Administrative & Financial Issues Eric HENG VONG EACEA

1. Brussels, February 25 and 26, 2008 Administrative & Financial Issues Eric HENG VONG EACEA

2. The grant agreement First pre-financing payment Progress report and 2nd pre-financing payment Final report and balance payment/recovery Amendments Possible audit Useful links Summary

3. The agreement contains key data Purpose of the grant Eligibility period of expenses Accepted budget and maximum grant Payment arrangements Reporting obligations Administrative and bank details General conditions The grant agreement

4. But also some important annexes: Work programme (annex I) Consolidated budget (annex II) Guidelines for administrativeand financial management and reporting (annex III – web link) List of partners (annex IV) The grant agreement

5. 40 % of the maximum grant (80% if <= 18 months) Paid within 45 days of the date of signature by the Agency Remains property of EC until final payment Interests generated must be reported To be transferred to partners according to rules defined with them First pre-financing payment

6. Not for projects <= 18 months Covers the first half of the project Deadline : see article I.5 Report at least a summary of expenses and incomes Use Excel spreadsheet (+ email it to us) We may ask you for additional information such as copies of bank transfers to partners, subcontracting agreements (& tender doc.), sampling on expenses 2nd pre-financing paid within 90 days of receipt Progress report & 2nd pre-financing payment

7. If 70% of 1st pre-financing payment is reported/spent, an additional 40% of the maximum grant is paid If less than 70% of the 1st pre-financing payment is reported/spent, amount is reduced Example Grant : 100.000 € 1st pre-financing : 40.000 € (70% of it = 28.000 €) Total reported with progress report : 20.000 € 2nd pre-financing = 40.000 € - 8.000 € = 32.000€ 2nd pre-financing payment

8. Covers full eligibility period Deadline : end of eligibility period + 2 months Report all expenses and incomes Use Excel spreadsheet (+ email it to us) Only Provide supporting documents upon request Final report

9. Within 90 days of receipt (except if incidents) Balance payment or recovery order (if pre-financing payments > final grant) IF balance payment: 60 days from closure letter to contest or ask information IF recovery order: pre information letter sent and 30 days to contest or ask information (prior to sending of the debit note) Balance payment or recovery

10. Always check Guidelines for administrative and financial reporting (annex III) Directly connected with project and budgeted Necessary Reasonable and justified Generated during lifetime (eligibility period) of the project Actually incurred, duly recorded in accounts Identifiable and verifiable (same rule applies to revenues) Eligible costs

11. Some limits Sub-contracting : 30% of direct costs Equipment : 10% of direct costs Some maximum rates (as published in the call) Staff costs (to be reported on real basis) Subsistence costs (allowance or real expenses) Indirect costs Flat rate as fixed in the budget (maximum 7%) Eligible costs

12. Same documents as those required by accounting/taxation national rules (invoices, receipts…) For staff costs (= salary + social charges), keep also time sheets in order to document the number of days Supporting documents?

13. 3 different ceilings Maximum Community contribution (agreement) Eligible expenditures x co-financing percentage No profit rule Final grant is the lowest of these 3 ceilings Calculation of the final grant

14. In order to avoid profit, grant will be corrected taking into account other sources of income (excluding own funds) Declare all sources of income linked to your project Interests generated on pre-financing payments must be declared and will be deducted from the final grant Calculation of the final grant

15. Change of partner(s) or even of beneficiary Changes to project activities/work programme Change of bank account / admin. details Change of eligibility period (extension of max 6 months if duly justified) Changes to budget breakdown Amendments to the agreement

16. Be aware that an amendment : Must be requested and approved before changes take effect Must at all event be sent to the Agency minimum one month before the end of the eligibility period Should never substantially modify the project Must be requested on appropriate form published on the Agency website Depending on the type of change: amendment signed by both parties or simple exchange of letters Agency may request an amendment as well Amendments to the agreement

17. Only if transfer between categories of cost > 10 % calculated on the category of cost that is augmented Accepted only if justified and consequence of change(s) in the work-programme Total budget, Community grant and flat-rate for indirect costs cannot be modified Amendment: change to the budget breakdown

18. Be aware that your project could be selected (randomly or not) for an audit ex-post. Keep all documentation and evidences for a period of 5 years after final payment/recovery Possible audit

19. Thank you for your attention !