# C_2008311EN.01007901.xml

| 5.12.2008 | EN | Official Journal of the European Union | C 311/79 |
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5.12.2008

EN

Official Journal of the European Union

C 311/79

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REPORT

REPORT

on the annual accounts of the Executive Agency for Competitiveness and Innovation for the financial year 2007 together with the Agency's replies

(2008/C 311/12)

CONTENTS

| 1-2 | INTRODUCTION |
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1-2

| 3-6 | STATEMENT OF ASSURANCE |
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3-6

| 7-8 | OBSERVATIONS |
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7-8

Tables 1 to 4

The Agency's replies

The Agency's replies

INTRODUCTION

| 1. | The Executive Agency for Competitiveness and Innovation (hereinafter referred to as the Agency) is the former Intelligent Energy Executive Agency (IEEA). Its mandate and the duration thereof were altered following Commission Decision 2007/372/EC of 31 May 2007 amending (1) Decision 2004/20/EC of 23 December 2003 (2). The Agency was established for a limited period beginning on 1 January 2004 and now ending on 31 December 2015 with the aim of managing Community actions in the field of energy, entrepreneurship and innovation, and sustainable freight transport. |
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1.

The Executive Agency for Competitiveness and Innovation (hereinafter referred to as the Agency) is the former Intelligent Energy Executive Agency (IEEA). Its mandate and the duration thereof were altered following Commission Decision 2007/372/EC of 31 May 2007 amending (1) Decision 2004/20/EC of 23 December 2003 (2). The Agency was established for a limited period beginning on 1 January 2004 and now ending on 31 December 2015 with the aim of managing Community actions in the field of energy, entrepreneurship and innovation, and sustainable freight transport.

1

2

| 2. | Table 1 summarises the Agency's competences and activities. Key information taken from the financial statements drawn up by the Agency for the financial year 2007 is presented in Tables 2, 3 and 4. |
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2.

Table 1 summarises the Agency's competences and activities. Key information taken from the financial statements drawn up by the Agency for the financial year 2007 is presented in Tables 2, 3 and 4.

Table 1

Tables 2, 3 and 4

STATEMENT OF ASSURANCE

| 3. | This Statement is addressed to the European Parliament and the Council in accordance with Article 14 of Council Regulation (EC) No 58/2003 of 19 December 2002 (3); it was drawn up following an examination of the Agency's accounts, as required by Article 248 of the Treaty establishing the European Community. |
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3.

This Statement is addressed to the European Parliament and the Council in accordance with Article 14 of Council Regulation (EC) No 58/2003 of 19 December 2002 (3); it was drawn up following an examination of the Agency's accounts, as required by Article 248 of the Treaty establishing the European Community.

3

| 4. | The Agency's accounts for the financial year ended 31 December 2007 (4) were drawn up by its Director, pursuant to Article 14 of Council Regulation (EC) No 58/2003, and sent to the Court, which is required to give a statement of assurance on their reliability and on the legality and regularity of the underlying transactions. |
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4.

The Agency's accounts for the financial year ended 31 December 2007 (4) were drawn up by its Director, pursuant to Article 14 of Council Regulation (EC) No 58/2003, and sent to the Court, which is required to give a statement of assurance on their reliability and on the legality and regularity of the underlying transactions.

4

| 5. | The Court conducted its audit in accordance with the IFAC and ISSAI (5) International Auditing Standards and Codes of Ethics, insofar as these are applicable in the European Community context. The audit was planned and performed to obtain reasonable assurance that the accounts are reliable and that the underlying transactions are legal and regular. |
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5.

The Court conducted its audit in accordance with the IFAC and ISSAI (5) International Auditing Standards and Codes of Ethics, insofar as these are applicable in the European Community context. The audit was planned and performed to obtain reasonable assurance that the accounts are reliable and that the underlying transactions are legal and regular.

5

| 6. | The Court has thus obtained a reasonable basis for the Statement set out below:

  Reliability of the accountsThe Agency's accounts for the financial year ended 31 December 2007 are, in all material respects, reliable.Legality and regularity of the underlying transactionsThe transactions underlying the Agency's annual accounts, taken as a whole, are legal and regular.The observations which follow do not call the Court's Statement into question. |
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6.

The Court has thus obtained a reasonable basis for the Statement set out below:

Reliability of the accountsThe Agency's accounts for the financial year ended 31 December 2007 are, in all material respects, reliable.Legality and regularity of the underlying transactionsThe transactions underlying the Agency's annual accounts, taken as a whole, are legal and regular.The observations which follow do not call the Court's Statement into question.

