Budgeting in H2020 Outi Kauppinen, 28 Oct 2015, Rome HNN2.0/SiSNet2.0 Tekes, NCP Academy.

Budgeting in H2020

Outi Kauppinen, 28 Oct 2015, Rome HNN2.0/SiSNet2.0

Tekes, NCP Academy

Horizon 2020 Structure

Outi Kauppinen TEKES - Rome, 28 Oct 2015 2

1. Excellent Science

2. Industrial Leadership

3. Societal Challenges

The European Research Council

Future and Emerging Technologies

Marie Skłodowska –Curie Actions

Research Infrastructure

Leadership in Enabling and Industrial Technologies (LEIT) (ICT, Nanotech, Adv. mat., Biotech, Adv. manu Space)

Access to risk finance

Innovation in SMEs

Health

Bioeconomy

Energy

Transport

Climate Action

Inclusive Societies

Secure Societies

4. Spreading Excellence and Widening Participation5. Science with and for Society

Types of Actions in the WP

Focus today: 1. Research and Innovation Actions (RIA) 2. Innovation Actions (IA)3. Coordination and Support Actions (CSA)

Outi Kauppinen, Tekes, Rome, 28 Oct 2015 3

1. Excellent Science

2. Industrial Leadership

3. Societal Challenges

The European Research Council

Future and Emerging Technologies

Marie Skłodowska –Curie Actions

Research Infrastructure

Leadership in Enabling and Industrial Technologies (LEIT) (ICT, Nanotech, Adv. mat., Biotech, Adv. manu Space)

Access to risk finance

Innovation in SMEs

Health

Bioeconomy

Energy

Transport

Climate Action

Inclusive Societies

Secure Societies

4. Spreading Excellence and Widening Participation5. Science with and for Society

Link to the Annotated Model Grant Agreement

Guide to Understanding the Rules

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Who can participate?Who gets EU funding?


Definitions

• Legal entity/Participant/Beneficiary•Member States (MS)• Associated Countries (AC)• Overseas Countries and Territories (OCT) linked to the

Member States• Third countries

Outi Kauppinen, Tekes, Rome 28 Oct 2015

Legal entities that may participate in the actions (RfP Art. 7)


Any legal entity

BUT

Restrictions to the participation may be indicated in the relevant work programme

Conditions for participation (RfP Art. 9)

Minimum conditions Additional conditions

For ”standard” actions:At least, 3 legal entities, each established in different MS/AC, and independent of each other

To be set out in the work programme (i.e. number of participants, type of participants, place of establishment etc.)

For the SME Instrument, Coordination and Support Actions, the European Research Council, Co-fund Actions, as well as training and mobility actions:1 legal entity established in a MS/AC


Eligibility for funding (RfP Art. 10)The following participants are eligible for funding from the Union:• Entities established in a Member State, Associated Country* and developing countries **• Entities created under Union law• International European interest organisation

Legal entities established in industrialised (and emerging economy) countries and international organisations, may receive funding if:• Their participation is essential • There is a bilateral agreement between that country and the EU • The country is explicitly identified in the relevant work programme and call for proposal as being eligible for funding

*Associated Countries**Annex A of the Horizon 2020 Work Programmes


Eligibility for funding (RfP Art. 10)


The country is explicitly identified in the relevant work programme and call for proposal as being eligible for funding

Eligibility for funding: ”non-EU countries’” or “third countries” (RfP Art. 10)


Individual researchers

Question


Do third countries receive H2020 funding in this

call?

Question


A client asks how to handle a third country participant

in the consortium. What do you advise?

Horizon 2020 Funding Rates


Research and Innovation Action (RIA)

Coordination and Support Action (CSA)

Direct costs100 %

Indirect costs 25 % flat-rate

Total

All activities and all beneficiaries 100 euros 25 euros 125

Innovation Action (IA) Direct costs70 % (100%)

Indirect costs 25 % flat-rate

Total

Profit beneficiaries 70 euros 17,5 euros 87,5

Non-profit beneficiaries 100 euros 25 euros 125

One project — one funding rate….. almost!


Estimated Budget and Transfers


Estimated Budget and Budget Transfers (GA Art. 4)• The estimated budget for the action is set out in Annex II

• The estimated budget breakdown indicated in Annex 2 may be adjusted by transfers of amounts between beneficiaries or between budget categories (or both). This does not require an amendment according to Article 55, if the action is implemented as described in Annex 1.


