Transcript No Slide Title

COMMON PROVISIONS
2. FINANCIAL ASPECTS
Slide n°1 LIFE09 Kick-off Meeting, 13 January, 2011,
Warsaw
Anna McClintock, Financial Desk
CONGRATULATIONS
•
•
GRANT
•
The EU contributes to the costs
•
The EU does not pay for a service/deliverable/product
Successful utilisation of the grant depends on:
Slide n°2
•
Successful implementation of the project, AND
•
The quality of the project accounts/financial report
•
If the the financial rules are not followed to costs may be
declared ineligible – as a result the final grant may be
reduced.
LIFE09 Kick-off Meeting, 13 January, 2011,
Warsaw
Anna McClintock, Financial Desk
Reference documents
Grant Agreement (Art 1 & 2)
Common Provisions (CP) (Art 15.2, 24, 25 and 26)
Application guide (Env p 42-52, Inf p 45-54 , Nat p
60-70)
Financial Forms
Guidelines to forms,
http://ec.europa.eu/environment/life/toolkit/pmto
ols/lifeplus/financial_reporting.htm or /timesheets
Slide n°3
LIFE09 Kick-off Meeting, 13 January, 2011,
Warsaw
Anna McClintock, Financial Desk
CONTRIBUTION PRINCIPLES
• The grant agreement sets the contribution as a fixed percentage of
total eligible costs and a maximum contribution amount. (art. 24.1)
• It may not exceed the amount necessary to balance project
expenses and revenues.
• All revenues generated by the project must be declared. (art. 24.4)
• If an associated beneficiary reduces its contribution, the
coordinating beneficiary must find additional resources. (art. 4.5)
The Life contribution will not be increased !
• Commission may proportionally reduce the Community contribution.
(art. 18 and 24.5)
• Eligible expenses are limited to the amounts foreseen by cost
categories. (30 000 € and 10% overspending rule) (art 15.2)
Slide n°4
LIFE09 Kick-off Meeting, 13 January, 2011,
Warsaw
Anna McClintock, Financial Desk
METHODS OF PAYMENT OF THE
(art. 28)
CONTRIBUTION
•
General rule : 3 instalments :
1st pre-financing = 40 % of contribution max. amount
Mid-term pre-financing = 30 % of contribution max. amount
Final payment = Balance (maximum 30 %)
•
Small projects with an implementation period ≤ 24 months
or a Community contribution ≤ 300 000 € :
1st pre-financing increased to 50 % of contribution max. amount
Final payment = Balance (maximum 50 %)
Slide n°5
LIFE09 Kick-off Meeting, 13 January, 2011,
Warsaw
Anna McClintock, Financial Desk
THE 1st PRE-FINANCING
(art. 28.2)
• Grant agreement is signed by both parties
• Payment request states coordinating beneficiary and
bank data details
•
A guarantee issued by a bank or an insurance company
may be requested by the Commission during the
revision phase:
• equals the amount of the 1st pre-financing
• covers the duration of the project + 6 months
Slide n°6
LIFE09 Kick-off Meeting, 13 January, 2011,
Warsaw
Anna McClintock, Financial Desk
INTERESTS ON PRE-FINANCING
(art 24.7)
• The coordinating beneficiary shall inform the Commission of the
amount of any interest or equivalent benefits yielded by the 1st prefinancing amount.
• Interest will be deducted from the final payment.
• Exceptions :
 When 1st pre-financing ≥ 750.000 € : beneficiary informs the
Commission every January how much interest has been earned –
Commission sends a Recovery Order.
 When 1st pre-financing ≤ 50.000 € : interest not due
Slide n°7
LIFE09 Kick-off Meeting, 13 January, 2011,
Warsaw
Anna McClintock, Financial Desk
Member States and interest on prefinancing
For Coordinating Beneficiaries registered as public law bodies by
the Commission:
→ Ministries, regions; departments, länder, provinces etc.
→ Cities, municipalities, communes
→ Research centres, universities
• Interest on pre-financing will not be recovered by the
Commission.
• However, it must be reported in the financial statement as
income to the project.
