# C_2010338EN.01007101.xml

| 14.12.2010 | EN | Official Journal of the European Union | C 338/71 |
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14.12.2010

EN

Official Journal of the European Union

C 338/71

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REPORT

on the annual accounts of the European Research Council Executive Agency for the financial year 2009, together with the Agency’s replies

2010/C 338/13

CONTENTS

CONTENTS

| | Paragraph | Page |
| --- | --- | --- |
| INTRODUCTION ... | 1-2 | 72 |
| STATEMENT OF ASSURANCE ... | 3-12 | 72 |
| COMMENTS ON THE BUDGETARY AND FINANCIAL MANAGEMENT ... | 13-14 | 73 |
| OTHER MATTERS ... | 15 | 73 |
| Table ... | 74 |
| The Agency’s replies ... | 76 |

Paragraph

Paragraph

Page

Page

INTRODUCTION ...

1-2

72

STATEMENT OF ASSURANCE ...

3-12

72

COMMENTS ON THE BUDGETARY AND FINANCIAL MANAGEMENT ...

13-14

73

OTHER MATTERS ...

15

73

Table ...

74

The Agency’s replies ...

The Agency’s replies

76

INTRODUCTION

INTRODUCTION

| 1. | The European Research Council Executive Agency (hereinafter ‘the Agency’), located in Brussels, was set up by Commission Decision 2008/37/EC of 14 December 2007 (1). The Agency was established for a period beginning on 1 January 2008 and ending on 31 December 2017 with the aim of managing the specific programme ‘Ideas’ in the field of frontier research (2). The Agency became fully autonomous in 2009. |
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1.

The European Research Council Executive Agency (hereinafter ‘the Agency’), located in Brussels, was set up by Commission Decision 2008/37/EC of 14 December 2007 (1). The Agency was established for a period beginning on 1 January 2008 and ending on 31 December 2017 with the aim of managing the specific programme ‘Ideas’ in the field of frontier research (2). The Agency became fully autonomous in 2009.

1

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| 2. | The Agency’s 2009 budget was 18,3 million euro. The number of staff employed by the Agency at the end of the year was 262. |
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2.

The Agency’s 2009 budget was 18,3 million euro. The number of staff employed by the Agency at the end of the year was 262.

12.

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| 12. | The comments which follow do not call the Court’s opinions into question. |
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The comments which follow do not call the Court’s opinions into question.

COMMENTS ON THE BUDGETARY AND FINANCIAL MANAGEMENT

COMMENTS ON THE BUDGETARY AND FINANCIAL MANAGEMENT

| 13. | The Agency’s initial 2009 budget, 18,3 million euro, was reduced by 3,9 million euro in October 2009 and returned to the Commission for the Ideas Programme. The final budget implementation was 13,4 million euro. There is significant room to make more realistic assumptions for recruitment and operating expenditure with a view to improving the Agency’s budgetary forecasts. |
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13.

The Agency’s initial 2009 budget, 18,3 million euro, was reduced by 3,9 million euro in October 2009 and returned to the Commission for the Ideas Programme. The final budget implementation was 13,4 million euro. There is significant room to make more realistic assumptions for recruitment and operating expenditure with a view to improving the Agency’s budgetary forecasts.

| 14. | Three cases of appropriations carried forward to 2010 concern purchase orders not signed by the suppliers despite the contractual obligations (12). Several contracts (13) were signed in the last days of 2009 for services linked to activities initially planned for 2010. For recurrent administrative expenses (14), appropriations carried over from 2008 were used to pay for services to be delivered in 2009 (15). These situations were at odds with the budgetary principle of annuality. |
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14.

Three cases of appropriations carried forward to 2010 concern purchase orders not signed by the suppliers despite the contractual obligations (12). Several contracts (13) were signed in the last days of 2009 for services linked to activities initially planned for 2010. For recurrent administrative expenses (14), appropriations carried over from 2008 were used to pay for services to be delivered in 2009 (15). These situations were at odds with the budgetary principle of annuality.

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OTHER MATTERS

OTHER MATTERS

| 15. | There were shortcomings in the recruitment procedures. The vacancy notices did not specify the thresholds or the maximum number of candidates to be put on the reserve lists, nor their period of validity. The selection board’s decisions were insufficiently justified and documented. In one selection procedure, two candidates were interviewed despite the fact that they were ‘not to be invited for interview’. One of these candidates was recruited by the Agency. |
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15.

