Only interest earned from pre-financing by the coordinator is reportable as income (see other questions re exchange differences on this account, which can/should be avoided by the coordinator holding funds for distribution to partners on a separate account in Euros, until distribution to partners - including himself – his general account.

This rule applies all projects where there is a coordinator and partner(s). Where CA or SSA has only one partner no separate account is required.

Please see contract annex all – general conditions which imply (sorry, the treatment is not specifically outlined, but follows the need for reasonable procedures of the coordinator) that the coordinator (and only the coordinator) needs the separate account..

“II.27 – Interest yielded by pre-financing provided by the Commission

1. In accordance with the provisions of the Financial Regulation15_ftn20, pre-financing granted to the coordinator on behalf of the consortium remains the property of the Community.

2. The contractor shall inform the Commission of the amount of any interest or equivalent benefits yielded by the pre-financing it has received from the Commission. Notification must be made annually if the interest in question represents a significant amount, and in any event when the request for interim payments and the request for payment of the balance of the grant is made.”

“II.3 - Performance obligations

3. The coordinator shall:

a) ensure that the tasks identified in Article 2 of the contract regarding accession to the contract are carried out in a timely manner.

b) be the intermediary for communication between the contractors and the Commission in accordance with the provisions of Article 11, with the exceptions foreseen in the contract.

c) receive all payments made by the Commission to the consortium and administer the

Community contribution regarding its allocation between contractors and activities in accordance with this contract and the decisions taken by the consortium. The coordinator shall ensure that all the appropriate payments are made to contractors without unjustified delay.

d) keep accounts making it possible to determine at any time what portion of the Community funds has been paid to each contractor for the purposes of the project.

The coordinator shall inform the Commission of the distribution of the funds and the date of transfers to the contractors.”

Also the following from the “Financial Guidelines” implies that the coordinator holds the funds as agent for the Commission (we repeat – only the coordinator).

“3.2.1.5- Interest yielded by pre-financing provided by the Commission

Pre-financing remains the property of the Community and any interest earned by the coordinator from that pre-financing must be taken into account in determining the final Community financial contribution (Article II.27 of Annex II (General conditions) to the FP6 model contract, reflecting the fourth paragraph of Article 5 of the FR164 and Articles 3165 and 4166 of the IM).”