Claiming personnel costs - the new 'PUC' option
The latest in a list of options for claiming personnel costs on Horizon Europe projects came into effect on 1 May this year. The Personnel Unit Cost (PUC) option is a new attempt to reduce errors and simplify claims for work done on projects. Will it succeed? Time will tell. It’s not going to suit all organisations, however, for others, it may be the perfect solution.
What is the new PUC?
In Horizon 2020, personnel costs represented the largest source of financial errors. They also typically represent approximately two thirds of the budget in a project so it’s no surprise that it’s an error-prone activity. This is due to the complexity of different calculations for employees, SME owners, consultants, part-time employees, parental leave and so on.
The new PUC offers the option of a single fixed daily rate for your organisation – this one daily rate will apply to all employees across all future Horizon Europe grants that you are involved in (ongoing grants are not affected).
Calculating the daily rate
So how is this daily rate calculated? It’s based on the number of staff and total staff costs for your organisation in the last closed financial year - a PUC wizard is available here on the Funding & Tenders portal where you can calculate your organisation’s daily rate without any commitment.
The default option for claiming personnel costs is to use actual personnel costs. So, if you decide that the PUC option would be more beneficial for your organisation, you need to request this option which involves submitting an audit certificate provided by an independent external auditor (template available here).
NOTE:
- The fee for generating the audit certificate is not an eligible cost as it is incurred before the start of the project. There are anecdotal reports from other countries of significant costs being quoted so ensure that you check this out in advance.
- A cap applies to the daily rate – for Ireland, this cap is currently €728 per day.
Validated!
When the audit certificate has been validated by the Research Executive Agency (REA) and your request is approved, you must now use the one daily rate for personnel costs in all your proposals after the approval date - grants already awarded/signed cannot be amended to introduce the unit cost.
This means that if you are involved in more than one project, you cannot use a different method of claiming personnel costs in another grant. You can also update the daily rate every two years for new grants (ongoing grants cannot be amended) up to 31 December 2027 – re-validation will be required for updates to the daily rate.
Change your mind?
If you choose the PUC option but subsequently discover that it is not working out for your organisation, you can revert back to actual costs for future grants. However, you can only do this once – for the rest of the Horizon Europe programme, you will not be permitted to request the use of the PUC option again.
Annotated Model Grant Agreement (AGA) update
The AGA has now been updated to include information on the PUC under Article 6.2.A.6 (currently page 69). There is also information and guidance available on the Funding & Tenders Portal here – however, as this section is still under active development, you may come across some links/options which are not yet functional.
In the meantime, if you require any further information or have a specific question relating to the PUC, please get in touch!