Tips on how to prepare for aid inspections

In our experience, it is advisable to map out all conditions and rules of the subsidy programme already during the preparation of the project application and again during the implementation itself. Many mistakes can be avoided by simple preparations and the continuous collection of relevant documents during project implementation. Below are selected key areas we recommend focusing on.

Tender proceedings

When preparing tender documentation, it is advisable to avoid, e.g., references to specific brands and names so as not to disadvantage other suppliers. It is further advisable to specify the required parameters, e.g., stating minimums or maximums, or certain ranges. Assessment criteria should then be set to clarify exactly what will be assessed and in what units. Key is further to always proceed in accordance with the current and effective version of the Rules for the Selection of Suppliers while keeping in mind any possible conflicts of interest.

Accounting treatment and documentation

Do not forget the obligation to account for assets, revenues, and expenses related to the project using special sub-ledger accounts to clearly identify movements of subsidised assets and recognition of supported costs and received subsidies. In practice, we have encountered different approaches but ideally you should add the project's matching tag (e.g., Potential 1) directly into the accounting system so that the subsidised items can be unambiguously marked and selected.

Moreover, invoices and employment contracts of supported employees often lack a project number or variable symbol that would match relevant bank statements.

Request for payment

In financial settlement, different types of expenditures, i.e., capital vs. non-capital expenditures, or machinery vs. construction work, etc, are often confused. We also often encounter cases where non-eligible costs are reported among eligible ones: for example, many investments include an operator training item; this item cannot be included in eligible costs and must be deducted.

The translation of eligible costs from foreign currency and the payment of invoices after the project completion date are other areas where mistakes are often made.

Meeting deadlines for key milestones of the subsidised project is also essential, in particular when reporting changes to the project, most often involving changes in the structure of the acquired fixed assets or the total budget amount, etc. In such cases, it is important to communicate the extent of the changes and the impact on the project in a timely manner through a change request. In general, changes need to be communicated in advance before the set deadlines, which also applies to the formal administration of a change or payment request, etc.

Wages and insurance premiums

For projects with an obligation to complete the Statement of Work - Payroll and Leave Schedule, attention should be paid to the consistency of the reported values with payroll sheets, timesheets, employment contracts, and information approved in the business plan. A common inaccuracy is the listing of gross wages, including bonuses and vacation, or the incorrect recalculation of expenses considering part-time workers.

Complete documentation

During the implementation and sustainability of the project, it is also necessary to remember that the subsidy recipient must be able to provide complete documentation both in the original and up-to-date version directly at the project implementation site; i.e., documents such as employment and lease contracts, contracts for work including amendments, tender documentation, proposals from suppliers, delivery protocols, and other related materials depending on the programme type should be readily available. It is also very important to ensure that the documents in physical form are consistent with the electronic documents that the company has uploaded into the relevant system, e.g., MS2014+, etc. 

The conditions and rules to be followed by subsidy recipients derive not only from the Decision on Granting the Subsidy, including its amendments and annexes, but also from the wording and annexes of the relevant subsidy call, related programme or programme period manuals, and rules for the selection of suppliers, etc. We recommend saving and keeping these documents at your disposal.

If you have an inspection pending or underway and need advice on a specific case or want to find your way around the relevant documents, please do not hesitate to contact us. We will be happy to arrange a mock inspection for you.