The Project Financial Management Selection 2012

1. The Project Financial ManagementSelection 2012

2. Main Documents • The most important documents concerning financial management are: • The Draft Financial Manual produced by the European Commission • The Agreement with the Commission Directorate – General Justice (Financial Provisions) • The Agreement between the promoter and the project partner • The Guidelines for Applicants (Financial Provisions)

3. General Remarks

4. VAT VAT may be considered an admissible cost ONLY if the institution can demonstrate they are NOT able to recover it. Each partner will therefore have to make a specific declaration on this issue. VAT paid by public bodies is not an eligible cost

5. Expenditures For any cost which is NOT included in the official budget of the project, it is NECESSARY to ask authorisation to the promoter and to the European Commission.

6. Accountancy All cost must be registered in the internal accountancy system of the institution. All transactions in the project implementation period relating to actual expenditure/income under the project must be recorded systematically in the beneficiary accounts, using a numbering system specific to each European project.

7. Documents The Commission may request supporting documents (some or all), such as invoices, contracts of employment, pay slips, receipts, purchase order, etc that the coordinator has used to compile the statement of expenses (including those of co-beneficiaries). Only copies of supporting documents should be sent. All original documents must be kept by the coordinator or co-beneficiaries during five years from the date of final payment.

8. Type of Costs The Project budget is divided into: • Direct Costs: • A - Staff • B - Travel • E - Other direct costs • F - Indirect Costs • Communication costs • Infrastructure costs (rent, electricity etc) • Photocopying • Office supplies • G - Contribution in kind

9. Eligible Expenditures

10. Eligible Costs To be considered as eligible costs, the expenditures should be: • Related to activities involving Justice Programme eligible countries • Made during the project life cycle (1/11/2012 – 31/10/2014) • Directly connected with the carrying out of the approved activities • Reasonable and respect a sound financial management • Actually incurred by the partner and recorded in their accounts • Identifiable and verifiable (i.e. justified with appropriate accounting documents) • Conform to the rules set out in the Manual for Financial Management • Foreseen in the project budget • Comply with the requirements of applicable National tax and social legislation

11. IneligibleExpenditure The following costs are not eligible and therefore should not be included in any of the expenses categories. • Costs related to opening and operating bank accounts • Debt services charges • Exchange losses • Expenditure that is already funded by other Community sources • Excessive expenditure • Cost of buy out option at the end of lease periods • Fines, financial amendments and legal costs.   • Travel and subsistence fees for EU officials • Expenditure incurred outside the eligibility period;

12. Managing Expenditure

13. Financial Report In order to justify the project expenditures each partners should fill in the Financial Report Form and enclose the required documents Financial Report Form

14. Staff Cost – Heading A

15. Staff Costs Rules 1/6 • These costs can include the following categories of staff: • Staff having a permanent contract with the partner • Staff having a temporary employment contract with the partner • Non-permanent staff may be charged to Staff category if the individual works with a contract or individual sub-contract explicitly linking the person to the project and provided that such practice complies with the relevant national legislation. 15

16. Staff Costs Rules 2/6 • The reported staff members must respect what was planned in the approved budget. • For any change in the name of the people to be reported please inform the project promoter that will ask for authorisation the European Commission. 16

17. Staff Costs Rules 3/6 • For public bodies the Staff Costs are eligible only if the employees whose cost is reported, carry out activities that they would not perform if the project concerned was not been undertaken: • To demonstrate the above, the costs must be related to: • 1) Remuneration for overtime work • 2) Costs for staff that need to be replaced by hiring a new employee • Other permanent staff cost • In all cases Staff of a public organisation will be considered eligible within the limit of the amount necessary to co-finance the project. 17

18. Staff Costs Rules 4/6 Staff costs should be calculated on the basis of the real hourly cost rate of the employee concerned, multiplied by the number of hours dedicated to the project as from Time Cards. The real hourly cost rate should be calculated dividing the yearly gross cost the employer pays for the employee by the number of working hours of the employee. Gross cost calculation should include all the normal contributions paid by the employee, for example social security, while bonuses, incentives or profit share schemes should be excluded.

