Cemr! Government Audi t Svice

Transcription

1 Postbus 20201, 2500 EE Den Haag, The Netherlands Mistry oflïrz irice Cemr! Government Audi t Svice -r M?Tusrerle van Finandën k1tj1c9t Rijk t appended to this Report. this engagement and we have reported our factual findings on those procedures in the table As requested, we have only performed the procedures set out in the terms of reference for engagements, the European Commission requires that the Auditor also complies with the independence requirements of the Code of Ethics for Professional Accountants. International Standard on Related Services ( ISRS ) 4400 Engagements to perform 4400 provides that independence is not a requirement for agreed-upon procedures We confirm that our engagement was carried out in accordance with: The terms of reference appended to this Report and: The Code of Ethics for Professional Accountants issued by the IFAC. Although ISRS International Federation of Accountants ( IFAC ); Agreed-upon Procedures regarding Financial Information as promulgated by the This engagement involved performing certain specified procedures, the resuits of which the Scope of Work European Commission uses to draw conciusions as to the eligibility of the costs claimed. following period: January 2015 to May to the Commission of the European Communities under grant agreement e-justice Communication via Online Data Exchange, e-codex, Grant Agreement No for the Statements of the Ministry of Security en Justice ( the Beneficiary ) hereinafter referred to Mr C.A.J. van Schie RA MGA, audit manager, hereby state that: as the Beneficiary, for the periods 01/01/2015 to 31/05/2016 and which is to be presented Voorhout 7, 2511 CW the Hague, the Netherlands represented for signature of this report by We, the Central Government Audit Service of the Ministry of Finance, established in Korte We have performed agreed-upon procedures regarding the cost declared in the Financial Report ), as specified below. (appended to this report), we provide our independent report of factual findings ( the In accordance with our appointment and the Terms of Reference attached thereto Martin-Luther-Piatz Düsseldorf Germany Justizministerium des Landes Nordrhein-Westfalen (JM NRW)) Kenmerk

2 Kenmerk The scope of these agreed upon procedures has been determined solely bythe European Commission and the procedures were performed solely to assist the European Commission in evaluating whether the costs claimed by the Beneficiary in the accompanying Financial Statement has been claimed in accordance with the Grant Agreement. The Auditor is not responsible for the suitability and appropriateness of these procedures. Because the procedures performed by us did not constitute either an audit or a review made in accordance with International Standards on Auditing or International Standards on Review Engagements, we do not express any assurance on any Financial Statements claimed using this methodology. Had we performed additional procedures or had we performed an audit or review of the financial statements of the Beneficiary in accordance with International Standards on Auditing, other matters might have come to our attention that would have been reported to you. Sources of Information The Report sets out information provided to us by the management of the Beneficiary in response to specific questions or as obtained and extracted from the Beneficiary s information and accounting systems. Factual Findings The above mentioned Financial Statement(s) was (were) examined and all procedures specified in the appended table for our engagement were carried out. On the basis of the resuits of these procedures, we found: All documentation and accounting information to enable us to carry out these procedures has been provided to us by the beneficiary. The financial statements we received from the project before performifig the agreed-upon procedures are adjusted because of our factual findings. The beneficiary recipient has to upload financial statements in the EC tool NEE specified as follows: Personnel costs ,33 Subcontracting ,00 Other specific direct costs ,00 Indirect costs ,00 Total We draw your attention to the findings that we have reported under procedure No. 1 and 8. These findings concern the procedures for personnel and other direct costs and the documentation in the project file. Use of this Report This Report is solely for the purpose set forth in the above objective. This report is prepared solely for the confidential use of tj eneficiary and the European Commssion and solely for the purpose of submission to teeiirpean C mssion in 4 Auditdienst Rijk Mrnzsterie van Fincincien

3 connection with the requirernents as set out in Article of the Grant Agreement. This report may not be relied upon by the Beneficiary or by the European Commission for any other purpose, nor may it be distributed to any other parties. The European Commission may only disciose this Report to others who have regulatory rights of access to it, in particular the European Anti Fraud Office and the European Court of Auditors. This Report relates only to the Financial Statement specified above and does not extend to any other financial statements of the Beneficiary. No conflict of interest exists between the Auditor and the Beneficiary in establishing this report. The fee paid to the Auditor for providing the report is not yet known. We look forward to discussing our Report with you and would be pleased to provide any further information or assistance which may be required. The Hague, October 31, 2017 Central Government Audit Service of the Ministry of Finance Mr. C.A.J. van Schie RA MGA Audit manager Auditdienst Rijk Ministerie van FinuncIeTl

