Assistance for the implementation of performance and charging schemes for the single European sky for oversight competences : final report.
Date: 2020-11-08
Institutions: Directorate-General for Mobility and Transport
Subjects: Single European Sky, air freight rate, air space, air traffic control, cost-effectiveness analysis, performance measurement, profitability, project evaluation

Assistance for 
the implementation of 
performance and 
charging schemes for the 
single 
European sky for oversight 
competences 
Final Report  

Written by EY Réviseurs d’Entreprises SRL 
10/12/2020 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EUROPEAN COMMISSION 

Directorate-General for Mobility and Transport 
Directorate E — Aviation 
Unit E.3 — Single European Sky 

Contact: MOVE E3 Secretariat 

E-mail:  MOVE-E3-SINGLE-SKY-UNIT@ec.europa.eu  

European Commission 
B-1049 Brussels 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EUROPEAN COMMISSION 

Assistance for 

the implementation of 
performance and 

charging schemes for the 
single 

European sky for oversight 
competences 

Final Report 

Directorate-General for Mobility and Transport  
Single European Sky  
Contract no. MOVE/E3/SER/2018-580/SI2.813340  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4 

 
 
 
 
 
 
 
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LEGAL NOTICE 

This deliverable was developed by EY Réviseurs d’Entreprises SRL upon request of the European Commission 
under the specific contract MOVE/E3/SER/2018-319/SI2.811081 for assistance for the implementation of 
performance and charging schemes for the single European sky for oversight competences. 

More information on the European Union is available on the Internet (http://www.europa.eu).  

Luxembourg: Publications Office of the European Union, 2020 

ISBN 978-92-76-26337-1 
doi: 10.2832/012207 

© European Union, 2020 
Reproduction is authorised provided the source is acknowledged. 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Table of Contents 

EXECUTIVE SUMMARY  ....................................................................................... 7 

Introduction  .................................................................................................... 7 

Objectives of the project .................................................................................... 7 

DETAILED DESCRIPTION OF THE DELIVERABLES.  ............................................... 8 

Verification Programme  ..................................................................................... 8 

Verification Programme’s Toolkit.......................................................................... 9 

Monitoring Process for the Commission ............................................................... 11 

Training Material ............................................................................................. 11 

Training Material ......................................................................................... 12 

e-Training Material ....................................................................................... 12 

Coaching ....................................................................................................... 12 

Coaching Programme ................................................................................... 12 

Assistance Period ......................................................................................... 13 

Additional Events ............................................................................................ 13 

ANNEXES  ........................................................................................................ 15 

6 

 
 
 
 
 
 
 
 
 
 
 
 
 
EXECUTIVE SUMMARY 

Introduction 

15 years ago the EU launched the Single European Sky (SES) initiative, which has been 
one of the key priorities of the European Commission’s overall transport policy. As a result, 
the performance of air navigation services has improved through stronger integration and 
higher efficiency. Yet, cost-efficiency remains an area where improvements are needed. 

In the light of recommendations made by the European Court of Auditors in its November 
2017 Special Report on the Single European Sky, the Directorate-General for Mobility and 
Transport  (DG  MOVE)  launched  a  project  which  aimed  to  provide  additional  support  in 
capacity-building to aid the National Supervisory Authorities (NSAs) in their tasks to verify 
the eligibility of Air Navigation Services (ANS) costs to be charged to airspace users.  

This report presents the objectives of the project and provides a detailed description of the 
deliverables, which are all included in annex. 

Objectives of the project 

The  overall  objective  of  the  project  is  to  have  better-connected  and  engaged  NSAs  by 
providing them: 

•  A  verification  programme,  which  contains  the list of  procedures  for  verifying  the 

cost eligibility; 

•  A  ready-to-use  toolkit,  which  is  composed  of  7  different  tools  to  be  used  while 

performing the verification procedures; 

•  A training material, developed for assisting the NSAs on every verification procedure 
that needs to be performed, by providing not only the legal basis but also the best 
case scenario and practical examples; 

•  A  coaching  programme  during  which  the  NSAs  were  guided  and  provided  with 
detailed  explanations  on  how  to  properly  conduct  a  verification  process  from 
planning  to  conclusion  phase,  how  to  use  the  Toolkit  and  where  to  search  for 
answers in case facing difficult scenarios; 

•  An e-Learning module which aims to introduce the NSAs to the main concepts of 
the  verification,  legal  requirements  related  to  cost  eligibility  as  well  as  serve  for 
training material; and, 

•  An  assistance  period  of  4  months,  during  which  the  EY  team  is  available  for 

supporting the NSAs while performing their verification procedures. 

Simultaneously,  the  project  aims  to  assist  DG  MOVE  in  monitoring  periodically  the 
verifications performed by the NSAs and keep track of their findings. 

7 

 
 
 
 
 
 
DETAILED DESCRIPTION OF THE DELIVERABLES 

Verification Programme 

The verification programme is a document developed for the NSAs as intended users, with 
a structured approach regarding the verification of the determined and actual costs for the 
provision of air navigation services. It contains all the procedures needed to be performed 
by  an  NSA  in  order  to  validate  the  eligibility  of  ANS  determined  and  actual  costs.  The 
verification programme team completes the procedures, and identifies “Exceptions” where 
any procedures foreseen cannot be completed. Such exceptions result in factual findings 
to be reported. 

For designing the structure of the Verification Programme, a team of auditors specialised 
in EU programmes and funds, finance consultants and IFRS experts worked closely to break 
down  all  the  legal  framework  requirements.  This  work  shed  light  on  the  NSAs’  existing 
experiences  and  challenges  encountered  while  performing  ANS  verifications,  as  well  as 
highlighted any implications of applying International Financial Reporting Standards (IFRS) 
on the verification procedures. 

Having  consolidated  our  theoretical  knowledge  of  the  Implementing  Regulation’s 
requirements,  a  series  of  15  interviews  were  held  with  different  NSAs  to  better 
understand the NSAs environment and controls in place from a practical perspective. These 
interviews performed during the period of October – December 2019, led the team to better 
understand, identify and develop benchmarks  across the different NSAs  in the following 
areas: 

•  The actual status of the verifications being performed and the methodologies used 

by the NSAs,  

•  The weak points as well as shortcomings of the NSAs while verifying the eligibility 

of costs,  

•  The frequency of the verifications  performed for  both types of costs:  determined 

and actuals, and 

•  The approach used for communicating the identified findings to the Air Navigation 

Service Providers (ANSPs) and the verification’s trail. 

This information obtained from the in-depth interviews was used for building the structure 
of the  Verification  Programme  in order  to  make  this  deliverable  as  user-friendly  and  as 
practical as possible. 

During the period from March to July 2020, EY performed 6 pilot verification missions 
with the NSAs of Ireland, Croatia, Norway, Cyprus, Switzerland and Poland. These 6 pilot 
missions contributed to improve and fine-tune the procedures designed in the Verification 
Programme.  This  exercise  was  pivotal  because  it  introduced the  NSAs to  the  developed 
draft of the  Verification  Programme.  It  allowed  the  NSAs  to  provide  their  feedback  and 
thoughts  on  the  structure  and  the  content  of  the  Verification  Programme  which  was 
conceived in two main sections: determined and actual costs. For each of these two cost 
types,  the  verification  procedures  were  grouped  into  three  different  phases:  Planning, 
Execution and Conclusion. 

The  results  obtained  from  the  6  pilot  verifications  were  considered  and  reflected  in  the 
developed material. The final draft version of the Verification Programme was shared with 
DG MOVE on 31/07/2020. All the comments received from different stakeholders (NSAs 
that shared their insights through the coaching sessions, DG MOVE, PRB, Eurocontrol, etc) 
were reflected in the final version of the deliverable accordingly. 

The final version of the Verification Programme can be found as Annex 1 to the present 
report. 

8 

 
 
 
 
 
Verification Programme’s Toolkit  

The verification programme consists of a list of cost eligibility verification procedures to be 
performed by the NSAs when validating the ANS costs. To support its application, a Toolkit 
was developed in order to assist the users of the verification programme in a practical way. 
The Toolkit contains detailed explanatory notes describing the purpose of each component 
and how to use every tool to maximize their effectiveness. 

The Toolkit of the Verification Programme is a set of 7 different tools which assist the NSAs 
during all three phases of the verification process, for both determined and actual costs, 
as shown in the table below: 

Conclusion Phase 
•  Tool  4  –  Template  for 
the  Factual  Findings 
Report  prepared  by 
the NSAs following the 
verification 

Execution Phase 
•  Tool  5  –  Template 
the 
of 

table 
verification 
investment costs 

for 

•  Tool  7  –  Operational 
checklist  (Verification 
Programme  in  excel 
format) 

Planning Phase 
•  Tool 1 – Template letter 
for the announcement of 
the verifications 

•  Tool 2 – Standard list of 
be 
documents 
requested 
the 
ANSPs  in  view  of  the 
verification 

to 
from 

•  Tool 3 – Template of the 

pre-fieldwork 
questionnaire to be filled 
by ANSPs 

•  Tool  6  –  Template  for 
the 
Risk 
and 

documenting 
Preliminary 
Assessment 
Sampling 

•  Tool  1 – Template letter for the announcement of the verifications 

Tool 1 is a template letter for formally communicating to the ANSPs the start of the 
verification process, informing them of the upcoming verification of ANS costs. The 
letter was developed to assist the NSA in formalising the cost eligibility verification 
process for both determined and actual cost. From the start, it ensures transparency 
with regards to the verification objectives and approach, as  well as any potential 
findings and their follow-up.  

•  Tool    2  – Standard  list  of  documents  to  be  requested  from  the ANSPs  in 

view of the verification 

In  order  to  ensure  that  the  verification  proceeds  as  smoothly  as  possible, 
preparation steps and communication are of upmost importance. This Tool is list of 
documents  to  be  requested  from  the  ANSP,  and  has  been  developed  with  the 
purpose of assisting the NSAs in performing their work. This document contains a 
list  of  all  the  documents  necessary  for  performing  the  procedures  listed  in  the 
Verification  Programme  throughout  the  three  phases  (Planning,  Execution  and 
Conclusion phase) for both determined and actual costs. 

This tool was sent out to the ANSPs together with the “Letter for the announcement 
of the verification” (Tool 1). 

•  Tool  3 – Template of the pre-fieldwork questionnaire to be filled by ANSPs 

The  Pre-field  work  Questionnaire  supports  the  planning  phase  of  the  verification 
process. It is  a template questionnaire  which also needs to be shared with ANSP 

9 

 
 
 
 
 
 
 
 
 
when sending the “Letter for the announcement of the verification”, and will serve 
the  purpose  of  collecting  preliminary  information.  Together  with  information 
regarding methodologies and business assumptions obtained from the ANSP, this 
tool will support the NSA in its initial analysis of the numbers reported by the ANSP 
in the reporting tables and to perform a preliminary risk assessment. 

•  Tool 4  – Template for  the  Factual  Findings  Report  prepared  by  the NSAs 

following the verification 

Following the execution of the procedures in the Verification Programme, the NSA 
verification team is recommended to formalise the conclusions drawn in a report. 
The report should summarise the objectives of the verification that was carried out 
and the Factual Findings identified. 

The NSA needs to consider as “Factual Findings” those for which the performance 
of  the  procedure  in  the  Verification  Programme  resulted  in  an  exception.  In  the 
dedicated section of the report, a factual narrative description of the finding needs 
to be provided. 

The draft report containing the findings will be provided to the ANSP management 
for comments. After the ANSP comments are received and analysed, the report will 
be  finalised  with  the  final  conclusion  of  the  NSA  on  each  of  the  findings.  The 
template created contains standard text, alongside clearly-marked sections which 
need  to  be  adapted  by  the  NSAs  to  further  customise  the  template  as  per  their 
needs and specificities. 

•  Tool 5 – Template table for the verification of investment costs 

This  tool  is  a  Microsoft  Excel  workbook  which  needs  to  be  filled  in  by  the  ANSP 
detailing  the  investments  in  determined  and  actual  costs.  It  provides  the 
transparency required for the NSA to perform the verification of investment costs. 
As with each of the developed tools, it contains within it detailed guidance on how 
the tool can be used, including descriptions of underlying formulas and functions 
included in the workbook. 

•  Tool 6 – Template for documenting the Preliminary Risk Assessment and 

Sampling 

Tool 6 is a Microsoft Excel workbook which needs to be filled in by the NSAs. It is 
populated with data from the ANSP’s reporting tables, ANSPs replies to Tool 3 (Pre-
fieldwork questionnaire) as well as the NSAs’ previous experiences, to lead to an 
assessment  of the risk  and  determining the  sample  size. This  tool  will  assist  the 
NSAs in documenting which service providers and which costs by nature the NSA 
will verify before notifying the ANSPs about the upcoming verification process. The 
tool covers the concepts of Risk Assessment guiding its users in how to combine 
the information at hands resulting from the reporting tables, Information provided 
by the ANSPs through the Pre-fieldwork Questionnaire, previous experiences of the 
verification team and the reports issued by other auditors. Applying the professional 
judgement of the team, this information will be filtered in order to set the risk levels 
for each entity and for each cost by nature reported in the reporting tables, for both 
determined and actual costs. Additionally, this tool provides guidance on sampling 
by introducing the methodology proposed whilst also including all possible scenarios 
that a verification team will be faced with. The examples will lead the NSAs to define 
their sample size, identify sampled items and document this process properly. 

•  Tool 7 – Operational checklist (Verification Programme in Microsoft Excel 

format) 

This  Operational  Checklist  is  the  Microsoft  Excel  format  of  the  verification 
programme. It was built to ease the NSAs’ reporting process, by summarising all 
the  procedures  performed  and the  factual findings  identified.  As  such,  NSAs  can 
complement their verification reports with tables extracted from this tool in order 
to  reflect  the  procedures  performed  as  per  the  requirements  of  ISRS4400  on 
Agreed-upon Procedures.   

10 

 
 
This tool helps the NSAs to keep track of the historical data for each entity they are 
performing the cost eligibility verifications upon. It will allow the NSAs to have a 
centralised information of all the verification procedures performed, confirmed and 
the  factual  findings  identified  in  the  previous  cost  eligibility  verifications.  This 
feature is a great support to the verification team for establishing a better planning 
during the next year verifications. Additionally, it also assists the new joiners of the 
verification team to get informed and updated concerning the previously performed 
verifications. 

The final version of the Toolkit can be found as Annex 2 to the present report. 

Monitoring Process for the Commission 

The Monitoring Process is a deliverable  that  aims to support DG MOVE in its monitoring 
competence and keep track of the NSAs’ work in performing their cost verifications. This 
deliverable is composed of two parts:  

•  The  “Overview  of  findings”  matrix  which  summarises  all  the  factual  findings 
identified by the NSAs during their verifications of determined and actual costs. This 
matrix will be filled in by the NSAs once DG MOVE has informed the respective NSAs 
for the initiation of its monitoring process. 

•  The  “Monitoring  Report”  which is  a set of  Microsoft  tools  combined together  in  a 
dashboard, aiming to provide an overview of the compliance  status  per NSA and 
per total NSAs analysed. This is a dashboard which:  

-  Ensures a harmonised approach across NSAs, 

-  Assists the EC to benchmark and monitor the performance of the NSAs while 

performing their verification procedures, and 

- 

Identifies  the  risks  in  different  cost  categories  which  can  be  applicable to 
different NSAs. 

The final result of this dashboard is to provide an overview of the NSAs' identified findings 
and their verification procedures performed, allowing a proper benchmark and monitoring 
of the NSAs cost eligibility verifications. 

The most important part will be filled in by the NSAs when providing their input, which will 
then  feed  the  different  sections  of  the  Monitoring  Report  dashboard.  DG  MOVE’s 
responsibility will consist only in collecting and aggregating the replies from the different 
NSAs into the dashboard. 

For fine-tuning the Monitoring Process, two pilot monitoring missions were foreseen. These 
pilot missions had the objective of gathering the data from verifications performed by the 
two NSAs in order to better-develop Monitoring Process for DG MOVE. EY reached out to 
26 different NSAs during the coaching sessions, inviting them to participate in any of the 
two pilots. Out of 10 NSAs that showed initial interest in participating in these pilots, EY 
received positive feedback from 3 NSAs which ultimately contributed with their comments.  

The deliverable related to the Monitoring process is attached to this report, see Annex 3.  

Training Material 

This deliverable is composed of two elements: 

•  Training Material, and 
•  e-Training  Material  which  is  an  e-module  that  assists  NSAs  for  learning  and 

refreshing their knowledge on how to perform cost eligibility verifications. 

11 

 
 
 
 
 
 
Training Material 

The  Verification  Programme  and  the  Training  Material  together  support  the  NSAs  in 
performing  the  cost  eligibility  verifications  that  form  part  of  their  oversight  and  control 
frameworks. They are a continuation of the work already started through the ‘Manual for 
the Verification of Air Navigation Services (ANS) Costs in the context of the Single European 
Sky Charging Scheme’ and complement this Manual by proposing a structured programme 
for verifications accompanied by step-by-step guidance. 

While the Verification Programme reflects all the procedures which need to be performed 
for  validating  the  eligibility  of  ANS  costs,  the  Training  Material  is  an  ensemble  of 
instructions  and  guidelines  for  the  NSAs  to  follow  on  how  and  why  the  NSAs  need  to 
perform  each  procedure  outlined  in  the  Verification  Programme.  The  Training  Material 
explains  each verification procedure by  providing not only examples from real cases.  In 
conjunction with the  Verification Programme Toolkit it  provides  the NSA with  7 tools  (in 
Microsoft  Excel  and  Microsoft Word)  to  get  acquainted  with the  practical  aspects  of the 
procedures to be performed. 

The need for this structured approach comes especially as a result of the recommendations 
issued  by  the  European  Court  of  Auditors  in  a  special  report  issued  in  2017,  which 
highlighted that the Commission and the NSAs should regularly conduct the inspections 
set  out  in  the  current  Single  European  Sky  (SES)  legislation,  covering  in  particular  the 
eligibility  of  costs  charged  and  their  allocation  between  en  route  and  terminal  charging 
zones. 

The final version of the Training Material which reflects all the comments received from DG 
MOVE, the NSAs, PRB and Eurocontrol, can be found as Annex 4 to the present report. 

e-Training Material 
In parallel to the Training Material and the supporting material for the coaching sessions, 
the  EY  team  developed  an  online  learning  module.  This  is  a  didactic  and  user-friendly 
module  which  will  allow  the  participants  to  the  coaching  programme  to  refresh  their 
knowledge as well as the new joiners to the NSAs’ verification teams to get introduced not 
only to the main legal requirements and key concepts of cost verifications but also to the 
Verification Programme and the Training Material. 

In  addition, the  e-Learning module  supports  the  NSAs’ verification  work  and  covers  the 
following key areas: 

•  Eligibility of determined and actual costs; 

•  Allocations towards the services and charging zones; 

•  Cost sharing mechanism; and, 

•  Deduction of other revenues. 

The module is highly interactive and contains different sets of questions which will test the 
knowledge accumulated at each step and phase. This e-Learning module can be accessed 
by the NSAs anytime and there is no expiry date for using it. The folder for accessing the 
e-Learning module can be found in Annex 5 to this report. 

Coaching 

This deliverable consists of two elements: 

coaching programme for NSAs to assist them in performing the verifications, and 

• 
•  an assistance period of 4 months, for the volunteering NSAs  

Coaching Programme 

One of the key contributions of this project towards the capacity-building of the Authorities, 
is the delivery of a coaching programme to the NSAs.  

12 

 
 
 
 
The  coaching  programme  was  split  into  10  sessions,  which  were  a  key  element  in  this 
project as they introduced the participants from different backgrounds and with different 
levels of experience on how to: 

•  Perform a cost eligibility verification (for both determined and actual costs), and 

•  Understand  and  use  the  Verification  Programme,  its  Toolkit  and  the  Training 

Material. 

EY  had  prepared  scenarios  for  grouping  the  NSAs  in  view  of  delivering  10  coaching 
sessions, which helped to maximise the opportunity for the largest number of NSAs to join 
the  sessions,  given  potential  geographical  and  timing  restrictions.  As  agreed  with  DG 
MOVE,  EY  held  the  10  coaching  sessions  remotely  due  to  COVID-19  travel  and  health 
security restrictions. The assumptions related to the COVID -19 travel and health security 
were presented in the NCP Performance Working Group 28 on 15/05/2020.  

EY  prepared  an  assessment  reviewing  risks  and  mitigation  measures  for  the  coaching 
programme identifying the participants for the 10 coaching sessions. Invitations were sent 
to 74 persons, with deadline of confirming their  participation by 30/06/2020. 56 people 
confirmed their participation. The coaching programme slides can be found in Annex 6 to 
the present report. 

The  10  remote  coaching  sessions  started  on  26/08/2020  and  were  delivered  during  4 
consecutive weeks, with the last session scheduled on 17/09/2020. A total number of 56 
participants joined the sessions, coming from 24 different NSAs. The list of the participating 
NSAs in these 10 coaching sessions is attached as Annex 7 to this report. 

At the start of each session the participants were asked to submit their expectations and 
at the end of the each coaching an evaluation form was completed to share their insights 
on the material prepared and the coaching session delivered. 

The  participants  showed  a  high  level  of  interest,  contributing  to  very  dynamic  and 
interactive sessions. They were highly satisfied with the content of the coaching sessions 
as well as with the coaching approach of exchanging experiences with different NSAs.  

Annex 8 summarises the participants’ feedback for the 10 delivered coaching sessions. 

Assistance Period 

During the coaching sessions held from 25/08/2020 until 17/09/2020, EY informed all the 
participating NSAs that the same team will be available to assist them during a period of 
4  months  for  any  potential  question,  issue  or  problem  concerning  the  cost  eligibility 
verifications. Additionally, this  information has  been  shared  with  the  participants  of  the 
NCP  Working  Group  29  on  29/10/2020  welcoming  any  request  from  the  NSAs’  side. 
Starting  from  25/08/2020  until  24/12/2020,  the  EY  team  composed  of  EU  auditors, 
financial consultants, subject-matter experts and IFRS experts was available for assisting 
the NSAs’ staff with any challenges faced concerning cost eligibility verifications. 

Additional Events 

Participation in the NCP events 
EY was invited by DG MOVE to participate in the following NSA Coordination Platform (NCP) 
Performance Plenary Meeting and Working Groups (WG) to introduce the project and its 
objectives to the participating NSAs. 

•  NCP Performance Plenary Meeting: 09 October 2019 

EY team participated in the NCP Performance Plenary Meeting organised in Helsinki, 
by  presenting  the  overall  objectives  of  the  project,  its  timeline.  Additionally,  a 
brochure describing the project was prepared, which was shared with NSAs during 
the NCP event. The brochure prepared and shared during the NCP Plenary Meeting 
is attached to this report as Annex 9. 

•  NCP Performance WG 27: 15 October 2019 

13 

 
 
 
 
During  the  NCP  Performance  WG  27  held  in  Brussels,  EY  had  the  possibility  to 
introduce to the participating NSAs the objectives  and deliverables of the project 
and  its  timeline.  Additionally,  EY  invited  the  NSAs  to  provide  their  cooperation 
through participating in the interviews, the 6 pilot verification missions and/or the 
2 pilot monitoring missions by sharing their experiences, thoughts and suggestions. 
An extract of the presentation showed during this event can be found in Annex 10 
of this report. 

•  NCP Performance WG 28: 15 May 2020 

EY team participated in the NCP Performance WG 28, during which the status of the 
project and key activities were presented. During the presentation, EY highlighted 
the  importance  of  the  NSAs’  collaboration  for  participating  to  the  two  remaining 
pilot verifications, and also their  attendance to the coaching sessions. An extract 
from the presentation is included in the Annex 11 to this report. 

During EY’s presentation, several NSAs confirmed their positive experience during 
the pilots organised earlier this year.  

NSAs were informed of the coaching sessions during which their active participation 
was  requested  beforehand.  EY informed  the  NSAs  that  due to  current  COVID-19 
situation under force majeure grounds, the coaching will be organized remotely, to 
which the NSAs responded positively. 

•  NCP Performance WG 29: 29 October 2020 

EY  team  participated  in  the  NCP  Performance Working Group 29,  during  which  a 
summary of the project objectives and outcomes  was presented. Additionally, EY 
introduced to the participants of the NCP WG 29, the outcome of NSAs’ feedback 
provided at the end of each coaching session. EY emphasised again the importance 
of how  the  NSAs’  active  participation  made  the  sessions  not only interactive  but 
was also essential in ensuring they were able to share their own experiences with 
other  NSAs.  During  the  NCP  event,  EY  and  DG  MOVE  highlighted  again  the 
importance  of  the  NSAs’  cooperation  for  implementing  the  two  remaining  pilots 
monitoring. An extract from the presentation is included in the Annex 12 to this 
report. 

14 

 
 
 
 
 
ANNEXES* 

•  Annex 1: Verification Programme 

•  Annex 2: Verification Programme Toolkit 

•  Annex 3: Monitoring process for the Commission  

•  Annex 4: Training Material  

•  Annex 5: e-Training Material  

•  Annex 6: NSA Coaching Programme 

•  Annex 7: List of the NSAs that participated in the coaching programme 

•  Annex 8: Feedback from the coaching programme  

•  Annex 9: NCP Plenary meeting: 09 October 2019 - Brochure 

•  Annex 10: NCP Performance WG 27: 15 October 2019 

•  Annex 11: NCP Performance WG 28: 15 May 2020 

•  Annex 12: NCP Performance WG 29: 29 October 2020 

*Note:  

For  accessing  the  Verification  Programme  Toolkit,  the  Monitoring  Report  for  the 
Commission  and the  e-Training  material  listed  respectively  in  Annex  2,  3  and  5,  please 
double click on the paperclip icons accordingly.  

The  full  list  of  annexes  can  be  also  found  in  Europa  Transport  Aviation  Studies  site, 
accessible through this link:  

https://ec.europa.eu/transport/modes/air/studies/air_en  

15 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annex 1: Verification Programme 

 
 
 
 
Assistance for  
the implementation of performance and  
charging schemes for the single  
European sky for oversight  
competences 

October 2020 
Verification Programme 

LEGAL NOTICE  
This deliverable was developed by EY Réviseurs d’Entreprises SRL upon request of the European 
Commission under the specific contract MOVE/E3/SER/2018-319/SI2.811081 for assistance for the 
implementation of performance and charging schemes for the single European sky for oversight 
competences. 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Table of Contents 

ABBREVIATIONS ........................................................................................................................ 3 

INTRODUCTION ........................................................................................................................... 5 

A.  DETERMINED COSTS ............................................................................................................ 7 

A.1  PLANNING PHASE................................................................................................................ 7 
DEFINE SCOPE AND OBJECTIVE ............................................................................................ 7 
REQUEST INFORMATION FROM THE SERVICE PROVIDER ........................................................ 8 
PERFORM PRELIMINARY RISK ASSESSMENT AND SAMPLING .................................................. 9 
A.2  EXECUTION PHASE ............................................................................................................ 11 
A.2.1 VERIFICATION OF COSTS BY NATURE (COST BASE ELIGIBILITY AND ACCURACY) ........... 11 
A.2.2 VERIFICATION OF THE BOOKINGS OF COSTS ON COST CENTRES ................................... 17 
A.2.3 VERIFICATION OF ALLOCATIONS ............................................................................... 18 
A.2.4 VERIFICATION OF SPECIFIC LINES .............................................................................. 18 
A.3  CONCLUSION PHASE .......................................................................................................... 24 
SUMMARISE DRAFT FINDINGS AND SHARE WITH ANSP ......................................................... 24 
FINALISE VERIFICATION REPORT ........................................................................................ 24 
FOLLOW UP ON THE IMPLEMENTATION OF FINDINGS ........................................................... 25 

B.  ACTUAL COSTS .................................................................................................................. 27 

B.1  PLANNING PHASE.............................................................................................................. 27 
DEFINE SCOPE AND OBJECTIVE .......................................................................................... 27 
REQUEST INFORMATION FROM THE SERVICE PROVIDER ...................................................... 27 
PERFORM PRELIMINARY RISK ASSESSMENT AND SAMPLING ................................................ 29 
B.2  EXECUTION PHASE ............................................................................................................ 32 
B.2.1 VERIFICATION OF COSTS BY NATURE (COST BASE ELIGIBILITY AND ACCURACY) ........... 32 
B.2.2 VERIFICATION OF THE BOOKINGS OF COSTS ON COST CENTRES ................................... 39 
B.2.3 VERIFICATION OF ALLOCATIONS ............................................................................... 39 
B.2.4 VERIFICATION OF SPECIFIC LINES, REVENUES AND ADJUSTMENTS .............................. 41 
B.3  CONCLUSION PHASE .......................................................................................................... 63 
SUMMARISE DRAFT FINDINGS AND SHARE WITH ANSP ......................................................... 63 
FINALISE VERIFICATION REPORT ........................................................................................ 63 
FOLLOW UP ON THE IMPLEMENTATION OF FINDINGS ........................................................... 64 

IFRS CONSIDERATIONS ............................................................................................................. 66 

1 

 
 
 
 
Abbreviations 

ANS 

ANSP 

ATM 

C 

Air navigation services 

Air navigation service provider 

Air traffic management 

Confirmed 

CAPEX 

Capital expenditure 

DG MOVE 

Directorate-General for Mobility and Transport 

E 

EC 

EU 

FTE 

GAAP 

GL 

IAASB 

IAS 16 

IAS 19 

IAS 38 

IFRS 

IFRS 15 

Exception 

European Commission 

European Union 

Full-time equivalent 

Generally accepted accounting principles 

General ledger 

International Auditing and Assurance Standards Board 

International Accounting Standard 16 – Property, Plant and Equipment 

International Accounting Standard 19 – Employee Benefits 

International Accounting Standard 38 – Intangible Assets 

International Financial Reporting Standards 

International Financial Reporting Standards 15 – Revenue from Contracts 
with Customers 

ISRS 

International Standard on Related Services 

ISRS 4400 

International Standard on Related Services - Agreed-Upon Procedures 
Engagements 

IT 

N.A. 

NSA 

OPEX 

P&L 

PRB 

RP 

RP2 

RP3 

Information technology 

Not applicable 

National supervisory authority  

Operating expenditure 

Profit and Loss 

Performance Review Body 

Reference Period 

Reference Period 2 

Reference Period 3 

3 

 
SES 

SESAR 

WACC  

Single European Sky 

Single European Sky ATM Research 

Weighted average cost of capital 

4 

 
Introduction 

The objective of the present document is to provide the national supervisory authorities 
(NSAs), as intended users, with a structured approach regarding the verification of the 
determined and actual costs for the provision of air navigation services (ANS). This 
verification should cover, in respect of each charging zone, all the costs included in the cost 
base pursuant to Article 22(7) of Implementing Regulation (EU) 2019/317 and Article 15(2) 
of Regulation (EC) 550/2004, namely:  

– 

– 

– 

the costs of ANS provision as broken down between the service provider 
entities concerned, 

the costs incurred by NSAs and/or qualified entities, and 

the other costs incurred by the relevant Member State and service provider in 
relation to the provision of air navigation services. 

However, the main focus should be on air navigation service providers (ANSPs) as they 
represent the biggest cost share in the cost bases for ANS charges. This document is designed 
as a working instrument for NSAs, to assist them in the realisation of compliance verifications 
in the context of their oversight attributions referred to in Article 2(1) and 2(2) of Regulation 
(EC) No 550/2004, as amended by Regulation (EC) No 1070/2009.  

This programme is intended to be read in conjunction with the accompanying Training 
Material, which provides explanations and guidance on the verification procedures included in 
the programme. The end users of the Verification Programme and Training Material need to 
have basic accounting background. 

For more details on the objectives of the programme, the legal basis for the verification and 
the approach to the verification, we refer to the Introduction section of the accompanying 
Training Material. 

The outcome of the Verification Programme is to allow NSAs to issue a Verification Report. 
Referring to Article 2(2) of Regulation (EC) 550/2004, the NSAs shall perform inspections and 
surveys, including onsite visits as appropriate. The air navigation service provider concerned 
are required to facilitate such work. 

This report will act as a formal summary of the identified exceptions during the NSAs onsite 
inspections and surveys for verifying the unit cost claimed. 

How to fill in the Verification Programme 

The verification programme can be filled-in as Microsoft Word document, or can be used in its 
Microsoft Excel version (refer to Tool 7). 

The reference column in the Verification Programme (e.g. A.1.2 etc.) contains references to 
the relevant sections of the Training Material. 

The column ‘Procedures’ includes the verification procedures to be performed. The 
procedures are accompanied by explanatory background and specific legal basis references. 

The ‘Factual finding’ column contains a relevant statement based on the SES regulations on 
which the NSAs will conclude on in the ‘Result’ column. 

5 

 
 
The ‘Result’ column in the sections of the Verification Programme reflects the conclusion on 
the ‘Factual finding’, after performing the ‘Procedures’: 

– 

– 

– 

‘C’ stands for ‘confirmed’ and means that the verifier can confirm the ‘Factual 
finding’ and, therefore, there is no exception or anomaly to be reported. 

‘E’ stands for ‘exception’ and means that the verifier carried out the procedures 
but cannot confirm the ‘factual finding’, or that the verifier was not able to 
carry out a specific procedure (e.g. because it was impossible to reconcile key 
information or data were unavailable). Normally, all cases in which exceptions 
are identified should be included by the NSA as factual findings in the 
verification report. 

‘N.A.’ stands for ‘not applicable’ and means that the Finding did not have to be 
examined by the verifier and the related Procedure(s) did not have to be carried 
out. The reasons of the non-application of a certain Finding must be obvious, 
for example if no cost was declared under a certain cost category then the 
related Finding(s) and Procedure(s) are not applicable. 

The greyed-out parts of the Verification Programme (sections Factual Finding and Result) 
mean that in these cases the indicated Procedures are steps in the audit cycle and will not 
result in any Factual Findings for the ANSP.  

How is the Verification programme built? 

The Verification programme is separated in two main parts, which relate to the type of costs 
being verified by the NSAs: 

a.  The first part covers the procedures needed to be performed for the verification of the 

Determined Costs, and 

b.  the second part details the procedures that needs to be performed during the 

verification of the Actual Costs. 

Accordingly, the frequency of the verifications to be performed for the determined and actual 
costs, differs based on the frequency the service providers declare them. Therefore, the 
determined costs need to be verified in respect of each reference period and whenever the 
cost bases for charges are set or revised as part of the performance plans, in conjunction with 
the performance targets in the key performance area of cost-efficiency. However, concerning 
the investments, this cost category needs to be reviewed on a yearly basis. If the service 
provider aims to add, cancel or replace any investment, these changes require the approval of 
the NSA, after consultation of airspace users' representatives. 

For Actual Costs the NSAs need to verify the cost eligibility and cost allocations on a yearly 
basis. 

6 

 
 
 
A. Determined costs 

A.1  Planning Phase 

Ref 

Procedures 

Factual finding 

A.1.1 

DEFINE SCOPE AND OBJECTIVE 

When starting to use the Verification Programme, the NSA is required to 
define and document a clear objective of the verification.  

The determined costs are used to establish, as part of the Performance 
Plans, the stable cost base for the charges to airspace users during each 
reference period (RP). The NSAs need to verify therefore that the inputs 
from the ANSPs for the determined costs comply with the financial principles 
for establishing the cost base and with the eligibility requirements as regards 
the elements of cost. As per the legal requirements, the NSA needs to 
consider that determined costs included in the cost bases for en route and 
terminal charges shall consist of staff costs, operating costs, depreciation 
costs, cost of capital and exceptional costs. Consequently, a full scope 
approach (i.e. the verification of all categories of costs by nature as reported 
in the reporting tables) is recommended.  

Legal basis:  

Implementing Regulation (EU) 2019/317 Recital 29, Art. 22.1, Art. 2.1, Art. 
1.3; Regulation (EC) No 550/2004 (as amended by Regulation (EC) No 
1070/2009) Art. 2.1, Art. 2.2, Art. 2.4, Art. 2.5, Art. 2.6, Art. 8.3 and 
Implementing Regulation (EU) 2017/373 Art. 5. 

Result 

(C / E / 
N.A.) 

7 

 
 
 
 
A.1.2 

REQUEST INFORMATION FROM THE SERVICE PROVIDER 

1)  The information 

requested for the 
preparation of the 
verification was 
provided. 

2)  The Pre-fieldwork 

Questionnaire for the 
preparation of the 
verification was duly 
filled in and provided. 

3)  Confirmation was 

given regarding the 
access of the NSA to 
further documentation 
and ANSP relevant 
personnel during the 
field work, as needed. 

NSAs are able to obtain from the ANSPs under their supervision, relevant 
data necessary for the purpose of ensuring the proper implementation and 
oversight of the SES Regulations. As per the legal requirements, the ANSPs 
should facilitate inspections and surveys carried out by the NSAs for the 
purpose of monitoring the implementation of the performance and charging 
schemes. 

The NSA can use a standardised list of documentation for the information to 
be requested from the ANSP (refer to Tool 2) and a dedicated Pre-fieldwork 
Questionnaire (refer to Tool 3), in order to obtain information such as: 

–  The financial assumptions of the ANSP on the basis of which the input 

for filling the determined costs of the Performance Plan was 
prepared, as regards costs by nature; 

–  The overview of investments, including new, foreseen investments; 

–  The overview of sources of revenue, including any public funds or EU 

financial assistance; 

–  The methodologies for cost allocation between charging zones. 

The NSA should secure the cooperation of the ANSP during the verification 
process, i.e. ensure that further documentation will be provided when 
requested and that access to relevant personnel is possible.  

Legal basis:  

Implementing Regulation (EU) 2019/317 Recital 7, Recital 15, Recital 30, 
Art. 4.1, Art. 4.2; Annex II, Point 3.3 (f), Point 3.3 (i), Point 3.3 (j), Point 4.1, 
Point 4.2; Annex VII, Point 2.1(f), Point 2.2(h), Point 2.2; Annex IX, Point 1, 
Point 4; Regulation (EC) No 550/2004 (as amended by Regulation (EC) No 
1070/2009) Art.2, Art. 10, Art. 12.1, Art. 12.1, Art. 12.2, Art. 12.3, Art. 
15.1 and Implementing Regulation (EU) 2017/373 Recital 1, Recital 4, Art. 
5, Annex II Subpart B, Subpart C, Annex III Subpart A, Subpart B, Subpart D. 

(Please 
complete 
with  

C, E, N.A) 

8 

 
 
 
A.1.3 

PERFORM PRELIMINARY RISK ASSESSMENT AND SAMPLING 

4)  The detailed cost 

Considering the overall objective of the verification, the amounts included in 
the cost base for the determined costs compared to the baseline and to the 
actual costs reported in the previous RP, as well as the elements from the 
Pre-fieldwork Questionnaire (Tool 3), the NSA is advised to identify the 
critical elements for achieving the performance targets and assess a level of 
risk for the verification which will determine the nature and extent of tests to 
be performed. For assessing the preliminary risks, NSAs should consider the 
following elements1: 

1.  Previous experiences with the service providers and their reporting 

tables; 

2.  Analyse the costs by nature declared by the ANSPs and the service 

providers and their variances compared with the previous years’ costs 
(risk of unusual items or transactions); and,  

3.  Document the preliminary risk assessment and the final decision of 
scoping the entities and cost categories for the verification process. 

There is a direct relationship between the critical elements for achieving the 
performance targets, the identified risks and the sample size. This 
relationship should to be considered when performing the Preliminary Risk 
Assessment. The risk assessment will impact the sample size in terms of 
number of items to be tested (i.e. the higher the risk level, the higher the 
number of items to be tested), therefore when determining the sample, the 
below steps2 need to be followed: 

–  Step 1: Use of professional judgement on internal controls as well as 

previous audit reports; 

breakdown generated 
from the ANSPs 
internal accounting is 
extracted from the 
regulated accounts for 
air navigation services 
and the amounts of 
the cost base (cost by 
nature or cost by 
service) declared in 
the reporting tables 
and reconciled with 
the detailed 
breakdown of costs 
extracted by the 
ANSPs accounting 
system or audited 
financial statements. 

5)  ANSP provided the 

necessary documents 
for the NSA to 
determine the sample. 

1 Please refer to the Training Material section A.1.3 for the detailed description of the Preliminary Risk Assessment steps. 
2 Please refer to the Training Material section A.1.3 for the detailed description of the Determining the Sample steps. 

9 

 
 
 
 
6)  The initial cost 

information provided 
leads to performance 
targets that are 
consistent with the 
Union-wide 
performance targets 
or the NSA and the 
ANSP will revise their 
performance plan to 
obtain targets that are 
consistent with the 
Union-wide 
performance targets. 

–  Step 2: Analyse the consolidated reporting table versus the individual 
ANSPs reporting tables and identify the total share of each service 
provider towards the consolidated total costs; 

–  Step 3: Identify the population of cost items included in the reporting 
tables (for example, the next level of detail such as the split by type of 
costs in each cost by nature); and  

–  Step 4: Determine the sample size and the sampled items. 

(Please refer to the Training Material Section A.1.3 for detailed information 
on the additional cross checks for determining the Preliminary Risk 
Assessment and determining the sample. Additionally, please refer to Tool 6 
of the Verification Programme Toolkit - Preliminary Risk Assessment and 
sampling template).  

The initial cost information provided by the ANSP to the NSA may lead to 
performance targets that are not consistent with the Union-wide 
performance targets. In that case, the NSA should liaise with the ANSP in 
respect of the revision of the performance plan with targets that are 
consistent with the Union-wide performance targets. 

Legal basis:  

Implementing Regulation (EU) 2019/317. Recital 34, Art. 22.1; Regulation 
(EU) No. 549/2004, Art. 4.2; Regulation (EU) No. 550/2004, Regulation (EC) 
No 1070/2009, Art. 3.1, Art. 6, and Implementing Regulation (EU) 
2017/373 Recital 1, Recital 4, Art. 5, Annex II Subpart B, Subpart C, Annex 
III Subpart A, Subpart B, Subpart D.  

10 

 
 
 
A.2  Execution Phase 

Ref 

Procedures 

Factual finding 

A.2.1 VERIFICATION OF COSTS BY NATURE (COST BASE ELIGIBILITY AND ACCURACY) 

Result 

(C / E / 
N.A.) 

A.2.1.1 

PROCEDURES TRANSVERSAL TO ALL COST CATEGORIES BY NATURE 

According to Article 22 of Implementing Regulation (EU) 2019/317, the cost 
base for en route and terminal charges shall consist of the determined costs 
related to the provision of air navigation services in the charging zone 
concerned. 

According to Article 10.2 (a) of Implementing Regulation (EU) 2019/317, the 
baseline value for determined costs shall be estimated by using the actual 
costs available for the preceding reference period and adjusted to take 
account of latest available cost estimates, traffic variations and their relation 
to costs. 

NSAs should verify that the established determined costs only comprise cost 
items that are eligible under the performance and charging scheme. 

It is assumed that the actuals used for the determined costs baseline were 
already verified by the NSA in the past, meaning that no additional 
verification is required in addition to the steps listed below. If they were not 
or not sufficiently verified, a verification of the actuals should also be 
performed in line with the procedures described for the actual costs. 

The NSA needs to apply the following verification procedures: 

–  Verify that the ANSP has separate accounts for ANS and non-ANS 

services. Costs that are not related to the provision of air navigation 
services should not be included in the cost base for setting the unit 
rate. Inter alia that concerns costs related to equipment not used for 
providing such services during a given year or costs incurred to 

7)  The actuals used for 
the determined costs 
baseline were already 
verified by the NSA in 
the past or were 
verified in the context 
of this verification of 
determined costs. 

8)  The ANSP has 

separate ANS and non-
ANS accounts. 

9)  The determined costs 

included in the 
reporting tables are 
consistent with the 
ANSP business plan or 
a justification with 
supporting evidence 
was provided by the 
ANSP. 

11 

 
 
 
 
decommission an asset, to write-off of the remaining asset value 
where the asset was no longer in use, or expenses to put into service 
a new asset in the following year; 

–  Verify the consistency between the determined costs included in the 

Reporting tables and the ANSP business plan (if any); 

–  Verify that there is an audit trail between the determined costs of the 
Reporting Period and the available actual costs for the preceding 
reference period, taking into account all the adjustments performed 
(the specific verification on each cost by nature are described in the 
next sections); 

–  Reconcile the values used for the determined costs baseline with the 

actual costs for the preceding reference period; 

–  Check that the determined costs do not include elements that are 

specifically not allowed under the Service Provision Regulation3, such 
as the cost of penalties imposed by Member States (according to 
Article 9 of the Framework Regulation4) and the cost of any corrective 
measures imposed by the Framework Regulation; 

–  Verify the restructuring costs included in the Performance Plan 

against their definition. 

Legal basis:  

Regulation (EC) No 549/2004, Art. 9; Regulation (EC) No 550/2004, Art. 
10.2 (a), Art. 10.2 (h), Art. 10.2 (i), Art. 12.1, Art. 12.3, Art. 15.2 (b), Art. 
15.2(c), Art. 15.2(d), 15.2(f), Art. 22.1, Art. 22.2, Art. 22.3, Art. 22.4, Art. 
22.5, Art. 22.7, Art. 31.6; Annex VII, Point 1.1, Point 1.2, Point 2.1(b), Point 
2.1(f); Annex IX, Point 1; Implementing Regulation (EU) 2019/317, Art. 
2.18, Art. 22, Art. 10.2(a), Annex II, Point 3.3 and Annex IV, Point 1.4. 

10) There is an audit trail 

between the 
determined costs of 
the Reporting Period 
and the available 
actual costs for the 
preceding reference 
period. 

11) The values used for 

the determined costs 
baseline were 
reconciled with the 
actual costs for the 
preceding reference 
period. 

12) The ANS determined 
costs do not include 
the cost of penalties or 
the cost of corrective 
measures imposed 
under Article 9 of the 
Framework Regulation 
(Reg. 549/2004). 

13) The restructuring 

costs included in the 
Performance Plan 
were verified against 
their definition. 

3 Regulation (EC) No 550/2004 of the European Parliament and of the Council of 10 March 2004 on the provision of air navigation services in the single 
European sky as amended by Regulation (EC) No 1070/2009. 
4 Regulation (EC) No 549/2004. 

12 

 
 
 
 
 
 
A.2.1.2 

PROCEDURES FOR STAFF COSTS 

According to the Article 22 of Implementing Regulation (EU) 2019/317, staff 
costs should include gross remuneration, overtime payments, and employers' 
contributions to social security schemes, as well as pension costs and costs 
of other benefits. Pension costs shall be calculated using prudent 
assumptions based on the applicable pension scheme or on national law, as 
appropriate. Those assumptions shall be specified in the Performance Plan. 

The NSA is responsible to check that the ANSP complies with these 
regulatory requirements. The following procedures are recommended to this 
end: 

–  Verify that the only elements included in the staff cost reported in the 
reporting tables are the ones listed in the regulatory framework; 

–  Check that only the ANS related staff costs were reported in the 

reporting tables; 

–  Verify that all adjustments performed to the staff costs rely on sound 

assumptions; 

–  Verify that the adjustments are correctly reflecting the assumptions; 

–  Perform an in-depth verification of pension costs, leveraging the 
performance plan details and any actuarial report available. 

Legal basis:  

14) Staff costs in the 

reporting tables only 
contain the elements 
listed in the regulatory 
framework. 

15) Only the staff costs 
related to ANS were 
included in the 
reporting tables. 

16) All adjustments 

performed to the staff 
costs rely on sound 
assumptions. 

17) The adjustments are 

correctly reflecting the 
assumptions. 

18) No issue was detected 
during the in-depth 
verification of pension 
costs. 

Implementing Regulation (EU) 2019/317, Recital 36, Art. 22.4; Annex II, 
Point 3.3 (f). 

A.2.1.3 

PROCEDURES FOR OPERATING COSTS OTHER THAN STAFF COSTS 

According to the Article 22 of Implementing Regulation (EU) 2019/317, 
operating costs other than staff costs should include the following elements: 
costs incurred for the purchase of goods and services used to provide ANS, 
including outsourced services, material, energy, utilities, rental of buildings, 
equipment and facilities, maintenance, insurance costs and travel expenses. 

19) Other operating cost 
reported in the 
reporting tables only 
contain the elements 
listed in the regulatory 
framework. 

13 

 
 
 
 
 
 
 
 
The NSA is responsible for checking that the ANSP complies with these 
regulatory requirements. The following procedures are recommended to this 
end: 

–  Verify that the only elements included in the other operating cost 

reported in the reporting tables are the ones listed in the regulatory 
framework; 

–  Check that only the ANS related other operating costs were reported 

in the reporting tables; 

–  Verify that all adjustments performed to the other operating costs 

rely on sound assumptions; 

–  Verify that the adjustments are correctly reflecting the assumptions. 

Legal basis:  

Implementing Regulation (EU) 2019/317, Art. 22.4; Annex II Point 2.2; 
Annex VII, Point 2.1(d); Regulation (EC) No 550/2004 as amended by 
Regulation (EC) No 1070/2009, Art. 15.2(a) 

20) Only the other 
operating costs 
related to ANS were 
included in the 
reporting tables. 

21) All adjustments 

performed to the 
other operating costs 
rely on sound 
assumptions. 

22) The adjustments are 

correctly reflecting the 
assumptions. 

A.2.1.4 

PROCEDURES FOR DEPRECIATION 

According to the legal framework, depreciation costs include costs related to 
the total fixed assets in operation for the purpose of providing ANS. The 
value of fixed assets shall be depreciated in accordance with their expected 
operating life, using the straight-line method applied to the costs of the 
assets being depreciated. Historical or current cost accounting shall be 
applied for the calculation of the depreciation. The methodology used to 
calculate depreciation costs shall not be altered during the duration of the 
depreciation and shall be consistent with the cost of capital applied, that is to 
say nominal cost of capital for historical cost accounting and real cost of 
capital for current cost accounting.  

Where current cost accounting is applied, the cost of capital shall not include 
inflation and the equivalent historical cost accounting figures shall also be 
provided to allow for comparison and assessment. 

23) Depreciation costs in 
the reporting tables 
only contain the 
elements allowed by 
the regulatory 
framework. 

24) Only the depreciation 
costs related to ANS 
were reported in the 
reporting tables. 

14 

 
 
 
 
 
 
In relation to depreciation, the NSA should perform the following procedures:  

–  Verify that the only depreciation cost included in the reporting tables 
are the ones allowed by the regulatory framework. This refers to the 
check that no cost is double charged to the airspace users through 
depreciation and through other operating costs and that no 
depreciation is accounted for assets under construction. 

–  Check that only the ANS related depreciation costs were reported in 

the reporting tables. 

–  Verify that the value of fixed assets is being depreciated in 

accordance with their expected operating life, using the straight-line 
method.  

–  Verify that the depreciation methodology used was consistent with 

the one applied to the cost of capital calculation.  

–  Verify that the methodology used to calculate depreciation costs was 

not altered during the duration of the depreciation. 

–  Verify that all adjustments performed to the other operating costs 

rely on sound assumptions; 

–  Verify that the adjustments are correctly reflecting the assumptions. 

Legal basis:  

Implementing Regulation (EU) 2019/317, Art. 22.4, 23; Annex VII, Point 
2.2(g); Annex IX, Point 1.2(e); Regulation (EC) No 550/2004 as amended by 
Regulation (EC) No 1070/2009, Art. 15.2(a). 

25) Fixed assets are 
depreciated in 
accordance with their 
expected operating 
life, using the straight-
line method. 

26) The methodology used 

to calculate 
depreciation costs was 
consistent with the 
one applied to the cost 
of capital. 

27) The methodology used 

to calculate 
depreciation costs was 
not altered during the 
duration of the 
depreciation. 

28) All adjustments 

performed to the 
depreciation costs rely 
on sound assumptions. 

29) The adjustments are 

correctly reflecting the 
assumptions. 

15 

 
 
 
 
 
 
A.2.1.5 

PROCEDURES FOR COST OF CAPITAL 

According to the legal framework, the cost of capital shall be equal to the 
product of the following elements: 

–  The sum of the average net book value of fixed assets in operation or 

under construction and possible adjustments to total assets 
determined by the national supervisory authority and used by the air 
navigation service provider and of the average value of the net 
current assets, excluding interest-bearing accounts, that are required 
for the purposes of providing air navigation services; 

–  The weighted average of the interest rate on debts and of the return 
on equity. For air navigation service providers without any equity 
capital, the weighted average shall be calculated on the basis of a 
return applied to the difference between the total of the assets 
referred to in point (i) and the debts. 

For the purpose of establishing the cost of capital, the factors to which 
weight is to be given shall be based on the proportion of financing through 
either debt or equity. The interest rate on debts shall be equal to the 
weighted average interest rate on debts of the air navigation service 
provider. The return on equity shall be the one provided in the Performance 
Plan for the reference period and shall be based on the financial risk incurred 
by the air navigation service provider. 

Where air navigation service providers incur costs from leasing fixed assets, 
those costs shall not be included in the calculation of cost of capital. he NSA 
need to apply the following verification procedures: 

–  Verify the eligibility and accuracy of all components of the cost of 
capital calculation by verifying the assumptions taken for each of 
them; 

–  Validate the cost of capital calculation; 

–  Verify that methodology applied to the cost of capital is consistent 

with the one used to calculate depreciation costs; 

30) The eligibility and 
accuracy of all 
components of the 
cost of capital 
calculation was 
verified. 

31) The calculation of the 
cost of capital was 
correct. 

32) The methodology 

applied to the cost of 
capital was consistent 
with the one used to 
calculate depreciation 
costs. 

33)  The interest rate on 

debts equals to the 
weighted average 
interest rate on debts 
of the air navigation 
service provider. 

16 

 
 
 
 
 
–  Perform an in-depth verification of interest rate and costs, leveraging 

the Performance Plan details. 

Legal basis:  

Implementing Regulation (EU) 2019/317, Art.4.1, Art. 22.4; Annex VII, Point 
2.1(i); Annex IX, Point 1.2(f); Regulation (EC) No 550/2004 as amended by 
Regulation (EC) No 1070/2009, Art. 15.2(a). 

A.2.1.6 

PROCEDURES FOR EXCEPTIONAL COSTS 

According to the legal framework, exceptional costs shall consist of non-
recurring costs relating to the provision of air navigation services, including 
any non-recoverable taxes and customs duties. 

In relation to the exceptional cost, the NSA should perform the following 
procedures: 

–  Verify that the only elements included in the exceptional costs 

reported in the reporting tables are the ones listed in the regulatory 
framework; 

–  Check that only the ANS related exceptional costs were reported in 

the reporting tables; 

–  Verify that all adjustments performed to the exceptional costs rely on 

sound assumptions; 

–  Verify that the adjustments are correctly reflecting the assumptions. 

Legal basis:  

Implementing Regulation (EU) 2019/317, Art. 22.4; Regulation (EC) No 
550/2004 as amended by Regulation (EC) No 1070/2009, Art. 15.2(b). 

A.2.2 VERIFICATION OF THE BOOKINGS OF COSTS ON COST CENTRES 

A.2.2.1 

PROCEDURES FOR COST CENTRES 

Cost centres are only used for actual costs in the ANSP finance/controlling 
software. Hence, no verification procedure is required for determined costs. 

34) Exceptional costs in 
the reporting tables 
only contain the 
elements allowed by 
the Regulatory 
Framework. 

35) Only the ANS related 
exceptional costs was 
reported in the 
reporting tables. 

36) All adjustments 

performed to the 
exceptional costs rely 
on sound assumptions. 

37) The adjustments are 

correctly reflecting the 
assumptions. 

17 

 
 
 
 
 
 
 
A.2.3 VERIFICATION OF ALLOCATIONS 

A.2.3.1 

PROCEDURES FOR ALLOCATIONS 

According to Regulation (EU) No. 550/2004 as amended by Regulation (EC) 
No 1070/2009, cross-subsidy is not allowed between en route and terminal 
charges and costs that pertain to both terminal and en route services shall be 
allocated in a proportional way between en route services and terminal 
services on the basis of a transparent methodology.  

The NSA is responsible for checking that the ANSP complies with these 
regulatory requirements. It can be done by performing the following 
procedures: 

–  Verify the allocation methodology for determined costs and analyse 

any significant changes in the allocation methodology and 
assumptions compared to the one implemented for the actuals of the 
preceding reference period; 

–  Verify that the allocation methodology is correctly reflected in the 

costs by service and costs by charging zone. 

Legal basis:  

Implementing Regulation (EU) 2019/317, Recital 31, Recital 32, Art. 4.1, 
Art.10.2 (b), Art.20.1, Art.20.2, Art.22.1, Art.22.4 , Art. 22.5, Art.22.6, 
Art. 22.7; Annex VII, Point 2.1(a), Point 2.1(c), Point 2.1(e); Annex IX, Point 
1.2(b); Regulation (EC) No 550/2004 as amended by Regulation (EC) No 
1070/2009, Art. 15.2(e) 

38) The allocation 

methodology for 
determined costs was 
verified. 

39) The allocation 

methodology is 
correctly reflected in 
the costs by service 
and costs by charging 
zone. 

A.2.4 VERIFICATION OF SPECIFIC LINES  

A.2.4.1 

PROCEDURES FOR INFLATION 

According to Article 26 of Implementing Regulation (EU) 2019/317, for each 
year of the reference period, the determined costs included in the cost bases 
for en route and terminal charges of year n expressed in nominal terms shall 
be adjusted on the basis of the difference in percentage between the actual 
inflation index and the forecast inflation index for that year n and included as 
an adjustment for the calculation of the unit rate for year n+2. The 

40) The forecast inflation 
percentage used by 
the ANSP is correct. 

18 

 
 
 
 
determined costs referred to in the third subparagraph of Article 22(1), and 
the determined costs referred to in points (c) and (d) of Article 22(4) where 
historical cost accounting is applied, shall not be subject to any inflation 
adjustment. 

