2012/608/EU: Decision of the European Parliament of 10 May 2012 on discharge in respect of the implementation of the budget of the ENIAC Joint Undertaking for the financial year 2010
Date: 2012-05-10
Institutions: European Parliament
Subjects: European Joint Undertaking, budgetary discharge, financial year, general budget (EU), joint venture




L_2012286EN.01032001.xml










17.10.2012   


EN


Official Journal of the European Union


L 286/320








            DECISION OF THE EUROPEAN PARLIAMENT
         
of 10 May 2012
         
on discharge in respect of the implementation of the budget of the ENIAC Joint Undertaking for the financial year 2010
(2012/608/EU)


THE EUROPEAN PARLIAMENT,






—


having regard to the final annual accounts of the ENIAC Joint Undertaking for the financial year 2010,










—


having regard to the Court of Auditors’ report on the annual accounts of the ENIAC Joint Undertaking for the financial year 2010, together with the replies of the Joint Undertaking (1),










—


having regard to the Council’s recommendation of 21 February 2012 (06086/2012 - C7-0050/2012),










—


having regard to Article 319 of the Treaty on the Functioning of the European Union,










—


having regard to Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities (2), and in particular Article 185 thereof,










—


having regard to Council Regulation (EC) No 72/2008 of 20 December 2007 setting up the ENIAC Joint Undertaking (3),










—


having regard to Commission Regulation (EC, Euratom) No 2343/2002 of 19 November 2002 on the framework Financial Regulation for the bodies referred to in Article 185 of Council Regulation (EC, Euratom) No 1605/2002 on the Financial Regulation applicable to the general budget of the European Communities (4), and in particular Article 94 thereof,










—


having regard to Rule 77 of, and Annex VI to, its Rules of Procedure,










—


having regard to the report of the Committee on Budgetary Control (A7-0112/2012),






1.   

Grants the Executive Director of the ENIAC Joint Undertaking discharge in respect of the implementation of the Joint Undertaking’s budget for the financial year 2010;



2.   

Sets out its observations in the resolution below;



3.   

Instructs its President to forward this Decision and the resolution that forms an integral part of it to the Executive Director of the ENIAC Joint Undertaking, the Council, the Commission and the Court of Auditors, and to arrange for their publication in the Official Journal of the European Union (L series).






The President

Martin SCHULZ
            



The Secretary-General

Klaus WELLE
            





(1)  
            OJ C 368, 16.12.2011, p. 48.

(2)  
            OJ L 248, 16.9.2002, p. 1.

(3)  
            OJ L 30, 4.2.2008, p. 21.

(4)  
            OJ L 357, 31.12.2002, p. 72.






            RESOLUTION OF THE EUROPEAN PARLIAMENT
         
of 10 May 2012
         
with observations forming an integral part of its Decision on discharge in respect of the implementation of the budget of the ENIAC Joint Undertaking for the financial year 2010


THE EUROPEAN PARLIAMENT,






—


having regard to the final annual accounts of the ENIAC Joint Undertaking for the financial year 2010,










—


having regard to the Court of Auditors’ report on the annual accounts of the ENIAC Joint Undertaking for the financial year 2010, together with the replies of the Joint Undertaking (1),










—


having regard to the Council’s recommendation of 21 February 2012 (06086/2012 - C7-0050/2012),










—


having regard to Article 319 of the Treaty on the Functioning of the European Union,










—


having regard to Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities (2), and in particular Article 185 thereof,










—


having regard to Council Regulation (EC) No 72/2008 of 20 December 2007 setting up the ENIAC Joint Undertaking (3),










—


having regard to Commission Regulation (EC, Euratom) No 2343/2002 of 19 November 2002 on the framework Financial Regulation for the bodies referred to in Article 185 of Council Regulation (EC, Euratom) No 1605/2002 on the Financial Regulation applicable to the general budget of the European Communities (4), and in particular Article 94 thereof,










—


having regard to Rule 77 of, and Annex VI to, its Rules of Procedure,










—


having regard to the report of the Committee on Budgetary Control (A7-0112/2012),










A.


whereas the ENIAC Joint Undertaking (‘the Joint Undertaking’) was set up in 20 December 2007 for a period of 10 years to define and implement a ‘research agenda’ for the development of key competences for nanoelectronics across different application areas,










B.


whereas the Joint Undertaking was granted its financial autonomy in July 2010,










C.


