CEF TELECOM Implementation of Grant Agreements webinar

1. CEF TELECOMImplementation of Grant Agreements webinar • INEA C.5 • September 2019 • Version 1.0

2. Contents • 1. Project reporting and INEA follow up (slide 4-7) • 2. Changes to the grant agreements: amendments, budget transfers, suspension and termination (slide 8-14) • 3. Final reporting and payment (slide 16-26) • 4. Costs eligibility: personnel costs, procurement/subcontracting, VAT eligibility (slide 27-46) • 5. Communication and visibility (slide 47-50)

3. Overview of the Implementation and the Payment process Start of the Action End of the Action Payment request submitted Final payment Cost eligible Costs not eligible (except payment request)* Costs not eligible Implementation of the Action, continuous monitoring by INEA Preparation of the payment request Payment procedure Amendment: duly justified at the latest 3 months before the end of the Action* INEA selects costs for in-depth control Duration as specified in the GA 60 days Max. 90 days (+ time taken to respond to sampling)

4. Part 1: Project reporting and INEA follow up

5. Reporting • One single reporting period for most of the Actions: from the starting date to the completion of the Action • Monitoring of the Action by INEA based on the activities/milestones • Coordinator/beneficiary to provide information to INEA on the progress/completion of the activities/milestones on a regular basis (at least every 3-6 months) • Once milestone is achieved, inform INEA (when relevant provide means of verification of the milestone). In case of delays, inform and discuss impact on the Action with INEA. • No specific template to report the progress. Ask your PO/PM.

6. DSI validation • Each DSI has defined a validation approach, which checks whether the implementation covered by the grant complies with the key requirements of the DSI • This validation is included in your GA as one or more validation milestones • Successful completion of the validation milestone(s) is a precondition for submission of the request for payment • Means of verification must be provided to INEA (for example confirmation email from relevant EC services and/or provision of the test/validation report)

7. Example: eIDDSI validation • eIDAS node setup: • testing of the eIDAS node with DIGIT; • DIGIT issues testing reports to the beneficiary that is shared with INEA. • Connection of e-services to the eIDAS node: • Remote demonstration showing the cross-border authentication to the e-services covered by the Action (preferably with the notified eID schemes & done in production). INEA and DG CNECT participate • Links to all e-services provided to INEA; • Screenshots demonstrating the cross-border authentication provided to INEA , prepared ahead or after the remote meeting, done in production environment and with the use of notified eID schemes; • eID DSI Owner provides the acceptance to INEA.

8. BRIS DSI validation • The BRIS Conformance Testing Service offered by the CEF BRIS DSI core service platform and BRIS DIGIT will be used to validate the result of BRIS actions funded under CEF grants. • The DIGIT-BRIS team have developed an on-boarding strategy for validation. The strategy contains the following steps which have been described by DIGIT-BRIS testing strategy: • Connectivity testing: verifying the successful exchange of messages between e-Delivery gateways for the profile – the so called pmode - that has been agreed upon for BRIS • Integration testing: verifying the integration of a local – e-Delivery compliant - gateway with the respective back-office (business register • After successful achievement of these two tests, the exchange of BRIS messages via the e-Delivery gateways will be tested. The more business-oriented testing is divided in the following steps: • Standalone testing: verifying the correct implementation of any business rule (validation) that Business Registers need to implement • Bi-lateral testing: verifying the correct exchange of message with the ECP platform • DIGIT-BRIS has created testing reports describing the result of each of these tests. • A specific milestone has been included in each grant agreement to foresee a conformance testing with the BRIS core service platform.

