Katarina Gårdfeldt, Göteborg University

www.miljo.chalmers.seGMV – Centre for Environment and Sustainability

How we receive money to the project

- How funds and information flow in

INTERREG III programmes

Katarina Gårdfeldt, Göteborg University


Issues to be addressed

• How do the project get its money?

• What do we need to do for it?

• Audit

• Financial reports

• Progress reports


Reporting / Payment Procedure

Joint Secretariat / PA

Lead PartnerLead Partner submits activity

and audited financial report

Paying Authority effects payment to Lead Partner

Project PartnersSubmit activity and

audited financial reports to Lead Partner

Reports Payments

Lead Partner effects payments to Project Partners

PA - Paying Authority

European Commission

Joint Secretariat / PAsubmit

Payment Request

Europ. Commission effects

payment to PA

Reporting / Payment procedure

Lead Partner

Joint Secretariat

P 1

P 2

P 3

Project Partners

Pre-filled reporting

forms

Reporting periodJan-Jun /Jul-Dec

Project Implementation

1 Sep / 1 Mar Progress Report

PaymentNotificationAfter all open

questions are clarified

PA

AnswersClarification

Check of PR

Preparation of payment PA

Payment


First level control(Project auditors, JS, PA)

Second level control(Task Force Financial Control)

Third level control(winding-up body)

acc. to Art. 4 and 9 of Reg.438/2001

5% checks (sample checks on operations)

Winding-up acc.to Art. 15 ofReg. 438/2001

The levels of financial control


1. Auditor‘s role and tasks

2. Requirements for auditors

3. Auditor certificate of proficiency

4. Procedure – How?

5. Recommendations

6. Confirmation by an independent auditor

7. Country specific provisions

8. How to make it work?

First level controls - Certification of Expenditure

ELIGIBLE?&

RELATED TO THE PROJECT?

NOT ELIGIBLE?NOT RELATED TO THE PROJECT?


AUDITOR‘S ROLE AND TASKSAUDITOR‘S ROLE AND TASKS Certifying the financial expenditure by checking the validity

and the correctness of the invoices

Declaring the proper use of funds (eligibility etc)

Confirming the disbursement of the national pro-rata

co-financing

Confirming that the financial and accounting statements drawn up

by the partners are realiable & the expenditure declared is eligible!

REQUIREMENTS FOR REQUIREMENTS FOR AUDITORSAUDITORS

Independent from the project‘s activities, finances (independent organisational unit)

Familiar with accounting and ERDF rules,especially the rules concerning eligibleexpenditure

It is recommended to use external certified auditors, who are experienced in (transnational) auditing of EU-funded projects

AUDIT GUIDELINES!

INDEPENDENT

QUALIFIED


““AUDITOR CERTIFICATE OF AUDITOR CERTIFICATE OF PROFICIENCY“PROFICIENCY“

New procedure to be applied by the III B JS:

To confirm that all of the partner auditors are familiar with the relevant regulations and rules, project activities, and documents

Being familiar with all the relevant documents; Application form, Programme Manual, Audit Guidelines etc.

Performing on-the-spot checks

Verifying that the activities have actually taken place & goods and services have been delivered to project

Examining invoices and payments

either 100% or by using a sampling method

Checking that the expenditure is reported only once

Recording all the verifications!

PROCEDURE - HOW? PROCEDURE - HOW?


ScanBalt Campus

WORKING HOURS FORM

July 05

Name: Member of Staff

Name: Member of

Staff

Name: Member of

StaffTOTAL

Working Hours1st 02nd 03rd 04th 05th 06th 07 08 09 010 011 012 013 014 015 016 017 018 019 020 021 022 023 024 025 026 027 028 029 030 031 0Total Hours 0 0 0

Date

Signature


Audit Confirmation•"Confirmation of project auditing-PP form" should

be given to the auditors of the individual Project Partners.

•Sign it and submit it to the project's Lead Partner auditor

•The collected forms should be kept within the LP organisation for possible further controls, e.g. by 2nd level auditors, EU Court of Auditors, Commission, national authorities, etc.


