Master- Financial Management of EU Funded

Projects and External Auditing
1 Training Material
1.1 Issues that Financial Manager of European Projects
should be able to address
Are you comfortabíe wíth the foííowíng questíons on ñnancíaí management?
 What are the key documents that you need to be famíííar for sound
ñnancíaí management and proper budget píanníng?
 Is there a three-word ruíe for ensuríng quíckíy and símpíy sound ñnancíaí
management?
 Am I aííowed to produce some íncome from the pro|ect actívítíes (e.g.
partícípatíon fees from a pro|ect workshop? or revenues for seíííng
pubíícatíons from a pro|ect?)
 How can I found out quíckíy what shouíd be eíígíbíe and what shouíd not
be eíígíbíe cost ís a European pro|ect?
 What ís the díherence betweenactuaí costsandíump Sum costs?Do we
know any cost categoríes that can normaííy ñt under íump sum costs and
on what condítíons?
 Can I receíve 100% fundíng for my actívítíes?
 what ís the díherence betweendírect costsandíndírect costsín a european
funded pro|ect?
 What are the 5 most common cost categoríes of dírect costs?
 Under whích cost category, the príntíng of a díssemínatíon íeañet shouíd
go?
 Under whích cost category, the productíon (desígn and príntíng) of a
díssemínatíon íeañet shouíd go?
 Hostíng dínners for your partners ín a pro|ect ís an eíígíbíe cost and íf not,
how can you make ít eíígíbíe?
 How can you make sure that aíí your traveíííng costs are eíígíbíe costs?
 What you need to be aware wíth stah costs?
 Can I subcontract pro|ect management or ñnancíaí management?
 Freeíancer consuítants/experts are subcontractors or stah members?
 Under whích cost category the traveíííng/subsístence costs for the
subcontractors or the voíunteers ín a pro|ect shouíd be decíared?
 I have attended a semínar/conference abroad that was reíevant to the
pro|ect. Is the semínar/conference fee an eíígíbíe cost and under whích
category, ít shouíd go?
 I have purchased a íaptop or a PC, ís thís an ICT equípment cost?
 Is VAT an eíígíbíe cost?
 ICT equípment ís aíways sub|ect to deprecíatíon (í.e. to be aííowed to
cíaím max 1/3 of íts vaíue per year)?
 Is there an exceí formuía for caícuíatíng easííy the eíígíbíe índívíduaí stah
cost per person?
© NSF CYBERALL ACCESS, Suppíementary Notes to míndmaps
 Are there any european programmes that I can cíaím more than 100%
overhead rate and under whích condítíons?
 What are the key reference documents that I need to be famíííar for
ehectíve ñnancíaí management?
 Are there any european programmes that the pro|ect coordínator takes a
sígníñcant ñnancíaí rísk and íf so, how thís can be avoíded?
1.2 Master fnancial management of european projects
1.2.1 Reference material
FR - Fínancíaí Reguíatíon 966/2012 for 2014-2020
http://eur-íex.europa.eu/LexUríServ/LexUríServ.do?
urí=O|:L:2012:298:0001:0096:EN:PDF
RAR- Ruíes of Appíícatíon of Reguíatíon of Fínancíaí Reguíatíon 966/2012
http://eur-íex.europa.eu/LexUríServ/LexUríServ.do?
urí=O|:L:2012:362:FULL:EN:PDF
European Commíssíon proposaí for the 2014-2020 Muítíannuaí Fínancíaí
Framework
http://ec.europa.eu/budget/ííbrary/bíbíío/pubíícatíons/2011/mh2011/KV3112884
ENN-web.pdf
Synopsís of Fínancíaí Reguíatíon and íts RAR
http://ec.europa.eu/budget/ííbrary/bíbíío/pubíícatíons/ñnreg/KV3112815ENC.pdf
Doíng Busíness wíth the European Commíssíon
http://ec.europa.eu/budget/ííbrary/bíbíío/pubíícatíons/busíness/doíng_busíness_
en.pdf
1.2.2 Financial Management
Generaí Príncípíes
ENA Ruíe
The ñnancíaí management on most of the European Pro|ects ís based on the
ENA ruíe. í.e. aíí cíaímed costs shouíd be
● Economíc
● Necessary
● Actuaí
 Is thís cost economíc?
 Is thís cost necessary?
 Is thís cost actuaí?
Eíígíbíe Expendíture
Economíc
Necessary
Actuaí
Ineíígíbíe Expendíture
The foííowíng costs are not admíssíbíe and therefore shouíd not be íncíuded ín
© NSF CYBERALL ACCESS, Suppíementary Notes to míndmaps
any of the expenses categoríes but some may be íncíuded as indirect costs
only if tey are lin!ed "it te #roject:
● Costs reíated to openíng and operatíng bank accounts $also as indirect
cost%
● Debt servíces charges$also as indirect cost%
● Exchange íosses$also as indirect cost%
● Expendíture that ís aíready funded by other Communíty sources
● Excessíve expendíture
● Cost of buy out optíon at the end of íease períods$also as indirect cost%
● Expendíture for the substítutíon of stah who partícípate ín the
pro|ect$also as indirect cost%
● Fínes, ñnancíaí amendments and íegaí costs for thís.
No proñt to be generated
A european pro|ect shouíd not generate any proñt from the pro|ect.
No ínterest
Any ínterest that ís generated from pro|ect funds/payment ínstaííements ís not
aííowed. In that case, you eíther maíntaín a bank account for the pro|ect wíth
no ínterest at aíí, or you return back any íncome generated from ínterest.
However, accordíng to the new Fínancíaí Reguíatíon (966/2012) that ís
appíícabíe by 1st |an 2013, there ís no need to return any generated ínterest
from receíved EC fundíng. Interest generated ís not consídered as proñt.
No 100% fundíng
í.e. Fundíng rate ín aíí European funded programmes ranges from around 10%
to 90% dependíng on each programme.
Important Exampíe
e.g. ín case for exampíe that you organíse a conference ín the context of a
European pro|ect and you appíy some regístratíon fee, you cannot have thís as
pure íncome. Aíternatíveíy, you can use ít to cover some of the conference
expenses on the condítíon that these haven't been cíaímed as expenses ín the
pro|ect. e.g.
● 1000 EUR for room rentaí
● 2000 EUR for íntepretatíon
● 500 EUR for snacks and cohee breaks
● 600 EUR for promotíon
Cost modeís
Based on Actuaí Costs
In the European Programmes wíthActual &ostsruíe, you shouíd cíaím what you
actuaííy spend for the pro|ect actívítíes
Based on Lump Sum Costs
In the European Programmes wíth'um# (um &ostsruíe, you receíve a pre-
ñxed amount based on the actívítíes that you undertake. As íong as you
© NSF CYBERALL ACCESS, Suppíementary Notes to míndmaps
havefuíñííed the condítíons (actívítíes and achíevements) for receívíng the
fundíng, you are eíígíbíe to receíve the fundíng wíthout the cíaím of any
costs/expenses.
Based on míxed from both
There are someEuropean Programmes that for some costs you need to appíy
the Actual &osts Ruíe and for some others you can appíy the 'um# (um
&ostsruíe (e.g. subsístence costs ín míssíons).
Exchange rate appííed
http://ec.europa.eu/budget/ínforeuro/índex.cfm?Language=en
Controversíaí posítíons are appííed for the exchange rate but we wííí cíarífy
here.
 The exchange rate appíícabíe on the day of the cost based on the
in)oice date
 The exchange rate appíícabíe on the day te 1st year ad)ance
#ayment was made by the EC
 The exchange rate appíícabíe on the day te last ad)ance #ayment
was made by the EC.
