From delegated act to essential part_SCO_May_2024_Lisbon
Simplified Cost Options for ESI Funds:
Practical Toolbox
15-17 May 2024 | Lisbon
Spring Academy
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Simplified Cost Options for ESI Funds:
Practical Toolbox
15-17 May 2024 | Lisbon
Spring Academy
From delegated acts to essential parts of a programme
15-17 May 2024, Lisbon
Simplified Cost Options for ESI Funds:
Practicalities for the Programming Period 2021-2027
Louis Vervloet
General director – former ESF Managing authority Flanders/Belgium
22-24 Novembre 2023, | Lisbon
Simplified Cost Options for ESI Funds:
Practicalities for the Programming Period 2021-2027
A degree in Public administration and a vast experience in working with European programmes in general and the ESF in particular.
Experienced speaker, involved in numerous conferences, seminars workshops both as speaker and chair on various subjects, each related to labour market and employment policies or to the management of European Structural Investment Funds.
Expert on simplification working with ESIF in general and simplified cost options in particular.
Agenda
15-17 May 2024 Lisbon
Simplified Cost Options for ESI Funds.
Practical toolbox
Intro
Scope of the application of the delegated act in ESF
Principles
How did art 14,1 ESF (67,5 CPR) work
Omnibus
How do art 94-95 CPR work in 2021-2027
Title
Rules of engagement
Preference for a boring lecture or an enchanting dialogue
Remember that questions can’t wait until the end, you will have forgotten them and remember them only next week, to late
There are no stupid questions, only answers can be so
Questions???
Some will get an immediate and straight answer
Some will be more difficult and take time and or consultation
Some will be answered by “riding around the block”
Some will require to look beyond the horizon
Some will not get an answer
BUT
YOU MUST ALWAYS ASK THEM !!!
Why use Simplified Cost Options(SCO’s)
When to use SCO’s
Result based approach and SCO’s
ORIGINAL SCOPE of the Delegated act
Article 14.1 ESF(14-20) DA: Standard scales and lump sums defined by the Commission
ESF only, optional, in addition to Art 67-68.
Objective to re-use existing data where appropriate (Eurostat, national statistics, data from OPs…)
=> MS (or even OP) specific, depending on data.
Reimbursement of expenditure by the Commission on the basis of these standard scales and lump sums.
Financial audit = exclusively to verify that conditions for reimbursements by the Commission on the basis of standard scales and lump sums have been fulfilled.
What
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WHY
1. Taken care of a full legal certainty
2. Simplifying management and audit of ESF
3. Help the take up of budgets
4. Improve result-based implementation of ESF OP’s
5. Simplify financial streams
6. Give flexibility to MS/IB in financing final beneficiaries
Simplified Cost Options for ESI Funds. A Practical Toolbox
Omnibus regulation
Decision on 02 August 2018. Simpler rules for the use of EU funds.
Insertion of § 5 in art.67 empowering the Commission to adopt delegated acts regarding the definition of the standard scales of unit costs or the flat-rate financing, by specifying detailed modalities concerning the financing conditions and their application.
How did art 14,1 ESF/67,5CPR work
Today: 2021-2027
CPR 2021/1060 of 24/06/2021
Articles 51 - 57
Articles 94 and 95
Published OJ L 231 of 30.06.2021
Entry into force 01.07.2021
SCOs in 2021-2027
SCOs in general governed by Title V Financial support from the funds
Chapter I Forms of Union contribution
Art 51
Chapter II Forms of support by MS
Art 52 - 57
Art 94&95 governed by Title VII Financial Management, Section II Rules for payments to MS
Legal framework 2021-2027
CPR, Title V, Chapter I,
Art 51: Forms of Union contribution to programmes
CPR, Title V, Chapter II,
Art 52: Forms of support by Member-States
CPR, Title V, Chapter II, Section I,
Art 53: Forms of grants
Art 54: Flat rate financing for indirect cost concerning grants
Art 55: Direct staff costs concerning grants
Art 56: Flat rate financing for eligible costs other than direct staff costs concerning grants
Art 57: Grants under conditions
Art 94: Union contribution based on unit costs, lump sums and flat rates (=project financing)
Art 95: Union contribution based on financing not linked to costs (= policy financing)
Legal framework 2021-2027
Article 94: UNION contribution
based on UC-LS-FR
Unit costs – Lump sums and Flat-rates in line with forms of contribution approved by a Commission decision or set out in the delegated act concerning EU level SCO’s
EC Decision on programme or amendment based on a MS/R proposal
MS/R must use the templates as annexes V and VI of CPR 2021/1060
Amounts and rates proposed must fulfil the necessary criteria
Annexes V and VI need to be positively assessed by the AA
Article 94: Simplified Cost Options
3 kinds:
Unit Cost, Lump Sums or Flat Rates
2 levels:
- Initiative at MS/R level
Part of the programme
Programme amendment
- Initiative at EU level
Delegated act for SCOs at Union level
SCOs established on
1. a calculation method
Ex ante: before signing the contract
Fair: Reasonable, based on reality, not excessive nor extreme. Not to high nor to low. Duly justified and documented
Equitable: Not favouring some beneficiaries or types of operations over others
Verifiable: Based on documentary evidence which can be verified (audit trail). Ex nihilo rates will not be accepted.
