumulative expenditure disbursed up to that moment for the implementation of each reform and investment of the national recovery and resilience plan assigned a positive climate marker under the methodology in Regulation (EU) 2021/241, as contributing to climate change objectives. We confirm that measures related to previously satisfactorily fulfilled milestones and targets have not been reversed. A duly signed Management Declaration and summary of audits carried out are annexed to this letter. We request the payment to be made to the account referred to in Article 8(2) of the Financing Agreement. Yours sincerely, (signed digitally) Urmo Merila Deputy Director General Lõkke 4 / 10122 Tallinn / 663 8200 / [email protected] / www.rtk.ee / Registrikood 70007340 Annexes: Management Declaration Summary of Audits Additional recipients: European Central Bank Siret Soonsein 663 1466 [email protected]  ANNEX I MANAGEMENT DECLARATION I, the undersigned, Urmo Merila, in my capacity as Deputy Director General of The State Shared Service Centre Declare that, in relation to the implementation of the Recovery and Resilience Plan (RRP) approved by the Council Implementing Decision of 07.06.2023 on the approval of the assessment of the recovery and resilience plan for Estonia (2023/0161(NLE)), based on my own judgement and on the information at my disposal, in particular the results from the national control and audit systems described in the RRP: 1. The funds were used for their intended purpose as defined in Article 1(1) of the Financing Agreement Recovery and Resilience Plan between the Commission and Estonia (the ‘Agreement’). 2. The information submitted with the request for payment is complete, accurate and reliable; duly justifying that the milestones and/or targets concerned have been satisfactorily fulfilled and that the audit trail demonstrating the achievement of these milestones and targets is in place. 3. The control systems in place give the necessary assurances that the funds were managed in accordance with all applicable rules, in particular rules on avoidance of conflicts of interests, fraud prevention and corruption in accordance with the principle of sound financial management; 4. The activities implemented to achieve the milestones and targets under the RRP as declared in the request for payment are not financed by any other Union programme or instrument or, where applicable, the other Union programmes and instruments do not cover the same cost. A summary of the national audits carried out in relation to § 1 to 4 above, with an analysis of the related weaknesses found and the corrective actions taken or planned, is complementing this management declaration. In the accompanying summary of the audits, no breaches in terms of fraud, corruption or conflict of interests have been detected. I confirm that the irregularities identified during final audit or control reports in relation to the implementation of the RRP have been appropriately corrected and recovered from final recipients or are in the course of being corrected and recovered. Where necessary, adequate follow-up was given to deficiencies in the control system reported in those reports or is on-going as regards the following required remedial actions: (if appropriate indicate which remedial actions are still on- going, at the date of signing the declaration). With reference to summary of audits of previous payment request we confirm that finding no 4.1 and recommendation made by audit authority to State Shared Service Centre was fulfilled and checklist for checking the fulfilment of milestones and targets has been developed. I confirm that I am not aware of any undisclosed matter, which could harm the interests of the European Union. Place: Tallinn, Estonia, date /in digital signature/ Lõkke 4 / 10122 Tallinn / Estonia / + 372 663 8200 / [email protected] / www.rtk.ee Reg. code: 70007340 /signed digitally/ Urmo Merila Deputy Director General