Frequently asked questions (FAQ)

Eligibility of costs

Is translating certain documents of the Call (such as the Application Form, the Declaration of the Lead Beneficiary etc.) an eligible cost under preparation costs?
According to Chapter 3.3.2.1 of the Guidelines, the costs of translation and interpretation can be reimbursed as preparation costs if they meet the eligibility criteria (see also Chapter 3.3.1 of the Guidelines). Please be aware of the fact, however, that project proposals have to be submitted in English. Project Proposals not fulfilling this criterion will be rejected automatically.
How is the 10 per cent threshold per project part for management costs to be interpreted?
When planning management costs, you should be aware of the fact that, according to Chapter 3.3.2.2 and 3.3.2.4 of the Guidelines, the total project management costs (2.1 Salary of staff (direct project management) + 4.6 Services related to project management) must not exceed 10 per cent of the total eligible project costs of the individual Project Partner. Internal (2.1) and external (4.6) project management elements together have to be in conformity with this threshold.

As to the definition of project management, please note that this term covers activities of the project staff that are directly connected to the administrative and everyday implementation of the project. Internal staff members who work on the content of the project and whose activities contribute to the achievement of the professional results of the project are to be regarded as team members and their costs have to be budgeted under budget line 2.2, Salary of staff (team members).

Please note that the 10 per cent threshold is not valid in connection to budget line 2.2, it only affects lines 2.1 and 4.6.
Can a non-profit organisation outsource services to its founding organisation?
Based on the interpretation of conflict of interest of the \'Practical Guide to Contract procedures for EC external actions\' it is not possible to entrust such organisations with the delivering of services which are in an ownership relationship with the Lead Beneficiary / Project Partner organisation. Chapter 2.3.6 (Other essential points) and Chapter 2.4.14 (Ethics clauses) of the PraG contain the relevant rules.
Can an employee of a given Project Partner organisation (or the employee of another Project Partner) provide external expertise for the Project Partner organisation and can the costs be reimbursed?
The above-described structure of providing services is not possible in projects funded from the Programme. If a person is an employee of the organisation receiving subsidy from the project, he or she has to be listed under budget category 2.2 (Salary of staff - Team members) in order to have the costs reimbursed. To provide services to any of the Project Partners of the same project by a person who is an employee of an organisation receiving subsidy from the project is against the Programme\'s logic and the PraG rules, therefore it is forbidden:

•PraG: 2.3.6. Other essential points:
\'Conflict of interest: Any firm or expert participating in the preparation of a project must be excluded from participating in tenders based on this preparatory work, unless they can prove to the Contracting Authority that the involvement in previous stages of the project does not constitute unfair competition.\'

\'Conflict of interest is when the impartial and objective exercise of the functions is compromised for reasons involving family, emotional life, political or national affinity, economic interest or any other shared interest with the beneficiary.\'

Based on the above, employees of Project Partner organisations receiving funding from the Programme can reimburse exclusively salary costs. On the other hand, external service providers can exclusively be sub-contracted persons/organisations, in case of which salary costs cannot be reimbursed, only the fees included in the given contract. The keeping of the present rule will be observed by the Control Bodies during project implementation.
Is it possible to pay per diem rates for people who are not employed by any of the Project Partners but who will take part in a project event as a member of a participant association for example?
Since these people are not employed by any of the Project Partners who would plan the costs of the per diems in their budget, it is not feasible to pay per diems to them.
Can I include costs of setting up and promoting an internal project meeting on budget line 4.5 which stands for organising these meetings?
Budget line 4.5 fits for internal project meetings if at least two project partner organisations are represented in person on the meeting. It depends on the activity which to be included in budget line 4.5: e.g. if a service provider organises the event, provides catering etc. then it will be included on budget line 4.5 (one invoice will cover this); if project staff would organise the event then the incurring costs (salary) should be planned on budget line 2, Staff cost. Promotion in general should be planned on budget line 4.10.

