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3 Claims and Payment process

Claims

If you only apply for funding under the land based options, you will not need to complete a claim form at the end of the Scheme year and payments will be made automatically either as claimed or as determined after processing and inspection.

For other options, you must submit a claim from. We will send you a claim form toward the end of the Scheme year. You must fill this in and submit it together with any supporting documents we may have asked you for, make sure it reaches your SGRPID Area Office as soon as you have completed the options applied for but by 31 August at the latest. We cannot pay claims received after that date.

Supporting Information for Claim

If you chose any of the following options you must send us supporting information to show us that you have met the necessary requirements.

Skills development (Training)
Business audit
Nutrient Management Plan
Modernisation through electronic data management - Agriculture
Management of tree stocks for seed production
Modernisation through electronic data management - Forestry
Access creation for sustainable forest management
Membership of food quality assurance Schemes
Enhancing access
Management of sites of archaeological or historic interest
Management of vernacular rural buildings

For options where payment is based on actual costs, you must submit the original invoices and evidence to prove that you have incurred the expenditure (we will return the originals to you). We can only accept correctly receipted invoices.

Your invoice must show:

• Your supplier or contractor's name and address; and your business name and address as the customer;
• Details of goods and services purchased and supplied. Show separate costings for each approved option, and VAT details where appropriate. The date when the supplier or contractor delivered the goods and/or services to you;
• The total amount of the invoice;
• The amount paid by you in figures or words. If this differs from the total invoice amount, it must provide information to explain the difference (such as the amount of any discount, or credit or hire purchase charges);
• The signature and stamp of the supplier or contractor receiving payment (or their employee).

If you have settled an invoice for over £500 by cash, you must keep additional evidence of payment for your records. This might be a separately numbered receipt from the supplier's accounts or an accountant's statement.

If your invoices are paid by electronic banking we require a printed copy of the bank statements showing the defrayed expenditure and also copies of the electronic transaction between businesses e.g. 'Royline' prints.

Payments

Payment under the Land Managers Options will be made in arrears, after you have completed the relevant undertakings. One payment will be made per application after the end of the LMO year, providing any claim forms have been returned to us with all supporting documentation as required to allow final processing.

Payment method

Claims will be paid using the Bankers Automated Clearing System ( BACS). If you have not previously supplied this information you should obtain and complete a BACS (1) form and return it to your SGRPID Area Office as quickly as possible. This also applies if you need to change any of the details we hold.

Breaching the scheme rules and conditions

If you find that you can no longer meet the conditions of the contract, write to your SGRPID Area Office within 10 days of being in a position to do so, explaining why and providing any relevant evidence.

You may have to pay back some or all of the payments we have made to you, plus interest. You may also have to pay a penalty. We would not seek recovery where you can provide evidence that the reason for the failure meets the strict conditions of force majeure or exceptional circumstances.

Force Majeure

The categories of force majeure or exceptional circumstances include:

• The death of a beneficiary
• The long term professional incapacity of a beneficiary
• Expropriation of a large part of the holding if that could not have been anticipated on the day on which the commitment was given
• A severe natural disaster seriously affecting land on the holding
• The accidental destruction of livestock buildings on the holding
• An epizootic disease affecting all or part of the farmer's livestock.

Record keeping

You must keep all records that relate to the scheme, including receipts and invoices, for at least 4 years after you receive payment for the scheme year in which the costs were incurred. If you are undertaking a 5 year option, you must keep the documentation for the 5 years that the option is in effect plus 4 years after you receive the final payment.

Cross compliance

A condition of receiving payments for the Business audits under Axis 1 and Land Managers Options which come under Axis 2 (except Woodland creation on non-agricultural land) is that you will have to comply with cross compliance.

Cross compliance is made up of Statutory Management Requirements and Good Agricultural and Environmental Condition:

• Statutory Management Requirements ( SMRs) are based on legislative requirements relating to the environment, public, animal and plant health and animal welfare. The SMRs are already legally binding on all land managers throughout Scotland.
• Good Agricultural and Environmental Condition ( GAEC) measures are based on a framework to address soil erosion, soil organic matter, soil structure and the minimum level of maintenance. The GAEC measures have been developed to reflect the wide variability of soils and habitats found throughout Scotland.

