Friday, 31 July 2015

Financial reporting in H2020

The H2020 model grant agreement published in December 2013 included the financial statement for reporting costs. It lacked, however, any information concerning the explanation of the use of resources which must accompany the financial statement. 18 months later, the EC has now released a description of what it requires.

For personnel, no breakdown beyond that described in the financial statement is needed, except for seconded staff: those provided by third parties as contributions in kind. Here the EC requires a list of the third parties, the related cost, whether the staff are provided free of charge or against payment, and whether they were mentioned in Annex 1 to the grant agreement, with justification for those which were not. All subcontracts must also be listed, and justified if they were not described in Annex 1. Other direct costs do not need to be described, unless their total costs exceed 15% of personnel costs. Where the 15% threshold is exceeded, items should be listed in descending order of cost until the 15% limit is reached.

These rules represent a significant reduction in reporting compared with the later stages of FP7. However, they are similar to the rules used in the early stages of FP7. Let’s hope this time EC staff can resist the temptation to ask for more detail than is required in their current guidelines.
 
Regards
Singleimage - H2020 Training Workshops and Advice
 
 

Thursday, 2 July 2015

The hidden audit rules

The EC publishes lots of advice about its financial rules and their interpretation. In FP7 this includes documents such as Financial Guidelines, Audit Guidelines, MSC Financial Guidelines, How to avoid common errors in cost claims, FP7 audits and certifications, and Audit Certificate FAQs. The complete guidance package.
But no: the EC has more. Just for its staff and contracted auditors to use. This might explain why auditors use interpretations of the rules which never appeared in the published documents. They are contained in the FP7 Audit Manual, which is not published.
Since 2001, EU bodies are subject to Freedom of Information rules. Under a Freedom of Information request, the EC has released its FP7 Audit Manual. However, some elements have been censored (or “redacted”), which EU bodies can do on grounds such as security, defence, policy, commercial interest, court proceedings and the purpose of inspections, investigations and audits. In this case, about 20 pages of a 90 page document are redacted. Now what happened to openness, transparency and accountability?
Regards