General Conditions - Financial Aspects Christos Kissas, PhD Brussels, 21-22 January 2016 Ptuj, 5 April 2016
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General Conditions
- Financial Aspects
Christos Kissas, PhD
Brussels, 21-22 January 2016Ptuj, 5 April 2016
Documents & forms – LIFE Website
•Model LIFE Grant Agreement
• Model technical report (Annex V)
• Model financial statement (Annex VI)
• Model certificate on financial statements (Annex VII)
• Financial and Administrative Guidelines(Annex X)
• Guidelines for applicants (Annex XI)
• Guidelines re. Amendments
• Guidelines re. Partnership agreements
• Monitoring indicators (coming soon)
• Timesheet template
LIFE TIME PROJECT
Entry into Force (Signature) +
1st Pre-financing
Start Project
Reporting/ Further Pre-
financingpayment(s)/ Change(s) to
GA…
End of Project + Final
payment (or recovery) +
possibility Audit
Payments schedule for most projects (>24 Months, or >300.000 €)
1st Pre-financing(30%)
2nd Pre-financing(40%)
Payment of the Balance (max. 30%)
Payments schedule for “big” projects:(>48 Months or >4 Mio €)
1st Pre-financing(30%)
2nd Pre-financing(20%)
3rd Pre-financing(20%)
Payment of the Balance
(Max. 30%)
1st Pre-financing (Art. I.4/II.24.1)in 30 days
•Receipt originally signed GA (incl. Annexes) by EASME
Upon Entry intoforce (GA signedby both parties)
• In accordance with the template
Upon receiptguarantee (if defined in GA)
2nd (and 3rd) Pre-financing(s)(Art. I.4/II.23.1/II.24.2)
in 60 days
100% previous pre-financing used up
Signed payment request
Technical progress report (mid term report)
Statement on use of previous pre-financing (interim financialstatement covering start project till interim report date)
Payment of the Balance [last payment]in 90 days
(Art. I.4/II.23.2/II.24.4)
Signed payment request
Final technical report• Info to justify the eligible costs + info on subcontracting (Art.II.10.2)
Final financial statement covering entire project period•Consolidated statement + breakdown amounts claimed by beneficiary (+affiliates) => will includealso the budget transfer information
•Certificate on the financial statements
Submit within 90 days of end of project period
Eligible Costs (Art. II.19)
Actually incurred by the beneficiary
During project period (Art. I.2.2)
� Except costs relative to final payment request & audit
Indicated in the estimated budget or accepted by EASME
Incurred in connection with & necessary for the project
Identifiable & verifiable – in accounting records
Compliant with applicable tax/social legislation
Reasonable, justified, compliant with principles of sound financial management (economy/efficiency)
Ineligible Costs (Art. II.19.4 + fin. guidelines)
Some examples :
� Costs not foreseen in the project
� Return on capital (dividends owed to beneficiaries)
� Durable goods/communication material without LIFE logo
� Already financed by European Union (by other programmes)
� VAT (unless not recoverable/not related to activities engaged in as public authority)
� Costs of management plans, action plans and similar plans, drafted or modified in the context of a LIFE project, if the related plan is not legally operational before the project end.
