ESIF Programme Monitoring Committee minutes: December 2021

Attendees and apologies

• Hilary Pearce (HP) - Scottish Government (Chair)
• Cathy Cacace (CC) - Scottish Government
• Susan Tamburrini (ST) - Scottish Government
• Ryan Gunn (RG) - Scottish Government
• Robert Buntin (RB) - Scottish Government
• Euan Barclay (EB) - Scottish Government
• Stewart Christie (SC) - Scottish Government
• Kayleigh McLean (KMc) - Scottish Government
• David McKinley (DM) - Scottish Government
• John Kerr (JK) - Scottish Government
• Louise Lang (LL) - Scottish Government
• Angus Murray (AM) - Comhairle Nan Eilean Siar
• Jackie Thomson (JT) - Orkney Island Council
• Christine Mulligan (CM) - Skill Development Scotland
• Malcolm Leitch (ML) - Scottish Local Authorities Economic Development (SLAED)
• Francesca Giannini (FG) - Scottish Enterprise (SE)
• Rob Clarke (RC) - Highlands and Islands Enterprise
• Gavin Bruce (GB) (substitute) - Scottish Funding Council
• Neil Ritch (NR) - Big Lottery
• Guus Muijzers (GM) - European Commission
• Joanne Knight (JKn) - European Commission
• Kris Magnus (KM) - European Commission DG Regio
• Susan Fleming (SF) - European Commission DG Emploi

Items and actions

Agenda

• welcome and apologies
• conflict of interest
• minute of previous PMC meeting – 13 May
• financial/operational performance update
• PMC working group summary
• risk register
• communication update
• closure of the 2014-2020 programmes
• evaluation strategy update
• European Social Fund (ESF) suspension update
• any other business

Welcome and apologies

HP opened the meeting and welcomed all in attendance. HP noted that this was the second meeting of the committee this year with the previous meeting held in May and that a series of working group meetings have taken place in the interim. The working group included PMC members and have done sterling work to contribute to identify solutions and ideas to accelerate the claims process where possible. HP thanked everyone who has taken part in the working group and for the progress made which will be discussed later in the meeting.

SC read out the list of apologies.

Conflict of interest

HP asked for any conflicts of interest relating to any of the substantive agenda items to be made known.

No conflicts of interest were reported.

Minute of previous PMC meeting on 13 May 2021

HP asked members if there were any comments on the minutes of the previous meeting.

FG noted that she had sent comments that do not appear to have been included. FG will resend her comments to RB for consideration.

KM raised a point of accuracy on an intervention on page 3.

KM added his proposed text in the meeting chat window: "Correction to the minutes: KM noted that the force majeure clause had been used for a small number of programmes but that the flexibilities introduced by the European Commission (EC) through the Coronavirus Response Investment Initiative (CRII) amendments had allowed most programmes to continue the implementation despite the pandemic, limiting the need for a wide use of force majeure."

HP assured members that these amendments to the minutes will be reviewed and the minutes re-circulated.

HP read through the actions and noted that all actions have been carried out or are included within the papers circulated for today's meeting.

ML noted on Action 8 that he has no recollection of a follow up paper having been circulated on the revision to the paper that was considered and asked what progress has been made. ML asked if a formal change to the Operational Programme (OP) for both European Regional Development Fund (ERDF) and ESF has been made to reflect the 100% intervention rate and did the Managing Authority (MA) get a declaration through under the 100% intervention rate?

HP noted that the declaration submitted in June was under the 100% intervention rate.

RG noted that he has notes for all items contained within the action log which he will share members. RG added that it is his understanding that we had shared this but we will check and follow this up.

RB added that the OP for both ESF and ERDF were revised, approved and adopted by the EC - these have also had a more recent revision to remove the 100% intervention rate as this has now ended.

FG noted that the version of the OP online doesn't appear to be the most up to date and asked if this could be updated.

HP assured members that this will be investigated and rectified.

