Budget lines and horizontal rules

1. Budget lines and horizontal rules Baltic Sea Region Programme 2007-2013 Joint Technical Secretariat Information SeminarRiga, 9November 2010

2. Content • Budget line specific rules • Horizontal rules& Use of the Euro (exchange rate system) • Management and accounting tools Information Seminar, Riga, 9 November 2010

3. Content • Budget line specific rules • Horizontal rules& Use of the Euro (exchange rate system) • Management and accounting tools Information Seminar, Riga, 9 November 2010

4. Budget line specific rules BL1 – Personnel BL2 – External services BL3 – Travel and accommodation BL4 – Equipment and investment BL5 – Other direct costs Information Seminar, Riga, 9 November 2010

5. Personnel costs of project staff Employment/labour contract Payslips/other adequate accounting documents Unpaid voluntary work Written agreement Documentation of the work value calculation BL1 – Personnel: Documentation • Signed time sheets • Payment proof (e.g. bank statement) • Other documents required by first level controller Information Seminar, Riga, 9 November 2010

6. BL1 – Personnel: Timesheets • Model timesheets available on eu.baltic.net • Defines minimum requirements • Modifications possible (e.g. specific national rules) • Part-time employee = working for project and other tasks • Full-time employee = working only for the project Information Seminar, Riga, 9 November 2010

7. BL1 – Personnel: Please avoid that… • Salary is not actually paid (e.g. taxes) • Timesheets do not correspond to calculation / internal documents • Voluntary payments (e.g. bonuses) included • Overheads or administrationcosts included • Existing staff employed without a new contract / contract amendment • Unpaid voluntary workis provided by project partner’s own staff Information Seminar, Riga, 9 November 2010

8. BL1 – Personnel: Please know that… • Freelancers / independent contractors in BL2 • Personnel costs of other departments / internal agencies also need timesheets • Daily / weekly working time cannot exceed national limits • Eligible overtime hours have to be agreed and paid • Travel and accommodation costs and insurance for voluntary workers are eligible Information Seminar, Riga, 9 November 2010

9. Budget line specific rules BL1 – Personnel BL2 – External services BL3 – Travel and accommodation BL4 – Equipment and investment BL5 – Other direct costs Information Seminar, Riga, 9 November 2010

10. BL2 – External services: Documentation • Contract • Invoice (incl. project reference and service details) • Payment proof • Observance of public procurement rules / Bid-at-three rule! Information Seminar, Riga, 9 November 2010

11. BL2 – External services: Please avoid that… • Project partners contract each other or their employees • Costs with noactual payment • Advance payments reported, but: • No invoice • Service not (partially or fully) delivered yet • External services weakly described in progress report and cost itemisation list Information Seminar, Riga, 9 November 2010

12. BL2 – External services: Please know that… • Usually internal agencies / in-house consultants belong to BL1+5 • Public procurement rules / bid-at-three rule always to be observed, also if: • Services only offered by a limited number of providers • Contracts with associated organisations • Contracts with suppliers from outside EU • Entertainment costs (e.g. guided city tour) not eligible • Language and other standard courses not eligible Information Seminar, Riga, 9 November 2010

13. Budget line specific rules BL1 – Personnel BL2 – External services BL3 – Travel and accommodation BL4 – Equipment and investment BL5 – Other direct costs Information Seminar, Riga, 9 November 2010

14. BL3 – Travel and accommodation: Documentation • Agenda / programme of the meeting / event • Travel report / equivalent memo • Original tickets and other original documentary evidence • Payment proof Information Seminar, Riga, 9 November 2010

15. BL3 – Travel and accommodation: Please avoid that… • Costs exceed national / EU limits • Travel in first / business class without justification • Subsistence allowances for third persons included • Use of car or taxi if public transport is available • Travel outside EU and Programme area without prior approval • Travelsare not connected to the project activities Information Seminar, Riga, 9 November 2010

16. Budget line specific rules BL1 – Personnel BL2 – External services BL3 – Travel and accommodation BL4 – Equipment and investment BL5 – Other direct costs Information Seminar, Riga, 9 November 2010

17. BL4 – Equipment and investment: Documentation • Contract • Invoice (incl. project reference and service details) • Payment proof • Observance of public procurement rules / Bid-at-three rule! • Equipment: calculation of depreciation costs Information Seminar, Riga, 9 November 2010

18. Equipment / investment cannot be financed by other financial instrument or project Equipment which is already fully depreciated cannot be reported Equipment / investment has to be listed in project data form Equipment / investment has to comply with information and publicity rules Equipment forpart-time employees is eligible BL4 – Equipment and investment: Please know that… Information Seminar, Riga, 9 November 2010

