Harmonised Implementation Tools (HIT) 1st meeting on HIT with cross-border cooperation and transnational cooperation programmes in the Mediterranean Area 17 September 2014 | Milan, Italy Application Form – Finance

Project – consolidated data for all partner Section A.3 Project budget summary PART D Project budget Partner – separate for each partner PART E Partner budget Budget sections in the Application Form 2 Project Partner 1 Partner 2 Partner 3 Partner 3+n Insert of data: only once HIT Application Form

Programme co-financing ERDF, IPA II, ENI ERDF equivalent The programme financial support to the project. Depending on the programme, this entails support from EU funds (ERDF, IPA II, ENI) and ERDF equivalent (e.g. Norwegian fund, Swiss fund, etc.). Co-financing rate (%)The maximum rate of programme co-financing (separate for EU funds and each ERDF equivalent). Contribution public private Counterpart to programme co-financing secured by the partners (paid by the partners from their own resources or paid to the partners from external sources). Automatic public contribution Public funding automatically allocated to a project partner from national/regional sources, external to the partner organisation. HIT glossary 3 HIT Application Form

D1 – Project budget breakdown per partner D.2 – overview per partner / per budget line D.3 – overview per partner / per period D.4 – overview per partner / per WP D.5 – overview per WP / per period D.6 – overview per WP / per budget line D.7 – In-kind contribution PART D – Project budget 4 Analysis: focus on partners Analysis: focus on WP HIT Application Form

1. Staff costs 2. Office and administration 3. Travel and accommodation 4. External expertise and services 5. Equipment 6. Infrastructure and works Budget lines 5 Categories of costs listed in Art 18 ETC Regulation Specific rules defined in the Commission Delegated Regulation (EU) 481/2014 HIT Application Form

E1 – Partner budget E.2 – Origin of partner contribution E.3 – In-kind contribution E.4 – Partner budget: breakdown per budget line PART E – Partner budget HIT Application Form 6 Possibility to use real costs or simplified cost options (e.g. flat rate for staff costs, flat rate for office and administration)

ERDF outside (the Union part of) the programme area 7

Section C.6 – Activities outside (the Union part of) the programme area Article 20 ETC Regulation a) Activities are of benefit for the programme area (demonstrated in the Application Form) b) Ceiling of 20% of ERDF support respected at programme level (30% programmes covering outermost regions) c) Management, control and audit obligations TA, promotional activities, capacity building: (a) + (c) respected, but not (b)  no ceiling HIT Application Form

9 Austria: inside EU + programme Switzerland: outside EU Poland: outside programme Belarus: outside EU + programme Activities and ERDF expenditure outside (the Union part of) the programme area

10 ERDF outside (the Union part of) the programme area Location of the partner Austria financed from ERDF Switzerland (outside) Poland, Belarus (outside) financed from ERDF financed from Swiss fund financed from ERDF Location of activity Travel destination Inside (the Union part of) the programme area All costs other than travel and accommodation ERDFN/A ERDF (no 20% ceiling) ERDF (no 20% ceiling) Travel and accommodation ERDFN/A20% ERDF Outside (the Union part of) the programme area All costs other than travel and accommodation 20% ERDFN/A20% ERDF Travel and accommodation ERDF*N/A20% ERDF (30% - programmes covering outermost regions) * Costs of accommodation, meals and local transport, if not covered by daily allowances – 20% ceiling applies.

Investments 11

Types of activities to be supported from ERDF (Art. 3 ERDF Regulation): Productive investment Fixed investment in equipment Investment in infrastructure Networking, exchanges of experiences Studies, preparatory actions, capacity-building Types of ETC activities and allocation of their costs 12 Financing of activities – budget lines: Staff costs Office and administration Travel and accommodation External expertise and services Equipment Infrastructure and works For each cost of an activity, the type of cost determines which budget line the cost must be assigned to. Investment activities

Investments in HIT Work Package Investment  Cluster of activities  Costs: all budget lines  HIT AF: WP Investment Investment activity part of a regular Work Package  A single activity or a number of activities part of a WP  Costs: all budget lines or selected only (e.g. no Infrastructure and works if only investment in equipment eligible)  HIT AF: additional details on the investment in section C.8 WP Management (WP1) and WP Communication (WP2) use only 5 budget lines, no Infrastructure and works. HIT Application Form 13

Fact sheets on budget lines – eligibility of expenditure 14

Towards harmonisation of the eligibility rules ETC recognise the need to harmonise eligibility rules 2010 Agreement on 5 harmonised budget lines Development of fact sheets on budget lines Consultation with EC Input to the Delegated act on eligibility Promotion and testing within HIT NEXT step: Follow harmonised approaches when setting the Programme’s rules 15 PROGRAMMING PROCESS Fact sheets on budget lines

