Interreg III B Northern Periphery Programme

1. Interreg III B Northern Periphery Programme First Project Leaders’ Seminar Inverness 8 November 2002

2. Working in PartnershipLead Partner Responsibilities • Bear the overall finanancial and legal responsibility of the whole project • Ensure the co-ordination and day-to-day management of the project • Prepare the contracts and reference terms for sub-contracting, monitor agreements e.g. Partnership agreement between project partners • Communicate with the partners !

3. Working in PartnershipLead Partner Responsibilities • Managethe team responsible for administrative and financial matters, bookkeeping, verification of accounting records • Organize the project’s participation in inter-network activities • Maintain dialogue with the Northern Periphery Programme Secretariat • Hostand organize possible visits to the project sitesby representatives of the JPS, MA & PA , project coordinators, other experts etc. • Inform about the project & disseminate the project results.

4. Carry out the measures in his/her respective area according to the application and the partnership agreement Follow the conditions, rules and regulations provided by the Lead Partner Follow the eligible budget and expenditure targets Keep up with the time schedule Ensure and organize a separate project account in the accountancy Communicate with the Lead Partner, colleagues and the other partners Frequently report to the Lead Partner Organize an audit of the costs by an independent authorised auditor once a year Inform about the project and disseminate the project results Working in PartnershipPartner’s Responsibilities

5. We all aim to avoid this....

6. Project Administration:Reporting Procedures & Requirements Progress reports • The project leader is to draw up a progress report and application for payment every six (6) months • Reporting periods: To be reported by: • 1 January – 30 June 31 August • 1 July – 31 December 28 February

7. Project Administration:Reporting Procedures & Requirements Final report/Preparatory Project report • The project leader is to draw up a final report summarising the activities and results of the whole project • Final Certificate of expenditure and Application for payment (supported by financial package) • No later than 3 months after completion of project

8. Project Administration:Reporting Procedures & Requirements Reporting documents (1) • Progress report including Certificate of Expenditure and Application for Payment • Financial reporting: All partners: • Timesheets • Entries – Financial Reporting Summary and Summary of Exchange Rates (by Partner) • Copy of ledger from separate accounts (1st time only) • Independent Authorised Auditor’s statement (annually)

9. Project Administration:Reporting Procedures & Requirements Reporting Documents (2) • Financial reporting (cont.) Lead Partner: • Summary of Exchange Rates (aggregated) • Financial Reporting Summary (aggregated) • Monitoring Tables of Budgetary Commitments • Independent Authorised Auditor’s statement (annually)

11. Project Administration:Reporting Procedures & Requirements Keep in mind when reporting: • Please make sure documents correspond • Include examples of information material • Indicate right to alleviate VAT • Only include VAT when non-recoverable • Keep in line with annual spending targets

12. Project Administration:Reporting Procedures & Requirements Other Reporting • The Lead Partner should report to the NPP Secretariat in case of: • difficulty of a technical nature • problems or delays (annual spending targets) • need for adjustments in project

13. Project Payments & Financial Control: How to Receive NPP Funding Payments • Payments will be made in EUR • Payments will be made retrospectively against actual expenditure paid out • National co-financing paid out • Applications for payments should be sent to the NPP Secretariat with the six-monthly progress reports/final report

14. Project Payments & Financial Control: How to Receive NPP Funding Every application for payment must include at least the following: • A certificate of total expenditure paid out and an application for payment • Monitoring Tables of Budgetary Commitments (MTBCs) showing the state of total expenditure, EU-expenditure and Non-Member State expenditure, broken down by category • Financial Reporting Summarysupporting the MTBCs • Summary of Exchange Ratesdetailing the rates used • Entriesdetailing each partner’s expenditure

15. Project Payments & Financial Control: How to Receive NPP Funding Application for payment must also include: • Copies of ledgers from separate accounts (1st time only) • Timesheets – when project includes ”own work” • Independent Authorised Auditor’s statements (annually)

