New Audit Rules Oct 2024
Q: What are the main differences between the previous procedure and the current procedure?
A: There are following changes:
- The threshold for the mandatory external audit of projects is changed from the current EUR 10 000 to EUR 15 000 and will apply from the October 2024 call (for projects starting with 2243xxxx).
- The grantees should request the licensed auditor to prepare a Certificate on financial statements.
- Methodology shall be in line with the International Standard on Related Services 4400 (“ISRS4400 (Revised)”). This methodology prescribes specific procedures for the auditor to be applied (“Agreed-upon procedures”). These procedures are defined specifically for each type of cost declared in accordance with the grant contract. The auditor will report a confirmation or an exception for each specific procedure.
- According to the new rules, the Terms of Reference (‘the ToR’) are to be signed by the Grantee and the Auditor. Auditors will produce an independent report of factual findings concerning the Financial Statement(s) and issue a Certificate of Financial statements (‘CFS’) based on the compulsory reporting template (available on our website).
- The Grantee must submit the CFS to the Fund for approval within 30 working days after the Contract Implementation Period End.
Q: What is the CFS composed of?
A: The CFS is composed of two separate documents:
- The Terms of Reference (‘the ToR’) to be signed by the Grantee and the Auditor;
- The Auditor’s Independent Report of Factual Findings (‘the Report’) to be issued on the Auditor’s letterhead, dated, stamped and signed by the Auditor which includes:
- the Agreed-upon procedures (‘the Procedures’) with factual findings to be confirmed by the Auditor;
- Financial Statements (Summary table, Financial settlement)
The CFS must be included in the final report according to Article 4.1 of the Contract.
Q: How to check if the auditor is complying with the Applicable Standards mentioned in the Terms of reference?
A: The auditor must be a holder of a license to provide audit services in accordance with the local legislation applicable in the country where the Grantee’s seat is located and must provide evidence of the license to the Grantee and the Fund upon request. An internal auditor will not be accepted. In case Grantees located in EU member states, the Auditor must be qualified to carry out statutory audits of accounting documents in accordance with Directive 2006/43/EC of the European Parliament and of the Council of 17 May 2006 on statutory audits of annual accounts and consolidated accounts, amending Council Directives 78/660/EEC and 83/349/EEC and repealing Council Directive 84/253/EEC or similar national regulations.
The following are links to national chambers of auditors in the V4 countries as well as to the IFAC:
Q: Where can I find the documents related to the procedures?
A: All documents related to the new audit procedures can be found on our website under bookmark Documents – Program documents - Applicable from Oct 2024 Call
Interim report
Q: What exchange rate can I use to convert costs incurred in other currencies to EUR in the Financial Settlement?
A: You should use an exchange rate published by the national bank of your (the grantee’s) country. You can choose one of two options:
- the exchange rate applicable on the date of receiving the grant tranches to the grantee’s bank account stated in the grant contract (If the grant is paid to an EUR account and is not converted to the local currency, the grantee can still use the exchange rate from the date of receiving the grant tranches).
- the monthly average exchange rate of the respective national bank in the last full month of the project implementation period.
If the grant is divided into three tranches, different exchange rates can be used for the Interim Financial Settlement (reporting costs incurred in the first phase of the project) and the (Final) Financial Settlement (reporting costs incurred in the second phase of the project).
Q: Do I have to fill out separate Financial Settlement sheets if I paid invoices issued in different currencies?
A: No. The financial settlement should always be filled out in the currency of your organization's (the grantee’s) bank account(s). If you use several accounts for payments (e.g., one in EUR, one in your local currency), fill out one Financial Settlement sheet in each bank account currency, corresponding to the costs paid from the account in question. These should be created as separate sheets in one Excel file.
If you paid any foreign invoices, you should fill in the Financial Settlement with the amount deducted from your bank account in your own bank account currency. The exact amount can be found in your bank statement or bank transfer confirmation.
Q: How can I enter my partners’ costs in the Financial Settlement?
A: The Financial Settlement (FS) shall only list bank transfers made from your (the grantee’s) account. If your partners paid certain costs during the project implementation, you should fill out the FS with information about the reimbursement you made to your partners for these costs. Payments made to partners should be divided according to cost categories, even if you reimbursed all costs to them in one payment.
Q: We haven't spend 50% of the first installment. Can I submit the Interim Report later?
A: Yes, but you will have to consult it with the Fund's project manager in advance. If the delivery is delayed with more than a few working days, an official request letter must be submitted to the Fund for approval. The letter must be written on a letterhead paper, contain a detailed reasoning and specific date for the new delivery of the Interim Report. The request must be signed by the statutory representative and sent to your project manager in scanned form.
Q: When we can expect the second tranche?
A: The Fund has 10 working days to review the Interim Report counting from the date of their postal delivery. If the report is incomplete or if further documents are needed, the deadline applies from the day of delivery of these additional documents. Once the Interim Report is approved the Fund has 15 working days to transfer the 2nd tranche of the grant. Therefore, the sooner you provide us with the Interim Report and Interim Financial Statement, the sooner you will know whether the Fund approves the continuation of your project and receive the next tranche from our side.
Please keep in mind that you are only eligible for the second tranche if you have already spent approximately 50% of the first installment by the given deadline. Otherwise the Interim Financial Statement cannot be approved and you will need to prepare another report complying with this criterion.
Q: What should the Interim Report look like?
A: The Interim report is a textual summary of the preliminary progress and results of the project implemented within the marked period. When filling out the Interim Report, try to be as specific as possible. The Interim Report is not only a checklist of events and output that were implemented, but also serves as a means to evaluate your own work, different aspects of the implementation and the role of the partners in the cooperation. Describe whether the implementation is on track as you planned, highlight any changes that were made compared to the original plan and any obstacles that hindered your work.
