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Annex A

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					LIFELONG LEARNING PROGRAMME

NATIONAL TEAMS OF BOLOGNA EXPERTS ACTIVITIES 2008/2009

Financial Rules

The following financial rules must be read together with the Invitation to submit addressed to the National Agencies "National Teams of Bologna experts 2008-2009" and Annex III of the contract.

A. 1.

Rules on eligibility of costs Eligible costs

The general context, nature and amount of expenditure will be considered when assessing eligibility. To be considered as eligible project costs, costs must satisfy the following general criteria: – they must be connected with the project (i.e. relevant for the action and be directly connected with execution of the project in accordance with the activity plan) and included in the estimated project budget; – they must be necessary for the performance of the project ; – they must be reasonable and justified and they must accord with the principles of sound financial management, in particular in terms of value for money and cost-effectiveness; – they must be incurred during the lifetime of the project as defined in the agreement; – they must actually be incurred by the beneficiary and be recorded in the National Agency’s accounts in accordance with the applicable accounting principles and be declared in accordance with the requirements of the applicable tax and social legislation; – they must be identifiable and verifiable and be backed up by original supporting documents; – they must relate to activities involving the eligible countries in the Lifelong Learning Programme. Any costs relating to activities undertaken outside these countries or by organisations that are not registered in an eligible country are not eligible unless they are necessary for the completion of the action and duly justified in the application form and in the report. The applicant's internal accounting and auditing procedures must permit direct reconciliation of the costs and revenue declared in respect of the project with the corresponding accounting statements and supporting documents. For scales of unit costs, this implies that the "number of units" must be recorded in appropriate documents (i.e. time sheets, presence lists, etc.). Where national taxation and accounting rules do not require an invoice, an accounting document of equivalent value means any document produced in order to prove that the accounting entry is accurate and complies with the applicable accounting law.

2.

Non-eligible costs 2
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The following items of costs are not eligible and should therefore not be included under any headings in the Budget: contributions in kind; return on capital; debt and debt service charges; provisions for losses or potential future liabilities (provisions for contractual and moral obligations, fines, financial penalties and legal costs); interest owed; doubtful debts; exchange losses; VAT, unless the applicant can show that he is unable to recover it; costs declared and covered by another action or work programme receiving a Community grant; excessive or reckless expenditure; purchase of capital assets; in the case of rental or leasing of equipment, the cost of any buy-out option at the end of the lease or rental period; costs associated with the preparation of the application for the Lifelong Learning Programme; costs of opening and operating bank accounts (except bank charges relating to the opening or maintaining of an account established especially for the project, as well as bank transfer and exchange costs relating to receipts and payments for eligible expenditure under the project); costs incurred in relation to any document required to be submitted with the application (audit reports, etc.); indirect costs (overheads).

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In particular, the National Agency will take care to avoid dual funding, i.e. both as an activity supported under the Operating grant of the National Agency concerned, and as an activity supported under the present project. Similarly, there may be no duplicate funding of staff costs already covered by the Operating grant. B. 1. Principles applied to the different budget headings Staff costs

Staff costs refer to any payment made to a person attached to the contracting organisation or working on a regular or recurrent basis for the project (regardless of his or her status). Unit costs may not exceed the normal costs for the staff category in question in the country concerned. Staff costs that are already included in the Operating grant or in any other Community funding are not eligible. Staff costs must be calculated on the basis of the actual daily salary/fees of the employee/service provider, multiplied by the number of days spent on the project. This calculation may include, if necessary, all the normal charges paid by the employer, such as social security contributions and related costs, but must exclude any bonus, incentive and profit-sharing arrangements or running costs. Staff costs must be broken down into four categories:  Staff category 1 Manager  Staff category 2 Researcher, Teacher, Trainer  Staff category 3 Technical 3
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 Staff category 4 Administrative

For each category, the maximum ceilings for each country are those indicated in the Annex to the grant application form 2008-2009 for the present project. Staff costs must take into account the real staff costs in the country, as well as the non profit making principle which applies to EU grants to calculate the maximum amounts in the country concerned. If it is needed to employ or hire the services of persons, whose costs exceed those maximum amounts, the necessary explanations, as well as evidences should have been provided when submitting the application. Daily rates for Bologna Experts should be based on Staff category 2 ("Researcher, Teacher, Trainer"). The staff costs of the National Agency can not exceed 15% of the total eligible project budget. 2. Travel and subsistence costs

