# L_2018248EN.01036101.xml

| 3.10.2018 | EN | Official Journal of the European Union | L 248/361 |
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3.10.2018

EN

Official Journal of the European Union

L 248/361

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RESOLUTION (EU) 2018/1443 OF THE EUROPEAN PARLIAMENT

of 18 April 2018

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 2016

THE EUROPEAN PARLIAMENT,

| — | having regard to its decision on discharge in respect of the implementation of the budget of the ECSEL Joint Undertaking on Electronic Components and Systems for European Leadership for the financial year 2016, |
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having regard to its decision on discharge in respect of the implementation of the budget of the ECSEL Joint Undertaking on Electronic Components and Systems for European Leadership for the financial year 2016,

| — | 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 (A8-0072/2018), |
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having regard to the report of the Committee on Budgetary Control (A8-0072/2018),

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

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

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

| C. | whereas the members of the Joint Undertaking are the Union, the Member States and, on a voluntary basis, the countries associated to 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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C.

whereas the members of the Joint Undertaking are the Union, the Member States and, on a voluntary basis, the countries associated to 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;

| D. | 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 the Private Members; |
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D.

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 the Private Members;

Follow-up to the 2015 discharge

Follow-up to the 2015 discharge

| 1. | Welcomes the fact that the Joint Undertaking has taken steps to assess the implementation of ex-post audits by the national funding authorities (NFAs), and has obtained written statements from the NFAs declaring that the implementation of their national procedures provided for a reasonable assurance of the legality and regularity of transactions; |
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1.

Welcomes the fact that the Joint Undertaking has taken steps to assess the implementation of ex-post

| 2. | Notes with satisfaction the fact that the issue concerning the variation in the methodologies and procedures used by the NFAs is no longer relevant to the implementation of Horizon 2020 projects, as the ex-post audits are undertaken either by the Joint Undertaking or by the Commission; notes that in accordance with the provisions of the common ex-post audit plan for Horizon 2020, there are at present 17 ex-post audits already launched on transactions relating to the activities of the Joint Undertaking; |
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2.

Notes with satisfaction the fact that the issue concerning the variation in the methodologies and procedures used by the NFAs is no longer relevant to the implementation of Horizon 2020 projects, as the ex-post

ex-post

ex-post

Budgetary and financial management

Budgetary and financial management

| 3. | Notes that the Court of Auditors (the ‘Court’), in its report on the Joint Undertaking's annual accounts for the financial year 2016 (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 2016 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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3.

Notes that the Court of Auditors (the ‘Court’), in its report on the Joint Undertaking's annual accounts for the financial year 2016 (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 2016 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;

| 4. | Notes that the Joint Undertaking's final budget for the financial year 2016 included commitment appropriations of EUR 169 300 000 and payment appropriation of EUR 245 000 000; notes that the utilisation rates for commitment and payment appropriations were 99 % and 91 % respectively; |
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4.

Notes that the Joint Undertaking's final budget for the financial year 2016 included commitment appropriations of EUR 169 300 000 and payment appropriation of EUR 245 000 000; notes that the utilisation rates for commitment and payment appropriations were 99 % and 91 % respectively;

| 5. | Notes that the maximum Union contribution to the activities of the Joint Undertaking is EUR 1 185 000 000, to be paid from Horizon 2020; notes with some concern that at least a similar amount should come from the Participating States; |
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5.

Notes that the maximum Union contribution to the activities of the Joint Undertaking is EUR 1 185 000 000, to be paid from Horizon 2020; notes with some concern that at least a similar amount should come from the Participating States;

| 6. | Notes that the Court's report states that the transactions underlying the annual accounts of the Joint Undertaking for the financial year 2016 are, in all material respects, legal and regular; |
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6.

Notes that the Court's report states that the transactions underlying the annual accounts of the Joint Undertaking for the financial year 2016 are, in all material respects, legal and regular;

| 7. | Highlights as a matter of particular concern that the Court issued a qualified opinion on Joint Undertaking's payments related to projects taken over from its legal predecessors, the ARTEMIS and ENIAC Joint Undertakings and invites the Court to reconsider the methodology that results in repetitive qualified opinions based on this reoccurring issue that cannot be solved until the Seventh Framework Programme projects are terminated; notes that the payments made for those projects by the Joint Undertaking in 2016, against certificates of acceptance of costs issued by the NFAs of the Participating States, amounted to EUR 118 000 000, which represents 54 %of the total operational payments made by the Joint Undertaking in 2016; notes that the NFAs compiled ‘declarations of assurance’ on the 2016 expenditure as received on 22 January 2018 from Joint Undertaking; which cover 98 % of the participation fees from the Participating States for the Seventh Framework Programme expenditure in 2016; |
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7.

