8IV. Project Cost Management Project ManagementIV. Project Cost ManagementAs part of your application you have completedplanning, estimating and budgeting processes.During the implementation of your project you willneed to control the budget that you have proposedintensively.
10For the purposes of simplicity in our grant Project ManagementVI. Project Quality ManagementFor the purposes of simplicity in our grantprojects, project managers shall monitor their project indicators through the course of their project.Your major source for performance indicators should be your logframe.
12VII. Project Human Resources Management Project ManagementVII. Project Human Resources ManagementHuman Resource Planning determines project roles, responsibilities and reportingrelationships. It is important that each project member is aware of his/her role and dutieswithin the project.
13collect, distribute, store information. Project ManagementVIII. Communications ManagementProper Project Communication Management ensures your project to timely; generate,collect, distribute, store information.
14activities within the Project Management Process Groups. IX. Project Integration ManagementThe Project Integration Management includes processes and activities needed to identify,define, combine, unify and coordinate various processes and project managementactivities within the Project Management Process Groups.
16ContractsGrant Contract – signed between the Contracting Authority and the BeneficiaryContract should also be in line with legal provisions of Labour Code, Occupational Safety and Health Legislation, Tax and Accountancy Laws and any other relevant legislation in beneficiary country16
17Major Parts of Grant Contract The Special Conditions (project duration, total project cost and the grant, reporting and payment schedule)Annex I of Grant Contract: “Description of the action” -Significant modifications of activities may need an Addendum to the contract.Annex II of Grant Contract: “General Conditions” specify the general obligations and financial provisions under the contract
18Major Parts of Grant Contracts Annex II : General ConditionsGeneral conditions specify the general obligations and financial provisions under the contract.ReportingLiability of PartiesVisibility of ProjectsOwnership of the EquipmentsEvaluation/MonitoringContract AmmendmentsEligible costsExtension, Suspension, Termination of ProjectsPayment MethodsAnd other legal issues18
19Major Parts of Grant Contracts Annex III of Grant Contract: “Budget for the action” Budget is a breakdown of all eligible project related costs.Annex IV of Grant Contract: “Contract Award Procedures” -awarding contracts for services, supplies and works to external organisationsAnnex V of Grant Contract: This annex contains standard templates that you have to use: Legal Entity Sheet, Request for Payment, Financial Identification FormAnnex VI of Grant Contract: This annex contains standard forms for Interim, Final narrative and Financial Report.Annex VII of Grant Contract: Model of Expenditure Verification Report - it is also obligatory to obtain an Independent Audit Report before requesting the final payment.
20Modifying Grant Contracts ModificationMinor ChangesMajor Changes20
21Modification Minor Changes changes in activities or budget that do not affect the basic purpose of the projecttransfer between budget headings involving a variation of 15% or lessChanges of address or phone numberChanges of bank accountChange of project manager or key expertsIncrease or decrease in numbers of equipment or unit prices without changes of the budget amount allocated for that budget itemModel/brand name change of the equipment as a new technologyFollowing rules always apply:The modifications must not have the purpose or the effect of making such changes to the contract as would call into question the grant award decision or be contrary to the equal treatment of applicants.Grant contracts can only be modified within the lifetime of the contract, modifications cannot be made retroactively.The maximum amount of the grant may not be increased.Any modification extending the performance period of the contract must be such that implementation and final payments can be completed before the expiry of the financing decision. As the case may be the implementation has to be completed before the expiry of the implementation period of the financing agreement, under which the initial grant contract was financed.Requests for contract modifications to grant contracts must be made (by one contracting party to the other) allowing an adequate time-limit for the addendum to be signed before the modifications are intended to enter into force.Please keep in mind that major modifications need formal Addendums to be processed which may take long periods.A copy of an addendum request is attached as supporting document 202 to this guide.Contract change should be firstly communicated to the relevant Monitoring Expert. The Contracting Authority takes a decision after receiving the consent from the relevant Monitoring Expert.21
