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

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:

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

The post Horizon Europe audits explained & what universities need to know appeared first on SW Accountants & Advisors.

That combination of large funding at stake, personal VC certification, and specifications that change every year is exactly why HERDC deserves the same governance and control discipline as any other significant regulatory submission. And as research funding increasingly flows across borders, from Europe and the United States as well as Canberra, universities now face not one assurance obligation, but three.

Why the risk is rising

HERDC data is pulled together from Research Offices, Finance, Faculties, and Shared Services, drawing on multiple systems and interpretations of what counts as eligible R&D income. The specifications are updated annually, usually released in draft each December and confirmed the following February, so last year’s approach is rarely a safe guide to this year’s return.

The risks we see most often are:

• misclassification of income across the four HERDC categories
• inconsistent interpretation of eligibility, particularly around shared income, affiliates, and subsidiaries, an area the specifications have repeatedly clarified
• thin supporting evidence for income included in the return, reinforcing the principle that the contract is king, if it does not read as research, it is not
• manual, key-person dependent extraction and reconciliation processes
• limited executive visibility of where the real reporting risks sit.

Left unchecked, these translate directly into funding adjustments, audit findings, regulator challenges, and reputational exposure.

Our view

Leading universities now treat HERDC as a high-risk external reporting process, not simply a funding exercise. Management should be able to demonstrate clear accountability for HERDC decisions, consistent application of the specifications, effective controls over data integrity, robust audit trails behind eligibility calls, and genuine independent challenge before the Vice-Chancellor signs.

Independent assurance is what allows executive teams and Boards to say, with evidence, that reported research income is accurate, compliant, and defensible.

Three funding streams, three different assurance obligations

This is where universities often need help separating the mandatory audit from the broader assurance they may want, and where SW can support the full research funding picture. As research partnerships globalise, more institutions now carry all three of the obligations below at once.

HERDC audit — the mandatory compliance audit (Australian funding)

Every provider must obtain a Special Purpose Audit Report under ASA 800 certifying that Category 1–4 R&D income in the return is correct, attributed to genuine R&D and to the right category, and identified by transparent transactions. The report is due to the department by 30 June each year. SW audits HERDC for clients including Deakin University, La Trobe University, Swinburne University, and Victoria University, and also runs pre-submission preparation and staff training workshops to lift return quality before the audit even starts.

Horizon audits — certifying EU-funded research spend (European funding)

Where a university draws funding from the EU’s Horizon Europe (or legacy Horizon 2020) programme, a Certificate on the Financial Statements (CFS) becomes mandatory once the EU contribution to a single beneficiary reaches €430,000.

This is a different animal to HERDC as it certifies that declared costs are real, eligible, and properly supported, delivered as an agreed-upon-procedures engagement (ISRS 4400) rather than an ASA 800 income audit, and without it, the European Commission can withhold the final payment. With Australia’s association to Horizon Europe concluded in 2026 and direct Pillar II funding flowing from January 2027, far more Australian universities will soon cross the CFS threshold.

Uniform Guidance audits — acquitting US federal research dollars (United States funding)

Australian universities are significant recipients of US Government research funding, grants from agencies such as the NIH, the Department of Defense and the National Science Foundation, received directly or as pass-through funding.

Any institution that expends US$1m or more of these federal awards in a year must obtain a Single Audit under the US Office of Management and Budget’s Uniform Guidance (2 CFR Part 200, Subpart F) a threshold recently lifted from US$750,000. Unlike HERDC, this applies an unfamiliar US framework — US GAAP reporting, cost-eligibility, and internal-control testing under US auditing standards — to funds administered a long way from Washington.

SW is the Uniform Guidance auditor for leading universities across Australia and New Zealand, delivering each engagement locally, while leveraging the extensive expertise, methodologies, and practice aids of our US partner firm, which conducts more than 100 Uniform Guidance audits internationally each year.

In short, HERDC assures research income for Australian block-grant funding. A Horizon CFS assures research expenditure for EU grant funding, and a Uniform Guidance Single Audit assures research expenditure for US federal funding. Universities with strong international research partnerships increasingly need all three.

