VITAL KICK-OFF MEETING

Financial aspects

7th – 8th April 2008

Veterinary Research Institute

Brno, Czech Republic

FP7 and FP6 differences

Cost models abolished – new costing structure for FP7

All participants contribute to a Guarantee fund FP7 simplification

FP7 cost options Higher rates of reimbursement Changes to pre-financing, reporting and audits

No cost models in FP7

Usual method is reimbursement of eligible costs Three choices of method

Proportion of all eligible direct and indirect costs – available to all – no fixed overhead limit

Proportion of all eligible direct costs, using a simplified indirect cost rate – available if unable to calculate project level indirect costs – calculation at level of legal entity, must be certified independently and accepted by Commission

Proportion of all eligible direct costs, with a flat rate for indirect costs – available to all (at 20%) although flat rate higher for universities, public bodies, SMEs (60%)

Reimbursement of Eligible Costs

Costs are eligible if: Actual

Incurred during the project

Determined according to normal accounting and management principles

Used solely for project objectives

Consistent with principles of economy, efficiency and effectiveness

Recorded in the accounts

Exclusive of non-eligible costs

Average personnel costs may be used if usual practice and if certified by independent auditors and approved by the Commission

Reporting

In Vital three reports due at month 12, 24 and 36 At each reporting period need to produce Activity report - scientific Management report including delivery by workpackage/

person months and details of financial expenditure by expense category

Financial report (Form C)

Audits

‘Certificates on the Financial Statements’ only required for Community contributions over threshold €375,000

Maximum one certificate for projects of two years or less

Certificates of methodology

Certificate of Financial Statements

Certificate on the Methodology

Scope Overhead Average personnel costs

Compulsory No Yes

Request by partner to EC

Yes No

Produced by auditor

Yes Yes

FP7 Payments

Based on Reporting periods Pre-Financing

160% of periodic average Receive within 45 days of contract signature BUT 5% of total budget retained by Commission in

guarantee fund and in accordance with consortium agreement 20% retained by CSL until reports submitted

Interim payments at months 12 and 24 up to maximum of 90% of project budget

Final payment on completion and acceptance of reports by Commission

Audit requirements

Need to keep timesheets authorised by project manager

Keep all invoices / documentation of expenditure and claim according to your normal accounting procedures

Be prepared to keep good financial records and be able to justify each claim

Can be audited up to 5 years after the end of the project