Legal and Financial Matters

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1 Legal and Financial Matters

2 Research Participant Portal

3 I am even more confused but at least at a much higher level. Calls presented in a clearer and more coherent way, but problems still exist with finding suitable calls and topics. Topic search option far from perfect; Not possible to find topics by action type; Documents (guides, FAQs) not easy to find at topic level; LEARs cannot see draft proposals; Problems with correspondence during grant preparation

4 Too many s received by beneficiaries; Not possible to see who receives correspondence who does what? No s received when GA should be signed, or when actually signed by Commission Pre-financing received before noticing that GA was signed.

5 FP7 mandates do not cover Horizon 2020 Some beneficiaries (including UKRO subscribers!) still do not have the extended mandate for their LEARs, thus leading to delays in signature of GAs. If LEARs change, the appointment procedure must be repeated (initiated by beneficiary not Commission!). Also, massive delays with validating new beneficiaries by REA Validation Services (priority given to successful projects).

6 28 EU Member States (Croatia joined in 2013) Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, United Kingdom Overseas Countries and Territories (OCT) linked to the Member States Associated Countries Similar list to FP7 expected Third countries (funding will depend on GDP) BRIC no longer eligible for funding

7 Association Agreements already in place or under way: Israel, Norway, Iceland, Turkey, Former Yugoslav Republic of Macedonia (FYROM), Serbia, Albania, Montenegro, Bosnia & Herzegovina, Republic of Moldova. Faroe Islands will finalise their agreement by 2015 Ukraine and Armenia are discussing potential association Switzerland s partial association to H2020 (Pillar 1, Euratom, SE&WP) from 15 September N.B. Liechtenstein not associated to Horizon 2020

8 Eligibility for funding: Only less developed economies (countries mentioned in Annex A to the WP) are automatically eligible for EU funding. Developed and developing economies, such as the USA, Canada, Australia, New Zealand, BRIC, Mexico, etc. will no longer automatically qualify for EU funding. Funding may be provided in the following cases: Under the existence of a bilateral agreement specifying such funding i.e. EU-US agreement for Societal Challenge 1 When such funding is specifically mentioned in the call text or topic i.e. INT or INT When Commission deems participation of an entity essential for the success of the project due to its expertise, access to data, etc.

9 Faster negotiation: ramifications

10 Time to grant = 8 months (5+3) Evaluators will no longer be allowed to make suggestions for major changes: they will mark proposals down to reflect weaknesses. Only proposals that are ready to go will be awarded. Two cases of proposals where EC decided to fund projects but requested cutting the budget by a third!

11 Puts significant pressure on: Commission services Budgetary constraints mean problems with meeting contractual obligations (thus evaluation takes full 5 months!) Evaluators Under the first wave of calls, over applications received but only 5300 evaluators contracted ( registered) Oversubscription means they only have 2 hours to evaluate proposals, including writing feedback. Complaints: Lack of consistency during evaluation, irrelevant comments, clear links missing between scores and justifications

12

13 Single indirect costs rate Simplifying project management and removing recurrent errors. 60%? 20%? Real? Simplified? Single model: 25 % Flat Rate Disclaimer: Information not legally binding

14 Funding rate Maximum reimburseme nt rates Research and technological development activities (*) Demonstration activities Other activities One project = One rate for research actions Network of excellence Collaborative project(****) Coordination and support action 50% 75% (**) 50% 75% (**) 100% 50% 100% 100% (***) (*) Research and technological development includes scientific coordination. (**) For beneficiaries that are non-profit public bodies, secondary and higher education establishments, research organisations and SMEs (***) The reimbursement of indirect eligible costs, in the case of coordination and support actions, may reach a maximum 7% of the direct eligible costs, excluding the direct eligible costs for subcontracting and the costs of resources made available by third parties which are not used on the premises of the beneficiary. (****) Including research for the benefit of specific groups (in particular SMEs) For all beneficiaries and activities in the grant. Defined in the Work Programme: Up to 100 % of the eligible costs for research and innovation actions; Up to 70 % for innovation actions (exception for non-profit organisations up to 100%). Disclaimer: Information not legally binding

15 Direct eligible costs: 100% for Research and Innovation Actions (RIA) and Coordination and Support Actions (CSA) 70% for innovation projects (100% for non-profit organisations including universities) Indirect costs (overheads): Flat rate of 25% No need to identify the costs covered or provide supporting documentation (MSCA fixed rate allowances)

16 Researcher unit cost [person/month] Institutional unit cost [person/month] Scheme Living allowance* Mobility allowance Family allowance Research, training and networking costs Management and overheads ITN IF RISE COFUND ESRs 3710 ERs * A correction co-efficient will apply to these costs For COFUND: Unit costs are subject to a co-funding rate of 50% as established in the grant agreement.

