A Horizon Europe audit requires beneficiaries to demonstrate that the costs they declared are eligible, correctly calculated, attributable to the action and supported by reliable records. The exact evidence depends on the cost category, the applicable Grant Agreement, the beneficiary's accounting practices and the transaction being examined. There is no universal checklist of documents that automatically makes every cost eligible.
The most effective approach is to build an evidence trail throughout the project: from the activity described in the Description of Action, through the decision to incur a cost, to the accounting entry, calculation and supporting records. This guide explains how to establish that trail, which documents are commonly relevant, and how to prepare an audit response without creating unnecessary paperwork.
Scope: This guide primarily addresses Horizon Europe grants using actual-cost reporting under the EU Model Grant Agreement. Lump-sum grants, unit costs and specific programme provisions can involve different evidence requirements. Always check your signed Grant Agreement, its Data Sheet and applicable amendments.
What do Horizon Europe auditors actually check?
Auditors assess whether declared costs comply with the applicable funding rules and whether the beneficiary can substantiate them through appropriate, reliable evidence. For actual costs, the checks typically cover whether an expenditure was incurred, recorded in the accounts, connected to the action, necessary for implementation, and calculated and declared correctly.
A convincing audit trail answers five questions:
| Audit question | Evidence that may help answer it |
|---|---|
| What was purchased or performed? | Contract, order, employment record, invoice, work record or other transaction evidence |
| Why was it needed for the project? | Description of Action, work package records, meeting agenda, technical notes or internal justification |
| Who incurred and recorded the cost? | Beneficiary accounting records, payroll ledger, cost centre and supporting transaction documents |
| How was the eligible amount calculated? | Daily-rate worksheets, allocation keys, depreciation schedules, reimbursement calculations |
| Were the applicable rules respected? | Procurement file, HR policy, approvals, applicable grant conditions and relevant internal procedures |
Documentation is necessary, but it does not replace substantive eligibility. For example, an impeccably filed invoice for an ineligible expense remains ineligible. Conversely, the absence of one particular document does not automatically mean a cost must be rejected if other adequate evidence is available and the rules do not require that specific document.
How long must Horizon Europe beneficiaries keep supporting documents?
Under the standard Horizon Europe Model Grant Agreement, beneficiaries generally must keep records and supporting documents for five years after payment of the balance, subject to the specific Data Sheet and any applicable exceptions. For grants at or below the relevant threshold, the period may be three years. The clock is therefore not necessarily measured from the project's end date or final report submission.
The record-retention obligation can extend where audits, investigations, litigation or other procedures are ongoing, as provided in the Grant Agreement. Beneficiaries should verify the precise period and any extensions in their own agreement rather than applying a generic institutional retention rule.
Records may be retained in appropriate original or accepted digital form, provided they remain accessible, authentic and reliable under applicable requirements. This includes preserving access after staff leave or IT systems change. Personal data should not be kept indefinitely merely because it relates to an EU grant: retention and access must also comply with applicable data-protection obligations.
Which documents are needed to justify personnel costs?
For personnel declared as actual costs, auditors need to establish the person's eligible relationship with the beneficiary, the eligible remuneration, the time attributable to the action and the accuracy of the reported amount. Our guide to calculating and declaring Horizon Europe personnel costs explains the underlying daily-rate and time-recording rules in more detail.
| Evidence area | Common supporting records | What to verify |
|---|---|---|
| Employment or equivalent relationship | Employment contract, appointment decision, amendments | Dates, contractual workload, employment conditions |
| Eligible remuneration | Payroll records, employer-contribution records, accounting entries | Eligible components, reporting period, accounting consistency |
| Work on the action | Monthly declarations of days worked or other reliable time records accepted under the rules | Credibility, approvals where applicable, consistency with other evidence |
| Calculation | Daily-rate worksheets, working-time and period adjustments | Correct numerator, denominator, days and applicable method |
| Special personnel arrangements | Direct-contract or secondment agreements; SME-owner unit-cost calculation where relevant | Correct cost category and its specific conditions |
Time records deserve particular attention. Under Horizon Europe, the Model Grant Agreement allows monthly declarations of days worked on the action, as well as other reliable time-recording systems meeting the applicable conditions. It is inaccurate to assume that every employee must submit traditional hourly timesheets or that every time record must use one prescribed template.
