Guide to Financial Issues relating to FP7 Indirect Actions - KoWi

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- The Commission has the right to recover funds unduly paid, as well as to apply liquidated damages, when an inappropriate use or lack of compliance with the approved methodology and/or any significant abuse is identified, for example during an on-the-spotaudit. - It does not waive the obligation to provide an intermediate CFS (whenever the EUR 375,000 threshold is reached) unless this is part of the certificate on the methodology. - Average personnel costs charged by this beneficiary according to the certified and accepted methodology are deemed not to significantly differ from actual personnel costs. The auditors will therefore only have to focus on checking compliance with the certified methodology and systems, omitting individual calculations; such calculations may be however carried out in order to verify that the methodology has correctly been applied and that no abuse has taken place. Practical examples and more information about the procedures to submit the certificate on average personnel costs are described in the guidance notes for beneficiaries and auditors at the following address: ftp://ftp.cordis.europa.eu/pub/fp7/docs/guidelines-audit-certification_en.pdf 4. Comparison between certificates: Certificate on Financial Statements (CFS) Certificate on the Methodology Certificate on average personnel costs Basis Article II.4 Article II.4 Article II.14 Mandatory for all beneficiaries based on conditions set up in the GA Who Condition If total contribution < € 375.000 no CFS required For projects > 2 years: Interim and/or final payment Each time that the cumulated EU contribution not covered by a CFS is ≥ €375.000: CFS is required Exceptions: When Certificate on the Methodology is accepted by the Commission, CFS not required for interim payments each time that the cumulated EU contribution not yet certified is ≥ €375.000 Optional and foreseen for beneficiaries with multiple participations based on criteria defined by the Commission (see above). For beneficiaries with multiple participations Optional for any beneficiary applying average personnel costs. The method has to be consistent with the usual cost accounting practice of the beneficiary The average costs cannot differ significantly from actual personnel costs. The Commission defines acceptance criteria (see Art. II.14.1). For projects ≤ 2 years: If total contribution ≥ €375.000 Only one CFS at the final payment. Scope The project and reporting periods concerned. It covers all By default, all the beneficiary's projects By default, all the beneficiary's projects throughout FP7 24
eligible costs not yet certified throughout FP7 Timing For projects ≤ 2 years: at the final payment For projects > 2 years: When criteria are met At any time of the implementation of FP7 but at the earliest on the start date of the first GA signed by the beneficiary under FP7 At any time of the implementation of FP7 but at the earliest on the start date of the first GA signed by the beneficiary under FP7 Detailed description verified as factual by external auditor or competent public officer Form Independent report on factual findings (Annex VII Form D) Advantages Applying the CFS will increase the certainty on the eligibility of costs for the beneficiary Independent report on factual findings (Annex VII Form E) by external auditor or competent public officer When a Certificate on the Methodology is accepted by the Commission, no CFS required for interim payments If the Methodology is accepted, no risk of rectification after audit if the method is applied correctly Independent report on factual findings (Annex VII, relevant part of Form E) by external auditor or competent public officer If the Methodology is accepted, the average costs are deemed not to differ significantly from actual costs. If the Methodology is accepted, no risk of rectification after audit if the method is correctly applied. Article II.5 of ECGA – Approval of reports and deliverables, time-limit for payments Article II.5.1 – Approval of reports and deliverables at the end of each reporting period Following the modification of the Grant Agreement adopted on 14.12.2012, at the end of each reporting period, the Commission shall evaluate and approve