Elevate Berkshire ESIF Workshop 5 th October 2015
Ecorys has longstanding experience of ensuring compliance with EU and ESF - ESF Equal - Pan London Objective 3 ESF - UK National Agency for Erasmus + with British Council - Advisors on ESF to Big Lottery Fund BBO
Our Experience of ESIF • Manage and deliver EU programmes • Provide support to potential applicants, applicants and grant holders (lead partners) • Helpline on ESIF rules and regulations, roadshows, webinars, templates and guidance • Help organisations manage risk of clawback in terms of specific partnerships and projects
Today • Refresher on ESIF requirements • Discussion around implications for Elevate Berkshire • Questions as we go – Finances – Procurement – Participant Data and Outcomes – State Aid – Publicity – Cross-cutting Themes
ESF Key Principles • Co- financing • Non profit • Non retrospective • Non cumulative
Actual costs • Do not complete claim from original budget (unless agreed advance payment) • All costs paid by ESF must be actual costs incurred and defrayed (paid) by projects • Partners are paid for their expenditure, not day rates or fees.
Staff Costs • 100% time – JD, letter of appointment, payroll • Part time – Timesheets, payroll, evidence of work carried out • Indirect staff costs – proportion of general admin and support staff if relevant
Participant Costs Everything claimed by participants needs to be supported by • evidence Travel – Childcare – Expenses – Get this evidence from beneficiaries before you pay them • Participant allowances, benefits or incentives • Likely to affect the level of benefits the participant may be entitled to, – which you’ll need to discuss with the local Jobcentre Plus office Need to conform to HM Revenue and Customs rules on taxable income. –
Other Costs • Staff Expenses (linked to project) • Consumables (linked to project) • Venue Hire/lease or rent of buildings (linked to project) • Equipment Hire • Depreciation (if on items solely used by project) • Small items < £1,000 • Consultants/suppliers/ agency staff • Overheads (apportioned)
European Court of Auditors • Overall approx. 3% of payments thought to be incorrect (of €14bn ) • 93% of errors on EU audits of ESF were to do with ineligible expenditure (including ineligible participants) • 7% on procurement failings
ESIF Expenditure Errors - Overcharging of overheads (23%) - Lack of a robust and transparent method - Differences between formula at bid and delivery stage/ miscalculations - Inflation of rents compared to market average - Over-declaration of personnel costs (8%) - E.g. a school in Portugal charged the head teacher’s whole salary to ESF when only a small part of his work was ESF related - Other examples where ESF funded staff were on 5 x the salary of equivalent non ESF funded - Inadequate timesheets - Incorrectly allocated costs (14%) - Things charged to the project but not directly linked to delivery e.g. including general catering in overheads - Other ineligible items (48%) - Ineligible participants or activities - Expenditure on items not required for delivery or at unsuitable times - Notional costs (e.g. internal recharge)
Match Funding Unacceptable ESF funding Match funding Budget Budget Budget budget item 1 item 2 item 3 item 4 PROJECT COSTS Acceptable ESF Funding Match funding Budget Budget Budget budget item 1 item 2 item 3 item 4 PROJECT COSTS
Match Funding Aligning Funding Sources ? ? ESIF ? CO ? Other sources ?
Partners or Contractors? Partners: • Shared aims and priorities • Stake in the project as a whole • Local knowledge and influence • Paid on actual costs • Deliver most project services • Consulted, not told • Sign SLA • Named in bid / DWP contract • Running start in delivery
Partners or Contractors? Contractors • Usually deliver only small, specialist elements e.g. LMI or ICT support • Limited interest in wider objectives • Told, not consulted • Paid fee/output basis • Procured through market • Managed via contract • Will take time to procure
Procurement • Principles of transparency, non-discrimination, equal treatment and proportionality • ESIF does not have its own procurement rules, just brings a high degree of scrutiny • Education and training services to the person are “Part B”
Suggested Steps 1. Consider and define all parties by role 2. Discuss with DWP- name all delivery partners and role in contract/grant agreement 3. Consideration at each LA of its Elevate supply chain 4. Possible procurement audit of all proposed partners/suppliers 5. Project procurement plan – What you need to procure – When and how – Who procures – exceptions
Partner Payments • Safest approach is to apply same method of payment to partners as MA is applying to overall grant. Actual Unit pricing Incentives Profile and expenditure reconciliation
Thresholds Current OJEU threshold for Part B (total contract value) Services £111,676 (€134,000) Any procurement above that threshold must go on OJEU DON’T SPLIT ITEMS TO FALL BELOW THRESHOLD- e.g. tendering for separate 2 x 1 year contracts
Common Procurement Failings • Inadequate time limits • Unclear evaluation criteria • Insufficient profile or description of service • Process not documented • Procurement “in the field”, not by experts
Elevate Procurement Risks Be very wary of “re-engineering” existing contracts or services • Any new suppliers/services must be procured correctly (LMI?) • Procurement related clawback can be 100% • Balance your desire to move quickly with compliance and • transparency ESIF does not have its own procurement rules, just brings a high • degree of scrutiny and possible challenge
Participant Eligibility • Participants must be legally resident in the UK and able to take paid employment in European Union member states and unemployed or economically inactive. • https://www.gov.uk/legal-right-work-uk/y • Support must be additional • Must not be counted twice
Participant Data • Projects need to capture, evidence and report approx. 30 characteristics of each participant • Track and evidence each participant through all activity, results and outcomes • E.g. recruitment/assessment • Learning and support • Qualification • Job/Progression
Participant Outputs • Unemployed including long-term unemployed • Economically inactive including NEET • At risk of NEET • Single parents • Participants with disabilities • Youth offenders
Participant Results – Education and training – Offer or take-up? Minimum hours? Within 4 weeks or 6 months? – Securing a job – offer or take-up? Proof of starting? Minimum hours? Internship? Zero hours? – Commencing job search – how to evidence?
Participant Evidence Trip Hazards - Lack of participant signatures - Inadequate evidence of eligibility - Gaps in participant files - Using generic data collection forms - Reported outcomes and results not backed up by evidence
State Aid - 4 Tests 1) The assistance is granted by the state or through state resources. 2) It favours certain undertakings or the production of certain goods 3) It distorts or threatens to distort competition 4) It affects trade between Member States
State Aid- General - For 2007 – 2013 programme ESF Priorities 1 and 3 were not in scope for State Aid - Most ESF activity is addressing market failure - Employment support to disadvantaged people is a specific SA exemption under GBER - De-minimis threshold is €200,000 over rolling 3 years
State Aid- Elevate Work placements: Could be considered an indirect subsidy to employers so should be costed and tracked if unwaged
Publicity • ESF must be acknowledged as source of funding on all materials, eg: – job adverts and descriptions – procurement materials – internal records and paperwork – social media • Prescriptive branding rules • News stories and case studies to DWP; hosting visits from ministers or representatives of EC
Cross Cutting Themes • Sustainable Development – All partners must have policies and an implementation plan that demonstrates: a) commitment to promoting sustainable development and complying with relevant EU and domestic environmental legislation b) how the commitment will be turned into action at project level.
Cross Cutting Themes • Non discrimination – Providers required to meet individual needs – Design and delivery to enable minorities of all kinds to access, participate and succeed within the project – Activities to be fully accessible to disabled people – Actively enabling more women to take part in the programme, including disadvantaged women – Part of ongoing review and evaluation
Next Steps • Detailed planning and troubleshooting • Transferring ESF knowledge to delivery partners • “ESF-ify” paperwork, systems and processes • DWP approval
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