if in a SME action for the general interest of the project the SME pays the RTD performer before schedule, and this results in penalties to the SME - can this bank penalties be declared as eligible costs?

Hello,

as far as I know it is possible to employ external consultants (self-employed individuals) on an hourly basis to work on an FP7 project and include their payment as normal personnel costs. What are the conditions attached to this?

Can the consultant work from his own office? Can that be in another country? Outside the EU? The invoices will be on an hourly basis, but is an overall time-sheet for the consultant necessary showing his/her work on other projects?

Thank you

This relates to the earlier post about productive hours in FP6 projects.

The Commission has issued guidance to auditors that states, inter alia, “It is impossible to define a general correct figure for productive time … The auditor must use his professional judgment to decide if the productive time used for calculation is reasonable.” Elsewhere in its guidance, though, the Commission suggests that a typical figure for productive time is around 210 days per year.

A lot of organisations normally consider a much smaller number of days as productive, e.g. figures as low as 150 or 170 days are not unusual. There is accumulating evidence of ex-post auditors tending to challenge such figures, because they apply the Commission’s indicative figure quite rigidly.

The other day I heard about a university  that for years has typically applied a figure of around 160-165 productive days in its FP6 projects. The figure had never been challenged by the Commission’s Financial Officers, but now it has been challenged in an audit, together with a recommendation that all of the university’s FP6 projects must now be recalculated on the basis of  a figure nearer 210 days. This is ridiculous: the Commission/auditors are in effect re-writing the rules retrospectively.

It would be interesting to learn about how many productive days other organisations have typically claimed successfully in their FP6 cost statements to the Commission.

It would also be interesting to hear from anybody who has had their FP6 productive hours calculation challenged by the auditors, and with what consequences.

I know this is about an FP6 subject, but it is also very relevant for FP7.

EARTO (www.earto.eu) has reported that several of its members have recently had FP6 projects audited and that many of them have been seriously criticised by the auditors.

There have been two main points of criticism.

One is that many of these research organisations have been using average personnel costs. Audit checks on individual projects have shown that the claimed costs were out of line with the real costs. The research organisations seem to have worked on the principle that over a number of FP6 projects the average and real costs would be more or less in line and therefore acceptable to the Commission. Clearly, the Commission expects costs to be accurate for each individual project. In other words: you can use average costs for interim reporting, but you need to correct for real costs at the latest when you make your final claim.

The other issue is more fundamental and potentially of very grave consequences. It has to do with the definition of “productive time” (”invoiceable days”). Many research organisations count as productive time only the hours that are available for invoicing to customers. So they deduct things like holidays, weekends, public holidays and sick leave, of course, but also internal management time, training and education time, equipment maintenance time, marketing time and so on. Some auditors, at least, have refused this, saying that things like general management time and marketing time have to be included. This can have big consequences: one research organisation calculated its number of productive hours per employee to be around 1,100 hours per year; the auditors said it should have included general management and marketing time, which gives a total nearer 1,600 hours per year. It makes a big difference to the reimbursed daily rate if you divide your total salary bill by 1,100 or 1,600.

EARTO is organising a workshop for its members on December 10th about these issues. Maybe there will be some more information after then.

In the meantime, has anybody else experienced FP6 audits recently? If so, what issues have been raised and with what consequences?  