Questions


We want to split the costs of one

subcontract between the partners. Ok?

Can the coordinator book hotels and plane

tickets for the consortium and then

invoice the other partners?

H2020 Eligible and Ineligible Costs


Types of costs: Direct and indirect (Art. 6.2)

Direct costs are specific costs directly linked to the performance of the action and which can therefore be directly booked to it.

Indirect costs are costs that cannot be identified as specific costs directly linked to the performance of the action.


Water

Travel

ElectricitySalaries

Admin services

Audit certificate


DIRECT COSTS INDIRECT COSTSActual costsReal. Not estimated or budgeted

Flat-rateCalculated by applying a percentage fixed in advance (25%) to other types of eligible costs. The following costs are excluded from the calculation:-subcontracting-in-kind contributions provided by third parties which are not used on the beneficiary’s premises-costs of providing financial support to third parties (if applies)-costs from specific cost categories (unit or lump-sum costs) that include indirect costs

Unit costsa) direct personnel costs of SME owners/natural persons not receiving a salary (calculated by the Com) b) direct personnel costs calculated by the beneficiaries in accordance with their usual cost accounting practices (average personnel costs)

Lump sum costsGlobal amount deemed to cover all costs of the action or a specific category of costs.

General eligibility criteria (Art. 6.1)

For actual costs For unit costs• Actually incurred by the beneficiary• Incurred in the project period • Indicated in the budget• Incurred in connection with the

action as described in Annex 1• Identifiable and verifiable, recorded

in the accounts• Complying with the applicable

legislation• Reasonable, justified and complying

with the principle of sound financial management (in particular regarding economy and efficiency)

• Calculated correctly• Actually used in the period• Necessary for implementing the

action• Number of units must be identifiable

and verifiable


Ineligible costs (Art. 6.5)

In particular:• Costs related to return on capital• Debt and debt service charges• Provisions for future losses or debts• Interest owed• Doubtful debts• Currency exchange losses• Bank costs charged by the beneficiary’s bank for transfers from EU• Excessive or reckless expenditure• Deductible VAT• Costs incurred during suspension of the implementation of action• Costs declared under another EU grant


Budget for the proposal and budget categories


Research and Innovation Actions, Coordination and Support Actions

Innovation Actions

(A) Direct costs – personnel costs (Art. 6.2.A)

• Personnel working for the beneficiary under an employment contract and assigned to the action• Costs for natural persons working under a direct contract with the

beneficiary• If under the beneficiary’s instructions and on the beneficiary’s premises• If the result carried out belongs to the beneficiary• The costs are not significantly different from ”normal” personnel costs

• Costs of personnel seconded by a third party against payments• Costs of owners of SMEs not receiving a salary (unit costs)• Costs of beneficiaries that are natural persons not receiving a salary (unit

costs)


(A) Direct costs – personnel costs

• Limited to salaries, social security contributions, taxes and other costs included in the remuneration, if due to national law or employment contract

• Non-profit legal entities: also additional remuneration (payments on top of the usual remuneration, resulting in a higher hourly rate) and depending on the participation in a specific EU project

• Personnel costs based on the last closed financial year



Additional remuneration• Option only for non-profit legal entities• Directly linked to the participation in the EU action = the researcher would

not have received it if she/ he had not participated in the action• Paid for additional work or expertise, fx ”for being Head scientist in the EU

project xy” • Part of the normal remuneration practices• Criteria used to calculate the extra payments are objective and generally

applied by the beneficiary

• Capped at 8.000 EUR per year (pro rata)



• Hourly rate = Actual annual personnel costs Number of annual productive hours

• Number of annual productive hoursa) 1.720 hoursb) individual annual productive hours c) standard annual productive hours

• Method chosen at institutional level


Example for calculation of:Individual annual productive hours

Individual annual workable hours

Plus Overtime

Minus Absence


Individual annual workable hours are calculated for the person concerned365 days — 104 days (Saturdays and Sundays) — 22 days (annual leave)— 8 days (public holidays) = 231 days x 8 hours per day = 1 848 hours

Example for calculation of:Standard annual productive hours

Calculation of the number of standard annual productive hours228 annual working days— 3 days average annual sick leave— 4 days of general training — 9 days other unproductive activities = 212 productive days Multiplied by 8 working hours per day = 1 696 hours


Standard annual workable hours are calculated for the entitity, per category, etc.365 days — 104 days (Saturdays and Sundays) — 22 days (annual leave)— 8 days (public holidays)— 3 days (collective agreement)= 228 days x 8 hours per day = 1 824 hours

Example for calculation of:Standard annual productive hours• This option can be used if:The number of ”standard annual productive hours” is at least 90%of

”standard annual workable hours”

• In our example: 90% of 1824= 1642This means that the beneficiary may apply its number of standard

annual productive hours


Questions


What tips would you have for a

coordinator to budget personnel

costs of the consortium?

