Audit methodology for auditing financial instruments in the period 2014-2020

This document presents the audit methodology for the audit of financial instruments (FI) operations co-financed by ESIF in the programming period 2014-2020, including an audit checklist (Annex 1), a sampling manual to the audit authorities (Annex 2), guidance on the verification of the use for intended purpose in case of working capital (Annex 3) and an overview of the management and control responsibilities (Annex 4). The present methodology is prepared with the objective to assist the Commission auditors and audit authorities (AAs) for their audits pursuant to Article 127 of CPR.

It sets out the overall audit approach of the Commission services for carrying out audits of financial instruments in accordance with the applicable rules. It focuses on the key risk areas that might have a material impact in terms of legality and regularity of the expenditure related to the FI operations. FI related expenditure is part of the annual accounts and is, therefore, subject to the same assurance process as any other type of expenditure. This audit methodology aims to clarify the specificities of the audit work related to the nature of the FI operations and is relevant both for system audits and audits of operations.

The scope of the audit work should cover the risks related to: (i) the tasks undertaken by the managing authority at different stages of the FIs set up and implementation, (ii) the work performed by the bodies implementing the FI, the Fund of Funds (FoF), if applicable, and all or some financial intermediaries and (iii) the eligibility of expenditure.