whereas the Joint Undertaking is in a start-up phase and had not yet fully established its internal control and financial reporting systems by the end of 2010,










D.


whereas the Court of Auditors in its reports on the annual accounts of the Joint Undertaking for the financial year 2010, qualified its opinion with regard to the reliability of the accounts on the grounds that the Joint Undertaking has not included in the accounts the Budgetary Outturn Account and its reconciliation to the Economic Outturn Account,










E.


whereas the Court of Auditors in its reports on the annual accounts of the Joint Undertaking for the financial year 2010 states that it has obtained reasonable assurance that the underlying transactions are legal and regular,










F.


whereas the maximum contribution for the period of 10 years from the Union to the Joint Undertaking is EUR 450 000 000 to be paid from the budget of the seventh research framework programme,










G.


whereas the budget of the Joint Undertaking for the financial year 2010 amounted to EUR 38 440 000,






Reliability of the Joint Undertaking’s accounts









1.


Is concerned that the Joint Undertaking received a qualified opinion from the Court of Auditors on the reliability of the accounts, on the grounds that it has not included in the accounts the Budgetary Outturn Account and its reconciliation to the Economic Outturn Account as required by EC Accounting Rule 16 ‘Presentation of budget information in the annual accounts’;












2.


Notes from the Joint Undertaking that the qualified opinion is due to the fact that the Joint Undertaking and the Court of Auditors referred to different dates to establish when the Joint Undertaking started to work autonomously;





Budget and financial management









3.


Acknowledges that the Joint Undertaking’s budget was managed by DG INFSO from 1 January 2010 to 4 May 2010; notes that the administrative appropriations were transferred to the Joint Undertaking in May 2010 but that the operational budget lines were not transferred and remained inaccessible in the accounting system until the Joint Undertaking was officially granted financial autonomy on 26 July 2010; highlights that the Joint Undertaking acquired the capacity to implement its own budget from 22 September 2010 with the transfer of appropriations for the operational activities;












4.


Notes from the Joint Undertaking that the final budget included commitment and payment appropriations amounting to EUR 38 440 000, of which EUR 36 168 000 is devoted to the Call 2010;












5.


Acknowledges that the utilisation rates for the available commitment and payment appropriations were 99 % and 24 % respectively; is concerned about the low implementation rate of the payments’ budget and, moreover, about the underlying activities of the Joint Undertaking; underlines that the cash balance stood at EUR 20 000 000 at the end of the year representing 53 % of the available payment appropriations for 2010;












6.


Remarks that the low implementation of the payment appropriations is the result of the delayed transfer of the operational activities and the corresponding funding from the Commission to the Joint Undertaking;












7.


Notes from comments of the Joint Undertaking that a Manual of Procedures ensuring segregation of duties has been elaborated and has enabled the identification of the five following exceptions that happened in the initial phase of implementing the own budget:






—


three contracts signed while the ABAC transactions were still progressing towards completion, because the duration of the ABAC procedure had been underestimated,










—


one contract linked to an existing commitment has been signed prior to determining that it required a new commitment,










—


one missing contract has been discovered during the handover at autonomy and has been signed after the first payments were approved,




takes note that the corrective actions have been implemented and no further exceptions were recorded;





Internal control systems









8.


Urges the Joint Undertaking to complete its internal controls and financial information systems; calls on the Joint Undertaking in particular, to establish and document important elements of its internal control system, such as accounting procedures and controls relating to the closure of the accounts and to the recognition and measurement of the operational expenditure;












9.


Notes the Court of Auditors’ finding that control weaknesses were detected in the area of ex-ante financial verification of pre-financing payments, in particular regarding the calculation and validation of the amounts paid; underlines that full reliance was placed on the certificates received from the National Funding Authorities for pre-financing payments and for acceptance of costs and that no other checks were performed to ensure the legality and regularity of the expenses declared;












10.


Notes that the ex-post audit of cost claims related to the projects has been fully delegated to the Member States; finds it important, nevertheless, that the Joint Undertaking ensures that the financial interests of its members are adequately protected and that the underlying transactions are legal and regular; is therefore of the opinion that the Joint Undertaking will have difficulties in ensuring that the financial interests of its members are adequately protected and that the underlying transactions are legal and regular; calls on the Joint Undertaking to reconsider its strategy of ex-post audit of cost claims and to inform the discharge authority of the mechanism implemented to ensure compliance with Article 12 of its Founding Regulation (EC) No 72/2008;












11.


