IPA partners seminar Dubrovnik, 5 th February 2013 Eligibility of expenditure and specificities of the public procurement

Index  Reference documents  Eligibility:  General rules  Timeframe  Budget lines  Supporting documents  Public procurement  VAT  Ineligible expenditure  Revenues  Audit trail

Reference documents Commission Regulation (EC) No 1085/2006 establishing an Instrument for Pre-Accession Assistance (IPA) and related amendments Commission Regulation (EC) No 718/2007 Implementing Council Regulation and related amendments Practical Guide to contract procedures for EC external actions (PRAG) MED First Level Control guidelines MED fact sheets Each Member State may define specific rules on eligibility of expenditures - national manuals

General rules on eligibility Necessary to carry out project’s activities/objectives Clearly related to activities foreseen in the Application Form Incurred during eligible period Incurred within MED area Real: actually borne directly by partners and supported by accounting documents justifying incurred expenses/payments (invoices, payrolls….) Supported by documents attesting administrative procedures adopted (tenders, contract, …). Respect EU/Programme/national relevant rules

Timeframe – Implementation/closure Engaged, invoiced and paid out: After the signature of the relevant Financing Agreement by all the parties Within date of project closure In case costs cannot be paid out within the date of project closure, 2 additional months only for payments Please note that this additional delay of two months does not apply if these months go beyond the 30 th June No expenditure can be paid after the 30 th June 2015.

Budget Lines Staff Durable goods Consumable goods Travel and accommodation Services External expertise Promotion, information and publications Overheads  FIRST LEVEL CONTROL GUIDELINES  FACT SHEETS Detailed practical info on:  background information, guidance, supporting docs  allocating costs on budget lines  accounting

Staff Directly employed by the partner according to national regular employment contracts Check national legislation/national eligibility rules In case of staff working less than 100%, the calculation shall be based on hourly rate Cost of real hours of employees working on the project No estimations Timesheets: duly and fully filled in In case the same project partner participates to more than one project, indicate on the monthly time sheet of the concerned person(s) the hours spent on all projects he/she is involved in

Staff – Ex. timesheet PERSONAL TIME SHEET PROJECT y INSTITUTION w EMPLOYEE YEAR / MONTH PERSON HOURS PER DAY PROJECT Total Hours per project Person hourCost PROJECT 1y ,00 PROJECT 2x ,00 PROJECT 3 000,00 PROJECT 4 000,00 PROJECT 5 000,00 PROJECT 6 000,00 Total working hours per day ,00 Total amount € 0,00

Staff – Ex. calculation hourly cost Staff – Ex. calculation hourly cost asap please check the accuracy of the method of calculation of hourly cost with your FLC/NCP

Durable / consumable goods DURABLE GOODS Foreseen in the approved Application Form Goods expected to last more than 1 year Depreciation according to relevant national rules According to article 34 of Regulation 718/2007, second hand equipment is not an eligible cost for IPA partners. CONSUMABLE GOODS Goods likely to wear in no more than 1 year time (low value asset) Not subject to depreciation

Held by personnel directly employed by partners’ structure (STAFF) Travel cost held by external experts: under “external experts” Travel general rule: the most economic way of transport shall be used (economy class, public transports) Accommodation within national limits Subsistence allowances not exceed the usual subsistence allowances of public authorities of project partner's country comply with rules applicable in the relevant country Travel and accommodation

Travels NOT foreseen in the application form: Please ask your Lead partner to request confirmation, through , to your JTS project officer In particular: Travels outside MED area: duly justified and previously approved by MED Managing bodies Travel and accommodation

SERVICES Costs for suppliers of services (translations, interpreting, meeting organisation, premises, catering for events, etc.) When these services have a direct link to promotion costs, it is possible to choose between the “services” budget line and the “promotion” budget line depending on budgetary needs EXTERNAL EXPERTISE Work of independent consultants/experts work is essential and the specific work cannot be carried out by partner’s personnel (studies, analysis, surveys, …) Travel and accommodation expenses of external experts must be included in this budget line Services / External expertise

