Financial Management of european funded projects as your sweetest dream
I consult a lot of organisations and individuals across Europe on how to deal successfully with the financial management and the EU external audit of their funded european project. I always start my engagement with one phrase ” An expertise in financial management of european funded projects is the easiest asset to obtain, in the least possible time and with the biggest financial rewards”. I guarantee to individuals that at the end of my course or support to them that wish to become or are already assigned as financial managers of european funded projects, they will have obtained the necessary expertise to exploit a promising and rewarding career as “Financial Managers of European Funded Projects“. There are a couple of reasons for that:
- Financial Management of european funded projects does not require you to be creative and experienced for doing your task successfully. You mainly need to apply fully and comprehensively the ENA™ rule in each of your project expenses in order to be considered eligible. This rule is simple but very powerful for developing an audit-proof european funded project. I elaborate further on that rule a little bit later. You only need to consider now that the ENA™ rule is very easy to apply and it is not like developing a proposal for funding that requires a very good network and experience in how to apply the FETP™ recipe (see more info about this recipe at my previous article on Why you cannot afford to fail and how to succeed in european funding.
- Around 980€ billion till year 2020 are distributed to organisations as financial support from the EU budget. These organisations are desperate (some of them maybe haven’t realised it yet) of skilled financial managers for ensuring sound financial management of the received EU funding and there will be no rejection of claimed costs and consequently return of some funding after the financial control by the EU or after an EU external audit. As a reminder according to the EU Financial Regulation 966/2012, all projects that receive a grant higher than 60,000€ can be externally audited up to 5 years after the end of the project.
If we consider also the fact that EU financial controls as well as EU external audits have been stricter as well as more frequent the last 5 years, we realise that it is very important for any organisation that receives european funding to engage highly skilled and competent financial managers for their project. These individuals should be fully familiar on how to apply the ENA™ rule in each of the claimed expenses and in how to read the binding contracts. The ENA™ rule requires that each claimed expense in a european funded project to be
- E: Economic (best value for money) and
- N: Necessary (required by the contract) and
- A: Actual (to have actually taken place and properly recorded and paid).
That is the ENA™ rule that although it is common sense, it is not common practice.
Financial Management of european funded projects as your worst nightmare
Unfortunately, most of the individuals that are involved as financial managers in european funded projects do not apply this rule or they are not aware how to apply it properly and fully. The consequence can be your worst nightmare. Part of your claimed costs or in some cases all your claimed costs can be rejected by an EU financial control or more commonly by an external audit. Can you imagine your organisation being involved in a european project that has been fully implemented from the technical point of view and in some cases with great achievements but on the other hand after it has been externally audited by the the EU, the audit findings oblige your organisation to return the received grant, because the ENA™ rule hasn’t been applied fully? This a really bad nightmare that unfortunately has become a reality for many organisations because they haven’t applied intentionally or even unintentionally the ENA™ rule properly. Consequently, organisations had to close or suffer big financial challenges with the requested returns by the EC.
How to add further value on what you have just discovered
What is your view on the ENA™ rule? Do you have experiences from projects that have been audited and what was the main conclusion? Please comment below on your experiences.
In case you want to develop further what you have discovered in this article and exploit fully and become a pro in european funding and financial management, you are strongly suggested to join any of my Funding Expert Academy programmes by registering first for free to receive free educational videos that will make an eye opening experience for you.