Through direct bidding you can only apply for a maximum of 45% of your project costs from ESFi. The remainder of your project costs have to come from other, non-European sources – this is called match funding. There are different classifications of match funding; public, private, cash and in-kind.
Public match funding comes from any organisation which receives over 50% of its core funding from central or local government. Registered charities also classify as public match funders. If you are a registered charity then you can provide match funding from your own resources and sign and stamp your own public match funding certificates.
Private match funding comes from private enterprise, for example funding from companies. There are no private match funding certificates.
If an organisation or individual provides a service or product to your project free of charge this is classified as in-kind match funding. You can claim the value of this service or product as match funding providing,
- It is covering ESF eligible costs
- The organisation (or individual) providing the service or product agrees to its use as matching funding
- The organisation (or individual) providing the service or product can provide evidence of the costs
- The costs are included in the breakdown of expenditure on the application form
In-kind contributions can be in the form of volunteer time or of donations of land, office space, materials etc. In-kind contributions can either be public or private match funding depending on the nature of what is being donated.
Volunteer Time as Match Fundingi In-Kind
Unpaid volunteer time can be used as match funding in-kind. This is classed as private match funding in-kind. It is important to note that only the time of volunteers acting in a wholly voluntary capacity is eligible. A paid employee of the organisation who performs additional voluntary duties is not eligible, neither is beneficiary time. Paid seconded staff from another organisation are also ineligible as match funding.
Evaluating Volunteer Time
To evaluate volunteer time for match funding purposes you need to determine what project tasks will be undertaken by volunteers. Categorise them into the following roles as far as possible,
- Project Manager
- Project Co-ordinator
- Project Researcher
- Project Administrator
You then need to determine how many hours each volunteer will spend on project activity. Cost the hours using the following rates determined by the ESF Unit. Please note that these are maximums and rates of pay should be consistent with those paid to waged staff if lower than the notional rate.
Role/Notional full-time salary/Theoretical hourly rate
- Project Co-ordinator - £23,000 - £13.13
- Project Researcher - £23,000 - £13.13
- Project Administrator - £16,300 - £9.38
- Project Manager - £29,000 - £16.76
These hourly rates include all (notional) on-costs such as Employers’ National Insurance Contributions and pensions. Higher rates need Government Office approval. However it is advised to match the tasks performed by volunteers with the above examples as different rates may result in a delay in project approval as they may need to be agreed at Regional Committee level. Clear documentary justification for technical or specialist rates which do not fit the notional rates provided must be held by the project.
Calculating and accounting for match fund in-kind can be potentially tricky. It is vital to keep timesheets detailing volunteer time and activity. The logged voluntary activity should correspond with the notional rate given. There must be a clear audit trail substantiating the in-kind match funding.
Using Wage Costs as In-Kind Match Fundingi
You can use the wages or salary costs of employed beneficiaries as match funding in-kind. Like any other match funding, there must be a clear audit record to support the amounts. Many applicants have found confirming these costs difficult because of the relationship with the companies that they work with. For match funding to be eligible it must,
- Accurately reflect the actual wage or salary cost of the individual beneficiary
- Only be used for that time spent on eligible project activity
- Be supported by written confirmation from the match funds
You may be asked to show that time spent on ESF supported activity has been allocated in a fair and equitable manner. So it follows therefore that you will need to account for all staff time for an individual to justify the amount allocated pro rata to the ESF project. Where you use estimated or notional costs, or where you cannot confirm written evidence, the match funding will not be eligible.
Because of the risks involved in not being able to confirm match funding amounts, it is strongly recommended that you enter into an agreement with the match funders before the project starts. Match funders often do not welcome requests for information at a later date. An agreement could include the following information,
- Clear details of what help you or individual beneficiaries will receive from the project
- Who is responsible for maintaining up-to-date, accurate records of what the beneficiary is doing
- How you will monitor this information
- Who will hold this information and how it will be safely maintained and made available if required
Information that will be needed to support annual reports or final reports when the project ends will include,
- The actual wage or salary costs of individual beneficiaries
- Timesheets showing accurate records of how the beneficiaries are involved in the project
- Clear records showing the beneficiaries’ activities
When you work out the in-kind costs you must remember,
- You can use only ‘actual’ staff costs, not lost opportunity costs
- You can claim time spent travelling to a project activity if you can provide proof of the journey and the time you are claiming for is paid by the employer
- An employer’s pension and national insurance contributions are eligible, but commissions, bonuses and benefits in-kind are not
- You cannot include the employers’ overheads
Extra travel or living expenses are eligible if they are,
- Represent the actual amount paid
- Form the normal terms and conditions of employment in the organisation
- Make sure that normal call-out rates used in many companies are not used as these will often include elements that are not eligible
- Identify any development in the workplace on work records, for example on activity logs
Where sole traders or partners are involved in projects it is important to remember that you should not use notional or normal commercial rates. Individuals will keep Inland Revenue returns and these can be used as the basis of the calculations. It is important to tell individuals or companies taking part that if they are asked, they should be able to provide this information for further examination by auditors.
It is not possible to cover everything in this part of the guidance. If in doubt contact North West Network.
Voluntary and community groups often rely on a host of volunteers to run their projects and activities. This time can equate to valuable currency and is eligible as match funding to draw down money from ESF.
Match funding can come from a wide variety of sources, for example government funds, local authorities, private or voluntary sector contributions. For a comprehensive list of potential sources of match funding please follow this link to the Department for Business, Enterprise and Regulatory Reform (BERR) website, www.dti.gov.uk/index.html