Appointment of a First Level Controller - Statement of Requirements (SOR)

Transcription

1 Territorial Co-operation Programmes Appointment of a First Level Controller - Statement of Requirements (SOR) Introduction Beneficiaries participating in Territorial Co-operation Programmes are required to procure a first level controller to verify the eligibility of the expenditure they have incurred in the project so that it can be reimbursed by the Programme authorities. The controller has to be procured in accordance with applicable public procurement rules or the organisation s internal rules. In the absence of any established rules at least three quotes should be obtained to obtain best value for money. The guidance below sets out the information that should be incorporated in any scope of work for quotes/ tenders when procuring a first level controller. The purpose is to ensure that prospective bidders fully understand the unique requirements and differences from conventional audits so that they can take them into account when submitting their proposals. Territorial Co-operation Programmes European Territorial Cooperation (ETC), better known as Interreg, provides a framework for the implementation of joint actions and policy exchanges between national, regional and local actors from the 28 different European Union Member States. The overarching objective of European Territorial Cooperation (ETC) is to promote a harmonious economic, social and territorial development of the Union as a whole. Interreg is built around three strands of cooperation: cross-border (Interreg A), transnational (Interreg B) and interregional (Interreg C). The funding is provided by the European Commission and the Programmes are managed by Member States. [In addition to the above include a short introduction to the Programme to which the project belongs and from where it is managed. Include the website link for the Programme. Provide a brief background on the project itself and the role of the beneficiary (partner or lead partner)] RESET The objective of the project relates to the strengthening of research, technological development and innovation to assure the sustainability of the T&C sector within the partner regions. It will be achieved through policy learning and capacity building activities on public policies supporting innovative, green and sustainable T&C production and processes. The learning potential embedded in interregional exchange will result in the uptake of new good practices and projects by the partner

2 regions to support excellence in R&D, to promote investments by enterprises, to develop innovative skills of stakeholders, and in a deeper integration between research and innovation policies for the sector s sustainability. Sustainability driven research and innovation will concentrate on production processes and product development by: improving recycling and reducing waste disposal decreasing water consumption and allowing energy saving reducing the environmental impact of the chemical substances used by the sector accompanying the industrial reconversion efforts towards smart sustainable textiles promoting the utilisation of natural fibres and locally produced raw materials fostering eco-creativity for new applications. The project is funded under the Interreg (ERDF) programme. The lead partner is the Municipality of Prato. There are 8 other partners including the TCoE who are (not exclusively) the lead for the communications package. The project primary activities started on 1 st April 2016 and are due to complete in March The reporting requirements end 31/03/2021. Total funding for TCOE 275,000 at 75% intervention 206,250. The website for the project is currently under construction however a link to our website with details for the programme can be found at First Level Control System background Article 125 of EC Regulation 1303/2013 requires a Managing Authority of a Programme to verify that the grant provided to beneficiaries has been spent on financing products and services in compliance with applicable Programme rules and applicable national and EU legislation. Under Article 23 of EU Regulation 1299/2013 for ETC Programmes requires a participating Member State to designate a person to carry out these verifications in relation to beneficiaries on its territory. The Member State responsibility for the UK (excluding Northern Ireland) rests with the Department

3 for Communities and Local Government (DCLG) who is responsible for checking the suitability of the First Level Controller (FLC) proposed by the beneficiary and confirming the appointment. DCLG is accountable for the efficient working of the verification system that it has put in place. Requirement to be a first level controller The FLC is a named person within a firm. The FLC must meet two requirements: Professional Qualification The FLC should be a practicing certificate holder meeting the Companies Act requirements to be a company auditor. The FLC should belong to one of the following professional bodies: Independence o The institute of Chartered Accountants in England and Wales o The Institute of Chartered Accountants of Scotland o The Association of Chartered Certified Accountants o The Chartered Institute of Public Finance and Accountancy o The Institute of Chartered Accountants in Ireland o The Association of Authorised Public Accountants o The Association of International Accountants The FLC has to be completely independent from all aspects of the project management and delivery. The FLC should also not take on any new role which could compromise this independence during the life of the project. Responsibilities of a First Level Controller The verifications to be carried would cover administrative, financial, technical and physical aspects of the project, as appropriate. Verifications would ensure that: The expenditure declared is real That the products or services have been delivered in accordance with the approval project decision That the applications for reimbursement by the beneficiary are correct That the project partner and expenditure have complied with the applicable Programme, EU and national rules The FLC is required to provide assurance on the eligibility of the 100% of the expenditure included in each claim. FLCs can use their professional judgement how to do this but must provide assurance on the 100% of the expenditure in the claim. The verification of expenditure is therefore not similar to an audit where the prime purpose is to form an opinion on the information in the financial report taken as a

