EUROPEAN FUNDS MANAGEMENT AND REPORTING OF THE EU FUNDING A PRACTICAL GUIDE ON THE. Bruno Zampaglione 24 Febbraio 2016 Firenze

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1 EUROPEAN FUNDS A PRACTICAL GUIDE ON THE MANAGEMENT AND REPORTING OF THE EU FUNDING Bruno Zampaglione 24 Febbraio 2016 Firenze

2 MANAGEMENT AND REPORTING OF THE EU FUNDING SUMMARY 1^ Parte SUMMARY 2^ Parte Introduction: quick notes on the management, reporting and control of EU funds REGULATORY FRAMEWORK: Financial regulation (UE) nr. 966/2012 FORM OF COSTS DIRECT AND INDIRECT COSTS INELIGIBLE COSTS OVERVIEW OF EUROPEAN FUNDS FOCUS ON H2020 Grant Agreement How to prepare a budget in H2020 PAYMENTS AND CONTROLS FINAL GRANT AMOUNT REVISED GRANT AMOUNT AUDITING: key aspects SOME FUNDING H2020: Regulations (UE) nr e nr del 2013 Bruno Zampaglione - Auditing and project management 2

3 LA GESTIONE, LA RENDICONTAZIONE ED IL CONTROLLO DEI FINANZIAMENTI EUROPEI Due fattori principali di successo: CONOSCENZA DEL QUADRO NORMATIVO DI RIFERIMENTO IMPIEGO DELLE TECNICHE DI BASE DEL PROJECT MANAGEMENT Bruno Zampaglione - Auditing and project management 3

4 PROGETTAZIONE Analisi della normativa Fattibilità finanziaria del progetto Pianificazione degli obiettivi Programmazione di tempi e risorse; Definizione dei Costi/Ricavi Life cycle Project Management MONITORAGGIO Costi, risultati, tempistiche VERIFICA Analisi scostamenti e relative cause RI-PIANIFICAZIONE Attuazione di correttivi e nuove stime 1. Budget 2. Management 3. Financial Reporting (Cost Claiming) RILEVAZIONE Costi e ricavi effettivi (nelle scritture contabili) CONSOLIDAMENTO Approvazione e Consolidamento dei dati ARCHIVIAZIONE Documentazione tecnica e finanziaria 4.AUDIT (esterno) AUDIT INTERNO (Monitoraggio) Brainstorming semestrali Bruno Zampaglione - DIVISIONE Auditing SERVIZI and project PER L RICERCA management 4

5 ALCUNI CRITERI GUIDA: Conoscenza delle norme e regole che presiedono ad una corretta gestione dei finanziamenti europei (Regolamenti generali UE, Bandi, linee guida di rendicontazione, Grant Agreement, etc..) con particolare attenzione all eleggibilità dei costi; Each call is characterized by its modes of application of the proposals, the composition of the partnerships, the intensity of aid from the EU, as well as by the management and reporting of the activities carried out and the resulting costs Conoscenza delle normative amministrative e contabili nazionali e regolamentari dell ente beneficiario (CIG; CUP; DURC; MEPA; normativa sugli appalti pubblici, etc ) Si tenga conto che nei finanziamenti europei, ed in particolare sul programma quadro Horizon 2020, è ricorrente il richiamo alle usuali/consuete pratiche di contabilità analitica utilizzate dal beneficiario per determinare l ammissibilità di alcune tipologie di spesa Bruno Zampaglione - Auditing and project management 5

6 Organizzazione delle attività amministrative-contabili in funzione di: una efficace ed efficiente gestione finanziaria del flusso delle spese (e delle entrate) con particolare attenzione alla rilevazione dei costi del personale (compilazione almeno mensile del timesheet); una costante funzione di monitoraggio e controllo interno sia sulla corretta implementazione tecnica del progetto (raggiungimento deliverables, rispetto delle milestones, pubblicazioni, ecc) che sull andamento dei costi e delle entrate del progetto; una sistematica funzione di archiviazione delle documentazione tecnica e finanziaria in un «unico fascicolo di progetto» Predisporre un fascicolo di progetto contenente tutta la documentazione relativa al progetto e alla realizzazione delle attività (incarichi, procedure di selezione svolte, documentazione amministrativo contabile giustificativa di spesa). Bruno Zampaglione - Auditing and project management 6

7 Regulation No 966/2012 e No 1268/2012 of the European Parliament and of the Council of 25 e 29 October 2012 strumenti normativi che disciplinano i principi e le norme di funzionamento del bilancio della UE Contengono le regole e le modalità di finanziamento e gestione dei fondi europei Il regolamento 966/2012 è entrato in vigore l 1/01/2013 D.G. Commissione UE Work programme Bruno Zampaglione - Auditing and project management 7 Calls for proposals

8 "ASSEGNAZIONE DEI FINANZIAMENTI UE La Commissione attua il bilancio secondo i metodi indicati nell Art 58. Art 58: Methods of implementation of the budget A) directly (direct management) direttamente attaverso una gestione diretta dei finanziamenti attraverso i propri servizi, personale, e/o agenzie; (Direzioni Generali). The financial resources are managed centrally by the European Commission that dispenses the founds through the publication of calls for proposals in the Official Journal of the European Union or through the websites of the Directorates General (DG) of the European Commission. B) under shared management with Member States (shared management) nell ambito di una gestione concorrente con gli Stati membri. FINANCIAL REGULATION 966/2012 The financial resources are transferred to the member states, in particular the Regions, that on the bases of operational programs will have the assignment to end users: e.g Structural Funds; P.O.N.; P.O.R.;. C) indirectly (indirect management) indirettamente, se l atto di base lo prevede o nei casi di cui parla l art 54, paragrafo 2, primo comma lettere da a) a d), affidando compiti di esecuzione del bilancio: i) a paesi terzi; ii) a organizzazioni internazionali o rispettive agenzie; iii) alla BEI e al Fondo europeo per gli investimenti, ecc.. Bruno Zampaglione - Auditing and project management 8

