1. Delegation of the European Commission to Russia 1 Financial Reporting for Grant Contracts General Conditions 22.08.2006

2. Delegation of the European Commission to Russia 2 General Conditions The Beneficiary must keep accurate and regular records and accounts of the implementation of the Operation using a dedicated book-keeping system as a part of or as an adjunct to the Beneficiary’s own accounts. (Annex II, art.16.1)

3. Delegation of the European Commission to Russia 3 General Conditions The Beneficiary alone shall be accountable to the Commission for the Implementation of the Operation. (Annex II, art.1) The Beneficiary undertakes to ensure that the conditions imposed upon him under this Contract also apply to all partners and subcontractors involved.

4. Delegation of the European Commission to Russia 4 General Conditions The Beneficiary must provide the Commission with full information on the implementation of the Operation. To that end, the Beneficiary must draw up intermediate reports and final report. These reports shall consist of a technical and a financial section. (Annex II, art.2.2)

5. Delegation of the European Commission to Russia 5 ADVANCE PAYMENT Request for advance payment can be sent to the EC Delegation to Russia when the contract is signed by both parties. Amount of the advance payment is indicated in the Special Conditions, art.4

6. Delegation of the European Commission to Russia 6 ADVANCE PAYMENT Request for Advance Payment should be prepared in accordance with template. The following information is obligatory for the Request for Advance Payment: name and address of your Organisation; contract number and project title; type of payment; requested amount in EURO; bank account details, that must correspond to the information on the Financial ID form that you sent to EC Delegation before contract signature.

7. Delegation of the European Commission to Russia 7 ADVANCE PAYMENT Request for Advance Payment should be dated and signed by the empowered representative of your organisation It must be an original

8. Delegation of the European Commission to Russia 8 ADVANCE PAYMENT In case the name of your organisation or its legal address or the bank details change, please, contact your Project Officer and submit a new Financial Identification Form and / or Legal Entity File ASAP The corrections will take 2-4 weeks

9. Delegation of the European Commission to Russia 9 INTERIM PAYMENT Grants for more than 100,000€ /an implementation period more than 12 month: Further pre-financing may only be given if the part of the expenditure actually incurred which is financed by the Contracting Authority (by applying the percentage set out in Article 3.2 of the Special Conditions) stands at 70% at least of the previous payment as supported by the corresponding interim report. (Annex II, art.15.1, option 2) Where the consumption of the previous pre-financing is less than 70%, the amount of the new pre-financing payment shall be reduced by the unused amounts of the previous pre-financing payment. The sum total of pre-financing under the Contract may not exceed 90% of the amount referred to in Article 3.2 of the Special Conditions.

10. Delegation of the European Commission to Russia 10 INTERIM PAYMENT Request for Interim Payment should be prepared in accordance with the requirements indicated above for the advance payment and Annex V template.

11. Delegation of the European Commission to Russia 11 INTERIM PAYMENT The request for interim payment must be supported by an interim financial report and technical report, which should be prepared using the enclosed templates, and consists of the following components:

12. Delegation of the European Commission to Russia 12 INTERIM PAYMENT COMPONENTS Summary table - INTERIM FINANCIAL REPORT - Summary tables for Fees and Per Diems Summary tables for budget headings 2, 3, 4, 5 and 6 Copies of supporting documents for Budget line 3 (Equipment and Supplies) Attendance sheets for participants of seminars, conferences, workshops etc Copies of addenda and relevant correspondence between your Organisation and the EC Delegation related to approval of financial issues Second bound copy of the whole package of documents listed above

13. Delegation of the European Commission to Russia 13 INTERIM PAYMENT 1.Summary table - INTERIM FINANCIAL REPORT It must indicate the real total expenditure incurred and include the contributions of the EC, applicant and partner organisations and be as detailed as the contract budget breakdown. It may include eligible costs invoiced to your organisation (or partner organisations) only during project implementation period set by the Special Conditions of your Contract, art.2

14. Delegation of the European Commission to Russia 14 INTERIM PAYMENT All amounts should be claimed in Euro NEW! Any amount not originally invoiced in Euro by the supplier must be converted to Euro at the rate made up by the average of the rates published in InforEuro for the months covered by the relevant report. The official EC exchange rates can be found on the Internet at http://ec.europa.eu/budget/other_main/links_en.hmt

15. Delegation of the European Commission to Russia 15 INTERIM PAYMENT 2. Summary tables for Fees and Per Diems Each project staff member must regularly fill in timesheets (Annex II, art.16.3) A full-time working month consists of 22 working days

16. Delegation of the European Commission to Russia 16 INTERIM PAYMENT Per Diems are paid only to the project staff and experts of the project specified by article 1. “Human Resources” for each night spent on mission. It should include accommodation (hotel) costs, meals, local transportation (car rent, taxi), bed sheets in the train and sundry expenses.

