Following agreement at the Programme Management Committee held on 30 May 2002, three key changes have been made to the established administrative procedures for implementing ERDF projects in the above Programme.
eligibility of final claim audit fees
Sponsors should be aware that the costs incurred in having an ERDF project independently audited at final claim are now eligible to be included in the list of approved project expenditure. This development will enable you to receive some ERDF grant towards these costs based on the agreed rate of grant intervention for your project. Please remember to include these audit costs when submitting new project applications. For forecasting purposes an average figure of £2,000 per project has been assumed to cover these audit costs, although it is accepted that this figure can vary considerably depending on the size and complexity of an individual project.
For those sponsors with existing project approvals who wish to include final claim audit fees in their approved list of eligible expenditure, please could you revise your ERDF application accordingly and sent in a revised hard copy and CSV files to the Programme Executive. Following receipt, a revised ERDF approval letter will be issued. Clearly the decision to revise an existing application to include the budget line “Final Claim Audit Fees” is entirely that of the sponsor, but those wishing to take up the offer should make the necessary revisions by Friday 19 July 2002. If revised applications are not received by that date, it will be assumed that sponsors do not wish to include audit fees in their approved list of eligible expenditure. Unfortunately, the inclusion of this budget item cannot extend to those projects for which a final claim has already been completed.
changes in the audit certification of final claims
Following discussions with Audit Scotland, the Scottish Executive has changed the arrangements for the audit certification of ERDF final claims. They will no longer offer a dispensation to Local Authorities and some other organisations with a large number of final claims each year. Since 1st April 2002, therefore, all final claims from all project sponsors must now be accompanied by the external audit certification. Guidance to auditors undertaking the final claim audit is included as part of the ERDF approval pack.
average grant rates for erdf projects
At the start of the Programme, it was agreed that revenue projects operating over a number of years should physically receive ERDF grant at a declining rate, rather than just be awarded a lower modulated grant rate for the duration of the project. This approach was different to that adopted in the West of Scotland, but reflected the higher transition coverage in the East of Scotland and it was felt that such a move would help applicants to focus their minds on developing project exit strategies. However, in practice this approach has not proved successful and has dramatically increased the level of administration for both the applicant and the Programme Executive. The difference in approach across Scotland towards revenue projects has also caused confusion to sponsors operating in more than one programme area. It has also in some cases dissuaded sponsors from accelerating the rate of project expenditure because it would have required the submission of revised applications by the sponsor and the issuing of revised annual approval letters by the Programme Executive. Such a development is clearly contrary to effective programme implementation and was never the intention when it was first introduced.
After consultation with the Implementing Authority and to ensure a greater consistency in operating practices across Scotland, the Management Committee has agreed to move away from annual approvals and declining grant rates for revenue projects. Instead, applicants of such projects will now be issued with a single approval letter for the entire project at a modulated grant rate. Any problems experienced with the implementation of such projects will be managed through the grant claims process in the conventional way. Where sponsors of existing revenue projects have only received part approvals to date, the Programme Executive will issue revised approvals for the full value of the revenue project.
consultancy days rates increase
The Scottish Executive has confirmed that with effect from 1st April 2002 the maximum threshold for subcontracted consultants' day rates has increased from £350 to £500 for untendered contracts. Higher rates can be applied if it can be demonstrated that a competitive tender process has been carried out.
The increase rates and guidance may only be applied to project applications approved after 1st April 2002 and not retrospectively to existing projects