Reliability of the accountsThe Agency's accounts for the financial year ended 31 December 2007 are, in all material respects, reliable.Legality and regularity of the underlying transactionsThe transactions underlying the Agency's annual accounts, taken as a whole, are legal and regular.The observations which follow do not call the Court's Statement into question.

OBSERVATIONS

| 7. | The Agency's final budget for 2007 amounted to 6,9 million euro as compared with 5,2 million euro allocated to the IEEA the previous year. Nearly 90 % of the budget, 6,2 million euro, was committed but 2,1 million euro were carried-over. A significant part of these carry-overs concerned goods and services which will, to a large extent, be delivered in 2008. This situation was at odds with the principle of annuality. Furthermore the amounts carried over were over-estimated by 0,3 million euro. |
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7.

The Agency's final budget for 2007 amounted to 6,9 million euro as compared with 5,2 million euro allocated to the IEEA the previous year. Nearly 90 % of the budget, 6,2 million euro, was committed but 2,1 million euro were carried-over. A significant part of these carry-overs concerned goods and services which will, to a large extent, be delivered in 2008. This situation was at odds with the principle of annuality. Furthermore the amounts carried over were over-estimated by 0,3 million euro.

| 8. | Due to the extension of the Agency's mandate, the initial budget was amended twice during the year (6). The Agency published the two amending budgets in the Official Journal only on 4 January 2008. The revised figures that were published were not disclosed separately for each amended budget. This situation was at odds with the principle of transparency. |
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8.

Due to the extension of the Agency's mandate, the initial budget was amended twice during the year (6). The Agency published the two amending budgets in the Official Journal only on 4 January 2008. The revised figures that were published were not disclosed separately for each amended budget. This situation was at odds with the principle of transparency.

6

This report was adopted by the Court of Auditors in Luxembourg at its meeting of 24 and 25 September 2008.

For the Court of Auditors

Vítor Manuel da SILVA CALDEIRA

President

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(1)  OJ L 140, 1.6.2007, p. 52.

1

(2)  OJ L 5, 9.1.2004, p. 85.

2

(3)  OJ L 11, 16.1.2003, p. 5.

3

(4)  These accounts were drawn up on 18 June 2008 and received by the Court on 3 July 2008.

4

(5)  International Federation of Accountants (IFAC) and International Standards of Supreme Audit Institutions (ISSAI).

5

(6)  The first amending budget was approved by the Steering Committee on 12 July 2007 and the second on 17 October 2007. The first amending budget followed a decision to increase the initial budget from 4,563 million euro to 9,910 million euro. The second amendment made in October aimed to reduce the budget to 6,937 million euro.

6

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Table 1

EACI — Executive Agency for Competitiveness and Innovation (Brussels)

| Areas of Community competence deriving from the Treaty | Competences of the Agency as defined in Commission Decision 2004/20/EC amended by Commission Decision 2007/372/EC | Governance | Resources available to the Agency in 2007

  (Data for 2006) | Activities and services provided in 2007 |
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| 1. | The Community policy on the environment shall contribute to preserving, protecting and improving the quality of the environment; protecting human health; prudent and rational utilisation of natural resources and promoting measures at international level to deal with regional or worldwide environmental problems. |

Areas of Community competence deriving from the Treaty

Competences of the Agency as defined in Commission Decision 2004/20/EC amended by Commission Decision 2007/372/EC

Governance

Resources available to the Agency in 2007

(Data for 2006)

Activities and services provided in 2007

1.

The Community policy on the environment shall contribute to preserving, protecting and improving the quality of the environment; protecting human health; prudent and rational utilisation of natural resources and promoting measures at international level to deal with regional or worldwide environmental problems.

(Article 174 of the Treaty)

| 2. | The Community policy on industry shall ensure that the conditions necessary for the competitiveness of the Community's industry exist by speeding up the adjustment of industry to structural changes, encouraging an environment favourable to initiative and to the development of and cooperation between undertakings, fostering better exploitation of the industrial potential of policies of innovation, research and technological development. The Member States shall consult each other in liaison with the Commission and, where necessary, shall coordinate their action. The Commission may take any useful initiative to promote such coordination. |
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2.

The Community policy on industry shall ensure that the conditions necessary for the competitiveness of the Community's industry exist by speeding up the adjustment of industry to structural changes, encouraging an environment favourable to initiative and to the development of and cooperation between undertakings, fostering better exploitation of the industrial potential of policies of innovation, research and technological development. The Member States shall consult each other in liaison with the Commission and, where necessary, shall coordinate their action. The Commission may take any useful initiative to promote such coordination.

(Article 157 of the Treaty)

Objectives

Within the framework of the Lisbon strategy for growth and jobs, the European Union has taken measures to promote and develop competitiveness and innovation.

These measures include the establishment of the Competitiveness and Innovation Framework Programme (CIP) 2007-2013 (Decision No 1639/2006/EC), notably with the Intelligent Energy — Europe (IEE) and Entrepreneurship and Innovation (EIP) programmes. They also include the Marco Polo programme (Regulation (EC) No 1692/2006).

The main objectives are to foster competitiveness of enterprises, in particular SMEs; to promote all forms of innovation, including eco-innovation; and to promote energy efficiency and new and renewable energy sources in all sectors, including transport.

Under these Community programmes, the Agency is responsible for implementing the tasks concerning Community aid, except for programme evaluation, monitoring of legislation and strategic studies, or any other action which comes under the exclusive competence of the European Commission.

Tasks

In the context of implementing the Community programmes for which the delegation of tasks from the Commission to the Agency was effective in 2007, notably the IEE I since 1 July 2005, IEE II since 26 July and EIP since 1 November 2007:

| — | To manage all phases in the lifetime of specific projects. |
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—

To manage all phases in the lifetime of specific projects.

| — | To adopt the instruments of budget implementation and to carry out, where the Commission has empowered it to do so, all the operations necessary to manage the Community programme and, in particular, those linked to the awarding of contracts and grants. |
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To adopt the instruments of budget implementation and to carry out, where the Commission has empowered it to do so, all the operations necessary to manage the Community programme and, in particular, those linked to the awarding of contracts and grants.

| — | To gather, analyse and pass on to the Commission all the information needed to guide the implementation of the programme. |
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To gather, analyse and pass on to the Commission all the information needed to guide the implementation of the programme.

| — | As regards the EIP, also to be-in charge of project management of the business and innovation support network. |
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As regards the EIP, also to be-in charge of project management of the business and innovation support network.

1.   Steering Committee

Comprises five members appointed by the European Commission. It adopts the Agency's annual work programme after approval by the European Commission. In addition, it adopts the administrative budget of the Agency and its annual activity report.

2.   Director

Appointed by the European Commission.

3.   External Audit

Court of Auditors.

4.   Discharge authority

Parliament acting on recommendation of the Council.

Final Budget

| (A) | 137,3 (53,2) million euro (100 % general budget of the European Union of which 63,7 million euro for IEE, and 73,5 million euro for EIP. The Agency implements the operational budget under the responsibility of the Commission). |
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(A)

137,3 (53,2) million euro (100 % general budget of the European Union of which 63,7 million euro for IEE, and 73,5 million euro for EIP. The Agency implements the operational budget under the responsibility of the Commission).

| (B) | 6,9 (5,2) million euro (100 % Community subsidy) for the administrative budget that the Agency implements autonomously. |
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(B)

6,9 (5,2) million euro (100 % Community subsidy) for the administrative budget that the Agency implements autonomously.

Staff at 31 December

35 (16) TA posts listed in the establishment plan of which 22 (16) were occupied.

Other posts:

Contract staff: 77 (30) posts planned of which 47 (25) were occupied.

Total staff at 31.12.2007: 69

Responsible for

Operational tasks: 54 (31)

Administrative tasks: 15 (10)

For the IEE programme:

| — | Monitored 425 on-going IEE projects (awarded under the annual Calls for proposals 2003-2006). 318 Reports were processed and payments made to beneficiaries accordingly. The Agency participated in 70 project meetings and organised 6 thematic project co-ordinator workshops with the participation of the parent DG and other related services. |
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Monitored 425 on-going IEE projects (awarded under the annual Calls for proposals 2003-2006). 318 Reports were processed and payments made to beneficiaries accordingly. The Agency participated in 70 project meetings and organised 6 thematic project co-ordinator workshops with the participation of the parent DG and other related services.

| — | The Agency selected 99 projects out of 296 proposals submitted under the 2006 call for proposals — some 2000 organisations from 30 countries took part. |
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The Agency selected 99 projects out of 296 proposals submitted under the 2006 call for proposals — some 2000 organisations from 30 countries took part.

| — | The Agency launched and promoted the 2007 call for proposals through the IEE website, electronic news alerts and a series of info days (700 participants at the European info Day and 3 000 participants at 45 national Info Days). 439 proposals were submitted, about 50 % more than for the previous Call. |
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The Agency launched and promoted the 2007 call for proposals through the IEE website, electronic news alerts and a series of info days (700 participants at the European info Day and 3 000 participants at 45 national Info Days). 439 proposals were submitted, about 50 % more than for the previous Call.

