European Structural and Investment Funds: Management and Control System

Overview

1.1. Information submitted

The Member State is the United Kingdom

The formal authorisation enabling the Scottish Government (SG) to operate and manage European Structural and Investment Funds (ESIF) Programmes derives from the Scotland Act 1998 which devolves authority to the Scottish Parliament and Administration. Schedule 5 of the Scotland Act 1998 sets out which powers are reserved to the United Kingdom Government under the devolution settlement including foreign policy. 

This Management and Control System covers the following programmes

• European Regional Development Fund (ERDF) Scotland, CCI No; 2014UK16RFOP004
• European Social Fund (ESF) Scotland, CCI No; 2014UK05M9OP002

The main point of contact for coordination of this document is:

Hilary Pearce
European Structural and Investment Funds
Scottish Government
5 Atlantic Quay
150 Broomielaw
Glasgow G2 8LU
Tel: +44 131 244 1135
Email: Hilary.Pearce@gov.scot

1.2.

The dates of formal publication of the Management and Control System (MCS) are July 2016, 8 March 2018, 23 September 2019, 30 March 2020, 3 May 2021, and 5 July 2023.

1.3. System structure 

For the ERDF and ESF programmes the functions of the Member State are undertaken by the European Structural Funds and Subsidy Control Division (ESFSCD), a division of the Directorate for Economic Development within the Directorate-General Economy of the SG. This reflects the governance arrangements following devolution and the establishment of the Scottish Parliament and SG. The SG has primary responsibility for the implementation of the funds and for their sound financial management. The SG accepts the responsibility for preventing and detecting ineligible expenditure and for appropriate recovery of funds.

The Head of the ESFSCD is responsible for the MCS and the functions detailed within it. Any proposal to depart from the processes and procedures set out in the desk instructions will be authorised at a minimum of Deputy Director level. All desk instructions listed in the accompanying annex (Annex 1) are subject to review and change as and when required and may be published out-with this main text document. This will be fully version controlled on the individual documents. The timelines and requirements prescribed around each function (and contained within the individual desk instructions) may also be subject to change and extension, as directed by the EC in exceptional circumstances, e.g. Local or National Emergency (when triggered by the UK or Scottish Governments).

Annex 1 captures the workflow and key documents to undertake each of the functions associated with managing European Structural and Investment Funds. An Annual Review will be carried out into the continued effectiveness and detail of this Management and Control System and updates will be agreed between the Managing Authority (MA) and Audit Authority (AA) before being used. The individual sections will be maintained by the relevant body, i.e. MA, Certifying Authority (CA) and AA. 

The main reporting lines between the Managing, Certifying and Audit Authorities, and the European Commission can be viewed in an image in the PDF version of this document hosted on EUMIS, available by request. This image also shows the relationship between the MA and the Programme Monitoring Committee (PMC). The CA works independently of the MA and therefore separation of functions is assured. The CA has a reporting line to the Director General (DG) Finance of the Scottish Government.

1.3.1. Managing Authority

The MA is arranged with a team for each Programme growth principle of Sustainable, Smart and Inclusive, a Governance and Policy Team, a Procurement Team, Regulation Support Team, and a Programme Performance Team. The contact details for the team leaders are set out below and may change from time to time.

Sustainable Growth and Procurement team

Sustainable - Low Carbon Economy, Low Carbon Transport, 8th City, Digital, Resource Efficient Circular Economy, Green Infrastructure
Procurement Team – Procurement Checks on Operations
Head of Sustainable Growth and Procurement Team: Jane Allan
Tel:+44 131 244 1101
Email: Jane.Allan2@gov.scot

Smart Growth team

Smart 1 - Developing Scotland’s Workforce, Youth Employment Initiative
Smart 2 - Business, Innovation, Finance
Head of Smart Growth Team: Alan Coleman
Tel:+44 131 244 6831
Email: Alan.Coleman2@gov.scot

