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Financial Guidelines and Modalities. March 2013. Transitory Measures. Transitory Measures. On-going contracts on 1 J an 2013: no changes, use version of the PRAG under which the contract was signed.

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transitory measures1
Transitory Measures
  • On-going contracts on 1 Jan 2013: no changes, use version of the PRAG under which the contract was signed.
  • Contracts signed 2012: use templates from the call’s rules but with new provisions on payment deadlines and interest on pre-financing will apply
  • Calls launched in 2013: new 2013 Pragand templates apply

Work Programmes

Direct centralised & decentralised management (ex ante and ex post)

Work programme adopted by the Commission

Published no later than March 31st of each year

  • Work programmes may be multi-annual (new)
  • Financial Decisions remain annual

Work Programmes / Annual Action Plans

applicant co applicant and affiliates
Applicant, Co-applicant and Affiliates


  • Partner – now called co-applicant and are officially party to the contract

Concept of ‘Affiliate’ entity launched with the 2013 PRAG.

  • Could be a consortium, network or family
  • Has to be a legal entity
  • Not a party to the contract
  • Should be ‘pre-set’ i.e. not formed for that specific action
  • Must have a legal and capital link (an MoU is not enough), would require declaration of association & would need to be shown in the statutes.
    • Need to show a ‘stable’ link
    • Memorandum of Understanding not enough to justify link
    • Link demonstrated in family/network statues
    • Affiliated entity statement/declaration of association
    • Affiliates must still fulfil eligibility criteria (which can differ per call)
  • Provision in the regulation for there to be an obligation to use an affiliate framework (but unlikely that this would happen)

Applicants, co-applicants and affiliates:

Must all be registered in PADOR

Fulfil call rules on eligibility

applicants co applicants
Applicants & Co-applicants
  • Mon-beneficiary (no change)
  • Contract is only signed by the Applicant
  • Mono-beneficiary with affiliated entities (no change)
  • Contract is signed by the Applicant/beneficiary only
  • Consortium created for the Call (no change)
  • Contract is signed by the Applicant/beneficiary only
  • Multi-beneficiary case
  • Contract is signed by the Lead Applicant and Co-applicants (all the beneficiaries). All the signatory LEFs are entered in the system
  • Multi-beneficiary case with affiliated entities
  • Contract is signed by the Lead Applicant and Co-applicants (all the beneficiaries). Affiliates do not sign the contract. All the signatory LEFs are entered in the system
  • Legal framework allows for calls where submission with affiliates can be a requirements – would need to be considered essential by the contracting authority

Signature of Grant Contract: form e3H1 (and special conditions)

* LEF: legal entity file

Likely that people will continue to use the co-applicant procedure

multi beneficiary grant contracts
Multi-beneficiary grant contracts


  • Entities signing the grant agreement
  • Grant recipients


  • Applicant has ‘coordinator ‘ status and with role of ‘lead applicant’ and ‘main beneficiary’
  • Applicant has mandate from co-applicants to:
    • Submit the proposal
    • Sign the contract
    • Represent the rest during the execution of the contract
  • Receives notification of the grant decision
  • Assumes the overall financial responsibility for the contract

Affiliated Entities

  • Are entities with a legal or capital link with the beneficiary
  • Third parties to the contract but benefit partially from beneficiary rights (eligibility of costs)
  • Are entities forming part of a beneficiary
  • Costs are considered costs of the entity to which they are affiliated

Applicant with co applicants

Applicant with affiliates

Applicant with co-applicants and affiliates

grant size prospect
Grant Size & Prospect

Grant Size

No direct award of grants ≤ €10,000 in decentralised management

  • Option is no longer available as there is no legal basis

Prospect (electronic applications)

  • From 2014
  • Initially, only for centralised calls
new co financing approach
New Co-financing Approach

Proof of co-financing is no longer required at budgeting stage

No more degressivity for operating grants

May also be constituted by:

  • Non eligible taxes (FA, basic act), accepted costs*
  • In kind contribution (if allowed by the call)

The accepted cost system has to be introduced in the Cf

* Non eligible taxes may remain in countries where there is a financing agreement that makes taxes non eligible.

new call deadlines
New Call Deadlines

Maximum 6-months from deadline of submission of proposals to results shared with applicants

Maximum 3-months from information to applicants to contract signing

Timelines in specific grants may differ but these are the maximum timelines.

Maximum timelines may be exceed in complex action e.g. multi beneficiary contracts.

These might also be shorter as seen in the Lebanon support to refugees call.

sub granting
Sub Granting

Sub-granting can now be the main aim of the action, need to provide information on:

  • Description of the action will focus on defining the allocation of the subgrants:
    • Type of entity (don’t have to name)
    • Activity
    • Selection process / criteria
    • Evaluation committees
    • Management of the support
      • This is important for the audit control letter

See Article 10 of the General Conditions

This links with the multi beneficiary approach of financial support to 3rd parties.

