1 / 52

COMMON PROVISIONS

COMMON PROVISIONS. 2. FINANCIAL ASPECTS. CONGRATULATIONS. GRANT The EU contributes to the costs The EU does not pay for a service/deliverable/product Successful utilisation of the grant depends on: Successful implementation of the project, AND

yagil
Download Presentation

COMMON PROVISIONS

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. COMMON PROVISIONS 2. FINANCIAL ASPECTS

  2. CONGRATULATIONS • GRANT • The EU contributes to the costs • The EU does not pay for a service/deliverable/product • Successful utilisation of the grant depends on: • Successful implementation of the project, AND • The quality of the project accounts/financial report • If the the financial rules are not followed to costs may be declared ineligible – as a result the final grant may be reduced.

  3. Reference documents • Grant Agreement (Art 1 & 2) • Common Provisions (CP) (Art 15.2, 24, 25 and 26) • Application guide (Env p 42-52, Inf p 45-54 , Nat p 60-70) • Financial Forms • Guidelines to forms, • http://ec.europa.eu/environment/life/toolkit/pmtools/lifeplus/financial_reporting.htm or /timesheets

  4. CONTRIBUTION PRINCIPLES • The grant agreement sets the contribution as a fixed percentage of total eligible costs and a maximum contribution amount.(art. 24.1) • It may not exceed the amount necessary to balance project expenses and revenues. • All revenues generated by the project must be declared.(art. 24.4) • If an associated beneficiary reduces its contribution, the coordinating beneficiary must find additional resources.(art. 4.5)The Life contribution will not be increased ! • Commission may proportionally reduce the Community contribution.(art. 18 and 24.5) • Eligible expenses are limited to the amounts foreseen by cost categories. (30 000 € and 10% overspending rule) (art 15.2) LIFE09 Kick-off Meeting, 13 January, 2011, Warsaw

  5. METHODS OF PAYMENT OF THE CONTRIBUTION (art. 28) • General rule : 3 instalments : • 1st pre-financing = 40 % of contribution max. amount • Mid-term pre-financing = 30 % of contribution max. amount • Final payment = Balance (maximum 30 %) • Small projects with an implementation period ≤ 24 months or a Community contribution ≤ 300 000 € : • 1st pre-financing increased to 50 % of contribution max. amount • Final payment = Balance (maximum 50 %) LIFE09 Kick-off Meeting, 13 January, 2011, Warsaw

  6. THE 1st PRE-FINANCING (art. 28.2) • Grant agreement is signed by both parties • Payment request states coordinating beneficiary and bank data details • A guarantee issued by a bank or an insurance company may be requested by the Commission during the revision phase: • equals the amount of the 1st pre-financing • covers the duration of the project + 6 months

  7. INTERESTS ON PRE-FINANCING (art 24.7) • The coordinating beneficiary shall inform the Commission of the amount of any interest or equivalent benefits yielded by the 1st pre-financing amount. • Interest will be deducted from the final payment. • Exceptions : • When 1st pre-financing ≥ 750.000 € : beneficiary informs the Commission every January how much interest has been earned – Commission sends a Recovery Order. • When 1st pre-financing ≤ 50.000 € : interest not due

  8. Member States and interest on pre-financing For Coordinating Beneficiaries registered as public law bodies by the Commission: • Ministries, regions; departments, länder, provinces etc. • Cities, municipalities, communes • Research centres, universities • Interest on pre-financing will not be recovered by the Commission. • However, it must be reported in the financial statement as income to the project. • These beneficiaries are not entitled to interest in case of late payment of the grant by the Commission . LIFE09 Kick-off Meeting, 13 January, 2011, Warsaw

  9. THE MID-TERM PRE-FINANCING (art. 28.3) • After at least 150 % of 1st pre-financing has been used • Exception : Mid-term payment possible even if the 1st pre-financing payment has not been paid : • when at least 60 % of max. contribution has been spent • amount = % set in grant agreement x eligible costs to date • Paid upon approval by the Commission of : • a request for payment • a mid-term technical report + statement of expenditure • auditor’s details • Mid-term reports must be submitted no later than 9 months before the end of the project

