Report on the annual accounts of the Executive Agency for Competitiveness and Innovation for the financial year 2010, together with the Agency's replies
Date: 2011-10-12
Institutions: European Court of Auditors
Subjects: EU office or agency, administration of the Institutions, auditing, budgetary control, budgetary resources, closing of accounts, financial control, powers of the institutions (EU)








C_2011366EN.01008101.xml










15.12.2011   


EN


Official Journal of the European Union


C 366/81





REPORT
on the annual accounts of the Executive Agency for Competitiveness and Innovation for the financial year 2010, together with the Agency's replies
2011/C 366/15

INTRODUCTION







1.


The Executive Agency for Competitiveness and Innovation (the Agency), located in Brussels, is the former Intelligent Energy Executive Agency (IEEA). Its mandate and duration were modified by Commission Decision 2007/372/EC of 31 May 2007 (1) amending Decision 2004/20/EC of 23 December 2003 (2). The Agency was established for a limited period, beginning on 1 January 2004 and now ending on 31 December 2015, to manage EU actions in the field of energy, entrepreneurship and innovation, and sustainable freight transport (3).










2.


The Agency's 2010 administrative budget was 15,9 million euro. The number of staff employed by the Agency at the end of the year was 142.





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 (4) of the Agency, which comprise the 'financial statements' (5) and the 'reports on implementation of the budget' (6) for the financial year ended 31 December 2010 and the legality and regularity of the transactions underlying those accounts.










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 (7).





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 authorised appropriations (8). The Director is responsible for putting in place (9) the organisational structure and the internal management and control systems and procedures relevant for drawing up final accounts (10) 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.





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.










7.


The Court conducted its audit in accordance with the IFAC and ISSAI (11) International Auditing Standards and Codes of Ethics. Those standards require that the Court complies with ethical requirements and plans and performs the audit to obtain reasonable assurance about whether the accounts are free from material misstatement and whether the underlying transactions are legal and regular.










8.


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






Opinion on the reliability of the accounts








10.


In the Court's opinion, the Agency's Annual Accounts (12) present fairly, 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.






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.










12.


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





COMMENTS ON BUDGETARY AND FINANCIAL MANAGEMENT







13.


The initial 2010 budget of 15,9 million euro included 10,7 million euro for staff costs. The budget was overestimated as actual staff expenditure was only 9,2 million euro. The excess funds were transferred to operating expenditure and used on fitting out works for the new premises of the Agency. However, the Court made similar remarks for the 2008 and 2009 budgets (13) and reiterates that this indicates the need for a stricter approach when forecasting staff needs.










14.


Appropriations carried forward at 31 December 2010 amounted to 2 million euro or 13 % of total commitments for the year, indicating the need for a more rigorous application by the Agency of the budgetary principle of annuality.





This report was adopted by Chamber II, headed by Mr Harald NOACK, Member of the Court of Auditors, in Luxembourg at its meeting of 12 October 2011.


For the Court of Auditors

Vítor Manuel da SILVA CALDEIRA

President





(1)  OJ L 140, 1.6.2007, p. 52.

(2)  OJ L 5, 9.1.2004, p. 85.

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

(4)  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.

(5)  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 the description of the significant accounting policies and other explanatory information.

(6)  The budget implementation reports comprise the budget outturn account and its annex.

(7)  OJ L 11, 16.1.2003, p. 1.

(8)  Article 25 of Commission Regulation (EC) No 1653/2004 (OJ L 297, 22.9.2004, p. 6).

(9)  Article 29 of Regulation (EC) No 1653/2004.

(10)  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).

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

(12)  The Final Annual Accounts were drawn up on 28 June 2011 and received by the Court on 4 July 2011. The Final Annual Accounts can be found on the following website http://ec.europa.eu/eaci/docs_en.htm

(13)  See paragraph 13 of the Report on the annual accounts 2008 (OJ C 304, 15.12.2009, p. 77) and paragraph 13 of the Report on the annual accounts 2009 (OJ C 338, 14.12.2010, p. 83).


ANNEX

Executive Agency for Competitiveness and Innovation (Brussels)


Competences and activities








Areas of Union competence deriving from the Treaty on the Functioning of the European Union (TFEU)









1.


