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WF Guidelines for implementation Financial management

WF Guidelines for implementation Financial management. 12 February 2010, Delft Kick-off meeting. Content. Partners’ budget (overview, approach , templates) Sub-division of budget per budget lines Eligibility (rules, period, requirements) First level control Reporting procedure

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WF Guidelines for implementation Financial management

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  1. WFGuidelines for implementationFinancial management 12 February 2010, Delft Kick-off meeting

  2. Content • Partners’ budget (overview, approach, templates) • Sub-division of budget per budget lines • Eligibility (rules, period, requirements) • First level control • Reporting procedure • Payment procedure

  3. 1. Budget overview

  4. 1. Budget overview

  5. 1. Budget overview • Budget is a plan >< BUT! implementation is always changing slightly • Application phase: initial budget development • Start-up phase: conditions of approval set by the JTS >> modification of detailed budget as well > budgets per PP by CP, budget lines and reporting periods sent to PPs (and discussed individually if needed)

  6. 1. Budget overview • spending forecast - part of the Subsidy Contract (in a yearly breakdown) > has to be adhered to and taken seriously! • Taken very seriously by the JTS > this is what has to be fulfilled and will be checked strictly >> underspending is „the most serious crime” > decommitment rule >> may result in loss of funding

  7. 1. General characteristics of financial management • Time frame: 4-5 years from Application phase till project closure • Strict regulations on Programme level • Various country specific requirementsand their (frequent) changes • Prefinancing is needed from all PPs – can be as long as12 months! • Fluctuation of staff on PPs level • BIG CHALLENGE BUT GREAT EXPERIENCE • For future financial planning • For future project implementation

  8. 1. Financial planning - monitoring • In order to ensure a sound financial management for the project: • PPs are requested to provide (bi-)monthly internal reports to the LP (simple template provided by LP – checkinAnnex of theHandbook) onprecedingspendings and a forecast for the following month(s) • Based on this data > the LP is capable to follow & monitor the project’s actualfinancial status, to compare it with the AF & to propose measures in case of serious deviations

  9. 1. Budget flexibility Possible deviations & reallocations are laid down in the INTERREG IVC Programme Manual and the Subsidy Contract: Changes in budget lines, CP budgets and PP budgets are possible – as long as the maximum amount of funding (ERDF + Norwegian) awarded is not exceeded

  10. 1. Budget flexibility • 10% or 20,000 EUR flexibility: budget lines OR CP budgets OR PP budgets can be exceeded by • 10% • OR 20,000 EUR of the respective budget line OR CP budget OR PP budget – whichever is greater

  11. 1. Budget flexibility

  12. 1. Budget flexibility • The 20% budget modification: • Only once during the project and only in duly justified cases • Only upon prior approval from the JTS/MA • a reallocation can be made between budget lines, CPs and PPs up to 20% of the total budget = the increase to budget line / CP / PP’s budget can be maximum 20% of the total budget for each change

  13. 1. Budget flexibility

  14. 2. Budget by budget lines • Staff costs • Administration costs • Travel and accommodation • External expertise & services • Equipment

  15. 2. Staff costs • Definition: personnel costs of employed staff (including salary, tax, employer’s contribution for social secrurity, but not including voluntary contributions )- people beeing already on pay-roll or ad-hoc staff recruited and directly employed for the project by partner organisations • Calculation rules: on the basis of the actual salary rate stated in the regular employment contracts, pay-roll figures • Important administration rule: staff involved in and payed from the project needs to have job description including tasks related to WF project • Appears in all CPs – depending on the activities carried out and reported

  16. 2. Administration costs • Definition:all direct general costs (costs deriving exclusively from the project) and indirect general costs (overheads related to the project’s activities, based on real costs and calculated on a pro data basis) • Administration costs items: stationary, photocopying, mailing, office rent, telephone, internet, heating, electricity, bank charges etc.

  17. 2. Travel and accommodation • Definition: travel and accomodation costs and allowances of partners’ staff related to their participation in meetings, visits etc. • External experts’ travel costs are budgeted under „external expertise” budget line!

  18. 2. External expertise & services • Definition: Costs paid to external service providers on the basis of contracts and against invoices • Budget for external expertise: under the specific CPs in the budget line „External expertise” (see for details justification part in AF budget) • Only budgeted external expertise can be procured (public procurement applies!)

