European Structural and Investment Funds: Management and Control System

Management and Control System (MCS) document covering the 2014-20 European Regional Development Fund and European Social Fund Programmes. Official guidance from the Managing Authority for Lead Partners of the programme, in reference to official guidance as issued by the European Commission.

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Certifying Authority

3.1. Certifying Authority and its main functions

3.1.1. The status of the Certifying Authority (national, regional or local public body or private body) and the body of which it is part

The designated Certifying Authority (CA) is responsible for drawing up and submitting certified statements of expenditure to the European Commission. The sole responsibility of the CA is the discharging of the obligations set out in Article 126 of Regulation (EU) No 1303/2013 of the European Parliament and of the Council which pertain to the CA functions of the ESIF programmes for ESF and ERDF in Scotland. 

The CA is a National Body as part of the Scottish Government.

3.1.2. Specification of the functions carried out by the Certifying Authority. Where the Managing Authority also carries out in addition the functions of the Certifying Authority, description of how separation of functions is ensured

The CA alone carries out the following functions and tasks and is functionally separate from the MA. The CA does not carry out any functions of the MA. Section 2 describes the MA and its main functions and organisation. The CA is responsible for:

  • drawing up and submitting payment applications to the Commission, and certifying that they result from reliable accounting systems, are based on verifiable supporting documents and have been subject to verifications by the MA
  • drawing up the accounts referred to in point (a) of Article 59(5) of the Financial Regulation
  • certifying the completeness, accuracy and veracity of the accounts and that the expenditure entered in the accounts complies with the applicable law and has been incurred in respect of operations selected for funding in accordance with the criteria applicable to the operational programme and complies with applicable law
  • ensuring that there is a system which records and stores, in computerised form, accounting records for each operation, and which supports all the data required for drawing up payment applications and accounts, including records of amounts recoverable, amounts recovered and amounts withdrawn following cancellation of all or part of the contribution for an operation or operational programme
  • ensuring, for the purposes of drawing up and submitting payment applications, that it has received adequate information from the MA on the procedures and verifications carried out in relation to expenditure
  • taking account when drawing up and submitting payment applications of the results of all audits carried out by, or under the responsibility of the AA
  • to maintain, in a computerised form, accounting records of expenditure declared to the Commission and of the corresponding public contribution paid to beneficiaries
  • keeping an account of amounts recoverable and of amounts withdrawn following cancellation of all or part of the contribution for an operation. Amounts recovered will be repaid to the budget of the European Union prior to the closure of the operational programme by deducting them from the subsequent statement of expenditure

In carrying out its functions the CA takes account of the risk and fraud assessments carried out as required by this Management and Control System in developing its control and checking procedures. The CA will contribute to these assessments as set out in sections 2.1.4 and 2.2.2.

3.1.3. Functions formally delegated by the Certifying Authority, identification of the intermediate bodies and the form of the delegation under Article 123(6) Regulation (EU) No 1303/2013

The CA has not formally delegated any of its functions or tasks to an intermediate body under Article 123(6) of Regulation (EU) No 1303/2013.

3.2. Organisation of the Certifying Authority

3.2.1. Organisation chart and specification of the functions of the units (including plan for allocation of appropriate human resources with necessary skills)

The CA is brigaded as part of the European Structural Funds and State Aid Division (ESFSAD) of the Scottish Government for staffing purposes. Section 2.2.1 sets out the organisation chart for the CA and illustrates its relationship with the MA and AA. The certifying function is independent of the other bodies within the management structure of the Programme and the CA has the authority not to sign any certificate if it concludes that there is sufficient justification. The CA is functionally independent of the approval and payment process of claims by beneficiaries. This is carried out by the MA and described in Section 2. 

The Head of the CA is a C-band senior manager who has experience in the delivery of the ESF and ERDF programmes. The CA also consists of two B-band staff employed to manage the specific finance functions of the CA. Both of these officers have finance experience. The CA will not be a beneficiary of either the ESF or ERDF programmes.

Staffing and resource allocation

The CA will be staffed with SG employees having a mix of skills, abilities and knowledge of the delivery of the Structural Fund programmes. Each post will be allocated a specific staff grade based on the existing SG HR policy which defines the various responsibilities which can be carried out by staff employed at each grade. This policy sets out the minimum qualifications which are required by grade.

The number, size and complexity of the programmes together with the roles set out within the detailed instructions of this MCS inform the number and grades of staff needed to ensure the effective delivery of the Programme. The Head of the CA will use their experience of the programmes to agree the number and grades of staff with the ESFSAD Head of Division who is responsible for ensuring these resources are made available.

