1. Kolarctic ENPI CBC Programme 2007-2013 Project implementation training session under the 1st Call for Proposals FINANCIAL ISSUES Joint Managing Authority 12.05.2011, Levi

2. Administrative overhead (max 7%) Amount has been fixed in Grant Contract No cost will be included to this budget line afterwards Fixed percentage is just added to direct costs of the reporting period Auditor may ask to prove, that administrative costs really exist in the organization JMA will not ask any prove of costs in interim and final reports. If project is audited by Commission or JMA´s auditor, they may ask the justification.

3. Contingency reserve (max 5%) Can be used if some unexpected cost appears (new charge for tickets, damage of equipment, sick leave and substitute needed etc.) If type of cost is not at all included in budget or appropriate budget line exceeds, LP can ask a permission from JMA to use the reserve JMA gives prior written permission to use the reserve

4. Taxes in Russia The Russian applicants have been forced to pay tax in Russia when they have received funding from JMA to their bank accounts. The tax free –decision from Russian federation has not yet been done and therefore the organizations have to pay the tax. In reporting projects calculate the tax to direct costs, appropriate share to each budget line. The tax is in this case eligible costs. If costs of some budget line exceeds later because of the tax, JMA can give a permission to use contingency reserve to cover the costs. If the tax free decision comes later during the implementation period of the project and the project has right to get paid tax back, also the paid grant will be recovered (in practice it will be just diminished from future grants).

5. Financial report and payment request Financial interim/final report includes (at least) –Financial report template (expenditure report, excel-file template) –Narrative interim/final report (EMOS) –Verification report (LP and partners) –General Legde (huvudbok, pääkirja, гроссбух м) –Gen. ledge specification if needed –Salary specification if recorded in bookkeeping as one total amount (excel-file template) –Procurement documents –Copy of the published material (brochures, publications etc.

6. Financial report and payment request Lead Partner collects information from other partners and makes the summary All costs are presented in Euros Lead Partner is in responsible for the accuracy of the report JMA asks needed further clarifications from Lead Partner

7. Financial report and payment request Payment request is made in EMOS Financial report (expenditure report), verification report and other needed annexes can be loaded to payment request in EMOS Signed request and original annexes must be submitted to JMA

8. Verification of expenditures Expenditure of each partner has to be verified Each partner can have an own auditor or partners from same country can have a common auditor Auditor has to be chosen according to procurement rules If the organization has already auditor who fulfils the requirements, he/she can be used Requirements are stated in Annex VII Expenditure verification –Member of the IFAC or national auditing body or follows the standards and ethics of IFAC –With signature auditor confirms that he/she is qualified.

9. Verification of expenditures Auditor must verify original documents and financial report template If auditor finds errors, the financial report should not be adjusted At least 65% of the expenditures must be verified, in case of lot of errors > 80% Auditor verifies incurrence (activity real happened), accuracy (amounts are correct) and eligibility

10. Verification of expenditures Verification is not a full auditing, the meaning is to –Checks that the financial report meets the terms and conditions of Grant Contract and accounting records –Checks that accounting rules are followed (General condition, Art. 16) –Checks that correct exchange rate is used in financial report –Checks that budget is followed and no amendment has been done

11. Verification of expenditures Partners send the financial report material to Lead Partner, including the Verification report. Lead partner makes the summary of expenditures in financial report template. Lead Partner´s auditor makes the summary of all reports, including the verification of Lead Partner. All reports are submitted to JMA

12. Exchange rate General conditions, Article15.9 –Any conversion into euro of the real costs borne in other currencies shall be done at the rate made up by the average of the rates published in InforEuro for the months covered by the relevant report. –All payments from JMA will be made in Euros. –http://ec.europa.eu/budget/inforeurohttp://ec.europa.eu/budget/inforeuro –Currency exchange losses are not eligible.

13. Financial report All templates are available in programmes web pages “Material for ongoing projects” Financial report is an excel file to report incurred costs in country and project level Indicate project´s budget to template Each partner can use the same template on reporting to Lead Partner, it helps LP to make the total report. Only one total report is submitted to JMA. Report the costs in same level as they are in approved budget. Don´t add sub budget lines.

14. Salaries If part-time employees, the time sheet has to be filled in and included to payment request Salary information can be stated in template “Employee list” or project can submit separate certificates. Work contracts are submitted with first payment request.

15. Funding from other resources JMA pays EU-funding, Finnish state co- financing and Russian state co-financing Lead Partner informs JMA of co-financings paid from other financing resources –Swedish co-financing, all financing resources –Private financing –Other national public co-financing –Own contribution (own work)

16. Own work Own work can be followed up with same time sheet as other work. Tick off the place under the lines showing that work is calculated as own financing. Own work is eligible cost and same time part of the financing. Partners has to follow up carefully that all committed own work is done and reported.