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Funding : Compliance with Scottish Government rules on claiming Orphans Grant and Data Protection

Many recipients of 'Grant' often raise concerns regarding information we ask them to provide in order to verify expenditure actually defrayed by them. The Scottish Government has introduced the concept of "compliance up-front" with national and EU regulatory requirements in order to minimise the risk of grant to Scotland being decommitted and recovered by the European Commission and this page describes what Genecom does in order to satisfy these requirements.

Recipients of Orphans grant may not actually realise that Genecom itself does not receive grant from the Scottish Government until we have reassured ESEP, the managing authority for the Lowlands and Uplands Scotland Programme that expenditure has been properly defrayed.

Compliance and Audit
For every Pound committed by Genecom as grant, Genecom is legally required "to ensure that all expenditure presented by and declared on behalf of recipients of the Orphans Grant has been incurred and defrayed correctly and is in line with the National Rules". In order to be eligible, expenditure must be:

In order to confirm this we will request information from recipients of Orphans Grant and will cross reference this against the spend profile in the grant agreement. We will then prepare a transaction list setting out in outline this information which is then checked by ESEP. They in turn, will carry out a more detailed check on a random sample taken from this list. Only after ESEP has approved that expenditure has been correctly defrayed is Genecom 'paid' by the Scottish Government. This why, other than in exceptional cases, we do not make payment of grant up-front.

Evidence Required
As Genecom does not know which items described in the transaction list will be sampled by ESEP, in order to expedite the payment process, we ask recipients of the Orphans Grant to provide Genecom with an audit trail validating any expenditure claimed. Some recipients of grant have suggested that this process is intrusive and "none of our business". This is understandable but we are required to collect this information by the Scottish Government and thus we seek understanding and compliance. Orphans Grant conditions are also specific in this respect.

Recurring Issues

We are often asked what evidence we need to validate expenditure defrayed. This includes:

Staff Costs – Annual salary should be shown for staff 100% on the project. Costs should include NI and Superannuation and be shown per month

Where staff are not appointed 100% on a project we require you to calculate an hourly rate. Staff posts must spend a minimum of 10% of their time on Structural Funds activity.

evidence required

an acceptable audit trail would include extracts from payroll (any irrelevant information can be scored out)or contracts of employment detailing salary and leave entitlement, BACS run, bank statements.

Staff travel should include mileage rates, number of miles and method of travel

evidence required
we will accept bus and train tickets, claim for expenses and reimbursements, signed receipts, petty cash receipts, BACS
and bank statements

Other purchases

We will accept purchase orders, invoices and bank statements (all other irrelevant information can be scored out)


Confidentilaity and Data Protection
Genecom will not disclose information in detail when compiling transaction lists and will instead use alternative references, for example, payroll numbers or job titles referenced to staff costs or non‐attributable participant reference numbers. Any personal information that is required by ESEP to verify these costs is only checked by named ESEP staff at an on‐site visit to the project sponsor or as part of agreed verification checks.

Patrick McCarthy CEO January 2010