# Commission Decision of 20 January 2006 laying down detailed rules for the implementation of Council Decision 2004/904/EC as regards the eligibility of expenditure within the framework of actions co-financed by the European Refugee Fund implemented in the Member States (notified under document number C(2006) 51/1) (Only the Czech, Dutch, English, Estonian, Finnish, French, German, Greek, Hungarian, Italian, Swedish, Latvian, Lithuanian, Polish, Portuguese, Slovakian, Slovenian and Spanish texts are authentic) (2006/399/EC)

EU Decision 2006/399 · adopted 20 January 2006

Commission Decision of 20 January 2006 laying down detailed rules for the implementation of Council Decision 2004/904/EC as regards the eligibility of expenditure within the framework of actions co-financed by the European Refugee Fund implemented in the Member States (notified under document number C(2006) 51/1) (Only the Czech, Dutch, English, Estonian, Finnish, French, German, Greek, Hungarian, Italian, Swedish, Latvian, Lithuanian, Polish, Portuguese, Slovakian, Slovenian and Spanish texts are authentic) (2006/399/EC)

## Introductory text

Commission Decision
of 20 January 2006
laying down detailed rules for the implementation of Council Decision 2004/904/EC as regards the eligibility of expenditure within the framework of actions co-financed by the European Refugee Fund implemented in the Member States
(notified under document number C(2006) 51/1)
(Only the Czech, Dutch, English, Estonian, Finnish, French, German, Greek, Hungarian, Italian, Swedish, Latvian, Lithuanian, Polish, Portuguese, Slovakian, Slovenian and Spanish texts are authentic)
(2006/399/EC)
THE COMMISSION OF THE EUROPEAN COMMUNITIES,
Having regard to the Treaty establishing the European Community,
Having regard to Council Decision 2004/904/EC of 2 December 2004 establishing a European Refugee Fund for the period 2005 to 2010, and in particular Article 21(3) thereof,
Having consulted the Committee established by Article 11(3) of Decision 2004/904/EC,
Whereas:
(1)
In order to ensure the efficient implementation of the European Refugee Fund in the Member States, in accordance with the principles of sound financial management, a series of common rules should be adopted on the eligibility of expenditure from the Fund.
(2)
In accordance with Article 3 of the Protocol on the position of the United Kingdom and Ireland, annexed to the Treaty on European Union and to the Treaty establishing the European Community, the United Kingdom takes part in Decision 2004/904/EC and by consequence in this present decision.
(3)
In accordance with Article 3 of the Protocol on the position of the United Kingdom and Ireland, annexed to the Treaty on European Union and to the Treaty establishing the European Community, Ireland takes part in Decision 2004/904/EC and by consequence in this present decison.
(4)
In accordance with Articles 1 and 2 of the Protocol on the position of Denmark, annexed to the Treaty on European Union and to the Treaty establishing the European Community, Denmark does not take part in Decision 2004/904/EC and is not bound by it nor by this present decision,
HAS ADOPTED THIS DECISION:

## 1 

This Decision shall apply to the co-financing of actions provided for in Articles 5, 6 and 7 of Decision 2004/904/EC, which are managed by the Member States.

## 2 

For the purposes of this Decision:
1.. ‘Project’ shall mean the specific, practical means deployed to implement all or part of an operation by the beneficiaries of grants. Each project will have a well-defined description, duration, budget, objectives, staff assigned to it, and will be implemented by a named legal entity, or a group of legal entities.
2.. ‘beneficiaries’ shall mean the legal entities (such as NGOs, federal, national, regional or local authorities, other non-profit organisations, private or public law companies, international organisations) responsible for implementing projects.

## 3 

1. The rules set out in the Annex to this Decision shall be used to determine the eligibility of expenditure of actions financed under the annual programmes referred to in Article 16 of Decision 2004/904/EC.
2. Member States may apply national eligibility rules that are more rigorous than those prescribed in this Decision.

## 4 

The present decision is addressed to the Kingdom of Belgium, the Czech Republic, the Federal Republic of Germany, the Republic of Estonia, the Hellenic Republic, the Kingdom of Spain, the French Republic, Ireland, the Italian Republic, the Republic of Cyprus, the Republic of Latvia, the Republic of Lithuania, the Grand Duchy of Luxembourg, the Republic of Hungary, the Republic of Malta, the Kingdom of the Netherlands, the Republic of Austria, the Republic of Poland, the Portuguese Republic, the Republic of Slovenia, the Slovak Republic, the Republic of Finland, the Kingdom of Sweden, the United Kingdom of Great Britain and Northern Ireland.

## Signature

Done at Brussels, 20 January 2006.
For the Commission
Franco Frattini
Vice-President

## Annex: ELIGIBILITY OF EXPENDITURE UNDER THE EUROPEAN REFUGEE FUND (2005-2010)

### Division 1: GENERAL RULES

## Rule No 1

Costs must be directly linked to the objectives described in Article 1 of Council Decision 2004/904/EC.

## Rule No 2

Costs must relate to the projects in the fields described in Articles 4 to 7 of Council Decision 2004/904/EC.

## Rule No 3

Costs must relate to projects undertaken for the benefit of the target groups defined in Article 3 of Council Decision 2004/904/EC.

## Rule No 4

Costs must be necessary for carrying out the projects covered by the multiannual and annual programmes as approved by the Commission.

## Rule No 5

Costs must be reasonable and comply with the principles of sound financial management; in particular value for money and cost-effectiveness (e.g. staff costs related to project management and implementation must be proportionate to project size, etc.). Costs shall be considered as eligible expenditure in their entirety or in part, depending on whether they were generated entirely or only in part by the project.

## Rule No 6

Costs must have actually been incurred, correspond to payments made by the beneficiary, be recorded in the accounts or tax documents of the beneficiary, and be identifiable and controllable.
As a rule, payments by beneficiaries shall be supported by receipted invoices. Where this cannot be done, payments shall be supported by accounting documents or supporting documents of equivalent probative value.
(1) Expenditure related to projects referred to in Articles 5 and 6 of Council Decision 2004/904/EC must be incurred on the territory of the Member State. Expenditure related to projects referred to in Article 7 of Council Decision 2004/904/EC may be incurred on the territory of the Member State and in the country or region of origin or former habitual residence.
(2) For each project, supporting documents (receipted invoices, receipts, other proof of payment or accounting documents of equivalent probative value) shall be recorded, numbered and kept by the beneficiary, where possible in one specific location and, as a general rule, at the headquarters of the beneficiary, for five years after the end date of the project, in case they need to be verified. The Commission reserves the right to request, at any time, any invoices or supporting documents for expenditure relating to projects for verification. Where such invoices or supplementary documents cannot be produced by the beneficiary, the expenditure related to it will not be eligible for co-financing.
Beneficiaries must maintain either a separate project accounting system or an adequate accounting code for all transactions relating to the project.

## Rule No 7

Projects supported by the Fund shall be cofinanced by public or private sources and shall not be eligible for funding from other sources covered by the Community budget. Project income shall be constituted by financial contributions granted to the project by the Fund, by public or private sources in, including the beneficiary's own contribution, as well as any receipts generated by the project.
‘Receipts’ for the purposes of this rule covers revenue received by a project during the period covered by the co-financing by the Fund, from sales, rentals, services, enrolment/fees or other equivalent, including interest generated by pre-financing payments of Community funding to the project.
Projects supported by the Fund must be of a non-profit nature. If, at the end of the project, sources of income, including receipts, exceed the amount of expenditure, the European Refugee Fund's participation to the project shall be reduced accordingly.
All sources of income for the project must be recorded in the beneficiary's accounts or tax documents, and must be identifiable and controllable.

### Division 2: CATEGORIES OF ELIGIBLE COSTS (AT PROJECT LEVEL)

### Division 2.1: Eligible direct costs

## 

The eligible direct costs for the project are those costs which, with due regard for the general conditions of eligibility set out in part I above, are identifiable as specific costs directly linked to performance of the project and which can therefore be booked to it directly. In particular, the following direct costs are eligible.