Q: Do you require any invoices/contracts attached to the Interim report?
A: No, we do not require additional documents by default, however, the assigned project manager may ask for them on an individual basis if some cost items or descriptions are unclear.
Q: How should I fill out the Interim Financial Settlement?
A: Instructions can be found on a separate sheet in the Interim Financial Statement XLS file. When describing the individual costs in Column 5 “Cost description”, be as specific as possible. The Fund cannot accept insufficient descriptions such as “expert fee”, “hotel” or “bus ticket” without the proper indication as to whom the cost was paid, for what reason, and for what output/activity.
Q: Our organization has two or more bank accounts in different currencies, how should we proceed?
A: If your expenses have been incurred in more than one currency, you must create a separate Financial Settlement sheet for each currency. Please do not forget, however, that the total sum should always be indicated in EUR (€) in each sheet.
Q: Which exchange rate should be used in the Interim Financial Statement?
A: When choosing the proper rate, you have two options. You may either use the exchange rate of the national bank (where the grantee resides) on the date of converting the first installment into the local currency or the monthly average exchange rate of the respective national bank in the last full month in which the first (interim) period of the project ends.
Q: Are there any templates for the Interim report?
A: Templates are found at https://www.visegradfund.org/archive/documents/visegrad-visegrad-strategic-grants/
Q: How do we send the Interim documentation?
A: The Interim Report and the Interim Financial Statement need to be uploaded to the online system, under the tab “Interim Report”, and sent to the Fund via post as well by the given deadline.
Q: Do I have to submit an Interim Report?
A: In case the contract specifies three or more payments of the awarded grant, the grantee will have 20 working days after the marked period (see Article 6.2) to prepare the Interim Documentation, which consists of the following elements:
- Interim Report – a textual summary of the progress and results of the project implemented within the marked period (you can find the template on our website).
- Interim Financial Statement – a spreadsheet containing all the expenditures covered by the grant in the marked period (template on the website).
Final report
Q: Which documents must be sent by post?
A: The following documents must be delivered to the Fund’s address 20 working days after the end of the implementation period.
FOR PROJECTS UNDER €10,000:
- Final Report – printed out from our online system, last page signed and stamped by the statutory representative of the grantee.
- Financial Statement – all pages and additional sheets filled out, signed and stamped by the statutory representative of the grantee.
- Copies or samples of promotional materials that cannot be uploaded to our system.
- Signed Transportation Costs Reimbursement Sheets (if applicable) – see instructions in Annex 2 of this document.
- Copies of all invoices connected to the costs described in the Financial Statement and their corresponding bank transcripts.
FOR PROJECTS OVER €10,000:
- Final Report – printed out from our online system, last page signed and stamped by the statutory representative of the grantee.
- Financial Statement – all pages and additional sheets filled out, signed and stamped by the statutory representative of the grantee and by the auditor.
- Copies or samples of promotional materials that cannot be uploaded to our system.
- Audit Report with all necessary annexes – signed and stamped by the certified auditor, indicating his/her credentials as member of the relevant national chamber of auditors.
Q: Our organization has two or more bank accounts in different currencies, how should we proceed?
A: If your expenses have been paid for in more than one currency, you must create a separate Financial Settlement sheet for each currency. Please do not forget, however, that the total sum should always be indicated in EUR (€) in each sheet.
Q: Which exchange rate should be used in the Financial Statement?
A: When choosing the proper rate, you have two options. You may either use the exchange rate of the national bank (where the grantee resides) on the date of conversion of the previous installment into the local currency or the monthly average exchange rate of the national bank in the last full month of the project implementation period.
Q: How should the Financial Statement be filled out?
A: Instructions can be found on a separate sheet in the Financial Statement XLS file. When describing the individual costs in Column 5 “Cost description”, be as specific as possible. The Fund cannot accept insufficient descriptions such as “expert fee”, “hotel” or “bus ticket” without the proper indication as to whom the cost was paid, for what reason, and for what output/activity.
Q: Where can I find the template for the Final Report?
A: In 2020 the Fund introduced a web-based final reporting interface, which can be accessed in our online system (my.visegradfund.org). Grantees need to fill out all sections under the tab “Final Report” and click on SUBMIT on the last page. Once the electronic report has been submitted, you must print out the Final Report by clicking on the PRINT button. This printout shall be signed and stamped by your statutory representative and sent to the Fund via post.
After online submission, the report cannot be modified any longer. Should any problems arise, please contact your assigned project manager.
Q: What kind of documents do I have to prepare?
A: Once the entire project implementation period has come to an end, there will be 20 working days available to prepare the following Final Documentation:
- Final Report – a narrative overview of all activities undertaken and results achieved, accompanied by photos, attendance lists and other documentation. The Final Report must be prepared in our on-line system under the tab “Final Report”. After filling out and saving all sections, you must submit the report by the given deadline and print out a paper version from the system.
- (Final) Financial Statement – a spreadsheet containing all the expenditures covered by the grant, and the summary table (template on the website).
- Audit Report – for projects with a budget over €10,000 (template on the website)
- Transportation Costs Reimbursement Sheet (only applicable for projects without an Audit report) – see instructions in Annex 2 (p. 29) of this document
Project closure
Q: Can audit costs be paid after the project’s implementation period has ended?
A: Yes, they can. This is the only cost that can be paid after the implementation period.
Q: When is my project officially finished? When do I receive the final installment?
A: The Fund has 20 working days to review the final documentation of the project, counting from the day of delivery of all required documents via post. If all reports and attachments comply with our rules, the Fund authorizes the transfer of the last installment or requests that the unused grant amount be returned to the Fund’s bank account. After all obligations have been cleared, the assigned project manager confirms the conclusion of the project.