An earmarked subsidy is provided for a precisely defined purpose stated in the contract or the decision, and it must not be used for anything else, even if that would be more advantageous for the recipient. It is typically provided by municipalities, higher territorial units, ministries and state funds. After the period of use ends, settlement follows: the recipient submits an accounting statement with copies of documents, bank statements and a report on use, with any unspent balance returned within the set deadline. Exceeding the purpose or failing to meet the settlement deadline is assessed as a breach of financial discipline and can lead to a levy, a penalty, and even exclusion from further rounds. A practical piece of advice is to keep separate analytical records for the subsidy from day one, not only at the time of settlement.
See also: Analytical Accounting Records for the Project, Return of funds, Grants for Municipalities and Towns.
