Commission Decision of 5 March 2008 laying down rules for the implementation of Council Decision 2007/435/EC establishing the European Fund for the Integration of third-country nationals for the period 2007 to 2013 as part of the General programme ‘Solidarity and Management of Migration Flows’ as regards Member States' management and control systems, the rules for administrative and financial management and the eligibility of expenditure on projects co-financed by the Fund (notified under document number C(2008) 795) (Only the Bulgarian, Czech, Dutch, English, Estonian, Finnish, French, German, Greek, Hungarian, Italian, Latvian, Lithuanian, Maltese, Polish, Portuguese, Romanian, Slovak, Slovenian, Spanish and Swedish texts are authentic) (2008/457/EC) (c. 457)

ANNEX XI RULES ON THE ELIGIBILITY OF EXPENDITURE — INTEGRATION FUND

I. General principles

I.1. Basic principles

1. In accordance with the basic act, for it to be eligible, expenditure must be:

(a)

within the scope of the Fund and within its objectives, as described in Articles 1, 2 and 3 of the basic act;

(b)

within the eligible actions listed in Article 4 of the basic act;

(c)

needed to carry out the activities covered by the project, forming part of the multiannual and annual programmes, as approved by the Commission;

(d)

reasonable and comply with the principles of sound financial management, in particular, value for money and cost-effectiveness;

(e)

incurred by the final beneficiary and/or the partners in the project, who shall be established and registered in a Member State, except in the case of international governmental organisations that pursue the same objectives laid down in the basic act. With regard to Article 39(2) of this Decision, the rules applicable to the final beneficiary shall apply mutatis mutandis to the partners in the project;

(f)

linked to the target groups referred to in the framework of the basic act;

(g)

incurred in accordance with the specific provisions in the grant agreement.

2. In the case of multiannual actions within the meaning of Article 13(6) of the basic act, only the part of the action co-financed by an annual programme is considered to be a project for the application of these eligibility rules.

3. Projects supported by the Fund shall not be financed by other sources covered by the Community budget. Projects supported by the Fund shall be co-financed by public or private sources.

I.2. Budget of a project

The budget of a project shall be presented as follows:

a Including assigned income as described in point IV.
Expenditure	Income
+ dDirect costs (DC) + indirect costs (fixed percentage of DC, defined in the grant agreement) + costs covered by assigned income (if applicable)	+ contribution from the EC (defined as the lowest of the three amounts indicated in Article 12 of this Decision) + contribution from the final beneficiary and the partners in the projecta + contribution from third parties + receipts generated by the project
= total eligible cost (TEC)	= total income

The budget shall be balanced: Total Eligible Cost shall be equal to Total Income.

I.3. Income and non-profit principle

1. Projects supported by the Fund must be of a non-profit-making nature. If, at the end of the project, the sources of income, including receipts, exceed expenditure, the contribution to the project from the Fund shall be reduced accordingly. All sources of income for the project must be recorded in the final beneficiary's accounts or tax documents, and must be identifiable and controllable.

2. Project income shall come from all financial contributions granted to the project by the Fund, from public or private sources, including the final beneficiary's own contribution, and from any receipts generated by the project. ‘Receipts’ for the purpose of this rule covers revenue received by a project during the eligibility period as described in point I.4, from sales, rentals, services, enrolment/fees or other equivalent income.

3. The Community contribution resulting from the application of the principle of non-profit, as referred to under Article 12(c) of this Decision, will be the ‘total eligible cost’ minus the ‘contribution from third parties’ and ‘receipts generated by the project’.

I.4. Eligibility period

1. Costs relating to a project must be incurred and the respective payments (except for depreciation) made after 1 January of the year referred to in the financing decision approving the annual programmes of the Member States. The eligibility period is until 31 December of the year N + 1(1), meaning that the costs relating to a project must be incurred before this date.

2. An exception to the abovementioned eligibility period is made for:

(a)

projects supported under the 2007 annual programme, in accordance with Article 33(3) of the basic act;

(b)

technical assistance for Member States (refer to point V.3).

I.5. Record of expenditure

1. Expenditure shall correspond to payments made by the final beneficiary. These must be in the form of financial (cash) transactions, with the exception of depreciation.

2. As a rule, expenditure shall be justified by official invoices. Where this cannot be done, expenditure shall be supported by accounting documents or supporting documents of equivalent evidential value.

3. Expenditure must be identifiable and verifiable. In particular,

(a)

it must be recorded in the accounting records of the final beneficiary;

(b)

it must be determined in accordance with the applicable accounting standards of the country where the final beneficiary is established and with the usual cost accounting practices of the final beneficiary; and

(c)

it must be declared in accordance with the requirements of applicable tax and social legislation.

4. Where applicable, the final beneficiaries are obliged to keep certified copies of the accounting documents justifying income and expenditure incurred by the partners in relation to the project concerned.

5. The storage and processing of such records must comply with the national data protection legislation.

I.6. Territorial scope

1. Expenditure for actions described in Article 4 of the basic act must be:

(a)

incurred by the final beneficiaries defined in point I.1(e); and

(b)

incurred in the territory of the Member States, with the exception of actions concerning pre-travel measures referred to in Article 4.1 (c) of the basic act, which may be incurred in the territory of the Member States or in the country of origin.

2. Partners in the project registered and established in third countries may participate in projects on a no-cost basis, except in the case of international governmental organisations. Therefore, costs incurred by these partners are ineligible.

(1)

Where ‘N’ is the year referred to in the financing decision approving the annual programmes of Member States.