The frequently asked questions (FAQ) listed below are relevant to the entire project management cycle. They originate from enquiries submitted by participants of the TEN-T Project Management Workshop held in December 2008 and have since been updated with the most recent information.
Section 1: General questions on planning, procedures, organisation
Section 2: Calls for proposals and Decisions
Section 3: Project implementation
Section 4: Reporting
Section 5: Payments
If, after consulting this section, you still have an issue that you would like clarify, please contact us! Questions regarding TEN-T policy fall directly under the competence of the Commission's Directorate-General for Mobility and Transport, and are not addressed here.
For specific questions regarding the Calls for Proposals, see the dedicated FAQ sections on the calls pages.
|Section 1: General questions on planning, procedures, organisation
What are the main differences in responsibilities between the Agency and the European Commission desk officers?
The Agency has assigned for each project a “project manager” who is the focal point at the Agency for all issues relating to the project's implementation and administrative follow-up throughout the full project life-cycle, from preparation of the funding Decision until final closure.
The Commission's "desk officers" are not involved in the projects' implementation phase. However, they remain in charge of all policy-related matters and representing the Commission in the countries to which they are assigned.
Is it possible to have one single point of contact that has a good knowledge of the project subsidies and grant processes?
The Agency's aim is to create a one-stop shop for information and guidance. Each project is assigned to a project manager who is the single point of contact for beneficiaries (see above). They can also contact her/him for non-project-related questions. Potential project applicants can contact the Agency at email@example.com or the dedicated Helpdesk operating for each Call for Proposals. The email addresses of the specialised Helpdesks are published on the this website when calls are announced. Their inquiry will be directed to the most relevant person who will reply at his/her earliest convenience.
For Multi-Annual Programmes, what are the main actions to be taken by the beneficiary and when?
Referring to the model Decision, the main elements of the timeline are:
- Strategic Action Plan (SAP): beneficiaries must provide the Agency with an SAP for each project within three months of the date of the notification of the Decision (article II.2.4 of Commission Decision granting financial aid)
- Annual Status Reports (ASRs): cover an entire calendar year and must be provided by the beneficiaries to the Agency annually within Q1 of the next calendar year (i.e. n+1) - by 31 March at the latest (article I.3.2 of Commission Decision granting financial aid). They contain information on the operational and financial progress of a project
- Payments: detailed explanations are provided in Section 5 below. In summary, payments can have one of the following forms:
Pre-financing payments: the first pre-financing payment is made within 45 days of the notification of the Decision (or of the reception of the guarantee when required). Further pre-financing payments may be paid in each subsequent year, depending on several criteria. Beneficiaries will be informed about decisions regarding further pre-financing together with the feedback on their ASRs.
Interim payments: Requests for interim payments corresponding to a given year may be submitted by the beneficiaries when the cumulated costs incurred reach a level such that, when applying the rate of financing, the resulting EU contribution exceeds at least the oldest instalment open. In practice, the Agency will review the costs declared in the ASR and will inform the beneficiary whether the criteria to submit a cost claim are met and if more than one calendar year should be covered.
Final payment: A final payment will be made upon submission of a final payment claim by the beneficiary and subject to the project achieving its operational and financial targets.
Can the possibility for PPP (Public-Private Partnership) participation be extended for TEN-T projects?
PPP schemes in TEN-T projects are not only allowed, but they are strongly encouraged. There is nothing to prevent a project promoter who is implementing a project through PPP procurement from applying for funding through the TEN-T Programme for either works or studies. Targeted support for PPPs has been offered in the 2010 and 2011 Annual Calls for projects with PPP potential to undertake feasibility studies to develop a value-for-money assessment or, for projects where a PPP procurement option has been chosen, to undertake the technical and/or financial studies necessary to further develop the PPP model.
Using TEN-T grants for studies to develop the PPP model, therefore, is fairly straightforward. However, to use TEN-T grants for funding the works component of a PPP has proven to be more difficult due to various constraints imposed through the Financial Regulations. In order to provide financial support for the implementation of a PPP within the TEN-T, the TEN Regulation which governs the TEN-T programme, includes the following specific non-grant financial instruments:
i) risk capital participation, delivered through a contribution to the Marguerite Fund, an independent fund with a mandate that includes the provision of equity participation to eligible TEN-T PPP projects.
