Coordinators' day on ICT PSP project management Financial Issues, Reporting, payments, cost claims and Certification Modalities

Transcription

1 Coordinators' day on ICT PSP project management Financial Issues, Reporting, payments, cost claims and Certification Modalities Ann Van Menxel DG CNECT H6 Brussels, 17 December 2013

2 Legal references Reimbursement rates Eligible costs Non-eligible costs No Profit and receipt Reporting requirements Payment modalities Certification modalities Controls & audits Periodic reporting Thematic Networks How to avoid errors More information Overview

3 Legal references Art. 4 - Reporting periods Art. II.4 - Reporting obligations Art. II.5 - Approval of reports and deliverables, time-limit for payment Art. II.28 - Financial audits Art. II.29 - Technical review

4 Reimbursement rates Pilots BPN TN TN A & B Actual costs Lump sums 50% 80% Up to 100% Lump sums / scale of unit cost

5 Reimbursement Rates Lump-sum Thematic Networks Scale of Unit "Coordination costs" Lump sum "Implementation costs" Lump sum "Attendance of meetings costs" Coordinator per year and per beneficiary for the first 10 beneficiaries (incl. the coordinator) per year and per beneficiary from the 11 th beneficiary on No additional funding from the 21 st beneficiary on Costs for attendance of networks meetings and network related events are financed by a lump sum of per year per beneficiary Other beneficiaries per year per beneficiary

6 Reimbursement rates Lump-sum Thematic Networks Example

7 Eligible costs Actual Incurred by beneficiary During duration of project In accordance with applicable accounting standards and usual cost accounting practices Used for achieving objectives Comply with requirements of tax and social legislation Reasonable and justified and comply with requirements of sound financial management Necessary Recorded in accounts of beneficiary In indicative breakdown of budget

8 Direct costs Personnel Subcontracting Other specific direct costs Eligible costs Direct and indirect costs Indirect costs Not directly attributed but incurred in direct relationship Flat rates

9 Eligible costs Indirect costs Pilots BPN TN TN A&B Actual costs Lump sums Mandatory flat rate (30% of personnel) No indirect costs Mandatory flat rate of 7% No indirect costs

10 Employment status Eligible costs Personnel Under sole technical supervision and responsibility of beneficiary Remunerated in accordance with normal practices of beneficiary Directly hired or in-house consultants if following cumulative requirements are fulfilled: Contract to engage physical person Work under instructions of beneficiary Work in premises (except teleworking agreement) Cost in line with normal employment remuneration Remuneration is based on number of worked hours Output belongs to beneficiary

11 Eligible costs Personnel Time recording Person-based full time-recording system Per researcher/employee Allocating time to different activities No estimates Properly authorized

12 Eligible costs Personnel Productive hours Calculated using correct number of productive hours Standard number of productive hours for all employees OR Actual individual number of productive hours

13 Example of Productive hours calculation Total days in a year Eligible costs Personnel Productive hours & hourly rate 365 Less: Weekends -104 Subtotal 261 Less: Annual Holidays -21 Hourly rate= Total annual personnel costs Total annual productive hours Less: Statutory Holidays -15 Less: Illness & Others -15 Productive days per year 210 Hours per day 8 Productive hours per year 1680

14 Eligible Costs Personnel Average rate Only when special clause Actual costs Sufficient number of categories Methodology applied in fair manner

15 Eligible Costs Personnel SME owners Guidance documents - SME owners and natural persons without a salary: hourly rate calculation tool SME Owners and Natural Persons without a salary Calculation of the hourly rate applicable to FP7 projects Version 1 (04/05/2011) DATA OF THE SME OWNER OR NATURAL PERSON Researcher category: Country of residence: Year of publication of the call: Experienced researchers (more than 10 years experience) Belgium 2011 Click and select Hourly rate = Annual Allowance / Productive hours * Correction Coefficient / 100 Hourly Rate Hourly rate = , ,00 100,00 / 100 If the resulting hourly rate is 0, please contact the Commission via the enquiry service link below 55,56 You have doubts? Contact the Research Enquiry Service at: Find the People Work Programmes at:

16 Eligible Costs Third parties Subcontracting Award, Tasks concerned and estimation of costs must be indicated in Annex I Limited part of the work Awarded according to best value for money, transparency and equal treatment Invoices must have reference to project and provide details of service or supply External support services for minor tasks Specific tasks of coordinator may not be subcontracted, but Special condition Pilots Type A: subcontracting of administrative tasks of coordinator Special condition on third party bank account case of entities with authorisation to administer only if coordinator public body or secondary and higher education establishment restrictive use

17 Third parties Carrying out work and claiming costs For Pilot A EEIG Composed of several legal entities Delegated power to a national administration/public body Other instruments Only EEIG

