Applicant s seminar 1 st Call

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1 Applicant s seminar 1 st Call Munich Germany 09 July 2015 JS/ MA Thi s p r og r am m e is co- f i nanced by t he E ur op ean R eg i onal D ev el op m ent F und.

2 Agenda 10:00 Official welcome by MA & JS 10:15 Contractual arrangements - partnership agreement & subsidy contract 10:35 Guidance on completing the AF in ems Intervention logic, work plan, state aid, financial tables 12:15 Lunch break 13:00 Guidance on completing the AF (continued) 2

3 Agenda 14:00 Eligibility rules, financial flows and first level control 14:30 National information by Alpine Space contact points 14:45 Next steps & open questions 15:00 Individual consultations with JS/ACP/MA Check at registration desk for timing 16:30 End and departure 3

4 Contractual Arrangements Thi s p r og r am m e is co- f i nanced by t he E ur op ean R eg i onal D ev el op m ent F und.

5 Relevant regulations and contracts European Commission ESI Funds Regulations Contractors Contractors Programme Rules Managing Authority Subsidy Contract Partner States Contractors Contractors (ERDF) Lead Partner Partnership Agreement Project Partners 5

6 Relevant regulations and contracts/2 European regulations Programme rules 6

7 Why a partnership agreement? article 13 of ETC-regulation: LP shall make arrangements with PP solid legal basis for a sound project implementation clear regulation of tasks, duties and responsibilities of all project participants

8 Main elements project management tasks of lead partner obligations of the project partners project steering group financial management, reporting first level control, audits intellectual property rights, project results, communication liabilities changes in the project and its partnership

9 Procedure to be submitted with project application to speed up process to reduce administrative burden: template with minimum clauses provided by programme only to be supplemented with project data additional clauses can be added, but check of MA before signature required

10 Procedure/2 Option 1 (minimum clauses) today s seminar: guidance Option 2 (additional clauses) today s seminar: guidance LP sends draft to MA for check as soon as possible, at latest by Friday, September 11th 2015 to signature: (ERDF) LP with each PP signature: (ERDF) LP with each PP submission with application form submission with application form Friday, September 25th 2015

11 Signature and copies each project participant shall receive one original the programme only needs a scan of the signed partnership agreement in case of problems faced in the signature process please inform the managing authority

12 Signature and copies/2 Example: LP and 4 project partners Option 1: bilateral Option 2: multilateral = 8 copies + 1 scan for programme = 5 copies + 1 scan for programme 12 copies in case of ERDF-LP 6 copies in case of ERDF-LP

13 Why a subsidy contract? article 125 of general regulation: MA shall provide LP with document with conditions for financial support clear regulation of tasks, duties and responsibilities

14 Main elements award and paying out of subsidy eligibility of costs reporting and requests for payment obligations of LP, liability information and communication changes of project and project partnership financial control, audits repayment and stop of payment project outputs and results

15 Procedure template with standard clauses provided by programme based on ESI regulations, best practice examples, experience same provisions shall be applied to all projects references to application form and partnership agreement to avoid re-signature during project lifetime

16 Procedure September submission of signed PA with AF December Project approval by programme MA informs about approval and sends e-version of subsidy contract January Signature by LP (& ERDF-LP) and sending to or handover to MA in LPseminar January 2016 MA countersigns contract Aim: all subsidy contracts signed within one month after approval

17 Guidance on completing the AF in ems Thi s p r og r am m e is co- f i nanced by t he E ur op ean R eg i onal D ev el op m ent F und.

