3 rd nwe lead partner seminar
DESCRIPTION
3 rd NWE Lead Partner Seminar. 10 th April 2003 in Lille. FINANCIAL REQUIREMENTS. FINANCIAL REQUIREMENTS. Content: IProject Management and Payment IIThe Payment Claim IIIEligibility of Expenditure IVAudit Requirements VProject Modification Procedure VIGeneral Considerations. - PowerPoint PPT PresentationTRANSCRIPT
3rd NWE Lead Partner Seminar
FINANCIAL REQUIREMENTS
10th April 2003 in Lille
FINANCIAL REQUIREMENTS
Content:
I Project Management and Payment
II The Payment Claim
III Eligibility of Expenditure
IV Audit Requirements
V Project Modification Procedure
VI General Considerations
I Project Management and Payment
Lessons from Interreg IIC NWMA: Poor coordination between partners
→ delayed or partial implementation of Action Plan
Difficult for LP to collect invoices of all partners
→ delayed submission of Payment Claims
→ delayed ERDF payment
Lead Partner not able to audit partner expenditure fully ineligible expenditure
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Basis for Project Management Structure
Joint Convention
Lead Partner Principle
Overall responsibility for project implementation (content + finance)
Responsibility for Project Management
Signing of Grant Offer Letter;
Transfer of received ERDF grant to other project partners;
Organisation of audit of entire project expenditure;
Contact to JTS
Submission of Activity Reports, Payment Claims, Audit Reports, project modifications
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Reporting to the Programme Secretariat
Submission of Payment Claims and Activity Reports: by 30th June and by 31st December each year
Decentralised / centralised bookkeeping system determines delays for centralisation of partner information
Separate project bank account for receipt and distribution of ERDF assistance
Preparation costs can be claimed as soon as GOL is signed
Project Payment Procedure
Paying Authority
Programme Bank Account
JTS
Assesses the Activity Report and the Payment Claim received
Prepares the payment request to the Paying Authority
Member States
National Authority (or the JTS by delegation) authorises the payment
Payment Claim
Project Lead Partner
Submits an Activity Report and a Payment Claim every 6 months
Reimburses the other project partners according to their expenditureProject Partner Project Partner
Payment Claim Flow
Money Flow
II The Payment Claim Form
The Payment Claim Form shows all eligible expenditure incurred by each partner per budget line during the most recent, six-
month long, reporting period
Payment Claim Form
Maximum ERDF Grant Rates
Objective 1Non-
Objective 1
In general 75% 50%
Investment in infrastructure generating substantial net revenue
40% 25%
Investment in firms 35% 15%
Payment Claim Form
Budget Lines
Preparation Costs
Partner Staff
External Experts and Consultants
Travel and Accommodation
Equipment
Investment
General Costs
III Eligibility of Expenditure
Reference Documents
Commission Regulation (EC) 1685/2000
Rule 11.4 (Expenditure by Public Administrations)
Guidelines for Project Promoters
Project Audit Guidelines
Eligibility of Expenditure
Expenditure actually paid out is the basis for assessing eligibility under the INTERREG IIIB NWE Programme. This means expenditure directly linked to the approved
budget and supported by receipted invoices or documents of equivalent probative value.
Invoices can only be included in a payment claim when they have been paid in full by one of the project
partners.
Eligibility of Expenditure
Preparation Costs
• must show direct demonstrable connection with project development
• cannot include expenditure incurred more than one year prior to the date of the first submission of the application
Contributions in Kind
• subject to restrictive conditions
• staff time is not eligible as a contribution in kind
Eligibility of Expenditure
Staff Costs
• must be supported by timesheets for part-time staff
• eligible providing they do not arise from the statutory responsibilities of the public authority or the public authority’s day-to-day management, monitoring and control tasks
Indicative Rates
• external experts and consultants
• travel costs
• daily subsistence allowances
Eligibility of Expenditure
VAT
• only eligible if not reclaimed at any stage
Expenditure incurred outside the NWE area
• eligible for public partners located outside area as long as results of project benefit the eligible (NWE) area
• must be justified in full even if partners located within NWE area
IV Audit Requirements
Project Audit Guidelinesgive clear instructions
• To LP: what to expect in terms of audit• To project auditors: in terms of work to
be performed
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Why are projects audited?
Legal obligation : EC regulation N° 438/2001
Verification of the sound management of the project
To ensure proper use of funds
To certify that expenditure incurred is legal and correct
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What kind of audit to expect ?
Compulsory audits:
Management and Control Systems Audit
Payment Claim audit
Possible complementary audits:
Member State controls at the Secretariat’s request
Member State sample checks (5% checks)
European Commission checks
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Management and Control Systems Audit
Aim: to ensure that the project as a whole
has systems in place for the management and control of ERDF funding
and that those systems operate effectively and consistently at all levels
When: at the beginning of the project
By whom: an external auditor appointed by the JTS or by Secretariat staff
Audit costs: covered by the Secretariat
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Management and Control Systems Audit
Partners’ responsibility: to establish effective project monitoring and financial systems
The audit trail should provide a clear description of the flows of the project’s financial management:
Processes
Bodies and persons responsible
Documents created
Data system used
Controls in place
Archiving
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Management and Control Systems Audit
Checks to be performed by the auditor:
Verification of the documented audit trail (including the content of the Joint Convention and of other agreements)
Verification of the book-keeping system established
Test the system: trace a representative number of invoices through the trail
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Payment Claim Audit
Aim: to check and certify the eligibility of expenditure included in each payment claim
When: with each Payment Claim submitted to the Secretariat (twice a year)
By whom:
interim payment claims: internal or external auditor
final payment claim: external auditor
Audit costs: covered by the project’s budget
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Payment Claim Audit
Partners’ responsibility:
to ensure that grant is not claimed from the Lead Partner or the Secretariat until payment for eligible expenditure has been made
to keep separate accounts for the project
Lead Partner must receive originals (or certified copies) of all supporting documents relating to partners accounts
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Payment Claim Audit
Checks to be performed by the auditor:
Verification of expenditure declaration - related to the project
- eligibility
- actually incurred
- not claimed before
- supported by appropriate documents
Grant rates
Exchange rates
Competition policy
Public procurement
V Project Modification Procedure
A) Agreement with JTS, possible submission of revised parts of AF Budget Line Modification (+/- 20%, 2x during project lifetime)
Extension of project duration
B) Submission of revised Application Form with approval of NA (LP country) and JTS
In case of considerable changes (case by case basis)
Examples: Modification of the total budget, partner drop-out
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Project Modification Procedure
C) Submission of revised Application Form with approval of PSC
In case of major changes (case by case basis)
Examples:
Increase of ERDF funding
Significant changes in project content
VI General Considerations
1) EU Legislation
Examples: - Regulation (EC) N° 1685/2000 of 28 July 2000 (eligibility of expenditure)
- Regulation (EC) N° 438/2001 of 2 March 2001 (management and control systems for assistance granted under the Structural Funds)
2) Public Procurement
Consider when realising investments or hiring consultants and experts -European Community rules and national legislation
European Directive: contracts worth more than €200,000
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General Considerations
3) State Aid
“Any form of aid that is provided directly by the state or indirectly through state resources, to an undertaking or group of undertakings.”
(Community rules on State Aid limit the support which may be provided from public funding to assist projects in the commercial sector.)
4) N+2 rule
of automatic decommitment of unused resources (Council Regulation 1260/1999) on Programme Level
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