22Modification Major Changes Extension or early closing of the contract Significant changes in activities affecting the basic purpose and indicators of the project.Transfer amongst budget headings outside the limits of minor modification (15%)Addition or cancellation of a new budget item in the BudgetChange of project Partners (addition or replacement)Changes in your organisation’s name or legal statusAdding new item or deducting an existing item from the budgetFollowing rules always apply:The modifications must not have the purpose or the effect of making such changes to the contract as would call into question the grant award decision or be contrary to the equal treatment of applicants.Grant contracts can only be modified within the lifetime of the contract, modifications cannot be made retroactively.The maximum amount of the grant may not be increased.Any modification extending the performance period of the contract must be such that implementation and final payments can be completed before the expiry of the financing decision. As the case may be the implementation has to be completed before the expiry of the implementation period of the financing agreement, under which the initial grant contract was financed.Requests for contract modifications to grant contracts must be made (by one contracting party to the other) allowing an adequate time-limit for the addendum to be signed before the modifications are intended to enter into force.Please keep in mind that major modifications need formal Addendums to be processed which may take long periods.A copy of an addendum request is attached as supporting document 202 to this guide.Contract change should be firstly communicated to the relevant Monitoring Expert. The Contracting Authority takes a decision after receiving the consent from the relevant Monitoring Expert.22
23Modification Process for Minor Change Within 10 days of implementation of the change2 hard copies to Support Unit(a copy of request should be filed by Grant Beneficiary also)23
24Modification Process for Minor Change Beneficiary makes the change Inform the SUSU sends the notification letter to Contracting Authority (CFCU) (with cheklist)Contracting Authority (CFCU) might not accept that the change is minor - this means that costs made might not get approved.24
25Deadlines for notification ModificationDeadlines for notificationMinor changeHow to notifyDeadlineSmall change of activities with no budgetary implicationsBi-monthly reportsand Interim or Final ReportNext reportSmall changes of activities with budgetary implicationsNotifications letter10 days before the implementation of the changeChanges of addressChanges of bank accountChange of expert (including all persons under Human Resources)Change of auditorNotifications letter or Interim/Final Report25
26Modification Process for Major Change Preparing an addendum: Prepare a request for addendum, following theStandard Form-2 in English and in Turkish in three hardcopies.3 hard copies to Support Unit(a copy of request should be filed by Grant Beneficiary also)26
27ModificationThe request for Addendum should contain a detailed description of the requested modification and the reason for modifications.27
28ModificationAny addendum modifying the budget must include a replacement budget showing how the full budget breakdown of the initial contract has been modified by this addendum (and any previous addenda)28
29Modification Budget headings Original Budget Budget of Addendum 1 Human resourcesTravelEquipment and SuppliesLocal office/Action costsOther costs, servicesOthersSubtotal direct eligible costs of the ActionTotal direct eligible costs of theActionTotal eligible costs29
30Modification Submission of the addendum request: 30 days before the implementationof the changeand at least 1 month before the Contract expiry date.30
31Modification CFCU prepares and sends the Addendum to the Grantee signature.The addendum takes effect on the date of the later signature.Remember that Grantees cannot implement thechange before the signature of the Addendum.31
32Eligible Costs General principles: Costs have to be included in the project budget (Annex III of the contract)The activities for which Grantee requests payment should correspond to those described in Annex I of the contractAll costs must be real costs, i.e. actually incurred by the Beneficiary (and partners, if applicable)Cost must be recorded in the accounts or tax documents of the Beneficiary (or his partners, if applicable)
33Eligible Costs Human Resources : Payment of salaries and fees for staff contracted by the Beneficiary and for partners’ staff.Sub-contracted services (payment to companies under the service contracts tendered following the EC procedures) cannot be claimed under this budget heading.The cost of staff assigned must include actual salaries plus social security charges and other remuneration-related costs.
34Eligible Costs Human Resources : Salaries and costs must not exceed those normally borne by the Beneficiary or his partners.Per diems cover all meal, hotel expenses and short distance travel (e.g. within the city).Per diems should be in-line with the budget and should not be higher than the EU max. daily rates(http://europa.eu.int/comm/europeaid/perdiem/liste1_en.htm).Per diems are calculated on overnight basis.
35Eligible Costs 2. Travel International travel sub-heading Local transportation subheadingAll flight tickets and boarding pass should be kept by the beneficiary.The taxes of the tickets will not be eligible costs. If the tickets includes tax (KDV), the cost without taxes will be accepted as eligible.
363. Equipment and supplies Eligible Costs3. Equipment and suppliesAll expenditure is VAT free provided relevant certificates and approvals are obtainedEC Procurement RulesThe rule on eligibility of nationalityEligible Origin of Goods
37Eligible Costs4. Local office / project costsThe cost cannot be used for covering cost related to main offices of the Beneficiary (and partners). Cost is eligible only if a new office/ training facilities are opened for the needs of the implementation of project activities.5 and 6. OthersAmounts budgeted under headings 5 & 6 may be used to cover costs for the items specified in the budget and fully sub-contracted services: publications, translation, events, etc.