For more information on the Marguerite Fund: http://margueritefund.eu/index.php?pageid=1
ii) The Loan Guarantee Instrument for TEN-T Projects, which is managed directly by the European Investment Bank to support the early stage operations of a project using user charges for its debt service. For more information: http://www.eib.org/about/documents/lgtt-fact-sheet.htm?lang=-en
In July 2012, Regulation 670/2012 amending the TEN Regulation was adopted to provide for the pilot phase of the project bond initiative. The project bond instrument is similar in design to the LGTT. It is intended to mitigate both construction and operating risks within PPP models, regardless of the payment scheme chosen. Project companies formed to implement a TEN-T PPP would use the project bond instrument in order to enhance the credit quality of the senior debt to a level that enables the company to issue bonds as an alternative form of financing to long term bank loans.
See the Financial Engineering section for more information.
Is there such a thing as good practice promoted by the Agency?
Following a suggestion made during the 2010 Project Management Workshop the Good Practice Working Group was established to discuss topics of financial and project management in order to simplify and streamline procedures. The group reported to the Project Management Workshop in February 2011, and identified directly applicable good practices, in order to offer feedback and suggestions for simplification to be further worked on in cooperation with the Agency and the Member States. Fiches were made available on a number of topics to share experience and practical advice.
In 2011, the Working Group launched a survey to assess the extent to which beneficiaries support further work in this area, and to identify new members and new good practices. In 2012, more members joined the GPWG and it is currently analysing the possibility of developing new fiches.
For more information on the activities of the GPWG, please see the relevant page.
Section 2: Calls for proposals and Decisions
If more than one Member State is involved in a TEN-T proposal, should a joint proposal or individual proposals be submitted?
The TEN-T Programme has a strong European dimension. Therefore, TEN-T supported projects better fulfil the policy objectives when Member States closely collaborate at every stage of the project - from its concept to final implementation. Applications involving several Member States must be submitted jointly in one single proposal. However, their implementation may fall under the responsibility of one or several (jointly or individually) Member States.
If the Commission proposes to reduce the budget for an activity as compared to the proposal, should the beneficiary update the project's budget?
The Commission, during the evaluation of the proposals may decide to reduce the amount of TEN-T support or the total eligible cost for a number of reasons which are stated in the evaluation report for the proposal in question. In such cases, the subsequent funding Decision will be based on the approved costs at the time of the award. In reality, the funding Decision has to incorporate all recommended adjustments to the original proposal, including eventual reductions. Such adaptations are made in collaboration with the beneficiary at the time of the preparation of the Decision.
Is it possible to submit a proposal for “works" while the present action for “studies” is not yet completed?
Studies and works over the same physical section of infrastructure cannot normally be carried out during the same period of time. In addition, due to the applicable contract awarding and other possible authorisation procedures required for works, the physical start of the works often takes place several months or even years after the end of the technical studies.
As the maturity of the project is a key criterion assessed in the evaluation process, it is therefore not advisable to include preparatory studies and subsequent works in the same proposal. In general, it is suggested to submit proposals for projects for which the contracts are already awarded or are at the final award stage. This reduces the risk of a budget change or delays and helps make the best use of available TEN-T funding.
In 2011, the calls clearly stated that a proposal must address either works or studies (including those with physical interventions), unless it is clearly demonstrated that the undertaking of the works is not dependent on the execution and/or conclusion of the study(ies).
When and by who are applicants informed whether their proposal is successful?
The eligibility committee's chair informs by registered mail those applicants whose proposals do not meet the eligibility criteria.
For all proposals meeting the eligibility criteria, the Commission establishes its own proposal on projects to be funded and those not to be retained. This is established on the basis of the outcome of the evaluation and is accompanied by detailed justification for all submitted proposals. The Commission's proposal receives the approval of Member States (TEN-T Financial Assistance Committee) and is also considered by the European Parliament. After the completion of this procedure, the list of successful and unsuccessful proposals becomes public with the agreement of the Commission.
For further information, please see the Guide for Applicants, which is available on individual Calls webpages.
Will there be a fully electronic application form in the future?
Applicants must currently submit their proposal both electronically and in hard copy.
