Expenditure verification

A report on the verification of the Action’s expenditure, produced by an approved auditor who meets the specific conditions of the Terms of Reference (ToR) for the expenditure verification (Annex VII), must be attached to any request for pre-financing payments per financial year in case of any request for further pre-financing payments in case of grants of more than 5,000,000 € and for any final report in case of a grant of more than 100,000 euro.
The expenditure verification is a sound proof that the expenses reported on the standard financial report correspond to the partner accounting and bookkeeping system and to underlying accounts and records.
The auditor verifies that the funds provided by the grant were spent in accordance with the terms and conditions of the grant contract and that the different procedures were respected. He examines whether the costs declared by the partner are real, accurately recorded and eligible in accordance with the Contract, and issues an expenditure verification report.
The Grant Beneficiary should annex to the ToR of the expenditure verification a fiche containing key project information.

As per EuropeAid's standard form, the scope of the work of the auditor are:

  • obtaining a sufficient understanding of the action and of the Terms and Conditions of the Grant Contract;
  • verifying that the eligibility of expenditure claimed by the beneficiary in the financial report complies with the rules for accounting and record keeping of the Grant Contract, notably with article 16 of the General Conditions. By the same token, the auditor shall reconcile the information provided in the financial report to the Grant Beneficiary's accounting system and records, and verify that the correct exchange rates have been used (as per article 15.9 of the General Conditions).
  • verifying that the budget expressed in the financial report corresponds to the one authorised by the Contracting Authority in phase of signature of the Grant Contract, and that any eventual amendment to the budget - both unilateral and by means of an addendum - comply with the conditions set out in article 9 of the General Conditions.
  • substantiating that expenses incurred are eligible and that indirect (administrative) costs do not exceed the allowed threshold of 7% of the total direct eligible costs;
  • verifying that the Beneficiary complied with the rules of procurement, nationality and origin for given expenses and, in case of non-compliance, assessing the effect on the eligibility of expenditure.

Resources and useful links:
Keep a correct accuntancy
General Conditions(Annex II)
Special Conditions

ATTENTION! The information included in this website refer to the rules of the PRAG 2014. The website is currently under revision to be aligned to the 2016 PRAG.