The Horizon market is about to open & universities will need help

Until now, Horizon audits have been a niche requirement for the handful of Australian universities drawing EU research funding under third-country rules, where entities typically had to self-fund their participation. That’s changing fast, and it changes the size of the opportunity.

In June 2026, the EU and Australia concluded negotiations on Australia’s association to Horizon Europe — the EU’s €93.5bn (≈A$155bn) research and innovation programme. Australia will associate to Pillar II, worth more than €53.5bn, covering digital and industry, space, climate and energy, health, food, and the bioeconomy, priorities that map directly onto Australia’s own National Science and Research Priorities. From January 2027, under a transitional arrangement, Australian universities move from third-country status to being treated as eligible entities from an associated country, meaning direct, routine EU funding on the same terms as EU member states, including the ability to lead consortia.

The signal is already there. Australian organisations have taken part in 239 Horizon Europe projects to date, with a 24.39% application success rate, close to one in four. The Group of Eight has stepped in to fund the association fee, and universities from Sydney to Melbourne have publicly welcomed the move. As direct funding flows from 2027, the number of Australian institutions crossing the €430,000 CFS threshold, the point at which an independent Certificate on the Financial Statements becomes mandatory before the EU releases final payment will grow materially.

What this means for universities

More EU funding is unambiguously good news, but it brings an assurance obligation many Australian research offices have not had to manage at scale before. A CFS is not a HERDC audit and not a standard financial statement opinion, it’s an agreed-upon-procedures engagement against the European Commission’s prescribed template, certifying that declared costs are actually incurred, properly recorded, and eligible under the grant agreement. Get the documentation wrong and final payment can be withheld or clawed back.

How SW can help with the Horizon opportunity

SW can help universities:

• get ahead of the threshold — flag likely CFS obligations early in a project’s life and budget for them (the audit cost is itself an eligible, reimbursable project cost), so certification isn’t a scramble at final reporting
• build cost-eligibility discipline up front — align time recording, cost allocation, and documentation to EU grant agreement rules from day one, rather than reconstructing evidence years later
• deliver the CFS itself — independent, APES 110–compliant certification against the Commission’s template, drawing on our existing Horizon and Uniform Guidance experience
• join the dots across research funding — few advisors can sit across HERDC, US Uniform Guidance, and EU Horizon assurance under one roof. We already do, which lets research-finance teams consolidate their external assurance with a single sector specialist.

The universities that plan for this now, ahead of the 2027 funding switch, will avoid the late-stage documentation problems that catch first-time EU grant recipients. That’s the conversation we should be starting with our Research Office and Research Finance contacts today, on the back of the HERDC relationships we already hold.

How we help with HERDC assurance

Our independent HERDC assurance review sits alongside, not instead of, the mandatory audit, and covers:

• governance and oversight — accountability, executive and committee oversight, certification process, and escalation
• compliance — alignment to current specifications, eligibility methodology, consistent categorisation, and supporting documentation
• controls and process — end-to-end reporting, review and approval, reconciliations, and audit readiness
• data integrity — source-to-submission traceability, data quality, manual adjustments, and the reliability of management reporting.

Why SW

We know research funding assurance because we live in this sector. Our dedicated Education Industry Group has more than 50 years’ experience and has worked with 35 of Australia’s major universities.

• Laura Toscano, Director — 17 years in internal audit, risk, and compliance, leading HERDC audits across Deakin University, Swinburne University, La Trobe University, and Victoria University. Laura is a 2026 finalist in the Women in Banking & Finance awards for Risk, Regulation & Compliance and is an APRA-approved independent expert on governance and risk remediation, the exact skill set HERDC governance assurance calls for.
• Matt Paull, Associate Director — 15 years specialising in education audit, with HERDC audits for Deakin University, La Trobe University, Victoria University, and Swinburne University, as well as HERDC preparation support and staff training workshops. Matthew also manages Uniform Guidance audits across Australia and New Zealand.
• Brent Sheers, Partner — Assurance & Advisory — 12+ years delivering external audit, assurance, and financial due diligence across the listed, education, and not-for-profit sectors, and the SW Engagement Partner on our Uniform Guidance and European Horizon audits for universities. A Registered Company Auditor with both ASIC and Fairwork, Brent also sits on the Board and Finance & Audit Committee as an independent director of both a Melbourne based disability services organisation and independent girl’s school, giving him a first-hand read on exactly what Boards and audit committees expect from their auditor.
• Steve Allan, Partner — 30 years advising the sector and National Chair of our Education Focus Group, providing commercial, tax, and structuring advice to more than 30 Australian universities. Steve’s deep relationships across research and finance leadership open the door for the assurance conversation.

