1. Part-financed by the European Union Eligibility of expenditure Joint Technical Secretariat Information Seminar for Latvian Project Partners Riga, 29 April 2009

2. 2Information Seminar for Latvian Project Partners, Riga, 29 April 2009 Content 1.Budget line specific rules 2.Horizontal rules & Use of the Euro (exchange rate system) 3.Management and accounting tool: Cost itemisation list

3. 3Information Seminar for Latvian Project Partners, Riga, 29 April 2009 Content 1.Budget line specific rules 2.Horizontal rules & Use of the Euro (exchange rate system) 3.Management and accounting tool: Cost itemisation list

4. 4Information Seminar for Latvian Project Partners, Riga, 29 April 2009 Budget line specific rules BL1 – Personnel BL2 – External services BL3 – Travel and accommodation BL4 – Equipment and investment BL5 – Other direct costs

5. 5Information Seminar for Latvian Project Partners, Riga, 29 April 2009 project data form accounting (cost itemisation list) progress report Budget line structure in …

6. 6Information Seminar for Latvian Project Partners, Riga, 29 April 2009 Budget line specific rules BL1 – Personnel BL2 – External services BL3 – Travel and accommodation BL4 – Equipment and investment BL5 – Other direct costs

7. 7Information Seminar for Latvian Project Partners, Riga, 29 April 2009 BL1 – Personnel Personnel costs of project staff –Directly employed by project partners listed in the project data form –Carrying out project activities Documentation by –Employment/labour contract –Payslips/other adequate accounting documents –Time sheets –Other documents required by FLC

8. 8Information Seminar for Latvian Project Partners, Riga, 29 April 2009 BL1 – Personnel Unpaid voluntary work –Carrying out project activities –No remuneration at all –Limit: project partner’s contribution (10%, 15%, 25%, 50%) Documentation –Written agreement –Time sheets –Documentation of the work value estimation –Other documents required by FLC

9. 9Information Seminar for Latvian Project Partners, Riga, 29 April 2009 BL1 – Personnel NON-ELIGIBLE –Any voluntary remuneration and employer contribution –Unpaid overtime –Administration costs –Unpaid voluntary work of project partner’s own staff

10. 10Information Seminar for Latvian Project Partners, Riga, 29 April 2009 Budget line specific rules BL1 – Personnel BL2 – External services BL3 – Travel and accommodation BL4 – Equipment and investment BL5 – Other direct costs

11. 11Information Seminar for Latvian Project Partners, Riga, 29 April 2009 BL2 – External services Expenses paid by project partners to external providers Basis: –Contracts of work, supply contracts, service contracts –Invoices/requests for reimbursement. Public procurement / Bit-at-three rule ! (=> horizontal rules) Advance Payments: –Reported after partial of full delivery only

12. 12Information Seminar for Latvian Project Partners, Riga, 29 April 2009 BL2 – External services NON-ELIGIBLE –Contracting between project partners –Contracting of employees of the project partner organisation –Services provided by another unit of the project partner => BL 1 –Advance payments, which are not based on an invoice

13. 13Information Seminar for Latvian Project Partners, Riga, 29 April 2009 project data form itemisation list progress report

14. 14Information Seminar for Latvian Project Partners, Riga, 29 April 2009 Budget line specific rules BL1 – Personnel BL2 – External services BL3 – Travel and accommodation BL4 – Equipment and investment BL5 – Other direct costs

15. 15Information Seminar for Latvian Project Partners, Riga, 29 April 2009 BL3 – Travel and accommodation Travel and accommodation + subsistence allowances Essential for project activities Most economic way of transport Observe national and organisation internal rules! Prior approval of travels outside the programme area and the EU! Documentation –Agenda/programme of the meeting/event –Travel report/equivalent memo –Original tickets and other original documentary evidence

16. 16Information Seminar for Latvian Project Partners, Riga, 29 April 2009 BL3 – Travel and accommodation NON-ELIGIBLE –Costs exceeding national/EU limits –Travel in first/business class except no other option was available –Subsistence allowance for third persons –Use of car or taxi if public transport is available

17. 17Information Seminar for Latvian Project Partners, Riga, 29 April 2009 Budget line specific rules BL1 – Personnel BL2 – External services BL3 – Travel and accommodation BL4 – Equipment and investment BL5 – Other direct costs

18. 18Information Seminar for Latvian Project Partners, Riga, 29 April 2009 BL4 – Equipment and investment EQUIPMENT Tool/device to carry out project activities Not used by project target group after completion of activities Depreciation costs only! INVESTMENT Result of project activities Used by project target group after completion of activities Full costs

19. 19Information Seminar for Latvian Project Partners, Riga, 29 April 2009 project data form itemisation list progress report

20. 20Information Seminar for Latvian Project Partners, Riga, 29 April 2009 BL4 – Equipment and investment NON-ELIGIBLE –Equipment and investment financed by other financial instrument –Fully depreciated equipment –Equipment and investments not listed in the project data form –Equipment and investments not complying with information and publicity rules

