Simplified costs Interreg V-A Romania-Bulgaria Programme

Start reading about it understanding it all team backing it up Reading Legal framework Regulation 1303/2014 - Article 67 – Forms of grants and repayable assistance Regulation 1303/2014 - Article 68 - Flat rate financing for indirect costs and staff costs concerning grants and repayable assistance Regulation 1299/2014 – Article 19 – Staff costs – huge fans of this article EC Guidance on Simplified Cost Options (SCOs) Understanding EGESIF questions, talking to desk officers (really, really we don’t control in any manner these expenditures?) All team Difficult to get everyone on board (since it represents a change, a novelty, not clear rules, no examples, no assurance on what the auditors will say aso). Lump sums and standard costs were not opted for because our financial guys seen them as even more riskier.

What did we choose? Flat rates Staff costs (art. 19/ Regulation 1299) Indirect costs (art. 68, para. 1, lit. a/ Regulation 1303) Options Standard scales of unit cost Lump sums (below 100.000) Flat rate financing Staff costs (ar. 19) Staff costs of an operation may be calculated at a flat rate of up to 20% of the direct costs other than the staff costs of that operation Indirect costs (art. 68) Up to 25% of eligible direct costs (fair, equitable and verifiable calculation method) Up to 15% of eligible direct staff costs (no method) - why we choosed a even if b was easier Flat rate applied to eligible direct costs based on existing methods and corresponding rates

Use of flat rates Mandatory for 3 PAs Transport (7b,c) Environment (6c,d) Risks (5b) Optional for 2 PAs Employment (8i) Institutional capacity (11c) Options Due to the type of projects (projects more focused on investments, equipments, infra for the first 3 PAs, mainly soft, human component more important for the last two). 3 different templates in the application form

Calculation of flat rates Staff costs: 5% for hard projects 15% for soft projects Indirect costs: 1% for hard projects 5% for soft projects Same calculation basis for both: direct costs pre-defined at Programme level Options What is hard What is soft We looked at previous experience when setting the base. Calculation basis, direct costs, were named in th Guide, clearly and exhaustively.

Example (hard project) Categories of expenditure Amount (Euro) Travel and accommodation 2,000 External expertise and services* 28,000 Equipment 100,000 Infrastructure and works 670,000 TOTAL (calculation basis) 800,000 Project preparation (max. 10% of calculation basis) 80,000 Staff costs – flat rate of 5%* of calculation basis 40,000 Office and administrative costs – flat rate of 1%* of calculation basis 8,000 TOTAL project eligible budget 928,000 Why we excluded

Worries Rules still not 100% clear Clarifications (could have major impact) Financial corrections on direct costs Auditors might see things in a different light Example: -using combination of staff costs and indirect costs -”Where an operation or a project forming a part of an operation is implemented exclusively through the public procurement of works, good or services, only point (a) shall apply. Where the public procurement within an operation or project forming part of an operation is limited to certain categories of costs, all the options referred to in para 1 may apply ” -letters of clarifications for one Programme only, the rest of the Programmes not always being aware of those clarifications, maybe applying issues in a different manner -based on direct costs, so if one of those gets a 25% correction, the rest of 20% of the expenditures will automatically get a flat correction -systemic errors (not really that bad, just the difference between the correct calculation and the one used). audits: we did check with AA, said it’s ok, but now at EC level it seems not to be clear how SC will be audited (recommendation from High Level Group).

On the bright side focus on results simplify the life of beneficiaries simplify our life -advantages (skip verifications) -reduced administrative burdern, so more time to focus on results (I also think at it as people going home earlier to their kids) -our job is easier (FLC, MA, even AA, we’re actually doing them a favor :D).

We want to do better. So we’re trying. Should you do it? We want to do better. So we’re trying.

Interreg V-A Romania-Bulgaria Programme robg@mdrap.ro Questions?  Ioana Glăvan Interreg V-A Romania-Bulgaria Programme robg@mdrap.ro