Financial/operational performance update

HP introduced the paper and noted it has 5 annexes, the key points of the paper are: within the text of the paper it details that the commitment levels are 90% for ERDF and 101% for ESF, at the point the paper was produced there had been a slight improvement in performance by claims and that a number of initiatives have been put in place to address this. 

As we get closer to the end of the year we are getting closer to the N+3 targets for the programme with a lot of this work coming to fruition in the last few weeks before the 20 December declaration. The position at 16 November shows the potential de-commitment for ERDF as £23.7m and ESF as £22.9m. However since the paper was produced there are already 4 areas where the declaration will include items not counted - these are: some further pending claims, the re-introduction exercise, the Technical Assistance (TA) claim and the Unit Costs (UC) retrospective claim 4. 

HP asked if the governance team had a more up to date estimate of what will be included in the December declaration?

RG explained that the governance team have pressed colleagues for an updated estimate but this was not available yet.

HP noted that the paper also highlights the MA's request of Lead Partners (LP) to identify any likely underspends by end November, the MA have received some responses by the deadline but not many.

RB noted that 14 responses so far have been passed to the governance team all under the inclusive team's portfolio.

RG confirmed that these are the only responses he is aware of.

HP asked members for comments and questions on the paper.

ML thanked the team for producing the paper and noted it is really helpful to have the detail within the annexes. ML suggested that after the December declaration has been submitted an update could be made to the table under paragraph 6 and that this could be sent to members.

HP agreed to do this.

ML asked if SG had considered another force majeure application this year as both programmes appear to be headed toward some level of de-commitment? ML noted that we have witnessed within ERDF some large scale de-commitment over the summer with money being returned back to the programme now which is not good as it is unlikely to be spent, an example of this which is of concern is that SG colleagues working on the latest phase of the Low Carbon Infrastructure Transition Programme (LCITP) have gone ahead without ERDF. ML further noted that he is not concerned with the small over commitment of the ESF programme at this stage as funds may well come back, this will only become a concern if there is another substantial de-commitment in 2022. ML also mentioned that reasonable progress with the increase in the rate of payment of claims, but not as much as we would like and asked if this is in part reflected by the recruitment of additional staff within the MA that was discussed at the previous PMC?

HP explained that it is not yet clear whether a force majeure application this year may be needed or indeed successful as the mechanism is intended to be used only in exceptional circumstances. Over the past year there have been some exceptional features such as people working from home and certain operations not resuming as anticipated, making a force majeure application would be extremely time consuming and work intensive as such we would need to have a reasonable indication of success and necessity before applying. On the point about de-commitment the MA have also noted that operations are being withdrawn or de-committed in certain areas, there appear to be a combination of reasons for this depending on the operation, in some circumstances match funding from other sources are now available that may offer more streamlined routes to funding, in some cases the disruption and delays caused by COVID-19 have not been fully eradicated as yet causing some operations to be unable to resume. On the ESF side we are noticing a distinct lack of participants in certain programmes which may be a factor of the economic changes across Scotland or possibly over ambition at the start of the programmes. 

RG spoke to the point about LPs reviewing budgets in particular LCITP, the minister has also picked up on this point, and it is important to understand that when LPs were putting forward proposals at the start of the Programme, so much has changed since 2014 and that the priorities may no longer remain the same.

HP added that in relation to staffing the MA now have 75 staff in post not including HP, our Finance Business Partner (FBP) and 3 fixed term contractors, 1 vacancy which is yet to be filled, 2 vacancies which have been recruited but have not yet started. This makes for an overall total of 83 staff which is larger than ever before in this current programme, we have been recruiting over the past few months to ensure people are in place to deal with the bulk of claims that will need to be processed over the next few years, the training regime has been accelerated accordingly to ensure that staff have the correct skills.

CC agreed that the capacity of staff has been significantly increased, particularly on the ERDF side.

KM raised a point about the reporting, the EC have made recommendations at previous PMC meetings that they would like to see further detail in the reporting, the current level of reporting is around the priorities and only financial figures, this makes it difficult to assess implementation on the ground, the changes previously recommended would allow PMC to make changes to the programme. 

