6. Article

Financial Accounting (1) Financial and accounting procedures: BALTDEFCOL establishes and revises as necessary its own Internal Accounting Regulations, in accordance with the requirements stipulated by Estonian law. Estonian rules on book-keeping and reporting in the public sector are applied directly or incorporated. BALTDEFCOL provides the Hosting Participant with a copy of the regulations, the Hosting Participant will be held updated at all times on revisions. The other Participants will be equally provided with copies and updates upon request. (2) Assets: a) The assets of BALTDEFCOL consist of the funds transferred by the Participants, assets donated by third parties to BALTDEFCOL or to either of the Participants and subsequently transferred by the Participant to BALTDEFCOL ownership, as well as assets, acquired as approved in and funded through the Budget. b) Either of the Participants may make available assets for the use of BALTDEFCOL. The assets so provided remain the assets of that Participant, and will not be included in BALTDEFCOL accounts or assets. A Participant will not withdraw assets from BALTDEFCOL without prior notice of the BALTDEFCOL Co-ordination Group. Separate records will list property so made available on loan. c) Assets, owned or used by BALTDEFCOL, will be recorded in inventory lists kept by BALTDEFCOL. Inventory lists will include specification of ownership of the assets. d) Assets donated to or acquired by BALTDEFCOL through the Budget or transferred by either of the Participants to BALTDEFCOL ownership will be written off for depreciation in accordance with BALTDEFCOL Internal Accounting Regulations. Assets are replaced in accordance with the approved Budget. e) Fixed assets that have been depreciated to no formal value, but are still usable, will be used by BALTDEFCOL, as reserve equipment, in support of staff and students as well as in support of part-time activities. f) Any land, buildings or fixed installations provided for the use of BALTDEFCOL by the Hosting Participant without charge to BALTDEFCOL (other than a nominal charge) and no longer required by BALTDEFCOL will be handed back and dealt with under the arrangements set out in subparagraph g), i., below. g) If this MOU is terminated the following procedures will apply, except in so far the Participants decide otherwise: i. Assets of the Participants will be returned to the Participant, to whom it belongs. Any land, buildings or fixed installations provided for the use of BALTDEFCOL by the Hosting Participant without charge to BALTDEFCOL (other than a nominal charge) will be handed back to the Hosting Participant, and any increase or loss in the value of the assets, so provided by the Hosting Participant, resulting from its use by BALTDEFCOL, will be determined by the Participants, taking into consideration applicable law of the Hosting Participant, and distributed among the Participants in the proportions in which they have contributed to BALTDEFCOL budget. ii. Fixed assets donated by third parties to BALTDEFCOL or to either of the Participants for the use of BALTDEFCOL will be distributed in accordance with the documents of donation. In case no specific requirements are governing the transfer, the equipment will be disposed of only under arrangements approved by the Participants. iii. Cash (including deposits in bank accounts) will be shared proportionally by 1/3 to each of the Participant. iv. Assets funded through the Budget will be disposed of only under arrangements approved by the Participants and the proceeds will be distributed among or credited to the Participants in the proportions in which they have contributed to BALTDEFCOL Budget. The Hosting Participant will have a prior right to acquire any immovable property so disposed of in its territory provided that it offers terms no less favourable than those offered by any third party. (3) Bank accounts: a) BALTDEFCOL Chief of Finance is responsible for the establishment and management of all BALTDEFCOL bank accounts. Transfers to and from, and withdrawals from BALTDEFCOL bank accounts managed by the Chief of Finance, are valid only if the transaction is authorised by two (2) signatories (Chief of Finance and the Commandant or an officer designated by the Commandant). b) For the purpose of managing the approved Budget, the Commandant may, upon specific MC approval, be empowered to establish a credit bank account, with a credit ceiling of 40 000 EUR. The draw on the credit bank account in a FY may not at any time exceed the remaining payments to be made by the Participants in accordance with the approved Budget for that year. 7. Reporting (1) BALTDEFCOL will adhere to the following cycle of reporting: a) BALTDEFCOL Chief of Finance submits monthly statements to the Commandant on the actual costs for the past months of that FY and a revised estimate of the costs to be incurred in the remains of that FY. Any of the Participants can request to receive copies of the statements. b) The Hosting Participant Senior National Representative will provideBALTDEFCOL Chief of Finance with monthly statements on the costs of the Hosting Participant Support, which is agreed in Annex E to be reimbursed by BALTDEFCOL. c) The Commandant presents a Semi-annual Budget Report to the MC, via MilC every 15th of August. The Report will consist of the actual costs for the first six months of the current FY, a revised estimate for the last six months of the current FY, an analysis of the current FY expenditure against the budget estimate, with explanations any adjusted budget estimate for the next and following FYs. d) The Commandant forwards an Annual Budget Report to the MC, via MilC every 15th of February at the same time as it is sent to the Hosting Participant State Audit Office. The Report will consist of a summary of the actual costs for previous FY and an analysis of the past FY expenditure against the approved Budget, with explanations of significant variances. (2) BALTDEFCOL will provide any additional statements as to its performance and finances as requested by the Participants.