Audit proof granted projects

EC Audits Implications on beneficiaries from Research and Technological Projects

  • 87% of audited beneficiaries in Research and Technology projects have errors in their financial reports and financial management processes (Source EC)

  • 1% of audited beneficiaries with irregularities (Source EC)

  • 512 cases to the European Court of Justice related to EC audit and beneficiaries in Research and Technological projects (Source: CURIA)

  • 33 cases completed and decision was given by the European Court of Justice (Source: CURIA). All of them had their expenses audited ex-post (First level audit) by contracted external auditors. All of them were also ordered by the Court to return all rejected costs by EC auditors plus in some cases to pay liquidated damages

Hidden errors identified by EC auditors normally not addressed by auditing firms and the financial officers of the funding authorities

Staff Costs

  • Excessive salaries not aligned with the role and the necessary skills and qualifications of a staff member effort reported within the audited project

  • Excessive difference between salaries of freelancers and ones with employment contract

  • Workplace of people that work as consultants/Freelancers (not subcontractors) normally outside the beneficiaries premises since in this case a fixed rate of 25% or 7%  as indirect cost may not be applicable

  • Errors in the calculation of the productive hours per person if the 1720 annual productive hours rule is not applied

  • No alignment between effort claimed in funded projects  and effort linked with achievements/activities undertaken by the organisation outside funded projects

  • Person effort not reported on a daily /regular basis but monthly which may lead to conflicts and errors

  • Not well-structured timesheets that relate claimed effort with main achievements/activities per staff member in projects

  • Conflicts between dates on timesheets and mission dates

Travel Costs

  • Excessive travel costs, not linked with the general organisations’ policy

  • Travel costs for people not reported as staff members within a funded project

Subcontracting costs

  • No prior approval of subcontracting costs by EC

  • Excessive costs for subcontracting costs

Other costs

  • Excessive costs under other costs category