annex vii e3h8 expendverif en

8/11/2019 Annex VII e3h8 Expendverif En

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TERMS OF REFERENCE FOR AN EXPENDITURE VERIFICATION OFA GRANT CONTRACT

- EXTERNAL ACTIONS OF THE EUROPEAN UNION -

HOW TO USE THIS TERMS OF REFERENCE MODEL? All text highlighted in yellow in this ToR odel !nd

its !nnex " !nd # is $o% inst%&'tion only !nd (ene$i'i!%ies o$ g%!nt 'ont%!'ts sho&ld %eo)e it !$te% &se*

The +!%ts o$ the ToR +%esented in ,--**. /e*g* ,n!e o$ the (ene$i'i!%y. &st (e 'o+leted (y the (ene$i'i!%y*

The following are the terms of reference (ToR) on which


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The Auditor and0or the firm is registered as a statutory auditor in the pulic register of a pulic

oversight ody in a third country and this register is su+ect to principles of pulic oversight asset out in the legislation of the country concerned (this applies to auditors and audit firms asedin a third country)$

'. SUB&ECTOFTHEENGAGEMENT

The su+ect of this engagement is the ,inancialReport in connection with the "rant #ontract for the period covering and the action entitled ' the ?Action?$ Annex 7 to these ToR containsinformation aout the "rant #ontract$

). REASONFORTHEENGAGEMENT

The Beneficiary is re.uired to sumit to the #ontracting Authority an expenditure verificationreport produced y an external auditor in support of the payment re.uested y the Beneficiaryunder Article 7 of the "eneral #onditions of the "rant #ontract$ The Authorising @fficer of the

#ommission re.uires this report as he ma-es the payment of expenditure re.uested y theBeneficiary conditional on the factual findings of this report$

*. ENGAGEMENTT+PEANDOB&ECTIVE

This expenditure verification is an engagement to perform certain agreed/upon procedures withregard to the ,inancial Report for the "rant #ontract$ The o+ective of this expenditureverification is for the Auditor to carry out the specific procedures listed in Annex 2A to these ToRand to sumit to the Beneficiary a report of factual findings with regard to the specific verification

procedures performed$ erification means that the Auditor examines the factual information in the,inancial Report of the Beneficiary and compares it with the terms and conditions of the "rant

#ontract$ As this engagement is not an assurance engagement the Auditor does not provide an auditopinion and expresses no assurance$ The #ontracting Authority assesses for itself the factualfindings reported y the Auditor and draws its own conclusions from these factual findings$

,. STANDARDSANDETHICS

The Auditor shall underta-e this engagement in accordance with1

the nternational Ctandard on Related Cervices (CRC) 5533 ngagements to perform Agreed/upon *rocedures regarding ,inancial nformation as promulgated y the ,A#=

the ,A# #ode of thics for *rofessional Accountants (developed and issued y ,A#?snternational thics Ctandards Board for Accountants (CBA)' which estalishes fundamentalethical principles for Auditors with regard to integrity' o+ectivity' independence' professionalcompetence and due care' confidentiality' professional ehaviour and technical standards$Although CRC 5533 provides that independence is not a re.uirement for agreed/upon

procedures engagements' the #ontracting Authority re.uires that the Auditor is independentfrom the Beneficiary and complies with the independence re.uirements of the ,A# #ode ofthics for *rofessional Accountants$

. PROCEDURES EVIDENCEANDDOCUMENTATION

The Auditor plans the wor- so that an effective expenditure verification can e performed$ TheAuditor performs the procedures listed in Annex 2A of these ToR (Disting of specific proceduresto e performed) and applies the guidelines in Annex 2B ("uidelines for specific procedures to e

performed)$ The evidence to e used for performing the procedures in Annex 2A is all financial and

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non/financial information which ma-es it possile to examine the expenditure claimed y theBeneficiary in the ,inancial Report$ The Auditor uses the evidence otained from these proceduresas the asis for the report of factual findings$ The Auditor documents matters which are importantin providing evidence to support the report of factual findings' and evidence that the wor- wascarried out in accordance with CRC 5533 and these ToR$