9. eDelivery DSI validation • Objective: to ascertain that the actions funded by CEF grants are complying with the relevant technical specifications of the CEF eDelivery Digital Service Infrastructure (DSI) and meet the policy objectives of DG CNECT. The beneficiaries perform the validation testing with eDelivery support team. • Validation milestones: • Connectivity testing for all actions deploying Access Point(s) and/or Service Metadata Publisher(s) with AS4 profile. Information is available on: https://ec.europa.eu/cefdigital/wiki/display/CEFDIGITAL/eDelivery+Connectivity+testing • Conformance testing for all actions developing own data exchange solution(s) and/or upgrading existing data exchange solution to support, and duly comply with, the CEF eDelivery standards. Information is available on: https://ec.europa.eu/cefdigital/wiki/display/CEFDIGITAL/eDelivery+Conformance+testing • The tests are performed in a production environment, i.e. an operational environment where users can perform actual business transactions • Please contact in due time (at least 1 month) before indicative completion dates of validation milestones, the CEF eDelivery support via e-mail: cef-eDelivery-support@ec.europa.euto start the testing process. • The information on available eDelivery services can be found here: https://ec.europa.eu/cefdigital/wiki/display/CEFDIGITAL/eDelivery+Service+Desk

10. eInvoicing DSI validation • The eInvoicing Conformance Testing Service offered by the CEF eInvocing DSI core service platform will be used to validate the result of both types of actions funded under CEF grants: • Uptake of eInvoicing solutions by public authorities: • Support the implementation of the European standard (EN) in existing eInvoicing solutions. • Scope: compliance of solution with the European eInvoicing standard developed by CEN TC/434 and its syntaxes, such as ISO/IEC 19845:2015 (UBL 2.1), UN/CEFACT CII. • A specific milestone has been included in each grant agreement to foresee a conformance testing with the eInvoicing core service platform. • The testing of the of the upgrade and/or updated solutions is offered by DIGIT. An acceptance report is issued by DIGIT to the beneficiary that is shared with INEA. • The test infrastructure may be used freely at any point in the lifecycle of the action so as to prepare for the formal validation and avoid surprises near the end of the actions. • This validation certificate is required for the approval of the final technical report and for the final (and only) payment for the action's implementation.

11. eProcurement DSI validation • By the end of the action, each of the services deployed (ESPD, eCertis, eTendering interface, Contract Register, etc.) must be running in production and be validated against the EC test service. • A remote meeting (video-conference) will be organised with DG GROW and INEA, where the beneficiary/ies will demonstrate compliance of the service(s) implemented. • Further details for the validation of each service are given in the FAQs (Q&A 6): https://ec.europa.eu/inea/sites/inea/files/2019-2_eprocurement_faqs_batch2_03092019.pdf • Actions deploying eDelivery will also have to pass the conformance and/or connectivity tests that are provided by the eDelivery Core Service Platform. Conformance testing: https://ec.europa.eu/cefdigital/wiki/display/CEFDIGITAL/eDelivery+Conformance+testing Connectivity testing: https://ec.europa.eu/cefdigital/wiki/display/CEFDIGITAL/eDelivery+Connectivity+testing • Screenshots demonstrating the implementation of the service(s) in production environment will be taken during the meeting by the eProcurement DSI Owner. • eProcurement DSI Owner provides the acceptance report to INEA.

12. ODR DSI validation • An action should result in the successful completion of: a) interoperability testing between the relevant beneficiary’s system and the ODR platform; b) relevant connectivity/conformance testing for eDelivery. • INEA will invite the beneficiary to contact the relevant services of DG JUST at EC-ODR@ec.europa.eu to arrange the validation. A remote meeting may be organised. • DG JUST DSI Owner will provide an acceptance report to INEA. Further details for the validation are given in the FAQs (Q&A 7): https://ec.europa.eu/inea/sites/inea/files/2018-4_odr_faqs_batch1_final_03102018.pdf • Actions deploying eDelivery will also have to pass the conformance and/or connectivity tests that are provided by the eDelivery Core Service Platform. Conformance testing: https://ec.europa.eu/cefdigital/wiki/display/CEFDIGITAL/eDelivery+Conformance+testing Connectivity testing: https://ec.europa.eu/cefdigital/wiki/display/CEFDIGITAL/eDelivery+Connectivity+testing

13. Cybersecurity DSI validation • For 2016-2017 calls: MeliCERTes interoperability test report • For 2018 call: the validation depends on the Objective you have applied to: Obj. 1: CSIRTs: demonstrated sustained interaction with or use of MeliCERTes on an on-going basis Obj. 2/3/4: OESs; NCAs; SPOCs; CCAM: The beneficiary has joined a relevant European Level Sectoral ISAC, and/or has participated in events organised by the ISAC’s facilities manager (set-up by the European Commission) and, where relevant, has made use of the supporting services from that manager More information will be given to you by the PO in the coming months

