# L_2022258EN.01043901.xml

| 5.10.2022 | EN | Official Journal of the European Union | L 258/439 |
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5.10.2022

EN

Official Journal of the European Union

L 258/439

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RESOLUTION (EU) 2022/1814 OF THE EUROPEAN PARLIAMENT

of 4 May 2022

with observations forming an integral part of the decision on discharge in respect of the implementation of the budget for the Bio-based Industries Joint Undertaking (now the Circular Bio-based Europe Joint Undertaking) for the financial year 2020

THE EUROPEAN PARLIAMENT,

| — | having regard to its decision on discharge in respect of the implementation of the budget of the Bio-based Industries Joint Undertaking for the financial year 2020, |
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having regard to its decision on discharge in respect of the implementation of the budget of the Bio-based Industries Joint Undertaking for the financial year 2020,

| — | having regard to Rule 100 of and Annex V to its Rules of Procedure, |
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having regard to Rule 100 of and Annex V to its Rules of Procedure,

| — | having regard to the report of the Committee on Budgetary Control (A9-0074/2022), |
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—

having regard to the report of the Committee on Budgetary Control (A9-0074/2022),

| A. | whereas the Bio-based Industries Joint Undertaking (the ‘Joint Undertaking’) was established as a public-private partnership by the Council Regulation (EU) No 560/2014 (1) for a period of 10 years with the aim of bringing together all relevant stakeholders and contributing to establishing the Union as a key player in research, demonstration and deployment of advanced bio-based products and biofuels; |
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A.

whereas the Bio-based Industries Joint Undertaking (the ‘Joint Undertaking’) was established as a public-private partnership by the Council Regulation (EU) No 560/2014 (1) for a period of 10 years with the aim of bringing together all relevant stakeholders and contributing to establishing the Union as a key player in research, demonstration and deployment of advanced bio-based products and biofuels;

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| B. | whereas the founding members of the Joint Undertaking are the Union, represented by the Commission, and industrial partners, represented by the Bio-based Industries Consortium (the ‘BIC’); |
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B.

whereas the founding members of the Joint Undertaking are the Union, represented by the Commission, and industrial partners, represented by the Bio-based Industries Consortium (the ‘BIC’);

| C. | whereas the maximum Union contribution to the Joint Undertaking operations, under Horizon 2020, is EUR 975 000 000, including EFTA appropriations, of which up to EUR 29 250 000 is for administrative expenditure, and that Members of the Joint Undertaking other than the Union are expected to make a total contribution of at least EUR 2 730 000 000 over the 10-year period of the duration of the Joint Undertaking, of which EUR 182 500 000 is the minimum financial contribution to operational costs; whereas, in addition, in-kind contributions of at least EUR 1 755 000 000 are to be made by the members other than the Union or their constituent entities consisting of the costs incurred by them in implementing additional activities outside the Joint Undertaking’s annual work plan and contributing to its objectives; |
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C.

whereas the maximum Union contribution to the Joint Undertaking operations, under Horizon 2020, is EUR 975 000 000, including EFTA appropriations, of which up to EUR 29 250 000 is for administrative expenditure, and that Members of the Joint Undertaking other than the Union are expected to make a total contribution of at least EUR 2 730 000 000 over the 10-year period of the duration of the Joint Undertaking, of which EUR 182 500 000 is the minimum financial contribution to operational costs; whereas, in addition, in-kind contributions of at least EUR 1 755 000 000 are to be made by the members other than the Union or their constituent entities consisting of the costs incurred by them in implementing additional activities outside the Joint Undertaking’s annual work plan and contributing to its objectives;

Budget and financial management

Budget and financial management

| 1. | Notes that the report of the Court of Auditors (the ‘Court’) on the Joint Undertaking’s annual accounts (the ‘Court’s report’) finds the 2020 annual accounts to present fairly, in all material respects, the financial position of the Joint Undertaking at 31 December 2020, the results of its operations, its cash flows, and the changes in net assets for the year then ended, in accordance with the Joint Undertaking’s financial regulation and with accounting rules adopted by the Commission’s accounting officer; notes, furthermore, that the underlying transactions to the accounts are legal and regular in all material respects; |
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1.

