Introduction to FP7: Grant Agreements and Financial Issues University of Bristol 19 May 2011 Emma Carey emma.carey@bbsrc.ac.uk http://www.ukro.ac.uk.

Introduction to FP7: Grant Agreements and Financial Issues University of Bristol 19 May 2011
Emma Carey

UK Research Office Arts and Humanities Research Council
Biotechnology and Biological Sciences Research Council UK Research Office Economic and Social Research Council Engineering and Physical Sciences Research Council Medical Research Council Natural Environment Research Council Science and Technology Facilities Council

UKRO’s Aim UK Research Office
…promotes effective UK participation in EU-funded research, innovation and higher education programmes, and other related activities… UK Research Office Based in Brussels, UKRO: Provides early insight and briefing; Disseminates EU funding opportunities; Provides high quality guidance and training; Exchanges information between the UK and EU

UKRO Services include UK Research Office Website: Information services
with information on programmes, FAQs & guidance Information services updates (& searchable database) Enquiry service Annual visit from your UKRO European Advisor Specialist training courses and information events Annual conference for European officers Meeting room in Brussels Monthly publication - British Council ‘European RTD Insight’ National Contact Points (Marie Curie and ERC) UK Research Office

FP7 Overview, Eligible Countries, and Grant Cycle

Opportunities available
Plus JRC and Euratom Opportunities available Co-operation – collaborative research Capacities Health Research Infrastructures Food, Agriculture and Fisheries, and Biotechnology (FAFB/KBBE) Research for the Benefit Of SMEs Information and Communication Technologies (ICT) FP7 Overview Nanosciences, Nanotechnologies, Materials and new Production Technologies (NMP) Regions of Knowledge Energy Research Potential Environment (including Climate Change) Science in Society Transport Activities of International Co-operation Socio-Economic Sciences and the Humanities (SSH) Coherent Development of Policies Space Security People - Marie Curie Ideas – European Research Council (ERC) Individual Fellowships & Reintegration Grants Starting Independent Researcher Grants Initial Training Networks Industry-Academia Partnerships and Pathways Advanced Investigator Grants International Research Staff Exchange Scheme Support Actions/Calls for Tender Researcher’s Night

Who is eligible for funding?
EU-27 Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Italy, Ireland, Latvia, Lithuania, Luxemburg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, UK Associated Countries (FP7) Albania*, Croatia*, Faroe Islands*, FYR Macedonia*, Iceland*, Israel*, Liechtenstein*, Montenegro*, Norway*, Serbia*, Switzerland, Turkey*, Bosnia and Herzegovina* *except Euratom FP7 Overview

     Eligible for EC funding
Legal entities in EU member states or ‘Associated Countries’ (AC)  International European Interest Organisations  JRC  Legal entities in International Co-operation Partner Countries (ICPC)  International organisations & non-ICPC third countries, only if: - Mentioned in Specific Programme or Work Programme, OR - Essential for carrying out the action, OR - Provided for in a bilateral agreement with the EC Other countries / organisations (but with NO FUNDING from the EU)

International FP7 Overview

International Co-operation: Co-operation and Capacities
Working with third countries (=non EU/AC countries), can either be: - Specified by the Commission Called a Specific International Cooperation Action (SICA) that require at least four participants: two in Member States or Associated Countries, two in ICPC - Suggested by the Commission if so, participation of international organisations and participants from third countries is in addition to normal minimum requirements - Initiated by the researcher International Cooperation Partner Countries (ICPC) are listed in Annex 1 of the Work Programme Western Balkans countries Mediterranean Partner countries Eastern European and Central Asian countries Africa Caribbean Pacific Latin America Asia FP7 Overview 10

Application and Negotiation Process
Consortium Agreement Final Work Programme Activities Application ESR Ranking FP7 Overview Decision (via EC or Co-ordinator) Consortium Budget Consortium Agreement Authorisation Negotiation Grant Agreement Project Account Preparation of Grant Agreement Project Start Staff Recruitment Consortium Agreement 11

FP7 Overview Project Start Project Implementation Start Finish Grant
Agreement Project Account Project Start Negotiation Staff Recruitment Project Implementation FP7 Overview Consortium Agreement Certificate on Financial Statement Commission Pre-financing Financial Reporting Final Reporting Kick off Meeting Scientific Reporting Interim Payment Interim Reporting Start Finish 12

Key documents FP7 Overview Call Fiche (specific) Focus
Work Programme (usually annual) Guide for Applicants (call and funding scheme specific) Submission EPSS Guide Rules on Submission and Evaluation Background Model Grant Agreement, Model Consortium Agreements, Consortium Agreement check list Updatable Financial, Negotiation, IPR, Certification and Reporting Guidelines Rules of Participation FP7 and Specific Programme Text FP7 Overview 13