14. Part 2: Changes to the grant agreement: amendments, suspension and termination

15. Changes to the grant agreement Please keep INEA informed of any changes affecting your Action (don’t wait until the end of the Action – it might be too late). INEA will advise you how to treat your specific case. Circumstances that may require modification of the GA: • Amendment (most frequent), depending on the type of change: • Formal Amendment (i.e. change of scope, duration, addition/removal of beneficiaries) • Amendment Letter (i.e. change of the bank account, modification of implementing body/affiliated entity, change of coordinator/beneficiaries’ details) • Acknowledgment of receipt by the Agency (i.e. change of the contact person, some budget transfers) • Suspension • Termination

16. AMENDMENT • Shall not have the purpose or the effect of making changes which would call into question the award of the grant. They shall not result in unequal treatment of applicants. • Amendments should be an exception. Will only be accepted in duly justified and substantiatedcases. • Request for Amendments must be submitted in a dedicated letter signed by the authorised representative at the latest 3 months before the action completion date. • Before submitting a formal request, discuss with the PM! Some amendments may require the submission of additional documents.

17. Processing of the amendment requests

18. Budget transfers  GA II.22 • Adjustments between budget categories and activities of each beneficiary and between beneficiaries are allowed without this being considered an amendment if they do not effect the scope of the Action (but to be explained in the final technical report) • However, beneficiaries may not add costs relating to subcontracting not provided for in Annex I, unless such additional subcontracts are approved by the Agency in accordance with Article II.10 GA • Request to transfer the budget to subcontracting to be sent to INEA PO via email (if not part of formal amendment request) and to include: the reasons for the addition/increase of the subcontracting, indicating the amounts and tasks to be subcontracted.

19. Suspension  GA II.15 The GA may be suspended by : • Coordinator: if exceptional circumstances (e.g. force majeure) make such implementation impossible or excessively difficult; • Agency: in case of breach of contractual obligations; following an evaluation of the progress of the project, in particular in the event of major delays in the implementation of the action; cases of errors, irregularities or fraud • Effects of the suspension: • Resumption of the implementation -  an amendment to the Agreement needs to be made in accordance with Article II.12. • Costs incurred during the suspension of the Action will not be covered by the grant or reimbursed. • Termination of the grant agreement

20. Termination  GA II.16 The GA may be terminated by : • Coordinator (termination of the whole Action or the participation of one or more beneficiaries) • Formal letter to be submitted to INEA including reasons, and specifying the date of effect. • If applicable, opinion of the other beneficiaries should be provided. • The Agency (implementation not in line with Annex I, breach of substantial contract obligations, change of situation of the beneficiary, changes to the action calling into question the decision to award the grant, errors, fraud, irregularities). • Agency will formally notify the coordinator of its intention to terminate the Action. • The coordinator will be invited to submit observations within 45 days and for cases of breach of contract obligations,  to indicate the measures taken to ensure that the obligations under the GA are fulfilled • Effects of the termination: • Coordinator to submit payment request within 60 days from the date the termination takes effect. • Payments: limited to the actual level of implementation of the Action on the date when the termination takes effect. • If no request for payment is submitted, no reimbursement of costs. • Improper termination: the Agency may reduce the grant or recover the amounts unduly paid in proportion to failings in question

21. Part 3: Final reporting and payment

22. GA 4.1.2, 4.1.3 and II.23, II.24, II.25 Request for payment  • To be accepted, the payment request has to be complete and include: • Final Technical Report • Financial Statements (Individual Financial Statement prepared by each beneficiary + Consolidated Financial Statement prepared by the coordinator) • Certificate on the Financial Statement - CFS (if applicable) • Payment requests that are not complete are rejected • All up-to-date templates are available on INEA CEF TELECOM Beneficiaries Info Point • Request for payment of the balance submitted within 60 days following completion date of the action. • It is advisable to send draft documents to INEA PO/PM in charge of your Action to avoid rejections of payment request/requests for additional information

