CEF Telecom Actions

1. CEF Telecom Actions Grant agreement preparation Brussels, August 2016

2. Contents • Introduction - purpose / role of INEA • Part 1: Preparation of the Grant Agreement • Timetable for preparing and signing • Key elements of the grant agreement • Part 2: Implementation of the Grant Agreement • Pre-financing / payments • Reporting requirements, including validation • Eligibility of costs – financial documentation – procurement aspects • Other key aspects and follow-up

3. INEA at a glance (I) • An Executive Agency established/supervised by the Commission (parent DGs MOVE, RTD, ENER, CNECT) • Entrusted with certain tasks relating i.a. to the management of the CEF Programme and the related Union budget lines • We have our own legal personality and are represented by a Director – who is an official appointed by the Commission • We are managed by a Steering Committee nominated by the Commission, and by the Director aided by a Management Team • Our proceduresfollow the EU Financial Regulation and the Commission rules

4. INEA at a glance (II) European Commission INEA Implements the CEF programme on behalf of the EC Manages entire project lifecycle and interacts with beneficiaries Provides key feedback to the EC • Political decisions regarding the CEF programme • Defines strategy, objectives and priority areas of action • Supervises the Agency

5. Part 1 Preparation of the Grant Agreement

6. Overview of GA preparation • INEA sends draft GA for review • Coordinator provides comments within 2 weeks • Coordinatoragrees on the draft GA • INEA internalprocess to finalise the GA • INEA sends GA for signature to the coordinatorwhoshould return itsignedwithin 1 week. • The GA enters into force on the date of the last signature (INEA Director) • INEA sends a copy of the fully signed GA to the Member States concerned for information with the beneficiaries in copy

7. Drafting the grant agreement (1/3) •  • GA ANNEX I • Scope and objectives of the Action • Summary of the action, main scope, objectives and technical data Ref: Section "Summary of the action" in application form A1 • Context and possible evolutions since application

8. Drafting the grant agreement (2/3) •  • GA ANNEX I Activities • List of activities foreseen in the grant agreement • Detailed description of each activity and where relevant tasks, sub-activities, including performance indicators where relevant. • Milestones • Should be clear and logical 'check points' during the implementation of an Activity • The 'Means of verification' should be easy to verify • At least one milestone per Activity

9. Drafting the grant agreement (3/3) •  • GA ANNEX III • Estimated budget • Revisit proposed budget • Are the costs* still up to date ? Beneficiary must explicitly re-confirm costs. • Activities not retained for funding? • Review the planned financing sources of the action taking into account the maximum grant amount • Review the indicative breakdown of estimated eligible costs by activity, beneficiary and cost category • * Costsshouldbecosts to beincurred ! • For eligibilitycriteria, see Articles II.9, II.10, II.19, II.20 and II.21 GA

10.  The Coordinator • GA II.1.3 • Signs by default on behalf of all beneficiaries (mandate template GA Annex IV) • Receives all payments made by the Agency • Is the intermediary for all communications with the Agency • Submits the requests for payment

11. Signature of the grant agreement • Coordinator will receive a sealed PDF version with watermark via E-mail for signature: • Establish the signature process within your organisation inadvance, in particular who has mandate to sign (legal representative) ! • Coordinator: • Collect mandates in advance (Annex IV) • E-signature: • The GA may be signed with an advanced electronic signature based on a qualified certificate as defined by the eIDAS Regulation (Regulation (EU) No 910/2014)

12. Part 2 Implementation of the Grant Agreement

13.  Pre-financing • GA 4.1.2 and II.24.1 • Pre-financing only applicable where provided for in the Call for proposals (e.g. for actions with a duration of more than 12 months) • Pre-financing of […]% of the maximum grant amount • Paid within 30 days upon entry into force of the agreement • [subject to the receipt of a financial guarantee of EUR …]

14.  • GA 4.1.2, 4.1.3 and II.23, II.24 Payments • [Total amount of pre-financing + interim payments (if applicable – see call for proposals) shall not exceed 90% of the maximum grant amount] • [Request for interim payment following the end of each reporting period (except the last one)] • Request for payment of the balance within 60 days following completion date of the action • Time limit of 90 days for the Agency to make the payments

15.  Reporting requirements • GA II.23.2 [ Interimtechnical report / financialstatement (if applicable) • To be submitted with requests for interim payment, within 60 days of the end of the reporting period(s) • Templatesprovided by INEA (GA Annexes V and VI) • Certificate on Financial Statement (CFS), if applicable (GA Annex VII)] ] • Final technical report / financial statement • Within 60 days following completion date • Template provided by INEA (GA Annexes V and VI) • Final report includes confirmation of compliance with the core service (validation) • Certification by the concerned Member State(s) • Certificate on Financial Statement (CFS), if applicable(GA Annex VII)

