From 13 to 15 November 2024, Ghent University welcomed around 30 professionals in the field of internationalisation in higher education from all over Europe, to participate in its Staff Training on the Lump Sum funding model in Erasmus+ projects.
The relevance and timeliness of cross-institutional discussions on this topic had previously been demonstrated, as over 100 applicants had expressed their interest to participate. The Staff Training proved to be insightful for all participants, taking place in a conducive environment for information and best-practice sharing, and laying the foundation for potential further cooperation.
The Lump Sum funding model in Erasmus+
Lump Sum funding was introduced in the Erasmus+ Programme in selected calls in 2021. It has since become the dominant funding model for projects in Key Actions 2, 3 and Jean Monnet.
The European Commission introduced the Lump Sum funding model with the overall objective of simplifying the administration of EU funded projects. The Commission argued that other funding models, in particular those with detailed financial reporting requirements, remained complex and error-prone, despite simplification efforts.
By shifting the focus from financial management and checking costs, to the correct project implementation from a substantive point of view, the Commission argued that significant simplification could be achieved. Funding would consequently become more accessible for small organisations and newcomers, contributing to the Commission’s objective of making EU funding programmes more inclusive.
However, as the current Erasmus+ Programme is over halfway its 2021-2027 period, and preparations on the next Multiannual Financial Framework have started, questions and uncertainties remain. These stem from a perceived lack of guidance, or even from legal uncertainty related to the correct management of Lump Sum funded projects. Beneficiaries often feel hesitant to introduce changes to their institutional procedures, or agreements at consortium level, to fully harness the theoretical simplification potential of the lump sum funding model.
The Commission has published a multitude of reports, guidance, presentations, and FAQs on the Lump Sum funding model. However, many of these instructions often solely focus on Horizon Europe projects. Whereas the Lump Sum principles are generally the same across funding programmes, important nuances in the framework of Erasmus+ exist as well, which are not always addressed in the official materials available.
Therefore, the Staff Training aimed to address the most significant topics and discussion points related to the Lump Sum funding model in Erasmus+ projects.
Key aspects of the Staff Training
Participants’ Experience with Lump Sum
The Staff Training was kicked off with an overview and discussion of the participants’ activities and experience with the Lump Sum funding model so far, with a majority being involved in lump sum funded Erasmus+ projects as coordinator and/or partner. However, only a minority of represented institutions had adopted a dedicated policy towards the management of lump sum funded projects.
Participants indicated that it was still too early to assess the concrete impact and consequences of this new funding model, although a majority acknowledged that the Lump Sum funding model would shift a project’s emphasis from financial control to its proper implementation. Nevertheless, participants pointed towards national or institutional rules, which continue to apply. Therefore, not all potential benefits of the Lump Sum funding model could be harnessed.
Project Design
During the second session, the UGent team presented lessons learnt from recent experiences and feedback related to project design. The session focused on which elements should be taken into account, but also specifically on why these elements were important. Concretely, the session looked into defining target audiences, developing a Logical Framework Matrix, implementing quality assurance, and ensuring impact.
Differences between Centralised and Decentralised Erasmus+ Actions were highlighted, as well as points of attention related to the lump sum model, such as the impact of the joint financial liability principle. Whereas a strong consistency and coherence within and among Work Packages and related activities is essential, some caution for potential domino effects is warranted, for example if certain activities could not be completed. Risk mitigation measures should therefore be designed as well. Nevertheless, a cohesive narrative is essential in any project application, which ultimately also serves as the basis for how the project and its implementation will eventually be evaluated.
Budget Design
The third session focussed on key elements to be taken into account when designing a Lump Sum budget. Special attention was paid to the differences between fixed and customised lump sums, to the calculation of different cost categories, subcontracting, the procurement of equipment, indirect costs, co-funding requirements, and how to ensure a project’s cost-effectiveness.
Participants agreed that budget calculations should indeed be based on real cost estimates as much as possible, using budget table templates, whether or not these are provided by the funding institutions. However, it was noted that institutions may be hesitant to follow this approach, in particular when this would lead to nominal budgetary imbalances between higher and lower income countries, even in circumstances where such imbalances would be justified based on the workload and related real costs.
Finally, participants addressed the role of International Relation Offices in contributing to, evaluating, and greenlighting or blocking project proposals. In particular, the absence of mandate letters was highlighted, which participants argued has removed a useful tool for administrative quality assurance at proposal development stage.
Erasmus+ Project Implementation
Attention then turned to a project’s post-award phase. The fourth session focussed on contractual aspects of Erasmus+ lump sum funded projects, institutional policies on this funding model and the operationalisation thereof.
Ghent University presented the findings of Legal Advisors at its TechTransfer Office. Experiences gained from reviewing lump sum project Consortium Agreements showed that there is often limited institutional capacity for legal support to advise on and review legal documents. Participants agreed that this may lead to a patchwork of approaches and views. This could result in Consortium Agreements that are not aligned with the underlying Grant Agreements, or their applicable funding rules.
