# L_2018248EN.01037101.xml

| 3.10.2018 | EN | Official Journal of the European Union | L 248/371 |
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3.10.2018

EN

Official Journal of the European Union

L 248/371

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RESOLUTION (EU) 2018/1449 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 of the Innovative Medicines Initiative 2 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 Innovative Medicines Initiative 2 Joint Undertaking 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 Innovative Medicines Initiative 2 Joint Undertaking 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 (A8-0075/2018), |
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having regard to the report of the Committee on Budgetary Control (A8-0075/2018),

| A. | whereas the Joint Undertaking for the implementation of the Joint Technology Initiative on Innovative Medicines (‘IMI Joint Undertaking’) was set up in December 2007 for a period of 10 years to significantly improve the efficiency and effectiveness of the drug development process with the long-term aim that the pharmaceutical sector produce more effective and safer innovative medicines; |
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A.

whereas the Joint Undertaking for the implementation of the Joint Technology Initiative on Innovative Medicines (‘IMI Joint Undertaking’) was set up in December 2007 for a period of 10 years to significantly improve the efficiency and effectiveness of the drug development process with the long-term aim that the pharmaceutical sector produce more effective and safer innovative medicines;

| B. | whereas following the adoption of Regulation (EU) No 557/2014 in May 2014 the Innovative Medicines Initiative 2 Joint Undertaking (‘IMI 2 Joint Undertaking’) replaced the IMI Joint Undertaking in June 2014 with the aim of finalising research activities of the Seventh Framework Programme and extended the lifetime of the Joint Undertaking until 31 December 2024; |
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B.

whereas following the adoption of Regulation (EU) No 557/2014 in May 2014 the Innovative Medicines Initiative 2 Joint Undertaking (‘IMI 2 Joint Undertaking’) replaced the IMI Joint Undertaking in June 2014 with the aim of finalising research activities of the Seventh Framework Programme and extended the lifetime of the Joint Undertaking until 31 December 2024;

| C. | whereas the Union, which is represented by the Commission, and the European Federation of Pharmaceutical Industries and Associations are the founding members of the Joint Undertaking; |
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C.

whereas the Union, which is represented by the Commission, and the European Federation of Pharmaceutical Industries and Associations are the founding members of the Joint Undertaking;

| D. | whereas the maximum contribution for the period of 10 years from the Union to the IMI Joint Undertaking is EUR 1 000 000 000, to be paid from the budget of the Seventh Framework Programme and the founding members are to contribute equally to the running costs, each with an amount not exceeding 4 % of the total Union contribution; |
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D.

whereas the maximum contribution for the period of 10 years from the Union to the IMI Joint Undertaking is EUR 1 000 000 000, to be paid from the budget of the Seventh Framework Programme and the founding members are to contribute equally to the running costs, each with an amount not exceeding 4 % of the total Union contribution;

| E. | whereas the maximum contribution for the period of 10 years from the Union to the IMI 2 Joint Undertaking is EUR 1 638 000 000, to be paid from the budget of Horizon 2020 and the members, other than the Commission, have to contribute 50 % of the running costs and should contribute to operational costs through cash or in-kind contributions, or both, equal to the financial contribution of the Union; |
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E.

whereas the maximum contribution for the period of 10 years from the Union to the IMI 2 Joint Undertaking is EUR 1 638 000 000, to be paid from the budget of Horizon 2020 and the members, other than the Commission, have to contribute 50 % of the running costs and should contribute to operational costs through cash or in-kind contributions, or both, equal to the financial contribution of the Union;

Budgetary and financial management

Budgetary and financial management

| 1. | Notes that, in the Court of Auditors' (the ‘Court’) opinion, the accounts of the IMI 2 Joint Undertaking for the year ending 31 December 2016 present fairly, in all material respects, the financial position of the IMI 2 Joint Undertaking at 31 December 2016, the results of its operations, its cash flows, and the changes in net assets for the year then ended, in accordance with its Financial Regulation and with accounting rules adopted by the Commission’s accounting officer and are based on internationally accepted accounting standards for the public sector; |
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1.

Notes that, in the Court of Auditors' (the ‘Court’) opinion, the accounts of the IMI 2 Joint Undertaking for the year ending 31 December 2016 present fairly, in all material respects, the financial position of the IMI 2 Joint Undertaking at 31 December 2016, the results of its operations, its cash flows, and the changes in net assets for the year then ended, in accordance with its Financial Regulation and with accounting rules adopted by the Commission’s accounting officer and are based on internationally accepted accounting standards for the public sector;

| 2. | Notes the clean opinion of the Court on the legality and regularity of transactions underlying the annual accounts of the IMI 2 Joint Undertaking for the year 2016 which are legal and regular in all material respects; |
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2.

