Guide to Financial Issues relating to FP7 Indirect Actions - KoWi

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Project 3: personnel cost = 50,000 => 50,000 x 0,1 = 5,000 indirect costs If an organisation has only one centre or department, by definition, the aggregations of their indirect costs at the level of the centre and at the level of the legal entity coincide. In this case, the way to find out if the organisation can use a simplified method is to check whether the organisation has an analytical accounting system with detailed cost allocation beyond the calculation at the level of legal entity. 2.b Flat Rates • Flat rate of 20% This flat rate is open to any beneficiary whatever the accounting system it uses. Accordingly, when this option is chosen, there is no need for certification of the indirect costs, only of the direct ones. The base of calculation is the total direct eligible costs of the beneficiary, excluding the costs for subcontracting and the costs of resources made available by third parties that are not used on the premises of the beneficiary. In both cases, the overheads (electricity, supply, etc.) are not incurred by the beneficiary but by the subcontractor or the third party. Example: calculation of indirect costs when the option of the 20% flat rate is chosen: Personnel 1,000,000 Subcontracting 100,000 Researcher from a third university who works in his university 20,000 Researcher from a third university who works in the premises of the 15,000 beneficiary Travel cost 5,000 Equipment 50,000 Total of direct costs 1,190,000 Calculation of indirect costs: 1,190,000 – 100,000 (subcontracting) -20,000 (researcher who does not work in the premises of the beneficiary) = 1,070,000 % 0,2 = 214,000 Subject to the accounting principles of the beneficiaries, the following items may be considered as indirect eligible costs: - costs related to general administration and management; - costs of office or laboratory space, including rent or depreciation of buildings and equipment, and related expenditure such as water, heating, electricity, maintenance, insurance and safety costs; - communication expenses, network connection charges, postal charges and office supplies; - common office equipment such as PC's, laptops, office software; - miscellaneous recurring consumables; etc. provided they can be identified and justified by the accounting system of the participant as being incurred in direct relationship with the eligible direct costs attributed to the project. 72
Such costs are normally deemed to be covered by the flat rate (20% or 60%) and cannot be charged as direct costs unless it is established that the accounting principles of beneficiaries consider them as direct costs. A beneficiary which opts for the flat rate of 20% for its first participation under FP7 can subsequently opt for the analytical actual indirect cost system or the simplified method in future participations, provided its accounting system allowing for the identification of its real costs has been updated. This change will not affect the previous grant agreements. After this change, this organisation cannot opt again for the flat rate • Specific flat rate of 60% 30 Concept: This specific flat rate was approved as a "transitional flat rate" to be applied to grants awarded under calls for proposals closing before 1 st January 2010. The objective was to help the organisations during the transition from a flat rate calculation of their overheads (organisations using the AC cost basis in previous Framework Programmes) to an actual cost calculation. On 15 June 2009 the Commission, decided to maintain the FP7 specific flat rate for indirect costs at 60% for the remaining of the Framework Programme. • The use of this flat rate is subject to three cumulative conditions : 1) Status of the organisation The flat rate is reserved to: - non-profit public bodies - secondary and higher education establishments (for example, universities whether or not public/or for profit) - research organisations - SMEs For the relevant definitions of these organisations see Article II.16 of ECGA. Changes of legal status of beneficiaries The ECGA foresees (under Article II.15.2.c and Article II.16.1) that non-profit public bodies, secondary and higher education establishments and research organisations and SMEs, may, under certain conditions and funding schemes (for RTD activities), opt for a flat rate of 60% for indirect costs and to a reimbursement rate of 75% of eligible costs. Until December 2009, the ECGA stated that a change of the legal status of these beneficiaries implied the loss of these rates in on-going GA. 30 Up to now called "transitional" flat rate. 73
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Guide to Financial Issues relating
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In addition, all FP7 beneficiaries
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Article II.6.1.b) - Interim payment
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PART 1: FP7 EC GRANT AGREEMENT - CO
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this SME flat rate under the cost c
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Contribution to the Guarantee Fund
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considered as the project coordinat
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Article II.4.4 of ECGA - Certificat
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1 EUR 350,000 EUR 175,000 EUR 175,0
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Specific case of beneficiaries with
Page 21 and 22: 3. Submission of the certificate on
Page 23 and 24: e consistent with the beneficiary's
Page 25 and 26: eligible costs not yet certified th
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: • The system applied and the cost
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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