simplified cost options in european cohesion policy, yesterday and tomorrow louis vervloet, general...
TRANSCRIPT
Simplified Cost Options in European Cohesion policy, yesterday and tomorrow
Louis Vervloet, General director, ESF Agency Flanders
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Purpose of the presentation
•Present the origin of “simplified cost options” (SCO’s) and their main features
•Present the SCO’s included in the Cohesion Regulations for 2014-2020
Name of your presentation
3Name of your presentation
Origin of simplified cost options
• Flat rate for indirect costs in the original ESF Regulation.
• Majority of errors found by ECA in structural actions expenditure due to the complexity of the rules
• ECA 2007 annual report: making a greater use of ‘lump sum’ or ‘flat rate’ payments instead of ‘real costs’
• Recovery plan November 2008: ESF amendment to allow unit costs and lump sums. Provisions extended to the ERDF: ERDF applies ESF rules. Amendments adopted in 2009.
• Options already exist in the Financial Regulation or some other policies
4Name of your presentation
SCO’s in 2007-2013
1. Flat rate for indirect costs: indirect costs calculated as a % of direct costs (maximum 20%)
eligible cost = direct costs + (% of direct costs)
2. Standard scales of unit costs: reimbursement calculated on the basis of delivered quantities multiplied by a unit cost
- Ex: eligible cost = nb of trainees x cost by trainee
5Name of your presentation
SCO’s in 2007-2013
3. Lump sums (<50 kEUR): reimbursement when
pre-defined terms of agreement on activities and/or outputs are completed
- Eligible cost = lump sum amount (if completed) or 0.
6Name of your presentation
Key points of SCO’s in 2007-2013• Optional
• ESF and ERDF only
• Only for grants (no operations or projects subject to public procurement contracts)
• SCOs shall be calculated ex ante on a fair, equitable and verifiable basis.
• Simplification! No audit of underlying financial documents. Amounts paid considered as paid expenditure if justified by direct costs (flat rate) or “quantities” (standard scales and lump sums)
7Name of your presentation
Evolution
• MS started using flat rates after approval of EC
• Very slow implementation of standard scales and lump sums due to legal uncertainty
• ECA annual report 2012The Court did not detect any errors related to the specific use of SCOs.
This indicates that projects whose costs are declared using SCOs are less error prone.
Thus a more extensive use of SCOs would normally have a positive impact on the level of error.
8Name of your presentation
SCO’s 2014-2020: guiding principles
Simplified costs = keys in terms of simplification and in terms of better focus on results:
• Maintain the ‘acquis’
• Extend the use
• Harmonise the options while taking account of specificities (and the acquis)
• Improve legal certainty
The Regulations provide for a toolbox of different possibilities from which you can choose according to your needs.
13Name of your presentation
How to calculate standard scales of unit costs (1)
• STEP 1
–Define clearly the nature of the requested projects/operations in the call
= the cost drivers of your call for projects
• STEP 2Check the historical data (real costs) on similar
projects/operations
Look for possible benchmarks
PES, education system, other experiences
14Name of your presentation
How to calculate standard scales of unit costs (2)
• STEP 3
–Calculate the averages and define
• STEP 4
–Check and discuss with colleagues in MA-CA-AA
• STEP 5
–Decide Communicate and Implement
IMPORTANT : stay constructive – critical and be your own “devils advocate”
16Name of your presentation
How to calculate lump sums (1)
• STEP 1 - define the nature of the project/operation and the result wanted
the result is your cost driver• STEP 2 - define a detailed list of items/actions
that appear in a reasonable budget• STEP 3 - Check historical data or look for
benchmarks in public and private sector for the whole and for each item if possible
17Name of your presentation
How to calculate lump sums (2)
• STEP 3
–Calculate the averages and define
• STEP 4
–Check and discuss with colleagues in MA-CA-AA
• STEP 5
–Decide Communicate and Implement
IMPORTANT : stay constructive – critical and be your own “devils advocate”
18Name of your presentation
Limits of lump sums
•Only for projects with a max of 100.000 EUR public contribution
•Never use lump sums if you cannot define your result as a realistic and achievable
single unit
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Project
MA/CA
agreed UC/LS1 people = 100€
Eligible expenditure
10 people justified x 100€ = 1000€
Project = outcome
10 people
What is the difference between article 67 CPR and article 14.1 ESF?
Claims reimbursement
10 x 100€ = 1000€
Reimbursement1000€ x %ESF
25Project
MA/CA
agreed UC/LS1 people = 100€
Eligible expenditure
10 people justified x 100€ = 1000€
Project = outcome
10 people
MA/CA
COM
UC/LS1 people = 100€
MA/CA
Outcome 10 people
What is the difference between article 67 CPR and article 14.1 ESF?
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What is the difference between article 67 CPR and article 14.1 ESF?
Project
MA/CA
agreed UC/LS1 people = 100€
Eligible expenditure
10 people justified x 100€ = 1000€
Project = outcome
10 people
MA/CA
COM
UC/LS1 people = 100€
Reimbursement1000€ x %ESF
MA/CA
Outcome 10 people
Claims reimbursement
1000€
COM
Reimbursement 1000€ x %ESF
Project
Outcome = 10 people
Claims reimbursement
Reimbursement on the basis of national rules
28Name of your presentation
Flat-rate financing (1)General (Art 67,1 d): examples
• Reminder: Never compare rates directly! Compare also the categories of costs calculated with the rate, and the categories of costs to which the rate is applied.
29Name of your presentation
Flat rate financing (2)calculate indirect costs (Art 68 CPR)
• * ESF, for grants < EUR 100.000
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Comparison current / future
- flat rate to calculate indirect costs -> flat rate to calculate any type of costs
- increase of lump sum threshold
- more calculation methods
- lump sums / unit costs compulsory for small ESF grants
• But everything that is used now is usable in the future!
31Name of your presentation
Key points for implementation (1)
• Consider, consult and involve all stakeholders in the development and implementation of SCO’s
• Keep It Simple and Clear
• Timely and transparent communication prevent frustrations and misunderstanding
•
32Name of your presentation
Key points for implementation (2)
• Change the mindset:
• First SCO’s – only if proven impossible – real costs are allowed
• SCO’s are averages, some will gain but some will lose
• Simplification is key for better results
33Name of your presentation
Key points for implementation (3)
• Always keep in mind the simplification purpose.
• Compare the options and decide before the start of the programme!
• type of operations,
• data availability,
• legal certainty or flexibility,
• Define where your national rules block you
34Name of your presentation
Relevant legal references and documents
For the current period:
• COCOF note on simplified cost options
For the future:
•Updated guidance note (exp. end 2014)
•Simplified cost options:
–Art 67 & 68 Common Regulation (applicable to the 5 CSF Funds)
–Art 14 ESF Regulation (applicable to ESF)
–Art 18 ETC Regulation (applicable to ETC)
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References
Louis Vervloet
General director
ESF-Agency Flanders
Gasthuisstraat 35 5th floor
1000 BRUSSELS
[email protected] of your presentation
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What is the difference between article 67 CPR and article 14.1 ESF?
Project
MA/CA
agreed UC/LS1 people = 100€
Eligible expenditure
10 people justified x 100€ = 1000€
Project = outcome
10 people
MA/CA
COM
UC/LS1 people = 100€
Reimbursement1000€ x %ESF
MA/CA
Outcome 10 people
Claims reimbursement
1000€
COM
Reimbursement 1000€ x %ESF
Project
Outcome = 10 people
Claims reimbursement
Reimbursement on the basis of national rules