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Reference Number
DERBY CITY PARTNERSHIP
FUNDING AGREEMENT
between
DERBY CITY COUNCIL
and
Organisation Name
for
Project Name
Date to Date
Principal contacts: Accountable Manager Name
Organisation Telephone
Derby City Council External Catherine Eaton
Funding Unit
Telephone 258404
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Contents
Page
Glossary of terms 3
Main funding agreement 4
Section 1 Basis of agreement 5
Section 2 Breach of conditions and withholding and repayment of grant 6
Section 3 Preventing corruption 6
Section 4 Disposing of assets 7
Section 5 Change of use of assets 7
Section 6 Payment Arrangements 8
Section 7 Ineligible Expenditure 8
Section 8 Monitoring and evaluation 8
Section 9 Audit Arrangements 10
Section 10 General responsibilities of the Organisation 10
Section 11 Environmental Responsibilities 11
Section 12 Management Responsibilities 12
Section 13 Indemnity and insurance 12
Section 14 Protection for children and young people 13
Section 15 Marketing and publicity 13
Section 16 Consultation and complaints 13
Section 17 Amendments 14
Section 18 Notices 14
Section 19 Signatures 14
Annex 1 15
Project Costs, Eligible Expenditure, Targets and Milestones
Annex 2 16
EC regulations
Annex 3 19
Retention of Documents and Inventory of Assets
Annex 4 20
Withholding and Repayment of Grant
Annex 5 22
List of ineligible expenditure
Annex 6 24
Role of Accountable Manager
Annex 7 26
Marketing and Publicity
The following annexes are for European funded projects only
Annex 8 31
ERDF eligible expenditure
Annex 9 32
European Audit Regulations
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GLOSSARY
Term Definition
1. Accountable Body the legal entity nominated to act on behalf of the
Partnership in taking responsibility for the receipt
and use of Derby City Partnership external
funding grant and the realisation of the Derby City
Partnership Action Plans and Strategies.
2. Accountable Manager the person, nominated by the organisation, to be
responsible and accountable for making sure that
the Project is delivered as described in the
project appraisal, and according to the terms and
conditions of this agreement
3. The Organisation the legal entity receiving Derby City Partnership
grant to deliver the project
4. Action Plan the document which describes how the
regeneration will be put into action
5. Partnership the group of organisations engaged in the
implementation of the Action Plan, including the
Accountable Body
6. Targets the outputs and activities regarded as central to
the fulfilment of the Action Plan
7. External Funding the Committee nominated by the Partnership to
Management Group manage Derby City Partnership external funding
8. Expenditure and Payments actually made, excluding accruals, by
expenditure defrayed any partner
9. Regeneration Co-ordinator the person employed by the Council on behalf of
the Partnership to manage the implementation of
the Action Plan
10. emda East Midlands Development Agency
11. Government Office Government Office for the East Midlands
12. The Project The project defined by the description of the
project and its agreed costs and targets shown in
Annex 1 of this agreement, the Organisation‟s
grant application form and associated bid
document as agreed or amended by the
Accountable Body.
13. We, us and our Refer to the Council.
14. You and your Refer to the Organisation
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Derby City Partnership
Funding Agreement
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The Parties…
The Council Derby City Council, The Council House,
acting as the Accountable Body Corporation Street, Derby, DE1 2FS
for Derby City Partnership - DCP referred to in this Agreement as ‘the Council’
The Organisation Organisation Name
referred to in this Agreement as ‘the
Organisation’
The Project: Project Name
Project Reference: Project Reference Number
1. Basis of agreement
1.1 The Council agrees to provide a grant, on behalf of the Partnership, to the
Organisation for the Project on the terms and conditions set out in this
Agreement.
1.2 The Organisation agrees to deliver the Project on the terms and conditions set
out in this Agreement.
1.3 Subject to:
the Organisation making satisfactory progress in delivering the Project‟s
aims and produces the agreed quantified targets and pattern of
expenditure set out in Annex 1 to this letter
the Organisation continuing to comply with grant conditions
the Organisation providing a detailed budget breakdown of the first 12
month‟s expenditure within 28 days of signing this agreement
the Organisation providing a quarterly budget forecast for the remaining
period of the project
the data collected during the course of this project remaining the property
of the Derby City Partnership.
1.4 The Organisation will:
(1) use the grant provided under this Agreement solely for the purposes of
providing the Project approved and any amendments agreed by us in
writing prior to the date of this letter.
(2) tell the Council about any proposed change in the Project, and obtain
the Council‟s agreement before it implements any material changes to
the Project.
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(3) obtain the Council‟s written consent before it makes any changes to the
agreed level of charges, if any, which the Project makes to service
users. The Council will not withhold its consent unreasonably.
(4) tell the Council at the earliest opportunity of any reason why it cannot
provide the Project, or any part of the Project.
(5) repay to the Council, at the Council‟s request, any amount of money
paid under this Agreement which:
(a) in the Council‟s opinion, has not been spent in accordance with
this Agreement
(b) becomes repayable under the provisions of section 8
(6) establish and maintain an inventory of assets to include; all land and
buildings built or improved wholly or partly using ERDF grant; items of
equipment and other moveable and immovable assets costing £2,500
or more. See Annex 5 for further details.
2. Breach of conditions and recovery of funds
2.1 Without prejudice to any other term of condition of this agreement, the Council
may reduce, suspend or withhold grant payments, or require all or part of the
grant to be repaid if the Project fails to comply with the requirements set out in
this agreement and in Annex 4.
2.2 In the event of any breach of conditions of grant as described, the Council will
write to the Accountable Manager, and copy the letter to the Chair of the
External Funding Management Group.
