1. Volvox Understanding the Budget Angela Pettit – Contracts Officer

2. Understanding the Budget The principles and practice of the Volvox budget.

3. Principles 1 Shared cost EC will only contribute 50% funding Collaborators should contribute 50%.

4. Principles 2 We have submitted a three year budget We submit first 18 month detailed budget We receive 85% of first 18 months as pre- financing After each annual audit certificate is accepted that year’s costs are confirmed.

5. Principles 3 At the end of year 1 we submit another 18 month plan and budget We then receive 80% of the costs for the first 30 months less the confirmed first year costs The final 20% of project costs are not paid until all the reports have been accepted This may change when we know how ESTI will run our subcontract.

6. Principles 4 The EC will not release any additional finance until ALL the consortium reports and Audit certificates are received. If one partner delays in reporting ALL the partners will be penalised.

7. Overheads 1 What are Overheads? All non specific costs –Rent, Rates –Light, Heat –Administration –Grounds –IT and Library Support –Etc.

8. Overheads 2 EC will not pay for –Profit –Interest Charges –Currency losses –Etc.

9. Different Cost Models 1 EC expects Companies to be able to allocate overheads on a project by project basis –They MUST use Full Cost Model.

10. Different Cost Models 2 EC accepts that not all Universities and non commercial non-profit organisation finance systems can allocate overheads on a project by project basis. –They may opt for Full Costs Flat model or –They may opt for Additional Cost model.

11. Different Cost Models 3 EC considers that the three methods should achieve similar results.

12. Full Cost Model (FC) 1 This is the usual (EC preferred) option Calculate the FULL costs.

13. Full Cost Model (FC) 2 Direct Costs –Salaries, social security and pension costs of ALL staff (supported by time sheets) –Equipment –Consumables –Travel and Subsistence.

14. Full Cost Model (FC) 3 Actual Overhead –This will be calculated by the finance office of the Company/Institution.

15. Full Cost Model (FC) 4 Annual Financial Statement will show the full costs – Direct and Overhead EC fund 50%.

16. Full Costs Flat (FCF) 1 Calculate Direct Costs as for the Full Costs model EC allocate up to 20% overhead (except for subcontracts).

17. Full Costs Flat (FCF) 2 Annual Financial Statement will show the full costs plus 20% overhead EC fund 50%.

18. Additional Cost Model (AC) 1 Calculate the Additional costs to the Institution to do the work Salaries etc only of those –with specific temporary contract related to the Project or –contract of employment depends on funding additional to recurring funding Such as NCBE within University of Reading. These salaries must be supported by timesheets.

19. Additional Cost Model (AC) 2 Other Additional costs –Consumables –Travel and Subsistence –Equipment EC allocate 20% overhead (except for subcontracts).

20. Additional Cost Model (AC) 3 Annual financial statement will show the full costs plus 20% overhead EC pay all costs claimed.

21. Additional Cost Model (AC) 4 In the annual technical report contractors using the AC model must identify all the resources employed on the project and a global estimate of all their costs (not just the additional eligible costs which are reported in the financial statement) Annex II 24.(d) In the case of salaries these must be supported by timesheets These costs are NOT reimbursed.

22. Management Management costs are different –EC will fund full cost –No overhead –Up to 7% of the total budget.

23. Timesheets 1 Personnel –Working time to be charged – must be recorded throughout the duration of the project by any reasonable but reliable means. The designated Principal Investigator should certify the record. A simple estimation of hours is not sufficient. –There must be a system that allows the time of anyone working on the project to be followed and audited. –Productive hours must be calculated according to the contractor’s normal practices (taking into account national holidays absenteeism etc).

24. Timesheets 2 Permanent employees –Who have permanent working contracts which depends partially on external funding. Temporary employees –Who have temporary working contract to carry out work on EC funded project.

25. Timesheets 3 Audit –The Audit will include collection of timesheets for each reporting period: –Timesheets are required for person (including permanent staff charging management time) funded from the project. –Contractors using the Additional Cost (AC) model must identify in their periodic technical reports all the resources employed in the project and provide a global estimate of all their costs (not just the additional eligible costs which are reported in the financial statement). Therefore TIMESHEETS should also be used to record Management and Administration time in order to provide a Global Estimate of resources.

26. Timesheets 4

27. Timesheets 5

28. Financial Statements However: The Financial Statements are split between the type of Activity –Research and Development –Training –Demonstration –Management We only report under R&D and Management

29. The Volvox Budget The Aim is to fair between the Partners Difficulties –Different Salary charges –Different travel costs –Different cost models EC CUT THE BUDGET IN HALF!

30. Our Principles Salaries in accordance with equal percentage of initial requested amount Equal Hardware Budget for all Equal Software Budget for all Equal Audit Costs for all Equal Management Costs for all.

31. Our Principles 2 Reading will manage the Travel Budget Reading will manage the additional software budget.

32. Budgets 1

33. Budgets – Year 1

34. Budgets – Year 2

35. Budgets – Year 3