Reporting is an essential task of project management in which the whole partnership is highly involved. It allows the programme to monitor project progress and, in particular, to verify the compliance of project implementation with the approved application form as well as with the rules governing the EU Structural Funds and the Interreg CE Programme. Project reporting and monitoring are the basis for the reimbursement of ERDF co-financing to the project.
Reporting and monitoring take place at partner and project levels. The joint reporting at project level follows a monitoring plan as described below.
For an oveview of the reporting and monitoring processes at project level, please refer to the chart available in chapter III.2.3.4.
III.2.1 The Monitoring Plan
During the start-up phase, a project monitoring plan is set up. The monitoring plan defines the activity and finance reporting and monitoring schedule as agreed between the LP and the MA/JS. It includes the following information:
- Delivery dates of the joint activity and finance reports (see chapter III.2.3.3) as laid down in the subsidy contract
- A set of monitoring milestones (approx. 3-4 per project)
- Delivery dates of selected project outputs and deliverables which will be verified through continuous monitoring (see chapter III.2.3.1)
- Indicative date(s) for project review(s), in which a thorough discussion between the MA/JS and the partnership takes place (see chapter III.2.3.2)
- Start dates of activities and related deliverables affected by indirect State aid
Since the monitoring plan provides a transparent overview on the different reporting and monitoring elements and the respective timeline, it also serves as a management tool for the lead partner towards the partnership. Therefore, the monitoring plan should be discussed with the entire partnership and it should preferably be concluded at the project kick off meeting. The finalisation and acceptance by the JS of the monitoring plan is a pre-condition for the reimbursement of the preparation and contracting lump sum (see chapter III.1.4).
III.2.2 Reporting and Monitoring at Partner Level
Reporting at the partner level takes place through a partner report, i.e. a tool available in Jems that allows to inform on activities performed, deliverables achieved and costs incurred by the concerned partner during a certain period of project implementation. The duration of periods is 6 months (the last period might be shorter or longer). The partner report has two main functions. It allows:
- Project partners (including the LP) to submit activity and financial information to the respective national controller for the verification of expenditure (see chapter III.3.1 in this respect);
- Lead partners to collect and consolidate information from all partners that is needed for reporting to the MA/JS at project level. The partner report is not subject to checks by the MA/JS.
The partner report is therefore a project management tool. The use of the partner report is compulsory.
In the content part of the partner report, the partner reports on activities carried out in the respective period as well as on target groups, deliverables and outputs. Supporting documents can be uploaded in the respective section in Jems.
The financial part of the partner report contains the “list of expenditure” i.e. a table to be filled in by beneficiaries listing all cost items submitted to the national controller for verification. All supporting documents related to the expenditure incurred and claimed by a partner form part of the partner report and are uploaded to the respective cost item in Jems. The national controller will then either confirm or reject (in part or in full) expenditure submitted by the beneficiary for verification. The amount verified and confirmed by the national controller is stated in the “certificate of expenditure” to be included by the LP in the joint finance report (see chapter III.2.3.3).
It is highly recommended that the partners draft their respective partner report throughout the reporting period and not to wait until the end of the period to complete it. This will allow a timely submission to the controller.
The offline template of the partner report is available in the reporting package at the programme website.
III.2.3 Reporting and Monitoring at Project Level
The reporting and monitoring at project level, carried out by the LP, builds on three main elements:
- Continuous reporting and monitoring;
- Project reviews;
- Periodic joint progress reports (joint finance report and joint activity report).
The MA/JS offer continuous support to projects during implementation.
III.2.3.1 Continuous Reporting and Monitoring
The programme strives for an interactive dialogue and a continuous flow of information with projects in order to closely follow the progress of project implementation.
The partnership has to submit to the MA/JS, through Jems, deliverables and outputs as soon as they are finalised according to the timing specified in the approved application form. In addition, minutes of project steering committee meetings should be shared with the MA/JS upon request.
In general, deliverables should be written in English as the programme language as this supports the joint development and exchange within and beyond the project partnership. In case deliverables are deemed to be required in national language, at least a comprehensive summary in English is to be included.
For investments exceeding 25.000 EUR total cost, a dedicated investment fact sheet has to be submitted using the programme template (see programme website) presenting the key features of the investment, location, compliance with the regulatory framework, provisions for its durability, etc.
The reporting of outputs (only for strategies and action plans, pilot actions and solutions) has to be done through output factsheets which follow a pre-defined structure. Information to be provided includes a summary description of the most important output features as well as its sustainability and transferability.
