Financial FAQ - Implementation
Financial issues during the Implementation stage / 34 questions
Should all accounting documents be in English?
Of course, regular original partner organisation's accountancy documents can be in the partner's own language.
Bank account – SEPA
What are the advantages of opening a SEPA account?
Bank information - Trustee accounts
By law, the lead partner is forced to open a trust account. This means that the financial manager acts as a trustee and opens a trust account on behalf of the lead partner organisation. The account holder will be the financial manager. How could we provide this information in the application form?
Bank information – Internal reference
In the Progress Report (and Partner report) we are asked to state the “internal reference number” for the bank information (Cover sheet). What kind of information should be written there?
When the Programme or the Lead Partner is transferring the requested amount to the Lead Partner/Project Partner, the internal reference will be included in the note to the payee. Moreover, the number and the acronym of the project are in the note to the payee. This means that this information will be written in the partner's accounting statement for the respective transfer.
The internal reference should help the partners and/or their accounting departments to identify the incoming amounts. Many partner organisations have a special reference number that they would like to have connected to the payment. It is also acceptable if partners leave the field empty.
Changes in activities
What happens if we are not able to finish certain investments until the end of the project?
Cost itemisation list and Personnel costs
How to fill in Personnel costs in the cost itemisation list?
As no single invoice underlies the personnel costs the following is recommended to be filled in cost itemisation list:
• Column ‘Internal no°': e.g. labor contract number
• Column ‘Invoice no°': e.g. number of the latest payment order
• Column ‘Invoice date': e.g. date of the latest payment order
• Column ‘Specification of the invoice': reference to the timesheet,
• Columns ‘National currency' and ‘Exchange rate': EUR and 1.0000, because the currency exchange is done already in the timesheet,
• Columns ‘ERDF', ‘NOR', ‘ENPI': depending on the partner's fund, the total amount per WP of the timesheet (see section ‘Personnel costs_Report'), and
• Column ‘Payment date': latest payment date of the timesheet (see section ‘Personnel costs_Compilation').
In this way all personnel costs (net salary + obligatory contributions of the employer) are transferred from the timesheet to the cost itemisation list.
Is the responsibility described in the Programme Manual to be imposed on each implementing partner of the project? Does it mean that every single cost sharing operation within the project has to be agreed beforehand with relevant first level controllers? Does it mean that in case a cost sharing scheme is included in the partnership agreement, this particular document has to be validated by the first level controllers? Or is it enough to have a green light from first level controllers on the principal procedure (e.g. regulated in the written agreement on cost sharing method), which will be applied in the project?
This also includes agreement with the FLC about the documentation he will demand/accept.
In the Programme Manual it is written that “After the costs have been validated by the first level controller of the implementing partner, they are shared according to the agreed and documented cost sharing method.” The cost doesn’t need to be included in each partner’s first level control then?
According the Programme Manual (first sentence in chapter 5.4.3) the cost sharing procedure can be applied after the costs have been validated by the first level controller of the implementing partner. In case of advance payment the real costs incurred in the project cannot be proved at that stage. Should an advance payment note be validated by the first level controller, as well?
An example for better explanation: There are 1 implementing (IP) and 2 paying partners (PPs) sharing costs in equal shares. The IP asks for advance payment of 10,000 € from each PP - means he received 20,000 € plus he has own resources. Then the IP purchases the agreed goods/services and spends 27,000 €. This amount will be validated by the FLC of the IP, in the cost sharing invoice it will be stated that each partner's share is 9,000 € (1/3 of 27,000€). This amount will be then reported for all three partners. The IP will return the overpayment of 1,000€ to both PPs.
Can we report cost shares for a partner who has not yet reported own costs?
You may report cost shares for that partner, if this partner has transferred to the implementing partner or lead partner its own contribution related to the cost shares. In this case the proof of this payment is to be submitted to the JTS.
If the partner has not transferred anything yet, then the cost shares should be excluded from the report. As soon as the partner reports own costs, all cost shares related to that partner can be included in the report.
Can the project start its activities right after the approval by the Monitoring Committee?
We are lead partners in a project having partners from BY but not having ENPI budget. Can we spend part of the BY budget?
Is there a danger that investments, which are planned for the extension stage, can be rejected?
The project plans to pool the financial resources of all partners from the same country in a joint account at one appointed organisation. Thereby, a system of national financial coordinators will be set. From this account all expenditures, except for personnel costs, will be paid. Is such a model recommended by the Secretariat or are there any other models found by the Secretariat more effective?
