The hierarchy of rules on eligibility of expenditure applicable to Interreg projects is as follows, and apply to all partners of the project, independently of partner country:

  1. EU rules on eligibility as set out in the CPR, ERDF Regulation and Interreg Regulation;
  2. Programme eligibility rules as set out in this document;
  3. National (including institutional) eligibility rules. Such rules only apply for matters not covered by eligibility rules set in the abovementioned EU and programme rules.

This hierarchy of rules only applies to eligibility rules of expenditure.

All applicable EU and national rules, apart from eligibility of expenditure, are on a higher hierarchical level than rules set by the Interreg Aurora Programme and must therefore be followed (e.g. procurement law). In such cases, the partner has to follow the stricter applicable rule. National procurement rules must be observed for all purchases and full documentation of the procurement is mandatory for expenditure to be regarded as eligible.

The programme will use both real costs and simplified cost options (SCOs).

Regarding real costs, all beneficiaries must maintain separate accounting records or use separate accounting codes for all transactions relating to the project.

The SCOs are reported based on pre-defined calculation methods and are not expected to match with accounting records. Costs covered by a SCO cannot be reported under any other cost category as real costs as this would be double financing.

Eligible expenditure
All costs must follow the principles of sound financial management and must be free from partiality and conflict of interest. A conflict of interest can arise when a decision is compromised for reasons involving family, emotional life, political or national affinity, or where any economic interest or any other interest is shared with another person.

All costs must be:

  • project related, clearly connected to project activities traceable in the approved application form.
  • directly supporting the achievement of results and outputs of the project
  • incurred, entered into the project accounts and paid by the project partner during the project period.

Value added tax (VAT) is according to the EU-regulations eligible in projects with a budget up to EUR 5 000 000 (including VAT).  

Costs that may be seen as a direct eligible expenditure in certain cases

For projects using the reporting method “All cost categories” there are some exceptions regarding costs for representation that normally would be seen as covered by one of the flat rates (office and administrative costs or travel and accommodation costs).

Internal representation is when project staff from the project partners meet to participate in planned project activities and management of the project. The basic principle is that food and beverage in these contexts are included in the flat rates . Exceptions may be made for meetings that last for a day or more with participants from several project partners in a project. The exception means that the

cost is eligible as a direct cost under external expertise ((g) services related to the organisation and implementation of events or meetings (including rent, catering or interpretation)).

Examples for a project with 4 partners:
– Project staff from two project partners meet for a couple of hours one morning to plan a project activity. Food and beverage are included in the flat rate and may therefore not be reported as direct costs. This also applies even if there are a separate invoice and other supporting documents.
– Project staff from all four project partners meet for a full working day for a kick-off meeting before a new year within the project. Food and beverage may be reported as a direct cost in the cost category External expertise and services cost provided it can be verified by supporting documents such as invoice, invitation, programme, list of participants and, where applicable, meeting notes , if asked for by the controllers.

External representation is when the project staff meet with external guests. External representation in the form of food and beverage can constitute eligible direct costs in the cost category External expertise and services cost. There must be a direct connection between the implementation of the project and the representation. Examples of such occasions are meals in connection with steering group meetings or meetings with external stakeholders during project activities . The representation must be characterized by restraint about the amount, frequency and number of participants. Only persons connected to the activity may participate and representation shall be limited to meetings of the type specified above. Expenses must always be documented for example through the invitation, program, list of participants with information on the participants names and organisations (signatures not needed) and, where applicable, meeting notes. Both the external guests’ and participating project staff’s costs for food and beverage are eligible.

Ineligible expenditure
Examples of costs that are not eligible:

  • Any expenditure which is already 100% co-financed by another EU-funding source or a national or regional subsidy is not eligible in the context of an Interreg Aurora project (double-financing).
  • Fines, financial penalties and expenditure on legal disputes and litigation
  • Gifts
  • Costs related to fluctuation of foreign exchange rate
  • In-kind costs
  • Expenditure incurred and/or paid before the start date of the project
  • Expenditure incurred after the end date of the project
  • Expenditure paid too late (no later than 2 months after the end date of the project but before submitting the final payment application)
  • Holiday pay dept (accrued holiday pay) meaning holiday pay that are not actually paid out to the employee during the project time, nor within 2 months after the end of the project
  • Expenditure above approved flat rates

Cost-sharing within the project partnership
Invoicing between partners shall be avoided, as it can cause time-lags and other problems for project partners at the reporting stage. The main principle is that a specific cost shall be paid by one partner in total, and they shall not send an invoice regarding partial payments of that cost to the other partners. The partner carrying shared costs, shall include it as an expenditure in the individual project partner budget. The project partner in question can then receive a larger proportion of the funding in the project.

Programme manual