TBTIMPACTS SIXTH FRAMEWORK PROGRAMME SPECIFIC TARGETED RESEARCH PROJECT Assessing impacts of TBT on...

TBTIMPACTSTBTIMPACTS

SIXTH FRAMEWORK PROGRAMME

SPECIFIC TARGETED RESEARCH PROJECT

Assessing impacts of TBT on multiple coastal uses TBTIMPACTS

Contract no.: INCO-CT-2005-510658

Partner 1 ENEA – Financial CoordinationPartner 1 ENEA – Financial Coordination


Principles in processing financial statementsPrinciples in processing financial statements

Compared to FP5, the abolishment of the concept of costs categories

Compared to FP5, reliance on audit certificates

Compared to FP5, move away from micro-management

More flexibility and autonomy to consortium.


Principles of cost reimbursementPrinciples of cost reimbursement

CONCEPT OF ELIGIBLE COSTS

Actual, economic and necessary

In accordance with the usual accounting principles of the contractor

During the duration of the project … except … drawing up the final reports … which may be incurred during the period of up to 45 days after the end of the project

Recorded in the accounts …

In case of contributions made by third parties … be recorded in the accounts of the third party


Principles of cost reimbursementPrinciples of cost reimbursement

CONCEPT OF NON-ELIGIBLE COSTS.

Any identifiable indirect taxes, including VAT or duties; Interest owed; Provisions for possible future losses or charges; Exchange losses; Costs declared, incurred or reimbursed in respect of another

Community project; Costs related to the return on capital; Debt and debt related charges; Excessive or reckless expenditure; Any cost which does not meet the conditions established in

Article II.19.1


Principles of costs reimbursementPrinciples of costs reimbursement

Reimbursement of eligible costs claimed by contractors

In accordance with the cost reporting models used by each contractor

Maximum reimbursement rates of eligible costs per type of activity

Approval of requested periodic reports

Subject – if required in the contract - to the submission of an audit certificate

Taking into account the receipts of the project


New concepts – reminderNew concepts – reminderCost reporting modelsCost reporting models

FC: actual direct and indirect costs EC contribution: usually 50 % (management 100%)

FCF (variant of FC): actual direct costs + flat rate for indirect costs (20% of direct costs minus subcontracting)

EC contribution: usually 50% (management 100%)

AC: actual additional non-recurring direct costs + flat rate for indirect costs (20% of direct costs minus subcontracting)

EC contribution: 100%


New concepts - New concepts - Cost reporting models – reminderCost reporting models – reminder

SMEs, non-commercial or non-profit organisations established either under public or private law, international organisations: FC/FCF

Physical persons: AC mandatory

Private companies (other than above): FC

AC: only for those non-commercial or non-profit organisations established either under public or private law or international organisations that do not have an accounting system that allows the share of their direct and indirect costs relating to the project to be distinguished.


New conceptsNew conceptsCost reporting models - reminderCost reporting models - reminder

Direct costs for contractors using the Additional Cost

model

direct costs of personnel shall be limited to the actual costs of

the personnel assigned to the project where the contractor has

concluded with the personnel

a temporary contract for working on Community RTD projects

a temporary contract for completing a doctorate

a contract which depends, in full or in part, upon external funding

additional to the normal recurring funding of the contractor. In

that case, the costs charged to this contract must exclude any

costs borne by the normal recurring funding


New conceptsNew conceptsCost reporting models - reminderCost reporting models - reminder

Partners using the AC cost reporting model will have to identify all the

resources employed in the project and provide a global estimate of all

their costs - not only additional eligible costs

Partners using the AC cost reporting model - exclude any direct

additional costs specifically covered by contributions from third parties

Partners using the AC cost reporting model may charge permanent

personnel under Management Activities under certain conditions –

however for these costs no indirect costs can be claimed


Financial reporting guidelines available at:

http://www.cordis.lu/fp6/find-doc-management.htm#finguid

Project reporting guidelinesProject reporting guidelines



The financial coordinator ENEA will be responsible for the overall financial and administrative management of the consortium. It will:

act as intermediary between the consortium and the Commission;

receive all payments made by the Commission;

manage community contribution regarding its allocation between contractors and activities in accordance with the contract and decisions taken by the consortium;

receive cost statements from participants;

submit the financial report.


