1. Pre-financing
2. Guarantee Fund
3. Interim & final payments
4. Budget amendments in the UFS
Pre-financing
A single payment is made to the co-ordinator at the start of the project and is
distributed to the project partners according to the payment terms outlined in
the consortium agreement. The payment is made once enough partners have acceded
to the grant agreement and should only be paid to those who have done so. The
payment is detailed in the grant agreement but is normally calculated as
follows:
For projects < 2 years
Pre-financing will be between 60-80% of the total EC contribution. The guarantee
fund contribution (see below) will be deducted from this payment.
For projects> 2 years
Pre-financing will be 160% of the average funding per period.
Example: 3 yr project with €3,000,000 EC contribution with annual reporting
• Average EC contribution per reporting period: €3,000,000/ 3 yrs = €1,000,000
• Pre-financing (usually 160% of €1,000,000) mentioned in Article 6 = €1,600,000
• Contribution to Guarantee Fund @ 5% of total EC Contribution: 3,000,000 x 5% =
€150,000
• Net amount transferred to Co-ordinator: (1,600,000- 150,000) = €1,450,000
Guarantee Fund
The Guarantee Fund is new to FP7. It has been introduced to reduce the risk to
the project of a partner defaulting on their financial obligations. At the
project start 5% of the EC contribution is invested in the guarantee fund. The
interest earned on all these investments will be available to reimburse any
potential financial defaults. At the end of the project the full amount is
refunded to the beneficiaries.
Interim & final payments
Further EC contribution payments are made when reports have been submitted, on
the basis of expenditure for that period. Once the reports have been approved, a
payment for the amount spent will be sent to the coordinator, normally within
105 days of receiving reports (unless there were queries/issues with the
reports). Please note that 10% of the total EC contribution will always be
withheld until the project end.
Example: 3 yr project with €3,000,000 EC contribution with annual reporting
cont
- Pre-financing €1,600,000 (only 1.45 mil received, see above example)
- EC cont reported in 1st period €900,000
1st interim payment €900,000
- EC cont reported in 2nd period €800,000
2nd interim payment €200,000 (total payments so far = €2.5mil. 10% retained)
- EC cont reported in last period €1,300,000
Final payment €450,000 (final 10% + return of Guarantee Fund)
Calc of final payment = 3,000,000 - (1,450,000+900,000+200,000)
Budget amendments in the UFS
Your UFS budget will be set up for 100% of the total requested EC contribution.
These notes aim to assist you in understanding the underlying financing of your
award. The timing of payments is important as it affects the exchange rate that
will be used to convert your Euro budget into pounds sterling. The Research Operations Office credit the
grant with the actual sterling received, using the current rate on the date
payment was received. The Research Operations Office then use the university guideline rate for the
remaining outstanding payments. Therefore your sterling budget will fluctuate
over the period of the grant as payments are received and the estimated exchange
rate is updated (as and when necessary).
If you have any further questions on the information on this page
please contact your Administrator.