Takes note that the Accounting Officer of the Joint Undertaking validated the financial and accounting systems (ABAC and SAP); notes however that the underlying business processes were not validated, in particular the one providing financial information about the validation and payment of the cost claims received from the national authorities; asks the Joint Undertaking to inform the discharge authority about the state of validation of the underlying business processes;












12.


Notes the Court of Auditors’ finding that the Joint Undertaking has an adequate level of IT governance and practice for its size and mission; stresses, however, that the IT strategic planning cycle, the data classification according to confidentiality and integrity requirements and Disaster Recovery Plan is lagging behind; calls on the Joint Undertaking to remedy the situation and provide the discharge authority with an up-to-date report on the matter;





Internal audit









13.


Takes note that the Joint Undertaking’s financial rules have not yet been amended to include the provision referring to the powers of the Commission’s internal auditor regarding the general budget as a whole;












14.


Notes, however, that the mission charter of the Commission’s Internal Audit Service was adopted by the Governing Board of the Joint Undertaking;





Delayed financial autonomy









15.


Reiterates that the Joint Undertaking was set up in February 2008 but started to work autonomously in July 2010; expresses its great concern that the Joint Undertaking has used one quarter of its envisaged duration, up to 31 December 2017, to achieve financial autonomy; notes that it was just after September 2010, when the cash transfer from the Commission to the Joint Undertaking covering the operational appropriations was made, that the Joint Undertaking was able to make operational payments; insists that these delays should not, however, cause a prolongation of the 10-year period of its existence but should embolden the management of the Joint Undertaking to address all shortcomings and reach its objectives within the envisaged 10-year period;





Call for proposals and project management


Call 2010









16.


Notes from the Joint Undertaking that the response to Call 3 for proposals has been strong; takes note that 10 proposals have been selected for funding but that 11 projects above threshold could not be funded because the available budget had been exhausted;





Calls 2008 and 2009









17.


Is deeply concerned by the slow progression of the projects under Call 1 (2008) and Call 2 (2009);












18.


Notes from the Joint Undertaking’s 2010 Annual Activity Report (AAR) that for Call 1 the situation at year-end 2010 is as follows:






—


of the total 166 partners, six partners (3,6 %) did not have an National Grants Agreements mainly due to paperwork in progress after changes,










—


15,1 % of the partners (25, mainly Italian partners) have closed a National Grants Agreements but did not sign the Accession Form;
















19.


Acknowledges from comments of the Joint Undertaking that the contracts progressed even slower for the projects arising from Call 2 for which only six Joint Undertaking Grant agreements could be signed before the end of 2010 while the remaining five projects have been delayed for the following reasons:






—


three projects have Italian project coordinators who are still waiting for the national decree and did not agree to be replaced by partners from other countries,










—


the SMART project has been redefined after France cancelled funding due to budgetary cuts several months after the Public Authorities Board funding decision,










—


Mirandela was ready for signature but had a last minute change in the responsible person authorised to sign;
















20.


Establishes from the AAR that since the inception of the programme until the end of 2010, the Joint Undertaking executed more than 300 grant payments for a total of EUR 9 800 000; notes that the Joint Undertaking considers the situation of contracts and payments unacceptable and decided to take actions to:






—


make sure that the entities involved in the process are knowledgeable on the procedures,










—


clarify the sequence of events and the exchanges that must take place with the National Funding Authorities,










—


define steps to be taken and accelerate the procedures,










—


follow up on the progress through visits to the national entities to review status or clarify procedures;
















21.


Calls on the Joint Undertaking to provide the discharge authority with:






—


an up-to-date report on the current situation regarding projects under Calls 1 and 2 in terms of progression of contract settlement and grant payments,










—


an evaluation report on the measures undertaken to speed-up the contracting and payment process and the progress achieved through their implementation,










—


an up-to-date report on the current situation regarding the projects under Call 3 both in terms of contracting and payment;









Performance









22.


Notes from the AAR that the Commission’s report on the first interim evaluation of the Artemis and ENIAC Joint Technology Initiatives was adopted on 16 December 2010;












23.