Notes the clean opinion of the Court on the legality and regularity of transactions underlying the annual accounts of the IMI 2 Joint Undertaking for the year 2016 which are legal and regular in all material respects;

| 3. | Notes that the final 2016 budget available for the Seventh Framework Programme and Horizon 2020 programme implementation included commitment appropriations of EUR 307 053 000 and payment appropriations of EUR 263 423 000; notes that the utilisation rates for commitment appropriations were 94,1 % (increase of 3,06 % compared to 2015); |
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3.

Notes that the final 2016 budget available for the Seventh Framework Programme and Horizon 2020 programme implementation included commitment appropriations of EUR 307 053 000 and payment appropriations of EUR 263 423 000; notes that the utilisation rates for commitment appropriations were 94,1 % (increase of 3,06 % compared to 2015);

| 4. | Regrets to note that payment appropriations were for the third consecutive year below 75 %: in 2016 they were at 69,6 %; notes, however, that the number of payments increased by 63 % (from 46 to 75) and the paid amount by 30 % (from EUR 134 514 000 to EUR 175 182 730) compared to 2015 and represent the highest number for the IMI 2 Joint Undertaking so far. Invites the IMI 2 Joint Undertaking to present updated information to the discharge authority and to improve the payment appropriations for the procedure next year; |
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4.

Regrets to note that payment appropriations were for the third consecutive year below 75 %: in 2016 they were at 69,6 %; notes, however, that the number of payments increased by 63 % (from 46 to 75) and the paid amount by 30 % (from EUR 134 514 000 to EUR 175 182 730) compared to 2015 and represent the highest number for the IMI 2 Joint Undertaking so far. Invites the IMI 2 Joint Undertaking to present updated information to the discharge authority and to improve the payment appropriations for the procedure next year;

| 5. | Notes that out of the EUR 1 000 000 000 of the Seventh Framework Programme funds allocated to the IMI Joint Undertaking, by the end of 2016 the IMI 2 Joint Undertaking had made commitments of EUR 966 000 000 and payments of EUR 648 000 000; observes that the high level of outstanding payments of EUR 318 000 000 (32 %) was mainly due to the delayed start of the Seventh Framework Programme activities during the first years of the IMI Joint Undertaking; |
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5.

Notes that out of the EUR 1 000 000 000 of the Seventh Framework Programme funds allocated to the IMI Joint Undertaking, by the end of 2016 the IMI 2 Joint Undertaking had made commitments of EUR 966 000 000 and payments of EUR 648 000 000; observes that the high level of outstanding payments of EUR 318 000 000 (32 %) was mainly due to the delayed start of the Seventh Framework Programme activities during the first years of the IMI Joint Undertaking;

| 6. | Notes that out of the EUR 1 000 000 000 of contributions to be made by the industry members to the activities of the IMI Joint Undertaking, by the end of 2016 the IMI 2 Joint Undertaking had validated in-kind and cash contributions of EUR 403 000 000; points out that a further EUR 103 000 000 of in-kind contributions without validation had been reported by the members to the IMI 2 Joint Undertaking; highlights the fact that consequently, at the end of 2016, the in-kind and cash contributions of the industry members totalled EUR 506 000 000, compared to the Union’s cash contributions to the Seventh Framework Programme activities of the IMI Joint Undertaking, which amounted to EUR 728 000 000; |
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6.

Notes that out of the EUR 1 000 000 000 of contributions to be made by the industry members to the activities of the IMI Joint Undertaking, by the end of 2016 the IMI 2 Joint Undertaking had validated in-kind and cash contributions of EUR 403 000 000; points out that a further EUR 103 000 000 of in-kind contributions without validation had been reported by the members to the IMI 2 Joint Undertaking; highlights the fact that consequently, at the end of 2016, the in-kind and cash contributions of the industry members totalled EUR 506 000 000, compared to the Union’s cash contributions to the Seventh Framework Programme activities of the IMI Joint Undertaking, which amounted to EUR 728 000 000;

| 7. | Notes with concern that out of the EUR 1 638 000 000 of Horizon 2020 funds allocated to the IMI Joint Undertaking, by the end of 2016 the IMI 2 Joint Undertaking had made commitments of EUR 515 000 000 (31 %) and payments of EUR 111 000 000 (7 % of the allocated funds) for the implementation of its first wave of projects; acknowledges the fact that the low level of payments is mainly due to the time required by project consortia to conclude Horizon 2020 grant agreements with the industry partners which delays IMI Joint Undertaking planned pre-financing for the given year; notes moreover that projects in Ebola and antimicrobial resistance programmes have claimed less funds than foreseen in the initial project budgets, which was mainly due to the decline of the epidemic and which were mentioned in previous reports by the Court and by the IMI 2 Joint Undertaking; |
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7.