VAT:Vaíue Added Tax
Such partner wííí therefore have to make a specíñc decíaratíon on thís íssue
and províde proper evídence. Thís ís common maíníy ín non proñt
organísatíons.
Exceptíons maybe ín some programmes that VAT ís not eíígíbíe at aíí (e.g. FP7)
even ín cases that organísatíons cannot recover ít.
Type of Eíígíbíe Costs
What are the cost categoríes that can be eíígíbíe costs ín a pro|ect?
Dírect Costs
Normaííy, direct costs are the ones that directly lin!ed for the successfuí
ímpíementatíon of the pro|ect and foííow the E*A ruíe. These can be:
● Stah
● Traveí, Accommodatíon and Subsístence
● ICT
● Subcontracts
● Other
Stah Costs
Stah costs can íncíude the foííowíng categoríes of stah:
● Stah havíng eíther a permanent of temporary empíoyment contract wíth
the partner
● Stah costs shouíd be caícuíated on the basís of the reaí daííy saíary of the
empíoyee concerned, muítípííed by the number of days dedícated to the
pro|ect.
● The gross cost caícuíatíon shouíd íncíude aíí the normaí contríbutíons
paíd by the empíoyee, for exampíe socíaí securíty, whííe bonuses,
íncentíves or proñt share schemes shouíd be excíuded.
© NSF CYBERALL ACCESS, Suppíementary Notes to míndmaps
Upper Ceíííngs
In most of the programmes, there ís an upper ceíííng on the stah costs. In order
to caícuíate the stah costs, díherent types of personneí are cíassíñed ín 4
categoríes.
1) Managers; Dírectors
2) Researchers; Teachers; Traíners
3) Technícaí stah
4) Admínístratíve stah
For each category there ís a maxímum daííy cost whích changes from country
to country.
+m#ortant, (ta- daily costs cannot exceed te maximum rate for te
rele)ant country. Any sur#lus is considered ineligi.le.
In the other cases that there ís no u##er ceiling, the oníy guíde for us ís the
E*A rule.
Stah costs |ustíñcatíon
https://docs.googíe.com/open?
íd=0B4ysíeíSríZ0M2Y2Z|Y0NzEtMzg1My00Z|UzLThmYzMtZGRíNGU2Y|O3NDY2
The stah costs shouíd be |ustíñed usíng some íf not aíí of the above:
● Tíme sheets
● Decíaratíon of method of caícuíatíon
● Empíoyment contracts
● Specíñc empíoyment íetter reíated to the pro|ect
● Paysííps
● Bank statements of payments made (avoíd payments ín cash whenever
possíbíe)
● Record of the costs ín the accountíng books
Poínts to remember
Poínts to remember
● Each stah cost descríbed ín the report ís supported by the reíated
accountancy documents
● The cost per day for each stah category ís wíthín the ceíííng
● For EACH stah member you have encíosed: tímesheets; Paysííps ;
Empíoyment contracts; empíoyment íetter reíated to the pro|ect; Bank
statements of payments made; Decíaratíon of method of caícuíatíon.
● There ís no míxíng up between stah costs and subcontractíng costs (see
íater)
© NSF CYBERALL ACCESS, Suppíementary Notes to míndmaps
Traveí Costs
● Traveí costs are admíssíbíe oníy íf they are dírectíy connected to specíñc
and cíearíy ídentíñabíe pro|ect reíated actívítíes.
● Traveí costs shouíd be reíated oníy to stah (therefore the names of
traveííers shouíd be consístent wíth the names íncíuded ín the wStahw
budget headíng.
● Non stah members shouíd be accounted for under the wOther Costsw
(e.g voíunteers) or wSubcontractíng Costsw (e.g subcontractors) budget
headíngs.
● Partners are requíred to choose the cheapest mean of traveí, where thís
ís not the case a fuíí expíanatíon shouíd be províded.
● Híre of cars (maxímum cíass B car may be used) or taxí costs are eíígíbíe
oníy íf not excessíve compared to other means of traveí, or íf there are
other ínñuencíng factors (e.g. tíme, excessíve íuggage not due to
excessíve shoppíng!! but say for transportíng díssemínatíon materíaí or
pro|ect pubíícatíons, etc.).
Traveí Costs |ustíñcatíon
● Detaííed Expendíture sheet for each person , each encíosíng:
● Invoíces of Traveí Agency
● Píane/Traín/Bus tícket
● For píanes: Boardíng Card
● Invoíce of Car Rentaí Company
● Taxí receípts
N.B. Aíí documents encíosed shouíd be transíated ínto Engíísh and converted
ínto Euro , specífyíng the currency conversíon rate appííed (use the omcíaí EU
one)
Poínts to remember
● Traveí costs are admíssíbíe oníy íf they are dírectíy connected to specíñc
and cíearíy ídentíñabíe pro|ect reíated actívítíes.
● Traveí costs shouíd be reíated oníy to stah (therefore the names of
traveííers shouíd be consístent wíth the names íncíuded ín the wStahw
budget headíng.
● Non stah members shouíd be accounted for under the wOther Costsw
(e.g voíunteers) or wSubcontractíng Costsw (e.g subcontractors) budget
headíngs.
● Partners are requíred to choose the cheapest mean of traveí, where thís
ís not the case a fuíí expíanatíon shouíd be províded.
© NSF CYBERALL ACCESS, Suppíementary Notes to míndmaps
● Traveí costs shouíd íncíude transportatíon from your poínt of departure
(e.g. home or omce) to your ñnaí destínatíon (e.g. hoteí, or meetíng
píace) and více-versa.
Subsístence Costs
Subsístence Costs íncíude:
● Accommodatíon (hoteí ínvoíce)
● Meaís (breakfast, íunch and dínners. No extras, no room servíce)
● Locaí traveís (excíudíng those to traveí from the poínt of orígín to the
destínatíon)
● Subsístence costs are admíssíbíe as íong as they:
● Are necessary and reasonabíe
● Do not exceed the maxímum permíssíbíe daííy amount per person ín the
destínatíon country, ín cases that the ñnancíaí guíde of the
workprogramme has set such ceíííngs
● In cases that there are such ceíííngs and there ís no overníght stay the
costs are reduced by 50%.
Based on Actuaí Costs
Subsístence based on actual costs requíres aíí the reíated costs to be |ustíñed
based on proper receípts and ínvoíces.
● Any excess of the subsístence costs made above any pre-set ceíííng ís
not eíígíbíe
● Proof of attendance and of overníght accommodatíon ís requíred
● Subsístence costs shouíd be reíated oníy to stah. Non stah members (e.g
voíunteers, consuítants, subcontractors) shouíd be accounted under
"Other Costs" or "Subcontractíng Costs".
Based on daííy aííowance
In case, your organísatíon appííes as ínternaí ruíes the reímbursement of íts
stah ín míssíons accordíng to a daííy aííowance ínstead of askíng for actuaí
receípts, then thís daííy aííowance can be cíaímed wíthout the need to submít
the cost receípts.
● Daííy aííowance shouíd be the generaí ruíe wíthín the organísatíon and
not the exceptíon
● Any excess of the daííy aííowance above any pre-set ceíííng ís not eíígíbíe
● Proof of attendance and of overníght accommodatíon ís requíred
● Subsístence costs shouíd be reíated oníy to stah. Non stah members (e.g
voíunteers, consuítants, subcontractors) shouíd be accounted under
"Other Costs" or "Subcontractíng Costs".