First level control
Is a list of recommended first level controllers per country available for project applicants coming from countries with a decentralized first level control system?
Only for the so-called "mixed system", a pre-defined list of approved controllers is made available. (Please see the chapter on first level control of the Programme Manual for more details.)
Does each project partner have to have a first level control verification for each report by its own national first level controller? Or is it enough to have one first level controller in the Lead Partner's country?
How to integrate the invoice of the first level controller into the relevant reporting period?
How deep should the first level controller of the lead partner check the partner reports?
Are internal first level controllers eligible?
Is there a document which lists the requirements for the qualities of the first level controller?
Is it possible that several project partners from the same country share one first level controller?
Yes, several project partners from the same country can have the same first level controller.
There are two options:
a) Each project partner makes its own contract with the first level controller.
b) Partners can also share the first level controller using the method of cost-sharing. Please note that only external first level controllers can be shared. In this case all project partners shall conclude a cost sharing agreement. One project partner (Implementing partner) shall contract the first level controller and pay his invoices. The other project partners shall pay their share to the Implementing partner. Please also note that although the first level controller is contracted by one partner, all project partners have to have a designation certificate for their first level controllers.
First level control - ENPI
Is there a list of Belarusian companies performing first level control for projects in Belarus?
First level control - prices
Is there any information about cost estimations for first level control in each BSR country?
In centralized systems the first level control is usually paid by the national authorities, i.e. project partners do not pay anything.
In decentralized systems project partners have to pay for their first level controller on their own. It is recommended that the partners ask a potential first level controller for an offer.
Lead partner principle
How can the lead partner secure himself against problems – especially in financial terms?
Partner report form and other templates
Some centralised first level controllers have developed special reporting forms and other templates for the partners from their country. What should we do?
However, the national controllers have to observe the programme rules (e.g. calculation of personnel costs) and they have to use our templates for the first level control report, the first level control checklist and the first level control confirmation.
What happens if the partnership agreement is not signed until the deadline? a) If the partnership agreement is not signed before/soon after the end of the 1st reporting period (e.g. 31.7.2009), the project partners cannot report their costs in period 1, or can they report their costs belonging to period 1 in the 1st report anyway? b) If the partnership agreement is signed in period 2, can the project partner report its costs for both period 1 and 2 in the 2nd Progress report?
a) As stipulated in the Programme Manual: The partnership agreement has to be signed before the deadline for submission of the first Progress report (e.g. 1.11.2009). The programme cannot co-finance the expenditure of a partner who has not signed the partnership agreement. In light of this, the partnership agreement might also be signed after the end date of the first reporting period (e.g. 31.7.2009). In this case you have two options:
(1) You include the validated expenditure of the partner into the Progress report anyway. But your first level controller has to mark in his confirmation that the partnership agreement has not been signed. The programme will not pay the co-financing of the partner if the partnership agreement has not been signed until the date of approval of the 1st progress report.
(2) You include the validated expenditure of the partner into the Progress report only after the partnership agreement has been signed. But your partner has to be able to submit his validated partner report to you in time and you have to be able to include his costs in the Progress report until the due date.
b) Yes, you might report expenditure from periods 1+2 in Progress report 2. Please note that if the partnership agreement is not signed by the time the second progress report is due the project partner must be removed from the project partnership.
We are a large organisation having bulk payments and complex IT accounting systems (not only project-related), and due to them we have difficulties defining the payment dates. What can we do in this case?
When will project partners get the first payment? To which account will the Programme transfer the co-financing: to the project partner's account or to the Lead Partner's one?
Partners co-financed from ERDF will get their first payment after the first Progress Report has been approved by the Programme. This report is submitted ca. 12 months after the approval of the project. Depending on the quality of the report the checks last between 4 and 6 months. So the first payment can be expected ca. 1 ½ years after the project approval. Partners are asked to plan enough liquidity!
All co-financing will be transferred to the account of the Lead Partner. The Lead Partner has to transfer the amounts further to the respective project partners as soon as possible.
Progress report – Checksum
How can we avoid problems with the checksum?
Progress report – Error messages
How can we avoid error messages in the progress report?
The lead partners should be aware when calculating the own contribution in FR_5 (progress report) that the reporting form checks for each partner whether the sum of the Programme co-financing and the own contribution is exactly equal to the total expenditure. In cases where the ERDF/Norwegian co-financing amount had to be rounded up, the sums might slightly differ. Therefore please keep in mind that the own contribution (unpaid voluntary work plus financial contribution) has to be equal to the total expenditure reported minus the automatically calculated Programme co-financing in order to avoid any error messages.