38Eligible Costs 10. Administrative costs A percentage of the final approved total direct eligible costs may be claimed as indirect costs to cover the administrative overheads incurred by the Beneficiary. The costs are eligible provided that:They do not exceed the rate stated in the budget;They do not include costs assigned to another heading of the budget;Their eligibility should conform to items 14, 16 and 17 of the general conditions
39Exchange RatesWhere actual expenditure is incurred and paid in TRY (or any other currency other than Euro) the conversion into Euro of the real costs borne in other currencies shall be done at the rates published in InforEuro. (www.etcf.org.tr)Expenditures are recommended to be made in Euro to the possible extent. This minimises the risks incurred by currency fluctuations and eases financial reporting. Turkish legislation allows spending in Euro and Euro invoices. In case an invoice is prepared in Euro, the corresponding TRY value should also be indicated. Legally, accounting transactions and documents have to be in TRY. However, documents can also be prepared in foreign currency as long as the corresponding TRY value is indicated
40Ineligible CostsExamples:Purchase of second hand equipment
41VAT exemptionVAT exemption is applicable on all eligible costs associated with grant project.A VAT Exemption Certificate is necessary when making project related procurement based on the planned budget submitted as part of the grant contract.
43PROJECT DOCUMENTATION AND ACCOUNTANCY Financial documentation ExpenditureDocumentsAll expenditureProof of purchase such as invoices and receiptsProof of payment such as bank statements, debit notices, proof of settlement by the contractorProof of delivery of services such as approved reports, proof of attending seminars, conferences and training courses (including relevant documentation and material obtained, list of attendees, certificates), etcThe Beneficiary Accounting records (computerised or manual) such as general ledger, sub ledgers and payroll accounts, fixed assets registers and other relevant accounting information
44PROJECT DOCUMENTATION AND ACCOUNTANCY Financial documentation Human ResourcesStaff and payroll records/contracts, salary statements, monthly timesheets, of all project staffTravelPublic transport: Transport tickets (including boarding passes in case of travel by air)Rented transport: Invoice from supplier and summary list of distance coveredCar: For fuel and oil expenses, a summary list of the distance covered, the average fuel consumption of the vehicles used, fuel costs.
45PROJECT DOCUMENTATION AND ACCOUNTANCY Financial documentation ExpenditureDocumentsSubcontracted supplies, services or worksProof of procurement procedures such as tendering documents, bids from tenderers and evaluation reportsProof of commitments such as contracts and order formsProof of receipt of goods such as delivery slips from suppliersProof of completion of works, such as acceptance certificatesCertificate of origin or a Certificate of Locally Manufactured Production with a Sworn Statement
46PROJECT DOCUMENTATION AND ACCOUNTANCY Technical documentation Examples of project documents for some of the project activities.Surveys /studiesReportsPublicationsCopies of publicationsSeminars, conferences, working meetingsProgrammeList of presentations / conference reportsHandoutsList of participantsList of speakersMinutes (if applicable)Press clippingsFeed-back questionnaires (if applicable)
47PROJECT DOCUMENTATION AND ACCOUNTANCY Technical documentationTrainingA detailed description of the training – training modules, training hours per subject, methods, etc.Training scheduleList of participants /Attendance sheetsList of trainers / lecturersFeed-back questionnairesTraining evaluation reportExpertsTimesheetsCopies of the outputsActivities reports
48PROJECT DOCUMENTATION AND ACCOUNTANCY Accounting requirementsAppropriate accounting and double-entry book-keeping systemAccounts and expenditure should beeasily identifiable and verifiable separate accounts for the actiona simple accounts ledger together with other useful templates.
49PROJECT DOCUMENTATION AND ACCOUNTANCY Accounting requirementsThe Financial Report should be properly and easily reconciled to the Grant Beneficiaries accounting and bookkeeping system.
51REPORTSBi-monthly reportInterim narrative report.Final narrative and financial report.Expenditure verification report of a European Community Financed Grant Contract (audit report).
