Covid19 update - published 21/04/2020
The response to the COVID-19 virus creates significant challenges for us all. We are in an unprecedented situation with very wide-ranging impacts across the wider community.
We recognise that the current situation creates uncertainty and significant challenges to every one of you involved in the delivery of existing projects and the development of projects in the pipeline.
Many of you have raised questions and queries about the continued delivery of the programme and the impact on approved projects and applications in progress. We have provided responses to some of your initial, most common questions below the summary of current EC Guidance.
Audit & Management Verifications: Member States i.e. Managing Authorities are encouraged to perform desk-based verifications where possible until such time as it is safe for staff to perform on-the-spot visits, or postpone until in the 2nd half of 2020. The Audit Authority (AA) should carry out the audit activities as far as possible and once the emergency is over, the AA will be able to assess whether it is necessary to complete the work by visiting the operation on the spot to verify the physical implementation of the project or obtain further clarifications. AA to assess the scope of the activities to be carried out in line with the resources and time available, to ensure submission of the annual control report by 15 February 2021.
First Level Controllers (FLC) may exceptionally avoid carrying out the physical on-the-spot visit as long as the FLC:
- could get reassurance through comparable means (e.g. pictures, agendas, phone interviews) of the existence and reality of goods, works and services procured and that the project was delivered according to the application form.
- explain in the report that the on-the-spot check was not carried out due to the Covid-19 crisis and remind the nature of the project activities (mostly intangible, no or very little equipment)
- document the alternative way how assurance was gained in the independent first level control report
Audit Compliance: Management verifications and audits should continue to verify compliance with applicable rules.
Eligibility of Expenditure: Unless otherwise directed by National rules, the legislative framework for the implementation of European Structural and Investment Funds programmes remains fully applicable including for public procurement. The beneficiary should exercise due care to claim any amounts/compensation from insurance or any other sources. Any amounts received by insurance or compensation from other sources (e.g. liability insurance coverage compensating for the non-fulfilment of a contract, travel insurance compensating for travel expenses of a cancelled event, reimbursable travel and accommodation costs, etc.) must therefore be deducted from eligible expenditure.
Flexibility to adjust operations: Where the execution of contracts is impeded because of COVID-19, national authorities should exercise their discretion in permitting substitute performance or delayed performance. National authorities should consider adjusting operations to minimise the impact of the force majeure on the programmes. National authorities could also consider the possibility to select new operations in order to effectively use available resources and to achieve the targets set for the programme.
Force Majeure: It is not clear that the outbreak is necessarily to be regarded as a force majeure event in all cases, the Commission considers that careful analysis and flexibility should be given to all cases where there is failure by beneficiaries to fulfil obligations in a timely manner for reasons related to the COVID-19 outbreak.
Selection Criteria and Procurement: legislative framework for the implementation of operational programmes remains fully applicable; need to ensure compliance with relevant EU rules, including provisions on selection of operations as laid down in Articles 65(6) and 125(3) of CPR.
Questions and Answers - First Published on 21 April 2020
Q Will we continue to process Claims?
A Yes. We recognise how important it is at this time of uncertainty for organisations to maintain cash flow and avoid unnecessary disruption to project finances. Where you are able, please submit your full claim in line with the Grant offer Letter, with supporting documentation as normal, on eMS.
Please provide all of the supporting documentation, where you cannot please provide what you can.
If you are unable to meet the GoL claims deadline please inform the Joint Secretariat (JS), letting your contact know when you expect to submit your claim.
We recognise that it may be difficult to gather some documentary evidence at this time. Where possible please provide the requested evidence. If this isn’t possible in the immediate future, we will not hold up payment of your claim, but we will contact you at a later date to ensure that the relevant evidence is provided.
We will review the need to extend these arrangements for a longer period as the position develops.
You must however ensure that you continue to maintain a complete and robust audit trail as claims will be verified/audited as usual or at a later point by both your FLC and the JS/MA and normal evidence requirements will apply.
Q Project will underspend in 2020, will this money automatically be lost to the project?
A No. We recognise that it may not be possible for some projects to operate as normal and that this may impact on performance. We will work with you to reprofile finances and will also consider extensions to end dates, if possible within the programme time frame, to allow projects to catch up.
Q Will the project automatically be penalised if outputs cannot be delivered as a result of the impact of COVID-19?
