# L_2017252EN.01034701.xml

| 29.9.2017 | EN | Official Journal of the European Union | L 252/347 |
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29.9.2017

EN

Official Journal of the European Union

L 252/347

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RESOLUTION (EU) 2017/1736 OF THE EUROPEAN PARLIAMENT

of 27 April 2017

with observations forming an integral part of the decision on discharge in respect of the implementation of the budget for the ECSEL Joint Undertaking for the financial year 2015

THE EUROPEAN PARLIAMENT,

| — | having regard to its decision on discharge in respect of the implementation of the budget of the ECSEL Joint Undertaking for the financial year 2015, |
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having regard to its decision on discharge in respect of the implementation of the budget of the ECSEL Joint Undertaking for the financial year 2015,

| — | having regard to Rule 94 of and Annex IV to its Rules of Procedure, |
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having regard to Rule 94 of and Annex IV to its Rules of Procedure,

| — | having regard to the report of the Committee on Budgetary Control (A8-0113/2017), |
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having regard to the report of the Committee on Budgetary Control (A8-0113/2017),

| A. | whereas the ECSEL Joint Undertaking on Electronic Components and Systems for European Leadership (the ‘Joint Undertaking’) was established on 7 June 2014 within the meaning of Article 187 of the Treaty on the Functioning of the European Union for the implementation of the Joint Technology Initiative on ‘Electronic Components and Systems for European Leadership’ (‘ECSEL’) for a period up to 31 December 2024; |
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A.

whereas the ECSEL Joint Undertaking on Electronic Components and Systems for European Leadership (the ‘Joint Undertaking’) was established on 7 June 2014 within the meaning of Article 187 of the Treaty on the Functioning of the European Union for the implementation of the Joint Technology Initiative on ‘Electronic Components and Systems for European Leadership’ (‘ECSEL’) for a period up to 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 this area; |
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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 this area;

| C. | whereas the Joint Undertaking was established by Council Regulation (EU) No 561/2014 in June 2014 to replace and succeed the joint undertakings ENIAC and ARTEMIS; |
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C.

whereas the Joint Undertaking was established by Council Regulation (EU) No 561/2014 in June 2014 to replace and succeed the joint undertakings ENIAC and ARTEMIS;

| D. | whereas the members of the Joint Undertaking are the Union, the Member States and countries associated, on a voluntary basis, with Horizon 2020 (‘Participating States’), and private member associations (‘Private Members’) that represent 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; |
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D.

whereas the members of the Joint Undertaking are the Union, the Member States and countries associated, on a voluntary basis, with Horizon 2020 (‘Participating States’), and private member associations (‘Private Members’) that represent 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 all legal entities other than the Union and the Participating States contributing to the objectives of the Joint Undertaking should be taken into account; whereas those overall investments are expected to amount to at least EUR 2 340 000 000; |
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E.

whereas in assessing the overall impact of the Joint Undertaking, investments from all legal entities other than the Union and the Participating States contributing to the objectives of the Joint Undertaking should be taken into account; whereas those overall investments are expected to amount to at least EUR 2 340 000 000;

| F. | whereas the contributions to the Joint Undertaking envisaged for the entire period of Horizon 2020 amount to EUR 1 184 874 000 from the Union, EUR 1 170 000 000 from the Participating States and EUR 1 657 500 000 from Private Members; |
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F.

whereas the contributions to the Joint Undertaking envisaged for the entire period of Horizon 2020 amount to EUR 1 184 874 000 from the Union, EUR 1 170 000 000 from the Participating States and EUR 1 657 500 000 from Private Members;

| G. | whereas the transition from the joint undertakings ENIAC and ARTEMIS to the Joint Undertaking should be aligned and synchronised with the transition from the Seventh Framework Programme to Horizon 2020 in order to ensure an optimal use of the funding available for research; |
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G.

whereas the transition from the joint undertakings ENIAC and ARTEMIS to the Joint Undertaking should be aligned and synchronised with the transition from the Seventh Framework Programme to Horizon 2020 in order to ensure an optimal use of the funding available for research;

Follow-up to the 2014 discharge

Follow-up to the 2014 discharge

| 1. | Notes that the Joint Undertaking published specific performance indicators in its annual activity report as required by Horizon 2020; |
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1.

