EUROPEAN COMMISSION Budget Central Financial Service Financial regulations

REVIEW OF THE FINANCIAL REGULATION PUBLIC CONSULTATION

MONDAY 19 OCTOBER – FRIDAY 18 DECEMBER 2009

Compilation of contributions received from 'Citizens'

EUROPÄISCHE KOMMISSION Haushalt Zentraler Finanzdienst Finanzregelungen

ÜBERPRÜFUNG DER HAUSHALTSORDNUNG ÖFFENTLICHE KONSULTATION

MONTAG 19. OKTOBER – FREITAG 18. DEZEMBER 2009

Zusammenstellung der von 'Bürger' erhaltenen Beiträge

COMMISSION EUROPÉENNE Budget Service Financier Central Règlements Financiers

REEXAMEN DU REGLEMENT FINANCIER CONSULTATION PUBLIQUE

LUNDI 19 OCTOBRE – VENDREDI 18 DECEMBRE 2009

Compilation des contributions reçues des 'Citoyens'

Page C001 - 19.10.2009 UK .................................................................................................................................. 4 C002 - 19.10.2009 DE................................................................................................................................... 6 C003 - 25.10.2009 NL ................................................................................................................................... 8 C004 - 29.10.2009 DE................................................................................................................................. 10 C005 - 30.10.2009 NL ................................................................................................................................. 12 C006 - 30.10.2009 ES ................................................................................................................................. 14 C007 - 16.11.2009 BG................................................................................................................................. 16 C008 - 30.11.2009 NL ................................................................................................................................. 19 C009 - 07.12.2009 UK ................................................................................................................................ 25 C010 - 07.12.2009 IS................................................................................................................................... 27 C011 - 08.12.2009 BE, DE, IE (x2), FR, NL (x12), IT (x36), HU, RO (x5), FI(x16), SE, UK (x13), SQ .. 29 C012 - 08.12.2009 BG................................................................................................................................. 31 C013 - 09.12.2009 FI .................................................................................................................................. 36 C014 - 10.12.2009 UK ................................................................................................................................ 38 C015 - 10.12.2009 DE................................................................................................................................. 41 C016 - 11.12.2009 IT .................................................................................................................................. 43 C017 - 11.12.2009 IT .................................................................................................................................. 45 C018 - 11.12.2009 DE................................................................................................................................. 47 C019 - 14.12.2009 UK ................................................................................................................................ 50 C020 - 14.12.2009 FR ................................................................................................................................. 52 C021 - 14.12.2009 UK ................................................................................................................................ 54 C022 - 14.12.2009 UK ................................................................................................................................ 60 C023 - 15.12.2009 DE................................................................................................................................. 62 C024 - 15.12.2009 FI .................................................................................................................................. 65 C025 - 15.12.2009 LU................................................................................................................................. 67 C026 - 16.12.2009 IT .................................................................................................................................. 69 C027 - 16.12.2009 DE................................................................................................................................. 75 C028 - 16.12.2009 BE ................................................................................................................................. 77 C029 - 16.12.2009 IT .................................................................................................................................. 81 C030 - 17.12.2009 SE ................................................................................................................................. 83 C031 - 18.12.2009 IT .................................................................................................................................. 85 C032 - 18.12.2009 FI .................................................................................................................................. 87 C033 - 17.12.2009 HU ................................................................................................................................ 91 C034 - 17.12.2009 HU ................................................................................................................................ 93 C035 - 17.12.2009 HU ................................................................................................................................ 95 C036 - 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C049 - 17.12.2009 DE............................................................................................................................... 124 C050 - 17.12.2009 HU .............................................................................................................................. 133 C051 - 17.12.2009 HU .............................................................................................................................. 135 C052 - 17.12.2009 HU .............................................................................................................................. 137 C053 - 17.12.2009 HU .............................................................................................................................. 139 C054 - 17.12.2009 DE............................................................................................................................... 141 C056 - 17.12.2009 DE............................................................................................................................... 143 C055 - 17.12.2009 DE............................................................................................................................... 151 C057 - 18.12.2009 DE............................................................................................................................... 153 C058 - 18.12.2009 UK .............................................................................................................................. 157 C059 - 18.12.2009 DK .............................................................................................................................. 163 C060 - 18.12.2009 NL ............................................................................................................................... 166 C061 - 18.12.2009 DE............................................................................................................................... 169 C062 - 18.12.2009 DE............................................................................................................................... 178 C063 - 18.12.2009 DE............................................................................................................................... 180 C064 - 18.12.2009 UK .............................................................................................................................. 183 C065 - 18.12.2009 BE ............................................................................................................................... 186 C066 - 18.12.2009 BE ............................................................................................................................... 192 C067 - 18.12.2009 NO .............................................................................................................................. 199 C068 - 18.12.2009 UK .............................................................................................................................. 202 C069 - 18.12.2009 IT ................................................................................................................................ 205 C070 - 18.12.2009 HU .............................................................................................................................. 208 C071 - 18.12.2009 UK .............................................................................................................................. 210 C072 - 18.12.2009 DE............................................................................................................................... 216 C073 - 18.12.2009 UK .............................................................................................................................. 218 C074 - 18.12.2009 BE ............................................................................................................................... 225 C075 - 18.12.2009 PT ............................................................................................................................... 228 C076 - 18.12.2009 PL ............................................................................................................................... 234 C077 - 18.12.2009 UK .............................................................................................................................. 238 C078 - 18.12.2009 RO............................................................................................................................... 251 C079 - 18.12.2009 UK .............................................................................................................................. 253 C080 - 18.12.2009 UK .............................................................................................................................. 256 C081 - 18.12.2009 SK ............................................................................................................................... 260 C082 - 18.12.2009 DE............................................................................................................................... 265 C083 - 18.12.2009 AT ............................................................................................................................... 277 C084 - 18.12.2009 AT ............................................................................................................................... 287

C001 - 19.10.2009 UK

To make sure the current situation will no be repeated we need a new description of the capitalist system. 1 financial institute must be regulated at a European level control by the ECB. 2 Short selling must be stopped for nay transaction above 5000 Euro. 3 Investment in tax free countries must be limited to a sum of 10000 Euro 4 Company or people which break the above must be taxed on there company or legal income to a minim of 70% 5 And finally the new capitalist system must have a moral binding code.

C002 - 19.10.2009 DE

Die zur Verwaltung von Gemeinschaftsmitteln geschaffenen und noch zu schaffenden Finanzregeln sollten detailliert von der Kommission vorgegeben werden. Die Vorgabe eines Rahmens ist kontraproduktiv. Das Subsidiaritätsprinzip ist hier völlig fehl am Platz. Sanktionsregelungen sind konkret vorzugeben und entsprechend umzusetzen. Die Prüfung der Umsetzung ist konsequent vorzunehmen und darf nicht delegiert werden. Die Mitgliedstaaten treffen Regeln, die sie im Einzelfall nicht einhalten, wenn der politische Druck hoch wird. Die Beliebigkeit, mit der Finanzmittel anderer verwaltet werden, nimmt in dem Umfang zu, wie die wirtschaftliche Lage in dem jeweiligen Mitgliedstaat angespannt wird. Der Empfängerkreis von EU-Finanzmitteln ist konsequent zu bestimmen. Es kann doch nicht sein, dass Städte oder Gemeinden eine Flächenprämie beziehen, nur weil sie über Grünlandflächen verfügen.

C003 - 25.10.2009 NL

Taking main principles, mentioned in concerned EU litterature as leading thread, in my opinion the main financial problems and solutions are: 1. Principle of unity: Numerical misconceptions about the meaning of the terms million, billion and milliard could be eliminated by taking the most consequent system dated on plm 1950: one million is 1 with 6 zeros, one billion is 1 with 8 zeros and 1 milliard is 1 with 12 zeros. Taking a milliard as a 1 with 9 zeros should be not consequent, as for the latter is to be pointed as thousand million. 10 zeros is 10 thousand million (= 1 billion), 11 zeros is hundred thousand million and 12 zeros is one milliard as pointed before. 2. Principles of sound financial management and annuality: Main needed incomes are ruled by (Protocol) Statute ECB: - -- Art 29.1 delivers the computation of the Memberstates' annual contribution to the European Budget, of course to be debited by reproducted banknotes or giro annotation on a EU budget account without creating credits (borrowing) in advance and without delivering the real amounts of 1/2 GDP (see 29.1); thus not by demanding them from the memberstates' GDP results ;in the latter way the act should consequent a total loss economic state of finance to all member states. - Art 32.2 delivers the NCB's annual income to be debited in the same way. - Decisive ECB march 2003 enables reproduction of banknotes as national act, to be permitted by the concerned NCB president, independent of the consent of the ECB President. Reproduction could not only base the clients' current account to enable change in banknotes , it could also be used as a credit clearer to the total amount of debts caused by delivered services (government) and products (enterprises} past year, mentioned products and services to be conceived as valid legitimators. Clearing rule disappeared out of (protocol) Statute ECB, a new article should be adjoint, to be proposed by the EU Commission and to be voted by the EU Parliament, in order to clear and prevent debts. Debts caused by proved criminality could be compensated by insurances. 3. Principle of transparency: EURSTAT tables necessary conceiving amounts and numbers of emitted and reproduced banknotes.

C004 - 29.10.2009 DE

Hier ein paar Anregungen aus dem Erfahrungsbereich der Abwicklung von größeren Projekten „RuhrTriennale“ und dem Programm "Lebens- und Erwerbsweltbezogene Weiterbildung“. Frage 2: Ko-Finanzierung „Unternehmerlohn“ und freiwillige Leistungen (Ehrenamt) M.E. sollte hier wenigstens ein Teil der Arbeit anerkannt werden und z.B. durch die Bewilligungsbehörden (Bez.Regierungen) nach den geltenden Bestimmungen des HH-Rechts zum Besserstellungsverbot und Schlechterstellungsgebot analog TVöD festgesetzt werden. Die Regelung ist m.E. mit dem Gleichbehandlungsgrundsatz nicht vereinbar. Frage: Pauschalierung Da die Förderprogramm so verschieden sind, sollte hier eine Einzelfallprüfung erfolgen. Jedoch könnte i.d.R. gelten:

1. Bei Unternehmen/Institutionen, die eine verbindliche transparente Kostenstruktur und Buchhaltung vorlegen können, könnten eine pauschale Förderung sinnvoll sein, da die Daten der Vergangenheit VORHER von den Bewilligungsbehörden geprüft und eine Einschätzung und Entscheidung hinsichtlich der Höhe aufgrund von konkreten Zahlen gefällt werden kann.

2. Bei Institutionen und Projekten, die gerade erst implementiert werden, ist m.E. eine Pauschalierung nicht statthaft, es sei denn, es liegen aus ähnlichen Projekten Erfahrungswerte vor.

C005 - 30.10.2009 NL

Het zinvol is op de uitgegeven obligaties een rente, in de vorm van energie, te geven van 10%. Hierdoor wordt het aanschaffen van obligaties bevorderd. Ook bedrijven dienen te worden opgeroepen om obligaties aan te schaffen.

Graag wil ik een bijdrage leveren aan het Financieel Reglement. Het betreft een uitbreiding van de financiëringsmogelijkheden ten aanzien van het energie-beleid. Ik denk dat dit beter Europees aangepakt kan worden dan dat de Lidstaten dit kleinschalig aanpakken. Een goed idee is van prins Hassan van Jordanië. Hij wil zonnecentrales bouwen in het Midden-Oosten en in de woestijnen van Noord-Afrika. Hiermee kan heel Europa worden voorzien van electriciteit. Dit project kan gerealiseerd worden wanneer Europa een oproep doet aan de burger om per gezin of andere samenlevingsvorm voor 1000 euro een obligatie te kopen; hiermee kan dit project gefinancieerd worden en gestalte krijgen. Wanneer de centrale operationeel is krijgt men het bedrag aan energie weer terug. Er dient een zodanige prijs vastgesteld te worden dat de winst gaat naar de opbouw van Europa met name de armere landen. Andere werelddelen kunnen dit navolgen. Een mogelijke bijdrage.

C006 - 30.10.2009 ES

I prefer to answer as citizen rather than as an organisation, since I talk on my own without representing the company, although I’ve been personally involved in coordinating several R&D and Innovation Community funded projects from FP5, FP6 and now FP7/CIP. I just have one input for a single question of your questionnaire. It is about your Qs nr.3 related to performance-based grants and your suggestion: “The Commission could also envisage a new management system to cover costs based on the expected outputs of a project, i.e. the concrete objectives which are achieved.” I want to say that such approach will have no sense for funding R&D and Innovation activities which, by definition, have an inherent technological/commercial risk and uncertainty to succeed. In these projects funding cannot be subordinated to the achievement of planned objectives but only to honest fulfilment of planned tasks to reach those goals, regardless the objectives were reached or not. That’s it. Thank you for the opportunity to express our opinions.

C007 - 16.11.2009 BG

Attached are the papers in the light of the Public consultation procedure on the Financial regulation and the data of the personality identification. Question 1: Are you sufficiently informed about upcoming calls for proposals in a timely manner? What improvements would you suggest? There is no sufficient information delivered on time regarding upcoming calls for proposals. A possible solution is the introduction of public electronic register or centralized web-site structured accordingly in different sections to target a potential data base approach towards different target groups and interested parties functioning at sector principle. Question 2: should the rules be more flexible on co-financing requirements taking into account the type of actions and project managers? How could in-kind contributions best be dealt with, while adhering to the non-profit principle? Contributions like volunteer works should be strongly encouraged through EU system for certification of the companies offering this form of contributions and awarding of EU encouragement incentives for the creative and innovators employees of those companies in terms of non-profit, non material, rather spiritual and prestige ranking. Question 3: Should the use of lump sums, flat rates become the norm rather than the exception? Should the rules allow for costs to be covered on the basis of expected outputs? If yes, can you provide concrete examples? Yes, it should. The leading principle in the project financing should be “till the funds or budget end limits”. Some additional incentives should be predicted. Since the EU has been established on the international solidarity principle it should include some major programs for incentive policies to award those organizations which are applying searching professional development through this Community instrument to promote the common market and the international partnership. The support focus on international partnerships should be particularly emphasized. It is recommendable to introduce the principle of list of short listed and qualified for the program organizations according to their project proposals evaluations and the explanation of the criteria for this. The principle of achieving economic convergence in Europe and transforming Europe in leading competitive global force in innovation and knowledge to be imposed in line with the Lisbon agenda. The international cooperation between different corporations or public institutions should be strongly enhanced at EU level with concrete measures, political actions, administrative procedures and policies. Examples Introducing flagship projects corresponding to criteria for leading beneficiaries whose projects to be largely promoted in terms of innovation ideas and business development with well-built and powerful international elements and sound bites. Question 4: Should the rules strictly adhere to the non-profit principle or should there be room for some flexibility in this matter? Do you have examples of good practices from other public authorities? There should be more flexibility. Question 5: What, in your view, would be the appropriate amount for low and very low value grants? 150 000 and 50 000 Euro Question 6: How could the rules on operating grants be more flexible? In which way? What are your views on the duration of framework partnership agreements?

To seek sustainable development in the framework partnership agreement. Question 7: Can you give concrete examples and types of actions where the strict limitation on cascading grants became an obstacle for achieving the goal of your action? It could not represent a problem where you have an adequate project proposal insuring and guaranteed by additional sources of financing such as public private partnership and worked out at EU level legal system to encourage the banks to collaborate in the process of project implementation. Question 8: From your experience, what alternative solutions could be proposed for prefinancing payments while safeguarding tax payers' money? Adequate control, establishing buffer finances and blocking of capitals for guarantying the debtor’s credibility. Question 9: What mechanism, other than pre-financing guarantee, could be explored while ensuring adequate protection of community funds? Intermediary finance and crime control mechanism through adequate system for monitoring, fraud prevention and information. Question 10: Based on your experience, do you think current thresholds are still adequate or should they be increased, and why? It should be increased in order to achieve more return on investments, better quality of the projects and large spectrum expert actions on global scale. Question 11: How could the application procedure for both grants and contracts be further improved? To introduced a mechanism for preliminary monitoring and encourage the partnership schemes.

C008 - 30.11.2009 NL

1/5

Comments from AIDS Action Europe and STI AIDS Netherlands (host organisation and legal representative of the network AIDS Action Europe)

Contact: Martine de Schutter, Executive Coordinator AIDS Action Europe mdeschutter@aidsactioneurope.org

Question 1: Are you sufficiently informed about upcoming calls for proposals in a timely manner? What improvements would you suggest?

Yes, and this last year the system improved. We were informed by email when changes to the format were made after the call was launched.

Question 2: should the rules be more flexible on co-financing requirements taking into account the type of actions and project managers? How could in-kind contributions best be dealt with, while adhering to the non-profit principle?

Yes, the rules should definitely be more flexible.

Networks such as ours experience severe problems with co-financing rules, such as:

- Recent new rule on maximum 20% core funding co-funding by commercial sector. Since our network is not eligible for government funding, there are few possibilities to secure other funds. As long as we stick to our ethical code, are transparent about all funding and are of the opinion that private companies do not influence the way we work, we are of the opinion that there is no problem with private funding. Also, the EC is not able to define well the commercial funding. For example, they could not answer if the Bill Gates Foundation is considered for-profit.

- Co-funders are generally flexible, and might provide funding for both core operations and specific project activities in the same grant. The EC demands that the co-funding is explicitly earmarked only for the eligible costs for a project or operating grant. But this forces co-funders into EC regulations that might not match with their policies. For example, for most funders Europe entails also countries outside EU 27 and they would be forced now to exclude funding activities outside the EU.

- In-kind contributions should count as co-funding. For example, the Steering Committee members of our network get their travel expenses reimbursed under the operating grant, but not their salary for the days that they volunteer to manage the network.

- See also page 16+17 of the EUCLID reaction (link below) to this public consultation.

Question 3: Should the use of lump sums, flat rates become the norm rather than the exception? Should the rules allow for costs to be covered on the basis of expected outputs? If yes, can you provide concrete examples?

- Many organisations, however not for profit, have developed financial tools such as hourly rates and cost accounting systems to match the financial reporting needs. The EC should accept these financial tools. They are constantly checked by the organisations’ auditors and can be explained to the EC if necessary.

- Reviewing a grant first on basis of the outputs and then on basis of the financial report is a suggestion, instead of giving the same weight to both reports (content and finance). A concrete example: the private fundraising income of Aids Fonds STI Netherlands is used to give grants to organisations. The final evaluation of a grant reporting by a grant recipient is first subject to content analysis (are the initial objectives reached? are the expected outputs actual). By a positive answer, the financial control will take place on a high level (are actual figures in line with the budget, are discrepancies actual versus budget explained, are discrepancies acceptable). If the assessment of the content report is less positive, the financial control will be more thorough (all questions above, request for more details, eventually copy of invoices/documents). The lesser the quality of the outputs, the higher the controls (on content and finance).

2/5

Question 4: Should the rules strictly adhere to the non-profit principle or should there be room for some flexibility in this matter? Do you have examples of good practices from other public authorities?

Profit is an opinion. The EC regulation assumes that a positive result is a profit. Not-for-profit organisations, as their name suggests, allocate an eventual financial result to either a continuity reserve enabling the organisations to carry on their activities in the future or labelled reserves for specific projects and or activities within the framework of their strategic objectives. The non profit-principle may therefore be checked by the EC on organisation level instead of project/programme level. The Dutch Ministry of Health allows the recipient of a core funding grant to retain a ‘equalisation reserve’ of up to 10% of the annual grant.

Question 5: What, in your view, would be the appropriate amount for low and very low value grants?

Question 6: How could the rules on operating grants be more flexible? In which way? What are your views on the duration of framework partnership agreements?

- See above remark on co-funding. Another problem is the one year scope. The whole application, contract negotiation and reporting process takes up too much time, that is taken away from implementation of the work programme. It is suggested to make easier procedures for follow-up applications for operating grants.

- In relation to the duration it is also important to underline that operating grants offer stability in relation to the ongoing functions of networks. Not all network activities are always innovative, activities such as information dissemination, advocacy etc. need continuation. We therefore question the EC decision to downscale operating grants. The quality and need for the work programme should prevail in this discussion.

Question 7: Can you give concrete examples and types of actions where the strict limitation on cascading grants became an obstacle for achieving the goal of your action?

Question 8: From your experience, what alternative solutions could be proposed for prefinancing payments while safeguarding tax payers' money?

- As a private funder Aids Fonds STI Netherlands only pays up to a maximum of 80% of the total grant in advance. This is a good safeguard for our donor’s money. Aids Fonds also finances projects with a limited duration (up to 3 years). For any project longer than one year, interim reporting is necessary. On basis of these interim reports, it is clear whether the donors’ (read tax payers’) money has been spent or not. An organisation which has asked for a grant does not do if for the sake of raising interest on its bank credits but in order to carry out a predefined programme. Out of experience, the hassle around interest rates supposedly generated by ‘sleeping’ donors’ money is never up to its result.

Question 9: What mechanism, other than pre-financing guarantee, could be explored while ensuring adequate protection of community funds?

It is surprising that community funds would not be protected when granted to non EC organisations, whereas they would be protected when spent within the EC institutions. It is a matter of risk analysis. Accept the risk and limit it by a good selection procedure, in order to appoint serious organisations, keep regular contact with the grant recipient, do not pay 100% of the grant in advance, develop a sanction policy including claiming back the whole grant.

3/5

Question 10: Based on your experience, do you think current thresholds are still adequate or should they be increased, and why?

We think the thresholds are very low. Public tenders are valid at the start of an activity, but we consider it ineffective and an unnecessary burden to have repeated tenders for the same activity every year a new operating grant starts. For example, it is not efficient to have to change the website builder company or usual translator every year.

Question 11: How could the application procedure for both grants and contracts be further improved?

We think the suggestions mentioned are great. We also suggest to have either a pre-proposal and second round full proposal phase or just one full proposal application. But in the last case, it is really a burden that every year after the first application proposal, we need to rewrite and adapt the proposal slightly or completely into different formats. Example: retype all the information in the PDF application into a new Excel format that is used for the contract. It’s really a waste of time.

Additional comments

We wish to express our strong agreement also with the comments provided by EUCLID to this consultation, see

http://www.euclidnetwork.eu/data/files/consultation_on_the_european_financial_regulation_review_by_euclid_network.pdf

The document below was sent to EAHC end 2008 to comment on our experiences with DG SANCO project and operating grant procedures (only parts relevant to the financial grant management are included).

This document reflects both a discussion during the last EU HIV/AIDS Civil Society Forum as well as the experience of STI AIDS Netherlands during the implementation of a 3-year project funded under the EU Public Health Programme and the development of the new applications under the call for proposal 2008. It reflects on the entire period since 2006.

Main conclusion from the discussion at the Civil Society Forum on November 3, 2008

The CSF members that have been main beneficiaries of Sanco projects are of the opinion that the new agency EAHC so far has not improved the administrative burden very much. Lack of clarity and inflexibility y in financial rules and regulations are of main concern. For small NGOs it is very often not possible to live up to rules and regulations; regulations constantly change; it takes a lot of time to make even small changes (a changes in a contract can take for example up to a year as a CSF member experienced).

Procedures sometimes paralyze everything. There is also concern at policy level: it looks like the new agency sets the priorities and not the Commission. There are questions about the competence and the mandate of the agency: What are the priorities of DG Sanco? There is the fear that the agency influences the implementation of the communication.

Running a EU project is sometimes a financial loss, NGOs get into financial risks, the issue of overhead costs needs to get raised, because 7% overhead does not cover real expenses. So on top of the co-funding, other funding is needed to cover for these expenses not eligible by EC funding.

Another co-funding problem is that the amount of co-funding NGOs have to look for is too high. Mobilization is difficult in certain cases; overhead costs are a mayor problem.

Co-funding received from the pharmaceutical industry should not be a exclusion criteria. It is difficult for European NGOs to receive money since there are few foundations and other sources that cover the expenses for work that focuses on Europe.

4/5

Issues experienced by STI AIDS Netherlands during the implementation of the project and the development of the new applications under the call for proposal 2008

On the project

- In the first years of the project, before the EAHC (PHEA) was initiated, financial officers from the EC generally did not react on requests for clarification on financial rules and regulations. Also, when they did, their responses were later on contradicted by other financial officers that took their place. In the end, many regulations were unclear. And several times we have not spent money because we were told that we were not allowed, and later on we were told we could have done so. This severely impacts the way of spending, leading to underspending. For example, in the case of travel costs, we were told that we could not use the remaining budget (large budget, because real ticket expenditures were much lower than the Commission maximum budget) for subsistence costs (where we had problems, because sometimes seminar participants had to stay longer because their was no flight home). - EAHC started to review again financial reports issued previously to the Commission, at the time when PHEA/EAHC did not exist yet, and started asking questions and making observations about the first year of the project, while the report was already approved by the Commission financial officer. This meant a lot of extra work. And it led to confusion because all of a sudden there appeared to be different rules and regulations. - Request for amendment when it was discovered that the main beneficiary made expenses that were budgeted by an associated beneficiary. Example: a flight Bucharest-Amsterdam for an associated beneficiary was paid by the main beneficiary (a few hundred euros) - Lack of flexibility in the general conditions. Example: immediate transfer of all funds received to the partners. We had set up a system where funds would be transferred based on the need of the partner in organising a particular event (either in year 1 or 2 or 3). Threatened with breach of contract, we abode by the EU request. Outcome: following the amendment, we have now transferred too many funds to partners and must claim them back. Suggestion: more cooperation and flexibility from the EAHC in the practical developments would be welcome. - Overwhelming attention paid to minor details. Examples: a- We would have earned 'unjustified' interest income on the money withheld from the partners. Hours of calculation led to a mere € 1.000, or 0,5% of the amount received from EU. b- amounts have to be reported to the EU with 2 decimals, request from EU to review the amendment and balance because of a few cents difference. Suggestion: the EAHC applies the general rule in the accounting world: a variance of less than 1% of the total is not considered material. - Actual costs may be higher than the maximum authorised by the EU (eligible costs), in which case we look for additional co-financing. For example, we might need to give speakers at seminars a small present, since they come and work for free, but these kind of costs are not eligible. We might also invite participants from outside the eligible countries. Our co-funders did give us permission to utilise their funding for these kind of expenses, in the case where their co-funding was not entirely needed for the 40% co-funding of eligible costs. But EAHC does not accept this flexibility in the use of co-funding. This may lead to the situation where we might have to give money back to co-sponsors, when the total costs is lower than budgeted (which is always the case taken that travel costs are budgeted at a maximum rate). Suggestion: Organisations can make their own decision on how to apply the co-funding, whenever the 40% co-funding for the eligible costs is secured. - General impression of systematically being suspected of (attempt to) fraud - Exaggerated amount of time in administration of EU grant. Time spent to administrate a € 200.000 grant from the EU is 50 times more than administrating a €2.300.000 project from the Dutch Ministry of Health or a € 15.000.000 project from the Dutch Ministry of Foreign Affairs. Suggestion: EAHC inquires about the track record of an organisation and adjust its requirements accordingly.

5/5

On Operating grant

- Change in the requirements in the middle of the negotiation process, in contradiction with the grant guidelines. Example: mentioning during meeting that general percentage of 7% overhead is no longer accepted. No formal request has been sent, no adjusted guidelines have been communicated. But also a sudden requirement – not mentioned in the grant application regulations – that we had to show our independence from private companies and should not have more than a certain percentage of overall funding from private sector resources. This was all of a sudden an issue during negotiations following the tentative selection for funding. As mentioned above, in Europe it is very difficult for NGOs and networks to receive funding from other sources, this new regulation (still to be decided upon) would make it impossible for some networks to apply to the call for proposals.

Suggestion: the EAHC respects her own rules.

- Rejection by the EAHC of any cost allocation that is not supported by an invoice. We have an outstanding internal reporting system, including cost allocation, that fulfils all reporting requirements to external donors, including Dutch Ministries and public organisations.

Suggestion: We present this system to the EAHC financial department

- During the development of the proposals for operating grant and conference grant, the guidelines changed, and also the format, particularly the maximum number of text that could be included. The EAHC system was supposed to inform us by e-mail on these changes, but this didn’t work. It meant a lot of extra work last minute to limit the size of all sections. In addition, several parts of the automatic application form did not work correctly, which led to last- minute problems. This feed-back and more details were already sent to EAHC in response to the electronic evaluation of the call for proposals procedure.

Suggestion: EAHC should make sure the formats work and not make changes after the call has been issued.

C009 - 07.12.2009 UK

Answers of the questions: 1- In average they are well but some time the Announcements are not enough clear and always they are kept "staying" on the board for long long time (I am talking about Bulgaria media space) - they are not maintained properly - you could try even today to have a look on "current calls" and to find out that a lot of calls are closed long time ago. Yes the term is written in the text but why we should spend time to read it. 2- Co-financing some time put brakes to the new or small ordinary organizations to become part of the programs. And as a extra believe me that every approved project has initial co-financing, exempted of the official budget because the most common way to get funding in Bulgaria is to pay a bribe for that - the bribe - this is the first co-finance tool here in most of the cases. This bribe usually is covered as a consultancy fees of some organization or party membership fees or... 3- No 4- Each successful project brings a significant "profit"| but I think the financial profit could motivate the people to work more and better if we are talking for some kind of projects. Unfortunately the time or who knows what made the one of the most valid assessment to be the financial achievement. But this strategy should be carefully developed with very very clear regulations. I think some of the long term projects could be for profit with obligations for big part of reinvestment or high % tax back if not. 5- I was a consultant to NGOs about their projects which was in the lowest levels in a range of social programs for elderly people or support of kids from the problematic society. The requirements impressed me not with the small amount but with the short term. I think it is a loss of resources - not only in these cases. With k25 Euro in Bulgaria you could do a lot in some of the areas of funding if you manage the money in proper way but if you have a look and think about you will see that it is some how in-vain to throw a lot of times by 5-25000 most of them for refurbishing or construction work and in few month what happens with this money? Who and how will continue to work and... This problem is not only with EU funds. I had an experience in my job where we got a funds in past for a lot of money spent for one year training... and all the equipment could be used at least 3 years... Will be better if the funds require longer terms of the projects, :) this even will reduce the administrative expenses of the authorities. My view: very low - 10k, low 25k 6- It is so complicated - from one side this limit prevent from other is a brake to develop. I don't know how is in the other countries but in two where I have an experience a lot of the requirements are so political and it brings a problem but not stop the beneficent to be the same under other name. 7- I can not 8- Very strict control by trusted organizations. Unfortunately administrative and financial formality is a part of literate people life and must be done. 9- It is sound strange how the beneficiary might goes bankrupt without to do it deliberately. 10 - Invoices without control every body could create all over EU 11- The structure of the most common templates consist a lot of repeated and empty words and documents which are not needed. The soft copy in read-only format could be provided without to be printed. One CD cost in times less.

C010 - 07.12.2009 IS

I come from Iceland and have been terribly badly affected as all other Icelanders by extra ordinary poor financial legislation. In my opinion we must get away from “socialism” for the rich which is created by governmental guarantees in the financial sector. In my opinion the main objective of new legislation must be:

1. Eliminate all governmental guarantees in the financial sector. These companies should be able to buy insurance like other companies must do – for example travel agencies – and this insurance should give depositors some minimum guarantee.

2. If some of these financial companies are “too big” to fail as is commonly referred to – why should they be granted the right to become this big?

3. Active control should be taken into key consumer markets – like for example the housing market. If banks are loaning excessively into this sector and public spending is way above the income (people are thus increasing their dept) a creation of a bubble is likely to be under way. Key control parameters to avoid such a bubble could be interest rates and maximum dept ratio (it could for example be lowered from 90% - 70%).

4. Make the sector much more open such that people have access to information about what transaction are taken place. Owners of banks over certain percentage should have the same obligation as the bank to give information about their financial status and all transaction (loans, options etc.) between the bank and these owners must be open.

5. Cap must be put on loans to buy shares. One method could be to have it such that shares bought with loans do not give voting rights. Another method would be to put a maximum dept ratio which was put at 50% after the crises in 1929 in the USA if I remember it correctly.

Hopefully this helps and hopefully a few bankers and investors with ignorant incompetent government will never be able to make a whole nation bankrupt as happened here in Iceland last year.

C011 - 08.12.2009 BE, DE, IE (x2), FR, NL (x12), IT (x36), HU, RO (x5), FI(x16), SE, UK (x13), SQ

Please consider the contribution below to the consultation process you initiated. Thank you! Answer to Question 2: The new financial regulation for the EU should foresee that: - Contribution through voluntary work be obligatorily recognised by the “authorising officers” of European programmes as in kind contribution in areas where volunteers are indispensable, such as Youth in Action, Lifelong Learning, Europe for Citizens, European Social Fund, Regional Funds. This should also be the case for reimbursement of actual costs incurred by volunteers during the contribution to the project. - These contributions through voluntary work be recognised as eligible costs / and eligible income (contribution) to the project equal to monetary contributions / match funding. - A model for calculation of the financial value to be placed on the contributions of volunteers to projects or activities within the framework of an operating grant shall be established in collaboration with the European networks of volunteer organisations.

C012 - 08.12.2009 BG

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PUBLIC CONSULTATION ON THE FINANCIAL REGULATION AND IMPLEMENTING RULES

Submitted by the Bulgarian Association of European Programmes Consultants (BAEPC) 9 December 2009 Bulgarian Association of European Programmes Consultants (BAEPC) is a newly established organization that represents major consultancy companies and independent consultants in Bulgaria. The organization has been set up in November 2009 with the strong support of the Government and the Parliament of Bulgaria. The main goal of the Association is to set professional standards in the consultancy sector in Bulgaria and to contribute with its resources to the more efficient development and implementation of European projects and programmes.

BAECP welcomes the initiated public consultation on Financial Regulation (FR) and Implementing Rules (IR) as a way to express a position on the issues raised and to add to the transparency of the process related to the efficient use of EU taxpayers’ money. We offer the following answers to the key issues outlines in the consultation document. Information about grant opportunities. BAEPC considers that the information about EU grants is widely published, but further improvements could be made, so that to establish a better and supportive framework for all applicants. At EU level the grants section on the Europa portal (http://ec.europa.eu/grants/index_en.htm ) could be better structured to present in a user’s –friendly way the annual indicative programmes of the DGs in the relevant policy areas At national level, BAEPC believes there is a very well organized way to present the upcoming funding possibilities by publishing the yearly indicative programmes, calls for proposals, organization of information campaigns, etc.

However, there are two major problems related to that.

The first problem , related with the advance planning of beneficiaries’ resources and efforts, is that the indicative programmes are not followed during the year and their accomplishment does not reach 50% in general. Although called indicative, still the programmes should give an annual perspective and higher predictability. Consequently, they cannot be deemed as efficient planning tool, if there is not explicit requirement about the validity of the information provided..

The second problem is related to the low quality of preparation of the Guidelines for Applicants. Operationally this problem can be solved through the clarification procedures of ongoing calls for proposals; however their effect is questionable since:

• In some programmes such procedures are simply missing (i.e. in Rural Development Programme 2007-2013 in Bulgaria);

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• In some programmes even the clarifications provided are not clear. Sometimes, there are contradictions between different sources of information (clarifications published on the internet, clarifications provided during official information days, “unofficial” statements, made by officials of Programme Managing Authorities, etc.). We realize that part of these problems are not only a consequence of the Programme Guidelines, but also of unclear legislation and other circumstances. However, the Managing Authorities have to cope with these problems in advance and announce Calls for Proposals only after all conditions for applications are clarified.

• There is a tendency of “over-regulating” by the national authorities by imposing unnecessary superfluous actions/procedures and requesting of unnecessary documents to be submitted, which is not required neither by the FR, nor by the IR. There should be proportionality between the size of the grant and the efforts applied to implement this grant. This fact hinders the preparation actions of the potential candidates and often leads to extra efforts, extra preparation costs, and in some cases, to giving up the application. Putting “red-tape” is usually detrimental for the process of application, although it safeguards the administration.

BAEPC considers that apart from the annual programming, for multiannual programmes (financed by EU Structural and Cohesion fund), a good perspective for improvement of transparency shall be elaboration and publication of indicative programmes with upcoming calls for proposals for a three year period. The main argument is that investment projects require additional time for the preparation of the technical proposal and documentation, ensuring enough financial or other resources. If the beneficiary is well informed in advance s/he could take into consideration all the requirements and parameters. This proposal is also in compliance with the elaboration of midterm budget plan by the responsible authorizing officers. In order to achieve more publicity among potential beneficiaries, indicative programmes may be published on the internet site of the institutions and possibly by another appropriate means, including the Official Journal of the EU.

Co-financing and contributions in kind

BAEPC believes that with regard to the European Economic Recovery Plan, the proposal for amendment of the principle of co-financing is quite necessary. The practice reveals that ensuring own or other financial resources and having access to finance is difficult. The rules should be more flexible taking into account the type of activity, value of cost borne and the potential beneficiaries. Increase of advance payment is crucial for beneficiaries with insufficient budget, i.e. public authorities and local governments, since they are supposed to apply, pre-finance and co-finance a number of projects to improve the infrastructure and meet the EU requirements – road, water and waste, social infrastructure, etc. for certain period of time (7-year programming period). The small % of advance payment, the complexity of operations in infrastructure projects, the considerable delays in the reimbursement of costs incurred, create a very big obstacle for the absorption of EU funds, for growth and employment. The rules of spending EU funds should make the project implementation as feasible, timely and smooth as possible, and not a burden to beneficiaries and their contractors. BAEPC proposes that the percentage of advance payment could be increased to 50-60%, which is quite enough for the smooth financing of all project stages and enables normal transactions to all contractors of the beneficiary. The European Commission should control the spending of EU funds via other instruments – risk assessment, monitoring, on-the-spot checks, etc. Another proposal is that all own resources ( staff, machinery, consultancy services or specific equipment ), provided for implementation of a project, could be considered as eligible for in-kind contribution. In order to apply the non-profit principle, the rule for acceptance of in-kind contribution should be strictly followed - the costs actually borne and results/outputs achieved. The benefits of such proposal for further flexibility are the simplification of procedures and encouraging candidates to apply for grants. The concrete example of Bulgaria in the implementation of Structural Funds and Cohesion Fund shows that the problem is of extreme importance for the public authorities (i.e. municipalities), which

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have to fulfill certain EU requirements (i.e. in waste & water sector) and formally have access to EU funds. The municipalities normally have very limited budgets compared to the size of infrastructure projects, as they are supposed to pre-finance, co-finance and implement such projects. The funding possibilities through loans and other financing institutions are limited, because of legislative constraints and the current financial crisis. In this situation the potential beneficiaries are discouraged to apply for EU funding because of the large scale of the projects and limited possibilities to find enough financial resources to pre-finance and co-finance them. This problem becomes even more serious if the beneficiaries have to implement several projects in parallel.

On the other side, when the scale of projects and the level of co-financing is significant in case of revenue generating projects, that could be of interest to the private sector. Therefore, more efforts should be put in utilizing the private resources through public-private partnerships (PPP) and using this instrument to provide the co-financing part of large-scale infrastructure projects in water and waste sector, transport, etc.

The European Commission has already started some initiatives to promote the PPP schemes even in the context of EU funded projects1. Furthermore, some of the Operational Programmes also emphasize the usage of PPP concept, however there is no practical guidelines how these PPP schemes could be combined with EU funding. Moreover, there were some cases in which pogramme officials refused to endorse Terms of Reference for technical assistance containing PPP feasibility study at project preparation phase, in full contradiction with the meprogram principles.

BAEPC recommends that more concrete and detailed rules should be elaborated in order to ensure the proper understanding and use of PPP, as well as formal approval of the EC to use PPP in EU funded projects. It is very important that these rules should be also incorporated and adapted in national Operational Programmes and Guidelines for Applicants for each Call for Proposals.

Performance-based grants BAEPC believes that the approach of using lump sums, flat rates, scale of unit costs should become a normal practice rather than exception. The proposal is welcomed as this will result in a simplification of the procedures and applicable financial rules. This rule is also oriented more to the performance management system and it shall provide benchmarks to the costs and the expected outputs. In such a sector as water supply management system, if a scale of unit cost for construction/rehabilitation of wastewater treatment plant is set up, this shall bind the cost with the performance, ease and simplify the reporting procedures and accounting of costs. Implementation of such forms for awarding grants shall be supported with amendments in the whole system for application, evaluation, implementation, reporting and financial management of grant.

The rules for certain categories of eligible costs and types of works should be also unified in each EU funded project as much as possible. This would make the approval procedure more transparent and limit the room for interpretation of national officials. There are some cases of enormous fluctuations of costs for the same type of work in different projects, programmes and countries. This is especially typical for types of work and services which are not “market products”, but derive from EU requirements (specific studies, etc.). Therefore, establishing unified lump-sums, scale of unit costs and flat-rates will certainly defend the interest of EU taxpayers by setting unified average cost levels for certain types of actions.

Non profit rule BAEPC considers that the non-profit rule should be strictly adhering in the project. The grant may not have the purpose or effect of producing a profit for the beneficiary. Lump sums and flat-rate financing shall be determined in a way as to exclude a priori a profit.

The EU funds should be granted to projects contributing to EU policy goals and this should be the main factor for approving a grant. The profit itself should not be an argument to reject a project proposal. Therefore, the non-profit principle has to be determined on a programme-by-programme basis. Cost-benefit analysis is a good instrument for determining the EU contribution to profit-making projects and co-financing part can be accordingly increased to prevent excessive EU financing.

1 http://ec.europa.eu/regional_policy/sources/docgener/guides/pppguide.htm

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Ceilings for small grants BAEPC believes that in the view of simplification of applicable financial rules and flexible conditions, the ceiling for small grant might be increased. A suggestion is increasing ceiling in double for low grants ≤ 50 000 euro and for very low value ≤ 10 000 euro. Pre-financing payments to beneficiaries In view of Art. 5a FR BAEPC suggests that alternative solutions for pre-financing payments may be different forms of payments, such as putting in practice a letter of credit, factoring in financial transactions, etc and also enhancing access to financing for beneficiaries by loans, risk capital, guarantees, security funds etc. Pre-financing guarantees The pre-financing is often quite a needless tool for the beneficiary with the required pre-financing guarantee, as the corresponding amount is blocked by the bank guarantor. This removes the advantage of the pre-financing. Hence some appropriate mechanisms that could be used to protect community funds instead of pre-financing guarantee are a promissory note, a bill of exchange and other securities what secure the value of the pre-financing issued by the beneficiary to the principal.

Tendering thresholds for low value contracts

BAEPC suggests that tendering thresholds should certainly be revised annually or at least every three years, when the FR is revised, to reflect the inflation and changes in market prices Paperwork for applicants

BAEPC fully supports introduction of electronic and two-stage application procedure, which would significantly decrease the project preparation costs, paperwork, efforts and man-days.

Surely, an idea to continue reducing paperwork through introduction of a "label" system so that organisations that have successfully carried out a project and/or contract send only documents relevant to the new application, is good example for reducing paperwork. If e-tools are used, it should be applied also in implementation phase, control and verification, audit, etc. in order to simplify the procedures.

As for the two-stage application, it has to be noted that project preparation as a rule can become very difficult process, not only of tight deadlines, but also, because of the timely provision of documents issued by third parties (environment authorities, tax authorities, etc.), involvement of several project partners, etc.

To that end, BAEPC would suggest that administrative check of documents (national calls) could be done in front of the applicant and if some documents are found missing or inconsistent, the latter should be given the possibility to provide them within a certain deadline. It is of nobody’s interest to reject full project proposals (sometimes of high-quality), containing detailed feasibility studies, designs, supporting documents, application forms, partnership agreements, etc., only because of technical mistakes, sometimes of minor importance. The candidates should be given a “second chance” and rejections due to administrative reasons should be made only after the given deadline.

Chairman of the Managing Board

Bulgarian Association of European Programmes Consultants (BAEPC)

C013 - 09.12.2009 FI

Thank you for the opportunity to contribute to the Financial Regulation. Here are some of my thoughts: Question 2: Should the rules be more flexible on co-financing requirements taking into account the type of actions and project managers? How could in-kind contributions best be dealt with, while adhering to the non-profit principle? Contribution to Question 2: Contribution through voluntary work should be obligatorily recognised by the “authorising officers” of European programmes as in kind contribution in areas where volunteers are indispensable, such as Youth in Action, Lifelong Learning, Europe for Citizens, European Social Fund, Regional Funds. This should also be the case for reimbursement of actual costs incurred by volunteers during the contribution to the project. These contributions through voluntary work be recognised as eligible costs / and eligible income (contribution) to the project equal to monetary contributions / match funding. A model for calculation of the financial value to be placed on the contributions of volunteers to projects or activities within the framework of an operating grant shall be established in collaboration with the European networks of volunteer organisations. " Question 4: Should the rules strictly adhere to the non-profit principle or should there be room for some flexibility in this matter? Do you have examples of good practices from other public authorities? Contribution to Question 4: Rules should not be limited to not-for-profit only. For organization to become self sufficient and less depended on EU financing, it should be possible to generate profit from the project and use this profit for further develop or continue the project more independently afterwards. There should be possibilities for social entrepreneurs for example to get financing as well as non-profit organizations. Question 5: What, in your view, would be the appropriate amount for low and very low value grants? Contribution to Question 5: Is there really need to have 2 categories of low and very low? As a low grant ceiling 25000€ seems appropriate.

C014 - 10.12.2009 UK

Question 1: Are you sufficiently informed about upcoming calls for proposals in a timely manner? What improvements would you suggest? For organisations already familiar with the programme, regulations and call process, the timescales are usually sufficient. However, for new participants, building knowledge of the mechanisms of participation while also responding to a call is very difficult. This is really more of a question of wider publicity and awareness of the Programmes. I.E. if organisations were familiar with FP7 from the very start, they would be able to make a decision as to whether it was appropriate for them to participate well in advance of calls being issued. As a result, they would have ample opportunity to build their knowledge of how to participate, to understand requirements of proposals and start to establish the necessary partnerships. Inevitably, a large number of participants only’ discover’ FP7 at a later stage and respond only when a call has been opened which leads to very tight timescales to properly prepare a proposal. Question 2: should the rules be more flexible on co-financing requirements taking into account the type of actions and project managers? How could in-kind contributions best be dealt with, while adhering to the non-profit principle? Co-financing is appropriate for many areas to ensure that grants exist as a genuine incentive to carry out stretching projects and avoid organisations simply using grant funded projects as streams of commercial work. However, there is insufficient flexibility in the regulations to take into account genuine and desirable in-kind contributions. A level of consistency in how this is treated across different programmes is also required. Many applicants to FP7 for example, have a mindset of in-kind contributions that they have established through participation in other EU programmes. It can be difficult for them to understand the different use of co-financing which results in difficulties at negotiation stage. Question 3: Should the use of lump sums, flat rates become the norm rather than the exception? Should the rules allow for costs to be covered on the basis of expected outputs? If yes, can you provide concrete examples? There are some strong arguments for the widespread use of lump sums and flat rates in order to simplify the process of application and to make it clearer and more obvious to applicants what the financial return from participation will be. However, there is a danger that in trying to meet the needs of all potential participants across all member states that a flat rate ‘system’ would become too complex itself. I would support, at the very least, the use of lump sums and flat rates for smaller projects and for SME participants to relieve the burden they currently face in proposing, delivering and managing projects. Question 4: Should the rules strictly adhere to the non-profit principle or should there be room for some flexibility in this matter? Do you have examples of good practices from other public authorities? I believe that the non-profit principle should be maintained to ensure that organisations participate in programmes for good business and strategic reasons and to ensure that, for example, in FP7 projects deliver IPR that genuinely helps to grow the organisations competitiveness. Question 5: What, in your view, would be the appropriate amount for low and very low value grants? No comment Question 6: How could the rules on operating grants be more flexible? In which way? What are your views on the duration of framework, partnership agreements? No Comment Question 7: Can you give concrete examples and types of actions where the strict limitation on cascading grants became an obstacle for achieving the goal of your action? No Comment

Question 8: From your experience, what alternative solutions could be proposed for prefinancing payments while safeguarding tax payers’ money? Lower level of initial prefinancing but with a simple and fast way to draw-down already agreed sums at various points in the project. Question 9: What mechanism, other than pre-financing guarantee, could be explored while ensuring adequate protection of community funds? No Comment Question 10: Based on your experience, do you think current thresholds are still adequate or should they be increased, and why? No Comment Question 11: How could the application procedure for both grants and contracts be further improved? The application procedure is overly complex and inadequately explained in the various guidelines. There is no single guideline that provides a clear view of the process, various steps and rules at each stage – it is spread over a number of documents that are lengthy, difficult to interpret and at times misleading. There is a lack of clarity in many areas and some degree of interpretation is frequently required. The regulations and guidelines are also interpreted in different ways by different EU DGs and Units and by individual officers leading to widespread inconsistencies. For example: The fact that some 30%(?) of applicants claiming to be SMEs have their status changed at negotiation stage in FP7, is surely a testament to the failure of the guidelines to explain what an eligible SME is? There is no consistency of rules across programmes and even within programmes themselves. In FP7, those bidding into JTIs (JUs) or PPPs for example are faced with application and financial rules that differ notably from FP7 (and indeed other JTIs). Many of the rules are very prescriptive, which means there are many cases where they can’t be applied, don’t make sense or are interpreted incorrectly. A 2-stage application procedure would be more attractive to participants and it should viable with improvements in the process. In the UK for example National programmes mostly use a 2-stage procedure and the cycle time from opening of a call to signing of contracts is less than 7 months. Smaller, fast-track single stage applications are completed in 3 months. Recently, a call for fast-track applications resulted in 1,200 proposals, these were evaluated (c5,500 evaluations) over a single weekend! The Commission must accept a higher level of risk in applying the financial regulations and simplify them accordingly with fewer rules, checks and measures.

