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Kick Off meeting: VET-Business Partnerships on Work-based learning and Apprenticeships

5 February 2019

Financial Management

JEHAN LAROCHE

Unit A1

Introduction

• Tips and tricks

• Series of questions

• Main issues covered

• Question time

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TIPS AND TRICKS

• Responsibility of the coordinator; • Clarify internal practices for paying/reimbursing costs which are in line with your

usual existing practices; • Collect and control on a regular basis all financial supporting documents directly

related to the implementation of the project; (Timsheets, invoices,…) • Keep an eye on how your global budget evolves; (Amendment?) • the Agency must be informed of most changes to the budget in good time; • Use the tab "comments" to clarify any budgetary issue; • Use proper bookkeeping (double entry, project's account(s) easily identifiable,…); • The project Coordinator is responsible of the audit report of factual findings for

the project; • Your financial officer can help you.

GENERAL RULES

1. At application stage the project coordinator has signed a declaration in which she/he declares that all the partners have the operational capacity to carry out the proposed actions/work programme. What does this mean exactly ?

By signing the declaration of honours the legal representative declares that each partner has the operational capacity this means that they have sufficient staff, (number of employees and qualifications), premises (facilities and equipment) to carry out the tasks allocated to them, based on what is presented in the proposal and within the eligibility rules.

2. What are the general rules of eligibility of the costs? "Eligible costs" of the action are costs actually incurred by the beneficiary which meet the following criteria: a) Incurred within the eligibility period with the exception of costs relating to the request for payment of the balance and the corresponding supporting documents ; b) Indicated in the estimated budget of the action; c) In connection with the action and necessary for its implementation;

d) Identifiable and verifiable; e) Comply with the requirements of applicable tax and social legislation; and f) Reasonable, justified, and comply with the principle of sound financial management, in particular regarding economy and efficiency.

STAFF 3. What are the costs that can be considered under the "definition of staff" and on what conditions? • Statutory staff, having either a permanent or a temporary employment contract

with the beneficiary; • Temporary staff, recruited through a specialised external Agency; • Other types of contracts as far as the national labour law assimilates them to

staff; • Under certain conditions secondment and in-house consulting; • Any other specific situation will be treated on a case by case approach.

4. How do you calculate the annual productive working days? On the basis of 8 hours/day this makes a total of 1.736 hours in a year

1 Total number of days in a year (2019) 365

2 Less weekends 104

3 Less public holidays 20

4 Less annual leave actually taken 24

Total number of productive days in the year

(1-2-3-4)

217

5. How do you calculate the daily/hourly staff cost? Examples: Annual gross salary + social charges 48.000 € ---------------------------------------------------- Total actual annual productive working days or hours (1.736 hours) This results is an hourly rate of 27,65€ and a daily rate of 221,20€ in the above example where one works 8 hours a day.

6. How important is it to remain in line with the application budget more specifically in terms of working days and categories for staff costs? The budget for staff working days has been assessed by the agency together with external experts at application stage in term of staff categories and number of days/work as adequate to carry out the project. Any significant deviation will be questioned at final report assessment stage and could be reduce impacting thereof the amount of the final grant.

7. How do you register time worked on the project? Minimum information: • Project reference number; • Name of the employee; • Should be kept on a weekly or monthly basis or show the day, month and year; • The number of time units (hours/days) worked on the project and on other

projects/activities; • Total number of time units (days or hours) worked; • Tasks performed for the project; • Date and signature of the employee and of the project manager.

8. Can your remuneration policy be different for staff working on the project from staff working on "normal tasks within your organisation"? NO !!! The rates at which staff is charged to the project must correspond to the Beneficiary's normal policy on remuneration (documented by a salary grid, long-term work contracts etc…).

9. Costs shall be supported by evidence. Provide examples of supporting documents to keep at the disposal of the Agency, more specifically for staff costs. • Existing employment contract with the organisation or the seconding entity; • Monthly salary slips or a copy of payroll issued by HR Department; • Timesheets or equivalent system ; • Calculation of the hourly or daily rate requested together with the official

documents on which this calculation is based; • Proofs of payment; • If secondment : secondment letter/agreement; • In case of specific contract linked to the project, specific indication of tasks,

reference to the project, to the duration of the contract and the hourly/daily rate should be indicated.

• The usual accounting documents such as invoices, and proofs of payments

TRAVEL & SUBSISTENCE 10. How do you calculate the number of days for which subsistence costs can be granted? The number of days of a meeting in turn needs to be adequate and if your meetings are unrealistically long this will be assessed by the agency assessing the final reports and if the length of some meetings appear to be too long the costs could be reduced accordingly.

11. Should you pay subsistence costs on the basis of "actual costs spent" or "per diem"? Reimbursement must be based on the existing internal rules of the beneficiary organisations and/or on the basis of actual costs (reimbursement of receipts). So if, for example in your organisation there are internal rules for missions you have to ensure that these rules are respected. If there are no existing rules prior to the beginning of the project you have to work on the basis of actual costs, keeping in mind the general rules of eligibility…

EQUIPMENT

12. What are the different elements to take into account for reporting the costs of equipment?

SUBCONTRACTING 13. For contract of a value lower than 60 000 €, how many competitive quotes must the beneficiary obtain? • For contracts lower than €60.000, the internal rules, the national rules. • For contracts over €60.000, the coordinator and, where applicable, the other

beneficiaries must obtain competitive tenders from at least 5 potential contractors, unless national rules prescribe differently.

• In any case you have to ensure absence of conflict of interest whatever the amount of the subcontract.

OTHERS

14. Do procurement rules apply to anything that is purchased? • Yes, anything purchased has to follow internal and national rules as well as

procurement rules.

15. Should you declare costs of lunch/dinners of meetings in the category "other costs" ? • Catering costs for a meeting or other event (where those being provided for are

not members of the Contractor or Partner organisations) can be declared under this budget category.

• In case a partner pays for a common meal, the relevant participant's per diem must be reduced accordingly (and the financial report should explicitly indicate such cases). Under no circumstances should the relevant amounts be charged to the project twice.

INDIRECT COSTS 16. What is an operational grant and what is the consequence if one of the partners receives an operational grant during the eligibility period of your project? • Operating grants finance the operating expenditure of a body pursuing an aim of

general European interest or an objective that forms part of an Union policy;

• Indirect costs shall not be eligible under an action grant awarded to a beneficiary who already receives an operating grant from the Commission during the period in question.

QUESTION OF TRANSFERS BETWEEN BUDGET CATEGORIES 17. What is the maximum amount that can be transferred between budget headings without a request for amendment, in the example below?

Heading A Staff costs 300.000 € Max. 30.000 €

Heading B

Travel &

Subsistence

50.000 €

Max. 20.000 € Equipment 0 €

Subcontracting 60.000 €

Other costs 90.000 €

Indirect costs 35.000 € NA

AUDIT REPORT 18. What is the audit report of factual findings? • The auditors will certify all costs linked to the project after the end of the project; • Use the mandatory template; • Ensure that all supporting documents are made available to the auditor. The

agency will not accept costs listed by the auditor as not supported by adequate documentation;

• The report of factual findings has to be sent at final report stage only together with its annexes (the engagement letter,...);

• Keep and maintain exhaustive and appropriate financial documentation about the project for a period of 5 years after final payment/recovery.

Thank you for your attention !