Simplified cost options, also known by the abbreviation SCO, are a way of financing EU projects in which expenditure is not proven through individual invoices and statements but through pre-set rates. They comprise three basic forms: unit costs, that is a fixed amount per measurable unit such as an hour of work, a course participant or a kilometre; flat-rate rates calculated as a percentage of another category of expenditure; and lump sum payments tied to the achievement of an agreed output. In the 2021–2027 period the European Union is strongly promoting simplified cost options, and for projects up to EUR 200,000 they are even mandatory. For recipients, this means a substantial reduction in administration – it is the output achieved that is checked, not a pile of accounting documents – and thereby also a lower risk of expenditure reductions and corrections. The disadvantage is that the rates need not exactly mirror the real costs, so it is worth calculating in advance whether the set unit prices will cover the project's actual expenditure.
See also: Flat rate.