• These beneficiaries are not entitled to interest in case of late
payment of the grant by the Commission .
Slide n°8
LIFE09 Kick-off Meeting, 13 January, 2011,
Warsaw
Anna McClintock, Financial Desk
THE MID-TERM PRE-FINANCING(art. 28.3)
•
After at least 150 % of 1st pre-financing has been used
•
Exception : Mid-term payment possible even if the 1st pre-financing
payment has not been paid :
 when at least 60 % of max. contribution has been spent
 amount = % set in grant agreement x eligible costs to date
•
Paid upon approval by the Commission of :
 a request for payment
 a mid-term technical report + statement of expenditure
 auditor’s details
•
Mid-term reports must be submitted no later than 9 months before
the end of the project
Slide n°9
LIFE09 Kick-off Meeting, 13 January, 2011,
Warsaw
Anna McClintock, Financial Desk
THE BALANCE (FINAL PAYMENT)
(art. 28.4)
•
Upon approval, by the Commission, of :
 the final technical report
 the final statement of expenditure and income
 the audit report if required (cf. art. 31)
•
Final reports must be submitted no later than 3 months
after the end of the project
Slide n°10
LIFE09 Kick-off Meeting, 13 January, 2011,
Warsaw
Anna McClintock, Financial Desk
Independent Financial Audit
(art. 31)
•
An independent auditor, nominated by the coordinating beneficiary,
shall verify the final statement of expenditure and income
 for all projects with a max. Community contribution ≥ 300 000 €
 following the format provided on the Life website / toolkit
•
The auditor will verify :
 the implementation of the project
 the eligibility of declared costs + compliance with CP
 compliance of costs with national legislation and accounting rules
 the declaration of all project income (including interests on prefinancing)
 compliance with rules for public and/or competitive tender (art
8.4)
 the origin of beneficiaries’ own contribution
Slide n°11
LIFE09 Kick-off Meeting, 13 January, 2011,
Warsaw
Anna McClintock, Financial Desk
REPORTING REQUIREMENTS
(art. 29)
•
Financial report covers the same period as the technical report
•
Reports follow the guidelines & templates cf. Life website / toolkit
•
In €
•
When beneficiary’s accounting is not in €: exchange rate of the 1st
working day of the year in which the expenditure is paid (cf. E C B
website http://www.ecb.int/stats/exchange/eurofxref/html/index.en.html)
•
The coordinating beneficiary certifies that the submitted information
is full, reliable, true and complies with the CP, that costs are actual,
that all income has been declared
•
Financial supporting documents are not attached but may be
requested later. Retained by coordinating beneficiary (art 6.1)
Slide n°12
LIFE09 Kick-off Meeting, 13 January, 2011,
Warsaw
Anna McClintock, Financial Desk
Slide n°13
LIFE09 Kick-off Meeting, 13 January, 2011,
Warsaw
Anna McClintock, Financial Desk
Slide n°14
LIFE09 Kick-off Meeting, 13 January, 2011,
Warsaw
Anna McClintock, Financial Desk
Slide n°15
LIFE09 Kick-off Meeting, 13 January, 2011,
Warsaw
Anna McClintock, Financial Desk
Consolidated Cost Statement for the Project
Project reference
Statement of expenditures
Total real costs Total eligible costs
with nonwith nonrecoverable VAT recoverable VAT
Personnel
Travel
EU contribution
Contribution of the coordinating
beneficiary
Contribution of the associated
beneficiaries
Other sources of funding
Direct income
External assistance
Durable goods - Infrastructure
