European Structural and Investment Funds: preparing for closure – best practice guide and key deadlines

Legal liability position at end of ESF and ERDF programmes

Lead Partners have raised concerns over liability if, at the point of closure, claims submitted to the Managing Authority (MA) are not paid and therefore not able to be reclaimed from the European Commission.

It is essential that Scottish Government and its Lead Partners  for structural funds understand where the liability may sit at the end of the programmes in the event that certain obligations have not been met.

There are various scenarios that have been considered by the Managing Authority but it must be highlighted that given the different circumstances surrounding projects these scenarios are not exhaustive.

Late claims

Scenario one: a ‘late’ claim

A claim is submitted after the appropriate deadline for that claim, then the MA may reject that claim. The legal basis for the MA rejecting the claim is the conditions set out in the letter of offer of grant to each Lead Partner.

Scenario two: a late ‘blocked’ claim

When a claim is ready to be submitted by the Lead Partner before the deadline, but is not technically able to do so due to the immediately preceding claim not having been paid and cleared from EUMIS. In practice this should not occur if the penultimate claim for that operation was submitted by 30 June 2023, which allows seven months for the penultimate claim to be checked, processed and paid before the final claim being submitted by 31 January 2024.

If this situation does arise some discretion may be required depending on the circumstances and reasons for the late submission, although it is vital that the MA treats all partners fairly.

Timely claims

Scenario three: a timely claim but missing declaration letter

All Lead Partner claims must be submitted i.e. uploaded to EUMIS, with a signed claim declaration letter. A claim will be rejected after one week if that claim is not accompanied by a valid claim declaration letter but the Scottish Government will use reasonable efforts to alert the Lead Partner within the week of the need for a declaration letter if one is not submitted. The legal basis for this is the conditions set out in the letter of offer of grant to each Lead Partner.

The Managing Authority will issue all sample requests for evidence within four weeks of receiving the claim and declaration letter. The Lead partner must submit the required evidence within a further four weeks and, for final claims, by 31 March 2024 at the latest.

Scenario four: a timely claim but missing evidence

Where a claim is on time and sample evidence has been requested by the MA but some/all that evidence is not submitted, then the cost(s) to which the missing evidence relates will be rejected from the claim. The legal basis for rejecting costs which are not supported by evidence is the conditions set out in the letter of offer of grant to all Lead Partners. The rejected costs are the liability of the Lead Partner.

Managing Authority payments to Lead Partners

The MA will pay all verified claims by 20 June 2024.

If the MA has been unable to verify (and therefore pay) a claim by 20 June 2024 then:

a) If the reason for the MA’s inability to pay is due to insufficient supporting evidence for costs from the Lead Partner, then the liability will sit with that Lead Partner. The legal basis for this is the conditions set out in the letter of offer of grant to each Lead Partner.

b) If the reason for the MA’s inability to pay is due to MA not being able to fulfil the obligation to pay then the liability will sit with the Scottish Government.

Disputes

A process for dealing with any disputes arising will be developed prior to closure.