Slide2 : Introduction Transnationality
Common goals
Tangible
Partnership
Innovation
General IIIB principles
Slide3 : Transnationality Minimum requirements
Difference between transnational issue and common issue
Transnational investment
General IIIB principles
Slide4 : Common Approach Starting point for cooperation is a truly common problem or a chance
Projects which are money driven nearly always fail General IIIB principles
Slide5 : Tangible Results Innovative to the common benefit
Impact on territory
Visible and concrete
Actions can be tangible
General IIIB principles
Slide6 : Partnership Guarantee on implementation
Consistent and balanced
Relate to the project objectives
General IIIB principles
Slide7 : Innovation Partnership
The issue
The approach
The techniques General IIIB principles
Slide8 : Content Important financial aspects in Application Form
How to prepare an application
Conclusion and tips Crucial Elements in Financial Assessment
Slide9 : Introduction Certain aspects relating to finance and management are crucial to all IIIB programmes
Difference between preparation phase and implementation phase
Point of view JTS and Assessors
Advice to International Steering Committee
What aspects are closely looked at? Crucial Elements in Financial Assessment
Slide10 : Important aspects Value for money
Partnership / Contributions
Budget consistency and transparency
Financial management structure
Crucial Elements in Financial Assessment
Slide11 : Value for Money Crucial Elements in Financial Assessment Why important
Proportionate
Cost effectiveness
Competiveness
Penny wise, pound foolish
Mix of finance and content related issues
Slide12 : Partnership / Contributions Crucial Elements in Financial Assessment Balanced partnership
Balanced contribution
Early commitment from partners
Letters of commitment
Letters of intent
Financial implications should be clear (also contribution to management)
Slide13 : Budget consistency and transparency Crucial Elements in Financial Assessment Consistency between action plan / budget lines / total budget
Detailed description of what will be done
It can never be too detailed
Public procurement and state aid rules must be complied with
€ 236.000 for services and purchases
€ 5.9 million for works
De Minimus rule (€ 100.000 over 3 years to private companies)
Slide14 : Financial Management Structure Lead Partner principle
Centralised or Decentralised management system
Co-ordination mechanisms / audit trail
Reporting structure
Finance project management costs
Borne by lead partner (including co-financing)
Borne by all partners (invoices to partners) Crucial Elements in Financial Assessment
Slide15 : 100 % commitment
Appoint full time coordinator
Political / managerial support
Ensure unrestricted information flow across all partners
Break budget and activity down to basic elements and agree
Ensure that all partners agree action plan and budget responsibilities
E.g. contribution to management costs and transnational activities
Many projects have not specified the budgets for each partner further than required by the application form. This makes good financial monitoring difficult.
How to prepare application form
Slide16 : A well detailed partner budget should be broken down by:
budget lines
work packages or other sub-components of a project
milestones or phases (in line with planned activities)
Recommendation: prepare such details before presenting the application. Otherwise, immediately after funding approval
Establish website (and use)
Be professional
No secrets
How to prepare application form
Slide17 : Conclusion and tips Keep regular contact with programme secretariat and partners
A good application and action plan assists in implementation
A problem shared is a problem halved
Good preparation is an investment
Preparation takes longer than assumed
Proper control assists all participants and contributes to successful implementation
The Devil is in the detail Crucial Elements in Financial Assessment
Slide18 : Questions? Crucial Elements in Financial Assessment
Slide19 : Contents Centralised vs. Decentralised
Financial Reporting Procedures
Audits
Success factors (implementation)
Financial Management Approaches
Slide20 : Centralised vs Decentralised Lead partner bears overall responsibility
Each individual partner responsible vs more responsibility for lead partner
Centralised or decentralised internal/external audit
Centralised or decentralised bookkeeping
Agreements in Partner Agreement !
Financial Management Approaches
Slide21 : Centralised Management System Centralised collecting of administrative and financial data
One central budget for investments and common activities
Partners contribute to central budget
Advantage: Clear overview and constant monitoring
Disadvantage:
Lot of work
Risk of creating ‘lazy’ partners
Financial Management Approaches
Slide22 : Decentralised Management System Each partner has own administration and budget
Partners pay own invoices
Keep own books
Responsible for development and delivery of agreed projects
Audited payment claims by internal auditor
Financial Management Approaches
Slide23 : Typical problems Often, partners are not familiar with Interreg reporting procedures and regulations. Frequent problems are:
Incorrect or inconsistent currency conversion (using bank rates incl. charges instead of official rates; not applying rate of date of payment)
Wrong calculation of staff cost (e.g. adding overheads; not based on specific salaries)
Mistakes in manual transfer of figures from one to another form
Wrong totals or changed wording in auditor confirmation sheet
Unclear classification of expenditures by budget lines: expert cost under promotion or under experts, travel cost under conferences or under travel cost etc.
