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Katarina Gårdfeldt, Göteborg University

How we receive money to the project - How funds and information flow in INTERREG III programmes. Katarina Gårdfeldt, Göteborg University. How do the project get its money? What do we need to do for it? Audit Financial reports Progress reports. Issues to be addressed.

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Katarina Gårdfeldt, Göteborg University

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  1. How we receive money to the project- How funds and information flow in INTERREG III programmes Katarina Gårdfeldt, Göteborg University

  2. How do the project get its money? What do we need to do for it? Audit Financial reports Progress reports Issues to beaddressed

  3. Joint Secretariat / PA submit Payment Request Europ. Commission effects payment to PA Paying Authority effects payment to Lead Partner Lead Partner submits activity and audited financial report Submitactivity and audited financial reportsto Lead Partner Lead Partner effects payments to Project Partners Reporting / Payment Procedure European Commission Joint Secretariat / PA Lead Partner Project Partners PA - Paying Authority Reports Payments

  4. Reporting period Jan-Jun / Jul-Dec Pre-filled reporting forms Project Implementation 1 Sep / 1 Mar Progress Report Clarification Check of PR Answers Payment Notification After all open questions are clarified PA Payment Preparation of payment PA Reporting / Payment procedure Joint Secretariat Lead Partner Project Partners P 1 P 2 P 3

  5. The levels of financial control Winding-up acc. to Art. 15 of Reg. 438/2001 Third level control (winding-up body) 5% checks (sample checks on operations) Second level control (Task Force Financial Control) acc. to Art. 4 and 9 of Reg. 438/2001 First level control (Project auditors, JS, PA)

  6. First level controls - Certification of Expenditure 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?

  7. ELIGIBLE? & RELATED TO THE PROJECT? NOT ELIGIBLE? NOT RELATED TO THE PROJECT?

  8. AUDITOR‘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!

  9. REQUIREMENTS FOR AUDITORS INDEPENDENT Independent from the project‘s activities, finances (independent organisational unit) QUALIFIED Familiar with accounting and ERDF rules, especially the rules concerning eligible expenditure It is recommended to use external certified auditors, who are experienced in (transnational) auditing of EU-funded projects AUDIT GUIDELINES!

  10. “AUDITOR CERTIFICATE OF 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

  11. 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?

  12. 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.

  13. COUNTRY SPECIFIC PROVISIONS 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!

  14. 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

  15. 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)

  16. 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

  17. 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; • includedunder a category of expenditure listed in the budget

  18. Budget lines

  19. The costof staff (salaries including tax) directly engaged in the operation (“internal hours”) Personnel (incl. OH)

  20. 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

  21. 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

  22. Travelandaccommodation • costs for: travel, accommodation, subsistence allowances • related to project activities • economy class travel on public transport

  23. Externalexpertise • 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

  24. Recommendations Smallscaleinvestments Other 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

  25. Financial reports Thefinancial 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

  26. Consists of Activity reports, the basis for monitoring the progress in the project Progress report

  27. 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

  28. Activity 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 Progress report

  29. 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 Good Practice in ScanBalt Campus !

  30. Professional audit routines Clear financial reporting Comprehensive progress report Successful ScanBalt Campus Project!

  31. www.bsrinterreg.netBSR INTERREG III BJoint Secretariat Information from this presentation is available on:

  32. http://www.miljo.chalmers.se/ Thanks for your attention This presentation will be available on:

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