Durable goods - Equipment
Durables goods - Prototypes
Land/rightspurchase/lease
Consumable material
Other direct costs
Overheads
TOTAL ELIGIBLE COSTS
% of eligible
costs
€
Statement of income
€ 0,00
€ 0,00 TOTAL
€ 0,00
Date and signature
Date
Slide n°16
LIFE09 Kick-off Meeting, 13 January, 2011,
Warsaw
signature
Anna McClintock, Financial Desk
ELIGIBLE COSTS
(art. 25)
•
Provided for in the budget of the project or have been authorized
through an amendment to the grant agreement
•
Directly linked to, and necessary for, carrying out the project
•
Reasonable and comply with the principles of sound financial
management
•
Compliant with applicable tax and social legislation
•
Incurred and recorded in the beneficiaries’ accounts during the
lifetime of the project:
 legal obligation to pay contracted after the signature of the grant
agreement
 corresponding action implemented after start date and before
end date of the project
 fully paid before the submission of the final report
Slide n°17
LIFE09 Kick-off Meeting, 13 January, 2011,
Warsaw
Anna McClintock, Financial Desk
PERSONNEL COSTS
(art. 25.2)
 Related to employees salaries (no external assistance)
 Service contracts : mandatory condition : work in the
beneficiary’s premises and under its supervision
(timesheets)
 NB : civil servants salary costs:
sum of public bodies’ contributions
must exceed by at least 2 % the sum of civil servants’ costs
Principles
Supporting Documents
•Based on actual time devoted to the project
Timesheets
•Based on actual gross salary / wages
+ obligatory social charges
Pay slips
Slide n°18
LIFE09 Kick-off Meeting, 13 January, 2011,
Warsaw
Anna McClintock, Financial Desk
CIVIL SERVANTS’ SALARY COSTS
Example of budget:
Life+ contribution = 50%
Personnel
Civil servants
Others
(art. 25.2)
but
105 €
20 €
External Assistance
50 €
Equipment
25 €
Minimum own contribution from
public beneficiaries
= 105 € + 2 % = 107,10 €
Maximum Life+ contribution
Total
Slide n°19
200 €
LIFE09 Kick-off Meeting, 13 January, 2011,
Warsaw
= 92,90 €
Anna McClintock, Financial Desk
Annual personnel costs
1. Annual gross salary actually paid – no estimates.
2. Obligatory social charges
3. Private Pension contributions are eligible if the employer is legally
obliged to provide it.
4. Compensation received from insurance or other schemes in case of
sickness, maternity leave, re-employment schemes to reactivate
unemployed people etc. must be deducted from annual salary.
5. Not eligible: i.e. company car, bonuses, similar fringe benefits
Slide n°20
LIFE09 Kick-off Meeting, 13 January, 2011,
Warsaw
Anna McClintock, Financial Desk
Productive time
Time of actual work, including:
• Overtime and Time worked during national
holidays or week ends.
• Meetings
• Mandatory Training courses
Slide n°21
LIFE09 Kick-off Meeting, 13 January, 2011,
Warsaw
Anna McClintock, Financial Desk
Non productive time
1.
2.
3.
4.
5.
Holidays actually taken
National holidays
Flexitime compensation
Week ends
Sickness/other absences (including maternity
leave etc)
Slide n°22
LIFE09 Kick-off Meeting, 13 January, 2011,
Warsaw
Anna McClintock, Financial Desk
Slide n°23
LIFE09 Kick-off Meeting, 13 January, 2011,
Warsaw
Anna McClintock, Financial Desk
Calculation of personnel costs
A
B
C
D
E
F = A+B+C+D+E
G
H
I
J
K
L = G-H-I-J-K
M=F/L
Slide n°24
Annual gross salary for the relevant calendar
year including 13th (or more) month salary.
