Vossen - Financial Legal Issues Fp7 March 2011 Enlace & Eucarinet 2

7/30/2019 Vossen - Financial Legal Issues Fp7 March 2011 Enlace & Eucarinet 2

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FINANCIAL & LEGAL ISSUES FP7 - March 2011 ENLACE & EUCARINET THIS PRESENTATION IS NOT LEGALLY BINDING

European Commission

Research & Innovation Directorate General

International Cooperation

Paul Vossen

[email protected]

With major contributions from : Thierry Callens (EC Research & Innovation) andKim Kruisinga (NLNational Contact Point FP7 Legal & Financial Affairs and

International Cooperation)

Implications of FP7 participation


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FP 7 Basic Principles

Transparency and equal treatment

Principle of reimbursement of costs (majority of cases) some are eligible, some are not eligible not all of costs even if eligible - are reimbursed:

See the presentation by Ms Kim Kruisinga

Non profit / Receipts Transfers third parties beneficiary (for the project)

Income generated by the project Co financing principle

Ex post controls (audit) - Ex ante controls (reporting)


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Principle of co-financing:


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Negotiation settled contractualisation

(between EC and coordinator)

hence:

Consortium Agreement mandatory(except if excluded by Call)


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1 project, 2 contracts:

Grant Agreement

Contract between the consortium and the

European Commission

Consortium Agreement

Contract between the consortium members

Therefore:


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Legal Framework

GUIDELINES (e.g. Financial, IPR, Negotiations

RULES FOR

PARTICIPATION

MODEL GRANT AGREEMENTCore Grant AgreementAnnex I Description of work

Annex II General conditions

Annex III Specific provisions

Annex IV Form A accession beneficiary

Annex V Form B accession new beneficiaryAnnex VI Form C Financial statement

Annex VII Form D / E Terms of reference certificates

TREATY OF THE

EUROPEAN UNION

CONSORTIUM

AGREEMENT


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Signature and entry into force:

GA enters into force on the day of signature by the Commission

Contractual link of all beneficiaries with the Commission (Form A)

Distribution of pre-financing to coordinator: within 45 days followingdate of entry into force of GA

Distribution of pre-financing to beneficiaries: when at least 3beneficiaries have signed Form A- contract is valid- and only to them.No money without signed Form A

Form A: must be signed by the legal representative of the givenbeneficiary as identified in the GA.

Project begins on the date established in the Grant Agreement

The project start date can be before the GA enters into force (prior tosignature by the Commission), if duly justified


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The Core Grant Agreement


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Content

Obligations between EC and consortium

Community financial contribution

Reporting periods

Project start & end date

Description of Work (Annex I)

Annex II- VII


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One pre-financing(after signature of the contract)

Interim paymentsbased on contractual periodicfinancial statements (EC contribution= amountsjustified & accepted * funding rate < or =100 %)

Retention (10%) at the end of period before final

period

Final payment

(Not legally binding)


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The consortium agreement



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Content

Obligations between partners

Organizational provisions

Financial provisions

IPR

Disputes


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For info & checklist on Consortium Agreements:

http://cordis.europa.eu/fp7/find-doc_en.html

Or:

copy document on your USB-key



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Third Parties,

sub-contractors,etc.




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What is a third party ?= Legal entity that does not sign the Grant Agreement but

contributes to activities and is not a subcontractor

Three situations of third parties Third parties making resources available to thebeneficiary for free no costs

Third parties making resources available to thebeneficiary against reimbursement costs

Third parties carrying out part of the work costs

Third party must be identified in Annex 1 of the GrantAgreement !

If not, costs of third party ineligible

Third Parties




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subcontractor = special type of third party

Agreement based onbusinessconditions(price including a profit)

Motivation of subcontractor is pecuniary

Work without direct supervision of beneficiary

Can not be for a core part of the work (limited project part)except if indicated in annex 1

Usually for specialised jobs (no possibility internally or more

efficient to use subcontractor) Possible for minor tasks without prior EC agreement (ex. printing

of material, leaflets, catering, etc.

Tailored product/service

Subcontractor



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Part3

Part2

CooPart1

Part5

Part4

EC

3rd

Party

DoW - AnnexI

3rd

Party

Subcontract

minor or

major tasks

X

Subcontract

minor tasks

Subcontract

minor tasks

Subcontract

major tasks

X


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How it works in EC


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Sole official contact between EC and project = coordinator

Partners always contact coordinator forquestions/problems/doubts

When necessary coordinator contact EC officers

PO = Project Officer (Mr Paul VOSSEN) for general and technical matters about the project

LO = Legal Officer (Mr. P. BOVING or P.PAPADOUPOULOS) for legal query/matter

FO = Financial Officer (Mr . Thierry CALLENS: EUCARINET;Alain SCHOONJANS: ENLACE) for financial administrative query/matter


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PO/LO/FO are available for support

for information to find solution to specific cases

Do not hesitate to ask for EC officer(s)assistance during specific meetings (always

good opportunity to discusssituation/problems)


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Single entry point for communication (payments, reporting,dispute, etc.) with EC

The coordinator shall: Represent partners

Administer the Community financial contribution regarding itsallocation between beneficiaries and activities, in accordance with grantagreement and decisions taken by the consortium and keep relevantrecords;

collect and review reporting documents to verify consistency withthe project tasks but also coherence between all information declaredbefore transmitting them to the Commission;

monitor the compliance by beneficiaries with their obligationsunder this grant agreement.

management (when necessary)of beneficiariesaccess rights inelectronic reporting tools

Role of the coordinator


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For Coordinator

DEFINE ASAP after the start of the project and for all partners a clearfinancial management and monitoring of costs and funds

IMPLEMENT a common monitoring system/tool (excel, access, ) includingall details by sort of costs

ENSURE on going financial and administrative monitoring with each partner

CONTACT EC officers for doubt, questions, advices,

For ALL

READ grant agreement / General Conditions / FP7 financial rules

ORGANISE internal administrative/financial monitoring in order to be able toprovide EC with details (ex ante + ex post).

