When reporting personnel costs in Horizon 2020 projects, attention must be paid in order to avoid errors. Most of the errors made are because of a misunderstanding of the rules, unawareness of the specificity of the rules, or intentional. Because of such errors found during an audit, a beneficiary might be forced to recover the grant or at least not being able to use optimally the funding available. For the European Commission, such errors maintain the scrutiny of the budgetary authority and the European Court of Auditors. It also increases the error rate, the ex-post audit efforts and new corrective measures need to be implemented.
The error rate is calculated by the European Commission and is a general control objective. It should be as close as possible to 2% without necessarily expecting it to get under 2%. It is an assurance element assessing the legality and regularity of Horizon 2020 project payments.
The main errors detected in personnel costs are due to:
- Incorrect productive hours calculation
- Incorrect remuneration costs (e.g. estimated)
- Incorrect time working on the action
- Other: unreliable or missing timesheets
Personnel costs should be:
- Consistent with HR records
- Timesheets properly signed and dated
- Not in excess of your full-time employment
- Sufficient in terms of information
Eligible personnel costs:
- Social security contributions (employers’ and employee’s)
- Taxes and other costs included in the remuneration if they arise from national law or the employment contract
Uneligible personnel costs:
- Any ineligible item (Art. 6.5)
- Any cost included in other budget categories (indirect costs)
How to avoid errors in justifying personnel costs in Horizon 2020?
- Your time charged to the project is correct
- Time records meet he GA’s conditions
- Remuneration in the numerator is correct
- Productive hours in the denominator are correct
- Personnel costs formula reconciles
- Transaction listing reconciles
- Employment contracts are in place
- Exchange rate: please ensure you use the exchange rate stipulate by the Horizon 2020 GA
More information and source here.