audits in horizon 2020 -...
TRANSCRIPT
![Page 1: Audits in Horizon 2020 - cache.media.education.gouv.frcache.media.education.gouv.fr/file/2015/27/1/... · •Statistical method: Monetary Unit Sampling (MUS) •Audits of biggest](https://reader033.vdocument.in/reader033/viewer/2022041516/5e51338af70835547d4bba84/html5/thumbnails/1.jpg)
Research and Innovation
Audits in Horizon 2020
![Page 2: Audits in Horizon 2020 - cache.media.education.gouv.frcache.media.education.gouv.fr/file/2015/27/1/... · •Statistical method: Monetary Unit Sampling (MUS) •Audits of biggest](https://reader033.vdocument.in/reader033/viewer/2022041516/5e51338af70835547d4bba84/html5/thumbnails/2.jpg)
Research and Innovation
Agenda
1. Types of Controls according to Article 22 MGA
2. Types and Levels of Audits in Horizon 2020
3. The Audit Cycle in Horizon 2020
2
![Page 3: Audits in Horizon 2020 - cache.media.education.gouv.frcache.media.education.gouv.fr/file/2015/27/1/... · •Statistical method: Monetary Unit Sampling (MUS) •Audits of biggest](https://reader033.vdocument.in/reader033/viewer/2022041516/5e51338af70835547d4bba84/html5/thumbnails/3.jpg)
Research and Innovation
Agenda
1. Types of Controls according to Article 22 MGA
2. Types and Levels of Audits in Horizon 2020
3. The Audit Cycle in Horizon 2020
3
![Page 4: Audits in Horizon 2020 - cache.media.education.gouv.frcache.media.education.gouv.fr/file/2015/27/1/... · •Statistical method: Monetary Unit Sampling (MUS) •Audits of biggest](https://reader033.vdocument.in/reader033/viewer/2022041516/5e51338af70835547d4bba84/html5/thumbnails/4.jpg)
Research and Innovation
Types of controls: Article 22 MGA
• a) Checks (any aspect)
• b) Reviews (technical + scientific aspects)
• c) Audits (financial aspects)
• d) Investigations (illegal aspects)
• (Special cases)
• Any form of control can apply to third parties and subcontractors (Article 10-16 MGA)
As beneficiary you are also responsible for
these controls 4
![Page 5: Audits in Horizon 2020 - cache.media.education.gouv.frcache.media.education.gouv.fr/file/2015/27/1/... · •Statistical method: Monetary Unit Sampling (MUS) •Audits of biggest](https://reader033.vdocument.in/reader033/viewer/2022041516/5e51338af70835547d4bba84/html5/thumbnails/5.jpg)
Research and Innovation
Checks
• Control implementation of the action
• Verify compliance with legal obligations
• Assess deliverables and reports
• By Commission itself or external persons / bodies
• Can relate to any aspect of the grant
• At any moment and no time restrictions
5
![Page 6: Audits in Horizon 2020 - cache.media.education.gouv.frcache.media.education.gouv.fr/file/2015/27/1/... · •Statistical method: Monetary Unit Sampling (MUS) •Audits of biggest](https://reader033.vdocument.in/reader033/viewer/2022041516/5e51338af70835547d4bba84/html5/thumbnails/6.jpg)
Research and Innovation
Reviews
• Mainly concern technical and scientific implementation of the action
• Can include financial and budgetary aspects
• By Commission itself or external experts
• May include on-the-spot visits or review meetings
• Review report and 30 days “contradictory review procedure”
• Up to 2 years after payment of the balance
6
![Page 7: Audits in Horizon 2020 - cache.media.education.gouv.frcache.media.education.gouv.fr/file/2015/27/1/... · •Statistical method: Monetary Unit Sampling (MUS) •Audits of biggest](https://reader033.vdocument.in/reader033/viewer/2022041516/5e51338af70835547d4bba84/html5/thumbnails/7.jpg)
Research and Innovation
Audits
• Mainly concern financial implementation of the action
• Can include technical and other aspects
• By Commission itself or external auditors
• Usually includes on-the-spot visit and desk review
• Audit report and 30 days “contradictory audit procedure”
• Up to 2 years after payment of the balance
7
![Page 8: Audits in Horizon 2020 - cache.media.education.gouv.frcache.media.education.gouv.fr/file/2015/27/1/... · •Statistical method: Monetary Unit Sampling (MUS) •Audits of biggest](https://reader033.vdocument.in/reader033/viewer/2022041516/5e51338af70835547d4bba84/html5/thumbnails/8.jpg)
Research and Innovation
Investigations
• By European Anti-Fraud Office (OLAF)
• Discover fraud, corruption or illegal activities
• Usually includes on-the-spot checks and inspections
• At any moment during and after the action
8
![Page 9: Audits in Horizon 2020 - cache.media.education.gouv.frcache.media.education.gouv.fr/file/2015/27/1/... · •Statistical method: Monetary Unit Sampling (MUS) •Audits of biggest](https://reader033.vdocument.in/reader033/viewer/2022041516/5e51338af70835547d4bba84/html5/thumbnails/9.jpg)
Research and Innovation
Special case: ECA
• Checks and audits by the European Court of Auditors (ECA)