Centralised first level controls =

auditing only by the national authorities

LEAD PARTNERS AND PARTNERS FROM

Latvia, Lithuania, Poland

Estonia – for projects approved from January 2005 on

Implications for the practice!

COUNTRY SPECIFIC COUNTRY SPECIFIC PROVISIONSPROVISIONS


www.bsrinterreg.net

See section "How to implement", subsection "Downloads“

• Information on 1st level audit activity in Poland, Latvia, Lithuania and Estonia (section "How to implement", subsection "Auditing")

• Revised Audit Guidelines


Overview of relevant regulations and rules

Council Regulation (EC) No 1260/1999 – on Structural Funds

Commission Regulations (EC):

> No 1685/2000+No 448/2004 – Eligibility of expenditure

> No 438/2001+No 2355/2002, No 448/2001– Management and control systems, Financial corrections

> No 1159/2000 – on information and publicity measure

INTERREG III guidelines

National rules and regulation (national, regional, local level)


Expenditures must be…

- actually paid out by eligible partners within the project period;

- related to the products/services that have actually been delivered;

- directly linked to the approved budget and must not lead to exceeded budgets;

- directly related to the project implementation;

- related to operations that have been subject to Community rules;

- Revenues must be deducted from the reported costs


Expenditures must be…

- not claimed before under this or any other EU financed programme (no double financing);

- supported by relevant documents (invoices, account. documents…)

- properly accounted, certified, audited and reported within the specified period by the responsible bodies to the Joint Secretariat;

- the general principles of efficiency, good value for money, economy, expediency and legality of all actions to be applied;

- included under a category of expenditure listed in the budget


Budget lines1234567

External expertise

Small scale investmentsOther costs and equipment

Travel and accommodationMeetings and disseminationPersonnel (incl. OH)Project co-ordination


Personnel (incl. OH)

• The cost of staff (salaries including tax) directly engaged in the operation (“internal hours”)


Personnel (incl. OH)

• Overheads

e.g. indirect administrative costs such as costs for office accommodation - electricity, rent, insurance, fax, phone, photocopies, Internet fees, heating, water, etc.

=> directly linked to the project activities


Meetings and dissemination

- Costs related to organising and participating in meetings and seminars

- Costs related to all aspects of promotion and publications specific to the project


Travel and accommodation

- costs for: travel, accommodation, subsistence allowances

- related to project activities

- economy class travel on public transport


External expertise

- all payments towards external bodies that realise a temporary and specific work in the frame of the project

-sub-contracting of partners is not possible


Recommendations

Small scale investmentsOther costs and equipment

• Check carefully

=> if all costs are clearly linked to the project, check budget

=> if there is a complete and clear documentation

=> if the calculations are understandable and transparent


Financial reports

The financial report (FR) has to provide information about:

allocated costs per work package (FR I)

used financial sources and the confirmation by an independent auditor (FR II)

other costs, equipment and in kind contribution (FR IIIa)

small scale investments carried out in the reporting period (FR IIIb)

changes of non-eligible budgets

division of eligible expenditures by PP and reporting period/MS


Progress report

• Consists of Activity reports, the basis for monitoring the progress in the project


ACTIVITY REPORT aims to• Monitor progress

• Means of knowing projects and their activities better

• Basis for evaluating project expenses

• Essential part of the project’s auditing, the basis for evaluating the costs


Progress reportActivity Reports

• General information, summary description of the project• Activities and outputs, achievements of the project so

far, • Any changes on the general project • Main co-ordination activities • WP information• Accumulated results • Project implementation status


Good Practice in ScanBalt Campus !

LP will provide a manual to PP containing the following information:

• Time schedule (including dates for financial and progress reports)

• Project-internal documents to be used by all PP (e.g. time sheets, list of invoices, budget lines etc)

• Reporting procedure

• Most important information concerning eligibility of costs


Professional audit routines

Clear financial reporting

Comprehensive progress report

Successful

ScanBalt Campus

Project!


www.bsrinterreg.net

BSR INTERREG III B

Joint Secretariat

Information from this presentation is available on:


This presentation will be available on:

http://www.miljo.chalmers.se/

Thanks for your attention

Katarina Gårdfeldt, Göteborg University

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