Notes that the report of the Court of Auditors (the ‘Court’) on the Joint Undertaking’s annual accounts (the ‘Court’s report’) finds the 2020 annual accounts to present fairly, in all material respects, the financial position of the Joint Undertaking at 31 December 2020, the results of its operations, its cash flows, and the changes in net assets for the year then ended, in accordance with the Joint Undertaking’s financial regulation and with accounting rules adopted by the Commission’s accounting officer; notes, furthermore, that the underlying transactions to the accounts are legal and regular in all material respects;

| 2. | Notes that final available 2020 budget for implementation including re-entered unused appropriations of previous years, assigned revenues and reallocations to the following year includes commitment appropriations of EUR 111 733 166, of which EUR 67 604 259 from the Union budget, and payment appropriations of EUR 196 631 962, of which EUR 184 010 322 from the Union budget; |
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2.

Notes that final available 2020 budget for implementation including re-entered unused appropriations of previous years, assigned revenues and reallocations to the following year includes commitment appropriations of EUR 111 733 166, of which EUR 67 604 259 from the Union budget, and payment appropriations of EUR 196 631 962, of which EUR 184 010 322 from the Union budget;

| 3. | Notes that, as regards the Joint Undertaking’s 2020 budget available for Horizon 2020 projects, the implementations rates for commitment and payment appropriations were 100 % and 85 % respectively; |
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3.

Notes that, as regards the Joint Undertaking’s 2020 budget available for Horizon 2020 projects, the implementations rates for commitment and payment appropriations were 100 % and 85 % respectively;

| 4. | Notes that the original Joint Undertaking budget included a relatively large surplus of unused budget from prior years (mainly 2018 and 2019), of around EUR 1 000 000 in commitment appropriations and payment appropriations and on the operational side approximately EUR 20 400 000 in commitment appropriations and EUR 28 800 000 in payment appropriations; notes, in addition, that in the context of a large payment appropriation brought-forward surplus, exacerbated by the COVID-19 crisis, a decision was taken to send back EUR 25 300 000 of operational payment appropriations to the years of origin, for reactivation in subsequent years where there would be more need (in line with the N+3 rule); |
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4.

Notes that the original Joint Undertaking budget included a relatively large surplus of unused budget from prior years (mainly 2018 and 2019), of around EUR 1 000 000 in commitment appropriations and payment appropriations and on the operational side approximately EUR 20 400 000 in commitment appropriations and EUR 28 800 000 in payment appropriations; notes, in addition, that in the context of a large payment appropriation brought-forward surplus, exacerbated by the COVID-19 crisis, a decision was taken to send back EUR 25 300 000 of operational payment appropriations to the years of origin, for reactivation in subsequent years where there would be more need (in line with the N+3 rule);

| 5. | Notes that as at the end of 2020 the Union contributed EUR 603 176 000, and the industry grouping contributed EUR 41 927 000 in kind validated, EUR 12 465 000 in cash to administrative costs and EUR 3 250 000 in cash to operational costs; notes that at the end of 2020 in-kind contribution to additional activities were certified for a total of EUR 929 212 506; |
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5.

Notes that as at the end of 2020 the Union contributed EUR 603 176 000, and the industry grouping contributed EUR 41 927 000 in kind validated, EUR 12 465 000 in cash to administrative costs and EUR 3 250 000 in cash to operational costs; notes that at the end of 2020 in-kind contribution to additional activities were certified for a total of EUR 929 212 506;

| 6. | Notes that the Court’s annual report on the EU Joint Undertakings for 2020 did not have all data for the validated in-kind contributions; asks the Joint Undertaking to shorten delays for reporting in-kind contributions; |
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6.

Notes that the Court’s annual report on the EU Joint Undertakings for 2020 did not have all data for the validated in-kind contributions; asks the Joint Undertaking to shorten delays for reporting in-kind contributions;

| 7. | Notes that the industry members’ total in-kind contributions to additional activities, as estimated at the end of 2020, only achieved around half of the minimum target amount established in Article 4(4) of the Joint Undertaking founding regulations; notes, furthermore, that, although its founding regulation was expressly amended in 2018 to enable industry members to account for their cash contributions at project level for at least EUR 182 500 000, the industry members did not make any additional cash contributions to the Joint Undertaking’s operational costs in 2020, indicating that the Joint Undertaking encounters significant obstacles in obtaining such contributions from the private members and that the minimum target will not be achieved by the end of the Horizon 2020 programme; notes that, for this reason, the Commission (DG RTD) reduced its cash contributions to the Joint Undertaking by EUR 140 000 000; notes that this significant reduction in members’ contributions presented a risk to the achievement of the Joint Undertaking’s research and innovation agenda for the Horizon 2020 programme; calls on the Joint Undertaking to report back to the European Parliament on a plan of action regarding this issue; |
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7.

