Kompas

Organizations must comply with donor requirements to confirm the targeted use of funds for personnel within the framework of grant agreements. These rules are usually specified in the grant agreement itself or referenced as additional instructions. Donors often provide standard timesheet templates for project staff to ensure proper reporting.

Let’s examine the reporting requirements for project personnel costs under European Union grants.

The Indicative Audit Programme of the European Commission (hereinafter – the Programme) contains recommendations and procedures for auditing funds received from EU sources and ensures compliance with financial regulations and requirements. This Programme serves as a guideline for auditors conducting financial audits of EU-funded projects but can also be used by grant recipients for additional clarification on the documentary confirmation of costs.

Thus, in accordance with the Programme, the auditor, when reviewing personnel expenses, must:

• Review internal guidelines and time recording procedures and perform interviews.
• Confirm if there is a general time-record system in place or if the participant uses simple time declarations (timesheets)
• Assess compliance

If the participant uses the template for time declarations available on Funding & Tenders Portal Reference (or its internally approved template), verify that documents are signed at least monthly:

• by the person working for the project,
• by the supervisor.

It is important to note that the donor specifically refers to an individual timesheet for each employee involved in the project.

Depending on local labour regulations, the organization, as an employer, could be required to generate a general timesheet in the legally approved format when processing payroll.

However, for donor reporting purposes, the organization must also maintain individual timesheets (time declarations) for each employee. The individual timesheet is completed to indicate the distribution of the employee’s working hours across various activities funded by different grant contracts/projects, overtime work, and other time that is not financed by donor funds.

• Verify that the monthly declarations/time records include at least the following minimum requirements:
  • the title and number of the action, as specified in the Grant Agreement,
  • the participant’s full name, as specified in the Grant Agreement,
  • the full name, date and signature of the person working for the action,
  • the number of days per month worked for the action in the period covered by the time record,
  • the supervisor’s full name and signature,
  • a reference to the action tasks or work package described in Annex 1 GA, to which the person has contributed during the declared month.
• Verify that the salaries, social security contributions, taxes and other costs included in the remuneration arise from national law or the employment contract, collective labour agreement (or equivalent appointing act).
• Review the personnel cost components included in the daily rate and verify that they are free of ineligible items.
• Vouch the costs claimed to the employment contracts, individual payroll/salary slip and bank statements showing amounts paid.
• Verify that the costs have not been re-invoiced by the participant to another legal entity.

Therefore, for donor reporting on the targeted use of personnel costs, we recommend having the following documents available:

• Employment contract,
• Payroll accounts,
• Individual timesheet (time declaration), broken down by all projects to which the employee is assigned,
• Payment slips,
• Other documents required by local labour laws.