/. REPORTING

The report on this expenditure verification should descrie the purpose' the agreed/uponprocedures and the factual findings of the engagement in sufficient detail in order to enale theBeneficiary and the #ontracting Authority to understand the nature and extent of the procedures

performed y the Auditor and the factual findings reported y the Auditor$

The use of the 9odel Report for an xpenditure erification of an ! "rant #ontract in Annex 6of these ToR is compulsory$ This report should e provided y the Auditor to within wor-ingdays after the day of signature of these ToR$

0. OTHERTERMS

The fee for this engagement shall e


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Anne 1 nformation aout the "rant #ontract

Anne 'A Disting of specific procedures to e performed

Anne 'B "uidelines for specific procedures to e performed

Anne ) 9odel report for an expenditure verification of an ! grant contract

F%r $2e Beneficiar3 F%r $2e A"#i$%r3

Cignature Cignature

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Anne 1 Inf%r4a$i%n a5%"$ $2e Gran$ C%n$rac$

[Annex to be completed by the Beneficiary]

Inf%r4a$i%n a5%"$ $2e Gran$ C%n$rac$

Reference numer and date of the "rant#ontract

< #ontracting Authoritys reference of the"rant #ontract>

"rant contract title#ountry

Beneficiary < full name and address of the Beneficiaryas per the "rant #ontract>

Budget line #ontract < #ontracting Authority reference of theudget line and #ommission referencewhere the #ontracting Authority is not the#ommission >

Degal asis for the #ontract

Ctart date of the Action

nd date of the Action

Total cost of the Action


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Anne 'A Li6$in7 %f S8ecific Pr%ce#"re6 $% 5e 8erf%r4e#

[This Annex is a standard listing of specific procedures to be performed and it shall not be modified]

1. GENERALPROCEDURES

1.1. Ter46 an# C%n#i$i%n6 %f $2e Gran$ C%n$rac$

The Auditor otains an understanding of the terms and conditions of the "rant #ontract yreviewing the "rant #ontract and its annexes and other relevant information' and y in.uiry of theBeneficiary$ The Auditor otains a copy of the original "rant #ontract (signed y the Beneficiaryand the #ontracting Authority) with its annexes$ The Auditor otains and reviews the Report

(which includes a narrative and a financial section) as per Article 2$7 of the "eneral#onditions$

1.'. Financia9 Re8%r$ f%r $2e Gran$ C%n$rac$

The Auditor verifies that the ,inancial Report complies with the following conditions of Article

2 of the "eneral #onditions the "rant #ontract1

The ,inancial Report must conform to the model in Annex of the "rant #ontract=

The ,inancial Report should cover the Action as a whole' regardless of which part of it isfinanced y the #ontracting Authority=

The ,inancial Report should e drawn up in the language of the "rant #ontract=

The proof of the transfers of ownership of e.uipment' vehicles and supplies (Article 8$6 of the"eneral #onditions of the "rant #ontract) should e annexed to the final ,inancial Report$

1.). R"9e6 f%r Acc%"n$in7 an# Rec%r# :ee8in7

The Auditor examines when performing the procedures listed in this Annex / whether theBeneficiary has complied with the following rules for accounting and record -eeping of Article74 of the "eneral #onditions the "rant #ontract1

The accounts -ept y the Beneficiary for the implementation of the Action must e accurate andup/to/date=

The Beneficiary must have a doule/entry oo-/-eeping system=

The accounts and expenditure relating to the Action must e easily identifiale and verifiale=

The accounts must provide details of interest accrued on funds paid y the #ontractingAuthority$

1.*. Rec%nci9in7 $2e Financia9 Re8%r$ $% $2e Beneficiar;6 Acc%"n$in7 S6$e4an# Rec%r#6

The Auditor reconciles the information in the ,inancial Report to the Beneficiarys accountingsystem and records (e$g$ trial alance' general ledger accounts' su ledgers etc$) (Cee Article 74$7)$

1.,. Ec2an7e Ra$e6

The Auditor verifies that amounts of expenditure incurred in a currency other than the uro haveeen converted at the exchange rate which is made up of the average of the rates pulished in

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nforuro for the months covered y the ,inancial Report' unless otherwise provided in the Cpecial#onditions of the "rant #ontract (Article 7$: of the "eneral #onditions)

'. PROCEDURES TO VERIF+ CONFORMIT+ OF EXPENDITURE


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).. Ine9i7i59e c%6$6 =Ar$ic9e 1*.>

