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					    Twinning and Partnership Block Grant
         Swiss – Hungarian Cooperation Programme

                   Application Guide




                       implemented by

VÁTI Hungarian Non-profit Limited Liability Company for
      Regional Development and Town Planning




                        on behalf of the

     Swiss Agency for Development and Cooperation



                           February 2011


          VÁTI Non-profit Ltd reserves the right to modify
          – in agreement with the NDA and the Swiss party –
                         the Call documents




                                                              1
                       LIST OF ABBREVIATIONS


CHF                    Swiss Franc
EA                     Executing Agency
FA                     Framework Agreement
FAQ                    Frequently Asked Questions
HST                    Hungarian State Treasury
HUF                    Hungarian Forint
IB                     Intermediate Body
NDA                    National Development Agency performing the duties of the
                       National Coordination Unit (NCU), being responsible for the
                       full-scope operation of the Swiss-Hungarian Cooperation
                       Programme
PP Act                 Public Procurement Act
SCO                    Swiss Contribution Office: represents and acts on behalf of the
                       responsible federal office, in this case, the Swiss Agency for
                       Development and Cooperation
TPBG                   Twinning and Partnership Block Grant
VÁTI Non-profit Ltd.   Intermediate Body mandated to implement the Twinning and
                       Partnership Block Grant




                                                                                    2
                                          GLOSSARY


Intermediate Body (IB)

An entity that acts under the responsibility of the National Coordination Unit. Under this Block Grant
VÁTI Non-profit Ltd. is managing and distributing the grant on behalf of the NCU with regard to the
Executing Agencies implementing the small projects. As per the Government Decree 237/2008
(26.09.) on the implementation of the Swiss-Hungarian Cooperation Programme, the Intermediate
Body is held fully liable for implementing the Block Grant and for controlling the Executing
Agencies.

Executing Agency (EA)
An Applicant becomes Executing Agency if its Application is approved for funding by the Small
Project Approval Committee and the Implementation Agreement has been signed with the IB. The
Executing Agency shall be a public authority, any public or private non-profit body as well as any
non-profit organization recognized by the Parties.

Partner
Partner shall be a Swiss public authority, any public or private non-profit body as well as any non-
profit organization recognized by the Parties.

Small Project

Non-profit activity carried out by the Executing Agency and supported in the framework of this Block
Grant.

Small Project Implementation Agreement

Contract concluded by and between the Block Grant Intermediate Body and the Applicants selected
for funding by the Small Project Approval Committees.




                                                                                                    3
    1. BASIC INFORMATION

The Twinning and Partnership Block Grant (TPBG), co-financed from the Swiss-Hungarian
Cooperation Programme, is implemented as a specific form of grant assistance in accordance with the
Framework Agreement between the Swiss Federal Council and the Government of the Republic of
Hungary (hereinafter referred to as “Framework Agreement”) as well as its annexes.

The overall objective of the TPBG is to encourage development of mutual cooperation of existing or
new partnerships between Hungarian and Swiss bodies, and hereby contribute to the reduction of
economic and social disparities between Hungary and the enlarged European Union.

Grants will be awarded to Small Projects aiming at reinforcing cooperation, exchange of information,
transfer of know-how and best practice between Hungary and Switzerland.

The TPBG aims at establishing partnerships in 3 different fields:


    1. classical town-twinnings between Swiss and Hungarian territorial units and their
        associations at all levels (settlements, towns, micro-regions, counties and regions) or units
        acting on their behalf and their dependent entities;
    2. partnerships between Swiss and Hungarian organisations and institutions that are not
        acting for profit or mentioning making profit as a statutory goal. (Entities may cover
        eventual losses in their core activity by some profit earning supplementary activity,
        however, according to their deeds or charters they should be non-profit organizations);
    3. social dialogue between Swiss and Hungarian nationally recognized and representative
        social partners (trade unions and employers’ associations), professional chambers and
        unions, branch associations (e.g. chambers of commerce, branch/sector associations,
        associations of entrepreneurs).


1.1. Project Focusing

Under the TPBG, Small Projects shall:

    -   contribute to the solution of specific problems in Hungary in accordance with the
        objectives defined in the Framework Agreement;
    -   strengthen the capabilities of the Applicants by the exchange and transfer of experience,
        knowledge and best practice;
    -   contribute to the strengthening of the partnership through its activities
    -   create added value for both partners involved in the project (the Applicant and its Swiss
        Partner)

The total grant available for the TPBG is CHF 2.791.800 (HUF 598.310.658).

The call for the submission of grant applications will be announced on an ongoing basis, meaning
that it will be open until 31January, 2013, or until all the funds allocated to the TPBG have been
awarded. As the final eligibility of costs under the TPBG is 30 August 2013, the projects selected in
the last evaluation cycle shall not have a longer than 5-month implementation period.