17. Delegation of the European Commission to Russia 17 INTERIM PAYMENT NEW! The Per diem rate cannot exceed rates set out in Annex III, which correspond to the scales published by the European Commission at the time of signing this contract http://europa.eu.int/comm/europeaid/perdiem/index_en.htm

18. Delegation of the European Commission to Russia 18 INTERIM PAYMENT 3. Summary tables for budget headings 2, 3, 4, 5 and 6 Summarize all relevant invoices and receipts in chronological order with a short description of invoices and should follow a budget breakdown and coding Costs in the currency of invoice with an indication of the date of invoice Costs must be converted to Euro at the rate made up by the average of the rates published in InforEuro for the months covered by the relevant report.

19. Delegation of the European Commission to Russia 19 INTERIM PAYMENT 4. Copies of supporting documents for Budget line 3 (Equipment and Supplies) Copy of invoice/Copy of invoice- facture Copy of the payment document (payment order or cash receipt)

20. Delegation of the European Commission to Russia 20 Final Financial Report The Final report shall be forwarded within three months of the end of the Operation’s duration of execution as defined in the Contract

21. Delegation of the European Commission to Russia 21 Final Financial Report The final report must contain a final statement of all the eligible costs of the Operation, plus a full summary of the Operation’s income and expenditure

22. Delegation of the European Commission to Russia 22 Calculation of the Final Payment In the contract: Total cost of the operation:500,000.00 € EC contribution (90%) of total cost:450,000.00 € Advance Payment:300,000.00 € Interim Payment:100,000.00 € Forecast of Final payment: 50,000.00 €

23. Delegation of the European Commission to Russia 23 Calculation of the Final Payment Calculation of the balance amount based on real accepted costs (final financial reports): Total amount of actual costs supported by valid documentation:450,000.00 € EC contribution (90% of total accepted cost):405.000,00 € Final payment: (405,000.00 € - 300,000.00 € - 100,000.00 € ) 5.000,00 €

24. Delegation of the European Commission to Russia 24 Final Financial Report COMPONENTS 1. Summary table – FINAL FINANCIAL REPORT 2. Expenditure Verification Report 3. Summary tables for Fees and Per Diems 4. Summary tables for budget headings 2-6 5. Copies of supporting documents for Budget line 3 (Equipment and Supplies) 6. Attendance sheets for participants of seminars, conferences, workshops etc 7. Statement from your bank about interest accrued 8. Copies of addenda and relevant correspondence between your Organisation and the EC Delegation related to approval of financial issues Second bound copy of the whole package of documents

25. Delegation of the European Commission to Russia 25 Final Financial Report 1.Summary Table – Final Financial Report EC + Beneficiary's + Partner(s)’ contribution Please do not delete, rename, add or replace budget lines There should be no rounding in the financial report: two figures after the decimal point for all expenses, and four figures after the decimal point for the exchange rate average of the rates published in InforEuro for the months covered by the relevant report Costs incurred during the project implementation period (SC, art.2)

26. Delegation of the European Commission to Russia 26 Final Financial Report 2. EXPENDITURE VERIFICATION REPORT The purpose of the expenditure verification report is to certify the amount of your report.

27. Delegation of the European Commission to Russia 27 Final Financial Report EXPENDITURE VERIFICATION REPORT Made in accordance with template (Annex VII) Confirms that the amounts claimed by the Beneficiary are real (each invoiced item has a valid and original supporting document), exact and eligible in accordance with the Contract. The auditor must confirm and attest the accuracy of your Final Financial Report by signing each page of the Financial Report Table

28. Delegation of the European Commission to Russia 28 Final Financial Report 3. Summary tables for Fees and Per Diems – FEES Each project staff member must regularly fill in timesheets 1.Respect the rates and number of units for salaries and per diems 2.A full-time working month consists of 22 working days. 3.Originals of timesheets must be kept by your organisation for the Audit.

29. Delegation of the European Commission to Russia 29 Final Financial Report 3. Summary tables for Fees and Per Diems – PER DIEMS 1.The Per Diem can be paid only to the staff member or expert of the project 2.Per Diems can be paid only for each night spent on mission 3.The Per diem rate cannot exceed rates set out in Annex III, which correspond to the scales published by the European Commission at the time of signing this contract http://europa.eu.int/comm/europeaid/perdiem/index_en.htm 4.Please always indicate in the summary table the name of person on mission, his/her post, destination and period on mission and follow budget breakdown and coding

30. Delegation of the European Commission to Russia 30 Final Financial Report 4. Summary tables for budget headings 2, 3, 4, 5 and 6 Summarise all relevant invoices and receipts in chronological order with a short description of invoices Costs in the currency of invoice with an indication of the date of invoice Costs must be converted to Euro at the rate made up by the average of the rates published in InforEuro for the months covered by the relevant report.