The NSA should perform the following procedure: 

–  Verify that the ANSP used the correct forecast inflation percentage, 
i.e. the one from the International Monetary Fund as foreseen by the 
legal framework. 

Legal basis: 

Implementing Regulation (EU) 2019/317, Art. 2 (11), Art. 26 

A.2.4.2 

PROCEDURES FOR SPECIFIC COST ITEMS  

No general verification procedures apply to these specific cost items. The 
specific procedures for each cost item are covered in their dedicated sections 
below. 

A.2.4.2.1  PROCEDURES FOR SPECIFIC COST ITEMS – COSTS OF NEW AND EXISTING 

41) The eligibility of 

INVESTMENTS  

The new and existing investments are defined in Article 2(15) of 
Implementing Regulation (EU) 2019/317. This term refers to the acquisition, 
development, replacement, upgrade or leasing of fixed assets where 
depreciation costs, cost of capital, or in the case of leasing, operating costs, 
for that investment are incurred during the reference period covered by the 
performance plan. 

Annex II (Template for Performance Plans) describes more precisely what 
information the Performance Plan shall include for the new and existing 
investments in terms of costs as well as description and justification. 

The NSA is responsible for checking that the ANSP complies with these 
regulatory requirements. The following procedures are recommended to this 
end: 

–  Verify the eligibility of determined costs included; 

determined costs 
included was verified. 

42) The total determined 
cost of new and 
existing investment 
provided in Reporting 
Table 1 was reconciled 
with the detail by 
investment/asset from 
the investment plan 
included in the 
Performance Plan. 

19 

 
 
 
 
 
 
 
–  Reconcile the total determined cost of new and existing investment 
provided in Reporting Table 1 with the detail by investment/asset 
from the investment plan included in the Performance Plan; 

Legal Basis: 

Implementing Regulation (EU) 2019/317, Art. 2(15), Art. 4.1(c), Art.10.2(i), 
Art. 18.1(ii), Annex II 2.2(b), Annex VII.2.2. 

A.2.4.2.2  PROCEDURES FOR SPECIFIC COST ITEMS – COSTS OF COMPETENT 

AUTHORITIES, QUALIFIED ENTITIES AND EUROCONTROL 

According to the third subparagraph of Article 22(1) Member States may 
decide to include in the cost base the following determined costs incurred in 
relation to the provision of air navigation services, in accordance with the 
second sentence of point (b) of Article 15(2) of Regulation (EC) No 550/2004 
and Regulation (EC) No 1070/2009: 

–  Determined costs incurred by competent authorities; 

–  Determined costs incurred by the qualified entities referred to in 

Article 3 of Regulation (EC) No 550/2004; 

–  Determined costs stemming from the Eurocontrol International 

Convention relating to cooperation for the safety of air navigation of 
13 December 1960 as last amended. 

The NSA is responsible to check that the costs claimed comply with these 
regulatory requirements. The following procedures are recommended to this 
end: 

–  Verify that the authorities and entities for which costs are included in 
the cost base fulfil all the requirements set out in the Regulation5; 

–  Verify the eligibility of the determined costs included in the cost base. 

43) The authorities and 
entities for which 
costs are included in 
the cost base fulfil all 
the requirements set 
out in the Regulation. 

44) The determined costs 
included in the cost 
base are eligible. 

5 The list of requirements is provided in the Training Material. 

20 

 
 
 
 
 
 
Legal Basis: 

Implementing Regulation (EU) 2019/317, Art. 22(1) and (2), Recital 29, 
Regulation (EC) 550/2004 and Regulation (EC) No 1070/2009, Art. 3. 

A.2.4.2.3  PROCEDURES FOR SPECIFIC COST ITEMS – PENSION COSTS 

The verification of determined pension costs is fully covered in the section 
A.2.1.2 PROCEDURES FOR STAFF COSTS. Hence, no additional verification 
procedure is required here. 

A.2.4.2.4  PROCEDURES SPECIFIC COST ITEMS – INTEREST RATES 

The verification of the determined interest cost is fully covered in the section 
A.2.1.5 PROCEDURES FOR COST OF CAPITAL. Hence, no additional 
verification procedure is required here.  

A.2.4.2.5  PROCEDURES FOR SPECIFIC COST ITEMS – NATIONAL TAXATION LAW 

OR OTHER NEW COST ITEMS 

The NSA are responsible for verifying these costs, performing the following 
verification procedures: 

–  Verify that the assumptions described in the Performance Plans are 

accurate;  

–  Reconcile the determined costs presented in the Performance Plan 

with the detail of the reporting tables. 

Legal Basis: 

Implementing Regulation (EU) 2019/317, Art. 22, Regulation (EU) 391/2013 
Art. 7. 

A.2.4.3 

PROCEDURES FOR OTHER REVENUES  

ANSPs are not required to forecast their future grants and revenues. No 
determined revenue is to be entered in the reporting tables. Hence, no 
verification procedure is required. 

45) The assumptions 
described in the 
Performance Plans are 
accurate. 

46) The determined costs 
identified in the 
Performance Plans 
were reconciled with 
the costs presented in 
the reporting tables. 

21 

 
 
 
 
 
 
 
 
 
A.2.4.3.1  PROCEDURES FOR OTHER REVENUES ART. 25(2)(i) – FINANCIAL SUPORT 

FROM UNION ASSISTANCE PROGRAMMES 

ANSPs are not required to forecast their future grants and revenues. No 
determined revenue is to be entered in the reporting tables. Hence, no 
verification procedure is required. 

A.2.4.3.2  PROCEDURES FOR OTHER REVENUES ART. 25(2)(i) – OTHER PUBLIC 

FUNDS OBTAINED FROM PUBLIC AUTHORITIES  

ANSPs are not required to forecast their future grants and revenues. No 
determined revenue is to be entered in the reporting tables. Hence, no 
verification procedure is required. 

A.2.4.3.3  PROCEDURES FOR OTHER REVENUES ART. 25(2)(i) – REVENUE FROM 

COMMERCIAL ACTIVITIES  

ANSPs are not required to forecast their future grants and revenues. No 
determined revenue is to be entered in the reporting tables. Hence, no 
verification procedure is required. 

A.2.4.3.4  PROCEDURES FOR OTHER REVENUES ART. 25(2)(i) – REVENUE FROM 

CONTRACTS CONCLUDED BETWEEN ANSPs AND AIRPORT OPERATORS 

ANSPs are not required to forecast their future grants and revenues. No 
determined revenue is to be entered in the reporting tables. Hence, no 
verification procedure is required. 

A.2.4.4 

PROCEDURES FOR COMMON PROJECTS 

According to Article 22(1) of Implementing Regulation (EU) 2019/317, 
determined costs stemming from new air traffic management (ATM) systems 
and major overhauls of existing ATM systems shall only be included in the 
cost base where those systems are consistent with the implementation of the 
European ATM Master Plan, and, in particular, with the common projects 
referred to in Article 15a(3) of Regulation (EC) No 550/2004 as amended by 
Regulation (EC) No 1070/2009. 

According to Art. 15a of Regulation No 550/2004 as amended by Regulation 
(EC) No 1070/2009, common projects can help with the successful 

47) All common projects 

from the Performance 
Plan were included in 
the determined 
investment costs. 

48) The eligibility of costs 
included was verified. 

22 

 
 
 
 
 
 
 
 
 
 
 
49) The updated 

investment plan was 
verified in case an 
ANSP intends to add, 
cancel or replace 
major investments 
during the reference 
period. 

implementation of the ATM Master Plan and which are related to network-
related functions, improved the overall performance of air traffic 
management and air navigation services in Europe. These common projects 
might be eligible for EU funding within the multiannual financial framework. 

According to Implementing Regulation (EU) No 409/2013, a common project 
aims to deploy in a timely, coordinated and synchronised way ATM 
functionalities that are mature for implementation and that contribute to the 
achievement of the essential operational changes identified in the European 
ATM Master Plan. Only ATM functionalities requiring synchronised 
deployment and contributing significantly to Union-wide performance targets 
are to be included in a common project. 

Implementing Regulation (EU) No 716/2014 identifies a first set of ATM 
functionalities to be deployed in timely, coordinated and synchronised way so 
as to achieve the essential operational changes stemming from the European 
ATM Master Plan. These functionalities are described in detail in the annex of 
the regulation. 

The costs related to the common projects are thus included in the new and 
existing investments of ANSP while the related grants obtained are included 
in the revenues received from Union assistance programmes.  

The NSA is responsible to check the compliance with the above requirements. 
The following procedures are recommended to this end: 

–  Verify that only common projects from the Performance Plan were 

included in the determined investment costs; 

–  Verify the eligibility of determined costs included; 

–  Verify the updated investment plan in case an ANSP intends to add, 
cancel or replace major investments during the reference period. 

Legal Basis: 

Regulation (EC) No 550/2004 as amended by Regulation (EC) No 
1070/2009, Art. 15a; Implementing Regulation (EC) No 409/2013; 
Implementing Regulation (EC) No 2019/317, Art. 22, Annex II Point 2.2(iv), 
Point 4.2, Annex V, Annex VII Point 2.1(j), Regulation (EC) No 716/2014. 

23 

 
 
A.3  Conclusion Phase 

Ref 

Procedures 

Factual finding 

A.3.1 

SUMMARISE DRAFT FINDINGS AND SHARE WITH ANSP 

At the end of the fieldwork, NSAs should prepare a summary of the findings 
identified, quantify them (if possible) and draft the verification report.  

The purpose of sharing a draft verification report is to: 

–  Formally communicate to the ANSP the findings identified following 

the verification,  

– 

– 

Introduce to the ANSPs the impact of the identified exceptions,  

Introduce to ANSPs the sanctions and the corrective measures 
imposed for each of the exceptions identified. 

–  Provide the opportunity to ANSPs to comment and deliver further 

supporting evidence. 

Legal basis:  

Regulation (EU) No. 550/2004 as amended by Regulation (EC) No 
1070/2009, Art. 7.7, Art. 15, Regulation (EU) No. 549/2004, Art.9 and 
Implementing Regulation (EU) 2017/373 Recital 1, Recital 4, Art. 5, Annex II 
Subpart C, Annex III Subpart B. 

A.3.2 

FINALISE VERIFICATION REPORT 

Following the provision by the ANSP of their comments and, or additional 
supporting evidences on the raised findings and recommendations, the NSA 
needs to assess whether the findings will be waived, reviewed or kept 
including the respective deadlines and corrective measures proposed.  

The final verification report, as approved internally by the NSA, should also 
be communicated formally to the ANSP. 

50) The supporting 

evidence obtained 
after the execution 
phase has been tested 
by the NSA. 

Result 

(C / E / 
N.A.) 

24 

 
 
 
 
Ref 

Procedures 

Factual finding 

The final report should reflect the official response obtained from the ANSPs 
and if it did or did not impact the findings. The final report should be shared 
with the European Commission. 

Legal basis:  

Regulation (EU) No. 550/2004, as amended by Regulation (EC) No 
1070/2009, Art. 7.7, Art. 15, Regulation (EU) No. 549/2004, Art.9 and 
12(1) and Implementing Regulation (EU) 2017/373 Recital 1, Recital 4, Art. 
5, Annex II Subpart B, Subpart C, Annex III Subpart A, Subpart B, Subpart D. 

51) The supporting 

evidence obtained 
after the execution 
phase is considered 
relevant, sufficient 
and reliable. 

52) The feedback and the 
additional supporting 
evidence provided by 
the ANSPs confirm the 
procedures that were 
previously identified 
as “Exceptions” in the 
draft report.  

A.3.3 

FOLLOW UP ON THE IMPLEMENTATION OF FINDINGS 

While ensuring that the performance targets included in the Performance 
Plans are consistent with the Union-wide performance targets and 
completing the final verification report, part of the job of the NSAs will be to 
keep track of the findings. 

A database of the finalised findings, the respective cost category, the raised 
recommendations by the NSA and their status of implementation from the 
ANSPs, should be fed continuously with information after each verification 
process. 

This database should be updated reflecting the actual status with regards to 
the implementation of the findings. Keeping good records of the verifications 
performed can help to comply with Art. 7.7 of Regulation (EU) No 550/2004, 
where it states that national supervisory authorities shall monitor compliance 

Result 

(C / E / 
N.A.) 

25 

 
 
 
 
 
Ref 

Procedures 

Factual finding 

with the common requirements. Additionally, it may also help to answer 
better the queries from the European Commission in their monitoring review.  

Legal basis:  

Regulation (EU) No. 549/2004, Art.9. Regulation (EU) No. 550/2004, 
Regulation (EC) No 1070/2009, Art. 7.7, Art. 15, Regulation (EU) No. 
549/2004, Art.9 and Regulation (EU) 2017/373 Recital 1, Recital 4, Art. 5, 
Annex II Subpart B, Subpart C, Annex III Subpart A, Subpart B, Subpart D. 

Result 

(C / E / 
N.A.) 

26 

 
B. Actual costs 

B.1  Planning Phase 

Ref 

Procedures 

Factual finding 

B.1.1 

DEFINE SCOPE AND OBJECTIVE 

When starting to use the Verification Programme, the NSA is required to 
define and document a clear objective of the verification.  

As per the legal requirements, the NSA needs to consider that costs included 
in the cost bases for en route and terminal charges shall consist only of staff 
costs, operating costs, depreciation costs, cost of capital and exceptional 
costs and that all provisions defined in the Regulation for determined costs 
shall apply mutatis mutandis to the establishment of actual costs. 
Consequently, a full scope approach (i.e. the verification of all categories of 
actual costs) is recommended.  

Legal basis:  

Implementing Regulation (EU) 2019/317, Art. 1.3, Art. 22.1, Art.23; 
Regulation (EC) No 550/2004; Regulation (EC) No 1070/2009, Art. 2.1, Art. 
2.2, Art. 2.3, Art. 2.4, Art. 2.5, Art. 2.6, Art. 8.3 and Implementing 
Regulation (EU) 2017/373 Recital 1, Recital 4, Art. 5. 

B.1.2 

REQUEST INFORMATION FROM THE SERVICE PROVIDER 

53) The information 

NSAs are able to obtain from the ANSPs under their supervision, relevant 
data necessary for the purpose of ensuring the proper implementation and 
oversight of the SES Regulations. As per the legal requirements, the ANSPs 
should facilitate inspections and surveys carried out by the NSAs for the 
purpose of monitoring the implementation of the performance and charging 
schemes. The NSA can use a standardised list of documentation for the 
information to be requested from the ANSP (refer to Tool 2) and a dedicated 

requested for the 
preparation of the 
verification was 
provided. 

Result 

(C / E / 
N.A.) 

27 

 
 
 
 
Ref 

Procedures 

Factual finding 

54) The Pre-fieldwork 

Questionnaire for the 
preparation of the 
verification was duly 
filled in and provided. 

Pre-fieldwork Questionnaire (refer to Tool 3), in order to obtain information 
such as: 

–  Description of the reported actual costs and the difference between 

those costs and the determined costs; 

–  The breakdown of the actual costs of common projects per individual 
project and all the public funds granted and received yearly from 
Member States or EU which are to be monitored using also Annex IX 
Table 4 and to be eventually deducted from the unit rate as ‘other 
revenue’; 

–  Justification of the difference between the determined and the actual 

costs of new and existing investments, as well as the difference 
between the planned and the actual date of entry into operation of the 
fixed assets financed by those investments for each year of the 
reference period; 

–  Description of the investment projects added, cancelled or replaced 

during the reference period. 

The NSA should secure the cooperation of the ANSP during the verification 
process, i.e. ensure that further documentation will be provided when 
requested and that access to relevant personnel is possible.  

Legal basis:  

Implementing Regulation (EU) 2019/317 Recital 7, Recital 30, Art. 4.1, Art. 
4.2; Annex II, Point 3.3 (f), Point 3.3 (i), Point 3.3 (j), Point 4.1, Point 4.2; 
Annex VII, Point 2.1(f). Point 2.2(h), Point 2.2(a), Point 2.2(c), Point 2.2(d), 
Point 2.2(e); Regulation (EC) No 550/2004 as amended by Regulation (EC) 
No 1070/2009, Art. 10, Art. 12.1, Art. 12.2, Art. 12.3, Art. 15.1 and 
Implementing Regulation (EU) 2017/373 Recital 1, Recital 4, Art. 5, Annex II 
Subpart B, Subpart C, Annex III Subpart A, Subpart B, Subpart D. 

Result 

(C / E / 
N.A.) 

28 

 
 
 
 
Ref 

Procedures 

Factual finding 

B.1.3 

PERFORM PRELIMINARY RISK ASSESSMENT AND SAMPLING 

55) The detailed cost 

Result 

(C / E / 
N.A.) 

The NSA should determine the focus of its testing areas for the verification 
on the basis of a risk assessment. To that end, it should consider the overall 
objective of the verification, the amounts included in the cost base for the 
actuals, the corresponding determined costs, the actual costs reported in the 
previous RP, and the elements from the Pre-fieldwork Questionnaire (Tool 3). 

A. For the verification of the eligibility of costs, referring to the total costs 
reported in Table 1 

For assessing the preliminary risks, NSAs should consider the following 
elements: 

1.  Previous experiences with the service providers and their reporting 

tables; 

2.  Analyse the costs by nature declared by the ANSPs and the service 

providers and their variances compared with the previous years’ costs 
(risk of unusual items or transactions); and,  

3.  Document the preliminary risk assessment and the final decision of 
scoping the entities and cost categories for the verification process. 

There is a direct relationship between the identified risks and the sample size 
and this relationship should to be considered when performing the 
Preliminary Risk Assessment. The risk assessment will impact the sample size 
in terms of number of items to be tested (i.e. the higher the risk level, the 
higher the number of items to be tested), therefore when determining the 
sample, the below steps need to be followed: 

breakdown generated 
from the ANSPs 
internal accounting is 
extracted from the 
regulated accounts for 
air navigation 
services; the amounts 
of the cost base (cost 
by nature or cost by 
service) declared in 
the reporting tables 
reconcile with the 
detailed breakdown of 
costs extracted by the 
ANSPs accounting 
system or audited 
financial statements. 

29 

 
 
Ref 

Procedures 

Factual finding 

56)  ANSP provided the 

necessary documents 
for the NSA to 
determine the sample. 

Step 1: Use of professional judgement on internal controls as well as previous 
audit reports; 

Step 2: Analyse the consolidated reported table versus the individual ANSPs 
reporting tables and identify the total share of each service provider in the 
consolidated total costs; 

Step 3: Identify the population of cost items included in the reporting tables 
(for example, the next level of details such as the split by type of costs in 
each cost by nature); and  

Step 4: Determine the sample size and the sampled items. 

B. For the verification of the adjustments resulting from the unforeseen 
changes reported as per the requirements of the Article 28 of Implementing 
Regulation (EU) 2019/317 and reflected in Reporting Table 2B. 

The NSAs can verify those adjustments incurred that have significant 
variance between the determined and the actual costs. 

C. For the verification of the cost allocations: 

NSAs can start the verification of the cost allocations based on the 
information they have at hand during the second part of the prior year. Once 
the service providers will have the finalized data, the NSAs can verify during 
the fieldwork of the current year only the differences from the last 
verification performed during the second part of year n-1. 

(Please refer to the Training Material Section A.1.3 for detailed information 
on the additional cross checks for determining the Preliminary Risk 
Assessment and determining the sample. Additionally, please refer to Tool 6 
of the Verification Programme Toolkit - Preliminary Risk Assessment and 
sampling template). 

Result 

(C / E / 
N.A.) 

30 

 
 
 
Ref 

Procedures 

Factual finding 

Legal basis:  

Implementing Regulation (EU) 2019/317. Recital 34, Art. 22.1, Art. 28; 
Regulation (EU) No. 549/2004, Art. 4.2; Regulation (EU) No. 550/2004 as 
amended by Regulation (EC) No 1070/2009, Art. 3.1, Art. 6, and 
Implementing Regulation (EU) 2017/373 Recital 1, Recital 4, Art. 5, Annex II 
Subpart B, Subpart C, Annex III Subpart A, Subpart B, Subpart D. 

Result 

(C / E / 
N.A.) 

31 

 
B.2  Execution Phase 

Ref 

Procedures 

Factual finding 

B.2.1 VERIFICATION OF COSTS BY NATURE (COST BASE ELIGIBILITY AND ACCURACY) 

B.2.1.1 

PROCEDURES TRANSVERSAL TO ALL COST CATEGORIES BY NATURE 

According to Article 12 of Regulation (EC) No 550/2004 as amended by 
Regulation (EC) No 1070/2009, the NSA has to verify that the ANSP has 
prepared its financial accounts and that these have been audited. The 
financial statements need to comply with the international accounting 
standards adopted by the European Union. 

The NSA further needs to gain confidence that, when providing a bundle of 
services, ANSPs identify and disclose the costs and income deriving from 
ANS, broken down in accordance with the charging scheme for air navigation 
services and, where appropriate, keep separate accounts for other, non-ANS, 
as they would be required to do if the services in question were provided by 
separate undertakings. 

Thus, the NSAs need to check the audit trail between the Financial 
Statements of the ANSP, audited by an external financial auditor, the 
regulated accounts (ANS cost) and the reporting tables submitted to the 
Commission, by performing various procedures: 

–  Verify that the ANSP’s financial statements were subject to an 

independent financial audit and were published; 

–  Verify that the ANSP has separate accounts for ANS and non-ANS 

services. Costs that are not related to the provision of regulated air 
navigation services or not incurred in the year should not be included 
in the cost base for setting the unit rate. Inter alia that concerns costs 

57) The ANSP’s financial 
statements were 
subject to an 
independent financial 
audit and were 
published. 

58) The ANSP has 

separate ANS and non-
ANS accounts. 

59) The grouping/mapping 
of the ANS accounts 
corresponds to the 
costs by nature 
reported. 

60) The amounts reported 
in the reporting tables 
by the ANSP reconcile 
to the ANS separate 
accounts and to the 
audited Financial 
Statements. 

Result 

(C / E / 
N.A.) 

32 

 
 
 
 
 
Ref 

Procedures 

Factual finding 

Result 

(C / E / 
N.A.) 

61) The ANS costs do not 
include the cost of 
penalties or the cost of 
corrective measures 
imposed under the 
Framework 
Regulation. 

related to equipment not used for providing such services during a 
given year or costs incurred to decommission an asset, to write-off of 
the remaining asset value where the asset was no longer in use, or 
expenses to put into service a new asset in the following year; 

–  Review the grouping/mapping of the ANS costs into the cost by 

nature categories in the reporting tables;  

–  Reconcile the cost by nature amounts reported in the Reporting Table 

1 by the ANSP to the ANS separate accounts and to the audited 
Financial Statements; 

–  Check that the reported costs do not include elements that are 

specifically not allowed under the Service Provision Regulation6, such 
as the cost of penalties imposed by Member States (according to 
Article 9 of the Framework Regulation7) and the cost of any corrective 
measures imposed by the Framework Regulation. 

Legal basis:  

Regulation (EC) No 549/2004, Art. 9; Regulation (EC) No 550/2004 as 
amended by Regulation (EC) No 1070/2009, Art. 12.1, Art. 12.3, Art. 15.2 
(b), Art. 15.2(c), Art. 15.2(d), 15.2(f), Art. 22.1, Art. 22.2, Art. 22.3, Art. 
22.4, Art. 22.5, Art. 22.7, Art. 23, Art. 28.1, Art. 28.2, Art. 28.3, Art. 28.4, 
Art. 28.5, Art. 28.6, Art. 31.6; Implementing Regulation (EU) 2019/317 
Annex VII, Point 1.1, Point 1.2, Point 2.1(b), Point 2.1(f). 

6 Regulation (EC) No 550/2004 of the European Parliament and of the Council of 10 March 2004 on the provision of air navigation services in the single 
European sky as amended by Regulation (EC) No 1070/2009. 
9 Regulation (EC) No 549/2004. 

33 

 
 
 
Ref 

Procedures 

Factual finding 

62)  Staff costs in the 

reporting tables only 
contain the elements 
listed in the 
Regulatory 
Framework. 

63)  For the sample tested, 
only the ANS related 
Staff costs were 
reported in the 
reporting tables.  

64)  No issue were 

detected during the in-
depth verification of 
pension costs was 
performed. 

B.2.1.2 

PROCEDURES FOR STAFF COSTS 

According to the legal framework, Staff costs include gross remuneration, 
overtime payments, and employers' contributions to social security schemes, 
as well as pension costs and costs of other benefits. Pension costs shall be 
calculated using prudent assumptions based on the applicable pension 
scheme or on national law, as appropriate. Those assumptions shall be 
specified in the Performance Plan. 

In relation to staff only partly (or not at all) involved in providing ANS, the 
NSA needs to analyse the basis for the allocation of Staff costs between ANS 
and non-ANS as well as between charging zones, and test how this is put in 
practice. For this purpose, the NSA is recommended to perform the following 
procedures: 

–  Verify that the only elements included in the Staff cost reported in the 
reporting tables are the ones listed in the regulatory framework. This 
is done by reconciling the staff costs included in the cost base with the 
statutory accounts; 

–  For a sample of Staff costs, check whether the costs have been 

correctly shared between ANS and non-ANS. This is done by reviewing 
extracts from the timesheet reporting system, employment contracts 
or calculations in case of other apportionment basis used; 

–  Perform an in-depth verification of pension costs, leveraging any 
actuarial report available (especially in the case of other pension 
schemes than the state plans). 

Legal basis:  

Implementing Regulation (EU) 2019/317, Art. 22.4, Art. 23; Annex II, Point 
3.3 (f) 

Result 

(C / E / 
N.A.) 

34 

 
 
 
 
Ref 

Procedures 

Factual finding 

B.2.1.3 

PROCEDURES FOR OPERATING COSTS OTHER THAN STAFF COSTS 

According to the legal framework, Operating costs other than staff costs 
include the following elements: costs incurred for the purchase of goods and 
services used to provide ANS, including outsourced services, material, 
energy, utilities, rental of buildings, equipment and facilities, maintenance, 
insurance costs and travel expenses. Where such costs have to be 
capitalised, they have to be depreciated and not be declared as other 
operating costs.  

In order to verify the operating costs, NSA should perform the following 
procedures:  

–  Verify that the only elements included in the other operating cost 

reported in the reporting tables are the ones listed in the regulatory 
framework; 

–  For a sample of other operating costs, check whether the costs have 

been correctly shared between ANS and non-ANS. 

Legal basis:  

Implementing Regulation (EU) 2019/317, Art. 22.4, Art. 23; Annex VII, Point 
2.1(d); Regulation (EC) No 550/2004 as amended by Regulation (EC) No 
1070/2009, Art. 15.2(a) 

65) Other operating costs 
in the reporting tables 
only contain the 
elements listed in the 
Regulatory 
Framework. 

66) For the sample tested, 
only the regulated 
ANS related other 
operating costs were 
reported in the 
reporting tables. 

B.2.1.4 

PROCEDURES FOR DEPRECIATION 

According to the legal framework, depreciation costs include costs related to 
the total fixed assets in operation for the purpose of providing ANS. The 
value of fixed assets shall be depreciated in accordance with their expected 
operating life, using the straight-line method applied to the costs of the 
assets being depreciated. Historical or current cost accounting shall be 

67) Depreciation costs in 
the reporting tables 
only contain the 
elements allowed by 
the Regulatory 
Framework. 

Result 

(C / E / 
N.A.) 

35 

 
 
 
 
Ref 

Procedures 

Factual finding 

applied for the calculation of the depreciation. The methodology used to 
calculate depreciation costs shall not be altered during the duration of the 
depreciation and shall be consistent with the cost of capital applied, that is to 
say nominal cost of capital for historical cost accounting and real cost of 
capital for current cost accounting.  

Where current cost accounting is applied, the cost of capital shall not include 
inflation and the equivalent historical cost accounting figures shall also be 
provided to allow for comparison and assessment. 

In relation to depreciation, the NSA should perform the following procedures:  

–  Verify that the only depreciation cost included in the reporting tables 
are the ones allowed by the regulatory framework. This refers to the 
check that no cost is double charged to the airspace users through 
depreciation and through other operating costs nor that no 
depreciation is accounted for assets under construction; 

–  For a sample of depreciation costs, check whether the costs have 
been correctly shared between ANS and non-ANS. This is done by 
analysing the basis for the separation and possible allocation of 
depreciation costs (based on the assets use) between regulated ANS 
and non (regulated) ANS, and test how this is put in practice. For the 
sample of depreciation costs selected, the NSA should request the 
supporting evidence used as a basis for the apportionment and check 
whether the costs have been correctly shared between regulated ANS 
and non (regulated) ANS.  

–  Verify that the value of fixed assets was depreciated in accordance 
with their expected operating life, using the straight-line method;  

–  Verify that the depreciation methodology used was consistent with 

the one applied to the cost of capital calculation;  

68) For the sample tested, 
only the regulated 
ANS related 
depreciation costs 
were reported in the 
reporting tables. 

69) The value of fixed 

assets was 
depreciated in 
accordance with their 
expected operating 
life, using the straight-
line method. 

70) The methodology used 

to calculate 
depreciation costs was 
consistent with the 
one applied to the cost 
of capital. 

71) The methodology used 

to calculate 
depreciation costs was 
not altered during the 
duration of the 
depreciation. 

Result 

(C / E / 
N.A.) 

36 

 
 
 
 
 
Ref 

Procedures 

Factual finding 

–  Verify that the methodology used to calculate depreciation costs was 

not altered during the duration of the depreciation. 

Legal basis:  

Implementing Regulation (EU) 2019/317, Art. 22.4, Art. 23; Annex VII, Point 
2.1(g); Regulation (EC) No 550/2004 as amended by Regulation (EC) No 
1070/2009, Art. 15.2(a) 

B.2.1.5 

PROCEDURES FOR COST OF CAPITAL 

According to the legal framework, the cost of capital shall be equal to the 
product of the following elements: 

–  The sum of the average net book value of fixed assets in operation or 

under construction and possible adjustments to total assets 
determined by the national supervisory authority and used by the air 
navigation service provider and of the average value of the net 
current assets, excluding interest-bearing accounts, that are required 
for the purposes of providing air navigation services; 

–  The weighted average of the interest rate on debts and of the return 
on equity. For air navigation service providers without any equity 
capital, the weighted average shall be calculated on the basis of a 
return applied to the difference between the total of the assets 
referred to in point (i) and the debts. 

For the purpose of establishing the cost of capital, the factors to which 
weight is to be given shall be based on the proportion of financing through 
either debt or equity. The interest rate on debts shall be equal to the 
weighted average interest rate on debts of the air navigation service 
provider. The return on equity shall be that provided in the Performance Plan 
for the reference period and shall be based on the financial risk incurred by 
the air navigation service provider. 

72) The eligibility and 
accuracy of all 
components of the 
cost of capital 
calculation was 
verified. 

73) The calculation of the 
cost of capital was 
correct. 

74) The methodology 

applied to the cost of 
capital was consistent 
with the one used to 
calculate depreciation 
costs. 

75)  The interest rate on 
debts equals the 
weighted average 
interest rate on debts 
of the air navigation 
service provider. 

Result 

(C / E / 
N.A.) 

37 

 
 
 
 
 
Ref 

Procedures 

Factual finding 

Where air navigation service providers incur costs from leasing fixed assets, 
those costs shall not be included in the calculation of cost of capital. 

To verify the cost of capital, the NSA performs the following procedures: 

–  Verify the eligibility and accuracy of all components of the cost of 

capital calculation by reconciling them with the ANSP regulatory 
balance sheet and Profit and Loss accounts; 

–  Verify the cost of capital calculation;  

–  Verify that methodology applied to the cost of capital is consistent 

with the one used to calculate depreciation costs; 

–  Perform an in-depth verification of interest rate and costs. 

Legal basis:  

Implementing Regulation (EU) 2019/317, Art. 4.1, Art. 22.4, Art. 23; Annex 
VII, Point 2.1(i); Regulation (EC) No 550/2004 as amended by Regulation 
(EC) No 1070/2009, Art. 15.2(a) 

B.2.1.6 

PROCEDURES FOR EXCEPTIONAL COSTS 

According to the legal framework, exceptional costs shall consist of non-
recurring costs relating to the provision of air navigation services, including 
any non-recoverable taxes and customs duties. 

In relation to the exceptional costs, the NSA should perform the following 
procedures: 

–  Verify that the only elements included in the exceptional costs 
reported in the reporting tables are the ones allowed by the 
regulatory framework; 

–  Verify that the costs reported under the exceptional costs are related 

to the provision of air navigation services. 

76)  Exceptional costs in 
the reporting tables 
only contain the 
elements allowed by 
the Regulatory 
Framework. 

77)  The costs reported 

under the exceptional 
costs were related to 
the provision of air 
navigation services. 

Result 

(C / E / 
N.A.) 

38 

 
 
 
Ref 

Procedures 

Factual finding 

Legal basis:  

Implementing Regulation (EU) 2019/317, Art. 22.4, Art. 23, Annex II, 3.3, 
(i); Regulation (EC) No 550/2004 as amended by Regulation (EC) No 
1070/2009, Art. 15.2(b) 

B.2.2 VERIFICATION OF THE BOOKINGS OF COSTS ON COST CENTRES 

B.2.2.1 

PROCEDURES FOR COST CENTRES 

As prerequisite for the process of verifying the cost allocations, the NSA is 
recommended to check the methodology of the ANSP for the recording of 
costs on cost centres (if used by the ANSP).  

To fulfil that objective, the NSA should perform the following procedures: 

–  Review and validate the structure of cost centres; 

–  Review and validate the procedure(s) for the booking of costs on cost 

centres; 

–  Test the correct implementation of the procedure for the booking of 

costs on cost centres. 

Legal basis:  

Implementing Regulation (EU) 2019/317, Art. 4.1 

B.2.3 VERIFICATION OF ALLOCATIONS 

B.2.3.1 

PROCEDURES FOR ALLOCATIONS 

According to the Service Provision Regulation, cross-subsidy is not allowed 
between en route and terminal charges, and costs that pertain to both 
terminal services and en route services shall be allocated in a proportional 
way between en route services and terminal services on the basis of a 
transparent methodology.  

78)  The structure of cost 

centres is adequate. 

79) The procedure(s) for 
the booking of costs 
on cost centres is 
adequate. 

80) For the sample 

selected, the costs 
were booked on the 
correct cost centre. 

81)  The allocation model 

reasonably reflects the 
actual operations.  

Result 

(C / E / 
N.A.) 

39 

 
 
 
 
 
Ref 

Procedures 

Factual finding 

82) For complex allocation 
models, the total costs 
from the sources and 
destinations were 
reconciled for each 
allocation step. 

83) For the sample of 
allocation steps 
tested, no issues were 
noted. 

The NSA is responsible for checking that the ANSP complies with these 
regulatory requirements. The following procedures are recommended to this 
end: 

–  Obtain the description for the allocation process the ANSP has in 

place and validate the overall allocation model logic; 

–  For complex allocation models, reconcile the total costs from the 

sources and destinations for each allocation step; 

–  For a sample of allocation steps:  

o  Reconcile the costs from the allocation sources and 

destinations; 

o  Review and validate the causality (i.e. logical relationship) 

between the allocation sources and destinations; 

o  Review and validate the causality of the driver/allocation 

key/criteria used for the allocation from the allocation sources 
to destinations; 

o  Reconcile the driver/allocation key/criteria quantities used for 

allocations with source information. 

Legal basis:  

Implementing Regulation (EU) 2019/317, Art. 4.1, Art. 22.1, Art. 22.4, Art. 
22.5, Art. 22.6, Art. 22.7, Art. 23; Annex VII, Point 2.1(a), Point 2.1(c), 
Point 2.1(e); Regulation (EC) No 550/2004 as amended by Regulation (EC) 
No 1070/2009, Art. 15.2(e). 

Result 

(C / E / 
N.A.) 

40 

 
 
 
Ref 

Procedures 

Factual finding 

B.2.4 VERIFICATION OF SPECIFIC LINES, REVENUES AND ADJUSTMENTS  

B.2.4.1 

PROCEDURES FOR INFLATION 

According to Implementing Regulation (EU) 2019/317, Article 26, for each 
year of the reference period, the determined costs included in the cost bases 
for en route and terminal charges of year n expressed in nominal terms shall 
be adjusted on the basis of the difference in percentage between the actual 
inflation index and the forecast inflation index for that year n and included as 
an adjustment for the calculation of the unit rate for year n+2. The 
determined costs referred to in the third subparagraph of Article 22(1), and 
the determined costs referred to in points (c) and (d) of Article 22(4) where 
historical cost accounting is applied, shall not be subject to any inflation 
adjustment. 

The NSA is responsible to check that the ANSP complies with these 
regulatory requirements. The following procedures are recommended to this 
end: 

–  Reconcile the amounts of the adjustments carried over with the data 
from the year that the adjustments originate (from previous and 
current RP); 

–  Depending on the cost accounting method used (historical or current), 

verify the cost being subject to inflation adjustments; 

–  Verify that the ANSP used the correct actual inflation percentage, i.e. 
the one published by the Commission in the Eurostat Harmonised 
Index of Consumer Price for the State concerned as foreseen by the 
legal framework. 

84)  The amounts of the 
adjustments carried 
over were reconciled 
with the data from the 
year that the 
adjustments originate 
(from previous and 
current RP). 

85)  The determined costs 
referred to in the third 
subparagraph of 
Article 22(1), and the 
determined costs 
referred to in points 
(c) and (d) of Article 
22(4) where historical 
cost accounting is 
applied, were not 
subject to any inflation 
adjustment. 

Result 

(C / E / 
N.A.) 

41 

 
 
 
 
Ref 

Procedures 

Factual finding 

Legal basis: 

Implementing Regulation (EU) 2019/317, Art. 2 (11) and (12), Art. 26 

B.2.4.2 

PROCEDURES FOR COST ITEMS REFERRED TO IN ARTICLE 28(3) 

As per Implementing Regulation (EU) 2019/317, Article 28 (2), the general 
principles assume that the difference between determined and actual costs is 
covered or retained by the ANSP or the Member State concerned. However, 
Article 28 (3) highlights exceptions linked to the cost sharing mechanism, 
emphasising that the difference between actual and determined costs are to 
be reimbursed to airspace users or recovered from them, under specific 
rules. 

According to Article 28 (7), National Supervisory Authorities shall verify 
annually whether air navigation service providers apply correctly the 
provisions of Article 28. National supervisory authorities shall draw up a 
report by 1 September of year n+1 on the changes in costs referred to in 
paragraph 3 which occurred in year n. The report shall be subject to 
consultation of airspace users' representatives. 

While the verification of the adjustments for each category of cost included in 
Article 28 coming from the current RP are presented below, the ones coming 
from the previous RP require a slightly different method (i.e. when the 
adjustment applicable to a year of RP3 comes from a difference between the 

86)  The actual inflation 
percentage provided 
in the reporting table 
was reconciled with 
the actual inflation 
rate published by the 
Commission in the 
Eurostat Harmonised 
Index of Consumer 
Price for the State 
concerned. 

87)  The amounts of the 
adjustments carried 
over from RP2 as cost 
exempts were 
reconciled with the 
data from the year 
that the adjustments 
originate (from 
previous RP). 

Result 

(C / E / 
N.A.) 

42 

 
 
 
Ref 

Procedures 

Factual finding 

determined and actual costs in a year of RP2), even if the general principle 
remains the same:  

–  Reconcile the amounts of the adjustments carried over from RP2 as 
cost exempts with the data from the year that the adjustments 
originate (from previous RP). 

Legal basis: 

Implementing Regulation (EU) 2019/317, Art. 28 

B.2.4.2.1  PROCEDURES FOR COST ITEMS REFERRED TO IN ARTICLE 28(3) – COSTS 

OF NEW AND EXISTING INVESTMENTS AND UNFORESEEN CHANGES 

According to Article 28 (3) and (4), the air navigation service provider or the 
Member State shall not retain the full differences in case of unforeseen 
changes in costs of new and existing investments. 

Where, over a calendar year or over the whole reference period, actual costs 
fall below the determined costs, the air navigation service provider or the 
Member State concerned shall reimburse the resulting difference to airspace 
users, through a reduction of the unit rate in year n+2 or in the following 
reference period, unless, based on a detailed justification of the air 
navigation service provider, the national supervisory authority decides, after 
consultation with airspace users' representatives, that the air navigation 
service provider shall not reimburse a part of the resulting difference. 

Where, over a calendar year or over the whole reference period, actual costs 
exceed the determined costs by not more than 5 %, Member States may 
decide that the resulting difference is recovered from airspace users by the 
air navigation service provider or the Member State concerned, through an 
increase of the unit rate in year n+2 or in the following reference period, 
subject to the approval by the national supervisory authority of a detailed 

88)  The amounts of the 
adjustments carried 
over were reconciled 
with the data from the 
year that the 
adjustments originate 
(from current RP). 

89)  The actual costs and 
adjustments are 
eligible (unforeseen, 
nature of costs, 
threshold). 

Result 

(C / E / 
N.A.) 

43 

 
 
 
Ref 

Procedures 

Factual finding 

justification provided by the air navigation service provider in particular as 
regards the need to increase capacity and after consultation with airspace 
users' representatives. 

Where, during the reference period, air navigation service providers intend to 
add, cancel or replace major investments with respect to information on 
major investments identified in the Performance Plan in accordance with 
point 2.2(b) of Annex II, these changes shall be approved by the national 
supervisory authority, after consultation of airspace users' representatives. 

The NSA is responsible to check that the ANSP complies with these 
regulatory requirements. The following procedures are recommended to this 
end: 

–  Reconcile the amounts of the adjustments carried over with the data 
from the year that the adjustments originate (from current RP); 

–  Verify the eligibility of costs included and adjustments (unforeseen, 

nature of costs, threshold); 

–  The carry-over mechanism was applied to the appropriate years in 
alignment with the regulatory framework and with the required pre-
approval granted by the NSA and consultation of airspace users; 

–  Verify and reconcile the values provided for the actual new and 

existing investments costs with the costs by nature. 

– 

In case an ANSP intends to add, cancel or replace major investments 
during the reference period, verify the updated investment plan and 
related approval process. 

90)  The carry-over 
mechanism was 
applied to the 
appropriate years in 
alignment with the 
regulatory framework 
and with the required 
approval and 
consultation. 

91)  The actual new and 
existing investments 
costs were verified 
and reconciled with 
the costs by nature. 

92) The updated 

investment plan and 
related approval 
process was verified in 
case an ANSP intends 
to add, cancel or 
replace major 
investments during 
the reference period. 

Legal basis: 

Implementing Regulation (EU) 2019/317, Art. 28 (3) and (4) 

Result 

(C / E / 
N.A.) 

44 

 
 
 
 
Ref 

Procedures 

Factual finding 

B.2.4.2.2  PROCEDURES FOR COST ITEMS REFERRED TO IN ARTICLE 28(3) – COSTS 

OF COMPETENT AUTHORITIES, QUALIFIED ENTITIES AND 
EUROCONTROL AND UNFORESEEN CHANGES 

Article 28 of Implementing Regulation (EU) 2019/317 sets the rules 
governing a cost risk sharing mechanism between the airspace users and 
ANSPs for the RP3. This concerns the situation where the ANSP actual costs 
(in this case incurred by Eurocontrol, Competent Authorities and Qualified 
Entities) exceed or fall below the determined costs over a reference period. 

As per Article 28 (5) and 22 (1) sub paragraph 3, Member States may decide 
to include in the cost base the incurred by competent authorities, by qualified 
entities and the costs stemming from the Eurocontrol International 
Convention relating to cooperation for the safety of air navigation, incurred 
in relation to the provision of air navigation services.  

As per Article 28 (3), the general principle (Article 28 (2)) does not apply to 
unforeseen changes in costs referred to in the third subparagraph of Article 
22(1). 

Therefore, for unforeseen changes associated with the costs of competent 
authorities, qualified entities and Eurocontrol from year n are settled through 
an increase or reduction of the unit rate in year n+2.  

The determined costs referred to in the third subparagraph of Article 22(1) 
where historical cost accounting is applied, shall be set in nominal terms and 
shall not be subject of any inflation adjustment. 

The subsequent procedures are recommended to be followed: 

–  Reconcile the amounts of the adjustments carried over with the data 
from the year that the adjustments originate(from current RP); 

–  Verify that the authorities and entities for which costs are included in 
the actual costs fulfil all the requirements set out in the Regulation; 

93)  The amounts of the 
adjustments carried 
over were reconciled 
with the data from the 
year that the 
adjustments 
originate(from current 
RP). 

94)  The authorities and 
entities for which 
costs are included in 
the cost base fulfil all 
the requirements set 
out in the Regulation. 

95) The actual costs and 
related adjustments 
are eligible. 

96)  The carry-over 
mechanism was 
applied to the 
appropriate years in 
alignment with the 
regulatory framework 
and with the required 
approval and 
consultation. 

Result 

(C / E / 
N.A.) 

45 

 
 
 
 
 
Ref 

Procedures 

Factual finding 

–  Verify the eligibility of actual costs and related adjustments; 

–  Verify the carry-over mechanism was applied to the appropriate years 
in alignment with the regulatory framework and with the required 
approval and consultation. 

Legal Basis: 

Implementing Regulation (EU) 2019/317, Art. 22.(1), Art. 28 (5), Regulation 
(EC) 550/2004 as amended by Regulation (EC) No 1070/2009, Art.3. 

B.2.4.2.3  PROCEDURES FOR COST ITEMS REFERRED TO IN ARTICLE 28(3) –

PENSION COSTS AND UNFORESEEN CHANGES 

As per Implementing Regulation (EU) 2019/317, Article 28 (3), the general 
principle (Article 28 (2)) does not apply in case of unforeseen and significant 
changes in pension costs established in accordance with Article 22(4) 
resulting from unforeseeable changes in national pensions law, pensions 
accounting law or unforeseeable changes in financial market conditions, on 
the condition that such changes in pension costs are outside the control of 
the air navigation service provider and, in the case of cost increases, that the 
air navigation service provider has taken reasonable measures to manage 
cost increases during the reference period. 

As per Art. 28(6), the differences between determined costs and actual costs 
shall be shared as follows: 

–  When actual costs fall below the determined costs, the ANSPs or the 
Member States concerned shall reimburse the resulting difference to 
airspace users through a reduction of the unit rate in year n+2, in the 
following reference period or in the following two reference periods if 
the amounts to be recovered impact the unit rate in a 
disproportionate manner; 

97)  The amounts of the 
adjustments carried 
over were reconciled 
the data from the year 
that the adjustments 
originate (from 
previous and current 
RP).  

98)  The adjustments are 
eligible (unforeseen, 
outside of ANSP 
control and reasonable 
measures were taken). 

99)  The carry-over 
mechanism was 
applied to the 
appropriate years in 
alignment with the 
regulatory framework. 

Result 

(C / E / 
N.A.) 

46 

 
 
 
 
Ref 

Procedures 

Factual finding 

– 

In cases when the actual costs exceed the determined costs the 
ANSPs or the Member States concerned may apply an increase of the 
unit rate in year n+2, in the following reference period or in the 
following two reference periods if the amounts to be recovered impact 
the unit rate in a disproportionate manner. 

Referring RP3’s legal framework, to Article 22(4), pension costs shall be 
calculated using prudent assumptions based on the applicable pension 
scheme, or on national law, as appropriate. These assumptions shall be 
specified in the Performance Plans.  

Referring to the legal framework of RP2 Art. 14(2), for unforeseen changes 
associated with the pension costs where, over the whole reference period: 

–  Actual costs are lower than the determined costs established at the 
beginning of the reference period, the resulting difference shall be 
returned to airspace users through a carry over to the following 
reference period(s);  

–  Actual costs exceed the determined costs established at the beginning 
of the reference period, the resulting difference shall be passed on to 
airspace users through a carry over to the following reference 
period(s). 

The NSA is responsible to check the compliance with the above requirements. 
The following procedures are recommended to this end: 

–  Reconcile the amounts of the adjustments carried over with the data 
from the year that the adjustments originate (from previous and 
current RP); 

–  Verify that the adjustments are eligible (unforeseen, outside of ANSP 

control and reasonable measures were taken); 

Result 

(C / E / 
N.A.) 

47 

 
Ref 

Procedures 

Factual finding 

–  Verify that the carry-over mechanism was applied to the appropriate 

years in alignment with the regulatory framework. 

Legal Basis: 

Implementing Regulation (EU) 2019/317, Recital 36, Art. 22(4), Art. 28(3) 
and (6), Implementing Regulation (EU) 391/2013 Art. 7(2), Art 14(2). 

B.2.4.2.4  PROCEDURES FOR COST ITEMS REFERRED TO IN ARTICLE 28(3) –

INTEREST RATES AND UNFORESEEN CHANGES 

Article 28 of the Implementing Regulation (EU) 2019/317 and Article 14 of 
Regulation (EU) 391/2013 set the rules governing a cost risk sharing 
mechanism between the airspace users and ANSPs for the RP3. As per 
Article 28 (3), the general principle (Article 28 (2)) does not apply in case of 
unforeseen and significant changes in costs resulting from unforeseeable 
changes in interest rates on loans that finance costs arising from the 
provision of air navigation services, on the condition that such changes in 
costs are outside the control of the air navigation service provider and, in the 
case of cost increases, that the air navigation service provider has taken 
reasonable measures to manage cost increases during the reference period. 

This concerns the situation where the ANSP actual costs exceed or fall below 
the determined costs over a reference period.  

During the RP2:  

– 

In cases where over the whole reference period actual costs are lower 
than the determined costs established at the beginning of the 
reference period, the resulting difference shall be returned to 
airspace users through a carry over to the following reference 
period(s); 

100) The amounts of the 
adjustments carried 
over were reconciled 
with the data from 
the year that the 
adjustments 
originate (from 
previous and current 
RP). 

101)  The adjustments are 
eligible (unforeseen, 
outside of ANSP 
control and 
reasonable measures 
were taken) 

102)  The carry-over 
mechanism was 
applied to the 
appropriate years in 
alignment with the 
regulatory 
framework. 

Result 

(C / E / 
N.A.) 

48 

 
 
 
 
 
Ref 

Procedures 

Factual finding 

– 

If the actual costs exceed the determined costs established at the 
beginning of the reference period, the resulting difference shall be 
passed on to airspace users through a carry over to the following 
reference period(s). 

Referring to the legal framework of RP3, Art. 28(6):  

In respect of the unforeseen changes in interest rates the differences 
between determined costs and actual costs shall be shared as follows: 

–  When actual costs fall below the determined costs, the ANSPs or the 
Member States concerned shall reimburse the resulting difference to 
airspace users through a reduction of the unit rate in year n+2, in the 
following reference period or in the following two reference periods if 
the amounts to be recovered impact the unit rate in a 
disproportionate manner; 

– 

In cases when the actual costs exceed the determined costs the 
ANSPs or the Member States concerned may apply an increase of the 
unit rate in year n+2, in the following reference period or in the 
following two reference periods if the amounts to be recovered impact 
the unit rate in a disproportionate manner. 

The differences between the actual costs and the determined costs in respect 
to these items shall be identified and explained in accordance with the 
reporting tables. 

The NSA is responsible to check the compliance with the above requirements. 
The following procedures are recommended to this end: 

–  Reconcile the amounts of the adjustments carried over with the data 
from the year that the adjustments originate (from previous and 
current RP); 

Result 

(C / E / 
N.A.) 

49 

 
Ref 

Procedures 

Factual finding 

–  Verify that the adjustments are eligible (unforeseen, outside of ANSP 

control and reasonable measures were taken); 

–  Verify the carry-over mechanism was applied to the appropriate years 

in alignment with the regulatory framework. 

Legal Basis: 

Implementing Regulation (EU) 2019/317, Art. 28(3) and (6), Implementing 
Regulation (EU) 391/2013 Art. 7. Art. 14(2). 

B.2.4.2.5  PROCEDURES FOR COST ITEMS REFERRED TO IN ARTICLE 28(3) –

NATIONAL TAXATION LAW OR OTHER UNFORESEEABLE NEW COST 
ITEMS AND UNFORESEEN CHANGES 

Article 28 of the Implementing Regulation (EU) 2019/317 and Article 14 of 
Regulation (EU) 391/2013 set the rules governing a cost risk sharing 
mechanism between the airspace users and ANSPs for the RP3. As per 
Article 28 (3), the general principle (Article 28(2)) does not apply in case of 
unforeseen and significant changes in costs resulting from unforeseeable 
changes in national taxation law or other unforeseeable new cost items not 
covered in the Performance Plan but required by law. 

This concerns the situation where the ANSP actual costs exceed or fall below 
the determined costs over a reference period.  

During the RP2:  

– 

In cases where over the whole reference period actual costs are lower 
than the determined costs established at the beginning of the 
reference period, the resulting difference shall be returned to 
airspace users through a carry over to the following reference 
period(s); 

103)  The amounts of the 
adjustments carried 
over were reconciled 
with the data from 
the year that the 
adjustments 
originate (from 
previous and current 
RP). 

104)  The actual costs and 
adjustments are 
eligible (unforeseen, 
nature of costs, 
outside of ANSP 
control, reasonable 
measures were taken 
and required by law). 

Result 

(C / E / 
N.A.) 

50 

 
 
 
Ref 

Procedures 

Factual finding 

– 

If the actual costs exceed the determined costs established at the 
beginning of the reference period, the resulting difference shall be 
passed on to airspace users through a carry over to the following 
reference period(s). 

Referring to the legal framework of RP3, Art. 28(6):  

In respect of the unforeseen changes in national taxation law or other 
unforeseeable new cost items, the differences between determined costs and 
actual costs shall be shared as follows: 

105)  The carry-over 
mechanism was 
applied to the 
appropriate years in 
alignment with the 
regulatory 
framework. 

–  When actual costs fall below the determined costs, the ANSPs or the 
Member States concerned shall reimburse the resulting difference to 
airspace users through a reduction of the unit rate in year n+2, in the 
following reference period or in the following two reference; 

–  periods if the amounts to be recovered impact the unit rate in a 

disproportionate manner; 

– 

In cases when the actual costs exceed the determined costs the 
ANSPs or the Member States concerned may apply an increase of the 
unit rate in year n+2, in the following reference period or in the 
following two reference periods if the amounts to be recovered impact 
the unit rate in a disproportionate manner. 

The differences between the actual costs and the determined costs in respect 
to these items shall be identified and explained in accordance with the 
reporting tables. These costs are unforeseen and significant changes in costs 
resulting from unforeseeable changes in national taxation law or other 
unforeseeable new cost items which are not covered in the Performance Plan 
but required by law.  

The NSA is responsible to check the compliance with the above requirements. 
The following procedures are recommended to this end: 

Result 

(C / E / 
N.A.) 

51 

 
 
Ref 

Procedures 

Factual finding 

–  Reconcile the amounts of the adjustments carried over with the data 
from the year that the adjustments originate (from previous and 
current RP); 

–  Verify that the actual costs and adjustments are eligible (unforeseen, 
outside of ANSP control and reasonable measures were taken and 
required by law); 

–  Verify the carry-over mechanism was applied to the appropriate years 

in alignment with the regulatory framework. 

Legal Basis: 

Implementing Regulation (EU) 2019/317, Art. 28(3) and (6); Implementing 
Regulation (EU) 391/2013 Art. 7, Art.14. 

B.2.4.3 

PROCEDURES FOR OTHER REVENUES 

Article 25 of Implementing Regulation 2019/317 foresees that for the 
calculation of the unit rates, the following revenues of air navigation service 
providers obtained in year n shall be deducted from the determined costs as 
‘other revenue’: 

–  Public funds obtained from public authorities, including financial 

support from Union assistance programmes; 

–  Revenue obtained from commercial activities, where the Member 

State or Member States concerned have decided that those revenues 
are to be deducted; 

–  With regard to terminal air navigation services, revenue obtained 
from contracts or agreements concluded between air navigation 
service providers and airport operators, where the Member State or 
Member States concerned have decided that those revenues are to be 
deducted. 

Result 

(C / E / 
N.A.) 

52 

 
 
 
Ref 

Procedures 

Factual finding 

The revenues referred in above points need to be deducted from the 
determined costs as per specific requirements for each category. This is the 
reason why no specific procedure was defined at this level but that they were 
specified for each category in the next sections B.2.4.3.1 to B.2.4.3.4. 

Legal Basis: 

Implementing Regulation (EU) 2019/317, Article 25. 

B.2.4.3.1  PROCEDURES FOR OTHER REVENUES ART. 25(2)(i) – FINANCIAL 
SUPPORT FROM UNION ASSISTANCE PROGRAMMES  

Article 25 of Implementing Regulation (EU) 2019/317 foresees that public 
funds covering staff costs and other operating costs shall be deducted from 
the determined costs no later than in year n+2. Public funds covering 
depreciation costs shall be deducted from the determined costs in 
accordance with the depreciation schedule of the financed asset (duration 
and annuity). A Member State may decide not to deduct from determined 
costs an amount related to the administrative costs incurred for the 
reporting on the funding agreement if these administrative costs are not 
included in the cost base for charges. Equally, a Member State may decide 
not to deduct from determined costs public funds received to cover costs not 
known at the time of drafting the Performance Plan and therefore not 
included in the cost base for charges. Airspace users shall not be charged for 
the costs covered by public funds. 

106)  The value of funded 
projects in Reporting 
Table 4 were 
reconciled with the 
corresponding 
amounts in the 
investment section 
of the Annual 
Monitoring Report. 

107) The amounts granted 

in Reporting Table 4 
were reconciled with 
the amounts 
provided in the Grant 
Agreement.  

Result 

(C / E / 
N.A.) 

53 

 
 
 
Ref 

Procedures 

Factual finding 

The difference between the Union assistance programme funds and the other 
public funds is that the first one is required to be reported and monitored in 
Reporting Table 4 while it is optional to include other public funding in this 
table (but it is not an obligation). 

108) The actual amounts 
received were 
verified. 

