WORKING WITH DG ECHO AS AN NGO FPA
Credit: ©EUECHOAnouk Delafortrie
ECHO is accountable for the use of the humanitarian aid funds. To discharge this responsibility, ECHO must be able to confirm each year that funds have been spent as intended and in compliance with the appropriate Regulations. The audit process is a part of the overall control process by which ECHO receives information that enables it to give such assurance.
The audits also provide ECHO with information about its partners and so serve to build the confidence that is needed in the organisations that are essential to ECHO's mission.
Audits, checks and inspections can be considered as an essential part of securing the continuing availability of humanitarian aid funds.
The Commission or any other organisation mandated by the Commission, may audit the Humanitarian Organisation's use made of the Community contribution. Such audits may be initiated during the implementation of the Grant Agreement until five years after Final payment of the Grant Agreement.
ECHO can carry out audits in the Field and at Headquarter level. An audit is neither an evaluation nor a monitoring of the Action.
ECHO Audit Sector is supported in its audits by contractors: an international network of audit companies or a consortium of independent audit firms operating in the countries of the Union who are members of an international accounting and auditing association. The Audit contractors are appointed by means of a framework contract.
ECHO Audit Sector works in very close cooperation with the team of external auditors to develop audit methodology, to ensure training of the auditors so as to ensure quality and coherence in the audits.
The field audits and HQ audits can be carried out either by the external auditors or by ECHO Audit Sector team or both.
Each audit is conducted in line with generally accepted auditing standards. Programmes have been developed to guide the audit; files are drawn up with supporting documentation leading to conclusions and a report is issued for each audit.
The audit methodology is being continuously developed in order to ensure more efficient, productive and effective audits. Within the confines of business confidentiality, all audits are carried out in openness and transparency with the involvement of the auditees at each stage of the process.
If the Commission carries out or authorises an audit relating to the implementation of the Action, it must provide the Partner with a copy of the audit report before it is issued. The comments of the Partner will be annexed to the final audit report if provided within a reasonable deadline.
If these written agreements are not respected by the partner this might result in recoveries of the payment made.
The result of the audit work also leads to recommendations to improve the financial management of DG ECHO Partners and provides feedback on DG ECHO procedures and practices applicable to grant management.
Audit findings may entail recovery decisions by the Commission. The Partner assures full assistance to the Commission or any other organisation mandated by the Commission in the course of field and headquarter audits.
At the next audit visit, the actions taken as a result of the recommendations will be subject to audit review. Furthermore ECHO's unit in charge of audits can perform these checks at any time, especially when the audit recommendations concern critical elements of the FPA. In addition, at the occasion of the periodic assessment, the partners will be asked to explain the actions they have taken to address the audit recommendations.
RECORD KEEPING OBLIGATION
The partners will make sure that information is available for audits, checks and inspections carried out by the Commission and other institutions. This information should be available at all time, and sufficiently detailed to facilitate the verification of the nature, value and necessity of individual transaction and of the eligibility of costs.
Upon request by ECHO, the partner shall ensure that at least a copy of all the relevant information for inspection, checks and audits at the level of the partner's HQ can be made available within 30 days.
In particular the partners have to keep all the documents necessary to verify transactions and justify eligibility, especially accounting and tax records but not only.
Furthermore, all the documents have to be archived in originals documents and kept under any appropriate secure medium at HQ or field level. In any case, the partner has to ensure that at least a copy available at HQ upon Commission or auditors request. A digitalised original format is possible, instead of paper copy, if authorised by or if in compliance with the national law of the partner signing the agreement.
The documents have to be kept for 5 years from the date of payment of balance except when national regulation foresees longer duration and except on-going audits on the Specific Grant Agreement, or when there are pending appeals, litigation or pursuit of claims, until such cases are closed.