1 eligibility: simplified costs the cocof guidance note & scope of application laurent sens...
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Eligibility: Simplified costsThe COCOF Guidance note
& scope of application
Laurent SENS
European UnionCohesion Policy
“Train the trainers”European Commission seminar for managing and
certifying authorities 17 June 2010
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Objectives of the presentation
• Presentation of the COCOF working document on the simplified cost options
• Scope of application of the simplified costs options
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Triggering event: the amendments to the ESF/ERDF Regulations• With the amendment there are now 4
options to manage grants co-financed by Structural Funds– real cost, – flat rate for indirect costs (already existing
for ESF but new for ERDF).2 new options for both funds: – standard scale of unit cost and – lump sums
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Drafting the COCOF guidance note• a single document including all the options and all
the management and audit issues.
• Based on:– Information note to the Council with additional
details and ESF ‘acquis’– Discussions during the ESF Technical Working
Group, COCOF Technical Meetings, COCOF meetings
– Discussions with the national audit authorities and the European Court of Auditors
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Structure of the Guidance note• 5 parts + annex:
– INTRODUCTION– CHAPTER 1: Indirect costs declared on a flat
rate basis– CHAPTER 2: Flat rate costs calculated by
application of standard scales of unit costs– CHAPTER 3: Lump sums– CHAPTER 4: Common horizontal provisions– ANNEX: Legal bases
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The Guidance note: Introduction
• Origin of the options
• Purpose of the working document
• Need for an audit approach
• Link to national eligibility rules
• Restriction to grants
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Restricted to grants!
• Simplified cost options apply only to grants: If the operation or project is subject to public procurement, no possibility to use the simplified cost options.
Why? : In the case of public procurement payment is made
on the basis of a fixed price included in the contract (that could already include standard scales of unit costs).
Operation = project … or group of projects! where the simplified cost options are applicable to the operation, determine if it can be applied to all projects of the operation.
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The Guidance note: I- Flat rate rule for indirect costs
• Implemented by ESF OPs since the beginning of the programming period: no change (‘ESF acquis’). Copy paste of the existing ESF note (except audit part).
• Indirect costs reimbursed on a flat rate basis, as percentage of paid direct costs
• Rate and definition of direct costs to be established ex ante, i.e. agreed before or in the grant agreement
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The Guidance note: II- The standard scales of unit costs / III- Lump sumsSame structure for this chapter and the one on lump sums.
• General principles• Consequences in terms of financial management• Key points for the managing authority: calculation, correlation quantities / payments, justification of quantities, choice of the standard scale• Audit approach
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The Guidance note: IV - Common horizontal provisions
• Calculation
• General audit approach
• Retrospective entry into force
• Combination of options
• Impact on certification of expenditure
• Cross financing
• Compatibility with state aid rules
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Don’t forget …
• An important step towards simplification
• National authorities have 4 possible options for grants.
• No choice = use of ‘real cost’ principle
• Choice to do => fully understand the three simplified cost options and their consequences
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Simplified cost options: restricted to grants
• Explain Point 4. of the introduction of the working document on simplified cost options
• In order to clarify when these options are applicable or not
• Based on examples, from the simplest one to more complex examples.
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Operation = project
Ben
efic
iary
Operation?
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Operation = project … or group of projects
Ben
efic
iary
(ie
s)
Variation of what is considered as an operation or a project
Operation?
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Are simplified cost options applicable to the operation to be supported?
Start with the simplest case = the operation includes only one project.
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Working Document:
Point 4. Is the operation subject to public procurement contract?
18Simplified Cost Options not applicable
Working Document:
Point 4. Is the operation subject to public procurement contract? YES
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Working Document:
Point 4.1. Is the project subject to public procurement contract?
Ben
efic
iary
Working Document:
Point 4. Is the operation subject to public procurement contract? NO
Operation = 1 project
Tra
inin
g
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Working Document:
Point 4.1. Is the project subject to public procurement contract? YES
Ben
efic
iary
Working Document:
Point 4. Is the operation subject to public procurement contract? NO
Simplified Cost Options not applicable
Operation = 1 project
Tra
inin
g
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Working Document:
Point 4.1. Is the project subject to public procurement contract? NO
Ben
efic
iary
Working Document:
Point 4. Is the operation subject to public procurement contract? NO
Simplified Cost Options applicable
Operation = 1 project
Tra
inin
g
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Are simplified cost options applicable to the operation to be supported?
But some operations include more than one project… operation = group of projects
Case 1: all projects implemented on the same basis
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Ben
efic
iary
(ies)
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Operation = group of projects
Operation = group of projects
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Working Document:
Point 4.1 Are the projects subject to public procurement contracts?
Ben
efic
iary
(ies)
Working Document:
Point 4. Is the operation subject to public procurement contract? NO
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Operation = group of projects
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Working Document:
Point 4.1 Are the projects subject to public procurement contracts? YES
Ben
efic
iary
(ies)
Working Document:
Point 4. Is the operation subject to public procurement contract? NO
Simplified Cost Options not applicable
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Operation = group of projects
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Working Document:
Point 4.1 Are the projects subject to public procurement contracts? NO
Ben
efic
iary
(ies)
Working Document:
Point 4. Is the operation subject to public procurement contract? NO
Simplified Cost Options applicable
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Operation = group of projects
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Are simplified cost options applicable to the operation to be supported?
But some operations include more than one project… operation = group of projects
Case 2: projects implemented on different bases
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Working Document:
Point 4.1. Are the projects subject to public procurement contracts?
Ben
efic
iary
(ies)
Working Document:
Point 4. Is the operation subject to public procurement contract? NO
Operation = group of projects
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Tra
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Tra
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Tra
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Management costs
Per
son
alis
ed s
upp
ort
Per
son
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upp
ort
Per
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upp
ort
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Working Document:
Point 4.1. Are the projects subject to public procurement contracts?
Working Document:
Point 4. Is the operation subject to public procurement contract? NO
Operation = group of projects
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inin
g
Tra
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Tra
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Management costs
Per
son
alis
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upp
ort
Per
son
alis
ed s
upp
ort
Per
son
alis
ed s
upp
ort
YESNO
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Working Document:
Point 4.1 Are the projects subject to public procurement contracts?
Working Document:
Point 4. Is the operation subject to public procurement contract? NO
Operation = group of projects
Tra
inin
g
Tra
inin
g
Tra
inin
g
Tra
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Tra
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Tra
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rain
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Management costs
Per
son
alis
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upp
ort
Per
son
alis
ed s
upp
ort
Per
son
alis
ed s
upp
ort
Simplified Cost Options not applicable
Simplified Cost Options applicable
YES
NO
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Point 4.1. Are the projects subject to public procurement contracts? NO
Working Document:
Point 4. Is the operation subject to public procurement contract? NO
Point 4.2
Per
son
alis
ed s
upp
ort
Simplified Cost Options applicable
Detailed Budget
-Internal personnel costs-External personnel costs-Transport home/work-Travel costs-Rental costs-Purchase of consumables-Telephone, fax, postal costs-Water and electricity -Publicity-Depreciation of equipments-Cleaning services-…
The beneficiary implements itself the project: the simplified costs options are applicable, even if some of the budget lines or expenditure items within the project are outsourced.
! Assess impact of outsourcing on flat rate for indirect costs.