Lump-sum payments to facilitate administration of small projects
A lump-sum method is scheduled to be implemented in Structural Funds as of the beginning of 2012 through amendment of the Finnish eligibility decree. Lump sums are one of the three simplified cost methods approved by the European Commission, the first of which (flat rate) was introduced in Finland on 1 June 2011. Amendment to the eligibility decree will be discussed by the government on 15 December 2011, with the amendment expected to enter into force on 1 January 2012.
The purpose of the lump-sum method is to facilitate the administration of small projects. The method is designed especially for small project actors, such as NGOs and local associations, which often lack sufficient resources for the administration of Structural Funds projects. It is hoped that the introduction of this new method will encourage more small actors to initiate projects. However, lump-sum payments can also be used in the projects of other actors.
The maximum amount of public funding for a project financed through the lump-sum method is €50,000. The lump sum paid to an operation is verified on the basis of a detailed cost estimate. In projects funded by lump-sum payments, the beneficiary does not need to produce receipts for actual costs, since payment is based on verification of the outcomes delivered by or measures taken during the project. The method emphasises the importance of project results and reduces the working time required for payments by both the beneficiary and the competent authority.
The lump-sum method may be applied to only new projects whose outcomes or measures can be clearly defined in applications and decisions. These clearly definable project types may include various surveys, organisation of events, the distribution of outcomes and other one-time measures.
Lump-sum payments are suitable only for projects that are carried out primarily by the beneficiary, although the completion of some parts of the project may be outsourced. In addition to projects implemented under public contracts, the lump-sum method may not be applied to technical assistance projects; Finnvera Oyj’s projects; or projects implemented by the Centres for Economic Development, Transport and the Environment that involve employment policy measures or competence development services for SMEs.