C o B a S y s Nicola Dorigo Salamon

C o B a S y s www.cobasys.eu Nicola Dorigo Salamon
Community based system in HIV treatment Kick-Off Meeting Università degli Studi Di Modena e Reggio Emilia R E S E A R C H O F F I C E Nicola Dorigo Salamon With the support the ACP Science & Technology Programme. An ACP-EU co-operation programme in the field of science and technology. CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Role of the Project Manager
Help the project navigates and negotiates the magic beauty of EC/ACP rules and procedures concerning the grant contract. Establish a good working relationship with the coordinator Deal with all legal, administrative, financial issues related to the implementation of the Contract. Monitoring compliance of the project to the Grant Contract. Acting as project secretariat serving the Coordinator and the Steering Committee. CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Lilongwe, Malawi, 9-10° February 2010
First, a reality check CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Call for proposal Activities Evaluat Grant Contract Ranking Application Project Account Decision of funding Project Start Staff Recruitment Budget Project Implementation Contractual timeline Consortium Consortium Agreement ACP Pre-financing Financial Reporting ACP Pre-financing Final Reporting Kick off Meeting Final Payment Start Interim Period Finish CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

CoBaSys – ACP S&T grant in figures
Partners N° Associates Country coverage: 3 EU + 8 ACP countries (incl the associates) Duration: 3 years Workplan: 7 WPs Tot Cost: € ,54 EC contribution: € ,51 Funding support rate: up to max of 85% Prefinancings: paid in 7 instalments 45 after the GC signature (Jan 2010) Final payment: € ,20 after the end of the project. Indirect costs ca 7% flat rate. ca. € ,01 no needed supporting documents. CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

The legal relations inside the consortium
European Commission Grant Agreement Partner 1 (Beneficiary Co-ordinator) Consortium Agreement Know-how Partner 2 Partner 3 Partner 4 Sub-contract Technical Assistance Third Parties CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Hierarchy of Law sources
Rules of Participation ACP S&T Specific Programme Grant Contract (GC) Annexes I,II, III … The consortium agreement must comply with the regulations of the Rules of Participation and the Grant Agreement provisions, in case of incompatibility it applies the superior legal source which takes the precedence over Consortium Agreement CA CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Grant Contract (GC) Special conditions (7 articles) Annex I – Description of the Action (DoA) Annex II - General Conditions appplicable to the EC financed grant contracts for external actions Annex III - Budget for the Action Annex IV - Contract-award procedures Annex V -Standard rquest for payments and FIF (coordinator only). Annex VI - Model narrative and financial report. Annex VII - Model report of factual findings and terms of reference for an expenditure verification of an EC financial grant contract for external actions. CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

The Needs for a Consortium Agreement (CA) Provide an internal organization of the consortium giving autonomy and responsibility to parties, Harmonisation of the diverse interests and objectives of the participating individuals and institutions. Specify or supplement binding commitments among themselves in addition to the provisions of the GC: distribution of the Community financial contribution. the implementation of the action. management of intellectual property and access rights to results, the responsabilities and allocation of funds are briefly addressed in the ACP-GC ( ownership, publicity, confidentiality arrangements). These needs, lead the Coordinator to propose a Conosrtium Agreement. The need CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Consortium Agreement (CA)
Term defined as "an agreement that contractors conclude amongst themselves for the implementation of [a] contract. The Parties wish to specify or supplement binding commitments among themselves in addition to the provisions of the ACP-GC. the CA limits the potential for conflicts amongst the project partners and also helps to ensure that conflicts are avoided. The CA only governs the relations between the participants themselves. Note that the ACP/EC is not a contracting party to this agreement. The legal provisions which regulate the consortium and the EC/ACP relations are laid down in the grant contract. In any case, the GC’s regulations take priority over those of the consortium agreement. CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

