1. 1 Eligibility: Simplified costs Lump sums grants Mathieu LEFEBVRE, Laurent SENS, ESF Coordination Unit DG Employment, Social Affairs and Equal Opportunities mathieu.lefebvre@ec.europa.eu laurent.sens@ec.europa.eu mathieu.lefebvre@ec.europa.eu laurent.sens@ec.europa.eu European Union Cohesion Policy “Train the trainers” European Commission seminar for managing and certifying authorities 17 June 2010

2. 2 Main lines of this presentation Objective to build a common understanding on lump sums grants… Reminder: General principles of the lump sums grants & consequences on the financial management Key points for the managing authorities: ideal lump sum?

3. 3 Overview of the lump sums grants Pre-established lump sum in accordance with pre-defined terms of agreement on activities and/or results For all or part of the costs of the operation For small operations or small bodies (capping), but not exclusively Well adapted also when no quantifiable outputs exist to apply unit costs

4. 4 An example of lump sum: new activity for a NGO managing a ‘crêche’ (childcare) 1.Draft detailed budget to calculate ex ante the amount of the lump sum 1.1 Internal personnel – remuneration 32 000 1.2 Int. pers. - transport home/work 600 3.1 Non depreciable consumption goods 500 3.4 Equipment and immovable goods 347 (depreciation) 5.1 Administration, accountancy, management 4 520 5.8 Telephone, post, fax 207 5.9 Taxes and insurance 43 5.17 External accountancy costs 536 2.Lump sum amounting to 38,753 EUR to look after 10 additional children during one year. Ex anteClosure of operation 3.End of implementation: 11 additional children looked after during one year  Condition fulfilled  Payment of the lump sum grant of 38,753 EUR.

5. 5 Key points for managing authorities Restricted to grants (reminder) Correlation between the realised operation and the payments Justification of the final amount of the lump sum Choice of the lump sum Calculation of the lump sum to be granted

6. 6 Correlation between the realised quantities and the payments Basic principle: “Yes or No” payment (not proportional to “quantities” otherwise standard scales of unit cost)  envisage the possibility to have several levels of payments depending on intermediary steps. Shall be transparent ex-ante … via the grant agreement and/or conditions of the call for proposals, …

7. 7 Another example of lump sum: intermediary steps Roma NGO organising (1) a seminar & (2) producing a toolkit on socio economic conditions of the Roma Community. Lump sum of € 45,000 split in 2 projects: €25,000 for the seminar, €20,000 for the toolkit. Closure of the operation: –Seminar organised? Yes €25,000 paid –Toolkit produced? No €0 paid Total: €25,000 paid

8. 8 Justification of the final amount Define precisely in the grant agreement the basis on which payments will be issued and how/under which circumstances it may be reduced  “Yes or No” approach  Supporting documents for justification of the lump sum. When choosing a lump sum, the granting authority should also envisage the procedures & documents necessary to justify it ex post.

9. 9 Choice of the lump sum The choice should reflect the type of operation funded, trying to mitigate external factors Purely outcome based systems may be risky and should not add risk to an existing “Yes or No” system.

10. 10 Calculation of Lump sums grants No method defined by the Regulation but conditions that the methods will have to fulfil. MSs will define the method. 4 conditions to be respected: key issues for sound financial management –Established in advance –Fair –Equitable –Verifiable

11. 11 Calculation of Lump sums grants: a few examples By group of operations / costs: Lump sums already used by national/regional authorities if they satisfy the conditions of the Regulation. At the level of calls for proposals Project specific lump sums: Ex ante estimation of total eligible costs and expected output / outcome

12. 12 Ideal standard scale of unit costs and lump sum? Apart from being fair, equitable and verifiable, they should find a balance between: Clear link with the operation Easy and straightforward way to justify it Ensure the economic balance of the operation and of the beneficiary Lower the risk of creaming the participants or lowering standards …

13. 13  THANK YOU FOR YOUR ATTENTION