The Union policy on the environment shall contribute to preserving, protecting and improving the quality of the environment; protecting human health; prudent and rational utilisation of natural resources; and promoting measures at international level to deal with regional or worldwide environmental problems.





(Article 191 of the TFEU)







2.


The Union policy on industry shall ensure that the conditions necessary for the competitiveness of the Union's industry exist by speeding up the adjustment of industry to structural changes, encouraging an environment favourable to initiative and to the development of and cooperation between undertakings, fostering better exploitation of the industrial potential of policies of innovation, research and technological development. The Member States shall consult each other in liaison with the Commission and, where necessary, shall coordinate their action. The Commission may take any useful initiative to promote such coordination.





(Article 173 of the TFEU)







3.


The common transport policy shall lay down common rules applicable to international transport to or from the territory of a Member State or passing across the territory of one or more Member States. It shall also set out the conditions under which non-resident carriers may operate transport services within a Member State, and lay down measures to improve transport safety.





(Articles 91(1) and 100(2) of the TFEU)






Competences of the Agency


(Commission Decision 2004/20/EC amended by Decision 2007/372/EC)




Objectives

Within the framework of the Lisbon strategy for growth and jobs, the European Union has taken measures to promote and develop competitiveness and innovation. These measures include the establishment of the Competitiveness and Innovation Framework Programme (CIP) 2007-2013 (Decision No 1639/2006/EC), notably with the programmes Intelligent Energy — Europe (IEE) and Entrepreneurship and Innovation (EIP). The measures also include the Marco Polo (MP) programme (Regulation (EC) No 1692/2006). The main objectives are to foster competitiveness of enterprises, in particular SMEs; to promote all forms of innovation, as well as eco-innovation; to promote energy efficiency and new and renewable energy sources in all sectors, including transport. Under these EU programmes, the Agency is responsible for all implementing tasks concerning EU aid, except for programme evaluation, monitoring of legislation and strategic studies, or any other action which comes under the exclusive competence of the European Commission.

Tasks

Implementing the EU programmes according to the delegations received from the Commission:






—


to manage all phases in the lifetime of specific projects,










—


to carry out all operations necessary to manage the EU programmes, in particular budget implementation with awarding contracts and grants,










—


to gather, analyse and pass on to the Commission all the information needed to guide the implementation of the programmes as well as to promote coordination and synergy among the programmes,










—


as regards the EIP, to be in charge of project management and network animation of the Enterprise Europe Network, eco-innovation pilot and market replication projects, and innovation actions with a high degree of standardisation (IP Base project).









Governance




1 —   Steering Committee

Comprises five members appointed by the European Commission. It adopts the Agency's annual work programme after approval by the European Commission. In addition, it adopts the administrative budget of the Agency and its annual activity report.

2 —   Director

Appointed by the European Commission.

3 —   External Audit

The Court of Auditors.

4 —   Discharge authority

Parliament, acting on a recommendation by the Council.





Resources made available to the Agency in 2010 (2009)





Budget







(A)


249,8 (203,1) million euro (100 % general budget of the EU). The EACI implements the operational budget under the responsibility of the Commission:






—


for IEE 71,0 (72,1) million euro,










—


for EIP-eco-innovation 35,2 (32,2) million euro,










—


for EIP-Networks 79,7 (32,0) million euro,










—


for MP 63,8 (66,9) million euro.














(B)


15,9 (13,3) million euro (100 % Union subsidy) for the administrative budget for which the EACI is autonomous.





Staff at 31 December 2010

Total staff: 142 (141);
TA posts: 37 (37) listed in the establishment plan, of which 33 (28) occupied;
Contract staff: 115 (110) posts planned, 109 (113) were occupied.
Allocated to:






(a)


Operational tasks:
119 = 84 % (118 – 84 %)










(b)


Administrative tasks:
23 = 16 % (23 – 16 %).









