Legal and Financial Matters
Research Participant Portal
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‘I am even more confused but at least at a much higher
level.’
• Calls presented in a clearer and more coherent way, but
problems still exist with finding suitable calls and topics.
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Topic search option far from perfect;
Not possible to find topics by action type;
Documents (guides, FAQs) not easy to find at topic level;
LEARs cannot see draft proposals;
Problems with correspondence during grant preparation…
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Too many emails received by beneficiaries;
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Not possible to see who receives correspondence 
who does what?
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No emails received when GA should be signed, or
when actually signed by Commission
• Pre-financing received before noticing that GA was signed.
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FP7 mandates do not cover Horizon 2020
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Some beneficiaries (including UKRO subscribers!) still do not
have the extended mandate for their LEARs, thus leading to
delays in signature of GAs.
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If LEARs change, the appointment procedure must be
repeated (initiated by beneficiary not Commission!).
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Also, massive delays with validating new beneficiaries by
REA Validation Services (priority given to successful projects).
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28 EU Member States (Croatia joined in 2013)
• Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic,
Denmark, Estonia, Finland, France, Germany, Greece, Hungary,
Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands,
Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden,
United Kingdom
• Overseas Countries and Territories (OCT) linked to the Member
States
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Associated Countries
• Similar list to FP7 expected
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Third countries (funding will depend on GDP)
• BRIC no longer eligible for funding
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Association Agreements already in place or under way:
• Israel, Norway, Iceland, Turkey, Former Yugoslav Republic of
Macedonia (FYROM), Serbia, Albania, Montenegro, Bosnia &
Herzegovina, Republic of Moldova.
• Faroe Islands will finalise their agreement by 2015
• Ukraine and Armenia are discussing potential association
• Switzerland’s partial association to H2020 (Pillar 1, Euratom,
SE&WP) from 15 September 2014.
• N.B. Liechtenstein not associated to Horizon 2020
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Eligibility for funding:
• Only less developed economies (countries mentioned in
Annex A to the WP) are automatically eligible for EU funding.
• Developed and developing economies, such as the USA,
Canada, Australia, New Zealand, BRIC, Mexico, etc. will no
longer automatically qualify for EU funding.
 Funding may be provided in the following cases:
 Under the existence of a bilateral agreement specifying such funding
i.e. EU-US agreement for Societal Challenge 1
 When such funding is specifically mentioned in the call text or topic i.e.
INT-1-2014 or INT-2-2014
 When Commission deems participation of an entity essential for the
success of the project due to its expertise, access to data, etc.
Faster negotiation:
ramifications
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Time to grant = 8 months (5+3)
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Evaluators will no longer be allowed to make
suggestions for major changes: they will mark
proposals down to reflect weaknesses.
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Only proposals that are “ready to go” will be awarded.
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Two cases of proposals where EC decided to fund
projects but requested cutting the budget by a third!
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Puts significant pressure on:
• Commission services
 Budgetary constraints mean problems with meeting contractual
obligations (thus evaluation takes full 5 months!)
• Evaluators
 Under the first wave of calls, over 16 000 applications received but
only 5300 evaluators contracted (60 000 registered)
 Oversubscription means they only have 2 hours to evaluate
proposals, including writing feedback.
 Complaints: Lack of consistency during evaluation, irrelevant
comments, clear links missing between scores and justifications…
Single indirect costs rate
Simplifying project management and removing recurrent errors.
20% ?
60% ?
Real ?
Single model:
25 % Flat Rate
Simplified?
Disclaimer: Information not legally binding
Funding rate
Maximum
reimburseme
nt rates
Research and
technological
development
activities (*)
Network of
excellence
50%
75% (**)
Collaborative
project(****)
50%
75% (**)
Coordination
and support
action
Demonstration
activities
Other
activities
One project = One rate
for research actions
100%
 For all beneficiaries and activities
50%
100%
100%
(***)
in the grant.
 Defined in the Work Programme:
 Up to 100 % of the eligible costs for
(*) Research and technological development includes scientific coordination.
(**) For beneficiaries that are non-profit public bodies, secondary and higher
education establishments, research organisations and SMEs
(***) The reimbursement of indirect eligible costs, in the case of coordination and
support actions, may reach a maximum 7% of the direct eligible costs, excluding
the direct eligible costs for subcontracting and the costs of resources made
available by third parties which are not used on the premises of the beneficiary.
(****) Including research for the benefit of specific groups (in particular SMEs)
research and innovation actions;
 Up to 70 % for innovation actions
(exception for non-profit organisations
– up to 100%).
Disclaimer: Information not legally binding
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Direct eligible costs:
• 100% for Research and Innovation Actions (RIA) and
Coordination and Support Actions (CSA)
• 70% for innovation projects (100% for non-profit organisations
including universities)
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Indirect costs (overheads):
• Flat rate of 25%
No need to identify the costs covered or provide supporting documentation
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(MSCA fixed rate allowances)
Researcher unit cost [person/month]
Scheme
Living allowance*
Mobility allowance
Institutional unit cost
[person/month]
Family allowance
Research,
training and
networking
costs
Management
and overheads
ITN
3110
600
500
1800
1200
IF
4650
600
500
800
650
1800
700
RISE
2000
COFUND
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ESRs
3710
ERs
5250
650
* A correction co-efficient will apply to these costs
For COFUND: Unit costs are subject to a co-funding rate of 50% as established in the grant
agreement.