Milestones Structure consultations; EC positions paper: simplification Finance panels: start of work on harmonisation of budget lines; agreement on 5 budget lines 1st Working Group in Brussels (budget lines, eligibility, simplified cost options): start discussing content of the fact sheets from EC asking for support from INTERACT Finance network meeting (all strands): budget lines, eligibility, simplified cost options, application and monitoring processes (HIT) INTERACT meeting with EC: work on harmonisation of budget lines presented to the EC 2nd Working Group in Madrid (budget lines, eligibility, simplified cost options) Meeting with EC experts on simplified cost options Exchange meetings with EACEA on simplified cost options

Milestones Meeting with EC Auditors: feedback to the fact sheets EC annual meeting with ETC: HIT package presented at the conference INTERACT meeting with EC: HIT package presented to the EC Expert Group Meetings on the Delegated act: INTERACT observer Meeting with DG REGIO on simplified cost options Meeting with DG REGIO on the Delegated act 1st meeting with TN programmes + IVC to agree on HIT package 1st meeting with CBC programmes to agree on HIT CBC package 2nd meeting with TN programmes + IVC to agree on HIT package 3rd meeting with TN programmes + IVC to agree on HIT package Finance network meeting (all strands): consultation with ETC on the Delegated act

Milestones th meeting with TN programmes + IVC to agree on HIT package 2 nd meeting with CBC programmes to agree on CBC HIT package 3rd meeting with CBC programmes to agree on HIT CBC package HIT follow-up meetings with programmes Finance network (meetings, online exchange) Workshop on eligibility of expenditure Meeting of ETC Audit Authorities: Eligibility of expenditure ETC : ready, steady, go!: Eligibility of expenditure 2015 Workshop on eligibility of expenditure (ETC & EC) TODAY

Fact sheets budget lines  Staff costs  Office and administration  Travel and accommodation  External expertise and services  Equipment  Infrastructure and works Matrix of costs 19

Fact sheets – content Sections  Definition  General principles  Forms of reimbursement (Staff costs; Office and administration)  Budget line specific rules  Calculation of costs (Staff costs; Office and administration)  Audit trail  Programme-specific conditions  Minimum requirements for time recording (Staff costs) Link to the Matrix of costs – ”living database” 20

Staff costs I Eligible cost  Full-time and part-time work on the project  Salary payments and other costs linked to salary payments (employment taxes, social security) not recoverable by the employer. All costs fixed in the employment document/law Salaries related to responsibilities specified in the job description Reimbursement options:  Option I: Real costs (payslips required)  Simplified cost options, e.g.  Option II: Flat rate of up to 20% of direct costs other than the staff costs (Art. 19 ETC Regulation)  Option III: Standard scale of unit costs Fact sheet on Staff costs 21

Staff costs II – Flat rate Article 19 ETC Regulation 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 the operation  can apply on individual partner level  partners do not need to provide audit trail for staff costs (but for direct costs) Each partner can decide on the reimbursement option, unless applicable options set at the programme level. 22 Fact sheet on Staff costs

Staff costs III – Standard scale of unit costs Article 67 CPR Forms of reimbursement:  standard scale of unit costs – established based on fair, equitable and verifiable calculation method Example CategoryAnnual gross employment cost Hourly rate (annual gross employment cost / 1720) 1Below EUR ,63 2EUR – ,35 3EUR – ,34 4EUR – ,87 5Above EUR ,41 23 Fact sheet on Staff costs

Office and administration I Eligible cost  “Operating and administrative expenses of the partner organisation that support delivery of project activities.” (OPEX not CAPEX)  Exhaustive list of eligible elements defined in the Commission Delegated Regulation (list of examples in Matrix of costs) Reimbursement options:  Option I: Real costs  Option II: Flat rate of up to 15% of staff costs (Art. 68.1(b) CPR) 24 Fact sheet on Office and administration

Office and administration II – Flat rate Article 68.1(b) CPR Indirect costs may be calculated at a flat rate of up to 15% of eligible direct staff costs – no calculation method required from the programme  applicable at the partner level  partners do not need to provide audit trail for office and administration (but for direct staff costs) 25 Staff costs calculated at a flat rate can still form the basis for calculation of indirect costs at a flat rate of (up to) 15% of staff costs. Fact sheet on Office and administration

Travel and accommodation I Eligible cost  “Travel and accommodation costs of staff of partner organisations that relate to delivery of the project.”  Exhaustive list of eligible elements defined in the Commission Delegated Regulation (list of examples in Matrix of costs) Travel and accommodation of external experts under External expertise and services Maximum daily rates for hotel and subsistence should be respected, in line with national legislation or internal policy of the partner organisation Fact sheet on Travel and accommodation 26