Subsístence Costs |ustíñcatíon
Subsístence costs shouíd be |ustíñed usíng:
© NSF CYBERALL ACCESS, Suppíementary Notes to míndmaps
● Detaííed Expendíture sheet for each person encíosíng:
● Decíaratíon for Daííy Aííowance + Hoteí Invoíces
Or
● Reímbursement Sheet encíosíng:
● Restaurant Invoíces
● Hoteí Invoíce
● Bus tícket
● Taxí receípt
N.B. Aíí documents encíosed shouíd have theír maín part transíated ínto Engíísh
and converted ínto Euro, specífyíng the currency conversíon rate appííed (use
the omcíaí EU one)
Poínts to remember
● Each cost descríbed ín the report ís supported by the reíated
accountancy documents
● The subsístence cost per day for each country ís beíow the maxímum
ceíííng (íf exísts) aíso takíng ínto account the 50% oh reíated to the íast
day of stay.
● The subsístence cost ceíííng ís reduced íf the hostíng partner covered the
cost for the íunch / dínner.
● For EACH stah member you have encíosed a specíñc expendíture
sheet,íncíudíng : hoteí ínvoíces; restaurants receípts, taxí tíckets etc. NB
Expendíture sheets for more than one person are not accepted.
● For each stah member you have ñííed ín a díherent ííne ín the report.
● Subsístence costs shouíd be reíated oníy to stah. Non stah members (e.g
voíunteers, consuítants, subcontractors) shouíd be accounted under
"Other Costs" or "Subcontractíng Costs".
Equípment /ICT Cost
Equípment or ICT costs íncíude:
● Expendíture for the purchase, íeasíng or híríng of hardware and ICT
equípment are admíssíbíe oníy íf stríctíy necessary for carryíng out the
pro|ect actívítíes.
● When choosíng to íease, híre or purchase ICT equípment, the íeast
expensíve optíon shouíd be chosen.
● Oníy the portíon of equípmentws deprecíatíon correspondíng to the
duratíon of the actíon and the percentage of use may be taken ínto
© NSF CYBERALL ACCESS, Suppíementary Notes to míndmaps
account (see exampíe).
● Equípment used for pro|ect admínístratíon (e.g. PCs, íaptop etc) normaííy
ís covered by the wIndírect Costsw budget headíng.
● The totaí expendíture for equípment can be up to a specíñc % of the totaí
dírect costs ín some programmes.
Equípment Cost |ustíñcatíon
Equípment costs shouíd be |ustíñed usíng:
● Invoíce cost *de#reciation rate caícuíatíon * duration
rate*#ercentage of use
● /e#reciation rate: It depends on your natíonaí accountíng ruíes but
normaííy ít ís 33,3% per year
● /uration Rate: the no. of months, ít was used ín one year/12 months,
e.g. íf purchased on month 6, the duratíon rate ís 50%
● Percentage of use: How much ít was used ín a workíng day/month (e.g.
fuííy (100%), or partíaííy (e.g. 50%, 40%, etc)
● Decíaratíon demonstratíng that the acquísítíon of equípment ís necessary
and dírectíy íínked to the pro|ect
Poínts to remember
● Normaííy the purchase of íaptops and personaí computers ís consídered
as índírect cost and not eíígíbíe under ICT costs
● The ICT/equípment cost cíaímed per pro|ect year varíes dependíng on the
annuaí deprecíatíon rate appíícabíe (normaííy 1/3) as weíí as on the % of
use of thís equípment was used ín the pro|ect. e.g. an Interactíve
Whíteboard wíth a cost of 2000 EURO was purchased on month 3 for the
pííot traíníng and ín totaí for the 1st year of the pro|ect ít was used for
50% duríng the 10 remaíníng months tííí the end of 1st year. Thus, the
totaí eíígíbíe cost to be cíaímed ís: 2000*1/3*(10/12)*50%=833 EUR can
oníy be cíaímed for the Interactíve Whíteboard at the ñnancíaí report for
the 1st year.
● Deprecíatíon ís appííed accordíng to the natíonaí accountíng ruíes for the
purchase of any equípment beíow a specíñc threshoíd. e.g. ín Greece,
any equípment wíth purchase príce beíow 1500 EUR ís not sub|ect to
deprecíatíon, or for software purchases there ís no deprecíatíon
Subcontractíng
● Expendíture made to an externaí organísatíon who ís not a member of
the partnershíp that carríed out a specíñc and íímíted pro|ect actívíty,
must be íncíuded ín the wSub-contractíngw cost category.
● Sub-contractíng actívítíes may íncíude transíatíon, ínterpretíng, and
© NSF CYBERALL ACCESS, Suppíementary Notes to míndmaps
príntíng servíces, carríed out by externaí organísatíons who are not
members of the pro|ect partnershíp.
● Thís expendíture ís oníy admíssíbíe when the personneí of the partner
organísatíons does not possess the necessary skííís/resources to carry out
the actívíty ín questíon.
Subcontractíng Condítíons
● It ís not possíbíe to sub-contract any of the fundamentaí pro|ect actívítíes
so as not to dístort the concept of the partnershíp.
● So, the beneñcíary cannot sub-contract the entíre management and
generaí admínístratíon of the pro|ect and none of the partners can sub-
contract aíí or a íarge part of the actívítíes assígned to them.
● Generaííy, the foííowíng ruíes regardíng procurement may appíy to:
● Contracts wíth a vaíue .elo" 012.122 can be paíd on a presentatíon of
an ínvoíce;
● Contracts wíth a vaíue between 012.122 and 021.222 are sub|ect to a
procedure ínvoívíng at íeast three tenderers;
● Contracts between 021.222 and 032.222 are sub|ect to a procedure
ínvoívíng at íeast ñve tenderers;
● For contracts of a vaíue over w60.000, natíonaí ruíes wíth regard to
procurement appíy.
● N.B. As a rule of good practice, you are strongly advised to apply a
procedure involving at least three tenders/ofers in all the cases so as to
ensure the Economic from the ENA rule.
Subcontractíng Requírements
For sub-contracted actívítíes the pro|ect coordínator shouíd draw up an
agreement wíth the sub-contractor.
The agreement shouíd íncíude the foííowíng ínformatíon:
● Type of sub-contract
● Start date and end date of the sub-contract
● Sum to be paíd
● Detaííed descríptíon of the costs
● Work programme or phases
● Payment procedure (totaí sum, spread out etc,)
● Penaíty cíauses ín the case that the agreement ís not respected
Poínts to remember
● Sub contractíng costs shouíd be |ustíñed usíng:
© NSF CYBERALL ACCESS, Suppíementary Notes to míndmaps
● Mínímum number of ohers as resuít from the caíí for tenders
● Contract wíth the specíñed detaíís
● Invoíce
● Proof of Payment (í.e. bank statement)
● Usuaí Subcontractíng Servíces:
● Externaí quaííty evaíuatíon
● Transíatíon Servíces
● Deveíopment of a websíte
● Deveíopment of an eLearníng píatform
● Organísatíon of Servíces
● Productíon (desígn and príntíng) of díssemínatíon materíaí
● Subcontractíng expendíture ís oníy admíssíbíe when the personneí of the
partner organísatíons does not possess the necessary skííís/resources to
carry out the actívíty ín questíon.