There were shortcomings in the recruitment procedures. The vacancy notices did not specify the thresholds or the maximum number of candidates to be put on the reserve lists, nor their period of validity. The selection board’s decisions were insufficiently justified and documented. In one selection procedure, two candidates were interviewed despite the fact that they were ‘not to be invited for interview’. One of these candidates was recruited by the Agency.

This Report was adopted by Chamber IV, headed by Mr Igors LUDBORŽS, Member of the Court of Auditors, in Luxembourg at its meeting of 14 and 16 September 2010.

For the Court of Auditors

Vítor Manuel da SILVA CALDEIRA

President

Table

European Research Council Executive Agency (Brussels)

| Areas of Union competence deriving from the Treaty | Competences of the Agency as defined in Commission Decision 2008/37/EC of 14 December 2007 | Governance | Resources made available to the Agency in 2009 | Products and services provided during 2009 |
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| 1. | A multiannual framework programme, setting out all the activities of the Union, shall be adopted by the European Parliament and the Council, after consulting the Economic and Social Committee. The framework programme shall:






  — | establish the scientific and technological objectives to be achieved by the activities provided for in Article 180 and fix the relevant priorities, |

Areas of Union competence deriving from the Treaty

Competences of the Agency as defined in Commission Decision 2008/37/EC of 14 December 2007

Governance

Resources made available to the Agency in 2009

Products and services provided during 2009

1.

A multiannual framework programme, setting out all the activities of the Union, shall be adopted by the European Parliament and the Council, after consulting the Economic and Social Committee. The framework programme shall:

—

establish the scientific and technological objectives to be achieved by the activities provided for in Article 180 and fix the relevant priorities,

| — | indicate the broad lines of such activities, |
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indicate the broad lines of such activities,

| — | fix the maximum overall amount and the detailed rules for Union financial participation in the framework programme and the respective shares in each of the activities provided for. |
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fix the maximum overall amount and the detailed rules for Union financial participation in the framework programme and the respective shares in each of the activities provided for.

| 2. | The framework programme shall be adapted or supplemented as the situation changes. |
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2.

The framework programme shall be adapted or supplemented as the situation changes.

| 3. | The framework programme shall be implemented through specific programmes developed within each activity. Each specific programme shall define the detailed rules for implementing it, fix its duration and provide for the means deemed necessary. The sum of the amounts deemed necessary, fixed in the specific programmes, may not exceed the overall maximum amount fixed for the framework programme and each activity. |
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3.

The framework programme shall be implemented through specific programmes developed within each activity. Each specific programme shall define the detailed rules for implementing it, fix its duration and provide for the means deemed necessary. The sum of the amounts deemed necessary, fixed in the specific programmes, may not exceed the overall maximum amount fixed for the framework programme and each activity.

| 4. | The Council, acting by a qualified majority on a proposal from the Commission and after consulting the European Parliament and the Economic and Social Committee, shall adopt the specific programmes. |
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4.

The Council, acting by a qualified majority on a proposal from the Commission and after consulting the European Parliament and the Economic and Social Committee, shall adopt the specific programmes.

(Article 182 of the Treaty on the Functioning of the European Union)

Objectives

The Agency is responsible for carrying out the implementation of the tasks for the management of the Ideas Specific Programme (see Council Decision 2006/972/EC) under the Seventh Framework Programme for Union research FP7 (2007-2013), as adopted by Decision No 1982/2006/EC of the European Parliament and of the Council.

Tasks

Within the Ideas Specific Programme, under the Seventh Framework Programme for Union Research, the Agency is responsible for the following tasks (see Commission Decision C(2008) 5694 of 8 October 2008):

| (a) | collect, process and distribute data, and in particular compile, analyse and transmit to the Commission and the Scientific Council all information required to guide implementation of the Ideas Specific Programme as well as policy development in the field of frontier research, and assist the Commission and the Scientific Council in establishing contacts with other programmes of the Union, the Member States or international organisations; |
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(a)

collect, process and distribute data, and in particular compile, analyse and transmit to the Commission and the Scientific Council all information required to guide implementation of the Ideas Specific Programme as well as policy development in the field of frontier research, and assist the Commission and the Scientific Council in establishing contacts with other programmes of the Union, the Member States or international organisations;

| (b) | contribute to the evaluation by the Commission of the impact of the programme and to the monitoring of the effects of the measures taken; |
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(b)

