1. www.miljo.chalmers.se GMV – Centre for Environment and Sustainability How we receive money to the project - How funds and information flow in INTERREG III programmes Katarina Gårdfeldt, Göteborg University

2. www.miljo.chalmers.se GMV – Centre for Environment and Sustainability Issues to be addressed How do the project get its money? What do we need to do for it? Audit Financial reports Progress reports

3. www.miljo.chalmers.se GMV – Centre for Environment and Sustainability Reporting / Payment Procedure Joint Secretariat / PA Lead Partner Lead Partner submits activity and audited financial report Paying Authority effects payment to Lead Partner Project Partners Submit activity and audited financial reports to Lead Partner ReportsPayments Lead Partner effects payments to Project Partners PA - Paying Authority European Commission Joint Secretariat / PA submit Payment Request Europ. Commission effects payment to PA

4. Reporting / Payment procedure Lead PartnerJoint Secretariat P 1 P 2 P 3 Project Partners Pre-filled reporting forms Reporting period Jan-Jun / Jul-Dec Project Implementation 1 Sep / 1 Mar Progress Report Payment Notification After all open questions are clarified PA Answers Clarification Check of PR Preparation of payment PA Payment

5. www.miljo.chalmers.se GMV – Centre for Environment and Sustainability First level control (Project auditors, JS, PA) Second level control (Task Force Financial Control) Third level control (winding-up body) acc. to Art. 4 and 9 of Reg. 438/2001 5% checks (sample checks on operations) Winding-up acc. to Art. 15 of Reg. 438/2001 The levels of financial control

6. www.miljo.chalmers.se GMV – Centre for Environment and Sustainability 1. Auditor‘s role and tasks 2. Requirements for auditors 3. Auditor certificate of proficiency 4. Procedure – How? 5. Recommendations 6. Confirmation by an independent auditor 7. Country specific provisions 8. How to make it work? First level controls - Certification of Expenditure

7. ELIGIBLE? & RELATED TO THE PROJECT? NOT ELIGIBLE? NOT RELATED TO THE PROJECT?

8. www.miljo.chalmers.se GMV – Centre for Environment and Sustainability AUDITOR‘S ROLE AND TASKS Certifying the financial expenditure by checking the validity and the correctness of the invoices Declaring the proper use of funds (eligibility etc) Confirming the disbursement of the national pro-rata co-financing Confirming that the financial and accounting statements drawn up by the partners are realiable & the expenditure declared is eligible!

9. REQUIREMENTS FOR AUDITORS Independent from the project‘s activities, finances (independent organisational unit) Familiar with accounting and ERDF rules, especially the rules concerning eligible expenditure It is recommended to use external certified auditors, who are experienced in (transnational) auditing of EU-funded projects AUDIT GUIDELINES! INDEPENDENT QUALIFIED

10. www.miljo.chalmers.se GMV – Centre for Environment and Sustainability “AUDITOR CERTIFICATE OF PROFICIENCY“ New procedure to be applied by the III B JS: To confirm that all of the partner auditors are familiar with the relevant regulations and rules, project activities, and documents

11. Being familiar with all the relevant documents; Application form, Programme Manual, Audit Guidelines etc. Performing on-the-spot checks Verifying that the activities have actually taken place & goods and services have been delivered to project Examining invoices and payments  either 100% or by using a sampling method Checking that the expenditure is reported only once Recording all the verifications! PROCEDURE - HOW?

12. www.miljo.chalmers.se GMV – Centre for Environment and Sustainability

13. www.miljo.chalmers.se GMV – Centre for Environment and Sustainability Audit Confirmation "Confirmation of project auditing-PP form" should be given to the auditors of the individual Project Partners. Sign it and submit it to the project's Lead Partner auditor The collected forms should be kept within the LP organisation for possible further controls, e.g. by 2nd level auditors, EU Court of Auditors, Commission, national authorities, etc.

14. www.miljo.chalmers.se GMV – Centre for Environment and Sustainability Centralised first level controls = auditing only by the national authorities LEAD PARTNERS AND PARTNERS FROM Latvia, Lithuania, Poland Estonia – for projects approved from January 2005 on  Implications for the practice! COUNTRY SPECIFIC PROVISIONS

15. www.miljo.chalmers.se GMV – Centre for Environment and Sustainability www.bsrinterreg.net See section "How to implement", subsection "Downloads“ Information on 1st level audit activity in Poland, Latvia, Lithuania and Estonia (section "How to implement", subsection "Auditing") Revised Audit Guidelines