The NSA is responsible to check that the ANSP complies with these 
regulatory requirements. The following procedures are recommended to this 
end: 

–  Reconcile the value of funded projects in Reporting Table 4 with the 
corresponding amounts (Total capital expenditure (CAPEX) for the 
project) in the investment section of the Annual Monitoring Report; 

–  Reconcile the amounts granted in Reporting Table 4 with the amounts 

provided in the Grant Agreement; 

–  Verify the actual amounts received, using also reports and tools 

provided by the Performance Review Body (PRB) and the European 
Commission for cross-check of amounts received by the ANSP; 

– 

If any, verify the eligibility of the amounts for administrative costs; 

–  Verify the calculations and sums in Reporting Table 4; 

–  Reconcile the amounts of the adjustments carried over were 

reconciled with the data from the year that the adjustments originate 
(from previous and current RP); 

–  Verify the carry-over mechanism was applied to the appropriate years 
in alignment with the regulatory framework (no later than in year n+2 
for operating expenditure (OPEX) and as per the depreciation 
schedule for the CAPEX); 

–  Reconcile the amounts reimbursed to users from Reporting Table 4 
with the adjustments carried over in Reporting Table 3 and 2B. 

109) If any, the eligibility 
of the amounts for 
administrative costs 
was verified.  

110) The Reporting Table 

4 calculations and 
sums were verified. 

111) The amounts of the 
adjustments carried 
over were reconciled 
with the data from 
the year that the 
adjustments 
originate (from 
previous and current 
RP). 

112) The carry-over 
mechanism was 
applied to the 
appropriate years in 
alignment with the 

Result 

(C / E / 
N.A.) 

54 

 
 
 
 
 
 
Ref 

Procedures 

Factual finding 

Legal Basis: 

Implementing Regulation (EU) 2019/317, Article 25, Annex IX 

B.2.4.3.2  PROCEDURES FOR OTHER REVENUES ART. 25(2)(i) – OTHER PUBLIC 

FUNDS OBTAINED FROM PUBLIC AUTHORITIES 

Article 25 of Implementing Regulation 2019/317 foresees that public funds 
covering staff costs and other operating costs shall be deducted from the 
determined costs no later than in year n+2. Public funds covering 
depreciation costs shall be deducted from the determined costs in 
accordance with the depreciation schedule of the financed asset (duration 
and annuity). A Member State may decide not to deduct from determined 
costs an amount related to the administrative costs incurred for the 
reporting on the funding agreement if these administrative costs are not 
included in the cost base for charges. Equally, a Member State may decide 
not to deduct from determined costs public funds received to cover costs not 
known at the time of drafting the Performance Plan and therefore not 

regulatory 
framework (no later 
than in year n+2 for 
OPEX and as per the 
depreciation 
schedule for the 
CAPEX). 

113) The amounts 

reimbursed to users 
from Reporting Table 
4 were reconciled 
with the adjustments 
carried over in 
Reporting Table 3 
and 2B. 

114) The value of funded 
projects were 
reconciled with the 
corresponding 
amounts in the 
investment section 
of the Annual 
Monitoring Report. 

115) The amounts granted 
were reconciled with 
the amounts 
provided in the Grant 
Agreement. 

Result 

(C / E / 
N.A.) 

55 

 
 
 
 
Ref 

Procedures 

Factual finding 

included in the cost base for charges. Airspace users shall not be charged for 
the costs covered by public funds. 

As mentioned in the above section, while filling in Reporting Table 4 for the 
Union assistance programme funds is required, it also is allowed for other 
public funding. The NSA is responsible to check that the ANSP complies with 
these regulatory requirements. The following procedures are recommended 
to this end: 

–  Reconcile the value of funded projects with the corresponding 

amounts (Total CAPEX for the project) in the investment section of 
the Annual Monitoring Report; 

–  Reconcile the amounts granted with the amounts provided in the 

Grant Agreement; 

–  Verify the actual amounts received; 

– 

In any, verify the eligibility of the amounts for administrative costs; 

–  Verify the calculations of the amounts reimbursed; 

–  Reconcile the amounts of the adjustments carried over were 

reconciled with the data from the year that the adjustments originate 
(from previous and current RP); 

–  Verify the carry-over mechanism was applied to the appropriate years 
in alignment with the regulatory framework (no later than in year n+2 
for OPEX and as per the depreciation schedule for the CAPEX); 

–  Reconcile the amounts reimbursed to the users with the adjustments 

carried over in Reporting Table 3 and 2B. 

Legal Basis: 

116) The actual amounts 
received were 
verified.  

117) If any, the eligibility 
of the amounts for 
administrative costs 
was verified.  

118) The calculations of 
the amounts 
reimbursed to the 
users were verified. 

119) The amounts of the 
adjustments carried 
over were reconciled 
with the data from 
the year that the 
adjustments 
originate (from 
previous and current 
RP). 

Result 

(C / E / 
N.A.) 

56 

 
 
 
 
 
Ref 

Procedures 

Factual finding 

Implementing Regulation (EU) 2019/317, Article 25, Annex IX 

120) The carry-over 
mechanism was 
applied to the 
appropriate years in 
alignment with the 
regulatory 
framework (no later 
than in year n+2 for 
OPEX and as per the 
depreciation 
schedule for the 
CAPEX). 

121) The amounts 

reimbursed to users 
were reconciled with 
the adjustments 
carried over in 
Reporting Table 3 
and 2B. 

B.2.4.3.3  PROCEDURES FOR OTHER REVENUES ART. 25(2)(i) – REVENUE FROM 

122) The commercial 

COMMERCIAL ACTIVITIES  

Article 25 of Implementing Regulation 2019/317 foresees that the revenue 
from commercial activities shall be deducted from the determined costs no 
later than in year n+2. 

The following procedures are recommended to verify its proper 
implementation: 

–  Verify the amounts related to the commercial revenues; 

revenue amount was 
verified. 

123) The amounts of the 
adjustments carried 
over were reconciled 
with the data from 
the year the 
adjustments 
originate (from 

Result 

(C / E / 
N.A.) 

57 

 
 
 
 
 
Ref 

Procedures 

Factual finding 

–  Reconcile the amounts of the adjustments carried over with the data 
from the year the adjustments originate (from previous and current 
RP); 

–  Verify the carry-over mechanism was applied to the appropriate years 
in alignment with the regulatory framework (no later than in year 
n+2); 

–  Reconcile the amounts reimbursed to users with the adjustments 

carried over in Reporting Table 3 and 2B. 

Legal Basis: 

Implementing Regulation (EU) 2019/317, Article 25, Annex IX 

previous and current 
RP). 

124) The carry-over 
mechanism was 
applied to the 
appropriate years in 
alignment with the 
regulatory 
framework (no later 
than in year n+2). 

125) The amounts 

reimbursed to users 
were reconciled with 
the adjustments 
carried over in 
Reporting Table 3 
and 2B. 

B.2.4.3.4  PROCEDURES FOR OTHER REVENUES ART. 25 (2) (i) – REVENUE FROM 
CONTRACTS CONCLUDED BETWEEN ANSPs AND AIRPORT OPERATORS 

126) The revenue amount 

was verified. 

Article 25 of Implementing Regulation (EU) 2019/317 foresees that the 
revenue from contracts concluded between ANSPs and airport operators 
shall be deducted from the determined costs no later than in year n+2. 

The following procedures are recommended to this end: 

Result 

(C / E / 
N.A.) 

58 

 
 
 
 
Ref 

Procedures 

Factual finding 

–  Verify the amounts related to the revenues from contracts concluded 

between ANSPs and airport operators; 

–  Reconcile the amounts of the adjustments carried over with the data 
from the year the adjustments originate (from previous and current 
RP); 

–  Verify the carry-over mechanism was applied to the appropriate years 
in alignment with the regulatory framework (no later than in year 
n+2); 

–  Reconcile the amounts reimbursed to users with the adjustments 

carried over in Reporting Table 3 and 2B. 

Legal Basis: 

Implementing Regulation (EU) 2019/317, Article 25, Annex IX 

127) The amounts of the 
adjustments carried 
over were reconciled 
with the data from 
the year the 
adjustments 
originate (from 
previous and current 
RP). 

128) The carry-over 
mechanism was 
applied to the 
appropriate years in 
alignment with the 
regulatory 
framework (no later 
than in year n+2). 

129) The amounts 

reimbursed to users 
were reconciled with 
the adjustments 
carried over in 
Reporting Table 3 
and 2B. 

Result 

(C / E / 
N.A.) 

59 

 
 
 
 
Ref 

Procedures 

Factual finding 

B.2.4.4 

PROCEDURES FOR COMMON PROJECTS 

130)  All common projects 

Result 

(C / E / 
N.A.) 

According to Article 22(1), determined costs stemming from new ATM 
systems and major overhauls of existing ATM systems shall only be included 
in the cost base where those systems are consistent with the implementation 
of the European ATM Master Plan, and, in particular, with the common 
projects referred to in Article 15a(3) of Regulation (EC) No 550/2004 and 
Regulation (EC) No 1070/2009. 

According to Art. 15a of Regulation No 550/2004 and Regulation (EC) No 
1070/2009, common projects can help with the successful implementation 
of the ATM Master Plan and which are related to network-related functions, 
improved the overall performance of air traffic management and air 
navigation services in Europe. These common projects might be eligible for 
EU funding within the multiannual financial framework. 

According to Implementing Regulation (EU) No 409/2013, a common project 
aims to deploy in a timely, coordinated and synchronised way ATM 
functionalities that are mature for implementation and that contribute to the 
achievement of the essential operational changes identified in the European 
ATM Master Plan. Only ATM functionalities requiring synchronised 
deployment and contributing significantly to Union-wide performance targets 
are to be included in a common project. 

Implementing Regulation (EU) No 716/2014 identifies a first set of ATM 
functionalities to be deployed in timely, coordinated and synchronised way so 
as to achieve the essential operational changes stemming from the European 
ATM Master Plan. These functionalities are described in detail in the annex of 
the regulation. 

from the 
Performance Plan 
were included in the 
investment costs and 
in Reporting Table 4. 

131)  The eligibility of 

actual costs of 
common projects 
was verified. 

132) The amounts of the 
adjustments carried 
over were reconciled 
with the data from 
the year the 
adjustments 
originate (from 
previous and current 
RP). 

133) The value of funded 
projects in Reporting 
Table 4 were 
reconciled with the 
corresponding 
amounts in the 
investment section 
of the Annual 
Monitoring Report. 

60 

 
 
 
 
 
Ref 

Procedures 

Factual finding 

The costs related to the common projects are thus included in the new and 
existing investments of ANSP while the related grants obtained are included 
in the revenues received from Union assistance programmes.  

It is the responsibility of the NSAs to identify which investments are common 
projects and to ensure that the amount of costs funded by the EU 
programmes is not charged to users via the calculated unit rate in order to 
avoid double funding. 

The NSA is responsible to check the compliance with the above requirements. 
The following procedures are recommended to this end: 

–  Verify that all common projects from the Performance Plan were 

included in the investment costs and in Reporting Table 4; 

–  Verify the eligibility of actual costs of common projects; 

–  Reconcile the amounts of the adjustments carried over with the data 
from the year the adjustments originate (from previous and current 
RP); 

–  Reconcile the value of funded projects in Reporting Table 4 with the 

corresponding amounts (Total CAPEX for the project) in the 
investment section of the Annual Monitoring Report; 

–  Verify the amounts granted; 

–  Verify the amounts received, using also reports and tools provided by 
the PRB and the European Commission for cross-check of amounts 
received by the ANSP; 

– 

If any, verify the eligibility of the amounts for administrative costs; 

–  Verify the Reporting Table 4 calculations and sums; 

134) The amounts granted 

in Reporting Table 4 
were reconciled with 
the amounts 
provided in the Grant 
Agreement.  

135) The actual amounts 
received were 
verified. 

136) If any, the eligibility 
of the amounts for 
administrative costs 
was verified.  

137) The Reporting Table 

4 calculations and 
sums were verified. 

138) The carry-over 
mechanism was 
applied to the 
appropriate years in 
alignment with the 
regulatory 
framework (no later 
than in year n+2 for 
OPEX and as per the 
depreciation 
schedule for the 
CAPEX). 

Result 

(C / E / 
N.A.) 

61 

 
 
 
 
 
 
Ref 

Procedures 

Factual finding 

–  Check that the carry-over mechanism was applied to the appropriate 

139) The amounts 

years in alignment with the regulatory framework; 

–  Reconcile the amounts reimbursed to users from Reporting Table 4 
with the adjustments carried over in Reporting Table 3 and 2B. 

Legal basis: 

Regulation (EC) No 550/2004 as amended by Regulation (EC) No 
1070/2009, Art. 15a; Regulation (EC) No 409/2013; Implementing 
Regulation (EC) No 391/2013, Art. 6, Art. 16, Annex VII Point 2(a); 
Implementing Regulation (EU) 2019/317 Recital 35, Art. 25, 32, Annex II 
Point 4.2, Annex VII Point 2.2(c), Implementing Regulation (EC) No 
716/2014. 

reimbursed to users 
from Reporting Table 
4 were reconciled 
with the adjustments 
carried over in 
Reporting Table 3 
and 2B. 

Result 

(C / E / 
N.A.) 

62 

 
 
 
B.3  Conclusion Phase 

Ref 

Procedures 

Factual finding 

B.3.1 

SUMMARISE DRAFT FINDINGS AND SHARE WITH ANSP 

At the end of the fieldwork, NSAs should prepare the summary of the findings 
identified and draft the verification report (Please refer to Tool 1 for the 
template of the verification report).  

The purpose of sharing a draft verification report is to: 

– 

– 

– 

formally communicate to the ANSP the findings identified following 
the verification,  

introduce to the ANSPs the impact of the identified exceptions,  

introduce to ANSPs the sanctions and the corrective measures 
imposed for each of the exceptions identified. 

–  provide the opportunity to ANSPs to comment and deliver further 

supporting evidence. 

Legal basis:  

Implementing Regulation (EU) 2019/317, Art.28.7, Regulation (EU) 
550/2004 as amended by Regulation (EC) No 1070/2009, Article 15, 
Regulation (EU) 549/2004 Article 9 and Implementing Regulation (EU) 
2017/373 Recital 1, Recital 4, Art. 5, Annex II, Subpart C, Annex III Subpart 
B. 

B.3.2 

FINALISE VERIFICATION REPORT 

Following the provision by the ANSP of their comments and, or additional 
supporting evidences on the raised findings and recommendations, the NSA 
need to assess whether the findings will be waived, reviewed or kept 
including the respective deadlines and corrective measures proposed.  

140) The supporting 

evidence obtained 
after the execution 
phase is considered 
relevant, sufficient 
and reliable. 

Result 

(C / E / 
N.A.) 

63 

 
 
 
 
Ref 

Procedures 

Factual finding 

The final verification report , as approved internally by the NSA, should also 
be communicated formally to the ANSP. 

The final report should reflect the official response obtained from the ANSPs 
and if it did or did not impact the findings. 

Legal basis:  

Regulation (EU) No. 550/2004 as amended by Regulation (EC) No 
1070/2009, Art.7.3, Art. 7.7, Art. 15, Regulation (EU) No. 549/2004, Art.9 
and Implementing Regulation (EU) 2017/373 Recital 1, Recital 4, Art. 5, 
Annex II, Subpart C, Annex III Subpart B. 

141) The feedback and the 
additional supporting 
evidence provided by 
the ANSPs confirm 
the procedures that 
were previously 
identified as 
“Exceptions” in the 
draft report.  

B.3.3 

FOLLOW UP ON THE IMPLEMENTATION OF FINDINGS 

142) The NSA will verify 

While completing the final verification report, part of the job of the NSAs will 
be to keep track of the final findings and follow them up in the next 
verification missions if they were properly implemented. 

A database of the finalised findings, the respective cost category, the raised 
recommendations by the NSA, the sanctions applied, the foreseen date of the 
implementation and their status of implementation from the ANSPs, should 
be fed continuously with information after each verification process.  

Following up on the implementation of the previous verification process 
findings is part of the verification process itself. 

This database should be continuously updated reflecting the actual status 
with regards to the implementation of the findings. Keeping good records of 
the verifications performed can help to comply with Art. 7.7 of Regulation 
(EU) No 550/2004, where it states that national supervisory authorities shall 
monitor compliance with the common requirements. Additionally, it may also 
help to answer better the queries from the European Commission in their 
monitoring review. 

that the unit rate 
submitted to the 
Commission in 
November is the 
same as the one 
published in the AIP 
and applied by the 
CRCO. 

Result 

(C / E / 
N.A.) 

64 

 
 
 
Ref 

Procedures 

Factual finding 

Result 

(C / E / 
N.A.) 

After the end of this conclusion phase, the NSA should also verify that the 
unit rate submitted to the European Commission in November is the same as 
the one published in the AIP8 and applied by the CRCO. 

Legal basis:  

Regulation (EU) No. 549/2004, Art.9, Regulation (EU) 550/2004 as 
amended by Regulation (EC) No 1070/2009, Art. 7.7, Article 15 and 
Implementing Regulation (EU) 2017/373 Recital 1, Recital 4, Art. 5, Annex II, 
Subpart C, Annex III Subpart B. 

8 Aeronautical Information Publications (AIPs) of each SES Member State are made available through Eurocontrol at https://www.eurocontrol.int/articles/ais-
online. 

65 

 
 
IFRS Considerations 

As per Article 12 of the Regulation (EC) No 550/2004, ANSP shall draw up, submit to audit 
and publish their financial accounts. These accounts shall comply with the International 
Financial Reporting Standards (IFRS) adopted by the Union pursuant to Commission 
Regulation (EC) No 1126/2008. Where, owing to the legal status of the service provider, full 
compliance with the international accounting standards is not possible, the provider shall 
endeavour to achieve such compliance to the maximum possible extent. 

International Financial Reporting Standards (IFRS) set common rules so that financial 
statements can be consistent, transparent and comparable around the world. IFRS were 
established to create a common accounting language, so that businesses and their financial 
statements can be consistent and reliable from company to company and country to country. 

This guidance gives additional explanations on IFRS principles and requirements, which the 
NSAs should take into account when verifying the costs of ANSPs in accordance with Article 
12(1) of Regulation 550/2004 as last amended. 

The below overview presents the IFRS that are identified to be the most relevant in the 
context of cost-eligibility verification of items presented in the Reporting Tables:  

• 

• 

• 

• 

• 

IAS 19 – Employee benefits 

IFRS 16 – Leases 

IFRS 15 – Revenues from contract with customers 

IAS 16 – Property, plant and equipment 

IAS 38 – Intangible assets 

IAS 19 – Employee benefits (more specifically on post-employment benefits) 

The section below considers special considerations, as well as the nuances and details on 
procedures to be done in relation to IAS 19 – employee benefits (more specifically on post-
employment benefits).  

Special considerations for IAS 19 – Pension 

As per Implementing Regulation (EU) 2019/317, Art. 22.4 (a), pension costs shall be 
calculated using prudent assumptions based on the applicable pension scheme or on national 
law, as appropriate. Those assumptions shall be specified in the Performance Plan. 

As per IAS 19, IFRS establishes the principle that the cost of providing employee benefits 
should be recognised in the period in which the benefit is earned by the employee, rather than 
when it is actually recorded as a payable. 

The main employee benefits covered by IAS 19 are the following:  

–  Short term benefits, which mainly relate to regular salary, banked vacations, bonuses; 

–  Post-employment benefits that mainly concern pensions, and 

66 

 
 
 
–  Other employee benefits which mainly concern medical insurance at retirement, 

employee benefits provided for the termination of an employee, etc. 

The post-employment benefits is usually the area where the accounting treatment used by the 
ANSP would differ from the requirement of IFRS because of the complexity of the requirement 
of IAS 19. For this reason, the following section will focus on post-employment benefits.  

Pension pillar 

Pension schemes are often described by three different pillars which are all covered by the 
scope of IAS 19: 

− 

− 

− 

the first pillar refers to pension schemes that are provided to individuals by the State;  

the second pillar refers to pension schemes provided to individuals by the employer 
(also called occupational schemes); 

the third pillar refers to pension schemes that are individually built, therefore without a 
direct involvement from the State or the employer. 

Types of pensions 

There are 2 basic types of pension schemes:  

1.  Defined contribution (DC): The entity pays every year a fixed amount of contributions into 
a Fund but has no obligation to make additional payments if the Fund has not enough 
money to pay the benefits later, or for any other reason. If the investment returns are 
poor, the entity does not have to make any further payments to the employee. 

2.  Defined benefits (DB): The entity has an obligation to provide benefits to employees (past 

and current) for an agreed upon amount in the future, once the employee retires. Would 
the entity build a Fund, it would bear the risk of market fluctuations.  

First pillar schemes are not a separate category of pension schemes as per IFRS rules. In the 
majority of Member States contributing to the first pillar schemes, the plans are considered to 
be Defined Contribution plans as the burden of the retirement payments falls on the Member 
State itself and not on the ANSP.  

Second pillar schemes are either DB or DC plans offered by the employer, here the ANSP. 
Each plan has to be analysed in depth to assess whether it is a DB or a DC plan.  

− 

− 

In some cases, minimum guaranteed return on contributions made to an occupational 
pension plans that are also a defined contribution plans are required by law which 
creates an obligation for the employer. Those plans would be considered as partly DB 
plans and partly DC plans under IFRS (for example, in Belgium). 

In some cases, ANSP offering occupational DB plans to their employees could still be 
relieved of their obligation to meet defined future payments, in which case the plan 
would be considered a DC plan under IFRS (for example, in Finland and in The 
Netherlands). 

Third pillar schemes are almost exclusively DC plans.  

Accounting treatments for DC and DB plans 

The following section details the accounting treatment that follows the requirements of IAS 
19. 

67 

 
  
1.  Accounting for DC plans:  

The yearly fixed contributions to the plan are the pension costs of the period that will be 
included in the income statement. Under IFRS presentation, it will be included in the note 
“Employee Benefits”.  

2.  Accounting for DB plans:  

As the entity guarantees an amount of money at retirement to its employees, it has to build 
today a pension obligation for the future and reassess the yearly cost of that obligation.  

IAS 19 requires the entity to use the ‘projected unit credit method’ to calculate the obligation 
and the yearly service cost. This method estimates how much the employees have earned for 
their work in the current and prior periods, to attribute the benefit to the periods of service 
and to incorporate estimates about demographic and financial variables (“actuarial 
assumptions”) into calculations. Generally, this calculation is done by actuaries.  

Defined benefit costs recorded in the income statement under IFRS are different from the 
contributions really made to the pension fund or the benefits paid out to retirees.  

The cost in income statement of a DB scheme mainly consists of two parts:  

-  The accrual of an additional year of benefits by staff members (the current service cost); 

and,  

-  Cost related to the removal of one year of discounting until retirement benefits need to be 

paid (the interest expense). 

In a well-managed fund, it is generally expected that the amount paid into the plan during the 
year is at least equal to the service cost calculated under the projected unit credit method. 

Nuances and details on procedures to be done 

1.  Verification of DC plan 

For the verification of defined contributions pension schemes, the pension cost calculation is 
rather straightforward and a reconciliation of costs accounted for with the insurance plan is 
sufficient.  

Special attention should be paid to any returns guaranteed under a DC plan, as it might be in 
substance a DB plan, which requires an adjustment for the purpose of their regulatory 
reporting.  

We are listing below some known differences and attention points between Local GAAP and 
IFRS; please note that this list is not exhaustive:  

- 

In local GAAP, there might not be a need to obtain an actuarial calculation for the future 
benefits (for example, in the Netherlands).  

-  Even if an actuarial calculation is done, it might not use the projected unit credit method 

which would therefore impact the expense amount. 

-  The post-employment benefits are usually not subject to an actuarial report under local 

GAAP and will be paid when incurred; they are however in the scope of IAS 19.  

68 

 
 
 
-  Remeasurement of obligation has to be recorded in equity under IFRS and not in the P&L, 

similar to several Local GAAPs. 

-  Some plans are DC under Local GAAP, but are in substance DB for the purpose of IAS 19. 

2.  Verification of DB plans: 

For the defined benefits pension schemes, IAS 19 requires the entity to use the ‘projected unit 
credit method’ to calculate the service cost (one of the component of expenses related to a 
defined benefits scheme).  

The verification procedures to be performed is different depending on whether of not the 
ANSP reports its pension cost in the Reporting Tables as per the same accounting framework 
as their audited financial statements or not.  

For ANSPs reporting pension costs as per the same accounting method as in their financial 
statements, the pension costs will have been validated in the context of the statutory audit of 
their financial statements. In that case, a reconciliation by the NSA of reported pension costs 
with the insurance plan is sufficient.  

For ANSPs reporting pension costs as per a different accounting methodology than in their 
financial statements (would they make an adjustment to get closer to the IFRS principles for 
example), these reported pension costs were not validated in the context of the statutory 
audit of their financial statements. In that case, the NSA needs to review the actuarial reports 
and validate the assumptions reasonability:  

-  Obtain the actuarial evaluation that was done by the ANSP; 

-  Understand how the service cost is calculated; 

-  Understand the assumptions used by the actuaries and validate the assumptions 

reasonability (sensitivity analysis); and, 

-  An independent actuarial review of the ANSP could be of interest if the amount is very 

significant or could represent a high risk. 

IAS 20 – Governmental assistance 

The section below considers special considerations, as well as the nuances and details on 
procedures to be done in relation to IAS 20 – Governmental assistance.  

Special considerations for IAS 20 - Governmental assistance 

As per Implementing Regulation (EU) 2019/317, Art. 25.3 (a), the following revenues of air 
navigation service providers obtained in year n shall be deducted from the determined costs 
as ‘other revenue’: Public funds obtained from public authorities, including financial support 
from Union assistance programmes; public funds covering staff costs and other operating 
costs shall be deducted from the determined costs no later than in year n+2. Public funds 
covering depreciation costs shall be deducted from the determined costs in accordance with 
the depreciation schedule of the financed asset (duration and annuity). 

As per IAS 20, governmental grants (EU, national funding or any other public fund) are to be 
reported under other operating income as they do not arise in the normal course of activity and 
are therefore out of the scope of IFRS 15 (Revenues from contract with customers).  

69 

 
 
 
IAS  20  rejects  a  ‘capital  approach’,  under  which  a  grant  is  recognised  outside  profit  or  loss 
(typically credited directly to equity), in favour of the ‘income approach’. 

There are 2 main types of governmental assistance: 

1.  Grant to cover the acquisition of an asset: IFRS allows for two accounting treatments to 

account for a grant that covers the acquisition of an asset :  

a.  Accounting treatment 1: The assistance directly reduces the cost base of the asset, 

lowering consequently the future depreciation charges; or, 

b.  Accounting treatment 2: The assistance is deferred into a liability account and 
recognised over the same period of time as the depreciation of the asset. 
Attention, usually this is presented in “other operating expense/income” and not 
directly in reduction of the depreciation charge. 

Each of these accounting treatments would have the following impact:  

-  Accounting  treatment  1:  This  accounting  treatment  requires  some  additional 
information and more verification work from the NSA to identify the historical cost 
of the asset. 

-  Accounting treatment 2: This accounting treatment presents the historical cost in a 
more transparent way, leaving the historical cost of the asset unchanged. Therefore 
this does not require a lot of additional verification work from the NSA.  

2.  Grant to cover costs (income): 

To account for a grant that cover costs, (the grant is provided to reimburse costs incurred 
or to be incurred) the grant is recognised in the income statement in the periods when the 
costs are incurred. 

Nuances and details on procedures to be done 

–  For ANSPs already complying with IFRS, it is highly probable that ANSPs will already 
present information related to the grant in the notes to their financial statements. 
However, the following should be considered to ensure proper compliance with the 
Regulation:  

-  Understand which accounting treatment was selected in the case of a grant to cover 
the acquisition of an asset : accounting treatment 1 or accounting treatment 2 

- 

- 

If the accounting treatment 1 is selected, obtain additional information to validate 
the  historical  cost  and  the  grant  (as  the  historical  cost  would  be  reduced  by  the 
grant). 

If  the  accounting  treatment  2  is  selected,  validate  the  classification  of  the 
recognition of the deferred revenue as it should be in reduction of the depreciation 
charges. 

For  ANSPs  not  complying  with  IFRS,  please  refer  to  the  Verification  Programme  for  the 
necessary verification steps. 

70 

 
 
 
 
IFRS 16 – Leases 

The section below considers special considerations, as well as the nuances and details on 
procedures to be done in relation to IFRS 16 – Leases. 

Special considerations for IFRS 16 - Leases 

As per Implementing Regulation (EU) 2019/317, the following articles are noted:  

–  Art. 22.4 (b): Operating costs other than staff costs shall include costs incurred for the 
purchase  of  goods  and  services  used  to  provide  air  navigation  services,  including 
outsourced  services,  material,  energy,  utilities,  rental  of  buildings,  equipment  and 
facilities, maintenance, insurance costs and travel expenses. 

–  Art. 22.4 (c): Depreciation costs shall include costs related to the total fixed assets in 
operation for the purpose of providing air navigation services. The value of fixed assets 
shall be depreciated in accordance with their expected operating life, using the straight-
line method applied to the costs of the assets being depreciated. 

–  Art.  22.4  (d):  Where  air  navigation  service  providers  incur  costs  from  leasing  fixed 

assets, those costs shall not be included in the calculation of cost of capital. 

IFRS 16 is a new standard that is effective since 1 January 2019 which introduces a broader 
definition  of  leases.  The  general  idea is  that  every  item  (tangible  or intangible)  for which  an 
entity is paying a rental amount would be considered a lease.  

IFRS 16 would have the following impact in the ANSP’s financial statements:  

–  At the beginning of the lease, entities would recognise a “right-of-use” asset and a 

corresponding lease liability of the same amount. This is calculated by discounting the 
future cash flow using an specific discount rate;  

–  Reduce the operating cost for the amount of the rental payment (now capitalised in a 

right-of-use asset); 

– 

Increase the depreciation due to the right-of-use asset; 

–  Finance costs related to the removal of one year of discounting until the end of the 

lease (the interest expense). 

Nuances and details on procedures to be done 

For ANSPs already complying with IFRS, new requirements from IFRS 16 may complicate the 
grouping of costs by nature and the calculation of the cost of capital. The two steps below are 
procedures to be done or at least to be considered as attention points :  

–  The NSA should enquire as to what accounting treatment the ANSP has selected for 

the purpose of the reporting tables : IFRS 16, or alternative treatment. 

–  The NSA should validate that the interest impact of IFRS 16 shall be included in the 
operating expense to ensure consistency with the calculation of the cost of capital.  

For ANSPs not complying with IFRS, the majority of entities using Local GAAP would already 
be compliant with the EU regulation and include their rental costs in the operating costs. 

71 

 
 
 
 
IFRS 15 – Revenues from contract with customers 

The  section  below  highlights  special  considerations,  as  well  as  the  nuances  and  details  on 
procedures to be done in relation to IFRS 15 – Revenues from contracts with customers. 

Special considerations for IFRS 15 - Revenues from contract with customers 

As  per Implementing  Regulation  (EU)  2019/317,  Art.  25.3  (a),  the  following  revenues  of  air 
navigation service providers obtained in year n shall be deducted from the determined costs as 
‘other  revenue’: (a) public  funds  obtained  from public  authorities, including  financial  support 
from Union assistance programmes. Public funds covering staff costs and other operating costs 
shall be deducted from the determined costs no later than in year n+2. Public funds covering 
depreciation  costs  shall  be  deducted  from  the  determined  costs  in  accordance  with  the 
depreciation schedule of the financed asset (duration and annuity).  

IFRS 15: Revenue recognition is a new standard that is applicable as from 1 January 2018. As 
per the requirement of IFRS 15, entities are required to present in their financial statements, 
the  amount  of  revenue  recognised  from  contracts  with  customers  separately  from  other 
sources of revenue.  

The main aim of IFRS 15 is to recognise revenue in a way that shows the transfer of goods and 
services promised to customers in an amount reflecting the expected consideration in return 
for those goods or services. 

To  make  it  systematic,  IFRS  15  requires  the  application  of  a  five-step  model  for  revenue 
recognition: 

1)  Identifying the contract with the customer; 

2)  Identifying the distinct performances obligations; 

3)  Determining the transaction price; 

4)  Allocating the transition price to the performances obligations; and, 

5)  Recognising the revenues when the performances obligations are met. 

An essential characteristic of a performance obligation is the word “distinct”. Simply said, 
distinct means separable or separately identifiable.  

The price of the transaction is then allocated to the distinct performance obligations and 
revenue is recognised when the performance obligation is met either at a point in time or over 
time. 

Nuances and details on procedures to be done 

IFRS 15 does not have a significant impact over the accounting for en route and terminal 
revenue streams compared to the majority of Local GAAP or to the previous IAS 11.  

For ANSPs already complying with IFRS, IFRS 15 is in line with the EU Regulation and does not 
require adjustment in the reporting of the revenues.  

For ANSPs not complying with IFRS, the NSA may ask the ANSPs to provide an IFRS 15 
analysis to justify that no adjustment should be made to the reporting tables for en route and 
terminal charges. 

72 

 
 
 
 IAS 16 – Property, plants and equipment 

The section below considers special considerations, as well as the nuances and details on 
procedures to be done in relation to IAS 16 – Property, plants and equipment. 

Special considerations for IAS 16 – Property, plants and equipment 

As per Implementing Regulation (EU) 2019/317, Art. 25.4 (c), depreciation costs shall include 
costs related to the total fixed assets in operation for the purpose of providing air navigation 
services. The value of fixed assets shall be depreciated in accordance with their expected 
operating life, using the straight-line method applied to the costs of the assets being 
depreciated. Historical or current cost accounting shall be applied for the calculation of the 
depreciation. The methodology used to calculate depreciation costs shall not be altered during 
the duration of the depreciation and shall be consistent with the cost of capital applied, that is 
to say nominal cost of capital for historical cost accounting and real cost of capital for current 
cost accounting. 

(a) Recognition of the PPE  

Property, plant and equipment are tangible items that are held for use in the production or 
supply of goods or services and are expected to be used during more than one period.  

IAS 16 states that the cost of an item of property, plant and equipment shall be recognised as 
an asset if, and only if: 

– 

It is probable that future economic benefits associated with the item will flow to the 
entity; and, 

–  The cost of the item can be measured reliably. 

This recognition principle is applied to all property, plant, and equipment costs at the time 
they are incurred. These costs include costs incurred initially to acquire or construct a PPE 
and costs incurred subsequently replace certain parts.  

(b) Initial measurement 

A PPE shall be measured at its cost. The cost of an item of property, plant and equipment 
comprises: 

– 

Its purchase price, including import duties, non-refundable purchase taxes, after trade 
discounts and rebates; 

–  Any costs directly attributed to bringing the asset to the location and the necessary 
condition for it to be capable of operating in the manner intended by management; 
and, 

–  The initial estimate of the costs of dismantling and removing the item and restoring the 

site on which it is located. 

Costs of the different components of a PPE should be accounted for and subsequently 
depreciated on a stand-alone basis (called the component approach). 

Examples of directly attributable costs (i.e. that should be capitalised and then depreciated) 
are:  

–  costs of employee benefits arising directly from the construction or acquisition of the 

item of property, plant and equipment; 

73 

 
 
–  costs of site preparation;  

– 

– 

initial delivery and handling costs; 

installation and assembly costs; 

–  costs of testing whether the asset is functioning properly, after deducting the net 

proceeds from selling any items produced while bringing the asset to that location and 
condition (such as samples produced when testing equipment); 

–  professional fees. 

Examples of costs that are not costs of an item of property, plant and equipment (i.e. that may 
not be capitalised and then depreciated) are:  

–  costs of opening a new facility; 

–  costs of introducing a new product or service (including costs of advertising and 

promotional activities); 

–  costs of conducting business in a new location or with a new class of customer; 

–  costs of staff training; 

–  administration and other general overhead costs (unless it is directly attributable to 

the item, which is generally difficult to demonstrate). 

(c)  Subsequent measurement 

Following the initial measurement of the PPE, the subsequent measurement is done depending 
on the accounting treatment selected by the entity.  

–  Accounting treatment 1 - Cost model: The PPE will be valued at its cost less any 

accumulated depreciation.  

–  Accounting treatment 2 - Revaluation model: The PPE will be periodically revalued. The 
revalued amount is its fair value at the date of the revaluation less any subsequent 
accumulated depreciation and subsequent accumulated impairment losses. The 
Regulation allows for the use of “current cost accounting” however, nothing specifies 
that current cost accounting is an equivalent to fair value.  

Additional capitalisation is usually not possible after the asset started to be used. Additional 
capitalisation can only be done if it is to replace a component of the asset, in which case the 
original cost and accumulated depreciation would be replaced by the new component  

(d) Depreciation  

Depreciation is defined as the systematic allocation of the depreciable amount of an asset 
over its useful life.  

An entity may select from variety of depreciation methods, such as straight-line method, 
diminishing balance method and the units of production methods. 

The useful life is the period over which an asset is expected to be available for use by an 
entity. Useful life shall be reviewed at least at the end of each financial year. 

Examples of useful life per type of PPE :  

•  Offices or building 

between 10 and 50 years 

•  Car 

between 3 and 5 years 

74 

 
 
 
  
 
•  Office furniture  

between 5 and 10 years 

•  Computer hardware 

between 2 and 5 years 

•  Computer software 

between 1 and 3 years9  

These useful life are presented for information purposes only, as each entity shall establish 
the expected amount of time it expects to use the asset, based for example on their historical 
data.  

(e) Impairment 

The core principle in IFRS is that if the carrying amount (book value) exceeds the recoverable 
amount, the asset is described as impaired. Impairment would be accounted for as an expense 
in “other operating expense”. 

Attention point on assets under construction (AUC):  

The recognition principle mentioned above applies also for AUC.  

The cost incurred to construct a PPE would be generally accumulated the same way under the 
majority of local GAAP as there is not too many restriction under IFRS. Once completed the 
AUC would be transferred to another category of PPE. In both cases, they would be included in 
the PPE line in the balance sheet and presented separately in the disclosure note.  

Under IFRS, there would not be any depreciation as long as the asset stays “under 
construction”. So that means that the net book of a AUC would always be its cost, unless it’s 
impaired because it will not be used anymore.  

Nuances and details on procedures to be done 

There are three main points that are different between the IFRS and the EU Regulation:  

1)  Definition of useful life:  

It is unclear how the requirement of the Implementing Regulation 2019/317 defines the 
“expected operating life” and might be different from the useful life as per IFRS. 

As per IFRS, the useful life is the period over which an asset is expected to be available for 
use by an ANSP.  

2)  Component approach: 

IFRS requires a component approach in which each component of an asset with a 
substantial cost in relation to its total cost is depreciated separately (if they have different 
useful lives).  

It is also unclear if the component approach is handled under the Regulation; however, the 
approach does not seem to be in contradiction with the Regulation.  

3)  Depreciation method: 

The depreciation method is not a choice under the Regulation and the depreciation period 
is not reviewed at least at each financial year-end.  

4)  Revaluation model : 

The Revaluation mode is not accepted under the Regulation. 

9 It can be reasonable to expect a longer depreciation period for ATM software than for usual computer software. 

75 

 
 
 
 
 
 
For ANSPs already complying with IFRS, the following verification procedures should be 
performed: 

–  Capitalisation of PPE and useful life for the depreciation method are already validated 

by the external auditors based on IFRS requirements. 

– 

Impairment or necessity of impairment is already validated by the external auditors 
based on IFRS requirements. 

–  Validate the ANSP’s adjustment to adjust for the useful life to align with the expected 

operating life as defined in the Regulation (if any). 

–  Validate the ANSP’s adjustment to the depreciation method to comply with the 

Regulation (if any). 

–  Validate that the no alteration of the depreciation method was done. 

For ANSPs not complying with IFRS, the following should be done: 

–  Capitalisation and depreciation method are validated by the external auditor based on 

local GAAP requirements. 

– 

Impairment or necessity of impairment is already validated by the external auditors 
based on local GAAP requirements. 

–  Validate that the local book depreciation period is in line with the “expected operating 

life” as defined in the Regulation. 

–  Validate the adjustment made to comply with the Regulation should they be using the 

declining depreciation method (or any other).  

IAS 38 – Intangible assets 

The section below considers special considerations, as well as the nuances and details on 
procedures to be done in relation to IAS 38 – Intangible assets 

Special considerations for IAS 38 - Intangible assets 

Implementing Regulation (EU) 2019/317 is silent on the treatment of the intangible assets 
(internally generated or purchased), as well as their related amortisation.  

Under IAS 38 - Intangible assets, there is a distinction between separately acquired intangible 
assets (e.g. purchase of a software package) and internally generated intangible assets (e.g. 
internal development of the software). The measurement differs for these two types of 
intangible assets. 

IAS 38 requires an entity to recognise an intangible asset, whether separately acquired or 
internally generated (at cost) if, and only if:  

– 

– 

it is probable that the future economic benefits that are attributable to the asset will 
flow to the entity; and 

the cost of the asset can be measured reliably.  

Separately acquired intangible assets can be, for example, software, trademarks or patented 
technologies.  

76 

 
 
 
IAS 38 includes additional recognition criteria for internally generated intangible assets:  

Development costs can only be capitalised as internally generated intangible if there is a plan 
in place demonstrating that the following 6 criteria are met:  

–  The technological feasibility 

–  The probable future benefits 

–  The intention to use or sell the intangible asset 

–  The ability to use or sell the intangible asset 

–  The resources to complete the intangible asset, and 

–  The ability to measure costs.  

This implicitly means that all costs incurred during the research phase, prior to the 
development phase, cannot be capitalised.  

These criteria under IFRS are very restrictive and require a thorough analysis to justify that 
the development costs are eligible for capitalisation. When the criteria are met, all costs 
directly attributable to the development phase can be capitalise. Usually, these directly 
attributable costs represent mainly cost of payroll.  

Once the asset is ready for use or starts to be commercialised, capitalisation shall stops. 
Subsequent costs are more difficult to capitalise under IFRS, as they are assumed to only 
maintain the asset and not improve it as it is already in use. 

Examples of directly attributable costs (i.e. that should be capitalised and then depreciated) 
are:  

–  costs of materials and services used or consumed in generating the intangible asset; 

–  costs of employee benefits arising from the generation of the intangible asset; 

– 

fees to register a legal right; and 

–  amortisation of patents and licences that are used to generate the intangible asset. 

The following are not components of the cost of an internally generated intangible asset (i.e. 
that may not be capitalised and then depreciated):  

–  selling, administrative and other general overhead expenditure unless this expenditure 

can be directly attributed to preparing the asset for use; 

– 

identified inefficiencies and initial operating losses incurred before the asset  

–  expenditure on training staff to operate the asset. 

Nuances and details on procedures to be done 

The following verification shall be performed by the NSA :  

-  Obtain an understanding of the project for which the cost are capitalised; 

77 

 
 
 
 
-  Obtain a justification that all criteria are met for capitalisation following the requirement of 

IAS 38; 

-  Assess the date where the capitalisation stops and amortisation starts and validate that no 

additional capitalisation happens after the start of the amortisation. 

78 

 
 
Annex 2: Verification Programme Toolkit 

•  Tool 1: Letter of Announcement 

•  Tool 2: Documents to Request 

•  Tool 3: Pre-Field Questionnaire  

•  Tool 4: Reporting Template  

•  Tool 5: Investments Verification  

•  Tool 6: Preliminary Risk Assessment and Sampling 

•  Tool 7: VP Operational Checklist 

 
 
 
 
 
 
 
 
 
 
 
 
 
Annex 3: Monitoring process for the Commission 

 
 
 
 
 
 
Directorate-General for Mobility and Transport 
(DG MOVE) 
Request for Services   
(ref. Ares(2019)4503007)  
under Framework Contract  
MOVE/E3/2016-401 for assistance for  
the implementation of performance and  
charging schemes for the single  
European sky for oversight  
competences 

09 June 2020 
Draft Monitoring Process for the Commission 
(Task 2B of the Work Plan) 

Framework Contract: 

Specific Contract: 

Commission service: 

Task: 

Version of deliverable: 

Date of the version: 

MOVE/E3/2016 – 401 

MOVE/E3/SER/2018 – 319/SI2.811081 

DG MOVE 

2B of the Work Plan 

1.3 

09 June 2020 

1 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Table of Contents 

1 

INTRODUCTION AND LEGAL CONSIDERATIONS .................................................................... 3 

2  MONITORING PROCESS ........................................................................................................ 4 

2.1 

2.2 

PROPOSED PROCESS FLOW ........................................................................................... 4 

PROCESS ACTIVITIES AND POTENTIAL ASSUMPTIONS ............................................................ 5 

2.2.1  PHASE 1 – RECEIVING INFORMATION FROM THE NSAS.......................................................... 5 

2.2.2  PHASE 2 – ANALYSIS EC ............................................................................................. 6 

2.2.3  PHASE 3 – REPORTING ............................................................................................... 8 

2.2.4  CONSIDERATIONS ON RESOURCES .................................................................................. 8 

ANNEX 1 ................................................................................................................................... ..9 

2 

 
 
 
 
 
 
1 

Introduction and legal considerations 

The ECA concluded in their Special Report 18/2017 that the Commission and the NSAs should regularly 
conduct the inspections set out in the current legislation, covering in particular the eligibility of costs 
charged and their allocation between en-route and terminal charging zones.  

The Commission accepted the recommendation raised by the ECA but noted that the verification of the 
eligibility of costs is primarily in the remit of NSAs as entities responsible for the drawing up of the 
performance plans, the performance oversight and the monitoring of performance plans and targets. 
As a modality to implement the ECA recommendation, the Commission noted that its intervention could 
for example be focused on cases where Member States have asked the revision of their performance 
plans. Also, the Commission will review the eligibility requirements during the revision of the 
Regulations ahead of RP3.  

Based on our terms of reference, a monitoring process for DG MOVE on verifications performed by the 
NSAs should be developed. We understand that such a monitoring process from the EC regarding how 
the NSAs are performing the required inspections as regards cost-eligibility will help address this ECA 
recommendation by making more transparent the verification activities of the NSAs, their scope and 
frequency.  

The monitoring process of DG MOVE is supported from a legal standpoint by the EC obligation to 
provide for the ongoing review of compliance with the principles and rules referred to in Articles 14 and 
15 of Regulation (EC) 550/2004, as stipulated in Article 16 of the Service Provision Regulation. As 
regards the NSAs, according to Article 2 of the mentioned Regulation, they have the task of organising 
inspections and surveys to verify compliance with the requirements of the Service Provision 
Regulation1.  

In performing a review and monitoring process, the EC needs however to act in cooperation with the 
Member States. We recognise therefore that the monitoring process activities should be integrated into 
the annual reporting cycle and designed in an efficient manner in order to achieve the monitoring goals 
without increasing the workload of national authorities concerned. 

1 We note that The ECA Report is referencing the legal framework for RP2 when referring to inspections and surveys, and 
specifically Article 20 of Regulation (EU) No 391/2013. For RP3, we refer to recital (7) of Regulation (EU) 2019/317 .  
However, we retain the provisions of the Service Provision Regulation as the underlying legal basis for the EC obligation to 
provide for the ongoing review of compliance. 

3 

 
 
 
 
2  Monitoring process 

2.1  Proposed process flow 

The proposed process flow presented in this section summarises the main activities envisaged to be 
performed in the context of an EC monitoring process for the verifications performed by the NSAs in 
the area of cost-eligibility.   

4 

 
 
 
2.2  Process activities and potential assumptions 

As foreseen in the terms of reference, the monitoring process is designed for the monitoring of the 
verifications performed by the NSAs in the area of cost-eligibility. The process will provide tools to 
monitor: 

–  The design of the verification programme put in place by the NSAs 
–  The operating effectiveness of the verification programme put in place by the NSAs 
–  The reporting and follow-up of the findings of the verification programme put in place by the 

NSAs. 

The end objective of the process is the preparation of a set of concrete recommendations to NSAs, 
meant to support them to increase compliance in the area of cost-eligibility verifications.  

Considering the above elements, different assumptions can be considered as regards the 
implementation of such a process. 

Assumptions - examples 

Scope assumptions 

Frequency assumptions 

►  The monitoring process can cover all elements (design, operating 

effectiveness and reporting) of the NSAs verification programme or 
can focus on one or two of these elements.  

►  The process can consider all NSAs for monitoring, or it can consider a 

sample of NSAs. 

►  The process can be rolled out annually or can be implemented with a 

periodicity of more than one year. 

►  The process can be implemented concurrently with the annual 

reporting process (submission of the reporting tables by the NSAs in 
June and November each year) or using some other trigger event. 

In sections 2.2.1 to 2.2.3 below we present the implications of these assumptions in terms of how they 
affect each phase of the process flow depicted in section 2.1. 

In section 2.2.4 we present some considerations regarding the needed resources for the 
implementation of the monitoring process.  

2.2.1  Phase 1 – Receiving information from the NSAs 

The process starts with a request for information sent by DG MOVE to the NSAs, which contains the 
request to cooperate and includes several information to be provided by the NSAs, such as the 
Monitoring Questionnaire.  

If the process is implemented concurrently with the annual reporting process, the NSA can provide this 
information together with the Reporting tables sent to the Commission.  

The information to be provided can be submitted as: 

–  A Monitoring Questionnaire: an excel sheet with standardised questions, to be filled in by the 
NSA and submitted to EC at the start of the process once the EC sends out the initial formal 
request, containing the NSA replies to questions on the areas being monitored, and 

–  A ‘verification package’: which represents any other documentation that will be relevant for the 

monitoring process and that the NSA is favourable on sharing.  
For example,  the NSA could share a summary of the verification activities performed as 
regards the reporting tables submitted in June year n and results of NSA other cost eligibility 
audits performed between June in year n-1 and June year n. This could be done in a template 
excel file provided by DG MOVE (refer to Annex 1 – Overview of findings).  

5 

 
 
The Monitoring Questionnaire can include questions meant to cover all elements (design, operating 
effectiveness and reporting) of the NSAs verification programme, or only questions related to one or 
two of these elements. The Monitoring Questionnaire may include the following questions (the below 
are examples): 

Monitoring Questionnaire 

Design of the 
verification 
programme  

(A) 

The operating 
effectiveness of 
the verification 
programme put in 
place by the NSAs 

(B) 

The reporting and 
follow-up of the 
findings of the 
verification 
programme put in 
place by the NSAs 

(C) 

1.  Does the NSA actually perform verification process based on the 

verification programme for the cost-eligibility in place? 

2.  Are all legal requirements from Regulation (EU) 2019/317 and Regulation 
(EC) 550/2004 reflected in the verification programme? (question will be 
specific, listing at least the critical ones) 
Is the use of the verification programme formalised at the level of the NSA? 

3. 

1.  How many cost-eligibility verifications were done by the NSA in the prior 

year? (i.e. between June in year n-1 and June year n) 

2.  Were the costs of new and existing investments in scope of the 

verifications done, in respect of the purchase, development or leasing of 
fixed assets (Recital 15 of Regulation (EU) 2019/317)? 

3.  Did the cost-eligibility verifications performed by the NSAs result in any 

findings? 

1.  Have the conclusions of the NSA cost-eligibility verifications been 

formalised in factual findings reports? 

2.  Have the conclusions of the verifications been shared with the ANSPs and 

the latter provided with the opportunity to present comments? 

3.  Did the NSA provide the ANSP with the factual findings following the cost-

eligibility verifications? 

4.  How many factual findings were issued? 
5.  On what areas where these factual findings issued? 
6.  Did the NSA follow-up on the implementation by the ANSP of the 

remediation action?  

For the first run of the monitoring process, it would be preferable to have an approach to collecting 
data that includes a full-scope Monitoring Questionnaire (i.e. all elements, design, operating 
effectiveness and reporting) and to be addressed to all NSAs. Using this approach, the scope of the 
subsequent monitoring cycle could be narrowed down by collecting data only from the NSAs that did 
not reach a certain score in the analysis, and only for the areas that they need to improve.  

2.2.2  Phase 2 – Analysis EC 

The analysis phase of the monitoring process entails the filling-in by the EC of a Monitoring checklist per 
NSA.  

The Monitoring checklist is designed as an excel file which has as input: 

– 

the replies of the NSAs to the standard questions in the Monitoring Questionnaire and 

–  any other technical considerations of the person doing the analysis, that will impact the scoring 

of the NSA. This may be technical shortcomings identified previously in RP2 for example, with 
regards to the verification practices of the respective NSA.   

The replies of the NSA to the standard questions in the Monitoring Questionnaire will automatically 
assign certain scores in the Monitoring checklist which will generate two results: 

1. A scoring grid which aims to sort the NSAs based on a risk-based approach. 

6 

 
 
(N.B. In setting the scoring grid, we recognise the need to further reflect on what represents 
compliance with regulations vs. what is only recommended practice.) 

For example, a scoring grid of 1-3 can be used (with 1 - ‘not compliant’, 2 – ‘partly compliant’ and 3 - 
‘compliant’):  

Scoring example 

Question 

The 
operating 
effectiveness 
of the 
verification 
programme 
put in place 
by the NSAs 

1.  How many cost-eligibility verifications were done by 
the NSA in the prior year? (i.e. between June in year 
n-1 and June year n) 

2.  Were the costs of investments in scope of the 

verifications done? 

3.  Were the costs under the cost risk sharing 
mechanism (Article 28 of Regulation (EU) 
2019/317) in scope of the verifications done? 

Reply 

Score 

1 

No 

Yes 

3 

1 

3 

An overall scoring will be then calculated automatically for each NSA.  

To get to the final overall score for the NSA analysed, a further score will be added manually by the 
person filling-in the Monitoring checklist, based on their judgement of the: 

– 

substance of any documents received in the ‘verification package’ and 

–  any other technical considerations of the person doing the analysis.   

In finalising the Monitoring checklist and reaching the final score, the NSA can still be queried on 
specific points that need clarification.  

Considering the overall score obtained by the NSA, the respective authority can be ranked as low, 
medium or high risk for compliance purposes and based on that can be included (partially or in full) or 
excluded from the scope of the next monitoring cycle. Partial inclusion would mean, for example, only 
collecting and analysing data on the area (design, operating effectiveness and reporting) that proved to 
be high risk. Medium risk-rated NSAs could be in scope for monitoring every two years instead of on an 
annual basis.  

Output of the scoring grid: The EC will have a clear view on which NSA has a well-built system for cost 
verifications and for inspecting the respective ANSPs periodically.  

2. An overview of findings and the deadlines for their implementation issued by the NSAs. 

This database will contain the NSAs raised factual findings generated from the NSAs cost verification 
reports and their respective deadlines put by NSAs for their implementation.  

Output of the Overview of findings2: This will allow the EC to monitor the effectiveness of the NSAs 
inspections. Each NSA will use the same format and completing a full database will allow the EC to have 
in depth analysis and generate the factual finding implementation ratio for each NSA. This will be an 
indicator for the EC to assess the performance of the NSAs’ inspections (No. of factual findings 
implemented/ No. of total factual findings identified). The higher the rate, the better is the NSA 
performing in its inspection competences. 

Outcome of Phase 2: The combined use of these two tools will allow the EC to monitor the NSAs from 
the procedures built but also the quality of their inspections. While the scoring grid will identify mostly 

2 Detailed in Annex 1 

7 

 
 
 
issues in the NSAs procedures, the database will allow the EC to check in details how the job was 
performed. The aim of this phase is not to put additional bureaucratical steps to each stakeholder of the 
process, rather building a system that will help each of the players monitor the performance of their 
work. 

2.2.3  Phase 3 – Reporting 

The reporting part of the monitoring process is the consolidation of the scores obtained by each NSA in 
scope in a Monitoring report. The report will be automatically created from the results in each of the 
Monitoring checklists. The purpose of the report is to have the overview of the status of compliance per 
NSA and per total NSAs analysed.  

Based on this, recommendations for the improvement of compliance will be developed. These can be 
addressed to specific NSAs and specific areas of non-compliance. Also, in case the aggregation of the 
scores indicates an overall ‘medium’ level of compliance in a certain area, recommendations can be 
issued to all NSAs, regarding that specific element.    

Carrying out the monitoring process annually is tantamount to having a continuous monitoring 
approach regarding the verification activities of the NSAs. However, a frequency of every two years (or 
more) can also be envisaged if, for example, the aggregate scoring indicates medium or low risk for 
certain NSAs or certain areas of interest in more than two consecutive years.  

2.2.4  Considerations on resources  

Among the possibilities for the implementation of the monitoring process presented in the previous 
sections, we consider the most resource-intensive the full-scope approach: the process is performed 
every year, with all NSAs in scope, with all elements to be monitored (design, operating effectiveness 
and reporting of the NSAs verification programme).  

Provided the process is implemented concurrently with the annual reporting process (submission of the 
reporting tables by the NSAs in June and November each year), the dedicated staff would need to: 

– 

receive the needed information in June (together with the reporting tables),  

–  perform the analysis in the period June – November (with any follow-up questions and 

considering the re-submission of the reporting tables with potentially new information in 
November) and  

– 

conclude in the period November – December (prepare and disseminate recommendations). 

Considering that the tools used (Monitoring Questionnaire and Checklist, as well as Monitoring report) 
are envisaged to be at least partly automated, we do not foresee that the work related to the 
compilation of the data will be significant. The most effort would be thus dedicated to the substantive 
analysis of the results and to the preparation of recommendations that reflect the scoring and ratings 
obtained.  

The limited scope approach, where the process is performed with a frequency of more than one year, 
with only some NSAs in scope, and with some elements to be monitored, would not change the activities 
to be performed as part of the process (the flow), but would decrease the time necessary for the overall 
implementation of the process.  

The monitoring activities can be outsourced as a stand-alone activity to an external consultant, with 
precise terms of reference. In this case, DG MOVE input and feedback would be required in critical 
points of the process flow, preliminary identified as: 

– 

– 

Initial request to the NSAs (a formal request from DG MOVE is needed) 

Identification and correct interpretation of the issues detected using the monitoring checklists 
(both at initial filling-in of the checklist and at the finalisation of the checklist) and 

8 

 
 
–  Drawing-up recommendations at the end of the monitoring process. 

