Reporting/Payment Procedure

Gintas Janušonis & Gints PīpiķisJoint Technical Secretariat Lead Partner Seminar

13 October 2008, Riga

Reporting Procedure

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Six-months Reporting Period (RP):

November 1–April 30 and May 1–October 31.

PP send to FLC Partner Reports: 1 month after end of RP.

JTS sends out a pre-filled Progress Report form to LP.

LP submits filled Progress Report to FLC 2 weeks (latest) before deadline for submission to JTS.

In 4 months after end of RP the LP submits Progress Report to JTS.

Reporting Procedure

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Reporting/ Payment Procedure

Lead Partner

PP 1

PP 2

PP 3

Project Partners

Pre-filled Reporting

Form

Within 4 months after the end of Reporting Period

Progress Report

PaymentNotification

LetterAfter all open questions are

clarifiedPreparation of payment CA

Payment

JTS

AnswersClarification

Check of PRMax 6 months after submission

1 month (latest) before the end of Reporting Period

Reporting ProcedureProgress Report must be submitted to JTS:

In electronic and paper version; Confirmed by LP and FLC declaration; In English.

Supporting documents should be attached:

1. events documents (e.g. agenda, list of participants with signatures for each day, photos, see full list in PM, 10.1.2);

2. copies of outputs produced (e.g. studies, press articles, leaflets, pictures of infrastructure, etc.). 

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Reporting Procedure

Standard templates for Worksheets and Meeting participants lists should be used (available on www.latlit.eu – How to implement);

Progress Report approved by JTS – basis for CA to transfer the ERDF co-financing to LP;

LP is responsible for co-financing transfer to PP.

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Programme Document;

Programme Manual;

Subsidy Contract;

Relevant EU and national legislation including;

National Eligibility Rules;

Guidelines for First Level Controllers (FLC);

FLC guidelines for PP and LP.

Which ever rule is stricter - applies!

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Eligibility: Legal Framework

Sound Financial Management Council Regulation no 1605/2002 of 25 June 2002

The principle of efficiency is concerned with the best relationship between resources employed and results achieved.

The principle of effectiveness is concerned with attaining the specific objectives set and achieving the intended results.

The principle of economy requires that the resources used by the institution for the pursuit of its activities shall be made available in due time, in appropriate quantity and quality and at the best price.

 

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Main Principles

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General Rules Applicable to Project Budget:

Avoiding Corruption and Conflict of Interest;

No Double Financing;

Ownership of Project Results;

Public Benefit;

No Sub-Contracting Between PPs.

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Eligibility of Expenditure Costs are definitively born by the LP or PP and would

not have arisen without the project;

Expenditure has actually been paid out;

Expenditure is directly linked to the Project;

Expenditure is reported under the correct BL and WP;

Expenditure is reported in the same Reporting Period

as it was paid (with exception of costs sharing, if

relevant);

The reported expenditure must not exceed approved

eligible Project budget.

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Eligibility of ExpenditureSeparate accounting system is kept:

Project specific accounting code (Council Regulation No 1083/2006,Art. 60(d)) to record project costs in the accounting system.

Book-keeping lists/ overviews- list of all expenditures for all transactions relating to the project.

Project number, short project title, WP and partner title should be indicated, by writing it or stamping on the original invoices and checks/ payment orders and agreements. If space is available, also Programme title should be indicated.

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Eligibility of ExpenditureIt is LP’s responsibility to ensure that adequate audit trail is documented on all levels, including PP expenditure which implies that the LP has an overview of:

Who paid?

What was paid?

Where the related documents are kept?

Who verified?

LP should request that all PP Partners keep the documents related to the project in a safe and orderly manner at least until end of 2021.

