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EaPTC Moldova-Ukraine

Budgetary issues and accounting requirements. Training on Project Management and Implementation for Grant Beneficiaries and Partners TC Programme MD-UA. EaPTC Moldova-Ukraine. C ătălina Arghir , EaPTC MA, GIZ. Chisinau, Republic of Mold ov a 2017. Table of content:.

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EaPTC Moldova-Ukraine

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  1. Budgetary issues and accounting requirements Training on Project Management and Implementation for Grant Beneficiaries and Partners TC Programme MD-UA EaPTC Moldova-Ukraine Cătălina Arghir, EaPTC MA, GIZ Chisinau, Republic of Moldova 2017

  2. Table of content:

  3. General financial aspects Joint Decision Making Committee (JDMC)

  4. General financial aspects Joint Decision Making Committee

  5. Co-financing Co-financing

  6. General financial aspects Joint Decision Making Committee

  7. Setting accounting system and book keeping

  8. Understanding ineligible costs Ineligible costs refers to: Debts and provisions for losses or debts; Interest owed; Items already financed in another framework Purchases of land or buildings, except where necessary for the direct implementation of the action; Currency exchange losses; Taxes, including VAT, unless the beneficiary (or the beneficiary’s partners) cannot reclaim them and the applicable regulations do not forbid coverage of taxes; (1) Loans to third parties; Fines and penalties. (1) See article 15.3 of EC Regulation 1638/2006 and, “mutatis mutandis” article 34 of EC Regulation 951/2006

  9. Understanding eligible costs Eligible costs are costs actually incurred by the beneficiary or partners of the grant which meet the following criteria: Have been incurred during the implementation period (1) Be indicated in the estimated overall budget of the action, Be necessary for the implementation of the action, Be identifiable and verifiable, recorded in the accounting of beneficiary and partners, and backed-up by originals of supporting documents Be reasonable, justified and comply with the requirements of sound financial management, in particular regarding economy and efficiency (1) Except for costs relating to final reports, expenditure verification and evaluation of the action.

  10. DIRECT COSTS Budget headings 1 to 6 Understanding eligible costs Not exceeding 5% of the direct eligible costs. To be used only with prior authorisation. CONTINGENCY RESERVE Flat-rate funding set at not more than 7% of the total eligible direct costs. INDIRECT COSTS (OVERHEADS) TOTAL ELIGIBLE COSTS

  11. Eligiblecosts per budget lines and supporting documents The project budget is composed of 4 sheets: Overall Budget; Budget – expected distribution per partners and cost categories; Budget – expected distribution per group of activities –Justification; Financing sources.

  12. 1. Human resources 2. Travel 3. Equipment and supplies 4. Local office 5. Other costs, services 6. Other costs 7. Indirect costs / administrative costs 8. Contingency reserve

  13. 5 1. Human Resources (gross amount) 1.1 Technical staff 1.1.1 Project coordinator Per month € 0.00 1.1.2 (please specify) Per month € 0.00 1.1.3 (please specify) - please add as many rows as you need Per month € 0.00 1.2 Administrative and support staff 1.2.1 Financial manager Per month € 0.00 1.2.2 (please specify) Per month € 0.00 1.2.3 (please specify) - please add as many rows as you need Per month € 0.00 Subtotal Human Resources € 0.00 Chapter 1 – Human Resources Chapter 1 only includes staff working on employment (labour) contracts. Persons working on services contracts should be considered as experts and included in category 5 (Other costs, services) • Take into account when calculating the eligible staff costs: • The subcategories used in your budget, should not exceed those; • The unit of time (months, days or hours).

  14. Chapter 1 – Human Resources How can I distinguish between employees and external experts or other consultants?

  15. Chapter 1 – Human ResourcesDocuments to be provided for salaries justification: 1) Employment contract (labour contract) – stating the exact time and sum; 2) Monthly Pay-roll – signed by the project manager;3) Social charges and other remuneration – related documents3) Pay-slips - your earnings before and after any deductions;4) Job description;5) Time-sheet – specifying the effective time worked for project, activities implemented in the reference period, according to the application form; 6) Proofs of payment – cash book, payment orders, statement of accounts, list with identification of card accounts.

  16. MONTHLY TIMESHEET PROJECT NUMBER: 2010/001 PROJECT ACRONYM: CASE 1 BSB Name of employee: Alex Alexov Category 1.1. Technical staff Name of partner institution: Beneficiary Month & year October 2010 Worked hours Day Description of tasks on the project 1 2 3 4 5 3 Coordination meeting with other technical staff 6 4 Planning and preparing material for kick-off meeting 7 4 Preparing material for kick-off meeting 8 9 10 11 4 Travel to kick-off meeting 12 8 Kick-off meeting 13 4 Travel from kick-off meeting 14 2 Preparation of minutes 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 Total hours 29 Unit rate in budget Months Total hours in month 168 Time in unit rate 0,17 Monthly rate: EUR 2.448,86 Total EUR: EUR 422,72 Signature of Employee Signature of Employer Date: 31st October 2010 Date: 15th November 2010 Chapter 1 – Human ResourcesThe eligible cost is the cost of the time devoted to the project; therefore, the timesheet is the key document to ensure that the right amount is included in the accounting, but also that you have the adequate support in case of control. Identification data Number of hours actual worked Description - Only paid hours may be includes (no un-paid extra hours). - Calculation of cost of the employee includes all taxes (payed by employee and employer). Signature of Employee Signature of Employer

