Transcript Kick Off Meeting with Beneficiaires

Financial Reporting for Grant Contracts
General Conditions
2008
European Union
Delegation
of the
European Commission
Delegation to the
to Russia
Russian Federation
1
Structure of your contract
Grant contract consists of :
Special conditions + Annexes:
Annex I Description of the Action
Annex II General conditions applicable to EC financed grant
contracts for external actions
Annex III Budget for the Action
Annex IV Contract award procedures
Annex V Standard request for payment
Annex VI Model narrative and financial report
Annex VII Model report of factual findings and TOR for
expenditure verification
Our financial reporting requirements are based on the above
documents.
European Union
Delegation
of the
European Commission
Delegation to the
to Russia
Russian Federation
2
Pre-financing payments
First pre-financing is paid within 45 days, as from the
date of reception of signed contract.
Requests for further pre-financing payments (if any)
should be sent on a 12 months basis accompanied by
Interim Narrative and Financial reports.
They must be prepared using templates of guidelines on
financial reporting sent with 1st payment notification
and provided in original, dated and signed.
Payments of further pre-financings are executed on the
basis of the approval of the Interim Narrative report –
and provided that the EC contribution to the expenditure
reported in the Interim Financial report = at least 70% of
the first pre-financing payment (and at 100% of any
previous payments).
European Union
Delegation
of the
European Commission
Delegation to the
to Russia
Russian Federation
3
Pre-financing payments
If the consumption of the previous pre-financing is less
than 70%, the amount of the new pre-financing payment
shall be reduced by the unused amounts of the previous
pre-financing payment.
The total sum of pre-financings under the contract may not
exceed 90% of the amount referred to in Article 3.2 of
Special conditions.
The Interim Financial report indicates real costs of the
project implementation within reported period.
It consists of the Summary table, which level of detail
reflects exactly the budget breakdown in the contract.
If the contract budget has been modified through an
addendum, please include the latest figures in the section
“Budget as per Contract / last Addendum”.
European Union
Delegation
of the
European Commission
Delegation to the
to Russia
Russian Federation
4
Contract modifications
Any amendment to the Contract must be set out in
writing in an addendum.
However, where the amendment to the Budget or
Description of the Action does not affect the basic
purpose of the Action and the financial impact is limited
to a transfer between items within the same main budget
heading including cancellation or introduction of an item,
or a transfer between main budget headings involving a
variation of 15% or less of the amount originally entered
(or as modified by addendum) in relation to each
concerned main heading, the Beneficiary may amend the
budget and inform in writing without delay the
Contracting Authority accordingly.
This method may not be used to amend the headings for
Administrative costs or the Contingency reserve.
European Union
Delegation
of the
European Commission
Delegation to the
to Russia
Russian Federation
5
Administrative costs &
Contingencies
Administrative costs should include project costs which cannot
be attributed to any other budget headings.
Please note that the amount under this budget heading cannot be
higher than % indicated in your contract (Article 3.3 Special
conditions). In case the total accepted cost of your project is
lower than the cost indicated in the budget, the amount accepted
under this budget heading will be calculated by application of this
%. Fixed % of administrative costs is applied in Interim and Final
Financial reports.
If envisaged, a Contingency reserve (not exceeding 5% of the
direct eligible costs) is used only with the prior written
authorisation of the Contracting Authority.
European Union
Delegation
of the
European Commission
Delegation to the
to Russia
Russian Federation
6
Final Financial report
Balance payment – on approval of the final reports.
Final reports shall be forwarded within 3 (6) months following the
end of the implementation period of the Action. Final reports:
Financial & Narrative.
They must be accompanied by an Expenditure Verification report
issued by the auditor (named in the contract) using format of Annex
VII. The auditor must confirm and attest the accuracy of your Final
Financial report by signing of its each page.
The Final Financial report should indicate the total real cost of the
project implementation. Only eligible costs should be reported, i.e.
those incurred by your organisation (or partner organisations)
during the project implementation period.