Travel and accommodation II – EC scale of maximum rates Maximum eligible rates (in EUR) for hotel and daily subsistence allowance according to Council Regulation (EC, Euratom) No 337/2007 of 27 March CountryHotel ceilingDaily subsistence Austria13095 Belgium14092 Bulgaria16958 ……… Slovenia11070 Spain12587 United Kingdom Extract of data. Fact sheet on Travel and accommodation

External expertise and services Eligible cost  “External expertise and services provided by a public or private body or a natural person outside of the partner organisation.”  Open list of eligible elements defined in the Commission Delegated Regulation (list of examples in Matrix of costs) ….; other specific expertise and services needed for operations 28 Fact sheet on External expertise and services

Equipment I Eligible cost  “Equipment purchased, rented or leased by a partner, necessary to achieve objectives of the project. This includes costs of equipment already in possession by the partner and used to carry out project activities.”  Open list of eligible elements defined in the Commission Delegated Regulation (list of examples in Matrix of costs) ….; other specific equipment needed for operations Second-hand equipment is eligible (under conditions, Delegated act), unless decided otherwise by the programme. Depreciation is eligible (under conditions, Art 69 CPR) 29 Fact sheet on Equipment

Equipment II Full purchase cost of equipment is eligible, provided:  Equipment used solely for the project  The total economic and depreciable life-time falls within the period of support Otherwise: 30 Fact sheet on Equipment Pro-rata use Equipment partially used for the project (degree of use for the project). Equipment purchased before the project approval and used for the project purpose (period of use). Share has to be calculated according to a justified and equitable method. Depreciation Decrease in value of the equipment. Costs relate to the period of support for the project (Art. 69 CPR). Cost calculated in line with legislation or general accounting principles of the partner organisation.

Infrastructure and works Article 3.2 ERDF Regulation Under the ETC goal, the ERDF may also support the sharing of facilities and human resources, and all types of infrastructure across borders in all regions. Rules on eligibility of infrastructure expenditure:  Some general rules, e.g. purchase of land (Art 69 CPR)  No specific rules defined in the Commission Delegated Regulation A separate budget line Infrastructure and works. 31 Fact sheet on Infrastructure and works

Matrix of costs – ”living database” Non-exhaustive list of eligible costs – examples  Identification of examples for cost elements listed in the Delegated act, including ”other costs needed for operations” under External expertise and services and Equipment  Identification of costs for the financing of Infrastructure and construction works Non-exhaustive list of ineligible costs – examples  Article 69 CPR (Interest on debt;, Purchase of land not built on or land built on in the amount exceeding 10% of the total eligible expenditure of the project; Recoverable VAT)  Delegated act on eligibility of expenditure (Fines, financial penalties and expenditure on legal disputes and litigation; Costs of gifts, except those not exceeding EUR 50 per gift where related to promotion, communication, publicity or information)  Other costs 32 Matrix of costs

Net revenue 33

Art 61(2) – The eligible expenditure of the operation to be co-financed from the ESI Funds shall be reduced in advance taking into account the potential of the operation to generate net revenue over a specific reference period that covers both implementation of the operation and the period after its completion. Art 65(8) - …The eligible expenditure of the operation to be co-financed from the ESI Funds shall be reduced by the net revenue not taken into account at the time of approval of the operation directly generated during its implementation, not later than at the final payment claim submitted by the beneficiary. Net revenue - CPR 34

35 Net revenue foreseen at the time of the project approval Net revenue not taken into account at the time of the project approval Eligible expenditure reduced in advance Calculated over a specific reference period: implementation and period after project completion (sector specific, or 3 years after completion, or submission of programme closure documents) Eligible expenditure reduced not later than at the final claim Net revenue generated only during project implementation Net revenue generated by projects up to EUR 1 million total eligible cost (unless foreseen at the application stage) HIT: AF: discounted net revenue determined and deducted from the eligible budget PR: amount reported, not later than in the last PR HIT: AF: net revenue = 0 PR: net revenue deducted on a regular basis, not later than in the last PR

In-kind contribution 36

“Contributions in-kind in the form of provisions of works, goods, services, land and real estate for which no cash payment supported by invoices, or documents of equivalent probative value, has been made, may be eligible on condition that the eligibility rules of the ESI Funds and the programmes so provide… …and the following criteria are fulfilled:”  Public support (EU contribution + public national funding) </= total eligible expenditure-in kind contributions  Market price  Independently verifiable In-kind contribution – CPR (Art 69) 37

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