KM further raised that he feels the implementation report has the same level of information, it has been asked that this is also expanded upon however no improvement has been seen. KM asked for the pending 2020 implementation report to be improved as it lacks narrative. KM then noted on the topic of de-commitment that he is a little lost in the information that has been presented, the paper shows a figure for ERDF of over £9m that could be sent to commission, however this leaves approximately £16m that could be de-commitment for ERDF and asked what is the potential to close this gap? KM also asked in relation to RG not being able to supply an updated estimate, who has the information that RG was pressing for? KM also noted on the output indicators annex that he cannot consolidate these with the figures in the OP and asked if time allows could someone run over the figures presented in the table?

HP asked on the point of more detail being required did KM mean at an operational level? 

KM noted that the programme is structured into priorities and objectives which have been translated into Strategic Interventions (SI) which are quite broad interventions, KM believes that it should be able to report at the level of these SIs as the information that we receive is very generic with all priority axis facing similar problems, KM is sceptical that 'Research and Innovation' is facing similar problems to 'Low Carbon Energy' so there is much more detail to be presented for these individual priority axis, for example if there is an underspend in one priority axis then we could take the decision to reallocate this to another priority axis which is in need of more money, but as this information is lacking PMC are not in a position to take these kinds of action.

RG explained he could consult with the Governance Team on some of the detail that KM has referred to, but if you look at the outputs and results it is quite clear where some of the less positive or less optimistic figures are. RG added that he is unsure if further levels of detail will be of use to the group. RG sited KM's example of using funding within priority axes, this exercise is already undertaken and we engage with the EC to move the funding. RG added that he feels the level of detail is more than sufficient but if instructed to do so by senior colleagues the team will review the data.

HP asked KM for a list of exactly what detail he wanted to see.

KM agreed and said he would do this in the context of the implementation report but as for the PMC papers this is a recommendation to PMC members but if the consensus is that the level of detail is sufficient then it is noted. KM referenced the figures in table 1A for ERDF the amount committed to SI so the table doesn't reflect what is committed to the operations, it is not necessary to see this for each individual operation as a total would suffice, it could be for example that in priority axis 2 that only 50% is going to individual operations. 

HP asked for clarity on the commitment columns of 1A, are they SIs?

RG asked if we break the information down further to include narrative to support the outputs and results what, what will members do with the additional information? 

KM said it would give assurance that implementation on the ground is working.

RG noted that the following table gives a detailed breakdown on the performance of what is working on the ground.

ML commented in the meeting chat window: "Surely Table 1a relates to operations and not to Strategic Interventions?"

RB confirmed for clarity that the committed figures within table 1A and table 1B are at operation level and that these are our legally committed figures. RB added that when he and RG first got involved in PMC the general consensus of members was that the information provided was too complex to understand so RG and RB have done a lot of work to ensure it is simplified, if additional levels of complexity continue to be added we risk returning to this point.

KM reiterated the request for the additional information within the implementation report.

HP agreed with what RB said about complexity of PMC papers as at each meeting it would seem that some members want more levels of granularity whilst others request that papers are more streamlined, perhaps if more narrative could be given this may help to strike a balance.

FG commented in the meeting chat window: "I think the issue is not adding more info, but the quality of it and the narrative behind the figures."

CC asked if it is the narrative that is missing? CC agreed that the balance has been hard to find for members, we could look at providing a single page for each priority with narrative to put some of the figures into context.

KM agreed that CC's idea sounded good and added that a presentation could be given to the monitoring committee by selecting a few of the priorities.

CC suggested that RG and RB discuss with CC offline.

RG agreed and added that all members have collective responsibility so members also have to come back with narrative around why the reported figures within the outputs and results within their priority axes are low adding that the Governance team produce the papers from the information on EUMIS and other reporting tools summarising the data inputted by LPs/members. The outputs and result on EUMIS are inputted by LPs. Therefore, if outputs and results are low, LPs/members also have a responsibility to explain why.

HP added that the Governance team and Growth teams can go back to LPs and ask for explanations on these figures.