Full information about cross compliance, including detailed guidance on the Statutory Management Requirements and Good Agricultural and Environmental Condition, can be found on the cross compliance pages of the Scottish Government website at - www.scotland.gov.uk/Topics/Agriculture/grants/Schemes/compliance

Minimum Requirements for fertiliser and plant protection product use

A condition of receiving payments for the Land Managers Options which come under Axis 2 (except those relating to Woodlands) is that you will have to comply with the minimum requirements for fertiliser and plant protection product use.

The minimum requirements are:

Fertiliser use - beneficiary must comply with the standards set out in the section 'Nitrogen and Phosphorus' of the Prevention of Environmental Pollution from Agricultural Activity ( PEPFAA) Code of Good Practice.

Plant protection product use - beneficiary must comply with the Control of Pesticides Regulations 1986 and amended in 1997. The Code of Practice for using plant protection products in Scotland sets out the minimum requirements for pesticide stores and the spraying of plant protection products.

www.scotland.gov.uk/Publications/2005/03/20613/51366 - PEPFAA code
www.scotland.gov.uk/Publications/2006/12/19110050/0 - Control of Pesticides

Minimum requirement for protection of historic or archaeological features

If you are carrying out any agri-environment options, you may be penalised if inspections show that you have knowingly damaged or destroyed features of historic or archaeological interest on any part of your land. The damage or destruction of any historic or archaeological features or areas must be avoided and guidance approved by the Scottish Ministers must be followed for the protection of such features or areas.

The following points summarise the relevant guidance:

• Maintain existing grass or heather cover. When re-seeding, avoid ploughing or other soil disturbance.
• Maintain grazing, but avoid erosion. Feeding sites must not be located on ancient monument areas.
• Do not plant trees or encourage regeneration within 20 metres of an ancient monument and avoid panbusting and subsoiling. Where an ancient monument is isolated within an arable field, do not plough it. Leave an unploughed buffer zone of 5 metres around it.
• Do not carry out new drainage on or near an ancient monument. Take great care to avoid new disturbance when maintaining existing drains.
• Where rabbit control is carried out, avoid ground disturbance.
• Do not permit peat cutting, quarrying, dumping or storing of any material to occur on the site of an ancient monument.
• Do not erect fences or other structures or create access tracks within 10 metres of an ancient monument. Avoid the use of wheeled or tracked vehicles on or near ancient monuments.
• Do not allow the use of metal detectors on ancient monuments or remove any archaeological finds. Report any finds or new features to Historic Scotland, the Local Authority archaeologist or the local museum.

In order to avoid damaging or destroying historic or archaeological features, it is important that you are aware of the location, nature and extent of any such features recorded on your land. It is advisable to mark these clearly and accurately on any farm plans, particularly on any information that you provide to a contractor or other third party working on the land. This is particularly important if you are planning a change in land use.

There are a number of sources that can help you to identify historic or archaeological features on your land:

• Your local authority archaeological officer may be able to provide advice on the management and protection of unscheduled archaeological sites. However, not all local authority areas offer advisory services in relation to LMOs. Check the SRDP website or consult your SGRPID Area Office for more information about the availability of advisory services in your area.
• If you had an archaeological audit of your land for a previous agri-environment scheme, you can refer to this.
• You can consult PASTMAP ( http://www.pastmap.org ). PASTMAP is a free online resource. It will provide the location and full extent of a scheduled monument and Inventory garden and designed landscape, and a central point for a listed building and its curtilage. It will also provide an approximate or central point for recorded unscheduled sites. The written descriptions of unscheduled sites in the National Monuments Record and Scottish Sites and Monuments Record data will help you to define on the ground the minimum extent of visible remains.

Sources of further information, if needed

www.historic-scotland.gov.uk/gardenssearch is a source of additional information about Inventory gardens and designed landscapes. Paper copies of the Inventory can be obtained from Historic Scotland (contact 0131 668 8940).

Local Authorities are your initial contact point for advice on listed buildings, including Listed Building Consent.

