Erasmus+

The financial aspects (budget) of the research Framework Programmes are among the most complex to manage. The program uses the full range of   form of costs foreseen by the art. 125 Reg. 1046/2018 (“Financing not linked to costs”, “Actual”, “Unit”, “Plat Rate” and “Lump Sum”).  According to different type of actions, different forms of costs can (or must) be used.  The majority of actions (RIA, IA, CSA, ERC grants, EIC grants) use actual, unit, and flat rate costs. MSCAs use unit costs only.  Prizes and other specific calls can use Lump Sum form. However, the use of a blend of form of costs is a decision of the EC services, so it is possible to find different combinations in different calls.

Peculiarities of this programme budgeting is that (depending on the call specificities)  it is possible also to declare costs related to Affiliated Entities (former linked third parties), in-kind contributors, sub-grantees.  Projects are normally open to Associated Partners (former International partners, i.e. entities allowed to take part to the technical implementation of the action, but not eligible for funding).  

Indirect costs are normally 25% of eligible direct costs, not considering subcontracting, financial support to third parties (sub-grantees), costs of in-kind contributors when the contribution is not used by the beneficiary’s premises, and other specific situations where the EU contribution  to the action may represent a case of possible double-funding (e.g. when receiving operational grants).

The compilation of the estimated budget at proposal level can be different according to the budget model adopted for each call. 

For calls run under the traditional budget scheme (forms of cost: Actual, Unit, Lump Sum) the budget does not require to be detailed.  Only the amount per partner, per budget category, is required.  The detailed breakdown of costs incurred is required only during specific checks ordered by the PO, and (always) during Audits (CFS and II° level Audits).   Consequently, estimating the budget at proposal level may appear a clerical task, nevertheless – give possible later checks and controls – underestimating the relevance of a well-designed and eligible budget can be extremely tricky, and costs declared could reveal to be ineligible when reporting, or during an audit. 

In addition to traditional budget approach, Horizon Europe is expected to consistently implement a novel way to manage grants budget, the so-called new Lump Sum i.e. the form of cost “Financing not linked to the cost of the relevant operations” (art. 125 letter a – Financial Regulation 2018/1046).  This form of costs was introduced in 2018, and piloted between 2018 and 2020, with the aim of simplifying the financial management of grants.  It is expected to be used for RIA, IA and CSA mainly, but the real magnitude of its iation will depend by the relevant EC authorising officers responsible for each call or group of calls.  When a call is implemented under this scheme, the financial reporting is no more required (i.e. no financial statements, no financial audits, no timesheets, …), and  the EU contribution will be conditional  to the completion of Work Packages, by all partners involved in its implementation) before the end of the reporting period. This novel lump sum model entails a detailed breakdown of project estimated costs at proposal level, per beneficiary, per budget category ad per work package, and very limited possibilities for budget shift are foreseen.