The Auditor verifies that the expenditure for a selected item does not concern an ineligile cost asdescried in Article 75$4 of the "eneral #onditions$ The Auditor verifies whether expenditureincludes certain taxes' including AT$ f this is the case the Auditor verifies that the Beneficiary(or' where applicale the partners) cannot reclaim these taxes through an exemption system and0ora refund a posteriori$ f this is the case' taxes can e considered as eligile costs' provided that the

asic act which finances the !/contriution does not exclude payment of taxes$

)./. Acce8$e# c%6$6

%here the asic act which finances the !/contriution excludes taxes as eligile costs' thesetaxes may nevertheless e ta-en into consideration as co/financing y the grant eneficiary$ TheAuditor verifies that the eneficiary (or' where applicale' the partners) cannot reclaim these taxesthrough an exemption system and0or a refund a posteriori$

).0. Re?en"e6 %f $2e Ac$i%n

The Auditor examines whether revenues which should e attriuted to the Action (including inter

alia grants and funding received from other donors and other revenue generated y the Beneficiaryin the context of the Action such as for example interest earned) have een allocated to the Actionand disclosed in the ,inancial Report$ ,or this purpose the Auditor in.uires with the Beneficiaryand examines documentation otained from the Beneficiary$ The Auditor is not expected toexamine the completeness of the revenues reported$

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Anne 'B G"i#e9ine6 f%r S8ecific Pr%ce#"re6 $% 5e 8erf%r4e#

[This Annex pro3ides standard guidelines for the specific procedures to be performed and theseguidelines shall not be modified]

1. VERIFICATIONEVIDENCE

%hen performing the specific procedures listed in Annex 2A the Auditor may apply techni.uessuch as in.uiry and analysis' (re)computation' comparison' other clerical accuracy chec-s'oservation' inspection of records and documents' inspection of assets and otainingconfirmations$

The Auditor otains verification evidence from these procedures to draw up his report of factualfindings$ erification evidence is all information used y the Auditor in arriving at the factualfindings and it includes the information contained in the accounting records underlying the,inancial Report and other information (financial and non/financial)$

The contractual re.uirements that relate to verification evidence are1

xpenditure should e identifiale' verifiale and recorded in the accounting records of the

Beneficiary (Article 75$7$d) of the "eneral #onditions of the "rant #ontract)=

xpenditure must e easily identifiale and verifiale and traced to and within the Beneficiarys

accounting and oo--eeping systems (Article 74$7 of the "eneral #onditions)=

The Beneficiary will allow any external auditor to carry out verifications on the asis of

supporting documents for the accounts' accounting documents and any other document relevantto the financing of the Action$ The Beneficiary gives access to all documents and dataasesconcerning the technical and financial management of the Action (Article 74$2 of the "eneral#onditions)=

Article 74$6 of the "eneral #onditions of the "rant #ontract provides a list of the types and

nature of evidence that the Auditor will often find in expenditure verifications$

9oreover' for the purpose of the procedures listed in Annex 2A' evidence1

9ust e availale in documentary form' whether paper' electronic or other medium (e$g$ a

written record of a meeting is more reliale than an oral presentation of the matters discussed)=

9ust e availale in the form of original documents rather than photocopies or facsimiles=

Chould preferaly e otained from independent sources outside the entity (an original suppliers

invoice or contract is more reliale than an internally approved receipt note)=

%hich is generated internally is more reliale if it has een su+ect to control and approval=

@tained directly y the Auditor (e$g$ inspection of assets) is more reliale than evidence

otained indirectly (e$g$ in.uiry aout the asset)$

f the Auditor finds that the aove criteria for evidence are not sufficiently met' he0she should detailthis in the factual findings$

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'. OBTAINING AN UNDERSTANDING OF THE TERMS AND CONDITIONS OF THEGRANTCONTRACT=ANNEX'A - PROCEDURE1.1>

The Auditor otains an understanding of the terms and conditions of the "rant #ontract and he0sheshould pay particular attention to Annex of the "rant #ontract' which contains the &escription ofthe Action' Annex ("eneral #onditions) and Annex ' which provides rules for procurement(including nationality and origin rules) y grant eneficiaries in the context of ! external actions$

