Policy Research and Innovation Research and Innovation European Commission Research DG-B7 FP7 Negotiation Process Not legally binding Diana TILOUCHE - RTD B7

Policy Research and Innovation Research and Innovation Structure of the Grant agreement: Core Grant agreement (GA), Annex I: DoW (Description of Work), Annex II: General Conditions, Annex III: Specific provisions for funding schemes (not applicable to these calls) Annex IV, V & VI: Forms A,B & C Annex VII: Form D terms of reference for the certificate of costs and Form E certificate on the methodology The negotiation process aims at concluding on the core GA and the ANNEX I

Policy Research and Innovation Research and Innovation Role of Coordinator The coordinator leads and represents the applicants in the negotiations with the Commission. Only one of the applicants can be coordinator. That legal entity will identify one of its staff as its representative to carry out the actions required of the coordinator. The representative of the coordinator is responsible for ALL contacts between the consortium and the Commission.

Policy Research and Innovation Research and Innovation Composition of the consortium Principle of FP7: beneficiary shall have the necessary resources to implement the action. In exceptional cases… third parties (third parties are explained a little bit later) Identify them at an early stage because additional documents & info to be submitted (third party agreement, validation of the third party under SC10, budget of the third party under SC10) Must be described in the DoW/TA Each third party situation is submitted to conditions. If the situation does not respond to the conditions => third party needs to access the GA as beneficiary

Policy Research and Innovation Research and Innovation Financial and Legal aspects Beneficiaries/Third Parties/Subcontractor(s) Validation of the participants and third parties under SC10 (registration of organisation and Participant Identification Code PIC) Check of the Budget 1.Upper Funding Limits 2.Indirect Costs Financial viability of participants, if applicable Generation of the Grant agreement/DoW

Policy Research and Innovation Research and Innovation Types of entities There are only three types of entities recognised in the GA : 1.The beneficiaries 2.The subcontractor(s) 3.The third partie(s)

Policy Research and Innovation Research and Innovation It is an exception and concerns only certain parts of the project (in principle not “core” parts of the project). It is auxiliary to the main object to the project. Subcontractor (article II.7) = Third party that performs some work for a beneficiary; the payment made by the beneficiary to the subcontractor is recorded in the accounts of the beneficiary and claimed to the Commission. Conditions (not exhaustive): Only non-core activities may be subcontracted; subcontract does not concern research work itself but services needed in order to carry out the research Subcontractor works without supervision of the beneficiary In DoW/TA (tasks and budget) unless minor tasks: photocopying, catering,… No subcontracting between beneficiaries of a grant Subcontracting

Policy Research and Innovation Research and Innovation Third parties carrying part of the work Third parties to be identified in the Grant agreement via special clause 10 (examples : EEIG (European Economic Interest Grouping), JRU (Join Research Units), affiliates and groupings carrying out part of the work. Costs may be claimed by the Third Party (using its own ICM). Third parties making available resources Costs may be claimed by the beneficiary Resources “free of charge” may be considered as receipts In both cases, Names of the third parties, tasks and resources must be described in DoW Third parties

Policy Research and Innovation Research and Innovation Third parties The third party must be linked to the beneficiary through an established formal relationship between the third party and the beneficiary, defined as follows: This relationship is broad and not limited to the GA It goes beyond the GA and predates the GA This formal relationship has an external recognition: either legal structure or formal: association, common lab, common infrastructure, common ownership.

Policy Research and Innovation Research and Innovation Validation and the negotiation process: Validation Project negotiation FP7 registration LEAR Operational units URF Documentation PIC reference PIC references PIC data PIC ref Beneficiaries European Commission Project managers Grant agreement

Policy Research and Innovation Research and Innovation Participant Portal (PP) The participant portal is an Internet portal for the participants to FP7. It has to become the single entry point to interact with the research programmes of the European Commission It is the gateway to access: Unique Registration Facility (URF) – registration and data management FP7 Nego Facility (NEF) – negotiation process Reporting tools (NEF, SESAM, FORCE) – submission of technical and financial reports … Info on Cordis: portal_content/help/participant_portal_usermanual.pdf rtal

Policy Research and Innovation Research and Innovation Validation All participants and third parties under special clause 10 have to be validated through the PP - URF  to be identified and checked at an early stage Documents to be sent: VAT extract, extract of registration, law, statutes of a company (to identify its character profit – non profit, research – non research, specific documents for SMEs) Check the participant’s status and its role in the consortium => additional financial documents to submit for participant(s) subject to the verification of its (their) financial capacity

Policy Research and Innovation Research and Innovation Legal status impact Status of the participant: natural person, legal person, Non profit, Research Organisation, Public Body, International organisation (of European Interest), Secondary and higher education establishment, Enterprise, SME Determines: Maximum EC reimbursement rate Indirect Cost Model (ICM) the need or not of a financial viability check

Policy Research and Innovation Research and Innovation Budget (Upper funding limits) Research and technological development activities: up to 50% of eligible costs. However, it can be up to 75% for: Non profit public bodies, secondary and higher education establishments, research organisations, and SMEs. Demonstration activities: up to 50% Management activities: up to 100% Other activities : up to 100% Coordination and support actions: up to 100%

