European Structural Funds 2014-2020 Programmes: evidence required for verification checks - achievements and expenditure
Evidence required for Article 125 verification checks (achievements and expenditure) relating to the European Structural and Investment Funds 2014 to 2020 programmes.
This document is part of a collection
Expenditure - ESF and ERDF
A copy of the Verification Template used by MA colleagues when conducting an Article 125(5) Cost Management Verification Check is available via our website.
Flat rate - staff costs
Area |
Headings on template |
Evidence required |
|---|---|---|
|
Evidence of cost(s) |
Basic (£) Employer's NI (£) Employer's pension (£) Other eligible staff costs (£) |
An extract from payroll or a copy of a payslip, including a reference that clearly links to the information submitted in the claim, should be provided. The basic salary (i.e. before any expenses, allowances or other payments), employer’s National Insurance contributions and employer’s pension contributions for the pay period being claimed should be clearly stated. Where other eligible staff costs are being claimed, (e.g. back pay or eligible island allowance), this should be stated on the payroll or payslip and any supporting calculations should be provided by the lead partner. It is not necessary to view defrayal of the employer’s PAYE payments to HMRC or the pension provider for a verification check, but the evidence should be retained. Where there are ineligible costs included within the payslip, consideration should be given to the impact on the employers National Insurance and Pension contributions. Should this need to be apportioned prior to claiming them on EUMIS, please use the methodology provided at section 4.2.2 of the National Rules. A link to the National Rules is provided on our website. Where a member of staff has been off sick, you must complete a sick pay template (and consider NI and Pension contribution apportionment, as above). The sick pay template is also available on our website. You must use the auto template where possible. Apportionment of costs should also be considered where salary sacrifice is used (increased pension contribution, for example). In the main, as the individual’s salary is reduced, the contributions are also reduced based on the new basic pay. However, this is dependent on arrangements for each employer so please ensure this is claimed correctly. Where a staff member is a secondee, an invoice and payroll evidence from the employer to establish that the amount claimed is for the actual eligible salary cost, supported by payroll. Please note: the MA are required to hold job description and contracts or assignment letters for staff being claimed through European Structural Funds. If these documents have not been supplied previously, the MA will request these in order to complete the verification process. Assignment evidence should contain the following information: Staff member’s unique identifier (e.g. name, staff number), Operation title, Start Date on the Operation (and End Date, if applicable), that the post is being funded by ESF, and the anticipated percentage of the individual’s time spent on the operation, where this is less than 100%. Also the LP should ensure these letters are not certified by any of the individuals contained within the list. Where letters are being signed on behalf of a different individual, ‘pp’ must be clearly marked. Joint Assignment Letters (e.g. detailing the information for all staff members employed on a single operation) are acceptable. Where an individual is employed on two different operations, this should be clearly referenced on the Assignment Letter(s) provided e.g. Assignment Letters should clearly reference every role an individual has held, not just their current role. This can be sent in the form of a letter from the LP, or in an email as long as it is sent by someone within the LP organisation who has the authorisation to do so e.g. sent by Designated Signatory (or as long as they are copied to the email if sent by another individual). |
|
Defrayal |
Net (£) BACs total (£) Defrayal date |
The payroll or payslip should state the net pay due to the staff member. If a staff member is paid directly, a bank statement showing the payment should be provided. If the bank charges a fee for each payment, this should be explained but the cost should not be claimed. Bank charges are not eligible as per National Rules section 5. If a staff member is paid through a BACS run (or similar), a copy or extract of the BACS run should be provided showing (at least): the front page, the page showing the payment (with an identifier to link to the payroll/payslip) and a page showing the total. A bank statement (i.e. the defrayal of expenditure, not a supplementary list of payments) showing the payment should be provided. If the bank charges a fee for each payment, this should be explained but the cost should not be claimed. |
|
Apportionment |
Apportionment rate |
A cost should only be apportioned where the post is split between two or more structural funds projects, and/or between structural fund areas i.e. H&I/LUPS. This should be agreed in advance and, at verification, the MA will check the rate used is as agreed. No evidence required at verification stage. |
|
Eligibility |
Eligible Y/N |
Y: Actual Expenditure Found (£) equals Amount Verified (£) or has been under-claimed. N: If any part of the expenditure cannot be verified, the column the cost will be noted as N as no payment will be made based on this item. |
|
Flat rate (%) |
Flat rate (%) |
No evidence required at verification stage. |
Flate rate - direct costs, actual - procured costs
Area |
Headings on template |
Examples of evidence required |
|---|---|---|
|
Evidence of cost(s) |
Invoice ref Date of invoice Amount on invoice/petty cash (£) |
An invoice, receipt and works certificate if applicable should be provided, detailing the activity and cost, noting VAT where applicable. VAT is not eligible to be claimed if it is recoverable via HMRC. Please note: For procured costs, if a previously checked contract has been subject to a net correction by the Managing Authority, the costs submitted for this contract should be reduced by the net correction value e.g. 25% prior to making a claim. This should be recorded within the cost description field on EUMIS. For example: Contract reference Proc1234, Invoice total £10,000, Eligible Value £7000, net correction of 25% applied (7000*25%=1750) Amount claimed £5,250). |
|
Defrayal |
Batch supplier payment BACS total (£) Defrayal date
|
