The importance of the economic and administrative management in the use of public funds.
Given the importance of a correct economic-administrative management of public funds, below are some keys to guarantee success and comply, not only with the complex regulations of public administrations, but also to maximize the results of innovative actions and minimize risks that entail legal and financial consequences for the beneficiary entities.
The innovative activity of companies, research organizations and technology centers is, in itself, an activity of high technical and economic risk. In this context, public funds are not only a right for these entities, but also a fundamental and very interesting tool for undertaking innovative actions (technological, productive and R&D&I investments), minimizing risks and optimizing deadlines, resources and results.
However, access to these public funds is often not easily accessible and has become a real labyrinth for beneficiary entities. This situation has been further aggravated in recent years, following the Covid-19 pandemic and with the launch of the new multiannual European budget 2021-2027.
The management of public funds, regardless of their origin, requires the utmost rigor in all phases of application: from the application for aid, to the phase of monitoring and technical-economic justification of the activities financed, without forgetting the phase of public resolution, allegations and acceptance of these.
That is why, regardless of the experience and technical knowledge of the beneficiary entities, it is essential to pay the utmost attention to the economic-administrative procedures and formalities that accompany any process of certification of the expenses and investments made before the managing public administration, which may vary depending on the administration and the aid program to which we have applied.
Keys to ensure proper economic and administrative management
In order to guarantee compliance with the complex regulations that delimit the uses and obligations derived from the management of public funds, it is necessary to have a qualified and experienced technical team that guarantees the success of the economic-administrative management, minimizing the associated risk that, on many occasions, can generate penalties and obligations of reimbursement -partial or total- of the aid obtained.
Although each managing entity and aid program is different from the rest, there are some aspects to be taken into account that are useful for the proper economic-administrative management of public funds by the beneficiaries:
- Establish procedures to guarantee the adequate management and accounting of the expenses linked to the projects and/or actions financed and/or subsidized.
- To face the economic-administrative management from a general vision of the company or entity in question.
- To carry out a continuous follow-up of the expenses and investments during the execution of the eligible action, which facilitates its control and accounting, avoiding the short period of execution of the same.
- To have specific tools for cost management and control of available resources.
- Adapt internal protocols of the beneficiary entity to the specific requirements of the aid received to facilitate the document management of all the necessary information for its optimal justification.
- Maintain an updated portfolio of auditing entities registered in the ROAC (Official Register of Account Auditors) with proven experience in technical-economic justifications of innovation activities and audits of expenses and investments, whose role in these certifications is key to guarantee the collection of the aid obtained.
- To know and experience the increasingly complex and demanding telematic platforms.
This set of actions becomes even more valuable in the case of actions with greater complexity in management, such as large collaborative actions involving groups of entities of different nature (companies, research centers, associations, etc.) and those of a multi-year nature with intermediate certifications.
Thus, if the beneficiary’s approach is correct and these prior guidelines are followed, it will be possible to maximize the result, minimize the risks and avoid non-compliance and reimbursement obligations that reduce the profitability of the action carried out and its results. Undoubtedly, avoiding errors in the economic-administrative management facilitates the collection of assigned aid and improves the positioning of the entity before the managing administration with a view to future applications.
Implementing these mechanisms and tools within an organization is not an easy task, but it can be achieved by modifying some internal procedures and dedicating resources to staff training and capacity building.
Why is it important?
Good economic-administrative management of public funds must focus mainly on compliance with the laws and regulations in force, otherwise there may be legal and financial consequences for the beneficiary entities.
Furthermore, it is essential not to lose sight of the principle of transparency, since proper management of these funds is essential to ensure that the resources are used efficiently and effectively for the benefit of society as a whole.
The beneficiary entities must, therefore, disclose how the public funds they receive are used through the presentation of detailed reports and appropriate documentation to demonstrate that the resources have been used in accordance with the established objectives and regulations. This is also key to ensuring public confidence in the institutions and publicizing the impact of the funds.
Would you like more information on how to manage public funds effectively?
Our tema of specialists in this economic-administrative managemente have developed specific tools for cost managemente and control of available resources.