Notes that the industry members’ total in-kind contributions to additional activities, as estimated at the end of 2020, only achieved around half of the minimum target amount established in Article 4(4) of the Joint Undertaking founding regulations; notes, furthermore, that, although its founding regulation was expressly amended in 2018 to enable industry members to account for their cash contributions at project level for at least EUR 182 500 000, the industry members did not make any additional cash contributions to the Joint Undertaking’s operational costs in 2020, indicating that the Joint Undertaking encounters significant obstacles in obtaining such contributions from the private members and that the minimum target will not be achieved by the end of the Horizon 2020 programme; notes that, for this reason, the Commission (DG RTD) reduced its cash contributions to the Joint Undertaking by EUR 140 000 000; notes that this significant reduction in members’ contributions presented a risk to the achievement of the Joint Undertaking’s research and innovation agenda for the Horizon 2020 programme; calls on the Joint Undertaking to report back to the European Parliament on a plan of action regarding this issue;

| 8. | Notes with concern that the Court’s report on the Joint Undertaking’s accounts calls the attention to the fact that the industry members total in-kind contributions to additional activities only achieved 53 % of the minimum amount of EUR 1 755 000 000, established in Regulation (EU) No 560/2014; notes, in addition, that, at the end of 2020 the industry members reported approximately EUR 95 700 000 of in-kind contributions to operational activities out of the EUR 433 000 000 committed after all Horizon 2020 calls had been launched; notes, therefore, that this situation indicates a high risk that, by the end of the Horizon 2020 programme, the Joint Undertaking will not achieve the expected targets for its industry members’ in-kind contributions as established in Regulation (EU) No 560/2014 and adopted annual work plans; notes from the Joint Undertaking’s reply that in its opinion, this gap will be significantly reduced in the coming years given that the declaration and certification of in-kind contributions will significantly increase in line with the closure of the Joint Undertaking’s projects and that, moreover, the industry members committed for additional investment targets for 2021 and beyond in their financial perspective presented to the Joint Undertaking’s governing board; calls on the Joint Undertaking to report to the discharge authority of any development in that regard; notes that the total amount of in-kind contributions to additional activities of EUR 916 000 000 at the end of 2019 included around EUR 216 000 000 of in-kind contributions reported for 2019, but for which the certification process had not been completed due to the COVID-19 pandemic and the task is ongoing as mentioned in the Court's report; asks the Joint Undertaking to finish the certification process for year 2019 by June 2022; |
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8.

Notes with concern that the Court’s report on the Joint Undertaking’s accounts calls the attention to the fact that the industry members total in-kind contributions to additional activities only achieved 53 % of the minimum amount of EUR 1 755 000 000, established in Regulation (EU) No 560/2014; notes, in addition, that, at the end of 2020 the industry members reported approximately EUR 95 700 000 of in-kind contributions to operational activities out of the EUR 433 000 000 committed after all Horizon 2020 calls had been launched; notes, therefore, that this situation indicates a high risk that, by the end of the Horizon 2020 programme, the Joint Undertaking will not achieve the expected targets for its industry members’ in-kind contributions as established in Regulation (EU) No 560/2014 and adopted annual work plans; notes from the Joint Undertaking’s reply that in its opinion, this gap will be significantly reduced in the coming years given that the declaration and certification of in-kind contributions will significantly increase in line with the closure of the Joint Undertaking’s projects and that, moreover, the industry members committed for additional investment targets for 2021 and beyond in their financial perspective presented to the Joint Undertaking’s governing board; calls on the Joint Undertaking to report to the discharge authority of any development in that regard; notes that the total amount of in-kind contributions to additional activities of EUR 916 000 000 at the end of 2019 included around EUR 216 000 000 of in-kind contributions reported for 2019, but for which the certification process had not been completed due to the COVID-19 pandemic and the task is ongoing as mentioned in the Court's report; asks the Joint Undertaking to finish the certification process for year 2019 by June 2022;

| 9. | Notes that there are different procedures across Joint Undertakings regarding the calculation for the in-kind contributions and calls for their harmonisation; |
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9.