Introduction to FP7 Finances

Who makes the rules on finances?
EU Financial Regulations EU Court of Auditors Intro to FP7 Finances European Commission UK Rules FP7 Eligible Costs? Normal practice of organisation Department 15

Introduction to FP7 Finances
Co-financing principle Main principle: usually based on reimbursement of direct and indirect costs But sometimes lump sums or flat rates in certain actions No need for hard cash own contribution No profit No commercialisation activities Based on reimbursement of eligible costs Different project types/funding limits/funding rates Intro to FP7 Finances 16

Eligible Costs: principles
Costs are eligible if: Actual Incurred by the beneficiary during the project Determined according to usual accounting and management principles Used solely for project objectives* Consistent with principles of economy, efficiency and effectiveness Recorded in accounts * Replaces the FP6 provision of ‘necessary’ Intro to FP7 Finances 17

Non-eligible Costs Intro to FP7 Finances
Identifiable indirect taxes including VAT Duties: the amount assessed on an imported or (less often) exported item Interest owed Provisions for possible future losses or charges exchange losses, cost related to return on capital costs declared or incurred, or reimbursed in respect of another Community project (avoiding double funding ) debt and debt service charges, excessive or reckless expenditure Intro to FP7 Finances 18

Definitions Intro to FP7 Finances
Direct costs - Direct costs are all those eligible costs which can be attributed directly to the project and are identified by the beneficiary as such, in accordance with its accounting principles and its usual internal rules. Indirect Costs - Indirect costs are all those eligible costs which cannot be identified by the beneficiary as being directly attributed to the project, but which can be identified and justified by its accounting system as being incurred in direct relationship with the eligible direct costs attributed to the project. Intro to FP7 Finances 19

Indirect Costs Intro to FP7 Finances Choice of method used:
has to be made at Institutional level and used in all FP7 areas - except Marie Curie Actions and ERC Method Indirect Cost Rate Who can use this method? Specific Flat Rate 60% Available to universities, non-profit public bodies, secondary and HE establishments, and SMEs which are unable to indentify with certainty their real indirect costs Standard Flat Rate 20% Available to all Real Indirect Costs Rate and basis determined by organisation Simplified Method Available if unable to calculate project level indirect costs. May be certified independently and accepted by Commission Intro to FP7 Finances Special Cases ICPC lump sums - cover direct and indirect costs CSA - maximum of 7% for indirect costs 20

Maximum reimbursement rates*
FP7 – Industry Public Bodies, Universities, SMEs, etc. RTD 50% 75% Demonstration Other** 100% Intro to FP7 Finances ** Co-ordination and Support Actions, Training, Management 21

Reimbursement of Costs: Flat Rate – 60%
Calculate the direct costs: RTD Costs = €100,000 Demonstration Costs = €100,000 Management Costs: = €100,000 Calculate the indirect costs: RTD: €100,000 x 0.6 = €60,000 Demo: €100,000 x 0.6 Mgt: €100,000 x 0.6 Reimbursement as follows: RTD: 75% of (€100,000 + €60,000) = €120,000 Demo: 50% of (€100,000 + €60,000) = €80,000 Mgt: 100% of (€100,000 + €60,000) = €160,000 Note that any subcontract costs must be taken out of the direct costs to calculate the correct indirect costs. Total to be reimbursed = € 360,000 Intro to FP7 Finances 22

ICPC Lump Sum Option Intro to FP7 Finances
ICPC partners can elect to use lump sum payments for a whole project (instead of reimbursement of eligible costs) Applies for the duration of the Grant Agreement (contract) Method can vary between projects – so should consider options for each individual one Lump sums include all project costs (personnel, travel, equipment, overheads, etc.) Calculated on basis of full-time researchers per year Requirement to keep evidence of time spent on project Rates vary according to country income Maximum reimbursement rates still apply Intro to FP7 Finances

ICPC Lump Sums – rates Intro to FP7 Finances
Economy of the ICPC country EC contribution per researcher per year Low income €8,000 Lower middle income €9,800 Upper middle income €20,700 Intro to FP7 Finances List of ICPC economies can be found in: Guide to Financial Issues

Example of funding in a CSA:
DIRECT COSTS EC fund 100% of direct costs Direct costs (including € for subcontracting) € INDIRECT COSTS EC funding for indirect costs is maximum (not flat rate) of 7% of the direct costs (excluding subcontracting and also excluding the costs of resources made available by third parties which are not used on the premises of the beneficiary ) Direct costs excluding subcontracting = € – € = € 180, Therefore maximum total indirect costs = 7% of € = € € TOTAL EC FUNDING Direct Costs (incl. for the subcontract) + Indirect Costs € Intro to FP7 Finances 25

