Post on 15-Dec-2015
IPA partners seminar
Dubrovnik, 5th February 2013
Eligibility of expenditure and specificities of the public
procurement
Index Reference documents Eligibility:
General rules Timeframe Budget lines Supporting documents
Public procurement VAT Ineligible expenditure Revenues Audit trail
Reference documents
• Commission Regulation (EC) No 1085/2006 establishing an Instrument for Pre-Accession Assistance (IPA) and related amendments
• Commission Regulation (EC) No 718/2007 Implementing Council Regulation and related amendments
• Practical Guide to contract procedures for EC external actions (PRAG)
• MED First Level Control guidelines
• MED fact sheets
• Each Member State may define specific rules on eligibility of expenditures - national manuals
General rules on eligibility
• Necessary to carry out project’s activities/objectives
• Clearly related to activities foreseen in the Application Form
• Incurred during eligible period
• Incurred within MED area
• Real: actually borne directly by partners and supported by
accounting documents justifying incurred expenses/payments
(invoices, payrolls….)
• Supported by documents attesting administrative procedures
adopted (tenders, contract, …) .
• Respect EU/Programme/national relevant rules
Timeframe – Implementation/closure
• Engaged, invoiced and paid out:
• After the signature of the relevant Financing Agreement by all the parties
• Within date of project closure
• In case costs cannot be paid out within the date of project closure, 2 additional months only for payments
Please note that this additional delay of two months does not apply if these months go beyond the 30th June 2015. No expenditure can
be paid after the 30th June 2015.
Budget Lines
• Staff• Durable goods• Consumable goods• Travel and accommodation• Services• External expertise• Promotion, information and publications• Overheads
FIRST LEVEL CONTROL GUIDELINES FACT SHEETS
Detailed practical info on: background information, guidance, supporting docs allocating costs on budget lines accounting
Staff
• Directly employed by the partner according to national regular
employment contracts
• Check national legislation/national eligibility rules
• In case of staff working less than 100%, the calculation shall be
based on hourly rate
• Cost of real hours of employees working on the project
• No estimations
• Timesheets: duly and fully filled in
• In case the same project partner participates to more than
one project, indicate on the monthly time sheet of the
concerned person(s) the hours spent on all projects he/she
is involved in
Staff – Ex. timesheet
PERSONAL TIME SHEET
PROJECT y
INSTITUTION w
EMPLOYEE
YEAR / MONTH
PERSON HOURS PER DAY
PROJECT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
Total Hours per project
Person hour Cost
PROJECT 1 y 7 2 8 8 8 8 8 8 8 8 8 8 8 7 7 7 7 7 7 7 8 154 0,00
PROJECT 2 x 1 6 0 0 0 0 0 0 0 0 0 0 0 1 1 1 1 1 1 1 0 14 0,00
PROJECT 3 0 0 0,00
PROJECT 4 0 0 0,00
PROJECT 5 0 0 0,00
PROJECT 6 0 0 0,00
Total working hours per day 0 8 8 8 8 8 0 0 8 8 8 8 8 0 0 8 8 8 8 8 0 0 8 8 8 8 8 0 0 8 168 0,00
Total amount € 0,00
Staff – Ex. calculation hourly cost
asap
please check the accuracy of the method of calculation of hourly cost with your FLC/NCP
Durable / consumable goods
DURABLE GOODS
• Foreseen in the approved Application Form
• Goods expected to last more than 1 year
• Depreciation according to relevant national rules
• According to article 34 of Regulation 718/2007, second hand
equipment is not an eligible cost for IPA partners.
CONSUMABLE GOODS
• Goods likely to wear in no more than 1 year time (low value asset)
• Not subject to depreciation
• Held by personnel directly employed by partners’ structure
(STAFF)
• Travel cost held by external experts: under “external experts”
• Travel
• general rule: the most economic way of transport shall
be used (economy class, public transports)
• Accommodation
• within national limits
• Subsistence allowances
• not exceed the usual subsistence allowances of public
authorities of project partner's country
• comply with rules applicable in the relevant country
Travel and accommodation
• Travels NOT foreseen in the application form:
• Please ask your Lead partner to request confirmation, through e-mail, to your JTS project officer
• In particular:
• Travels outside MED area: duly justified and previously approved by MED Managing bodies
Travel and accommodation
SERVICES
• Costs for suppliers of services (translations, interpreting, meeting
organisation, premises, catering for events, etc.)
• When these services have a direct link to promotion costs, it is
possible to choose between the “services” budget line and the
“promotion” budget line depending on budgetary needs
EXTERNAL EXPERTISE
• Work of independent consultants/experts
• work is essential and the specific work cannot be carried out by partner’s personnel (studies, analysis, surveys, …)
• Travel and accommodation expenses of external experts must be included in this budget line
Services / External expertise
• Costs directly linked to project promotion:
• Press releases, inserts in newspapers
• Internet sites
• Events organization
• Printed publications: leaflets, brochures,
newsletters and editing, etc...
