fp6 contract and financial reporting
TRANSCRIPT
FP6 Contract and Financial Reporting
The Basics for EC Consortia
Linda PolikResearch Services
Linda Polik, Research Services1 July 2006
Overview of Presentation
1) Contractual Issues
2) Financial Issues
3) Reporting & Deliverables
4) Consortium Agreement
Linda Polik, Research Services1 July 2006
Contractual Issues - Project Duration
Start date of project - fixed start date of 1 May 2006 for a duration of 36 months (costs can be incurred only during the lifetime of the project)Extension of project duration without increase in budget is unproblematic but requires a contract amendmentContract terminates upon last payment by Commission or earlier according to provisions of contract
Linda Polik, Research Services1 July 2006
The Model Contract
CORE CONTRACT• Scope• Consortium• Start Date• Duration• Payment
Modalities• Reporting• Payment• Special clauses• Communication• Law• Signatures
ANNEX ITechnical annex
• Objectives• Milestones• Tasks• Role of
participants• Deliverables
ANNEX IIGeneral Conditions• Definitions• Implementation
and deliverables• Termination and
responsibility• In-/Eligibility of
Costs• Audits• Cost statements • Intellectual
property rights
ANNEX IIISpecific
ProvisionsDepending on
the project type
Standard terms and conditions for all projects
Special Clauses
Depending on the project type
Unique to each project
Unique to each project Standard terms
and conditions for all projects
Linda Polik, Research Services1 July 2006
Responsibilities of the Coordinator
Sole contact between all contractors and CommissionAdministration & financial aspects ─ scientific coordination ─ editing of publications & reports─ general supervision─ receive and disburse funds to partners─ inform Commission of budget transfers─ report use of financial resources
Submission of reports and cost statementsKeep overall, management-level project accounts
Linda Polik, Research Services1 July 2006
Responsibilities of Contractors
Carry out and monitor research Name the person in control, and advise of changes, events of force majeure, non-delivery, any problemsProvision of required information (e.g. cost statements, justification of costs, audit certificates, scientific progress reports)Participation in relevant meetingsAvoidance and advice of incompatible commitmentsAdhere to fundamental ethical principles, local health & safety regulations, have their own insurance cover, comply with national laws
Linda Polik, Research Services1 July 2006
Responsibilities of Contractors
Signatory to the contractJoint and several liability to Commission for carrying out the project Full rights to own results they generate and to use all project results for internal research purposesObligation to protect and use results (including publication and dissemination)Full rights of access for commercial use on favourable conditions (terms & conditions detailed in Consortium Agreement and Database Licence)
Linda Polik, Research Services1 July 2006
Financial Issues – Cost Models
Additional cost (AC) - for participants unable to identify indirect costs at project level= Reimbursement is 100% of additional costs with a flat-rate overhead of 20% of all direct costsFull cost (FC) – for participants who can identify indirect costs at project level= EC contribution is 50% of total project costs (this includes the organisation’s full overhead rate)Full direct costs with fixed overhead rate (FCF) ─ EC pays 50% of all direct costs – Overheads
determined as flat rate of 20% of all direct costs
Linda Polik, Research Services1 July 2006
Costs – Definitions
Direct costs─ Costs that can be directly associated with the work being done
Additional direct costs─ Those that are in addition to normal recurring costs and not covered by
any other funding
Indirect costs (overheads)─ Those costs that cannot be directly attributed to the work, but are related
to it─ In FC: ‘actual’ indirect cost (capable of verification)─ AC and FCF: 20% contribution to indirect costs
Eligible costs─ Costs which are actual, economic and necessary
Linda Polik, Research Services1 July 2006
Eligible costs
No pre-defined cost categories – no pre-defined eligible costs
Incurred during the project’s lifetime
Determined according to each organisation’s usual accounting principles
Recorded in each organisations’ accounts
Not subject to taxes, VAT, interest etc. – you have to strip all identifiable taxes from account
Linda Polik, Research Services1 July 2006
Problematic Direct Costs
Common office equipment: computers, laptops and software
Cost of laboratory space and related expenses
Postage, telephone charges, photocopying
General administration and management
Miscellaneous recurring consumables
Airport tax, VAT
Linda Polik, Research Services1 July 2006
Non-Eligible Costs
Any identifiable indirect taxes, including VAT or dutiesInterest owedProvisions for possible future losses or chargesExchange rate lossesCosts declared, incurred or reimbursed in respect of another Community projectCost of return on capitalDebt and debt service chargesExcessive or reckless expenditureAny cost which does not meet the definition of eligible costsCurrent costs, notional costs, opportunity costs
Linda Polik, Research Services1 July 2006
Charging Salary Costs to the Project
Not an issue for FC partners but for AC
Issue is NOT permanence but source
Where does salary come from (i.e. government)?
