Reporting and First Level Control of Finance and Activities

Transcription

1 Reporting and First Level Control of Finance and Activities First Level Control Seminar, 6/7 October 2010, Bergen Isabella Leong, Jesper Jönsson, Christian Zieske Joint Technical Secretariat Viborg

2 Rules of procedure Informal Feel free to Comment Ask questions...at any time...

3 Purpose of the 1st Level Control workshop Get the correct understanding of the reporting and first level control process Answer all your questions Set your mind for the interactive workshop How to convince the 1st level controller

4 Monitoring from Secretariat s perspective Project progress according to (your own) time plan Activity Finance Ensure that only approved activities are implemented (JTS has a limited mandate regarding deviations) Application Changes 1st level control

5 Secretariat jobs: Check compliance Operational Programme and Fact Sheets, national and EU regulations, report checks, ad-hoc advice monitor progress costed work plan : implementation and spending check and process within limited mandate to take decisions: we only administer the decision taken at Steering Committee

6 Lead Beneficiary Principle : (see OP and Fact Sheet # 5, please!) Continued responsibility for: Project implementation as promised in line with the approved application (and approved changes) and subsidy contract Eligibility of expenditure to trigger co-funding expenditure for approved activities only expenditure controlled by designated controllers controller s opinion is unqualified Transfer of ERDF / -equivalent to beneficiaries and report so, Lead First Level Controller to confirm Protecting the audit trail incl. secured documentation storage

7 Beneficiary Responsibility Beneficiary responsible for its incurred expenditure Beneficiary responsible for securing the audit trail Beneficiary responsible for delivery of the activities as agreed with the Lead Beneficiary and partnership

8 Standard reporting: 6 Steps Beneficiaries Sub-partners First Level Control (FLC) Paying Authority 4. Order to pay Bank(s) F S 3. Checked periodic report 5. Payment F B Secretariat 6. Payment Cover Letter (PCL) 1. Request to report 2. Periodic report Lead Beneficiary F S F B F B S S

9 5 payment 4 order to pay 3 checked periodic report Bank(s) Paying Authority 2 periodic report Secretariat Twice a year: 1 request to report per every 31 March and every 30 Sept. First Level Control Lead Beneficiary Sub-partners Beneficiaries Secretariat

10 5 payment 4 order to pay 3 checked periodic report Bank(s) Certifying Authority 2 periodic report Secretariat 1 request to report per every 31 March and every 30 Sept. 4 weeks at beneficiary level Which means: incl. FLC 2 weeks Lead beneficiary for consolidation incl. FLC First Level Control Lead Beneficiary Sub-partners Beneficiaries Secretariat

11 Reporting procedure I: Twice a year Reporting periods ending end of March & September Standard reporting forms The basic report forms Activity report is part of the financial claim The LB must approve the activity report for the beneficiary claim to be valid Only claims with no qualifications or clear quantifications can be included in the consolidated report by the Lead Beneficiary

12 Reporting procedure II: Deadlines for delivery of the full report 4 weeks for beneficiaries to deliver to LB + 2 weeks for the LB to deliver to JTS Plan well ahead Start before the end of the reporting period Have a well functioning system for daily management E.g. monthly reconciliations, one ring binder per claim updated on current basis Plan for clarifying issues with LB/project controller

13 Before you start thinking about reporting... Get a (good, competent and helpful) controller designated - who can carry out the job at a reasonable price level It is your responsibility to get one Do not be discouraged by the resistance of the system Whatever the excuse, you will not get the money until it is done

14 Before you start thinking about reporting...ii Get a partnership agreement in place signed by all! But do not let the formal processes overshadow the real thing...the project Adapt, run processes simultaneously... Insist on clear guidance from the Lead Beneficiary and the project controller on what is required for reporting... The Manual for First Level Control sets minimum requirements, LB can ask for more Let controllers meet/talk: It sometimes helps!

15 Frequent problems detected: Change the (sub-)project without approvals Forget to inform who is co-funding the project Award contracts without tender Possible but make sure you follow the rules Incur costs without registration in the accounting system Incur staff costs without timesheets Register time only once a month/6 months Leave timesheets without signatures

16 Not so SMART to... Start preparation just before the deadline Will you manage to clarify all issues? The Lead Beneficiary must respect the deadline or the whole project is kept hostage Why are there still open issues before reporting Not to talk to the controller before s/he comes to check you What should be ready, what format, what would help? Manage the process and do not let process manage you

17 Not so SMART to... Not to be consistent between the forms Not to answer all questions in the checklists Double check on controller It is their job - but your money Not to sign the forms You will get them back

18 Why are we so NOT SMART? System consistency You are part of a bigger picture... Have to follow our procedures Checklists can be unforgiving... Strong control focus on IVB Certifying Authority actually active...and strict NOT SMART does not mean unhelpful Let us know if you need help...

