Beneficiaries should also expect inspections throughout the entire life cycle of the project. The purpose of these inspections is to verify whether the development has been implemented in accordance with the application, the Grant Award Document, and the applicable rules and regulations.
What is the purpose of an on-site inspection?
The purpose of an on-site inspection is to determine whether the supported development has actually been implemented in line with the commitments made, in a lawful, compliant, and verifiable manner. This does not only refer to the physical implementation of the project, but also includes the review of documentation, procurements, invoices, performance certificates, assets, and the obligations undertaken.
It is important that, by signing the Grant Award Document, the Beneficiary undertakes to allow inspections to be carried out during both the implementation and the maintenance period of the project.
What types of inspections may take place?
Different types of on-site inspections may be carried out at various stages of the project life cycle.
- An interim on-site inspection may take place during project implementation. In this case, the inspection examines whether the development is progressing according to plan and whether the use of the grant is compliant.
- A final on-site inspection may take place before the project is closed. Its purpose is to verify the full implementation of the development.
- A maintenance-period on-site inspection may take place during the maintenance period. In this case, the inspection verifies whether the Beneficiary continues to fulfil the obligations undertaken.
- An extraordinary on-site inspection may be carried out in justified cases, based on special circumstances or information received.
How does the inspection begin?
The inspection usually starts with prior contact. A representative of Hungarian Economic Development Agency (MGFÜ) contacts the Beneficiary electronically and agrees on the date of the on-site inspection. During this coordination, the Beneficiary is also informed about the documents that must be presented during the inspection.
The on-site inspection is carried out by at least two MGFÜ staff members. The inspectors present their authorisation letter on site, one copy of which is handed over to the Beneficiary.
What documents may be required?
The range of documents to be presented may vary from project to project, but typically the following documents may be required:
- the certified specimen signature or signature sample of the person authorised to sign,
- a power of attorney, if the Beneficiary is not represented by the person authorised to sign,
- a certified company extract not older than 30 days,
- the title deed related to the project implementation site, a lease agreement, or the owner’s consent,
- accounting documents, such as a general ledger extract or asset register,
- the necessary official permits, authorisations, or notifications,
- documents related to the implementation of the project, such as quotations, contracts, invoices, bank receipts, and performance certificates.
It is advisable to organise these materials already during project implementation, because during an inspection it is not only important that the development has been implemented, but also that this can be properly substantiated.
Assets and developments are also inspected
After reviewing the documents, the inspectors examine the assets purchased from the grant and the developments implemented. During this process, they may request, for example, the presentation of commissioning documents or warranty certificates. Photo and video recordings may also be made as part of the inspection, so it is important that the purchased assets can be identified and inspected at the project implementation site.
Inspection report and supplementation of missing documents
At the end of the inspection, an inspection report is prepared. This records the description of the inspections carried out, the findings of the inspection, any comments made by the Beneficiary, and, where necessary, the tasks and deadlines related to the supplementation of missing documents. The inspection report is signed on site by both parties and is prepared in at least two copies. One copy remains with the Beneficiary.
If the supplementation of missing documents recorded in the inspection report is not submitted, or is submitted with inadequate content, this may result in a reduction of the awarded grant amount and, in serious cases, the withdrawal of the Grant Award Document.
What should Beneficiaries pay attention to?
The most important element of preparing for an on-site inspection is well-organised project administration.
The Beneficiary should keep continuous records of the project documents, handle the supporting documents related to the grant separately, retain the procurement documentation, and ensure that the developments and assets undertaken are available in accordance with the project requirements.
If the on-site inspection is successfully completed, MGFÜ issues the necessary performance certificate. The project then enters the maintenance period, during which the fulfilment of the obligations undertaken must continue to be ensured.
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