Highlights as a matter of particular concern that the Court issued a qualified opinion on Joint Undertaking's payments related to projects taken over from its legal predecessors, the ARTEMIS and ENIAC Joint Undertakings and invites the Court to reconsider the methodology that results in repetitive qualified opinions based on this reoccurring issue that cannot be solved until the Seventh Framework Programme projects are terminated; notes that the payments made for those projects by the Joint Undertaking in 2016, against certificates of acceptance of costs issued by the NFAs of the Participating States, amounted to EUR 118 000 000, which represents 54 %of the total operational payments made by the Joint Undertaking in 2016; notes that the NFAs compiled ‘declarations of assurance’ on the 2016 expenditure as received on 22 January 2018 from Joint Undertaking; which cover 98 % of the participation fees from the Participating States for the Seventh Framework Programme expenditure in 2016;

| 8. | Notes that by their closure in June 2014, the ARTEMIS and ENIAC Joint Undertakings had made commitments of EUR 623 000 000 (EUR 181 000 000 and EUR 442 000 000 respectively) for operational activities to be funded under the Seventh Framework Programme; notes, moreover, that the related payments recorded in the Joint Undertaking’s accounts amounted to EUR 411 000 000 (EUR 132 000 000 and EUR 279 000 000 respectively) by the end of 2016; hopes that the payments recorded, as against outstanding commitments, will continue to be met by the ARTEMIS and ENIAC Joint Undertakings; |
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8.

Notes that by their closure in June 2014, the ARTEMIS and ENIAC Joint Undertakings had made commitments of EUR 623 000 000 (EUR 181 000 000 and EUR 442 000 000 respectively) for operational activities to be funded under the Seventh Framework Programme; notes, moreover, that the related payments recorded in the Joint Undertaking’s accounts amounted to EUR 411 000 000 (EUR 132 000 000 and EUR 279 000 000 respectively) by the end of 2016; hopes that the payments recorded, as against outstanding commitments, will continue to be met by the ARTEMIS and ENIAC Joint Undertakings;

| 9. | Notes that the Joint Undertaking had made, by the end of 2016, out of the EUR 1 185 000 000 of Horizon 2020 funds allocated to the Joint Undertaking, commitments of EUR 415 000 000 and payments of EUR 156 000 000 (13 % of the allocated funds) for the implementation of its first wave of projects; |
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9.

Notes that the Joint Undertaking had made, by the end of 2016, out of the EUR 1 185 000 000 of Horizon 2020 funds allocated to the Joint Undertaking, commitments of EUR 415 000 000 and payments of EUR 156 000 000 (13 % of the allocated funds) for the implementation of its first wave of projects;

| 10. | Notes that the 28 Participating States are required to make financial contributions of at least EUR 1 170 000 000 to the operational activities of the Joint Undertaking; notes that, at the end of 2016, the Participating States taking part in the 2014, 2015 and 2016 calls for proposals — 19, 21, and 24 States respectively — had made commitments amounting to EUR 371 000 000 and payments of EUR 56 800 000 (4,9 % of the total required contributions); acknowledges that, notwithstanding the early stage of implementation of the Horizon 2020 projects, the apparently low level of the Participating States’ contributions is related to the fact that some Participating States recognise and report costs only at the end of the projects that they support and recognises the difficulty this presents for the Joint Undertaking; asks that the Participating States find a way to capture project support earlier in the funding cycle; |
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10.

Notes that the 28 Participating States are required to make financial contributions of at least EUR 1 170 000 000 to the operational activities of the Joint Undertaking; notes that, at the end of 2016, the Participating States taking part in the 2014, 2015 and 2016 calls for proposals — 19, 21, and 24 States respectively — had made commitments amounting to EUR 371 000 000 and payments of EUR 56 800 000 (4,9 % of the total required contributions); acknowledges that, notwithstanding the early stage of implementation of the Horizon 2020 projects, the apparently low level of the Participating States’ contributions is related to the fact that some Participating States recognise and report costs only at the end of the projects that they support and recognises the difficulty this presents for the Joint Undertaking; asks that the Participating States find a way to capture project support earlier in the funding cycle;

| 11. | Notes that the Joint Undertaking estimated at the end of 2016 that, out of the EUR 1 657 500 000 of contributions to be made by industry members to the activities of the Joint Undertaking, the members had made in-kind contributions of EUR 202 000 000, compared to the Union’s cash contribution of EUR 264 000 000; |
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11.

