Audits in Horizon 2020 · Research and Innovation Audits in Horizon 2020 Fit for Health 2.0...
Transcript of Audits in Horizon 2020 · Research and Innovation Audits in Horizon 2020 Fit for Health 2.0...
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Research and Innovation
Audits in Horizon 2020
Fit for Health 2.0
Brussels 22/01/2015
European Commission RTD.J.2 Common Audit Service Kai-Young Weißschädel
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Research and Innovation
Agenda
1. Types of Controls according Article 22 MGA
2. The Audit Cycle in Horizon 2020
3. Practical Advice and Hints
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Research and Innovation
Agenda
1. Types of Controls according Article 22 MGA
2. The Audit Cycle in Horizon 2020
3. Practical Advice and Hints
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Research and Innovation
Types of controls: Article 22 MGA
• Checks
• Reviews
• Audits
• Investigations
• (Special cases)
• Any form of control can include third parties and subcontractors (Article 10-16 MGA)
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Research and Innovation
Checks
• Control implementation of the action
• Verify compliance with legal obligations
• Assess deliverables and reports
• By Commission itself or external persons / bodies
• Can relate to any aspect of the grant
• At any moment and no time restrictions
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Research and Innovation
Reviews
• Mainly concern technical and scientific implementation of the action
• Can include financial and budgetary aspects
• By Commission itself or external experts
• May include on-the-spot visits or review meetings
• Review report and 30 days “contradictory review procedure”
• Up to 2 years after payment of the balance
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Research and Innovation
Audits
• Mainly concern financial implementation of the action
• Can include technical and other aspects
• By Commission itself or external auditors
• Usually includes on-the-spot visit and desk review
• Audit report and 30 days “contradictory audit procedure”
• Up to 2 years after payment of the balance
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Research and Innovation
Investigations
• By European Anti-Fraud Office (OLAF)
• Discover fraud, corruption or illegal activities
• Usually includes on-the-spot checks and inspections
• At any moment during and after the action
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Research and Innovation
Special case: ECA
• Checks and audits by the European Court of Auditors (ECA)
• ECA is external auditing body for all European institutions
• Usually includes on-the-spot visit and desk review
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Research and Innovation
Special case: International Organisations
• Checks, reviews, audits and investigations also apply to international organisations
• By European Commission, European Anti-Fraud Office (OLAF) and European Court of Auditors (ECA)
• Special agreements between the European Union and the international organisation may apply
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Research and Innovation
Consequences of findings (Article xx MGA)
• Rejection of ineligible costs (42)
• Reduction of the grant (43)
• Recovery of undue amounts (44)
• Administrative and financial penalties (45)
• Suspension of payments (48)
• Suspension of the action implementation (49)
• Termination of the agreement or participation (50)
• “Extension of findings to other grants”
• OLAF findings may lead to criminal prosecution 11
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Research and Innovation
Extension of findings
• Systemic or recurrent errors detected
• Extension of findings to non-audited/reviewed reporting periods of this grant
• Extension to any other H2020 grant of this beneficiary
• Concerns on-going and closed grants
• Up to 2 years after payment of the balance
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Research and Innovation
Agenda
1. Types of Controls according Article 22 MGA
2. The Audit Cycle in Horizon 2020
3. Practical Advice and Hints
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Research and Innovation
Certificate on the Financial Statements (CFS)
• First level audit
• Threshold of EUR 325.000 EU contribution
• One certificate submitted at the end of the action (together with the payment request)
• Cost of CFS eligible under the category “Costs for other goods and services”
• Auditor to be selected by beneficiary
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Research and Innovation
Common Audit Service
• Financial audits (second level audits) for all H2020 actions of:
All Research related Directorate-Generals of the European Commission
Executive Agencies
Joint Undertakings
• Ex-ante assessment for Large Research Infrastructure (LRI) costs
• Certification on Methodology (unit costs for average personnel costs) 15
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Research and Innovation
Audit cycle Audit Strategy & Selection
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Audit Planning & Preparation
Implementation of Audit Results
Reporting & Audit Closure
Examination on site
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Research and Innovation
Audit Strategy & Selection
• Statistical method: Monetary Unit Sampling (MUS)
• Risk based analysis: high amounts, large proportion of subcontracting, new beneficiaries, etc.
