Download Financial analysis

DG Justice
Financial
Analysis
FRC Kick-off meeting
Procedure
The financial officer will:
•
assess the financial statement by first checking that:
the
the
the
the
•
financial statement is signed
correct exchange rate has been used in converting costs to euro
costs reported were foreseen in annex II of the grant agreement
financial statement has been correctly filled in.
in most cases request a sample of supporting documents
Important: the payment period of 90days is suspended until receipt of the
requested information and documents
DG Justice
General Requirements
•
Costs reported should be registered in the accounting of the
beneficiary/co-beneficiaries.
•
Beneficiary should set up a cost-revenue centre specific to the
project in its accounts.
•
Although the final report must be done in euros, cost must be
declared in the currency in which they were incurred and
converted to euros according to provisions in the grant
agreement. E.g. salary in England is paid in GBP therefore cost
should be reported in GBP.
DG Justice
General Requirements
•
On request of documentary evidence, only copies of the
supporting documents should be sent to the Commission.
Originals should be kept with the beneficiary
•
Where the amount on the invoice is not the same as the
amount reported, please provide an explanation.
•
Before starting your project, kindly read the project
management
guide!
http://ec.europa.eu/justice/newsroom/files/programme_manag
ement_guide_en.pdf
DG Justice
Supporting documents required per
cost category
6 categories of costs
A – staff
B – travel
C – equipment
D – consumables
E – other direct costs
F – overheads
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Supporting documents – Staff costs
Permanent staff:
- existing contract
-
secondment letter
with description of tasks, reference of the
project, duration, time allocated to the project,
hourly/daily rate
- monthly salary slips
- timesheets – not necessary for staff working full time on
the project
- calculation of the hourly/daily rate requested.
DG Justice
Supporting documents – Staff costs
Permanent staff: Civil servants
Besides all documents required for permanent staff we also
require the following:
• In case of over-time – proof of payment of overtime or proof
of the additional days granted by the public body for
compensating the overtime worked in the project
• In case the person is replaced for his normal work - contract
of the additionally recruited person
• In case the staff cost does not represent an additional cost –
no additional documents are required however please note
that these costs are eligible only to the extent that they must
be covered by the own contribution to the project and cannot
exceed it.
DG Justice
Supporting documents – Staff costs
Non-permanent staff: specifically recruited for the project
-
specific contract linked to the project
with indication of tasks, reference of the project,
duration, time allocated to the project, hourly/daily
rate
-
salary slips – if the staff is on the payroll
-
Invoices – if the staff concerned is not on the payroll – invoice
must indicate the tasks performed, date, number of hours/days
worked and the price per hour/day
-
Proof of payment by bank transfer
DG Justice
Calculation of staff costs for staff not
fully allocated to the project
Annual gross salary + social charges
X
Total actual annual productive
working days or hours
actual days or hours
working on the grant as
substantiated by timesheets
•
•
Where:
Annual Gross Salary + Social Charges = costs actually paid by the
beneficiary in the timeframe of a year, including: salary, taxes, employer's
contribution for national security schemes etc.
•
Total actual annual productive time = total time in days or hours worked
in the timeframe of a year. Please note that time used on meetings,
activities, training and similar activities are considered as productive
working time.
DG Justice
Common reasons of ineligibility – staff costs
• Staff contracted by organisations other than those
mentioned in the grant agreement.
• Daily/hourly rates claimed are those budgeted
• Wrong calculation of daily/hourly rates
• Inflated daily/hourly rates
• Lack of timesheets or unsuitable timesheets provided
• Volunteer work costs
• Work done outside the eligibility period
For more information on timesheets and the calculation of the
daily/hourly rate kindly refer to the project management
guide.
DG Justice
Supporting documents – Travel and
subsistence cost
Concerns 2 categories of costs:
 Travel: travel costs directly linked to the project
(i.e. flight ticket, train ticket, local travel, etc.)
 Subsistence allowance: accommodation, meals, local travel
within the place of mission
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Supporting documents for the travel costs
• Travel invoice
• Transport ticket (boarding pass, train receipts, bus ticket,
etc.)
• Travel by car: reimbursement claim – up to the equivalent
of first class rail fare
• Proof of payment or reimbursement (in case flight is
purchased by a third party and not the beneficiary/cobeneficiaries)
• Signed attendance list (in particular for meetings and
conferences)
DG Justice
Supporting documents for the subsistence allowance
1.
