1. Reporting/Payment Procedure Gintas Janušonis & Gints Pīpiķis Joint Technical Secretariat Lead Partner Seminar 13 October 2008, Riga

2. Reporting Procedure 2  Six-months Reporting Period (RP): November 1–April 30 and May 1–October 31.  PP send to FLC Partner Reports: 1 month after end of RP.  JTS sends out a pre-filled Progress Report form to LP.  LP submits filled Progress Report to FLC 2 weeks (latest) before deadline for submission to JTS.  In 4 months after end of RP the LP submits Progress Report to JTS.

3. Reporting Procedure 3

4. 4 Reporting/ Payment Procedure Lead Partner PP 1 PP 2 PP 3 Project Partners Pre-filled Reporting Form Within 4 months after the end of Reporting Period Progress Report Payment Notification Letter After all open questions are clarified Preparation of payment CACA Payment JTS Answers Clarification Check of PR Max 6 months after submission 1 month (latest) before the end of Reporting Period

5. Reporting Procedure Progress Report must be submitted to JTS:  In electronic and paper version;  Confirmed by LP and FLC declaration;  In English. Supporting documents should be attached: 1. events documents (e.g. agenda, list of participants with signatures for each day, photos, see full list in PM, 10.1.2); 2. copies of outputs produced (e.g. studies, press articles, leaflets, pictures of infrastructure, etc.). 5

6. Reporting Procedure  Standard templates for Worksheets and Meeting participants lists should be used (available on www.latlit.eu – How to implement);  Progress Report approved by JTS – basis for CA to transfer the ERDF co-financing to LP;  LP is responsible for co-financing transfer to PP. 6

7.  Programme Document;  Programme Manual;  Subsidy Contract;  Relevant EU and national legislation including; National Eligibility Rules;  Guidelines for First Level Controllers (FLC);  FLC guidelines for PP and LP. Which ever rule is stricter - applies! 7 Eligibility: Legal Framework

8. Sound Financial Management Council Regulation no 1605/2002 of 25 June 2002  The principle of efficiency is concerned with the best relationship between resources employed and results achieved.  The principle of effectiveness is concerned with attaining the specific objectives set and achieving the intended results.  The principle of economy requires that the resources used by the institution for the pursuit of its activities shall be made available in due time, in appropriate quantity and quality and at the best price. 8 Main Principles

9. 9 General Rules Applicable to Project Budget:  Avoiding Corruption and Conflict of Interest;  No Double Financing;  Ownership of Project Results;  Public Benefit;  No Sub-Contracting Between PPs.

10. 10 Eligibility of Expenditure  Costs are definitively born by the LP or PP and would not have arisen without the project;  Expenditure has actually been paid out;  Expenditure is directly linked to the Project;  Expenditure is reported under the correct BL and WP;  Expenditure is reported in the same Reporting Period as it was paid (with exception of costs sharing, if relevant);  The reported expenditure must not exceed approved eligible Project budget.

11. 11 Eligibility of Expenditure Separate accounting system is kept:  Project specific accounting code (Council Regulation No 1083/2006,Art. 60(d)) to record project costs in the accounting system.  Book-keeping lists/ overviews- list of all expenditures for all transactions relating to the project.  Project number, short project title, WP and partner title should be indicated, by writing it or stamping on the original invoices and checks/ payment orders and agreements. If space is available, also Programme title should be indicated.

12. 12 Eligibility of Expenditure It is LP’s responsibility to ensure that adequate audit trail is documented on all levels, including PP expenditure which implies that the LP has an overview of:  Who paid?  What was paid?  Where the related documents are kept?  Who verified?  LP should request that all PP Partners keep the documents related to the project in a safe and orderly manner at least until end of 2021.