Inclusive Growth team

Inclusive 1 – Employability
Inclusive 2 – Social Inclusion and Combating Poverty
Head of Inclusive Growth Team: Lynda Smith
Tel:+44 131 244 1109
Email: Lynda.Smith@gov.scot

Governance and Policy team

Head of Governance and Policy Team: Ryan Gunn
Tel:+44 131 244 1239
Email: Ryan.Gunn@gov.scot

Regulation Support team

Head of Regulation Support Team: Eilidh Steele
Tel: +44 131 244 1095
Email: Eilidh.Steele@gov.scot

Programme Performance team

Head of Programme Performance Team: Tracey Gillon
Tel: +44 131 244 6819
Email: Tracey.Gillon@gov.scot

While the MA and CA are both staffed with SG officials the MA does not carry out any functions of the CA and is therefore not also designated CA as per Article 123(3) of Regulation (EU) No 1303/2013.

1.3.2. Certifying Authority

Head of Certifying Authority: Nigel Thomas
Tel :+44 131 244 6818
Email: Nigel.Thomas@gov.scot

1.3.3. Audit Authority

The Scottish Government’s Internal Audit Directorate (IAD) is the AA for Scotland for both the ERDF and ESF structural fund programmes. Acting as the AA, IAD performs the functions required under Article 127 of Regulation (EU) No. 1303/2013. No other bodies undertake or are responsible for AA functions in Scotland.

The Audit Strategy provides details of the AA professional standards; independence and responsibilities and is based on Commission guidance as set out in the Commission document Guidance for Member States on Audit Strategy EGESIF, 14-0011-02 final 27/08/2015. The Audit Strategy further provides a detailed descriptions on how the AA will undertake work in relation to:

• overall risk assessment of the MA, CA and Operational Programmes
• audits on the functioning of the MCS (Systems Audits)
• audits of Operations (on the spot visits)
• sampling methodology deployed
• audit of the accounts
• audit of performance data
• audit of the Management Declaration

The implementation of the Audit Strategy will be regularly monitored by the IAD senior management team and updated annually to take account of key risks, issues and regulatory developments.

The main contact and Head of the AA is:

Jennifer Inglis-Jones
Director of Internal Audit and Assurance
Scottish Government Internal Audit Directorate
3D North, Victoria Quay
Tel: +44 131 244 7416
Email: directorofinternalauditandassurance@gov.scot

To enable IAD to fulfil their responsibilities under the 2014-2020 Programme an appropriately resourced, new ring-fenced EC Funds Unit has been created.

1.3.4. Intermediate bodies

There are no Intermediate Bodies in either Programme. This is set out in 2.1.3.

1.3.5. Article 123(5) of Regulation (EU) No 1303/2013 and separation of functions between MA/CA and AA

While all authorities are part of the SG, separation of functions is maintained between the CA, MA and the AA. The AA is part of SG Internal Audit Division, which is overseen by DG Finance. It is functionally and hierarchically independent of the ESFSCD. The Head of the CA and the leaders of the growth teams report directly and separately to the Head of the ESFSCD. The Head of CA has a reporting line to DG Finance which further demonstrates their functional independence. This is explained in the diagram at 1.3.

1.3.6. European Territorial Co-operation (ETC)

Coordination of UK participation in ETC programmes is the responsibility of the Department for Communities and Local Government (DCLG). DCLG authorises the appointment of First Level Controllers for individual project partners and organises Second Level Controls. National Contact Points, tasked with promoting individual programmes, will form part of a Contact Point Unit to be set up by DCLG. Scottish Government liaises closely with DCLG and the other Devolved Administrations on these arrangements but has no direct or immediate responsibilities. 

Scottish Government is not a Managing or Certifying Authority or Joint Secretariat for any ETC Programmes. The European Territorial Co-operation Team within ESFSCD engages in ETC Programmes through participation in monitoring and steering committees and supporting stakeholder participation in Projects and Programmes.