Thursday, 27 April 2017

Five year audit

This month, the European Ombudsman released a report concerning a financial audit of a Non-Governmental Organisation (NGO) and its participation in three FP7 projects. The audit took place in 2011 and concluded that all personnel costs claimed were not substantiated and so the related grant should be reimbursed to the EC. The problem, according to the auditors, was that the time recording system was unreliable.

The NGO disagreed with the auditor’s draft report, drawing attention to timesheets which were not considered by the auditors but which provide the base for summary reports cited by the auditors. The time sheets were based on those described by the EC in its FP7 Financial Guidelines. The NGO’s comments were included in the draft audit report.

In July 2013 the NGO met with the EC to explain their time sheet system. While the EC accepted that the system was adequate, in 2014 they started to recover the (allegedly) over claimed personnel costs from the NGO. This was because the meeting – set up by the EC to discuss the audit results - took place after the 30 day deadline for submitting comments on the audit report.

However, because the NGO had drawn the EC’s attention to the additional information on time recording in its comments included in the draft audit report, the Ombudsman concluded that the EC should have considered these before finalising the audit report and implementing the results by recovering the (alleged) over payments. It recommended that the EC should review its position, re-examine the timesheets and, if the timesheets are in fact reliable, reverse its decision.

Despite receiving the Ombudsman’s recommendation in August last year, no response from the EC has been published. So, more than five years after the audit, the case is unresolved. Could this be a record?
Kind regards

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