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Erasmus+ Capacity Building projects in the field of Higher Education Call 2018 FINANCIAL MANAGEMENT OF THE GRANT Grant Holders' Meeting Brussels, 28-29 January 2019 REGULATORY FRAMEWORK EACEA Documents Application Your documents

National legislation & Institutional regulation Any prior authorisation from EACEA 2 OUTLINE 1) 2) 3) 4) 5) 6) 7)

Financing principles Actual costs Unit costs Management of the Grant and amendments Financial reporting Final grant Checks & Audits NB: Please note that this document has no legal value 3 BUDGET MODEL (ANNEX III OF GRANT AGREEMENT) 4 1) FINANCING PRINCIPLES Funding rule & Financing approach Budget headings and ceilings

Eligible / Ineligible costs 5 FUNDING RULE & FINANCING APPROACH Co-funding principle Grant Total costs of the project Grant (combination of two different financing approaches) AC: Actual costs (Equipment, Subcontracting and Exceptional costs) UC: Unit Costs (Staff, Travel and Costs of stay) 6

BUDGET HEADINGS AND CEILINGS Staffcosts (UC) Max 40% of grant (Art I.3 of GA) Travel costs (UC) no ceiling Costs of stay (UC) no ceiling Equipment Max 30% of grant (Art I.3 of GA)

(AC) Sub-contracting (AC) Max 10% of grant (Art I.3 of GA) Exceptional (travel) costs (AC) no ceiling 7 ELIGIBLE COSTS Article II.19.1 Grant Agreement Incurred by the beneficiaries during the eligibility period Foreseen in the application/budget In connection with action/necessary for project implementation

Identifiable, verifiable, recorded in the accounting records Comply with requirements of tax/national legislation Reasonable, complying with sound financial management (economy and efficiency) 8 INELIGIBLE COSTS 1) Costs NOT fulfilling requirements of Art. II.19.1 2) Art. I.10.4/II.19.4 examples: equipment such as: furniture, motor vehicles, alarm systems costs linked to the purchase of real estate activities not in project beneficiaries' countries (Annex IV), unless prior authorisation Exchange losses in kind contribution excessive expenditure deductible VAT

9 AFFILIATED ENTITIES OF A BENEFICIARY Organisations that have a legal or capital link with a beneficiary and that contribute to the achievement of project objectives and activities under the responsibility of the beneficiary concerned. Must be identified in the Grant Agreement in order to have their costs reported under the project budget Example: Organisation X, with headquarters in Madrid, is part of a network of 20 institutions. Staff members from one of the network institutions may work for the project and claim eligible costs as long as this institution is included as an affiliated entity in the G.A.

10 QUIZ WHEN DECLARING CO-FINANCING AT FINAL REPORT STAGE, IS THERE A MINIMUM AMOUNT/PERCENTAGE TO DECLARE? a. No b. Yes, an amount representing minimum 10% of the costs declared c. Yes, an amount representing minimum 10% of the costs declared, but only for unit costs 11 QUIZ MY UNIVERSITY COOPERATION AND RESEARCH GRANTS ARE MANAGED THROUGH ITS OWN FOUNDATION. CAN THE COSTS DECLARED BY THE FOUNDATION BE CONSIDERED ELIGIBLE? a. No, because the Foundation is not a Beneficiary. b. Yes, because the Foundation acts on behalf of my university which is a

Beneficiary. c. Only if the Foundation is included in the grant Agreement as Beneficiary or as Affiliated entity of a Beneficiary. 12 2) ACTUAL COSTS Definition VAT Exchange rate

Tendering procedure Equipment Subcontracting Exceptional (travel) costs (described under the "unit costs" section) 13 ACTUAL COSTS - DEFINITION Expenses actually incurred (Documented and justified with corresponding level of cost) Example: Reported cost (laptops) of 1.500 EUR = Supporting documents to the value of 1.500 EUR 14

