Process description and steps
The general concepts of the Audit Management Services system also apply to the audit process.
Audited organisations (auditee) will have an Audit Contact (AUCO) nominated, who will access AMS and carry out their audit related tasks.
Outsourced audits are carried out by External Auditor Firms (EXAF) appointed by the Commission. The appointed EXAF will access AMS in order carry out their audit related tasks – for more information about the Audit Firm roles, which different roles exist for audit firms and how you assign them please consult AUDIT firm roles.
Roles submitting to the EU
Remember that only the external auditor may submit to the EU. Audit team members may work in all tasks of each one of the steps described below, but cannot finish the tasks where the output is submitted to the EU.
Local auditors have rights only on tasks assigned to them.
If the outsourced audit flow is cancelled, the LEAR and the AUCO of the audited organisation and and the External Audit Firm (EXAF) will be notified about the cancellation of the flow via a Formal Notification containing the Audit Cancellation Letter.
The audit process consists of several phases:
- The audit process is created and the Audit Input file is available in the process documents (Step 1)
- The Commission sends a letter of announcement to the AUCO
- The AUCO uploads the Audit Supporting Documents (ASD) requested in the Letter of Announcement
- The EXAF appointed by the Commission carries out the field work, prepares a Draft Audit Report (DAR) and sends the DAR to the AUCO for observations (contradictory) – this phase is broken down into the following steps:
- The AUCO submits their observations on the DAR to the EXAF
- The EXAF prepares and submits the DAR to the Commission for review (Step 4)
- The EXAF prepares and submits the Final Audit Report (FAR, which corresponds to the final DAR) to the Commission (Step 5)
- The Commission sends the Letter of Conclusion and the FAR to the AUCO
Step 1: The audit process is created and the Audit documents are available
At the start of the process, the Audit Firm receives a PNS informing it that the audit preparation has been launched; click on My audits and select Access Audit under the actions button to access the process.
Then click on View process details.
All documents, documents sent in the context of the current audit process are accessible under Process documents tab.
At this point, the auditee has been notified about the AUDIT and needs to upload the requested annexes, see Outsourced audit - steps for the audited organisations. From the moment all annexes have been submitted, the audit moves to the following step, PAR, and you can proceed with the actions of Step 2.
Step 2: Prepare and submit a Preliminary Audit Report (PAR) to the EU for review
The External auditors receive a PNS (message in the portal, see Notifications in the Portal to know how to access these notifications, and Overview of notifications for more information about this PNS in particular). This notification informs the auditor each time that the Audit Contact of the auditee has uploaded and submitted an audit supporting document. Once the last audit supporting document is uploaded, the Audit Firm receives another PNS informing that the PAR may be uploaded.
To upload the PAR, proceed as follows.
Access the audit
Access the audit via My Audits and click on Actions / Access Audit.
Access the process details
Then click on View Process details.
Access the task details
Click on View tasks details,
Upload the PAR files
In the task details screen, upload all the mandatory documents, and additional documents if applicable, via the Upload button.
Submit the PAR to the EU
Then confirm that you have verified the uploaded documents by ticking the checkbox and click on Submit.
Once you click on Submit, the PAR is transmitted to the EU services for revision and the step turns green in the metro line and there will be no more task associated to it
Once approved, the final PAR will come back to you and you can start with the actions of Step 3, DAR for observations.
The EU could request you to upload a new version of the PAR. In that case, you will receive a PNS like the one you got at the beginning of the process asking you to upload the PAR.
In this scenario, you will find a file containing the comments from the EU about the first submitted PAR. under the Documents tab. Access the audit (My audits / select Access Audit from the Actions button) and then the process (click on View process details). In the process screen download the comments from the EU under the category Request for New PAR.
To upload and submit the new PAR just follow the same steps described above (steps 3-5).
Step 3: DAR for observations
After the authorization of the Preliminary Audit Report (PAR) by the EU, the EXAF receives a PNS to upload the Draft Audit Report (DAR) and start the contradictory procedure with the audited organisation.
Access the Audit (via My Audits and click on Actions / Access Audit) and the process (click on View Process details). In the process screen, go to the Documents tab and find the final PAR and the comments from the EU under Final Preliminary Audit Report (PAR).
To upload and send the DAR for observations, go back to the Overview tab and proceed as follows:
Access the task
Click on View task details.
