1. Expenditure verification Joint Technical Secretariat Seminar on reporting 13 August Rezekne, Latvia

2. Reason for Expenditure Verification All expenditure under a grant contract should be verified as to its: – Incurrence (it really happened) – Accuracy (the amounts are stated correctly) – Eligibility (the amounts satisfy the eligibility criteria) Expenditure Verification work is contracted to competent auditors to ensure its independence 2

3. Agreed-upon Procedures The expenditure verification work to be done is written down in the Terms of Reference attached to the contract. The procedures are set out in Annex 2a – Guidelines on the procedures are set out in Annex 2b – Guidelines on the procedures for checking the compilation of the consolidated report are set out in Annex 2c – The model EV report is set out in Annex 3 3

4. EV work is divided into 4 sections General Procedures Conformity of Expenditure with the Budget and Analytical Review Procedures to verify selected expenditure Procedures for checking the compilation of the consolidated financial report (only for Beneficiary) 4

5. General Procedures Understand the Grant Contract Check that the financial report meets the terms and conditions Check the accounting and record keeping rules are complied with Article 16 of General Conditions Check the Financial Report agrees with the accounting records Check that correct exchange rates were used in the financial report 5

6. Conformity of Expenditure with the Budget and Analytical Review Check the budget is stated correctly in the report and includes any amendments Analytical review: a review of the financial report to spot any obvious mistakes 6

7. Procedures to verify eligibility of costs 1.Costs actually incurred and not double financed 2.Cut-off 3.Budget 4.Necessary 5.Records 6.Justified 7.Valuation 8.Classification 9.Compliance with Procurement, Nationality and Origin Rules 7

8. Guidelines for the Specific Procedures The type of evidence that the auditor should look for: Sources of information to understand the grant contract Coverage must be 100% and report the effect of the errors on the amounts claimed 8

9. Procedures for consolidated report The auditor of the beneficiary needs to carry out some procedures to check the compilation of the consolidated financial report: Conformity with the model in Annex VI of Grant Contract Inclusion of all expenditure, regardless of which part is financed by JMA Use of the language of Grant Contract No financial deviations over flexibility in article 9.2 of GC Completeness and accuracy of the compilation 9

10. Model Expenditure Verification report There is a standard text for the report The amount checked and the procedures made are described The result of the verification and impact of any errors found is reported 10

11. JTS contacts Thank You for Your attention! www.estlatrus.eu Email: info@estlatrus.euinfo@estlatrus.eu Phone: +371 6750 9524 Address: Ausekla Str. 14-3, Riga 11