3. Preventing corruption
3.1 The circumstances listed are considered to be a fundamental breach and will
cause this Agreement to cease immediately if:
(1) the Organisation, or any of its employees or agents, has offered, given,
or promised anyone a gift or any kind of consideration, as an
inducement or reward for action taken or not taken in relation to this
Agreement or any other contract with the Council or Derby City
Partnership.
(2) the Organisation, or anyone employed by it or action on its behalf, has:
(a) been guilty of a corrupt or illegal practice, or bribery or
corruption of a member or officer of a public body, contrary to
the Public Bodies Corrupt Practices Act 1889, or the Prevention
of Corruption Acts 1906 - 1916
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(b) given any fee or reward other than their appropriate
remuneration, to an officer of the Council, the receipt of which is
an offence under Section 117(2) of the Local Government
Act 1972.
4. Disposing of assets
4.1 The External Funding Management Group‟s prior written consent will be
required to any proposal to dispose of any asset which is, or should be, listed
in the asset inventory, by sale, transfer of ownership, a lease in excess of
seven years, or by any other means. Transferring an asset to a separate joint
venture or wholly owned subsidiary constitutes a disposal. Annex 3 includes
details of what must be included in your asset inventory.
4.2 The Council may require a share in the proceeds of any disposal. The
disposal value is the actual or estimated open market value of the capital
asset at the time of disposal. Where a building has been refurbished or land
has been reclaimed using DCP grant but grant was not provided for
acquisition, the Council will require a share of the increase in the value of the
capital asset attributable to the DCP grant.
4.3 The Grant, plus any corresponding proportionate increases in value of any
capital asset will be clawed back in all cases where disposal of an asset
occurs, unless specific written consent for clawback to be waived or deferred
has been obtained from the External Funding Management Group in advance.
Given the complexity of the circumstances in which clawback may be
deferred, the Organisation is advised to consult the External Funding
Management Group well in advance of any decision to change the ownership
of a grant funded asset, if deferral of clawback is likely to be requested.
4.4 Where all or any part of the Grant has been used to acquire, reclaim or
refurbish land or a building for subsequent disposal, the Organisation must,
within a reasonable time of the completion of the works, notify the External
Funding Management Group of the expected date of disposal, and then the
actual date. If the Council considers that there is an unreasonable delay in
disposing of the land or building or bringing it into use, the Council may
recover up to the total amount of Grant paid in respect of that Project, without
awaiting disposal.
4.5 The Organisation must send a valuation to the Council prepared or certified by
an independent professionally qualified valuer, no later than 30 days after
disposal of any land or buildings. Where the Council requires a share of the
proceeds of any disposal, the amount due must be repaid in full within 30
days of the receipt of disposal proceeds. Where disposal is on deferred sale
terms, the Council may agree to repayment in stages.
5. Change of Use of Assets
5.1 The Agreement Holder must notify the External Funding Management Group
if it is proposed to change the use of a capital asset which was acquired,
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reclaimed or refurbished using the Grant. If the new use does not continue to
reflect the objectives of the Project, the Council may recover funds up to the
total amount of DCP grant paid in respect of that project, plus any
corresponding proportionate increases in value of the capital asset. The
Council may – solely at its discretion – waive its rights to recover funds if the
new use of the capital asset adequately supports the then current DCP
objectives.
6. Payment arrangements
6.1 Payment can only be made if Derby City Partnership receives the funding
from source. Neither the Accountable Body, nor the Partnership, will be liable
for any shortfall of funding because of reduced Government grant or a
reduction from any other funding source.
6.2 Payment is dependent upon the Organisation continuing to comply with grant
conditions and on satisfactory progress being made in achieving the agreed
quantified targets and pattern of expenditure set out in Annex 1.
6.3 If the Organisation does not comply with grant conditions, or make satisfactory
progress, the Council may suspend, reduce or withhold the grant specified in
paragraph 2.1 or may require all or part of the grant to be repaid.
6.4 The Organisation will claim grant against defrayed expenditure at intervals
specified in Annex 1. Failure to adhere to this schedule will result in
termination of grant.
6.5 In exceptional circumstances, the Organisation may claim grant quarterly in
advance of expenditure, subject to regular review. This will need to be agreed
in advance by the Council.
6.6 The Organisation must make claims on the grant forms provided. The Council
will return incomplete or incorrect claims.
6.7 Each claim must cover the whole of the period in question and must include a
breakdown of the amount of eligible expenditure that will be funded by grant
and the amounts funded by each of the other funding sources (or in kind
contributions) specified in your application. Evidence of spend is required.
6.8 Where applicable, the total grant claim will be restricted to the overall
percentage grant rate shown in the covering letter. The amount of grant paid
will be based on the total eligible expenditure for the capital and revenue
elements combined.
7. Ineligible expenditure
7.1 ERDF grant will not be paid, and may not be used, for ineligible expenditure
as detailed in Annexes 5 and 7.
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8. Monitoring and evaluation
8.1 The Organisation will demonstrate to the Council‟s satisfaction that
appropriate project monitoring, financial and management systems and
procedures have been established to make sure that it can comply with all
financial, output, result and impact targets and milestone requirements of this
Agreement.
8.2 The Organisation will provide the Council with written quarterly claims and/or
progress reports, at intervals set out in the profile under Annex 1.
8.3 The quarterly claim and financial progress report will contain this information:
(1) total eligible expenditure defrayed during the period, with the detail of
spend and progress against forecast spend, specified in Annex 1.
(2) actual ERDF expenditure defrayed during the period against forecast
spend as specified in Annex 1.
