11.1       General Principles

1. Non-cumulative award

An action may only receive one grant from the EU budget.

In no circumstances shall the same costs be financed twice by the European Union budget. To ensure this, applicants shall indicate in the application form the sources and amounts of European Union funding received or applied for the same action or part of the action or for its functioning during the same financial year as well as any other funding received or applied for the same action.

Subsidised actions may not benefit from Eurimages funding for the same activity.

2. Non-retroactivity

No grant may be awarded retrospectively for actions already completed.

A grant may be awarded for an action which has already begun only where the applicant can demonstrate the need to start the action before the grant agreement is signed or the grant decision is notified.

In such cases, costs eligible for financing may not have been incurred prior to the date of submission of the grant application.

3. Co-financing

Co-financing means that the resources which are necessary to carry out the action may not be entirely provided by the EU grant.

Co-financing of the action may take the form of:

• the beneficiary's own resources,
• income generated by the action,
• financial contributions from third parties.

4. Balanced budget

The estimated budget of the action is to be attached to the application form. It must have revenue and expenditure in balance.

The budget must be drawn up in euros.

Applicants which foresee that costs will not be incurred in euros shall use the exchange rate published on the Infor-euro website available at:

http://ec.europa.eu/budget/contracts_grants/info_contracts/inforeuro/inforeuro_en.cfm on the date of the publication of this call for proposals.

e)   Implementation contracts/subcontracting

Where the implementation of the action or the work programme requires the award of procurement contracts (implementation contracts), the beneficiary must award the contract to the bid offering best value for money or the lowest price (as appropriate), avoiding conflicts of interests and retain the documentation for the event of an audit.

Entities acting in their capacity of contracting authorities in the meaning of Directive 2014/24/EU[1] or contracting entities in the meaning of Directive 2014/25/EU[2] shall abide by the applicable national public procurement rules.

Sub-contracting, i.e. the externalisation of specific tasks or activities which form part of the action/work programme as described in the proposal and which cannot be performed by the beneficiary itself must satisfy the conditions applicable to any implementation contract (as specified above) and in addition to them the following conditions:

1. subcontracting does not cover core tasks of the action;
2. recourse to subcontracting is justified because of the nature of the action and what is necessary for its implementation;
3. the estimated costs of the subcontracting are clearly identifiable in the estimated budget;
4. any recourse to subcontracting, if not provided for in description of the action, is communicated by the beneficiary and approved by the Agency. The Agency may grant approval:

1. before any recourse to subcontracting, if the beneficiaries requests an amendment
2. after recourse to subcontracting if the subcontracting:

• is specifically justified in the interim or final technical report and
• does not entail changes to the grant agreement which would call into question the decision awarding the grant or be contrary to the equal treatment of applicants;

5. the beneficiaries ensure that certain conditions applicable to beneficiaries, enumerated in the grant agreement (e.g. visibility, confidentiality, etc.), are also applicable to the subcontractors.

6. Financial support to third parties

See Part B.

11.2       Funding forms

A. OPTION 1: Reimbursement of eligible costs in combination with flat rate covering overheads

The grants financed through reimbursement of eligible costs in combination with flat rate covering overheads are calculated on the basis of a detailed estimated budget, indicating clearly the costs that are eligible for EU funding.

• Maximum amount requested

The EU grant is limited to a co-financing rate of 50%, 60%, 75% or 80% of the eligible costs, depending on the type of project (see Part B).

Consequently, part of the total eligible expenses entered in the estimated budget must be financed from sources other than the Union grant.

The grant amount may neither exceed the eligible costs nor the amount requested. Amounts are indicated in euros.

Acceptance of an application by the Executive Agency does not constitute an undertaking to award a grant equal to the amount requested by the beneficiary.

• Eligible costs

General rules:

Eligible costs are costs actually incurred by the beneficiary of a grant which meet the following criteria:

• they are incurred during the duration of the action as specified in the grant agreement/decision, with the exception of costs relating to final reports and certificates.
• they are indicated in the estimated overall budget of the action;
• they are incurred in connexion with the action which is the subject of the grant and are necessary for the implementation of the action;
• they are identifiable and verifiable, in particular being recorded in the accounting records of the beneficiary and determined according to the applicable accounting standards of the country where the beneficiary is established and according to the usual cost-accounting practices of the beneficiary;
• they comply with the requirements of applicable tax and social legislation;
• they are reasonable, justified, and comply with the requirements of sound financial management, in particular regarding economy and efficiency.