Notes that there are different procedures across Joint Undertakings regarding the calculation for the in-kind contributions and calls for their harmonisation;

Performance

Performance

| 10. | Notes that, in total, the Joint Undertaking project portfolio consists of 124 projects (64 Research and Innovation Actions (RIAs), 35 Demonstration Actions (DEMOs), 11 Flagships and 14 Coordination and Support Actions (CSAs), resulting from the 2014–2019 calls; notes, in addition, that, after the finalisation of the Grant Agreement Preparation (GAP) process from the 2020 call, seven RIA, four DEMO, three Flagship and four CSA projects are expected to be added to the Joint Undertaking’s project portfolio; calls on the Joint Undertaking to publish the number of finished as well as ongoing projects in its annual report for more clarity; |
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10.

Notes that, in total, the Joint Undertaking project portfolio consists of 124 projects (64 Research and Innovation Actions (RIAs), 35 Demonstration Actions (DEMOs), 11 Flagships and 14 Coordination and Support Actions (CSAs), resulting from the 2014–2019 calls; notes, in addition, that, after the finalisation of the Grant Agreement Preparation (GAP) process from the 2020 call, seven RIA, four DEMO, three Flagship and four CSA projects are expected to be added to the Joint Undertaking’s project portfolio; calls on the Joint Undertaking to publish the number of finished as well as ongoing projects in its annual report for more clarity;

| 11. | Notes, furthermore, that within the 124 funded projects from the Joint Undertaking’s 2014-2019 calls, as well as the 18 projects still in the GAP from the 2020 call, 1 006 beneficiaries represent the private-for-profit sector, corresponding to 59,5 % of all Joint Undertaking beneficiaries; notes, moreover, that for the 2020 call, this trend is confirmed with a private-for-profit participation covering 56 % of the total number of participants in retained proposals; |
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11.

Notes, furthermore, that within the 124 funded projects from the Joint Undertaking’s 2014-2019 calls, as well as the 18 projects still in the GAP from the 2020 call, 1 006 beneficiaries represent the private-for-profit sector, corresponding to 59,5 % of all Joint Undertaking beneficiaries; notes, moreover, that for the 2020 call, this trend is confirmed with a private-for-profit participation covering 56 % of the total number of participants in retained proposals;

| 12. | Regrets the fact that the design of the Joint Undertaking’s 2020 call did not ensure the fullest coverage of the four strategic demonstration topics, in line with its research agenda in the annual work plan; notes, in addition, that eligible and high-scored proposals for one of the demonstration topics had to be rejected for the benefit of another demonstration topic, for which several proposals were accepted for co-financing; |
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12.

Regrets the fact that the design of the Joint Undertaking’s 2020 call did not ensure the fullest coverage of the four strategic demonstration topics, in line with its research agenda in the annual work plan; notes, in addition, that eligible and high-scored proposals for one of the demonstration topics had to be rejected for the benefit of another demonstration topic, for which several proposals were accepted for co-financing;

| 13. | Notes that the Joint Undertaking uses Horizon 2020 common Key Performance Indicators (KPIs) and for monitoring cross-cutting issues, and eight specific indicators specific to the Joint Undertaking; |
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13.

Notes that the Joint Undertaking uses Horizon 2020 common Key Performance Indicators (KPIs) and for monitoring cross-cutting issues, and eight specific indicators specific to the Joint Undertaking;

| 14. | Notes that, in 2020, the Joint Undertaking’s efficient performance in core operations was confirmed, continuing the positive trends observed in previous years: Time To Inform (TTI) for applicants of the 2020 call was met in January 2021, at 137 days against a target of 153 days; Time To Grant (TTG) for retained projects under the 2019 call was 237 days on average against the target of 245 days (96 % on time); notes, moreover, that all Grant Agreements were signed on time except one, which was delayed because of changes in the consortium and COVID-19-related restrictions; notes that Time To Pay (TTP) for pre-financing for retained projects from the 2019 call was 12 days on average against the target of 30 days (100 % on time); notes that TTP for periodic payments was 72 days on average against the target of 90 days (93 % on time); |
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14.