9 

 
Annex 1 

Overview of findings 

No. 

Priority 
level of 
the 
finding3 

NSA ID  Country 

Inspected 
ANSP 

Period 
in 
scope 

Period of the 
verification 

Overview of the 
factual finding 

1 

Very 
Important 

XXX 

Austria  ABC 

RPX, 
yyyy 

dd/mm/yyyy – 
dd/mm/yyyy 

2 

Requires 
attention 

YYY 

Belgium  CDE 

RPX, 
yyyy 

dd/mm/yyyy – 
dd/mm/yyyy 

The Authority 
identified that the 
personnel costs 
included cost 
elements which 
are not compliant 
to the Regulation. 

The Authority 
identified that the 
personnel costs 
included cost 
elements which 
are not compliant 
to the Regulation. 

Deadline set 
for the 
implementation 

Cause of 
the 
factual 
finding 

dd/mm/yyyy  

dd/mm/yyyy  

Remediation 
action for 
the 
following 
year 

Detailed 
checks on 
the 
personnel 
costs 
calculation 
methodology 
used. 

High level 
checks on 
the 
existence of 
the cost 
centres. 

3 Ratings of the priority level are: Very important – Important – Of concern – Requires attention – Needs review. 

10 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annex 3: Monitoring process for the Commission 

•  Monitoring Report 

 
 
 
 
 
Annex 4: Training Material  

 
 
 
 
 
Assistance for  
the implementation of performance and  
charging schemes for the single  
European sky for oversight  
competences 

October 2020 
Training material 

LEGAL NOTICE  
This deliverable was developed by EY Réviseurs d’Entreprises SRL upon request of the European 
Commission under the specific contract MOVE/E3/SER/2018-319/SI2.811081 for assistance for the 
implementation of performance and charging schemes for the single European sky for oversight 
competences. 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Table of Contents 

ABBREVIATIONS ......................................................................................................................... 3 

INTRODUCTION ........................................................................................................................... 5 

1. OBJECTIVE OF THE VERIFICATION PROGRAMME AND OF THE TRAINING MATERIAL........................................ 5 
2. LEGAL BASIS – NSA ATTRIBUTIONS IN THE AREA OF COST-ELIGIBILITY ...................................................... 5 
3. STRUCTURE AND SCOPE OF THE VERIFICATION PROGRAMME AND OF THE TRAINING MATERIAL ........................ 6 

A.  DETERMINED COSTS ............................................................................................................ 9 

A.1 PLANNING PHASE .................................................................................................................. 9 
A.1.1 DEFINE OBJECTIVE AND SCOPE ......................................................................................... 10 
A.1.2 REQUEST INFORMATION FROM THE SERVICE PROVIDER ............................................................. 11 
A.1.3 PERFORM PRELIMINARY RISK ASSESSMENT AND SAMPLING ........................................................ 12 
A.2 EXECUTION PHASE ............................................................................................................... 17 
A.2.1 VERIFICATION OF COSTS BY NATURE (COST BASE ELIGIBILITY AND ACCURACY) ................................ 17 
A.2.2 VERIFICATION OF THE BOOKINGS OF COSTS ON COST CENTRES .................................................... 32 
A.2.3 VERIFICATION OF ALLOCATIONS ........................................................................................ 32 
A.2.4 VERIFICATION OF SPECIFIC LINES ....................................................................................... 35 
A.3 CONCLUSION PHASE ............................................................................................................. 42 
A.3.1 SUMMARISE DRAFT FINDINGS AND SHARE DRAFT FINDINGS WITH THE SERVICE PROVIDER .................... 42 
A.3.2 FINALISE VERIFICATION REPORT ....................................................................................... 43 
A.3.3 FOLLOW UP ON THE IMPLEMENTATION OF FINDINGS ................................................................. 44 

B.  ACTUAL COSTS ................................................................................................................. 45 

B.1 PLANNING PHASE ................................................................................................................. 45 
B.1.1 DEFINE OBJECTIVE AND SCOPE.......................................................................................... 46 
B.1.2 REQUEST INFORMATION TO THE SERVICE PROVIDER ................................................................. 47 
B.1.3 PERFORM PRELIMINARY RISK ASSESSMENT AND SAMPLING ........................................................ 47 
B.2 EXECUTION PHASE ............................................................................................................... 51 
B.2.1 VERIFICATION OF COSTS BY NATURE (COST BASE ELIGIBILITY AND ACCURACY) ................................ 51 
B.2.2 VERIFICATION OF THE BOOKINGS OF COSTS ON COST CENTRES .................................................... 69 
B.2.3 VERIFICATION OF ALLOCATIONS ........................................................................................ 71 
B.2.4 VERIFICATION OF SPECIFIC LINES, REVENUES AND ADJUSTMENTS ................................................ 75 
B.3 CONCLUSION PHASE ............................................................................................................. 96 
B.3.1 SUMMARISE DRAFT FINDINGS AND SHARE THEM WITH THE SERVICE PROVIDER ................................. 96 
B.3.2 FINALISE VERIFICATION REPORT ....................................................................................... 97 
B.3.3 FOLLOW UP ON THE IMPLEMENTATION OF FINDINGS ................................................................. 98 

1 

 
 
 
 
Abbreviations 

ANS 

ANSP 

ATCO 

Air Navigation Services 

Air Navigation Service Provider 

Air traffic controller 

ATM Systems 

Air Traffic Management Systems 

AuP 

CAPEX 

CEF 

CNS 

CRCO  

DG MOVE 

EC 

EU 

Agreed-upon procedures 

Capital expenditure 

Connecting Europe Facility 

Communication, navigation and surveillance services 

Central Route Charges Office 

Directorate-General for Mobility and Transport 

European Commission 

European Union 

Eurocontrol 

European Organisation for the Safety of Air Navigation 

FTE 

GA 

GL 

HICP 

HR 

IAS 16 

IAS 19 

IAS 38 

IACS 

ICAO 

IFRS 

IFRS 15 

INEA 

ISRS 4400 

IT 

MET 

Full-time equivalent 

Grant Agreement 

General ledger 

Eurostat Harmonised Index of Consumer Price 

Human resources 

International Accounting Standard 16 – Property, Plant and 
Equipment 

International Accounting Standard 19 – Employee Benefits 

International Accounting Standard 38 – Intangible Assets 

International Association of Classification Societies 

International Civil Aviation Organisation 

International Financial Reporting Standards 

International Financial Reporting Standards 15 – Revenue from 
Contracts with Customers 

Innovation & Networks Executive Agency 

International Standard on Related Services 4400 – Agreed-
upon Procedures Engagements 

Information technology 

Meteorological 

3 

 
NBV 

NSA 

OPEX 

P&L 

Net book value 

National supervisory authority 

Operating expense 

Profit and Loss 

Power BI Dashboard 

Power Business Intelligence Dashboard 

PRB 

QE 

RP 

RP2 

RP3 

SDM 

SES 

SESAR 

TEN-T 

TMA 

VFR 

Performance Review Body 

Qualified entity 

Reference Period 

Reference Period 2 

Reference Period 3 

SESAR Deployment Manager 

Single European Sky 

Single European Sky ATM Research 

Trans-European Transportation Network 

Terminal Manoeuvring Area 

Visual Flight Rules 

4 

 
 
Introduction 

1. Objective of the Verification Programme and of the Training Material 

The Verification Programme and the present Training Material are tools which aim to assist in 
the cost-eligibility verifications performed by National Supervisory Authorities (NSAs) as part 
of their oversight attributions. They are a continuation of the work done in the context of the 
‘Manual for the Verification of Air Navigation Services (ANS) Costs in the context of the Single 
European Sky Charging Scheme’1 and complement the latter by proposing a structured 
programme for verifications accompanied by step by step guidance. 

The main goal of the Verification Programme and of the Training Material is therefore to 
support the development of a structured and systematic approach for NSAs regarding the 
verification of the determined and actual ANS costs of Air Navigation Service Providers 
(ANSPs). The end users of these two tools (Verification Programme and of the Training 
Material) need to have basic accounting background as it will be an added value while 
performing the verification process. 

The need for this structured approach comes especially as a result of the recommendations 
issued by the European Court of Auditors (ECA) in a special report issued in 20172, which 
noted that the Commission and the NSAs should regularly conduct the inspections set out in 
the current Single European Sky (SES) legislation, covering in particular the eligibility of costs 
charged and their allocation between en route and terminal charging zones.  

2. Legal basis – NSA attributions in the area of cost-eligibility 

The NSAs are tasked with the realisation of verifications in the context of their oversight 
attributions. They are responsible for overseeing the implementation of the SES3 charging 
scheme requirements and, specifically, according to Art. 2 of Regulation (EC) No 550/2004 as 
amended by Regulation (EC) No 1070/2009, the NSAs need to “ensure the appropriate 
supervision” of the application of the Regulation, and to “organise proper inspections and 
surveys to verify compliance” with the Regulation. We consider this as the overarching legal 
basis for the cost-eligibility verifications to be performed by the NSAs. 

In the context the third Reference Period (RP3) of the EU performance scheme, the specific 
elements that need to be subject to the verification of NSAs are further included in the 
Commission Implementing Regulation (EU) 2019/317. We re-take these main elements below, 

1 Developed by EY upon request of the European Commission DG MOVE, March 2019. 

2 ECA Special Report No 18/2017, publicly available at: 
https://www.eca.europa.eu/Lists/ECADocuments/SR17_18/SR_SES_EN.pdf 

3 The SES legislative framework is complex and a comprehensive overview regarding this framework is not in the 
scope of the present text. We indicate for further reference the descriptions for this area included in the ‘Manual 
for the Verification of Air Navigation Services Costs in the context of the Single European Sky Charging Scheme’ 
and the regulatory texts themselves, out of which the most relevant ones for the present material are the 
Framework Regulation (EC) No 549/2004, the Service Provision Regulation (EC) No 550/2004 amended by the 
Regulation (EC) No 1070/2009, the RP2 Commission Implementing Regulations (EU) No 390/2013 and 391/2013 
and the Commission Implementing Regulation (EU) 2019/317 governing RP3. 

5 

 
 
 
 
as also presented in the ‘Manual for the Verification of Air Navigation Services Costs in the 
context of the Single European Sky Charging Scheme’: 

–  Recital 29 states that NSAs should verify that the established determined costs only 
comprise cost items that are eligible under the performance and charging scheme. 

–  Art. 22(7) states that the NSAs shall verify that the cost bases for en route and 

terminal charges are compliant with the requirements of Art. 15(2) of Regulation (EC) 
No 550/2004 as amended by Regulation (EC) No 1070/2009 and with Art. 22 of the 
Implementing Regulation (EU) 2019/317. For this purpose, the NSAs shall examine the 
relevant accounting documents, asset books and any other material relevant to the 
establishment of the cost base for charges. 

–  Art. 23 mentions that the provisions of Art.22 shall apply also to actual costs.  

–  Art. 28 sets the rules governing a cost risk sharing mechanism between the airspace 
users and ANSPs. This concerns the situation where the ANSP actual costs exceed or 
fall below the corresponding determined costs over a reference period. General 
principles assume that the difference is covered or retained by the ANSP or the 
Member State concerned. However, Art. 28(3) allows for notable exceptions, in 
particular related to unforeseen changes in several types of costs. 

–  Article 28(7) states that NSAs shall elaborate an annex to its annual performance 
monitoring report in which it reports the verification of the correct application by 
ANSPs of the provisions of Article 28. In the year after the final year of a reference 
period, the report shall include the balance over the reference period regarding 
variation of actual costs of the new and existing investments and costs associated with 
pension costs, interest on loan repayments, and law changes. 

These elements constitute the main legal reference for the specific objectives of the NSAs 
while performing cost-eligibility verifications. As such, the verification procedures included in 
the Verification Programme are built considering the need for compliance with these 
provisions. 

3. Structure and scope of the Verification Programme and of the Training Material 

Considering the general objective of offering a structured approach to cost-eligibility 
verifications, the Verification Programme and Training Material tackle several main areas that 
need to be covered by the checks of the NSAs, as presented in the below table. In order to 
ensure a consistent and coherent treatment of these areas of interest, the Verification 
Programme and of the Training Material are made of two parts (the verification of determined 
and of actual costs). Each part is made of three phases, being planning, execution and 
conclusion. The execution phases follow the relevant sections of the reporting tables from the 
Annexes of Implementing Regulation (EU) 2019/317: 

6 

 
 
 
 
Areas addressed: 

Sections in the reporting tables addressed: 

–  Reconciliation between the audited 

–  Table 1 (Annex VII of Reg. (EU) 

statutory financial statements and the 
regulated accounts of ANSP; 

–  Allocation between en route and terminal 

and between charging zones; 

–  Eligibility of determined costs for the 

second Reference Period (RP2) and RP3; 

–  Verification of actual costs for RP2 and 
RP3, in particular costs exempt from 
cost risk sharing mechanism; 

–  Deduction of other revenues from the 

determined costs. 

–  Verification that the unit rate submitted 
to the Commission in November is the 
same as the one published in the AIP4 
and applied by the CRCO.  

–  Verification that the performance targets 
set in the draft Performance Plan are 
consistent with the Union-wide 
performance targets. 

2019/317): 

o  Detail by nature and by service; 

o  Complementary information (asset 
base, cost of capital, common 
projects, investments, Eurocontrol 
costs). 

–  Table 2 (Annex IX of Reg. (EU) 

2019/317): 

o  Differences between determined and 
actual costs referred to in Art. 28(4) 
to 28(6); 

o  Other revenues – Union assistance 
programmes and National public 
funding. 

–  Table 3 (Annex IX of Reg. (EU) 

2019/317) 

–  Table 4 (Annex IX of Reg. (EU) 

2019/317) 

Furthermore, this document supports the verification of restructuring costs in accordance 
with Article 2(18) and the points 3.3 i and j of Annex II.  

The procedures in the Verification Programme are therefore organised so as to cover the 
above areas.  

The areas related to the verification of the traffic elements going into the calculation of the 
unit cost and unit rate (service units, traffic risk sharing adjustment) as well as the other 
adjustments included in the calculation of the unit rate (i.e. modulation of charges, financial 
incentives, and differences from the temporary application of unit rates) do not fall in the 
scope of the Verification Programme and the Training Material. 

The Verification Programme is organised in two parts: the first one containing verification 
procedures for determined costs, and a second one for actual costs. Each part is organised 
into three sections, considering the typical phases of a financial verification process: 

–  Planning phase: preparation phase prior to going on-the-spot to visit the ANSP, for 

setting the scope of the verification, collecting documentation and performing initial 
checks. 

–  Execution phase: phase in which the verification procedures are carried out, normally 

during a visit at the ANSP. 

4 Aeronautical Information Publications (AIPs) of each SES Member State are made available through Eurocontrol 
at https://www.eurocontrol.int/articles/ais-online 

7 

 
 
 
–  Conclusion phase: finalisation phase during which a verification report is prepared and 
any findings are shared and discussed with the ANSP, considering any correction 
measures and recommendations.  

The Training Material has the same structure of the Verification Programme, for easy 
reference. In the practice of performance planning, consecutive phases might be too 
cumbersome for the verification of determined costs in a performance plan, which has to be 
finalised within three to five months before the submission of the new draft performance plan. 
Therefore, a parallel process and close collaboration of ANSP and NSA are essential.  

A toolkit complements both the Verification Programme and the Training Material, including 
templates and additional information on very specific topics, in order to facilitate a better 
understanding. 

8 

 
A. Determined costs 

A.1 Planning Phase 

For the determined costs, we foresee a verification process that takes place ahead of each 
reporting period (RP). The performance plan for each reference period has to include local 
cost-efficiency consistent with the corresponding Union-wide targets. Those local targets, 
including the determined costs underlying the target values, have to be set in the time 
available between the adoption of Union-wide targets and the submission of draft 
Performance Plans to the Commission. During that period of time, the ANSP and the NSA have 
to align on the critical cost elements that impact significantly the cost efficiency of service 
provision in the forthcoming reference period and fulfil the criteria set out in Regulation (EU) 
2019/317, section 1.4 of Annex IV. The initial cost information provided by the ANSP to the 
NSA may lead to performance targets that are not consistent with the Union-wide 
performance targets. In that case, the NSA should collaborate with the ANSP towards a 
revision of their performance plan with targets that are consistent with the Union-wide 
performance targets. 

The Planning phase represents the start of the verification process. Generally, the NSA should 
use this period to organise internally and to secure the required resources for performing the 
verification, as well as to deal with any administrative and logistical aspects. At this stage, it is 
expected also that the ANSP is requested, and provides, relevant preliminary documentation 
which the NSA will use in order to perform initial checks and for the identification of risk 
areas. Most importantly, during this phase the NSA should align internally on the objective of 
the verification (what should be achieved) and the scope of the verification (how 
comprehensive should the verification be). These aspects are detailed in the following sub-
sections. 

Timing 

The timing of the verification process for determined costs, and implicitly for the Planning 
phase, is bound by the deadlines indicated in Implementing Regulation (EU) 2019/317 for the 
process of the adoption of the draft Performance Plans. For the purposes of this guidance 
material, the proposed approach is that the NSA performs and concludes the verification 
process prior to the start of the consultation process on the draft Performance Plans foreseen 
under Art. 24 of Implementing Regulation (EU) 2019/317. This will ensure that at the start of 
the consultation, the assumptions used for setting the determined cost will have been verified. 
In this context, the trigger for the Planning phase could be the setting of the baseline value for 
the determined costs and for the determined unit costs for each charging zone, according to 
Art. 10(2) of Regulation (EU) 2019/317.  

The following timeline graphic below provides an overview of the timing of the verification 
process for determined costs. This is explained in further detail below. 

9 

 
 
A.1.1 Define objective and scope  

1.  Objective of verification 

Determined costs are established by the NSAs, based on prior inputs submitted by the ANSPs. 
The NSAs bear the ultimate responsibility for setting the determined costs and ensuring that 
these comply with the criteria and principles stated in the SES regulatory framework.  

In this context, the objective of the verification therefore should be the compliance of the 
ANSPs’ practices and their reported costs with the criteria and principles outlined as regards 
ANS costs in the SES regulatory framework. 

Specifically, the main objectives of the verification should be to validate that: 

–  According to the provisions of Article 14 of Implementing Regulation (EU) 2019/317, 
the proposed performance targets contained in the Performance Plans should be 
consistent with the Union-wide performance targets. If the required consistency cannot 
be established, the Performance Plans and targets should be revised. The NSA should 
verify and ensure the consistency before submitting the draft Performance Plans to 
the European Commission. 

–  The provisions of Article 12 of Regulation (EC) No 550/2004 as amended by 

Regulation (EC) No 1070/2009 are complied with, which refer that the ANSPs shall 
publish their annual reports, regularly undergo an independent audit and comply with 
the international accounting standards adopted by the European Union as well as the 
requirement to maintain separate accounts for ANS and non-ANS costs.  

10 

 
 
 
–  The costs by nature reported in the reporting tables (Annexes VII and IX of 

Implementing Regulation (EU) 2019/317) comply with the provisions of Articles 22 of 
Regulation (EU) 2019/317. These refer to the cost elements that can be included and 
reported under staff costs, operating costs other than staff costs, depreciation costs, 
cost of capital and exceptional costs. 

–  The principles laid down in Article 15 of Regulation (EC) No 550/2004 as amended by 
Regulation (EC) No 1070/2009 are complied with. These refer to the transparency of 
the cost base for charges, avoidance of cross-subsidy between en route and terminal 
services and the need to keep out of the cost base the costs of penalties and the costs 
of any corrective measures imposed by Member States. 

2.  Scope of the verification 

For determined costs, the recommended approach is always an in-depth review of all the 
elements of the cost base ahead of the start of the next Reference Period, considering that 
the determined costs are used to establish, as part of the Performance Plans, the stable cost 
base for the charges to airspace users during the five-year period.  

For the determined costs, the critical decisions and elements for achieving the performance 
targets should be the subject of a particular focus. This is further detailed in the preliminary 
risk assessment section. 

A specific case is the revision of the performance targets during a Reference Period, foreseen 
under Art. 18 of Regulation (EU) 2019/317. Where this revision concerns the cost-efficiency 
performance targets, this entails a modification of determined costs and/or traffic forecasts. 
In such instances, the NSA could focus its verification of the determined costs only on the cost 
categories impacted by the changes. An in-depth review is again recommended, and the NSA 
may use for this end the sections that apply from the Verification Programme.  

The objective and the scope of the verification should be adequately communicated to the 
ANSP. In this respect, it is recommended that a formal approach is taken, e.g. communication 
via a letter/a formal message (refer to Tool 1 for a communication template announcing the 
verification procedure). Informing the ANSP management of the verification objective, timing, 
and of the extent of the procedures and the required documentation allows the ANSP to 
organise and prepare, which will likely determine a smoother verification process. Also, it 
provides transparency as regards the steps of the process, thus increasing the likelihood of 
good cooperation.  

It is important to note that the level of depth and detail of the testing to perform could be 
adjusted based on the risk assessment results taken by the NSA. Please refer to section A.1.3 
for more details on the risk assessment. 

A.1.2 Request information from the service provider 

According to Article 4(2) of Implementing Regulation (EU) 2019/317, ANSPs must facilitate 
inspections and surveys carried out by the NSAs for the purpose of verifying the level of costs 
being planned in the context of the performance and charging schemes. In addition, Article 5 
of Regulation (EU) 2017/373 highlights the importance NSAs’ oversight and enforcement 
tasks in accordance with the framework regulation. From the perspective of the Verification 
Programme, this entails both access to financial and business information and the availability 
of the relevant staff for discussions throughout the verification process. In addition to this, 

11 

 
 
during the conclusion phase of the verification, the ANSP management should be involved 
more closely in the discussions with the NSA regarding potential corrections and 
recommendations. 

In this context, it is therefore recommended that the NSA approaches the ANSP with a 
structured list of requests for the verification. As regards the information to be provided, this 
should be formalised and shared with the ANSP. To this end, we provide in Tool 2 a 
standardised list of financial and business information to be requested to the ANSP for the 
verification. This structured list of documents can be used as a starting point for the NSAs for 
gathering the information they need during the planning phase. It can be tailored as per the 
specificities of the service providers or draft Performance Plan planned to be verified from the 
NSAs. 

Generally, as regards the determined costs, the NSA is required to obtain and analyse the 
information specified under Annex VII of Regulation (EU) 2019/317, along with any other 
documentation it deems necessary to support the verification procedures included in the 
Verification Programme. In Section 2 of the Annex VII, the Regulation lists the additional 
information to be provided with the reporting tables and unit costs, ahead of each RP. The 
NSAs should obtain from the ANSPs, inter alia, information regarding the methodology and 
assumptions used to establish ANS regulated costs, allocation criteria between en route and 
terminal, method adopted for the calculation of depreciation costs, assumptions used to 
compute the cost of capital and the description of the determined costs of common projects.  

A.1.3 Perform preliminary risk assessment and sampling 

After establishing the verification objective, the NSA is recommended to perform a set of 
initial checks in order to define the critical elements for achieving the performance targets, 
their benefits and possible risks. This section focuses on the identification of the critical 
elements for achieving the performance targets and assess a level of risk for the verification 
which will determine the nature and extent of tests to be performed. This will enable the NSA 
to further define the scope of the verification work (in terms of depth and also extent of areas 
verified) for a better use of the existing resources. A specific tool that the NSA may use for 
this step is the Preliminary Risk Assessment and Sampling template (Tool 6 – specifically tab 
Risk Levels). 

Indeed, the initial cost information provided by the ANSP to the NSA may lead to performance 
targets that are not consistent with the Union-wide performance targets. In that case, the NSA 
should collaborate with the ANSP towards a revision of their Performance Plan with targets 
that are consistent with the Union-wide performance targets. The critical elements for 
achieving the performance targets are the business decisions bearing high costs. Certain 
elements (such as staff costs and investments) will be common to all ANSPs but certain 
elements may also be specific to each ANSP, considering national and legal specificities. A 
non-exhaustive list of examples of such critical elements for achieving the performance 
targets and attention points for determined costs includes: 

–  Staff costs and new existing investments will most often be the critical cost items to be 
verified by the NSA as they are the ANSP largest costs. The point 2.1(d) in Annex IV of 
Implementing Regulation (EU) 2019/317 lists additional factors and parameters 
underpinning the performance targets or performance in the area of cost-efficiency: 

12 

 
 
–  General checks on the overall quality of the submitted reporting tables, considering the 

integrity of the formulas and that no error message is shown. 

–  Large variations between the determined costs by nature and the actual costs of the 

previous RP (or the baseline) and insufficient explanatory information in the 
Performance Plans. 

–  Large variations in the yearly actuals of the previous RP with a peak in the year before 
the last year of the RP. ANSP may try to delay costs to the year that will serve as basis 
for the determined costs of the new RP. It would enable an ANSP to overestimate the 
determined costs and unit rates during the first years of the new RP. 

–  The value of funded projects (i.e. common projects, public funding and Union 

assistance programmes) in Reporting Table 4 does not correspond with the amounts 
(total CAPEX for the project) in the investment section of the Annual Monitoring 
Report. 

–  Weak or insufficiently elaborated allocation methodology for the allocation of costs 

between en route and terminal and between charging zones, not revised since the 
previous RP. 

–  Specific legal considerations as regards ownership of assets used for providing ANS, 

etc. 

These examples and other ones depending on the case, need to be guiding the NSAs while 
assessing the level of risks they might face when performing the verifications. 

The NSA needs to consider a wide variety of sources of information when performing the risk 
analysis, including, inter alia: 

–  The reporting tables and the additional information thereon provided according to the 

Regulation. 

–  The internal methodologies and policies of the ANSP regarding allocation of costs, 
depreciation of assets, financial treatment of common projects and of EU-funded 
projects. 

–  The organisational set-up of the ANSP and, for ANSPs that are public entities, any 

changes in the institutional arrangements or relevant governing legislation. 

–  Results from NSA verifications of cost-eligibility from previous RPs. 

–  Overall replies provided by the ANSP to the Pre-fieldwork Questionnaire. 

The NSAs can use the preliminary risk assessment template (Tool 6 of the Verification 
Programme – specifically tab Preliminary Risk Assessment) which covers horizontal and 
vertical review of the costs by nature declared. This tool assists also the NSAs to fulfil the 
requirements of Regulation (EU) 2017/373 specified in Annex II, Section B, “Oversight 
Programme”. 

This workbook which focuses on the information extracted from Reporting Table 1, aims to 
assist the NSAs identify the service providers and, or costs by nature potentially of a higher 
risk nature, as well as document the risk assessment and the sample chosen for verification. 

When assessing the risks, the NSA needs to document its decision on the scoped cost 
categories and service providers. NSAs may follow the below mentioned steps in order to 
properly document the risk level related to each ANSP. 

13 

 
1.  Proper use of previous experiences with the service providers and their reporting 

tables: 

While performing the risk assessment, based on their professional judgement, the NSA 
might decide to focus on two elements: 

i. The environment of ANSPs and NSA’s previous experiences 

This element is important because through an analysis of the ANSPs’ environment 
(legal, organisational, etc) the NSA can identify what risks will be faced when reaching 
the execution phase, such as integrity of management, unusual pressure on 
management, nature of the business, factors affecting the industry, risk related to 
fraud, changes in management during the period, complexity of the organisation, etc. 

A higher risk resulting from the ANSPs’ environment contributes to a higher probability 
of potential misstatements and therefore NSAs should increase the number of selected 
transactions to be tested, costs by nature, ANSPs, etc. in order to cover these risks. 

ii. Work of other auditors (internal, statutory) and, or previous NSA audit or verification 
reports: 

The NSAs might identify service provider and/or costs by nature for which findings 
have been identified in previous verification experiences, and as such these entities 
might be included as well in the current year verification. If NSAs are aware that a 
qualified audit opinion is issued from the statutory auditor, then this should serve as a 
red flag when assessing the reliance (or not) on the work performed by other auditors.  

The NSAs need to document properly their risk levels detailed in the Tool 6 as this will 
impact the size of the sample to be tested. 

2.   Analyse the costs by nature declared by the ANSPs and the service providers and their 

variances compared with the previous years’ costs.  

The NSA needs to perform a horizontal analysis of the received reporting tables per 
each reporting entity. If considerable variances between the determined costs and the 
prior year are identified, then this might serve as a red flag for the NSAs, to further 
investigate the case by including these entities in the verification process. Those 
service providers that do not reflect a significant variance compared to previous year 
costs claimed, then, the NSA might decide to perform a less thorough verification. 

Additionally, the NSA needs to perform vertical analysis in order to assess the 
contribution level of the each ANSP towards the consolidated total cost by nature. Tool 
6 covers in details the risk levels for both horizontal and vertical reviews that the NSA 
will perform. The higher the risks identified, the more items or transactions need to be 
verified. 

3.  Document the preliminary risk assessment and the final decision of scoping the entities 

and cost categories for the verification process: 

The NSA should document the preliminary risk assessment and the final decision of 
scoping the entities and cost categories for the verification process as per the levels of 
risks identified during their assessment. Tool 6 with its different tabs, is built to assist 
the NSA for documenting the NSA’s preliminary risk assessment and its decisions on 
which entity and what kind of cost categories (cost by nature) they will verify during 
the execution phase.  

14 

 
There is a direct relationship between the identified risks and the sample size and this 
relationship should to be considered when performing the Preliminary Risk Assessment. The 
risk assessment will impact the sample size in terms of number of items to be tested (i.e. the 
higher the risk level, the higher the number of items to be tested). The set of steps detailed 
below are important to be followed while determining the sample which will be tested during 
the fieldwork. 

When determining the samples related to the verification of the eligibility of costs, referring to 
the total costs reported in Reporting Table 1, these steps need to be followed: 

Step 1: Professional judgement on internal controls as well as other audit reports 

–  Understanding the environment of the ANSPs, their internal controls in place as well as 
being aware of the deficiencies identified by other auditors, is the initial step towards 
mitigating the risks before reaching the fieldwork. Based on the quality and the 
quantity of information gathered from the above mentioned, will assist the NSAs tailor 
the samples according to each specific ANSP. 

Step 2: Analyse the consolidated reporting table versus the individual ANSPs respective 
reporting tables and identify the total share of each service provider towards the consolidated 
total cost:  

–  By identifying the types of service providers, NSAs need to assess the volume of the 

total costs for each service provider (per type) towards the total costs in the 
consolidated Reporting Table 1. A particular attention should be paid to those service 
providers that contribute to relatively high shares to the consolidated amounts of cost 
by nature reflected in Reporting Table 1. The NSAs might choose to focus less on the 
service providers that contribute at a lower level to the total costs, such as for 
example, a range between 2% and 5% of the total cost reported in the consolidated 
Reporting Table 1. The NSAs can assess themselves which of the entities that 
contribute to a lower amount, can be verified. However, considering their size, it is 
expected that ANSPs will contribute to a larger extent to the total costs declared in the 
consolidated Reporting Table 1. 

Step 3: Identify the population of cost items included in the reporting tables: 

–  Ask for the detailed breakdown of costs per each cost by nature to each service 

provider decided as per the Preliminary Risk Assessment Template (Tool 6) that will be 
verified. 

–  Reconcile the total breakdown per each cost by nature with the total amount declared 

by the service providers per each cost by nature. 

– 

Identify the total number of items per each cost by nature which was previously agreed 
to be tested in the preliminary risk assessment template. 

–  Concerning staff cost category, collect the detailed cost breakdown per person (if 

possible). 

Step 4: Determine the sample size and the sampled items: 

–  Sort the detailed item list per each cost per nature from the biggest amount to the 

smallest. 

–  Select the 10 highest value items or 10% of the total number of items per cost 
category, whichever is the highest. If population is less than 10 items, then full 

15 

 
population will be tested. Please refer to the explained example in the Tool 6 The 
example is focused in staff costs. 

–  When an ANSP has been considered of a high risk nature (resulting from the Step 1 and 
2), then high risk items need to be systematically added in the sample, increasing the 
sample size to be verified. 

–  When NSAs are faced with ANSPs of a high risk nature then the unusual items or 

transactions need to be added to the initial sample size explained in the two first bullet 
points this step. 

–  A non-exhaustive list of examples concerning unusual items or transactions, is detailed 

as per below: 

o  Transactions with sudden huge variations; 

o  The size of the item or result in relation to our expectation or to other similar 

transactions; 

o  The transaction or result occurs infrequently (i.e., is non-recurring or non-routine). 

16 

 
 
A.2 Execution Phase 

A.2.1 Verification of costs by nature (cost base eligibility and accuracy) 

A.2.1.1 Procedures transversal to all cost by nature 

Three “components” are observed in terms of determined costs reported in the context of this 
Regulatory Framework: the ANSP official published Financial Statements available for the 
preceding reference period, the ANS/non-ANS separate accounts available for the preceding 
reference period and the reporting of determined eligible costs in the official reporting tables. 
The baseline value for determined costs shall be estimated by using the actual costs available 
for the preceding reference period and adjusted to take account of latest available cost 
estimates, traffic variations and their relation to costs. 

It is assumed that the actuals used in the costs baseline were already verified by the NSA in 
the past, meaning that no additional verification is required in addition to the three steps 
listed below. If they were not or not sufficiently verified, a verification of the actuals should 
also be performed in line with the procedures described for the actual costs. This includes the 
assumption that the ANSP’s financial statements for the year from which the actual costs of 
the preceding reference period were used to estimate the determined costs were subject to an 
independent financial audit and were published. This is a clear requirement from the 
Regulation (EC) No 550/2004, Article 12(2) on the transparency of accounts. This ensures 
that the starting base for the cost base calculation is accurate, allowing the NSA to rely on the 
information from the financial statements.  

The NSA should apply the following verification procedures: 

1.  Verify that the ANSP has separate accounts for ANS and non-ANS services. Costs that 
are not related to the provision of air navigation services should not be included in the 
cost base for setting the unit rate. Inter alia that concerns costs related to equipment 
not used for providing such services during a given year or costs related to a removal 
of equipment before its useful end of life. 

a.  ANSPs may conduct operations or provide commercial services other than 

regulated ANS. These costs are non-eligible and should therefore be excluded 
from the determined cost base. Inter alia that concerns costs related to 
equipment not used for providing such services during a given year or costs 
related to a removal of equipment before its useful end of life.  

b.  It is assumed that the separation between (actuals) ANS and non-ANS accounts 
was verified when the related actuals were reported in the reporting tables.  

c.  The NSA should verify that these separate ANS accounts from the previous RP 

were used as the baseline value for determined costs.  

2.  Verify the consistency between the determined costs included in the reporting tables 

and the ANSP business plan. 

17 

 
a.  According to Article 4 of Implementing Regulation (EU) 2019/317, the ANSPs 

are required to provide their business plan as referred to in point 
ATM/ANS.OR.D.005 of Annex III of Implementing Regulation (EU) 2017/3735. 

b.  The NSA should verify the consistency between the reporting tables and the 
ANSP business plan, and this at least for the determined costs by nature and 
the investments.  

3.  Verify that there is an audit trail6 between the determined costs of the Reporting 

Period and the available actual costs for the preceding reference period, taking into 
account all the adjustments performed (the specific verification procedures on each 
cost by nature are described in the next sections). 

The NSA should verify that the NSA has clearly documented how the actual costs from 
the preceding reference period were adjusted to obtain the determined costs. This 
documentation should be both quantitative and qualitative. The quantitative aspects 
should explain how the actuals were modified across all costs by nature (e.g. the staff 
cost was increased by 400.000 €, then increased by 1%) while the qualitative aspects 
should explain the rationales behind these modifications (e.g. 400.000 € is accounted 
for the costs of 2 additional full time equivalents (FTE) needed compared to the 
previous reference period and 1% is added to account for the salary indexation). While 
it is understood that efficiency targets are the main drivers for setting-up the 
determined costs, the ANSP should translate them into realistic operational numbers 
and assumptions (i.e. impact on number of staff, etc.) The same type of documentation 
should exist for the impact on costs by ANS service and on adjustments and specific 
lines covered in Section A.2.4. 

4.  Reconcile the values used for the determined costs baseline with the actual costs for 

the preceding reference period. 

a.  This quick reconciliation ensures that the actuals from the previous RP taken 
for the preparation of determined costs are correct. This reconciliation also 
ensures that the adjustments are applied to costs fully related to the provision 
of ANS. 

b.  According to Implementing Regulation 2019/317, the determined costs shall be 
calculated in respect to the year preceding the start of the reference period. 
When preparing the determined costs (during the year preceding the start of 
the reference period), the latest actuals available are for the previous year (i.e. 
the latest actuals available for the preparation of RP3 determined costs were 
the 2018 actuals). 

5 Commission Implementing Regulation (EU) 2017/373 of 1 March 2017 laying down common requirements for 
providers of air traffic management/air navigation services and other air traffic management network functions 
and their oversight, repealing Regulation (EC) No 482/2008, Implementing Regulations (EU) No 1034/2011, (EU) 
No 1035/2011 and (EU) 2016/1377 and amending Regulation (EU) No 677/2011 (OJ L 62, 8.3.2017, p. 1.). 

6 A document that quantitively traces how the final determined costs are obtained starting from the actuals of the 
previous reference period and detailing the impact on all assumptions (traffic forecast, efficiency targets, inflation, 
detailed expected additional costs and savings, etc. By detailed, it is meant that the overall or net increase or 
increase is not enough. All significant ups and downs should be described and quantified. 

18 

 
 
 
5.  Check that the reported costs do not include elements that are specifically not allowed 
under the service provision Regulation7, such as the cost of penalties imposed by 
Member States (according to Article 9 of the framework Regulation8) and the cost of 
any corrective measures imposed by the framework Regulation. 

This is verified when checking the adjustments made to the actuals costs. The 
adjustments made may neither include the cost of penalties imposed by Member States 
nor the cost of any corrective measures. 

6.  Verify the restructuring costs included in the Performance Plan against their definition. 

According to the Recital 23 of the Regulation (EU) 2019/317, the introduction of new 
technologies and business models to stimulate integrated service provision should lead 
to significant cost reductions to the benefit of users over time but can lead to initial 
restructuring costs. If a Member State demonstrates that restructuring measures bring 
a net benefit to users, it should also be able to request a revision of local cost-
efficiency targets in order to recover the associated restructuring costs through a 
revision of the determined costs contained in their Performance Plans, subject to the 
Commission’s authorisation. Concretely, it means that the restructuring costs can be 
included in the cost base for the sake of determining the unit cost charged to the users 
but are not included for the sake of verifying the consistency of cost-efficiency targets.  

To verify the restructuring costs included by an ANSP in the Performance Plan, the 
NSA should: 

a.  Verify that the restructuring costs meet the criteria of the definition in Article 
2(18) of the Regulation (EU) 2019/317: they have to be significant one-time 
costs incurred by air navigation service providers in the process of 
restructuring for introducing new technologies, procedures or business models 
to stimulate integrated service provision, compensating employees, closing air 
traffic control centres, shifting activities to new locations or acquiring strategic 
participations in other air navigation service providers. 

b.  Validate the demonstration provided in the Performance Plan that the 

restructuring measures concerned will deliver a net financial benefit to airspace 
users at the latest in the subsequent reference period. 

A.2.1.2 Procedures for staff costs 

According to the Article 22 of Implementing Regulation (EU) 2019/317, staff costs should 
include gross remuneration, overtime payments, and employers' contributions to social 
security schemes, as well as pension costs and costs of other benefits. Pension costs shall be 
calculated using prudent assumptions based on the applicable pension scheme or on national 
law, as appropriate. Those assumptions shall be specified in the Performance Plan. 

7 Regulation (EC) No 550/2004 of the European Parliament and of the Council of 10 March 2004 on the provision 
of air navigation services in the single European sky as amended by Regulation (EC) No 1070/2009 (the service 
provision Regulation). 

8 Regulation (EC) No 549/2004 amended by the Regulation (EC) No 1070/2009. 

19 

 
 
 
 
 
The NSA is responsible to check that the ANSP complies with these regulatory requirements. 
The following procedures are recommended to this end: 

1.  Verify that the only elements included in the staff cost reported in the reporting tables 

are the ones listed in the regulatory framework. 

a.  This is verified by reviewing the audit trail between the available actual costs 
for the preceding reference period and the determined costs. This audit trail 
would make explicit how the determined costs are obtained starting from the 
actuals of the previous reference period and detailing the impact on 
assumptions taken (e.g. a foreseen traffic increase would increase the ATCO 
number requirements by a certain defined percentage and the number of 
managers by another certain defined percentage. The impact of these 
assumptions on the different types of staff costs need to be detailed in the audit 
trail). The costs added through the adjustments should not be of any other type 
than the ones allowed by the Regulation (EU) 2019/317 (gross remuneration, 
overtime payments, and employers' contributions to social security schemes, as 
well as pension costs and costs of other benefits). 

b.  For example, recent new paid parental leave and benefits announced by the 

government are valid examples of such adjustments. 

c.  Also, the NSA should ensure with the ANSP that the audit trail is sufficiently 

detailed to allow for a proper verification. Details on the nature and content of 
the main adjustments should be included. Indeed, while the actuals of the 
previous RP may be very close to the total determined operating costs, there 
could be very different cost items foreseen by the ANSP. 

d.  In accordance with the International Accounting Standard (IAS) 19 list of 

employment benefits, other benefits may include termination costs, long-term 
paid absences, jubilee or other long-service benefits, long-term disability 
benefits, profit-sharing and bonuses and deferred renumeration. These items 
are all in accordance with the Regulation. More detailed explanations on 
employment benefits and related IFRS requirements are available in the section 
of IFRS considerations in the Verification Programme. 

2.  Check that only the ANS related staff costs were reported in the reporting tables. 

a.  This is verified by reviewing the audit trail between the available actual costs 

for the preceding reference period and the determined costs. The costs added 
through the adjustments should not include any component not related to the 
provision of ANS. 

b.  For example, would the ANSP foresee a certain amount for a new 

hospitalisation insurance for its employees, it should be verified that the entire 
insurance cost is not included in the determined cost base but only the part for 
the employees working on the provision of ANS. 

3.  Verify that all adjustments performed to the staff costs rely on sound assumptions. 

a.  Detail on the assumptions used can be found in the Performance Plan (cost 

efficiency section) and in its Annex F. Baseline cost efficiency values for RP3. 
Any other needed information should be enquired to the ANSP. 

20 

 
b.  These assumptions should be reviewed and their soundness verified. For 

example: 

i.  If staff costs are foreseen to increase due to additional air traffic 

controllers (ATCO) being needed, their number should be verified in 
regards to traffic variation estimations, productivity gains linked to the 
availability of new systems, etc. Requesting the ANSP staff/hiring plan 
and checking its consistency with the estimates used for the determined 
costs is a good verification. 

ii.  If staff costs are foreseen to increase due to a salary indexation, it could 

be verified against the national salary indexation plan. 

iii.  If staff costs are foreseen to increase due to a change in employer’s 

contributions, it could be verified in regards to a change in the law for 
the social insurance and health scheme. 

4.  Verify that the adjustments are correctly reflecting the assumptions. 

While the previous verification procedure was about the verification of the qualitative 
dimension of the adjustments, this procedure is about the verification of their 
quantitative adjustments. The NSA should verify that the assumptions were correctly 
reflected in the calculation of the adjustments.  

5.  Perform an in-depth verification of pension costs, leveraging the Performance Plan 

details and any actuarial report available. More detailed explanations on pension costs/ 
post-employment benefits and related IFRS requirements are available in the section of 
IFRS considerations in the Verification Programme. 

a.  The NSA should reconcile the determined costs presented in the reporting 

tables with the detail per pension scheme in the Section 3.4.3 Pensions of the 
Performance Plan. 

b.  For each pension scheme used, the NSA should: 

i.  Verify the calculations for the pension cost in respect of this scheme. 

1.  For the verification of defined contributions pension schemes, the 
pension cost calculation is rather straightforward and a simple 
reconciliation of costs accounted with the insurance plan is 
sufficient. 

2.  For the defined benefits pension schemes, IAS 19 requires the 
entity to use the projected unit credit method to calculate the 
service cost (one of the component of expenses related to a 
Defined benefits scheme). However, not all ANSPs are compliant 
with IFRS principles. 

a.  For the ANSP reporting pension costs as per the same 

accounting methodology as in their financial statements, 
the pension costs will have been validated in the context 
of the financial audit. In that case, a simple reconciliation 
by the NSA of reported pension costs with the insurance 
plan is sufficient. 

21 

 
b.  For the ANSP reporting pension costs as per a different 

accounting methodology than in their financial statements 
(to get closer to the IFRS principles for example), these 
reported pension costs were not validated during the 
financial audit. In that case, the NSA needs to review the 
actuarial reports and validate the assumptions 
reasonability. The following verification procedures 
should be envisaged in that case: 

i.  Obtain the actuarial evaluation that was done by 

the ANSP; 

ii.  Understand how the service cost is calculated; 

iii.  Understand the assumptions used by the 
actuaries and validate their reasonability; 

iv.  An independent actuarial review of the ANSP 
could be of interest if the amount is very 
significant or could represent a high risk. 

3.  State pension schemes are not a separate category of pension 
schemes as per IFRS rules. They either enter the defined 
contributions scheme, either the Defined benefits scheme, or are a 
combination of both. The above described procedures are thus 
applicable to the related portions of the state pension schemes. 

ii.  Verify that the assumptions underlying the calculations of pension costs 
comprised in the determined costs are accurate (based on applicable 
pension scheme or on national law) and correctly taken into account in 
the calculations. 

iii.  Verify that the actions taken ex-ante to manage the cost-risk (cost 

increase) associated, as well as the actions taken to limit the impact of 
the unforeseen change on the costs to be passed on to airspace users 
are appropriate/reasonable. 

A.2.1.3 Procedures for operating costs other than staff costs 

According to the Article 22 of Implementing Regulation (EU) 2019/317, operating costs other 
than staff costs should include the costs incurred for the purchase of goods and services used 
to provide air navigation services, including outsourced services, material, energy, utilities, 
rental of buildings, equipment and facilities, maintenance, insurance costs and travel 
expenses. 

The NSA is responsible to check that the ANSP complies with these regulatory requirements. 
The following procedures are recommended to this end: 

1.  Verify that the only elements included in the other operating cost reported in the 

reporting tables are the ones listed in the regulatory framework. 

a.  This is verified by reviewing the audit trail between the available actual costs 
for the preceding reference period and the determined costs. This audit trail 
would make explicit how the determined costs are obtained starting from the 

22 

 
 
actuals of the previous reference period and detailing the impact on 
assumptions taken (e.g. a foreseen traffic decrease would decrease the amount 
of variable costs but not of the fixed costs. The foreseen traffic decrease would 
then not translate in the same proportion in the other operating costs. The 
impact of these assumptions on the different types of operating costs need to 
be detailed in the audit trail). The costs added through the adjustments should 
not be of any other type than the ones allowed by the Regulation (EU) 
2019/317 (incurred for the purchase of goods and services used to provide air 
navigation services, including outsourced services, material, energy, utilities, 
rental of buildings, equipment and facilities, maintenance, insurance costs and 
travel expenses).  

b.  For example, new software licenses or the externalisation of a certain activity 
(e.g. security) performed earlier by internal staff are valid examples of such 
adjustments. 

c.  Also, the NSA should ensure with the ANSP that the audit trail is sufficiently 

detailed to allow for a proper verification. Details on the nature and content of 
the main adjustments should be included. Indeed, while the actuals of the 
previous RP may be very close to the total determined operating costs, there 
could be very different cost items foreseen by the ANSP. 

d.  Leasing costs are also to be included in the other operating costs according to 
Implementing Regulation (EU) 2019/317. IFRS 16 (new standard effective 
since 1 January 2019) introduces a new, broader, definition of leases. As per 
that definition, any physical asset for which an entity is paying a rental amount 
would now be considered a lease for the purpose of IFRS 16. While the renting 
charges were previously considered as an operating expense, the leasing costs 
are finance (interest) expenses. As a consequence, the ANSP Profit and Loss 
statements compliant with IFRS have seen a decrease in the operating expenses 
and an increase in the financial expenses. Nevertheless, the leasing costs shall 
be included in the operating cost to remain compliant with the Regulation. More 
details can be found in the section of IFRS considerations in the Verification 
Programme. 

2.  Check that only the ANS related other operating costs were reported in the reporting 

tables. 

a.  This is verified by reviewing the audit trail between the available actual costs 

for the preceding reference period and the determined costs. The costs added 
through the adjustments should not include any component not related to the 
provision of ANS. 

b.  For example, would the ANSP foresee a certain budget for a general 

information technology (IT) software license, it should be verified that not the 
entire license cost is included in the determined cost base but only the share 
that can be attributed to the provision of ANS. 

3.  Verify that all adjustments performed to the other operating costs rely on sound 

assumptions. 

23 

 
a.  Detail on the assumptions used can be found in the Performance Plan (cost 

efficiency section) and in its Annex F. Baseline cost efficiency values for RP3. 
Any other needed information should be enquired to the ANSP. 

b.  These assumptions should be reviewed and their soundness verified. For 

example: 

i.   If other operating costs are foreseen to increase, their nature (e.g. 
outsourced services, material, energy, etc.) and amounts should be 
verified in regards to their variability (some costs are fixed by nature, 
while other are variable – any combination in between also exists) and 
traffic variation estimations, productivity gains, etc.  

ii.  If other operating costs are foreseen to increase due to a general 

increase in prices, it could be verified against the inflation or consumer 
price indexes. 

iii.  If other operating costs are foreseen to increase due to a change in a 

regulated market (energy for example), it could be verified in regards of 
related official published information. 

4.  Verify that the adjustments are correctly reflecting the assumptions. 

While the previous verification procedure was about the verification of the qualitative 
dimension of the adjustments, this procedure is about the verification of their 
quantitative adjustments. The NSA should verify that the assumptions were correctly 
reflected in the calculation of the adjustments.  

A.2.1.4 Procedures for depreciation  

According to the legal framework, depreciation costs include costs related to the total fixed 
assets in operation for the purpose of providing ANS. The value of fixed assets shall be 
depreciated in accordance with their expected operating life, using the straight-line method 
applied to the costs of the assets being depreciated. Historical or current cost accounting shall 
be applied for the calculation of the depreciation. The methodology used to calculate 
depreciation costs shall not be altered during the duration of the depreciation and shall be 
consistent with the cost of capital applied, that is to say nominal cost of capital for historical 
cost accounting and real cost of capital for current cost accounting.  

Where current cost accounting is applied, the cost of capital shall not include inflation and the 
equivalent historical cost accounting figures shall also be provided to allow for comparison 
and assessment. 

More guidance on IFRS requirements is available in the section of IFRS considerations in the 
Verification Programme. In particular, IAS 16 (property plants and equipment) and IAS 38 
(intangible assets) principles related to assets recognition (also for assets under construction), 
valuation and depreciation are described.  

In relation to depreciation, the NSA should perform the following procedures:  

1.  Verify that the only depreciation cost included in the reporting tables are the ones 

allowed by the regulatory framework. 

24 

 
 
a.  This is verified by reviewing the audit trail between the available actual costs 

for the preceding reference period and the determined costs.  

i.  This audit trail would make explicit how the determined costs are 

obtained starting from the actuals of the previous reference period and 
detailing the impact on assumptions taken (e.g. The depreciation costs 
of the existing assets that were already considered eligible can 
continued to be included in the cost base (if not fully depreciated yet). 
Depreciation costs of assets being fully depreciated cannot be included 
anymore in the determined costs. For the assets to be commissioned, 
their depreciation costs can be included in the cost base once their 
eligibility confirmed). The audit trail should be made on the individual 
asset level of granularity as the determined depreciation costs are the 
sum of the of individual assets, grouped in investments in the 
Performance Plan. An example of audit trail could the asset register 
from the previous RP in which the depreciation for the next five years 
are prepared.  

ii.  The depreciation cost of assets in the middle of their operating life 

should would have constant depreciation costs per year as the straight 
life method is required. The costs added compared to the actual costs of 
the preceding RP should be depreciation costs from new assets acquired 
and put in operation by the ANSP, as approved in the Performance Plan. 
Similarly, the depreciation costs of assets that were fully depreciated 
during the previous reference period should not be included in the 
determined costs anymore. 

iii.  Assets for which costs were included in the depreciation must have been 
in operation during the year. If they were put in operation during the 
year, they should only be taken into account on a pro-rata basis. 

iv.  It should be verified that no depreciation is accounted for assets under 
construction. This can be checked by reviewing the asset register or list 
of assets, verifying that no costs are capitalised for these assets. 
Another verification is to review for what assets are costs being 
capitalised and verify that no depreciation cost is included in the cost 
base for these assets. 

b.  For example, would a radar be put into operation during the year for the 

provision of ANS, its depreciation costs may be added to the actuals from the 
previous reference period for the sake of the calculation of the new RP 
determined costs. Similarly, the depreciation cost of a building that would have 
been fully depreciated during the previous reference period should not be 
included in the determined costs.  

2.  Check that only the ANS related depreciation costs were reported in the reporting 

tables. 

a.  This is verified by reviewing the audit trail between the available actual costs 

for the preceding reference period and the determined costs. The depreciation 
costs added compared to the previous RP should only relate to assets required 
for the provision of ANS. 

25 

 
b.  For example, would the ANSP put in operation a new asset used both for 

regulated ANS and other non-ANS activities, it should be verified that the entire 
asset depreciation cost is not included in the determined cost base but only the 
proportion that can be attributed to the provision of ANS. Sharing keys and 
allocation methods (including examples) are fully explained in the 
corresponding section of the verification of actuals (Section B.2.1.4). 

3.  Verify that the value of fixed assets is being depreciated in accordance with their 

expected operating life, using the straight-line method. 

a.  No definition is provided in the Regulation for the terms of “expected operating 
life”. As per IAS 16, properties, plants and equipment are to be depreciated 
over their useful life. However, if it can be considered that an asset operating 
life is equal to its useful life and that the ANSP applies a straight-line 
depreciation method (one of the three method accepted under IFRS), the NSA 
should be able to reconcile the depreciation costs entered in the Reporting 
Table 1 with the asset register/list of assets. Moreover, the expected operating 
life shall be declared for each asset in the ANSP’s investment plan which is part 
of the adopted Performance Plan. 

b.  Straight-line depreciation is the most common and simple method of 

depreciation where the value of a fixed asset is reduced gradually and evenly 
over its useful life, meaning that each full calendar year will be allocated the 
same amount (in absolute value and in percentage) of the asset’s cost.  

c.  It should be verified that any exceptional depreciation resulting from asset 
impairments and write offs are not be included in the depreciation costs. 

4.  Verify that the depreciation methodology used was consistent with the one applied to 

the cost of capital calculation.  

a.  Guidance on key concepts: 

i.  Historical cost accounting: Historical cost implies that an asset is 

recorded at its original cost when acquired by the ANSP. 

ii.  Current cost accounting: Current cost accounting for asset valuation 

and depreciation is neither defined in the Regulation (while it is defined 
for the cost of capital (i.e. “Where current cost accounting is applied, the 
cost of capital shall not include inflation”) nor in the international 
accounting or reporting standards. It is however foreseen in IAS 16 that 
properties, plants and equipment can be valued at “fair value” following 
the revaluation model. Nothing specifies however that current cost is an 
equivalent to fair value.  

It is required by the Regulation that where current cost accounting is 
applied, the equivalent historic cost accounting figures shall also be 
provided to allow for comparison and assessment.  

b.  Meaning of the consistency in the depreciation and cost of capital methods: 

i.  Either use historic cost accounting for the calculation of the depreciation 

and the nominal cost of capital (including inflation), or  

26 

 
ii.  use current cost accounting for the calculation of the depreciation and 

real cost of capital (excluding inflation). 

5.  Verify that the methodology used to calculate depreciation costs was not altered 

during the duration of the depreciation of a given asset. 

This can be verified by reviewing the detail of the calculations made for the 
depreciation costs. As the straight line depreciation method should be applied, the 
annual depreciation costs should remain constant for all full calendar years during 
which the asset is being depreciated if the expected operating life is not modified and 
the asset not revalued (any of these would require approval by the NSA in RP3). 
Depreciation of assets put into operation during a year shall calculated on a pro-rata 
basis. 

6.  Verify that all adjustments performed to the depreciation costs rely on sound 

assumptions. 

a.  Detail on the assumptions used can be found in the Performance Plan (cost 

efficiency section) and in its Annex F. Baseline cost efficiency values for RP3. 
Any other needed information should be enquired to the ANSP. 

b.  These assumptions should be reviewed and their soundness verified. For 

example: 

i.  For the majority of assets, the depreciation costs should remain in line 

with the previous year as the straight line depreciation method has to be 
used. The exceptions to that rule are the new assets put into operation 
and the ones getting fully depreciated. 

ii.  The large movements in the depreciation cost would come from the 

addition, the asset end of expected operating life, the cancellation or the 
replacement of assets or new and existing investments put into 
operation. The assumptions underlying the determined depreciation cost 
variance should be analysed with regards to the details and justifications 
to be provided in the investment plan specified in the Performance Plan. 
Any change requires the NSA approval in RP3. 

7.  Verify that the adjustments are correctly reflecting the assumptions. 

While the previous verification procedure was about the verification of the qualitative 
dimension of the adjustments, this procedure is about the verification of their 
quantitative adjustments. The NSA should verify that the assumptions were correctly 
reflected in the calculation of the adjustments. The ANSP asset register and 
investment plans are key documents to be leveraged for this verification.  

A.2.1.5 Procedures for cost of capital 

According to Implementing Regulation (EU) 2019/317, Article 22(4), the cost of capital shall 
be equal to the product of the following elements: 

–  The sum of the average net book value of fixed assets in operation or under 

construction and possible adjustments to total assets determined by the national 
supervisory authority and used by the air navigation service provider and of the 

27 

 
 
average value of the net current assets, excluding interest-bearing accounts, that are 
required for the purposes of providing air navigation services. 

