Audit Certificates are now formally called "Certificates on Financial Statements"
· Certificate is compulsory whenever the cumulative amount of interim payments and balance payments to a participant is equal to or more than 375,000 Euros.
· For indirect actions up to two years, only one certificate shall be requested.
· No certificates if action is entirely reimbursed by means of lump sums or flat rates
· The Certification process itself is new, see link below.
Having beneficiaries provide audit certificates with cost statements allows payments to be made more quickly and enables each payment period be considered as final. This is all for the clear benefit of all participants and should remove a serious previous obstacle to smooth running of projects.
For each period for which a certificate is required, each beneficiary shall provide a certificate prepared and certified by an external auditor, certifying that the costs incurred during that period meet the conditions required by the agreement. The certificate should expressly state the amounts that were subject to verification. Where third parties’ costs are claimed under the contract, such costs shall be audited in accordance with the provisions of the contract.
The cost of this certification is an eligible cost under the activity relating to Management of the consortium. Each contractor is free to choose any qualified external auditor, including its usual external auditor, provided that it meets the cumulative following professional requirements:
1. the external auditor must be independent from the contractor;
2. the external auditor must be qualified to carry out statutory audits of accounting documents in accordance with the 8th Council directive 84/253/EEC of 10 April 1984 or similar national regulations.
Certificates can be provided by independent auditors qualified under the 8th Directive.
A beneficiary that is a public body, secondary and higher education establishments and research organisations may opt for a competent public officer to provide certification, provided that the relevant national authorities have established the legal capacity of that competent public officer to audit that public body.
Certification by external auditors according to the contract does not diminish the liability of contractors according to the contract nor the rights of the Community with respect to carrying out its own controls and audits.
The reasonable cost of audit certificates should be included in the management costs of a project and are then 100% refundable (except for VAT) by the Commission within its contribution. As previously mentioned, overheads can not be put on this cost as it is regarded as a sub-contract.
In FP7, one of the tasks for the auditor will be to validate claims that a company is indeed an SME.
Another will be to certify that where average personnel costs are being used in a claim, they are a representative average of the real costs.
Q: If none of the partners in a proposal request an EC Contribution equal to or over 375,000 Euros in total, does this mean, that none of them need to have an audit at the end of the project?