Transcript Document

Financial Guidelines for Projects
funded by Interreg III
Planning and Priorities Coordination Division,
Office of the Prime Minister
Structure of this presentation:
Malta and Interreg III
 Interreg III Management Structures
 The Reimbursement Process
 Regulations and Guidelines
 Preparing claims: Some main categories
of cost

INTERREG III

Malta’s participation in
Interreg III
Interreg III – A brief overview

Interreg III is a Community Initiative which aims to
strengthen economic and social cohesion by
stimulating interregional co-operation between 2000
and 2006;

It is financed by the European Regional
Development Fund (ERDF).

Interreg III encourages organisations to work with
their counterparts in neighbouring regions in order to
carry out projects and reach common goals.
Malta’s participation in Interreg III



Strand A (Cross Border) – Italia-Malta programme
Strand B (Transnational) – Medocc and Archimed
Strand C (Interregional) – South Zone

Total ERDF funds allocated to Malta under Interreg
III: approx €4.7 million. ERDF: Up to 75% cofinancing.

Total number of projects with Maltese partners: 53
Interreg III Projects with
Maltese partners
18
16
14
Number of
Projects
with
Maltese
partners
12
IT-Malta
Archimed
Medocc
IIIC
10
8
6
4
2
0
Interreg III Programmes
INTERREG III
 Management
Structures
Management structure of
Interreg III Programmes
Each Interreg III Programme is managed and coordinated by:

A Managing Authority (M.A.) and Paying Authority (P.A) in one member state.
Cross border programmes like Italia-Malta may have a counterpart M.A and P.A in
each of the participating Member States. PPCD (OPM) and the EU Paying
Authority Directorate (MFIN) are the counterpart M.A. and P.A. respectively for
the Italia-Malta Programme.

Most programmes also engage a Joint Technical Secretariat which provides
expertise and administrative support.

A National Coordinator for Interreg III represents the programme in each
participating member state. PPCD is the National Coordinator for Interreg III,
Malta.
Interreg III Programme bodies
Member States/ National
Coordinators
European Commission
(PPCD represents Malta)
Steering Committee
Responsible for joint selection of
projects and monitoring their
operations
Monitoring Committee
Monitors programme and management
Paying Authority
Managing Authority
submits payment applications. Receives
payments from the Commission. Issues
reimbursements to project partners.
ensures sound financial implementation and
compliance with EU regulations; provides
evaluation, collects data and reports to
European Commission
Joint Technical Secretariat
responsible for operational
management and administration of the
programme.
Role of PPCD in Interreg III
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National Counterpart Managing Authority
for the Interreg IIIA Italia-Malta
Programme.
National Coordinator for Interreg IIIB
[Archimed, Medocc] and Interreg IIIC
Programmes.
Aim: To ensure effective coordination of
Malta’s participation in Interreg III.
INTERREG III

The Reimbursement
Process
Role of the Lead Partner

Each project must have a Lead Partner (LP) who is legally
responsible for coordinating the project.

The LP is also responsible for administration and
distribution of project funds and for reporting on their use.

The LP maintains contact with management bodies and with
each of the other partners.
Interreg III: Reimbursement Process
Managing Authority / Joint
Technical Secretariat
Paying Authority
Reimbursement
Progress Report and Audit Certificate
Lead Partner
Progress Reports / Audited Financial Reports and Certificates from PPCD / MFIN
Partner
Partner
Partner
Each project partner keeps the accounts for his expenditure.

Project partners can only obtain ERDF funding
on a reimbursement basis.

Once a set of payments has been made,
partners can submit a claim for reimbursement
using the report templates supplied by the Lead
Partner and by the National Coordinator for
Interreg III Malta (PPCD).

The complete claim must then be sent to PPCD
for certification before onward transmission to
the Lead Partner.
Interreg III: Certification Process
Maltese Partner
Lead Partner
Managing
Authority/JTS
OPM – PPCD MA
MFIN - EU Paying
Authority (ItaliaMalta)
EU Affairs
Director
European
Commission
Flow of Reimbursement
[Note: certain organisations may have a different flow, depending on their status]
European Commission
Central Bank
Account managed
by MFIN – EU
Paying Authority
Paying
Authority
Lead Partner
Partner
PPCD
Schedule of projects

Interreg III projects must comply with the N+2 rule: that is,
all expenses must be disbursed within the stipulated schedule
of the project.

This rule aims to ensure good spending forecasts, timely
procedures and solid projects.

All EU funds which remain unspent will be lost to Malta.
This is known as ‘decommitment’.
Project’s starting point:
-
-
-
Italia-Malta Programme: Date of
notification issued by MA to Lead Partners
selected for funding.
Archimed and Medocc Programmes: Date
of Contract signed by MA and Lead
Partner.
Interreg IIIC: Date of approval of project by
Steering Committee.
INTERREG III

Regulations and Guidelines
relating to claims for
reimbursement

ERDF funds are contributed by tax payers in EU
member states for the benefit of disadvantaged regions.
Project partners are obliged to ensure that they use
these funds correctly.