13. 13 Cost Sharing Cost sharing expenditure shall be reported during the period the payment was made by the implementing partner Paying partners must sign the cost sharing agreement:  Estimated total amount of expenditure  Kind(s) of expenditure  Indication of the implementing partner/paying partner(s)  Cost sharing method – division key (incl. its calculation) with the relevant justification  Financial liability and procedure in case of ineligible costs discovered or recovery of funds Each PP should check the acceptability of the method beforehand with its 1st level controller

14.  BL1 Personnel  BL2 Direct Administration costs  BL3 Indirect Administration costs  BL4 External Services  BL5 Travel and Accommodation  BL6 Equipment and Infrastructure  BL7 In Kind costs  BL8 Preparation costs 14 Budget Lines

15. 15 BL1: Personnel costs Includes:  Salaries, wages;  Employment taxes, social security;  Health insurance and pension contributions; of the staff directly engaged in the project and employed by the Partner institution on the basis of an employment/ labour contract. Requirements:  The actual salary rate has to be applied!  Costs must be certified on the basis of job agreements, decrees, time sheets, record of tasks carried out.

16. 16 BL2:Direct Administrative costs Directly linked to the project and fulfilling the following conditions:  Essential for the project’s implementation and would not have been incurred if the project had not been carried out;  If possible, consumables to be reported as project expenditure should be purchased separately from other office consumables.

17. 17 BL3: Indirect Administrative costs (Overhead costs) - share of regular monthly payments for rent, electricity, heating, depreciation costs and other similar costs directly related to project activities and calculated pro rata according to justified and clear method. Usually the share calculation is based on:  The working time of staff members;  Office space used for the project. Indirect Administrative costs can be up to 5 % of the total eligible project budget.

18. 18 BL4: External Services  Expenses paid by PP to external providers External = not employed by PP institution  Basis: supply contracts, service contracts, enterprise agreements, invoices  Costs are reasonable according to the standard rates in the country where the contracting Partner is located; average market rates resulting from public procurement procedures apply;  Only expertise specified in the Application Form  Quality of produced outputs is to be ensured

19. 19 BL5: Travel and Accommodation  T ravel costs are eligible only if they are directly related to and essential for the effective delivery of the project  The most economic or reasonable way of transport must be used  Despite the PP legal status (NGOs) the subsistence allowances rates as well as accommodation costs must not exceed the set limits for the public authorities under national regulations

20. 20 BL6: Equipment and Infrastructure  Investments funded by the Programme should be aimed at public use and their ownership and the way of use cannot be changed five years after the project has been finalized  Public procurement rules must be followed  Only investments specified in the Application Form  Quality of produced outputs is to be ensured

21. 21 Examples of Non-eligible Costs  VAT, other taxes and charges, if these are legally recoverable;  Bank transfers within Latvia and Lithuania;  Expenditure which is not directly linked to the project activities;  Payments for political or religious activities;  Fines, financial penalties and expenses of litigation;  Luxury goods and services, presents;  Cost-sharing method, when the LP is withholding a certain amount of PP expenditure after receiving payment from CA. See full list in Programme Manual, Chapter 9.6

22. 22 Revenue/ Currency Rate Revenue:  if project generates revenue (up to 5 years after closure) it must be recorded/reported and reduced from the eligible costs Currency rates:  currency (other than EUR) must be converted into EUR with an accuracy of four digits after the comma (e.g. 1.0234).  PP have to follow the daily exchange rate of the Bank of Latvia and the Bank of Lithuania.  any foreign-exchange commissions and losses are not eligible.

23. 23 Partner Reporting Form

24. Changes in the Project  LP must submit the official request for changes (www.latlit.eu – ‘How to implement’) to JTS beforehand  As a rule, Project changes can be requested only once during the project implementation  Types of changes:  Budget reallocation  Change of project activities and/or outputs  Prolongation of project duration  All minor changes (e.g. changes in contact information, minor rescheduling of activities, small budget implementation plan deviations) can be reported as ‘deviations’ in Progress Reports 24

25. Audit and Control  First Level Control (FLC): 100% of expenditures.  Audit: on a sample basis.  Other Possible Checks: – European Commission’s audit services; – European Court of Auditors; – National control bodies; – JTS/ Managing Authority; – Certifying Authority. 25

26. De-commitment  The MA has rights to withhold ERDF co-financing if it has not been spent in time and if Programme is subject to decommitment procedure by EC  Projects having the under-spending rate of more than 20 % can be subject to the de-commitment procedure  Plan vs reality (INTERREG IIIB) 26