9 FINANZIAMENTI DIRETTI (direct management) Art 121: Scope of grants (ambito di applicazione delle sovvenzioni) Grants are direct financial contributions, by way of donation..le sovvenzioni sono contributi finanziari diretti a carico del bilancio UE accordati a titolo di liberalità..shall be covered either by a written agreement or by a Commission decision notified to the successful applicant of a grant..sono oggetto di una convenzione scritta oppure di una decisione della Commissione notificata al richiedente selezionato di una sovvenzione Bruno Zampaglione - Auditing and project management 9

10 Article 123: Forms of grants Le sovvenzioni di finanziamento (Grants) possono assumere diverse forme: 1. Grants may take any of the following forms: (a) reimbursement of a specified proportion of the eligible costs, referred to in Article 126, actually incurred; rimborso di una determinata percentuale dei costi ammissibili effettivamente sostenuti di cui all'articolo 126; Life programme [D.G.ENV] (max 60% of total costs ) FINANCIAL REGULATION 966/2012 (b) reimbursement on the basis of unit costs; rimborso sulla base dei costi unitari, stabiliti dalla Commissione e «quando previsto» dal beneficiario mediante il ricorso alle proprie/usuali pratiche di contabilità analitica. 36 months Marie Sk. Curie actions [D.G.Research] Bruno Zampaglione - Auditing and project management 10

11 Le sovvenzioni di finanziamento (Grants) possono assumere diverse forme: Article 123: Forms of grants FINANCIAL REGULATION 966/2012 (c) lump sums; finanziamenti attraverso l erogazione di somme forfettarie; Financing of the 1st phase of the "SME instrument" Feasibility Study on the commercial potential of the project idea (50,000 ) (d) flat-rate financing; finanziamenti a tasso fisso; Overheads : Life programme [D.G.ENV] (7%) (e) a combination of the forms referred to in points (a) to (d) Programma Horizon 2020 [D.G.Research] Bruno Zampaglione - Auditing and project management 11

12 L art 125 stabilisce due importanti principi nell assegnazione dei finanziamenti: Art. 125: General principles applicable to grants 3. Grants shall involve co-financing.. without prejudice to the specific rules laid down in Title IV of Part Two...le sovvenzioni sono soggette al regime del cofinanziamento. I tassi di finanziamento sono previsti sempre come tetti massimi (es. Finanziamenti dei progetti Life fino al 60%) FINANCIAL REGULATION 966/ Grants shall not have the purpose or effect of producing a profit within the framework of the action or the work programme of the beneficiary ( no-profit principle ) le sovvenzioni non hanno come oggetto o effetto un profitto nel quadro dell'azione o del programma di lavoro del beneficiario ("principio del divieto del fine di lucro"). Bruno Zampaglione - Auditing and project management 12

13 L art 125 stabilisce due importanti principi nell assegnazione dei finanziamenti: Art. 125: General principles applicable to grants FINANCIAL REGULATION 966/2012 Profit shall be defined as a surplus of the receipts over the eligible costs incurred by the beneficiary, when the request is made for payment of the balance... il profitto è definito come un surplus di entrate rispetto ai costi ammissibili sostenuti dal beneficiario, quando la richiesta è fatta per il pagamento del saldo. RECEIPTS OF THE PROJECT Maximum Grant Amount Receipts (sale of equipment) Receipts (fees of workshop) Total receipts of the project COSTS OF THE PROJECT Costs reclaimed and approved UE ,00 total costs of the project ,00 RECEIPTS = ELIGIBLE COSTS = PROFIT = Bruno Zampaglione - Auditing and project management 13

14 L art 125 stabilisce due importanti principi nell assegnazione dei finanziamenti: Art. 125: General principles applicable to grants FINANCIAL REGULATION 966/2012 Where a profit is made, the Commission shall be entitled to recover the percentage of the profit corresponding to the Union contribution to the eligible costs actually incurred by the beneficiary to carry out the action or work programme. Qualora si ottenga un profitto, la Commissione ha il diritto di recuperarne la percentuale corrispondente al contributo dell'unione sui costi ammissibili effettivamente sostenuti dal beneficiario per realizzare l'azione o il programma di lavoro. PROFIT = RECEIPTS OF THE PROJECT Maximum Grant Amount Receipts (sale of equipment) Receipts (fees of workshop) FINAL GRANT AMOUNT COSTS OF THE PROJECT eligible costs approved UE ,00 total costs of the project ,00 Bruno Zampaglione - Auditing and project management 14

15 Article 126: Eligible costs FINANCIAL REGULATION 966/ Grants shall not exceed an overall ceiling expressed in terms of an absolute value which shall be established on the basis of estimated eligible costs. le sovvenzioni non superano un massimale globale espresso in termini di valore assoluto, fissato in base ai costi ammissibili stimati. Esempio: Participant Country Direct Personnel Cost A B C D E F G H I J Other Direct Costs Direct Costs of Sub-Contracting BUDGET FOR PROPOSAL Direct costs of providing financial support to third parties Costs of inkind contributions not used on the beneficiary's premises Indirect Costs (=0.25(A+B-E)) Special unit costs covering direct & indirect costs Total estimated eligible costs/ (=A+B+C+D+F +G) Reimbursement rate Max. grant (=H*I) xxx IT % L importo di costituisce l ammontare massimo erogabile dalla CE per questo progetto, anche se vengono sostenuti ed approvati costi per un importo superiore. Bruno Zampaglione - Auditing and project management 15

