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This Vademecum has been prepared by Commission Unit SG-C-2 – Measures for theCitizen.
Particular grant schemes are managed by the Commission Directorate-Generalsconcerned. For details consult *UDQWV�DQG�/RDQV�IURP�WKH�(XURSHDQ�8QLRQ on EUROPAat http://europa.eu.int/comm/sg/aides/en/cover.htm
Any general comments can be sent to SG-C-2, N-9 2/1, Wetstraat 200 rue de la Loi,B-1049 Brussels
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Grants account for an important part of Community expenditure. They give theCommunity a flexible instrument adapted to its objectives in the different areas ofCommunity policies. But the Community also depends on the active participation andinvolvement of civil society at large in pursuing its policy objectives.
Outside institutions sometimes perform functions of general European interest. Heregrants can offer an efficient method of promoting EU policy aims. Altogether, suchinstitutions and organisations committed to the project of European construction have animportant role to play.
Managing public funds always carries a special responsibility. Not only must thetaxpayer’s money be spent in a judicious and economic way, but spending decisions mustalso obey sound rules which are transparent to the public and to potential beneficiaries.Grant management is a particularly sensitive area, given the fact that the Communitydoes not receive a full market equivalent for its expenditure.
Setting sound and transparent standards for the management of Community funds hasbeen a priority of this Commission from the very outset. This was the ambition thatprompted us to embark on the task of drafting a Vade-mecum that would provide theCommission with a common framework for awarding and monitoring direct grants andthat could be applied in any policy area where there are no sector-specific rules.
The purpose of the Vade-mecum, then, is to serve as a reliable reference guide for usersconfronted by the many issues that arise in the day-to-day management of grants. It isbased on extensive interdepartmental consultation throughout its drafting in order toreconcile operational and financial demands.
Proper observance of the rules and recommendations contained here will facilitate theimplementation of spending decisions. At the same time, the Vade-mecum will alsoserve as a reference guide for explaining the Commission’s policy to the budgetauthority, the European Court of Auditors, and the public at large.
Anita Gradin Erkki LiikanenMember of the Commission Member of the Commission
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The purpose of the full version of the Vademecum, which was adopted in Julyand comes into operation on 1 January 1999, is to provide an easy-to-followreference guide for Commission civil servants involved with grants, whetherdrawing up, proposing, or evaluating programmes or processing applications.
In the interests of transparency and in order to avoid unnecessaryconsultations on financial and legal issues between Commission officials andapplicants and beneficiaries, this shortened version has been prepared for thegeneral public. It reproduces the part setting out the rules governingapplications and the calculation and payment of grants. It also contains thepart which explains in detail the terms of the agreement which beneficiarieswill be required to sign.
The Vade-mecum comprises two kinds of rules:
– binding procedural rules that constitute the basic rules which managingdepartments must follow, and
– optional recommended managerial practices. These are intended tostandardise practice in Commission departments as far as possible and tohelp managing departments in their day-to-day work.
Both the rules and recommended managerial practices are to be seen asminimum standards for authorising departments to follow. However, they arefree to adopt stricter – but not looser – standards as they see fit. The minimumprocedures that will always be observed are summarised below, at the end ofthis chapter.
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Commission spending is broken down into the following categories:
(a) Spending on personnel
(b) Loans and participations
(c) Procurement spending, i.e. purchasing on the market a service orproduct, as defined in the procurement Directives and the FinancialRegulation
(d) Financial aid to promote a policy aim:
– paid to the beneficiary directly by the Commission (“grant”,sometimes also called “financial contribution”, “subsidy” etc.)
6
– paid to the beneficiary indirectly via a Member State, via a foreigngovernment, or via a body designated by a State, in the context ofthe decentralised management of Community activities (“transfer”).
A grant is therefore D� GLUHFW� SD\PHQW� RI� D� QRQ�FRPPHUFLDO� QDWXUH� E\� WKH&RPPLVVLRQ�WR�SURPRWH�DQ�(8�SROLF\�DLP. Where such a payment is made toa government department in connection with a specific project, it issometimes called a “financial contribution”.
The Vade-mecum is not concerned with financial aid granted via States or viabodies designated by them (“transfers”), as for instance under the CAP andthe Structural Funds.
The basic binding rules of the Vade-mecum can be summarised as follows:
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The availability of grants will be publicised widely and in an easilyaccessible way. They will be cited on “Europa”, the Commission’sInternet server, mentioning the programme, its scope and size, andwhere to address applications. It will be possible to obtaininformation, as well as an updated version of the publication “Grantsand loans from the European Union” both through Europa and inprint. The same publicity will apply to the criteria for awardinggrants.
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The following three principles will be observed when awardinggrants:
– Collective assessment
Proposals will be selected by a committee of Commission staff,with at least one member who does not belong to the unitawarding the grant. The committee acts independently in anadvisory capacity.
– Avoiding multiple funding for the same operation
To avoid multiple funding for the same operation, authorisingofficers will consult the Commission's database of organisationsreceiving payments from the Commission.
– Ex post publicity
A list of all grants awarded will be published at least once a year,giving the names and addresses of the beneficiaries, what thegrants were for, the amount granted and the co-financing rate,and whether or not there was specific prior publicity (such as acall for proposals). The only exceptions allowed are where thebeneficiary’s security would be jeopardised.
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On the basis of each year’s budget, all departments will prepare a listof the grants they can give, the amounts involved, and the criteria forawarding them. These lists will then be included in a compendiumsetting out what grants are available from each department; if adepartment can award spontaneous grants this should be stated. Thecompendium will form an addendum to “Grants and loans from theEuropean Union” and will be published on Europa, as well as beingavailable in paper form.
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When issuing publications describing a Community programme,departments will include a section giving information on thesubsidies planned under the programme.
They will also take steps to maintain ongoing visibility in the press,in Commission Offices in the Member States, in the Member States’Permanent Representations to the Union and in offices representingnational regions/Länder/provinces in Brussels, as well as inCommission delegations in countries outside the Union.
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A call for proposals will normally be the means of publicising aparticular programme of grants. It will be carefully worded so as topreclude a flood of applications likely to be rejected subsequently.Calls for proposals will therefore clearly set out the followinginformation:
– the context;
– the subject of the call for proposals;
– the total budget available for the programme;
– the likely number of beneficiaries (and hence the average amountof any grant);
– the scale of Commission participation in percentage terms;
– whether or not contributions in kind are to be taken into accountwhen calculating the grant;
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– the maximum amount of any grant;
– the rules governing which organisations and operations areeligible for assistance;
– the selection criteria for operations;
– the rules governing which categories of expenditure are eligibleand which are not;
– the rules to be applied for evaluation (H[� DQWH and H[� SRVW),monitoring and controls (technical and financial);
– the deadlines applicable;
– general arrangements for submitting applications for grants.