19 Important EU regulations: Norwegian beneficiaries of our programme are also subject to these rules! 1083 / 2006 General Provisions (Amendments have been made) 15(1) Additionality 55 Revenue generating projects 56 Eligibility of expenditure 57 Durabilty of operations 60 Functions: managing authority 66 Arrangements: monitoring 69 Information and publicity 72 Responsibilities of the Commission 80 Wholeness of payment to beneficiaries 81 Use of euro 90 Availability of documents 93 Automatic decommitment 102 Repayment 1080 / 2006 European Regional Development Fund 6(2) Territorial Cooperation 7(1) Eligibility of expenditure 13 Rules on eligibility of expenditure 15 Functions of managing authority 16 Control system 17 Financial management 20 Responsibilities of lead/beneficiaries 21 Conditions governing the location of operations 1828 / 2006 Rules for Implementation 8 Information and publicity measures for the public 9 Technical characteristics: information and publicity measures 13 Managing authority 14 Accounting records 15 Audit trail 16 Audit of operations & on the spot 19 Availability of documents 27 Definitions (Irregularities) 28 Initial reporting derogations 29 Urgent cases 30 Reporting of follow up Non-recovery 47ff Eligibility 51 In-kind 52 Overheads 53 Depreciation

20 Programme Rules:

21 Fact Sheets: I Financial Issues # 1 Exchange Rates # 2 Eligible Costs # 3 Auto Decommitment # 4 Public Tendering II Partnership # 5 Lead Beneficiary Principle # 6 Letters of Intent # 7 Public-Private Partnerships # 8 Sub-partners III Application & Approval # 9 Detailed Costed Workplan # 10 Technical Assessment Process IV Reporting # 11 Indicators # 12 Change of Budget # 13 Control and reporting # 14 Publicity Requirements # 15 Preparation Costs

22 Fact Sheet Examples: I Financial Issues, # 2 Eligible Costs Law EU regulations, National Rules (appendix 11 of the Manual) Real costs with supporting accounting evidence Time Submission of application project closure Derogation: Preparation costs Place Eligible area (NUTS 3-codes) 20% / 10% rules Operational Programme, Section Function Project application / approved changes Project relevant

23 Fact Sheet Examples: # 2 Eligible Costs - Staff costs must (excerpt): + Be certified...; + Be additional...; + Be based on documents...; + Be spent...; Unpaid voluntary work and other in-kind contributions are eligible provided that their value can be determined based on the amount of time spent and a standard rate for this time

24 Eligibility? Examples : Meetings in Amsterdam, Berlin, Brussels, London, Stockholm,...

25 Eligibility? Examples : Meetings in Amsterdam, Berlin, Brussels, London, Stockholm,...Outside NSR, but within BSR, NPP, NWE: max. 20% Outside that: max. 10%

26 Eligibility? Examples : Meetings in Amsterdam, Berlin, Brussels, London, Stockholm,...Outside NSR, but within BSR, NPP, NWE: max. 20%...project-relevant? Outside that: max. 10% Fact Sheet 2; Operational Programme section ; Article 56 of Commission Regulation 1083/2006; Articles 7 & 13 of Commission Regulation 1080/2006; Articles 47 ff of Commission Regulation 1828/2006 publicity with correct and complete logos, colours, size?

27 Eligibility? Examples : Meetings in Amsterdam, Berlin, Brussels, London, Stockholm,...Outside NSR, but within whichever is the lower BSR, NPP, NWE: max. 20%...project-relevant? Outside that: max. 10% Fact Sheet 2; Operational Programme section ; Article 56 of Commission Regulation 1083/2006; Articles 7 & 13 of Commission Regulation 1080/2006; Articles 47 ff of Commission Regulation 1828/2006 From the day of receipt of your application, but not without approval of the Steering Committee publicity with correct and complete logos, colours, size? Preparation costs Grant of up to or 2% of the total eligible budget, Only the latest approved contract!

28 Fact Sheet Examples: # 5 Lead Beneficiary Principle - responsibility for (excerpt): + Signing a partnership agreement with all the beneficiaries; + Appointment of a project controller; + Delivering project reports and documentation; + Delivering project outputs; + Production of documents required for control and payments; + Overall project management; + Compliance with public tendering procedures for the entire partnership.

29 Fact Sheet Examples: # 8 Sub-partners - Liabilities (excerpt): Sub-partners shall + Be attached to a full partner - The full partner they are attached to shall act as a first guarantor; + Either sign the joint partnership agreement or a contract with the full partner...; + be responsible and liable for their share; + keep a full audit trail of all invoices and expenses;

30 Fact Sheet Examples: # 8 Sub-partners - Sub-partners report audit: + The 1st level controller shall include on the spot checks at the subpartner s premises depending on his own assessment of the situation, the nature of activities performed by the sub-partner and in line with national rules for 1st level control. + The number of sub-partners shall be evaluated against the specific activities to be executed by the formal partner but should be a manageable number and, in principle, not exceed the number of full partners.

