VITAL KICK-OFF MEETING Financial aspects 7 th – 8 th April 2008 Veterinary Research Institute Brno, Czech Republic

FP7 and FP6 differences  Cost models abolished – new costing structure for FP7  All participants contribute to a Guarantee fund  FP7 simplification  FP7 cost options  Higher rates of reimbursement  Changes to pre-financing, reporting and audits

No cost models in FP7  Usual method is reimbursement of eligible costs  Three choices of method  Proportion of all eligible direct and indirect costs – available to all – no fixed overhead limit  Proportion of all eligible direct costs, using a simplified indirect cost rate – available if unable to calculate project level indirect costs – calculation at level of legal entity, must be certified independently and accepted by Commission  Proportion of all eligible direct costs, with a flat rate for indirect costs – available to all (at 20%) although flat rate higher for universities, public bodies, SMEs (60%)

Reimbursement of Eligible Costs  Costs are eligible if:  Actual  Incurred during the project  Determined according to normal accounting and management principles  Used solely for project objectives  Consistent with principles of economy, efficiency and effectiveness  Recorded in the accounts  Exclusive of non-eligible costs  Average personnel costs may be used if usual practice and if certified by independent auditors and approved by the Commission

Reporting  In Vital three reports due at month 12, 24 and 36  At each reporting period need to produce  Activity report - scientific  Management report including delivery by workpackage/ person months and details of financial expenditure by expense category  Financial report (Form C)

Audits  ‘Certificates on the Financial Statements’ only required for Community contributions over threshold €375,000  Maximum one certificate for projects of two years or less

Certificates of methodology Certificate of Financial Statements Certificate on the Methodology ScopeOverheadAverage personnel costs CompulsoryNoYes Request by partner to EC YesNo Produced by auditor Yes

FP7 Payments  Based on Reporting periods  Pre-Financing  160% of periodic average  Receive within 45 days of contract signature  BUT 5% of total budget retained by Commission in guarantee fund and in accordance with consortium agreement 20% retained by CSL until reports submitted  Interim payments at months 12 and 24 up to maximum of 90% of project budget  Final payment on completion and acceptance of reports by Commission

Audit requirements  Need to keep timesheets authorised by project manager  Keep all invoices / documentation of expenditure and claim according to your normal accounting procedures  Be prepared to keep good financial records and be able to justify each claim  Can be audited up to 5 years after the end of the project