financial reporting lead partner seminar madrid, 20 october 2008
DESCRIPTION
FINANCIAL REPORTING Lead Partner Seminar Madrid, 20 October 2008 Petra Geitner Senior Finance Officer Katja Ecke, Finance Officer. Content Financial Control Eligibility questions & General Advice. Financial Control. REPORTING PROCESS. DESIGN OF FIRST LEVEL CONTROL SYSTEM. - PowerPoint PPT PresentationTRANSCRIPT
LP Seminar – Madrid – 20-10-2008
EUROPEAN REGIONALDEVELOPMENT FUND
FINANCIAL REPORTING
Lead Partner Seminar
Madrid, 20 October 2008
Petra Geitner Senior Finance Officer
Katja Ecke, Finance Officer
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Content
Financial Control
Eligibility questions & General Advice
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Financial Control
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REPORTING PROCESS
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Legal basis: Art. 16 of R. 1080/2006:
In order to validate expenditure, each Member State shall set up a control system (…)
DESIGN OF FIRST LEVEL CONTROL SYSTEM
4 systems possible:1. Centralised control at MS level by a public administrative body
2. Centralised control at MS level by a private audit firm
3. Decentralised control by controllers selected by the project partner from a
central shortlist
4. Decentralised control by internal or external controller proposed by the project
partner and approved at national level
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Through Public Administrative body:
•Belgium (Walloon Region)
•Czech Republic
•Estonia
•Hungary
•Ireland
•Luxembourg
•Latvia
•Malta
•Poland
•Romania
•Sweden
•Slovenia
•Slovakia
Through Private Audit firm
•Lithuania
CENTRALISED CONTROL SYSTEMS
For more details see:http://www.interreg4c.net/load/Country_Specific_Control_Requirements.pdf
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Controllers selected in a short list:
•Austria
•Bulgaria
•Norway
•Portugal
Controllers selected by project partners and confirmed at national level•Austria (Federal+Land)
•Belgium (Bruxelles Capitale)
•Belgium (Flanders)
•Cyprus
•Denmark
•Finland
•France
•Germany
•Poland (for Marshall offices…)
•Spain
•The Netherlands
•United Kingdom
DECENTRALISED CONTROL SYSTEMS
For more details see:http://www.interreg4c.net/load/Country_Specific_Control_Requirements.pdf
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THE ROLE OF THE PP CONTROLLER
To confirm the expenditure for the PP
• after having checked
The payment date of the costs reported
That all necessary documents concerning receipts, payments and activities
are correctly recorded to ensure the audit trail
The delivery of the co-financed products and services
That progress made is reflected in the report
The compliance of such expenditure with community rules, programme rules
(subsidy contract refering to programme manual + Application form) and national
rules
• on the basis of
Accounting documents and project documentation
100% check (sample only if well justified)
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GUIDANCE TO PPs TO PERFORM CONTROLS
TO BE PUBLISHED SOON
The Programme has issued templates of a Control Report and of a Check List annexed to the Programme Manual to be filled in by the PP’s controller
Programme manual Annex 6
On the basis of these two documents that have to be kept in PP’s files, the PP’s controller issues a Partner control confirmation
Programme manual Annex 5b
The Partner control confirmation will be submitted to the LP
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DESIGNATION OF THE PP CONTROLLERS: PARTICULARITIES OF DECENTRALISED SYSTEMS
There is a compulsory approbation of the first level control controller by the central approbation body of the Member State for PP (including LP) located in Member States that have opted for a decentralised system
This approbation shall be finalised before the end of the first reporting period (31 December for progress report to be submitted on 1 April )
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THE APPROBATION PROCEDURE OF THE PPs CONTROLLERS
The PP proposes a controller to the central approbation body of the Member State. A specific checklist is filled in by the PP for this purpose
The MS checks the information and assesses the qualification and independence of the controller
If OK, the MS issues an approbation certificate to the PP
LP submits individual approbation certificates to the JTS when PP reports for the first time or in case of change of controller
For each progress report, the LP checks that the name of the controller is the same as the authorised one
In case of change of controller, the approbation procedure shall be started again
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THE SPECIFIC ROLE OF THE LP CONTROLLERThe role of the LP controller is to confirm the expenditure for the whole partnership and to submit the Progress Report for the whole project to the JTS
• after having checked that project expenditure is related to the project and correspond to the
delivery status of the partner
the figures in the progress report coming from the individual partners
are correctly summed up
• on the basis of
control confirmations signed off by the PP controller in compliance with
the country specific control requirements
Note that the LP is also a PP. Therefore the LP controller = the PP controller for the LP
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POINTS OF ATTENTION FOR THE LP The LP reports every six months expenditure paid out during the reporting
period in compliance with the information in the Application Form, i.e.
the budget by budget line
the budget by component
the budget by partner
the specifications for external expertise + equipment
the payment forecast
Costs have to be in line with the activities listed in the Application Form
Deviations need to be justified in PR or agreed with JTS beforehand
The LP provides any clarification on Progress Report where requested by JTS. The payment is made within maximum 4 weeks after approval of the Progress Report
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GUIDANCE TO LP CONTROLLERS TO PERFORM CHECKS
TO BE PUBLISHED SOON
There is an additional section for LPs to be filled in the template of the Check List annexed to the Programme Manual
Programme manual Annex 6
On the basis of all documents submitted by the PPs and its own documents as a partner, the LP shall issue a Progress Report including the Lead Partner Control Confirmation signed by LP controller
Programme manual Annex 5a
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POINTS OF ATTENTION FOR THE LP
The LP sumbits to JTS
The Progress Report including the LP’s Control confirmation
The PP control confirmations
In case of decentralised system where controllers are proposed by the PP, the approbation certificate of Member State’s approbation body when partners report for the first time or when there is a change of controller.
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Eligibility Questions & General Advice
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EligibilityEligibility
Eligibility period
Preparation phase: costs are eligible
subject to project approval
within limit of EUR 30,000
For first call: between 1 January 2007 and date of submission of
AF to JTS (for first call = max.15 January 2008)
To be paid out by the end of the first reporting period and to be
reported with Progress Report 1
Project implementation phase: costs are eligible if
incurred after date of MC approval
paid before the end of the reporting period and the finalisation
month quoted in the AF
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EligibilityEligibility
Eligibility of activities outside the EU (Art. 21 of Reg. no.1080/2006)
Activities outside the EU / Norway can be eligible to ERDF or
Norwegian funding if
- contracted and paid by EU or Norwegian partner
- for the benefit of the operation
- explicitly mentioned and justified in the approved application
- within limit of 10% of the operation’s INTERREG IVC budget
NB.: Travel costs of EU partners to places outside the EU (if
foreseen in the AF) eligible to ERDF outside the 10% rule as part of
‘normal’ project expenditure.
0
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EligiblityEligiblity
Ineligible costs
VAT – if recoverable by whatever means
In-kind contributions
Bad debt interests, fines, financial penalties, foreign exchange losses
Expenditure already supported by other subsidies
Revenues – to be deducted from total eligible costs
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General Advice
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AdviceAdvice
Lessons learnt from IIIC Use programme manual as the reference book.
Only costs paid by partners officially listed in the AF can be reported in PR.
Keep in mind that audits can take place beyond the end of the project. Proper documentation is essential - especially for public procurement, calculation of staff cost + indirect administration costs.
Pay particular attention to public procurement rules. Also below European threshold of EUR 206,000, you have to put into competition when you contract goods and services (refer to national + internal rules!).
Base your staff cost calculation on hours actually worked + timesheets.
Do not artificially inflate your administration costs. The link to project has to be obvious and clear. Costs have to be actual.
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AdviceAdvice
Lessons learnt from IIIC
Be coherent in cost allocation to the budget lines + Components
Staff
Administration for personnel employed
Travel and Accommodation by partners in AF only!
Equipment
External Expertise and Services
Sub-Projects for mini-programmes only
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AdviceAdvice
Leassons learnt from IIIC
Be careful with shared costs Responsible partner has to provide to all partners taking over a
share of common costs
request for reimbursement
all relevant supporting documentation Responsibility of each partner to include share of common costs
in own financial report and to obtain confirmation from controller (according to country specific control requirements)
Recommendation:
limit as much as possible shared costs to budget line “external expertise and services”
include procedure in partnership agreement
procedure for sharing and reporting costs to be checked with national controllers of each individual partner concerned.
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AdviceAdvice
Measures for an effective reporting process + FLC
Ensure good communication between LP/PP, coordinators, financial managers and controllers
Include the following points in the partnership agreement Budget by partner by budget line, component
Payment forecast by partner
Deadlines for reporting
Methods / amounts of shared common costs
Exchange rate conversion (one method for the whole partnership)
Make sure that all documents are available on all levels Application Form
Subsidy Contract
Partnership Agreement
Programme Manual
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Further measures for an effective reporting process + FLCHave available the following documents (on PP level):
list of expenditure invoices bank statements procurement documentation: procurement note, terms of reference,
offers/quotes, order form, contract documentation of calculations (if only a share was allocated to the
project) time sheets, employees’ contracts, pay slips proofs for delivery of services and goods (studies, brochures,
newsletters, minutes of meetings, translated letters, participants’ list etc), record of assets
control report incl. control checklist (model in Programme Manual)
Set up a separate account for project expenditure (or separate costs center in accounting system)
AdviceAdvice
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Support from JTS/MA/CA/MS
Programme manual (practical information in grey boxes)
Advice from the JTS
Standardized control confirmations, control reports and checklist
A limited number of quality checks by CA, MA/JTS, MS
Training on financial management for financial managers +
controllers
ConclusionConclusion
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Thank you for your attention!