• ECA is external auditing body for all European institutions
• Usually includes on-the-spot visit and desk review
9
![Page 10: Audits in Horizon 2020 - cache.media.education.gouv.frcache.media.education.gouv.fr/file/2015/27/1/... · •Statistical method: Monetary Unit Sampling (MUS) •Audits of biggest](https://reader033.vdocument.in/reader033/viewer/2022041516/5e51338af70835547d4bba84/html5/thumbnails/10.jpg)
Research and Innovation
Special case: International Organisations
• Checks, reviews, audits and investigations also apply to international organisations
• By European Commission, European Anti-Fraud Office (OLAF) and European Court of Auditors (ECA)
• Special agreements between the European Union and the international organisation may apply 10
![Page 11: Audits in Horizon 2020 - cache.media.education.gouv.frcache.media.education.gouv.fr/file/2015/27/1/... · •Statistical method: Monetary Unit Sampling (MUS) •Audits of biggest](https://reader033.vdocument.in/reader033/viewer/2022041516/5e51338af70835547d4bba84/html5/thumbnails/11.jpg)
Research and Innovation
Consequences of findings (Article xx MGA)
• Rejection of ineligible costs (42)
• Reduction of the grant (43)
• Recovery of undue amounts (44)
• Administrative and financial penalties (45)
• Suspension of payments (48)
• Suspension of the action implementation (49)
• Termination of the agreement or participation (50)
• “Extension of findings to other grants”
• OLAF findings may lead to criminal prosecution 11
![Page 12: Audits in Horizon 2020 - cache.media.education.gouv.frcache.media.education.gouv.fr/file/2015/27/1/... · •Statistical method: Monetary Unit Sampling (MUS) •Audits of biggest](https://reader033.vdocument.in/reader033/viewer/2022041516/5e51338af70835547d4bba84/html5/thumbnails/12.jpg)
Research and Innovation
Extension of findings
• Systemic or recurrent errors detected
• Extension of findings to non-audited/reviewed reporting periods of this grant
• Extension to any other H2020 grant of this beneficiary
• Concerns on-going and closed grants
• Up to 2 years after payment of the balance
12
![Page 13: Audits in Horizon 2020 - cache.media.education.gouv.frcache.media.education.gouv.fr/file/2015/27/1/... · •Statistical method: Monetary Unit Sampling (MUS) •Audits of biggest](https://reader033.vdocument.in/reader033/viewer/2022041516/5e51338af70835547d4bba84/html5/thumbnails/13.jpg)
Research and Innovation
Agenda
1. Types of Controls according to Article 22 MGA
2. Types and Levels of Audits in Horizon 2020
3. The Audit Cycle in Horizon 2020
13
![Page 14: Audits in Horizon 2020 - cache.media.education.gouv.frcache.media.education.gouv.fr/file/2015/27/1/... · •Statistical method: Monetary Unit Sampling (MUS) •Audits of biggest](https://reader033.vdocument.in/reader033/viewer/2022041516/5e51338af70835547d4bba84/html5/thumbnails/14.jpg)
Research and Innovation
Level of controls and audits
• Ex-ante controls: Certificate on the Methodology, Large Research Infrastructure (LRI)
• Ex-post controls:
First level audit: Certificate on the Financial Statements (CFS) auditor to be selected by
beneficiary
Second level audit: Financial audits, investigations by European Commission
(Common Audit Service), ECA, OLAF 14
![Page 15: Audits in Horizon 2020 - cache.media.education.gouv.frcache.media.education.gouv.fr/file/2015/27/1/... · •Statistical method: Monetary Unit Sampling (MUS) •Audits of biggest](https://reader033.vdocument.in/reader033/viewer/2022041516/5e51338af70835547d4bba84/html5/thumbnails/15.jpg)
Research and Innovation
Certificate on the Methodology (CoM)
• 2 types: CoM / CoMAv
• Optional: Ex-ante certification of methodology for average personnel costs (CoMAv) and indirect costs (CoM)
15
• 2 types: CoM / LRI
• Optional: Ex-ante certification of the methodology (CoM) for unit costs (average personnel costs)
• Obligatory: Large Research Infrastructure (LRI)
![Page 16: Audits in Horizon 2020 - cache.media.education.gouv.frcache.media.education.gouv.fr/file/2015/27/1/... · •Statistical method: Monetary Unit Sampling (MUS) •Audits of biggest](https://reader033.vdocument.in/reader033/viewer/2022041516/5e51338af70835547d4bba84/html5/thumbnails/16.jpg)
Research and Innovation
Certificate on the Financial Statements (CFS)
• Threshold: € 375.000 EU contribution
• Certificate necessary every time threshold is exceeded and "counter" set back to zero
• Costs for CFS eligible under category "Subcontracting costs"
16
• Threshold: € 325.000 actual + unit costs (direct)
• 1 certificate at the end of the action (together with payment request)
• Costs for CFS eligible under category "Costs for goods or services"