21. 21Information Seminar for Latvian Project Partners, Riga, 29 April 2009 Budget line specific rules BL1 – Personnel BL2 – External services BL3 – Travel and accommodation BL4 – Equipment and investment BL5 – Other direct costs

22. 22Information Seminar for Latvian Project Partners, Riga, 29 April 2009 BL5 – Other direct costs ELIGIBLE –Direct office running costs –Transnational transfer charges and charges for project account –Participation fees for external events Other expenses –essential for project implementation –exist because of the project –supported by invoices directly attributable to the project/project staff

23. 23Information Seminar for Latvian Project Partners, Riga, 29 April 2009 BL5 – Other direct costs NON-ELIGIBLE –Overheads & other general costs allocated on a percentage or pro rata basis –National transfer charges –Exchange rate losses and debit interest –Awards an prizes –Expenditure belonging into an other budget line

24. 24Information Seminar for Latvian Project Partners, Riga, 29 April 2009 1.Budget line specific rules 2.Horizontal rules & Use of the Euro (exchange rate system) 3.Management and accounting tool: Cost itemisation list Content

25. 25Information Seminar for Latvian Project Partners, Riga, 29 April 2009 Horizontal rules Rules applicable to all budget lines Chapter 5.1.6. of the Programme manual Regular updates (Nov 2008)

26. 26Information Seminar for Latvian Project Partners, Riga, 29 April 2009 1. No contracting between project partners No contracting for carrying out project activities No profit margin Cost-sharing Contracting

27. 27Information Seminar for Latvian Project Partners, Riga, 29 April 2009 2. Conflict of interest Person involved compromised by family, political etc. reasons All necessary precautions to be undertaken

28. 28Information Seminar for Latvian Project Partners, Riga, 29 April 2009 3. Budget flexibility rule I. BL1BL2BL3BL4BL5Total WP0Flexibility WP1Flexibility WP2Flexibility WPnFlexibility TotalFlexibility Total budget  Reallocated amount (cumulated since project start) ≤ 20% or 40,000 EUR, whichever is higher NOT POSSIBLE - Changes of equipment/investment items - Changes between project partners’ budgets

29. 29Information Seminar for Latvian Project Partners, Riga, 29 April 2009 4. Public procurement For PPs from the EU Member States and Norway - Transparency, equality, objectivity - Institutional, regional, national and EU regulations For PPs from Belarus - PRAG - Rule of Nationality, Rule of Origin

30. 30Information Seminar for Latvian Project Partners, Riga, 29 April 2009 5. Bid-at-three rule Value of purchase below the institutional, national and Community thresholds BUT Value of purchase above 1,000 EUR excl. VAT Collection of 3 offers Proper documentation

31. 31Information Seminar for Latvian Project Partners, Riga, 29 April 2009 "BID-AT-THREE" support document

32. 32Information Seminar for Latvian Project Partners, Riga, 29 April 2009 6. Publicity rules Commission Regulation (EC) No 1828/2006 (Article 8,9 and Annex I) Indication of the EU’s participation Indication of the BSR Programme 2007-2013 Recovery of funds unduly paid!

33. 33Information Seminar for Latvian Project Partners, Riga, 29 April 2009 8. Treatment of cash in-flows

34. 34Information Seminar for Latvian Project Partners, Riga, 29 April 2009 Examples of cash-in flows Investments in infrastructure Revenues: User fee – fares paid by train travellers Other cash in-flows: Government contribution for construction

35. 35Information Seminar for Latvian Project Partners, Riga, 29 April 2009 A. Treatment of revenues Project application Project implementation - In the Progress report - Information to FLC - Deduction from the eligible expenditure Project closure - Reference period/5 years following the project completion

36. 36Information Seminar for Latvian Project Partners, Riga, 29 April 2009 Revenues in the Progress report

37. 37Information Seminar for Latvian Project Partners, Riga, 29 April 2009 B. Treatment of other cash in-flows Public contributions - NO double financing - co-financing NOT higher than partner’s contribution - funding under ONLY one operational programme Private contributions - NOT ELIGIBLE - e.g. airline company sponsoring air fares of PP

38. 38Information Seminar for Latvian Project Partners, Riga, 29 April 2009 Use of the EURO (Exchange rate calculation) All funds in EUR Other currency to EUR Monthly accounting exchange rate of the European Commission http://ec.europa.eu/budget/inforeuro/ When converting 4 digits after the comma Chapter 10.4.5. of the Programme Manual

39. 39Information Seminar for Latvian Project Partners, Riga, 29 April 2009 Content I.Budget line specific rules II.Horizontal rules & Use of the Euro (exchange rate system) III.Management and accounting tool: Cost itemisation list

40. 40Information Seminar for Latvian Project Partners, Riga, 29 April 2009 Cost itemisation list Management toolkit on the website (under General accounting) http://eu.baltic.net/Press_corner.3264.html? Compulsory Adjustments are possible For the LP (entire project) and for each PP

41. Part-financed by the European Union Eligibility of expenditure Rostislav Zatloukal Adviser for Audit and Control, Joint Technical Secretariat Information Seminar for Latvian Project Partners Riga, 29 April 2009