DG Research - Directorate B - Unit 03: “Research Infrastructures” Brussels, 12th of November...

DG Research - Directorate B - Unit 03: “Research Infrastructures”Brussels, 12th of November 2004 - NOT LEGALLY BINDING - Page n°1

Presentation made by Bertrand MICHAUD – Unit B-04

Research Infrastructures – Financial aspects

Financial Aspects of Research Infrastructures instruments




1- Payment modalities of the EC contribution

A first prefinancing equal to 80% of the estimated Community financial contribution for the first reporting period (P1) and the first six months of the second reporting period, within 45 calendar days following the date of entry into force of the contract. [Art. 8.2.(a)]

Example:

=> First prefinancing equal to: 80% x (830.000 +290.000) = € 896.000





Within 45 calendar days following the approval by the Commission of the requested periodic reports and no later than 90 calendar days following the receipt of the complete requested periodic reports:

if audit certificate:• a payment settles the amounts justified and accepted for the relevant reporting period (example: P1);• an intermediary prefinancing equal to a maximum of 80% of the estimated Community financial contribution for the subsequent reporting period (example: P2) and the first six months of the reporting period following (example: P3), within the limit of 80% of the difference between the maximum Community financial contribution and the payment(s) accepted.





Within 45 calendar days following the approval by the Commission of the requested periodic reports and no later than 90 calendar days following the receipt of the complete requested periodic reports:

if no audit certificate:• an intermediary prefinancing equal to a maximum of 80% of the estimated Community financial contribution for the subsequent reporting period (example: P2) and the first six months of the reporting period following (example: P3):

within the limit of 80% of the difference between the maximum Community financial contribution and the payment(s) accepted. and if at least 70% of the initial prefinancing has been consumed





Example related to the impact of audit certificate

Hypothesis

The periodic justified and accepted eligible costs are considered as equal to the estimated Community financial contribution per reporting period.





Example related to the impact of audit certificate

Case n°1

Case n°2Difference: €157.000





PREFINANCING CALCULATION METHOD USED IN EXAMPLE 2 prefinancings paid: The 1st: 896.000€ = (80% x [830.000+290.000]) The 2nd: (80% x [785.000+315.000]) - (896.000-830.000) = 814.000€ ie a total prefinancing equal to 1.710.000€ A part of this prefinancing is already requalified as payment: 830.000€ The balance of prefinancing actually available for the consortium is equal to 880.000€. Here comes the justification of the second reporting period and the third prefinancing. According to the hypothesis the accepted costs lead to a financial contribution from the Community amounting to 785 000 €. Consequently, with or without an audit certificate, the prefinancing actually at the disposal of the Consortium in cash decrease from 880.000€ to 95.000€.





The third prefinancing will therefore be:

If there is an audit certificate: (80% x 785.000) - (880.000-785.000) = 533.000 € (80% x P3+6months) – (remaining available prefinancing after P2) within the limit of [80% x (2.400.000 - 830.000 - 785.000)] - 95.000 = 533.000 € within the limit of [80% x (EU financial contribution – accepted costs P1 - accepted costs P2) - remaining contractual prefinancing after P2 ie 533.000€

If there is NO audit certificate: (80% x 785.000) - (880.000-785.000) = 533.000 € (80% x P3+6months) – (remaining available prefinancing after P2) within the limit of [80% x (2.400.000 - 830.000)] - 880.000 = 376.000€ within the limit of [80% x (EU financial contribution – accepted costs P1) - remaining contractual prefinancing after P2 ie 376.000 €




2- VAT issue

[Art. II.19.2.(a)]: The following non eligible costs may not be charged to the project:a) any identifiable indirect taxes, including VAT or duties;

Uneligibility of VAT has been confirmed by legal service of DG RTD for recoverable and irrecoverable VAT.

This is compliant with the principle of cost shared projects.




3- Audit certificates

- Language of the audit certificate: Financial Guidelines page 98An audit certificate should be delivered in one of the official languages of theEuropean Union. The external auditor must attach a certified translation in oneof these languages, preferably in English, where an audit certificate is notprovided in one of these languages.

- Audit certificates must be specific to the contract and the period concerned:No audit certificate regarding the financial statements of a contractor can be considered as acceptable

- Audit certificates provided by an external auditor with the possibility for public bodies to opt for a competent public officerExternal Auditor: 1)independant from the contractor

2)qualified to carry out statutory audits of accounting documents (8th directive 84/253/EEC of 10/04/84)

Competent Public Officer: relevant national authorities have established the legal capacity of that competent public officer to audit that public body.




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