Costs directly linked to project promotion: Press releases, inserts in newspapers Internet sites Events organization Printed publications: leaflets, brochures, newsletters and editing, etc... Promotion, Information and Publications

Overheads Eligible as long as they are based on real costs – actually paid – with a direct link with the project’s implementation. Lump sums, overall estimations or unjustified calculations are not authorised. The overheads costs which are chargeable on the project only partially: through a pro rata calculation method according to a fair, equitable and duly justified method (in accordance with generally accepted accounting principles)

Supporting documents DURABLE GOODS, SERVICES, EXTERNAL EXPERTISE, PROMOTION Evidence of compliance to public procurement rules: evidence of selection process Contracts Invoices Durable goods: evidence of the depreciation plan adopted for each element when depreciation applies Proofs of payment STAFF List of personnel working on the project Employment/labour contracts or internal service orders Payslips Timesheets Evidence of the calculation method of the hourly cost Proofs of payments of: salary, taxes, security schemes

Supporting documents TRAVEL AND ACCOMODATION List of personnel working on the project Agenda/programme of meeting/event Signed mission request/authorisation Travel invoices original tickets and all other original documentary evidence (i.e. boarding pass, invoices/other equivalent documents, in the case of e-tickets an with the booking number serves as a proof etc.) Proofs of payment Use of own car: reimbursement request through mileage sheet, according to national procedures and agreed values

Public procurement rules Procurements are awarded according to strict rules to ensure that: suitably qualified contractors are chosen without bias the best value for money or the best price is obtained, with the full transparency appropriate to the use of public funds Practical Guide to Contract procedures for EU external actions (PraG) explains the contracting procedures applying to all EU external aid contracts National rules on public procurement may be used if they are stricter than PraG

Public procurement rules Procurement procedures have to be applied for all services, supplies and works planned in the project budget The procurements have to be planned on project basis They cannot be planned in such a manner to avoid certain thresholds (artificial splitting) You should have allocated financial resources for public procurement expertise in your budget

Public procurement rules The IPA Project Partners act as Contracting Authorities Decentralised management: decisions are taken by the Contracting Authority without prior reference to the European Commission Ex post control: Procurements will be subject to verification audits afterwards, prior to reimbursements

Public procurement rules Transparency Same rules apply for all providers/suppliers Avoid conflict of interest Rules of nationality and origin Please refer to the PraG and contact the relevant national authority in your country for more details on the tendering procedures and financial thresholds

VAT does not constitute eligible expenditure unless it is genuinely and definitely borne by the partner and thus cannot be recovered VAT which is recoverable by whatever means cannot be considered as eligible First Level Controllers will have to confirm if the VAT has been really borne by the controlled project partner: coherence with the VAT status of the partner in the application form checklist annexed to the certification of expenditures VAT

Not supported by relevant documentation Not justified by project’s activities/objectives Not supported by the relevant public procurement procedures Lump sum, general estimations, unjustified calculations Expenditures held outside the eligible period VAT which is recoverable Representation expenditures (e.g. presents, flowers, etc.) Ineligible expenditure (general rules)

Ineligible expenditure (art 10 Financing agreement) Taxes, including value added taxes; Customs and import duties, or any other charges; Purchase, rent or leasing of land and existing buildings; Fines, financial penalties and expenses of litigation; Operating costs; Second hand equipment; Bank charges, costs of guarantees and similar charges; Conversion costs, charges and exchange losses associated with any of the component specific euro accounts, as well as other purely financial expenses; Contributions in kind; Interest on debt; Credits to third parties; Debts and provisions for losses or debts.

Examples: Sale of products Sale of merchandise Tuition Fees Conference Fees Services against payment Control: Generation of revenues will be subject to control during certification of expenditure Deduction: If a project generates revenues, the generated net revenue must be deducted from eligible costs in full or pro-rata depending on whether it was generated entirely or only partly by the co-financed operation Revenues

Audit trail Partners must ensure that all accounting documents linked to the project are available and filed separately Original copies of documents to be kept by each partner Until December 31 st 2021 Later if requested at national level In order to ensure a clear identification of the expenditures: Opening of a specific bank account for the project payments; Noting the allocation (project title and amount) directly on the invoices/equivalent documents

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