SIMPLIFIED COST OPTIONS

Legal framework
Regulation 1303/2014 - Article 67 – Forms of grants and repayable
assistance
Regulation 1303/2014 - Article 68 - Flat rate financing for indirect costs
and staff costs concerning grants and repayable assistance
Regulation 1299/2014 – Article 19 – Staff costs

Provisions from the:

EC Guidance on Simplified Cost Options (SCOs) –
http://ec.europa.eu/regional_policy/index.cfm/en/information/legislation/
guidance/
Applicant Guide

Simplified Cost Options applicable to INTERREG V-A Romania-Bulgaria

For INTERREG V-A, the Simplified Cost Options consisting in flat rates will apply
for the following categories of expenditure: Staff costs and Office and
admistrative costs.
Flat rate financing means in practice to apply a percentage (fixed ex ante - see
below) to a calculation basis, consisting of one or several categories of eligible
costs, which are clearly identified in advance.
The calculation basis for the application of the flat-rates for Staff costs and
Office and administrative costs for INTERREG V-A Romania-Bulgaria will consist
in the following eligible direct costs: Travel and accommodation, External
expertise and services, Equipment, Infrastructure and works.

The following specific flat rates shall apply for INTERREG V-A Romania-
Bulgaria:
Staff costs – will be reimbursed based on a flat rate of maximum 15% for soft
projects and maximum 5% for hard projects, applied to the calculation basis, as
mentioned above.
For projects externalising parts of hole of the project management (including
external expertise related to the organisation of the public procurements
for the project, services related to the financial and technical reporting
for the project), the estimated value of the externalised parts of the project
management will be mentioned within the application form and the flat rate
will be diminished proportionally:

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[Maximum flat rate for staff for the respective type of

project * calculation basis - amounts for project
management] * 100
Staff flat rate =
calculation basis

Office and administrative costs – will be reimbursed based on a flat-rate of 5

% for soft projects and 1% for hard projects applied to the calculation basis, as
mentioned above.
Office and administrative costs are costs which are not or cannot be connected
directly to an individual activity of the beneficiary 1. Such costs will include:
office rent; insurance and taxes related to the buildings where the staff is
located and to the equipment of the office (e.g. fire, theft insurances);
utilities (e.g. electricity, heating, water); office supplies; general
management, accounting provided inside the beneficiary organisation;
archives; maintenance, cleaning and repairs; security; IT systems;
communication (e.g. telephone, fax, internet, postal services, business cards);
bank charges for opening and administering the account or accounts where the
implementation of an operation requires a separate account to be opened;
charges for transnational financial transactions.

The office and administrative costs mentioned above will not be requested /
will not be accepted for reimbursement under other categories of
expenditure!!

Example 1:
In case of a soft project with the following budget:
Amount
Categories of expenditure
(Euro)

Travel and accommodation 5,000

External expertise and services 100,000

Out of which external expertise and services related to the project 10,000
management

Equipment 110,000

TOTAL (calculation basis) 215,000

Project preparation costs (max. 10% of calculation basis) Max. 21,500

Staff costs – flat rate of 10.35%* of calculation basis 22,250

1
EC Guidance on Simplified Cost Options, page 15, indirect costs

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Office and administrative costs – flat rate of 5% of 10,750

calculation basis

TOTAL project eligible budget 304,168.61

*The flat rate for staff was calculated as follows:

[15% * 215,000 – 10,000] * 100

Staff flat rate = = 10.35%
215,000
The maximum flat rate for staff for soft projects, namely 15% applied to the sum of
amounts for Travel and accommodation, External expertise and services = 15% * [5,000
+ 100,000 + 110,000] = 15% * 215,000 = 32,250 Euro
32,250 Euro - 10,000 Euro = 22,250 Euro, which represents 10,35% from the calculation
basis = flat rate for staff applicable for the project.

!During project implementation only costs included in Travel and accommodation;

External expertise and services; Equipment and Infrastructure and works and Project
preparation will be subject to control of the supporting financial documents!

The flat rates will remain the same for all beneficiaries for the entire
project implementation period!

The beneficiaries will not be obliged to report or prove categories of costs

calculated on the basis of a flat rate 2, but only the eligible costs included in
the calculation basis for the application of the flat rate (the eligible direct
costs: travel and accommodation, external expertise and services, equipment,
infrastructure and works).
Correct classification of costs and absence of double declaration of costs shall
be verified.

Management verifications (including controllers) and audits will not check

supporting documents for real costs under a category of expenditure
calculated by a flat-rate3, but only supporting documents for costs included in
the calculation basis for the application of the flat-rate.

2
According to the EC Guidance on Simplified Cost Options,
http://ec.europa.eu/regional_policy/index.cfm/en/information/legislation/guidance/, page 37
3
According to the EC Guidance on Simplified Cost Options,
http://ec.europa.eu/regional_policy/index.cfm/en/information/legislation/guidance/, page 31

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In the case of categories of costs for which flat rates apply, the beneficiaries
are entitled to be reimbursed costs in due proportion with the direct
eligible costs included in the calculation basis for applying the flat rate!
No costs incurred and paid under Travel and accommodation, External
expertise and services, Equipment, Infrastructure and works will result in no
right to be reimbursed amounts for Staff costs and Office and Administrative
costs!!