We also stay close to the sector’s own forums, presenting HERDC and technical updates through ARMS, AUSFOG, and university CFO and tax manager networks, so our advice reflects where the specifications and the sector are actually heading, not just where they’ve been.

Contributors

Matthew Paull | Associate Director, Assurance and Advisory Services

The post Research income & research funding assurance appeared first on SW Accountants & Advisors.

The Emerging Developers Series is a four-part program of interactive seminars for an intimate group of up and coming property professionals. It is designed to walk you through the property development process from start to finish.

You will have access to leading industry experts, and to learn from their strategic insight into property development and key developer issues from tax structuring to design and construction.

Event details

Date: 4 sessions hosted on a monthly basis starting Monday, 13 May 2019
Time: 3pm – 5:30pm (afternoon tea provided)
Venue: ShineWing Australia, Level 10, 530 Collins Street, Melbourne
Format: Interactive class-room style format where our expert guest speakers will share their insight and expertise on a key component of the property development process.
Cost:  $800 per person for the series or group booking for up to 3 people for $1,600 (prices exclude GST)

This includes:

• Four 2-hour sessions and networking opportunities with speakers and attendees
• Soft and hard copies of speaker presentations and handouts
• Automatic inclusion to our Emerging Developer’s Series Program, including invitations to future networking events
• Invitations to ShineWing Australia’s annual Property Update event which brings together Australia’s leading property professionals

Speakers

	Daren McDonald, Partner, ShineWing Australia Dare is a leading accounting, commercial and taxation advisor to property developers in Australia. With 25 years’ experience in financial and strategic consulting to property developers on significant joint ventures.
	Brihony Boan, Partner, Gadens Brihony Boan is a Partner in the Property, Construction and Planning Team at Gadens in Melbourne, focusing on property development and distressed property sales.
	Luke O’Grady, Director/Owner, INPG Luke O’Grady is a Director and Co-Owner of Incollaboration Projects Pty Ltd. With over 15 years in the industry, Luke has a vast experience with all facets of the residential development industry including medium and high density residential apartments, townhouse projects or land subdivision.
	Christina McRae, Director, Urbis Christina is a Director at Urbis in Melbourne where she advises public and private sector clients on land use and development strategies and navigating the planning system. Multi residential, retail, mixed use and major project management are some of her key areas of practice.
	Sam Nathan, Director, Colliers International Sam has engaged closely with the premium apartment market for over 15 years, initially as a qualified valuer and then as a lead advisor to major domestic and international developers, investors, consultants and financiers, having had significant advisory roles on some of Melbourne’s most complex and renowned residential developments.
	Tom Renda, Director,  Thomas Capital and Advisory Tom has 32 years of banking experience, having held front line roles as State General Manager and National Industry Leader in Institutional Banking, Corporate and Business Banking at CBA, NAB and CBA. Tom has extensive experience across all aspects of banking and is now assisting clients in sourcing finance through bank and non-bank lenders.
	Andrew Deveson, Director, Kapitol Group  Andrew has over 15 years of vast experience in construction, with specialised expertise in active education environments, commercial offices and large-scale residential buildings throughout Melbourne. As a director of Kapitol Group, Andrew is responsible for the management of projects and works in close collaboration with all stakeholders from concept through to completion.
	Brendan Young, Associate, RLB  Brendan is a highly skilled and qualified construction professional who brings competence and enthusiasm to his role at RLB. For his twelve years at RLB, he has demonstrated comprehensive understanding of all key disciplines, providing him strong grounding for producing quality Quantity Surveying services to clients.
	Arif Uzay, Director, RLB Arif demonstrates a comprehensive understanding of all areas of quantity surveying, financial and cost management, specialising in conceptual estimating, cost planning and project procurement. He has considerable experience providing services for both the Government and the private sector on a broad range of construction projects and industries which predominantly include retail, residential and commercial sectors.
	Matthew Gibb, Managing Director, Gibb Group Matthew has in excess of 20 years’ experience in the industry and 15 years in senior positions in commercial and industrial property both in Australia and overseas including that of COO. Matthew’s wealth of knowledge is second to none in the commercial industrial sector.
	Matthew Malseed, Managing Director, Hamton Matt is the Managing Director and joint owner of Hamton Property Group. Upon its establishment in the early 2000’s and prior to becoming a joint owner of Hamton, Matt was a key senior executive in the business.He has been a regular guest lecturer for undergraduate and post graduate courses in property at the University of Melbourne and RMIT and has a strong interest in mentoring young people in the property development industry.
	Sejla Kadric, Associate Director, Blake Rodgers, Senior Managers, ShineWing Australia Sejla and Blake both have more than 11 years’ experience in providing accounting, tax and business advisory services. They have worked with broad spectrum of clients, ranging from high net worth individuals to large private businesses, subsidiaries of foreign multinationals as well as local and foreign owned property developers.