  10. THE BALANCE (FINAL PAYMENT) (art. 28.4) • Upon approval, by the Commission, of : • the final technical report • the final statement of expenditure and income • the audit report if required (cf. art. 31) • Final reports must be submitted no later than 3 months after the end of the project

  11. Independent Financial Audit (art. 31) • An independent auditor, nominated by the coordinating beneficiary, shall verify the final statement of expenditure and income • for all projects with a max. Community contribution ≥ 300 000 € • following the format provided on the Life website / toolkit • The auditor will verify : • the implementation of the project • the eligibility of declared costs + compliance with CP • compliance of costs with national legislation and accounting rules • the declaration of all project income (including interests on pre-financing) • compliance with rules for public and/or competitive tender (art 8.4) • the origin of beneficiaries’ own contribution

  12. REPORTING REQUIREMENTS (art. 29) • Financial report covers the same period as the technical report • Reports follow the guidelines & templates cf. Life website / toolkit • In € • When beneficiary’s accounting is not in €: exchange rate of the 1st working day of the year in which the expenditure is paid (cf. E C B website http://www.ecb.int/stats/exchange/eurofxref/html/index.en.html) • The coordinating beneficiary certifies that the submitted information is full, reliable, true and complies with the CP, that costs are actual, that all income has been declared • Financial supporting documents are not attached but may be requested later. Retained by coordinating beneficiary (art 6.1)

  13. LIFE09 Kick-off Meeting, 13 January, 2011, Warsaw

  14. ELIGIBLE COSTS (art. 25) • Provided for in the budget of the project or have been authorized through an amendment to the grant agreement • Directly linked to, and necessary for, carrying out the project • Reasonable and comply with the principles of sound financial management • Compliant with applicable tax and social legislation • Incurred and recorded in the beneficiaries’ accounts during the lifetime of the project: • legal obligation to pay contracted after the signature of the grant agreement • corresponding action implemented after start date and before end date of the project • fully paid before the submission of the final report LIFE09 Kick-off Meeting, 13 January, 2011, Warsaw

  15. PERSONNEL COSTS(art. 25.2) • Related to employees salaries (no external assistance) • Service contracts : mandatory condition : work in the beneficiary’s premises and under its supervision (timesheets) • NB : civil servants salary costs: sum of public bodies’ contributions must exceed by at least 2 % the sum of civil servants’ costs Supporting Documents Principles • Based on actual time devoted to the project Timesheets • Based on actual gross salary / wages + obligatory social charges Pay slips

  16. Example of budget: Personnel Civil servants 105 € Others 20 € External Assistance 50 € Equipment 25 € Total 200 € Life+ contribution = 50% but Minimum own contribution from public beneficiaries = 105 € + 2 % = 107,10 € Maximum Life+ contribution = 92,90 € CIVIL SERVANTS’ SALARY COSTS (art. 25.2)

  17. Annual personnel costs • Annual gross salary actually paid – no estimates. • Obligatory social charges • Private Pension contributions are eligible if the employer is legally obliged to provide it. • Compensation received from insurance or other schemes in case of sickness, maternity leave, re-employment schemes to reactivate unemployed people etc. must be deducted from annual salary. • Not eligible: i.e. company car, bonuses, similar fringe benefits LIFE09 Kick-off Meeting, 13 January, 2011, Warsaw

  18. Productive time Time of actual work, including: • Overtime and Time worked during national holidays or week ends. • Meetings • Mandatory Training courses LIFE09 Kick-off Meeting, 13 January, 2011, Warsaw

  19. Non productive time • Holidays actually taken • National holidays • Flexitime compensation • Week ends • Sickness/other absences (including maternity leave etc) LIFE09 Kick-off Meeting, 13 January, 2011, Warsaw

