19.12.2006 - Finance Helpdesk Newsletter Number 7
FP7 Financial Info & FAQs
1 Day FP7 Financial Workshop in Brussels, Belgium
FP7 Third Country Agreements
FP7 Calls for Proposals
FP7 Call for Experts
New Cordis FP7 Portal
IST FP6 Coordinators Project Management Day Slides available
Finance Helpdesk Workshops
Register with us
FP7 Financial Info & FAQs:
Latest FP7 Rules – Updates:
a) Fixed FC overhead rate back to 20% from proposed 30%.
b) As we expected, the FP7 changes have created new problems. Although the intention in FP7 is to undo some of the problems for SMEs created in FP6, some newly identified problems have been created for SMEs. In particular;
As Commission cannot ask for Bank/Financial guarantees, an SME cannot coordinate if it does not have full financial resources to cover the project. It apparently also will not be able to receive more than 500,000 Euros if not a coordinator.
c) Overhead rates for CSAs (i.e. CAs and SSAs) reduced from 20% to 7%.
This will cause major problems for consultancies and many of the major ETP players. Even 20% overheads as was previously available was in fact very tight. Reducing it to 7% is totally unjustified and, in our opinion will leads to widespread abuse.
Below is a list of the Latest FP7 FAQs that have been answered:
1. Will SSAs in FP7 really only have 7% overhead allowed?
As of today, this is correct.
2. How will the status of an organisation claiming to be an SME be verified?
This is still under debate. Ultimately - at the end of the project the status will be verified by the auditor, but until then it will probably not be verified but based on self declarations.
3. What will happen to the charging rate of an organisation that changes status between an SME and a non-SME during a project; during a reporting period?
The charging rate must be modified at that time so from then on the different rate should be used. This is not retroactive
4. Is it correct that Universities will now have to charge Demonstration at 50% during derogation period?
5. What cost basis will an individual use in FP7?
Only marginal costs can be charged, not personnel costs.
6. Should Universities who used AC model in the past, chose the derogation option?
Only if they cannot calculate an overhead rate higher than 60% - most should be able to.
7. Is it true that as Commission cannot ask for Bank/Financial guarantees, an SME cannot coordinate if it does not have full financial resources to cover the project?
8. Is it true that as Commission cannot ask for Bank/Financial guarantees, an SME cannot be allocated more than 500,000 Euros in funding unless it has adequate financial resources to cover this amount?
The logic of the guarantee fund is that the fund will cover all risks, so we see no problem in having an SME receiving more than 500.000 being guaranteed by the fund. The Rules state that the Commission will do a financial viability check on all contractors receiving more than 500.000 € in EC contribution in a single project, but that dos not mean that they will be excluded if they are not fully sound. – we are making more enquiries on this one.
9. Is it confirmed that fixed overhead is 20%?
10. Is the Consortium Management at 100% still limited to 7% of EU contribution?
No - the ceiling level will be subject to contract negotiations - however very strong justification will be required for higher levels.
11. How will an SME that claims not to be able to identify indirect costs be handled? How will this be verified and will they be able to use the derogation model?
The SME will be asked to prove that its' accounting system does not allow it accurately to identify its indirect costs. Possibly verified by an auditor.
12. What will happen to organisations using the derogation for transition from AC after the transition period?
For projects started following calls published before 31/12 2009 the percentage is 60%. For projects following calls published after 1/1 2010 the percentage is supposed to be lower, however not any lower than 40%. This percentage will be paid till the end of the 7th FP. For the 8th it will be negotiated whether there will be this arrangement also, or whether all organisations have installed sufficient sophisticated accountancy systems in the meantime.
The idea is that this is a transitory arrangement.
13. In CSAs that cannot justify their full budget be reduced from 100% to 95% as in FP6?
Yes. This follows the financial regulation.
14. Can the EIB guarantee facility cover non-European SMEs?
The guarantee fund covers all those participants that pay into the fund and those that receive funding will therefore be all that have contributed 5%. If an organisation has received monies from the EC it is therefore covered by the fund. This means that ICPC countries are covered.
15. Is it true that final 15% being withheld will now always be 15% of the total funding rather than 15% of the final cost period in most cases in FP6?
Yes, as we change to a system of advances that are only settled at the end of the project.