![Page 17: Audits in Horizon 2020 - cache.media.education.gouv.frcache.media.education.gouv.fr/file/2015/27/1/... · •Statistical method: Monetary Unit Sampling (MUS) •Audits of biggest](https://reader033.vdocument.in/reader033/viewer/2022041516/5e51338af70835547d4bba84/html5/thumbnails/17.jpg)
Research and Innovation
Financial audits: Second level audits
• Up to 5 years after the end of the project = activities foreseen by Annex I
• "Extrapolation procedure" for systematic errors
No contradictory process
17
• Up to 2 years after payment of the balance
• "Extension of audit findings" for systematic errors
90 days contradictory process
![Page 18: Audits in Horizon 2020 - cache.media.education.gouv.frcache.media.education.gouv.fr/file/2015/27/1/... · •Statistical method: Monetary Unit Sampling (MUS) •Audits of biggest](https://reader033.vdocument.in/reader033/viewer/2022041516/5e51338af70835547d4bba84/html5/thumbnails/18.jpg)
Research and Innovation
18
Common Support Center which will ensure :
That all beneficiaries receive the same experience throughout the FP
A consistent application of a single set of rules for participation and dissemination in Horizon 2020 across all components of the FP.
A consistent interpretation of the rules for all instruments and implementing bodies
Efficiency gains from cost reduction, job savings and rationalisation of processes and procedures
![Page 19: Audits in Horizon 2020 - cache.media.education.gouv.frcache.media.education.gouv.fr/file/2015/27/1/... · •Statistical method: Monetary Unit Sampling (MUS) •Audits of biggest](https://reader033.vdocument.in/reader033/viewer/2022041516/5e51338af70835547d4bba84/html5/thumbnails/19.jpg)
Research and Innovation
19
Common Support Center will consist of:
Common Legal Support Service
Common Audit Service Common Business Processes Service Common IT Service Common Service for Information and Data
![Page 20: Audits in Horizon 2020 - cache.media.education.gouv.frcache.media.education.gouv.fr/file/2015/27/1/... · •Statistical method: Monetary Unit Sampling (MUS) •Audits of biggest](https://reader033.vdocument.in/reader033/viewer/2022041516/5e51338af70835547d4bba84/html5/thumbnails/20.jpg)
Research and Innovation
Common Audit Service
• Certification on Methodology (unit costs for average personnel costs)
• Ex-ante assessment for Large Research Infrastructure (LRI) costs
• Financial audits (second level audits by Commission or external auditors) for all H2020 actions of:
All Research related Directorate-Generals of the European Commission
Executive Agencies
Joint Undertakings
20
![Page 21: Audits in Horizon 2020 - cache.media.education.gouv.frcache.media.education.gouv.fr/file/2015/27/1/... · •Statistical method: Monetary Unit Sampling (MUS) •Audits of biggest](https://reader033.vdocument.in/reader033/viewer/2022041516/5e51338af70835547d4bba84/html5/thumbnails/21.jpg)
Research and Innovation
Agenda
1. Types of Controls according to Article 22 MGA
2. Types and Levels of Audits in Horizon 2020
3. The Audit Cycle in Horizon 2020
21
![Page 22: Audits in Horizon 2020 - cache.media.education.gouv.frcache.media.education.gouv.fr/file/2015/27/1/... · •Statistical method: Monetary Unit Sampling (MUS) •Audits of biggest](https://reader033.vdocument.in/reader033/viewer/2022041516/5e51338af70835547d4bba84/html5/thumbnails/22.jpg)
Research and Innovation
Audit cycle Audit Strategy & Selection
22
Audit Planning & Preparation
Implementation of Audit Results
Reporting & Audit Closure
Examination on site
![Page 23: Audits in Horizon 2020 - cache.media.education.gouv.frcache.media.education.gouv.fr/file/2015/27/1/... · •Statistical method: Monetary Unit Sampling (MUS) •Audits of biggest](https://reader033.vdocument.in/reader033/viewer/2022041516/5e51338af70835547d4bba84/html5/thumbnails/23.jpg)
Research and Innovation
23
Why auditing is so important DG Declaration of Assurance
I, the undersigned Director-General, declare that the information contained
in this report gives a true and fair view. I state that I have reasonable assurance […] which is based on my own judgement and on the information at my disposal […] However the following reservation should be noted: Brussels, 31 March 2015 "Signed" The Director-General
![Page 24: Audits in Horizon 2020 - cache.media.education.gouv.frcache.media.education.gouv.fr/file/2015/27/1/... · •Statistical method: Monetary Unit Sampling (MUS) •Audits of biggest](https://reader033.vdocument.in/reader033/viewer/2022041516/5e51338af70835547d4bba84/html5/thumbnails/24.jpg)
Research and Innovation
Audit Strategy & Selection
• Statistical method: Monetary Unit Sampling (MUS)
• Audits of biggest beneficiaries
• Risk based analysis: high amounts, large proportion of subcontracting, new beneficiaries, etc.
