European CommissionResearch DG-RTD-D-4

Alexis LONCKEalexis.loncke@ec.europa.eu

+32/2/2993805

FINANCIAL REPORTINGRules and Regulations

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Financial Reporting

• Purpose provide EC officers with clear and precise information for approval of activities and costs.

• Financial report refers to the provisional budget of the proposal, the outcome of the negotiation process which is translated in the Grant Agreement.

• Financial report reflects the quality of the financial management.

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FP7 Financial Rules

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Eligible Costs• Eligible costs must be:

– Actual (special case for personnel costs (average))– Incurred by the beneficiary during duration of project– in accordance with the beneficiary’s usual accounting and

management principles– Recorded in the accounts of beneficiary (during the

period of reference excepted for specific costs related to the production of the final report (60 days after the end of the project))

– Dedicated to the sole purpose of achieving the objectives of the project

– Planned in the provisional (or amended) budget or agreed on by PO/FO

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Eligible CostsEligible costs are classified in specific FP7 headings :

– staff,

– travel,

– durable equipment (! Depreciation !), ALL DIRECT COSTS

– subcontracting, DECLARED MUST

– consumables, ALWAYS BE REAL

– certificates costs, all these being direct costs, (not rounded, not averaged)

- Indirect cost (different types according to calculation method)

Organise your financial monitoring on this basis !

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Not Eligible Costs e.g.

– Identifiable indirect taxes including VAT

– Duties (tax on imported items)

– Interest owed

– Exchange losses

– Costs declared reimbursed in respect of another Community project

– debt and debt service charges, excessive or reckless expenditures

– Etc.

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Reimbursement Rates

Maximum

reimbursement rates

Research and technological development activities (*)

Demonstration

activities

Management

of the consortium

activities

Other

activities

Network of excellence

50%

75% (**)

100%

100%

Collaborative project (****)

50%

75% (**)

50%

100%

100%

Coordination and support

action

100% (***)

100% (***)

(*) Research and technological development includes scientific coordination. (**) For beneficiaries that are non profit public bodies, secondary and higher education establishments, research organisations and SMEs (***)The reimbursement of indirect eligible costs, in the case of coordination and support actions, may reach a maximum 7% of the direct eligible costs, excluding the direct eligible costs for subcontracting and the costs of reimbursement of resources made available by third parties which are not used on the premises of the beneficiary. (****) Including research for the benefit of specific groups (in particular SMEs).

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FP7Certification

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Certification (1)2 types of certificates:• Certificate on financial statements

– Expenditure verification – Compulsory for EC contributions > 375,000 €

• Certificate on the methodology

– Certifies methodology of calculating Personnel & Indirect costs

– Optional– Once accepted valid for all subsequent FP7 financial

statements submitted

N.B.: The submission of any certificate does not waive the right of the Commission to carry out its own audits (Article II.22 of the FP7 model grant agreement)

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FP7Reporting

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Reporting• Participant portal: for coordinator and beneficiaries

http://ec.europa.eu/research/participants/portal/appmanager/participants/portal

• Access all your projects– The role in the project is registered:

• Participant / coordinator • Coordinator to grant access to participants

• Unique platforms for all project reporting– SESAM: tool for submitting technical reports– FORCE: tool for submitting financial reports

• Security: ECAS – European Commission Authentication System – Need to be identified

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Reporting• Deliverables defined in Grant Agreement and its annexes

• Mandatory Reporting Forms annexed to the Grant Agreement

• Periodic report submission within 60 days after end period• Overview progress work• Explanation uses resources• Form C together with a summary financial report and certificate on

the financial statements if needed – Conversion rate (date incurred / first day)

• Final report within 60 days after end project• Final publishable summary• Report on societal implications• Report on the distribution of EC contribution 30 days after receipt

final payment

• All reports to be sent electronically through coordinator

• Original financial reports to be sent to the Commission

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Reporting

• Commission has 105 days to analyse the reports

• Commission may:– Approve reports and deliverables– Reject reports and deliverables– Suspend the delay for approval: additional info,

correction,…

• No tacit approval of reports

• Automatic payment of interest in case of late payment (except for public bodies member states)

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FP7External Audit and Sanctions

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External Audit

• FP7 larger autonomy (no CFS) … BUT

‘at any time during the development of the project and up to 5 years after the end of the project, EC may arrange for audit to be carried out by external services or EC services themselves’

• Purpose of the audit• For the Commission to obtain assurance that it

is not overcharged• Declared Cost is backed by genuine expenditure• All claimed expenditure is recorded in the

accounts

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External Audit

EC policy increased number of audits on the spot

– Commission staff or outsourced

– Periodic Audit batch by sampling

– Audit on request by EC officer (PO/FO) if

• lack of cooperation and/or transparency

• doubt on costs declared

– Possibility of extension of audit results to all GA with the same beneficiary (extrapolation)

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Sanctions• Recovery procedures (possible offset by EC

(centrally) on other projects from the same beneficiary)

• Liquidated damages (if costs overstatement) – strictly applied

– unjustified Community financial contribution x (overstated amount/total Community financial contribution claimed)

• Financial penalties (if false declarations)

Between 2% and 10% of the EC contribution

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Thank you for your attention

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Information

• Find a document http://cordis.europa.eu/fp7/find-doc_en.html

• FP7 Enqueries Service

http://ec.europa.eu/research/enquiries

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