How to change from method C to method B (possible according to version 4 of the factsheet « eligibility of expenses »)?
A novelty of the 2014-2020 programming period is the different methods to facilitate the declaration of staff costs, established by the European regulation. Initially, the Interreg MED Programme, as well as the other Interreg programmes, decided on some of these methods and to allow the partner to select which one was best adapted to their situation. After almost two years of implementation, it has been possible to realise, thanks to the feedback of partners and controllers, as well as the result of the controls carried out, that not all the methods gave the best guarantees to ensure the eligibility of expenditure. This is due mainly to two reasons: on one hand, each Interreg programme decided to use similar methods but with some differences, which makes their use and understanding more complex, when a partner is participating in several programmes; on the other hand, some options, especially the Method C, do not fully adapt to the reality of many partners, thus creating recurring errors inducing a huge potential impact.
On December 20th 2018, the Programme Monitoring Committee validated the 4th version of the factsheet « Eligibility of Expenditure » of the Programme Manual. The updated version is available in the Programme website.
From this version on, it is possible to change from Method C – yearly hourly rate based in 1.720 hours – to Method B – fixed monthly % –. Experience has proven that Method B is in fact simpler and safer.
Partners participating in on-going projects wishing to take advantage of this possibility should follow the following steps to properly trace this change:
- Verify the involvement period (starting and ending date) declared in the list of staff, related to all involved staff members, is coherent with the reality and the project implementation dates. If not, update such list.
- Update the Job Description Declaration (Programme template), specifying the date of the date of entrance into force of the update. This date shall be the starting date of the implementation period from which the change is to take effect.
- Print, sign and stamp (if needed) the Job Description Declaration and send a scanned copy to your LP so it could be uploaded into the web platform.
- LP gather all information of partners and reports it to the JS in the next payment claim, for information.
- Keep the new version of the Job Description Declaration in the project folder (Audit trail).
As a general principle, this change can be made at the end of any implementation period and would regard expenditure for periods in which staff costs of the related person have not been certified.
If expenditure has not been declared in previous periods, even if these periods have taken place before the approval of the update of the Manual, they could be declared with the change of method.
N.B: To facilitate the use of templates provided by the Programme, it will not be necessary to print the declaration in an official letterhead of the partner organisation, provided that it’s officially ensured for example by a stamp of the partner structure. A similar footnote will be included in the Declaration template.
What cannot be done:
- recalculate expenditure already declared using the Method C to declare more expenditure,
- if expenditure has been declared in the 3rd period using Method C, and the partner realises that any hour has been declared, the partner should declare it in subsequent periods using Method C, since in the reference period the staff expenses of the related person had been declared using this method.
How to use Method B in case of low, unbalanced or occasional staff involvement?
Any kind of involvement can be reported using Method B – fixed monthly %.
First, to report staff costs following the Method B provisions, the partner organisation must take into consideration the quantity and the frequency of the involvement of each staff members, according to the specific role assigned within the project, to establish a fixed percentage of time worked on the project per month.
Sometimes it is very difficult for the partner to establish this percentage due to multiple reasons.
Here below you can find several examples that illustrate how three recurring identified cases (low, unbalance or occasional involvement) could be managed following the provisions of Method B. Kindly note that those are only examples, and that there may be many other situations and solutions to suggest.
- Low involvement, this is applied to staff involved in a regular basis but only for short periods of time every month. For example, a Chief of a Department participating in several projects, who organises a half-day monthly meeting to follow up projects’ implementation.
In this case, if the half-day is moved in % this becomes approximately 2% of his/her monthly working time. Additionally, for example, if the meeting relates to 4 projects, 0.5% should be declared in each project.
It is highly recommended to think, in advance, if all the necessary administrative burden to declare this expense is worth doing. If you decided against, you may choose not to declare those expenditure and use this part of the budget to finance other kind of activities or staff.
What must be emphasized in this situation is: if in a particular month this person exceptionally has to dedicate more time to the project (e.g. to prepare and participate in a project event), in order to be able to claim this time, you should either increase the % for the whole period, dividing for example 1 day in 6 months to re-estimate the % (see case unbalance involvement) or decide not to declare these expenditure, taking into account the risk involved if done inappropriately.
- Unbalanced involvement, this applies to staff involved on regular basis on the project but with a very different level of involvement from month to month. For example, a financial officer in charge of the financial and administrative monitoring of the project, providing assistance every month but that, in addition, dedicates two months preparing the payment claim and the certification of expenses.
If you calculate the % of involvement per month, the result would be, for example, that in the first 4 months of the implementation period, the % of involvement corresponds to 25% of his/her time and the other 2 to 75%. In this case, because the % of involvement should be the same for all months, the most advisable would be to make a projected weighed average [e.g. (25x4) + (75x2) / 6, which would allow a calculation of 41% per month].
- Occasional involvement, this regards staff involved just once during all the project lifetime. For example, a communication officer in charge of the organisation of the project mid-term conference.
In this case, you should include in the list of staff, as a function of the employee in the project, being in charge of the organisation of the mid-term conference, and, as for the involvement period, consider only the months this person will be active in the project. For example, if the implementation period goes from 01/06/2018 to 31/12/2018, and the officer in question is involved only 3 months, from September to November, the involvement dates in the list of staff should be ranging between 01/09/2018 and 30/11/2018 and, only expenses for those months can be claimed, leaving nothing to be claimed in the remaining months of the involvement period (July, August and December).
If the period is overlaying two implementation periods, in each one of them declare only expenditure of the months of involvement, according to the list of staff.
Kindly note that this calculation method is a simplified cost option and that the Programme and controllers shall not carry out any re-calculations/checks against the real involvement of the staff. Therefore, the monthly % of involvement included in the Job Description Declaration is just an estimation made by the partner, based on the quantity and the frequency of the involvement of each staff member, according to the specific role assigned within the project.
Finally, be reminded that you must always respect the principle of proportionality. It means that, based on the checks performed, the FLC should confirm that there is no evidence that the claimed staff costs are not adequate in quantity or quality to the development of the activities reported. If the FLC is unable to make this confirmation, amounts exceeding what would be considered reasonably adequate shall be rejected.