Participant Portal

Participant Portal – Basics
Offers external stakeholders (participants, LEARs, co-ordinators, reviewers) a unique entry point in handling grant-related actions, based on a single sign-on (ECAS) role-based authorization (Identity and access management – IAM) Common umbrella for the different FP7 IT tools Result: personalised services on the Portal, personalised access to Legal entity registration Financial Capacity Check Negotiation + Amendments Financial and scientific reporting Homogeneity and better service integration for grant management Participant Portal 27

Unique Registration Facility (URF)
Why introduce the URF? In FP6 legal data required at both submission and negotiation stages In FP6 most organisations validated for legal existence and status for every contract Participant Identification Code (PIC) One Legal Entity = One PIC (Used for FP7 & CIP) New participants could register from 1 May 2008 Legal Entity Appointed Representative (LEAR) One Legal Entity = One LEAR Only LEAR can request modification of the admin and financial data of your organisation in URF (will not be able to do it in NEF anymore) Further information Helpdesk – Feedback – Unique Registration Facility (URF)

Participant Portal Participant Portal
Currently, the Participant Portal is the gateway to access: The Unique Registration Facility (URF); 2) The FP7 Negotiation Facility NEF (for co-ordinators); 3) The new FP7 documentation search functionality 4) The SESAM tool for technical reporting 5) The FORCE tool for financial reporting 6) The “Manage Roles” facility 7) *NEW* Information and Documentation on FP7 Calls Participant Portal 29

Participant Portal: Identity and Access Management (IAM) - ECAS
Delegation and assignment of roles by the consortium itself: By default the contact person from the proposal is provisioned as Co-ordinator Contact in the Portal. Co-ordinator contact changes are managed from NEF by the Commission Project Officer (under ‘Portal coordinator contact person’). The Co-ordinator Contact can set/change the Participant Contact roles in the Portal (without further interference by the Commission). Further representatives for the entity can be named by the Co-ordinator and Participant Contacts for a given entity. Participant Portal 30

Project Stages

4) Project Start/Implementation
Project Stages 1) Proposal Preparation 2) Evaluation Project Stages 3) Negotiation 4) Project Start/Implementation 5) Project Reporting 6) Project Closure 7) Post-Project Tasks 32

1) Proposal Preparation
Contractual and Financial Aspects Which Funding Scheme? Planning budget Share of costs amongst consortium Often strict EC contribution limit imposed Planning project resources – equipment, subcontracting Lump sums for ICPC countries Discussion of consortium agreement Management Structure, IPR and Procedures Project Stage – Proposal Prep 33

Project Stage – Proposal Prep
FP7 Project Types FP7 Co-operation and Capacities have 5 main project types: Collaborative Projects S/M Scale Collaborative Projects (Small CP/ Strep) Large Scale Collaborative Projects (Large CP/ IP) Networks of Excellence (NOE) Coordination and Support Actions (CSA) Co-ordinating (CSA-CA) Supporting (CSA-SA) These may also have extra conditions: Specific International Co-operation Actions (SICA) Research for the benefit of specific groups (SMEs/CSOs) Public Private Partnerships (PPPs) ERA-NETs (and ERA-NET Plus Research Infrastructures projects (CP+CSA combined) Other project types: FP7 Ideas - European Research Council (ERC) FP7 People - Marie Curie Actions Project Stage – Proposal Prep 34

Co-ordination and Support Actions Socio-Economic Sciences
FP7 Funding Schemes Co-operation Theme 2011 Collaborative Projects (S/M) (L) Co-ordination and Support Actions Health Max €6 million (eligibility criteria) Must be from €6 to 12 million Limits depend on call (eligibility criteria) ICT No firm limits Socio-Economic Sciences Max €2.7 million Min €6.5 with min 7 partners No firm limits but call specific FP7 – Funding Schemes

Types of Activity: Co-operation and Capacities
Refer to guidance for each project (e.g. Guide for Applicants) 1) RTD Activities: directly aimed at creating new knowledge, new technology, and products, including scientific coordination. 2) Demonstration activities: designed to prove the viability of new technologies that offer a potential economic advantage, but which cannot be commercialised directly (e.g. testing of products such as prototypes). 3) ‘Other’ activities: dissemination, networking, co-ordination, intellectual property, socio-economic impact studies, feasibility studies for commercial exploitation 4) Management activities: overall legal, ethical, admin. and financial management, pass on EC funds, keep project records and accounts, review project reports and tasks, monitor beneficiaries, project manager, competitive calls 5) Training activities: costs of providing training, including salary costs, but not the salary costs of those being trained Project Stage – Proposal Prep 36

