Potentially major bookkeeping problems associated with FP7 Eligible Costs
A warning from the Finance Helpdesk:
A major change in FP7 is that it is an explicit requirement for the first time that all charges (direct and indirect) to the project must appear in the organisations book of accounts. It is how they are actually recorded that determines their eligibility. For example if your accounting department automatically records travel as overhead, they are not a direct chargeable cost. As previous years books of accounts will be closed by the end of a specific project and thus unalterable, any such deviations cannot be corrected as was the case in previous Framework Programs.
Its is recommended that you ensure your cost recording system is compliant with these new more stringent rules and perhaps implementing changes so things such as travel can be split depending whether it is classed as a direct cost or not. One also must remember that items can only be recoded once.
The Finance Helpdesk warns that these changes have not been highlighted sufficiently and with the removal of need for most Audit Certificates, such errors may not be picked up until subsequent external audits. Thus organisations may have large future liabilities they are unaware of.