VAT (ART. II.19.4 GA) Ineligible Unless official document from competent authorities proving that the corresponding costs cannot be recovered Check with NEO/EU Delegation if an agreement exists between EU and Partner Country 15 2 EXCHANGE RATE (ART. I.10.2 GA) Which exchange rate should be applied? 1) From start of eligibility period until receipt of second pre-financing:

monthly rate of reception of FIRST PRE-FINANCING 2) From date of receipt of second pre-financing until end of eligibility period: monthly rate of reception of SECOND PRE-FINANCING Rate to apply: http://ec.europa.eu/budget/contracts_grants/info_contracts/inforeuro/index_en.cfm EXAMPLE 1st Pre-financing: 23 Dec 2018 2nd Pre-financing: 22 Aug 2019 Invoice date: 09 January 2019 Applicable monthly rate: December 2018 All transactions must be declared in EUR in the Final Report 16 PROCUREMENT OF GOODS/SERVICES Less than 25.000

Best value for money 25.000 - 134.000 Tendering procedure More than 134.000 National Legislation 17 EQUIPMENT Relevant to the objectives of the project and foreseen in the application

Total purchase cost (no depreciation) Exclusively for Partner Country Higher Education Institutions Recorded in the inventory of the institution Labelled with E+ stickers (to be printed by beneficiaries) https://eacea.ec.europa.eu/about-eacea/visual-identity-and-logos-eacea/erasmus-visual-identity-and-logos_en Purchased and installed as soon as possible in order to be used during project implementation Equipment not foreseen in the application? (Serious) Delays in the purchase/instalment? Prior authorisation From the Agency ! 18

SUBCONTRACTING Implementation of specific tasks, by third party, to which a contract is awarded by one/several beneficiaries Examples: Evaluation activities/auditing IT courses, Language courses Printing, publishing and dissemination activities Translation services Web design and maintenance Not foreseen in the application? Prior authorisation from Agency Tasks that cannot be performed by Beneficiaries NO project-management related tasks

19 Equipment Subcontracting Invoice(s) and proofs of payment > EUR 25.000 < EUR 134.000: tendering procedure and three quotations from different suppliers EUR 134.000: procedure according to national legislation Registration in the inventory Invoice(s), subcontracts and proofs of payment > EUR 25.000 < EUR 134.000: tendering procedure and three quotations from different suppliers

EUR 134.000: procedure according to national legislation Travel activities of subcontracted service provider: copies of travel tickets, boarding passes, invoices and receipts To keep with project accounts SUPPORTING DOCUMENTS To send with Final Financial statement: >EUR 25.000: invoices, (subcontracts for subcontracting), competitive offers Any prior authorisation from the Agency 20 1) DO I HAVE TO LAUNCH A TENDERING PROCEDURE FOR A CONTRACT VALUE OF 23,000 EUR? a. No, even if my institution requires to do it

b. Yes, but the Agency should be informed c. No, unless my institution and/or the national legislation requires to do it 2) CAN A PARTNER PURCHASE EQUIPMENT FOR ANOTHER ELIGIBLE PARTNER? a. Yes, only if the project partner is a private HEI b. No, unless this was specified in the application c. Yes, if the cost effectiveness can be demonstrated and the equipment is delivered and recorded in the inventory of the partner country HEI. 21 3) WHICH SUPPORTING DOCUMENT DO I NEED TO KEEP TO JUSTIFY THAT AN INSTITUTION CANNOT RECOVER VAT? a. A declaration signed by the legal representative of institution b. An official document from the competent

authorities c. A certificate from the financial department of the institution the 22 3) UNIT COSTS Definition Staff costs Travel costs and costs of stay 23 UNIT COST - DEFINITION Fixed contribution multiplied by number of units,

based on "Triggering events" (activities/outputs) No need to justify level of spending Financial control/audit declared unit costs supported with proofs of activities implemented 24 Partnership Agreement

Grant management cycle UNIT COST ACTUAL COSTS Grant allocation Based on estimated work programme Based on the estimated budget Grant Implementation

Justification of the Grant Beneficiary's own FINANCIAL "RECIPE" Record costs actually incurred Based on activities actually implemented Based on costs actually incurred 1) IF WE HAVE ESTIMATED 20 WORKING DAYS IN THE