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Cost SharingCost sharing expenditure shall be reported during the period the payment was made by the implementing partner

Paying partners must sign the cost sharing agreement:

Estimated total amount of expenditure

Kind(s) of expenditure

Indication of the implementing partner/paying partner(s)

Cost sharing method – division key (incl. its calculation)

with the relevant justification

Financial liability and procedure in case of ineligible costs

discovered or recovery of funds

Each PP should check the acceptability of the method beforehand with its 1st level controller

BL1 Personnel

BL2 Direct Administration costs

BL3 Indirect Administration costs

BL4 External Services

BL5 Travel and Accommodation

BL6 Equipment and Infrastructure

BL7 In Kind costs

BL8 Preparation costs

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Budget Lines

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BL1: Personnel costsIncludes:

Salaries, wages;

Employment taxes, social security;

Health insurance and pension contributions;

of the staff directly engaged in the project and employed by

the Partner institution on the basis of an employment/ labour

contract.

Requirements:

The actual salary rate has to be applied!

Costs must be certified on the basis of job agreements,

decrees, time sheets, record of tasks carried out.

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BL2:Direct Administrative costs

Directly linked to the project and fulfilling the following conditions:

Essential for the project’s implementation and would not have been incurred if the project had not been carried out;

If possible, consumables to be reported as project expenditure should be purchased separately from other office consumables.

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BL3: Indirect Administrative costs

(Overhead costs)- share of regular monthly payments for rent, electricity,heating, depreciation costs and other similar costs directlyrelated to project activities and calculated pro rata accordingto justified and clear method.

Usually the share calculation is based on:

The working time of staff members;

Office space used for the project.

Indirect Administrative costs can be up to 5 % of the totaleligible project budget.

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BL4: External Services Expenses paid by PP to external providers

External = not employed by PP institution

Basis: supply contracts, service contracts, enterprise

agreements, invoices

Costs are reasonable according to the standard rates in the

country where the contracting Partner is located; average

market rates resulting from public procurement procedures

apply;

Only expertise specified in the Application Form

Quality of produced outputs is to be ensured

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BL5: Travel and Accommodation

Travel costs are eligible only if they are directly related to

and essential for the effective delivery of the project

The most economic or reasonable way of transport must

be used

Despite the PP legal status (NGOs) the subsistence

allowances rates as well as accommodation costs must

not exceed the set limits for the public authorities under

national regulations

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BL6: Equipment and Infrastructure

Investments funded by the Programme should be

aimed at public use and their ownership and the way

of use cannot be changed five years after the project

has been finalized

Public procurement rules must be followed

Only investments specified in the Application Form

Quality of produced outputs is to be ensured

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Examples of Non-eligible Costs

VAT, other taxes and charges, if these are legally recoverable;

Bank transfers within Latvia and Lithuania; Expenditure which is not directly linked to the project

activities; Payments for political or religious activities; Fines, financial penalties and expenses of litigation; Luxury goods and services, presents; Cost-sharing method, when the LP is withholding a certain

amount of PP expenditure after receiving payment from CA.

See full list in Programme Manual, Chapter 9.6

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Revenue/ Currency Rate

Revenue:

if project generates revenue (up to 5 years after closure) it

must be recorded/reported and reduced from the eligible costs

Currency rates:

currency (other than EUR) must be converted into EUR with an

accuracy of four digits after the comma (e.g. 1.0234).

PP have to follow the daily exchange rate of the Bank of Latvia

and the Bank of Lithuania.

any foreign-exchange commissions and losses are not eligible.

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Partner Reporting Form

Changes in the Project LP must submit the official request for changes

(www.latlit.eu – ‘How to implement’) to JTS beforehand

As a rule, Project changes can be requested only once during the project implementation

Types of changes: Budget reallocation Change of project activities and/or outputs Prolongation of project duration

All minor changes (e.g. changes in contact information, minor rescheduling of activities, small budget implementation plan deviations) can be reported as ‘deviations’ in Progress Reports

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Audit and Control

First Level Control (FLC): 100% of expenditures.

Audit: on a sample basis.

Other Possible Checks:

– European Commission’s audit services; – European Court of Auditors;– National control bodies;– JTS/ Managing Authority;– Certifying Authority.

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De-commitment The MA has rights to withhold ERDF co-financing if it has not been

spent in time and if Programme is subject to decommitment procedure by EC

Projects having the under-spending rate of more than 20 % can be subject to the de-commitment procedure

Plan vs reality(INTERREG IIIB)

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