18 Third parties Carrying out work and claiming costs In Annex I: Legal name third party Estimated budget of resources made available Tasks carried out by third party Option 1 (in GA): NEF (PIC) Estimated eligible costs Annex I Option 2: only in Annex I, but legal existence verified

19 Third parties Carrying out work and claiming costs Option 1: Beneficiary provides also for third party: Individual financial statements Certificate of financial statements Summary financial statement consolidating costs both for beneficiary and its members Option 2: Beneficiary: Identifies costs incurred by himself and by each third party Certifies in his certificate of financial statement that costs claimed and receipts declared by himself and third party meet conditions of grant agreement

20 Eligible Costs Other Travel and subsistence Durable equipment (depreciated) Consumables

21 Indirect taxes and duties, including VAT* Provisions for possible future losses or charges Provisions for doubtful debts Unnecessary or ill-considered expenses Costs of capital employed Interests owned Exchange losses Resources made available to a beneficiary free of charge Value of contributions in kind Non-Eligible costs Marketing, sales and distribution costs for products and services Entertainment or hospitality expenses** Any cost incurred or reimbursed in respect of, in particular, another Community, international or national project * Unless the beneficiary can show that it is unable to recover it ** Except reasonable expenses accepted by the Commission as being absolutely

22 No-profit and receipt Art. II.25.3: The Community contribution may not give rise to any profit for any beneficiary. For each beneficiary, the Community contribution may not exceed the total costs minus the receipts of the project

23 Receipts Resources made available by third parties by means of financial transfers or contributions in kind which are free of charge: if contributed specifically to be used on projects Income generated by the project: when generated by actions undertaken in carrying out the project and from the sale of assets purchased under the grant agreement To be declared at each reporting period by each participant to be accounted for at the end of the project (no-profit!)

24 Reporting requirements During the project Periodic report Within 60 days (progress report, financial statements, use of resources) Reporting periods fixed in core agreement (usually 12 months) Deliverables identified in Annex I End of the project Final report Within 60 days (publishable summary covering the results, conclusions and socio-economic impact) After final payment Report on distribution of financial contribution Within 30 days after final payment one original (paper) and electronic copy

25 Payment modalities After reception of reports Commission may Approve in whole or in part or make approval subject to certain conditions Reject giving justification, if appropriate start procedure for suspension or termination Suspend time-limit requesting revision/completion Suspend payment Commission has 90 days to evaluate reports and execute payment No tacit approval Interest on late payments

26 Payment modalities Pre-financing: Amount defined in GA No request needed Interim: Based on costs accepted for the period Payments until 10% retention reached Final: Take into account declaration of receipts at participant level

27 Project duration 32 months 3 periods Union Contribution 3 M Average per period 160% of average per period 90% of Union Contribution Interim payment 1: 1M accepted Payment modalities Example Paid Cumulative Prefinancing , ,00 Interim payment , ,00 Interim payment , ,00 Final Payment , ,00 Interim payment 2: 1M accepted

28 Certificate on Financial Statement Requirements Applicable to Pilots, BPN and TN-actual costs (not TN lump sums) For interim and final payments when cumulative amount of request for payment by a beneficiary is Commission, based on risk assessment, can ask for a CFS from a beneficiary at any time

29 Certificate on Financial Statement What Standard set of checks and provide information according to specific format defined in agreed Terms of Reference (ToR) and give relevant elements to assess whether costs are claimed in accordance with grant agreement ToR are given in Certificate of Financial Statements for ICT PSP projects ( ents/certification_financialstatements.pdf) ToR correspond to international audit standards (IFAC-ISRS 4400)

30 Free choice* Certificate on Financial Statement Who Independent and Qualified (Directive 2006/43/CE replacing 8thCouncil Directive) Competent public officers for public bodies Eligible cost in the grant agreement * Services provided by auditors are regarded as subcontracts and subject to requirements of best value for money.

31 Certificate on Financial Statements When* Requested EU contribution < : -> No CFS to be submitted (not even at the end of the project) Requested EU contribution : ->CFS every time * and when requested by the Commission

32 Certificate on financial statement Example Year 1 Year 2 Final Period EC Contribution Open amount not covered by CFS CFS Mandatory NO YES NO (< ) (> ) (< )

33 Certificates on Financial Statement Submission and form Submission Electronically and signed original (paper) Form List of minimum requirements to be included in engagement letter Model auditor s report of factual findings to be issued on auditor s letterhead and dated, stamped and signed by auditor Detailed description including procedures to be performed by auditor and findings expected to result there from Language indicated in grant agreement

34 Personnel cost Certificate on financial statement Procedures to be performed Recalculate hourly rate and overhead rates for personnel based on actual payroll information and productive hours Describe time-recording system and individual timesheets Employment status and employment conditions

