Introduction to FP7:Grant Agreements and Financial Issues

University of Bristol

19 May 2011

Emma Careyemma.carey@bbsrc.ac.uk

http://www.ukro.ac.uk

Science and Technology Facilities Council

Biotechnology and Biological Sciences Research Council

Engineering and Physical Sciences Research Council

Economic and Social Research Council

Medical Research Council

Natural Environment Research Council

Arts and Humanities Research CouncilU

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…promotes effective UK participation in EU-funded research, innovation and higher education programmes,

and other related activities…

UKRO’s Aim

Based in Brussels, UKRO:

Provides early insight and briefing;• Disseminates EU funding opportunities; • Provides high quality guidance and training;• Exchanges information between the UK and EU

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UKRO Services include

• Website:• with information on programmes, FAQs & guidance http://www.ukro.ac.uk

• Information services • e-mail updates (& searchable database) http://ims.ukro.ac.uk

• Enquiry service • Annual visit from your UKRO European Advisor• Specialist training courses and information events• Annual conference for European officers

• Meeting room in Brussels

• Monthly publication - British Council ‘European RTD Insight’• National Contact Points (Marie Curie and ERC)

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FP7 Overview, Eligible Countries, and Grant Cycle

Opportunities availableF

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Health

Food, Agriculture and Fisheries, and Biotechnology (FAFB/KBBE)

Information and Communication Technologies (ICT)

Energy

Environment (including Climate Change)

Transport

Socio-Economic Sciences and the Humanities (SSH)

Nanosciences, Nanotechnologies, Materials

and new Production Technologies (NMP)

Security

Research Infrastructures

Research for the BenefitOf SMEs

Regions of Knowledge

Research Potential

Science in Society

Activities of InternationalCo-operation

Coherent Developmentof Policies

Individual Fellowships & Reintegration GrantsInitial Training Networks

Industry-Academia Partnerships and PathwaysInternational Research Staff Exchange Scheme

Researcher’s Night

Starting Independent Researcher Grants

Advanced Investigator Grants

Co-operation – collaborative research

Ideas – European Research Council (ERC)

Capacities

Space

People - Marie Curie

Plus JRC and Euratom

Support Actions/Calls for Tender

Who is eligible for funding?

EU-27Austria, Belgium, Bulgaria, Cyprus, Czech Republic,Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Italy, Ireland, Latvia, Lithuania, Luxemburg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, UK

Associated Countries (FP7)Albania*, Croatia*, Faroe Islands*, FYR Macedonia*,

Iceland*, Israel*, Liechtenstein*, Montenegro*, Norway*, Serbia*, Switzerland, Turkey*, Bosnia and Herzegovina*

*except Euratom

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Eligible for EC funding

Other countries / organisations (but with NO FUNDING from the EU)

Legal entities in EU member states

or ‘Associated Countries’ (AC)

JRC

International European Interest

OrganisationsLegal entities in

International Co-operation Partner Countries (ICPC)

International organisations & non-ICPC third countries, only if:- Mentioned in Specific Programme or Work Programme, OR

- Essential for carrying out the action, OR- Provided for in a bilateral agreement with the EC

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Working with third countries (=non EU/AC countries), can either be:

- Specified by the CommissionCalled a Specific International Cooperation Action (SICA) that require at least four participants: two in Member States or Associated Countries, two in ICPC- Suggested by the Commission if so, participation of international organisations and participants from third countries is inaddition to normal minimum requirements- Initiated by the researcher if so, participation of international organisations and participants from third countries is inaddition to normal minimum requirements

International Cooperation Partner Countries (ICPC)are listed in Annex 1 of the Work Programme• Western Balkans countries• Mediterranean Partner countries• Eastern European and Central Asian countries• Africa Caribbean Pacific• Latin America• Asia

International Co-operation:Co-operation and Capacities

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Application and Negotiation Process

Final Work

Programme

Consortium

Application

Activities

Decision(via EC or

Co-ordinator)

Negotiation

ProjectStart

Preparation ofGrant Agreement

Authorisation

Project Account

StaffRecruitment

ESR

GrantAgreement

ConsortiumAgreement

Budget

Ranking

ConsortiumAgreement

ConsortiumAgreement

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Negotiation ProjectStart

Project Account

StaffRecruitment

GrantAgreement

ConsortiumAgreement

ScientificReporting

FinancialReporting

Commission Pre-financing

Certificate onFinancial Statement

Kick offMeeting

Interim Payment

Final Reporting

ProjectImplementation

StartInterim

Reporting Finish 12FP

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Key documents

Call Fiche (specific) Focus

Work Programme (usually annual)

Guide for Applicants (call and funding scheme specific)

Submission

EPSS Guide

Rules on Submission and Evaluation Background

Model Grant Agreement, Model Consortium Agreements, Consortium Agreement check list

Updatable Financial, Negotiation, IPR, Certification and Reporting Guidelines

Rules of Participation

FP7 and Specific Programme Text

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Introduction to FP7 Finances

Who makes the rules on finances?In

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FP7 Eligible Costs?