4 whole, and not to identify all possible irregularities. FLCs can reject items of expenditure if they do not meet the eligibility requirements and use their professional judgment to apply financial corrections if some aspects of procedures, such as with public procurement, have not been complied with in accordance with the guidelines provided. An important aspect of the work would be to check compliance with public procurement rules when obtaining goods and servicers. Verifications will include the following procedures: Administrative verifications(based on documentation provided) in respect of each application for reimbursement by the project partners On-site verification at least once in the life of project to check the reality of the project delivery and those aspects of compliance that can t be done through administrative checks. Each expenditure verification would be end-to-end. This means checking: The relevance of the expenditure to the project The eligibility according to programme rules The provision within the approved budget The methodology for claiming costs such as overheads and staffing The compliance with procedures for buying goods and services The defrayment through accounting and payroll evidence Compliance with publicity requirements The FLC must be able to complete the verification work within two months from the end of each claim period. It will be the responsibility of the project partner to provide all the supporting documents for each expenditure claim. The FLC will use guidance and tools, including on-line applications, provided by the Programme authorities to conduct the verifications and report the findings. Training will be provided on the use of the tools and the Programme rules. The expenditure would be reported in Euros and the conversion from Sterling would be done using exchange rates provide by the European Commission. Standard of verification is expected to be high to prevent any irregular expenditure being claimed. As a guide the European Commission considers any errors above 2% of the expenditure verified as material. The work of the FLC may be subjected to higher level audits conducted on behalf of the European Commission and DCLG. FLCs would be expected to fully co-operate with these audits. (If the lead partner include the extra work involved in checking the completeness of first level control done on the claims of the other partner and to provide assurance on the consolidated claim for the full partnership).

5 Budget (Set out the duration of the project, the budget of the project partner, and the categories of the budget line. Set out how many claims will be made during the life of the project) The duration of the project is 1 st April 2016 until 31 March 2019 (phase one) and 31/03/2021 reporting (phase two) The budget lines for TCOE are as follows. Staff costs 123,200 Office and administration 18,480 Travel and accommodation 20,000 External expertise and services 113,320 All amounts are presented in Euros and the intervention rate is 75% of the above costs. Claims are every 6 months the first period is 01/04/2016 to 30/09/2016. There will be 6 claims submitted to the end of the project (phase one) 31/03/2019 and two further claims March 2020 and March 2021 for phase two the reporting period of the project. Approach and Methodology (Ask for the FLC to set out how they will approach the verification and whether they will use any support staff. If support staff are used how their work will be validated.) Please refer to the requirements above and respond accordingly. Location of work (Be clear where the documentation is located and how these would be made available. Explain briefly the accounting and payroll systems that would be used for the project expenditure.) The documentation for the project is located at Textile House, Red Doles Lane,

6 Huddersfield, HD2 1YF. The Centre operates Sage line 50, payroll is outsourced but all records can be viewed at the Centre. Fees (Be clear about the fees: will it be per claim or an hourly/daily rate. It is better to have a fixed cost per claim to manage the costs within the budget included in the project approval. Indicate the extra work involved for the on the spot check.) Please provide the relevant information per the guidance. Please also provide your quote for fees in Euros. This will be converted to GBP using the OJEU guidance for each claim (FLC invoice date). Commencement, duration and award (Be clear when the first claim is likely to take place. The FLC appointment is for the duration of the project unless it is terminated by DCLG or with mutual agreement between the FLC and the project partner. The contract should be formalised through a service agreement/ letter of engagement) The first claim will be for the period 01/04/2016 to 30/09/2016 and would need to be checked, verified and all appropriate reports/mandatory requirements received by TCOE no later than 1 st November 2016.