Report on the annual accounts of the Artemis Joint Undertaking for the financial year ended 31 December 2009 , together with the replies of the Joint Undertaking
Date: 2010-10-20
Institutions: European Court of Auditors
Subjects: EU office or agency, European Court of Auditors, administration of the Institutions, competence of the institution, financial control, implementation of the budget, report








C_2010342EN.01000101.xml










16.12.2010   


EN


Official Journal of the European Union


C 342/1





REPORT
on the annual accounts of the Artemis Joint Undertaking for the financial year ended 31 December 2009, together with the replies of the Joint Undertaking
2010/C 342/01

TABLE OF CONTENTS








 



Paragraph




Page





INTRODUCTION …


1-5


2




STATEMENT OF ASSURANCE …


6-15


2




COMMENTS ON BUDGETARY AND FINANCIAL MANAGEMENT …


16-19


3




OTHER MATTERS …


20-25


3




Table …


4





Replies of the Joint Undertaking …


6





INTRODUCTION







1.


The Artemis Joint Undertaking, located in Brussels, was set up in December 2007 (1) for a period of 10 years.










2.


The founding members of the Artemis Joint Undertaking are the European Union represented by the Commission, Belgium, Denmark, Germany, Estonia, Ireland, Greece, Spain, France, Italy, Hungary, the Netherlands, Austria, Portugal, Romania, Slovenia, Finland, Sweden, the United Kingdom and ArtemisIA, an association representing companies and other research organisations active in the field of Embedded Computing Systems in Europe. At the end of 2009, Cyprus, the Czech Republic, Latvia and Norway were also members of the Joint Undertaking.










3.


The main objective of the Joint Undertaking is to define and implement a ‘Research Agenda’ for the development of key technologies for Embedded Computing Systems across different application areas in order to strengthen European competitiveness and sustainability, and allow the emergence of new markets and societal applications (see Table).










4.


The maximum EU contribution to the Artemis Joint Undertaking to cover running costs and research activities is 420 million euro to be paid from the budget of the Seventh Research Framework Programme. The ArtemisIA association is to make a maximum contribution of 30 million euro to the running costs. Artemis Member States are to make in-kind contributions to the running costs (by facilitating the implementation of projects), and to provide financial contributions of at least 1,8 times the EU contribution. In-kind contributions are also to be provided by research organisations participating in projects.










5.


The Joint Undertaking started to work autonomously on 26 October 2009.



























































































































15.


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





COMMENTS ON BUDGETARY AND FINANCIAL MANAGEMENT



Implementation of the budget








16.


The final budget included commitment appropriations of 46 million euro and payment appropriations of 8 million euro. The utilisation rates for commitment and payment appropriations were 81 % and 20 % respectively. The relatively low utilisation rate for payment appropriations reflects the start-up phase of the Artemis research programme.






Presentation of the accounts: members’ contributions








17.


The Court notes that the activities of the EU Joint Undertakings are funded by contributions from their members, and that the Joint Undertakings have no capital as such. The Court recommended that this specific feature of the Joint Undertakings is clearly disclosed in the accounts.










18.


The Court therefore welcomes the fact that, in accordance with EU Accounting Rule 1 (Group Accounting), the contributions from members are presented under Net Assets in the Balance Sheets of the Joint Undertakings, and that further information on the nature of the contributions is provided in the Notes to the Accounts.










19.


The Court considers that the presentation of members’ contributions in the Accounts of the Joint Undertakings should be harmonised as far as possible and notes the intention of the Commission to issue detailed guidance in this respect to the Joint Undertakings.





OTHER MATTERS



Internal control systems








20.


The Joint Undertaking is in a start-up phase and has not completely implemented its internal controls and financial information system during 2009. At the end of the year, the underlying business processes had not yet been formalised and had not been validated by the Accounting Officer as required by the Financial Rules of the Joint Undertaking.










21.


In particular, further work is needed in the documentation of IT processes and activities, and the mapping of IT risks. The Joint Undertaking had also not developed a Business Continuity Plan nor a data protection policy in 2009.






Lack of host State agreement








22.


Article 17 of Regulation (EC) No 74/2008 setting up the Artemis Joint Undertaking states that a host agreement should be concluded between the Artemis Joint Undertaking and Belgium concerning office accommodation, privileges and immunities and other support to be provided by Belgium to the Artemis Joint Undertaking. However, by 2009 year end no such agreement had been concluded.






Internal Audit Function and Commission Internal Audit Service








23.


Article 73 of the Financial Rules of the Joint Undertaking stipulates that the Joint Undertaking should have an internal auditing function which must comply with relevant international standards. However, at the end of 2009, this important element of the internal control system had not been set up.










24.