APPLICATION FOR PRODUCING THE QA STRATEGY, WHICH IS THE WRONG STATEMENT? a. We will be granted 20 days at the final report stage if we can produce the expected supporting documents and a QA strategy b. We can declare a different nr. days in the final report c. The actual nr. of days granted will be decided on the basis of the actual outputs (QA strategy) and other supporting docs. and will never be more than the nr. of days declared 26 2) THE ACTUAL COSTS FOR TRAVEL "X" ARE 30% HIGHER THAN THE VALUE OF THE UC a. The EACEA should be informed so as to authorise a higher grant contribution b. You can increase the UC value by 30% and justify it in your final report

c. You have to balance this loss with savings made under other activities funded by UC and/or with co-funding provided by the partnership 27 STAFF COSTS Contribution to Institutions for Staff* performing tasks necessary to achieve the objectives of the project Unit cost = amount in Euro per working day per staff (not linked to the actual level of remuneration in the salary slip) Calculation 3 variables: staff category, country, number of days a) Categories: Managers, Researchers/Teachers/Trainers, Technical, Administrative

nature of work performed, not status of individual b) Country in which staff is employed, independently of where tasks are executed c) Number of days proportioned to the work carried out *Formal contractual relationship with a beneficiary organisation 28 STAFF COSTS Example A staff employed in Lithuania performing teaching activity for 3 days: 222 Euro (3 unit costs of 74 Euro each) One working day according to national legislation (7 to 8 hours) In principle max. 20 days/month or 240 days/year 29

SUPPORTING DOCUMENTS To keep with project accounts: Staff Costs Joint Declaration (EACEA template) Time-sheets (EACEA template) Proof of formal contractual relationship Evidence justifying workload and activities/outputs (e.g. attendance lists , tangible outputs / products) To send with Final Financial statement: Any prior authorisation from the Agency

30 TRAVEL COSTS AND COSTS OF STAY Travel/stay for staff/students participating in eligible activities related to the achievement of the project Calculation: 3 variables travel distance (travel costs), duration (costs of stay) and type of participant Staff Under contract with beneficiary Travels intended for the activities listed in the E+ Programme Guide Duration: Max. 3 months

Students Registered under beneficiary institutions Duration: Min. 2 weeks Max. 3 months (Max. 1 week for short term activities linked to the management of the project) 31 Eligible activities Erasmus+ Programme Guide (CBHE section) TRAVEL COSTS: RULES From home institution to venue of activity (project beneficiaries' countries) and return Travel distance calculator (one-way travel): http://ec.europa.eu/programmes/erasmus-plus/tools/distance_en.htm Calculation

unit cost corresponding to applicable distance band 7 distance bands (see Erasmus+ Programme Guide - CBHE section) 32 TRAVEL COSTS: RULES EXAMPLES CASE 1 Participant from Madrid (ES) takes part in activity in Rome (IT) Madrid - Rome (1365 Km): unit cost (distance band 500/1999 Km): 275 CASE 2 Participant from Madrid takes part in activities first in Rome and

then in Kiev (circular travel)* Madrid - Rome (1365 Km): + Rome Kiev (1680 Km): unit cost (distance band 500/1999 Km): 275 unit cost (distance band 500/1999 Km): 275 = 550 33 EXCEPTIONAL COSTS (financed under actual costs) EXPENSIVE TRAVEL COSTS OF PARTICIPANTS If for a specific travel, the UC contribution represents less than 65% of the actual/real travel costs, financial support under the budget heading "exceptional costs" can be claimed. This financial support is limited to a maximum of 80% of the actual/real costs

Example: 13-17 Feb 2019 Almaty (Kz) Plovdiv (BG) Distance in km (distance calculator) 4.197 Cost of flight: 1.321 Unit cost: 820 (less than 65% of actual cost of flight, which is 858,65) Exceptional cost (replacing unit cost) 1.056,80 (= 80% of the actual cost of flight) As all other budget headings, "Exceptional costs" can be increased without amendment by up to 10% as compared to the amount mentioned in the G.A. Any other circumstances (including where no Exceptional costs have been foreseen) will 34 require an amendment TRAVEL COSTS IN THE "UNIT COSTS" SYSTEM

4 meetings, 25 participants each, destination 2500 km =360 Methodology Balance EACEA Real costs applied within (UC-RC) Unit costs consortium Travel 1 360 210 ? Travel 2

360 420 ? Travel 3 360 700 ?

