1. Simplified costs
Interreg V-A Romania-Bulgaria Programme

2. Start reading about it understanding it all team backing it up Reading
Legal framework
Regulation 1303/ Article 67 – Forms of grants and repayable assistance
Regulation 1303/ Article 68 - Flat rate financing for indirect costs and staff costs concerning grants and repayable assistance
Regulation 1299/2014 – Article 19 – Staff costs – huge fans of this article
EC Guidance on Simplified Cost Options (SCOs)
Understanding
EGESIF questions, talking to desk officers (really, really we don’t control in any manner these expenditures?)
All team
Difficult to get everyone on board (since it represents a change, a novelty, not clear rules, no examples, no assurance on what the auditors will say aso). Lump sums and standard costs were not opted for because our financial guys seen them as even more riskier.

3. What did we choose? Flat rates Staff costs (art. 19/ Regulation 1299)
Indirect costs (art. 68, para. 1, lit. a/ Regulation 1303)
Options
Standard scales of unit cost
Lump sums (below )
Flat rate financing
Staff costs (ar. 19)
Staff costs of an operation may be calculated at a flat rate of up to 20% of the direct costs other than the staff costs of that operation
Indirect costs (art. 68)
Up to 25% of eligible direct costs (fair, equitable and verifiable calculation method)
Up to 15% of eligible direct staff costs (no method) - why we choosed a even if b was easier
Flat rate applied to eligible direct costs based on existing methods and corresponding rates

4. Use of flat rates Mandatory for 3 PAs Transport (7b,c)
Environment (6c,d)
Risks (5b)
Optional for 2 PAs
Employment (8i)
Institutional capacity (11c)
Options
Due to the type of projects (projects more focused on investments, equipments, infra for the first 3 PAs, mainly soft, human component more important for the last two).
3 different templates in the application form

5. Calculation of flat rates
Staff costs:
5% for hard projects
15% for soft projects
Indirect costs:
1% for hard projects
5% for soft projects
Same calculation basis for both: direct costs
pre-defined at Programme level
Options
What is hard
What is soft
We looked at previous experience when setting the base.
Calculation basis, direct costs, were named in th Guide, clearly and exhaustively.

6. Example (hard project)
Categories of expenditure
Amount
(Euro)
Travel and accommodation
2,000
External expertise and services*
28,000
Equipment
100,000
Infrastructure and works
670,000
TOTAL (calculation basis)
800,000
Project preparation (max. 10% of calculation basis)
80,000
Staff costs – flat rate of 5%* of calculation basis
40,000
Office and administrative costs – flat rate of 1%* of calculation basis
8,000
TOTAL project eligible budget
928,000
Why we excluded

7. Worries Rules still not 100% clear
Clarifications (could have major impact)
Financial corrections on direct costs
Auditors might see things in a different light
Example:
-using combination of staff costs and indirect costs
-”Where an operation or a project forming a part of an operation is implemented exclusively through the public procurement of works, good or services, only point (a) shall apply. Where the public procurement within an operation or project forming part of an operation is limited to certain categories of costs, all the options referred to in para 1 may apply ”
-letters of clarifications for one Programme only, the rest of the Programmes not always being aware of those clarifications, maybe applying issues in a different manner
-based on direct costs, so if one of those gets a 25% correction, the rest of 20% of the expenditures will automatically get a flat correction
-systemic errors (not really that bad, just the difference between the correct calculation and the one used).
audits: we did check with AA, said it’s ok, but now at EC level it seems not to be clear how SC will be audited (recommendation from High Level Group).

8. On the bright side focus on results simplify the life of beneficiaries
simplify our life
-advantages (skip verifications)
-reduced administrative burdern, so more time to focus on results (I also think at it as people going home earlier to their kids)
-our job is easier (FLC, MA, even AA, we’re actually doing them a favor :D).

9. We want to do better. So we’re trying.
Should you do it?
We want to do better. So we’re trying.

10. Interreg V-A Romania-Bulgaria Programme robg@mdrap.ro
Questions? 
Ioana Glăvan
Interreg V-A Romania-Bulgaria Programme