REMAINING SUPPLIES

If the vehicle does not have an economic value anymore, the Partner is free to decide how to use it.  Therefore, it can also decide to sell it, and DG ECHO’s prior approval is not required.

Transfer to another DG ECHO funded Action is only possible if the original Action is implemented by the Partner who intends to transfer the remaining goods. This rule allows DG ECHO to have a direct control over the end use of the goods and safeguard sound financial management of humanitarian aid funds.
Transfer to a DG ECHO funded action implemented by another partner is possible.

Goods may be transferred only once. This means that goods must be fully consumed by the next action they are transferred to. If transfer to another ongoing action is not possible, the beneficiaries can — after the end of the action — transfer the equipment or goods to the final recipients, local non-profit organisations, international non-profit organisations, international organisations, or local authorities, if agreed by the granting authority. To be noted that. under the MGA the distinction between donation and transfer do not exist anymore. More detailed guidance is available in the AGA – Annex 5.

The threshold for low value allowance equipment is Euro 15 000 regardless of the Action's budget or the number of the consortium members (i.e. mono- or multi-beneficiary grant).

The contractual provision on this point can be found in Annex 5 of the MGA (‘Transfer of assets at the end of the Action’) while detailed guidance is available in the AGA – Annex 5.

In principle in the MGA, reimbursement of full price of equipment and goods is the rule, with the obligation to transfer or donate them after the end of the action, unless exempted by DG ECHO. If transfer to another ongoing action is not possible and if agreed by DG ECHO, the Partner can transfer or donate the equipment or goods to the final recipients, local non-profit organisations, international non-profit organisations, international organisations, or local authorities. If not, only the depreciation costs are eligible (regardless of the fact the Commission is the single largest donor of the action).  

Low value equipment (equipment with a value below EUR 1000 under the MGA, instead of previous EUR 750 per item under the FPA2014) is exempted from the obligation to transfer.

If the cost of the item is between EUR 1001 and EUR 2500 per item, the exception applies if the total costs of the items does not exceed EUR 15 000.

Remaining goods at the end of the Action should, ideally, be distributed by requesting a no-cost-extension of the Action. If this is not possible and the results of the Action have been achieved, remaining goods not exceeding 20% of goods per type of goods (e.g drugs, food, NFI kits.) purchased during the Action, the Partner does not have to report to DG ECHO on the final use, but the foods have to be used for the benefit of humanitarian aid actions. The final use of these goods will be verified at audit stage.  

The assessment of the residual economic value will be done at the end of the Action, when the partner will have to decide on the end use of the equipment fully charged to the Action. To calculate this value, the partner has to simulate the depreciation costs of the equipment as if it was proposed for a depreciation from the date of its purchase until the end of the Action. This remains the same even if the equipment was used by an Implementing Partner . 

The obligation to transfer or donate remains valid until the equipment has been fully depreciated.  Therefore, if at the end of the action to which the transfer was made the equipment is not fully depreciated and transfer is not possible anymore, DG ECHO could either recover the remaining value according to the applicable depreciation rules, or, if justified, grant the partner to keep the equipment.

The calculation is done on the quantity of the goods purchased during the Action, per type of goods (e.g drugs, food, NFI kits.).

If at the end of the action the Partner has remaining goods in a quantity lower than 20% the Partner does not have to report to DG ECHO the final destination of the mentioned goods. However, if the quantity of the remaining goods at the end of the action is above the 20% threshold the Partner has to take the following steps in order: 1. Request a no-cost-extension; 2. Transfer them to another DG ECHO funded action; 3. Transfer them to the final recipients, local non-profit organisations, international non-profit organisations, international organisations, or local authorities upon agreement of DG ECHO.

Under no circumstances, in case of remaining goods exceeding the 20% threshold the Partner can keep the goods up to the 20%.  This threshold of 20%, under the previous FPA2014 set at 5%, is intended as an upper limit and defines the ceiling for considering remaining goods as ‘marginal quantity’. If the 20% threshold is exceeded the quantity of remaining goods cannot be considered as ‘marginal’ and the steps mentioned above and further detailed in the AGA – Annex 5 must be followed.

It has to be noted that eligibility rules laid down in article 6.1 MGA continue to apply, according to which costs to be eligible must be (among others): (iv) necessary for the implementation of the Action; vii) reasonable, justified and must comply with the principle of sound financial management. Therefore, it is for the Partner to ensure that the procurement of the goods has been properly planned to avoid over-procurement; practice that DG ECHO does not intent to encourage by covering the related costs.