1. SESSION 2: ESIF Simplification Workshop – Update on Simplified Cost Options (SCOs) Nicola Lavin, NW Growth Delivery Team Arpley House Warrington Nicola.lavin@communities.gsi.gov.uk Tel:0303 444 6494 Nicola.lavin@communities.gsi.gov.ukel:0303 20XX

3. Advantages of Simplified Costs Reduces the administration burden to beneficiaries –No more discussion on whether or not costs are linked to the project - reduced time to develop –No more collection and archiving of every (small) cost –No audit of underlying financial documents –Audit only on results achieved and or activities performed audit less time consuming Reduces the administrative burden for the managing authorities –Supports N+3 –Role of the MA changes to one of support –Easier reporting to EC Reduces the risk of error rate –ECA Annual Reports 2012 & 2013 did not detect any costs related to the specific use of SCO Focus on results

4. The Cost Options ( for grants and repayable assistance ) Costs actually incurred, identifiable and verifiable, recorded in the accounts, etc. A percentage to be calculated on the eligible costs Example: Indirect costs = 15% Direct staff costs A fixed amount per unit determined by the MA Example: person attending a seminar For average personnel cost (based on the usual accounting practices) A global amount to cover one or several cost categories not exceeding EUR 100,000 of public contribution Example: Hosting of a event/production of information videos

5. MA status Current position Flat rate of 15% to calculate indirect costs –15% of direct eligible staff costs Emerging For research and innovation activity –Making use of Horizon 2020 for similar activity and beneficiaries –Indirect costs can be calculated on the basis of 25% of total direct eligible costs (less subcontracting costs and the resources made available by third parties which are not used on the premises of the beneficiary, as well as financial support to third parties) Future ( New Year) Standardised Unit costs –Define activity –Review data available on cost driver

6. Direct costs = £113,772 A. Direct staff costs = 1. Personnel cost100,763 60,895 + 39,143 = £100,038 1.1 Internal personnel - remuneration60,895 1.2 Int. pers. – transport home/work622 1.3 Internal personnel – travel costs104 1.4 External personnel – remuneration39,143 B. Indirect costs – 15% of direct staff costs 1.5 External personnel – travel costs0 = 100,038 x 15% = £15,006 2. Product develop & consumption13,009 C Other direct costs = £13,735 2.1 Non depreciable consumption goods 9,056 2.2 Publicity3,096 2.3 Organisation costs857 TOTAL ELIGIBLE: 2.4 Other costs0 A = B = C = £128,779 Future simplified cost options Indirect costs = 15% of direct staff costs

7. Next steps Guidance on SCO released in December by EC Confirmation by DCLG of the use of 25% flat rate (of eligible direct costs less sub contracting etc) to fund indirect costs for similar beneficiaries and activity (Research and Innovation) New Year begin in earnest unit costs analysis.