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A call for proposals may be publicised in a number of ways:
– through the Official Journal of the European Communities;
– via the Europa web site;
– by sending it to preselected potential applicants in the light oftheir response to a preliminary announcement or by targetedmailshots (e.g. for recurrent subsidies);
– through publicity in the specialist press in certain cases;
– through special brochures and/or leaflets.
Dissemination via the Internet, with a link to the web page “Grantsand Loans from the European Union” is the minimum requirement.The choice of other media will depend on which target groups theprogramme is aimed at.
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The Commission wishes to select beneficiaries on the basis of the quality oftheir applications. Thus the beneficiaries will not always be the same. Therules on H[� DQWH and H[� SRVW� publicity and application of the proceduresdescribed below are aimed at ensuring that the range of beneficiaries gainingaccess to Community funds is as wide as possible.
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An application will be considered incomplete not just if it is notsigned, for instance, or if not all the questions on the applicationform have been answered, but also if it is not accompanied by abalanced budget (income and expenditure), an adequate descriptionof the activity or project in question or the organisation’s statutes orequivalent, if this is required. However, departments are free to askfor and accept any additional information they think necessary.
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As a rule, grants are awarded so that applicants will carry outoperations, and this involves certain rights and obligations on them.It is therefore important to know that applicants have the proper legalstatus to meet those obligations and can provide assurances as totheir financial viability and professional integrity, guaranteeing thatthey can complete the operation for which a grant is given.
• Corporate bodies must be properly constituted and registeredunder the law
To ensure that applicants are properly constituted under the law, theywill be asked in the application form to give their business name (fulllegal title), official registration number where appropriate, legalstatus (association, commercial enterprise, university etc.) and VATnumber. For verification purposes, they may be asked to enclose withtheir application a copy of their articles of association or statutes and,where appropriate, of their official registration certificate.
• Eligibility of natural persons
Awards of grants to natural persons are not ruled out altogether, butthey will be made only in special circumstances. In this case theperson must accept individual responsibility for completing theoperation for which a grant is given. A financial guarantee is likelyto be requested in order to protect the Community’s financialinterests.
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• Eligibility of commercial organisations
In the case of commercial enterprises, procurement procedures ratherthan grant award procedures are the rule and managing departmentswill always consider first whether the procurement procedureapplies. In any event, a grant to a commercial organisation can onlybe made for a project whose immediate objective is non-commercialand strictly non-profit-making. The award of Community grants mustalways comply with Community competition policy rules.
• Eligibility of intermediary agencies
Applications by agencies acting as intermediaries on behalf of othersare not permitted, apart from duly authorised exceptions such asprojects grouped in a single application.
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Applicants must have the capacity to finance their activities properly.This principle also applies to other potential providers of fundsbesides the Commission.
It is essential that applicants should have stable sources of financesufficient to continue their activities throughout the operation and, ifnecessary, to play a part in financing it.
To ensure applicants have sufficient financial capacity, they will beasked to include with their grant application form their annualaccounts for the last financial year (or their annual budget in the caseof public-sector bodies). An audit certificate less than two years oldfrom a registered accountancy firm may be requested.
Applicants may be asked to submit with their application an explicitundertaking from each co-financing organisation to provide theamount of funding stated in the grant application for the operation.
If selected for a grant, beneficiaries may be required to give anexplicit undertaking to cover their share of the financing and, ifnecessary, to finance expenditure not covered by the Communitygrant should other co-financers default.
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1. Applicants must have the operational (technical andmanagement) capacity to complete the operation to besupported.
2. In particular, the team responsible for the project/operation musthave adequate professional qualifications and experience.
To check applicants’ technical capacity to complete the operation forwhich a grant is to be given, they may be asked to include with their
11
grant application form a curriculum vitae of the staff who willactually be performing the work involved, as well as particulars ofinvolvement in any past or present operations financed by theEuropean Commission, contracts concluded with Commissiondepartments, and any other relevant information (e.g. activities onbehalf of other international organisations or Member States of theEuropean Union).
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The description of the operation must allow an assessment to bemade as to whether it matches the objectives of the grant programme.It must also specify by what means the Community involvement inthe project or activity will be publicised.
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The results as described on the application form must be measurableso that the extent to which they have been achieved can bemonitored, checked and subsequently evaluated. A further result thatcan be taken into account is whether or not the award of a grant willcontribute towards sustaining an organisation whose existence isuseful for achieving the policy objective of the programme.
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Although both the applicant organisation and the project might beeligible for consideration, actually awarding a grant may not bejustified if the project itself has not been well thought out orprepared.
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Assessing this involves asking such questions as: Do the probableresults stand in a reasonable relationship to the amount of the grant?Have better ways of achieving these results been overlooked? Is therea way in which the same or equivalent results could be achieved withless cost to the EU budget (including costs of administration)? Thebreakdown of the budget, category by category, offers a way ofensuring that the amount of the grant awarded is the minimumnecessary for the operation to be completed.
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Before awarding a grant, departments will always first examinewhether the activity or project should be the subject of a procurementspending procedure.
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To forestall the risk of double financing, applicants will be requiredto indicate in their grant application what other grant applicationsthey have submitted or will be submitting to the Europeaninstitutions during that same year, indicating for each grant the
13
Community programme concerned, the title of the operation and theamount of the grant.
Organisations may put in grant applications to several Commissiondepartments for separate operations or for the same operation,providing there is no double financing of the same expenditure. In allcases consultation between departments will take place before theapplicant organisation is given an answer.
If two or more departments intend to award a grant for different partsof the same project or event, the beneficiary will be informed by ajoint letter.
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Grants for operations that have already started are only admissiblewhere it can be shown that the grant is necessary to ensure that theoperation is properly completed. However, the grant cannot coverany period before the application was submitted.
Awarding grants retroactively for operations that have already beencompleted is not allowed.
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For example, all grants for projects that may be contrary to theinterests of public health (alcohol, tobacco, drugs), respect for humanrights, people’s security, freedom of expression, etc., are prohibited.
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All grant applications must be supported by a forward budgetshowing all the costs and revenue that the beneficiary considersnecessary to carry out the project. A project can be a series of relatedoperations; in fact, related projects should be grouped together as asingle application. Related projects would be those with a link to acommon objective and a common organisational structure.
The forward budget must be:
– sufficiently detailed to allow identification, monitoring andcontrol of the operation(s) proposed;
– in balance, i.e. total revenue and total expenditure must be equal;
– expressed in euros, as a rule; in any event it will be converted intoeuros to calculate the amount of any grant;
– the calculations and specifications used in drawing up the budgetmay also be required.
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The income side of the forward budget should show:
1. the direct monetary contribution from the applicant’s ownresources;
2. the contribution (grant) from any other fund providers.
3. any income generated by the project (e.g. the yield from sales ofpublications during the operation, or the fees charged toparticipants attending a conference);
4. the grant sought from the Commission, with a breakdown whereseveral applications have been made to the Commission; andlastly,
5. any contribution in kind from the applicant’s own resources.