If a cost is paid directly, a bank statement showing the payment should be provided. If the bank charges a fee for each payment, this should be explained but the cost should not be claimed. Bank charges are not eligible as per National Rules section 5. If a cost is paid through a BACS run (or similar), a copy or extract of the BACS run should be provided showing (at least): the front page, the page showing the payment (with an identifier to link to the invoice/cost) and a page showing the total. The BACS run (if only providing individual pages) should have a linkable identifier on each page. A bank statement showing the defrayal of the BACS amount should be provided. If the bank charges a fee for each payment, this should be explained but the cost should not be claimed. Bank charges are not eligible as per National Rules section 5. If a cost is made as part of a larger ‘batch’ payment, evidence of the composition of the payment should be provided, this could be through remittance advice, copies of the other invoice(s)/credit note(s) which make up the payment, an extract from a financial system, or equivalent evidence. If a cost is paid by cheque, a link should be evident between the invoice or equivalent and the bank statement. The cheque number should be noted in the comments. Where an invoice is charged in a foreign currency, evidence of the cost being converted to sterling must be provided, either through the payment of the invoice or an extract from a financial system. If the bank charges a fee for converting the cost, this should be explained but the cost should not be claimed. Bank charges are not eligible as per National Rules section 5. |
|
Apportionment |
Apportionment rate
|
A cost should only be apportioned where the cost is split between two or more structural funds projects, eligible and non-eligible activity, and/or between structural fund areas i.e. H&I/LUPS. This should be agreed in advance and, at verification, the MA will check the rate used is as agreed. No evidence required at verification stage. |
|
Eligibility |
Eligible (Y/N) Eligible cost
|
Y: Actual Expenditure Found (£) equals Amount Verified (£) or has been under-claimed. N: If any part of the expenditure cannot be verified, the column the cost will be noted as N as no payment will be made based on this item. |
|
Eligible cost (flat rate only) |
Eligible cost
|
This should be the value of the expenditure which has been verified, before the addition of the flat rate. e.g. if the actual cost is £1,000, flat rate is 15% and amount claimed is £1,150, if the evidence supports the amount claimed, £1,000 should be entered here. |
|
Flat rate (%) |
Flat rate (%) |
No evidence required at verification stage. |
|
Contract pricing schedule and additional delivery checks |
Pricing schedule and additional delivery checks |
The pricing schedule submitted as part of the tender documents must be supplied to the Managing Authority to allow comparison of individual invoices as part of the verification check. Where a contract does not have a detailed pricing schedule e.g. in the case of low value procured costs – a record of the quote (or equivalent) must be supplied to confirm evidence of the agreed price. If the invoice cannot be reconciled with the pricing schedule due to incomplete costing information, the total contract spend at the date the claim was submitted must be provided. This can be in the form of a PO screenshot/print from a finance system which should confirm total spend and list the invoices. The Managing Authority will also select, as part of the verification process, a sample of invoices to confirm actual delivery of the activity detailed on that invoice. Evidence to support this could be (please note this is not an exhaustive list):
Bonus payments:
|
Unit costs (please note: this does not relate to the Employment Related Counselling Service unit cost)
Evidence required
Unit costs are evidenced through the achievement of a milestone, as defined in the applicable Achievements section of this guidance.
When completing the verification, the actual date achieved and units found will be recorded based on evidence provided, and the Eligibility field completed to confirm the cost is eligible. Where achievement is eligible, the applicable milestone unit cost is paid.
Unit cost (£) - No evidence required at verification stage.
Actual - wage subsidies
Evidence required
Evidence required is the evidence of a) the costs incurred by the employer and b) the costs paid by the Lead Partner/Delivery Agent, as defined in ‘European Social Fund: Participant Guidance’.
When the MA are completing the verification we will check in two stages, as per the cost verification template:
- a - wage subsidies – will be completed to capture the actual costs paid to the participant
- a - wage subsidies – reimbursement – will be completed to capture the payment to the employer
In addition, evidence should be provided to demonstrate that the participant engaging in the wage subsidy is eligible – please see wage subsidy achievements for more detail.
Please note: for any participant under the age of 18, the maximum hours per week claimable is 40 (173.33 hours per calendar month, 520 hours per quarter).
Actual - grant schemes
Evidence required
Evidence required is defined in ‘Guidance Note for Grant Fund Managers’ available via our website. The stage 1 check should be carried out based on the risk levels defined in the OVP for the Operation; the Stage 2 check should be carried out on a selection of these costs.
When completing the verification the MA will refer to the evidence detail as outlined in the grant fund manager guidance:
- Stage 1 – see section 1.6 Grant Verification Stage 1
- Stage 2 – see section 1.7 Grant Verification Stage 2
Actual – graduate placements
Evidence required
Evidence required is defined in ‘Guidance Note for Grant Fund Managers’ available via our website. The stage 1 check should be carried out based on the risk levels defined in the OVP for the Operation; the stage 2 check should be carried out on a selection of these costs.
When completing the verification the MA will refer to the evidence detail as outlined in the graduate placement scheme manager guidance:
- stage 1 – see section 2.1 - Graduate Placement Stage 1
- stage 2 – see section 2.2 - Graduate Placement Stage 2
Payments to delivery agent or for challenge fund
Evidence required
The lead partner should provide an extract from their financial systems to show their payment to the Delivery Agent(s) or challenge fund recipient(s), through to a copy of the recipient’s bank statement, including a batch payment and/or BACS run as required
Contact
europeanstructuralfunds@gov.scot
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