16 Eligible costs: The grant can only reimburse eligible costs. This means that the beneficiaries must: at proposal stage: enter only eligible costs into the estimated budget for your action. at reporting stage: declare only eligible costs in your financial statements; Moreover, the burden on proof for eligibility is on the beneficiaries. They must keep sufficient supporting documents to show that the costs they declare are eligible. Fascicolo di progetto Bruno Zampaglione - Auditing and project management 16 IMPORTANTE

17 Eligible costs: depth study (approfondimento) Vi sono due importanti condizioni che determinano l eleggibilità dei costi: general eligibility conditions applicable per cost form specific eligibility conditions applicable per budget category Bruno Zampaglione - Auditing and project management 17

18 Actual costs General eligibility conditions applicable per cost form Unit cost Lump sums Art 123 F.R. Forms of grants Flat rate Bruno Zampaglione - Auditing and project management 18

19 General eligibility conditions applicable per cost form In order to be eligible, actual costs (Costi reali, effettivi) must be: actually incurred by the beneficiary i.e. real and not estimated, budgeted or imputed and definitively and genuinely borne by the beneficiary (not by any other entity);.reali e non stimati, preventivati o attribuiti e definitivamente e realmente sostenuti dal beneficiario (non da qualsiasi altro ente); i.e: Depreciation costs for equipment used for the action are those actually incurred, not the full cost of the equipment; Example: Total equipment cost = Depreciation costs = Total costs charged to the project = enter in the budget (not ) Bruno Zampaglione - Auditing and project management 19

20 General eligibility conditions applicable per cost form incurred during the action duration i.e. the generating event that triggers the costs must take place during the action duration that is the period running from the action starting date to the end date of the action....sostenuti nel corso della durata dell'azione start end Example: A conference for which costs are claimed must take place during the action duration. Specific cases: Costs for reporting at end of the action Costs related to drafting and submitting the periodic report for the last reporting period and the final report are eligible even if they are incurred after the action duration. Those costs include the cost of certificates on the financial statements required by the GA and the cost of participating in a final review carried out by the Commission before the submission of the final reports. Costs related to preparing, submitting and negotiating the proposals cannot be declared as eligible for the action (they are incurred before the action starts). Not eligible start Bruno Zampaglione - Auditing and project management 20 end

21 General eligibility conditions applicable per cost form entered as eligible costs in the estimated budget of the action, under the relevant budget category..sono iscritti come costi eleggibili nel budget dell azione When the final amount of the grant is calculated, the eligible costs cannot include costs under budget categories that did not appear in the action estimated budget, unless the initial estimated budget was amended or if these additional costs were approved. Calls for proposals shall specify the CATEGORIES OF COSTS considered as eligible for Union funding. Bruno Zampaglione - Auditing and project management 21

22 General eligibility conditions applicable per cost form connected to the action as described in the relevant Annex They must be necessary to achieve the action s objectives....collegati all azione come descritto nell allegato scientifico (annex) The EU grant cannot be used to finance activities other than those approved by the Commission. i.e: the simple participating in a conference is not eligible (not connected to the action) Eligible cost Not eligible cost Bruno Zampaglione - Auditing and project management 22

23 General eligibility conditions applicable per cost form identifiable and verifiable come directly from the beneficiary s accounts, be directly reconcilable with them and supported by documentation...identificabili e verificabili e provenire direttamente dalla contabilità del beneficiario, direttamente riconciliabili con loro e supportati da documentazione. The beneficiaries must be able to show, with records and supporting documents, the actual costs incurred. Accounting documentation is necessary only for actual costs. Indirect costs do not need supporting evidence because they are declared using a flat-rate. Bruno Zampaglione - Auditing and project management 23

24 General eligibility conditions applicable per cost form Costs must be calculated according to the applicable accounting rules of the country in which the beneficiary is established and according to the beneficiary s usual cost accounting practices... I costi devono essere calcolati in base alle norme contabili applicabili nel paese in cui è stabilito il beneficiario e secondo abituali pratiche di contabilità analitica del beneficiario. This principle cannot be used as justification for non-compliance with other GA provisions. It is clear that a beneficiary is obliged to introduce any changes necessary to bring its usual cost accounting practices in line with all GA provisions. Bruno Zampaglione - Auditing and project management 24

25 General eligibility conditions applicable per cost form in compliance with applicable national laws on taxes, labour and social security conformi alle leggi nazionali applicabili sulle tasse, lavoro e sicurezza sociale reasonable, justified and must comply with the principles of sound financial management, in particular regarding economy and efficiency.ragionevoli, giustificati e devono rispettare i principi di sana gestione finanziaria, in particolare per quanto riguarda l'economia e l'efficienza. Must be in line with good housekeeping practice when spending public money and not be excessive. Best value for money Bruno Zampaglione - Auditing and project management 25

26 General eligibility conditions applicable per cost form They must be calculated as follows: amounts per unit multiplied by the number of actual units amounts per unit set out in relevant ANNEX (fixed by Commission Decision or calculated by the beneficiary in accordance with its usual cost accounting practices) multiplied by the number of actual units; i.e 200 per test (amounts per unit) X n. 100 analysis (number of actual units) Ammontare per unità moltiplicato per il numero delle unità effettive (prodotte o utilizzate) Bruno Zampaglione - Auditing and project management 26