4 directly Procedures performed by the Auditor The Auditor designs and carries out his work in accordance with the objective and scope of this engagement and the procedures to be performed as specified below. When performing these procedures the Auditor may apply techniques such as inquiry and analysis, (re)computation, comparison, other clerical accuracy checks, observation, inspection of records and documents, inspection of assets and obtaining confirmations. The European Commission reserves the right to issue guidance together with example definitions and findings to guide the Auditor in the nature and presentation of the facts to be ascertained. The European Commission reserves the right to vary the procedures by written notification to the Beneficiary. The procedures to be performed are listed as follows: Procedures Required factual finding Persorinel Costs 1. Recalculate hourly personnel and overhead rates For each staff (12 employees) working on the project for personnel (full coverage if less than 20 staff the Auditor obtained the personnel costs (salary and working on the project, otherwise a sample of employer s costs) from the payroll system together minimum 20, or 20% of staff working on the project, with the productive hours from the time records of whichever is the greater), indicate productive hours each employee. used and hourly rates. For each employee selected the Auditor recomputed Where sampling is used, selection should be random the hourly rate by dividing the actual personnel costs with a view to producing a representative sample. by the number of productive hours. which was then Productive hours represent the (average) number of compared to the hourly rate charged by the hours made available by the employee in a year after Beneficiary the deduction of holiday, sick leave and other entitlements. This calculation should be provided by For some employees the information needed for the beneficiary. recomputing the hourly rate was not available. Moreover the calculation of the hourly rates was not always correct. We notice that the financial differences are not beneficial for the project. The average number of productive hours in 2015/2016 for the 12 staff members working on the project selected was about For the same selection examine and describe time Staff working on the project filis in their time on a recording of staff working on the project (paper/ weekly basis using a paper-based system. computer, daily/weekly/monthly, signed, authorised). The sample records are authorised by the project manager or other superior. 3. Employment status and employment conditions of For the staff working on the project selected, the personnel. The Auditor should obtain the Auditor inspected their employment contracts and employment contracts of the staff working on the found that they were: project selected and compare with the standard hired by the Beneficiary in employment contract used by the beneficiary. accordance with its national legislation, Differences which are not foreseen by the grant working under the sole technical supervision agreement should be noted as exceptions. and responsibility of the Beneficiary, and remunerated in accordance with the normal practices of the Beneficiary (ie.; practices are common to all employees) No exceptions were noted. 4. For the normal practices/average costing N/A approach (rather then on the basis of actual costs by individual), the Beneficiary should state: How researchers are grouped into categories 1 (how many categories, under what criteria); nisccr2 van Finm1Celi :.

5 The The The A pay range in each category from lowest to highest, average and median; upper and lower percentage variation within each category from the average; upper and lower percentage variation for productive hours from the average (1f known); list of average rates charged in each category for the prior years (an indication only, of the expected range of rates for the period_of the_agreement). 5. Use of normal practices/average personnel cost N/A and the beneficiary introduced a request for certification of their methodology, and for which the Commission has accepted a certification on their methodology in accordance with the terms of reference of the FP7 grant agreements, a simple verification by the auditor that the calculation methodology is in line with that one stipulated under the certification on methodology under the FP7 grant agreement will be considered sufficient. Subcontracting 6. lnspect documents and obtain confirmations that The Auditor obtained tendering documents for each subcontracts are awarded according to the principle subcontract entered into and observed that a written of best value for money (best price-quality ratio) analysis of value-for-money had been prepared by under conditions of transparency and equal the Beneficiary in support of the final choice of treatment. subcontractor, or that the contract had been Full coverage 1f less than 20 items, otherwise a awarded as part of an existing framework contract sample of minimum 20, or 20% of the items, entered into prior to the beginning of the project. whichever is the greater. Other_Specific_Direct_Costs 7. Confirm that allocation of equipment subject to N/A depreciation is correctly identified and allocated to the project. Full coverage 1f less than 20 items, otherwise a sample of minimum 20, or 20% of the items, whichever is the greater), The costs under subcontracting represent the share of the costs of some events of the project. This is in accordance with the decisions of the consortium. 8. Travel costs correctly identified and allocated to The Auditor inspected the sample and observed that the project (and in line with Beneficiary s normal the contractor has a dear method for allocating policy for non-ec work regarding first-class travel, travel costs to the project via marking of invoices and etc.) purchase orders, resulting in correct allocation in the Full coverage 1f less than 20 items, otherwise a project accounts. sample of minimum 20, or 20% of the items, The costs charged were compared to the invoices and whichever is the greater. The Beneficiary should found to be correct. No VAT or other identifiable provide written evidence of its normal policy for indirect taxes were charged. travel costs (e.g. use of first class tickets) to enable The use of first class travel was in line with the the Auditor to compare the travel charged with this written policy provided by the contractor. policy. The project files do not always meet all the requirements. The key findings are: 47). The costs were not always properly supported by documentation (missing some application forms and vouchers). 1 VAT isijjb1e cost unless the b.qneficiary can show that it is unable to recover it. jitiienst RIJK Ministerie van Financiën