Costs of Personnel
Employment contract or equivalent appointing act
Assigned to the project
Actual salary costs + social security contributions + otherstatutory costs (see Fin. Guidelines pg 12/13 for furtherguidance !) in line with beneficiary's usual policy on remuneration
Costs of natural persons under contract with beneficiary(work under his instructions, in his premises, result ownedby him, cost not significantly different of own personnel)
!!! Sum of public body contributions > by at least 2% sumof salary costs charged to the project for public body employees that are 'non-additional'
Additional personnel
• Start on or after start date of project
• Start on or after signature date of GA (if before start date project)
• Specifically assigned/seconded to the project
All employees of public bodies
whosecontracts/contract
renewals :
Calculation Personnel Cost
Personnel cost� Hourly rates * actual project hours (if not full time)
� Gross salary (if full time & proof assigned to project)
� In accordance with price specific work contracts (lump sum or per hour/day => timesheets)
Hourly rates (per year) are calculated :� Total Annual Salary Cost/total annual productive hours
� Annual Salary Cost (see financial guidelines pg 12/13)
� Annual Productive Hours (1720 standard or as justified in timesheets)
Time Registration
Daily records of hours spent
Reconciliation of total working time per person
Timesheets/equivalent time registration system
Certified by employee + supervisor
See p. 3-5 of financial guidelines
Supporting Documents Personnel Costs
Salary slips (accumulatedyearly figures)/invoices
Employement contracts/Workcontracts
Extract payroll account
Extracts of relevant legislation relating to social
charges
Secondment/assignement letters
Travel and Subsistence
Charged in accordance with beneficiary's usual practices on travel
Costs incurred only by employees, consultants, etc.
Not for travel between home/work place
You can group expenses in one single transaction (e.g. regarding one travel)
You can report subtotals if an existing report offers same level of details (please annex it)
See pg 16-17 financial guidelines
Subcontracts/External Assistance
Award of contracts:
� Value for money
� lowest price & no conflict of interest
� Public bodies = Public procurement Rules
� Other = Internal rules + Art. II.9 (> 130,000 €)
See page 15-16 financial guidelines
Durable Goods (New/2nd hand)
Depreciation charges are eligible when :� Award of contracts procedures observed
� In beneficiary's inventory (or similar)/capital expenditure
� Purchased/leased (LT) at normal market rates
� Nessecary for the implementation of the project
� Depreciation in accordance with international accounting standards & usual accounting practises of beneficiary
� Depreciation only for % allocated to the project
� LIFE Logo
Depreciation Ceilings
Infrastructure costs : 25% total purchase cost
Equipment costs : 50% total purchase cost
Prototype : 100% (when applicable in LIFE strand)
EXCEPTION : 100% depreciation infrastructure/equipment costs for NAT projects if :
•Public/non-profit entities (NGO/priv. non-commercial)
•Intrinsically connected with implementation project
•Used to a significant degree within project duration
•Assign these goods definitely to nature conservation activities beyond end of project
Other Costs & Consumables
Award of contracts� Public bodies = Public procurement Rules
� Other = Internal rules + Art. II.9 (> 130,000 €)
General Office supplies = Indirect costs (overheads)
Other costs : financial guarantee, audit final financial statement, translation, dissemination costs + direct costs that cannot fall in any other category
Indirect Costs : Overheads (Art II.19.3)
Max. 7% of the total eligible costs of the beneficiary concerned, per beneficiary not per project
Supporting documents : no invoices needed
VAT
Only non-recoverable VAT can be claimed � Certificate of national tax authorities already to be submitted at
interim report stage
� If the above do not provide it then explicit declaration of independent financial auditor at end of project
Audit Certificate on the Financial Statements
Total contribution project exceeds 300.000 €
Produced by approved auditor (public bodies : competent and independent public officer)
Certify that costs declared by beneficiary for the categories of costs reimbursed are real, accurately recorded and eligible in line with GA + all receipts have been declared
Format of audit certificate as published on website
15/04/2016 24
15/04/2016 25
15/04/2016 26
15/04/2016 27
15/04/2016 28
Frequent ErrorsCalculation of hourly/Daily rates (e.g. wrong productive time, incl non-eligible costs like overheads, …)
No timesheets
No 'assignment' to the project
Insufficient justification
No underlying accounting documents
Purchases between related companies (Conflict of interest!)
Wrong/no depreciation
Invoices not linked to the project
THIS MAY RESULT IN NON-ACCEPTANCE OF COSTS
Tips
Timesheets – consolidated time!
Start completing the financial report asap + documenting deviations
CB to keep copies of all documents (Audits of the project might take place at his premisses)
Description of systems/routines/internal guidance (validation of timesheets, travel cost, …)
Project reference in invoices/part of the address
Project/accounting codes (stroškovno mesto)
Hvala!
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