Policy Research and Innovation Research and Innovation Direct/Indirect costs Direct costs : are all those eligible costs which can be attributed directly to the project and are identified by the beneficiary as such, in accordance with its accounting principles and its usual internal rules (for ex. : The cost of personnel assigned to the project, Travel allowances for staff taking part in the project, subcontracting, …) Indirect costs : are all those eligible costs which cannot be identified by the beneficiary as being directly attributed to the project, but which can be identified and justified by its accounting system as being incurred in direct relationship with the eligible direct costs attributed to the project (for ex. : water/gas/electricity, maintenance, insurance, …)

Research and Innovation Research and Innovation Indirect costs method (ICM) The choice of an ICM for a legal entity depends on its legal status and accounting methodology. Its ICM is usually valid for the entire duration of FP7. The choice of the ICM should be carefully assessed. If a change of the ICM is required, it will have an effect only on future grants with the exception of the correction of mistakes.

Policy Research and Innovation Research and Innovation Type of ICM’s (1) 4 Types of ICM : Actual indirect costs method : to be used by beneficiaries who have an analytical accounting system that can identify and group their indirect costs Simplified method : modality of the actual indirect costs calculation for organisations which do not aggregate their indirect costs at a detailed level (centre, department), but can aggregate their indirect costs at the level of the legal entity Flat rate of 20%: open to any beneficiary whatever the accounting system it uses. Accordingly, when this option is chosen, there is no need for certification of the indirect costs, only of the direct ones. The base of calculation is the total direct eligible costs of the beneficiary, excluding subcontracting.

Policy Research and Innovation Research and Innovation Type of ICM’s (2) Specific flat rate of 60%: for certain types of organisations. 3 conditions to use this specific flat rate : -Status of the organisation : non-profit public bodies, SHEE, Research org. or SME -Accounting system : unable to identify with certainty their real indirect costs for the project -Type of funding scheme : NoR and CP projects In FP7, normally, all departments, faculties or institutes which are part of the same legal entity must use the same system of cost calculation (unless a special clause foreseeing a derogation for a particular department/institute is included in the GA).

Policy Research and Innovation Research and Innovation Budget (Indirect Costs) Specific rule for CSAs : a limit (it is not a flat rate) of 7% of direct costs (*). (*) excluding the direct eligible costs for subcontracting and the costs of resources made available by third parties which are not used on the premises of the beneficiary.

Policy Research and Innovation Research and Innovation Financial viability check (1) A financial viability check is mandatory for : 1.Private coordinator(*) 2.Private beneficiaries(*) requesting more than EUR 500,000 as EU contribution Exception for 1. and 2 (see hereafter) 3. Any entity whose financial capacity is doubtful (*) as validated by URF

Policy Research and Innovation Research and Innovation Financial viability check (2) Exception : A natural person A Higher and secondary education establishments (*) or Coordinator/Beneficiary whose participation is specifically guaranteed for the project by a Member State or an Associated country (e.i. some German legal entities guaranteed by the German State) (*) as validated in URF

Policy Research and Innovation Research and Innovation Financial viability check (3) When an entity is subject to a financial viability check, URF (which is alerted by NEF) will send an to the LEAR of the organisation concerned to ask him/her to upload on the Research Participants Portal a scanned copy of the following documents from the last closed financial year: > Balance sheet, > Profit account, > Statutory audit report on the two financial statements above. If the entity requested a contribution of more than EUR 500,000, it will be requested to provide the statutory audit report. If there is no national legal obligation to have a statutory audit report, a specific contractual audit performed by an external auditor certifying the accounts of the last available financial year can be provided.

Policy Research and Innovation Research and Innovation IBBA IBBA : the bank account mentioned in the GA has to be an interest bearing bank account (IBBA). Exception in certain cases for public bodies (declaration on honour - impossibility to open an interest bearing account) The exemption is granted by REA after checking the documents received

Policy Research and Innovation Research and Innovation Grant agreement ready when: GA can be elaborated and sent to the coo when : - All beneficiaries and third parties (if any) have a valid PIC - budget is verified and OK - Financial viability check is OK (if any) - If third parties  all documents received - Annex I is complete - Signed A2.5 and A2.6 forms have been received - Signed Financial identification form from GPF is received - Check on IBBA is OK

Policy Research and Innovation Research and Innovation Accession to the Grant agreement Entry into force upon signature by coordinator & Commission Accession of beneficiaries via “Form A” - (Forms A are collected by the coordinator and sent to the Commission within 45 days of the signature of the GA). Note: prefinancing may not be distributed before the minimum number of “other” beneficiaries (as specified in the work programme related to the call) has signed the Form A and should be distributed only to those that have signed the Forms A. Later accession of beneficiaries via “Form B” (by way of amendment to the grant agreement)

Policy Research and Innovation Research and Innovation Amendments It can be implemented after the entry into force of the GA and before the final payment Approval/rejection of VALID request within 45 days Amendment is effected through an exchange of letters: -A letter-request from the Commission or the coordinator on behalf of the consortium in writing -A letter of acceptance, with an exception in the case of tacit approval -Link to amendment guidelines: ftp://ftp.cordis.europa.eu/pub/fp7/docs/amendments-ga_en.pdf

Policy Research and Innovation Research and Innovation Thank you for your attention