# L_2016246EN.01042701.xml

| 14.9.2016 | EN | Official Journal of the European Union | L 246/427 |
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14.9.2016

EN

Official Journal of the European Union

L 246/427

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RESOLUTION (EU) 2016/1598 OF THE EUROPEAN PARLIAMENT

of 28 April 2016

with observations forming an integral part of the decision on discharge in respect of the implementation of the budget of the Artemis Joint Undertaking for the financial year 2014

THE EUROPEAN PARLIAMENT,

| — | having regard to its decision on discharge in respect of the implementation of the budget of the Artemis Joint Undertaking for the financial year 2014, |
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having regard to its decision on discharge in respect of the implementation of the budget of the Artemis Joint Undertaking for the financial year 2014,

| — | having regard to Rule 94 of and Annex V to its Rules of Procedure, |
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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 (A8-0092/2016), |
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having regard to the report of the Committee on Budgetary Control (A8-0092/2016),

| A. | whereas the Artemis Joint Undertaking (the ‘Joint Undertaking’) was set up in December 2007 for a period of 10 years to establish and implement a research agenda for the development of key technologies for embedded computing systems across different application areas in order to strengthen Union competitiveness and sustainability and to allow for the emergence of new markets and societal applications; |
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A.

whereas the Artemis Joint Undertaking (the ‘Joint Undertaking’) was set up in December 2007 for a period of 10 years to establish and implement a research agenda for the development of key technologies for embedded computing systems across different application areas in order to strengthen Union competitiveness and sustainability and to allow for the emergence of new markets and societal applications;

| B. | whereas the Joint Undertaking started to work autonomously in October 2009; |
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B.

whereas the Joint Undertaking started to work autonomously in October 2009;

| C. | whereas the maximum contribution for the period of 10 years from the Union to the Joint Undertaking is EUR 420 000 000, to be paid from the budget of the Seventh Research Framework Programme; |
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C.

whereas the maximum contribution for the period of 10 years from the Union to the Joint Undertaking is EUR 420 000 000, to be paid from the budget of the Seventh Research Framework Programme;

| D. | whereas financial contributions from Artemis Member States should amount in total to at least 1,8 times of the Union's financial contribution and the in-kind contribution of research and development organisations participating in projects over the duration of the Joint Undertaking is to be equal to or greater than the contribution of public authorities; |
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D.

whereas financial contributions from Artemis Member States should amount in total to at least 1,8 times of the Union's financial contribution and the in-kind contribution of research and development organisations participating in projects over the duration of the Joint Undertaking is to be equal to or greater than the contribution of public authorities;

| E. | whereas the Joint Undertaking and the ENIAC Joint Undertaking (‘ENIAC’) were merged to create the Electronic Components and Systems for European Leadership Joint Technology Initiative (‘ECSEL JTI’), which started its activity in June 2014 and will run for 10 years; |
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E.

whereas the Joint Undertaking and the ENIAC Joint Undertaking (‘ENIAC’) were merged to create the Electronic Components and Systems for European Leadership Joint Technology Initiative (‘ECSEL JTI’), which started its activity in June 2014 and will run for 10 years;

Budgetary and financial management

Budgetary and financial management

| 1. | Notes that the Joint Undertaking’s accounts for the period 1 January 2014 to 26 June 2014 present fairly, in all material respects, its financial position as at 26 June 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; |
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1.

Notes that the Joint Undertaking’s accounts for the period 1 January 2014 to 26 June 2014 present fairly, in all material respects, its financial position as at 26 June 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;

| 2. | Is concerned 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’), issued a qualified opinion regarding the regularity and legality of the underlying transactions on the grounds that the administrative agreements signed with the national funding authorities (‘NFAs’) regarding the audit of project cost claims do not include practical arrangements for ex-post audits; |
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2.

Is concerned 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’), issued a qualified opinion regarding the regularity and legality of the underlying transactions on the grounds that the administrative agreements signed with the national funding authorities (‘NFAs’) regarding the audit of project cost claims do not include practical arrangements for ex-post

| 3. | Notes from the Court's report that 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 rate error; notes also that ECSEL JTI confirmed that its extensive assessment of the national assurance systems concluded that they can provide reasonable protection of the financial interests of the Joint Undertaking’s members; |
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3.

Notes from the Court's report that 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

| 4. | Calls on ECSEL JTI, following the assessment of the procedures applied by the NFAs, to invite the NFAs to produce evidence that the implementation of the national procedures provides a reasonable assurance on the legality and regularity of transactions; |
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4.

Calls on ECSEL JTI, following the assessment of the procedures applied by the NFAs, to invite the NFAs to produce evidence that the implementation of the national procedures provides a reasonable assurance on the legality and regularity of transactions;

| 5. | 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 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 Article 287(3) of the Treaty on the Functioning of the European Union; moreover, invites the Court to use 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; |
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5.

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

| 6. | Takes note of the fact that, according to the Court’s report, the Joint Undertaking's final budget for the financial year 2014 included commitment appropriations of EUR 2 554 510 and payment appropriations of EUR 30 330 178 (operational); |
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6.