Management Costs Management of the consortium activities includes: maintenance of the consortium agreement, if it is obligatory, the overall legal, ethical, financial and administrative management including [for each of the beneficiaries] obtaining the certificates on the financial statements or on the methodology, implementation of competitive calls by the consortium for the participation of new beneficiaries, where required by Annex I obtaining any financial security such as bank guarantees, when requested by the Commission, any other management activities foreseen by the annexes, except coordination of research and technological development activities. Management tasks cannot be subcontracted Project Stage – Proposal Prep 37

Group Exercise: Cost Category Activity
Exercise: allocate costs from the list below into the types of activity for a collaborative project Principal lecturer – 20% time Technician – 100% time PhD student – 100% time PhD fees Replacement teaching time Cost of project manager IT support staff Admin support New microscope (depreciation over 10 years) Office PC 1000 test tubes Prototyping of new drug Miscellaneous consumables Paper IT network charge VAT Airport tax Flight to Rome for project management meeting Eligible? If so, which category? RTD / Demo / Other / Management / Training Direct or Indirect? Flight to Dublin for research work package meeting Flight to USA for research conference, 1st class Carbon-neutral charge when booking a flight Admission to Windsor Castle for members of project steering committee Dinner for project steering committee Publishing and dissemination of project material to public Certificate on financial statements Certificate on methodology Website design Subcontracting of blood sample analysis Consultant time in writing original proposal Exchange rate loss as Euros no longer cover pound expenditure Feasibility study Transportation and set-up costs for equipment Internal invoices Project Stage – Proposal Prep 38

Costs you can be reimbursed for (…but which you might not expect)
Financial responsibility up to each participant: Choice of staff resources (can incl. PhD Students) Patents – filing and searches Employing a project manager Dissemination (website, publication fees…) Travel outside Europe Equipment (under certain conditions) Studies on socio-economic impact Feasibility studies for spin-offs Project Stage – Proposal Prep 39

Tips for Budgeting in Proposals
Discuss budget early Costs of activities discussed first Share of costs amongst consortium Procedure for changing this share if necessary Keep in mind limits imposed by Commission Researchers and Administrations should both be involved Guidelines on Finances, Negotiation and Reporting… Previous FP6/FP7 experience of managing, budgeting and reporting is useful background Project Stage – Proposal Prep 40

Proposal format Part A (Online forms A1, A2, A3) Basic info – call details, title, summary, partners, budget Participant Identify Code (PIC) - a unique organisational identifier Part B (Upload as pdf) Cover Page Table of Contents Main part of the proposal Science and Technology Implementation (Management, participants/consortium, appropriateness of allocation of resources: staff, equipment…) Impact Ethical Issues Consideration of gender issues Project Stage – Proposal Prep 41

EPSS A3 Forms – Collaborative Project
Establishing Projects

Project Stage – Evaluation
Feedback from Evaluators (ESR): Budget is considered as one aspect of the evaluation ‘Appropriateness of the allocation and justification of the resources to be committed (budget, staff, equipment)’ In addition ESR provides comments on all aspects of evaluation criteria (S&T Quality, Implementation and Impact) including: Soundness of concept, and quality of objectives Activities Management structures/procedures Structure and quality of consortium IPR and dissemination plan Project Stage – Evaluation 43

Project Stage – Negotiation
Based on ESR Interpretation of project officer Negotiation of key aspects: activities, budget, partnership, reporting requirements Building towards consensus on the grant agreement Simultaneous finalisation of Consortium Agreement NEF system available in Participant Portal Legal and financial viability check Signature Project Stage – Negotiation 44

Participant Portal – NEF
STRUCTURE OF THE DESCRIPTION OF WORK (DoW) The Description of Work, which is Annex I to the Grant Agreement, contains the details of the implementation of the project with regard to the work packages, deliverables, milestones, resources and costs of the beneficiaries – organised in a table format - as well as a detailed narrative description of the work. It consists of two parts: Part A of Annex I contains: - the cover page, - the project summary, - the list of participants and the budget breakdown - 8 Workplan Tables, which provide details on the implementation of the project Part B of Annex I is based on information from Part B of the proposal. However, during the negotiation stage several sections of the original proposal need to be updated and the Consortium may be requested to shorten certain sections of the proposal and elaborate on others. Project Stage – Negotiation 45

Participant Portal – NEF
Use the online tool NEF (NEgotiation Facility) to prepare DoW: Only two “work tables” (list of WP and WP description) need to be edited, all other tables are generated automatically and adapted/re-calculated when the original tables are edited. Information on deliverables is transferred into the reporting tool and does not need to be re-entered at the time of reporting. Part A of the Description of Work = Work tables. Part B of the DoW = narrative part, based on part B of the proposal: uploaded into NEF by the co-ordinator as a Word/pdf document (max. 20MB) during negotiations NEF will create out of the two files the Description of Work (Annex I) Project Stage – Negotiation 46