Travel 100 360 290 ? scenario 1 TOTAL 36.000

37.000 -1.000 scenario 2 TOTAL 36.000 35.000 +1.000 35 COSTS OF STAY: SPECIFIC RULES Staff/students activities outside city of their home institution Calculation:

number of days of activities (including travel) = Number of unit costs Unit costs for staff Staff 120 DAYS Up to 14th day unit costs for students 70 15th 60th 50 61st 3 months

15th 90th Staff: up to 14 day/between 15 and 60 day/between 61st day and up to 3 Students 40 55 months th th th 36 COST OF STAY: SPECIFIC RULES EXAMPLES A staff (Paris): activity in Brussels during 2 days (inc. travel)

Max. 2 unit costs of 120 (TOTAL: 240 ) A staff (Paris): activity in Brussels during 20 days (inc. travel) Max. 14 unit costs of 120 + 6 unit costs of 70 (TOTAL: 2.100 ) A student (Paris): activity in Berlin during 22 days (inc. travel) Max. 14 unit costs of 55 + 8 unit costs of 40 (TOTAL: 1.090 ) 37 SUPPORTING DOCUMENTS Individual Travel Report (EACEA templates) + Supporting documents Travel and Costs of Stay

(e.g. travel tickets, boarding passes, invoices, receipts, proof of attendance in meetings, agendas, tangible outputs/products, minutes)* *Non-exhaustive list Exceptional costs Proof of the actual cost of the travel To send with Final Financial statement: Any prior authorisation from the Agency 38 1) CAN A STUDENT RECEIVE STAFF COSTS? WHICH IS THE WRONG ANSWER? a. No, never b. Yes, provided that his/her contribution is in line with the scope of the project and necessary for its achievement

c. Yes, provided that the student signs an ad hoc agreement with the HEI against payment 2) A TECHNICAL STAFF HAS A USUAL REMUNERATION OF 60 EUR PER DAY. THE CORRESPONDING DAILY UNIT COST IS 55 EUR. HOW MUCH SHOULD THIS PERSON ACTUALLY RECEIVE UNDER THE PROJECT? a. 60 EUR b. any amount higher or equal to 55 EUR c. it is up to the project to decide 39 3) IF I TRAVEL FROM A TO B, AND FROM B TO C, AND BACK TO A, WHAT CAN I CHARGE TO THE PROJECT: a. UC for distance band from A to B + UC for distance band from B to C b. UC for distance band from A to B + UC for distance band

from B to C + UC for distance band from C to A c. UC for the sum of the distances from A to B + B to C 4) I TRAVEL TO BERLIN FROM FEB 5TH TO FEB 9TH AND I PARTICIPATE IN A 2 DAYS MEETING (6 AND 7). ON THE 8TH I TAKE ONE DAY OFF: a. I can charge a maximum of 2 days as costs of stay b. I can charge a maximum of 4 days as costs of stay c. I can charge a maximum of 5 days as costs of stay 40 4) MANAGEMENT OF THE GRANT AND AMENDMENTS 5) FINANCIAL REPORTING 6) CALCULATION OF THE FINAL GRANT 7) CHECKS & AUDITS(ART. II.27)

41 4) MANAGEMENT OF THE GRANT AND AMENDMENTS Grant paid on the bank account of the coordinator (Art I.5 of GA) Methods for distributing the grant/reimbursing the costs between coordinator and partners Detailed in PARTNERSHIP AGREEMENT: a) decision on HOW to reimburse costs (in particular UC) b) decision on WHERE to pay (/to whom) c) decision on WHEN to pay No ideal / unique / imposed method >>> specific situation of each partner should be taken into account Transfers amongst project beneficiaries >>> only to institutional

bank accounts 42 Art. II.12 of Grant Agreement No later than one month before the end of the project! 43 Request change of Done through. 44 Before Asking for an Amendment Principle: the application is the baseline for project implementation Estimate the impact of the proposed change on the project:

Compare this change/deviation with the initial work plan Make sure it stays within the scope of the project and complies with the programme's rules Who does it affect one partner/the whole partnership? Does it have an effect on the project budget? Does it have an effect on the project timeframe? Any risk that the project will not deliver the planned outputs? 45 Reflect on alternative solutions (fall-back plan) BUDGET TRANSFERS (between budget headings) Increase UP to 10% No prior authorization

Even above the ceilings (for staff, equipment and subcontracting) Increase by MORE than 10% Amendment Ceilings cannot be exceeded Staff costs % of total grant in G.A. Proposed increase

Effect on % of total grant Decision Max ceiling: 40% 30% +20% 36% Amendment possible

35% +20% 42% Not allowed 46 BUDGET TRANSFERS Example 1 = NO need for amendment 47 BUDGET TRANSFERS Example 2 amendment 48

CAN I INCREASE THE STAFF COSTS FOR A PROJECT PARTNER BY 15% WITHOUT REQUESTING AN AMENDMENT TO THE GA (IF THIS IS JUSTIFIED BY THE PROJECT ACTIVITIES)? a. Yes, as far as the budget heading "staff costs" at project level does not increase by > 10% (and that the partnership agrees) b. No, never c. Yes, only if the staff costs of the partner do not exceed 40% of the total budget of the partner 49 5) FINANCIAL MONITORING AND REPORTING

Financial statements (Excel) main financial reporting tool: Financial monitoring per budget heading/partner/WP during project implementation (for budget consumption) Statement on the use of the previous pre-financing for PR and request for second pre-financing Financial reporting at final report stage, supported by AUDIT CERTIFICATE (REPORT OF FACTUAL FINDINGS ON THE FINAL FINANCIAL REPORT - TYPE II) Financial Statements (".xls" format) available at: https://eacea.ec.europa.eu/erasmus-plus/beneficiaries-space_en 50 6) CALCULATION OF THE FINAL GRANT Grant will never exceed maximum amount indicated in Grant Agreement FINAL GRANT

1) Examination of: a. financial statements b. eligibility of activities implemented c. eligibility of declared expenses 2) Examination of potential penalties applied on maximum Grant 3) FINAL GRANT = LOWEST VALUE between maximum Grant reduced by penalty(ies) and result of examination 1 Positive value: BALANCE PAYMENT FINAL GRANT MINUS PRE-FINANCINGS Negative value: RECOVERY 51 A

B C Max. Grant (Anx III of GA): 850,000 HOW WILL THE FINAL GRANT AMOUNT BE DETERMINED? Declared grant spent (in FR): 700,000 Penalties ? Eligible grant (after EACEA grant/activities analysis): 650,000

(for poor performance or nonrespect of visibility obligations) FINAL GRANT Eligible grant = 650,000 NO Max grant reduced by penalty = 637,500 YES for "Poor performance" (Minus 25% of Max Grant = 637,500 ) Eligible grant = 650,000 YES for "Visibility obligations" (Minus 20% of Max Grant = 680,000 )

52 examples (1 of 2) 53 examples (2 of 2) 54 7) CHECKS & AUDITS (ART. II.27) EACEA/Commission may carry out technical/financial checks and audits in relation to the use of the grant During implementation of Agreement and for a period of 5 years starting from the date of payment of the balance/recovery order

Usually outsourced to external auditors At premises of coordinator and/or partners 55 FINAL MESSAGES Transparency/Partnership Agreement Regular monitoring/reporting Minimum 60% of Unit costs a lot of flexibility consider the specific needs/means of your partners In case of doubtsASK! 56 QUESTION NOT ANSWERED?

Please contact the E+CBHE team EACEA-EPLUS-CBHE-PROJECT [email protected] Don't forget to mention your project number! 57

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