Application Form Part A must be submitted online using the eSubmission module, whereas the other sections can be included as attachments in electronic format. In addition, a hard copy must be submitted for legal reasons (notably the requirement of the forms to be signed and stamped). The electronic version should correspond in full to the paper version.
A full electronic proposal submission is currently not possible due to technical constraints. However, it remains desirable as an element of simplification to the submission process. Its future implementation will also depend on the on-going rationalisation process of grant management systems used by the European Commission.
What are the common mistakes made in applications which are submitted?
For best practice hints and tips on preparing your proposal, please refer to the following presentations:
After completion of external evaluations for each Call for Proposals, surveys are organised requesting the opinion of Agency staff and external experts. Also, an independent observer produces a report evaluating the process and giving recommendations for improvement. The feedback is taken on board for subsequent calls.
Section 3: Project implementation
In the 2006 Annual Programme, in the EC Decision article X.2. "Amendment of the decision granting Community aid" there is the following text: "Without prejudice to Annex II, point 13, decisions may be amended with a view to extending the period of implementation of the project or modifying other parameters relating to the project only in duly justified cases."
What are the general rules for the extension of the implementation period of the Action? For what period could it be extended in a duly justified case? Is any n+2 rule applicable? What about the extension of the implementation period in the 2007-2013 Multi-Annual Programme?
As a general rule, according to Article III.2.7 of the Standard Model Decision, the request must be submitted by the beneficiary (with the agreement of the Member State concerned), by specific letter, at the latest, three months before the completion date of the Action as referred to in Article II.2.1 for Decisions adopted in 2011 and onwards. For Decisions adopted before 2011, requests should preferably be submitted at least 3 months before the end date of the Action as specified in the grant Decision, but must be submitted by the beneficiary, by specific letter, at the latest, one month before the completion date of the Action.
Each request for extension (or other proposed modification) is individually examined, considering all related factors. This may include possible award criteria applicable at the time of the selection of the project in question, the implementation timeframe of the programme, past modifications, etc.
Each request should provide solid explanations on why the delays and other changes occurred, and also sufficient assurances, including measures taken, on the feasibility of the estimated revised completion date (and on any other revision). The extension of the implementation period should not be the consequence of lack of planning, but the consequence of unforeseeable circumstances.
From 2009 onwards, the maximum period for implementation is explicitly limited by the text of the respective call for proposals.
The purpose of the amendment must be clearly justified and closely connected with the content of the Action covered by the initial Commission Decision and thus the Action's scope as selected by the Commission. Modifications do not have the purpose or the effect of calling into question the Commission's Decision to grant the financial aid and result in unequal treatment of applicants. In addition as the Call for proposals may set time limits for the eligibility of costs, the modification to the duration of the Action should not undermine the Call for Proposals specifications or requirements.
In the 2007-2013 Multi-Annual Programme, it is stated that the Commission shall cancel, except in duly justified cases, financial aid granted for Actions which have not been started in the two years following the start date of the Action established in the conditions governing the granting of financial aid. What is meant by "the start of the Actions"? Would the preparation of procurement documents cover this? What should be done in order that the Actions are treated as started?
The possibility for cancellation and all related conditions derive from the Financial Regulations and the TEN Regulation and in particular, its article 13, paragraph 1(a). These provisions are included in the model Decision.
The start event of the action, as described in the Decision, determines the commencement of the implementation phase. If this is not clearly defined in the Decision, the date of the physical commencement of the first activity or any kick-off event related to the first activity is deemed to be the start-up date for the action.
Are there any specific requirements for contracting the activities of the proposed Action? Is it required that tender procedures are carried out every time a task is to be assigned? Which procedure must be followed? Should it comply with national legislation or EU legislation?
The beneficiary must respect EU and national legislation on public procurement and meet the criteria laid down in Article III.2.5 of the Standard Model Decision. In general, recourse to the award of contracts must be justified having regard to the nature of the Action and its implementation. In addition, contracts constituting eligible direct costs of the Action should be awarded to the tenderer offering best value for money.
For further information, visit: http://ec.europa.eu/internal_market/publicprocurement/rules/current/index_en.htm
Is it possible to transfer funds from one activity to another and to what extent?