The negotiation process (1)
The following forms need to be submitted to the EC Project Officer: 1) First drafts of Annex I to the Grant Agreement 2) Grant Agreement Preparation Forms (GPFs) via the NEF tool 3) Supporting documents that verify legal existence and status of beneficiaries (if you have no PIC) 4) Financial documents for financial viability checking (request is more than €500,000, done only once for each institution throughout FP7) Project Stage – Negotiation 47

The negotiation process (2)
EC Project Officer will indicate changes or improvements to the submitted forms Consortium responds and negotiates with EC Project Officer until agreement is reached Meetings between Consortium and EC may be required Process should be concluded before deadline for completion of negotiations Project Stage – Negotiation 48

Important points to remember
An invitation to start negotiation does not, under any circumstance, guarantee the funding of a project or the offer of a grant agreement. The funding of the proposal may depend on the Consortium’s acceptance of changes requested by the Commission services in the Negotiation Mandate. The maximum amount of funding for a project is fixed in the negotiation mandate. EC can terminate negotiations or request a change in consortium if it doubts the financial and human resources available to carry out the proposed work. If negotiations are not completed within the given time limit, the EC may terminate negotiations. Further information: FP7 Negotiation Guidance notes NEF User’s Guide for Co-ordinators and Participants Project Stage – Negotiation 49

Project Stakeholders

Partner 1 (Co-ordinator)
Project Stakeholders European Commission Grant Agreement Project Stakeholders Partner 1 (Co-ordinator) Consortium Agreement License Partner 2 Partner 3 Partner 4 Sub-contract License Third Parties 51

Project Officer Project Stakeholders
Appointed to a project at start of grant agreement negotiation stage Essentially the EC’s representative Responsible for project negotiations towards final grant agreement and start Responsible for monitoring, interim reporting, and processing of finances Responsible for signing off project Productive, open, regular contact with project officer is vital, via the co-ordinator Project Stakeholders 52

Co-ordinator Project Stakeholders
Essentially, one beneficiary who has extra responsibility (but not necessarily extra rights) Must pass on pre-financing (as agreed by beneficiaries in consortium agreement) Responsible for reporting to the Commission (finances, payments, task progress…) Must pass on information regarding performance obligations of project to beneficiaries These co-ordination tasks cannot be subcontracted, nor carried out by other beneficiaries Must report on interest gained from EC pre-financing in their account Management activities are not merely co-ordination tasks Good contact and honesty with co-ordinator is also very important Project Stakeholders 53

Participants/Beneficiaries
Organisations signed up to the Grant Agreement Each beneficiary has consortium and individual responsibilities Beneficiaries should normally have the capacity to do the project (as they signed up to it) Must be seen to be working together Responsible for managing own performance and finances – including declaring receipts Responsible for performance of any subcontractors they are attached to Researchers involved in projects must make own arrangements/fit in with policy requirements to work together with other project stakeholders at their own organisation Project Stakeholders 54

Organisations which are not signed up to the grant agreement
Third Parties Organisations which are not signed up to the grant agreement Make some contribution to the project Must be identified in project negotiations, or raised with Project Officer subsequently Subcontractors are one type of third party Project Stakeholders 55

Subcontractors Project Stakeholders
Type of 3rd Party, not a beneficiary, but does specialised work on behalf of a beneficiary Subcontractor charges price for the work, and paid 100% Not directly supervised, but beneficiary takes responsibility, and owns IP generated Beneficiary pays subcontractor either using EC contribution or own funds Not for core parts of project, management or research Not for subcontracting research between participants Must be identified in Annex I, and ‘best bid’ accepted Project Stakeholders 56

FP7 Grant Agreements

FP7 Grant Agreement FP7 Agreements Section Name Purpose
Core Adapted to each individual project, confirming beneficiaries, start date, duration, budget and reporting periods for example Annex I Description of Work Covers technical side of project – developed from proposal Annex II General Conditions The same for all projects under Co-operation/Capacities, modified for ERC and Marie Curie (which both offer Single or Multi-beneficiary versions) Annex III Extra conditions for certain areas (e.g. SME Actions, Infrastructures) Annex IV Form A Used to accede to agreement Annex V Form B Used to add new beneficiaries Annex VI Form C Financial Statement Annex VII Form D (New in FP7) Terms of reference of the certificate on the financial statements (known as the Audit Certificate in FP6) Form E (New in FP7) Terms of reference for the certificate on the methodology (new to FP7) - for beneficiaries who want to get average personnel costs certified and/or for those who are unable to calculate real indirect costs and want to have a simplified method of calculating these certified FP7 Agreements