31. Delegation of the European Commission to Russia 31 Final Financial Report Heading 2 - Travel Please always indicate in the summary table the name of person on mission, his/her post, destination and period on mission Copies of tickets (incl. boarding pass for the air ticket) should be kept and presented upon the request

32. Delegation of the European Commission to Russia 32 Final Financial Report 5. Copies of supporting documents for Budget line 3 (Equipment and Supplies) Copy of invoice, Copy of invoice-facture Copy of the payment document (payment order or cash receipt) Certificate of origin for the equipment (for the amount more than 5,000€ per unit) Tender documentation (for the amount more than 5,000€) Transfer of ownership document/ accounting documentation confirming that the equipment is on the organization’s balance if it remains with the beneficiary (for the amount more than 5,000€ per item) All documents should be bound, numbered in accordance with the summary table and easily readable

33. Delegation of the European Commission to Russia 33 Final Financial Report Rule of origin Our Regulations contain rules of origin for any supplies acquired by the Beneficiary in the context of the grant. The supplier must state the country of origin. The equipment should be produced/assembled by the EU member states + candidates, Russia or TACIS countries. (Annex IV, art.2.2) Certificate of origin for the equipment (for the amount more than 5,000€ per unit) Certificate of origin for the equipment should be attached to the financial report with indication of the country of origin (Annex IV, art. 2.7)

34. Delegation of the European Commission to Russia 34 Final Financial Report Transfer of Ownership The equipment, vehicles and supplies must be transferred to local partners or the final recipients of the Action Made in accordance with template and submitted in original Includes all equipment for the amount of 5,000€ per item (list of equipment is required) (Annex II, art.7.3) Signed by both parties and bears a stamp of the recipient if remains with the beneficiary accounting documentation confirming that the equipment is on the organization’s balance needed (Annex II, art.7)

35. Delegation of the European Commission to Russia 35 Final Financial Report Procurement in the context of EC external actions See details in Annex IV of the Contract For services and supplies of a value of 5 000€ or less, the Beneficiary may place orders on the basis of a single tender For services/supplies of a value of more than 5 000€ the Beneficiary consults at least three service providers/suppliers of its choice and negotiates the terms of the contract with one or more of them

36. Delegation of the European Commission to Russia 36 Final Financial Report Procurement in the context of EC external actions The contract must be awarded to the most economically advantageous tender (ie, the tender offering the best price-quality ratio) Artificially splitting related activities into smaller lot sizes or contracts to circumvent the procurement thresholds is prohibited Tender documentation (tender offers with a relevant report) should be submitted with the final report

37. Delegation of the European Commission to Russia 37 Final Financial Report 6. Attendance sheets for participants of seminars, conferences, workshops (non-staff members of the project) List of participants of seminars, conferences and workshops should be signed and dated with a precise indication of title and location.

38. Delegation of the European Commission to Russia 38 Final Financial Report 7. Statement from your bank about interest accrued The grant can under no circumstances result in a profit for himself According to Article 15.10 final instalment should be reduced by the amount of the interests accrued from pre-financing If no interest accrued submit a bank statement

39. Delegation of the European Commission to Russia 39 Final Financial Report VAT – Value Added Tax According to Article 14.6 VAT is not an eligible expense Applicants and partners too should follow the established procedures to reclaim VAT

40. Delegation of the European Commission to Russia 40 Final Financial Report ADMINISTRATIVE COSTS (Annex II, art. 14.4) This heading may include project costs that cannot be attributed to any other budget headings Please, note that the amount under this budget heading cannot be greater than 7% of the real cost of your project Summary table is not submitted to the EC but records should be kept in your organisation for audit

41. Delegation of the European Commission to Russia 41 Final Financial Report COMPONENTS 1. Summary table – FINAL FINANCIAL REPORT 2. Expenditure Verification Report 3. Summary tables for Fees and Per Diems 4. Summary tables for budget headings 2-6 5. Copies of supporting documents for Budget line 3 (Equipment and Supplies) 6. Attendance sheets for participants of seminars, conferences, workshops etc 7. Statement from your bank about interest accrued 8. Copies of addenda and relevant correspondence between your Organisation and the EC Delegation related to approval of financial issues 9. VAT – only official exempt from state/local tax inspectorate is acceptable Second bound copy of the whole package of documents

42. Delegation of the European Commission to Russia 42 Final Financial Report The Commission may request additional information at any time; that information must be supplied within 30 days of the request.

43. Delegation of the European Commission to Russia 43 Amendments to the Budget 1) By Notification (in writing to PO): Transfer within budget heading Transfer between budget headings involving less than 15% variation in each heading Changes should be supported by attached correspondence on PO approval Except: Administrative expenses and Contingency reserve 2) By Addendum: Major changes e.g. budget change > 15% Prior approval – NOT retroactive (Annex II, art.9)