• Changed from FP7
• For Horizon 2020 only required for coordinators of actions
where EU-contribution exceeds EUR 500,000 unless the
coordinator is:
 a public body
 a higher or secondary education establishment
 an international organisation or body whose participation
is guaranteed by the government of an EU country or
associated country
 a private individual in receipt of a scholarship
Personnel cost
Actual personnel costs: calculation
Actual Personnel Cost =
Hours worked for the project x Hourly rate
Hourly rate =
Annual personnel costs
Annual productive hours
 The hourly rate is to be calculated per financial year
 If the financial year is not closed at the time of reporting, the
beneficiary must use the last closed financial year available.
Annual productive hours
1720 hours
Individual annual productive hours
• Formula: annual workable hours + overtime absences
Standard annual productive hours
• According to the beneficiary's usual accounting practices;
Minimum threshold: annual productive hours ≥ 90 % of
the standard workable hours
Disclaimer: Information not legally binding
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Using the last closed financial year goes against Commission’s
rules on using actual costs.
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Beneficiaries always loose money due to increments, etc.
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Commission: Calculating personnel cost was the biggest
source of financial errors in FP7. Simplification of the process
worth losing some money!
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UKRO needs input from subscribers (examples of calculations
to make a strong case against using the LCFY).
Change from FP7
Timesheets no longer required for staff employed 100% on
a Horizon 2020 action.
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Declaration of exclusivity – can be used by staff working
exclusively on an action either:
• for the entire reporting period, or
• from the beginning of the reporting period (day 1) until a certain
moment during that period.
Plans to allow for the declaration to be used from one
date to another, during the reporting period.
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VAT not deductible (recoverable) elsewhere is now an eligible
cost.
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HMRC:
“Grant in aid paid to fund research does not constitute consideration for any
supplies by the person receiving the funding to the person paying it. In these
circumstances, research that is wholly grant funded is not a business activity
for VAT purposes and is not within the scope of VAT. Any VAT incurred in the
course of such funded research is not deductible.”
Payments and reporting
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Pre-financing payment:
• Provides the beneficiaries with a float but remains the
property of the EU until the payment of the balance.
• Amount corresponding to 5% of the maximum grant amount
is retained by the Commission/Agency from the prefinancing payment and transferred into the ‘Guarantee
Fund’
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MGA does not indicate % of final grant available for
pre-financing. Constrained by EU budget issues.
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Grant agreement will specify amount
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Statements must be in euro
Rate to be used different to methodology in FP7
Beneficiaries with accounting established in a currency other
than the euro must convert the costs recorded in their
accounts into euro, at the average of the daily exchange rates
published in the C series of the Official Journal of the
European Union, calculated over the corresponding reporting
period.
Commission advises use of:
http://www.ecb.europa.eu/stats/exchange/eurofxref/html/index.en.html
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Statements must be in euro
Rate to be used different to methodology in FP7
Beneficiaries with accounting established in a currency other
than the euro must convert the costs recorded in their
accounts into euro, at the average of the daily exchange rates
published in the C series of the Official Journal of the
European Union, calculated over the corresponding reporting
period.
Commission advises use of:
http://www.ecb.europa.eu/stats/exchange/eurofxref/html/index.en.html
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Researcher A who is based in the UK has attended a
conference in Frankfurt. He paid for hotel accommodation
in EUR in Frankfurt and claimed back this expense from his
employer (Institution B) through his expenses claim.
The researcher was reimbursed in GBP at the daily spot
rate. Institution B is in the process of submitting a financial
claim to EC and includes the cost incurred by researcher A
in EUR.
Is this correct? Should the cost be claimed as per the hotel
bill in EUR, or at the GBP/EUR rate at which it was paid out
to the researcher?
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Wording changed in MGA on 1 October but Annotated
MGA still shows the old text!
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Updated Annotated MGA expected in December 2014.
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Bonus: MSCA Annotated MGA available soon.
Different requirement to FP7
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Horizon 2020: required by a beneficiary only at the end of a
project, where total EC contribution (excluding indirect costs) is
equal to, or higher than €325k
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Now claimed under Art.10 (Contracts for goods, works and
services) not Art.13 (subcontracting) of the GA.
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No audit strategy for Horizon 2020 available yet.
First (Commission) audits unlikely to happen before early
2016
Commission will create Common Audit Service (CAS)
Max 7% of beneficiaries in Horizon 2020 can be audited.
Commission audits can be started no later than 2 years
after the payment of the balance by the Commission
Promise of broader acceptance of participants’
accounting practices
Separate audits by ECA and OLAF possible.