If the target value of a single output in the application form is higher than one, the reporting can be combined in one output factsheet only for the output types of strategies/action plans, and solutions. Each pilot action has to be reported separately in a dedicated output factsheet.
Following the submission of deliverables and outputs, the MA/JS provides feedback to the LP on all outputs and deliverables that are listed in the monitoring plan (see chapter III.2.1). The MA/JS might, however, give feedback also on other outputs and deliverables (i.e. those not included in the monitoring plan) as needed.
The MA/JS might reject submitted deliverables or outputs that are of low quality or do not comply with the application form, requesting the project to solve detected issues.
The verification of remaining outputs and deliverables, for which no feedback was given during the continuous reporting and monitoring, is carried out by the MA/JS at the latest within the monitoring and clarification process for the joint activity report (see chapter III.2.3.3).
The verification of milestones forms an integral part of the continuous reporting and monitoring. Upon the reaching of milestones as defined in the monitoring plan (see chapter III.2.1), the LP has to provide to the MA/JS via Jems the respective milestone documentation (e.g. related outputs, deliverables, meeting/event documentation etc. – depending on the milestone scope) in order to demonstrate its achievement. The MA/JS provides feedback to the LP, which might include requests for clarification as well as recommendations.
If the project experiences deviations (e.g. delays in reaching milestones or availability of outputs/deliverables as defined in the monitoring plan), the LP shall inform the MA/JS as early as possible and provide justifications. In case of major deviations, this might require an update of the monitoring plan and its acceptance by the MA/JS.
At any time, the MA/JS might also monitor project progress and achievement of milestones through:
- Checks of information on the project websites;
- Informal exchanges with the LP to gather additional information and clarifications;
- Participation in project meetings;
- Project visits including on-the-spot-checks.
III.2.3.2 Project Review
Each project shall organise at least one project review in the project lifetime. The aim of project reviews is to perform a “fitness check” at a certain stage of project implementation. Project reviews complement information collected through continuous monitoring and periodic reporting and help to reach a common view on the state of play of project implementation between the partnership and the MA/JS. The review also allows to assess the effective capacity of the project to achieve its objectives and targets as defined in the approved application form, also in light of possible external factors. In project reviews the LP should ensure a close engagement of all project partners in order to discuss the planning of upcoming activities as well as to identify any deviations and modifications, if necessary.
The project review focuses on both strategic and operational aspects of project implementation such as:
- Physical progress towards project objectives as well as financial progress;
- Project management and cooperation intensity (including communication, knowledge management and transfer);
- Sustainability of outputs and results;
- Outlook on upcoming activities of the remaining project implementation period;
- Identification of potential risks or problems, project deviations and delays as well as necessary mitigation measures and project modifications (finance and activity modifications, etc.), if applicable
- Compliance with other obligations as laid out in the subsidy contract.
The indicative timing for the project review is agreed within the monitoring plan (see chapter III.2.1). The project review should preferably take place in the first half of the project duration, after the submission of the first activity report (e.g. in month 15, for a project lasting 36 months).
A second (optional) project review might take place upon request of the partnership or of the MA/JS. Reasons for requesting a second review might be linked to particular challenges or deviations faced by the project.
Whenever possible, project reviews are implemented online, thus minimising costs and time needed. Project reviews might also be attended by one or more National Contact Points with an observer role. Furthermore, in exceptional cases, the MA/JS might involve external experts with relevant thematic expertise to provide specialist support.
The LP and all partners should well in advance prepare for the review. For this purpose, the most recent information on project progress and possible needs for adaptations or modifications should be collected by the partnership in order to allow realistic projections towards the project end. Such information should be provided to the MA/JS in due time prior to the review.
As an outcome of the project review, the MA/JS provides feedback and, if needed, further guidance and recommendations to the partnership for the remaining project lifetime. In addition, follow-up actions may be set in place.
The LP has to prepare a summary of the main points of discussion and the conclusions taken. This summary has to be sent to the JS preferably within two weeks after the review meeting.
The project financial performance is also analysed at a later stage, notably after the end of the financial reporting period following the project mid-term (e.g. at the end of the financial reporting period 4 for a project lasting 36 months). For further information on project financial performance and possible de-commitment of funds, please see chapter III.2.7.
III.2.3.3 Periodic Joint Progress Reports
There are two types of joint progress reports because the Interreg CE Programme disentangles activity from financial reporting in order to reimburse funds as soon as possible. Accordingly, there is one reporting process for finances (joint finance reports are generally submitted every six months) and one for activities (joint activity reports are generally submitted every year).