                                                                                                        4
    ELIGIBILITY CRITERIA

    2.1. Eligible Applicants

The following bodies are eligible to apply for a grant under the TPBG:

    1. institutions at all levels of public administration (e.g state, regional and local government
       authorities) and their organisations, associations;
    2. educational institutions, both public and private;
    3. non-governmental and non-profit organizations including churches;
    4. other bodies acting in the public interest;
    5. professional chambers and unions, branch associations (e.g. chambers of commerce, branch /
       sector associations, associations of entrepreneurs, associations of small and medium
       enterprises, unions of cooperatives, social partners – i.e. nationally recognised and
       representative trade unions and employers’ unions).

The Applicant of the grant shall be a Hungarian entity registered and performing its activities in
Hungary.

The Partner organisation shall be a Swiss entity registered and performing its activities in
Switzerland.

The relationship between the Hungarian Applicant and its Swiss Partner shall be of a non-
commercial character.

The Applicant shall have performed its activity for at least 1 year before submitting its Application,
and should possess the appropriate qualifications and the necessary financial as well as operational
resources to complete the Small Project.

In case of the town-twinning component both the Swiss and Hungarian partner shall meet the criteria
defined under point 1 (public institutions).

In case of components 2 and 3, organisations listed under point 2-5 can apply together with public
institutions/authorities; the component they apply for shall be decided upon the legal status of the
Applicant.

Shall not apply for the TPBG:
   - Natural persons;
   - For-profit organisations and political parties.

The non-eligibility clause can be found under Annex 2.


    2.2. Eligible Activities

The TPBG will be supporting the following activities (indicative list):

    -   assistance of Swiss or Hungarian experts during the transfer and exchange of experience
        between partners in Hungary
    -   project-related activities and events in Hungary, if prepared in co-operation with Swiss
        partner
    -   project-related activities and events in Switzerland, in case of justified participation of
        Hungarian representatives in an event organized by the Swiss partner




                                                                                                    5
    -   study visits: duly justified stay by Hungarian representatives in Switzerland (in case of a visit
        organized by the Swiss partner) or Swiss representatives in Hungary (in case of a visit
        organized by the Hungarian partner)
    -   minor construction works, investments and procurements that are integral to project
        results and the overall objective.

    2.3 Eligible Costs

Eligible costs of the Project are as follows:

    -   experts fees of foreign experts
    -   expert fees of Hungarian experts hired for a specific and clearly defined task for the duration
        of the implementation of the project
    -   business trips for Swiss experts to Hungary (accommodation, per diem allowance, travel
        costs)
    -   business trips for Hungarian experts to Switzerland (accommodation, per diem allowance,
        travel costs)
    -   cost of project activities and events in Hungary or Switzerland (conference room rental,
        technical equipment, refreshments, interpretation costs)
    -   registration fees for seminars and other events held in Switzerland
    -   translation of documents, interpretation
    -   external services to the extent necessary to implement the project in Hungary and clearly
        specified in the application
    -   purchase of equipment and material necessary to implement the project in Hungary and clearly
        specified in the Application
    -   small-scale construction work, to the extent necessary to implement the project in Hungary
        and clearly specified in the application
    -   publicity costs specified in the application
    -   administrative costs related to the project,
    -   running costs, only if they are strictly related to the implementation of the small project
        funded under the TPBG.

The Executing Agency shall finance all other expenses related to the implementation of the
Small Project from its own sources.

The costs of the Small Project shall be eligible from the date of the decision letter on the grant
award and - with the exception of reporting and evaluation - finishes with the implementation
end date set in the Small Project Implementation Agreement. The final deadline for the eligibility
of the expenses of reporting and evaluation is 6 months after the end of implementation, but not later
than 30 August 2013. Costs incurred before as well as after these dates are not eligible.


N.B.:   The costs related to the Swiss Party shall not exceed 40% of the total project budget.
        The Executing Agency and its Partner must not have any income generated with the
        implementation of the Project.




                                                                                                       6
3. CONDITIONS FOR APPLICATIONS

    3.1. The following conditions shall be respected:

    1. the proposal shall be submitted in partnership with a Swiss entity, and the roles of both
        partners in the partnership should be clearly specified;
    2. the project implementation period should be between 3 and 15 months;
    3. a minimum of 10% of the total eligible expenses of the small project should be provided by
        the Applicant in accordance with the conditions of co-financing;
    4. all activities of the Small Project shall be of a non-profit character and in the public interest*;
    5. the small project shall not meet the criteria of State Aid in accordance with the conditions
        stipulated by Article 87, Paragraph 1 of the EC Treaty;
    6. small project activities that are financed from Structural Funds or other programmes cannot be
        financed under the TPBG;
    9. costs of purchased equipment / material and construction work shall be up to 30% of the total
    eligible costs.