19. Staff Costs Rules5/6 Staff costs within each partner organisation should NOT EXCEED THE USUAL rates corresponding the usual internal policy on remuneration. Internal policy means the policy that was in place before the implementation of the project and used for all staff members no matter if they work on the EU project or not. 19

20. Staff Costs Rules6/6 Staff costs must be related to the work carried out specifically for the Project. For Public Bodies a declaration is needed so as to state that the Staff costs claimed are related to activities that the institution would not carry out if the project concerned was not undertaken. The proof of payment of overtime work or of employee replacing staff must be provided 20

21. Staff Enclosures 1/9 • Staff costs should be justified using: • Document explaining the internal policy on salaries • Employment contracts • Employment Letter related to the project • Detailed description of the method of calculation of the daily cost rate • Table summarising the person cost accounted on the project • Personal Time card • Payslips • Bank statements of payments made • Examples: • 01 A Staff Costs Enclosures

22. Staff Enclosures 2/9 Document explaining the internal policy on salaries The document, signed by the accounting manager, should outline the internal policy on salaries of the partner institution for all staff members no matter if they work on the EU project or not. Example: 01 B Internal Policy Salaries Example 22

23. Staff Enclosures 3/9 Employment Contract It is the General Contract that has been signed between the project partner institution and the employee. For non-permanent Staff the contract should explicitly link the person to the project provided. The contract should make specific reference to the project and indicate the tasks of the employee, the duration of the employment, the time allocated to the project and the relevant remuneration rate 23

24. Staff Enclosures 4/9 Employment Letter related to the project The employment letter should be provided for each permanent employee reported in the Staff category. The specific employment letter should formalise the employee role within the project and the related activities to be carried out. Example: 01 C Employment letter 24

25. Staff Enclosures 5/9 Detailed description of the method of calculation of the hourly cost rate The description of the method of calculation should be provided for each employee reported in the Staff category. The description should give evidence to the method and related figures with which the hourly cost rate was calculated starting from the yearly cost for the employer. Example: 01 D Description of Method of Calculation 25

26. Staff Enclosures 6/9 Table summarising the person cost accounted on the project The Table should be provided for each employee reported in the Staff category. The table will give evidence to the figures related to the cost of the employee starting from the issued payslips. Example: 01 E Summary Table 26

27. Staff Enclosures 7/9 • Personal Time Card • For each employee who has worked on the project the following information should be collected and submitted on a personal Time Card filled in on a monthly basis: • - Name of the employee • Role in the project • Daily cost rate paid by the employer for the employee • Amount of time spent on the project by the employee • Reported cost of the employee (daily cost rate x days worked on the project) • Activities carried out for EACH day worked on the project • Example: • 01 F Time Card Example • 01 G Time Card Model

28. Staff Enclosures 8/9 Payslips For each employee who has worked on the project, all the monthly payslips related to the project period must be provided. The figures reported on the payslips must allow to verify the consistency of the calculation of the Daily cost rate. Example: 01 H Payslip Example 28

29. Staff Enclosures 9/9 • Proof of payments • For each employee who has worked on the project the proof of payments (i.e. Bank statements) of the Net earned and of all the social security taxes must be provided. • The figures reported on the proof of payments must allow to verify the consistency of the calculation of the Daily cost rate. 29

30. Staff Enclosures 01 A Staff Costs Enclosures 01 B Internal Policy Salaries Example 01 C Employment letter 01 D Description of Method of Calculation 01 E Summary Table 01 F Time Card Example 01 G Time Card Model 01 H Payslip Example

31. Staff Final Check • Before submitting the financial report please check that: • You filled in the Financial Form with a line for each person providing all requested information • Each cost described in the report is supported by the related accountancy documents • For EACH staff member you have enclosed: Document explaining the internal policy on salaries Declaration explaining the calculation of the daily cost rate. calculation of the hourly cost rate, Personal timecard duly filled in and signed; Payslips ; Employment contracts; employment letter related to the project; Bank statements of payments made, Table summarising yearly gross cost used to calculate reported real daily cost. • There is not mixing up between staff costs and subcontracting costs

32. Travel – Heading B

33. Travel 1/5 Travel costs are eligible only if they are directly connected to specific project related activities. Travel costs should be related only to staff (therefore the names of travellers should be consistent with the names included in the “Staff” budget heading). Non staff members should be accounted for under the “Other Costs” or “Subcontracting Costs” budget headings.

34. Travel 2/5 Partners are required to choose the cheapest mean of travel, where this is not the case a full explanation should be provided.

35. Travel 3/5 Expenditures for travel by car are eligible but must be calculated on the basis of the following criteria (whichever is the cheapest): a) The cost of the correspondent rail/bus/plane fare ticket. Only ONE ticket shall be reimbursed regardless of the number of people who travel in the car b)  A rate per Km in accordance with the internal rules of the partner concerned up to a maximum of 0,22 euro per km (e.g. including Highway tolls etc.).

36. Travel 4/5 Hire of cars (maximum class B car may be used) or taxi costs are eligible only if there are other influencing factors (e.g. time, excessive luggage, no other transport available etc.). Influencing factors must be described through a specific declaration. In case a taxi is needed it is necessary to mark on the receipt the date and the place of departure and destination. A declaration motivating the use of the Taxi must be produced (e.g. Early departure, heavy luggage etc.)

