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Krakow 10th-11st of January

Project with the support of the Lifelong Learning Programme of the European Union

Financial and reporting rules

• Project handbook – Guidelines for Administrative and Financial Manageement and Reporting

• Financial Information Kit

Reporting to EACEA

Progress report:• at the mid-term point of a project, • the assessment of the reports enables the Agency

to take a decision on the continuation of the project,Final report:• after the formal end of the project allowing the project to be

reported on and evaluated in its entirety,• a verification of the measures taken to guarantee the

successful dissemination and exploitation of the project's results and products.

Project reporting – deadlines for submission

to EACEA

Final report

29.02.2016

Reporting period

• Progress Report runs from the start date of the project until one month prior to the submission date of the report. (01.01.2013-30.06.2014)

• The financial analysis of the project's expenses will be done only at the submission of the Final Report.

• Progress Report leads to the payment of a further pre-financing, it does not settle the accounts and the payment is considered as a pre-financing/advance payment.

• Final Report - the reporting period covers the entire project duration and the submission date falls two months after the end of the project.

Structure of the Report

Two parts:• Public Part, including an Executive Summary -

contains the description of the project's objectives and results, presented against the work programme, how they were achieved, how they will be exploited and how they contribute to EU policies.

• Confidential Part - information about the management of the project, the contract and the finances.

Public Part

1. Project Objectives; 2. Project Approach;3. Project outcomes & results; 4. Partnerships;5. Plans for the future – differents: • Progress Report includes a description of plans to carry out the remaining work to achieve the

project objectives; • Final Report includes emphasise the exploitation of results beyond the project's lifetime.

Sustainability of the project's outcomes is a key element of this section;

6. Contribution to EU policies.

Confidential Part1. Declaration Page - delete 2 lines related with other report and in Progress Report text

referring to requests of payments;

2. Outcomes / Results / Products; 3. Implementation of the work programme / tasks; 4. Impact;5. Involvement of Partners; 6. Involvement of Staff; 7. Management Aspects; 8. Dissemination & Exploitation; 9. Annex 1 Financial Reporting table.

Internal reporting

Financial rules

General crirteria of expenditures:• they must be connected with the project, necessary for

the execution,• generated during the contractual lifetime of the project, • actually incurred by the beneficiary (requirements

of the applicable tax and social legislation), • foreseen in the estimate overall budget, reasonable and

justified,• accordant with the principles of sound financial

management.

Not eligible costs:

• return on capital; • debt and debt service charges; • provisions for losses or potential future liabilities;• interest owed; • doubtful debts; • exchange losses; • VAT, unless the beneficiary organisation can prove that it is

unable to recover it; • costs declared by the beneficiary and covered by another project

or work programme receiving a European Union grant; • excessive or reckless expenditure.

Attention!

• Beneficiaries should consider using project-dedicated, specific bank accounts or sub-accounts;

• Supporting documents and records must remain at the beneficiary premises for a period of five years after the final balance of the grant has been paid;

• The Agency must be informed of important changes to the agreement (workplan, budget) in good time and in writing in order to agree or not before these changes take effect.

Exchange rate

• Costs should be presented in EUROs• Any conversion of actual costs into euros shall

be made by the beneficiary at the montly accounting rate established by the commission and published on its website http://ec.europa.eu/budget/inforeuro for the first month of the period of eligibility of costs

Necessary documents• All expenditures must be supported by adequate supporting accounting

documents!• All documents relating to the project should be organised from the start

of the project and all accounting documents should be duly classified. • Documents should have description, confirming their connection with the

projects; if it is in other language than English – short translation of most important info is required

• Scanned documents should be sent to coordinator with internal financial report every 6 months

• The beneficiary must keep all supporting documents relating to the project no matter which partner incurred the costs (5 years). Unjustified costs will not be considered as eligible by the Agency nor by the auditors

• All documents required by auditors you will find in: Financial Informatoin Kit – Annex 1 to Factsheet 08 Checklist

Example of descriptionDocument related to the project:„Find the best – competency-based recruitment in public administration”Lifelong Learning Program Leonardo da Vinci - DOIGrant agreement number: 2012 – 3594 / 001 - 001Project number: 526958-LLP-1-2012-1-PL-LEONARDO-LMPAccording to project application, document refers to budget line: ……………………………………………

Eligible cost: ………………..( …………. €)

Description:

Exchange rate used for calculation of cost in EURO: 1 EUR= ……………………………

date signature

Categories of Eligible Direct Costs:

• Staff;• Travel and Subsistence;• Equipment costs;• Subcontracting costs;• Other Costs.

Staff„The direct cost of staff assigned to the action, comprising actual salaries plus social security charges and other statutory costs included in the remuneration, provided that this does not exceed the average rates corresponding to the beneficiary’s usual policy on remuneration.”

• Proper calculation of pay and compliance with national social security and related rules;

• Adequate staff contracting – statutory staff• Adequate systems to allocate staff costs to projects; • Adequate control of attendance; • Sound remuneration practices.