C015 - 10.12.2009 DE

The Max Planck Society welcomes the opportunity to contribute to the review of the Financial Regulation and its Implementing Rules. 1.The award of grants The burden on the EU administration regarding Research Framework Programmes could be reduced by the grant of awards. The current practice whereby scientific contents are reviewed using a rather accountant-like approach on the basis of milestones is not likely to be any more successful in the future. In contrast, the aim should be on ex-post reviews of research results, which could, at the same time, be teamed with an incentive system for the exploitation of research results. Successfully evaluated projects should be rewarded with another, unconditional award of about 25 % of the initial grant. Through this or a similarly structured incentive system, it might be possible to draw up an exhaustive public balance of the output of EU-funded research in FP8. 2. The Commission's handling of financial files Question 11: How could the application procedure for both grants and contracts be further improved? The increasing electronic registration of organisations for EU funding can put strains on resources in larger organisations with decentralised structures. This is also true for MPS and its 80 institutes. As the European Commission has not yet put a uniform electronic register (PADOR or PDM may serve as examples) in place, a considerable amount of staff effort is sometimes needed. The EU administration should minimise the effort in the future by way of standardisation or by returning to a more decentralised registration. The excessive complexity of EU research funding seems to have reached levels where even "multipliers" have to increasingly rely on the EU expertise of other consultants. In particular, EU newcomers are discouraged by the structure of the funding programmes. EU project coordination by MPS researchers is still on the decrease, as the Commission has charged EU projects with too many administrative tasks. The grants awarded by the ERC show the way to go in the future. The ERC and its administration, currently being established, could serve as an example how EU administration and research can jointly reduce red tape and carry out administration. A mandatory paper standard should be imposed on all EU programmes, allowing merely three documents: 1. text of the call for proposals, 2. guide for proposals, evaluation, management and controlling/audit, and 3. work programme. All documents together should not exceed 200 printed pages (!). Simplification and the reduction of excessive paper-work have been promised and attempted for several framework programmes. As a result, these attempts have actually had very limited success in reducing red tape and paper warfare. The Max Planck Society strongly calls for the complete administrative regulations on applications for and management of EU projects to be adopted in due time before the start of the Eighth Framework Programme in order to avoid unnecessary bureaucracy on the sides of applicants and the EU administration. Against this background, it would be imperative to have the legislative decisions regarding the Eighth Framework Programme and the Rules for Participation discussed and adopted at the same time by both the Council and the Parliament. If no such organisational measure is taken, dissatisfaction about EU red tape is likely to persist in FP8.

C016 - 11.12.2009 IT

I am submitting this contribution as a citizen who has represented an SME (Small and Medium Enterprises), as managing director, in two Framework Project (FP) 6 projects (Eurreca and HiWate), and is now a beneficiary in two FP7 projects under negotiations. While FP6 and FP7 may provide huge benefits to SMEs, both directly and indirectly, the system of payments is sometimes very challenging. This applies particulary to SMEs that are small, independent and innovative, or start-ups. Delays in advance payments, which often occur, create serious cash-flow problems, and result in delays in work done and, hence, potentially lack of alignment with research done by large institutions. Major universities, public research entities and larger SMEs do not normally have cash flow concerns. The problem is more acute for those SMEs with employees (and not partners only) whose salaries cannot simply be postponed. The same problems are encountered by institutions from Eastern European countries, who cannot easily finance cashflow, or from institutions all over Europe that will not advance salary payments for non-permanent staff. Staff is lost as payments are withheld, mostly for unrelated reasons. Large institutions benefit from the current system, with large advance payments. Smaller entities such as SMEs would benefit from smaller advances, or even from regular monthly/three-monthly payments on work actually performed. Credit is difficult to access and many banks would not accept participation in a FP project as a guarantee; moreover, using debt is hazardous since timing of payments may become very uncertain as this depends on the approval of the project as a whole. FP7 improves in some ways the situation of FP6. Some improvements may be performed by individual consortia. Nevertheless, without guidelines from the EC, change, if any, will be slow. In summary, for SMEs participating in FP projects it would be generally better, in my opinion, if payments were made in a manner similar to the private sector: smaller, but regular payments when work is delivered, with advances when needed. Current policy favours SME participation to FP project, with benefits to SMEs and to Europe's economy. Financial rules should match that policy.

C017 - 11.12.2009 IT

Review of the financial regulation. Public Consultation. Answers Question 1: Are you sufficiently informed about upcoming calls for porposals in a timely manner? What improvements would you suggest? An updated mailing list. Question 2: should the rules be more flexible on co-finacing requirements taking into account the type of actions and project managers? How could in-kind contributions best be dealt with, while adhering to the non-profit principle? The new financial regulation for the EU should foresee that: - Contribution through voluntary work should be obligatorily recognised by the “authorising officers” of European programmes as in kind contribution in areas where volunteers are indispensable, such as Youth in Action, Lifelong Learning, Europe for Citizens, European Social Fund, Regional Funds. This should also be the case for reimbursement of actual costs incurred by volunteers during the contribution to the project. - These contributions through voluntary work should be recognised as eligible costs / and eligible income (contribution) to the project equal to monetary contributions / match funding.

- A model for calculation of the financial value to be placed on the contributions of volunteers to projects or activities within the framework of an operating grant shall be established in collaboration with the European networks of volunteer organisations.

C018 - 11.12.2009 DE

Kindly find below our comments on the public consultation concerning the review of the Financial Regulations of the EU (Ref.: http://ec.europa.eu/budget/consultations/FRconsult2009_de.htm). Our University has received EU-funding mainly through the EU-framework programmes for research (DG Research), the life long learning programmes and TEMPUS (DG education) and to a much lesser extend via public tenders and through other DGs. IN our experience the Financial Regulations of the EU are implemented differently by the different DGs. The following comments mainly focus on the Frameworkprogramme. Frage 1: Halten Sie sich für hinreichend und rechtzeitig informiert über kommende Ausschreibungen? Welche Verbesserungen würden Sie vorschlagen? Ja, ausreichend informiert. Die Informationen zur Ausschreibung sollten eher noch reduziert werden bzw. deutlicher in wichtige Ausschreibungsdokumente und weniger wichtige Hintergrundinformationen getrennt werden. Frage 2: Sollten die Bestimmungen zur Ko-finanzierung flexibler gestaltet werden, abhängig von der Art der Maßnahme und der das Vorhaben durchführenden Organisation? Wie könnte unter Beibehaltung des Grundsatzes der Gemeinnützigkeit mit Sachleistungen am besten umgegangen werden? Die Kofinanzierung stellt für nicht gewinnorientiert arbeitende Einrichtungen eine deutliche Hürde zur Beteiligung dar, da nur in sehr begrenztem Maße eigene Mittel zur Kofinanzierung zur Verfügung stehen. Hohe Kofinanzierungen gefährden häufig den Projekterfolg bzw. verhindern bereits eine Antragstellung. Zudem müssen EU-finanzierte Vorhaben von öffentlichen Einrichtungen i.d.R. durch öffentliche Mittel aus anderen Quellen kofinanziert werden. Die Höhe der Kofinanzierung sollte deshalb aus unserer Sicht bei öffentlichen Einrichtungen 10% nicht überschreiten. Frage 3: Sollte die Nutzung von Pauschalbeträgen und einer Finanzierung auf Grundlage von Pauschaltarifen eher die Norm als die Ausnahme sein? Sollten die Bestimmungen es zulassen, Kosten in Abhängigkeit davon zu übernehmen, ob die vereinbarten Ergebnisse erzielt wurden? Wenn ja, können Sie konkrete Beispiele nennen? Eher die Ausnahme. Wir plädieren dafür, wo immer möglich reale Kosten statt Pauschalen abzurechnen. Der administrative Aufwand ist bei pauschaler Abrechung ungleich höher. Da beim Mittelempfänger ohnehin leistungsbezogen abgerechnet werden muss, ist bei Pauschaler Mittelzuweisung sowohl eine hausinterne Abrechung als auch eine Abrechung gegenüber dem Mittelgeber zu erstellen. Dies führt zu erheblicher Doppelarbeit. Im Zuge der von der EU-Kommission forcierten Einführung der Vollkostenrechung an Hochschulen sind Pauschalbeträge kontraproduktiv. Lediglich bei den schwerer auf das jeweilige Projekt herunterzubrechenden Overheadkosten oder in der Individualförderung (u.B. MC Fellowships) kann eine Pauschalierung sinnvoll sein. Unsere Erfahrungen basieren insbesondere auf den unterschiedlichen Abrechungsmodi in der DG Research und der DG Education. Während in der DG Research im Regelfall Vollkosten abgerechnet werden, arbeitet die DG Education in vielen Programmen noch mit Pauschalen. Die Vollkostenabrechung zieht zwar einen höheren Kontrollaufwand ex post nach sich (z.B. durch Audits). Um Missbrauch zu verhindern ist bei Pauschalen aber eine erheblich größere Kontrolle ex ante nötig. Dies führt de facto zu extrem bürokratischen, unübersichtlichen Beantragungs- und Abrechungsverfahren mit einer Vielzahl von Regelungen, Ceilings und Budget Headings. Ferner sind Mittelempfänger bestrebt, reale Kosten mit den Pauschalen, Ceilings und Budgetheadings in Deckung zu bringen. Dies eröffnet zum einen der Verschwendung und zum anderen der "krativen" Interpretation von Regelungen Tür und Tor. Pauschalen, Ceilings und unterschiedliche Budget Headings sind deshalb auf ein Minimum zu begrenzen. Die in diesem Sinne im Forschungsrahmenprogramm vollzogenen schrittweisen Änderungen begrüßen wir ausdrücklich. Die Abrechung von Kosten in Abhängigkeit von der Erreichung der verinabrten Ergebnisse sehen wir kritisch. Bei öffentlichen tendern ist dies natürlich ein akzeptables Verfahren. Sobald es aber um Forschung, erst recht um Grundlagenforschung geht, halten wir dieses Verfahren für nicht haltbar. Das

Wesen von Forschung ist, dass auch in Richtungen geforscht werden muss, bei denen ein verwertbares Ergebnis nicht zwangsläufig voraussehbar ist. Der Aufwand ist den Forschungseinrichtungen ja in jedem Fall entstanden. Wir halten es für keine gute Idee, das Erfolgsrisiko von Forschung auf den Forschenden zu verlagern. Kosten in Abhängigkeit davon zu übernehmen, ob die vereinbarten Ergebnisse erzielt wurden, würde innovationsgetriebene Forschung deutlich behindern und kann nicht den allgemeinen politischen Zielen in dieser Hinsicht (Lisbon Strategy etc.) der EU entsprechen. Frage 4: Sollten die Bestimmungen sich strikt an den Grundsatz der Gemeinnützigkeit halten oder sollte es diesbezüglich eine gewisse Flexibilität geben? Können Sie Beispiele für bewährte Praktiken anderer öffentlicher Stellen nennen? Die Variabilität innerhalb bestimmter Geringfügigkeitsgrenzen würden wir begrüssen. Beispiele sind uns nicht bekannt. Frage 5: Welcher Wert wäre nach Ihrer Auffassung für Finanzhilfen von geringem und sehr geringem Wert angemessen? Wie bisher vorgesehen, keine Änderung nötig. Frage 6: Inwieweit und auf welche Weise könnten die Bestimmungen betreffend der als Betriebskostenzuschuss gewährten Finanzhilfen flexibler sein? Was ist Ihre Ansicht zur Dauer der Rahmenpartnerschaftsabkommen? Keine Angaben, wir empfangen keine Betriebskostenzuschüsse der EU. Frage 7: Können Sie konkrete Beispiele und Arten von Maßnahmen nennen, bei denen die strikte Begrenzung betreffend 'Finanzhilfen in Kaskaden' dazu geführt hat, dass das Ziel einer Maßnahme nicht erreicht werden konnte? Nein, die Begrenzung war bisher nicht problematisch. Es gab aber bereits Fälle, in denen die Weiterleitung bzw. Rückforderung von Mitteln von Dritten zu Problemen geführt hat. Grundsätzlich begrüßen wir die bisherige Regelung zur Gewährung von Finanzhilfen in Kaskaden und plädieren für die Beibehaltung in der bisherigen Form. Frage 8: Welche alternativen Lösungen könnten aufgrund Ihrer Erfahrung für die Vorfinanzierung vorgeschlagen werden, ohne dass die Kontrolle öffentlicher Gelder unterlaufen würde? Keine bzw. N/A Frage 9: Welche anderen Mechanismen sind denkbar, die einen angemessenen Schutz der Gemeinschaftsmittel sicherstellen? Keine bzw. N/A Frage 10: Glauben Sie aufgrund Ihrer Erfahrungen, dass die derzeitigen Schwellenwerte noch immer angemessen sind oder sollten diese erhöht werden? Wenn Sie aus Ihrer Sicht zu erhöhen sind, warum? Angemessen Frage 11: Wie könnte das Antragsverfahren für Finanzhilfen und öffentliche Auftragsvergabe weiter verbessert werden? Wir halten ein zweistufiges Verfahren für sinnvoller, in dem bereits weite Teile des Antrags zur ersten Stufe eingereicht werden, aber zu authentifizierende Dokumente erst in der zweiten Stufe nachgereicht werden. Grundsätzlich ist das Antragsverfahren erheblich zu beschleunigen. Sowohl die Vorlaufzeiten als auch die Bewilligung dauern immer noch zu lang.

C019 - 14.12.2009 UK

My comments are very simple and related to research funding by the EU. All methods of funding research should be done on the same basis for all the EU instruments - FP, INTEREG, EDF , Craft etc. This will cut down an enormous amount of bureaucracy. All of these funding methods should use 100% Full Economic Costs as the basis. On the AC model for FP7 we make about 60% of FEC thus incurring a 40% loss. No-one else funds the 40%. All the other methods have differing rules and differing EU contributions. EU grants would become much more prestigious and the increase in proposal and project quality would easily compensate for the reduction in the number of grants. The present tedious complexities and under funding only benefit the profession of accountancy. The EU gets very poor value for money indeed. Indeed most of the EU research money is wasted. In addition it is time to get much sharper and focus on delivery of results not accounting for every cent in minute detail.

C020 - 14.12.2009 FR

The European Telecommunications Standards Institute (ETSI) has the following comments to the public consultation on the Financial Regulations. As a recognised ESO we also have an FPA with the EC in relation to standardisation-related tasks for which we receive an Operating Grant and specific Action Grants for standardisation actions. Question 2: ETSI has been applying in kind contribution to assist in the co-financing of standardisation action grants and, in an era where the EC is also encouraging electronic working, etc, the rules about obtaining signatures at meetings seems to be less and less realistic. We are hoping that this issue can be addressed in a simple and non-bureaucratic manner. A general comment we have is more in relation to the to the application of the Financial Regulations by the EC and issues arising due to different interpretations of the Financial Regulations following the change of interlocutors. We raise the new proposal in France for the “procedure rescrit” where a question raised to an officer (e.g. tax office) has a 1 month limit for a reply and the reply (written) is a commitment from the administration with respect to the interpretation of the law. Such a procedure here would place all parties on a safer ground. Often the refusal of the financial services to discuss and clearly explain an issue (preferably in writing) can be problematic.

C021 - 14.12.2009 UK

Please find attached consultation response from the Directory of Social Change. DSC response to the EU Review of the Financial Regulation: Consultation on EU Grants and the Handling of Financial Files December 2009 www.dsc.org.uk About the Directory of Social Change The Directory of Social Change (DSC) has a vision of an independent voluntary sector at the heart of social change. We believe that the activities of charities and other voluntary organisations are crucial to the health of our society. Through our publications, courses and conferences, we come into contact with thousands of organisations each year. The majority are small to medium-sized, rely on volunteers, and are struggling constantly to maintain and improve the services that they provide. DSC is not a membership body. Our public commentary and the policy positions that we take are based on clear principles, and are informed by the contact that we have with these organisations. We also undertake campaigns on issues that affect them or which evolve out of our research. DSC views its role as that of a ‘concerned citizen’, acting as a champion for those smaller organisations whose needs may not be accounted for in public policy. We ask critical questions, often challenge the prevailing view, and try to promote debate on issues that we consider to be important. DSC’s work is mainly relevant to the UK voluntary sector. However, a main focus of its expertise concerns grant funding from charitable, corporate and statutory funders, including the European Union. General comments on the consultation Grant funding from the European Union is widely regarded by NGOs in the UK as the most complicated, most bureaucratic, and most difficult to manage when compared to other sources.1 We acknowledge that the issues are complex and that achieving change in an EU context is likely to be difficult and slow. The consultation is therefore welcome as it asks many of the right questions and suggests some answers which have potential to improve EU funding. We hope that this consultation is not a one-off but the beginning of a process of enhanced and sustained engagement with the organisations affected, which leads to real improvement in the funding process. Responses to Consultation Questions Question 1: Are you sufficiently informed about upcoming calls for proposals in a timely manner? What improvements would you suggest? Although calls for proposals are posted on the EU website, that in itself is not enough to ensure accessibility to the widest number of voluntary sector organisations. There are two key issues with the current approach. Firstly, it requires prospective applicants to come to the website speculatively to seek funding. This is an approach suited to well-resourced organisations which work in areas that may attract EU funds. However, many organisations for which EU funding may only occasionally be relevant will regularly miss out on calls unless they invest time an effort in monitoring updated information that in most cases will be useless to them. DSC's www.governmentfunding.org.uk website (and others) allow prospective applicants to associate themselves with key funding criteria so that they receive automatic updates via email when relevant calls are made. We would certainly encourage this approach.

1 See comments in Appendix A, from a survey in DSC’s electronic newsletter.

Secondly, the information presented is not relevant or accessible to all prospective audiences. Because information on calls or programmes is usually detailed and complex, an initial decision about relevance and eligibility is often difficult. It is for that reason that DSC and many other charitable and private sector organisations work constantly to summarise, distil and more effectively communicate funding opportunities to prospective applicants. On the positive side that gives wider access to clearer information on funding opportunities, but on the negative side it creates the possibility for misinterpretation, as well as creating a whole series of costs to the sector of analysing, translating, repackaging and communicating information. Clearer, better structured initial calls would be of significant benefit and should lead to ensure greater conformity in provision of information across member states, and greater awareness among the relevant NGO audiences within the states. Question 2: Should the rules be more flexible on co-financing requirements taking into account the type of actions and project managers? How could in-kind contributions best be dealt with, while adhering to the non-profit principle? Co-financing is a major obstacle to the accessibility of EU funds. This is tied into the first question above about access to up-to-date information, because if funding announcements are delayed or unpredictable it makes putting in place any required match funding much more difficult. Broadly speaking, any means to reduce the requirements around co-financing to include volunteer time or in-kind contributions would be welcome. The levels of co-financing required should also be reduced if possible. Question 3: Should the use of lump sums, flat rates become the norm rather than the exception? Should the rules allow for costs to be covered on the basis of expected outputs? If yes, can you provide concrete examples? Flat rates which contribute to the organisation’s overhead costs are a ‘one-size-fits-all’ approach which would not be recognised as best practice in the UK. They may make calculating costs easier for the funding body, but will inevitably mean that actual overhead costs for some projects are over-funded and for others are under-funded. However, they may be more advantageous than the current system. The greater use of ‘lump sums’, if accompanied by a much reduced level of bureaucracy involved in current processes, could gain greater efficiencies for the whole funding ‘system’, even if some of the money were actually over-committed or resulted in limited surpluses for funded organisations. The system of financial monitoring and reporting needs to be looked at holistically so that the minimum amount of information required is collected. Collecting all this information has a cost, both for the applicant and for the assessor and manager of the funds; if it is not used for any productive purpose that cost is simply waste in the system. Any information that is collected but not used for any real purpose should not be required. See for example Principles of Monitoring and Reporting by OTS http://www.cabinetoffice.gov.uk/media/216752/principles.pdf For examples of ‘best practice’, see www.fullcostrecovery.org.uk Question 4: Should the rules strictly adhere to the non-profit principle or should there be room for some flexibility in this matter? Do you have examples of good practices from other public authorities? Article 109 of the Financial Regulation states that ‘Grants may not have the purpose or effect of producing a profit for the beneficiary.’ This is very unclear when considered in a UK context, as the use of the term ‘profit’ does not accurately reflect the legal status of NGOs in the UK. For registered charities (approx 170,000 organisations), ‘surplus’ is allowed under law, but this must be reinvested into the work of the charity or held in reserve. Charitable funds cannot be expended on anything which is outside the charity’s objects.

For so-called ‘social enterprises’ such as Community Interest Companies, there are limitations to the amount of profit that can be distributed from trading activity, and this will normally be only for named persons who operate the organisation. It is not clear from this regulation whether legitimate overhead costs could be construed as ‘profits’, or whether this refers to any potential underspend against the grant. Greater flexibility around this rule would probably be welcomed, but greater clarity about what it actually means in practice for UK NGOs would probably need to be a precursor to any discussions. Question 5: What, in your view, would be the appropriate amount for low and very low value grants? The thresholds should be raised as high as possible, in order to reduce the burden and cost of bureaucracy on small organisations receiving relatively small amounts of money. We would suggest ≤ EUR 100,000 for ‘low value’ and ≤ EUR 25,000 for ‘very low value’, if only because the true administrative cost of managing a grant of EUR 5001 at the moment is likely to be out of proportion to the value of the grant itself. Question 6: How could the rules on operating grants be more flexible? In which way? What are your views on the duration of framework partnership agreements? The current rules are intended to ‘encourage beneficiaries to diversify and generate their own resources’. It needs to be borne in mind that generating income will simply not be feasible for many organisations; in fact this may be a reason that they may have to seek EU funding in the first place. Question 7: Can you give concrete examples and types of actions where the strict limitation on cascading grants became an obstacle for achieving the goal of your action? We cannot provide any concrete examples, but we do not understand why ‘the possibility for a beneficiary to redistribute part of its grant through subsidies to third parties is strictly limited.’ Surely a greater use of third parties in this fashion would be a way to make EU funding more accessible to smaller organisations, which do not have the capacity to apply for or manage EU funds? Question 8: From your experience, what alternative solutions could be proposed for prefinancing payments while safeguarding tax payers' money? Article 5a of the Financial Regulation states that: ‘Interest generated by pre-financing payments shall be assigned to the programme or the action concerned and deducted from the payment of the balance of the amounts due to the beneficiary.’ We do not understand why interest generated on payments made in advance of expenditure needs to be reimbursed to the EU budget. This seems to be excessively bureaucratic. It seems possible that the real cost of calculating and recording interest, and recalibrating payments accordingly could be greater than the interest accrued in many cases, unless the amount of money is very large or the period of time prior to expenditure is substantial. Why not instead limit the amount of time a pre-financing payment can be held by the beneficiary, which would mean that any interest generated would be minimal? Surely the greatest ‘risk to taxpayers’ money’ involves the unnecessary bureaucracy and administration that does not directly contribute to the outcomes that funding is supposed to achieve. Question 9: What mechanism, other than pre-financing guarantee, could be explored while ensuring adequate protection of community funds? We are not able to suggest any at this time.

Question 10: Based on your experience, do you think current thresholds are still adequate or should they be increased, and why? We are not able to provide a view at this time. Question 11: How could the application procedure for both grants and contracts be further improved? The suggestion of a ‘"label" system so that organisations that have successfully carried out a project and/or contract send only documents relevant to the new application’ should be vigorously pursued. There may be many practical obstacles to implementing such a system, but the ultimate efficiencies to be gained for all concerned would be worth it. The EU could as a starting point investigate the findings of the ‘lead funder’ project in the UK, which looked at setting up a similar system. This project took place several years ago, but details should be obtainable from the UK Office of the Third Sector at Cabinet Office. A two-stage process has definite advantages in terms of reduced paperwork for applicants and assessors for first-time applicants, but could lead to even longer timeframes and delays in the application process overall. Appendix A: Comments about EU funding received in DSC online survey In December 2007 DSC hosted an online survey about how different types of funders were perceived – based on a scale of 1-4, with 1 being the best and 4 the worst. In tune with the holidays, people were asked: What types of funders are the biggest Scrooges? (Scrooge being a character from Dickens who is miserly and unkind – the character whose opinion of Christmas is ‘bah humbug’). People were asked for their views on companies, trusts and foundations, central government and local government. In an oversight, we neglected to include the EU an option. However, we received a large number of comments about EU funding regardless, which are included below: European funding makes Central Government seem like just opening a piggy bank and tipping the money out!!!! You have missed out the most Scrooge-like category of all: EU funding (e.g. ESF [European Social Fund], Equal). That would score about 10 on your scale! By far the worst are regional government agencies and anything to do with Europe. ESF [European Social Fund] Funding is not Compact compliant and we the sector should take this issue to the highest court in Europe. Have you seen the LSC [Learning and Skills Council] ESF [European Social Fund] funding prospectus - Gak!!!!!! Please dont forget the European Social Fund, they along with the Home office are most in need of a visit from the Spirit of Christmas EU and RDA are top scrooges The main culprits are the LSC and European Funders European funding…is also particulalry onerous.

The European Union far outstrip any of the UK bodies and deserve first place as top scrooges Worst ever was European Refugee Fund, which have never paid contractual compensation for late payments. European is the WORST in terms of monitoring (partic Leader+) European funding isn't mentioned here and must surely rank fairly high on the 'make you account for every penny in an unreasonable way' EU funding would fall into category 4 [worst] Anybody who deals with European Regeneration funding makes the admin with accounting for grants ridiculously expensive

C022 - 14.12.2009 UK

I am writing to provide a response to question two of the public consultation on the Financial Regulation and to support the representations made by the European Volunteer Centre (CEV): The new financial regulation for the EU should foresee that: - Contribution through voluntary work be obligatorily recognised by the “authorising officers” of

European programmes as in kind contribution in areas where volunteers are indispensable, such as Youth in Action, Lifelong Learning, Europe for Citizens, European Social Fund, Regional Funds. This should also be the case for reimbursement of actual costs incurred by volunteers during the contribution to the project.

- These contributions through voluntary work be recognised as eligible costs / and eligible income

(contribution) to the project equal to monetary contributions / match funding. - A model for calculation of the financial value to be placed on the contributions of volunteers to

projects or activities within the framework of an operating grant shall be established in collaboration with the European networks of volunteer organisations.

In the Structural Funds programmes (ESF and ERDF) in Wales 2000-2006 and the current programmes for 2007-2013, volunteer time is recognised as making an in-kind match funding contribution to eligible project costs. The managing authority for the funds in Wales, the Welsh European Funding Office (WEFO) has produced guidance on in-kind match funding, which includes agreed notional costs that may be used as acceptable rates for voluntary work (see Annex 1): http://wales.gov.uk/docs/wefo/publications/applyingforfundingguidance/090521matchfundinginkinden.pdf. Alternatively the same rates for paid staff may be attached to voluntary workers who are performing a like-for-like function for the project. This practice enables NGOs in Wales, who use volunteers to help to deliver Structural Funds projects, to bring genuine added value to the programmes and I would encourage the Commission to consider making this practice standard across all EU funding programmes, for all Member States.

C023 - 15.12.2009 DE

Bitte finden Sie in der Anlage unseren Beitrag im Rahmen der Konsultation zur neuen Haushaltsordnung der EU ab 2014. Question # 1: As member in the Enterprise Europe Network we make use of the online publications of tenders and calls for proposals on the several programme-specific sites on the Europe-web - portal. Thus we keep ourselves and our clients informed and updated about upcoming opportunities. However, to be efficient, research must be done systematically. According to feedback from our clients, without expertise on accessing this information it is difficult to find orientation and to get information in a timely manner. Question # 2: Rules on co-financing should become more flexible in terms of allowing contributions in kind of third parties (including staff costs). Question # 3: a- Use of lump sums or flats rates could make sense in case of minor EC-contributions up to certain thresholds. In case of large amounts and as usually costs depend on the place and circumstances under which they occurred, we do not consider it as overall solution for usual project financing. For general use, the existing system of reporting the eligible direct costs in relation to the implementation of the project tasks should be kept. b- We see a need for revising the principles for calculating overhead flatrates for eligible indirect costs. Here, the formula should take into consideration the individual real overhead flat rates that differ from organisation to organisation but are countable according to internationally accepted auditing rules. Question # 4: In case private partners have the potential to provide expertise to realising project objectives, financing rules should become more flexible; in order to ensure that project expenses may be covered without losses. Here we would like to refer to section (b) of our answer to Question # 3, from our point of view the issue of insufficient overhead costs refunding is still a main obstacle for involvement of private partners in European projects. Financing rules for European projects should further follow the non-profit principle on the whole. Essential elements of these projects are sustainability and project partners are forced to develop appropriate business models for the time after, also with regard to possible profits. Nevertheless, essential item would be a fair handling of project expenses within any European measures. Question # 5: Up to 25.000, -- € for low value Up to 5.000,00 € for lowest value Question # 6: For long term cooperation, grants to operating costs are less bureaucratic and more efficient than a pure project financing. Therefore, we are in favour of a more flexible use of those (operating grants) options. The time period of framework contracts should be in line with project objectives and should ensure the legal and financial background of envisaged cooperation. Question # 7: No. Question # 8: The existing rules for pre-financing seem reasonable and applicable to us.

Question # 9: The existing rules guarantees for pre-financing seem to us reasonable and applicable, with one exception: Costs that occur for getting a bank guarantee must be eligible as direct costs. Allowing interests on bank accounts might be helpful to balance fees for bank guarantees. Question # 10: This question relates to rules for public procurement, for tendering contracts below the European thresholds national legislation should be binding. Question #11: We are not in favour of “labelling” organisations or institutions in terms of their capacities to participate in European projects. Instead, we would suggest, that before elaborating complex project proposals, there should be a pre-selection phase, in which interested parties can draft “concept notes” not longer than 4 pages. Only pre-selected concepts should be further developed to complete proposals, regardless if an organisation is a newcomer in European project work or already experienced, but given that it meets the participation criteria of the EC. Time frames for selection of projects are already very extended, so that for private companies it remains difficult to participate. Introducing a “Two-steps-process” where applicable should reduce (at least not extend) the whole procedure. Alternatively, it might help to develop the electronic submission tools and get the legal questions solved (authentication of documents), possibly on basis of agreements in programme committees and/or financial committees.

C024 - 15.12.2009 FI

Public consultation on the review of the Financial Regulation Thank you for the opportunity to comment on the Public Consultation on the review of the Financial Regulations. Please find here below the comments of the University of Helsinki, Research and Innovation services. Comment 1: Yes, the calls and the relevant documents are quite easy to find via Cordis (and Tenders Electronic), especially the e-mail alert system is a good new feature. However, as the calls are open for rather short time it would be good to have a roadmap for each theme published at the beginning of the FP. The EuroepAid calls for proposals site could be somewhat more user-friendly. Comment 2: The current rules are quite clear and flexible enough. However, the limit of 7% overhead in CSA projects should be increased to 20% as in other 100% funded schemes. There is a great deal of variation between the programmes as to the required minimum amount of co-financing (0-65%). This could be harmonised regardless of the programme. Comment 3: In general this should be possible for all the participants. Especially the usage of flat rates for indirect costs and lump sums for salaries should be maintained and expanded. Comment 4: In general the non-profit rule is understandable and fair, but in order to encourage SMEs to participate in projects it might be useful to expand the possibility for subcontracting also for the core work (at least in exceptional cases). Comment 5: The ceilings for low value grants could be raised to 50.000 euros, for very low value grants to 10.000 euros Comment 7: See the answer for the question 4. Also, in case of relatively loose scientific networks it should be possible to find a way for each member of the network to contribute to the project even if only one legal entity is a participant (as in the case of third parties). Comment 8: The prefinancing is essential for most of the participants, and the simplified prefinancing system in FP7 (compared to the one used in FP6) is a great reformation. However, interests should be regarded as the coordinator’s own contribution and they should not affect the EC funding. Comment 10: The current thresholds are adequate. Another possibility worth considering would be the application of the national thresholds. Comment 11: We strongly encourage the Commission to introduce “the label system”. It is also crucial that only one e-tool will be used for all the EU research funding instruments, both in proposal and in implementation phase. It should be possible to use the PIC code also for other EU-funded programmes and tenders. The 2-step grant selection process is generally quite useful, but some call topics (as well as small projects) may require faster process.

C025 - 15.12.2009 LU

I am not sure that I count as a private citizen, but this is a serious suggestion for the FR revision: In certain authorised circumstances, allow contracts to be signed with more than 1 economic provider for the same services, in order to mitigate the risk of monopoly situations. The awarding authority signing the contract would be committed to a fair division of the work awarded over the lifetime of the contract, with a variation of e.g. 2% or another low variation, except in the case that orders were explicitly declined by one provider.

C026 - 16.12.2009 IT

1/5

Herein attached our contribution concerning the EU Consultation on the Review of the financial regulation. Moreover, as partner of Enterprise Europe Network, we translated the Consultation in Italian version, than we promoted it by a mailing activity addressed to firms, entrepreneurs associations and local organizations, and we diffused a press release. But at the moment we have received only a contribution from an enterprise of our client that we have translated in English and that you can find herein attached too.

2/5

““CCoonnssuullttaazziioonnee ssuullllaa rreevviissiioonnee ddeellllaa RReeggoollaammeennttaazziioonnee FFiinnaannzziiaarriiaa””

CCoonnssuullttaazziioonnee pprroommoossssaa ddaallllaa CCoommmmiissssiioonnee EEuurrooppeeaa

-- DDiirreezziioonnee GGeenneerraallee ppeerr iill BBiillaanncciioo --

UUnniioonnccaammeerree CCaallaabbrriiaa

DDeesskk EEnntteerrpprriissee EEuurrooppee NNeettwwoorrkk

PPrreesseennttaazziioonnee Unioncamere Calabria è un nodo di ENTERPRISE EUROPE NETWORK (EEN), una rete di sportelli a supporto delle PMI, nata nel 2008 nell’ambito del programma CIP (il Programma Quadro per l’Innovazione e la Competitività 2007-2013) dalla volontà dell’Unione Europea per fornire alle imprese ed alle Organizzazioni pubbliche idonei strumenti di supporto alla loro competitività, in particolare nell’ambito dei processi di internazionalizzazione, del trasferimento tecnologico e dell’innovazione.

Tale rete conta oltre 500 organizzazioni presenti in circa 40 Paesi e permette, pertanto, di sfruttare in maniera sinergica le esperienze dei singoli partner, in modo da offrire una REALE e CONCRETA assistenza alle imprese ed alle Organizzazioni pubbliche per accrescere il proprio business, sfruttando le opportunità derivanti dal Mercato Unico.

Unioncamere Calabria- desk Enterprise Europe Network si occupa anche di svolgere il ruolo importante di canale di dialogo fra gli imprenditori/cittadini/organizzazioni e le Istituzioni dell’Unione Europea sulle future politiche ed iniziative europee nonché sulla formazione della legislazione comunitaria, incoraggiando la partecipazione ad apposite consultazioni e a panel promossi dall’Unione Europea.

L’argomento della consultazione presentata in questo documento, inteso quale revisione delle regole finanziare per i programmi finanziati con il bilancio dell'Unione Europea rappresenta una questione di indubbio interesse nell’attuale contesto di crisi economica e finanziaria globale, nonché delle fondamentali questioni sulle sovvenzioni europee.

Per tale motivo, Unioncamere Calabria invita i soggetti portatori di interesse a parteciparvi esprimendo le proprie opinioni e manifestando le problematiche riscontrate.

Il target group di riferimento è costituito da tutti i cittadini e dalle organizzazioni, con particolare riguardo per tutte le parti interessate (banche, addetti ai programmi comunitari,Enti Pubblici,categorie professionali, contribuenti: in pratica, tutti i cittadini dell’UE) sul futuro della gestione del credito e delle sovvenzioni in Europa e su come introdurre miglioramenti concreti nel settore.

Nella sua struttura, il documento si presenta nella duplice forma di strumento informativo (in quanto riassume ed anticipa le principali novità introdotte e/o da introdurre) e di strumento di coinvolgimento e comprensione dei fabbisogni e delle opinioni dei soggetti coinvolti dalla normativa.

Esso assolve, pertanto, alla funzione di indirizzo delle politiche europee, permettendo ai partecipanti di contribuire fattivamente al processo decisionale europeo.

Il desk di Unioncamere Calabria supporterà coloro i quali ne avessero necessità nel reperimento della documentazione di riferimento enell’eventuale traduzione dei contributi.

Non Vi resta che fare sentire la Vostra Voce in Europa contribuendo attivamente alla definizione delle politiche europee: è un’occasione per partecipare attivamente alla costruzione del Vostro futuro!!!!

Unioncamere Calabria

Desk Enterprise Europe Network

3/5

Domanda 1: NO, le informazioni sono spesso poco organizzate e in lingua inglese. Sarebbe opportuno adottare migliori criteri di selezione. Ad esempio: zona, settore.... NO, information are often poorly organized and in English. It should be appropriate to adopt better selection criteria. For example: area, fields,…. Domanda 2: Si, si dovrebbe rendere le regole più flessibili. Yes. It should be necessary to have more flexible rules Domanda 3 NO Domanda 4: No, le regole dovrebbero permettere maggiore flessibilità. No, the rules should allow more flexibility

Domanda 5: Euro 200,000 Domanda 6: Dovrebbero essere delle sovvenzioni da erogare in seguito alla presentazione di progetti di investimento. The grants should be distributed following the presentation of an investment project. Domanda 7: NO Domanda 8: Si potrebbero chiedere delle fideiussioni assicurative e prevedere dei controlli 'on site' a sorpresa. It could be foreseen the request of an insurance guaranty and unexpected monitoring visits “on site” Domanda 10: Sono adeguate. They are adequate Domanda 11: Le maggiori procedure di controllo potrebbero essere spostate in fase di redicontazione. The main monitoring procedures could be postponed in the reporting step.

4/5

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Question 1: As Enterprise Europe Network partner, we can say that stakeholders have sometimes difficult to be sufficiently informed about the upcoming call for proposals because the information is fragmented and difficult to be found and understood. In general, the way of knowledge and the access to the calls for proposals is not always clear and people can’t understand the appropriate message. Moreover the calls for proposals should also be published in other languages, the English, French and German versions are not sufficient, because many people doesn’t speak other languages. Question 2: Very often the co-financing is too high to be covered. The current co-financing suggests a more flexible way and adhering to the non-profit principle could be a good decision. As we know, the human resources represent part of the intangible assets of an enterprise; moreover the art. 2295 co. 1, n. 6) of c.c. disposes the partnership agreement must specify the contribution of each partner the value attributed to them and the way of assessment and therefore the contribution can take any form economically significant (it could be possible to refer to the collective labour agreement or to establish some parameters) For these reasons the possibility to include contributions in kind like volunteer work as part of the project manager's own contribution could be a good way to motivate the participation of the small entrepreneurs. Question 3: Yes, It should become the norm. The expected outputs could be the basis taking into account the concrete objectives achieved in the project implemented. For example: if a concrete objective is achieved as the creation of new jobs, should be found a way of avoiding the current complex accounting of costs introducing the use of lump sums, flat rates etc. Question 4: There is room for more flexibility about the way how the non-profit principle is carried out. Question 5: The appropriate amount should be for low value grants <EUR 45,000 and for very low <EUR 10,000. Question 6: A gradual decrease of 'operating' grants is well favored, because it can help to diversify and generate own resources associated with a longer duration of framework partnership agreements. It is the right path for an appropriate balance between the need for financial stability and the risk of excessive reliance on EU funds. Question 7: No concrete examples and types of actions about the limitation on cascading grants affected us for achieving the goal of our action.

5/5

Question 8: A better cooperation with the local banks is necessary, because they should facilitate the local economic development not to be an obstacle to the credit access like it is today. People that are interested in access in EU Calls for proposals want to have an help for the development of their activities but some entrepreneurs are afraid to get stuck with red tape and in consequence eventually solvency problems (that as we know are typical in the first periods). Question 9: The pre-financing guarantee amount could be decreased. This is a real disadvantage for the beneficiary in applying for EU funds. Maybe an insurance guaranty could be an alternative. Question 10: Yes adequate. Question 11: The idea to continue reducing paperwork should be shared by everybody as well the introduction of a "label" system so that organizations that have successfully carried out a project and/or contract send only documents relevant to the new application.

C027 - 16.12.2009 DE

Beitrag der DIALOGIK gemeinnuetzige Gesellschaft fuer Kommunikations- und Kooperationsforschung mbH, Lerchenstr. 22, 70176 Stuttgart, Deutschland Ein wichtiges Ziel der europäischen Forschungsförderung ist es, die Teilnahme von kleinen und mittleren Unternehmen, kleinere Forschungsunternehmungen eingeschlossen, zu stützen und zu fördern. DIALOGIK, gemeinnützige Gesellschaft für Kommunikations- und Kooperationsforschung mbH, die sich der Erforschung diskursiver Methoden der Kommunikation und Verständigung in den Politikbereichen Umwelt, Technik, Gesundheit und Verbraucherschutz widmet, ist ein kleineres, nicht auf Gewinnerzielung ausgerichtetes Forschungsunternehmen. Die breite Teilnahme von solchen und anderen KMUs ist eine wesentliche Voraussetzung dafür, dass das Forschungspotential in Europa für die Analyse und Bearbeitung der mannigfaltigen Herausforderungen im 21. Jahrhundert in vollem Umfang genutzt werden kann. Die Teilnahme von kleineren Forschungs-KMUs, vor allem von denen, die wie unser Forschungsunternehmen DIALOGIK gemeinnützig sind, ist aber nur dann möglich, wenn die Forschungsförderung sowohl direkte wie auch indirekte Kosten der Forschungsarbeit in ausreichendem Maße abdeckt. Da die kleineren Unternehmungen in der Regel nur über eine geringfügige Infrastruktur verfügen und entsprechend nur geringe Ausgaben im Bereich der indirekten Kosten haben, steht ihnen – im Unterschied zu größeren Unternehmen – nicht die Möglichkeit zur Verfügung, über die Einrechnung der anteiligen Kosten eines weiten Teils der zur Verfügung stehenden Infrastruktur (z.B. Mehrebenenverwaltung, verschiedene Abteilungen, etc.) so viele indirekte Kosten geltend zu machen, dass eine nahezu volle Kostendeckung bei einer 75%igen oder 50%igen Förderung der direkten Kosten erreicht werden kann. Damit auch kleinere Forschungsunternehmen – vor allem diejenigen, die nicht-profitorientiert arbeiten – ihre oft hochspezialisierte und in hohem Maße nachgefragte Expertise in die europäische Forschung einbringen können, ist es zwingend notwendig, dass die volle Förderung der direkten Kosten und eine Gesamtkostenpauschale von mindestens 20% Anteil an den direkten Kosten erhalten bleibt. Zentral ist dabei, dass durch Neukonzipierungen der Förderquote für die indirekten Kosten keine Lücken bei der Finanzierung der direkten Kosten entstehen. Unter dem 7. Forschungsrahmenprogramm erschwert eine solche Lücke die Forschungsarbeit derjenigen, die den Übergangspauschalsatz von 60% für indirekte Kosten („special transitional flat rate“) nutzen, erheblich: Da Unteraufträge aus der Overhead-Finanzierung ausgenommen sind, müssen hier 25% der Kosten für Unteraufträge (bei einer 75%igen Förderung der direkten Kosten) aus Eigenmitteln erbracht werden, die aber in der Regel – vor allem bei gemeinnützigen Instituten wie DIALOGIK – nur in geringem Maße vorhanden sind und für eine solche Ausgabe nicht bereit gestellt werden können. Praktisch heißt das, dass DIALOGIK seit Einführung des 7. FRP bereits wiederholt Angebote für eine Forschungskooperation ablehnen musste, weil zur Durchführung der Forschungsarbeit Unteraufträge zwingend erforderlich waren (oft Serviceleistungen von Meinungsforschungsinstituten), die Finanzierungslücke aber nicht mit Eigenmitteln gestopft werden konnte. Kurz: DIALOGIK ruft die Europäische Kommission mit allem Nachdruck dazu auf, die Teilnahme von kleineren Forschungsunternehmungen an der Europäischen Forschungsförderung auch in Zukunft dadurch zu gewährleisten, dass die Forschungsförderung die direkten Kosten in vollem Umfang und die indirekten Kosten über einen Mindestpauschalsatz von 20% auf die direkten Kosten deckt. Die Lücke bei der Finanzierung der Unteraufträge unter dem Übergangspauschalsatz von 60% bei 75%iger Förderung der direkten Kosten sollte so schnell wie möglich, aber spätestens unter dem 8. Forschungsrahmenprogramm geschlossen werden. DIALOGIK URL: http://www.dialogik-expert.de

C028 - 16.12.2009 BE

Please find attached the Deloitte’s contribution on the review of the Financial Regulation. Deloitte. www.deloitte.com INFORMATION ABOUT GRANT OPPORTUNITIES

We have noticed that, although the information about grant opportunities is available on the EU websites such as www.ec.europa.eu/grants/index_en.htm and www.eugrants.org , the awareness level may vary amongst the Member States. More specifically, potential candidates, in the various Member States, first consult websites in their own language, as the EU websites for grants are only available in English, German and French. Consequently, potential candidates are confronted with a variety of information, sometimes from the public authorities, sometimes from a commercial source. The information is often limited to a specific sector. Sometimes this information is not for free, or is subject to a registration process for commercial purposes. We would recommend that the EU invites each Member State to set up a national platform of information about grant incentives, in the national languages, including all grant sectors and categories as reported on the EU site www.ec.europa.eu/grants/index_en.htm. GRANT APPLICATION AND GRANT AUDIT SUPPORTING GUIDELINES

Managers of organizations in receipt of EU grants frequently point out the complexity of the regulations as well as the relative lack of supporting material or/ and assistance to facilitate and guide their operations in relation with EU grants. This underlines the desirability of simplification and guidance for better implementation of the related regulations. In addition, the rationale for changing or adapting regulations during the relevant period is often not clearly explained to beneficiaries. As a result, unnecessary administrative burden and legal uncertainty derive from misunderstandings and room for interpretation of the regulations. Moreover, it reinforces the public image that the Commission transfers the weight of administrative and financial management to beneficiaries. We would therefore recommend the development of formal supporting guidelines and assistance framework. Guidelines would provide the Member States and/or beneficiaries with useful information on both horizontal and vertical themes. By horizontal themes, we mean namely:

• Basic grant principles • Grant agreement with the final beneficiary • Budget of a project • Eligibility period • Record of expenditure and audit trail • Territorial scope • Income, non-profit principle and calculation of the final EC contribution • Partnership rules

By vertical themes, we mean namely:

• Staff costs • Travel and subsistence costs • Equipment • Real Estate • Consumables, supplies, General services • Subcontracting • Costs deriving directly from requirements linked to co –financing • Expert fees • Specific expenses in relation to target groups

• Indirect eligible costs • Costs covered by assigned income

Each of these themes would be addressed following a standard pattern:

• Translation of the regulations into ‘operational’ language; • Best practice and recommendations for implementation; • Exceptions and specific points of attention / risk areas; • Frequently asked questions; • ...

AUDIT OF GRANT BENEFICIARIES

Deloitte has been involved in the audit of grant beneficiaries since many years. We want to highlight in the following paragraphs some of the lessons learned during our missions.

TOLERABLE RISK THRESHOLD The adoption of the new Financial Regulation in 2002 resulted in a radical change in the role of (sub) delegated authorising officers, implying increased responsibility in terms of financial management and related risks. Authorising officers are liable to pay compensation in case of action or failure to act which is intentional or grossly negligent. In accordance with the Financial Regulation and with sound financial management principles, Authorising Officers implement internal control procedures which vary depending on the risk and complexity of operations. In order to find the right balance between flexibility and regularity in managing operations, we would recommend introducing a tolerable risk threshold. This would have a positive impact on the Commission, since it would avoid that disproportionate resources are invested in an ultimately impossible effort to reach zero risk, something which reinforces the negative and bureaucratic image of the Commission.

RISK ASSESSMENTS

In our experience, audit procedures required to be performed by auditors were similar across all audits within a particular programme, regardless of the specificities of the context of the audit (total amount of grants/subsidies/premiums, type, structure and size of the organizations audited, type of grants/subsidies/premiums and complexity of related calculation scheme, , perceived level of control, claims...etc). We would recommend performing preliminary ‘risk’ assessments of the various organizations/ auditees and related grant programmes in order to better define the scope and priorities of the audit. This would improve the overall efficiency of the audit and control activities and simultaneously improve the use and allocation of audit resources (e.g. definition of different types of controls to be performed according to the results of the preliminary risk assessment: Focused audit / Standard audit / Simplified audit / Desk review...). APPLICATION CONTROLS

In the situation where grants are managed at the Member State level through National Paying Agencies, one of the overall objectives of the audits is typically to verify whether Paying Agencies’ information systems, as designed and operated, offer a secure environment, in order to ensure the proper administration of, accounting for, and reporting of EU grants operations, receipts and expenditure. As required by the applicable legal basis (namely , for Agricultural funds, Commission

Regulation (EC) No 885/2006 and the associated Paying Agency Information Systems Security Guidelines AGRI/2004/60334/01/00), the scope of the audits currently only covers certain key IT General Control processes, with a focus on information security.

We recommend that the EU consider performing more in-depth testing of application controls as part of these audits, and in particular in the Paying Agencies where deficiencies have been noted in this area. Application controls inappropriately designed or operated can create risks for the authorisation, completeness and/or accuracy of Paying Agencies’ operations, receipts and expenditure.