27 General eligibility conditions applicable per cost form 2. the number of actual units must comply with the following conditions: the units must be actually used or produced in the project period; the units must be necessary for implementing the action or produced by it; the number of units must be identifiable and verifiable, in particular supported by records and documentation. i.e 200 per test (amounts per unit) X n. 100 analysis (number of actual units) The beneficiaries must be able to show with records and supporting evidence that the number of units declared was actually used for the action. The actual costs of the work are not relevant. Bruno Zampaglione - Auditing and project management 27

28 General eligibility conditions applicable per cost form they must be calculated by applying the flat-rate set out in the Annex, F.R 966/2012.the grant decision or agreement may authorise or impose, in the form of flat-rates, funding of the beneficiary's indirect costs up to a maximum of 7 % of total eligible direct costs for the action, The 7 % ceiling may be exceeded on the basis of a reasoned decision of the Commission. and the costs to which the flat-rate is applied must comply with the conditions for eligibility set out in the Grant Agreement. In order to be eligible, flat-rate costs must be calculated by applying a flat rate to the relevant eligible costs (whether actual, unit or lump-sum costs) The beneficiaries must be able to show that the costs to which the flat-rate is applied are eligible. Bruno Zampaglione - Auditing and project management 28 e.g. Horizon 2020 [D.G.Research] (25%)

29 General eligibility conditions applicable per cost form the eligible amount is equal to the amount set out in Annex, and the corresponding tasks or parts of the action must have been properly implemented in accordance with Scientific Annex. The beneficiaries do not need justifiy actual costs but must be able to show that the action tasks have been carried out as described in the scientific Annex of the Grant. Bruno Zampaglione - Auditing and project management 29

30 General eligibility conditions applicable per cost form % Bruno Zampaglione - Auditing and project management 30

31 Specific conditions for costs to be eligible Direct and indirect costs Bruno Zampaglione - Auditing and project management 31

32 Specific conditions for costs to be eligible Direct and indirect costs Direct costs are those costs directly linked to the action implementation and can therefore be attributed to it directly...sono quei costi direttamente connessi alla realizzazione dell'azione. They are those which support all the research, management, training and dissemination activities necessary for the conduct of the project. e che supportano tutte le attività di ricerca, gestione, formazione e divulgazione necessarie per lo svolgimento del progetto. the costs have to be determined (originated) by the activities of the action; the costs have to be determined (originated) by the activities of several actions (projects) the attribution of which to a single project can, and has been, directly measured and not attributed indirectly via an allocation a cost driver or a proxy. Bruno Zampaglione - Auditing and project management 32

33 Specific conditions for costs to be eligible Direct and indirect costs Direct costs are eligible if they are comply at the specific conditions set out for each of the following budget categories: Personnel costs Subcontracting Other direct costs (More sub-categories of costs) The costs declared by a beneficiary as a direct costs of the action must be justified by supporting evidence and be directly reconcilable with the beneficiary s accounts. Bruno Zampaglione - Auditing and project management 33

34 Specific conditions for costs to be eligible Direct and indirect costs Indirect costs, also called overheads, are those costs which cannot be identified as directly attributable to the project, but which are incurred in direct relationship with the project's direct eligible costs to the performance of the action...sono i costi che non possono essere identificati come direttamente attribuibili al progetto, ma che sono stati sostenuti in diretta relazione con i costi diretti ammissibili del progetto. Indirect costs are charged under the form of a flat-rate up to 7% of the eligible direct costs. i.e: in Horizon 2020, indirect costs are declared as a 25% fixed flat-rate of the eligible direct costs (minus certain direct eligible costs). Typically, they include administration and management fees, depreciation costs of durable goods (share ineligible), maintenance costs, telecommunication and postal fees, heating, water supply,electricity or other forms of energy, office furniture, office stationery, and insurance policies. Bruno Zampaglione - Auditing and project management 34

35 Specific conditions for costs to be eligible Personnel costs Generally, the personnel costs are eligible, if they are related to: personnel working for the beneficiary (. lavora per il beneficiario) doesn t matter whether works part time or full time or with a temporary or permanent employment contract. under an employment contract (or equivalent appointing act). sulla base di un contratto di impiego/lavoro o di un atto di nomina equivalente mandatory under national law, collective labour agreements or the employment contract and assigned to the action ( e assegnato all azione) i.e. work for the action according to internal written instructions, organisation chart or other documented management decision. Bruno Zampaglione - Auditing and project management 35

36 Specific conditions for costs to be eligible Personnel costs They must be limited to salaries (including during parental leave), social security contributions, taxes and other costs included in the remuneration, if they arise from national law or the employment contract (or equivalent appointing act). essi devono essere limitati ai salari (comprensivi quelli pagati durante il congedo parentale), oneri sociali, imposte e altri costi compresi nella retribuzione,. se essi provengono dal diritto nazionale o del contratto di lavoro (o di un atto di nomina equivalente). The basic remuneration comprise basic salary and complements The basic salary includes (and is limited to): the salary stated on the beneficiary s payroll, social security contributions, taxes and other costs included in the remuneration. Bruno Zampaglione - Auditing and project management 36