Notes that, in 2020, the Joint Undertaking’s efficient performance in core operations was confirmed, continuing the positive trends observed in previous years: Time To Inform (TTI) for applicants of the 2020 call was met in January 2021, at 137 days against a target of 153 days; Time To Grant (TTG) for retained projects under the 2019 call was 237 days on average against the target of 245 days (96 % on time); notes, moreover, that all Grant Agreements were signed on time except one, which was delayed because of changes in the consortium and COVID-19-related restrictions; notes that Time To Pay (TTP) for pre-financing for retained projects from the 2019 call was 12 days on average against the target of 30 days (100 % on time); notes that TTP for periodic payments was 72 days on average against the target of 90 days (93 % on time);

| 15. | Notes from the Joint Undertaking’s annual activity report, that overall, the Joint Undertaking has operated efficiently and its average performance against the three main KPIs of Horizon 2020 exceeds the set targets, despite the challenging conditions of 2020; |
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15.

Notes from the Joint Undertaking’s annual activity report, that overall, the Joint Undertaking has operated efficiently and its average performance against the three main KPIs of Horizon 2020 exceeds the set targets, despite the challenging conditions of 2020;

| 16. | Notes that the issue of intellectual property rights (IPR) needs to be addressed in all contracts which may produce an intended outcome of the performance, or result, such as studies, analysis, or evaluations; notes that it aims at safeguarding the rights of individual creators but also provides details how the rights will be used in the future; notes that since the purchases are done with public money, the results should be transparent and accessible to the public; calls the Joint Undertaking for a clarification of the intellectual property rights and more transparency when it comes to the result of the research; |
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16.

Notes that the issue of intellectual property rights (IPR) needs to be addressed in all contracts which may produce an intended outcome of the performance, or result, such as studies, analysis, or evaluations; notes that it aims at safeguarding the rights of individual creators but also provides details how the rights will be used in the future; notes that since the purchases are done with public money, the results should be transparent and accessible to the public; calls the Joint Undertaking for a clarification of the intellectual property rights and more transparency when it comes to the result of the research;

Procurement and recruitments procedures

Procurement and recruitments procedures

| 17. | Notes that Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council (2) requires that all of the Union institutions and bodies, including the Joint Undertakings, design and implement solutions for the submission, storage and processing of data submitted in award procedures, and to that end, put in place a single ‘electronic data interchange area’ for participants; notes that the Commission is developing the eProcurement solution with the integrated Funding and Tenders portal and the TED eTendering, where all published tenders are publicly accessible; notes that the eProcurement solution offers a harmonised approach and established corporate practices for procurement processes, supporting them through a fully integrated approach; notes, however, that the Joint Undertaking has not planned to use all modules of the platform due to their low number of high value procurement procedures; invites the Joint Undertaking to join the Commission’s eProcurement solution in line with the principle of a single electronic data exchange, provided for by Regulation (EU, Euratom) 2018/1046, thus ensuring that their procurements are subject to competition on the broadest possible basis; calls on the Joint Undertaking to report to the discharge authority in that regard; |
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17.

Notes that Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council (2) requires that all of the Union institutions and bodies, including the Joint Undertakings, design and implement solutions for the submission, storage and processing of data submitted in award procedures, and to that end, put in place a single ‘electronic data interchange area’ for participants; notes that the Commission is developing the eProcurement solution with the integrated Funding and Tenders portal and the TED eTendering, where all published tenders are publicly accessible; notes that the eProcurement solution offers a harmonised approach and established corporate practices for procurement processes, supporting them through a fully integrated approach; notes, however, that the Joint Undertaking has not planned to use all modules of the platform due to their low number of high value procurement procedures; invites the Joint Undertaking to join the Commission’s eProcurement solution in line with the principle of a single electronic data exchange, provided for by Regulation (EU, Euratom) 2018/1046, thus ensuring that their procurements are subject to competition on the broadest possible basis; calls on the Joint Undertaking to report to the discharge authority in that regard;

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| 18. | Notes that, by the end of 2020, the Joint Undertaking’s programme office comprised 23 staff members and that one recruitment procedure was launched in 2020 and led to the entry into service of the Head of Programme (temporary agent); notes, that, due to the COVID-19 pandemic the whole recruitment procedure including the assessment centre was shifted to a remote setting; notes, in addition, that the Assistant Call Coordinator (temporary agent), the Communication Officer (temporary agent), a Project Officer (contract agent) and a Financial Assistant (contract agent) joined the Joint Undertaking in 2020; |
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18.

