1. Communication campaign Most common issues identified: Personnel costs & Other direct costs Antonio Requena Fernández FCH JU Financial Officer

2. Personnel costs Hours dedicated to the project Hourly rate 2

3. Hourly rate of an employee Other statutary costs… Health insurance Pension contribution Social security Salary Total annual costs Annual productive hours 3

4. Hourly rate: Productive hours Standard ( ALL employees ) Total days in a year 365 Weekends -104 Subtotal 261 Annual holidays -21 Statutory holidays -15 Illness & others -15 Productive days per year 210 Working hours per day 8 Productive hours per year 1 680 Actual ( individual ) You compute the actual individual number of productive hours for each employee Don ’ t use billable hours !!! If actual productive hours exceeds standard  use actual !!! The time recording system must allow keeping track of this number of actual individual productive hours 4

5. Overtime 5 Overtime may be accepted In any other case : either overtime not paid or there is not clear distinction between normal and overtime hours The hourly rate applicable to these « overtime » hours has to be calculated separately from the hourly rate applicable to the normal working hours The hourly rate is calculated : Adding in the numerator : normal costs + « overtime » costs ( if any ) Adding in the denominator : normal hours + « overtime » hours The hourly rate is calculated : Adding in the numerator : normal costs + « overtime » costs ( if any ) Adding in the denominator : normal hours + « overtime » hours If actually paid according to beneficiary ’ s policy AND If there is a system that allows the identification of normal / overtime hours worked for the project

6. Hourly rate: Productive hours Activities included Normal working activities of the personnel, including : Sales and Marketing Preparation of proposals Administrative time Non - project related, general research activities Teaching, training and similar hours ( in the case of universities / similar bodies ) Activities excluded  General training ( if not project related )  General internal meetings ( if not project related ) 6

7. To be assessed by the auditors Must give the same level of assurance as the timesheets Alternative evidence Name and signature of a supervisor Amount of hours claimed for the project Daily, weekly or monthly basis Whole duration of the project Timesheets The golden rule : Claim ONLY actual hours worked on the project Hours dedicated to the project 7 Full name of beneficiary Name and signature of employee Title of the project Reconcilable with the absences register

8. Example of timesheet 8 Reference to the WP Brief description of tasks Reference to the WP Brief description of tasks

9. Actual personnel costs. Some errors Productive hours Annual costs Hours Personn el costs Timesheets not reliable Claim of more hours than dedicated to the project Claim of more hours than substantiated by timesheets Timesheets not reliable Claim of more hours than dedicated to the project Claim of more hours than substantiated by timesheets 9

10. Actual personnel costs. Some errors Productive hours Annual costs Hours Personnel costs Timesheets not reliable Claim of less hours than dedicated to the project Claim of less hours than substantiated by timesheets Timesheets not reliable Claim of less hours than dedicated to the project Claim of less hours than substantiated by timesheets 10

11. Actual personnel costs. Some errors Productive hours Annual costs Hours Personn el costs Use of standard hours instead of actual when the latter are higher Use of billable hours instead of productive hours Use of standard hours instead of actual when the latter are higher Use of billable hours instead of productive hours 11

12. Number of productive hours shall correspond to usual management practice of the beneficiary and reflects its actual working standards They exclude any ineligible cost item and any cost claimed under other costs categories in order to avoid double funding Based on the actual personnel costs of the beneficiary as registered in its statutory accounts, without estimated or budgeted elements Based on the usual cost accounting practice of the beneficiary and consistently applied to their participations in the Framework Programme Acceptability criteria for average personnel costs Average personnel costs 12

13. SME owners and other natural person who do not receive a salary SME owners 1 575 Annual living allowance corresponding to the appropriate research category published in the ‘ People ’ Work Programme of the year of the publication of the call to which the proposal has been submitted Hourly rate 100 Country correction factor published in the same document 13

14. 100 106.9 1 575 58 500 €/ year 39.71 €/ h Example : SME owner without salary from Austria with 5 years of experience at the time of deadline of submission of a proposal 2011 SME owners 14 Use the tool available at CORDIS tool CORDIS Use the tool available at CORDIS tool CORDIS

15. Travel costs Only for staff taking part in the project In case of conferences / seminars : copy of the presentations to show direct link to the project Expenses related to daily commute to work are not considered travel costs. Travel costs Only for staff taking part in the project In case of conferences / seminars : copy of the presentations to show direct link to the project Expenses related to daily commute to work are not considered travel costs. Other direct costs 15 The golden rule : Costs attributed directly to the project which can be identified as such according to the accounting principls of the beneficiary Consumables and supplies If they are necessary for the implementation of the project Subject to the accounting principles of the beneficiary, the following consumables / supplies can be considered either direct or indirect costs : Water, heating, electricity, maintenance, insurance Communication expenses, postal charges, office supplies Costs related to general administration and management Miscellaneous recurring consumables Consumables and supplies If they are necessary for the implementation of the project Subject to the accounting principles of the beneficiary, the following consumables / supplies can be considered either direct or indirect costs : Water, heating, electricity, maintenance, insurance Communication expenses, postal charges, office supplies Costs related to general administration and management Miscellaneous recurring consumables

16. Minor tasks Minor services not identifed in Annex I but needed for the implementation of the project Examples : Organisation of the rooms and catering for a meeting ( logistic support ) Printing of material, leaflets, etc. Services related to setting up and maintenance of a project website To be reported under type of activity “ Management ”, category of costs “ Subcontracting ” Minor tasks Minor services not identifed in Annex I but needed for the implementation of the project Examples : Organisation of the rooms and catering for a meeting ( logistic support ) Printing of material, leaflets, etc. Services related to setting up and maintenance of a project website To be reported under type of activity “ Management ”, category of costs “ Subcontracting ” Other direct costs 16 The golden rule : Costs attributed directly to the project which can be identified as such according to the accounting principls of the beneficiary

17. Other direct costs 17 The golden rule : Costs attributed directly to the project which can be identified as such according to the accounting principls of the beneficiary Equipment If necessary for the implementation of the project Costs to be determined according to the beneficiary ’ s usual accounting practice Possibility of charge 100% equipment acquisition price in 1 reporting period if national legislation allows it Otherwise, depreciation to be charged in each relevant periodic report Consider percentage of use in the project Depreciation costs for equipment bought before the start of the project Yes, if the equipment has not yet been fully depreciated, then the remaining depreciation can be eligible under the project Subject to the accounting principles of the beneficiary, computers and office software can be considered either direct or indirect costs Equipment If necessary for the implementation of the project Costs to be determined according to the beneficiary ’ s usual accounting practice Possibility of charge 100% equipment acquisition price in 1 reporting period if national legislation allows it Otherwise, depreciation to be charged in each relevant periodic report Consider percentage of use in the project Depreciation costs for equipment bought before the start of the project Yes, if the equipment has not yet been fully depreciated, then the remaining depreciation can be eligible under the project Subject to the accounting principles of the beneficiary, computers and office software can be considered either direct or indirect costs