project duration 48 months

start date 1st March 2005

end date 28th February 2009

project financial reporting periods P1: from month 1 to month 12 P2: from month 13 to month 24 P3: from month 25 to month 36 P4: from month 37 to month 48

Pre-financing is normally renewed at each reporting period

Financial reportsFinancial reports


Submission of ‘financial’ reportsSubmission of ‘financial’ reports

Financial reports will be submitted every year (within 45 days following the end of the respective periods) to the European Commission (EC); the yearly report (prepared by ENEA) must include:

(please read “guide_reporting_in_fp6-main_en”, pag 9)

a justification of the resources deployed by each contractor, linking them to activities implemented and justifying their necessity, prepared by each contractor, arranged in aggregate form by ENEA

the Form C Financial statement set out in Annex VI, provided by each contractor for that period and sent to ENEA

a summary financial report consolidating the claimed costs of all the contractors in an aggregate form, based on the information provided in Form C, prepared by ENEA

Audit certificates, provided by each contractor(i.e month 12 and 48, as indicated pag 12 Annex I of the contract)


Financial reportsFinancial reports

1 month before ending the reporting period form C and all the guidelines to be followed will be available for download at http://www.afs.enea.it/massani/tbtimpacts

1 week before ending the reporting period each contractor shall send by e-mail to ENEA:

Draft Form C filled in Draft of justification of cost

ENEA will start the preparation of the reports and will check for formal mistakes

2 week after ending the reporting period at latest each contractor shall send to ENEA by express mail (courier):

three form C filled and signed Final justification of cost Audit certificate (months 12 and 48)


Submission of ‘financial’ reportsSubmission of ‘financial’ reportsAudit CertificatesAudit Certificates

Auditing will be done twice (i.e month 12 and 48, as indicated pag 12 Annex I of the contract);

each contractor shall provide an audit certificate (attached to Form C Financial statement) prepared and certified by an external auditor, certifying that the costs incurred during that period meet the conditions required by this contract.

The cost of this certification is an eligible cost under the activity relating to Management of the consortium.

The external auditor essentially provides ‘reasonable assurance’, i.e. there is a ‘high degree of confidence that information is valid and unaltered’


Submission of the financial statementsSubmission of the financial statementsAudit certificatesAudit certificates

An audit certificate certifies that: The amount of the total eligible costs

o must be actual, economic and necessary for the implementation of the project;

o must be determined in accordance with the usual accounting principles of the contractor;

o ……….(see annex II.19 of the contract)

An audit certificate must be signed and dated. The organisation providing the certificate must clearly identified.

It is strongly recommended that the external audit or public competent officer use the model prepared by the Commission – see financial guidelines.


Audit CertificateAudit Certificate

Each contractor is free to choose any qualified external auditor, including its usual external auditor, provided that it meets the cumulative following professional requirements:

a) the external auditor must be independent from the contractor; b) the external auditor must be qualified to carry out statutory audits of

accounting documents in accordance with the 8th Council directive 84/253/EEC of 10 April 1984 or similar national regulations

A contractor that is a public body may opt for a competent public officer to provide an audit certificate, provided that the relevant national authorities have established the legal capacity of that competent public officer to audit that public body.

Each contractor continues to be responsible to the Commission for the costs claimed


A periodic report on the distribution of the EC payments among contractors will be prepared by ENEA and sent to EC at completed funds transfer

Further paymentFurther payment


Renewal of pre-financingRenewal of pre-financing

Case with audit certificate – See Article 8.2 (b) of the contract (1° and 4° reports)

Within 45 days following approval by the Commission of the reports related to each reporting period:

A payment which settles the amounts justified and accepted during the reporting period

Pre-financing of 80% of the estimated Community financial contribution corresponding to the subsequent period and the first six months …

Where the amount justified and accepted for the reporting period is less than the pre-financing already paid to the consortium, that part of the pre-financing is re-qualified as a payment and the Commission shall deduct the difference from the subsequent pre-financing

