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Finance Helpdesk Newsletter #3

18.04.2006 - Finance Helpdesk Newsletter


Transferring Budget between activities, cost categories and partners within FP6 Projects.

How to Calculate Employer Personnel Costs in FP6

Exchange Rates

Guarantee Templates

Participation of SMEs in FP6 IST Program Projects

Commission’s proposals for FP7

Budget Agreement reached on FP7

Status of Myer Morron's new book on ICT in FP7

Financial Workshop in Croatia

Financial Helpline


Transferring Budget between activities, cost categories and partners within FP6 Projects.

We have received many questions that relate to this in one way or another. Let’s make it clear; In FP6, as long as it is justifiable and the work is completed properly as laid out in Annex II, you do not require the PO’s permission to move between activities or partners. However, check your CA; you may have imposed rules upon yourselves via the consortium agreement.

Unlike in FP5, there are no cost categories in FP6 – only activities (apart for subcontract). Therefore, you can do what you like between the partners as long as the overall funding claimed is the same and you are within the contract.


How to Calculate Employer Personnel Costs in FP6:

Many organisations have not developed systems for recording hours and calculation of personnel costs. They are only concerned with total salary costs per month, quarter or annually and the effect on overall profit and cash flow, rather than the cost per hour or per day for each individual member of staff. 

Without a system of calculating the hourly cost, the calculation of personnel costs for FP6 projects, even where hours have been correctly and efficiently recorded, will not be correctly calculated or recovered.


A leaflet has been produced on “How to Calculate Employer Personnel Costs” in English, Slovak, and Estonian, which can be downloaded from here.


Exchange Rates:

The question of exchange rates is complicated and confusing. In FP5 only a period end rate was allowed.  In FP6, contractors may report on form C either at period end rate or daily rate for expense.


To try and assist you better, and at the request of one of our helpline users, we have updated our links section by creating an “Exchange Rates” section that includes links to the different sites that can be used. We recommend referring to the contract before choosing a site and completing the forms for reporting to EU, in order to check that they comply with the contact.

Please also click here to look at a FAQ:


Guarantee Templates:

We have had several questions recently regarding Bank Guarantee Templates; we have added a selection of templates to the Finance Helpdesk Website which can be found here. As always, remember to liaise with your Project Officer prior to involving your guarantor.


Participation of SMEs in FP6 IST Program Projects:

The Finance-NMS-IST and Idealist34 projects have jointly updated the report on the SME Participation in the FP6 IST Program. The original report was used and quoted in the Gago Report.


The Main changes / updates from previous version cover the following -


1.         Broadened beyond Integrated Projects.

2.         Impact of delays in contract signature and transfer of prepayments.

3.         Micromanagement by Project Officers.

4.         Lack of effective training for Project Officers.

5.         Problems with interpretation of new rules by Evaluators.

6.         Lack of use of weights in evaluation scoring

7.         Variations in interpretation by different directorates.

8.         Impact on project overheads caused by larger projects.

9.         Various problems and inconsistencies in Financial Guide.

10.       Lack of knowledge of financial rules.

11.       Problems with having SMEs in NoEs.

12.       Problems with lack of anonymity in technical evaluation.

13.       Problems with the SME program itself.

14.       Results of final Gago and Marimon reports and addition of Ormala report.

15.       Lack of guidelines for project participation and management ethics and good practice.

16.       Impact of European Technology Platform


The updated Report can be downloaded from here. (“Participation of SMEs in Projects in FP6 IST Program feed-back and Recommendations”)


Commission’s proposals for FP7:

On 23 December 2005, the Commission published their proposal for rules of participation in FP7. The document contained the latest information available on the European Commission’s plans for the rules of participation in the Seventh Framework Programme (FP7). The proposals are downloadable from here. (Proposed rules of participation in FP7 - COM(2005) 705 final)

The Finance Helpdesk response to the document is downloadable from here. (“Response to Regulation etc. “)


Budget Agreement reached on FP7:

The following is an extract from a Commission News release:


The EU budget for the term 2007 to 2013 was finally agreed in a lengthy evening session on 4 April. The total budget has gone up by 4 billion euro since the December proposals. This included 300 million euro extra for the Seventh Framework Programme (FP7).


Confusingly, the final figure for the FP7 budget has not yet been ironed out, although it will include the extra 300 million mentioned above. A Commission spokesperson said that the final details were in the 'i-dotting and t-crossing' stage. The total extra going to research and education, including FP7 funding, is 2.1 billion euro over the 2007 to 2013 timeframe.


In a statement, EU Research Commissioner Janez Potocnik said he was pleased that the 'agreement on the budget for the framework programme for 2007 to 2013 has been reached and that additional funds have been found for programmes that are targeted at EU growth and competitiveness. Now we have to get on with the important task of agreeing the programme that will implement this budgetary framework. The Commission, Parliament and Council will now work closely together to get this done as quickly as possible,' he said.


The new funds for research come from the 1a (Sustainable Growth: Competitiveness for growth and employment) pot, of which FP7 is a component. The total budget for this area will now rise to approximately 122 billion euro between 2007 and 2013. The 1a budget rises from 11 billion euro in 2007 to 23.4 billion euro in 2013, a rise of 212 per cent before the additional 2.1 billion is factored in. This large rise is considered essential for continued EU growth and sustainability, especially through research and innovation, in an increasingly competitive world.


FP7 is a cornerstone of the Lisbon strategy, which aims to increase European competitiveness. Leading by example, FP7 will be simplified in order to provide clearer themes and cost savings through its content, organisation and implementation.


Status of Myer Morron's new book on ICT in FP7:

Myer has been working on this over the last several months and had hoped to publish an initial draft about now. However he has decided to hold off until some aspects are clearer and thinks he will release an initial version sometime next month.


Financial Workshop in Croatia:

There will be a 3 Day FP6 Financial Workshop in Zagreb, Croatia (08 - 10 May). For more information, please click here.


Financial Helpline:

If you received notification of this newsletter by email, then you have already registered with the Finance Helpdesk, which allows you use the free, confidential, Financial Helpline facility.

If you are not registered then please do so here.




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