–  The weighted average of the interest rate on debts and of the return on equity. For air 
navigation service providers without any equity capital, the weighted average shall be 
calculated on the basis of a return applied to the difference between the total of the 
assets referred above and the debts. 

For the purpose of establishing the cost of capital, the factors to which weight is to be given 
shall be based on the proportion of financing through either debt or equity. The interest rate 
on debts shall be equal to the weighted average interest rate on debts of the air navigation 
service provider. The return on equity shall be that provided in the Performance Plan for the 
reference period and shall be based on the financial risk incurred by the air navigation service 
provider. 

Where air navigation service providers incur costs from leasing fixed assets, those costs shall 
not be included in the calculation of cost of capital. 

Additional guidance was developed for the ANSP on the determined cost of capital 
development9. The NSA may consult this material for a better understanding of the technical 
details. 

More guidance on IFRS requirements is available in the section of IFRS considerations in the 
Verification Programme. In particular, IAS 16 (property plants and equipment) and IAS 38 
(intangible assets) principles related to assets recognition (also for assets under construction) 
and valuation are described.  

To verify the cost of capital, the NSA should perform the following procedures: 

1.  Verify the eligibility and accuracy of all components of the cost of capital calculation by 

verifying the assumptions taken for each of them.  

a.  The asset base is made of the three following components: 

i.  The net book value of fixed assets (including the ones in operation and 

under construction). 

1.  As per Point 3.3(e) of Annex II, NSAs are required to describe 
and justify in their Performance Plans the return on equity 
applied, the gearing ratio, as well as the level and composition of 
the regulatory asset base used for the calculation of the cost of 
capital. 

2.  The average net book value for the fixed assets in operation can 

be verified with the asset register, also used for the calculation of 
the depreciation under 1.3 Depreciation. 

As this is an average, it cannot be reconciled with the balance 
sheet that displays the end-year value. 

3.  These fixed assets should be used by the air navigation service 
provider for the purposes of providing air navigation services. 

9 Supporting material for the development of RP3 Performance Plans, developed by EY and Helios upon request of 
the European Commission Directorate-General for Mobility and Transport (DG MOVE), May 2019. 

28 

 
 
This should have already been mostly verified when checking the 
assets for the procedures related to the depreciation, additional 
checks should be performed in case of material assets being in 
construction (not depreciated yet, meaning that they were not 
included in the scope of the procedures related to depreciation). 

4.  The costs related to the leasing of fixed assets should not be 

included in the cost of capital calculation (but rather in the other 
operating costs). 

ii.  The asset base should also include the average value of the net current 

assets. 

1.  Net current assets are defined as the current assets less the 

current liabilities, where: 

a.  Current asset means cash or a cash equivalent (i.e. that 
can be converted into cash within one year – typically 
inventory and short term receivables). 

b.  Current liability means a payable within one year. 

2.  The NSA should verify that the average value of the net current 

assets value is used, calculated as Average NBV = (total NBV fixed 
Assets at start of the calendar year + total NBV fixed assets at end 
of the closing of the calendar year)/2. ANSPs may also consider it 
appropriate to use a mid-year figure or the monthly average 
throughout the year. 

3.  Net current assets should not include interest-bearing accounts. 

When reconciling the assets with the financial statement, the NSA 
should verify that no interest bearing account (i.e. bank account) is 
included in the fixed asset net book value (NBV). 

b.  The equity capital: 

For air navigation service providers that do not have equity (more likely for 
ANSPs that are part of the State administration), the difference between the 
total of the assets (net book value of fixed assets and current assets) and the 
debts should be taken as the value of the equity capital in the calculation of the 
cost of capital. 

c.  Debt: 

The debt amount should be made of the loans financing the provision of air 
navigation services. For the ANSP financed exclusively through equity (so not 
having any debt), procedures related to the verification of debt and interest can 
be disregarded. 

d.  The interest rate on debts: 

i.  The interest rate shall be equal to the weighted average interest rate on 

debts of the air navigation service provider – see further fourth 
procedure for more details. 

29 

 
ii.  As per point 3.3(f) of Annex II, ASNPs are required to describe the 

assumptions used in respect of interest rates for loans and to explain the 
weighted average interest rate on debt used to calculate the cost of 
capital pre-tax rate. This includes detailed information on loans including 
as regards amounts and duration. 

e.  The return on equity: 

i.  Additional guidance specifically on the cost of capital and return on 

equity was made published by the PRB10. It includes explanations on its 
calculation and components for the Performance Plan. 

ii.  The return on equity shall be the one provided in the Performance Plan 
for the reference period and shall be based on the financial risk incurred 
by the air navigation service provider. 

iii.  As per point 3.3(e) of Annex II, NSAs are required to describe and justify 
in their Performance Plans the return on equity applied, the gearing 
ratio, as well as the level and composition of the regulatory asset base 
used for the calculation of the cost of capital. 

2.  Validate the cost of capital calculation.  

c.  The proportion of financing through equity (and debt): 

The NSA should redo/verify the calculations to verify that these proportions are 
equal to the ratios between the ANSP equity (or debt) and total liabilities. 

d.  The weighted average of the interest rate on debts and of the return on equity: 

i.  The NSA should redo/verify the calculation of the weighted average of 
the interest rate on debts and of the return on equity to verify that it is 
equal to the sum of: 

1.  The proportion of financing through equity multiplied by the return 

on equity. 

2.  The proportion of financing through debt multiplied by the interest 

rate on debts. 

ii.  For air navigation service providers without any equity capital, the 

weighted average shall be calculated on the basis of a return applied to 
the difference between the total of the assets and the debts. 

e.  Cost of capital: 

The NSA should perform the calculation of the cost of capital to verify that it is 
equal to the product of the average net book value of fixed assets and of the 
weighted average of the interest rate on debts and of the return on equity. 

3.  Verify that methodology applied to the cost of capital is consistent with the one used to 

calculate depreciation costs. 

10 Performance Review Body of the Single European Sky, Study on Cost of Capital Methodology review, 
August 2019. 

30 

 
 
Nominal cost of capital should be used in combination with historic cost accounting and 
real cost of capital should be used in combination with current cost accounting. 

4.  Perform an in-depth verification of interest rate and costs, leveraging the Performance 

Plan details. 

a.  The NSA should reconcile the determined costs presented in the reporting 

tables with the overall average weighted interest rate % and interest amount 
from the Section 3.4.4 interest rates of the Performance Plan. 

b.  For each loan which has a material impact on the ANSP’s financial position, the 

NSA should: 

i.  Verify the remaining balance and/or interest amount based on the loan 

contract with the bank or bank statements. 

ii.  Verify that the assumptions underlying the calculations of interest costs 
comprised in the determined costs are accurate and correctly taken into 
account in the calculations. 

iii.  Verify that the actions taken ex-ante to manage the cost-risk (cost 

increase) associated, as well as the actions taken to limit the impact of 
the unforeseen change on the costs to be passed on to airspace users 
are appropriate/reasonable. 

A.2.1.6 Procedures for exceptional costs 

According to the legal framework, exceptional costs shall consist of non-recurring costs 
relating to the provision of air navigation services, including any non-recoverable taxes and 
customs duties. 

In relation to the exceptional costs, the NSA should perform the following procedures: 

1.  Verify that the only elements included in the exceptional costs reported in the 

reporting tables are the ones listed in the regulatory framework. 

a.  This is verified by enquiring the ANSP for the details of what costs are included 

in that category and verifying that information. Reviewing the audit trail 
between the available actual costs for the preceding reference period and the 
determined costs is not an option for this category as these costs should be 
non-recurring.  

b.  The determined costs should not be of any other type than the ones allowed by 
the Regulation (non-recurring costs, including any non-recoverable taxes and 
customs duties). 

c.  The determined costs should not include any asset impairment as they cannot 

be planned by definition.  

2.  Check that only the ANS related exceptional costs were reported in the reporting 

tables. 

a.  This is verified by enquiring the ANSP for the details of what costs are included 

in that category and verifying that information. Reviewing the audit trail 
between the available actual costs for the preceding reference period and the 

31 

 
 
determined costs is not an option for this category as these costs should be 
non-recurring.  

b.  The costs added through the adjustments should not include any component 

not related to the provision of ANS.  

3.  Verify that all adjustments performed to the exceptional costs rely on sound 

assumptions. 

a.  Detail on the assumptions used can be found in the Performance Plan (cost 

efficiency section) and in its Annex F. Baseline cost efficiency values for RP3. 
Any other needed information should be enquired to the ANSP. 

b.  These assumptions should be reviewed and their soundness verified. For 

example, this can happen when an ANSP considers adapting its pension cost 
calculation method. Applying IFRS and its projected unit credit method to 
calculate the obligation and the yearly service cost would lead to better 
compliance with the Regulation and could lead to large payment required to be 
done to the pensions as no provision was constituted for the purpose of the 
pension benefits to be paid in the future. 

4.  Verify that the adjustments are correctly reflecting the assumptions. 

While the previous verification procedure was about the verification of the qualitative 
dimension of the adjustments, this procedure is about the verification of their 
quantitative adjustments. The NSA should verify that the assumptions were correctly 
reflected in the calculation of the adjustments. 

A.2.2 Verification of the bookings of costs on cost centres 

Cost centres are only used for actuals in the ANSP finance/controlling software. Hence, no 
verification procedure is required for determined costs. 

A.2.3 Verification of allocations 

According to Regulation (EU) No. 550/2004 as amended by Regulation (EC) No 1070/2009, 
cross-subsidy is not allowed between en route and terminal charges. Costs that pertain to both 
terminal services and en route services shall be allocated in a proportional way between en 
route services and terminal services on the basis of a transparent methodology.  

According to Implementing Regulation (EU) 2019/317, Article 22(5) the determined costs 
shall be allocated in a transparent way to the charging zones in respect of which they are 
incurred. Determined costs that are incurred in respect of several charging zones shall be 
allocated in a proportional way, on the basis of a transparent methodology. 

The key risks related to allocations are incorrect apportionments between en route and 
terminal, or the mis-allocation of costs relating to activities outside the scope of the 
regulatory framework. 

The NSA is responsible for checking that the ANSP complies with these regulatory 
requirements. The NSA is also responsible for checking the allocation of costs to different 
charging zones of the same type and to the different services provided in a charging zone. It 

32 

 
 
 
can be done by performing the below procedures. They are applicable to these three types of 
allocations.  

1.  Verify the allocation methodology for determined costs and analyse any significant 
changes in the allocation methodology and assumptions compared to the one 
implemented for the actuals of the preceding reference period. 

a.  The ANSP have to provide the details and assumptions related to the allocations 

in determined costs. They should be disclosed in the Annex A (additional 
information on en route determined costs), Annex B (additional information on 
terminal determined costs) and Annex M (cost allocation). 

b.  The NSA should review the above mentioned information and validate the main 

allocations. 

i.  The focus should be put on the allocations of the largest costs.  

As a consequence, the ANSP allocate the approach costs to the terminal 
charging zones. The NSA should verify that the allocation is done on 
reasonable criteria/allocation keys. The 20km rule (i.e. based on the 
proportion of Terminal Manoeuvring Area (TMA) airspace volume inside 
versus outside the cylinder of 19,8 km horizontal radius is an example of 
proportionate allocation key. 

ii.  The allocations should be reviewed for the causality and the accuracy of 
the driver quantities (or allocation key ratios). The International Civil 
Aviation Organisation (ICAO)11 provides detailed guidance on that topic, 
in its Chapter 5, Section D Allocation of costs. 

4.  Verify the causality between the source and destination of costs.  

a.  Causality: causality is the most important principle related to 

cost allocations. All cost allocation model should be 
principally based on the concept of causality. It is the logical 
relation between and cost source (input) and cost destination 
(output). It means that the cost allocated from a certain 
source are allocated to (all but only) destinations that 
“consume” that source for the output to be achieved based 
on a driver (or allocation key) that reflects best the 
proportion of source cost consumed by each of the 
destinations. 

b.  For example, the cost of the support functions are allocated 

to the operational functions being supported. 

5.  Verify the causality of the drivers/allocation keys. 

c.  There should be a logical link between the costs being 
allocated and the driver/allocation key. Maximising the 
causality is best practice. 

11 International Civil Aviation Organization, “Manual on Air Navigation Services Economics”, 2013. 

33 

 
 
d.  For example, allocating the costs of the support functions to 
the operational functions being supported based on time 
spent by the support functions employees is a good practice. 

e.  Where costs cannot be allocated on a statistical basis 

between terminal and en route, the Central Route Charges 
Office (CRCO) proposed the following apportionments12: 

i.  25% of the costs can be allocated to en route 
services if the facilities are utilised mainly for 
terminal navigation; 

ii.  50% of the costs can be allocated to en route 

services if the facilities are utilised to the same 
extent for terminal and en route navigation; 

iii.  75% of the costs can be allocated to en route if the 

facilities are utilised mainly for en route 
navigation. 

As highlighted in a study for the EC13, the application of these 
allocation keys by ANSPs that also use activity based costing or 
other complex allocation methods suggests a possibility that they 
may either be over-used or favour strategies to reduce terminal 
charges. The causality principle should be favoured above the 
CRCO principles. 

6.  Verify the accuracy of the driver quantities/allocation key ratios. 

a.  As this section concerns the determined costs, it is likely that 
more rough assumptions are taken as the ANSP using a 
system for management accounting and cost allocations 
might not use them only for actuals, not for the determined 
costs. These assumptions should be verified for the accuracy, 
for instance based on the actuals from the previous reference 
period. 

b.  For example, if the cost of the support functions are said to 
be allocated to the operational functions based on the time 
spent, a verification procedure could be to review the 
employees timesheets from the preceding reference period. 

2.  Verify that the allocation methodology is correctly reflected in the costs by service and 

costs by charging zone. 

a.  This verification procedure is the quantitative verification that the allocation 

method described is accurately implemented to obtain the costs reported in the 
reporting tables.  

12 European Organisation for the Safety of Air Navigation, Central Route Charges Office, Eurocontrol, “Principles 
for establishing the cost base for en route charges and the calculation of the unit rates”, 2018. 

13 Support study to the evaluation of cost allocation to marketable terminal air navigation services, Study contract 
no MOVE/E3/SER/2018-333/SI2.789318, 2019. 

34 

 
 
b.  The NSA could verify the allocations by reperforming some of the cost 

allocations, starting from the costs by nature and using the assumptions 
described in the Annex A, Annex B and Annex M of the Performance Plan. This 
is a “directional” verification as it is not expected of the ANSP to disclose all 
detailed allocations and allocation keys. Nevertheless, if the allocation and 
allocation keys linked to the largest amounts were properly and accurately 
disclosed, the NSA should obtain amounts in the same range as the one 
determined by the ANSP. 

c.  The NSA could also ask the ANSP for the calculation file starting from the cost 

by nature and used to obtain the cost by service and by charging zone. 
Reviewing it would enable the NSA to do this verification.  

A.2.4 Verification of specific lines 

A.2.4.1 Inflation 

According to Article 26 of Implementing Regulation (EU) 2019/317, Art. 26, for each year of 
the reference period, the determined costs included in the cost bases for en route and 
terminal charges of year n expressed in nominal terms shall be adjusted on the basis of the 
difference in percentage between the actual inflation index and the forecast inflation index for 
that year n and included as an adjustment for the calculation of the unit rate for year n+2. The 
determined costs referred to in the third subparagraph of Art. 22(1), and the determined 
costs referred to in points (c) and (d) of Art. 22(4) where historical cost accounting is applied, 
shall not be subject to any inflation adjustment. 

The forecast inflation index is defined in Implementing Regulation (EU) 2019/317, Art. 2, as 
the annual inflation index based on the third year before the start of a reference period and 
computed by using the latest available inflation forecast of average Consumer Price Index 
percentage change published by the International Monetary Fund for the Member State 
concerned at the time of drafting the Performance Plan. In case the percentage change 
published by the International Monetary Fund (IMF) for a given year is negative, a zero value 
shall be used. 

To verify the inflation indexes and percentage, NSA should apply the following procedure: 

1.  Verify that the ANSP used the correct forecast inflation percentage, i.e. the one from 

the International Monetary Fund as foreseen by the legal framework.  

a.  This is done by reconciling the forecast inflation percentages with the latest 
available inflation forecast of average Consumer Price Index percentage 
published by the IMF for the Member State concerned at the time of drafting the 
Performance Plan. In case the percentage change published by the IMF14 for a 
given year is negative, a zero value shall be used. 

b.  The determined costs referred to in the third subparagraph of Article 22(1), 

and the determined costs referred to in points (c) and (d) of Article 22(4) where 
historical cost accounting is applied, shall not be subject to any inflation 
adjustment. 

14 This information can be found at the following link: https://www.imf.org/en/Publications/SPROLLs/world-
economic-outlook-databases#sort=%40imfdate%20descending  

35 

 
 
 
A.2.4.2 Procedures for specific cost items 

No general verification procedures apply to these specific cost items. The specific procedures 
for each cost item are covered in their dedicated sections below. 

A.2.4.2.1 Procedures for specific cost items – Costs of new and existing 

investments 

This section is not strictly only about the unforeseen changes linked to investments but covers 
both the verification procedures related to the new and existing investment determined costs 
and to the addition, cancellation or replacement of major investments. No verification is linked 
to the related unforeseen changes as actuals are required first and this section only concerns 
the determined costs. Nevertheless, these verification procedures are included in this section 
as a verification of the new and existing investments determined costs is required to verify 
any unforeseen change and in case of adding, cancelling or replacing any major investment. 

In RP2, it was not possible for an ANSP to recover (or reimburse) the difference between 
actuals and determined costs linked to new and existing investments. 

RP3 Regulation (EU) 2019/317 defines the new and existing investments as the acquisition, 
development, replacement, upgrade or leasing of fixed assets where depreciation costs, cost 
of capital, or in the case of leasing, operating costs, for that investment are incurred during 
the reference period covered by the Performance Plan. 

Annex II describes what the Performance Plan shall include on the new and existing 
investments, more particularly: 

1.  The determined costs of new and existing investments in respect of depreciation, cost 
of capital and cost of leasing over the whole reference period and in respect of each 
calendar year thereof, as required in Annex VII;  

2.  Description and justification of the major investments, including with regard to the 

following elements: 

a.  Total value of each major investment; 

b.  The asset or assets acquired or developed; 

c.  Information on the benefit of the investment for airspace users and on the 

results of the consultation of airspace users' representatives; 

d.  As regards major investments in ATM systems: 

i.  Differentiation between investments in new systems, overhaul of 

existing systems and replacement investments; 

ii.  Justification of the relevance of each investment with reference to the 
European ATM Master Plan, and the common projects referred to in 
Article 15a of Regulation (EC) No 550/2004 as amended by Regulation 
(EC) No 1070/2009; 

Where, during the reference period, air navigation service providers intend to add, cancel or 
replace major investments with respect to information on major investments identified in the 
Performance Plan in accordance with point 2.2(b) of Annex II, these changes shall be 
approved by the national supervisory authority, after consultation of airspace users' 

36 

 
 
representatives. 

To verify the costs of new and existing investments, NSA should apply the following 
procedures: 

1.  Verify the eligibility of determined costs included, i.e. that the determined costs of new 
and existing investments are made of depreciation costs, cost of capital and leasing 
costs.  

a.  This is done by reconciling the costs of new and existing investments, by 

investment, with their cost by nature components depreciation, cost of capital 
and other operating costs (for leasing costs).  

i.  A difference in the cost of capital in Reporting Table 1 can be observed 
between Sections 3.11 and 1.4 (New and existing investments vs by 
nature), as 3.3 Net current assets is not included in the net book value 
of new and existing investments.  

ii.  No difference in the depreciation cost can be observed in Reporting 

Table 1 between Sections 3.10 and 1.3 (New and existing investments 
vs by nature). 

The NSA should be particularly careful with this verification as while 
Eurocontrol reporting allows that when subsidies are used to finance 
investments relating to common projects, the revenues associated with 
these subsidies can be used to net-off the depreciation costs, this is not 
possible with the performance and charging scheme. A deduction from 
the unit rate for subsidies received is instead applicable as ‘other 
revenue’. 

iii.  Cost of leasing (if any) are likely to represent a small part of the total 
other operating costs. Reconciling it with the financial statements 
enables the NSA to perform this verification as cost of leasing should be 
reported on a specific line.  

b.  Tool 5 is an Excel-based tool built for the purpose of collecting and easing the 
verification of ANSPs costs related to the new and existing investments. It 
details the total cost of new and existing investments by nature (depreciation, 
cost of capital, cost of leasing), by type (new major investments, other new 
investments and existing investments) and the related net book value of the 
fixed assets and by investment type). This detail provides full transparency on 
these sections of the cost and enable the NSA to verify that all cost of capital, 
depreciation and leasing costs tie together and are relatable to the investment 
plan. Once the table has been filled in by the ANSP, the NSA is recommended to 
perform the following verifications: 

i.  Reconciliation of the new major investments, other new investments, 

existing investments with the Performance Plan. 

ii.  Reconciliation of the depreciation, cost of capital and cost of leasing 

with the ones provided in the Reporting Table 1. 

iii.  Reconciliation of the net book value fixed assets and the cost of capital 

pre tax rate (%) provided in the Reporting Table 1. 

37 

 
iv.  Verification of the depreciation costs reported, multiplying the net book 
value fixed assets and the depreciation rate (i.e. the amortisation period 
in years). 

v.  Verification of the cost of capital reported, multiplying the net book 

value fixed assets and the cost of capital pre tax rate (%). 

c.  Even if not entering the new and existing investments as such, it is good 

practice for transparency to disclose the operating costs (i.e. staff costs and 
other operating costs) linked to new and existing investments. These operating 
costs do not enter the scope of the adjustments related to unforeseen changes.  

2.  Reconcile the total determined cost of new and existing investment provided in 
Reporting Table 1 with the detail by investment/asset from the investment plan 
included in the Performance Plan. 

A.2.4.2.2 Procedures for specific cost items – Costs of competent 
authorities, qualified entities and Eurocontrol 

According to the third subparagraph of Article 22(1) Member States may decide to include in 
the cost base the following determined costs incurred in relation to the provision of air 
navigation services, in accordance with the second sentence of point (b) of Article 15(2) of 
Regulation (EC) No 550/2004 and Regulation (EC) No 1070/2009: 

–  Determined costs incurred by competent authorities; 

–  Determined costs incurred by the qualified entities referred to in Article 3 of 

Regulation (EC) No 550/2004; 

–  Determined costs stemming from the Eurocontrol International Convention relating to 
cooperation for the safety of air navigation of 13 December 1960 as last amended. 

The subsequent procedures are recommended to be followed: 

1.  Verify that the authorities and entities for which costs are included in the cost base 

fulfil all the requirements set out in the Regulation. 

a.  The NSAs should identify the authorities and entities for which costs are 

included in the cost base and confirm that they fulfil all the requirements set 
out in Regulation (EC) 550/2004, Article 3 and its requirements listed in Tool 1.  

i.  NSAs should identify each entity for which costs are included in the 

reporting tables based on Section “1.1 The situation” of the 
Performance Plan. 

ii.  The NSA should ensure they meet the following requirements set out in 
Article 4 of Regulation (EC) No 549/2004 as amended by Regulation 
(EC) No 1070/2009: 

1.  The national supervisory authorities shall be independent of air 

navigation service providers. This independence shall be 
achieved through adequate separation, at the functional level at 
least, between the national supervisory authorities and such 
providers. 

38 

 
 
2.  National supervisory authorities shall exercise their powers 
impartially, independently and transparently. This shall be 
achieve by applying appropriate management and control 
mechanisms, including within the administration of a Member 
State. However, this shall not prevent the national supervisory 
authorities from exercising their tasks within the rules of 
organisation of national civil aviation authorities or any other 
public bodies. 

3.  Member States shall ensure that national supervisory authorities 
have the necessary resources and capabilities to carry out the 
tasks assigned to them under this Regulation in an efficient and 
timely manner. 

iii.  The NSA should ensure the qualified entities meet the requirements set 
out in Regulation (EU) 2017/373 and Annex I of Regulation (EC) No 
550/2004: 

1.  Be able to document extensive experience in assessing public and 

private entities in the air transport sectors, in particular air 
navigation service providers, and in other similar sectors in one 
or more of the fields covered by this Regulation; 

2.  Have comprehensive rules and regulations for the periodic 

survey of the abovementioned entities, published and continually 
upgraded and improved through research and development 
programmes; 

3.  Not be controlled by air navigation service providers, by airport 
management authorities or by others engaged commercially in 
the provision of air navigation services or in air transport 
services; 

4.  Be established with significant technical, managerial, support and 
research staff commensurate with the tasks to be carried out; 

5.  Be managed and administered in such a way as to ensure the 
confidentiality of information required by the administration; 

6.  Be prepared to provide relevant information to the national 

supervisory authority concerned; 

7.  Have defined and documented its policy and objectives for and 
commitment to quality and have ensured that this policy is 
understood, implemented and maintained at all levels in the 
organisation; 

8.  Have developed, implemented and maintained an effective 
internal quality system based on appropriate parts of 
internationally recognised quality standards and in compliance 
with EN 45004 (inspection bodies) and with EN 29001 or most 
recent requirements, as interpreted by the International 
Association of Classification Societies (IACS) Quality System 
Certification Scheme Requirements; 

39 

 
9.  Be subject to certification of its quality system by an independent 
body of auditors recognised by the authorities of the Member 
State in which it is located. 

iv.  Finally, as per Article 3 of Regulation (EC) No 550/2004, the delegation 
granted by a national supervisory authority shall be valid within the 
Community for a renewable period of three years. 

2.  Verify the eligibility of determined costs included in the cost base.  

a.  The determined costs of the competent authorities and qualified entities should 
be verified as per the same methodology as for the ANSP. As these entities 
have lower costs, often less variety in terms of costs by nature and provide less 
services than the ANSP, verification procedures could be lighter.. 

b.  The determined costs provided for Eurocontrol (in the NSA reporting table, 

under item 3.13) should be verified against the forecasted costs published by 
Eurocontrol. 

A.2.4.2.3 Procedures for specific cost items – Pension costs 

The verification of determined pension costs is fully covered in the Section A.2.1.2 
PROCEDURES FOR STAFF COSTS. Hence, no additional verification procedure is required here. 

A.2.4.2.4 Procedures for specific cost items – Interest rates 

The verification of the determined interest cost is fully covered in the Section A.2.1.5 
PROCEDURES FOR COST OF CAPITAL. Hence, no additional verification procedure is required 
here.  

A.2.4.2.5 Procedures for specific cost items – National taxation law or other 

new cost items 

Some NSAs may include in the determined cost base some uncontrollable costs (e.g. linked to 
future taxes or legislation). If this is the case, these ANSPs are required to detail them in the 
annexes of the Performance Plan.  

The NSA are then responsible for verifying these costs, which can be done by performing the 
following procedures: 

1.  Verify that the assumptions described in the Performance Plans are accurate.  

a.  Those assumptions should be described in the annex of the Performance Plan, 

in the additional information on cost efficiency. 

b.  The NSA should verify that the assumption taken as a basis for the 

determination of the determined costs amount are correct and based on the 
latest available information. 

2.  Reconcile the determined costs presented in the Performance Plans with the detail of 

the reporting tables. 

40 

 
 
 
 
a.  These costs could be included in multiple cost by nature categories, such as 

staff cost, other operating cost or exceptional costs. 

A.2.4.3 Procedures for other revenues Art. 25(2)(i) 

ANSPs are not required to forecast their future grants and revenues. No determined revenue is 
to be entered in the reporting tables. Hence, no verification procedure is required for the 
following procedures:  

A.2.4.3.1 Procedures for other revenues Art.25(2)(i) – Financial support from 

Union assistance programmes 

A.2.4.3.2 Procedures for other revenues Art.25(2)(i) – Other public funds 

obtained from public authorities 

A.2.4.3.3  Procedures for other revenues Art.25(2)(i) – Revenue from 

commercial activities 

A.2.4.3.4 Procedures for other revenues Art.25(2)(i) – Revenue from 
contracts concluded between ANSPs and airport operators 

A.2.4.4 Common projects 

The costs related to the common projects are included in the new and existing investments of 
ANSP (Section A.2.4.2.1) while the related grants obtained are included in the revenues 
received from Union assistance programmes (Section A.2.4.3.1).  

The NSA is responsible to check the compliance with the above requirements. The following 
procedures are recommended to this end: 

1.  Verify that all common projects from the Performance Plan were included in the 

determined investment costs. 

2.  Verify the eligibility of determined costs included. 

3.  Verify the updated investment plan in case an ANSP intends to add, cancel or replace 

major investments during the reference period. 

As the common projects revenue/grants are not to be forecasted and the Reporting Table 4 
does only include actuals, the verification procedures applicable to the determined new and 
existing investments are also applicable to this section (already included in the above 
procedures). More details on the related verification procedures can be found in Section 
A.2.4.2.1. 

41 

 
 
 
 
A.3 Conclusion Phase 

A.3.1 Summarise draft findings and share draft findings with the service provider 

One of the fieldwork objectives is to obtain proposed performance targets included in the 
Performance Plans that are consistent with the Union-wide performance targets. 

Based on the requirements of Regulation (EU) 2017/373 specified in Annex II, Section B, 
“Oversight Programme”, it is advised for the NSAs to prepare a document which explains the 
work performed, the results from the tested procedures and the modifications made to the 
Performance Plan. NSAs will present the findings identified in a draft verification report. It 
aims to introduce the respective findings identified and provide to ANSPs the opportunity to 
express their comments accordingly.  

It is important to mention that the Conclusion phase for determined costs, is not the final step 
but an intermediate one, as the draft findings which will be sent out to the ANSPs are part of 
their negotiation process for defining the determined costs.  

Considering that the Performance Plans are compiled by the NSAs based on the input of the 
ANSPs, the final outcome of this phase will be the finalised draft Performance Plan, which will 
then be consulted with the stakeholders. However, considering that these draft findings will 
also help the ANSPs to improve their documentation concerning the determined costs, it is 
important to summarise and communicate them to the service providers concerned. 
Therefore, while compiling the draft report, the NSA should be careful to display all cases that 
have been marked as an “E” in the Verification Programme.  

While preparing the draft findings, referring to Tool 4 of the Verification Programme Toolkit, 
NSAs should: 

1.  Write the number of findings which are being listed in the draft report. 

The NSA should list all the exceptions identified and number them. This will help the 
NSAs to better monitor and keep track of the ANSPs performance in the future.  

2.  Write a brief caption for the finding being reported. 

It is good practice to separate the findings in order to increase the transparency of the 
information and make it easier for the ANSPs to follow up.  

3.  Introduce the legal framework breached by the ANSPs which triggered the finding. 

This will assist not only ANSPs by introducing them to the right way of calculating the 
costs in the future, but also the NSAs to categorise and highlight where the problem 
stands. Once the ANSPs will come back with their replies, comments or additional 
evidence to be reviewed, it will be easier for the NSAs to quickly check if the new 
evidences delivered will affect the identified finding. 

4.  Identify clearly the actions to be taken by the ANSP  

5.  Redact the Verification Draft Report (and later the Verification Final Report, when the 

timeline for obtaining the official comments from the ANSP is passed) which is a tool 
not only to monitor and reflect the findings of a certain point in time, but also to 
document the changes and improvements in the calculation of the unit cost which 
impact the users of the ASN. 

42 

 
 
A.3.2 Finalise Verification Report 

After delivering to ANSPs the draft verification report, the ANSPs will have two calendar 
weeks to provide their comments and, or the new supporting evidences for the findings listed 
in the draft report. After this period is finished, the NSAs need to assess whether the 
comments and the new evidences obtained during this period are a sufficient, relevant and 
reliable response for withdrawing the findings or keeping them in the final report.  

After auditing the new supporting documents received (if any), NSAs should prepare within a 
calendar week the final verification report, which will contain the final findings after reviewing 
the mentioned files. 

While preparing the final verification report, the NSAs should reflect the responses of the 
ANSPs into the final report. There will be three cases: 

1.  The ANSP provides comments and, or new evidences which support the draft findings, 

and all the findings are withdrawn.  

In this case the NSA should issue a clean report by confirming all the procedures. In an 
annex of the report, the NSA includes its own comments after the evidence received, 
but also the reply of the ANSP with regards to each withdrawn finding. 

2.  The ANSP provides comments and, or new evidences and only a part of the findings 

are withdrawn.  

In this case, the NSA waves from the report those findings for which the evidence 
received is sufficient, reliable and relevant for assessing the procedure as confirmed. 
In an annex of the report, the NSA includes its own comments to the evidence received 
and the reply of the ANSP. 

3.  The ANSP does not reply.  

In this case, the NSA will issue the final report and no changes will be applied to the 
factual findings. The NSA will document in the annex that no reply was received from 
the ANSP within the communicated timeframe of two calendar weeks. 

The final report will then be delivered to the respective ANSP. No further comments or 
evidence are allowed to be given by the ANSPs beyond this point, as the verification 
report would then be final. 

When compiling the Verification Final Report, the NSAs should use the same template of Tool 
4 which was used for the Verification Draft Report mentioned in Section A.3.1. In addition to 
what is mentioned in A.3.1, the Final Report will contain: 

1.  ANSP Comments 

The NSA will quote or summarise (depending on the length and the relevance of the 
comments provided) the reply received within the 2 calendar weeks from ANSP. 

2.  NSA Final Comments 

After evaluating the feedback from the ANSP, their official response and the additional 
materials provided from them for each, the NSAs should conclude on the final 
comments and present them in the final report, as explained previously in the third 
paragraph of this section. 

43 

 
 
A.3.3 Follow up on the implementation of findings 

The ANSP should follow up the findings by amending their draft performance plans to ensure 
local targets are consistent with Union wide targets. It may be useful for an NSA to document 
the findings identified as well as of the related conclusions and decisions as they may want to 
refer to them in the next years of the RP or during the verification of the next RP determined 
costs. 

Therefore, a database with the findings should be filled in. This database will show in details all 
the findings identified, the respective cost category, the raised recommendations by the NSA 
and their status of implementation from the ANSPs.  

Keeping these records organised and updated in one database, will help the NSAs to trace 
back what was identified and monitor the progress of the ANSPs accordingly. This monitoring 
is in accordance with Article 7.7 of Regulation (EU) No 550/2004, and will also help to answer 
any queries that the European Commission might have during their monitoring process. 

44 

 
B. Actual costs 

B.1 Planning Phase 

For actual costs, an annual verification process is foreseen. During the Planning phase of this 
process, the NSA should align internally on the objective of the annual verification and the 
scope of the verification. Also, the NSA should aim to identify during this phase what are the 
potential areas of risk, based on the information preliminary provided by the ANSPs. 

Timing 

The timing of the verification process for actual costs is driven by the deadline of submission 
by the NSAs to the Commission of the calculated unit rate for year n, foreseen in 
Implementing Regulation (EU) 2019/317, Art. 29(2). Thus, considering that the unit rate for 
year n needs to be submitted by 1 June of year n-1 during each year of the RP, the 
verification process of the NSA needs to be performed on a yearly basis by that date. This 
deadline for the verification process is considered as essential in view of the Performance 
Review Body’s (PRB) and Eurocontrol’s own verification procedures that ensue the submission 
of the calculated unit rate. The certification of the annual financial statement must not delay 
the submission of cost reporting tables to the Commission by 1 June every year.  

The following timeline graphic below provides an overview of the timing of the verification 
process for actual costs. This is explained in further detail below.  

45 

 
 
 
B.1.1 Define objective and scope  

1.  Objective of verification 

The objective of the actual costs review should be the compliance of the ANSPs’ practices and 
their reported costs with the criteria and principles outlined as regards ANS costs in the SES 
regulatory framework. 

For actual costs, a specific area of interest will be the verification of the adjustments that 
impact the unit rate from differences between determined costs included in the Performance 
Plan and actual costs (cost items referred to in Article 28(3)-(7) of Implementing Regulation 
(EU) 2019/317. As regards RP3, these also concern the costs exempt from cost sharing 
carried over from RP2. 

2.  Scope of the verification  

For actual costs, the same requirements in terms of cost eligibility apply as for determined 
costs, as provided for in Art. 23 of Implementing Regulation (EU) 2019/317. Also, the 
fundamental principles of setting the charges stated in Art. 15 of Regulation (EC) No 
550/2004 as amended by Regulation (EC) No 1070/2009 apply (e.g. avoidance of cross-
subsidy, separate identification of the different ANS cost).  

Eligibility of determined costs in the draft Performance Plan and actual costs is verified for 
formal correctness against SES legislation and IFRS. Material eligibility of determined costs is 
verified against previous Performance Plans, previous annual monitoring reports and against 

46 

 
 
 
 
their contribution to achieving performance targets. Material eligibility of actual costs is 
verified against the Performance Plan.  

Despite the fact that the unit rates are mostly calculated based on the determined costs, the 
actual costs also impact the unit rates. Firstly, the actual costs of a certain reference period 
form the basis for the baseline value of the determined costs of the following reference 
period. Secondly, the cost risk sharing mechanism modifies the unit rate based on the 
difference between the actuals and the determined costs of a certain reference period. The 
importance of having accurate actual costs year to year cannot therefore be underestimated.  

Based on these requirements, all the costs by nature reported annually by the ANSPs need to 
be tested by the NSA, similarly to the determined costs.  

In relation to actual costs however, the level of depth and detail of the testing performed 
could be adjusted based on the risk assessment performed by the NSA as per section B.1.3.  

The recommended approach considering the above would be to perform annually a 
verification of all reported actual costs, with detailed checks on the adjustment elements that 
impact the unit rate and on other items of risk as identified by the NSA, and with a more high-
level approach to the verification for the reported costs by nature, focused on compliance with 
Art. 23 of Implementing Regulation (EU) 2019/317. 

Similar to determined costs, it is also recommended that the objective and the scope of the 
verification are adequately communicated to the ANSP.  

B.1.2 Request information to the service provider 

Similarly to the Determined Costs, the ANSPs should facilitate inspections and surveys carried 
out by the NSAs also in the case of actual costs, therefore, we refer to Tool 2 for a 
standardised list of financial and business information to be requested to the ANSPs for the 
verification process of actual costs. 

As regards the information required for carrying out the verification procedures for actual 
costs, the NSA should refer primarily to Annexes VII and IX of Implementing Regulation (EU) 
2019/317, considering any specifics included in the Tool 3. The NSAs should obtain from the 
ANSPs, inter alia, information on costs and on the allocation of costs, data on revenue 
streams, information on planned investments including new and existing investments and 
major investments and information for the application of Art. 28.  

Most importantly, for the testing of actual costs, the NSA should obtain the complementary 
information on adjustments, common projects and revenues from Union assistance 
programmes and from other public authorities.  

B.1.3 Perform preliminary risk assessment and sampling 

Similar to when testing determined costs, after establishing the verification objective, the NSA 
is recommended to perform a set of initial checks in order to define the areas of risk 
associated with the verification. This will enable the NSA to further refine the scope of the 
verification work (in terms of depth and also extent of areas verified) for a better use of the 
existing resources. A specific tool that the NSA may use for this step is the Preliminary Risk 
Assessment and Sampling template (Tool 6).  

47 

 
 
 
For actual costs, the NSAs could consider as main areas of risk the elements that adjust the 
cost base of determined costs and impact the calculation of the unit rate, of which of interest 
for the present document are the inflation adjustment, the cost items referred to in Article 
28(3) of Implementing Regulation (EU) 2019/317 and the deductions for other revenues 
under Art. 25 of Implementing Regulation (EU) 2019/317. 

While this perspective on the risk areas is valid, we recommend that the actual costs by nature 
reported by the ANSPs are also considered in the risk overview of the NSA, even if they do not 
directly impact the calculation of the unit rate. This is because for RP3 the reporting for 
several types of costs has been better defined and has essentially changed compared to RP2, 
for example as regards pension costs and depreciation. Pension costs will raise specific IFRS 
reporting concerns that the NSA needs to be aware of, while depreciation cost also needs to 
take into account the reporting on new and existing investments, common projects and EU-
funded projects.  

As for determined costs, the NSA needs to consider a wide variety of sources of information 
when performing the risk analysis, including, inter alia: 

–  The reporting tables and the additional information thereon provided according to the 

Regulation; 

–  General checks on the overall quality of the submitted reporting tables: the integrity of 
the formulas, which at the first glance can be identified in the first tab of the reporting 
tables “Checks”. In case of “False" messages, further information needs to be asked to 
the ANSPs and further evidences might be requested. 

–  The report of costs exempt under the cost sharing mechanism (Art.14 of Implementing 

Regulation (EU) 391/2013) from RP2; 

–  The underlying breakdowns and information as regards Table 4 (Annex IX of 

Implementing Regulation (EU) 2019/317; 

–  The organisational set-up of the ANSP and, for ANSPs that are public entities, any 

changes in the institutional arrangements or relevant governing legislation; 

–  Results from NSA verifications of cost-eligibility from previous RPs; 

–  Overall replies provided by the ANSP to the Pre-fieldwork Questionnaire. 

In a similar way as per the determined costs, the NSAs can use the risk assessment template 
(Tool 6) which covers horizontal and vertical analysis of the costs by nature declared and 
follow the same steps for the additional cross checks of Reporting Table 1 as mentioned in the 
determined costs section A.1.3. 

Using this tool, the NSA will be able to better define the scope of its verification work (in terms 
of depth and also extent of areas verified) for a better use of the existing resources, as well as 
document the risk assessment and the sample chosen for verification. 

The Preliminary Risk Assessment and Sampling follows under the same steps and procedures 
as described in the determined costs section, however, due to specificities between 
determined and actuals costs, additional steps need to be considered by the NSAs.  

When assessing the risks, the NSA needs to document its decision on the scoped cost 
categories and service providers. NSAs should consider the following elements in order to 
properly document the risk level related to each ANSP: 

48 

 
A. For the verification of the eligibility of costs, referring to the total costs reported in Table 
1, the same procedures as mentioned previously in section A.1.3 are applicable. 

1.  Proper use of previous experiences with the service providers and their reporting 

tables: 

Further details are mentioned in section A.1.3 in determined costs. 

2.  Analyse the costs by nature declared by the ANSPs and the service providers and their 

variances compared with the previous years’ costs (risk of unusual items or 
transactions): 

Further details are mentioned in section A.1.3 in determined costs  

It is crucial to mention that the NSA should document the preliminary risk assessment and the 
final decision of scoping the entities and cost categories for the verification process as per the 
levels of risks identified during their assessment. Tool 6 with its different tabs, is built to assist 
the NSA for documenting the NSA’s preliminary risk assessment and its decisions on which 
entity and what kind of cost categories (cost by nature) they will verify during the execution 
phase.  

The steps needed to be followed while determining the sample to be verified are detailed as 
per below: 

Step 1: Professional judgement on internal controls as well as other auditors’ reports 

Further details are mentioned in section A.1.3 in determined costs  

Step 2: Analyse the consolidated Reporting Table 1 versus the individual ANSPs respective 
reporting tables and identify the total share of each service provider towards the consolidated 
total cost:  

Further details are mentioned in section A.1.3 in determined costs. 

Step 3: Identify the population of cost items included in the reporting tables: 

Further details are mentioned in section A.1.3 in determined costs. 

Step 4: Determine the sample size and the sampled items: 

Further details are mentioned in section A.1.3 in determined costs. 

B. For the verification of the adjustments resulting from the unforeseen changes reported as 
per the requirements of the Article 28 of the Regulation (EU) 2019/317 Art. 28 and 
reflected in Reporting Table 2B. 

The NSAs can verify those adjustments incurred that have significant variance between the 
determined and the actual costs. 

C. For the verification of the cost allocations: 

NSAs can start the verification of the cost allocations based on the information they have at 
hand during the second part of the prior year.  

At this point in time, the final information is not yet available, however, the NSAs can manage 
their fieldwork time efficiently by verifying the information in hand. Once the service providers 

49 

 
 
 
 
 
 
will have the finalized data, the NSAs can verify during the fieldwork of the current year only 
the differences from the last verification performed during the second part of year n-1. As 
such, there will be no need for the NSAs to sample the cost allocations to be verified. 

50 

 
 
B.2 Execution Phase 

B.2.1 Verification of costs by nature (cost base eligibility and accuracy) 

B.2.1.1 Procedures transversal to all cost by nature 

Three “components” are observed in terms of cost reporting in the context of this Regulatory 
Framework: the ANSP official published Financial Statements, the creation of ANS/non-ANS 
separate accounts and the reporting of eligible costs in the official reporting tables.  

It is understood in the verification programme and this guidance material that the numbers 
provided in the Reporting Table 1 of Annex VII, Implementing Regulation (EU) 2019/317 are 
the result of the following process and documents as outlined in Regulation 550/2004 as 
amended by Regulation (EC) No 1070/2009, Article 12: 

The ANSP maintain financial statements (or statutory accounts), i.e. keeps formal records of 
the financial activities and position of its business in a dedicated software. The Financial 
Statements fairness and compliance with International Financial Reporting Standards (IFRS) is 
regularly attested by independent auditors. 

1.  According to article 12(1) of Regulation (EC) No 550/2004, for ANSP for which full 
compliance with the international accounting standards is not possible, the provider 
shall endeavour to achieve such compliance to the maximum possible extent. 

2.  It was observed that some ANSPs have their financial audit process finalised after the 
first of June, deadline for submitting the reporting tables. In that case, the NSA should 
start their verifications on the basis of partial information and adapt their findings once 
audited accounts are available. 

The ANSP have to establish also regulatory accounts by excluding non-eligible cost items. 
These regulatory accounts only include the costs and income linked to the provision of ANS in 
the regulated area under their responsibility. 

The ANSP report their costs related to regulated ANS in the reporting tables by regrouping 
the costs from their regulatory accounts and possibly doing some adjustments to the source 
numbers. 

As a start for the verification of actuals cost by nature, the following five checks should be 
performed by NSA: 

1.  The first verification that NSA should do when verifying cost eligibility is to verify 
whether the ANSP’s financial statements were subject to an independent financial 
audit and were published. 

This is a clear requirement from EC Regulation 550/2004 as amended by Regulation 
(EC) No 1070/2009, Article 12 on the transparency of accounts. This ensures that the 
starting base for the actuals is accurate, allowing the NSA to rely on the information 
from the financial statements.  

2.  The second check to be done by NSA is to verify that the ANSP has separate accounts 
for ANS and non-ANS services. ANSPs may conduct operations or provide commercial 
services other than regulated ANS. These costs and revenues are non-eligible and 
should therefore be excluded from the regulatory accounts. For these services, 
separate accounts should be kept as they would be required to do if the services in 
question were provided by separate undertakings. Costs that are not related to the 

51 

 
provision of air navigation services or not incurred in the year should not be included in 
the actuals. Inter alia that concerns costs incurred to decommission an asset, to write-
off of the remaining asset value where the asset was no longer in use, or expenses to 
put into service a new asset in the following year. For this reason, the total expenses 
and income in the financial statements should be equal or higher than the separated 
ones for regulated ANS. 

a.  ANSPs must identify the eligible costs and revenues and only include those ones 

in the regulatory accounts, i.e.: 

i.  In relation to the facilities and services provided for and implemented 

under ICAO Regional Air Navigation Plan, European Region; 

ii.  Relevant for air navigation services; and, 

iii.  In the charging zones under their responsibility. 

b.  Given the number of activities conducted by ANSPs, there are many cost items 
which could be potentially improperly considered eligible. Several examples of 
services provided by ANSPs in EU Member States have been identified: 

i.  Provision of training to third-party entities (e.g. ATCO training 
organisations which are part of ANSPs or owned by ANSPs); 

ii.  Sales of consulting services to other ANSP’s or aviation sector entities; 

iii.  Calibration flights performed for other ANSPs or airports; 

iv.  ANS provided under market conditions (e.g. terminal ANS subject to 
market conditions and exempted from most of the performance and 
charging scheme); and, 

v.  Paid ANS provided in non-EU countries. 

3.  Review the grouping/mapping of the ANS costs into the cost by nature categories in 

the reporting tables. 

The objective of this verification procedure is to get a first view on the 
grouping/mapping of the ANS costs into the cost by nature categories in the reporting 
tables. It will allow the NSA to understand the overall methodology for 
grouping/mapping the costs and identify costs being potentially excluded. The 
verification in detail of costs included in each of the cost by nature category is subject 
to specific verification procedures in the next sections. 

4.  Reconcile the cost by nature amounts reported in the Reporting Table 1 by the ANSP 

to the ANS separate accounts and to the audited Financial Statements. 

In addition to the separation of accounts between ANS and non-ANS, IFRS adjustments 
may be performed: 

a.  For ANSP for which full compliance with the International Financial Reporting 

Standards (IFRS) is not possible, the provider may (have to) modify the figures 
when reporting them in the reporting tables in order to achieve the compliance 
to IFRS principles to the maximum possible extent. 

52 

 
 
i.  An example is the depreciation cost that may have to be accounted 
differently as the Regulation requires the straight-line method to be 
used (while IFRS (IAS16) allows for three depreciation methods, the 
straight line being one of them). 

ii.  Other examples are the elements that are specifically not allowed under 
the service provision Regulation15 such as the cost of any corrective 
measures imposed by the Framework Regulation16. 

b.  Any adjustments beyond the provisions of the International Financial Reporting 
Standards adopted by the Union pursuant to Commission Regulation (EC) No 
1126/2008 needs to be described and justified in the Performance Plan for 
review by the Commission and in the additional information to be provided in 
accordance with Annex II. 

5.  Check that the reported costs do not include elements that are specifically not allowed 

under the service provision Regulation, such as the cost of penalties imposed by 
Member States (according to Article 9 of the Framework Regulation) and the cost of 
any corrective measures imposed by the Framework Regulation. 

The methodology recommended for the verification of whether the modifications done to the 
actuals from the financial statements to the reporting tables are justifiable, logical and 
accurate is described in the next sections. 

B.2.1.2 Procedures for staff costs 

According to the Article 22 of Implementing Regulation (EU) 2019/317, staff costs should 
include gross remuneration, overtime payments, and employers' contributions to social 
security schemes, as well as pension costs and costs of other benefits. Pension costs shall be 
calculated using prudent assumptions based on the applicable pension scheme or on national 
law, as appropriate. 

To verify the eligibility of costs included in staff costs, three checks should be performed: 

1.  Verify that the costs included in the reporting tables are only the elements listed for 

staff costs in the regulatory framework. 

a.  The staff costs that can be included in the actual costs as per Implementing 
Regulation (EU) 2019/317, Articles 22 and 23 are the following ones: gross 
remuneration, overtime payments, and employers' contributions to social 
security schemes, as well as pension costs and costs of other benefits.  

b.  The first verification that should be done is a reconciliation of the staff costs 
included in the actual costs and the statutory accounts. Costs from the 
statutory accounts could be excluded from the actual costs, but not added. 

15 Regulation (EC) No 550/2004 of the European Parliament and of the Council of 10 March 2004 on the provision 
of air navigation services in the single European sky as amended by Regulation (EC) No 1070/2009 (the Service 
Provision Regulation). 

16 Regulation (EC) No 549/2004 amended by the Regulation (EC) No 1070/2009. 

53 

 
 
 
 
c.  To verify the nature of the staff costs included in the actual costs, a review of 

the general ledger (GL) accounts list (breakdown) (on the lowest level of detail) 
should be performed. Any unclear GL account for which the NSA has a doubt on 
whether they enter the scope of eligible staff costs, supporting accounting 
documents/evidence (e.g. invoices) could be requested for a sample of GL 
entries. The content and accuracy of costs booked on the GL accounts should 
however not be verified by the NSA as this is verified by the independent 
auditor. 

d.  In accordance with the IAS 19 list of employment benefits, other benefits may 
include termination costs, long-term paid absences, jubilee or other long-
service benefits, long-term disability benefits, profit-sharing and bonuses and 
deferred renumeration. These items are all in accordance with the Regulation. 

2.  For a sample of Staff costs, check whether the costs have been correctly shared 

between ANS and non-ANS. 

a.  Staff costs can either be fully and directly linked to regulated ANS, partially or 

not at all.  

i.  The costs that are fully and directly linked to regulated ANS should be 

fully included in the reporting tables. Examples are all salaries, pension 
costs, etc. of all ATCO working on all the regulated charging zones. 

ii.  The costs not at all related to the regulated ANS should not enter the 

reporting tables. An example could be the salary cost of marketing team 
in charge of the ANSP commercial activities. 

iii.  ANSP can also incur costs that are partially for the provision of 

regulated ANS and partially for other activities. An example could be the 
salary cost of support department of an ANSP that has both regulated 
ANS services and commercial activities. Only a proportionate part of 
these costs should be allocated to the regulated ANS services and 
reported in the reporting tables. More details on possible verification 
procedures are provided below. 

b.  This is done by reviewing extracts from the timesheet reporting system, 

employment contracts or calculations in case of other apportionment basis 
used. 

c.  An ANSP can separate staff costs between its regulated and non-regulated 
activities based on different elements: actuals (i.e. excluding the cost of 
resources not working on the provision of ANS and a part of the cost of 
employees working on ANS and non-ANS services), statistical measures based 
on historical data (e.g. based on number of full time equivalents (FTE)) and/or 
sharing keys (e.g. 75% ANS and 25% non-ANSP). The factors based on which 
the splits are made have to be agreed in advance between the NSA and ANSP. 

i.  The most accurate option is to do the split based on actuals but the 
information is not always available (e.g. if the ANSP does not use 
timesheets).  

54 

 
 
ii.  The second best option is to use statistical measures linked to the cost 
consumption. An example could be the following: if an ANSP provides 
services for both regulated and non-regulated airspace, the total cost of 
the ATCO could be split in proportion of the number of ATCO working for 
the regulated area vs for the non-regulated area. This method is slightly 
less accurate than the one based on the actuals as it relies on the 
assumption that the ATCOs serving the regulated and non-regulated 
area are paid on average the same salary while it might not necessarily 
be the case. 

iii.  The third option is to use predetermined sharing keys (e.g. 75% ANS and 
25% non-ANSP). While this is the easiest to implement and verify, it is 
also likely to be the less accurate as once adopted they are rarely 
challenged nor their accuracy verified on a regular basis. 

d.  Often, the three above factors are used by a single ANSP on different type of 

resources. For example, the full actual staff costs of ATCOs by control zone are 
normally easy to identify as ATCOs only work on one control zone. In terms of 
split, the first method can be easily used for ATCO costs. On the contrary, a 
support function such as Finance or Human resources (HR) is very likely to be 
responsible for the support of the entire ANSP, regulated ANS and non-
regulated ANS. The cost of these support functions, which are more indirect 
costs, is more difficult to split based on actuals (especially if the time spent on 
supporting regulated ANS vs other activities is not clearly captured in 
timesheets). This is the reason why statistical measures are very often used for 
these support functions and indirect costs. 

e.  Depending on the factor(s) used, different check should be done: 

i.  If a split is made based on actuals, it should be verified that 1) only the 
costs of the staff working fully or partially on regulated ANS is included 
in the actual costs and 2) that the cost of these resources included in the 
actual costs is correct. 

1.  The first point can be verified by requesting an organisational 
chart to understand how the organisation is structured and by 
identifying which employees/departments are included or 
excluded from the actual costs. In case of unclarity around the 
work performed by the certain employees/departments, 
timesheets (if used) or employment contract could be requested. 
In case none of the above is conclusive, the last option for 
verification would be to request to meet a sample of employee(s) 
and ask them to describe their tasks and responsibilities. This last 
verification method is however not recommended due to the time 
required for both the ANS and ANSP employees and the poor 
added value of the test. 

2.  Once the resources (and/or share of their costs) for 

inclusions/exclusion of the actual costs are identified, their staff 
cost should be linked on a personal level (anonymised if required) 
and verified. This can be done by reconciling the staff costs with 

55 

 
the payroll records and/or the payments related to social 
security for example. 

ii.  If a split is made based on statistical measures, it should be verified that: 
1) there is a good level of causality between the costs allocated and the 
statistical measure used to allocate these costs, and 2) that the 
quantitative data used for the statistical measures are correct and 
accurate. 

1.  The verification of the causality between the costs allocated and 
the statistical measure used to allocate these costs is based on 
the auditor common sense and understanding of the ANSP 
activities. For example, split (between regulated ANS vs non-
regulated ANS) the costs of the HR department based on the 
number of operational employees working for the regulated vs 
not regulated services implies a high level of causality as it can 
be assumed that the HR department workload is proportional to 
the number of employees. On the contrary, allocate the costs of 
the HR department based on the costs of the regulated vs non-
regulated ANS would be a less causal/logical as there is no causal 
relationship between these HR costs and the statistical measure. 

2.  The verification that quantitative data used for the statistical 
measures is correct and accurate is done by reconciling the 
statistical measures quantities with its source. Taking the 
example of the HR department cost allocated based on the 
number of employees, the proportion of costs allocated to 
regulated versus non-regulated ANS could be verified by 
requesting the ANSP what employees were considered as linked 
to regulated ANS and non-regulated ANS and reconcile these 
amounts with the organisational chart. 

iii.  If a split is made based on predetermined sharing keys, the NSA should 
challenge the ANSP on whether the sharing keys represent adequately 
the costs incurred by regulated ANS versus the rest of the activities. 
This can be done for example by identifying the big components of costs 
and determining whether they relate to regulated ANS or not. The NSA 
should encourage ANSP to opt for the most accurate and transparent 
method possible, i.e. a split based on actuals (if possible) or based on a 
statistical measure (if a relevant and available one can be identified). 

3.  Perform an in-depth verification of pension costs, leveraging any actuarial report 

available (especially in the case of Defined benefits pension schemes) – more detailed 
explanations on pension costs/post-employment benefits and related IFRS 
requirements are available in the section of IFRS considerations in the Verification 
Programme. 

a.  For each pension scheme used, the NSA should: 

i.  Verify the pension cost amounts and calculations in respect of this 

scheme. 