37 Specific conditions for costs to be eligible Personnel costs calculation METHOD: HOURLY RATE X NUMBER OF ACTUAL HOURS WORKED ON THE ACTION (costo orario per il numero di ore effettivamente lavorate sul progetto) ONLY hours actually worked on the action can be counted; The number of actual hours declared for a person must be identifiable and verifiable For personnel costs the beneficiaries must keep time records for the number of hours declared. The time records must be in writing and approved by the persons working on the action and their supervisors, at least monthly. (Timesheet) Bruno Zampaglione - Auditing and project management 37

38 Specific conditions for costs to be eligible Personnel costs Bruno Zampaglione - Auditing and project management 38

39 Specific conditions for costs to be eligible Personnel costs HOURLY RATE: Calculation actual annual personnel costs for the person.costi di personale reali (pieni) annuali per persona Generalmente: costo annuo lordo complessivo Ente/Società divided by number of annual productive hours (numero di ore produttive annuali) Es. A nuclear researcher working for a public research laboratory. Annual salary: EUR annual productive hours worked 1600 Hourly rate for the action = {(50 000)/1 600} = EUR 31,25 Timesheet The total number of hours declared in EU or Euratom grants, for a person for a year, cannot be higher than the annual productive hours used for the calculations of the hourly rate. Bruno Zampaglione - Auditing and project management 39 nel ns esempio: max 1600 ore annue

40 Specific conditions for costs to be eligible Personnel costs The costs for natural persons working under a direct contract i costi per le persone fisiche che lavorano sulla base di un contratto diretto (di norma le persone arruolate) These costs must comply with the following conditions for eligibility: there must be a direct contract between the natural person (individual) and the beneficiary; the person must work under the beneficiary s instructions and, unless otherwise agreed with the beneficiary, on the beneficiary s premises; the result of the work carried out must belong to the beneficiary; not be significantly different from costs for personnel performing similar tasks under an employment contract with the beneficiary..non essere significativamente differenti dai costi sostenuti per il personale che svolge funzioni analoghe nell'ambito di un contratto di lavoro con il beneficiario. Bruno Zampaglione - Auditing and project management 40

41 Specific conditions for costs to be eligible Personnel costs This is typically the case of in-house consultants (i.e. self-employed natural persons working part-time or full-time for the action; not companies). The remuneration must be based on working hours, rather than on delivering specific outputs/products. This implies that the beneficiary must keep records of the hours worked for the action (e.g. time-sheets) calculation METHOD: HOURLY RATE X NUMBER OF ACTUAL HOURS WORKED ON THE ACTION (costo orario per il numero di ore effettivamente lavorate sul progetto) Bruno Zampaglione - Auditing and project management 41

42 Specific conditions for costs to be eligible Subcontracting costs The beneficiaries must normally have the technical and financial resources needed to carry out the action themselves.i beneficiari devono avere, normalmente, le risorse tecniche e finanziarie necessarie per realizzare l'azione da se stessi. As an exception, if necessary to implement the action, the beneficiaries may award subcontracts covering the implementation of certain action tasks described in scientific Annex.. in via eccezionale, se necessario per attuare l'azione, i beneficiari possono assegnare subappalti per l esecuzione di alcuni compiti dell azione descritti nell'allegato scientifico. Subcontracts means the purchase of goods, works or services that are identified in the Scientific Annex as action tasks. Examples: Testing and analysis of the resistance of a new component under high temperatures is a subcontracting ifit s described in the relevant Annex as action task. Bruno Zampaglione - Auditing and project management 42

43 Specific conditions for costs to be eligible Subcontracting costs This budget category covers (and is limited to) the price paid for subcontracts and related taxes This means that the subcontractor charges a price, which usually includes a profit; There is no specific calculation method. The costs must correspond to the eligible costs actually incurred. The beneficiaries must base their subcontracts on the best value for money considering the quality of the service proposed (also called best price-quality ratio ) or on the lowest price.....i beneficiari devono basare i loro subappalti sul miglior rapporto qualità-prezzo. Bruno Zampaglione - Auditing and project management 43

44 Specific conditions for costs to be eligible Other Direct Costs TRAVEL COSTS and related subsistence allowances DURABLE GOODS: depreciation costs of equipment, infrastructure or other assets OTHER GOODS AND SERVICES: consumables, analysis; pubblication,ecc Bruno Zampaglione - Auditing and project management 44

45 Specific conditions for costs to be eligible Travel Other Direct Costs 1. Travel costs and related subsistence allowances This budget category covers the travel costs and related subsistence allowances (including all related duties, taxes and charges that the beneficiary has paid) necessary for the action (e.g. to present a paper explaining the results of a conference). All travel costs must be limited to the needs of the action Travel costs related to an event at which the beneficiary carried out work that was not specifically related to the action or costs related to extensions (for other professional or private reasons) are NOT eligible. Bruno Zampaglione - Auditing and project management 45

46 Specific conditions for costs to be eligible Travel Other Direct Costs There are three particular types of travel: FOR PARTICIPATION IN MEETINGS, CONFERENCES, WORKSHOPS e.g. to present a paper explaining the results of a conference FOR PROJECT MEETINGS: e.g. twice yearly meetings between the partners to check the progress of scientific and financial project FOR RESEARCH : e.g. sample collection Travel and subsistence costs must be adequately recorded and be in line with the beneficiary s usual practices on travel. Generally, there is no specific calculation method. The costs must correspond to the eligible costs actually incurred. Bruno Zampaglione - Auditing and project management 46

