1. The 7th Framework Programme The Financial Issues Ray Lockyer Finance Business Systems 23 rd November 2007

2. What’ New in FP7 Duration increased from 5 years to 7 years Annual Budget has increased significantly New structure: Cooperation; Ideas (ERC); People; Capacities; Eurotom and JRC Basic Research - €1b per year (ERC) Funding of Research Infrastructure Simpler Procedures

3. The Structure Ideas – Frontier Research People – Marie Curie Actions Capacities – Research Capacity JRC non-nuclear research Cooperation – Collaborative Research Euratom direct actions – JRC nuclear research Eurotom indirect actions – nuclear fusion and fission research

4. FP7 Indicative Breakdown (€millions)

5. Cooperation Programme – Thematic Areas (€ million )

6. Terminology Changes FP6 Term FP7 Term Cost ModelFunding Regime InstrumentFunding Scheme Specific Support ActionSupport Action IPs and STREPsCollaborative Projects Financial GuidelinesGuide to FP7 Finance Issues ContractGrant Agreement CPFGPF ContractorBeneficiary Audit CertificateCertificate on Financial Statement

7. Major Changes “Financial Collective Responsibility” replaced by “Mechanism to Cover Financial Loss” Introduction of the 1% Guarantee Mechanism The previous 3 Cost Reporting Mechanisms removed R & D activities receive 75% EU funding Introduction of the Special Transitonary Derogated Rate of 60% for overheads Permanent staff can now be funded Consortium Management 100% funding - 7% limit removed Dissemination activities could now be funded at 100% Over head rate on CSAs limited to 7% Demonstration activities rate raised to 50% Partner’s total claims less than €375,000 – no Certificate on Financial Statement required Certificate of Methodology = no CFS until the end of the project Only 1 activity type per work package

8. Funding Regimes UWE uses the Funding Regime involving the ‘reimbursement of eligible costs’. Eligible Costs include: Actual Costs Costs Incurred during the project Determined using usual accounting practices Used solely to achieve project objectives Consistent with economy, efficiency and effectiveness Recorded in the accounts Exclusive of non-eligible costs

9. Eligible Costs (cont) No eligible cost categories are defined but will include:- Personnel Costs – new and existing permanent staff Materials and Equipment Travel and Subsistence Participation Fees Subcontractors Consortium Management Costs Audit Fees

10. Non-eligible Costs Non-eligible costs include:- Provisions for future losses Marketing, sales and distribution costs Leasing costs Indirect Taxes and duties

11. Activities & Maximum EU Funding Rates The maximum funding rates per activity are:- Research and Technological Activities – Public bodies – 75% – Secondary & Higher Education Establishments - 75% – Research Organisations (non for profit) – 75% – SMEs – 75% – Large Organisations – 50% Demonstration – 50% Coordination and Support Activities – 100% Other Activities* - 100% (including management, dissemination & training) Training & Career Development of Researchers Actions – 100% Frontier Research – 100%

12. Consortium Management *Other Activities can include:- Consortium Management – Maintenance of the Consortium Agreement – Legal, ethical, financial management – Certificates on the financial statements and methodology – Training activities but not for those being trained where permitted and foreseen Networking and Dissemination Studies IPR Protection

13. Personnel Costs All staff working on a project may be included in your costs. Timesheets to be kept The cost of employment would include:- – Salary – Other related costs Employer’s NI and Superannuation Any ‘normal practice’ additions In house Consultants – preferred to sub contractors but must:- – Work on UWE premises and be under UWE instruction – Costs must not be significantly higher than employer permanent UWE staff – Travel & subsistence payments to the consultant are made by UWE

14. Interest on Pre-Financing Coordinators of successful bids will receive an initial payment which equates to 160% of the 1st year or period of the budget. This is known as ‘Pre-financing’. Coordinators must distribute the pre-financing to partners within 45 days Any interest earned on any amount over €50,000 must be paid to the EU. Purpose of this regulation is to encourage Coordinators to distribute funds within the 45 day period

15. Overheads As with fEC overheads are referred to as Indirect Costs i.e those costs that cannot be directly attributed to a project. These costs would include:- Organisation Management Infrastructure Central Equipment Research element of academic contract Central support Staff Faculty Admin and Technical Staff FP7 provides organisations with 4 overhead options:- Flat Rate 20% Simplified Method Actual Indirect Costs Special Transitional Derogation Rate of 60% - UWE’s option The Special rate is only available for calls announced before 1 st January 2010

16. Preparing the Budget Budgets should be prepared using the ‘bottom up’ approach – it is bad practice to allocate the budget first and then determine what can be bought with the funds available. FBS have developed spreadsheets on their website to assist in budget preparation You will require:- – The call details Specific Programme, Theme, Activities covered by the call and their reimbursement rates Overhead rate – The Work Packages – The number of man months that each member of staff will spend on each work package – The average man month cost of each member of staff – Non-pay costs allocated by work package – Audit costs – Sub contractor costs Assistance is available from FBS

17. EPSS It is now mandatory that all FP7 submissions must be made on-line via the EPSS. Be aware of the following points:- You can submit your application form as may times as you like before deadline date Select ‘Special Transitionary Flat Rate’ from the drop down list on the A3 form B forms relate to the proposal and need to be uploaded (pdf format) A forms need to be filled in on-line Each partner needs to fill in their own A2 form Coordinator fills in the A3.1 form for each partner The A3.2 is populated automatically from the A3.1 form

18. Certificates on Financial Statements If a partner’s total claim is less than €375,000 then no Certificate is required A CFS is mandatory when a cumulative requested unauditted claim reaches €375,000 If the project is less than 2 years but more than €375,000 – only 1 final audit required Otherwise, a CFS is required each time that an unauditted value of €375,000 is reached If a Certificate of Methodology is provided then only 1 final CFS is required UWE currently does not have a Certificate of Methodology (no University has yet)