35 Certificate on financial statement Average Personnel Costs Exceptional only in case special clause Personnel costs claimed in accordance with normal practices * is inserted in the grant agreement Not significantly differ from actual personnel costs The FP7 certificate on the methodology is valid for ICT PSP * A beneficiary may claim personnel costs in accordance with its normal practices provided that the personnel costs determined in this way do not significantly differ from the actual costs incurred

36 Certificate on financial statement Procedures to be performed Subcontracting best value for money under conditions of transparency and equal treatment Matching Annex I Contracts signed Award procedure (how offers obtained and assessed) Other Direct costs Allocation of equipment subject to depreciation, travel cost and consumables correctly identified and allocated to the project (company policy on travel costs) Extracts from accounting records together with original invoices including company policy on travel costs

37 Exchange rates Certificate on financial statement Procedures to be performed Normal accounting practices Receipts

38 Technical reviews (see Art. II.29) Controls and audits At any time during implementation of project and up to five years after end of project. Commission may be assisted by external scientific or technological experts Financial audits and controls (see Art. II.28) during implementation of project and up to five years after final payment by external auditors or by Commission services including OLAF European Court of Auditors has same rights

39 Controls and audits Reimbursement to Commission and recovery orders (see Art. II.30) Offsetting Damages Penalties (see Art. II.31) Guilty of making false declarations liable to financial penalties of between 2 to 10% of value of Community financial contribution received. Rate may be increased to between 4 and 20% Beneficiaries may be excluded from all Community grants

40 New ways of co-operation Advantages Pro-active management Re-use of contractual data: Efficiency Consistency Time to payment Avoidance of errors

41 Period ends Max 60 days Business workflow Max 90 days Project runs. EC creates NEF session Coordinator collects signed financial statements 6 5 to coordinator to access NEF through Participants Portal no Beneficiaries fill financial statements 3 Coordinator submits the Periodic Report EC validates report yes 5 financial statements in PDF format by to the coordinator Project review Coordinator sends periodic report with all signed originals to EU EU check costs EU check signed financial statements EU executes Payment sent to coordinator

42 Financial statement Cost level In NEF

43 Financial statement Other in NEF

44 Financial statement Signature in NEF

45 Submission of periodic report by coordinator One original (paper) and one electronic copy (Article II.4(4)): Electronic copies through NEF Paper copy with all original signatures by post

46 Submission of periodic report by coordinator Action in NEF Progress report 1. Declaration by the project coordinator Upload scanned copy of signed declaration (coordinator) 2. Publishable summary Upload (coordinator) 3. Project Progress Upload (coordinator) 4. Use of resources (not for TN lump sums) Upload (coordinator) Financial statements and financial certificates 5. Financial statements and Summary financial report Fill in online (all) 6. Certificates for Financial Statement Upload scanned copy (where required)

47 Declaration by Project Coordinator Signed by Coordinator Periodic report is accurate description of work carried out for reporting period Achievements Public website is up to date Financial statements are consistent with report on resources used for project (not for TN lump sums)

48 Submission of periodic report by coordinator

49 Period ends Max 60 days Business workflow Max 90 days Project runs. EU creates NEF session Coordinator collects signed financial statements 6 5 to coordinator to access NEF through Participants Portal no Beneficiaries fill financial statements 3 Coordinator submits the Periodic Report EU validates report yes 5 with forms C in PDF format to the coordinator Project review Coordinator sends periodic report with all signed originals to EU EC check costs EC check signed financial statements EC executes Payment sent to coordinator

50 Payments Lump sum Thematic Networks Simplified process based on lump sums No definition of eligible cost No actual cost reporting No indirect cost No justification of costs No provision of certificates No declaration of receipts

51 Thematic Networks Summary financial report Annex 3 - Summary Financial Report - Thematic Network (to be filled by coordinator) Project Acronym Project Nb Page 1/1 Reporting period from: dd/mm/yy to: dd/mm/yy Beneficiary Nb Beneficiary Short Name Coordinator s Stamp (if applicable) Requested Community contribution COORDINATION (flat-rate based on scale-of-unit cost) Requested Community Contribution IMPLEMENTATION (lump sum) Requested Community Contribution MEETING ATTENDANCE (lump sum) Coordinator TOTAL We declare on our honour that: - the above organisations have actively participated to the project in the period to which this financial statement relates. TOTAL Requested Community contribution Interest Name of the Person(s) authorised to sign this Financial Date & Signature

52 Payments in ICT-PSP Thematic - Networks

53 Payments in ICT-PSP Thematic - Networks

54 How to avoid errors Actual costs Use of subcontractors in Annex I Depreciation of equipment Correct hourly rate Hours charged to the project Average personnel costs SME owners VAT

55 More information : Grant agreement: Core contract Annex I (dow) Annex II Guide to financial issues Guide for Certification of Financial statements ICT PSP reporting guidelines Your Project Officer