47 Specific conditions for costs to be eligible Durable Goods Other Direct Costs 2. DURABLE GOODS: DEPRECIATION COSTS OF (EQUIPMENT, INFRASTRUCTURE OR OTHER ASSETS) This budget category covers the costs of purchase of durable goods as equipment, infrastructure or other assets, used for the action and registered with an inventory number. It refers to goods (assets) that have a long-term utility. (utilità pluriennale) Generally, the cost of equipment purchase can be charged to the project if they respect the following rule: Only the cost depreciated, in accordance with the national depreciation rules, will be considered eligible. If such rules do not exist, EU depreciation rules will be applied (International accounting standards). Bruno Zampaglione - Auditing and project management 47

48 Specific conditions for costs to be eligible Durable Goods Other Direct Costs They must be calculated according to the following principles: the depreciable amount (purchase price) of the equipment must be allocated on a systematic basis over its useful life (i.e. the period during which the equipment is expected to be usable); depreciated equipment costs can NOT exceed the equipment s purchase price; only the part of the equipment actually used for the action may be declared (i.e. time used for the action and, in case of shared use, the percentage of actual use for the action). The depreciation costs must be calculated for each reporting period. Bruno Zampaglione - Auditing and project management 48

49 Specific conditions for costs to be eligible Durable Goods Other Direct Costs In some cases (e.g. infrastructure), purchase costs may include the costs necessary to ensure that the asset is in good condition for its intended use (e.g. site preparation, transport, delivery, installation, etc.). If the work programme so provides, this budget category may covers the full purchase costs of capitalised equipment, infrastructure or other assets used for the action (not only the depreciation costs for the relevant periodic report).; Costs of renting or leasing equipment. Bruno Zampaglione - Auditing and project management 49

50 Specific conditions for costs to be eligible Other Goods and Services Other Direct Costs This budget category covers the costs for goods and services that were purchased for the action (nedeed) and including: costs for consumables; dissemination costs; translation costs; If requested, costs for certificates on financial statements (CFS) (internal Audit) Generally, the costs of other goods and services must be declared as actual costs. Bruno Zampaglione - Auditing and project management 50

51 Specific conditions for costs to be eligible Indirect Costs Generally, they are eligible if are declared on the basis of the flat-rate of 7% of the eligible direct costs. from which are often excluded: costs of subcontracting costs of, eventual in-kind contributions, provided by third parties which are not used on the beneficiary s premises. Bruno Zampaglione - Auditing and project management 51

52 Ineligible costs costs related to return on capital; debt and debt service charges; provisions for future losses or debts; interest owed; doubtful debts; currency exchange losses; bank costs charged by the beneficiary s bank for transfers from the Commission excessive or reckless expenditure; deductible VAT; In Italy, IRAP costs incurred during suspension of the implementation of the action; costs declared under another EU grant Bruno Zampaglione - Auditing and project management 52

53 Activities of the project Work Packages (tasks) The most part of the funding are characterized by the following activities: Research and Technological Development Activities ; Demonstration activities; Management activities; Training activities; Dissemination activities; Bruno Zampaglione - Auditing and project management 53

54 Activities of the project Funding schemes (schemi di finanziamento) Grants are direct financial contributions, by way of donation; Grants shall involve co-financing Grants may take any of the following forms: (a) reimbursement of a specified proportion of the eligible costs, referred to in Article 126, actually incurred; (b) reimbursement on the basis of unit costs; (c) lump sums; (d) flat-rate financing; (d) a combination of the forms referred to in points (a) to (d) Bruno Zampaglione - Auditing and project management 54

55 FUNDING SCHEMES The European Fundings: overview Affari economici e finanziari (ECFIN) Affari interni (HOME) Affari marittimi e pesca (MARE) Agricoltura e sviluppo rurale (AGRI) Aiuti umanitari (ECHO) Allargamento (ELARG) Ambiente (ENV) Azione per il clima (CLIMA) Bilancio (BUDG) Centro comune di ricerca (JRC) Commercio (TRADE) Comunicazione (COMM) Concorrenza (COMP) Energia (ENER) Programma LIFE EuropeAid - Sviluppo e cooperazione (DEVCO) Fiscalità e unione doganale (TAXUD) Giustizia (JUST) Bruno Zampaglione - Auditing and project management 55 Imprese e industria (ENTR) Informatica (DIGIT) Interpretazione (SCIC) Istituto statistico - Eurostat (ESTAT) Istruzione e cultura (EAC) Mercato interno e servizi (MARKT) Mobilità e trasporti (MOVE) Occupazione, affari sociali e integrazione (EMPL) Politica regionale (REGIO) Reti di comunicazione, contenuti e tecnologie (CNECT) Ricerca e innovazione (RTD) Risorse umane e sicurezza (HR) Programma H2020 Salute e consumatori (SANCO) Segretariato generale (SG) Servizio degli strumenti di politica estera (FPI)

56 SOME FUNDING SCHEMES DG ENVIRONMENT - Life Programme Max 60% funding Min 40% co-funding Max 7% OVERHEADS DG JUSTICE - Programme Max 80% funding Min 20% co-funding Max 7% OVERHEADS DG SANCO Max 60% funding Min 40% co-funding Max 7% OVERHEADS Bruno Zampaglione - Auditing and project management 56

57 DG ENVIRONMENT - Life Programme FUNDING SCHEMES Max 60% funding Min 40% co-funding 2% rule on the personnel (only for public bodies) max 7% overheads Bruno Zampaglione - Auditing and project management 57

58 DG ENVIRONMENT - Life Programme Importance of the relevant guidelines Funding is based on cost-sharing. This means that the Commission contributes up to a maximum percentage of the eligible costs incurred for the performance of the work as defined in the grant agreement. a) The maximum EU financing rate for traditional LIFE projects is 60% of the total eligible costs; ( ) a) The coordinating beneficiary and any associated beneficiaries are expected to provide a reasonable financial contribution to the project budget; a) A proposal cannot be submitted if the financial contribution of any of the beneficiaries to the proposal budget is euro 0. Bruno Zampaglione - Auditing and project management 58