(3) income and match funding generated during the period, specified in
Annex 1
(4) an explanation of significant changes to the project. Significant
changes include:
change of project ownership, control or final beneficiaries
change of expenditure categories
virement of more than 10% of category between individual
categories of expenditure
virement of any costs between capital and revenue costs
change of project financing
virement of more than 10% of project financing between funding
sources (not including ERDF, as this may not been vired)
change of project targets
alteration of the practical or financial completion date
The full progress report will contain this information:
(1) targets achieved during the period against the forecast outputs,
specified in Annex 1.
(2) other outputs, specified in Annex 1, achieved during the period but not
included in this agreement
(3) an explanation of significant changes to the project. Significant
changes include:
change of project ownership, control or final beneficiaries
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change of expenditure categories
virement of more than 10% of category between individual
categories of expenditure
virement of any costs between capital and revenue costs
change of project financing
virement of more than 10% of project financing between funding
sources (not including ERDF, as this may not been vired)
change of project targets
alteration of the practical or financial completion date
8.4 The Council, through its appointed principal contact, will hold regular
meetings with the Organisation to review progress as detailed in the
monitoring reports.
8.5 The Organisation will co-operate with and take part in any evaluation studies
of the Project carried out by the Council, its appointed agents, GOEM or
emda.
9. Audit arrangements
9.1 The Organisation should make arrangements for the management systems
which it uses to progress and monitor projects to be audited.
9.2 The Council, Government Office for the East Midlands, emda, the National
Audit Office, the European Commission and the European Court of Auditors
or their representatives shall have the right within the limit in Regulation
1220/1999 to the following:
i) to inspect the Project and to require such further information relating to
the Project as they think fit;
ii) to be provided with the original documents relating to the Project.
9.3 The audit and monitoring requirements for European funded Projects are set
out in Annex 9 to this agreement.
9.4 The Organisation will retain all original financial invoices and output records,
relating to this Agreement until 31 December 2012, so as to provide the audit
trails specified by the EC. You must retain these documents until three years
after the EC has made the final payment for the Programme to the
Government Office. If you intend to claim grant on eligible expenditure made
by others acting on your behalf you must ensure that you have a legally
binding agreement with them which specifies what information is to be
provided and when. You must ensure that those acting for you have original
documentary evidence to support all the payments they make for you and for
which you wish to claim grant. Annex 3 gives more information.
10. General responsibilities of the Organisation
10.1 In carrying out the Project, the Organisation will:
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(1) comply with all statutory requirements and, in particular:
(a) not commit any act of discrimination rendered unlawful by the
Sex Discrimination Act 1975, the Race Relations Act 1976, or
the Disability Discrimination Act 1995
(b) take all necessary steps to secure the health, safety and welfare
of everyone involved in the Project and comply at all times with
the Health and Safety at Work etc 1974
(2) have and comply with, or be working towards, a written policy on
personnel matters for paid staff, volunteers and trustees. This must
include appropriate procedures for recruitment, disciplinary and
grievance issues, training and development, and equal opportunities
(1) make sure all paid staff, volunteers and service users are offered
equality of opportunity, and are not treated unfairly because of gender,
race, colour, ethnicity or nationality, religion, disability, marital status,
age, sexuality or because they are living with HIV/AIDS.
In addition, the Organisation will also comply with the following European Community
Regulations:
European Community State Aid Rules
Public Procurement Directives
Environmental Legislation
Data Protection Act 1998
11. Environmental requirement
a) For projects that provide direct grants to SMEs
The sponsor must undertake to make sure that businesses assisted or
supported are not causing environmental damage. This may involve
the sponsor or the recipient undertaking an environmental audit of the
compere or SME before a grant is offered.
The sponsor must advocate the grant be used where possible to
improve the environmental performance of SMEs assisted. This should
include such measures as improving management and handling of
waste, implementing energy efficiency measures and the careful use of
resources.
b) For all Business Support Projects
The sponsor must, as part of the advice and support activities, provide
literature and advice on good environmental practice. This should
include advice on environmental management systems and
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accreditation to a recognised environmental standard. Guidance and
support can be provided via the Secretariat.
c) For all feasibility studies
The sponsor must take into account the environmental impact of the
proposed scheme as part of the study. This must be either prepared or
verified by an independent individual/organisation.
d) For all premises refurbishment and new build projects
The sponsor must ensure that any building refurbishment or new
development incorporate water efficiency measures and energy
efficiency measures
The sponsor must ensure that, as part of any building contract, due
environmental consideration is given to the storage and disposal of
construction waste. Due consideration must also be given to
incorporating reclaimed/recycled and locally sourced materials where
this is a viable option.
e) For all Community Capacity Building projects
The sponsor must where appropriate communicate positive
environmental message to encourage beneficiaries to „pursue
environmental improvements as part of supported activities and
projects‟.
f) For all ICT projects
The sponsor must ensure that ICT advice includes the communication
of positive environmental messages to encourage people to adopt
environmental good practice and to raise awareness of environmental
issues. This may include signposting to support agencies.
12. Management responsibilities
12.1 The Organisation will:
(1) appoint an Accountable Manager for the Project
(2) make sure formal procedures are recorded in writing and put in place
to avoid any conflict of interests by employees and members of the
Board or Management Committee of the Organisation, or any other
decision making forum
(3) be responsible for the organisation and administration of the Project
(4) inform the Council immediately of any change of Accountable Manager
- the role of the Accountable Manager is specified in Annex 6.
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12.2 The Council will nominate a principal contact as the main point of liaison on
this agreement.