We would like to pay of one our MSc

students a stipend to do part of our project’s work. Is

this ok?

Question


What information

should a timesheet include?


Template from the AGA. Not mandatory – you may use your own, but make sure it includes all relevant info.

(B) Direct costs – other direct costs (Art. 6.2 D)

• Travel costs and related subsistence allowances• Durable equipment and infrastructure (NB usually only depreciation)• Costs of other goods and services • Capitalised and operating costs of ‘large research infrastructure’


(B) Direct costs – other direct costs (Art. 6.2 D)

• Travel costs and related subsistence allowances• Durable equipment and infrastructure (NB usually only depreciation )• Costs of other goods and services • Capitalised and operating costs of ‘large research infrastructure’


(B) Other direct costs: costs of other goods and services• If purchased specifically for the action (!) and purchased according to

best value or lowest price (if appropriate) • If contributed in kind against payment • For instance: • Consumables and supplies• Dissemination costs (e.g. open access) and conference fees• Translation services• Costs of intellectual property rights, incl. protecting results• Internal invoices might be eligible• NEW: certificates on the financial statements (CFS) when required

If beneficiary normally considers these costs as indirect costs, the costs cannot be charged as direct costs in Horizon 2020



Question

Can we employ a patent attorney to help us?

What about open access costs after the project has ended? Are they eligible?

(C) Direct costs – subcontracting (6.2.B)

• Fulfil the general conditions for eligibility of costs• Cover tasks described in Annex 1 • Indicated in the budget of Annex 2• Best value for money, or, if appropriate, lowest price• Avoid any conflicts of interest

• NEW: the Commission may approve subcontracts during reporting even if the Annex 1 has not be amended (beneficiary’s own risk, though)


(D) Direct costs of providing financial support to third parties (Art. 15)

• Only when foreseen in the work programme• Cascading grants: Third party receives financial support (money) from

the beneficiary • Usually max 60 000 € per recipient• For ex. fellowships, seed money for start-ups or microloans• Prizes• Must be indicated in Annex 1


(E) Direct costs – costs of in kind contributions not used on beneficiary’s premises

These costs (E) are already included in the 'direct personnel costs' (A) and 'other direct costs' (B). They need to be declared specifically in this

column so that they can be subtracted from the sum of direct personnel costs (A) and direct other costs (B) before the indirect costs

(F) are calculated.


(F) Indirect costs (6.E)

• 25 % flat rate on direct costs minus:

• subcontracting costs • costs of in-kind contributions incurred by third parties outside of the

beneficiary’s premises • costs of providing financial support to third parties (if option applies) • costs from specific cost categories (unit or lump-sum costs) that include

indirect costs


(G)Special Unit Cost covering direct & indirect costs

• Costs for energy efficiency measure in buildings• Access costs for providing transnational access to researh

infrastructures• Costs for clinical studies• The unit cost applies ONLY to actions with clinical studies.


Costs for clinical studies – unit cost

• any clinical research involving a substantial amount of work related to the observation of, data collection from, or diagnostic or therapeutic intervention on multiple or individual patients):

• direct personnel costs of the doctors and other medical personnel and technical personnel (including data managers) that conducted the study

• direct costs of consumables used for the study; • direct costs of the medical equipment used for the study, including:

• depreciation costs • costs of service contracts necessary for their functioning (including specific cleaning,

maintenance and repair) • costs of other specific service contracts necessary for the study (including data

analysis, if subcontracted) • indirect costs for the study.


From budget to Annex 2



What types of budgeting

questions have YOU run into?


This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement No 633563.

Budgeting in H2020 Outi Kauppinen, 28 Oct 2015, Rome HNN2.0/SiSNet2.0 Tekes, NCP Academy.

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