The Grant Contract

Technical Assistance for Civil Society OrganisationsRegional Office

This project is funded by the European Union

Regional Training on 'Development & Management of EU-funded Projects', Istanbul March 2010

The Grant Contract

Key Aspects of the Contract and some

common misconceptions



A reminder of the characteristics of a ‘grant’

• A payment of a non-commercial nature by the Contracting Authority to a specific beneficiary to implement an action intended to help achieve an objective forming part of a European Union policy

• But it is not a gift!!!• Funds support activities of the beneficiary• Funds cover only eligible incurred costs• All the conditionality of the grant award is set out in the

Grant Contract




Thus, we need to have a clear understanding of the Grant Contractand of ‘PRAG’,

the guidelines which determine the way in which EU funds are spent outside of the EU




What is PRAG ?

The Practical Guidelines for contractual/procurement procedures involving EU funds for external assistance is

commonly known as PRAG.

PRAG guides how we can spend EU funds and how we need to be accountable, transparent & fair, and get the ‘best value’.

Therefore, it’s a key tool in project implementation. The essential parts of PRAG that relate to procurement under

grant contracts are often summarised in Grant Implementation Manuals




Why PRAG can be a challenge for CSOs

• CSOs are not generally structured to manage Public Funds and often have weak capacity for managing finances

• The language of PRAG is not always easy to understand• As PRAG offers ‘guidelines’ rather than ‘rules’, different

stakeholders may interpret aspects of the guidelines in different ways

BUT, these challenges must be overcome, otherwise CSOs may be in danger of not having all their grant-project costs recovered




Parts of the Grant Contract


Special ConditionsAnnex I : Description of the Action Annex II : General ConditionsAnnex III : Budget for the Action Annex IV : Contract-award Procedures Annex V: Standard Request for Payment, Financial

Identification Form Annex VI : Template for Reports Annex VII: Expenditure Verification Report




Annex I : Description of the Action Description of the action contains the description of the grant beneficiaries project. May need revisions on application formNo major changes to the applicationCheck translation




Annex II : General ConditionsGeneral conditions specify the general obligations and financial provisions under the contract. ReportingLiability of PartiesVisibility of ProjectsOwnership of the EquipmentsEvaluation/MonitoringContract AmmendmentsEligible costsExtension, Suspension, Termination of ProjectsPayment MethodsAnd other legal issues




Annex III : Budget Budget is a breakdown of all eligible project related costs. It is important to have a clear, and easy to understand budget attached to the contract as it directly impacts smooth implementation of the project. Estimate Only!!! Final disbursement will depend upon project outputs




Annex IV: Contract Award Procedures

Simplified procedures of service, works and supply tenders, for more information PRAG.

Annex V: Standard Request for Payment and FIF

BEST PRACTICE: Encourage grant beneficiary to submit this annex ASAP and manage this process efficiently

Annex VI: Template for Reports

Annex VII: Expenditure Verification



Managing the Contract

Managing the grant contract should be an integrated part of the overall project management

Pay special attention to:Making any changes to the contract

Procurement of any goods/services above 10,000 eurosKeeping records & reporting




Modifying the Contract


Minor ChangesChanges in activities or budget that do

not affect the basic purpose of the project

Transfer between budget headings involving a variation of 15% or less

Changes of address or phone numberChanges of bank accountChange of project manager or key

expertsChanges to HR unit rates

Major Changes– Significant changes in activities

affecting the basic purpose and indicators of the project

– Transfer amongst budget headings outside the limits of minor modification (15%)

– Addition of a new budget line or spending zero against a budget line

– Change of Project partners– Extension of Contract– Changes in grant beneficiary status or

name



Making major changes to the contract should be handled carefully, and, if

possible, avoided!




