This section aims to explain how the EC budget is calculated and how it appears
on the University Financial System.
1. EC FP7 Reimbursement rates and overhead rates
2. Worked examples of reimbursement and overhead rates
3. Budget set up on the UFS
4. Illustrated example of Cooperation programme grant being set up
on UFS
1. EC FP7 Reimbursement rates
and overhead rates
A major change in FP7 is the abolition of cost models. Cambridge, along with the
majority of other UK Higher Education Institutions, has chosen to use the
transitional flat rate reimbursement model (until FEC for FP7 is introduced).
There are two main financial areas that have an impact on FP7 budgets:
reimbursement rates and overhead rates.
Reimbursement rates
EC budgets are allocated by Activities such as Research and Technological
Development (RTD), Demonstration, Management. The EC will only reimburse a set
percentage of the projects costs. These reimbursement rates from the EC now
differ according to the Activity as listed below:
|
RTD
|
75% reimbursement
|
|
Demonstration
|
50% reimbursement
|
|
Management
|
100% reimbursement
|
|
Other
|
100% reimbursement
|
|
Coordination
|
100% reimbursement
|
|
Support
|
100% reimbursement
|
Overhead rates
The Department:Chest split on overheads remains 34%:66% as in Framework 6. The
overhead rate depends on the type of project/the activity.
|
Networks of Excellence
|
60% overheads
|
|
Collaborative Projects
|
60% overheads
|
|
Coordinated Actions
|
7% overheads
|
|
Support Actions
|
7% overheads
|
|
Collaborative Projects with CA or SA
|
60% for CP part
|
7% for CA or SA
|
When departments charge direct costs to the grant the University Financial
System (UFS) will calculate the correct indirect costs (overheads) and allocate
them to the Department or Chest account. Please see below examples.
2. Worked examples of
reimbursement and overhead rates
100% Reimbursement
For 100% reimbursed activities, such as management and training, 100% of direct
costs and 100% of indirect costs will be reimbursed from the EC. If expenditure
of €100,000 takes place, indirect costs will be €60,000 (60%) and total
reimbursement will be €160,000.
75% Reimbursement
For RTD, where 75% of costs will be reimbursed, the UFS will perform a price
adjustment and ensure that direct costs are reimbursed at 100% and the remaining
funds will apply to overheads. For example on expenditure of €100,000 and
overheads of €60,000 (60%), reimbursement will be €120,000 (75% of €160,000).
The University Financial System (UFS) will ensure that €100,000 of this will
cover full direct costs with the remaining €20,000 to be allocated to indirect
costs and split according to the Chest/Department share. On the morning of the
fourth working day after month end the Research Operations Office post the department's share of overheads
to source of funds EDAA. The UFS then calculates how much will not be reimbursed
by the EC (via the price adjustment process) and posts a reduction to the
departmental and Chest shares as a charge to the same overhead account. This is all done
before grants are closed for the month.
50% Reimbursement
For Demonstration activities, which only receive 50% reimbursement, the UFS will
perform a price adjustment that will remove all overheads. In addition the
amount of direct costs that can be claimed will also be reduced to achieve the
overall 50% reimbursement required. For example, if €100,000 direct costs and
€60,000 overheads are incurred on demonstration activities, the overall EC
reimbursement will only be €80,000 (50%). In this case there will be no actual
contribution towards overheads and there will be a shortfall of €20,000 of
direct costs reimbursement. Generally there should be other tasks on the project
(e.g. management or RTD costs) that will generate overheads that should mitigate
this shortfall. If not, there would be an overall loss to the GL account in this
case.
3. Budget set up on the UFS
The following activities will relate to tasks on CUFS.
|
UFS Task
|
EC FP7 Budget activity
|
|
1
|
RTD
|
|
2
|
Demonstration
|
|
3
|
Coordination/Support (for CA and SA)
|
|
4
|
Management
|
|
5
|
Other
|
|
6
|
Coordination (for CP s with CSA)
|
|
7
|
Support (for CP s with CSA)
|
4. Illustrated example of Cooperation programme budget
being set up on UFS
This example aims to demonstrate how the EC budget from the Grant Preparation
Form will be set up on the UFS.
Grant Agreement Preparation Forms – Collaborative project - A3.1: What it
costs
This is the form that will be issued by the EC that will detail the budget for
each activity. Please note that direct costs are split out by activity into
personnel costs, subcontracting (usually audit costs) and other direct costs.
Please note the difference between the total costs line and the requested EC
contribution (due to the reimbursement rates).
Budget Sheet for Framework 7
After reviewing the budget from the Grant Preparation Form a budget sheet will
need to be completed by the Department in order for the budget to be set up on
the UFS. There is a different template sheet for each type of project with
guidance notes at the bottom. The project costs in Euros need to be entered into
the relevant fields. The budget sheet then calculates the overheads and
reimbursement rates and converts the amounts into pounds.
UFS Budget
The UFS budget figures are taken from the budget sheet above. Please note the
new, negative ‘EC FW7 Price Adjustment’ line. This is how the UFS displays the
reimbursement of only 75% of the costs.
The UFS system is now set up to allow expenditure on your new FP7 grant.
If you have any further questions on the information in this document
please contact your Awards Administrator.
