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Part-financed by the European Union
WS 4: Financial issues
Joint Technical Secretariat
Lead Applicant SeminarHamburg, 2-4 April 2008
2Lead Applicant Seminar, Hamburg, 2-4 April 2008
AGENDA
1
2
Questions& Answers
It’s your turn
Financial resources
& budget lines
Special financial issues
& financial control
Questions& Answers
It’s your turn
(45 min.)
(45 min.)
Part-financed by the European Union
WS4: Financial issues – BLOCK 1
Dana HenningsJoint Technical Secretariat
Lead Applicant SeminarHamburg, 2-4 April 2008
4Lead Applicant Seminar, Hamburg, 2-4 April 2008
Content
1) Financial resources
2) Budget lines
3) Questions & Answers
4) It’s your turn
5Lead Applicant Seminar, Hamburg, 2-4 April 2008
Content
1) Financial resources
2) Budget lines
3) Questions & Answers
4) It’s your turn
6Lead Applicant Seminar, Hamburg, 2-4 April 2008
A project’s financial resources
TO
TA
L P
RO
JEC
T B
UD
GET
ERDF budget
ERDF co-financing
(50%, 75%, 85%)
ERDF partner’s contribution
(50%, 25%, 15%)
Norwegian budget
Norwegian co-financing
(50%)
Norwegian partner’s contribution
(50%)
ENPI budget
ENPI co-financing
(90%)
ENPI partner’s contribution
(10%)
More details: Working Session 2 “Partnership and work plan”
7Lead Applicant Seminar, Hamburg, 2-4 April 2008
Content
1) Financial resources
2) Budget lines
3) Questions & Answers
4) It’s your turn
8Lead Applicant Seminar, Hamburg, 2-4 April 2008
Budget lines
BL1 – Personnel
BL2 – External services
BL3 – Travel and accommodation
BL4 – Equipment and investment
BL5 – Other direct costs
Budget flexibility rule
9Lead Applicant Seminar, Hamburg, 2-4 April 2008
Budget lines
10Lead Applicant Seminar, Hamburg, 2-4 April 2008
Budget lines
BL1 – Personnel
BL2 – External services
BL3 – Travel and accommodation
BL4 – Equipment and investment
BL5 – Other direct costs
Budget flexibility rule
11Lead Applicant Seminar, Hamburg, 2-4 April 2008
BL1 – Personnel
• Personnel costs of project staff
– Directly employed by project partners listed in the application form
– Basis: employment/labour contract
– Carrying out project activities
– Gross salary + employer’s obligatory contributions
• NON-ELIGIBLE
– Any voluntary remuneration and employer contribution
– Administration costs
12Lead Applicant Seminar, Hamburg, 2-4 April 2008
BL1 – Personnel
• Unpaid voluntary work
– Written agreement
– Carrying out project activities
– No remuneration at all
– Limit: project partner’s contribution (10%, 15%, 25%, 50%)
• NON-ELIGIBLE
– Unpaid voluntary work of project partner’s own staff
13Lead Applicant Seminar, Hamburg, 2-4 April 2008
BL1 – Personnel
14Lead Applicant Seminar, Hamburg, 2-4 April 2008
Budget lines
BL1 – Personnel
BL2 – External services
BL3 – Travel and accommodation
BL4 – Equipment and investment
BL5 – Other direct costs
Budget flexibility rule
15Lead Applicant Seminar, Hamburg, 2-4 April 2008
BL2 – External services
• Expenses paid by project partners to external providers
External = not employed by project partner institutions
• Basis:
– Contracts of work, supply contracts, service contracts
– Invoices/requests for reimbursement.
• Public procurement!
• NON-ELIGIBLE
– Contracting between project partners
16Lead Applicant Seminar, Hamburg, 2-4 April 2008
Be clear and precise!
17Lead Applicant Seminar, Hamburg, 2-4 April 2008
Budget lines
BL1 – Personnel
BL2 – External services
BL3 – Travel and accommodation
BL4 – Equipment and investment
BL5 – Other direct costs
Budget flexibility rule
18Lead Applicant Seminar, Hamburg, 2-4 April 2008
BL3 – Travel and accommodation
• Travel and accommodation + subsistence allowances
• Essential for project activities
• Most economic way of transport
• Observe national and organisation internal rules!
• Prior approval of travels outside the programme area and the EU!
19Lead Applicant Seminar, Hamburg, 2-4 April 2008
Budget lines
BL1 – Personnel
BL2 – External services
BL3 – Travel and accommodation
BL4 – Equipment and investment
BL5 – Other direct costs
Budget flexibility rule
20Lead Applicant Seminar, Hamburg, 2-4 April 2008
BL4 – Equipment and investment
EQUIPMENT
• Tool/device to carry out project activities
• Not used by project target group after completion of activities
• Depreciation costs only!
INVESTMENT
• Result of project activities
• Used by project target group after completion of activities
• Full costs
More details: Plenary session!