52Bİ-MONTHLY PROGRESS REPORT Consist of 5 main sections:Basic contract dataBudget achievements during reporting periodRealisation of activitiesProcurement activitiesNeeds of beneficiary
53Bİ-MONTHLY PROGRESS REPORT Submission of the bi-monthly progress report:Until the fifth day of following month1 electronic version and 1 hard copy to SU
54REPORTS INTERIM AND FINAL NARRATIVE Narrative section: Project activities/management, participation of partners, relations with key stakeholders, visibility, progress on performance indicators, assessment of the project and notifications about minor contract changes and addendaTemplates for the interim and final narrative reports are provided in
55REPORTS INTERIM AND FINAL NARRATIVE You should submit the final version of the Interimand final report(s) in 4 hard copies an 4 CD to:2 copies to SU1 copy to ECD1 copy for the Grant BeneficiarySU will send one copy of the reports to the CFCU with a cover letter and the checklist
56REPORTS INTERIM AND FINAL NARRATIVE Submission of the interim report:within 5 days of completion of the half of the project durationSubmission of the final report:within 3 months of completion of the project duration
57REPORT INTERIM FINANCIAL REPORT-REQUIRED DOCUMENTS For the interim financial reportAccounts ledger itemising expenditures must be annexed.
58REPORTS FINAL NARRATIVE REPORT-REQUIRED DOCUMENTS “Beneficiary Decleration” signed by the authorised person(s) of the chamberMinor /major change requests and CFCU’s approval lettersCopy of the printed materialsContracts (supply/service), invitation letters, tender offers (applications), letters to unsuccessful tenderers, evaluation reportsVisibility material samples“Performance Indicators Documents”Training/conference/visit programmes, reports, participants list (Annex3)For the external experts -Training/conference reports, presentations, surveysCopy of the “transfer of title of equipments”( Ekipman Mülkiyet Devri Belgesinin kopyası)(Before the approval of the notariate) (Annex 4)
59REPORT FINAL FINANCIAL-REQUIRED DOCUMENTS The bank letter indicating that no interest rate has been applied to the project account and account summary that indicates that the account covers only the project implementation period.“Project Expenditure Summary” and “Account Ledger” (Annex 2)
60REPORT FINAL FINANCIAL-REQUIRED DOCUMENTS Human Resources Expenditure List (Annex-2, work page with number 1 )For every project expert:Work contract or Letter of nomination by the chamber / Copy of the Permission letterMonthly Time sheetCVPayrollsDocuments explaining the cost of social security charges and other remuneration-related costs are being retained.
61REPORT FINAL FINANCIAL-REQUIRED DOCUMENTS Travel and perdiems Expenditure List (Annex 2, work page with number 2)Transport tickets (including boarding passes in case of travel by air)Related with per diems: Hotel invoices or the copy of the documents that indicates the round trip datesThe copy of the document indicating that the perdiems payments are made
62REPORT FINAL FINANCIAL-REQUIRED DOCUMENTS Equipment Expenditures List(Annex2, work page with number 3)For every equipment in a separate dossier:Invoice or the document that indicates the payment ismade to buy the equipment.For the purchase of the equipments bigger than 5000Euro: Certificate of the OriginFor the purchase of the equipments smaller than 5000Euro : Contract, market survey document
63REPORT FINAL FINANCIAL-REQUIRED DOCUMENTS Local Office Expenditure List (Annex 2, work page with the number 4)Copies of the invoices of vehicle costs, office rent, consumables - office supplies, other services (tel/fax, electricity/heating, maintenance), contract or payment document
64REPORT FINAL FINANCIAL-REQUIRED DOCUMENTS Other costs, services expenditure list: (Annex 2, work page with number 5)Expenditures documents (invoices and an explanation letter indicating the aim of the contract) for .PublicationsSurveysAudit expendituresTranslation serviceFinancial services (expenditures for the bank guarantees etc)Conference exp.Visibility activities
65REPORT FINAL FINANCIAL-REQUIRED DOCUMENTS Copy of Expenditure Verification Report byEternal Auditor
66EXPENDITURE VERIFİCATION REPORT Known as the audit reportConsist of:TOR for an Expenditure Verification of a EC financed Grant Contract for External Actions- should be completed by the (Grant) Beneficiary and be agreed with the AuditorAnnex 1: Information about the Subject of the Expenditure VerificationAnnex 2: Scope of Work – Procedures to be performed2. Report of Factual Findings for an Expenditure Verification of an EC financed Grant Contract for External Actions-should be provided by the AuditorThe template can be found at
67REPORTING REQUIREMENTS- PAYMENT PROCEDURES Pre-financing: %80 of the sum is paid within 45 days of receipt of the Request for Payment (by CFCU)Final payment: CFCU’s 45 day approval procedure of the final narrative and financial reports, Expenditure Verification Report and the Request for Payment
69PROCUREMENTParticipation in the procurement procedures is open on equal terms to all legal persons who are established in (a) a Member State of the European Community, (b) in an official candidate country as recognised by the European Community, (c) in a Member State of the European Economic Area, or (d) any country other than those referred in a), b) and c), where reciprocal access to their external assistance has been established.The nationality of the company to which the service or the work is contracted can be certified with a certificate issued by the Chamber of Commerce in that country
70PROCUREMENT SERVİCE CONTRACTS Tender ( smaller or equal to Euro)Tender (between Euro)
71PROCUREMENT SERVICE CONTRACTS Tender ( smaller or equal to Euro)Recommended to proceed with three offer.Sign a contract with very clear references on which products you expect from the service. (template is inDefine at which time the service will be delivered and who will be the supervisor inside your organization accepting the quality of the services and authorizing the payments.
