University of Glasgow

FP7Brief Guide to ERC Projects

FP7• This information is intended to outline the key financial requirements of

Framework 7 (FP7) ERC grants. It is important to familiarise yourself with these facts in order to manage your grant effectively.

• 1. Post Award Introduction to ERC programme2. Eligible and Ineligible Costs & the Annex I Description of Work3. Personnel Costs & Timesheets4. EC Budget & the UFS5. Payments from the EC6. Reporting7. Audit8. Contract Amendments

1. Post Award Introduction to ERC Programme

• European Research Council grants are new in Framework 7. ERC Grants are awarded to a single researcher ('Principal Investigator') heading an individual research team to conduct a frontier research project on the condition that he/she is engaged by a legally established hosting organisation. There are two types of ERC grant:

• ERC Starting Grants

• ERC Advanced Grants

• Although the two different grants have different aims and are for different recipients, from the post-award perspective they can be treated in the same way. The below notes are to ensure you are aware of key information necessary to correctly manage your new ERC grant.

2. Eligible and Ineligible Costs & The Annex I Description of Work

The contract with the European Commission states that in order to be eligible costs must be:

• actual and incurred by the beneficiary

• incurred for the sole purpose of achieving the project objective and its expected results, in a manner consistent with the principles of economy, efficiency and effectiveness;

• they must be recorded in the accounts of the beneficiary; in the case of any contribution from third parties, they must be recorded in the accounts of the third parties;

• incurred during the period of the project (exception is some costs relating to final reports can be incurred up to 60 days after the end date), determined according to the usual management and accounting practices of the beneficiary (therefore the University’s Financial Regulations must be followed at all times)

• and indicated in the Annex I of the Grant Agreement (i.e. if under budget the project cannot spend on something which was not initially envisaged, simply to use up unspent funds)

Annex I

The Annex I is a key document, outlining the projects aims and deliverables, which the PI is responsible for managing. If an activity is outlined in the Annex I it is approved by the EC and is an eligible cost to the project. If you wish to undertake an activity not mentioned in the Annex I prior permission should be sought from your College.On some occasions an official contract amendment may be required if the Annex I does not include necessary information (i.e. if substantial sub-contracting is required but was not mentioned in the approved Annex I it is not possible to charge the sub-contracting costs to the grant unless the Annex I is amended).

The following costs are ineligible:

• identifiable indirect taxes including value added tax (see below for further information)• duties,• 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,• debt and debt service charges, excessive or reckless expenditure;• costs which do not meet the above eligibility criteria are also ineligible

The particular case of VAT: VAT is an ineligible cost on FP7 grants and as such, cannot be claimed from the EC. However VAT is no longer reclaimable from HM Revenue and Customs (as was the case for Framework 6 grants). This means that VAT incurred on FP7 grants is an additional cost which departments will need to fund from their share of departmental overheads earned. Any VAT coded to the grant will automatically be charged to the Department’s overhead account.

3.Personnel Costs & Timesheets

FP7 allows the charging of permanent staff to EC projects for the first time. Therefore a PI’s own time can be charged to the grant. Please note the EC are clear that Commission funding cannot give rise to a profit for the beneficiary therefore PI time can only be charged to the EC grant if it is not being reimbursed by another sponsor currently. However, the completion of timesheets is necessary on all FP7 projects, including ERC grants: the audit of all FP7 grants will require the verification of hours worked, even if 100% of time is to be spent on the project. Please refer to the Timesheet document for a detailed explanation. Monthly timesheets must therefore be completed for all staff employed or charged to an FP7 grant. The Research Support Office have designed a template timesheet which meets the EC's stringent requirements on time-keeping records and should therefore be used (unless an existing time-keeping system already exists).

4. EC Budget & UFS

The approved budget will be set up in full on the University Financial System (UFS). When coding expenditure to the grant standard expenditure categories such as staff costs, travel and subsistence will apply. The EC recognise that the initial budget is only an estimate therefore virement is allowed between the different cost categories. 20% overheads on direct expenditure can be claimed and the UFS will calculate these. Overheads cannot be claimed on any subcontracting (e.g. audit costs). The EC will reimburse 100% of eligible costs.

5. Payments from the EC

Although the full budget is set up by the Research Support Office on Agresso, the EC pay in instalments. The EC shall make an initial pre-financing payment (of approximately 65% of the total grant). Interim payments of the Community financial contribution shall be made corresponding to the amount accepted for each financial management reporting period, until the EC has paid 90% of the grant, at which stage no further payment is made until the grant ends.

6.Reporting

ERC reporting is different to a standard FP7 project as the required Scientific and Financial reports are normally handled separately, instead of both being due at the same time. Financial reports will normally be required more often than Scientific reports. Both periodic and final reports must to be submitted to the EC. Please check Article 4 of your grant agreement for the details of your reporting periods (when your reports are due). Reports must be submitted within strict deadlines at the end of each reporting period (normally 60 days after period ends).

The Research Support Office will prepare the financial reports and the PI is responsible for the Scientific Reports. The EC’s Reporting Guide for FP7 ERC awards is available here ftp://ftp.cordis.europa.eu/pub/fp7/docs/erc-guide-grantholders-partII_en.pdf (please note section II relates specifically to reporting, starting on page 54).

7. Audit

Your financial statement (Form C) may require an audit in order to obtain a certificate on the financial statement. This replaces the audit certificate in FP6. The requirements for audit have significantly changed in FP7. A certificate on the financial statement is only ever required once expenditure exceeds €375,000 so projects where the EC contribution is less than this will not be audited, even at the project end. For grants of 2 years or less then only one audit is required at the end of the project (even if €400,000 is spent in the 1st period no audit is required until the end of the project). The Research Support Office will arrange any necessary financial audits.In addition, the EC have the right to audit the project at any stage, including up to 5 year’s after the end date, therefore all records must be kept for at least this length of time.

8. Contract Amendments

The following situations may/will require an amendment to the Grant Agreement, if the following situation arises please refer to the Research Support Office immediately.

Transferring the grant to a new Host Institution. ERC grants are transferable, the Commission Project Officer should be approached at the earliest opportunity.

Change to the project duration. Any request to change the duration of the project must be submitted prior to the end date of the project. Extensions will only be granted if clearly justified.

Changes to the Annex I Description of Work. Should the project /deliverables/activities change substantially an amendment may be required. NB all sub-contracting must be mentioned in the Annex I so if not mentioned and required this would require an amendment.

If you have any further questions on the information in this document please contact the Research Support Office.