CONTROL the eligibility of any cost in advance

RECORD and COLLECT details and justification on a regular basis directavailability report easier

KEYS for a SUCCESSFUL project (financial)


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Reporting


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Reporting (1)

Transparency + equal treatment

Ex antecontrols by Direction in charge

Ex postcontrols by EC

Purpose provide EC officers with clear andprecise information for approval of activities and

costs.

Financial report actuality with respect toprovisional budget of theproposal.


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Reporting (2)Submission:

Periodic reportsto be submitted by coordinator60 daysafter end date ofeach intermediary period (also last period including original form C):

Final reportsto be submitted by coordinator60 daysafter end date of project(including original form C)

Approval:

105 days (evaluation and payment) No tacit approval of reports (NEW) Automatic payment of interests in case of late EC payment (except

for public bodies of EU MS)

After receptionCommission may: Approve Suspend 105 days term in case of request revision/completion/correction

by EC officers Reject full or part of the costs giving justification (also possible termination

if important problem)


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European

Commission

Coordinator

SCHEDULE OF THE PROJECT

PERIODIC REPORTBudget &Finance

Partner 1:Justification CostsFormC

CFS ?

Report / Claims

Activity report

Use of resources

Financial statement

Supplementary report

Coordinator

Payment

Pay Beneficiary 1

Pay Beneficiary 2

Pay Beneficiary 10

Report onpayments

60 days 105 days

Partner 10:Justification Costs

FormC

CFS ?


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Reporting (3)Use the template for the costs details:

staff (amounts, name, function, status (additional/permanent),working time spent on which WP and tasks (in hours/months),salary rate hourly/monthly)

travel (amounts, participants, dates, destination, purpose/linkwith project)

equipment (nature, net price, depreciation rate, % use, amountclaimed, purpose/link with project),

consumables (amounts, nature and list of main components)

subcontracting (amounts, nature, name of subcontractor, tasks,

EC agreement) other costs (only for costs not covered by other FP7 headings of

costs, precise details about the nature of each cost)

indirect costs (for ICM not flat rate exact method of calculationand nature of the costs covered)


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Reporting (4)

Possible rejection of costs in case of:

late answer or lack of answer to EC request;

incorrect or incomplete information submitted;

lack of supporting document justifying a specific case(for example depreciation of durable equipment);

difference between costs claimed and costs detailled.


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Frequent problems: Details (especially financial figures and details) not available or

not in line with EC requirements

Costs ineligible

Costs not declared in correct FP7 class of costs Delay in submission

Solutions

from the projects start date, consider the level of details and

class of costs expected by EC in your own monitoring; Check the eligibility of any cost in advance

Anticipate deadline ! Prepare all details for yearly meetings,discuss issues with Coordinator, organise internally with youraccounting department if relevant, etc

Reporting (5)


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Reporting (6)

How to submit:

Participant portal (PP)

http://ec.europa.eu/research/participants/portal/appmanager/

participants/portal

Unique platform for all project related exchanges

URF: participant data: address, status, ICM, etc

NEF: negotiation tool: contracts + amendments

SESAM: tool for submitting technical reports

FORCE: tool for submitting financial reports

Access to FP7 information (already available on Cordis)

Etc


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Reporting (7) access PP

You have to get access to ECAS and register as a new user to ECAS(only 1st time specific helpdesk available)


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Reporting (8)

SESAM Specific tool for submission reports and deliverable


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Reporting (9) FORCE Specific tool for submission form C

Signatory form C = legal representative indicated in GA (or amendment)


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EC Audit FP7 larger autonomy (no CFS) BUT

at any time during the development of the project and up to 5 years after theend of the project, EC may arrange for audit to be carried out by externalservices or EC services themselves

EC policy increased number of audits on the spot

Periodic Audit batch by sampling (in 30 months 15 partners INCO projectsselected)

Audit on request by EC officer (PO/FO) if

lack of cooperation and/or transparency

doubt about actuality of costs declared

May be Commission staff or outsourced Possibility of extension of audit results to all GA with the same beneficiary

(extrapolation)

Example of documents the auditor will want to see: employment contract,timesheets, invoices, plane tickets, accommodation related invoices, proofof transfer of funds to partners


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Sanctions Recovery procedures (possible offset by EC (centrally) on

other projects from the beneficiary)

Liquidated damages (if costs overstatement) strictly

applied by DG-RTD= unjustified Community financialcontribution x (overstated amount/total Communityfinancial contribution claimed)

Financial penalties (if false declarations)

Between 2% and 10% of the EC contribution


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No financial collective responsibility

All beneficiaries contribute to the Fund toinsure against financiallossesof the project

The Fund belongs to all beneficiaries of Grant Agreements underFP7

The contribution equals5%of the EC financial contributionforeseen for each participant

Financial interestgenerated by the Fund will serve to coverfinancial risk

In principle the amount contributed to the Fund will bereimbursed at the end of the action*

Verification of financial viability only in some specific cases

* Up to 1% of the EC contribution due to the beneficiary can be deducted (except forpublic bodies, legal entities guaranteed by MS/associated states, higher andeducation establishments)

Guarantee Fund


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FINANCIAL & LEGAL ISSUES FP7 M h 2011 ENLACE & EUCARINET THIS PRESENTATION IS NOT LEGALLY BINDING

Thank you for your attention

Documents

Vossen - Financial Legal Issues Fp7 March 2011 Enlace & Eucarinet 2