Check that the recorded days are consistent with the employment period, leave, other assignments and work performed. A travel day may legitimately be a project working day if the trip was for the action; the issue is not travel itself but contradictory or unsupported records.
Illustrative example: A researcher has an employment contract, payroll entries and approved monthly declarations of project days. The finance team should also retain a reproducible calculation showing how the declared personnel amount follows from the eligible remuneration and the applicable daily-rate method. A payroll summary without a calculation trail makes verification unnecessarily difficult.
For SME owners or natural persons who do not receive a salary, the applicable unit-cost rules differ from ordinary payroll-based declarations. The supporting file should demonstrate the eligibility of the arrangement and the number of eligible days rather than inventing payslips that do not exist.
What procurement records should you keep for purchases and subcontracting?
Procurement evidence should show that the purchase or subcontract was necessary for the action and that the beneficiary complied with the applicable rules, including the relevant best-value-for-money or lowest-price principle and the avoidance of conflicts of interest. Public contracting authorities may also have to comply with public procurement law.
A useful procurement file can contain:
- A brief description of the need and its link to the project.
- The applicable procurement policy or legal procedure and the relevant threshold.
- Quotations, market research, tender documentation or other evidence of the selection process where applicable.
- The documented selection decision and conflict-of-interest safeguards.
- The order or contract, invoice, evidence of delivery or performance, and relevant accounting records.
- Payment evidence when needed to substantiate the transaction or its treatment.
Do all purchases require three quotations? No. Horizon Europe does not impose a universal three-quotation rule on every beneficiary and every purchase. The appropriate procedure depends on the applicable EU grant provisions, national law, the beneficiary's usual practices and the circumstances of the transaction. A sole-source purchase is not automatically ineligible, but its justification should be documented where relevant.
Distinguish purchase costs from subcontracting. Subcontracting concerns action tasks performed by an external party and has specific conditions, including consistency with the action description and applicable approval rules. A consultancy invoice is not sufficient to determine the correct budget category. See how to manage subcontracting in Horizon Europe without putting the grant at risk.
What evidence is needed for travel, accommodation and project events?
For travel and subsistence declared as actual costs, the file should establish that the journey was connected to the action, that the amounts were calculated according to the applicable rules and that the expenditure was recorded correctly.
| Type of evidence | Examples | Purpose |
|---|---|---|
| Project relevance | Meeting invitation, conference programme, agenda, mission description | Explains why travel was needed |
| Travel and attendance | Tickets, booking records, attendance confirmation, meeting minutes | Supports that the activity took place |
| Expense and reimbursement | Hotel invoices, receipts, expense claims, approved reimbursement records | Supports the amount declared |
| Internal policy | Travel policy, per-diem rates, authorisation procedure | Demonstrates consistent treatment |
Are boarding passes mandatory for every trip? Not as a universal rule. They can be useful evidence, but other reliable documentation may establish the trip and its project purpose. Likewise, a mission order is relevant where required by the organisation's procedures; it should not be presented as an automatic EU-wide requirement.
For events, retain appropriate contracts, invoices, agendas, participant or attendance evidence where relevant, and proof that the event served the action. Where participant information includes personal data, restrict access and apply appropriate retention and security measures.
How do you document equipment, consumables and internal services?
Equipment normally requires a calculation of the eligible depreciation corresponding to the period and extent of project use, rather than automatically charging its full purchase price. The specific grant conditions may provide exceptions, including where full costs are expressly eligible.
An equipment evidence file may include the invoice, asset register, depreciation policy, depreciation calculation, allocation to the project and reasonable evidence of use. If an instrument is shared across several activities, explain the allocation method. Exclusive project use may support a full allocation of the relevant eligible depreciation, but the claim still needs to follow the applicable rules.
For consumables, connect the expense to project activities through purchase records, laboratory or technical records, stock movements or another proportionate form of evidence. The necessary level of detail depends on the item and how it is used.
For internally invoiced goods and services, or other permitted unit-cost categories, retain the documentation required by the applicable cost method. Do not assume that an actual-cost invoice is the only acceptable evidence: some categories are declared using prescribed or approved unit-cost methodologies.