| — | The Agency created and disseminated information about the programme and its results through the IEE website (1,4 million page views and 0,5 million downloads), regular electronic News Alerts sent to 6 000 + contacts, new IEE project brochures (60 000 downloads), Intelligent Energy News Reviews (143 000 downloads) and 5 video reports featuring IEE project stories (at least 17 million TV viewers saw this material). |
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The Agency created and disseminated information about the programme and its results through the IEE website (1,4 million page views and 0,5 million downloads), regular electronic News Alerts sent to 6 000 + contacts, new IEE project brochures (60 000 downloads), Intelligent Energy News Reviews (143 000 downloads) and 5 video reports featuring IEE project stories (at least 17 million TV viewers saw this material).

| — | The Agency also answered 800+ enquiries from the public and potential applicants. |
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The Agency also answered 800+ enquiries from the public and potential applicants.

| — | Through workshops and briefings, the Agency fed back results from IEE-supported projects to the European Commission, notably on the proposed new Renewable Energy Framework Directive. The Agency also supported DG TREN to guide the implementation of the IEE programme and to prepare the priorities for the 2008 Call. Following an invitation from DG TREN, the Agency participated in a task-force charged with preparing a draft work programme. |
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Through workshops and briefings, the Agency fed back results from IEE-supported projects to the European Commission, notably on the proposed new Renewable Energy Framework Directive. The Agency also supported DG TREN to guide the implementation of the IEE programme and to prepare the priorities for the 2008 Call. Following an invitation from DG TREN, the Agency participated in a task-force charged with preparing a draft work programme.

For the EIP and Marco Polo programmes:

Apart from limited tasks related to budget implementation for the project management of the Enterprise Europe Network, the Agency did not acquire the capacity to assume full ‘autonomy’ for the network in 2007. Its main activities were related to recruitment and the preparation of the 2008 EACI work programme in consultation with the parent DGs.

Source: Information submitted by the Agency.

Table 2

Executive Agency for Competitiveness and Innovation (Brussels) — Implementation of the budget for the financial year 2007

| (1000 euro) |
| --- |
| Revenue | Expenditure |
| Source of revenue | Revenue entered in the final budget for the financial year | Revenue received | Allocation of expenditure | Appropriations under the final budget | Appropriations carried over from the previous financial year(s) |
| entered | committed | paid | carried over | cancelled | available | paid | cancelled |
| Community subsidies | 6 937 | 6 937 | Title I
  Staff | 3 853 | 3 501 | 3 108 | 199 | 352 | 118 | 43 | 75 |
| Other revenue | p.m. | 6 | Title II
  Administration | 1 875 | 1 451 | 548 | 903 | 423 | 67 | 21 | 46 |
| | | | Title III (1)

  Technical and administrative support | 1 210 | 1 208 | 206 | 1 002 | 2 | 797 | 623 | 174 |
| Total | 6 937 | 6 943 | Total | 6 937 | 6 160 | 3 862 | 2 104 | 777 | 982 | 687 | 295 |
| Source: Data supplied by the Agency. This table summarises the data provided by the Agency in its annual accounts. Revenue collected and payments are estimated on a cash basis. |

(1000 euro)

Revenue

Expenditure

Source of revenue

Revenue entered in the final budget for the financial year

Revenue received

Allocation of expenditure

Appropriations under the final budget

Appropriations carried over from the previous financial year(s)

entered

committed

paid

carried over

cancelled

available

paid

cancelled

Community subsidies

6 937

6 937

Title I

Staff

3 853

3 501

3 108

199

352

118

43

75

Other revenue

p.m.

6

Title II

Administration

1 875

1 451

548

903

423

67

21

46

Title III (1)

Technical and administrative support

1 210

1 208

206

1 002

2

797

623

174

Total

6 937

6 943

Total

6 937

6 160

3 862

2 104

777

982

687

295

Source: Data supplied by the Agency. This table summarises the data provided by the Agency in its annual accounts. Revenue collected and payments are estimated on a cash basis.