16. www.miljo.chalmers.se GMV – Centre for Environment and Sustainability Overview of relevant regulations and rules  Council Regulation (EC) No 1260/1999 – on Structural Funds  Commission Regulations (EC): >No 1685/2000+No 448/2004 – Eligibility of expenditure >No 438/2001+No 2355/2002, No 448/2001– Management and control systems, Financial corrections >No 1159/2000 – on information and publicity measure  INTERREG III guidelines  National rules and regulation (national, regional, local level)

17. www.miljo.chalmers.se GMV – Centre for Environment and Sustainability Expenditures must be… -actually paid out by eligible partners within the project period; -related to the products/services that have actually been delivered; -directly linked to the approved budget and must not lead to exceeded budgets; -directly related to the project implementation; -related to operations that have been subject to Community rules; -Revenues must be deducted from the reported costs

18. www.miljo.chalmers.se GMV – Centre for Environment and Sustainability Expenditures must be… -not claimed before under this or any other EU financed programme (no double financing); -supported by relevant documents (invoices, account. documents…) -properly accounted, certified, audited and reported within the specified period by the responsible bodies to the Joint Secretariat; -the general principles of efficiency, good value for money, economy, expediency and legality of all actions to be applied; -included under a category of expenditure listed in the budget

19. www.miljo.chalmers.se GMV – Centre for Environment and Sustainability Budget lines

20. www.miljo.chalmers.se GMV – Centre for Environment and Sustainability Personnel (incl. OH) The cost of staff (salaries including tax) directly engaged in the operation (“internal hours”)

21. www.miljo.chalmers.se GMV – Centre for Environment and Sustainability Personnel (incl. OH) Overheads e.g. indirect administrative costs such as costs for office accommodation - electricity, rent, insurance, fax, phone, photocopies, Internet fees, heating, water, etc. => directly linked to the project activities

22. www.miljo.chalmers.se GMV – Centre for Environment and Sustainability Meetings and dissemination -Costs related to organising and participating in meetings and seminars -Costs related to all aspects of promotion and publications specific to the project

23. www.miljo.chalmers.se GMV – Centre for Environment and Sustainability Travel and accommodation -costs for: travel, accommodation, subsistence allowances -related to project activities -economy class travel on public transport

24. www.miljo.chalmers.se GMV – Centre for Environment and Sustainability External expertise -all payments towards external bodies that realise a temporary and specific work in the frame of the project -sub-contracting of partners is not possible

25. www.miljo.chalmers.se GMV – Centre for Environment and Sustainability Recommendations Small scale investments Other costs and equipment Check carefully => if all costs are clearly linked to the project, check budget => if there is a complete and clear documentation => if the calculations are understandable and transparent

26. www.miljo.chalmers.se GMV – Centre for Environment and Sustainability Financial reports The financial report (FR) has to provide information about:  allocated costs per work package (FR I)  used financial sources and the confirmation by an independent auditor (FR II)  other costs, equipment and in kind contribution (FR IIIa)  small scale investments carried out in the reporting period (FR IIIb)  changes of non-eligible budgets  division of eligible expenditures by PP and reporting period/MS

27. www.miljo.chalmers.se GMV – Centre for Environment and Sustainability Progress report Consists of Activity reports, the basis for monitoring the progress in the project

28. www.miljo.chalmers.se GMV – Centre for Environment and Sustainability ACTIVITY REPORT aims to Monitor progress Means of knowing projects and their activities better Basis for evaluating project expenses Essential part of the project’s auditing, the basis for evaluating the costs

29. www.miljo.chalmers.se GMV – Centre for Environment and Sustainability Progress report Activity Reports General information, summary description of the project Activities and outputs, achievements of the project so far, Any changes on the general project Main co-ordination activities WP information Accumulated results Project implementation status

30. www.miljo.chalmers.se GMV – Centre for Environment and Sustainability Good Practice in ScanBalt Campus ! LP will provide a manual to PP containing the following information: Time schedule (including dates for financial and progress reports) Project-internal documents to be used by all PP (e.g. time sheets, list of invoices, budget lines etc) Reporting procedure Most important information concerning eligibility of costs

31. www.miljo.chalmers.se GMV – Centre for Environment and Sustainability Professional audit routines Clear financial reporting Comprehensive progress report Successful ScanBalt Campus Project!

32. www.miljo.chalmers.se GMV – Centre for Environment and Sustainability www.bsrinterreg.net BSR INTERREG III B Joint Secretariat Information from this presentation is available on:

33. www.miljo.chalmers.se GMV – Centre for Environment and Sustainability This presentation will be available on: http://www.miljo.chalmers.se/ Thanks for your attention