DWP response to ESF grants programme defrayal issue

The Active Inclusion in D2N2 funding call has been reopened pending clarification of issues raised in relation to defrayal that may have prejudiced against some potential applicants.  Initially the Department for Work and Pensions had decided that the point of defrayal for the grants programme would be the point that funds left the grant recipient’s bank account.  This led to 5 of the 6 applications being withdrawn, mainly due to concerns about cash flowing the programme.
As a direct result of intervention by the D2N2 ESIF Committee and the D2N2 Social Inclusion & Equalities Advisory Group, we have received an update from Tim George, Department for Work and Pensions European Social Fund Managing Authority Team, regarding defrayal.  Please see the statement below. 
The Managing Authority (MA) has agreed to adopt a revised approach to Delegated Grant Schemes in the hope that this will allow greater access for the Third Sector. Barring an exception brought to my attention by D2N2, the MA had previously considered that defrayal at the lowest possible level must have occurred before a claim to the MA could be submitted. I am pleased to report that the MA has agreed to adopt a revised approach in which, subject to sufficient assurances within the management and compliance process, we would consider a delivery model in which defrayal by the Lead Accountable Body would be suitable for inclusion in a claim to the MA. Amongst other things, evidence of defrayal by the grantee would still be required as part of the verification process. Appraisers will be paying particular attention to the models proposed in a delegated grant scheme call to seek adequate assurances that the risks have been considered and suitably mitigated.

Article uploaded 2/8/18

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