+ Compulsory social charges (employee and
employer)
+ Compulsory pension contribution
+ Compulsory holiday allowance
+ Other compulsory allowances
= Gross annual salary costs
Annual time units including extra hours (*)
Annual holidays
Week-ends, flexitime compensation
National holidays
Sickness/other absences (maternity leave)
Annual working hours
Annual time unit rate
LIFE09 Kick-off Meeting, 13 January, 2011,
Warsaw
Anna McClintock, Financial Desk
Recommendations for time
sheets/time registration
•
•
•
•
Identify employee and LIFE project
Daily registration
Ideally detailed per action
Ideally document total hours worked to
secure correct calculation of time unit rate
• Signed and validated during the first week
following the month of registration
Slide n°25
LIFE09 Kick-off Meeting, 13 January, 2011,
Warsaw
Anna McClintock, Financial Desk
Model time sheet
Slide n°26
LIFE09 Kick-off Meeting, 13 January, 2011,
Warsaw
Anna McClintock, Financial Desk
Example 2 – a reliable time sheet
Slide n°27
LIFE09 Kick-off Meeting, 13 January, 2011,
Warsaw
Anna McClintock, Financial Desk
Example of an unreliable time
sheet – 29/31 February
Slide n°28
LIFE09 Kick-off Meeting, 13 January, 2011,
Warsaw
Anna McClintock, Financial Desk
Example of an unreliable time
sheet – monthly subtotals
Slide n°29
LIFE09 Kick-off Meeting, 13 January, 2011,
Warsaw
Anna McClintock, Financial Desk
Example of an unreliable time sheet- generic
time
Slide n°30
LIFE09 Kick-off Meeting, 13 January, 2011,
Warsaw
Anna McClintock, Financial Desk
TRAVEL COSTS
Principles
Charged in accordance with
internal rules of the beneficiary
(art. 25.3)
Supporting Documents
Flight tickets, hotel bills,….
Journeys by car : based on
distance and internal rules

Internal rules for re-imbursement of travel expenses

Detailed specification of travel expenses, two lines if necessary, i.e.
destination, # of persons, # km, # nights etc.

Group low value travel expenses (supported by accounting documents
offering same level of detail, eg. driving log-book).

Excluding costs incurred by external consultants, journeys between
home and work place.
Slide n°31
LIFE09 Kick-off Meeting, 13 January, 2011,
Warsaw
Anna McClintock, Financial Desk
Slide n°32
LIFE09 Kick-off Meeting, 13 January, 2011,
Warsaw
Anna McClintock, Financial Desk
EXTERNAL ASSISTANCE
(art. 25.4 & application guide)
1.
•
•
•
2.
Slide n°33
Tender procedures
must comply with Community and national
legislation.
Naming the subcontractor in the revised budget
does not exempt the beneficiary from applying the
normal tendering procedure.
NEW for LIFE+ - competitive tenders for private
beneficiaries – obligatory for orders over €125.000.
Project beneficiaries/co-financiers cannot act as
subcontractors/suppliers.
LIFE09 Kick-off Meeting, 13 January, 2011,
Warsaw
Anna McClintock, Financial Desk
Slide n°34
LIFE09 Kick-off Meeting, 13 January, 2011,
Warsaw
Anna McClintock, Financial Desk
DURABLE GOODS
(art. 25.5- 25.12 & Application guide)
•For infrastructure and equipment (LIFE ENV, LIFE INF, LIFE BIO) depreciation only is eligible.
•Each beneficiary applies its internal accounting rules for
depreciation charges. National accounting standards and the
principle of consistency must be respected.
•Only depreciation strictly related to the use for the project is
eligible: the calculation must take into account the period and the
rate of the actual use for the project.
•Durable goods which must be depreciated:
placed on the beneficiary's inventory of durable goods
treated as capital expenditure
Slide n°35
LIFE09 Kick-off Meeting, 13 January, 2011,
Warsaw
Anna McClintock, Financial Desk
DURABLE GOODS
(art. 25.5- 25.12 & Application guide)
• The Maximum Eligible depreciation charges:
 Infrastructure costs: 25% of the total
purchase cost
 Equipment costs: 50% of the total
purchase cost
• Depreciation of durable goods purchased before
the start of the project is not eligible for LIFE+
funding. It is covered by Overheads.
Slide n°36
LIFE09 Kick-off Meeting, 13 January, 2011,
Warsaw
Anna McClintock, Financial Desk
DURABLE GOODS
(art. 25.5- 25.12 & Application guide)
PROTOTYPE – 100% eligible
(Only for Life+ Env and Life+ Bio)
•
Has never been commercialised
•
Not available as a serial product
•
Can not be used for commercial activities or sold during 5
years after the project end date
Slide n°37
LIFE09 Kick-off Meeting, 13 January, 2011,
Warsaw
Anna McClintock, Financial Desk
DURABLE GOODS
(art. 25.5- 25.12 & Application guide)
Life+ NAT projects
If the beneficiary is a public body or a non-governmental /
private non-commercial organisation:
100% eligible for infrastructure and equipment used extensively in project
implementation and assigned to nature conservation after the end of the
project.