Where the amount justified and accepted for the reporting period is more than the pre-financing already paid to the consortium, the pre-financing is re-qualified as a payment and the Commission shall add the difference as a complementary payment at the time of the payment of the subsequent pre-financing


Renewal of pre-financingRenewal of pre-financing

Case of a reporting period without audit certificates (2° and 3° reports)

Similar wording in Art. 8.2 (b) however no ‘settlement of payment’ and Art. 8.2 (d):

Where less than 70% of a pre-financing has been used at the end of a reporting period, and …, subsequent intermediate pre-financing may be paid be only

If an audit certificate is provided … On the basis of a complementary periodic management report …

In addition in all cases one can never pay more than foreseen in the contract


TBTIMPACTS: example further paymentsTBTIMPACTS: example further payments

a 4 year project with a yearly reporting period;

total Community contribution is 799,841 Euro split as follows:

279,035 Euro for the first year 170,099 Euro for the second year (of which 98,952 year for the first six

months of the second year) 181,839 Euro for the third year (of which 93,954 Euro for the first six

months) 168,868 Euro for the fourth year (of which 112,431 Euro for the first six

months)

80% pre-financing system

t0 refers to the start of the project, t1 is after 1 year, t2 is after 2 years and t3 after 3 years



At t0:

Calculation:

Pre-financing: 80% (year 1 + 6 months of year 2) i.e. 80% of (279,035 + 98,952) = 302,389 €

Payment and accounting: Payment: 302,389 € Pre-financing at t0: 302,389 € ‘Settled’ pre-financing: 0 €



At t1:

Accepted funding: 279,035 Euro

Calculation: Renewal of the pre-financing: 80% of (year 2 + 6 months

year 3), i.e. 80% of (170,099 + 93,954) = 264,053 € + take account of difference amount justified and accepted

and pre-financing, i.e. renewal pre-financing + (accepted – pre-financing) or

264,053 Euro + (279,035 – 302,389 ) = 240,699 €

Payment and accounting: Payment: 240,699 € Pre-financing: 264,053 € ‘Settled’ pre-financing: 279,035 €


TBTIMPACTS: example further paymentsTBTIMPACTS: example further payments At t2:

Accepted funding: 170,099 Euro Calculation:

Renewal of the pre-financing: 80% of (year 3 + 6 months year 4), i.e. 80% of (181,839 + 112,431) = 294,270 Euro

+ take account of difference amount justified and accepted and pre-financing, i.e. renewal pre-financing + (accepted – pre-financing) or 294,270 Euro + (170,099 – 240,699 ) = 223,670

Euro. Payment and accounting:

Payment: 223,670 Euro, Pre-financing: 294,270 Euro, ‘Settled’ pre-financing: 449,134 Euro.

At t3: Accepted funding: 181,839 Euro Calculation:

Renewal of the pre-financing: 80% of (year 4 + 6 months year 5), i.e. 80% of (168,868 + 0) = 168,268 Euro + take account of difference amount justified and accepted and pre-financing, i.e. renewal pre-financing + (accepted – pre-financing) or 168,868 Euro + (181,839 – 294,270 ) = 56,437

Euro. Payment and accounting:

Payment: 56,437 Euro, Pre-financing: 168,268 Euro, ‘Settled’ pre-financing: 630,973 Euro.


Last payment after acceptance of final reports:

799,841- (630,973 + 56,437) = 112,431 €



ENEA should receive further payments from EC within maximum 90 days after reporting

Once received the further payments ENEA will apply the same “EC prefinancing” rules

Fund transfer will be done taking into account the breakdown of costs and the financial report of each partner

ENEA funds transfer procedure will last not less than 3-4 weeks

Moreover, partners are request to send to ENEA intermediate “no detailed” financial reports each six months (starting from month 18)

In order to check that no significant differences in budget lines are occurring

TBTIMPACTS: further paymentsTBTIMPACTS: further payments

TBTIMPACTS SIXTH FRAMEWORK PROGRAMME SPECIFIC TARGETED RESEARCH PROJECT Assessing impacts of TBT on...

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