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Finance Helpdesk Newsletter #33

Upcoming Financial Workshops

Guide to Financial Issues Version 3 is available now

First Version of Marie Curie Financial Guidelines Published

Significant financial changes in Marie Curie 2011 Work Program

Updated Guidance Notes on Audit Certification

 

Upcoming Open Workshops:

 

Following the publication of the new General Financial Guidelines and the Marie Curie Financial Guidelines + 2011 Workprogram (see below), we encourage you to attend one of our workshops to ensure that the implications of these new Guidelines are fully understood.

 

Next Open workshops:

 

13/09/2010 3 Day in-depth FP7 Financial Workshop in London-Heathrow, UK

20/09/2010 2 Day Marie Curie Financial Workshop in Brussels, Belgium.

 

The Finance Helpdesk is happy to organise a targeted in-house workshop for your organisation.

Please contact us to request a workshop, discuss dates and prices, or to receive more information.

 

 

Guide to Financial Issues Version 3 is available now:

The Commission has just published their new updated Guide to Financial Issues relating to FP7 Indirect Actions, dated 30 June 2010. - Version 3.

 

To download Version 3 of the Financial Guidelines, please click here.

 

The following are some of the more important changes:

*Please Note – Some of the changes have been included in previous newsletters as they have been addressed in other documentation, however, they are new to the Financial Guidelines*

 

1. Certificate on Methodology (CoM)

 

A.  The consequences of the acceptance and use of the certificate on the methodology are as follows:

-         The requirement to provide an intermediate CFS for claims of interim payments will be waived from the date of the notification of the acceptance of the certificate by the Commission.

-         Beneficiaries, if cumulatively their EU/Euratom contribution is equal or superior to EUR 375,000, will only have to submit a CFS for the final payment. This CFS will cover the eligible costs for the total EU/Euratom contribution.

-         This CFS has to cover all the eligible costs including personnel and indirect costs.

-         For personnel and indirect costs, the auditors will only have to focus on checking compliance with the certified methodology and systems, omitting individual calculations. A detailed description of the audit procedures to be carried out by the auditors is provided in the guidance notes for audit certifications.

-         Once the certificate is accepted, the approved CoM will be valid for all FP7 grant agreements signed by the beneficiary after the date of approval. The approved methodology may also be used retroactively for all ongoing FP7 grant agreements signed by the beneficiary before the date of approval of the CoM. This retroactive effect will be applicable only to projects for which the period of submission of the final reports is not elapsed at the time of the notification of the CoM approval (i.e. time-limit for retroactive effect: end date of the project + 60 days)

-         The certificate is valid for the entire period of FP7 unless the beneficiary's methodology changes fundamentally or if an audit or other control performed by the Commission services or on its behalf demonstrates a lack of compliance with the certified approved methodology and/or any significant abuse.

-         The Commission has the right to recover funds unduly paid, as well as to apply liquidated damages, when an inappropriate use of the approved methodology or any event which invalidate the basis on which the approval was granted is identified, for example during an on-the-spot-audit.

 

 

B. The Commission adopted on 23 June 2009 acceptability criteria for average personnel cost methodologies submitted by the beneficiaries for approval - as per Form E of Annex VII of the ECGA.

 

The criteria adopted are the following:

-         Methodologies in which, for each personnel category, the difference between the average rate and the extreme values (upper and lower rates) is equal to or below 5%; the methodology is acceptable.

 

-         Methodologies in which, for any personnel category, the difference between the average rate and the extreme values (upper and lower rates) is above 25%; the methodology is not acceptable.

 

-         Methodologies not fulfilling the first criterion and in which, for each personnel category, the difference between the average rate and the extreme values (upper and lower rates) is equal to or below 25%; Only methodologies applied by beneficiaries having participated in at least 4 FP6 projects with an EU/Euratom contribution in each of them equal to or above 375.000 € or in at least 4 FP7 projects with an EU/Euratom contribution in each of them equal to or above 375.000 € are acceptable.

 

·          These criteria are applicable provided that all other aspects of the methodology are compliant with the provisions of the ECGA, the Financial Regulation and its Implementing Rules.

·          Requests must include minimum data in the Form E.

 

 

2. Additional explanations on conversion rates:

Costs shall always be reported in EUR in the financial statements submitted to the European Commission.

Where the local currency is not the Euro, beneficiaries still report in Euros converted

a) on the date that the actual costs were incurred or

b) on the basis of the rate applicable on the first day of the month following the end of the reporting period.

For both options, the daily exchange rates are fixed by the European Central Bank (ECB) and may be obtained at the following internet address: http://www.ecb.int/stats/eurofxref/ or, for the rate of the first day of the month following the reporting period, in the relevant OJ of the European Union. The choice must be the same for all reporting periods in a given GA. For the days where no daily exchange rates have been published, (for instance Saturday, Sunday and New Year’s Day) you must take the rate on the next day of publication.

The use of other sources for exchange rates (other than the ECB) is admissible only where no other solution is possible (i.e. when ECB does not include the daily exchange rates for a particular currency).

