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SOCRATES PROGRAMMESOCRATES PROGRAMME

TN Projects 2004 & 2005TN Projects 2004 & 2005Contractual and Financial ManagementAdministrative and Financial Handbook

Maryline Fiaschi, 13/02/2006

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Agenda

Essentials

Financing of projects

Handbook Structure

Approved Budget

Eligible Expenditure

Financial Management

Partnerships

Partner Agreements

Reports & closure

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Essentials

• Many projects fail because the Contractor did not understand the basic rules

• Where are the rules contained – Grant Agreement and Annexes (including the Handbook), EU’s Financial Regulations

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Financing of 2005 ContractsNo more lump sums for staff costs – details of these costs have to be now given at the final report

EU grant is based on a fixed percentage of the Approved budget of the project (see points A.4 and A.5 of the Grant Agreement).

The above amount represents the maximum grant (see point A.3 of the Grant Agreement). You can never get more than the maximum.

Greater flexibility in the budget transfer rules

The more detailed financial rules are contained in the Handbook

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Handbook StructurePurpose of the Handbook• Annex to the Agreement

and enforceable• Aid for beneficiaries and a

management tool• Definitions (Beneficiary,

Partner Legal Representative, Approved budget)

Chapters• Approved budget• Modification of the

Agreement• Eligible Expenditure• Financial Management• Reports• Supporting Documents &

Audit

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Approved budgetHow has it been assessed ?

* External Experts* Project aims and rules on eligibility

1. An amount approved for Staff costs

2. An amount approved for Direct costs

3. General costs

The co-financing percentage of the Community is applied to the total of points 1-3 above to arrive at the maximum grant that is awarded by the Commission

Concept of Approved Budget (Annex II of the Agreement) – reference point for assessment of the final report

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Contractual modificationsPartnership

Workplan & Results

Budget

Bank information

Extension of the Eligibility period

Final report deadline

No possible extension for progress report deadline!

REQUEST must be introduced through the « Contractual modification form »

duly signed by the legal representative At least 60 days before the end of the eligibility period

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Eligible expenditure

• General Principles• Costs must be reasonable and in accord with the

principles of sound financial management. Must be incurred by the partnership and necessary.

• No member organisation of the partnership may derive a profit from the grant

• All expenditure for Staff and Direct costs must be justified by invoices or accounting documents of an equivalent value

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Eligibility of ExpenditureIneligible Costs

Expenditure incurred before or after the end of the eligibility period (A.6)Excessive or reckless expenditureVAT unless the Beneficiary cannot recover itExpenses for travel to and from countries not eligible to participate in Socrates

Eligibility

Relate directly to approved activitiesAre in accordance with the rulesRelate to activities involving eligible countries

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Staff Costs – key points

The staff costs related to all persons involved in the project by insitution can be charged into the project, according to the time effectively spent

These costs shall be calculated on the hourly, daily, monthly gross cost multipled by the number of hours, days or months worked.

The beneficiary and partners must keep full and accurate records

Personnel costs should not exceed the norm for the labour market concerned

Volunteer costs not eligible – real costs only

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Travel & subsistence costsCalculation of subsistence costs: 1 per diem / night + ½ per diem for travel

Subsistence costs eligible for external experts coming from outside Socrates countries (but not Travel costs)

Travel & subsistence costs for students participating to the plenary meeting are eligible

Errors to avoid : Travel outside of Socrates countries Declaration of collective costs for subsistence (restaurant) Subsistence costs in excess of the limits

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Equipment and materialsHardware and equipments, when > 1000 EUR are are submitted to depreciation (33.33 % per annum)Adjusted to the percentage of use in the projectPieces of equipment purchased before the project period are not eligible

Errors to avoid:- Date of purchase missing- Wrong depreciation rate applied or not adjusted to

real use

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Sub-contracting costs

• Subcontracting costs:“Any amount paid to an outside body which is not part of

a member organisation of the partnership and which carries out specific & limited work for the project.”

• Only allowed if the staff of the partners do not have the skills required

• Cannot subcontract the basic activities (entire management & general administration)

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Sub-contracting costs

Three quotes if more than 10.000 € in total (including linked costs). Must be able to supply copies of these if required

Consultants fees should not normally exceed 400 € per day

Cannot exceed 30% of the total eligible costs of the project

Costs of an independent consultant working full-time or frequently for the project should be reported under staff costs

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Other and General Costs

Other Costs – Includes the costs of producing, translating and publishing documents when performed by the partners

General Costs – Normal overhead costs of the organisation. They do not have to be detailed in the final report and no proof required. Limited to 7% of the total eligible costs

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Financial ManagementBank Account (in €, Name of beneficiary) – cash withdrawals should be avoidedAccounting System- Analytical – identifying the sources of funding and the project expenditure. Proof of payment will be required for Direct and Staff costs - Keep track of time sheets of persons who have worked on the project (identifying the person and time spent and activity)Partnership- Partners must be in the application or approved later by the Executive Agency- Ensure active cooperation (management structure )- Partnership agreementsRemark: Can we pay our partners or sub-contractors after the end of the eligibility period?

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Partnership Agreements

Duties and obligations of the partners

Delivery schedule of results

Management Structures for the project and powers

Budget and Grant share

Quality and evaluation system

Payment conditions – payment based on results or some other system?

Reporting & accounting – regular reporting is a good monitoring tool

IPR

Termination and notice provisions – allow for exits

Choice of law and Incorporation of EU agreement

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Transnational PartnershipsWhat makes a successful project

Identify the risks and challenges at the beginning of the project and at key points

Work with known partners

Spend time developing trust within the partnership

Coordinator needs good communication skills

Ensure institutional support

Clear and transparent financial and management practices – proper allocation of tasks

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Reports Qualitative and quantitative assessment

(products/results expenditure) Progress Report for 2 & 3 years projects Final Report (end of eligibility period + 3.5 months)

See Contractual Timetable (annex of the contract)

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Progress reportProgress report cannot be submitted before the deadline unless 70% of the first pre-financing has been used and all activities foreseen for the period have been achieved

The deadline for the submission of the Progress report cannot be extended !!!!

If < 70% of pre-financing was declared at Progress report stage:

As soon as 70% is spent submit a separate payment request, using “ Declaration of beneficiary” and “Section 2 Declaration of Expenditure“ of the Progress Report Form.

Do not send the entire Progress Report again.

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Evaluation criteriaPurpose of the progress report

To provide a clear « state of affairs » of the project, at a certain moment

To allow visibility on potential problems/difficulties

To seize the opportunity to update the workplan, budget and partnership

To declare real expenditure incurred in the first part of the project life

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Purpose of the final report

To allow an overall evaluation of the project. All work must be completed

The final products and outcomes are compared with what was planned in the application taking into account the progress report and the amendments

To declare the real expenditure incurred during the life of the project

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And then?

Final report analysis Content Finances (evidences of costs may be required)

A settlement letter sent to beneficiary Comments and recommendations Final (positive or negative) balance Explanatory note related to the final calculation of the Grant

Possibility to appeal against the Executive Agency’s decision during 60 days after the date of the closure letter

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Thank you!

For any information, please contact :

Maryline Fiaschi

Executive Agency, Rue Colonel Bourg 135-139, B – 1140 Bruxelles

Maryline.FIASCHI@cec.eu.int

http://europa.eu.int/comm/education/programmes/socrates/Erasmushttp;//europa.eu.int/comm/dgs/education_culture/documents/socrates