6 In spite of this finding we did not find items in our sample which are not related to the project. 9. Consumables correctly identified and allocated to the project. Full coverage if Iess than 20 items, otherwise a sample of minimum 20, or 20% of the items, whichever is the greater. The Auditor inspected the sample and observed that the contractor has a dear method for allocating consumable costs to the project via marking of invoices and purchase orders, resulting in correct allocation in the project accounts. The costs charged were compared to the invoices and found to be correct. As a result of our audit an adjustment of almost has been made for VAT. In the financial statement no VAT identifiable indirect taxes were charged. 2 or other For this item we also refer to the findings shown under procedure No. 8. be assessed in case the Beneficiary uses actual indirect cost method Indirect costs to 10. Obtain and review a detailed breakdown of overheads (reconciled to the financial accounts) and confirm that the following costs are not present: costs of capital employed, provisions for possible future losses or charges, interest owed, exchange losses, provisions for doubtful debts, resources made available to a beneficiary free of charge, value of contributions in kind, unnecessary or ili-considered expenses, marketing, sales and distribution costs for products and services, indirect taxes and duties, inciuding VAT (unless the beneficiary can show that it is unable to recover it), entertainment or hospitality expenses, except reasonable expenses accepted by the Commission as being absolutely necessary for carrying out the project, any cost incurred or reimbursed in respect of, in particular, another Community, international or national project. 11. Inspect and compare exchange rates into Euros. The Beneficiary that keeps his accounting in euro should provide written evidence of its normal accounting practices for converting costs incurred in other currencies other than those in which accounts are kept. The Auditor obtained the total overhead amount which was allocated and reconciled this to the accounting records for the period in question. The Auditor recalculated the ratio of overheads as a percentage of personnel costs and agreed it to the rate used in the financial statement. The indirect costs are correctly calculated as a percentage (30%) of the personnel costs. The Auditor compared the exchange rates used for conversion. In case of a beneficiary with accounts in a currency other than the euro costs have been reported by using the conversion rate published by the European Central Bank and applicable on the first day following the end of the reporting period. Beneficiaries whose accounts are kept in euro when declaring costs incurred in currencies other than euro have calculated an exchange rate in accordance with their normal accounting practices. 12. Identification of receipts Agree N/A S. 1 2 VAT is an ineligible cost unless the beneficiary can show that It is unable to Auditdienst Rijk Ministerie van Financiën

7 The Beneficiary is obliged to declare in its claim any receipts related to the project (income from events, rebates from suppliers, etc.) 13. Identification of interest yielded on pre-financing N/A When the beneficiary is the coordinator of the project, it is obliged to declare interest yielded on pre-financing &c 1 1L7 AUditdjenst Rijk Ministerie van Financiën