MS/R propositions based on
i)statistical data, other objective information or an expert judgement;
(ii)verified historical data;
(iii)the application of usual cost accounting practices;
Data that has been checked
And
Rechecked
Enterprise:
Checked by registered accountant
Approved by the Board
Approved by the General Assembly
Published in the official journey of the country
Objective data
Objective data
Governmental organizations which accounts:
Checked by the official organization such as Court of Auditors
Approved by the Government
Approved by the national/regional Parliament
SCOs established on
2. draft budgets
Established case by case,
Per project or action and or beneficiary
Agreed ex-ante by the MA/IB responsible for the selection of operations
SCOs established on
3. Rules applicable in Union policies for similar type of operations
SCOs established on
4. Rules applied under schemes for grants funded entirely by MS/R for a similar type of project
Types of operations covered by the reimbursement based on unit costs, lump sums and flat rates,
Definition and the amounts covered by those unit costs, lump sums and flat rates, and
Methods for adjustment of the SCO’s and their amounts.
Art 94 Decision sets out:
Reimbursement
Member States shall reimburse beneficiaries.
This reimbursement may take any form of support.
What is the difference between using own SCO’s and art 94 - 95 CPR?
Claims reimbursement
10 x 100€ = 1000€
What is the difference between using own SCO’s and art 94 - 95 CPR?
What is the difference between using own SCO’s and art 94 - 95 CPR?
Claims reimbursement
Exclusively aim at verifying that the conditions for reimbursement by the Commission have been fulfilled.
Management verifications and Commission and MS/R audits
EC is empowered to adopt delegated act defining Union level unit costs, lump sums and or flat rates
- including their amounts
- adjustment methods
Art 94 does NOT apply for technical assistance
How does art 94 CPR work: MS/R SCO’s
How does art 94 CPR work: EU SCO’s
Article 95: Union contribution based on financing not linked to costs
MS/R to apply to EC within their programme proposal or amendment
MS/R must use the templates as annexes V and VI of CPR 2021/1060
Proposal must contain lots of info
Article 95: Union contribution based on
financing not linked to costs
Article 95: Union contribution based on financing not linked to costs
Article 95: Union contribution based on financing not linked to costs
Article 95: Union contribution based on financing not linked to costs
Article 95: Financing not linked to costs
Operations
Need to be relevant and based on either:
Fulfilment of conditions;
Achievement of results;
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Amounts need to be determined
1. ex ante, this is prior to implementation of FNLC scheme
2. by either:
MS/Re submitting a proposal to EC
EC by adopting delegated act establishing Union level FNLC
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Methods to establish FNLC
Respect principle of sound financial management,
In particular regarding appropriateness of amounts linked with conditions or results
MS/Re and EC to ensure resources are adequate for the investments undertaken
Reasonable compliance with principle of co-financing and no double funding
Why FNLC
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When to use FNLC
Who should be involved
Relevant policy makers, MA’s, IB’s and line ministries
Because of the policy impact of definitions, indicators, standards used, ..
Audit Authorities
Ex ante assessment not mandatory but very highly recommended
Who should be involved
Social partners
Less result without there engagement (in society and LM)
ESF+ stakeholders and final beneficiaries
To get a real shift of change, they need to understand and apply it
The European Commission
It is always better to respect your partners (and they need to approve it)
MS/R proposal shall contain the following information (annex V and VI CPR)
(a)identification of the priority concerned and the overall amount covered by the financing;
(b)description of the part of the programme and the type of operations covered by the financing;
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Information needed
(c)description of the conditions to be fulfilled or of the results to be achieved and a timeline;
(d)intermediate deliverables triggering reimbursement by the Commission;
(e)measurement units;
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Information needed
(f)schedule for reimbursement by the Commission and related amounts linked to the progress in the fulfilment of conditions or achievement of results;
(g)arrangements for verification of the intermediate deliverables and of the fulfilment of conditions or achievement of results;
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Information needed
(h) methods for adjustment of the amounts, where applicable;
(i) arrangements to ensure the audit trail in accordance with Annex XIII demonstrating the fulfilment of conditions or achievement of results;
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Information needed
(j)the envisaged type of reimbursement method used to reimburse the beneficiary or beneficiaries within the priority or parts of a priority of programmes concerned by this FNLC.
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Reimbursement
Exclusively aim at verifying that the conditions for reimbursement by the Commission have been fulfilled.
Management verifications and Commission and MS/R audits
Differences between FNLC and SCOs
15-17 May 2024 | Lisbon
15-17 May 2024 | Lisbon
15-17 May 2024 | Lisbon
Questions???
The most important thing in music …
are not the notes
Gustave Mahler
Louis Vervloet
General director
ESF-Agency Flanders
louis.Vervloet@gmail.com