CA staff training and skill development will follow the same process as detailed in Section 2.2.1.

Sensitive posts, conflict of interest and integrity of the Certifying Authority

As in the 2007-2013 programmes, no staff are in sensitive posts i.e. one where the post holder could cause adverse effect to the integrity and functioning of the institution by virtue of the nature of their responsibility. The structure of ESFSAD ensures this is not the case and as no single person has the authority to compromise the operation of the MCS no individuals are working in sensitive posts.

Staff within the CA are civil servants employed by the SG and bound by the provision of the Civil Service Code where they are expected to perform duties with honesty and impartiality. The Code is available to all staff and guidance on issues of conflict of interest are made clear in the Standards of Propriety section of the SG intranet. All staff are required by the terms of their employment to be aware of the requirements of the Civil Service Code and the consequences of failing to adhere to those requirements. Declarations of Interest are invited at meetings, for instance the MA Approval Panel, with the Chair determining the action necessary to ensure the integrity of the process. Any member of staff who considers themselves to have a conflict of interest when they are carrying out their duties as specified in the MCS must inform their line manager who will determine the action necessary to ensure the integrity of the process.

Section 1.3 describes the reporting lines between the MA, CA, AA and the European Commission. The CA works independently from the MA ensuring the separation of functions is assured. Should the CA feel this to be compromised, the Head of the CA also has separate reporting line to DG Finance within the SG. Should a dispute arise the CA has the option to report the matter to DG Finance who will instruct what actions are necessary in accordance with the relevant European Regulations and in compliance with the Scottish Public Finance Manual.


The CA will provide the Head of ESFSAD with reports on:

  • the financial delivery of the Programmes
  • whether the control environment is sufficient to enable the CA to sign a certificate
  • when every Payment Request has been submitted, the date of the submission
  • when annual accounts are finalised and submitted
  • additional ad hoc reporting as required

In addition, and when requested, the CA will provide reports to DG Finance on the effective delivery of the Structural Fund Programmes which may be supplemented by briefings to the Deputy Director of Finance, Ministers and HM Treasury.


Three payment claims are planned to be made to the European Commission each year, initially April, August and December. Additional payment claims can be made during the course of the reporting year.

Should the CA consider that insufficient information has been supplied by the MA to enable a payment claim to be made, a report will be drawn up indicating why no certification and payment request can be prepared. This report will be sent to the Head of the ESFSAD who will instruct the MA to provide additional information to enable preparation of the certification and payment request.


The CA collates, records and reviews the outcomes of audits from the following Audit Authorities:

  • European Court of Auditors
  • European Commission Auditors
  • Audit Scotland
  • Scottish Government Internal Audit Division (Audit Authority)

Details of audits from the four authorities will be discussed at audit control meetings held between the MA, the CA and the AA. Actions arising will be recorded in a minute of each meeting, with progress in closing identified issues being monitored at subsequent meetings. Actions which prove incapable of resolution will be escalated to the Head of ESFSAD and Head of Internal Audit for deciding on a course of action.

Should any audit report indicate to the Head of the CA that there are issues which would prevent the preparation of the certification and payment claim a direction will be sought on the action to be taken from the Head of Internal Audit. The Head of ESFSAD will be kept fully briefed by the Head of the CA should this situation arise.

3.2.2. Description of the procedures to be provided in writing to the staff of the Certifying Authority and intermediate bodies (date and reference) Procedures for drawing up and submitting payment applications

Description of arrangements in place for the Certifying Authority to access any information on operations, necessary for the purpose of drawing up and submitting payment applications, including the results of management verifications (in line with Article 125 of Regulation (EU) No 1303/2013) and all relevant audits

In order to ensure access by the CA to the detailed information on operations including management verifications and audits held by the MA and the AA, arrangements have been put in place which include appropriate access to the:

  • EUMIS IT System
  • eRDM
  • audit reports

EUMIS will hold all the financial and management performance information on approved operations via the Article Check records section. All payments made to applicants will be processed by the Scottish Government Accounting System, SEAS. All other documentation relevant to the CA will be stored in eRDM.

In order to fulfil the requirements pursuant to Council Regulation (EU) No 1303/2013 Article 126, the CA will request the MA to submit a Monitoring Report (Annex 1) for each programme in sufficient time to meet the programme for declarations. When provided, the CA will:

  • carry out a review of the outcomes of the checking processes carried out by the MA
  • carry out a review of the outcomes of the audit reports provided by the AA, the EU Directorates General and the ECA and the European Commission

The instructions on the checks to be carried out are set out in Annex 1 and the results of these will be documented on the Monitoring Report. When complete, the Report will be checked and signed by the Head of the CA. This review will form the basis on which the CA will decide to proceed with the certification and submission of payment requests. These completed checks will be stored alongside the relevant Monitoring form and maintained to support the submission of a payment request. A copy of each Article 126 Monitoring form and its supporting checks will be kept in eRDM.