Products and services 2010




For the Intelligent Energy Europe (IEE), the Agency monitored 314 ongoing IEE projects and signed 62 new grant agreements. For the 2010 call, 348 proposals were submitted. For the first time, the Agency organised two contractors' meetings attended by more than 50 coordinators to train them at the starting phase of their project. The European and National Info Days attracted 3 500 participants, about 20 % more than in 2009. For the first time, the Agency was responsible for the organisation of the European Sustainable Energy week (EUSEW), which included 330 events, more than twice as many as in 2009. The number of EUSEW energy days organised outside Brussels increased 4-fold to reach 250 events, media work carried out in relation to the EUSEW paid off with more than 200 media mentions and the Brussels events alone attracted more than 6 000 participants. On behalf of the Commission, the Agency kicked off several EU communication initiatives to adopt sustainable energy practices like the ManagEnergy initiative, the EU-wide school competition and a Clean Vehicle Portal. Furthermore the Agency implemented a new IEE visual identity and graphical charter. Other communication efforts include double as much page views of the IEE projects database (1,5 million) compared to 2009, electronic news alerts with 25 % more subscribers (17 000) then last year, leaflets, project brochures, News Reviews and videos.

The EIP programme — Enterprise Europe Network is made up of more than 580 partner organisations in 47 countries, including the 27 EU member states. In addition to project management tasks of 92 contracts (specific grant agreements) and the IPeuropAware project, the EACI is also responsible for the ‘animation’ of the Enterprise Europe Network and for managing the IT tools and databases for the interactive communication among the network partners. The new public website, intranet and Network Directory were all launched during the year and the technology for the new ‘Merlin’ IT system was selected. The Annual Conference in Antwerp, organised in association with the Belgian EU-Presidency, in order to promote with network partners events and policies at EU level of direct relevance to SMEs, attracted more than 900 participants and obtained a satisfaction rate of more than 94 %. More than 800 staff members of Network partners were trained in 2010; 50 success stories and 3 success story videos were produced to demonstrate the benefit of the Network's services, reaching an audience of almost 4,7 million people. To support an effective and efficient implementation of the Network project, the Agency optimised its organisational structure as from October 2010 resulting in a new organigramme with one unit giving more individual support to partners in terms of network operations and one unit providing horizontal support to the Network as a whole.

For the eco-innovation market replication projects, the Agency monitored 90 ongoing projects and signed 47 new grant agreements. The 2010 call attracted 42 % more proposals (287) than in 2009 and was promoted via one European and 11 national info days, attended by more than 1 500 persons. A searchable online database providing detailed information on all eco-innovation projects was launched and registered 109 000 visitors and 121 000 page views. The number of subscribers to the electronic news alerts increased by 41 % (7 200). Efforts to promote the scheme also include brochures, flyers, and development of a video news release.

For the Marco Polo programme, the Agency monitored 66 ongoing projects and signed 21 contracts. For the 2010 call, 101 proposals were submitted, an increase of 44 % vs. 2009. The European Info Day in February attracted 346 participants from 30 countries. The Marco Polo conference in Vienna attracted more than 180 participants and triggered 16 media mentions with an estimated readership of 1 million persons. The Agency promotes the programme also through the renewed Marco Polo website with 430 000 viewers, electronic news alerts with 15 % more subscribers (1 500) then last year and two new videos for the Marco Polo programme. Communication efforts also include projects brochures, flyers and video DVD's. The media work generated 25 % more press clippings (81) than in 2009.





Source: Information supplied by the EACI.







THE AGENCY'S REPLIES






13.


The reduction of nearly 1,5 million euro is mainly due to factors difficult to predict in the initial budget planning such as a higher staff turnover and lower salary indexation than expected, uncertainty in the payment of the 2009 salary adjustment and more staff working part-time or on parental leave. However, as noted by the Court, the surplus permitted an early reimbursement of the fitting out works of the Agency's new building, which reduced the interest to pay. From 2011 the Agency has sought to improve the forecasting by taking into account the impact of staff mobility on the number of months of salary paid.










14.


The amounts carried forward are related to obligations duly contracted at the end of 2010 and invoiced in 2011. Compared to the previous years, the main increases in the appropriations carried forward are related to the move to the new premises in November 2010, the costs for the evaluation in November-December of a successful call receiving 40 % more proposals in 2010 and invoices under contracts for the new ex post audit strategy progressively implemented by the Agency as of 2010. The amounts carried forward on other budget lines have tended to decrease.