EU Funding Workshop
Intermediate Body Training
Basic principles and
requirements
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EU Competitiveness Programme
• €306m ERDF
• Intervention rate 50%
• 4 Priorities
– P1
– P2
– P3
– P4
Competitiveness and Innovation
Enterprise and Entrepreneurship
Improving accessibility
Technical assistance
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Financial Flow
100% Public Expenditure
Eligible Expenditure input to
EU Database
Claim Submitted to EC
50% of Eligible Expenditure
Received from EC
EU receipt
reimbursed
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How is the Programme
Managed?
• Managing Public Money NI
• DFP Guidance (Audit and Financial Management
Division)
• EU Regulations and Guidance
• Programme Documents & Guidance
Guiding principle – ‘Strictest Rules Apply’
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Players
Audit Authority
DETI Audit – Jackie Connolly
Managing Authority
DETI EU Support Unit – Maeve Hamilton
Certifying Authority
DETI Accountability – David Conliffe
Intermediate Bodies
DETI / Invest NI / NITB
DARD
DSD – to be formalised
DRD – to be formalised
Managing Authority Role
• Programme Development
• Overall Programme Management
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High level approval of activity
Guidance and Operating manual
N+2
Claim initiation
Evaluation
• Negotiating Programme changes with EC
• Reporting on Progress
• Closure
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Certifying Authority Role
• Validity and accuracy of claims
• Certification of claims
• Submission of claims to the Commission
• Accounting for and disbursing EU receipts
• Irregularity and recovery monitoring
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Audit Authority Role
• Audit Strategy
• System Audits
• Audits of Operations
• Annual Control Report and Opinion
• Closure Declaration
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IB Role
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Selection of operations
Appraisal
Award of funding
Monitoring
Verifying operations and expenditure
Financial accountability
Reporting
Publicising
Maintaining the database
Safeguarding the audit trail
• Defined in the Memorandum of Understanding
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Key Issues
• Eligibility of Activity and Expenditure
• Audit Trail
• Procurement
• Publicity
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Eligible Activity
Must contribute to the delivery
of the relevant Programme
Objectives
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Ineligible Activity
• Displacement of similar existing activities
• Building and renovation of housing
• Agriculture, Fisheries and Forestry
• Local social welfare facilities
• EC Sectoral Restrictions (shipbuilding etc)
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Ensuring Activity is Eligible
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Selection Criteria
Selection Panels
Appraisal
Casework Committees
Approval Bodies
Letters of Offer/Contracts
Monitoring and reporting against terms
and conditions
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Eligible Expenditure Principles
• Against approved project activity
• Directly attributable to the project
• Relates to Northern Ireland
• Actually incurred and paid by the final beneficiary
between 1 Jan 2007 and 31 Dec 2015
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Eligible Costs for Capital
• Purchase and/or development of Land
• Purchase or development of Real Estate
• Preliminary Expenditure
• Professional Fees
• Purchase/lease of plant and equipment
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Eligible Staff Costs
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Basic Salary
Statutory Contributions
Pension Contributions
Training Costs
Recruitment Costs
Non-statutory Sick/Maternity Pay
Holiday Pay
Commission
Private
Shift allowance
companies
only
Taxable Benefits
Must be
defined in
T&Cs of
employment
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Part-time Staff Costs
• Time Records
• How is the hourly rate calculated?