May also have specific reference in call guidelines (which may set its own ceiling)

€60,000 sub grant limit if not the main aim of the action

simplified cost options sco
Simplified Cost Options (SCO)
  • Limited to €60,000 per beneficiary of the grant contract (exclusive of the 7% of indirect costs)
  • Proposed by the beneficiary
  • Approval of the use of simplified cost options will be given by the Contract Authority during the contracting phase
  • Guidelines and check-list have been development (new Annex K)
  • Methods used by the beneficiary to determine the SCO must be clearly described in Annex III (justification sheet of the budget)
  • Can be based on:
    • Statistical data or other external data as appropriate
    • Certified or auditable historical data of the beneficiary
    • Actual account or cost account data of the beneficiary

Will not be challenged by ex-post controls

Auditors will therefore not check all supporting documents to establish actual costs incurred

Not possible to amend the lump sum units

Might work well where:

    • You have a project with a lot of community consultations of relatively low value but, would have to prove No. of consultation taking place
    • If you use the lump sum approach, please let me know


Lump sums, unit costs, flat-rate financing


Control of the generating event (the output)

Amounts of lump sums, unit costs, flat rates not challenged ex post (checked at evaluation / contracting phase)

no profit rule for grants 60 000
No Profit Rule for grants > €60,000

General conditions: no grant may give rise to profits (i.e. must be balance of income and expenditure), unless there is a specific profit objective.

If there is a profit, the EC will recover pro-rata of their contribution

Current exceptions: training scholarships paid to natural persons, prizes awarded following contests.

Additional exceptions foreseen:

Direct support to natural persons most in need, such as unemployed persons and refugees

Grants of < €60,000 are exempt from the no profit rule.

evaluation of financial operational capacity
Evaluation of Financial/Operational Capacity

New approach for the evaluation of financial and operational capacity

Yes / No approach

Must be ‘yes’ in all categories to proceed

Call evaluation now based on 80% (as the 20% financial capacity element has been removed)

Margin of discretion left for evaluators

1-3 cumulative criteria (includes co-applicants and affiliates)

4 – applicant only (as they bear all of the risk)

There is no objective criteria for assessing capacity

Capacity information should be made explicit in the application form

supporting documents
Supporting Documents

Increased flexibility:

  • Declaration of honour for grants ≤ € 60,000
  • Audit report only compulsory for action grants > €750,000
  • No declaration of honour for grants ≤ € 60,000 for the exclusion criteria

Low value grants ≤ € 60,000

  • Lighter requirements regarding supporting documents
  • Exception from the no-profit rule
  • No pre-financing guarantee may be requested
  • Accounting records and supporting docs to be kept for 3 years
use of reserve lists
Use of Reserve Lists

Clarification introduced in PRAG on how to use reserve lists depending on funds available:

  • For use where budget is still available once all possible contracts have been signed with successful applicants in the final list

Procedure for signing additional contracts:

  • First runner in the reserve list will be approached.
    • Need to ascertain if there are sufficient funds for the action
      • Review of the budget, ineligible costs removed
      • If insufficient funds, applicant offered possibility to increase co-finacing to bridge the gap
      • NB. % eligible costs must remain within the authorised co-financing rules in the guideline
  • If the above cannot be met, the 2nd runner on the reserve will be contacted etc.

Under no circumstances will applicants be requested to reduce or amend their actions (apart from the possible corrections and clarifications explained in this chapter) in order to make them fit the available EU financing, since this would entail a negotiation and an alteration of the proposal.

This procedure may lead to situations where lower ranked proposals are finally given a contract instead of higher ranked ones.

interest on pre financing
Interest on pre-financing

Guarantee on Pre-Financing

Grants ≤ € 60,000

  • No right to ask for it
  • May be requested if needed, based on risk analysis

Grants > 60,000

  • May be requested based on risk analysis

Interest on Pre-financing

  • Not due to the EU any more (only for budget)
  • No need to open interest bearing accounts
  • No more reporting
rules for currency conversion
Rules for Currency Conversion

Exchange rate @ the rate that the money was received from the EU (infoeuro rate for accounting purposes)

Calculated per-instalment rather than an average

NGOs can request own procedures which would be included in the special conditions (derogation request per contract made to the delegations) – to use bank rate rather than infoeuro for your own currency.

payment deadlines
Payment Deadlines
  • One single time limit
  • No more sub limits for approval/payment periods
  • 30 days for 1st pre-financing (45 for EDF)
  • Initial pre-financing 100%
  • Financial payment 60 or 90 days depending on the action
payment procedures
Payment Procedures


  • Guarantee not needed for projects <€60,000
  • For actions > 12 months and > € 100,00 initial pre-financing increased to 100% of first year budget financed
amendments to the contract
Amendments to the Contract
  • Ceiling raised from 15% to 25% for transfers between main budget headings.

Not to be used to modify:

  • Amounts or rates of the simplified cost options
  • In-kind contribution
  • Indirect costs
  • Commission are trying to avoid an amendment for every change
  • Must not impact the integrity (specific objective, results) of the action
annex iv procurement
Annex IV (procurement)

Updated according to new thresholds

termination and suspension
Termination and Suspension

Articles adapted to the multi-beneficiary contract

New clauses of termination

    • Unjustified breach of contractual obligations (12.2.a)
    • Changes in the beneficiary (e) – without terminating the full contract
    • New clauses of suspension due to errors irregularities, fraud (11.6.a)
    • Unjustified breach of contractual obligations (k)

Force majeure: EU decision to suspend cooperation:

  • May impact geographic programming but not thematic

Record Keeping

  • From the payment of the balance:
  • 5 years in general
  • 3 years for low value grants

This is:

  • Without prejudice to on-going audits, appeals, litigation or pursuit of claims
  • Same periods for the right of audit
  • All the supporting documents shall be available in the original form, including in electronic form

Verification Report

  • For all actions < €5 million and > 100,000


  • The delegation can impose an auditor