,ailure to comply with these rules ma-es expenditure ineligile for ! financing$ Theseprocurement rules apply to all grant contracts ut depending on the legal asis for the "rant#ontract (e$g$ TA#C' ADA' ,ood Aid and &evelopment #o/operation nstrument) nationality andorigin rules may vary$ The Auditor ensures with the Beneficiary that the applicale nationality andorigin rules are identified and understood$ Applicale rules of nationality and origin are set out' foreach legal asis' in Annex A2 to the *ractical "uide2to contract procedures for external actions ofthe uropean #ommunities$

f the Auditor finds that the terms and conditions to e verified are not sufficiently clear he shouldre.uest clarification from the Beneficiary$

). SELECTINGEXPENDITUREFORVERIFICATION =ANNEX'A - PROCEDURES).1 @)./>

The expenditure claimed y the Beneficiary in the ,inancial Report is presented under thefollowing expenditure headings1 7 Human Resources' 2 Travel' 6 .uipment and Cupplies' 5 Docaloffice' @ther costs' services' 4 @ther' : *rovision for contingency reserve and 73 Administrativecosts$ xpenditure headings 7 to 4 represent direct costs of the Action$ xpenditure headings can

e ro-en down into expenditure suheadings such as for example 7$7 Calaries$

xpenditure suheadings can e ro-en down into individual expenditure items or classes ofexpenditure items with the same or similar characteristics$ The form and nature of the supportingevidence (e$g$ a payment' a contract' an invoice etc) and the way expenditure is recorded (i$e$

+ournal entries) vary with the type and nature of the expenditure and the underlying actions ortransactions$ However' in all cases expenditure items should reflect the accounting (or financial)value of underlying actions or transactions no matter the type and nature of the action ortransaction concerned$

alue should e the principal factor used y the Auditor to select expenditure items or classes ofexpenditure items for verification$ The Auditor selects high value expenditure items to ensure anappropriate coverage of expenditure$

*. VERIFICATION COVERAGE OF EXPENDITURE =ANNEX'A - PROCEDURES ).1 @)./>

The Auditor applies the principles and criteria set out elow when planning and performing thespecific verification procedures for selected expenditure in Annex 2A (procedures 6$7 6$8)$

erification y the Auditor and verification coverage of expenditure items does not necessarilymean a complete and exhaustive verification of all the expenditure items that are included in aspecific expenditure heading or suheading$ The Auditor should ensure a systematic andrepresentative verification$ &epending on certain conditions (see further elow) the Auditor mayotain sufficient verification results for an expenditure heading or suheading y loo-ing at alimited numer of selected expenditure items$

2 *ractical "uide (applicale for Budget and &,) and annexes for Budget and &, see1http100ec$europa$eu0europeaid0wor-0procedures0implementation0practicalJguide0indexJen$htm

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The Auditor may apply statistical sampling techni.ues for the verification of one or moreexpenditure headings or suheadings of the ,inancial Report$ The Auditor examines whetherpopulations (i$e$ expenditure suheadings or classes of expenditure items within expendituresuheadings) are suitale and sufficiently large (i$e$ are made up of large numers of items) foreffective statistical sampling$

f applicale the Auditor should explain in the report of factual findings for which headings or

suheadings of the ,inancial Report sampling has een applied' the method used' the resultsotained and whether the sample is representative$

The xpenditure #overage Ratio (#R) represents the total amount of expenditure verified ythe Auditor expressed as a percentage of the total amount of expenditure reported y theBeneficiary in the ,inancial Report and claimed y the Beneficiary for deduction from the totalsum of pre/financing under the "rant #ontract$ This amount is reported in Annex of the "rant#ontract$

The Auditor ensures that the overall #R is at least ,$ f he finds an exception rate of less than73E of the total amount of expenditure verified (i$e$ 4' E) the Auditor finalises the verification

procedures and continues with reporting$

f the exception rate found is higher than 73E the Auditor extends verification procedures until the#R is at least 0,. The Auditor then finalises verification procedures and continues withreporting regardless of the total exception rate found$ The Auditor ensures that the ECR f%r eac2e8en#i$"re 2ea#in7 an# 6"52ea#in7in the ,inancial Report is at least 1($

,. PROCEDURES TO VERIF+ SELECTED EXPENDITURE =ANNEX 'A - PROCEDURES).1 @ )./>

The Auditor verifies the selected expenditure items y carrying out procedures 6$7 / 6$8 listed inAnnex 2A and reports all the factual findings and exceptions resulting from these procedures$erification exceptions are all verification deviations found when performing the procedures set outin Annex 2A$