EuropeanCommission UK Rules

Normalpractice of

organisationDepartment

EU Financial

Regulations

EU Court of Auditors

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Introduction to FP7 Finances

• Co-financing principle• Main principle: usually based on reimbursement of

direct and indirect costs• But sometimes lump sums or flat rates in certain

actions• No need for hard cash own contribution• No profit• No commercialisation activities• Based on reimbursement of eligible costs• Different project types/funding limits/funding rates

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Eligible Costs: principles

• Costs are eligible if:

• Actual

• Incurred by the beneficiary during the project

• Determined according to usual accounting and management principles

• Used solely for project objectives*

• Consistent with principles of economy, efficiency and effectiveness

• Recorded in accounts

* Replaces the FP6 provision of ‘necessary’

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Non-eligible Costs

• Identifiable indirect taxes including VAT• Duties: the amount assessed on an imported or

(less often) exported item• Interest owed• Provisions for possible future losses or charges• exchange losses, cost related to return on capital• costs declared or incurred, or reimbursed in respect

of another Community project (avoiding double funding )

• debt and debt service charges, excessive or reckless expenditure

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Definitions

• Direct costs - Direct costs are all those eligible costs which can be attributed directly to the project and are identified by the beneficiary as such, in accordance with its accounting principles and its usual internal rules.

• Indirect Costs - Indirect costs are all those eligible costs which cannot be identified by the beneficiary as being directly attributed to the project, but which can be identified and justified by its accounting system as being incurred in direct relationship with the eligible direct costs attributed to the project.

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Indirect CostsChoice of method used:• has to be made at Institutional level• and used in all FP7 areas - except Marie Curie Actions and ERC

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Method Indirect Cost Rate Who can use this method?

Specific Flat Rate 60% Available to universities, non-profit public bodies, secondary and HE establishments, and SMEs which are unable to indentify with certainty their real indirect costs

Standard Flat Rate 20% Available to all

Real Indirect Costs Rate and basis determined by organisation

Available to all

Simplified Method Rate and basis determined by organisation

Available if unable to calculate project level indirect costs. May be certified independently and accepted by Commission

Special Cases• ICPC lump sums - cover direct and indirect costs• CSA - maximum of 7% for indirect costs

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Maximum reimbursement rates*

FP7 –

Industry

FP7 –

Public Bodies,

Universities, SMEs, etc.

RTD 50% 75%

Demonstration 50% 50%

Other** 100% 100%

** Co-ordination and Support Actions, Training, Management21In

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Reimbursement of Costs:Flat Rate – 60%

Calculate the direct costs:

• RTD Costs = €100,000

• Demonstration Costs = €100,000

• Management Costs: = €100,000

Calculate the indirect costs:

• RTD: €100,000 x 0.6 = €60,000

• Demo: €100,000 x 0.6 = €60,000

• Mgt: €100,000 x 0.6 = €60,000

Reimbursement as follows:

RTD: 75% of (€100,000 + €60,000) = €120,000

Demo: 50% of (€100,000 + €60,000) = €80,000

Mgt: 100% of (€100,000 + €60,000) = €160,000

Note that any subcontract costs must be taken out of the direct costs to calculate the correct indirect costs.

Total to be reimbursed = € 360,000

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ICPC Lump Sum Option

• ICPC partners can elect to use lump sum payments for a whole project (instead of reimbursement of eligible costs)

• Applies for the duration of the Grant Agreement (contract)

• Method can vary between projects – so should consider options for each individual one

• Lump sums include all project costs (personnel, travel, equipment, overheads, etc.)

• Calculated on basis of full-time researchers per year• Requirement to keep evidence of time spent on project• Rates vary according to country income

• Maximum reimbursement rates still apply

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ICPC Lump Sums – rates In

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Economy of the ICPC country

EC contribution per researcher per year

Low income €8,000

Lower middle income €9,800

Upper middle income €20,700

List of ICPC economies can be found in: Guide to Financial Issues

Example of funding in a CSA:

DIRECT COSTS• EC fund 100% of direct costs

Direct costs (including €20 000 for subcontracting) € 200 000

INDIRECT COSTS• EC funding for indirect costs is maximum (not flat rate)

of 7% of the direct costs (excluding subcontracting and also excluding the costs of resources made available bythird parties which are not used on the premises of the beneficiary )

Direct costs excluding subcontracting = €200 000 – € 20 000 = € 180,000

Therefore maximum total indirect costs = 7% of €180 000 = €12 600 € 12 600

TOTAL EC FUNDINGDirect Costs (incl. for the subcontract) + Indirect Costs € 212 600