Procurement

All stakeholders engaged in an EU-funded project take on the responsibility of managing Public Funds. To help fulfil these responsibilities, the EC provides PRAG. Thus, Grant Beneficiaries MUST:

Use the models published on the Commission’s web site, relating to external actions

Ensure time-limits for receipt of tenders and requests to participate must be long enough to allow reasonable and appropriate period to prepare and submit tenders

Allow requests to participate and tenders declared as satisfying the requirements to be evaluated and ranked by an Evaluation Committee




Procurement:Be aware of what PRAG says about


Rule of Origin

Country of Origin

Derogation

Grounds for Exclusion

Conflicts of Interest

Retroactivity

Fair competition



Service Contracts Supply Contracts Works ContractsContracts of €150.000 or moreInternational open tender procedure

Contracts of €5.000.000 of more International open tender procedure

Contracts of €200.000 or moreInternational restricted tender procedure

Contracts between €60.000 and €150.000Local open tender procedure

Contracts between €300.000 and €5.000.000Local open tender procedure

Contracts under €200.000 but more than €10.000Framework contractsCompetitive negotiated procedure(Beneficiary consults at least 3 service providers)

Contracts under €60.000 but more than €10.000Competitive negotiated procedure (Beneficiary consults at least 3 service providers)

Contracts under €300.000 but more than €10.000Competitive negotiated procedure (Beneficiary consults at least 3 contractors)

Contracts with a value of €10.000 or lessSingle tender






Good practice in Project Management is to draft

a Procurement Plan

along side the overall Project Work Plan and Budget




Keeping Records & ReportingDuring the implementation period Grant Beneficiaries need to

a) Manage their own internal monitoring and administration of the project

b) Facilitate external monitoring of the project and provide obligatory reports to the Contracting Authority

Thus, systems must be in place to ensure that there is compliance to the Contract and PRAG,

And management of data to help show progress (or otherwise) towards the project’s objectives




Below is a list of some of the questions that an external project monitor may want answers to:

Were the correct procedures used for the tender value?Are the equipment/supplies there?Is it being used for the purpose it was intended?Do the serial numbers match the invoice?Is the EU being given appropriate visibility?What will happen at the end of the project?Check for a list of equipment.


Keeping Records & Reporting




Keeping Records & ReportingObligatory Technical Reports (Interim & Final)

Information on progress of activities;

Information on Project/Programme results;

Information on programme/ project impact;

Follows the structure of the reporting template.

Description of Activities;

If any modifications have occurred should be well documented and justified!

Detailed description of projects achieved;

Level of achievement of the project stated objectives;

May include annexes.



Keeping Records & Reporting: Obligatory Financial Reports (usually ‘Final’ only)

Financial Reports include:

Project costs

In table format which are standardised;

Copies of supporting documents are requested;

Copies of Time-sheets.

Checking of financial reports against the contract and the supporting documentation:

Eligible expenditureConsistent with applicationCorrect exchange rates being

usedAppropriate supporting

documentationVAT is not includedSignificant deviance from

planned expenditure





For Human ResourcesTerm of reference/job profileTimesheetsCopies of the outputs Activities reports

For TravelTickets (paper tickets and boarding passes)Any other proofs

For Trainings A detailed description of the training – training

modules, training hours per subject, methods, etc.

Training scheduleList of participants /Attendance sheetsList of trainers / lecturersFeed-back questionnairesTraining evaluation report

For Surveys /studies Detailed description of the methodologyReports

For Publications – Copies of publications – Distribution lists

For Seminars, working meetings – Programme – List of presentations / conference reports– Handouts– List of participants– List of speakers– Minutes (if applicable)– Press clippings– Feed-back questionnaires (if applicable)

For Supplies/Works– Invitation to tender (all documentation) – All offers received – Tender Opening Report– Administrative Compliance Grid – Technical Evaluation Grid – Evaluation Report – Shipping bills

Keeping Records & Reporting: Supporting Documents



Monitoring-Evaluation-Audit




Approaches to Monitoring & Evaluation


The Spectrum of Approaches

Technocratic Pluralist

Scientific approach Mixed perspectives Objectivity Non-neutralStandardisation Non-standardJudgemental / Managerial Facilitates learning

& further dialogue

The Grant Contract

Documents

Transcript of The Grant Contract