Historic Scotland can provide advice on scheduled monuments, including Scheduled Monument Consent ( SMC), and Inventory gardens and designed landscapes. Historic Scotland can be contacted at:

Historic Scotland
Longmore House
Salisbury Place
Edinburgh
EH9 1SH

Tel: 0131 668 8770 (scheduled monuments), 0131 668 8940 (Inventory sites) and 0131 668 8981/8717 (listed buildings)
e-mail: hs.inspectorate@scotland.gsi.gov.uk
web: www.historic-scotland.gov.uk

Scheme breaches

If you are inspected, an Inspection Form should be completed by the inspecting officer. Information on the management requirements for each management option/specifications for capital items appears in this guidance. Where a breach of any option is discovered at inspection, breach procedures will be invoked. Breaches include non-compliance with scheme rules and conditions, requests to withdraw from schemes and wrongful claims.

Penalties

We are awaiting approval of the legislation. Please see the website for the final detailed version of penalties.www.scotland.gov.uk/Topics/Rural/SRDP/Land-Managers-Options

The options can be separated into 2 distinct groups, with each group having different rules for carrying out the administrative and on the spot checks, and actions to be taken as a result of non-compliance with the conditions for granting support. The two groups are:

• Group 1: Rural development support for certain measures under Axis 2
• Group 2: Rural development support under Axis 1 and Axis 3 and remaining measures under Axis 2.

This table shows which penalty group each option is in and the requirements which must be met if you undertake these options. Agri-environment options are identified as in addition to cross compliance, you must comply with the minimum requirements for fertiliser and plant protection product use and the minimum requirement for protection of historic or archaeological features if you undertake these options.

Relationship with cross compliance

Options in Group 1 are subject to cross-compliance with the exception of Small scale woodland creation on non-agricultural land. Options in Group 2 are not subject to cross compliance with the exception of Business Audits.

If you do not comply with cross compliance, you may lose all or part of your payment. We may issue a warning letter for a negligent breach that has a small effect and that you can put right, but we can remove all subsidy for an intentional breach that has a permanent effect both on and off the farm. A detailed explanation of compliance inspections can be found at Cross Compliance notes for guidance details are available from your Area Office or our website www.scotland.gov.uk/ )

If you do not comply with the conditions for support under Land Managers Options the following rules for application of penalties will apply.

Penalties for overclaims under group 1

Area related breaches will have penalties applied according to the rules in Commission regulation 796/2004. These are similar to IACS penalties already applied to SAF schemes.

Breaches of Scheme rules

We will determine the reduction in payment to be applied, on the basis of the extent, severity, permanence and repetition of the breach that has occurred.

Minimum requirement for fertiliser and plant protection and protection of historic or archaeological features

If you are carrying out any agri-environment options, the same penalties as for Scheme breaches will apply.

Repayment

If you are paid money that you are not entitled to you will have to repay the full amount. If you have been overpaid because you have breached the scheme conditions, we will charge interest. This interest will be calculated from the date that you were notified of the overpayment until you repay the full amount, including the interest.

Release of Subsidy and Recipient Information

The Scottish Government is bound by the terms of the Data Protection Act 1998, the Freedom of Information (Scotland) Act 2002 and the Environmental Information (Scotland) Regulations 2004.

It is the policy of the Scottish Government to release information about the amounts of subsidy and the recipients of SAF schemes including the Single Farm Payments Scheme and the schemes under the Scotland Rural Development Programme. We will process personal data we receive in line with the Data Protection Act 1998

For the Land Managers Options, this means that we will release information on the number of options for which you have applied for aid and the amount of subsidy received . The information will also include your name and the geographic location.

We will protect other personal data we receive in line with the Data Protection Act 1998. We will use the data provided in the CAP subsidy application primarily for the purpose of processing the applications. However, personal data may also be used subject to the safeguards of the 1998 Act for purposes connected with:

• Administration of the Common Agricultural Policy;
• SRDP and other aid schemes;
• The production and safety of food;
• Management of land and other environmental controls;
• Provision of services to businesses;
• Animal health and welfare; and
• Occupational health and welfare.

