Action 1 Closure

1
Action 1 Closure

• Financial Aspects

2
Order of completingthe financial sections

• Section 7 - statement of actual, eligible GB
  expenditure on the DP in Action 1 (Total DP Cost)
• Section 8 - statement of how the Total DP Cost is
  funded from ESF and match funding
• Section 9 - total ESF claim (advance and interim
  claims, and balance due/owed)

3
Advance and interim claims

• All advance and interim claims must be received
  by the Support Unit by 31st May 2002 (so they can
  be cleared for payment by 15 July 2002)
• April interim claim is optional

4
Expenditure 1

• Section 7 - statement of actual, eligible GB
  expenditure on the DP in Action 1
• You must
• ensure the costs for all DP partners are actual -
  not notional amounts, averages, estimates or
  commercial rates
• use the same costing methodology as in the
  Application Form

5
Expenditure 2

• establish a clear and robust audit trail
• show how costs have been calculated
• give a high level of accuracy in individual
  calculations and validations

6
Eligibility of expenditure

• Costs must be
• ESF eligible
• incurred for Action 1 activity within the DPs
  Action 1 start and end dates
• appropriate for the DPs objectives and
  activities as in the Application Form
• under the same headings as in the Application
  Form or updated by significant changes agreed by
  the Support Unit
• value for money

7
ESF ineligible costs

• Capital costs over 1,000
• Consultancy fees
• Transnational partner costs where there is no
  reciprocal agreement
• Loan and current account interest charges/other
  financial charges
• Finance leases
• VAT if reclaimable

8
Acceptable methodologies

• You must
• use the same overall costing methodology as in
  the Application Form
• show transnational costs as direct costs
• use ESF acceptable methodologies for salaries,
  apportionment and depreciation
• maintain consistency with your organisations
  methodologies

9
Income 1

• Section 8 - statement of how the Total DP Cost is
  funded from ESF and match funding
• Comprises
• ESF
• public match funding
• private match funding

10
Income 2

• Public match funder
• organisation that receives over 50 of its core
  funding from central or local government, or ITO
  levies for training purposes
• non-profit making organisation registered with
  the Charity Commission
• Private match funder
• private enterprise
• individual volunteer donating their time

11
Intervention rates

• Intervention rates are of total DP eligible
  expenditure
• ESF cannot exceed the intervention rate in the
  Action 1 letter of approval
• Public match funding intervention rate must be at
  least 10

12
ESF rules 1

• You must not move ESF funding between
  applications (dossiers) or Actions
• ESF amount must be
• between 25 and 50 of Total DP Cost
• equal to or more than 25 of the ESF funding plus
  public match funding (concentration principle)

13
ESF rules 2

• not more than the Total DP Cost minus public and
  private match funding
• not more than the maximum ESF amount in the
  Action 1 letter of approval

14
Match funding

• There are two types of match funding
• Actual
• In kind

15
Actual match funding

• Cash
• Depreciation charges
• Cash includes all costs that appear in the
  accounts of the lead partner (e.g. staff time,
  overheads)

16
In-kind match funding

• Provision of goods or services where the actual
  cost does not appear in the accounts of the lead
  partner. Examples include
• time spent by the match funders staff
• rent for premises payable by the match funder
• You must ensure an audit trail to demonstrate the
  actual cost to the match funder towards ESF
  eligible items

17
Please remember to...

• reflect all non-cash match funding as expenditure
  to the same value in the expenditure analysis
  (Section 7)
• ensure all match funding comes from an eligible
  match funder
• ensure all match funding is clean
• ensure match funders are not including profit,
  notional costs, discounts or lost-opportunity
  costs
• ensure match funding is only matching one project

18
General Statement of Expenditure (GSEs)

• Integral part of the Action 1 Closure Report
• Validate the actual contribution of the public
  match funder during Action 1
• Must be completed by each public match funder
• Must be originals and on the same piece of paper
  i.e. double-sided

19
Audit Certificate

• Only required from those DPs with an approved ESF
  amount of more than 20,000 for Action 1
• Integral part of Action 1 Closure Report
• Independent assessment of the validity of ESF
  claim
• Must be submitted with Action 1 Closure Report
  form

20
Audit arrangements

• Can use an existing external auditor or
  independent accountant/firm eligible for
  appointment as a company auditor
• Local authorities, NHS Trusts and health
  authorities may use auditors appointed by the
  Audit Commission
• Must not be your employee, relative, partner or
  connected with your organisation in any way

21
Audit Certificate - Auditors Report

• Equal Initial Guidance gives audit requirements
  and proforma for the Auditors Report
• Auditor and DP must resolve any issues arising
  from the audit before the Action 1 Closure Report
  can be cleared

22
Common errors 1

• Ineligible activity for Action 1
• Significant changes are not approved by the
  Support Unit before submission of the Action 1
  Closure Report
• Costs are not actual (but estimated, notional or
  commercial)
• Inconsistent or incorrect methodologies
• Ineligible costs

23
Common errors 2

• Mathematical errors
• Insufficient detail in the expenditure analysis
• Costs are presented in incorrect subsections
• Approved ESF amount is exceeded
• Match funding is not real or substantiated
• Intervention rates are not adhered to
• GSEs are not provided or inaccurate