Notes that the Joint Undertaking published specific performance indicators in its annual activity report as required by Horizon 2020;

Budgetary and financial management

Budgetary and financial management

| 2. | Notes that the Court of Auditors (the ‘Court’), in its report on the Joint Undertaking's annual accounts for the financial year 2015 (the ‘Court's report’), finds that the Joint Undertaking's annual accounts present fairly, in all material respects, its financial position as at 31 December 2015 and the results of its operations and cash flows for the year then ended, in accordance with its financial rules and the accounting rules adopted by the Commission's accounting officer; |
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2.

Notes that the Court of Auditors (the ‘Court’), in its report on the Joint Undertaking's annual accounts for the financial year 2015 (the ‘Court's report’), finds that the Joint Undertaking's annual accounts present fairly, in all material respects, its financial position as at 31 December 2015 and the results of its operations and cash flows for the year then ended, in accordance with its financial rules and the accounting rules adopted by the Commission's accounting officer;

| 3. | Notes that the Joint Undertaking's final budget for the financial year 2015 included commitment appropriations of EUR 108 500 000 and payment appropriations of EUR 168 000 000; notes, furthermore, that budget monitoring efforts during the financial year 2015 resulted in a budget implementation rate of 100 % and that the payment appropriations execution rate was at 90,95 %; |
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3.

Notes that the Joint Undertaking's final budget for the financial year 2015 included commitment appropriations of EUR 108 500 000 and payment appropriations of EUR 168 000 000; notes, furthermore, that budget monitoring efforts during the financial year 2015 resulted in a budget implementation rate of 100 % and that the payment appropriations execution rate was at 90,95 %;

| 4. | Regrets that the Court has, once again, issued only a qualified opinion on the legality and regularity of the transactions underlying the annual accounts on the grounds of the administrative agreements signed with the national funding authorities (NFAs) regarding ex-post audits of project payments and the fact that the Joint Undertaking audit strategies relied heavily on the NFAs; |
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4.

Regrets that the Court has, once again, issued only a qualified opinion on the legality and regularity of the transactions underlying the annual accounts on the grounds of the administrative agreements signed with the national funding authorities (NFAs) regarding ex-post

| 5. | Expresses concern that the Court's report finds that it was impossible for the Joint Undertaking to calculate a reliable weighted error rate or a residual error rate because of the significant variation in the methodologies and procedures used by the NFAs and thus the Court could not conclude whether ex-post audits were functioning effectively and whether this key control provided sufficient assurance as to the legality and regularity of the underlying transactions for Seventh Framework Programme projects; recognises that the issue is related to the legal framework of the Seventh Framework Programme and thus not caused by the Joint Undertaking's performance; |
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5.

Expresses concern that the Court's report finds that it was impossible for the Joint Undertaking to calculate a reliable weighted error rate or a residual error rate because of the significant variation in the methodologies and procedures used by the NFAs and thus the Court could not conclude whether ex-post

| 6. | Notes that the Joint Undertaking conducted an extensive assessment of the national assurance systems and concluded that the audit reports can provide reasonable protection of the financial interests of its members; notes, furthermore, that, as a reaction to the postponement of the discharge decision in 2014, the Joint Undertaking asked the NFAs to provide written declarations that the implementation of their national procedures provided for a reasonable assurance of the legality and regularity of transactions; the discharge authority took the declarations of the NFAs into account during the postponed discharge process and granted discharge to the Joint Undertaking in October 2016; recognises that the Joint Undertaking, following its good example from the previous year, asked the NFAs in January 2017 to provide similar written declarations to submit to the discharge authority; |
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6.

Notes that the Joint Undertaking conducted an extensive assessment of the national assurance systems and concluded that the audit reports can provide reasonable protection of the financial interests of its members; notes, furthermore, that, as a reaction to the postponement of the discharge decision in 2014, the Joint Undertaking asked the NFAs to provide written declarations that the implementation of their national procedures provided for a reasonable assurance of the legality and regularity of transactions; the discharge authority took the declarations of the NFAs into account during the postponed discharge process and granted discharge to the Joint Undertaking in October 2016; recognises that the Joint Undertaking, following its good example from the previous year, asked the NFAs in January 2017 to provide similar written declarations to submit to the discharge authority;

| 7. | Highlights the fact that the issue regarding the variation in the methodologies and procedures used by the NFAs is no longer relevant for the implementation of Horizon 2020 projects; |
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7.

Highlights the fact that the issue regarding the variation in the methodologies and procedures used by the NFAs is no longer relevant for the implementation of Horizon 2020 projects;

| 8. | Notes that by the end of 2015 the Joint Undertaking's payments, which were to be funded from the Seventh Framework Programme, amounted to EUR 293 000 000 (47 % of its operational commitments); |
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8.

Notes that by the end of 2015 the Joint Undertaking's payments, which were to be funded from the Seventh Framework Programme, amounted to EUR 293 000 000 (47 % of its operational commitments);

| 9. | Notes that out of the total amount of contributions to cover operational and administrative costs funded by the Union under Horizon 2020, the Joint Undertaking made commitments amounting to EUR 257 500 000 (22 % of the total envelope) and payments amounting to EUR 56 000 000 (22 % of the commitments); notes that the cash contribution by the Union to the administrative costs of the Joint Undertaking amounted to EUR 1 400 000; |
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9.

Notes that out of the total amount of contributions to cover operational and administrative costs funded by the Union under Horizon 2020, the Joint Undertaking made commitments amounting to EUR 257 500 000 (22 % of the total envelope) and payments amounting to EUR 56 000 000 (22 % of the commitments); notes that the cash contribution by the Union to the administrative costs of the Joint Undertaking amounted to EUR 1 400 000;

| 10. | Regrets that out of the 28 Participating States which were required to make a financial contribution to the operational costs of the Joint Undertaking proportional to the Union's financial contribution only 11 declared payments, totalling EUR 15 800 000; |
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10.

Regrets that out of the 28 Participating States which were required to make a financial contribution to the operational costs of the Joint Undertaking proportional to the Union's financial contribution only 11 declared payments, totalling EUR 15 800 000;

| 11. | Notes that the Private Members were expected to make in-kind contributions amounting to at least EUR 1 657 500 000 and that the estimated amount of the in-kind contributions of the Private Members for 2015 was EUR 58 700 000; accepts in this respect that the Commission issued guidelines in 2016 allowing the financial contribution to the projects to be determined at the end of the project when the Private Members can calculate their respective in-kind contributions; notes furthermore that at the end of 2015 the contributions in cash by the private members to the administrative costs of the Joint Undertaking amounted to EUR 3 600 000; |
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11.

Notes that the Private Members were expected to make in-kind contributions amounting to at least EUR 1 657 500 000 and that the estimated amount of the in-kind contributions of the Private Members for 2015 was EUR 58 700 000; accepts in this respect that the Commission issued guidelines in 2016 allowing the financial contribution to the projects to be determined at the end of the project when the Private Members can calculate their respective in-kind contributions; notes furthermore that at the end of 2015 the contributions in cash by the private members to the administrative costs of the Joint Undertaking amounted to EUR 3 600 000;

Key controls and supervisory systems

Key controls and supervisory systems

| 12. | Notes that ex-ante control procedures based on financial and operational desk reviews were set up by the Joint Undertaking; notes that those checks are key tools for assessing the legality and regularity of operations and that the Joint Undertaking was developing ex-post audits of beneficiaries of Horizon 2020 funding; |
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12.

Notes that ex-ante

ex-post

Calls for proposals

Calls for proposals

| 13. | Notes that the Joint Undertaking launched two calls for proposals inviting research and innovation actions and innovation actions and that in 2015 it received 76 eligible project outlines and 62 eligible full project proposals (compared to 48 in 2014); notes, furthermore, that in 2015 the success rates were 13 % for research and innovation actions (compared to 18 % in 2014) and 33 % for the innovation actions (compared to 43 % in 2014); notes that the lower success rate in 2015 was due to the higher number of projects submitted; |
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13.

Notes that the Joint Undertaking launched two calls for proposals inviting research and innovation actions and innovation actions and that in 2015 it received 76 eligible project outlines and 62 eligible full project proposals (compared to 48 in 2014); notes, furthermore, that in 2015 the success rates were 13 % for research and innovation actions (compared to 18 % in 2014) and 33 % for the innovation actions (compared to 43 % in 2014); notes that the lower success rate in 2015 was due to the higher number of projects submitted;

| 14. | Notes that the project portfolio in 2015 comprised 25 projects of the Joint Undertaking, of which 13 were selected in 2015, and 60 legacy projects (the joint undertakings ARTEMIS and ENIAC); notes, furthermore, that the participation of small and medium-sized undertakings was 32 % in the Joint Undertaking's calls; |
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14.

Notes that the project portfolio in 2015 comprised 25 projects of the Joint Undertaking, of which 13 were selected in 2015, and 60 legacy projects (the joint undertakings ARTEMIS and ENIAC); notes, furthermore, that the participation of small and medium-sized undertakings was 32 % in the Joint Undertaking's calls;

Legal framework

Legal framework

| 15. | Notes that the main decisions adopted by the Joint Undertaking's governing board included decisions on an anti-fraud strategy, the Staff Regulations and a comprehensive conflict of interests policy; |
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15.

Notes that the main decisions adopted by the Joint Undertaking's governing board included decisions on an anti-fraud strategy, the Staff Regulations and a comprehensive conflict of interests policy;

Internal audit

Internal audit

| 16. | Notes that in 2015 the internal audit services performed a risk assessment of the Joint Undertaking, and is concerned that as a result it identified two ‘high impact/high risk areas’ in the Joint Undertaking's administrative processes (namely, its risk management and anti-fraud strategy) and two ‘high risk/high impact area’ in the Joint Undertaking's operational processes (namely, ex-post controls and the coordination/implementation of CSC tools); welcomes, however, the fact that the Joint Undertaking has already mitigated, and is making further efforts to mitigate, those risks; |
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16.

Notes that in 2015 the internal audit services performed a risk assessment of the Joint Undertaking, and is concerned that as a result it identified two ‘high impact/high risk areas’ in the Joint Undertaking's administrative processes (namely, its risk management and anti-fraud strategy) and two ‘high risk/high impact area’ in the Joint Undertaking's operational processes (namely, ex-post

Anti-fraud Strategy

Anti-fraud Strategy

| 17. | Notes that, according to the Court's report, the Joint Undertaking's financial rules provide for the Joint Undertaking's budget to be implemented in compliance with effective and efficient internal control standards, including prevention, detection, correction and follow-up of fraud and irregularities; |
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17.

Notes that, according to the Court's report, the Joint Undertaking's financial rules provide for the Joint Undertaking's budget to be implemented in compliance with effective and efficient internal control standards, including prevention, detection, correction and follow-up of fraud and irregularities;

| 18. | Notes that in 2016 the Joint Undertaking pledged to continue pursuing actions to improve the internal control environment, as laid down in the internal fraud prevention strategy; |
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18.

Notes that in 2016 the Joint Undertaking pledged to continue pursuing actions to improve the internal control environment, as laid down in the internal fraud prevention strategy;

| 19. | Acknowledges that the Joint Undertaking's governing board endorsed the updated Common Research Anti-Fraud Strategy in May 2015 and, based on that strategy, adopted an anti-fraud implementation plan in 2016; notes, furthermore, that the Joint Undertaking updated its ex post control strategy in December 2016; |
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19.

Acknowledges that the Joint Undertaking's governing board endorsed the updated Common Research Anti-Fraud Strategy in May 2015 and, based on that strategy, adopted an anti-fraud implementation plan in 2016; notes, furthermore, that the Joint Undertaking updated its ex post

| 20. | Notes that the Court's report states that internal control procedures, which provided a reasonable assurance of the prevention of fraud and irregularities (including ex-ante checks on payments, conflict of interest policy and ex-post audits of beneficiaries of grants), were already in place in the Joint Undertaking; |
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20.

Notes that the Court's report states that internal control procedures, which provided a reasonable assurance of the prevention of fraud and irregularities (including ex-ante

ex-post

Other

Other

| 21. | Calls on the Commission to ensure the direct involvement of the Joint Undertaking in the process of the Horizon 2020 mid-term review with regard to the further simplification and harmonisation of procedures relating to joint undertakings. |
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21.

Calls on the Commission to ensure the direct involvement of the Joint Undertaking in the process of the Horizon 2020 mid-term review with regard to the further simplification and harmonisation of procedures relating to joint undertakings.

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