56 

 
1.  For the verification of defined contributions pension schemes, 
the pension cost calculation is rather straightforward and a 
simple reconciliation of costs accounted with the financial 
statements or the insurance plan is sufficient. 

2.  For the defined benefits pension schemes, IAS 19 requires the 
entity to use the projected unit credit method to calculate the 
service cost (one of the component of expenses related to a 
Defined benefits scheme).  

a.  For the ANSP reporting pension costs as per the same 

accounting methodology as in their financial statements, 
the pension costs will have been validated in the context 
of the financial audit. In that case, a simple reconciliation 
by the NSA of reported pension costs with the financial 
statements and insurance plan is sufficient. 

b.  For the ANSP reporting pension costs as per a different 

accounting methodology than in their financial statements 
(to get closer to the IFRS principles for example), these 
reported pension costs were not validated in the context 
of the financial audit. In that case, the NSA needs to 
review the actuarial reports and validate the assumptions 
reasonability. The following verification procedures 
should be envisaged in that case: 

i.  Obtain the actuarial evaluation that was done by 

the ANSP. 

ii.  Understand how the service cost is calculated. 

iii.  Understand the assumptions used by the actuaries 

and validate their reasonability. 

iv.  An independent actuarial review of the ANSP could 
be of interest if the amount is very significant or 
could represent a high risk. 

3.  State pension schemes are not a separate category of pension 
schemes as per IFRS rules. They either enter the defined 
contributions scheme, either the defined benefits scheme, or are 
a combination of both. The above described procedures are thus 
applicable to the related portions of the state pension schemes. 

ii.  Verify that the information regarding the national pension regulations, 
the pension accounting regulations on which the actuals are based and 
whether changes of those regulations happened during the year. 

iii.  Verify that the assumptions underlying the calculations of pension costs 

comprised in the actual costs are accurate (applicable pension scheme 
or on national law) and correctly taken into account in the calculations 

57 

 
 
 
B.2.1.3 Procedures for operating costs other than staff costs 

The other operating costs that can be included in the actual costs as per Implementing 
Regulation (EU) 2019/317, Articles 22 and 23 are the following: costs incurred for the 
purchase of goods and services used to provide air navigation services, including outsourced 
services, material, energy, utilities, rental of buildings, equipment and facilities, maintenance, 
insurance costs and travel expenses. In addition to this, the principles related to cost 
allocation will need to be respected.  

Therefore, to verify the eligibility of costs included in other operating costs, two checks should 
be performed: 

1.  Verify that the only elements included in the other operating cost reported in the 

reporting tables are the ones listed in the regulatory framework. This can be checked 
by following the steps indicated below: 

a.  The first verification that should be done is a reconciliation of the other 

operating costs included in the actual costs and the statutory accounts. Costs 
from the statutory accounts could be excluded from the actual costs, but not 
added. 

b.  To verify the nature of the other operating costs included in the actual costs, a 
review of the GL accounts list (breakdown) (on the lowest level of detail) should 
be performed. Any unclear GL account for which the NSA has a doubt on 
whether they enter the scope of eligible costs, supporting accounting 
documents/evidence (e.g. invoices) could be requested for a sample of GL 
entries. The content and accuracy of costs booked on the GL accounts should 
however not be verified by the NSA as this is verified by the independent 
auditor. 

c.  Leasing costs are also to be included in the other operating costs. IFRS 16 (new 
standard effective since 1 January 2019) introduces a new, broader, definition 
of leases. As per that definition, any physical asset for which an entity is paying 
a rental amount would now be considered a lease for the purpose of IFRS 16. As 
a consequence the previous operating expense related to the lease is now 
considered as a financial expense (related to the removal of one year of 
discounting until the end of the lease (i.e. a sort of the interest expense). The 
interest impact of IFRS 16 shall be included in the operating cost to remain 
compliant with the Regulation and for the calculation of the cost of capital. 
More details can be found in the section of IFRS considerations in the 
Verification Programme. 

2.  For a sample of other operating costs, check whether the costs have been correctly 

shared between ANS and non-ANS. 

a.  Other operating costs can either be fully and directly linked to regulated ANS, 

partially or not at all.  

i.  The costs that are fully and directly linked to regulated ANS should be 
fully included in the reporting tables. An example could be the licence 
fee of a CNS (Communication, navigation and surveillance services) 
system. 

58 

 
ii.  The costs not related to the regulated ANS should not enter at all the 

reporting tables. An example could be the rental of equipment’s required 
for a commercial activity. 

iii.  ANSP can also incur costs that are partially for the provision of 

regulated ANS and partially for other activities. An example could be any 
utilities (electricity, water, fuel, etc.). Only a proportionate part of these 
costs should be allocated to the regulated ANS services and reported in 
the reporting tables. More details on possible verification procedures are 
provided below. Another example are consulting costs that may relate to 
regulated ANS or not. The main contracts should be reviewed in order to 
identify the nature of service provided by the consultants and determine 
what proportion is related to regulated ANS. 

b.  The exact same elements can be used to separate other operating costs as to 
separate staff costs (i.e. actuals, statistical measures and predetermined 
sharing keys) – see further Section B.2.1.2, paragraph 2.c.  

c.  This is done by analysing the basis for the separation and possible allocation of 
other operating costs between regulated ANS and non (regulated) ANS, and 
test how this is put in practice. For the sample of other operating costs 
selected, the NSA should request the supporting evidence used as a basis for 
the apportionment and check whether the costs have been correctly shared 
between regulated ANS and non (regulated) ANS.  

d.  An ANSP can separate other operating costs between its regulated and non-
regulated activities based on different elements: actuals (i.e. excluding all 
expenditures not related to the provision of ANS and a part of the other 
operating costs shared between ANS and non-ANS services), statistical 
measures based on historical data (e.g. based on a detailed calculation done a 
couple of years ago) and/or sharing keys (e.g. 75% ANS and 25% non-ANSP). 
The factors based on which the splits are made have to be agreed in advance 
between the NSA and ANSP. 

i.  The most accurate option is to do the split based on actuals but the 

information is not always available (e.g. if the ANSP does not capture 
this information in a systematic and/or accurate way).  

ii.  The second best option is to use statistical measures linked to the cost 
consumption. An example could be the following: if an ANSP provides 
services for both regulated and non-regulated airspace, the cost of a 
certain ATM system maintenance could be split in proportion of the 
number of flights managed for the regulated area vs for the non-
regulated area. This method is slightly less accurate than the one based 
on the actuals as it relies on the assumption that all flights from both 
area require the same use of the system while it might not necessarily 
be the case. 

iii.  The third option is to use predetermined sharing keys (e.g. 75% ANS and 
25% non-ANSP). While this is the easiest to implement and verify, it is 
also likely to be the less accurate as once adopted they are rarely 
challenged nor their accuracy verified on a regular basis. 

59 

 
e.  Often, the three above factors are used by a single ANSP on different type of 
resources. For example, certain costs can be incurred only for the purpose of 
one charging zone. These costs should be allocated fully and directly to the 
related charging zone. On the contrary, indirect costs may be more difficult to 
split based on actuals. This is the reason why statistical measures are very 
often used for these indirect costs. 

i.  Depending on the factor(s) used, different verifications should be done 
(these verification procedures follow the same process and logic as for 
the staff costs). If a split is made based on actuals, it should be verified 
that: 1) only the other operating costs related fully or partially to 
regulated ANS are included in the actual costs and 2) that the amount of 
cost included in the actual costs is correct. 

1.  The first point can be verified by reviewing the main cost items 

included in the other operating costs and by identifying which 
items are included or excluded from the actual costs. In case of 
unclarity around the link to regulated ANS, contracts or purchase 
invoice should be requested.  

2.  Once the cost items (and/or share of their cost) for 

inclusions/exclusion of the actual costs are identified, the 
amount of cost should be linked on an item level and verified. 
This can be done by reconciling the other operating costs with 
related GL accounts from the financial statements for example. 

ii.  If a split is made based on statistical measures, it should be verified that 
1) there is a good level of causality between the costs allocated and the 
statistical measure used to allocate these costs, and 2) that the 
quantitative data used for the statistical measures are correct and 
accurate. 

1.  The verification of the causality between the costs allocated and 
the statistical measure used to allocate these costs is based on 
the auditor common sense and understanding of the ANSP 
activities. For example, split (between regulated ANS vs non-
regulated ANS) a radar maintenance cost based on its coverage 
proportion of the regulated vs not regulated area implies a high 
level of causality. On the contrary, allocate these costs based on 
the number of ATCO per area would be a less causal/logical as 
there is no causal relationship between the cost and coverage of 
a specific radar and the number of ATCO per area. 

2.  The verification that quantitative data used for the statistical 
measures is correct and accurate is done by reconciling the 
statistical measures quantities with its source. Taking the 
example of the radar maintenance cost allocated based on its 
coverage, the proportion of costs allocated to regulated versus 
non-regulated ANS could be verified by requesting the ANSP a 
map showing the radar coverage and the controlled areas. The 
proportion allocated to both areas could be verified on the basis 
of that documentation.  

60 

 
iii.  If a split is made based on predetermined sharing keys, the NSA should 
challenge the ANSP on whether the sharing keys represent adequately 
the costs incurred by regulated ANS versus the rest of the activities. 
This can be done for example by identifying the big components of costs 
and determining whether they relate to regulated ANS or not. The NSA 
should encourage ANSP to opt for the most accurate and transparent 
method possible, i.e. a split based on actuals (if possible) or based on a 
statistical measure (if a relevant and available one can be identified). 

B.2.1.4 Procedures for depreciation 

According to the legal framework, depreciation costs include costs related to the total fixed 
assets in operation for the purpose of providing ANS. The value of fixed assets shall be 
depreciated in accordance with their expected operating life, using the straight-line method 
applied to the costs of the assets being depreciated. Historical or current cost accounting shall 
be applied for the calculation of the depreciation. The methodology used to calculate 
depreciation costs shall not be altered during the duration of the depreciation and shall be 
consistent with the cost of capital applied, that is to say nominal cost of capital for historical 
cost accounting and real cost of capital for current cost accounting.  

Where assets are valued at current cost, the cost of capital shall not include inflation and the 
equivalent historical cost accounting figures shall also be provided to allow for comparison 
and assessment.  

More guidance on IFRS requirements is available in the section of IFRS considerations in the 
Verification Programme. In particular, IAS 16 (property plants and equipment) and IAS 38 
(intangible assets) principles related to assets recognition (also for assets under construction), 
valuation and depreciation are described. 

To verify the eligibility of costs included in depreciation, the following five checks should be 
performed: 

1.  Verify that the only depreciation cost included in the reporting tables are the ones 

allowed by the regulatory framework. 

a.  The first verification that should be done is a reconciliation of the depreciation 
cost included in the actual costs and the statutory accounts. Costs from the 
statutory accounts could be excluded from the actual costs, but not added. 

i.  This is particularly important to avoid the double charging of the same 

costs via operating costs and depreciation costs. Either a cost is incurred 
in a certain year and is included in the actual costs, either it is 
capitalised and depreciated (not before it is in operation – see below). 
Whether a cost can be capitalised or should be reported in the profit and 
loss (P&L) is defined by the accounting standards adopted by the entity 
and verified by the independent financial auditor. 

b.  Depreciation costs should only include costs related to the total fixed assets in 

operation  

i.  Assets for which costs were included in the depreciation must have been 
in operation during the year. If they were put in operation during the 
year, they should only be taken into account on a pro-rata basis. 

61 

 
 
ii.  It should be verified that no depreciation is accounted for assets under 
construction. This can be checked by reviewing the asset register or list 
of assets, verifying that no costs are capitalised for these assets. 
Another verification is to review for what assets are costs being 
capitalised and verify that no depreciation cost is included in the actual 
costs for these assets. 

2.  For a sample of depreciation costs, check whether the costs have been correctly 

shared between ANS and non-ANS.  

a.  Depreciation costs of assets can either be fully and directly linked to regulated 

ANS, partially or not at all.  

i.  The costs that are fully and directly linked to regulated ANS should be 
fully included in the reporting tables. An example could be a radar 
depreciation cost if the radar is exclusively used for the ATM of 
regulated airspace. 

ii.  The costs not at all related to the regulated ANS should not enter at all 

the reporting tables. An example could be a training centre used 
exclusively for the provision of training to other organisations than the 
ANSP ATCO. 

iii.  ANSP can also incur costs that are partially for the provision of 

regulated ANS and partially for other activities. An example could be the 
deprecation cost of a radar covering both regulated and non-regulated 
airspace. In that case, an apportionment should be made to exclude a 
part of the radar depreciation cost from the regulated actual costs, for 
example based on the volume or surface covered in both airspaces. 

b.  The exact same elements can be used to separate deprecation costs as to 
separate staff costs (i.e. actuals, statistical measures and predetermined 
sharing keys) – see further Section B.2.1.2, paragraph 2.c. 

c.  This is done by analysing the basis for the separation and possible allocation of 
depreciation costs (based on the assets use) between regulated ANS and non 
(regulated) ANS, and test how this is put in practice. For the sample of 
depreciation costs selected, the NSA should request the supporting evidence 
used as a basis for the apportionment and check whether the costs have been 
correctly shared between regulated ANS and non (regulated) ANS. 

d.  An ANSP can separate depreciation costs between its regulated and non-

regulated activities based on different elements: actuals (i.e. excluding all 
depreciation costs from assets not used for the provision of ANS and a part of 
the depreciation costs of assets shared between ANS and non-ANS services), 
statistical measures based on historical data (e.g. based on a detailed 
calculation done a couple of years ago) and/or sharing keys (e.g. 75% ANS and 
25% non-ANSP). The factor based on which the split is made has to be agreed in 
advance between the NSA and ANSP. 

i.  The most accurate option is to do the split based on actuals but the 

information is not always available (e.g. if the ANSP does not capture 
this information in a systematic and/or accurate way) or not always 

62 

 
possible (if an asset is shared between regulated ANS and other 
activities).  

ii.  The second best option is to use statistical measures linked to the cost 
consumption. An example could be the following: The depreciation cost 
of buildings could be split among the ANSP activities and/or charging 
zones based on the number of direct FTE using them.  

iii.  The third option is to use predetermined sharing keys (e.g. 75% ANS and 
25% non-ANSP). While this is the easiest to implement and verify, it is 
also likely to be the less accurate as once adopted they are rarely 
challenged nor their accuracy verified on a regular basis. 

e.  Often, the three above factors are used by a single ANSP on different type of 
assets. For example, certain assets could be used only for the purpose of one 
charging zone. These depreciation costs should be allocated fully and directly to 
the related charging zone. On the contrary, the depreciation costs of shared 
assets may be more difficult to split based on actuals. This is the reason why 
statistical measures are very often used for these indirect costs. 

f.  Depending on the factor(s) used, different verifications should be done (these 

verification procedures follow the same process and logic as for the staff costs). 

i.  If a split is made based on actuals, it should be verified that: 1) only the 

depreciation costs related fully or partially to regulated ANS are 
included in the actual costs, and 2) that the amount of cost included in 
the actual costs is correct. 

1.  The first point can be verified by reviewing the asset register/list 
of the ANSP and challenging the ANSP on certain assets for 
which the use or the link with ANS in not clear (if any). 

2.  Once the assets (and/or share of their depreciation cost) for 
inclusions/exclusion of the actual costs are identified, the 
amount of cost should be linked on an item level and verified. 
This can be done by reconciling the depreciation costs with the 
asset register for example. 

ii.  If a split is made based on statistical measures, it should be verified that 
1) there is a good level of causality between the costs allocated and the 
statistical measure used to allocate these costs, and 2) that the 
quantitative data used for the statistical measures are correct and 
accurate. 

1.  The verification of the causality between the costs allocated and 
the statistical measure used to allocate these costs is based on 
the auditor common sense and understanding of the ANSP 
activities. For example, split (between regulated ANS vs non-
regulated ANS) of a radar depreciation cost based on its 
coverage proportion of the regulated vs not regulated area 
implies a high level of causality. On the contrary, allocate these 
costs based on the number of ATCO per area would be a less 
causal/logical as there is no causal relationship between the cost 

63 

 
and coverage of a specific radar and the number of ATCO per 
area. 

2.  The verification that quantitative data used for the statistical 
measures is correct and accurate is done by reconciling the 
statistical measures quantities with its source. Taking the 
example of the radar maintenance cost allocated based on its 
coverage, the proportion of costs allocated to regulated versus 
non-regulated ANS could be verified by requesting the ANSP a 
map showing the radar coverage and the controlled areas. The 
proportion allocated to both areas could be verified on the basis 
of that documentation.  

iii.  If a split is made based on predetermined sharing keys, the NSA should 
challenge the ANSP on whether the sharing keys represent adequately 
the costs incurred by regulated ANS versus the rest of the activities. 
This can be done for example by identifying the ANSP largest assets and 
determining whether they relate to regulated ANS or not. The NSA 
should encourage ANSP to opt for the most accurate and transparent 
method possible, i.e. a split based on actuals (if possible) or based on a 
statistical measure (if a relevant and available one can be identified). 

3.  Verify that the value of fixed assets was depreciated in accordance with their expected 

operating life, using the straight-line method. 

a.  No definition is provided in the Regulation for the terms of “expected operating 
life”. As per IAS 16, properties, plants and equipment are to be depreciated 
over their useful life. However, if it can be considered that an asset operating 
life is equal to its useful life and that the ANSP applies a straight-line 
depreciation method (one of the three method accepted under IFRS), the NSA 
should be able to reconcile the depreciation costs entered in the Reporting 
Table 1 with the asset register/list of assets.  

b.  Straight-line depreciation is the most common and simple method of 

depreciation where the value of a fixed asset is reduced gradually and evenly 
over its useful life, meaning that each full calendar year will be allocated the 
same amount (in absolute value and in percentage) of the asset’s cost.  

c.  It should be verified that any exceptional depreciation resulting from asset 

impairments and write offs should not be included in the depreciation costs. 

4.  Verify that the depreciation methodology used was consistent with the one applied to 

the cost of capital calculation.  

a.  Guidance on key concepts: 

i.  Historical cost accounting: Historical cost implies that an asset is 

recorded at its original cost when acquired by the ANSP. 

ii.  Current cost accounting: Current cost accounting for asset valuation 

and depreciation is not defined in the Regulation (while it is defined for 
the cost of capital (i.e. “Where current cost accounting is applied, the 
cost of capital shall not include inflation”) nor in the international 
accounting or reporting standards. It is however foreseen in IAS 16 that 

64 

 
properties, plants and equipment can be valued at “fair value” following 
the revaluation model. Nothing specifies however that current cost is an 
equivalent to fair value.  

1.  It is required by the Regulation that where current cost 

accounting is applied, the equivalent historic cost accounting 
figures shall also be provided to allow for comparison and 
assessment.  

b.  Meaning of the consistency in the depreciation and cost of capital methods: 

i.  Either use historic cost accounting for the calculation of the depreciation 

and the nominal cost of capital (including inflation), or 

ii.  Either use current cost accounting for the calculation of the depreciation 

and real cost of capital (excluding inflation). 

5.  Verify that the methodology used to calculate depreciation costs was not altered 

during the duration of the depreciation. 

This can be verified by reviewing the detail of the calculations made for the 
depreciation costs. As the straight line depreciation method should be applied, the 
annual depreciation costs should remain constant for all full calendar years during 
which the asset is being depreciated if the expected operating life is not modified and 
the asset not revalued. Assets put into operation during that year shall only be taken 
into account on a pro-rata basis. 

B.2.1.5 Procedures for cost of capital 

According to the legal framework, the cost of capital shall be equal to the product of the 
following elements: 

–  The sum of the average net book value of fixed assets in operation or under 

construction and possible adjustments to total assets determined by the national 
supervisory authority and used by the air navigation service provider and of the 
average value of the net current assets, excluding interest-bearing accounts, that are 
required for the purposes of providing air navigation services. 

–  The weighted average of the interest rate on debts and of the return on equity. For air 
navigation service providers without any equity capital, the weighted average shall be 
calculated on the basis of a return applied to the difference between the total of the 
assets referred to above and the debts. 

For the purpose of establishing the cost of capital, the factors to which weight is to be given 
shall be based on the proportion of financing through either debt or equity. The interest rate 
on debts shall be equal to the weighted average interest rate on debts of the air navigation 
service provider. The return on equity shall be that provided in the Performance Plan for the 
reference period and shall be based on the financial risk incurred by the air navigation service 
provider. 

Where air navigation service providers incur costs from leasing fixed assets, those costs shall 
not be included in the calculation of cost of capital. 

65 

 
 
Additional guidance was developed for the ANSP on the determined cost of capital 
development17. The NSA may consult this material for a better understanding of the technical 
details. 

More guidance on IFRS requirements is available in the section of IFRS considerations in the 
Verification Programme. In particular, IAS 16 (property plants and equipment) and IAS 38 
(intangible assets) principles related to assets recognition (also for assets under construction) 
and valuation are described. 

To verify the eligibility of the cost of capital included in the actual costs, the following four 
checks should be performed: 

1.  Verify the eligibility and accuracy of all components of the cost of capital calculation by 
reconciling them with the ANSP regulatory balance sheet and with the profit and loss: 

a.  The asset base is made of the three following components: 

i.  The net book value of fixed assets (in operation or under construction) 

1.  The average net book value for the fixed assets in operation 
should be reconciled with NBV used for the calculation of the 
depreciation under 1.3 Depreciation. 

As this is an average, it cannot be reconciled with the balance 
sheet that shows the end-year value. 

2.  The NBV of fixed assets under construction should be reconciled 

with the statutory accounts and/or the asset register. 

3.  These fixed assets should be used by the air navigation service 
provider for the purposes of providing air navigation services. 

This should have already been mostly verified when checking the 
assets for the procedures related to the depreciation, additional 
checks should be performed in case of material assets being in 
construction (not depreciated yet, meaning that they were not 
included in the scope of the procedures related to depreciation). 

4.  The costs related to the leasing of fixed assets should not be 

included in the cost of capital calculation (but rather in the other 
operating costs). 

ii.  The asset base should also include the average value of the net current 

assets. 

1.  Net current assets are defined as the current assets less the 

current liabilities, where: 

a.  ‘Current assets’ means cash or a cash equivalent (i.e. that 
can be converted into cash within one year – typically 
inventory and short term receivables). 

b.  Current liability means a payable within one year. 

17 Supporting material for the development of RP3 Performance Plans, developed by EY and Helios upon request of 
the European Commission Directorate-General for Mobility and Transport (DG MOVE), May 2019. 

66 

 
 
2.  The NSA should verify that the average value of the net current 
assets value is used, calculated as Average NBV = (total NBV 
fixed Assets at the start of the calendar year + total NBV fixed 
assets at the end of the calendar year)/2. ANSPs may also 
consider it appropriate to use a mid-year figure or the monthly 
average throughout the year. 

3.  Net current assets should not include interest-bearing accounts. 
When reconciling the assets with the financial statement, the 
NSA should verify that no interest bearing account (i.e. bank 
account) is included in the fixed asset NBV. 

b.  The equity capital: 

For air navigation service providers that do not have equity capital (more likely 
for ANSPs that are part of the State administration), the difference between the 
total of the assets and the debts should be taken as the value of the equity 
capital in the calculation of the cost of capital. 

c.  Debt: 

The debt amount should be made of the loans financing the provision of air 
navigation services. For the ANSP financed exclusively through equity (so not 
having any debt), procedures related to the verification of debt and interest can 
be disregarded. 

d.  The interest rate on debts: 

The interest rate shall be equal to the weighted average interest rate on debts 
of the air navigation service provider – see further the fourth procedure for 
more details 

e.  The return on equity: 

The return on equity shall be the one provided in the Performance Plan for the 
reference period and shall be based on the financial risk incurred by the air 
navigation service provider 

2.  Verify the cost of capital calculation, i.e. the following elements: 

a.  The proportion of financing through equity (and debt): 

The NSA should redo the calculations to verify that these proportions are equal 
to the ratios between the ANSP equity (or debt) and total liabilities 

b.  The weighted average of the interest rate on debts and of the return on equity: 

i.  The NSA should redo the calculation of the weighted average of the 
interest rate on debts and of the return on equity to verify that it is 
equal to the sum of: 

1.  The proportion of financing through equity multiplied by the 

return on equity, and 

2.  The proportion of financing through debt multiplied by the 

interest rate on debts. 

67 

 
ii.  For air navigation service providers without any equity capital, the 

weighted average shall be calculated on the basis of a return applied to 
the difference between the total of the assets and the debts. 

c.  Cost of capital: 

The NSA should redo the calculation of the cost of capital to verify that it is 
equal to the product of the average net book value of fixed assets and of the 
weighted average of the interest rate on debts and of the return on equity. 

3.  Verify that methodology applied to the cost of capital is consistent with the one used to 
calculate depreciation costs (i.e. nominal cost of capital for historic cost accounting 
and real cost of capital for current cost accounting). 

4.  Perform an in-depth verification of interest rate and costs. 

The NSA should review the actual interest rate and costs reported and reconcile them 
with supporting evidence (loan contracts with the bank, banks statements of the 
proceeded payments, etc). 

B.2.1.6 Procedures for exceptional costs 

According to the legal framework, exceptional costs shall consist of non-recurring costs 
relating to the provision of air navigation services, including any non-recoverable taxes and 
customs duties. 

To verify the eligibility of the exceptional costs, two checks should be performed: 

1.  Verify that the only costs included in the reporting tables are the ones allowed by the 

regulatory framework. 

a.  The first verification that should be done is a reconciliation of the exceptional 
costs included in the actual costs and the statutory accounts. Expenses from 
the statutory accounts that were not made to provide air navigation services 
must be excluded from the actual costs. 

b.  The exceptional costs should include non-recurring costs. 

i.  To verify the (non-) recurring aspect of the exceptional costs, an 

explanation on the reason, content and nature of the costs should be 
asked to the ANSP. The review of these elements should enable the NSA 
to assess whether these costs are indeed non-recurring.  

ii.  Supporting accounting documents/evidence (e.g. invoices) could be 

requested for a sample of these costs to verify the alignment between 
the explanations received in point a) above and the content of the ANSP 
accounting. The content and accuracy of costs booked on the GL 
accounts should however not be verified by the NSA as this is verified by 
the independent auditor. 

c.  Regulation (EU) 2019/317, Articles 22.4 and 23 specify that the exceptional 

costs may include any non-recoverable taxes and customs duties. 

d.  As per Regulation (EC) No 550/2004 and Regulation (EC) No 1070/2009, 

Article 15.2 (b), these costs shall not include the costs of penalties imposed by 

68 

 
 
Member States according to Article 9 of the framework Regulation nor the 
costs of any corrective measures imposed by Member States according to 
Article 11 of the framework Regulation. 

i.  The NSA needs to be validate that the exceptional costs do not include 

such cost of penalties or corrective measures. This is done by 
understating the reason, content and nature of the exceptional costs. 

ii.  Supporting accounting documents/evidence (e.g. invoices) could be 

requested for a sample of these costs to verify the alignment between 
the explanations received in point a) above and the content of the ANSP 
accounting. The content and accuracy of costs booked on the GL 
accounts should however not be verified by the NSA as this is verified by 
the independent auditor. 

2.  Verify that the exceptional costs are related to the provision of air navigation services. 

a.  The NSA needs to be validate that the exceptional costs are related to the 

provision of regulated ANS and not to any other non-regulated activity of the 
ANSP. This is done by understating the reason, content and nature of the costs 
included in the exceptional costs. 

b.  Supporting accounting documents/evidence (e.g. invoices) could be requested 
for a sample of these costs to verify the alignment between the explanations 
received in point a) above and the content of the ANSP accounting. The content 
and accuracy of costs booked on the GL accounts should however not be 
verified by the NSA as this is verified by the independent auditor. 

c.  For example, would the ANSP incurred exceptional contributions to top up a 
pension fund, the NSA should verify that are included in the actual costs only 
the exceptional contributions for employees related to the provision of ANS.  

B.2.2 Verification of the bookings of costs on cost centres 

B.2.2.1 Procedures for cost centres 

As prerequisite for the process of verifying the cost allocations, the NSA is recommended to 
check the methodology of the ANSP for the recording of costs on cost centres. The use of cost 
centres by the ANSP is recommended as cost centres create more transparency in the costs. 
It is considered as a best practice in management accounting. 

To verify the booking of costs on cost centres, the NSA should perform the following 
procedures: 

1.  Review and validate the structure of cost centres. 

a.  The Regulation requires transparency in the reporting, which is highly 

supported by a well-structured set of cost centres. 

b.  It is good practice for cost centres to reflect the organisational structure and to 
be in line with the concept of ownership/responsibilities. Cost centres should 
support the allocation of costs to services or service centres, in particular to 
terminal and en route and different charging zones, to services for visual flight 
rules (VFR) flights and to commercial services. It is also good practice to create 

69 

 
 
cost centres for specific items on which a close financial follow-up is desired or 
required. Relevant examples are for the ATCO training costs or for the 
operating expense (OPEX) related to new and existing investments (potentially 
by individual project).  

c.  In practice, they could be made of the organisation departments (Operations, 

Engineering, Meteorology, HR, Finance, IT, etc.), services (air traffic 
management, communication, navigation, surveillance, etc.), traffic control 
zones (terminal, approach, en route) or geographical areas (Airport 1, Airport 
2, etc.) or any combination of these dimensions. 

d.  The number of cost centres can vary from an ANSP to another. Organisations 

need to find the right balance between less cost centres (more straightforward, 
easier to maintain but less detailed accounting) and more cost centres (more 
cumbersome but providing more detailed information).  

2.  Review and validate the procedure(s) for the booking of costs on cost centres. 

a.  Require the formal procedure(s) for the bookings of costs on cost centres. In 

case no formal procedure exists, ask what the logic is for booking the staff costs 
on cost centres, ask what the procurement procedure is with regards to cost 
centres (e.g. how is an invoiced booked on a certain cost centre). 

b.  Best practices recommend booking the costs of resources on the cost centres 
that “use” or “consume” these resources instead of on the cost centres that 
“purchase” these resources. 

3.  Test the correct implementation of the procedure for the booking of costs on cost 

centres. 

a.  Request an extract from the ANSP accounting software (before allocations) 

with the list of all GL accounts and cost centre combinations and the amount of 
cost booked on each of them. 

b.  Select a sample of GL accounts and cost centre combinations and ask for the 

list of related journal entries.  

i.  Based on materiality: Ordering the list of GL accounts and cost centre 

combinations by decreasing amount of costs enable to identify easily the 
ones with the largest costs and select them in priority. 

ii.  Based on content: It is good practice to also try to test different costs. 
This can be done by including in the sample costs from different cost 
centres and GL accounts. 

c.  Once the list of journal entries received for the selected sample of GL accounts 
and cost centre combinations, the NSA can select a sample of journal entries 
and ask the related invoices, contracts or other supporting evidence. 

i.  Based on materiality: Ordering the list of journal entries by decreasing 

amount of costs enable to identify easily the ones with the largest costs 
and select them in priority. 

ii.  Based on content: It is good practice to also try to test different costs. 
This can be done by looking at the names/codes of the journal entries 

70 

 
and selecting different ones. Unusual or unclear items should also be 
prioritised for inclusion in the sample. 

d.  When receiving from the ANSP the lists of 1) GL account and cost centre 

combinations and 2) of journal entries in the extracts from the system, it is 
advised to the NSA to perform a reconciliation between the total list of item 
cost and the total from the accounting. It enables the NSA to verify that the 
entire population of verified items was provided and that no accounting entries 
were removed or added to the list. 

B.2.3 Verification of allocations 

B.2.3.1 Procedures for allocations 

Pursuant to Article 15(2)(e) of Regulation 550/2004 (the service provision Regulation), cross-
subsidy is not allowed between en route and terminal charges and costs that pertain to both 
terminal services and en route services shall be allocated in a proportional way between en 
route services and terminal services on the basis of a transparent methodology. 

According to Regulation (EU) 2019/317, Article 22(5) the determined costs shall be allocated 
in a transparent way to the charging zones in respect of which they are incurred. Determined 
costs that are incurred in respect of several charging zones shall be allocated in a proportional 
way, on the basis of a transparent methodology. 

The key risks related to allocations are incorrect apportionments between en route and 
terminal, or the mis-allocation of costs relating to activities outside the scope of the 
regulatory framework. 

The NSA is responsible to check that the ANSP complies with these regulatory requirements.  

The NSA is also responsible for checking the allocation of costs to different charging zones of 
the same type and to the different services provided in a charging zone. It can be done by 
performing the below procedures. They are applicable to these three types of allocations.  

1.  Obtain the description for the allocation process the ANSP has in place and validate the 

overall allocation model logic. It should be validated against the following best 
practices and guidance: 

a.  Causality: Causality is the most important principle related to cost allocations. 
All cost allocation model should be based on the concept of causality. It is the 
logical relation between and cost source (input) and cost destination (output). It 
means that the cost allocated from a certain source are allocated to (all but 
only) destinations that “consume” that source for the output to be achieved 
based on a driver ( or allocation key) that reflect best the proportion of source 
cost consumed by each of the destinations. 

b.  Activity based costing: The costs allocation methodology most widely 

recognised as best practise is activity based costing. This methodology relies on 
the identification of one or more intermediary allocation layers in between the 
first ones (resources, made of GL accounts and cost centres (if used)) and the 
cost objects (final items towards which all costs are allocated – the charging 
zones in this context). These intermediary allocation layers are most often 
activities (typically the air navigation services in this context). The costs are 

71 

 
 
allocated from the resources to the activities and from the activities to the cost 
objects according to the actual consumption by each cost destination (i.e. based 
on causality). Many ANSP have additional allocation layers for the allocation of 
activities/lines of service to ATS or for the allocation of shared activities such 
as overheads, shared staff, equipment and facilities. It has to be noted that the 
more intermediary allocation layers there are in a model, the less transparent is 
the model, as it becomes increasingly difficult to track the costs from the 
resources to the cost objects. As a rule of thumb, up to 5 allocation layers can 
be considered as good practice. 

c.  In practice, the organisations have to define the right balance between 
reliability (the executives must trust the data they receive), timeliness 
(information must be available when needed for decision making) and relevance 
(cost information must be at the right level of information). 

d.  Article 22.5 of Implementing Regulation (EU) 2019/317, specifies that the 

determined costs included in the cost bases for terminal charging zones shall 
cover the cost of the following services: 

i.  Aerodrome control services or aerodrome flight information services 

which include air traffic advisory services and alerting services; 

ii.  Air traffic services related to the approach and departure of aircraft 

within a certain distance of an airport which shall be defined on the basis 
of operational requirements; 

iii.  The proportional part of the air navigation services common to en route 

and terminal services. 

e.  A European Commission study18 describes three distinct cost allocation 
methods observed at ANSP. It is strongly recommended to each NSA to 
understand what method is applied by the ANSP(s) they are responsible or how 
it deviates from them. This would give them the required overall understanding 
of the cost allocation methodology used by their ANSP(s). 

f.  The CRCO principles19: They refer to the case where costs ‘cannot be allocated 

on a statistical basis’ between terminal and en route. In this case, the 
recommended apportionments are as follows: 

i.  25% of the costs can be allocated to en route services if the facilities are 

utilised mainly for terminal navigation; 

ii.  50% of the costs can be allocated to en route services if the facilities are 

utilised to the same extent for terminal and en route navigation; 

iii.  75% of the costs can be allocated to en route if the facilities are utilised 

mainly for en route navigation. 

As highlighted in the study in point d) above, the application of these allocation 
keys by ANSPs that also use activity based costing or other complex allocation 

18 European Commission, “Support study to the evaluation of cost allocation to marketable terminal air navigation 
services Final Report”, 2019. 

19 European Organisation for the Safety of Air Navigation, Central Route Charges Office, Eurocontrol, “Principles 
for establishing the cost base for en route charges and the calculation of the unit rates”, 2018. 

72 

 
 
methods suggests a possibility that they may either be over-used or favour 
strategies to reduce terminal charges. The causality principle should be 
favoured above the CRCO principles. 

2.  For complex allocation models made of multiple intermediary allocation layers, the 

verification of the above principles is not straightforward and requires additional work. 
For each allocation step, reconcile the total costs from the sources and destinations 
(e.g. the costs allocated from the resources with the costs received by the activities 
and the costs allocated from the activities with the costs received by the cost objects in 
the example of simple resources – activities – cost objects allocation model). 

3.  For a sample of allocation steps, the NSA should select a sample of allocations and 

perform the procedures listed below. The ICAO20 provides detailed good practices in 
terms of allocations and allocation keys (referred as parameters in the ICAO manual), 
in its Chapter 5, Section D Allocation of costs. 

a.  Reconcile the costs from the allocation sources and destinations. 

b.  Review and validate the causality (i.e. logical relationship) between the 

allocation sources and destinations 

c.  Review and validate the causality of the driver, allocation key or criteria used 

for the allocation from the sources to the destinations. 

d.  Reconcile the driver, allocation key or criteria quantities used for allocations 

with source information. 

e.  The above mentioned sampling should be done based on: 

i.  Materiality: Ordering the list of allocations by decreasing amount of 

costs enable to identify easily the ones with the largest costs and select 
them in priority. 

ii.  Content: It is good practice to also try to test different allocations. This 
can be done by selecting allocations from different allocation layers. 
Indirect costs should also be prioritised for inclusion in the sample. 
Indeed, most issues and inaccuracies are usually found in indirect costs 
such as of overhead, support functions, etc. It is good practice to make 
sure to perform a specific review of the allocation methodology used for 
such costs.  

The above mentioned EC study lists a number of issues with the current ANSP cost 
allocation methods, which can be summarised as follow: 

a.  There is a lack of clarity on the composition of approach costs in the costs of 
terminal air navigation services, meaning also in their allocation between 
terminal and en route charging zone; 

b.  The descriptions on sharing keys and how they are applied are mostly high level 

and rarely give precise details; 

c.  Some ANSPs allocate costs based on revenues, which is bad practice as may 
lead to circular approach (i.e. the more costs, the higher the unit rate. The 

20 International Civil Aviation Organization, “Manual on Air Navigation Services Economics”, 2013. 

73 

 
 
higher the unit rate, the higher the revenue. The higher the revenue, the higher 
the costs being allocated); 

d.  There is a overuse of the non-statistical basis of allocation between terminal 

and en route defined in the CRCO Principles (cf. 25%, 50% and 75% sharing keys 
described above); 

e.  The consultation of airspace user process does not appear as an efficient 

safeguard for cost allocations in a proportional way. 

Once an in-depth review of the allocation model has been performed once, following 
verifications could be lighter, focusing only on the changes compared to previous version (if 
any). For example: 

1.  Verify and validate that the overall allocation model remained the same as the previous 

year, including the following aspects:  

a.  The allocation layers; 

b.  The allocation drivers or keys (not the quantities). 

2.  If the allocation model remained similar compared to the previous year (and is 

considered transparent and allocating the actual costs related to in a fair proportion to 
the air navigation services and the charging zones), no additional procedure is required 
on allocations. 

3.  In complex allocation models, it is likely to see small adjustments made by the ANSP on 
a yearly basis to some components of the model. Resources (combinations of cost 
centres and GL accounts) activities and (to a lesser extent) cost objects may be 
created, deleted or modified to ensure alignment of the cost allocation model with the 
ANSP structure and activities. 

4.  If the allocation model changed compared to the previous year, a verification of these 
changes is required. This is done by building an exhaustive list of all changes and their 
impact (in terms of costs) across all allocation steps. The same procedures described in 
Section 3.b and 3.c can be then be applied on this list of all changes made in the 
costing model. When reviewing these changes, it is necessary to check whether they 
are improving causality (i.e. checking whether the changes are better reflecting cost 
consumption) or justified by a valid business or organisational reason (following a 
change in the departments structure/organisation for example). 

5.  Changes to a costing model can be of different types:  

a.  Change in the organisational structure (cost centre structure, possibly in 

combination with GL accounts); 

b.  Change in intermediary layers (e.g. activities) or final cost destinations; 

c.  New or deleted cost allocation from a certain source to one or multiple cost 

destinations; 

d.  Change in a cost allocation driver/allocation key. 

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B.2.4 Verification of specific lines, revenues and adjustments 

Member States shall calculate the en route and terminal unit rates before the start of each 
year of the reference period. Those rates shall be calculated by dividing the forecast number 
of total en route or terminal service units for the relevant year, calculated in accordance with 
points 1 and 2 of Annex VIII respectively, into the algebraic sum of the following elements: 

–  Determined costs in nominal terms - VFR excluded (Art. 25(2)(a)) 

– 

Inflation adjustment : amount carried over to year n (Art. 25(2)(b)) 

–  Traffic risk sharing adjustment : amounts carried over to year n (Art. 25(2)(c)) 

–  Cost items referred to in Article 28(3) : amounts carried over to year n (Art. 25(2)(d)) 

–  Financial incentives : amounts carried over to year n (Art. 25(2)(e)) 

–  Modulation of charges : amounts carried over to year n (Art. 25(2)(f)) 

–  Traffic adjustments : amounts carried over to year n (Art. 25(2)(g) and (h)) 

–  Other revenues (Art. 25(2)(i)) 

–  Cross-financing between charging zones (Art. 25(2)(j)) 

–  Difference in revenue from temporary application of unit rate (Art. 25(2)(k)) 

In line with the scope of this guidance material, verifications procedures are detailed below for 
some of the above listed adjustments. 

B.2.4.1 Inflation 

According to Implementing Regulation (EU) 2019/317, Article 26, for each year of the 
reference period, the determined costs included in the cost bases for en route and terminal 
charges of year n expressed in nominal terms shall be adjusted on the basis of the difference 
in percentage between the actual inflation index and the forecast inflation index for that year 
n and included as an adjustment for the calculation of the unit rate for year n+2. The 
determined costs referred to in the third subparagraph of Article 22(1), and the determined 
costs referred to in points (c) and (d) of Article 22(4) where historical cost accounting is 
applied, shall not be subject to any inflation adjustment. 

Concretely, it means that the inflation adjustment amount carried over to year n in Reporting 
Table 2B is coming from differences between the actual inflation index and the forecast 
inflation index of two years earlier. The values of these adjustments are tracked year on year 
in Reporting Table 3 in the case of both RP2 and RP3.  

1.  The inflation adjustments applied to the two first years of the RP (2020 and 2021 in 
case of RP3) are carried over from the two last years of the previous RP (2018 and 
2019 from RP2 in case of RP3). 

a.  The adjustments carried over from the two last years of the previous RP (2018 
and 2019 from RP2 in case of RP3) are calculated in RP2 Reporting Table 2. 
The calculations of the adjustments are based on: 

i.  Determined costs in nominal terms - VFR excluded (small difference 
compared to RP3, as during RP3 the determined costs for which 
historical cost accounting is applied shall not be subject to any inflation 

75 

 
 
adjustment - i.e. cost of capital and depreciation need also to deducted 
from the cost base in case the historical cost accounting method is 
applied. These amounts are automatically taken from RP2 Reporting 
Table 1.  

ii.  Actual inflation index: 

Calculated based on the inflation percentages – As per Regulation (EU) 
2019/317, ‘actual inflation index’ means the annual actual inflation 
index based on the third year before the start of a reference period and 
computed by using the actual inflation rate published by the Commission 
in the Eurostat Harmonised Index of Consumer Price for the State 
concerned in April of year n+1. In case the percentage change published 
by the Commission for a given year is negative, a zero value shall be 
used. 

iii.  Forecast inflation index: 

Calculated based on the inflation percentages – Regulation (EU) 
2019/317 provides the definition of the forecast inflation index. – see 
further Section A.2.4.1. 

2.  The inflation adjustments applied to the three last years of the current RP (2022, 2023 
and 2024 in case of RP3) and to the first two years of the next RP (2025 and 2026 
from RP4 in case of RP3) are carried over from the five years of the current RP (2020 - 
2024 in case of RP3). 

a.  The adjustments carried over from the three first years of the current RP 

(2020, 2021 and 2022 in case of RP3) are calculated in Reporting Table 2A. 
The calculations of the adjustments are based on: 

i.  Determined costs subject to inflation adjustment (small difference 

compared to RP2, as during RP2 the determined costs of depreciation 
and cost of capital were subject to inflation adjustment even where 
historical cost accounting was applied). 

1.  These 3 amounts are automatically taken from Reporting Table 
1: Total determined costs (after deduction of costs for services 
to exempted flights (in nominal terms)), depreciation, and cost of 
capital. 

2.  If historical cost accounting is not applied, the formula should be 
modified, not to deduct depreciation and cost of capital from the 
total costs after deduction of costs for services to exempted 
flights.  

ii.  Actual inflation index. 

iii.  Forecast inflation index. 

To verify the inflation adjustments, NSA should apply the following procedures: 

1.  Reconcile the amounts of the adjustments carried over with the data from the year 
that the adjustments originate (from previous and current RP). As the inflation 
adjustments presented under Reporting Table 2B are automatically populated via 
formulas from Reporting Table 2, the NSA should do the following: 

76 

 
a.  Reconcile the values of the two first years of the current RP (2020 and 2021 in 

case of RP3) from Reporting Table 2B with the values of RP2 Reporting Table; 

b.  Reconcile the values of the three last years of the current RP (2022, 2023 and 
2024 in case of RP3) from Reporting Table 2B with the values of Table 2; 

c.  In case the values do not reconcile, NSA should verify whether any of the cells 
formulas is incorrect or was modified (for example referring to the correct cell 
but of the wrong sheet (referring then to the inflation adjustment of another of 
the Member State entities (ANSP(s), NSA, MET). 

2.  Verify that the ANSP used the correct actual inflation percentage (in case that the 
inflation percentages were filled in by the ANSP), i.e. the one published by the 
Commission in the Eurostat Harmonised Index of Consumer Price for the State 
concerned as foreseen by the legal framework. In case the percentage change 
published by the Commission for a given year is negative, a zero value shall be used21. 
The costs referred to in the third subparagraph of Article 22(1), and the costs referred 
to in points (c) and (d) of Article 22(4) where historical cost accounting is applied, shall 
not be subject to any inflation adjustment. 

B.2.4.2 Procedures for cost items referred to in Article 28(3) 

According to Implementing Regulation (EU) 2019/317, Article 28(2), the general principle is 
that where, over the whole reference period, actual costs fall below (or exceed) the 
determined costs, the air navigation service provider or the Member State concerned shall 
retain (or cover) in full the resulting difference. This, however, does not apply if the 
differences between determined costs and actual costs result from at least one of the 
following changes: 

–  Unforeseen changes in costs of new and existing investments; 

–  Unforeseen changes in costs referred to in the third subparagraph of Article 22(1), i.e. 

costs of competent authorities, qualified entities and Eurocontrol; 

–  Unforeseen and significant changes in pension costs established in accordance with 

Article 22(4) resulting from unforeseeable changes in national pensions law, pensions 
accounting law or unforeseeable changes in financial market conditions, on the 
condition that such changes in pension costs are outside the control of the air 
navigation service provider and, in the case of cost increases, that the air navigation 
service provider has taken reasonable measures to manage cost increases during the 
reference period; 

–  Unforeseen and significant changes in costs resulting from unforeseeable changes in 
interest rates on loans that finance costs arising from the provision of air navigation 
services, on the condition that such changes in costs are outside the control of the air 
navigation service provider and, in the case of cost increases, that the air navigation 
service provider has taken reasonable measures to manage cost increases during the 
reference period; 

21 This information can be found at the following link: https://ec.europa.eu/eurostat/web/hicp/data/database, 
clicking on the “HICP (2015 = 100) - annual data (average index and rate of change) (prc_hicp_aind)” measure and 
changing the unit of measure to the Annual Average rate of change. 

77 

 
 
 
–  Unforeseen and significant changes in costs resulting from unforeseeable changes in 

national taxation law or other unforeseeable new cost items not covered in the 
Performance Plan but required by law. 

While the verification of the adjustments for each category of cost included in Article 28 
coming from this RP are presented more in detail below, the ones coming from the previous 
RP require a slightly different method (i.e. when the adjustment applicable to a year of RP3 
comes from a difference between the determined and actual costs in a year of RP2), even if 
the general principle remains the same. These adjustments coming from the previous RP are 
impacting RP3 unit rates via the item “13.4 Differences in costs as per Art. 28(4) to (6)” in 
RP3 Reporting Table 2B. While in RP3 each adjustment is presented distinctly, they were 
grouped and are reported through the item “Cost exempt from cost sharing” in RP2 Reporting 
Tables 1 and 3.  

The NSA should apply the following verification procedure: Reconcile the amounts of the 
adjustments carried over from RP2 as cost exempts with the data from the year that the 
adjustments originate (from previous RP). 

These adjustments coming from the previous RP are presented (also including a breakdown by 
nature and by factor/item) in RP2 Reporting Table 3A item “Costs exempted from cost 
sharing”. 

Finally, and according to the Article 28(7) of Regulation (EU) 2019/317, national supervisory 
authorities shall verify annually whether air navigation service providers apply correctly the 
provisions of Article 28. National supervisory authorities shall draw up a report by 1 
September of year n+1 on the changes in costs referred to in paragraph 3 which occurred in 
year n. The report shall be subject to consultation of airspace users' representatives. National 
supervisory authorities shall also include in the report which is due by 1 September of the year 
following the final year of the reference period the balance over the whole reference period in 
respect of the unforeseen changes in the costs referred to in points (a), (c), (d) and (e) of 
Article 28 paragraph 3. 

B.2.4.2.1 Procedures for cost items referred to in Article 28(3) – Costs of 

new and existing investments and unforeseen changes 

According to Article 28 (3) and (4) of Implementing Regulation (EU) 2019/317, the general 
principle (Article 28 (2)) does not apply in case of unforeseen changes in costs of new and 
existing investments. These requirements are new in RP3 compared to RP2. 

–  Where, over a calendar year or over the whole reference period, actual costs fall below 

the determined costs, the air navigation service provider or the Member State 
concerned shall reimburse the resulting difference to airspace users, through a 
reduction of the unit rate in year n+2 or in the following reference period, unless, 
based on a detailed justification of the air navigation service provider, the national 
supervisory authority decides, after consultation with airspace users’ representatives, 
that the air navigation service provider shall not reimburse a part of the resulting 
difference. 

–  Where, over a calendar year or over the whole reference period, actual costs exceed 
the determined costs by not more than 5%, Member States may decide that the 
resulting difference is recovered from airspace users by the air navigation service 
provider or the Member State concerned, through an increase of the unit rate in year 

78 

 
 
n+2 or in the following reference period, subject to the approval by the national 
supervisory authority of a detailed justification provided by the air navigation service 
provider in particular as regards the need to increase capacity and after consultation 
with airspace users’ representatives. 

–  Where, during the reference period, air navigation service providers intend to add, 

cancel or replace major investments with respect to information on major investments 
identified in the Performance Plan in accordance with point 2.2(b) of Annex II, these 
changes shall be approved by the national supervisory authority, after consultation of 
airspace users’ representatives. 

To verify the unforeseen changes in costs of new and existing investments, NSA should apply 
the following procedures: 

1.  Reconcile the amounts of the adjustments carried over with the data from the year 

that the adjustments originate (from current RP).  

a.  For the current RP, it consists in verifying the integrity of the formulas linked to 
the new and existing investments used for the amounts of Reporting Table 2B 
item 13.4 Differences in costs as per Art. 28(4) to (6): amounts carried over to 
year n (Art. 25(2)(d)) and reconciling all components with the data from the 
year that the adjustments originate (from current RP) in Reporting Table 2A 
items 3.1 New and existing investments (Art. 28(4)) as well as with the values 
of the difference in investment costs in Reporting Table 3. 

b.  In the previous RP, difference in investment costs could not be carried over to 
adjust the unit rate. As a consequence, no costs from previous RP should be 
reported to the two first year of the current RP. 

2.  Verify the eligibility of actual costs included and adjustments. 

a.  The changes in costs of new and existing investments were unforeseen.  

b.  Verify and reconcile the values provided for the actual new and existing 

investments costs, made of the three following components: 3.10 Depreciation, 
3.11 Cost of capital and 3.12 Cost of leasing. 

i.  This is done by reconciling the costs of new and existing investments, by 

investment, with their components in 1.3 Depreciation, 1.4 Cost of 
capital and 1.2 Other operating costs.  

1.  A difference in the cost of capital in Reporting Table 1 can be 
observed between Sections 3.11 and 1.4 (New and existing 
investments vs by nature) as 3.3 Net current assets is not 
included in the net book value of new and existing investments. 

2.  No difference in the depreciation cost can be observed in 

Reporting Table 1 between Sections 3.10 and 1.3 (New and 
existing investments vs by nature). 

The NSA should be particularly careful here as while 
Eurocontrol22 allows to net-off the depreciation costs with the 

22 In the context of the ACE report (ATM Cost-Effectiveness Benchmarking Report), as per Eurocontrol 
Specification for Economic Information Disclosure, Edition 3.00, 2012. 

79 

 
 
subsidies used to finance investments related to common 
projects, , this is not possible in the reporting for the EC. 

3.  Cost of leasing (if any) are likely to represent a small part of the 
total other operating costs. Reconciling it with the financial 
statements enables the NSA to perform this verification as the 
cost of leasing should be reported on a specific line.  

ii.  Tool 5 is an Excel based tool built for the purpose of collecting and 

easing the verification of ANSPs costs related to the new and existing 
investments. It details the total cost of new and existing investments by 
nature (depreciation, cost of capital, cost of leasing), by type (new major 
investments, other new investments and existing investments) and the 
related net book value of the fixed assets and by investment type). This 
detail provides full transparency on these sections of the cost and 
enable the NSA to verify that all cost of capital, depreciation and leasing 
costs tie together and are relatable to the investment plan. Once the 
table has been filled in by the ANSP, the NSA is recommended to 
perform the following verifications: 

1.  Reconciliation of the new major investments, other new 

investments, existing investments with the Performance Plan. 

2.  Reconciliation of the depreciation, cost of capital and cost of 

leasing with the ones provided in the reporting table. 

3.  Reconciliation of the net book value fixed assets and the cost of 

capital pre tax rate (%) provided in the Reporting Table 1. 

4.  Verification of the depreciation costs reported, multiplying the 

net book value fixed assets and the depreciation rate (i.e. the 
amortisation period in years). 

5.  Verification of the cost of capital reported, multiplying the net 
book value fixed assets and the cost of capital pre tax rate (%). 

iii.  Even if not entering the new and existing investments as such, it is good 
practice for transparency to disclose the operating costs (i.e. staff costs 
and other operating costs) linked to new and existing investments. 
These operating costs do not enter the scope of the adjustments related 
to unforeseen changes.  

iv.  The actual costs of investments shall be reported in the annual 

monitoring report by the NSA. NSA have to input the yearly progress of 
assets under construction and the costs incurred for assets in operation 
since the correctness of values and years impact the actual depreciation 
costs. 

c.  In terms of thresholds, none applies when actual costs fall below the 

determined costs but not more than 5% can be recovered from airspace users 
when actual costs exceed the determined costs. 

3.  The carry-over mechanism was applied to the appropriate years in alignment with the 

regulatory framework and with the required approval and consultation. 

80 

 
a.  The NSA should verify that a difference is reimbursed (or recovered) through a 
reduction (or increase) of the unit rate in year n+2 or in the following reference 
period. 

b.  It is of the responsibility of the NSA to verify that the carry-over is only applied 
based on a detailed justification of the air navigation service provider and after 
consultation with airspace users representatives. 

i.  In case the actual costs fall below the determined costs, the national 

supervisory authority may decide based on a detailed justification of the 
air navigation service provider and after consultation with airspace users 
representatives, that the air navigation service provider shall not 
reimburse a part of the resulting difference. 

ii.  In case the actual costs exceed the determined costs by not more than 

5%, Member States may decide that the resulting difference is recovered 
from airspace users by the air navigation service provider or the 
Member State concerned, subject to the approval by the national 
supervisory authority of a detailed justification provided by the air 
navigation service provider in particular as regards the need to increase 
capacity and after consultation with airspace users’ representatives. 

iii.  In terms of timing, the NSA needs to officially approve the carry-over by 

the 1st of June of each year, meaning that the discussions between the 
NSA and the ANSP as well as the official consultation need to happen 
earlier. 

4.  Verify and reconcile the values provided for the actual new and existing investments 

costs with the costs by nature. 

This is done by reconcile the total actual cost of new and existing investment provided 
in Reporting Table 1 with the detail by investment/asset from the monitoring report. 

5.  In case an ANSP intends to add, cancel or replace major investments during the 

reference period, the NSA should verify the updated investment plan and related 
approval process. 

a.  This verification can be done based on the above described procedures. 

b.  According to the Articles 28(4) and 28(7) of the Regulation (EU) 2019/317, the 

NSA is responsible for approving these changes once the airspace users’ 
representatives have been consulted.  

B.2.4.2.2 Procedures for cost items referred to in Article 28(3) – Costs of 

competent authorities, qualified entities and Eurocontrol and 
unforeseen changes 

Article 28(5) of Implementing Regulation (EU) 2019/317 sets the rules for sharing the risks 
and costs between the airspace users and the ANSPs for RP3. The costs of competent 
authorities, qualified entities and Eurocontrol and their related adjustments can be identified 
in Reporting Table 1 (line 3.15 Eurocontrol costs), Reporting Table 2A (lines 3.3 and 3.4), 
Reporting Table 3 (total adjustment relating to competent authorities and qualified entities 

81 

 
 
(QEs) costs and total adjustment relating to Eurocontrol costs) and Reporting Table 2B (line 
13.4). 

As per the Regulation (EU) 391/2013, actual and determined Eurocontrol costs are foreseen 
to be part of the reporting tables. In the previous RP, these costs can be found in Reporting 
Table 1 (line 2.9 as part of the other state costs, Reporting Table 3A (line 1.1 Eurocontrol 
costs), Reporting Table 3B (under the item: Costs exempted from cost sharing) and Reporting 
Table 2 (line 4.4 “Costs exempt from cost sharing: amounts carried over to year n”). 