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The expenditure side of the budget submitted with the applicationmust be sufficiently detailed to allow “eligible costs” to bedistinguished from any “ineligible costs”. In the context of grants, the
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costs considered eligible for Community funding are those thatsatisfy the following criteria:
– The total amount of the costs must show that the organisation ofthe operation satisfies the principles of sound financialmanagement, in particular as regards economicality and cost-effectiveness;
– the costs of the operation must be directly linked to achieving theobject of the agreement;
– the costs must be necessary to carry out the project and must be inline with normal conditions on the market. They must be enteredin accounts, identifiable and controllable.
5.1.3.1 Direct costs eligible
These are all costs directly generated by the operation andessential for its implementation. They would not have beenincurred if the operation had not been carried out.
The following direct costs are eligible, by nature:
– staff costs (unit cost per day for work on the project).These may include other charges relating to the use ofhuman resources provided that they are specified in thecall for proposals. Staff costs cannot exceed the salariesand other charges normally practised by the applicant,nor exceed the lowest rates generally accepted in therelevant market;
– travel, accommodation and subsistence expenses at ratesand on terms set on the basis of scales or rules laiddown by Commission departments by reference to thebest conditions available on the market;
– equipment (new or second-hand); these costs must be inline with normal market practice and must be essentialfor carrying out the operation. Costs of land andimmovable property (depreciation/rental costs accordingto the nature of the operation) are not covered. Inexceptional cases the Commission may explicitly allowsuch costs, and in that event a special clause will beincluded in the grant agreement. Acceptance of suchcosts must be justified by reference to the objectives ofthe operation.1 Full depreciation can be accepted if thenature of the operation and/or the use of the propertywarrants it. In these cases the Commission will specifythe final destination;
1 Such as sustainability in the case of development projects.
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– charges for financial services in specific contexts(charges for bank transactions, insurance; normally therisk of exchange losses is excluded);
– costs of consumables and supplies;
– costs of services relating to eligible costs (such astransport costs);
– subcontracting, but only to subcontractors specificallymentioned in the grant agreement (the rules applicableto the beneficiary also apply to the subcontractor);
– information dissemination costs;
– other costs stemming from obligations under the grantagreement (audits, specific evaluations for theoperation, reports, translations, certificates, deposits,etc.);
– a “contingency reserve” of no more than 5% of theeligible direct costs;
5.1.3.2 Indirect costs and overheads eligible
Depending on the nature of the operation and the targetobjectives, the awarding department may, on the basis ofcriteria that must be specified in the call for proposals, setflat rates for the amount of overheads eligible. Themaximum amount that can be accepted is 7% of total directcosts eligible.
Indirect costs are not eligible in the case of funding for aspecific operation carried out by organisations receivingrunning costs grants.
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The following costs are ineligible:
1. fixed capital costs;
2. general provisions (for losses, possible future liabilities, etc.);
3. debts owed;
4. interest paid;
5. doubtful debts;
6. exchange losses, unless specifically provided for by way ofexception;
17
7. extravagant expenditure;
8. contributions in kind.2
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Small organisations in particular, such as NGOs, often apply for partof their contribution to the costs of a project to be in kind. Suchcontributions in kind must appear on both sides of the forwardbudget, on the income side as the money equivalent of the services ormaterials contributed and as an equal amount on the expenditureside, but separately from the rest of the budget since they cannotcount as eligible costs.
In particular, contributions in kind include:
– land, immovable property whether in its entirety or in part,durable capital goods,
– raw materials,
– unpaid charity work by a private individual or corporate body.
The following conditions must be met:
– the amount declared by the beneficiary as contributions in kindmust be valued either on the basis of objective factors or on thebasis of official scales laid down by an independent authority orby an outside independent professional;
– the cost of private charity work must be valued in accordance withthe national rules regarding the calculation of hourly, daily orweekly labour costs, if such rules exist.
Since it is often small non-governmental organisations that dependon this kind of support, Commission departments will not rule themout whenever such organisations may reasonably be expected toapply for grants. Departments will clearly indicate whether or notcontributions in kind are allowed in the call for proposals orwhatever other means of publicity is used. If contributions in kind areallowed, they will not count as eligible costs but will involve anincrease in the grant, either in terms of the amount awarded or interms of the percentage of eligible costs.
Where contributions in kind are taken into account, the Communitycontribution is limited to the level of actual expenditure incurred, inother words to total eligible costs excluding the value ofcontributions in kind.
2 But see 5.1.5.
18
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A budget will be incorporated in the grant agreement..
(a) The expenditure side will contain only eligible costs, brokendown by heading and amount. It will explicitly set out theconditions under which any overheads are included.
(b) The income side will set out:
– the contribution which beneficiaries undertake to find, either fromtheir own resources or from other sources.
– any income that the project is expected to generate;
– the Commission grant or grants.
The eligibility period for costs will be specified in the agreementgoverning the Community contribution. This provision will set thestarting and ending dates for eligibility and will indicate any termsfor exceptional retroactivity back to the date of submission of theapplication, and any other exceptions.
The dates taken into account for the eligibility of costs are the dateswhen the costs were generated and not the dates when the accountingdocuments were drawn up.
Where contributions in kind are taken into account, their amount willbe included in the grant agreement, since the beneficiary has to beunder an obligation to provide them.
Any change which the beneficiary wishes to have made to the termsof the agreement that would imply a change in the basic purpose ornature of the operation must be submitted for prior approval by theCommission. Such changes must be set out in an addendum to theagreement.
Where the change does not affect the basic purpose of the operationand the financial impact is limited to a transfer between headings ofthe budget involving an increase of less than l0% of a heading foreligible costs, the beneficiary may apply the change and inform theCommission without delay. Otherwise, prior approval must besought from Commission departments. If no increase is permissiblefor certain categories of costs, these must be specified in theagreement.
19
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The maximum amount of any grant is the total amount of actualeligible costs (i.e. not counting the value of contributions in kind).This is an absolute limit which applies in all cases. However, only inrare cases can a 100% grant be justified. In the vast majority of casesthe beneficiary will be required to find the money to pay for a part ofthe project (co-financing principle).
(a) Where the project does not generate any income:
– if the award criteria lay down an automatic percentage rate, theactual amount of the grant is fixed by applying this rate to thefigure for total eligible costs;
– in other cases, the actual amount is decided by the grant selectioncommittee in the light of their assessment of the project'scontribution to the policy aim of the programme grant in question,subject to any maximum above.
(b) Where the project will generate an income, this is taken intoaccount :
– if the award criteria lay down an automatic percentage rate, this isapplied to eligible costs less the income generated;
– in other cases, the grant that would otherwise have been given isreduced pro rata by the ratio of such income to eligible costs.
The principle of cost-effectiveness will be applied in such cases. Forinstance, if there is a good project whose staff costs or total budgetappear too high compared to similar projects, instead of turningdown the application, consideration will be given to awarding alower grant than normal.
