Budget Control in FP9: Funding Rates and Costs
"The internal funding rates for FP9 and the approved costs categories play a crucial role in preparing grant proposals and budget plans. Learn about resources allocation, personnel costs, and ensuring the right categories for effective budget control in FP9."
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Budget control in FP9 (Funding rates and costs categories; Resources allocation vs budget plan; Budget control process) Emilia Genangeli Info meeting 12 January 2021
Overview Funding rates and costs categories Resources allocation vs budget plan Budget control process Questions/Answers E. Genangeli | Info meeting | VC | 12 January 2021 | Page 2
Internal Funding Rates The internal funding rates for FP9, approved by the General Assembly in Dec. 2020, are used for the preparation of the grant proposal and budget plan 2021- 25 The rates have been entered in IMS to allow the preparation and submission of the financial proposals in response to the calls for participation issued on 23 November 2020 and the resources allocation following the selection Costs categories refer to H2020 as the Model Grant Agreement for HE has not yet officially released major changes not expected E. Genangeli | Info meeting | VC | 12 January 2021 | Page 3
Internal Funding Rates: Personnel costs Personnel Costs Manpower standard Manpower Project Leader/Task Force Leader/Project Support Officer Manpower Advanced Computing Hubs Manpower JET Data Center Manpower Work Package Design-assist Activities WPDES Manpower Training and Education Manpower Operation facilities standard Manpower Operation Technology Hubs and Linear Machines Manpower Operation facilities for Irradiation Manpower Operation Tokamaks and Stellarator Manpower Industry LTP Manpower Programme Management Unit/DEMO Central Team Manpower Coordinator Unit Manpower Accompanying Research rate 50% PM 50% standard 70% PM 70% PL/TFL/PSO 70% PM 70% ACH 70% PM 70% JDC 70% PM 70% WPDES 70% PM 70% TRED 40% PM 40% Op. facilities standard 70% PM 70% Op. THUB/LM 70% PM 70% Irradiation 80% PM 80% Op. TE/W7X 100% PM 100% Industry LTP 100% PM 100% PMU/DCT 100% PM 100% CoU 0% PM 0% AR Short name in IMS E. Genangeli | Info meeting | VC | 12 January 2021 | Page 4
Personnel costs categories Make sure that the right category is picked up Roles (e.g. PL/TFL/PSO) => Group leaders, deputy PL standard rate WP/activity (e.g. DES, AC-ACH, AC-JDC) Facilities: Standard Technology Hubs/Linear machines Irradiation Tokamak and Stellarator (List of facilities distributed with the call) For operation of facilities check that the breakdown of costs (Personnel and other costs) have been entered in IMS In case this is not done => Change Request and ask the Beneficiary to re-submit E. Genangeli | Info meeting | VC | 12 January 2021 | Page 5
Salary rates A single average salary rate per Beneficiary with the exception of the Industrial LTP The rates are already in IMS and only those shall be used! For the years 2022-2025 an increase of 1.5% has been applied subject to revision In the budget plan single rate of 75k /ppy (78k /ppy industry LTP) used for 5 years; allocation of PM to different Beneficiaries shall be done within the budget ceilings. What if the Beneficiaries propose new LTPs (Affiliated Entities - AE)? In particular PM @100% for new Industrial partners? The resources can be allocated PRELIMINARLY to the Beneficiary, waiting for formalization of the affiliation of the new party in the grant agreement. For resources @100% make sure that the increase of Consortium Contribution and reduction of Total resources is balanced. E. Genangeli | Info meeting | VC | 12 January 2021 | Page 6
Internal funding rates: Subcontracting Subcontracting Subcontracting standard (Indirect costs do NOT apply) Subcontracting Industry (Indirect costs do NOT apply) Subcontracting Irradiation (Indirect costs do NOT apply) rate 40% Subcontr. 40% standard 100% Subcontr.100% Industry 100% Subcontr.100% Irradiation 100% rate for Subcontracting to Industry and for Irradiation are applicable only for those tasks specified in the calls (mostly DEMO WPs) E. Genangeli | Info meeting | VC | 12 January 2021 | Page 7
Subcontracting category What is a subcontract? Subcontracts Subcontracting of action tasks described in Annex 1 of the Grant Agreement Suppliers implement specific action tasks themselves, which are part of the action Cost category: Subcontracting E. Genangeli | Info meeting | VC | 12 January 2021 | Page 8
