1 SOCRATES PROGRAMME TN Projects 2004 & 2005 Contractual and Financial Management Administrative and Financial Handbook Maryline Fiaschi, 13/02/2006

2 Agenda Essentials Financing of projects Handbook Structure Approved Budget Eligible Expenditure Financial Management Partnerships Partner Agreements Reports & closure

3 Essentials Many projects fail because the Contractor did not understand the basic rules Where are the rules contained – Grant Agreement and Annexes (including the Handbook), EU’s Financial Regulations

4 Financing of 2005 Contracts No more lump sums for staff costs – details of these costs have to be now given at the final report EU grant is based on a fixed percentage of the Approved budget of the project (see points A.4 and A.5 of the Grant Agreement). The above amount represents the maximum grant (see point A.3 of the Grant Agreement). You can never get more than the maximum. Greater flexibility in the budget transfer rules The more detailed financial rules are contained in the Handbook

5 Handbook Structure Purpose of the Handbook Annex to the Agreement and enforceable Aid for beneficiaries and a management tool Definitions (Beneficiary, Partner Legal Representative, Approved budget) Chapters Approved budget Modification of the Agreement Eligible Expenditure Financial Management Reports Supporting Documents & Audit

6 Approved budget How has it been assessed ? * External Experts * Project aims and rules on eligibility 1.An amount approved for Staff costs 2.An amount approved for Direct costs 3.General costs The co-financing percentage of the Community is applied to the total of points 1-3 above to arrive at the maximum grant that is awarded by the Commission Concept of Approved Budget (Annex II of the Agreement) – reference point for assessment of the final report

7 Contractual modifications Partnership Workplan & Results Budget Bank information Extension of the Eligibility period Final report deadline No possible extension for progress report deadline! REQUEST must be introduced through the « Contractual modification form » duly signed by the legal representative At least 60 days before the end of the eligibility period

8 Eligible expenditure General Principles Costs must be reasonable and in accord with the principles of sound financial management. Must be incurred by the partnership and necessary. No member organisation of the partnership may derive a profit from the grant All expenditure for Staff and Direct costs must be justified by invoices or accounting documents of an equivalent value

9 Eligibility of Expenditure Ineligible Costs Expenditure incurred before or after the end of the eligibility period (A.6) Excessive or reckless expenditure VAT unless the Beneficiary cannot recover it Expenses for travel to and from countries not eligible to participate in Socrates Eligibility Relate directly to approved activities Are in accordance with the rules Relate to activities involving eligible countries

10 Staff Costs – key points The staff costs related to all persons involved in the project by insitution can be charged into the project, according to the time effectively spent These costs shall be calculated on the hourly, daily, monthly gross cost multipled by the number of hours, days or months worked. The beneficiary and partners must keep full and accurate records Personnel costs should not exceed the norm for the labour market concerned Volunteer costs not eligible – real costs only

11 Travel & subsistence costs Calculation of subsistence costs: 1 per diem / night + ½ per diem for travel Subsistence costs eligible for external experts coming from outside Socrates countries (but not Travel costs) Travel & subsistence costs for students participating to the plenary meeting are eligible Errors to avoid : Travel outside of Socrates countries Declaration of collective costs for subsistence (restaurant) Subsistence costs in excess of the limits

12 Equipment and materials Hardware and equipments, when > 1000 EUR are are submitted to depreciation (33.33 % per annum) Adjusted to the percentage of use in the project Pieces of equipment purchased before the project period are not eligible Errors to avoid: - Date of purchase missing - Wrong depreciation rate applied or not adjusted to real use

13 Sub-contracting costs Subcontracting costs: “Any amount paid to an outside body which is not part of a member organisation of the partnership and which carries out specific & limited work for the project.” Only allowed if the staff of the partners do not have the skills required Cannot subcontract the basic activities (entire management & general administration)

14 Sub-contracting costs Three quotes if more than € in total (including linked costs). Must be able to supply copies of these if required Consultants fees should not normally exceed 400 € per day Cannot exceed 30% of the total eligible costs of the project Costs of an independent consultant working full-time or frequently for the project should be reported under staff costs

15 Other and General Costs Other Costs – Includes the costs of producing, translating and publishing documents when performed by the partners General Costs – Normal overhead costs of the organisation. They do not have to be detailed in the final report and no proof required. Limited to 7% of the total eligible costs

16 Financial Management Bank Account (in €, Name of beneficiary) – cash withdrawals should be avoided Accounting System - Analytical – identifying the sources of funding and the project expenditure. Proof of payment will be required for Direct and Staff costs - Keep track of time sheets of persons who have worked on the project (identifying the person and time spent and activity) Partnership - Partners must be in the application or approved later by the Executive Agency - Ensure active cooperation (management structure ) - Partnership agreements Remark: Can we pay our partners or sub-contractors after the end of the eligibility period?

17 Partnership Agreements Duties and obligations of the partners Delivery schedule of results Management Structures for the project and powers Budget and Grant share Quality and evaluation system Payment conditions – payment based on results or some other system? Reporting & accounting – regular reporting is a good monitoring tool IPR Termination and notice provisions – allow for exits Choice of law and Incorporation of EU agreement

18 Transnational Partnerships What makes a successful project Identify the risks and challenges at the beginning of the project and at key points Work with known partners Spend time developing trust within the partnership Coordinator needs good communication skills Ensure institutional support Clear and transparent financial and management practices – proper allocation of tasks

19 Reports  Qualitative and quantitative assessment (products/results  expenditure) Progress Report for 2 & 3 years projects Final Report (end of eligibility period months) See Contractual Timetable (annex of the contract)

20 Progress report Progress report cannot be submitted before the deadline unless 70% of the first pre-financing has been used and all activities foreseen for the period have been achieved The deadline for the submission of the Progress report cannot be extended !!!! If < 70% of pre-financing was declared at Progress report stage: As soon as 70% is spent submit a separate payment request, using “ Declaration of beneficiary” and “Section 2 Declaration of Expenditure“ of the Progress Report Form. Do not send the entire Progress Report again.

21 Evaluation criteria Purpose of the progress report To provide a clear « state of affairs » of the project, at a certain moment To allow visibility on potential problems/difficulties To seize the opportunity to update the workplan, budget and partnership To declare real expenditure incurred in the first part of the project life

22 Purpose of the final report To allow an overall evaluation of the project. All work must be completed The final products and outcomes are compared with what was planned in the application taking into account the progress report and the amendments To declare the real expenditure incurred during the life of the project

23 And then? Final report analysis Content Finances (evidences of costs may be required) A settlement letter sent to beneficiary Comments and recommendations Final (positive or negative) balance Explanatory note related to the final calculation of the Grant Possibility to appeal against the Executive Agency’s decision during 60 days after the date of the closure letter

24 Thank you! For any information, please contact : Maryline Fiaschi Executive Agency, Rue Colonel Bourg , B – 1140 Bruxelles http;//europa.eu.int/comm/dgs/education_culture/documents/socrates