The beneficiary may, when carrying out the Action, face fluctuations of the actual costs as compared to those stated in the Decision. It may use the savings made in some activities to finance higher costs in others. Adjustments to the costs of individual activities which are described in the breakdown of the budget are therefore possible, provided that they are necessary for meeting the objectives of the Action and the activities from which the funds are transferred have been fully completed.
Ideally, a transfer of budget between activities should be limited in proportion of the total eligible costs foreseen. The Decision foresees in its article III.2.7 the possibility to the transfer the budget between activities up to 20% of the total eligible cost of the Action.
If exceptional circumstances lead to a need to transfer more than 20% of the total eligible cost of the Action - even when the threshold of 20% is exceeded due to the cumulative effect of different minor adjustments – the formal approval of the Commission is always required in line with Article III.2.7. In addition, good project management requires that the beneficiaries report this situation in the next ASR as soon as the situation is identified. An authorisation of such transfers should be requested from the Agency if the amounts transferred over the 20% allowed are to be considered eligible for EU support.
What are the specific requirements for reporting and monitoring of the results of the proposed Action?
The regular reporting requirements are stated in the model Action Status Reports (ASRs) that must be provided by the beneficiary to the Agency before 31 March each year and certified by the Member State concerned. The content of the ASRs is clearly defined in the respective Commission Decision (Article I.3.2) and should mainly provide:
- a description of past events (past progress), in particular during the reporting period
- an update on the plans and other estimates for the remaining activities
The Agency/Commission may request additional information on any issue relating to the implementation of the Action. The beneficiary is obliged to provide this information.
However, the beneficiaries are expected to report important or unforeseen events at any point during the year so keep the Agency informed as soon as possible about all issues that impact project implementation. This good practice will facilitate the examination of possible required remedial measures in line with the provisions of the financing Decisions, in the interest of the project and the beneficiaries.
Can I submit the report in my own language?
The Commission Decisions strictly limits the languages for reporting to English, French or German, which are the working languages of the Commission.
Please clarify what is expected with the SAP and what is the minimum information required?
Article II.2.4 of the Commission Decision granting Union financial aid introduced the requirement for a submission of a Strategic Action Plan (SAP) that forms the basis for monitoring and controlling progress throughout the implementation period of the Action.
The SAP is primarily a tool for the project/Action implementers and managers to steer and facilitate the implementation and monitoring, which is shared with the Agency.
The SAP plays a two-fold role, namely to:
- Describe the project management system applied to the preparation, planning and implementation of the Action up until the final completion.
- Provide decision-makers, during implementation, with all relevant information and analysis. This will allow them to take informed decisions whenever deviations from the SAP are encountered during implementation, as well as assess the impact of such decisions over the remaining implementation period.
As such, SAPs will greatly facilitate the preparation and examination of the Action Status Reports (ASRs) and eventual requests for modifications of Decisions. Contrary to the ASR, the SAP does not need to be signed by beneficiary/MS and can be therefore submitted electronically.
To facilitate SAP preparation, the Agency has issued a set of guidelines including a model which can be used.
What are the requirements for releasing the first pre-financing payment?
The first pre-financing payments are due within 45 days of the receipt of the notified Decision (or of the reception of a guarantee, if the latter is required). The amount foreseen is stipulated in article I.2.1 of the Decision.
No formal request from beneficiaries is required to launch the payment of a pre-financing. The beneficiary will receive a letter informing them of the amount.
For Multi-Annual Work Programmes, what are the requirements for releasing further pre-financing payments (ref. article I.2.1 and II 3.5)?
The Agency may decide to make further pre-financing against subsequent instalment depending on the:
- availability of funding
- actual eligible cost incurred in implementing the Action over the previous periods and
- planned costs for the period covered as estimated by the beneficiary in the Action Status Report (ASR).
This is only possible for the second and third pre-financing. Article I.2.1.2 foresees that no more than three pre-financings can be open at any time.
To receive further funding, a pre-financing must be cleared. To this end, beneficiaries should introduce a request for an interim payment, per article I.2.2. This is possible when eligible costs are incurred for an amount exceeding the amount foreseen in article II.3.3 for the relevant year. When executing an interim payment, the Agency clears the related pre-financing with the interim payment and makes the next pre-financing possible.
How long will it take until interim payments are made?
For calls under Annual Work Programme, no interim payments are foreseen, only pre-financing and final payments.
