Audit and certification policy
The Commission's new audit strategy
The Commission's Research DGs (RDGs) have decided to adjust and reinforce their audit strategy substantially in order to detect and correct any errors in cost claims submitted for FP6 and FP7 projects. Given the Commission's target to clear approx. 40% of the FPs' budgets of such errors altogether, the number of audits and participants audited will increase significantly. Furthermore, any type of organisation is likely to become subject of such an audit on-the-spot:
- the large organisations (participants receiving the largest amounts of grants),
- other organisation (selected randomly, based on a representative sample),
- and some potentially high-risk organisations (selected on a risk-based sample, based on indications and/or suspicions from the Commission's Project Officers).
In addition, the Commission's services will share and exchange any relevant information in order to fully coordinate any corrective actions to be taken in a consistent way. Moreover, also the European Court of Auditors has announced that it will increase its own audits of participants in EU research projects.
Therefore, it is important that participants in EU research projects pay the utmost attention to the eligibility criteria for partial reimbursement of costs incurred for their projects before submitting their cost claims. Furthermore, they should prepare themselves for the event of an audit by making sure that they have the required supporting data and documents available at all times. Obviously, the detection of any ineligible costs claimed and reimbursed will lead to recovery of the amount or compensation with the next payment. Moreover, any error of a systemic nature will give rise to an extrapolation of similar corrections in all cost claims related to all other projects of the organisation in question. Beyond these corrections, sanctions may be applicable as well.
First, the Commission will claim liquidated damages proportionate to the overstated amounts. Second, any breach of contractual obligations may give rise to additional financial penalties. Third, any intentional cost overstatement may lead to exclusion from future grants, administrative sanctions and even criminal court proceedings.
The Audit and Certification Communication is provided by CORDIS in order to better inform beneficiaries about the cost eligibility criteria, the supporting data and documents needed during an audit on-the-spot, the audit procedure and the potential consequences. Especially the information on how to avoid some frequently made errors in cost claims may add value. Furthermore, feedback regarding the audits carried out and related findings, conclusions and recommendations will be made available through this channel on a regular basis as well.
Please look at the awareness leaflet [PDF] on the new and reinforced RDGs' common audit strategy.
Certification policy for the FP7
The certification policy for the FP7 Grant Agreements has been designed with the aim to "fix the future" by focussing on the preventive ex-ante verification in order to detect and correct the most common errors identified throughout FP6 audits at the earliest possible stage.
In addition to the Certificates on Financial Statements, which have to be submitted after the costs are being incurred and claimed, the General Conditions of the FP7 Grant Agreement introduced two new types of ex-ante Certificates on the Methodology which may be submitted prior the costs being claimed : the Certificate on Average Personnel Costs, mandatory for any partner intending to charge average personnel calculations, and the Certificate on the Methodology for Personnel and Overheads, addressed to a limited number of recurring beneficiaries fulfilling the eligibility criteria set by the Commission. Both certificates are intended to provide a set of facts and findings enabling the Commission services to asses the correctness of the method applied by the beneficiary for fixing the costs of Personnel and Overheads (in the case of the Certificate on Methodology) to be charged to the EC Research Grants.
Whilst the Certificate on Average Personnel Costs is required for any beneficiary opting for this procedure, the Certificate on the Methodology is a voluntary choice. When the Certification on the Methodology is accepted by the Commission, the requirement to provide an intermediate Certificate on the Financial Statements for claims of interim payments shall be waived.