  17. 2. Travel 6 Per travel € 0.00 2.1 Travel 7 Per day € 0.00 2.2 Per diem 2.3 Other travel expenditures Per day € 0.00 Subtotal Travel € 0.00 2. Travel Cost incurred by the “staff of the Action” are eligible included in the Budget Heading 1: Human resources . Any flat-rate for the subsistence costs must not exceed the rates set out in the project budget. Travel and subsistence costs for staff taking part in the Action provided they do not exceed those normally borne by the beneficiars(ies) according to its national rules and regulations, or GIZ (applicable only for Ukrainian beneficiary/co-beneficiaries).

  18. 2. Travel Supporting documents for travel and subsistence costs: Invoice from travel agency, including proof of payment; Original transportation tickets (plane, train, boat, bus); Boarding passes; Meeting or event related documents: agenda, list of participants, materials, pictures, a short report on the visit. Perdiems rates include cost related to accommodation (hotel), meals (or daily allowance) and local transportation (bus, taxi).

  19. 3. Equipment and supplies According to article 14.2, the purchase or rental of equipment and supplies (new or used) is eligible if it is specifically for the purposes of the project. The cost of related services, such as transportation or installation is also eligible. The costs have to correspond to market rates.

  20. 3. Equipment and supplies Supporting documents: Documents related to the award procedure, including a contract (with TOR) and a purchase order; You have to give evidence of the market rates; Proof of delivery (deed of acceptance); Invoice from contractor and proof of payment; Certificate of origin; Photographs – visibility requirements.

  21. 4. Local office This category is intended to include the expenditure of any office specifically for the purposes of the project. These costs may cover premises rented especially for the Action, provision utilities, furniture and office equipment, printing, copying, postal services, phone, fax, internet. Supporting documents: Invoices from suppliers, including proof of payment; Documents related the award procedure (TOR, proof publication etc); Photographs.

  22. 10 5. Subcontracted services 5.1 External experts (please specify) - please add as many Per expert € 0.00 rows as you need 5.2 Publications, studies, research Per item € 0.00 Per service € 0.00 5.3 Costs for expenditure verification 5.4 Evaluation costs Per service € 0.00 5.5 Translation, interpreters Per page/Per day € 0.00 5.6 Financial services (bank guarantee costs etc.) Per service € 0.00 5.7 Costs of conferences/seminars Per event € 0.00 12 Per action € 0.00 5.8 Visibility actions 5.9 Other (please specify) - please add as many rows as you € 0.00 need Subtotal Subcontracted services € 0.00 5. Other costs, services (subcontracting services) This category includes the subcontracting expenditure and other costs deriving directly from the requirements of the contract. Have to be clearly identified in the project budget: professional expertise cost, studies, researches, project management experts, cost related verification expenditure, organization of events, seminars, meetings costs of promotion (visibility), financial service costs, etc.

  23. 5. Other costs, services (subcontracting services) Supporting documents: Documents related award procedure, TOR, bids etc; Contract signed; Invoices from service providers, proof of payment; Proof of delivery of services (deed of acceptance); Any material published; Proof of respect the EU and EaPTC visibility rules; In case of events, all related documents, pictures, budget, presentations, attendance list, contracts, payments, etc.

  24. 6. Other costs This category includes costs that cannot be included in the previous categories, any other costs necessary for implementation of the Action in line of national legislation and Budget of the Action.

  25. Indirect costs/ Administrative costs This category is described in article 14.4 of the General Conditions, intends to cover the administrative overheads incurred by the beneficiary and partners. They are calculated as a fixed rate of the total amount of direct eligible costs (categories 1 to 6). The flat rate does not need to be supported by accounting documents to be presented to the MA, but it should be audited and included in all reports. MA can request addition documentation. It is incompatible with the receipt of an operating grant from EC by the beneficiary or partners, that is, if the beneficiary or partner is receiving a grant to finance its “regular operating costs”, no additional administrative costs can be accepted as eligible, as it would be double funding.

  26. Interim financial report: Reallocation and use of Budget as per contract/rider period (dd/mm/yyyy-dd/mm/yyyy) contingencies Unit cost (in Costs allowed use of Expenditures Unit # Units EUR) (in EUR) reallocation contingencies (a) (b) (a)*(b) Contingency reserve The contingency reserve can only be used in case of unforeseeable circumstances and with prior approval by MA, in the form of an addendum. The Contingency is set at 5% of Direct Eligible Cost (line 7). The request for its use has to indicate which categories of expenditure (1 to 6) will need extra resources. The reallocation will be shown in the financial report and no accounting entries will be found under this category.

  27. Thank you for your attention! Arghir Catalina catalina.arghir@giz.de

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