2.1. Travel costs (1) (2) Travel costs for staff and Bologna Experts taking part in the action are considered, provided that they are in line with the National Agency usual practices on travel costs; Costs may be claimed only for journeys directly connected to specific and clearly identifiable project-related activities. For information on charging Travel Costs for nonstaff members please refer to Section ‘Other direct costs’ and ‘Costs of subcontracting, consultancy and other external services’; Reimbursement is based on real costs, independent of the means of travel chosen (rail, bus, taxi, plane, private car). The beneficiaries are required to use the cheapest means of travel (e.g. use Apex tickets for air travel and take advantage of reduced fares, where this is not the case then a full explanation should be provided); The travel cost for a journey should include all costs and all means for travel from the point of origin to the point of destination (and vice versa) and may include visa fees, travel insurance and cancellation costs; Expenses for car travel, where substantiated and where the price is not excessive, will be refunded as follows:  for private vehicles (personal or company cars): on the basis of the corresponding first class rail (or economy air1) fare - the price (see point (3) above) of only one ticket shall be reimbursed, even where several people are travelling in the same vehicle;  for hire cars (maximum category B or equivalent) or taxis: the actual cost where this is not excessive compared with other means of travel (also taking account of any influencing factors i.e. time, excessive luggage);  only in exceptional and duly substantiated cases, where the above can not to be applied, will a ‘rate per mile/km’, in accordance with the internal rules of the National Agency, be considered.

(3)

(4)

(5)

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Only in situations where a train journey cannot be priced (i.e. no appropriate route or service exists).

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Travel costs incurred outside the countries participating in the LLP programme are not eligible, unless explicit prior authorisation is granted by the Executive Agency.

2.2. Subsistence costs (1) Subsistence costs for staff and Bologna Experts taking part in the action are considered. They must be based on real daily subsistence rates, which cannot exceed the maximum rates indicated in the Annex to the grant application form 2008-2009 for the present project. Any surplus will be considered as ineligible. The rate to be applied is the one from the destination country, i.e. where accommodation costs are incurred; Costs may be claimed only for journeys directly connected to specific and clearly identifiable project-related activities. For information on charging Subsistence Costs for non-staff members please refer to Section ‘Other direct costs’ and ‘Costs of subcontracting, consultancy and other external services’; Reimbursement is based on the existing internal rules of the National Agency, which may be on an actual cost (reimbursement of receipts) or daily allowance basis; Subsistence rates cover accommodation, meals and all local travel costs (but not local travel costs incurred to travel from point of origin to point of destination, see point 2.1. point (4)). In calculating the number of days for which to apply the Daily Subsistence Rate it should be noted that a FULL day normally includes an overnight stay. In duly substantiated cases, a full day’s allowance without an overnight stay may be allowed with a pro rata reduction for accommodation; A pro rata reduction must be applied if accommodation, meals and local travel costs are provided for by a third party.

(2)

(3) (4)

(5)

Within these limits, subsistence expenses may be reimbursed on an actual or fixed cost basis. However, if the internal regulations of the National Agency making the journey impose a lower limit than the amounts indicated in the Annex to the grant application form 2008-2009 for the present project, this lower amount must be used. 3. (1) Costs related to equipment and materials Purchase, rent or lease of equipment (new or second-hand) is considered, only when specific and necessary for achieving the goals of the project/action. Equipment costs must always be duly justified; The decision to lease, rent or purchase hardware or equipment must be based on the least expensive method. Several suppliers must be contacted in order to obtain the most economic terms; In the case of rental or leasing, the cost of any buy-out option at the end of the lease or rental period is ineligible; The purchase cost of equipment and materials is considered, provided that it is written off in accordance with the tax and accounting rules applicable to the National Agency and generally accepted for items of the same kind. Only the portion of the equipment's depreciation corresponding to the duration of the action and the rate of actual use for the purposes of the action may be taken into account. If the nature and/or the context of its use justify different treatment, this should be duly justified; All equipment and materials related to the administration of the project (i.e. PC's, portables, etc.) is not eligible; The total cost for equipment and materials may not be more than 10% of the total cost of the project. 5
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(2)

(3) (4)

(5) (6)

4.