FG commented in the meeting chat window: "In this case Ryan, MA should start asking the question to LPs."

RC noted that in table 1A that priority 1 Innovation in the Highlands and Islands is only 59% committed meaning there is around £12m uncommitted, should we be moving this? RC added that he was unaware that the value of uncommitted funds was so large, there are similar sums in other areas that also appear to be uncommitted. RC added that we need to make decisions on what we are going to do about this?

RB explained that the reason the money is sitting in priority 1 is that when the OP was revised in response to COVID-19 we moved the maximum amount available from each priority into priority 1 to support the Scottish Government response to COVID-19, at this time it was unclear where the spend would sit, most of the spend came from rest of Scotland which is why the value remains so high in the Highlands and Islands priority 1, the MA have tried to identify further health spend but tying it down to specifically Highlands and Islands this has proven difficult.

RG added that annex B details operations yet to be approved, there are significant figures within these that could also be utilised.

CM noted on the points raised about the narrative, having been on the working group she does understand some of the figures and that these could be spelt out within the paper. CM further added that her understanding on ESF where claims pending are converting to UC don't count towards N+3, the value of these is £21m, the whole UC conversion initial verification on claims submitted by LPs has not yet been cracked by the working group. CM further added that for annex B on claims received as per forecast requires further narrative to explain it better. CM further added that she has no issue around the level of detail in PMC papers, however the detail could be explained in more depth, CM suggested that the working group could look at this.

NR commented in the meeting chat window: "This sounds like an issue between data and interpretation. System based data reporting only will always be limited but it provides a sensible place to prompt questions where performance appears to be behind (or ahead of) expectation. So seeking input from LPs on those numbers as part of the report production seems sensible. But I'm very sympathetic to the challenge of balancing detail and narrative in reports which can grow and grow."

HP clarified on CM's point about claims converting to UC don't individually count towards N+3 but that the UC claim as a whole does count towards N+3 meaning that they are not completely removed from the calculation but superseded.

CM added that the time lag of the UC claim making it into a declaration is the issue.

HP agreed and noted this is why we are pressing on with this as much as possible.

CC explained that there has been significant work done on claims converting to UC, CC offered to send an update on the position out to PMC members.

FG added that more information relating to the difference in why a low carbon project being behind and an innovation project being behind. FG added that she feels the real problem affecting the reporting is the huge difference between the actual delivery and the claims being paid, when looking at the tables it looks like the programme is not delivering when we know this not to be the case, at this stage in the programme the dis-alignment between the value of paid claims and the value of what the programme has delivered is difficult to reconcile in a report, we should be asking LPs for case studies of what they have delivered to allow a clear picture to be presented, however this is not possible due to the size of the programme. 

FG noted that the table shows £24m worth of claim forecast with £0 submitted, putting it like this makes it look like LPs are being shoddy, it would be useful to see an explanation as to why these claims have not been submitted according to the forecast. FG cited SE have two claims waiting on the certification of Managing Authority Approval Panel (MAAP) to be formally approved, it feels like LPs are being held to account when in many cases LPs have been put into a position where they cannot honour their forecast. 

FG noted that on 10 November MAAP gave approval to changes and are still awaiting the minister's formal approval, this is really delaying the programme, and in the dire situation where we are we are still being hindered by processes, formalities and IT issues, when we should be focussing on the substance. FG noted that she is pleased to see the MA ramping up staffing, however the number of staff in the last programme was far higher when taking into account all of the bodies involved.

CC noted that her understanding is that the governance team ask LPs why they have not been able to deliver on their forecasts. The paper shows that everything forecast in November was not sent to us, there will be various reasons for that but for the majority it is that LPs haven't submitted them to us. CC asked what would PMC want to collectively do about this, apart from asking why these have not been submitted, what else can be done?

FG added that PMC need to see the reasons.

HP added that this is something that the PMC working group should look into.

CC added that it would be helpful if the separate LP groups add this as a standing item on their agendas, asking LPs why they have not submitted any claims? This would allow us to come back collectively with different views on why this has occurred. CC noted that we cannot demand a timeframe for ministers to make a decision, we can only highlight this to Private Secretaries.