The percentage used when requesting costs under a category of expenditure

for which a flat rate will remain the same for all reimbursement requests!!
This rule shall apply irrespective of whether different amounts were already
actually paid by the beneficiary for the respective category of costs for which
flat rates apply.

All other categories of eligible costs applicable under INTERREG V-A

Romania-Bulgaria will be reimbursed based on eligible costs actually
incurred and paid:
Project preparation – consist in eligible costs (travel and accommodation
costs related to meetings between project beneficiaries, external expertise
and services, infrastructure and works (only studies and costs for
documentation necessary to obtain the necessary endorsements and
authorizations, documentation concerning the urban planning plan, impact
assessments, location studies/appraisals, including their technical
verification). .) actually incurred and paid, in the limit of maximum 10% of the
following eligible direct costs included in the project budget:
Travel and accommodation
External expertise and services
Equipment
Infrastructure and works

Travel and accommodation – consist in eligible costs (according to the Rules

on Eligibility of Expenditure approved by the MC) actually incurred and paid

External expertise and services – consist in eligible costs (according to the

Rules on Eligibility of Expenditure approved by the MC) actually incurred and
paid

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Infrastructure and works – consist in eligible costs (according to the Rules on

Eligibility of Expenditure approved by the MC) actually incurred and paid

Example 2 - budget of a hard project with a total eligible value of 928,000 Euro with no
project management related external expertise and services purchased:

Amount
Categories of expenditure
(Euro)

Travel and accommodation 2,000

External expertise and services 28,000

Out of which external expertise and services related to the project 0

management

Equipment 100,000

Infrastructure and works 670,000

TOTAL (calculation basis) 800,000

Project preparation (max. 10% of calculation basis) Max. 80,000

Staff costs – flat rate of 5% of calculation basis 40,000

Office and administrative costs – flat rate of 1 % of 8,000

calculation basis

TOTAL project eligible budget 928,000

!During project implementation only costs included in Travel and accommodation;

External expertise and services; Equipment and Infrastructure and works and Project
preparation will be subject to control of the supporting financial documents!

Example 3 - budget of a hard project with a total eligible value of 920,000 Euro with project
management related external expertise and services purchased:

Amount
Categories of expenditure
(Euro)

Travel and accommodation 2,000

External expertise and services 28,000

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Out of which external expertise and services related to the project 8,000
management

Equipment 100,000

Infrastructure and works 670,000

TOTAL (calculation basis) 800,000

Project preparation (max. 10% of calculation basis) Max. 80,000

Staff costs – flat rate of 4%* of calculation basis 32,000

Office and administrative costs – flat rate of 1%* of 8,000

calculation basis

TOTAL project eligible budget 920,000

*The flat rate for staff was calculated as follows:

[5% * 800,000 – 8,000] * 100

Staff flat rate = = 4%
800,000
The maximum flat rate for staff for hard projects, namely 5% applied to the sum of
amounts for Travel and accommodation, External expertise and services,
Infrastructure and works= 5% * [2,000 + 28,000 + 100,000 + 670,000] = 5% * 800,000 =
40,000 Euro
40,000 Euro - 8,000 Euro = 32,000 Euro, which represents 4% from the calculation basis
= flat rate for staff applicable for the project.
!During project implementation only costs included in Travel and accommodation;
External expertise and services; Equipment and Project preparation will be subject to
control of the supporting financial documents!

Example 4 - budget of a hard project with a total eligible value of 509,985 Euro with project
management related external expertise and services purchased:

Amount
Categories of expenditure
(Euro)

Travel and accommodation 2,000

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External expertise and services 48,000

Out of which external expertise and services related to the project 12,000
management

Equipment 400,000

Infrastructure and works 0

TOTAL (calculation basis) 450,000

Project preparation (max. 10% of calculation basis) Max. 45,000

Staff costs – flat rate of 2.33%* of calculation basis 10,485

Office and administrative costs – flat rate of 1% of 4,500

calculation basis

TOTAL project eligible budget 509,985

*The flat rate for staff was calculated as follows:

[5% * 450,000 – 12,000] * 100

Staff flat rate = = 2.33%
450,000
The maximum flat rate for staff for hard projects, namely 5% applied to the sum of
amounts for Travel and accommodation, External expertise and services,
Infrastructure and works= 5% * [2,000 + 48,000 + 400,000] = 5% * 450,000 = 22,500 Euro
22,500 Euro - 12,000 Euro = 10,500 Euro, which represents 2.33% from the calculation
basis = flat rate for staff applicable for the project.
!During project implementation only costs included in Travel and accommodation;
External expertise and services; Equipment and Project preparation will be subject to
control of the supporting financial documents!