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Participant Portal

Participant Portal – Basics

• Offers external stakeholders (participants, LEARs, co-ordinators, reviewers) a unique entry point in handling grant-related actions, based on a

single sign-on (ECAS) role-based authorization (Identity and access management

– IAM)

• Common umbrella for the different FP7 IT tools

• Result: personalised services on the Portal, personalised access to

Legal entity registration Financial Capacity Check Negotiation + Amendments Financial and scientific reporting

• Homogeneity and better service integration for grant management

• http://ec.europa.eu/research/participants/portal27P

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Unique Registration Facility (URF)

• Why introduce the URF? • In FP6 legal data required at both submission and negotiation stages• In FP6 most organisations validated for legal existence and status for

every contract

• Participant Identification Code (PIC)• One Legal Entity = One PIC (Used for FP7 & CIP)• New participants could register from 1 May 2008

• Legal Entity Appointed Representative (LEAR)• One Legal Entity = One LEAR• Only LEAR can request modification of the admin and financial data of

your organisation in URF (will not be able to do it in NEF anymore)

• Further information• http://cordis.europa.eu/fp7/pp_en.html• http://cordis.europa.eu/fp7/pp-pic_en.html• Helpdesk – DIGIT-EFP-SUPPORT@ec.europa.eu• Feedback – RTD-DL-URF@ec.europa.eu

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Participant Portal

Currently, the Participant Portal is the gateway to access:

1) The Unique Registration Facility (URF);

2) The FP7 Negotiation Facility NEF (for co-ordinators);

3) The new FP7 documentation search functionality

4) The SESAM tool for technical reporting

5) The FORCE tool for financial reporting

6) The “Manage Roles” facility

7) *NEW* Information and Documentation on FP7 Calls 29Par

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Participant Portal: Identity and Access Management (IAM) - ECAS

● Delegation and assignment of roles by the consortium itself: By default the contact person from the proposal

is provisioned as Co-ordinator Contact in the Portal.

Co-ordinator contact changes are managed from NEF by the Commission Project Officer (under ‘Portal coordinator contact person’).

The Co-ordinator Contact can set/change the Participant Contact roles in the Portal (without further interference by the Commission).

Further representatives for the entity can be named by the Co-ordinator and Participant Contacts for a given entity. 30P

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Project Stages

Project Stages

1) Proposal Preparation

2) Evaluation

3) Negotiation

4) Project Start/Implementation

5) Project Reporting

6) Project Closure

7) Post-Project Tasks

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1) Proposal Preparation

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p Contractual and Financial Aspects• Which Funding Scheme?• Planning budget

• Share of costs amongst consortium• Often strict EC contribution limit imposed• Planning project resources – equipment, subcontracting• Lump sums for ICPC countries

• Discussion of consortium agreement• Management Structure, IPR and Procedures

FP7 Project Types

FP7 Co-operation and Capacities have 5 main project types:• Collaborative Projects

• S/M Scale Collaborative Projects (Small CP/ Strep)• Large Scale Collaborative Projects (Large CP/ IP)

• Networks of Excellence (NOE)• Coordination and Support Actions (CSA)

• Co-ordinating (CSA-CA)• Supporting (CSA-SA)

These may also have extra conditions:• Specific International Co-operation Actions (SICA)• Research for the benefit of specific groups (SMEs/CSOs)• Public Private Partnerships (PPPs)• ERA-NETs (and ERA-NET Plus• Research Infrastructures projects (CP+CSA combined)

Other project types:• FP7 Ideas - European Research Council (ERC)• FP7 People - Marie Curie Actions 34P

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Co-operation Theme

2011

Collaborative

Projects

(S/M)

Collaborative

Projects

(L)

Co-ordination and Support

Actions

Health Max €6 million

(eligibility criteria)

Must be from €6 to 12 million

(eligibility criteria)

Limits depend on call (eligibility

criteria)

ICT No firm limits No firm limits No firm limits

Socio-Economic Sciences

Max €2.7 million

(eligibility criteria)

Min €6.5 with min 7 partners

(eligibility criteria)

No firm limits but call specific

Types of Activity:Co-operation and Capacities

Refer to guidance for each project (e.g. Guide for Applicants)

1) RTD Activities: directly aimed at creating new knowledge, new technology, and products, including scientific coordination.

2) Demonstration activities: designed to prove the viability of new technologies that offer a potential economic advantage, but which cannot be commercialised directly (e.g. testing of products such as prototypes).