In line with the views expressed in its Opinions No 4/2008 on the Financial Regulation of the Fusion for Energy Joint Undertaking and No 2/2010 on the Financial Regulation of SESAR Joint Undertaking, the Court considers that the current provision in the Statutes of the Joint Undertaking on the role of the Commission’s internal auditor should be clarified.










25.


Article 10 of the Statutes of the Artemis Joint Undertaking states that the functions of the Commission’s internal auditor are to be carried out under the responsibility of the Governing Board of the Joint Undertaking. Such an arrangement is appropriate for the internal auditing function within the Joint Undertaking but not for the Commission’s internal auditor, whose responsibilities relate to the general EU budget as a whole.





This report was adopted by Chamber II, headed by Mr Morten LEVYSOHN, Member of the Court of Auditors, in Luxembourg at its meeting of 20 October 2010.


For the Court of Auditors

Vítor Manuel da SILVA CALDEIRA

President





Table


Artemis Joint Undertaking (Brussels)











Areas of Union competence deriving from the Treaty


Competences of the Joint Undertaking as defined in Regulation (EC) No 74/2008


Governance


Resources made available to the Joint Undertaking in 2009


Main achievements for 2009





Treaty on the Functioning of the European Union


Article 187

(ex Article 171 EC)
The Union may set up joint undertakings or any other structure necessary for the efficient execution of Union research, technological development and demonstration programmes.



Objectives

The Artemis Joint Undertaking shall contribute to the implementation of the Seventh Framework Programme and the Theme ‘Information and communication technologies’ of the Specific Programme ‘Cooperation’. It shall in particular:






(a)


define and implement a ‘Research Agenda’ for the development of key technologies for Embedded Computing Systems across different application areas in order to strengthen European competitiveness and sustainability, and allow the emergence of new markets and societal applications. Activities for the implementation of the Research Agenda are hereinafter referred to as ‘R & D Activities’;










(b)


support the implementation of the R & D Activities notably by awarding funding to participants in selected projects following competitive calls for proposals;










(c)


promote a public-private partnership aimed at mobilising and pooling Union, national and private efforts, increasing overall R & D investments in the field of Embedded Computing Systems, and fostering collaboration between the public and private sectors;










(d)


achieve synergy and coordination of European R & D efforts into the field of Embedded Computing Systems including, when added value can be created, the progressive integration in the Artemis Joint Undertaking of the related activities in this field currently implemented through intergovernmental R & D schemes (Eureka);










(e)


promote the involvement of SMEs in its activities in line with the objectives of the Seventh Framework Programme.







Tasks







(a)


to ensure the establishment and sustainable management of the JTI on Embedded Computing Systems;










(b)


to define and make any necessary adjustment to the Multiannual Strategic Plan including the Research Agenda as referred to in Article 19(1);










(c)


to define and carry out Annual Implementation Plans as referred to in Article 19(3) for executing the Multiannual Strategic Plan as referred to in Article 19(1);










(d)


to initiate calls for proposals, to evaluate proposals, and award funding to projects selected through open, transparent and effective procedures, within the limits of available funds;










(e)


to develop close cooperation and ensure coordination with European, in particular the Seventh Framework Programme, national and transnational activities, bodies and stakeholders, aiming at fostering a fertile innovation environment in Europe and better synergies and exploitation of research and development results in the area of Embedded Computing Systems;










(f)


to monitor progress towards the objectives of the Artemis Joint Undertaking;










(g)


to undertake communication and dissemination activities;










(h)


to publish information on the projects, including the name of the participants and the amount of the financial contribution of the Artemis Joint Undertaking per participant;










(i)


to carry out any other activity needed to achieve the objectives referred to in Article 2 of the Regulation.






The Bodies of the Artemis Joint Undertaking shall be:






—


the Governing Board,










—


the Executive Director,










—


the Public Authorities Board,










—


the Industry and Research Committee.





1 —   Governing Board

The Governing Board shall have overall responsibility for the operations of the Artemis Joint Undertaking and shall oversee the implementation of its activities.

2 —   Executive Director

The Executive Director shall be the chief executive responsible for the day-to-day management of the Artemis Joint Undertaking in accordance with the decisions of the Governing Board and its legal representative. He shall perform his tasks with complete independence and shall be accountable to the Governing Board. The Director shall exercise, in respect of the staff, the powers laid down in Article 7(2) of the Regulation.
3 —   Public Authorities Board shall:






(a)


ensure that the principles of fairness and transparency are properly applied in the allocation of public funding to participants in projects;










(b)


discuss and approve the Annual Work Programme referred to in Article 19(2) upon proposals from the Industry and Research Committee, including the budgets available for calls for proposals;










(c)


approve the rules of procedure for calls for proposals, for the evaluation and selection of proposals and for monitoring of projects;










(d)


upon proposal of the representative of the Union, decide on the Artemis Joint Undertaking financial contribution to the budget of the calls for proposals;










(e)


approve the scope and the launch of calls for proposals;










(f)


approve the selection of project proposals to receive public funding following calls for proposals;










(g)


upon proposal of the representative of the Union, decide on the percentage of the Artemis Joint Undertaking’s financial contribution referred to in Article 13(6)(a) to participants in projects arising from calls for proposals in any given year;










(h)


adopt its rules of procedure in accordance with paragraph 3.