Other Costs
Other costs whích are not íncíuded ín the prevíousíy mentíoned categoríes may
aíso be consídered admíssíbíe,
Other Costs |ustíñcatíon
Other Costs cíaímed shouíd be

● necessary for the pro|ect actívítíes
● for a reasonabíe sum of money
● |ustíñed wíth suítabíe admínístratíve documents
● not íncíuded ín any other cost category
Other Cost exampíes
Exampíe of wOther Costsw:
● Pubíísh of Press reíeases
● Purchase of copyríght and protectíon of Inteííectuaí Property Ríghts
● Purchase of ínformatíon materíaís (e.g. books; studíes; eíectroníc data)
● Conference fees
● Rentaí of exhíbítíon spaces
● Príntíng of díssemínatíon materíaí (Notíce the díherence wíth
subcontractíng - desígn and príntíng)
● cateríng costs for a díssemínatíon event
● Interpretatíon Servíces for a díssemínatíon event
© NSF CYBERALL ACCESS, Suppíementary Notes to míndmaps
Indírect Costs
● Communícatíon costs (phone bííís, Internet, postage, etc)
● Infrastructure costs (rent, eíectrícíty, utííítíes, etc)
● Consumabíes (omce suppííes, photocopíng, etc)
● Operatíonaí stah (Accountíng, íegaí department, securíty, etc)
Prespecíñed overhead rate
In most of the cases, the overhead ís specíñed ín advance by the
workprogramme caíís of proposaís. It ís normaííy up to a maxímum % (e.g 7%,
20%, or even up to 60% ín some programmes) of the dírect costs except of the
subcontracts. (Can you understand why?)
Pre-agreed overhead rate
There are some programmes (e.g ín FP7) and caíís for proposaís that aííow the
organísatíon to caícuíate the actuaí percentage of overheads that are
appíícabíe for the operatíon of theír organísatíon and |ustífy ít by theír audítors.
In thís way, there are some bíg organísatíons that can cíaím even 110%!
overhead rate ín theír pro|ects.
Líst of 10 most common místakes
1. Costs cíaímed not íínked to pro|ect and not substantíated
● They must be supported by proper documentatíon
● They must be íínked to the funded pro|ect
● Neíther budgeted, nor estímated amounts
2. Sub-contractíng
● If thís ís not the case then send an amendment request to
theCommíssíon
● Subcontractíng between partners of the consortíum ís notaííowed
3. Deprecíatíon
● Deprecíate durabíe equípment over íts usefuí íífe
● Spread the cost over the duratíon of the pro|ect
● Do not charge any resíduaí vaíues
Image
https://docs.googíe.com/a/cyberaíí-
access.com/ñíe/d/0B4ysíeíSríZ0díhkW|ZuR2dxTDg/edít?usp=drívesdk
4. Indírect Cost Modeí
actuaí índírect costs
There are some EC programmes such as ín Research Programmes that actuaí
índírect costs shouíd be cíaímed under specíñc condítíons.
● ífa fuíí cost accountíng system ís used then índírect costs cíaímed mustbe
actuaí (neíther estímated nor budgeted) and íínked to the pro|ect
● If theactuaí índírect costs can not be estabííshed then use a ñat rate
© NSF CYBERALL ACCESS, Suppíementary Notes to míndmaps
forchargíng índírect costs to the pro|ect ( 20% or 60% dependíng on
thestatus of the organísatíon)
ñat rate of índírect costs
In the ma|oríty of the programmes, sínce there are dímcuítíes ín ídentífyíng the
actuaí índírect costs (e.g. overheads) a ñat rate ís used that ís normaííy up to
7% to the budget or to |oínt cost categoríes.
5. Indírect costs íneíígíbíe ítems
Ineíígíbíe ítems from the pooí of índírect costs shouíd be removed.
● Marketíng & saíes costs
● Fínancíng costs
● Exchange rate íosses
● Costs wíth no reíatíonshíp to the pro|ect
6. Personneí costs
Estabíísh a correct houríy rate, í.e.
7. Hours charged to the pro|ect
Do not charge tíme when:
● The person ís on íeave
● Attendíng conferencesunreíated to the pro|ect
● ensure a reííabíe tíme-recordíng for aíí empíoyees charged ín your EC
pro|ects
● Sígn and have the tíme charged approved
8. Use of average personneí cost
In some programmes and hopefuííy more ñexíbíe ín the new programmíng
períod 2014-2020, ít can be permítted to use average personneí costs for the
caícuíatíon of stah costs.
● They reñect the usuaí cost accountíng practíce declared .y te
.ene4ciary
● They are based on actual personneí costs as regístered ín the statutory
accounts ("itout estimated or .udgeted elements)
● They excíude ineligi.le cost items and any costs cíaímed under other
cost categoríes (toavoíd doubíe fundíng of the same costs)
● The num.er of productíve hours corresponds to usual management
#ractice
9. Saíaríes of SME owners
In order to avoíd confusíon and make thíngs more compíex, SME owners may
choose to pay themseíves a saíary (for theír ínvoívement ín the pro|ect) based
on the ERA ruíe and cíaím thís saíary as a cost under the EC pro|ect. Thís ís the
preferred and most common soíutíon.
10. VAT
© NSF CYBERALL ACCESS, Suppíementary Notes to míndmaps
VAT ín the ma|oríty of the programmes ín case ít ís not recoverabíe, ís eíígíbíe.
1. !nderstanding the fnancial reporting
1.5.1 Financial guide.oo!
The 4nancial $administrati)e% guide.oo! ís normaííy contaíned ín the
"uide for Applicants document at the Call for Proposals Sectíon.
1.5.2 Administrati)e and Financial Manual
https://docs.googíe.com/open?
íd=0B4ysíeíSríZ0ZGU3ZWI1MTItMTV|MC00Z|hmLWI3NzOtZ|MxNTU3ODdhZTdh
The Administrati)e and Financial Manual may change from year to year
and concerns european pro|ects that have been approved at a specíñc year.
1.5.5 Te contract "it co-funded autority
In príncípíe any contract sígned ís of paramount ímportance but aíí of them
shouíd íncíude usuaííy as annex, the ñnancíaí príncípíes appííed ín your pro|ect.
1.5.6 +nternal or .ilateral agreement
Any ínternaí agreement wíthín the consortíum or bííateraí one between the
coordínator and each pro|ect partner
1.5.1 Te #roject a##lication
The a##lication submítted requestíng some fundíng from the European
Commíssíon as soon as the pro|ect ís accepted, ít becomes part of the contract,
unaítered or wíth some changes after negotíatíons.
1.5.3 Financial Re#ort
https://docs.googíe.com/open?
íd=0B4ysíeíSríZ0MzZíNGIzZTMtODU5NS00YWZ|LTkzMTMtYWEzOWI2YTZkNDI1
In order to |ustífy your expendíture, you shouíd ñíí ín the Fínancíaí Report Form
and encíose aíí the requíred documents. Check íínk for an exampíe
1.# Financial Principles for the ne$ programming period
2%1#&2%2%
Proposaís for the successfuí fundíng programmes
1.6.1 Reference Material
Commíssíon Proposaí on MFF 2014-2020 (|uíy 2012)
http://ec.europa.eu/budget/mh/commíssíon-proposaís-for-the-muítíannuaí-
ñnancíaí-framework-2014-2020/índex_en.cfm
1.6.2 (im#li4cation
Shorter payment deadíínes
Tíme-to-grant target and índícatíve deadííne
© NSF CYBERALL ACCESS, Suppíementary Notes to míndmaps
Caíís for proposaís wííí índícate the date when communícatíng the evaíuatíon
resuíts to appíícants. Normaííy thís date must faíí wíthín síx months of the
cíosure of the caíí. It wííí aíso índícate the date for concíudíng the grant
agreements (or notífyíng the grant decísíons) to successfuí appíícants.
