European Structural and Investment Funds

Changes to National Rules: what’s retrospective?

November 20, 2019 by Patrick Douglas No Comments | Category Updates

The revised National Rules on eligibility of expenditure were published on the Scottish Government’s European Structural Funds webpage on 23 September 2019. This is the seventh version of the National Rules and it applies to all activity from the date of publication onwards.

The changes to the National Rules were a key part of the agenda at last month’s Lead Partner event. A summary of key changes was prepared for the discussion sessions and was emailed to Lead Partners on 16 October. The summary is also available online for the benefit of Lead Partners.

Some of the changes included in this version are to be applied retrospectively. These should be noted by all lead partners and any necessary changes should be implemented as soon as possible.

There are three main reasons that these changes have been made and applied retrospectively, as opposed to the usual practice of changes being applied from publication.

The list of retrospective changes is below and is categorised by each reason for change. Please note that it refers to the changes summary document as well as the contents page of the National Rules.

Changes required by the European Commission

• Based on the recent Early Preventive Systems Audit visits (EPSA) by the European Commission, these changes were required by the auditors to address weaknesses in previous rules and ensure compliance with all regulations.
• This includes changes 1 – Performance Management, 3 – Procurement with Match and 5 – Participant Consent of the summary document, plus Participant Consent (1.19) and Staff Costs (4.2.1).
• Changes to Unit Costs (2.1) and Flat Rate Options (2.2) have been made to reflect changes to EC regulations.

Changes sought by Lead Partners

• Since the previous publication of the National Rules, lead partners have sought clarification on the detail of some of the rules.
• This includes Confirmation that the 40% threshold for claiming staff costs is per payroll month (part 4.2.1) which has been added based on questions raised by lead partners. This is the definition which has been provided since the rule change in Feb 2018, but has now been incorporated into the National Rules.
• Similarly, there are changes to Back Pay (4.2.1), Part Time Staff (2.2.1) and Annual Leave Buy Back (5.7).

Updated definitions of existing rules

• The definition of terms such as ‘lead partners’, ‘delivery agents’ and ‘match funding’ have been provided elsewhere (e.g. Roles and Responsibilities document, Offer of Grant Letter) but have now been incorporated into the National Rules. This includes change 4 – Match Funding in the summary document.
• Previous versions the National Rules have included that EU and Scottish procurement rules should be observed. These changes emphasise key points to be noted and the potential penalties. These are outlined in change 2 – Procurement in the summary document.
• The evidence required for non-financial support in the ERDF programme (4.2.12) has been incorporated into the rules.
• There are further changes to Match Funding (1.5) and Audit Trail (1.7).

If you have any questions relating to the National Rules, please contact your Portfolio and Compliance Manager.

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