Notes with concern that out of the EUR 1 638 000 000 of Horizon 2020 funds allocated to the IMI Joint Undertaking, by the end of 2016 the IMI 2 Joint Undertaking had made commitments of EUR 515 000 000 (31 %) and payments of EUR 111 000 000 (7 % of the allocated funds) for the implementation of its first wave of projects; acknowledges the fact that the low level of payments is mainly due to the time required by project consortia to conclude Horizon 2020 grant agreements with the industry partners which delays IMI Joint Undertaking planned pre-financing for the given year; notes moreover that projects in Ebola and antimicrobial resistance programmes have claimed less funds than foreseen in the initial project budgets, which was mainly due to the decline of the epidemic and which were mentioned in previous reports by the Court and by the IMI 2 Joint Undertaking;

| 8. | Notes that out of the EUR 1 638 000 000 of in-kind and cash contributions to be made by the industry members and associated partners to the activities of the IMI 2 Joint Undertaking, EUR 47 200 000 had been validated by the executive director and a further amount of EUR 36 600 000 had been reported by the end of 2016; notes moreover that consequently, at the end of 2016, the total contributions of the industry members to the Horizon 2020 activities of the IMI 2 Joint Undertaking amounted to EUR 83 800 000, compared to the Union’s cash contribution of EUR 135 000 000; notes that the difference was caused by advance payments made to beneficiaries to kick-start projects activities; highlights the fact that, at this stage of programme implementation, commitments of EUR 275 800 000 of Union funds and EUR 249 100 000 of industry in-kind contributions have been allocated to 25 Horizon 2020 projects; |
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8.

Notes that out of the EUR 1 638 000 000 of in-kind and cash contributions to be made by the industry members and associated partners to the activities of the IMI 2 Joint Undertaking, EUR 47 200 000 had been validated by the executive director and a further amount of EUR 36 600 000 had been reported by the end of 2016; notes moreover that consequently, at the end of 2016, the total contributions of the industry members to the Horizon 2020 activities of the IMI 2 Joint Undertaking amounted to EUR 83 800 000, compared to the Union’s cash contribution of EUR 135 000 000; notes that the difference was caused by advance payments made to beneficiaries to kick-start projects activities; highlights the fact that, at this stage of programme implementation, commitments of EUR 275 800 000 of Union funds and EUR 249 100 000 of industry in-kind contributions have been allocated to 25 Horizon 2020 projects;

Anti-Fraud Strategy

Anti-Fraud Strategy

| 9. | Notes that the IMI 2 Joint Undertaking has an anti-fraud strategy aligned with the common anti-fraud strategy of the Directorate-General for Research and Innovation; regrets to discover that in 2016 one instance of suspicion was communicated to OLAF which decided to dismiss the case based on the documentation provided; notes that the IMI 2 Joint Undertaking undertook in parallel an independent financial audit which concluded with a minor adjustment and no significant material findings; notes with satisfaction the effectiveness of the preventive and corrective anti-fraud measures taken in accordance with the anti-fraud strategy; recognises the need for further vigilance in that respect; |
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9.

Notes that the IMI 2 Joint Undertaking has an anti-fraud strategy aligned with the common anti-fraud strategy of the Directorate-General for Research and Innovation; regrets to discover that in 2016 one instance of suspicion was communicated to OLAF which decided to dismiss the case based on the documentation provided; notes that the IMI 2 Joint Undertaking undertook in parallel an independent financial audit which concluded with a minor adjustment and no significant material findings; notes with satisfaction the effectiveness of the preventive and corrective anti-fraud measures taken in accordance with the anti-fraud strategy; recognises the need for further vigilance in that respect;

Internal audit

Internal audit

| 10. | Notes that the Internal Audit Service (IAS) issued the final audit report on ‘Controls over in-kind contributions to the IMI 2 Joint Undertaking on 21 January 2016; highlights the fact that the IAS recommended that IMI 2 Joint Undertaking provide more precise instructions on the certification methodology to be applied by the external auditors and strengthen the review and approval process of the certificates, develop a strategy, procedures and guidance with clear managerial responsibilities and timelines of actions for the control of in-kind contributions, increase the value of operational and financial ex-ante and ex-post controls and perform checks on the quality of accounting data; |
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10.