Core Grant Agreement FP7 Agreements
Signature of EC and Co-ordinator (accession within 45 days of participants) Names and legal representatives of participants Duration and start of project Reporting periods EC total contribution to project (broken down in Annex I) Amount of pre-financing (and Guarantee Fund) Special Clauses (to be negotiated) Applicable law FP7 Agreements 59

Grant Agreement – Annex II
Generic to all projects – (separate versions for ERC and MC): Definitions Roles of co-ordinator and participants (beneficiaries) Periodic reporting Use of certificates (financial statements, methodology) Payment modalities Subcontracting Confidentiality Financial provisions (costs, funding limits, receipts, pre-financing, interest yielded) Financial and technical audits Intellectual Property Rights – use and dissemination FP7 Agreements 60

Consortium Agreement FP7 Agreements
Mandatory unless specified in call for proposals Internal organisation of the consortium, including: Financial arrangements e.g. pre-financing Settlement of disputes e.g. non-performance Additional Intellectual Property arrangements e.g. licensing Liability and confidentiality Commission Consortium Agreement checklist established NOT signed by the Commission Usually drafted and disseminated by Co-ordinator Models such as DESCA and IPCA can be adapted FP7 Agreements 61

Access Rights FP7 FP7 Agreements
Please note that the rules for Research for the Benefit of SME/CSO projects are also different 62

IPR Conditions - Background
Information which is held by beneficiaries prior to their accession to the grant agreement, as well as copyrights or other intellectual property rights pertaining to such information, the application for which has been filed before their accession to the agreement, and which is needed for carrying out the project or for using foreground. Key issues: Confidentiality agreement before project negotiations? Beneficiaries define background needed Where appropriate exclude certain items Access rights must be requested, and intended purpose made clear Exclusive licences possible Does this make for a workable project? FP7 Agreements 63

IPR Conditions - Foreground
The results, including information, whether or not they can be protected, which are generated under the project. Such results include rights related to copyright; design rights; patent rights; plant variety rights; or similar forms of protection. Key issues: Confidentiality – all material for up to five years after project end Ownership – party generating owns, joint ownership conditions apply Transfer of ownership – 45 day notice required Protection – commercially exploitable IP must be protected Use – participants must use or ensure that foreground is used Dissemination – as swiftly as possible, 45 day notice required EC support must be acknowledged FP7 Agreements 64

Project Stage – Project Start
4a) Project Start After signature of grant agreement Agreed start date Kick-off meeting Initial allocation of pre-financing done by Co-ordinator (as per Consortium Agreement terms) Start of work packages Plan towards first review Some flexibility with resources once the project is up and running… Project Stage – Project Start 65

Project Start – Pre-financing
Single pre-financing paid at the start of the project (Article 6 of the ECGA) 10% of EC contribution is always retained by the Commission 5% for Guarantee Fund, also part of pre-financing and immediately subtracted Paid to Co-ordinator once min. number of participants have acceded and only paid to those that have acceded For projects of 1 to 2 reporting periods, pre-financing could be 60-80% of total EC contribution For projects > 2 reporting period, prefinancing = 160% of the average funding per period Circumstances of project can influence this e.g. loading of expenditure Pre-financing remains the property of the Commission until the last payment Project Stage – Project Start 66

Pre-financing – Worked Example
Example: 3 yr project with €3,000,000 EC contribution with annual reporting Average EC contribution per reporting period: €3,000,000 / 3yrs = €1,000,000 Pre-financing (usually 160% of €1,000,000) mentioned in Article 6= €1,600,000 Contribution to Guarantee Fund at 5% of total EC Contribution: 3,000,000 x 5% = €150,000 Net amount transferred to Co-ordinator: (€1,600,000 – €150,000) = €1,450,000 Project Stage – Project Start 67

Interest on Pre-Financing
GA II.6.5 ‘The bank account mentioned in Article 5.3 shall allow that the Community financial contribution and related interest are identified. Otherwise, the accounting methods of the beneficiaries or intermediaries must make it possible to identify the Community financial contribution and the interest or other benefits yielded’ What’s in the Guidelines? Recommended that bank account of co-ordinator is used exclusively for project funds Co-ordinator must be able to identify payments made/received at any moment This includes identifying interest generated on pre-financing held by co-ordinator Such interest is viewed as a receipt to be offset/recovered Participants do not have to identify interest on the pre-financing they receive Security research projects may insist on a separate bank account/ sub account Project Stage – Project Start 68

Guarantee Fund New in FP7 to lower barriers to SME involvement A kind of insurance contract to guarantee the financial losses of the projects 5% of EC contribution transferred by the Commission to the Guarantee Fund Returned to the beneficiaries via the Co-ordinator at the moment of the final payment, at the end of the project; A maximum deduction of 1% of the EC contribution may be applied to some beneficiaries (not public bodies) see Article II.20 of GA. Project Stage – Project Start 69