C029 - 16.12.2009 IT

Please find herewith my contribution to the discussion and ongoing consultation on the review of financial regulations. In terms of revising Financial Regulations, I believe that three areas would need to be addressed: 1. Financial Guarantees 2. Eligible expenses by Partners 3. Consequences of Partner default 1. Financial Guarantees a) What "financial" problems do you have as civil society organization receiving European funding? The Financial guarantees are a heavy burden for applicants b) How this problem relates to the present financial regulation - if possible specify the relevant rule in the FR? c) Can you give a concrete example of how it affects your work? When we were asked for a guarantee for prepayment, the banks had difficulties in giving this because of the potentially unlimited duration of the requested guarantee, and were only ready to give such a guarantee on the basis of personal guarantees by Members/Officers d) What would you propose to amend the new text of the financial regulation? Can you refer to any alternative good practice? I believe the Financial guarantees should be waived in the case of grants below a level of € 150.000,00 or if this were impossible limited to a fraction of the sums received as advance payments (ex: 30%?) so as to make them more easily acceptable to the Banks and to would-be guarantors 2. Eligible expenses by Partners a) What "financial" problems do you have as civil society organization receiving European funding? There seems to be no consistency in this respect in the rules applying to various calls for proposals b) How this problem relates to the present financial regulation - if possible specify the relevant rule in the FR? c) Can you give a concrete example of how it affects your work? In the Call for proposals EACEA 11/09 it is said that to be eligible for this call, costs must be - Really incurred by the beneficiary, recorded in his accounts according to applicable accounting rules, and comply with the declaration requirements of applicable tax and social legislation; In the Call for Proposals JLS/2008/FRC-1 by DG Justice for the specific programme FUNDAMENTAL RIGHTS AND CITIZENSHIP" (2007-2013) it is said that for this call - The Partners participate in the design and implementation of the action, and the costs they incur are eligible in the same way as those incurred by the applicant. d) What would you propose to amend the new text of the financial regulation? Can you refer to any alternative good practice? The formulation used by DG Justice seems preferable, as it allows for the “seed money” nature of the funding granted by the EC to be taken into account 3. Consequences of Partner default a) What "financial" problems do you have as civil society organization receiving European funding? In the present difficult economic context, the default by a Partner is by no means impossible, and could mean that the applicant runs the risk of having the EU Grant reduced in proportion with the missing co-financing, b) How this problem relates to the present financial regulation - if possible specify the relevant rule in the FR? c) Can you give a concrete example of how it affects your work? If a Partner were to go out of business, there might be a shortfall in co-financing or in the carrying out of certain activities foreseen in the course of the year. In such an event, the Commission in order to maintain the % of funding it has agreed to cover might reduce the overall amount of the grant, thus putting the applicant in severe financial difficulties. The applicant would thus be punished twice, once by the partner’s going out of business and once through the reduction in the EU funding. d) What would you propose to amend the new text of the financial regulation? Can you refer to any alternative good practice? If the default of a Partner is proven in clear and demonstrable legal terms, the Commission should accept to vary the % of expenses covered by its Grant, leaving the total amount of the grant unchanged The Intercultural Communication and Leadership School - www.intercivilization.net

C030 - 17.12.2009 SE

I work at the Swedish University of Agricultural Sciences (SLU). My main occupation is two-fold: 1) as financial officer in a large FP7 project (ICON 211400) 2) as financial consultant for SLU researchers in International grant applications and administration. In my first role I feel very pleased with both the rules and the support we get from our Scientific and Financial officers. The rules are easy to understand and to implement, except for one area - when including non-EU members from for instance US and Canada. The formal requests for documentation and registration/validation were very hard for these partners to understand and accept. There is need for both simplification and clarification. In my second role I have an over-all responsibility at SLU/Grants Office for supporting in the area of ERDF funding. This is quite another matter. SLU has four main campuses, from the south of Sweden to the north. Thus, I am involved in most of the different regional ERDF programs. As I understand it, there is a general set of rules that all such funds should apply. Still, each secretariat makes its own interpretations, guidelines, application and report forms, time sheets.... you name it. There are a few set of rules that are particularly difficult and time-consuming to apply. Outstanding in this group are the rules on Indirect costs (OH). The time and efforts spent on motivating and clarifying these costs is unprecedented. I dear say it continuously causes health problems among our administrators. I also dear to anticipate that ERDF program administrators (incl first level control persons) feel a constant un-satisfaction when these matters are handled. In FP7, a simple flat rate model (60%) is offers as an alternative to a model for full costing. This flat rate model is very simple to implement and saves us and EC administrators a huge amount of work. In ERDF programs we have to spend enormous amount of time to motivate a much lower percentage (25%), and this is just an upper limit, not a flat rate. Swedish universities are right now implementing a joint model for calculating and reporting indirect costs. These calculations show unanimously that real levels of indirect costs are well over 40, often over 50%. It is thus very costly for Swedish universities to engage in projects with ERDF funding. The true level of co-funding from ERDF programs is often far less than what is formally offered. Together with other Swedish universities I have taken the initiative to talk with Tillväxtverket, one of the governmental Swedish authorities that have national responsibility for ERDF programs. We have had our first talks and were very positively received. We will together suggest that all Swedish universities are clustered and treated equally, and that a simplification on the matter of OH calculation is imposed in the system. There are several other areas where an un-proportional amount of work is needed to please the system. Rules regarding calculation of personnel costs are unclear and varying, as are the rules for calculating cost for office rent. The multitudes of different forms are confusing and very time consuming. The level of auditing, and how different auditors judge eligibility is also confusing. It is my firm believes that if these problems are not solved in the near future, Swedish, and other, universities will start to withdraw from engaging in ERDF funding. Not only because it is costly, but also, and perhaps primarily, because administrative personnel refuses to deal with these very frustrating tasks. If it would be of interest, I will be very happy to elaborate more on these very important matters, and also engage my national network of financial officers at the large Swedish universities.

C031 - 18.12.2009 IT

Review of the financial regulation. Public Consultation. Other Answers Question 3: Should the use of lump sums, flat rates become the norm rather than the exception? Should the rules allow for costs to be covered on the basis of expected outputs? If yes, can you provide concrete examples? Des quotas fixes et des sommes forfaitaires devraient devenir une pratique courante. La Commission devrait identifier des modèles de vérification et évaluer des résultats intermédiaires et finaux. Actuellement, par contre, le contrôle d’un projet est presque exclusivement administratif. Une méthode de contrôle des résultats et de l’efficacité, ainsi que de l’efficience du projet, aiderait à formuler et à développer des projets qui respectent réellement les critères de cohérence, de pertinence et d’efficacité. Question 11: How could the application procedure for both grants and contracts be further improved? Fixer un seuil au-delà duquel les projets devraient être sélectionnés en deux phases. Dans les projets où la sélection se fait en deux phases, on pourrait fixer un quota à destiner au financement de l’élaboration du projet exécutif (2ème phase) dans le cas d’admission du projet au financement. Souvent en effet l’élaboration du projet n’est pas considérée comme comportant des frais admissibles parce que ce travail est fait avant la signature de la convention. Mais comment formuler des projets de qualité pour les associations non-profit, si on ne prévoit pas le payement de l’élaboration du projet ? ou si on ne prévoit pas que l’élaboration du projet puisse représenter une somme fixe de co-financement en nature ? ASSOCIAZIONE CATTOLICA INTERNAZIONALE AL SERVIZIO DELLA GIOVANE – ACISJF – PROTEZIONE DELLA GIOVANE FEDERAZIONE NAZIONALE 00184 ROMA – VIA URBANA 158

C032 - 18.12.2009 FI

1

REVIEW OF THE FINANCIAL REGULATION – Public Consultation 22.12.2009

Liisa Ewart, Legal & Financial NCP I, Tekes, Finland

Outi Lindqvist, Legal & Financial NCP II, The Finnish Secretariat for EU R&D, Finland

Two major topics (not exhaustive) and related questions:

1. The award of grants:

Question 1: Are you sufficiently informed about upcoming calls for proposals in a timely manner? What improvements would you suggest?

Once the call is published, the related documents are adequately available on Cordis, although the information package is somewhat difficult to access behind the small plus-sign.

Preliminary versions of work programmes should be more readily available during the drafting phase. For example, the documents could be posted on the internet with a draft-disclaimer. Currently work programmes are only published three months before call closing, while proper proposal preparation can take up to six months. All organizations do not currently have equal access to draft work programmes, and in that sense are not in the same situation vis-à-vis submitting an application.

If work programmes were posted on the internet during draft phase, the scientific community and industry alike could provide input, providing an opportunity for the Commission to obtain feedback and the possibility for the public to contribute.

Finally, work programmes should include an indicative list of next year’s topics.

Question 2: should the rules be more flexible on co-financing requirements taking into account the type of actions and project managers? How could in-kind contributions best be dealt with, while adhering to the non-profit principle?

This is an issue particularly for SMEs. SMEs often have a key role in projects as they can provide necessary equipment or technology for the consortium. However, as a partner only a part of the total cost will be covered, and the SME might have to ponder participating as a subcontractor instead. However, as a subcontractor the organization is not involved in the project to the same degree as partners, and does not necessarily benefit from the project to the same degree either (except financially).

An auditor could do an assessment of the value of in-kind benefits that could then be used in the project.

Question 3: Should the use of lump sums, flat rates become the norm rather than the exception? Should the rules allow for costs to be covered on the basis of expected outputs? If yes, can you provide concrete examples?

Lump sums and flat rates should be more of an exception than the rule. For instance in ICPC countries, where participants may not have a sufficient accounting system, lump sums make sense. However, for organizations with accurate accounting systems real costs are easier to report.

2

For instance, we are not aware that Finnish organizations are planning to use the new lump sums for travel. They require quite a bit of manual calculation (depending on time of travel, for instance). The employee who travels will still be reimbursed according to national rates (otherwise, should the employee receive more than national rates, the extra amount would be income to the employee. This would create an additional withholding tax burden for the employer). The organization would then report costs according to flat rates. Such parallel systems generate extra bureaucracy for the participating organization’s administration.

Question 4: Should the rules strictly adhere to the non-profit principle or should there be room for some flexibility in this matter? Do you have examples of good practices from other public authorities?

Question 5: What, in your view, would be the appropriate amount for low and very low value grants?

In our opinion, small grants do not have an adverse effect on competition. Thus, the current limits could be at least doubled.

The bureaucracy of issuing small grants should also be minimized (i.e. re-evaluate whether auditor statements and risk management plans are really necessary).

Question 6: How could the rules on operating grants be more flexible? In which way? What are your views on the duration of framework partnership agreements?

Question 7: Can you give concrete examples and types of actions where the strict limitation on cascading grants became an obstacle for achieving the goal of your action?

Question 8: From your experience, what alternative solutions could be proposed for prefinancing payments while safeguarding tax payers’ money?

If prefinancing generates interest, the money belongs to the Commission and should be considered as a part of the next payment.

However, there should not be a requirement for the Coordinator to deposit prefinancing in an interest bearing bank account. This is an example of the Commission reinterpreting existing rules.

The requirement to have an interest bearing bank account causes undue burden on the participants, and increases bureaucracy to such a degree that it is questionable whether more money will be brought into scientific funding.

The role of the guarantee fund in FP7 is to safeguard taxpayers’ money. The fund has done very well, generating approximately 4% interest. As of October it had not been used once to bail out a bankrupt organization.

In fact, the fund is doing so well that there is discussion about reducing the 5% of prefinancing put into it. We would suggest that the Commission keep the guarantee fund contribution at 5%, and relinquish the requirement for interest bearing bank accounts.

As a further comment, the Commission began to require interest bearing bank accounts without instructions on how to calculate interest. It is often not possible to open a separate account for each project: SMEs may not be able to because of the associated costs. Large organizations do not want to suddenly have tens of new accounts. The fact that many coordination projects use the same account in no way jeopardizes the ability to identify which actual funds belong to which project. However, interest on a bank account is frequently determined by the lowest balance of the month. How is the interest calculated between different projects in this case?

3

Despite indications to the contrary, bank guarantees are still used in FP7, although they are “voluntary”. The guarantee fund should also take care of the requirement to obtain voluntary bank guarantees.

Question 9: What mechanism, other than pre-financing guarantee, could be explored while ensuring adequate protection of community funds?

Question 10: Based on your experience, do you think current thresholds are still adequate or should they be increased, and why?

Question 11: How could the application procedure for both grants and contracts be further improved?

It sometimes appears that the Commission has a right to be flexible to a greater degree than FP7 participants. One example of this is the reinterpretation of the rules that require interest bearing bank accounts.

Another example is the reinterpretation of the periodic reporting template. The template was originally published, we believe, as a good effort to simplify and streamline FP7 reporting. However, reporting according to the template was not sufficient, as Project Officers began to require considerably more detailed data. The Commission then explained that the template only outlines the minimum reporting requirements; an issue that had not been mentioned anywhere before. In our view, there was a fine effort to simplify project administration that unfortunately did not materialize.

The concern here is that the Commission published rules and documents which bind the participants, but to which the Commission itself does not have to adhere. We would like to see more consistency that would build trust in the participants and encourage participation in FP7.

C033 - 17.12.2009 HU

Business Development Organization (Hungary) - Information about the grant opportunities: The information about the proposals to applications are

satisfactory but it is problematic that after the invitations to applications the conductors are frequently making changes (in application guides, forms, etc.), which are not always taken care of by the applicants (further complicating the otherwise also complicated application system) and it leads in many cases to the rejection of the tender. We strongly recommend that after the invitation to tender there will be no possibility for the conductors to make changes about the invitations.

- Non-profit regulations: The non-profit regulations are contradict the principle of sustainability. Beside the strict regulations (percentage, separated bank account, endorsement to the project etc.) the EU should provide more flexibility in this question.

- It was mentioned previously that the tenders are not harmonized strategically. They are not publicated according to plans so the applicants are not able to schedule. Recommendation: Purposefulness at a national level, keeping the deadlines in connection with the invitations to tenders as well as granting longer deadlines for the applications to tenders than the current ones.

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Individual Entrepreneur (Hungary) - The application packages in many cases does not contain every information (for example there

are many law references) the informations are not in logical units so filtering and understanding them is in many cases time consuming and difficult. It would be necessary to build up the materials for tendering in an easily see-through logical system.

- Furthermore the strategical harmonization of the proposals to applications is necessary and that their publication will be according to the exact time, which is defined in the plans of actions is also a necessity.

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Enterprise (Hungary) - Deadlines: The applicants are due to keep strict deadlines from the invitation to tender to the last

settlement and follow-up. We recommend that from the side of the Governing Authority the prescribed deadlines will also be kept.

- The two-round tender system is functioning well in certain cases but unfortunately its useage is not possible in all of the proposals.

C036 - 17.12.2009 HU

Enterprise (Hungary) - The supported loans are often come under this category. It would be more practical to completely

take out the loans from the supported categories. - Difficult and too bureaucratic tendering system: Regarding to the reducing of the

administration The situation does not improved regarding to the reducement of the administration even after the Pre-Accession Funds. The system should be simplified drastically. For example the application and/or settlement could be electronic (online or CD-ROM) only. If someone already applied to a Governing Authority than it would not be necessary to him/her to send in the company documents again and again.

C037 - 17.12.2009 HU

Rural Development Organization (Hungary) - Grants and expenses based on results: We recommend that the use of rounded numbers and flat

rates will be general for the sake of easy accounting. The delay of the judgement and entering into a contract keep back the realization of a project and could cause a significant raise in the adjusted expenses. It would be necessary that the pay off authorities/bodies should also comply with the appropriate deadlines to the completition and pay off of the projects could be done in time.

- De minimis grants: The meaning of „de minimus” is not clear in a national level in Hungary. It would be necessary to unify the meaning of „de minimis” in the member states. The definition by the EU nomenclature and the interpretation is quite different.

C038 - 17.12.2009 HU

Regional Development Organisation (Hungary) - The raise of the tendering threshold is necessary. The current regulation is difficult the procedure

is very time consuming and expensive. - Public Procurement: The Hungarian Public Procurement Act is not harmonized with the EU

Regulations. For example public procurements made by negotiations are accepted by the Hungarian Act but they are not by the EU DG Competition unit. The harmonization of the legislation would be necessary.

- Strategical planning: It is a huge problem that the assignment of the EU resources is have to be made in 7 year periods. This is – because of the not predictable, not foreseeable circumstances – in many fields leads to lack of recourses but otherwise in other fields the resources are under-utilized. For example it does not allow making rapid actions for the compensation of the the economic crisis’s effects. Recommendation: In the field of rearranging resources the European Union should provide more flexibility.

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- It is positive, that the application system became more predictable in recent years; it is easy to foretell the subject and the date of the tender, and also the conditions, because it changes slightly. Nevertheless it is still a problem that compared to the announced publication date the call for proposals can be delayed by months or even 2 years. This delay can disconcert ideas. - Lack of resources occurs in the last 1 or 2 years of the 7-year-budget period, because they run out of money, and that is why they do not call for proposals. The situation is further complicated by the fact, that in the first year of the new budget period, the authorities are not prepared yet, so they do not call for tenders, and their preparation takes the rest of the first year. This means the end to many non-profit organisations, because they cannot survive such a long period of time without the financial support of tenders. Those who can survive just vegetate in this period, instead of carrying out their tasks properly. This situation is really difficult also to the entrepreneurs, all the operators of the economy suffer without tenders for 2-3 years. - The tender threshold is defined very low, it should be increased. We suggest the usage of the past PRAGE process, it was very good. - In the calling for tenders the most important data should be specially highlighted. For instance it happened that a tender was rejected because the list of the intermediary organisation or the managing authority where the tender was supposed to be handed in was not given clearly, and the applicant did not send the tender to all of the addresses. - It would be useful to introduce a norm in connection with specific arising costs, (e.g.: travel costs, paying-off a specific daily fee for a specific distance or place, at a given maximum value) - The non-profit businesses which deal with enterprise promotion should get financial support to promote SME’s with their programs. In Eastern Europe the situation of these organisations is very complicated, because they do not get any municipal or state support, contrary to the ones in Western Europe. - The de minimis limit is very low, it should be at least 500.000 Euro/ 3 years.

C040 - 17.12.2009 FR

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Question 1 : Êtes-vous suffisamment informés des prochains appels à propositions en temps utile? Quelles améliorations proposeriez-vous? Fonds structurels : Manque de communication autour de projets et possibilités de cofinancements. Pas d’accompagnement en amont du projet (lors du montage des projets) Fonds sectoriels : Dans le cadre du programme LLL accompagnement et informations suffisantes par contre peu d’infos et d’accompagnements sur des appels à projets et programmes spécifiques (ECVET, PROGRESS) Question 2 : Les règles sur les conditions de cofinancement doivent-elle être davantage adaptées en prenant en considération le type d'activités et de porteurs de projet? Comment améliorer la prise en compte des contributions en nature, tout en respectant le principe de non-profit ? Fonds structurels : Simplification nécessaire y compris sur les projets de grande envergure Fonds sectoriels : Quelle possibilité de valorisation du bénévolat ? (au niveau du SMIC par exemple) car une association qui fonctionne aujourd’hui avec des bénévoles et qui n’a que peu de moyens financiers doit trouver des moyens financiers complémentaires pour faire appel du cofinancement alors que le travail est fourni par des bénévoles. Sur les deux types de fonds, question qui se pose régulièrement concernant la prise en charge des fonctionnaires (finalement, quelle différence avec des postes en CDI au sein d’organismes privés cofinancés, qui lorsqu’ils sont affectés à un projet Européen ne font pas autre chose (tout comme un fonctionnaire). Question 3 : Le recours aux montants/taux forfaitaires doit-il devenir une norme plutôt qu’une exception? Les règles doivent-elles permettre de couvrir les coûts sur la base des résultats escomptés ? Si oui, pouvez-vous fournir des exemples concrets ? Fonds structurels : Il est nécessaire de développer et d’adapter des règles forfaitaires telles que celles utilisées dans le cadre de projets sectoriels (ex : frais généraux, forfaits mobilité…) Question 4 : Les règles doivent-elles rigoureusement respecter le principe de non-profit ou faire place à plus de souplesse à cet égard ? Avez-vous des exemples de bonnes pratiques adoptées par d'autres pouvoirs publics ? Question qui renvoie au problème de la preuve du non profit. Attention aux interprétations des règlements qui sont différentes d’un individu, d’un organisme à un autre, notamment par rapport à ce principe du non-profit. Question 8 : D’après votre expérience, quelles solutions alternatives pourraient-elles être suggérées pour les paiements de préfinancement, tout en protégeant l'argent des contribuables ? Fonds structurels : Très peu de solutions de préfinancement (FSE, FEDER,..) qui sont également limitées. En plus de l’instruction tardive et d’un passage en CTP souvent bien après la date de passage de début d’opération, d’où une prise de risque très importante pour le porteur de projet ainsi que la nécessité d’une avance de trésorerie élevée qui peut mettre en difficulté réelle le porteur de projet. Des exemples de préfinancements sur des projets dans le cadre de programmes sectoriels existent et fonctionnent tout à fait correctement, en protégeant l’argent des contribuables. Il parait important de pouvoir s’en inspirer dans le cadre des programmes structurels.

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Question 9 : Quel mécanisme, autre que la garantie de préfinancement, pourrait être envisagé, tout en assurant une protection appropriée des fonds communautaires ? Des mécanismes de remboursement sur la base de bilans intermédiaires existent dans le cadre des fonds structurels mais dysfonctionnent actuellement ce qui contribue également à mettre en difficulté les porteurs de projets. Question 11 : Comment les procédures de soumission pour les subventions et contrats pourraient-elles être encore améliorées ? Fonds structurels : Accompagnement nécessaire en amont et en cours de projet (une partie des moyens dédiés aux contrôles pourraient avantageusement y être affectés). Fonds sectoriels : Traduction obligatoire des guides administratifs et financiers car ce sont des pièces officielles qui peuvent nous être opposées. Il faut donc absolument éviter les possibilités d’erreur de traduction/d’interprétation… Dans le cadre des deux type de programmes, il est nécessaire de mettre en place un référent autorisé et centralisé qui puisse répondre à des questions pointues (ex : Agence Leonardo de Bordeaux).

C041 - 17.12.2009 HU

- A really big problem (at least in Hungary), that the organizations calling for tenders are not ready with the whole documentation and the regulation (Handbook) till the publication date. The documentation to be filled in and handed in is uploaded to the internet, and it is altered several times before the deadline for submission. If someone has filled it in on time, won’t recognise if the form has been changed, and their application will be refused because of formal failure. If someone wants to download the documentation for a tender, they have to register, and even they, who are registered, won’t get a notice about the changes in the meantime. It is nonsense that after the calling for tenders, a notice of the Managing Authority overwrites laws. - It seems that in Hungary, the publishers of the tenders have no idea of real life, and of the existing law (e.g.: accounting act, tax rules), that is why they request things contrary to these in the tender. - The FAQ attached to the tenders is very useful, it would help tendering if it was permanent part of the calling for tenders. Association of Experts of Tenders in Zala County

C042 - 17.12.2009 HU

On public tender information events the participants won’t get extra information compared to what is available on the internet, and in the tender guide. They won’t get answers for their specific questions, and if there is a question in connection with the accounting, the only answer is that it is only needed to talk about it after they have won the tender. However this is a great problem, because we cannot plan correctly if we do not know what and how should we account later. Association for People's Collage

C043 - 17.12.2009 HU

- It is a disadvantage that operational programmes are available in Hungary only for settlements with population over 5000 people, thus smaller settlements cannot apply, and will not get any financial support. (Theoretically they have the opportunity to apply for funds in the LEADER program, but there is only little money in it, so in fact it is impossible to get money from it.) - We think it is a problem, that almost exclusively young people work for the intermediary bodies, who although have more degrees, but they do not have any experience in practice, that is why they cannot handle specific situations, they want things which are not lifelike. - Nevertheless it is laudable that the system has developed a lot since the formation of the National Development Agency (2004), the tenders published under the New Hungary Development Plan have the same structure, both the publications and the forms, and finally we can pre-plan tenders, because the next tender has the same conditionality, moreover in specific cases the handing in of the tenders simplified a lot. Things do not work this good yet in case of the New Hungary Rural Development Program, but we hope it will change in the right direction. - The 'de minimis' limit is very low, it should be at least 500.000 Euro/ 3 years Human Chance Non-Profit Ltd.

C044 - 17.12.2009 HU

- Greater freedom should be given to the local decision-makers, in the use of EU funds. - The applicants are not regarded as equal partners by the intermediary bodies; they dictate unilaterally, they alter the tender after it is published, they do not answer written questions in time, they are not available on phone. These organisations in a certain sense are self-serving, they do not act for the applicants. We suggest that a contact person should be named by the intermediary body, when publishing a tender, this person is personally responsible for the contact with the applicants, and he/she really is available for them. - The application system should be simplified, e.g.: everything (appendixes as well) should be handed in electronically. Only those papers should be handed in, which are definitely needed, which are essential in case of the decision making, all other certificates and appendixes should be handed in only in case the tender wins. It would be better, if the Managing Authority could have access to a database, in which it could check all the needed data about the organisations, so the applicants do not have to hand these in. - For a given construction tender the same conditions/requirements are needed for building a big hotel or a pension in a small town, the costs and complexity of which is unprofitable for an apartment. Chamber of Commerce and Industry of Zala County H- 8900 Zalaegerszeg, Petőfi u.24.

C045 - 17.12.2009 HU

- The application system is so bureaucratic, it means such high administrative burden, that it does not worth applying for 4-5000 Euros for small enterprises, despite the fact that they are really in need of financial support. - Tenders for SME’s should be published and executed in a simpler way with another method, another technique, because the current system is too complicated, enterprises do not have enough time to find the suitable tenders for them out of the huge supply, and small entrepreneurs cannot pay for project monitoring organisations. For instance there could be a simple system on the language of the entrepreneurs, where they could register for key words, and the system would send messages about tenders which are in connection with the key word (on the entrepreneurs’ mother-tongue). The advertisements about tenders should be written on the language of the entrepreneurs, the current system does not pay attention to this. - The duration of sustainability should be supervised in many cases, because it is not lifelike (e.g.: in case of an educational project the sustainability is 5 years!?). If the tender does not win, they do not provide adequate information on the causes, it is just it did not win. Though according to the given information we can inquire, but in practice they will not reply e-mails. Procomp Ltd.

C046 - 17.12.2009 HU

- The Hungarian system is over-centralized (e.g.: you have to travel to Budapest to sign something), the decisions, the publishing aspects and the implementation should be decentralized. The stated levels of development are incorrect, time and the crisis changes it quickly, but it does not follows the system. - For the contract the winner tender has to wait 5-6 months, while the project-work should has already been started. If someone does not start the implementation of the project till the contract, he/she will not have enough time to implement the goals of the project. Local Government in a little village in Zala County Hungary

C047 - 17.12.2009 NL

Review of Financial Regulation PKW Response on public consultation Respondent: PodiumKunstWerk (in short: PKW), non-profit, sector fund in the field of Arts

and Culture. Funds used: European Social Fund Country: The Netherlands Note: although we realise that most aspects of our response given below are on the National rules implementing the European Social Fund, we regard these aspects of importance to bring them to the EC attention. Issues/aspects The issues/aspects we regard important are (not following the questions posed in the EC review document):

1) very late payment of grants. As applicant of ESF, we act as a “counter” for organisations in our sector to profit from ESF grants. Due to very late payment of grants – up to more than a year after project ending – organisations in our sector have to wait for payment very long, making the grant less attractive. This very long period does not do justice to the proposed and aimed for stimulating character of grants. We propose to drastically shorten the final report assessment period and the payment of the final grant;

2) the high administrative “burden” attached to using the ESF grant opportunities. Our sector has many very small organisations with only one or a few employees. Therefore, both costs and grants are very low (typically in the range of tens to several hundred Euros). Current administrative rules make that the possible profit and the additional costs in time and “trouble” are very much unbalanced. We propose a simple reimbursement based of invoices;

3) the maximum of indirect costs of applicants is too low. Due to the character of our sector, we as applicant, have very high handling costs due to the need for good promotion, due to the many small direct costs amounts and due to the many administrative provisions. These handling costs exceed the current maximum (by far). We propose an standard for indirect costs that is not only based on the amount of direct costs, but also on the different “files” the direct costs consist of;

4) the current execution of ESF in the Netherlands is very inflexible: there is almost no possibility for project changes, e.g. no possibility to add new training;

5) the influence of sector organisations on national implementation is very limited. In addition to that, we experience that different National Agency consultants give different advise on the same issues, which is very confusing and sometimes has negative influence on project realisations;

6) the strict condition in ESF of a maximum level of previous training of participants (in the Netherlands: max. MBO4) is not in line with the “spirit” of the ESF-regulation. In our sector many employees have an education for arts professional (higher than maximum level) but they need to be trained to be able to use their skills in other sectors (care, education, prisons, communities, companies). This training is really necessary for the employability of the participants, is in itself not too high level and is of a completely different character than the previous training they received (different competencies, not arts education). We therefore propose to make exceptions to the condition of a maximum level of previous training for those cases where strictly following this condition opposes the programme objectives.

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The internal rates should not be regulated in advance, e.g.: the project-management could be only maximum 5%, because in many cases it is so scarce, that nobody will undertake the management of it, so this means a serious barrier. It should be decided by the judgement if the planned expenses are proportional and effective, it should not be pre-planned. If it is planned in advance by all means, then that amount should be automatic, it should not be recorded. Foundation for Enterprise Promotion in Vas County Hungary

C049 - 17.12.2009 DE

1. FINANZHILFEN

1.1. Information über Finanzhilfen: Ausschreibungen werden bereits breitenwirksam veröffentlicht (Art. 110 HHO und Art. 166 DB), insbesondere im Internet.

Frage 1: Halten Sie sich für hinreichend und rechtzeitig informiert über kommende Ausschreibungen? Welche Verbesserungen würden Sie vorschlagen?

Antwort:

Die Information über kommende Ausschreibungen über das Medium des Internets und den in diesem Zusammenhang verbreiteten Newslettern ist unserer Meinung nach generell ausreichend. Weitere Veröffentlichungswege sind nicht notwendig. Der Vorlauf derartiger Ausschreibungen sollte bei Einzelvorhaben mindestens 2 Monate und bei Kooperationsprojekten mindestens 5 Monate betragen.

1.2. Ko-finanzierung und Sachleistungen: EU-Finanzhilfen sind ko-zufinanzieren und dies in manchmal erheblichem Umfang. Diese Verpflichtung bedeutet für Antragsteller häufig eine Herausforderung, insbesondere wenn es keine Möglichkeit gibt, den eigenen Beitrag in Form von Sachleistungen wie etwa Freiwilligenarbeit zu erbringen.

Frage 2: Sollten die Bestimmungen zur Ko-finanzierung flexibler gestaltet werden, abhängig von der Art der Maßnahme und der das Vorhaben durchführenden Organisation? Wie könnte unter Beibehaltung des Grundsatzes der Gemeinnützigkeit mit Sachleistungen am besten umgegangen werden?

Antwort:

Die Kofinanzierung von EU-Finanzhilfen als Haushaltsgrundsatz gemäß Artikel 109 der Haushaltsordnung ist in aller Regel eine förderpolitisch notwendige Maßnahme zur Sicherstellung der öffentlichen Interessen. Dennoch sollten die konkreten Anforderungen flexibel auf die Art der Maßnahme und/oder die Rechtsform des Empfängers abgestellt sein. Das vergleichbare nationale Zuwendungsrecht sieht eine derartige Flexibilität bereits vor.

In Übereinstimmung mit den Regelungen des F+E+I Gemeinschaftsrahmens bzw. den Bestimmungen der Allgemeinen Gruppenfreistellungsverordnung werden völlig unterschiedliche Anforderungen zur Kofinanzierung je nach Rechts- und Unternehmensform des Empfängers gestellt. Bei gewerblich tätigen Unternehmen werden teilweise erheblich Kofinanzierungsanteile (idR 50 %) erwartet, während bei gemeinnützigen Empfängern (z.B. Forschungseinrichtungen im Sinne des F+E+I-Gemeinschaftsrahmens) nach Maßgabe von Ziff. 3.1.2 auf derartige Kofinanzierungen auch völlig verzichtet werden kann.

Die dort geübte Flexibilität reicht daher bis zu einem völligen Verzicht der Kofinanzierung. Dies sollte auch im europäischen Bereich dann möglich sein, wenn der Empfänger einer Finanzhilfe (durchführende Organisation) kein unmittelbar eigenes wirtschaftliches Interesse an der Durchführung der konkreten Maßnahme hat, aber dennoch im Wege anderer Maßnahmen wie z.B. Verbreitung von Ergebnissen oder Bewirken des Technologietransfers zur Sicherung der öffentlichen Interessen beiträgt.

Ebenso sollte ein Verzicht auf Kofinanzierung in den Fällen zugelassen werden, sofern es im Interesse der Gemeinschaft ist, einziger Geldgeber für eine Maßnahme zu sein, oder wenn eine Maßnahme aufgrund fehlender Kofinanzierung nicht realisiert werden kann, sofern die Realisierung der Maßnahme einen erheblichen Mehrwert bzw. Nutzen für Europa generieren würde (gemäß Artikel 169 Haushaltsordnung).

Bei der Vergabe europäischer Finanzhilfen sollten die entsprechenden Stellen sich keine engeren Grenzen auferlegen, als sie für die nationalen Stellen gelten. Damit verbunden wäre eine analoge Anwendung der an sich nur für die Mitgliedsstaaten geltenden Vorschriften zu maximalen Beihilfeintensitäten.

Sachleistungen als Kofinanzierung sollten gemäß den jeweils nationalen Buchhaltungsgrundsätzen des Mittelempfängers bewertet werden.

1.3. Leistungsbasierte Finanzhilfen (Art. 108a HHO und Art. 180a & 181 DB): Das derzeitige System zur Verwaltung der Finanzhilfen verpflichtet die Empfänger, eine große Zahl von Förderbedingungen zu erfüllen und erfordert vielmalige Kontrollen während der gesamten Dauer eines Projekts. Potenzielle Empfänger kann dies unter Umständen entmutigen überhaupt einen Antrag auf Erhalt einer solchen Finanzhilfe zu stellen. Die Verwaltung von Finanzhilfen könnte durch die Nutzung verschiedener Methoden weiter vereinfacht werden (wie zum Beispiel Pauschalbeträge, oder die Finanzierung auf der Grundlage von Pauschaltarifen) unter Vermeidung der derzeitigen aufwändigen Buchführung zur Erfassung von Kosten. Die Kommission könnte auch ein neues Verwaltungssystem schaffen, das die Übernahme von Kosten in erster Linie davon abhängig macht, welches der gesetzten Ziele erreicht wurde.

Frage 3: Sollte die Nutzung von Pauschalbeträgen und einer Finanzierung auf Grundlage von Pauschaltarifen eher die Norm als die Ausnahme sein? Sollten die Bestimmungen es zulassen, Kosten in Abhängigkeit davon zu übernehmen, ob die vereinbarten Ergebnisse erzielt wurden? Wenn ja, können Sie konkrete Beispiele nennen?

Antwort:

Die Vermeidung von bürokratischem Aufwand und Kontrollen auf der einen Seite als auch die Sicherstellung der öffentlichen Interessen (Steuergelder) auf der anderen Seite, stehen in einem schwer lösbaren Spannungsverhältnis. Mit der Anwendung von Pauschalen lässt sich dieses nicht generell lösen, wenngleich Pauschalen in bestimmten Einzelfällen durchaus zu einer Vereinfachung führen können. Dies allerdings ausschließlich nur dann, wenn die Pauschale auch Grundlage für die Abrechnung der Finanzhilfe ist und nicht wiederum durch Einzelkosten belegt werden muss.

Pauschalen müssen aus Sicht des Finanzhilfegebers (sparsame Verwendung von Steuermitteln) grundsätzlich so gering bemessen sein, dass im Endeffekt keine Überzahlung herauskommt. Pauschalen werden daher unterschiedlichen Empfängern nicht gerecht. Wenngleich wenig ausgefeilte Systeme von Pauschalen profitieren könnten, werden hoch entwickelte Kostenrechnungssysteme hierdurch ad absurdum geführt und letztlich durch ungenügende Höhe dieser Pauschalen benachteiligt. Die Anstrengungen der Europäischen Kommission zur flächendeckenden Einführung von Kostenmodellen bei gleichzeitiger Abkehr von Zusatzkostenmodellen würden durch die Einführung von Pauschalen konterkariert werden (viele Universitäten haben beispielsweise u.a. auch aufgrund der Änderungen des F+E+I-Gemeinschaftsrahmens den Weg hin zu einer Kostenrechnung eingeschlagen). Daher sollten Pauschalen nicht die Norm werden, sondern nur in sachlich begründeten Ausnahmefällen bzw. bei Kosten von geringerem Wert (z.B. bei Reisekosten oder Tagespauschalen), zur Anwendung kommen.

Die Buchführung zur Erfassung der Kosten und Kostenrechnung als solche gehören zusammen. Der Aufwand liegt daher weniger in der Erfassung der Kosten über die Buchführung, als vielmehr in den ganz unterschiedlichen Interpretationen und Vorgehensweisen bei der Abrechnung solcher Kosten sowie in den gegenüber der Kommission zu erbringenden ganz unterschiedlichen Darstellungen. Obwohl Pauschalen grundsätzlich den Aufwand bei der Abrechnung reduzieren

könnten, wäre es sinnvoller, bei der Akzeptanz der erstattungsfähigen Kosten klarere, einfachere und vor allen Dingen eindeutige Regelungen anzuwenden.

Beispielsweise ist eine Bestimmung wie "erstattungsfähige Kosten müssen einzig für den Zweck anfallen, die Ziele des Projekts und dessen erwartete Ergebnisse ... zu realisieren" nicht operabel

Diesbezüglich stellt bei Empfängern von Finanzhilfen, die über ein national testiertes Kostenrechnungsverfahren verfügen, die einfachste Vorgehensweise immer die vollständige Akzeptanz dieses Verfahrens durch europäische Stellen dar. Insoweit sieht Fraunhofer erhebliche Vorteile in einer Vorgehensweise, die sämtliche, nach diesem testierten Verfahren ermittelten direkten und indirekten Kosten erstattet und nicht auf häufig ungerechte und unzureichende Pauschalen zurückgreift.

Die Übernahme von Kosten in Abhängigkeit von erreichten Ergebnissen wäre theoretisch denkbar, birgt aber eine Reihe von Problemen und Risiken. Zum einen, solange nicht sämtliche Anbieter unter Berücksichtigung aller ihrer Gemeinkosten eine umfassende Kostenrechnung eingeführt haben, sind die Angebote in der Frage des Preises bzw. der Vergütung nicht miteinander vergleichbar. Auch hier besteht die Gefahr, dass Vorhaben nicht zu echten Vollkosten angeboten werden und die Finanzhilfevereinbarung dann mit dem vermeintlich billigsten Anbieter abgeschlossen werden.

Pauschale Zahlungen, die nur noch an die Erreichung von Meilensteinen und Leistungen geknüpft sind, werden unter Umständen nicht in ausreichendem Maße dem Forschungscharakter der Projekte gerecht. Um für den Fall, dass Meilensteine und/oder Leistungen nicht in der vereinbarten Form erbracht werden, Nichtzahlungen und Härten zu vermeiden, müsste das inhaltliche Reporting entsprechend erhöht werden. Dies wiederum würde die Verminderung des Aufwandes bei einer einfacheren Kostenabrechnung konterkarieren. Zudem stellt sich das Problem vergleichbarer projektinterner Vorgaben von Koordinatoren. Selbst wenn also das Verfahren über die Kostenaufstellungen gegenüber der Kommission reduziert wäre, ist es nicht sicher gestellt, dass dieses nicht über projektindividuelle Anforderungen der Koordinatoren entsprechend derzeit durchaus üblicher Praxis wieder auflebt.

Forschungsprojekte bringen eine hohe Unsicherheit mit sich. Es kann daher nicht vorhergesagt werden, ob bestimmte Ergebnisse tatsächlich erreicht werden und welche genauen Kosten dafür notwendig sind. Insofern ist es schwierig, Ergebnisse quantitativ und qualitativ objektiv zu bewerten, um daraus die finanzielle Förderung zu bemessen. Wenn man diesen Weg dennoch verfolgen möchte, wäre es eine Grundvoraussetzung für Forschungsprojekte, dass die Budgetierung und Abrechnung ausschließlich auf der Erledigung von Meilensteinen bzw. Tasks und nicht auf vorher festgelegten Ergebnissen beruhen.

1.4. Gemeinnützigkeit (Art. 109.2 HHO und Art. 165 DB): EU-Finanzhilfen dürfen keinen Gewinn für den Empfänger erzeugen, da sie keinen wirtschaftlichen Zweck verfolgen, sondern lediglich einen Anreiz zu Aktivitäten schaffen sollen. Dies führt häufig zu Missverständnissen zwischen der Kommission und den Mittelempfängern sowie zu einer übermäßigen Verwaltungslast.

Frage 4: Sollten die Bestimmungen sich strikt an den Grundsatz der Gemeinnützigkeit halten oder sollte es diesbezüglich eine gewisse Flexibilität geben? Können Sie Beispiele für bewährte Praktiken anderer öffentlicher Stellen nennen?

Antwort:

Das Prinzip der Ko-finanzierung schließt den Grundsatz ein, dass EU-Finanzhilfen keinen Gewinn erzeugen dürfen.

Darüber hinaus kann eine Förderung auf Basis von Vollkosten (siehe hierzu auch Antwort zu Frage 2) prinzipiell keinen Gewinn für den Empfänger erzeugen (Voraussetzung, dass es keine direkten Einahmen im Rahmen eines Projektes gibt). Daher bliebe auch bei einer 100%-igen Finanzhilfe der Grundsatz gewahrt, dass EU-Finanzhilfen keinen Gewinn erzeugen dürfen,

Die Förderung auf der Basis von Vollkosten sollte daher stets die Grundlage von EU-Finanzhilfen zur Projektförderung sein.

1.5. Obergrenzen für Finanzhilfen von geringem Wert: Die derzeitigen Bestimmungen zu Finanzhilfen müssen vor allem mit den Grundsätzen der Ko-finanzierung (Art. 172.1 DB), der Gleichbehandlung und des fairen Wettbewerbs (Art. 173 DB) übereinstimmen. Es besteht jedoch eine gewisse Flexibilität für Finanzhilfen von "geringem" Wert (< 25 000 EUR Art. 172.3 DB und Art. 173.2 DB) bzw. für Finanzhilfen von "sehr geringem" Wert (< 5 000 EUR Art. 114.3 HHO und Art. 175b DB).

Frage 5: Welcher Wert wäre nach Ihrer Auffassung für Finanzhilfen von geringem und sehr geringem Wert angemessen?

Antwort:

keine Bemerkungen

1.6. Finanzielle Stabilität der Antragsteller von Finanzhilfen: Die derzeitigen Bestimmungen sehen eine allmähliche Verringerung der als Betriebskostenzuschuss gewährten Finanzhilfen vor (Art. 113.2 HHO), insbesondere um die Empfänger dazu zu ermutigen, ihre Eigenmittel auf eine breite Basis zu stellen. Aus ähnlichen Gründen wird die Dauer von Rahmenpartnerschaftsabkommen (Art. 163 DB), die eine langfristige Form der Zusammenarbeit mit Mittelempfängern darstellen, begrenzt. Solche Bestimmungen könnten mit dem Ziel überprüft werden, die bestmögliche Balance zwischen dem Bedarf an finanzieller Stabilität und dem Risiko von einer zu großen Abhängigkeit von EU-Mittel zu finden.

Frage 6: Inwieweit und auf welche Weise könnten die Bestimmungen betreffend der als Betriebskostenzuschuss gewährten Finanzhilfen flexibler sein? Was ist Ihre Ansicht zur Dauer der Rahmenpartnerschaftsabkommen?

Antwort:

Es ist eine Frage der Definition und Abgrenzung, wie Projektförderabkommen und Rahmenpartnerschaftsabkommen unterschieden werden. Grundsätzlich sollte eine abnehmende Förderintensität erst bei Laufzeiten von über 60 Monaten, d.h. frühestens ab dem 61. Monat überhaupt angedacht werden.

1.7. 'Finanzhilfen in Kaskaden' ('cascading' grants) - unter Einbeziehung von Dritten: Die Möglichkeit für einen Empfänger, einen Teil seiner Finanzhilfe durch Finanzhilfen an Dritte weiterzugeben, ist derzeit strikt begrenzt (Art. 120 HHO und Art. 184a DB), insbesondere um eine angemessene Überwachung und Kontrolle der öffentlichen Mittel durch die Kommission zu gewährleisten.

Frage 7: Können Sie konkrete Beispiele und Arten von Maßnahmen nennen, bei denen die strikte Begrenzung betreffend 'Finanzhilfen in Kaskaden' dazu geführt hat, dass das Ziel einer Maßnahme nicht erreicht werden konnte?

Antwort:

Das weitgehende Verbot von "Finanzhilfen in Kaskaden" erstreckt sich auch auf die Vergabe von Unteraufträgen. Es gibt unzweifelhaft Fälle, in denen aufgrund des weitgehenden Ausschlusses von Unteraufträgen die Ziele einer Maßnahme schwieriger erreicht werden können.

Aktuell erscheint daher dieses Verbot als etwas zu restriktiv und sollte gelockert werden, ohne die in der Vergangenheit durchaus vorgekommenen Missbrauchsfälle wieder zu ermöglichen. Die Überwachung und Kontrolle der öffentlichen Mittel durch die Kommission lässt sich bei einer zugelassenen Unterauftragsvergabe über eine entsprechende Vertragsgestaltung mit analoger Verpflichtung auf die Kommissionsregeln erreichen.

2. DIE ABWICKLUNG VON FINANZIERUNGSVORGÄNGEN DURCH DIE KOMMISSION

Hintergrund: Die Abwicklung öffentlicher Auftragsvergabe und Finanzhilfen durch die Kommission ist so gestaltet, dass sie Risiken für Fehler, Unregelmäßigkeiten und Betrug minimiert und eine strikte und angemessene Überwachung und Kontrolle der öffentlichen Mittel gewährleistet.

In der Praxis können Regeln für übermäßige Bürokratie und Kontrollen verantwortlich sein. Die Kommission überprüft, ob und in welcher Weise solche Regeln angepasst werden können, um das richtige Gleichgewicht zwischen dem Interesse der öffentlichen Mittel und einer effektiven Projektverwaltung zu schaffen.

2.8. Vorfinanzierungen an die Mittelempfänger (Art. 5a HHO): Diese Zahlungen werden bis zur vollständigen Durchführung der Maßnahme als Eigentum der Gemeinschaften betrachtet. Demzufolge sind die aus diesen Zahlungen erwirtschafteten Zinsen dem EU-Haushalt rückzuerstatten. Dies sorgt für administrative und finanzielle Formalitäten (gesondertes Bankkonto, lückenlose Aufzeichnung der Abhebungen…) und Kontrollen.

Frage 8: Welche alternativen Lösungen könnten aufgrund Ihrer Erfahrung für die Vorfinanzierung vorgeschlagen werden, ohne dass die Kontrolle öffentlicher Gelder unterlaufen würde?

Antwort:

Die aus den EU-Zahlungen erwirtschafteten Zinsen betreffen nur Konten, welche von dem Koordinator einer Maßnahme verwaltet werden. Werden die Gelder ohne Zeitverzögerung an die Partner weitergeleitet, so fallen keine oder nur wenig Zinsen an. Die Zinsen, welche darauf jedoch evtl. bei den Partnern anfallen, werden nicht berücksichtigt.

Weiterhin ist es ungeklärt, inwieweit Zinsen berücksichtigt werden, die nach Ende eines Projektes beim Koordinator anfallen.

Sofern Koordinatoren an vielen Maßnahmen als Koordinator beteiligt sind, stellt die Führung eines separaten Kontos je Maßnahme in der Regel sowohl bei der Bank des Koordinators als auch bei der EU-Kommission eine kaum zu erfüllende administrative Hürde dar. Es müssen teilweise gleichzeitig bis zu 100 (!) Konten geführt werden. Davon fallen regelmäßig wieder Konten weg und neue werden hinzugefügt. Aus unserer Erfahrung besteht daher u.a. seitens der Kommission ein hohes Risiko von Fehlüberweisungen auf falsche Konten.

Die einfachste Lösung wäre es, auf die Verrechnung möglicher Zinsen ganz zu verzichten, da auch die Kommission Zwischen- und Schlusszahlungen teilweise mit starken Verzögerungen tätigt. Auf diese Beträge werden faktisch ebenfalls keine Zinsen berechnet, obwohl sie den Zuwendungsempfängern zustehen würden.

Alternativ wäre es darüber hinaus denkbar, die Zinsen, welche auf das Kapital des Garantiefonds anfallen und nicht von der Kommission für Mittelübertragungen oder Einziehungen zulasten des Fonds verwendet wird, ersatzweise einzubehalten.

Abschließend wäre es denkbar, Vorfinanzierungen in mehreren Tranchen auszuzahlen, was die Generierung von Zinsen bei den Projektpartnern verringern würde.

2.9. Vorfinanzierungs-Garantien (Art. 152 DB): Diese Garantien sind erforderlich, um das Risiko für den Verlust von EU-Mitteln zu verringern, falls der Empfänger – sollte er zur Rückzahlung der Vorfinanzierung verpflichtet sein – insolvent wird oder die Mittel aus anderen Gründen nicht zurückerstatten kann. In der Regel wird der vorfinanzierte Betrag jedoch durch die Bank blockiert, welche die Bürgschaft leistet und dadurch der Vorteil der Vorfinanzierung beseitigt.

Frage 9: Welche anderen Mechanismen sind denkbar, die einen angemessenen Schutz der Gemeinschaftsmittel sicherstellen?

Antwort:

Innerhalb des Rahmenprogramms stellt der eingeführte Garantiefonds eine einfache und wirkungsvolle Verfahrensweise zum Schutz der Gemeinschaftsmittel dar. Dieser Garantiefonds ist unseres Erachtens völlig ausreichend, um einen angemessenen Schutz zu gewährleisten.

Weiterhin gibt es darüber hinaus die Möglichkeit des Financial Viability Check oder den Verzicht auf die Vorfinanzierungs-Garantie. Bei diesen Vorgehensweisen ist auf ein transparentes Procedere zu achten.

Ein Financial Viability Check sollte generell im Rahmen einer zentralen Datenbank der Kommission durchgeführt werden. Entweder integriert in das URF-System oder in Anlehnung daran sollte eine zentrale "Finanzempfänger"-Datenbank (Förderungen und Auftragsvergabe) aufgebaut werden. So würde eine sachgerechte (HO), differenzierte und transparente Behandlung für die jeweiligen Mittelempfänger ermöglicht werden. Das könnte z.B. von der GD Haushalt für die gesamte Kommission nach einheitlichen Standards administriert werden.

Wie schon bei Frage 8 angesprochen, könnte eine Vorfinanzierung auch in mehreren zeitlich verteilten Teilbeträgen ausgezahlt werden, was den Schutz der Gemeinschaftsmittel erhöhen würde.