59 DG ENVIRONMENT - Life Programme Personnel (Rule 2%) The sum of the public bodies contributions (as coordinating beneficiary and/or associated beneficiary) to the project budget must exceed (by at least 2%) the sum of the salary costs charged to the project for personnel who are not considered additional Additional: include the costs of all personnel permanent or temporary- of public bodies whose contracts or contracts renewals: -Start on or after the start date of the project or on or after the date of signature of the grant agreement by the Contracting Authority in case di signature takes place before the project start date, and -Specifically mention the LIFE project Bruno Zampaglione - Auditing and project management 59

60 DG ENVIRONMENT - Life Programme Personnel Calculation of the hourly rate: The hourly rate is obtained by dividing the actual annual gross salary or wages plus obligatory social charges and any other statutory costs included in the remuneration of an employee by the total annual productive hours Default value of 1720 total annual productive hours is used. In case the beneficiary wishes to use an amount other than 1720 hours, it must justify the alternative figure on the basis of a reliable time registration system. The total annual productive hours for each employee is the time actually worked according to the time registration system. It will normally result in a different number of annual working time units for each employee. Bruno Zampaglione - Auditing and project management 60

61 DG ENVIRONMENT - Life Programme Subcontracting costs Are eligible if: cover the implementation by a third party of tasks described in the relevant Annex (II); covers the implementation of a limited part of the project, in principle limited to 35% of the total budget unless a higher level is justified; Justified having regard to the nature of the project and what is necessary for its implementation. Bruno Zampaglione - Auditing and project management 61

62 DG ENVIRONMENT - Life Programme Durable goods Application of the depreciation rate, which must be in line with the beneficiary s internal accounting rules and/or in accordance with national accounting rules, a copy of which should be included in the project file. That depreciation is limited to a maximum of 25% of the actual cost for infrastructure and a maximum of 50% of the actual cost for equipment. Bruno Zampaglione - Auditing and project management 62

63 DG ENVIRONMENT - Life Programme cost categories Life 2015 Budget breakdown Total eligible costs 1. Personnel Permanent staff or civil servant Temporary staff specifically hired for this project Travel and subsistence External assistance Durable goods - Infrastructure - Equipment - Prototype - 6. Consumables Other costs Direct cost Overheads Total costs rule2% Requested EC Contribution ,00% max 60% Co financing ,00% min 40% BUDGET LIFE (Public body) min. cofunding OK Bruno Zampaglione DIVISIONE - Auditing SERVIZI and PER project L RICERCA management 63

64 DG ENVIRONMENT - Life Programme Budget breakdown categories Total cost in Eligible Cost in % of total eligible costs 1. Personnel ,27% 2. Travel and subsistence ,70% 3. External assistance ,33% 4. Durable goods Infrastructure 0 0 0,00% Equipment 0 0 0,00% Prototype 0 0 0,00% 5. Land purchase / long-term lease 0 0,00% 6. Consumables ,00% 7. Other Costs ,16% 8. Overheads ,54% TOTAL % Contribution breakdown In % of TOTAL % total eligible costs Requested European Union contribution ,00% 60,00% Coordinating Beneficiary's contribution 0 0,00% Associated Beneficiaries' contribution ,00% Co-financers contribution 0 0,00% TOTAL ,00% Bruno Zampaglione - Auditing and project management 64

65 Bruno Zampaglione - Auditing and project management 65

66 REFERENCE DOCUMENTS: HORIZON 2020 FINANCIAL REGULATION (EU) No 966/2012 This Regulation lays down the rules for the establishment and the implementation of the general budget of the European Union and the presentation and auditing of the accounts. It entered into force on 1 January 2013 REGULATION (EU) No 1291/2013 establishing Horizon The Framework Programme for Research and Innovation ( ) REGULATION (EU) No 1290/2013 laying down the rules for participation and dissemination in "Horizon 2020 GRANT AGREEMENT The Agreement sets out the rights and obligations and the terms and conditions applicable to the GRANT awarded to the beneficiaries for implementing the ACTION. Bruno Zampaglione - Auditing and project management 66

67 REGULATION (EU) No 1291/2013 establishing Horizon 2020 the Framework Programme for Research and Innovation ( ) Horizon 2020 focuses on three priorities: create scientific excellence (Pillar 1) create a European industrial leadership (Pillar 2) tackling the problems (challenges) of society (Pillar 3) generating excellent science in order to strengthen the Union's world-class excellence in science; generare una scienza eccellente al fine di rafforzare l'eccellenza di livello mondiale dell'unione nel campo della scienza fostering industrial leadership to support business, including micro, small and mediumsized enterprises (SMEs) and innovation, promuovere la leadership industriale a supporto del business, comprese le micro,piccole e medie imprese (PMI) e l'innovazione tackling societal challenges, in order to respond directly to the challenges identified in the Europe 2020 strategy by supporting activities covering the entire spectrum from research to market...affrontare le sfide sociali, al fine di rispondere direttamente alle sfide identificate nella strategia Europa 2020 per le attività che coprono l'intero spettro dalla ricerca al mercato di supporto. Bruno Zampaglione - Auditing and project management 67

