Stephen Alexander. Legal & financial considerations for H2020. Legal & Financial NCP. H2020UK National Contact Points

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1 Legal & financial considerations for H2020 Stephen Alexander Legal & Financial NCP H2020UK National Contact Points H /17 WP Info Day 4 th November 2015, Nottingham National Contact Points are an Innovate UK resource to assist UK Business in engaging w ith EU Research & Innovation Funding opportunities

2 Where do you start? Understand the game! H2020 is different to FP7, Innovate UK (TSB), ERDF, MOD and other programmes Need to understand the processes Pre-proposal Proposal submission Evaluation Grant preparation Project delivery There are consequences of getting it wrong So, you need to have knowledge of the process

3 Where to get information? ml

4 How to participate Summary of application process

5 Online Manual Via process graphic or detailed list Outlines whole process Clickable Narrative quite good Access to additional help documents Good starting point for information for participants Still incomplete!

6 Reference documents H2020 Grants Manual Section on registration, validation & financial viability Section on proposal submission & evaluation Section on grant agreement preparation Annotated Model Grant Agreement (AGA) Horizontal issues (security, ethics, third countries...) Work Programmes General Annexes List of eligible countries Standard eligibility criteria Types of action & funding rates TRLs Evaluation & selection criteria Budget flexibility

7 Annotated model grant agreement (AGA) Currently 634 pages! Very detailed, worked examples Not always the easiest thing to read!

8 H2020 participation process (similar to FP7 ) Does H2020 suit your business need, timescales, financing...? Find a call Find partners Get a user account in the electronic exchange system (ECAS) Register in the Beneficiary Register & get PIC number Write proposal! Administrative information Budget (personnel, other, subcontract, indirect) Project description Submit proposal through the Participants Portal Proposal eligibility check, evaluation (+ If req: ethics, security review ) Legal entity validation Nominate a Legal entity appointed representative (LEAR) Financial viability check (coordinators) Grant preparation stage Grant signature (electronic) Start project Prefinancing (w ithin 30 days) Keep financial records, timesheets Submit periodic report Submit periodic cost claim, electronically via portal (typically 18 months) Payment (w ithin 90 days) Repeat to end of project! 1. Pre-proposal 2. Proposal 3. Evaluation 4. Grant preparation 5. Project delivery

9 1. Pre-proposal GET A USER ACCOUNT FOR ECAS European Commission Authentication System Provides access to the Participants Portal Only need your address GET A PIC - Participant Identification code Unique identifier for organisation in all EU programmes Can search database for any existing PIC and LEAR Registration wizard to enter legal and financial data of entity IF SME, complete the SME self-assessment (if in SME specific actions)* Completion of registration produces your PIC, onscreen and via Available for use in proposals immediately The registered contact can modify all data online Typical issues: type/status of entity (public body, non-profit, SME ), entity declared/validated confusion Beneficiary register user manual:

10 2. Proposal ELIGIBLE COSTS: personnel, subcontracting, third parties, other direct (T&S, capital equipment, goods & services, indirect costs) VAT IS AN ELIGIBLE COST: Where non-recoverable CAPITAL EQUIPMENT: cost based on depreciation & usage, full-cost may be eligible for prototypes/pilot plant INTERNALLY INVOICED COSTS: Time and materials basis only PRODUCTIVE HOURS CALCULATION (personnel costs) Fixed 1720 hours, Individual annual productive hours or Standard annual productive hours SME OWNERS COSTS For SME owners w ithout a salary, unit-costs based on Marie Curie living allowance reference rates( 55,800, 1720 productive hours, 25% indirect costs reimbursement significantly lower than FP7) SUBCONTRACTING: limited parts of project, must show VFM, not w ith affiliates 3rd PARTIES: may make contributions in-kind to project (staff, equipment) against payment 3rd COUNTRIES: mostly eligible for funding unless high-income countries Typical issues: personnel cost calculation, subcontracting, capital equipment depreciation (particularly in demonstration/pilot activities), internal invoicing. Eligible & ineligible costs: See the Annotated model grant agreement Article 6

11 Reimbursement rates ONE PROJECT - ONE FUNDING RATE: for all participants & all activities Research actions - reimbursed up to 100% Innovation actions - reimbursed up to 70% (100% for non-profit organisations) Indirect costs - a flat rate of 25% of direct eligible costs No actual-indirect cost option, but Large research infrastructures (LRI): allow s overhead costs for infrastructures to be claimed as direct (Methodology and EU inspection required) Typical issues: everyone still complains! Reimbursement rates: See the Annotated model grant agreement Article 5 LRI: See the Annotated model grant agreement Article 6