• Audits on request
• Fraud-risk audits
24
![Page 25: Audits in Horizon 2020 - cache.media.education.gouv.frcache.media.education.gouv.fr/file/2015/27/1/... · •Statistical method: Monetary Unit Sampling (MUS) •Audits of biggest](https://reader033.vdocument.in/reader033/viewer/2022041516/5e51338af70835547d4bba84/html5/thumbnails/25.jpg)
Research and Innovation
Audit Planning & Preparation
• Concrete selection of actions to be audited
• Initial contact with responsible auditors to agree on dates and logistics for audit visit
• Formal “Letter of announcement” of audit including detailed annex with information and documents to be provided prior and during the on site examination
25
![Page 26: Audits in Horizon 2020 - cache.media.education.gouv.frcache.media.education.gouv.fr/file/2015/27/1/... · •Statistical method: Monetary Unit Sampling (MUS) •Audits of biggest](https://reader033.vdocument.in/reader033/viewer/2022041516/5e51338af70835547d4bba84/html5/thumbnails/26.jpg)
Research and Innovation
Examination on site
26
Opening
meeting
Analysis
of Systems
in place
Test of systems
and substantive
evidence
Closure
meeting
Assessment
after on site
visit
Usually within 4-5 working days (one week) (…)
General infor-
mation on:
• organisation
• projects
• financial
administration
• internal con-
trol systems
Audit agenda
for the week
Collection of information
and audit evidence,
analysis of documents,
interviews with
researchers, project
presentations, physical
inspections, etc.
Discussion
on prelimi-
nary audit
findings and
observations
Indication of
further audit
procedure
![Page 27: Audits in Horizon 2020 - cache.media.education.gouv.frcache.media.education.gouv.fr/file/2015/27/1/... · •Statistical method: Monetary Unit Sampling (MUS) •Audits of biggest](https://reader033.vdocument.in/reader033/viewer/2022041516/5e51338af70835547d4bba84/html5/thumbnails/27.jpg)
Research and Innovation
Reporting & Audit Closure
• Draft audit report
• Internal quality check
• Contradictory audit procedure: 30 days for beneficiary to send comments and “Letter of representation”
• Final audit report
• Internal committees and final quality check
• Audit closure with formal “Letter of Closure” of audit and indication of further procedures for the implementation of audit results 27
![Page 28: Audits in Horizon 2020 - cache.media.education.gouv.frcache.media.education.gouv.fr/file/2015/27/1/... · •Statistical method: Monetary Unit Sampling (MUS) •Audits of biggest](https://reader033.vdocument.in/reader033/viewer/2022041516/5e51338af70835547d4bba84/html5/thumbnails/28.jpg)
Research and Innovation
Implementation of Audit Results
• Managed by the operational services in charge of project management
• Normally adjustment of ineligible costs
• Possibility of extension of audit findings to other grants in case of systemic and recurrent errors
• Administrative and financial penalties
• Further financial and legal consequences: reduction of grant, suspension of payments, termination of grant, OLAF investigations, etc.
28
![Page 29: Audits in Horizon 2020 - cache.media.education.gouv.frcache.media.education.gouv.fr/file/2015/27/1/... · •Statistical method: Monetary Unit Sampling (MUS) •Audits of biggest](https://reader033.vdocument.in/reader033/viewer/2022041516/5e51338af70835547d4bba84/html5/thumbnails/29.jpg)
Research and Innovation
Obligations of beneficiaries
• Obligation to keep records and other supporting documentation for 5 years (3 years for low value grants ≤ EUR 60.000) – Article 18 MGA
• Obligation to make available all records and documents during checks, reviews, audits or investigations and to keep them until the end of these procedures
• Original documents or authorised digital copies
• All evidence must be verifiable, auditable and available (no objection of data protection or confidentiality) 29