18 18 Guidance for AF and ems

19 19 Intervention logic

20 Programme and project intervention logic 20

21 Programme and project intervention logic 21

22 How to develop the project intervention logic Main transnational challenge addressed Programme specific objective Main cause Overall objective Main results Programme result C 1 C 2 C 3 SO1 SO2 SO3 O1 O2 O3 O4 O1 O2 O3 O4 Workplan 22 Budget

23 23 Guidance for AF and ems

24 24 WP Communication Activities

25 Why is communication important? Communication is a toolkit that Increases the impact of your project Helps to reach your aims Makes your results and good practices visible Raises awareness Builds an image 25

26 Planning project communication Communication is integral part of the project set-up and implementation. Do not underestimate the importance of this WP and the efforts to be invested into it. Communication is a continuous activity Providing information is NOT communication Communication is about making your audience understand the importance and the value of what you are doing. Know your target audience: plan communication activities that match your audience Draft communication plan before drafting WP, have a dedicated communication officer in your team and communicate with one voice. 26

27 Completion of WP communication Mandatory activities are stated in subsidy contract: programme logo with project acronym and reference to ERDF financing project website final public event poster about the project 27

28 Logo Work for graphic designer: Just project name: 1 2 hours With logo: depends on logo, max. 1 day 28

29 Website About the project is linked with the ems and updates automatically. Do NOT include project website hosting in your budget plan. 29

30 Selection criteria 30 Coherency with overall project objectives Completeness Are mandatory and additional key deliverables foreseen? Accuracy in targeting an audience How well are they identified and how will they be addressed? Concreteness of actions How far is methodology to address target audience described? Reach of planned activities In how far do planned activities address decision makers, civil society, media, etc.

31 Support Continuous support by JS and MA contact us! After approval: There will be further trainings for approved project partners Communication toolkit will be provided, explaining CD rules and giving recommendations on how to plan activities 31

32 32 Guidance for AF and ems

33 33 Overview on State aid

34 State aid Key elements General principle Competition must not be distorted by the granting of subsidies Relevant provisions Articles of the TFEU (EEA agreement / bilateral agreements for LI and CH) Definition of state aid Any aid granted through public resources which may distort competition by giving an advantage to certain undertakings which affects trade between Member States If any of these conditions is not fulfilled, there is no state aid! 34

35 Selective advantage for undertakings What is an undertaking Any entity carrying out an economic (commercial) activity => offering goods or services on a given market, even if free of charge No matter if private or public, profit-making or not Classification always connected to a specific activity (entity that carries out both non-economic and economic activities regarded as undertaking only for latter) What is an economic advantage Benefit that would not have arisen in normal market conditions e.g. undertaking receives subsidy for research activities No advantage if it is passed on to other actors e.g. an organisation offers trainings for free to companies Selectivity The aid discriminates certain market operators compared to others, based on the size, type of activity, location, etc. e.g. the aid is granted to SMEs only 35

36 Some examples (1) Project partner Activity Rationale State aid relevance University Developing new training course Topic of training is of non-commercial interest Low R&D institute/university Research activities Research has non-economic character Low Regional business support agency Development of business plans and publication on project website Activity is part of institutional scope of the agency. There is a market for such services, but project result is accessible free of costs for all interested persons. Low 36

37 Some examples (2) Project Partner Activity Rationale State aid relevance Company Creation of a new brand, e.g. bio milk Alpine Space Project aims at creating a market for a new product by creation of brand, is of precommercial nature Low Company Presentation of brand at fairs and marketing activities Presentation of product/brand aims at sales promotion High Development agency Consulting, workshops, seminars offered free of costs to SMEs Activity is part of institutional scope of the agency. Advantage is passed on to SMEs. Low State aid relevance at project partner level But relevance at SME-level 37

38 ASP guidance and approach Guidance from the programme - Information to applicants / project holders through: o Factsheet on State aid o Guidance from ACP, MA/JS o Seminars (applicant seminars, lead partners seminar) o Analysis of EoI and AF + recommendations Programme approach to State aid - Design project so that it is not state aid relevant - in case of state aid relevance ERDF granted as de minimis aid - De minimis aid provided by MS where the MA is located (Austria) 38