3) ‘Other’ activities: dissemination, networking, co-ordination, intellectual property, socio-economic impact studies, feasibility studies for commercial exploitation

4) Management activities: overall legal, ethical, admin. and financial management, pass on EC funds, keep project records and accounts, review project reports and tasks, monitor beneficiaries, project manager, competitive calls

5) Training activities: costs of providing training, including salary costs, but not the salary costs of those being trained

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Management Costs• Management of the consortium activities includes:

• maintenance of the consortium agreement, if it is obligatory,

• the overall legal, ethical, financial and administrative management including [for each of the beneficiaries] obtaining the certificates on the financial statements or on the methodology,

• implementation of competitive calls by the consortium for the participation of new beneficiaries, where required by Annex I

• obtaining any financial security such as bank guarantees, when requested by the Commission,

• any other management activities foreseen by the annexes, except coordination of research and technological development activities.

• Management tasks cannot be subcontracted

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Group Exercise:Cost Category Activity

Principal lecturer – 20% timeTechnician – 100% timePhD student – 100% timePhD feesReplacement teaching timeCost of project managerIT support staffAdmin supportNew microscope (depreciation over 10

years)Office PC1000 test tubesPrototyping of new drugMiscellaneous consumablesPaperIT network chargeVAT Airport taxFlight to Rome for project

management meeting

Exercise: allocate costs from the list below into the types of activity for a collaborative project

Flight to Dublin for research work package meeting

Flight to USA for research conference, 1st class

Carbon-neutral charge when booking a flight

Admission to Windsor Castle for members of project steering committee

Dinner for project steering committeePublishing and dissemination of project

material to publicCertificate on financial statementsCertificate on methodologyWebsite designSubcontracting of blood sample analysisConsultant time in writing original

proposalExchange rate loss as Euros no longer

cover pound expenditureFeasibility studyTransportation and set-up costs for

equipmentInternal invoices

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Eligible?

If so, which category? RTD / Demo / Other /

Management / Training

Direct or Indirect?

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Costs you can be reimbursed for (…but which you might not expect)

Financial responsibility up to each participant:

• Choice of staff resources (can incl. PhD Students)• Patents – filing and searches• Employing a project manager• Dissemination (website, publication fees…)• Travel outside Europe• Equipment (under certain conditions)• Studies on socio-economic impact• Feasibility studies for spin-offs

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Tips for Budgeting in Proposals

• Discuss budget early• Costs of activities discussed first

• Share of costs amongst consortium

• Procedure for changing this share if necessary

• Keep in mind limits imposed by Commission

• Researchers and Administrations should both be involved

• Guidelines on Finances, Negotiation and Reporting…

• Previous FP6/FP7 experience of managing, budgeting and reporting is useful background

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Proposal format

• Part A (Online forms A1, A2, A3)• Basic info – call details, title, summary, partners, budget• Participant Identify Code (PIC) - a unique organisational

identifier

• Part B (Upload as pdf)• Cover Page• Table of Contents• Main part of the proposal

• Science and Technology

• Implementation (Management, participants/consortium, appropriateness of allocation of resources: staff, equipment…)

• Impact

• Ethical Issues• Consideration of gender issues

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EPSS A3 Forms – Collaborative Project

Est

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2) Evaluation

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Eva

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Feedback from Evaluators (ESR):• Budget is considered as one aspect of the evaluation

• ‘Appropriateness of the allocation and justification of the resources to be committed (budget, staff, equipment)’

• In addition ESR provides comments on all aspects of evaluation criteria (S&T Quality, Implementation and Impact) including:

• Soundness of concept, and quality of objectives• Activities• Management structures/procedures• Structure and quality of consortium• IPR and dissemination plan

3) Negotiation

• Based on ESR• Interpretation of project officer

• Negotiation of key aspects: • activities, • budget,• partnership,• reporting requirements

• Building towards consensus on the grant agreement• Simultaneous finalisation of Consortium Agreement• NEF system available in Participant Portal• Legal and financial viability check • Signature

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Participant Portal – NEF

STRUCTURE OF THE DESCRIPTION OF WORK (DoW)

• The Description of Work, which is Annex I to the Grant Agreement, contains the details of the implementation of the project with regard to the work packages, deliverables, milestones, resources and costs of the beneficiaries – organised in a table format - as well as a detailed narrative description of the work. It consists of two parts:

Part A of Annex I contains:

• - the cover page, • - the project summary, • - the list of participants and the budget breakdown • - 8 Workplan Tables, which provide details on the implementation of the project

Part B of Annex I is based on information from Part B of the proposal. However, during the negotiation stage several sections of the original proposal need to be updated and the Consortium may be requested to shorten certain sections of the proposal and elaborate on others.

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Participant Portal – NEF

• Use the online tool NEF (NEgotiation Facility) to prepare DoW:

• Only two “work tables” (list of WP and WP description) need to be edited, all other tables are generated automatically and adapted/re-calculated when the original tables are edited.

• Information on deliverables is transferred into the reporting tool and does not need to be re-entered at the time of reporting.

• Part A of the Description of Work = Work tables.

