FCG

1
EXPERIENCE FROM PREVIOUS CONTROLS
Information meeting on 2nd Level
Control Valencia, 11th April 2008
2
Main audit findings

• Staff costs
• Administration costs
• Compliance with Community policies
• Documentation
• First (1st) Level Control
• Others

3
Staff Costs

• - Staff costs are not supported by
  timesheets/labour contracts/payroll/bank account
  statements
• Staff costs contain ineligible expenses e.g.
  voluntary extras
• Too much staff costs declared
• Calculation errors
• Costs of external expertise have been declared
  under staff costs
• - Staff costs were not calculated on the basis
  of actual individual salary rate and payments but
  on estimated sums
• Wrong exchange rates have been applied

4
Overheads costs

• - Overheads include ineligible / not project
  related / direct / not incurred costs
• - Overheads are not proved with supporting
  documents
• - Not traceable or missing calculation
• - Fixed percentage sum declared

5
Compliance with Community rules

• Public procurement rules not respected
• A contract is concluded without public
  procurement procedure/ without public tendering
  procedure
• - Information and publicity not respected
• Adverts, press statements do not contain the
  Community emblem and do not mention the
  co-financing of EU
• Publications, agendas without the EU-logo

6
Documentation

• Missing invoices
• The project title was missing from some invoices
• Payments were without invoices, only bank account
  statements
• One invoice was included twice
• Missing travel costs justifications
• No proof of payment no bank account statements
• Documentation not available to demonstrate a
  clear link between work actually executed and the
  declared expenditure

7
First (1st) Level Control

• Independence of 1st level control not proved
• 1st Level Control based on a sample
• The financial report was not signed by the 1st
  level controller
• Missing or not available 1st level control report

8
Other main findings

• Reporting unjustified delays
• ERDF funds not dully transmitted to the partners.
• Separate bank accounts for the project not
  available.

9
RECOMMENDATION Nr 1

• Gather all documentation required (paper and
  electronic versions)
• Assure that staff involved is aware of and
  available

10
Documentation to be gathered (I)

• Approved Application Form
• Subsidy Contract, partnership agreement
• relevant project correspondence (financial and
• contractual)
• Progress Reports
• Auditors confirmations (and checklists/audit
  reports)
• List of declared expenditure
• Bank account statements proving the reception and
  the
• transfer of EU funds

11
Documentation to be gathered (II)

• invoices
• bank account statements /proof of payment
• staff costs calculation of hourly rates,
  information on actual annual working hours,
  labour contracts, payroll documents and time
  records of personnel working for the project
• List of subcontracts and copies of all contracts
  with external experts and/or service providers
• Calculation of administrative costs, proof and
  records of costs included in overheads
• documents relating to the rules applicable on
  national level and to the fulfilment of relevant
  community policies competition, public
  procurement, information and publicity
• Public procurement note, terms of reference,
  offers/quotes, order form, contract
• proofs for delivery of services and goods
  studies, brochures, newsletters, minutes of
  meetings, translated letters, participants
  list etc), Investment items purchased in the
  context of the operation

12
RECOMMENDATION Nr 2

• Discuss all findings during the on the spot
  closure meeting with the EY auditor
• Some findings could be cleared then and not be
  part of the DRAFT Audit Report

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Thank you for your attention!