Data may be passed (when necessary for these purposes) to other bodies. For example to the Scottish Environment Protection Agency ( SEPA) for environment and water monitoring purposes, or to local authorities for milk or health purposes. Data may also be used for statistical purposes, not identifying individuals, which may reduce the need for some statistical data collection. It may also be used when necessary to comply with the Freedom of Information Act or the Environmental Information Regulations noted previously.

Equality

The 2007-13 Scotland Rural Development Programme will comply with and, where appropriate, contribute to Community policy on equal opportunities for men and women and non-discrimination on grounds of gender, race or ethnicity, religion or belief, age, sexual orientation or disability, in accordance with Article 8 of Council Regulation ( EC) 1698/2005 and the Scotland Act 1998. The Scottish Government is committed to promoting equality of opportunity in all aspects of life.

Appeals and complaints

If you feel that we have made an incorrect decision in relation to your payment you may appeal under the EU Agriculture Subsidy appeals procedure.

If you wish to complain about our standard of service, procedures or processes you may do so using our complaints procedure.

The IACS explanatory guidance booklet provides more details about both these procedures .
http://www.scotland.gov.uk/topics/agriculture/grants/a-z/intro

Leal base

To undertake options under the Land Managers Options you must comply with the following regulations:

EC Regulation 1698/2005 (on support for rural development from the European Agriculture Guidance and Development Fund);
EC Regulation 1974/2006 (laying down detailed rules for the application of EC Regulation 1698/2005);
EC Regulation 1975/2006 (laying down the detailed rules for the implementation of EC Regulation 1698/2005 as regards control procedures and cross compliance);
EC Regulation 1782/2003 (common rules for support under the Common Agricultural Policy);
EC Regulation 795/2004 (rules implementing the single payment scheme); and EC Regulation 796/2004 (rules for the implementation of cross-compliance, modulation and IACS).

Inspections

What are the Regulatory Requirements?

Under Article 12 of the EC Implementing Regulation 1975/2006 there is a requirement that at least 5% of beneficiaries who have management commitments under the Scottish Rural Development Regulation ( SRDP) must be selected for an inspection each year. In addition, 5% of the value of capital expenditure must also be inspected.

The inspection system is designed to reduce the number of visits to any individual beneficiary. An inspection will involve verification of the undertakings of the beneficiary on the day of the inspection.

Cross Compliance checks will be carried out on 1% of all beneficiaries of agri-environment, animal welfare, first afforestation on agricultural land and forest-environment payments. The selection sample will be based on a cross compliance risk analysis.

In addition checks will be carried out on 1% of all beneficiaries of agri-environment payments to ensure they are complying with minimum requirements for fertiliser and plant protection product use plus the general environmental condition to protect the historic landscape.

How are Inspections Selected?

A percentage (approximately 1.25%) of beneficiaries are selected at random for an inspection in each year. The remainder (at least 5%) are selected by applying risk analysis criteria annually to applications. The risk analysis criteria for management options are as follows:

• Amount of Aid Involved.
• Findings from Previous Year
• Previous breaches in other RDR schemes are considered.
• Total Managed Area in Agreement.
• Changes from Previous Year.
• Numbers of Options on Application.
• A check will be performed on the total number of distinct operations.
• Other risk factors on a regional basis.

The risk analysis criteria for capital items will also select an appropriate mix of type and size of operations.

Manual/Targeted inspection selection

In addition to the above 5%, inspections can also be selected manually when breaches have been identified from processing of the application or by officials in the course of other inspections.

Potential breaches of LMO might be notified to the Scottish Government Rural Payments and Inspections Directorate ( SGRPID) and other competent authorities. If the notification is in writing from an identifiable source it must be investigated and will be selected for a manual inspection. This is in line with procedures followed for other schemes, in particular Single Application Form ( SAF) related schemes.

Notice of Inspection

It is a requirement of the EC legislation that inspections should normally be unannounced. If announced visits are carried out, notice should be limited to the minimum period necessary and only in very limited circumstances should the notice exceed 48 hours. Full reasons for any notice given must be recorded on the inspection report, by the inspector.

It is regarded as good practice to record the date and time that initial contact is made with the beneficiary. Notice periods as required by the Legislation:

0 - 3 hours notice - recorded as unannounced
3 - 24 hours notice
24 - 48 hours notice
over 48 hours

Note - notice given should reflect time lapsed between notification and start of inspection including weekends and public holidays etc.

