1. Financial and legal aspect in the context of proposal preparation Marija Šola, MSc. Project manager University of Belgrade School of Electrical Engineering

2. Useful documents regarding to financial aspect of the project proposals Call Fich Guide for applicants Guide for legal and financial viability checking Guide to Financial Issues relating to ICT PSP Grant Agreements

3. Call Fiche Call identifier: CIP-ICT PSP-2013-7 Date of publication: 22 December 20121 Closure date: 14 May 2013, at 17h00, Brussels local time2 Indicative budget : 125.73 M€ Funding instruments

4. Guide for applicants Guide for Applicants (Pilot A) Guide for Applicants (Pilot B) Guide for Applicants (Thematic Network - TN) Guide for Applicants (Best Practice Network - BPN) Guide for Applicants (Public Procurement of Innovative solutions Pilot - PPI)

5. Guide for legal and financial viability checking This guide is made available for assisting participants who are invited for project negotiation following the evaluation of their proposal ( only for coordinators).( only for coordinators) Content –VERIFICATION OF THE EXISTENCE AND THE LEGAL STATUS OF PARTICIPANTS –VERIFICATION OF THE OPERATIONAL CAPACITY –VERIFICATION OF THE FINANCIAL CAPACITY: IMPLEMENTATION RULES

6. Guide to Financial Issues relating to Grant Agreements This source outline information useful for preparation project proposals and the whole project duration. Following the positive evaluation of a proposal, the coordinator is invited by email to commence negotiations with the Commission for a Grant Agreement. Model Grant Agreement

7. Guide to Financial Issues relating to Grant Agreements This guide is aimed at assisting beneficiaries and coordinators during preparation and implementation projects. Guide to Financial Issues relating to ICT PSP Grant Agreements Content –C–CORE GRANT AGREEMENT –A–ANNEX II – GENERAL CONDITIONS –A–ANNEX 1 - FINANCIAL STATEMENT - PILOT TYPE A AND PILOT TYPE B –A–ANNEX 2 - SUMMARY FINANCIAL REPORT- PILOT TYPE A AND PILOT TYPE B –A–ANNEX 3 - SUMMARY FINANCIAL REPORT – THEMATIC NETWORK –A–ANNEX 4 - REPORT ON THE DISTRIBUTION OF THE EU FINANCIAL CONTRIBUTION

8. Article 5 – Maximum EU financial contribution 5.1 - Types of reimbursement - The ICT PSP grant agreement foresees three types of reimbursement. –Pilots Type A and B The EU financial contribution for these projects is limited to 50% of the eligible costs. For pilot projects selected following Call 2009 and beyond, indirect costs must be charged on the basis of a flat-rate of 30% of the personnel costs –Best Practice Networks The EU contribution for these projects is limited to up to 80% of the eligible direct costs. For best practice networks indirect costs are not eligible for funding. –Thematic Networks Thematic networks are financed on the basis of eligible costs actually incurred ("thematic networks –actual costs") Thematic networks are financed on the basis of lump sums and flat-rates ("thematic network – lump sum")

9. Guide to Financial Issues relating to Grant Agreements Article 5 – Maximum EU financial contribution 5.2 - Indicative breakdown of the budget and the EU financial contribution –Breakdown of the budget has to be included in Annex I (Description of Work) –Transfer of budget between beneficiaries is allowed without an amendment of the grant agreement. –An amendment to the grant agreement will be necessary in all cases when the budget transfer arises from a significant change in Annex I.

10. Guide to Financial Issues relating to Grant Agreements Part C: Financial provisions Article II.20 – Eligible costs – general principles Article II.20(1) – Eligible costs be indicated in the indicative breakdown in Annex I; be necessary for the implementation of the project; be actually incurred by the beneficiary; be identifiable and verifiable comply with the requirements of the applicable tax and social legislation be reasonable and justified be incurred during the duration of the project. Article II.20(2) – Ineligible costs costs of capital employed, provisions for possible future losses or charges, interest owed, exchange losses, provisions for doubtful debts, resources made available to a beneficiary free of charge, value of contributions in kind, unnecessary or ill-considered expenses

11. Guide to Financial Issues relating to Grant Agreements Part C: Financial provisions Article II.20 – Eligible costs – general principles Article II.20(3) – Costs can be charged only in one categories of costs The reimbursement of beneficiaries is based on their eligible direct and indirect costs Costs may only be charged in one category of costs No cost can be taken into account twice, both as a direct and an indirect cost, or in two different cost categories for direct costs

12. Guide to Financial Issues relating to Grant Agreements Part C: Financial provisions Article II.21 – Direct costs The grant agreement foresees three categories of direct costs: personnel, subcontracting and other specific direct costs

13. Guide to Financial Issues relating to Grant Agreements Part C: Financial provisions Article II.21 – Direct costs Article II.21(2) – Personnel costs Any beneficiary may include in its personnel costs "permanent employees", who have permanent working contracts with the beneficiary or "temporary employees", who have temporary working contracts with the beneficiary. Personnel costs should reflect the total remuneration: salaries plus social security charges (holiday pay, pension contribution, health insurance, etc.) and other statutory costs included in the remuneration. Only the costs of the actual hours worked by the persons directly carrying out work under the project may be charged. Working time to be charged must be recorded throughout the duration of the project by any reasonable means (e.g. timesheets). Where it is the usual practice of the beneficiary to consider certain types of personnel costs (such as administrative or support personnel) as indirect costs, the costs of this personnel cannot be charged as direct eligible costs.

14. Guide to Financial Issues relating to Grant Agreements Part C: Financial provisions Article II.21 – Direct costs Article II.21 (2) – Subcontracting The costs of subcontracting are a direct eligible cost. Definition of subcontracting is given in Article II.6 of the grant agreement. This costs have to be specified in DOW

15. Guide to Financial Issues relating to Grant Agreements Part C: Financial provisions Article II.21 – Direct costs Article II.21 (3) – Other direct costs Travel and related subsistence costs The purchase cost of durable equipment - Within this framework, each beneficiary must apply its usual depreciation system for durable equipment. Depreciation is charged in each relevant periodic report. Consumables and supplies

16. Guide to Financial Issues relating to Grant Agreements Part C: Financial provisions Article II.22 – Indirect costs Indirect costs do not apply to Thematic Networks – Lump sum, as they are financed by lump sums and flat-rates based on scale-of-unit costs. For Thematic Networks – actual costs, indirect costs are calculated on a flat-rate basis of 7% of all direct eligible costs, excluding the direct eligible costs for subcontracting. Indirect costs in Best Practice Networks are not eligible for EU funding. The way indirect costs may be charged to grant agreeements for Pilot Type A and Type B projects depend on the Call following which the projects have been selected.

17. Frequently Asked Question How to calculate personnel costs? Personnel costs = Hourly rate * Actual hours worked on project Hourly rate = Total remuneration (salaries plus social security charges) / Productiv hours Productiv hours* = Approximately 210 workable days in a year * 7.5 = 1570 * Guide to Financial Issues relating to Grant Agreements - Page 26

18. Thank you very much for your attention!