IMPLEMENTATION AND REPORTING

Payments and expenses

Advance payment

• Template (appendix to contract V) – Request for payment
• Correct date and address
• Data the same as in the Special Terms of the Contract
• The period for which the advance is requested – the duration of the project (specified in the specific terms of the contract)
• It is sent in the original, signature + stamp
• Financial Identification Form (FIF) – project account information (a new account is usually requested)
• Account form (confirmed by a commercial bank)

Payments on the project

• In IPA Countries : 

Earlier- Advance: 80% of the costs of the first year / Final payment: 20% of the grant
Currently – LP receives 20% for all partners and reimbursement after each reporting period.

• In other EU countries the pre-financing varies from Programme to Programme, for example in  Erasmus+ LP receives 80% of the costs in advance and the final payment of 20% of the grant after the Final report is being approved by the NA. 

Interim payments: if the project lasts longer than a year.
The deadline for payment used to be up to 45 days from the receipt of a valid application (and the approved financial statement) but this also may vary from Programme to Programme.
All costs must be incurred (invoice date) before the end of the project duration (except audit, evaluation and costs associated with final reporting) and NOT before the Contract signature.

All costs must be paid before sending the final report to the contracting authority

Resources

• Any person employed on the project who already receives a regular salary from an institution financed by the public budget cannot receive a new salary from EU funds
• The salary of that person can only be eligible as co-financing of the beneficiary (or partners), and co-financing will not lead to cash flow
• At the end of the project, the share of co-financing will be checked (% of changes in case of incomplete expenditure of funds)
• Persons who are civil servants can be hired as experts, but not by the consortium whose project it is, but on other projects

Human Resources

• Records of time spent on the project – Timesheet should be filled out by all people working on the project (except those who work 100% on the project)
• Subcontracted persons must also fill in the records of the time spent on the project if the contract defines the number of days
• Records of the time spent on the project are signed by project employees and/or external experts (the one who worked)
• The records of one’s work are usually confirmed by another person (either the project manager or an authorized person)
• Eligible amounts of beaches are gross amounts of salaries (gross 2), in accordance with the budget

Documenting human resources

• For employees: salary steaks on which the amount of gross 2 salaries must be seen (if not seen it should be written)
• Contracts for all newemployees / external associates / experts / companies
• Accounts, if applicable
• Time records on project/time sheets (except for persons engaged at 100% in the project)
• Proof of payment of salary (with taxes and contributions) or contract / invoice (receipts from payment)

Travel and per diems

• EU per diems normally cover accommodation, food, local transport
• Travel order form – a form from the „Official Newspapers” is recommended, all the rules of the Labor Code apply
• In the event that per diems exceed a non-taxable amount – taxes and contributions (as income) should be paid, and for persons who are not employed – the per diem can be covered through a service contract
• Travel: public transport is possible (ticket required)
• In the case of using the car, the user is free to choose to use a service or private car for travel as part of the project

Documenting travel

• Usually 0.25 Euro per km (difference if used BiH per diem)
• Included: toll, tunnel costs, ferry costs, fuel and depreciation
• Documenting a trip: a travel document with miles the car has passed,
• The travel order can indicate all travel costs, however the eligible amount will be the one covered by the project budget
• Travel documentation: travel order and short travel report, proof of payment

Other expenses

•  Invoices are documented
• Payment of costs should ideally be done directly from the project account or just-in-time transfer to the base account just before the withdrawal is made
• In the event that the partner bears the costs, the transfer of funds must take place immediately before the partner needs to spend this amount (example: salaries, other expenses)
• All costs must be incurred before the end of the contract (exceptions are audit and evaluation costs / costs related to the preparation of the final report), and be paid at the latest before sending the report / audit

Administrative expenses

• Indirect costs of the project
• Lump sum of up to 7% or exactly as defined by the special terms of the contract
• The eligible amount of administrative costs will be calculated together with the final report
• Only when the eligibility of all direct costs has been confirmed, will the amount of those administrative costs be determined
• Administrative costs are not shown in quarterly reports
• Redistributions between administrative costs and other budget items are not allowed
• They cannot be used to cover those direct costs of the action that are mentioned in the upper part of the budget
• All costs that the applicant/partner needs to administer the project, these are overheads (telephone, electricity, office supplies, rent, etc.), must comply with the conditions of eligibility of costs
• Administrative costs should not be stated in the report, nor should evidence of them be sent
• However, all expenses should be recorded in accounting records (where invoices are deposited)

TREATMENT OF VAT-A-RELEASE  (applicable only for non-EU and IPA countries)

• VAT is not an eligible expense, and the applicable rules grant tax refunds
• The user institution will use the official seal to certify the Request for VAT exemption (Indirect costs can be exempt from VAT if it comes to overhead costs (Electricity, gas, water, communication…), as well as other procurement of goods and services that indirectly contribute to the project realization and without which the partner would not be able to realize project activities. All costs of this nature can be exempted in accordance with the instructions of the national Indirect Taxation Authority)

The legal basis for financial assistance to BiH within the framework of assistance through instruments of pre-accession assistance (IPA) has been adopted the Instruction on the procedure for obtaining customs and tax exemptions in accordance with the Framework Agreement between Bosnia and Herzegovina and the Commission of the European Communities on the rules of cooperation relating to financial assistance to Bosnia and Herzegovina in the framework of assistance through instruments of pre-accession assistance („Službeni glasnik BiH“, broj 74/11), published on the official UINO website, at the address www.uino.gov.ba.The grant beneficiary must keep a record of which suppliers he has exempted from VAT and submit the information to the competent ministry based on the report contained in the Ordinance or in the implementation package.

Cost eligibility 

During the implementation of the project, any cost is therefore considered acceptable or ineligible. All ineligible costs are deducted from the total amount of the project.  Money that has not been spent from the project budget must be returned to the EU (directly affects the absorption rate of IPA funds). 

Common ineligible costs in the IPA (see GfA): 

• VAT
• Customs
• Buying land
• Bank charges
• Exchange rate differences
• Fines
• Used equipment
• Contribution in kind…

Eligible project costs

• Necessary for the implementation of the project (any cost related to the activity), the question of necessity over time?
• Actual and economical (market price-based) – market price check? Geographical criterion…
• There are no round amounts or lump sums, costs break down into the smallest logical units (by supplier and/or item)
• Vat Excl.
• Arithmetic correct calculation (the amounts must be rounded to two decimal places)

Cost Eligibility

• Specified in the project budget planed (or subsequent contract amendments)
• Created during the implementation of the project
• Possible to identify and verify, in particular must be recorded in accounting books
• Communicated to the contracting authority by a report
• Essential: ARTICLE 14. GENERAL TERMS AND CONDITIONS OF THE CONTRACT

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• Sources of funding
• Introduction to PM
• Preparation of projects