If the beneficiary if a commercial organisation:
Durable goods must be depreciated.
Slide n°38
LIFE09 Kick-off Meeting, 13 January, 2011,
Warsaw
Anna McClintock, Financial Desk
Slide n°39
LIFE09 Kick-off Meeting, 13 January, 2011,
Warsaw
Anna McClintock, Financial Desk
LAND PURCHASE LIFE+ Nature:
(art. 35.1)
“Environmental clause”
•
•
•
•
•
Costs of land purchase or long-term lease of land/use rights are only
eligible for Life+ Nature projects
Purchase prices are based on market terms
Assign the purchased assets definitively to nature conservation activities
beyond the end of the project
Coordinating beneficiary ensures that the entry in the land register
includes a guarantee that the land will be assigned definitively to nature
conservation
Land purchased by private organizations: guarantee that the land
property will be transferred to a legal body primarily active in the field
of nature protection (if the beneficiary ceases to exist)
Slide n°40 LIFE09 Kick-off Meeting, 13 January, 2011,
Warsaw
Anna McClintock, Financial Desk
Slide n°41
LIFE09 Kick-off Meeting, 13 January, 2011,
Warsaw
Anna McClintock, Financial Desk
OTHER BUDGET POSTS
Budget Posts
Supporting Documents
Detailed invoices
• CONSUMABLE MATERIAL (art. 25.11)
General office supplies are covered by Overheads
• OTHER COSTS (art. 25.12)
Detailed invoices
Costs necessary for the project, not falling within
a defined category
• OVERHEADS (art. 25.13)
maximum 7 % of the total amount of eligible
direct costs, excluding land purchase costs
Invoices not needed
• Income (art. 24.4)
Associated beneficiaries, co-financiers and direct
revenues
Slide n°42
LIFE09 Kick-off Meeting, 13 January, 2011,
Warsaw
Receipts etc
Anna McClintock, Financial Desk
Overheads
Total overheads/indirect costs with non-recoverable VAT
€0,00
A
B
Seq n°
Year
C
Description of cost item
D
Invoiced amount in
national currency
without VAT
E
F
Invoiced amount in
national currency with
non-recoverable VAT
Invoiced amount in
national currency
without VAT attributed
to the project
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
G
H
I
23
1,00000
1,00000
1,00000
1,00000
1,00000
1,00000
1,00000
1,00000
1,00000
1,00000
1,00000
1,00000
1,00000
1,00000
1,00000
1,00000
1,00000
1,00000
1,00000
1,00000
1,00000
1,00000
1,00000
24
1,00000
25
1,00000
26
1,00000
27
1,00000
28
1,00000
29
30
1,00000
1,00000
Total
Slide n°43
J
Invoiced amount in
Invoiced amount Invoiced amount with
national currency with
without VAT
non-recoverable VAT
Exchange rate
non-recoverable VAT
attributed to the
attributed to the
attributed to the project
projectin in € (D/H) projectin in € (E/H)
LIFE09 Kick-off Meeting, 13 January, 2011,
Warsaw
€0,00
Anna McClintock, Financial Desk
€0,00
Income
Contribution of associated beneficiaries
Name of associated beneficiary
Amount in national
currency
Year
Exchange
rate
Amount of co-funding
in €
1,00000
1,00000
1,00000
1,00000
1,00000
€0,00
Total
Other sources of funding
Name of co-financer
Amount in national
currency
Year
Exchange
rate
Amount of co-funding
in €
1,00000
1,00000
1,00000
1,00000
1,00000
€0,00
Total
Direct income
Description of the direct income
Amount in national
currency
Year
Exchange
rate
Amount in €
1,00000
1,00000
1,00000
1,00000
1,00000
Total
Slide n°44
LIFE09 Kick-off Meeting, 13 January, 2011,
Warsaw
€0,00
Anna McClintock, Financial Desk
INELIGIBLE COSTS
Non exhaustive list. See art. 26 of Common Provisions
•
Costs in any category of expenditure over and above that foreseen in the
budget plus 10% and 30 000 € (as referred to in art. 15.2)
•
VAT (see art. 30)
•
Costs incurred in relation to activities not foreseen in the project
•
Costs incurred for the purchase of durable goods or communication material
not bearing the LIFE logo (and the Natura 2000 logo, when applicable)
•
Cost incurred for an action which benefits from aid under other
Community financial instruments
•
Costs for which a beneficiary already receives an operating grant from
the Commission during the period in question
•
Costs related to any action considered as a compensatory measure
•
Costs relating to management plans, action plans and similar plans, drafted
or modified in the context of a LIFE+ project, if the related plan is not
legally operational before the project end date
Slide n°45
LIFE09 Kick-off Meeting, 13 January, 2011,
Warsaw
Anna McClintock, Financial Desk
Partnership agreements
art. 4.8 of Common Provisions
•The Commission does not accept or reject partnership
agreements - the Commission only highlights possible
problems.