Cost of subcontracting, consultancy and other external services

Any amount paid to an outside body which carries out specific and limited work for the project, shall be charged to the heading “Subcontracting, consultancy and other external services". Work such as translation, interpretation and printing, is considered as subcontracting costs. Such expenditure may only be allowed if the staff of the contracting organisation does not have the skills required for the performance of the work concerned. Subcontracting costs will only be considered eligible if they are in accordance with the provisions of the Grant Agreement concluded with the Executive Agency. If the contracting organisation is required to conclude a subcontracting contract, he/she must enter into an agreement with the subcontractor which assures that the subcontractor will comply with the main Agreement concluded between the beneficiary organisation and the Executive Agency. The applicant shall award the contract to the tender offering best value for money, that is to say, to the tender offering the best price-quality ratio, in compliance with the principles of transparency and equal treatment for potential contractors, care being taken to avoid any conflict of interests. The following specific Community rules with regard to procurement apply:  Contracts with a value below €200 can be paid simply on presentation of an invoice;  Contracts with a value between €200 and €3.500 are subject to a restricted procedure involving one tenderer (i.e. it is sufficient to have requested one offer);  Contracts with a value between €3.500 and €25.000 are subject to a procedure involving at least three tenderers;  Contracts between €25.000 and €60.000 are subject to a procedure involving at least five tenderers;  For contracts of a value over €60.000, national rules with regard to procurement apply. None of the basic activities of the project may be subcontracted. For this reason, the beneficiary may not subcontract the management and general administration of the project. If the beneficiary calls on the services of an outside expert (i.e. a person not on the payroll of the contracting organisation) as a consultant, the costs will be eligible subject to the conditions mentioned above and provided that they are strictly necessary for the performance of the project and are reasonable in amount. The remuneration of the consultant should not normally exceed 400 EUR per day (VAT excluded). All the costs directly connected with sub-contracting must be declared under the subcontracting budget heading whatever the nature of the costs concerned (e.g. travel costs). The total amount devoted to subcontracting may not exceed 30% of the total cost of the project. For translations, only expenditure directly related to translations from and into the official languages of the countries formally participating in the Lifelong Learning programme will be accepted, unless explicit prior authorisation is granted by the Executive Agency. Translation costs may not be higher than the market prices in the country where the translation is done. 5. Other direct costs

Other direct costs, not covered by those indicated above, may be allowed, provided they are: 6
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   

necessary for the performance of the project; reasonable in amount; fully documented and clearly itemised; not indicated under another budget heading.

Specific items of expenditure eligible under this heading include:  bank charges relating to the opening or maintaining of an account established especially for the project, as well as bank transfer and exchange costs relating to receipts and payments for eligible expenditure under the project. However, charges relating to establishing or maintaining lines of credit, overdraft or guarantee facilities are not eligible; costs incurred in producing, translating and publishing documents, when those activities are performed by the contracting organisation; communication costs (e.g. connection to the Internet) in duly justified cases for projects where activities require very intensive use of communications.

 

C.

Calculation of the final Community Grant Please refer to section II.17 of the Agreement for more information on the calculation of the final grant. In short, the final grant is determined as follows:

Declared expenditures from the final statement LESS Ineligible costs found during assessment of your final statement.

Costs may be ineligible by nature or Limited by application of the "20% rule" (article I.3.4 of the agreement) or Limited by maximum ceilings from the Call (Equipment & Subcontracting and indirect costs) or Limited by maximum rates from the Call (Staff & Subsistence) X percentage of co-financing from the agreement (article I.3.3)

LIMITED to the maximum Community contribution from the agreement (article I.3.3)

See two examples of calculation in annex. Be also aware of the so called "non profit" rule defined in article II.17.4 of the Agreement. Indeed, to avoid profit, the calculated grant will be reduced accordingly if: Final Community grant + other sources of financings (own funds not incl.) Is higher than NATIONAL TEAMS OF BOLOGNA EXPERTS 7

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Declared expenditures from the final statement Please note also that the grant may be reduced in case of weak implementation of the project (article I.10.2 of the Agreement). Finally, the balance payment or recovery will be calculated as follows:

Final Community Grant LESS LESS EQUAL Pre-financing amounts already received Interests earned on pre-financing amounts (article II.16.4 of the Agreement) Balance payment if positive or Recovery if negative

D.

Checks and Audits

Please refer to section II.19 of the agreement for more information on possible checks and audits.

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