  20. Calculation of personnel costs LIFE09 Kick-off Meeting, 13 January, 2011, Warsaw

  21. Recommendations for time sheets/time registration • Identify employee and LIFE project • Daily registration • Ideally detailed per action • Ideally document total hours worked to secure correct calculation of time unit rate • Signed and validated during the first week following the month of registration

  22. Model time sheet LIFE09 Kick-off Meeting, 13 January, 2011, Warsaw

  23. Example 2 – a reliable time sheet LIFE09 Kick-off Meeting, 13 January, 2011, Warsaw

  24. Example of an unreliable time sheet – 29/31 February LIFE09 Kick-off Meeting, 13 January, 2011, Warsaw

  25. Example of an unreliable time sheet – monthly subtotals LIFE09 Kick-off Meeting, 13 January, 2011, Warsaw

  26. Example of an unreliable time sheet- generic time LIFE09 Kick-off Meeting, 13 January, 2011, Warsaw

  27. TRAVEL COSTS(art. 25.3) Principles Supporting Documents Charged in accordance with internal rules of the beneficiary Flight tickets, hotel bills,…. Journeys by car : based on distance and internal rules • Internal rules for re-imbursement of travel expenses • Detailed specification of travel expenses, two lines if necessary, i.e. destination, # of persons, # km, # nights etc. • Group low value travel expenses (supported by accounting documents offering same level of detail, eg. driving log-book). • Excluding costs incurred by external consultants, journeys between home and work place. LIFE09 Kick-off Meeting, 13 January, 2011, Warsaw

  28. EXTERNAL ASSISTANCE(art. 25.4 & application guide) • Tender procedures • must comply with Community and national legislation. • Naming the subcontractor in the revised budget does not exempt the beneficiary from applying the normal tendering procedure. • NEW for LIFE+ - competitive tenders for private beneficiaries – obligatory for orders over €125.000. • Project beneficiaries/co-financiers cannot act as subcontractors/suppliers.

  29. DURABLE GOODS(art. 25.5- 25.12 & Application guide) • For infrastructure and equipment (LIFE ENV, LIFE INF, LIFE BIO) - depreciation only is eligible. • Each beneficiary applies its internal accounting rules for depreciation charges. National accounting standards and the principle of consistency must be respected. • Only depreciation strictly related to the use for the project is eligible: the calculation must take into account the period and the rate of the actual use for the project. • Durable goods which must be depreciated: • placed on the beneficiary's inventory of durable goods • treated as capital expenditure

  30. DURABLE GOODS(art. 25.5- 25.12 & Application guide) • The Maximum Eligible depreciation charges: • Infrastructure costs: 25% of the total purchase cost • Equipment costs: 50% of the total purchase cost • Depreciation of durable goods purchased before the start of the project is not eligible for LIFE+ funding. It is covered by Overheads. LIFE09 Kick-off Meeting, 13 January, 2011, Warsaw

  31. DURABLE GOODS (art. 25.5- 25.12 & Application guide) • PROTOTYPE – 100% eligible • (Only for Life+ Env and Life+ Bio) • Has never been commercialised • Not available as a serial product • Can not be used for commercial activities or sold during 5 years after the project end date LIFE09 Kick-off Meeting, 13 January, 2011, Warsaw

  32. DURABLE GOODS (art. 25.5- 25.12 & Application guide) • Life+ NAT projects • If the beneficiary is a public body or a non-governmental / private non-commercial organisation: • 100% eligible for infrastructure and equipment used extensively in project implementation and assigned to nature conservation after the end of the project. • If the beneficiary if a commercial organisation: • Durable goods must be depreciated. LIFE09 Kick-off Meeting, 13 January, 2011, Warsaw

