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FP6 Financial Info & FAQs --> Contract Negotiation --> CPFs - misc --> CPFs - Misc FAQs


1. What kind of financial documents must be added to the main proposal’s documents? When it comes to financial statements, should they be audited? on what currency basis? 2. If 2005 financials are required but are not ready yet, what can be done? 3. For a periodical reporting - do we need to have it audited by our auditors?


1. The financial (as opposed to legal forms, such as Certificate of Incorporation etc) documents required for the coordinator (and in certain circumstances for other partners) are laid down in form A5 of the contract preparation forms. Basically the coordinator needs to submit 3 years of audited financial statements, in the currency used by the partner for preparation of audited financial statements, normally, in the local currency (although some organisations, including some large companies in Israel, for example, report in US dollars, and very occasionally in Pounds or foreign other currency, where the shares are quoted on “overseas Stock Exchanges – in these cases the audited accounts are in that currency and form the basis of documents to be submitted and form A6). In addition the coordinator needs to complete the form A6 from audited accounts, again in the normal reporting currency (usually the local currency). The accounts are presented according to GAAP rules that the organisation has used for its audited accounts. The audited accounts are not a reworked set of accounts for EU purposes only. Please download notes for STREP’s from: http://www.finance-helpdesk.org/front/ShowCategory.aspx?CatId=6 (Contract preparation forms (CPFs) and Negotiation guidance notes)


2. Only audited accounts can be submitted, therefore the 2005 audited accounts (assuming year end 31st December) should be used now if available, but 2004 accounts can be used if they cover a period which ends no more than 24 months prior to submission date can be used (although anything more than 18 months old may raise some eyebrows in EU). Note that partners do not have to submit all this financial information, except if specifically requested, and notably not form A6. But if accounts and/or form A6 are required they can be (or perhaps should be) submitted to the PO direct and not via the coordinator. If the Coordinator requires for his own satisfaction to test partners’ financial viability, try to get him to accept some form of independent report from the organisation’s auditor or bankers etc. We have seen submissions with draft accounts for the latest year with audited accounts for 2 or 3 previous years, so as to indicate improved financial standing, but this is exceptional and not the practice generally accepted. On the other hand newly incorporated organisations may have only draft accounts available with no previous years. In this case the situation should be explained to the PO and draft accounts, perhaps with a “review” from the auditors, will need to be used.


3. The auditors need to be independent and qualified/certified to act as auditors in the State where the organisation is resident. The EU “interdepartmental audit certificate working group” suggests that the “normal” auditors would normally be used because of their familiarity with the organisation (and therefore audit report fees for work should be lower). However, this is not a stipulation and our opinion is that it is best to use an auditor familiar with the FP6 reporting requirements, rather than using the organisation’s own auditor, who will need to invest considerable time learning the EU material. In addition auditors who have experience with EU contracts will have already developed their audit programmes for completion by staff and their initial standard questionnaires and requests for documents and information. This will save both their and the clients time, and therefore they should be able to produce the material quickly and presumably more economically.

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