Address https://gelex.eu/eli/EU/act/oj/L/2016/1586@2016-04-28/en

Contents

1. Preamble
2. A.
3. B.
4. C.
5. D.
6. E.
7. F.
8. G.

THE EUROPEAN PARLIAMENT,

having regard to its decision on discharge in respect of the implementation of the budget of the ECSEL Joint Undertaking (formerly the ENIAC Joint Undertaking and the Artemis Joint Undertaking) for the financial year 2014,

having regard to Rule 94 of and Annex V to its Rules of Procedure,

having regard to the report of the Committee on Budgetary Control (A8-0119/2016),

A.

whereas on 7 June 2014 the ECSEL Joint Undertaking (the Joint Undertaking) was established as a joint undertaking within the meaning of Article 187 of the Treaty on the Functioning of the European Union for the purpose of implementing the Joint Technology Initiative on Electronic Components and Systems for European Leadership for the period until 31 December 2024;

B.

whereas the public-private partnership on electronic components and systems should combine the financial and technical means that are essential to master the complexity of the ever escalating pace of innovation in that area;

C.

whereas, by Council Regulation (EU) No 561/2014, the Joint Undertaking was established to replace and succeed the ENIAC Joint Undertaking (ENIAC) and the Artemis Joint Undertaking (Artemis);

D.

whereas the members of the Joint Undertaking are the Union, the Member States, and the countries associated to Horizon 2020 on a voluntary basis, private member associations representing their constituent companies and other organisations active in the field of electronic components and systems in the Union; whereas the Joint Undertaking should be open to new members;

E.

whereas in assessing the overall impact of the Joint Undertaking, investments from legal entities other than the Union and the States participating in the Joint Undertaking contributing to its objectives should be taken into account; whereas those overall investments are expected to amount to at least EUR 2340000000;

F.

whereas the contributions to the Joint Undertaking envisaged for the entire period of Horizon 2020 are EUR 1184874000 from the Union, EUR 1170000000 from the Joint Undertaking’s participating states and EUR 1657500000 from private members;

G.

whereas the transition from ENIAC and Artemis to the Joint Undertaking should be aligned and synchronised with the transition from the Seventh Framework Programme (FP7) to Horizon 2020 to ensure the optimal use of the funding available for research;

