Thursday, 26 July 2018

Speedier payments?


In FP7, many were surprised how long it took the EC to make payments against interim and final reports. Often, they were not paid within 90 days of submitting their reports as required by the grant agreement, while the EC maintained that the contractual condition was fulfilled and, indeed, their management target of paying within 60 days was achieved.

The difference of interpretation arises because the EC can ask questions about the reports, so suspending the time limit for payment. The table provides data for two of the EC organisations administering FP7 and H2020, showing the average “net” time to pay after the suspensions or delays are deducted from the gross time to pay which grant recipients experience.

Interestingly, the first substantial data on payments in H2020 shows a large reduction in delays. Is this because the EC is asking fewer questions? Or is it because most of the H2020 data is likely to be for interim payments, which usually suffer shorter delays than final payments?

DG/ Agency
Programme
Year
Payments (number)
Average time to pay (days)
Net
Delay
Gross
RTD
FP7
2015
2152
55.4
51.4
106.8
2016
1351
54.5
45.2
99.7
2017
945
58.4
47
105.4
H2020
2017
580
45.5
10.1
55.6
REA
FP7
2015
2851
61.4
34.0
95.4
2016
2819
65.1
42.4
107.5
2017
1561
69.1
54.5
123.6
H2020
2017
1082
56.1
19.7
75.8
RTD = Directorate General for Research and Innovation; REA = Research Executive Agency

Monday, 2 July 2018

H2020 audit results


A major EC motive for using lump sums is that they will normally produce zero cost errors. FP7 audit results up to the end of 2017 showed that errors detected in a representative sample were 5.03% which - after errors are corrected - gives a residual error of about 3%. This should be compared with the 2% target set by the EU. So the EC will again fail its annual audit by the Court of Auditors. 

Errors
FP7
H2020
So far
Pessimistic
Detected
5.03%
1.6%
2.82%
Residual
~3%
1.44%
2.24%
But the first results for H2020 auditing suggest that the error rate will be below the 2% (see table). The EC audited a statistically representative sample of 142 participations. For the 110 cases finalised, the detected error rate was 1.6%: the corresponding residual error was 1.44%.

However, not all audits in the representative sample are included in these figures, because some are not yet accepted by the organisations audited and so are not finalised. If the EC’s opinion in the draft reports on these outstanding audits is included they produce the result in the pessimistic column – still much lower than FP7.

Interestingly, 28% of the error found in FP7 related to overheads, which has reduced to zero in H2020 by replacing calculated overheads and a choice of two flat rates with the single 25% flat rate. By itself, this would reduce the 3% to 2.16%, close to the EC pessimistic forecast for H2020. So an initial conclusion is that other simplifications in H2020 had either little impact on reducing errors, or even increased them!

Kind regards