The amount of the grant is expressed in euros.
The Commission will specify the overall level of the grant:
– either as a maximum figure not to be exceeded (with an indicationof total eligible costs in percentage terms);
– or by indicating the categories of costs that the Community grantwill cover and up to what ceiling (as a figure and as a percentageof actual expenditure).
With regard to the SD\PHQW�RI�DGYDQFHV, the normal rule is that forall grants, payment is made in at least two instalments: an advanceand the balance, although provision can be made for payment solely
20
on the basis of the final accounts. The number of paymentinstalments depends on the financial risks involved. Where the risksare high, and if the beneficiary is not required to lodge a financialguarantee, payment may be made in several instalments. Where therisks are lower, the recommended approach is to confine payments toan advance, with the balance being paid after the beneficiary hassubmitted the necessary supporting documents.
A grant may also be paid as a single payment in advance, but only onproduction of a letter of guarantee by the body receiving the grant(the cost of this guarantee would be considered eligible under thebudget of the operation supported). Of course, this latter option putsthe department in a very strong position, since if the beneficiarybreaks the terms of the agreement, the whole amount of the grant canbe reclaimed.
In the case of large grants (above 150 000 euros), advance paymentsmay also be covered by a financial guarantee.
The beneficiary will be required, within the time limit set in theagreement, to present the final accounts for the whole operation interms of eligible costs, which will then be assessed by theCommission departments to determine the balance of the Communitycontribution.
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The amount of a grant only becomes final after completion of theproject and presentation of the final accounts.
The grant is reduced if a comparison of the final accounts with thebudget set out in the agreement shows:
(a) that total income, including interest on advance payments,exceeded total expenditure; in this case the Commission grant isreduced by the excess amount. If several donors havecontributed, the excess would normally be shared among them;
(b) that eligible costs are less than in the agreed budget; in whichcase the Commission grant is reduced proportionately;
(c) that the amount of eligible costs minus income generated by theproject is less than the grant; in this case the Commission grantis reduced by the excess amount.
The grant is reduced, depending on circumstances, in the followingway:
– by reducing the balance payable after completion, or
– by requiring partial repayment of the advance paid.
21
In no circumstances can the final Commission grant be higher thanset out in the agreement, even if costs exceed those in the agreedbudget. The contingency reserve1 in the agreed budget should be ableto absorb any reasonable unforeseen overrun of eligible costs.
1 See 5.1.3.1.
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The special points regarding grants towards running costs are the reference tothe Community budget and the fact that the beneficiary’s administrative costsmust be limited to a strict minimum. Expenditure yielding an increase in thebeneficiary’s capital are excluded. Organisations receiving a running costsgrant are eligible to apply for a grant for a project under another programme,but in this case indirect costs are not eligible (see 5.1.3.2.“Indirect costs andoverheads eligible”).
The following special rules apply in the case of grants to cover the generalrunning costs of an organisation.
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Running cost grants can only be awarded:
(a) where this is authorised to a named organisation by a budgetheading or in the remarks to a budget heading;
(b) under a budget heading that specifically provides for suchgrants.
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Costs eligible are those necessary to ensure the normal running of thebeneficiary organisation and to enable it to pursue its statedobjectives.
The same rules for calculating and checking eligible and ineligiblecosts apply as for project grants except that:
– all reasonable overheads are eligible, and
– a different rule applies in the event of income exceedingexpenditure (“Rule governing surpluses”1).
Besides the items listed below in connection with grants for specificoperations, beneficiaries must include the following with theirapplication for a running costs grant:
– an organisation chart and a description of the tasks of staff;
– a full list of other fund providers;
– proof of an organised accounting system;
1 See 7.1.4
23
– their latest financial statements (balance sheet, profit and lossaccount).
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Organisations seeking a running costs grant must apply within thefirst half of their financial year.
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If an organisation realises a surplus of income over expenditure at theend of a financial year for which it received a running costs grant,part of the surplus up to 5% of total income for that year and any partthat is earmarked for some multiannual or other project in thefollowing year can be carried over to the following year.
However, where there is any surplus above 5% that is not earmarkedfor specific future use, a repayment has to be made. This is calculatedby determining what proportion of the organisation’s total income forthe year in question was accounted for by the Commission grant andapplying the resulting percentage to the non-earmarked surplus above5%.
The amount calculated is either repaid direct or deducted from thefollowing year’s grant.
������ 3ULQFLSOH�RI�VHWWLQJ�D�FHLOLQJ�RQ�WKLV�W\SH�RI�JUDQW�DV�D�SURSRUWLRQ�RIWKH�EHQHILFLDU\¶V�DQQXDO�UXQQLQJ�FRVWV�LQ�RUGHU�WR�OLPLW�GHSHQGHQFHRQ�WKH�&RPPXQLW\�EXGJHW�
As a general rule, it is recommended that a minimum level offunding for the beneficiary’s budget should come from sources otherthan the EU budget. In the 1998 budget, Parliament introduced aminimum requirement of 10 % of external co-financing for grants inPart A.
The indications are that Parliament intends to extend this conditionin future years to certain Part B headings and to raise the percentagefigure year by year.
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Budget headings which allow running cost grants to be given toorganisations selected by the Commission can be used to finance theestablishment of new organisations. Such “start-up” grants, however,can only be paid for a maximum of 3 years, after which theorganisation has to cover its general running costs from its ownresources and non-EU grants. However, these organisations may, ofcourse, still apply for project funding from the EU budget.
24
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After the decision to award a Community grant has been taken, and once a financialcommitment proposal has been drawn up and duly approved by the FinancialController, a contract has to be concluded defining the reciprocal rights andobligations of the parties (Commission and beneficiary).
A standard model grant agreement (see Annex II) will be used by all Commissiondepartments, whatever the subject, duration or amount of the grant. It contains allthe basic clauses needed to clarify both parties’ respective rights and obligations andto safeguard the Commission’s interests from the legal point of view. Furtherclauses may be added but none of these basic clauses may be omitted.
The standard agreement comprises the following:
• WKH�DJUHHPHQW�SURSHU, which includes all the provisions specifically relating tothe operation supported, specifying in particular the name of the beneficiary, thesubject and (principal) place of performance, the duration and estimated totalcost of the operation, the percentage and amount of the Community contribution,the payment arrangements and the reports to be submitted by the beneficiary;
• WKH� WHFKQLFDO� DQQH[ (Annex I to the agreement) giving a precise and detaileddescription of the subject and content of the operation supported;
• WKH� JHQHUDO� WHUPV� FRQGLWLRQV applicable to grant agreements (Annex II to theagreement). These terms and conditions are the same for all operationssupported;
• WKH� RSHUDWLRQ¶V� EXGJHW (Annex III to the agreement), broken down byexpenditure items (the eligible costs are defined in the Annex II);
• any VSHFLILF�FRQGLWLRQV applicable to the operation supported (Annex IV to theagreement).