PMC working group summary

HP introduced the paper and noted that at the last PMC it was agreed that a working group would be established, this lead to a significant commitment by members and colleagues over both summer and autumn to examine the rate and flow of claims submitted by LPs alongside the verification and payment cycle within Scottish Government, the paper summarises the activity and recommendations. 

ML added that unfortunately nothing could be done in time to impact the performance of this year's payment and claims processes, and that the paper explains the need for continued PMC scrutiny.

CM echoed ML's points and added that a lot of good work was undertaken to identifying the issues but unfortunately the working group didn't manage to have as high of an impact as it would have hoped as there are not that many quick fixes, given circumstances such as resource issues during the year, the MA having to manage additional checks and processes alongside their regular workload, the commitment remains from the group to continue addressing new issues that need to be worked through with an aim of having a bigger impact next year.

HP noted that it was somewhat inevitable given the systems issues and some of the working groups suggestions won't come to fruition until next year.

FG echoed CM's point about it being good to see progress has been made, the two actions that can be taken from the paper are: the removal of items that lack evidence and reintroducing these into a later claim to speed up payments of claims and to review the risk level of each operation with the aim of reducing the number of checks that are required. CM asked what impact are these likely to have in the overall claims process from the MA's point of view and could an estimate be made?

RG explained that it is very difficult to put a figure on this, RG added that he is confident that by reducing the number of checks when coupled with additional staff this will significantly improve and accelerate the process.

ML noted regarding the streamlining of checks for UC claims the question still remains, why are so many financial checks needed? This has been raised at both the working group and inclusive growth LP meetings. ML asked if an update can be given on this position?

HP assured members that this is in discussion with our Audit Authority (AA) exactly what is necessary as they too do not want to be undertaking unnecessary checks.

CC agreed with HP and noted that she will include an update on the position of the article checks alongside her update on the work being undertaken on claims converting to UC. This will be issued to members by the end of week.

HP added that our AA are in the process of checking a couple of areas with the EC auditors to ensure all relevant checks remain in place.

CC added that it is difficult to assess the impact of reducing the risk rating as this will vary due to the size of the claim as this is a determining factor in how many checks are required.

HP agreed and added that smaller more frequent claims are easier to assign lower risk ratings to generally speaking.

CM added that some clarity from the AA would be helpful as Skills Development Scotland (SDS) are currently undertaking an article 127 audit on a claim that has been converted to UC and yet the AA are looking at original achievements. CM agreed that smaller more regular claims would be ideal, however as we are going into 2022 and there is a large backlog of claims that will be large.

HP explained that she recognises this will be easier to do for some organisations than others.

Risk register

HP introduced the paper and noted that in line with comments received during the last meeting alongside best practice from SG Risk division the risk register has had a complete reformat to present the 8 key risks in the “if” and “then” format. The controls are in place and the actions and scores have been reviewed and updated, this will continue to be the case on a monthly basis going forward. 2 risks have been removed as they are no longer appropriate as they related to the start of the programmes. HP added that she would like PMC members to endorse the addition of a 9th risk to cover the closure of the programmes.

HP asked members for comments on the amended risk register.

ML endorsed HP's view that an additional risk should be added at this time.

FG endorsed the additional risk and added that the risk should be expanded to include LPs submitting bulk high volume, high value claims at the very end of the programme. FG praised the changes to the risk register as this shows the comments made at PMC in May have been taken into account. FG added that when looking at risk 1, what will we do if we cannot mitigate this risk, this links to a question from PMC in May: what if all measures put in do not work and the programme times out? What happens if the MA is not able to pay all claims by the closure date? 

The minutes from PMC in May state that the operational commitment is an obligation to SG and that SG will honour their obligation where LPs have met the grant conditions, what is meant by meeting the grant conditions, does this include submission of claims? What if LPs are unable to submit all claims before closure? Could these be expanded upon within the risk register?

