Pathways To Successful EU-Research Projects Financial management in FP 6 projects

1. Pathways To Successful EU-Research Projects Financial management in FP 6 projects Praha, October 25, 2005 Claudia LabischKoWi Office Brussels cl@kowi.dephone: 0032-2-548.02.12 www.kowi.de

2. Problems encountered in EU-research projects: • Which cost model do I have to go for? • Definition of "personnel" • Eligibility of personnel costs • Limited use of subcontracts • Audit certificates • Communication

3. Which cost model do I have to go for? • Make sure you choose the right cost model as of proposal submission • Change of cost model during lifetime of Framework Programme • Change of cost model during project's lifetime • No change of initially allocated budget!

4. Definition of "personnel" within a EU-project • Employees having permanent working contracts with the contractor • Employees having temporary working contracts with the contractor • Personnel made available by a third party on basis of prior agreement (contribution of third parties)

5. Eligibility of personnel costs • Contractors using the FC- or FCF-model may charge any personnel costs to the project (according to above definition of "personnel"). • Contractors using the AC-model may only charge costs of permanent staff involved in the project for management of consortium activities! (or other, if additional costs)

6. Limited use of subcontracts • Core elements of the project can not be subcontracted (project management!) • Only for tasks which cannot be carried out by the contractors • If there is a subcontract, it must always become part of the contract with the European Commission (contract amendment)

7. Audit certificates – • who can deliver the audit certificate? • Each contractor is free to choose any qualified external auditor, • including its usual external auditor, provided that it meets the • cumulative following professional requirements: • external auditor must be independent from the contractor; • external auditor must be qualified to carry out statutory audits of accounting documents in accordance with the 8th Council directive 84/253/EEC of 10 April 1984 or similar national regulations.  • A contractor that is a public body may opt for a competent public • officer to provide an audit certificate, provided that the relevant • national authorities have established the legal capacity of that • competent public officer to audit that public body. • (Rules for auditing and auditors: Articles II.26 and II.29, Annex II to the Model Contract)

8. Audit certificates /II • In case of internal audit (for public bodies), the service concerned may claim only real costs of effecting the audit (no subcontracting). • Claim of overheads on audit costs for contractors in AC-model only if costs of audit are additional direct costs; • Charge of audit costs in the relevant reporting period;

9. Audit certificates / III • There is no standard format for an audit certificate; • External auditor or public officer should follow model proposed by the Commission (see Annex 7 of Financial Guide) • Audit certificate should be issued in one of the official languages of the EU; should be the same language used for all other reports; otherwise, external auditor must attach translation in that language.

10. Communication ... • ... on different levels in order to avoid problems and misunderstanding: • Internal communication (financial department, legal service) • External communication = at consortium level, to clarify important matters (cost model, allocated budget, reimbursement of audit costs, clause 39 ...)

11. Information on Financial Management ofEU-Projects within FP6: • http://www.cordis.lu/fp6/project-management.htm • http://www.cordis.lu/fp6/find-doc.htm#reporting • http://www.kowi.de/en/fp/projects/default.htm