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The agreement proper contains the following provisions:
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All grant beneficiaries must be identified by the following threeparticulars:
8.1.1.1 Full legal name
This is the name given in the articles of association orstatutes establishing the beneficiary organisation. VAT andofficial registration numbers, if any, should also be given.In the case of natural persons, this is their name.
25
8.1.1.2 Address
The address given must be that of the organisation’sregistered office (especially for companies andassociations) or headquarters (primarily for public bodiesand universities).
8.1.1.3 Name and function of the signatory
The person signing the agreement on behalf of thebeneficiary organisation (Chairman, Director General,Rector, Director of an administrative or financialdepartment, etc.) must be duly authorised to enter intolegally binding commitments to third parties on its behalf.In the case of natural persons, this is they themselves.
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The subject matter of the agreement must be clearly defined. TheWLWOH of the operation to be carried out must be explicit in itself andmust be reproduced in identical terms in the technical annex.
Article 1 includes a second paragraph specifying the SODFH� RISHUIRUPDQFH� of the operation. If the operation is performed atseveral sites, the main site must be indicated in Article 1 and theother sites listed in the technical annex.
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This article must include the following information:
8.1.3.1 Duration of the operation in months
8.1.3.2 Starting date of the operation
The starting date may be set beforehand (e.g. the 1st of agiven month) provided it is no earlier than the date whenthe grant application was submitted by the beneficiary; or itmay be the 1st day of the month following signature of theagreement by the two parties or the day immediatelyfollowing the date of the last signature (in practice, theCommission’s).
������ )LQDQFLQJ�WKH�RSHUDWLRQ��$UWLFOH���
This article specifies:
• the HVWLPDWHG� WRWDO� FRVW� of the operation (determined from thebudget broken down by expenditure items listed in Annex III tothe agreement);
26
• the SHUFHQWDJH�and the PD[LPXP�DPRXQW�RI� IXQGLQJ awardedby the Commission to the operation concerned.
������ 3D\PHQW�DUUDQJHPHQWV��$UWLFOH���
See the explanations given under 6.1.1.
������ 5HSRUWV� DQG� RWKHU� GRFXPHQWV� WR� EH� VXEPLWWHG� E\� WKH� EHQHILFLDU\�$UWLFOH���
This article specifies the GRFXPHQWV� (reports or others) to besubmitted by the beneficiary to enable the Commission to assess theresults of the operation. Interim payments and/or the final paymentwill generally depend on these documents.
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This article is intended to identify the person who, both at theCommission and in the beneficiary organisation, is responsible forWHFKQLFDO� DQG�DGPLQLVWUDWLYH�PRQLWRULQJ of the agreement and towhom all questions relating to the performance of the agreementshould be addressed.
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Besides the list of DQQH[HV to the agreement (see above), this articlecontains the standard FODXVH� by which, in the event of a FRQIOLFWbetween a provision of the annexes and a provision of the agreementproper, the latter takes precedence.
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The final provisions include the following particulars: the authenticODQJXDJH of the agreement, the VLJQDWXUH of the parties and the GDWHof the last signature (in practice, date when the agreement is signedby the Commission).
As far as signatures are concerned, it should be noted that:
• on the Commission side, only authorising officers by delegation orsubdelegation are authorised to enter into commitments to thirdparties on behalf of the institution, under the internal rules on theimplementation of the general budget of the EuropeanCommunities, as updated regularly;
• on the beneficiary’s side, care will be taken to ensure that theperson signing the agreement is duly authorised to do so. Ifnecessary, the beneficiary organisation will be asked to produce awritten attestation.
27
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I. Model Application Form and Budget
II. Model Grant Agreement
III. General terms and conditions applicable to grant agreements of the EuropeanCommunities
28
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EUROPEAN COMMISSION
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�����,GHQWLW\�RI�DSSOLFDQW
Full legal name (business name):
Short name (where applicable):
Acronym (where applicable):
Official registration No (where applicable):
Legal status of applicant (association, commercial business, university etc…):
VAT No (where applicable):
Address of registered office
Street:
Nr:
Postcode:
City:
Country:
Telephone:
Fax:
E-mail:
29
�����3DUWLFXODUV�RI�DSSOLFDQWV�EDQN
Name of bank:
Street:
No:
Postcode:
City:
Country:
Bank code:
Bank account No;
BIC code (SWIFT):
Principal account holder
Name and forename:
Title or position in the organisation:
�����%ULHI�GHVFULSWLRQ�RI�WKH�DSSOLFDQWV�DFWLYLWLHV�DQG�JHQHUDO�DLPV
30
�����:KHUH�DSSOLFDEOH��JURXSV�FRPSDQLHV�KROGLQJ�D�VKDUH�RI�WKH�DSSOLFDQWV�FDSLWDO
Business name (full legal name) of each company:
�����:KHUH�DSSOLFDEOH��VXEVLGLDU\�FRPSDQLHV�DVVRFLDWLRQV�JURXSV�RI�WKH�DSSOLFDQW
Business name (full legal name) of each company/association/group:
��� � � &RPPXQLW\� JUDQWV�� SURFXUHPHQW� FRQWUDFWV� RU� ORDQV� REWDLQHG� GLUHFWO\� RULQGLUHFWO\�GXULQJ�WKH�ODVW�WKUHH�\HDUV�IURP�D�(XURSHDQ�LQVWLWXWLRQ�RU�DJHQF\
For each grant or contract please specify:
- Community programme in question:
- title of the operation:
- year of the award by the Commission:
- amount of the contract or grant:
31
�����*UDQW�DSSOLFDWLRQV�VXEPLWWHG��RU�GXH�WR�EH�VXEPLWWHG��WR�(XURSHDQ�LQVWLWXWLRQVLQ�WKH�FXUUHQW�\HDU�
For each grant, contract or loan, please specify :
- Community programme in question:
- title of the operation:
- amount of the contract or grant:
%� 3$57,&8/$56� 2)� 23(5$7,21� )25� :+,&+� $� *5$17� ,65(48(67('
��� � � %ULHI� GHVFULSWLRQ� RI� WKH� RSHUDWLRQ� (where applicable, applicants should indicatework connected with the operation that they plan to subcontract to an outsideorganisation/company/association)
32
�����([SHFWHG�UHVXOWV�RI�WKH�RSHUDWLRQ
�����6XPPDU\�LPSOHPHQWDWLRQ�WLPHWDEOH�IRU�WKH�RSHUDWLRQ
�����$PRXQW�RI�WKH�JUDQW�UHTXHVWHG�(in EURO)
33
�����6XPPDU\�IRUZDUG�EXGJHW for the operation
7KH�DSSOLFDQW�FHUWLILHV�WKDW�WKH�FRVWV�LQGLFDWHG�EHORZ�DUH�QHFHVVDU\�WR�LPSOHPHQW�WKH�RSHUDWLRQ�IRU�ZKLFK�D�JUDQW�LV�UHTXHVWHG
Part A - Expenditure/eligible costs
a) costs of staff assigned to the operation
b) travel and subsistence expenses for staff involved in the operation
c) cost of equipment, land and immovable property (rent, purchase)
d) cost of consumables and supplies
e) any other direct costs (please specify)1
f)general costs charged to the operation
(in EURO) Part B – Financing plan
a) direct revenue expected from the operation
b)contribution by the applicant
c) contributions by other organisations (please specify)
d) contribution requested from the Commission
e) estimated bank interest generated by the grantrequested over the period of implementation of theoperation
f) where applicable, other contributions by theCommission for the same operation (please specify)
(in EURO)