The submitted Application should include the following elements:

    -    Objectives, results, indicators
    -    Background and justification, needs analysis
    -    Feasibility study, if applicable
    -    Detailed budget
    -    Applicant and its partner, project team and key participants and/or experts to be involved
    -    Planned activities and benchmarks
    -    Analysis of the long term impact of project on the operation of the involved parties
    -    Strategy for the sustainability of the project results
    -    Logical Framework Matrix
    -    Official documents about the Applicant and its Partner (article of association or similar
         document, representatives, bank data, etc.)

    3.2. Grant amount and co-financing

As stipulated in 3.1., grants for Small Projects will be awarded from the TPBG up to a maximum of
90% of the total eligible costs each Project. Therefore, as own contribution, the Applicant has to
provide at least 10% of the total project budget.

Small Project Grants are in general in the range of HUF 2,000,000 to HUF 20,000,000, with an
exception for the social dialogue component which may reach up to HUF 50,000,000. The amount of
the grant will be assessed individually for each Application.

No legal claim arises from the grant application.

    3.3. Advance payment

Executing Agencies are entitled to 50% of the grant component of the budget as advance
payment upon the signature of the Small Project Implementation Agreement. Further
instalments will be made upon the approval of incurred project cost.




*
  In the framework of the TPBG, public interest refers to the welfare of the general public, in contrast to the
interest of a single person or a firm pursuing commercial interests.


                                                                                                                  7
If the total expenses of the Small Project exceed the indicated budget of the awarded grant, the
Executing Agency shall ensure the funds from its own sources to ensure successful completion of
the Small Project so as to achieve indicated objectives.




                                                                                              8
4. EVALUATION OF APPLICATIONS – AWARDING OF THE GRANT


4.1 Call – Time Schedule

From the date of the announcement of the call, Applications could be submitted on an ongoing basis.
The call is open until 31 January 2013 or until the exhaustion of funds allocated to the TPBG.

Grants will be awarded to the Executing Agencies in HUF.

The first evaluation and awarding of the grant will be concluded after 4 months of opening the call,
after which assessments will occur in 6-month cycles, with the exception of the social dialogue
component, where projects will be assessed three times, with intervals to be announced later.

Month      Schedule
0           Open Call Announcement of the TPBG*

1-2         Ongoing receipt of Applications and registration by the Intermediate Body

3-4         Assessment of the formal criteria and eligibility by the Intermediate Body
            Quality assessment by the Intermediate Body

4           Small Project Approval Committee meeting and selection of Applications
            Grant award decision


* The deadline will be set by the announcement of the call.


4.2. Submission of the Applications

Grant Applications can be submitted on an ongoing basis to the Intermediate Body:
VÁTI Non-profit Kft., 1016 Budapest, Gellérthegy u. 30-32.; Attn.: Annamária Módi,
Norwegian/EEA and Swiss Programs Directorate.

The Application with its Annexes has to be submitted in 1 original and 2 copies. One of these copies
should be electronic (on a CD-rom basis). The electronic copy should contain the Application in a pdf
format, and in an editable version (e.g. Word and Excel)..

In addition, the electronic copy of the Application should be sent to the Swiss Contribution Office
(SCO) email address for information: budapest@sdc.net.

Applications must be submitted both in Hungarian and in English languages.

Should documents be missing from the Application, the Applicant will be notified by the Intermediate
Body within 5 working days, after which the missing documents should be submitted within 10
working days.

N.B.:   Applications have to be submitted by the Hungarian Partner.
        Manually written Applications will be rejected.




                                                                                                   9
4.3. Evaluation of the Applications

Evaluation criteria are specified in Annex 1 (“Evaluation and Scoring Grid”).

All Applications will be scored and ranked for the Small Project Approval Committee (SPAC) for
evaluation.
The final decision is taken by the Small Project Approval Committee by voting.

Foreseen composition of the Small Project Approval Committees:

    - for the twinning projects the SPAC will consist of one member each of the SCO and the NCU,
    and three representatives of the civil organisations representing municipalities;

    - for the partnership projects the SPAC will consist of one member each of the SCO and the
      NCU, a line ministry and two NGO representatives;

    - for social dialogue projects the SPAC will consist of one member each of the SCO and the
    NCU and one member of the National Council for the Reconciliation of Interests (OÉT)

The successful Applicants will be notified in writing by the Intermediate Body within 5 working
days of the decision date.

Rejected Applicants will also be notified by the Intermediate Body within 20 calendar days. The
Intermediate Body will provide an explanation to the rejected Applicants.

Applications that have met the call criteria but were not selected in the given round may be put
on a reserve list.




                                                                                             10
ANNEXES


ANNEX 1   Evaluation and Scoring Grid   Page 11

ANNEX 2   Non eligibility clause        Page 14

ANNEX 3   FAQ                           Page 15

ANNEX 4   Eligible costs                Page 19




                                              11
ANNEX 1 – EVALUATION AND SCORING GRID


                                                                                         SCORES /
                                         CRITERIA                                         (MAX.)

                                              1. Relevance

How relevant is the Project regarding the objectives of the Swiss-Hungarian
Cooperation Programme as stated in the Framework Agreement, mainly:
                                                                                            3
       to reduce social and economic disparities within the enlarged European Union?


