Friday, 26 May 2017

EC changes its mind. Again!

In January, we described how the EC changes its mind through the medium of its 700+ page Annotated Model Grant Agreement (AMGA). On that occasion, the question was whether the cost of PhD students working on H2020 projects and funded through scholarships, stipends and similar non-employment agreements are an eligible cost. AMGA v2.1 said no, because such agreements were training oriented. Then in v2.2, they announced that PhD agreements were work oriented, not training oriented, and so the related costs were eligible.

Similarly, AMGA v2.1 said depreciation costs of equipment which is shared between multiple projects must be calculated based on the total capacity of the equipment, rather than share of total actual use, which often is less than capacity. In contrast, subsequent versions of AMGA say that share of use is the right way to calculate the eligible cost.

Version 4.0 of AMGA, issued in late April, reveals more changes, this time related to the cost of an SME owner manager without salary. If the owner manager has no salary (instead, for example, paying themselves through dividends), then their work on an H2020 project can be claimed by a “unit cost”, in this case a standard rate determined by the EC.

Earlier editions of AMGA stated that this unit cost could not be used in a specific case, called “in-kind contributions”. For example, if the SME owner manager spent some time at a university working on the university’s H2020 project, the cost of that time would not be an eligible cost. The reason given was that it was a unit cost, not an actual cost. But if the same person did receive a salary, then the contribution in kind would be eligible. AMGA v4.0 now says the unit cost is eligible.

Luckily for the EC, the front cover of AMGA includes a notice which says “Neither the Commission nor the its executive Agencies (or any person acting on their behalf) can be held responsible for the use made of this guidance document”.
Kind regards