European Union
Delegation
of the
European Commission
Delegation to the
to Russia
Russian Federation
Please use templates of guidelines on financial reporting.
7
Final Financial Report
The Final Financial report consists of a Summary Table (reflexion
of the budget breakdown), detailed tables for individual budget
headings and some supporting documents.
All supporting documents for the incurred expenditure should be
kept by the Beneficiary in originals for 7 years after the payment
of the balance for control purposes.
For contracts with expenditure verification, the only documents
to be provided with the Final Financial report are: copies of
confirmations of registration of purchased equipment in your
assets, or copies of certificates of Transfer of Ownership,
accompanied by equipment specifications as detailed in the
relevant invoice and copies of certificates of origin.
European Union
Delegation
of the
European Commission
Delegation to the
to Russia
Russian Federation
For contracts without expenditure verification, please submit
requested documents as listed in the guidelines on financial
reporting.
8
Final Financial Report
A Transfer of Ownership is required if your organisation is not
based in Russia or is not the final beneficiary of the project, in
which case the equipment purchased within the framework of
the project should be transmitted to the local partners or the
final recipient of the Action.
Copies of certificates of origin and certificates of Transfer of
Ownership should only be provided to us for equipment the
purchase cost of which was more than 5,000 EUR per item.
European Union
Delegation
of the
European Commission
Delegation to the
to Russia
Russian Federation
9
Rule of Origin
All supplies and materials purchased under a contract financed
under a Community instrument must originate from the Community
or from an eligible country. Eligible countries under ENPI regulation
are as follows:
• Member States of the Community:
Austria, Belgium, Bulgaria, Czech Republic, Cyprus, Denmark,
Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy,
Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal,
Romania, Slovakia, Slovenia, Spain, Sweden, United Kingdom.
• Countries - beneficiaries of this Regulation:
Algeria, Armenia, Azerbaijan, Belarus, Egypt, Georgia, Israel,
Jordan, Lebanon, Libya, Moldova, Morocco, Palestinian Authority of
the West Bank and Gaza Strip, Russian
Federation, Syria, Tunisia,
Ukraine.
• Countries - beneficiaries of an Instrument for Pre-Accession
Assistance set up by Council Regulation (EC) No 1085/2006 of 17
July 2006 establishing an Instrument for Pre-Accession Assistance
(IPA): Croatia, The former Yugoslav Republic of Macedonia, Turkey,
Albania, Bosnia, Montenegro, Serbia, including Kosovo.
• Member States of the EEA: Iceland, Liechtenstein, Norway.
European Union
Delegation
of the
European Commission
Delegation to the
to Russia
Russian Federation
The country of origin is deemed to be the country in which the
goods have gone their last, economically justified, substantial
transformation.
10
Rule of Origin / Nationality
Certificates of origin for supplies / materials are made out by the
competent authorities of the country of origin of the supplies. Selfcertification produced by suppliers are not acceptable. Certificates
of conformity indicating several locations (eligible and non-eligible
countries) of production plants are not acceptable either. We accept
customs declarations or facture-invoice with indication of the
country of origin.
Rule of nationality does not apply to persons recruited on labour
contracts, i.e. staff. These persons should be shown under heading
1 of the budget.
However, nationality rule applies to service providers (companies)
and individual consultants/experts hired on service/assignment
contracts. These service providers ideally should be shown in the
heading 5. Eligible nationalities for ENPI are published on
http://ec.europa.eu/europeaid/work/procedures/implementation/eligi
bility/documents/a2_eligibilityprogrammes2007-2013_en.doc
If consultant of non-eligible nationality is needed for the project, a
PRIOR derogation (HoD for grants) should be asked, like for the
derogation to the rule of origin in case no equipment of eligible
origin could be found on the market.
