Audits are mandatory in Horizon Europe for entities that receive more than 430.000€ of grant from the EU. If successful, this audit delivers the entity a Certificate on the Financial Statement (CFS) required by the EU. The CFS audit is performed by and external independent auditor. If requested by the EU, even the entity received less than 430.000€ of grant, an audit can be performed at any moment up to 5 years after the end of the project. Therefore, it is important to keep the documentation after the project finishes.
If your entity received more than 430.000€ of grant, it is your responsibility to contact an auditor of your choice and get the CFS. Ask your accountant in case you don’t know any auditor.
You can download from the EC website the Model for the Certificate on the Financial Statements, which will be used by the auditor. The CFS is then submitted jointly with the final financial report that is automatically generated by the IT system within the Funding & Tenders Portal.
The CFS is composed of two separate documents:
- The Terms of Reference to be signed by the beneficiary and the Auditor
- The Auditor’s Independent Report of Factual Findings to be issued on the Auditor’s letterhead, dated, stamped and signed by the Auditor which includes the agreed-upon procedures to be performed by the Auditor, and the standard factual findings to be confirmed by the Auditor
To make sure you get as little as possible costs rejected, you should prepare yourself well by studying the eligibility rules of the Annotated Model Grant Agreement (Art. 6 on eligible and ineligible costs) as early as possible. This implies a perfect bookkeeping with all necessary supporting documents at hand. Ask also for support to the coordinator of the project.
The Example of Letter of Representation related to the Certificate on the Financial Statements provided by the EC is also useful as it has to be submitted with the CFS.