Subcontracts vs other contracts Which are the other contracts? Other contracts Purchase of goods, work or services Suppliers provide resources or services to the beneficiary, which are necessary to implement action tasks by the beneficiary Cost category: Other goods and services E. Genangeli | Info meeting | VC | 12 January 2021 | Page 9
Subcontracts vs other contracts: examples Example 1: Task: Design, construction and tests of a mockup for Beneficiary A purchases the components/materials for the realization of the mockup => purchase of goods Beneficiary A places a contract for the design of the mockup => purchase of services Beneficiary A places a contract for the construction of the mockup => purchase of works/services Beneficiary A places a contract to an external company for the implementation of the full task => subcontracting E. Genangeli | Info meeting | VC | 12 January 2021 | Page 10
Subcontracts vs other contracts: examples Example 2: Task: Design and construction of a test facility for Beneficiary A purchases the components/materials for the construction of the facility => purchase of goods Beneficiary A places a contract for the design of the facility => purchase of services Beneficiary A places a contract for the construction of the facility => purchase of works Beneficiary A places a contract to an external company for the implementation of the full task => subcontracting E. Genangeli | Info meeting | VC | 12 January 2021 | Page 11
Subcontracts vs other contracts: examples Example 3: Task: Large scale steel manufacturing studies Beneficiary A places a contract for support to manufacturing studies => purchase of services Beneficiary A places a contract to an external company for the implementation of the full task => subcontracting Tip: if the contract placed is for support to , assistance in , consultancy for , purchase of , it is NOT a subcontract. E. Genangeli | Info meeting | VC | 12 January 2021 | Page 12
Internal Funding rates: Equipment & Other Goods and Services Equipment/Other Goods&Services Equipment/Other Goods&Services standard Equipment/Other Goods&Services New investments (pilot plants) Equipment/Other Goods&Services High Performance Computer Equipment/Other Goods&Services JET Data Center Equipment/Other Goods&Services Irradiation Equipment/Other Goods&Services Italian Divertor Tokamak Test Equipment/Other Goods&Services PMU-DCT Host Support Equipment/Other Goods&Services Operation Facilities standard Equipment/Other Goods&Services Operation Technology Hubs and Linear Machines Equipment/Other Goods&Services Operation Tokamaks and Stellarator Equipment/Other Goods&Services Accompanying Research rate Short name in IMS 40% Eq./OGS 40% standard 50% Eq./OGS 50% Pilot Plants 70% Eq./OGS 70% HPC 70% Eq./OGS 70% JDC 70% Eq./OGS 70% Irradiation 100% Eq./OGS 100% I-DTT 100% Eq./OGS 100% PMU/DCT 40% Eq./OGS 40% Op. facilities standard 70% Eq./OGS 70% Op. THUB/LM 80% Eq./OGS 80% Op. TE/W7X 0% Eq./OGS 0% AR E. Genangeli | Info meeting | VC | 12 January 2021 | Page 13
Equipment & Other Goods and Services categories Similarly to the personnel costs, make sure that the right costs category is picked up New Investments are new facilities to be build and identified as necessary for the implementation of the programme (currently10 Technology facilities named pilot plants terminology no longer used in HE). Funding rate for the HPC will be applied to the new HPC post Marconi Fusion For Facilities see slide n. 5 E. Genangeli | Info meeting | VC | 12 January 2021 | Page 14
Internal Funding rates: travels and secondments Travel and subsistence Travel costs and national subsistence allowance Travel costs and national subsistence allowance PMU-DCT Host Support rate Short name in IMS 70% Mission 70% 100% Mission 100% PMU/DCT Unit costs for mobility of staff Unit costs for secondments (Indirect costs do NOT apply) rate Short name in IMS 100% Unit costs 100% FOR INFORMATION ONLY Resources for missions are kept not-allocated and will be made available following the usual approval of mission requests. The Beneficiary have not been asked to make proposals for missions. E. Genangeli | Info meeting | VC | 12 January 2021 | Page 15
Common mistakes Tendency to pick up the higher funding rate Staff overbooking Subcontracting For equipment depreciation costs (and the eligibility conditions) are not considered For use of facilities: No breakdown of costs No indication of the EUROfusion share Wrong facility type Quotation based on internal unit costs (methodology not certified) => only actual costs (measurable and verifiable) can be reported E. Genangeli | Info meeting | VC | 12 January 2021 | Page 16