Promotion, Information and Publications
Overheads
• Eligible as long as they are based on real costs – actually paid –
with a direct link with the project’s implementation.
• Lump sums, overall estimations or unjustified calculations are not
authorised.
• The overheads costs which are chargeable on the project only
partially:
• through a pro rata calculation method according to a fair,
equitable and duly justified method (in accordance with
generally accepted accounting principles)
Supporting documents
DURABLE GOODS, SERVICES, EXTERNAL EXPERTISE, PROMOTION
• Evidence of compliance to public procurement rules: evidence of selection process
• Contracts • Invoices
• Durable goods: evidence of the depreciation plan adopted for each element when depreciation applies
• Proofs of payment
STAFF
• List of personnel working on the project
• Employment/labour contracts or internal service orders
• Payslips
• Timesheets
• Evidence of the calculation method of the hourly cost
• Proofs of payments of: salary, taxes, security schemes
Supporting documents
TRAVEL AND ACCOMODATION
• List of personnel working on the project
• Agenda/programme of meeting/event
• Signed mission request/authorisation
• Travel invoices original tickets and all other original documentary evidence (i.e. boarding pass, invoices/other equivalent documents, in the case of e-tickets an e-mail with the booking number serves as a proof etc.)
• Proofs of payment
• Use of own car: reimbursement request through mileage sheet, according to national procedures and agreed values
Public procurement rules
• Procurements are awarded according to strict rules to ensure that:• suitably qualified contractors are chosen without bias • the best value for money or the best price is obtained,
with the full transparency appropriate to the use of public funds
• Practical Guide to Contract procedures for EU external actions (PraG) explains the contracting procedures applying to all EU external aid contracts
• National rules on public procurement may be used if they are stricter than PraG
Public procurement rules
• Procurement procedures have to be applied for all services, supplies and works planned in the project budget
• The procurements have to be planned on project basis
• They cannot be planned in such a manner to avoid certain thresholds (artificial splitting)
• You should have allocated financial resources for public procurement expertise in your budget
Public procurement rules
• The IPA Project Partners act as Contracting Authorities
• Decentralised management: decisions are taken by the Contracting Authority without prior reference to the European Commission
• Ex post control: Procurements will be subject to verification audits afterwards, prior to reimbursements
Public procurement rules
• Transparency• Same rules apply for all
providers/suppliers• Avoid conflict of interest• Rules of nationality and origin
Please refer to the PraG and contact the relevant national authority in your
country for more details on the tendering procedures and financial
thresholds
• VAT does not constitute eligible expenditure unless it is
genuinely and definitely borne by the partner and thus
cannot be recovered
• VAT which is recoverable by whatever means cannot be
considered as eligible
• First Level Controllers will have to confirm if the VAT has
been really borne by the controlled project partner:
• coherence with the VAT status of the partner in the
application form
• checklist annexed to the certification of expenditures
VAT
• Not supported by relevant documentation
• Not justified by project’s activities/objectives
• Not supported by the relevant public procurement
procedures
• Lump sum, general estimations, unjustified calculations
• Expenditures held outside the eligible period
• VAT which is recoverable
• Representation expenditures (e.g. presents, flowers,
etc.)
Ineligible expenditure (general rules)
Ineligible expenditure (art 10 Financing agreement)
• Taxes, including value added taxes;• Customs and import duties, or any other charges;• Purchase, rent or leasing of land and existing buildings;• Fines, financial penalties and expenses of litigation;• Operating costs;• Second hand equipment;• Bank charges, costs of guarantees and similar charges;• Conversion costs, charges and exchange losses associated
with any of the component specific euro accounts, as well as other purely financial expenses;
• Contributions in kind;• Interest on debt;• Credits to third parties;• Debts and provisions for losses or debts.
• Examples:
• Sale of products
• Sale of merchandise
• Tuition Fees
• Conference Fees
• Services against payment
• Control:
• Generation of revenues will be subject to
control during certification of expenditure
• Deduction:
• If a project generates revenues, the generated
net revenue must be deducted from eligible
costs in full or pro-rata depending on whether it
was generated entirely or only partly by the co-
financed operation
Revenues
Audit trail • Partners must ensure that all accounting
documents linked to the project are available and filed separately
• Original copies of documents to be kept by each partner
• Until December 31st 2021
• Later if requested at national level
• In order to ensure a clear identification of the expenditures:
• Opening of a specific bank account for the project payments;
• Noting the allocation (project title and amount) directly on the invoices/equivalent documents
Thank you for your attention!
MED PROGRAMME JTS
Région Provence-Alpes-Côte d'Azur27, Place Jules Guesde
13481 Marseille Cedex 20 - France
Tel: +33 4 91 57 - 52 96 or 51 33 Fax: +33 4 91 57 53 13
E-mail: stc-med@regionpaca.fr
http://www.programmemed.eu/