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Publication - Advice and Guidance

European Social Funds: cost models guidance

Published: 12 Oct 2016

Guidance on the cost models, as set by the National Rules, for the Social Economy Growth Fund, Social Innovation Fund and Aspiring Community Funds.

Please note: applicants to our funding programmes should pay particular attention to the National Rules on eligibility of expenditure, publicity guidelines, document retention guidance and state aid rules. As a Lead Partner Scottish Government must ensure that projects are compliant with ESF National Rules and will undertake 100% upfront compliance checks.

Social Economy Growth Fund: actual cost model

The Social Economy Growth Fund is based on an Actual Cost Model. A full audit trail is required for every item of eligible expenditure. This means that all claims must include documentary financial evidence of the date money left your bank account, as evidenced on your bank statement. Examples of supporting evidence include:

  • invoices and purchase orders
  • claim/expenses forms
  • receipts
  • payroll/wage slips
  • BACs
  • bank statements of organisation and end beneficiary

Staff costs (basic pay + employers NI/Superanuation) are eligible for those who spend 100% of their time, full or part-time, working on ESF activity. We are required to report the details of new FTE jobs created to meet ESF Programme targets.

Social Innovation Fund and Aspiring Communities Fund: flat-rate cost model

Both the Social Innovation Fund and the Aspiring Communities Fund are based on a Direct Staff Flat Rate +15% or 40% model. This relates to the eligible salary costs of staff employed 100% on a project. Staff can be full or part-time, employed for intensive periods of time or for the full duration of a project. Examples of supporting evidence include:

  • payroll evidence
  • BACS
  • bank statement
  • job descriptions
  • appointment/contract letters
  • confirmation of start and end dates

Using a flat-rate model enables up to 40% of total staff costs towards additional project expenditure that is indirect. Indirect costs include travel, accommodation, events and non-dedicated staff time (people who only work occasionally, intermittently or temporarily on a project. Indirect project costs do not require a full audit trail.

While it is not an EU requirement for staff to work 100% of their time, the Scottish National Rules on Eligible Expenditure were informed by previous programme audit experience. This identified a high level of errors in relation to apportioned staff time calculations, timesheet recording, certification and retention. There is no requirement to keep timesheets for staff so that they can focus fully on project delivery.


12 Oct 2016
European Social Funds: cost models guidance