HP explained that the risk added to the PMC risk register will be a generic risk of closure not being implemented correctly or within the required timescales, the "then" part of the risk will articulate what the impact of this is, as with several of these key risks there will be a number of sub risks which will go into more detail of deadlines or targets not being met, these could be described as a second layer of sub-risks which the MA will make sure are covered. 

HP added on the point of the SG commitment, the grant offer letters are a legally binding contract, if the conditions have been met for which the grant is applicable. If claims cannot be submitted we would have to carefully examine what is within the grant offer letters and the situation preventing claims from being submitted.

CM added that she has had a similar conversation with her risk manager where SDS now have a risk that if they are prevented from submitting a claim onto EUMIS due to for example a previous claim blocking the system and we effectively time out, what are the implications of this? The offer of grant letter doesn't appear to give an assurance on this.

HP added that it is unlikely this position would have been envisaged when the grant offer letters were drafted.

CC added that PMC need to come together and make decisions on how to mitigate these risks, this may well include revisiting some of the offer of grant letters, the PMC working group could be tasked with investigating how to mitigate against this, this could for example include mitigations like every operation should have claimed at least 75% by a specified point in time.

HP added that the working group could look at whether the MA should priorities claims where there is a subsequent claim awaiting submission, this could help prevent these blockages.

CM added that we should look at this in the context of the profiles for 2023 as once the working group look at this a huge bottleneck may become apparent.

HP noted that the risk register will be updated to reflect the risk around closure prior to the next PMC.

Communication update

HP introduced the paper, the key items to note are: the LP event which took place on 23 June with the next being planned for 14 December, this will see the launch of the online case study booklet and it is hoped that the minister will attend the meeting. Our website undergoes regular updates, however the earlier point about the OP being out of date will be addressed, the website has undergone a considerable accessibility review recently so changes are required to be made to the format over the next few weeks and the final key point is that e-bulletins have been issued every 2 months.

ML noted that the website is looking out of date in terms of the information that has come in and it is well behind on the list of approved operations which has not been updated for over 6 months. ML added that he has personally had difficulty in finding the latest version of document retention requirements for previous programmes, ML stated that this should be easy to find.

HP noted ML's points but added that there are some constraints placed upon us by SG digital.

RB added the reason for the approved operations being out of date is that 3 MAAP meetings have been grouped together as the substance coming out of them was very minimal for a submission to be sent to the minister, for example an increase of £0.65 came to MAAP, once approval is given for decisions made at MAAP on 10 November all of these will be updated at one time.

RG added that the MA is looking for speakers to publicise the ERDF and ESF case studies at the LP event on 14 December.

Closure of the 2014-2020 programmes

HP introduced the key points within the paper: the EC published the closure guidance on 15 October, HP and colleagues joined a UK-wide EC workshop on 29 November which included a useful presentation, a number of questions and clarifications came out of this, the slides were circulated to the MA for publication on our website, these will be summarised to LPs in a future e-bulletin. Annex A details the key deadlines for closure. 

HP added that the MA will be making as much information available as possible and ensuring it is easily accessible online. HP further added that she hopes the working group will continue to help manage this as cleanly as possible.

KM noted that it is important that we ensure the working group doesn't replace the work of the PMC, it is important that the PMC are regularly kept updated on the workings of the working group. 

HP agreed with this.

Evaluation strategy update

HP noted that members are aware that the evaluation of delivery structures and the evaluation of the Highlands and Islands impact of the structural funds programmes are underway and 2 further evaluations are planned for next year with the final evaluation after that. A separate briefing session is booked for LPs this Thursday 9 December with EKOS who are the consultants who were successful in the tendering process.

ML asked what are the plans for dissemination of the Highlands and Islands report?

RG explained that the report will come to both PMC and Highlands and Islands Territorial Committee (HITC) and then be published online.

ML asked that will a similar session be ran as with the current evaluation?

RG noted that these discussions are underway and there will be a similar dissemination exercise for HITC members.

HP added that she hopes as many people as possible attend the EKOS session this week.