The beneficiary's internal accounting and auditing procedures must permit direct reconciliation of the costs and revenues declared in respect of the action with the corresponding accounting statements and supporting documents.

Eligible direct costs (please refer to Part B for additional requirements):

This section does not apply to the schemes "Support for the Distribution of non-national films – The Distribution Automatic Scheme", "Support for the Distribution of non-national films – The Distribution Selective scheme" and "Support to the International Sales Agents of European Cinematographic films". For these actions please refer to Part B.

The eligible direct costs for the action are those costs which, with due regard for the conditions of eligibility set out above, are identifiable as specific costs directly linked to the performance of the action and which can therefore be booked to it directly, such as:

• the cost of personnel working under an employment contract with the applicant or equivalent appointing act and assigned to the action, comprising actual salaries plus social security contributions and other statutory costs included in their remuneration, provided that these costs are in line with the applicant's usual policy on remuneration or, where applicable, its partners. NB: these costs must be actual costs incurred by the beneficiary or the co-beneficiary. Staff costs of other organisations are eligible only if they are paid directly or reimbursed by the beneficiary. These costs may include additional remuneration, including payments on the basis of supplementary contracts regardless of their nature, provided that it is paid in a consistent manner whenever the same kind of work or expertise is required and independently from the source of funding used;
• subsistence allowances (for meetings, including kick-off meetings where applicable, European conferences, etc.) provided that these costs are in line with the beneficiary's usual practices and that they do not exceed the scales approved annually by the Commission (https://ec.europa.eu/europeaid/sites/devco/files/perdiems-2017-03-17_en.pdf);
• costs of travel (for meetings, including kick-off meetings where applicable, European conferences, etc.), provided that they are in line with the beneficiary's usual practices on travel, and that they do not exceed the scales approved annually by the Commission;
• depreciation cost of equipment (new or second-hand), only the portion of the equipment's depreciation corresponding to the duration of the action  and the rate of actual use for the purposes of the action may be taken into account by the Agency, except where the nature and/or the context of its use justifies different treatment by the Agency;
• costs of consumables and supplies, provided that they are identifiable and assigned to the action;
• costs entailed by other contracts awarded by the beneficiary or its partners for the purposes of carrying out the action, provided that the conditions laid down in the grant agreement/decision are met;
• costs of financial support to third parties provided that the conditions laid down in the grant agreement or grant decision are met;
• costs arising directly from requirements linked to the performance of the action (dissemination of information, specific evaluation of the action, translations, reproduction, etc.),
• costs relating to a pre-financing guarantee lodged by the beneficiary of the grant, where required;
• costs relating to external audits where required in support of the requests for payments;
• non-deductible value added tax ("VAT") for all activities which are not activities of the public authorities in the Member States

Eligible indirect costs (overheads)

• a flat-rate amount, equal to 7% of the eligible direct costs of the action, is eligible under indirect costs, representing the beneficiary's general administrative costs which can be regarded as chargeable to the action.

Indirect costs may not include costs entered under another budget heading.

Applicants’ attention is drawn to the fact that in the case of organisations receiving an operating grant, indirect costs are not eligible under specific actions.

• Ineligible costs

The following costs shall not be considered eligible:

• return on capital;
• debt and debt service charges;
• provisions for losses or debts;
• interest owed;
• doubtful debts;
• exchange losses;
• costs of transfer from the Agency charged by the bank of the beneficiary;
• costs declared by the beneficiary and covered by another action receiving a European Union grant. In particular, indirect costs shall not be eligible under a grant for an action awarded to the beneficiary who already receives an operating grant financed from the Union budget during the period in question;
• contribution in kind
• excessive or reckless expenditure
• expenditure for partners from countries not participating in the programme or not being co-beneficiaries of the agreement.
• others (See Part B.)

• Calculation of the final grant amount – Supporting documents

The final amount of the grant to be awarded to the beneficiary is established after completion of the action, upon approval of the request for payment containing the following documents:

• a final report providing details of the implementation and results of the action;
• the final financial statement of costs actually incurred.

and

• For the actions "Support for the distribution of non-national films – The Cinema automatic scheme” and "Support to the International Sales Agents of European Cinematographic films”, in case of grants of less than EUR 60.000, please refer to Part B.