Timing of inspections

Inspections should be carried out at a time of year which will cover the most representative commitments and obligations of the measures to be checked. For example, Summer Grazing of Cattle where participants are required to graze cattle on the hill from 1 ^st June for at least 3 months may determine the timing of the single 'overarching' inspection.

Who should complete an Inspection?

There should be a clear separation of duties between the person who captured any application relating to the inspection and the officer who later carries out the inspection. This is to satisfy auditors that there could be no collusion between beneficiary and official. Principal Agricultural Officers ( PAOs) will decide on a local basis which grade of officer and individual should undertake the inspections.

Pre-inspection office procedures

Prior to inspection, Inspecting Officers will confirm that all data capture, validation and administrative checks have been completed and any difficulties identified will be resolved at inspection.

Prior to leaving the office the inspectors should ensure they have the following:

• The inspection pack - pre printed inspection report form.
• Set of flash cards. These are an aide memoir of the requirements for each measure.
• Cross Compliance Inspection Questionnaire for completion and recording of any obvious breaches of the Statutory Management Requirements ( SMRs) or Good Agricultural and Environmental Conditions ( GAEC) which are noted during the inspection.
• Pesticide Proforma - application of Plant Protection Products.
• A copy of the Land Managers Options ( LMO) technical guidance. Inspectors should be familiar with the contents of this guidance, as it is central to the inspection procedure.
• Officers may wish to take a digital camera for recording images of good practice and any breaches.

On-farm inspection procedures

These on the spot inspections should be unannounced and cover all the agricultural parcels and obligations covered by the beneficiary's agreements and claims.

These general procedures should be followed for all inspections carried out by SGRPID staff.

• Explanation/Introduction - The inspecting officer will provide the scheme(s) participant (if available) with a clear explanation of why he/she is there, the format of the inspection, the undertakings to be checked and what supporting documentation will be required.
• Length of time of the inspection - The inspecting officer will give an indication of how long the inspection will take, although this will to some degree be dependent on his/her findings.
• Biosecurity and Health and Safety aspects - inspectors should ensure that all disinfection, biosecurity (check for isolation areas) and Health and Safety procedures are properly observed throughout the farm visit.
• Managed areas will be inspected to ensure the requirements are being met for each of the options. For example grazing dates, correct areas sown/managed.
• Capital works - The inspector will ensure the work has been completed to any specified standards, the item appears to be technically sound, the claimed costs are justified and the item is being used for the purpose for which it was funded. For example - Nutrient Management Plan - the inspector will look at the Plan to ensure it has been prepared to an acceptable standard or completed by a competent advisor. Invoices will be checked at the submission of the claim.

On completion of the inspection the beneficiary will be given a summary of the main inspection findings and any potential implications for payments. He/she will also be given the opportunity to provide written comments and to sign the inspection report form.

If a problem is identified, it may not always be possible on the day of the inspection to work out the precise implications of all findings. In such cases, the beneficiary will be sent a detailed explanation in writing as soon as possible - outlining Scheme breach procedures and remedial actions to be undertaken.

Area Re-measurements

If a managed area is re-measured using precision equipment, for example, Global Positioning System ( GPS), and/or during Field Identification System ( FIS) mapping, and is found to be greater or less than the area declared in the LMO application, the declared area will be corrected through the inspection program to the found area of the site. This will allow future management payments to be calculated using the correct area. Provided precision re-mapping is the reason for the change in area and we are satisfied that there has been no attempt to defraud, no retrospective action will be taken. Any management option width, area and/or financial limits must still be applied.

Photographic Records

Photographs should be used to provide a visual indication of the landscape appearance and, where relevant, the vegetation and condition of sites subject to management under the Land Managers Options.

Landscape photographs will be long distance shots or panoramas of the whole unit and should if possible include some identifying feature. More detailed records will be close-up photographs which, if possible, should be tied in to specific reference points to make subsequent photographs of the same spot or area possible.

Photos of value will either be:

• Stored electronically and a reference put on file or
• Mounted on cards, inserted into transparent envelopes and retained in the file.

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