72PROCUREMENT SUPPLY CONTRACTS Tender smaller than EuroProceed with three offer.Use a simple contract (template is in
73PROCUREMENT SUPPLY CONTRACTS TECHNICAL SPECIFICATIONS AND REQUIREMENTSContract Name: _________________Contract no.: _________________Name of Item: _________________Quantity:TECHNICAL DETAİLSGeneral DescriptionTechnical Specifications3. Accessories and Attachments4. Tools or Other Required Items5. Maintenance Requirements6. Spare Parts Required7. Manuals8. Required Performance9. Warranty Specifications
74Procurement Plan by GBs Contract Number:Name of the tender 1Dates for Tender 1Name of the tender 2Dates for Tender 2Preparation of tender dossierExpected date for sending the tender dossier to the SU for checkingPublication of forecast (if applicable)Publication of procurement noticeSubmission deadlineOpening session and EvaluationExpected date for sending the Evaluation Report to the SU for checkingContract signatureExpected delivery dateProvisional acceptance date
75PROCUREMENT PLAN BY GBs Submission of procurement plan:within 2 months of the project start( )2 hard copy to SU
76PROCUREMENT VISIBILITY Reports should contain the disclaimer:“The content of this publication is the sole responsibility of (name of author/contractor/contracting authority) and can in no way be taken to reflect the views of the EU”Bu belgenin içeriğinden sadece “Faydalanıcının Adı” sorumludur ve bu içerik herhangi bir şekilde Avrupa Birliği’nin görüş ve tutumunu yansıtmaz”Broşür örnek
77PROCUREMENT DISPLAY PANNEL This project is funded by EUTITLE OF THE PROJECTThe programme is implemented under the coordination of TOBB and EUROCHAMBRESEU Chambers LogoTurkish Chambers LogoThis project is implemented by Turkish chambers (name) and EU Chambers namesContracting Authority
79MONITORING FRAMEWORK In Procedures, Compliance with procurement rules Eligibility of costsCompliance with publicity and visibility rulesDocumentation and ArchivingBookkeeping and AccountancyReporting obligationsContract ModificationsNon-Compliances and IrregularitiesIn Progress,Financial and Technical progressPerformance indicatorsand Problems And Needs of the beneficiaries
80MONITORING FRAMEWORK Monitoring visits will be conducted by SU using Monitoring tools: Monitoring visits, bi-monthly declaration reports and interim and final reports.Monitoring visits will be conducted by SU usingchecklists, monitoring reports etc.SU experts will review and give advice ondraft notification letters, addendum requests,interim and final reports.Monitoring and/or Spot visits by CFCU
81MONITORING RESPONSİBİLİTİES OF GBs To make key staff of project be present.To provide up-to-date informationTo define performance indicatorsTo define needsTo clarify major dates in procurementTo inform SU in case of unavailabilityTo review and sign the visit report (regular monitoring visits)To archive all documents for 7 years
82MONITORING The following information will be monitored by SU • Project Management• Adequacy of Documentation• Progress of Activities• Risks and Problems• Project Indicators• Procurement Matters and Records• Visibility of the Project
83MONITORING MONİTORİNG TIME TABLE TimingRisk AssesmentVisit15 January-5 February2nd Monitoring VisitAfter half of the project duration3nd Monitoring VisitBefore the end of the project duration
84Thank you for your kind attention. Burcu Atılgan burcu@tobb. org Thank you for your kind attention.... Burcu Atılgan Tel: