ELIGIBILE COSTS

If the vehicle no longer has economic value, the Partner is free to decide how to use it, including selling it. DG ECHO’s prior approval is not required in such cases.

Yes, depreciation or rental costs may be charged proportionally to actual use, following Article 6.2 (C.2) eligibility rules, and must be recorded consistently in the accounting system. However, if the equipment was purchased with DG ECHO funds, related depreciation or rental costs cannot be charged again to avoid double funding. Maintenance and running costs may still be charged.

Yes, depreciation related to the use of a local office building may be charged to the Action, provided it complies with eligibility rules. However, mortgage loan payments themselves are not eligible under the MGA.

The residual economic value should be assessed at the end of the Action, when the partner decides on the end use of equipment fully charged to the Action. To calculate this, the partner must simulate depreciation from the date of purchase up to the Action’s end date, as if the asset had been depreciated normally. This applies even if the equipment was used by an Implementing Partner. 

Yes, “full capitalized costs” may be considered eligible under a HUMA Action. The eligibility conditions are outlined in Article 6.2.C.2 of the Model Grant Agreement (MGA).

Yes, if transfer is not possible.

Article 6.2 D.1 of the MGA reiterates the conditions established in the 2024 Financial Regulation (Article 207). In Chapter 10.6 of the e-Single Form (e-SF), the partner provides the required information about financial support to third parties. The amount of support given to implementing partners must be clearly listed in the budget template (Annex 2) and the financial statement (Annex 4) under category D.1.

Yes, cash support to final beneficiaries is considered “financial support to third parties.” By completing the e-Single Form and the financial Annexes, partners comply with the five criteria under Article 6.2 D.1(a) of the MGA. Consequently, the amount of cash support provided to final beneficiaries must be listed in the budget template under category D.1. This does not apply to transfer costs for cash provision and vouchers.

Cash support to final beneficiaries is exempt from the application of Article 9.4 of the MGA.

Yes. According to Article 6.1(a)(ii) of the MGA, costs related to the preparation of the final report may be eligible even if incurred after the Action’s eligibility period. Therefore, office running costs linked to final reporting (for a maximum of as many months needed to submit the final report as per the deadline in the contract/amendment) may be included, provided they are reasonable, justified, and respect the principles of sound financial management (economy and efficiency). These costs are not eligible in case of a follow-up Action, to avoid double charging.

Value Added Tax (VAT) that cannot be refunded in third countries may be considered eligible under certain conditions.

The partner must be able to demonstrate in the event of a possible ex-post audit, that they requested an exemption from the relevant authorities (e.g., a recent copy of the letter sent to the tax authorities). As follows:

• The partner must provide the response from the tax authorities or reference the applicable legislation confirming that VAT cannot be refunded.
• If no reply is received from the authorities, a recent letter from the beneficiary requesting the VAT exemption or a reference to the applicable legislation can serve as proof that the exemption was requested.

If a beneficiary receives a VAT reimbursement after receiving the final payment and VAT has already been reimbursed by DG ECHO, the beneficiary must reimburse DG ECHO accordingly and should contact DG ECHO in such cases.

VAT rules apply equally to beneficiary(ies) and Implementing Partners.

In accordance with the MGA Data Sheet, "VAT: Yes" means VAT is eligible, but only when it is not deductible (see Article 6.3(viii) of the MGA).

Training costs (i.e. capacity building) for the partner’s staff or implementing partners’ (IPs) staff can be accepted if the training is necessary for the implementation of the Action. So, training related to safety, security, or logistics that is directly linked to the country context and the implementation of the Action may be considered eligible. To be eligible, the training should correspond to a specific result or activity detailed in the e-Single Form (Annex 1 to the MGA).

Training related to general background skills (e.g. HR management, IT, accounting, language courses, HEAT, first aid) is usually considered part of the indirect costs, unless it is explicitly included in the action proposal and is essential to achieving a specific result of the Action.

Yes, parental leave is considered an eligible cost. Please refer to Article 6.2.A.1 of the Annotated Grant Agreement (AGA) for details. According to the current provisions, days of parental leave during the calendar year may be deducted from the 215 days used to calculate daily rates. This applies both to beneficiaries using the standard method and those applying their usual cost accounting practices.

However, no other types of leave or absences may be deducted for this purpose, including long-term sick leave, breastfeeding leave, leave to care for a sick child, or absences due to kidnapping or imprisonment.