Normaííy thís date must faíí wíthín three months foííowíng the communícatíon
of the evaíuatíon resuíts.
Muítí-annuaí work programs
Aboííshíng the obíígatíon to generate ínterests on 'pre-ñnancíng' and to return
the ínterest
There wííí no íonger be an obíígatíon to generate ínterest on pre-ñnancíng paíd
to grant beneñcíaríes to províde them wíth cash for the actíon. Even íf ínterest
ís generated, ít ís not due to the EU, neíther ís ít counted as revenue of the
pro|ect.
Shíftíng the emphasís of the grant system from reímbursíng cost cíaíms to
payments for the deíívery of resuíts: íump sums, ñat rates, unít costs
In most cases, EU grants are reímbursements of a share of the actuaí costs
íncurred by the beneñcíary, whích ímpííes tíme consumíng paperwork both for
the beneñcíary, who must ítemíse aíí expendíture, and the Commíssíon, whích
then has to check the pro|ect not oníy agaínst the deíívery of the resuíts, but
aíso agaínst the eíígíbíííty of aíí the costs cíaímed.
The símpííñcatíon concerns maíníy the aíternatíves to actuaí costs, í.e. íump
sums (payments agaínst deíívery), ñat rates (percentages to cover certaín
categoríes of costs) and unít costs (rates per unít, such as per person per day):




Líghter admínístratíve requírements for a íarger group of íow-vaíue grants
Beneñcíaríes appíyíng for grants of up to EUR 25,000 are aíready exempt from
submíttíng certaín documents. Thís threshoíd wííí be raísed to EUR 60,000.
No guarantees on pre-ñnancíng can be asked for such grants; íegaí status of
the beneñcíary as weíí as the ñnancíaí and operatíonaí capacíty wííí have to be
demonstrated by a decíaratíon of honour wíthout the necessíty to províde
supportíng documents, and no certíñcatíon wííí be requíred that the beneñcíary
ís not ín an excíusíon sítuatíon. Aíso, for such grants, the non-proñt príncípíe
does not appíy.
Further símpííñcatíon and ñexíbíííty ín the grant ruíes
At the moment the so-caííed cascadíng grants (or sub-grantíng, í.e. grants
awarded by a grant beneñcíary) are capped by a maxímum threshoíd for the
totaí grant amount that can be sub-granted, thus íímítíng the scope for takíng
on board partners wíth specíñc expertíse who had not been ídentíñed at the
begínníng. Thís cap wííí be aboííshed.
The current ruíe that VAT can be made eíígíbíe íf ít ís not recoverabíe under VAT
íegísíatíon ís, ín príncípíe, kept. In addítíon, pubííc bodíes wííí be aííowed to
íncíude VAT as eíígíbíe ín actíons ín whích they do not engage as pubííc
authorítíes.
The deñnítíon of proñt ín a grant ís cíaríñed, takíng ínto account díscussíons
© NSF CYBERALL ACCESS, Suppíementary Notes to míndmaps
wíth stakehoíders. Proñt ís deñned as the surpíus of receípts of an actíon over
íts eíígíbíe costs. The Commíssíon wííí oníy recover the share of the proñt that
corresponds to the EU's share ín fundíng the actíon.
The ruíes on ín-kínd contríbutíons, whích can be used to demonstrate co-
ñnancíng, are rendered more usabíe, ín partícuíar for grants beíow EUR 60,000.
Procurement
The procurement ruíes are generaííy based on the EU Procurement Dírectíves.
Therefore, the scope for changes ís rather íímíted:



Good admínístratíon and redress
Good admínístratíon, as expressíy províded now ín the new Fínancíaí
Reguíatíon, ímpííes that proposaís or tenders where documents are míssíng or
are uncíear shouíd not be re|ected ríght away. The appíícant ís gíven the
opportuníty to suppíy the míssíng píeces or províde cíaríñcatíons. However, thís
may not íead to a modíñcatíon of the proposaí or tender.
Exampíes on the símpííñcatíon of the ñnancíaí framework 2014-2020
http://ec.europa.eu/budget/expíaíned/budg_system/ñn_fwk1420/símpííñcatíon/s
ímpííñcatíon_en.cfm
1.6.5 Accounta.ility
Member States to take more responsíbíííty for theír management of EU funds
Artícíe 317 of the Treaty on the Functíoníng of the EU obííges Member States to
cooperate wíth the Commíssíon ín ímpíementíng the EU budget. Up to 80% of
the EU budget expendíture ís managed by Member States under so-caííed
shared management ín areas such as agrícuíture, growth and empíoyment aíd
to EU regíons (structuraí funds). In agrícuíture, natíonaí payíng agencíes gíve
formaí assurance for the EU money they spend through annuaí management
decíaratíons. Thís has heíped to reduce the scope for errors.
Further measures to strengthen accountabíííty, sound ñnancíaí management
and protectíon of EU ñnancíaí ínterests
Provísíons on índírect management where Member States' natíonaí agencíes,
thírd countríes, ínternatíonaí organísatíons or other authorísed bodíes
ímpíement EU funds wííí be harmonísed and streamííned.
When desígníng controí measures, the Commíssíon wííí take ínto account the
costs of controí, but aíso the potentíaí to símpíífy the ruíes and hence to
decrease error rates.
Where ít ís expected that errors díscovered through checks of certaín actíons
performed by a beneñcíary can be found ín other símííar actíons by the same
beneñcíary, the ñndíngs on such errors can be appííed to these símííar actíons
as weíí. Thís can íead to further recoveríes and provídes a stronger íncentíve to
compíy wíth EU fundíng ruíes.
Provísíons on conñíct of ínterests and whístíe-bíowíng are ad|usted.
EU cíaíms wííí receíve the same treatment as equívaíent cíaíms of Member
States ín bankruptcy proceedíngs.
In order to further deter the mísuse of EU funds, decísíons on penaítíes for such
© NSF CYBERALL ACCESS, Suppíementary Notes to míndmaps
mísuse can henceforth be pubííshed.
1.6.6 +nno)ation
IT Tooís
Leveragíng EU funds by ñnancíaí ínstruments
Fínancíaí ínstruments, í.e. support measures ín the form of íoans, equíty
partícípatíons íncíudíng rísk capítaí or guarantees, exíst and contríbute
sígníñcantíy to the EU's poíícy ob|ectíves.
Prízes
Pubííc-prívate partnershíps (PPPs)
Deñnítíon of PPPs
PPPs descríbe a form of cooperatíon between the pubííc authorítíes and
economíc operators. The prímary aíms of thís cooperatíon are to fund,
construct, renovate or operate an ínfrastructure or the provísíon of a servíce.
PPPs are present ín sectors such as transport, pubííc heaíth, educatíon, natíonaí
securíty, waste management, and water and energy dístríbutíon. At European
íeveí, they heíp ímpíement the European Inítíatíve for Growth and trans-
European transport networks.
EU Trust Funds
Trust funds ín externaí actíon are funds pooíed from a number of donors, ín
partícuíar the EU, íts Member States, thírd countríes, ínternatíonaí
organísatíons or prívate donors such as cítízens to províde support to agreed
ob|ectíves. These can have athematíc, e.g. reíatíng to the ñght agaínst a
certaín dísease, orgeographícoríentatíon. They can aíso focus on provídíng
reííef ín cases of urgency, such as a naturaí dísaster.
The new Fínancíaí Reguíatíon wííí aííow the EU to estabíísh such trust funds.
They wííí be managed by the Commíssíon and ímpíemented at accountabíííty
standards as hígh as those appíícabíe to the EU budget. They wííí be governed
by a constítutíve act reñectíng the agreement of the donors on the ob|ectíves
and management of the EU Trust Fund.
1.' Fundamentals on European (ommission Auditing
1.1.1 Reference material
Performance Audít Manuaí
http://eca.europa.eu/portaí/pís/portaí/docs/1/21934816.PDF
Ethícs Matter - Practícaí Mícro-Ethícs for Cívíí Servants of the European Uníon
http://eca.europa.eu/portaí/pís/portaí/docs/1/7890724.PDF
FP7 - how to avoíd common errors ídentíñed ín cost cíaíms
http://ec.europa.eu/research/fp7/pdf/avoídíng-
errors/note_beneñcíaríes.pdf#víew=ñt&pagemode=none
The FP7 Audít Strategy ín Research and Innovatíon
Fínancíaí and Compííance Audít Manuaí
http://eca.europa.eu/portaí/pís/portaí/docs/1/14764740.PDF
© NSF CYBERALL ACCESS, Suppíementary Notes to míndmaps
1.1.2 Aim of te on-te-s#ot audit
1.1.5 7o is mainly su.ject to on-te-s#ot audit
Contractors receívíng the íargest amount of grants
Any organísatíon, seíected randomíy based on a representatíve sampíe
Organísatíons seíected on a rísk-based approach
Organísatíons that there ís hígh rísk to present errors (e.g. NGOs, non-proñt
organísatíons and ín generaí organísatíons wíth no shown capacíty to present
sound ñnancíaí management of sígníñcant european pro|ects. Note, that audít
resuíts have shown that most errors are to be found ín personneí and índírect
costs.
1.1.6 *um.er of Audits $on-te-s#ot%
Audíts ín generaí have been sígníñcantíy íncreased. For exampíe ín Research
pro|ects ín totaí around 1230 on-the-spot audíts have been conducted for the
ñnancíaí períod 2000-2006 and for the períod 2007 - 2013 around 112 on-te-
s#ort audits #er year.
1.1.1 8y "om
● The &ommission (íts own departments - íncíudíng OLAF - or by any of
íts duíyauthorísed representatíves (íncíudíng external auditors
a##ointed by the Commíssíon).
● The Euro#ean &ourt of Auditors (by íts own departments or by any of
íts duíy authorísed representatíves).
Audíts by EC audítors
● Approx. 1/3 of audíts
● Specíñc audíts (foííow-up, requests, .)
Audíts by Contracted ñrms
● Approx. 2/3 of audíts
● Supervísíon of the audít by EC servíces
1.1.3 7en
Common Cíauses ín contracts
1.1.9 Audit Ty#es
Correctíve Audíts
● Wíde audít coverage
● Identífy and correct errors ín the most cost-ehectíve way possíbíe
● ´Cíean´ mín. 50% of budget from systematíc materíaí errors
● Long-term preventíon of íssues found (´ñxíng the future´)
© NSF CYBERALL ACCESS, Suppíementary Notes to míndmaps
● Fraud detectíon and preventíon
Other Types (system, scíentíñc/technícaí)
● Verífy compííance wíth certíñed methodoíogíes
● Identífy and correct systemíc probíems
● Províde addítíonaí assurance on specíñc parts of the budget
● Compíement scíentíñc audíts
Representatíve audíts
● Sampíe síze 161 = 95% conñdence íeveí, 2% expected error rate, 5%
materíaííty threshoíd
● Fínancíaí Statements as sampííng unít
● Sampíes from the whoíe popuíatíon of each DGs and EA
1.1.: 7at is )eri4ed;
In Technícaí Audíts
In Fínancíaí Audíts
1.1.< Audit Processes
1. Audít Strategy and Seíectíon
2. Píanníng and Preparatíon for the audít
● Inítíaí contact by the responsíbíe audítor approx. 2 month before
examínatíon on síte to agree on dates and íogístícs
● Coííectíon of audít ínformatíon (ínternaí and externaí)
● Formaí Announcement íncíudíng detaííed annex on ínformatíon and
documentatíon to be províded: a)príor to the audít examínatíon on síte
and b)at the tíme of the audít examínatíon
Requested Documents for the audít
Legaí basís
● !ee# te originals= or in exce#tional cases= "ere te national
legislation acce#ts or contem#lates tis #ossi.ility= duly
autenticated co#ies > including electronic co#ies > of all
documents relating to te grant agreement for u# to 4)e years
from te end of te #roject.
● ensure that the Commíssíon's servíces, and/or any externaí body(íes)
authorísed by ít, haveon-the-spot access at aíí reasonabíe tímes, notabíy
to the beneñcíary's omces where the pro|ect ís beíng carríed out, to íts
computer data, to íts accountíng data and to aíí the ínformatíon needed
to carry out those audíts, íncíudíng ínformatíon on índívíduaí saíaríes of
persons ínvoíved ín the pro|ect. They shaíí ensure that the ínformatíon ís
readííy avaííabíe on the spot at the moment of the audít and, íf so
© NSF CYBERALL ACCESS, Suppíementary Notes to míndmaps
requested, that data be handed over ín an appropríate form.
● ma!e a)aila.le directly to te &ommission all te detailed data
tat it may re?uest=
● ensure that the ríghts of the Commíssíon and the European Court of
Audítors to carry out audíts are extended to the ríght to carry out any
such audít or controí on any thírd party whose costs are reímbursed ín fuíí
or ín part by the EC contríbutíon, on the same terms and condítíons.
Supportíng Documentatíon Requested
A. Generaí Informatíon about the Contractor
Príor
1. Contractor's íegaí regístratíon (such as trade regíster abstract)
2. Organísatíon chart wíth ííst of key omcers
3. Fínancíaí statements of the íast ñve years together wíth the statutory
audítors report (íf appíícabíe)
Incíudíng generaí baíance ín Exceí format
4. Contractor's accountíng poíícíes
5. Descríptíon of cost/proñt centre structure (wíth an índícatíon where the
actíon ís carríed out)
6. Líst of personneí to the cost/proñt centres as referred to ín poínt above
7. Contractor's guídeíínes/procedures for the ñnancíaí management of EC
contracts (íf appíícabíe)
8. Líst of aíí other EC fundíngs receíved and aíí contracts (both cíosed and ín
progress) sígned wíth the Commíssíon from 2000 to today)
The ídea ís índeed to have a compíete víew of aíí the (sub-)contracts wíth the
ínstítutíons, agencíes, ... of the European Uníon. It ís therefore ímportant to
properíy state aíí contracts, even íf you are not the príme contractor but oníy a
subcontractor. You cíearíy need to state the posítíon of the organísatíon ín thís
context.