What proportion of salary is already being paid?
Does contract demand external funding?
What happens if funding runs out?
Linda Polik, Research Services1 July 2006
Charging Costs to the Project
Any cost specific to the projectStaff costs can be charged for AC participants if:
─ personnel with a temporary contract for working under the Community contract concerned
─ personnel with a temporary contract with a view to completing a doctorate
─ personnel whose employment contract depends wholly or in part on additional external financing. Only costs not covered by normal recurring financing (government core funding) are eligible.
─ personnel have option to work additional hours (overtime)
Linda Polik, Research Services1 July 2006
Cost Reporting
Not reported as specific items such as consumables, equipment, personnel, travel etc.
Reported according to activity: research, demonstration, management, training
Will have to be in position to report costs by activity
Justification of costs in management report in relation to science / work carried out
Linda Polik, Research Services1 July 2006
FP6 Financial Guidelines
“Final” updateable version of March 2005Payment modalities according to types of grantCosts and cost modelsPaymentsControlsRecoveries and sanctionsExamples, cost statement forms …Find all necessary documents at:
http://www.cordis.lu/fp6/find-doc.htm(includes Financial Statements forms in Excel format, Reporting Guidelines, Financial Guidelines, templates)
Linda Polik, Research Services1 July 2006
Payment and Reporting – STREP (3 yrs)
0 6 12 18 24 30 36
Detailed work plan
Start of the project
Initial advance payment
Mid-term assessment
Reported costs Second advance payment
Periodic activity report
Second reporting
period Reported costs
Periodic activity report
Final reporting
period
Reported costs
Final report
Audit
Audit
Third advance payment
First reporting
period
Mid-term report
Linda Polik, Research Services1 July 2006
Periodic Reports
All due within 45 days of end of reporting periodPeriodic Activity Reports (usually annual) and final report as defined in Art. 6 and 7 of EC contractInterim Activity Reports may be required if mentioned in the Technical AnnexPeriodic Management Report including financial statements (form C) from all partners and consolidated financial summary for consortium in EuroAudit Certificates as often as required by Art. 7 of the EC contract (annually for IPs and NOEs) Periodic Funding Distribution ReportsUpdate of Project Fact Sheet
Linda Polik, Research Services1 July 2006
Activity Report
Overview of activities carried out by the consortium during the period
Description of progress towards project objectives
Description of progress towards milestones/deliverables
Problems encountered and corrective action taken
Updated plan for using and disseminating knowledge
(Tacit approval if no response after 90 days)
Linda Polik, Research Services1 July 2006
Management Report
Justification of resources deployed by each contractor─ linked to activities─ necessity justified─ AC global estimate of all resources used (incl. person months of
permanent staff)Form C ─ financial statement per activity─ one to be provided by each contractor
Audit certificate─ one to be provided by each contractor
Summary periodic financial report─ consolidating claimed costs─ based on information in Form C
Linda Polik, Research Services1 July 2006
Final Report
All due within 45 days after end of projectPublishable Final Activity Report covering the main aspects of work, objectives, results, conclusionsFinal Management Report for the full duration of the project consolidating the claimed costs of all contractorsAudit Certificates from all contractorsFinal Funding Distribution Report consolidating the funding distributed to each contractor over the full duration of the projectFinal Report on Gender Action Plan (IPs and NOEs only)
Linda Polik, Research Services1 July 2006
Reporting Guidance Notes
• You can download the Reporting Guidance Notes from the web at:http://www.cordis.lu/fp6/find-doc.htm#reporting
• Project Reporting Guidance Notes contain─ Templates─ Form C per type of project─ Funding distribution table─ Questionnaires on horizontal issues
Linda Polik, Research Services1 July 2006
Deliverables
