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/