13. Indemnity and insurance
13.1 While not affecting the obligations set out in Paragraph 2.2, the Organisation
will take out and keep in force, and make sure that any sub-contractor takes
out and keeps in force, adequate insurance with reputable insurers. This
insurance must cover the Organisation, or the sub-contractor, and their
employees and agents, against all risks arising from the performance of this
Agreement. This includes, but is not limited to, employers‟ liability insurance,
public liability insurance, building and contents insurance and, where
appropriate, professional indemnity insurance.
13.2 The Organisation will keep copies of all current insurance policies and
evidence of premium payments and allow the Council‟s representative to
inspect these at any time on request.
14. Protection for children and young people
14.1 Where the Project involves working with children and young people under 18,
the Organisation must take all reasonable and thorough steps to make sure
that:
(1) everyone who is likely to live or work at the premises where the Project
is to be provided is fit to be in the proximity of children or young people.
For this purpose, „work‟ includes voluntary work
(2) the premises in which the Project is to be provided are fit for children
and young people
(2) the Organisation has complied with all requirements for registration
under the Children Act 1989.
(3) The Organisation has a written Child Protection Policy.
14.2 Further information about Child Protection is available at www.dh.gov.uk
14.3 The Organisation must follow any advice given by the Council against the
paid or voluntary employment of anyone who appears to be unsuitable for
work with children or young people.
15. Marketing and publicity
15.1 The Organisation must make sure that, where appropriate, publicity is given to
the Project and the DCP external funding stream supporting it.
15.2 Any written material promoting this Project or giving information and advice on
the services provided should acknowledge the financial assistance provided
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by Derby City Partnership. Further information on marketing and publicity for
your project and the logos you will need to use are included in Annex 7.
15.3 The Organisation must make sure that any individuals included in publicity
photographs are aware that their photographs may be used in publicity and
that they give their consent to this use. Where children are involved,
permission to use the photographs in this way must be obtained from parent
or guardians.
16. Consultation and complaints
16.1 The Organisation should:
(1) demonstrate its commitment to consultation with local residents,
businesses, voluntary and community groups
(2) make every effort to work in partnership with other groups who either
provide a similar service or who work with the same target population
(3) recognise the need for positive action and encourage the involvement
on a regular basis of those sections of the whole community likely to be
affected by and benefit from the Project
(4) operate a complaints procedure for Project users, and inform all Project
users about the procedure. If the Organisation does not have its own
complaints procedure, it should use the complaints procedure for
voluntary organisations produced by the Council. Any complaints
procedure established by the Organisation must tell service users that
they also have a right to complaint to the Council about the
Organisation, by using the Council‟s own complaints procedure.
17. Amendments
17.1 No amendment to the terms of this Agreement will be effective or
implemented unless agreed in writing on behalf of both parties. The Council
will not unreasonably withhold or delay authorising such amendments.
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18. Notices
18.1 Any notice to be served on either party must be sent either by pre-paid
recorded delivery or registered mail, or delivered by hand, to the address of
the other Party set out at the head of this Agreement, or, where a Party has
changed address, the address which that Party has notified the other Party in
writing.
Signed Date
Duly authorised for and on behalf of the Council
Name Paul Dransfield
Position Corporate Director Resources
Signed Date
Duly authorised for and on behalf of the Organisation
Name
Position
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ANNEX 1
Insert report from TOTAL
Monitoring Schedule
1.1 The Organisation will complete progress and claim forms at intervals
specified in the profile below.
Claim Period of Type of report Submitted to
Number Expenditure External Funding
Unit
1 01 April 2005 – Financial report and 10 July 2005
30 June 2005 grant claim
2 01 July 2005 – Full progress report 10 October 2005
30 September 2005
3 01 October 2005 – Financial report and 10 January 2006
31 December 2005 grant claim
4 01 January 2006 – Full progress report 10 April 2006
31 March 2006
1.2 Progress reports and claims for payments will be made on forms
supplied by the External Funding Unit.
1.3 Failure to adhere to this schedule may result in termination of grant.
1.4 In addition to the profile shown above, Organisations may also be
required to provide interim claims at times determined by the External
Funding Unit.
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ANNEX 2
EC REQUIREMENTS
The following EC requirements apply to all projects:
2. EUROPEAN COMMUNITY STATE AID RULES
Principles
2.1 The European Commission has considerable powers to monitor,
control and restrict the forms and levels of aid given by all Member
States to their industries. The principles underlying State Aid are set
out in Article 88(3) of the EEC Treaty. Detailed guidance on State Aid
rules can be at http://www.dti.gov.uk/ccp/stateaid/ and the various
frameworks and guidelines issued by the Commission on the
application of the rules. All State Aid (other than those covered by de
minimis provisions – see below) must be notified to and approved by
the Commission in advance of implementation, otherwise it is illegal.
2.2 Applicants are required to abide by any EC State Aid limits, which are
applicable. Where the applicant is a public authority, it should satisfy
itself whether state aid rules apply to the Project in consultation, if
necessary with the Department of Transport, Local Government and the
Regions, and should inform the Department immediately it has decided it
does not need to notify the Project to the Commission. In all other cases,
no grant will be paid in respect of the Project until the Department has
been informed of the Commission‟s approval of the Project under the
notification of the state aids procedure pursuant to Article 88(3) of the EC
Treaty, or the Department has formed the view that such notification is
not required. Recipients of illegal aid will risk being held responsible for
meeting the cost of any penalty applied by the EC in the event the Project
is found to have infringed the State Aid rules, and also risk actions for
damages from third parties. If you are in any doubt contact the
Regeneration Co-ordinator in the External Funding Unit.
