Technical Assistance Office

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SOCRATES - MINERVA

GRANT AGREEMENT 2004Contractual and Financial Management

Administrative and Financial Handbook

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Objectives Essentials New Developments for 2004 contracts Administrative and Financial Handbook Approved Budget Modifications Eligible Expenditure Financial Management Partnership Agreements Intellectual Poperty Rights Final Reports

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Essentials

Many projects fail because of ignorance or a misunderstanding of the basic rulesWhere are the rules contained? => Grant Agreement and Annexes (including the Handbook), EU’s Financial RegulationsCommon areas of confusion:

Amendments Budget transfers Eligibility of expenses Percentage financing Delivery of results

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New Developments for 2004 Contracts

No more lump sums for staff costs – details of these costs now have to be given in the Final Report EU grant is based on a fixed percentage of the Approved

budget of the project (see points A.4 and A.5 of the Grant Agreement)Greater flexibility in the budget transfer rules

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Administrative and Financial Handbook

Annex V to the Grant Agreement and therefore enforceable Purpose:

- Aid for beneficiaries/coordinators and a management tool

- Definitions (Beneficiary, Co-ordinator, Legal Representative, Partner, Approved Budget, …)

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Structure of the Handbook

Chapters

. Approved budget

. Modification of the Grant Agreement

. Eligible Expenditure

. Financial Management

. Reports

. Supporting Documents & Audit

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APPROVED BUDGET

Concept of Approved Budget (Annex II of the Grant Agreement) How has it been assessed ?

- External Experts- Project aims and rules on eligibility

Consists of1. An amount approved for Staff costs2. An amount approved for Direct costs 3. An amount approved for General costs The fixed percentage financing is applied to the total of points 1-3 above to arrive at the maximum Community grant

CHAPTER 1

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MODIFICATION OF THE GRANT AGREEMENT

Commission has to give its formal approval Period for making the requests – at least 60 days before end of

the Eligibility Period Types of changes: Partnership – addition, departure or replacement of a partner Management – Beneficiary or Coordinator Work plan and Budget Changes

Banking Information

Eligibility Period and Final Report deadline

CHAPTER II

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Budget Modifications

Variations from the Approved Budget for Staff Costs and Direct Costs are allowed. If such increases exceed 10%, then an amendment has to be requested Changes within Direct Costs do not need approval (justified and

do not undermine project) For Subcontracting special rules apply - if no costs were

foreseen, approval only necessary if in excess of 10.000 euro, ex VAT

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CHAPTER III ELIGIBLE EXPENDITURE (1)

General Principles Costs must be reasonable and in accordance with the principles of

sound financial management All costs must be real costs, i.e. actually incurred by the partnership No member organisation of the partnership may derive a profit from the

grant All expenditure for Staff and Direct costs must be justified by invoices or

accounting documents of an equivalent value Ineligible Costs (travel outside of SOCRATES eligible countries,

contributions in kind, excessive or reckless expenditure etc.)

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ELIGIBLE EXPENDITURE (2)

Staff Costs Shall be calculated on the hourly, daily, monthly gross cost

multipled by the number of hours, days or months worked on the project The beneficiary and partners must keep full and accurate

records Should not exceed the norm for the labour market concerned Volunteer costs are not eligible (no real costs!)

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ELIGIBLE EXPENDITURE (3)

Travel and subsistence costs Travel costs to non-Socrates countries (CH, USA,…) is not

eligible Subsistence costs to be based either on actual costs or fixed

rates, in both cases maximum daily rates apply Please provide complete information as requested by the Final

Report form!

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ELIGIBLE EXPENDITURE (4)

Equipment and Material Only if strictly necessary for the project Percentage use for the project should be realistic (it is not linked to depreciation!) Depreciation: - only if purchase price exceeds 1000 €- software does not need to be depreciated- based on life expectancy of 3 years - based on annual calculation factor of 33.33 % (no monthly or daily based calculation necessary!),

=> maximum depreciation is 66,66 % for a 2-year-project and 100 % for a 3-year-project

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ELIGIBLE EXPENDITURE (5)

Subcontracting Costs Definition: “Any amount paid to an outside body which is not part of a

member organisation of the partnership and which carries out specific and limited work for the project.” Only allowed if the staff of the partners do not have the skills required No subcontracting of the basic project activities (entire management &

general administration) Three quotes if more than 10.000 € in total Consultants fees not more than 400 € per day Cannot exceed 30 % of the total eligible costs

- - - -

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ELIGIBLE EXPENDITURE (6)

Other Costs Costs not covered by any other budget heading Typical examples: bank charges, hiring of conference halls,

production/translation/publishing costs when performed by partner organisation

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ELIGIBLE EXPENDITURE (7)

General Costs Normal overhead costs of the organisation Typical examples: communication costs, infrastructure costs

(rent, electricity etc.), office supplies They do not have to be detailed in the Final Report Limited to 7 % of the total eligible costs

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FINANCIAL MANAGEMENT

Bank Account (in €, in name of the beneficiary organisation)- cash withdrawals should be avoided

Accounting System- Analytical – identifying the sources of funding and the project expenditure.- Proof of payment will be required for Direct and Staff costs - Keep track of time sheets of persons who have worked on the project (identifying the person and time spent and activity)

Partnership- Partners must be in the application or approved later by the Commission- Partnership agreements must be concluded

CHAPTER IV

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Partnership Agreements Duties and obligations of the partners Delivery schedule of results Management Structures for the project and powers - Ensure active

cooperation Budget and Grant share Quality and evaluation system Payment conditions – payment based on results or some other system? Reporting & accounting – regular reporting is a good monitoring tool Intellectual Property Rights Termination and notice provisions – allow for exits Choice of law and Incorporation of EU agreement

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Intellectual Property Rights= the rights granted to creators and inventors to control the use made of their productionsMeaning of Copyright?

Covers literary and artistic works Regulates the reproduction of these works

Key areas: Use of pre-existing material Rights of third parties Jointly developed products Non-technical partners Employees and subcontractors Sources of guidance

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Final Reports

Declaration of Expenditure (= part 3 of the report form) is the basis for calculation of the final Community Grant Staff and Direct Costs will be assessed by individual budget

headings to see if there any ineligible items Eligible Staff and Direct costs plus the amount declared for

General costs = Total eligible costs of the project The contract percentage of funding will be applied to the total

eligible costs to arrive at the final grant. The latter cannot exceed the maximum stated in the Grant Agreement Payment of the balance after approval of the Final Report by

the Commission

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THANK YOU

For any information please contact:http://www.europa.eu.int/comm/education/programmes/socrates/minerva/ind1a_en.html

www.socleoyouth.be