contribute to the evaluation by the Commission of the impact of the programme and to the monitoring of the effects of the measures taken;

| (c) | carry out studies and assessments, in particular in support of the Commission annual report on the ERC operations and achievement of the objectives of the Ideas Specific Programme as well as the mid-term evaluation of implementation of the programme, and contribute to the preparation and implementation of follow-up action on evaluations, with a view to transmitting them to the Scientific Council and the Commission; |
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(c)

carry out studies and assessments, in particular in support of the Commission annual report on the ERC operations and achievement of the objectives of the Ideas Specific Programme as well as the mid-term evaluation of implementation of the programme, and contribute to the preparation and implementation of follow-up action on evaluations, with a view to transmitting them to the Scientific Council and the Commission;

| (d) | prepare draft recommendations for the Scientific Council and the Commission on implementation of the Ideas Specific Programme and its future development; |
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(d)

prepare draft recommendations for the Scientific Council and the Commission on implementation of the Ideas Specific Programme and its future development;

| (e) | plan and implement information, communication and dissemination actions; |
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(e)

plan and implement information, communication and dissemination actions;

| (f) | participate in preparatory work on Commission specific financing decisions relating to the Ideas Specific Programme. |
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(f)

participate in preparatory work on Commission specific financing decisions relating to the Ideas Specific Programme.

1 —   Steering Committee

Five members appointed by the European Commission. Adopts the Agency’s annual work programme after approval by the European Commission, the administrative budget of the Agency and its annual activity report.

2 —   Scientific Council of the ERC

The Scientific Council of the ERC is entrusted by virtue of Council Decision 2007/134/EC with establishing a scientific strategy for the Ideas Specific Programme, deciding on the type of research to be funded in accordance with Article 6(6) of Decision 2006/972/EC and acting as a guarantor of the quality of the activity from a scientific perspective. Its tasks cover, in particular, the establishment of the annual work programme for the Ideas Specific Programme, and of the peer review process, as well as the monitoring and quality control of the implementation of the Specific Programme ‘Ideas’, without prejudice to the responsibility of the Commission.

3 —   Director

Appointed by the European Commission for 4 years.

4 —   External audit

Court of Auditors

5 —   Discharge authority

Parliament, following a recommendation from the Council.

Budget

The Agency’s administrative budget for 2009 totalled 14,4 million euro.

Staff at 31 December 2009

On 31 December 2009, the Agency employed 262 staff members:

| — | 93 temporary staff (13 seconded and 80 external), |
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93 temporary staff (13 seconded and 80 external),

| — | 162 contract staff, |
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162 contract staff,

| — | 7 seconded national experts. |
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7 seconded national experts.

| 1. | The Ideas work programme is implemented via the publication of the annual calls for proposals, which are followed by an evaluation (by external experts), negotiation and signing of grant agreements and finally monitoring the projects awarded. Each call for proposal results in a series of Grant Agreements with an expected project cycle of about 5 years. At the end of 2009 four ‘lots’ were managed following completion of various calls. The first reporting cycle started for Starting Grants 2007. |
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1.

The Ideas work programme is implemented via the publication of the annual calls for proposals, which are followed by an evaluation (by external experts), negotiation and signing of grant agreements and finally monitoring the projects awarded. Each call for proposal results in a series of Grant Agreements with an expected project cycle of about 5 years. At the end of 2009 four ‘lots’ were managed following completion of various calls. The first reporting cycle started for Starting Grants 2007.

| 2. | Execution of the 2009 Calls for proposals for the Ideas work programme. (Starting Grants and Advanced Grants): 4 083 proposals’ applications were submitted in 2009, out of which 2 503 for Starting Grants and 1 583 for Advanced Grants. Of these a total of 3 918 were eligible and thus evaluated by the review panels. A total of 449 proposals were selected for the granting process. |
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2.

Execution of the 2009 Calls for proposals for the Ideas work programme. (Starting Grants and Advanced Grants): 4 083 proposals’ applications were submitted in 2009, out of which 2 503 for Starting Grants and 1 583 for Advanced Grants. Of these a total of 3 918 were eligible and thus evaluated by the review panels. A total of 449 proposals were selected for the granting process.

| 3. | Generation and dissemination of information on the Ideas Specific Programme and the Executive Agency’s activities in 2009. |
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3.

