The Financial Statement – and what is behind it
Cost justification (Financial Statement) is a crucial part of EU project management, generally performed by dedicated staff that know every detail of your grant’s applicable financial rules.
To be honest, for investigators and technical staff this task is a huge headache. Behind the nicely stated figures and colorful graphics in your reports there is considerable paperwork effort.
No way to make it last-minute
At the end of each project period, you are obliged to submit a Financial Statement to the EU Commission within the established deadline. In this statement you will declare all costs incurred during the project period and in exceptional cases you may be allowed to declare costs incurred outside this timeframe.
The Financial Statement is completed online in the Participant Portal under your periodic reporting session and must be e-signed by the authorized person.
Direct and indirect costs
Financial Statement includes both direct costs supported by meticulous calculations and documentation, and indirect costs that are calculated by flat rate.
Within the direct cost category, the following may be declared by each organization:
- personnel costs
- other direct costs
- subcontracting costs
- costs of providing financial support to third parties, if any
There are several options to calculate the components of personnel cost. It is important to highlight that you will have to use the same method in all your EU projects. You cannot change the calculation method from time to time or by projects. For the personnel cost calculation of SME owners who do not receive salary there is the option of using a flat rate that is declared as a unit cost.
In addition, in the use of resources, details on person-month effort must be provided.
Under the other direct cost category you can declare your travel costs and related subsistence allowances, the equipment costs and the costs of other goods and services.
A detailed list of the incurred items need to be stated in the use of resources section.
Subcontracting costs need to be listed one by one with exact details on the outsourced work.
In all cases, if the cost was not foreseen in your project contract a written explanation must be provided.
Countries that are not in euro-zone use the established exchange rate to convert the expenditures into euros, since this is the currency to be used in the financial statement.
When everything is sorted out with cross-checks and internal revisions, the appointed person can e-sign the online form and include it in your periodic report to be submitted.
It’s Good to Know…
Mistakes detected in previously submitted Financial Statements can be corrected with adjustment Financial Statements submitted in future reporting.
Would you like to go into details? Get in touch with us at firstname.lastname@example.org