31 F(irst) L(evel) C(ontrol) :

32 Appendices, from First Level Control On Beneficiary Level On Project Level 5 The FLC Checklist 6 7 The Finance report 8 7a NEW: On-the-spot items 8a 10a The Activity report 10 The Mother of All Tables 9

33 Appendices 5 / 6, FLC Checklist Control question yes no n/a comments/ follow-up Does the compiled activity report reflect the individual activity reports sent in by beneficiaries? Have all the expenditure in this accumulated report been incurred for: - the purpose of implementing the operation in accordance with the descriptions provided in the original application or latest changes approved by the secretariat (including the annexes specifying the expenditure for budget lines 6, 8 and 10)? - If there were any deviations please describe them - Have the Lead Beneficiary prepared a change request to be sent with this report? - Does the expenditure incurred correspond to the activities agreed between beneficiary and the Lead Beneficiary? -If there were any deviations have they been clarified between beneficiaries and the Lead Beneficiary? - Does the expenditure reported reflect the implementation situation as described in the activity report, which forms part of this claim?

34 Appendices 5 / 6, FLC Checklist Control question yes no n/a comments/ follow-up Does the compiled activity report reflect the individual activity reports sent in by beneficiaries? Have all the expenditure in this accumulated report been incurred for: - the purpose of implementing the operation in accordance with the descriptions provided in the original application or latest changes approved by the secretariat (including the annexes specifying the expenditure for budget lines 6, 8 and 10)? - If there were any deviations please describe them - Have the Lead Beneficiary prepared a change request to be sent with this report? - Does the expenditure incurred correspond to the activities agreed between beneficiary and the Lead Beneficiary? -If there were any deviations have they been clarified between beneficiaries and the Lead Beneficiary? - Does the expenditure reported reflect the implementation situation as described in the activity report, which forms part of this claim? Please one tick per each question mark!

35 NEW: Appendices 7a & 8a Summary information about on-the-spot verifications Project: Beneficiary/ sub-partner Country 1st level controller details Amount of expenditure declared to the controller On-the-spot verifications of individual operations cf. Article 13.2b (1828/2006) No. Amount verified on-the-spot Date of on-the-spot verification... Date Date Signature by Lead/Beneficiary Signature by beneficiary/project controller Appendix 7a/8a

36 The Audit Trail: Every EURO of project expenditure is traceable: Legal basis: eligible, documented, project related costs Record: public procurement procedures respected Contracts: partnership agreements, order letters, invoices Delivery: proven as actually paid out, carried out, built, written Costs for which there is no project individual invoice: (e.g. overheads): use documents of equivalent probative value Confirm with all, especially smaller private partners: all documentation must be stored until 2023

37 1st level control checklist for accumulated expenditure on project level Does the compiled activity report reflect the individual activity reports sent in by beneficiaries? Have all the expenditure in this accumulated report been incurred for: - the purpose of implementing the operation in accordance with the descriptions provided in the original application or latest changes approved by the secretariat (including the annexes specifying the expenditure for budget lines 6, 8 and 10)? - if there were any deviations please describe them - Have the Lead Beneficiary prepared a change request to be sent with this report? - And corresponds to the activities agreed between beneficiary and the Lead Beneficiary? - If there were any deviations have they been clarified between beneficiaries and the Lead Beneficiary? - Does the expenditure reported reflect the implementation situation as described in the activity report, which forms part of this claim?

38 1st level control checklist for benficiary expenditure

39 Periodical Report on Activities - Content Project summary List of beneficiaries, including sub-partners Changes section Work Package description and activities, results and impacts Transnational partnership Transnational approach Innovation Publicity and communications Project and environmental indicators Enclosures

40 Frequent problems detected: Sign the Activity Report Inactive beneficiaries specify delay in activities Consolidating of beneficiary information Style of reporting Follow-up requests in Concluding Letter (included in the request to September 2010) Indicators Enclosure(s)

41 Is expenditure project-relevant? Project Application Beneficiaries Subbeneficiaries Activities m.investments Results Communication Indicators Activity Report Direct interrelation Beneficiary-level reports

42 Work Package 3 - Deliverables Knowledge transfer, innovation, test bed, demonstration and certification for Ballast Water Treatment Systems (BMTS): Report to assess certification procedures: BWMS Workshop for dissemination of study results and discuss design Report on results of experimental study to improve and expand certification procedures Implementation of procedure and evaluation of BWP: Dissemination workshops, seminars and visits Evaluation of BWP: On-site (harbour) Demonstration centre and workshops on site Wageningen IMARES: Report status mesocom studies and opportunities Experimental studies and redesign

43 Application Activity 1 Budget 100 Payment approved Finance Report Contract Partner Reports Activity: 1.1 Finance: 20 Activity: 1.2 Project Level: Activity Report 100 for Activity 1 occured Finance: 50 Activity: 1.3 Finance: 30 Activity 1 carried out

44 Example: Material Investments E.g.: Education Centre Check application form Correct partner? Corresponds with description? Correct timing? Corresponds with indicative budget? On the spot check, pictures, evidence?

45 It s not always us: Delays please prepare per & Incorrect please follow latest guidance Incomplete please check completeness Incomprehensible please clarify logically NO qualification or CLEAR quantification or DEDUCT until clarification

46 QUESTIONS, QUESTIONS, QUESTIONS...

47 THANK YOU PLEASE USE FOR FUTURE CONTACT