Payments Example continued: 3 yr project (with annual reporting) with total €3,000,000 EC contribution Maximum payments during project = 85% of total = (as 5% retained for Guarantee Fund and 10% retained by EC) Project Stage – Project Start Payment Amount received Cumulative amount received to date Pre- financing As per pervious example 1st reporting period EC contribution accepted € 1st Interim payment € 2nd reporting period 2nd Interim payment € (due to retention – since can not go above cumulative total of ) Final report EC contribution accepted € Final payment € (= the total EC contribution accepted over the whole project minus the cumulative amount received so far) 70

4b) Project Implementation
Recruitment of staff Pre-financing into partners’ project accounts Work towards first (internal) review? Commission review (reporting) every 12 to 18 months Monitoring of activities Project Stage – Implementation 71

Moving finances/cost headings
Issues during project New joiners Leavers Changing institution Bankruptcy Contract amendments Non-performance Moving finances/cost headings Project Stage – Implementation 72

Project Stage – Project Reporting
Simplification: 18 month reporting periods, less paperwork Consortium submits a periodic report within 60 days after the end of each reporting period Overview of progress of project, achievements and milestones as per Annex I, including publishable summary Explanation of the use of resources Financial Statement from each beneficiary Summary Financial Report Commission to evaluate reports and disburse payments within 105 days unless time limit or payment suspended Project Stage – Project Reporting 73

Scientific Reporting Online tool for preparation and submission of periodic and final scientific FP7 reports, project technical reviews by external experts (SESAM) Deployed under the Participant Portal Use has become mandatory from 1 March 2010 Quick guides available at: Project Stage – Project Reporting 74

Periodic Reporting Project Stage – Project Reporting 75

Cost Claims – Form C Form C – models available per funding scheme Report by partner Per activity type (e.g. RTD, Demo, Mgt, Other) Show total and max EC contribution Show receipts Third party completes attached form (only under Clause 10) Project Stage – Project Reporting 76

FORCE: Online Form C DG Research use FORCE – web-based tool to edit, save, print and submit FP6 and FP7 FORM C: Prepare FORM C online for each project and each partner Print Form C Submit electronically Form C Signed paper version to be sent afterwards Correction of Form C in case of errors/refusal of EC Access via ‘Participant Portal’ Project Stage – Project Reporting 77

FORCE: Online Form C - Printed
Project Stage – Project Reporting 78

FP7 Periodic Report: Process from a Participants point of view
Project Stage – Project Reporting 79

Reporting Costs for CSA
Co-ordination and Support Actions Indirect costs are ‘up to 7%’ of direct costs (minus subcontracting) How to report costs: Flat-rate (60%) No RTD costs here, so the default is the 20% flat-rate – enter 20% (minus subcontracting) and can claim back 7% in EC contribution row Indirect costs are not audited or certified due to being a ‘flat-rate’ Actual Indirect Costs (simplified or real) Declare actual indirect costs in form and claim total up to 7% back in EC contribution row Indirect costs are auditable and included in certificate on financial statements (if required) Project Stage – Project Reporting 80

EC Guidance for Time-sheets (or equivalent)
Can only claim for hours worked Kept by ALL staff working on the project Full name of beneficiary as indicated in the GA; full name of the employee directly contributing to RTD project; title of RTD project as indicated in the GA; project account number should be indicated; time period concerned (for instance on daily, weekly, monthly basis) according to the beneficiary's normal practice; amount of hours claimed on the RTD project. All hours claimed must be able to be verified in a reliable manner; full name and a signature of a supervisor (person in charge of the project). The complete time recording system should enable reconciliation of total hours in cases where personnel work on several projects during the same period Can also be useful for equipment – if it is within normal practice Project Stage – Project Reporting

Example Timesheet – Guide to FP7 Financial Issues
Project Stage – Project Reporting

Certificates on Financial Statements
Provides independent opinion on the claims made by the Form C Either external auditor or if public body can be done by ‘competent public officer’ Annex VII Form D – provides terms of reference for auditors and procedures to be performed by auditor Looks at Personnel Costs, Subcontracting, Other Direct costs (equipment, consumables, travel), indirect costs (possible methods?), use of exchange rates, receipts and interest on pre-financing (Co-ordinator only) Project Stage – Project Reporting 83

Required for each period when a beneficiary is claiming more than €375,000 (cumulatively) Not required otherwise, even at end of project Exception of two year projects – not required if over €375,000 in first year, only at end Eligible cost as ‘management activity’ (100%) Suggest meeting with auditors for FP7 projects early to discuss requirements and costs Project Stage – Project Reporting 84