Beneficiaries with accounts in EUR shall convert costs incurred in other currencies according to their usual accounting practice. Presumably this emphasises that dual currency bookkeeping is needed to report in Euro where local currency is not Euro.

 

3. Additional explanations on subcontracting:

Note particularly the emphasis that subcontracting costs are direct costs. They have to be identified by beneficiaries in the financial statement form (Form C, Annex VI to ECGA).

 

4. A. Compatibility of FP7 funded projects with other sources of EU/Euratom funding.

 

B.  Explanations on adjustments to costs incurred in previous periods.

This has been needed for some time. Now details on how to submit financial statements for adjusted previous periods – also detailed explanations about personnel costs and average personnel costs.

1. One Form C for the current period;

2. One separate Form C for every previous period where adjustments are needed, which will include ONLY those adjusted (negative/positive) costs of that specific previous period.

 

C.  Additional explanations on the specific case of personnel average costs. Note adjustment procedure where average costs used because of lack of information at time of preparing report even though no CoM.

 

D. Additional explanations on the concept "incurred during the duration of the project". Emphasised that follows “normal” national accounting system for accrual basis (note example of travel invoice) and now clarifies that where cash based accounting used – incurred equals date of payment!

 

E. Additional explanations on costs incurred by third parties and the use of Special Clause 10.

 

5. More explanations re personnel costs and depreciation – time recording costs and direct taxes/social costs:

 

a. Additional explanations on the use of timesheets and time-recording requirements in the context of the Certification on Methodology. Note activities that may be considered not to be part of the productive hours of personnel

b. Additional explanations on particular cases, with new information on the assessment of personnel costs methodologies submitted by physical persons and SME owners who do not receive a salary.

c. New information on direct taxes and social charges related to personnel costs.

d. use of EC flat rates on subsistence costs and accommodation.

e. Clarification on depreciation costs related to the Programme "Research Potential", part of the FP7 Specific Programme "Capacities".

f. Information on internally invoiced costs.

 

6.  Overheads:

a. Information on items covered by the flat rates of 20% and 60%.

 

b. Extension of duration of the transitional 60% flat rate.

 

c. Modification of the ECGA in December 2009 in order to allow non-profit public bodies, secondary and higher education establishments and research organisations and SMEs to keep the 60% overheads flat rate even if they lose their status during the life of the project.

 

d. Additional information on the changes of indirect costs method (ICM). 

Note: In FP7 all departments, faculties or institutes which are part of the same legal entity must use the same system of cost calculation (unless a special clause foreseeing a derogation for a particular department/institute is included in the GA).

 

e. New development: Modification of the ECGA in December 2009 in order to allow non-profit public bodies, secondary and higher education establishments and research organisations and SMEs to keep the 75% reimbursement rate for RTD activities even if they lose their status during the life of the project.

 

7. New information on the interest yielded by the pre-financing paid by the Commission.

 

8. New developments on extrapolation following an audit and simplification of the recovery process including the use of flat rate corrections.

 

9.  Explanations on the concept and consequences of "force majeure" in the frame of the ECGA. (Ash clouds = force majeure).

 

10.  Specific provisions related to "research for the benefit of specific groups"

Research for the benefit of CSOs (Civil Society Organisations): definitions and funding limits.

 

To download Version 3 of the Financial Guidelines, please click here.

 

 

NOTE:  It is important to remember that the only scope of the Guide is to provide interpretation on the legal texts (and in particular the ECGA), and that it cannot derogate from them. These guidelines reflect the interpretation of the Commission of the provisions of the ECGA; however, only the provisions of the signed grant agreement are binding.

 

First Version of Marie Curie Financial Guidelines Published.

The Commission has just published their first version of The Marie Curie Financial Guidelines, dated 01 June 2010.

 

To download the latest version, please click here

 

Significant financial changes in Marie Curie 2011 Work Program:

The newly published Marie Curie 2011 Workprogram includes some important changes that should be noted:

 

Cost Categories A, B, C, D, E, F, G, H, I have been changed to:

Cost Category 1: Monthly Living Allowance – see below

Cost Category 2: Mobility Allowance

Cost Category 3: Contribution to the training expenses of eligible researchers and research/transfer of knowledge programme expenses

Cost Category 4: Management Activities

Cost Category 5: Overheads

Cost Category 6: Other Costs

 

New Monthly Living Allowance Rates (country correction factor to be applied):

Early-stage researchers:  38,000 Euro

Experienced researchers (< 10 years experience):  58,500 Euro

Experienced researchers (>10 years experience) 87,500 Euro

 

Q: If an application for an Intra-European Fellowships (IEF) grant application is made to a call published in the 2009 Marie Curie Work Program and with a deadline in 2009, which country correction factor should be used if the Grant Agreement is signed in 2010 i.e. the country correction factor published in the 2009 or 2010 Work program?

 

A: The country correction factor to be used is the one published in the Marie Curie Workprogram where the call has been published. i.e. 2009 Work Program

 

Updated Guidance Notes on Audit Certification:

Updated Guidance notes for beneficiaries and auditors on certificates issued by external auditors have been published dated 01.07.2010

To download the notes please click here.

 

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