Staff – supporting documents• Documents explaining internal policy on salaries, calculation of the daily cost rate, • Timesheets signed by worker and legal representative (if not used in your

organization – use Time-sheet form in staff cost documentation file)• Payroll (if not total amount of salary is related to the project, the payroll should be

described approprietly)• Proof that salaries and social security contribution recorded in the accountancy

have been paid by the partner to the authorities• Personnel register*• Fiscal declaration of annual salary when applicable*• Description of the work performed by each person*

* Documents required by auditors (information taken from Financial Information Kit)

Travel and subsistance• They are necessary, identifiable and verifiable from corresponding

financial statements and accounting records.• They are reasonable, justified, related to the project. • Subsistence costs for staff taking part in the project are eligible under this

budget heading. • Reimbursmement of travel costs based on the real costs• Private car travel -will be reimbursed as follows:

- either a rate per km in accordance with the internal rules of the organisation concerned up to a max of EUR 0.22; - or price of a rail, bus or plane ticket. Only one ticket shall be reimbursed, independently of the number of people travelling in the same vehicle.

• Hired cars – eligible provided that the cost is lower in comparison to other means

Travel and subsistance 2• Subsistence costs are reimbursed according to internal organization’s

rules(actual costs or daily allowances)• Costs cannot exceed maximum rates defined for the country of

destination (http://ec.europa.eu/education/llp/doc• Proof of attendance and overnight accomodation is required• Subsistence costs cover accommodation, meals and local travel costs• Maximum number of days that can be claimed is the number of working

days + 1

Travel nad subsistence - documents • tickets (plane, train, bus, etc.) and invoices (hotels, restaurants, travel

agency); • boarding pass; • for car journeys: declaration stating the city of departure and arrival, the

calculation method with unit rate and number of units, dates and names and activities concerned;

• list of participants duly signed with clear identification of the activity/purpose of the trip, dates, names and functions of the participants in the project (e.g. partner, expert, volunteer, subcontractor);

• proof that the payments have been made by the partner and are recorded in the accountancy;

• hotel bills; • internal rules defined for the staff of the organisation travelling, etc.

Travel nad subsistence - documents • Details of the per diems claimed (including dates and purposes of visits)• Travel request form (including information on the reason for travel)*• Travel expence claim form used in organization (declaration of all proofs of actual travel

expenses)*• Proof of usual remuneration policy* / Declaration of calculation of subsistence costs

according to internal rules of organization

* Financial information Kit

Equipment costs

• Not applicable in FTB project

Subcontracting costs• The total reported costs for subcontracting may not exceed 30% of the

total eligible direct costs of the project.• Related to contracts awarded to external body• Estimate offer covers all costs• Avoid of conflict of interests• Reporting travel and subsistence costs of subcontractors should be

classified to the subcontracting fees. • Contracting procedure:

– < 12500 EUR – presentation of invoice– 12500 – 25 000 EUR – three tenderers– 25 000 – 60 000 – five tenderers– > 60 000 – public procurement procedure

Subcontracting costs – supporting documents• Terms of reference, request for quotation with reference to the project,

activity and deadline• Quotation received• Evaluation committee’s report• Award decisions• Proof of payments• Original invoices*• Contracts and documentation related to tenders*• Description of the work performed by third party staff*

Other Costs• Costs arising directly, which are not covered by the other categories, but

they are specific and necessary for achieving the goals of the project, e.g.: one-off costs for press releases and publicity, purchase of copyrights and other Intellectual Property Rights, purchase of information materials, conference fees; meeting registration costs; rental of exhibition space, etc.

Supporting documents• Contracts, invoices• Proof of payments

Indirect costs (overheads)• Those costs which, are not identifiable as specific costs directly linked to

performance of the project which can be recorded in the project's accounts, but which have nevertheless been incurred in connection with the eligible direct costs for the project.– Equipment related to administration– Communication costs (postage, fax, telephone, internet etc.)– Infrastructure costs– Office supplies– photocopies

• Maximum of 2,9 % of the total amount of eligible direct costs.• Rental agreements supporting office space claimed for, invoides suporting

office supply costs claimed*• Telephone infoices claimed for*• Invoices an calculations supporting expenses claimed* Docs that might be required by the auditor – Financial Information Kit

Rejection of the costs

The most frequent reasons are:• The lack of supporting documents relating to expenses claimed or relating documents

and materials do not state the EU logo; • Ineligibility of costs: unforeseen costs for which no prior authorisation has been

requested to the Agency, overhead expenditure exceeding the maximum ceiling, contribution in kind claimed, costs incurred outside the eligibility period;

• The non respect of accommodation/subsistence EU rates, the wrong application of exchange rates, depreciation error, recalculation of overheads due to ineligible costs, reclassification of costs between headings/categories, dual claiming and declared expenses exceeding real costs;

• Inadequate audit trail: missing papers or electronic trail that gives a step by step documented history of a transaction.

What can go wrong?

• Reporting travel and subsistence costs that do not relate and/or are unnecessary for the project.

• Insufficient supporting documents. • Use of incorrect scales or when travel and

subsistence allowances are higher than EC maximum ceilings. Usual remuneration policy should be used.

• Not recording costs in the accounting system. • Misuse or uneconomic use of transport e.g. first class

airfares

Thank you for attention!