Annex VII - European Commission | Choose your language



|[pic] |EUROPEAN COMMISSION |

| |Directorate-General for Education and Culture |

| | |

| |Culture and Creativity |

| |Creative Europe programme – MEDIA |

CALL FOR PROPOSALS EAC-S16-2014

ANNEX VII

MODEL TERMS OF REFERENCE FOR THE CERTIFICATE ON THE FINANCIAL STATEMENTS

part i

Table of Contents

Terms of Reference for the certificate on the financial statements of a European Union (DG EAC) financed Grant Agreement

1 Responsibilities of the Parties to the Engagement 2

2 Subject of the Engagement 2

3 Reason for the Engagement 2

4 Engagement Type and Objective 2

5 Scope of Work 3

5.1 The Auditor shall undertake this engagement in accordance with these ToR and: 3

5.2 The Terms and Conditions of the Grant Agreement 3

5.3 Planning, procedures, documentation and evidence 3

6 Reporting 3

Annex 1 4

Information about the Subject of the Expenditure Verification 4

Annex 2 5

Scope of Work – Procedures to be performed 5

Part 1

Terms of Reference for the certificate on the financial statements of a European Union (DG EAC) financed Action Grant Agreement

The following are the Terms of Reference (‘ToR’) on which ‘the Beneficiary’ agrees to engage ‘the Auditor’ to perform an expenditure verification and to report in connection with a European Union financed grant Agreement concerning (the ‘Grant Agreement’). The Commission is not a party to this engagement.

The report signed in accordance with the present ToR for an Expenditure Verification corresponds with the requirements of article 207.3 of the Rules of Application of the Financial Regulation requiring the use of audit certificates before certain amount of grant can be paid.

Responsibilities of the Parties to the Engagement

‘The Beneficiary’ refers to the organisation that is receiving the grant funding and that has signed the Grant Agreement with the Commission.

The Beneficiary is responsible for providing a Financial Report for the Action financed by the Grant Agreement and for ensuring that this Financial Report can be properly reconciled to the Beneficiary’s accounting and bookkeeping system and to the underlying accounts and records.

‘The Auditor’ refers to the Auditor who is responsible for performing the certificate on financial statements as specified in these ToR, and for submitting a report of factual findings to the Beneficiary.

The Auditor is a member of which in turn is a member of the International Federation of Accountants (IFAC).

Subject of the Engagement

The subject of this engagement is the Financial Report in connection with the Grant Agreement for the period covering . The information, both financial and non-financial, which is subject to verification by the Auditor, is all information which makes it possible to verify that the expenditure claimed by the Beneficiary in the Financial Report has occurred, and is accurate and eligible. Annex 1 to these ToR contains an overview of key information about the Grant Agreement and the action concerned.

Reason for the Engagement

The Beneficiary is required to submit to the Commission a certificate on the financial statements produced by an external auditor in support of the payment requested by the Beneficiary under Article II.23.2(d) (ii) of the General Conditions and Article I.4.1 of the Special Conditions of the Grant Agreement. The Authorising Officer of the Commission requires this report as he makes the payment of expenditure requested by the Beneficiary conditional on the factual findings of this report.

Engagement Type and Objective

This constitutes an engagement to perform specific agreed-upon procedures regarding an expenditure verification of a European Union financed Grant Agreement. The objective of this expenditure verification is for the Auditor to verify that the expenditure claimed by the Beneficiary in the Financial Report for the action financed by the Grant Agreement has occurred (‘reality’), is accurate (‘exact’) and eligible and to submit to the Beneficiary a report of factual findings with regard to the agreed-upon procedures performed. Eligibility means that the funds provided by the grant have been spent in accordance with the terms and conditions of the Grant Agreement.

As this engagement is not an assurance engagement the Auditor does not provide an audit opinion and expresses no assurance. The Commission derives its assurance by drawing its own conclusions from the factual findings reported by the Auditor on the Financial Report and the payment request of the Beneficiary relating thereto.

Scope of Work

1 The Auditor shall undertake this engagement in accordance with these ToR and:

- in accordance with the International Standard on Related Services (‘ISRS’) 4400 Engagements to perform Agreed-upon Procedures regarding Financial Information as promulgated by the IFAC;

- in compliance with the Code of Ethics for Professional Accountants issued by the IFAC. Although ISRS 4400 provides that independence is not a requirement for agreed-upon procedures engagements, the Commission requires that the auditor also complies with the independence requirements of the Code of Ethics for Professional Accountants.

2 The Terms and Conditions of the Grant Agreement

The Auditor verifies that the funds provided by the grant were spent in accordance with the terms and conditions as required by the Grant Agreement.

3 Planning, procedures, documentation and evidence

The Auditor should plan the work so that effective expenditure verification can be performed. For this purpose he performs the procedures specified in Annex 2 of these ToR (‘Scope of Work – Procedures to be performed’) and he uses the evidence obtained from these procedures as the basis for the report of factual findings. The Auditor should document matters which are important in providing evidence to support the report of factual findings, and evidence that the work was carried out in accordance with ISRS 4400 and these ToR.

Reporting

The report on this expenditure verification should describe the purpose and the agreed-upon procedures of the engagement in sufficient detail in order to enable the Beneficiary and the Commission to understand the nature and extent of the procedures performed by the Auditor. The auditor should use the reporting formats of part II of these ToR.

Annex 1

Information about the Subject of the Expenditure Verification

[The table below should be completed by the Beneficiary and be attached as Annex 1 to the Terms of Reference for use by the Auditor.]

|Information about the Subject of the Expenditure Verification |

|Reference number and date of the Grant | ................
................

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