1 This includes costs such as bank charges, fees, etc.
34
TOTAL ELIGIBLE COSTS TOTAL
Estimate of contributions in kind for the operation, where applicable Estimate of contributions in kind, where applicable2
TOTAL TOTAL
2 These are contributions that are not invoiced, e.g. voluntary work, or equipment or premises made available free of charge
35
�����2WKHU�VRXUFHV�RI�ILQDQFH, where applicable (excluding any Community grant)
(to be filled in for each co-financing company/association/organisation)
For eacht co-financing organisation please indicate:
• Business name (full legal name):
• Address:
• Person responsible in the organisation (name/forname, title or position, telephone, fax,e-mail):
• Amount of funding which the organisation undertakes to provide for the operation:
• Comments if the co-financing decision is not yet final:
����'HFODUDWLRQ�E\�WKH�DSSOLFDQW
I, the undersigned, certify that the information given in this application is correct.
Person responsible in the applicant organisation for the operation assisted
Name/forename:
Title or position in the applicant organisation:
Telephone:
Fax:
E-mail:
Signature:
Date:
36
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Documents to be included with the grant applications
9. Annual accounts for the last financial year
10. Description and detailed timetable of the operation
11. Detailed forward budget of the operation
12. Where applicable, curriculum vitae of persons to be performing work in connectionwith the operation
Documents to be included where available
1. Official registration certificate
2. Articles of association/Statutes
3. List of directors/executive board members (names and forenames, titles or positionsin the applicant organisation)
4. Annual report for the previous year
13. Auditor’s report issued within the last two years by an approved auditing firm
14. Financial guarantee
15. Particulars of:
(a) Current or earlier participation in operations financed by the EuropeanCommission,
(b) Contracts concluded with departments of the European Commission
(c) Other particulars (e.g. operations on behalf of other international organisationsor Member States of the European Union)
16. Undertaking by each co-financing organisation to provide the amount of fundingindicated in the grant application
37
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%HWZHHQ
7KH� (XURSHDQ�&RPPXQLW\�(XURSHDQ� $WRPLF� (QHUJ\� &RPPXQLW\�(XURSHDQ� &RDODQG� 6WHHO� &RPPXQLW\� �³WKH� &RPPXQLW\´�, represented by the Commission of theEuropean Communities (³WKH� &RPPLVVLRQ´), itself represented by........................…………………………………………………………………………….,
of the one part,
and
«««««««««««««««««««««««««««««««««««���IXOO� OHJDO� QDPH� RI� WKH� EHQHILFLDU\�� �DFURQ\P� with its registered office at……………………………………………………………………………………………..(address [of the registered office - for companies and associations; of the main office ofthe body - for public bodies and universities], VAT No and official registration No whereappropriate)………………………………………………………………………………..,
�³WKH� EHQHILFLDU\´�, represented by……………………………………………………………………………………………..�QDPH�DQG�SRVLWLRQ�RI�WKH�VLJQDWRU\�>SHUVRQ�GXO\�DXWKRULVHG�WR�DFW� OHJDOO\�RQ�EHKDOI�RIWKH�EHQHILFLDU\�ERG\�LQ�UHODWLRQV�ZLWK�WKLUG�SDUWLHV��&KDLUPDQ��'LUHFWRU�*HQHUDO��5HFWRU�+HDG�RI�DGPLQLVWUDWLYH�RU�ILQDQFLDO�GHSDUWPHQW@�
of the other part,
have agreed as follows:
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1.1 The &RPPLVVLRQ has decided to award a grant on the terms set out in thisagreement and its annexes, which the beneficiary hereby declares it has takennote of and accepts, for the RSHUDWLRQ entitled :………………………………………………………………….(“the�RSHUDWLRQ”).
38
1.1 The EHQHILFLDU\ accepts the grant and undertakes to carry out WKH� RSHUDWLRQunder its own responsibility.
A detailed description of the�RSHUDWLRQ is given in Annex I, which is an integralpart of this agreement.
1.3 The RSHUDWLRQ shall be carried out [mainly] at.……………………………………………………………………………………..
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2.1 The RSHUDWLRQ shall last for ……[LQVHUW� QXPEHU] months from……………...[first day of [month] after the agreement has been signed by the lastof the contracting parties RU�LQVHUW�GDWH] [³VWDUWLQJ�GDWH´].
2.2 The agreement shall end ……………………………[on the date of the finalpayment due from the &RPPLVVLRQ] on …………….[LQVHUW� GDWH]] (³GDWH� RIFRPSOHWLRQ´).
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3.1 The total cost of the RSHUDWLRQ is estimated at EUR .…………..� � �The detailedbudget of the operation is set out in Annex III, which is an integral part of thisagreement.
The total cost of the RSHUDWLRQ comprises only costs eligible for Communityfunding, as defined in Annex II.� [A flat-rate of [no more than] 7% of the totalamount of eligible direct costs shall count as eligible indirect costs.]1�[The termsare set out in Article 11.3 of Annex II.]
[The total cost of the RSHUDWLRQ does not include contributions in kind by theEHQHILFLDU\, which are specified separately in Annex III.
However, as contributions in kind were taken into account by the &RPPLVVLRQwhen it set its contribution to the RSHUDWLRQ, the EHQHILFLDU\ undertakes to supplythese contributions on the terms laid down in this agreement.�Failure to honourthis undertaking may entail termination of the agreement as specified in Article 4of Annex II.]2
3.2 The &RPPLVVLRQ shall provide a maximum amount of EUR .………, equivalentto .………..% of the estimated total cost specified in paragraph 1.
3.3 Should the real costs on completion of the RSHUDWLRQ turn out to be lower than theestimated total cost specified in paragraph 1, the &RPPLVVLRQ¶V contribution willbe limited to the amount calculated by applying the above percentage to realcosts.�The EHQHILFLDU\ undertakes to repay to the &RPPLVVLRQ any sums alreadypaid in excess of this amount.
1 Standard clause for overheads.
2 Paragraph to be inserted where the beneficiary makes contributions in kind.
39
3.4 The EHQHILFLDU\ agrees that the grant may in no circumstances give rise to profitsand that it must be restricted to the amount required to balance revenue andexpenditure for the RSHUDWLRQ.
