If your project is directly funded by the European Commission (Horizon Europe, LIFE, Erasmus+, CEF) and the EU contribution to your institution exceeds €430,000 – you are required to submit a CFS certificate before filing the final payment request. The CFS can only be issued by an independent external auditor.
What is the CFS certificate?
The Certificate on the Financial Statements (CFS) is a document issued by an independent external auditor certifying that the costs declared by a beneficiary under a project funded by the European Commission are:
- actually incurred,
- properly recorded in accordance with the beneficiary's accounting policies,
- eligible under the terms of the Grant Agreement and the programme rules.
The CFS is not an audit opinion on the financial statements. It is an attestation engagement – the auditor performs specific verification procedures and reports the findings, without issuing a general assessment of the beneficiary's financial reporting as a whole. The methodological basis is standard ISRS 4400 (agreed-upon procedures), and the scope of those procedures is prescribed by the European Commission in Annex 7 to the Grant Agreement.
When is the CFS required?
The obligation to submit a CFS derives directly from the Grant Agreement – specifically from Article 25 and Annex 7. The condition is single and precise:
| Condition | Detail |
|---|---|
| EU contribution per beneficiary | > €430,000 (ERC: > €325,000) |
| Excluding lump-sum costs | flat-rate/lump-sum amounts do not count towards the threshold |
| Per beneficiary | not per consortium |
| When to submit | attachment to the final payment request |
When to submit the CFS
The CFS is required as an attachment to the Final Payment Request submitted in the EU Funding & Tenders portal. The European Commission may withhold the final payment until a valid certificate is delivered.
In practice, this means the CFS audit should be planned at least 4–6 weeks before the intended submission of the final payment request. The auditor needs time to collect documents, perform procedures and prepare the report.
CFS vs structural fund audit – the key difference
This distinction is fundamental, yet in practice often overlooked. The CFS and an audit of structural fund projects are two separate services – they differ in legal basis, standard, scope and report format.
| Feature | CFS Certificate | Structural fund audit |
|---|---|---|
| Legal basis | Grant Agreement with the European Commission | Agreement with a national intermediary body |
| Programmes | Horizon Europe, LIFE, Erasmus+, CEF | FENG, FEiR, NCBiR, NFOŚiGW, KPO |
| Threshold | > €430,000 EU contribution per beneficiary | Programme-dependent – often > €750,000 |
| Audit standard | ISRS 4400 – scope prescribed by the EC | National guidelines / ISAE 3000 |
| Report format | EC official form from Annex 7 of the Grant Agreement | In accordance with the national body's requirements |
| Internal auditor | Not permitted | Not permitted |
A beneficiary may simultaneously run a Horizon Europe project (requiring a CFS) and an NCBiR project (requiring a structural fund audit). These are two separate engagements for the auditor – with separate documents and separate reports.
What does the auditor verify in the CFS?
The scope of CFS procedures is strictly defined by the European Commission in Annex 7 of the Grant Agreement. The auditor has no discretion in its interpretation – they apply exactly those procedures listed there. These cover verification of:
- Actual incurrence of costs – invoices, contracts, payment evidence, bank statements.
- Proper recording – costs recorded in the books in accordance with the beneficiary's accounting policies.
- Eligibility of expenditure – compliance with programme rules and Grant Agreement conditions.
- Personnel costs – hourly rate methodology, time-sheets, employment contracts and salaries.
- Indirect costs – correctness of the allocation method applied (actual costs or 25% flat rate).
- Subcontracting – documentation, invoices, absence of conflicts of interest, compliance with Grant Agreement.
- Project revenues and own contribution – proper recognition and accounting.
- Absence of double funding – verification that the same costs have not been declared in another public project.
How to prepare for a CFS audit?
Good preparation shortens the audit duration and minimises the risk of findings. Below is a list of documents and actions to have ready before the auditor starts work.
Beneficiary pre-CFS checklist
- Grant Agreement and all annexes (including Annex 2 – project description and budget)
- Statement of costs incurred (financial statement) broken down by budget category
- Invoices and contracts with suppliers and subcontractors
- Payment evidence (bank statements or transfer confirmations)
- HR documents: employment contracts, appointment letters, salary confirmations
- Time-sheets for the entire project period (for each employee involved in the project)
- Hourly rate calculation methodology (Personnel cost methodology)
- Accounting policy applicable to the institution
- Dedicated analytical cost records for the project
- Procurement documentation (requests for quotation, offers, supplier selection)
- Funding award decisions or amendments
Engagement process for a CFS
A standard CFS audit proceeds in four stages and takes 1–3 weeks from receipt of complete documentation.
| Stage | Timing | What happens |
|---|---|---|
| 1. Grant Agreement review | Day 1–2 | Review of the agreement, Annex 7 and programme-specific requirements. Issue of the document request list. |
| 2. Cost verification | Week 1–2 | Review of source documentation: invoices, time-sheets, analytical records, indirect cost methodology. |
| 3. Findings and corrections | Week 2–3 | Discussion of findings. In many cases documentation can be supplemented or calculations corrected before the final report. |
| 4. CFS report | Week 2–3 | Completed certificate in the official EC form with the cost table – ready for submission in the EU Funding & Tenders portal. |
When payment deadlines are tight, a priority schedule can be agreed. The prerequisite is delivery of complete documentation from the first day of engagement.
Want to discuss the CFS for your project?
Book a short consultation with a certified auditor – I will check the requirements of your Grant Agreement and provide a scope and cost estimate within 24 hours.
FAQ – CFS Certificate
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