Audit%20certificates

1
Audit certificates

• NCP meeting
• Brussels
• 24.01.2006

2
Audit certificates

• Reminder audit certificates
• Audit Certificate Survey Report
• Competent public officer

3
Reminder audit certificates

• Guidance notes for contractors and certifying
  entities published June 2005
• ftp//ftp.cordis.lu/pub/documents_r5/natdir000000
  1/s_6918005_20050727_150035_2521en.pdf
• including practical hints for contractors
• frequent asked questions
• proposed model of the audit certificate
• list of frequent errors
• indicative model of an audit programme

4
Reminder audit certificates

• The purpose of an audit certificate is to give
  to the Commission reasonable assurance that
  eligible costs charged under the project are
  claimed by the contractors in accordance with the
  relevant legal and financial provisions of the
  FP6 model contract
• An audit certificate is issued by the external
  auditors on the competent public offices to the
  attention of the contractor (not to the attention
  of the Commission)

5
Reminder audit certificates

• Frequently asked questions
• Competent public officer
• Audit certificate template
• Qualifications for auditors
• Unqualified audit certificates
• Scope of Audit certificates
• Cost
• Reporting period
• AC cost model and competent public officer
• Audit costs and subcontracting costs
• Overhead costs
• Selection of audit firms
• Language of audit certificates
• Overstated costs
• Subcontracting
• Third parties

6
Audit Certificate Survey Report

• Based on an analytical assessment on a sample of
  Audit Certificates that were received and
  approved .. The subgroup devised questionnaires
  . for completion by the identified research
  contractors, external auditors and competent
  public officers. The surveys aimed to assess how
  effective the process regarding audit
  certificates was received by contractors of the
  research DGs and the respective certifiers that
  they hired to produce the certificates ..
• An assessment of the reliability can only be
  properly evaluated by re-auditing the processed
  audit certificates which is also foreseen and
  planned in the context of the Common Audit Policy
  of the Research DGs

7
Audit Certificate Survey Report

• Several problems reported with regard to the
  audit certificate template
• Compliance with International Standards on
  Auditing (ISA)
• Model template was generally used with less then
  10 deviating significantly from it
• The usual delay for a contractor to receive the
  audit certificate from the certifier was almost 8
  weeks

Average days between reporting end and audit certificate date
External Auditors 57,2
Competent public officers 48,7
54,9
8
Audit Certificate Survey Report

• The average cost to contractors for an audit
  certificate was approximately EUR 1000

External Auditors Competent Public Officers Average
Contractors with eligible costs lt 150,000 945 321 753
Contractors with eligible costs gt 150,000 1,872 1,034 1,716
Eligible costs not specified 3,425 0 2,283
Average 1,203 416 981
9
Audit Certificate Survey Report

• The survey revealed a number of problems
  concerning the understanding of the requirements
  regarding the qualification and independence of
  the certifier

Legal capacity of the CPO established by the
relevant national authority
10
Audit Certificate Survey Report

• The majority of financial statements initially
  set up by the contractors were amended as a
  consequence of the certification process.
• Approximately one in three contractors said they
  adapted their statements after examination

Adjustment to the original financial statement 1 - necessity Adjustment to the original financial statement 1 - necessity Adjustment to the original financial statement 1 - necessity
External Auditors CPOs
Yes 66 70
No 34 30
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Competent Public Officer

• Input received from some 20 countries
• Varying approaches in appointing competent public
  officers