2.10. Schwellenwerte für Aufträge von geringem Wert (Art. 129 DB): Unterhalb bestimmter Schwellenwerte ist das Verfahren vereinfacht, so dass Aufträge auf der Grundlage eines einzelnen Angebots vergeben und Zahlungen in vereinfachter Weise gegen Rechnung vorgenommen werden können.

Frage 10: Glauben Sie aufgrund Ihrer Erfahrungen, dass die derzeitigen Schwellenwerte noch immer angemessen sind oder sollten diese erhöht werden? Wenn Sie aus Ihrer Sicht zu erhöhen sind, warum?

Antwort:

Keine Bemerkungen

2.11. Verwaltungsaufwand für die Antragsteller (vor allem Art. 143 DB, Art. 172c DB und Art. 138c DB): In der Regel werden Antragsteller für eine Finanzhilfe oder einen öffentlichen Auftrag dazu aufgefordert, detaillierte Information über ihre Organisation einzureichen sowie eine umfassende Beschreibung ihres Vorhabens/Angebots vorzulegen. Um die Erfüllung dieser Anforderungen zu erleichtern, sehen die derzeitigen Bestimmungen die mögliche Verwendung von 'e-tools' vor. Allerdings wird von diesen Möglichkeiten in der Praxis nur wenig Gebrauch gemacht und zwar aus technischen Gründen, die unter anderem mit der Authentifizierung von Dokumenten zusammenhängen. Im Bemühen den Verwaltungsaufwand zu reduzieren hat die Kommission auch die Möglichkeit geschaffen, das Verfahren zur Gewährung von Finanzhilfen in 2 Schritten durchzuführen (Art. 178 DB) und nur jene Antragsteller zur Einreichung aller Unterlagen aufzufordern, die mit ihrem Antrag am wahrscheinlichsten Erfolg haben werden. Diese Prozedur vermindert den Verwaltungsaufwand, verlängert aber auch das Auswahlverfahren erheblich. In

Anbetracht dessen könnte eine Idee zur weiteren Reduzierung des Verwaltungsaufwands sein, eine besondere Kennzeichnung derjenigen Organisationen einzuführen, die bereits erfolgreich ein Projekt und/oder einen Auftrag durchgeführt haben, damit diese nur noch jene Unterlagen einzureichen haben, die für den neuen Antrag relevant sind.

Frage 11: Wie könnte das Antragsverfahren für Finanzhilfen und öffentliche Auftragsvergabe weiter verbessert werden?

Antwort:

Der Ansatz eines zweistufigen Verfahrens wird grundsätzlich für positiv erachtet. Die damit erreichten Vorteile einer Reduzierung von letztlich unnötigem Aufwand der Vorbereitung von Proposals und Angeboten überwiegen die Nachteile der längeren Dauer bei weitem.

Eine weitere Reduzierung des Verwaltungsaufwandes wäre dennoch generell zu begrüßen. Elektronische Verfahren sollten hierbei in größtmöglichem Umfang genutzt werden. Mit den aktuellen Verfahren wie NEF und PIC hat die Kommission erste Maßnahmen in diese Richtung für das Rahmenprogramm eingeleitet. Das Ziel weiterer Verbesserungen muss es nun sein, die Einreichung von Unterlagen auf die konkret für das Projekt relevante Unterlagen zu beschränken. Sämtliche allgemeinen Informationen zum Status und zum finanziellen Hintergrund sollten insbesondere bei Auftragnehmern oder Antragstellern, die sich mehrfach um Projekte bewerben, bei der Kommission zentral gespeichert und verwaltet werden. Dieses Vorgehen sollte generell für alle Arten europäischer Fördervereinbarungen sowie Vergabeverfahren mit der Kommission Anwendung finden und nicht nur auf besondere Großprogramme wie FP 7 begrenzt sein.

C050 - 17.12.2009 HU

The insurance of advance money is very important in case of every tender, because the pre-financing of the total money means a great problem. There are a few examples only for the further split financial support, there should be more. In case of resolving discrepancy entrepreneurs have to hand in many documents, which was not written in the tender guide, moreover entrepreneurs have to send these documents twice or three times, because the Managing Authority finds out new things, and in many cases it supervises itself. Association for villages in Zala County Hungary

C051 - 17.12.2009 HU

- In Hungary the demand of collateral in case of pre-financing is over-secured, it needs to be eased, rather than restricted. In many cases multiple collateral is needed what small entrepreneurs cannot provide. We suggest the filtering out of high-risk clients on European level, there are many practices for that. - There should be more form-like, so-called automatic tenders. Sanasol Ltd.

C052 - 17.12.2009 HU

As an entrepreneur, I do not get enough information about tenders; it takes me long time to gather all the information, to find out whether there is a tender suitable for me, the system is too bureaucratic, and it is very expensive to purchase all the certificates, moreover several times the same ones. After the accounting of my winner tender the money did not arrive in time, they found everything all right, but I only got the money 1 year later, and the financing of this is really difficult. The accounting itself was very slow, and an exchange of letters took 1-1 month. In case of implementation they did not accept the bank warrant, they asked for a statement from the entrepreneur doing the work, if he/she got the money, and I think is not lifelike, it means extra time, spare money and energy. Now, after 2 years, I still do not have an official notification that the monitoring is closed, whether they accepted finally my accounting, or not, and this was only a 5.000-Euro financial support. Pais Ltd. Hungary

C053 - 17.12.2009 HU

The tenders are too complicated for individuals (e.g.: rural landlords). (Tender for Rural Development)

C054 - 17.12.2009 DE

Umicore was in the past and is also currently involved in a number of 6th and 7th Framework projects. During the course of these projects we identified a number of items and issues were we see a high potential for simplification of EU project preparation, project management and reporting. Enclosed please find Umicore's input to the EU Public Consultation on the review of the Financial Regulations: EU FP7 projects 1. Financial (periodic) project reporting (Cost statements):

• Very bureaucratic and requires high efforts: Explanation on the individual cost items are requested down to a level of few Euros

• Feedback from Commission services on the cost reports comes quite late, in some cases up to half a year after report submission

• Acceptance of cost items seems to depend on EU officers personal experience respective attitude.

• A legal entitiy should be allowed to use different cost models for different departments or company sites.

• Acceptance of average personnel costs is essential for the participation of industry. 2. Detail (financial) project negotiations before project start:

• For smaller projects the efforts on forms for financial viability check are higher than for the real project work. A simplified procedure for small EU contribution projects is needed.

3. International companies organisational issues

• A simple solution is needed for the participation of more than one affiliate of internationally structured companies with their different business units or working groups in one company but different legal entities (affiliates).

• The procedures for changes of a project partner due to re-organisation at the partner should be simplified.

Thanks for giving us the chance to give our input and to express our suggestions. Umicore AG&CO KG RD-EP P.O. Box 1351 D-63403 Hanau Germany www.umicore.de

C055 - 17.12.2009 DE

Leibniz-Gemeinschaft, Eduard-Pflüger-Str. 55, 53113 Bonn, Deutschland www.wgl.de

ÜBERPRÜFUNG DER HAUSHALTSORDNUNG Öffentliche Konsultation Leibniz-Gemeinschaft Die Wissenschaftsgemeinschaft Gottfried Wilhelm Leibniz e.V., kurz "Leibniz-Gemeinschaft", ist eine der vier großen deutschen außeruniversitären Forschungsorganisationen und vereint heute unter ihrem Dach 86 Einrichtungen, die Forschung betreiben oder wissenschaftliche Infrastruktur bereitstellen. Rund 6.500 Wissenschaftlerinnen und Wissenschaftler arbeiten in den Geistes- und Sozialwissenschaften, den Wirtschafts-, Raumwissenschaften und Lebenswissenschaften ebenso wie in der Mathematik, den Natur- und Ingenieurswissenschaften sowie der Umweltforschung. Insgesamt beschäftigen die Leibniz-Institute ca. 14.000 Menschen bei einem Jahresetat von über einer Milliarde Euro.

Die Leibniz-Gemeinschaft zeichnet sich durch die große Vielfalt der in den Instituten bearbeiteten Themen ebenso wie durch ihre dezentrale Organisationsform aus: Ihre Einrichtungen sind in den meisten Fällen wissenschaftlich und organisatorisch unabhängig. Sie betreiben strategische, themenorientierte Forschung. Ihr Anspruch orientiert sich immer an wissenschaftlicher Exzellenz sowie gesellschaftlicher Relevanz.

Damit nimmt die Leibniz-Gemeinschaft Bezug auf ihren Namensgeber Gottfried Wilhelm Leibniz, mit dem sich die Vorstellung eines der größten Universalgelehrten verbindet. In diesem Sinne arbeiten die außeruniversitären Forschungsinstitute und Serviceeinrichtungen interdisziplinär. Sie stellen wissenschaftliche Dienstleistungen und eine entsprechende Infrastruktur zur Verfügung und kooperieren mit Hochschulen, Einrichtungen anderer Wissenschaftsorganisationen sowie Wirtschaftsunternehmen.

1 – FINANZHILFEN Hintergrund: Gemäß der Haushaltsordnung (Titel VI) sind Finanzhilfen transparent und fair, insbesondere durch öffentliche Ausschreibungen zu gewähren. Finanzhilfen können weder kumulativ noch rückwirkend gewährt werden. Sie erfordern Ko-finanzierung und dürfen keinen Gewinn für den Empfänger erzeugen. Darüber hinaus können sie nur zum Ersatz tatsächlich angefallener Kosten verwendet werden.

Die Kommission hat sich entschlossen, ihr System für die Gewährung von Finanzhilfen zu vereinfachen und neu zu gestalten. Mit dieser Zielsetzung könnten die folgenden Fragen geklärt werden. • Information über Finanzhilfen: Ausschreibungen werden bereits breitenwirksam veröffentlicht (Art. 110 HHO und Art. 166 DB), insbesondere im Internet. Frage 1: Halten Sie sich für hinreichend und rechtzeitig informiert über kommende Ausschreibungen? Welche Verbesserungen würden Sie vorschlagen?

Leibniz-Gemeinschaft, Eduard-Pflüger-Str. 55, 53113 Bonn, Deutschland www.wgl.de

Antwort 1: Die grundsätzliche Information über kommende Ausschreibungen ist ausreichend. Verbesserungen könnten durch Roadmaps erreicht werden, wie schon in einzelnen Bereichen des 7. Forschungsrahmenprogramms praktiziert (SSH, INFRA). Im Bereich des Forschungsrahmenprogramms wäre es wünschenswert, dass die Topics in den Aufrufen mit thematischen Prioritäten weit vor der eigentlichen Veröffentlichung bekannt gegeben werden. In der Regel reicht die Zeit von der Ausschreibung bis zur Deadline nicht, um ein komplexes Konsortium mit verschiedenen Partnern aus europäischen Ländern aufzubauen. Hier wäre eine Roadmap mit ersten Informationen zu den zu erwartenden Topics 10 Monate vor der Deadline sinnvoll. • Ko-finanzierung und Sachleistungen: EU-Finanzhilfen sind ko-zufinanzieren und dies in manchmal erheblichem Umfang. Diese Verpflichtung bedeutet für Antragsteller häufig eine Herausforderung, insbesondere wenn es keine Möglichkeit gibt, den eigenen Beitrag in Form von Sachleistungen wie etwa Freiwilligenarbeit zu erbringen. Frage 2: Sollten die Bestimmungen zur Ko-finanzierung flexibler gestaltet werden, abhängig von der Art der Maßnahme und der das Vorhaben durchführenden Organisation? Wie könnte unter Beibehaltung des Grundsatzes der Gemeinnützigkeit mit Sachleistungen am besten umgegangen werden? Antwort 2: Das System der Ko-finanzierung ist sehr undurchsichtig im Hinblick auf die verschiedenen Programme. Eine Vereinheitlichung wäre wünschenswert. Dabei sollte berücksichtigt werden, dass es für Forschungseinrichtungen möglich sein sollte, Personalkosten von vorhandenem Personal ohne prozentuale Deckelung in ein Projekt einzubringen. Die indirekten Kosten sollten auf der Basis einer Pauschale anerkannt werden, die dann zur Ko-finanzierung herangezogen werden könnte, da die Forschungseinrichtungen einen viel höheren Gemeinkostensatz und damit in der Regel viel höher in die Ko-finanzierung gehen, als im Kostenplan dargestellt, wenn die Deckelung von 7% indirekter Kosten zur Anwendung kommt. • Leistungsbasierte Finanzhilfen (Art. 108a HHO und Art. 180a & 181 DB): Das derzeitige System zur Verwaltung der Finanzhilfen verpflichtet die Empfänger, eine große Zahl von Förderbedingungen zu erfüllen und erfordert vielmalige Kontrollen während der gesamten Dauer eines Projekts. Potenzielle Empfänger kann dies unter Umständen entmutigen überhaupt einen Antrag auf Erhalt einer solchen Finanzhilfe zu stellen. Die Verwaltung von Finanzhilfen könnte durch die Nutzung verschiedener Methoden weiter vereinfacht werden (wie zum Beispiel Pauschalbeträge, oder die Finanzierung auf der Grundlage von Pauschaltarifen) unter Vermeidung der derzeitigen aufwändigen Buchführung zur Erfassung von Kosten. Die Kommission könnte auch ein neues Verwaltungssystem schaffen, das die Übernahme von Kosten in erster Linie davon abhängig macht, welches der gesetzten Ziele erreicht wurde. Frage 3: Sollte die Nutzung von Pauschalbeträgen und einer Finanzierung auf Grundlage von Pauschaltarifen eher die Norm als die Ausnahme sein? Sollten die Bestimmungen es zulassen, Kosten in Abhängigkeit davon zu übernehmen, ob die vereinbarten Ergebnisse erzielt wurden? Wenn ja, können Sie konkrete Beispiele nennen?

Leibniz-Gemeinschaft, Eduard-Pflüger-Str. 55, 53113 Bonn, Deutschland www.wgl.de

Antwort 3: Pauschalen vereinfachen sowohl die Abrechung auf der Projektseite, als auch die Kontrolle auf Seiten der Förderer und sollten verstärkt eingeführt werden. Neben den Pauschalen wäre es wünschenswert, wenn den Projektteilnehmern zusätzlich die Wahlmöglichkeit eingeräumt wird, Pauschalen zu nutzen oder auf der Basis eines anderen Nachweises die Projektkosten abzurechnen. Die Indikatoren für den Nachweis sollten mit der Ausschreibung transparent gemacht werden, um Unsicherheiten auf der Seite der Projekte auszuschließen. Pauschalen sollten dann auch wirkliche Pauschalen sein und nicht im Nachhinein wieder auf der Basis von Einzelbelegen nachgewiesen werden müssen (siehe Marie-Curie Pauschalen Kategorie D und E, bzw. die Handhabung bei den Marie Curie Reintegration Grants). Die grundsätzliche Obergrenze von 7% indirekter Kosten als Pauschale sollte angehoben werden, da die Grenze nicht den wirklichen Verhältnissen entspricht. Die Ausnahme „Special Transitional Flat Rate“ im Forschungsrahmenprogramm kommt den wahren Verhältnissen, verglichen mit der Kostenmethode „real indirect costs“ näher und sollte auch in den anderen Programmen Eingang finden. Im Forschungsrahmenprogramm trägt die Pauschale im Rahmen der Special Transitional Flat Rate sehr zur Vereinfachung bei und sollte auch in der Zukunft eine Wahlmöglichkeit bleiben. Insbesondere die Ex-Post Audits zum 6. Forschungsrahmenprogramm mit der Nachkalkulation von bereits auditierten Projekten und die Schwierigkeiten der Kommission bei der Erstellung von Methodenzertifikaten legen nahe, eine Pauschale in angemessener Höhe für die indirekten Kosten zuzulassen oder bei der Abrechung auf der Basis von Vollkosten die Abrechungsmodelle der jeweiligen Einrichtung mit den nationalen Rahmenbedingungen zu akzeptieren. So ist schon das Herausrechnen von Steuern aus den Rechnungen nicht in den einzelnen Systemen zur Abrechnung in Deutschland implementiert. Wünschenswert wäre, wenn es einheitliche Regelungen zu Pauschalen in den unterschiedlichen EU-Programmen gäbe. Dies würde sehr zur allgemeinen Vereinfachung beitragen und die EU-Förderung insgesamt transparenter und nachvollziehbarer machen. Die Kostenübernahme an die vereinbarten Ergebnisse zu knüpfen ist nicht einfach zu beantworten und muß wenn überhaupt je nach Projektinhalt bewertet werden. Mit Forschungsprojekten ist eine solche Bestimmung nicht vereinbar, da es während der Projektlaufzeit zu Unwägbarkeiten kommen kann und Forschung nicht kalkulierbar ist. Die Frage ist dann, wie Ergebnis bei einem Forschungsprojekt definiert wird. Anders verhält es sich bei Projekten an deren Ende z.B. eine wissenschaftliche Konferenz steht und als Ergebnis messbar ist. • Gemeinnützigkeit (Art. 109.2 HHO und Art. 165 DB): EU-Finanzhilfen dürfen keinen Gewinn für den Empfänger erzeugen, da sie keinen wirtschaftlichen Zweck verfolgen, sondern lediglich einen Anreiz zu Aktivitäten schaffen sollen. Dies führt häufig zu Missverständnissen zwischen der Kommission und den Mittelempfängern sowie zu einer übermäßigen Verwaltungslast. Frage 4: Sollten die Bestimmungen sich strikt an den Grundsatz der Gemeinnützigkeit halten oder sollte es diesbezüglich eine gewisse Flexibilität geben? Können Sie Beispiele für bewährte Praktiken anderer öffentlicher Stellen nennen?

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Antwort 4: Es sollte nach wie vor kein Gewinn erzielt werden mit den EU-Finanzhilfen. Dieses sollte auch weiterhin bei der Berechung von Pauschalen Berücksichtigung finden. Da es sich bei den Pauschalen um Durchschnittswerte handelt, sollte dem jeweiligen Projektpartner bei zu großer Abweichung zu seinen Ungunsten die Möglichkeit gegeben werden, auf der Basis eines vergleichbaren Nachweises abzurechnen. • Obergrenzen für Finanzhilfen von geringem Wert: Die derzeitigen Bestimmungen zu Finanzhilfen müssen vor allem mit den Grundsätzen der Ko-finanzierung (Art. 172.1 DB), der Gleichbehandlung und des fairen Wettbewerbs (Art. 173 DB) übereinstimmen. Es besteht jedoch eine gewisse Flexibilität für Finanzhilfen von "geringem" Wert (< 25 000 EUR Art. 172.3 DB und Art. 173.2 DB) bzw. für Finanzhilfen von "sehr geringem" Wert (< 5 000 EUR Art. 114.3 HHO und Art. 175b DB). Frage 5: Welcher Wert wäre nach Ihrer Auffassung für Finanzhilfen von geringem und sehr geringem Wert angemessen? Antwort 5: nicht relevant. • Finanzielle Stabilität der Antragsteller von Finanzhilfen: Die derzeitigen Bestimmungen sehen eine allmähliche Verringerung der als Betriebskostenzuschuss gewährten Finanzhilfen vor (Art. 113.2 HHO), insbesondere um die Empfänger dazu zu ermutigen, ihre Eigenmittel auf eine breite Basis zu stellen. Aus ähnlichen Gründen wird die Dauer von Rahmenpartnerschaftsabkommen (Art. 163 DB), die eine langfristige Form der Zusammenarbeit mit Mittelempfängern darstellen, begrenzt. Solche Bestimmungen könnten mit dem Ziel überprüft werden, die bestmögliche Balance zwischen dem Bedarf an finanzieller Stabilität und dem Risiko von einer zu großen Abhängigkeit von EU-Mittel zu finden. Frage 6: Inwieweit und auf welche Weise könnten die Bestimmungen betreffend der als Betriebskostenzuschuss gewährten Finanzhilfen flexibler sein? Was ist Ihre Ansicht zur Dauer der Rahmenpartnerschaftsabkommen? Antwort 6: Nicht relevant für Forschungseinrichtungen in Deutschland • 'Finanzhilfen in Kaskaden' ('cascading' grants) - unter Einbeziehung von Dritten: Die Möglichkeit für einen Empfänger, einen Teil seiner Finanzhilfe durch Finanzhilfen an Dritte weiterzugeben, ist derzeit strikt begrenzt (Art. 120 HHO und Art. 184a DB), insbesondere um eine angemessene Überwachung und Kontrolle der öffentlichen Mittel durch die Kommission zu gewährleisten. Frage 7: Können Sie konkrete Beispiele und Arten von Maßnahmen nennen, bei denen die strikte Begrenzung betreffend 'Finanzhilfen in Kaskaden' dazu geführt hat, dass das Ziel einer Maßnahme nicht erreicht werden konnte? Antwort 7: Die Vergabe von Unteraufträgen sollte auch weiterhin die Ausnahme bleiben.

Leibniz-Gemeinschaft, Eduard-Pflüger-Str. 55, 53113 Bonn, Deutschland www.wgl.de

2 – DIE ABWICKLUNG VON FINANZIERUNGSVORGÄNGEN DURCH DIE KOMMISSION Hintergrund: Die Abwicklung öffentlicher Auftragsvergabe und Finanzhilfen durch die Kommission ist so gestaltet, dass sie Risiken für Fehler, Unregelmäßigkeiten und Betrug minimiert und eine strikte und angemessene Überwachung und Kontrolle der öffentlichen Mittel gewährleistet.

In der Praxis können Regeln für übermäßige Bürokratie und Kontrollen verantwortlich sein. Die Kommission überprüft, ob und in welcher Weise solche Regeln angepasst werden können, um das richtige Gleichgewicht zwischen dem Interesse der öffentlichen Mittel und einer effektiven Projektverwaltung zu schaffen. • Vorfinanzierungen an die Mittelempfänger (Art. 5a HHO): Diese Zahlungen werden bis zur vollständigen Durchführung der Maßnahme als Eigentum der Gemeinschaften betrachtet. Demzufolge sind die aus diesen Zahlungen erwirtschafteten Zinsen dem EU-Haushalt rückzuerstatten. Dies sorgt für administrative und finanzielle Formalitäten (gesondertes Bankkonto, lückenlose Aufzeichnung der Abhebungen…) und Kontrollen. Frage 8: Welche alternativen Lösungen könnten aufgrund Ihrer Erfahrung für die Vorfinanzierung vorgeschlagen werden, ohne dass die Kontrolle öffentlicher Gelder unterlaufen würde? Antwort 8: Die Einrichtung von Zinskonten sollte nicht verpflichtend sein, um evtl. Zinsen für die Vorfinanzierung von Zuwendungen zu erwirtschaften. Der Aufwand steht nicht im Verhältnis zu dem Nutzen, da oftmals die Zinsen manuell errechnet werden müssen. Hinzu kommt, dass es im Umkehrschluß dann auch gestattet sein muß, Verlustzinsen gegenzurechnen, die bei den Einrichtungen immer dann entstehen, wenn die nächste Vorauszahlung verzögert eingeht und die Einrichtungen in Vorleistung treten müssen. Zudem sollte die zumindest anteilige Vorauszahlung von Finanzhilfen auch in anderen EU-Programmen (LIFE+, Interreg, Strukturfonds) die Regel sein. In diesen Programmen müssen die Einrichtungen immer in Vorleistung gehen, was u.U. die Teilnahme an diesen Programmen unmöglich macht. Auch hier ist eine Vereinheitlichung geboten. • Vorfinanzierungs-Garantien (Art. 152 DB): Diese Garantien sind erforderlich, um das Risiko für den Verlust von EU-Mitteln zu verringern, falls der Empfänger – sollte er zur Rückzahlung der Vorfinanzierung verpflichtet sein – insolvent wird oder die Mittel aus anderen Gründen nicht zurückerstatten kann. In der Regel wird der vorfinanzierte Betrag jedoch durch die Bank blockiert, welche die Bürgschaft leistet und dadurch der Vorteil der Vorfinanzierung beseitigt. Frage 9: Welche anderen Mechanismen sind denkbar, die einen angemessenen Schutz der Gemeinschaftsmittel sicherstellen? Antwort 9: Ein Garantiefonds, wie im 7. Forschungsrahmenprogramm eingerichtet, kann den Schutz der Gemeinschaftsmittel gewährleisten.

Leibniz-Gemeinschaft, Eduard-Pflüger-Str. 55, 53113 Bonn, Deutschland www.wgl.de

• Schwellenwerte für Aufträge von geringem Wert (Art. 129 DB): Unterhalb bestimmter Schwellenwerte ist das Verfahren vereinfacht, so dass Aufträge auf der Grundlage eines einzelnen Angebots vergeben und Zahlungen in vereinfachter Weise gegen Rechnung vorgenommen werden können. Frage 10: Glauben Sie aufgrund Ihrer Erfahrungen, dass die derzeitigen Schwellenwerte noch immer angemessen sind oder sollten diese erhöht werden? Wenn Sie aus Ihrer Sicht zu erhöhen sind, warum? Antwort 10: Die Werte liegen zum Teil über den lokalen gültigen Schwellenwerten und sollten entsprechend beibehalten werden. • Verwaltungsaufwand für die Antragsteller (vor allem Art. 143 DB, Art. 172c DB und Art. 138c DB): In der Regel werden Antragsteller für eine Finanzhilfe oder einen öffentlichen Auftrag dazu aufgefordert, detaillierte Information über ihre Organisation einzureichen sowie eine umfassende Beschreibung ihres Vorhabens/Angebots vorzulegen. Um die Erfüllung dieser Anforderungen zu erleichtern, sehen die derzeitigen Bestimmungen die mögliche Verwendung von 'e-tools' vor. Allerdings wird von diesen Möglichkeiten in der Praxis nur wenig Gebrauch gemacht und zwar aus technischen Gründen, die unter anderem mit der Authentifizierung von Dokumenten zusammenhängen. Im Bemühen den Verwaltungsaufwand zu reduzieren hat die Kommission auch die Möglichkeit geschaffen, das Verfahren zur Gewährung von Finanzhilfen in 2 Schritten durchzuführen (Art. 178 DB) und nur jene Antragsteller zur Einreichung aller Unterlagen aufzufordern, die mit ihrem Antrag am wahrscheinlichsten Erfolg haben werden. Diese Prozedur vermindert den Verwaltungsaufwand, verlängert aber auch das Auswahlverfahren erheblich. In Anbetracht dessen könnte eine Idee zur weiteren Reduzierung des Verwaltungsaufwands sein, eine besondere Kennzeichnung derjenigen Organisationen einzuführen, die bereits erfolgreich ein Projekt und/oder einen Auftrag durchgeführt haben, damit diese nur noch jene Unterlagen einzureichen haben, die für den neuen Antrag relevant sind. Frage 11: Wie könnte das Antragsverfahren für Finanzhilfen und öffentliche Auftragsvergabe weiter verbessert werden? Antwort 11: Eine Verbesserung und damit Vereinfachung könnte in Zukunft dadurch erzielt werden, dass mit öffentlichen Mitteln institutionell geförderte Forschungseinrichtungen bei der Beteiligung an Programmen auf europäischer Ebene einheitlich als „Öffentliche Einrichtungen“ anerkannt werden. Derzeit wird im Forschungsrahmenprogramm danach unterschieden, ob eine Einrichtung nach öffentlichem oder Privatrecht errichtet worden ist. Im letzteren Fall wird sie nicht als „öffentliche“ Einrichtung anerkannt sondern, als „Forschungseinrichtung“, was mit Nachteilen verbunden ist, die nur durch eine Garantieerklärung des Landes abgewendet werden können. In anderen Programmen werden Forschungseinrichtungen per se als öffentliche Einrichtungen anerkannt, unabhängig davon nach welcher Rechtsform sie errichtete wurden. In diesem Punkt wäre eine Vereinheitlichung wünschenswert und geboten. Im Bereich der Finanzhilfen könnte eine Vereinheitlichung der Regeln für verschiedene Programme zu einer Verbesserung der Transparenz und Akzeptanz führen. Durch die Nutzung eines einheitlichen Tools zur Einreichung würde die Einarbeitung in verschiedene Tools für verschiedene Programme wegfallen. Ebenso müssten entsprechende

Leibniz-Gemeinschaft, Eduard-Pflüger-Str. 55, 53113 Bonn, Deutschland www.wgl.de

Referenzdokumente nicht für verschiedene Programme verschiedener Generaldirektionen eingereicht werden. Die Vergabe einer Registrierungsnummer für EU-Anträge ist wünschenswert. Zurzeit gibt es die PIC-Nummer der Generaldirektion Forschung, die PADOR-Nummer für Programm aus dem Bereich External AID und in anderen Programmbereichen gibt es keine Nummer. Wenn die Beteiligungsregeln mit den Financial Guidelines für ein Programm vorliegen, sollte dieses auch für alle Programmbereiche gelten, die unter dem Dach des Programms neu entwickelt werden. Hier sind die Joint Technology Initiatives im Forschungsrahmenprogramm ein negatives Beispiel. Durch die eigenen Rahmenbedingungen und Ausschreibungsmechanismen sind die Programme intransparent, verursachen einen erheblichen Mehraufwand in der Antragstellung und führen nicht zu einer Akzeptanz in der Wissenschaftslandschaft. Eine Vereinheitlichung bei den Antragsfristen und den Antragsverfahren wäre wünschenswert. Derzeit ist im Rahmenprogramm zu beobachten, dass ein Aufruf in unterschiedliche Teilaufrufe mit abweichenden Einreichungsfristen und unterschiedlichen Antragsverfahren (einstufig-/zweistufig) gegliedert ist, was zu Verwirrung bei den Antragstellern und zur Unzulässigkeit von Anträgen führen kann.

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Public consultation on the review of the Financial Regulation General proposals/comments:

A) Article II.17 of ECGA prohibits generating any profit for the beneficiaries. This strict rule conflicts sometimes with the "arm's-length-principle” (derived from § 1 AstG). Sub Companies (beneficiaries) who e.g. participating in projects for the Research Framework Programs and deduct their project related costs partly (e.g. funding ratio 50%) to the EU and to their Headquarter (HQ), shall charge the 50% to (HQ) at “arm’s-length”. In practice this means, that the beneficiary has to charge the occurred costs with intercompany mark-up of e.g. 5% to the cost covering company (in this case HQ). Hereby the rules of FP7 Framework are contrary to the legal demand and guide to unresolved problems by affected companies.

B) Seventh Framework Program comprised changed criteria for average personnel costs. The rule to calculate the average personnel costs for each personnel category creates some issues:

- The actual used systems are often not constructed to distinguish the different type of employee costs which occurred on one cost center. Manufacturing of this functionality for affected legal entities is often time consuming, costly and especially for global companies against the IS/IT strategy as they try to use as much as possible standardized systems through the whole company group.

This comes to that we are actually not able to fulfill the requirements for certificate on methodology (CoM or CoMAV) and has to switch to the second approach of using individual, actual costs per employee. This alternative is also very insufficient as it creates data protection issues within the company and requires much more administrative workload. We propose to accept the usage of average personnel cost per cost center which is the regular system set-up and the most common and examined principle in practice.

C) Guidelines–audit-certification Part I, No.1 “The ideal target for the provision of this kind of certification is typically beneficiaries of multiple Grant Agreements which have an established methodology for calculating their rates.” We, a sub company of an international organization working in multiple EU-funded projects. Nevertheless we are not able to apply for a Certificate on Methodology as defined in Part I, No.5.2.1. It is proposed that the Commission is reducing the participations of FP6 contracts with an EC contribution equal or above EUR 375 000 as application criteria for a Certificate on Methodology from 8 to 5 Grant Agreements. Another reduction is proposed for the beneficiaries who don’t meet the FP6 criteria from 4 to 3 FP7 Grant Agreements before 1st January 2010 with an EC contribution equal or above EUR 375 000.s And at least a reduction from 8 to 5 participations in FP7 Grant Agreements with an EC contribution equal or above EUR 375 000 at anytime during the implementation of the FP7.

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EU Liaison Offices, Niedersachsen, Germany __________________________________________________________________________

REVIEW OF THE FINANCIAL REGULATION

Public consultation Organisation name and address EU Liaison Offices, Niedersachsen, Germany c/o Technische Universität Braunschweig EU-Hochschulbüro/European Office Pockelsstr. 14, 38108 Braunschweig Tel.: 0049 (0)531 391-4271, email: eu-buero@tu-braunschweig.de Background The EU Liaison Offices are counselling scientists from Higher Education Institutions from Niedersachsen (Germany) with regard to all EU programmes funding research or education activities. For more than 17 years, the Liaison Offices have been collecting experience in a wide range of EU programmes, such as the Framework Programmes for research and technological development (DG Research), the Research Fund for Coal and Steel, the Health Programme (formerly “Public Health”, DG SANCO), the Competitiveness and Innovation Framework Programme (DG Enterprise and Industry), the Lifelong Learning Programme (DG Education and Culture), Europe Aid Programmes, and the Structural Funds (DG Regional Policy). 1 – GRANTS Question 1: Are you sufficiently informed about upcoming calls for proposals in a timely manner? What improvements would you suggest? 1. In FP7 the calls for proposals are well publicised and clearly represented on the Cordis

site. In this regard, Cordis should act as a best practice example. 2. For the calls published by other DGs a single web page with information about all

open calls should be set up on the “europa.eu” site. This would be very helpful for the applicants, especially if the option of signing up for e-alerts when new calls are opened could be implemented.

3. The timescale for responding to calls is often too short, given the need for international partnerships to be developed. Therefore we suggest that a minimum of 4 months should be foreseen between the publication and the deadline of all EU calls.

4. Furthermore, the publication of a provisional schedule of all planned EU calls will help applicants to be prepared in a timely fashion. This should include a roadmap with topics for future calls especially in FP7.

Question 2: Should the rules be more flexible on co-financing requirements taking into account the type of actions and project managers? How could in-kind contributions best be dealt with, while adhering to the non-profit principle? 1. For Public Institutions a co-funding percentage of 50% or 60% (like RFCS or the

Health Programme) is a critical deterrent to participation. With such high co-funding rates, it is often very difficult for Public Institutions to take part in projects funded by these programmes.

2. The eligibility to account for staff time of employees paid directly by the contractor as co-financing should not be restricted to a certain percentage of the total costs.

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EU Liaison Offices, Niedersachsen, Germany __________________________________________________________________________

Question 3: Should the use of lump sums, flat rates become the norm rather than the exception? Should the rules allow for costs to be covered on the basis of expected outputs? If yes, can you provide concrete examples? 1. The use of lump sums and flat rates could significantly reduce administration for

applicants. But the calculation of the rates has to be justified and transparent. 2. The use of flat rates must remain optional (decision of the beneficiary at the time of the

contract negotiations) 3. The upper threshold for lump sums (25,000 Euro) should be raised to an amount

higher than the current ceiling to have the possibility for a further development of lump sum funding.

4. Flat rates for indirect costs (overheads) are well-proved. Nevertheless the ceiling amount of 7% is not realistic and should be noticeably increased. It is far from the actual overhead costs of all organisations. According to this a higher flat rate for indirect costs will not be in conflict with the non-profit principle. The FP7 special transitional flat rate of 60% approaches the real indirect cost much closer and can be regarded as best practise.

5. Indirect costs should be reimbursed on the basis of a flat rate for any grant including structural funds.

6. Covering the costs on the basis of expected outputs could be possible and helpful concerning concrete outputs like databases to be built up. But with regard to research and development activities measuring the performance of the project on the basis of expected outputs is difficult. The nature of R&D is that the actual outputs can not be 100% foreseen when signing the contract.

Question 4: Should the rules strictly adhere to the non-profit principle or should there be room for some flexibility in this matter? Do you have examples of good practices from other public authorities? 1. We recommend to adhere to the non-profit principle Question 5: What, in your view, would be the appropriate amount for low and very low value grants? 1. We have no comments on this question. Question 6: How could the rules on operating grants be more flexible? In which way? What are your views on the duration of framework partnership agreements? 2. We have no comments on this question. Question 7: Can you give concrete examples and types of actions where the strict limitation on cascading grants became an obstacle for achieving the goal of your action? 1. We have not experienced any problems with this limitation. We advocate to sustain the

actual limitation on cascading grants

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EU Liaison Offices, Niedersachsen, Germany __________________________________________________________________________

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2 - THE COMMISSION'S HANDLING OF FINANCIAL FILES Question 8: From your experience, what alternative solutions could be proposed for prefinancing payments while safeguarding tax payers' money? 1. For Public Institutions it is often impossible to use a bank account which generates

interest for the prefinancing because of national law. And where such accounts are possible, they often entail high costs and a lot of administrative work.

2. From our experience with EU-projects, we assume that the periods in which the organisations have a plus in their accounts because of the prefinancing balance the periods in which the organisations have to pay in advance, having a minus in their accounts until their costs will be reimbursed (which happens with the final payment often up to 1 year after the end of a project).

Question 9: What mechanism, other than pre-financing guarantee, could be explored while ensuring adequate protection of community funds? 1. The Financial Guarantee Fund as implemented in FP7 could be an example of best

practice. (Each participant will make a contribution to the guarantee fund of a percentage of the EC contribution, to be returned at the end of the project.)

Question 10: Based on your experience, do you think current thresholds are still adequate or should they be increased, and why? 1. We have no comments on this question. Question 11: How could the application procedure for both grants and contracts be further improved? 1. An electronic submission system for all European grants and tenders would be helpful

and timesaving. 2. A Participant Identification Code (PIC) as known from FP7 (URF) or the EuropeAid

programmes ( PARDOR) for all organisations/recipients that already have signed a grant agreement/contract with the EU would save a lot of paperwork for both recipients and the EC. One code should be used for the participation in all European programmes and tenders.

3. Forms should be focused on key information requirements. More detailed documentation (e.g. annual balance sheet) and signatures should only be required from the recipient of grants at the beginning of contract negotiations.

4. Realistic and transparent deadlines for the negotiation phase are essential on both sides, with a firm commitment to these on both sides. Under FP7, time to grant has been made more transparent, but there are often unclarities in terms of starting dates etc. which can hinder the recruitment of project personnel.

5. In FP7, specific programme cooperation, the same regulations should be relevant for all proposals (Cooperation projects and JTI) to increase the transparency for the applicants.

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UK Research Councils (RCUK) Response to the Consultation on the Review of the EU Financial Regulation This consultation response addresses the questions from a predominantly research perspective. The award of grants Q1. Are you sufficiently informed about upcoming calls for proposals in a timely manner? Seventh Framework Programme (FP7) The vast majority of the annual calls for proposals in FP7 are launched at the same time, alongside the publication of the annual work programmes. Although this might appear to be a simplification, it can have a negative impact on the management of the calls for administrators in beneficiary organisations and for intermediaries, as they are required to support a large number of calls simultaneously; thus, this is arguably not simplification from an external point of view. It would be preferable if a clear call timetable was published annually for each programme, but with the calls and deadlines themselves better staggered throughout the year. The time between the launch of calls and the deadlines is often as little as three months. This can be insufficient time in which to consolidate partnerships and prepare high-quality applications. Whilst thematic roadmaps can be helpful in terms of planning, it would be preferable to consider longer preparation time for collaborative research. A large number of calls with deadlines at similar times also puts unnecessary pressure on the system in terms of peer review and grant negotiation. Calls related to FP7 Related calls, such as those of Joint Technology Initiatives, Article 169 consortia and ERA-NETs, are not published in the Official Journal, since the OJ is restricted to those actions directly managed by the European Commission. This creates problems for participants as it is not always clear where information can be found. The Commission could consider a model where all calls of this nature would be systematically published on a single site. The same could also apply to the advertisement of the funded projects for infrastructures (I3s); this would enable researchers to easily access information on the infrastructures funded under these projects.

Calls for Tender There is a need for the development of clear, accessible information and guidance on the calls for tender, in particular in terms of how to apply for the tenders and how the tendering process is managed. Currently the implementation of calls for tender varies greatly across different Directorate Generals and so increased harmonisation and communication of the modes of implementation would be welcomed.

There is a need for further consultation with the EU research community at all levels on the issue of information provision.

Q2. Should the rules be more flexible on co-financing requirements taking into account the type of actions and project managers? How could in-kind contributions best be dealt with, while adhering to the non-profit principle?

There should be clearer rules on co-financing, consistently interpreted across all EU programmes.

As indicated in the FP7 Progress Report (April 2009), the Commission is looking to reach an agreement on the balance between trust and risk in research, which will include reviewing the tolerable risk of error; this work is very much welcomed.

It is also important that where the eligibility rules state that costs must be determined in accordance with the usual accounting and management principles and practices of the beneficiary, for example in the Framework Programme (FP7 Model Grant Agreement art. II.14.1.d), then these costs should be accepted, assuming that they meet the other eligibility criteria and that all ineligible costs are stripped out. It should not be necessary to change the accounting practices of beneficiaries for the sole purposes of the Framework Programme, or indeed any other programme. National rules and requirements should be given higher precedence than is currently the case.

The Commission should liaise closely with the Court of Auditors and other EU institutions in order to agree on a clear consistent interpretation of the Financial Regulation and its Implementing Rules, prior to its entry into force.

Q3. Should the use of lump sums, flat rates become the norm rather than the exception? Should the rules allow for costs to be covered on the basis of expected outputs? If yes, can your provide concrete examples?

Grants should continue to be based on ‘real costs’ as a default. Lump sums and flat rates should be a derogation only, and used in specific circumstances where deemed appropriate. There should be a better balance between flexibility, autonomy and control. This reiterates the point made in the UK Research Councils’ response to the FP7 simplification consultation that a consistent policy on defining and managing modes of funding should be developed.

Should lump sums or flat rates be deemed appropriate in another policy area, it should not be automatically assumed that this would also apply to the Framework Programme. Currently the use of flat rates, scale-of-unit costs, fixed amounts and lump sums does not remove the need for detailed checks, in particular in the case of ex-post audit; as a consequence there is much confusion over what evidence should be collected and retained for audit purposes.

The current indirect cost flat rate is 7% as a default. In terms of the move towards sustainability of funding, this rate can be considered too low in the context of research and related activities and, as such, the rate should be re-examined. Whilst it is recognised that the standard indirect cost rate is often exceeded, as in the case of collaborative research projects funded under FP7, clear rules on when and how this rate can be exceeded would be welcomed. This would lead to increased transparency and consistency across all programmes and would help beneficiaries to understand why a particular rate was applicable for any given area.

The term ‘outputs’ should be clearly defined and this should be consistently communicated across all programme areas. In research, successful output should be defined as a fully delivered project, and must not be about scientific ‘success’, as that potentially discourages risk and innovation. A project work plan should not require excessive monitoring by the European Commission; this highlights the need for a more trust-based system and more autonomy. Financial monitoring would of course continue to be necessary, but this should be light-touch. The Financial Regulation and Implementing Rules should be set up in such a way that will necessitate fewer checks whilst still meeting accountability

requirements. The ideal system might involve a combination of reporting on ‘outputs’ and finances, in moderation, without the excessive monitoring of either or both. There is a danger, however, that if the term ‘outputs’ is not clearly defined and if clear rules on its interpretation are not developed then there is likely to be increased confusion, in particular at the time of reporting. This in turn would result in increased burden to beneficiaries and Commission officials.

There should be a comprehensive review, and revision as necessary, of the EU staff regulations, to ensure that contractual conditions do not impact negatively on how research projects are managed. Research funding requires risk taking and trust, and this must not be hampered by staffing arrangements and personal liabilities that may lead to risk aversion or mistrust, and therefore to excessively rigid reinterpretations of the rules.

Q4. Should the rules strictly adhere to the non-profit principle or should there be room for some flexibility in this matter? Do you have examples of good practices from other public authorities?

The principle of non-profit should be maintained. However, increased flexibility over the treatment of pre-financing would be welcomed, for example by allowing non-interest-bearing bank accounts for co-ordinators in cases where this is their usual accounting practice. Where lump sums and flat rates are used these should implemented using appropriate correction coefficients so as not to disadvantage any groups of participants, and they should be calculated as a proxy of the real costs.

The Commission’s handling of financial files Q8. From your experience, what alternative solutions could be proposed for pre-financing

payments while safeguarding tax payers’ money?

An initial tranche of payment could be provided, in place of pre-financing. This could be paid on the condition that it will be fully auditable, but could remove the current obligations attached to pre-financing. If this is not feasible there could be a ‘no pre-financing’ option, where an institution could choose to be paid solely on delivery rather than up front. It should be noted that this will only work if it is a choice at the level of beneficiary. Given the collaborative nature of the majority of EU research projects it would be necessary to establish a clear procedure for how this would operate within a consortium, to avoid undue complication of the management of the grant.

In line with the rules laid out in the Model Grant Agreement for FP7, a beneficiary’s normal accounting practices should take precedence in the management of any payment, either pre-financing or interim/final payments. If a beneficiary does not as their normal practice use interest-bearing bank accounts, then this should be accepted.

Q11. How could the application procedure for both grants and contracts be further improved?

Procedures and systems could be further improved by increasing consistency across all programmes. If deviation from a standard procedure is necessary, to take into account specificity of a particular programme area, this should be cleary explained and communicated to all participants. Where differences occur they must be driven by what is needed in order to create optimal conditions for the activity concerned, and must not lead to unnecessary additional administrative complexity. The Commission could further investigate procedures in place at national level.

On the labelling system, the introduction of the Participant Identification Codes in FP7 has to some extent fulfilled this need. There would be strong encouragement to roll this system out across all programmes, providing that it can be guaranteed that: it works smoothly and is accurate; it can be changed and adapted if required to meet the needs of each programme; and there is better communication with beneficiaries than at present in FP7.

It is hoped that ‘paperwork’ will become obsolete, with the introduction of robust e-tools. There could be greater recognition of national systems, where e-document storage and e-tools are being increasingly used.

Applicants should be kept regularly informed of their progress in the application process, as promised prior to FP7 but not yet delivered. The overall time to grant should be shortened. The negotiation process remains lengthy and there is a need for clear guidelines to be produced covering the aim of the negotiation phase, and the requirements and rights of both the European Commission and the beneficiaries.

There is a need for further consultation with the EU research community and national funders on the issue of single-stage versus two-stage submission and evaluation. Any changes must be genuinely in the interest of beneficiaries.

General Comments If the Financial Regulation is deemed not workable in terms of the requirements of research funding, which is recognised as a very specific area where there is a need to take risks and to work flexibly, then the European Institutions should be open to exploring the need for a separate Regulation for research. Overall, robust rules should be developed on the basis of a coherent rationale, and these rules should be clearly communicated and consistently interpreted.

There should be a distinction made between any problems created by the Financial Regulation and its Implementing Rules and any created by interpretation – and re-interpretation and misinterpretation – of these. Further consultation to identify the problems created by the actual Regulation and Rules as opposed to those that are created by subsequent interpretation would be welcomed. Many problems could be alleviated if guidance was clearer. To reiterate points made in the UK Research Councils’ response to the recent FP7 simplification consultation, there is a need for better training of project officers, as well as provision of clear information notes for participants to explain how and why the rules vary between funding schemes; this will help participants to better understand the EU funding landscape and will support institutions in putting systems in place.

Also as stated in the simplification consultation response, the Commission should explore the possibility of making exceptions to the current Financial Regulation for the following areas: recovery of interest on pre-financing; and eligibility of VAT and other indirect taxes. A cost-benefit analysis should assess the gains of the current regime against its administrative burden.

Beneficiaries should be allowed to use their own accounting systems and practices, assuming that these are sufficiently robust and in line with national rules, as well as being compliant with the basic rules and principles of the funding concerned, including cost eligibility. Adaptation of robust and workable systems to fit with requirements of a particular programme is often unnecessary, complex and resource intensive. An example of this is time recording, where a beneficiary may have a system in place yet may currently have to establish a parallel system for EU funding, thus duplicating effort.

Where actions are open to beneficiaries beyond Europe, such as in the case of research where there is clear benefit in global collaboration, the Regulation and Rules should facilitate rather than hamper ‘third country’ participation. Whilst recognising that this is European funding, on which Member States take decisions, there should be clear procedures for consultation with actors from outside Europe in developing programmes and their specific rules.

A ‘clearing house’ for queries related to interpretation of the Regulation and Rules should be set up in order to provide a definitive answer in the case of discrepancies, or to mediate in the case of disagreement. Answers must be given in a timely manner and once an answer has been provided for an individual case it should not be subsequently over-ruled by the European Commission or its auditors. Decisions should not be retroactive, and whilst it is recognised that there needs to be some flexibility with the rules, this must not lead to confusion in any specific case.

UK Research Office 17 December 2009

C059 - 18.12.2009 DK

In answer to the public consultation on the Financial Regulations 2009:

1. Are you sufficient informed about upcoming calls for proposals in a timely manner? What improvements would you suggest? a. The website: ”eu.europe.eu/culture/call-for-proposals/call98_en.htm” is easy access able and the relevant documents are easy to find.

2. Should the rules be more flexible on co-financing requirement taking into account the type of actions and project managers? How could in-kind contributions best be dealt with, while adhering to the non-profit principle? a. An important part of our project is the contribution in kind where venues in more European countries contribute by buying technique, accommodation and food for the artists of the project when they visit that particular venue on tour. b. For our organisation contribution in kind make up an important part of our economy of the project and thus it would give our project more flexibility if the contribution in kind where recognized as eligible cost and thus income. c. A way of minimizing the risk of making the co-financing more flexible is for the commission to set an average amount for each country, that is when visiting venues in fore example Poland you can register the contribution in kind as co-financing if you register this fixed amount. That is, accommodation and food is XX EURO per night per person in Poland.

3. Should the use of lump sums, flat rates become the norm rather than the exception? Should the rules allow for costs to be covered on the basis of expected outputs? If Yes, can you provide concrete examples? a. The flat rate system works well for our organisation.

4. Should the rules strictly adhere to the non-profit principle or should there be room for some flexibility in this mater? Do you have examples of good practices from other public authorities? a. If you are an organisation, which applies the culture programme for a strand 2 grant. You are unable to regenerate your equity after a year when you due to the financial situation of the world (other contributors might not be able to contribute as much as expected at the beginning of the project). b. Flexibility in the non-profit rule would give an organisation an opportunity to regenerate equity after a year, where a project had to draw on the organisations equity.