Joint Finance Report
The joint finance report is created and monitored independently from the joint activity report described further below. The LP is expected to submit a joint finance report after each financial reporting period through Jems. The joint finance report is to be submitted two months after the end of the reporting period, and in case of the last report 3 months after the project end date.
In principle, a financial reporting period covers six months. However, longer or shorter financial reporting periods might be set in place especially at the end of the project. The number of financial reporting periods and the respective deadlines for submission are laid down in the subsidy contract and shown in the “Reporting schedule” section in Jems.
The joint finance report contains information on expenditure paid by the LP and all PPs, which has been verified by the authorised national controller in accordance with chapter III.3.1. The joint finance report consists of the certificates issued by the authorised national controller. Such certificates have to be selected in Jems and included in the joint finance report by the LP. Once this is done, Jems automatically fills in the financial tables of the joint finance report.
The joint finance report also includes a payment request in which the LP confirms, among others, that expenditure reported has been incurred by the partnership for the purpose of implementing the project and that it corresponds to the activities laid down in the latest version of the approved application form.
If the LP has doubts on the project relevance of any expenditure items claimed by a PP, the LP shall clarify the issue with the concerned PP (and the national controller of the PP) with the aim of finding an agreement on the expenditure to be claimed. In the eventuality that such agreement cannot be found, the LP can ask the JS to support. This process may result in a reduction of the eligible amount claimed by the concerned PP in the joint finance report.
When submitting the joint finance report, the LP must upload the following documents through Jems:
- Project payment request signed by the LP. The payment request template is available in the reporting package at the programme website;
- LP verification checklist issued by the project or finance manager of the LP.
Once the LP submits the joint finance report, the JS carries out financial administrative checks and in case of deficiencies, the JS requests the LP to provide clarifications within a given deadline. In case of re-opening of the report in Jems, the LP may enclose additional certified expenditure to the joint finance. However, this is only possible if the related certificate of expenditure is available before the completion of the first clarification round done between the LP and the JS. Any additional verified expenditure for which a certificate is available after the completion of the first clarification round, has to be included in the following joint finance report (with the exception of the last joint finance report).
Since the processing of the joint finance report is separated from the joint activity report, the reimbursement process can be launched rather quickly. However, as outlined in chapter III.3.2, the MA/JS will carry out various ongoing controls to verify the quality of the project implementation as well as the quality of the work done by national controllers. It is the responsibility of the LP to ensure that expenditure presented by all partners corresponds to the activities.
The payment of the last joint finance report is launched upon condition that all certificates of expenditure are included and the last joint activity report is approved by the MA/JS. For further information on the reimbursement of funds please see chapter III.2.4.
Please note that the LP is responsible for reimbursing the ineligible or irregular amounts if the claimed costs do not correspond to the activities (see chapter III.2.6).
Joint Activity Report
The joint activity report contains information on the overall project progresses at work package and activity level, as well as information on outputs and deliverables realised, indicator progress, communication, involvement of target groups, project management, possible problems and deviations. The joint activity report shall be drafted by the LP on the basis of information included in partner reports for the concerned period.
The LP has to submit the joint activity report through Jems after each activity reporting period. For intermediate reports, the deadline for submission is two months after the end of the reporting period, while for the last report the deadline is 3 months after the project end date.
The number of activity reporting periods and respective submission deadlines are defined in the subsidy contract, included in the monitoring plan and also shown in the “Reporting schedule” section in Jems. The duration of an activity reporting period should in principle be 12 months depending however on the overall project duration. For example, a project lasting 36 months should have 3 activity reporting periods of 12 months each. As far as the last period is concerned, longer or shorter activity reporting periods might be set in place.
Information in the joint activity report shall be clear and coherent and it should complement what is provided through continuous reporting and monitoring. The offline template of the joint activity report is available in the reporting package at the programme website.
Following the analysis of the joint activity report, the MA/JS may request the LP to provide clarifications and amend the report within a given deadline. Requested amendments might also concern deliverables and outputs which were not subject of the continuous monitoring or for which clarifications were still pending (see chapter III.2.3.1). The number of clarification rounds and the overall duration of the clarification process are directly linked to the quality (accuracy and completeness) of the submitted report and its annexes.
The first joint activity report will be used, among others, as an input to the “project review” (see chapter III.2.3.2).
III.2.3.4 Project Reporting and Monitoring Overview
The project reporting and monitoring processes at project level are visualised in the following chart.
