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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• THANK YOU FOR YOUR ATTENTION!

• QUESTIONS?

laurent.sens@ec.europa.eu

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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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(ies)

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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?

Ben

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(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

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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

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(ies)

Working Document:

Point 4. Is the operation subject to public procurement contract? NO

Simplified Cost Options applicable

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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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Management costs

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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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Management costs

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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

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Management costs

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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

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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.