This clarification is considered retroactive as of 1 January 2021.

Yes, if an external audit is mandatory under the applicable national legislation, the audit costs may exceptionally be considered eligible. This applies to cases of action-based audits as well as audits of a wider scope  (e.g. annual, systems or organisational audits). In order to have these costs charged to the action the partner has to indicate and justify it in chapter 9.4. of the e-Single Form (e-SF).

In cases where the audit is wider than the DG ECHO-funded action, the calculation of the costs that can be eligible, must be made carefully to ensure proportionality and avoid double funding. The costs of audits of a wider scope are typically a part of the field office costs and are usually declared as shared costs (unit costs based on the usual accounting practices). Otherwise, if these are declared as eligible as direct costs – this may be done only provided that the costs are incurred within eligibility period and counted in the proportion to DG ECHO’s action duration.

In cases where the cost covers an audit that has been carried out after the action’s implementation – it can only be an audit of the action (which justifies the eligibility of its costs after eligibility period) and, as all cases above, it has to be mandatory under the national legislation.

These external audit costs should not be confused with the costs of the CFS when expressly required in the MGA (see FAQ 269).

Costs for staff incurred before the starting date of the Action are not eligible. This includes costs related to personnel (e.g., administrative staff) involved in procurement procedures before the project start.

Only the costs of the actual purchases are eligible, provided the goods or services are distributed or delivered during the action’s implementation. The same principle applies to storage costs.

Two options are foreseen, depending on the specific case:

1. If severance payments are provisioned monthly and meet the criteria set out in the Annotated Grant Agreement (AGA), referring to Article 6.2.A.1 (Employees), they can be considered eligible staff costs—even if the contract ends after the reporting period.
2. If the severance was not provisioned monthly (e.g. not foreseen in the daily rate), then only the portion (pro-rata) of the indemnity falling within the reporting period is eligible—and only if the contract ends during the reporting period.

Refer to AGA, Article 6.2.A.1 – Employees or equivalent: Types of costs – Forms – Eligibility Conditions – Calculation à Specific cases (costs for employees or equivalent (A.1)).

There is no fixed threshold applicable to personnel costs. However, they must comply with the eligibility conditions outlined in Article 6.2(A) of the Model Grant Agreement (MGA), such as being directly linked to and necessary for the Action. If the share of the budget allocated to human resources is particularly high (e.g. in the case of protection activities), it is advisable to provide a justification in the e-Single Form (e-SF).

If, for the purpose of the grant, the Partner’s staff are required to travel to other locations, then the related travel costs and per diem are justified under the condition that the staff are not receiving double compensation (i.e. being paid both by their employer and by the beneficiary for the same work). Supporting documents or declarations may be requested at the final report stage or during an audit.

It is the responsibility of the beneficiary to determine the employment status of the personnel involved in the action. If the Ministry of Health staff are performing additional tasks, working extra hours, or are seconded to other locations specifically for the purposes of the project, then the additional remuneration may be justified. Adequate documentation should be maintained to support this.

Yes. The cost of staff leave is included as part of the actual personnel costs incurred during the reporting period. These costs should then be divided into the maximum declarable day-equivalents for the purpose of calculation of the daily rate.

Reference documents on staff and field office costs are available on the DG ECHO Partners’ website. Below is a brief overview of the two alternative methods for calculating personnel costs:

1. Actual Costs:

Staff costs (HQ and field) can be declared based on actual costs and calculated according to the formula provided in the Model Grant Agreement (MGA):

The number of day-equivalents declared for a person must be identifiable and verifiable (e.g. through timesheets). Further explanation is provided in the Annotated Grant Agreement (AGA), Article 6.2.A.1 (Employees).

2. Unit Costs:

Alternatively, staff costs may be declared as unit costs, calculated in line with the Partner’s usual cost accounting practices. The appropriate method should be selected by completing the relevant column in the budget (Annex 2) and/or at the final report stage (Annex 4). No derogation or prior approval is required. The unit cost methodology, as well as the number of units declared (supported by timesheets or equivalent), will be reviewed during the audit stage.

Both methods require the calculation of a unit cost, which can be based on either an hourly or daily rate. In both cases, timesheets or equivalent records must be provided to justify the number of units worked on the project.

Reliable time records must be maintained, dated, and signed at least monthly by the person working on the action and their supervisor. These records can be either paper- or computer-based. If no formal system is available, a monthly declaration of day-equivalents worked for the action may be used as an alternative.