8 y) Audftdienst Rijk Ministerie van Financien

9 Terms of Reference The following are the Terms of Reference ( ToR ) on which the ministry of Security and Justice agrees to engage the Dutch Central Government Audit Service of the Ministry of Finance, established in The Hague, to provide an independent report of factual findings on a Financial Statement(s) prepared by the Beneficiary and to report in connection with a European Community financed grant agreement under the ICT Policy Support Programme (ICT PSP), concerning e-justice Communication via Online Data Exchange, e-codex, Where in these ToR the European Commission is mentioned this refers to its quality as signatory of the grant agreement with the Beneficiary. The European Community is not a party to this engagement. 1.1 Responsibilities of the Partjes to the Engagement The Beneficiary refers to the legal entity that is receiving the grant and that has signed the Grant Agreement with the European Commission. The Beneficiary is responsible for providing a Financial Statement for the Action financed by the Grant Agreement in compliance with such agreements and providing it to the Auditor, and for ensuring that this Financial Statement can be properly reconciled to the Beneficiary s accounting and bookkeeping system and to the underlying accounts and records. Notwithstanding the procedures to be carried out, the Beneficiary remains at all times responsible and liable for the accuracy of the Financial Statement. The Beneficiary is responsible for the factual statements which will enable the Auditor to carry out the procedures specified, and will provide the Auditor with a written representation letter supporting these statements, clearly dated and stating the period covered by the statements. The Beneficiary accepts that the ability of the Auditor to perform the procedures required by this engagement effectively depends upon the Beneficiary providing full and free access to the Beneficiary s staff and its accounting and other relevant records. The Auditor refers to the Auditor who is responsible for performing the agreed-upon procedures as specified in these ToR, and for submitting an independent report of factual findings to the Beneficiary. The Auditor must be independent from the Beneficiary and is either: qualified to carry out statutory audits of accounting documents in accordance with the Directive 2006/43/EC of the European Parliament and of the Council of 17 May 2006 on statutory audits of annual accounts and consolidated accounts, amending Council Directives 78/660/EEC and 83/349/EEC and repealing Council Directive 84/253/EEC or similar national regulations; or a Competent Public Officer for which the relevant national authorities have established the legal capacity to audit the Beneficiary and has not been involved in the preparation of the financial statements. The procedures to be performed are specified by the Europe rmission and the - Auditor is not responsible for the suitability and appropriatedf these documents 3// L_ Auditdienst Rijk ii?msrerle van Frnancien

10 1.2 Subject of the engagement The subject of this engagement is the final payment related to Financial Statement submitted in connection with the Grant Agreement e-justice Cornrnunication via Online Data Exchange, e-codex, for the period(s) January 2015 to May Reason for the Engagement The Beneficiary is required to submit to the European Commission a certificate on a Financial Statement in the form of an independent report of factual findings produced by an external auditor in support of the payment requested by the Beneficiary under Article of the Grant Agreement. The Authorising Officer of the Commission requires this certificate as he makes the payment of costs requested by the Beneficiary conditional on the factual findings of this report. 1.4 Engagement Type and Objective This constitutes an engagement to perform specific agreed-upon procedures regarding an independent report of factual findings on costs claimed under the Grant Agreement. As this engagement is not an assurance engagement the Auditor does not provide an audit opinion and expresses no assurance. The European Commission derives its assurance by drawing its own conclusions from the factual findings reported by the Auditor on the Financial Statement and the payment request of the Beneficiary relating thereto. The Auditor shali inciude in its report that no conflict of interest exists between it and the Beneficiary in establishing this report, as well as the fee paid to the Auditor for providing the re port. 1.5 Scope of Work The Auditor shail undertake this engagement in accordance with these ToR and: in accordance with the International Standard on Related Services ( ISRS ) 4400 Engagements to perform Agreed-upon Procedures regarding Financial Information as promulgated bythe IFAC; in compliance with the Code of Ethics for Professional Accountants issued by the IFAC. Although ISRS 4400 provides that independence is not a requirement for agreed upon procedures engagements, the European Commission requires that the Auditor also complies with the independence requirements of the Code of Ethics for Professional Accountants. The Auditor should plan the work so that the procedures can be effectively performed. For this purpose he performs the procedures specified in the Compulsory Report Format and Procedures to be Performed and uses the evidence obtained from these procedures as the basis for the report of factual findings. 1.6 Reporting The Report of Factual Findings should describe the purpose and the agreed-upon procedures of the engagement in sufficient detail in order to enable the Beneficiary and the European CommissIQtrjounderstand the nature and extent of the procedures performed by the Auditor.Ue of the reportrng format given in these Guidelines is compulsory The report Ldienst Rijk Mrnisterie van Financien

11 should be written in the language indicated in Article 7 of the Grant Agreement. In accordance with Article of the Grant Agreement, the European Commission and the Court of Auditors have the right to audit any work carried out under the project for which costs are claimed from the Community, inciuding the work related to this engagement. 1.7 Timing The report should be provided by October Auditor s fee The Auditor will charge the audit costs based on actual costs to the beneficiary. Audildienst Rijk Ministerie van Financiën

12 1 (4 3 1 Auditdienst Rijk Ministerie van Financiën