# C_2011366EN.01008701.xml

| 15.12.2011 | EN | Official Journal of the European Union | C 366/87 |
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15.12.2011

EN

Official Journal of the European Union

C 366/87

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REPORT

on the annual accounts of the Research Executive Agency for the financial year 2010, together with the Agency's reply

2011/C 366/16

INTRODUCTION

INTRODUCTION

| 1. | The Research Executive Agency (hereinafter ‘the Agency’), which is located in Brussels, was set up by Commission Decision 2008/46/EC of 14 December 2007 (1). The Agency was established for a limited period beginning on 1 January 2008 and ending on 31 December 2017 with the aim of managing specific Union activities in the field of research (2). On 15 June 2009 the Agency was officially granted its administrative and operational autonomy by the European Commission. |
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1.

The Research Executive Agency (hereinafter ‘the Agency’), which is located in Brussels, was set up by Commission Decision 2008/46/EC of 14 December 2007 (1). The Agency was established for a limited period beginning on 1 January 2008 and ending on 31 December 2017 with the aim of managing specific Union activities in the field of research (2). On 15 June 2009 the Agency was officially granted its administrative and operational autonomy by the European Commission.

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| 2. | The Agency's final 2010 administrative budget was 33,6 million euro. The number of staff employed by the Agency at the end of the year was 408. |
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The Agency's final 2010 administrative budget was 33,6 million euro. The number of staff employed by the Agency at the end of the year was 408.

STATEMENT OF ASSURANCE

STATEMENT OF ASSURANCE

| 3. | Pursuant to the provisions of Article 287(1), second subparagraph, of the Treaty on the Functioning of the European Union, the Court has audited the annual accounts (3) of the Agency, which comprise the ‘financial statements’ (4) and the ‘reports on the implementation of the budget’ (5) for the financial year ended 31 December 2010, and the legality and regularity of the transactions underlying those accounts. |
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3.

Pursuant to the provisions of Article 287(1), second subparagraph, of the Treaty on the Functioning of the European Union, the Court has audited the annual accounts (3) of the Agency, which comprise the ‘financial statements’ (4) and the ‘reports on the implementation of the budget’ (5) for the financial year ended 31 December 2010, and the legality and regularity of the transactions underlying those accounts.

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| 4. | This Statement of Assurance is addressed to the European Parliament and the Council in accordance with Article 14 of Council Regulation (EC) No 58/2003 (6). |
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This Statement of Assurance is addressed to the European Parliament and the Council in accordance with Article 14 of Council Regulation (EC) No 58/2003 (6).

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The Director's responsibility

The Director's responsibility

| 5. | As authorising officer, the Director implements the revenue and expenditure of the budget in accordance with the financial rules of the Agency, under his own responsibility and within the limits of the authorised appropriations (7). The Director is responsible for putting in place (8) the organisational structure and the internal management and control systems and procedures relevant for drawing up final accounts (9) that are free from material misstatement, whether due to fraud or error, and for ensuring that the transactions underlying those accounts are legal and regular. |
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5.

As authorising officer, the Director implements the revenue and expenditure of the budget in accordance with the financial rules of the Agency, under his own responsibility and within the limits of the authorised appropriations (7). The Director is responsible for putting in place (8) the organisational structure and the internal management and control systems and procedures relevant for drawing up final accounts (9) that are free from material misstatement, whether due to fraud or error, and for ensuring that the transactions underlying those accounts are legal and regular.

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The Court's responsibility

The Court's responsibility

| 6. | The Court's responsibility is to provide, on the basis of its audit, a statement of assurance as to the reliability of the annual accounts of the Agency and the legality and regularity of the transactions underlying them. |
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6.

The Court's responsibility is to provide, on the basis of its audit, a statement of assurance as to the reliability of the annual accounts of the Agency and the legality and regularity of the transactions underlying them.

| 7. | The Court conducted its audit in accordance with the IFAC and ISSAI (10) International Auditing Standards and Codes of Ethics. Those standards require the Court to comply with ethical requirements and to plan and perform the audit so as to obtain reasonable assurance as to whether the accounts are free of material misstatement and whether the underlying transactions are legal and regular. |
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7.

The Court conducted its audit in accordance with the IFAC and ISSAI (10) International Auditing Standards and Codes of Ethics. Those standards require the Court to comply with ethical requirements and to plan and perform the audit so as to obtain reasonable assurance as to whether the accounts are free of material misstatement and whether the underlying transactions are legal and regular.

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| 8. | The Court's audit involves performing procedures to obtain audit evidence of the amounts and disclosures in the accounts and of the legality and regularity of the transactions underlying them. The procedures selected, including its assessment of the risks of material misstatement of the accounts or of illegal or irregular transactions, whether due to fraud or error, depend on its audit judgement. In making those risk assessments, internal controls relevant to the entity's preparation and presentation of accounts are considered in order to design audit procedures that are appropriate in the circumstances. The Court's audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the accounts. |
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8.

