FP 7 — FINANCIAL AND PROJECT MANAGEMENT P

FP 7 - FINANCIAL AND PROJECT MANAGEMENT P. Ignatiadis & Prof Vassilios Zacharopoulos ELKE TEI CRETE March 2011 FP 7 Training Courses for TEI Crete 1

Overview • Basis for FP 7 Grant Agreement • Status/timing • Terminology • Similarities with FP 6 contract • Differences and improvements versus FP 6 contract • Open issues 2

Basis for FP 7 Grant agreement • Lessons learned from FP 6 contract • Financial Regulation and Implementing Rules (revised) • FP 7 Rules for Participation 3

Status & Timing • Inter-service Working Groups on FP 7 Legal & Financial Issues, Reporting (started in spring 2006) • Consultation with Members States & associated countries and Sounding Board • Target: launch of inter-service consultation in December, Adoption: February 2006 4

Terminology Sources: FR/IR & FP 7/Rf. P • “Contract” becomes “Grant Agreement” • “Contractor” becomes “Beneficiary” • “Instruments” become “Funding Schemes” • “Audit certificate” becomes “Certificate on Financial Statement” 5

Similarities with FP 6 contract • Signature by coordinator & Commission • Accession of beneficiaries via “Form A” • Later accession of beneficiaries via “Form B” • Entry into force upon signature by coordinator & Commission 6

Similarities with FP 6 contract • Structure: • Core part: GA parameters, • Annex I: Do. W, • Annex II: General Conditions, • Annex III: Specific provisions for funding schemes • Annex VII: Form D terms of reference for the certification of costs and Form E certification on the methodology (NEW) • Consortium Agreement mandatory (except if excluded by Call) 7

FP 6 contract-FP 7 GA differences & improvements o Financial provisions 1. Payment modalities 2. Eligible costs 3. Indirect costs 4. Certificates 5. Third party contribution and subcontracts 6. Upper funding limits 7. No financial collective responsibility o Other provisions n Reporting n Amendments 8

1. Payment modalities n One pre-financing (upon entry into force) for the whole duration n Interim payments based on financial statements (payment = cost accepted * funding rate) n Retention (10%) n Final payment 9

2. Eligible Costs (1) n Eligible o actual* o during duration of project o in accordance with its usual accounting and management principles o recorded in the accounts of benficiary n non-eligible (identifiable indirect taxes including VAT…) 10

2. Eligible Costs (2) *Average personnel costs accepted if : - Consistent with the management principles and accounting practices & - they do not significantly differ from actual personnel costs= if identified according to a methodology approved by the Commission (NEW) 11

3. Indirect Cost : o For all: n either actual overhead or simplified method n flat rate of 20% of direct costs minus subcontracting and 3 rd parties not used on the premises of the beneficiary. o For Non profit Public Bodies, Secondary and Higher Education establishments, Research Organisations and SMEs unable to identify real indirect costs, may apply for a flat rate of 60% for funding schemes with RTD. 12

4. Certification (1) n Certification will be provided on the basis of “Agreed Upon Procedure” (AUP) n AUP the auditor provides information according to a specific format specified via agreed terms of reference (To. R) n To. R is annexed to the grant agreement (Annex VII) n AUP is derived from common practice in audits and corresponds to international audit standards n 2 types of AUP: Report of factual findings on o expenditure verification o system verification 13

4. Certification (2) Certificate on financial statements (CFS) = AUP for expenditure verification n Mandatory when requested funding reaches 375, 000 Euro (except for project of 2 years or less: the CFS is submitted at the end) n Mandatory for every beneficiary, except if a certification on the methodology is provided 14

4. Certification (3) Certificate on the methodology= AUP for system verification n aims at certifying the methodology of calculating (average) personnel costs and overhead rates n Valid throughout FP 7, on a voluntary basis, must be accepted by EC n Particularly aimed at legal entities with multiple participation n Waives the obligation of certificates for interim payments n Simplified certificate for final payments 15

4. Certification (4) Advantages of system certification : n. The EC will receive consistent certifications and cost claims cleaned from errors n. Beneficiaries will gain legal security n. Beneficiaries in many projects will have to submit less certificates n EC and beneficiaries will have less processes to handle: less certificates n EC gains significantly in terms of assurance on legality and regularity 16

4. Certification (5) Who can provide these certificates : n Qualified auditors under the 8 th Directive n. Independent n. Public bodies, secondary and higher education establishments and research organisations may opt for a competent public officer 17

5. Third party contribution and subcontracts Third parties carrying part of the work • Subcontracts: tasks have to be indicated in Annex I • • • awarded according to best value for money External support services may be used for assistance in minor tasks (not to be indicated in Annex I) Specific cases: EEIG, JRU, affiliates carry out part of the work (special clause) Third parties making available resources • “Third parties”: to be indicated in Annex I, • Costs may be claimed by the beneficiary • Resources “free of charge” may be considered as receipts 18

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7. No financial collective responsibility o Guarantee Fund 20

Reporting (1) o Periodic reports to be submitted by coordinator 60 days after end of period: - progress of the work - use of the resources and - Financial Statement (Form C) o Final reports to be submitted by coordinator 60 days after end of project: - publishable summary report, conclusions and socioeconomic impact - covering wider societal implications and a plan on use and dissemination of results 21

Reporting (2) o Commission has 105 days to evaluate and execute the corresponding payment o No tacit approval o After reception Commission may: n Approve n Suspend the time-limit requesting revision/completion n Reject them giving justification, possible termination n Suspend the payment 22

Amendments o Coordinator requests amendments on behalf of the consortium o Coordinator can accept an amendment proposed by the Commission (NEW) o For addition/withdrawal tacit approval after 45 days 23

Sanctions o Recovery procedures o Liquidated damages 24

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