## Rule No 8 Staff costs

The cost of staff assigned to the project, corresponding to real salaries plus social security charges and other remuneration-related costs, shall be eligible. Staff costs may not exceed the salaries and other employment charges normally incurred by the beneficiary, nor exceed the most economical rates in the relevant market. However, levies, taxes or charges (in particular, direct taxes and social security contributions on wages) arising from projects co-financed by the European Refugee Fund constitute eligible costs only where they are actually and definitively borne by the beneficiary of the subsidy.
Staff costs for public officials are only eligible for activities that are not part of their normal routine and for tasks that are specifically linked to implementation of the project, on the following terms:
(a) civil servants or other public officials seconded by duly documented decision of the competent authority, entrusted with implementing a project;
(b) other staff employed solely for the purpose of implementing a project.

### Division 2.2: Eligible indirect costs

## Rule No 22 Indirect costs

A fixed percentage of overheads up to a maximum of 7 % of the total amount of eligible direct costs shall be eligible as indirect costs, provided this figure is included in the project’s forward budget. Indirect costs shall be eligible provided that they do not include costs assigned to another heading of the budget for the project, that they cannot be charged direct and that they are not financed from other sources. Indirect costs shall not be eligible where the grant agreement or equivalent form of legal instrument concluded with the beneficiary concerns the financing of a project conducted by an entity which is already receiving an operating grant from the Community and/or a national authority.

### Division 3: INELIGIBLE EXPENDITURE

## Rule No 23 Ineligible costs

(1) The following costs shall not be eligible: return on capital, debt and debt service charges, debit interest, foreign exchange commissions and exchange losses, provisions for losses or potential future liabilities, interest owed, VAT (unless covered by the conditions set out in rule No 20), doubtful debts, fines, financial penalties, litigation costs, and excessive or reckless expenditure.
(2) Entertainment costs exclusively for project staff are not eligible. Reasonable hospitality costs at social events justified by the project, such as the end of project event or meetings of the project steering group are permitted.
(3) Costs declared by the beneficiary and covered by another project or work programme receiving a Community grant are not eligible.

## 4 CATEGORIES OF MANAGEMENT, IMPLEMENTATION, MONITORING AND CONTROL EXPENDITURE ELIGIBLE FOR FINANCING UNDER ‘TECHICAL AND ADMINSITRATIVE ASSISTANCE’

The following costs shall be eligible for financing under the technical assistance provided for in Article 18 of Council Decision 2004/904/EC:
(a) costs linked to preparation, selection, evaluation, and follow-up of the actions co-financed by the European Refugee Fund. This may include studies, seminars, information actions, evaluation, and the acquisition and leasing or purchase of computerised systems for management, monitoring and evaluation;
(b) costs linked to audits and on-the-spot controls and checks of the projects;
(c) costs linked to the visibility of European Refugee Fund co-financing;
(d) expenditure on meetings of committees relating to the implementation of the multiannual and annual programmes. This expenditure may also include the costs of experts and other participants in these committees, where the chairperson of such committees considers their presence essential to the effective implementation of the cofinancing of the Fund.
Expenditure linked to remuneration, including social security contributions, are eligible only in the following cases:
permanent officials, temporarily seconded by formal decision of the relevant public authority, entrusted with performing the tasks listed in points (a) and (b) above,
temporary agents or private sector staff employed solely for the purpose of performing the tasks listed in points (a), (b) and (d) above.
The period of secondment or employment may not exceed the final date for the eligibility of expenditure laid down in the cofinancing decision adopted by the Commission.
Expenditure on the salaries of civil servants or other public officials in carrying out such actions is not eligible if such actions arise from the statutory responsibilities of the public authority or the authority's day-to-day management, monitoring and control tasks.

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Source: https://www.legislation.gov.uk/eudn/2006/399 (the official version)
Page: https://openlegislation.uk/eu-decision-2006-399
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.