Notification
2.3 Where a project will use public expenditure (including structural funds)
either directly or indirectly to provide subsidised benefits to the private
sector, eg grants to firms for investment, R&D, training and a reduced
cost business consultancy, the assistance provided to the Project will
normally need to conform to EC State Aids rules and be formally
approved by the EC.
De minimis
2.4 There is a threshold below which aid need not be notified. This de
minimis threshold applies if the Project will not allow any private sector
organisation to receive more than 100,000 Euros of state aid over any
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three year period taking account of all state aid that such organisations
may receive from any source.
2.5 This threshold does not apply to the following sectors: agriculture,
fisheries, transport, shipbuilding, coal, steel and to export aid.
2.6 Projects that include an element of aid to businesses and are
proposing to operate a de minimis scheme must be mindful of the need
to:
(a) seek confirmation that those who are to receive the assistance are
within the definitions of a small and medium size enterprise (SME);
(b) obtain confirmation of a SME‟s receipt of state aid in the last three
years; and
(c) provide SMEs participating in the Project with a record of the cash
value of any assistance provided.
3. PROCUREMENT
3.1 All contracts that are financed partly or wholly by DCP grant must be
awarded after a tendering process, which is transparent and not
discriminatory.
3.2 The European Community rules on Procurement apply to contracts that
are financed or part financed by Structural Funds grant. The EU
Procurement Directives require contracts above certain limits to be
advertised in the Official Journal (OJ) of the European Communities.
Bids for contracts must be assessed on an objective basis and contract
awards should be published in the OJ.
3.3 Grant will be reclaimed if it is found subsequently that the procurement
rules have not been observed.
3.4 The thresholds for compliance with the EU procurement directives are
revised every two years. You must make sure you comply with the
most up to date directives. Information is available at
www.europa.eu.int/publicprocurement/index_en.htm or If you are in any
doubt about the application of the procurement rules you should speak
to the Regeneration Co-ordinator in the first instance.
3.5 Organisations that are not financed or supervised by public sector
bodies and commercial organisations in the private sector may not be
covered by the procurement rules but are nonetheless expected to use
fair and open practices including competitive tendering when letting
contracts for which they intend to claim DCP grant.
3.6 If your organisation is not covered by the procurement directives we
expect the following procurement procedures (or equivalent) to be
adopted according to the estimated value (inc. VAT) of the contract at
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pre-tender stage. Your decision must demonstrate best value and you
must keep records, which support your decision. We also expect that
public sector bodies awarding contracts below the thresholds to
demonstrate best value by following these procedures.
Estimated Value Tender Action Required
Below £250 No quote required
£250 up to £500 Single oral quote
£501 up to £2,500 Minimum of three oral quotes
£2,501 up to Minimum of three written quotes, based on a clear
£15,000 written specification of requirement
£15,001 up to Normally minimum of 3 formal competitive tenders
£50,000 invited.
£50,001 and over Normally 4 to 6 formal competitive tenders invited.
4. ENVIRONMENTAL IMPACT
4.1 All projects awarded ERDF funding must comply with EC
Environmental legislation. Grant aid may be withheld until any
necessary consents, including planning permission have been
obtained. Please contact this Government Office for information about
the legislation.
The following regulations apply to projects funded through the Objective
2 or URBAN II programmes.
5. STRUCTURAL FUND REGULATIONS
5.1 Council Regulations 1260/99 (General Regulations) and 1685/2000
(Eligibility) apply to this Project. Other Regulations produced under
relevant Articles in 1260/99 and notified by the Commission from time
to time may also apply to this Project.
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ANNEX 3
RETENTION OF DOCUMENTS AND INVENTORY OF ASSETS
Retention of documents
1. Original documents relating to the implementation of the Project and its
financing should be retained until 31 December 2014. We will inform
you when you can destroy your documents.
2. The retention of documents for inspection is a requirement and forms
part of the terms and conditions under which the grant has been
agreed. As well as being made available to the UK auditors of a
project, grant recipients must produce the original documents or
verified true copies when required to do so by the European Court of
Auditors, European Commission auditors or the Secretary of State.
Failure to produce the original documents or satisfactory agreed
substitutes could result in repayment of grant.
Inventory of Assets
3. The applicant must establish and maintain an inventory of all fixed
assets acquired, built, or improved wholly or partly using the grant,
whether owned by Partnership members or third parties. An asset is
defined as an item that will not be used up within 12 months and which
is not intended to be sold before the end of its useful life. Assets below
£2,500 can be excluded.
4. The inventory should show the:
i) date of purchase;
ii) description of asset;
iii) price paid net recoverable VAT;
iv) amount of DCP grant paid;
v) location of the title deeds;
vi) serial or identification numbers;
vii) location of the asset;
viii) date of disposal; and
ix) sale proceeds net of VAT.
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ANNEX 4
WITHHOLDING AND REPAYMENT OF GRANT
1. The Council reserves the right to withhold any or all of the payments
and/or to require part or the entire grant to be repaid if:
a) the Council considers that:
i) there is a material change in the nature, implementation,
scale, costs or timing of the Project such that the Project no
longer complies with the description set out in the application
and any amendments that may have been agreed
subsequently; or
ii) the future of the Project is in jeopardy and there is a risk of it
not completing by the agreed date; or
iii) there is unsatisfactory progress towards completing the
Project; defined as a failure to meet the aims, forecast
quantified targets or profile of expenditure set out in Annex 1;
or
iv) the applicant has not followed the EC procurement directives
for contracts within scope; or
v) the applicant has not demonstrated that contracts outside the
scope of the EC procurement directives were awarded after a
satisfactory competitive tender process; or
b) any of the information provided in the application for grant or in
supporting or subsequent correspondence is found to be
substantially incorrect or incomplete; or
c) the applicant receives grant from other Community Institutions or
any public authority towards Project costs funded by this offer
letter, unless the grant was explicitly taken into account in making
this offer; or
d) the assistance exceeds European Community State Aid limits to
the extent that any grant paid should not have been paid or if a
decision of the European Commission or of the European Court of
Justice requires payment to be withheld or recovered; or
e) there is an unsatisfactory report from the grant auditors. This will
be the case if the auditors refer to a fundamental uncertainty, a
disagreement or a limitation to their opinion, or if the auditors are
unable to form an opinion, or if they report that the statement of
grant usage does not give a true and fair view; or
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f) during its economic life, the Project undergoes substantial change
defined as being used for purposes other than those specified in
the application or having a change of owner.