For validating the unforeseen changes in costs of competent authorities, qualified entities and 
Eurocontrol, the NSAs should follow the following procedures: 

1.  Reconcile the amounts of the adjustments carried over with the data from the year 

that the adjustments originate (from current RP). 

a.  For the current RP, the adjustments for year n will be reflected in the unit cost 

of year n+2, therefore the formulas and values should be verified from 
Reporting Table 2B item “13.4 Differences in costs as per Art. 28(4) to (6)”, 
Reporting Table 3 items “Total Adjustment relating to Eurocontrol costs (Art. 
28(5))” and “Total adjustment relating to component authorities and QEs costs 
(Art. 28(5))” with Reporting Table 2A items “3.3 Competent authorities and 
qualified entities costs” and “3.4. Eurocontrol costs”. 

b.  In case the values do not reconcile, NSA should verify whether any of the cells 
formulas is incorrect or was modified (for example referring to the correct cell 
but of the wrong sheet (e.g. of another of the Member State entities (ANSP(s), 
NSA, MET)). 

2.  Verify that the authorities and entities for which costs are included in the actual costs 

fulfil all the requirements set out in the Regulation. 

This verification procedure is exactly the same as for the determined costs – please 
refer to Section A.2.4.2.2. 

3.  Verify the eligibility of actual costs included and related adjustments: 

Eligibility of costs and adjustments:  

a.  The changes were unforeseen by the ANSPs and outside their control.  

b.  The actual costs of the competent authorities and qualified entities should be 
verified as per the same methodology as for the ANSP. As these entities have 
lower costs, often less variety in terms of costs by nature and provide less 
services than the ANSP, verification procedures could be lighter.  

c.  Eurocontrol publishes annual accounts and relevant positive or negative 

balance of costs following the adoption of the Eurocontrol accounts by the 
Enlarged Commission. 

If Eurocontrol is beneficiary of an EU grant, these funds are returned to 
Member States once the final report of the project has been approved by the 
Innovation & Networks Executive Agency (INEA). The EU grant received by 
Eurocontrol is also to be deducted from the unit rate at the benefit of airspace 
users. However, differently from EU grants where ANSPs are the beneficiaries 
and grants are deducted under other revenue as per Art. 25(3)(a), the value of 
EU grants paid to Eurocontrol are to be deducted within the scope of Art. 

82 

 
28(5)(2) by performing an adjustment of the Eurocontrol cost to be charged or 
deducted in the unit rate. 

4.  Verify that the carry-over mechanism was applied to the appropriate years in 
alignment with the regulatory framework and with the required approval and 
consultation. 

a.  The NSA should verify that a difference is reimbursed (or recovered) through a 
reduction (or increase) of the unit rate in year n+2 or in the following reference 
period. 

b.  In case the actual costs exceed the determined costs by not more than 5%, 
Member States may decide that the resulting difference is recovered from 
airspace users by the air navigation service provider or the Member State 
concerned, subject to the approval by the national supervisory authority of a 
detailed justification provided by the air navigation service provider in 
particular as regards the need to increase capacity and after consultation with 
airspace users' representatives. 

B.2.4.2.3 Procedures for cost items referred to in Article 28(3) – Pension 

costs and unforeseen changes 

Article 28(6) of Implementing Regulation (EU) 2019/317 sets the rules for sharing the risks 
and costs between the airspace users and the ANSPs for RP3. The pension costs and related 
adjustments can be identified in Reporting Table 1 item 1.1, Reporting Table 2A item 3.5 
(Pension costs Art. 28(6)), Reporting Table 2B item 13.4 Differences in costs as per Art. 28(4) 
to (6): amounts carried over to year n (Art.25(2)(d) and Reporting Table 3 item “Total 
adjustment relating to pension costs (Art.28(6))”. 

In RP2, pension costs are included in staff costs (without visibility on the two components 
separately), which contained also gross remuneration, overtime payments, employer’s 
contribution to social security schemes, other benefits. The prudent assumptions which are 
the basis of the pension costs calculations, shall be detailed in the Performance Plan. The 
adjustments from RP2 impacting RP3 linked to these costs can be found in the Reporting 
Table 3A item 3.7 Pension (and included in 3.1 Staff) and in Reporting Table 3B as part of the 
totals of item “Total costs exempt from cost sharing” and in Reporting Table 2 as part of item 
4.4. For validating the unforeseen changes in pension costs the NSAs should follow these 
procedures: 

1.  Reconcile the amounts of the adjustments carried over with the data from the year 

that the adjustments originate (from previous and current RP). 

a.  For the current RP, the adjustments for year n will be reflected in the unit cost 

of year n+2 (or in the following reference period or in the following two 
reference periods), therefore the formulas and, or values should be verified 
from Reporting Table 2B item “13.4 Differences in costs as per Art. 28(4) to 
(6)”, Reporting Table 3 item “Total adjustment relating to pension costs (Art. 
28(6))” and to Reporting Table 2A items “3.5 Pension costs”. 

b.  For the adjustments coming from the previous RP, see Section B.2.4.2 (2). 

83 

 
 
c.  In case the values do not reconcile, NSA should verify whether any of the cells 
formulas is incorrect or was modified (for example referring to the correct cell 
but of the wrong sheet (e.g. of the Member State entities (ANSP(s), NSA, MET). 

2.  Verify that the adjustments are eligible. 

a.  Please note that the actual pension costs verification procedures are described 

as part of the verification procedures for staff costs. Hence, they are not 
repeated here. 

b.  The changes in costs were unforeseen and outside of the ANSPs control. This 
means that the NSAs should validate if these changes are resulting from 
changes in the national legislation, changes in the pension accounting law, 
pension schemes or unforeseen financial market conditions. A close check on 
the actuarial reports and the Performance Plan for identifying and 
understanding the assumptions considered should be performed.  

c.  The assumptions related to the actuals were prepared based on the actuarial 

reports and the national legal requirements. 

d.  The actual costs claimed were reconciled with the supporting evidence 

(accounting records, invoices, banks statements of the proceeded payment, 
etc). 

3.  Verify that the carry-over mechanism was applied to the appropriate years in 

alignment with the regulatory framework. 

The NSAs should verify that a difference is reimbursed (or recovered) through a 
reduction (or increase) of the unit rate in year n+2, in the following reference period or 
in the following two reference periods if the amounts to be recovered impact the unit 
rate in a disproportionate manner 

B.2.4.2.4 Procedures for cost items referred to in Article 28(3) – Interest 

rates and unforeseen changes 

Article 28(6) of Regulation (EU) 2019/317 sets the guidelines for sharing the risks and costs 
between the airspace users and the ANSPs for RP3. The average interest rate on debts, the 
related cost and the related adjustments can be identified in: 

–  Reporting Table 1 item 3.7 “Average interest on debts”; 

–  Reporting Table 3 as part of the item “Total adjustment relating to interest on loans 

(Art. 28(6)” 

–  Reporting Table 2B item 13.4 “Differences in costs as per Art. 28(4) to (6): amounts 

carried over to year n (Art. 25(2)(d)”; 

–  Reporting Table 2A item 3.6 “Interest on loans (Art.28(6))”. 

In RP2 the interest rates can be found in Reporting Table 1 item 3.7 as a percentage, which 
falls under the item “Cost of Capital %” (total amount of items: 3.5 – 3.7), in Reporting Table 
3A item 3.8 as part of item 3.12 (Total costs exempted from cost sharing), in Reporting Table 
3B as part of the item “Total costs exempted from cost sharing” and part of Reporting Table 2 
as part of item 4.4 “Costs exempt from cost sharing: amounts carried over to year n”. 

84 

 
 
For validating the unforeseen changes in interest rates, the NSAs should follow the following 
procedures: 

1.  Reconcile the amounts of the adjustments carried over with the data from the year 

that the adjustments originate (from previous and current RP). 

a.  For the current RP, the adjustments for year n will be reflected in the unit cost 

of year n+2 (or in the following reference period or in the following two 
reference periods), therefore the formulas /values should be verified from 
Reporting Table 2B item “13.4 Differences in costs as per Art. 28(4) to (6)”, 
Reporting Table 3 item “Difference in interest on loans” and to Reporting Table 
2A items “3.6 Interest on loans (Art. 28(6))”. 

b.  For the adjustments coming from the previous RP, see Section B.2.4.2 (2). 

c.  In case the values do not reconcile, NSA should verify whether any of the cells 
formulas is incorrect or was modified (for example referring to the correct cell 
but of the wrong sheet (e.g. of the Member State entities (ANSP(s), NSA, MET). 

2.  Verify that the adjustments are eligible. 

The actual interest rate and cost verification procedures are described as part of the 
verification procedures for cost of capital. Hence, they are not repeated here. 

3.  Verify that the changes in costs were unforeseen and outside of the ANSPs control. 

This means that the NSAs should validate if these changes are resulting from changes 
in national economic situation or unforeseen financial market conditions.  

A close check of the Performance Plan for identifying and understanding the 
assumptions considered should be performed.  

4.  Verify that the carry-over mechanism was applied to the appropriate years in 

alignment with the regulatory framework. 

The NSAs should verify that a difference is reimbursed (or recovered) through a 
reduction (or increase) of the unit rate in year n+2, in the following reference period or 
in the following two reference periods if the amounts to be recovered impact the unit 
rate in a disproportionate manner. 

B.2.4.2.5 Procedures for cost items referred to in Article 28(3) – National 

taxation law or other unforeseeable new cost items and 
unforeseen changes 

Article 28 of the Regulation (EU) 2019/317 and Article 14 of Regulation (EU) 391/2013 set 
the rules governing a cost risk sharing mechanism between the airspace users and ANSPs for 
RP3. These unforeseen changes can found in the following reporting tables: 

–  Reporting Table 3 as part of the line “Total adjustment relating to interest on loans 

(Art. 28(6))”; 

–  Reporting Table 2B item 13.4 “Differences in costs as per Art. 28(4) to (6): amounts 

carried over to year n (Art. 25(2)(d))”; 

–  Reporting Table 2A item 3.7 “Changes in law (Art.28(6))”. 

85 

 
 
In RP2, the changes in national taxation law and other unforeseeable new cost items, can be 
found in Reporting Table 1 as part of item 3.9 “Total costs exempted from cost sharing”, in 
Reporting Table 3A item 3.9 and 3.10 as part of item 3.12 (Total costs exempted from cost 
sharing), in Reporting Table 3B as part of the line “Total costs exempted from cost sharing” 
and part of Reporting Table 2 as part of item 4.4 “Costs exempt from cost sharing: amounts 
carried over to year n”. 

For testing the unforeseen changes in national taxation law or other unforeseeable new cost 
items, the NSAs should perform the following procedures: 

1.  Reconcile the amounts of the adjustments carried over with the data from the year 

that the adjustments originate (from previous and current RP). 

a.  For RP3: as per Art. 28(6) requires that unforeseen changes associated with 

the changes in laws from year n are settled through an increase or reduction of 
the unit rate in year n+2 (or in the following reference periods). Therefore the 
verification of the formulas is needed, linking Reporting Table 2B item 13.4, 
Reporting Table 3 items “Total adjustment relating to change in law (Art. 
28(6))”, with Reporting Table 2A item 3.7. 

b.  For the current RP, the adjustments for year n will be reflected in the unit cost 

of year n+2 (or in the following reference period or in the following two 
reference periods), therefore the formulas /values should be verified from 
Reporting Table 2B item “13.4 Differences in costs as per Art. 28(4) to (6)”, 
Reporting Table 3 item “Costs relating to change in law” and to Reporting Table 
2A items “3.7 Changes in law (Art. 28(6))”. 

c.  For the adjustments coming from the previous RP, see Section B.2.4.2 (2). 

d.  In case the values do not reconcile, NSA should verify whether any of the cells 
formulas is incorrect or was modified (for example referring to the correct cell 
but of the wrong sheet (e.g. of the Member State entities (ANSP(s), NSA, MET). 

2.  Verify that the actual costs and adjustments are eligible 

a.  The changes in costs were unforeseen and outside of the ANSPs control. This 
means that the NSAs should validate if these changes are resulting from 
changes in national economic situation or unforeseen financial market 
conditions.  

b.  The actual costs claimed were reconciled with the supporting evidence (tax 
declarations, bank statements of the paid taxes, accounting records of the 
amounts claimed, etc.). 

3.  Verify that the carry-over mechanism was applied to the appropriate years in 

alignment with the regulatory framework. 

The NSAs should verify that a difference is reimbursed (or recovered) through a 
reduction (or increase) of the unit rate in year n+2, in the following reference period or 
in the following two reference periods if the amounts to be recovered impact the unit 
rate in a disproportionate manner. 

86 

 
 
 
B.2.4.3 Procedures for other revenues Art. 25(2)(i) 

Article 2 of Regulation 391/2013 defines ‘other revenue’ as revenues obtained from public 
authorities, including the financial support from Union assistance programmes such as the 
Trans-European transport network (TEN-T), Connecting Europe Facility (CEF) and the 
Cohesion Fund, revenues obtained from commercial activities and/or, in the case of terminal 
unit rates, revenues obtained from contracts or agreements between air navigation service 
providers and airport operators. 

Article 25 of Regulation (EU) 2019/317 states that for the calculation of the unit rates, the 
following revenues of air navigation service providers obtained in year n shall be deducted 
from the determined costs as ‘other revenue’: 

–  Public funds obtained from public authorities, including financial support from Union 

assistance programmes; 

–  Revenue obtained from commercial activities, where the Member State or Member 

States concerned have decided that those revenues are to be deducted; 

–  With regard to terminal air navigation services, revenue obtained from contracts or 

agreements concluded between air navigation service providers and airport operators, 
where the Member State or Member States concerned have decided that those 
revenues are to be deducted. 

The revenues referred in above points need to be deducted from the determined costs as per 
specific requirements for each category. This is the reason why no specific procedure were 
defined at this level but that they were specified for each category in the next sections 
B.2.4.3.1 to B.2.4.3.4. 

B.2.4.3.1 Procedures for other revenues Art.25(2)(i) – Financial support from 

Union assistance programmes 

The difference between the Union assistance programme funds and the other public funds is 
that the former are required to be reported and monitored in Reporting Table 4 (Annex IX (3) 
of Regulation (EU) 2019/317) while it is optional for other public funding. 

To verify the deduction of these revenues, NSA should apply the following procedures: 

1.  Reconcile the value of funded projects in Reporting Table 4 with the corresponding 

amounts (Total capital expenditure (CAPEX) for the project) in the investment section 
of the Annual Monitoring Report. 

2.  Reconcile the amounts granted with the amounts provided in the Grant Agreement. 

The NSA should reconcile the amounts granted in Reporting Table 4 with the amounts 
allocated in the Grant Agreement.  

These amounts should be updated in case of any amendments along the duration of 
the Grant Agreement. 

3.  Verify the actual amounts received, using also reports and tools provided by the PRB 
and the European Commission for cross-check of amounts received by the ANSP. 

87 

 
 
a.  Depending on the source of funding of projects, different sources should be 

looked into. We refer to Section B.2.4.3 of other revenues for more information 
on this topic. There are several ways of doing so:  

i. 

If the funding is coming directly from the SESAR Deployment Manager 
(SDM), a Power BI dashboard is available on a website from the EC 
(https://webgate.ec.europa.eu/eusinglesky/)23. 

ii. 

iii. 

The information required for the verification is available in Tab: 
“Monitoring report funding versus SDM payments”. This tool is based on 
the SDM bank payment statements. The detail available is by ANSP, not 
by project. 

If the funding is provided directly by INEA, the Financial Transparency 
System website (https://ec.europa.eu/budget/fts/index_en.htm) 
contains information on the funding provided by the Union budget – 
please refer to the other revenues section. 

In some cases EU grants support projects where multiple ANSPs are 
beneficiaries of the financial support as part of a single grant 
agreement. In these cases, the NSA shall verify grants paid and to be 
deducted into the Other Revenue only for those funds received by the 
ANSP under its supervision. If the grant agreement is not sufficiently 
clear about the amounts to be paid to each individual ANSP, the NSA has 
the possibility to request the above mentioned Power BI dashboard or 
query the INEA in order to verify that the grants overseen by the NSA 
were paid to the ANSP. 

iv.  Audited financial statements of the ANSPs. 

IFRS standards require a split of the main types of revenues and income. 
For the ANSP applying the IFRS standards, the EU funding obtained 
could be reported on a distinct line of the P&L in the other operating 
income section. Additional information can also be found in the 
complementary information disclosed with the financial statements. 

v.  Accounting records - Verify that the booked amounts received reconcile 

with the amounts claimed. 

vi.  Bank statements – Verify that amounts on the bank statements reconcile 

with the amounts claimed by the ANSPs. 

vii. 

If the above sources do not provide enough information, NSAs are 
recommended to ask for explanations and supporting documents from 
ANSPs. 

An enquiry should be done by the NSAs to the ANSPs to know if any 
amendments or adjustments have been done after EU programme audits 

23 For accessing the Power BI dashboard, the NSAs should go to EU SES website home page 
https://webgate.ec.europa.eu/eusinglesky/ and choose RP2 Capex tool. After logging in, they can find a user 
manual which contains few slides and the PRB email address for requesting the Power BI dashboard. This 
dashboard can only be obtained via email after the request is done. 

88 

 
 
 
 
took place on the projects, which could alter the amounts that have been 
received or are to be received. 

4.  If any, verify the eligibility of the amounts for administrative costs. 

a.  The ANSP should demonstrate that the amount of costs reported as 

administrative costs were indeed incurred because of the administration of the 
funded projects. 

b.  A Member State may decide not to deduct from determined costs an amount 
related to the administrative costs incurred for the reporting on the funding 
agreement if these administrative costs are not included in the cost base for 
charges. In general, good practice project managements leads to administrative 
costs below 10% of the total granted amounts. 

5.  Verify the calculations and sums in Reporting Table 4. 

a.  Filling in Reporting Table 4 is required for funded projects and financial support 
from Union assistance programmes. The following verification procedures 
should be implemented: 

The sum of amount granted across all charging zones should equal the total of 
the amounts granted as per the Grant Agreement (GA). 

i. 

If all funds were received, the amounts granted (as per GA) for the 
charging zone should be equal to the sum of the split by year of actual 
amounts received (charging zone). 

ii.  The Amounts granted (as per GA) should be equal to the sum of the 
amounts retained in respect of administrative costs for the charging 
zone and of the total to be reimbursed for the charging zone. 

iii. 

If all funds were distributed, the total to be reimbursed for the charging 
zone should be equal to the sum of the split by year of the amounts 
reimbursed to users. 

6.  Reconcile the amounts of the adjustments carried over were reconciled with the data 

from the year that the adjustments originate (from previous and current RP). 

a.  The data from the year that the adjustments originate are located for the 

current RP in Reporting Table 2A item 10.1 and for previous RP in Reporting 
Table 2 item 5.3. 

b.  In case the values do not reconcile, NSA should verify whether any of the cells 
formulas is incorrect or was modified (for example referring to the correct cell 
but of the wrong sheet (referring then to the funded projects costs of another 
of the Member State entities (ANSP(s), NSA, MET). 

7.  Verify that the carry-over mechanism was applied to the appropriate years in 

alignment with the regulatory framework (no later than in year n+2 for OPEX and as 
per the depreciation schedule for the CAPEX parts of each funded project)24. 

ANSPs should be asked to provide a detailed split of the grants received between OPEX 
and CAPEX. This is important because these grants will be reimbursed to users, (via 

24 According to Regulation (EU) 2019/317, Article 25(3) 

89 

 
 
the deduction on the unit rate) at different points in time. OPEX related funds will be 
reflected in year n+2, while CAPEX related funds will be taken in line with the 
depreciation schedule.  

8.  Reconcile the amounts reimbursed to users from Reporting Table 4 with the 

adjustments carried over in Reporting Table 3 and 2B. 

This is to verify that the amounts reimbursed to users are properly taken into account 
in the calculation of the unit rates. 

B.2.4.3.2 Procedures for other revenues Art.25(2)(i) – Other public funds 

obtained from public authorities 

This section is related to other public funding than from Union assistance programmes. While 
these funds are treated similarly, the reporting requirements are lower.  

While filling in Reporting Table 4 for the Union assistance programme funds is required, it also 
is allowed for other public funding (the Regulation does not state otherwise). It has the benefit 
to increase the transparency. 

To verify the deduction of these revenues, NSA should apply the below procedures. They are 
very similar to the one described for the EU funding, with the exception that the reference to 
Reporting Table 4 was removed as not necessarily used for other public funding. 

1.  Reconcile the value of funded projects with the corresponding amounts (Total CAPEX 

for the project) in the investment section of the Annual Monitoring Report. 

2.  Reconcile the amounts granted with the amounts provided in the Grant Agreement 

The NSA should reconcile the amounts granted with the amounts allocated in the Grant 
Agreement. 

These amounts should be updated in case of any amendments along the period of the 
grant agreement. 

3.  Verify the actual amounts received.  

a.  The possible verification methods could differ Member State by Member State. 

Some may share this information publicly (e.g. on online portals) while others 
may not. Below are presented possible verification sources that should work 
across all Member States. NSA can also leverage local resources for the 
verification as long as the information is reliable.  

i.  Audited financial statements of the ANSPs. 

IFRS standards require a split of the main types of revenues and income. 
For the ANSP applying the IFRS standards, the national funding obtained 
should be reported on a distinct line of the P&L in the other operating 
income section. Additional information can also be found in the 
complementary information disclosed with the financial statements. 

ii.  Accounting records - Verify that the booked amounts received reconcile 

with the amounts claimed. 

iii.  Bank statements – Verify that amounts on the bank statements reconcile 

with the amounts claimed by the ANSPs. 

90 

 
 
iv.  If the above sources do not provide enough information, NSAs are 

recommended to ask for explanations and supporting documents from 
ANSPs. 

4.  If any, verify the eligibility of the amounts for administrative costs. 

a.  The ANSP should demonstrate that the amount of costs reported as 

administrative costs were indeed incurred because of the administration of the 
funded projects. 

b.  A Member State may decide not to deduct from determined costs an amount 
related to the administrative costs incurred for the reporting on the funding 
agreement if these administrative costs are not included in the cost base for 
charges. In general, good practice project managements leads to administrative 
costs below 10% of the total granted amounts. 

5.  Verify the calculations of the amounts reimbursed. 

While filling in Reporting Table 4 is required for common projects and financial support 
from Union assistance programmes, this is not the case for national funding. 
Nevertheless, the exact same procedures are required: 

a.  The sum of amount granted across all charging zones should equal the total of 

the amounts granted as per the Grant Agreement. 

b.  If all funds were received, the amounts granted (as per GA) for the charging 

zone should be equal to the sum of the split by year of actual amounts received 
(charging zone). 

c.  The Amounts granted (as per GA) should be equal to the sum of the amounts 
retained in respect of administrative costs for the charging zone and of the 
total to be reimbursed for the charging zone. 

d.  If all funds were distributed, the total to be reimbursed for the charging zone 
should be equal to the sum of the split by year of the amounts reimbursed to 
users. 

6.  Reconcile the amounts of the adjustments carried over were reconciled with the data 

from the year that the adjustments originate (from previous and current RP).  

a.  The data from the year that the adjustments originate are located for the 

current RP in Reporting Table 2A item 10.2 and for previous RP in Reporting 
Table 2 item 5.4 

b.  In case the values do not reconcile, NSA should verify whether any of the cells 
formulas is incorrect or was modified (for example referring to the correct cell 
but of the wrong sheet (referring then to the funded projects costs of another 
of the Member State entities (ANSP(s), NSA, MET). 

7.  Verify the carry-over mechanism was applied to the appropriate years in alignment 
with the regulatory framework (no later than in year n+2 for OPEX and as per the 
depreciation schedule for the CAPEX). 

ANSPs should be asked to provide a detailed split of the grants received between OPEX 
and capex. This is important because these grants will be reimbursed to users, (via the 
calculation of unit costs) at different points in time. OPEX related funds will be 

91 

 
reflected in year n+2, while capex related funds will be taken in line with the 
depreciation schedule.  

8.  Reconcile the amounts reimbursed to users with the adjustments carried over in 

Reporting Table 3 and 2B. 

This is to verify that the amounts reimbursed to users are properly taken into account 
in the calculation of the unit rates. 

B.2.4.3.3 Procedures for other revenues Art.25(2)(i) – Revenue from 

commercial activities 

Article 25 of Implementing Regulation 2019/317 foresees that the revenue from commercial 
activities shall be deducted from the determined costs no later than in year n+2, where the 
Member State or Member States concerned have decided that those revenues are to be 
deducted. 

To verify the deduction of these revenues, NSA should apply the following procedures: 

1.  Verify the amounts related to the commercial revenues 

a.  The ANS related revenues (and costs) should be included in the reporting tables 
as per the principle of separation of accounts. This deduction of commercial 
revenue is related to “residual” commercial revenue included in the regulatory 
accounts (also if the related costs were included). Non-ANS related revenues 
(and costs), in accordance with Article 25(3) and Article 29(6) of Implementing 
Regulation 2019/317, can also be included as a deduction of other commercial 
revenues. This refers to when the ANSP, with the approval of the related NSA, 
chooses on a voluntary basis to use the revenues obtained from commercial 
activities of non-ANS related services to finance services that fall under the 
regulated part of their business and in that way reduce the unit rate.  

b.  IFRS standards require a split of the main types of revenues. For the ANSP 

applying the IFRS standards, the commercial revenue should be reported on a 
distinct line of the P&L. Additional information can also be found in the 
complementary information disclosed with the financial statements. This 
additional information may disclose the split between the ANS and non-ANS 
revenue. If not, this split should be enquired by the NSA to the ANSP and 
verified.  

c.  Based on the above, the NSA should reconcile the revenue amount reported 

with the Financial Statements.  

d.  More details on IFRS 15 (Revenues from contract with customers) and revenue 

recognition are provided in the section of IFRS considerations in the Verification 
Programme. 

2.  Reconcile the amounts of the adjustments carried over with the data from the year the 

adjustments originate (from previous and current RP). 

a.  The data from the year that the adjustments originate are located for the 

current RP in Reporting Table 2A item 10.3 and for previous RP in Reporting 
Table 2 item 5.5. 

92 

 
 
b.  In case the values do not reconcile, NSA should verify whether any of the cells 
formulas is incorrect or was modified (for example referring to the correct cell 
but of the wrong sheet (referring then to another of the Member State entities 
(ANSP(s), NSA, MET) data. 

3.  Verify the carry-over mechanism was applied to the appropriate years in alignment 

with the regulatory framework. 

The requirement from Implementing Regulation (EU) 2019/317 is that this revenue in 
year n is deducted from the cost base in the calculation of the unit rate no later than in 
year n+2. 

4.  Reconcile the amounts reimbursed to users with the adjustments carried over in 

Reporting Tables 3 and 2B. 

This is to verify that the amounts reimbursed to users are properly taken into account 
in the calculation of the unit rates. 

B.2.4.3.4 Procedures for other revenues Art.25(2)(i) – Revenue from 
contracts concluded between ANSPs and airport operators 

Article 25 of Implementing Regulation (EU) 2019/317 foresees that the revenue from 
contracts concluded between ANSPs and airport operators shall be deducted from the 
determined costs no later than in year n+2. 

The revenues from contract concluded between ANSPs and airport operators can be traced in 
Reporting Table 3 (section with the same line description), in Reporting Table 2A item 10.4 
“Revenues from contracts with airport operators (Art. 25(3)(c))” and Reporting Table 2B as 
part of item 13.8 “Other revenues (Art. 25 (2)(i))”. 

To verify the deduction of these revenues, NSA should apply the following procedures: 

1.  Verify the amounts related to the revenues from contracts concluded between ANSPs 

and airport operators. 

a.  IFRS standards require a split of the main types of revenues. For the ANSP 

applying the IFRS standards, the commercial revenue should be reported on a 
distinct line of the P&L. Additional information can also be found in the 
complementary information disclosed with the financial statements. This 
additional information may disclose the split between the ANS and non-ANS 
revenue. If not, this split should be enquired by the NSA to the ANSP and 
verified.  

b.  The NSA should reconcile the revenue amount reported with the financial 

statements, accounting records and/or the contract terms. 

c.  IFRS standards require a split of the main types of revenues. For the ANSP 

applying the IFRS standards, the revenue from contracts concluded between 
ANSPs and airport operators may be included in the commercial revenue 
(depending on whether this is considered as part of the ANSP “regular 
activities”), so not being reported on a distinct line of the P&L. Additional 
information may be found in the complementary information disclosed with the 
financial statements. This additional information may disclose the split between 
the contract with the airport operator and the rest of the commercial activities 

93 

 
 
if the contract revenue is significative. If not, this split should be enquired by 
the NSA to the ANSP and verified. 

d.  From an IFRS point of view, the revenues of contract with the airport operators 
may be grouped with the commercial revenue if it enters the scope of the ANSP 
“regular activities” definition. More details on IFRS 15 (Revenues from contract 
with customers) and revenue recognition are provided in the section of IFRS 
considerations in the Verification Programme. 

2.  Reconcile the amounts related to the adjustments carried over with the data from the 

year the adjustments originate (from previous and current RP). 

a.  The data from the year that the adjustments originate are located for the 

current RP in Reporting Table 2A item 10.4 and for previous RP in Reporting 
Table 2 item 5.6. 

b.  This is to verify that the amounts reimbursed to users are properly taken into 

account in the calculation of the unit rates. 

3.  Verify the carry-over mechanism was applied to the appropriate years in alignment 

with the regulatory framework (no later than in year n+2). 

The requirement from the Regulation (EU) 2019/317 is that this revenue in year n is 
deducted from the cost base in the calculation of the unit rate no later than in year 
n+2. 

4.  Reconcile the amounts reimbursed to users with the adjustments carried over in 

Reporting Tables 3 and 2B. 

This is to verify that the amounts reimbursed to users are properly taken into account 
in the calculation of the unit rates. 

B.2.4.4 Common projects 

The costs related to the common projects are included in the new and existing investments 
of ANSP while the related grants obtained are included in the revenues received from 
Union assistance programmes. Where the actual costs of new and existing investments 
exceed the corresponding determined costs over a reference period, national supervisory 
authorities should be responsible for verifying the detailed justifications provided by air 
navigation service providers and for authorising any subsequent recovery of additional 
costs from airspace users. Any material difference in those costs should not be charged to 
users, unless the national supervisory authority has established that the additional costs 
were exclusively due to new and existing investments required for operational changes 
consistent with the implementation of the European ATM Master Plan and in particular 
SESAR common projects. 

It is the responsibility of the NSAs to identify which investments are common projects and 
to ensure that the amount of costs funded by the EU programmes is not charged to users 
via the calculated unit rate in order to avoid double funding. 

For the calculation of unit rates, the other revenues have to be deducted from the 
determined costs as per the paragraphs 2 and 3 of Article 25, Regulation (EU) 2019/317.  

94 

 
 
The public funds covering staff costs and other operating costs shall be deducted from the 
determined costs no later than in year n+2. Public funds covering depreciation costs shall 
be deducted from the determined costs in accordance with the depreciation schedule of 
the financed asset (duration and annuity). A Member State may decide not to deduct from 
determined costs an amount related to the administrative costs incurred for the reporting 
on the funding agreement if these administrative costs are not included in the cost base 
for charges. Equally, a Member State may decide not to deduct from determined costs 
public funds received to cover costs not known at the time of drafting the Performance 
Plan and therefore not included in the cost base for charges. Airspace users shall not be 
charged for the costs covered by public funds. 

The NSA is responsible to check the compliance with the above requirements. The 
following procedures are recommended to this end: 

1.  Verify that all common projects from the Performance Plan were included in the 

investment costs and in Reporting Table 4. 

a.  The Performance Plan, investment section details the key investments and 
identifies the common projects. This verification is also performed via the 
reconciliation in next point. 

Would a project not have been implemented, the NSA should enquire a clear 
justification for the cause or reason from the ANSP.  

b.  NSA should verify that Reporting Table 4 also includes common projects not 

being funded in case they did not meet the requirements. 

2.  Verify the eligibility of actual costs of common projects by: 

a.  Reconciling the amount in Reporting Table 1 item “3.9 Common projects” with 
the detail of the investments amounts presented in the Annual Monitoring 
Report of the respective RP, under investments.  

The table reflects the total costs for new and existing investments (i.e. 
depreciation, cost of capital and cost of leasing). Please refer to Section 
B.2.4.2.1 of new and existing investments for more details. 

b.  Reconciling the amount in the Reporting Table, 1 item “3.9 Common projects”, 
with the detail of the 1.3 depreciation costs, 1.4 cost of capital and their cost of 
leasing (if any) included in 1.2 Other operating costs (covered under the 
verification procedures required for the new and existing investments if those 
were already implemented). 

3.  Reconcile the amounts of the adjustments carried over with the data from the year the 

adjustments originate (from previous and current RP). 

The data from the year that the adjustments originate are located for the current RP in 
Reporting Table 2A items 3.1 (new and existing investments) and 10.1 (Union 
assistance programmes), and for previous RP in Reporting Table 2 item 5.3. 

In case the values do not reconcile, NSA should verify whether any of the cells 
formulas is incorrect or was modified (for example referring to the correct cell but of 
the wrong sheet (e.g. of another of the Member State entities (ANSP(s), NSA, MET)). 

While the above procedures are very close to the ones related to the new and existing 
investments, the ones below are exactly the same as for the revenues from Union assistance 

95 

 
programmes. Please refer to the related Section (B.2.4.3.1) for more details on the proposed 
verification procedures. 

4.  Reconcile the value of funded projects in Reporting Table 4 with the corresponding 
amounts (total CAPEX for the project) in the investment section of the Annual 
Monitoring Report. 

5.  Verify the amounts granted. 

6.  Verify the actual amounts received, using also reports and tools provided by the PRB 
and the European Commission for cross-check of amounts received by the ANSP.  

7.  If any, verify the eligibility of the amounts for administrative costs. 

8.  Verify the Reporting Table 4 calculations and sums for each project. 

9.  Check that the carry-over mechanism was applied to the appropriate years in 

alignment with the regulatory framework (no later than in year n+2 for OPEX and as 
per the depreciation schedule for the CAPEX). 

10. Reconcile the amounts reimbursed to users from Reporting Table 4 with the 

adjustments carried over in Reporting Tables 3 and 2B. 

B.3 Conclusion Phase 

B.3.1 Summarise draft findings and share them with the service provider 

At the end of the fieldwork, the NSAs have to prepare a document which will explain the work 
performed and the results from the tested procedures. NSAs will present the findings 
identified in a draft verification report. It aims to introduce the respective findings identified 
and provide to ANSPs the opportunity to express their comments accordingly.  

Based on the requirements of Regulation (EU) 2017/373 specified in Annex II, Section B, 
“Oversight Programme”, it is advised for the NSAs to prepare a document which explains the 
work performed and the findings identified. 

Another importance of this document is that it will increase the communication flow between 
the NSAs and ANSPs concerning the accuracy of the costs declared. It will contribute to better 
cost reports in the following years from the part of ANSPs but also NSAs will better 
understand how to treat specific findings in the future. 

The findings to be presented in this document need to be introduced as per the Draft/Final 
Report template in Tool 4. 

The Draft Report should display all cases that have been marked as an “E” in the Verification 
Programme.  

While preparing the draft findings, referring to Tool 4, NSAs should: 

1.  Write the number of findings which are being listed in the draft report. 

The NSA should list all the exceptions identified and number them. This will help the 
NSAs to better monitor and keep track of the ANSPs performance in the future.  

2.  Write a brief caption for the finding being reported. 

96 

 
 
It is good practice to separate the findings in order to increase the transparency of 
the information and make it easier for the ANSPs to follow up.  

3.  Introduce the legal framework breached by the ANSPs which triggered the finding. 

This will assist not only ANSPs by introducing them to the right way of calculating the 
costs in the future, but also the NSAs to categorise and highlight where the problem 
stands. Once the ANSPs will come back with their replies, comments or additional 
evidence to be reviewed, it will be easier for the NSAs to quickly check if the new 
evidences delivered will affect the identified finding. 

4.  Identify clearly the actions to be taken by the ANSP, the respective corrective actions 
or  penalties  imposed  to  the  ANSP  and  the  relevant  deadline  for  implementing  the 
corrective actions. 

The Verification Draft Report (and later the Verification Final Report, when the timeline 
for obtaining the official comments from the ANSP is passed) is a tool not only to 
monitor and reflect the findings of a certain point in time, but also to impose changes 
and improvements in the calculation of the unit cost which impact the users of the 
ASN. 

Based on the EU legal framework25 the NSAs have the right tools in hand to impose 
changes and creativeness from the ANSPs through sanctions for the regulation 
infringements. Therefore, it is of a high importance to make a proper use of these tools 
when verifying the costs declared by the ANSPs. Article 9 of Regulation (EU) 
549/2004 clearly states that “Member States shall lay down sanctions…shall be 
effective, proportional and dissuasive”. 

B.3.2 Finalise Verification Report 

After delivering to ANSPs the draft verification report, the ANSPs will have two calendar 
weeks to provide their comments and, or the new supporting evidences for the findings listed 
in the draft report. After this period is finished, the NSAs need to assess whether the 
comments and the new evidences obtained during this period are a sufficient, relevant and 
reliable response for withdrawing the findings or keeping them in the final report.  

After auditing the new files received (if any), NSAs should prepare within a calendar week the 
final verification report, which will contain the final findings after reviewing the mentioned 
files. 

While preparing the final verification report, the NSAs should reflect the responses of the 
ANSPs into the final report. There will be three cases: 

1.  The ANSP provides comments and, or new evidences which support the draft 

findings, and all the findings are withdrawn.  

In this case the NSA should issue a clean report by confirming all the procedures. In 
an annex of the report, the NSA includes its own comments after the evidence 
received, but also the reply of the ANSP with regards to each withdrawn finding. 

25 Regulation (EU) 549/2004 Article 9 “Sanctions”, Regulation (EU) 550/2004 and Regulation (EC) No 1070/2009 
Article 15. 

97 

 
 
 
2.  The ANSP provides comments and, or new evidences and only a part of the findings 

are withdrawn.  

In this case, the NSA waves from the report those findings for which the evidence 
received is sufficient, reliable and relevant for assessing the procedure as 
confirmed. In an annex of the report, the NSA includes its own comments to the 
evidence received and the reply of the ANSP. 

3.  The ANSP does not reply.  

In this case, the NSA will issue the final report and no changes will be applied to the 
factual findings. The NSA will document in the annex that no reply was received 
from the ANSP within the communicated timeframe of two calendar weeks. 

The final report will then be delivered to the respective ANSP. No further 
comments or evidence are allowed to be given by the ANSPs beyond this point, as 
the verification report would then be final. 

When compiling the Verification Final Report, the NSAs should use the same Tool 4 which was 
used for the Verification Draft Report mentioned in Section B.3.1. In addition to what is 
mentioned in B.3.1, the Final Report will contain: 

1.  ANSP Comments 

The NSA will quote or summarise (depending on the length and the relevance of the 
comments provided) the reply received within the 2 calendar weeks from ANSP. 

2.  NSA Final Comments 

After evaluating the feedback from the ANSP, their official response and the 
additional materials provided from them for each, the NSAs should conclude on the 
final comments and present them in the final report, as explained previously in the 
third paragraph of this section. 

B.3.3 Follow up on the implementation of findings 

After issuing the final verification report, a next step for NSAs to follow, will be to keep track 
of the final findings and follow them up in the next verification missions if they were properly 
implemented. 

Therefore, a database with the findings should be filled in. This database will show in details all 
the findings identified, their respective level (3/2/1), the respective cost category, the raised 
recommendations by the NSA, the sanctions applied, the foreseen date of the implementation 
and their status of implementation from the ANSPs. This database should be fed continuously 
with information after each verification process.  

Following up on the implementation of the previous verification process findings is part of the 
verification process itself.  

Keeping these records organised and continuously updated in one database, will help the 
NSAs to trace back what was identified and monitor the progress of the ANSPs accordingly. 
This monitoring is in accordance with Article 7.7 of Regulation (EU) No 550/2004, and will 
also help to answer any queries that the European Commission might have during their 
monitoring process. 

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After the end of this conclusion phase, the NSA should also verify that the unit rate submitted 
to the European Commission in November is the same as the one published in the AIP26 and 
applied by the CRCO. This check is required, but not addressed further in this document. 

In the next year’s verification process, additionally to validation of the declared costs of the 
year, the NSAs will have to validate and check the implementation status of the previous year 
findings. 

26 Aeronautical Information Publications (AIPs) of each SES Member State are made available through Eurocontrol 
at https://www.eurocontrol.int/articles/ais-online 

99 

 
 
Annex 5: e-Training Material 

•  Zip folder of the e-Training Material 

•  Steps for downloading and accessing the e-Training Material 

Step 1: Download the Zip folder “EY E-Learning for NSA.zip”; 

Step 2: Save the zip folder in a local folder; 

Step 3: Unzip the folder locally; 

Step 4: Double click on file “Story.html” and the e-Training Material is ready to go. 

 
 
 
 
 
Annex 6: NSA Coaching Programme 

 
 
 
 
 
Assistance for the implementation of 
performance and charging schemes 
for the single European sky for 
oversight competences

NSAs Coaching

Project developed under DG MOVE Request for Services 
(ref. Ares(2019)4503007) under Framework Contract MOVE/E3/2016-401 

1. WELCOME

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NSAs Coaching | Assistance for the implementation of performance and charging schemes for the single European sky for oversight competences

NSAs Coaching | Assistance for the implementation of performance and charging schemes for the single European sky for oversight competences

1. Welcome | The Team Supporting You!

Frank Jost
Subject Matter Expert

Valérie Willems
Audit Technical 
Coordinator

Jonathan Dicker
Project Supervisor

Eva Leka
Project Supervisor

Christina Håkansson
Senior Team Member

Lisa Haapaniemi
Senior Team Member

Giacomo Potenza
Subject Matter Expert

Viviane Meunier

IFRS Expert

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NSAs Coaching | Assistance for the implementation of performance and charging schemes for the single European sky for oversight competences

1. Introduction | Tell us about yourself!

1. What is your role? 
2. Where are you from?
3. How many years of experience?

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NSAs Coaching | Assistance for the implementation of performance and charging schemes for the single European sky for oversight competences

Content

1. Welcome

Basic rules of the virtual coaching session; 
The Team Supporting You!

2. Introduction

Context and objective of the project; Milestones of the project; Objectives of the 
coaching session; Regulatory basis; Structure and Scope

O9:00 - 09:15

09:15 – 09:45

3.1. Planning

Defining objective and scope; Request information to service provider; Preliminary 
risk assessment; Sample items to be tested

O9:45 – 10:15

3.2. Execution

Verification of costs by nature

Coffee break

10:15 – 11:00

11:00 – 11:15

3.2. Execution

Verification of the bookings of costs on cost centres; verification of allocations

11:15 – 12:00

Lunch

3.2. Execution

Verification of specific lines, revenues and unforeseen changes

3.3. Conclusion

Summarise and share draft findings; finalise verification report; follow-up on 
findings

Coffee break

4. Wrap-up

Toolkit of the Verification Programme; 
Next steps; Q&A

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NSAs Coaching | Assistance for the implementation of performance and charging schemes for the single European sky for oversight competences

12:00 – 13:00

13:00 – 14:45

14:45 – 15:00

15:00 – 15:30

15:30 – 16:00

1. Welcome | Rules of the virtual coaching session

Is anybody there?

Lights, camera, 
action!

Leave work at work

Time is gold

Time to shine

Get comfy 

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NSAs Coaching | Assistance for the implementation of performance and charging schemes for the single European sky for oversight competences

2. INTRODUCTION

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NSAs Coaching | Assistance for the implementation of performance and charging schemes for the single European sky for oversight competences

NSAs Coaching | Assistance for the implementation of performance and charging schemes for the single European sky for oversight competences

2. Introduction | Context and objective of the project

ECA report findings:

• NSAs do not regularly conduct inspections on important elements of the costs charged to users: eligibility, economy
and adequate cost allocation. […] the Commission’s guidance on cost allocation between en-route and terminal charging
zones was insufficient, leading to the risk of cross-subsidization between en-route and terminal navigation services. [Pages
43, 44 of the report]

• No regular inspections were carried out to provide assurance that only eligible costs are included in the charging
scheme nor on whether they were incurred in a cost-efficient manner and adequately allocated between en-route and
terminal charging zones. [Page 27 of the report]

• The Commission and the NSAs should regularly conduct the inspections set out in the current legislation, covering in
particular the eligibility of costs charged and their allocation between en-route and terminal charging zones.
[Recommendation 4 – Ensure inspection coverage of the charging scheme. Pages 43, 44 of the report]

Project Objective 

Support the development of a structured and systematic approach for NSAs regarding the 
verification of the determined and actual ANS costs 

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NSAs Coaching | Assistance for the implementation of performance and charging schemes for the single European sky for oversight competences

2. Introduction | Milestones of the project

Conduct 
interviews with 
17 NSAs

Develop 
monitoring 
process for the 
EC

Develop coaching 
programme and 
materials

Develop e-
training module 
for NSAs

1

2

3

4

5

6

7

Develop 
Verification 
Programme and 
Training Material

Perform 6 pilot 
missions

Provide 10 
coaching sessions 
and assistance to 
NSAs

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NSAs Coaching | Assistance for the implementation of performance and charging schemes for the single European sky for oversight competences

2. Introduction | Tell us …

What are your 
expectations?
www.menti.com, code 38 71 25 1

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NSAs Coaching | Assistance for the implementation of performance and charging schemes for the single European sky for oversight competences

2. Introduction | What are the objectives of the coaching session?

Understand the objectives of the Verification Programme and Training Material.

Use efficiently the Verification Programme and Training Material.

Maximise the efficiency of people using the Verification Programme by leveraging all tools 
developed.

Identify the different steps of the verification process.

Understand all procedures and understand how to apply them.

Foster exchange between NSAs on common challenges faced, procedures and best practices that 
are applied when performing the verifications.

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NSAs Coaching | Assistance for the implementation of performance and charging schemes for the single European sky for oversight competences

2. Introduction | Regulatory basis for cost-eligibility verifications to be performed by the 
NSAs

Regulation (EC) No 550/2004 
Regulation (EC) No 1070/2009

Regulation (EU) No 2019/317

Overarching legal basis for cost-eligibility verifications by 
NSAs

Reference for specific elements that need to be subject to 
the verification performed by NSAs in the context of RP3

• Art. 2: the NSAs need to “ensure the appropriate supervision” of the 
application of the Regulation, and to “organise proper inspections and 
surveys to verify compliance” with the Regulation.

• Recital 29: NSAs should verify that the established determined costs 
only comprise cost items that are eligible under the performance and 
charging scheme.

• Art. 15(2): Establishes the principles to be followed when establishing 

• Art. 22(7): NSAs shall verify that the cost bases for en-route and 

the cost-base for charges.

terminal charges are compliant with the requirements of Art. 15(2) of 
Regulation (EC) No 550/2004 and Regulation (EC) No 1070/2009, and 
with Art. 22 of the Regulation (EU) 2019/317. 

• Art. 23: provisions of Art.22 shall apply also to actual costs.

• Art. 28: sets the rules governing a cost risk sharing mechanism 

between the airspace users and ANSPs.

• Art. 28(7): NSAs shall elaborate an annex to its annual performance 
monitoring report in which it reports the verification of the correct 
application by ANSPs of the provisions of Article 28. 

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2. Introduction | Structure and scope of the Verification Programme and the Training Material

Areas addressed

Sections in the 
reporting tables addressed

• Reconciliation of audited statutory financial statements to the 

• Reporting Table 1 (Annex VII of Reg. (EU) 2019/317)

regulated accounts of ANSP;

• Detail by nature and by service

• Allocation between en route and terminal and between charging zones;

• Eligibility of determined costs for RP2 and RP3;

• Complementary information (asset base, cost of capital, common 

projects, investments, Eurocontrol costs)

• Verification of actual costs for RP2 and RP3, in particular costs exempt 

•

Reporting Table 2 (Annex IX of Reg. (EU) 2019/317)

from cost risk sharing mechanism;

• Differences between determined and actual costs referred to in 

• Deduction of other revenues from the determined costs.

Art. 28(4) to 28(6)

• Verification that the unit rate submitted to the Commission in 

• Other revenues – Union assistance programmes and other public 

November is the same as the one published in the AIP and applied by 
the CRCO. 

• Verification that the performance targets set in the draft performance 

plan are consistent with the Union-wide performance targets.

funding

•

•

Reporting Table 3 (Annex IX of Reg. (EU) 2019/317)

Reporting Table 4 (Annex IX of Reg. (EU) 2019/317)

Not within scope:

Interpretation of the Regulation
Interdependencies with other KPIs

•
•
• Traffic risk sharing, traffic adjustments, financial incentive schemes and most of the other adjustments
• Calculation of the unit rates

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NSAs Coaching | Assistance for the implementation of performance and charging schemes for the single European sky for oversight competences

3.1 PLANNING  

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NSAs Coaching | Assistance for the implementation of performance and charging schemes for the single European sky for oversight competences

3.1 Planning Phase | Define objective and scope 

Applicable regulation:
► Regulation (EU) 2019/317

► Article 22: “The cost base for en route and terminal charges shall consist of the determined costs related to the provision of air 

navigation services in the charging zone concerned”

► Article 28: “[A] cost risk sharing mechanism shall be applied […] Differences between determined costs included in the performance 

plan and actual costs shall be shared between air navigation service providers and airspace users”

► Regulation (EC) No 550/2004

► Article 12: “Air navigation service providers, whatever their system of ownership or legal form, shall draw up, submit to audit and publish 
their financial accounts. These accounts shall comply with the international accounting standards adopted by the European Union […] or 
to the maximum possible extent.

Determined

Actual

► Objective:
The compliance of the ANSPs’ practices and their reported costs with the 
criteria and principles outlined as regards ANS costs in the SES regulatory 
framework.

► Objective:
The compliance of the ANSPs’ practices and their reported costs with the 
criteria and principles outlined as regards ANS costs in the SES regulatory 
framework.

► Scope:
An in-depth review of all the elements of the cost base ahead of the start of 
the next Reference Period, considering that the determined costs are used to 
establish, as part of the Performance Plans, the stable cost-base for the 
charges to airspace users during the five-year period. 

► Scope:
An annually in-depth review of all the elements of the cost base which form 
the base line value for the upcoming reference period.
The unit rate is calculated starting from the determined costs in nominal 
terms, however, the reported annual costs form the basis for the determined 
costs in the following period. 

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NSAs Coaching | Assistance for the implementation of performance and charging schemes for the single European sky for oversight competences

3.1 Planning Phase | Request information to the Service Provider

NSAs to access documents

•

•

•

•

•

•

•

Obtain from the ANSPs under their supervision, relevant data necessary for the purpose of ensuring the proper implementation and oversight of 
the SES Regulations. 

ANSPs should facilitate inspections and surveys carried out by the NSAs for the purpose of monitoring the implementation of the performance and 
charging schemes.

A set of tools is developed to facilitate the performance of the verification, including a standardised list of documentation to be requested from 
the ANSP and a dedicated Pre-fieldwork Questionnaire in order to facilitate the gathering of the preliminary information.

Standard list of documents to be requested

List of the main documents required for a cost verification;

Part of the tools developed for assisting NSAs in their cost 
verifications;

This list cannot be exhaustive and fully applicable to all ANSPs 
(due to the differences amongst ANSPs’ accounting standards, 
technologies and methodologies);

NSA should tailor this list to their ANSPs specificities.

Pre-fieldwork Questionnaire 
to be filled in by the ANSP

•

•

•

A tool to be used during the Planning phase of the verification 
process;

To be filled in by ANSP, for the collection of preliminary 
information, mainly as regards changes in ANSP legal structure, 
operations and methodologies;

Developed to support the NSA in its initial analysis of the 
numbers reported by the ANSP in the reporting tables and to 
perform a preliminary risk assessment.

How will they be communicated? 
The above mentioned tools should be sent out together with the Letter for the announcement of the verification. 

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NSAs Coaching | Assistance for the implementation of performance and charging schemes for the single European sky for oversight competences

3.1 Planning Phase | Concept of preliminary risk assessment and Sampling

Risk assessment and sample size implication 

•

•

•

•

Risk assessment is performed to help identify risks related to 
the entities and, or transactions;

In order to identify these risks, different elements are 
considered during the planning phase, which include the use 
of professional judgement on internal controls, as well as 
previous audit reports (some examples can be seen on the 
scheme on the right side);

Determining the sample size aims to respond to those 
identified risks;

The risk assessment will impact the sample size in terms of 
number of items to be tested. 

Risk resulting from ANSPs
environment & NSA's previous
experiences

• Unusual pressure on 

management;

• Nature of the business;
• Factors affecting the industry;
• Risk related to fraud;
• Changes in management 

during the period;
• Complexity of the

organisation.

Work of internal and, or 
statutory auditors and, or 
previous NSA audit/ 
verification reports
• Qualified or non qualified

audit opinion;

• Internal audit report;
• Previous NSA's audit report;
• Previous NSA's verification

report.

Professional Judgement

Minimal 
Risk

Low Risk

Moderate 
Risk

High Risk

The higher the risk level, the higher the number
of items to be verified

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3.1 Planning Phase | Perform preliminary risk assessment

Determined

Actual

•
•

•

•

•
•

The critical elements for achieving the performance targets;
General checks on the overall quality of the submitted reporting tables, 
considering the integrity of the formulas and that no error message is 
showing;
Large variations between the determined costs by nature and the actual 
costs of the previous RP (or the baseline) and insufficient explanatory 
information in the Performance Plans;
Large variations in the yearly actuals of the previous RP with a peak in 
the year before the last year of the RP;
The modified or unmodified audit opinion.
The value of funded projects (i.e. common projects, public funding and 
Union assistance programmes) in Reporting Table 4 does not correspond 
with the amounts (total CAPEX for the project) in the investment section 
of the Annual Monitoring Report;

• Weak or insufficiently elaborated allocation methodology for the 

allocation of costs between en route and terminal and between charging 
zones, not revised since the previous RP;
Specific legal considerations as regards ownership of assets used for 
providing ANS, etc.

•

•

•

•

•

•

General checks on the overall quality of the submitted reporting 
tables, considering the integrity of the formulas and that no error 
message is showing;

The report of costs exempt under the cost sharing mechanism (Art.14 
of Regulation (EU) 391/2013) from RP2;

The underlying breakdowns and information as regards Table 4 (Annex 
IX of Regulation (EU) 2019/317);

The organisational set-up of the ANSP and, for ANSPs that are public 
entities, any changes in the institutional arrangements or relevant 
governing legislation;

Results from NSA verifications of cost-eligibility from previous RPs;

• Overall replies provided by the ANSP to the Pre-fieldwork 

Questionnaire.

Other cases?

The above mentioned cases are a non exhaustive list of examples to validate the Preliminary Risk Assessment. It works in 
combination with the respective tool built as a template to help the NSAs in documenting their Risk Assessment.

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NSAs Coaching | Assistance for the implementation of performance and charging schemes for the single European sky for oversight competences

3.1 Planning Phase | Sample items to be tested

Determined

Actual

•

•

•

•

Use of professional judgement on internal controls as well as other 
auditors’ reports 
Review the costs by nature declared by the ANSPs and the service 
providers and their variances compared with the previous years.
Identify the population of cost items included in the reporting tables:
•

Review the detailed breakdown of cost items per each cost by nature 
to each service provider.
Reconcile the total breakdown with the total amount declared by the 
service providers per each cost by nature.
Identify the total number of items per each cost by nature.
Concerning staff cost category, collect the detailed cost breakdown 
per person (if possible).
Determine the sample size:
•

Sort the detailed item list per each cost by nature from the largest 
amount to the smallest and start selecting from the highest value.

•
•

•

•

Select the 10 highest value items or 10% of the total number of 
items per cost category, whichever is the highest. If population is 
less than 10 items, then full population will be tested.

•

•

•

•

For the verification of the eligibility of costs => same steps as 
determined costs.
For the verification of the adjustments resulting from the unforeseen 
changes reported as per the requirements of the Article 28 of the 
Regulation (EU) 2019/317 and reflected in Reporting Table 2B.
The NSAs can verify those adjustments incurred that have 
•
significant variance between the determined and the actual costs.

For the verification of the cost allocations:
•

NSAs can start the verification of the cost allocations  based on the 
information they have at hand during the second part of the prior 
year. 

At this point in time, the final information is not yet available, however, 
the NSAs can manage their fieldwork time efficiently by verifying the  
information in hand.

• Once the service providers will have the finalized data, the NSAs can 
verify during the fieldwork of the current year only the differences 
from the last verification performed during the second part of year 
n-1.
•

As such, there will be no need for the NSAs to sample the cost 
allocations to be verified.

• When an ANSP has been considered as high risk, then high risk 

items need to be systematically added in the sample. 

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NSAs Coaching | Assistance for the implementation of performance and charging schemes for the single European sky for oversight competences

Green: Common to determined  and actual costs
Blue: Specific to determined  or actual costs 

3.2 EXECUTION

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NSAs Coaching | Assistance for the implementation of performance and charging schemes for the single European sky for oversight competences

3.2 Execution Phase | Verification of costs by nature - Transversal to all cost categories by 
nature

Determined

Actual

Regulation (EU) 2019/317 and (EC) No 550/2004
► Article 10.2: […] The baseline value for determined costs shall be estimated by using the actual costs available for the preceding RP and shall be adjusted 

to take account of latest available cost estimates, traffic variations and their relation to costs.

► Article 22.1: The cost base for en route and terminal charges shall consist of the determined costs related to the provision of air navigation services in the 

charging zone concerned.

► Article12.2: In all cases, air navigation service providers shall publish an annual report and regularly undergo an independent audit.