Takes note of the fact that, according to the Court’s report, the Joint Undertaking's final budget for the financial year 2014 included commitment appropriations of EUR 2 554 510 and payment appropriations of EUR 30 330 178 (operational);

| 7. | Notes that the initial budget for 2014 included only commitment appropriations for running costs amounting to EUR 2 200 000 and that the budget did not include commitment appropriations for operational activities; notes, furthermore, that the utilisation rate for administrative commitment appropriations was 38 %; observes that, according to the Court’s report, those appropriations are due to the merger of the Joint Undertaking and ENIAC in June 2014 and the fact that the budget was adopted for the whole of that year; |
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7.

Notes that the initial budget for 2014 included only commitment appropriations for running costs amounting to EUR 2 200 000 and that the budget did not include commitment appropriations for operational activities; notes, furthermore, that the utilisation rate for administrative commitment appropriations was 38 %; observes that, according to the Court’s report, those appropriations are due to the merger of the Joint Undertaking and ENIAC in June 2014 and the fact that the budget was adopted for the whole of that year;

| 8. | Reminds the Joint Undertaking of its obligation to respect the 1 to 1,8 ratio between the Union and the Member States’ contributions; notes with dissatisfaction that the amount for the appropriations committed for the calls for proposals was EUR 198 000 000, representing 48 % of the total budget; observes, however, that, according to the Court’s report, budget restrictions in the Member States impeded the commitment of the remaining part of the budget, representing 52 % of the total budget; |
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8.

Reminds the Joint Undertaking of its obligation to respect the 1 to 1,8 ratio between the Union and the Member States’ contributions; notes with dissatisfaction that the amount for the appropriations committed for the calls for proposals was EUR 198 000 000, representing 48 % of the total budget; observes, however, that, according to the Court’s report, budget restrictions in the Member States impeded the commitment of the remaining part of the budget, representing 52 % of the total budget;

| 9. | Notes the limited amount of information regarding in-kind and cash contribution; calls on the Court to include, in future reports, concrete provisions regarding the evaluation procedure and the level of in-kind and cash-paid contribution; |
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9.

Notes the limited amount of information regarding in-kind and cash contribution; calls on the Court to include, in future reports, concrete provisions regarding the evaluation procedure and the level of in-kind and cash-paid contribution;

Legal framework

Legal framework

| 10. | Is aware of the Joint Undertaking's merger in June 2014; nonetheless, is concerned that the Joint Undertaking did not amend its financial rules to comply with the new Financial Regulation (1) applicable to public-private partnership bodies that entered into force on 8 February 2014; |
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10.

Is aware of the Joint Undertaking's merger in June 2014; nonetheless, is concerned that the Joint Undertaking did not amend its financial rules to comply with the new Financial Regulation (1

Internal audit

Internal audit

| 11. | Notes that the Joint Undertaking did not amend its financial rules to include the provision of the Seventh Framework Programme Decision (2) referring to the powers of the Commission’s Internal Auditor; acknowledges that this was due to the merger with ENIAC to form ECSEL JTI; |
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11.

Notes that the Joint Undertaking did not amend its financial rules to include the provision of the Seventh Framework Programme Decision (2

Internal control

Internal control

| 12. | Notes with concern that the Joint Undertaking took no action regarding certain internal control standards relating to information and financial reporting: in particular, evaluation of activities, assessment of the internal control systems and internal audit capability (‘IAC’); observes that this was due to the impending merger; asks ECSEL JTI to inform the discharge authority of the measures taken and the advancements attained in this regard; |
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12.

Notes with concern that the Joint Undertaking took no action regarding certain internal control standards relating to information and financial reporting: in particular, evaluation of activities, assessment of the internal control systems and internal audit capability (‘IAC’); observes that this was due to the impending merger; asks ECSEL JTI to inform the discharge authority of the measures taken and the advancements attained in this regard;

| 13. | Notes with satisfaction that although the function of IAC was not set up at the time of the merger, it was established shortly thereafter, on 4 July 2014; |
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13.

Notes with satisfaction that although the function of IAC was not set up at the time of the merger, it was established shortly thereafter, on 4 July 2014;

Prevention and management of conflicts of interest and transparency

Prevention and management of conflicts of interest and transparency

| 14. | Notes with concern from the Court's report that the Joint Undertaking did not have in place a comprehensive written procedure to deal with conflicts of interest at the time of the audit; acknowledges that ECSEL JTI’s Governing Board adopted a comprehensive policy to prevent conflicts of interest; |
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14.

Notes with concern from the Court's report that the Joint Undertaking did not have in place a comprehensive written procedure to deal with conflicts of interest at the time of the audit; acknowledges that ECSEL JTI’s Governing Board adopted a comprehensive policy to prevent conflicts of interest;

| 15. | Takes note of the fact that the 2016 Court’s work programme includes a special report on performance audit of Joint Undertakings. |
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15.

Takes note of the fact that the 2016 Court’s work programme includes a special report on performance audit of Joint Undertakings.

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(1)  Commission Delegated Regulation (EU) No 110/2014 of 30 September 2013 on the model financial regulation for public-private partnership bodies referred to in Article 209 of Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council (OJ L 38, 7.2.2014, p. 2).

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(2)  Decision No 1982/2006/EC of the European Parliament and of the Council of 18 December 2006 concerning the Seventh Framework Programme of the European Community for research, technological development and demonstration activities (2007-2013) (OJ L 412, 30.12.2006, p. 1).

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