16. Project Payments & Financial Control: How to Receive NPP Funding Payment Procedure (1) • The Lead Partner submits a joint Application for Payments to the NPP Secretariat • The NPP Secretariat checks the Application for payment, and if necessary, asks for more information • When complete and assessed, the NPP Secretariat sends the Application for payment to the Managing and Paying Authority with a recommendation for payment

17. Project Payments & Financial Control: How to Receive NPP Funding Payment Procedure (2) • The conformity with financial regulations and requirements are controlled by the Paying Authority • The Paying Authority issues a payment to the Lead Partner • The Lead Partner distributes the payment among partners

18. Project Payments & Financial Control: How to Receive NPP Funding • FINANCIAL CONTROL • 438/2001 Art. 10 ”5 % -control” • 5 % of eligible expenditure • representative sample • ”professional” independent auditors • 438/2001 Art. 4 ”on-the-spot checks” • verify delivery of products and services • verify the reality of expenditure • MA/PA/JPS

19. Project Accounts & Budgets: How to Manage Project Finances PROJECT ACCOUNTS • The Lead Partners and Partners must keep separate project accounts in national currencies as well as in EUROs • The accounting system must ensure the posting of all expenditures and revenues related to the project • Expenditures must be entered into the accounts and paid before they can be claimed • The Lead Partner keeps the overall accounts or (consolidated accounts) for the project and reports bi-annually to the NPP secretariat • All expenditures and revenuesmust be postedand detailed in bi-annual progress reports • Expenditures that are charged to the project must occur in the given project period

20. Project Accounts & Budgets: How to Manage Project Finances PROJECT ACCOUNTS • The end year progress report should include an independent authorised auditor’s statement supported with a signed and audited MTBC’s • The Lead isresponsible for the overall project accounts • It is also necessary that separate project accounts be organised and maintained at the partner level by each partners’ project coordinator

21. Project Accounts & Budgets: How to Manage Project Finances SUPPORTING DOCUMENTATION & PRESERVATION OF SUPPORTING DOCUMENTS • The Lead Partner must receive copies of all supporting documents relating to project accounts. i.e receipts, rental agreements, service contracts etc • It is the responsibility of each partner to send copies of supporting documents to their Lead Partner • Supporting documents are to be archived and preserved for ten years in the office’s of the leadpartner • The Lead Partner must preserve copies of all supporting documents in the case of an audit • Supporting documents must also be archived and preserved for the same length of time in the officesofproject partners in the case of an audit

22. Project Accounts & Budgets: How to Manage Project Finances WHO CAN AUDIT YOUR ACCOUNTS? • Representatives for the Managing Authority, Paying Authority and the Northern Periphery Programme Secretariat • Representatives from the Programme Monitoring Committee and the national auditors • Representatives from the European Commission and the European Court of Auditors • All are entitled to examine a project’s relevant documentation and accounts of theproject up to ten years after the final payment of their grant • At any time during the project period on-the-spot checks may take place

23. Project Accounts & Budgets: How to Manage Project Finances • All expenditures are regulated through Commission Regulation (EC)No.1685/2000 regardingeligibility of expenditures of operations co-financed by the Structural Funds • NPP Datasheets 4 and Practical guide for project management • The budget has eight expenditure categories: • External experts and consultancy fees • Staff costs including social contributions • Travel costs and subsistence • General costs • Promotions and publications • Meetings, conferences and seminars • Equipment • Other costs • Budgets are expected to be divided by Non-member states and Member states

24. Project Accounts & Budgets: How to Manage Project Finances Changes to a budget • Any amendment to a project’s budget greater than 20 000 EURor 15% of an expenditure item that does not increase the overall budget requires approval from the Programme Monitoring Committee acting as Steering Committee.Any thing less is considered a minor amendment • If any amendments to a project are planned, the Northern Periphery Programme Secretariat must be notified immediately • If the ERDF-funding is not spent within three years from the year it is committed (N+2) the unspent funding is automatically decommitted by the Commission • All projects mustmeet their spending targets Partner agreement • Remember your partnership agreement and what was agreed to

25. Project Accounts & Budgets: How to Manage Project Finances PITFALL AVOIDANCE • Always contact the Northern Programme Secreatariat if in any doubt • Thoroughly study The Practical Guide for Project Management and Datasheet 4 • Pay your bills earlier rather than later • Remember when budgeting, the ” N + 2 RULE ” • Budgetary changes do happen – Don’t be shy call us

