Upcoming Financial Workshops
Coordinator bank accounts
Use of Average Personnel Costs
Equipment Depreciation Costs
Upcoming Open Workshops:
Theses upcoming workshops will be held at the Holiday Inn London Heathrow Airport Hotel http://www.london-heathrow.holiday-inn.com/ to make it easy to fly in and participate.
We advise that you book now to avoid disappointment.
There are still some places available for these workshops
13/05/2009 1 Day SME Measures (CRAFT) Workshop in London Heathrow, UK.
14/05/2009 2 Day Marie Curie Financial Workshop in London-Heathrow, UK.
02/06/2009 3 Day in-depth FP7 Financial Workshop in London-Heathrow, UK.
The Commission has just published their new updated Guide to Financial Issues relating to FP7 Indirect Actions, dated 02 April 2009.
There are no big surprises in the new document however it is a good document and we recommend that you download and read it.
To download the latest version of these Financial Guidelines, please click here.
Coordinator bank accounts:
In some cases, a special clause will be added to grant agreements during negotiations (special clause No 27), that requires Coordinators to open up separate Bank accounts for their FP Project. The reason for this is that the Coordinator must be able to identify dates and figures related to any payments received quickly including any interest that is earned on this undistributed money. In fact, the Commission expect that the bank accounts used for this to be interest bearing accounts.
If you are coordinating a project that does not include clause 27, you are still advised to have a separate bank account. However, if you decide not to do this, then you still have to be able to easily provide the Commission with the required information.
The Commission has said in FP7 that they will not request additional guarantees or securities from an entity with a weak financial viability that cannot thus act as Coordinator. However, this legal entity could still be Coordinator if it offers the Commission by itself a bank or insurance company guarantee.
Please note that guarantees from other sources (like affiliated or mother companies) are not acceptable for the Commission.
Use of Average Personnel Costs:
In FP7, the Commission have allowed the use of average personnel rates as long as you are consistent with your management principles and usual accounting practices and have a Validated Certificate of Methodology on the use of Average Personnel Rates.
It could be that a beneficiary opts to declare real costs for non-permanent staff and provide a certificate of average costs for permanent personnel only. If this is the case then this should be explained in the methodology submitted to the Commission.
Please note that you have to have a Validated Certificate of Methodology on the use of Average Personnel Rates. If you are still waiting for the Commission to validate your Certificate, then you cannot use Average Personnel Rates until the process is complete.
Equipment Depreciation Costs:
If you have equipment that was bought prior to the project and the equipment has not yet been fully depreciated according to your organisation’s normal accounting practices, then the remaining depreciation (according to the amount of use, in percentage and time) can be eligible under the project.
Depreciation is charged in each relevant periodic report. Depreciated costs of equipment can never exceed the purchase price of the equipment.
It is expected that the beneficiary calculates depreciation on the durable equipment that it purchases. Beneficiaries should be aware that not doing so and charging the full price of an asset in one single year might be considered an "excessive" cost and therefore could be considered ineligible.
However, if your Organisation’s usual practice is to use Cash-based accounting, and if the purchase cost of the equipment is recorded as an expense in your accounting system in the period concerned (cash based accounting) it is acceptable to charge the entire purchase cost to the project in the period under the following conditions:
a) The cost must be economic and necessary.
b) Only the portion of the equipment used on the project may be charged.
SME Status in FP7 is much more important than it was in FP6.
The reason for this is now there are financial implications for being an SME with SMEs being able to charge 75% for the R&D Activity and the possibility of SMEs to be able to use the current 60% overhead flat rate.
If an SME changes their status during the life of the project they will not be able to use the 60% flat rate in subsequent financial statements of the project. From then on, the indirect costs will have to be declared either on the basis of actual costs or using the 20% flat rate choice for indirect costs.
Please note: An SME only loses the SME status if the required headcount and financial ceilings are exceeded for two consecutive years. Therefore, those beneficiaries that signed the GA when they had the status of SME will stop qualifying for the 60% rate only after exceeding those limits for two years.