Financial Requirements BMW Regional Assembly 17 th May 2012

Outline 1.Role of Lead Partner & Project Partners in Financial Management 2.Financial Reporting 3.Expenditure Claims 4.Eligibility of Expenditure 5.First Level Control 6.Preparatory Costs 7.Legal Requirements

Devolved legal and financial responsibility The Lead Partner ensures sound management and the delivery of outputs drafts the Partnership Agreement, establishing mutual rights, obligations and duties among project partners. ensures that expenditure is eligible, even if partners remain liable for their own actions and related expenditure is responsible for reporting and other administrative actions to the JTS distributes ERDF to partners. The BMW Regional Assembly (LP) will be responsible for ensuring copies of all documentation are available for audit, to assist with this all partners will be required to forward copies of all invoices, timesheets etc to LP when submitting claim (scanned, microfiches accepted or hard copy). Claims will be required by JTS on 30 th April and 31 st October each year, these dates are non-negotiable. In order that LP may meet these deadlines it will be necessary for Project Partners (PP) to submit certified claims by mid-February and mid August each year

Project Partners Prepare eligible expenditure claims for validation (FLC) Assume responsibility for any financial corrections arising from expenditure already declared Retain all original documentation up to 31 st December 2021 Ensure adequate internal controls and procedures Co-operate with second level controls (audits) Designate a financial control contact person to liaise with LP Financial Manager

Lead Partner Principle Partnership Agreement Overall responsibility project implementation: project content + financial management Responsibility for Project Management Signature of Subsidy Contract Transfer of received ERDF funds to partners Organisation of audit of all expenditure Contact with JTS Submission of progress reports, payment claims, audit reports, project modifications, day-to-day questions…

Implementation stage Joint implementation: activities must be carried out and coordinated by all partners. Reporting and monitoring: jointly, timely, activities + expenditure. Progress Reports make a link with the Application and the Payment Claim. First Level Control and control regulations: national rules apply Payments: the principles of post-reimbursement, the time lag between expenditure and reimbursement and the grant rate must be clear. Irregularities / recoveries: prevention is better than cure Decommitment issues: information plays a vital role!

Partner Claims All partners submitting claims should ensure the following are forwarded to Lead Partner in either hard or soft copy. 1.Completed Partner Claim 2.Detailed Verification Sheet 3.Signed FLC Certificate 4.Copies of all Invoices, timesheets etc 5.Completed Expenditure Forecast for next 6 months 6. Progress reports will be required with each claim 7. April Claim will be accompanied with the long version Progress Report 8. October Claim will require short version Progress Report 9. Each claim should include: i. Completed claim form ii. Detailed Verification Sheets - full schedule of costs incurred iii. Signed FLC Declarations for all partners

General considerations: the big picture EU regulations in general, esp. General Regulation 1083/2006. Regulations (EC) 1080/2006 and 1828/2006 Regulations (EC) 846/2009 amending Regulation 1828/2006 Public procurement rules State aid Country specific eligibility rules (Wallonia, Ireland…) NWE Guidance notes

Eligibility Period Start Date Costs are eligible from the start date indicated on the Application Form, (1 st January 2011), at the earliest one year prior to the closure of the call for proposals as long as the actions have not been completed before that date End Date The end date indicated in the Application Form, (31 st May 2015) is the date by which the final report should be submitted to the Secretariat. NB Any expenditure (including costs linked to the project closure) incurred, invoiced or paid after the official project end date is ineligible.

Eligibility of Expenditure Partner Staff Staff costs are the costs of the actual time worked by persons directly carrying out the work under the project and directly employed by the partners Partner time claimed must be supported by timesheet. It is the preference of the JTS that such timesheets show all time worked and not just time appropriate to project. Daily/hourly rate claimed should be supported by rationale applied for calculation of such rate.

External Expertise Work done by independent consultants must be essential to the project and be reasonably priced (limited to €800 per day) Costs must be paid on the basis of contracts/invoices – it is the Partner’s responsibility to ensure that public procurement rules are respected Travel and accommodation expenses for external experts should be recorded under the external expertise budget line. Exceptions such as website development or communications should be recorded under the “Publicity” budget line, all audit costs are recorded under the “Audit/First Level Control” budget line

Travel & Accommodation Only certified, paid expenses should be included Claims should be supported by copies of tickets, receipts, invoices etc as appropriate. Costs must be directly related to and essential for the effective delivery of the project and cover economy class travel on public transport. National guidelines for payment of Travel & Subsistence will apply. Payments must also be consistent with organisational rules/rates

Meetings & Seminars Costs related directly to the organisation of meetings and events, i.e. renting premises, hire of equipment, provision of meals etc. Participation in meetings and seminars related specifically to the project should be charged to this budget line. Related travel costs for external experts must not be claimed under this budget line, this should be charged to the appropriate specified budget line, i.e. External expertise, publicity, audit.

