104/24 Action Required: Defrayal of expenditure after 31st December 2023
Updated 29 February 2024
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This publication is available at https://www.gov.uk/government/publications/esf-action-notes-2014-to-2020-programme/10424-action-required-defrayal-of-expenditure-after-31st-december-2023
Date Issued 03 January 2024
Review Date 03 January 2025
1. Who Should Read
- ESF Co-financing Organisations (CFO)
- ESF Direct Bid projects
2. Purpose
Provide further clarification on expenditure defrayed after 31/12/23
3. Background
The Managing Authority (MA) for ESF 2014-2020 contacted Grant Recipients on 04 December 2023 to remind them that, as per Action Note 099/23, all costs that are being claimed in Quarter 4 2023 Claims, must have been defrayed before 01 January 2024.
Any costs defrayed in 2024 are ineligible.
Following a number of queries from Grant Recipients, this Action Note provides further clarity around the defrayal of Direct Staff Costs.
All elements included in the Total Invoice Value of a Direct Staff Cost must have been defrayed before they can be claimed from ESF.
Such elements can include Employee’s National Insurance, Employee’s Income Tax, Employee’s Pension, as well as Employers’ National Insurance and Employer’s Pension. This is not an exhaustive list.
If none of these elements had been defrayed before 01 January 2024, the eligible amount to be claimed from ESF would be the employee’s Net Pay.
When staff work full time on an ESF project, the Total Invoice Value and Total Eligible Value on the transaction list are usually identical. In Quarter 4 2023, if some of the costs are not defrayed by the 31st of December, the MA would expect the Total Eligible Value to be lower than the Total Invoice Value to reflect this.
4. Action
For Quarter 4 2023 claims, the MA requires all projects to record within the progress report, that full consideration has been given to costs defrayed after 31st December 2023 and expenditure removed where appropriate.
5. Contact
If you have any questions regarding this Action Note, please speak to your Contract Manager.