3.5 The EHQHILFLDU\ accepts that the grant does not constitute a claim on the&RPPLVVLRQ and may not therefore be assigned to another body or transferred toa third party without the &RPPLVVLRQ¶V prior written consent.
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4.1 Option 1
[The &RPPLVVLRQ shall pay the grant to the EHQHILFLDU\ in a single instalmentwithin 60 days of the VWDUWLQJ�GDWH upon production of an invoice and a financialguarantee for an equivalent amount.]
Option 2
[The &RPPLVVLRQ shall pay the grant to the EHQHILFLDU\ as follows:
- EUR .…….. […...% of the amount specified in Article 3.2] by way of anadvance within 60 days of the VWDUWLQJ� GDWH and upon production of aninvoice [and a financial guarantee for an equivalent amount];
[- EUR .……… [...% of the amount specified in Article 3.2] within 60 daysof receipt and acceptance of an interim report and [an interim financialstatement of the RSHUDWLRQ and] a request for payment;]
- the balance within 60 days of receipt and approval of the final report and afinal financial statement of the RSHUDWLRQ and a request for final payment.]
Option 3
[The &RPPLVVLRQ shall pay the grant to the EHQHILFLDU\ in a single instalmentwithin 60 days of receipt and approval of the final report and a final financialstatement of the RSHUDWLRQ and a request for final payment.]
4.2 Payments due from the &RPPLVVLRQ shall be made to the following bank accountof the EHQHILFLDU\:
[LQVHUW�GHWDLOV�RI�EHQHILFLDU\¶V�EDQN�DFFRXQW]
………………………………………………
………………………………………………
………………………………………………
………………………………………………
40
4.3 The &RPPLVVLRQ shall make payments in euros.�Real costs shall be convertedinto euros at the rate published in the C series of the Official Journal for the firstworking day of the month in which payment is effective.
Exchange losses are not covered by this agreement and shall be borne by theEHQHILFLDU\.
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The following reports and other documents shall be supplied by the EHQHILFLDU\ in ..…copies in the .……………………. language:
[- .…. interim report(s) at the following stages:]
[- other documents]
- a final report within two months following completion of the RSHUDWLRQ asspecified in Article 2.1.
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Any information supplied in connection with this agreement shall be in writing and shallbe sent to the following addresses:
For the &RPPLVVLRQ
European Commission
Directorate-General .……………………………………………………………………….
Attention .…………………………………………………………………………………..
Address : …………………………………………………………………………………..
For the EHQHILFLDU\
.…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...
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7.1 The following documents are annexed to this agreement and are an integral partof it:
Annex I: Description of the RSHUDWLRQ
Annex II: General terms and conditions applicable to grant agreements of the
41
European CommunitiesA
Annex III: Budget for the RSHUDWLRQ
7.2 Should the provisions of the annexes and those of the agreement differ, theprovisions of the agreement shall apply.
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Done at [Brussels], in duplicate, in .……...
For the EHQHILFLDU\ For the &RPPLVVLRQ
.............................. ................................
[name of legal representative
specified on the first page]
[name of the authorising officer bydelegation or subdelegation]
[signature] [signature]
[date]
A Reproduced as Annex III (which follows) to this shortened version of the Vademecum
42
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Subject to cases of IRUFH�PDMHXUH, the beneficiary shall do everything to ensure that theoperation is carried out in accordance with the conditions and arrangements specified inAnnex I to the agreement.
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2.1 The European Communities may not, under any circumstances or for any reasonwhatsoever, be held liable in the event of complaints deriving from the agreementconcerning damage or injury sustained by the staff or property of the beneficiarywhile the operation is being carried out.�No claim for compensation or repaymentaccompanying such a complaint shall be accepted by the European Communities.
2.2 Except in case of IRUFH�PDMHXUH, the beneficiary shall be required to indemnify theEuropean Communities for any damage resulting from the operation or fromfailure to carry it out properly.
2.3 The beneficiary shall assume sole liability towards third parties, including fordamage of any kind caused to them by the operation.
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The beneficiary undertakes to take all necessary precautions against the risk of anyconflict of interest and to inform the Commission immediately of any situation thatconstitutes or is likely to give rise to a conflict of interest.
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4.1 The beneficiary may terminate the agreement at any time by serving two months’formal written notice, without being required to pay compensation.�In this event,the beneficiary shall be entitled to payment of the grant only for the part of theoperation carried out.
4.2 The Commission may terminate the agreement should the beneficiary, for novalid or technical reason, fail to honour one of the obligations under theagreement and, after being given notice by registered letter to comply with theseobligations, has still failed to do so one month after receiving that letter.
In that event the Commission shall pay only the costs actually borne by thebeneficiary at the time of termination, and no costs related to contracts alreadyconcluded but for performance after the date of termination.
43
4.3 The Commission may terminate the agreement, without giving notice and withoutpaying compensation of any kind, where the beneficiary:
– is declared bankrupt, is wound up or is the subject of any similarproceeding;
– fails to comply with the provisions of Article 3 of this annex;
– makes false or incomplete statements to obtain the grant provided for inthe agreement.
In that event the Commission may demand full or partial repayment of amountsalready paid under the agreement.
4.4 Termination of the agreement for financial irregularities shall be withoutprejudice to the application of other administrative measures or penalties whichmay be imposed in accordance with Council Regulation (EC, Euratom) No2988/95 of 18 December 1995 on the protection of the European Communities’financial interests.
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The Commission and the beneficiary undertake to preserve the confidentiality of anydocument, information or other material communicated to them in confidence whosedisclosure could harm the other party.
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6.1 Unless the Commission requests otherwise, any notice or publication by thebeneficiary about the operation, including at a conference or seminar, mustspecify that the action has received funding from the European Communities.
Any notice or publication by the beneficiary, in whatever form and by whatevermedium, including the Internet, must specify that it reflects the author’s viewsand that the Commission is not liable for any use that may be made of theinformation contained in that notice or publication.
6.2 The Commission shall be authorised to publish, in whatever form and bywhatever medium, including the Internet, the following information:
– the name of the beneficiary, except where this may jeopardise thebeneficiary’s security,
– the purpose of the grant,
– the amount granted and the proportion of the total cost of the operationaccounted for by the funding,
– the geographical location of the operation.
44
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7.1 Unless provided otherwise in the agreement or its annexes, ownership, title andindustrial and intellectual property rights in the results of the operation and thereports and other documents relating to it shall vest in the beneficiary.
7.2 Notwithstanding the provisions of the first paragraph, the beneficiary grants theCommission the right to use freely and as it sees fit the results deriving from theoperation, subject to any confidentiality arrangements agreed between them andthe industrial and intellectual property rights already existing.
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Where the Commission undertakes an interim or H[� SRVW evaluation, the beneficiaryundertakes to provide it and/or the persons designated by it any document or informationwhich will assist with this evaluation.
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9.1 Any amendment of the agreement, including its annexes, must be set out in awritten agreement to be concluded in the same way as the original agreement.�Theparties shall not be bound by any oral agreement on such matters.
