Monday, 2 July 2018

H2020 audit results


A major EC motive for using lump sums is that they will normally produce zero cost errors. FP7 audit results up to the end of 2017 showed that errors detected in a representative sample were 5.03% which - after errors are corrected - gives a residual error of about 3%. This should be compared with the 2% target set by the EU. So the EC will again fail its annual audit by the Court of Auditors. 

Errors
FP7
H2020
So far
Pessimistic
Detected
5.03%
1.6%
2.82%
Residual
~3%
1.44%
2.24%
But the first results for H2020 auditing suggest that the error rate will be below the 2% (see table). The EC audited a statistically representative sample of 142 participations. For the 110 cases finalised, the detected error rate was 1.6%: the corresponding residual error was 1.44%.

However, not all audits in the representative sample are included in these figures, because some are not yet accepted by the organisations audited and so are not finalised. If the EC’s opinion in the draft reports on these outstanding audits is included they produce the result in the pessimistic column – still much lower than FP7.

Interestingly, 28% of the error found in FP7 related to overheads, which has reduced to zero in H2020 by replacing calculated overheads and a choice of two flat rates with the single 25% flat rate. By itself, this would reduce the 3% to 2.16%, close to the EC pessimistic forecast for H2020. So an initial conclusion is that other simplifications in H2020 had either little impact on reducing errors, or even increased them!

Kind regards

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