Publicity Expenditure with the main aim of promoting the Project should be part of this cost category. This should include website, promotional material and printed publications. Public Procurement rules must be observed in selecting company or individual who will carry out the assignment.

Equipment Durable equipment charged to the project must be essential for the delivery of the project and used for that purpose. Depreciation rules will apply to all equipment charged to the project. Depreciation will be made in accordance with the internal accounting rules of the partners. Only the portion of the equipment’s depreciation corresponding to the duration of the project and the rate of actual use for the purpose of the project may be taken into account. Goods purchased prior to the start of the project may be claimed at a depreciated rate as long as they have not previously been financed by any other source.

Audit Costs Audit costs are those related directly to any audits /First Level Control checks carried out on project. All invoices must be paid prior to period close date. Any expenditure incurred in relation to closure which has not been paid cannot be claimed. To maximise expenditure it will be acceptable to obtain a Pro- Forma invoice from your First Level Controller for the final claim which should be paid prior to period end date to allow for inclusion in final claim

Administration Costs Administration costs include items such as office rent, maintenance and furniture, electricity, heating, water, insurances, telephone, fax, internet, stationery and other administrative structure costs. Since April 2011 a flat rate of 11% of Partner Staff will be automatically applied for administration costs

Preparation Costs Preparation costs may be claimed in relation to: Costs related to project development and application Activities must show a direct demonstrable connection to the development of the project Costs must have been incurred and paid after 1 st January 2011, all expenditure incurred prior to this date is deemed to be ineligible They may include costs under all budget lines and are limited to a ceiling of €100,000 in total eligible costs, for the entire project. Preparation costs must be claimed by all partners together. It is proposed that Claim 1 to be submitted in October 2012 will include Preparation Costs only.

Ineligible Expenditure National banking charges VAT – unless it is genuinely and definitively borne by the final beneficiary Fines, financial penalties and expenditure on legal disputes Interest on debt For partners from the NWE area, any expenditure incurred outside the eligible area (for example, costs of a meeting or conference held outside the area) must be justified in full and a clear need for the expenditure to be incurred in the area must be demonstrated In-kind contribution can only be included in Payment Claims if it was included in the Approved Application Form attached to the Subsidy Contract

Payment Claim Partners should agree a reasonable timeframe with their First Level Controllers, having regard for the timeframe for Lead Partner submitting claim to their First Level Controller. Partners should be aware that final 15% ERDF payment will be withheld pending completion and acceptance of final progress report and payment claim

First Level Control Project Partners should ensure First Level Controller has been approved. Any amendments to claim by First Level Controller should be clearly noted on the claim form. It would be preferable if, in the event of an amendment, individual amounts were not revised on the Verification Sheets but a negative adjustment shown separately and referenced to the actual amount declared. It should also be clearly noted in the text field by the First Level Controller whether or not such adjustments have, in fact, been applied. FLC Certificate accompanying claim must be signed by the approved First Level Controller only. First Level Controller’s declaration in claim form must not be altered. FLC should comply with 2 month rule – Art 9.2 of Subsidy Contract.

Payment Flowchart

The first payment claim The following documents are necessary for payment of the first claim: a signed Subsidy Contract. a signed Partnership Agreement. first level controller approbation certificates for all partners submitting expenditure and, in any case, the Lead Partner. a letter confirming the project’s bank details for payments, ideally with a bank document showing the IBAN.

Expenditure Targets Reporting Deadline YearAnnual Target (total eligible costs) Cumulative Target (total eligible costs) 31 October €69, April €693,170.60€763, April €1,191,696.38€1,954, April €1,279,203.85€3,233, April €598,517.00€3,832,440.22

Audit Trail Original Documents must be retained at partner level Copies of all documents (photocopies, microfiche or electronic) must be retained by Lead Partner All documentation must retained and accessible for a period of three years following the last payment to the Programme, i.e. 31 st December Projects who cannot provide sufficient documentation risk losing their ERDF grant.

Project Modifications 3 modifications are allowed over lifetime of project No changes permitted within last 6 months of the project Can spend up to 120% of a budget line with notification Can spend more than 120% of a budget line, with approval Changes to the application form, partnerships and end date also require approval

Common Errors Mistakes in timesheets Using incorrect budget line Missing original documents or poor quality copies Not project related Breach of public procurement FLC comments in checklist does not correspond to payment claim. Double Financing Claiming recoverable VAT and other recoverable charges Publicity Revenues/Receipts not declared

Useful Website Links Project Website to be agreed

Lead Partner Contacts Project Manager- Kieran Moylan Project Coordinator- Michael O’Brien Communications Manager - Barry Guckian Finance Manager- Catherine Burke Telephone: - (00353) Fax:- (00353)