The Auditor .uantifies the amount of the verification exception found and the potential impact onthe ! 0 Austrian contriution' should the #ommission declare the expenditure item(s) concernedineligile (where applicale ta-ing into account the percentage of funding of the #ommission andthe impact on indirect expenditure (e$g$ administrative costs))$ The Auditor reports all exceptionsfound including the ones of which he cannot .uantify the amount of the verification exceptionfound and the potential impact on the ! 0 Austrian contriution$

,or example1 if the Auditor finds an exception of 7$333K with regard to procurement rules for agrant contract where the ! finances 43E of the expenditure and where administrative costs of8E of total direct eligile expenses are foreseen' the Auditor reports an exception of 7$333K and a

financial impact of 452K (7$333K x 43E x 7$38)$

4pecific guidance for procedure %!1!. Compliance /ith 0rocurement &ationality and 2riginules

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The Auditor should verify whether the expenditure for a selected item was incurred in accordancewith the applicale procurement' nationality and origin rules y examining the underlyingdocuments of the procurement and purchase process$ Cuch documents relate to the opening oftenders' the assessment of the eligiility of tenderers and conformity of tenders' the evaluation ofthe offers and the decisions with regard to the awarding of the contract$ %hen examining these

procurement documents the Auditor ta-es into account the ris- indicators listed at the end of thisAnnex and he reports' if applicale' which of these indicators were identified$

4pecific guidance for procedure %!' Contributions in 5ind

The Auditor should verify that expenditure in the ,inancial Report does not include anycontriutions in -ind$ f contriutions in -ind are foreseen they must e indicated and valued in theAction udget$ f this is not the case contriutions in -ind are not eligile$ xamples1 salaries ofstaff detached y a 9inistry which is not part of the action or e.uipment and material receivedfrom organisations which do not participate in the Action$

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RIS INDICATORS PROCUREMENT

nconsistencies in the dates of the documents or illogical se.uence of dates$ xamples1

@ffer dated after the award of contract or efore the sending of the invitations to tender

@ffer of the winning tenderer dated efore the pulication date of the tender or dated

significantly later than offers of other tenderers

@ffers of different candidates participating in the same tenders all having the same date

&ates on documents not plausile0consistent with dates on accompanying documentation (e$g$date on the offer not plausile0consistent with the postal date on the envelope= date of a fax not

plausile0consistent with the printed date of the fax machine)

!nusual similarities in offers of candidates participating in the same tender$ xamples1

Came wording' sentences and terminology in offers of different tenderers

Came layout and format (e$g$ font type' font siLe' margin siLes' indents' paragraph wrapping'etc) in offers of different tenderers

Cimilar letterhead paper or logos

Came prices used in offers of different tenderers for a numer of sucomponents or line items

dentical grammatical' orthographical or typing errors in offers of different tenderers

!se of similar stamps and similarities in signatures

,inancial statement or other information indicating that two tenderers participating in the same

tender are related or part of a same group (e$g$ where financial statements are provided' thenotes to the financial statements may disclose ultimate ownership of the group$ @wnershipinformation may also e found in pulic registers for accounts)

nconsistencies in the selection and award decision process$ xamples1

Award decisions not plausile 0 consistent with selection and award criteria

rrors in the application of the selection and award criteria

A regular supplier of the eneficiary participates as a memer of a tender evaluation committee

@ther elements and examples indicating a ris- of privileged relationship with tenderers1

A same tenderer (or small group of tenderers) is invited to different tenders with unusualfre.uency

A same tenderer (or small group of tenderers) wins an unusually high proportion of the ids

A tenderer is fre.uently awarded contracts for different types of goods or services

The winning tenderer invoices additional goods not foreseen in the offer (e$g$ additional spareparts invoiced without clear +ustification' installation costs invoiced while not foreseen in theoffer)$

@ther documentation' issues and examples indicating a ris- of irregularities1

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!se of photocopies instead of original documents

!se of pro/forma invoices as supporting documents instead of official invoices

9anual changes on original documents (e$g$ figures manually changed' figures MtippexedM' etc)

!se of non/official documents (e$g$ letterhead paper not showing certain official and0orcompulsory information such as commercial registry numer' company tax numer' etc$)