Notes that the Internal Audit Service (IAS) issued the final audit report on ‘Controls over in-kind contributions to the IMI 2 Joint Undertaking on 21 January 2016; highlights the fact that the IAS recommended that IMI 2 Joint Undertaking provide more precise instructions on the certification methodology to be applied by the external auditors and strengthen the review and approval process of the certificates, develop a strategy, procedures and guidance with clear managerial responsibilities and timelines of actions for the control of in-kind contributions, increase the value of operational and financial ex-ante

ex-post

| 11. | Welcomes the fact that IMI 2 Joint Undertaking prepared an action plan approved by the IAS on 26 February 2016 and all four recommendations were implemented within the agreed deadlines in the course of 2016, thus mitigating the residual risk towards reasonable assurance; |
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11.

Welcomes the fact that IMI 2 Joint Undertaking prepared an action plan approved by the IAS on 26 February 2016 and all four recommendations were implemented within the agreed deadlines in the course of 2016, thus mitigating the residual risk towards reasonable assurance;

Internal control systems

Internal control systems

| 12. | Acknowledges the fact that the IMI 2 Joint Undertaking has set up effective ex-ante control procedures based on financial and operational desk reviews, and it performs ex-post audits of grant cost claims under the Seventh Framework Programme; notes that the residual rate for the ex-post audits reported by the IMI 2 Joint Undertaking at the end of 2016 was 1,67 %; |
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12.

Acknowledges the fact that the IMI 2 Joint Undertaking has set up effective ex-ante

ex-post

ex-post

| 13. | Regrets to note that at the end of 2016 — the third year of Horizon 2020 implementation — the IMI 2 Joint Undertaking had only partially completed the integration of its control systems with the Commission’s common Horizon 2020 grant management and monitoring tools; and that prioritisation be given to complete the integration process quickly; acknowledges, however, the significant progress achieved in close cooperation with the Commission services which should enable all IMI 2 Joint Undertaking project reporting, monitoring and payment to be carried out via the common Horizon 2020 tools as of the beginning of 2018; |
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13.

Regrets to note that at the end of 2016 — the third year of Horizon 2020 implementation — the IMI 2 Joint Undertaking had only partially completed the integration of its control systems with the Commission’s common Horizon 2020 grant management and monitoring tools; and that prioritisation be given to complete the integration process quickly; acknowledges, however, the significant progress achieved in close cooperation with the Commission services which should enable all IMI 2 Joint Undertaking project reporting, monitoring and payment to be carried out via the common Horizon 2020 tools as of the beginning of 2018;

| 14. | Regrets to note that the IMI 2 Joint Undertaking experienced some delays in payments to beneficiaries (universities, research organisations and small and medium-sized enterprises); notes that the time-to-pay target of 90 days for interim payments was exceeded by 5 days in 2016; acknowledges the corrective measures taken by the IMI 2 Joint Undertaking to improve the situation, notably by enhancing cooperation with project consortia, by reviewing internal procedures and by hiring more staff for the financial unit; acknowledges in this respect that the average time-to-pay for final payments of costs claimed by beneficiaries was 62 days; |
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14.

Regrets to note that the IMI 2 Joint Undertaking experienced some delays in payments to beneficiaries (universities, research organisations and small and medium-sized enterprises); notes that the time-to-pay target of 90 days for interim payments was exceeded by 5 days in 2016; acknowledges the corrective measures taken by the IMI 2 Joint Undertaking to improve the situation, notably by enhancing cooperation with project consortia, by reviewing internal procedures and by hiring more staff for the financial unit; acknowledges in this respect that the average time-to-pay for final payments of costs claimed by beneficiaries was 62 days;

Communication

Communication

| 15. | Recognises the need for the IMI 2 Joint Undertaking to communicate with Union citizens through the institutions of the Union about the important research and collaboration that it is undertaking, stresses the importance of highlighting real improvements as a consequence of this work, notes that the results from such expenditure is an important part of the IMI 2 Joint Undertaking’s mandate and that it works with other joint undertakings in promoting public awareness of the benefits of their work; |
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15.

Recognises the need for the IMI 2 Joint Undertaking to communicate with Union citizens through the institutions of the Union about the important research and collaboration that it is undertaking, stresses the importance of highlighting real improvements as a consequence of this work, notes that the results from such expenditure is an important part of the IMI 2 Joint Undertaking’s mandate and that it works with other joint undertakings in promoting public awareness of the benefits of their work;

| 16. | Calls on the Commission to ensure the direct involvement of the IMI 2 Joint Undertaking in the process of the Horizon 2020 mid-term review in the sphere of further simplifications and harmonisation of joint undertakings. |
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16.

Calls on the Commission to ensure the direct involvement of the IMI 2 Joint Undertaking in the process of the Horizon 2020 mid-term review in the sphere of further simplifications and harmonisation of joint undertakings.

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