Notes that, by the end of 2020, the Joint Undertaking’s programme office comprised 23 staff members and that one recruitment procedure was launched in 2020 and led to the entry into service of the Head of Programme (temporary agent); notes, that, due to the COVID-19 pandemic the whole recruitment procedure including the assessment centre was shifted to a remote setting; notes, in addition, that the Assistant Call Coordinator (temporary agent), the Communication Officer (temporary agent), a Project Officer (contract agent) and a Financial Assistant (contract agent) joined the Joint Undertaking in 2020;

| 19. | Notes that these recruitments were finalised over the past years and an efficient use of reserve lists was fundamental to ensure timely replacement of staff leaving the Joint Undertaking in 2019; notes, moreover, that in order to cope with the peak period of workload, the Joint Undertaking concluded – via the Commission framework contract for interim services - several short-term contracts for interim services to address specific needs of the Programme Office; emphasises, however, that the use of interim staff should remain a temporary solution otherwise it could negatively affect the Joint Undertaking’s overall performance, such as the retention of key competences, unclear accountability channels, and lower staff efficiency; |
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19.

Notes that these recruitments were finalised over the past years and an efficient use of reserve lists was fundamental to ensure timely replacement of staff leaving the Joint Undertaking in 2019; notes, moreover, that in order to cope with the peak period of workload, the Joint Undertaking concluded – via the Commission framework contract for interim services - several short-term contracts for interim services to address specific needs of the Programme Office; emphasises, however, that the use of interim staff should remain a temporary solution otherwise it could negatively affect the Joint Undertaking’s overall performance, such as the retention of key competences, unclear accountability channels, and lower staff efficiency;

| 20. | Welcomes the Joint Undertaking’s survey initiative which made it possible to detect the impact of COVID-19 on employees and revealed that global fatigue is present due to isolation, family irritation, restrictions on movement outside home, insomnia and lack of social interaction and communication with colleagues; suggests drawing attention to wellbeing, stress management and work-life balance; regrets that there is no support structure in place to ensure the psychological well-being of staff in the Joint Undertaking; |
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20.

Welcomes the Joint Undertaking’s survey initiative which made it possible to detect the impact of COVID-19 on employees and revealed that global fatigue is present due to isolation, family irritation, restrictions on movement outside home, insomnia and lack of social interaction and communication with colleagues; suggests drawing attention to wellbeing, stress management and work-life balance; regrets that there is no support structure in place to ensure the psychological well-being of staff in the Joint Undertaking;

| 21. | Notes that, by the end of 2020, according to its annual activity report, the Joint Undertaking had 23 staff members from 10 Member States (26 % men and 74 % women); |
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21.

Notes that, by the end of 2020, according to its annual activity report, the Joint Undertaking had 23 staff members from 10 Member States (26 % men and 74 % women);

Internal controls and internal audit

Internal controls and internal audit

| 22. | Notes that the Joint Undertaking has set up reliable ex ante control procedures based on financial and operational desk reviews; notes, moreover, that the Joint Undertaking implemented the Commission’s internal control framework (ICF), which is based on 17 internal control principles, in 2020, and that for the annual self-assessment and monitoring of the effectiveness of the control activities required by the ICF, the Joint Undertaking developed relevant indicators for all internal control principles and related characteristics; notes, moreover, that all the principles of the new control model are embedded throughout the Joint Undertaking’s organisational structure and rely on a combination of ex ante and ex post controls, segregation of duties, documented processes and procedures, control of deviations, and promotion of ethical behaviour; |
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22.

Notes that the Joint Undertaking has set up reliable ex ante control procedures based on financial and operational desk reviews; notes, moreover, that the Joint Undertaking implemented the Commission’s internal control framework (ICF), which is based on 17 internal control principles, in 2020, and that for the annual self-assessment and monitoring of the effectiveness of the control activities required by the ICF, the Joint Undertaking developed relevant indicators for all internal control principles and related characteristics; notes, moreover, that all the principles of the new control model are embedded throughout the Joint Undertaking’s organisational structure and rely on a combination of ex ante and ex post controls, segregation of duties, documented processes and procedures, control of deviations, and promotion of ethical behaviour;

| 23. | Notes that, according to the Court’s report the common audit service of the Commission is responsible for the ex post audit of Horizon 2020 payments made by the Joint Undertaking and that, based on the ex post audit results available by the end of 2020, it reported a representative error rate of 1,47 % and a residual error rate of 1,06 % for Horizon 2020 projects (clearings and final payments); notes from the Commission proposal for Horizon 2020 that the ultimate aim for the residual level of error at the closure of the programmes after the financial impact of all audits, correction and recovery measures will have been taken into account, is to achieve a level as close as possible to 2 %. |
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23.

