ELIGIBILITY CONDITIONS PER BUDGET CATEGORIES
Under the Humanitarian Aid Model Grant Agreement (HUMA MGA) there are specific eligibility conditions for each budget category. They are detailed in the sessions below.
PERSONNEL COSTS
COSTS FOR EMPLOYEES (OR EQUIVALENT)
Actual costs related to employees must fulfil the general eligibility conditions and must relate to personnel working for the Partner under an employment contract (or equivalent appointing act). Such costs must be limited to salaries (including net payments for parental leaves), social security contributions, taxes and other costs linked to the remuneration, if they arise from national law or the employment contract (or equivalent appointing act) and be calculated on the basis of the costs actually incurred, in accordance with the following method:
daily rate of the person
X
number of day-equivalent (rounded to the nearest half-day) worked on the Action
The daily rate is calculated according to the following formula:
Annual person cost
215
The number of day-equivalents declared for a person must be identifiable and verifiable. The total number of day-equivalents declared in EU grants, for a person for a year, cannot be higher than 215 (if applicable, the time spent on parental leave will be deducted from the 215 days of the above formula). This calculation applies to all staff working for the Action, including full time staff.
Personnel cost may include supplementary payments if it is part of the Partner’s usual remuneration practices, it is paid in a consistent manner and the criteria used to calculate supplementary payments are objective and generally applied by the Partner, regardless of the source of funding.
If personnel costs are charged as unit costs according to usual cost accounting practices, such costs must fulfil the general eligibility conditions and the daily rate must be calculated:
- using the actual personnel costs recorded in the Partner’s accounts and excluding any costs which are ineligible or already included in other budget categories; and
- according to usual cost accounting practices which are applied in a consistent manner, based on objective criteria, regardless of the source of funding.
COSTS OF PERSONS WORKING UNDER A CONTRACT OTHER THAN AN EMPLOYMENT CONTRACT
Such costs are eligible as personnel costs, if they fulfil the general eligibility conditions and if the staff is assigned to the Action, works under conditions similar to those of employees (in particular regarding the way the work is organised, the tasks that are performed and the premises where they are performed) and the result of the work belongs to the Partner (unless agreed otherwise).
These costs must be calculated on the basis of a rate which corresponds to the costs actually incurred for the direct contract and must not be significantly different from those for personnel performing similar tasks under an employment contract with the Partner.
COSTS OF SECONDED PERSONS BY A THIRD PARTY AGAINST PAYMENT
Such costs are eligible as personnel costs, if they fulfil the general eligibility conditions and if the staff is assigned to the Action, works under conditions similar to those of employees (in particular regarding the way the work is organised, the tasks that are performed and the premises where they are performed) and the result of the work belongs to the Partner (unless agreed otherwise).
These costs must be calculated on the basis of a rate which corresponds to the costs actually incurred for the secondment and must not be significantly different from those for personnel performing similar tasks under an employment contract with the Partner.
SUBCONTRACTING COSTS
Subcontracts are normally wide in scope (e.g. implementation of a part of the project/action tasks). If a contract covers only individual equipment or consumables, this will be considered as purchase.
Subcontracting costs [including related duties, taxes and charges, such as non-deductible value added tax (VAT)] are eligible, if they are calculated on the basis of the costs actually incurred, fulfil the general eligibility conditions and are awarded using the Partners’ procurement procedures — provided that the latter ensure subcontracts with best value for money (or if appropriate the lowest price) and that there is no conflict of interests.
Only limited parts of the Action can be subcontracted. The tasks to be subcontracted and the estimated cost for each subcontract must be clarified in the Single Form and the total estimated costs of subcontracting per beneficiary must be set out in Annex 2 (or may be approved ex post in the final report, if the use of subcontracting does not entail changes to the Agreement, which would call into question the decision awarding the grant or breach the principle of equal treatment of Partners). However, ex-post approval bears the risk that DG ECHO might not approve the subcontract and rejects the costs.
Subcontracting between co-Partners is not allowed. All co-Partners contribute to the action; if one Partner needs the services of another in order to perform its part of the work, it is the second Partner who should declare the costs for that work. Coordination tasks of the coordinator (e.g. distribution of funds, review of reports, communication with DG ECHO, etc.) cannot be subcontracted.
PURCHASE COSTS
Purchase costs for the action [including related duties, taxes and charges, such as non-deductible value added tax (VAT)] are eligible if they fulfil the general eligibility conditions and are compliant with Partner’s procurement procedures — provided these ensure purchases with best value for money (or if appropriate the lowest price) and that there is no conflict of interests.
Purchases between co-Partners are in principle not accepted: if a Partner needs supplies from another Partner, it is the latter beneficiary that should charge them to the action.
TRAVEL AND SUBSISTENCE
Purchases for travel, accommodation and subsistence must be calculated on the basis of the costs actually incurred and in line with the Partner’s usual practices on travel.
EQUIPMENT
Purchases of equipment, infrastructure or other assets specifically for the action (or developed as part of the action tasks) must be recorded under a fixed asset account of the Partner in compliance with international accounting standards and the Partner’s usual cost accounting practices.
If equipment, infrastructure or other assets are rented or leased, full costs for renting or leasing are eligible, if they do not exceed the depreciation costs of similar equipment, infrastructure or assets and do not include any financing fees (e.g. finance charges included in the finance lease payments or interests on loans taken to finance the purchase). If the equipment is not used exclusively for the Action, only the portion used for the Action may be charged.
