Horizon Europe audits explained & what universities need to know
14/08/2026
Australia and New Zealand’s association with Horizon Europe is expected to create significant new opportunities for universities and research institutions to access European research funding.
Horizon Europe works on a 7-year cycle. Framework Program 9 (FP9) is the current version, running from 2021-2027. As institutions either conclude FP9 or look to begin participating in Horizon Europe projects, many will encounter European Commission financial reporting and audit requirements that differ from the Australian grant compliance frameworks they are familiar with.
Independent audits can play an important role in demonstrating that project expenditure has been properly managed, appropriately documented, and claimed in accordance with grant requirements. Early preparation can help universities reduce compliance risk, avoid financial corrections, strengthen governance, and approach project reporting with confidence.
Horizon Europe audit quick facts
| Item | Requirement |
|---|---|
| Audit requirement | Certificate on the Financial Statements (CFS) |
| When required | Generally where EU funding claimed by a beneficiary or affiliated entity reaches €430,000 or more |
| Who performs the audit | An independent qualified auditor |
| When submitted | Typically with the project’s final financial report |
| What is reviewed | Personnel costs, time recording, procurement, subcontracting, travel, and supporting documentation |
| Are audit costs eligible? | Generally yes, subject to grant requirements |
| Who should be involved? | Research Finance, Research Office, Payroll, Procurement, and Project Management teams |
Will my university need a Horizon Europe audit?
For some Horizon Europe projects, beneficiaries are required to obtain a Certificate on the Financial Statements (CFS).
Under the general Horizon Europe requirements, a CFS is required where the total European Union contribution claimed by an individual beneficiary or affiliated entity reaches or exceeds €430,000 over the life of the project. The threshold is assessed separately for each beneficiary or affiliated entity and not at the overall consortium level. A mandatory CFS is generally submitted once at the end of the project as part of the final reporting process. The cost of a mandatory CFS is generally eligible for reimbursement under the grant, subject to the applicable grant requirements.
As university participation in Horizon Europe grows, particularly following Australia’s association arrangements, many universities may find themselves exceeding this threshold for the first time.
What does a Horizon Europe audit involve?
A Horizon Europe audit examines the financial information submitted by a beneficiary in support of grant claims.
Depending on the nature of the project, the auditor may review:
- costs claimed against the grant
- personnel costs and payroll information
- time recording methodologies and supporting records
- subcontracting arrangements
- travel and other project expenditure
- supporting documentation
- internal controls and governance processes
- compliance with applicable Horizon Europe requirements
- procurement activities.
The audit focuses on whether costs have been correctly calculated, recorded in the beneficiary’s accounting records, and supported by appropriate evidence. The auditor reports their findings through the prescribed European Commission framework, while the European Commission ultimately determines cost eligibility and any financial corrections.
Why audit readiness matters
While a mandatory CFS is generally only required at the end of a project, the supporting evidence required for the audit must be generated and retained throughout the project lifecycle.
Universities that wait until final reporting often discover gaps in documentation that can be difficult, costly, or impossible to rectify years after expenditure has been incurred.
Early preparation helps institutions:
- protect valuable research funding
- identify potentially ineligible costs before submission
- strengthen time-recording and personnel cost documentation
- reduce the risk of funding clawbacks or financial corrections
- demonstrate sound governance and financial oversight
- establish repeatable processes for future Horizon Europe projects.
Audit readiness should therefore commence at project establishment rather than when a project approaches completion.
Preparing for a new compliance environment
Horizon Europe compliance is rarely the responsibility of one team. Research Offices, Finance teams, Procurement personnel, Payroll teams, Principal Investigators, and Project Managers may all contribute information that supports project expenditure claims.
Institutions should consider:
- reviewing the financial requirements contained in each grant agreement
- determining early whether a CFS is likely to be required
- assigning clear ownership for compliance activities
- mapping Horizon Europe cost categories to internal finance systems
- documenting personnel cost and time-recording methodologies
- implementing appropriate procurement and subcontracting controls
- maintaining a central repository of audit evidence
- performing periodic project reconciliations and internal compliance reviews
- budgeting for the cost and timing of independent audit requirements.
Universities that establish these disciplines from project commencement are generally better positioned to navigate both project reporting requirements and independent audit procedures.
Why this matters for universities
Many universities already manage complex assurance requirements associated with government research funding, international grants, and regulatory reporting obligations.
However, Horizon Europe introduces a distinct set of European financial compliance requirements that may be unfamiliar to research and finance teams.
As participation in Horizon Europe expands and funding levels increase, universities are likely to experience greater scrutiny over cost eligibility, documentation, personnel costs, and supporting evidence. Building capability now can help institutions scale their participation in future European research programs while protecting valuable funding outcomes.
How SW can help
SW supports universities, research institutions, and complex grant-funded organisations across Australia with assurance, compliance, and governance requirements.
Our support can include:
- audit readiness assessments for Horizon Europe
- compliance reviews and gap analyses
- review of financial systems, controls, and documentation
- guidance on eligible cost requirements
- review of personnel costs and time-recording arrangements
- procurement and subcontracting compliance reviews
- independent Horizon Europe audits and CFS engagements
- training for Research Office, Finance, and Project teams
- ongoing compliance and reporting support throughout the project lifecycle.
SW already supports universities, research institutions, and complex grant-funded organisations across Australia. Our practical experience, combined with a strong understanding of Australian and EU compliance frameworks, enables us to help you align your grant management practices with Horizon Europe requirements and ensure your projects are audit-ready from day one.
Contributors
Matthew Paull | Associate Director, Assurance and Advisory Services
