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Finance Helpdesk Newsletter #20

Upcoming Open Workshops

FP7 Financial Audits leaflet published

Potentially major bookkeeping problems associated with FP7 Eligible Costs

Claiming for Equipment Depreciation in FP7.

Non-eligible FP7 costs

FREE downloadable FP7 book V1.13 available now

 

Upcoming Open Workshops:

 

There are still places available for the following upcoming workshops in Brussels, Belgium:

 

16/09/2008 1 Day Marie Curie Financial Workshop. - The workshop will be aimed at project managers and is particularly relevant to anyone who wants to understand the Marie Curie Financial Rules and how to report correctly.

 

17/09/2008 1 Day FP7 Financial Workshop. The Workshop will cover:

                     Differences between FP6 and FP7

                     FP7 Financial Rules

                     Budgeting Rules

                     Flat rate Overheads Vs Real Costs (FC Calculation)

                     Derogation Scheme

                     Cost Recording

                     Eligible Costs

                     In-House Financial Recording Systems

                     Cost Reporting

                     Management Reports (Form C)

                     Audit Certificates

                     Final Payments

 

18/09/2008 1 Day FP7 Contract Negotiation and Project Kick-off - The workshop will be aimed at Project Coordinators and Project Partners of Successful FP7 R&D Proposals.

The Workshop will cover:

                       Differences between FP6 and FP7

                       Negotiations with the Commission

                       Negotiation on Annex 1

                       Grant Preparation Forms

                       Technical Collective Responsibility

                       Financial Viability and Capability of the Coordinator

                       Unique Registration Facility

                       Consortium Agreement

                       Consortium Check-list

                       Distribution of the effort and funding between the partners

                       Negotiations between Partners

                       Role of the Coordinator

                       Project Initiation

                       Cash flow during a typical project

                       Kick-off Meeting

 

19/09/2008 1 Day Proposal Writing Workshop. - The workshop is aimed at people from organisations who are interested in taking part in an FP7 project proposal. The workshops shortcut the learning curve for writing a quality proposal with a higher chance of success and cover such areas as: background reading and considerations before you begin; detailed discussion of the “do’s and don’ts” of each proposal section; budgetary and other financial considerations.

 

23/09/2008 3 Day in-depth FP7 Financial Workshop in Brussels, Belgium. – Only 2 places left.

FP7 Financial Audits leaflet published:

Depending on which method of reimbursement of costs, and the amount of funding a beneficiary requests, the beneficiary may have to provide Certificates on Financial Statement as part of their required reporting.

 

The Finance Helpdesk has produced a leaflet which explains this.

 

To view the leaflet click here.

 

Potentially major bookkeeping problems associated with FP7 Eligible Costs:

A major change in FP7 is that it is an explicit requirement for the first time that all charges (direct and indirect) to the project must appear in the organisations book of accounts. It is how they are actually recorded that determines their eligibility. For example if your accounting department automatically records travel as overhead, they are not a direct chargeable cost. As previous years books of accounts will be closed by the end of a specific project and thus unalterable, any such deviations cannot be corrected as was the case in previous Framework Programs.

We therefore recommend that you ensure your cost recording system is compliant with these new more stringent rules and perhaps implementing changes so things such as travel can be split depending whether it is classed as a direct cost or not. One also must remember that items can only be recoded once.

 

In our opinion, these changes have not been highlighted sufficiently and with the removal of need for most Audit Certificates, such errors may not be picked up until subsequent external audits. Thus organisations may have large future liabilities they are unaware of.

 

Claiming for Equipment Depreciation in FP7:

Assuming that you are claiming under eligible costs, equipment necessary for the project can be depreciated and the can be claimed against the project. How you claim for the equipment depreciation should be according to the normal accounting principals of the organisation. If depreciation is 20% per annum, the charge will be 20% per annum (probably on a daily or monthly basis) from the date of purchase or use in the project, whichever is the later. If the normal depreciation rate for the organisation is 50% per annum then that will be the cost on a daily or monthly basis. If 100% depreciation is the norm within the organisation, then 100% depreciation will be charged on the date of acquisition/use within the project.

Of course, the claimed costs have to be in proportion with it’s usage on the project.

 

Non-eligible FP7 costs:

Costs calculated in accordance with other conventions e.g. "current costs", "notional rents", "opportunity costs", etc. are not eligible. Therefore, no notional costs should be charged, e.g. in respect of revaluation of buildings or capital equipment, estimated or imputed interest, estimated rentals, etc.

 

Costs, which are not eligible, include in particular:

         "return on capital employed", including dividends and other distributions of profits

         provisions for possible future losses or charges

         costs related to any interest

         provisions for doubtful debts

         unnecessary or ill-considered expenses

         marketing, sales and distribution costs for products and services, unless they are directly related to and necessary for the action

         indirect taxes and duties, including VAT

         any cost incurred or reimbursed from other sources such as in respect of another Community project

         leasing costs (or part thereof) where the leasing arrangement has the effect of unnecessarily increasing the charge made to the project (e.g. where the cost without interest of the leased equipment is higher than if purchased).

 

FREE downloadable FP7 book V1.13 available now:

Version 1.13 of Mr. Myer W. Morron’s FP7 Book, which follows on from the highly acclaimed FP5 and FP6 versions has been published by EFPConsulting Ltd. It replaces drafts that were previously released.

 

The downloadable book continues to be free as it was in the previous framework programs. The book is constantly updated and registered users are notified of important changes and updates by Email.

 

The book is over 200 pages long and covers subjects such as:

 

         Background to changes in FP7

         Overview of rules of participation

         Benefits of participation in a Collaborative R&D project

         Reasons not to participate

         Brief Overview of Framework Program Seven and CIP

         FP7 Funding Schemes (Types of Projects)

         Framework Program Seven changes

         Partner Search

         Proposal preparation and submittal

         What to do if your Proposal Fails

         Project Roles

         Financial Aspects

         Use of External Consultants

         What to do when your proposal is to be funded

         Consortium Agreement

         Problems during the project

         Project Management

         Project Ethics and Good Practice

         European Technology Platforms

         Ethical Considerations in FP7

         SME Status

         Intellectual Property Aspects

         How to write a proposal

 

To download, please click here.

 

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