Table 3

Executive Agency for Competitiveness and Innovation (Brussels) — Economic outturn account for the financial year 2007 and 2006

| (1000 euro) |
| --- |
| | 2007 | 2006 |
| Operating revenue |
| Community subsidies | 5 667 | 5 057 |
| Other revenues | 13 | 105 |
| Total (a) | 5 680 | 5 162 |
| Operating expenses |
| Staff expenses | 3 157 | 2 616 |
| Fixed asset-related expenses | 48 | 38 |
| Other administrative expenses | 2 496 | 1 305 |
| Total (b) | 5 701 | 3 958 |
| Surplus/(deficit) from operating activities (c = a – b) | –21 | 1 204 |
| Charges from 2005 (d) | — | 273 |
| Economic result for the year (e = c – d) | –21 | 930 |
| Source: Data supplied by the Agency. This table summarises the data provided by the Agency in its annual accounts: these accounts are drawn up on an accrual basis. |

(1000 euro)

2007

2006

Operating revenue

Community subsidies

5 667

5 057

Other revenues

13

105

Total (a)

5 680

5 162

Operating expenses

Staff expenses

3 157

2 616

Fixed asset-related expenses

48

38

Other administrative expenses

2 496

1 305

Total (b)

5 701

3 958

Surplus/(deficit) from operating activities (c = a – b)

–21

1 204

Charges from 2005 (d)

—

273

Economic result for the year (e = c – d)

–21

930

Source: Data supplied by the Agency. This table summarises the data provided by the Agency in its annual accounts: these accounts are drawn up on an accrual basis.

Table 4

Executive Agency for Competitiveness and Innovation (Brussels) — Balance sheet at 31 December 2007 and 2006

| (1000 euro) |
| --- |
| | 2007 | 2006 |
| Non-current assets | 140 | 101 |
| Intangible fixed assets | 39 | 13 |
| Tangible fixed assets | 101 | 88 |
| Current assets | 3 426 | 1 604 |
| Short-term receivables | 46 | 95 |
| Cash and cash equivalents | 3 380 | 1 509 |
| Total assets | 3 566 | 1 705 |
| Current liabilities |
| Provisions for risks and charges | 127 | 48 |
| Accounts payable | 2 530 | 727 |
| Total liabilities | 2 656 | 775 |
| Net assets | 909 | 930 |
| Reserves |
| Result carried forward from the previous year | 930 | |
| Economic result for the year | –21 | 930 |
| Net Capital | 909 | 930 |
| NB: Variations in totals are due to the effects of rounding.

  Source: Data supplied by the Agency. This table summarises the data provided by the Agency in its annual accounts: these accounts are drawn up on an accrual basis. |

(1000 euro)

2007

2006

Non-current assets

140

101

Intangible fixed assets

39

13

Tangible fixed assets

101

88

Current assets

3 426

1 604

Short-term receivables

46

95

Cash and cash equivalents

3 380

1 509

Total assets

3 566

1 705

Current liabilities

Provisions for risks and charges

127

48

Accounts payable

2 530

727

Total liabilities

2 656

775

Net assets

909

930

Reserves

Result carried forward from the previous year

930

Economic result for the year

–21

930

Net Capital

909

930

NB: Variations in totals are due to the effects of rounding.

Source: Data supplied by the Agency. This table summarises the data provided by the Agency in its annual accounts: these accounts are drawn up on an accrual basis.

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(1)  Expenditure on experts meetings connected with the implementation of the projects.

Source: Data supplied by the Agency. This table summarises the data provided by the Agency in its annual accounts. Revenue collected and payments are estimated on a cash basis.

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THE AGENCY'S REPLIES

| 7. | Following last year's recommendation made by the Court, the EACI reviewed all commitments of the 2007 budget and all legal commitments signed in 2007 to examine the amounts to be carried over, for example, for on-going contracts with evaluators (780 975 euro) and for those relative to IT (363 728 euro). The average overestimation amounts to only 12 % of the carry over or 4 % of the 2007 budget, a margin that the EACI considers reasonable to cover for uncertainties.
  In 2008, to further reduce the overestimation, additional measures will be taken, such as assessing the situation of carry overs more frequently during the financial year. |
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7.

Following last year's recommendation made by the Court, the EACI reviewed all commitments of the 2007 budget and all legal commitments signed in 2007 to examine the amounts to be carried over, for example, for on-going contracts with evaluators (780 975 euro) and for those relative to IT (363 728 euro). The average overestimation amounts to only 12 % of the carry over or 4 % of the 2007 budget, a margin that the EACI considers reasonable to cover for uncertainties.

In 2008, to further reduce the overestimation, additional measures will be taken, such as assessing the situation of carry overs more frequently during the financial year.

| 8. | For the extension of EACI's tasks, the second amending budget for 2007 was adopted only three months after the first one. EACI considered it most cost effective to combine the publication of the two amending budgets and to publish them together with amending budgets of other agencies (sound financial management principle). |
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8.

For the extension of EACI's tasks, the second amending budget for 2007 was adopted only three months after the first one. EACI considered it most cost effective to combine the publication of the two amending budgets and to publish them together with amending budgets of other agencies (sound financial management principle).

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