Overheads: Flat rate vs. real
January 21st, 2008 — mpapapeHello, I have been coordinating an FP6 coordination action (CA). The EC funding was 100% with a flat rate of 20% for overheads. We developed the budget according to that and did the 2 first cost statements also with that rule. Then they informed us that we followed a wrong practice and we should actually (for the FC and AC partners) report the real overhead rate and then request from the EC only the 20%. What followed was a mess as we had to introduce adjustments to previous periods to correct this for the whole duration of the project.
Now I am a partner in an FP7 CA where the funding is 100% and the overheads a flat rate of 7%. the coordinator is assuring us that we should report only the 7% and not the real rate. Has something changed in FP7 in this regards? Does anyone have relevant experience or inforation?
Thank you
January 22nd, 2008 at 1:21 pm
The 7% is not a flat rate, thus you have to report the real overhead rate and then request from the EC only 7%, except you do not dispose of an analytical accounting and thus in other projects you would be able to use the 60% or the 20% flat rate.
January 22nd, 2008 at 1:51 pm
Thank you Joanna. Your answer is clear. So I report real overheads and request the 7%.
But I am interested for the new flat-rate that you refer to fro organisations that have no analytical accounting. Especially the 60% flat rate initially sounded to us a great rule. So all Universities that participated in collaborative project proposals included in their budget 60% overheads.
I am a bit concerned if this will work out so simply. There are some small letters in the EC documents that mention something about this rule stopping in 2009. Do you know anything about it?
January 23rd, 2008 at 9:14 am
This 60% flat rate (for universities, research organizations etc.) is actually called “a transitional flat rate” because the aim of the Commission is to get all the participants into analytical accounting system. You can use this higher flat rate until you are able to calculate your real indirect costs. Until the end of 2009 the transitional flat rate is indeed 60%, but after that it will be less, probably about 40%. The Commission seems to think that you should be able to revise your accounting system by 2010.
February 1st, 2008 at 2:19 pm
We were on FC under FP6 but because of the standard flat rate (SFR) option, which according to FP7 guidelines is open to all, we have opted to do SFR under FP7. In a co-ordination action we can simply add 7% o’heads, but for other types of grant we will request 20%. This will make forcasting and audit processes much easier.