The System and Process Audit (SPA) is an optional audit in Horizon Europe allowing the entity to go through less audits as it rises the threshold for a certificate on the financial statement (CFS) to 725.000€ instead of 430.000€.

A System and Process Audit is risk assessment and audit opinion done in two steps. It first tests the system (test of controls) and afterwards the substantive (test of transactions). It is assessing three types of risks: (1) inherent risks at the entity level, (2) control risk at the entity level, and (3) budget category specific control risk and their project based accounting.

After the assessment, a single report is issued in two parts with a combined review result flagging the entity as low, medium or high risk.

Who can apply to a System and Process Audit?

An entity that uses unit, flat rate or lump sum costs or contributions according to documented usual cost accounting practices.

or

An entity that: (1) has formalized documentation on the systems and processes for calculating their costs and contributions (i.e. formally approved and in writing), (2) has participated in at least 150 projects under Horizon 2020 or Euratom, and (3) participates in at least 3 ongoing projects under Horizon Europe or Euratom.

How can an entity apply to a System and Process Audit?

1. The beneficiary submits the application in the system which will be assessed by the auditors of the European Commission.
2. If the application is accepted, the auditors of the European Commission will carry out the SPA.
3. The result of the audit will take the form of a risk assessment classification for the beneficiary: low, medium or high.

What are the benefits of a System and Process Audit?

If your entity is classified as low risk, your entity might go through less audits or less in-depth audits and a higher threshold for submitting a certificate on the financial statement (CFS) will apply, 725.000€ instead of 430.000€.

References:

AMGA Article 24.4 – Systems and process audit (SPA)

Beneficiaries which:

• use unit, flat rate or lump sum costs or contributions according to documented (i.e. formally approved and in writing) usual costs accounting practices (if any) or

• have formalized documentation on the systems and processes for calculating their costs and contributions (i.e. formally approved and in writing), have participated in at least 150 actions under Horizon 2020 or the Euratom Research and Training Programme (2014-2018 or 2019-2020) and participate in at least 3 ongoing actions under Horizon Europe or the Euratom Research and Training Programme (2021-2025 or 2026-2027)

may apply to the granting authority for a systems and process audit (SPA).

This audit will be carried out as follows:

• Step 1: Application by the beneficiary.

• Step 2: If the application is accepted, the granting authority will carry out the systems and process audit, complemented by an audit of transactions (on a sample of the beneficiary’s Horizon Europe or Euratom Research and Training Programme financial statements).

• Step 3: The audit result will take the form of a risk assessment classification for the beneficiary: low, medium or high.

Low-risk beneficiaries will benefit from less (or less in-depth) ex-post audits (see Article 25) and a higher threshold for submitting certificates on the financial statements (CFS; see Articles 21 and 24.2 and Data Sheet, Point 4.3).