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Important changes to the EU’s Model Grant Agreement

The EU’s Model Grant Agreement  is a contract that sets out requirements and rules, and must be signed if a project proposal is approved for funding. On 20 July 2016, two major amendments to this agreement were introduced which Norwegian applicants for Horizon 2020 funding and grant recipients should know about.

Greater flexibility to transfer budget amounts between partners

There will now be greater flexibility to transfer budget amounts between partners (“beneficiaries”) and budget categories, provided that the project is carried out in accordance with Annex 1/Description of the Action. For example, it is no longer necessary to amend the grant agreement in order to report incurred unit costs under personnel costs, even though the personnel costs in Annex 2 are budgeted as actual costs. However, it is still not possible to transfer budget amounts to subcontractors. See Article 4.2.

Calculation of the hourly rate for direct personnel costs

Another change is that it will now be possible to calculate the hourly rate for direct personnel costs not only per full financial year but also per month. See Article 6.2.A. In this connection, it is important to note that:

  • An organisation must use only one means to calculate the hourly rate within a financial year, either per full financial year or per month.
  • It is possible to re-calculate personnel costs for ongoing Horizon 2020 projects by using the monthly calculation model and entering the differences (positive and negative) as changes in the next reporting period. This implies that the personnel costs for all Horizon 2020 projects must be re-calculated.
  • When using the hourly rate per month, it is not possible to deduct parental leave. Instead, personnel costs (that are not covered in another way, e.g. through social insurance schemes) may be entered under parental leave in the financial statement in relation to the amount of time the individual worked on the project in the actual financial year. (This rule does not apply to projects funded under the Marie Skłodowska-Curie Actions, as personnel costs for parental leave are still not covered.)
  • It follows from the above that Annex 5 to the MGA, Model for the certificate on the financial statements, Reference A.3 – Hourly personnel costs, has been amended because the auditor must now, among other things, also ensure that personnel costs for parental leave are not unlawfully included.
  • It is anticipated that most universities in Scandinavia will calculate the hourly rate per month, as this method fits better with the universities’ accounting systems.

A schematic overview of the amendments is available on pages 2–3 in the MGA, and a more detailed explanation and comparative overview may be downloaded here.

Changes retroactive

Please note that the changes in the MGA are retroactive for grant applicants and grant recipients alike. This means that it is not necessary to amend grant agreements that are already in force to implement the new opportunities.

Changes in the Annotated Model Grant Agreement

On 1 July 2016, the Annotated Model Grant Agreement (AGA)  was updated (see the overview of changes on pages 2–3). This annotated version of the MGA contains explanations and examples. These updates are comprised mainly of linguistic corrections.

The text of Article 18.1 on requirements regarding documentation, including minimum requirements for keeping time records, has been changed. It is no longer recommended to keep time records on a daily basis because it is no longer required to give a detailed description of work performed on the time sheets. References to work packages or tasks are sufficient. In light of this, the European Commission has revised its recommended (but not mandatory) template for time recording for a Horizon 2020 action. Provided that the minimum requirements for keeping time records are satisfied, the individual organisation may use its own internal system of time-keeping.

In the event of an audit, however, it must always be possible to document who has worked on a Horizon 2020 project, during which periods, the number of hours worked per month, and the salary of each participant.

An updated version of the AGA with comments to the amendments introduced on 20 July 2016 is expected to be published in autumn 2016.

Contact our legal experts

If you have questions, you are welcome to contact our national contact persons for legal and financial issues: Poul Petersen (pope@adm.ku.dk) and Louise Thers Nielsen (lotn@adm.ku.dk)


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