It is also important to note that national funds are also
being committed to these projects. The 25% national cofinancing has to be provided according to what was
approved in the project application – i.e. in cash or in
kind or a combination of both.

PPCD is responsible for ensuring that Malta obtains
maximum results from participation in Interreg III. ERDF
funds which are not claimed correctly are lost to
Malta.
Aim of certification and eligibility
checks:
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During the verification/certification process, PPCD
carries out a 100 per cent desk-based check on all
expenditure. It is also responsible for periodic on-thespot checks.
To ensure that funds are spent correctly and all
expenditure is claimed, PPCD requires a certified true
copy of documents which prove that each step of every
transaction actually took place.
Basically, the general rule is the one which applies to all
Structural Funds. That is: All amounts claimed must be
backed up by receipted invoices.
Main Reference Documents 1
EU Regulations:
 Council Regulation 1260/1999, laying down
general provisions on the Structural Funds
 Council Regulation (EC) 1783/1999 of the
European Parliament and of the Council on
European Regional Development Fund.
 Council Regulation 438/01 Management and
Control of Structural Funds.
 Commission Regulation 448/2004 as regards
eligiblity of expenditure.
Main Reference Documents 2
Maltese National Rules:
 LN 177/2005, Public Contracts
Regulations
 Employment and Training Services Act,
last amended 2005.
 OPM Circular 34/2004
Main Reference Documents 3
Other guidelines [for each Programme]:
 Interreg III Community Initiative Programme,
Programme Complement and Manual.
 Letter of authorisation from PPCD.
 Approved application form for project.
 Letter of Grant / Contract signed by Managing
Authority and Lead Partner.
 PPCD guidelines for Maltese partners.
Some issues to remember :

A separate bank account should be opened for expenditure on the
project to ensure transparency and accessibility during audit
process.

Follow the central exchange rate set by ERM II: Eur. 1 = LM 0.4293.

VAT can only be reimbursed by ERDF if the organisation is not
entitled to refunds and if it was included in the approved application
form/ letter of grant. VAT status must be clarified with Department of
VAT.

Revenue must be deducted from the amount claimed.
INTERREG III

Some main categories of
cost
Calculating Staff Costs
Three main types of staff costs:
1)
2)
3)
Internal Staff costs
External Staff / External Expertise
Voluntary Staff
Cost of Auditing

An auditor’s certificate is necessary for
most claims for reimbursement.

The cost of auditing a project can be
included in claims for reimbursement if it is
included in the approved project
application forms / work packages.
Internal Staff

Staff members already employed by organisation who dedicate
normal working hours to their project.

These costs should form part of the 25% national co-financing of a
project.

Formula: Staff costs = hours worked x hourly rate.

Income tax and social security are included, allowances and fringe
benefits are excluded. Fixed allowances may only be included if
they are mentioned in the staff member’s contract. In this case, a
certified true copy of the contract must be submitted with the claim.
Claiming internal staff costs

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Documents to be submitted:
1) Letter of assignment and duties
2) Partner Declaration on Staff Costs
3) Time sheet signed by auditor/financial
controller.
4) Contracts if allowances are being claimed
6) Certified true copy of pay slip
7) Clear explanation of hourly rate calculation.
External Staff
Experts, auditors or other service
providers who are specifically contracted
or employed to work on project.
 Financed by 75% ERDF funds.
 Follow public procurement and
employment regulations when selecting
external experts or service providers.

Claiming external staff costs
Documents to be submitted:
 1) Contract / Letter of Offer and Letter of
Acceptance.
 2) Invoices and receipts or pay-slips
 3) If value is calculated per hour: Time sheet
signed by auditor
 4) Clear explanation of hourly rate calculation.
Voluntary staff
Staff members or experts who provide
unpaid research or services for project.
 Forms part of 25% national cofinancing.
 Formula: hours worked x value of work
provided (as valued by auditor). Rate must
be slightly below market value to reflect
voluntary nature of the work.

Claiming Voluntary staff costs
Documents to be submitted:
1) Letter of assignment and list of duties
2) Partner declaration on voluntary staff costs.
3) If value is calculated per hour: Time sheet
signed by auditor
4) Clear explanation of hourly rate calculation.
5) Auditor’s evaluation of work carried out.
Contracting
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Refer to Public Contracts: Legal Notice
177/2005.
Retain proof of every step of the selection
process.
Irregularities during the tendering or contracting
process may render the project ineligible for
funding.
Certified true copies of signed contracts must be
submitted with claims for reimbursement.
Overheads


Overheads include rent, electricity, heating,
water, cleaning etc. They can be claimed if they
were originally included in the approved
application form or work packages.
Overheads must be calculated on a pro-rata
basis (approved methodology by auditor) and be
backed up by receipted invoices.
Interreg III
Thank you for
your attention