General Structure of the consortium agreement
20 articles + 8 Attachments CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Mandatory Law and Arbitration
Choice of law: The Consortium Agreement is governed by the European Union Law sources and by the national Law as provided by the EC-Grant Agreement (Belgian). helps the consistency with the law in the Grant Agreement in order to harmonize possible conflicts. Settlement of disputes: The problem: In international disputes: it might be difficult to use a foreign national court for settling disputes. There are several issues to be considered in this context: the costs of and time consumed by the process and the enforcement of the decision. The solution: The Arbitration. All disputes which cannot be solved amicably, shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce of Paris by one or more arbitrators appointed. The place of arbitration shall be Brussels. The language of arbitration and in the arbitral proceedings shall be English. The arbitration award will be final and binding upon the Parties concerned. CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Duration and Termination
Termination either after completion of the Project or terminated prematurely by: a Consortium decision, or from the Commission according to the Grant Contract. Possibility to terminate either the whole Project or the participation of one or more of the Parties. In case of termination, surviving clauses are contained in the respective CA article on. (Liability, Access Rights, Confidentiality, Applicable law etc.) Termination shall not affect previous obligations of the leaving Party. CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Responsability vs. Liability
There is a difference between responsibilities of the coordinator and the partners for carrying out the project - technical responsibility - on the one hand and the liability they have towards the other partners and the ACP on the other. Responsibility is the moral and forward-looking sense one has for achieving (or maintaining) a good result Liability is the responsibility for the damage which is determined after the fact. CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Responsibilities Cooperation in the implementation of the Project: To take part in the efficient implementation of the Project and to cooperate in good faith. Notifications and provision of information to the Consortium: To notify promptly the Consortium and to provide necessary information. Process of breach of responsibilities: In the case that a consortium body identifies a breach by a Party the Coordinator will give written notice requiring that such breach be remedied within 30 calendar days. Accuracy of information and material provided: To take reasonable measures to ensure accuracy of provided information and materials. Subcontractors: (if any) Parties remain responsible for their own subcontractors and other third parties (such as possible Affiliated Entities and other third parties). CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Liability Liability is the responsibility for the damage which is determined after the fact. In case the Parties breach liability may arise within the following limitations: – No warranty will be given relating to the information and materials supplied to the other Parties. The recipient is entirely liable for the use to which it puts the information and materials supplied. Limitations of liability do not apply in case of: Intentional breaches and acts. non-contractual liability No liability for indirect damage. Gross negligence. Each party solely is responsible towards third parties for its own actions and use of Foreground or Background. No liability in case of Force Majeure. CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Technical and Financial Responsibility in the CA
Technical collective responsibility Responsibility for carrying out the work of a defaulting partner taking all necessary and reasonable measures to ensure that the project is carried out in accordance with the terms and conditions of the GA. Financial Responsibility The consortium will have to reimburse the amount due to the ACP if no remedial is possible Collective responsibility Financial responsibility – based on the share of the budget CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Payments and recovery Payments to Parties are the exclusive tasks of the Coordinator. The Coordinator is entitled to withhold any advances either due to a Defaulting Party or to a Beneficiary not being a Party. The Coordinator is entitled to recover any advances already paid to a Defaulting Party. Time table of instalments is provided see CA art 7. CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

How to cope with such issue? Recovery procedures:
The Parties agree to be irrevocably and unconditionally, jointly and severally responsible for any amount due to the ACP by one of them which could not be honoured by later payment. If any amount is unduly paid to any Party or if recovery is justified under the terms of the contract, the Party undertakes to repay the Coordinator within max. 30 days from simple request of the Coordinator. The Amount due to repay will be established at the end of the project, after the approval of the final report on the basis to the outcome of the assessment procedure carried out by the EC. If the obligation to pay is not honoured The amount due shall bear interest from the date set for payment up to the date the ACP receives the full payment inclusive of interest. If the payment has not been made, the Coordinator may recover by offsettin the sum against any sum owed to the concerned beneficariy. If unsuccesful UNIMORE shall hold al the other parntners collectively jointly responsible for the amount due in Acordance with Art 7 of the CA. For the compensation each Partner will contribute according to its share of the total budget. Charges for the recovery of the sums shall be borne by the concerned partners. CA Art 7.3. CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Knowledge management – IPRs
CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