The Court's audit involves performing procedures to obtain audit evidence of the amounts and disclosures in the accounts and of the legality and regularity of the transactions underlying them. The procedures selected, including its assessment of the risks of material misstatement of the accounts or of illegal or irregular transactions, whether due to fraud or error, depend on its audit judgement. In making those risk assessments, internal controls relevant to the entity's preparation and presentation of accounts are considered in order to design audit procedures that are appropriate in the circumstances. The Court's audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the accounts.

| 9. | The Court believes that the audit evidence obtained is sufficient and appropriate to provide a basis for the opinions set out below. |
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The Court believes that the audit evidence obtained is sufficient and appropriate to provide a basis for the opinions set out below.

Opinion on the reliability of the accounts

Opinion on the reliability of the accounts

| 10. | In the Court's opinion, the Agency's Annual Accounts (11) fairly present, in all material respects, its financial position as of 31 December 2010 and the results of its operations and its cash flows for the year then ended, in accordance with the provisions of its Financial Regulation. |
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10.

In the Court's opinion, the Agency's Annual Accounts (11) fairly present, in all material respects, its financial position as of 31 December 2010 and the results of its operations and its cash flows for the year then ended, in accordance with the provisions of its Financial Regulation.

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Opinion on the legality and the regularity of the transactions underlying the accounts

Opinion on the legality and the regularity of the transactions underlying the accounts

| 11. | In the Court's opinion, the transactions underlying the annual accounts of the Agency for the financial year ended 31 December 2010 are, in all material respects, legal and regular. |
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11.

In the Court's opinion, the transactions underlying the annual accounts of the Agency for the financial year ended 31 December 2010 are, in all material respects, legal and regular.

This Report was adopted by Chamber IV, headed by Mr Igors LUDBORŽS, Member of the Court of Auditors, in Luxembourg at its meeting of 20 September 2011.

For the Court of Auditors

Vítor Manuel da SILVA CALDEIRA

President

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(1)  OJ L 11, 15.1.2008, p. 9.

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

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Annex

(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 a description of the main 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 (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 (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 24 May 2011 and received by the Court on 6 July 2011. The Final Annual Accounts can be found on the following website http://eca.europa.eu or http://ec.europa.eu/research/rea/

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ANNEX

Research Executive Agency (Brussels)

Competences and activities

| Areas of Union competence deriving from the Treaty


  (Articles 179 and 180 of the Treaty on the Functioning of the European Union) | The Union shall have the objective of strengthening its scientific and technological bases by achieving a European research area in which researchers, scientific knowledge and technology circulate freely, and encouraging it to become more competitive, including in its industry.
  For this purpose the Union shall encourage undertakings, including SMEs, research centres and universities in their research and technological development activities of high quality; it shall support their efforts to cooperate with one another, aiming, notably, at permitting researchers to cooperate freely across borders and at enabling undertakings to exploit the internal market potential to the full, (...) the definition of common standards and the removal of legal and fiscal obstacles to that cooperation.
  In pursuing these objectives, the Union shall carry out the following activities, complementing the activities carried out in the Member States:






  (a) | implementation of research, technological development and demonstration programmes, by promoting cooperation with and between undertakings, research centres and universities; |
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Areas of Union competence deriving from the Treaty

(Articles 179 and 180 of the Treaty on the Functioning of the European Union)

The Union shall have the objective of strengthening its scientific and technological bases by achieving a European research area in which researchers, scientific knowledge and technology circulate freely, and encouraging it to become more competitive, including in its industry.

For this purpose the Union shall encourage undertakings, including SMEs, research centres and universities in their research and technological development activities of high quality; it shall support their efforts to cooperate with one another, aiming, notably, at permitting researchers to cooperate freely across borders and at enabling undertakings to exploit the internal market potential to the full, (...) the definition of common standards and the removal of legal and fiscal obstacles to that cooperation.

In pursuing these objectives, the Union shall carry out the following activities, complementing the activities carried out in the Member States:

(a)

implementation of research, technological development and demonstration programmes, by promoting cooperation with and between undertakings, research centres and universities;

| (b) | promotion of cooperation in the field of Union research, technological development and demonstration with third countries and international organisations; |
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(b)

promotion of cooperation in the field of Union research, technological development and demonstration with third countries and international organisations;

| (c) | dissemination and optimisation of the results of activities in Union research, technological development and demonstration; |
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(c)

dissemination and optimisation of the results of activities in Union research, technological development and demonstration;

| (d) | stimulation of the training and mobility of researchers in the Union. |
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(d)

stimulation of the training and mobility of researchers in the Union.

Competences of the Agency

(Commission Decision 2008/46/EC of 14 December 2007)

Objective

The objective of the Agency is to manage the Programmes entrusted to it under FP7 (the People Programme, the SME actions of the Capacities Programme, and the Space and Security themes of the Cooperation Programme) efficiently and effectively, to deliver efficient and effective services to the research community and to provide centralised FP7 support services to the respective Commission services for all areas of the Cooperation, Capacities and People Specific Programmes.