21Lead Applicant Seminar, Hamburg, 2-4 April 2008
22Lead Applicant Seminar, Hamburg, 2-4 April 2008
23Lead Applicant Seminar, Hamburg, 2-4 April 2008
BL4 – Equipment and investment
• Group your equipment!:
– Office equipment: day-to-day management
– Multimedia equipment: interactive
– Measurement, research & laboratory equipment
– Others: Please specify!
24Lead Applicant Seminar, Hamburg, 2-4 April 2008
Budget lines
BL1 – Personnel
BL2 – External services
BL3 – Travel and accommodation
BL4 – Equipment and investment
BL5 – Other direct costs
Budget flexibility rule
25Lead Applicant Seminar, Hamburg, 2-4 April 2008
BL5 – Other direct costs
• ELIGIBLE
– Transnational transfer charges and bank charges
– Participation fees for external events
– Direct office running costs
• NON-ELIGIBLE
– Overheads!
– Any general costs allocated on a percentage or pro rata basis
– Debit interest and exchange rate losses
• Other expenses
– essential for project implementation
– exist because of the project
– supported by invoices directly attributable to the project/project staff
26Lead Applicant Seminar, Hamburg, 2-4 April 2008
Budget lines
BL1 – Personnel
BL2 – External services
BL3 – Travel and accommodation
BL4 – Equipment and investment
BL5 – Other direct costs
Budget flexibility rule
27Lead Applicant Seminar, Hamburg, 2-4 April 2008
Budget flexibility rule
BL1 BL2 BL3 BL4 BL5 Total
WP1 Flexibility
WP2 Flexibility
WPn Flexibility
Total Flexibility Flexibility Flexibility Flexibility Flexibility Total budget
Reallocated amount (cumulated since project start) ≤ 20% or 40,000 EUR, whichever is higher
• NOT POSSIBLE
– Changes of equipment/investment items
– Changes between project partners’ budgets
28Lead Applicant Seminar, Hamburg, 2-4 April 2008
Any questions?
29Lead Applicant Seminar, Hamburg, 2-4 April 2008
It’s your turn
Part-financed by the European Union
WS4: Financial issues – BLOCK 2
Václav KaplanJoint Technical Secretariat
Lead Applicant SeminarHamburg, 2-4 April 2008
31Lead Applicant Seminar, Hamburg, 2-4 April 2008
Content
1) Time dimension
2) Horizontal rules
3) Control system
4) Questions & Answers
5) It’s your turn
32Lead Applicant Seminar, Hamburg, 2-4 April 2008
Content
1) Time dimension
2) Horizontal rules
3) Control system
4) Questions & Answers
5) It’s your turn
33Lead Applicant Seminar, Hamburg, 2-4 April 2008
Project phases (1st call)
Preparation Contracting Implementation Closure Post-project
~ 17 months 3 months see application form 3 months
No costs can be reported
Limitations in BLs or WPs
-> Preparations costs BL 1-3/WP 0 only -> Closure costs WP 1 only
Eligible costs can be reported in all BLs and WPs
31/05/2007MC decision
(~ October 2008) 31/12/2025
34Lead Applicant Seminar, Hamburg, 2-4 April 2008
Preparation phase
• From: 1 year before the call closure (31 May 2007)
To: MC decision date (expected end October 2008)
• Only personnel (BL1), external services (BL2) and travel & accommodation (BL3) in the Work Package 0
• Max. 50,000 EUR or 2% of the project budget, whichever is lower
• PPs eligible for ERDF/Norwegian co-financing
• For approved projects
35Lead Applicant Seminar, Hamburg, 2-4 April 2008
Contracting & Implementation phase
• Contracting phase:3 months starting from day after MC decision date
• Implementation phase:duration 12-36 months according the application form
• All BLs and WPs in both phases
• Thematic & management activities
36Lead Applicant Seminar, Hamburg, 2-4 April 2008
Closing phase
• 3 months after the end of project implementation phase
• All BLs in WP 1
• Costs related to the preparation of the final report/auditing
• Costs will be reported together with the last reporting period
• Last date of eligibility = Due date for submission of the final report
Post-Project phase
• No costs eligible
37Lead Applicant Seminar, Hamburg, 2-4 April 2008
Spending plan & De-commitment
• ERDF information basis for eventual de-commitment
• Norwegian/ENPI information for assessment only
TOTAL: 0.00
Total expenditure per reporting period
0.00 0.00 0.00 0.00 0.00 0.00 0.00
ENPI
ERDF
Reportingperiod 1
Reportingperiod 2
Reportingperiod 3
Reportingperiod 4
Reportingperiod 6
month 1-6 month 7-12 month 13-18 month 19-24Expenditure co-financed from:
Project implementation and closure expenditure
month 31-36
Reportingperiod 5Preparation
expenditure month 25-30
Norwegian
38Lead Applicant Seminar, Hamburg, 2-4 April 2008
