Approval of CFOs
From September 2001 Objective 3 is being allocated directly to co-financing organisations (CFOs). To become a CFO, an organisation must:
- have a remit for activities that are eligible for ESF funding
- be a public body (receiving its funding through Government)
- be an intermediary body (it cannot deliver funding itself)
- have sufficient match funding.
An organisation must go through a two stage approval process to become a CFO. First, an organisation's status as a CFO must be agreed. Second, there must be an approved Co-financing Plan which draws together Measure level bids into a single coherent package.
The 5 London Local learning and Skills Councils (LSCs), London Councils and Business Link for London (BLfL) were endorsed for CFO status in 2001 by the Objective 3 Support and Advisory Group (SAG). Jobcentre Plus, Royal Borough of Kingston Upon Thames (formerly South London Connexions) and the London Development Agency (LDA) were endorsed for CFO status in 2002.
Open and Competitive Tendering by CFOs
An important reason for introducing co-financing was to enable claims to be made by CFOs against a contract (either on a formula or non-formula basis). Essentially open and competitive tendering means that providers compete against each other to deliver a service specified by the CFO (a call for 'tenders'). This is distinct from bidding for a grant (as under the old direct bidding system to GOL), whereby providers make bids against general criteria and are scored using objective criteria (a 'call for proposals'), which take account of value for money. The key point is that where open and competitive tendering is used, the final beneficiary for audit purposes is the CFO. This means that the European Commission does not require supporting accounting documentation downstream of the final beneficiary. Where CFOs are operating on this basis, providers do not need to retain the amount of detailed information for ESF purposes that they were required to keep under direct bidding.
