Responsibilities of managing an EU grant
When the University accepts FP7/H2020 funding, it has implications for both UoE and the Principal Investigator (PI). If the PI does not follow the scientific and financial guidelines set by the European Commission (EC), the University and ultimately the host department/s could be penalised financially.
FP7/H2020 funded research projects have seen an increase in contractual and managerial complexity. Consortium Agreements are mostly mandatory and must be signed by the beneficiaries before or at the same time as signing the Grant Agreement. For example, the Consortium Agreement outlines Intellectual Property Rights (IPR) issues, publications, structure of committees and voting rights. The PI must have a clear understanding of what is required to take part in FP7/H2020.
Periodic Financial Statements (Form C)
The EC monitors projects through a review of periodic reports and deliverables. One of these reports is the periodic financial statement, also known as Form C (cost statement). At the end of a project, if the total amount claimed has exceeded a threshold, a Certificate on the Financial Statement (CFS – sometimes known as an Audit Certificate) must also be submitted. This is prepared by the University’s external auditor for EU projects.
The Form C is submitted by the Research Grants Section (RGS) together with any audit certificate required. RGS will liaise with the PI/School to agree the amounts being claimed and also ask for any back-up documentation or justifications asked for by the auditor.
These documents must be submitted by the Consortium to the EC within 60 days after the end of a reporting period. If these obligations are not met, the University/Departments could be subject to financial penalties.
NB: The EC may carry out its own audits up to five years after the end date of the project. Such audits may cover scientific, financial, technological aspects relating to the proper execution of the project and the contract.
Principal Investigator (PI) and School Admin issues and obligations:
- The external auditor will review a random selection of transactions which are charged to the research project. This could be any item of expenditure on the project.
- The Research Grants section will gather the majority of supporting documentation. There must be a clear audit trail and PIs may be asked to provide further documentation if requested by the auditors.
- It is very important that the PI retains relevant paperwork relating to travel, including all receipts. The PI must also keep copies of all deliverables (any technical data, including maintaining web-sites that were part of the deliverables) for a minimum of 5 years post-end-date.
- If there is insufficient supporting documentation, the external auditor, or the EC, will disallow these costs.
- Supporting documentation for internal journals must be provided to Research Grants as and when requested. It is vital that any journals which move expenditure onto an EC account exactly match the original invoice(s)/receipt(s). Journals which do not exactly match supporting documentation will be disallowed by the external auditor because there is no auditable cost, e.g. journals to move balance transfers.
- The VAT element on expenditure for FP7 Projects will be disallowed because it is not reimbursable by the EC. VAT or government taxes from other countries should never be charged to FP7 EC funded projects. If they are charged, they will be rejected by the external auditor, who will then ask for addition samples to check. It is very important, therefore, to ensure no VAT is included in an FP7 claim.
- Expense claim forms must be completed correctly. If VAT is included on any receipts, the VAT amount must always be indicated in the VAT section on the Expense form. For FP7 projects the VAT element should not be charged to the research project, but to an EC VAT account (coding provided by central Finance).
- VAT is an eligible expense on H2020 grants so should be charged to the project.
- Timesheets must be completed on a regular monthly basis for staff whose salary is charged to FP7 & H2020 projects. Salary costs that are not covered by time sheets will be disallowed by the external auditor. The University uses the eTime time recording system for the completion of timesheets. All staff who have any time charged to an FP7 or H2020 projects must complete monthly timesheets on eTime. Access to eTime is given by the School through eAuthorisations.