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COCOF Simplified Cost Options: Guidance and Scope of Application

This presentation discusses the COCOF working document on simplified cost options and their application, including the amendments to the ESF/ERDF regulations. It covers the four options for managing grants co-financed by Structural Funds and provides guidance on implementing the different options. The presentation also explains the eligibility rules and restrictions for using the simplified cost options.

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COCOF Simplified Cost Options: Guidance and Scope of Application

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  1. Eligibility: Simplified costsThe COCOF Guidance note& scope of applicationLaurent SENS European Union Cohesion Policy “Train the trainers” European Commission seminar for managing and certifying authorities 17 June 2010

  2. Objectives of the presentation • Presentation of the COCOF working document on the simplified cost options • Scope of application of the simplified costs options

  3. Triggering event: the amendments to the ESF/ERDF Regulations • With the amendment there are now 4 options to manage grants co-financed by Structural Funds • real cost, • flat rate for indirect costs (already existing for ESF but new for ERDF). 2 new options for both funds: • standard scale of unit cost and • lump sums

  4. Drafting the COCOF guidance note • a single document including all the options and all the management and audit issues. • Based on: • Information note to the Council with additional details and ESF ‘acquis’ • Discussions during the ESF Technical Working Group, COCOF Technical Meetings, COCOF meetings • Discussions with the national audit authorities and the European Court of Auditors

  5. Structure of the Guidance note • 5 parts + annex: • INTRODUCTION • CHAPTER 1: Indirect costs declared on a flat rate basis • CHAPTER 2: Flat rate costs calculated by application of standard scales of unit costs • CHAPTER 3: Lump sums • CHAPTER 4: Common horizontal provisions • ANNEX: Legal bases

  6. The Guidance note: Introduction • Origin of the options • Purpose of the working document • Need for an audit approach • Link to national eligibility rules • Restriction to grants

  7. Restricted to grants! • Simplified cost options apply only to grants: If the operation or project is subject to public procurement, no possibility to use the simplified cost options. Why? : • In the case of public procurement payment is made on the basis of a fixed price included in the contract (that could already include standard scales of unit costs).  Operation = project … or group of projects! where the simplified cost options are applicable to the operation, determine if it can be applied to all projects of the operation.

  8. The Guidance note: I- Flat rate rule for indirect costs • Implemented by ESF OPs since the beginning of the programming period: no change (‘ESF acquis’). Copy paste of the existing ESF note (except audit part). • Indirect costs reimbursed on a flat rate basis, as percentage of paid direct costs • Rate and definition of direct costs to be established ex ante, i.e. agreed before or in the grant agreement

  9. The Guidance note: II- The standard scales of unit costs / III- Lump sums Same structure for this chapter and the one on lump sums. • General principles • Consequences in terms of financial management • Key points for the managing authority: calculation, correlation quantities / payments, justification of quantities, choice of the standard scale • Audit approach

  10. The Guidance note: IV - Common horizontal provisions • Calculation • General audit approach • Retrospective entry into force • Combination of options • Impact on certification of expenditure • Cross financing • Compatibility with state aid rules

  11. Don’t forget … • An important step towards simplification • National authorities have 4 possible options for grants. • No choice = use of ‘real cost’ principle • Choice to do => fully understand the three simplified cost options and their consequences

  12. THANK YOU FOR YOUR ATTENTION! • QUESTIONS? laurent.sens@ec.europa.eu

  13. Simplified cost options: restricted to grants Explain Point 4. of the introduction of the working document on simplified cost options In order to clarify when these options are applicable or not Based on examples, from the simplest one to more complex examples.

  14. Operation? Operation = project Beneficiary

  15. Operation? Operation = project … or group of projects Beneficiary (ies) Variation of what is considered as an operation or a project

  16. Are simplified cost options applicable to the operation to be supported? Start with the simplest case = the operation includes only one project.

  17. Working Document: Point 4. Is the operation subject to public procurement contract?

  18. Working Document: Point 4. Is the operation subject to public procurement contract? YES Simplified Cost Options not applicable

  19. Training Working Document: Point 4.1. Is the project subject to public procurement contract? Operation = 1 project Working Document: Point 4. Is the operation subject to public procurement contract? NO Beneficiary

  20. Working Document: Point 4.1. Is the project subject to public procurement contract? YES Training Operation = 1 project Working Document: Point 4. Is the operation subject to public procurement contract? NO Beneficiary Simplified Cost Options not applicable

  21. Working Document: Point 4.1. Is the project subject to public procurement contract? NO Training Operation = 1 project Working Document: Point 4. Is the operation subject to public procurement contract? NO Beneficiary Simplified Cost Options applicable

  22. Are simplified cost options applicable to the operation to be supported? But some operations include more than one project… operation = group of projects Case 1: all projects implemented on the same basis

  23. Operation = group of projects Operation = group of projects Training Training Training Training Training Training Training Training Training Training Training Beneficiary(ies)

  24. Working Document: Point 4.1 Are the projects subject to public procurement contracts? Training Training Training Training Training Training Training Training Training Training Training Operation = group of projects Working Document: Point 4. Is the operation subject to public procurement contract? NO Beneficiary(ies)

  25. Working Document: Point 4.1 Are the projects subject to public procurement contracts? YES Training Training Training Training Training Training Training Training Training Training Training Operation = group of projects Working Document: Point 4. Is the operation subject to public procurement contract? NO Beneficiary(ies) Simplified Cost Options not applicable

  26. Working Document: Point 4.1 Are the projects subject to public procurement contracts? NO Training Training Training Training Training Training Training Training Training Training Training Operation = group of projects Working Document: Point 4. Is the operation subject to public procurement contract? NO Beneficiary(ies) Simplified Cost Options applicable

  27. Are simplified cost options applicable to the operation to be supported? But some operations include more than one project… operation = group of projects Case 2: projects implemented on different bases

  28. Working Document: Point 4.1. Are the projects subject to public procurement contracts? Training Training Training Training Training Training Training Training Training Training Training Working Document: Point 4. Is the operation subject to public procurement contract? NO Operation = group of projects Management costs Personalised support Personalised support Personalised support Beneficiary(ies)

  29. Working Document: Point 4.1. Are the projects subject to public procurement contracts? Training Training Training Training Training Training Training Training Training Training Training Working Document: Point 4. Is the operation subject to public procurement contract? NO Operation = group of projects Management costs Personalised support Personalised support Personalised support NO YES

  30. Working Document: Point 4.1 Are the projects subject to public procurement contracts? Training Training Training Training Training Training Training Training Training Training Training Working Document: Point 4. Is the operation subject to public procurement contract? NO Operation = group of projects Management costs Personalised support Personalised support Personalised support NO Simplified Cost Options applicable YES Simplified Cost Options not applicable

  31. Point 4.1. Are the projects subject to public procurement contracts? NO Personalised support Working Document: Point 4. Is the operation subject to public procurement contract? NO Point 4.2 Simplified Cost Options applicable The beneficiary implements itself the project: the simplified costs options are applicable, even if some of the budget lines or expenditure items within the project are outsourced. ! Assess impact of outsourcing on flat rate for indirect costs. Detailed Budget • Internal personnel costs • External personnel costs • Transport home/work • Travel costs • Rental costs • Purchase of consumables • Telephone, fax, postal costs • Water and electricity • Publicity • Depreciation of equipments • Cleaning services • …

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