FP7: A Financial Guide

FP7, or Framework Programme 7, was the European Union’s main instrument for funding research in Europe from 2007 to 2013. Understanding its financial aspects is crucial for anyone who participated or is considering participating in future EU research funding programs like Horizon Europe.

Understanding Eligible Costs

A core aspect of FP7 finance revolved around the concept of ‘eligible costs’. These are the costs that could be claimed and reimbursed by the EU. Typically, eligible costs had to be:

• Real: Actually incurred and verifiable.
• Necessary: Required to carry out the project’s activities.
• Reasonable: In line with market prices and good management practices.
• Identifiable and verifiable: Supported by adequate documentation like invoices and timesheets.
• Compliant with EU regulations: Adhering to the specific rules outlined in the FP7 grant agreement.

Categories of Costs

FP7 categorized costs into direct and indirect costs:

• Direct Costs: Directly attributable to the project. Examples include personnel costs, travel expenses, equipment directly used for the project, and consumables. Detailed timesheets were often required to justify personnel costs, demonstrating the time spent working directly on the FP7 project.
• Indirect Costs (Overheads): Costs that could not be directly linked to the project but were necessary for its operation, such as administrative support, rent, and utilities. FP7 typically allowed for a flat-rate percentage (commonly 20% or 60%) of direct costs to cover these indirect costs. Some beneficiaries could opt for “real” indirect costs, requiring detailed documentation and justification.

Financial Reporting and Audits

FP7 projects involved regular financial reporting. Beneficiaries were required to submit financial statements to the EU, detailing the costs incurred and how they aligned with the project’s budget. These reports were subject to scrutiny by the European Commission.

Audits were also a common occurrence. The Commission or its appointed auditors could conduct audits to verify the accuracy of the financial reports and compliance with FP7 regulations. Proper record-keeping and adherence to the grant agreement were essential to successfully navigate these audits.

Key Financial Documents

Understanding the key financial documents was vital. This included:

• Grant Agreement: This document outlined the rights and obligations of the beneficiaries and the EU, including the financial terms.
• Financial Guidelines: The Commission provided detailed guidelines on eligible costs, reporting requirements, and audit procedures.
• Audit Reports: Internal and external audit reports provided valuable insights into best practices and potential areas of concern.

Lessons Learned for Future Programs

FP7 provided valuable lessons for subsequent EU funding programs, particularly Horizon 2020 and Horizon Europe. Emphasis on simplification of rules, greater clarity in cost eligibility, and streamlined reporting procedures are all legacies of experiences under FP7.

While FP7 is now concluded, understanding its financial principles remains relevant for anyone involved in EU research funding. The principles of eligible costs, detailed documentation, and rigorous reporting continue to be central to successfully managing EU-funded projects.