How To Fund A Project
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1 PREPARATORY ACTION IN THE FIELD OF SPORT Administrative and Financial Management Handbook The rules outlined in this Administrative and Financial Handbook apply to the projects funded by the Preparatory Action in the field of sport call for proposals This Administrative and Financial Handbook will help contractors to manage projects in respect of DG EAC requirements by providing practical information to be used during the project lifetime. Information included in this Handbook, however complete, cannot foresee every possible situation which may arise during project implantation. For cases not covered by this handbook, contractors can contact the Sport Unit. VERSION January
2 AMENDMENT OF THE AGREEMENT AND ITS ANNEXES The Contractor may, in duly justified cases, request an amendment of the Agreement. Any request for amendment must be submitted to the Commission in good time, before any changes are planned to take effect, and in all events three months before the end of the eligibility period. The request must be signed by the contractor, will specify the circumstances and will clearly detail the reasons for the request. It will include a detailed revised budget whenever the request has a budgetary impact. The Sport Unit will assess the request and advise whether the changes are acceptable, and decide whether a formal amendment is required. Some specific cases related to amendments: Partner Withdrawal Where a Partner withdraws from the Project, the contractor must inform the Commission and clearly present the effects that the Partner s withdrawal has on the project activities. Details about the work already carried out by the partner and amount of funds already received must be given. New Partner Where it is proposed that a new partner joins the project, the contractor must inform the Commission and explain the added value that the new partner will bring to the project. As a general rule, no changes to the budget will be accepted. Only in case of replacement partners, budget modifications may be accepted. Changes to Project Activities Proposed changes to Project Activities must be fully justified and must not weaken the project s original nature and aims. To ask for such changes the Contractor must include detailed information on the proposed changes to project activities. Changes to the Budget The maximum EU contribution and maximum EU financing cannot be modified. If the contractor needs to change budget headings simultaneously by more than 10% and 5.000, it will submit a request together with a revised budget. ELIGIBILITY OF EXPENSES ELIGIBLE COSTS As a general rule, only costs meeting all the following criteria are eligible for funding: they are incurred or generated during the duration of the action; they are indicated in the estimated overall budget of the action; they are necessary for the implementation of the action; they are identifiable and verifiable, in particular being recorded in the accounting records of the beneficiary and determined according to the generally accepted applicable accounting standards of the country where the beneficiary is established and according to the usual cost-accounting practices of the beneficiary; 2
3 they comply with the requirements of applicable tax and social legislation; they are reasonable, justified, and comply with the requirements of sound financial management, in particular regarding economy and efficiency; they must relate to activities carried out within the Member States of the European Union; they must be in accordance with the project proposal and with contractually agreed activities; they must be incurred by the project partners. INELIGIBLE COSTS Certain costs will in all cases be considered ineligible, in particular: return on capital; debt and debt service charges; provisions for losses or liabilities; interest owed; doubtful debts; VAT and other taxes, unless the beneficiary can demonstrate that it is a final charge and show that it is unable to recover it according to the applicable national legislation; costs declared and covered by another action or work programme receiving a Community grant; excessive or reckless expenditure; expenses for travel to or from countries other than those participating in the project, unless explicit prior authorisation is granted by the Commission; costs incurred in respect of travel to or from countries outside the European Union; costs incurred outside of the eligibility period (unless they were generated by agreed project activities taking place within eligibility period); financial costs (loan interest, exchange costs, costs of opening and operating bank accounts); fines, financial penalties and legal costs. BUDGET HEADINGS Contractors should be aware of this basic information relating to the different budget headings: 1) Staff Costs Staff costs must be calculated on the basis of the actual daily remuneration multiplied by the number of days worked on the project. Contractors must be prepared to provide evidence relating to how the daily rates for staff were calculated (e.g. via copies of payslips or invoices). 3