Under Multi-Annual Work Programme, interim payments will be made within 45 calendar days after the approval of the technical and financial report, for which the Agency has 60 calendar days to approve. In practice, the Agency aims to pay much quicker than this.
The Agency may suspend the period for approving the documents and/or the period for payment if clarifications or supporting documents are needed to assess the work progress or the eligibility of costs (article III.3.6). The period restarts when the answer received from the beneficiaries is accepted by the Agency.
The Agency will most likely ask for supporting documentation for a sample of cost items selected from the financial report.
What kind of evidence has to be submitted to the Agency for an interim payment in order to prove the declared costs? This refers to internal and external manpower, business operation costs and all further costs incurred by the working groups, which are exclusively performing works for our project. Do the costs have to be broken down in a specific cost breakdown structure?
Article I.2.2 provides the modalities for interim payments and article I.3 the rules for reporting. An interim payment request must be accompanied by a technical and financial report.
The required financial information includes, for each beneficiary/bank account, a workbook showing the:
- overview of eligible costs
- detail of actual expenditures
To assist beneficiaries in reporting, the Agency has designed the overview worksheet to fill in most cells automatically from the data input in the detail of actual expenditure.
The detail of actual expenditure shows one line per individual expenditure incurred. This involves invoices from suppliers and internal costs directly allocated to the project, such as personnel or travel costs.
This detail of actual expenditure may be used by the Agency as a basis to select a sample of transactions for which supporting evidence will be requested.
In order to limit the administrative burden, beneficiaries are encouraged to reach agreements with their suppliers to reduce number of invoices, e.g. through a monthly invoice from a travel agency instead of a daily one.
In addition, interim payments are only admissible if the:
- Agency has notified the acceptance of the relevant Action Status Report (ASR)
- request for payment complies with the requirements of article I.3.1 (timing and respect of form)
- eligible costs incurred and declared exceed the amount of the corresponding budget for the oldest instalment which has not been fully paid.
The cost breakdown must correspond to the activities breakdown foreseen under article II.3.3.
Which costs are eligible? (Administration costs, staff, equipment,...)
Article III.3.7 of the General Conditions addresses the eligibility of costs. Six general criteria are identified. Costs must:
- Be incurred during the duration of the Action
- Be connected with the subject of the Action and indicated in the estimated overall budget of the Action
- Be necessary for the implementation of the Action
- Be identifiable, verifiable and recorded in the accounting records of the beneficiary
- Comply with the requirements of applicable tax and social legislation
- Be reasonable, justified and comply with the requirements of sound financial management, in particular regarding economy and efficiency.
For criteria 1, the date at which costs are incurred is the basis to decide to which period the costs are related. For example, advance payments made during Year 1 for work to be done during Year 2 will not be eligible expenditures for Year 1. (It might become eligible in Year 2 if the work is achieved as planned). The eligibility of costs is not determined by when the costs were paid, but when they were incurred.
Regarding criteria 2 and 3, the Agency requires that costs are described in the annex II Decision and that they are considered as necessary to its implementation by the Project Manager in charge.
For criteria 4, the Agency requests for the selected sampling items the following documentation to verify if costs are identifiable, verifiable and recorded in the accounting records of the beneficiary:
- For external invoices: a copy of the invoice
- For internal personnel costs:
- a declaration informing the calculation method of staff costs to ensure that no indirect costs are included (the latter are not eligible). This declaration can be found on our website.
- Information: a breakdown of costs, for each amount selected in the sampling, showing for each person or category of staff, the period of work, the hourly rate and the number of hours charged to the project. In this context, a time recording method is necessary.
- SAP and other internal accounting documents, although valuable, do not replace the above mentioned documentation/information.
For additional details, please refer to the model Decision. It involves a list of non-eligible costs, including, among others, VAT, exchange losses and excessive or reckless expenditures.
The Decision and Article 12 of Regulation 680/2007 also indicates that the Action and its costs claimed must comply with EU legislation including environment, EU funding publicity and public procurement. Regarding the award of contracts in relation to the implementation of the Action, see Article III.2.5 of the Standard Model Decision and specific question below.