Upload the documents
Upload the DAR for the auditee and the cover letter via the Upload button, if applicable use the Other Documents category for any other document..
If the auditee appears as linked third party (affiliated entity), the main beneficiary must be informed. In this scenario, you will see an extra action to upload the cover letter for the main beneficiary.
If you need to send the Final PAR back to the EU, the select Send back to the EU under the Select an outcome section, provide a justification for sending it back in the corresponding box, tick the confirmation that you have provided a justification and click on Submit.
When submitted, the DAR will be sent to the auditee, who has 30 days to provide observations to it. If no action is taken by the audited organisation by the deadline, you will receive a PNS notifying you about it.
You will be also notified once the auditee uploads the letter of representation of the audit and any observations. You will find these documents under documents tab.
At this moment, you can decide to either send the DAR back to the audited organisation or move on to the preparation of the final DAR (step 4).
To send the DAR back to the auditee, you will need to upload the files again in the system.
The audit file will be numbered according to the version number of the DAR files submitted to the auditee for observations. Each time that you send the DAR back to the auditee, a different version number will be displayed in the audit file name.
If the 30-day time limit has been reached, you can extend the deadline by typing the number of for extension days in the dedicated box.
Step 4: Prepare and submit the DAR to the EU for review
Once the observations task has been completed by the auditee, you will receive a PNS informing of it and the following step in the process is activated with a new task for you. In this step, you prepare a final DAR consolidated version taking into consideration the observations provided by the auditee.
If necessary, you still have the possibility to request further observations or send it back to the auditee for further clarification.
Please note that this task is divided into two sequences of actions. First you need to decide how to proceed, and then, depending on the decision taken, you will have additional action to complete the task. To complete the task, proceed as follows:
Access the audit and the task details
Access the audit via My Audits and click on Actions / Access Audit. Then click on View Process details. Click on View task details.
Decide on the next step
At this point, download the observations file, if available and take a decision on whether the consolidated DAR can be submitted to the EU or whether further observations / clarifications are needed.
By default, the Proceed to DAR to EU option will be selected under the Select an outcome section. To request further observations, click on Go Back to the Audited organisation instead.
Then, tick the confirmation and click on Submit to confirm your decision.
Be aware than after clicking on Submit you cannot change the decision if you are sending it back for more observations, and you will have to wait for the DAR to be sent back from the auditee. When you select to proceed to submit a consolidated DAR to the EU, you will have still the opportunity to send it back for observations again, if you wish to do so.
If you send the DAR for more observations
When you send the DAR for more observations, the current DAR step in the metroline will be grayed out and a new task will appear under DAR For Observations. Click on View task details to access the task.
Proceed to upload the DAR and Cover letter via the Upload button. A new version of both must be uploaded. The actions are as described on Step 3: DAR for observations; the only different is that you will have an extra field where you need to enter the additional days you allow for the task to be completed.
Then, tick the confirmation and click on Submit. At this point the DAR will be sent back to the auditee and you will be notified when the new observations are provided, or when the new further time allowed for observations passes and the task auto-complete.
If you send the DAR to the EU
After clicking on Submit, a new task appears. Click on View task details.
Upload the consolidated DAR via the Upload button.
Tick the confirmation that you have verified the uploaded file and click on Submit.
If you wish to send it back for further observation you still can. Select Back for observations under the Select an outcome section, tick the confirmation and click on Submit. Then follow steps described in the previous step above.
Step 5: Prepares and submit the Final Audit Report (FAR) to the EU
After the authorisation of the Draft Audit Report (DAR) by the EU, the EXAF receives a PNS to upload the Final Audit Report (FAR).
Also, if the EU requests the EXAF to review the DAR, a PNS will be received asking to review the submitted DAR, and you need to proceed as described in Step 4: The EXAF prepares and submits the DAR to the EU for review.
Access the audit and the task details
Access the audit via My Audits and click on Actions / Access Audit. Then click on View Process details. The files for the Final Draft Audit report will be available under the Documents tab, including the file with comments from the EU. Click on Download to access the documents.
Click on View task details.
Upload the Final Audit Report (FAR)
Upload the FAR via the Upload button.
Submit the FAR to the EU
Tick the confirmation that you have verified the document and click on Submit.
At this point the process ends for the EXAF intervention for this audit. When the EU finalises the audit, a letter of conclusion will be sent to the auditee, containing the FAR, and the process will reach the Closed step and be archived.