37. Travel 5/5 • Travel costs should be justified using: • Detailed Expenditure sheet for each person , each enclosing: • Invoices of Travel Agency • Plane/Train/Bus ticket • For planes: Boarding Card (N.B. Without Boarding cards Plane cost is not eligible) • For car journeys: declaration stating the calculation method with unit rate and number of units, dates and names and activities concerned; • Invoice of Car Rental Company • Taxi receipts (plus declaration motivating the use of the Taxi) • Proof that the payments have been made by the partner and are recorded in the accountancy • List of participants duly signed with clear identification of the purpose of the trip, dates, name and functions of the participants in the project • N.B. All documents enclosed should be translated into English and converted into Euro (use the official rate of the project)

38. Subsistence 1/9 Subsistence costs include: - Accommodation (hotel invoice) - Meals (breakfast, lunch and dinners. No extras) - Local travels (excluding those to travel from the point of origin to the destination)

39. Subsistence 2/9 Subsistence costs are admissible as long as they: · Are necessary and reasonable · Do not exceed the maximum daily amount per person in the destination country

40. Subsistence 3/9 • Reimbursement of subsistence costs may be made on the basis of the internal policy of the Partner organisation, and therefore on the basis either of: • Actual costs (reimbursement of receipts) • Daily Allowance basis • N.B. Internal policy means the policy that was in place before the implementation of the project and used for all Travels no matter if they are related to the EU project or not • N.B. In both cases, proof of attendance and of overnight accommodation is required • Subsistence costs should be related only to staff. Non staff members should be accounted for under the “Other Costs” or “Subcontracting Costs” budget headings.

41. Subsistence 4/9 The system of per diem for reimbursement of subsistence costs can be used only if it can be demonstrated that such a system was officially in place before the grant was awarded. In this case the amount of per diem should follow the normal practice of the organisation and the limit per country set in the Commission’s guide http://ec.europa.eu/europeaid/work/procedures/implementation/per_diems/index_en.htm cannot be exceeded

42. Subsistence 5/9 Table published in July 2012 (to be updated in December)

43. Subsistence 6/9 The costs indicated in the tables available at the link indicated in the previous slide include all the costs connected with the country in question. Where there is no overnight stay the costs are reduced by 50%. The maximum number of days that can be claimed is the number of working days + 1.

44. Subsistence 7/9 If a partner hosting a project meeting pays for a social meal, the cost will have to be divided, by the project promoter, among each of the other partners at the interim/final report stage. The rate paid by the hosting partner will be deducted from each of the partners Budget.

45. Subsistence 8/9 • Possible examples of not eligible subsistence costs: • Mini bar in the hotel • Snacks and drinks (unless they are part of a main meal) • Bar costs (unless it is for breakfast) • Telephone costs in the hotel

46. Subsistence 9/9 • Subsistence costs should be justified using: • Detailed Expenditure sheet for each person enclosing: • Declaration for Daily Allowance + Hotel Invoices • Or • Reimbursement Sheet enclosing: • Restaurant Invoices • Hotel Invoice • Bus ticket • Taxi receipt • Proof that the payments have been made by the partner and are recorded in the accountancy (Payment in Cash MUST be avoided • N.B. All documents enclosed should be translated into English and converted into Euro, (use the official one for the project)

47. Travel and subsistence Final Check • Before submitting the financial report please check that: • Each cost described in the report is supported by the related accountancy documents • Each person travelling is enclosed in the staff costs budget line • For EACH staff member you have enclosed a specific expenditure sheet • The subsistence cost per day for each country is below the maximum ceiling also taking into account the 50% off related to the last day of stay. • The subsistence cost ceiling is reduced if the hosting partner covered the cost for the lunch / dinner. • For EACH staff member you have enclosed a specific expenditure sheet including : flight tickets, coarding cards, hotel invoices; restaurants receipts, taxi tickets etc. NB Expenditure sheets for more than one person are not accepted. • All documents enclosed should be translated into English and converted into Euro, specifying the currency conversion rate applied (use the official EU one) 47

48. Travel and Subsistence Enclosures 02 A Travel and Subsistence Costs Enclosures 02 B Travel and Subsistence Expenditure Sheet Model 02 C Travel and Subsistence Daily Allowance 02 D Travel Daily Allowance receipt Pixel 48 48

49. Other Costs – Heading E

50. Othercosts 1/5 Other costs which are not included in the previously mentioned categories may also be considered admissible, as long as they: Are necessary for the project activities Are for a reasonable sum of money Are justified with suitable administrative documents Are not included in any other cost category