Resources allocation vs budget plan Budget tables per WP have been distributed. In the current budget plan for FP9, the total Consortium Contribution resulting from the application of the new funding rates is higher than the expected Euratom contribution. At this stage, it is important that the internal funding % does not increase further. During the selection process and allocation of indicative resources please make sure that: The Total resources (which include indirect costs) do not vary. A slight increase in the total resources is acceptable only if the Consortium Contribution does not change or is reduced. The internal funding % in your WP does not increase. A decrease of the internal % is welcome provided that the total resources are not reduced. E. Genangeli | Info meeting | VC | 12 January 2021 | Page 17
Resources allocation vs budget plan If needed the PL can decide to move resources from one cost category to another; however in the proposed allocation: The Total resources should not decrease and the Consortium Contribution should not increase. This is in principle valid for the overall WP budget (5 years); however it is suggested to pay attention also at the yearly values, as a change in the spending profile may result in a shortfall in a specific year. For budget allocated to specific costs categories (facilities, new investments, subcontracting, Industry AE) only minor changes should be done. It is recommended to focus on the 2021 budget eventually with a different distribution of resources and to propose indicative resources for 2022-25 in line with the budget plan. E. Genangeli | Info meeting | VC | 12 January 2021 | Page 18
UK contribution In the budget table are indicate UK resources (UK facilities and resources considered essential for the programme) Other contributions can be selected by the PLs. In this case the EF budget should not decreased. For all UK contributions the resources should be made available under a separate budget line since the overall EUROfusion contribution to the UK will depend on the level of the contribution of the UK to the Euratom Programme. E. Genangeli | Info meeting | VC | 12 January 2021 | Page 19
Resources allocation: PMU Admin control Following the selection of the proposals PL/PSO enter data in IMS for the allocation of resources to the Beneficiaries The data are checked in parallel by PMU Admin (mistakes in cost categories, deviations from budget plan, etc.) Close interaction and exchange of information is required in the next days to meet the deadline of 21st January; therefore please send in advance to Admin your working files to be checked if the data are not yet in IMS. E. Genangeli | Info meeting | VC | 12 January 2021 | Page 20
Budget control process: project control (PMO) PSO Input Monitor projects time schedule and assess if technical progress is in line with financial committment Identify items with high potential budgetary impact to assess single- point risks Investigate deviations and propose corrective actions Review method of assigning values to deliverables PSO Input E. Genangeli | Info meeting | VC | 12 January 2021 | Page 21
Budget control process: financial control (Admin) PSO review periodically status of pending deliverables Mid-term review in 2023 and decision point if cumulative budget ceilings will be applied also from 2023 onwards. Decommitment of undeclared resources at the appropriate cumulative ceiling if there is no proper justification of delayed activities Adopt cumulative budget ceilings for 2021-2022 Restrict previous period reporting to one year E. Genangeli | Info meeting | VC | 12 January 2021 | Page 22
Budget control process: financial control (Admin & Beneficiaries) PSO Input Investigate deviations above/below a given significance to determine if they have arisen due to financial and/or technical reasons errors, delays, profiling, unplanned changes etc This reconciliation to actual approach will give the opportunity for timely and appropriate corrective action to be taken - by both sides and help the Beneficiary/PMU understand the actual position Establish biannual snapshot financial reporting per Beneficiary to identify variances (April & October) E. Genangeli | Info meeting | VC | 12 January 2021 | Page 23
Communications For any question about budget, funding rates, cost categories please contact Budget-control@euro-fusion.org (Jennie Humphreys, Matti Oron-Carl, Linda Grella, Petra Haucke, Emilia Genangeli) (Please indicate the WP in the subject) E. Genangeli | Info meeting | VC | 12 January 2021 | Page 24
Q/A THANK YOU FOR YOUR ATTENTION E. Genangeli | Info meeting | VC | 12 January 2021 | Page 25
