1. Administrative, legal and financial aspects of the negotiations
FP7 "Environment (including climate change)" Theme
Call FP7-ENV-2013-WATER-INNO-DEMO: Information session for project coordinators, 24 June 2013
Administrative, legal and financial aspects of the negotiations
Vincent Favrel
European Commission
DG Research & Innovation
Environment Directorate - Administration and Finance

2. Outline Administrative requirements Contribution from third parties
Calculating the budget
Other GA specifications
Conclusions

3. Administrative requirements
Validation of legal entities
Verification of the Financial Viability
Grant Preparation Forms signed

4. Validation of Legal Entities
Required for all legal entities and third parties carrying out part of the work (Special Clause 10)
Registration and validation via the Unique Registration Facility (URF)
DEADLINE to register and submit the documents required for the validation: 28 June 2013

5. Verification of the Financial Viability
Mandatory for coordinators and beneficiaries with EU contribution > €500,000 if they are not public bodies
Participants concerned will be requested to upload supporting documents to the URF
Financial Viability Check Tool available on Cordis for pre- check:
DEADLINE for submitting the documents: 28 June

6. Possible impacts on the project:
Financially weak participants will not be allowed to be coordinator
New administrative coordinator + reallocation of tasks within the consortium to be proposed
Reinforced monitoring of financially weak participants including e.g.: more regular reporting, systematic project reviews, technical/financial audits

7. Grant Preparation forms – GPFs
Only project-specific information can be modified directly by the coordinator and beneficiaries (legal information validated centrally)
After closing the negotiations, the complete set of final GPFs has to be sent to the Commission services with signed Forms A.2.1 to A.2.5 (+ A.2.6 for the coordinator)
If not validated: a duly completed (signed + stamped) Form A.4 (Bank Account) should be submitted as soon as possible.

8. Contribution from third parties
General principles
Three types of third parties
Issues for the negotiation

9. General principles
Under certain conditions: legal entities not part of the consortium may contribute to the project and their costs considered eligible
A beneficiary cannot be third party to another beneficiary
Prior Commission's agreement required
Third party’s contribution (tasks + budget) should be discussed, approved and described in the Description of Work (sections B.2.3 and B.2.4)
The beneficiary retains sole responsibility for the work

10. Three types of third parties
Work carried out under third party's supervision? NO
YES
Third party contribution?
Third party making resources available to the beneficiary
Research tasks
Against reimbursement or free of charge?
Limited part of the work or technical support
Formal relationship between the 3rd party and the beneficiary
e.g. seconded researcher, foundations or spin-off managing administrative tasks of a beneficiary
Service provided at market price
Costs charged without profit
Joint Research Unit, Affiliates, grouping (Sp. Cl. 10)
Subcontractor

11. Issues for the negotiation
All contributions to be identified and properly described in the DoW (sections B.2.3 and B.2.4) and in the GPFs (A.3.1-2)
Subcontracting to remain limited + fair and transparent contract awarding procedures to be followed
Third parties identified under the Special Clause 10 must be validated
Late identification of third parties' contributions is a recurrent factor delaying the grant agreement preparation

12. Calculating the budget
General principles
Allocation of tasks to activity type
Exceptions

13. General principles Eligible costs must be actual and include:
Direct costs: personnel, subcontracting, travel and subsistence, durable equipment, consumables and supplies
Indirect costs calculated according to the Indirect Costs Method validated for each beneficiary
EU contribution calculated for each beneficiary based on its legal status, the funding scheme and the type of activity (50-75% for RTD; 50% for Demonstration and 100% for Coordination and Support activities and "Other activities" including Management)
Certificates on Financial Statements to be provided only when the EU contribution exceeds €375,000.

14. Allocation of tasks to activity type
"Other activities" include:
Dissemination activities: website, presentation of project in events, drafting of scientific publications, costs for updating the plan for use and dissemination of foreground, etc.
Networking activities: e.g. seminars and meetings to network with other projects
Coordination activities: e.g. organisation of meetings or travels for coordination purposes with other projects
Intellectual property activities (e.g. patent applications, royalties paid to third parties)
Studies on the socio-economic impact
Training activities
Promotion of the exploitation of the project's foreground (not the actual commercial exploitation)

15. Allocation of tasks to activity type
Management activities are part of "other activities" and include:
Overall legal, ethical, financial & legal coordination
Certificates on Financial Statements (ONLY if contractually required!)
Financial Audits & Technical Review costs
Implementation of competitive calls or call for tenders for the selection of additional beneficiaries or subcontractor
Maintenance of the Consortium Agreement if mandatory
Administrative tasks for Steering Committee or Advisory board meetings
NOT the scientific coordination (e.g. project meetings)

16. Funding rate per activity type
Description of Work (Annex I):
Tasks and efforts to be allocated to correct activity type
One activity type per Work Package as a general rule
Research (coordination/support) Work Packages + one Work Package for management + one Work Package for dissemination
Costs and EU contribution budgeted in the Grant Preparation Forms (GPF A.3.1) must be consistent with the task allocation in the Description of Work (tables WT1, WT3 and WT7)

17. Exceptions: Non-ICPC Third Countries and International Organisations
Entitled to EU Contribution only if:
Provided for in the Specific Programme or Work Programme
The EU financial contribution to this participant is essential for carrying out the project  it must be duly justified and approved by Commission services
Provision for funding is provided for in a bilateral agreement between Community and the third country.

