Call 5 projects – Lead Partner Seminar

Financial reporting, controls and subsidy contract

Wolfgang Schrattenecker – MA, Jean-Christophe Charlier – JTS

10 September 2013, Munich

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6.1 Financial Situation+ Report on:

+ Overall financial situation: exhaustion of funds vs. AF+ Deviations+ Level of expenditure foreseen per partner, WP or CC

6.2 EU Partners overview+ 1st table: automatically generated, received ERDF to be included + 2nd table:

– Currently reported expenses: all new certifications reported in the current PR > check against CoEs

– ERDF requested should not be higher than ‘ERDF share’– Corrections of previously reported expenses: only in case of errors occurred in previous

CoE – Beware: no insertion of formulas and copy-paste to be avoided

6.3 NON-EU Partners overview+ Same approach as 6.2 but in € and no CoE to be provided

PR template link

Section 6: Financial Report

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6.4 Overview on cost category and WP exhaustion+ Cost categories: all project expenditure to be included+ WP: all project expenditure to be included+ EU // non-EU PP split+ Additional info: deviations from planned expenditure… to be

reported

6.5 Investments and leverage effect+ Description of leverage effect: in case of pilot action only+ Overview on Investment (AlpClusters2020: €600 laptop)

+ Location of Implementation+ Related certified costs

+ Deviations: reasons to be provided

6.6 Overview on Activities implemented outside the EU (if relevant)

+ Same approach as 6.5 (no leverage)

Cost category and WP exhaustion,Investments and leverage effect

European Commission

Managing Authority

FINANCIAL CONTROL

JTS

first level controllerProject Participant

Certifying Authority Audit Authority/GoA

AuditorACP

= On the spot audits of the EC to verify the functioning of the system according to Art. 72 of EC regulation 1083/2006 => THIRD LEVEL

= Check of all expenses and certification of eligible ones referred to in Art. 60 b) of EC regulation 1083/2006 and Art. 16 of EC regulation 1080/2006 => FIRST LEVEL

= Audits (system check and sample check) referred to in Art. 62 (1) b) of EC regulation 1083/2006 and detailed in Art. 16 of EC regulation 1828/2006 => SECOND LEVEL

=> TO ENSURE THAT ONLY ELIGIBLE EXPENSES ARE CO-FUNDED (PROPER USE OF FUNDS)

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Certification of expenditure

CoE

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Reasons for rejection of CoEs

+ FLC body not authorised at national level PP to get in touch with the FLC Coordinator of the respective country

+ Missing acronym and reference number of the project ensure the CoE indicates the project reference number and not the expression of interest reference number

+ Reporting period before start date of eligibility

+ Amount of eligible expenditure to be co-funded incorrect (wrong calculation of ineligible expenditure, revenues, eligible expenditure and activities outside the EU)

+ Date of signature prior to closure date of the reporting period. In case of re-issued CoEs, the date indicated should be the new date of signature and not the same date as on the rejected CoE

+ Signature missing or not corresponding with authorised FLC

+ Stamp missing or not corresponding with authorised FLC

+ Clear alteration of the official template

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FLC or LP confirmations required + Name of beneficiary (LP/PP institution) is correct but the wrong

department/section is indicated FLC to confirm

+ Reporting period coincides or overlaps with a previously submitted CoE FLC to confirm

+ field left empty; at least “0” for each financial input FLC to confirm

+ Date of signature is missing FLC to confirm

+ Notes written by hand FLC to confirm on a separate e-mail or letter

+ Corrective CoEs should be accompanied by an explanation from the FLC as to the reasons for the correction

+ Name of beneficiary (LP/PP institution) does not match the data on the AF if LP explanation is not satisfactory, CoE could be rejected

+ Address of beneficiary different from AF contact data change file should be submitted to the JTS by the LP

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What’s new:+ Prefilled CoEs with contact data of PP and PP FLC; these

fields are all editable+ Drop-down menu for the reporting period concerned+ Drop-down menu for the PR number with which the certificate

is submitted+ Automated calculation of the eligible expenditure to be co-

funded

What you should pay attention to:+ Not suited for corrective CoEs+ Any changes in the contact details should lead to revised

CoEs. Projects need to request them

+ Link: prefilled CoE example.pdf

New: prefilled Certification of Expenditure

For further information

http://www.alpine-space.eu/project-life-cycle/programme-implementation-handbook/

Guidance Certification of Expenditure

Guidance Corrective Certification of Expenditure

Template prefilled Certification of Expenditure provided by the JTS

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MA Sample checks on PR

Background info:+ Reference: fact sheet no 6.10 “Progress Report”:

“The MA will check the coherence of all provided documents and will furthermore perform detailed sample checks.”