Project Stage – Project Reporting (1) Cumulative EC contribution = EUR 190,000 + EUR 205,000 = EUR 395,000. A CFS has to be provided because cumulative amount > 375,000. After the submission of CFS, the calculation of the cumulative amount re-starts from 0 for period 3. It is important to remember that the CFS has to cover the eligible costs for the two periods (EUR 380,000 + EUR 410,000 = EUR 790,000), and not just the EC contribution (2) Cumulative EC contribution = EUR 250,000 +EUR 175,000 = EUR 425,000. A CFS has to be provided because the cumulative amount > 375,000. After the submission of the CFS, the calculation of the cumulative amount re-starts from 0 for period 5. The CFS has to cover the eligible costs for the periods 3 and 4 (EUR 500,000 + EUR 350,000 = EUR 850,000) (3) EC contribution for period 5 = EUR 350,000 < EUR therefore no need for CFS for the last reporting period 85

Exchange Rates and Reporting
FP7 Model Grant Agreement Annex II: Costs shall be reported in EUR. Beneficiaries with accounts in currencies other than EUR shall report in EUR on the basis of the exchange rate that would have applied either: - on the date that the actual costs were incurred or - on the basis of the rate applicable on the first day of the month following the end of the reporting period. Hints and tips Follow your institutional accounting practices; When budgeting, set conservative exchange rate to avoid overspend; Establish mechanisms in consortium agreement to deal with underspend (e.g. transfer funds to other project partners); Inform project officer when dealing with over/underspend. Project Stage – Project Reporting 86

Grant Agreement Amendments
Modification to GA = Amendment Amendment Guide for FP7 Examples: Adding beneficiaries Change co-ordinator Partial transfer rights and obligations Project title, acronym, duration of project Modification of reporting periods Change of bank details Add/remove special clause Modification of annex 1 Model letters – all requests in writing ‘Entry into Force’ Don’t need amendment for budget transfers Project Stage - Reporting

Project Stage – Project Closure
Final report within 60 days after the end of the project Periodic report Final publishable summary of results, conclusions and socio-economic impact as well as plan for use and dissemination of foreground Report covering wider societal implications of the project Final Payment Co-ordinator to distribute final payment Report to EC on the distribution of the payment to the consortium Submitted 30 days after the final payment Project Stage – Project Closure 88

Project Stage – Post-Project Tasks
Distribution of final payment Consortium agreement still active? Commission audit Technical audit Remember! ‘The beneficiaries shall keep the originals or, in exceptional cases, duly authenticated copies – including electronic copies - of all documents relating to the grant agreement for up to five years from the end of the project. These shall be made available to the Commission where requested during any audit under the grant agreement.’ Project Stage – Post-Project Tasks 89

Financial Audits and Controls
Commission audit (or by appointed representatives) Can look at finance, systems in place and accounting and management aspects Requires originals/duly authenticated copies (incl electronic) of data upon request (including third party) Commission sends provisional report to beneficiary Respond to Commission report within one month Final report issued by Commission within two months of the deadline for comments Project Stage – Post-Project Tasks 90

Project Stage – Post-Project Tasks
Technical Audits By Commission or appointed S&T experts Scientific, technological aspects and others relating to the effective execution of the project An assessment of fulfilment of project work plan, relevance of work, resources used, management procedures, beneficiaries contributions, impact, ethics audit Commission send provisional report to beneficiary Respond to review within one month Commission to inform co-ordinator of decision Guidance notes and template on “Project Technical Reviews in FP7 Involving Independent Reviewer(s)” Project Stage – Post-Project Tasks 91

Further information and links

Sources of Information
UKRO Website: UKRO FP7 Grant Agreements and Finances page: Includes Key Reference Documents: Rules of Participation Grant Agreements Consortium Agreements UKRO information services: Use advanced search function on the UKRO Information Services! FP7 – Further information 93

Important links to the Participant Portal
Login to access the Participant Portal services: Creation of an ECAS account to log into the Participant Portal: Technical helpdesk of the Participant Portal: FP7 – Further information 94

FP7 – Further information
EPSS Helpdesk Tel: IPR helpdesk Website European Commission FP7 Ethics Website FP7 – Further information 95

Introduction to FP7: Grant Agreements and Financial Issues University of Bristol 19 May 2011 Emma Carey emma.carey@bbsrc.ac.uk http://www.ukro.ac.uk.

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Introduction to FP7: Grant Agreements and Financial Issues University of Bristol 19 May 2011 Emma Carey emma.carey@bbsrc.ac.uk http://www.ukro.ac.uk.

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Presentation on theme: "Introduction to FP7: Grant Agreements and Financial Issues University of Bristol 19 May 2011 Emma Carey emma.carey@bbsrc.ac.uk http://www.ukro.ac.uk."— Presentation transcript:

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