39 De minimis aid Considered compatible with the market due to low amounts Regulated by Regulation 1407/2013 Main requirements: max EUR 200,000 (gross grant equivalent) or EUR 100,000 for road freight transport sector over a 3 year period per single undertaking per Member State Self-declaration by the undertaking 39

40 Which impact on ASP projects Project development Be aware of State aid issues when developing your project application Describe activities that might be state aid relevant clearly Assess cost-benefit for your project when planning state aid relevant activities relevance of the activities vs administrative constraints Project approval Funding of State aid relevant activities subject to limits of de minimis aid Project implementation State aid checked by FLCB with payment claims + ex-post audits If State aid rules not complied with, expenditure deemed ineligible 40

41 Guidance ASP factsheet on state aid + annex Articles of the TFEU EU Regulation 1407/2013 on de minimis aid Draft Commission notice on notion of State aid INTERACT questions and answers on state aid DG Competition website: EFTA website: 41

42 Eligibility rules, financial flows and first level control Thi s p r og r am m e is co- f i nanced by t he E ur op ean R eg i onal D ev el op m ent F und.

43 Financial control European Commission Managing Authority JS ACP Certifying Authority Audit Authority/GoA Auditor Project Participant first level controller = Check of all expenses and certification of eligible ones => FIRST LEVEL = Audits on operations, sample check => SECOND LEVEL = On the spot audits of the EC to verify the functioning of the system => THIRD LEVEL => TO ENSURE THAT ONLY ELIGIBLE EXPENSES ARE CO- FUNDED (=PROPER USE OF FUNDS) 43

44 Financial flows European Commission Managing Authority/Certifying Authority JS 6 5 progress report and certifications 7 Lead Partner 4 partner reports incl. certifications of expenditure Project Partner 1st level control 3 services, invoices 1 2 Service provider payment Partner State 44 = ERDF co-funding = national funding

45 The eligibility rules Based on the new legal framework especially Regulation (EU) No 1299/2013 Regulation (EU) No 1303/2013 Commission Delegated Regulation (EU) No 481/2014 Working with simplified cost options (such as lump sums, overheads and flat rates) Harmonised with other ETC programmes Considering experiences made in the past Agreed among all Member States Relevant for all project participants of the programme s Member States Austria, France, Germany, Italy and Slovenia Basis for first level control 45

46 Structure of the eligibility rules General principles of eligibility Detailed rules concerning the budget lines Staff costs Office and administration expenditure Travel and accommodation costs External expertise and services costs Equipment expenditure Ineligible expenses 46

47 General principles of eligibility Expenditure shall be essential and additional, must comply with the principles of efficiency, economy and effectiveness and with the principle of real costs except for specific cases such as flat rate, lump sum or depreciation further detailed, related to contracts between project partners cannot be co-funded, of organisations contracted via in-house procurement can be considered eligible as long as based on verified actual and eligible costs without any additional fees charged, shall be supported by invoices and proofs of payment, When applicable, the relevant public procurement procedures need to be observed, reported to ASP must be in euro. Double financing shall be excluded. Revenues generated must be deducted from the total eligible costs. Only expenses incurred on the level of the respective project participant are eligible. 47

48 General principles of eligibility The eligible period Expenditure incurred in the eligible period (between project start and project closure date) shall be eligible. Pre project phase (project preparation): A lump sum of EUR for total eligible costs (corresponding to maximum EUR ERDF) is granted if the project is approved. Therefore, costs incurred during the preparation phase can never be claimed on a real costs basis. Project implementation: starts with the project approval and lasts until all activities related to the approved work packages of the project have been completed. Costs related to the project implementation and incurred between the project start date and the project closure date are eligible if following the rules as outlined in this paper. Sufficient resources for the administrative project closure (e.g. for the reporting to the LP, the drafting of the final report, preparation of the FLC) shall be foreseen. Post project phase: Any costs related to activities implemented in this phase are ineligible with the exception of the costs related to the first level control of the last reporting period. 48