European Union
Delegation
of the
European Commission
Delegation to the
to Russia
Russian Federation
11
Taxes, including VAT
Taxes, including VAT are not eligible expenditures, unless the
Beneficiary (or, where applicable, its partners) can show it cannot
reclaim and applicable regulations authorise coverage of taxes.
In case taxes cannot be reclaimed or offset, a confirmation from
relevant competent authorities should be provided.
If Beneficiaries are EU VAT registered organisations, more likely
they can reclaim the VAT. If not - justification / confirmation from the
relevant authority to be provided.
If Beneficiaries are RF registered organisations, more likely they
can reclaim the VAT by off-setting.
However, there 2 types of organisations which can not reclaim the
VAT in Russia: (a) public authorities and (b) organisations which
apply a simplified taxation system.
European Union
Delegation
of the
European Commission
Delegation to the
to Russia
Russian Federation
If you are (a)- an official letter that the VAT can not be reclaimed by
offsetting should be provided. If you are (b)- an official certificate from
local tax inspection about application of a simplified taxation system
should be provided.
All other organisations should submit their VAT Declaration for the
latest accounting period.
12
Procurement by
Grant Beneficiaries
If the implementation of an Action requires procurement by the
Beneficiary, the contract must be awarded to the most
economically advantageous tender (i.e, the tender offering the
best price-quality ratio), in accordance with the principles of
transparency and fair competition and taking care to avoid any
conflicts of interest.
Procurement rules – Annex IV of your contract.
For supplies of a value of 10 000€ or less, the Beneficiary may
place orders on the basis of a single tender.
For supplies of a value of less than 60 000€ the Beneficiary
consults at least three service providers/suppliers of its choice
and negotiates the terms of the contract with one or more of
them (negotiated procedure without publication).
European Union
Delegation
of the
European Commission
Delegation to the
to Russia
Russian Federation
Artificially splitting related activities into smaller lot sizes or
contracts to circumvent the procurement thresholds is
prohibited.
13
Final Financial Report
Detailed table for budget heading 1 (Human Resources)
Respect the rates and number of units for salaries and per diems.
Each project staff member must regularly fill in timesheets.
Originals of timesheets must be kept by your organisation for
control purposes.
Please always indicate in the summary table the name of the
person on mission, his/her position, destination and period on
mission and follow budget breakdown and numbering.
Per diem rates cannot exceed rates set out in Annex III - maximum
amounts.
European Union
Delegation
of the
European Commission
Delegation to the
to Russia
Russian Federation
14
Final Financial Report
Detailed tables for budget headings
2 (Travel), 3 (Equipment and Supplies), 4 (Local Office), 5 (Other
costs, services) and 6 (Other)
Summarize all relevant payments in chronological order, but still
grouping them per budget line.
Costs expressed in the currency of payment with an indication of
the date of payment.
Costs must be converted to Euro at the rate made up by the
average of the rates published on in InforEuro website:
http://ec.europa.eu/budget/inforeuro/index.cfm?fuseaction=home
&SearchField=&Period=2003-5&Delim=,&Language=en
for the months covered by the relevant report.
European Union
Delegation
of the
European Commission
Delegation to the
to Russia
Russian Federation
15
Calculation of the Balance
Payment
Special conditions
European Union
Delegation
of the
European Commission
Delegation to the
to Russia
Russian Federation
Total cost of the Action:
500,000.00 €
EU contribution (90%) to total cost:
450,000.00 €
Pre-financing payment (80%):
360,000.00 €
Further pre-financing payment:
45,000.00 €
Balance payment (10%):
45,000.00 €
16
Calculation of the Balance
Payment
Calculation of the balance amount based on real
accepted costs (final financial reports):
Total amount of accepted eligible costs: 490,000.00 €
EU contribution
(90% of total accepted eligible costs):
441.000,00 €
Balance payment:
(441,000.00 € - 360,000.00 € - 45,000.00 € )
European Union
Delegation
of the
European Commission
Delegation to the
to Russia
Russian Federation
36.000,00 €
17