D.3 Financial Rules of Horizon Europe - Budgeting and Reporting

This advanced course provides in-depth knowledge on the financial rules of Horizon Europe for financial managers and accountants. The course will introduce all cost types and their eligibility rules and the exceptions. 

It will start with the different ways to calculate personnel costs, including different calculation models on employees, seconded personnel or in-house consultants. Time-recording requirements by the GA and best practices will be introduced in details. With the ‘Corporate Approach’ introduced by the European Commission for 2021-2027, the calculation rules on personnel costs are almost identical in all EU grants; knowledge gained here are transferable to projects funded under EU4Health, DEF, etc. 

Then we will focus on the non-personnel related cost allocation rules of Horizon Europe. Working with different third parties, such as affiliated entities, associated partners, or international organisation will be explained in depth. Subcontracting costs – pros and cons, rules on selections criteria and differences between different services purchased will be analysed. 

Internally invoiced goods – dos and don’ts, how to make an audit-proof calculation within the organisation to allocate the cost properly.

Purchase costs in depth – Travel expenses, including travel policies, eligible cost on hotels, daily allowances and hospitality expenses. Equipment and other assets – depreciation and amortization rules, proofs of usage, cost of (virtual and physical access to) research infrastructure. Other goods, works and services – managing the unforeseeable expenses, identifying services, proofs of usage, purchase policies.

All other horizontal issues in HE will be discussed here – Certificates, receipts and in-kind contributions, payments and exchange rates, reporting rules. 

A full financial reporting workshop will help the participants to experience the learning-by-doing approach:

• Personnel costs: timesheets, payrolls and contracts of virtual employees working on a virtual project will be handed over, while they have to individually calculate the eligible actual or unit-based personnel cost.
• Other costs: travel costs, subcontracting, research infrastructure cost and other goods and services needed for a virtual project will be handed over, while the participants have to individually calculate the eligible actual or unit-based costs.
• Financial statement: Participants will have to deliver a full financial statement with justifications.

AGENDA                                                                                                                                                                     DAY 1

08:45 –  09:00  Registration and Welcome       

09:00 – 09:15   Event Opening     

09:15 – 10:15   Hitchhiker’s Guide to the Financial Rules Part 1: Warming Up

Detailed introduction to the financial rules of Horizon Europe with  real-life examples:

• Basic facts – funding schemes: cost reporting vs lump-sum funding
• Importance of the budget and of the resources considering reporting
• Basic financial principles in theory and practice
• Form of Grants, Forms of Costs
• Eligible and non-eligible costs, Direct and indirect costs 

(10:15 – 10:30 Coffee Break)

10:30 – 11:30    Hitchhiker’s Guide to the Financial Rules Part 2: Direct Personnel Costs

• Introducing the cost categories
• Changes of cost categories in Horizon Europe
• Personnel costs calculations:

        o Employees and other employment contracts

        o Number of productive hours to consider

        o  Measuring days (HE) and hours (H2020) – how to handle?

        o  Transforming hours into days?

•  And many more….

      (11:30 – 12:15 Lunch Break)

12:15 – 13:30    Hitchhiker’s Guide to the Financial Rules Part 3: Direct Personnel Costs

• Bonuses, fringe-benefits, and other complements
• Unit-based personnel costs calculation (NEW)
• Missing resources in personnel? - In-house consultants and seconded employees
• SME-owner rates 

       (13:30 – 13:45 Coffee break)

13:45 – 14:30       Hitchhiker’s Guide to the Financial Rules Part 4: Subcontracting and Purchase costs, Research facility costs

• Subcontracting and other third parties – what is what?; Special third-party protocols;
• Purchase costs vs. Other direct costs – what’s the difference?

        o Travel costs – what to consider?

        o Consumables and small services;

        o  Equipment and assets – calculating the costs of the research infrastructure;

• Internally invoiced items

14:30 – 15:00     Hitchhiker’s Guide to the Financial Rules Part 5

• Indirect costs – does it need to be proved?
• Funding Rates and Receipt calculations;
• Certificates on Financial Statements, Certificate on Methodology, etc. System and Process Audits;
• Guarantee Fund vs Mutual Insurance Mechanism; Payments and the exchange rates.

DAY 2

08:30 – 11:30      Workshop – Financial Reporting of Horizon projects

Introduction - Participants will prepare a financial statement for a virtual Horizon Europe project, based on “mock-up” invoices, salary slips, receipts and bills, time records and certificates, which are generated individually for each participant. 

        (11:30 – 12:15 Lunch Break)

12:15 – 13:30      Understanding the Financial Reports – Part I.

Pragmatic approaches in reporting; Point-by-point assessment of the prepared financial reports: Format, content; overall principles, possible bottlenecks, what should and should not be included.

       (13:30 – 13:45 Coffee Break)

13:45 – 14:30      Understanding the Financial Reports – Part II.

Showing the effect of different calculation protocols on personnel costs (employees), pros and cons of the different approaches

How to report “tricky” costs? Unforeseen subcontracting, exceeding expenses, reallocation of costs during reporting

14:30 – 15:00      How to submit the perfect Cost statement? 

Step-by-step guide on how to report costs, deal with deviations, and internal allocation issues. Handling the EC requests for clarification, suspension of payments and other issues with hands-on approach.