13.

IMI JU welcomes the positive conclusion of the Court on the legality and regularity of all transactions underlying the annual accounts of the Joint Undertaking with the only exception of material errors detected by IMI JU through its first ex post audits in relation to interim payments for first call claims made prior to the financial year under review. The estimated representative and residual error rates of 5,82 % and 3,64 % respectively that are used as the basis of the Court’s qualified opinion reflect the outcome of 56 audits covering 65 first call cost claims that were accepted in 2010 and 2011 when IMI JU was still in its start-up phase. In addition, (a) The vast majority of financial errors identified in these audits of the 2010 and 2011 claims were relatively small in amounts to be adjusted (less than EUR 5 000 in favour of IMI JU) and clearly arose from misunderstandings of the rules or a lack of attention to the detail of the provisions of the grant agreements. The audits were also, by design, focused in most cases on new or unaudited beneficiaries under the EU research programmes. For such audits a higher rate of error can be expected. (b) The estimated error rate does not reflect the outcome of audits of interim payments made to beneficiaries in 2012 for which a new representative sample of 40 ex post audits is being conducted in 2013 and the first preliminary results are expected at the end of the year. These new audits cover a broader population of claims and beneficiaries, including the first claims of the second call projects as well as the second and third reporting periods of first call projects. (c) IMI has since taken a series of concrete preventive and monitoring measures to help reduce the common types of errors and minimise the inherent underlying risks related to grant management. These measures have included: (i) the review and strengthening of internal ex ante control policies and procedures to be carried out by staff for interim payments after the experience of the first 2 years of operation; (ii) timely revisions of the IMI model grant agreement that have led to more clarity on the legal conditions and requirements of the grant; (iii) the introduction of IMI specific financial guidelines in January 2012 and the issue of an updated version in June 2013, providing participants and their appointed independent auditors for the certificates of financial statements with comprehensive information and guidance on the provisions of the IMI model grant agreement; (iv) the organisation of frequent financial workshops for participants which focus on recurrent causes of errors and prevention; and (v) the introduction in 2012 of integrated business solutions through IMI JU’s dedicated submission and project management Information Technology tool SOFIA (Submission OF Information Application) allowing electronic submission and checking of cost claims, thereby reducing the margin of error. In parallel, the appropriate controls have been taken by IMI JU to ensure that errors in favour of the Joint Undertaking that were detected from the first finalised ex post audits are duly corrected. This is being systematically achieved either through a recovery order or as a set-off against a future payment. In addition, errors that are considered as systematic are also being extended to non-audited claims submitted to the same audited beneficiary. Moreover, IMI JU has continued to implement an intensive annual programme of ex post audits covering 40 % of the total value of interim payments made in the previous year in line with the Ex-Post Audit Strategy approved by the Governing Board. These audits have been highly effective and reliable basis for assessing and monitoring the overall regularity and legality of interim payments on a multiannual basis, and as a basis for detecting and correcting errors found in the audited claims. The Joint Undertaking also maintains close coordination with the European Commission and its agencies involved in the Seventh Framework Programme and shares information on common beneficiaries in order to optimise its audit coverage and effectively mitigate risks of non-compliance. IMI JU remains committed to managing its funding through a trust-based approach with the participants in the projects whilst ensuring sufficient control and accountability. The risk-based preventive and corrective actions already taken by the Joint Undertaking provide a sufficient basis for sound financial management and the gradual reduction of the risk of error in interim payments to beneficiaries on a multiannual basis. This balanced approach will also contribute towards ensuring a successful outcome of the IMI projects as many of them are already starting to generate impressive or promising results, in the interest of patients and society at large. With many projects only starting to generate expenditure, particularly in the case of projects from Calls 3 to 8, the full impact of IMI’s actions can only be seen in the longer term, once more projects submit cost claims and ex post audits cover a greater part of the total population of beneficiaries.