Note
i) The economic life of the Project is taken to be 20 years for
fixed assets, unless otherwise agreed by us;
ii) For all other projects the economic life is the period up to the
last payment of grant or achievement of the last of the targets
specified in Annex 1 or 5 years from date of the grant offer
letter whichever is the later.
g) assets wholly or partially funded by grant are disposed of during
their economic life; in this event, the proceeds or an appropriate
part of them may be required to be repaid to the Council; or
h) the applicant:
i) being an individual becomes bankrupt, has a receiving order or
administration order made against him or her, makes any
composition or arrangement for the benefit of creditors, makes
any conveyance or assignment for the benefit of creditors or
purports to do so, or is the subject of an application under the
Insolvency Act 1986 ( or superseding legislation) for the
sequestration of his or her estate or of a trust on behalf of
creditors;
ii) being an unincorporated body is dissolved;
iii) being an incorporated body passes a resolution that it should
be wound up, is ordered by the High Court to be wound up, has
an administrator appointed by order of the Court, has an
administrative receiver appointed, or being a company is struck
from the register at Companies House.
2. You must tell us in writing immediately if any of the circumstances
described in this Annex apply to your Project. You should not wait until
the next Project Progress report is due.
3. Any over-payment of grant, must be repaid to the Council forthwith on
his/her first demand or upon the Applicant becoming aware that grant
has been over-paid, whichever first occurs.
4. If an associated DCP funded project operated or effectively controlled
by the same sponsor becomes subject to investigation, payment of
grant for this Project may be suspended whilst the necessary actions
are carried out on the Project in question by the appropriate body.
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ANNEX 5
LIST OF INELIGIBLE EXPENDITURE
overheads allocated or apportioned at rates materially in excess of those
used for any similar work carried out by the grant recipient
expenditure incurred or paid before 1 January 2000 or any later date
specified in the offer letter
works or activities that any person has a statutory duty to undertake
notional expenditure except contributions in kind
payments for activities of a political or exclusively religious nature
depreciation, amortisation and impairment of assets purchased with the
help of UK government or European Community grants
provisions
interest charges
service charges arising on finance leases, hire purchase and credit
arrangements
costs resulting from the deferral of payments to creditors
costs involved in winding up a company
payments for unfair dismissal
payments for unfunded pensions
compensation for loss of office
bad debts arising from loans to employees, proprietors, partners, directors,
guarantors, shareholders or a person connected with any of these
payments for gifts and donations
entertaining
recoverable VAT
statutory fines and penalties
criminal fines and damages
legal expenses in respect of litigation
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This list is not comprehensive. The Organisation must consult the
Regeneration Co-ordinator if it has doubt as to whether particular costs are
eligible.
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ANNEX 6
ROLE OF THE ACCOUNTABLE MANAGER
The Partnership will require the Accountable Manager to
1. Tell Derby City Council‟s Director of Finance immediately if they suspect
any financial irregularity in the use of DCP grant and indicate the steps
they are taking in response. For this purpose, irregularity means any
fraud or other impropriety, mismanagement, or use of funds for purposes
other than that approved.
2. Set up and maintain an inventory of all capital assets acquired, built, or
improved wholly or partly using DCP grant. The asset inventory must be
maintained according to the detail set out in Annex 3.
3. Retain documented evidence of systems, procedure, general progress,
outputs, enquiries and correspondence. This evidence must be available
and be reasonably accessible for:
inspection visits and scrutiny of files on behalf of the Partnership
external audits and reviews of the project.
4. Write and tell the Regeneration Co-ordinator of any income, including
rental income, or profit or any unexpected receipt in excess of those
estimated and set out in Annex 1.
5. Write and tell the Regeneration Co-ordinator of any change to the
provision of capital and revenue expenditure.
6. Write and tell the Regeneration Co-ordinator if the total cost of the
project increases by 5% or more of the approved cost.
7. Complete and return to the Monitoring Officer, financial and progress
reports according to the schedule set out in Annex 1.
8. Complete and return, to the Regeneration Co-ordinator, an Annual
Report by 10 July.
9. Make sure that where a contract is being let, the tendering process
complies with EU Procurement Directives where appropriate. If there
are reasons why single tender action is appropriate, to submit a report to
the Regeneration Co-ordinator setting out the reason for not seeking
other tenders.
10. Make sure there is adequate insurance against actions, claims or
demands which may be brought or made against the project by any one
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suffering damage or loss in connection with its activities in carrying out
the finding agreement.
11. Make sure the project is administered in a manner that conforms with
any relevant requirements of English and European Law. In particular
that:
no action of discrimination occurs which is unlawful under the Sex
Discrimination Act 1975 or the Race Relations Act 1976, or any
enactments modifying or replacing them
it complies with the Health and Safety at Work Act 1974 and any
subsequent legislation.
It complies with EC State Aid Rules as set out in Article 88(3) of the
EEC Treaty.
