Each year, the European Commission's Humanitarian Aid and Civil Protection department (ECHO) is responsible for allocating almost EUR 1 billion. To fulfil its accountability towards all stakeholders, ECHO is audited by the European Court of Auditors, the statutory auditor of the European Commission. It is also audited by the Internal Audit Service of the Commission and its own Internal Audit Capability, both of which focus on internal procedures and controls within ECHO.
The External Audit sector manages the audits and verifications of all ECHO partners, implementing humanitarian aid actions mostly via the use of external audit companies who have specific in-depth knowledge of ECHO’s procedures, practices and outlook. Based on internationally accepted standards, the audits performed are specific, complete, intensive and thorough, thus giving ECHO the level of assurance as required by financial rules and regulations.
ECHO audits and verifications take place both at partners' headquarters and in the field where the action takes place, comparing the information from all sources. The focus is not only to check whether the criteria of the Framework Partnership Agreements (FPA) in place are being followed and spending is properly accounted for but also the systems of the partner in order to share best practices.
ECHO has developed an internal control strategy built on a set of supervisory mechanisms. These also include the Partner assessment before signature of the FPA, the FPA itself and its reporting obligations, and the External Audit Sector as the final link in the overall control chain, giving its feedback via the audits back to the assessment of Partners.
The main objective of the internal audit is to provide reasonable assurance to the Director General as to the effectiveness and efficiency of the internal control systems put in place within DG ECHO. It is done according to a risk assessment based work programme. The working methodology of the audits includes, inter alia, the analysis of available documentation, interviews with relevant staff and sample testing. The result is an audit reports, which include observations and recommendations for improvement. These are discussed with the services audited, before final transmission to the Director General.