9. Líst of systems used to manage the pro|ects
10. Líst of Authorízed sígnatures
11 VAT regístratíon
12. Regístratíon wíth the natíonaí authorítíes as a non-for-proñt organísatíon (íf
appíícabíe)
B. Receípt and dístríbutíon of Commíssíon ñnancíaí contríbutíon
C. Pro|ect Management ínformatíon
Not príor and no copy requíred
1. Períodíc actívíty and management reports
2. Report on the dístríbutíon of the Communíty ñnancíaí contríbutíon
3. Períodíc/míd-term revíews
4. Oníy appíícabíe to research pro|ects the annuaí updates
5. Other non-ñnancíaí deííverabíes specíñed ín the Annex 1 to the contract
(wíth date of submíssíon to the Commíssíon and of Commíssíon's approvaí)
6. Contract amendments (wíth date of request to the Commíssíon)
D. Generaí Fínancíaí Documents
Príor
1. Detaííed Breakdown of costs supportíng the Fínancíaí Forms submítted to the
Commíssíon per cost categoríes
© NSF CYBERALL ACCESS, Suppíementary Notes to míndmaps
https://docs.googíe.com/ñíe/d/0B4ysíeíSríZ0U3R2ZndNVFhaNE0/edít?
usp=sharíng
Pro|ect
Períod
Períod Dates
Actívíty
Dírect or Indírect
Cost Category
Personneí or traveí or Equípment, or Subcontractíng or other or overhead
Províder
Cost Descríptíon
Accountíng account
e.g. for personneí 62XXX
Accountíng date
Payment date
Cost unít
e.g. hour, unít, months, % ín overheads, etc
CUR-Currency
e.g. GBP, EUR, etc
Cíaímed Ouantíty ín uníts
Cíaímed amount per unít ín CUR
Cíaímed totaí amount ín CUR
Exchange Rate
Cíaímed totaí amount ín EUR
Comment
2. Generaí Ledger as extracted from the accountíng system to be used for
reconcíííatíon purposes as referred to ín 1 above
3. Breakdown of costs or basís for caícuíatíon supportíng the estímate of
índírect costs rate communícated to the Commíssíon (ín the budget)
If appíícabíe, sínce ín pro|ects or partners the índírect cost ís based on a max
ñxed rate.
4. Breakdown of receípts of the pro|ect (where appíícabíe)
5. Agreements for thírd party resources
For thírd party resources as ídentíñed ín Annex I to the contract, the agreement
estabííshed between the contractor and the thírd party príor to íts contríbutíon
to the pro|ect.
E. Supportíng documents for personneí costs (íncíudíng ín-house consuítants, íf
any)
Príor
1. Contractor's ínternaí guídeíínes/procedures for tíme recordíng foííow-up (íf
avaííabíe)
2. Líst of aíí personneí ínvoíved ín the pro|ect actíon índícatíng períod(s) they
worked for the pro|ect as weíí as posítíon cíassíñcatíon/category
3. Caícuíatíon of reíated charges (socíaí charges such as pensíon, síckness,
unempíoyment, etc) accordíng to natíonaí íegísíatíon
Usuaííy, the personneí costs, partícípant shouíd íncíude not oníy the saíary
ítseíf but aíso addítíonaí charges such as the empíoyer's socíaí securíty
contríbutíons or any símííar personneí cost born by the empíoyer. In accordance
wíth generaí condítíons of european contracts, these costs must be actuaí and
© NSF CYBERALL ACCESS, Suppíementary Notes to míndmaps
EC audítors need to coííect the evídence ín reíatíon wíth these costs. The
request ís thus to put the supportíng documentatíon at theír dísposaí.
4. Caícuíatíon of houríy rates (í.e. gross remuneratíon píus reíated charges) for
aíí personneí categoríes/pro|ect personneí
5. Certíñed tíme records (or any other controí documents dírectíy attríbutíng
personneí costs to the audíted pro|ect) for aíí pro|ect personne ínvoíved ín the
pro|ect actíons
6. (Standard) Productíve hours caícuíatíon (íf appíícabíe)
Not príor
7. Empíoyment contracts for aíí (permanent and temporary) pro|ect personneí
8. Payroíí/Saíary sííps for aíí pro|ect personneí (whoíe períod of pro|ect duratíon)
9. Bank statements showíng amount and date of bank transfer/payment
receípts - no copy requíred
Regardíng the bank statements, the EC audítors need to ensure that these
costs were actuaííy íncurred and paíd out by the organísatíon. They therefore
need to have at theír dísposaí the bank statements of the organísatíon.
F. Supportíng documents for durabíe equípment
The exístence and use for the pro|ect may be checked duríng the audít míssíon
Príor
1. Contractor's ínternaí guídeíínes/procedures for procurement of durabíe
equípment (íf avaííabíe)
2. Contractor's vaíuatíon ruíes for accountíng treatment of durabíe equípment
3. Líst of aíí acquísítíons on retírement of durabíe equípment
Non Príor
4. Purchase orders for durabíe equípment - no copy requíred
5. Orígínaí ínvoíces to purchase of equípment
6. Voucher/Expense account of accountíng entríes
7. Bank statements showíng amount and date of payments
8. Inventory regíster or ñxed asset regíster/íedger for the durabíe equípment
reíated to the pro|ect
9. Deprecíatíon tabíe showíng the gross book vaíue of the durabíe equípment,
the addítíons and retírements, the deprecíatíon rate and the deprecíatíon
charge per períod
10. In case of rented equípment: rentaí contract, ínventory ííst of rented
equípment, and caícuíatíon of íeasíng and/or rented charges
11. Equípment's usage díary/regíster (for equípment used by díherent pro|ects)
G. Supportíng documents for subcontractíng
Príor
1. Contractor's ínternaí guídeíínes/procedures for procurement of
servíces (where appíícabíe)
2. Bríef descríptíon of servíces províded by subcontractors and/or
thírd party resources ín the context of the funded Pro|ect actíon.
3. Sígned orígínaí copíes of agreements wíth subcontractors and/or
thírd party resources (íncíudíng technícaí annexes)
4. Request and Commíssíon approvaí of subcontractíng (where
requíred)
Non Príor
5. Orígínaí ínvoíces for externaí assístance
6. Evídence of deíívery or servíces províded
© NSF CYBERALL ACCESS, Suppíementary Notes to míndmaps
7. Voucher/Expense account of accountíng entríes
8. Bank statements showíng amount and date of payment
H. Supportíng documents for traveí and subsístence
Príor
1. Contractor's ínternaí guídeíínes/procedures for reímbursement of
traveí expenses (where appíícabíe)
2. Líst and dates of tríps by pro|ect personneí
Non Príor
3. Authorísed traveí request forms, íf appíícabíe No
4. Commíssíon approvaí for any destínatíon outsíde the terrítory of
the Member States, the Assocíated states or a thírd country where
a contractor ís estabííshed, uníess such a destínatíon ís províded
for ín Annex I (where appíícabíe)
5. Orígínaí ínvoíces for traveí and accommodatíon expenses
6. Voucher/Expense account of accountíng entríes
7. Bank statements showíng amount and date of payment
I. Supportíng documents for consumabíes
Príor
1. Contractor's ínternaí guídeíínes/procedures for procurement of
consumabíes (where appíícabíe)
Non Príor
2. Purchase orders for consumabíes
3. Orígínaí ínvoíces for purchase of consumabíes
4. Voucher/Expense account of accountíng entríes
5. Bank statements showíng amount and date of payment
6. Inventory regíster/íedger (where appíícabíe)
|. Supportíng documents for protectíon of knowíedge
príor
1. Contractor's ínternaí guídeíínes/procedures for costs assocíated to
protectíon of knowíedge (where appíícabíe)
2. Caícuíatíon of the actuaí costs necessary for the protectíon of
knowíedge
non príor
3. Invoíces for fees to the competent authorítíes and/or advísers
4. Voucher/Expense account of accountíng entríes
5. Bank statements showíng the amount and date of payment
K. Supportíng documents for management of consortíum actívítíes
Príor
1. Descríptíon of the actívítíes carríed out ín the context of the
management of the consortíum
2. Breakdown of the management costs decíared, cíassíñed by
actívíty
3. Voucher/Expense account of accountíng entríes
4. Bank statements showíng amount and date of payment (when
coordínator)
Non Príor
L. Supportíng documents for other dírect costs
Príor
1. Contractor's ínternaí guídeíínes/procedures for purchase of other
© NSF CYBERALL ACCESS, Suppíementary Notes to míndmaps
dírect costs (where appíícabíe)
2. Caícuíatíon of the actuaí costs (íf appíícabíe)
Non Príor
3. Orígínaí ínvoíces for purchase of other dírect cots
4. Voucher/Expense account of accountíng entríes
5. Bank statements showíng amount and date of payment
M. Supportíng documents for índírect costs
Thís ís appíícabíe oníy ín cases that a specíñed ín advance 4xed o)eread
rate as not .een contracted.