Procedures Determined Costs

Procedures Actual Costs

•

•

•

•

•

•

Verify that the ANSP has separate accounts for ANS and non-ANS 
services. Costs that are not related to the provision of ANS should 
not be included in the cost base for setting the unit rate;
Verify the consistency between the determined costs included in the 
Reporting tables and the ANSP business plan (if any);
Verify that there is an audit trail between the determined costs of 
the Reporting Period and the available actual costs for the preceding 
reference period, taking into account all the adjustments performed;
Reconcile the values used for the determined costs baseline with the 
actual costs for the preceding reference period;
Check that the determined costs do not include elements that are 
specifically not allowed under the Service Provision Regulation;
Verify the restructuring costs included in the Performance Plan 
against their definition.

•

•

•

•

•

Verify that the ANSP’s financial statements were subject to an 
independent financial audit and were published;
Verify that the ANSP has separate accounts for ANS and non-ANS 
services. Costs that are not related to the provision of air navigation 
services or not incurred in the year should not be included in the cost 
base for setting the unit rate (e.g. asset write-off);
Review the grouping/mapping  of the ANS costs into the cost by 
nature categories in the reporting tables;
Reconcile the cost by nature amounts reported in the Reporting 
Table 1 by the ANSP to the ANS separate accounts and to the audited 
Financial Statements;
Check that the reported costs do not include elements that are 
specifically not allowed under the Service Provision Regulation, such 
as the cost of penalties imposed by Member States and the cost of 
any corrective measures imposed by the Framework Regulation.

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NSAs Coaching | Assistance for the implementation of performance and charging schemes for the single European sky for oversight competences

Green: Common to determined  and actual costs
Blue: Specific to determined  or actual costs 

3.2 Execution Phase | Verification of costs by nature - Staff costs

Determined

Actual

Regulation (EU) 2019/317

► Article 22.4: [S]taff costs shall include gross remuneration, overtime payments, and employers' contributions to social security schemes, as well as 

pension costs and costs of other benefits.

Procedures Determined Costs

Procedures Actual Costs

•

•

•

•

•

Verify that the only elements included in the staff costs reported in 
the reporting tables are the ones listed in the regulatory framework;
Check that only the ANS related staff costs were reported in the 
reporting tables;
Verify that all adjustments performed to the staff costs rely on  sound 
assumptions;
Verify that the adjustments are correctly reflecting the 
assumptions;
Perform an in-depth verification of pension costs, leveraging the 
performance plan details and any actuarial report available.

•

•

•

Verify that the only elements included in the Staff cost reported in 
the reporting tables are the ones listed in the regulatory framework. 
This is done by reconciling the staff costs included in the cost base 
with the statutory accounts;
For a sample of Staff costs, check whether the costs have been 
correctly shared between ANS and non-ANS. This is done by 
reviewing extracts from the timesheet reporting system, employment 
contracts or calculations in case of other apportionment basis used;
Perform an in-depth verification of pension costs, leveraging any 
actuarial report available (especially in the case of other pension 
schemes than the state plans).

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Green: Common to determined  and actual costs
Blue: Specific to determined  or actual costs 

Please refer to section ‘IFRS considerations’ 
of the Verification  Programme

3.2 Execution Phase | Verification of costs by nature - Operating costs other than 
staff costs

Determined

Actual

Regulation (EU) 2019/317

► Article 22.4: [O]perating costs other than staff costs shall include costs incurred for the purchase of goods and services used to provide air navigation 

services, including outsourced services, material, energy, utilities, rental of buildings, equipment and facilities, maintenance, insurance costs and travel 
expenses.

Procedures Determined Costs

Procedures Actual Costs

•

•

•

•

Verify that the only elements included in the other operating cost 
reported in the reporting tables are the ones listed in the regulatory 
framework;
Check that only the ANS related other operating costs were reported 
in the reporting tables;
Verify that all adjustments performed to the other operating costs 
rely on sound assumptions;
Verify that the adjustments are correctly reflecting the 
assumptions.

•

•

Verify that the only elements included in the other operating cost 
reported in the reporting tables are the ones listed in the regulatory 
framework;
For a sample of other operating costs, check whether the costs have 
been correctly shared between ANS and non-ANS.

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NSAs Coaching | Assistance for the implementation of performance and charging schemes for the single European sky for oversight competences

Green: Common to determined  and actual costs
Blue: Specific to determined  or actual costs 

Please refer to section ‘IFRS considerations’ 
of the Verification  Programme

3.2 Execution Phase | Verification of costs by nature - Depreciation

Determined

Actual

Regulation (EU) 2019/317

► Article 22.4: [D]epreciation costs shall include costs related to the total fixed assets in operation for the purpose of providing air navigation services. 
[They] shall be depreciated in accordance with their expected operating life, using the straight-line method applied to the costs of the assets being 
depreciated. Historical or current cost accounting shall be applied for the calculation of the depreciation. The methodology used to calculate depreciation 
costs shall not be altered during the duration of the depreciation and shall be consistent with the cost of capital applied, that is to say nominal cost of 
capital for historical cost accounting and real cost of capital for current cost accounting. 

Procedures Determined Costs

Procedures Actual Costs

•

•

•

•

•

•

•

Verify that the only depreciation cost included in the reporting tables 
are the ones allowed by the regulatory framework;
Check that only the ANS related depreciation costs were reported in 
the reporting tables.
Verify that the value of fixed assets is being depreciated in 
accordance with their expected operating life, using the straight-line 
method. 
Verify that the depreciation methodology used was consistent with 
the one applied to the cost of capital calculation. 
Verify that the methodology used to calculate depreciation costs was 
not altered during the duration of the depreciation.
Verify that all adjustments performed to the other operating costs 
rely on sound assumptions;
Verify that the adjustments are correctly reflecting the 
assumptions.

•

•

•

•

•

Verify that the only depreciation cost included in the reporting tables 
are the ones allowed by the regulatory framework. This refers to the 
check that no cost is double charged to the airspace users through 
depreciation and through other operating costs nor that no 
depreciation is accounted for assets under construction;
For a sample of depreciation costs, check whether the costs have 
been correctly shared between ANS and non-ANS. This is done by 
analysing the basis for the separation and possible allocation of 
depreciation costs (based on the assets use) between regulated ANS 
and non (regulated) ANS, and test how this is put in practice;
Verify that the value of fixed assets was depreciated in accordance 
with their expected operating life, using the straight-line method;
Verify that the depreciation methodology used was consistent with 
the one applied to the cost of capital calculation;
Verify that the methodology used to calculate depreciation costs was 
not altered during the duration of the depreciation.

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Green: Common to determined  and actual costs
Blue: Specific to determined  or actual costs 

Please refer to section ‘IFRS considerations’ 
of the Verification  Programme

3.2 Execution Phase | Verification of costs by nature - Cost of capital

► Article 22.4: [C]ost of capital shall be equal to the product of [..]:

Determined

Actual

Regulation (EU) 2019/317

► (i) the sum of the average net book value of fixed assets in operation or under construction and possible adjustments to total assets determined by the 
national supervisory authority and used by the air navigation service provider and of the average value of the net current assets, excluding interest-
bearing accounts, that are required for the purposes of providing air navigation services, 

► (ii) The weighted average of the interest rate on debts and of the return on equity. For air navigation service providers without any equity capital, the 
weighted average shall be calculated on the basis of a return applied to the difference between the total of the assets referred to in point (i)  and the 
debts.

Procedures Determined Costs

Procedures Actual Costs

•

•
•

•

Verify the eligibility and accuracy of all components  of the cost of 
capital calculation by verifying the assumptions taken for each of 
them;
Validate the cost of capital calculation;
Verify that methodology applied to the cost of capital is consistent
with the one used to calculate depreciation costs;
Perform an in-depth verification of interest rate and costs, 
leveraging the Performance Plan details.

•

•
•

•

Verify the eligibility and accuracy of all components  of the cost of 
capital calculation by reconciling them with the ANSP regulatory 
balance sheet and Profit and Loss accounts;
Validate the cost of capital calculation; 
Verify that methodology applied to the cost of capital is consistent
with the one used to calculate depreciation costs;
Perform an in-depth verification of interest rate and costs.

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Green: Common to determined  and actual costs
Blue: Specific to determined  or actual costs 

3.2 Execution Phase | Verification of costs by nature - Exceptional costs

Determined

Actual

Regulation (EU) 2019/317

► Article 22.4: [E]xceptional costs shall consist of non-recurring costs relating to the provision of air navigation services, including any non-recoverable 

taxes and customs duties.

Procedures Determined Costs

Procedures Actual Costs

•

•

•

•

Verify that the only elements included in the exceptional costs 
reported in the reporting tables are the ones allowed by in the 
regulatory framework;
Check that only the ANS related exceptional costs were reported in 
the reporting tables;
Verify that all adjustments performed to the exceptional costs rely on 
sound assumptions;
Verify that the adjustments are correctly reflecting the 
assumptions.

•

•

Verify that the only elements included in the exceptional costs 
reported in the reporting tables are the ones allowed by the 
regulatory framework;
Verify that the costs reported under the exceptional costs are related 
to the provision of air navigation services.

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Green: Common to determined  and actual costs
Blue: Specific to determined  or actual costs 

Coffee break ?

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NSAs Coaching | Assistance for the implementation of performance and charging schemes for the single European sky for oversight competences

3.2 Execution Phase | Verification of the bookings on cost centres

► Article 4 requires transparency in the reporting, which is highly supported by a well-structured set of cost centres.

Determined

Actual

Regulation (EU) 2019/317

Procedures Determined Costs

Procedures Actual Costs

•
•

•

Review and validate the structure of cost centres;
Review and validate the procedure(s) for the booking of costs on 
cost centres;
Test the correct implementation of the procedure for the booking  of 
costs on cost centres.

Cost centres are only used for actual costs in the ANSP 
Finance/controlling software. Hence, no verification procedure is required 
for determined costs.

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Green: Common to determined  and actual costs
Blue: Specific to determined  or actual costs 

3.2 Execution Phase | Verification of allocations

Determined

Actual

Regulation (EC) No 550/2004 and Regulation (EC) No 1070/2009 

► Article 15.2: [C]ross-subsidy shall not be allowed between en-route services and terminal services. Costs that pertain to both terminal services and en-
route services shall be allocated in a proportional way between en-route services and terminal services on the basis of a transparent methodology.

► Article 22.1: The cost base for en route and terminal charges shall consist of the determined costs related to the provision of air navigation services in the 

charging zone concerned.

Procedures Determined Costs

Procedures Actual Costs

•

•

Verify the allocation methodology for determined costs and  analyse 
any significant changes in the allocation methodology and 
assumptions  compared to the one implemented for the actuals of the 
preceding reference period ;
Verify that the allocation methodology is correctly reflected in the 
costs by service and costs by charging zone.

• Obtain the description for the allocation process the ANSP has in 

•

•

place and validate the overall allocation model logic;
For complex allocation models, reconcile the total costs from the 
sources and destinations for each allocation step;
For a sample of allocation steps:
•
•

Reconcile the costs from the allocation sources and destinations;
Review and validate the causality (i.e. logical relationship) 
between the allocation sources and destinations;
Review and validate the causality of the driver/allocation 
key/criteria used for the allocation from the allocation sources to 
destinations;
Reconcile the driver/allocation key/criteria quantities used for 
allocations with source information.

•

•

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Green: Common to determined  and actual costs
Blue: Specific to determined  or actual costs 

Lunch !

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3.2 Execution Phase | Verification of specific lines, revenues and unforeseen changes -
Inflation

Determined

Actual

Regulation (EU) 2019/317

► Article 26: […], the determined costs [...] expressed in nominal terms shall be adjusted on the basis of the difference in percentage between the actual 
inflation index and the forecast inflation index for that year n and included as an adjustment for the calculation of the unit rate for year n+2. The 
determined costs referred to in the third subparagraph of Article 22(1), and the determined costs referred to in points (c) and (d) of Article 22(4) where 
historical cost accounting is applied, shall not be subject to any inflation adjustment.

Procedures Determined Costs

Procedures Actual Costs

•

Verify that the ANSP used the correct forecast inflation percentage, 
i.e. the one from the International Monetary Fund as foreseen by the 
legal framework.

•

•

•

Reconcile the amounts of the adjustments carried over with the data 
from the year that the adjustments originate (from previous and 
current RP);
Depending on the cost accounting method used (historical or 
current), verify the cost being subject to inflation adjustments;
Verify that the ANSP used the correct actual inflation percentage, 
i.e. the one published by the Commission in the Eurostat Harmonised 
Index of Consumer Price for the State concerned as foreseen by the 
legal framework.

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Green: Common to determined  and actual costs
Blue: Specific to determined  or actual costs 

3.2 Execution Phase | Verification of specific lines, revenues and unforeseen changes - Cost 
items referred to in Article 28(3)

Regulation (EU) 2019/317
► Article 28 (2): Where, over the whole reference period, actual costs fall below (or exceed) the determined costs, the air navigation service provider or the 

Determined

Actual

Member State concerned shall retain (or cover) in full the resulting difference;

► Article 28 (3): Paragraph 2 does not apply if the differences between determined costs and actual costs result from at least one of the following changes: 

[…]

► Article 28 (7): National supervisory authorities shall verify annually whether air navigation service providers apply correctly the provisions of Article 28. 
National supervisory authorities shall draw up a report by 1 September of year n+1 on the changes in costs referred to in paragraph 3 which occurred in 
year n. The report shall be subject to consultation of airspace users' representatives.

Procedures Determined Costs

Procedures Actual Costs

•

Reconcile the amounts of the adjustments carried over from RP2
as cost exempts with the data from the year that the adjustments 
originate (from previous RP).

No general verification procedures apply to these specific cost items. The 
specific procedures for each cost item are covered in their dedicated 
sections 

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Green: Common to determined  and actual costs
Blue: Specific to determined  or actual costs 

3.2 Execution Phase | Verification of specific lines, revenues and unforeseen changes - Cost 
items referred to in Article 28(3) - Costs of new and existing investments and unforeseen 
changes

► Article 28.4: […] the differences between determined costs and actual costs shall be shared as follows: 

Determined

Actual

Regulation (EU) 2019/317

► (a) where, […] actual costs fall below the determined costs, the ANSP or the MS concerned shall reimburse the resulting difference to airspace users, 
through a reduction of the unit rate in year n+2 or in the following RP, unless, based on a detailed justification of the ANSP, the NSA decides, after 
consultation with airspace users' representatives, that the ANSP shall not reimburse a part of the resulting difference; 

► (b) where, […] actual costs exceed the determined costs by not more than 5 %, MS may decide that the resulting difference is recovered from airspace 
users by the ANSP or the MS concerned, through an increase of the unit rate in year n+2 or in the following RP, subject to the approval by the NSA of a 
detailed justification provided by the ANSP in particular as regards the need to increase capacity and after consultation with airspace users' 
representatives. 

Procedures Determined Costs

Procedures Actual Costs

•
•

Verify the eligibility of determined costs included;
Reconcile the total determined cost of new and existing investment 
provided in Reporting Table 1 with the detail by investment/asset 
from the investment plan included in the Performance Plan.

•

•

•

•

•

Reconcile the amounts of the adjustments carried over with the data 
from the year that the adjustments originate (from current RP);
Verify the eligibility of costs included and adjustments (unforeseen, 
nature of costs, threshold);
The carry-over mechanism was applied to the appropriate years in 
alignment with the regulatory framework and with the required 
approval and consultation;
Verify and reconcile the values provided for the actual new and 
existing investments costs with the costs by nature;
In case an ANSP intends to add, cancel or replace major investments 
during the reference period, verify the updated investment plan and 
related approval process.

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Green: Common to determined  and actual costs
Blue: Specific to determined  or actual costs 

3.2 Execution Phase | Verification of specific lines, revenues and unforeseen changes - Cost 
items referred to in Article 28(3) – Costs of competent authorities, qualified entities and 
Eurocontrol and unforeseen changes 

Determined

Actual

Regulation (EU) 2019/317 and (EC) No 550/2004

► Article 22.1: Member States may decide to include in the cost base […]: (a) determined costs incurred by competent authorities, (b) […] by the qualified 
entities referred to in Article 3 of Regulation (EC) No 550/2004, and (c)  determined costs stemming from the Eurocontrol International Convention […].

► Article 28.5: […] the differences between determined costs and actual costs shall be shared as follows: 

► (a) where, over a calendar year, actual costs fall below the determined costs established for that calendar year, MS shall reimburse the resulting 

difference to airspace users through a reduction of the unit rate in year n+2; 

► (b) where, over a calendar year, actual costs exceed the determined costs established for that calendar year, MS shall recover the resulting difference 

from airspace users through an increase of the unit rate in year n+2.

Procedures Determined Costs

Procedures Actual Costs

•

•

Verify that the authorities and entities for which costs are included in 
the cost base fulfil all the requirements set out in the Regulation;
Verify the eligibility of the determined costs included in the cost 
base.

•

•

•
•

Reconcile the amounts of the adjustments carried over with the data 
from the year that the adjustments originate (from current RP);
Verify that the authorities and entities for which costs are included in 
the actual costs fulfil all the requirements set out in the Regulation; 
Verify the eligibility of actual costs and related adjustments;
Verify the carry-over mechanism was applied to the appropriate 
years in alignment with the regulatory framework and with the 
required approval and consultation.

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Green: Common to determined  and actual costs
Blue: Specific to determined  or actual costs 

3.2 Execution Phase | Verification of specific lines, revenues and unforeseen changes - Cost 
items referred to in Article 28(3) - Pension costs and unforeseen changes 

Determined

Actual

Regulation (EU) 2019/317

► Article 28.3: […] unforeseeable changes in national pensions law, pensions accounting law or unforeseeable changes in financial market conditions, on 

the condition that such changes in pension costs are outside the control of the ANSP and, in the case of cost increases, that the ANSP has taken 
reasonable measures to manage cost increases during the RP.

► Article 28.6: […] the differences between determined costs and actual costs shall be shared as follows: 

► (a) where […] actual costs fall below the determined costs, the ANSP or the MS concerned shall reimburse the resulting difference to airspace users 

through a reduction of the unit rate in year n+2, in the following RP or in the following two RP if the amounts to be recovered impact the unit rate in a 
disproportionate manner; 

► (b) where…actual costs exceed the determined costs, MS may decide that the resulting difference is recovered from airspace users by the ANSP or the 
MS concerned, through an increase of the unit rate in year n+2, in the following RP or in the following two RP if the amounts to be recovered impact 
the unit rate in a disproportionate manner.

Regulation (EU) No 391/2013

► Article 14.2 (d) & (e):

► Where […] as a result of deducting costs from the scope of paragraph 2(a), actual costs are lower/exceed than the determined costs established at the 

beginning of the RP, the resulting difference shall be returned/ passed on to airspace users through a carry over to the following RP(s). 

Procedures Determined Costs

Procedures Actual Costs

The verification of determined pension costs is fully covered in the 
“Procedures for Staff Costs”. No additional procedures needed.

•

•

•

Reconcile the amounts of the adjustments carried over with the data 
from the year that the adjustments originate (from previous and 
current RP);
Verify that the adjustments are eligible (unforeseen, outside of 
ANSP control and reasonable measures were taken);
Verify that the carry-over mechanism was applied to the appropriate 
years in alignment with the regulatory framework.

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Green: Common to determined  and actual costs
Blue: Specific to determined  or actual costs 

Please refer to section ‘IFRS considerations’ 
of the Verification  Programme

3.2 Execution Phase | Verification of specific lines, revenues and unforeseen changes - Cost 
items referred to in Article 28(3) - Interest rates and unforeseen changes

Determined

Actual

Regulation (EU) 2019/317

► Article 28.3 and Article 28.6 – The same requirement as for the pension costs are applicable to these costs.

► Article 14.2 (d) & (e) - The same requirement as for the pension costs are applicable to these costs.

Regulation (EU) No 391/2013

Procedures Determined Costs

Procedures Actual Costs

The verification of determined interest rates is fully covered in the 
“Procedures for Cost of Capital”. No additional procedures needed.

•

•

•

Reconcile the amounts of the adjustments carried over with the data 
from the year that the adjustments originate (from previous and 
current RP);
Verify that the adjustments are eligible (unforeseen, outside of 
ANSP control and reasonable measures were taken);
Verify that the carry-over mechanism was applied to the appropriate 
years in alignment with the regulatory framework.

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Green: Common to determined  and actual costs
Blue: Specific to determined  or actual costs 

3.2 Execution Phase | Verification of specific lines, revenues and unforeseen changes - Cost 
items referred to in Article 28(3) - National law or other unforeseeable new cost items and 
unforeseen changes

Determined

Actual

Regulation (EU) 2019/317

► Article 28.3 and Article 28.6 – The same requirement as for the pension costs are applicable to these costs.

► Article 14.2 (d) & (e) - The same requirement as for the pension costs are applicable to these costs.

Regulation (EU) No 391/2013

Procedures Determined Costs

Procedures Actual Costs

•

•

Verify that the assumptions described in the Performance Plans are 
accurate;
Reconcile the determined costs presented in the Performance Plan 
with the detail of the reporting tables.

•

•

•

Reconcile the amounts of the adjustments carried over with the data 
from the year that the adjustments originate (from previous and 
current RP);
Verify that the actual costs and adjustments are eligible 
(unforeseen, outside of ANSP control and reasonable measures were 
taken and required by law);
Verify the carry-over mechanism was applied to the appropriate 
years in alignment with the regulatory framework.

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Green: Common to determined  and actual costs
Blue: Specific to determined  or actual costs 

3.2 Execution Phase | Verification of specific lines, revenues and unforeseen changes - Other 
Revenues – Financial support from Union Assistance Programmes

Determined

Actual

Regulation (EU) 2019/317

► Article 25.3: […] public funds covering staff costs and other operating costs shall be deducted from the determined costs no later than in year n+2. 

Public funds covering depreciation costs shall be deducted from the determined costs in accordance with the depreciation schedule of the financed 
asset (duration and annuity). 

Procedures Determined Costs

ANSPs are not required to forecast their future grants and revenues. No 
determined revenue is to be entered in the reporting tables. Hence, no 
verification procedure is required.

•

•

•

•
•
•

•

•

Procedures Actual Costs
Reconcile the value of funded projects with the corresponding amounts 
(total CAPEX for the project) in the investment section of the Annual 
Monitoring Report;
Reconcile the amounts granted in Reporting Table 4 with the amounts 
provided in the Grant Agreement;
Verify the actual amounts received, using also reports and tools provided 
by the PRB and the European Commission for cross-check of amounts 
received by the ANSP;
If any, verify the eligibility of the amounts for administrative costs;
Verify the calculations and sums in Reporting Table 4;
Reconcile the amounts of the adjustments carried over were reconciled 
with the data from the year that the adjustments originate (from previous 
and current RP);
Verify the carry-over mechanism was applied to the appropriate years in 
alignment with the regulatory framework (no later than in year n+2 for 
OPEX and as per the depreciation schedule for the CAPEX);
Reconcile the amounts reimbursed to users from Reporting Table 4 with 
the adjustments carried over in Table 3 and 2B.

Note 1: Financial support from Union Assistance Programmes has to be included in Reporting Table 4 while it is only optional (but advised) for other public 
funding.

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Green: Common to determined  and actual costs
Blue: Specific to determined  or actual costs 

Please refer to section ‘IFRS considerations’ 
of the Verification  Programme

3.2 Execution Phase | Verification of specific lines, revenues and unforeseen changes - Other 
Revenues – Other public funds from Public Authorities

Determined

Actual

Regulation (EU) 2019/317

► Article 25.3: […] public funds covering staff costs and other operating costs shall be deducted from the determined costs no later than in year n+2. 

Public funds covering depreciation costs shall be deducted from the determined costs in accordance with the depreciation schedule of the financed 
asset (duration and annuity). 

Procedures Determined Costs

Procedures Actual Costs

ANSPs are not required to forecast their future grants and revenues. No 
determined revenue is to be entered in the reporting tables. Hence, no 
verification procedure is required.

•

•

•
•
•
•

•

•

Reconcile the value of funded projects with the corresponding 
amounts (total CAPEX for the project) in the investment section of
the Annual Monitoring Report;
Reconcile the amounts granted with the amounts provided in the 
Grant Agreement;
Verify the actual amounts received;
If any, verify the eligibility of the amounts for administrative costs;
Verify the calculations of the amounts reimbursed;
Reconcile the amounts of the adjustments carried over were 
reconciled with the data from the year that the adjustments originate 
(from previous and current RP);
Verify the carry-over mechanism was applied to the appropriate years 
in alignment with the regulatory framework (no later than in year n+2 
for OPEX and as per the depreciation schedule for the CAPEX);
Reconcile the amounts reimbursed to users with the adjustments 
carried over in Reporting Table 3 and 2B.

Note 1: Financial support from Union Assistance Programmes has to be included in Reporting Table 4 while it is only optional (but advised) for other public 
funding.
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Green: Common to determined  and actual costs
Blue: Specific to determined  or actual costs 

NSAs Coaching | Assistance for the implementation of performance and charging schemes for the single European sky for oversight competences

Please refer to section ‘IFRS considerations’ 
of the Verification  Programme

3.2 Execution Phase | Verification of specific lines, revenues and unforeseen changes - Other 
Revenues – Revenue from commercial activities

Determined

Actual

Regulation (EU) 2019/317

► Article 25.3: 

► Revenue obtained from commercial activities, where the MS concerned have decided that those revenues are to be deducted.
► The revenue […] shall be deducted from the determined costs no later than in year n+2.

► Article 29.6:  Member States may decide to set the unit rate […] a level lower than the unit rate calculated in accordance with Article 25(2).

Procedures Determined Costs

Procedures Actual Costs

ANSPs are not required to forecast their future grants and revenues. No 
determined revenue is to be entered in the reporting tables. Hence, no 
verification procedure is required.

•
•

•

•

Verify the amounts related to the commercial revenues;
Reconcile the amounts of the adjustments carried over with the data 
from the year that the adjustments originate (from previous and 
current RP);
Verify the carry-over mechanism was applied to the appropriate 
years in alignment with the regulatory framework (no later than in 
year n+2);
Reconcile the amounts reimbursed to users with the adjustments 
carried over in Reporting Table 3 and 2B.

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Green: Common to determined  and actual costs
Blue: Specific to determined  or actual costs 

Please refer to section ‘IFRS considerations’ 
of the Verification  Programme

3.2 Execution Phase | Verification of specific lines, revenues and unforeseen changes - Other 
Revenues – Revenue from contracts concluded between ANSPs and Airport Operators

► Article 25.3: 

Determined

Actual

Regulation (EU) 2019/317

► […] revenue obtained from contracts or agreements concluded between air navigation service providers and airport operators, where the MS 

concerned have decided that those revenues are to be deducted.

► The revenue […] shall be deducted from the determined costs no later than in year n+2. 

Procedures Determined Costs

Procedures Actual Costs

ANSPs are not required to forecast their future grants and revenues. No 
determined revenue is to be entered in the reporting tables. Hence, no 
verification procedure is required.

•

•

•

•

Verify the amounts related to the revenues from contracts 
concluded between ANSPs and airport operators;
Reconcile the amounts of the adjustments carried over with the data 
from the year that the adjustments originate (from previous and 
current RP);
Verify the carry-over mechanism was applied to the appropriate 
years in alignment with the regulatory framework (no later than in 
year n+2);
Reconcile the amounts reimbursed to users with the adjustments 
carried over in Reporting Table 3 and 2B.

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Green: Common to determined  and actual costs
Blue: Specific to determined  or actual costs 

Please refer to section ‘IFRS considerations’ 
of the Verification  Programme

3.2 Execution Phase | Verification of specific lines, revenues and unforeseen changes -
Common projects

Determined

Actual

Applicable Regulations
► Regulation (EU) 409/2013, Regulation (EU) 2014/716, Regulation (EU) No 550/2004, Regulation (EC) No 1070/2009 and Regulation (EU) 2019/317 

make the regulatory framework for the common projects, detailing their objectives, content and eligibility requirements.

Procedures Determined Costs

Procedures Actual Costs

•

•
•

Verify that only common projects from the Performance Plan were 
included in the determined investment costs;
Verify the eligibility of determined costs included;
Verify the updated investment plan in case an ANSP intends to add, cancel 
or replace major investments during the reference period.

•

•
•

•

•
•

•
•
•

•

Verify that all common projects from the Performance Plan were included 
in the investment costs and in Reporting Table 4;
Verify the eligibility of actual costs of common projects;
Reconcile the amounts of the adjustments carried over with the data from 
the year that the adjustments originate (from previous and current RP);
Reconcile the value of funded projects in Reporting Table 4 with the 
corresponding amounts (Total CAPEX for the project) in the investment 
section of the Annual Monitoring Report;
Verify the amounts granted;
Verify the amounts received, using also reports and tools provided by the 
PRB and the European Commission for cross-check of amounts received 
by the ANSP;
If any, verify the eligibility of the amounts for administrative costs;
Verify the Reporting Table 4 calculations and sums;
Check that the carry-over mechanism was applied to the appropriate years 
in alignment with the regulatory framework;
Reconcile the amounts reimbursed to users from Reporting Table 4 with 
the adjustments carried over in Reporting Table 3 and 2B.

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NSAs Coaching | Assistance for the implementation of performance and charging schemes for the single European sky for oversight competences

Green: Common to determined  and actual costs
Blue: Specific to determined  or actual costs 

Please refer to section ‘IFRS considerations’ 
of the Verification  Programme

Coffee break ?

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3.3 CONCLUSION

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NSAs Coaching | Assistance for the implementation of performance and charging schemes for the single European sky for oversight competences

3.3 Conclusion Phase | Make sure you ….

Summarise findings and share with ANSP
• Formal document sharing findings, called draft report.
• Opportunity for ANSPs to provide comments and/or further evidence.

Finalise Verification Report
• ANSPs provide their comments and/or additional documents. NSA to verify:

• Additional supporting evidence is relevant, sufficient and reliable;
• Additional supporting evidence confirm the procedures previously marked as “Exception” in the 

draft report.

Follow-up on implementation of findings
• Database of the finalised findings to be constantly updated and followed-up during the next 

verification process

•
•

For the determined costs: Ensure that the proposed performance targets contained in the performance plans are consistent with the Union-wide performance targets;
For the actual costs: Verify that the unit rate submitted to the Commission in November is the same as the one published in the AIP and applied by the CRCO.

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4. WRAP-UP

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NSAs Coaching | Assistance for the implementation of performance and charging schemes for the single European sky for oversight competences

4. Wrap-up | Toolkit for the Verification Programme

Planning of the verification

Execution

•

•

•

•

Tool 1 - Template letter for the announcement of the 
verification 

Tool 2 - Standard list of documents to be requested from 
the ANSP in view of the verification 

Tool 3 – Template for the pre-fieldwork questionnaire to be 
filled by the ANSP

Tool 6 – Template for documenting the Preliminary Risk 
Assessment and Sampling

•

•

Tool 5 – Template table for the verification of investment 
costs

Tool 7 – Operational checklist (Verification Programme in 
excel format) 

Other

•

Tool 0 – Overview of Tools

Conclusion and Reporting

•

Tool 4 – Template for the Factual Findings Report 
prepared by the NSAS following the verification (in Excel)

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NSAs Coaching | Assistance for the implementation of performance and charging schemes for the single European sky for oversight competences

4. Wrap-up | Next steps

What’s Next?

Assistance Period

E-training module

Reach to us at: ey.move@be.ey.com

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NSAs Coaching | Assistance for the implementation of performance and charging schemes for the single European sky for oversight competences

Questions?

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NSAs Coaching | Assistance for the implementation of performance and charging schemes for the single European sky for oversight competences

Thank you for your 
participation!

Rate the coaching session
www.menti.com, code 38 71 25 1

Page 56
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NSAs Coaching | Assistance for the implementation of performance and charging schemes for the single European sky for oversight competences

NSAs Coaching | Assistance for the implementation of performance and charging schemes for the single European sky for oversight competences

EY | Assurance | Tax | Transactions | Advisory

About EY
EY is a global leader in assurance, tax, transaction and 
advisory services. The insights and quality services we 
deliver help build trust and confidence in the capital 
markets and in economies the world over. We develop 
outstanding leaders who team to deliver on our promises to 
all of our stakeholders. In so doing, we play a critical role in 
building a better working world for our people, for our 
clients and for our communities.

© 2019 EYGM Limited.
All Rights Reserved.

EY refers to the global organization and/or one or more of the member firms of 
Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & 
Young Global Limited, a UK company limited by guarantee, does not provide 
services to clients. For more information about our organization, please visit 
ey.com.

ey.com/be

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NSAs Coaching | Assistance for the implementation of performance and charging schemes for the single European sky for oversight competences

Annex 7: List of the NSAs that participated in the coaching programme 

No. 

1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 

Session 
No.  
I 
I 
II 
II 
II 
III 
III 
III 
IV 
IV 
V 
V 
VI 
VI 
VI 
VII 
VII 
VIII 
VIII 
VIII 
IX 
IX 
IX 
X 
X 

Session Date 

NSA 

25-Aug-20 
25-Aug-20 
27-Aug-20 
27-Aug-20 
27-Aug-20 
2-Sep-20 
2-Sep-20 
2-Sep-20 
4-Sep-20 
4-Sep-20 
7-Sep-20 
7-Sep-20 
9-Sep-20 
9-Sep-20 
9-Sep-20 
11-Sep-20 
11-Sep-20 
14-Sep-20 
14-Sep-20 
14-Sep-20 
16-Sep-20 
16-Sep-20 
16-Sep-20 
17-Sep-20 
17-Sep-20 

Cyprus* 
Greece 
Luxembourg 
Portugal 
Spain 
Lithuania 
Norway 
Slovenia 
Finland 
Switzerland 
Czech Republic 
Slovakia 
Bulgaria 
Hungary 
Sweden 
Croatia 
Italy 
Belgium 
Ireland 
Austria 
Germany 
Netherlands 
Cyprus* 
France 
Poland 

No.    Participants 
per NSA 
3 
2 
1 
2 
3 
3 
1 
4 
2 
5 
3 
2 
1 
2 
4 
2 
3 
1 
3 
1 
2 
1 
3 
2 
3 

* The Cypriot NSA participated in 2 different coaching sessions due to planning restrictions 

 
 
 
Annex 8: Feedback from the coaching programme  

 
 
 
 
 
Feedback from NSAs

Feedback gathered from menti.com questionnaire

Q2: How satisfied are you with the session?

23

12

Extremely satisfied

Very satisfied

Moderately satisfied

Slightly satisfied

Not at all satisfied

3

0

0

Page 12

October 2020

Strengthening the capacity of NSAs for air navigation services cost verifications

Key take-aways

▪ Highly satisfied

▪ High interest from the participants;

▪

Interactive and dynamic sessions;

▪ Highly satisfied with the approach of exchanging 

experiences within different NSAs.

Feedback from NSAs

Feedback gathered from menti.com questionnaire

19

Q3: What parts of the session were most interesting for you? 

9

6

5

Verification
Programme Tools

All parts of the
session

Planning Phase

Execution Phase

Structured
information

Conclusion Phase

Possibility for
discussion/exchange

Risk Assessment and
Sampling tool

"Visual" links:
procedures and
Reporting Tables

3

2

2

2

2

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Strengthening the capacity of NSAs for air navigation services cost verifications

Feedback from NSAs

Feedback gathered from menti.com questionnaire

Q4: What could have improved further your learning experience?

Real exercises in practice

Legal explanation of some critical points in Regulation

6

5

A bit more interactive format

An exchange session at a later stage

Connection with other KPIs

Dividing the session into two

Feedback to be shorter :)

Indepth look of the tools

It is easier to receive information in your own language

More breaks

Test after the session :)

1

1

1

1

1

1

1

1

1

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Strengthening the capacity of NSAs for air navigation services cost verifications

Annex 9: NCP Plenary meeting: 09 October 2019 – Brochure 

 
 
 
 
 
Strengthening the capacity 
of National Supervisory 
Authorities for air navigation 
services cost verifications 

Assistance for enhancing  

NSA cost oversight competences

October 2019

2 | Strengthening the capacity of NSAs

Strengthening the technical
capacity of NSAs – from idea …

… to concrete actions

15 years ago the EU launched the Single

Over the next year, EY will be developing a

European Sky (SES) initiative, which has
since been one of the key priorities of the

structured and systematic approach
regarding the verification of eligible ANS

European Commission’s overall transport
policy. As a result, performance of air

navigation services has improved through
stronger integration and higher efficiency.

The European Court of Auditors, in its

Special Report No. 18 of November 2017,

recommended to ensure the inspection
coverage of the charging scheme. In

costs.

The overall objective of the project is to

have better connected and engaged NSAs
by providing them a toolkit with guidance

materials, as well as technical training and
support services, throughout the cost

verification process.

particular, it recommended that “the
Commission and the NSAs should regularly

The main activities of the project are:

•  Developing NSA oversight programmes

conduct the inspections set out in the
current legislation, covering in particular

the eligibility of costs charged and their
allocation between en-route and terminal

charging zones”. Thus, the proper
implementation of the SES provisions at

national level requires significant            

capabilities and expertise; therefore, the 

covering cost verification;

•  Supporting the implementation of

relevant oversight procedures by NSAs,

including through 6 pilot missions; and,
•  Providing training to NSA staff regarding

the cost verification, auditing methods
and financial and accounting knowledge.

European Commission, specifically DG 

The project therefore aims at developing a

MOVE, has contracted EY to provide        

method and e-learning material useful to all

additional support in capacity building to 
aid the NSAs in their tasks to verify the    

eligibility of air navigation services (ANS) 

costs to be charged to airspace users.

NSAs.

Strengthening the capacity of NSAs | 3

 
Why should you be involved?  

How can you contribute?  

As representatives of the NSAs, your active 

Your cooperation is of paramount 

participation in this initiative is key. 

importance.

You will have the opportunity to shape the 

To make this capacity building exercise a 

realisation of a cost eligibility verification 

success, we invite you to actively participate 

programme. This programme will be a 

in the following activities:

Interviews on experiences 
and best practices

Provide materials from your 
past experience to help tailor  
the verification programme 
development

Volunteer for one of our  
6 pilot missions

Attend one of our 10 
training workshops & reach 
out for coaching support

concrete working  method to support NSAs 

in the fulfilment of their duties. 

Through interviews, EY will gather your 

input, experiences and best practices on 

cost verification. Following its initial 

development, EY will launch pilot missions 

to further tailor the verification programme. 

Engaging in these pilot missions will give 
you the unique opportunity to contribute to 

the development of this verification 

programme. 

EY will then facilitate training and coaching 

sessions to address your concerns 

regarding cost-eligibility, including the 

establishment of regulatory accounts, 

verification of determined costs and the 

review of actual costs. 

Attending these sessions jointly with your 

colleagues from various NSAs will support 

further communication and exchanges on 

best practices.  

4 | Strengthening the capacity of NSAs

Why EY

 • Our large network of EY offices  provides 

us with the capacity to deliver  services 

worldwide;

 • Our unique track record in working with   

the EU institutions and national 

authorities;

 • The EY Centre of Excellence, based in 

EY Belgium, composed of audit 
professionals with extensive experience 
working in the area of EU funds, 
including in the aviation sector;

 • Our technical support in the Performance 

and Charging Scheme to the European 

Commission and to the Performance 

Review Body since 2017;

 • Our unique position as a global leader in 

the field of assurance, tax, transactions 

and advisory, which will assure you that 

our services are performed on the basis 

of  extensive technical expertise and in 

full compliance of professional standards; 

and,

 • Our commitment to building a better 

working world.  

Strengthening the capacity of NSAs | 5

Who to contact for this capacity building project

You may contact our Team below via our functional mailbox at ey.move@be.ey.com.

Valerie Willems  
Audit Technical Expert
Associate Partner, Assurance
Office: +32 (0)2 774 6280
valerie.willems@be.ey.com 

Iulia Serafimescu
Project Supervisor
Senior Manager, Assurance
Office: +32 (0)2 774 6198
iulia.serafimescu@be.ey.com 

Giacomo Potenza
Subject Matter Expert
Manager, Transaction and Advisory Services
Office: +32 (0)491 162 172
giacomo.potenza@be.ey.com

6 | Strengthening the capacity of NSAs

  
 
EY | Assurance | Tax | Transactions | AdvisoryAbout EYEY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.EY refers to the global organization and may refer to one or more of the member firms of Ernst & Young Global Limited, each of which is a separate Legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com/nl.© 2019 EYGM LimitedAll Rights Reserved.ey.com/beAnnex 10: NCP Performance WG 27: 15 October 2019 

 
 
 
 
 
Strengthening the technical capacity of NSAs
From idea to concrete actions

Project origination

► Implementation of the SES provisions at national level requires 

significant capabilities and expertise

► ECA Report No. 18/2017 - recommendation that the Commission 

and the NSAs should ensure the inspection coverage of the 
performance and charging scheme, covering in particular the 
eligibility of costs charged and their allocation between en-route
and terminal charging zones

Page 2

October 2019

Strengthening the capacity of NSAs for air navigation services cost verifications

Strengthening the technical capacity of NSAs
Project objective

Project objective

► Provide support to enhance NSAs oversight competences by 

providing a toolkit with guidance materials, as well as technical 
training and support services, throughout the cost verification 
process

Page 3

October 2019

Strengthening the capacity of NSAs for air navigation services cost verifications

Strengthening the technical capacity of NSAs
Project activities

Project activities

► Developing NSA oversight programmes covering cost verification;
► Supporting the implementation of relevant oversight procedures 

by NSAs, including through 6 pilot missions; and

► Providing training to NSA staff regarding the cost verification, 
auditing methods and financial and accounting knowledge.

Page 4

October 2019

Strengthening the capacity of NSAs for air navigation services cost verifications

Strengthening the technical capacity of NSAs
Timeline of activities involving the NSAs

Verification programme 
finalised
•

Iterative loop to 
consolidate all feedback 
into the programme 
starting Nov 19

Prepare for 
training and 
coaching 
sessions
• Coordinate with 
all NSAs for the 
organisation of 
the sessions

Onsite 
trainings and 
assistance to 
NSAs
• Deliver 

trainings and 
support

Pilot missions
• Test the draft verification 
programme on existing 
ANSP information or by 
performing a verification 
mission at the ANSP 
together with EY

Interviews, meetings 
with NSAs
• Designate a contact 

person

• Meet or call with the EY 

team

• Exchange with EY on 
general and specific 
points regarding cost 
verification

Oct ‘19 - Mar ‘20
6 pilot missions

Nov ‘19 - Jun ‘20
Verification 
programme loop 
and finalisation

Apr ‘20 - May ‘20
Prepare for 
training and 
coaching sessions 
(in groups)

Oct ‘19 - Nov ‘19

Interviews, 
meetings with 
NSAs

Page 5

October 2019

Strengthening the capacity of NSAs for air navigation services cost verifications

Jun ‘20 - Oct ‘20
Onsite trainings 
(in groups) and 
assistance to 
NSAs 

Annex 11: NCP Performance WG 28: 15 May 2020 

 
 
 
 
 
Project objectives, activities, deliverables and timeline
Brief overview

Project objective

Support the development of a structured and systematic approach for NSAs regarding the 
verification of the determined and actual ANS costs 

• Develop Verification Programme;

• Conduct pilot verifications with 6 NSAs to test the Verification Programme;

Main activities

• Prepare consolidated version of the Verification Programme;

• Prepare training material to be used by the NSAs in their oversight tasks;

• Deliver coaching programme for NSAs (10 sessions);

• Verification Programme for the use of the NSAs;

Deliverables

•

Training Material accompanying the implementation of the Verification Programme (including 
an e-training module);

• 10 coaching sessions for assistance in performing cost eligibility verifications.

Page 3

May 2020

Strengthening the capacity of NSAs for air navigation services cost verifications

Project objectives, activities, deliverables and timeline
ECA report

NSAs do not regularly conduct inspections on important elements of the costs charged to users: eligibility, 
economy and adequate cost allocation. 
[…] 
the Commission’s guidance on cost allocation between en-route and terminal charging zones was insufficient, 
leading to the risk of cross-subsidization between en-route and terminal navigation services.

[Pages 43, 44 of the report]

ECA report 
findings 

In the five Member States visited, no regular inspections were carried out to provide assurance that only 
eligible costs are included in the charging scheme nor on whether they were incurred in a cost-efficient manner 
and adequately allocated between en-route and terminal charging zones.

[Page 27 of the report]

Recommendation 4 – Ensure inspection coverage of the charging scheme
The Commission and the NSAs should regularly conduct the inspections set out in the current legislation, 
covering in particular the eligibility of costs charged and their allocation between en-route and terminal 
charging zones.

[Pages 43, 44 of the report]

ECA Special Report No 18/2017, publicly available at: https://www.eca.europa.eu/en/Pages/DocItem.aspx?did=43538 

Page 4

May 2020

Strengthening the capacity of NSAs for air navigation services cost verifications

Project objectives, activities, deliverables and timeline
Project timeline

Verification programme 
finalised
•

Iterative loop to 
consolidate all feedback 
into the programme

Prepare for 
training and 
coaching sessions
• Organisation of the 
sessions in order to 
maximise NSA 
participation

Onsite trainings 
and assistance 
to NSAs*
• Deliver trainings 

and support

Pilot missions*
• Test the draft verification 
programme on existing 
ANSP information or by 
performing a verification 
mission at the ANSP 
together with EY

Interviews, meetings 
with NSAs
• Designate a contact 

person

• Meet or call with the EY 

team

• Exchange with EY on 
general and specific 
points regarding cost 
verification

Oct ‘19 - Mar ‘20
6 pilot missions

Nov ‘19 - Jun ‘20
Verification 
programme loop 
and finalisation

Apr ‘20 - Jun ‘20

Prepare for 
training and 
coaching sessions 
(in groups)

Jun ‘20 - Oct ‘20
Trainings (in 
groups)

*Activity impacted by the Covid-19 pandemic, delays incurred and 
changes are possible in order to deliver services remotely.

Oct ‘19 - Nov ‘19

Interviews, 
meetings with 
NSAs

Page 5

May 2020

Strengthening the capacity of NSAs for air navigation services cost verifications

Summary of project activities carried out so far
Interviews with the NSAs

Some key take-aways

• Cost eligibility checks are typically focused on determined costs ahead of a new RP; the NSAs consider the business 

assumptions of the ANSPs for the Performance Plans and generally verify some key areas such as cost allocation between 
charging zones;

• Very limited testing is done on the actual costs reported on a yearly basis;

• Additional testing for RP3 is envisaged for investments and for costs under Article 28 (‘unforeseen changes’);

•

•

•

Limited formalisation of the cost eligibility verification process; typically any findings are discussed directly with the ANSPs 
informally;

Internally developed checklists are in some cases available for the verification points considered relevant;

Limited availability and time-dedication of NSA staff to perform cost eligibility verifications.

Page 7

May 2020

Strengthening the capacity of NSAs for air navigation services cost verifications

Summary of project activities carried out so far
Pilot visits

Some key take-aways

• Ultimate objective should be that the NSAs verify ANSP compliance with the regulatory provisions in the area of cost-

eligibility in an efficient and effective manner;

• Beneficial that any proposed verification procedure is accompanied by guidance and, where available, best practices and 

examples;

• Common areas of concern as regards verifications for RP3 are new and existing investments, costs under Article 28 

(‘unforeseen changes’) and other revenues;

• Different national institutional set-up of the ANSPs exist, generating different areas of risk for the reported costs;

•

The ANSPs are providing information as requested, but the NSAs requests are different from country to country. 

Page 9

May 2020

Strengthening the capacity of NSAs for air navigation services cost verifications

Overview of deliverables at draft stage
Verification Programme

•

•

Two parts, one containing verification procedures for determined costs, one for actual costs

Verification Programme structure and organisation

Each part organised into three sections, considering the typical phases of a financial verification process:

• Planning - preparation phase prior to going on the spot to visit the ANSP, for setting the scope of the verification, 

collecting documentation and performing initial checks;

•

Execution – phase in which the verification procedures are carried out, normally during a visit at the ANSP;

• Conclusion – finalisation phase during which a verification report is prepared and any findings are shared and 

discussed with the ANSP;

• Programme timeline is different for determined and for actual costs; for determined costs the checks are foreseen to 

be done in preparation of the Performance Plans, while for actual costs, verifications are envisaged on an yearly basis, 
prior to the submission of the reporting tables in June;

• Programme is meant to be read in conjunction with the Training Material, which complements with explanations and 

guidance the steps in the Verification Programme;

Page 11

May 2020

Strengthening the capacity of NSAs for air navigation services cost verifications

Overview of deliverables at draft stage
Training Material

Training Material structure and organisation

• Document accompanying the Verification Programme, intended to provided guidance and explanations regarding the 

checks included in the Programme;

• Mirrors the structure of the Verification Programme, for easy reference

•

•

It is designed as Word document;

It includes several Annexes, such as an overview of cost allocation methods used by ANSPs;

• Will be, together with the Verification Programme, the basis for an e-training module for which access will be provided 

to the NSAs also after the finalisation of the project.

Page 14

May 2020

Strengthening the capacity of NSAs for air navigation services cost verifications

Activities under preparation
Coaching sessions

Verification Programme structure and organisation

• 10 coaching sessions for assistance in performing cost eligibility verifications, addressed to at least 30 NSAs.

• Due to the existing travel restrictions due to Covid-19, the sessions will likely be held remotely (further information 

regarding platform to follow).

•

•

•

The timing of the sessions is foreseen for the period Jun ’20 – Oct ’20, with the exact timing of the sessions to be 
further defined and communicated.

The agenda of the sessions will be designed around the Verification Programme and the Training Material.

Each session is currently foreseen to take 1 day; the length of the sessions will be re-assessed after the initial sessions 
and possible extended to 1,5 -2 days if needed.

• While we don’t envisage restrictions in the number of NSAs participating to a session, a number of maximum 3 or 4 

NSAs per session may be optimal for discussions and exchanges

Page 17

May 2020

Strengthening the capacity of NSAs for air navigation services cost verifications

Annex 12: NCP Performance WG 29: 29 October 2020 

 
 
 
 
 
Context and objective of the project

ECA report findings:

• NSAs do not regularly conduct inspections on important elements of the costs charged to users: eligibility, economy
and adequate cost allocation. […] the Commission’s guidance on cost allocation between en-route and terminal charging
zones was insufficient, leading to the risk of cross-subsidization between en-route and terminal navigation services. [Pages
43, 44 of the report]

• No regular inspections were carried out to provide assurance that only eligible costs are included in the charging
scheme nor on whether they were incurred in a cost-efficient manner and adequately allocated between en-route and
terminal charging zones. [Page 27 of the report]

• The Commission and the NSAs should regularly conduct the inspections set out in the current legislation, covering in
particular the eligibility of costs charged and their allocation between en-route and terminal charging zones.
[Recommendation 4 – Ensure inspection coverage of the charging scheme. Pages 43, 44 of the report]

Project Objective 

Support the development of a structured and systematic approach for NSAs regarding the 
verification of the determined and actual ANS costs 

Page 3

October 2020

Strengthening the capacity of NSAs for air navigation services cost verifications

Project Deliverables

Develop 
Verification 
Programme and 
its Toolkit

Develop 
monitoring 
process for 
the EC

Provide 10 
coaching 
sessions to 
NSAs

Provide 
assistance to 
NSAs for a 
period of 4 
months

1

2

3

4

5

6

7

Develop Training 
Material

Develop 
coaching 
programme 
and materials

Develop e-
learning 
module for 
NSAs

Page 4

October 2020

Strengthening the capacity of NSAs for air navigation services cost verifications

Overview of the milestones and deliverables

Interviews with NSAs

Pilot Missions

►

An instrument for information gathering regarding the existing 
cost-eligibility approaches at the level of the various NSAs for 
RP2, and any foreseen changes in the approach for RP3.

►

The structure of the questionnaire:

►

►

►

The NSA oversight programme: scope and main steps of 
such a programme, key procedures performed and 
frequency, specific verification areas such as cost 
allocations, verification of actual costs;

Provision of information by the ANSPs: if any obstacles 
exist to obtaining information, what is provided;

The structure of the NSA verification team: what kind of 
expertise is available in the NSA for these checks.

Interviews with 15 NSAs (Oct – Dec ’19) 

Cyprus

Italy

Finland

Slovenia

Croatia

UK

Sweden

Switzerland

Norway

Malta

Portugal

France

Spain

Romania

Czech Republic

► Meetings with the representatives of the NSAs that deal 

with cost eligibility verifications;

►

Discussions on our draft materials and feedback on the 
relevance and feasibility of the proposed verification 
procedures;

►

Countries that contributed to the Pilot Missions:

▪

Cyprus,

▪ Norway,

▪

▪

▪

▪

Ireland,

Croatia, and

Switzerland.

Poland provided 
insights on the draft 
versions of the 
Verification 
Programme and 
Training Material.

Page 5

October 2020

Strengthening the capacity of NSAs for air navigation services cost verifications

Overview of the milestones and deliverables

Verification Programme

•

Verification procedures as per type of costs:

•

•

determined costs and

actual costs.

• Verification procedures organised into three sections:

•

•

•

Planning - preparation phase prior to going on the spot to visit the 
ANSP, for setting the scope of the verification, collecting 
documentation and performing initial checks;

Execution – phase in which the verification procedures are carried 
out, normally during a visit at the ANSP;

Conclusion – finalisation phase during which a verification report is 
prepared and any findings are shared and discussed with the ANSP.

• Differences in verification timelines between determined and actual costs: 

•

•

determined costs the checks are foreseen to be done in preparation 
of the Performance Plans, while 

actual costs, verifications are envisaged on an yearly basis, prior to 
the submission of the reporting tables in June.

Page 6

October 2020

Strengthening the capacity of NSAs for air navigation services cost verifications

Overview of the milestones and deliverables

Verification Programme Toolkit

Planning of the verification

Execution

•

•

•

•

Tool 1 - Template letter for the announcement of the 
verification 

Tool 2 - Standard list of documents to be requested from 
the ANSP in view of the verification 

Tool 3 – Template for the pre-fieldwork questionnaire to be 
filled by the ANSP

Tool 6 – Template for documenting the Preliminary Risk 
Assessment and Sampling

•

•

Tool 5 – Template table for the verification of investment 
costs

Tool 7 – Operational checklist (Verification Programme in 
excel format) 

Conclusion and Reporting

•

Tool 4 – Template for the Factual Findings Report 
prepared by the NSAS following the verification (in 
Excel)

Page 7

October 2020

Strengthening the capacity of NSAs for air navigation services cost verifications

Overview of the milestones and deliverables

Training Material

•

•

•

•

Reflects the structure and references of the Verification 
Programme;

Easy to trace and follow each procedure to be performed as per 
the Verification Programme;

Both deliverables are meant to be read in conjunction with each 
other;

It aims to explain to the end users the rationale behind each 
procedure mentioned in the Verification Programme.

Page 8

October 2020

Strengthening the capacity of NSAs for air navigation services cost verifications

Overview of the milestones and deliverables

Coaching Programme

Assistance Period

► Coaching sessions period: 26 August -17 September
► Number of sessions delivered: 10
► Total number of:

► Participants = 56
► participating NSAs = 24 
► Remotely performed, via Zoom

► EY team: 

► EC Assurance
► Consulting – Finance
► Transaction Advisory Services
► Financial Accounting Advisory Services

► Assistance period: starting August 2020 
► Contact: ey.move@be.ey.com

► Calls, 
► Conference calls with other NSAs that share 

the same questions,

► Meetings with all the team members, etc.

► Issues related: 

► to the developed deliverables, or
► practical questions and cases.

► EY team: 

► EC Assurance
► Consulting – Finance
► Transaction Advisory Services
► Financial Accounting Advisory Services

Page 9

October 2020

Strengthening the capacity of NSAs for air navigation services cost verifications

Overview of the milestones and deliverables

e- Learning Module

► Module developed for NSAs staff
► Accessible online
► User-friendly
► Didactic and well structured
► Exercises in the form of tests (with explanation)
► Basis of this module are:

► Verification Programme and
► Training Material
► Finalised: November 2020

Page 10

October 2020

Strengthening the capacity of NSAs for air navigation services cost verifications

Overview of the milestones and deliverables

Monitoring Process for EC

• Assists the EC in gathering information from the NSAs on their 

performed cost eligibility verifications.

• Consists of two parts:

• A questionnaire sent out to the NSAs

• A dashboard (excel tool) that will gather NSAs detailed cost 

verification data for benchmarking and desk review from the EC 
side

Page 11

October 2020

Strengthening the capacity of NSAs for air navigation services cost verifications

GETTING IN TOUCH WITH THE EU 

In person  

    All over the European Union there are hundreds of Europe Direct information 

centres. You can find the address of the centre nearest you at: 
https://europa.eu/european-union/contact_en  

 On the phone or by email  

    Europe Direct is a service that answers your questions about the European 

Union. You can contact this service:  

    – by freephone: 00 800 6 7 8 9 10 11 (certain operators may charge for these 

calls),   

    – at the following standard number: +32 22999696, or   

    – by email via: https://europa.eu/european-union/contact_en  

FINDING INFORMATION ABOUT THE EU 

 Online 

    Information about the European Union in all the official languages of the EU is 

available on the Europa website at: https://europa.eu/european-
union/index_en  

EU publications  

    You can download or order free and priced EU publications from: 

https://publications.europa.eu/en/publications. Multiple copies of free 
publications may be obtained by contacting Europe Direct or your local 
information centre (see https://europa.eu/european-union/contact_en ).  

EU law and related documents  

    For access to legal information from the EU, including all EU law since 1952 in 
all the official language versions, go to EUR-Lex at: http://eur-lex.europa.eu  

Open data from the EU  

    The EU Open Data Portal ( http://data.europa.eu/euodp/en ) provides access 

to datasets from the EU. Data can be downloaded and reused for free, for both 
commercial and non-commercial purposes.  

 
 
 
 
  
 
 
 
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doi: 10.2832/012207