It complies with the Children‟s Act 1989.
12. Make sure any funding from other sponsoring organisations, which is
necessary to achieving the successful completion of the project, is
agreed and confirmed in writing in advance of the project starting.
13. Identify a body to take responsibility for continuing commitments after
DCP grant payments end. Examples are:
maintaining expenditure records for at least two years after project
completion
maintaining the inventory of capital assets and notifying the
Regeneration Co-ordinator or External Funding Manager, of any
disposal proposals.
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ANNEX 7
Marketing and Publicity
1 The Organisation must make sure that, where appropriate, publicity is
given to the Project and the DCP external funding stream supporting it.
2 All grant recipients must acknowledge the support of DCP when issuing
any form of promotional or publicity materials, including press releases,
leaflets, posters, brochures and at the site of building works. The DCP
logo, as shown below, should be included in a prominent position on all
printed materials and on a permanent commemorative plaque at the site
of building works.
3 In addition, the Organisation must also acknowledge the source of the
DCP grant in accordance with the requirements set out below. The exact
source or sources of your funding is stated in the covering letter and in
Annex 1. Where the Organisation is in receipt of more than one source
of funding, all relevant publicity requirements must be adhered to.
Projects receiving Single Regeneration Budget, SRB, funding
1 Any written material promoting the project or giving information and
advice on the services provided must acknowledge the financial
assistance provided by emda, through the Single Regeneration Budget,
through use of the emda logo.
2 Publicity, in the form of the emda logo, as shown below, must be
displayed at premises and other sites, where practicable.
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Projects receiving Derby and Derbyshire Economic Partnership, DDEP,
funding
1 Any press releases relating to the Project should be approved by the
Regeneration Co-ordinator and acknowledge the DDEP funding.
2 The DDEP logo, as shown below should be included in any printed
materials and should be the same size as those of other funders and in a
form approved by DDEP.
Projects receiving Big Lottery Fund, BLF, funding
1. The Big Lottery Fund may promote its association with the Project, use
the name or image of the Organisation or the Project in its publicity
material, or may disclose information concerning the Project and The
Organisation to any persons, but will be sensitive to situations where it
is aware confidentiality is a significant matter.
2. All grant recipients should acknowledge the support of the Big Lottery
Fund when issuing any form of promotional or publicity material,
including press releases, leaflets, posters, brochures and annual
reports. The Big Lottery Fund logo, as shown below, must be on the
front cover of all publications and in a prominent position on all other
printed materials.
3. Equipment purchased wholly or in part with the Grant must display a
Big Lottery Fund sticker in a prominent position.
4. Any correspondence relating to the project must have the Big Lottery
Fund logo on it.
5. A permanent funding acknowledgement must be in place when your
Project is completed. This can be a plaque or funding certificate.
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6. All job or other advertisements that relate to the Project must bear the
Big Lottery Fund logo. If possible advertisements must also include the
text „This post was funded by the Big Lottery Fund‟.
7. Vehicles purchased with the Grant must display a Big Lottery Fund
logo on both sides of the vehicle.
8. Any building work or ground work funded by the Grant must feature the
Big Lottery Fund logo prominently on all sides.
9. All events relating to your project must acknowledge the Big Lottery
Fund grant.
Projects receiving Objective 2 ERDF, Objective 2 ESF or URBAN II
funding
Projects receiving European funding must comply with the Community
Publicity requirements. This is a brief summary of the main points. Full
details are contained in the Commission Regulation 1159/2000 with which you
must comply.
Billboards
1. Billboards must be erected on the sites of infrastructure projects with a
cost exceeding 3 million euros and 500,000 euros for operations part-
financed by Financial Instruments for Fisheries Guidance (FIFG).
Billboards must be of a size appropriate to the scale of the operation.
2. The billboard must include a space reserved for the European Union‟s
(EU) contribution. This section must:
a) take up at least 25% of the total area of the billboard;
b) bear the standard Community emblem - twelve five-pointed gold
stars in a circle on a blue background - and the following text, to
be presented as below:
PROJECT PART-FINANCED BY THE
EUROPEAN UNION
c) the lettering used to indicate the EU‟s financial contribution must
be at least the same size as the lettering used to indicate national
participation, although the typeface may be different.
d) the Fund concerned may be mentioned (e.g. European Regional
Development Fund (ERDF)).
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3. Billboards must not be removed until at least 6 months after completion
of the work.
Commemorative plaques
4. A permanent commemorative plaque shall replace the billboard, where
the infrastructure project is accessible to the general public (e.g.
congress centres, airports, stations, etc.). Such plaques must include
the Community emblem, mention the EU‟s contribution and may
mention the Fund concerned, (e.g. ERDF). In the case of physical
investments in commercial business premises, commemorative
plaques shall be installed for a period of a year. Plaques for ESF
funded projects are available from 0113 399 4040 or email
orderline@cds.co.uk. You will need to quote the following code:
ESF0001.
Other points
5. If a billboard is erected, a commemorative plaque placed, a poster
displayed, or any other type of publicity is used for the Project, the
Community‟s contribution must also be noted. This requirement
applies even if the costs of the Project do not exceed the amounts
mentioned in paragraph 1.
6. Forms issued concerning the announcement of, application for and
grant of assistance to final beneficiaries shall indicate the part financing
by the Community and the European Regional Development Fund.
The notification of aid sent to beneficiaries shall mention the amount or
percentage of the assistance financed by the ERDF. If national or
regional emblems are included, a European emblem of the same size
must also be included.
7. Full publicity requirements can be found on the Government Office for
the East Midlands web site,
www.go-em.gov.uk/euro/publicity/logos.htm.