16.  Eligibility of costs • GA II.19 • Templates for cost claims will be made available on INEA website • 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, …

17.  Personnel costs (1/2) • GA 3. (a) & 10 II.19.2 (a) • Staff workingunder an employmentcontract (or equivalentappointingact) assigned to the action, under the conditions set out in the GA. • 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! • Time recording system isrequired – basic conditions to berespected by all CEF beneficiaries (see C(2016)478). • Calculation of the annual productive hoursdone in accordance withparticipant'susualaccounting practice.

18. Personnel costs (2/2) -> 2 differentpossibilitiesto declareeligible staff costs: • ACTUAL personnel costs, or • AVERAGE personnel costsbasedon usualcostaccounting practices & in compliance with conditions laid down inCommission Decision C(2016)478(unit costs). -> For SME ownerswho do not receiveanysalary, unit costs must bedeclared– hourly rate based on a fixedmonthlyallowancemultiplied by a country coefficient (seeAppendix of C(2016)478).

19.  Indirect costs • GA 3(a)(iv) & II.19.3 • Costswhich are not specificcostsdirectlylinked to the implementation of the action and cantherefore not beattributed to it(e.g. overheads). • Declared on the basis of a fixed flat-rate of 7% of the total eligible direct costs minus subcontracting costs [and financial support to third parties]

20.  • 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

21.  Procurement • GA II.9 • Award to tender offering best value for money or, as appropriate, the lowest price • 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 • 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

22.  Sub-contracting costs • GA II.10 • Subcontracting of tasksforming part of the action maybeeligibleprovidedthat: • It coversonly a limited part of the action • It isjustified (as per the nature of the action and whatisnecessary for itsimplementation) • Estimatedcosts are identified in Annex III GA • If not provided for in Annex I GA, recourse to subcontractingiscommunicated by the coordinator and approved by the Agency • Procurement rules apply (best value for money/ lowest price; for contracting authorities, national procurement rules/ EU Directives) • Non-compliance may lead to costineligibility or reduction of the grant

23. Frequent audit findings (by INEA and the European Court of Auditors) • Costs • Outside eligibility period • Staff costs (include overheads, lack of proper time recording) • Not relevant (necessary) or excessive • Public procurement • Not using/avoiding EU level procedures, including slicing • Lack of publication - Unlawful selection criteria (e.g. excessive requirements regarding turnover) • Amendments/additional activities • Not foreseen in contract • 'Unforeseeability' or 'Urgency' not justified

24. 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 • 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

25. Amendments •  • GA II.12 • Shall not have the purpose or the effect of making changes which would call into question the award of the grant • Amendments should be an exception. Will only be accepted in duly justified and substantiated cases • Request for Amendments must be submitted by specific letter at the latest 3 months before the action completion date

26. Publicity • Publicity regarding the EU funding is an obligation. We expect at least the following: • Information on beneficiaries’ websites • Logo on cover of reports (+ disclaimer) • Press releases, articles, presentation, etc. of activities co-financed by CEF must include a reference to EU funding • Keep us informed about relevant events as we would like to publicise it too! Please see our guidelines on publicity and downloads on INEA's website

27. Project follow-up (1/2) • The formal reporting requirements form the basis to monitor the implementation of the Action During the Action the INEA Project Manager (PM) will: • Monitor on a regular basis the implementation of the Action and verify that it is consistent with the grant agreement, primarily focusing on the key milestones and the corresponding means of verification; • Deal with ad hoc issues and problems, e.g. delays; • At the end of the action: • Assess, on the basis of the final technical report and financial statement, whether the Action has achieved its objectives; • Verify, together with a financial officer, that the costs are eligible and relevant, procurement rules have been respected, publicity measures followed etc, in order to determine the final amount of the grant.

28. Project follow-up (2/2) • Coordinators should contact the INEA project manager immediately when an issue occurs to agree how to proceed • Be open and put all facts on the table – otherwise it could be too late to solve a problem! • INEA is there to help and support projects – use us !

29. Disclaimer • The content and conditions of the grant agreement always • prevail on any different information, which may be included in this document and/or in any formal or informal communication with the beneficiaries such as the approval of reports, exchange of emails, etc. • European CommissionInnovation and Networks Executive Agency (INEA) • Chaussée de Wavre 910 - W910 03/02 - B-1049 Brussels • http://inea.ec.europa.eu