-
2.
-
reimbursement on the basis of actual costs:
expenses reimbursement claim form
accommodation invoice
all receipts related to food, beverages, local transport,
and other expenses
attendance list signed by the participants
proof of reimbursement (bank transfer is preferred)
reimbursement of a lump sum (application of
beneficiary’s/co-beneficiaries' policy):
copy of the policy
reimbursement claim
proof of payment (bank transfer is preferred)
Calculation of the amount paid
Attendance list signed by the participants
DG Justice
Important notes on subsistence allowance
•
•
•
•
Subsistence allowance paid should be according to the normal
practice of the beneficiary and within the limits per country set
out
by
the
Commission
http://ec.europa.eu/europeaid/work/procedures/implementation/p
er_diems/index_en.htm
The amount of subsistence allowance/per-diem paid depends on
the duration of the travel: each successive 12 hour period is
equivalent to 0.5 of the subsistence allowance.
e.g duration of the mission: from 15 January, 11h00
until 18 January, 20h00 = 3.5 Daily allowances (DA)
Reimbursement should be made by bank transfer. Payment in
cash should be avoided
In case breakfast/ lunch/ dinner is offered during travel the
perdiem should be reduced accordingly.
DG Justice
Common reasons of ineligibility – travel and
subsistence allowance
• Missing documents – e.g. missing boarding pass or other
proof of travel
• Use of taxi where public transport could have been used.
• Undue subsistence allowance paid
• Travel and subsistence allowance costs incurred outside the
EU
• Missing proof of payment – bank transfer
• Subsistence allowance exceeding the threshold per county.
For more information on travel and subsistence allowance paid
kindly refer to the project management guide.
DG Justice
Supporting documents – Equipment
• Invoice showing date of purchase and delivery and proof
of payment
• Beneficiary's accounting practice
• Calculation of the depreciation amount requested.
Common reasons of ineligibility
• Invoice not addressed to beneficiary/co-beneficiary
• Full cost claimed (when this is not in accordance with the
beneficiary's/co-beneficiaries usual accounting practice).
• Cost claimed does not reflect the period and percentage
used for the implementation of the grant.
DG Justice
Supporting documents – Consumables
• Invoice and proof of payment
Common reasons of ineligibility
• Invoice not addressed to beneficiary/co-beneficiary
• Cost cannot be linked to the project, cannot be traced or is
part of the normal running costs.
• Costs claimed are not consumables but general office
supplies (pens, paper, folders) which are not eligible and
are covered by overheads
• Cost not foreseen in annex II of the grant agreement
DG Justice
Supporting documents for other direct costs and subcontracting
•
Invoices indicating name of publication, number of pages,
language, date of service provided, etc.
•
Proof of payment – bank transfer showing payment to the supplier
In case activities are subcontracted, the subcontracting
rules must be applied
Supporting documents relating to sub-contracting
- subcontracting agreement
- proof of payment
- proof of other offers received
- the tender procedure followed
DG Justice
Common reasons of rejection – other direct
costs
•
Invoice does not have any link to the project e.g name of
publication missing, date activity took place missing, etc.
•
Lack of the visibility of the EU financial support and EU logo on
publications
•
Costs not foreseen in annex II of the grant agreement
•
Cost incurred outside the eligibility period. Invoices can be dated
outside the eligibility period but the cost must be contracted
within the eligibility period and must relate to activities that took
place within the eligibility period. In case of publications and audit
costs the contract must be signed within the eligibility period. The
invoice and proof of payment may then be dated outside the
eligibility period.
DG Justice
Indirect Costs
No Supporting documents are required. Indirect costs do
not need to be justified.
They are calculated as a percentage of eligible direct
costs (percentage specified in article I.4.2 of the grant
agreement and in no way can exceed 7%) after analysis
of the costs by the Commission
Common reasons of rejection
• % overheads requested is higher than that agreed in article
I.4.2 of the grant agreement
• The beneficiary/co-beneficiary has an operating grant
running within the same period as the action grant.
DG Justice
EX-POST Audit
• Be aware that after the final EC contribution is established,
your project could be randomly selected for an ex-post
audit
=> all invoices, receipts, supporting documents,
accounting records should be available
• Keep all documentation for a period of 5 years after final
payment/recovery (Art. II.20)
• As a result of the audit the Commission may recover any
payments made to the beneficiary.
DG Justice
Thank you for your attention!
DG Justice