19. Budget line specific rules BL1 – Personnel BL2 – External services BL3 – Travel and accommodation BL4 – Equipment and investment BL5 – Other direct costs Information Seminar, Riga, 9 November 2010

20. ELIGIBLE Direct office running costs (e.g. consumables, rent, etc) Transnational transfer charges and charges for project account Participation fees for relevant external events BL5 – Other direct costs • Other expenses • essential for project implementation • exist because of the project • supported by invoices directly attributable to the project/project staff Information Seminar, Riga, 9 November 2010

21. BL5 – Other direct costs: Please know that… • The following is not eligible: • General costs allocated on a percentage or pro rata basis (Overheads (indirect administrative costs)) • National transfer charges, exchange rate losses and debit interest • Awards and prizes • Rooms cannot be provided as in-kind contribution Information Seminar, Riga, 9 November 2010

22. Content • Budget line specific rules • Horizontal rules& Use of the Euro (exchange rate system) • Management and accounting tools Information Seminar, Riga, 9 November 2010

23. Horizontal rules • No contracting between project partners • Conflict of interests (partiality) of persons to be avoided • Budget flexibility rule • Public procurement • Bid-at-three rule • Publicity rules • VAT and other financial charges • Cash in-flows / revenues • ERDF co-financing used outside the EU Information Seminar, Riga, 9 November 2010

24. Budget flexibility ≤ 20% or 40,000 EUR, whichever is higher ≤ 20% or 40,000 EUR, whichever is higher • Reallocated amount is cumulated since project start • Automatic calculation + warning message in progress report Information Seminar, Riga, 9 November 2010

25. 4. Public procurement • For PPs from the EU Member States and Norway - Transparency, equality, objectivity - Institutional, regional, national and EU regulations • For PPs from Belarus - PRAG - Rule of Nationality, Rule of Origin Information Seminar, Riga, 9 November 2010

26. 5. Bid-at-three rule • Value of purchase below the institutional, national and Community thresholds BUT above 1,000 EUR excl. VAT: • Collection of 3 offers • Proper documentation Information Seminar, Riga, 9 November 2010

27. 6. Publicity rules • All outputs and results must have clear reference to the programme & EU contribution No reference: no reimbursement of costs! Information Seminar, Riga, 9 November 2010

28. 7. VAT and other financial charges • Only not recoverable VAT is eligible • Financial charges e.g. for transnational transactions, bank accounts of project are eligible • Debit interests, exchange rate losses are NOT eligible Information Seminar, Riga, 9 November 2010

29. 8. Treatment of cash in-flows Information Seminar, Riga, 9 November 2010

30. A. Treatment of revenues • Project application • Project implementation - In the Progress report - Information to FLC - Deduction from the eligible expenditure • Project closure - Reference period/5 years following the project completion Information Seminar, Riga, 9 November 2010

31. B. Treatment of other cash in-flows • Public contributions - NO double financing - co-financing NOT higher than partner’s contribution - funding under ONLY one operational programme • Private contributions - NOT ELIGIBLE Information Seminar, Riga, 9 November 2010

32. 10% rule (ERDF) Who/What is concerned? Condition? Limit? Expenditure for the benefit of the regions of the EU in programme area ERDF co-financing to the expenditure < 10% of total ERDF co-financing (Parts of) project activities… located outside the EU …… could be inside the programme area (e.g. BY, NO, RU). 10. Use of programme co-financing outside the EU !!! NOT applicable to Norwegian and Belarussian partners !!! Information Seminar, Riga, 9 November 2010

33. Use of the EURO (Exchange rate calculation) • All funds in EUR • Other currency to EUR • Monthly accounting exchange rate of the European Commission http://ec.europa.eu/budget/inforeuro/ • When converting use 4 digits after the comma • Chapter 10.4.9. of the Programme Manual Information Seminar, Riga, 9 November 2010

34. Content • Budget line specific rules • Horizontal rules& Use of the Euro (exchange rate system) • Management and accounting tools Information Seminar, Riga, 9 November 2010

35. Website: eu.baltic.net Management toolkit on the website Partner reports: for the entire project and for each project partner Cost itemisation list: - compulsory but adjustable Information Seminar, Riga, 9 November 2010

36. Budget lines and horizontal rules Joel Kook Finance Officer E-mail: joel.kook@eu.baltic.net Phone: +49 381 45 484 5278 Information Seminar Riga, 9 November 2010