Definition of eligible costs
Article 22
Eligible costs are costs that are directly and wholly attributable to the national programme approved by the Commission. Member States may apply stricter national rules for determining eligible costs.
Commission Regulation (EC) No 1737/2006 CHAPTER VII — FINANCIAL MANAGEMENT AND MONITORING
Compiled from an official source version. Later amendments or repeals may not be reflected; the official text prevails. · Read the official text ↗
SECTION 1 — COSTS
Justification of expenditure
Article 23
The expenditure shall be justified by adequate original documents, such as invoices, or documents of equal probative value. The original documents shall not be annexed to the statement of expenditures. The competent body shall, however, if requested, provide the Commission with all details, including invoices, which it might need to assure the evaluation of the expenditure.
Costs considered eligible
Article 24
1. To be considered eligible, costs must have been provided for in the approved national programme, and be directly linked to, and necessary for, carrying out that programme. 2. The costs must be reasonable and comply with the principles of sound financial management, in particular value for money and cost-effectiveness. 3. The costs must have been actually incurred during the period of eligibility set out in the Commission decision approving the national programme. A cost is considered as incurred during the period of eligibility when: (a) the legal obligation to pay the cost has been contracted after the beginning of the period of eligibility and before the end of that period; (b) the execution of the activity to which the cost is related must have started after the beginning of the period of eligibility and must be completed before the end of that period. 4. The costs must have been fully paid before the submission of the final documentation together with the final statement of expenditure and income.
Personnel costs
Article 25
Personnel costs may be considered as eligible direct expenditure in respect of the actual time devoted to the national programme. They shall be calculated on the basis of the actual gross salary or wages plus obligatory social charges, but excluding any other cost. The working time of each employee, including national civil servants and governmental agency employees working within the national programme, shall be registered using time sheets or reports from a time recording system established and certified by the competent body and its eventual partners.
Travel costs
Article 26
Travel costs may be considered eligible if they are directly and wholly attributable to the approved national programme. Travel costs shall be charged in accordance with the internal rules of the competent body.
Overhead costs
Article 27
1. Overhead costs which are intended to cover general indirect costs needed to employ, manage, accommodate and support directly or indirectly the personnel performing the work on the national programme or which relate to on-site infrastructure and equipment shall be eligible provided those costs are actual, justifiable and do not include costs assigned to another budget heading. 2. Overhead costs are eligible up to a maximum of 7 % of the total amount of eligible direct costs. 3. Overhead costs shall be charged to the national programme in accordance with the authorized cost accounting policy of the competent body.
Capital costs
Article 28
Where the costs include depreciation of capital investments with a life of more than one year and a price of more than EUR 500, these depreciation costs shall be considered eligible provided they relate exclusively to the national programme and the eligibility period of the concerned programme phase provided that: For investment in construction and infrastructure these costs are depreciated over 10 years using the straight line method, and for other equipment including informatics equipment 5 years straight line method.
Costs for the purchase of second-hand equipment
Article 29
The purchase costs of second-hand equipment shall be eligible under the following three conditions: (a) the seller of the equipment shall provide a declaration stating its origin, and confirm that at no point during the previous seven years has it been purchased with the aid of national or Community grants; (b) the price of the equipment shall not exceed its market value and shall be less than the cost of similar new equipment; and (c) the equipment shall have the technical characteristics necessary for the operation and comply with applicable norms and standards.
Subcontracting
Article 30
Expenditure relating to subcontracts with intermediaries or consultants shall be based upon actual costs and shall be supported by the appropriate invoices and other supporting documents. Exceptionally, where the cost is defined as a percentage of the total costs of the operations, such cost may be considered eligible only if the competent body is able to justify it by reference to the actual value of the work or services provided.
Value-added tax
Article 31
Value added tax (VAT) shall be considered eligible when the competent body is not in a position to recover the VAT paid under the national programme. The competent body shall provide a declaration from the relevant national authorities that VAT could not be recovered for the assets and services required for the measures carried out under the national programmes.
Ineligible costs
Article 32
1. The following shall not be regarded as eligible: (a) any cost incurred for actions which benefit from aid under other Community financial instruments; (b) exchange rate losses; (c) unnecessary or wasteful outlays; (d) distribution expenses and marketing and advertising expenses to promote products or commercial activities; (e) any provisions for possible future losses or liabilities; (f) any debtor interest and interest on borrowed capital; (g) bad debts. Certain of the costs referred to in point (d) may, however, be considered eligible as agreed with the Commission. 2. The non-eligible costs referred to in paragraph 1 shall not be considered by the Commission for the calculation of the total programme cost.
Exchange rate
Article 33
1. Conversion between the euro and the national currency shall be made using the daily euro rate published in the C series of the Official Journal of the European Union . 2. The rate to be used for conversion between the euro and national currencies shall be the exchange rate published on the last working day of the month preceding that in which the national programme, or as regards payments, the financial report and request for payment is signed and submitted to the Commission.