Please note that every cost included on the 4, Services budget line has to be covered with contract/order and paid by an invoice. Therefore in practice it is better to contract with one provider to have just one procurement and invoice instead of several procurements, if it is possible.
Is the rent of a plot of land and of existing buildings an eligible expenditure?
In line with Chapter 3.3.3 of the Guidelines, the rent or leasing of land and existing buildings are not eligible under the Programme.
If the participating non-profit organisation is the property of a business organisation, is it possible to sub-contract with this given business organisation as external expert?
According to the PraG, Chapters 2.3.6 (Other essential points) and 2.4.14 (Ethics clauses), it is not possible to sub-contract experts who are concerned as owners of the non-profit organisation. This situation represents a conflict of interests.
Related to project management, is there a maximum percentage of total external expertise services which can be involved in a given project?
In line with Chapter 3.3.2.2 and 3.3.2.4 of the Guidelines, the total project management costs (2.1, Salary of staff (direct project management) PLUS 4.6, Services related to project management) must not exceed 10 per cent of the total eligible project costs of the individual Project Partner. Internal and external project management elements together have to be in conformity with that threshold.
What should be taken into consideration when planning the per diems for the Lead Beneficiaries and Project Partners from Croatia?
The rules for per diems in Croatia within this Programme have been clearly defined in Chapter 3.3.2.3 (Travel and accommodation) of the Guidelines:

"Per diems of the project staff – The per diems shall be defined by the employer. They must not exceed the rate set by the European Commission (hereinafter referred to as the EC) on the following web page:

http://ec.europa.eu/europeaid/work/procedures/implementation/per_diems/.

Per diems can be paid to project staff that travel abroad for the purpose of the project. Per diems generally cover meal, accommodation and local travel expenses. In case of receiving per diems other subsistence costs are not eligible.

Practical information: In case the per diem covers meal, accommodation and local travel, please fill in the per diem in the budget and leave accommodation costs empty. If the per diem does not cover accommodation, please fill in the per diem AND the accommodation costs budget line, respectively.

Important note concerning Croatia: According to the relevant national legislation in Croatia (Kolektivni ugovor za državne službenike i namještenike, NN 93/2008, for inland travel, and Odluka o visini dnevnice za službeno putovanje u inozemstvo za korisnike koji se financiraju iz sredstava državnog proracuna, NN 8/2006, for travelling abroad) it is possible to finance per diems in inland and abroad. In case you plan the travel connected to the project implementation, it is eligible but only applicable in accordance with the maximum per diem rate defined by the EC, as explained above. Based on this, in case the Croatian Project Partner / Lead Beneficiary plans to travel inland or abroad and the per diem does not cover accommodation, please fill in the per diem and the accommodation costs budget line respectively and separately, taking into the consideration that both: the per diem counted according to the Croatian legislation and the accommodation together cannot exceed the EC per diem rate. Please also note that in Croatia the Control Body for Croatia is in charge of technical issues related to the per diem costs, they will act as information sources for Project Partners / Lead Beneficiaries in relation to these issues."
Is it true that the so-called adjacent counties can only get Community funding in the extent of max 20% of the total project budget?
It is correct that the counties which are adjacent regions can only be funded by 20% of the total amount of Community funding, which on project level means that ALL Project Partners from adjacent regions can get max. 20% of the Community funding within each project. Adjacent regions are located exclusively on the Croatian side of the Programme area, and their participation in the Programme is specific. When planning the budget, the budgetary tables of the AF will assist you as there are thresholds programmed for the Adjacent Project Partners, which means it is not possible to exceed the 20% mark as you will be warned by the application about it.
Where can I find information about the EU per diem rates concerning different countries?
The list of per diem rates can be found at the following link: http://ec.europa.eu/europeaid/work/procedures/implementation/per_diems/
In case of a given project proposal is it possible to apply for funds to several programmes at the same time?
Yes it is possible. However, if the project wins in one programme then it cannot be subsidized by another fund at the same time since double financing should be avoided at all times.
Which budget line is to be used for IT services, software development precisely?
The answer depends on some circumstances.