III.2.4 Reimbursement of Funds
The Interreg CE Programme follows the principle of reimbursement of costs incurred and paid by the beneficiaries. This means that each beneficiary must fully pre-finance its project expenditure. Beneficiaries should bear in mind that the absence of advance payments from the programme, and the time gap between incurring the expenditure and having it reimbursed, may lead to cashflow issues. The MA/JS are strongly committed to reducing the time needed for reimbursement as much as possible. For this reason, among others, the processing of the joint finance report is separate from the joint activity report.
Once the check of the joint finance report has been completed, the JS transfers the request for payment to the MA, which in turn verifies that all contractual clauses and other requirements have been respected. If the checks performed by the MA on the declared expenditure lead to a satisfactory result, the payment procedure for the claimed ERDF amount is launched and a notification on the date on which the transfer of funds to the bank account of the LP has been undertaken is provided to the LP. However, the payment of the last joint finance report is only lauched once all the certificates of the partners are included and the monitoring of the last joint activity report is approved by the JS and MA.
The disbursement of funds by the MA takes place as soon as possible and at the latest 80 days after the date of submission of the payment claim. This payment deadline is interrupted by the MA with every request for clarification sent by the MA/JS to the LP until the answer to the clarification request is sent by the LP. This applies also to clarifications related to the last joint activity report. In addition, the period may be interrupted if an investigation has been initiated by national, programme or EU institutions in relation to a possible irregularity. In such cases the LP is informed in writing about the interruption and the reasons for it.
As stipulated in the subsidy contract, the disbursement of funds to the LP is subject to the condition that the European Commission makes the necessary funds available. Should no funds be available, the LP will be duly notified by the MA/JS.
After receipt of funds from the MA, the LP is obliged to transfer in time and in full the share of ERDF which corresponds to each PP. Unless otherwise agreed by the partnership, no amount shall be deducted or withheld and no specific charge or other charge with equivalent effect shall be levied, which would reduce that amount for the PPs.
The overview of financial flows between the project, the programme and the EC is presented in the chart below.
III.2.5 Conversion into Euro
Financial reporting of a project shall take place in Euro and the programme will reimburse ERDF contributions in Euro.
All beneficiaries located outside the Eurozone shall convert expenditure incurred and paid in national currency into Euro using the monthly accounting exchange rate of the European Commission in the month during which that expenditure was submitted for verification by the concerned beneficiary to its national controller.
The date of submission refers to the day in which the beneficiary submits for the first time to its controller the partner report concerning a certain expenditure. Further submissions of missing documents, clarifications etc. on that expenditure shall not be considered. The date of submission is documented in Jems and the conversion into Euro is automatically carried out by the monitoring system.
III.2.6 Withdrawal and Recovery of Funds
In case the programme bodies, the European Commission, the European Anti-Fraud Office, the European Court of Auditors and, within their responsibility, the auditing bodies of the Member States or other national public auditing bodies discover any unduly paid out funds, or in case the MA is notified of such cases, the MA shall, if necessary, demand from the LP repayment of the subsidy in whole or in part. This is also specified in the subsidy contract.
When the unduly paid out funds concern unlawful State aid, repayment also needs to ensure removal of the undue advantage granted to the partner and restoring of the market to the state before aid was granted. An interest is to be paid for the period over which the partner benefited from the aid.
The LP shall ensure that the concerned PP repays the LP any amounts unduly paid, as provided for in the partnership agreement. The amount to be repaid can be withdrawn from the next payment to the LP or the remaining payments. In case of closed projects, the LP is obliged to repay the unduly paid out funds to the MA.
If the LP does not succeed in securing repayment from the concerned PP, or if the MA does not succeed in securing repayment from the LP, the concerned Member State on whose territory the concerned partner is located (or, in the case of an EGTC, is registered) shall reimburse the MA the amount that was unduly paid to that partner. In turn, the concerned Member State shall be entitled to claim the unduly paid funds from that partner.
III.2.7 Financial Performance and De-Commitment of Funds
Projects not meeting the spending targets set in the latest version of the approved application form may face a de-commitment of funds. This is linked to the need for the programme to respect its financial targets as set in chapter 3 of the IP.
The MC may decide to de-commit funds from projects that, show a low performance. De-committed funds may be further used e.g. for funding additional projects in calls for proposals.
Experience shows that project spending is delayed in the first months of implementation. In light of this, an underspending up to 20% of the spending target set in the application form can be tolerated (if justified) until the end of the first financial reporting period after the project mid-term (e.g. for a project lasting 36 months that is the financial reporting period 4). Any underspending of funds exceeding this threshold may be de-committed by the programme MC on a case-by-case basis.