Notes that, according to the Court’s report the common audit service of the Commission is responsible for the ex post audit of Horizon 2020 payments made by the Joint Undertaking and that, based on the ex post audit results available by the end of 2020, it reported a representative error rate of 1,47 % and a residual error rate of 1,06 % for Horizon 2020 projects (clearings and final payments); notes from the Commission proposal for Horizon 2020 that the ultimate aim for the residual level of error at the closure of the programmes after the financial impact of all audits, correction and recovery measures will have been taken into account, is to achieve a level as close as possible to 2 %.

| 24. | Notes that as part of the operational payment controls, the Court audited randomly sampled Horizon 2020 payments made in 2020 at the level of the final beneficiaries to corroborate the ex post audit error rates; notes that the detailed audits revealed in one case an error of above 1 % of audited costs related to the unjustified correction of already declared and accepted personnel costs in the subsequent reporting period; |
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24.

Notes that as part of the operational payment controls, the Court audited randomly sampled Horizon 2020 payments made in 2020 at the level of the final beneficiaries to corroborate the ex post audit error rates; notes that the detailed audits revealed in one case an error of above 1 % of audited costs related to the unjustified correction of already declared and accepted personnel costs in the subsequent reporting period;

| 25. | Emphasises that, in the Court’s annual report on the EU Joint Undertakings for 2020, the Court found persistent systemic errors in the personnel costs declared by beneficiaries, in particular on the part of SMEs and new beneficiaries; notes that such errors were also regularly reported in the ex post audits of the Common Audit Service and its contracted auditors; highlights that, on page 39 of that report, the Court states that the streamlining of Horizon 2020 rules for the declaration of personnel costs and the wider use of simplified cost options is a precondition for future research framework programmes, in order to stabilise error rates to below materiality level; encourages the Joint Undertaking to strengthen its internal control systems given that SMEs and new beneficiaries are more error-prone; |
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25.

Emphasises that, in the Court’s annual report on the EU Joint Undertakings for 2020, the Court found persistent systemic errors in the personnel costs declared by beneficiaries, in particular on the part of SMEs and new beneficiaries; notes that such errors were also regularly reported in the ex post audits of the Common Audit Service and its contracted auditors; highlights that, on page 39 of that report, the Court states that the streamlining of Horizon 2020 rules for the declaration of personnel costs and the wider use of simplified cost options is a precondition for future research framework programmes, in order to stabilise error rates to below materiality level; encourages the Joint Undertaking to strengthen its internal control systems given that SMEs and new beneficiaries are more error-prone;

| 26. | Notes that until 2020, the internal audit service (IAS) performed two assurance audits on the Joint Undertaking on limited review of the implementation of the internal control standards and on Horizon 2020 grant process; notes moreover that in February 2020, the IAS finalised its Strategic Internal Audit Plan covering the period 2021-2023; |
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26.

Notes that until 2020, the internal audit service (IAS) performed two assurance audits on the Joint Undertaking on limited review of the implementation of the internal control standards and on Horizon 2020 grant process; notes moreover that in February 2020, the IAS finalised its Strategic Internal Audit Plan covering the period 2021-2023;

Management and prevention of conflict of interests and of fraud risks

Management and prevention of conflict of interests and of fraud risks

| 27. | Deplores the fact that the European Anti-Fraud Office (OLAF) closed an investigation in the first half of 2020 that found evidence of irregularities and fraud in the activities of two beneficiaries involved in Horizon 2020 projects, including projects co-financed by the Joint Undertaking; notes that in 2020 the Joint Undertaking largely implemented the OLAF recommendations in respect of those beneficiaries, including processing recoveries, terminating the participation of affected beneficiaries in most grant agreements and actively looking at other potentially problematic beneficiaries; notes, moreover, that the OLAF report did not include any findings or conclusions linked to weaknesses in the internal control systems of the Joint Undertaking and that the financial impact of this case is below materiality levels; calls on the Joint Undertaking to report to the discharge authority in that regard; |
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27.