IPR terminology CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

IPR terminology Knowledge Results generated within the Project Pre-existing know-how Background information and rights brought to the project. Access Rights Licenses and user rights to Foreground and Background Use Includes commercial and further research purposes Ownership: each participant owns the foreground it generates Joint ownership (in absence of specific agreement) : any owner can grant non-exclusive licenses to third parties, subject to prior notification and fair and reasonable compensation to the other owner(s) with no right to sub-licence CA Art of Section 8 and Section 9 GC Art II:3 Ownership/Use of the Results CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Pre-existing know-how
Projects involve the sharing of knowledge. participants bring to the project their own knowledge, which may form part of the so-called pre-existing know-how as long as it is necessary for another participant to carry out the project work or use its own knowledge. Therefore, the participants are reciprocally using information of other participants. Pre-existing know-how “positive list” Partners define the background needed for the purposes of the project in a written agreement and, where appropriate, may agree to exclude specific know-how. This approach makes it clear which background is accessible and to whom access is granted (if, some elements are available to some participants and not available to others). However, this list should be drafted carefully, and in good faith; it should not contain elements of know-how that presumably should be available for access later. What is pre-existing know-how? Know-how considered necessary if it would be impossible to carry out the project, or to use the foreground, without it or if it would imply significant delays or unnecessary financial or human investments to “duplicate” that know-how. The pre-existing Intellectual Property helps define the start point of the project by disclosing what you already have and are providing to undertake in the research. CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Pre-existing “positive list”
What is Pre-existing know-how? The existing intellectual property brought to the project by a partner include a list of, identified software, experience previously undertaken data, indicators, techniques, models methods, methodologies, protocols,, trade marks, process, systems, know-how, papers, databases, trade and insutrial sectrets, business data, Further one can list relevant publications or description of work and writings notes and articles including but not limited to books, journal articles, conference papers and work in progress Normally a brief paragraph or two is sufficient 1) Knowledge of the application of a specific technique in a specific field in relation to certain XX. 2) Experience in interpreting certain kinds of impacts on certain XXX of ... 3) The design of XXX for exposing XXX to certain kinds of effects and the methods for interpreting data collected with XXX. 4) The design, use and interpretation of data from the use of this technique. 5) Knowledge of certain kinds of processes in XXs and how certain kinds of effects may impact on those. 6) Knowledge of the existing literature in this specific field or these fields. CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Definition of “Needed”
Access Rights for the implementation of the Project: are Needed if carrying out the tasks assigned to the recipient Party would otherwise be impossible, significantly delayed or require significant additional financial or human resources. for Use of own Foreground: Access Rights are Needed, if the Use of the recipient Party’s own Foreground would otherwise be technically or legally impossible. CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Management structure: simplified governance Operational bodies Decision making and advisory bodies CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Voting and decision making
Provide assistance to the Coordinator and the General Assembly For executing the decisions of the General Assembly. Shall be responsible for the day to day management of the project. CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

CA Signature Procedures
Often it is too impractical for all Parties to sign the same document at the same time. The following is widely used: Each Party signing a separate signature page (CA section 12): Each Party signs a separate signature page as many times as there are Parties. 11 originals copies of the signature page see art. The Coordinator gathers all originals and then delivers the whole package consisting of the text and all signatures to all Parties. CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Technical and Financial Reporting
Voluntary Reports by Consortium Agreement: 6 months technical report ? (GO/NO GO) highly reccomended (internal) Periodic financial statement (M6, M18, M30) (to assess, adjust and relocate, if necessary, highly reccomended too). Linked to payment of the pre-financings Mandatory Reports by Grant Contract: Interim Technical implementation report (M12, M24, describing the development, progress and achievements of the action . Annual Interim Financial statement (M12, M24) + follow-up budget for the next year. Final technical implementation report (see template – 2 originals). Final financial statement + Consolidated statement. Documents are to be delivered in English. See GC Annex VI for complete indications and templates. CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Approval of reports (GC art ). The Contracting Authority has 45 days for approving the report from the date of receipt. Or to request further documents (GA art II.15.4). The EC may suspend the payment procedure. The time starts running again on the date the requirred information is received by ACP. The coordinator shall supply any addintional info or a new report in 30 days. Approval green light for the payments If satisfactry, follows the payment. CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

FINANCIAL PROVISIONS CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Financial Provisions art 14 GC
General Principles: Distribution of the financial contribution of the Commission Responsibility and justification according to own accounting principles Under- and overspending Special financial regulations for Defaulting Party / Party leaving the Consortium Budgeting according own accounting principles Budget adjustement and realocations. CA Section 7. CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

3-year budget breakdown

Distribution of the budget/EDF

Eligible costs (1) (GC art II.14.1) Must be: Connected with the subject of the agreement. Indicated in the estimated overall budget. Necessary used for the sole purpose of achieving the objectives of the project and its expected results. These must be essential for the performance of the project and would not be incurred if the project did not take place. Actual and Reasonable (real and not estimated, budgeted or imputed). Any adjustments must be reported in the financial statement for the subsequent period. Incurred by the beneficiary during the duration of the project. Supporting documents proving the payment must be kept for all costs and up to 5 years after the end of the project. CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Eligible costs (2) … must be: Economic: complying with standard of “good housekeeping” and “sound financial management” in spending money effectively. This can be understood as: efficiency, means minimising the costs of resources used for an activity (input), maximising the output, having regard to the appropriate quality, effectiveness measure the extent to which the objectives have been achieved. It means the relationship between project costs and outcomes, expressed as costs per unit of outcome achieved. Identifiable, verifiable and documented: recorded in the accounts of the beneficiary and, in the case of any contribution from third parties, recorded in the accounts of the third parties. Determined according to the usual accounting and management principles and practices of the partners. Costs which cannot be justified are to be considered not eligible. CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