How should you organise a Horizon Europe audit documentation system?
An effective system makes each declared cost easy to trace without exposing confidential records to everyone in the consortium. A shared repository can help, but it should respect institutional ownership, access rights, security requirements and data protection.
A practical structure is:
Horizon-Europe-Project/
01_Grant-and-Amendments/
02_Reporting-and-Calculations/
03_Personnel/ [restricted access]
04_Purchases-and-Subcontracts/
05_Travel-and-Events/
06_Equipment-and-Other-Costs/
07_Technical-Evidence/
08_Audit-Requests-and-Responses/ [restricted access]
Use consistent filenames such as 2026-04-15_WP3_LabEquipment_Invoice_045.pdf, and link records to the accounting transaction or internal cost identifier. Maintain an index with the cost category, reporting period, declared amount, evidence location and responsible contact.
Three controls are especially useful:
- Completeness: Does the file contain the evidence appropriate to this cost and its reporting method?
- Traceability: Can another person reproduce the declared amount from the underlying records?
- Consistency: Do dates, amounts, employment conditions and project activities agree across systems?
Keep version histories and preserve genuine original records. Corrections should be documented transparently, not silently substituted for earlier evidence. A central audit index can refer to records held securely by HR or finance; it is not necessary to duplicate sensitive payroll files into a consortium-wide drive.
How can beneficiaries prepare for an audit before receiving a notification?
The best preparation is a recurring internal review, not an emergency document collection exercise. At project start, identify the rules for each cost category and agree which department will retain the relevant records. During implementation, reconcile declared amounts with accounting records and project evidence. Before each financial report, perform a sample-based review of transactions and calculations. This control cycle belongs in the wider Horizon Europe project-management process.
| When | Recommended control | Responsible function |
|---|---|---|
| Project start | Review Grant Agreement, cost methods and retention rules | Coordinator and finance |
| Monthly or regularly | Check personnel records and transaction filing | HR, finance and project teams |
| Before reporting | Reconcile cost claims with ledger and calculations | Finance |
| At reporting submission | Preserve final financial statements and calculation versions | Reporting lead |
| After project closure | Confirm retention owner, access and archive continuity | Beneficiary administration |
A simple internal test is to select one declared personnel cost, one purchase and one travel expense, then ask a colleague unfamiliar with the transaction to reproduce the justification and amount. Any missing link becomes an improvement task before an external auditor asks for it.
What should you do when a Horizon Europe audit starts?
When an audit notification or document request arrives, first confirm its scope, the audited periods, the requested cost categories, the submission channel and deadlines. Appoint a central contact to coordinate with HR, finance, procurement and the technical project team.
Then follow a controlled response process:
- Register the request. Record each question, its owner, deadline and status.
- Retrieve the original evidence. Preserve source files and their provenance.
- Reconcile the figures. Confirm that submitted calculations match the financial statements and accounting records.
- Explain unusual transactions. Supply short, factual notes supported by contemporaneous evidence.
- Check confidentiality. Share sensitive information only through appropriate channels and with authorised recipients.
- Submit an indexed response. Make it easy to locate the record answering each request.
- Track follow-up questions and findings. Document clarifications and any agreed corrective actions.
Do not fabricate or backdate documents. However, a retrospective explanation or calculation is not automatically improper: it can be legitimate to prepare a reconciliation or explanatory note during an audit, provided it is clearly dated, accurate and grounded in genuine underlying records. The critical distinction is between explaining existing evidence and falsely presenting a newly created record as contemporaneous.
If a document is missing, say so and identify any alternative reliable evidence. Do not assume that every gap can be cured, but do not automatically concede that the cost is ineligible without examining the applicable rules and available records.
