Managing third parties in ERC projects: What you must get right

Hello and welcome to this video which is part of Avorongin series design for the grantes. This video will guide you and support you through some of the financial administrative aspects of your project. This will allow you to focus on your research and to avoid common mistakes. My name is Alessandra Deardo, project advisor at the European Research Council Executive Agency. In this video, I will analyze the participation of third parties in project finance under Horizon Europe. Dar in this video I will cover three main topics. First, what it is ator party. are and can do and how can manage their participation in the project and finally I will you through the most common mistakes and the tips to avoid them by the end of this video the topic will be clear are you ready let's get started. expertise tools in this case you may need to involve another institution if that institution signs the grand agreement it will be a beneficiary together with your institution otherwise if it doesn't sign the grand agreement it will be what we call a party party carry out task provide resources. So let's see which are the categories of parties what they can and can do and how we can manage their participation in the year project. To identify the correct category of party, you need to ask yourself three questions. First, are they implementing an action task or providing resources? Are they legally or financially link to your institution? And finally, will the game cost during the action? There are two main categories of TOR parties. Turties implementing an action task and party providing resources such as tools or people. In the first category, Tur Party implementing an action task, we have affiliate identities, associated partners, contractors. Let's start with affiliate identities. Affiliate identities have a legal or financial link with your own institution and the link must be there already at the moment of the signature of the grand agreement. The affiliate identities must be named in the grand agreement. They carry out an action task described in the description of action including annex one of your grant agreement and they will charge an eligible cost included in the budget table of your grant agreement. Pay attention only actual cost should be included in the budget. Le practical example. You need to develop a specialized software tools. AOS institution is a longstanding collaboration with the research center. The center can be added as an affiliate identity in your grant agreement and the costs must be charged to the project. Let's speak now about associative partners. Associative partners cannot charge any cost to the project. They must be named in the grant agreement and they carry out an action task described in the description of action included in anx one of your grant agreement. Imagine your project involves collecting data in a specific country that is not in Europe or in any country associated to reso Europe. In order to do so, you request the support of a local university. You can add the university as associated partner but no cost can be charged to the project. The university should implement the action task as foren in the description of action in order to contribute to the project success. The last type of parties are subcontractors. Let's find out what they do. They carry out a specific task usually for a profit reason. There is a commercial interest. They are selected based on the best value for money, transparency and no conflict of interest. The activity to be subcontracted must be described in the description of action included in anx one of your grant agreement. The subcontracting cost must be included in the subcontracting category in the budget table. However, please pay attention to subcontracting cost as they do not generate the 25% flat rate in direct cost. Let's say you need to produce a video or to perform some genomic sequencing but you don't have the expertise or tools. You can hire an external company to do the job and declare the costs under subcracting. But keep in mind to always follow the procurement procedure of your institution. Before moving to the second category of parties, there is one point I'd like to clarify. In the context of the grant agreement, there is a difference between subcontractor and supplier. T contractor will perform an action task as part of your research plan while the supplier will provide a support task such as lab chemicals, translation or cattering services. Suppliers can be mentioned briefly in the resources section of a next one of your grant agreement and their cost included under purchase cost. But you still need to get the best value for money or low cost, avoid conflict of interest and keep records of all the documentation such as contracts, invoices, proof of payments. Let's analyze the second category of Tor parties. Turties providing resources without implementing an action task. In the grant agreement we can find the definition of in contribution free of charge. In this case, detor party provide resources to the beneficiary without asking for a reimbursement. However, in the year grant e certain conditions, the beneficiary can charge to the project the cost of those resources. Yes, even if there is no payment from the beneficiary to the party, the beneficiary will declare those cost as if they were their own cost under the correct budget category. For instance, personal cost for seconded personnel. Let's do a practical example. If you need to access a lab university and they allow you to do so for free, this is a free of charge contribution. No payment is made. However, the actual cost incurred by the university can still be claimed by your institution. Only if the cost is eligible and if the resources and university are mention in next one of your grant agreement. Pay attention. Only the actual cost of the university will be eligible and the auditor can have access to the accounts of the university at any time. Sometimes you are asked if the institution can declare some cost as in contribution against payment. Actually under Horizon Europe there is no provision of parties providing contribution against payment. The beneficiary will declare those cost in the relevant budget category, usually as purchase cost or exceptionally as personnel cost. So going back to our example on the access to the lab, if you pay for the access to the lab, you will declare such cost as purchase cost. It will be important to make sure that you have followed the procurement rules of your institution ensuring best value for money and no conflict of interest. Let's see another example. Over researcher seconded to your institution by another university. But this time your institution reburses the cost to the university. Can your institution declare this cost as direct personal cost? Yes, but under certain conditions. First, the person should work under condition similar to those of an employee at your institution. And second, the result of the work should belong to your institution. Pay attention. For the calculation of the personal cost, in this case you need to read carefully the annotate model grant agreement which provides the specific eligibility conditions. If these conditions are not met, then you can claim this cost as purchase cost or subcontracting cost. Now I will walk you through the final part of our video. The most common mistakes and tips to avoid them. Most common mistake number one not identifying third parties from the beginning. Many problems come from non listing third parties in the proposal or in the grand agreement. My tip, if you think your project can benefit from the participation of a third party, include it in the proposal e in the grand agreement. If something changes, inform the agency raro way. Moscomo mistake number two. Mixing up categories of parties. It's easy to confuse affiliate identities, subcontractors, and associated partners. My tip remember the three questions. First are the implementing an action task or providing resources? Second, are the legally or financially link to the institution? And finally, will declaim cost in the action. If you unsure, don't guess the annotate model grant agreement or contact your project officer. Most common mistake number three, lacking of documentation, missing contracts, proof of payments, invosis can create serious problem. In particular daring it my tip keep your documentation tidy most mistake number four subcontracting or purchasing goods and services in the wrong way. Some projects do not respect the procurement procedure or the subcontract task to an institution which is already a beneficiary in your project which is not allowed since it goes against the principle of no conflict of interest. My tip before selecting subcontractors or suppliers of good and services contact your institution. Let's have a final summary before the end of this video. What is very important in relation to parties? It is important to know what it is at party, to label them right, to stay organized and to keep all your documents and to be ready for audit. This is the end of this video. By now you have a clear idea what it is at their party, what they can and can do, and how you can manage their participation in the year project. Thanks for watching. Don't forget to like, share or forward this video. Nicol Managing Year CR