  19. 2. Equipment • Definition: purchase of equipment necessary for the project • Public procurement rules have to be respected • Has not been planned for WF! (details should have been given in AF)

  20. 2. Supporting documentation • Staff costs: timesheets, internal monthly salary statements, work contracts, position descriptions, statement on calculation method, bank transfer of payment of salary and related social charges • Administration costs: utilities, renting invoice/contract, possible calculation methods: staff number / sq meter / working hours, statement on calculation method • Travel & Accommodation: tickets, boarding cards, travel diary, internal documentation linked to travel (e.g. travel permit, other official statements) • External expertise: procurement documentation, contract/order form, delivery statements, invoice, bank transfer certificate, tangible output of delivery of the service (study, brochure, etc.)

  21. 3. Eligibilityrules • Only eligible expenditures meeting the following criteria can be funded under the INTERREG IVC Programme: • Expenditure must be linked & related to the respective partner budget and project activity (AF, progress report) • Only paid invoices can be claimed • All expenditure must be supported by evidence (invoices to the partner’s name, accounting documents, etc) • Expenditures incurred and paid within the project’s implementation period (from start to end date fixed in Subsidy Contract)

  22. 3. Eligibility period • Preparation phase: until 31.01.2009Costs must relate exclusively to preparation activities and must be claimed in first progress report(staff, travel, external) • eligibility period start: 05.11.2009 (decision of MC) • Project implementation phase: 01.01.2010- 31.12.2012

  23. 3. General eligibility requirements • Double funding is not allowed • VAT is not eligible unless it is definitely borne by the partner and it is not recoverable by the partner >> if eligible cost for the PP >> the PP’s budget is gross! • Charges for international transactions (bank costs) are eligible (mostly affects LP) • Interest on debt, fines, financial penalties, foreign exchange losses etc. are not eligible

  24. 3. Specific country relatedEligibilityRequirements • PPs must be familiar with national rules relevant to their project • If national standards are more demanding than EU rules, the stronger must be applied • PPs are advised to consult their first level controller to get familiar with specific requirements to be met as soon as possible • Public procurement rules must be respected

  25. 3. Public procurement • National regulations apply (may be stronger than programme requirements!) • Fundamental principles to keep in mind: • Be familiar with national public procurement regulations and/or involve a public procurement expert if needed • Be aware of the length of time needed for public procurement procedures (plan it when preparing your own implementation plans) • Ensure transparency of the whole public procurement process – full documentation (has to be available for financial control & audit purposes) • Content of procured activity (TOR) must be fully in line with activities in the AF.

  26. 3. Expenditurereporting ispossibleif: • Calculations are based on actual costs • Costs are borne by the PP organisation • Expenditure has been paid out ( debited from the partner’s bank account – date of payment) • Expenditure is directly linked to the project partner’s budget

  27. 4. First Level Control (FLC) • Each partner’s partner level reports have to be verified by the respective FLC body (centralized or decentralized) • Aim: to control that costs co-financed under the INTERREG IVC Programme are in line with legal and financial provisions of the Subsidy Contract and with the relevant national laws • The role of FLC: administrative, financial and eligibility check of the project’s implementation on partner level

  28. 4. First Level Control Centralized systems • Hungary • Latvia • Poland • Sweden • Northern Ireland Decentralized systems • The Netherlands • UK • Finland • France • Italy • Spain • Norway

  29. 4. First Level Control – basic tasks for PPs • Identify, contact ASAP and keep in continuous contact with yourFLC – in case of decentralized systems: start the approbation procedure ASAP • Read and follow the regulations released (and modified) by your FLC • Have personal consultations before the submission of each Partner Report (but definitely before the 1st one!) • Fulfil the reporting and clarification requirements of your FLC always without delay

  30. 5. ProgressReporting: procedure (1) • Reporting periods: calendar half-years (1 January- 30June AND 1 July – 31December)

  31. 5. ProgressReporting: procedure (2) STEP 1: Partner level reports • submitted by all PPs to their first level controllers • Validation process • Output: 16 control confirmations in each reporting period

  32. 5. Progress Reporting: procedure (2) STEP 2: Progress report • PPs send an internal PP ProgressReport (=simplifiedtemplate) tothe LP toprovidethemdataforpreparingthejointProgressReport • PPs send their controlconfirmationsinoriginal to LP within max 15 days before deadline of the Progress Report submission • LP submitsthejointProgressReporttoits FLC forcounterchecking • LP submitstheProgressReporttothe JTS • LP – ifneeded, withtheinvolvement of PPs – fulfilsclarificationsrequirementsofthe JTS

  33. 5. Reporting: documents to be submitted (3) Documents to be submitted together with the Progress Report by the LP: • Original copies of all PPs’ control confirmations (released by FLC) • Bank statements confirming the transfer of the reimbursed ERDF funds transferred from LP to PPs (from the 2nd report onwards) • 3 copies of each project communication material (brochure, newsletters etc.)

  34. 6. Payment procedure

  35. Thankyouforyourattention!

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