For the other actions:

• In case of grants for an action of less than EUR 750.000, the beneficiary is required to submit, in support of the final payment, a “Report of Factual Findings on the Final Financial Report - Type I” produced by an approved auditor or, in case of public bodies, by a competent and independent public officer. The procedure and the format to be followed by an approved auditor or in case of public bodies, by a competent and independent public officer, are detailed in the following “Guidance Notes”: http://eacea.ec.europa.eu/about-eacea/document-register_en#audit

The use of the report format set by the “Guidance Notes” is compulsory.

• In case of Grants for an action of EUR 750.000 or more, when the cumulative amounts of request for payment is at least EUR 325.000, the beneficiary is required to submit, in support of the final payment, a “Report of Factual Findings on the Final Financial Report - Type II” produced by an approved auditor or, in case of public bodies, by a competent and independent public officer. The certificate shall certify, in accordance with a methodology approved by the Agency, that the costs declared by the beneficiary in the financial statements on which the request for payment is based are real, accurately recorded and eligible in accordance with the grant agreement/decision.

The procedure and the format to be followed by an approved auditor or in case of public bodies, by a competent and independent public officer, are detailed in the following “Guidance Notes”: http://eacea.ec.europa.eu/about-eacea/document-register_en#audit

The use of the report format set by the “Guidance Notes” is compulsory.

• Calculation of the final grant amount

If the eligible costs actually incurred by the beneficiary are lower than anticipated, the Agency will apply the rate of co-financing stated in the grant agreement or grant decision to the expenditure actually incurred.

In the event of non-execution or clearly inadequate execution of an activity planned in the application attached to the funding agreement/decision, the final grant will be reduced accordingly.

Non-profit rule

EU grants may not have the purpose or effect of producing a profit within the framework of the action of the beneficiary. [3] Profit shall be defined as a surplus of receipts over the eligible costs incurred by the beneficiary, when the request is made for payment of the balance. In this respect, where a profit is made, the Agency shall be entitled to recover a percentage of the profit corresponding to the Union contribution to the eligible costs actually incurred by the beneficiary to carry out the action.

B. OPTION 2: Financing exclusively in form of lump sums

See the following calls for proposals:

- Support to the Development of Audiovisual Content - Single Project (call EACEA 22/2018)

Link to the specific part: Single

- Support to Festivals (call EACEA32/2018)

Link to the specific part: Festivals

11.3       Payment arrangements

If specified in the grant agreement/decision, a pre-financing payment corresponding to the percentage specified in Part B of the grant amount will be transferred to the beneficiary within 30 days either of the date when the last of the two parties signs the agreement, or of the notification of the grant decision, provided all requested guarantees have been received.

If specified in the grant agreement/decision, a second pre-financing payment corresponding to the percentage specified in Part B of the grant amount will be made within 60 days of receipt by the Agency of the progress report on the action’s implementation. This second pre-financing payment shall not be made until at least 70% of the previous pre-financing payment has been used up. Where the consumption of the previous pre-financing is less than 70%, the amount of the new pre-financing payment shall be reduced by the unused amounts of the previous pre-financing.

If specified in the grant agreement/decision, one or two interim payment(s) shall be paid to the beneficiary. Interim payments are intended to cover the beneficiary's expenditure on the basis of a request for payment when the action has been partly carried out. The interim payments shall not exceed 80% of the maximum grant amount.

The Agency will establish the amount of the final payment to be made to the beneficiary on the basis of the calculation of the final grant amount (see section 11.2 above). If the total of earlier payments is higher than the final grant amount, the beneficiary will be required to reimburse the amount paid in excess by the Agency through a recovery order.

11.4       Pre-financing guarantee

In the event that the applicant's financial capacity is not satisfactory, a pre-financing guarantee for up to the same amount as the pre-financing may be requested in order to limit the financial risks linked to the pre-financing payment.

The financial guarantee, in euro, shall be provided by an approved bank or financial institution established in one of the Member States of the European Union. When the beneficiary is established in a third country, the authorising officer responsible may agree that a bank or financial institution established in that third country may provide the guarantee if he/she considers that the bank or financial institution offers equivalent security and characteristics as those offered by a bank or financial institution established in a Member State. Amounts blocked in bank accounts shall not be accepted as financial guarantees.

The guarantee may be replaced by a joint and several guarantees by a third party or by a joint guarantee of the beneficiaries of an action who are parties to the same grant agreement/decision.

The guarantee shall be released as the pre-financing is gradually cleared against interim payments or payments of balances to the beneficiary, in accordance with the conditions laid down in the grant agreement/decision.