General Eligibility Conditions for Actual Costs

2. General eligibility conditions for actual costs

In order to be eligible, actual costs must be: ? actually incurred by the beneficiary/affiliated entity, i.e.: ? real and not estimated, budgeted or imputed and ? definitively and genuinely borne by the beneficiary/affiliated entity (not by any other entity) ? incurred during the action duration, i.e. the generating event that triggers the costs must take place during the action duration set out in the Data Sheet. If costs are invoiced or paid later than the end date, they are eligible only if the debt existed already during the action duration (supported by documentary evidence) and the final cost are known at the moment of the final report. Example: Costs of services or equipment supplied to a beneficiary may be invoiced and paid after the end date of the action, e.g. because of warranty periods, if the services or equipment were used by the beneficiary during the action duration. By contrast, costs of services or equipment supplied after the end of the action (or after GA termination) are normally not eligible. ? entered as eligible costs in the estimated budget, under the relevant budget category in Annex 2 This requirement is in practice automatically ensured by the IT system, since the financial statements mirror the budget categories that are available for the estimated budget. The only thing you need to watch out for, is whether all the special cost categories (visible in the estimated budget and financial statements for the Programme) are really eligible under the specific call you applied for (see call conditions). If not, you should leave those columns empty and NOT enter any costs (they are ineligible and will be rejected). The requirement also has no impact on budget flexibility; costs may be transferred between beneficiaries and eligible budget categories without amending the Grant Agreement, under the conditions set out in Article 5.5. ? connected to the action and necessary for its implementation as described in Annex 1, i.e. to achieve the action’s objectives The grant cannot be used to finance activities other than those approved by the granting authority. Example: The activities of the project cost less than foreseen so the beneficiary decides to conduct additional activities including for example hiring additional staff, organising an additional event, renewing office equipment. Additional activities regularly require a change of the description of the action (Annex 1). To be eligible, such reallocation of “savings” need to be pre-discussed with the granting authority and may regularly require an amendment. ? identifiable and verifiable, i.e. come directly from the beneficiary/affiliated entity’s accounts, be directly reconcilable with them and supported by documentation The records and supporting documents must show the actual costs of the work, i.e. what was actually paid and recorded in the beneficiary’s profit and loss accounts (see Article 20). For a consolidated list of eligibility issues relating to specific situations/legal framework in individual countries, see AGA — List of country-specific issues. EU Grants: AGA — Annotated Grant Agreement: V1.0 DRAFT– 01.04.2023 39 Costs must be calculated according to the applicable accounting rules of the country in which the beneficiary is established and according to the beneficiary’s usual cost accounting practices. Example: If a beneficiary always charges a particular cost as an indirect cost, it must do so also for EU and Euratom grants, and should not charge it as a direct cost. Be aware, however, that the usual cost accounting practices may NOT be used as an excuse for non-compliance with other Grant Agreement provisions. You must bring your usual cost accounting practices in line with the Grant Agreement (e.g. conditions for calculating personnel costs; conditions for charging depreciation costs, etc.). ? in compliance with applicable national laws on taxes, labour and social security and ? reasonable, justified and must comply with the principles of sound financial management, in particular regarding economy and efficiency (i.e. be in line with good housekeeping practice when spending public money and not be excessive). ‘Economy’ means minimising the costs of resources used for an activity (input), while maximising quality; ‘efficiency’ is the relationship between outputs and the resources used to produce them. Examples: 1. The beneficiary may NOT increase the remuneration of its personnel, upgrade its travel policy or its purchasing rules because of the grant support. 2. Entertainment or hospitality expenses (including gifts, special meals and dinners) are generally not eligible. 3. Tips which are not obligatory are not eligible. By contrast, in some countries, the invoice includes a certain mandatory amount as payment for the ‘service’. In this case, the amount may be considered eligible — if the other eligibility conditions are fulfilled. Specific cases (actual costs): Costs related to preparing, submitting and negotiating the proposals — Can generally NOT be declared as eligible for the action (they are incurred before the action starts), this includes cost for the preparation of the consortium agreement which should be signed before the action starts. However, costs related to updating the consortium agreement may be eligible if incurred during the action duration and in line with the general and specific eligibility conditions, in particular being necessary for the implementation of the action. Travel costs for the kick-off meeting — Even if the first leg of the journey takes place before the action starting date (e.g. the day before the kick-off meeting), the costs may be eligible, if the meeting is held during the action duration. The same applies for the last leg of a journey after the end of the action duration for a review or closing meeting. Costs for reporting at the end of the action — Costs related to drafting and submitting the final report are eligible even if they are incurred after the action duration. Those costs include the cost of certificates on the financial statements (CFS) required by the Grant Agreement and the cost of participating in a project review carried out by the granting authority before the submission of the final report. They may also include the cost of personnel necessary to prepare the final report. However, they can NOT include any other action activities foreseen in the Annex 1 and undertaken after the end date of the action. A cost item or element can NOT be declared more than once within the same or another budget category or activity (e.g. cost for internally invoiced goods and services cannot include cost elements already charged under equipment cost). EU Grants: AGA — Annotated Grant Agreement: V1.0 DRAFT– 01.04.2023 40 Costs to allow for the participation of disabled people (e.g. costs for sign language interpreters required for dissemination events organised under the action) — Are eligible if they fulfil the general and specific eligibility conditions listed under Articles 6.1 and 6.2. The beneficiaries must keep records (see Article 20) to prove in case of an audit, check or review the actual costs incurred and that they were necessary for the implementation of the action. Examples: 1. When subcontracting the organisation of an event that is necessary for the implementation of the action, a beneficiary may select an offer that ensures full accessibility for persons with disability under the consideration of best value for money instead of the lowest price. 2. When purchasing goods that are necessary for the implementation of the action, a beneficiary may purchase goods that ensure accessibility for disabled persons, even if this entails a higher expense than comparable goods that do not offer accessibility. Cost for security measures — Where the implementation of an action requires additional security measures, cost can be declared under the appropriate cost category (e.g. personnel cost for security staff, equipment cost for secure rooms, etc) if in line with the general and specific eligibility conditions, in particular these cost must be directly connected to the action and necessary for its implementation. Conversely, cost for security not directly connected to the action (i.e. normal security measures of the beneficiaries with or without the EU action) are considered to be fully covered under indirect cost.