Are timesheets money sheets by Frank Verleg


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Presentation to be discussed in EARMA's Conference at Braganza - Portugal 22 to 24 June 2011

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  • Are timesheets money sheets by Frank Verleg

    1. 1. Are timesheets money sheets? Tips and practice how to introduce the use of timesheets in universities Marlies Böttcher – Trinavis (Germany) Jane Sheridan – Littlejohn LLP (UK) Patrick Varron – Auditec Aquitaine (France) Frank Verleg – Blömer accountants en adviseurs (Netherlands)
    2. 2. Polaris International (IGAF Polaris) <ul><li>Framework Contracts for audit services (EC) since 1999 </li></ul><ul><li>More than 3,000 financial compliance audits since 1999 </li></ul><ul><li>Consortium of approximately 40 audit firms throughout European Union led by Blömer accountants en adviseurs in the Netherlands </li></ul><ul><li>DG Research, DG INFSO, DG ENTR, DG ENER and DG MOVE </li></ul><ul><li>FP4, FP5 and FP6 </li></ul><ul><li>DG ECHO </li></ul><ul><li>Development of guidance and interpretation notes used as a basis for current guidance on FP7 </li></ul><ul><li>Central Management Team located in Brussels </li></ul><ul><li>Permanent location in Brussels </li></ul>
    3. 3. Who are we? <ul><li>Marlies Böttcher – Manager at TRINAVIS GmbH & Co KG (180 qualified staff) in Berlin; involved in EC work since 1999 </li></ul><ul><li>Jane Sheridan – Partner at Littlejohn LLP (200 qualified staff) in London; involved in EC work since 2006 </li></ul><ul><li>Patrick Varron – Partner at Auditec Aquitaine (20 qualified staff) in Bordeaux; involved in EC work since 1999 </li></ul><ul><li>Frank Verleg – Partner at Blömer accountants en adviseurs B.V. (75 qualified staff) in Nieuwegein; involved in EC work since 1999 (member of Central Management Team) </li></ul>
    4. 4. How we work Core Audit Team Local Audit Teams Audit Co-ordination / CMT
    5. 5. FP7 Stats
    6. 6. FP7 Stats
    7. 7. FP7 Stats
    8. 8. Timesheets – legal basis (FP7) <ul><li>Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 – Community money/funding </li></ul><ul><li>“ Principle of sound financial management” </li></ul><ul><li>“ Principle of transparency” </li></ul><ul><li>“ Title VI – Grants” </li></ul><ul><li>Regulation (EC) No 1906/2006 of 18 December 2006 </li></ul><ul><li>“ Article 31 – Reimbursement of eligible costs” </li></ul>
    9. 9. Timesheets – legal basis (FP7) <ul><li>FP7 Grant Agreement – Annex II General conditions (Version 6, 24/1/2011) </li></ul><ul><li>“ Eligible costs must be actual and be incurred by the beneficiary. They must be incurred during the duration of the project. The beneficiary’s internal accounting and auditing procedures must permit direct reconciliation of the costs declared….with the financial statements and supporting documents.” </li></ul><ul><li>“ With regard to personnel costs, only the costs of the actual hours worked by the persons directly carrying out work under the project may be charged.” </li></ul>
    10. 10. Timesheets – Guidance (FP7) <ul><li>Guide to Financial Issues relating to FP7 Indirect Actions, Version 28/02/2011 </li></ul><ul><li>“ Working time to be charged must be recorded throughout the duration of the project by timesheets, adequately supported by evidence of their reality and reliability.” </li></ul><ul><li>“ In the absence of timesheets, the beneficiary must substantiate the cost claimed by reasonable means (alternative evidence) giving an equivalent level of assurance, to be assessed by the auditor.” </li></ul>
    11. 11. Timesheets – if they exist <ul><li>Daily, weekly or monthly basis </li></ul><ul><li>Paper or a computer-based system </li></ul><ul><li>Authorisation by project manager and/or other superior of project employee </li></ul><ul><li>Established system versus non-established system </li></ul><ul><li>Full name of beneficiary in the grant agreement </li></ul><ul><li>Full name and signature of the employee directly contributing to any RTD project </li></ul><ul><li>Project account number must be indicated </li></ul><ul><li>Periodicity of filling in according to the beneficiary’s normal practice </li></ul><ul><li>Reference to tasks or WP included in the Description of Work </li></ul>
    12. 12. Timesheets – if they exist
    13. 13. Timesheets – Auditor perspective <ul><li>Community money – accept the rules! </li></ul><ul><li>Principles of sound financial management </li></ul><ul><li>Principles of economic, transparency and effectiveness </li></ul><ul><li>You want to know what you pay for – makes sense also in commercial environments </li></ul><ul><li>Reconciliation and audit trail </li></ul><ul><li>Responsibility of the management of an organisation/institute – not of individual employees (control environment) </li></ul><ul><li>Important for own organisation/institute as well (management information – budget calculations, efficiency) </li></ul><ul><li>Established time recording system where all time is adequately recorded, preferably computer-based </li></ul><ul><li>Allocation to activities/WPs </li></ul>
    14. 14. Timesheets – if they do not exist <ul><li>The absence of time sheets should not automatically result in the disallowance of the cost charged. </li></ul><ul><li>a) Verify that the personnel charged to the contract exist and were employed during the period in question. </li></ul><ul><li>b) Interview as many of the personnel as possible. </li></ul><ul><li>c) Verify how workable hours have been split between different projects (to exclude that more than 100% of workable hours have been charged). </li></ul><ul><li>d) Match the time charged with the periodic reports produced on the progress of the work. </li></ul><ul><li>e) Verify if the personnel charged have been present in meetings concerning the project. </li></ul>
    15. 15. Timesheets – if they do not exist <ul><li>f) Verify if the personnel charged are named in scientific reports and publications relating to the project. </li></ul><ul><li>g) Examine working papers to establish a link between the work performed and the project. </li></ul><ul><li>Arbitrary and very subjective discussions – will normally lead to disallowance of (part of) the claimed personnel costs </li></ul><ul><li>Escape </li></ul><ul><li>Employee is engaged for 100% of his/her time on the project and this is clearly identifiable and traceable to underlying and supporting documentation! </li></ul>
    16. 16. Money sheets?
    17. 17. Money sheets?
    18. 18. Timesheets - Simplification <ul><li>Strand 2 </li></ul><ul><li>More lump sum elements in the current cost-based approach – lump sums for personnel per beneficiary as time recording is considered to be burdensome </li></ul><ul><li>Strand 3 </li></ul><ul><li>Project specific lump sums as a contribution to project costs and paid against output/results </li></ul><ul><li>High trust ‘award’ approach consisting in distributing pre-defined lump sums per project without further control </li></ul><ul><li>Publication of calls with pre-defined lump sums per project </li></ul>
    19. 19. Questions?