Additional guidance is available in the AGA – Article 20 ‘’RECORD KEEPING’’.

No, a pro rata approach is not possible.

Partners cannot charge DG ECHO a percentage of incurred eligible staff costs based on time worked on the action. Time worked on the project must be converted into units (hours or days) and supported by timesheets or a monthly declaration (see FAQ 94). Personnel costs declared as direct eligible costs in DG ECHO grants must be calculated as follows: number of day-equivalents worked × unit cost.

Implementing Partners fall under the responsibility of DG ECHO Partners who engage them. Implementing Partners should calculate their staff costs using the 215-day methodology, which is considered the safest option. Alternatively, they may use their usual accounting practices or those of DG ECHO Partner, provided these practices fully comply with the DG ECHO decision on staff costs adopted in 2021 and available in the Reference Documents section.

It is important to emphasize that the pro-rata approach is never permitted (see FAQ 140).

Standard supplementary payments are additional payments for personnel assigned to the action. They can be included in the calculation of the daily rate if they are part of the beneficiary’s usual remuneration practices and are paid consistently whenever the same type of work or expertise is required. The criteria used to calculate these supplementary payments must be objective and generally applied by the beneficiary, regardless of the funding source.

DG ECHO’s decision on the use of unit costs for staff and field office costs was adopted in August 2021 and it applies retroactively from 1 January 2021. No modification request is required to apply this decision to ongoing actions. The relevant information on staff costs can be provided at the final reporting stage by completing the appropriate column in Annex 4 of the MGA.

Headquarters or Regional Office staff costs are not eligible by default. However, they may be considered eligible if they meet specific conditions:

• The costs must relate to monitoring the action in the field,
• the preparation of the Final Report (for a maximum of as many months needed to submit the final report as per the deadline in the contract/amendment), or
• A specific task necessary to achieve the operational results and must be clearly identified as an operational activity in the e-Single Form (Annex 1 of the Grant Agreement).
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Only the costs of technical staff can be eligible under these conditions. Staff with administrative or managerial profiles (e.g. finance, HR, desk officer, fundraising) are not eligible, unless no equivalent profile is available in the field.

Yes, where due to particularly dangerous operating conditions, humanitarian aid workers or field offices are exposed to increased risk, DG ECHO Partner may include as Action costs any justified increased costs that are necessary and directly linked to the implementation of the Action.

Costs necessary for the protection of staff and/or the field offices may be included in the Action Budget, as follows:

•     Staff Costs – Where costs relate to the needs of a staff member and may be included as part of the Partner’s corporate staff renumeration package (e.g. medical and life insurance, additional allowances for dangerous postings or travel costs, in-kind support etc.) these costs should be included in the Action budget through the daily staff rate/unit costs used to calculate staff costs based on either of the two available calculation methods. There is no threshold for personnel costs (See FAQ 31), but all personnel costs must be duly justified and incurred and can be verified ex post by the Commission during checks and audits. This applies to costs related to both international staff and local staff. (See FAQ 94 & AGA - Article 6.2.A.1 Employees).

In this context, any costs such as measures to ensure the well-being and safety of implementing partner staff must be clearly visible and properly documented within the action budget to be considered eligible.

•                 Field Office Costs – Where costs relate to the needs of running the field office, these costs should be included in the Action budget through the related unit costs based on the Partner’s usual cost accounting practices based on an objective, fair and reliable allocation key, that can be verified ex post by the Commission during checks and audits. The list of “Field office costs” is provided in the “Decision authorising the use of unit costs for staff and field office costs using usual cost accounting practices under the Humanitarian Aid Programme”. These may include, costs related to buildings, security systems, equipment, travel and subsistence costs for staff and other persons directly assigned to the operations of the project office; costs of facility management contracts, including security fees and insurance costs specifically awarded for the operations of the project office (see FAQ 43).

Yes, partners can declare field office costs as unit costs using their usual accounting practices. These costs must be explicitly identified as 'Field office costs (Simplified allocation method)' in the budget and categorized under Annex 2, category D2, 'Field office cost'. The method used must comply with the DG ECHO Decision of 21/09/2021* and it will be assessed during the audit stage. Alternatively, partners may also choose to declare field office costs as actual costs.

*DECISION authorising the use of unit costs for staff and field office costs using usual cost accounting practices under the Humanitarian Aid Programme.