Maximizing Accuracy in Declaring Personnel Costs for Horizon 2020 Grants

Understanding and avoiding errors in personnel cost declarations for Horizon 2020 grants is crucial to prevent consequences such as increased scrutiny, audit efforts, and recoveries. Key areas to focus on include accurate calculation of productive hours, remuneration costs, and time worked, supported by proper time recording practices consistent with HR records. Adhering to guidelines and ensuring correct personnel costs can help maintain a residual error rate within acceptable levels, enhancing project compliance and efficiency.

• Horizon 2020 grants
• Personnel costs
• Error prevention
• Grant agreements
• Audit assurance

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1. Avoiding errors in declaring personnel costs in Horizon 2020 grants Brussels, 30 September 2021 #HorizonEU DG Research and Innovation - Common Audit Service Sorin Serban

2. Errors. Why do they occur? Misunderstandings of the rules; Lack of attention to the detail of the provisions of the grant agreements. Intentionality

3. The consequences of errors: Beneficiaries European Commission Scrutiny of the Budgetary Authority and ECA Increased error rate Increased ex post audit efforts Corrective measures Non-optimal use of funding available Recoveries

4. The error rate Population Sample neg_adj Error Rate % = aud_amount

5. H2020 Audit Assuranceelements Assessing Legality Regularity of H2020 project payments Residual error rate acceptable level General control objective: To get a residual error rate as close as possible to 2%, without necessarily expecting it to get under 2%.

6. Audit in H2020 Main detected errors Personnel costs due to: Incorrect productive hours calculation Incorrect remuneration costs - e.g. estimated Incorrect time working on action claimed Other - e.g. unreliable/missing timesheets 6 Disclaimer: Information not legally binding

7. Make sure that you Personnel cost is correct ????? ????????? ????? (?? + ??? + ??? ???) ????? ?????????? ????? ??????? 1,2,3 Hours Worked x x Hours Worked Personnel costs Hourly rate = Productive hours 7 Disclaimer: Information not legally binding

8. Make sure that your Time Recording is: Consistent with HR records; Properly dated and signed; Not in excess of your full time employment; Sufficient in terms of information. 8 Disclaimer: Information not legally binding

9. Make sure that the numerator is correct Personnel costs Hourly rate = Productive hours Eligible personnel costs Include: Salaries Social security contributions (employers' and employees') Taxes and other costs included in the remuneration if they arise from national law or the employment contract Do not include: Any ineligible item (article 6.5) Any costs included in other budget categories (e.g. indirect costs) 9 Disclaimer: Information not legally binding

10. Make sure that the denominator is correct Personnel costs Hourly rate = Productive hours Annual productive hours 1720 hours Advice you must use this option if the employment contract does not specify the working time conditions or if the "annual workable hours" cannot be determined ! Individual annual productive hours Formula: annual workable hours + overtime - absences Standard annual productive hours According to the beneficiary's usual accounting practices. Minimum threshold: annual productive hours 90 % of the standard annual workable hours 10 Disclaimer: Information not legally binding

11. Avoid errors by making sure that: Your time charged to the project is correct; Time records meet the GA s conditions; Remuneration in the numerator is correct; Productive hours in the denominator are correct. 11 Disclaimer: Information not legally binding

12. Avoid errors by making sure that: Personnel cost formula reconciles; Transaction listing reconciles; Employment Contracts are in place; Exchange rate: please ensure you used the exchange rate stipulated by the H2020 GA Final test is performed before you press the button 12 Disclaimer: Information not legally binding

13. Thank you for your attention & participation ! 13 Disclaimer: Information not legally binding