4 —   Industry and Research Committee shall:






(a)


elaborate the draft Multiannual Strategic Plan referred to in Article 19(1), including the content and update of the Research Agenda, and submit it to the Governing Board for approval;










(b)


prepare the draft Annual Work Programme referred to in Article 19(2), including proposals for the content of calls for proposals to be launched by the Artemis Joint Undertaking;










(c)


elaborate proposals regarding the technological, research and innovation strategy of the Artemis Joint Undertaking;










(d)


elaborate proposals for activities regarding the creation of open innovation environments, promoting the participation of SMEs, developing standards transparently and with openness to participation, international cooperation, dissemination and public relations;










(e)


advise the other bodies on any issue related to planning and operating research and development programmes, fostering partnerships and leveraging resources in Europe in order to achieve the objectives of the Artemis Joint Undertaking;










(f)


appoint working groups where necessary under the overall coordination of one or more members of the Industry and Research Committee in order to achieve the above tasks;










(g)


adopt its rules of procedure in accordance with paragraph 3.





5 —   External Audit

Court of Auditors.

6 —   Discharge Authority

Parliament on a recommendation of the Council.



Budget

7,97 million euro that represent 100 % EU contribution.

Staff at 31 December 2009

10 posts in the establishment plan of which 9 occupied at 31.12.2009.
Total staff number: 9






—


7 temporary agents (AD),










—


2 contract agents (administrative assistants).












—


autonomy was granted by the Commission on 26 October 2009,










—


launch of the 2nd call for proposals,










—


negotiation and start of R & D projects of the 2nd call,










—


monitoring and review of the 1st call projects,










—


signature of the General Financing Agreement with the Commission,










—


6 service level agreements signed with Commission services.









Source: Information submitted by the Joint Undertaking.






REPLIES OF THE JOINT UNDERTAKING

Internal control systems


Paragraph 20

The Executive Director has decided to implement the remaining 15 internal control standards (one had been adopted previously) in two phases. A first phase was adopted by the Governing Board on 23 March 2010. The remaining ICS have been adopted by the Governing Board on 22 September 2010.

Paragraph 21

Artemis Joint Undertaking acknowledges the comments of the Court. However, in its current temporary premises, the Joint Undertaking relies on the IT infrastructure provided by the Commission as host. Artemis Joint Undertaking is engaged in a procedure for the selection of its definitive location. On completion of this process, the Joint Undertaking will be in a position to take responsibility for its own IT infrastructure and will take into account the issues raised by the Court.

Lack of host State agreement


Paragraph 22

Artemis Joint Undertaking continues to cooperate for the implementation of the provisions of a host State agreement and awaits the outcome of the next steps of the procedure to have an agreement signed.

Internal Audit Function and Commission Internal Audit Service


Paragraph 23

In the initial phase of operation of the Joint Undertaking, resources were directed to the priority tasks of successfully managing the process towards autonomy, completing the 2009 call for proposals (including the negotiation of contracts) and launching the 2010 call for proposals. The Joint Undertaking confirms its intention to put in place an internal auditing function during 2010.



(1)  Council Regulation (EC) No 74/2008 of 20 December 2007 on the establishment of the Artemis Joint Undertaking to implement a Joint Technology Initiative on Embedded Computing Systems (OJ L 30, 4.2.2008, p. 52).

(2)  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.

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

(4)  The budget implementation report comprises the budget outturn account and its annex.

(5)  OJ L 248, 16.9.2002, p. 1.

(6)  Financial Rules of the Artemis Joint Undertaking adopted by Decision of its Governing Board on 18 December 2008.

(7)  Article 33 of Commission Regulation (EC, Euratom) No 2343/2002 of 19 November 2002 (OJ L 357, 31.12.2002, p. 72).

(8)  Article 38 of Regulation (EC, Euratom) No 2343/2002.

(9)  The rules concerning the presentation of the accounts and accounting by EU bodies are laid down in Chapter 1 of Title VII of Regulation (EC, Euratom) No 2343/2002 as last amended by Regulation (EC, Euratom) No 652/2008 of 9 July 2008 (OJ L 181, 10.7.2008, p. 23) and are incorporated in the Financial Rules of the Artemis Joint Undertaking.

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