• Part B of the DoW = narrative part, based on part B of the proposal: uploaded into NEF by the co-ordinator as a Word/pdf document (max. 20MB) during negotiations

• NEF will create out of the two files the Description of Work (Annex I)

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The negotiation process (1)

The following forms need to be submitted to the

EC Project Officer:

1) First drafts of Annex I to the Grant Agreement

2) Grant Agreement Preparation Forms (GPFs) via the NEF tool

3) Supporting documents that verify legal existence and status of beneficiaries (if you have no PIC)

4) Financial documents for financial viability checking (request is more than €500,000, done only once for each institution throughout FP7)

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The negotiation process (2)

• EC Project Officer will indicate changes or improvements to the submitted forms

• Consortium responds and negotiates with EC Project Officer until agreement is reached

• Meetings between Consortium and EC may be required

• Process should be concluded before deadline for completion of negotiations

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Important points to remember • An invitation to start negotiation does not, under any circumstance,

guarantee the funding of a project or the offer of a grant agreement.

• The funding of the proposal may depend on the Consortium’s acceptance of changes requested by the Commission services in the Negotiation Mandate.

• The maximum amount of funding for a project is fixed in the negotiation mandate.

• EC can terminate negotiations or request a change in consortium if it doubts the financial and human resources available to carry out the proposed work.

• If negotiations are not completed within the given time limit, the EC may terminate negotiations.

• Further information: • FP7 Negotiation Guidance notes • NEF User’s Guide for Co-ordinators and Participants

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Project Stakeholders

Project Stakeholders

Partner 1(Co-ordinator)

Partner 4Partner 3Partner 2

EuropeanCommission

Third Parties

Sub-

contra

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Licen

se

License

Grant Agreement

Consortium

Agreement

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Project Officer

• Appointed to a project at start of grant agreement negotiation stage

• Essentially the EC’s representative• Responsible for project negotiations towards final

grant agreement and start• Responsible for monitoring, interim reporting, and

processing of finances• Responsible for signing off project

• Productive, open, regular contact with project officer is vital, via the co-ordinator

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Co-ordinator

• Essentially, one beneficiary who has extra responsibility (but not necessarily extra rights)

• Must pass on pre-financing (as agreed by beneficiaries in consortium agreement)

• Responsible for reporting to the Commission (finances, payments, task progress…)

• Must pass on information regarding performance obligations of project to beneficiaries

• These co-ordination tasks cannot be subcontracted, nor carried out by other beneficiaries

• Must report on interest gained from EC pre-financing in their account

• Management activities are not merely co-ordination tasks

• Good contact and honesty with co-ordinator is also very important

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Participants/Beneficiaries

• Organisations signed up to the Grant Agreement• Each beneficiary has consortium and individual

responsibilities• Beneficiaries should normally have the capacity to do

the project (as they signed up to it)• Must be seen to be working together• Responsible for managing own performance and

finances – including declaring receipts• Responsible for performance of any subcontractors

they are attached to• Researchers involved in projects must make own

arrangements/fit in with policy requirements to work together with other project stakeholders at their own organisation

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Third Parties

• Organisations which are not signed up to the grant agreement

• Make some contribution to the project

• Must be identified in project negotiations, or raised with Project Officer subsequently

• Subcontractors are one type of third party

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Subcontractors

• Type of 3rd Party, not a beneficiary, but does specialised work on behalf of a beneficiary

• Subcontractor charges price for the work, and paid 100%

• Not directly supervised, but beneficiary takes responsibility, and owns IP generated

• Beneficiary pays subcontractor either using EC contribution or own funds

• Not for core parts of project, management or research

• Not for subcontracting research between participants

• Must be identified in Annex I, and ‘best bid’ accepted

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FP7 Grant Agreements

FP7 Grant AgreementSection Name Purpose

Grant Agreement

Core Adapted to each individual project, confirming beneficiaries, start date, duration, budget and reporting periods for example

Annex I Description of Work

Covers technical side of project – developed from proposal

Annex II General Conditions

The same for all projects under Co-operation/Capacities, modified for ERC and Marie Curie (which both offer Single or Multi-beneficiary versions)

Annex III Extra conditions for certain areas (e.g. SME Actions, Infrastructures)

Annex IV Form A Used to accede to agreement

Annex V Form B Used to add new beneficiaries

Annex VI Form C Financial Statement

Annex VII Form D (New in FP7)

Terms of reference of the certificate on the financial statements (known as the Audit Certificate in FP6)

Form E (New in FP7)

Terms of reference for the certificate on the methodology (new to FP7) - for beneficiaries who want to get average personnel costs certified and/or for those who are unable to calculate real indirect costs and want to have a simplified method of calculating these certified F

P7

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Core Grant Agreement

• Signature of EC and Co-ordinator (accession within 45 days of participants)

