EU Funding Workshop

1. EU Funding Workshop Intermediate Body Training Basic principles and requirements 1 1

2. EU Competitiveness Programme €306m ERDF Intervention rate 50% 4 Priorities P1 Competitiveness and Innovation P2 Enterprise and Entrepreneurship P3 Improving accessibility P4 Technical assistance 2 2

3. 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 1 3 3

4. 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’ 4 4

5. Players

6. Managing Authority Role Programme Development Overall Programme Management High level approval of activity Guidance and Operating manual N+2 Claim initiation Evaluation Negotiating Programme changes with EC Reporting on Progress Closure 6 6

7. 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 7 7

8. Audit Authority Role Audit Strategy System Audits Audits of Operations Annual Control Report and Opinion Closure Declaration 8 8

9. IB Role 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 9 9

10. Key Issues Eligibility of Activity and Expenditure Audit Trail Procurement Publicity 10 10

11. Eligible Activity Must contribute to the delivery of the relevant Programme Objectives 11 11

12. 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) 12 12

13. Ensuring Activity is Eligible Selection Criteria Selection Panels Appraisal Casework Committees Approval Bodies Letters of Offer/Contracts Monitoring and reporting against terms and conditions 13 13

14. 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 14 14

15. 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 15 15

16. Eligible Staff Costs Basic Salary Statutory Contributions Pension Contributions Training Costs Recruitment Costs Non-statutory Sick/Maternity Pay Holiday Pay Commission Shift allowance Taxable Benefits Must be defined in T&Cs of employment Private companies only 16

17. Part-time Staff Costs • Time Records • How is the hourly rate calculated? 17 17

18. Daily/Hourly Rate Calculation 18 18

19. T&S • Mileage • Accommodation • Meals • Air/rail/bus/other travel 19 19

20. Other Eligible Costs • Hospitality • Professional/Consultancy Fees • Accommodation • Consumables • Marketing/Promotion • Other (insurance, depreciation, maintenance etc) 20 20

21. 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 21 21

22. 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 22 22

23. Management Verification 23

24. Who conducts Management Verification? • Finance staff • Programme managers • Technical staff • Grant inspectors • Managing Authority Intermediate Body 24

25. Management Verification Can encompass: Claim checks Contract monitoring Project Visits Board Meetings/Project Launches Formal Article 13 on-site verification 25 25

26. Management Verification – Key Issues Timing Frequency Nature Keeping adequate records Database entries 26 26

27. Audit Trail 27 27

28. 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. 28 28

29. Audit Trail Documents Application forms Selection/Appraisal records Contract/Letter of Offer Management and control records Payment records Monitoring reports Closure documents 29 29

30. Audit trail – How long, in what format and where? • Period – 2022 • Format • Location 30 30

31. 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 31 31

32. Personnel Costs • Contract of Employment • Payroll records • Time records • Breakdown of contributions (statutory and any company specific elements) • Proof of Payment 32 32

33. Equipment/Consumables • Invoices • Lease/rental agreements • User logs • Procurement documentation as appropriate • Proof of payment • Asset Register 33 33

34. 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 34 34

35. Travel and Subsistence • Claim form signed, dated and approved • Receipts/invoices • Supporting evidence of the event • Proof of payment 35 35

36. Payment Audit Trail • Indirect Costs/Overheads • Invoices • Accounting records • Apportionment data • Proof of payment 36 36

37. Procurement 37 37

38. Procurement – Public v Private • Rules apply to Public Bodies • VFM for private companies • Reasonableness test for private companies If in doubt refer to CPD 38

39. 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 39 39

40. Publicity 40 40

41. Publicity Letters of Offer / contract documents Brochures / leaflets Invitations Advertisements Web-pages Promotional items Billboards & Plaques Publications and press releases Presentations Conferences/exhibitions/training/events 41 41

42. Publicity – general principles • Logo and strap line • Front of material • Equal prominence • Readable • Proportionate and appropriate 42 42

43. Consequences of non-compliance 43 43

44. Ensuring Compliance • Strong risk awareness and management • Strong financial controls • Training and Documentation • Early stage education of funding recipients • Verification activity 44 44

45. Guidance and Assistance www.eucompni.gov.uk www.eucompni.gov.uk/resource-library/guidance 45 45