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Who can issue a Certificate on the Financial Statement (CFS) after an audit?

The Certificate on the Financial Statement (CFS) after an audit must be issued by a qualified auditor. The auditor has to use the template of the European Commission. The template consists of the “Terms of Reference” (model for the agreement between the beneficiary/affiliated entity and the auditing firm) and the model for the certificate itself. As a beneficiary, you can find useful information about what is expected. The auditor will indicate any irregularities and errors in his/her report. The EU Commission/funding agency is responsible for deciding on the consequences of the errors indicated by the auditor.

The threshold for CFS audits in Horizon Europe is of 430.000€. In other words, a beneficiary that receives more than 430.000€ of EU contribution has to provide a Certificate on the Financial Statement (CFS).

The purpose of the CFS is to provide the EU granting authority with findings to be able to assess whether costs that are declared on the basis of actual costs or costs according to usual cost accounting practices (if any) and, if relevant, also revenues comply with the conditions set out in the Grant Agreement.

A CFS audit on a Horizon Europe project can cost between 2,500€ an 8,000€ as it depends on factors such as the size of project or its complexity. Note that CFS audits are eligible if they are mandatory and fulfill the eligibility conditions settled in article 6 of your grant agreement. These costs can be declared in the final report.

The CFS must be issued according to the highest professional standards. The practitioner must comply with the present Terms of Reference, including the agreed-upon procedures checklist and report template — without modifying them. The work must be planned in a way that the engagement can be performed effectively. The practitioner must use the evidence obtained from the procedures performed as the basis for the report. Matters which are important for the findings and evidence that the work was carried out in accordance with the Terms of Reference must be documented. The findings must be described in sufficient detail and include the affected amounts, to allow the participant and the EU granting authority to ensure appropriate follow-up.