•To ensure that the participants have the tools to solve
their problems.
•Not sufficient to refer to the Common Provisions, i.e.
liabilities between participants, member states laws in
case of dispute, payments from CB to AB.
Slide n°46
LIFE09 Kick-off Meeting, 13 January, 2011,
Warsaw
Anna McClintock, Financial Desk
Specific instructions for Financial Reporting
• Do not wait until the mid-term or the final report
before preparing the Statement of Expenditures.
It is required:
• In all reports (Art. 12.2 CP)
• At the occasion of all Monitoring Visits
• Ensure that Coordinating Beneficiary receives data
from Associated Benefifiaries on a regular basis.
Slide n°47
LIFE09 Kick-off Meeting, 13 January, 2011,
Warsaw
Anna McClintock, Financial Desk
Specific instructions for Financial Reporting
• Be careful: self-invoicing and invoicing among
beneficiaries is not allowed.
• Verify that all columns of the financial forms are
properly filled-in
•Send as soon as possibile the declaration for the
non-recoverability of VAT by beneficiaries.
Slide n°48
LIFE09 Kick-off Meeting, 13 January, 2011,
Warsaw
Anna McClintock, Financial Desk
A FEW REMINDERS …
(art. 6)
All beneficiaries
• Must contribute financially to the project’s costs
• Shall maintain up to date books of accounts
• Shall keep all supporting documentation for all expenditure
and income for at least 5 years after the final payment
• Ensure that all invoices include a clear reference to the
project and a link to the analytical accounting system
• May not act as sub-contractor/supplier to each other (no
invoicing among partners !!)
Slide n°49
LIFE09 Kick-off Meeting, 13 January, 2011,
Warsaw
Anna McClintock, Financial Desk
Ineligible on formal grounds difficult to rectify at a later stage
•Register time worked for the project on a daily basis using time
sheets.
•Respect the public tender/competitive tender.
•Provide all information asked for in the financial reporting.
•Provide sufficiently detailed description (quantity where appropriate)
to justify eligibility.
•Costs incurred by non-beneficiaries (Company groups) – not eligible
if separate legal entities.
•Purchases from sister companies (separate legal entities) and sister
departments (same legal entity) – best value and excluding profit,
overheads etc (art 26 9th)
Slide n°50
LIFE09 Kick-off Meeting, 13 January, 2011,
Warsaw
Anna McClintock, Financial Desk
A FEW MORE HINTS …
•
Read and re-read the Common Provisions !!
•
Give the Common Provisions to all your associated
beneficiaries and make sure they read and
understand them.
•
Make sure your associated beneficiaries send you
accounting documentation on a regular basis.
•
Monitor project expenses, compare them against the
budget.
Slide n°51
LIFE09 Kick-off Meeting, 13 January, 2011,
Warsaw
Anna McClintock, Financial Desk
Thanks for your attention
Please direct your questions through the
monitors
Good luck with your projects!
http://ec.europa.eu/environment/life/toolkit/pmtools/index.htm
Slide n°52
LIFE09 Kick-off Meeting, 13 January, 2011,
Warsaw
Anna McClintock, Financial Desk