68 La struttura di HORIZON Pilastri principali e da 5 Programmi trasversali ONE - Excellence Science Frontier research (ERC) Frontier Research by the best individual teams (ERA) Future and Emerging Technologies (FET) Collaborative research to open new fields of innovation Marie Sklodowska-Curie actions Opportunities for training and career development Research infrastructures Ensuring access to world class facilities TWO - Industrial Leadership Leadership in enabling and industrial technologies - ICT - NANOTECHNOLOGIES MATERIALS - BIOTECHNOLOGIES - MANUFACTURING - SPACE Access to risk finance Leveraging private finance and venture capital for research and innovation Innovation in SMEs Fostering all forms of innovation all types of SMEs THREE - Tackling Societal Challenges Health, demographic change and wellbeing Food security, sustainable agriculture and forestry, marine, maritime and inland water research, and the bioeconomy Secure, clean and efficient energy Smart, green and integrated transport Climate action, environment, resource efficiency and raw materials Europe in a changing world - Inclusive, innovative and reflective societies Secure societies - Protecting freedom and security of Europe and its citizens European Institute of Innovation and Technologies (EIT) Spreading Excellence and Widening Partecipation Science with and for society Joint Research Centre (JRC) Euratom 68

69 HORIZON2020 structure of the overall budget 78,6M ( M) ( M) Amount Three pillar = 71,135M ( M) Science with and for Society ( 462) Spreading Excellence and Widening Participation ( 816) European Institute of Technology (EIT) ( 2711) Joint Research Centre (JRC) ( 1.903)s 69

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71 REGULATION (EU) No 1290/2013 laying down the rules for participation and dissemination in "Horizon 2020 the Framework Programme for Research and Innovation ( )" Single reimbursement rate The reimbursement rates should however be 100 % or 70 %. The reimbursement rates in this Regulation are referred to as maximums in order to comply with the non-profit requirement and the co-financing principle, and to allow participants to request a lower rate. An integrated approach should be ensured by bringing together activities covered by the Seventh Framework Programme for research, technological development and demonstration activities ( )..un approccio integrato dovrebbe essere garantito riunendo le attività contemplate dal Settimo programma quadro di ricerca, sviluppo tecnologico e dimostrazione. Bruno Zampaglione - Auditing and project management 71

72 REGULATION (EU) No 1290/2013 laying down the rules for participation and dissemination in "Horizon 2020 the Framework Programme for Research and Innovation ( )" In the Seventh Framework Programme the following activities were reimbursed as follows: Research and Technological (75%) Development Activities ; Demonstration activities; (50%) Management activities; ; (100%) Training activities; (100%) Dissemination activities; (100%) One rate = One project Same rate for all beneficiaries and all activities in the grant. The applicable rate will be defined in the Work Programme: Up to 100 % of the eligible costs; but limited to a maximum of 70 % for projects close to market. Bruno Zampaglione - Auditing and project management 72

73 3 Funding Schemes in Horizon 2020 ACTIONS = PROJECTS Research and innovation actions (RIA) (100%) means activities aiming to establish new knowledge or explore the feasibility of a new technology, product, process, service or solution. attività volte a stabilire nuove conoscenze o esplorare la fattibilità di un nuove tecnologie, prodotti, processi, servizi o soluzioni Innovation actions (IA) (70%) Enti no profit 100% means an action primarily consisting of activities directly aimed at producing plans and arrangements or designs for new, altered or improved products, processes or services...attività rivolte direttamente a produrre piani, progetti o disegni per prodotti nuovi, modificati o migliorati, processi o servizi Coordination and support actions (CSA) (100%) means an action consisting primarily of accompanying measures such as standardisation, dissemination, awareness-raising and communication, networking, coordination support services, policy dialogues and mutual learning exercises and studies,..un'azione costituita principalmente da misure di accompagnamento quali la standardizzazione, la divulgazione, la sensibilizzazione e la comunicazione, networking, coordinamento, servizi di supporto.. Bruno Zampaglione DIVISIONE - Auditing SERVIZI and PER project L RICERCA management 73

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75 Legal entities that may participate in actions Any legal entity, regardless of its place of establishment, or international organisation may participate in an action.qualsiasi soggetto giuridico, a prescindere dal suo luogo di stabilimento, o organizzazione internazionale può partecipare ad un'azione Conditions for participation The following minimum conditions shall apply: a) at least three legal entities shall participate in an action; b) three legal entities shall each be established in a different Member State or associated country; and c) the three legal entities referred to in point b) shall be independent of each other within the meaning of Article 8. Article 8 Independence Two legal entities shall be regarded as independent of each other where neither is under the direct or indirect control of the other or under the same direct or indirect control as the other. Due soggetti giuridici sono considerati indipendenti uno dall'altro quando nessuno dei due è sotto il controllo diretto o indiretto dell'altro o allo stesso controllo diretto o indiretto dell'altro. Bruno Zampaglione - Auditing and project management 75

76 Time to grant for informing all applicants of the outcome of the scientific evaluation of their application, a maximum period of five months from the final date for submission of complete proposals;..per informare tutti i richiedenti dell'esito della valutazione scientifica della loro domanda, un periodo massimo di cinque mesi dalla data limite per la presentazione delle proposte complete; submission of proposal Max 5 months outcome of the scientific evaluation for signing grant agreements with applicants or notifying grant decisions to them, a maximum period of three months from the date of informing applicants they have been successful.per la firma di accordi di sovvenzione con i candidati o notificare loro decisioni di finanziamento, un periodo massimo di tre mesi dalla data in cui sono stati informati i candidati che hanno avuto successo. outcome of the scientific evaluation Max 3 months signing grant agreement Bruno Zampaglione - Auditing and project management 76