Notes that the Joint Undertaking estimated at the end of 2016 that, out of the EUR 1 657 500 000 of contributions to be made by industry members to the activities of the Joint Undertaking, the members had made in-kind contributions of EUR 202 000 000, compared to the Union’s cash contribution of EUR 264 000 000;

Internal controls

Internal controls

| 12. | Expresses concern that in 2012, the Joint Undertaking was informed of insolvency proceedings concerning two beneficiaries but did not attempt to recover the pre-financing payments made to those beneficiaries until 2016, some four years later; notes that by then the proceedings were closed and the outstanding pre-financing of EUR 230 000 had to be waived; acknowledges that the bankruptcy of the two beneficiaries is a legacy of the ENIAC Joint Undertaking and happened before its incorporation into the Joint Undertaking; notes, however, that funding was lost and that this error should be recognised for the purpose of proper accounting; |
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12.

Expresses concern that in 2012, the Joint Undertaking was informed of insolvency proceedings concerning two beneficiaries but did not attempt to recover the pre-financing payments made to those beneficiaries until 2016, some four years later; notes that by then the proceedings were closed and the outstanding pre-financing of EUR 230 000 had to be waived; acknowledges that the bankruptcy of the two beneficiaries is a legacy of the ENIAC Joint Undertaking and happened before its incorporation into the Joint Undertaking; notes, however, that funding was lost and that this error should be recognised for the purpose of proper accounting;

| 13. | Notes that the Joint Undertaking has adopted rules on the prevention and management of conflicts of interests to mitigate the risks related to its governance structure; notes, however, that in 2016 the Joint Undertaking did not apply those rules consistently; observes that the internal register of declarations of conflicts of interest was not managed in line with internal guidelines and was not regularly updated; acknowledges the fact that the minutes of board meetings record all conflicts of interest declared by a delegate: those are baseline documents used to fill in the register; |
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13.

Notes that the Joint Undertaking has adopted rules on the prevention and management of conflicts of interests to mitigate the risks related to its governance structure; notes, however, that in 2016 the Joint Undertaking did not apply those rules consistently; observes that the internal register of declarations of conflicts of interest was not managed in line with internal guidelines and was not regularly updated; acknowledges the fact that the minutes of board meetings record all conflicts of interest declared by a delegate: those are baseline documents used to fill in the register;

Internal audit

Internal audit

| 14. | Notes that in 2016 the internal audit services performed an important risk assessment of the Horizon 2020 grant process of the Joint Undertaking and that as a result it identified five recommendations; |
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14.

Notes that in 2016 the internal audit services performed an important risk assessment of the Horizon 2020 grant process of the Joint Undertaking and that as a result it identified five recommendations;

Human resources management

Human resources management

| 15. | Notes that on 31 December 2016 the Joint Undertaking employed 29 staff; notes that during 2016 the Joint Undertaking filled two positions, in the fields of internal audit capability and external communications and advertised one position for filling a vacant position in the field of information and communication technology; |
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15.

Notes that on 31 December 2016 the Joint Undertaking employed 29 staff; notes that during 2016 the Joint Undertaking filled two positions, in the fields of internal audit capability and external communications and advertised one position for filling a vacant position in the field of information and communication technology;

| 16. | Welcomes the fact that with a view to adapting the structure of the organisation to priorities and needs for expertise, the organisation chart of the Joint Undertaking was updated on 4 January 2016; |
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16.

Welcomes the fact that with a view to adapting the structure of the organisation to priorities and needs for expertise, the organisation chart of the Joint Undertaking was updated on 4 January 2016;

Communication

Communication

| 17. | Recognises the need for the Joint Undertaking to communicate with Union citizens, through the Union institutions, concerning the significant research and collaboration that it is undertaking, stresses the importance of highlighting the real improvements achieved as a consequence of its work, which are an important part of its mandate as well as the fact that it works with other joint undertakings in promoting public awareness of the benefits of their work; |
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17.

Recognises the need for the Joint Undertaking to communicate with Union citizens, through the Union institutions, concerning the significant research and collaboration that it is undertaking, stresses the importance of highlighting the real improvements achieved as a consequence of its work, which are an important part of its mandate as well as the fact that it works with other joint undertakings in promoting public awareness of the benefits of their work;

| 18. | Calls on the Commission to ensure the direct involvement of the Joint Undertaking in the process of the Horizon 2020 mid-term review in the sphere of the further simplification and harmonisation of joint undertakings. |
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18.

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

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