5. –What, in your view, would be the appropriate amount for low and very low value grants?

6. How could the rules on operating grants be more flexible? In which way? What are your views on the duration of framework partnership agreements? a. The multiannual framework agreement gives the beneficiaries an opportunity to plan multi annually and thus create a more targeted development of the individual project.

b. The gradual decrease in grants would not be so big a problem if grants were a fixed amount corresponding to the expected output of the project rather than a percentage of the costs. A fixed grant amount would give more financial certainty for an organisation during the project period. c. As it is now a minor expansion of the total costs, during the project period, does not give a higher EU grant and thus more grants need to be granted by other contributors however a saving on the total costs diminishes the EU grant and also more grant need to be granted by other contributors. d. To aid beneficiaries so they are able to concentrate more on the content of the project; I suggest the Commission to grant fixed amount to projects. 7. Can you give concrete examples and types of actions where the strict limitation

on cascading grants became an obstacle for achieving the goal of your action?

8. From you experience, what alternative solutions could be proposed for pre financing while safeguarding tax payer’s money?

9. –What mechanism, other then pre-financing guarantee, could be explored while ensuring adequate protection of community funds?

10. Based on your experience, do you think current thresholds are still adequate or should they be increased, and why?

11. How could the application procedure for both grants and contracts be further improved?

a. The flat rate system and the multiannual grant agreements have reduced the paper work for our organisation. We will not be interested in initiatives, which increase the duration of the selection process. With thanks! European Jazz Orchestra, Swinging Europe Denmark Email: jazz@swinging-europe.dk

C060 - 18.12.2009 NL

Note: The registration as an organisation, which is preferred according to the website, is too ambitious. We do not see the point why so much detailed information is required to be accepted as a registered organisation. Deltares is registered in the URF, and this requested registration is an annoying duplication of efforts, in particular since it is not clear why the detailed information is requested. European Research Affairs, Deltares, The Netherlands Question 1: Are you sufficiently informed about upcoming calls for proposals in a timely manner? What improvements would you suggest? Concerning the FP grants, information is well published and accessible. However, several older and newer EC Instruments are poorly visible: Some ERA-net calls on Netwatch, structural funds extremely disperse, etc. Some streamlining would be good. Question 2: should the rules be more flexible on co-financing requirements taking into account the type of actions and project managers? How could in-kind contributions best be dealt with, while adhering to the non-profit principle? Some flexibility would be welcomed, but the emphasis first should be on harmonisation between actions:

• Why are there for example different rules for indirect costs for different actions? • Why are they capped differently for different instruments / types of actions? How does

the Commission think an institute can be maintained if indirect costs are capped? The rules define which costs are eligible and how they may be financed, this seems to indicate that the non-eligible costs may not be financed externally and thus create a loss. This may create non-bearable financing requirements for independent (non-governmental) research organisations and SME's.

The only flexibility which we would find useful is that organisations can opt between 1) 100% payment of direct + capped indirect 2) x% payment of (direct + real indirect costs) This could be carried out neutral from a budgeting viewpoint of the EC, but will improve the capability of organisations to participate, given the aforementioned consideration about losses. We are confused on how what is meant by taking into account “project managers”, as is stated in the question. If flexibility is considered, flexibility should account for types of institutions. Question 3: Should the use of lump sums, flat rates become the norm rather than the exception? Should the rules allow for costs to be covered on the basis of expected outputs? If yes, can you provide concrete examples? Lump-sums may be reasonable for issues such as Travel and Subsistence, if they follow the UN schedule and considering distance. They are not reasonable on T&S if a new and different scheme is developed. Lump-sums are also adequate if the work concerns a clearly specified product. It is not logical to carry out research activities based on lump-sums. Flat rates will result in in-equality. First of all, for some participants indirect costs are covered e.g. by governments. Other organisations have, due to their role in society quite high indirect costs. Hence, if flat rates are considered, at best this should be done for different groups differently. The last question in this set is unclear.

Question 4: Should the rules strictly adhere to the non-profit principle or should there be room for some flexibility in this matter? Do you have examples of good practices from other public authorities? There should be no room for flexibility here. Profits should be generated as a result of the action, not in the action. Question 5: What, in your view, would be the appropriate amount for low and very low value grants? The complexity of the rules, though necessary to prevent abuse, causes a relatively high costs for administration and management in low value grants. Nevertheless smaller projects with lower costs may be efficient to start up and enhance international cooperation. The cut of value below which one considers other financial may be dependent on the type of action, in particular the number of required partners. Question 6: How could the rules on operating grants be more flexible? In which way? What are your views on the duration of framework partnership agreements? No opinion Question 7: Can you give concrete examples and types of actions where the strict limitation on cascading grants became an obstacle for achieving the goal of your action? No Question 8: From your experience, what alternative solutions could be proposed for prefinancing payments while safeguarding tax payers' money? Make pre-financing a voluntary action, but only after speeding up the process of payments after reporting. Avoid that the coordinator (in research projects) forwards all the pre-financing budget at once. Question 9: What mechanism, other than pre-financing guarantee, could be explored while ensuring adequate protection of community funds? - Question 11: How could the application procedure for both grants and contracts be further improved? -

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Review of the Financial Regulation – Response to the Public Consultation –

Koordinierungsstelle EG der

Wissenschaftsorganisationen

December 2009 Financed by the German Research Foundation (Deutsche Forschungsgemeinschaft, DFG), Koordinierungsstelle EG der Wissenschaftsorganisationen (European Liaison Office for German Research Organisations, KoWi) facilitates successful participation of researchers located in Germany within the EU Framework Programme for Research and Development. For that purpose, KoWi acts as a helpdesk for German universities and research organisations by providing information on EU funding as well as hands-on advice and training courses on all aspects of the Framework Programme. With offices located in Bonn and Brussels, KoWi works closely with national authorities on federal and 'Länder' level as well as with the relevant EU institutions. In addition, KoWi cooperates with liaison offices of other European research organisations within IGLO (Informal Group of R&D Liaison Offices). KoWi welcomes the opportunity to respond to the Commission’s consultation on the review of the Financial Regulation and its Implementing Rules.

2 KoWi Response to Public Consultation EU Financial Regulation December 2009

1 – GRANTS

Question 1 Are you sufficiently informed about upcoming calls for proposals in a timely

manner? What improvements would you suggest? Information on annual work programmes for grants should already be made available officially before the actual adoption of the work programme and the actual publication of the calls for proposals. This would significantly improve planning for potential grant applicants. The current timeframe of roughly three months during which calls are open for the submission of proposals is frequently considered too short a duration to form a sound consortium and to draft an excellent proposal. If an early publication of the work programme is not feasible an official pre-announcement of the exact publication date of the work programme and the calls for proposals could be envisaged. In addition, this pre-announcement should include a list of designated activities/ topics to be called. Additionally, the publication of biennial work programmes for grants, as already practiced by DG INFSO for FP7 calls within the legal framework of FR, as well as the Roadmaps drafted for the SSH priority for 2011-2013 and for the Public Private Partnerships created on the basis of the European Recovery Plan should be considered as good practice for all thematic priorities of FP7. In this context, it should also be mentioned that previous work programmes for various thematic priorities within the Framework Programme included indicative lists of topics for future calls. This practice might be readopted. Overall, it would be preferable if the Financial Regulation would be modified in order to provide for the adoption of multi-annual work programmes for grants as well as the publications of multi-annual calls for proposals. All calls for proposals within FP7 (including calls of the various Joint Technology Initiatives) should be made available on the CORDIS website in order to ensure publicity. This should also include all ERA-Net/ERA-Net+ calls published on a national level, which could either be made available jointly on CORDIS or on an alternative ERA-Net website. The same should apply to calls of the European Institute for Innovation and Technology (EIT), which are directly addressed to research performers in academia and industry. Information on all calls for proposals should be structured in a similar manner. All documents and information material required for the submission of proposals (Work Programme, Guide for Applicants etc.) should be made available for download on the CORDIS website for all funding schemes (including JTIs). In order to guarantee further transparency the Commission might pre-announce the date of publication of the results of specific calls for proposals. Increased visibility of the outcome of calls could be achieved by displaying those projects selected for funding in a more prominent manner on the CORDIS website, for example on the entry page of CORDIS.

3 KoWi Response to Public Consultation EU Financial Regulation December 2009

Question 3 Should the use of lump sums, flat rates become the norm rather than the

exception? Should the rules allow for costs to be covered on the basis of expected outputs?

A broader introduction of the reimbursement by means of lump sums and flat rates should be carefully considered. So far, the introduction of lump sums (e.g. the reimbursement of ICPC countries on the basis of lump sums) and flat rates (e.g. the possibility to use flat rates to cover subsistence costs incurred by grant holders during travel) within FP7 has not achieved the envisaged objective of simplifying the management of grants. Lump sums for the reimbursement of beneficiaries from ICPC countries have in practice proved too low to cover all project expenses for ICPC partners. Therefore, despite the advantage of reduced administrative procedures this option is rarely chosen by project partners form those countries. What is more, further introduction of lump sum and flat rate funding seems appropriate only if no further ex-post auditing (Certificates on Financial Statements and audits carried out by Commission’s own auditors) is required from the grant holder. Due to the strict application of the non-profit rule (acc. to Art. 109 FR; Art. 165(2) IR) grant holders have to verify non-profit for each grant. Grant holders are thus required to produce real cost accounts demonstrating that no less than the value of the lump sum received has been spent. This ex-post verification of non-profit is e.g. executed with regard to Marie Curie-grants thereby undermining the very rationale behind lump sums. Before the further use of this funding method is considered the strict interpretation of the non-profit rule should be handled with more flexibility or not be applied at all when grants are paid via lump sums or flat rates. In addition, it would be helpful if the Commission were able to streamline its handling of ex-post verification of the non-profit of lump sums and to harmonise the information provided on the issue by different DGs and REA. A simplification of the current calculating method for lump sums by means of extensive mapping of statistical data on a biennial basis and through the final adoption of a Commission decision might facilitate a wider use of lump sums. For example, lump sums might be adopted by the authorising officer for a longer period of time and by a reduced sampling of data. Furthermore, the upper threshold for lump sums set at the moment at 25,000 EUR above which the lump sum must be provided for by a Basic Act should be raised to an amount substantially higher than the current ceiling in order to enable further implementation of lump sum funding. As far as the performance-based distribution of grants is concerned this funding principle should not be applied to the funding of frontier research due to its inherent high-risk nature. Performance-based grants seem more appropriate for activities that include a clear demonstration aspect, such as research projects funded within some FP7 thematic priorities (e.g. theme 5 “Energy” or theme 7 “Transport”), which have to adhere to deployment and business plans. Within those project types clear-cut targets have to be met by the grant holder. This might enable the Commission to carry out performance-based project reviews.

4 KoWi Response to Public Consultation EU Financial Regulation December 2009

However, the Commission might consider the introduction of a grant scheme that would allow project consortia who are funded within the Research Framework Programme and who have been able to provide tangible research results within the lifetime of their project easy application for follow-up project activities. These activities should mainly focus on outreach and dissemination of results, e.g. preparing and filing of a patent application, conference organisation and publications, but could also include (limited) further research activities or the development of a prototype if these would be considered as worthwhile. Application and evaluation procedures might be based on those developed for the Marie Curie European Reintegration Grant scheme in FP6. For Reintegration Grants they included a permanently open call for proposals with specific cut off-dates for each year with the possibility to submit applications within the last 6 months of the running project and with fast peer review. Applicants were granted a lump sum in order to cover costs incurred in relation to the project and were subject to slim reporting mechanisms. In order to increase the appeal of such funding for research consortia, it would be necessary to raise the ceiling of the lump sum awarded to a minimum of 150,000 EUR (see above).

Question 4 Should the rules strictly adhere to the non-profit principle of should there be

room for some flexibility in this manner? With regard to the strict application of the non-profit rule concerning the use of lump sums and flat rates and the requirement for the recording of actual costs within some funding schemes of FP7 the non-profit rule should be handled with more flexibility or not be applied at all when grants are paid via lump sums or flat rates (see Question 3).

5 KoWi Response to Public Consultation EU Financial Regulation December 2009

2 – THE COMMISSION’S HANDLING OF FINANCIAL FILES

Question 8 What alternative solutions could be proposed for pre-financing payments while

safeguarding tax-payer’s money? First of all, clarification on the part of the Commission concerning the requirements for opening an interest bearing bank account is badly needed. In the past, individual units within DG RTD, different DGs and the REA have provided conflicting information concerning the requirement of opening an interest bearing account and the possibility for exemption from the regulation for individual institutions. Also, different Commission bodies have handled the issue in a different manner in relation to individual grant holders. This has led to much confusion in the past. For example, projects under the management of REA have for some time been required to open interest bearing accounts, whereas, until recently, projects under the supervision of DG RTD were not. Therefore, clear and consistent guidelines must be issued as soon as possible. It should be pointed out that, in Germany, a majority of research institutions is unable to operate separate bank accounts for individual projects which yield interest. Even in cases in which the opening of an interest yielding account is legally possible the administrative procedure is very burdensome. Most universities have to rely on staff members to mechanically calculate the interest yielded per each individual project. Therefore, the Commission should carefully consider the question of cost-benefit with regard to the administrative work required by the grant holder as well as by the Commission. It should likewise take into account that in many cases the interest to be recovered by the Commission is very low. Due to the above, serious thought should be given to the idea of abolishing the regulation of recovering interest yielded by grant holder accounts. Alternatively, the Commission might consider the option of raising the applicable ceilings of what are considered as “significant” amounts for the recovery of interest yielded from pre-financing. According to IR a significant amount is currently defined as an amount above 750,000 EUR. This should be increased substantially to exempt more grant holders from the obligation to open interest bearing accounts. It should be noted that according to the current definition of eligible costs the grant holder is not entitled to recover default interest from the Commission unless the transfer of pre-financing is delayed beyond the time limit for financial transactions currently set at 45 calendar days. However, costs are incurred in relation to the project from the start date of the project (often equivalent to the date of entry into force of the Grant Agreement). Therefore, the grant holder will inevitably overdraw the bank account for her/his project in order to start with activities at the very beginning of the project. This will lead to default interest being claimed by the bank and hence produces supplementary non-eligible costs for the grant holder. Therefore, it should be possible for the beneficiary to recover the default interest for the period between the start date of the project and the date when pre-financing is transferred by the Commission to the interest bearing bank account. For those grants which require the opening of interest bearing accounts bank charges accrued for the keeping of such accounts should be redefined as eligible costs within the applicable financial regulations (e.g. FR, Rules for Participation).

6 KoWi Response to Public Consultation EU Financial Regulation December 2009

Question 9

What mechanism, other than pre-financing guarantee, could be explored while ensuring adequate protection of community funds?

The introduction of the Guarantee Fund has proved to reduce administrative hurdles for German research organisations and can in that respect be considered as successful simplification of the procedure of ex-ante financial capacity checks.

Question 11 How could the application procedure for both grants and contracts be further

improved? The management of grants could be further improved by ensuring transparency regarding the legal regulations and administrative procedures of ex-post audits. This could be facilitated through the publication of official guidelines outlining procedures on the CORDIS website. Value added tax, which is currently classified as a non-eligible cost within FP7 despite its inclusion in the list of eligible cost in FR, should also be regarded as eligible cost when it cannot be refunded to the beneficiary according to the applicable national legislation within FP7. However, this should only be implemented if it is guaranteed that the administrative procedures for the reimbursement of VAT can be kept to a minimum. As the current FR sets the time limit for the transfer of payments from the Commission to the beneficiary at 45 calendar days, FR should be modified according to the reduced time limits announced in the communication of 8 April 2009 (SEC(2009)477) “Streamlining financial rules and accelerating budget implementation to help economic recovery”. According to the document the first pre-financing payments should be made within 20 days (instead of 30 days for procurement or 45 days for grants). All other payments should be made within 30 days (instead of 45 days for grants; unchanged for procurement). Reports should be approved within 30 days for procurement (instead of up to 60 days; unchanged for grants). The long duration of the validation process within the Unique Registration Facility (URF) when submitting grant applications frequently causes a prolongation of the negotiation process for the Grant Agreement, which in turn leads to a delay in the start of project activities. Therefore, it is vital for the validation process to be accelerated. The validation process as such should become more transparent. Applicants should be able to perform an online pre-status check within URF in order to receive on-the-spot information on the current status of their validation process. In addition, detailed information should be issued on the practical implementation as well as the administrative procedure of the validation process within the Commission/REA. Also, detailed information on the legal basis of the classification of legal entities within the current system must become available. In case of a dispute between the Validation Team and the grant applicant on the categorisation of the applicant’s legal status by the Validation Team this would enable a swift clarification of the situation.

7 KoWi Response to Public Consultation EU Financial Regulation December 2009

What is more, validation problems in the past have clearly demonstrated the need to add the category of “private non-profit organisation” to the list of classification options for legal entities in order to clarify legal status and to avoid mistakes on the part of the Validation Team concerning the validation of entities. In addition, the Participant Portal should enable the LEAR (Legal Entity Appointed Representative) to access information on all projects currently under negotiation with the Commission and provide an overview of the current status of running projects within the LEAR’s institution. For instance, the LEAR should be able to retrieve data on whether a project is currently undergoing a reporting period, status of submission of due reports, evaluation status of reports etc. If the requirement for beneficiaries to handle pre-financing payments of EU grants via interest generating accounts is retained, the Participant Portal/URF should allow the registration of data on whether a legal entity is entitled to open interest bearing accounts on the basis of national legislation. All documents submitted on the subject (formal declarations, information on national legislation etc.) by an individual legal entity should be administered jointly by staff at the Validation Office. Subsequently, information would be made available centrally via the Participant Identity Code (PIC) to all Commission staff. Since the verification of documents provided by a beneficiary is currently carried out by the numerous individual project officers in charge of handling the various projects located at a particular legal entity the introduction of such a procedure would considerably streamline the administrative process for the Commission as well as for the grant holder. In order to further facilitate administrative procedures electronic proposal submissions for all FP7 project applications, including JTI applications, should be harmonised and the merging of NEF and FORCE web-tools into a joint database should be implemented. In general, a vast number of misunderstandings and initial errors when managing grants on the part of the beneficiary could easily be avoided if guidelines published by the Commission on the handling of financial and legal issues, such as the Guide to Financial Issues relating to FP7 Indirect Actions or Guidelines to Project Reporting, were made available at the beginning rather than at a later stage during the lifetime of a Framework Programme.

8 KoWi Response to Public Consultation EU Financial Regulation December 2009

OTHER ISSUES

When administrating grants fully or partly funded by the Community budget bodies established according to Article 171 of the Treaty (new Article 187) and Public Private Partnerships implemented as part of the Economic Recovery Plan should take all appropriate measures in line with control mechanisms performed by the Commission in order to ensure that activities funded by the Community budget are carried out correctly. In addition, the bodies themselves should become subject to the same regulations, reporting measures and checks by the Commission under the Financial Regulation as other legal bodies and entities. Many of the existing financial rules seem to have been designed for policy fields such as agriculture and structural development. Due to the particular nature of funding provided for research and science it might therefore be recommendable to create specific rules (e.g. regarding control mechanisms, recording of working hours etc.) for the granting of financial support within the Research Framework Programme. This might be implemented through the amendment of Title III “Research” within FR. Besides the simplification of administrative procedures a funding approach with regulations based on continuity and transparency rather than based on frequent changing of rules and regulations would enable a further development towards simplification and trust-based accounting within the European Research Area.

C062 - 18.12.2009 DE

Based on more than 25 years of experience in the field of public funding I would like to make the following suggestions:

Question 1: There should be more time between opening and closing of calls as now this time is often too short to set up a project and install a consortium.

A two step application approach is recommended, meaning preparing a short proposal first and a full application afterwards but only for selected proposals and with a much higher estimate for them to be successful in getting a grant.

Question 2: The concept of revenue is very complex and complicated and should at least not be too restrictive to let room for flexible and program / project specific needs.

The same refers to co-financing issues. Often it is much easier to get in-kind contributions than money from organisations interested in participating.

The definition of expected outputs is rather complicated for research project. Therefore no costs should be linked to expected outputs. Otherwise that would cause never ending discussions.

Question 3: Lump sums or flat rates e.g. for negotiation of grant agreements, travel costs, audits should be used more to reduce administrative burden.

Also a flat rate of 25 to 30 % on personal costs for overhead costs would highly be recommended to reduce administrative requirements especially on small and medium-sized organisations.

Many beneficiaries use some kind of average hourly rates for calculating the personal costs but the current rules often forces beneficiaries to calculate actual costs. If national funding rules allow calculating with these accepted average hourly rates these rates should also be accepted for EU-projects.

Question 4: Grants may not have the purpose or effect to produce a financial profit for the beneficiary which could be directly linked to the project.

The non-profit rule should at least not apply for flat rates and lump sums otherwise a so called “benefit” for reducing administrative burden would be deleted.

Question 5: The limits (amounts) mentioned in the de-minimis-rules could be used for guidance for value grants.

Question 7: There should be no limit for subcontractors mentioned in the Grant Agreement.

Question 9: Bank guarantees cost a lot and could often make the whole pre-financing ineffective for organisations.

Question 11: The regulations e.g. for the eligibility of costs should be clear from the very beginning and not be changed during the lifetime of the project.

The tendering system and the requirements should be simplified.

Costs for audits are very high, on the spot checks conducted by Commission’s own personnel would be more effective and qualified and should therefore be preferred.

HS-Betriebsberatung Graf-Recke-Weg 22 40489 Düsseldorf / Germany e-mail: stahl@hs-betriebsberatung.de www.hs-betriebsberatung.de

C063 - 18.12.2009 DE

Siemens AG has been participating at EU research programmes for many years at numerous research projects of various research areas. Concerning the 7th Framework Programme the European Commission announced to lay special attention on simplifying the financial rules. Much to our regret we have to realize that the European Commission was not successful concerning this aspect. The financial rules of FP7 became more complex compared with financial regulations of former framework programs and turn out to be lesser manageable for many beneficiaries. What is the problem? The problem is that the new financial rules of the 7th framework programme for the first time practically ignore the usual accounting practices and management principles of many beneficiaries as a basis to determine the eligible costs. This especially concerns the standard determination of personnel costs which in industry is often based on average personnel costs per cost center (department). But these cost averaging methodologies are practically prohibited in FP7 as they can’t pass the acceptability criteria of the European Commission. The European Commission would accept average personnel costs based on personnel categories fulfilling special requirements. But such personnel categories do not exist in industry. Instead of averaging methods commonly used in the industry the European Commission demands the calculation of personnel costs for every participating person of an EU funded project based on the individual personnel data (e.g. the individual remuneration, social expenses and overall productive hours). These demands of the European Commission seem to be reasonable at first glance. But for big industrial beneficiaries these demands are hard to manage as these companies have to set up standard procedures and standard tools to handle the diverse economical and legal requirements (e.g. data protection law, reporting obligations). The disadvantages of no longer being able to apply the beneficiaries usual accounting principles for EU funded projects clearly overcompensate the possible benefits. After the refusal of costs determined according to the usual accounting practices of the beneficiaries the companies are forced to implement new second accounting systems parallel to their normal accounting systems. The additional costs make the research more expensive and strain the research budget of the beneficiaries as well as the research budget of the European Commission. A considerable amount of money has to be spent for administrative tasks instead of research activities. The refusal of the usual accounting and management practices of beneficiaries is especially remarkable as the determination of costs of research projects belongs to the standard accounting tasks of organizations and companies with research activities. The determination of research costs of companies like SIEMENS is necessary for decisions about the best allocation and investment of money and for the annual financial balance sheet. Consequently a company searches for best ways to fulfill these requirements and develops accounting methodologies that serve these aims best. Especially in big companies sophisticated control mechanisms supervise the consistency of the accounting system. After all these accounting methodologies and the costs determined with the help of these methodologies frequently have to undergo external audits carried out by independent professional auditors or by auditors of public authorities. This should give adequate assurance for the European Commission that the costs of a research project determined with the help of the usual accounting principles of a beneficiary are calculated in a sound and reasonable way.

The massive problems stemming of the new financial regulations of the 7th framework program has initiated the European parliament to vote about the resolutions no 117 and 118 that concern this matter. The resolutions passed the vote on April 23rd 2009. The European Commission ignored the will of the parliament until now and did not overwork the financial rules of FP7 accordingly. To my opinion the European Commission should reconsider its position. For FP8 similar problems have to be avoided. Otherwise a further decline of the participation of industrial partners in the European research program will occur. SIEMENS AG GSS A&F CM PCS Department for Public Contracts and Subsidies Reinhard Schwab 80200 Munich Germany

C064 - 18.12.2009 UK

EC REVIEW OF THE FINANCIAL REGULATIONS

Public consultation

Invitation to contribute to a public consultation on the financial rules for the programmes funded by the budget of the European Union (EU). Contributions will help the Commission in its second review of the Financial Regulation (FR) and its Implementing Rules (IR).

Submitting Organisation: University of York, United Kingdom

Question 1: Are you sufficiently informed about upcoming calls for proposals in a timely manner? What improvements would you suggest?

We mainly receive and rely upon information on future calls from UKRO. For organisations without an UKRO subscription, the interface on the CORDIS information service could be improved and made easier to use/navigate.

Calls for proposals are often issued in July/August when many people are on leave.

All relevant documentation and information relating to a call should be available when the call is issued.

Question 2: should the rules be more flexible on co-financing requirements taking into account the type of actions and project managers? How could in-kind contributions best be dealt with, while adhering to the non-profit principle?

We suggest the EC should consider the move of UK Universities towards financial sustainability and the fact that Universities currently must provide a significant subsidy towards EC projects. This limits the extent to which we are able to participate in EC research.

A clearer definition of “co-financing” and in-kind contributions would be welcomed.

Question 3: Should the use of lump sums, flat rates become the norm rather than the exception? Should the rules allow for costs to be covered on the basis of expected outputs? If yes, can you provide concrete examples?

Lump sums & flat rates: Yes wider use could be made of these, but only if the rules and regulations are not onerous, administratively impractical and outweigh the benefits.

Costs covered by expected outputs: This raises the issue of how outputs would be measured. The possibility of setting only achievable outputs will arise and less innovative and risk averse Research may ensue.

Question 4: Should the rules strictly adhere to the non-profit principle or should there be room for some flexibility in this matter? Do you have examples of good practices from other public authorities?

We are comfortable with the requirement for grants to not generate a profit, but in-line with question 2, believe that the EC contribution should be closer to full economic cost.

Question 5: What, in your view, would be the appropriate amount for low and very low value grants?

No comment.

Question 6: How could the rules on operating grants be more flexible? In which way? What are your views on the duration of framework partnership agreements?

No comment.

Question 7: Can you give concrete examples and types of actions where the strict limitation on cascading grants became an obstacle for achieving the goal of your action?

No comment.

Question 8: From your experience, what alternative solutions could be proposed for Prefinancing payments while safeguarding tax payers' money?

Recently, it has become a strict requirement for Co-ordinators to hold pre-financing in interest bearing accounts. Whilst this is perceived as an appropriate use of taxpayer’s funds, there is no incentive for Co-ordinators to do this as any interest earned is deemed as a receipt of the project and deducted

from the funds reimbursed by the EC. The administration of this system is therefore an additional cost for Institutions to bear.

How pre-financed is managed should follow an Institution’s current accounting practise, the policy we follow in other areas, rather than being an EC requirement.

A cost benefit analysis should be undertaken to compare the cost of keeping funds in an interest bearing account with the cost to Institutions of reporting.

Question 9: What mechanism, other than pre-financing guarantee, could be explored while ensuring adequate protection of community funds?

The Guarantee fund seems satisfactory at the moment but it is very early to judge.

Question 10: Based on your experience, do you think current thresholds are still adequate or should they be increased, and why?

No comment.

Question 11: How could the application procedure for both grants and contracts be further improved?

There should be a full integration between the EC’s electronic submission and project management systems: EPSS, NEF and SESAM/FORCE via ECAS (or a similar portal).

We suggest the EC should expand the functionality of the PIC/Unique Registration Facility to both the application procedure and the management of active projects. This should reduce the time it takes from proposal submission to projects.

Suggested improvements:

· University sign-off should be a firm requirement for all proposals - with an Institution’s Authorised Administrative Users able to access/view all proposals/projects they are involved with at negotiation & active stages.

· EC should provide details on the award status via the ECAS portal, e.g. proposal submitted, accepted, rejected, selected for negotiation, awarded, active, closed.

· More information to be available at all stages of the award cycle. E.g. who are the EC Project/Financial Officers dealing with the proposal award as these frequently change, contact details. Budget & all contractual documents to be available to participants for download via the ECAS portal.

· A list of an Institution's authorised signatories should be held by the EC and updated as required. Access to this should be available at all stages of the award cycle. Specimen signatures could be supplied as a pdf document to be updated as required and should avoid queries.

· Institutions should not be asked for the same information where supplied previously (e.g. bank account information where Project Co-ordinator). Include an Institutions bank account details as part of the PIC system.

· Paper copies of Forms with wet signatures are still required. More use should be made of digital/electronic signatures.

The “label” system suggested by the EC (so that organisations who have successfully carried out projects only send documents relevant to the new application) is a step in the right direction.

The 2 step selection system is not necessarily any simpler and could create delays to agreements being signed.

University of York, United Kingdom

C065 - 18.12.2009 BE

Enclosed please find the contribution for "Katholieke Universiteit Leuven": Q1. Are you sufficiently informed about upcoming calls for proposals in a timely manner? What improvements would you suggest? • The general conclusion on this question is no. • Several comments were made on this issue:

o The informal network is more important than the formal calls because preparation needs to start well in advance, i.e. before official calls are published, in order to get ready on time. Thus, the periods between the opening and closing of a call are too short as writing down a project properly takes easily up to 12 months. Recommendation: The period between opening and closing of a call should be at least 6 months.

o Another recommendation was made on the way information on calls is presented. The participants suggest to put all information on running and upcoming calls on one single website, where the calls could be organized by theme. Also, a weekly newsflash could be sent to subscribers listing all upcoming calls.

o Large differences exist between calls on e.g. infrastructure and education. o Some question the calls with closing dates in July or August. These closing dates are considered

inconvenient because most people are on holiday during these months. o The participants observe that because of the late announcement of some calls, projects are

provisionally prepared on old layout/formats. When the call is eventually published, adjustments then need to be made to adapt the documents to this new format. Recommendation: one format that doesn’t change all the time would be easier. Also, there are differences in format between different programmes. Since some organizations are involved in multiple programmes, different formats impede an efficient management.

o Someone remarked that DG Research puts in great efforts to streamline all programmes according to one format and one path. This is considered to be a good practice. Since some organizations are involved in different programmes from different DGs, applying the same format to all calls across DGs would constitute a great help.

o Also, some difficulties have been experienced with online application tools. Given the increased importance of electronic data transmission, these systems should work optimally at all times.

o In light of the current and rising new programmes we strongly argue for the implementation of a uniform registration and submission system (e.g. EPSS and URF) for all EU research funding (DG RTD, DG INFSO, DG SANCO, DG RELEX, JTI’s, PPP, …)

Q2. Should the rules be more flexible on co-financing requirements taking into account the type of actions and project managers? How could in-kind contributions best be dealt with, while adhering to the non-profit principle? • The fact that the rules are tailored to public bodies and not to private bodies is considered an

impediment. Public bodies work with subsidies and financing flows while private bodies use double-entry bookkeeping. The participants experience large problems in the financial management of the programme when consortia are mixed (public and private) given divergent accounting principles. Recommendation: co-financing should be considered at the level of the organization and not at the level of the project.

• Participants note that the European Commission asks for too much detail in the final reporting on projects. This undoes all flexibility.

• In-kind:

o the problem with in-kind is that definitions are not univocal which leads to confusion and mistakes. Recommendation: there should be a clear definition of what in-kind stands for. At the moment, interpretation is too much contingent on the person dealing with the management of the project.

o The concept of in-kind is sometimes difficult to fit into a non-profit context. • The co-financing principle is difficult when a project partner is a private organization. Co-financing of

personnel costs is not always possible. Also, problems are encountered where the centralized resources are managed by the private partner.

• Participants further note that in some programmes the rules differ across states, regions, and even provinces. They conclude that there are too many differences in the applicable rules.

Q3. Should the use of lump sums, flat rates become the norm rather than the exception? Should the rules allow for costs to be covered on the basis of expected outputs? If yes, can you provide concrete examples? • The participants pointed out that rules (on flat rates) differ across DGs. • The feeling prevails that the workload and hence overhead costs on projects is out of proportion in

relation to the money spent on the actual project. Participants note that the Commission expresses the will to simplify but at the same time still applies plenty of rules. Results are not given sufficient emphasis, only procedures count. The consequence is that this administrative burden is passed on to the projects.

• Someone remarked that the former city development funds used a very simple structure. At the moment, procedures are being evaluated and changed within ESF, where a flat fee is given for each participant reached.

• The observation was made that European programmes should also allow for experimentation. One should not only look at the results. What is a result anyway? Is it a new product or building? Within research, outcomes are never certain. If projects are judged only on results and a particular project achieves 30 of the 40 objectives, subsidies are cut proportionally. Yet, efforts made should also be taken into account. Recommendation: perhaps we can think of a bonus for good project promoters.

• It would be a big simplification for institutes who can not calculate their full-cost. However, a distinction should be made between simplification and uniformity. Since each programme has specific requirements, not all rules can be the same.

• The observation was made that most projects go for flat rate and only a few go for real cost. Those institutes who can calculate their real indirect cost need to be given the chance to declare their indirect cost rate.

• Reporting based on deliverables (output) instead of worked hours is much more efficient (and easier, cheaper, faster). Time recording is not compatible with research.

Q4. Should the rules strictly adhere to the non-profit principle or should there be room for some flexibility in this matter? Do you have examples of good practices from other public authorities? • It was stated that the interpretation of revenues is too strict. This hampers participation of private

partners in projects. E.g. When consultants advise SMEs, the efforts made by the SMEs are considered as revenue. As a consultant, you will not participate because you will not invest your own resources.

this is not a business principle and leads to loops. This reasoning is not workable because one only focuses on flows of money. Once the projects starts to generate revenue, the percentage of support may decrease. In case of universities, for instance, the rule is that profit must be reinvested.

• In the new programme period, the principle of the funding gap will be used. Only that part of the expenses that is not covered by revenues will be financed this does not work.

• The IWT rules are simple and easy applicable: Researchers salarycost + 20 % overhead + 30% project consumables

Q5. What, in your view, would be the appropriate amount for low and very low value grants? • Amounts are considered appropriate and are adjusted on a yearly basis. For example, within LLL small

subsidies are awarded to projects on adult education, job shadowing, … Q6. How could the rules on operating grants be more flexible? In which way? What are your views on the duration of framework partnership agreements? • A participant noted that working together with non-profit organizations substantially alters a project.

In some cases, overheads may be substantially lower as a result of which funding may decrease with 40 to 50 %.

• With respect to the flexibility of the rules, the IWT (the Flemish Institute for Innovation by Science and Technology) provides a cascade system which is considered an elegant way to cut back participation to a project.

• The optimal duration of framework partnership agreements depends on the goals to be achieved. A good practice would be to evaluate the project regularly and to allow for addition or removal of partners.

• A framework is generally considered good because it provides continuity. Q7. Can you give concrete examples and types of actions where the strict limitation on cascading grants became an obstacle for achieving the goal of your action?

Q8. From your experience, what alternative solutions could be proposed for pre-financing payments while safeguarding tax payers’ money? • We suggest to extend the existing system of DG Research (working with a “guarantee fund”) to other

projects of other DG’s (like enterprice, education,…). • Recommendation: make one portal for partners containing the financial records and bank guarantees

of every partner.

• Prefinancing is a good principle. Rather than stigmatising businesses that have failed, the EU needs to encourage a positive attitude to risk-taking and failure, so as to promote the entrepreneurial spirit that Europe needs.

• In a consortium a system to safegarde tax payers money is to let administer the funds by a public body. Public bodies can not go bankrupt.

Q9. What mechanism, other than pre-financing guarantee, could be explored while ensuring adequate protection of community funds? • Recommendation: Europe could take an insurance against failure of projects. Perhaps the EIB can

play a role here. DG Research already uses a similar system for FP7, viz. 5 % is deducted from every project funding which is deposited after positive evaluation of the project. The interests accumulated on these deductions are used to compensate for failed projects. This is a good regulation.

• Recommendation: Everybody is asking for pre-financing schemes, yet, the process should be improved.

• Recommendation: A central database should be set up to centralize the financial details of all project partners

Q10. Based on your experience, do you think current thresholds are still adequate or should they be increased, and why? • European member states apply different rules. Mostly, it is required to apply the strictest rules in a

project. Participants find this unacceptable there should be one rule per programme. • 1.000 EUR is a very low threshold which requires a lot of administration. • The general conclusion is that there are too many rules!! Moreover, these have too much

ascendancy over the result.

Q11. How could the application procedure for both grants and contracts be further improved? • In the 7th framework programme, participants receive a unique code (PIC). There should be a unique

registration facility for all European projects. • A general observation is that the storage period for documents is too long This puts pressure on

administrations but also negates the impact of digitalization. • Budget with lump sums.

• Extend the system of “guarantee fund” to all other DG’s (see question 8).

K.U.Leuven Research & Development Minderbroedersstraat 8A

B-3000 Leuven URL: www.kuleuven.be/lrd

C066 - 18.12.2009 BE

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SOCIAL ECONOMY EUROPE

ANSWER TO THE EUROPEAN COMMISSION’S PUBLIC CONSULTATION ON THE REVIEW OF THE FINANCIAL REGULATION

Brussels, 18 December 2009

SOCIAL ECONOMY EUROPE is the EU level organisation representing social economy enterprises: cooperatives, associations, mutual societies and foundations as well as new forms of enterprises that share the values defined in SOCIAL ECONOMY EUROPE’s Charter of principles1.

Social economy enterprises have a broad social foundation and conduct their activities in varied legal forms while demonstrating their competitiveness and their capacity to grow and adapt to new social and economic challenges. The social economy makes a significant contribution to the development of a plural society that provides for greater participation, more democracy and more solidarity.

SOCIAL ECONOMY EUROPE welcomes the mention made of social economy by the European Commission in its working document - background paper to the EPSCO council released on 24.11.2009: “The employment crisis: trends, policy responses and key actions”2, the European Commission’s states: “The ESF, the ERDF and other EU funds can be better used to promote entrepreneurship, self-employment and support for SMEs and micro-enterprises. Financial incentives for innovation and training can help, on the one hand to explore the potential of expanding sectors, new technologies and new ways of doing business; on the other hand, to develop the social economy.”

Furthermore, the European Parliament, in its resolution of 19.02.2009 on Social Economy3: “called on the Commission to aim for conditions which will facilitate investments in the social economy, in particular through investment funds, guaranteed loans and subsidies”.

Finally, in its report on cohesion policy: “Investing in the real economy”4 released on 23.02.2009, the European Parliament: “Highlights the important role that grass-roots organisations, NGOs and the social economy play in promoting social cohesion and inclusion particularly during time of crisis” and “calls on the Commission to ensure that any simplification of the Structural Funds will reduce administrative burdens on such organisations”.

SOCIAL ECONOMY EUROPE welcomes the European Commission’s consultation on the review of the financial regulation and acknowledges “the urgent need for more efficient delivery mechanisms and a thorough simplification of rules and procedures”. Even though SOCIAL ECONOMY EUROPE does neither directly manage EU funded projects nor benefit from public funding, SOCIAL ECONOMY EUROPE’s members have wished to see it answer this consultation as a representative organisation. All SOCIAL ECONOMY EUROPE’s members are themselves EU funds recipients and - as representative or network organisations – are directly linked with organisations taking part to programmes funded by the budget of the European Union. Therefore, this document is the result of a consultation amongst SOCIAL ECONOMY EUROPE’s members.

Moreover, since the Commission explicitly encourages stakeholders’ comments on other topics as well, SOCIAL ECONOMY EUROPE would like to submit a spontaneous comment on the issue of transnational cooperation, which will be key to the next programming period (end of document). 1 The charter is available for download on SOCIAL ECONOMY EUROPE’s website : http://www.socialeconomy.eu.org/IMG/pdf/2007_08_20_EN_charte-2.pdf 2 COM(2009) 649 final 3 2008/2250(INI) 4 2009/2009(INI))

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1. THE AWARD OF GRANTS:

Question 1: Are you sufficiently informed about upcoming calls for proposals in a timely manner? What improvements would you suggest?

SOCIAL ECONOMY EUROPE believes that access to information is crucial, therefore, information should be easier to find and proposals should be more readable.

The use of English only is very problematic as it impacts both quantity and quality of the answers as well as the nature of the respondents. Quantity: Potential respondents who do not master the English language will not be able to read nor send their answers to the calls for proposals. This leads de facto to reducing the number of answers and decrease in interest for grants to a large number of structures and organisations. Quality: low level of understanding of the calls of proposals and reduced quality of answers. Nature of respondents: structures and organisation that can afford English speaking staff (often large consortium) will be able to have full grasp of the content of the calls for proposals. This leads to an indirect unfair selection process.

Question 2: should the rules be more flexible on co-financing requirements taking into account the type of actions and project managers? How could in-kind contributions best be dealt with, while adhering to the non-profit principle?

SOCIAL ECONOMY EUROPE believes that rules should be more flexible and, for example, set on a project basis.

Question 3: Should the use of lump sums, flat rates become the norm rather than the exception? Should the rules allow for costs to be covered on the basis of expected outputs? If yes, can you provide concrete examples?

Concerning lump sums and flat rates, the criteria used in setting up the amount available should take into account all country specific situations as well as the resourcefulness of the beneficiaries as this might lead to discrimination against the smallest and less resourced beneficiaries.

Question 4: Should the rules strictly adhere to the non-profit principle or should there be room for some flexibility in this matter? Do you have examples of good practices from other public authorities?

On some specific occasions, the non-profit principle requires some flexibility. This applies, in particular, to some aspects of projects’ material dissemination.

For example, a EU project-related publications do not have a commercial value. This means, for instance, that they do not apply for an International Standard Book Number (ISBN), which is a numeric commercial book identifier. The lack of an ISBN implies that project materials are not codified and are therefore difficult to track. In this way, the dissemination impact is highly reduced compared to commercial books with this having relevant implications over information-sharing and communication of best practices.

Question 5: What, in your view, would be the appropriate amount for low and very low value grants?

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Question 6: How could the rules on operating grants be more flexible? In which way? What are your views on the duration of framework partnership agreements?

Rules governing the framework partnership agreement, including the rules applying to the grant seeker and the respect for deadline are of prime importance. However, existing procedures to postpone projects’ deadline should still be under control but more flexible. Furthermore, duration should take into account country specificities (for example in term of access to communication tools or language) and timeline specificities (for example summer breaks).

Question 7: Can you give concrete examples and types of actions where the strict limitation on cascading grants became an obstacle for achieving the goal of your action?

Limitations imposed to cascading grants involving third parties may hinder the effective promotion of self-employment among vulnerable groups (immigrants, people with disability, Roma). This is explained by the fact that people within these groups require a relevant amount of public aid to establish their own micro-business.

In this context, the EU should review the application of the ‘de minimis rule’ to self-employment projects involving the social economy enterprises that are engaged in activities dealing with minorities and EU citizens at risk of marginalisation from the labour market and social exclusion. Flexibility regarding the accumulation of aids is also needed.

2. THE COMMISSION’S HANDLING OF FINA NCIAL FILES:

Question 8: From your experience, what alternative solutions could be proposed for prefinancing payments while safeguarding tax payers’ money?

Question 9: What mechanism, other than pre-financing guarantee, could be explored while ensuring adequate protection of community funds?

It is highly recommended that the pre-financing guarantee is replaced by a bank guarantee. With this mechanism, the certainty that the retained funds will be paid if the contractor does not fulfil the stipulated obligations under the programme is maintained. At the same time, it avoids, for the contractor, the financial implications originated by the time gap between the project closure report and the formal closure of the programme (it may sometimes take up to two years).

Question 10: Based on your experience, do you think current thresholds are still adequate or should they be increased, and why?

Thresholds for advanced payments should be raised up to 10 to 12% for two main reasons:

- Operational Programmes are approved with huge delays,

- Higher advanced payments help mitigate decommitment risks.

Question 11: How could the application procedure for both grants and contracts be further improved?

Simplifications procedures are very much needed.

It is highly recommended that, in particular, enough time is given for project beneficiaries to comply with the application procedure. For instance, submission dates should not so tight since partnership agreements, i.e. the collection of all the signatures required, require some time.

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TRANSNATIONAL COOPERATION WITHIN THE ESF:

A NOTE ON ELIGIBILITY EXPENDITURE

Since the Commission explicitly encourages stakeholders’ comments on other topics as well, SOCIAL ECONOMY EUROPE would like to submit a spontaneous comment on the issue of transnational cooperation, which will be key to the next programming period.

1. The European Social Fund (ESF) Regulation (EC1081/2006) incorporates transnational cooperation as an integrated feature in the ESF 2007-2013 programming period:

Art 3.6 states: “The ESF shall also support transnational and interregional actions in particular through the sharing of information, experiences, results and good practices, and through developing complementary approaches and coordinated or joint action”.

2. In contrast to the previous programming period in which transnational cooperation fell under EQUAL, the Commission has no prescriptive or leading role to play in making transnational cooperation happen.

Art 3.6: “ (…) therefore invites Member States and regions to support transnational cooperation in all policy areas identified for ESF interventions.”

3. In order to support the transnational dimension, the ESF Regulation grants, through Article 8, an intervention rate increased by 10% to Member States that establish a specific transnational priority axis within an operational programme (1).

4. However, defining (and implementing) provisions for transnational cooperation correspond to Member States alone. This includes proposing national eligibility rules (comprising a definition of eligibility), to be laid down by Managing Authorities in accordance with EU regulations.

5. Unlike the European Regional Development Fund (ERDF), the ESF Regulation does not give any indication regarding the expenditure incurred in implementing operations in other member states. As a consequence, Managing Authorities do not take this aspect into account when establishing the implementation mechanisms for their operational programmes (relating to, for instance, type of events to be supported, participation, communication and pertinent services involved).

6. Through its Article 21, the ERDF Regulation specifically shapes ‘Special conditions governing the location of operations’. (2)

This Article considers the financing of expenditure incurred in implementing operations or parts of operations in adjacent areas and, at project level, expenditure incurred by partners located outside the programme area.

In the context of cross-border, transnational and interregional cooperation, the ERDF may also finance expenditure incurred in implementing operations or parts of operations on the territory of countries outside the European Community.

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7. The ESF lacks a mention to expenditure incurred in implementing operations in other areas or member states that, by default, fall outside the scope of a national operational programme. Considerations concerning transnational cooperation within the operational programmes are mostly limited to partners’ cost-sharing and/or conditions for partnership agreements.

Taking into consideration the above mentioned points:

8. SOCIAL ECONOMY EUROPE believes that the ERDF’s Article 21 could serve as a basis for including considerations on location of operations within the ESF.

ESF transnational cooperation projects should foresee, for instance:

The possibility of funding events, meetings and other project developments in locations where there are no project partners

The possibility of hiring service providers/contractors within members states that do not host a project partner (and that therefore cannot be covered by the members of a partnership agreement)

References to this type of expenditure would provide a guide for national authorities to include these aspects within the national eligibility rules.

9. SOCIAL ECONOMY EUROPE considers that different mechanisms could apply for special conditions on location of operations:

ESF funding percentage or capped funding

Private funding percentage or capped funding

A combination of both

Proper justification of the need and added value of this expenditure to the transnational cooperation objective of a given programme should remain untouchable.

10. SOCIAL ECONOMY EUROPE trusts that the incorporation of the above-mentioned rules would ease and deepen the concept of transnational cooperation in the framework of the ESF where cross-border provision of services is less evident. At the same time, these rules should also be aligned with the EU internal market regulations.

*** *** ***

References

(1)Article 8 – ESF Regulation

Transnational and interregional actions

1. Where Member States support actions in favour of transnational and/or interregional actions as set out in Article 3(6) of this Regulation as a specific priority axis within an operational programme, the contribution from the ESF may be increased by 10 % at the priority axis level. This increased contribution shall not be included in the calculation of the ceilings set out in Article 53 of Regulation (EC) No 1083/2006.

2. Member States shall, with the assistance of the Commission where appropriate, ensure that the ESF does not support specific operations being concurrently supported through other Community transnational programmes, in particular in the field of education and training.

(2)Article 21 – ERDF Regulation

Special conditions governing the location of operations

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1. In the context of cross-border cooperation and in duly justified cases, the ERDF may finance expenditure incurred in implementing operations or parts of operations up to a limit of 20 % of the amount of its contribution to the operational programme concerned in NUTS level 3 areas adjacent to the eligible areas for the programme referred to in Article 7(1) of Regulation (EC) No 1083/2006 or surrounded by such adjacent areas. In exceptional cases as agreed between the Commission and Member States, this flexibility may be extended to the NUTS level 2 areas in which the areas referred to in Article 7(1) of Regulation (EC) No 1083/2006 are located.

At project level, expenditure incurred by partners located outside the programme area as defined in the first subparagraph may be eligible, if the project would have difficulty in achieving its objectives without that partner's participation.

2. In the context of transnational cooperation and in duly justified cases, the ERDF may finance expenditure incurred by partners located outside the area participating in operations up to a limit of 20 % of the amount of its contribution to the operational programme concerned, where such expenditure is for the benefit of the regions in the cooperation objective area.

3. In the context of cross-border, transnational and interregional cooperation, the ERDF may finance expenditure incurred in implementing operations or parts of operations on the territory of countries outside the European Community up to a limit of 10 % of the amount of its contribution to the operational programme concerned, where they are for the benefit of the regions of the Community.

4. Member States shall ensure the legality and regularity of these expenditures. The managing authority shall confirm the selection of operations outside the eligible areas as referred to under paragraphs 1, 2 and 3.

