MELIA KICK-OFF MEETING 4th-7th September MELIA KICK-OFF MEETING September 4th-7th 2006 Ana Villacampa-CSIC

MELIA KICK-OFF MEETING 4th-7th September EC CONTRACT Coordination Action- FP ( INCO) The contract has started on 1st September Contract signature still pending, not yet contract into force. The duration of the project shall be 48 months: from 1st September 2006 to 31th August All the entities participating in the project have not acceded to the contract yet.

MELIA KICK-OFF MEETING 4th-7th September Parts of MELIA contract (MELIA-CD) Core contract common to all projects (not yet the adapted version of MELIA) Technical Annex (or Annex I) Annex II- General conditions Form A (to be received from the Commission via CSIC, and then signed by all partners) It's obligatory to comply with everything written there! Coordination Action- FP ( INCO)

MELIA KICK-OFF MEETING 4th-7th September EC FINANCIAL CONTRIBUTION (1) The Community financial contribution shall be € The pre-financing shall be of € This amount corresponds to the 80 % of the first 18 months of the project (€ ) (see A3.2 in cpfs!): 12 months pertaining to the first reporting period + 6 months of the subsequent period in order to assure greater financial certainty to the consortium.

MELIA KICK-OFF MEETING 4th-7th September EC FINANCIAL CONTRIBUTION (2) The coordinator receives the pre-financing on behalf of the consortium: It is not paid to each contractor by the U.E The consortium determines the allocation of each tranche between the contractors in accordance with the EC contract and the relevant provisions in their Consortium Agreement. The first pre-financing is paid to the coordinator within 45 calendar days from a date stated by contract (this date does not necessarily coincides with the starting date of the project ). The CSIC will transfer the relevant amounts to the partners. Subsequent payments shall be paid within 45 days following EC approval of the reports relating to each periodic report.

MELIA KICK-OFF MEETING 4th-7th September EC FINANCIAL CONTRIBUTION (3) As the consortium shall submit AT LEAST one audit certificate (month 48). All pre-financing remains the property of the Community until it is accepted as a final payment; pre-financing is not a definitive payment (final payment); pre-financing is a potential debt of the contractors towards the European Commission.

MELIA KICK-OFF MEETING 4th-7th September EC FINANCIAL CONTRIBUTION (4) When the amount justified and accepted for each reporting period is LESS than the pre-financing paid to the consortium: The EC shall DEDUCT the difference from the subsequent pre-financing When the amount justified and accepted for each reporting period is MORE than the pre-financing paid to the consortium: The EC shall ADD the difference as a complementary payment with the subsequent pre-financing (up to 80% of the total EC contribution)

MELIA KICK-OFF MEETING 4th-7th September EC FINANCIAL CONTRIBUTION (5) Example 1: The consortium has received the first pre-financing of € € and the EC has accepted its periodic reports and financial statements in the first reporting period, in which an EC financial contribution of € ,0 is justified. As audit certificates are not provided, the consortium is considered to have received: A pre-financing of € : of which € ,0 are not declared as a final payment. For the next period, the pre-financing can be increased if the total amount of the pre-financing stays within the limits of 80% of the Community financial contribution established in the contract. Thus, € (80% of second 18 months) The EC shall deduct € (not justified in the first reporting period) from the second payment: € resulting in a new pre- financing of €

MELIA KICK-OFF MEETING 4th-7th September EC FINANCIAL CONTRIBUTION (5) Example 2: The consortium has received the first pre- financing of € and the EC has accepted its periodic reports and financial statements in the first reporting period, in which an EC financial contribution of € is justified. As audit certificates are not provided, the consortium is considered to have received: A pre-financing of € : of which € are not declared as a final payment. For the next period, the pre-financing cannot be increased because the total amount of the used pre- financing is less than 70% of the pre-financing as stated in the contract (70% of is €700000).

MELIA KICK-OFF MEETING 4th-7th September EC FINANCIAL CONTRIBUTION (6) Subsequent Payments: Where no comments, changes or substantial corrections to any of the reports are required, the EC shall make payments within 90 days of the receipt of the relevant reports. Where substantial comments, changes, further information or adjustments are requested, the remainder of the 90 days payment begins only after submission by the contractor of the required information.

MELIA KICK-OFF MEETING 4th-7th September REPORTING PERIODS The project is divided into four reporting periods of the following duration: P1: from month 1 to month 12 P2: from month 13 to month 24 P3: from month 25 to month 36 P4:from month 37 to month 48

MELIA KICK-OFF MEETING 4th-7th September REPORTING PERIODS (2) The coordinator, on behalf of the consortium, must submit to the Commission, by electronic means and by mail, within 45 calendar days following the end of each reporting period the following periodic reports: activity report management report distribution of the EC financial contribution between contractors supplementary reports

MELIA KICK-OFF MEETING 4th-7th September PERIODIC REPORTS (3) The Activity Report shall contain: an overview of the activities carried out by the consortium during that period; a description of progress toward the objectives of the project; a description of progress towards the milestones and deliverables foreseen, and the identification of any problems encountered and corrective action taken.

MELIA KICK-OFF MEETING 4th-7th September Reporting deliverables

MELIA KICK-OFF MEETING 4th-7th September Reporting person-month

MELIA KICK-OFF MEETING 4th-7th September PERIODIC REPORTS (4) The Management Report shall contain: A justification of the resources deployed by each contractor, linking them to activities implemented and justifying their necessity; –Contractors using the additional cost model (AC) must identify all the resources employed on the project and provide a global estimate of all their costs (not just the additional eligible costs which are reported in the financial statement, but also their non additional or recurring costs). Form C (Financial statement) A summary periodic financial report consolidating the claimed costs of all the contractors in an aggregate form, based on the information provided in Form C.

