PROJECT FINANCE AND FINANCIAL REPORTING Prof. Dr Vera Marković University of Niš Faculty of Electronic Engineering FUSE kick-off meeting 30 th January

" Money is the opposite of the weather. Nobody talks about it, but everybody does something about it.“ Rebecca Johnson Nevertheless, let us talk about money, because good financial management is important for accomplishing project goals 2

Outline  Budget headings & ceilings  Revised project budget  Eligible costs and required supporting documents  Cofinancing  Financial Reporting 3

BUDGET HEADINGS & CEILINGS Staff costs →→ Travel costs & costs of stay Equipment → Printing & publishing Other costs Indirect costs → Max. 40% of the total eligible direct costs Max. 30% of the total eligible direct costs 7% of the total eligible direct costs, recalculated at the end of the project based on the actual eligible expenditure 4

REVISED PROJECT BUDGET Overall project budget has been evaluated by EACEA as cost- effective Only the costs under the heading “Travel Costs and Costs of Stay” have been evaluated as slightly over-estimated. This budget heading has been reduced by 15%. This reduction caused also adjusting the 'Staff Costs' budget heading in order to respect the ceiling of 40% of the total eligible direct costs. This reduction is about 3.2%. Other headings have been not changed. 5

ESTIMATED PROJECT COSTS (after revision) Transfers between the budget headings are possible up to 10%, except for Indirect costs. For increasing a budget heading for more of 10% by transfers between headings, a written request to EACEA is necessary! 6

ESTIMATED PROJECT FINANCE (after revision) 7

ELIGIBLE COSTS AND REQUIRED SUPPORTING DOCUMENTS All costs must be:  incurred during the project lifetime  indicated in the estimated project budget  necessary for the implementation of the project  reasonable and in line with the requirements of financial management  in line with the requirements of applicable tax and social legislation  recorded in the accounting documentation of partners’ institutions 8

ELIGIBLE COSTS AND REQUIRED SUPPORTING DOCUMENTS STAFF COSTS  This part of grant may be used for performing academic or administrative tasks necessary to the achievement of the objective of the project  It is intended for all partners except public administrations (Ministries)  Staff costs are calculated on the basis of the task performed and not on the status of the person  Staff costs may not exceed local rates in European Union as well as Partner Countries. 9

STAFF COSTS - DAILY RATES ManagerTeacherTechnicalAdministrative Ceska Republika – CZ Deutschland - DE España - ES Polska - PL United Kingdom - UK Serbia - RS Maximum rates for daily staff costs are indicated here:  These rates include all taxes and social contributions  In order to calculate the hourly rate, the daily rate should be divided by

STAFF COSTS – SUPPORTING DOCUMENTS Each person who receives staff costs has to fill in and sign a staff convention form. The conventions must be also signed and stamped by the person responsible in the institution where this person is employed. These forms must be attached to the project accounts and kept by the coordinator as supporting documents. For staff performing both administrative and academic tasks a separate convention must be signed for each type of activity. 11

STAFF COSTS – SUPPORTING DOCUMENTS In addition, time-sheets have to be attached to each staff convention. The time-sheets must indicate - the date of the service provided - the number of hours worked on these dates - the tasks performed (short description). Time-sheets must be signed by the person who performed the tasks and signed and stamped by the person responsible in the institution where this person is employed. 12

STAFF COSTS – ADDITIONAL DOCUMENTS THAT MAY BE REQUIRED For the purpose of making an external financial audit report, some additional document may be required, for example: engagement contract, proof of tax payments, bank statements, etc. All supporting documents should be scanned, and scans sent to the coordinator ASAP! 13

TRAVEL COSTS & COSTS OF STAY This budget heading is intended to cover travel costs and costs of stay of staff and students participating in the project. Only people under official contract in a partner institution can use the grant for travel. 14

Eligible travel expenses Travel expenses include all costs and means of travel from the point of departure to the point of arrival (and return) and may include visa fees Reimbursement is based on real costs independent of the means of travel chosen (rail, bus, taxi, plane, hire car); beneficiaries are required to use the cheapest means of travel wherever possible. 15

TRAVEL COSTS Expenses for travel by private car will be refunded as follows: - either a rate per km in accordance with the internal rules up to a maximum of EUR 0.22; - or the price of a public transportation means (equivalent of a first-class fare for the same distance). For rented cars or taxis: the actual cost will be refunded (if it is not too expensive compared to other means of transport and taking into account factors such as time of day or excessive luggage) Costs related to visas and compulsory insurance also fall into this category. 16

COSTS OF STAY for STAFF Costs of stay include daily allowances for accommodation, food, local transport etc. The total amount of eligible expenses for costs of stay depends on the number of days, as given in the following table: 17