4 2) Travel and Subsistence Costs Reimbursement may be claimed only for journeys directly linked to the project and only for persons directly employed by the Contractor or Partner organisations. Costs for other persons should be accounted for as Subcontracting costs or Other costs Travel Costs will be the real Travel Costs. All means of transport can be used (rail, bus, taxi, plane, car); the Partnership should use the cheapest means of travel and should in particular make every effort to use cheap tickets for air travel by taking advantage of available low fares. Travel Costs should include all costs for travel from the point of origin to the point of destination. Costs for travel to or from countries outside the European Union are ineligible. Subsistence Costs may be financed by the project, provided that they are consistent with local prices and they are calculated in accordance with the existing internal rules of the Contractor or Partner organisations (which may be on an actual cost or daily allowance basis). Subsistence costs cannot exceed the maximum daily allowance available in annex 1. Subsistence allowances cover accommodation, meals and all local travel costs. 3) Cost of purchasing equipment Purchase of equipment, such as hardware, can be accounted to the project only if the equipment is purchased or rented during the eligibility period, at a rate which reflects the degree and duration of use specifically dedicated to project activities. Where equipment is purchased, the Contractor must apply a maximum annual depreciation in accordance with its national accounting rules. The total expenses for equipment must not exceed 10% of the total direct costs. 4) Expenses relating to consumables and supplies. Computer costs such as renting of web-space, purchase/hire of hardware and/or software; purchase of consumables; audio visual costs such as purchase/hire of video projectors/beamers or conferencing equipment, are accepted provided these costs are directly relevant to the project. 5) Subcontracting Subcontractors must be located in the Member States of the European Union or the European Economic Area. Subcontracting costs are amounts paid to an external organisation carrying out a specific one-off task in connection with the project (e.g. translation, expert consultancy, interpretation, design & printing, conference/seminar organisation). These costs are normally admissible only a) where staff within the member organisations of the project Partnership do not have the required skills or b) for cost saving reasons. The management and the general administration of the project may not be subcontracted. Where a Contractor or Partner enters into a subcontracting agreement, it must draw up an Agreement within which the subcontractor undertakes to abide by the main Agreement concluded with the EU. When procurement is involved in the course of project implementation, the contractor will award the contract to the tender offering best cost-benefit ratio (value for money). 4
5 Contracts should always be awarded following the offer of at least three tenderers (5 tenderers when value is above EUR ). For contracts of a value over EUR , national public procurement rules apply. Note however that subcontracting cannot exceed 30% of total direct costs. 6) Other Costs This heading allows for costs not covered by any other category of expenditure to be claimed under the Agreement, provided these costs are considered necessary to the proper performance of the tasks/activities as contractually agreed. These costs must be clearly identifiable as relating to project activities. Costs under this heading can include: press releases and advertisements (one-off costs); purchase of copyrights and other Intellectual Property Rights (IPR); hire of rooms (for information/testing sessions, seminars, conferences, etc.), although not within Contractor or Partner organisations own premises; purchase of information materials (books, studies, electronic data); conference fees; meeting registration costs; travel and subsistence costs relating to beneficiaries, such as experts with no subcontract; rental of exhibition space. 7) Overheads Overheads, up to a maximum of 7% of total eligible costs, may include the following costs, provided they are specific to the project: daily communications (fax, telephone, mail, etc.); photocopying; office materials / stationery / office consumables; bank costs relating to the transfer of funds (this excludes account management costs). FINAL REMARKS Contractor's reporting responsibility: It is the contractor's responsibility to report for the whole of the budget and costs incurred, thus including all partners expenses. Contractors must thus set up an accounting system which makes it possible to identify the sources of project expenditure. Bank account: A specific bank account must be used for the project expenditure and revenue. The Contractor may also use a non-specific bank account, provided it allows project specific-finances to be easily identified. Exchange rates: All amounts given in the project reports must be expressed in Euro. Contractors should use Euro denominated accounts. For costs reasons, accounts in national currency may be used: in this case, the contractor must use the exchange rate applied by the bank to convert the first pre-financing payment into national currency. 5
6 ANNEX 1 MAXIMUM DAILY SUBSISTENCE ALLOWANCES EUR/DAY Austria 225 Belgium 232 Bulgaria 227 Czech Republic 230 Cyprus 238 Denmark 270 Estonia 181 Finland 244 France 245 Germany 208 Greece 222 Hungary 222 Ireland 254 Italy 230 Latvia 211 Lithuania 183 Luxembourg 237 Malta 205 Netherlands 263 Poland 217 Portugal 204 Romania 222 Slovak Republic 205 Slovenia 180 Spain 212 Sweden 257 United Kingdom 276 6
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