European Research Council Executive Agency by Doroteya Petrova
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The document provides an overview of audits conducted by the European Research Council Executive Agency (ERCEA) on costs reported under the Framework Programme 7 (FP7). It discusses the common goal of audits to ensure costs are legal and regular, and to maintain an error rate below 2%. Systematic and non-systematic errors are examined, as well as how systematic errors may be extrapolated across other grants. Common errors found in personnel costs, other direct costs, and accounting practices are summarized. Recent examples of errors identified in top beneficiaries are also provided.
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European Research Council Executive Agency by Doroteya Petrova
- 1. ERCEA European Research Council Executive Agency Unit C3 – Audit Management and Implementation Braganca, Portugal 22-24 June 2011 Doroteya Petrova ERC Audit Presentation Together For Less Errors in IDEAS
- 43. Conflict of interest with evaluators Claiming twice Plagiarism Subcontract to own company Overcharging costs Costs claimed in wrong period Miscalculated hourly rates Conflict of interests with people By mistake On purpose Anomaly Fraud Not declaring revenue Forgery of documents Anomalies/Fraud
Editor's Notes
- News from brussels 2011 budgets bestaetigt Directoren stellenausschreibbung abgesagt Neuer SG auf dem wege der rekrutierung Neuausschreibung des Direktoren Jack metthey ab 1 jan direktor A Com communication als reaktion auf den FP mid term review noch vor weihnachten FP8 zeitplan beschleunigt im sommer 2011 < ERC hat seine Rolle auch im FP8 iter ist das grosse auch budgetaire fragezeichen Kernelemente weitere vereinfachungen, 5+5 statt 7? Condensed version Part of a wider show gerichtet an mitarbeiter im vertragsmanagement in den universitaeten
- Page 57 Guide to Financial Issues TUITION FEES: In some cases students performing work for the university may be exempt from paying all or part of the fees. This forgone income for the university is eligible as a Personnel Cost when there is a labour contract with the student in which the amount is indicated. The other conditions of Article II.14.1 of the ECGA have to be fulfilled as well, namely Actual, incurred by the beneficiary, Incurred during the duration of the project, determined according to the usual management principles and practises, used for the sole purpose of achieving the objectives of the project, recorded in the accounts of the beneficiary and indicated in Annex I PhD costs : eligible if they fulfil the conditions of Article II.14.1 of the ECGA. Recruitment costs : In general, these costs are not eligible as direct personnel costs since the beneficiary is required to have the human resources necessary for the action at the start of the project. If a beneficiary needs to recruit additional personnel during the course of the project the relevant costs could be considered as part of the normal indirect costs of the organisation if they fulfil the conditions of article II.14 of the GA and if it is the usual practice of the beneficiary to pay for those costs. Internally invoiced personnel costs for project specific activities may be eligible if the time worked on the project is substantiated by time records. Internal invoicing may apply also to items like animal maintenance, computer runs, laboratory tests and other similar services where it is difficult to substantiate the actual time and the actual cost of each individual involved in each individual operation, and where an average personnel cost per type of animal, type of computer run, type of test etc. has been calculated based on the actual costs incurred for the personnel involved. For these costs to be eligible the calculation of costs must be auditable. The same logic applies to equipment, consumable or any other specific direct costs: where it is difficult to substantiate the actual cost of each individual test or use, an average cost may be calculated per type of test based on the actual cost of the equipment and consumables used and other specific direct costs such as maintenance of equipment provided. Overheads as part of internally invoiced costs are not allowable
- Audit: The potential difference between the real costs and the flat rate is not considered as a receipt, does not have to be declared and will not be claimed back by the Commission in case of audit. The auditor will check the occurrence of the generating event, and, for example that the travel took place, its duration, that the travel was done outside the place of employment and that it was related to the project. There is no need to keep other paperwork such as restaurant bills, hotel invoices, taxi receipts…etc
- COM Decision C/2011/174 - R evision of the acceptance criteria for average personnel costs Internal mechanism for uniform interpretation and application of rules. Uniform interpretation and application of rules: Internal steering committee at Director-General level.Covers all Directorates-General involved in FP7 management and the executive agencies. Works as “last instance” (tackles only issues that cannot be solved at lower level) averages based on actual costs in statutory accounts (no budgeted or estimated rates) exclusion of ineligible costs as defined in the FP7 Rules for Participation and model grant agreements and exclusion of costs claimed under other cost categories (to avoid double funding) productive hours: usual practice, verifiable and reflecting actual working standards (in practice: general rule; also applicable for non-averages)
- Respect confidentiality, as will the ERC and other EU actors
- Why it happens? Frontier research = complexity and novelty Research = highly competitive environment: pressure for publications and results, scarcity of jobs and career opportunities. HIs environment may not sufficiently foster ethical behaviour / detect misconduct. Lack of supervision of Reseach by the HI. Small number of researchers/HIs/experts => lack of independence…