How to manage interest for late payment in CRIS?

Transcription

1 How to manage interest for late payment in CRIS? 1. General Information Rate applicable for the calculation of interest How to pay late payment interest in CRIS Under the General Budget Availability of funds Payment of late interest Through the contract itself Through a dummy contract for Late payment interests Under the EDF Availability of funds Payment of late interest... 13

2 Please note that this procedure is applicable to the external actions financed under DEVCO s programmes! 1. General Information Within the framework of EU development aid actions, any contractor or grant beneficiary is entitled to be paid a default interest from the European Commission if his invoices have not been paid within the time limits. Exception: the payment of late payment interest does not concern government departments or public bodies of Member States and the budget support operations! The default interest is calculated for the delay period: the interval between the day following the legal date for payment and the date on which the late payment is made. The payment of late interest is done either: automatically, only where the contracting authority is the European Commission and the amount of the interest to pay is higher than 200 EUR, without a request from the contractor or grant beneficiary or in all the other cases (when the EC is not the contractor authority) and when the interest amount is less than 200 EUR, it is paid to the contractor or grant beneficiary only upon request made within two months of receiving the late payment. 2. Rate applicable for the calculation of interest Unless established otherwise in the related contract, the interest rate is calculated pro rata to the number of days of delay rate that depends on: the contract type the currency of the contract the Financial Regulation applicable to the related contract, as explained in the summarizing table below:

3 Rule Applicable Regulation Contract Type Explanation Applies only to Contract signed before contracts signed FR2007 1/1/2008, interest All before 2008; interests FREDF<11 paid on demand only are paid only on demand Excluded Member No interest is due by All All state Member States Excluded Other All All No interest is due, for other reasons Specific to contract All All The interest due is specified at the contract level Invoices in EURO ECB* + 7 ECB + 8 ECB LCB** + 7 LCB + 8 LCB * European Central Bank interest rate ** Local central bank interest rate FR2007 FR-MIX FRFEDF<11 FR2012 FREDF11 FREDFMIX All FR2007 FR-MIX FRFEDF<11 FR2012 FREDF11 FREDFMIX All Invoices in local currency Services Supplies Services Supplies Works Grants Services Supplies Services Supplies Works Grants European Central Bank interest rate + 7 points European Central Bank interest rate + 8 points European Central Bank interest rate points Local central bank interest rate + 7 points Local central bank interest rate + 8 points Local central bank interest rate points 3. How to pay late payment interest in CRIS All information needed for the calculation of late interest is retrieved in the Follow-up tab of each invoice. In each invoice, GESTFIN has to update the necessary information to the (potential) automatic calculation of late interest.

4 The time limits for the late interest payments are those of the original invoice. If there was suspension of the time for payment, all calculation details of the new due date are to be found in the Stop/Suspensions tab of the invoice. The estimated amount of the interest to pay in case of late payment can be followed up in two ways: Through the Datawarehouse report INVL04A Follow up of payment delays, available in the Corporate categories folder of Data Warehouse. This report allows you to follow the payment delays of your invoices and the estimated amount of interest to pay in case of late payment. By comparing the Bank value date with the Estimated due date counting ongoing suspensions, information available in the Follow-up of the original invoice, once the invoice is finalized (status CL) and the payment executed. In the table below you will find all necessary information in the original invoice that will allow you to double-check the amount of the interest to pay: Bank value date versus Where to find information for the late interest calculation? Estimated due date counting ongoing suspensions (FOLLOW UP tab) automatically calculated

5 Interest Rate to apply? (FOLLOW UP tab) updated by GESTFIN in the original invoice Time limits of the original invoice? (GENERAL INFO tab) shall also apply to late interest payment Suspension of the time limits for payment? (STOP/SUSPENSIONS tab) consult eventual suspension periods 3.1 Under the General Budget Availability of funds For invoices under the General Budget, the necessary funds for the late interest payments can be booked on:

6 a. The contract itself of the original invoice, provided there are sufficient funds on the contract and that the Final Date for implementation is not expired for more than 6 months. If this is not the case, a rider increasing the contract funds by an amount corresponding to the late payment interest will have to be initiated and finalized, provided that there are such funds on the related decision. If the FDI is expired for more than 6 months, it must be also extended via the rider (if possible), provided that the End date of operational implementation period (LMO) of the related decision is still ongoing. b. A dummy contract especially created for payment of late interest. This contract must be created if no funds are left neither on the contract nor on the related decision (no further funds can be added and the FDI of the contract can no longer be extended). The dummy contract must be recorded in CRIS as an implementation contract (ME) with an IT (Late interest payment) nature, and an EN (Individual Normal) budget commitment type Payment of late interest After making sure that the funds for the late interest payment are available, proceed with the payment as follows: Through the contract itself Interests can be paid in a FAC CC invoice (Cost Claim on a Grant contract SV type) or FAC CI invoice (Commercial invoice on an Implementation Contract ME type). The late payment interest can be paid: 1 st case: In a separate invoice for the amount of the interest to pay only, if there is no other payment left to be done on the contract: in our example below, we will pay only 200 EURO of interest. 2 nd case: together with another payment request from the beneficiary: in the example below, we will pay 300 EURO as requested by a new invoice, and further 200 EURO of interest of a previous overdue invoice. Step 1: Create a new invoice: General information Create a new invoice by following the usual procedure in CRIS. 1 st case: if the invoice pays only the interest amount, the Claimed amount (invoice) is 0 and the Gross amount is the amount of late interest to pay.