With regard to the efficient and effective Programmes implementation, the Agency — as promoter of the European Research Area — aims at improving project management, establishing close contact with final beneficiaries and providing high visibility of the European Union.

Tasks

With regard to the management of projects, the Agency concludes and manages grant agreements, involving the following operations:

| — | preparation and publication of calls for proposals, |
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preparation and publication of calls for proposals,

| — | evaluation of proposals, |
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evaluation of proposals,

| — | preparation and signature of grant agreements, |
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preparation and signature of grant agreements,

| — | monitoring the implementation of projects including acceptance of reports and other deliverables, |
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monitoring the implementation of projects including acceptance of reports and other deliverables,

| — | payments, recoveries, and application of sanctions within the meaning of Article 114(4) of the general Financial Regulation, notably when errors in declared costs have been identified following ex-post audits at the level of the final beneficiaries, |
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payments, recoveries, and application of sanctions within the meaning of Article 114(4) of the general Financial Regulation, notably when errors in declared costs have been identified following ex-post audits at the level of the final beneficiaries,

| — | ex-post publicity and dissemination of results. |
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ex-post publicity and dissemination of results.

With regard to FP7 Support Services, the Agency performs the following tasks:

| — | administrative support for call publication, |
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administrative support for call publication,

| — | management of the electronic reception of proposals, |
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management of the electronic reception of proposals,

| — | support for remote and on-site evaluations, |
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support for remote and on-site evaluations,

| — | support for the preparation of appointment letters and payments for experts, |
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support for the preparation of appointment letters and payments for experts,

| — | management of the Central FP7 participants database (Unique Registration Facility — URF), including support for financial capacity checks of selected beneficiaries, |
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management of the Central FP7 participants database (Unique Registration Facility — URF), including support for financial capacity checks of selected beneficiaries,

| — | management of the Research Enquiry Service. |
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management of the Research Enquiry Service.

Governance

1 —   Steering Committee

Comprises five members appointed by the Commission. It adopts the Agency's organisation chart and its Annual Work Programme after approval by the Commission. In addition, it adopts the administrative budget of the Agency and its Annual Activity Report.

2 —   Director

Appointed by the European Commission, manages the Agency together with the Steering Committee, implements the administrative budget, sets up management and internal control systems adapted to the tasks entrusted to the Agency and prepares the reports which the Agency must present to the Commission.

3 —   External audit

Court of Auditors.

4 —   Discharge authority

Parliament, acting on a recommendation from the Council.

Resources made available to the Agency in 2010 (2009)

Administrative Budget

33,6 (21,6) million euro. The Agency implements the administrative budget autonomously.

The Agency implements under a delegation decision of the Commission 962,6 (811,2) million euro of commitment appropriations and 709 (679) million euro of payment appropriations.

Staff at 31 December

Temporary staff posts: 106 (88) listed in the establishment plan of which 99 (72) occupied.

Contract staff: 318 (261) staff planned of which 309 (238) were in place as of 31 December 2010.

Total staff: 408 (310) undertaking the following tasks:

| — | Programme implementation: 254 (171) |
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Programme implementation: 254 (171)

| — | FP7 Support Services: 81 (73) |
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FP7 Support Services: 81 (73)

| — | Management and Administrative functions: 73 (66) |
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Management and Administrative functions: 73 (66)

Products and services in 2010 (2009)

For the People Programme, nine calls were closed in 2010 and nine evaluations completed. 1 670 new grant agreements were signed and 1 732 payments made (excluding payments for expert evaluators). The Agency now manages a total of 4 125(2 495) projects under this programme.

For the SME actions of the Capacities Programme, one call was closed and one evaluation completed. 163 new grant agreements were signed and 243 payments made (excluding payments for expert evaluators). The Agency manages a total of 408 (247) projects under this scheme.

For the Space and Security themes of the Cooperation Programme, two calls were closed in 2010 and two evaluations completed. 86 new grant agreements were signed and 133 payments made (excluding payments to expert evaluators). The Agency now manages a total of 153 (78) projects under these themes.

As regards the FP7 support services, the results obtained for 2010 are as follows (figures for 2009 refer to the period 15.6.2009-31.12.2009 only):

| — | 88 (64) call publications supported, |
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88 (64) call publications supported,

| — | 21 766(13 832) proposals received through the electronic proposal submission tool, |
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21 766(13 832) proposals received through the electronic proposal submission tool,

| — | 3 847(3 067) expert evaluators contracted and 2 615(912) expert payments made (for programmes managed by the Agency only), |
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3 847(3 067) expert evaluators contracted and 2 615(912) expert payments made (for programmes managed by the Agency only),

| — | 5 896(2 795) validations of participants completed, |
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5 896(2 795) validations of participants completed,

| — | 7 171(3 772) replies sent following questions to the Research Enquiry Service. |
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7 171(3 772) replies sent following questions to the Research Enquiry Service.

Source: Information supplied by the Agency.

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THE AGENCY'S REPLY

| 1. | The Agency has taken note of the Court's report. |
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The Agency has taken note of the Court's report.

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