MEMBERS OF SOCIAL ECONOMY EUROPE

C067 - 18.12.2009 NO

Public consultation on the review of the Financial Regulation

Contribution from the University of Bergen, Norway December 2009 About the University of Bergen’s and its experience with EU grants: The University of Bergen (UiB) consists of 6 faculties with a total of 16 000 students, 3000 faculty and staff and 1100 PhD students. UiB is a research university with a high international profile that is committed to academic excellence and has been actively participating in the EU Framework Programmes both involving the University as partner and coordinator. In FP6 UiB participated in 50 contracts, of which 4 integrated projects and 2 STREPs where coordinated by UiB. In FP7 UiB participates p.t. in more than 40 FP7-projects, of which 6 are Collaborative Projects coordinated by UiB. Responses to the consultation questions: Question 1: Are you sufficiently informed about upcoming call for proposals in a timely manner? What improvements would you suggest? Answer: Yes. Cordis and our National Contact Point provide sufficient information. Question 2: Should the rules be more flexible on co-financing requirements taking into account the type of actions and project managers? How could in-kind contributions best be dealt with, while adhering to the non-profit principle? Answer: We prefer flexibility in this regard. Due to restricted budget limits in many FP7 calls, we see difficulties in budgeting with all costs that are necessary for implementing a project idea. We experience therefore that projects are underbudgeted, and that UiB has actual costs (both direct and indirect) that are not showing. In order to be able to cover all costs, we would prefer that financing from other sources is not calculated as a receipt to the project and deducted from the EU contribution. This is especially important for funding from the national research council, but also where industry would contribute to the university’s work. Question 3: Should the use of lump sums, flat rates become the norm rather than the exception? Should the rules, allow of costs to be covered on the basis of expected outputs? If yes, can you provide concrete examples? Answer: In our experience the detailed management and documentation requirements discourage our researchers from applying for grants. This is especially the case what regards time recording, as there is no general requirement for time recording and other funders do not require the researchers to use time sheets or equivalent documentation of time used on the funded project. In our experience time recording reduces the motivation for the actual research work and implies less flexibility and creativity. If costs related to expected outcome of a project would reduce such documentation requirements, this would motivate our researchers to participate in projects. What regards lump sums, we see this as a good alternative for funding related to networks, travels and meetings. Further we see great advantage of using (adequate) lump sums for low and middle income countries where infrastructure and management resources are not properly in place in order to handle complex management requirements. In order for this to work, the lump sums need to be increased to an adequate level.

Consultation – EU budget and grants - Contribution from the University of Bergen, Norway (kit/171209)

Consultation – EU budget and grants - Contribution from the University of Bergen, Norway (kit/171209)

Question 4: Should the rules strictly adhere to the non-profit principle or should there be room for some flexibility in this matter? Do you have examples of good practices from other public authorities? Answer: As explained under question 2, we do not experience any profit from EU funding. What we do experience is costs that are not covered and the need to find additional funding. We would therefore prefer a greater flexibility in this regard. Question 5: What, in your view, would be the appropriate amount for low and very low value grants? Answer: - Question 6: How could the rules on operating grants be more flexible? In which way? What are your views on the duration of framework partnership agreements? Answer: No view on duration of partnership agreements What regards fincancial stability, the University of Bergen experience that the complex mangament rules requires additional administrative resources and therefore additional costs in order to be able to comply with these rules. We see that in FP7 projects appropriate funding for management activities is needed, both when we participate as partner and as coordinator. Question 7: Can you give concrete examples and types of actions where the strict limitation on cascading grants became an obstacle for achieving the goal of your action? Answer: - Question 8: From your experience, what alternative solutions could be proposed for pre-financing payments while safeguarding tax payers' money? Answer: - Question 9: What mechanism, other than pre-financing guarantee, could be explored while ensuring adequate protection of community funds? Answer: - Question 10: Based on your experience, do you think current thresholds are still adequate or should they be increased, and why? Answer: - Question 11: How could the application procedure for both grants and contracts be further improved? Answer: We see advantages in the use of 2 step procedure calls. It seems that researchers have a lower threshold to submit a proposal in a first stage call. Further the process involving the project partners is easier when a proposal moves forward to a second stage; as the chance of funding is higher as when applying in a 1 step call, and the partners’ motivation therefore is higher. We would also emphasise the improvement from FP6 to FP7 when a parallel format was introduced for the appplication forms and the grant agreement forms. This reduced the need to rewrite and move sections in the description of work. Further, a reduced number of pages of the application, itself has been an improvement. Regarding the forms and e-tools, we see that the use of a single user registration facility (URF), the introduction of an indetifying code (PIC) and the use of e-tools such as EPSS, has already improved the application process.

C068 - 18.12.2009 UK

Review of the Financial Regulation Public Consultation

The European Opera Centre very much welcomes the opportunity to contribute to the Second Triennial Review of the Financial Regulations and its Implementing Rules and offers the following contributions: 1 Grants Question 1 We feel reasonably well informed about upcoming calls for proposals but any system which further develops e-mail notification will be welcomed. Question 2 We feel that where there is a readily identifiable market rate for a contribution in kind it should be allowable (for instance, another organisation paying for hotel accommodation for a European Union supported project). Question 3 As an organisation we feel our systems are well established to deal with the detailed financial information required for reporting on a European Union funded project. We would rather maintain detailed financial reporting than move to a system where all the organisation’s finances are automatically considered as being eligible for consideration under a European Union funded project, since this is too restrictive in allowing the development of other activity. Relating costs directly to outputs can lead to quantity at the expense of quality. Question 4 It is entirely possible to ring-fence the European Union funded activity through the use on a restricted and unrestricted financial model. The inability of European organisations funded currently to build reserves runs counter to the view of good practice both from the public funders of the arts sector in the UK and more generally from the Charity Commission of England and Wales. Question 5 The National Lottery scheme “Awards for All” in the UK allows for simplified applications for a grant of up to £10,000. Question 6 It would be extremely helpful for longer-term planning and therefore more effective use of European Union funds to establish a rolling programme of support: hence, in Year 2 of a three-year partnership agreement it would be known whether funding had been secured for Year 4. Gradually decreasing grants for those organisations which are truly European and therefore justifiably look to the European Union for support simply makes them less effective over time, thereby weakening the work of the European Union. This is especially the case given that organisations are not permitted to build up reserves. There is some risk that the much-welcomed new benefits of three-year funding will be undermined by those carrying out the annual review process making it too detailed, drawn out and bureaucratic.

Question 7 We have not encountered operational difficulties over this regulation. 2 Handling of Financial Files Question 8 and 9 Pre-financing guarantees are almost unheard of in the UK arts sector and are extremely hard to obtain. It would be possible for the Commission to take out a global insurance against default, to charge this as a proportionate levy against each grant awarded and to declare it to be an eligible cost for the recipient. There could also be an accreditation system for organisations supported: for instance, those that had successfully delivered a certain number of projects meeting the financial targets for these and having, say, at least two of these audited on behalf of the Commission without any major recovery. These organisations could be given an accreditation number. For these organisations, the Commission's funding would then be treated as a grant for a general work programme (as is the norm with most UK national funding). The grant would then be the property of the recipient from date of receipt given the assurances in place. Question 10 The higher the thresholds the lower the administrative cost for organisations. This is an important point which applies to much of the above: there should be a better balance between administration/reporting costs and the level of finance being awarded. Question 11 The accreditation system described at 8 & 9 above would allow greater use of on-line communication. European Opera Centre Hope at Everton 1 Haigh Street LIVERPOOL L3 8QB UK www.operaeurope.eu

C069 - 18.12.2009 IT

Promofirenze, Special Agency of the Chamber of Commerce of Florence (Italy), MEMBER OF ENTERPRISE EUROPE NETWORK, non-registered organisations, has decided to answer to the public consultation on the review of EU Financial Rules expressing opinions to contribute as beneficiary of EU funds to simplify the financial rules and procedures applicable to the EU Budget. Here collected the Promofirenze answers coming from a group of employees working on EU projects, EU funding for SMEs, administrative accounts: Question 1: We suggest the creation of a site/portal where anyone could find all the calls published, instead of the publication of the calls in the different sites of several DG. It can be also useful to set up a schedule with the planning of the different calls with the direct links to them. Question 2: The Commission could introduce a room costs to report the rooms used for the events foreseen in the projects, considering the size of the room and the Country (for instance, like the daily subsistence allowances foreseen by the Council Regulation for officials of the EU in the Member States). We suggest to admit the human resources in-kind contributions defining a maximum limit, as for the indirect costs. Question 3: To report Project Indirect costs we suggest a method based on the economic relation between human resources expenses and general expenses calculated on the last beneficiary yearly budget. This economic coefficient could be applied on Direct costs of the project (Project Human resources + Project direct costs). For instance: yearly budget Human resources: € X yearly budget General costs: € Y X/Y=Z % (coefficient percentage) Project Indirect costs= Z % of Project direct costs (Project Human resources + Project cash costs) Question 5: We propose these amounts: For low value grants: 35.000 € For very low value grants: 15.000 € Question 6: The duration of the framework partnership agreements could be 10 years maximum, depending on the expected results of the project. Question 8:

a) We propose to leave the accrued interests to the beneficiary, because the final payment is provided many several months after the closing of the project.

b) If there is the necessity to give back these interests, we propose to the Commission to calculate, at the moment of the pre-financing an amount based on the medium interest rate of each EU Country: this amount of interests expected at the end of the project would be deducted from the pre-financing payment. In this manner the Commission could determine the interests before the beginning of the action instead of in the final balance, obviously considering the times of the expenses. Question 10: We propose to augment the thresholds for low value contracts up to 15.000 €. In some cases, as in the fairs, the sole provider declaration is useless because of the clear singleness of the supplier: fair organizer. If the declaration is compulsory it can be provided a template for the declaration.

Question 11: The label system is a good idea, but in addition we propose to use the PADOR system not only for papery documents, but also for the submission of the proposals of all the EU grants and contracts. We suggest to introduce the digital signature for every organization recorded on PADOR. Moreover, we think that for the restricted calls the requests of the same documents and of the same original papery copies several times can be avoided. In general we suppose that a system of awarding for prizes can be created to encourage the successfully implementation of projects and contracts. Promofirenze thanks for this opportunity to express a beneficiary point of view. European Policies and Networks PROMOFIRENZE - Special Agency of the Chamber of Commerce of Florence www.promofirenze.com Enterprise Europe Network - Business Innovation Center Via Castello D'Altafronte, 11 50122 Firenze (FI) – Italy To be updated concerning our initiatives please subscribe News Mercati http://www.newsmercati.com/

C070 - 18.12.2009 HU

Please find below our organisation's and one of our client's contribution to the "Consultation on the review of financial regulations".

Our client is a foundation dealing with unemployed people and their experiences regards on the implementing of projects for disadvantaged unemployed people's reintegration to the labour market.(The relevant EU-funded projects include: promoting integrated local development actions (Hu 2003/004-347.05.05.-DA/28-3)

- The EU's financial documentation requirements can be found in the general requirement part of the contract's attachement.During the accounting these requirements are enforced in amazing interpretation by the contracting authority from time to time.(They referse to a so-called "internal rules" that are unknown for the applicant.) The authority doesn't allow the candidate to validate the necessary amendments but requires authorization (often lasting for months) and the project implementation becomes impossible due to this reason.

Other comments regarding this topic:

- Deadlines: The applicants have to keep strict deadlines from the invitation to tender to the last settlement and follow-up. Recommendation: from the side of the Governing Authority the prescribed deadlines will also be kept.

- A very big problem (at least in Hungary), that the whole documentation and the handbook (made by the authority) are not ready at the date of the tender's publication. The documentation to be filled in and handed in is uploaded on the internet, and it is modified several times before the deadline for submission. If an applicant has filled it in on time, won’t recognise the changes on form and their application will be refused due to formal failure. It is necessary to register for downloading the tender documentation but even the registered users don't get any notification/reminder about the possible changes. It is unacceptable and problematic that after the calling/invitation a notice of the managing authority overwrites the earlier laws.We strongly recommend that after the invitation to a certain tender there will be no possibility for the managing authority to make changes about the invitations.

- In some cases the intermediary bodies do not answer written questions in time or they are not available on telephone. - The application system needs to be simplified, for example all the necessary documents, attachements etc. should be handed in electronic form.Only those documents should be handed in, which are definitely needed in case of the decision making, all other certificates and appendixes should be handed 'in paper form'only if the applicant wins the tender. It could be a solution if the Managing Authority has an access to a specific database, in which it could check all the requested data of the applicants.

Chamber of Commerce and Industry Csongrád County Szeged, Hungary

C071 - 18.12.2009 UK

Response to consultation on EC FINANCIAL RULES

1. General Issues on grants. Parliament and its funding Purpose. The EC Financial rules need to be designed carefully to meet the programming objectives of the European Union and the funding decisions of the European Parliament. Each funding stream of grants through calls for proposals are carefully designed to meet the decisions of the European Parliament and properly there is a wide diversity of funding programmes tailor made and regularly reviewed to provide opportunities for non state actors to work with the European Union. These are to meet shared objectives, as trusted “partners” rather than administrative “agents”. Fit for Purpose These programme should also have financial rules that are fit for purpose, that if a partnership is claimed it should be implemented by working together with those partners on what kinds of programmes are appropriate and what kind of reporting is appropriate to ensure that European funding is effectively and efficiently used on relevant programmes to produce the necessary outputs, but more importantly the longer term outcomes. One of these longer term outcomes in working with civil society in particular to combat racism and xenophobia should be to empower those individuals and sectors in society that are victims of racism and to reinforce their own capacity to become self reliant in responding to these abuses that contradict EU Directives. Any financial rules should take reasonable measures to ensure that there is no improper expenditure, but be fit for purpose relying not on bureaucratic controls but appropriate auditing , flexibility and a recognition that in the real world of civil society initiatives they need to respond to changing circumstances . Lessons should be learnt from the manner in which governments of the European Union themselves fund civil society organisation. Models of good governmental Practice. The UK government has a rich tradition of supporting civil society organisations but so too do the Nordic States ( e.g. Denmark, Finland, and Sweden) as well as Germany and the Netherlands. Other states also have some good experiences. In this study donor government advice should be sought for models of good practice, where it has been carefully considered what is fit for purpose, especially through complex multi lingual and multi- country programming of aid and foreign ministries.

Reviews and the tailoring of rules. One hat does not fit all either for programming or for financial rules. These rules to be fit for purpose need to be drawn up with those delivering the programmes in consultations like this, the outcome of this should be subject to joint monitoring in a participatory manner and evaluated and revised in the classic project management cycle method every two to three years. It is very unfortunate that calls for more regular reviews by ECAS have not been accepted in the past, though the Commission should be commended for taking this initiative if its finding are acceptable to the large community of civil society organisations and in our field to those combating racism and xenophobia who have been funded by the Commission in the past. 2. Specific Issue of small organisations: grants. Background: This submission is being provided as an individual contribution from an EU citizen though similar reflections may also come from other small organisations to whom I submitted these reflections. They are based on my role as a former Director of an international organisation that was the beneficiary of EU funding between 1990-2000, my involvement as a consultant for international organisations including the European Commission and more recent dialogue with small NGOs in central and Eastern Europe, whom I have met as part of an independent monitoring process for the Council of Europe. Furthermore I know a number of very capable and committed Officials in the Commission, who wish to work more closely with civil society organisation and find the current financial rules need reform. Nevertheless these are my own views. The current rules are not appropriate for small civil society/ NGO’s with modest administrative and accounts infrastructure and without specialist accounting staff. Small human rights NGO’s where the focus is primarily on fighting injustice, helping the underprivileged and trying to create a tolerant, liberal civil society through projects that become models of good practice or through awareness campaigns. They cannot offer a career path for professional staff as there is often a lack of continuity of funding and turnover is likely to be high even over 3 years. In the absence of specialist accounting staff, small NGOs often have difficulty in meeting the exacting and disproportionate standards expected by the Commission, while trying to communicate across a variety of languages and different accounting traditions.

Recommendations Simpler financial agreements: (Question 2) The Commission carefully scrutinises and assesses systematically responses to calls for proposals. It demands substantial information before it gives grants that the NGO have not only the staff but also the required administrative control systems in place. However Annex II – General Conditions applicable to European Community financed Grant Contracts for External Actions runs to 16 pages and is too onerous. It is designed - in theory to protect the Commission – but in fact, it is not tailored to the understanding and competence of small NGO’s. If the project fails or there is an audit some years after the project was completed, it is then that the ultimate weakness of the contract is brought to light and the Commission fails to protect the interests of the European tax-payer.

The financial rules should be revised to be fit for purpose and negotiated with some element of flexibility. A generic framework should not be imposed without discussions by “partners” in civil society such as ECAS . It is on this basis that projects should report, be subject to local audit and on rare occasions of failure be open to EU audit.

Simpler Contracts ( Question 2)

A shorter, much simpler contract should be drawn up and discussed, amended and agreed with small NGO’s currently working successfully with the Commission. The framework contracts should be adapted to be fit for purpose differentiating between different sizes of bids in calls for proposals. ( e.g. those schemes below 300,000 Euro, those 300,000 -1 million Euro and those above)

Administrative Costs: ( Question 3)

The “lump sum” not exceeding 7% of the total amount of eligible costs to cover administrative costs may be adequate for large budgets but for small budgets of €100K-€300K it simply does not cover a realistic staffing level. Large, well funded organisations achieve administrative economies of scale that small organisations cannot match. A one size fits all -7% - might be generous for major projects over €1M, building on an existing programme structure but will do not cover the costs required for a small NGO particularly establishing programme partnerships across countries. A lump sum administrative allowance is required for small projects with additional lump sums for the number of operational countries.

The consideration of block grants for whole projects is also an attractive idea.

Matching Funding: ( question 6)

It is becoming increasingly difficult for civil society organisations to raise matching funds from private sources. Consequently many small organisations are now disappearing as there is fatigue from other donors, who consider that the EU should be fully funding its own initiatives. In an effort to encourage community voluntary work, especially in the current economic situation, there should always be possibilities to cost into a project the voluntary time provided by volunteers, including trustees and other professional. It will recognise their value and provide an incentive to engage them. In these cases records of involvement would be required. The whole issue of matching funding should be reconsidered in the context of the primary objectives of the budgetary decisions. Volunteer time of small NGOs should always be recognised and encouraged. This could be costed on the basis of job descriptions and candidate specifications for voluntary work and accounted for .

Performance based grants ( Question 3)

The system of trying to micro manage projects is a relic of a central planning mentality with an emphasis on the quantity of inputs rather than the quality of the outcomes. It may have some relevance in assessing a proposal but leads to a disrespect of the whole system, when worksheets with the number of days worked by a manager on an NGO project requires reporting. Managers multi task and like most NGO staff work many more hours than the contracted hours.

It is equally unreal to suggest that a computer may only be used for one project, implying that staff who work part time have two or more computers on their desk. These input controls need to be reconsidered for their relevance to the objectives of the project or programme. An emphasis should be placed on the evaluation of the relevance and efficiency of achieving project outcomes.Each project should have independent mid term and end of term evaluations in built to provide a measurement of quality and to encourage institutional learning. Performance on quality should be taken into account in assessing future applications.

Risk Management ( Question 4)

It is going too far to say that failures should be celebrated and learnt from, but good programming needs to build in the need to take risks and support those projects whose projects were problematic, including those where unanticipated financial circumstances arise. There must be no tolerance of fraud, if there are substantiated allegations, they need carefully investigating locally, possibly through a list of trusted auditors who work in the sector. The perpetrators should be taken to court and such prosecutions should act as a deterrent. An equitable policy for governmental and non governmental organisations should be implemented.

In contrast there needs to be a significant margin of appreciation in interpreting contracts, transferring funds across budgets and responding to changing circumstances in spirit of trusting partners. There are many cases involving government donors, especially aid donors like DFID, of responding to new circumstances.

Accountability of Project holder: Cascading grants ( Question 6)

There is major problem for an organisation that works with a series of project partners over a range of countries. If these are sub offices who are accountable to the central office of the project holder then the responsibilities through the central office are reasonable. However it is often the case that consortia of NGOs come together to develop a project as partners. This is welcomed by the EU as building working relationships across Europe and learning from each other.

Nevertheless a new system needs to be developed where by if one of the project partners fails to meet its responsibilities both the Commission and the main project holder should work together to seek a solution for project failures rather than place the onus exclusively on the main project holder. Furthermore in projects to combat challenging social issues risks often have to be taken, they often achieve pioneering and successful result but there is always the possibility of unanticipated circumstances and failures.

Currency Fluctuations (Question 11)

The contract puts all the risks of currency fluctuations on the NGO., and this effectively discriminates against NGOs operating outside the Euro zone. It is not a level playing field as any surpluses made by currency fluctuations must be returned to the Commission, while any losses have to be borne by the NGO. The risks are large and deters NGOs from applying for funding and can penalise those that do. In ED case it has lost almost as much as its administrative grant in covering currency losses. Preferably the EU should protect projects against currency fluctuations with its own contingency allocation or allow NGOs to both gain and lose from currency fluctuations.

Delayed payments: ( Question 11)

The Commission has a long track record of paying the final instalment months after the end of the project. A small NGO simply cannot fund the cash flow required and may have to borrow to survive. It needs to pay promptly if it is dealing with a small organisation. Although the rules specify prompt payment there are mechanisms used by desk officers overwhelmed with other work to keep correspondence going to ensure that the time limit rules can be circumvented. A review of the actual practice of Commission staff drawing on the evidence of NGOs should be undertaken, recognising that NGOs are reluctant to complain for fear, however incorrect this is, that this might affect future funding.

C072 - 18.12.2009 DE

Ich schreibe Ihnen als ein seit vier Jahren am EFRE-Programm "Zukunftsinitiative Stadtteil ZIS / Soziale Stadt" beteiligter Bürger und Projektnehmer besagten Programms. Die EU-Förderrichtlinien wurden bei unseren seit Januar 2006 ca. 200 Terminen immer wieder diskutiert. Die aufgeworfenen Fragen, Kritikpunkte und Anregungen passen zwar nicht direkt auf den von Ihnen ausgegebenen Fragenkatalog. Trotzdem freuen wir uns über die Initiative und die durch Sie für die EU getätigte Umfrage. Aus diesem Grund möchte ich Ihnen einige exemplarische Ausschnitte aus den Protokollen einzelner Sitzungen in diesem Jahr zukommen lassen (s. Ende dieser E-Mail).

Anwohner und Geschäftsstelle 2009 Quartiersbeirat Reuterkiez Termine des Beiratsplenums und der AGs, die Protokolle der Sitzungen und weitere Informationen zum Beirat finden Sie unter: http://tinyurl.com/QBR-Reuterkiez

C073 - 18.12.2009 UK

European Commission

Public consultation on the review of the financial rules applicable to the EU Budget

Save the Children UK 1 St John's Lane London EC1M 4AR United Kingdom Europaid Id Number : GB-2007-CSA-2711178057 I. CONSULTATION ON GRANTS: Background: According to the Financial Regulation, grants must be awarded in an open and fair manner, in particular through public calls for proposals. Grants may neither be cumulative nor awarded retrospectively. They must involve co-financing and cannot generate profit for the beneficiary. In addition, only costs actually incurred can be covered. The Commission is determined to simplify and reshape its system for the award of grants. With this goal in mind, the following issues could be explored. A. Information about grant opportunities: Calls for proposals are already widely published, notably on the Internet. Question 1: Are you sufficiently informed about upcoming calls for proposals in a timely manner? What improvements would you suggest? Answer 1: We think that there is a lack of information at country level. The role of EC delegations for informing potential beneficiaries/country offices could be enhanced. Annual Action Programmes (AAP) should indicate the timing of Calls wherever possible. AAP should be made available on the EC website as soon as it is adopted. Perhaps the EuropeAid webpage should hold all the comprehensive information in one place. This should include one calendar that holds together all the timeframes for when calls come out through out the year, to make the information more predictable easier for applicants to gear up. B. Co-financing and contributions in kind: EU grants must involve co-financing, sometime quite substantially. This obligation is often challenging for actors, in particular when there is no possibility to include contributions in kind like volunteer work as part of the project manager's own contribution. Question 2: should the rules be more flexible on co-financing requirements taking into account the type of actions and project managers? How could in-kind contributions best be dealt with, while adhering to the non-profit principle? Answer 2: Emergency actions shall remain an exception for the co financing principle.

Co financing shall remain limited as it constitutes a real burden for some beneficiaries. The percentage of co financing could also be linked to the duration of the programme as it is obvious that raising funds is more complicated for short term projects. In kind contributions are recognised by accounting standards and are often part of the budget elaboration as a whole. These contributions made by donors or applicants shall be recognised whenever it is obvious that it constitute a financial contribution to the program and that efforts have been made to obtain the goods/services or that a major contribution by the beneficiary or partners are made (staff, equipment, venues , etc). The EC shall clarify the various assets, goods or services that can be recognised as in kind contribution and how to account for them. Methods of valuation as well as documentation required. C. Performance-based grants: the current system for the management of grants obliges beneficiaries to meet detailed eligibility conditions and requires multiple checks throughout the duration of a project. This can sometimes discourage potential beneficiaries from even applying for a grant. More simplified management of grants could be achieved through the use of various methods (such as lump-sums, scale of unit costs and flat-rates) avoiding the current complex accounting of costs. The Commission could also envisage a new management system to cover costs based on the expected outputs of a project, i.e. the concrete objectives which are achieved. Question 3: Should the use of lump sums, flat rates become the norm rather than the exception? Should the rules allow for costs to be covered on the basis of expected outputs? If yes, can you provide concrete examples? Answer 3: Eligibility criteria and Reporting requirements and templates are unfortunately not harmonized across the Directorates at the Commission and they are not always clear for applicants and staff of the EC. An internal discussion could be initiated at the Commission level as to have a more coherent and consistent approach for accounting. A more consistent approach will encourage the beneficiaries to apply to different potential sources of funding. The concept of unit costs in the budgeting and reporting phase shall also be revised as to better reflect the project implementation (often applicants struggle to make their budget fit the EC formats). The revision of the ECHO budget and reporting formats as to enable the applicants to use their internal templates shall be taken as an example. The EC shall review the level of details required in budget and reports and instead of that give general instructions as how to develop a budget/project. Activity/Results based oriented approach will be very useful for beneficiaries as it often corresponds to the structure of the action plan/logical framework. Again the ECHO funds for which we can now report per Result is a good example. D. Non profit rule: EU grants cannot generate profit for beneficiaries since a subsidy should remain a mere incentive to support projects rather than have a commercial purpose. This often creates misunderstandings between the Commission and the beneficiaries as well as excessive administrative work.

Question 4: Should the rules strictly adhere to the non-profit principle or should there be room for some flexibility in this matter? Do you have examples of good practices from other public authorities? Answer 4: Article 15.10 , 2008 General conditions, which states: Any interest or equivalent benefits accruing from pre-financing paid by the Contracting Authority to the Beneficiary shall be mentioned in the interim and final reports. Subject to the conditions laid down in the basic act, any interest accruing from pre-financing equal or below EUR 250 000 paid by the Contracting authority shall not be due to the Contracting authority and may be used by the Beneficiary for the Action. Any interest accruing from pre financing of more than EUR 250 000 paid by the Contracting authority shall be assigned to the Action and deducted from the payment of the balance of the amounts due to the Beneficiary, unless the Contracting Authority requests the Beneficiary to reimburse the interest generated by pre-financing payments before the payment of the balance. Save the Children will welcome clarity on the rule for the use of interest for the action as the above article suggests that interest accrued on pre financing of less than EUR 250 000 may be used by the Beneficiary for the action. Save the Children will suggest that the interests can be used for expanding the outputs of the project and thus increase the overall amount of funding available for the action. Clear criteria for the use of interests shall be described in the financial regulations. Profits shall be allowed as long as the profit is re invested into a system/entity aiming at the objective of the initial grant. (Income generated activities/Microfinance/Micro credit). E. Ceilings for small grants: Current rules on grants comply notably with the principles of co-financing, equal treatment and fair competition. However, some flexibility is allowed for "low" value grants (≤ EUR 25,000) or "very low" value grants (≤ EUR 5,000). Question 5: What, in your view, would be the appropriate amount for low and very low value grants? Answer 5: The administrative burden to manage 1 million euro versus a 100,000 euro grants is the same, irrespective of the size of the grant. Therefore NGOs do think twice about going for small grants. Therefore, the EC should take into account the level of administrative burden and reporting requirements required for small grants and perhaps should consider different level of reporting and administrative requirement for small grants such as 100,000 - 500. 000, to encourage local NGOs to apply. F. Financial stability for grant applicants: Current rules foresee a gradual decrease of 'operating' grants, i.e. financing administrative expenditure, notably to encourage beneficiaries to diversify and generate own resources. For similar reasons, the duration of framework partnership agreements, established as a long-term cooperation mechanism with beneficiaries, is limited. Such provisions could be examined in order to find the most appropriate balance between the need for financial stability and the risk of excessive reliance on EU funds. Question 6: How could the rules on operating grants be more flexible? In which way? What are your views on the duration of framework partnership agreements? Answer 6: FPA periods shall be aligned to the periodicity of the Financial Framework of the Union (Financial Perspectives cycle of 7 years). The ECHO shall recognise that the annual reviews of FPA partners might overlap quite substantially with the specific audits carried out on grants by the Commission. Many areas of internal organisation,

(Internal Control Questionnaires) might be similar and this means that the FPA partners might have to provide several times the same kind of information. The EC shall centralize the information held on FPA partners and provide auditors with information prior to their audit missions. ICQ questionnaires and annual reviews used during project audits shall be compared as to avoid too many repetitive questions. G. 'Cascading' grants involving third parties: The possibility for a beneficiary to redistribute part of its grant through subsidies to third parties is currently strictly limited, with a view to notably ensuring adequate monitoring and control of tax payers' money by the Commission. Question 7: Can you give concrete examples and types of actions where the strict limitation on cascading grants became an obstacle for achieving the goal of your action? Answer 7: The ceilings of 10 000 euros/beneficiary-100 000 euros per grant for sub granting, might not be appropriate for large scale projects of over 1 million Euros. These ceilings shall be based on the size of the grants and thus be established as a percentage rather than amounts.(pro rata basis) II. CONSULTATION ON THE COMMISSION’S HANDLING OF FINANCIAL FILES: Background: The financial handling of contracts and grants by the Commission is designed to minimise the risks of error, irregularities and fraud, and to ensure a strict and adequate monitoring and control of tax payers' money. In practice, rules can create additional red tape and checks. The Commission is examining whether these rules can be adapted and how, so as to ensure effective project management as well as a high level of protection of the tax payers' interest. H. Pre-financing payments to beneficiaries: These payments are considered as the property of the Communities until the action has been fully implemented. As a consequence, the interests generated by these payments have to be reimbursed to the EU Budget. This creates administrative and financial formalities (dedicated bank account, cash consumption analysis...) and checks. Question 8: From your experience, what alternative solutions could be proposed for prefinancing payments while safeguarding tax payers' money? Answer 8: Beneficiaries of EC funds might encounter cash flow problems due to late payments of pre financing. That’s often the case when EC funds are transferred late after signature of the grants or when reviewing interim or final reports. Some beneficiaries have to pre finance activities with their own funds or with funds borrowed from banks. In that case, often they don’t claim the interest from the EC. It is often complicated for beneficiaries to manage their funds which seat on several bank accounts. For beneficiaries operating a few EC grants, they have to open different accounts for each grant which require administrative burden and a higher cost. In reality, many organisations manage their funds centrally on one bank account and are obliged to transfer funds from one account to another. Having a separate account does not therefore make sense for most beneficiaries and the EC shall recognise that and allow them to manage their cash flows as appropriate.

As a general principle, interests yield shall be re injected into the grants and considered as an income for the beneficiaries and use for the action. It is also the job of auditors to review the interests during their verification missions. We would also recommend to beneficiaries to use Non interest bearing account. I. Pre-financing guarantees: These guarantees are required to reduce the risk of EU money being lost in case the beneficiary goes bankrupt or otherwise fails to implement the project or repay the money. Yet, the corresponding amount is usually blocked by the bank guarantor, removing the advantage of the pre-financing. Question 9: What mechanism, other than pre-financing guarantee, could be explored while ensuring adequate protection of community funds? Answer 9: Exceptions shall be granted to organisations that have a certain experience, size and reputation, even if a framework agreement is not signed. This could be based on the level of annual turnover. J. Tendering thresholds for low value contracts: Under certain thresholds, the procedure is simplified: contracts may be awarded on the basis of a single tenderer and payments can be paid made against invoices. Question 10: Based on your experience, do you think current thresholds are still adequate or should they be increased, and why? Answer 10: We think that the current ceilings are appropriate. The recent alignment with EDF ceilings is welcomed. Within the ECHO FPA, the beneficiaries awarded the P control mechanism can use their own procurement procedures. This principle shall be used more broadly across most of the Directorate Generals. K. Paperwork for applicants: As a rule, when participating in a tender or call for proposals, applicants are invited to provide detailed information on their organisation and to present a comprehensive proposal on their project and/or offer. To fulfil these conditions more easily, the current rules foresee the possible use of e-tools but, in practice, this possibility is under-utilised for various technical reasons linked, among other things, to the authentication of documents. In another effort to reduce paperwork, the Commission has also created the possibility to split the grant selection process into 2 steps with a view to only inviting the applicants most likely to be successful to submit a full application. However, while this new procedure reduces work for applicants, it increases the duration of the selection process quite significantly. Considering the above, one idea to continue reducing paperwork could be the introduction of a "label" system so that organisations that have successfully carried out a project and/or contract send only documents relevant to the new application. Question 11: How could the application procedure for both grants and contracts be further improved?

Answer 11: An online process will definitely improve the process as long as the online forms and procedures are clear and do not differ too much from the existing process. Some Directorate Generals at the Commission already use the online application (DG Research). From a technical point of view, the online application must be secure so the applicants never lose the data. Access to internet must also be taken into consideration for some applicants. The PADOR registration has already improved the process as the information on applicants in kept in a database. Again, harmonisation across the Directorates will ease the understanding of the funding rules and eligibility criteria. This goes for the number of copies required, applications on CR Rom or not, definition of submission deadlines, etc… For some documents, the EC still requires original documents, i.e. financial ID. Financial Identification Form should be uploaded on PADOR and should not be requested each time a grant is signed. E-Single Form, which is being piloted, is very time consuming to complete. This is partly because instead of uploading a word/pdf version of completed Single Form, it requires us to break down information section by section. We strongly hope that PROSPECT is a straightforward tool that allows applicants to upload a completed application form.

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Dr. Simon Godwin Director EUCAR Avenue des Nerviens 85 B-1040 Brussels

E-mail: sg@eucar.be

Phone: +32 2 738 73 66

European Commission Brussels

18th December 2009 Contribution to the European Commission’s public consultation on the review of the Financial Regulation Dear Sir / Madam,

The European Council for Automotive Research and Development (EUCAR) is the association of the twelve major European automobile manufacturers in the R&D area. EUCAR appreciates the many improvements the European Commission has implemented in the recent Framework Programmes to simplify administrative procedures. Therefore, we fully support the Commission’s earlier initiative of a survey on administrative issues for further simplification and this current initiative of a consultation on the review of the Financial Regulation. We are pleased to make a contribution to the Financial Regulation consultation relevant to the work of EUCAR and its members involved in projects funded by the 7th Framework Programme.

In this context we refer to - The basic document “Certificates issued by external auditors – guidance notes for

beneficiaries and auditors” published by the European Commission on September 3rd, 2009,

- The “Guide to financial issues relating to FP7 indirect actions” on April 2nd, 2009 and - The Commission Decision C(2009) 4705 final from June 23rd, 2009.

According to these updates the previously employed method of using average hourly labour rates of cost centres is no longer possible, replaced by the requirement to use only actual cost per employee. This causes substantial administrative efforts, requiring additional resources as well as requiring extremely sensitive and confidential individual salary data to be handled by many different people within the organisation. Further, all enterprises in those European member states with strong data privacy protection in accordance with Directive 95/46/EC could be disadvantaged.

The alternative offered, namely fulfilling the conditions for a Certificate on Methodology (CoM or CoMAv), has been found by our members to be very time consuming and costly.

Hence, the European automobile manufacturers propose that the European Commission allow cost claiming based on a methodology that is in accordance with the usual accounting principles of the beneficiaries. As previously accepted, the use of average hourly labour rates per cost centre is common practice in most of the companies and accepted in accounting rules of the respective Member State.

Against this backdrop, the automobile industry supports the resolution of the European Parliament (SEK(2008)2359 – C6-0415/2008 – 2008/2186(DEC), annex 5, paragraph 117)

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addressed on April 23rd, 2009 with the request to allow cost-claiming on a methodology that is in accordance with the generally accepted accounting principles of the beneficiary and could enable our industry to allow calculation and charging of average hourly rates per cost centre.

In order to open a fruitful discussion aimed at finding a solution that could satisfy both the Commission’s methodological criteria and the industry’s accounting principles, we would very much appreciate further open discussion on this issue and remain at your disposal for questions and comments.

Yours faithfully,

Dr. Simon Godwin

Director

C075 - 18.12.2009 PT

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REVIEW OF THE FINANCIAL REGULATIONS Public Consultation

1 – GRANTS Background: According to the Financial Regulation (Title VI), grants must be awarded in an open and fair manner, in particular through public calls for proposals. Grants may neither be cumulative nor awarded retrospectively. They must involve co-financing and cannot generate profit for the beneficiary. In addition, only costs actually incurred can be covered. The Commission is determined to simplify and reshape its system for the award of grants. With this goal in mind, the following issues could be explored. A) Information about grant opportunities: Calls for proposals are already widely published (Art. 110 FR and Art. 166 IR), notably on the Internet. Question 1: Are you sufficiently informed about upcoming calls for proposals in a timely manner? What improvements would you suggest? The information is visible and easily accessed however this is not true for all the persons. Call for proposals don’t respect equal opportunities. If someone has some handicap has difficulties in access the information. It will be important have a kind of “green telephone number” in order to take doubts and clarify some questions. It will be also important to have the information in different languages. B) Co-financing and contributions in kind (Art. 109 FR and Art. 172 IR): EU grants must involve co-financing, sometime quite substantially. This obligation is often challenging for actors, in particular when there is no possibility to include contributions in kind like volunteer work as part of the project manager's own contribution. Question 2: should the rules be more flexible on co-financing requirements taking into account the type of actions and project managers? How could in-kind contributions best be dealt with, while adhering to the non-profit principle? The need of co-financing is already a difficulty for Non Governmental Organizations, because these Organisations usually have some limitations like small dimension, small staff and lack of resources to be allocated to a project. By this way, the rules in terms of co-financing should be flexible and take into account the beneficiary structure, the type of action and project. It would be important to have the opportunity to consider, as co-financing, voluntary work (non remunerated staff) and also equipments (rooms and other technical and human resources that Organisations usually mobilize in their daily activities.

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C) Performance-based grants (Art. 108a FR and Art. 180a & 181 IR): The current system for the management of grants obliges beneficiaries to meet detailed eligibility conditions and requires multiple checks throughout the duration of a project. This can sometimes discourage potential beneficiaries from even applying for a grant. More simplified management of grants could be achieved through the use of various methods (such as lump-sums, scale of unit costs and flat-rates) avoiding the current complex accounting of costs. The Commission could also envisage a new management system to cover costs based on the expected outputs of a project, i.e. the concrete objectives which are achieved. Question 3: Should the use of lump sums, flat rates become the norm rather than the exception? Should the rules allow for costs to be covered on the basis of expected outputs? If yes, can you provide concrete examples? Lump sums and flat rates should be exception and not the rules. Truly it would be important consider it as a reference when an Organisation is preparing a project. The costs covered by a Project should consider the expected results, the target group and the impact of the project. D) Non profit rule (Art. 109 FR and Art. 165 IR): EU grants cannot generate profit for beneficiaries since a subsidy should remain a mere incentive to support projects rather than have a commercial purpose. This often creates misunderstandings between the Commission and the beneficiaries as well as excessive administrative work. Question 4: Should the rules strictly adhere to the non-profit principle or should there be room for some flexibility in this matter? Do you have examples of good practices from other public authorities? No E) Ceilings for small grants: Current rules on grants comply notably with the principles of co-financing (Art. 172 IR), equal treatment and fair competition (Art. 173 IR). However, some flexibility is allowed for "low" value grants (≤ EUR 25,000 Art. 172.3 IR and Art. 173.2 IR) or "very low" value grants (≤ EUR 5,000 Art. 114.3 FR and Art. 175b IR). Question 5: What, in your view, would be the appropriate amount for low and very low value grants? We agree with the current amounts, but the very low value grants should be 10 000€.

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F) Financial stability for grant applicants: Current rules foresee a gradual decrease of 'operating' grants, i.e. financing administrative expenditure (Art. 113.2 FR), notably to encourage beneficiaries to diversify and generate own resources. For similar reasons, the duration of framework partnership agreements, established as a long-term cooperation mechanism with beneficiaries (Art. 163 IR), is limited. Such provisions could be examined in order to find the most appropriate balance between the need for financial stability and the risk of excessive reliance on EU funds. Question 6: How could the rules on operating grants be more flexible? In which way? What are your views on the duration of framework partnership agreements? It would be important, for the financial stability, to have the payment arrangements in the following instalments: 50%; 30%; 20%. G) 'Cascading' grants involving third parties: The possibility for a beneficiary to redistribute part of its grant through subsidies to third parties is currently strictly limited (Art. 120 FR and Art. 184a IR), with a view to notably ensuring adequate monitoring and control of tax payers' money by the Commission. Question 7: Can you give concrete examples and types of actions where the strict limitation on cascading grants became an obstacle for achieving the goal of your action? No comments

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2 - THE COMMISSION'S HANDLING OF FINANCIAL FILES Background: The financial handling of contracts and grants by the Commission is designed to minimise the risks of error, irregularities and fraud, and to ensure a strict and adequate monitoring and control of tax payers' money. In practice, rules can create additional red tape and checks. The Commission is examining whether these rules can be adapted and how, so as to ensure effective project management as well as a high level of protection of the tax payers' interest. A) Pre-financing payments to beneficiaries (Art. 5a FR): These payments are considered as the property of the Communities until the action has been fully implemented. As a consequence, the interests generated by these payments have to be reimbursed to the EU Budget. This creates administrative and financial formalities (dedicated bank account, cash consumption analysis...) and checks. Question 8: From your experience, what alternative solutions could be proposed for prefinancing payments while safeguarding tax payers' money? In this moment projects must send to the Commission a Bank declaration demonstrating that the project didn’t generate interests for the beneficiary. We think that this is sufficient. B) Pre-financing guarantees (Art. 152 IR): These guarantees are required to reduce the risk of EU money being lost in case the beneficiary goes bankrupt or otherwise fails to implement the project or repay the money. Yet, the corresponding amount is usually blocked by the bank guarantor, removing the advantage of the pre-financing. Question 9: What mechanism, other than pre-financing guarantee, could be explored while ensuring adequate protection of community funds? It would be useful if the pre-financing considered a small percentage of risk and the other percentage as pre-financing. Like we said in the question 1 F, If we have a pre-financing of 50%, 10% could be to cover the risk of the money being lost and the other part could be real pre-financing. C) Tendering thresholds for low value contracts (Art. 129 IR): Under certain thresholds, the procedure is simplified: contracts may be awarded on the basis of a single tenderer and payments can be paid made against invoices. Question 10: Based on your experience, do you think current thresholds are still adequate or should they be increased, and why?

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It would be important to have more transparency in contracts even if they are of low values. D) Paperwork for applicants (notably Art. 143 IR, Art. 172c IR and Art. 138a IR): As a rule, when participating in a tender or call for proposals, applicants are invited to provide detailed information on their organisation and to present a comprehensive proposal on their project and/or offer. To fulfil these conditions more easily, the current rules foresee the possible use of e-tools but, in practice, this possibility is under-utilised for various technical reasons linked, among other things, to the authentication of documents. In another effort to reduce paperwork, the Commission has also created the possibility to split the grant selection process into 2 steps (Art. 178 IR) with a view to only inviting the applicants most likely to be successful to submit a full application. However, while this new procedure reduces work for applicants, it increases the duration of the selection process quite significantly. Considering the above, one idea to continue reducing paperwork could be the introduction of a "label" system so that organisations that have successfully carried out a project and/or contract send only documents relevant to the new application. Question 11: How could the application procedure for both grants and contracts be further improved? The idea of “label” system it would be important to simplify the application procedure. In Portugal there is a kind of registration system and when Organisations need to present an application of a project there’s no need to send all the documentation related with the beneficiary. However it would be important to guarantee equal opportunities and promote equal access of all the Organizations/citizens to grants. Having a “label” system can facilitate all the procedures but can also promote mechanisms of exclusion and lack of motivation of the actors. This needs to be prevented/avoided.

C076 - 18.12.2009 PL

1 – GRANTS

• Information about grant opportunities: Calls for proposals are already widely published (Art. 110 FR and Art. 166 IR), notably on the Internet.

Question 1: Are you sufficiently informed about upcoming calls for proposals in a timely manner? What improvements would you suggest? Ogłoszenia w Internecie w zasadzie zaspokajają zapotrzebowanie na informację. MoŜna by rozwaŜyć rozszerzenie dostępu do niej poprzez większą liczbę tłumaczeń, tj. w języku kaŜdego państwa członkowskiego. Naszym zdaniem dobrym pomysłem byłoby stworzenie orientacyjnych harmonogramów konkursów dla większej liczby programów UE. Dobrze by było teŜ stworzyć narzędzie „Kalendarz” na głównej stronie Komisji oraz w portalu Europa, gdzie zamieszczone byłyby terminy ogłaszanych konkursów oraz linki do odpowiednich stron. Istniejąca strona: http://ec.europa.eu/grants/index_en.htm jest niewystarczająca, w dodatku dostępna jest tylko w trzech językach (ang., franc., niem.).

• Co-financing and contributions in kind (Art. 109 FR and Art. 172 IR): EU grants must involve co-financing, sometime quite substantially. This obligation is often challenging for actors, in particular when there is no possibility to include contributions in kind like volunteer work as part of the project manager's own contribution.

Question 2: should the rules be more flexible on co-financing requirements taking into account the type of actions and project managers? How could in-kind contributions best be dealt with, while adhering to the non-profit principle? Zdecydowanie postulujemy uelastycznienie zasad dotyczących wymaganego wkładu własnego w projektach zgłaszanych przez organizacje pozarządowe. Wnioskujemy o umoŜliwienie wnoszenia wkładu własnego równieŜ w postaci niefinansowej (np. wolontariusze, dostęp do sal i wyposaŜenia). MoŜna rozwaŜyć, czy cały wymagany wkład własny mógłby być w ten sposób zabezpieczony, czy np. w połowie. Drugą połowę stanowiłby przy takim rozwiązaniu wkład własny finansowy.

• Performance-based grants (Art. 108a FR and Art. 180a & 181 IR): The current system for the management of grants obliges beneficiaries to meet detailed eligibility conditions and requires multiple checks throughout the duration of a project. This can sometimes discourage potential beneficiaries from even applying for a grant. More simplified management of grants could be achieved through the use of various methods (such as lump-sums, scale of unit costs and flat-rates) avoiding the current complex accounting of costs. The Commission could also envisage a new management system to cover costs based on the expected outputs of a project, i.e. the concrete objectives which are achieved.

Question 3: Should the use of lump sums, flat rates become the norm rather than the exception? Should the rules allow for costs to be covered on the basis of expected outputs? If yes, can you provide concrete examples? Uproszczenie systemu zarządzania projektem, zwłaszcza dla organizacji pozarządowych, w tym zarządzania finansami, jest konieczne. Obecne wymogi są zbyt zbiurokratyzowane, przez

co generują dodatkowe koszty administracyjne, zaś ich spełnienie niekoniecznie gwarantuje spełnienie wymagań dot. przejrzystości itp. Postulujemy wprowadzenie moŜliwości rozliczania wydatków administracyjnych. Ponadto wnioskujemy o umoŜliwienie beneficjentom przesunięć między wszystkimi kategoriami pozycji budŜetowych o 20 %.

• Financial stability for grant applicants: Current rules foresee a gradual decrease of 'operating' grants, i.e. financing administrative expenditure (Art. 113.2 FR), notably to encourage beneficiaries to diversify and generate own resources. For similar reasons, the duration of framework partnership agreements, established as a long-term cooperation mechanism with beneficiaries (Art. 163 IR), is limited. Such provisions could be examined in order to find the most appropriate balance between the need for financial stability and the risk of excessive reliance on EU funds.

Question 6: How could the rules on operating grants be more flexible? In which way? What are your views on the duration of framework partnership agreements? Naszym zdaniem bardzo istotnym wsparciem dla organizacji społeczeństwa obywatelskiego są tzw. granty instytucjonalne, czyli środki na rozwój potencjału organizacji. UwaŜamy jednak, Ŝe równieŜ realizacja kaŜdego projektu powinna wzmacniać organizację tak, aby dzięki nabytym doświadczeniom, nawiązanym kontaktom, wreszcie – uzyskanym efektom - organizacja stawała się silniejszą instytucją. Przekłada się to m.in. na rolę NGOsów jako pracodawców. Jedną z moŜliwości pokazują zapisy dotyczące zasad wypracowanych w Polsce dla Grantu Blokowego dla organizacji pozarządowych, finansowanego w ramach Szwajcarsko-Polskiego Programu współpracy. Rozumiejąc potrzebę instytucjonalnego wzmocnienia organizacji pozarządowych, jak równieŜ trudności na uzyskanie na ten cel środków przez NGOsy, „Wytyczne w sprawie Grantu Blokowego dla Organizacji Pozarządowych i Polsko – Szwajcarskich Regionalnych Projektów Partnerskich w ramach Szwajcarsko – Polskiego Programu Współpracy”, przyjęte w styczniu 2009 r., zawierają następujące zapisy: „[…] istnieje moŜliwość przeznaczenia części środków finansowych na wzmocnienie zdolności instytucjonalnych organizacji pozarządowych poprzez m.in.: szkolenia i konsultacje specjalistyczne, poprawę jakości usług, mających znaczenie z punktu widzenia prawidłowej i efektywnej realizacji projektu, rozwój długookresowych strategii operacyjnych, doradztwo, etc. Ponadto, w ramach wzmacniania zdolności instytucjonalnych, beneficjent moŜe sfinansować koszty zarządzania projektem, w wysokości do 10% kosztów kwalifikowalnych projektu, dotyczące faktycznego administrowania i operacyjnego zarządzania projektem. PowyŜsze działania muszą wspierać i słuŜyć realizacji głównych celów i przedmiotu projektu (wskazanych w pkt. 1) – (3) ) i nie mogą przekroczyć łącznie 30 % wartości projektu (mieszczących takŜe ww. koszty zarządzania)” (s. 10). Wzmacnianie instytucjonalne organizacji pozarządowych jest niezbędne, jeśli mają one być ośrodkami niezaleŜnymi, zaś ich charakter – jako istotnego aktora sceny demokratycznej – trwały. Z uwagi na wieloletnie blokowanie rozwoju społeczeństwa obywatelskiego, takie rozwiązania są szczególnie istotne dla NGOsów zarejestrowanych i działających w państwach, które stały się członkami Unii Europejskiej w 2004 i 2007 roku. Szczegółowe informacje nt. Grantu Blokowego dostępne są na stronie internetowej polskiego Ministerstwa rozwoju Regionalnego (wersja polskojęzyczna: http://www.programszwajcarski.gov.pl/grant_blokowy/Strony/Grant_blokowy.aspx, English version: http://www.programszwajcarski.gov.pl/english/block_grant/Strony/B_grant.aspx).