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Anne ) 3 M%#e9 Re8%r$ f%r an E8en#i$"re Verifica$i%n %f an EU Gran$ C%n$rac$

H@% T@ !C THC 9@&D R*@RTN All text highlighted in yellow in this model report is forinstruction only and auditors should remove it after use$ nformation re.uested in the following

form (e$g$ must e completed y the auditor$

Re8%r$ f%r an E8en#i$"re Verifica$i%n %f a Gran$ C%n$rac$

E$erna9 Ac$i%n6 %f $2e E"r%8ean Uni%n

Ti$9e %f an# n"45er %f $2e 7ran$ c%n$rac$

TABD @, #@ITITC

REPORT OF FACTUAL FINDINGS1)

1. INFORMATION ABOUT THE GRANT CONTRACT .1

'. PROCEDURES PERFORMED AND FACTUAL FINDINGS ..'(

). PROCEDURES TO VERIF+ SELECTED EXPENDITURE.. .'(

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Re8%r$ %f Fac$"a9 Fin#in76

6&ame of contact person(s)> 6 0osition>, 0ene$i'i!%y1s n!e.6Address>

&ear 6&ame of contact person(s)>

n accordance with the terms of reference dated 6dd 7onth yyyy> that you agreed with us' weprovide our Report of ,actual ,indings (Pthe ReportQ)' with respect to the accompanying ,inancialReport for the period covering 6dd 7onth yyyy # dd 7onth yyyy> (Annex 7 of this Report)$ oure.uested certain procedures to e carried out in connection with your ,inancial Report and theuropean !nion 0 Austrian financed "rant #ontract concerning 6title and number of thecontract>' the "rant #ontract$

O5ec$i?e

@ur engagement was an expenditure verification which is an engagement to perform certainagreed/upon procedures with regard to the ,inancial Report for the "rant #ontract etween youand the Austrian &evelopment Agency (A&A)' represented y the mplementation !nit of theAustrian massy in Belgrade for ! financed *ro+ectsthe #ontracting Authority$ The o+ectiveof this expenditure verification is for us to carry out certain procedures to which we have agreedand to sumit to you a report of factual findings with regard to the procedures performed$

S$an#ar#6 an# E$2ic6

@ur engagement was underta-en in accordance with1

nternational Ctandard on Related Cervices (CRC) 5533 8ngagements to perform Agreed#upon 0rocedures regarding 9inancial $nformation as promulgated y the nternational,ederation of Accountants (,A#)=

the Code of 8thics for 0rofessional Accountants issued y the ,A#$ Although CRC 5533provides that independence is not a re.uirement for agreed/upon procedures engagements' the#ontracting Authority re.uires that the auditor also complies with the independencere.uirements of the Code of 8thics for 0rofessional Accountants=

Pr%ce#"re6 8erf%r4e#

As re.uested' we have only performed the procedures listed in Annex 2A of the terms of reference

for this engagement (see Annex 2 of this Report)$

These procedures have een determined solely y the #ontracting Authority and the procedureswere performed solely to assist the #ontracting Authority in evaluating whether the expenditureclaimed y you in the accompanying ,inancial Report is eligile in accordance with the terms andconditions of the "rant #ontract$

Because the procedures performed y us did not constitute either an audit or a review made inaccordance with nternational Ctandards on Auditing or nternational Ctandards on Reviewngagements' we do not express any assurance on the accompanying ,inancial Report$

Had we performed additional procedures or had we performed an audit or review of the financialstatements of the Beneficiary in accordance with nternational Ctandards on Auditing' othermatters might have come to our attention that would have een reported to you$

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S%"rce6 %f Inf%r4a$i%n

The Report sets out information provided to us y you in response to specific .uestions or asotained and extracted from your accounts and records

Fac$"a9 Fin#in76

The total expenditure which is the su+ect of this expenditure verification amounts to K$

The xpenditure #overage Ratio is $ This ratio represents the total amount of expenditureverified y us expressed as a percentage of the total expenditure which has een su+ect of thisexpenditure verification$ The latter amount is e.ual to the total amount of expenditure reported yyou in the ,inancial Report and claimed y you for deduction from the total sum of pre/financingunder the "rant #ontract as per your Re.uest for *ayment of $

%e report the details of our factual findings which result from the procedures that we performed in#hapter 2 of this Report$