How relevant is the Project regarding the objectives of the Twinning and Partnership
Block Grant, mainly:
                                                                                            3
       to encourage development of mutual cooperation of existing or new partnerships
        between Hungarian and Swiss bodies?

To what extent does the Project contribute to the improvement of mutual understanding
                                                                                            8
between both countries?

To what extent does the Partnership contribute to satisfy needs from both sides
                                                                                            6
(Hungarian and Swiss Partner)?

How relevant is the exchange of experience between both Partners involved in the
                                                                                           10
Project?

Sub-Total for Relevance                                                                    30

                                            2. Added Value

To what extent does the Project provide an added value for both Partners involved?         10

Sub-total for Added Value                                                                  10

                                3. Financial and Operational Capacity

Is there a viable project organisation with clear responsibilities (1 pt)? Does the
                                                                                            2
management have the skills and capabilities needed (1 pt)?

Do the Applicant and its Partner have sufficient management capacity (including staff,
                                                                                            2
equipment, IT capacity and ability to handle the budget for the action)?

Do the applicant and its partners have stable and sufficient sources to provide the
                                                                                            6
necessary co-financing?

Sub-Total for Financial and Operational Capacity                                           10

                                            4. Methodology

How consistent with the objectives of the project is the strategic approach?                5



                                                                                                12
How realistic is the timeframe foreseen for project implementation and achievement of
                                                                                               5
objectives?

How proportionate is the involvement/role of both Partners (Hungarian and Swiss) in
                                                                                              10
the Project?

To what extent does the cooperation between both Partners lead to the expected results?       10

To what extent does the Application include objectively controlled indices to measure
                                                                                               3
the results of the Project?

To what extent does the Application cover the horizontal elements such as:
    -   reduction of social exclusion, creation of equal opportunities (1 pt);
                                                                                               3
    -   sustainable development (1 pt);
    -   principle of good governance (1 pt)?

Sub-Total for Methodology                                                                     36

                                            5. Sustainability

Is the project likely to have a long-term impact (lasting longer than the project
                                                                                              8
implementation under the Twinning and Partnership Block Grant)?

How likely is the Project to have multiplier effects? (including scope for replication and
extension of the outcome of the action and dissemination of information.)                     3
Is there leverage potential (mobilisation of additional resources)?

How sufficient have risks been identified, and how efficient are the risk management
                                                                                              5
methods?

How sustainable is the Project on a financial level?                                          5

Sub-Total for Sustainability                                                                  21

                                   5. Budget and Cost-effectiveness

How compliant is the Project regarding the financial requirements stated in the
Framework Agreement?
       Is the grant eligible for the Applicant and well justified?                           5
       Were only eligible costs budgeted?


How necessary are the proposed expenditures for the implementation of the project?            3

How realistic is the budget?                                                                  5

Sub-Total for Budget and Cost-effectiveness                                                   13

                                          TOTAL                                              120




                                                                                                   13
                                           Scores/
                                CRITERIA
                                           (max)

Relevance                                    30

Added Value                                  10

Financial and Operational Capacity           10

Methodology                                  36

Sustainability                               21

Budget and Cost-effectiveness                13

TOTAL                                       120




                                                     14
ANNEX 2 – NON ELIGIBILITY CLAUSE

This Annex only applies to the Applicant (Hungarian partner).


Not eligible are those:
    a) entities that do not involve at least one Swiss Partner;
    b) that are profit-oriented organizations and political parties, as well as organizations, business
       associations, foundations etc. established by for profits and political parties;
    c) that are under bankruptcy, liquidation or voluntary dissolution procedure;
    d) that did not or only partially fulfil its obligation assumed in the Assistance Agreement and
       related to some support granted from the sub-systems of the state budget within three calendar
       years before submitting the Application;
    e) that has an overdue, in excess of 60 days, outstanding tax liability or public due collected as
       taxes, unless the tax authority permitted deferred payment or partial payment in its favour;
    f) that was in a legally binding form obliged, in a decision of a government agency passed within
       two calendar years prior to submitting the Application or, upon court review thereof, of a
       court, to pay a penalty for the unregistered employment of employees or their employment
       without a work permit;
    g) whose project activities fails to meet the environmental or other relevant regulations;
    h) that does not have the official licences required for the activity;
    i)   in whose business association the equity, primary capital (registered capital) drops to below
         the lowest extent stipulated in the legal regulation;
    j)   that is credibly evidenced to have supplied unrealistic and false data that factually influenced
         the technical and financial content of the Application when it had submitted it or at any
         subsequent time upon evaluation of the Application.
    k) those persons or entities, who participated in the elaboration of the materials for application
       (guidelines, templates, sheets, evaluation criteria, etc.),
    l)   who are natural persons;
    m) that did not supply true information (data) or have failed to supply such within their
       information supply obligations imposed in the Application or in the contract, by the
       Intermediate Body, as a precondition of participation;
    n) that attempted to influence the Small Project Approval Committee or the Intermediate Body in
       the evaluation process, or tried to have access to confidential information.




