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Horizon 2020 is the EU’s new framework programme for research and innovation. It is the largest programme of its kind, with more than €70 billion of funding available between 2014 and 2020 (in addition to the private investment that will be attracted).
The programme, which is open to everyone, has three main priorities: excellence in science, industrial leadership and societal challenges. Specific provisions should facilitate the participation of small and medium-sized enterprises to this funding programme.
One of the objectives of the European Commission has been to simplify the architecture, rules, procedures and control strategy of the framework programme, to attract the most innovative enterprises.
In certain circumstances, a qualified external auditor must perform agreed-upon procedures to meet the European Commission’s requirement to certify the specific financial statements prepared by the recipients of Horizon 2020 funding.
These services may be provided by:
- An external auditor– the statutory auditor or not – qualified to carry out statutory audits of accounting documents in accordance with the EU statutory-audit directive (2006/43/EC)
or
- A public officerwith the legal capacity to audit the beneficiary (only for research organisations, secondary- and higher-education establishments and public bodies)
or
- An internal or external auditorin accordance with internal financial regulations and procedures (only for international organisations)
The auditor needs to produce a certificate on the financial statements (CFS), which is a factual report designed to enable the European Commission (or the EU agency responsible for awarding the grant money) to check whether costs declared in the financial statements are eligible.
A CFS is required if a beneficiary requests a total financial contribution of €325,000 or more as reimbursement of actual costs and average personnel costs (i.e. direct personnel costs declared on the basis of unit costs calculated in accordance with its usual accounting practices). This €325,000 threshold does not apply to indirect costs, costs based on lump sums, flat rates or unit costs other than those for personnel costs calculated in accordance with the beneficiary’s usual cost-accounting practices.