Session topics and dates

Session 1: Are you Development ready? | Legal documentation – Daren McDonald and Brihony Boan
Monday, 13 May 2019 

Are you ‘development ready’? This introductory session will provide a brief overview of the series structure as a whole and focuses on the development planning process. Daren explains the importance of a holistic and strategic development plan along with key factors to consider before embarking on any new project. In particular, this session focuses on structuring, asset protection as well as understanding and developing risk management methodology.

Brihony will present on a range of legal documentation issues. Getting documentation right the first time around minimises the risk of liability, performance issues and non-deliverables. Therefore it is crucial that proper attention be given to all legal documentation including (but not limited to) land acquisitions, contracts of sale, town planning submissions and supplier engagements and building contracts.

Session 2: Feasibility and development management | Town planning | Sales strategy  – Luke O’Grady, Christina McRae and Sam Nathan
Wednesday, 12 June 2019

Luke will step us through the preparation of an accurate feasibility statement, which is essential to the developer’s assessment of the opportunity. In addition, it is critical in determining a host of other factors such as risk and reward, timings, tax and cash flow planning and equity partners’ expectations. In addition, a successful development is all about delivering your project on time and on budget.

Our town planning expert, Christina will talk you through the documentation and practical application associated with all aspects of the development cycle and give tips on how to avoid some of the common pitfalls.

Sam will provide an assessment on current market trends and give advice on how to determine effective sales approaches and marketing strategies tailored to your project.

Session 3: Construction | Funding | Construction cost management – Andrew Deveson, Tom Renda, Brendan Young and Arif Uzay
Monday, 22 July 2019

Andrew, our construction expert, will speak about the construction process including management of the respective parties involved, common issues and the fundamentals in implementing a successful construction program.

Our expert Tom, will address the role that debt can play in funding a development along with the legalities and risks around alternative financing options. Tom will also cover structuring the deal for equity investors and property schemes. In short, everything you need to know about what to consider and avoid in modern-day deal structuring.

Brendan and Arif will provide practical advice to ensure you start off on the right foot when it comes to managing the construction costs of your development.

Session 4: Developers panel discussion | Completion and property taxes – Matt Gibb, Matt Malseed, Sejla Kadric and Blake Rodgers 
Monday, 19 August 2019

In the final session of this series, there will be a recap on the different phases of the development cycle with particular focus given to the completion and settlement of the project.

The first part of this session will be led by Matt Gibb and Matt Malseed, who will share their personal insight into how and why they got involved in property development, lessons learned and their journey to date. This session will be a rare opportunity to get firsthand knowledge from experts in the trade – learn what to avoid in the development process, how to judge feasibility of the project and increase your chances of success.

The final part of the session will be a recap of property related state and federal taxes pertaining to acquisition, hold and disposal of developed property

Registration and more information

Know someone interested in property development? You are welcome to direct any interested property professionals to this web page or to the ShineWing Australia Marketing team via marketing@sw-au.com.

In order to maintain an interactive group, please note that places are limited to 25 and will be allocated on a first come first served basis.

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