                                                                                                      15
ANNEX 3 – FAQ

              I. Background information


    1. What objectives does the Swiss Contribution pursue?

Although the new EU member states such as Hungary have undergone significant positive
transformation since the end of the Cold War, they still lag well behind the states of Western Europe
in many economic and social areas. The Swiss Contribution (also called cohesion contribution) targets
the ten states which joined the EU on May 1, 2004 as well as Bulgaria and Romania that amounts to a
total of 1.257 billion francs made available over a commitment period of 5 years and helps to reduce
economic and social disparities within the enlarged European Union. The support will take the form of
projects and programmes to be selected and brought to a successful conclusion by Switzerland
autonomously, yet in close collaboration with the beneficiary countries.


    2. What are the objectives of the Twinning and Partnership Block Grant?

The Twinning and Partnership Block Grant (TPBG) not only aims at deepening the bilateral relations
between Hungary and Switzerland, but also “gives a face” to the Swiss Contribution Programme in
Hungary. The TPBG not only aims at creating classical town twinnings, but also supports relationships
between NGOs, institutions, associations, schools, cultural premises and social partners. The ultimate
objective of the TPBG is to enable an active exchange of experience on various levels that benefits
both sides.

    3. Does the Twinning and Partnership Block Grant primarily aim at creating town
       twinnings?

As explained in I.2, the TPBG both aims at establishing town twinnings and partnerships between
non-profit bodies. No preference is given to classical town twinnings in the project selection process.



            II.      Eligibility conditions


    1. Can companies apply for this grant?

No, as the TPBG only supports non-profit initiatives. Therefore, companies are not eligible for the
grant.

    2. Can I, as a natural person, apply for this grant?

No. Natural persons are not eligible for the TPBG.

    3. Can I have more than one Hungarian/Swiss partner?

Yes. The number of partners is neither limited on one (Hungarian) nor the other (Swiss) side.

    4. Can my partner and I apply for a second time if we were already awarded a grant under
       the TPBG?

Yes, it is possible to apply for a second time after a successful first submission.


                                                                                                    16
    5. If our application is rejected, will we get another chance?

Yes, it is possible to apply several times for the TPBG.

    6. If I already have an existing twinning/partnership with a Swiss/Hungarian entity, can I
       apply for the grant?

Yes, this is possible. The TPBG not only aims at launching new twinning and partnerships, but also at
strengthening already existing ones.

    7. Does the Hungarian partner have to be located in the 2 focus areas of the Swiss
       Contribution Programme (Northern Hungary and the Northern Great Plains)?

No. Hungarian entities from all over the country are eligible and can apply for the grant.


    8. If I do not have a partner yet, who can help me finding one?

If you wish to have help in finding a suitable partner, you can contact the Swiss Contribution Office in
Budapest (budapest@sdc.net).



            III.    Submission of the application


    1. Can the Swiss partner submit an application?

No. The Hungarian partner has to submit the application.

    2. What are the deadlines for the submission of the application?

A first group of applications will be assessed four months after the launch of the call. The following
assessments occur in 6-months cycles.

    3. In which language should the Application be submitted?

The Application has to be submitted to the Intermediate Body of the TPBG (Váti Ltd.) both in
Hungarian and in English.

    4. After having sent in the project outline, when and how will I get an answer?

Successful applicants (i.e. the Hungarian partner) will be informed of the final decision within 5
working days from Váti Ltd, the Intermediate Body of the TPBG. Rejected Applicants will also be
notified within 20 working days including an explanation for rejection.



            IV.     Evaluation of the project outlines


    1. Who selects the projects to be financed under the TPBG?




                                                                                                     17
The Intermediate Body (Váti Ltd) as well as independent assessors will assess in parallel and score the
applications according to defined evaluation criteria (see IV.3). The small Project Approval
Committee – where the NDA, the Swiss party, several associations of settlements, regions and cities,
the NGO sector, and the institution dealing with social dialogue will be represented – will select and
approve the projects. Switzerland will participate in the Selection Committee as a voting member.

    2. I saw that the projects financed by the Swiss Contribution Office are selected in two
       loops. Is it the same with the TPBG?

Given the relatively small size of projects under this Block Grant, there will be only one loop.

    3. What are the criteria that may increase our chances of being awarded the grant?

Besides some formal criteria (e.g. the Application should not be handwritten), important evaluation
criteria are: relevance to the overall objectives of the Swiss-Hungarian Cooperation, added value for
both partners and sustainability of the project.