23. Payment process

24. GA II.23, and II.25 Final Technical Report  • Reports on the implementation of the Action and provides sufficient details on the overall completion, including per activity level • If some activities/tasks are not or are partially completed, this should be clearly identified, justified and if necessary reflected in the lower completion rate of the activity (methodology used to calculate the completion rate should be explained). • The technical completion rate (%) should be calculated on the actual completion date or at the latest by the date of the submission of the final report. • The Agency may reduce the grant amount either for poor, partial or late implementation or for breach of contractual obligations (see Article. II.25.4). • More information: INEA information note on poor, partial or late implementation

25. Final Technical Report (section 2.2)Example Lower completion rate is a result of the lower number of workshops organised (milestone 1) which affects the implementation of the Action (for example one workshop for a key constituency was not organised because the beneficiary was late with the Action and therefore it is not justified).

26. Final Technical Report (section 2.3 & 4)

27. Final Technical Report (section 3)

28. Final Technical Report (section 5)

29. Final Technical Report (section 2.6)

30. Payment: Financial Statements Individual Financial Statement: to complete with all costs incurred Consolidated Financial Statement: aggregates the incurred by all beneficiaries • All costs claimed need to be sufficiently described to allow the Agency to understand the nature of the costs and its link to the Action • No need to provide other supporting documents (i.e. invoices) with the request for payment • Some supporting documents will be requested with the sampling (i.e. invoices, procurement documentation, declaration of personnel costs) • All costs to be recorded in the appropriate accounting system • If general accounts in currency other than the EUR, please follow the guideline on the currency conversion • Checks/ Audits possible during the GA duration and until 5 years after the balance payment [3 years in case of grant lower than EUR 60,000]

31. Example: individual financial statement (cost description) Provide Comprehensive description of the costs! Fill in all relevant fields!

32. Payment: Certificate on the Financial Statement (CFS) • CFS to be submitted for each beneficiary (each affiliated entity and each implementing body), if: • (i) the amount of payments the beneficiary requests as reimbursement of actual costs as referred to in Article 3(a)(i) is EUR 325 000 or more; • (ii) the maximum grant amount indicated for that beneficiary, its affiliated entities and implementing bodies in the estimated budget as reimbursement of actual costs is EUR 750 000 or more. • The following documents need to be submitted: • Agreement between the beneficiary and the auditor: Terms of Reference for an Independent Report of Factual Findings on costs declared under a GA financed under the CEF: • Report by the auditor: Independent Report of Factual Findings on costs declared under the CEF, together with the table for each cost category and defined in section A-F of the table. Including Annexes: • Annex 1: Implementation contracts list • Annex 2: CFS sample transactions

33. Part 4: Eligibility of costs

34.  Types and categories of costs • GA 3(a)(iv) & II.19 Types of costs • Direct – cost directly linked to the implementation of the Action. • Indirect– cannot be identified as specific costs directly linked to the implementation of the Action (e.g. overheads): • Examples (non-exhaustive): rent, utilities (water/gas/electricity/phone), maintenance, IT costs and equipment depreciation, office supplies, postage etc. • Are not claimed separately but are calculated as a fixed flat-rate of 7% of the total eligible direct costs minus subcontracting costs. Categories of costs • Personnel costs • Subcontracting costs • Other direct costs

35.  Eligibility of costs GA II.19 • Note: Guidelines on the eligibility of costs under the CEF • Eligible costs are costs actually incurred by the beneficiary(ies), [affiliated entities and implementing bodies] which: • Are incurred during the action duration; • Are indicated in GA Annex III; • Are necessary for the implementation of the Action; • Are identifiable and verifiable; • Comply with tax and social obligations; • Are reasonable, justified and comply with sound financial management principles • Examples of ineligible costs: return on capital, deductible VAT, contributions in kind from third parties, …

36.  Personnel costs GA 3. (a) & 10 II.19.2 (a) • Standard case: Staff working under an employment contract (or equivalent appointing act) assigned to the action. • Other cases: The costs of the natural person (individual) under a direct contract with the beneficiary other than an employment contract (e.g. a civil contract, a freelance/expert contract, in-house consultant) or a secondment to the beneficiary against payment. Provided that: • they work under conditions similar to those of an employee; • the result of their work belongs to the beneficiary • their costs do not differ from the costs of staff under an employment contract. • Costs of personnel include actual salaries, including all tax and social security contributions, and other benefits if part of remuneration package. • No overheads/indirect costs to be included!