If the software will be developed by internal staff (meaning employees of the Project Partner organisation) then the activity has to be budgeted on budget line 2.2, Salary of staff (team members).

If the expenditure appears through the involvement of external expertise then the software development can be budgeted on more than just one budget line (of, course, in the end, on only one of them), depending on the actual activity it is closely connected to. For example, if the software has to be developed to support or operate an electronic database then the related costs can be eventually incorporated into budget line 4.2, Studies, statistics, databases and researches.

If the software is being purchased it can be budgeted on budget line 5.1, Purchase of new equipment.
Is it possible that a business incubator from Greece participates in a project financed from the Hungary-Croatia IPA Cross-border Co-operation Programme as Associated Partner, as a best practice example? Related to this, is it eligible to plan a study trip to Greece, e.g. if the topic of the project is joint research related to the opening of a business incubator?
It is possible for a business incubator from Greece to participate in the project financed from the Hungary- Croatia IPA Cross-border Co-operation Programme as an Associated Partner, however, it has to be considered that Associated Partners are not entitled to receive any funding from the project, and they cannot be external expertise providers.

A study trip to Greece is generally not eligible since the costs will not incur in the eligible Programme area (see Guidelines Chapter 3.3.1.2, Geographical eligibility of expenditure): “As a general rule, eligible costs shall be incurred in the eligible programme area.” However, there can be exceptional cases - see also in Chapter 3.3.1.2 of the Guidelines.
Is there a compulsory exchange rate between HUF and EUR or between HRK and EUR which has to be used in the present Call for Proposals?
The Third Call for Proposals of the Hungary-Croatia IPA Cross-border Co-operation Programme does not prescribe a compulsory exchange rate into Euros, the Lead Beneficiaries and Project Partners can determine the exchange rate to be used by them when planning the project.

Please note that in line with Article 4, Point 12 of the draft Subsidy Contract for the Community funding, "the exchange rate risk is borne by the Lead Beneficiary or Project Partner concerned".
Is the VAT contained in invoices related to preparation costs eligible in Croatia?
In the Republic of Croatia value added tax (VAT) is not an eligible cost. All Croatian Project Partners have to plan their budget items with net costs and they have to get invoices which do not contain VAT. To be able to do so, the Project Partners will receive a certificate about the VAT exemption, a document to be issued by the Croatian Ministry of Regional Development, Forestry and Water Management after the Managing Authority has signed the declaration of commitment for the given project. In practical terms this means that VAT contained in invoices issued before the attainment of the VAT exemption certificate has to be covered by the respective Project Partner.
Are the costs of writing the project proposal eligible?
Amounts paid to service providers (e.g. expert firms) for writing the application are not eligible costs under the present Call for Proposals.
Are costs of collaterals / bank guarantees eligible under the present Call? Does the Programme demand the provision of collaterals / bank guarantees to projects?
Costs of collaterals / bank guarantees are not eligible under the present Call, in line with Article 34 of the IPA Implementing Regulation. At the same time Project Partners are not obliged to provide collaterals / bank guarantees concerning their project part. The main reasons are the ex-post nature of the fininacing of projects and the responsibility of the Participating Countries behind all Communty funding Subsidy Contracts. Concerning the Subsidy Contracts concluded for the State contribution part in Hungary, Article 19 of Government Decree No 160/2009 of 3 August 2009 defines the legal actors which are obliged to provide a collateral. (Only one kind has to be chosen, from which bank guarantees are an option.) According to the regulation, under certain conditions e.g. local governments, budgetary organisations of the state, churches are not obliged to provide a collateral. (See more detailed in Gov. Decree No 160/2009.)
Is there a geographical definition of implementing the activities depending on the distance from the Drava and Mura rivers? In which actions?
Yes, but only in actions connected to the Area of intervention: 1.2. Sustainable Tourism in Mura-Drava-Danube River Area. For more details potential applicants should check Handbook to tourism projects, Chapters 4 and 5 (definition and role of zones A, B, C).