26. Eligible Expenditure: What Can We Claim? EXTERNAL EXPERTS and CONSULTANCY FEES (Subcontractors charges) • Costs for work done by an independent consultant or expert are eligible if the work is essential to the project and the costs are reasonable. The recommended max. rate for a senior consultant is 600-700 €/day.Note that the hiring of consultants is subject to public tender regulations STAFFING COSTS • Staffing costs; salary, taxes and social contributions, are considered eligible for personnel directly engaged on the project where the applicant can clearly demonstrate that the personnel concerned are working with additional tasks. Expenditure by public administrations is eligible if it relates to the execution of an operation provided that it does not arise from the statutory responsibilities of the public authority or the authority's day-to-day management, monitoring and control tasks

27. Eligible Expenditure: What Can We Claim? TRAVEL COSTS and SUBSISTENCE • Travel costs must be directly related to and essential for the effective delivery of the project GENERAL COSTS • General costs includepremises, which must be additional & related solely to the project,postage, telephone, faxand office supplies • Overhead costs are considered as eligible provided that they are based on real costs directly related to the project. The OH costs should be allocated pro rata according to a justified and fair equitable method

28. Eligible Expenditure: What Can We Claim? PROMOTION and PUBLICATIONS • may include costs related topromotion and publications specific to the project such as:design and production of marketing materials, brochures and publications as well as targeted advertising campaigns MEETINGS, CONFERENCES and SEMINARS • may include costs related to aspects of organisingof andparticipating in meetings and seminars, such asrent of premises used, catering, general transportation

29. Eligible Expenditure: What Can We Claim? EQUIPMENT • Only equipment, which is essential for the delivery of the project, which will be used solely for that purpose and has been purchased from third parties within the eligible time period • Depreciation of owned equipment: • the cost and description of the item purchased • the purchase date; the number of years over which the item is being depreciated (this must be a minimum of 3 years) • the % of the item use devoted solely to the ERDF project, over the life of the item OTHER COSTS • Other eligible costs clearly needed and relevant to the project. The costs must be specified and justified

30. Eligible Expenditure: What Can We Claim? INELIGIBLE COSTS • Loan charges • VAT which is legally recoverably • Any costs born beyond the eligible project period • Costs prior to the official start date • Costs resulting from the deferral of payments to creditors • Legal costs in respect of litigation • Costs involved in winding up a company •  Payments into private pension schemes • Compensation for loss of office

31. Eligible Expenditure: What Can We Claim? INELIGIBLE COSTS • Bad debts • Gifts • Costs of works being carried out as a statutory requirement • Costs of public administration staff engaged in their usual duties of managing, monitoring and inspection as commissioners of projects undertaken by other bodies • Daily allowances for those benefiting from certain measures taken under the project (e.g. participation in seminars, training, publicity visits, study trips) • Exchange rate losses whether they are related to sums collected as NPP assistance, movements of funds between project partners, payment of suppliers and service providers •  Overtime pay

32. Information & Publicity Requirements: EU Legislation Why, what, who & where? Fiona Reid Highlands & Islands Enterprise Scottish Regional Contact Point

33. Information & Publicity Requirements: EU Legislation Why? • It’s a condition of grant and also in the regulations (see Datasheet 8) • aim to - increase public awareness - increase transparency of EU activities

34. Information & Publicity Requirements: EU Legislation What? THIS PROJECT IS BEING PART- FINANCED BY THE EUROPEAN COMMUNITY European Regional Development Fund

35. Information & Publicity Requirements: EU Legislation Using the Emblem • colours • get it the right way up • timing

36. Information & Publicity Requirements: EU Legislation Who? • Aim to inform potential/final beneficiaries & • regional and local authorities • economic and social partners • NGOs esp. promoting equal opportunities, protecting environment • project operators and promoters • AND THE PUBLIC

37. Information & Publicity Requirements: EU Legislation Who is responsible? • Managing Authority • Programme Management Committee • Recipients of grant • Partners

38. Information & Publicity Requirements: EU Legislation Where? • All information literature • websites • seminars, conferences • project logos vs ERDF + NP logo • It is not sufficient to just use the NP logo!