Spending plan & De-commitment
• Basis for quality assessment
• Basis for eventual budget cuts in case of significant under-spending
SPENDING PLAN MUST BE REALISTIC & LINKED TO WORK PLAN
39Lead Applicant Seminar, Hamburg, 2-4 April 2008
Spending plan & De-commitment
Average project spending in IIIB (% of total budget)
=> ENABLE QUICK START
Year 1 Year 2 Year 3 Year 4 Total
Planned requests 31.0% 39.0% 30.0% 0.0% 100.0%
Real requests 21.0% 30.0% 32.0% 9.0% 92.0%
40Lead Applicant Seminar, Hamburg, 2-4 April 2008
Content
1) Time dimension
2) Horizontal rules
3) Control system
4) Questions & Answers
5) It’s your turn
41Lead Applicant Seminar, Hamburg, 2-4 April 2008
“10% Flexibility rule”
Costs paid outside EU eligible only if :
• benefit EU MSs of the programme area
• do not exceed 10% of the ERDF co-financing
• are approved by MC (application form, pt. 3.10.2.) or by MA in advance
• Concerns ERDF funds only
• Do not confuse it with 20% rule ( covered in WS Partnership)
42Lead Applicant Seminar, Hamburg, 2-4 April 2008
Value Added Tax (VAT)
• Recoverable VAT is not eligible
=> Partners who can get VAT refunded/offset by tax authorities have to plan their budgets without
VAT
• IMPORTANT: VAT status of partners must be declared => in the application form & => in the Partner declaration
43Lead Applicant Seminar, Hamburg, 2-4 April 2008
Other financial charges
• Financial charges e.g. for transnational transactions, bank accounts of project or where required guarantees are eligible
• Debit interests, exchange rate loses are NOT eligible
44Lead Applicant Seminar, Hamburg, 2-4 April 2008
Revenues & interests generated by projects
• Revenues
Example: Selling of project outputs, conference fees…
• Interests (and equivalent benefits) generated by ENPI co-financing
reduce the eligible expenditure
45Lead Applicant Seminar, Hamburg, 2-4 April 2008
Cost sharing
• Pro rata allocation of expenditure to at least 2 partners
• Plan carefully => Prepare a written agreement on shared costs => Include partner shares in the partner budgets
• Indicate it in the application form
1 2 3 4 5 6 71
Value of the contract
Project co-ordination 100,000.00
1
External service corresponding WP Cost sharing
Contracting partner
46Lead Applicant Seminar, Hamburg, 2-4 April 2008
Further points for consideration
• Total budget - project duration/scope/complexity of activities/partnership
• Detailed budget (per BL & WP) - Activities
• Ratio “WP1/total budget”
• Ratio “equipment/total budget”
• External services/equipment/investments
47Lead Applicant Seminar, Hamburg, 2-4 April 2008
Content
1) Time dimension
2) Horizontal rules
3) Control system
4) Questions & Answers
5) It’s your turn
48Lead Applicant Seminar, Hamburg, 2-4 April 2008
Control system
Other controls EU and national audit bodies, JTS, MA, CA, AA …
Second level audit(selected samples of projects)
Audit Authority (AA) & Group of Auditors (GoA)/
ENPI: External auditor
First level control(Validation/verification at PP and LP level)
ENPI: First level controller to confirmed by
MS/MA
49Lead Applicant Seminar, Hamburg, 2-4 April 2008
Country-specific control requirements (ERDF/Norway)
• Organisation of the control = responsibility of MS/Norway
• Main types of systems
– Centralized system: Estonia, Latvia, Lithuania, Poland, Sweden
– Decentralized system: Finland, Germany, Norway
– Mixed system: Denmark
50Lead Applicant Seminar, Hamburg, 2-4 April 2008
ENPI control requirements
• First level controller contracted by the Lead Partner, in exceptional cases by the project partner
• Selection has to be confirmed by MA
• Internationally recognized supervisory body for statutory auditing & member of IFAC
51Lead Applicant Seminar, Hamburg, 2-4 April 2008
Do the project partners pay the First Level Controller?
GER DK EST FIN LT LV NOR PL SWE
Yes Yes No Yes Yes No Yes No No
• ERDF: Depends on the national system
• ENPI: Yes
52Lead Applicant Seminar, Hamburg, 2-4 April 2008
Any questions?
53Lead Applicant Seminar, Hamburg, 2-4 April 2008
It’s your turn
54Lead Applicant Seminar, Hamburg, 2-4 April 2008
Further information
•Operational programme
•Programme Manual
•Programme website (eu.baltic.net)
•Joint Technical Secretariat
Part-financed by the European Union
WS4: Financial issues
Dana Hennings & Václav KaplanFinancial Managers, Joint Technical Secretariat
Phone: +49 381 45 484 5271/-5290email: [email protected], [email protected]
eu.baltic.net