ESF suspension update

HP noted that as members are aware the ESF programme remains in suspension, the MA, AA and Certifying Authority (CA) have been in close contact with the EC for many months over exactly what is required in order for the suspension to be lifted. HP added that we have been working throughout the year on compiling all of the packages of evidence to assure the EC that all of issues that arose in their audits have now been rectified, checked and in place, senior EC auditors had planned to visit Edinburgh this week but have postponed until 17 January due to the reintroduction of COVID-19 related restrictions, this is disappointing but allows us additional time to ensure all is in place. The package of evidence comprises 4 key areas: the EPSA report recommendations which we believe we have completed all of those recommendations except one which cannot be completed as we do not have enough of a sample, UC methodology and the checks and application are the second part which we are confident is sound, thirdly the systems audits for this year have all come out at category 1 or 2, the fourth part is the re-applied procurement verifications which go towards the procurement verification systems audit it's self is being finalised now. We are hopeful that this will be sufficient for EC auditors to make a positive recommendation in January.

ML asked if the EC auditor visit in January is only to the MA or is there a likelihood of questions being asked of LPs?

HP noted that she is only aware of the items she noted above. HP will seek clarity on this point.

Any other business

MA staffing

HP informed members about a staffing change within the MA with ST and RG having a partial swap of duties, ST has been doing the quality assurance work which is being transferred to RG to ensure that no conflict arises as ST would have now had to give assurance on work that she was the lead on, RG will be head of assurance and monitoring, ST will be head of the growth teams and training.

Annual fraud report

HP noted as head of the MA she is required to report any incidents of fraud to PMC on an annual basis, there was an incident of attempted fraud on 26 February 2021, this was unsuccessful, spotted immediately and there were no loss of funds. The attempt was made by a perpetrator who effectively hacked the emails of a recipient organisation, the circumstances were that the LP had received a payment correctly from us prior to the attempted fraud. On the following day the MA received a suspicious email purportedly from the LP requesting the payment be resent to new bank details, this was identified as suspicious for very obvious reasons not least the incorrect spelling of Scotland. Our Cyber Security team and the security team at the LP were both alerted. A full report has been made to the security team and the matter has been closed with no further incident.

PMC working group

CC asked for clarity if PMC are formalising the continuation of the PMC working group?

HP asked if members are content to agree this.

ML feels that PMC have given implicit approval for the continuation of the working group into 2022.

CC agreed with this and proposed that the working group meet next near to the end of January.

FG agreed and asked if we can agree the frequency of updates to PMC, it was mentioned at the last PMC to see how the working group goes before deciding if more full PMC meetings would be required.

HP agreed that with the closure programme implementation, more frequent updates will be considered, the frequency of both sets of meetings will be considered

CC suggested this be an action for the WG, anything substantive that needs to be taken to a full PMC can also be discussed.

HP added that it is important to maintain the required minimum number of PMC meetings per year, but that we could hold more focused interim PMCs if required.

HP closed the meeting and thanked members for their attendance and input.

Action log

• amend previous minutes with comments from FG and KM (owner: governance team; status: complete)
• RG to share his notes on action points (owner: Ryan Gunn; status: ongoing)
• circulate paper regarding point 8 (owner: governance team; status: speak to Lynda Smith – access to UC claims process sheet)
• updated OP to be added to website (owner: governance team; status: complete)
• table in paragraph 6 will be updated and sent after declaration (owner: governance team; status: complete)
• KM to supply list of what detail he wants added (owner: Kris Magnus; status: complete)
• CC, RG and RB to discuss adding narrative (owner: Cathy Cacace; status: complete)
• CC to provide update on expenditure claims process for those operations converted to Unit Costs (owner: Cathy Cacace; status: complete)
• CC to provide clarification from the Audit Authority on Article 127 process for operations that have converted to unit costs (owner: Cathy Cacace; status: complete)
• risk register to be updated with closure risk prior to next PMC meeting (owner: Hilary Pearce; status: complete)
• HP to clarify if EC auditors will be contacting LPs as part of their visit in January (owner: Hilary Pearce; status: complete)