FP7 Financial Issues (March 2007)

Training Session CPN-YAS-PRD Financial Issues Ingrid Zwoch National Contact Point Lifesciences Tel. +49 (0)228 3821 690 Fax +49 (0)228 3821 699 [email_address]

Where would you find information on costs Rules for Participation Financial Guidelines (not yet published) Core grant agreement Standard with specifics of project Annex I Technical tasks - the “project” Annex II General Conditions of the contract

Financing: costs New principles : 1 - No more cost categories 2 – To be eligible costs must be : actual, economic and necessary for the project incurred during the duration of the project (exception: costs of the final reports) recorded in the accounts (or third parties) and must exclude indirect taxes, duties, interests, costs reimbursed in respect of another Community project, and not give rise to profit 3 - Presented in Annex I Eg of potential eligible costs: pg 144 FP6 financial guidelines

Financing: Costs Eligible Costs Non-Eligible Costs

Eligible Costs Typical Direct Costs personnel (salaries and related costs) durable equipment (depreciation) consumables travel and subsistence other project specific costs

Eligible Costs Direct Costs identified by the beneficiary in accordance with its accounting system, and can be attributed directly to the project personnel costs – actual hours worked (hired by the beneficiary in accordance with its national legislation – be under the sole supervision of the latter – and be remunerated in accordance with the normal practices of the beneficiary)

Eligible Costs Typical Indirect Costs (Overhead) depreciation of buildings depreciation of equipment / infrastructure maintaining buildings administration (institution) cleaning heating electricity…..water….

Eligible Costs Indirect Costs which cannot be identified by the beneficiary as beeing directly attributed to the project but which can be identified and justified by its accounting system as being incurred in direct relationship with the eligible direct costs attributed to the project Real indirect costs (certified methodology) Flat rate (20 % / 60 %) in all grant agreements of the beneficiary

Non-Eligible Costs identifiable indirect taxes (incl. VAT) duties interest owed provisions for future losses or charges exchange losses, cost related to return on capital costs declared or incurred or reimbursed in respect of another Community project debt and debt service charges excessive or reckless expenditure

Accounting Principle Book Keeping System is proving the direct and indirect costs - de facto (in Euro) Calculating and proving the direct costs (in Euro) and calculating the indirect costs as a flat rate (percentage of the direct costs – excl. subcontracts)

Indirect Costs as a Flat Rate Typically – those who choose the “flat-rate-version” may charge 20 % of the direct costs – excluding subcontracts Exceptions for public research institutions and SMEs: Calculating and proving the direct costs (in Euro) Calculating the indirect costs as a flat rate up to 60 % of the direct costs (subcontracts excluded)

Community Contribution Overhead Rate accepted is dependent on the type of funding scheme Collaborative Project Network of Excellence Specific Support Action / Coordination Action (max. 7 % of direct costs excluding subcontracts)

Maximum Community Contribution Is dependent on the type of activity Research Demonstration Training Management Networking specific support activities and….

Maximum Community Contribution Is dependent on the type of institution public+SME / others Research 75 % / 50 % Demonstration 50 % / 50 % Training 100 % / 100 % Management Consortium 100 % / 100 % other specific activities 100 % / 100 %

Maximum Community Contribution Is dependent on the type of participation Partner Subcontractor (receives 100 % from the Partner with whom he has concluded the subcontract)

Subcontracting Contractors shall ensure that the work to be performed can be carried out by them. Exception : where it is necessary to subcontract certain elements of the work, this should be clearly identified in Annex I. Minor services may be subcontracted: which do not represent core elements of the project which cannot be directly assumed by contractors where necessary for the implementation of the project

Financing: receipts Three kinds of receipts must be taken into consideration in order to avoid any possibility of profit: Financial transfers or their equivalent to the contractor from third parties ; Contributions in kind from third parties; Income generated by the project. In the first two cases (financial transfers or contributions in kind), these endowments are considered as receipts of the project if the third party has provided them specifically to be used in the project . FP6 Financial Guidelines p. 66

Financing: audit certificates each contractor shall provide an audit certificate prepared and certified by an external auditor ( for public bodies - competent public officer) to transform a pre-financing into a payment Based on the reporting periodicity of the contract (Art. 7.2) Audit certificate costs have to be claimed as management costs in subcontracting

Reporting periodicity Reports and deliverables (pg 88 FP6 financial guidelines) The consortium will submit the following reports to the Commission: (within 45 days after the end of each reporting period) a periodic activity report a periodic management report a report on the financial distribution between contractors any other report required by Annexes to Contract an audit certificate (certification of costs incurred in corresponding period) + Form C

Reports Submission Reports must be provided both electronically and - the originals - by registered mail with acknowledgement of receipt (fifth paragraph of article II.7 of Annex II (General conditions) to the FP6 model contract) The date of arrival of the originals is deemed to be the official date of reception .

Payment modalities Pre-financing (start) Periodic payment Periodic pre-financing (based on the applicable reporting periodicity) The Community financial contribution is paid to the coordinator : the consortium decides on its allocation between the contractors (consortium agreement)

Exchange Rates Losses have to be covered by the participant concerned Check for specifications Account for Euro

FP7 Financial Issues (March 2007)

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