Legal framework of the project implementation

Project financial management and controlsVienna, 7 April 2011

Luca FERRARESEJTS CENTRAL EUROPE Programme

CENTRAL EUROPE PROGRAMME 2007-2013

1. Applicable rules

The legal framework

• Regulations of the Structural Funds

• Horizontal rulesEU rules

• National legislation• Internal/institutional

rulesNational

rules

• Programme documents

Programme rules

Subsidy contract

Partnership agreement

1. Applicable rules

EU and national rules

EU Regulations ruling the general budget of the EUCommunities;

EU Regulations ruling ERDF funds; Community rules on horizontal policies (Public procurement,

equality between men and women and non-discrimination,environment protection, State Aid, Publicity);

In their latest version!

National Rules applicable to Lead and Project Partners (e.g.national eligibility rules for the Structural Funds, publicprocurement, etc.).

CENTRAL EUROPE Operational Programme; Application Manual (call specific); Implementation Manual; Control & Audit Guidelines.

Programme documents:

1. Applicable rules

Additional documents are available (fact-sheets, templates,FAQ, etc.) but they are for information purposes only and theyhave no legal value.

Signed between the Managing Authority andthe Lead Partner (LP) on behalf of the entirepartnership (Lead Partner principle)

Signed between the LP and all ProjectPartners (PPs), ensuring mutual responsi-bilities and obligations within the partnership

2. Subsidy Contract and Partnership Agreement

Standard templates on www.central2013.eu

Subsidy Contract:

Partnership Agreement:

2. Subsidy Contract

Terms of the Subsidy Contract

§ 1 Legal framework§ 2 Subject of the contract (max amount of ERDF awarded, total

project budget, grant rate);§ 3 Project duration;§ 4 Eligibility of costs, budget flexibility (10% and 20%);

2. Subsidy Contract

Terms of the Subsidy Contract

Payments not requested in time and in full or non incompliance may be lost.

No advance payments foreseen!

Reporting period

Total cost (€)

Expected payment request *

(€)

Progress/final report to be submitted to the JTS at

the latest by Preparation Costs 6.000,00 4.943,80 01/07/2011

11/10 - 04/11 169.000,00 139.250,47 01/07/2011 05/11 - 10/11 338.000,00 278.500,94 01/01/2012 11/11 - 04/12 612.940,00 505.042,51 01/07/2012 05/12 - 10/12 343.970,00 283.420,03 01/01/2013 11/12 - 04/13 252.430,00 207.994,07 01/07/2013 05/13 - 10/13 109.970,00 90.611,68 01/02/2014

Total: 1.832.310,00 1.509.763,50

§ 5 Request for payments:

Terms of the Subsidy Contract

§ 6-7 Obligations of the Lead Partner:

Arrangements for its relations with the other PPs (partnershipagreement);

Project implementation; Overall responsibility on incurred and validated expenditure; Transfer of ERDF contribution to the PPs; Project management: start-up, budget reduction, change of

partner, organization of project Steering Committees; Keeping of supporting documents required for an adequate

audit trail regarding expenditure incurred and payments,made available for verifications and audit;

Additional obligations (e.g. State Aid conditions if applicable).

2. Subsidy Contract

2. Subsidy Contract

Terms of the Subsidy Contract

§ 8 Lead Partner liability towards the Managing Authority: Overall financial and legal responsibility on behalf of the

partnership and towards third parties.

§ 9 Validation of expenditure and audit of projects: Identification of First Level Controllers for validation of

expenditure; Submission of Progress Reports accompanied by validated

expenditure at lead and project partner level; Retention of all information and supporting documents, at

least until 31 December 2022.

Terms of the Subsidy Contract

§ 10 Recovery of unjustified expenditure in case of irregularitiesand of infringements of the contract;

§ 11 Publicity: Lack of respect of publicity rules (as in the

Implementation Manual and Control & Audit Guidelines)§ 12 Ownership -Use of outputs: Ownership, title and industrial and intellectual property

rights vest in the LP and/or PPs in accordance to theapplicable national law;

Joint output management must be ruled within thePartnership Agreement;

Outputs cannot be transferred according to the terms as inArt. 57 of Regulation (EC) 1083/2006.

2. Subsidy Contract

Terms of the Subsidy Contract

§ 13 Revenues: Generated earnings (e.g. sales of products, merchandise,

participation fees, training sessions offered at marketprice and other provision of services) will imply adeduction of the ERDF contribution in full or pro-rata (ifentirely or partly generated by the project);

For revenues generated after the project closure, theestimated net revenue must be deducted from the finalrequest for payment;

Until three years after the Programme closure, revenuespreviously not taken into account will have to berefunded.

2. Subsidy Contract

Terms of the Subsidy Contract

§ 14 Assignment, legal succession§ 15 Termination and repayment§ 16 Force majeure§ 17 Litigation

2. Subsidy Contract

Subsidy Contract annexes

1. Latest Application Form2. EU regulations3. Programme documents

2. Subsidy Contract

1. Communication to the Monitoring Committee on thefinalization of the negotiation process (after the fulfillmentof conditions).

2. Subsidy Contract offer (2 months duration) sent to the LP bythe MA via the JTS.

3. Signature of the Subsidy Contract by the LP.4. Signature of the Subsidy Contract by the MA.

The process

2. Partnership Agreement

Content of the Partnership Agreement

It rules the obligations of LP and PPs focusing on (among others): Budget flexibility within the partnership; Structure of the Steering Committee; Separate accounting system for project management; Internal procedure of reporting and ERDF reimbursement; Identification of First Level Controllers by each PP; Location of documents for each PP (storage and audit trail); Changes in the project (partnership, budget, activities,

duration); Budget managed by EU Partners outside CE (20% flexibility); Activities implemented outside EU territory (10% flexibility); Other obligations (e.g. State Aid if applicable).

Subsidy Contract Partnership Agreement

§ 1 Legal Framework Preamble

§ 3-9 Contract Duration § 3 Duration of the Agreement

§ 6-7 Obligations of the LP §5-6 Obligations of the LP and PP

§ 9 Validation of expenditureand audit of projects

§8 budgetary and financial management, accounting principle

…. ….

Content of the Programme template must be considered asthe minimum possible to be included in the PartnershipAgreement.

2. Partnership Agreement

Correspondence between SC and PA

2. Partnership Agreement

Partnership Agreement annexes

1. Latest Application Form2. Subsidy Contract3. Detailed work plan and timetable of activities per project

partner;4. Partners´ budget split per work package, budget line and

reporting period (template available on the Programme website).

2. Partnership Agreement

The process

1. PA signature can be: One document signed by the entire partnership; Bilateral agreements signed by the LP and each PP;

2. The signed PA is not to be sent to the MA/JTS, but evidenceof its signature by LP and all PPs must be provided;

3. The PA must be always updated in case of change of partner,activities and budget revision.

Lack of evidence of the signed PA will not allow the ERDFreimbursement;

The MA/JTS will check the content and proper signature ofthe PA on a sample basis (within on-the-spot checks).

3. Next steps

Projects to be started at the latest within 2 months after thesignature of the Subsidy Contract;

Installation of separate accounting systems by the LP and PPs; Identification of LP and PPs First Level Controllers in

accordance with national systems; Preparation of the PA according to the specific needs, using

the Programme template as minimum requirement; Submission of the Start-Up Report to the JTS at the latest 3

months after the contract signature, including evidence of thePA signature by all PPs;

Invite the JTS to your project Steering Committee meetings.

Projects to-dos

CENTRAL EUROPE PROGRAMME 2007-2013

THANK YOU!