Budget and related financial information

Financial planning is an important part of EU proposals. What you write in your proposal sets the boundaries for what you can do if your proposed project is funded. Your project must also comply with rules and laws set by the European Commission, by Sweden, and by Karolinska Institutet (KI), making financial planning complex.

We recommend that you plan your budget in conjunction with your department's financial administrators and with Grants Office. Grants Office can provide you with budget templates and with the latest rules and recommendations from the EU. 

The information below is based on Horizon 2020's "Rules for Participation" and "Model Grant Agreement". 

Funding thresholds and funding limits

In Horizon 2020, a budget is usually suggested in the call text, but that does not preclude submission and selection of proposals requesting other amounts.

The suggested budgets for Research and innovation actions (RIA) most frequently range between 2 and 6 million Euro, but a few larger scale projects --10-20 million Euro -- are also envisaged for certain calls. The project types Innovation actions (IA) and Coordination and Support actions (CSA) typically have budget suggestions ranging from 1 to 3 million Euro. Typically, an RIA has a duration of 3-5 years, an IA 2-3 years, and a CSA 1-2 years.

Eligible and ineligible costs

In standard research and development projects you can usually receive funding for up to 100% of your eligible costs. In practice, however, all EU projects will have costs that are ineligible or in other ways fail to meet the criteria for eligible costs. Therefore, all EU-funded projects need to be co-financed to some extent. 

As a general rule, all costs necessary for the implementation of the project are considered eligible costs (excluding the ineligible costs listed below), e.g., costs for personnel, travel, consumables, equipment, etc.

To be eligible, costs must be:

  • Incurred by the beneficiary, during the duration of the project
  • Determined in accordance with the normal accounting principles of the beneficiary
  • Used for the sole purpose of achieving the objectives of the project
  • Recorded in the accounts of the beneficiary
  • Indicated in the overall budget in Annex I (the application)

Costs such as indirect taxes (including VAT), duties, interest, exchange losses, and dept charges are considered ineligible. For a complete list of ineligible costs, see Article 6 of the Terms and Conditions of the Grant Agreement. An exception to this rule is non-deductible VAT (e.g. VAT on travel bills), which is considered an eligible cost.

Direct and indirect costs

Direct costs are those eligible costs that relate directly to the project. They must also be identified by the beneficiary as directly related to the project, in accordance with its normal accounting principles and internal rules. With regard to personnel costs, only the costs of the actual hours worked by the persons directly carrying out work under the project count as direct costs.

Indirect costs are those eligible costs that cannot be identified by the beneficiary as being directly related to the project. They must be identified and justified by the beneficiary's accounting system as being incurred in direct relationship to the eligible direct costs related to the project. They may not include any eligible direct costs.

In Horizon 2020, only one flat rate (25%) for compensation of indirect costs is applied to collaborative projects. In other actions (e.g., Marie Skłodowska-Curie and ERC), the reimbursement of indirect costs may be lower. Please note that this does not vary on a project or partner basis: the same rate will apply for all partners in the same project.

EU projects at Karolinska Institutet

Below you will find important information regarding EU-funded projects at KI. Please read this information when planning your budget.

Purchase and public procurement

The European Commission has made it very clear that they will perform audits to ensure that the purchase and public-procurement rules are followed within the projects. To be eligible, your purchase must be made according to KI's internal purchase an public-procurement rules. You must also show that the principle of "best-value-for-money" has been followed, regardless of the amount involved. During the Ernest and Young audit, documentation confirming compliance with the "best-value-for-money" principle will be reviewed. 

Internal invoices at Karolinska Institutet

The Horizon 2020 rule book has its limitations when it comes to internal purchases made within an organisation. For internal purchases to be eligible, the internal facilities from which the services are purchased must have auditable documentation, including log books for their equipment. Currently, most KI and KI-SciLifeLab facilities lack this type of documentation, which means that the costs for animal houses and core facilities are deemed ineligible. SciLifeLab facilities at Uppsala University, Stockholm University and the Royal Institute of Technology are considered external facilities; therefore, costs incurred at these facilities are eligible costs that are classed as subcontracting costs. 

Scholarships and stipends

Stipends cannot be charged to Horizon 2020-funded projects because they are considered to be for educational purposes (training costs are ineligible in Horizon 2020). KI pays stipends and scholarships only for education (i.e., taxes and social fees are not applied to these).

Equipment

If you plan to buy equipment during your Horizon 2020-funded project, make sure you state as much in your proposal. KI´s internal purchase and public-procurement rules must be followed, and depreciations must be calculated according to KI´s rule book. Log books are required as verification for the use of the equipment in the project: It is only the time that the equipment is used specifically for the project that can be charged to the project.

Personnel costs

The rules on how to calculate personnel costs in Horizon 2020 differ from those in FP7. Now the costs are calculated on the basis of the last closed financial
year. In practice, this will often result in a need for co-financing. This co-financing need is not obvious when calculating the personnel costs in the application stage -- please bear this in mind when you are planning the budget!

Stockholms läns landsting in EU-projects

Many clinical researchers are employed at both KI and Stockholms län landsting (SLL), which means that they can choose which organisation to apply with. As a rule of thumb, make sure you apply with the organisation where most of your costs will arise. KI and SLL are connected through the ALF agreement, which means that there is a legal link between the two organisations. This makes it possible for both organisations to add the other one as a third party. This must be indicated already in the application stage. If not, an amendment must be submitted to the European Commission after the project's start; however, these amendments are not always approved. Please always contact Grants Office if you plan to incur costs at both KI and SLL.

Budget templates

To help you plan your budget, KI's Grants Office provides you with templates and information (KI-login required).