• Fraud-risk audits
• Audits of biggest beneficiaries
• Audits on request
• Technical / Scientific audits
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Research and Innovation
Audit Planning & Preparation
• Concrete selection of actions to be audited
• Initial contact with responsible auditors to agree on dates and logistics for audit visit
• Formal “Letter of announcement” of audit including detailed annex with information and documents to be provided prior and during the on site examination
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Research and Innovation
Examination on site
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Opening
meeting
Analysis
of Systems
in place
Test of systems
and substantive
evidence
Closure
meeting
Assessment
after on site
visit
Usually within 4-5 working days (one week) (…)
General infor-
mation on:
• organisation
• projects
• financial
administration
• internal con-
trol systems
Audit agenda
for the week
Collection of information
and audit evidence,
analysis of documents,
interviews with
researchers, project
presentations, physical
inspections, etc.
Discussion
on prelimi-
nary audit
findings and
observations
Indication of
further audit
procedure
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Research and Innovation
Reporting & Audit Closure
• Draft audit report
• Internal quality check
• Contradictory audit procedure: 30 days for beneficiary to send comments and “Letter of representation”
• Final audit report
• Internal committees and final quality check
• Audit closure with formal “Letter of Closure” of audit and indication of further procedures for the implementation of audit results 20
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Research and Innovation
Implementation of Audit Results
• Managed by the operational services in charge of project management
• Normally adjustment of ineligible costs
• Possibility of extension of audit findings to other grants in case of systemic and recurrent errors
• Administrative and financial penalties
• Further financial and legal consequences: reduction of grant, suspension of payments, termination of grant, OLAF investigations, etc.
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Research and Innovation
Obligations of beneficiaries
• Obligation to keep records and other supporting documentation for 5 years (3 years for low value grants ≤ EUR 60.000) – Article 18 MGA
• Obligation to make available all records and documents during checks, reviews, audits or investigations and to keep them until the end of these procedures
• Original documents or authorised digital copies
• All evidence must be verifiable, auditable and available (no objection of data protection or confidentiality) 22
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Research and Innovation
Agenda
1. Types of Controls according Article 22 MGA
2. The Audit Cycle in Horizon 2020
3. Practical Advice and Hints
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Research and Innovation
Practical advice: please avoid errors
• It makes life easier for you.
• It makes life easier for us.
• It avoids unnecessary conflicts so that emphasis can be put on excellent science.
• Read guidance documents carefully (MGA / AMGA)
• Attend seminars, take advice from specialists
• Pass on information to other participants and actively support them in their cost claims
• Have a staff member dedicated to financial issues 24
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Research and Innovation
Some advice from practical experience
• Staff working on the action MUST keep time records
• Check that all third parties and subcontractors have been clearly declared and follow specific rules
• No subcontracting or invoicing between consortium partners or payment for other partner's costs
• Costs declared MUST be actual and real. No planned, budgeted, apportioned, approximated costs allowed (even not if according to budget foreseen in the grant or according to proposal)
• Inform or ask the Commission / project officer in case of questions, changes or problems
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Research and Innovation
Additional information
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Participant Portal At: http://ec.europa.eu/research/participants/portal/desktop/en/home.html
Horizon 2020 Documents http://ec.europa.eu/research/participants/portal/desktop/en/funding/reference_docs.html
Horizon 2020 On-line Manual http://ec.europa.eu/research/participants/portal/desktop/en/funding/guide.html
Questions? Research Enquiry Service http://ec.europa.eu/research/enquiries