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Annexes eight and nine are applicable to
European funded projects only
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ANNEX 8
ERDF GRANT PAYABLE
Eligible expenditure
1. You must comply with the EC Regulations on eligible expenditure
which are in the annex to EC Regulation 1685/2000. The EC may issue
further regulations on this. In addition you should comply with the
following definition of eligible expenditure.
2. Eligible expenditure must:
(1) not exceed the amounts stated in Annex 1;
(2) not be expenditure on the costs described as ineligible in Annex 5;
and
(3) be project costs which have been paid by you and those
organisations making payments for the Project listed in the offer
letter.
3. Before you can claim grant, the Project costs must have been paid.
“Paid” is defined as when the Project has given money for goods
and/or services and the money due has passed out of the control of the
Project by the time it is included in a claim for grant. In the UK the point
at which this occurs is when the money is given or sent to the supplier
by post or electronic instruction to the Project‟s bank. As an example,
for expenditure in relation to goods and/or services provided to the
Project by a supplier to be included in a claim for grant, an invoice must
have been received, a transaction entered into the Project‟s accounts
and a cheque or equivalent sent to the supplier. The date the cheque
or equivalent is sent will be the payment date.
4. The Council will need to be satisfied that the systems used by the
Project are sound and that grant claims are correct. There will be a
range of documentary evidence available to allow this to be done
including the accounting records of the Project which show the dates
invoices were paid, receipts and statements from suppliers, bank
statements, cheque stubs, and correspondence with payees and with
the Project‟s internal and external auditors. It will be for Council‟s
monitoring staff to determine which of these or which combination of
these items provide the assurance that they require in specific cases.
5. You must keep records of all cash payments and their dates as these
are part of the Project‟s records. You must also make sure that all the
organisations acting on your behalf and those listed in the acceptance
form do the same. You are advised to encourage your payees to
accept payment by BACS, rather than by cheque. You should contact
us if you are in any doubt as to whether particular items of expenditure
are eligible for grant.
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6. ERDF grant is calculated as a percentage of eligible expenditure.
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ANNEX 9
AUDIT AND MONITORING REQUIREMENTS
1. Audit
Audit requirements
1.1 All non local authority projects receiving in total £20,000 or more of
ERDF grant must be audited before the final claim is paid.
1.2 All local authority projects receiving in total £50,000 or more ERDF
grant must be audited before the final claim is paid.
1.3 10% of the total eligible grant is retained until the Project is completed
and a satisfactory final audit report has been received by the Council.
1.4 Projects receiving £250,000 or more of ERDF grant and lasting more
than one year, must be audited annually for the year ended 31 March.
Projects receiving £250,000 or more of ERDF grant and lasting for a
year or less must be audited before the final claim is paid. The Council
may, at its discretion, request annual audits of projects with less than
£250,000 of grant.
Accountants‟ qualifications
1.5 You must appoint a registered auditor (or firm of auditors) to carry out
these audits. You are responsible for completing the Statement of
Grant Expenditure ( ERDF60 or ERDF70) on which these audits will be
based.
1.6 Where the grant recipient is a local authority, the statement should be
audited by the Audit Commission‟s appointed auditors.
Forms and Guidance
1.7 For local authority projects, form ERDF60 (Statement of Grant
Expenditure) must be used for audit purposes. For non local authority
projects, form ERDF70 must be used. Booklet ERDF70G provides
explanatory notes for those auditing statements of grant expenditure
provided by private sector bodies. Audit Commission Guidance LG9
sets out the procedures to be followed by those auditing statements of
grant expenditure provided by local authorities.
Audit deadlines
1.8 Annual audits must be completed and submitted to the Council by 30
September of the following financial year. Grant recipients must send a
photocopy of the unaudited ERDF statement of expenditure form to the
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Council by 31 July of the following financial year so that the Council
knows the request for audit has been made.
1.9 Audits of final statements of grant expenditure must be completed and
submitted to the Council by the date shown in section 9.1. Grant
recipients must send a photocopy of the unaudited ERDF statement of
expenditure form with the ERDF20 claim form to the Council also by
the date shown in the offer letter. Normally grant recipients are allowed
one month after the financial completion of the Project to submit the
final claim and unaudited ERDF statement of expenditure to the
Council. A further three months is usually allowed for the audit to be
carried out.
1.10 For annual and final audits, non-receipt of the audited statement of
expenditure form by the prescribed deadline may lead to the
withdrawal, suspension or recovery of grant already paid.
1.11 You must ensure that supporting documentation is maintained and
made available to auditors to ensure that the audit is not delayed.
2. Monitoring
2.1 Article 38 of EC Regulation 1260/1999 sets out the general provisions
for financial control.
The Government Office takes responsibility in the first instance for
financial control of ERDF assistance. The measures the Government
Office takes shall include:
(a) verifying that management and control arrangements for
individual projects have been set up and are being implemented
in such a way as to ensure that Community funds are being
used efficiently and correctly;
(b) carrying out on-the-spot checks, including sample checks, on
the operations financed by ERDF funds and on management
control systems;
(c) ensuring that all assistance is managed in accordance with all
the applicable Community rules and the funds are used in
accordance with the principle of sound financial management.
2.2 As an ERDF project manager you must comply with the deadlines set
for any requests for information concerning the Project. The Council,
the Government Office, the National Audit Office, the European
Commission and the European Court of Auditors or their
representatives shall have the right with a minimum of one working
day‟s notice, to inspect the Project and to require such further
information as they think fit; and to be provided with copies of such
documents or items as they shall require.
2.3 Further details of document retention are set out in Annex 3.
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