Underlines that the interim evaluation formulated three recommendations to the Joint Undertaking:






—


to solve the ‘free riding’ problem, the Joint Undertaking should establish a system where each non-member beneficiary pays a percentage of its Union contribution as a fee to the costs of the Joint Undertaking,










—


the evaluation and selection processes should be modified to improve the match of the portfolio of supported projects to the strategic European aims of the programme,










—


Member States and the Industrial Associations should work together to establish processes whereby potential proposers can be given early, constructive feedback on their prospects for support,




asks the Joint Undertaking to inform the discharge authority about the measures introduced following the results of this first interim evaluation;












24.


Notes that the Joint Undertaking considers the underspending of its operational budget as the most important issue affecting its ability to fulfil its mission; notes that as a consequence the Joint Undertaking engaged in 2010 in identifying action items that would induce a positive evolution of the situation, including:






—


the stimulation of the definition of strategically relevant projects,










—


the identification of national programmes that would benefit from being elevated in a European context,










—


the engagement of additional national funding entities,










—


the optimisation of the funding split between Eureka cluster Catrene and the Joint Undertaking,




calls on the Joint Undertaking to inform the discharge authority of the state of implementation of these action items and on the results achieved;












25.


Takes note of the Commission’s proposal establishing the Specific Programme Implementing Horizon 2020 — The Framework Programme for Research and Innovation (2014-2020) — where the Commission raises a possibility of combining Artemis and ENIAC into one initiative and the possibility to set up new Joint Undertakings in the context of implementing the ‘Societal challenges’ part of Horizon 2020; calls on the Commission to keep the discharge authority informed on this matter;





Lack of host State agreement









26.


Reiterates that the Joint Undertaking should rapidly conclude a host agreement with Belgium concerning office accommodation, privileges and immunities and other support to be provided by Belgium to it as provided by its Founding Regulation (EC) No 72/2008;





Horizontal observations on the Joint Undertakings









27.


Underlines that seven Joint Undertakings have so far been established by the Commission under Article 187 of the Treaty on the Functioning of the European Union; notes that six Joint Undertakings (IMI, Artemis, ENIAC, Clean Sky, FCH and ITER-F4E) are in the research area under the Commission’s DGs RTD and INFSO and one is charged with developing the new air traffic management system (SESAR) in the transport domain whose activities are supervised by DG MOVE;












28.


Notes that the total indicative resources deemed necessary for the Joint Undertakings for their period of existence amounts to EUR 21 793 000 000;












29.


Notes that the total Union contribution deemed necessary for the Joint Undertakings for their period of existence amounts to EUR 11 489 000 000;












30.


Notes that, for the financial year 2010, the overall Union contribution to the budget of the Joint Undertakings amounted to EUR 505 000 000;












31.


Calls on the Commission to provide the discharge authority annually with consolidated information on the total annual funding per Joint Undertaking made from the general budget of the Union in order to ensure transparency and clarity on the use of the Union’s funds and restore trust among the European taxpayers;












32.


Welcomes the initiative of Artemis to include information in its AAR on the monitoring and review of its ongoing projects; believes this is a practice that should be followed by the other Joint Undertakings;












33.


Recalls that Joint Undertakings are public-private partnerships and that as a consequence public and private interests are intertwined; is of the opinion that under the circumstances the likelihood of conflicts of interest should not be dismissed but addressed properly; calls therefore on the Joint Undertakings to inform the discharge authority on the verification mechanisms which exist in their respective structures to enable a proper management and prevention of conflicts of interest;












34.


Notes, with the notable exception of the Joint Undertaking for ITER and the Development of Fusion Energy, that Joint Undertakings are relatively small structures and geographically-concentrated; believes therefore that they should pool their resources where possible;












35.


Calls on the Court of Auditors to provide the discharge authority with a follow-up on the comments it has made for each of the Joint Undertakings in their respective report on the annual accounts for the financial year 2011;












36.


Invites the Court of Auditors to provide, within a reasonable deadline, a special report to Parliament, on the added value of the establishment of the Joint Undertakings for the efficient execution of Union research, technological development and demonstration programmes; further notes that the same report should include an assessment of the effectiveness of the Joint Undertakings’ establishment.






(1)  
            OJ C 368, 16.12.2011, p. 48.

(2)  
            OJ L 248, 16.9.2002, p. 1.

(3)  
            OJ L 30, 4.2.2008, p. 21.

(4)  
            OJ L 357, 31.12.2002, p. 72.