Uncertainty regarding the eligibility of expenditure
Conclusions:
What can be done by the financial manager, should not be left to the partners
Partners need regular assistance in preparing financial reports
Financial Management Approaches
Slide24 : Reporting procedures Half yearly reports
Payment claim
Activity Report
Forecast Report
Templates are obligatory
Templates available from secretariat Financial Management Approaches
Slide25 : Administrative requirements Reports costs actually incurred and related to the project
Eligibility period
Aggregated overview of expenses
Per category of expenditure
List of invoices
Reference documents providing proof of payment (i.e. a print of the ledger or a print of your financial system which makes clear that invoices have actually been paid).
Financial Management Approaches
Slide26 : Reporting procedures 1. Financial manager sends individual files to partners containing:
budget (detailed by work packages and budget lines)
previously reported expenditure
exchange rates for automatic conversion
2. Partner fills in the forms: staff unit cost rates and time sheets; individual expenditure made until 1.5 months before Interreg reporting deadline.
3. Partner sends audited and signed forms to Financial Manager for checking, together with copies of all invoices paid (duly numbered, indicating date of payment)
Financial Manager checks, consolidates, prepares the summary report and sends it to the auditor (internal or external)
Audited payment claim to secretariat Financial Management Approaches
Slide27 : Reporting procedures All projects managed by Haute Finance have opted for decentralised auditing to limit the LPs risks:
Each partners arranges auditor confirmation for his expenses
Forms for partner auditor confirmations, although not requested by Interreg, are identical to the ones for the LP;
LP arranges total-project auditor confirmation based on partners single confirmations and after auditing expenses from common account Financial Management Approaches
Slide28 : Auditing
The Interreg requirement:
Interim reports may be audited internally (by auditor from another department of partner’s organisation than the one spending)
Final report must be audited externally.
In certain countries, a.o. Slovenia, there are ‘first level controls’
National cofinancing audited by Ministry of Environment, Spatial Planning and Energy (MESPE)
Private cofinancing audited by private auditor
Financial Management Approaches
Slide29 : Pros/ Cons internal / external Auditors Internal auditor may be cheaper (not always), but often is not familiar with Interreg regulations
Many partners have a regular external auditor for their routine audits for their organisation. These auditors may do the Interreg auditing at moderate cost, but are often also not familiar with Interreg regulations.
An external auditor, if not used for interim reports, may decide to audit all expenditures from the project start (at least by sampling). Then the total audit cost may be higher than using an external auditor from the beginning.
External auditors specialised in Interreg/ Structural Funds are normally not chosen by the partners due to higher cost rates.
This creates a higher burden on the financial manager to advise partners on how to interpret EU regulations.
Financial Management Approaches
Slide30 :
Financial Management Approaches City council of Ljubljana Management budget (PMT) Partner 2 Partner 4 Partner N Partner 3 City of Ljubljana Audited Check on correctness
and completeness Audit:
- CCL
- PMT
- Total Alpine Space Secretariat
Rosenheim Reporting Scheme
Slide31 : Success factors Data design of management structure, (handbook creation) procedures is only the first step !
Main succes factor is IMPLEMENTATION of this structure.
Succes factors for implementation are: involvement from partners, support for chosen structure and procedures, available resources within project for (financial) management and support from Lead Partner organisation.
Financial Management Approaches
Slide32 : Success factors Keep handbook concise / easy to read; keep it as simple as possible
Instruct partners in meetings or face to face (bilaterals)
Be available for questions and problems
Arrange things in an early stage of the project
Good cooperation between finance manager and others within the management structure of the project
Financial Management Approaches
Slide33 : MT Building bridges for expertise and knowledge transfer! Please don´t hesitate to contact MT for further information or visit MT’s website
www.interact-eu.net/mt
Feel free to contact also
Hen Gerritse, hen.gerritse@hautefinance.nl
Joep de Roo, joep.deroo@hautefinance.nl
Slide34 : General Setup this afternoon Budget lines explanation
Two relevant programmes
CADSES
Alpine Space
Definition of budgetlines / applicants manual / guidelines
Examples / practice
Differences between programmes
How to fill in the Appliation Form
Introduction afternoon programme
Slide35 : Budget lines Project Co-ordination
Personnel / staff
Meetings and seminars
Travel and accomodation CADSES Programme
Slide36 : Project Co-ordination Coordinating a transnational project business as usual?
Specific difficulties?
Easy to understimate?
A job for the “left overs” in a organisation?
Specific requirements for the managers?