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Daily/Hourly Rate Calculation
Basis
Actual salary for claim period (ERNI, pension and
Example
£5,000
additional taxable contracted costs elements)
Contracted working days per week
Multiply by period covered by claim e.g. 13 weeks
Subtract contracted leave pro rata for claim period
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(e.g. 20 days/4 = 5)
Subtract contracted statutory holidays pro rata for
claim period (e.g. 10 days/4 = 2.5)
Gives daily rate of £5,000/57.5 =
Divide by contracted daily hours (e.g. £86.96/8 hours =
57.5
£86.96
£10.87
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T&S
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Mileage
Accommodation
Meals
Air/rail/bus/other travel
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Other Eligible Costs
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Hospitality
Professional/Consultancy Fees
Accommodation
Consumables
Marketing/Promotion
Other (insurance, depreciation, maintenance
etc)
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Ineligible Expenditure – Common
Errors
• Payment against scale or unit costs
• Notional costs
• Time records incomplete or missing for part-time staff
• Recoverable VAT
• Missing or incomplete audit trail
• Expenditure outside Programme/LoO period
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Ineligible Expenditure – some
of the rest
• Bank charges or fees on accounts
• Mandatory training under statutory provision
• Fines, financial penalties and litigation costs
• Dividends
• Set up/contribution to private pension schemes
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Management Verification
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Who conducts Management
Verification?
• Finance staff
• Programme managers
• Technical staff
Intermediate
Body
• Grant inspectors
• Managing Authority
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Management Verification
Can encompass:
– Claim checks
– Contract monitoring
– Project Visits
– Board Meetings/Project Launches
– Formal Article 13 on-site verification
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Management Verification – Key
Issues
• Timing
• Frequency
• Nature
• Keeping adequate records
• Database entries
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Audit Trail
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What is the Audit Trail
The comprehensive set of
documents which provide a
complete history of a project and
provide evidence that proper
procedures were applied and
outcomes achieved.
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Audit Trail Documents
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Application forms
Selection/Appraisal records
Contract/Letter of Offer
Management and control records
Payment records
Monitoring reports
Closure documents
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Audit trail – How long, in what
format and where?
• Period – 2022
• Format
• Location
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Payment Audit Trail
• May differ depending on the nature
of the expenditure but in general will
include:
– Proof of commissioning of the
goods/service
– Proof of receipt of the goods/service
– Proof of payment
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Personnel Costs
• Contract of Employment
• Payroll records
• Time records
• Breakdown of contributions (statutory and
any company specific elements)
• Proof of Payment
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Equipment/Consumables
• Invoices
• Lease/rental agreements
• User logs
• Procurement documentation as appropriate
• Proof of payment
• Asset Register
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Contract Expenditure
• Procurement documentation & the
contract
• Monitoring/management documentation
• Invoice and evidence of any 3rd party
costs included on a real cost basis
• Proof of payment
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Travel and Subsistence
• Claim form signed, dated and approved
• Receipts/invoices
• Supporting evidence of the event
• Proof of payment
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Payment Audit Trail
• Indirect Costs/Overheads
– Invoices
– Accounting records
– Apportionment data
– Proof of payment
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Procurement
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Procurement – Public v Private
• Rules apply to Public Bodies
• VFM for private companies
• Reasonableness test for private companies
If in doubt refer to CPD
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Common Procurement issues
• Not adhering to threshold requirements
• Insufficient advertising
• Evaluation criteria in ToR not used in assessment
• Extensions to contract
• Incomplete supporting documentation / audit trail
• Payments not in line with agreed payment schedule
• Activity not verified in line with contract terms
• 3rd Party costs not appropriately verified
• Unapproved single tender actions
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Publicity
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Publicity
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Letters of Offer / contract documents
Brochures / leaflets
Invitations
Advertisements
Web-pages
Promotional items
Billboards & Plaques
Publications and press releases
Presentations
Conferences/exhibitions/training/events
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Publicity – general principles
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Logo and strap line
Front of material
Equal prominence
Readable
Proportionate and appropriate
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Consequences of noncompliance
Activity
100% of expenditure on the activity
Expenditure
100% of the error value
Audit trail
Up to 100%
Publicity
Up to 10% of the total grant
Tendering
Dependent on the nature of noncompliance anything from 5% to
100% of contract value.
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Ensuring Compliance
• Strong risk awareness and management
• Strong financial controls
• Training and Documentation
• Early stage education of funding recipients
• Verification activity
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Guidance and Assistance
www.eucompni.gov.uk
www.eucompni.gov.uk/resourcelibrary/guidance
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