CEILINGS OF THE COSTS OF STAY DurationCosts of stay for international mobility or within an EU country (€) Costs of stay for partner country staff within their own country (€) 1 day days days days days days week

COSTS OF STAY FOR STUDENTS  Undergraduate students must have completed at least two years of study  The duration of students’ stay must be for a minimum period of two weeks, except for student representatives, who may participate in management/coordination meetings or quality control activities, in which case the duration of less than two weeks can be accepted 19

SUPPORTING DOCUMENTS FOR TRAVEL & STAY  The aim of the supporting documentation is to demonstrate the actual cost of the travel and the fact that the trip actually took place.  Each person who travelled must fill in and sign an individual mobility report (IMR) form (signing and stamping by a responsible person in the institution is not required!)  This form must be attached to the project accounts and kept by the coordinator as supporting documents 20

SUPPORTING DOCUMENTS FOR TRAVEL & STAY The original travel tickets, boarding passes, invoices and receipts must be kept in the accounting departments of partner institutions. When travel costs are shared (for example by a rented car), each individual should keep a copy of the invoice with their share of the hire costs indicated on it. 21

TRAVEL & STAY – ADDITIONAL DOCUMENTS THAT MAY BE REQUIRED For the purpose of making an external financial audit report, some additional documents may be required, for example: travel account issued by the institution where the person is employed proof of tax payments, when the cost of travel or stay is subject to taxation bank statements, etc. All supporting documents should be scanned, and scans sent to the coordinator ASAP! 22

EQUIPMENT Only the purchase of equipment which is directly relevant to the objectives of the project can be considered as eligible expenditure. Equipment and the provision of services are exempt from taxes, duties and charges. It is customary to purchase equipment through a centralized tendering procedure. The equipment must be recorded in the inventory of the university/institution where it is installed. This institution/university is the owner of the equipment. Supporting documents should be kept by this university /institution and include: 23

EQUIPMENT Invoice(s) for all purchased equipment When the threshold of EUR is exceeded, documentation on the tendering procedure and three quotations. For equipment of a unit cost on purchase of more than 5000 €, certificate of origin. Scanned supporting documents should be sent to the coordinator 24

PRINTING AND PUBLISHING COSTS This heading includes costs relating to printing, publishing, photocopying of teaching material and any other documentation necessary to achieve the objectives of the project All invoices should be kept with the project account as supporting documents Scanned supporting documents should be sent to the coordinator 25

OTHER COSTS This category covers: costs for dissemination of information (advertising in the media, promotional materials), renting of premises for dissemination events compulsory audits inter-project coaching (up to a maximum of EUR 2 500), bank charges subcontracting for specific tasks, etc. Supporting documents include invoices, subcontracts, bank statements, etc. 26

INDIRECT COSTS This category covers stationery, general photocopying, office supplies, postage and telecommunication costs, etc. No supporting documentation is required. No co-financing is permitted under this heading. 27

CO-FINANCING  The maximum European Union contribution may not exceed 90% of the total eligible costs at the end of the project. The remaining costs, equivalent to at least 10% of the total eligible costs must be financed from the own sources of partner institutions  Costs declared as co-financing must follow the same rules as the costs covered by EU grant. Than means, costs that are ineligible for Tempus funding, cannot be counted as co- financing contributions.  The supporting documents for co-financing are the same as those required for costs covered by the EU grant  Advice for partners: Please, have in mind the need for co- financing from the very beginning of the project 28

CURRENCY CONVERSION The conversion of costs incurred in another currency into euro should be performed in the following way:  From the beginning of the project to the date of receiving the second installment of TEMPUS grant : the official exchange rate on the month of the first installment  From the date of receiving the second installment to the end of the project: the official exchange rate on the month of the second installment Partners will be informed about the exchange rates that should be applied. Please, keep in mind that the specified exchange rate MUST be applied when costs are calculated by currency conversion – there were many mistakes related to that issue !!! 29

FINANCIAL REPORTS The coordinator is obligated to submit technical implementation reports and financial statements to the Executive Agency in specified intervals. Therefore, on request of the coordinator in order to provide adequate information, partners have to submit their financial reports to the coordinator. It is necessary that all partners have their own excel tables to be updated after each activity! 30

FINANCIAL REPORTS Financial report should present all costs incurred at the partner institution together with scanned supporting documents IMPORTANT: Partners have to send financial reports in due time as requested by the coordinator !!! 31

FINANCIAL GUIDANCE Whenever it is necessary to resolve something that is not clear enough regarding the financial issues, please consult the Guidelines for the use of grant for Tempus IV sixth call, or contact the coordinator. In order to provide partners with practical financial guidance and to help partners avoid making common mistakes, a manual will be prepared and uploaded to the project website very soon. 32

Thank you for your attention! FUSE kick-off meeting 30 th January