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Table of Contents:

FP7 periodic report



Rules

Description

Payment Time
Payment Clock

  1. According to Article II.5 of the contract, the  grant agreement must be processed according to strict time limits. If the Commission fails to execute the payment within 90 calendar days,  late interest will be automatically paid to the consortium. The Payment Clock is the mechanism which accounts for the payment time in accordance with the grant agreement.
  2. The payment clock starts as soon as the first submission of the report is made by the coordinator.
  3. The Payment clock is suspended if the PO rejects the submission of the periodic reports.
  4. For subsequent sessions, the clock is started on each submission and suspended on each rejection.
  5. The payment time is calculated by the NEF application.
  6. Original signed financial statements (Form Cs) must be received by the Commission before the execution of the payment. If it is not the case, the payment clock will be suspended at one of the very last steps of payment processing, and the coordinator will be reminded to provide the missing forms. 
  7. The payment time is calculated at the time of the bank transfer, and taking into account the suspensions as explained above. At the time of the bank transfer, the coordinator receives an email notifying the payment with a number of reports, including a report on the payment time calculation.

Certificates of Financial Statements (CFS)

  1. The Certificate for Financial Statement (CFS) is mandatory for all beneficiaries as soon as the cumulated requested funding exceeds 375,000€ (325,000€ for CIP projects) for a project by a beneficiary. CFS are detailed in ANNEX VII of the contract which may be found on the following URL: ftp://ftp.cordis.lu/pub/fp7/docs/fp7-ga-annex7d_en.pdf
  2. If a CFS is required but not submitted, the beneficiary will be informed that his/her costs will not be taken into account for the payment (temporarily rejected). The coordinator will receive the same message upon submission of the report.
  3. The requirement for a CFS may be waived for beneficiaries who have a Certificate on the Methodology (ftp://ftp.cordis.lu/pub/fp7/docs/fp7-ga-annex7e_en.pdf). A Certificate on the Methodology must be granted by the Commission before it can be used in a cost claim. Certificates on the Methodology are not valid for CIP Projects.

Cost reimbursement rates

  1. Cost reimbursement rates are automatically set in the NEF application on the basis of the type of legal entity as registered in PDM.
  2. The Web tool does not allow modification of the reimbursement rates.
  3. If a beneficiary deems his/her reimbursement rates are incorrectly set by the NEF application, he should alert the coordinator and the PO, and ask the Legal Entity Appointed Representative (LEAR) of his/her organisation to make the appropriate modifications in the PDM database. This process is not a simple one. In order not to delay the payment, it might be advisable that the financial statement be submitted in parallel to the change process initiated by the Legal Entity Appointed Representative (LEAR).

    Experience shows also that in most cases, the reimbursement rate is correctly set, but the person responsible for the financial statement of specific projects is not aware of what it actually is. This can be clarified quickly by contacting the PO first.

Rules for Indirect Cost Model (ICM)
(ICM)

  1. As for reimbursement rates, the beneficiary cost models are set in the Web tool on the basis of the data available in the PDM database.
  2. The ICM of a beneficiary is unique and valid for all FP7 projects in which this beneficiary participates.
  3. If a beneficiary deems his/her ICM is incorrectly set in the Web tool, he should alert the coordinator and the PO, and ask the Legal Entity Appointed Representative (LEAR) of his/her organisation to request the appropriate modifications in the PDM database. This process is not a simple one. In order not to delay the payment, it might be advisable that the financial statement be submitted in parallel with the change process initiated by the LEAR.

    Experience shows also that in most cases, the reimbursement rate is correctly set, but the person responsible for the financial statement of specific projects is not aware of what it actually is. This can be clarified quickly by contacting the PO first.

Average Personnel costs for FP7 Grant Agreements

Acceptability criteria for average personnel costs have been revised to accommodate more methodologies.
New criteria
- Usual accounting practices
- Average based on actual costs in statutory accounts (no budgeted or estimated items)
- Exclusion of ineligible costs as defined in the FP7 Rules for Participation and model grant agreement and exclusion of costs claimed under other cost categories (to avoid double funding)
- Productive hours: usual practice, verifiable and reflecting actual working standards (in practice general rules, also applicable for non-averages)
Therefore, the Certificate on Average Personnel Costs (CoMAv) is no longer mandatory to charge average personnel costs on FP7 projects but it remains an option for beneficiaries applying averages for personnel.
Form D (CFS) and Form E (CoM/CoMAv)- annex VII to the model grant agreement- have been updated accordingly.