Generation and dissemination of information on the Ideas Specific Programme and the Executive Agency’s activities in 2009.

| 4. | Support to the Scientific Council of the ERC: Two Scientific Council plenary sessions were organised in the period between 15 July and 31 December 2009, one in October in Brussels and one in December in Rehovot (Israel). In order to facilitate the Scientific Council’s strategy discussion, the Agency, in conjunction with the Secretary-General of the Scientific Council, has carried out an analysis drawing lessons from the first 3 years of the Agency’s existence. Three new ERC Working Groups were created at the Scientific Council plenary in July 2009, meetings of the Working Groups on ‘Relations with Industry’, ‘Open Access’, ‘Third Countries Participation’ and ‘Gender Balance’ (pre-existing) were organised by the Agency. A series of documents containing analysis and key messages on the specific issues dealt with by the Working Groups were prepared by the Agency in conjunction with the members of the said Groups. |
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4.

Support to the Scientific Council of the ERC: Two Scientific Council plenary sessions were organised in the period between 15 July and 31 December 2009, one in October in Brussels and one in December in Rehovot (Israel). In order to facilitate the Scientific Council’s strategy discussion, the Agency, in conjunction with the Secretary-General of the Scientific Council, has carried out an analysis drawing lessons from the first 3 years of the Agency’s existence. Three new ERC Working Groups were created at the Scientific Council plenary in July 2009, meetings of the Working Groups on ‘Relations with Industry’, ‘Open Access’, ‘Third Countries Participation’ and ‘Gender Balance’ (pre-existing) were organised by the Agency. A series of documents containing analysis and key messages on the specific issues dealt with by the Working Groups were prepared by the Agency in conjunction with the members of the said Groups.

Source: Information supplied by the Agency.

THE AGENCY’S REPLIES

| 13. | The Agency is already implementing tools in order to improve its budget forecasts management. |
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13.

The Agency is already implementing tools in order to improve its budget forecasts management.

| 14. | The Agency will develop a procurement planning and monitoring system to facilitate the annual follow up of procurement workflows. |
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14.

The Agency will develop a procurement planning and monitoring system to facilitate the annual follow up of procurement workflows.

| 15. | The Agency will issue guidelines to prevent the identified weaknesses. Concerning the specific case, the selection panel extended the list of eligible candidates invited for interview to have a sufficient pool of candidates for the final selection. The Agency recognises that this decision was not properly documented. |
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15.

The Agency will issue guidelines to prevent the identified weaknesses. Concerning the specific case, the selection panel extended the list of eligible candidates invited for interview to have a sufficient pool of candidates for the final selection. The Agency recognises that this decision was not properly documented.

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(1)  OJ L 9, 12.1.2008, p. 15.

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(2)  The Table summarises the Agency’s competences and activities. It is presented for information purposes.

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(3)  These accounts are accompanied by a report on the budgetary and financial management during the year which gives, inter alia, an account of the rate of implementation of the appropriations with summary information on the transfers of appropriations among the various budget items.

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(4)  The financial statements include the balance sheet and the economic outturn account, the cash-flow table, the statement of changes in capital and the annex to the financial statements which includes the description of the significant accounting policies and other explanatory information.

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(5)  The budget implementation reports comprise the budget outturn account and its annex.

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(6)  OJ L 11, 16.1.2003, p. 1.

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(7)  Article 25 of Commission Regulation (EC) No 1653/2004 of 21 September 2004 (OJ L 297, 22.9.2004, p. 6).

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(8)  Article 29 of Regulation (EC) No 1653/2004.

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(9)  The rules concerning the presentation of the accounts and accounting by the Agencies are laid down in Chapter 1 of Title VI of Regulation (EC) No 1653/2004 as last amended by Regulation (EC) No 651/2008 of 9 July 2008 (OJ L 181, 10.7.2008, p. 15).

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

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(11)  The Final Annual Accounts were drawn up on 1 July 2010 and received by the Court on 2 July 2010. The Final Annual Accounts, consolidated with those of the Commission, are published in the Official Journal of the European Union by 15 November of the following year. These can be found on the following website http://eca.europa.eu or http://erc.europa.eu/

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Official Journal of the European Union

(12)  Total value: 168 378 euro.

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(13)  Total value: 227 878 euro.

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(14)  Total value: 320 600 euro.

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(15)  Article 7(3) of the Financial Regulation of the Agency.

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