Special Report 6/2019

Financial audit on the Special Account for Research Funds of Aristotle University of Thessaloniki

The main objectives of the audit were to examine: I. The correct and accurate representation of the data, facts and transactions in the financial statements. II. If the Internal Control System complies with the legislative and regulatory framework and is functioning properly and gives reasonable guarantees of: a. the legality and regularity of underlying transactions, b. the safeguarding of assets and information and c. the prevention, detection, correction, investigation and monitoring of fraud and irregularities. III. If the transactions are legal and regular and comply with the principle of sound financial management.

The most important findings identified were: a. the absence of an Internal Control Unit, b. significant delays in the procedures for the completion of projects completed in terms of their contractual and economic subject matter, c. the existence of ineligible expenditures involving outstanding loan obligations of the Scientific Operators to the Account for Research Funds, d. the absence of clear legal context of staff employment in the operation of the Special Account for Research Funds, e. weaknesses in the monitoring of tangible fixed assets of Special Account for Research Funds projects due to the failure to carry out physical inventory on assets, f.the existence of lost revenue from deductions from the revenue of the Teaching Research Staff and the attestation and collection by the Special Account for Research Funds.

The main conclusion of the audit is the absence of procedures for monitoring the financial management of the Special Account’s work as a result of weaknesses in the internal control system and the shortcomings and complexity that exists in the legislative and regulatory framework. This has an impact on the proper appearance of the funds in the Special Account’s financial statements.

Recommendations: 1. Promoting cooperation between the Special Account for Research Funds and the Ministries responsible for setting up an internal control unit. 2. Strengthening cooperation with the Bodies responsible for certifying and collecting the revenue from deductions on the gross revenues of the Teaching Research Staff. 3. The immediate settlement of projects pending closure proceedings and their debts and ineligible expenditures which delay their termination procedures.4. Establishing a clear legislative framework for the recruitment and employment of staff in the functioning of the Special Account. 5. The establishment of systematic procedures for monitoring the assets of the Special Account.

The Hellenic Court of Audit will carry out a follow-up audit.