1. 1 The Project Financial Management Selection 2012

2. 2 The most important documents concerning financial management are: The Official Programme Management Guide produced by the European CommissionThe Official Programme Management Guide The Agreement with the Commission Directorate General Justice (Financial Provisions) The Agreement between the promoter and the project partner The Guidelines for Applicants (Financial Provisions) Financial Templates produced by Pixel This ppt presentation summarizing all the documents above NB All of these documents are available in the Manual for Financial Management produced by PixelManual for Financial Management Main Documents

3. 3 General Remarks

4. 4 VAT VAT may be considered an admissible cost ONLY if the institution can demonstrate they are NOT able to recover it. Each partner will therefore have to make a specific declaration on this issue. VAT paid by public bodies is not an eligible cost

5. 5 Expenditures For any cost which is NOT included in the official budget of the project, it is NECESSARY to ask authorisation to the promoter and to the European Commission.

6. 6 Accountancy All costs must be registered in the internal accountancy system of the institution. All transactions must be recorded systematically in the beneficiary accounts.

7. 7 Payments All transactions must be carried out by bank transfer.

8. 8 Supporting Documents Supporting documents must be enclosed to the Financial report of expenditures. These may include: invoices, contracts of employment, pay slips, receipts, purchase order, etc Only copies of supporting documents should be sent. All original documents must be kept by the coordinator or co- beneficiaries during five years from the date of final payment.

9. 9 Eligible Expenditures

10. 10 Eligible Costs To be considered as eligible costs, the expenditures should be: –Related to the project activities -Made during the project life cycle (1/11/2012 – 31/10/2014) -Reasonable -Recorded in the project partners’ accountancy -Justified with appropriate accounting documents) -Conform to the rules set out in the Manual for Financial Management -Foreseen in the project budget -Comply with the requirements of applicable National legislation

11. 11 Managing Expenditure

12. 12 Staff Cost – Heading A

13. 13 Staff Costs 1/4 These costs can include the following categories of staff: Staff having a permanent contract with the partner Staff having a temporary employment contract* with the partner *the contract should explicitly link the person to the project and it should comply with the relevant national legislation.

14. 14 Staff Costs 2/4 Staff Costs are eligible only if the employee carry out activities that they would not perform if the project concerned had not been undertaken (a declaration is to be provided). For public bodies, these will be accounted under: -budget heading «K» - Co-funding quota - for the part related to usual working hours -budget heading «A» - EU funding quota - only for the part related to extra time working hours (to be demonstrated with remuneration for overtime work and/or costs for hiring a new employee for replacement of the one working on the project). See also Programme Management Guide Pg. 20, 30-33Programme Management Guide

15. 15 Staff Costs 3/4 Staff cost should be calculated on an hourly basis. To identify the hourly cost rate, the yearly gross cost the employer pays for the employee should be divided by the number of working hours of the employee as in their contract. Once identified the hourly cost, it should be multiplied by the number of hours worked on the project as from Time Cards. Gross cost calculation should include all the normal contributions paid by the employer.

16. 16 Staff Costs 4/4 Staff costs should be justified using: -Document explaining the internal policy on salaries -Detailed description of the method of calculation of the hourly cost rate -Employment contracts -Secondment Letter related to the project -Table summarising the person cost accounted on the project -Personal Time card -Payslips -Bank statements of payments made Examples: 01 A Staff Costs Enclosures

17. 17 Travel – Heading B

18. 18 Travel 1/3 Travel costs are eligible only if they are directly connected to specific project related activities. Travel costs should be related only to members of the staff of the project partners (therefore the names of travellers should be consistent with the names included in the “Staff” budget heading). Non staff members Travel costs should be accounted under the “Other Costs” budget heading.

19. 19 Travel 2/3 The project partners are required to choose the cheapest mean of travel, where this is not the case a full explanation should be provided.

20. 20 Travel 3/3 Travel costs should be justified using Detailed Expenditure sheet for each person, each enclosing supporting documents such as, for example: -Invoices of Travel Agency -Plane/Train/Bus ticket -For planes: Boarding Card (N.B. Without Boarding cards Plane cost is not eligible) -Invoice of Car Rental Company -List of participants duly signed with clear identification of the purpose of the trip, dates, name and functions of the participants in the project (for project meetings only one list of participants will be submitted by the coordinator) The costs incurred by the person travelling MUST be reimbursed by the partner and recorded into their accountacy. N.B. All documents enclosed should be translated into English and converted into Euro (use the official rate of the project)

21. 21 Subsistence 1/7 Subsistence costs include: - Accommodation (hotel invoice) - Meals (breakfast, lunch and dinners. No extras) - Local travels (excluding those to travel from the point of origin to the destination)

22. 22 Subsistence 2/7 Subsistence costs must not exceed the maximum daily amount per person in the destination country Maximum ceilings (December 2012)

23. 23 Subsistence 3/7 The costs indicated in the tables refer to a full working day with overnight stay. Where there is no overnight stay the costs are reduced by 50%. The maximum number of days that can be claimed is the number of working days + 1.