2 - THE COMMISSION'S HANDLING OF FINANCIAL FILES

• Paperwork for applicants (notably Art. 143 IR, Art. 172c IR and Art. 138a IR): As a

rule, when participating in a tender or call for proposals, applicants are invited to provide detailed information on their organisation and to present a comprehensive proposal on their project and/or offer. To fulfil these conditions more easily, the current rules foresee the possible use of e-tools but, in practice, this possibility is under-utilised for various technical reasons linked, among other things, to the authentication of documents. In another effort to reduce paperwork, the Commission has also created the possibility to split the grant selection process into 2 steps (Art. 178 IR) with a view to only inviting the applicants most likely to be successful to submit a full application. However, while this new procedure reduces work for applicants, it increases the duration of the selection process quite significantly. Considering the above, one idea to continue reducing paperwork could be the introduction of a "label" system so that organisations that have successfully carried out a project and/or contract send only documents relevant to the new application.

Question 11: How could the application procedure for both grants and contracts be further improved? Zdecydowanie naleŜy pozostawić i wręcz upowszechniać procedurę dwustopniową, tj. najpierw ocenę listów intencyjnych (wg jednolitego formularza), a dopiero później pełnych wniosków, nadesłanych przez projektodawców będących autorami wybranych listów intencyjnych. Skróci to (i obniŜy koszt) pracy zarówno projektodawców, jak i oceniających. Proponujemy równieŜ, aby pełna dokumentacja o organizacji pozarządowej była wymagana dopiero na etapie podpisywania umowy i aby załączniki (np. wyciąg z Krajowego Rejestru Sądowego, dokumenty sprawozdawcze) mogły mieć formę elektroniczną (np. skan podpisanych dokumentów). Dobrym rozwiązaniem było wprowadzenie w dwóch programach w drugiej połowie 2009 r. formularzy elektronicznych (!). Proponujemy równieŜ, aby Komisja Europejska przyjęła harmonogram konkursów, tj. wskazała, ile czasu przeznaczono na poszczególne etapy procedury. Postulujemy, aby od terminu nadsyłania listów intencyjnych, był to okres nie dłuŜszy, niŜ 7 miesięcy, np.:

• deadline nadsyłania listów intencyjnych – 31 stycznia, • ocena listów intencyjnych i zaproszenie wybranych organizacji do składania pełnych

wniosków – do 15 marca (półtora miesiąca), • deadline nadsyłania pełnych wniosków – 15 maja (2 miesiące), • ocena wniosków i decyzje o wyborze projektów – do 15 lipca (2 miesiące), • uzupełnianie dokumentacji i podpisywanie umów – do 31 sierpnia (półtora miesiąca).

Terminy dla procedury z wykorzystaniem narzędzi elektronicznych, z wyjątkiem ostatniego punktu. Za zaproponowanym harmonogramem przemawia fakt, Ŝe trudno realnie zaplanować w szczegółach projekt, którego realizacja ma się zacząć w dłuŜszej perspektywie, niŜ rok. Biorąc pod uwagę, Ŝe podpisywanie umów odbywałoby się 7 miesięcy po złoŜeniu listu intencyjnego, zaś przekazanie środków finansowych po podpisaniu umów, realnie wydatki (w zaleŜności od tego, jaką datę ustali się jako start kwalifikowalności wydatków) mogłyby być pokrywane przez organizacje pozarządowe z pieniędzy otrzymanych z komisji Europejskiej prawdopodobnie dopiero po ok. 1-2 miesiącach do daty podpisania umów.

C077 - 18.12.2009 UK

 www.scotlandeuropa.com 

 

 

Public consultation on the review of the Financial Regulation 

 UNDERTAKEN BY THE EUROPEAN COMMISSION OCTOBER – DECEMBER 2009 

        

SCOTLAND EUROPA MEMBERS’ CONTRIBUTION | 18 DECEMBER 2009

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Introduction  Scotland Europa members, such as ESEC, COSA and UHI, and Scottish Enterprise  (SE) have 

many  years  experience  in  utilising  Structural  Funds  to  undertake  economic  development 

activities across Scotland. They have also participated in a large number of EU Transnational 

Programmes. We appreciate the opportunity to respond to this consultation on revision of 

the EU‘s financial regulations.  We hope that our knowledge and practical experience in the 

field will help inform and shape the future of this important policy area. 

 

Recent  experience  in  delivering  projects  has  highlighted  a  growing  and  disproportionate 

emphasis on  financial control requirements that are proving costly and bureaucratic for us 

and the Scottish companies and other organisations which we support.  We would welcome 

a culture shift in this and are hopeful of a number of suggestions put forward by DG Budget 

in the consultation document.   

 

In contributing to this consultation we hope its outcome will be a return to EU Programmes 

being driven by  strategy  rather  than  compliance which has unfortunately  taken hold. The 

key  principles which we would  like  to  see  taken  on  board  by  the  European  Commission 

include: 

the need for proportionality; 

a shift toward becoming more performance and outcomes based; and  

the need for simplification and flexibility to be introduced to the audit system. 

 

In addition, we raise specific concerns relating to the onerous burden placed on Small and Medium Enterprises (SMEs) who receive grants which are supported by European Regional Development Funding (ERDF).  The administrative burden placed on SMEs by the compliance requirements can be out of proportion to the grants provided as it incurs significant expense for  the  SMEs  concerned.    This  can  diminish  the  value  of  the  public  sector  support  often desperately  needed  during  the  current  economic  climate.    This  disproportionate  burden placed on EU grant recipients undermines the excellent work being done elsewhere by the European Commission to reduce administrative burdens on companies. 

 

Scotland Europa members have responded to the individual questions as outlined below. 

 

18 December 2009   

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Scotland Europa  Scotland  Europa  is  a membership‐based  organisation  that  promotes  Scotland's  interests across the institutions of the European Union and to the representatives of Europe’s regions and  Member  States.  We  help  Scottish  organisations  foster  successful  European relationships, providing guidance on European policies and funding.   Scotland Europa membership brings  together a wide  range of Scottish organisations  from the public, private and education sectors. We are also part of Scottish Enterprise ‐ Scotland’s main Economic, Enterprise, Innovation and Investment Agency ‐ working closely to support our colleagues, both in Scotland and in Scottish Development International offices across the world, to enhance Scotland’s economic development and influence in Europe.  For further information on this submission please contact:  Liz Gribben, Senior Executive, Scotland Europa Liz.gribben@scotent.co.uk   

Contributors: 

 

ESEC  

The East of Scotland European Consortium (ESEC) was established  in 1992 to promote the 

European interests of local authority members and engage with European policy and funding 

issues on their behalf.  ESEC represents 13 local authorities in Eastern Scotland.   

Our aim is to: 

• Share intelligence and maximise funding opportunities 

• Lobby and petition on behalf of the East of Scotland 

• Ensure policy engagement 

 

Scottish Enterprise Scottish Enterprise (SE) is Scotland's main economic, enterprise, innovation and investment 

agency.  Our ultimate goal is to stimulate sustainable growth of Scotland’s economy.   

 

COSLA 

COSLA, the Convention of Scottish Local Authorities, is the representative voice of Scottish 

local  government  and  also  acts  as  the  employers’  association  on  behalf  of  all  Scottish 

councils. 

 

UHI Millennium Institute 

UHI is a partnership of colleges, learning and research centres, working together to provide 

university‐level education to people throughout the Highlands and  Islands of Scotland, and 

beyond. 

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1. Grants   

Information  about  grant  opportunities:  Calls  for  proposals  are  already widely  published, notably on the Internet. 

Question  1:  Are  you  sufficiently  informed  about  upcoming  calls  for  proposals  in  a  timely manner?  What improvements would you suggest? 

 

Calls  for Proposals are well publicised on  the Europa site,  through  the Official  Journal and relatively well through networks facilitated by National Contact Points, Managing Authorities and others.   However, there  is always room  for  improvement on how  information reaches relevant  organisations,  particularly  with  regards  to  timing.   We  have  had  experience  of receiving  information too close to call deadlines to allow participation.   Even with advance warning of  calls,  taking part  can be difficult  particularly where  transnational partnerships need to be developed.   

 

Generally,  public  sector  participants  need  to  obtain  authorisation  from  Boards  or Committees  (which  meet  relatively  infrequently  in  project  development  timescales)  to participate  in  an  application.    When  building  partnerships  it  can,  therefore,  take considerable time to gain support from all partners for an application to be submitted.  We estimate  that  it can  take at  least one year  for a good  transnational partnership  to be  fully developed.  This means that Programmes with regular calls with an open and a competitive challenge  fund  approach  (e.g.  regional  policy  Programmes)  become more  attractive  than others which might commission specific activity through work Programmes (e.g. Framework or other sectoral Programmes).     More advance notice, therefore, needs to be given to the calls for sectoral Programmes to ensure genuine additionality can be demonstrated.   

 

Greater  communication  is needed with a broader  set of  stakeholders on  likely  themes  to feature in future calls, ideally up to a year in advance in order to allow time to develop good quality project bids.  We feel that the model used for the Europa EU Calendar which details EU  meetings  could  be  used  for  detailing  all  new  call  deadlines.    The  opportunity  for stakeholders signing up for e‐alerts on certain themes would also be beneficial. This would hopefully  have  the  effect  of  a more  diverse  range  of  partners  participating  in  some  EU Programmes including Framework programme where calls are very specific and projects are required to fit in exactly with those requirements.   

 

In addition to improving the sharing of information such processes could be developed into ‘communities  of  practice’  in  EU  funding  between  the  Commission  and  EU  funding practitioners on the ground. The Commission units supporting such a calendar and e‐alert provision could also be specifically dedicated to receiving complaints or recommendations from  practitioners  on  experiences  in  applying  the  Regulations  governing  EU  funding programmes. Therefore putting  them  in a position  to proactively advise on good and bad practice information, which they could collate and make available on the web.  

 

The  time  lag between  submission of application and approval  can also present difficulties particularly  in relation to match funding of projects.   Public sector organisations can rarely 

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leave  funding  in  place  for  significant  periods without  gaining  approval  and  commencing delivery of projects. 

 

Co‐financing and contributions in kind: EU grants must involve co‐financing, sometime quite substantially. This obligation  is often  challenging  for actors,  in particular when  there  is no possibility  to  include  contributions  in  kind  like  volunteer  work  as  part  of  the  project manager's own contribution. 

Question  2:  Should  the  rules  be  more  flexible  on  co‐financing  requirements  taking  into account the type of actions and project managers?  How could in‐kind contributions best be dealt with, while adhering to the non‐profit principle? 

 

Public sector finances in Scotland will almost certainly be constrained in the short to medium term.  The financial crisis is having a delayed impact on the public sector where budgets for the 2009  ‐10  financial year were pre‐established and a number of  strategic projects were brought forward during that period to help support certain sectors such as the construction industry.    In  the short  to medium  term  therefore, more  flexibility  is certainly desirable, as availability of cash match‐funding will be limited.  The Commission may wish to return to this issue in the longer term, but even in periods of good economic growth this was an issue for many of our members.   

 

Additionally,  the  need  for  organisations  to  sign  up  for  full match  funding  can  often  be difficult given the annuality of public sector budgets.     Organisations are being constrained by  the  fact  that  match  funding  is  fixed  when  EU  grants  are  approved  and  can  suffer adversely if project funding needs to be revised.  The heavy administrative burden placed on sponsors  can mean  that  a  reduced  EU  grant  needs  to  be  serviced  with  long  document retention periods when the EU intervention rate is low.  See also comments above regarding the timescale for approval of projects. 

 

We would  like  staff  time  to be eligible  as match‐funding  across  all  the Programmes on  a permanent basis.   Whilst we agree that  it  is  important to demonstrate the additionality of EU funding, we feel that additionality can still be proven while using permanent staff’s time as an in‐kind match to EU funds, providing of course that supporting evidence is provided to prevent abuse.  It is also possible to adhere to the “non‐profit principle” while using in‐kind contributions.   This works especially where projects are a mixture of  in‐kind contributions and  cash  contributions and where  the  grant  rate generates a grant  total  significantly  less than  the  in‐kind contribution.   Money “generated”  in  this way  is simply recycled back  into the project’s activity.   The  issue with  the “non‐profit principle” seems  to be  less about  in‐kind contributions per se and more about the proportion of a project that should permissibly be made up of in‐kind contributions.   

 

Performance‐based  grants:  The  current  system  for  the  management  of  grants  obliges beneficiaries to meet detailed eligibility conditions and requires multiple checks throughout the duration of a project. This can sometimes discourage potential beneficiaries  from even applying for a grant. More simplified management of grants could be achieved through the use of various methods  (such as  lump‐sums, scale of unit costs and  flat‐rates) avoiding the 

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current  complex  accounting  of  costs.  The  Commission  could  also  envisage  a  new management  system  to  cover  costs  based  on  the  expected  outputs  of  a  project,  i.e.  the concrete objectives which are achieved. 

Question  3:  Should  the  use  of  lump  sums,  flat  rates  become  the  norm  rather  than  the exception?  Should the rules allow for costs to be covered on the basis of expected outputs?  If yes, can you provide concrete examples? 

 

A move  to utilising  lump  sums and  flat  rates  together with  the  suggestion  for costs  to be covered  on  the  basis  of  expected  outputs,  suggests  a  move  towards  a  commissioning approach to project activity as opposed to the competitive challenge fund approach which is currently the most prevalent approach used in EU Programmes.  Commissioning projects can be highly successful.    In  the Lowland and Upland Scotland ERDF and ESF Programmes  this approach  has  partially  been  applied  with  our  Community  Planning  Partnerships  for  the delivery of certain activity within these Programmes.  However, the approach that partners involved in the Community Planning Partnerships expected they would deliver (i.e. collective funding for a number of community partners for the delivery of a series of collective outputs and  results) was not possible based on  the current  rules.    Instead, each partnership must provide  transaction  lists  for  each  partner  who  is  responsible  individually  for  a  certain number of results and outputs.   The amount of staff time which  is required to collate that information  for  verification  checks  is  excessively  disproportionate  and  the  cost  of  storing documentation  for  the  auditable  or  economic  life  of  projects  incurs  significant  costs  for sponsors which cannot be recovered. Whilst the utilisation of structural funds has arguably focused the Community Planning Partnership activity in Scotland (prior they were at various stages of development and  some were only  just  in development),  the audit and  reporting burden  of marrying  the  activity with  structural  funds  has  been  a  fraught  process  for  all concerned.   In this example utilising a lump sum and flat rate would have been very useful.   

 

In general utilising a  lump  sum and  flat  rate  system which  links awards  to outputs would make utilising EU funds much more practical for beneficiaries.    If an applicant specifies the outputs  of  a  project  and  then  delivers  those  outputs  then  the  flat  rate  specified  in  the application should be awarded. This would reduce the task of tracing payments back to bank statements and payrolls.    It should also reduce the amount Programme budgets which are spent on administration. An outputs based system should switch the focus of a project from administration  and  compliance  to  delivery,  which  we  are  wholly  supportive  of.   Where possible,  we  would  like  to  see  an  approach  developed  which  could  retain  an  open competitive challenge fund approach but be married with the lump sum and flat fee system.  A “competitive commissioning” approach perhaps.   

 

At present, a significant amount of European funding  is sometimes perceived as wasted on tracking payments  through organisations’  financial  systems  to  the bank  statement.   Often this  is  for  a  relatively  small  amount  of money,  hence  the  costs  required  to  track  these payments can be higher than the grant received.  It takes as much time to track a payment for €1 as it does for €1,000,000. We feel that an element of proportionality needs to be built into EU Programmes in this regard.   

 

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The  paper  is  also  correct  that  the  current  rules  do  discourage  some  organisations  from applying for grants due to the level of administration required.  We can provide a number of examples when this has been the case.  We would therefore like to see simpler verification rules  introduced where  each  project would  be  subject  to  an  audit  upon  completion  (as opposed  to  each  claim).    Provided  that  the  auditor  (approved  by  the Member  State  as compliant with  the EC  rules)  is  satisfied with  the  records provided,  the project  should be deemed as closed and the results accepted by the Commission.   We have experienced the situation where approved projects have been subject to audit based on rules introduced for a newer programming period.   Audit  rules  should  not be  a moving  target  and  should  be applicable at the time of implementation and not retrospectively in line with legal and audit requirements in the member state.   

 

Guidance provided to sponsors  is often not as robust and full as might be desired and this often  causes  issues during monitoring or  audit where  rules  are  applied  retrospectively or have not be fully defined in programme documentation.   

 

The  current  guidance  in  Scotland  for  companies  to  provide  financial  evidence  of  use  of grants  to  support approved projects within Structural Funds  is a classic example of where administrative burdens can hinder our ability to support SMEs.  Grant values may be small in economic development terms but are vital to SMEs to help them to survive and grow in the current  economic  climate.    Additionally,  the  EC  has  expressed  a  desire  to  remove administrative burdens from SMEs but over time the reporting requirements have become more  onerous  for  EU  funded  support  particularly  in  relation  to  grant  schemes.    SMEs supported have expressed concerns regarding the bureaucracy in place to prove compliance with EU regulations.   While all public sector organisations are aware of the need to ensure appropriate use of EU funding, SMEs are refusing much needed grant support because of the administrative  burden  and  also  the  data  security/protection  issues  surrounding  the significant number of public  agencies which will have  access  to  their potentially  sensitive data. 

 

Whilst we are fully supportive of a move towards lump sums and flat rates, the Commission may wish  to give  consideration whether  this approach  is  suitable  for all Programmes. For instance,  innovative  projects which  are  de  facto  experimental  require  an  element  of  risk which is not always easy to build into the EU system of accounting.  Moreover, if innovation is deemed to be central to achieving future EU economic growth as many believe, we have to accept  that  sometimes projects do not always achieve what  they  set out  to.   EU  funds should  continue  to  address  market  failure  and  linking  project  costs  to  outputs  in  this particular area may serve as a disincentive to any level of risk.  In this situation, it might be worthwhile building in fallback criteria, so that if an innovative project completely does not deliver on  its outputs despite high spend, a minimum allocation of the total project award could still be paid out.  For the Framework Programme, the method of flat rate is eligible for certain categories of beneficiaries (including SMEs).  Flat rate can be used for the calculation of indirect costs.  

 

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Non profit  rule:  EU  grants  cannot  generate  profit  for  beneficiaries  since  a  subsidy  should remain a mere  incentive  to  support projects  rather  than have a  commercial purpose. This often creates misunderstandings between  the Commission and  the beneficiaries as well as excessive administrative work. 

Question 4:  Should  the  rules  strictly  adhere  to  the non‐profit  principle or  should  there  be room for some flexibility in this matter?  Do you have examples of good practices from other public authorities? 

 

Where we have experienced difficulty with  this principle  is with  the desire  to do  revenue generating projects which respond to market failure.  For example, when using EU funds to develop capacity and create investment funds in sectors where the market will not naturally intervene  but  in  future  years  the  project  has  the  potential  to  generate  income  thus becoming self‐sufficient.   

 

There are some circumstances where organisations should not be penalised for generating income as the present situation reinforces dependency on European funds by reducing the level  of  grant  received  to  take  account  of  income  generation.    As  such,  there  is  little incentive for organisations to become innovative and self sustaining and no financial cushion should there be any unforeseen expenditure.  There could be flexibility granted to this rule, if  the applicant  can demonstrate  that  it  responds  to a market  failure and does not  cause distortion to competition.   The scope of  its usage could be subject to the discretion of the Managing Authority where  a  high  level  agreement  has  been  reached  between  them  and their European Commission sponsor Directorate.   

 

Ceilings  for small grants: Current rules on grants comply notably with  the principles of co‐financing,  equal  treatment  and  fair  competition.  However,  some  flexibility  is  allowed  for "low" value grants (≤ EUR 25,000) or "very low" value grants (≤ EUR 5,000). 

Question 5: What, in your view, would be the appropriate amount for low and very low value grants? 

 

Given  the  wide  range  of  activities  supported  by  European  funding  and  the  diverse Programmes  in place to deliver funding,  it  is difficult to  identify specific figures for  low and very  low  value  grants.    The  threshold  amounts  for  public  contracts  set  out  in  Directive 2004/18/EC  could  perhaps  be  used  as  a  basis  for  varying  the  degree  of  financial monitoring/reporting  required,  although  these  are  significantly  higher  than  the  present figures. 

 

Financial  stability  for  grant  applicants:  Current  rules  foresee  a  gradual  decrease  of 'operating'  grants,  i.e.  financing  administrative  expenditure,  notably  to  encourage beneficiaries  to diversify and generate own  resources. For  similar  reasons,  the duration of framework partnership agreements, established as a long‐term cooperation mechanism with beneficiaries,  is  limited.  Such  provisions  could  be  examined  in  order  to  find  the  most appropriate balance between the need for financial stability and the risk of excessive reliance on EU funds. 

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Question 6: How could the rules on operating grants be more flexible?  In which way? What are your views on the duration of framework partnership agreements? 

 

As stated in the response to question 4, the rules relating to income generation need to be revised and be made consistent across all Programmes  if recipients of operating grants are to become self sustaining.  The duration of a framework partnership agreement would vary dependent on the capacity of the delivery organisation and the timescale of its activities, but should be long enough to allow the recipient to generate sufficient own resources. The issue is  that  this  period  could  exceed  financial  programming  periods  and  becomes  difficult  to account for within the current rules.   

 

'Cascading'  grants  involving  third  parties:  The  possibility  for  a  beneficiary  to  redistribute part of its grant through subsidies to third parties is currently strictly limited, with a view to notably ensuring adequate monitoring and control of tax payers' money by the Commission. 

 

Question 7: Can you give concrete examples and types of actions where the strict limitation on cascading grants became an obstacle for achieving the goal of your action? 

 

We have not experienced any problems with this limitation.  The closest example where we see  this as an  issue at all  is  through participation  in  transnational cooperation Programme projects which used to structure projects by core partners and sub‐partners.  In the current programming period strict rules on sub‐contracting are in place and all involved in a project must be stated on the application form from the onset.  It means some projects have a huge number of partners but this is not really an inconvenience.  It just means partners have to be clear  from  the  onset  about  what  activity  each  partner  will  undertake  and  consultancy support  cannot be procured during project delivery  as was practiced by  some previously.  This  is one of  the  factors which have  increased project development  time of  transnational projects, as discussed in question 1.   

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2. The Commission’s handling of Financial Files 

 Pre‐financing payments to beneficiaries: These payments are considered as the property of the Communities until the action has been fully implemented. As a consequence, the interests generated  by  these  payments  have  to  be  reimbursed  to  the  EU  Budget.  This  creates administrative  and  financial  formalities  (dedicated  bank  account,  cash  consumption analysis...) and checks. 

Question  8:  From  your  experience, what  alternative  solutions  could  be  proposed  for  pre‐financing payments while safeguarding tax payers’ money? 

 

Pre‐financing  payments  are  crucial  to  a  number  of  Programmes  and  help  certain  sectors where  the  retrospective  payments  can  potentially  cause  cash‐flow  issues  for  small organisations  (for  example  community  level  Programmes  such  as  LEADER  or  some transnational Programme projects with large partnerships which often experience large time lags between actual expenditure and  claim payment because of  the  length of  time  it  can take to compile the claim transnationally.  One partner or their first level controller can hold up an entire project’s payment).   The upfront payment  is designed to offset this  issue and we would not advocate a  loss of this option.   Perhaps a solution would be for smaller pre‐financing  payments  to  be  exempt  from  this  process  (e.g.  less  than  €1,000,000)  and  the interest lost either picked up through the EU budget’s reserves or the Programme concerned underspends.   

 

Pre‐financing guarantees:  These guarantees are  required  to  reduce  the  risk  of  EU money being  lost  in case the beneficiary goes bankrupt or otherwise fails to  implement the project or repay the money. Yet, the corresponding amount is usually blocked by the bank guarantor, removing the advantage of the pre‐financing. 

Question 9: What mechanism, other than pre‐financing guarantee, could be explored while ensuring adequate protection of community funds? 

 

We feel that the pre‐financing guarantee  is the most effective mechanism for financing EU projects which involve the private sector and the need for loans.  The only real alternative is for  the company concerned  to provide alternative direct securities as part of  the contract, such as  land or other assets. Often  companies are  set up  specifically as a mechanism  for delivering certain contracts, especially where there is a public private partnership, and so do not technically own other assets unless they are underwritten by the public sector.  Given EU intervention  is needed where  there  is a market  failure,  it  is unlikely any company or  their bank would take this risk.  If this system changed to a focus on securities, it would make the process more risk adverse and most  likely discourage private sector participation, which  is not desirable.  Short of setting up a European Community bank which places a condition on all projects to use it in order to secure EU funding, there is not a great alternative to the pre‐financing  guarantee.    It might  be  a  useful  exercise  to  do  a  bit  of  research  to  establish whether the current system of guarantees (and money actually lost through this process) is cheaper  than  taking out  insurance  for  this potential  loss.   Alternatively, perhaps  insurance should be built into projects deemed to be high risk.   

  

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Tendering  thresholds  for  low  value  contracts: Under  certain  thresholds,  the  procedure  is simplified: contracts may be awarded on the basis of a single tenderer and payments can be paid made against invoices. 

Question 10: Based on your experience, do you think current thresholds are still adequate or should they be increased, and why? 

 

Having  such  a  process  is  entirely  sensible  and  the  staggered  criterion  seems  fair.    The €60,000  threshold  could  perhaps  be  increased  to  around  €90,000  and  the  €25,000  to €35,000.   

 

Audit and control should focus essentially on major projects. Greater discretion at the lower end of the scale – e.g the threshold below which no tender is required be raised to at least €1,000 from the current €500 and for seeking only one tender to at least €10,000 from the present level of €5,000 ‐ would save an excessive amount of effort having to be expended at the audit and control stage on verifying procurement compliance on small scale activities.  

 

Paperwork  for applicants: As  a  rule, when  participating  in a  tender or  call  for proposals, applicants are invited to provide detailed information on their organisation and to present a comprehensive proposal on their project and/or offer. To fulfil these conditions more easily, the current rules foresee the possible use of e‐tools but,  in practice, this possibility  is under‐utilised  for  various  technical  reasons  linked,  among  other  things,  to  the  authentication  of documents.  In  another  effort  to  reduce  paperwork,  the  Commission  has  also  created  the possibility  to  split  the grant  selection process  into 2  steps with a  view  to only  inviting  the applicants most  likely to be successful to submit a full application. However, while this new procedure reduces work for applicants, it increases the duration of the selection process quite significantly. Considering the above, one  idea to continue reducing paperwork could be  the introduction of a  "label"  system  so  that organisations  that have  successfully  carried out a project and/or contract send only documents relevant to the new application. 

Question 11: How could the application procedure for both grants and contracts be further improved? 

 

Two‐stage  application processes  are  indeed helpful  for  applicants,  as  they  can  receive  an early steer on the likelihood of success of an application without spending too much time on a  full application.   The Lowlands and Upland Scotland ERDF and ESF Programmes operate such a procedure and may be a useful case‐study.  This does create administration for those processing  the  applications, but  can  in  turn  reduce  the number of  full  applications which they would otherwise have had to process and gives an  indication to sponsors on whether significant resources should be put into a full bid.  It is important to ensure that forms used only  ask  for  information  which  is  really  needed  to  make  an  informed  and  transparent decision  on  the  awarding  of  grants which  can  be  clearly  communicated.   More  detailed documentation should only be required from grant recipient where appropriate e.g. as the production  of which would  be  a  condition  of  grant.    A  two  stage  application  process  is sometimes applied  to Framework Programme  calls and  this  is very helpful particularly  for SMEs submitting an FP application for the first time.   FP Calls for proposals are very detailed and projects must also be very  specific  in addressing exactly  the  requirements of  the  call 

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topic.    In  this  context,  preparing  a  full  application  can  be  very  time  consuming  and excessively  onerous  for  SMEs  with  limited  human  resources.    A  two  stage  application process could help reduce the burden on the organisation, and allow more time for finalising both  the  application  and  the  consortium.    A  two‐stage  application  process  would  also mitigate  time  constraints  related  to  the  time  lag  between  the  publication  of  the  call  for proposals and the deadline for submission.  

 

On a note related to documentation, though views have not been expressly sought on this, we would  like  to  raise  the  issue  of  documentation which  recipients  of  EU  funds  need  to maintain.  More consistency is required across Programmes for record keeping requirements and  clearer  guidance  which  is  applicable  until  the  end  of  the  auditable  period  for  that Programme.    The  issue of  authenticity  raised  in  this question,  is  the  same  issue  that has prevented  scanned  copies  of  invoices  being  used  as  evidence  in  EU  projects.    There  are certain scanners in the market that are able to build in a high level of security against fraud.  We would like to see the use of these scanners accepted in EU projects.  As well as keeping records of invoices relevant to EU projects, we have to track payments through our financial systems to the bank statement.  Records of pages of bank statements and staff salaries are also  kept  though  potentially  only  a  few  transactions will  be  relevant  to  a  project.    The amount  of  storage  needed  for  evidence  of  EU  projects  has  now  grown  out  of  hand  – particularly with  the need  to  retain grant  recipients  sensitive  information as well  for  long periods (refer to response to Q3).    If this approach to accounting  is to continue, electronic evidence  needs  to  be  accepted  as  the  Paper Mountains  created  by  this  requirement  for record keeping are unsustainable and costly.   

 

In general we support a move to a more  IT‐based management and audit processes. Many suppliers have already moved  to electronic systems and  the evidence we store  is simply a printed version of an electronic  invoice, which seems nonsensical.   The  length of time that documents have  to be  stored both by  the beneficiary SME and by  the EU grant  recipient should also be  significantly  reduced as  the  requirements  for  the EU are often  significantly longer than those required within member states legal and audit requirements.    

  

C078 - 18.12.2009 RO

With respect to the implementation and distribution of European money by Romania, the following: - I have a micro enterprise (less than 10 persons) in Romania, and I work in the Netherlands Misappropriation of European funds by Romanian banks - there were several funds "given" to the european banks in order to provide the SME sector; these banks passed the funds to administer to local Romanian banks, like Transilvania Bank. On paper these money were for start-ups, and enterprises with one year or less from start - in fact, the Romanian banks did not provide the corresponding loans, but re-directed the money to regular loans for existing enterprises (or they requested so much guarantees, that this types of loans were not different from any other loan). Suggestion Implement much better control & sanctions around the final destination of funds. Bureaucracy In order to access European funds, in Romania you would need between 20-40 papers (certified, authenticated etc.). For similar requests of funding in the Netherlands, probably you would need 3-5. Solution Cut bureaucracy - and put one of the evaluation indicators around the number of different documents to be provided. Long time to process It still takes 6-9 months to process a request, and more than 3 months to pay bills submitted. Solution Track the processing time and put pressure to make it quicker.

C079 - 18.12.2009 UK

Performance-based grants (Art. 108a FR and Art. 180a & 181 IR): The current system for the management of grants obliges beneficiaries to meet detailed eligibility conditions and requires multiple checks throughout the duration of a project. This can sometimes discourage potential beneficiaries from even applying for a grant. More simplified management of grants could be achieved through the use of various methods (such as lump-sums, scale of unit costs and flat-rates) avoiding the current complex accounting of costs. The Commission could also envisage a new management system to cover costs based on the expected outputs of a project, i.e. the concrete objectives which are achieved. Question 3: Should the use of lump sums, flat rates become the norm rather than the exception? Should the rules allow for costs to be covered on the basis of expected outputs? If yes, can you provide concrete examples?

Response from the ERC Scientific Council:

The nature of the ERC, as an entity that is mandated by its founding legislation (IDEAS Programme) to support frontier research, provides a clear case why changes and simplifications in the management of EC grants are necessary.

The central theme of the ERC philosophy is that grants-in-aid should be provided to researchers selected following rigorous peer-review based on excellence. One should also keep in mind that researchers are constantly judged by their peers in the day-to-day interactive processes of discussing their work in scientific meetings, publishing their results, etc., that define a scientist’s life in a way characteristic to the culture of science. Scientific publications in peer-reviewed journals are considered as the most relevant ‘output’ of a researcher.

The ERC Scientific Council recognizes that there has to be a proper mix of flexibility and accountability (hence limited use of paperwork and records), categories of allowable and inappropriate expenses, conformity with accounting rules of the Host Institutions, etc. Yet, in these and all related respects, the aim should be to foster maximal and proper flexibility. We should align ourselves with the policies and practices of research councils (European or not) that are considered “World Class Frontier Research Organizations”. The current situation was described accurately in the Report of the Review of the ERC Structures and Mechanisms, which was completed in mid-2009 and published here: http://erc.europa.eu/pdf/final_report_230709.pdf. Quoting from that report:

“[The current rules of financial management mean] that there has to be evidence of what the ERC funds are spent on to a degree of detail that is inappropriate to the administration of research projects.

Thus, in the case of staff costs, host institutions feel obliged to require staff timesheets, which represent a complete rupture with academic tradition, do nothing to ensure that the work is really being done and are perceived as demeaning by many researchers. [Further,] there seemed to be a fundamental misalignment between administrative policies and mission and delivery of frontier research. As underlined in the written and oral evidence gathered by the Review Panel, there is a culture of mistrust and inappropriate financial management procedures. [F]unding should be awarded on a highly flexible basis as “grants in aid” rather than as implied contracts. In frontier research, the Principal Investigator must be able to change course and adjust the scientific approach as a function of what is learnt during the project and thus a contract mechanism is actually counterproductive as it implies detailed accounting of the inputs such as time sheets and materials […]”. The ERC Scientific Council endorses the above comments of the Panel Report of the ERC Review. Further, we recommend that the counter-productive and demeaning practice of requesting PIs to fill time-sheets should be actively discouraged by the Commission. Instead, it should be possible to accept simply a signed statement by the PI certifying the percentage of time/effort spent on the project.

At the same time, the ScC feels that requesting PIs to declare expected outputs is not in line with common practice of a world-class organization funding research, and certainly not for an organization funding frontier research. Frontier research implies to take decisive steps into the territory of yet unknown knowledge. Therefore, neither deliverables nor specific outputs can be guaranteed. The outcome of frontier research everywhere in the world are scientific publications in peer-reviewed journals.

C080 - 18.12.2009 UK

1

BT Response to the public consultation on the review of the Financial Regulation

This document is the response from British Telecommunications plc (PIC 999908593) to the current Public consultation on the review of the Financial Regulation that closes on 18th December 2009.

Question 1: Are you sufficiently informed about upcoming call for proposals in a timely manner? What improvements would you suggest?

Answer: Information on up coming calls is available from many sources. Calls are published on the Cordis web site of the EU Commission. Calls are announced in advanced by proposers days, which are organized by the Commission. National Contact Points and associations also distribute the information towards the community.

In general these sources together provide a lot of detailed information on the calls for proposals. However, the 1st call of each new work programme (e.g. Call1 and Call 4) has started at the time of publication on the work programme. As a result there has not been much information published in advanced reducing the time available to plan a response to the call.

In addition, the deadline for the recent ICT Call 5 moved forward compared to the originally publicised date (e.g. in Proposers Days). With It is important that such deadlines should not be changed after being publicised in order to allow the preparation of responses to be planned with confidence.

Question 2: Should the rules be more flexible on co-financing requirements taking into account the type of actions and project managers? How could in-kind contributions best be dealt with, while adhering to the non-profit principle?

Answer: The existing rules should be maintained. Commercial partners do not make a profit with collaborative research projects.

Question 3: Should the use of lump sums, flat rates become the norm rather than the exception? Should the rules, allow of costs to be covered on the basis of expected outputs? If yes, can you provide concrete examples?

Answer: No, flat rates and lump sums would discriminate commercial as well as public partners as their cost structures, especially regarding overhead costs, are widely different in. The different costs of organisations working in different countries have to be taken into account.

However, we agree that the current processes are excessively complex and alternative ways to simplify the procedure of calculating the cost rates (direct- and indirect) should be explored. The wider use of average costs would simplify reporting & managing if this can be achieved in a verifiable way that meets audit requirements.

It should be noted that the internal accounting systems of large organisations do not follow the same rules as the accounting for companies as a whole. Therefore, it can be difficult to accurately identify all the applicable costs in order to determine the overhead rate of a unit undertaking research within such a company.

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Question 4: Should the rules strictly adhere to the non-profit principle or should there be room for some flexibility in this matter? Do you have examples of good practices from other public authorities?

Answer: The principle that there is no profit for commercial project participants is not in question. However, the systems put in place to prove strict adherence to this principle are exceedingly complex and the cost of operating them is excessively large.

Question 5: What, in your view, would be the appropriate amount for low and very low value grants?

Answer: The grant value has to be in a reasonable ratio to the necessary administrative overhead for reporting and cost claims. The major part of the grant budget should be available for research activities.

Question 6: How could the rules on operating grants be more flexible? In which way? What are your views on the duration of framework partnership agreements?

Answer: The coordination of these projects encompasses a number of tasks that include diverse issues such a steering the project’s technical direction and controlling the project’s administrative processes. These diverse tasks necessarily require a diverse range of skills that are not easily found in an individual. BT’s approach is to spread these tasks between individuals with appropriate skills and in some cases share the tasks with other partners in the consortium. The proposed reduction in the financial support for the administrative tasks (that are an overhead on the research caused by the rules of the programme) would force us to re-evaluate our ability to undertake the role of coordinator for these projects.

Question 7: Can you give concrete examples and types of actions where the strict limitation on cascading grants became an obstacle for achieving the goal of your action?

Answer: We cannot give a concrete example, but as not all resources for fulfilling the targets are kept permanently in companies, the use of Third Parties and Subcontractors should be allowed.

Question 8: From your experience, what alternative solutions could be proposed for pre-financing payments while safeguarding tax payers' money?

Answer: None without excess of costs, so we would retain the current system. Pre-financing is essential for many organisations in order to finance their activities especially if there is not sufficient capital to fund the costs before a claim is paid. This applies in particular for SMEs and public organisations.

Question 9: What mechanism, other than pre-financing guarantee, could be explored while ensuring adequate protection of community funds?

Answer: No comment

Question 10: Based on your experience, do you think current thresholds are still adequate or should they be increased, and why?

Answer: No comment

Question 11: How could the application procedure for both grants and contracts be further improved?

Answer: Since FP7 Call 4 e-Tools are used by DG Info Society and Media for proposal preparation, submission and contract negotiation. An improvement could come from extending the functionality of the URF to provide more of the generic information for an organisation that is consistent across multiple projects.

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However, this extension would need to be managed carefully so as not to cause unnecessary delay.

Attending hearings for projects is an expensive proposition and the associated costs need to be managed. If a proposal is too far down on the ranking list it is a waste of money to attend hearings which cannot result in the project being funded. The simple mechanism of inviting all projects above threshold to hearings (where these are used) is adding unnecessary costs to the application process.

The risks associated with bidding for very large project are very significant. The costs of developing such a proposal are very large and these are undertaken with often small possibility of being funded. Use of a 2 stage approval process could be envisaged for such large IP projects to reduce this risk. However, 2 stage processes should be avoided for "small" initiatives (e.g. STREP or CSA) where there would be little difference between the first and second stage submissions.

C081 - 18.12.2009 SK

Občan a demokracia, Ul. 29. augusta 38, 811 09 Bratislava Tel./Fax: 02 5292 0426, 5292 5568

www.oad.sk

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Public consultation on the review of the Financial Regulation – Answers to questions of the European Commission by

Citizen and Democracy (a civic association based in Slovakia)

Question 1: Are you sufficiently informed about upcoming calls for proposals in a timely

manner? What improvements would you suggest?

We think there is still room for improvement, mainly in terms of the information channels. Basically, at the moment we only have a random access to information about EU grants/contracts that are relevant for us. We would welcome a universal database on EU grants and contracts that would, through a user-friendly internet portal (specifically and primarily oriented on informing about EU grants and contracts) or some other straightforward and efficient channel enable potential grant beneficiaries/contractors to search through various key-words and criteria (including criteria of eligibility such as type of organisation, its activities, financial capacity etc.). Nowadays, there are some fragmented databases published on websites of individual DGs or on websites that fall under the scope of activities of individual DGs but sometimes it is even complicated to find the places where information about grants and contracts is published. As a consequence, private agencies are providing this type of service (providing information about existing grants and contracts in a well-arranged, comprehensive and efficient manner) and are charging money for something that the European Commission should perhaps do as a part of its service to the public.

Question 2: should the rules be more flexible on co-financing requirements taking into

account the type of actions and project managers? How could in-kind contributions best

be dealt with, while adhering to the non-profit principle?

We definitely think the co-financing requirement should be re-evaluated in case of some types of beneficiaries, especially watchdog and human rights organisations. Especially in the case of “new” member states, the traditional foreign donors coming mainly from countries of Western Europe and North America (both public and private) have changed their focus to other countries, the national governments have not introduced and are not supporting any or almost any mechanisms of diversified financing of NGOs in general (and are often considering NGOs as their enemies) – which has devastating impact on watchdog and human rights organisations as they are becoming dependent on public resources (which they are very rarely getting from their governments as their activities comprise criticising them). Thus a co-financing requirement under circumstances where there are no alternative sources of financing, especially if combined with no or only a partial pre-financing from the EU and at the same time by a requirement not to co-finance EU-funded projects by public resources, and where in-kind contributions are not eligible, makes EU sources often inaccessible for

Občan a demokracia, Ul. 29. augusta 38, 811 09 Bratislava Tel./Fax: 02 5292 0426, 5292 5568

www.oad.sk

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watchdog and human rights NGOs in “new” EU member states (where resources for the types of activities they are performing are desperately needed).

Also, we think the ineligibility of in-kind contributions has its gender dimensions and gender impacts. Given its mostly women who work in the NGO sector (which is the case of Slovakia) and given it is oftentimes the only space where they can exercise their right to political participation, the non-recognition of the huge amount of unpaid work women are exercising in NGO sector is non-recognising the fact that women’s work has also economic value. This is not only conflicting with EU´s goals and activities in the field of gender equality but has also many negative direct and indirect impacts on women’s rights.

In terms of re-evaluating/readjusting the system of in-kind contribution, the know-how of the beneficiaries should also be considered as a kind of contribution that has pecuniary value.

Question 4: Should the rules strictly adhere to the non-profit principle or should there be

room for some flexibility in this matter? Do you have examples of good practices from other

public authorities?

The non-profit principle is in general a reasonable, legitimate and desired rule. However, in cases of some types of organisations, for example NGOs providing watchdog, human rights and other public interest activities (such as in the sphere of social services, education), generating profit which would be further used for public interest purposes may be a good way of implementing activities that the state is not able/supposed to implement, of sustaining NGOs (which are in very difficult situation, especially in the “new” member states – see also answer to Question 2) and of reproducing public resources in an efficient manner, for publicly desired purposes and with active involvement of citizens.

Question 6: How could the rules on operating grants be more flexible? In which way? What

are your views on the duration of framework partnership agreements?

The main problem is that there are NGOs (watchdog, human rights…), mainly in the “new” EU member states, where the chance of meeting the need of diversified funding is very unrealistic in practice (for more information see answer to Question 2). Although the excessive reliance on EU funding is perceived as a problem by these NGOs, obtaining resources that would be alternative to public sources is very hard.

One of the biggest problems for operating grants, especially for watchdog and human rights NGOs in the “new” MS, is that most of the times, these grants are allocated only to the “big sharks” that can show financial and other sustainability and that act as coordinating institutions for projects and organisations in other EU member states. Given the situation in the NGO sectors in newly-accessed countries, NGOs in these countries are much less likely to fulfil the conditions of being eligible for this type of funding – although they would need this types of resources in order to achieve financial and institutional stability and be able to coordinate and administer grants with higher EU dimension. The conditions of high financial and institutional stability and coordinating experience/practice can be perceived as indirectly discriminatory towards NGOs in “new” member states and is basically getting these NGOs into a vicious circle (no financial and institutional stability, connected with low EU-level coordinating experience → no eligibility for EU funding under operating grants → no financial and institutional stability etc.).

Občan a demokracia, Ul. 29. augusta 38, 811 09 Bratislava Tel./Fax: 02 5292 0426, 5292 5568

www.oad.sk

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Unclear eligibility rules are another problem in terms of operating grants, in combination with a rule of the EC that questions about eligibility in the pre-application period are not admissible.

Question 7: Can you give concrete examples and types of actions where the strict limitation

on cascading grants became an obstacle for achieving the goal of your action?

We perceive this question again in the context of our answer to Question 6. As an organisation that is barred (for various reasons described mainly in answers to questions 2 and 6) from obtaining direct EU funding, we are only eligible for the ´cascaded´ grants (sometimes as the only accessible EU resources, as we are barred, for reasons described above and other reasons, from getting direct support). The fact that it’s almost always only the “big sharks” that have access to the money they can further redistribute means that we are operating under conditions (financial, organisational, thematic etc.) that often do not suit or even endanger our needs and capacities and that pay only a fragmented part of our work (without the overall budgets being known and communicated in open and transparent manner, and with the coordinating organisations being only involved in the technical and administration part with limited competence in the field/issue being resolved – which also makes the expenditure and the overall capacities being used less efficiently) .

In many instances, however, we have principal problems with the requirements of having partners. Especially with many watchdog and human-rights issues, there are many problems which are country-specific (while knowing the desired approaches and solutions by the national stakeholders who are just lacking the resources to push the solutions through) and the requirement to have partners is often very difficult to meet. This often leads to forming partnerships that are artificial and problematic in many ways and that in general hinder effective performance of the projects and impose excessive administrative and financial burden on the coordinating institutions (and at the and of the day also on the EC). This requirement is also in a way depriving the European Commission of the responsibility for efficient use of EU funds and is transferring the responsibility to the coordinating institutions (it has happened to us, for example, that one of the organisations that co-implemented a project that we were coordinating – and that we would have, under normal conditions, never chosen to work with – suddenly, without any prior warning, went bankrupt and ceased to exist. This caused a great financial loss on our side. We wish we had been informed about this kind of risk by the European Commission prior to formulating the contract with this partner NGO and do not think it was fair to have been exposed to this kind of situation – as we only went into the partnership because it was a formal requirement of the project scheme).

Question 8: From your experience, what alternative solutions could be proposed for

prefinancing payments while safeguarding tax payers' money?

We think if the possibility of pre-financing would cease to exist, it would generate a very serious obstacle for many NGOs in Slovakia and very likely also in the other “new” EU member states to apply for EU funding at all (for more details, see answers to the questions above – mainly questions 2, 6 and 7), and in many instances it could also endanger their existence. We think the issue requires more systemic and systematic solutions and the need to reduce the administrative burden on the side of the EC cannot trump the need to sustain and stabilise the civic society, mainly in the member states that are still in transition.

Občan a demokracia, Ul. 29. augusta 38, 811 09 Bratislava Tel./Fax: 02 5292 0426, 5292 5568

www.oad.sk

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Question 9: What mechanism, other than pre-financing guarantee, could be explored while

ensuring adequate protection of community funds?

We think that the requirement of bank guaranties is complicated in principle because it hinders many watchdog and human rights NGOs, mainly from the “new” EU member states, from being eligible for EU funds in principle (see the previous answers, mainly those to questions 2, 6 and 7). What would serve as an alternative with regard to this type of organisations would be contributing to making them more self-reliant and sustainable and putting pressure on national governments to do so as well.

Question 11: How could the application procedure for both grants and contracts be further

improved?

We understand the need for detailed administrative procedure as it is a guarantee of transparency and fairness, and at the same time a kind of proof that the potential recipient will be able to handle all the administrative and technical requirements connected with administration and coordination of projects/activities funded from EU resources. At the same time, however, when there is a requirement of co-financing from national budgets of member states, the administrative requirements imposed by member states in addition to the European ones (not only in the phases of applying for the grants/contracts but also in the phases of implementation – also with very low degree of legal and administrative certainty as the rules keep changing while the projects are being implemented) most of the times become excessively burdensome and act as an obstacle for NGOs to apply for the resources at all.

Citizen and Democracy is a human rights and watchdog organisation based in Slovakia. The mission of the organization, working throughout the whole country, is development of democracy and protection of human rights. It targets its activities at local, national, and international levels to develop and strengthen civic participation in ways that are complementary to the governmental and private sectors in order to advance the idea of an open society respecting civil and human rights and the rule of law. It engages in training activities, research and publication projects, and facilitates dialogue for improving the relations between different sectors of society. The organization aims at enhancing legal awareness (and legal literacy) by means of education and training of different target groups focused predominantly on human rights, promoting participative forms of education within the national system of education and life-long civic education, activating and mobilizing citizens, promoting and advocating their interests, monitoring the observance of human rights by the state administration and self-government bodies and providing relevant information to the public, providing legal aid in specified cases of human rights violations, and promoting and advocating for public interests.

