Financial Management and Auditing

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• Financial Management and Auditing
• Reporting by the Lead Partner
• 3rd round operations
• Rostock, 03.02.2005
• Elise Oukka

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Reporting by the Lead Partner

• TWO KINDS OF REPORTS TO THE JTS
• Preparation cost report
• Progress report
• In addition the LP has to ensure the proper
  financial management of the whole operation
  (monitoring constantly and carefully the partner
  budgets activities)!

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Reporting by the Lead Partner
INTERREG IIIC NORTH
The JTS checks the report and if needed will
ask further details. When the report is approved,
the payment will be executed to the LP.
check
check
The Lead Partner checks the partner reports and
compiles one joint Progress report ( Activity
and audited financial report) on all costs of the
operation and sends it to the Managing Authority
(MA)/JTS.
Partner
Lead Partner
Partner
Partner
All the partners submit an audited report to the
LP on their own costs
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Reporting by the Lead Partner
INTERREG IIIC North
check
Every six monthsRFO Activity and audited
financial report to the MA/JTS
Activity and audited financial report concerning
the own activities and expenditure to RFO Lead
partner
Lead Partner
Regional Partner
Regional Partner
check
AUDITING
Activity and audited financial report to RFO level
check
Lead participant
Lead participant
Lead participant
Activity and audited financial report to Lead
Participant
Pt
Pt
Pt
Pt
Pt
Pt
Pt
Pt
Pt
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Financial Reporting
The reported expenditure

• has to be paid out during the reporting period

• has to be eligible
• INTERREG IIIC rules, EU rules, national rules

• has to be assigned to the correct budget line
• CHECK the current budget status does budget
  line exist/
• is there still budget left?

• has to be documented
• e.g. for personnel costs time sheets

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Financial Reporting
Staff costs
personnel costs for partners of the operation
salary, tax, employers contribution for social
security in accordance with national
legislation
based on real costs (actual salary rate)
certified on the basis of documents like
contracts, time sheets, payslips and other
documentation of payments
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Financial Reporting

• Calculation of Staff Costs (example)
• Hours spent on project activities (see time
  sheet) 120
• Employees gross salary EUR 50,000.00
• Employers contribution EUR 25,000.00
• Total costs EUR 75,000.00
• Hours worked per year 1700 h
• Hourly rate total costs/hours worked per year
  EUR 44.12
• Staff costs to be reported
• Hourly ratehours spent EUR 5,294.12

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Financial Reporting
Administration Costs

• linked to the operation

• administration costs linked to services provided
  by
• external experts must be reported under the
  budget
• line External Expertise

• all direct general costs (office rent, mail,
  fax, phone, heating,
• electricity etc.)

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Financial Reporting
Administration Costs
Indirect general costs (overheads)

• related to the operation

• based on real costs

• calculated on a pro rata basis, according to the
  
• duly justified, fair and equitable method
• documentation of the calculation method!

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Financial Reporting
Travel and Accommodation

• have to be in accordance with the existing
  internal rules
• of the LP and partner organisations and
  national rules
• of the respective Member State

• based on actual costs

• in case of subsistence costs, payment on a daily
  allowance
• basis possible if this is foreseen in internal
  rules of the
• organisation and payment evidence available

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Financial Reporting
External expertise

• Has to be consistent with the specification
  provided in the
• application
• No new items can be added in the report!
• Public procurement
• Documentation (contracts, invoices etc)
• Subcontracting of partners is not allowed!

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Financial Reporting
Investments

• Have to be consistent with the specification
  provided in the
• application
• No new items can be added in the report
• Reporting either as a total amount or as
  depreciations
• (national rules!)
• Documentation invoices, depreciation method etc.

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Financial Reporting
Other costs

• Has to be consistent with the specification
  provided in the
• application
• No new items can be added in the report!
• Documentation

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Financial Reporting
Common costs

• Sharing of management and coordination costs
  among partners

• Transparent, fair and equitable method
• ? WRITTEN AGREEMENT!

• Clear accountancy reporting ? no double
  reporting!

PLEASE NOTE In most cases, it should be possible
to share the activities by sharing
responsibilities equally among partners
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LESSONS LEARNED FROM THE PREVIOUS REPORTS

• Ignored error messages

• Clarifications on the activities (e.g. vs.
  expenditure incurred)

• Clarifications on the expenditure (e.g. vs.
  applications
• budget lines and specifications)

• Clarifications on the involvement of the
  partners (activities vs. expenditure)

• Signatures wrongly dated
• auditor should sign only after the Lead
  Partner has signed!

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THANK YOU FOR YOUR ATTENTION!