24. 24 Subsistence 4/7 Reimbursement of subsistence costs may be made on the basis of the internal policy of the Partner organisation, and therefore on the basis either of: - Actual costs (reimbursement of receipts) - Daily Allowance basis N.B. In both cases, proof of attendance and of overnight accommodation is required Subsistence costs should be related only to members of the staff of the co-beneficiary. Non staff members Subsistence costs should be accounted under the “Other Costs” budget heading.

25. 25 Subsistence 5/7 The system of daily allowance for reimbursement of subsistence costs can be used only if it can be demonstrated that such a system was officially in place before the grant was awarded. If the per diem exceeds the limit per country set in the Commission’s guide the cost claimed should be reduced accordingly.

26. 26 Subsistence 6/7 Possible examples of not eligible subsistence costs: -Mini bar in the hotel -Snacks and drinks (unless they are part of a main meal) -Bar costs (unless it is for breakfast) -Telephone costs in the hotel

27. 27 Subsistence 7/7 Subsistence costs should be justified using: Detailed Expenditure sheet for each person enclosing:  Declaration for Daily Allowance + Hotel Invoices Or  Reimbursement Sheet enclosing: -Restaurant Invoices -Hotel Invoice -Bus ticket -Taxi receipt  Proof that the payments have been made by the partner and are recorded in the accountancy (Payment in Cash MUST be avoided) N.B. All documents enclosed should be translated into English and converted into Euro, (use the official one for the project)

28. 28 Pixel 28 Travel and Subsistence Enclosures Staff costs should be justified using: 02 A Travel and Subsistence Costs Enclosures 02 B Travel and Subsistence Expenditure Sheet Model 02 C Travel and Subsistence Daily Allowance 02 D Travel Daily Allowance receipt

29. 29 Other Costs – Heading E

30. 30 Other costs 2/5 Example of “Other Costs”: -Lunches and Coffee breaks during meetings* -Renting of meeting facilities -Printing costs -Experts attending workshops -Translations and Interpreting * Only in case these have been covered by the hosting partner

31. 31 Other Costs 3/5 In case “Other Costs” refer to subcontracts (e.g. for Conference Catering Services, Interpreters or Translations) please notice that: 1) Any o subcontract during the project, not explicitly mentioned in the initial budget shall be subject to prior written authorisation by the European Commission. 2) The project partner should draw up an agreement with the sub- contractor. The agreement should include the following information: - Type of sub-contract - Start date and end date of the sub-contract - Sum to be paid - Detailed description of the costs - Work programme or phases - Payment procedure (total sum, spread out etc,) - Penalty clauses in the case that the agreement is not respected

32. 32 Other Costs 5/5 Other costs should be justified using: -Contracts with sub-contractors -Minimum number of offers as result from the call for tenders -Invoices -Proof of Payment (i.e. bank statement)

33. 33 Indirect Costs – Heading F

34. 34 Indirect Costs These costs include: - Communication costs - Infrastructure costs (rent, electricity etc) - Photocopying - Office supplies The maximum eligible indirect costs is indicated in the project (1061,90 euro per partner) These costs can be justified with a Declaration enclosing the method of calculation.

35. 35 Indirect Costs Enclosures 06 A Indirect Costs Enclosures 06 B Indirect Costs Declaration Model

36. 36 Common Mistakes 1/4 General Issues - Only costs recorded in the internal accountancy system of the project partner institution and paid by the project partner itself are eligible for the project. Costs sustained by an individual or by an institution other than the project partner are not eligible on the project - Each receipt/justifying document giving evidence to the expense must be clearly readable, at least in its main parts (issuer, type of product/service purchased, date and amount paid)

37. 37 Common Mistakes 2/4 General Issues - Be careful not to cover main parts of supporting documents with other information (e.g. Boarding Cards with luggage receipt, Invoice with Credit Card payment receipt etc.) - The receipt of a Credit Card or of a Bank transfer alone are not sufficient for justifying an expense

38. 38 Common Mistakes 2/3 Staff Costs - Staff costs must be based on the real hourly cost rate calculated starting form the yearly gross cost for the employer for each staff member. Do not use fixed hourly rates that cannot be justified by supporting documents - Time cards must be filled in on a daily basis, giving details of the activities carried out. Avoid writing for example: From 10 to 20 of January: Project management. - Please make reference to the number of hours of work foreseen on the official budget of the project and keep under control the consistency between those figures and the days of work you report.

39. 39 Common Mistakes 3/3 Travel Costs - Travel and Subsistence costs supporting documents must always be accompanied by the Expenditure sheet listing all the expenses - Use of maximum daily allowance rates is not acceptable, the daily allowance, used within the partner organization should be applied. - The proof of reimbursement of travel costs paid by the project partner to the person travelling must always be enclosed to the report - Boarding Cards are always needed, keep them safely after your flight.

40. 40 Financial Reports There are two main rules all partners have to follow for the production of the Financial report: A) The Financial report should be made filling in the forms that will be provided by the project coordinator. B) Each expenditure described in financial report should be justified attaching the related proof (e.g. invoice, receipts etc. etc.). Before sending the financial report to the project coordinator, the partner should make sure rules A and B are respected.

41. 41 Thank You for the Attention Questions?