project reports and deliverables and disburse the corresponding payments as follows: • for reporting periods ending before 31/12/2012 (including), within 105 days from the day of receipt of project reports and deliverables. • for reporting periods ending as from 1/1/2013, within 90 days from the day of receipt of project reports and deliverables. The new time limit of 90 days applies to all grant agreements, including grants signed before 31/12/2012, for which the reporting period is due after 1/1/2013. Article II.6 of ECGA – Payment modalities The following types of payments are foreseen: Article II.6.1.a) – Pre-financing at the start of the project For more details concerning pre-financing, please refer to Article 6. It is important to remember that as from 01 January 2013, the interest generated by the pre-financing will no longer be deducted from the EU contribution (see Article II.19 of ECGA). Thus, the interest generated on the amount of pre-financing will no longer be offset against the subsequent payment. Moreover, if the Coordinator receives the pre-financing in an interest yielding bank-account, any interest generated on this account by the pre-financing transferred by the Commission as from 1/1/2013 should not be declared to the Commission and should not be considered as receipt to the project either. 25
Page 1 and 2: Guide to Financial Issues relating
Page 3 and 4: In addition, all FP7 beneficiaries
Page 5 and 6: Article II.6.1.b) - Interim payment
Page 7 and 8: PART 1: FP7 EC GRANT AGREEMENT - CO
Page 9 and 10: this SME flat rate under the cost c
Page 11 and 12: Contribution to the Guarantee Fund
Page 13 and 14: considered as the project coordinat
Page 15 and 16: Article II.4.4 of ECGA - Certificat
Page 17 and 18: 1 EUR 350,000 EUR 175,000 EUR 175,0
Page 19 and 20: Specific case of beneficiaries with
Page 21 and 22: 3. Submission of the certificate on
Page 23: e consistent with the beneficiary's
Page 27 and 28: Example 2 Project duration: 3 years
Page 29 and 30: Subcontracting costs are direct cos
Page 31 and 32: • the criteria defining "quality"
Page 33 and 34: complementary way. This means using
Page 35 and 36: Where actual costs are not availabl
Page 37 and 38: Acceptability criteria for average
Page 39 and 40: Criterion d: Productive time As a g
Page 41 and 42: • When the average personnel cost
Page 43 and 44: For years 2007-2008-2009 these annu
Page 45 and 46: The formula applied is the same as
Page 47 and 48: A. THIRD PARTIES MAKING THEIR RESOU
Page 49 and 50: this case it is the university whic
Page 51 and 52: parties making available resources
Page 53 and 54: above for Joint Research Units. The
Page 55 and 56: Non-exhaustive list of taxes and pe
Page 57 and 58: administrative, absence, EU-project
Page 59 and 60: Some activities may be considered n
Page 61 and 62: applicable national labour law, the
Page 63 and 64: The following criteria must be appl
Page 65 and 66: • each successive 12-hour period:
Page 67 and 68: equipment purchase. If the service
Page 69 and 70: Indirect costs, also called overhea
Page 71 and 72: • The system applied and the cost
Page 73 and 74: Such costs are normally deemed to b
Page 75 and 76:
principle be able to opt for the 60
Page 77 and 78:
certificate of financial statements
Page 79 and 80:
Article II.16 of ECGA - Upper fundi
Page 81 and 82:
Changes of legal status of benefici
Page 83 and 84:
* Remark: Actual commercial exploit
Page 85 and 86:
They may cover the salary costs of
Page 87 and 88:
fee to a conference carried out by
Page 89 and 90:
eneficiaries may opt for a lump sum
Page 91 and 92:
Example of calculation of EU fundin
Page 93 and 94:
Example: 3-year project with 3 mill
Page 95 and 96:
Maximum EU/Euratom financial contri
Page 97 and 98:
• The beneficiary has to reimburs
Page 99 and 100:
The Communication permits the use o
Page 101 and 102:
Article II.24 of ECGA - Liquidated
Page 103 and 104:
FINAL PROVISIONS Article II.40 of E
Page 105 and 106:
2 nd period: the access provider de
Page 107 and 108:
The EU/Euratom financial contributi
Page 109 and 110:
Step 2: The budget for the RTD Perf
Page 111 and 112:
For our project example we show two
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Guide to Financial Issues relating to FP7 Indirect Actions - KoWi

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