ELIGIBLE COST = DIRECT COSTS + ADMIN INDIRECT COSTS
Eligible costs (3) ELIGIBLE COST = DIRECT COSTS + ADMIN INDIRECT COSTS Costs that can be attributed DIRECTLY and SPECIFICALLY to the projet activities Costs that CAN NOT be directly attibuted to the project, but incurred in relation to the direct costs. Admin costs do not need to be supported by accounting documents. CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Expenses - Budget headings Lilongwe, Malawi, 9-10° February 2010
Eligible Costs as in Annex III - Budget for the Action –CoBaSys and GC art. II.14 Expenses - Budget headings 1. Human Resources 2. Travel 3. Equipment and supplies 4. Local office 5. Other costs, services 6. Other 7. Subtotal eligible direct costs of the Action (1-6) 8. Provision for contingency reserve (max. 5% of item 7 "Subtotal eligible direct costs of the Action") 9. Total eligible direct costs of the Action (7+8) 10. Administrative costs (max 7% of item 9 "Total eligible direct costs of the Action") 11. Total eligible costs (9+10) 1.1 Salaries (gross amounts, local staff) 1.2 Salaries (gross amounts, expat/international staff) 1.3 Per diems for missions/travel 2.1 International travel 2.2 Local transportation 3.1 Purchase or rent of vehicles 3.2 Furniture, computer equipment 3.3 Machines, tools, etc. 5.1 Publications 5.3 Auditing costs 5.5 Translation, interpreters 5.7 Costs of conferences/seminars 5.8 Visibility actions 5.9 Local Conferences and meeting Rev during the negotiation CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Budget articulated per eligible cost category

Eligible costs (4) DIRECT COSTS: (GC art II.14.2) Personnel (budget heading 1) Travel & subsistence (budget heading 2) Purchase or rentals costs for service, equipment, consumables and supplies. (budget heading 3) Costs arising from requirements imposed by the Agreement (dissemination, ©, evaluation of the action, audits, etc.), including costs of any financial services (budget heading 5 and 6) INDIRECT COSTS Administrative costs (7% of the total direct costs- GC II.14.4) Admin costs do not need to be supported by accounting documents. CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Non eligible costs GC art II.14.6 Return on capital, Debt and debt service charges, Provision for losses or potential future liabilities, Interest owed, Doubtful debt, Currency Exchange losses, VAT, unless the beneficiary is unable to recover it, Costs covered by other action receiving Community grant, Excessive, extravagant or reckless expenditure, items already financed in other projects. Contributions in kind are not eligible. CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Human Resources Only the costs of the actual hours worked by the persons directly carrying out work under the project may be charged. General management and administration costs may are covered by overheads. Ensure to calculate actual Personnel costs including social security charges, insurance and excluding taxes. You should include all direct employment costs in the hourly rate (e.g. salary, social charges, such as pension contributions or unemployment insurance, etc.). Include references to the project in the contract of all non permanent personnel hired for the project + keep CVs Keep and revise a description of the activities performed by the individual working on the project (in English) CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

How can you employ Personnel Costs?
New Staff Positions to be hired specifically for the project implementation (fellowships, new working contracts) Permanent employee, who has a permanent working contract with the legal entity and is involved in the project activities. Fixed term contract, who has a temporary working contract with the legal entityand is involved in the project activities. Local and Exaptriated staff In-house consultant as natural (physical) persons working for and under the instructions and the supervision of the Partner the result of the work belongs to the Partner, the costs of employing the consultant are not significantly different from the personnel costs of employees of the same category working under labour law contract for the beneficiary CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

How to Calculate the Personnel Costs during Project Management
In order to claim funding for completed Project work, partners have to provide the ACP with forms and reports that show how much money was spent carrying out the work and how long it took. For the Financial Reports, you have to declare what the personnel costs were on the project. In order to work them out, you have to know who worked on the project and for how many hours (via timesheets). Partner have to provide their their “Person Month Rates” and actual the number of “Person Months” required to carry out the work. A Person Hourly Rate is the amount of money it costs the Organisation to employ. This figure is then multiplied up by their “Hourly Rate”. This is calculated by taking the monthly gross salary plus benefits plus employer’s costs etc., per employee and dividing this monthly cost by the average max. number of productive (i.e. excluding sickness, courses, vacations, etc). CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