9.2 Where the change does not affect the basic purpose of the operation and thefinancial impact is limited to a transfer between headings of the budget involvingan increase of less than l0% of a heading for eligible costs, the beneficiary mayapply the change and shall inform the Commission without delay.
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The beneficiary may bring a complaint against decisions by the Commission concerningthe application or interpretation of the provisions of the agreement, including its annexes,before the Court of First Instance of the European Communities and, in the event ofappeal, the Court of Justice of the European Communities.
45
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11.1 Eligible costs of the operation are taken to mean costs which satisfy the followingcriteria:
– they must be directly linked to the subject matter of the agreement and beprovided for in the agreement;
– they must be necessary for carrying out the operation covered by theagreement;
– they must be reasonable and comply with the principles of sound financialmanagement, and in particular of value for money and cost-effectiveness;
– they must have been incurred during the lifetime of the operation asdefined in Article 2.1 of the agreement;
– they must have actually been incurred, be recorded in the beneficiary’saccounts or tax documents and be identifiable and controllable.
11.2 The following direct costs shall be eligible:
– the cost of staff assigned to the project, corresponding to real salaries plussocial security charges and other costs making up remuneration;
– travel and subsistence costs for staff taking part in the operation;
– purchase costs for equipment (new or used), provided that thesecorrespond to normal market costs and that the value of the itemsconcerned is written down in accordance with the tax and accounting rulesapplicable to the beneficiary.�Only the proportion of depreciation of theitem corresponding to the duration of the operation may be taken intoaccount by the Commission, except where the nature and/or use of the itemjustifies different treatment by the Commission;
– the costs of consumables and supplies;
– expenditure on subcontracting, provided that the Commission has givenadvance written agreement for subcontracting.�In this case the beneficiaryshall ensure that the terms applicable to it under the agreement are alsoapplicable to subcontractors;
– costs deriving directly from the requirements of the agreement(dissemination of information, specific evaluation of the operation,translation, reproduction, etc.), including, where appropriate, financialservice costs (in particular the cost of financial guarantees), but notincluding exchange risks;
46
– a “contingency reserve” of no more than 5% of direct costs eligible.
11.3 As a rule, a fixed percentage of the total amount of eligible direct costs shall beeligible as indirect costs.
Indirect costs shall be eligible provided they do not include costs assigned toanother item of the budget in the agreement.
Indirect costs shall not be eligible where the grant agreement concerns thefinancing of an operation conducted by a body which is already receiving anoperating subsidy from the Commission.
11.4 The following costs shall not be considered eligible:
– capital investment costs;
– provisions for possible future losses or debts;
– interest owed;
– debts;
– doubtful debts;
– exchange losses, except where the agreement makes explicit provision forthem;
– contributions in kind.�However, contributions in kind may be taken intoaccount when the maximum amount of the grant is set;
– inordinate or ill-considered costs.
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12.1 The beneficiary shall, within two months following completion of the operation,present a final statement of all eligible costs for the operation, together with a fullsummary statement of revenue and expenditure for the operation.
The beneficiary shall be required to present interim statements of eligible costsonly if the agreement expressly provides for this.
12.2 On the basis of an examination of the final statement, and without prejudice tothe provisions of Article 14 of this annex, the Commission shall pay the balanceof the grant as provided in the agreement.�Under no circumstances may the totalamount paid by the Commission to the beneficiary exceed the maximum amountof the grant set in the agreement, even if the total real costs exceed the estimatedtotal budget as set in Annex III to the agreement.
12.3 The maximum amount of the grant to be paid by the Commission shall bereduced proportionately if examination of the final statement in relation to thetotal budget as estimated in the agreement reveals that:
47
– the beneficiary has obtained interest on the part of the grant paid as anadvance;
– total revenue exceeds total expenditure;
– revenue generated by the operation exceeds the total revenue shown in thebudget estimate;
– eligible real costs are less than shown in the budget estimate.
12.4 The amount of the grant to be paid by the Commission shall be reduced by meansof:
– a reduction in the balance of the grant payable on completion of theoperation;
– a request for repayment of overpayments made to the beneficiary, if thetotal amount already paid by the Commission exceeds the final amountactually due.
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13.1 The Commission undertakes to pay the amounts due under this agreement withinsixty days of the date of the event giving rise to payment up to the date on whichthe sum is debited to the Commission’s account.
13.2 At any time during the sixty days following the date of the event giving rise topayment, the Commission may suspend this payment period by informing thebeneficiary that the request for payment is not admissible, either because the debtis not due or because the necessary supporting documents have not been producedor because the Commission considers it necessary to carry out further checks.�Thesixty-day period shall begin to run again from the date on which a correctlypresented request for payment is registered.
13.3 On expiry of the time limit specified in the first paragraph and without prejudiceto the second paragraph, the beneficiary may, within two months of receiving thelate payment, claim interest at the rate applied by the European Monetary Instituteto its operations in euros plus one and a half percentage points.
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14.1 The beneficiary undertakes to allow Commission staff and persons authorised bythe Commission appropriate access to the sites or premises where the operation isbeing carried out and to all documents concerning the technical and financialmanagement of the operation.�Access by persons authorised by the Commissionmay be subject to confidentiality arrangements to be agreed between theCommission and the beneficiary.
14.2 The beneficiary agrees to the Commission and the Court of Auditors of theEuropean Communities verifying the use to which the grant is put in accordancewith the Financial Regulation of 21 December 1977 applicable to the general
48
budget of the European Communities, as amended, throughout the duration of theagreement and for five years after the date of completion of the operation.
14.3 The beneficiary undertakes to ensure that any subcontractors accept the sameobligation.
14.4 Controls by the Commission or the Court of Auditors of the EuropeanCommunities may be carried out on the basis of documents or on the spot.
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15.1 In the cases referred to in Articles 4.1, 4.2 and Article 12.4 of this annex, thebeneficiary undertakes to repay to the Commission, in the manner and within thetime limits set by the Commission, any amounts which have been paid in excessof the real eligible costs of the operation.
15.2 In the event of termination of the agreement in the cases specified in Article 4.3of this annex, the Commission may request full or partial repayment of sums paidto the beneficiary.� The Commission shall determine the manner and the timelimits for such full or partial repayment.
15.3 Should the beneficiary fail to repay such amounts within the time limit set by theCommission, the Commission may increase the sums due by adding penaltyinterest at the rate applied by the European Central Bank to its operations in eurosplus one and a half percentage points.
15.4 Bank charges involved in the repayment of sums due to the Commission shall beborne entirely by the beneficiary.
15.5 The recovery decision drawn up by the Commission and transmitted to thebeneficiary owing a repayment to the Commission shall be enforceable within themeaning of Article 192 of the EC Treaty, Article 92 of the ECSC Treaty andArticle 164 of the Euratom Treaty.
15.6 Amounts to be repaid to the Commission may be set off against amounts due tothe beneficiary under any heading.