The CA will review annually the processes associated with the submission of an expenditure declaration to the Commission and the completion of the Monitoring Form. The aim of this review will be to assess whether all the processes and checks undertaken by the CA remain relevant and fit for purpose or require updating to reflect known best practice from other regions or practical experience. The review will be completed by 31 March of each year with the results reported to the Head of ESFSAD and recorded in eRDM. Actions arising from the review will be allocated by the Head of the CA and Head of ESFSAD as appropriate and monitored by them to ensure closure. 

Description of the procedure by which payment applications are drawn up and submitted to the Commission, including procedure to ensure sending of the final application for interim payment by 31 July following the end of the previous accounting year

Once the Head of the CA has signed the Article 126 Monitoring form, the procedure for drawing up and submitting the statement of expenditure begins

The CA will make all payment claims to the European Commission derived from the declarations of expenditure verified as eligible by the MA. Section sets out the procedures for transmitting information between the MA and the CA.

In preparation of the application for payment the CA will complete the Monitoring form and:

  • run a report from EUMIS of the expenditure period verified as eligible by the MA
  • finalise the Article 126 Monitoring Report
  • reconcile the financial information detailed in the Monitoring Report with the payments made on the SEAS system
  • complete a Certificate and Statement of Expenditure and Application for Payment in the agreed format as laid out in Annex VI of Commission Implementing Regulation (EU) No 1011/2014
  • draw up a summary of the information
  • electronically sign the documentation in compliance with the instructions issued by the European Commission
  • retain electronic copies of payment applications and any supporting documentation on eRDM Description of the accounting system used as a basis for certification of expenditure and accounts to the Commission (Article 126(d) of Regulation (EU) No 1303/2013

Arrangements for forwarding aggregated data to the Certifying Authority in case of a decentralised system

There are no decentralised systems in operation within the Scottish Programmes. All data to manage the ESIF is stored in EUMIS.

The link between the accounting system and the information system described under paragraph 4.1

The accounting function within EUMIS is used as the basis for certification of expenditure and the Scottish Government accounting system, SEAS is used to process payments to beneficiaries.

EUMIS has been designed and commissioned especially for this Programme and is described in detail in Section 4. EUMIS maintains a record of all of the financial and management performance information on approved operations. 

All payments made to Lead Partners will be processed by the Scottish Government Accounting System, SEAS. SEAS is the electronic system by which all payments made by the Scottish Government are processed. Payments made on SEAS are requested by a direct transfer of data from EUMIS. 

Where the Lead Partner is a Scottish Government department, the payment will be by means of and Inter-Entity Journal transfer rather than a cash payment.

Identification of European Structural and Investment Fund transactions in case of a common system with other funds

The CA checks to ensure the consistency and integrity of the payment data before payments are authorised on EUMIS and monthly reconciliations, facilitated by the use of dedicated ledger coding, are performed between the two systems to validate the accuracy of expenditure reported. Description of the procedures in place for drawing up the accounts referred to in Article 59(5) of Regulation (EU, Euratom) No 966/2012 (Article 126(b) of Regulation (EU) No 1303/2013. Arrangements for certifying the completeness, accuracy and veracity of the accounts and that the expenditure entered in the accounts complies with applicable law (Article 126(c) of Regulation No 1303/2013 taking into account the results of all verifications and audits

Drawing up and submitting the accounts referred to in point (a) of Article 59(5) of the Financial Regulation will use the information included in the statements of expenditure for the relevant Annual Accounting period. This information includes the work carried out in preparing the two planned declarations (payment requests) made each year. 

The CA will prepare the accounts for the relevant Annual Accounting period in the format laid out in Annex VII of Commission Implementing Regulation (EU) No 1011/2014 and will include all pre-financing and sums for which recovery procedures are underway or have been completed. The Annual Accounts will be provided to the Commission before the 15 February of the year following the end of the accounting year to which they relate.

Preparing for the submission of the Annual Accounts to the Commission by 15 February requires the steps set out below to be carried out. The CA will manage the process of preparing the Annual Account together with the MA and AA. The dates in the steps below use an example where the accounting year starts on 1 July 2015 and ends 30 June 2016. 