Notes that the Court of Auditors (the Court), in its report on the Joint Undertaking’s annual accounts for the financial year 2014 (the Court’s report) makes too many general, to the detriment of viable, specific, remarks; therefore calls for an audit with a more accentuated focus on the annual financial performance on the implementation status of multiannual projects, including a clear presentation of the implementation of the budget for the respective year and those for previous years, together with their results and implementation; Notes that the information provided in the Joint Undertaking’s Report on Budgetary and Financial Management for the financial year 2014 lacked harmonisation and was often incomplete; notes that guidance is required from the Commission as to the nature and content of the report; Takes note of the fact that the Court’s 2016 work programme includes a special report on performance audit of joint undertakings; Acknowledges the fact that, according to the Court's report, the Joint Undertaking's accounts for the period 27 June to 31 December 2014 present fairly, in all material respects, its financial position as at 31 December 2014 and the results of its operations and cash flows for the period then ended, in accordance with the provisions of its financial rules and the accounting rules adopted by the Commission's accounting officer; Notes that the Joint Undertaking's final budget for the financial year 2014 included commitment appropriations of EUR 160114500 and payment appropriation of EUR 104144250; Regrets the absence of information regarding in-kind and cash contribution; calls on the Court to include, in future reports, provisions regarding the evaluation procedure and level of in-kind and cash-paid contribution, separately, for FP7 and Horizon 2020; Notes that the Joint Undertaking’s programmes funded under FP7 are ongoing; encourages the Joint Undertaking to conduct its budget planning carefully, taking into due account the parallel process; Acknowledges the fact that, according to the Joint Undertaking’s annual accounts for the financial year 2014, practical arrangements have been put in place in order to implement the obligations provided for in the Joint Undertaking’s administrative agreements by the introduction of the specific reporting form end-of-project certificate; notes that the Joint Undertaking has introduced such a form to the National Funding Authorities (NFAs); Acknowledges the fact that the Joint Undertaking elaborated in 2014 a checklist including the essential elements of an assurance system and engaged in intensive exchanges with the NFAs to assess the assurance provided by the national systems; notes that the assessment has been completed for five contributors, representing 54,2 % of the grants awarded by the Joint Undertaking and that one more contributor, representing 18,9 % of the grants awarded by the Joint Undertaking, has been reviewed, although update on it was pending at the time of the audit; Notes that the Joint Undertaking estimated the residual error rate at 0,73 %; observes, however, that the Joint Undertaking failed to convey how many transactions were involved to calculate such a rate and therefore, asks the Joint Undertaking to supply that information; Points out that, despite all the above, the Court has issued a qualified opinion on the legality and regularity of the transactions underlying the annual accounts on the grounds that the administrative agreements signed with the NFAs regarding the audit of project cost claims do not include practical arrangements for ex post audits; Notes that, according to the Court's report, the Joint Undertaking did not assess the quality of the audit reports received from the NFAs concerning the costs relating to completed projects; notes, furthermore, that, after an assessment of the audit strategies of three of the NFAs, it was not possible to conclude whether ex post audits are functioning effectively due to different methodologies used by NFAs which did not allow the Joint Undertaking to calculate either a weighted error rate or a residual error rate; notes that this technical difficulty does not, however, result in the Court’s negative opinion, but understandably prevents it from confirming the legality and regularity of the transactions without formulating a reservation; notes also that the Joint Undertaking has confirmed that its extensive assessment of the national assurance systems concluded that they can provide a reasonable protection of the financial interests of its members; Notes that the Joint Undertaking is of the opinion that national procedures provide reasonable assurance with regard to the legality and regularity of the underlying transactions in spite of several reports from different Union institutions, including the discharge authority; calls on the Joint Undertaking, following the assessment of the procedures applied by the NFAs, to invite the NFAs to produce a written statement that the implementation of the national procedures provides a reasonable assurance on the legality and regularity of transactions; Notes that the Court's report includes a qualified opinion which is based on the lack of information necessary to calculate either a weighted error rate or a residual error rate following the ex post audits by the NFAs; invites the Court to collect additional and necessary documents and information, which the Joint Undertaking is not empowered to require, from the national audit bodies or the national competent departments in accordance with the provisions of Article 287(3) of the Treaty on the Functioning of the European Union; moreover, invites the Court to use those additional documents and that additional information as an alternative way to justify its opinion and to report to the discharge authority on its assessment of those additional elements; Notes that a substantial amending budget increasing commitment appropriations to EUR 158200000 was implemented by the governing board by the end of the financial year; invites the Joint Undertaking to provide the discharge authority with detailed information on the criteria followed to execute such significant financial decision; Acknowledges the fact that the implementation rate for operational commitment appropriations was 99,7 %; notes, however, that the commitment appropriations were signed at a global level and, therefore, no corresponding grant agreements had been signed yet; considers that, in the absence of a clear separation between FP7 and Horizon 2020 implementation-related information, those indicators do not ensure a real evaluation of performance; calls on the Court to include in future reports information regarding the execution of the budget under of FP7 and separately under Horizon 2020; asks the Joint Undertaking to inform the discharge authority about the state of play and any progress made in that regard; Notes that no clear separation was made between FP7 and Horizon 2020 implementation-related information due to the fact that no contracts relating to the implementation of Horizon 2020 were signed by the end of year 2014 and thus no payments have been made; asks the Court to provide separate information on budgetary implementation for FP7 and Horizon 2020 in its report for 2015; calls on the Joint Undertaking to provide that information in its Report on Budgetary and Financial Management for 2015; Supports the Joint Undertaking's initiative to collaborate with smaller contributors and to extend the coverage of grants assessment in order to include 90 % of the grants awarded; calls on the Joint Undertaking to continue its assessment in order to approach the 100 % coverage of the total grants and inform the discharge authority on the advancements realised in the financial year of 2015 and 2016; Points out that the Joint Undertaking took over the activities of ENIAC and Artemis in June 2014; notes that there is not enough clear information regarding the status of implementation of the Joint Undertaking’s projects (level of payments, payments plan for the next years); Welcomes the Joint Undertaking assessment of the level of in-kind contributions; notes, however, the lack of sufficient information to be able to ascertain the accomplishment of the members’ task with regards to FP7; Reiterates its demand to the Court to present a complete and appropriate financial assessment of rights and obligations of the Joint Undertaking for the period until the Joint Undertaking started its activity; Takes note of the fact that the Commission's internal audit service performed a risk assessment of the Joint Undertaking; points out that four items have been rated as high impact/high risk; Requests that the Joint Undertaking provide the discharge authority with detailed information regarding risk management of indirect costs about concrete measures taken in the light of work with the Commission to find alternative mechanisms, as well as further possibilities to converge in accounting procedures in order to avoid the potential risk of double or triple book-keeping and reporting and the financial burden that this may cause; Asks the Joint Undertaking to provide an update to the discharge authority on the adoption and implementation of the anti-fraud strategy; Acknowledges the fact that the Joint Undertaking will implement an auditing strategy aligned with the standard Horizon 2020 procedures; requests that the Joint Undertaking submit a report to the discharge authority detailing the criteria followed to execute such a strategy as well as the grounds for and an assessment of the effectiveness of such a strategy; Notes that the Joint Undertaking’s governing board has established an internal audit capability and has approved the relevant internal charter; notes, furthermore, that, according to the Joint Undertaking’s annual accounts for the financial year 2014, two internal control standards have not been fully implemented yet and that some procedures are still to be updated; Notes with satisfaction that a comprehensive policy to prevent conflicts of interest has been adopted by the Joint Undertaking; recalls, however, that the declarations of conflict of interest of the member of the governing board have not been made publicly available; Welcomes the advancements realised by the Joint Undertaking in monitoring and reporting; notes, however, that more effort should be made to collaborate more closely with the Commission to meet the requirements of Horizon 2020 and to better contribute to the dissemination of FP7 results; notes, furthermore, that the Joint Undertaking should increase the systematic dissemination of the research results; requests that the Joint Undertaking take the necessary measures to comply with the above in the future and inform the discharge authority in that regard; Welcomes the publication by the Joint Undertaking of the Report on the Socio-Economic Impact of ECSEL Joint Undertaking activities; Recalls that the discharge authority has requested the Court to draw up a special report on the capacity of the joint undertakings, together with their private partners, to ensure added value and efficient execution of Union research, technological development and demonstration programmes.

Versions

1. 2016-04-28