16. If in an FP7 R&D a partner goes "silent" during a project and fails to provide necessary annual report, costs and/or Audit Certificate, will the other partners not be able to complete the project and be paid? Would this be a reason to access the guarantee fund?
The conflict resolution questions should be solved in the consortium agreement. The management is the responsibility of the consortium, which still has the collective technical responsibility. This is not covered by the guarantee fund and the guarantee fund does not relieve the consortium from the responsibility to manage the project. The fund only covers financial losses.
1 Day FP7 Financial Workshop in Brussels, Belgium:
To answer demand, the Finance Helpdesk will be holding an open 1 day FP7 Financial Workshop on 7 February 2007, in Brussels, Belgium.
The workshop will be aimed at project managers and is particularly relevant to anyone who wants to understand the FP7 Financial Rules and how to report correctly.
The Workshop will cover:
· Differences between FP6 and FP7
· FP7 Financial Rules
· Budgeting Rules
· Flat rate Overheads Vs Real Costs (FC Calculation)
· Derogation Scheme
· Cost Recording
· Eligible Costs
· In-House Financial Recording Systems
· Cost Reporting
· Management Reports (Form C)
· Audit Certificates
· Final Payments
Places are limited and will be allocated on a first register – first serve basis.
Cost to attend is 595€ and includes Workshop handouts, coffee and lunch.
To register, please contact via Email here.
FP7 Third Country Agreements:
The European Commission has issued a statement detailing the state of play on Third Country Agreements for the Seventh Framework Programme (FP7).
The agreement associating Israel and Switzerland to FP7 is expected to be applied provisionally from 1 January 2007. 'Proposers are hereby informed that subject to the accomplishment of the decision-making procedure, legal entities established in respectively Israel and Switzerland will be able to receive Community contributions for contracts signed after this date,' states the Commission.
For Norway, Iceland and Liechtenstein to participate, the European Economic Area (EEA) Joint Committee must first amend an EEA agreement. Subject to the accomplishment of this procedure, legal entities from these countries will then be eligible to receive Community contributions for projects under FP7 fro 1 January.
Memoranda of Understanding (MoUs) associating Turkey, Croatia and Serbia to FP7 are also expected to enter into force as of 1 January 2007. Researchers in these countries will be able to receive Community funding once internal procedures have been completed and the MoUs have come into force.
For further information, please visit:
FP7 Calls for Proposals:
The First FP7 Calls for proposals will open on 22 December 2006. On this day there will be a lot more documentation available. The Finance Helpdesk will go through all this material and inform you of any important financial information.
FP7 Call for Experts:
The Commission have opened a site for the registration of experts for FP7 https://cordis.europa.eu/emmfp7/index.cfm?fuseaction=wel.welcome. The site is called EMM "Experts Management Module".
Experts may either register themselves, or Organisations may submit lists of experts which they would like to be placed upon the Commission's register.
Registered experts from FP6 are being invited by email to update their details for FP7, and will have to reregister.
New Cordis FP7 Portal:
CORDIS, the Community Research and Development Information Service, has launched a new FP7 service. The service replaces the current 'Towards FP7' pages that have been available till now.
IST FP6 Coordinators Project Management Day Slides available:
The latest updated slides that were presented to IST Coordinators at the last FP6 Coordinators Project Management day have been uploaded under our Goodies section.
They give a lot more information then all their other ones. - Please note that they are targeted at FP6.
The presentations include:
· Financial Statements;
· Reports and Reviews;
· Audit Certificates;
To download, please press here.
Finance Helpdesk Workshops:
The Finance Helpdesk is holding the following upcoming Financial Workshops:
25/01/2007 1 Day FP7 Financial Workshop in Berne, Switzerland.
31/01/2007 1 Day FP7 Financial Workshop in Istanbul, Turkey.
07/02/2007 1 Day FP7 Financial Workshop in Brussels, Belgium.
13/02/2007 1 Day FP7 Financial Workshop at Tampere University of Technology, Finland.
14/02/2007 FP7 Financial Rules and Reporting Workshop in Reykjavik, Iceland.
The Finance Helpdesk is currently looking for opportunities and collaborators to hold additional workshops.
If you wish to work together with the Finance Helpdesk and Host either an Internal or Public Financial Workshop, then please contact us here.
Register with us:
If you received notification of this newsletter by email, then you have already registered with the Finance Helpdesk. If you are not registered then please do so here.