Terms of Reference for Expenditure Verifications of Programme Estimates
The following serves as guidance on the use of terms of reference (ToR) for expenditure verifications of programme estimates for Audit Task Managers (ATMs) and other staff involved with the management and control of programme estimates within the Commission services.
In accordance with the Practical Guide of the procedures applicable to the programme-estimates financed by the EDF and the BUDGET (project approach), an expenditure verification is mandatory before submission of a request for closure of a programme estimate: 'when the total expenditure incurred by the imprest component of the budget of a programme estimate amounts to the equivalent of EUR 200.000'. Nevertheless, where deemed necessary, expenditure verifications can be carried out on presentation of a:
- record of expenditure (e.g. clearance);
- record of expenditure related to a request for replenishment;
- record of expenditure related to a request for closure of a project of which the imprest component does not exceed EUR 200.000
Some important remarks:
• The specific rules in the Technical and Administrative Provisions of the Financing Agreement and/or in the Technical and Administrative Implementing arrangements of the programme-estimates (e.g. audit/checking of the quarterly, semi-annual or annual expenditure summaries) should be taken into account when expenditure verifications are planned;
• Several expenditure verifications can be performed under a single set of ToR;
• The role of the National or Regional Authorising Officers: for programme estimates under the 8th EDF, Headquarters recommends that the Commission Delegation itself launches the expenditure verification and obtains an expenditure verification report.
Use of the Terms of Reference
• The ToR text is highly standardized and only shaded text parts can be adapted. Other parts of the ToR cannot be modified, except after consultation of and approval by the audit sectors in the FCA units at Headquarters.
• Some AIDCO Directorates recommend the use of local or regional auditors but Delegations can opt for using AIDCO's Audit Framework Contract where they consider this is necessary or more appropriate (in that case AFC batch n° 2 should be used).
• Reporting deadlines: Delegations (i.e. ATMs) can establish their own deadlines for the submission of the verification report by the Auditor. However, a minimum of 10 working days after finalization of the field work is recommended. In this respect it should be noted that there are two options depending on whether the scope of the verification covers one or several records of expenditure (see point 7.2 of the ToR).
• Contracting method and scope: It is recommended to group the expenditure verification of several programme-estimates covered by the same Financing Agreement under the same contract and, therefore, to use only one set of ToR. This enhances coherence in the reporting of the results of the expenditure verifications.
• At the time of the signature of the contract for the expenditure verification, the Auditor should be provided with a copy of the Practical Guide applicable to the programme-estimates subject to the expenditure verification.
• In the case of a local service contract (so not for the Audit Framework Contract or other framework contracts, i.e. local or regional) the use of a global price contract is recommended.
- Terms of reference for an expenditure verification of a European Community financed programme estimate [127 KB]
- Annex 1 Information for the programme estimate [71 KB]
- Annex 2 Specific procedures to be performed [106 KB]
- Annex 3 Model report of factual findings for an expenditure verification of a European Community financed programme estimate [110 KB]