• Names and legal representatives of participants

• Duration and start of project

• Reporting periods

• EC total contribution to project (broken down in Annex I)

• Amount of pre-financing (and Guarantee Fund)

• Special Clauses (to be negotiated)

• Applicable law

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Grant Agreement – Annex II

Generic to all projects – (separate versions for ERC and MC):

• Definitions

• Roles of co-ordinator and participants (beneficiaries)

• Periodic reporting

• Use of certificates (financial statements, methodology)

• Payment modalities

• Subcontracting

• Confidentiality

• Financial provisions (costs, funding limits, receipts, pre-financing, interest yielded)

• Financial and technical audits

• Intellectual Property Rights – use and dissemination

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Consortium Agreement

• Mandatory unless specified in call for proposals

• Internal organisation of the consortium, including:• Financial arrangements e.g. pre-financing

• Settlement of disputes e.g. non-performance

• Additional Intellectual Property arrangements e.g. licensing

• Liability and confidentiality

• Commission Consortium Agreement checklist established

• NOT signed by the Commission

• Usually drafted and disseminated by Co-ordinator

• Models such as DESCA and IPCA can be adapted

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Access Rights FP7

Access rights to

background

Access rights to foreground resulting from

the project

For carrying out the project

Yes, if a participant needs them for carrying out its own work under the project

Royalty-free unless otherwise agreed before acceding to the

grant agreement*

Royalty-free

For use (exploitation

+ further research)

Yes, if a participant needs them for using its own foreground

Either fair and reasonable conditions or royalty free- to be agreed

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Please note that the rules for Research for the Benefit of SME/CSO projects are also different

IPR Conditions - Background

Background:Information which is held by beneficiaries prior to their accession to the grant agreement, as well as copyrights or other intellectual property rights pertaining to such information, the application for which has been filed before their accession to the agreement, and which is needed for carrying out the project or for using foreground.

Key issues:

• Confidentiality agreement before project negotiations?

• Beneficiaries define background needed

• Where appropriate exclude certain items

• Access rights must be requested, and intended purpose made clear

• Exclusive licences possible

• Does this make for a workable project?

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IPR Conditions - Foreground

Foreground:

The results, including information, whether or not they can be protected, which are generated under the project. Such results include rights related to copyright; design rights; patent rights; plant variety rights; or similar forms of protection.

Key issues:

• Confidentiality – all material for up to five years after project end

• Ownership – party generating owns, joint ownership conditions apply

• Transfer of ownership – 45 day notice required

• Protection – commercially exploitable IP must be protected

• Use – participants must use or ensure that foreground is used

• Dissemination – as swiftly as possible, 45 day notice required

• EC support must be acknowledged64F

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4a) Project Start

• After signature of grant agreement• Agreed start date• Kick-off meeting• Initial allocation of pre-financing done by Co-

ordinator (as per Consortium Agreement terms)• Start of work packages• Plan towards first review

Some flexibility with resources once the project is up and running…

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Project Start – Pre-financing

• Single pre-financing paid at the start of the project (Article 6 of the ECGA)

• 10% of EC contribution is always retained by the Commission• 5% for Guarantee Fund, also part of pre-financing and

immediately subtracted• Paid to Co-ordinator once min. number of participants

have acceded and only paid to those that have acceded• For projects of 1 to 2 reporting periods, pre-financing could be

60-80% of total EC contribution• For projects > 2 reporting period, prefinancing = 160% of the

average funding per period• Circumstances of project can influence this e.g. loading of

expenditure• Pre-financing remains the property of the Commission

until the last payment

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Pre-financing – Worked Example

Example: 3 yr project with €3,000,000 EC contribution with annual reporting

• Average EC contribution per reporting period: €3,000,000 / 3yrs = €1,000,000

• Pre-financing (usually 160% of €1,000,000) mentioned in Article 6= €1,600,000

• Contribution to Guarantee Fund at 5% of total EC Contribution: 3,000,000 x 5% = €150,000

Net amount transferred to Co-ordinator: (€1,600,000 – €150,000) = €1,450,000

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Interest on Pre-Financing

• GA II.6.5 ‘The bank account mentioned in Article 5.3 shall allow that the Community financial contribution and related interest are identified. Otherwise, the accounting methods of the beneficiaries or intermediaries must make it possible to identify the Community financial contribution and the interest or other benefits yielded’

What’s in the Guidelines?• Recommended that bank account of co-ordinator is used exclusively for

project funds• Co-ordinator must be able to identify payments made/received at any

moment• This includes identifying interest generated on pre-financing held by co-

ordinator• Such interest is viewed as a receipt to be offset/recovered• Participants do not have to identify interest on the pre-financing they receive• Security research projects may insist on a separate bank account/ sub

account

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Guarantee Fund

• New in FP7 to lower barriers to SME involvement• A kind of insurance contract to guarantee the

financial losses of the projects• 5% of EC contribution transferred by the

Commission to the Guarantee Fund • Returned to the beneficiaries via the Co-ordinator

at the moment of the final payment, at the end of the project;

• A maximum deduction of 1% of the EC contribution may be applied to some beneficiaries (not public bodies) see Article II.20 of GA.