18. Exceptions: Average personnel costs and flat rates
Costs claimed may not be actual in the following cases:
Average personnel costs if beneficiary's usual accounting practice
Natural persons and SME-Owners without a salary can use a flat rate based on the Marie Curie Fellowships rates
Daily subsistence costs and accommodation for travel needed for the implementation of the project (beneficiaries, external experts/advisor, etc.)
Details on the budget calculation to be provided in the Description of Work (Section B.2.4)

19. Exceptions: Lump sum funding for ICPC
Optional alternative funding form covering all costs
Lump sum is calculated based on the economy of the ICPC and the planned efforts (all person-months considered as research activities)
Description of Work:
lump sum and EU contribution must be correctly calculated
consistency between GPF A.3.1 and the workplan tables WT3, WT6 and WT7

20. Exceptions: Indirect Costs in Coordination and Support Actions
Beneficiaries entitled to use the 60% transitional flat rate: this rate applies only to funding schemes with RTD and demonstration activities
20% standard flat rate applies for CSA
100% EU funding of direct eligible costs BUT indirect costs will be reimbursed up to maximum 7% of the direct eligible costs, excluding subcontracting and the costs of resources made available by third parties which are not used on the premises of the beneficiary.

21. Exceptions: Indirect Costs in Coordination and Support Actions
In GPF A.3.1 (Participant’s budget), participants able to calculate their actual indirect costs should indicate their “indirect costs” based on the rate used in their general accounting practice and not use the 7% corresponding to the “maximum reimbursement indirect costs”
=“real” rate
= 7%

22. Other grant agreement specifications
Consortium agreement
Duration and start date
Reporting periods
Pre-financing
Special clauses

23. Consortium agreement (Art. 1.4)
According to the Call specifications: participants in Collaborative Projects are required to conclude a consortium agreement prior to grant agreement
But recommended in all cases (including CSA) and may be required by the Project Officer
It cannot contradict the terms of the EU Grant Agreement and its annexes
To be concluded by the beneficiaries before the entry into force of the Grant Agreement (i.e signature by the Commission)
A checklist is available on Cordis at:

24. Duration of the project and start date (Article 3)
Deviations from the duration specified in the original proposal must be duly justified
Three options for the start date
1st day of the month following the entry into force of the GA (default option)
Fixed starting date (to be duly justified if before entry into force of the GA)
To be notified within x months following the entry into force of the GA
 Special Clause 6 “Late payment of pre-financing” needed if start date later than 45 days after GA signature

25. Reporting periods
18-month periods to be used as a general rule to reduce the administrative burden
18 months is a maximum duration for a reporting period
If project duration is not a multiple of 18 months:
Preference should be given to shorter periods at the end of the project (e.g instead of )
More balanced periods can also be envisaged for a better monitoring of the project (e.g instead of 18+6)
Reports to be submitted 60 days after the end of a reporting period (periodic reports) or after the end of the project (final report)

26. Pre-financing (Article 6)
One pre-financing to be paid within 30 days after entry into force of the GA
Pre-financing rates:
For projects with 1-2 periods (≤36 months): 60-80% of the total EU contribution.
For projects with more than two periods (>36 months): 160% of estimated average EU funding per reporting period
5% of maximum EU contribution (Art. 5.1 GA) is transferred from the pre-financing to the Guarantee Fund
Signed Form A needed by the Coordinator before transfer of pre-financing can be made to a beneficiary

27. Special Clauses (Article 7) (1/2)
1. PARTICIPATION BY THE JRC
2. INTERNATIONAL ORGANISATIONS - General rule
3. INTERNATIONAL ORGANISATIONS - UNITED NATIONS
4. COORDINATION AND SUPPORT ACTIONS (CSA) with one single beneficiary
5. PROJECT REVIEW (mid-term and/or end of the project)
9. BENEFICIARIES WITH COSTS INCURRED IN RELATION TO THE PROJECT BUT NO EU CONTRIBUTION (e.g from third countries not entitled to EU funding)
10. THIRD PARTIES LINKED TO A BENEFICIARY [JOINT RESEARCH UNITS (UNITÉS MIXTES DE RECHERCHE, UNITÉS PROPRES DE RECHERCHE ETC.) EEIGS/ GROUPINGS/AFFILIATES

28. Special Clauses (Article 7)
13. ETHICAL RULES
15. ETHICAL REVIEW
16. CLINICAL RESEARCH (SPECIFIC TO BIOMEDICAL RESEARCH INVOLVING HUMAN BEINGS)
29. ACCESS RIGHTS TO FOREGROUND FOR POLICY PURPOSES AND TRANSFER OF OWNERSHIP OF FOREGROUND (SPECIFIC TO ENVIRONMENT RESEARCH)
30. DEPARTMENTS/INSTITUTES ETC. WITHIN A LEGAL ENTITY THAT CAN IDENTIFY THEIR REAL INDIRECT COSTS WHERE THE (WHOLE) LEGAL ENTITY CANNOT
39. OPEN ACCESS (SPECIFIC TO “ENVIRONMENT (INCLUDING CLIMATE CHANGE”)

29. Conclusions
Administrative, financial and legal aspects should be addressed at an early stage as they can have an impact on consortium composition, tasks and budget allocation.
In particular, specific attention should be paid to:
Validation and verification of financial viability of legal entities
Completeness and validity of documents submitted to the Commission services (incl. GPF, DoW, legal and financial documents)
Consistency of information provided in GPF and Description of Work

30. More information? Reference documents
Model Grant Agreement (incl. the General Conditions and Special Clauses)
Rules for participation and dissemination of results
Guide to Financial Issues
Rules to ensure consistent verification of participants
Guide to Intellectual Property Rules
Guidance notes on project reporting
Guidance notes on audit certification
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31. Thank you for your attention!