Deplores the fact that the European Anti-Fraud Office (OLAF) closed an investigation in the first half of 2020 that found evidence of irregularities and fraud in the activities of two beneficiaries involved in Horizon 2020 projects, including projects co-financed by the Joint Undertaking; notes that in 2020 the Joint Undertaking largely implemented the OLAF recommendations in respect of those beneficiaries, including processing recoveries, terminating the participation of affected beneficiaries in most grant agreements and actively looking at other potentially problematic beneficiaries; notes, moreover, that the OLAF report did not include any findings or conclusions linked to weaknesses in the internal control systems of the Joint Undertaking and that the financial impact of this case is below materiality levels; calls on the Joint Undertaking to report to the discharge authority in that regard;

| 28. | Notes that the Joint Undertaking has rules on conflict of interest for all the staff and bodies of Joint Undertaking in place following the model agreed by the Commission; notes moreover that the programme office has developed a comprehensive set of rules and procedures that are effectively implemented across its entire governance structure; calls on the Joint Undertaking to publish the CVs of the members of its Governing Board; |
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28.

Notes that the Joint Undertaking has rules on conflict of interest for all the staff and bodies of Joint Undertaking in place following the model agreed by the Commission; notes moreover that the programme office has developed a comprehensive set of rules and procedures that are effectively implemented across its entire governance structure; calls on the Joint Undertaking to publish the CVs of the members of its Governing Board;

| 29. | Notes that an anti-fraud strategy is in place covering the prevention and detection of potential fraud as well as the conditions for investigating it; notes that the anti-fraud strategy for grant management is developed and implemented in cooperation with services of the Commission, executive agencies and joint undertakings that implement the Horizon 2020 framework programme; notes, moreover, that the staff of the Joint Undertaking is continuously updated about the identification of fraud risks, and dedicated tools are made available for the prevention, detection and reporting of suspicious cases; invites the Joint Undertaking to consider the implementation of a permanent and robust training scheme for its employees, especially those working directly with calls for proposals and grants, in order to strengthen ethical standards and minimise the risk of unethical behaviour occurring, having a negative impact on sound financial management; |
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29.

Notes that an anti-fraud strategy is in place covering the prevention and detection of potential fraud as well as the conditions for investigating it; notes that the anti-fraud strategy for grant management is developed and implemented in cooperation with services of the Commission, executive agencies and joint undertakings that implement the Horizon 2020 framework programme; notes, moreover, that the staff of the Joint Undertaking is continuously updated about the identification of fraud risks, and dedicated tools are made available for the prevention, detection and reporting of suspicious cases; invites the Joint Undertaking to consider the implementation of a permanent and robust training scheme for its employees, especially those working directly with calls for proposals and grants, in order to strengthen ethical standards and minimise the risk of unethical behaviour occurring, having a negative impact on sound financial management;

| 30. | Notes that he Programme Office designated its correspondent with OLAF for all activities related to reporting fraud, supporting OLAF on investigative matters, following up on OLAF’s recommendations and cooperating on fraud prevention; notes that, during the course of 2020, the Programme Office received the first requests from OLAF to support its selections and investigations. |
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30.

Notes that he Programme Office designated its correspondent with OLAF for all activities related to reporting fraud, supporting OLAF on investigative matters, following up on OLAF’s recommendations and cooperating on fraud prevention; notes that, during the course of 2020, the Programme Office received the first requests from OLAF to support its selections and investigations.

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(1)  Council Regulation (EU) No 560/2014 of 6 May 2014 establishing the Bio-based Industries Joint Undertaking (OJ L 169, 7.6.2014, p. 130).

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(2)  Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial rules applicable to the general budget of the Union, amending Regulations (EU) No 1296/2013, (EU) No 1301/2013, (EU) No 1303/2013, (EU) No 1304/2013, (EU) No 1309/2013, (EU) No 1316/2013, (EU) No 223/2014, (EU) No 283/2014, and Decision No 541/2014/EU and repealing Regulation (EU, Euratom) No 966/2012 (OJ L 193, 30.7.2018, p. 1).

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