Accounting Obligations for Funded Projects

Projects funded by public money, such as PEPAC (the CAP Strategic Plan) or the PRR (Recovery and Resilience Plan), carry strict accounting obligations. Failing to comply with these rules can lead to cuts in support, repayment of funds or legal penalties. This article sets out the main accounting duties beneficiaries must observe in order to meet the requirements in full.

1. Organised accounts are mandatory

Whatever the size of the project or the company, beneficiaries of public support must keep organised accounts in line with the Portuguese Accounting Standards System (SNC). This is a legal and contractual requirement that makes it possible to trace how the funds are used and to prove that the expenditure is eligible.

How to comply:

• Hire a certified accountant.
• Use legally recognised accounting software.
• Keep the project's accounts clearly separate from the company's other activity.

2. A dedicated bank account for the project

It is strongly recommended (and often mandatory) to open a bank account dedicated to the funded project but, above all, always to use the same bank account that was given when the financial support was contracted.

Advantages:

• Full compliance with the law.
• It makes it easier to monitor money coming in and going out in connection with the project.
• It avoids any confusion between eligible and non-eligible expenditure.
• It responds directly to requirements on the traceability of funds.

3. Filing invoices and supporting documents

All expenditure documents relating to the project (invoices, receipts, bank statements, contracts, payroll records and so on) must be filed and kept accessible.

Important:

• Invoices must identify the project (reference to the call, application number, etc.).
• Documents must generally be kept for 10 years.

4. Monitoring tables and interim reports

Most support programmes require technical and financial reports to be submitted during the project's implementation.

Usual requirements:

• A physical and financial progress table.
• A list of expenditure paid, with dates and supporting documents.
• Reports validated by the accountant or statutory auditor.

5. Tax and social security compliance

Beneficiaries must keep their tax and social security position in order throughout the project's implementation and monitoring period.

How to ensure this:

• Check your status with the Tax Authority (AT) and Social Security (SS) every month.
• Settle any debt to the State immediately.
• Keep the certificates proving your position is in order.

6. A clear separation between eligible and non-eligible expenditure

Not all expenditure incurred under a project is considered eligible for reimbursement.

It is advisable to:

• Create specific headings in the chart of accounts for eligible expenditure.
• Obtain prior advice on whether expenditure is admissible from the adviser handling the application and from the accountant.
• Follow the funding programme's technical guidance.

Rigorous accounting management is indispensable for anyone receiving public funds, such as those from PEPAC or the PRR. Beyond legal compliance, clear and transparent accounts avoid financial risk, delayed payments and lost support.

Working closely with a certified accountant is essential to the project's success. Count on the support of Espaço Visual!