Indirect costs incurred are eligible for a flat rate funding up to 7%. The percentage requested (between 0-7%) must be explained in the proposition and will be verified during the Decision preparation process. If a flat rate funding is specified in the Decision, no documents will be requested to determine its eligibility of costs. If indirect costs are not foreseen in the Decision, they are not eligible.
Could the cost of office equipment for the administration for our projects be eligible as indirect costs?
Yes, as long as the Decision includes such provision. According to Article 108a of the Financial Regulation, the category of expenditures covered by the flat rate should be clearly identified in advance.
This option allows our respective services to rationalise efforts for the development of the TEN-T network by reducing the administrative burden.
Buying equipment is needed for projects itself - not for its administration. In this case, if the equipment is no longer going to be used after the project, is it allowed to charge the full cost instead of just the depreciation?
Equipment is covered by Article III.3.7(d). It clearly stipulates that only the proportion of the depreciation corresponding to the duration of the Action is eligible. In addition, if the equipment is also used for other projects, only the actual rate of use for the Action will be eligible. As a result, it is not allowed to charge the cost of the equipment. Only the relevant share of the depreciation is eligible.
Article III.3.7(d) also foresees an exception when the nature and/or the context of the equipment use justifies a different treatment. Such exception will either be explained in the annex II of the decision or be approved in writing by the Agency.
How to report cost incurred in currency other than euro?
As a tool to help beneficiaries, the Agency has prepared a template (an excel workbook) for submitting the financial information required for an interim payment or a payment of the balance. Beneficiaries should use these templates available on our website.
Beneficiaries should report the detail of actual expenditures incurred in local currency.
The table includes a cell to encode the exchange rate for translating the local currency into Euro. Beneficiaries should use the rate applicable for the month following the end of the reporting period, established by the Commission and published on its website. See: http://ec.europa.eu/budget/contracts_grants/info_contracts/inforeuro/inforeuro_en.cfm
Based on the data in local currency and the exchange rate encoded by the beneficiary, the workbook shows, in a separate worksheet, the overview of costs per activity. This is automated and requires no intervention from the beneficiary.
Please note that the amounts in euro are only indicative. The actual rate used for the payment will be the rate on the month the payment is made by the Agency.
If costs incur both in local currency and in euro, which can be the case if procurement, ordering and payments are done in euros, please do not translate your costs from euros into local currency, but complete two separate reports. One should be in euros and one in local currency, and an overview of the costs incurred should also be prepared showing the sum of the two reports. If this is applicable to your situation, please contact your project manager to obtain a specific template.
What kind of checks take place in the Agency before an interim or a final payment is made?
Ex-ante controls foresee samplings even if an audit certificate is also received. This means that several transactions are selected from the cost claim for which supporting documentation is requested. This includes:
For external invoices
- a copy of the invoice
- procurement information: a brief explanation of the activity to which the costs are related, the type of procurement (services, work, supplies), the original amount of the contract, when relevant the updated amount of the contract, the award procedure (European or national, open or restricted), the reference of the tender publication, the name of the selected contractor and the reference of the award contract publication.
- For one item selected out of the list of procurement reference, the evaluation report of the award procedure (without annexes) or information stored or detailed justification on the award procedure in line with the EU public procurement law.
For internal personnel costs
- a declaration informing the calculation method of staff costs to ensure that no indirect costs are included (the latter are not eligible). This declaration can be found in our website.
- Information: a breakdown of costs, for each amount selected in the sampling, showing for each person or category of staff, the period of work, the hourly rate and the number of hours charged to the project.
The sampling methodology is as follows: key items are first selected on the basis of certain factors (high amount, dates of invoice close to the start or end date, invoice labelling) and then a random selection is applied on the residual items. The size of the random samples should cover at least 10% of the costs declared. Random sampling enables the Agency to propose to the beneficiary to calculate the sampling error for the residual items (all costs minus the key items).
Depending on the random error rate (amount of rejected costs in relation to those selected for the sampling), the following possibilities arise:
- The error rate represents less than 2% of the sample (and has no recurrent and/or systematic character): those costs are rejected and the payment is made.
- The error rate represents between 2% and 5% of the sample: an adjustment based on an extrapolation of the findings to the population is proposed to the beneficiary. If the beneficiary is reluctant to use the results of the extrapolation, approach (4) is applied.