A No. As with finances we will work with you on a case by case basis to review profiles as necessary, it is not necessary to submit a project modification at this point, although may be requested at a later date to confirm agreed outputs. No penalty will be applied for reduced output levels that are agreed by the Managing Authority (MA) in line with the current programme performance guidance.
Q Will the programme continue to support project costs where activity has ceased or is temporarily suspended?
A No. Please note salary costs cannot be covered where delivery has ceased or is temporarily suspended.
It is important to note also that where employers choose to formally redeploy project staff to activities outside of the project, regardless of whether the project continues to deliver or is suspended, those salary costs are ineligible for support.
Q Will projects be able to cover the costs of staff should they fall ill due to the Coronavirus?
A Yes. In line with the current national eligibility rules, if staff engaged 100% of the time on the project are certified or self-certified as sick, we will pay salary costs and contractual sick pay as normal.
If staff engaged 100% are in isolation and unable to undertake any project work and the employer is obliged to pay them, we will treat this in the same way as sick pay and cover the costs as normal.
Where staff time is only partially spent on a project using either the hourly rates or percentage methodologies these need to be applied using existing rules.
In line with Question 4, if project activity has ceased or is temporarily suspended or staff have been redeployed, costs relating to sick pay are not eligible for support since such will not be working on the project.
Q Can funds be used to meet part of the 20% employer contribution to wage costs under the HMT scheme?
A No. Where delivery has ceased and employers seek access to support under the Government’s Coronavirus Job Retention Scheme, the programme will not contribute towards salary costs.
Q If staff are off sick, we are concerned about the impact this will have on the finances we can claim. Can we (a) increase the percentages claimed by other employees who are not currently claiming 100% of time and (b) can we bring in staff replacement cover (assuming we need a contract in place for them prior to them delivering)?
(a) Yes. Part time staff can increase their percentage to cover sick absence.
(b) Staff replacement cost is eligible usually for long term sick absence.
Increase in PT percentage working time and short term replacement costs are eligible as long as there is a contract in place prior to the staff member delivering.
Q The European Commission is considering changes to regulations e.g. state aid in response to the situation, must we follow the current rules?
A Yes. The European Commission has proposed a series of limited flexibilities under CRII and the Temporary Framework for State Aid in response to the current emergency.
However, until further guidance is issued you must continue to follow current state aid and procurement rules and regulations. We will let you know if the position changes.
Q Can we change our project activity under current rules to help businesses respond to the situation?
A Yes. We recognise there are opportunities for existing projects to amend their approach or refocus their support to assist businesses respond to the current situation. It is important to note that the situation is evolving and therefore it may not be possible for JS / MA staff to respond immediately. However, if you wish to revise your project please provide your JS contact with details in the first instance.
Q Can we change how we deliver the project activity?
A Yes. If you wish to adopt remote delivery such as remote or online methods or make other changes to how you deliver the project this is fine. During the crisis we will accept electronic evidence of support if it is not possible to provide hard copies and ‘wet’ signatures and have recently updated our programme manual accordingly. There is a requirement for hard copies and “wet” signatures to follow “once the crisis has subsided”.
Q Would cancellation fees be eligible?
A Yes. Where a project incurs costs for activities that could not be delivered due to events or decisions beyond their control (e.g. meetings are cancelled by third parties or following Government advice), that expenditure will be eligible as long as the JS / MA is assured that reasonable steps have been taken to minimise that cost, that costs cannot be reimbursed from other sources and clear evidence is maintained of the payment and cancellation status/circumstances.
Q If we need additional IT to support remote working is that an eligible cost?
A Yes. If you need additional equipment or software to allow project staff to work remotely this may be included in claims.
Q How do I inform and get agreement from the Managing Authority for any changes set out in this note?
A In the first instance you should contact your JS contact by email clearly setting out all of the changes you anticipate as far as you are able. Your JS contact will consider and indicate MA consent (where possible) in email form. There will be no requirement for a project modification submission for COVID19 actions unless specifically requested. Modifications for non COVID19 reasons should be submitted as per programme rules.
Q Submission of Full Applications: In respect of current applications, will our application be deselected if we fail to meet the application submission date?
A We recognise it will be difficult for some projects to meet the current deadlines. Where you are able, please submit your application by the agreed deadline. If you are unable to meet the deadlines please contact your facilitator, we will consider extensions on a case by case basis. Further calls for submissions are available later in the year.