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PaymentsExample continued:

3 yr project (with annual reporting) with total €3,000,000 EC contribution

Maximum payments during project = 85% of total = 2 550 000(as 5% retained for Guarantee Fund and 10% retained by EC)

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Payment Amount received Cumulative amount received to date

Pre- financing As per pervious example

1 450 000 1 450 000

1st reporting period

EC contribution accepted € 900 000

1st Interim payment €900 000 2 350 000

2nd reporting period

EC contribution accepted € 900 000

2nd Interim payment € 200 000

(due to retention – since can not go above cumulative total of 2 550 000)

2 550 000

Final report EC contribution accepted € 1 200 000

Final payment € 450 000(= the total EC contribution accepted over the whole project minus the cumulative amount received so far)

3 000 000

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4b) Project Implementation

• Recruitment of staff• Pre-financing into partners’ project accounts• Work towards first (internal) review?• Commission review (reporting) every 12 to 18

months• Monitoring of activities

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Issues during project

• New joiners

• Leavers

• Changing institution

• Bankruptcy

• Contract amendments

• Non-performance

• Moving finances/cost headings

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5) Project Reporting

• Simplification: 18 month reporting periods, less paperwork

• Consortium submits a periodic report within 60 days after the end of each reporting period

• Overview of progress of project, achievements and milestones as per Annex I, including publishable summary

• Explanation of the use of resources

• Financial Statement from each beneficiary

• Summary Financial Report

• Commission to evaluate reports and disburse payments

within 105 days unless time limit or payment suspended

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Scientific Reporting

• Online tool for preparation and submission of periodic and final scientific FP7 reports, project technical reviews by external experts (SESAM)

• Deployed under the Participant Portal

• Use has become mandatory from 1 March 2010

• Quick guides available at: http://webgate.ec.europa.eu/sesam

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Periodic Reporting

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Cost Claims – Form C

• Form C – models available per funding scheme• Report by partner• Per activity type (e.g. RTD, Demo, Mgt, Other)• Show total and max EC contribution• Show receipts• Third party completes attached form (only

under Clause 10)

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FORCE: Online Form C

• DG Research use FORCE – web-based tool to edit, save, print and submit FP6 and FP7 FORM C:• Prepare FORM C online for each project and each

partner• Print Form C• Submit electronically Form C• Signed paper version to be sent afterwards• Correction of Form C in case of errors/refusal of EC

• Access via ‘Participant Portal’

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FORCE: Online Form C - Printed

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FP7 Periodic Report: Process from a Participants point of view

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Reporting Costs for CSA

Co-ordination and Support Actions• Indirect costs are ‘up to 7%’ of direct costs (minus

subcontracting)

• How to report costs:

• Flat-rate (60%)• No RTD costs here, so the default is the 20% flat-rate – enter 20% (minus

subcontracting) and can claim back 7% in EC contribution row• Indirect costs are not audited or certified due to being a ‘flat-rate’

• Actual Indirect Costs (simplified or real)• Declare actual indirect costs in form and claim total up to 7% back in EC

contribution row• Indirect costs are auditable and included in certificate on financial statements

(if required)

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EC Guidance for Time-sheets (or equivalent)

• Can only claim for hours worked

• Kept by ALL staff working on the project

• Full name of beneficiary as indicated in the GA;• full name of the employee directly contributing to RTD project;• title of RTD project as indicated in the GA;• project account number should be indicated;• time period concerned (for instance on daily, weekly, monthly basis) according to

the beneficiary's normal practice;• amount of hours claimed on the RTD project. All hours claimed must be able to be

verified in a reliable manner;• full name and a signature of a supervisor (person in charge of the project).

• The complete time recording system should enable reconciliation of total hours in cases where personnel work on several projects during the same period

• Can also be useful for equipment – if it is within normal practice

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Example Timesheet – Guide to FP7 Financial Issues

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Certificates on Financial Statements

• Provides independent opinion on the claims made by the Form C

• Either external auditor or if public body can be done by ‘competent public officer’

• Annex VII Form D – provides terms of reference for auditors and procedures to be performed by auditor

• Looks at Personnel Costs, Subcontracting, Other Direct costs (equipment, consumables, travel), indirect costs (possible methods?), use of exchange rates, receipts and interest on pre-financing (Co-ordinator only)

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Certificates on Financial Statements

• Required for each period when a beneficiary is claiming more than €375,000 (cumulatively)

• Not required otherwise, even at end of project• Exception of two year projects – not required if

over €375,000 in first year, only at end• Eligible cost as ‘management activity’ (100%)• Suggest meeting with auditors for FP7 projects

early to discuss requirements and costs

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Certificates on Financial Statements

• (1) Cumulative EC contribution = EUR 190,000 + EUR 205,000 = EUR 395,000. A CFS has to be provided because cumulative amount > 375,000. After the submission of CFS, the calculation of the cumulative amount re-starts from 0 for period 3.