- The error rate represents between 5% and 10% of the sample: a second (larger) sample is extracted from the population (out of which the transactions of the first sample should be removed) and is requested from the beneficiary. The beneficiary is informed of the Agency's intention to propose an adjustment based on the findings of the first sample plus the results of the extrapolation of the findings made on the second sample. If the beneficiary is reluctant to use the results of the extrapolation, approach (4) can be applied.
- The errors represent more than 10% of the sample: the financial statement is rejected and the beneficiary is requested to prepare a reduced financial statement within one month (removing ineligible expenditures of the same nature as the errors found, and without adding extra costs).
- Depending on the nature or size of the errors, the Agency might decide to carry out an ex-post audit after the payment is done.
What checks take place regarding staff costs?
The model Decision defines staff costs (Article III.3.7.3 (a)) and indirect costs (article III.3.7.4) separately. The definition for staff costs includes actual salaries, plus social security charges and any other statutory costs included in the remuneration. It does not include any overhead or indirect costs attributed to staff. Indirect costs are eligible if reported separately as indirect costs, but may not be included in the direct staff costs.
To ensure that this is well understood and respected, if cost items involving staff costs are selected at the ex-ante sampling stage, the Agency requires the beneficiary to fill in a declaration on staff costs instead of asking them to send documentation of the actual staff costs (time sheets and salary slips) by post. Nevertheless, detailed supporting documentation has to remain available on site.
The declaration form can be downloaded from this site. The Agency also requests the following information to be provided for the sampled selected items: a breakdown of costs, for each amount selected in the sampling, showing for each person or category of staff, the period of work, the hourly rate and the number of hours charged to the project, based on a time recording system.
The Good Practice Working Group on its fiche #11 gives one concrete example of the kind of costs included in direct staff costs and the calculation of the hourly rate: .pdf (169.1 KB)
Why, how and when will external audits be done by TEN-T EA? How the beneficiary can contribute to the efficient execution of the audit?
Amongst its responsibilities for implementing TEN-T projects, the Agency is in charge of performing financial auditing of beneficiaries in charge of the implementation of co-financed projects, aiming at providing assurance on the eligibility of expenditure and reliability of cost statements accompanying requests for payments submitted by contractors.
The External Audit function covers a wide range of control techniques: transactional control, control of financial statements, financial audit, system audit, performance audit, documentary control, qualitative assessment of the implementation of the work programme, etc.
The selection of beneficiaries to be audited uses risk-based approach. Audits are performed by the External Audit function of the Agency or subcontracted to external professional audit firms.
Audits may be carried out throughout the period of implementation of the Decision until the balance is paid and for a period of five years from the date of payment of the balance.
To facilitate an efficient on-the-spot audit, it is important that the beneficiary ensures that all relevant documentation is available at the time of the audit. The beneficiary's accounting and internal/external auditing procedures must permit a direct reconciliation of the costs and revenue declared in respect of the project with the accounting statements and corresponding supporting documents.
What type of documentation and information is requested regarding procurement upon ex-post controls?
Ex-post controls done by the Agency, by its nature and facility of access to documentation and information from the beneficiary, make a more in-depth analysis of the eligibility of costs including compliance with EU procurement rules.
Some of the main elements verified by the Agency's external auditors for the selected sampling contracts (these are communicated beforehand to the beneficiary) are:
||Type of Procurement Procedure applied and respect of applicable Public procurement thresholds
- In the bid
- In the contract award notice
- In the contract
|Type of contract
||Contract notice sent and published (No and date of notice) including clear reference to applicable award criteria and deadline for submission of tenders
Costs declared in EUR (without VAT)
|Date of contract signature
||Documentation of the tender opening and evaluation phases leading to contract award Decision
||Project Activity costs declared under
|Review of signed contract and subsequent amendments
||Number of offers received, including review of successful and unsuccessful bids
||Contract award notice sent and published (Number and date of notice) EU Official Journal date
||Notification of contract award to successful and unsuccessful bidders
||The content of contract notices and award notices are checked against the requirements of Directives 2004/17/EC and 2004/18/EC (in particular the relevant annexes of these Directives which detail the content expected to be present).
The Court of Auditors have also the right to verify procurement in audits to the TEN-T projects and their verifications might not be limited to the content verified by the Agency's ex-ante and ex-post controls.