Open irregularities and Final Balance

What should we do if we have open cases reported in GrACE, as well as cases to be reported for 1Q 2025, as a result of the last audit reports. All these will be reflected in the Final Balance as negative adjustment. For some of the cases there are court procedures still on-going and we will continue to report on their status through follow-up reports. Our understanding based on the Closure Guidance and practice with the previous period is that after we have the final court decisions, based on this some changes in the Final Balance will be possible (in case the decisions are in favour of the Project Promoters they will be considered as eligible expenditures under the EEA and NFM).

For programmes with open IR cases at the time of FPR submission, the FMO will consider keeping the FPR open for a while or making a Provisional approval of the FPR. Provisional approval will allow the FMO to make a provisional payment or recovery of the final balance in situations where the FMO assesses that regulatory deadlines related to the review of the FPR could not be reasonably met or when substantial amount of time might be needed to approve the FPR due to outstanding issues (e.g. irregularities). In case of provisional approval, once the irregularities are resolved together with the PO/NFP/IA, the respective financial corrections will be introduced in the Final balance by the FMO and the Programme will be proposed for the final approval. 

Cases that are corrected by the POs during the verification process and are not reported in GrACE In line with Art. 12.5.3, b) of the Regulation. For some of these cases there are also court procedure that are still on-going. How can we reflect all these cases in the Final Report/Final Balance and in case there are court decisions in favour of the Project Promoter can we also have a revised Final Balance to reflect them.

As these are the cases which do not need to be reported and have already been accounted for when reporting eligible expenditure in IFRs or in the FPR, we would recommend to list in the Annex I of the FPR (in the text box shown in the picture below, under appropriate outcome) only the cases for which there are open court cases which can subsequently affect the amount of reported eligible expenditure. The following information would useful:

a brief description of the case,
the amount of contested at the court,
month of expected finalization of the court case.
The FMO will then consider keeping the FPR open for a while or making a Provisional approval, as described in our response above.