MELIA KICK-OFF MEETING 4th-7th September Reporting finantial issues

MELIA KICK-OFF MEETING 4th-7th September At the end of each reporting period

MELIA KICK-OFF MEETING 4th-7th September

MELIA KICK-OFF MEETING 4th-7th September

MELIA KICK-OFF MEETING 4th-7th September

MELIA KICK-OFF MEETING 4th-7th September FINAL REPORTS Within 45 calendar days after the end of the project: A Final activity report covering all the work, objectives, results and conclusions, and the final plan for using and disseminating the knowledge, including a summary of all these aspects; A Final management report including a summary financial report consolidating the claimed costs of all the contractors in an aggregate form covering the entire duration of the project, based on the information provided in Form C plus audit certificate by each contractor Any supplementary reports Within 60 calendar days after receipt of the outstanding balance: A report on the distribution of the EC financial contribution between contractors.

MELIA KICK-OFF MEETING 4th-7th September ELIGIBLE / NON ELIGIBLE COSTS No eligible cost categories are established. The usual accounting principles of the participants are the cases for determining of their costs. Non eligible costs: Any identifiable indirect taxes, including VAT or duties Interest owed Provisions for possible future losses or charges Exchange losses Cost declared, incurred or reimbursed in respect of another EC project Cost related to return on capital Debt and debt service charges Excessive or reckless expenditure Any cost which does not meet the definition of eligible costs

MELIA KICK-OFF MEETING 4th-7th September ELIGIBLE COSTS To be eligible costs must be: Actual, economic and necessary for the implementation of the project, and determined in accordance with the usual accounting principles of the contractor, and incurred during the duration of the project except for the costs incurred in drawing up the final reports (up to 45 days after the end of the project or the date of termination whichever is earlier), and recorded in the accounts of the contractors that incurred them;

MELIA KICK-OFF MEETING 4th-7th September ELIGIBLE COSTS (2) PERSONNEL Permanent or temporary employees Cost for remuneration of salary should be taken from the payroll account and should reflect the total gross remuneration plus the employer’s portion of social charges (e.g. holiday pay, pension contributions, health insurance and social security payments). Remuneration costs must be calculated individually for each researcher. Working time must be recorded throughout the duration of the project by any reasonable but reliable means (including time sheets). A simple estimation of hours worked is not sufficient. Productive hours must be calculated according to the contractor’s normal practices (taking into account particularly national holidays, absenteeism, etc.). The person in charge of the work should certify the records. At the time of submission of the Financial Statement per Activity (Form C), only the actual eligible costs can be claimed.

MELIA KICK-OFF MEETING 4th-7th September ELIGIBLE COSTS (3) DURABLE EQUIPMENT Equipment used on the project should be accounted for in accordance with the normal depreciation rules of the contracting organisation. Depreciation is charged in each relevant periodic report. The full value of the depreciated costs of equipment over the life of the project cannot be charged as a single amount in one period. Depreciation can be calculated on equipment, which has been purchased before the commencement date of the contract, and which will be used in the project. Only the portion of the equipment used on the project may be charged. The amount of use (percentage used and time) must be auditable. Depreciated costs of equipment can never exceed the purchase price of the equipment. The cost of the equipment must exclude VAT.

MELIA KICK-OFF MEETING 4th-7th September ELIGIBLE COSTS (6) TRAVEL AND SUBSISTENCE As a general rule, actual travel and related subsistence costs may be considered as direct eligible costs, providing they comply with the contractor’s usual practises.  However, if such costs are incurred by the contractor’s person working on the project and are reimbursed on the basis of a lump sum/ or per diem payment, it is the lump sum/or per diem and not the actual costs that are considered to be the eligible cost.  Where it is the usual practice of the contractor to consider travel and subsistence costs (or some of them) as indirect costs, those costs can not be charged as direct costs of the project, but as indirect costs.

MELIA KICK-OFF MEETING 4th-7th September ELIGIBLE COSTS (7) SUB-CONTRACTING Subcontracts may relate only to a limited part of the project or to the production of a service; thus, core elements of the project can not be subcontracted. Any subcontract, the costs of which will be claimed under the project, must be offered to the best bid in compliance with the national legislation of the contractor concerned. Therefore, if the tasks to be subcontracted: can not be realised by the contractors ; and concern the production of a service necessary for the good implementation of the project; and do not constitute a core element of the project ; they can be subcontracted. The modalities for selecting subcontractors must be applied.

MELIA KICK-OFF MEETING 4th-7th September ELIGIBLE COSTS (8) CONSUMABLES Any consumables necessary for the implementation of the project may be considered as direct eligible costs. Consumables usually relate to the purchase, fabrication, repair or use of any materials, goods or equipment and software which: are not placed in the inventory of durable equipment of the contractor; are not treated as capital expenditure in accordance with the accounting conventions and policies of the contractor. have a short life expectancy, certainly not greater than the duration of the work under the contract; Where it is the usual practice of the contractor to consider consumable costs (or some of them) as indirect costs, those costs can not be charged as direct eligible costs, but as indirect eligible costs.

MELIA KICK-OFF MEETING 4th-7th September USEFUL DOCUMENTS EC CONTRACT: CORE CONTRACT AND ANNEX II. GENERAL CONDITIONS GUIDE TO FINANCIAL ISSUES RELATING TO INDIRECT ACTIONS OF THE SIXTH FRAMEWORK PROGRAMMES VERSION: February 2005