How to Calculate the Personnel Costs during Project Management
You need to demonstrate the maximum productive hours per year used as baseline for person-months calculation. (i.e. Given in the working contract or by law or ministerial decision) The personnel cost for the reporting period is the products of the productive hours on the project multiplied by the calculated hourly rate. Cost of Employment = Salary + Employers Contribution + any accountable benefits (e.g. social charges, such Pension contributions or insurance, etc, etc.). Do not use the net salary !!!! Use thhe money it cost to the employers is far simpler if the calculation is based on annual rather than monthly figures. Where a member of staff works 100% on the project, half the gross salary costs are direct costs charged to the project. If rates declared in the budget are average, the actual rates used for the calculation should not differ from the reported costs. No overtime can be- charged!!! CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Personnel cost calculation
Keep time sheets record the time devoted to the project for all personnel directly carrying out work under it. Time Sheets signed and countersigned by the worker and by the responsible for the project The hours recorded must be detailed per month in order to make easier cost statement reporting The following formula should be used to convert the “hours on project” into person-months: Hours on project X 12 = n° of person months N° of productive hours per year CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Time - sheet As an example, an Excel based system for recording daily and monthly time for staff working on projects. Time is recorded daily in a standard format which allows the information to be automatically transferred to a master summary sheet for the activity report. To be printed in hard copy format to be signed by the staff and project manager/department head. Similar system allows the organizations without sophisticated time recording equipment or programmes to fulfil their obligations and report time and personnel costs accurately. CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Time Sheets CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Human Resources costs documentation and information required
Staff lists working on the project with role and funtions Staff payrolls Letter of appointments Staff contracts – for contracted staff written mention of the CoBaSys project and activities to be carried for the project. Time sheets Salary statements Details of remuneration paid broke dwon into gross salary social security chareges, insurance and net salary. CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Travel and subsistence allowances (T&S)
For staff taking part in the action, and for invited keynote speakers provided they are in line with usual practices and do not exceed the scales approved annually by the Commission. Typologies of expenses: 1) Travels; 2) Subsistence; 3) Accommodation 4) local transport/sundries Mentioned in Annex I and in Annex III of the GC. Prior ACP agreement is required for any other unplanned destination. CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Travel and subsistence allowances (T&S)
Each partner incur its own expenses. The amount is calculated on the actual cost incurred and on the basis of the beneficiary usual practices. N.B. use per-diem if, according to the partners internal rules, it substitutes at all or in part the actual expenses. Reimbusement may not exceeds the max rates set out in GC Annex III, which correspond to the scaled established by the EC: (see reference table July 2009). CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Travel and subsistence allowances (T&S) Calculating the actual costs
This table helps in accouting T&S costs. Details of expenses for each specific trip are listed in excel file. Summary report of each cost item and the related supporting documents for each travel. CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Travels & Subsistence allowances: Particular cases
In case of difference between the cost reported in the financial statement and those resulting in the supporting documents, please provide a justification to such incongruence. Self certified costs or expenditure documents lost [NO]. Expenses on behalf of several persons (subsistence, accommodation) [Yes, but they must be specified the pro-rata and the allocation criteria]. Use of private means of transport [YES, according to the Beneficiary internal rules, demonstrating the route: eg. map] . For fuel & oil expense a summary list of the distance covered, the average consumption of the vehicles used, fuel costs and maintenance costs. CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Travel and subsistence allowances (T&S) documentation and information required Make sure you can justify that the charged costs are necessary for the realisation of the project Keep agenda of meetings, programme of conference/event, minutes of meetings relating to travel and missions. to demonstrate that the cost is directly relevant to the project (it helps to have the event mentioned in the description of the project 'Technical Annex or communications with the ACP). Only ‘active’ participation to conferences is allowed. Keep all supporting documents to costs incurred (ticket + boarding pass, invoices, etc). If necessary copy of the authorisation regarding the mission from the project responsible person Evidence of any authorization to the mission received from the ACP. Photocopy of expenditure of notes detailing the expenditure with in attachments all related travel documents (tickets, boarding passes, receipts / invoices for hotels and restaurants). CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Equipment, Supplies, Service provision. See: GC Annex IV
PROCURAMENT RULES AND PROCEDURES IN THE CONTEXT OF EC EXTERANAL ACTIONS Equipment, Supplies, Service provision. See: GC Annex IV CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Consumables, materials and supplies
The purchase of consumer goods must be necessary and specifically purchased for the execution of activities. Are eligible only if purchased after the start of the project. Only new purchased consumalbes. No accountable material already in the warehouse. Stationery, CDs, toner (are indirect costs). CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Durable equipment Are expense to purchase durable goods specifically needed for the project, these assets cover more exercises and must be recorded in the registered of the fixed assets: acquired after the project begin. The eligible cost is the depreciation. Must be respected the accounting standard of partner to calculate the value of depreciation, The cost also includes the charges for installation and extraordinary maintenance. Special cases Leasing (it could Reporting the cost of fees). potrebbe rendicontare il costo dei canoni). Cost of rental - full invoiced cost is eligible. ICT equipment could be depreciated into 3 years. If purchased Time sheet for real usage for the project. CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Calculation of the depreciation for durable equipment
A/B x C x D A = period of use B = depreciation period max life cycle (in days or months). C = full cost. D = % of usage during and for the project. PC= € purchased at month 5 Example: 31/36 x x 85% = ca 732 € eligible Time sheets: record usage by hours. CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Equipment: documentation and information required
Documents. Orders to suppliers. Test reports acceptances and of installations. Bank accounting and / or bank statements indicating the exact payments. Registration of the asset purchased in the register of fixed assets Details of the calculation for determining the allowable cost for each asset (see formula). Statement issued by the legal authorized financial officer of your organization for demonstrating the clear rationale and references to project activities that justify the utilization rate applied to the project. If the equipment is not physically at the contractor issue a written statement justifying the circumstances. CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Subcontracts/ Procurament
It is an agreement between a third external partner and one specific project partner in order to perform a specific part of the project work. The sub-contractor must be a third party who plays no other part of the job (task) identified and justified in the project (annex I). the subcontractor sells since it provides a service in return for payment! The while you as partner you only recovers costs! He makes profit not you! You can not sub-contract the core work of the project nor the co-ordination or management, just a limited specific task Competivie selection and awarding: best price quality ratio. Not subject to a conflict of interest (CoI) CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Subcontracts/ Procurament
Rules of Procedure: Be planned, specified and justified in Annex I of the project. Annex I and the budget must contain an estimate of these costs. Service provision for a specific task. The sub-contracts are agreed "on business conditions" and "best value for money". Transparency, equal treatment, motivation best value for money. Competitive selection (at least 3 quotations). CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Subcontracts documentation and information required
Copies of contracts with sub-contractors. If he is a professional, signed copy of the CV. Details of expenditure incurred on Excel sheet. Description of service shall indicate the task or work-package of 'Annex technical reference to the contract which the sub-contractor was involved. Copy invoices and receipts and payments eventual. Transport documents and payment (bank accounts, bank statements) and recording in the accounts of them. Any authorization received from the EC. Test results obtained by the sub-contractor (eg report). The invoice MUST contain the reference to the project to facilitate the crossing between the amount claimed and supporting document. CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