To address this, Ghent University developed a Consortium Agreement template, based on the DESCA model, adapted to Erasmus+ lump sum funded projects, and representing Ghent University’s institutional policy of combining flexibility with certain safeguards. This template was shared with participants. Ghent University will continue to update its template where relevant. Participants agreed that, by lack of an official template, a Consortium Agreement template developed and supported by the community could contribute to the smooth implementation of Erasmus+ projects.
Participants discussed the feasibility of a dedicated lump sum policy at institutional level, and whether or not simplification could be achieved in the context of applicable European, national, and institutional rules and procedures. In particular, discussions demonstrated that institutions may be hesitant to simplify their rules due to a lack of legal clarity and uncertainty regarding (financial) reporting requirements and audit procedures, as well as the potential consequences of the joint financial liability principle in lump sum funded projects.
Reporting and Evaluation
The fifth session therefore looked into the reporting on and evaluation of lump sum funded projects. A contribution from the European University Alliance ENLIGHT demonstrated that, while the actual costs funding model provided clarity but implied a heavy administrative workload, the lump sum funding model reduced administrative burden but came with uncertainties related to budget flexibility, amendments, progress monitoring, reporting, and payments.
The evaluation of Erasmus+ lump sum funded projects is based on implementation reporting. Throughout the reporting stages, whether continuous or periodic, beneficiaries should demonstrate a project’s proper implementation, leading to the completion of Work Packages. Nevertheless, participants noted the lack of alignment between Centralised and Decentralised Erasmus+ Actions, in terms of reporting terminology, modalities, timelines, and templates. This could lead to additional uncertainty for beneficiaries, potentially undermining the simplification objectives of the lump sum funding model.
Particular attention was paid to the financial reporting requirements, which should in principle only reflect lump sum contributions requested at application stage. Detailed cost reporting is not required. However, some participants expressed concerns related to joint financial liability, where all partners involved in a Work Package could jointly be impacted should the reported completion of that Work Package be rejected. They suggested this could even warrant a more detailed recording of costs incurred, in connection with the underlying activities.
Nevertheless, the model Grant Agreement states that beneficiaries do not need to keep specific records on the actual costs incurred. The Commission has also clarified that cost categories with lump sums are not subject to verification in a financial audit. Despite this information, the group agreed that it was too early to properly assess this, as only a small number of lump sum funded Erasmus+ projects had been concluded at the time of the Staff Training, and no participants had experience with an audit of a lump sum funded project so far.
Participants further agreed that uncertainties were also the result of diverging approaches and interpretation across Erasmus+ National Agencies, with some seeking to facilitate simplification, and others taking a more conservative stance. The Flemish Erasmus+ National Agency, Epos, suggested in an interview that these diverging approaches could be rooted in the flexibility provided by the lump sum model itself. Epos confirmed that regular formal and informal meetings between the Agencies were being held, with the objective of aligning procedures and regulations.
Epos further confirmed that no financial documentation needs to be provided at reporting stage, but that providing adequate proof of the correct completion of Work Packages is key. Epos acknowledged the current level of uncertainty, but was confident this would decrease as projects come to an end, their final reporting is accepted, and experience with audits is gained.
Feedback and Recommendations
In the final session, participants discussed in smaller groups the impact of the lump sum funding model on three project stages respectively: project and budget design, project implementation and management, and project reporting and evaluation.
In particular, groups were asked to ponder on three questions: the main take-aways of the staff week, the questions and unclarities that remained, and the broader evaluation of the lump sum funding model.
Participants welcomed the positive atmosphere during the staff training, and the possibility to exchange questions, challenges, experiences, and practices. They felt they could take lessons learnt, for example related to institutional policies towards the lump sum funding model, back to their respective institutions. However, they noted that some significant uncertainties and questions remained. These were mostly related to progress monitoring, (financial) record keeping, reporting, evaluations, and audits. These challenges were further amplified by diverging approaches between and among the European and National Agencies.
Further alignment between the Agencies, clarity regarding the applicable rules, guidance on how to best navigate the Lump Sum funding model, as well as the development of tools such as a model Consortium Agreement and gaining further experience, should all lead to a more confident implementation of Erasmus+ projects. This would also enable the design of institutional policies reflecting this funding model’s objective of flexibility and simplification.
If these outstanding challenges could be addressed, participants argued that the lump sum funding model could indeed create a clear yet flexible framework for the efficient and impactful implementation of Erasmus+ projects.
Potential further cooperation
As a follow up to the staff training, participants considered potential avenues for further cooperation. This could include joint work on a Consortium Agreement template, the development of guidelines on managing lump sum projects, policy recommendations at institutional level, and policy recommendations towards the funding institutions in a push for more clarity and seeking alignment and support where needed.
As a first step, Ghent University has drafted a non-exhaustive and evolving list of resources that may help navigating lump sum funding in Erasmus+, and is sharing its current Model Consortium Agreement. The other potential avenues for cooperation will continue to be explored in the coming months.
