Programme closure requirements

who ‘owns’ each of the project outputs in the sense of which partners will be responsible for maintaining and updating them.

Secondly, any revenues (money paid to project partners relating to services or products developed during the project) generated within ** years of the end of the project must be reported and the amount repaid to the programme. There are also rules preventing change of ownership or substantial changes of use to avoid abuses of this rule.

Tip: Check programme rules on copyright etc. Make sure that all partners are aware of the rules on documentation, revenues and ownership after project closure.

7.1 Programme closure requirements

A recent INTERACT Study on INTERREG III Programme and Project Closure includes an overview of the main problems related to project closure and final reporting based on interviews with project Lead Partners:

57,9% found it difficult to respect the strict deadlines established by programme bodies for submitting closure documents,

47,4% considered coordination between project partners as a real problem in this phase,

31,6% underlined the complexity and lack of clarity about documents and information required in this phase by the programme bodies,

15,8% encountered problems while dealing with the final project audits, 5,3% didn’t have any problems.

The following sections will provide you with information and useful tips in order to prepare and complete the final reporting tasks smoothly and meet programme closure requirements.

Time and resource planning for the closure stage

Project managers should be aware of the risks involved in collecting information for the final report: As activities have finished, partner organisations may already be losing interest in the project and moving on to new activities. Some key staff may already have left the organisation. It is therefore very important that the process of accumulating the necessary information starts in good time. This is particularly true when partners have only been involved in earlier stages of the project – they may already have received full payment for their activities and it can be very hard to get them to put in the time required for final reporting.

You may even want to set up project closure as a separate work package and allocate resources here to all partners .

Steps to project closure

Accumulation of project records. The initial step in closing a Territorial Cooperation project is the accumulation of all official project records. These records include all accounts, papers, photographs or other documentary materials made or received by the project partnership in connection with the implementation of the project (i.e. the evidence needed for the audit trail).

These records are generally kept by the partner responsible for each activity.

Preparation of project final reports. In order to receive the final payment, projects need to submit final reports. The content of these reports varies considerably – sometimes they are little more than an activity report for the final months of the project. In other cases they are a

7. Project closure

separate document asking the project to analyse and evaluate all of its activities. Project managers should find out programme requirements for the final report as soon as possible after the start of the project as this may help greatly in making sure that the right data is monitored during the project’s lifetime. In general, programmes tend to ask their projects for a lot of information in final reports: They prefer to get more rather than less information to be sure they have what they need in future.

A final report is divided into the activity and financial sections. In general, the activity report will include:

Executive summary. This is often also used for publicity purposes and should promote the project’s achievements.

Results obtained in relation to the targets for these in the approved application. These will be used to assess achievement.

How the project results will be disseminated and activities followed up

Partnership evaluation. Programmes may use the project closure phase as an opportunity to ask Lead Partners for the overall evaluation of the partnership, how it worked, what kind of problems were experienced and what solutions were proposed. Programmes should also ask projects to assess programme performance.

The finance section of the final report includes is based around the certification of all project expenditure. Financial progress reports are generally only concerned with expenditure during the reporting period but the final financial report must include certified statements from all project partners not just of individual items of expenditure but also of the overall use of the funds granted in obtaining project goals. The controllers here certify all expenditure for the whole project thereby declaring that all claimed expenditure is correct. Controllers should also describe the first level controls carried out for each partner with their findings and conclusions, sum up the extent to which the project has been carried out in accordance with the approved application, subsidy contract and any other conditions. Controllers must also confirm that all control issues have been satisfactorily resolved. The final signed controller’s statement should therefore serve as a declaration that it is safe to close the project.

What programmes are looking for in the final report

While progress reporting focuses on activities, the focus at project closure is on end-goals.

Project managers will need to demonstrate the results and impacts achieved in comparison to the targets proposed in the application. Attention therefore needs to be paid to indicators and the completion of all work packages as well as satisfactory final reporting by all partners on the activities they have carried out. Activity checks are generally stricter in order to ensure that the project has delivered all outputs and that there is a reasonable probability that expected results and impacts will be achieved.

Sometimes of course it is not possible to achieve all of the targets set at the start of the project. Activities may not produce the intended results or the original targets may have been unrealistic. This kind of problem needs to be included in activity reports as soon as it is detected along with clear evidence that the project has learnt from the failure and taken action to ensure that overall objectives will not be affected. Programmes will generally react harshly if serious under-performance is only announced at the end of the project.

Programmes will also monitor carefully whether the project has implemented all activities in the application or has carried out activities not included in the application. In many cases this leads automatically to a cut in the ERDF grant if changes have been made but never discussed and agreed with the programme. The total paid to the project can never exceed the initial grant.

Project Management Handbook

In financial terms, programmes need confirmation that it is safe to pay out the last part of the grant and that no problems are expected in future. While projects are in the main implementation phase, programmes can afford to be somewhat flexible in terms of financial control findings. If there are problems, deductions can be made from later payments and expenditure affected by open questions can be left out until a later date. Project closure means, however, that no questions can be left open: All problems need to be finally resolved.

This is perhaps the main challenge of project closure though the checks carried out differ little from financial checks at earlier stages. If financial management in the project has been good, the closure check should be a formality that just confirms the findings of other first level control checks.

When does all project work need to stop?

The date for closing the project will have been set in the contract based on the information provided in the application. Project managers need to find out exactly what this date means however. In some programmes all activities including final reporting must be completed by the stated end date. In other programmes the end date is the point at which all main activities must be completed. An additional period of two or three months is provided for writing the final report and the doing final control of the project.

Tip: Check programme rules on activities and costs that may be included after the formal end date of the project.

How long does it take to get the last money?

Another issue that projects should be aware of is that programmes generally withhold payment of a portion of the project budget (typically 5%) until all project closure procedures have been completed. This means that even at this stage most irregularities can be resolved by simply deducting the amount concerned from the payment to the project. Some programmes go further and retain up to 20% in order to ensure that they are withholding sufficient funds to deal with this type of problem. In addition to providing insurance against irregularities, the 5% retention also gives programmes leverage to ensure that projects submit final reports in good time.

Tip: Find out the programme rules for final project payments and the impact this will have on different partners.

The Commission uses the same procedure for the programmes. Projects that close near the end of the programme should be aware of this: There is a strong chance that the programmes themselves will not have the funds to make the last payments to projects until they have received the final 5% payment from the Commission. If your project is one of the last to close you may therefore be waiting for the final payment for two years or more.

Tip: If your project is due to close near the end of the programme make sure that all partners have sufficient funds to wait for the final payment.

What obligations are there after project closure?

One other important issue is to be clear about the meaning of closure: It is a closure of the project’s grant to the programme but does not represent the end of project requirements.

Even though the programme has accepted the final report and made the final payment, the project is still subject to second level control and checks by Commission auditors and the Court of Auditors. All project records and documentation therefore need to be retained and stored until three years after the formal closure of the programme (in theory this could mean until 2013) and some national rules have even longer timeframes. If these later audits discover problems or missing parts of the audit trail, errors will be corrected by initiating a

7. Project closure

recovery and taking money back from project partner organisations. One important risk needs to be assessed here: The staff who could explain project actions have usually left the organisation long before later control visits take place. Project closure records (the audit trail and final report) should therefore be good enough to allow new staff to provide these explanations.