            V.      Project implementation and eligible costs


    1. How important is the financial contribution under the TPBG?

Under the TPBG, the financial support is between CHF 10’000 to 100’000 and can reach up to CHF
250’000 (for the social dialogue component, that is to say partnerships between social partners)

    2. Are visits to the partner’s country included in the supported costs?

Yes. Both visits of the Hungarian partner to Switzerland and of the Swiss partner to Hungary are
included in the supported costs, as these visits contribute to the building and strengthening processes
of the twinning/partnership.

    3. Are running costs included in the supported costs?

Only if they are strictly related to the implementation of the project supported by the TPBG.


    4. For what timeframe is the grant awarded?

The duration of project implementation should be between 3 and 15 months.

    5. Who can I contact if I have further questions?

In case of further questions, the main contact point is the Intermediate Body (Váti Non-profit Ltd),
please send your questions to the e-mail address twinningblockgrant@vati.hu. If you need any further
information, you can contact the Swiss Contribution Office in Budapest under budapest@sdc.net.

    6. Where can I receive updated information about the status of implementation of the
       TPBG?

The actual information regarding the implementation of the Block Grant can be obtained on the
website of the Intermediate Body:
http://www.vati.hu/main.php?folderID=1991&articleID=16052&ctag=articlelist&iid=1




                                                                                                    18
You can access updated information in English via the link http://www.swiss-
contribution.admin.ch/hungary/en/Home/Thematic_priorities/NGO_Block_Grant_Twinning_and_Part
nerships/Twinning_and_Partnership_Block_Grant
You can also register for the Swiss Contribution quarterly newsletter that will provide interesting
information about Swiss Contribution to Hungary and the projects currently implemented by sending
an e-mail to budapest@sdc.net.




                                                                                                19
ANNEX 4 – ELIGIBLE COSTS
In general, costs incurred during project implementation shall be eligible if the following conditions
are met:
     The cost should be indispensable for project implementation, be stipulated in the
      Implementation Agreement and comply with the principles of responsible financial
      management, particularly the principles of value for money and cost effectiveness.
     Project implementation may be commenced on the date of the signing of the Grant Award Letter
      (starting date of the project implementation), and the implementation period must not be
      terminated after the end-date in the Implementation Agreement. The costs should incur on the
      Beneficiary’s part during the implementation period of the Project: the issue date of the invoice,
      the date of performance and also financial fulfilment must be within the implementation period.
      Invoices paid after termination of the implementation period cannot be financed from the
      project.
     Only costs that have actually incurred on the Executing Agency’s part or at its Partner and
      whose payment can be certified with original invoices, equivalent accounting documents and
      other certificates shall be eligible. No costs shall be eligible if the relevant invoices are not
      issued on the Beneficiary’s or the Partner’s name.
     The contracts concluded in line with the rules of the „Procurement Guide to Projects Supported
      by the Swiss-Hungarian Cooperation Programme” and the „Public Procurement Guide to
      Projects Supported by the Swiss-Hungarian Cooperation Programme”, as well as paid and
      documented in accordance with the above and the Financial Guide shall be eligible. The supplier
      or contractor of the concluded contract must not be the Applicant’s Partner. The Applicant
      should bear in mind that provisions stricter than those of the Procurement Guide apply to the
      contracts concluded within the Block Grant: in case of contracts below the public procurement
      thresholds the Executing Agency is obliged to collect three proposals from suppliers/service
      providers before the conclusion of the contract.
     Only costs that are eligible within this Application Guide and are not listed among the non-
      eligible costs may be accounted.
     The unit prices used in calculating the costs must not exceed the market prices which in turn can
      be determined and checked with some kind of independent method.
     The amount unused from the planned Budget by the end of the project implementation period
      reduces the grant proportionately. The Intermediate Body does not reimburse any optional extra
      costs.

Cost types, accounting modes

1. Personnel costs
A labour contract, assignment, service contract, target specification can provide a basis for personnel
costs. If the employee only deals with the project in a part of his/her working hours, the proportionate
part of his/her wage may be eligible.
Premium is not eligible.
The personnel costs of central administrative bodies identified in the Hungarian central budget are not
eligible.
Under other benefits, the tax-free benefits stipulated in the relevant law as a compulsory item and
prescribed in the relevant internal rules and the benefits optionally granted tax-free may be eligible up
to the statutory limit.




                                                                                                      20
The Executing Agency or its Partner is obliged to certify the incurrence of these costs with specific
accounting certificates and documents.
Documents to attach:

–     Labour contract / service contract: should be submitted once, for the period of the payment
      following the first incurrence of the cost, whereas when any subsequent reports are submitted, it
      is enough to refer to the contract in the corresponding column of the summary invoice statement.
      Additionally, new contracts or modifications should be submitted for the period of the relevant
      payment, and later, when new reports are being submitted, it is enough to refer to the
      modification of the contract in the corresponding column of the summary invoice statement.
–     Job description, including the activities related to the Project. If the employee has already been
      in labour relation with the Executing Agency before commencing the Project and if this
      employee performs his/her duties in the Project within the earlier stated working hours, the
      existing labour contract and job description should be supplemented with the description of the
      project-related duties.
      The job description should likewise be submitted as an attachment to the first relevant Interim
      Report and only the modification needs to be attached to the subsequent Reports.
–     If the total wage is not being accounted, the eligible amount should be calculated on the basis of
      the working hours ratio determined in the contract/job description/certificate of fulfilment. The
      working hours register signed by the specific person’s employer and the declaration certifying
      the performance of the assigned duties shall support the accounted amount.
–     Payroll accounting sheets, when a payroll accounting system is being used at the Executing
      Agency or its Partner; payroll/payment list, for manual payroll accounting (please indicate, on
      the list, the amount of the wage/assignment fee that the Executing Agency or its Partner intends
      to account to the debit of the Project).
–     A declaration by the organization (employer) on payment of employer’s and employee’s non-
      wage labour costs.
–     Payment receipt, confirming the transfer of the net wage and the non-wage labour costs (bank
      account statement). For a cumulated bank transfer, a declaration identifying the costs under the
      cumulated item that should be accounted to the debit of the specific Project.
–     Certificate of fulfilment for service contracts.
–     Fringe benefits (e.g. meal ticket): please attach the invoice, the receipt certifying the payment
      and the certificate as a proof of having received the benefits.

Please note that if the fee for an activity performed under a supply/service contract is paid against an
invoice, it should not be accounted under personnel costs but in the Services line.
2. Travel and foreign missions’ costs:
Travel costs are eligible for using the 2nd class in public transport vehicles or, when a business or
private car is being used, the travel costs shall be eligible with regard to the actual fuel cost, based on
the kilometres covered, or the accountable fuel cost as published by the Hungarian tax authority
(APEH) and a tax-free reimbursement by kilometres (amortization cost).

The travel of Swiss experts or those collaborating in the Partnership Program to Hungary, and the
travel of Hungarian experts or those collaborating in the Partnership Program to Switzerland, as well
as the costs of local and regional travels related to event organization may all be funded.
Documents to attach:
-   For costs of a privately-owned vehicle used in the interest of the project:
            o Delegation order, cash disbursement voucher or bank account statement,
            o Based on the travel order, the fuel price published by APEH and a flat amortization
                 cost may be eligible;
-   For costs related to a motor vehicle owned by the organization:
            o Invoice, cash disbursement voucher, motor vehicle registration certificate;


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-                   Road register:
            o   Indicate the type of the motor vehicle, its licence number and the standard
                consumption. Should include the date and time of travel, the destination (travel to and
                from), the name(s) of the business partner(s) visited and the number of kilometres
                covered on public road;
-                   For the costs of public transport:
            o   Travel order, invoice of the tickets, cash disbursement voucher or bank account
                statement, which is to underlie the advance received or the offset of the ticket.
Accommodation, meals and per diem, accompanying a delegation:
Documents to attach:
–     Documents certifying the necessity of the mission and its relation to the Project (e.g. invitation
      letter, travel order, agenda, attendance sheet);
–     Invoices or accounting documents of equivalent probative value justifying the incurred costs and
      or other certificates authentically documenting the business event (e.g. on accommodation, the
      use of public transport/taxi);
–     For per diem, a travel order including the certification of fulfilment. Per diem shall only be
      accounted according to the government decree 278/2005 (of 12.20.) on the Reimbursement of
      Meal Costs of Employees on Domestic Official Delegation, Government Decree 168/1995 on
      Recognized Costs Associated with Foreign Posting, the Executing Agency’s or the Partner’s
      internal regulations and the currently effective relevant Hungarian rules and regulations;
–     The Swiss Party shall respect its national legislation and internal rules during the determination
      of costs of travels and foreign missions.
–     Certificate of financial settlement.

Travel of a foreign partner/expert/citizen collaborating in the Partnership Program to Hungary:
–    Invoice at the Partner’s/expert’s name (air ticket, railway ticket),
–    Copy of the travel ticket or the boarding card,
–    Disbursement voucher (bank account statement certifying the payment of the ticket value).

Travel of a Hungarian expert/citizen collaborating in the Partnership Program to Switzerland:
–    Invoice at the Executing Agency’s or the traveller’s name,
–    Copy of the travel ticket or the boarding card,
–    Certificate of disbursement.

Please note that the cost of the service shall not be eligible upon lack of the invoice. The person
organizing the trip should be warned accordingly when making preparations for the travel.

3. Supply, works and procurement of services
The costs of procurement and installation of new assets inevitably necessary for project
implementation (machines, equipment, appliances), the costs of services necessary for project
implementation and the costs of construction works inevitably necessary for the performance of
certain activities are eligible, provided they are in direct relation with achieving the objectives of
the Project.
The assets connected to project management (e.g. office equipment, appliances, software, IT and
communication assets) cannot be procured. The Applicant must have the infrastructure underlying
implementation at its disposal.
Documents to attach:
–     Contracts, orders;
–     Quotations, order. For procurements below the threshold stipulated in the Public Procurement
      Act, according to the Procurement Guide – obligatory to ask for three bids in every case in the
      Block Grant!;



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–     Documents of the public procurement, provided the asset to be procured or the construction
      investment service is subject to public procurement procedures;
–     Invoice or any other certificate authentically documenting the business event;
–     Documents certifying fulfilment (e.g. bill of lading, commissioning protocol, protocol of
      delivery and acceptance, tangible assets registration sheet);
–     Certificate of disbursement.
No amortization cost or depreciation is eligible.