37. Staff provided by an external company ! • The beneficiary entrusts services to a company (legal person) for the implementation of certain tasks of the action. • The company provides staff that works on the Action. • The costs of this staff may not be eligible personnel costs as they were not provided by an employee or an individual (natural person) with a direct contract with the beneficiary but by a company (legal person). • These costs may only be treated as (sub)contracting costs. • The beneficiary should award contracts to the tenderers offering best value for money in line with the requirements of Art.II.9 and Art.II.10 MGA.

38. How to calculate the personnel costs to be charged to the Action? • Step 1: Determine the number of hours worked on the Action for each person working on the Action • Step 2: Calculate the hourly rate (using actual or unit costs) • Step 3: Multiply the number of hours worked on the Action by the hourly rate for each person

39. Step 1: Determine the number of hours worked on the Action • To determine the number of hoursworked on the Action, time recording system isrequired • Basic conditions to berespected by all CEF beneficiaries (seeCommission Decision(2016)478): • The system should record all working time including absences and may be paper or electronically based. The time records must be approved by the persons working on the action and their supervisors, at least monthly. • If the beneficiary has no adequate time recording system in place, it is considered to be a serious and systematic weakness of internal control. • As an exception, for persons working exclusively on the co-funded action, there is no need to keep time records, if the beneficiary signs a declaration confirming that the persons concerned have worked exclusively.

40. Step (2a): Calculate the hourly rate/unit cost by using the following methods:

41. Step (2b): Calculate the hourly rate/unit cost *Possible only when declaring actual personnel costs, not unit costs

42. Step (2c): Calculation of productive hours: 3 methods

43. Example: Individual annual productive hours

44. Example: Standard Annual Productive Hours

45. Step 3: Personnel costs to be charged to the Action

46. To Remember when calculating personnel costs ! • To calculate the hourly rate, the beneficiary must use the annual or monthly* personnel costs and the number of annual or monthly* productive hours for each financial year covered by the reporting period concerned. If a financial year is not closed at the end of the reporting period, the beneficiary must use the hourly rate of the last closed financial year available. • The total number of hours declared in EU or Euratom grants, for a person for a year, cannot be higher than the annual productive hours used for the calculations of the hourly rate. • The maximum number of hours per person that can be declared for the CEF grant are = Number of annual productive hours (e.g. 1720) – number of hours declared by the beneficiary under a different EU grant (e.g. H2020) * Possible only when declaring actual personnel costs, not unit costs

47.  Sub-contracting costs GA II.10 • Subcontracting of tasks forming part of the action may be eligible provided that: • It covers only a limited part of the action • It is justified (as per the nature of the action and what is necessary for its implementation) • Estimated costs are identified in Annex III GA • If not provided for in Annex I GA, recourse to subcontracting is communicated by the coordinator and approved by the Agency • Procurement rules apply (for contracting authorities, national procurement rules/ EU Directives; best value for money/ lowest price below EU thresholds + private entities ;) • Non-compliance may lead to cost ineligibility or reduction of the grant

48.  Procurement GA II.9 In case you procure goods, works or services necessary for the Action: • Contracting authorities/ entities within the meaning of EU Directives shall follow applicable national / EU Directives public procurement rules • For Beneficiaries other than contracting authorities/ entities, sound financial management • Award to tender offering best value for money or, as appropriate, the lowest price • Procurement will be verified at payment time together with the verification of the sampled costs (and documentation should be readily available for audit purposes) • Non-compliance will lead to rejection of costs or reduction of support

49. VAT eligibility under CEF

50.  GA II.20, II.21, II.27 Financial documentation • Need for appropriate accounting system and documentation to facilitate reporting and readily available upon request: • No invoices or bank statements to be provided together with financial reports, but INEA will ask for sampling • SAP printouts and bank statements accepted for payment documentation • Checks/ Audits possible during the GA implementation and until 5 years after the balance payment [3 years in case of grant lower than EUR 60,000] • Procurement documentation will be requested