SELECTION RULES FOR SERVICE/ SUPPLY CONTRACTS
Rules Applicable To Service Contract Contract under € Service contract worth less than must be awarded by means of a negotiated procedure without pubblicaiton, in which you need to consult at least 3 service providers and negotiate the terms of the contract with one or more of them. Rules applicable to Supply contracts: Supply contracts worth less thn (budget) must be awared by means of negotatiade procedure without publciaiton, consulting at least 3 supplies and negotaite terms of the contrac twith one or more of them For serive or supply of a value of € (budget ) or less, the Beneficiary may place orders on the basis of a single tender. CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Expenditure and monitoring: for reconcilying internal accounting with project financial reporting purposes CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Contigency reserve A contingecency reserve not exceeding 5% of the direct eligible costs is included in the budget of the Action. It can be used only under duly justified circumstances and upon prior written authorisation of the Contracting Authority. GC art. Art of the Special Conditions: CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

VAT dilemma: to be eligible or to be non-eligible?
Identifiable taxes that go to Central government like VAT are classed as being non-eligible to EU Projects. Two important points to note: 1. To be non-eligible the tax must be identifiable (on the invoice/receipt). Thus even where the “tax” is identifiable, its nature must be considered.. non eligible costs is “any identifiable indirect taxes, including VAT or duties” and therefore do not seem to include some “direct taxes (Social Security”, except in so far as they are an expense not directly related to the project (e.g. taxes on profits). if the VAT cannot be recovered (e.g. against “output taxes” for VAT) because of State law, non-registration of the organisation for VAT (e.g. non-profit organisations and in some States Higher education establishments), or the tax is a duty or purchase tax etc. that cannot be offset against other taxes, in this case they can be considered an eligible cost. You need to provide a supporting declaration demonstrating that VAT is a cost that can not be recovered by offsetting, please provide any supporting document and proof of references to law sources. CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Financial Reporting Principle – Currency exchange rates
Where a Partner has incurred an expense in a currency other than the EURO. The expenditure must be converted into euro for financial reporting using the official rate of exchange: Expense for each currency the budget has been implemented during the specific period of reporting (incl the € where the exchange Fx rate into € will be = to 1) The form has a set of 4 colums (number of units, unit costs in FX (foreing currency), total cost in FX, total costs in €) so per each currency a set of four colums will be inserted establish the exchange rates (local currency > €) to be used by having, for the period, the simple arithmetical average of the InfoEuro exchange rate (ie sum the exchange rates of the months of the reporting period and divide the sum by the number of months). Rounding figures reound to the nearest euro cents. infoeuro gives the average monthly rates. The rate is published in problem concerns all other EU partners, and will occur again for each project meeting, This implies flucations profit or lossess non eligible CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Minimal Financial Check-list for Financial Reporting
1. Financial Statement Form (one for each Partner) Is the reporting period correct? Is the exchange rate correct? EC exchange rate of the month after the last month of the reporting period can be found in Is the date of signature after the end of the reporting period? Integrated Financial Statement - Payment Request form (to be filled in by the co-ordinator) CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Minimal Financial Check-list for Financial Reporting
2. Cost Details Form (one for each PARTNER) Personnel Costs Do the wage rates correspond to those declared during project application? NO? Justify Provide evidence that the rates charged are actual. Does the total number of hours correspond to those declared in the Progress Report? Indirect Costs - is the rate you applied correct? Other Costs Are the costs charged indicated in the Project description and budget? If not, did you get prior approval from the Commission or from the competent Managing Authority? Is it evident that they were necessary for the project? Travel and Subsistence Were the trips done within the Reporting Period? Did you have prior approval for travel outside the member or associated States? Does the name of the person and her/his organisation appear? Does the person appear in the Personnel Cost Table? NO? Submit a note clarifying his/her role in the project CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Financial Statement Model: due at M9 and end of Y1