(i) To know more, see also FAQs 25, 33 and 144
Depreciation costs for equipment, infrastructure or other assets must be written-off in accordance with the Partner’s usual accounting practices and with international accounting standards. ‘International accounting standards’ are an internationally recognised set of rules for maintaining books and reporting company accounts, designed to be compared and understood across countries. Depreciation costs must be calculated according to the following principles:
- the depreciable amount (purchase price) of the equipment must be allocated on a systematic basis over its economic life;
- depreciated equipment costs cannot exceed the equipment’s purchase price;
- if the Partner does not use the equipment exclusively for the Action, only the portion used on the action may be charged;
- the Partner cannot charge depreciation for periods before the purchase of the equipment or for periods outside the Action implementation period.
OTHER GOODS, WORKS AND SERVICES
Purchases of other goods, works and services must be calculated on the basis of the costs actually incurred. Such goods, works and services include, for instance, consumables and supplies, promotion, dissemination, protection of results, translations, publications, certificates and financial guarantees, if required under the Agreement.
Supplies and consumables which were already in the stock of the Partner may be eligible as a direct cost, if they are used for the action, fulfil the general eligibility conditions and are purchased according to the Partner’s procurement procedures. Costs related to staff provided by a temporary work agency are eligible under this category, as they are considered as service costs.
OTHER COST CATEGORIES
DG ECHO recognizes as eligible two additional cost categories
FINANCIAL SUPPORT TO THIRD PARTIES
This budget category covers cascading grants, prizes or similar, i.e. where giving such support is part of the project activities. Cascading grants may be given via a financial donation to natural persons (e.g. beneficiaries receiving conditional or unconditional cash transfers) or organisations (Implementing Partners).
Support in kind (e.g. transfer of material for free) by the Partner to a third party is not considered financial support. The recipients are not party to the Grant Agreement and therefore are not listed in the Data Sheet.
Costs of financial support to third parties must be declared as actual costs, fulfil the general eligibility conditions for actual costs and implemented according to the conditions described in the Single Form.
In particular, for grants, the Partner will indicate:
- The maximum amount of financial support for each recipient. This amount should not exceed EUR 60,000, unless the objectives of the action would otherwise be impossible or excessively difficult to achieve. This is a limit per recipient; several recipients could receive up to EUR 60 000 each.
- The criteria for determining the exact amount of financial support (e.g. on the basis of a Minimum Expenditure Basked).
- A clear and exhaustive list of the types of activities that qualify for financial support for third parties (e.g. cash for training for beneficiaries; activities/results managed by an Implementing Partner).
- The persons or category(ies) of persons that may receive it (e.g. IDPs, GBV survivors, etc.). The Partner should describe in the Single Form the procedures for selecting the beneficiaries.
- The criteria and procedures for giving financial support.
For prizes, the Partner will have to describe:
- The conditions for participation and the conditions for cancellation of the contest, if any (e.g. eligibility and exclusion criteria; deadline for submission of entries; etc.) and the award criteria for assessing the quality of entries in light of the objectives and expected results of the activity. Such criteria must be objective.
- The amount of the prize.
The payment arrangements.
B. FIELD OFFICE COSTS
For grants awarded by DG ECHO, it is possible to declare costs for use of the field office during the Action as actual costs or as unit cost. If field office costs are declared as unit costs according to usual cost accounting practices, such costs must fulfil the unit cost eligibility conditions and the amount per unit must be calculated:
- using the actual costs for the field office recorded in the Partner’s accounts, attributed at the rate of office use and excluding any cost which are ineligible or already included in other budget categories;
- according to usual cost accounting practices which are applied in a consistent manner, based on objective criteria, regardless of the source of funding; and
- in line with the portion of the capitalised and operating costs of project office which corresponds to the duration of the Action.
Costs must fall within one of the following categories: i) costs of staff, including administration and management staff, directly assigned to the operations of the project office. The tasks listed in the Single Form, undertaken by staff assigned to the project office will be directly attributable to the implementation of the Action; ii) travel and subsistence costs for staff and other persons directly assigned to the operations of the project office; iii) depreciation costs, rental costs or lease of equipment and assets composing the project office; iv) costs of maintenance and repair contracts specifically awarded for the operations of the project office; v) costs of consumables and supplies specifically purchased for the operations of the project office; vi) costs of IT and telecommunication services specifically purchased for the operations of the project office; vii) costs of energy and water specifically supplied for the operations of the project office; viii) costs of facility management contracts including security fees and insurance costs specifically awarded for the operations of the project office.
Costs must be allocated to the Action based on an objective, fair and reliable allocation key, for example: i) pro rata the number of staff assigned to the action (as compared with the total number of staff in the office or the entire infrastructure where the office is located); ii) pro rata the time spent on the action (as compared with the total availability time of the office); ii) pro rata the weight of the EU contribution to the action (as compared with the total funding of the projects implemented through the office); and iv) pro rata the space occupied for the purpose of the action (as compared with the total space available in the office or the entire infrastructure where the office is located, e.g. the beneficiary’s headquarters).
INDIRECT COSTS
Partners may charge indirect costs to the Action. This budget category covers all costs for the Action that are not directly linked to it (i.e. overheads).
Indirect costs are declared as a fixed flat-rate (which, according to Article 181(6) of the Financial Regulation, can correspond to a maximum of 7% of the total direct costs).
The costs must fulfil the general conditions for flat-rate costs to be eligible, i.e. direct costs to which the flat-rate is applied must be eligible and calculation must be correct.
In case of multi-beneficiary grant agreement, co-Partners can decide how to split the indirect costs and the final agreement needs to be communicated to DG ECHO in Annex 2 (or, at the latest, in Annex 4). Indirect costs can also be shared with Implementing Partners, but this remains an internal decision.
REFERENCE & DOCUMENTS
Humanitarian Aid Model Grant Agreement, Article 6.2
EN
FR
Annotated Model Grant Agreement, Article 6.2
EN