49 Staff costs Staff costs cover gross employment costs of staff members employed by the project partners and working full or part time on the project in line with their respective employment contracts. Staff costs of the project partner can be co-financed by the programme on the basis of: Real costs 20 % flat rate of the direct costs reported under the budget lines travel and accommodation costs, external experts and services costs and equipment expenditure. Each project partner shall decide on whether to apply the real costs or the flat rate principle in the project application phase. Its choice is valid for all staff members of the project partner and it cannot be modified during the entire project duration. 49

50 Staff costs Real costs method eligible costs and calculation Eligible are the following cost components: Salary including overtime (provided it is paid out), other costs linked to the salary such as employment taxes and social security contributions which have to be borne by the employer if they are stated by law and not recoverable by the employer. Depending on the extent of assignment to the project the following calculation method applies: Full time assignment on the project: 100% of the gross employment costs are eligible (as long as they are in line with the general principles outlined above). Part-time assignment on the project fixed percentage of time: The gross employment costs multiplied by the fixed percentage of time worked on the project is eligible (percentage shall be fixed in project assignment). Please consider the principles to be obeyed as outlined in the eligibility rules. 50

51 Staff costs Real costs method pros and cons Pros - The calculation method is simple (the risk of any error in the calculation is low). - In case of a full-time assignment, 100% of the staff costs can be co-financed and no further calculation is necessary. - No working time registration is necessary. Cons The extent of assignment requires a clear definition of tasks and activities per staff member as well as a well-founded calculation basis. The staff costs need to be documented properly (e.g. pay slips). In comparison to the flat rate calculation: - The actual staff costs can be reported and can be co-funded (in most cases considerably more than 20% of all other direct costs). 51

52 Staff costs Flat rate principles and calculation The staff costs are calculated as a flat rate of 20% of the project partner s direct costs other than staff costs. The eligible amount for staff costs is thus equal to 20% of the total eligible amount declared under the following budget lines: Travel and accommodation costs, External expertise and services costs, Equipment expenditure. If the beneficiary opts for the flat rate financing of direct costs, no direct staff costs can be claimed. When the 20% flat rate option is applied, it has to be proved that the project partner has at least one employee (e.g. by providing a registration at the social insurance agency). Project partners do not need to document that the expenditure has been incurred and paid. 55

53 Staff costs Flat rate pros and cons Pros - The calculation method is very simple (the risk of any error in the calculation is also very low). The calculation itself should be done automatically by the e-monitoring system. - Therefore the financial risk connected with it can be considered as low. - Beneficiaries do not need to document that expenditure has been incurred and paid, they just have to provide a proof of the existence of any staff. Cons The flat rate of 20% will not be attractive for most beneficiaries (in the past programming period an average of 50% of the total project budget was dedicated to the cost category staff). The flat rate is linked to the eligibility of other direct costs. Should financial corrections be necessary (e.g. due to deficiencies in procurements) and lead to the fact that a smaller amount of direct costs is eligible, the basis for calculation of the flat rate will reduce correspondingly and this will result in a lower amount of staff costs that can be co-funded. 56

54 Office and administration expenditure Office and administration expenditure covers operating and administrative expenses of project partners (such as office rent, utilities, office supplies, IT systems, communication, bank charges). For office and administration expenditure a flat rate of 15% of the reported staff costs can be granted. No direct costs can be considered eligible. The list on cost items covered by office and administration expenditure stated in the delegated act is exhaustive. All listed items are to be considered as covered by the flat rate and cannot be reimbursed under any other budget line. If no staff costs are foreseen and reported for respectively by the project partner no flat rate for office and administration costs can be charged. No specific audit trail is necessary. Project partners do not need to document that the expenditure has been incurred and paid. 59