  33. LAND PURCHASE LIFE+ Nature:“Environmental clause” (art. 35.1) • Costs of land purchase or long-term lease of land/use rights are only eligible for Life+ Nature projects • Purchase prices are based on market terms • Assign the purchased assets definitively to nature conservation activities beyond the end of the project • Coordinating beneficiary ensures that the entry in the land register includes a guarantee that the land will be assigned definitively to nature conservation • Land purchased by private organizations: guarantee that the land property will be transferred to a legal body primarily active in the field of nature protection (if the beneficiary ceases to exist)

  34. OTHER BUDGET POSTS Budget Posts Supporting Documents • CONSUMABLE MATERIAL(art. 25.11) • General office supplies are covered by Overheads Detailed invoices • OTHER COSTS(art. 25.12) • Costs necessary for the project, not falling within a defined category Detailed invoices • OVERHEADS(art. 25.13) • maximum 7 % of the total amount of eligible direct costs, excluding land purchase costs Invoices notneeded • Income(art. 24.4) • Associated beneficiaries, co-financiers and direct revenues Receipts etc

  35. Overheads

  36. Income LIFE09 Kick-off Meeting, 13 January, 2011, Warsaw

  37. INELIGIBLE COSTS Non exhaustive list. See art. 26 of Common Provisions • Costs in any category of expenditure over and above that foreseen in the budget plus 10% and 30 000 € (as referred to in art. 15.2) • VAT (see art. 30) • Costs incurred in relation to activities not foreseen in the project • Costs incurred for the purchase of durable goods or communication material not bearing theLIFE logo (and the Natura 2000 logo, when applicable) • Cost incurred for an action which benefits from aid under other Community financial instruments • Costs for which a beneficiary already receives an operating grant from the Commission during the period in question • Costs related to any action considered as a compensatorymeasure • Costs relating to management plans, action plans and similar plans, drafted or modified in the context of a LIFE+ project, if the related plan is not legally operational before the project end date LIFE09 Kick-off Meeting, 13 January, 2011, Warsaw

  38. Partnership agreements art. 4.8 of Common Provisions • The Commission does not accept or reject partnership agreements - the Commission only highlights possible problems. • To ensure that the participants have the tools to solve their problems. • Not sufficient to refer to the Common Provisions, i.e. liabilities between participants, member states laws in case of dispute, payments from CB to AB. LIFE09 Kick-off Meeting, 13 January, 2011, Warsaw

  39. Specific instructions for Financial Reporting • Do not wait until the mid-term or the final report before preparing theStatement of Expenditures. It is required: • In all reports (Art. 12.2 CP) • At the occasion of all Monitoring Visits • Ensure that Coordinating Beneficiary receives data from Associated Benefifiaries on a regular basis. LIFE09 Kick-off Meeting, 13 January, 2011, Warsaw

  40. Specific instructions for Financial Reporting • Be careful:self-invoicingand invoicing among beneficiaries is not allowed. • Verify that all columns of the financial forms are properly filled-in • Send as soon as possibile the declaration for thenon-recoverability of VATby beneficiaries. LIFE09 Kick-off Meeting, 13 January, 2011, Warsaw

  41. A FEW REMINDERS … (art. 6) • All beneficiaries • Must contribute financially to the project’s costs • Shall maintain up to date books of accounts • Shall keep all supporting documentation for all expenditure and income for at least 5 years after the final payment • Ensure that all invoices include a clear reference to the project and a link to the analytical accounting system • May not act as sub-contractor/supplier to each other (no invoicing among partners !!) LIFE09 Kick-off Meeting, 13 January, 2011, Warsaw

  42. Ineligible on formal grounds - difficult to rectify at a later stage • Register time worked for the project on a daily basis using time sheets. • Respect the public tender/competitive tender. • Provide all information asked for in the financial reporting. • Provide sufficiently detailed description (quantity where appropriate) to justify eligibility. • Costs incurred by non-beneficiaries (Company groups) – not eligible if separate legal entities. • Purchases from sister companies (separate legal entities) and sister departments (same legal entity) – best value and excluding profit, overheads etc (art 26 9th) LIFE09 Kick-off Meeting, 13 January, 2011, Warsaw

More Related