1. Financial Management and Auditing Reporting by the Lead Partner 3 rd round operations Rostock, 03.02.2005 Elise Oukka

2. TWO KINDS OF REPORTS TO THE JTS: Preparation cost report Progress report LP has to ensure the proper financial management of the whole operation In addition the LP has to ensure the proper financial management of the whole operation (monitoring constantly and carefully the partner budgets & activities)! Reporting by the Lead Partner

3. INTERREG IIIC NORTH Partner Lead Partner one joint Progress report on all costs of the operation The Lead Partner checks the partner reports and compiles one joint Progress report (= Activity and audited financial report) on all costs of the operation and sends it to the Managing Authority (MA)/JTS. All the partners submit an audited report to the LP on their own costs check check Reporting by the Lead Partner The JTS checks the report and if needed will ask further details. When the report is approved, the payment will be executed to the LP.

4. INTERREG IIIC North Lead Partner Regional Partner Regional Partner Every six months: RFO Activity and audited financial report to the MA/JTS Activity and audited financial report concerning the own activities and expenditure to RFO Lead partner Lead participant Pt Lead participant Activity and audited financial report to RFO level Pt Lead participant Pt Activity and audited financial report to Lead Participant AUDITING check check check Reporting by the Lead Partner

5. The reported expenditure: has to be paid out during the reporting period has to be eligible INTERREG IIIC rules, EU rules, national rules has to be assigned to the correct budget line CHECK CHECK the current budget status – does budget line exist/ is there still budget left? has to be documented e.g. for personnel costs time sheets Financial Reporting

6. Staff costs = personnel costs for partners of the operation = salary, tax, employer’s contribution for social security in accordance with national legislation = based on real costs (actual salary rate) = certified on the basis of documents like contracts, time sheets, payslips and other documentation of payments Financial Reporting

7. Calculation of Staff Costs (example) Hours spent on project activities (see time sheet): 120 Employees gross salary: EUR 50,000.00 Employer’s contribution: EUR 25,000.00 Total costs: EUR 75,000.00 Hours worked per year : 1700 h Hourly rate: total costs/hours worked per year EUR 44.12 Staff costs to be reported: Hourly rate*hours spent EUR 5,294.12 Financial Reporting

8. Administration Costs all direct general costs (office rent, mail, fax, phone, heating, electricity etc.) Financial Reporting linked to the operation administration costs linked to services provided by external experts must be reported under the budget line “External Expertise”

9. Financial Reporting Administration Costs Indirect general costs (overheads) related to the operation based on real costs calculated on a pro rata basis, according to the duly justified, fair and equitable method documentation of the calculation method!

10. Travel and Accommodation have to be in accordance with the existing internal rules of the LP and partner organisations and national rules of the respective Member State based on actual costs in case of subsistence costs, payment on a daily allowance basis possible if this is foreseen in internal rules of the organisation and payment evidence available Financial Reporting

11. External expertise Financial Reporting Has to be consistent with the specification provided in the application No new items can be added in the report! Public procurement Documentation (contracts, invoices etc) Subcontracting of partners is not allowed!

12. Financial Reporting Investments Have to be consistent with the specification provided in the application No new items can be added in the report Reporting either as a total amount or as depreciations (national rules!) Documentation; invoices, depreciation method etc.

13. Other costs Financial Reporting Has to be consistent with the specification provided in the application No new items can be added in the report! Documentation

14. Financial Reporting Common costs Transparent, fair and equitable method  WRITTEN AGREEMENT! Sharing of management and coordination costs among partners PLEASE NOTE: In most cases, it should be possible to share the activities by sharing responsibilities equally among partners Clear accountancy & reporting  no double reporting!

15. LESSONS LEARNED FROM THE PREVIOUS REPORTS Ignored error messages Clarifications on the activities (e.g. vs. expenditure incurred) Clarifications on the expenditure (e.g. vs. application’s budget lines and specifications) Clarifications on the involvement of the partners (activities vs. expenditure) Signatures wrongly dated – auditor should sign only after the Lead Partner has signed!

16. THANK YOU FOR YOUR ATTENTION!