55 Travel and accommodation costs This budget line covers travel and accommodation costs (i.e. travel costs, costs of meal, accommodation costs, visa costs and daily allowances) of project partners that relate to project activities. This budget line follows the real costs principle. Only travel and accommodation costs of the following staff members shall be eligible: responsible person and contact person indicated in the AF and their officially designated substitutes (in case of applying the flat rate for staff); responsible person and contact person indicated in the AF and their officially designated substitutes as well as the staff members officially assigned to the project for the period in question (in case of applying the real costs principle for staff costs calculation). Please consider the principles to be obeyed as laid down in the eligibility rules (including indicative daily rates for hotel and maximum daily subsistence allowances). 60

56 External expertise and service costs This budget line cover expenses related to professional services and expertise provided by external service providers (other than the PP) contracted to carry out certain activities linked to the delivery of the project. This budget line follows the real costs principle. Please consider the principles to be obeyed as laid down in the eligibility rules As regards the procurement of services the following is regulated: Beneficiaries which fulfil the definition of a contracting authority according to the relevant national procurement legislation have to respect these public procurement rules and properly document the procurement procedure. All other beneficiaries must ensure adequate market research for contracts with a value higher than EUR 5,000 excluding VAT. For purchases with an estimated contract value of EUR 50,000 net and more, a call for offers must be published on the programme s dedicated website allowing interested companies appropriate time to file an offer (at least two weeks). The purchase process must be documented using a form provided by the programme. Expenses based on contracts concluded and payments effected between PP or PP and observers are ineligible. 61

57 Equipment expenditure In this budget line equipment purchased, rented or leased by a PP, other than those covered by the office and administration budget line, shall be reported. Equipment is limited to the items listed in the eligibility rules (such as office equipment, IT hard- and software, furniture, laboratory equipment, tools or devices). This budget line follows the real costs principle. Please consider the principles to be obeyed as laid down in the eligibility rules Equipment can only be co-financed if it is necessary for the project implementation or if is considered as a project output. An equipment necessary for the project implementation is a tool or device used to carry out project activities. It must be necessary for the delivery of the project and used for that purpose. The full purchase price is eligible if used solely for the purpose of the project and depreciable within the eligible period. Otherwise a pro-rata needs to be calculated on the basis of a justified and equitable method. An equipment considered as a project output (small scale investment) is a tool or device that remains in use by the target group after the completion of the project. Such equipment may be approved by the Programme Committee provided that the transnational benefit is well justified in the application form. The full purchase price is eligible. Equipment is eligible only if listed in the approved AF and not covered by the office and administration costs (e.g. the IT system of a PP is covered by the overhead for office and administration while any IT system developed for the project specifically is not). 62

58 Ineligible expenses Non-exhaustive list of ineligible expenditure: VAT unless it is genuinely and definitely borne by the project partner; interests on debts; exchange rate losses; national banking charges; housing (residential building, domestic architecture); purchase of land; fines, financial penalties and expenditure on legal disputes and litigation; contributions in kind (provision of land, real estate, equipment, unpaid voluntary work ); gifts; any costs incurred before project approval and after project closure (except the costs related to the first level control of the last reporting period); expenditure already funded in total with public funds; communication material that is not in line with the programme rules on communication; tips; fees between beneficiaries of the same project for services, supplies and work carried out within the project; costs related to the contracting of employees of the partner organisations as external experts (e.g. as freelancers). As the list of ineligible expenditure is not exhaustive, expenditure not listed should not be necessarily considered as eligible. 63

59 National information by Alpine Space contact points Thi s p r og r am m e is co- f i nanced by t he E ur op ean R eg i onal D ev el op m ent F und.

60 Next steps & open questions Thi s p r og r am m e is co- f i nanced by t he E ur op ean R eg i onal D ev el op m ent F und.

61 Individual consultations with JS/ACP/MA Thi s p r og r am m e is co- f i nanced by t he E ur op ean R eg i onal D ev el op m ent F und.

62 Ineligible expenses 67

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