4. Bank cost (account opening and management)
Only the costs of opening and managing an appropriated bank account are eligible if the existence of a
separate bank account is prescribed in the Call for Applications or in Government Decree 237/2008
(26.09.) on the Execution Order of the Swiss-Hungarian Cooperation Program.
The charges of financial transactions, foreign currency/exchange conversion charges, losses and other
exclusively financial costs are not eligible.
Documents to attach:
-     Bank account statement, certifying the deduction of bank costs (opening or account
      management) by the bank.

5. Services related to professional implementation
The cost of consultancy by a notary public, technical and financial consulting, certain costs related to
public procurement, insurance premiums, bookkeeping and audit costs can be accounted here.
A precondition underlying the eligibility of audit costs is that they be ordained in the Implementation
Agreement, by the National Coordination Unit or in a national regulation.
If the invoiced service fee (e.g. bookkeeping) covers a whole year, only the proportionate part of the
invoice covering the grant period shall be eligible.

Documents to attach:
–     Contracts, orders;
–     Quotations, order. For procurements below the limit stipulated in the Public Procurement Act,
      according to the Procurement Guide;
–     Documents of the public procurement, provided the service to be procured is subject to public
      procurement procedures;
–     Public procurement documentation compiled by the expert, if different from the above;
–     Invoice or any other certificate authentically documenting the business event;
–     Certificate of disbursement;
–     Documents certifying fulfilment;
–     Report on the expert’s completed activity;
–     Audit Report.

6. Activities related to publicity (service, procurement)
The costs of services incurring in connection with publicity/PR activities can be accounted on this line.

Documents to attach:
–     Contracts, orders;
–     Quotations, order. For procurements below the limit stipulated in the Public Procurement Act,
      according to the Procurement Guide;
–     Documents of the public procurement, provided the service to be procured is subject to public
      procurement procedures;
–     Invoice or any other certificate authentically documenting the business event;
–     Certificate of disbursement;


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–     Documents certifying fulfilment;
–     Report on the completed activity;
–     Attendance sheet of the event, photos;
–     Deposit copies published/issued.

7. Professional services

The costs of professional services directly connected to the activities or inevitable for project
implementation are eligible.
For instance the costs of publications, studies, conferences, project events, if the entrepreneur
providing the service issues an invoice (broken down to partial activities, when providing more than
one activity) on these costs (and the Executing Agency designates the partial activities in an itemized
invoice statement during financial settlement).

Publications and studies
    Should indicate the total cost of the documents, including editing, translation, printing costs.

Conferences / project events
    Should indicate the total cost of each event, including:
    rental of the site,
    rental of assets,
    translators, interpreters, and
    supply.

The costs of accommodation, meals and travel shall only be eligible against an invoice issued by the
service provider to the Executing Agency’s or its Partner’s name.

8. Other services

Services related to fulfilling the obligations identified in the Implementation Agreement:
     Costs of activities related to information supply and publicity (e.g. production of brochures and
      information leaflets, communication campaigns etc.),
     Costs connected to the management of the public procurement procedure,
     Other translation costs.

                                         Non-Eligible Costs

The following costs are non-eligible:
     Deductible VAT or other taxes, or taxes not debited on the Executing Agency or its Partner,
     Costs incurring beyond the eligibility period,
     Costs of banking and financial transactions: settlement of outstanding interests, cost of credit
      overdrawing, other financial administrative costs (but the fee charged for opening and managing
      an appropriated sub-account or a separate bank account, and the cost of transferring the grant
      amount to the Partner is eligible), as well as the costs of bank transfer transactions,
     exchange commissions and losses,
     Payment of commissions, dividend and profit,
     Acquisition of business share and shares,
     Costs of financial guarantees and collaterals provided by financial institutions,
     Penalties, fines, costs of legal actions,
     General costs, indirect costs,
     Procurements not connected to the Project,



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     Application writing costs,
     Acquisition or rent of real estate and land,
     Depreciation,
     Contribution in kind,
     Part of project management costs in excess of 10% of the total project cost.


The costs shall be considered as costs incurring in the eligibility period if disbursement, invoicing,
delivery of the subject of procurement (e.g. procurement of goods and services etc.) all took place
within this term.
Project implementation shall comprise each step (level) from the commencement of implementation to
the realization of the approved Project, including any necessary measures affecting publicity.

The Executing Agency and the Swiss Partner must not have any income generated in connection
with project implementation.




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