SECTION 2 — PAYMENT
Decision on financial contribution
Article 34
The Commission shall decide on financial contributions to the eligible costs of the national programmes in two phases, one decision for each year of the programming period, hereinafter referred to as the ‘Commission decision’. The Commission decision shall be addressed to the Member State.
Pre-financing
Article 35
The competent bodies may ask for a pre-financing of 50 % of the annual Community assistance for the national programme as indicated in the national programme no sooner than three months after the date of notification of the Commission decision. The pre-financing shall be subjected to conclusion of an agreement pursuant to Article 16.
Statements
Article 36
1. The competent bodies shall submit to the Commission statements of the payments made under the national programme, using the models set out in Annex V. Those statements shall be accompanied by a statement concerning the progress of the activities undertaken under the national programme. The statements shall be submitted not later than 15 months after the date of notification of the Commission decision, and cover expenditure made in the previous year. 2. Eligible expenditures which comply with the provisions of Section 1 of this Chapter and is identified in the annual statement shall be offset by the Commission against the pre-financing to the Member States under the national programmes. Where the statements exceed the related pre-financing the Commission shall make an interim payment. In no circumstances may those interim payments exceed 30 % of the annual Community assistance for the national programme.
Technical and financial implementation
Article 37
1. Each of the two phases as referred to in Article 34 must have achieved full technical and financial implementation in accordance with the requirements of Regulation (EC) No 2152/2003 and of this Regulation not later than two years after the date of notification of the Commission decision. The competent bodies shall make the request for payment of the balance of the eligible expenditure not later than 27 months after the date of notification of the Commission decision. 2. The balance for each phase shall be paid after the Commission has received a request for final payment for each phase and has checked the financial statement accompanying this request for payment.
Coordination of requests for payment
Article 38
In accordance with their national law Member States shall ensure that requests for payments by the competent bodies are coordinated and comply with the Commission decision.
Applications for pre-financing and payments
Article 39
The competent bodies shall submit applications to the Commission for pre-financing and for payments using the models set out in Annexes VI, VII, and VIII.
SECTION 3 — IRREGULARITIES
Irregularities
Article 40
1. Any amounts lost through irregularities or negligence shall be recovered by the Member State and shall be reimbursed to the Community. 2. Where the Commission, within five years following the final payment of the balance of the final year of the national programme, notes any irregularity in an operation financed by the Community where the amount concerned has not been reimbursed to the Community under paragraph 1, it shall inform the Member State thereof and give it an opportunity to comment. 3. If analysis of the situation and any comments by the Member State concerned result in the Commission confirming the irregularity, the Member State shall reimburse the amounts concerned.
SECTION 4 — CHECKS, AUDITS AND TECHNICAL VISITS
Commission financial audit
Article 41
1. The Commission, or any representative authorised by it, may audit the competent bodies, the contractors or sub-contractors responsible for the detailed implementation of the measures carried out under the national programme at any time during the contract and up to five years after the final payments of the Community contribution to the national programme. 2. The Commission or any authorised representative shall have access to documentation required to ascertain the eligibility of costs of the national programme participants such as invoices and pay roll extracts. 3. The audit shall be carried out on a confidential basis. The Commission shall take appropriate steps to ensure that its authorized representatives treat confidentially the data to which they have access or which have been provided to them. The Commission may verify the use made by the competent bodies, the contractors or the sub-contractors responsible for the detailed implementation of the measures carried out under the national programme of the Community's financial contribution. 4. A report on the findings of the audit, pertaining to the competent bodies and other parties responsible for the implementation of the measures of the national programme, shall be sent to the competent bodies, the contractors and sub-contractors concerned. They may communicate their observations to the Commission within one month of receiving it. The Commission may decide not to take into account the observations conveyed after the deadline. 5. On the basis of the conclusions of the audit, the Commission shall take all appropriate measures it considers necessary, including the issuing of a recovery order regarding all or part of the payments made by it.
Checks and technical visits
Article 42
The competent bodies shall allow Commission staff and persons authorised by the Commission access to the sites or premises where the measures under a national programme are being carried out and to all documents relating to the technical and financial management of the operation. Access by persons authorised by the Commission may be subject to confidentiality arrangements to be agreed between the Commission and the competent body. Checks may be initiated during the programming period and shall be carried out on a confidential basis. The competent bodies and the parties responsible for the implementation of the measures carried out under the national programme shall provide appropriate assistance to the Commission or persons authorised by it.
Evaluations
Article 43
1. Member States shall carry out ex-ante evaluation, mid-term review and an ex-post evaluation of the national programmes in accordance with Annex IX. 2. The ex-ante evaluation shall include verification in detail of the relevance, feasibility and sustainability of the activities set out in the national programme as well as an examination of the results to be expected. The results of the ex-ante evaluation shall be transmitted to the Commission together with the national programmes. 3. The mid-term review and the ex-post evaluation shall include an assessment of the implementation status, the effectiveness and efficiency of the monitoring activities carried out within the framework of Regulation (EC) No 2152/2003. The results of the mid-term review shall be transmitted to the Commission before the 1 July 2006 and the results of the ex-post evaluation shall be transmitted to the Commission before 1 July 2007.
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