The European Research Council

Transcription

1 The European Research Council Toni Amanda Skeen ERC Executive Agency Audit & Ex-post Controls Unit C4 AUDIT ERCEA Grant Management Workshop, Lyon, 7 May 2014

2 Audit Management & Implementation Overview Objective/Background The Audit Process Common Errors Best Practice How to get Things Right - Personnel Costs What's New (incl. H2020) Key Messages 2

3 Objective Help You Avoid errors and subsequent reimbursement of ERC funds Make improvements to your internal control systems 3

4 Background Why Audit? Tax payers' money Grant Agreement = justification of means not outputs: Check eligibility of costs claimed (legality & regularity) Advice function Safeguard 4

5 Background Audit Strategy and Co-ordination Common audit strategy ( ) used by 5 Research DG s and 2 Executive Agencies Co-ordinated and harmonised approach Strands: Representative (MUS) or Corrective (risk-based) TYPE OF AUDIT: FINANCIAL: ERC, Joint Audits or external audit firms TECHNICAL: Audit and Review Systematic & non-systematic errors 5

6 The Audit Process Sampling Selection Planning & Organisation Pre-Audit Information & Preparation Errors detected whilst preparing the audit = error in report On-site Visit Opening Meeting, Field Work & Closing Meeting Audit Report Writing Draft Report -> Contradictory Procedure -> Final Report 6

7 Common Errors All Cost Categories Lack of Supporting Documents Non-compliance to EU Financial Rules Non-compliance to HI's Own Internal Procedures/Normal Practices 7

8 Common Errors Time-sheets/Personnel Costs Time-Sheets: Absent, incomplete, not global, not signed, cut-off at contractual hours and/or do not reconcile with HR/travel records Productive time includes non-productive days Personnel Costs: Incorrect method of calculating hourly rate Based on Budgeted rather than Actual Costs People not directly employed nor paid by the beneficiary 8

9 Common Errors Do not forget Art II 14.1a (actual) If you use estimates, because actuals are not available at the moment of submission, declare so in the reporting Correct in a separate Form C in the following period 9

10 Best Practice Accounting Do not book entries on Pro-forma invoices only Double-check VAT excluded from invoices charged Have a clear conversion policy for non-euro invoices Have a clear system for apportioning common expenses between projects 10

11 Best Practice Accounting Have a clear methodology for charging internal invoices and costs of shared facilities Remember 3 Essential Elements: Follow usual accounting practice All costs are accounted/booked Relevant supporting documents are archived 11

12 Best Practice Personnel costs Team members = employment contract with HI Global Time-Recording system is used Researcher salaries comply with HR salary grids Bonus Payments respect criteria defined in Guide Clear guidelines for Teleworking Administrative support staff Proportionally charged as a Direct cost if it is the normal HI procedure and mentioned in DoW 12

13 Best Practice Travel costs Team Members only Ensure PI's avoid excessive/long-duration trips Introduce travel pre-authorisation procedure Maintain boarding cards and conference agendas Encourage production of small mission report Keep s to support set-up of any visits 13

14 Best Practice Equipment & Consumables Follow HI Depreciation procedures Follow HI Asset Registration procedures Follow HI procedures for accounting classification as equipment or consumable (e.g. large piece of equipment with small component parts) Exclude overhead elements from methodology used to charge back shared equipment Exclude overhead elements from consumables purchased via internal warehouse 14

15 Best Practice Equipment Procurement Respect internal procurement procedures Respect EU Public Procurement Principles Do not directly award additional contracts to the same contractor Clearly document reasons for using Single Source Providers Do not artificially split tenders into smaller contracts to avoid public tendering calls. 15

16 Best Practice All Other Cost Categories Ensure costs charged under the correct budget heading Ensure costs eligible under your own procedures Avoid excessive and uneconomic costs Clearly justify all Visiting Expert costs Avoid unnecessary expenses made in the last few months/weeks of the project 16

17 Best Practice Choice of CFS Auditor Clearly justify the selection of the CFS Auditor Insist on an on-site visit Ensure: a reasonable amount of time is spent on-site an audit trail of the work done is maintained Auditors are proficient in local legislation & FP rules 17

18 How to Get Things Right Personnel Costs TIME-SHEETS Highly recommend using a Global Time-Recording System recording total productive hours spent on ALL activities (reconciliation of total hours for personnel working on several projects during the same period) together with the recording of all non-productive time (holidays, illness, etc ). Report Actual hours and not contractual hours Try to avoid percentage applicators Ensure time-sheets reconcile with HR absence records and Travel Department mission requests 18

19 How to Get Things Right Personnel Costs Time-sheets may not be necessary if: a person is working 100% on a project and has a specific contract/job description to this effect, AND there is appropriate/alternative evidence to support the declared working arrangements and this is compliant with the usual accounting practices of the beneficiary Experience to date has shown that time-sheets are the easiest/simplest way of providing evidence of a person's time. 19

20 How to Get Things Right Personnel Costs total annual personnel costs for the employer total annual productive hours for the employee or Standard annual productive hours for the organisation HOURLY Personnel Rate X ERC HOURS PERSONNEL COSTS declared 20

21 What's New European Court of Auditors Sampling: 10 cost items selected from each declaration audited Extrapolation of the findings to the whole project Audits in H2020: Common Audit Service will take over H2020 audits Will serve all the bodies of the Research family Audit Strategy focussed on risk & fraud prevention Audits limited to 2 years after final payment 21

22 What's New H Standard Productive Time 1720 Fixed Hours for full-time employees/pro-rata for part-time Individual Annual Productive Hours Annual workable hours based on employment contract plus overtime minus absences Standard Annual Productive Hours calculated per entity, category of personnel or cost centre Must be at least 90% of the standard annual workable hours 22

23 What's New H2020 Personnel Costs Standard remuneration Total Remuneration Additional remuneration Basic Salary "Mandatory extras" Fixed by law or by contract to remunerate the main activity of the employee Payment not subject to discretion by the employer Not linked to a specific project Examples: 13 th month, hazardous work allowance, etc. Other bonuses Only eligible for non-profit legal entities Subject to specific eligibility criteria Maybe triggered by the participation in a specific project Hourly rate 23

24 Key Messages Sound financial planning & follow-up from the start PI s be fully informed of the legal/financial guidelines Avoid reckless/unnecessary expenditure in final project stages Be pro-active & seek advice as soon as issue arises Audit = opportunity for constructive dialogue/advice 24

25 Questions or Suggestions? Mail box: Please do not forget to complete/leave behind the evaluation forms! 25