Securing EU funds is half the job; the other half is reporting on and justifying them. A project under Spain’s Recovery, Transformation and Resilience Plan (PRTR), a PERTE (one of Spain’s strategic projects for economic recovery and transformation) or the ERDF is only finished when the IGAE (Intervención General de la Administración del Estado, Spain’s General State Comptroller), Spain’s Court of Auditors (Tribunal de Cuentas) or the European Commission can reconstruct, years later, what was done, with what money, who was paid and what it achieved. Most public bodies assemble that proof at the end, from folders, emails and spreadsheets, and that is when the gaps appear. This guide explains what the reporting and justification of EU funds requires, why it fails when it is left to the end and what a system must do to generate it out of the management of the project itself, which is how CEDESA has approached the Next Generation EU and PERTE-funded projects it has delivered.

What has to be justified, and to whom

Recovery, Transformation and Resilience Plan (Next Generation EU)

The Recovery and Resilience Facility, governed by Regulation (EU) 2021/241, pays for milestones and targets that have been achieved, not for certified expenditure. In Spain, Order HFP/1030/2021 (Orden HFP/1030/2021) sets up the management system and Order HFP/1031/2021 specifies the information that state, regional and local entities must supply. From these come the obligations that any project must be able to show it has met:

Milestones and targets, with their indicators and the evidence that they have been achieved.
Green and digital tagging of expenditure and compliance with the principle of doing no significant harm to the environment (DNSH), with the corresponding assessment.
Prevention of fraud, corruption and conflicts of interest: an anti-fraud measures plan, declarations of absence of conflict of interest, a risk analysis, and the absence of double funding.
Identification of the final recipient of the funds: contractors, subcontractors and beneficiaries, together with their beneficial ownership, as required by Article 22 of the EU regulation.
Budget implementation and accounting by measure and component, and periodic reporting through the CoFFEE-MRR system (the Spanish Government’s information system for managing and monitoring the Recovery Plan), including management reports and signed certificates.
Retention of documentation for the period set by EU legislation, which is counted in years from the last payment, and its availability to the IGAE, the Court of Auditors, the Commission, OLAF (the European Anti-Fraud Office), the European Public Prosecutor’s Office and the European Court of Auditors.

ERDF and cohesion policy funds 2021–2027

Regulation (EU) 2021/1060 requires an audit trail that makes it possible to follow each operation from the call for proposals to payment: selection of operations, expenditure declared, management verifications, procurement, publicity, indicators and retention of the documents for the prescribed period, likewise counted in years from the last payment. The managing authorities, the audit authority and the IGAE review operations and systems, and an irregularity means a financial correction.

In both cases the message is the same: whoever cannot reconstruct the full history of every euro gives the euro back.

Why justification left to the end fails

Evidence is looked for when it no longer exists: the email with the approval, the photograph of the delivery, the version of the tender specifications that was published.
The data sits in systems that do not talk to one another: accounting has the payment, the case management system has the decision, the supplier has the deliverable, and nobody has the link between the three.
Final recipients and beneficial ownership are compiled by hand at the end, from companies that no longer reply.
Conflict of interest declarations are signed late or cannot be found.
The indicators for milestones and targets are estimated instead of measured, because nobody recorded them during delivery.
The documents are not ENI documents, that is, documents compliant with Spain’s National Interoperability Framework (Esquema Nacional de Interoperabilidad, ENI): with no metadata, no signature and no case file index, they are of no use as proof before an oversight body, as we explain in what a case management system must comply with.

The result is weeks of work for the comptroller’s office and the procurement department, and a real risk of financial correction for lack of proof, not for lack of delivery.

What a system that builds justification into project management must do

The solution is for justification to be a by-product of managing the project, not a separate project afterwards. A system designed for that purpose must:

Model the project as the funder sees it: component, measure, sub-measure, milestone or target, indicator and required evidence, so that every action in the project is tied to an item that can be justified.
Capture the evidence at the time: geolocated photographs of a delivery, signed records, quality checks, sensor readings and delivery reports, generated or recorded by the field or management application with the date, author and location.
Link every item of expenditure to its case file and its payment: contract, contractor, invoice, payment and evidence that the service was provided, with the final recipient identified and its beneficial ownership captured when the contract is awarded, not at the justification stage.
Manage anti-fraud measures within the workflow: declarations of absence of conflict of interest signed electronically before each decision, red flags, double-funding checks and a record of the risk analysis.
Apply tagging and DNSH to each action, with the assessment attached and able to be updated.
Generate the reports in the funder’s format: the data requested by CoFFEE-MRR or by the ERDF managing authority comes out of the system, with the certificates ready to sign.
ENI documents and case files with a signature, time stamp and metadata, archived in accordance with the National Interoperability Framework and retained for the statutory period in the electronic archive.
Traceability and immutability: every item of data with its who, when and why, and with no possibility of rewriting the past, which is the first thing an auditor checks.
Security in accordance with the National Security Framework (Esquema Nacional de Seguridad, ENS) and data protection, because the system processes data on beneficiaries and on companies.
A dashboard for the project manager and for the comptroller: status of milestones, outstanding evidence, expenditure justified and deadline alerts, so that corrections are made during delivery and not afterwards.

How CEDESA has done it

In the platform for digitalising provincial social services at the Diputación de Toledo (provincial council), financed by the Recovery Plan, the application for quality control and traceability of services to citizens records each delivery with its evidence and generates the reporting for the PRTR oversight bodies. In the conversational AI assistants of Extremadura’s Regional Ministry of Digitalisation (Consejería de Digitalización) for 33 municipalities, financed by Next Generation EU and PERTE, traceability of deployment and use is part of the system. And in the environmental monitoring and prediction project for the water networks of the Consorcio de Medio Ambiente de Badajoz (the environmental consortium of the province of Badajoz), financed by PERTE Agua (the strategic project for digitalising the water cycle), the sensor data is both the service and the evidence. CEDESA can manage the full cycle of an EU-funded project: technical drafting of the proposal, delivery, and reporting and justification to the IGAE and the Court of Auditors, as we explain on our funding page and in the guide to Next Generation EU for digitalisation.

What to ask for in the tender specifications for a funded project

That the system models the funder’s milestones, targets, indicators and evidence and generates the reports in its format.
Evidence capture at the time, with date, author and location, from field applications that work without network coverage.
Final recipients and beneficial ownership recorded when each contractor and subcontractor is registered.
Conflict of interest declarations signed electronically and archived in the case file.
ENI-compliant documents and case files, an electronic archive and retention for the statutory period.
Immutable traceability and conformity with the ENS, with a certified supplier, as we set out in how to check your supplier’s ENS certificate.
Ownership of the system and of the data by the public body, so that the proof does not depend on the supplier once the contract ends.

Frequently asked questions about the reporting and justification of EU funds

What has to be justified in a Next Generation EU project?

Achievement of the milestones and targets, with the evidence; green and digital tagging and the principle of doing no significant harm; the anti-fraud and conflict of interest measures; the absence of double funding; identification of the final recipients with their beneficial ownership; and budget implementation and accounting, with the information supplied through CoFFEE-MRR in accordance with Orders HFP/1030/2021 and HFP/1031/2021.

How long does the documentation for an EU-funded project have to be kept?

EU legislation sets retention periods measured in years from the last payment for the operation or for the plan, and the oversight bodies can ask for the documentation at any time during that period. That is why the archive must be electronic and ENI-compliant, with documentation that can be found, not a shared folder.

Who oversees the reporting and justification of EU funds in Spain?

The IGAE as the control authority, the regional and local comptrollers’ offices, the Court of Auditors and, at European level, the Commission, the European Anti-Fraud Office, the European Public Prosecutor’s Office and the European Court of Auditors. All of them can ask for the complete audit trail of an operation.

What is the audit trail?

The set of records and documents that makes it possible to follow an operation from its selection to the last payment: call for proposals, procurement, delivery, evidence, invoices, payments, verifications and indicators, each with its date and its author. Regulation (EU) 2021/1060 requires it for cohesion policy funds, and the Recovery Plan requires equivalent traceability.

Can software generate the justification automatically?

It can generate most of it if the project is managed from the outset using the funder’s model: milestones, evidence captured at the time, expenditure linked to case file and payment, final recipients recorded when contracts are awarded and ENI documents archived. What it cannot do is reconstruct after the event what was never recorded.

Conclusion

Justifying EU funds means being able to demonstrate, years later, what was done with every euro and with what result, to the IGAE, the Court of Auditors and the Commission. Doing it at the end with folders and emails is slow and risky; building it into project management, with a system that captures the evidence at the time and generates the reports in the funder’s format, turns justification into a by-product of the project. If your organisation is delivering, or is about to deliver, an EU-funded project, tell us about your project via our contact page.