1. Characteristics of projects in EU research programmes
Kai Tullius
DG Information Society and Media
Unit E2
04/01/2006

2. Outline of Presentation
Project Selection Process
Contract overview
Overview of reporting & financing
Reporting
Review
Costs / Receipts
Payment
Audit certificates
Amendments
Collective Responsibility
Conclusions

3. Project Selection Process
Procedure
Call for proposals
Submission
Evaluation by external experts
Hearing for IPs
Negotiation

4. Contract Overview Contract – between whom?
Between EC and co-ordinator (the legal representative of the consortium)
All contractors must accede within time limit specified in contract (30 days) from the date of the signature
More than before, the co-ordinator is the legal link between the EC and the consortium
04/01/2006

5. Contract Overview
Consortium agreement in place, EC contract takes precedence in case of conflicts
Should cover issues:
Decision-making process and dispute settling
IPR
Payment modalities between partners
Global Risk Management

6. Adjusted pre-financing Adjusted pre-financing Initial pre-financing
Contract Overview
Months
Payment & Reporting
Schedule (IP)
Reporting
Accepted costs
Reporting
Detailed work plan
Accepted costs
Adjusted pre-financing
Reporting
Accepted costs
Detailed work plan
Adjusted pre-financing
Detailed work plan
Initial pre-financing

7. Reporting 45 days after end of each reporting period
Annual Activity Report
Annual Management Report
Report on the distribution between contractors of the Community financial contribution
Any additional report defined in Annexes
Updated Implementation Plan (IP only)
Financial Statements (Form C) and Audit Certificates (if applicable)
Final period:
all +
Final Activity Report covering the full duration
Final management report covering the full duration.
Any additional report defined in annexes.
Report on the final financial distribution (60 days after receiving it)

8. Annual Review
Review is a contractual requirement to be carried out after each reporting period - successful outcome required for payment
Review is based on:
Reports and Deliverables (technical objectives timely achieved with adequate quality?)
Resources deployed appropriate?
Annual Management Report
proposal for update to Implementation Plan (IP)

9. Costs / Receipts Cost basis FC/FCF/AC Direct/indirect Costs
AC participants cannot charge costs of permanent staff (except for management)
Direct/indirect Costs
Eligible/ineligible
eligible = economic and necessary
No reckless expenditure
no sub-contracting unless specified in Technical Annex, except for minor tasks (services, brochures, audit certificates)
ineligible costs include bank interest, losses etc.
in general, follow your internal rules and practices
must be auditable -> document carefully
Receipts have to be declared

10. Payment Pre-financing max. 80% of estimated cost of first 18 months
Next payment within 45 days of approval of annual activity reports
Payment for a period normally combined with pre-financing for next period
Usual provisions concerning suspension of payment terms due to missing/incomplete information etc.
Receipts reduce grant and must be declared in cost claims.

11. Audit Certificates Audit certificates (depending on contract)
Free to chose auditor (no need for tendering…)
Independent, external auditor, qualified to national regulations – exception: “Competent public officer” for public bodies
Certify that costs incurred during period meet the conditions required by the contract, should expressly state amounts verified
make early contract with your external auditor
establish with him how to submit cost claims/certificates 45 days after end of period - continuous assessment process?
Payments supported by audit certificates are final
except in case of fraud, over-charging etc.
Cost of audit certificates is an eligible cost (if economic!)

12. Amendments Amendments: no tacit approval
To be submitted by registered mail by an AUTHORISED signatory of the COORDINATOR with all supporting documents
Request must adhere strictly to template (amendment guidelines on Cordis)
May include 1 or many modifications
Binary processing: everything acceptable or everything rejected

13. Collective Responsibility
1. Technical Collective Responsibility
Each contractor obliged to take all necessary measures to attain the objectives of the project and to carry out the work incumbent on the defaulting contractor
2. Financial Collective Responsibility
Should either the contract or participation of a contractor be terminated and any contractor does not honour the reimbursement of the amount due by that contractor, the Consortium is responsible to reimburse that amount to the Commission
Amount to be recovered to be allocated between the remaining contractors in accordance with their pro rata share in the project

14. Conclusion you must deliver!! FP6 very different to FP5!
Increased responsibility for consortium
all aspects - management, budget, technical work…...
Expenditure/accounting according to your own, normal rules and practices
no more permission requests - but you may have to justify your actions/expenditure later!
Bigger projects, greater opportunity, greater risk
Greater visibility and higher expectations
Expect more scrutiny from tax-payer and politicians
More than ever, need strong management in all areas, clear focus, effective implementation!
you must deliver!!

15. Conclusion
New financial regulations require strict compliance with contract and deadlines
EC must also demonstrate that it has implemented contracts correctly and ensure proper use of public money
especially important for annual activity reports, cost claims, audit certificates
avoid delays with review and approval of programme of work/amendment for following period