Forecast budget and follow-up for project Y2

Adjustments to the budget
In agreement with the Parties the Coordinator can adjust the budget by transfers between of headings of eligible costs. If the transfer does not exceed 10% of the amount of each heading of estimated eligible costs for which the transfer is intented, provided that this adjustment does not affect implementation of the action. Prior consultation/authorizatioin with the Coordinator. Adjustments up to the 10% of the amount of each chapter (but information of the Contracting Authority in writing) the Article GC Art. I.4.4 and CA Art defines the limits within which you may function without need of official amendment CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Final Payment After the submission of the final report the Contracting Authority has 45 days to approve/reject the documents or to request additional documents (+30 days for integrations) Payment of the balance shall be within 45 days following the approval by the Contracting authority. Outstanding balance after deduction of pre-financing and interest/equivalent benefits yielded by pre-financing from total eligible costs Paid to coordinator who distributes to other partners. CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

EDF Grant calculation: key drivers and principle.
Calculated on the basis of the actual costs incurred by each partner and approved by the ACP Applying the funding percentage of the contract 85% Cost recovery – no income or profit EDF may not exceed the max. Grant contribution laid out in art. 3.2 special condition GC, even if the total actual eligible expenditure exceeds the toal budget set out in GC Annex III. If the eligible costs at the end of the action are less then the estimated budget costs, the EDF contribution is limited to the amount obtained by applying the percentage laid down in the GC to the actual eligible costs approved by the ACP Contracting Authority. A Party which spends less than its allocated share of the Consortium Budget will be funded in accordance with its actual duly justified eligible Researchers months and costs only. A Party that spends more than its allocated share of the Consortium Budget will be funded only in respect of duly justified eligible costs up to an amount not exceeding that share. GC CA CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

EDF Contribution The Community financial contribution will be up to 85% of direct and indirect eligible costs (see GC art 3, point 2 special conditions). EC contribution = {[%(Costs)] ≤ [Costs-Incomes]} ≤ State Aids Incomes are transfer to the beneficiary financed by third parties: In kind resources used by third parties to co-finance the project execution. In cash sponsorship for the project. Income/receipts arising from commercial action taken during the project and generated by the sales of the assets purchased during the contract or by providing services related to the project results. income generated by the project (interest on the prefinancing). Are not income: financial transfer and in kind contribution from third parties if their use is at the discretion by the partner. . CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Incomes The final balance of the Contribution EDF will take into account how much revenues (income) will be realized during the life of the project. If the EC + Contribution income of the project> eligible costs = reduction of Community contribution. Example Eligible costs: 100, EDF contribution: 85, receipts: 15 = no impact. Eligible costs: 100, EDF contribution: 85, receipts: 5 = no impact. Eligible costs: 100, EDF contribution: 85, receipts: 40 = EC contribution will be reduced to 60]. CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

How ACP will pay to UNIMORE the expected max. contribution?
Futher pre-finanincg may only be given if expenditure actually incurred stands at: 70% at least of the previous payment, and 100% of any previous payment CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Transfer of EDF Contribution - 85% of total eligible direct costs
Amount transferred to the coordinator. The coordinator passes the corresponding share to each beneficiary and informs the ACP about it. The pre-financing remains the property of the EC/ACP (also the interest). The coordinator informs the ACP of the amount of any interest yielded by the pre-financing (annually and/or when the payment request is submitted). CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Payment schedule and rationale How UNIMORE will transfer to partners.
An internal financial statement detailing the expenditure incurred. The pre-financing paid has been consumed and commitment of expenditure for future work are taken. All deliverables or contributions to deliverables are provided as planned in Annex I GA. CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

CASH FLOW Total Spent Costs 100% 15% Cofin. From your Own Resources Negative Cash flow 75% EDF Grant Positive cahs flow EDF Grant 50% Retention 10 % 85% EDF Grant EDF grant 25% EDF grant Negative Cash flow months Prefinancing Max 2° 4° 1° 3° 36 END Final payment 38 24 12 CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Financial Reporting – Documenting and justifying costs
The principle of documentation of costs, means, that Beneficiaries must provide all documents and information to prove compliance with the rules of accountability and financial reporting. The documents must be kept in original. Copies in electronic form may be stored in duly justified cases. The documents must be retained for 5 years from the end of the project. Translate invoice content in English. CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

General guidelines for documentation of costs
General guidelines for documentation and justifications of costs. Produce, keep and archive, and provide on demand ddocuments supporting the need for each expenditures specific and necessary only for the project.: Proof of procurament such as tendering documetns, bids and quotations, Proof of committments such as contracts and order forms; Proof of purchase: invoices and receipts Proof of receipt of goods (delivery docs, delivery slips from suppliers, accompanying bill, etc.). Proof of completion of works: For services procurement outsourced, documents demonstrating the provision and the completion of the service (eg detailed reports)., acceptance certificates Proof of payment: documents demonstrating the effective payment (receipts, invoices, quittance, bank account records, debit notices). Provide written explanations from the team leader or the manager of the unit in all cases where the documentation is incomplete to justify any differences between cost reporting and that resulting from the documents. Use a protocol for all project documents. Stamp invoices with Grant Name and GC N° Gather all the documents in one single place. Accounting records – fixed assets regisgers, payroll accounts Archive original copies of the financial statements. CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Contacts with ACP PMU substantial changes to budget allocation or technical annex extension in time travel outside targeted and planned missions transfers exceeding 10% of allocated budget Delays Minor changes changes of addresses and phone numbers Changes of legal entity under-performing partners when contract amendments are necessary Request permission for Inform about Ask advice CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Useful Links Current per diems rates - last update 01/01/2010 Pratical Guide PRAG Templates: CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

Thanks for your kind attention ...
Getting funding is only the beginnig.... Università di Modena e Reggio Emilia. R E S E A R C H O F F I C E NICOLA DORIGO SALAMON P R O J E C T M A N A G E R Via Università 4 I Modena (MO), Italy. (s): Tel: /65.72 Web: CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

REPORT TEMPLATE – INTERIM NARRATIVE REPORT

RISK INDICATORS IN JUSTIFICATION OF COSTS
Inconsistencies in the dates of the documents or illogical sequence of dates. Examples: Offer dated after the award of contract or before the sending of the invitations to tender Offer of the winning tenderer dated before the publication date of the tender or dated significantly later than offers of other tenderers Offers of different candidates participating in the same tenders all having the same date Dates on documents not plausible/consistent with dates on accompanying documentation (e.g. date on the offer not plausible/consistent with the postal date on the envelope; date of a fax not plausible/consistent with the printed date of the fax machine) Unusual similarities in offers of candidates participating in the same tender. Examples: Same wording, sentences and terminology in offers of different tenderers Same layout and format (e.g. font type, font size, margin sizes, indents, paragraph wrapping, etc) in offers of different tenderers Similar letterhead paper or logos Same prices used in offers of different tenderers for a number of subcomponents or line items Identical grammatical, orthographical or typing errors in offers of different tenderers Use of similar stamps and similarities in signatures Financial statement or other information indicating that two tenderers participating in the same tender are related or part of a same group (e.g. where financial statements are provided, the notes to the financial statements may disclose ultimate ownership of the group. Ownership information may also be found in public registers for accounts) Inconsistencies in the selection and award decision process. Examples: Award decisions not plausible / consistent with selection and award criteria Errors in the application of the selection and award criteria A regular supplier of the beneficiary participates as a member of a tender evaluation committee Other elements and examples indicating a risk of privileged relationship with tenderers: A same tenderer (or small group of tenderers) is invited to different tenders with unusual frequency A same tenderer (or small group of tenderers) wins an unusually high proportion of the bids A tenderer is frequently awarded contracts for different types of goods or services The winning tenderer invoices additional goods not foreseen in the offer (e.g. additional spare parts invoiced without clear justification, installation costs invoiced while not foreseen in the offer). Other documentation, issues and examples indicating a risk of irregularities: Use of photocopies instead of original documents Use of pro-forma invoices as supporting documents instead of official invoices Manual changes on original documents (e.g. figures manually changed, figures "tippexed", etc) Use of non-official documents (e.g. letterhead paper not showing certain official and/or compulsory information such as commercial registry number, company tax number, etc.) CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

WP INVOLVEMENT What do we have? What do we want and Where do we want to go? What do we need? Where are we now? How to get there? How to share role and responsibilities? What is the expect tangible result from your own WP? Important notes We need to know all the pieces of the puzzle We need to make the pieces compatible We need to solve the puzzle Make the puzzle not too big! CoBaSys. Kick-off Meeting © Lilongwe, Malawi, 9-10° February 2010

C o B a S y s Nicola Dorigo Salamon

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