For more information regarding the questionnaire or the Citizen and Democracy association, please contact the executive director of the organisation, at: pufflerova@oad.sk

C082 - 18.12.2009 DE

Europa Cantat is supported by the European Union, the German Ministry for Youth and the city of Bonn. Mitglied in / member of / Membre de: International Federation for Choral Music (IFMC), European/International Music Council (EMC/IMC) CultureAction Europe (European Forum for the Arts and Heritage) / Musica International

18. Dezember 2009 Contribution to the Consultation on the Review of Financial Regulation By Europa Cantat – European Federation of Young Choirs

Introduction – Who we are The vision of Europa Cantat is to be the leading pan-European non-profit organisation dedicated to education and cultural exchange among singers of all ages, especially among children and young people in the field of vocal music. Europa Cantat directly represents more than one million and reaches out to more than 20 million singers, conductors and composers in over 40 European countries including new and future members of the European Union. MISSION Europa Cantat exists to encourage and increase greater understanding and cooperation between Europeans and world citizens by bringing them together in the common activity of singing, promoting the exchange and development of cultural heritage and education. - It is our differences that unite, not divide us. 1 - GRANTS Background: According to the Financial Regulation (Title VI), grants must be awarded in an open and fair manner, in particular through public calls for proposals. Grants may neither be cumulative nor awarded retrospectively. They must involve co-financing and cannot generate profit for the beneficiary. In addition, only costs actually incurred can be covered. The Commission is determined to simplify and reshape its system for the award of grants. With this goal in mind, the following issues could be explored. • Information about grant opportunities: Calls for proposals are already widely published (Art. 110 FR and Art. 166 IR), notably on the Internet. Question 1: Are you sufficiently informed about upcoming calls for proposals in a timely manner? What improvements would you suggest?

Public consultation on the review of the Financial Regulation

Seite 2 The general appreciation is that the current system works well: Information available on the internet is seen as an easy tool.

- For some programmes such as the Culture programme there are no annual calls anymore but the basic information is published for several years in advance.

- The main area of improvement, however, remains the need for an accurate calendar of upcoming calls or of the publishing of application documents (in the cases where there are no longer calls). Applicants need time to study the calls, the guidelines and the application documents, especially in the cases of cooperation projects that involve several applicants. Accessibility to information about special calls (e.g. for the EU Year of ...) could be improved. It is often only available to organisations that are already experienced with EU funding whilst at the same time these special calls (e.g. Istanbul 2010 or "preparatory measures" in 2003 for the new Culture Programme) are often interesting for organisations that apply for the first time.

- The Agency could develop a system of electronic alert per thematic / geographic programmes or per country. Such a system should also include email alerts in case something new has been posted in the call for proposal section.

- The publication of draft annual action plans and annual work plan for thematic and geographic programmes on the Agency and DGEAC website would enable an equitable access to information for all potential applicants, in particular for those that are not based in Brussels or which do not have an easy access to Brussels-based networks and EU institutions.

- In the case where calls are published, we recommend to further extend the deadline between the release of the call for proposals and the deadline for submission of concept notes. A 3-month period is generally considered as ideal as it gives applicant organisations the time to arrange the proper consultations and workshops in the lead up to preparing a proposal.

- European Commission’s services should not be allowed to place deadlines in or just after holiday period (July-August, 15 December-15 January) unless the call is published sufficiently in advance.

• Co-financing and contributions in kind (Art. 109 FR and Art. 172 IR): EU grants must involve co-financing, sometime quite substantially. This obligation is often challenging for actors, in particular when there is no possibility to include contributions in kind like volunteer work as part of the project manager's own contribution. Question 2: should the rules be more flexible on co-financing requirements taking into account the type of actions and project managers? How could in-kind contributions best be dealt with, while adhering to the non-profit principle? We strongly support the need for more flexibility in co-financing requirement. More flexibility is essential if the European Commission want to support all types of actors, including local but also European organisations that may have less capacity in terms of fundraising. Securing co-financing becomes a burden for applicants, given each organisation may have different approaches, objectives, local grant regulations, time lines, etc.

- The rule of a minimum co-financing of 50% as it exists in some of the programmes can represent a difficulty. We would therefore welcome if more programmes offered the possibility to be granted with EU funding up to 90%.

- We request the possibility to give a monetary value to in-kind donations and/or in-kind contributions. Some are an inherent part of civil society organisations' ways of operating, such as using expertise from different organisations which is provided free of charge to the grant application but is part of the staff costs of the organisation that employs the expert. Other examples of in-kind contributions that organisations often benefit from include: donations of

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premises, equipments, goods, free technical expertise or free services offered by private companies, etc. This should be authorised according to a number of parameters.

• Performance-based grants (Art. 108a FR and Art. 180a & 181 IR): The current system for the management of grants obliges beneficiaries to meet detailed eligibility conditions and requires multiple checks throughout the duration of a project. This can sometimes discourage potential beneficiaries from even applying for a grant. More simplified management of grants could be achieved through the use of various methods (such as lump-sums, scale of unit costs and flat-rates) avoiding the current complex accounting of costs. The Commission could also envisage a new management system to cover costs based on the expected outputs of a project, i.e. the concrete objectives which are achieved. Question 3: Should the use of lump sums, flat rates become the norm rather than the exception? Should the rules allow for costs to be covered on the basis of expected outputs? If yes, can you provide concrete examples? In general – we find the detailed prior requirements not adapted to the operational reality of organisations, or the reality of cultural co-operation projects. In particular we wish to draw attention to the following:

- The flat-rate system can be beneficial in some cases, but is too restrictive as an obligatory model and in some cases (e.g. the culture programme) it only works for organizations with a significant number of paid staff while smaller organizations that may have a significant work programme cannot benefit from the system. Detailed budgets are there appropriate in many cases.

- Output based budgeting is currently too narrowly defined, requiring detailed projections on expected audiences for events, specifics on planned travel.The requirement to forecast destination, number of trips and mode of transport cannot be supplied reasonably.

- In the case of events and performances, linking budget allocation to predicted attendance and actual attendance should not be applied.

- In general in culture it is often desirable to also or especially subsidize less “popular” events, works of arts, artists etc. and therefore especially in the field of culture evaluation should be mainly based on the qualitative outcomes rather than on quantitative outcomes.

- Application procedures should reflect the lack of minute detail available at the time of making the application. The application procedure could be highly simplified if travel expenses etc. could be calculated on the basis of an average number of trips / persons and average costs rather than asking for exact travel-lists in advance.

- Budget simplification should be based on standardised general headings, which allow for applicants to define expenditure in sub-headings with appropriate level of details and justifications from the applicant.

Costs coverage based on the expected outputs is not a realistic option either. It exposes the grant beneficiaries to major disallowances if the objectives are not achieved, which is sometimes subjective and open to interpretation, and often hard to measure in arts projects. Performance based agreements are not realistic in particular if one considers:

- The success of an action is not the arithmetical sum of the degree of achievement of individual outputs/results;

- Costs at the proposal stage are estimations and modifications can occur;

Seite 4 • Non profit rule (Art. 109 FR and Art. 165 IR): EU grants cannot generate profit for beneficiaries since a subsidy should remain a mere incentive to support projects rather than have a commercial purpose. This often creates misunderstandings between the Commission and the beneficiaries as well as excessive administrative work. Question 4: Should the rules strictly adhere to the non-profit principle or should there be room for some flexibility in this matter? Do you have examples of good practices from other public authorities? It is widely accepted that grant beneficiaries should not make a profit from EU funding. However, some flexibility should be introduced to allow any surplus generated by the grant activities to be used to the benefit of the grant itself.

- In the case of multi-annual framework programme, organizations could be permitted to transfer any surplus from one year to another. This is common practice in many national public authorities – cf. the Scottish Executive. This could be with limited flexibility of 10% per year.

- In several countries non-profit organisations may build reserves which is not equal to making profit. These reserves are usually limited either by a certain percentage of the annual budget, or by the amount needed to cover fix costs (personnel, meetings, rental costs) for a period of three months in order to ensure that an organization can cover these costs before knowing the exact income for the running year. In Germany, for example, these rules exist in the frame of tax regulations for non-profit organizations. It is also allowed in many cases to transfer money to the following year if it was given for and is needed for activities in the following year.

- The Boards of many non-for-profit organizations are worried about the interpretation of the non-for-profit rule because it means that they cannot take the responsibility which they legally normally have as Board members, to ensure that staff members, social security and rental costs can be paid regularly. Also non-for-profit organizations often face huge problems in receiving credit from the bank in order to overcome cashflow problems which are partly due to the fact that funding bodies only pay a certain percentage of the subsidy in advance and wait with the final payment until the final report has been received.

- Organisations should have the capacity to build up cashflow reserves, especially as many operational grants arrive late during the course of the year and a certain percentage only arrives the following year.

- Capacity to declare surplus in line with the financial rules of the country where the applicant is based should be allowed if the surplus generated can be demonstrated as coming from outside the eligible budget or from other incomes.

- Interest paid on loans taken out to cover cashflow shortfalls should be included in eligible costs. Net interest accrued/paid should be eligible.

- Interest earned on pre-financing grants should considered as eligible income and would have to be balanced by eligible expenditures in the respective project or operating year.

- Organisations should be permitted to accrue surplus in the case that income from non EU sources and activities can be generated.

- Please also refer to the letter addressed to the Executive Agency for Culture and Education, outlining cultural organizations position on the non profit rule, which you find attached on the last page of this document.

Seite 5 • Ceilings for small grants: Current rules on grants comply notably with the principles of co-financing (Art. 172 IR), equal treatment and fair competition (Art. 173 IR). However, some flexibility is allowed for "low" value grants (≤ EUR 25,000 Art. 172.3 IR and Art. 173.2 IR) or "very low" value grants (≤ EUR 5,000 Art. 114.3 FR and Art. 175b IR). Question 5: What, in your view, would be the appropriate amount for low and very low value grants?

- It is important to maintain a very low threshold for “very low” grants especially when considering potential applicants from third countries. We recommend that flexibility on “low” grants be maintained with a threshold of 40.000 €.

• Financial stability for grant applicants: Current rules foresee a gradual decrease of 'operating' grants, i.e. financing administrative expenditure (Art. 113.2 FR), notably to encourage beneficiaries to diversify and generate own resources. For similar reasons, the duration of framework partnership agreements, established as a long-term cooperation mechanism with beneficiaries (Art. 163 IR), is limited. Such provisions could be examined in order to find the most appropriate balance between the need for financial stability and the risk of excessive reliance on EU funds. Question 6: How could the rules on operating grants be more flexible? In which way? What are your views on the duration of framework partnership agreements?

- The non-profit rule is prohibitive to flexible organisational development and diversification of funding sources.

- The so-called ‘degressivity’ rule does not take into account long-term sustainability of organisations or the long-term relationships many NGOs have with the European Union institutions.

- In reality degressivity and the termination of a multiannual framework-agreement can often not balanced by a diversification of financing or an increase in the organisation’s own resources and result in organizations having to reduce activity or lay off personnel.

- It should be considered that a stable funding already represents a “natural degressivity” since almost all costs are rising regularly.

- Grant recipients of multi-annual funding should have the possibility to apply for a renewal of the framework agreement where applicable in the year preceding the final year of the grant. For example, an organization funded in 2008, 2009 and 2010 should be able to apply for repeat funding at the end of 2009 for the period 2011-2013. This is particularly important as decisions on grants are rarely published until the operational year of the grant has begun. This creates a high level of operational instability for organizations.

- Concerning operational funding, a continuous funding could reduce paperwork for both, funding authority and funded organisation. If an organisation received a multi-annual framework agreement, an eligibility check should be executed one year before the agreement runs out. If the result of this check is positive, the organisation will automatically receive a new framework agreement. Only if eligibility check is negative, the organisation has to run through all formalities of the application procedure.

Seite 6 • 'Cascading' grants involving third parties: The possibility for a beneficiary to redistribute part of its grant through subsidies to third parties is currently strictly limited (Art. 120 FR and Art. 184a IR), with a view to notably ensuring adequate monitoring and control of tax payers' money by the Commission. Question 7: Can you give concrete examples and types of actions where the strict limitation on cascading grants became an obstacle for achieving the goal of your action?

- We especially experienced difficulties with this when the Culture programme still had the rule of a minimum contribution of 5% of the budget by all partners in a project. This meant that smaller organizations with reduced budgets were not able to participate in such cooperation measures.

- Lately we have not been experiencing such difficulties though we have been talking about the possibility of being able to redistribute funds to partners within our network for many years and would find such a possibility desirable.

- Europa Cantat uses this system in Germany with travel grants from the German Youth Ministry for German youth choirs travelling to intercultural events abroad. The Ministry considers a number of organizations as “distributing organizations”. They indicate a set of rules that have to be followed for the paying out very small subsidies to third parties and Europa Cantat has to ensure that these rules are followed. Europa Cantat thus receives a lump sum and can redistribute it.

- We believe that such a system could also work well on the European level, e.g. by using the European networks which receive operational funding (and are thus checked / well-known by the commission). Such a system could also be part of bigger project funding where the main applicant gets the possibility to redistribute smaller amounts of the fund e.g. in the form of scholarships or travel grants to increase the mobility of individual artists, young people, artists from less privileged regions etc.

- This would allow many more operators and activities to receive European funding without increasing the administration work on the Commission’s side.

Seite 7 2 - THE COMMISSION'S HANDLING OF FINANCIAL FILES Background: The financial handling of contracts and grants by the Commission is designed to minimise the risks of error, irregularities and fraud, and to ensure a strict and adequate monitoring and control of tax payers' money. In practice, rules can create additional red tape and checks. The Commission is examining whether these rules can be adapted and how, so as to ensure effective project management as well as a high level of protection of the tax payers' interest. • Pre-financing payments to beneficiaries (Art. 5a FR): These payments are considered as the property of the Communities until the action has been fully implemented. As a consequence, the interests generated by these payments have to be reimbursed to the EU Budget. This creates administrative and financial formalities (dedicated bank account, cash consumption analysis...) and checks. Question 8: From your experience, what alternative solutions could be proposed for prefinancing payments while safeguarding tax payers' money?

- Assessments of financial capacity are designed to approve candidates’ eligibility for grants. If a candidate passes financial capacity criteria then no additional guarantees should be required.

- 100% of the grant agreed should be paid before the end of the eligibility period in order to avoid severe damage to the financial stability of a grant receiving organisation, which by definition and by EU request is a not-for-profit organisation. This is common practice for national fundings in several EU countries (e.g. Germany). If not all costs have been paid according to the eligibility criteria, the beneficiary would have to pay back the equivalent sum of the grant received. Especially when according multi-annual framework agreements, this should apply for the first years of the agreement. Should not all expenditures of the first years be eligible, the grant of the last year of the framework agreement could by reduced by the equivalent amount.

- We had problems in the past with the fact that the Commission writes in the contracts that the payments are considered as property of the Communities until the action has been fully implemented. This can lead to banks refusing to give organizations which are waiting for the last payment of their subsidy a credit.

- We also had a problem one year when the Commission demanded a bank guarantee from us – however, a bank will never give a guarantee on the basis of the contract because the contract says that the payment is considered as property of the Communities, and if an NGO does not own any property / buildings etc. it is impossible to receive a bank guarantee

- A payment of interest should either not be considered at all, or be applicable in both directions (i.e. if interest earned on advance payments has to be declared, interest to be paid on loans needed to overcome cashflow problems because of late payments of the final part of the subsidy should also be eligible).

- Most subsidies, even though called “advance payment” are not really paid in advance (during the last years the first 80 % of our operational grant for the running year was usually paid in June or July so that we already had to pre-finance a big part of our work in the first half of the year with the help of loans. The missing 20% of the previous year are also paid out towards the middle of the year, which increases the problem and means that usually, by the time we receive the grant, we mostly have to pay debts. The remaining amount is on a Giro-Account where we earn no interest on it.

Seite 8

• Pre-financing guarantees (Art. 152 IR): These guarantees are required to reduce the risk of EU money being lost in case the beneficiary goes bankrupt or otherwise fails to implement the project or repay the money. Yet, the corresponding amount is usually blocked by the bank guarantor, removing the advantage of the pre-financing. Question 9: What mechanism, other than pre-financing guarantee, could be explored while ensuring adequate protection of community funds? While it is understandable that there is a wish to guarantee against all risks, this does not seem to be realistic, at least in the field of culture. As described above, Europa Cantat has made the experience that bank-guarantees at least in Germany are not available for NGOs like ours. The only possibility for a bank guarantee would be for a Board member or staff member to offer the bank private money or a private house as guarantee – we believe that this cannot be expected from Board or staff members. Should bank guarantees become compulsive for pre-financing organisations like Europa Cantat could not benefit from pre-financing anymore and would probably not be able to continue working since loans from the bank would also become impossible. We propose the following solutions on the current problem caused by bank guarantee requirements:

- Remove the requirement of bank guarantee in all cases and introduce bi-annual or quarterly payments in advance

- If the requirement of bank guarantee is to be maintained, then increase the thresholds significantly to at least 200,000 euros.

- As DG ECHO’s approach, classify (potential) beneficiaries as low, medium or high risks and request bank guarantees only for beneficiaries with certain risk profiles.

- Capacity for third parties to stand as guarantors should be made more accessible. • Tendering thresholds for low value contracts (Art. 129 IR): Under certain thresholds, the procedure is simplified: contracts may be awarded on the basis of a single tenderer and payments can be paid made against invoices. Question 10: Based on your experience, do you think current thresholds are still adequate or should they be increased, and why?

- Europa Cantat has no experience in this area • Paperwork for applicants (notably Art. 143 IR, Art. 172c IR and Art. 138a IR): As a rule, when participating in a tender or call for proposals, applicants are invited to provide detailed information on their organisation and to present a comprehensive proposal on their project and/or offer. To fulfill these conditions more easily, the current rules foresee the possible use of e-tools but, in practice, this possibility is under-utilised for various technical reasons linked, among other things, to the authentication of documents. In another effort to reduce paperwork, the Commission has also created the possibility to split the grant selection process into 2 steps (Art. 178 IR) with a view to only inviting the applicants most likely to be successful to submit a full application. However, while this new procedure reduces work for applicants, it increases the duration of the selection process quite significantly. Considering the above, one idea to continue reducing paperwork could be the introduction of a "label" system so that organisations that have successfully carried out a project and/or contract send only documents relevant to the new application.

Seite 9

Europa Cantat is supported by the European Union, the German Ministry for Youth and the city of Bonn. Mitglied in / member of / Membre de: International Federation for Choral Music (IFMC), European/International Music Council (EMC/IMC) CultureAction Europe (European Forum for the Arts and Heritage) / Musica International

Question 11: How could the application procedure for both grants and contracts be further improved? The application procedure has generally speaking improved over the last few years. The two-step procedure, such as used in EuropeAid (PADOR) first the concept note and then the complete call, could be introduced, though it should be combined with a calendar that still makes it possible for applicants to receive their final answer early enough.

- We support the establishment of a register of previously approved organizations. Criteria should be established on basic organizational information and financial information that can be held on a central non-public register.

- We have experience from Germany where those who receive regular funding can indicate if anything (statutes, elected Board, bank account etc.) has changed since the last application. If nothing has changed, they do not need to submit those documents anymore, if something has changed they submit the changed documents only.

- Whilst the development of online applications somewhat facilitates the process, this has not improved the quality of the questions applicants are required to answer. In addition at the last round of applications for the culture programme some operators had technical difficulties with the submission process.

- We propose that the budget headings only refer to types of costs, not to activities. The design of the budget form as it is, is confusing. On the one hand, the budget headings refer to types of costs, (travel, personnel etc.), on the other they refer to activities (conferences, seminars). Therefore it is in some cases not clear which costs to put where (e.g. travel costs of experts at conferences.) If there is the definite need to know what a specific activity would cost, this could be requested as additional information.

- The application forms, guidelines and budget forms are sometimes not consistent. We suggest that duplicated questions be avoided as far as possible and that contradictions are eliminated.

Other issues we would like to put forward Late payment of grants remains the main issue for many respondents.

- EC should pay automatically interests for late payment rather than the beneficiary having to

request it. - In case that an organisation is funded through different public authorities (e.g. national and

EU), one final report should be sufficient. The authority providing the higher grant should check the eligibility of expenditures and the qualitative output of the organisation. The result of this check should be forwarded to all other public funding bodies. Like this, a significant amount of public employees' time and tax payers' money could be saved.

The answers here above have partly been developed in cooperation with the European Music Council and Culture Action Europe.

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Europa Cantat is supported by the European Union, the German Ministry for Youth and the city of Bonn. Mitglied in / member of / Membre de: International Federation for Choral Music (IFMC), European/International Music Council (EMC/IMC) CultureAction Europe (European Forum for the Arts and Heritage) / Musica International

ATTACHMENT: Arguments for the right to build up cash reserve for not-for-profit organisations that receive EU operational grants put forward by Culture Action Europe, European Festival Association, European Union Baroque Orchestra, IETM, Trans Europe Halles, Europa Cantat, Union des Théâtres de l'Europe, Platform for Intercultural Europe, European Music Council Background of NGOs: • We – cultural NGOs in Europe – are per definition and by our statutes not-for-profit organisations; • We are eligible to receive EU operational grants BECAUSE we are not-for-profit organisations; • We receive grants for operational work but may engage in projects and other funded activities; • EU operational grants that our organisations receive represent between 37% and 69% of our eligible income and between 13% and 54% of our overall annual budgets (overall budgets include all project grants and funding for activities); years of reference: 2008 & 2009; • We see ourselves as working within specific sectors, or representing specific interests, but with an agenda to create public value at European Level; • The EU operational grant covers only part of our annual operational expenditures. We ask for a cash reserve built from OTHER income than the EU grant, including income directly generated by us (e.g. membership fees, income from activities). We are aware of the EU funding system that does not allow to build up cash reserves from the EU grant. Why cash reserves are essential for good management: • The majority of grants are awarded on an annual basis, which lead to year on year insecurity of funding. Building up reserves, allow for greater organisational sustainability; • In case of organisational closure for whatever reason, there is a legal obligation in most EU member states to cover social security costs and salary indemnities for personnel for a minimum 3-month period. A reserve is necessary to secure this social obligation towards staff members; • Operational costs are eligible from 1 January to December 31st in the majority of cases. However, the 80% “pre-financing” amount generally arrives at the organisation between May and July of the operational year in progress. This requires a cash-flow reserve to meet costs incurred prior to the grant amount arriving; • The balance of the EU grant of the budget year concerned is generally received mid-year following the grant year. This contributes further to the cash-flow burden on organisations at the beginning of after year; • The European Union requires increasing stringent demonstration of financially stable operating conditions as a condition for a possible funding. Part of a financially stable structure is having sufficient cash-flow reserves as ‘equity’ in an organisation. The obligation to present a zero budget year on year, prevents the build up of equity. Request to build up reserves put forward by European cultural organisations, funded by the EU June 2009 Presented to the executive Agency for Education, Culture and Youth, June 16 2009 The Situation in different EU countries: • In some European countries, NGOs (often legally registered as associations) are legally obliged to have a cash reserve to be able to pay off salaries, rent and other contracted costs for at least three months in case of closure (see above). Not having a reserve is considered as bad management;

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Europa Cantat is supported by the European Union, the German Ministry for Youth and the city of Bonn. Mitglied in / member of / Membre de: International Federation for Choral Music (IFMC), European/International Music Council (EMC/IMC) CultureAction Europe (European Forum for the Arts and Heritage) / Musica International

• In other countries (e.g. Germany), NGOs that have a recognised public service status are allowed to build up cash reserves equivalent to the sum of three months of running costs (including salaries, rent, gas, electricity, water etc). This reserve is NOT considered as a profit and does not endanger the status of public service. No taxes have to be paid on this reserve; • In some countries, NGO's are allowed to have expenditure lines for "provisions". In this case a surplus does not read as such in the annual balance. It is expenditure in the budget year in question and an income in the following year. In other countries, this proceeding is not allowed, but NGO's are requested to show their surplus as such in the balance sheet. What we request • To be permitted to build up a reserve amount equivalent to at least 3 months running costs, providing it can be clearly shown to be financed through own earned income and other grants excluding the EU grant, and to declare it as a surplus in the operational balance sheet without being punished by cutbacks from the EU grants.

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ECF Contribution to Consultation on EU Financial Regulations

European Composers Forum (ECF), 18 December 2009 1

European Composers Forum (ECF) Contribution to Consultation on Financial Regulations The European Composers’ Forum (ECF), a non-profit association founded in Vienna in 2006, is the official network organization today linking together 28 national composer societies that represent Art and Classical Music composers in their countries from all across Europe. Acting as an information turntable and activities platform, ECF – on behalf of its members – is also speaking as the political mouthpiece for ten-thousands of Art and Classical Music composers in Europe. Today’s living composers belong to the creative and innovative potential in our society. And contemporary music is the key to our society’s cultural identity. Without a future for contemporary music there will neither be a future for the music heritage of the past. Integrating living composers into all levels of today’s music life, and into the framework of music consumption and education is one of the items on the agenda of ECF. Therefore our main aims and activities are: 1. International cooperation amongst national composers, and their associations; 2. Initiating projects to improve the distribution, promotion and performance opportunities for contemporary classical music; develop innovative structures for contemporary music to target new and larger audiences (“Audience Development”); develop artistic projects with a European scope; establish structures for young composers to set foot into the professional scene. 3. Work together in close cooperation with European and worldwide-acting (music) organizations such as European/International Music Council, European Music Office, GESAC, CIAM, CISAC, and others. ECF is a member of the “European Composer & Songwriter Alliance” and of the European Music Council. 1 - GRANTS Background: According to the Financial Regulation (Title VI), grants must be awarded in an open and fair manner, in particular through public calls for proposals. Grants may neither be cumulative nor awarded retrospectively. They must involve co-financing and cannot generate profit for the beneficiary. In addition, only costs actually incurred can be covered. The Commission is determined to simplify and reshape its system for the award of grants.

ECF Contribution to Consultation on EU Financial Regulations

European Composers Forum (ECF), 18 December 2009 2

With this goal in mind, the following issues could be explored. • Information about grant opportunities: Calls for proposals are already widely published (Art. 110 FR and Art. 166 IR), notably on the Internet. Question 1: Are you sufficiently informed about upcoming calls for proposals in a timely manner? What improvements would you suggest? The general appreciation is that the current system for publishing calls for proposals works well: Information available on the Internet is seen as an easy tool.

- The main area of improvement remains the need for an accurate calendar of upcoming calls. The agency should develop a systematic, easy-to-find and reliable issuing of forecasts, saying in advance (6-12 months, ‘rolling’ if possible) what would be coming up, for every single Instrument and Programme (both geographic and thematic), where information on opportunities for financing for cultural actors is available (including programmes outside of the culture programme). Accessibility to information about special calls could be improved. It is often only available to organisations that are already experienced with EU funding whilst special calls (e.g. Istanbul 2010 or "preparatory measures" in 2003 for the new Culture Programme) are often interesting for organisations that apply for the first time.

- Even though the European Composers Forum Council welcomes significant

improvements in this matter during this last period with the online publication of annual action plans and annual work programmes, the following issues could still be improved:

- The Agency could develop a system of electronic alert per thematic / geographic

programmes or per country. Such a system should also include email alerts in case something new has been posted in the call for proposal section.

- The publication of draft annual action plans and annual work plan for thematic

and geographic programmes on the Agency and DGEAC website would enable an equitable access to information for all potential applicants, in particular for those that are not based in Brussels or which do not have an easy access to Brussels-based networks and EU institutions.

- We recommend to further extending the deadline between the release of the call

for proposals and the deadline for submission of concept notes. A 3-month period is generally considered as ideal as it gives applicant organisations the time to arrange the proper consultations and workshops in the lead up to preparing a proposal.

ECF Contribution to Consultation on EU Financial Regulations

European Composers Forum (ECF), 18 December 2009 3

- European Commission’s services should not be allowed to place deadlines in or just after holiday period (July-August, 15 December-15 January) unless the call is published sufficiently in advance.

• Co-financing and contributions in kind (Art. 109 FR and Art. 172 IR): EU grants must involve co-financing, sometime quite substantially. This obligation is often challenging for actors, in particular when there is no possibility to include contributions in kind like volunteer work as part of the project manager's own contribution. Question 2: should the rules be more flexible on co-financing requirements taking into account the type of actions and project managers? How could in-kind contributions best be dealt with, while adhering to the non-profit principle? We strongly support the need for more flexibility in co-financing requirement. More flexibility is essential if the European Commission want to support all types of actors, including local but also European organisations that may have less capacity in terms of fundraising. Securing co-financing becomes a burden for applicants, given each organisation may have different approaches, objectives, local grant regulations, time lines, etc.

- We see a strong need to enlarge the situations where projects can be granted with EU funding up to 90%. The EC should define a rule for smaller organisations (both local and European), defined in terms of budget size, whereby 90% funding could be foreseen. 100% funding through EU grants should be provided for low grants (cf. question. 4)

- We request the possibility to give a monetary value to in-kind donations and/or

in-kind contributions. Some are an inherent part of civil society organisations' ways of operating, such as using expertise from different organisations which is provided free of charge to the grant application but is part of the staff costs of the organisation that employs the expert. Other examples of in-kind contributions that organisations often benefit from include: donations of premises, equipments, goods, free technical expertise or free services offered by private companies, etc. This should be authorised according to a number of parameters.

• Performance-based grants (Art. 108a FR and Art. 180a & 181 IR): The current system for the management of grants obliges beneficiaries to meet detailed eligibility conditions and requires multiple checks throughout the duration of a project. This can sometimes discourage potential beneficiaries from even applying for a grant. More simplified management of grants could be achieved through the use of various methods (such as lump-sums, scale of unit costs and flat-rates) avoiding the current complex accounting of costs. The Commission could also envisage a new management system to cover costs based on the expected outputs of a project, i.e. the concrete objectives that are achieved. Question 3: Should the use of lump sums, flat rates become the norm rather than the

ECF Contribution to Consultation on EU Financial Regulations

European Composers Forum (ECF), 18 December 2009 4

exception? Should the rules allow for costs to be covered on the basis of expected outputs? If yes, can you provide concrete examples? In general – we find the detailed prior requirements not adapted to the operational reality of organisations, or the reality of cultural co-operation projects. In particular we wish to draw attention to the following:

- The flat-rate system can be beneficial in some cases, but is too restrictive as an obligatory model. Detailed budgets are appropriate in many cases.

- Output based budgeting is currently too narrowly defined. Requiring detailed

projections on expected audiences for events, specifics on planned travel. The requirement to forecast destination, number of trips and mode of transport cannot be supplied reasonably.

- In the case of events and performances, linking budget allocation to predicted

attendance and actual attendance should not be applied.

- Evaluation should be mainly based on the qualitative outcomes rather than on quantitative outcomes.

- Application procedures should reflect the lack of minute detail available at the

time of making the application.

- Budget simplification should be based on standardized general headings, which allow for applicants to define expenditure in sub-headings with appropriate level of details and justifications from the applicant.

Costs coverage based on the expected outputs is not a realistic option either. It exposes the grant beneficiaries to major disallowances if the objectives are not achieved, which is sometimes subjective and open to interpretation, and often hard to measure in arts projects. Performance based agreements are not realistic in particular if one considers:

- The success of an action is not the arithmetical sum of the degree of achievement of individual outputs/results;

- Costs at the proposal stage are estimations and modifications can occur; • Non profit rule (Art. 109 FR and Art. 165 IR): EU grants cannot generate profit for beneficiaries since a subsidy should remain a mere incentive to support projects rather than have a commercial purpose. This often creates misunderstandings between the Commission and the beneficiaries as well as excessive administrative work. Question 4: Should the rules strictly adhere to the non-profit principle or should there be room for some flexibility in this matter? Do you have examples of good practices from other public authorities?

ECF Contribution to Consultation on EU Financial Regulations

European Composers Forum (ECF), 18 December 2009 5

It is widely accepted that grant beneficiaries should not make a profit from EU funding. However, some flexibility should be introduced to allow any surplus generated by the grant activities to be used to the benefit of the grant itself.

- In the case of multi-annual framework programme, organizations could be permitted to transfer any surplus from one year to another. This is common practice in many national public authorities – cf. the Scottish Executive. This could be with limited flexibility of 10% per year.

- Organizations should have the capacity to build up cash flow reserves, especially

as many operational grants arrive late during the course of the year.

- Capacity to declare surplus in line with the financial rules of the country where the applicant is based should be allowed if the surplus generated can be demonstrated as coming from outside the eligible budget or from other incomes.

- Interest paid on loans taken out to cover cash flow shortfalls should be included

in eligible costs. Net interest accrued/paid should be eligible. - Interest earned on pre-financing grants should consider as eligible income and

would have to be balanced by eligible expenditures in the respective project or operating year.

- Organizations should be permitted to accrue surplus in the case that income from

non-EU sources and activities can be generated. - Please refer to the letter addressed to the Executive Agency for Culture and

Education, outlining cultural organizations position on the non profit rule, which you find attached.

• Ceilings for small grants: Current rules on grants comply notably with the principles of co-financing (Art. 172 IR), equal treatment and fair competition (Art. 173 IR). However, some flexibility is allowed for "low" value grants (≤ EUR 25,000 Art. 172.3 IR and Art. 173.2 IR) or "very low" value grants (≤ EUR 5,000 Art. 114.3 FR and Art. 175b IR). Question 5: What, in your view, would be the appropriate amount for low and very low value grants?

- It is important to maintain a very low threshold for “very low” grants especially when considering potential applicants from third countries. We recommend that flexibility on “low” grants be maintained with a threshold of 40.000 €.

- The applicant should provide low and very low grants without any financial

contribution. • Financial stability for grant applicants: Current rules foresee a gradual decrease of 'operating' grants, i.e. financing administrative expenditure (Art. 113.2 FR), notably to encourage beneficiaries to diversify and generate own resources. For similar reasons,

ECF Contribution to Consultation on EU Financial Regulations

European Composers Forum (ECF), 18 December 2009 6

the duration of framework partnership agreements, established as a long-term cooperation mechanism with beneficiaries (Art. 163 IR), is limited. Such provisions could be examined in order to find the most appropriate balance between the need for financial stability and the risk of excessive reliance on EU funds. Question 6: How could the rules on operating grants be more flexible? In which way? What are your views on the duration of framework partnership agreements?

- The non-profit rule is prohibitive to flexible organizational development and diversification of funding sources.

- The so-called ‘degressivity’ rule does not take into account long-term

sustainability of organizations or the long-term relationships many NGOs have with the European Union institutions.

- Grant recipients of multi-annual funding should have the possibility to apply for a

renewal of the framework agreement where applicable in the year preceding the final year of the grant. For example, an organization funded in 2008, 2009 and 2010 should be able to apply for repeat funding at the end of 2009 for the period 2011-2013. This is particularly important as decisions on grants are rarely published until the operational year of the grant has begun. This creates a high level of operational instability for organizations.

- Concerning operational funding, a continuous funding could reduce paperwork

for both, funding authority and funded organization. If an organization received a multi-annual framework agreement, an eligibility check should be executed one year before the agreement runs out. If the result of this check is positive, the organization will automatically receive a new framework agreement. Only if eligibility check is negative, the organization has to run through all formalities of the application procedure.

• 'Cascading' grants involving third parties: The possibility for a beneficiary to redistribute part of its grant through subsidies to third parties is currently strictly limited (Art. 120 FR and Art. 184a IR), with a view to notably ensuring adequate monitoring and control of tax payers' money by the Commission. Question 7: Can you give concrete examples and types of actions where the strict limitation on cascading grants became an obstacle for achieving the goal of your action?

- The European Composers Forum has no experience in this area. 2 - THE COMMISSION'S HANDLING OF FINANCIAL FILES Background: The financial handling of contracts and grants by the Commission is designed to minimise the risks of error, irregularities and fraud, and to ensure a strict and adequate monitoring and control of taxpayers' money. In practice, rules can create additional red tape and checks. The Commission is

ECF Contribution to Consultation on EU Financial Regulations

European Composers Forum (ECF), 18 December 2009 7

examining whether these rules can be adapted and how, so as to ensure effective project management as well as a high level of protection of the taxpayers' interest. • Pre-financing payments to beneficiaries (Art. 5a FR): These payments are considered as the property of the Communities until the action has been fully implemented. As a consequence, the interests generated by these payments have to be reimbursed to the EU Budget. This creates administrative and financial formalities (dedicated bank account, cash consumption analysis...) and checks. Question 8: From your experience, what alternative solutions could be proposed for pre-financing payments while safeguarding taxpayers' money?

- Assessments of financial capacity are designed to approve candidates’ eligibility for grants. If a candidate passes financial capacity criteria then no additional guarantees should be required.

- 100% of the grant agreed should be paid before the end of the eligibility period in

order to avoid severe damage to the financial stability of a grant-receiving organization, which by definition and by EU request is a not-for-profit organization. This is common practice for national funds in several EU countries (e.g. Austria). If not all costs have been paid according to the eligibility criteria; the beneficiary would have to pay back the equivalent sum of the grant received. Especially when according multi-annual framework agreements, this should apply for the first years of the agreement. Should not all expenditures of the first years be eligible, the grant of the last year of the framework agreement could by reduced by the equivalent amount.

• Pre-financing guarantees (Art. 152 IR): These guarantees are required to reduce the risk of EU money being lost in case the beneficiary goes bankrupt or otherwise fails to implement the project or repay the money. Yet, the bank guarantor, removing the advantage of the pre-financing, usually blocks the corresponding amount. Question 9: What mechanism, other than pre-financing guarantee, could be explored while ensuring adequate protection of community funds? While the European Composers Forum understands the need to protect community funds, the required bank guarantees are very expensive and represent a significant administrative workload, in some countries they are not available at all for publicly funded NGOs and non-profit organisations. We propose the following solutions on the current problem caused by bank guarantee requirements:

- Remove the requirement of bank guarantee in all cases and introduce bi-annual or quarterly payments in advance

ECF Contribution to Consultation on EU Financial Regulations

European Composers Forum (ECF), 18 December 2009 8

- If the requirement of bank guarantee is to be maintained, then increase the thresholds significantly to at least 200,000 euros.

- As DG ECHO’s approach, classify (potential) beneficiaries as low, medium or

high risks and request bank guarantees only for beneficiaries with certain risk profiles.

- Capacity for third parties to stand as guarantors should be made more accessible.

More generally speaking, looking at the cost of bank guarantees versus risk, there is a strong opinion in NGOs’ community that bank guarantees are largely a waste of valuable funds, which simply feed banks who assume minimal risk. EC could consider assuming risk. • Tendering thresholds for low value contracts (Art. 129 IR): Under certain thresholds, the procedure is simplified: contracts may be awarded on the basis of a single tender and payments can be paid made against invoices. Question 10: Based on your experience, do you think current thresholds are still adequate or should they be increased, and why?

- The European Composers Forum has no experience in this area • Paperwork for applicants (notably Art. 143 IR, Art. 172c IR and Art. 138a IR): As a rule, when participating in a tender or call for proposals, applicants are invited to provide detailed information on their organization and to present a comprehensive proposal on their project and/or offer. To fulfill these conditions more easily, the current rules foresee the possible use of e-tools but, in practice, this possibility is under-utilized for various technical reasons linked, among other things, to the authentication of documents. In another effort to reduce paperwork, the Commission has also created the possibility to split the grant selection process into 2 steps (Art. 178 IR) with a view to only inviting the applicants most likely to be successful to submit a full application. However, while this new procedure reduces work for applicants, it increases the duration of the selection process quite significantly. Considering the above, one idea to continue reducing paperwork could be the introduction of a "label" system so that organizations that have successfully carried out a project and/or contract send only documents relevant to the new application. Question 11: How could the application procedure for both grants and contracts be further improved? The application procedure has generally speaking improved over the last few years. The two-step procedure, such as used in EuropeAid (PADOR) first the concept note and then the complete call, could be introduced.

- We support the establishment of a register of previously approved organizations. Criteria should be established on basic organizational information and financial

ECF Contribution to Consultation on EU Financial Regulations

European Composers Forum (ECF), 18 December 2009 9

information that can be held on a central non-public register. - Whilst the development of online applications somewhat facilitates the process,

this has not improved the quality of the questions applicants are required to answer.

- We propose that the budget headings only refer to types of costs, not to

activities. The design of the budget form as is confusing. On the one hand, the budget headings refer to types of costs, (travel, personnel etc.), on the other they refer to activities (conferences, seminars). Therefore it is in some cases not clear which costs to put where (e.g. travel costs of experts at conferences.) If there is the definite need to know what a specific activity would cost, this could be requested as additional information.

- The application forms, guidelines and budget forms are often not consistent.

Sometimes reference numbers are incorrect and information is even contradictory. We understand that certain questions have to be answered at different places to enable the Commission to check the consistency of an application. However we request that duplicated questions be avoided as far as possible and that contradictions are strictly eliminated.

Other issues we would like to put forward Late payment of grants remains the main issue for many respondents.

- EC should pay automatically interests for late payment rather than the

beneficiary having to request it. - In case that an organisation is funded through different public authorities (e.g.

national and EU), one final report should be sufficient. The authority providing the higher grant should check the eligibility of expenditures and the qualitative output of the organisation. The result of this check should be forwarded to all other public funding bodies. Like this, a significant amount of public employees' time and taxpayers' money could be saved.

The answers here above have been developed in cooperation with Culture Action Europe and the European Music Council. European Composers' Forum (ECF) Wipplingerstrasse 20 A-1010 Vienna/Austria E: info@composersforum.eu www.composersforum.eu Check the new ECF project: ARTMUSFAIR www.artmusfair.net

C084 - 18.12.2009 AT

Frage 1: Halten Sie sich für hinreichend und rechtzeitig informiert über kommende Ausschreibungen? Welche Verbesserungen würden Sie vorschlagen? Die Informationsbeschaffung zu EU-Finanzhilfen ist sehr aufwendig, da dazu sämtliche Homepages der einzelnen Institutionen regelmäßig gescreent werden müssen. Ein zentrales Portal ähnlich der TED-Datenbank für öffentliche Aufträge wäre wünschenswert. Frage 2: Sollten die Bestimmungen zur Ko-finanzierung flexibler gestaltet werden, abhängig von der Art der Maßnahme und der das Vorhaben durchführenden Organisation? Wie könnte unter Beibehaltung des Grundsatzes der Gemeinnützigkeit mit Sachleistungen am besten umgegangen werden? Eine großzügige und einheitliche Handhabung der indirekten Kosten als Pauschalsatz der projektbezogenen direkten Kosten in der Höhe von etwa 25 bis 30% wäre erstrebenswert und würde auf beiden Seiten (Finanzhilfegeber und -Empfänger) den Verwaltungsaufwand erheblich reduzieren. Frage 3: Sollte die Nutzung von Pauschalbeträgen und einer Finanzierung auf Grundlage von Pauschaltarifen eher die Norm als die Ausnahme sein? Sollten die Bestimmungen es zulassen, Kosten in Abhängigkeit davon zu übernehmen, ob die vereinbarten Ergebnisse erzielt wurden? Wenn ja, können Sie konkrete Beispiele nennen? Die Pauschalierung der indirekten Kosten auf aktzeptablem Niveau (25 - 30%) ist durchaus erstrebenswert und sollte daher die Regel darstellen. Eine ergebnisorientierte Abrechnungspraxis ist ebenso sehr zu begrüßen, weil dadurch die Projektinhalte mehr in den Vordergrund gerückt werden. Die Plausibilität eines Projektbudgets/Kosteneffizienz ist ja schon Bestandteil der Projektauswahl. Wenn nun die im Antrag beschriebenen Ergebnisse auch nachweislich erreicht wurden, besteht inhaltlich eigentlich auch kein plausibler Grund mehr für den Beihilfegeber, die Fördermittelzurückzuhalten. Eine derartige Vereinfachung der Abrechnungspraxis führt dazu, dass die Finanzhilfeempfänger dem Projektinhalt mehr Ressourcen widmen können und weniger der Projektadministration. Wurden beispielsweise im Rahmen einer Veranstaltungsreihe 2.000 Teilnehmer angekündigt und ist dies dokumentierbar, sollte auch die volle Finanzhilfe auf Grundlage des eingereichten Budgets zur Auszahlung kommen. Im Falle einer nur teilweisen Zielerreichung könnte die Finanzhilfe auch entsprechend proportional gekürzt werden. Frage 4: Sollten die Bestimmungen sich strikt an den Grundsatz der Gemeinnützigkeit halten oder sollte es diesbezüglich eine gewisse Flexibilität geben? Können Sie Beispiele für bewährte Praktiken anderer öffentlicher Stellen nennen? Die derzeitige Formulierung des Gewinnverbotes ist missverständlich. Im Zuge einer ergebnisorientierten Abrechnungspraxis erübrigt sich diese Debatte dahingehend, als bei Erreichung der Projektziele die im Fördervertrag vereinbarte Finanzhilfe zur Auszahlung kommen würde. Damit könnte der Privatsektor besser in die EU-ko-finanzierten Projekte einbezogen werden.Der Umstand, dass die im eingereichten Budget angeführten Ausgaben/Kosten die Einnahmen nicht übersteigen sollte reichen.

Frage 5: Welcher Wert wäre nach Ihrer Auffassung für Finanzhilfen von geringem und sehr geringem Wert angemessen? Finanzhilfen von geringem Wert: 50.000 € Finanzhilfen von sehr geringem Wert: 10.000 € Frage 6: Inwieweit und auf welche Weise könnten die Bestimmungen betreffend der als Betriebskostenzuschuss gewährten Finanzhilfen flexibler sein? Was ist Ihre Ansicht zur Dauer der Rahmenpartnerschaftsabkommen? Betriebskostenzuschüsse sollten auf eine mehrjährige Basis (3 bis 5 Jahre) nach Maßgabe der Vorlage entsprechender Tätigkeitsberichte in degressiver Form vergeben werden. Dadurch wäre einerseits die Nachhaltigkeit des Bestandes der geförderten Institution gewährleistet, letztere aber auch gleichzeitig dazu aufgerufen, ihre Finanzierung mit zunehmendem Bekanntheitsgrad auf eine breitere Basis zu stellen. Frage 7: Können Sie konkrete Beispiele und Arten von Maßnahmen nennen, bei denen die strikte Begrenzung betreffend 'Finanzhilfen in Kaskaden' dazu geführt hat, dass das Ziel einer Maßnahme nicht erreicht werden konnte? Für die föderalistisch organisierte Wirtschaftskammerorganisation ist es im Hinblick auf die oft recht kurzen Einreichfristen sehr schwierig, ihr gesamtes Netzwerk im Rahmen eines Projektes zu mobilisieren. Die Möglichkeit, im Rahmen eines Projektes Mittel an regionale Organisationseinheiten weiterzugeben, und damit auch ein zentrales Projektmanagement einzurichten, würde die Teilnahme der Wirtschaftskammerorganisation erleichtern und auch kosteneffizienter gestalten. Die Zulassung von Finanzhilfen in Kaskaden im Rahmen von Dachorganisationen und ihrer Mitglieder würde aus heutiger Sicht aus administrativen Gründen undurchführbare Projekte ermöglichen. Frage 8: Welche alternativen Lösungen könnten aufgrund Ihrer Erfahrung für die Vorfinanzierung vorgeschlagen werden, ohne dass die Kontrolle öffentlicher Gelder unterlaufen würde? Im Falle einer ergebnisorientierten Projektabrechnung müssten die auf Vorschüsse erzielten Zinsen, die auf jederzeit verfügbares Geld ohnedies vernachlässigbar sind, anhand von Pauschalsätzen in das beantragte Projektbudget als Einnahmen ausgewiesen werden. Im Zuge der Projektabwicklung ist im Regelfall aber schwer abzusehen, welcher der Vertragspartner gerade finanzielle Vorleistungen erbringt. Es müsste in diesem Fall also auch für den Finanzhilfeempfänger die Möglichkeit eingeräumt werden, allfällige Finanzierungskosten in Rechnung zu stellen. Ansonsten ist die Sichtweise einseitig oder dürften die erzielten Zinsgewinne auch nicht als Projekteinnahmen angeführt werden. Frage 9: Welche anderen Mechanismen sind denkbar, die einen angemessenen Schutz der Gemeinschaftsmittel sicherstellen? In Abhängigkeit von der Höhe der Finanzhilfe sollte eine angemessene Prüfung der finanziellen Leistungsfähigkeitdes Förderungswerbers stattfinden. Eine entsprechende Gestaltung der Auswahlkriterien trüge zu einer Minimierung des Ausfallrisikos bei.

Frage 10: Glauben Sie aufgrund Ihrer Erfahrungen, dass die derzeitigen Schwellenwerte noch immer angemessen sind oder sollten diese erhöht werden? Wenn Sie aus Ihrer Sicht zu erhöhen sind, warum? Die Praxis zeigt, dass das Einholen verschiedener Angebote unterschiedlich aufwendig ist. Bei einfachen Produktionsleistungen (Druck, etc.) geht dies problemlos, bei Catering-Aktivitäten ist dies schon schwieriger. Hier könnten auch horizontal Deckelbeträge eingeführt werden. Jedenfalls sollten Vergaben unterhalb von 5.000 € in keiner Weise hinterfragt werden, zwischen 5.000 und 20.000 € scheinen 3 Angebote angemessen. Immerhin sollte der maßgebliche Effizienzdruck schon im Rahmen der Projektauswahl ausgeübt werden. Frage 11: Wie könnte das Antragsverfahren für Finanzhilfen und öffentliche Auftragsvergabe weiter verbessert werden? Die Akzeptanz und der Einsatz elektronischer Unterschriften seitens der EU-Institutionen könnte zu massiven Kosteneinsparungen führen, indem dadurch eine elektronische Datenübermittlung möglich gemacht würde und Versandkosten wegfielen. Außerdem würde dieser Umstand Antragstellern auch erlauben, die oft sehr kurzen Einreichfristen leichter einzuhalten, da dadurch unnötiger durch den Postweg verursachter Zeitverlust vermieden werden könnte.