 |
One of the most difficult parts of the audit process was understanding that every implementing partner had a different way of managing people, salaries, contracts, and financial records.
From the auditors’ perspective, the rules needed to be applied consistently across all partners.
But from the partners’ perspective, each organization operated within its own local system, culture, and practical limitations.
And this is where many misunderstandings began.
Audit Findings for Implementing Partner B
The auditors again emphasized an important principle of the EU grant system:
The grant was designed to support a certain percentage of salaries already paid by the organization — not to create separate additional salaries outside the organization’s normal system.
For Implementing Partner B, the auditors found that all project personnel were permanent staff members of the organization. Because of this, they questioned the validity of several supporting documents, including:
- employment contracts,
- salary records,
- and proof of payment.
One issue raised by the auditors was related to project contracts signed by existing staff members. According to the auditors, service contracts should normally be used for external consultants, not for permanent employees already working inside the organization.
For the third and fourth project years, some contracts also did not clearly mention salary amounts. To the auditors, these documents appeared to have been prepared specifically for the project rather than representing formal employment contracts between the staff and the organization.
Another issue involved salary certifications.
The organization provided salary information for project personnel, but the salary amounts changed significantly from year to year without detailed explanation. This raised additional questions during the audit.
The Partner’s Response
Implementing Partner B explained the situation differently.
They stated that several project personnel did not actually receive salaries from Organization B itself.
For example:
- The Project Coordinator was a vice president, and later president, of the organization. As a member of the central commission, he did not have an employment contract or regular salary from the organization.
- One Capacity Expert worked part-time for the project because of his specialized skills, but he also had no employment contract or salary from Organization B
- Another expert and the project administrator actually worked for Organization C and only supported the project at the request of Organization B.
The organization also explained that salaries were paid in cash because the banking system in their country was still limited.
They described their country as largely a “cash community,” where many people did not even have personal bank accounts. As a result, cash payments were considered normal practice.
Finally, Organization B explained that salary differences between years reflected changes in workload and funding allocations received from the Leading Partner.
Audit Findings for Implementing Partner C
The findings for Implementing Partner C were similar in some areas, but there was one unique issue.
The auditors discovered that 10% of the salaries received by project personnel was contributed back to the organization as a “voluntary pledge.”
In addition, the auditors found a legal statement suggesting that project personnel may have received two salaries:
one from the project and another from the organization.
The Partner’s Response
Organization C responded by explaining that they had already submitted all required documents to the Leading Partner, including:
- employment contracts,
- payment vouchers,
- and proof of salary payments.
They also explained that salaries were paid in cash, which was standard practice in their environment.
Regarding the 10% contribution, the organization strongly emphasized that this was not profit taken from the project.
Instead, it was described as a voluntary internal contribution made by staff members to support organizational activities.
They clarified that this contribution was not included in the salary amounts claimed to the project and insisted that all reported project costs were actual and legitimate.
Audit Findings for Implementing Partner D
For Implementing Partner D, the auditors raised concerns about:
- identical timesheets between two experts,
- salary payments based on budget rather than actual costs,
- and lack of bank transfer evidence.
The auditors also questioned why some timesheets did not contain detailed daily activities.
The Partner’s Response
Organization D explained that from the beginning of the project, the EU had never specifically requested detailed activity descriptions inside the timesheets.
They also explained that the two experts had similar timesheets because they worked together on the same project responsibilities.
Regarding payroll, the organization stated that staff members handled their own taxes and health insurance individually. This had been the organization’s long-standing internal policy.
Finally, Organization D explained that although salaries were budgeted at certain levels, the actual payments made were lower than the approved budget amounts.
No comments:
Post a Comment