Reports (contractual, policy statements, guidelines, handbooks, draft standards, procedures, strategies)Prototypes (technical, commercial)Data (Statistics, databases, trends)Software (Algorithm, code, database, system)IPR (Patent, trade mark, copyright)Educational material (lectures, courses, modules, CDs)Meetings (workshops, seminars, conferences, summer schools)Media (Web site, CD ROM, Video)Publications (journal, newsletter, book, conference paper)
Linda Polik, Research Services1 July 2006
Time Sheets (or equivalent)
Can only claim for hours worked
Also useful for equipment
NOT only for time spent on the project
Certified by senior staff
Kept by ALL staff working on the project
For those staff NOT charged, indicates shared cost element
Linda Polik, Research Services1 July 2006
Model Cost Statement (Form C)
Commission models according to instrumentBasic project identification information
1. Declaration of resources (made available by 3rd parties)2. Eligible costs by activity (Research, Demonstration, Training,
Management, Other)3. Declaration of receipts by activity (income from other sources)4. Declaration of interest on pre-financing5. Requested EC Contribution (total for period)6. Audit certificates information7. Conversion rates used (per partner)8. Contractor’s certification
Linda Polik, Research Services1 July 2006
The Audit Certificate
To give the Commission ‘reasonable assurance’ that costs claimed conform with the legal and financial provisions
Determined according to cost model (AC / FC)Costs claimed fulfil the ‘eligible cost’ definitionReceiptsInterest from pre-financingExchange rateProject management toolCost reimbursed 100% - but no VATOne certificate per contractorLayout according to Commission template
Linda Polik, Research Services1 July 2006
Commission Audit
As well as spot checks, the Commission can audit:For contractors and sub-contractorsScientific aspectsTechnological aspectsEthical aspectsFinancial aspectsAny other aspect─ financial accounting or management principles
Keep all documentation up to 5 years after the end of project!
Linda Polik, Research Services1 July 2006
Consortium Agreement
Specifying terms in model contractAll members of consortium (but not the Commission)Subject to EC contract and Rules of ParticipationDefines management structure, responsibilities of Coordinator and partners, and decision-making procedures in the various bodies of the consortiumDetails Payment modalitiesDetails of IPR ownership, use and accessIdentification of pre-existing know-howRecuperation of advance payments
Linda Polik, Research Services1 July 2006
Consortium Agreement
Liabilities and compensationConfidentiality Rules for publicationsProposed action where defaulting contractorConfidentiality agreement (non-disclosure)Defaults and remedies / sanctionsSettlement of disputesAnnexes (e.g. Database Licence)Any amendments require written approval of all partners
Linda Polik, Research Services1 July 2006
Summary of FP6 IPR conditions
Access rights to pre-existing know-how (PEKH)
Access rights to knowledge resulting from the project
If needed by participant to carry out his own work under the projectFor carrying out the project Royalty-free unless otherwise
agreed before signing the contractRoyalty-free
If needed by participant to use his own knowledgeFor use purposes
(exploitation and further research)
On non-discriminatory and reasonable market conditions to be
agreed
Royalty-free unless otherwise agreed before signing the contract
Best practice: royalty-free access for further research but favourable conditions for commercial use
Possibility for participants to agree on exclusion of specific pre-existing know-how of a participant from this obligation
Linda Polik, Research Services1 July 2006
Intellectual Property Rights
Access Rights on a non-exclusive basisAccess Rights do not include rights to sub-licenseAccess Rights may be requested up to 2 years after end of project if needed to Use own KnowledgeIf Knowledge is not “Used” then disseminationOwnership belongs to those who did the workJoint ownership subject to separate agreements
Linda Polik, Research Services1 July 2006
Database Licence
Database is owned by CoordinatorEach partner owns the copyright in its own dataAll partners cross-license data to each other for academic purposes (teaching and research)Any commercial use of data requires consent of Coordinator, and is subject to a separate agreement specifying the termsAll publications of data have to acknowledge ownership / copyright of the EUREQUAL consortium