Meeus - a self-help resource for the FP7 user community

In order to be reimbursed at your budgeted allocation, must you meet both the actual incurred eligible cost and the man months budgeted?

For example - if the original budget was noted as  100,000 Euros  and 50 man months, would a company be reimbursed at the full 100,000 Euro budget if they showed that they incurred 100,000 Euros of eligible cost with only 40 man months?

The concern is that the actual labor costs may be higher per man month than was originally budgeted and we want to ensure that we will not be required to spend 50 man months in order to receive the original budgeted allocation of 100,000 Euros.

This also assumes that the deliverables are met in a satisfactory manner within the 40 man month timeframe.

Thank you

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?  