Bent Egebart - Receipts – Reduced contribution from the Commission? (3-parties in FP6 projects ?) Financial Guidelines for Indirect Actions of the Sixth Framework Programmes ( or ) Danish Ideal-ist partner (partner searches) EU consultant since I left the Commission in 1992 Evaluator and reviewer for the Commission Participated in several major in-house project Reference: by Bent Egebart

Bent Egebart - Financial Contribution Scheme

Bent Egebart - indirect action ? – Usually, the Community financial contribution to indirect actions (research and development projects) under the 6FP will be by means of grants (public procurement is used only in the case of purchase of goods or services by the Commission for its use and this is limited to certain specific support action)

Bent Egebart - Forms of the Community financial contribution per type of instruments in the FP6

Bent Egebart - ELIGIBLE COSTS Unlike former Framework Programmes, no eligible cost categories are established. The usual accounting principles of the participants are the basis for the determination of their cost. Therefore, the definition of the eligible costs is based: on the exclusion of any costs identified in the list of non-eligible costs ; and on cumulative conditions of eligibility of the remaining costs. The notion of eligible costs is established: in the second paragraph of Article 14 of the RP ; in Article 19 of Annex II (General conditions) to the FP6 model contract adopted by the Commission the 17/03/2003

Bent Egebart - Non-eligible costs The following non- eligible costs may not be charged to the project : a) any identifiable indirect taxes, including VAT or duties; b) interest owed; c) provisions for possible future losses or charges; d) exchange losses; e) costs declared, incurred or reimbursed in respect of another Community project; f) return on capital; g) debt and debt service charges; h) excessive or reckless expenditure; i) any cost which does not meet the conditions established in Article II.19.1.(*) (*)[definition of eligible costs]” (Article II.19. of the Annex II – general conditions to the FP6 model contract)

Bent Egebart - Receipts Three kinds of receipts : Financial transfers or their equivalent to the contractor from third parties; Contributions in kind from third parties; Income generated by the project.

Bent Egebart - cont., In the first two cases (financial transfers or contributions in kind), these endowments are considered as receipts of the project if the third party has provided them specifically to be used in the project. However, if the use of these contributions is at the discretion of the contractor they may be considered as eligible costs to the project but are not be considered to be receipts. Where contributions from third parties are used by the contractor for the project, the latter is required to inform the third party of this use, in accordance with the national legislation or practice in force. In the case of income generated by the project itself, any income generated by the project itself, including the sale of assets bought for the project (limited to the initial cost of purchase) are considered as income to the project (eg. admission fee to a conference carried out by the consortium; sale of the proceedings of such a conference; sale of equipment bought for the project etc.) The table reproduced below and explained in detail in the Financial Guidelines indicates the maximum reimbursement rates per instrument, per activity and per cost model for all indirect actions.

Bent Egebart - Maximum reimbursement rates

Bent Egebart - The particular case of resources made available by third parties on the basis of a prior agreement Unlike the Fifth Framework Programme, resources made available by third parties on the basis of a prior agreement are eligible as costs of the project and potentially to reimbursement by means of the Community financial contribution. The purpose of this provision is not to reduce the number of contractors 71, but to take into consideration the particularities of some entities such as Joint Research Units 72, and other similar organisations. [To be checked by DG RTD – Unit A3]

Bent Egebart - cont., Two different situations must be taken into consideration: 1. contributions in kind or financial contributions provided to the participant by a third party on the basis of a prior agreement elaborated specifically for the project itslef. In this case, those resources are considered as eligible costs and also receipts of the indirect action, and must be declared by the participants as such. 2. contributions in kind or financial contributions provided to the participant by a third party on the basis of a prior agreement existing with or without the involvement of the participant in the project supported by the Community (no direct link with the project). In this case those resources are considered as eligible costs and not automatically as receipts of the indirect action, and must be declared by the participants as such. [To be checked by DG RTD – Unit A3]

Bent Egebart - In both cases: ● the prior agreement stipulating that resources are made available by third parties to the participant must be submitted to the Commission during the negotiation phase and accepted by the Commission ; ● those third parties and their resources made available to the participant on the basis of the aforementioned agreement must be identified in the technical annex (Annex I) of the contract: - for those covered by a prior agreement elaborated specifically for the project itself, it will be clearly stated in Annex I that those resources are eligible costs and receipts and must be declared as such in the Financial Statement per Activity (Form C) for those covered by a prior agreement not elaborated specifically for the project itself (agreement existing with or without the involvement of the participant in the project), it will be clearly stated in Annex I that those resources are eligible costs (and not receipts) and must be declared as such in the Financial Statement per Activity (Form C) 76. ● the conditions of eligibility of costs applies for the third parties. As a consequence, even though they are incurred by the third party, these eligible costs will be declared by the participant 77 and certified by an N.B. In order to determine the eligibility, nature and value of any costs of third party resources made available to the contractor, the relevant cost reporting model must be used.

Bent Egebart - Recommandations ● all involved should be partners ● if not, clear transparent rules must be set-up from the start - otherwise it is likely that one partner has to cover 50% of the receipts with his own money