U6e %f $2i6 Re8%r$

This Report is solely for the purpose set forth aove under o+ective$

This report is prepared solely for your own confidential use and solely for the purpose ofsumission y you to the #ontracting Authority in connection with the re.uirements as set out inArticle 7 of the "eneral #onditions of the "rant #ontract$ This report may not e relied upon yyou for any other purpose' nor may it e distriuted to any other parties$

The #ontracting Authority is not a party to the agreement (the terms of reference) etween you andus and therefore we do not owe or assume a duty of care to the #ontracting Authority who mayrely upon this expenditure verification report at its own ris- and discretion$ The #ontractingAuthority can assess for itself the procedures and findings reported y us and draw its ownconclusions from the factual findings reported y us$

The #ontracting Authority may only disclose this Report to others who have regulatory rights ofaccess to it in particular the uropean #ommission the uropean Anti ,raud @ffice and theuropean #ourt of Auditors$

This Report relates only to the ,inancial Report specified aove and does not extend to any of yourfinancial statements$

%e loo- forward to discussing our Report with you and would e pleased to provide any furtherinformation or assistance which may e re.uired$

ours sincerely'

A"#i$%r6! 6i7na$"re [person or firm or both as appropriate and in accordance /ith firmpolicies]

Na4e %f A"#i$%r 6i7nin7[person or firm or both as appropriate]

A"#i$%r6! a##re66[office ha3ing responsibility for the engagement]

Da$e %f 6i7na$"re dd Month yyyyFdate of when the final report is effectively signedG

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Inf%r4a$i%n a5%"$ $2e Gran$ C%n$rac$

[Chapter 1 should include a brief description of the :rant Contract and the Action theBeneficiary; implementing structure and 5ey financial;budget information! (maximum 1 page)]

Pr%ce#"re6 8erf%r4e# an# Fac$"a9 Fin#in76

%e have performed the specific procedures listed in Annex 2A of the terms of reference for theexpenditure verification of the "rant #ontract (?ToR?)$ These procedures are1

7$ "eneral *rocedures

2$ *rocedures to verify conformity of xpenditure with the Budget and Analytical Review

6$ *rocedures to verify selected xpenditure

%e have applied the rules for selection of expenditure and the principles and criteria forverification coverage as set out in Annex 2B (sections 6 and 5) of the ToR for this expenditureverification$

[8xplain here difficulties or problems encountered if any]

The total expenditure verified y us amounts to K and is summarised in the tale elow$The overall xpenditure #overage Ratio is $

[0ro3ide here a summary table of the 9inancial eport in Annex 1 presenting for each (sub)heading the total expenditure amount reported by the Beneficiary the total expenditure amount3erified and the percentage of expenditure co3ered]

%e have verified the selected expenditure as shown in the aove summary tale and we havecarried out' for each expenditure item selected' the verification procedures specified at point 6$7 to6$8 of Annex 2A of the ToR for this expenditure verification$ %e report our factual findingsresulting from these procedures elow$

1. GENERALPROCEDURES

1.1. Ter46 an# C%n#i$i%n6 %f $2e Gran$ C%n$rac$

%e have otained an understanding of the terms and conditions of this "rant #ontract inaccordance with the guidelines in Annex 2B (section 2) of the ToR$

[


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1.'. Financia9 Re8%r$ f%r $2e Gran$ C%n$rac$

1.). R"9e6 f%r Acc%"n$in7 an# Rec%r# :ee8in7

1.*. Rec%nci9in7 $2e Financia9 Re8%r$ $% $2e Beneficiar;6 Acc%"n$in7 S6$e4an# Rec%r#6

1.,. Ec2an7e Ra$e6

'. PROCEDURES TO VERIF+ CONFORMIT+ OF EXPENDITURE


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).'. E9i7i5i9i$ %f Direc$ C%6$6 =Ar$ic9e 1*.'>

).). Pr%?i6i%n f%r C%n$in7enc Re6er?e =Ar$ic9e 1*.)>

).*. A#4ini6$ra$i?e c%6$6 =Ar$ic9e 1*.*>

).,. C%n$ri5"$i%n6 in :in# =Ar$ic9e 1*.,>

).. N%n-e9i7i59e c%6$6 =Ar$ic9e 1*.>

)./. Acce8$e# c%6$6

).0. Re?en"e6 %f $2e Ac$i%n

[

annex vii e3h8 expendverif en

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