CADSES Programme
Slide37 : Project Co-ordination CADSES Programme Tip: Present Co-ordination as separate action in Apl. Form
Slide38 : Personnel / Staff is the archive staff of a organisation eligible?
Is the personnel of your companies restaurant eligible?
Message: be reasonable and transparant CADSES Programme
Slide39 : Personnel / Staff Assigned to operation – additional activities
Closely related to activities in activity plan
Project manager/ Coordinator / Financial manager
But also: communication, support, administrator. auditor, legal advice, content advice etc.
Real salaries plus social security and other remuneration-related costs
Based on payslips, timesheets CADSES Programme
Slide40 : CADSES Programme
Slide41 : Meetings and seminars Define the objectives of meetings and seminars
Is a meeting on the Bahamas eligible?
’Again: be reasonable and transparant concercing the frequency and location CADSES Programme
Slide42 : Meetings and seminars All costs related to organisation of meetings, seminars,conferences under this budgetline
Rent of premises, equipment, translators
Lunches, dinners etc. not covered by the DSA
Tip: Use a time-related planning scheme and standard costs for meetings and seminars
E.g. 3 thematic workshops (a € 3500) and 1 open seminar (a €15.000) each year CADSES Programme
Slide43 : Meetings and seminars CADSES Programme
Slide44 : Travel and Accomodation Costs related to international or national travel related to the project
Important to keep all tickets, invoices and receipts (from the inception of the project)
Not for travel in first class and overnight stay in 5* hotels
Costs for overnight stays should not exceed the daily subsistence allowances given by commission
http://europa.eu.int/comm/europeaid/perdiem/perdiem.pdf
E.g. for Slovenia € 170 CADSES Programme
Slide45 : Travel and accomodation CADSES Programme
Slide46 : Coffee break Coffee break
Slide47 : Budget lines External experts and consultants
Infrastructure investments
Equipment
General expenses and others Alpine Space
Slide48 : External experts and consultants Why? Is it the expertise or to fill in a shortage of own staff ?
What? Content, finance, management?
How? A coaching role? Alpine Space
Slide49 : External experts and consultants Costs for hired expertise
Research, studies,
Management, Co-ordination, financial management
Audit costs
Public procurement rules
Recommended maximum rate of € 700 - € 800 a day
Alpine Space
Slide50 : External experts and consultants
Alpine Space
Infrastructure investments : Infrastructure investments wide definition. More than physical infra structure?
Are computers for your project an investment?
How can the renewal of a medieval church tower in a city be eligible in a transnational programme?
Slide52 : Infrastructure investments Owing to limited resources, only small-scale infrastructure investments are eligible under INTERREG IIIB. Motorway, main road construction and other similar infrastructure are excluded.
Remember the Structural Funds regulations, public procurement rules, State Aid rules, Community publicity and information requirements and environmental legislation.
Who will be the owner of the investments?
Alpine Space
Slide53 : Alpine Space
Slide54 : Equipment The project manager wants to lobby for the project and is invited for a gala dinner with the minister. He buys a smoking. Is this eligible equipment?
Is this necesarry for a succesfull implementation?
Consider the cheapest solution. Think also of leasing constructions Alpine Space
Slide55 : Equipment Only equipment essential for the delivery of the project is eligible
Computers, mobile phones, faxes etc
Cost of depreciation
During the project
Alpine Space
Slide56 : General costs and others Be carefull and do not consider it as the the project budget bin
Also costs under this category need justification and they must be directly linked to the objectives of the project! Alpine Space
Slide57 : General costs and others General costs should include office costs such as stationary (excluding staff and equipment),overheads (indirect costs such as electricity, rent and insurance calculated and charged tothe project on a pro-rata basis) and other eligible expenditure incurred during theimplementation of the project which does not fall under any of the other budget lines.
Often limited to a maximum of 5% of the project’s total eligible cost. Alpine Space
Slide58 : General costs and others Alpine Space
Slide59 : Applicant’s manual / Guidelines for project promoters
CIP and Programme Complement
Guidelines for Interreg IIIB
Community regulation
448/2004 (Eligibility of expenditure)
1159/2000 (Information and publicity)
1260/1999 (General provisions)
448/2001 (Financial corrections) Important documents
Slide60 : Future for transnational cooperation A bright and sunny future
Budget doubled
Pre defined priorities
Cooperation areas still under discussion
75 percent ERDF
Less bottom up
higher efficiency
Conclusions and expectations
Slide61 : MT Building bridges for expertise and knowledge transfer! Please don´t hesitate to contact MT for further information or visit MT’s website
www.interact-eu.net/mt
Feel free to contact also
Hen Gerritse, hen.gerritse@hautefinance.nl
Joep de Roo, joep.deroo@hautefinance.nl