39. Public Procurement & Competiton Policy: EU Rules & National ”Rules of Thumb” Public Procurement Rules • Apply to public sector bodies • May be applicable to other organisations when receiving public grants • Aim at securing transparent and fair conditions on the common market by principles of openness and competition • Mainly applicable when hiring consultants to the project

40. Public Procurement & Competiton Policy: EU Rules & National ”Rules of Thumb” Public Procurement on EU Level: A call for tender on a European level is compulsory for service contracts over 200 000 EUR (excluding VAT) awarded by a public sector body

41. Public Procurement & Competiton Policy: EU Rules & National ”Rules of Thumb” Public Procurement - National Level: RULE OF THUMB Scotland/UK: Ask for at least three bids when awarding contracts over £5000 (approx 8000 EUR) Sweden: Apply tendering procedures when awarding contracts for over 70 000 SEK (approx 7800 EUR)

42. Public Procurement & Competiton Policy:EU Rules & National ”Rules of Thumb” Public Procurement – National level: RULE OF THUMB Finland: Competitive tenders for awarding contracts below the thresholds by sending out requests for tender to a sufficient number of potential suppliers in the field or by publishing an announcement Thresholds: 162 293 EUR General state admin 249 681 EUR Other authorities

43. Public Procurement & Competiton Policy:EU Rules & National ”Rules of Thumb” Public Procurement – National level: RULE OF THUMB Norway: Tendering procedures should be applied when awarding contracts over 200 000 NOK (approx 25 000 EUR) NOTE! Openness and competion also below thresholds

44. Public Procurement & Competiton Policy:EU Rules & National ”Rules of Thumb” Public Procurement - National level: RULE OF THUMB Iceland: All service contracts awarded by public sector bodies exceeding ISK 10 000 000 (approx 115 000 EUR) shall be put to tender

45. Public Procurement & Competiton Policy:EU Rules & National ”Rules of Thumb” COMPETITION POLICY • DE MINIMIS RULE = Ceiling for public aid to private sector bodies • No more than 100 000 EUR in public aid • Over a three- (3) year period • Covers ALL public assistance – granted by national, regional or local authorities

46. MONITORING - Programme level funding decisions & project approvals - Project level implementation/activities outputs & results expenditures - Programme level outputs / results EVALUATION - INDEPENDENT - Ex-ante - before - Mid-term - during - Ex-post - after The Big Picture: Monitoring & Evaluation on Programme Level

47. MONITORING Programme level Financial – budget Programme Document & Programme Complement Regular reporting on Technical assistance budget and project funds to the PMC Annual reporting to the Commission Programme closure Physical - targets/indicators/outputs Programme Document & Programme Complement Regular reporting to PMC Annual reporting to the Commission Final report: programme achievements against baseline information and indicators The Big Picture: Monitoring & Evaluation on Programme Level

48. The Big Picture: Monitoring & Evaluation on Programme Level MONITORING Project level • Application • Budget & expenditures • Physical progress, outputs & results measured against targets • Regular 6- monthly reporting

49. The Big Picture: Monitoring & Evaluation on Programme Level EVALUATION - Ex-ante evaluation: • Carried out by an independent evaluator • An analysis of the previous programme • A brief SWOT analysis of the area • An assessment of the rationale and consistency of the programme • A quantification of the programme • An analysis of expected impacts and policy justification • An analysis of the quality and appropriateness of the implementation and monitoring arrangements

50. The Big Picture: Monitoring & Evaluation on Programme Level EVALUATION - Mid-term evaluation: • Builds upon the previous ex-ante evaluation • Carried out by independent evaluator • No later than 31 December 2003 • Re-assess the relevance and consistency of the strategy • Quantify the objectives, outputs, results and impacts • Evaluate the effectiveness and expected socio economic impacts and, evaluate the financial resources allocation • Assess the quality of joint implementation and monitoring arrangements • Provide conclusions and recommendations.