  • on 30 June each year the CA closes the accounts for the accounting year which ends 30 June
  • by 31 August each year the CA submits the final interim payment claim for the accounting year ended 30 June
  • the CA submits the draft accounts to the MA and the AA following submission of the final interim claim starting September each year to allow the MA to prepare the draft Management Declaration and the draft Annual Summary by 31 October each year. Over the same period the AA prepares the audit opinion and the Annual Control Report (ACR)
  • in early November each year the CA submits the final draft accounts to the MA to incorporate the latest audit findings. The MA submits the Management Declaration and Annual Summary to the AA by 31 December each year
  • by 15 February each year the annual accounts for the year ended 30 June, Management Declaration, the Audit Opinion and the ACR are submitted to the Commission via SFC

In preparing the Annual Accounts, the CA will specifically check that:

  • amounts withdrawn and recovered during the accounting year are clearly identified along with the amounts to be recovered as at the end of the accounting year, the recoveries effected pursuant to Article 71 Durability of Operations, and the irrecoverable amounts
  • amounts of programme contributions paid to financial instruments under Article 41(1) and advances of State Aid under Article 131(4) are clearly identified
  • for each priority, a reconciliation between the expenditure declared in the final interim payment claim and the expenditure declared in respect of the same accounting year in payment applications, accompanied by an explanation of any differences

The preparation of the Annual Accounts desk instruction can be found at Annex 1. Description, where applicable, of the procedures of the Certifying Authority in relation to the scope, rules and procedures concerning the effective arrangements set out by the Member State for the examination of complaints concerning the ESI Funds, in the context of Article 74(3) of Regulation (EU) No 1303/2013

To allow a complaint to be made about the work of the CA, the address of a dedicated complaints mailbox is highlighted on the ESFSAD website to allow complaints. Complaints will be handled as set out below.

Desk Instruction for Complaints against the CA:

  • complaint received via dedicated mailbox
  • letter/email logged on internal computerised storing system spreadsheet. Date of receipt, complainants name, address and brief description of complaint registered. Team Leader made aware
  • Team Leader assigns investigation of the complaint to appropriate member of staff
  • within 20 working days of receipt of the complaint the investigation will be completed and a response issued. The response will include notice of the appeals process. Spreadsheet updated to reflect this and reference number of letter added to register and stored on computer system
  • should complainant appeal, the appeal will be investigated by the Team leader
  • letter/email logged on internal computerised storing system spreadsheet. Date of receipt and brief description of why complainant still has outstanding issues registered
  • response issued within 10 working days of receipt. Spreadsheet updated to reflect this and reference number of new letter added to register
  • complainant not satisfied with response and seeks final appeal
  • letter/email logged on internal computerised storing system spreadsheet. Date of receipt and brief description of why complainant still has outstanding issues registered
  • complaint dealt with by Head of European Structural Funds
  • final decision of the MA letter issued within 5 working days of receipt. Spreadsheet updated to reflect this and reference number of letter added to register

3.3. Recoveries

3.3.1. Description of the system for ensuring prompt recovery of public assistance, including Union assistance

Within EUMIS the MA will designate the status Withdrawn, Recovered, Pending Recovery, Suspended by Legal Proceedings or Irrecoverable as appropriate to monies which may be subject to recovery of public assistance. The amounts will be repaid to the budget of the Commission by deduction from the expenditure declared and notified to the Commission via the submission of the next statement of expenditure and summarised in the annual accounts each year using the prescribed Commission template.

3.3.2. Procedures for ensuring an adequate audit trail by maintaining accounting records in computerised form, including amounts recovered, amounts to be recovered, amounts withdrawn from a payment application, amounts irrecoverable and amounts related to operations suspended by a legal proceeding or by an administrative appeal having suspensory effect, for each operation, including the recoveries resulting from the application of Article 71 of Regulation (EU) No 1303/2013 on durability of operations

The CA will maintain, as required by Council Regulation (EU) No 1303/2013 Article 126, a list of the amounts recovered, withdrawn and pending recovery following the cancellation of all or part of the contribution for an Operation. This list is held within the eRDM. Annex 1 includes desk instructions for the preparation of this account

3.3.3. Arrangements for deducting amounts recovered or amounts to be withdrawn from expenditure to be declared

The information captured in 3.3.2 is held on eRDM and can be viewed and obtained in report form by the CA and will include the following information:

  • identification of fund and programme
  • strategic intervention title and lead sponsor
  • operation title
  • operation reference
  • recovery required

The amounts recovered/withdrawn will be recorded as a negative figure to allow for easy identification.

The CA will record all amounts recovered/withdrawn/pending recovery in the format determined by Council Regulation (EU) No 1303/2013 Article 126. This will be submitted to the European Commission via the Annual Accounts.



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