Simplification from a University Perspective - Dr Dan King, Head, Knowledge Transfer Team, University of Nottingham

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  • Each primary ERDF project has dedicated Project Manager – claims, outputs, responsibility.
  • The framework of ERDF rules/definitions is not easily compatible with the systems and procedures used within HEIs making it very difficult for us to deliver projects efficiently (Defrayal requirements is just one example).  These were clearly not designed with HEI led projects in mind.
    Auditors will always wish to identify areas for improvement – over frequent audit creates a culture where a constant stream of relatively minor issues are highlighted which take a disproportionate amount of time/effort to resolve with minimal benefit to anyone.  
  • The framework of ERDF rules/definitions is not easily compatible with the systems and procedures used within HEIs making it very difficult for us to deliver projects efficiently (Defrayal requirements is just one example).  These were clearly not designed with HEI led projects in mind.
    Auditors will always wish to identify areas for improvement – over frequent audit creates a culture where a constant stream of relatively minor issues are highlighted which take a disproportionate amount of time/effort to resolve with minimal benefit to anyone.  
  • FP7 portfolio comprises of 270 projects, total value €118m
    Audit reports are required to support any claim greater than €375k. These are done by our own appointed external auditors (Grant Thornton)
    EU have the right to audit any of our projects during the project lifetime and up to 5 years after they have finished
    To date we have had 8 FP7 projects audited by EU auditors
    EU Auditors check all staff costs and sample test other direct costs
    EU Auditors do not follow expenditure through to defrayal
  • Academic knowledge and access to facilities
    Students (employment, placements, projects)
    Networking
  • Simplification from a University Perspective - Dr Dan King, Head, Knowledge Transfer Team, University of Nottingham

