FP6 Contract and Financial Reporting

FP6 Contract and Financial Reporting

The Basics for EC Consortia

Linda PolikResearch Services

[email protected]

Linda Polik, Research Services1 July 2006

Overview of Presentation

1) Contractual Issues

2) Financial Issues

3) Reporting & Deliverables

4) Consortium Agreement


Contractual Issues - Project Duration

Start date of project - fixed start date of 1 May 2006 for a duration of 36 months (costs can be incurred only during the lifetime of the project)Extension of project duration without increase in budget is unproblematic but requires a contract amendmentContract terminates upon last payment by Commission or earlier according to provisions of contract


The Model Contract

CORE CONTRACT• Scope• Consortium• Start Date• Duration• Payment

Modalities• Reporting• Payment• Special clauses• Communication• Law• Signatures

ANNEX ITechnical annex

• Objectives• Milestones• Tasks• Role of

participants• Deliverables

ANNEX IIGeneral Conditions• Definitions• Implementation

and deliverables• Termination and

responsibility• In-/Eligibility of

Costs• Audits• Cost statements • Intellectual

property rights

ANNEX IIISpecific

ProvisionsDepending on

the project type

Standard terms and conditions for all projects

Special Clauses

Depending on the project type

Unique to each project

Unique to each project Standard terms

and conditions for all projects


Responsibilities of the Coordinator

Sole contact between all contractors and CommissionAdministration & financial aspects ─ scientific coordination ─ editing of publications & reports─ general supervision─ receive and disburse funds to partners─ inform Commission of budget transfers─ report use of financial resources

Submission of reports and cost statementsKeep overall, management-level project accounts


Responsibilities of Contractors

Carry out and monitor research Name the person in control, and advise of changes, events of force majeure, non-delivery, any problemsProvision of required information (e.g. cost statements, justification of costs, audit certificates, scientific progress reports)Participation in relevant meetingsAvoidance and advice of incompatible commitmentsAdhere to fundamental ethical principles, local health & safety regulations, have their own insurance cover, comply with national laws


Responsibilities of Contractors

Signatory to the contractJoint and several liability to Commission for carrying out the project Full rights to own results they generate and to use all project results for internal research purposesObligation to protect and use results (including publication and dissemination)Full rights of access for commercial use on favourable conditions (terms & conditions detailed in Consortium Agreement and Database Licence)


Financial Issues – Cost Models

Additional cost (AC) - for participants unable to identify indirect costs at project level= Reimbursement is 100% of additional costs with a flat-rate overhead of 20% of all direct costsFull cost (FC) – for participants who can identify indirect costs at project level= EC contribution is 50% of total project costs (this includes the organisation’s full overhead rate)Full direct costs with fixed overhead rate (FCF) ─ EC pays 50% of all direct costs – Overheads

determined as flat rate of 20% of all direct costs


Costs – Definitions

Direct costs─ Costs that can be directly associated with the work being done

Additional direct costs─ Those that are in addition to normal recurring costs and not covered by

any other funding

Indirect costs (overheads)─ Those costs that cannot be directly attributed to the work, but are related

to it─ In FC: ‘actual’ indirect cost (capable of verification)─ AC and FCF: 20% contribution to indirect costs

Eligible costs─ Costs which are actual, economic and necessary


Eligible costs

No pre-defined cost categories – no pre-defined eligible costs

Incurred during the project’s lifetime

Determined according to each organisation’s usual accounting principles

Recorded in each organisations’ accounts

Not subject to taxes, VAT, interest etc. – you have to strip all identifiable taxes from account


Problematic Direct Costs

Common office equipment: computers, laptops and software

Cost of laboratory space and related expenses

Postage, telephone charges, photocopying

General administration and management

Miscellaneous recurring consumables

Airport tax, VAT


Non-Eligible Costs

Any identifiable indirect taxes, including VAT or dutiesInterest owedProvisions for possible future losses or chargesExchange rate lossesCosts declared, incurred or reimbursed in respect of another Community projectCost of return on capitalDebt and debt service chargesExcessive or reckless expenditureAny cost which does not meet the definition of eligible costsCurrent costs, notional costs, opportunity costs


Charging Salary Costs to the Project

Not an issue for FC partners but for AC

Issue is NOT permanence but source

Where does salary come from (i.e. government)?

What proportion of salary is already being paid?

Does contract demand external funding?

What happens if funding runs out?


Charging Costs to the Project

Any cost specific to the projectStaff costs can be charged for AC participants if:

─ personnel with a temporary contract for working under the Community contract concerned

─ personnel with a temporary contract with a view to completing a doctorate

─ personnel whose employment contract depends wholly or in part on additional external financing. Only costs not covered by normal recurring financing (government core funding) are eligible.

─ personnel have option to work additional hours (overtime)


Cost Reporting

Not reported as specific items such as consumables, equipment, personnel, travel etc.