• It is important to remember that the CFS has to cover the eligible costs for the two periods (EUR 380,000 + EUR 410,000 = EUR 790,000), and not just the EC contribution

• (2) Cumulative EC contribution = EUR 250,000 +EUR 175,000 = EUR 425,000. A CFS has to be provided because the cumulative amount > 375,000. After the submission of the CFS, the calculation of the cumulative amount re-starts from 0 for period 5.

• The CFS has to cover the eligible costs for the periods 3 and 4 (EUR 500,000 + EUR 350,000 = EUR 850,000)• (3) EC contribution for period 5 = EUR 350,000 < EUR 375.000 therefore no need for CFS for the last reporting

period

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Exchange Rates and Reporting

FP7 Model Grant Agreement Annex II: Costs shall be reported in EUR. Beneficiaries with accounts incurrencies other than EUR shall report in EUR on the basis of theexchange rate that would have applied either:

- on the date that the actual costs were incurred or- on the basis of the rate applicable on the first day of the month following the end of the reporting period.

Hints and tips• Follow your institutional accounting practices;• When budgeting, set conservative exchange rate to avoid

overspend;• Establish mechanisms in consortium agreement to deal with

underspend (e.g. transfer funds to other project partners);• Inform project officer when dealing with over/underspend.

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Grant Agreement AmendmentsP

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• Modification to GA = Amendment• Amendment Guide for FP7

• Examples:– Adding beneficiaries– Change co-ordinator– Partial transfer rights and obligations– Project title, acronym, duration of project– Modification of reporting periods– Change of bank details– Add/remove special clause– Modification of annex 1

• Model letters – all requests in writing• ‘Entry into Force’ • Don’t need amendment for budget transfers

6) Project Closure

• Final report within 60 days after the end of the project• Periodic report• Final publishable summary of results, conclusions

and socio-economic impact as well as plan for use and dissemination of foreground

• Report covering wider societal implications of the project

• Final Payment• Co-ordinator to distribute final payment • Report to EC on the distribution of the payment to

the consortium• Submitted 30 days after the final payment

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7) Post-Project Tasks

• Distribution of final payment• Consortium agreement still active?• Commission audit• Technical audit

Remember!• ‘The beneficiaries shall keep the originals or, in

exceptional cases, duly authenticated copies – including electronic copies - of all documents relating to the grant agreement for up to five years from the end of the project. These shall be made available to the Commission where requested during any audit under the grant agreement.’

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Financial Audits and Controls

• Commission audit (or by appointed representatives)• Can look at finance, systems in place and accounting

and management aspects• Requires originals/duly authenticated copies (incl

electronic) of data upon request (including third party)• Commission sends provisional report to beneficiary• Respond to Commission report within one month• Final report issued by Commission within two months of

the deadline for comments

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Technical Audits

• By Commission or appointed S&T experts• Scientific, technological aspects and others relating to

the effective execution of the project• An assessment of fulfilment of project work plan,

relevance of work, resources used, management procedures, beneficiaries contributions, impact, ethics audit

• Commission send provisional report to beneficiary• Respond to review within one month• Commission to inform co-ordinator of decision• Guidance notes and template on “Project Technical

Reviews in FP7 Involving Independent Reviewer(s)”

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Further information and links

Sources of Information

UKRO Website: http://www.ukro.ac.uk

UKRO FP7 Grant Agreements and Finances page: http://www.ukro.ac.uk/subscriber_services/fp7/legal_financial

Includes Key Reference Documents:• Rules of Participation• Grant Agreements• Consortium Agreements

UKRO information services: http://ims.ukro.ac.uk

Use advanced search function on the UKRO Information Services!

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Important links to the Participant Portal

Participant Portal:http://ec.europa.eu/research/participants/portal

Login to access the Participant Portal services:http://ec.europa.eu/research/participants/portal/appmanager/participants/portal/login/

Creation of an ECAS account to log into the Participant Portal:https://webgate.ec.europa.eu/aida/selfreg

Technical helpdesk of the Participant Portal:DIGIT-EFP7-SUPPORT@ec.europa.eu

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Further Information

• EPSS Helpdesk• E-mail: support@epss-fp7.org • Tel: +32 2 233 3760

• IPR helpdesk Website• http://www.iprhelpdesk.eu/home

• European Commission FP7 Ethics Website• http://cordis.europa.eu/fp7/ethics_en

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