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Budget and finance

What is the PLN/EURO exchange rate which should be used when calculating the budget?

The applicants are not obliged to use  fixed exchange rate. We propose to use monthly exchange rate set by European Central Bank for the month when the call for proposals was launched. The monthly exchange rates are presented below: 1 EUR = 3,9393 PLN, 1 EUR = 11,6430 UAH, 1 EUR = 4444,1800 BYR. In any case the applicant must indicate applied exchange rate in the relevant budget table (b2).

Will the payments be made as pre-financing payment or reimbursement?

There are three options of payments. For details please look at the grant contract – Special Conditions (art. 4 point 4.3).

How the costs should be rounded?

All costs and unit rates are rounded to the nearest euro cent - according to the point 2 of the budget table 1.

May the funds for financing the project come from sources other than own resources (budget) of Ukrainian partner?

Means for project’s financing may come from sources other than applicant/partner own budget, unless they do not come from sources of EU aid (e.g. other EU programs, the Financial Mechanism of the European Economic Area, the Norwegian Financial Mechanism, the Swiss-Polish Cooperation Programme).

Projects with a balanced distribution of costs in the budget between the applicant and partner are to be prioritized – up to what discrepancy (tolerance), we can talk about a sustainable project?

The specific percentage of the division of costs between the partners that would be regarded as a minimum to be considered as a balanced project, has not been stated. The division of cost should have reference to the specificity of the project.

Please precise what information should be reflected in the column C of the sheet b1 (Annex B. Budget for the Action). The question relates to the fact that the Ukrainian and Russian versions do not correspond to the English one (the word "core" has been omitted).

The word "core" has been accidentally  omitted in the Ukrainian and Russian language version. Please remember that the binding version of the application pack is the English one. Therefore, the data placed in the column C of the sheet b1 (Annex B. Budget for the Action) should clearly indicate where the costs of the relevant budget line be incurred - on the core or adjacent Programme area.

In case of signing the Grant Contract for the maximum amount of EUR 4 m, which in this case does not constitute 90% of the total eligible costs of the action but for instance 50% of the eligible costs; in such a case, if expenditures borne will be reduced in the result of a tender procedure when signing the addendum to the Grant Contract, should we adhere to the amount of EUR4 m or the percentage  (50%).  Under such circumstances would it be possible to increase co-financing percentage till up to 60% while keeping the grant amount at EUR 4 m?

In accordance with the Guidelines for Applicants – point 2.5  as well as Annex II to the Grant Contract (General Conditions, point 17.1) the total amount of grant (indicated both in EUR as well as in the percentage of the total eligible costs ) may not be increased.

Being a state budget unit, we want to carry out the project as a Lead Beneficiary of the project, which financial option should we choose in the contract.

 

According to the provisions of Article. 11 of the Act of 27 August 2009 on public finances, state budget units incur expenses directly from the budget. The proposed solution is therefore the choice of the refund by JMA as a kind of payment. Choosing this financing option is indicated especially in case of projects conducted individually.

 

We are a state budget unit and realize / we want to carry out the project in a partnership. Our partner does not have the possibility of pre-financing expenditure from its own resources. How shall we solve the problem of transfer of the payment to a partner (as a budget unit, we cannot use this kind of financing)?

 

The grant contract provides the possibility of selection of only one financing option. If the partner cannot pre-finance expenditure from its own resources and project implementation in the system of reimbursement, the Lead Beneficiary shall take in advance the pre-financing instalment from the Joint Managing to a non-interest bearing account denominated in euro. Then, based on a partnership agreement, means for a partner shall be transferred by the Lead Beneficiary to the partner’s project account as an pre-financing instalment.

If in accordance with the budget, on the project account of the Lead Beneficiary, remain means from the pre-financing instalment, it will be used only after approval of the Beneficiary’s expenditure by the Joint Managing Authority. The Lead Beneficiary shall discharge the means to the income of the state budget in accordance with the Law of 27 August 2009 on public finances. Lead Beneficiary expenditures for the project are borne directly from the budget, in accordance with the provisions of Article. 11 of the Law of 27 August 2009 on public finances.

 

Being a state budget unit and a partner in a project, which is financed under the pre-financing option. How shall we solve the problem of receiving of the pre-financing instalment by the Lead Beneficiary?

 

In accordance with Article. 11 of the Law of 27 August 2009 on public finance state budget unit may incur expenditure only directly from its budget. Thus, the proposed solution is to determine the Lead Beneficiary to transfer the means from the pre-financing only after approval of the expenditures by the Joint Managing Authority. After receiving of the means the state budget unit shall transfer payment to the state budget, in accordance with the Law of 27 August 2009 on public finance.

If the above solution cannot be applied, i.e. there is no way to keep the means form pre-financing instalment on the Lead Beneficiary's bank account and transferring them to the partner of the project after approval of expenditures by the Joint Managing Authority, it is possible to apply the following model. Means from the pre-financing instalment received from the Lead Beneficiary prior to the approval of expenditure by the Joint Managing Authority are located on a partner’s project account conducted in Euro. Their discharge to the state budget revenues in the due amount occurs only after the approval of expenditures by the Joint Managing Authority.

 

Please, clarify what does a record "Total cost of purchase of the equipment can be declared as an eligible expenditure only if the period of economic usefulness of these assets is in line with the eligibility period for this project" means. Within the project, a purchase of emergency equipment for removal of effects of natural and environmental disasters has been planned. What is eligible: the purchase of such equipment or only the depreciation costs for the period of the project duration? I have to admit, that the second variant causes the situation, when the project for the applicant loses its meaning.

According to the Guidelines for Applicants (which is the primary document to the information document – Costs eligibility handbook - quoted by you), Part 2.1.4 dedicated to the eligibility of costs, as eligible costs, directly the cost of purchasing equipment are mentioned. Of course, such purchases have to appropriately justified by the Applicant and have to meet all other criteria, including not overestimated, reasonably incurred, and necessary to implement the actions planned in the project. When purchasing a specialized equipment, which will be one of the project results, all such costs will be eligible. Record quoted by you will be used in case when equipment with an indirect impact on the goals and outcomes of the project is bought (e.g. office equipment for design office, this is not the result of the project). Alternatively, within relatively short projects, for which the purchase of equipment is not justified, like buying a car for projects’ personnel for the project implementation (which is not the result), etc.

Please explain what does one of the provisions on ineligible costs mean. Projects, in which the bulk of the action is not carried out by the beneficiary and its partner(s) belong to this category. The contracting limit does not apply to actions focused on infrastructure and investment activities. How should this limitation be understood?

The provision refers to any type of work (all services) contracted to external contractors (not implemented by the partners on their own) which is contracted as a single complete set of tasks/services, and their result is a direct achievement of a project indicator (eg. the overall organization of conferences, training etc.) Such costs are placed primarily in the budget line 5, "Other costs, services" and in line 6 "Works".