Reported according to activity: research, demonstration, management, training

Will have to be in position to report costs by activity

Justification of costs in management report in relation to science / work carried out


FP6 Financial Guidelines

“Final” updateable version of March 2005Payment modalities according to types of grantCosts and cost modelsPaymentsControlsRecoveries and sanctionsExamples, cost statement forms …Find all necessary documents at:

http://www.cordis.lu/fp6/find-doc.htm(includes Financial Statements forms in Excel format, Reporting Guidelines, Financial Guidelines, templates)


Payment and Reporting – STREP (3 yrs)

0 6 12 18 24 30 36

Detailed work plan

Start of the project

Initial advance payment

Mid-term assessment

Reported costs Second advance payment

Periodic activity report

Second reporting

period Reported costs

Periodic activity report

Final reporting

period

Reported costs

Final report

Audit

Audit

Third advance payment

First reporting

period

Mid-term report


Periodic Reports

All due within 45 days of end of reporting periodPeriodic Activity Reports (usually annual) and final report as defined in Art. 6 and 7 of EC contractInterim Activity Reports may be required if mentioned in the Technical AnnexPeriodic Management Report including financial statements (form C) from all partners and consolidated financial summary for consortium in EuroAudit Certificates as often as required by Art. 7 of the EC contract (annually for IPs and NOEs) Periodic Funding Distribution ReportsUpdate of Project Fact Sheet


Activity Report

Overview of activities carried out by the consortium during the period

Description of progress towards project objectives

Description of progress towards milestones/deliverables

Problems encountered and corrective action taken

Updated plan for using and disseminating knowledge

(Tacit approval if no response after 90 days)


Management Report

Justification of resources deployed by each contractor─ linked to activities─ necessity justified─ AC global estimate of all resources used (incl. person months of

permanent staff)Form C ─ financial statement per activity─ one to be provided by each contractor

Audit certificate─ one to be provided by each contractor

Summary periodic financial report─ consolidating claimed costs─ based on information in Form C


Final Report

All due within 45 days after end of projectPublishable Final Activity Report covering the main aspects of work, objectives, results, conclusionsFinal Management Report for the full duration of the project consolidating the claimed costs of all contractorsAudit Certificates from all contractorsFinal Funding Distribution Report consolidating the funding distributed to each contractor over the full duration of the projectFinal Report on Gender Action Plan (IPs and NOEs only)


Reporting Guidance Notes

• You can download the Reporting Guidance Notes from the web at:http://www.cordis.lu/fp6/find-doc.htm#reporting

• Project Reporting Guidance Notes contain─ Templates─ Form C per type of project─ Funding distribution table─ Questionnaires on horizontal issues


Deliverables

Reports (contractual, policy statements, guidelines, handbooks, draft standards, procedures, strategies)Prototypes (technical, commercial)Data (Statistics, databases, trends)Software (Algorithm, code, database, system)IPR (Patent, trade mark, copyright)Educational material (lectures, courses, modules, CDs)Meetings (workshops, seminars, conferences, summer schools)Media (Web site, CD ROM, Video)Publications (journal, newsletter, book, conference paper)


Time Sheets (or equivalent)

Can only claim for hours worked

Also useful for equipment

NOT only for time spent on the project

Certified by senior staff

Kept by ALL staff working on the project

For those staff NOT charged, indicates shared cost element


Model Cost Statement (Form C)

Commission models according to instrumentBasic project identification information

1. Declaration of resources (made available by 3rd parties)2. Eligible costs by activity (Research, Demonstration, Training,

Management, Other)3. Declaration of receipts by activity (income from other sources)4. Declaration of interest on pre-financing5. Requested EC Contribution (total for period)6. Audit certificates information7. Conversion rates used (per partner)8. Contractor’s certification


The Audit Certificate

To give the Commission ‘reasonable assurance’ that costs claimed conform with the legal and financial provisions

Determined according to cost model (AC / FC)Costs claimed fulfil the ‘eligible cost’ definitionReceiptsInterest from pre-financingExchange rateProject management toolCost reimbursed 100% - but no VATOne certificate per contractorLayout according to Commission template


Commission Audit

As well as spot checks, the Commission can audit:For contractors and sub-contractorsScientific aspectsTechnological aspectsEthical aspectsFinancial aspectsAny other aspect─ financial accounting or management principles

Keep all documentation up to 5 years after the end of project!


Consortium Agreement

Specifying terms in model contractAll members of consortium (but not the Commission)Subject to EC contract and Rules of ParticipationDefines management structure, responsibilities of Coordinator and partners, and decision-making procedures in the various bodies of the consortiumDetails Payment modalitiesDetails of IPR ownership, use and accessIdentification of pre-existing know-howRecuperation of advance payments


Consortium Agreement

Liabilities and compensationConfidentiality Rules for publicationsProposed action where defaulting contractorConfidentiality agreement (non-disclosure)Defaults and remedies / sanctionsSettlement of disputesAnnexes (e.g. Database Licence)Any amendments require written approval of all partners


Summary of FP6 IPR conditions

Access rights to pre-existing know-how (PEKH)

Access rights to knowledge resulting from the project

If needed by participant to carry out his own work under the projectFor carrying out the project Royalty-free unless otherwise

agreed before signing the contractRoyalty-free

If needed by participant to use his own knowledgeFor use purposes

(exploitation and further research)

On non-discriminatory and reasonable market conditions to be

agreed

Royalty-free unless otherwise agreed before signing the contract

Best practice: royalty-free access for further research but favourable conditions for commercial use

Possibility for participants to agree on exclusion of specific pre-existing know-how of a participant from this obligation


Intellectual Property Rights

Access Rights on a non-exclusive basisAccess Rights do not include rights to sub-licenseAccess Rights may be requested up to 2 years after end of project if needed to Use own KnowledgeIf Knowledge is not “Used” then disseminationOwnership belongs to those who did the workJoint ownership subject to separate agreements


Database Licence

Database is owned by CoordinatorEach partner owns the copyright in its own dataAll partners cross-license data to each other for academic purposes (teaching and research)Any commercial use of data requires consent of Coordinator, and is subject to a separate agreement specifying the termsAll publications of data have to acknowledge ownership / copyright of the EUREQUAL consortium

FP6 Contract and Financial Reporting

Documents

Transcript of FP6 Contract and Financial Reporting