+ Each project will be selected for a sample check at least once during the project life time

+ Documents checked (beside PR and CoE): listings of invoices, staff costs calculation sheets and time sheets (for a specific period), FLC check lists and reports

+ Plausibility check of award procedures

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MA Sample checks on PR Main findings so far:+ In single cases: incoherence of listings of invoices and CoEs (e.g. due to

missing reference on staff costs in listing of invoice)

+ In single cases: insufficient documentation of working time (model time sheets not (or insufficiently) filled in – esp. weak documentation of non-project related working hours)

+ In some cases: wrong calculation of staff costs as staff costs calculation table filled in incompletely (either only for one quarter or only for those months showing project-related expenses)

=> Depending on the financial consequence of these deficiencies, concerned CoEs were either rejected and PR revisions requested or a corresponding revision in the next PR (corrective CoE) was requested

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Programme Audits

+ System Audits

+ Audits of operations

Results (of audits in 2011, 2012):

+ some minor deficiencies detected (e.g. missing evidence of expenditure, missing project relation, wrong allocation to cost categories),

+ in some cases national public procurement rules were not observed

+ AND: one major infringement of public procurement law (contracted party wrongly considered as affiliated institution - consequently PP did not perform any procurement procedure)

Results of audits in 2013 are not yet available

Call 5 projects will also be subject to second level controls!!

Selection via random sample.

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Public Procurement

+ has to be obeyed by both public and private project partners

+ errors are one of the most frequent reasons for significant findings during second level controls and subsequent reclaim of ERDF funds

+ programme bodies pay attention on this issues during their controls

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Public Procurement

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Public Procurement

Most common procurement errors:+unreproducible estimation of contract value+insufficient documentation of the award procedure+unlawful splitting of contracts+no or no sufficient publication

Support:+factsheet No 6.3 on public procurement+consultation of:

+ first level controllers resp. first level control coordinators+ MA/JTS+ internal procurement experts in your institution+ external procurement experts (costs are eligible)

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Subsidy Contract+ Signing of subsidy contract – deadline for submission of

signed version: 13 September 2013!

+ MA will countersign SC only if PC recommendations have been taken into account

+ LP had to inform the MA/JTS on planned fulfillment of the implementation of the recommendations by 6 September 2013 at the latest

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Subsidy Contract+ Only slight amendments of SC in comparison to previous

contract version (which you know already from your previous project(s))

+ We would like to draw your attention on the following issues:

disbursement of the subsidy is subject to the condition that it can be covered by the available ERDF funds the CA has received from the European Commission (Article 4(3))

prolongation of the project beyond the year 2014 cannot be accepted (Article 8(4))

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Disbursement of Subsidy+ Acc. to Articles 79 and 89 of Council Regulation (EC) No

1083/2006 the final 5 % of the total ERDF contribution to the "Alpine Space" programme will only be provided by the EC after the approval by the EC of both the final report on the programme implementation and the closure declaration of the programme.

+ Most likely the EC will transfer the final ERDF-tranche to the programme in 2018 at the earliest.

+ Depending from the overall programme exhaustion projects might face the situation that a part of the final ERDF-tranche which they have requested for can only be paid out some time after project closure.

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Disbursement of Subsidy

+ It is not decided yet how to allocate the 5% holdback to projects (Call 3-5)

+ MA/JTS will inform Lead Partners about the overall exhaustion of ERDF funds on programme level regularly

+ For details see project implementation handbook factsheet No 7.2 – Final Payment

http://www.alpine-space.eu/fileadmin/media/Programme_Implementation_Handbook/ Factsheet_7.2_Final_Payment.pdf

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No project prolongation beyond 2014!

+Due to administrative reasons (preparation of programme closure) there is no possibility to extend projects beyond 2014

+This is regulated in SC Articel 8(4)

+Therefore immediately start with project implementation!!

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Project Changes

Severe changes require approval by PC:

+ Content changes impacting on outputs/results+ Budget changes between PP, WP, CC above 20% and

above 10.000 Euro+ Partner changes

→ Check your contract (SC, Article 8)→ Fact Sheet 6.9: Project changes→ Request for project changes form   → Contact your Project Officer

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Where to find furtherinformation andassistance?

Thank you for your attention!

www.alpine-space.eu