When a project ends, the obligations do not

EU-funded projects come with a clear set of financial accountability rules. The granting authority (the European Commission or its executive agencies) retains the right to verify how funds were used during the project and for several years after the final payment. For many beneficiaries, this is the part of grant management that typically receives the least attention during the project itself, and the most stress when it actually arrives.

We know this from our own experience. We have invested considerable time and effort into compliance such as building internal processes, organising documentation, and ensuring that every cost we declared could be traced, verified and defended. We would like to put that experience to work for others.

What is an EU audit, and why does it matter?

Under the Horizon Europe Grant Agreement, beneficiaries are subject to three distinct types of financial controls, each serving a different purpose and carried out by different parties:

1. Checks and reviews
   These are the first layer of oversight, conducted by the granting authority and typically focus on verifying financial reports, deliverables, and compliance with the terms of the grant agreement. They can occur during the project or after it closes.
   
   
2. Audits
   They represent a more in-depth form of scrutiny and are carried out either by the European Commission directly or by external audit firms contracted on its behalf. The focus is typically financial but may also extend to technical or administrative aspects of project implementation. Crucially, if auditors identify systematic errors, findings can be extended to other reporting periods or even to other EU-funded projects managed by the same organisation. This makes preparation not just advisable, but essential.
   
   
3. The Certificate on the Financial Statements (CFS)
   Here we speak about a mandatory first-level audit, required mainly when a beneficiary’s total EU contribution reaches or exceeds €430,000 across the project. The CFS is issued by an independent qualified auditor using the official European Commission template. It verifies that declared costs are in line with the beneficiary’s usual accounting practices and the conditions of the grant agreement. The certificate is submitted with the final financial report, within 60 days of the project’s end.

A relatively large share of EU funding that is ultimately returned to the Commission is recovered precisely because organisations were unprepared for these controls. Such cases include e.g. incomplete documentation, inconsistent cost allocation methods etc. The consequences can range from partial cost rejection to a full repayment demand.

What PEDAL Consulting now offers

We are introducing administrative support for EU audits as a formal service. It is available to organisations participating in Horizon Europe and other EU-funded programmes. The service covers preparation and support across all three types of controls described above: checks and reviews, full Commission audits, and the CFS process.

Get in touch

If your organisation is currently managing an EU-funded project, approaching the end of a reporting period, or has received an audit notification and does not know where to start, we would be glad to hear from you. Reach out to us to find out how we can support your audit preparation or to book an initial consultation.

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