Expenditure verification Estonia Latvia Russia ENPI CBC Programme

Expenditure verification Estonia Latvia Russia ENPI CBC Programme Project Management and Implementation training 20&21 February 2012 This project is funded by the EU And implemented by a consortium led by MWH

Reason for Expenditure Verification • All expenditure under a grant contract should be verified as to its: – Incurrence (it really happened) – Accuracy (the amounts are stated correctly) – Eligibility (the amounts satisfy the eligibility criteria) • Expenditure Verification work is contracted to competent auditors to ensure its independence This project is funded by the EU And implemented by a consortium led by MWH

Agreed-upon Procedures • The expenditure verification work to be done is written down in the Terms of Reference attached to the contract. • The procedures are set out in Annex 2 a – Guidelines on the procedures are set out in Annex 2 b – Guidelines on the procedures for checking the compilation of the consolidated report are set out in Annex 2 c – The model EV report is set out in Annex 3 This project is funded by the EU And implemented by a consortium led by MWH

EV work is divided into 4 sections • General Procedures • Conformity of Expenditure with the Budget and Analytical Review • Procedures to verify selected expenditure • Procedures for checking the compilation of the consolidated financial report (only for Beneficiary) This project is funded by the EU And implemented by a consortium led by MWH

General Procedures • Understand the Grant Contract • Check that the financial report meets the terms and conditions • Check the accounting and record keeping rules are complied with (Article 16 of General Conditions) • Check the Financial accounting records Report agrees with the • Check that correct exchange rates were used in the financial report This project is funded by the EU And implemented by a consortium led by MWH

Conformity of Expenditure with the Budget and Analytical Review • Check the budget is stated correctly in the report and includes any amendments • Analytical review: a review of the financial report to spot any obvious mistakes This project is funded by the EU And implemented by a consortium led by MWH

Procedures to verify eligibility of costs Nine procedures! • • • Costs actually incurred and not double financed Cut-off Budget Necessary Records Justified Valuation Classification Compliance with Procurement, Nationality and Origin Rules This project is funded by the EU And implemented by a consortium led by MWH

Guidelines for the Specific Procedures The type of evidence that the auditor should look for: • Sources of information to understand the grant contract • Coverage must be 100% and report the effect of the errors on the amounts claimed This project is funded by the EU And implemented by a consortium led by MWH

Procedures for consolidated report The auditor of the beneficiary needs to carry out some procedures to check the compilation of the consolidated financial report: • Conformity with the model in Annex VI of Grant Contract • Inclusion of all expenditure, regardless of which part is financed by JMA • Use of the language of Grant Contract • No financial deviations over flexibility in article 9. 2 of GC • Completeness and accuracy of the compilation This project is funded by the EU And implemented by a consortium led by MWH

Model Expenditure Verification report • There is a standard text for the report • The amount checked and the procedures made are described • The result of the verification and impact of any errors found is reported This project is funded by the EU And implemented by a consortium led by MWH