17 Changed from FP7 For Horizon 2020 only required for coordinators of actions where EU-contribution exceeds EUR 500,000 unless the coordinator is: a public body a higher or secondary education establishment an international organisation or body whose participation is guaranteed by the government of an EU country or associated country a private individual in receipt of a scholarship

18 Personnel cost

19 Actual personnel costs: calculation Actual Personnel Cost = Hours worked for the project x Hourly rate Hourly rate = Annual personnel costs Annual productive hours The hourly rate is to be calculated per financial year If the financial year is not closed at the time of reporting, the beneficiary must use the last closed financial year available.

20 Annual productive hours 1720 hours Individual annual productive hours Formula: annual workable hours + overtime - absences Standard annual productive hours According to the beneficiary's usual accounting practices; Minimum threshold: annual productive hours 90 % of the standard workable hours Disclaimer: Information not legally binding

21 Using the last closed financial year goes against Commission s rules on using actual costs. Beneficiaries always loose money due to increments, etc. Commission: Calculating personnel cost was the biggest source of financial errors in FP7. Simplification of the process worth losing some money! UKRO needs input from subscribers (examples of calculations to make a strong case against using the LCFY).

22 Change from FP7 Timesheets no longer required for staff employed 100% on a Horizon 2020 action. Declaration of exclusivity can be used by staff working exclusively on an action either: for the entire reporting period, or from the beginning of the reporting period (day 1) until a certain moment during that period.

23 Plans to allow for the declaration to be used from one date to another, during the reporting period.

24 VAT not deductible (recoverable) elsewhere is now an eligible cost. HMRC: Grant in aid paid to fund research does not constitute consideration for any supplies by the person receiving the funding to the person paying it. In these circumstances, research that is wholly grant funded is not a business activity for VAT purposes and is not within the scope of VAT. Any VAT incurred in the course of such funded research is not deductible.

25 Payments and reporting

26 Pre-financing payment: Provides the beneficiaries with a float but remains the property of the EU until the payment of the balance. Amount corresponding to 5% of the maximum grant amount is retained by the Commission/Agency from the prefinancing payment and transferred into the Guarantee Fund MGA does not indicate % of final grant available for pre-financing. Constrained by EU budget issues. Grant agreement will specify amount

27 Statements must be in euro Rate to be used different to methodology in FP7 Beneficiaries with accounting established in a currency other than the euro must convert the costs recorded in their accounts into euro, at the average of the daily exchange rates published in the C series of the Official Journal of the European Union, calculated over the corresponding reporting period. Commission advises use of:

28 Statements must be in euro Rate to be used different to methodology in FP7 Beneficiaries with accounting established in a currency other than the euro must convert the costs recorded in their accounts into euro, at the average of the daily exchange rates published in the C series of the Official Journal of the European Union, calculated over the corresponding reporting period. Commission advises use of:

29 Researcher A who is based in the UK has attended a conference in Frankfurt. He paid for hotel accommodation in EUR in Frankfurt and claimed back this expense from his employer (Institution B) through his expenses claim. The researcher was reimbursed in GBP at the daily spot rate. Institution B is in the process of submitting a financial claim to EC and includes the cost incurred by researcher A in EUR. Is this correct? Should the cost be claimed as per the hotel bill in EUR, or at the GBP/EUR rate at which it was paid out to the researcher?

30 Wording changed in MGA on 1 October but Annotated MGA still shows the old text! Updated Annotated MGA expected in December Bonus: MSCA Annotated MGA available soon.

31 Different requirement to FP7 Horizon 2020: required by a beneficiary only at the end of a project, where total EC contribution (excluding indirect costs) is equal to, or higher than 325k Now claimed under Art.10 (Contracts for goods, works and services) not Art.13 (subcontracting) of the GA.

32 No audit strategy for Horizon 2020 available yet. First (Commission) audits unlikely to happen before early 2016 Commission will create Common Audit Service (CAS) Max 7% of beneficiaries in Horizon 2020 can be audited. Commission audits can be started no later than 2 years after the payment of the balance by the Commission Promise of broader acceptance of participants accounting practices Separate audits by ECA and OLAF possible.

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