Audit costs

Under H2020, financial audits are eligible costs under the category "Other direct costs". This category includes the purchase of goods, works, or services, which is not the same thing as subcontracting. 

Article 6 of the Model Grant Agreement (MGA) defines what costs are eligible. There are six different cost cagetories, but not all apply to every project. Category D concerns "other direct costs". These include, among other things, the "cost of other goods and services" (category D.3.). Performing a financial audit is included in this category. 

Subcontracting, in turn, concerns the implementation of certain action tasks described in Annex 1. They must be identified in Annex 1 as an action task. Otherwise, costs for subcontracts are not eligible. However, the identity of the subcontractors does not need to be indicated if it is not known at the proposal stage. 

The below table summarizes the difference between Article 10 “contracts to purchase goods, works, or services” and Article 13 “Subcontracts” (source: Annotated MGA, p.97)

Article 10 - Contracts to purchase goods, works, or services
 
Article 13 - Subcontracts
 

These contracts do not cover the implementation of action tasks, but they are necessary to implement action tasks by beneficiaries

 

Subcontracts concern the implementation of action tasks; they imply the implemenation of specific tasks which are part of the action and are described in Annex 1. 

 

They do not have to be indicated in Annex 1.

 

They must be indicated in Annex 1.

 

The price for these contracts will be declared as "other direct costs" - column D in Annex 2 - in the financial statement; they will be taken into account for the application of the flat-rate for indirect costs. 

 

The price for the subcontracts will be declared as "direct costs of subcontracting" - column B in Annex 2 - in the financial statement, they will not be taken into account for the application of the flat-rate for indirect costs.