What are the most common documentation mistakes in Horizon Europe audits?
| Common mistake | Why it creates risk | Better practice |
|---|---|---|
| Cost declared without a reproducible calculation | Auditor cannot verify the amount | Retain calculation sheets and source references |
| Time records conflict with other HR evidence | Work allocation appears unreliable | Reconcile days, contracts and leave records |
| Supplier selection cannot be explained | Procurement compliance is unclear | Document the applicable procedure and decision |
| Travel purpose is not identifiable | Link to the action is weak | Keep agendas, meeting records or other relevant evidence |
| Equipment use is unsupported | Project allocation may be overstated | Apply a justified, consistent usage method |
| Documents stored only in individual inboxes | Records may disappear when staff leave | Use controlled institutional archives |
| One checklist applied to every cost type | Specific requirements may be missed or unnecessary paperwork created | Tailor evidence to the cost method and agreement |
| Explanations presented as original records | Provenance and reliability are compromised | Clearly distinguish original records from later clarifications |
A strong audit file is not necessarily the largest one. It is the one that demonstrates the right facts with reliable, consistent and accessible evidence.
Horizon Europe audit documentation checklist
Before submitting a financial report or responding to an audit, check the following:
- The applicable Grant Agreement, Data Sheet, amendments and cost-reporting method have been reviewed.
- Declared costs reconcile with the beneficiary's accounting records.
- Each sampled expense has a demonstrable link to the action.
- Personnel arrangements, eligible remuneration and project days are adequately evidenced.
- Purchases and subcontracts follow the applicable selection and conflict-of-interest rules.
- Travel and event expenses have proportionate evidence of project relevance and amounts.
- Equipment and shared costs use justified, reproducible allocations.
- Financial calculations and reporting-period adjustments can be reproduced.
- Records are indexed, access-controlled and retained for the contractual period.
- Missing evidence, corrections and subsequent explanations are recorded transparently.
Frequently asked questions about Horizon Europe audits
Does every Horizon Europe project undergo a financial audit?
No. Not every project is selected for an external financial audit. However, beneficiaries must maintain the records required by their Grant Agreement and may be subject to checks, reviews or audits within the applicable framework. A Certificate on the Financial Statements (CFS), when required, is a distinct mechanism and does not eliminate the possibility of further checks or audits.
Is an invoice enough to prove that a cost is eligible?
Usually not on its own. An invoice may establish what was charged, but additional records may be needed to demonstrate the link to the project, correct procurement, accounting treatment and eligible amount. The appropriate evidence depends on the transaction.
Must beneficiaries keep paper originals?
Not necessarily. Electronic records can be acceptable under the applicable Grant Agreement and legal requirements, provided their authenticity, integrity and accessibility can be established. Institutions should verify any national recordkeeping obligations as well.
Can an auditor reject personnel costs because traditional timesheets are missing?
Not simply because the beneficiary uses an accepted alternative to traditional hourly timesheets. Horizon Europe permits specified forms of recording days worked, including monthly declarations, subject to the applicable conditions. Unsupported or unreliable time records can still lead to corrections.
Are the documentation requirements the same for lump-sum grants?
No. In Horizon Europe lump-sum grants, the payment logic focuses on the proper completion of work packages rather than reimbursement of each individual actual cost. Beneficiaries still need to retain evidence of implementation and comply with relevant obligations, but they should not automatically apply an actual-cost audit checklist to lump-sum reporting.
Can missing documents be created after an audit request?
You may prepare a clearly identified explanation, index or reconciliation based on authentic existing records. You should never fabricate, backdate or falsely represent a newly created document as evidence produced at the time of the transaction. Where primary evidence is missing, disclose the gap and consider whether alternative reliable records exist.
Conclusion: make documentation part of project management
Horizon Europe audit readiness is not achieved by collecting a large folder of invoices at the end of a project. It comes from consistently linking project activities, accounting entries, eligibility rules and supporting evidence throughout implementation.
A proportionate documentation system helps beneficiaries justify expenditure, answer audit questions efficiently and detect reporting problems early. The objective is not to make every file look perfect: it is to make every declaration understandable, reproducible and supported by genuine records. For the procedure after a notice arrives, continue with our broader guide to Horizon Europe checks, reviews and financial audits.
Official resources and further reading
- European Commission — Horizon Europe funding programme
- EU Funding & Tenders Portal — Reference Documents — select Horizon Europe and consult the relevant Model Grant Agreement and Annotated Grant Agreement.
- EU Funding & Tenders Portal — Online Manual
- European Commission — Horizon Europe lump-sum funding
Editorial note: Contract-specific rules prevail over general guidance. Check the signed Grant Agreement and current official documentation before making financial reporting decisions.