Link to cordis to new Forms D and E

Beneficiaries who have an approved certificate methodology covering average personnel costs and either go on applying their approved methodology or revert to their usual accounting practice if compliant with the new criteria.
In my case what can I do ? 

Link to: OPERATIONAL IMPLEMENTATION OF THE SIMPLIFICATION MEASURES ADOPTED BY THE COMMISSION ON 24/01/2011 
ftp://ftp.cordis.europa.eu/pub/fp7/docs/c-2011-174-final_en.pdf

Impact on CFS
The provisions regarding the submission of a CFS remain unchanged.
If a beneficiary has a certified COM (indirect costs and average personnel costs), the obligation to submit intermediary CFS is waived. A CFS shall be submitted at the time of the final payment if the 375K threshold is reached.
CoMAV (ie certificate on average Personnel Costs only) 
A CFS is required whenever the cumulative EU contribution claimed not covered by a CFS reaches EUR 375.000

FP7 Projects: Flat rate for SME owners

The possibility to request a Certificate on Average Personnel Costs (CoMAv) no longer
exists for SME owners or natural persons who do not receive a salary.
• The flat-rate system will directly apply to SME owners or natural persons who do not receive a salary (mandatory), except for those who have a previously approved CoMAv.
• SME owners or natural person having obtained prior approval of their methodology 
 (CoMAv) are entitled either to continue using the approved methodology or to opt for flat-rate financing.
It is recommended to inform the Commission at
RTD-FP7-Average-Personnel-Rate-Certification@ec.europa.eu
• The flat-rate system is of retroactive application from the beginning of FP7 for all SME owners and natural persons without an approved CoMAv. This may give rise to adjustments for ongoing projects. In addition, auditors will refer to the flat rate system when auditing personnel costs during closed projects whenever applicable.
• The hourly fixed rate is used for the duration of the project.

How to calculate SME Owners rate?
You should apply the following formula:
Hourly rate = (Annual living allowance / 1575) * (country correction coefficient /100)
For sake of ease, a calculator for hourly rates is available on Cordis 
ftp://ftp.cordis.europa.eu/pub/fp7/docs/cordis-sme-owners-rates_en.zip
You need to have the following data available to use it:

  • the reference year of the call for proposals under which your project was selected for funding
  • the country where you are based
  • your seniority / experience category (early/ experienced/ very experienced)

CIP Projects: Flat rate for SME owners

Introduction of a flat rate financing for SMEs owners not receiving a salary

  • In all grants for actions signed under the Competiveness and Innovation Framework Programme ("CIP Programme"), the Union financial contribution related to the own personal work of owners of SMEs who do not systematically receive a salary shall take the form of flat-rate financing.
  • Flat-rate financing shall apply to SME owners who do not receive a salary under the grant agreements of the CIP already signed and grant agreements signed in future.
  • The flat-rate reference shall be the yearly reference rate for monthly living allowances established in the annual work programme adopted under Article 6 of Decision 2006/973/EC (FP7 People Work Programme)
    The value of the work, considered as eligible direct cost, performed by SME owners who do not receive a salary shall be determined by multiplying the hours worked in the project by the hourly rate to be calculated as follows:
    (Annual living allowance corresponding to the appropriate research category published in the 'People' Work Programme of the year of the publication of the call to which the proposal has been submitted divided by standard number of annual productive hours) multiplied by (country correction coefficient published in the 'People' Work programme of the year of the publication of the call /100)
  • The standard number of productive hours shall be equal to 1 575.
  • The reference rate for early-stage researchers shall apply to SME owners of start ups with a professional experience of up to two years.
  • The reference rates for experienced researchers shall apply to
    1. SME owners with a professional experience of two to ten years;
    2. SME owners with more than ten years of experience.
      More detailed information can be found in the updated Guide to Financial Issues available at http://ec.europa.eu/information_society/activities/ict_psp/participating/grant_agreement/index_en.htm .
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