Príor
1. Descríptíon of the methodoíogy used for the caícuíatíon and
aííocatíon of índírect costs (íncíudíng anaíysís of the cost
categoríes íncíuded ín the overheads)
2. Reconcíííatíon of the overhead costs wíth the proñt & íoss
accounts (P&L)/generaí íedger
3. Caícuíatíon of (cost centre/pro|ect/personneí) overhead rates
(íncíudíng, where appíícabíe, an anaíysís of the productíve/nonproductíve
hours on the basís of whích índírect costs have been
aííocated)
N. Externaí audít certíñcates (íf appíícabíe)
Normaííy audít certíñcates are requested ín some cases at the research
pro|ects.
Non Príor
1. Orígínaí sígned audít certíñcates índícatíng cíearíy the contractor,
the reíated pro|ects, períod and amounts under revíews
2. Letter of audít engagement/appoíntment sent to externaí audítor
3. Externaí audítor's íetter of acceptance/engagement conñrmatíon
4. Externaí audítor's ínvoíce
5. Bank statements showíng amount and date of payment
3. Examínatíon on síte
Usuaííy wíthín 4-5 workíng days (one week)
1. Openíng Meetíng
Generaí ínfo on:
● Organísatíon
● pro|ects
● ñnancíaí admínístratíon
● ínternaí controí system
● cíaríñcatíon on audít agenda for further days
2. Anaíysís of Systems ín píace, theír testíng and substantíve evídence
Anaíysís of documents and expíanatíon and coííectíon of audít evídence based
on the Audít Process Handbook. Takes the ma|oríty of the week
Beneñcíaríes' obíígatíons
Legaí basís
● keep the orígínaís, or ín exceptíonaí cases, where the natíonaí íegísíatíon
accepts or contempíates thís possíbíííty, duíy authentícated copíes -
íncíudíng eíectroníc copíes - of aíí documents reíatíng to the grant
© NSF CYBERALL ACCESS, Suppíementary Notes to míndmaps
agreement for up to ñve years from the end of the pro|ect.
● ensure tat te &ommission@s ser)ices= andAor any external
.ody$ies% autorised .y it= a)eon-te-s#ot access at all
reasona.le times= nota.ly to te .ene4ciary@s oBces "ere te
#roject is .eing carried out= to its com#uter data= to its
accounting data and to all te information needed to carry out
tose audits= including information on indi)idual salaries of
#ersons in)ol)ed in te #roject. Tey sall ensure tat te
information is readily a)aila.le on te s#ot at te moment of te
audit and= if so re?uested= tat data .e anded o)er in an
a##ro#riate form.
● make avaííabíe dírectíy to the Commíssíon aíí the detaííed data that ít
may request,
● ensure tat te rigts of te &ommission and te Euro#ean &ourt
of Auditors to carry out audits are extended to te rigt to carry
out any suc audit or control on any tird #arty "ose costs are
reim.ursed in full or in #art .y te E& contri.ution= on te same
terms and conditions.
Províde fuíí access to EC to aíí the ínformatíon needed to carry out those audíts,
e.g. saíaríes, to íts computer data, to íts accountíng
Ensure that símííar access by EC ís possíbíe to any thírd partíes whose costs are
reímbursed ín fuíí or ín part by EC
e.g. Thírd Partíes can be subcontractors.
3. Cíosure of meetíng
● Díscussíon of preíímínary ñndíngs and observatíons
● Indícatíon of further audít procedures
4. Report and Audít Cíosure
1. Preparatíon of draft Audít Report
Audít Steeríng Commíttee revíews and revíses the draft audít report and
prepares the ñnaí draft report to be sent to the beneñcíary. It pays specíaí
attentíon on the 4 Cs
● Coherence,
● Compíeteness,
● Correctness and
● Compííance wíth the Audít Handbook
2. Transmíssíon of Draft audít report to beneñcíary
Transmíssíon of Draft audít report to the beneñcíary (after ínternaí
consuítatíons) for comments by the audíted organísatíon.
3. Beneñcíary provídes comments to the draft audít report
Normaííy, a tíme of wíndow of 30 days ís aííowed for provídíng comments
4. EC consíders the comments and ñnaííses the audít report
5. Cíosure of the audít by formaí íetter índícatíng further procedures for
© NSF CYBERALL ACCESS, Suppíementary Notes to míndmaps
ímpíementíng audít resuíts
5. Impíementatíon of Audít Resuíts
Audít Outcomes
No ñndíngs
(oníy) quaííñed recommendatíon
Fínancíaí Ad|ustment
Non-systematíc ñndíng ídentíñed
Correctíon of future payments or recovery by the responsíbíe ñnancíaí servíces
Systematíc ñndíng ídentíñed
The ímpíícatíon of thís type of error ís that the beneñcíary ís not compíyíng ín a
systematíc way wíth hís agreement obíígatíon .
Assum#tionC
Can ímpíy that aíí currentíy open and cíosed agreements under the same
fundíng program are ahected and míght need to be (retrospectíveíy) ad|usted
+m#actC
Extrapoíatíon of audít resuíts
● Common decísíon of aíí DGs whích are concerned by havíng contracts
wíth the organísatíon audíted.
● However, decentraíísed foííow-up of ímpíementatíon of resuíts
● Detaííed formaí Letter of Cíosure of the Audít índícatíng procedures to be
foííowed and íncíudíng a ííst of contracts sub|ect to extrapoíatíon
(consoíídated for aíí reíevant DGs)
● Deíay to hand ín revísed ñnancíaí statements or appropríate expíanatíons
on the íísted contracts
● Foííow-up audíts
Correctíon of future payments or recovery by the responsíbíe ñnancíaí servíces
Generaí Actíons
Fínancíaí ad|ustments admínístered by the operatíonaí EC servíce ín charge of
the pro|ect management (decentraíísed)
Besídes ad|ustments, possíbíííty of ííquídated damages
Consíderatíon of seríous audít ñndíngs (í.e. hígh ad|ustments) ín future pro|ect
and agreement negotíatíons
1.1.12 Audit Timeline
As soon as the partícípants or pro|ects have been seíected for audítíng,
píanníng and preparatíon take píace.
● After around 5 monts, on-the-spot audít/examínatíon takes píace
● After 1-5 monts, reportíng and Audít Cíosure take píace
1.1.11 +nsigts on Audit Findings
Audít Fíndíngs
● 87% of theír ñndíngs are the resuíts of errors
© NSF CYBERALL ACCESS, Suppíementary Notes to míndmaps
● 1% of theír ñndíngs are the resuít of írreguíarítíes
● 4% of theír ñndíngs are the resuít of quaíítatíve (e.g. generaí descríptíon
of cost cíaíms)
● 8% wíth no ñndíngs at aíí (no errors, írreguíarítíes, etc)
Image
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access.com/ñíe/d/0B4ysíeíSríZ0MzNBY|VVVFhGaíE/edít?usp=drívesdk
© NSF CYBERALL ACCESS, Suppíementary Notes to míndmaps