    1. 1. Simplification from a University Perspective Dan King, Head, Business & Local Partnerships Team Business Engagement & Innovation Services 2014
    2. 2. • Our involvement and contexts • 2007-2013 ERDF programme – our experience • Where is the complexity? • Looking towards 2014-2020 – Lessons learned – 5 asks to simplify
    3. 3. Context • Strong involvement in 2000-2006 ERDF & RDA-funded programmes • To date 2007-2013: £20.5M ERDF, with ERDF rules impacting on £46M of spend – Biggest project £3.6m ERDF, smallest <£10,000. – Collaborative Projects (e.g. Innovation Fellowships) – Revenue SME engagement projects in technical areas – Capital build projects, with SME engagement programmes – Small R&D projects accessed through regional 3rd parties (iNets) – Commissioned projects (e.g. Growth 100) • Using ERDF to maximise SME engagement/benefit across our activities • Most East Midlands HEI projects funded at 40%.
    4. 4. ERDF projects at UoN Project Name Focus Ingenuity Plus 2013-2015 umbrella project – central project management, activity in various departments/centres. Environmental Technology Centre Energy and resource efficiency advice to SMEs, facilitates SME engagement with the Engineering and the wider University. Innovation Fellowships Long running collaborative programme (8 HEIs, UoN lead), original funded via HEROBC/HEIF and RDA. Supports academic enterprise / commercialisation - ~£15k grants Post-Graduate Placements into SMEs Supports and facilitates PG placements into local SMEs; now has strategic importance aligned to CDTs/DTCs Advanced Manufacturing Successful research group, adds SMEs engagement capacity and resource. Led to creation of local Precision Manufacturing Network for SMEs Food and Biofuel Innovation Centre New capital build, blends BBSRC, SAB Miller, University, ERDF funding to create new R&D facility and build SME engagement capacity Accelerating a low carbon economy New capital build and SME engagement/benefit programme connected to an area of institutional strength Institute of Aerospace Technologies New capital build and SME engagement/benefit programme connected to an area of institutional strength Chemistry Innovation Laboratory SME engagement for School of Chemistry, managed within their Business Partnerships Unit Growth 100 Growth, leadership & development programme for 100 SMEs, commissioned by Nottingham City Council, delivered by Nottingham University Business School Sub-contracted iNet projects – R&D 38 R&D projects ranging from, <£10k to £150k, typically small projects undertaken collaboratively with SMEs and other HEIs.
    5. 5. Real benefits from ERDF • Resource to engage the SME business & understand their needs • Ability to pilot SME-facing activity in new areas • Blends with the wider R&D portfolio of strong research groups in applied technical areas – Aligns with bigger programmes (e.g. EPSRC Centres for Innovative Manufacturing, FP7 – clusters in areas of technical specialism) – Gives SMEs access to the corporates – Corporates – valued our ability to work with their SME supply chains – Develops SME networks as a long term asset Leading to • Greater institutional recognition of, and capacity to engage, SMEs. • Greater coherence of the UoN SME offer – network of key individuals internally
    6. 6. Simplification Where is the complexity?
    7. 7. Funding agreement Guidance Notes Outputs to be delivered Structural Fund regulations UK MA ERDF “rules” Output definitions Procurement Eligible costs Indirect costs Audit regime Publicity Others... Claim process
    8. 8. What our Project Managers experience Food and BioFuel Innovation Centre – Start Date Sept 2009 •Article 13 Audit (August 2010) – finally resolved November 11 - 4 weeks work •Article 16 Audit (November 11) – awaiting final completion - 20 weeks work •Enhanced article 13 Audit (Sept 2012) – resolved Nov 2012 - 2 weeks work •Certifying Authority Audit (August 11) – not yet resolved - 1 week •Desk based defrayal checks implemented (June 2013) – require presentation of evidence to audit standards for 10% of each claim. Advanced Manufacturing – SME engagement (revenue) project - Start Date March 2009 •Sept 2009 – A13 Audit (1 week prep, 1 day audit) •Nov 2010 – A13 Audit (1 week prep, 1 day audit) •Nov 2011 – Enhanced A13 Audit ( 2 weeks prep, 1 week audit) •July 2012 – Certifying Authority Audit (1 weeks work so far), still on-going •April 2013 – Procurement checks (3 days) Aerospace – capital build and revenue based SME engagement project - Start Date April 2010 •April 2011 – A13 Audit (1 week prep, 1 day audit) •Jan 2013 – A13 Audit (2 weeks prep, 3 days audit) + 3 weeks of follow-up actions •Jan 2013 – DCLG Programme evaluation (1 day) •May 2013 – A16 Audit (2 weeks prep, 4 days audit) + on-going follow up actions
    9. 9. 2007-2013 lessons learned • Administrative complexity and risk much higher than 2000-2006 ERDF programme • Costs (unrecoverable) to manage ERDF too high, risks high, clawback common • Some of the common problems experienced – Defrayal – UK rules for audit testing to bank account – Overheads / indirect costs – Volume of forensic audit – A13, A16, CAA, desk-based checks – Changing “rules” – audit interpretations, revisions to guidance notes – Procurement – “sub-OJEU advertising” – the Interpretative Communication – Laborious claim process – single line item entry • 2012-13 reached a plateau of understanding from which new projects could be designed – but much reduced in scope
    10. 10. 2007-2013 lessons learned • Administrative complexity and risk much higher than 2000-2006 ERDF programme • Costs (unrecoverable) to manage ERDF too high, risks high, clawback common • Some of the common problems experienced – Defrayal – UK rules for audit testing to bank account – Overheads / indirect costs – Volume of forensic audit – A13, A16, CAA, desk-based checks – Changing “rules” – audit interpretations, revisions to guidance notes – Procurement – “advertising” – the Interpretative Communication – Laborious claim process – single line item entry • Reaching a plateau of understanding from which new projects can be designed – but much reduced in scope April 2012 National ERDF Guidance: Much improved stability of guidance and audit interpretations
    11. 11. Why is ERDF so difficult compared to FP7? • “EU research funding programmes remain inefficient and burdensome, according to the European Court of Auditors’ final assessment of Framework 7” June 2013. • FP7 is “much easier – by an order of magnitude” • FP7 audits as rigorous – but much less frequent • Lessons to be learned? – Treatment of indirect costs – Proportionate approach to project risks and audit
    12. 12. If we could change just one thing.... 1. Defrayal - many issues derive from this decision.
    13. 13. If we could change just a few things.... 1. Defrayal - many issues derive from this decision. 2. A simple, audit proof, indirect cost method suitable for large organisations. 3. Proportionate audit regime. 4. Maintain consistent guidance and interpretation. 5. Funding agreements: “whole agreement” clause.
    14. 14. And if we could change a few more... • Recognise that much ERDF is delivered by large organisations and set the rules with this in mind. • Incorporate advice from HEIs/large organisations on rules which impact on implementation of financial eligibility – Standard accountancy practices – Acceptability of optical document archives – Audit should recognise established governance systems in large organisations
    15. 15. 2014-2020 context • Our LEP – D2N2 – Derby, Derbyshire, Nottingham, Nottinghamshire. – Currently one of the largest LEPs – Two cities, Nottingham is a Core City • Working with the D2N2 LEP around EU SIF 2014-2020 strategy and programmes. • With Derby and Nottingham Trent, developing the Innovation Action Plan for the LEP, set against the Strategic Economic Plan. • The LEP is currently articulating 8 “priority” areas in its SEP.
    16. 16. The reasons we persevere

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