12 Funding rates example: FP7 (For SMEs, HEIs, RTOs) 60% flat rate for indirect costs Direct cost Indirect cost Total cost EU % reimbursement EU contribution % 120 RTD funded at 75%, management at 100%, demonstration at 50% Horizon 2020 (For all participants) Direct cost Indirect cost Total cost EU % reimbursement EU contribution Research actions % 125 Innovation actions %* 87.5 All activities funded at the same rate for all participants *100% for non-profit organisations

13 3. Evaluation Excellence Soundness of concept Ambition of work Innovation potential Beyond state of art/novel Impact Contributing at EU/international level to impacts described in Workprogramme/call Enhancing innovation capacity Strengthening competitiveness & growth of companies, delivering innovations to market Effectiveness of exploitation, dissemination & communication of results Quality & efficiency of implementation Coherence & effectiveness of workplan Complementarity of participants Appropriateness of management structures & procedures, inc. risk & innovation management Each criterion scored out of 5, threshold 3, overall threshold 10 General annexes: 014_2015/annexes/h2020-wp1415-annex-ga_en.pdf

14 3. Evaluation hints & tips Evaluators not always native English speakers Evaluators have limited time to read proposals make it easy! Content is key, but form is important structure, text quality, graphics etc. The summary is important engage the evaluator Don t make grand/unsubstantiated claims Recognise competitors and competing products/services Show understanding of risks in the project Show relevant end-user input (partners, advisory panels, demo/pilots) Show users, need, solution, EU aspect, ability to deliver (Know ledge, experience, resource, time, goals) Understand and stick to the rules Think Dragons Den!

15 4. Grant preparation VALIDATION After registration and once proposal successfully evaluated Verification of legal entity status via submitted documents LEAR (legal entity authorised representative) Once entity is validated Manages organisation data, appoints supporting roles (legal & financial signatories) LEAR appointed by an entity legal representative FINANCIAL VIABILITY CHECK (FVC) Only for Coordinators & if EU funding 500k (Not public bodies, HEIs, mono-beneficiaries) Financial viability check tool ( GRANT PREPARATION No negotiation - limited changes to proposal, partners, budget Time-to-grant 5+ 3 months (change to 5 month time to inform and 8 month TTG)* Validation & FVC: See Guide on beneficiary registration, validation & FVC LEAR: See the Online Manual Grant preparation: See Guide for grant agreement preparation

16 5. Project delivery PREFINANCING Up to 100% of average period funding (i.e. 2 periods 50% prefinancing) Typically 40% for SME Instrument Less 5% for Guarantee fund AUDIT CERTIFICATE(CFS- certificate on the financial statement) Only at final cost claim and Reimbursement > 325k (not lump-sums, flat-rates) Can be claimed as other direct cost (not subcontract) & attracts 25% indirect COST CLAIMS Based on average exchange rate over the reporting period, from ECB website EU grant agreement is a maximum grant in - so currency fluctuation risks Typical issues: bad record-keeping (timesheets), assumptions on cost eligibility (using costs/rules from other programmes), currency fluctuation. CFS & currency exchange: See the Annotated model grant agreement Article 20 Payment arrangements, prefinancing & guarantee fund : See the Annotated model grant agreement Article 21

17 GRANT MANAGEMENT SYSTEM All reporting, cost claims, communications via the portal grant management system e-access to all H2020 project activities and management by LEAR and authorised persons

18 IPR in H2020 General rule: each participant owns the results it generates. Each participant receiving EU funding must exploit its results, either directly or indirectly. ACCESS RIGHTS - rights to use results or background: IP, background, access, results: See the Annotated model grant agreement Articles 23, 24, 25, 26 IPR Helpdesk: (Info sheets, FAQ, Helpline)

19 Ethics in H2020 The Ethics Appraisal procedure concerns all activities funded in Horizon 2020 The main areas addressed in the Ethics Appraisal procedure include: Human Protection (including the study participants and the researchers) Animal Protection and Welfare Data protection and privacy Environment protection Third countries Dual use Misuse/Malevolent use of research results

20 Ethics responsibilities Each applicant is responsible for: identifying any potential ethical issues handling ethical aspects of their proposal detailing how they plan to address them in sufficient detail already at the proposal stage. The Ethics part of each proposal (part A in SEP, part B section 5 or 6) should include description of issues and how they are/will be dealt with Consider adding an ethics workpackage to the project MUST read the document How to complete your ethics self-assessment Online manual - Ethics process description and documents:

21 Overall H2020 participation tips Do your homework! Get familiar with the H2020 Participants Portal and know where to find information Understand your role and why you are getting involved You sign a binding legal contract with the EU, so Understand the eligible costs, record keeping, reporting, reimbursement, timescales etc. Ensure that the consortium agreement works for you Don t assume the rules are the same as FP7, Innovate UK(TSB), ERDF, other Use The NCP network for help and advice.

22 Contact For further information on H2020 and on the rules for participation: Stephen Alexander Phone: Web:

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