7 2 nd case: if the payment of interest is done with a new invoice from the beneficiary, the Claimed amount (invoice) is the amount requested on the invoice and Gross amount is the amount requested from the contractor + the amount of the interest to pay: Step 2: Fill in the Allocations 1 st case: If the invoice pays only interest, the interest to pay amount must not be allocated to the contract: the Allocations of the invoice must be left 0. 2 nd case: If the payment of interest is done with another invoice, then enter the amount to pay requested by the contractor, but not the amount of the interest to pay: After the invoice finalisation, a line is created automatically in the Allocations, with the amount of the interest to pay:

8 Step 3: Financial Breakdown 1 st case: In the Financial Breakdown, CRIS displays by default a Budget allocation. In an invoice paying only interest, click on the Delete button to remove the Budget allocation type. 2 1 Then click on the Interest to pay - allocation button This amount of interest to pay must be booked on the same budget line as the project for which the late payment interest and should be made preferably from the C1 appropriations of the budget line.

9 2. The budget management type information is imported from the contract (1). 3. The GL sub-type must be FINCH (Financial charges) and the only GL account proposed is (2). 4. As soon as the GL information is filled in, a new field is displayed: ABAC Payment ref: the user must enter the ABAC reference of the overdue payment (the invoice on which interest accrued (3). 5. In the Amounts table (4), enter the amount of the interest to pay. 2 nd case: In an invoice paying, besides paying the interest, an amount requested by the beneficiary, the Financial Breakdown should include: - a Budget allocation with the amount to pay requested by the contractor (1) - an Interest to pay line with the amount of the interest to pay (2), as shown below: 1 2

10 Step 4: Finalise the invoice (all visas must be given, ORDO visa in ABAC included) After the invoice was finalized (all visas were given), the amount of the interest to pay is displayed in the Analytical breakdown of the contract, in the Interest to pay column: Through a dummy contract for Late payment interests Step 1: Create a new contract for that purpose, with the following features: Type: ME-Implementation Nature: IT-Late Payment Interest Applicable regulation: it must be identical with the regulation applicable to the contract on which late payment interest will be paid Related contract reference number: Indicate here the year and number of the contract on which the default interest was generated. The format must be YYYY/NNNNNN where Y is the year and N is the contract number. Commitment type (budgetary): EN (Individual Normal), no decision needed Award procedure type: leave empty Analytical Breakdown: Total amount not broken down and marked as Allocable

11 Step 2: Create a new INVOICE 1. As this is an implementation contract, you can only create a FAC-CI (commercial) for the late payment interest. 2. In the Allocations, the amount must be left 0.

12 3. In the Financial Breakdown: select an Interest to pay line and proceed as explained in section for the case no The payment should be made preferably from the C4 or C5 appropriations of the budget line. This commitment must be booked to the same budget line as the project for which the late payment interest is due Under the EDF For late payment interests related to invoices concerning actions financed by the EDF, it is not possible to add the amount of the interest to be paid directly in a subsequent invoice. Late payment interest due by the Commission is booked on dedicated commitments, managed by Headquarters: separate CRIS decision and CRIS contracts created for this purpose, called "interests of the EDF". Where a delay on an invoice payment is the responsibility of the European Commission, the Head of Delegation or the responsible Authorising Officer by sub-delegation addresses a payment request to the relevant Finance, Contracts & Audit unit at the Headquarters Availability of funds Claims for delayed payments must be borne by the ACP State(s) concerned and by the European Commission, each assuming the proportion for which they are responsible. Step 1: The Finance, Contracts and Audit section of the delegation contacts the relevant Finance, Contracts & Audit unit at the Headquarters to let them know that a Beneficiary is requesting late interest payment. The delegation will insure that all the relevant documents are available in CRIS, in order to verify the correctness of the amount to be paid and of the payment procedure. Step 2: The relevant Finance, Contracts & Audit unit at the Headquarters will request colleagues with operational profiles in CRIS (e.g. the Audit Section) to create a new RIDER on one of the Dedicated Commitments for late interest payment in order to modify the LEF/BAF with the contractor's / beneficiary's data. For the time being, funds are committed to this purpose on CRIS Decision Under this CRIS Decision, three CRIS implementation contracts (type ME/nature IT) are currently ongoing created for late interest payment: , and

13 Payment of late interest The relevant Finance, Contracts & Audit unit at the Headquarters creates a FAC-CI in order to pay the late interest to the beneficiary. This is treated in CRIS as a normal EDF invoice. In the General information, the Claimed amount (invoice) and Gross amount are identical, corresponding to the late interest amount: In the Allocations, the amount is allocated to the allocable rubric of the contract: As usual, in the Financial Breakdown for the EDF, the amount is paid via a Budget allocation type: