Communication to the Commission on the delegation of the management of the 2014-2020 programmes to executive agencies
Date: 2013-09-18
Institutions: European Commission
Subjects: budgetary resources, executive agency, governance, management audit, personnel administration



SEC_2013_493_741367_EN_ACTE_1_f_1.docx






EUROPEAN COMMISSION
Brussels, 18.9.2013
SEC(2013) 493 final
Communication to the Commission
on the delegation of the management of the 2014-2020 programmesto executive agencies






1.Introduction


One important element of the Commission’s proposals for the 2014-2020 Multiannual Financial Framework (MFF) was to simplify and rationalise further the administration of the EU institutions, agencies and bodies to make it a modern, effective and dynamic organisation, while reducing staffing by 5 % over 5 years
1
. This commitment is now enshrined in the draft Interinstitutional Agreement (IIA) on budget discipline, cooperation in budgetary matters, and sound financial management
2
, on which the European Parliament, the Council and the Commission have reached agreement.  


Within this general context, the Commission has to make the best use of reduced human resources by focusing more than ever on its core institutional tasks, such as policy-making, implementation and monitoring of the application of EU law, and strategic management, whilst guaranteeing the most effective and efficient implementation of spending programmes for which it remains ultimately responsible.  


In view of the positive experience of management of EU programmes by the executive agencies (EAs), as confirmed by the Court of Auditors
3
, the Commission proposals for the 2014-2020 MFF also included making more use of the existing EAs to implement some new programmes.


At present, there are six executive agencies, set up under Council Regulation No 58/2003
4
: the Education, Audio-visual and Culture Executive Agency (EACEA), the Executive Agency for Competitiveness and Innovation (EACI), the Executive Agency for Health and Consumers (EAHC), the Trans-European Transport Network Executive Agency (TEN-T EA), the European Research Council Executive Agency (ERC-EA) and the Research Executive Agency (REA).


The Regulation provides for a clear division of programme management tasks between the Commission and the executive agencies. The Commission’s departments perform tasks involving a large measure of discretion implying policy choices, in particular: setting objectives and priorities, adopting work programmes (including financing decisions), representing the Commission in the programme committee and adopting award decisions subject to comitology. The agencies are responsible for implementing tasks, such as the launch and conclusion of grant and procurement procedures, the adoption of award decisions, project monitoring, financial control and accounting, the contribution to programme evaluation and various support tasks.  


A cost-benefit analysis (CBA), required by the Regulation prior to any delegation of programmes to the executive agencies, has been carried out over the last 12 months and took into account the political agreement reached by Parliament and Council on the 2014-2020 MFF.
5
  


The CBA highlights the following comparative advantages of delegating certain 2014-2020 programmes to the executive agencies:


-As a result of their experience and specialisation in specifically defined tasks, the agencies guarantee a high quality of programme management and better service delivery in terms of faster contracting, faster approval procedures for technical and financial reports and quicker payments.  


-Giving the agencies coherent programme portfolios will create synergies between closely related policy domains and foster knowledge spill-over. For example, pooling all aspects of the SME instrument that falls under the Framework Programme for Research and Innovation (Horizon 2020) is expected to result in economies of scale, easier coordination and consistency in delivery of services. At the same time, all potential beneficiaries will have a single entry point.


-The new programmes can capitalise on the agencies’ existing communication and outreach channels, which have developed over time to keep them close to beneficiaries and to improve the EU’s visibility as the promoter of the programmes. In particular, the agencies provide an increased level of direct exchanges with beneficiaries through "info days", kick-off meetings for larger and multi-annual projects, and monitoring visits.


-Continuous simplification of processes and procedures (e.g. simplified forms of grants, proportionate controls and electronic application forms) results in higher productivity, which should further increase with simpler procedures for the new programmes.  


-The lower number of full-time equivalents (FTEs) required to manage the programmes and the scope for recruiting a larger percentage of contract agents to the executive agencies than to the Commission entails significant savings compared with the in-house scenario.


2.Overview of the delegation of 2014-2020 programmes to executive agencies


As part of its 2014-2020 MFF proposals, the Commission indicated the programmes that would be delegated to executive agencies. These were: the new Framework Programme for Research and Innovation (Horizon 2020) and a number of programmes relating to transport, energy and ICT (under the Connecting Europe Facility); competitiveness and SMEs (COSME); education, culture and citizenship (Creative Europe, Erasmus +, Europe for Citizens); health and consumers (Better training for safer food, Health for Growth and Consumer programmes); and environment and climate actions (LIFE).  Later on, the Commission has added the following programmes to the list with a view to including them in the cost-benefit analysis: activities under the European Maritime and Fisheries Fund, the EU Aid Volunteers programme and promotion measures and information provision for agricultural products (agricultural promotion measures).


2.1.Boundary conditions for the analysis of delegation scenarios


In order to determine the optimal scope of programme delegation and the most cost-efficient distribution of programmes per EA, the Commission set the following boundary conditions:


1.No new EA should be created and no existing EA should be closed. Instead, the mandate of all six existing agencies will be expanded to achieve economies of scale. The distribution of the new 2014-2020 programmes among the EAs should take into consideration the legacy of payments of the delegated 2007-2013 programmes, which the EAs will continue to implement beyond 2013. This approach is intended to guarantee that each EA has a strong, clear and coherent identity and makes the best use of existing human resources and expertise.


2.As far as possible, the executive agencies should be optimally sized in future to yield economies of scale. This should allow the average operating costs of EAs to fall and to be harmonised. This requirement is complemented by the objective of maintaining and expanding the EAHC based in Luxembourg, so far the smallest and most specialised of the EAs.




3.The expected increase in human resources in the existing agencies should be reconciled with the overall 5 % staff reduction in all institutions, agencies and bodies. This requires first and foremost a critical analysis of any estimate of additional staff needs in the EAs, particularly if these needs cannot be compensated by reducing staff in the Commission following the transfer of existing tasks to the agencies.


Within these boundary conditions, and particularly in order to contain the increase in staff in the agencies, all possible sources of efficiency gains have been explored, such as:


-simplification measures proposed for 2014-2020 programmes: simpler forms of grants (lump sums, standard scales of unit costs, flat-rate financing), simpler funding rules, streamlined procurement procedures, and systems for electronic data management and electronic data exchange between the administration and beneficiaries;
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-a coherent portfolio of programmes (in terms of the nature and size of projects, target beneficiaries and procedures governing programme implementation) to be managed by each agency;


-an improved learning curve in well-established and specialised agencies;


-the extension of the administrative and logistical support services provided by the Research Executive Agency to all entities involved in Horizon 2020 management and the provision of validation services to the programmes for education, culture and citizenship.
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Furthermore, a Common Support Centre (see section 5) to be hosted by RTD will provide a number of support services to all research directorates-general (DGs),
8
 EAs and joint undertakings (JUs). This will result in additional efficiency gains for the EAs managing the research programmes and in a slight reduction in the number of additional posts needed in the agencies.


2.2.CBA: chosen delegation scenario


The CBA compared four scenarios depicting varying levels of programme delegation: an in-house scenario - new programmes would be managed by the Commission while EAs would remain responsible for the delivery of legacy work (2007–2013 programmes); an initial scenario for delegation defined by the Commission; and two alternative scenarios exploring options for delegation different from that of the initial scenario.


Taking into account the aforesaid boundary conditions and expected efficiency gains, the CBA points to the following scope for delegating 2014-2020 programmes to the EAs:


-16 non-research programmes, half of which follow 2007-2013 programmes already delegated to the executive agencies by COMM, EAC, ENTR, MOVE and SANCO. The following programmes are totally new or are envisaged for delegation for the first time: agricultural promotion measures, the EU Aid Volunteers programme, the environmental and climate actions of LIFE, the Connecting Europe Facility (energy and ICT sectors) and the European Maritime and Fisheries Fund. These programmes are managed by AGRI, ECHO, ENV, CLIMA, CNECT and MARE, respectively. The total corresponding annual budget to be managed by EAs will more than double to EUR 4.9 billion in 2020 from EUR 2.3 billion in 2013.


-16 ‘action lines’ under ‘Horizon 2020’, half of which follow FP7 predecessor specific programmes already delegated to the ERC-EA and the REA. For these programmes, too, the overall annual budget to be managed will more than double to EUR 6.9 billion in 2020 from EUR 3.4 billion in 2013. CNECT, ENER, MOVE and AGRI will become research ‘parent DGs’ of EAs, in addition to RTD, ENTR, EAC which have already delegated research activities under the FP7.


The combined financial envelope of programmes whose implementation will be delegated to EAs is expected to more than double between 2013 and 2020 to reach EUR 13 267 million in 2020.


Depending on whether the 2014-2020 programmes are new or follow predecessor programmes, their delegation to the agencies either will be effective on 1 January 2014 or will be spread over several months in 2014, e.g. in the case of some ‘action lines’ under Horizon 2020 (see section 7 below). 


The CBA points to the alternative scenario 2 as the most efficient in terms of cost savings and qualitative benefits than the other scenarios taken into consideration. It estimates that to manage EUR 13 267 million (an increase of 127% compared to 2013), the six agencies will need 2887 FTEs in 2020 (an increase of 71 %, i.e. additional 1200 FTEs compared to 2013). This compares favourably to the in-house scenario which would require 3088 FTE to manage the same programmes. This scenario leads to the highest estimated efficiency gains (EUR 509 million at present value
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) in relation to the in-house scenario. The EAs will benefit from economies of scale as they become larger. In addition, according to the CBA, the average budget managed by ‘head’ in the executive agencies is expected to increase from EUR 3.47 million in 2013 to EUR 4.60 million per staff member in 2020 (see Table 1 below).  


Table 1: CBA – Budget managed and human resources in executive agencies in 2013 and 2020 






Envisaged EA




Budget managed


by EA in 2013 million EUR (predecessor programmes)




FTEs in EA


in 2013




Budget per head


2013




Budget


to be managed


by EA


in 2020, 

million EUR




Envisaged


FTEs in EA in 2020




Budget per head 2020

million EUR






EACEA




847




431




1.97




870




552




1.58






EACI




453




159




285




1 946




537




3.62






EAHC




68




50




1.36




202




81




2.49






TEN-T EA




1 600




100




16.00




5 626




337




16.71






ERCEA




1 707




389




4.39




2 223




598




3.72






REA




1 171




558




2.69




2 401




783




3.91






Total




5 846




1 687




3.47




13 267




2 887




4.60





The alternative scenario 2 guarantees optimal bundling of programmes to give each agency a coherent portfolio in line with its core competencies and identity. In particular, it provides for centralised management of the SME instrument by the EACI, which will further specialise in programmes targeting competitiveness and innovation. Under this scenario, EAs will remain responsible for delivering the legacy work (implementation of the 2007-2013 programmes up to their closure) in line with their respective current mandates. One exception is the legacy of the Marco Polo I and II programmes, currently managed by EACI, which will be taken over by TEN-T EA in line with the latter’s specialisation in infrastructure projects.


Considering the aforementioned benefits and savings, the Directors-General of the parent DGs agreed that the alternative scenario 2 would be the preferred delegation scenario.


Annex 1a sets out the chosen delegation scenario for each EA as resulting from the CBA, together with the corresponding parent DGs and delegated budget at cruising speed (2020).





3.proposed changes in human and financial resources


Although the selected delegation scenario offers important benefits, the Commission considers that a number of adjustments are indispensable in order to yield further efficiency gains, which should stem from an improved level of productivity; and to contain administrative costs by applying a staff reduction of 5%. Moreover, some adaptations are necessary in order to take account of major developments in the still on-going negotiations between the European Parliament and the Council on the programmes which will be delegated.  


3.1.Proposal for human and financial resources in the EAs by 2020 (cruising speed)


According to the CBA, the envisaged delegation of programmes to the six EAs would increase their workload, leading to an estimated additional staff need of 2887 FTEs by 2020 (i.e. an increase of 1200 FTEs compared to 2013) which corresponds to supplementary EUR 106 million compared to the agencies' current operating grant. 


The two following adjustments need to be made to the CBA estimates of additional human resources to be phased in the EAs.


1.Although the average budget managed by ‘head’ in the six executive agencies is expected to increase from EUR 3.47 million in 2013 to EUR 4.60 million per staff member in 2020, there is a drop of this ratio in the case of two agencies (EACEA and ERCEA). The Commission is of the view that such drop in productivity cannot be justified, and is not consistent with the advantages stressed by the CBA itself in terms of specialisation, simplification and economies of scale. Therefore, rather than taking them at face value, the CBA results have been adjusted in order to ensure a sustained or improved level of underlying productivity in each of these two agencies in 2020 compared to 2013. The effect is a decrease in the number of additional FTEs required in the EAs by some 170 in comparison with the CBA estimates.  


2.Moreover, to reconcile this result with the overall 5% staff reduction in all EU institutions, agencies and bodies mentioned in point 2.1 above, a 5% reduction has been applied to the 2013 staffing levels of all executive agencies, corresponding to a reduction of 84 FTEs. This reduction will be spread evenly over the period 2014-2020 in the form of deduction from the identified additional need for each agency.  


Table 2: Proposed human resources in executive agencies in 2013 and 2020
   





Envisaged EA




FTEs in EA


in 2013




Envisaged


FTEs in EA


in 20201,2




Change


2013-2020






EACEA1




431




442




11






EACI3




159




498




354






EAHC




50




79




29






TEN-T EA3




100




318




203






ERCEA1




389




529




140






REA




558




764




206






Total




1687




2630




943





1 Number of FTEs envisaged in 2020 has been adjusted for EACEA and ERCEA to exclude any drop in productivity and takes into account the 2020 estimate of the budget to be managed by the agencies.
   


2 The number of FTEs in 2020 takes into account the 5% reduction required in the IIA.


3 The transfer of 15 FTE from EACI to TEN-T EA (related to the transfer of legacy of the Marco-Polo programme) is already incorporated.


The resulting estimated additional staff needs after the above adjustments add up to 943 FTEs (i.e. an increase of 56 % compared to 2013) corresponding to some EUR 83 million compared to the agencies' current operating grant. 


Annex 1b sets out the adjusted chosen delegation scenario for each EA (i.e. after incorporating the aforementioned changes to the CBA chosen delegation scenario) and it also includes an update of the budget to be managed by the EAs at cruising speed in 2020. 


3.2.Impact on human resources in the parent DGs


As stipulated in Council Regulation No 58/2003, the delegation of programmes to executive agencies has a two-fold impact on the Commission’s human resources. First, transferring tasks from the Commission’s departments to executive agencies frees the Commission’s resources (i.e. creates ‘freed posts’) for redeployment to other priorities in the annual allocation of human resources. Second, Commission officials are to be seconded as temporary staff members to executive agencies to fill positions of responsibility. Their posts remain vacant in the Commission during their secondment (the posts are ‘frozen’) and a corresponding number of posts in the Commission’s establishment plan do not have to be covered by the budget. Administrative appropriations in the Commission’s budget are reduced accordingly (under Article 18(2) of Council Regulation No 58/2003). 


A small part of human resources will have to be used by the Commission’s departments to supervise tasks delegated to EAs, notably to monitor the efficiency and effectiveness of programme implementation.


3.2.1.‘Freed’ human resources


According to the chosen delegation scenario, delegating the new programmes to the executive agencies will free 415 FTEs (353 from the research budget and 62 from the operating budget) in the Commission over the next MFF period. In the past, those ‘freed’ human resources were redeployed to other tasks in accordance with Article 13(6)(c) of Council Regulation No 58/2003. Given the Commission’s commitment to the overall reduction in staff, and with a view to containing administrative expenditure, most human resources freed in the Commission as a result of delegating programme management should be deducted from its establishment plan and/or budget altogether, to offset the expenditure required for the additional FTEs in the EAs.




3.2.2. ‘Frozen’ posts for officials seconded to EAs


Article 18 of Council Regulation No 58/2003 provides for Commission officials to be seconded to positions of responsibility in the executive agencies to accompany the delegation of tasks. Their posts should remain vacant in their institution of origin for the duration of their secondment, but without the corresponding appropriations.


Although such ‘frozen’ posts appear in both the Commission’s and the agency’s establishment plans, the removal of the corresponding appropriations (‘abatement’) generates savings in administrative expenditure in the Commission’s budget.


Based on the Commission’s current decision to limit such secondment to a maximum of 33 % of the total number of temporary staff in executive agencies,
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 the CBA estimates the maximum number of additional secondments to EAs at 61 posts (46 from the research budget and 15 from the operating budget). However, the Commission will temporarily suspend this threshold in order to facilitate the transfer of know-how from the Commission to EAs and thus speed up implementation of the programmes in the first years of delegation.


3.2.3.Supervision of executive agencies


Supervision of executive agencies is an additional governance task resulting from programme delegation that must be performed by the parent DGs, under Article 20 of Council Regulation No 58/2003. The level of staffing required for supervision must be in line with best practice, so as not to undermine the cost-efficiency of the preferred delegation scenario compared with the in-house scenario. 


Based on the results of the screening reports and related data communicated to the Budget Authority, the ratio of the Commission’s supervision staff to agency staff should therefore not exceed 2.4 % in 2020. The cost-benefit analysis indicates that by 2020 a total of 57 FTEs (i.e. 40 FTEs already in place and additional 17 FTEs) will be needed to carry out supervision tasks in the parent DGs. This number does fall below the limit of 2.4% mentioned above. 


3.3.Ensuring budget neutrality


The expected efficiency gains of the delegation scenario chosen and the resources to be freed in the Commission departments by delegating tasks to EAs will allow a bigger budget to be implemented with fewer resources compared to the in-house scenario. To achieve budget neutrality over the period, the Commission will offset the increase in expenditure on additional human resources in EAs primarily by reducing its own human resources (officials and contract agents), which will lead to savings of a corresponding amount on a yearly basis. 


However, the expenditure corresponding to the total number of staff which, according to the CBA, can be freed and frozen in the Commission departments will not be sufficient to offset the expenditure required for additional staff in EAs. Further posts will have to be freed in the Commission departments in addition to those identified in the CBA, in order to ensure budget neutrality. 


To this end, the following four adjustments will be made to increase the number of posts/contract agents to be freed in order to offset the cost of additional human resources in EAs: 


1.a reduction in local support and coordination functions (overheads) proportionate to the number of posts/contract agents planned to be freed or frozen will result in 42 FTEs; 


2.a reduction in local overheads, for relevant parent DGs whose corresponding share is higher than the average of the 'family' of DGs
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, will result in 29 FTEs;


3.setting up the Common Support Centre for Horizon 2020 (see section 5 below) is expected to lead to further efficiency gains and the saving of 30 FTEs by the end of 2015; 


4.an updated assessment of delegation to ERCEA resulting in additional 20 FTEs to be freed. 


These adjustments will allow freeing a total of 121 FTEs in addition to the 476 FTEs identified by the CBA to be freed (415 FTEs) and frozen (61 FTEs). Other measures may be contemplated in the future. 


Annex 2 provides a complete overview of the resources to be freed and frozen in each DG by delegating tasks to the executive agencies.


Once all alternative sources of savings have been exhausted between 2014 and 2020, the Commission central redeployment pool will be used as a last resort, and primarily for research posts, with a maximum of 116 FTEs.  


Annex 3 presents the details of this compensation mechanism.  


3.4.Phasing in and phasing out human resources




The Commission departments will have to complete all tasks stemming from the legacy of 2007-2013 programmes currently managed in-house until they are closed. In addition, where predecessor activities have not been delegated to an executive agency, the Commission departments will have to take care of the launch of the new programmes while the agencies are building up capacity. So the phasing out of human resources will have to be gradual.  


Annex 2 shows the resulting annual phasing out of human resources from the Commission departments over the period 2014-2020. Annexes 4a and 4b show the phasing in of staff in the EAs per programme and per year according to the CBA report and as adjusted by the Commission respectively. 


The Commission will monitor the overall delegation process in order to ensure that it delivers on all its objectives. 


4.Implementation modalities


4.1.Recruitment


Council Regulation 58/2003 requires that the staff of executive agencies consist both of EU officials seconded by the institutions to fill positions of responsibility (and appointed by the agencies as temporary staff), and of other temporary staff and contract staff directly recruited by the agencies.  


Section 4.3 considers how to attract seconded officials to the executive agencies.


As regards temporary staff directly recruited by the agency, experience shows that agencies are able to attract and keep people of the highest standard of ability, efficiency and integrity. After recruitment, their career development in the agency is secured by rules on evaluation and re-grading and by the prospect of a permanent contract. Similarly, the Commission proposal
12
 to create a new category of temporary staff (2f) will further enhance career prospects (within and outside the agency).


With regard to the newly delegated activities, it will be possible in the longer run to achieve a good balance between temporary agents and seconded Commission staff. This will also give temporary staff wider career prospects.


The situation is similar for contract staff, with some slight differences. To date, agencies have succeeded in recruiting staff with the required profile. However, the recruitment process is not entirely under the agencies’ control, unlike that for temporary staff, in that they are obliged to rely on an external provider (EPSO). Agencies have voiced concern about the current state of CAST lists for certain profiles. The Commission is putting in place two mechanisms to remove any risk of a shortage of candidates in the short and medium term. The first is to identify Commission contract staff who have the relevant profile and whose contract is ending; this will create a source of skilled and immediately employable staff. The second is to transfer contract staff (without the need for a further selection procedure) from the Commission to the agency when programmes are delegated. In the longer run, the Commission will also ensure that EPSO selects the necessary staff.
   


In terms of careers, contract staff in executive agencies enjoy the benefits of 3a contract staff status: advancement in grade, the prospect of contract for indefinite period, etc.


Finally, staff members whose activities are transferred from one executive agency to another will be given the option of continuing their tasks in the new agency without negative impact on their rights.


4.2.Housing of executive agency staff 


Council Regulation 58/2003 specifies that the executive agencies should be located in the same place as Commission and its departments (Article 5). Furthermore, operational efficiency, logistics and considerations of attractiveness (see below) are reasons for locating them close to the buildings occupied by the parent DGs.


The Commission Offices for Infrastructure and Logistics (OIB and OIL) already help executive agencies accommodate staff and maintain buildings via Service Level Agreements. The costs of these services are borne by the executive agencies.


The prospects for expanding the executive agencies’ staff are coupled in time with the reduction in Commission staff, even if the numbers do not correspond — firstly, because Commission officials will be seconded to the agencies, and secondly, because of the anticipated 5 % global reduction in staffing.


This means the OIB and OIL need to consider housing the executive agencies in close connection with the Commission’s middle- and long-term real estate planning.


In Brussels, there are economic factors that favour purchase or other long-term contracts over rental, with the Commission further sub-letting space to the executive agencies. This is because the executive agencies’ programmes are limited in time, while the Protocol on the Privileges and Immunities of the European Union applies to rent contracts of a certain minimum duration. Since this set-up requires time, it should not exclude interim solutions to meet the agencies’ short-term needs.


In Luxemburg, the EAHC is in a more flexible position: there are no fiscal constraints on the duration of the leases, and any increase in staffing could be accommodated by renting more space in the existing premises.


4.3.Attractiveness of the executive agencies




Delegating 2014-2020 programmes to EAs will increase the number of positions of responsibility. These positions are as a general rule occupied by Commission officials seconded in the interest of the service. Accordingly, the number of Commission officials to be seconded to fill them will also increase. It is therefore desirable to enhance the attractiveness of assignments in the executive agencies. Three types of measures are envisaged.


4.3.1.Keep the executive agencies closer to the Commission


Executive agencies implement EU programmes on behalf of and under the close supervision of the Commission. There are therefore close relationships between the Commission and the agencies that should be reflected in the administrative and human resources arrangements. For that reason, it is proposed to adopt the following measures:


-The parent DG’s organisation chart should clearly reflect the fact that it has delegated the execution of programme(s) for which it is responsible to the agency(ies). The relevant structure of the agency should be shown accordingly, together with positions of responsibility in the agency. The posts of seconded officials should appear in the (relevant) structure.


-The selection of Commission officials to be seconded in the interest of the service will be made by the seconding DG, in close collaboration with the executive agency. This implies that:


oposts for officials seconded to executive agencies should be published in the same grade brackets as in the Commission


oall the procedural steps should follow the Commission’s rules


oofficials will be appointed to the secondment posts in the parent DG before secondment.


-Human resources management in the executive agency should as far as possible be aligned with HR management practices in the relevant parent DG.


-Parent DGs will be called upon to involve seconded officials regularly in the activities of their reference unit, directorate or directorate general.


-Other temporary agents and contract agents are directly recruited by the agencies, the latter category on the basis of selection by EPSO. The Commission’s procedures will be applied.


4.3.2.Secure the career of seconded officials


The seconded officials will receive support from the Commission departments before, during and after the secondment. In particular, the following measures will be applied:


-Seconded officials will be appraised by the person for whom they work, unless circumstances justify otherwise (in which case this person will contribute to the appraisal report).


-Seconded officials will be appropriately spoken for in the annual promotion exercise.


-Parent DGs will remain in close contact with their seconded officials in order to properly manage their expectations in relation to future job opportunities.


-In no circumstance will secondment put an official at an economic disadvantage.


4.3.3.Align the working environment in executive agencies and the Commission


Keeping the Commission and the executive agencies closer can also be achieved by bringing their working environments closer. Among the proposals are the following:


-The executive agencies will be brought inside the Commission’s ‘security perimeter’ by offering them same safety and security conditions as the parent DG.




-As a consequence, they will be offered the same IT environment as the Commission.


-The Commission and the executive agencies may in the future share common buildings and have access to the same facilities on the premises.


5.Establishment of the Common Support Centre for HORIZON 2020 


The Commission is committed to consistent application of a single set of rules for participation and dissemination in Horizon 2020
13
. To help coordinate and deliver the programme,
14
 a Common Support Centre (CSC) will be set up in the Commission. It will aim to provide high quality services in legal support, ex-post audit, IT systems and operations, business processes, programme information and data to all research DGs, executive agencies and joint undertakings (JUs) implementing Horizon 2020. Bringing these support services together is expected to result in efficiency gains from cost reduction, job savings and rationalisation of processes and procedures.  


5.1.Scope and definition of the services supplied


The CSC will deliver services covering all the Horizon 2020 activities of research DGs, EAs and JUs. Extending certain services further, i.e. to other programmes under direct management for which the research DGs are responsible, might be considered at a later stage, following a mid-term review in 2017. Some of the services (namely, legal support, ex-post audit and IT) will also cover the Seventh Framework Programme (FP7) legacy managed in-house. The agencies and JUs will continue to be responsible for delivering the support services for FP7 activities delegated to them until FP7’s definitive closure.


5.1.1.Common legal support service


FP7 attracted widespread criticism of the complexity of the programme and the inconsistent way rules and procedures were applied across Commission departments. To remedy these weaknesses, the Commission simplified some aspects during the current programme. Building on these measures, simplification is the major cross-cutting principle behind the rules on participation and dissemination in Horizon 2020. The Court of Auditors
15
 emphasised the need to apply consistent rules across all Horizon 2020 actions in close coordination between the various implementing bodies.   


To meet this objective, the Common legal support service will be tasked with providing timely, practical, clear and unambiguous interpretation of Horizon 2020 rules and procedures. It will be a kind of legal advice service ("jurisconsulte") for research DGs, EAs and JUs implementing the framework programme. The DGs, EAs and JUs must continue to provide day-to-day frontline legal advice, entailing no new or additional interpretation of the rules but simply explaining them to project officers and beneficiaries.


Other tasks will include drafting legal acts for the implementation of Horizon 2020, providing legal support for external audit and audit implementation and providing specifications for business processes. This service will also liaise between research DGs, EAs and JUs, and the Legal Service and the Directorate-General for Budget (BUDG) on the interpretation of the Financial Regulation and the Horizon 2020 basic acts. In addition, it will ensure a common approach to requests for access to documents and data protection issues for Horizon 2020 and it will provide assistance in the event of complaints to the European Ombudsman or litigation before the European Court of Justice. This is without prejudice to the exclusive role of the Legal Service, in conformity with the Rules of Procedure, in providing opinions on all drafts or proposals for legal instruments and on all documents which may have legal implications and in representing the Commission before Union and national Courts.  


As of 1 January 2014, similar services will also be provided for the FP7 legacy managed in-house.  


5.1.2.Common audit service


Current cooperation between audit services in the research DGs is based on the FP7 Ex-post Audit Strategy 2009-2016
16
 and the common representative audit sample. There also are several inter-service groups aimed at coordinating audit efforts and sharing audit results across research DGs and EAs. Setting up a common audit service for all research activities was recommended by the Research Task Force in 2010,
17
 and by the IAS in its 2011 audit on ‘DG RTD’s control strategy for on-the-spot controls and fraud prevention and detection’.
18
 The launching of Horizon 2020 provides the right opportunity to pool together audit services for all the research DGs,
19
 to enable the Commission to carry out ex-post controls consistently in line with Article 23(3) of the draft Regulation.
20
 


The Common audit service will help to assess the legality and regularity of Horizon 2020 project payments by means of ex-post financial audits carried out on the spot, either by its own auditors or by independent audit firms. It will thereby provide the relevant Authorising Officers by Delegation (AODs) with the necessary elements of assurance on the research budget for which they are responsible.


The common audit service will be in charge of delineating an ex-post audit strategy for Horizon 2020 which must comply with the Commission’s commitment to reducing the audit burden on participants by ensuring that no more than 7 % of beneficiaries are subject to audit over the programming period.
21
 


The common audit service will take care of the complete audit process, i.e. planning, selection of beneficiaries for audit, execution and closure. The research DGs, EAs and JUs will be responsible for taking any corrective action accordingly and following up the audit findings.


The common audit service will also provide support for the research DGs, EA and JUs in performing ad hoc audits (i.e. those not in the Annual Audit Plan). It will support AODs in appeals (including Ombudsman cases) following the audit findings.


The common audit service will also be tasked with setting up and implementing a fraud detection strategy for Horizon 2020. On behalf of the departments and bodies implementing the programme, it will also manage relations with OLAF on irregularities and fraud cases concerning the beneficiaries of research grants.  


From 1 January 2014, the common audit service will perform similar tasks for the FP7 legacy managed in-house. Any follow-up tasks and obligations resulting from FP7 ex post audits carried out by that date will be fulfilled by the entities responsible for those audits.


5.1.3.Common service for business processes




For the purpose of this Communication, business processes are defined as sequences of structured activities covering the complete cycle of programme management (i.e. call management, proposal submission and evaluation, expert and participant management, complete grant lifecycle, external audit of research projects, workflows, reports, evaluation and statistics). Business process owners have overall responsibility for each specific process, including its design in accordance with users’ needs.   


The lack of a common agreement between the research DGs on business processes for FP7 has been a major reason for complaints from beneficiaries and the Court of Auditors’ criticisms of unjustified differences in procedures and treatment of beneficiaries
22
. It has also resulted in complexity and duplication of IT systems designed for FP7.   


A consistent approach to harmonising, simplifying and automating business processes across all implementing bodies is crucial to seamless and efficient delivery of Horizon 2020. The common service for business processes will therefore be responsible for reviewing, coordinating, documenting, monitoring and optimising all processes relating to Horizon 2020 management. To this end, it will closely collaborate with the common legal support service, the common IT service and the business process owners, who will remain in the Commission’s departments and the executive agencies involved. It will be an active facilitator to guarantee consistency between different business processes and between business processes and IT systems.  


5.1.4.Common IT service


Currently, there are 21 IT systems supporting the complete FP7 grant management cycle. A partnership between the research DGs and Directorate-General for Informatics is in place
23
 with a view to making progress towards common IT solutions, streamlining the business processes and improving the quality of the services offered to the public. The most notable achievement is the ‘Research Participant Portal’, which serves as a single entry point for all grant beneficiaries. Two other important IT projects are being developed to rationalise the back office systems of the research DGs with a view to Horizon 2020 implementation:


-SYGMA — a new IT system that has been designed to cater for all aspects of grant management and to progressively replace the applications currently used by the research DGs. It is expected to bring savings of EUR 3-4 million in the period 2011-2015.


-COMPASS — a common electronic (paperless) workflow tool that will enable the automation of all business processes relating to programme management.  


The main functions of SYGMA and COMPASS needed for the start of Horizon 2020 are planned to be operational from 1 January 2014. After the current development phase, services relating to the maintenance and further development of these systems, help-desk support and training will be taken over by the CSC.  


A new partnership agreement between the CSC, representing the research DGs, and the Directorate-General for Informatics will be needed to set out the responsibilities of the various parties, working modalities and the resources required to pursue collaboration on the common IT systems for the research DGs.    


In the context of the IT rationalisation, various IT tools, among which SYGMA, developed by the research family have the potential to become corporate tools for grant management in the Commission. Their further extension to other programmes under direct management should be subject to a cost-benefit analysis.  


5.1.5.Common service for Horizon 2020 information and data


In order to ensure the consistency, traceability and high quality of the information and data communicated externally and internally, the Common Support Centre will supply two types of services:    


-It will design the data structure needed and exploit the Common Research Data warehouse (CORDA), which will provide the basis for production and processing of data and statistics on Horizon 2020 implementation to be supplied to applicants and beneficiaries, all Horizon 2020 implementing bodies, other EU institutions and the Member States.


-It will collect research results, store them in databases, edit and disseminate them on the Europa website. 


The dissemination services, mainly related to FP7 results, will continue to be provided by CORDIS (part of the Publication Office) until the end of 2015. The Common Support Centre will coordinate and monitor these activities. It will also be in charge of delineating a strategy for the dissemination and exploitation of remaining FP7 and Horizon 2020 research results in the longer term. Such a strategy should be aligned with the principles of IT and Web rationalisation; in that respect, it should ensure integration with the Research Participant Portal and the new IT systems developed for Horizon 2020. Moreover, it should result in efficiency gains in terms of cost reduction and job savings.  


5.2.Organisation and governance


The CSC will be entirely hosted by RTD, as one of its directorates. It will bring together the posts dedicated to the provision of the aforementioned support services for Horizon 2020 predecessor programmes in various DGs, agencies and JUs involved. This will result in efficiency gains of 30 FTEs. 


For administrative and day-to-day operational matters, the CSC will be accountable to the Director-General of RTD. It will be overseen by a Steering Board made up of all Directors-General with authorising officer responsibility for Horizon 2020. The Commission’s central departments must also be represented at an appropriate level in the Steering Board. The Director-General for Research and Innovation will chair the Steering Board. The Board’s main role will be to steer the CSC’s activities and to decide on key strategic matters relating to Horizon 2020 implementation. The Steering Board’s decisions must be taken by majority vote and will be binding on all research DGs, EAs and JUs implementing Horizon 2020.  



The CSC’s governance structure will also include an Executive Committee comprising directors from DGs, EAs and JUs involved. The Director of the CSC will chair the Executive Committee. Its main role will be to ensure that CSC activities are implemented in line with the Steering Board’s decisions and the implementing bodies’ needs.





The CSC’s governance structure will therefore aim to guarantee:



-participation by the representatives of all implementing bodies involved in decision-making;


-the CSC’s authority, since it takes decisions binding on all Horizon 2020 implementing bodies;


-the CSC’s independence, as it will provide elements of assurance on the research budget for which each AOD is responsible.


Operating rules will be drafted to specify the CSC’s governance, the responsibilities of the various parties involved, the missions and tasks of each service and all other relevant matters, and more particularly: (1) the involvement of all participating DGs in the publication, filling, transfer, appraisal and promotion of middle and senior management of the CSC; and (2) practicalities such as use of administrative services provided by the host DG, cost-sharing and financial circuits. The operating rules shall be adopted by the Commission.



The CSC will be set up on 1 January 2014 with gradual implementation in the course of 2014.


6.Next steps


A Commission decision to delegate programme management to an EA requires the prior approval of the Committee for Executive Agencies
24
 and no objection by the European Parliament.
25



Pending decisions to be taken on the future mandate of the existing EAs, the 2014 Draft Budget adopted by the College on 26 June 2013 kept staffing of the six EAs at its 2013 level (1 687 FTE
26
) and froze the corresponding 2014 contribution (EUR 170 million) to cover the agencies’ running costs.


In the light of the delegation process, and in time for the start of budgetary conciliation in November 2013, the Commission intends to present an amending letter to take account of the impact of the delegation of programmes on the staffing level and operating grant of each executive agency, with the corresponding phasing out of Commission ‘freed’ human resources to ensure budget neutrality over time, and according to the proposed timetable.


7.Transitional measures


The delegation of all the programmes listed in section 2 of this communication must, in principle, take effect from 1 January 2014. The capacities of agencies to manage programmes which succeed the existing programmes should be ensured. However, if the delegation process is delayed for certain programmes or if an agency is not ready to manage a new programme on that date, the parent DGs will need to ensure programme management by the Commission for a transitional period until delegation takes effect. By the end of 2013, the parent DGs must make transitional arrangements for the new programmes for which they are responsible. 


Commission services should take the necessary measures (including regarding existing secondments in the interest of the service) to make sure the organisation charts are adapted and posts are filled according to the new approach, sufficiently in advance to allow a smooth transition. 


At the same time, executive agencies should take all appropriate measures to phase in the new approach as soon as possible. In particular, executive agencies may, as of the date of adoption of this communication, suspend the application of existing implementing rules to the Conditions of Employment of Other Servants insofar as these rules are incompatible with the new approach regarding organisation charts and management posts.


8.Operative part


The Commission is called upon to:





-approve the Communication;



-instruct the lead parent Directorates-General to finalise the individual draft Commission decisions to delegate programme management to an EA (including, for each EA, the specific financial statement) with a view to complete the inter-service process by 25 September at the latest.  



-mandate DG BUDG to coordinate the submission to the Committee for Executive Agencies and to Parliament of the draft Commission decisions to delegate programme management to an executive agency, accompanied by an information note based on this communication.



-task the central departments with implementing the proposed measures aimed at ensuring that career prospects for seconded Commission officials in the executive agencies are attractive.


-task the central departments with setting up the Common Support Centre (CSC) and supervising RTD’s drafting of the CSC’s operating rules with the assistance of the entities participating in the CSC and of the Legal Service.  




Annex 1a: Chosen delegation scenario per CBA report







Annex 1b: Chosen delegation scenario as adjusted by the Commission







Annex 2: Phasing out of human resources in line with the compensation mechanism (FTEs per DG and year)







Annex 3: Compensation mechanism 







Annex 4a: CBA report: Staff in Executive agencies per programme per year 







   


Annex 4b: Commission proposal: Staff in Executive agencies per programme per year 













(1)


 
   Communication ‘A Budget for Europe 2020’, p.21, COM(2011) 500, 29.6.2011.




(2)


 
   Point [23] of the draft Interinstitutional Agreement on budgetary discipline, cooperation in budgetary matters and on sound financial management.




(3)


 
   Special Report No 13/2009, Delegating implementing tasks to executive agencies: a successful option?.




(4)


 
   Regulation (EC) No 58/2003 of 19 December 2002 laying down the statute for executive agencies to be entrusted with certain tasks in the management of Community programmes, OJ L 11, 16.1.2003, p. 1.




(5)


 
   Council Regulation laying down the MFF for the years 2014-2020.




(6)


 
   As proposed by the Commission in its communication A Simplified Agenda for the MFF 2014-2020, COM(2012) 42, 8.2.2012.




(7)


 
   Following feasibility studies carried out by DIGIT, validation services should also be provided to (all or some of) the entities managing programmes on health, consumer and support for enterprises as from 2014. In the long term, other programmes may also benefit from these services, if a cost-benefit analysis demonstrates that this would result in additional cost-efficiency gains and economies of scale.




(8)


 
   From 2014, the research family DGs will include AGRI, CNECT, EAC, ENER, ENTR, MOVE and RTD.




(9)


 
   Calculated following the Commission’s guidelines for impact assessments for policy proposals (SEC(2009) 92), applying the standard discount rate of 4 % to future benefits to calculate their net present value.




(10)


 
   Guidelines for the establishment and operation of executive agencies financed by the general budget of the European Communities, SEC(2006) 662 final, 31.5.2006, p. 36.




(11)


 
   Planning and optimising Commission human resources to serve EU priorities, 2013 Screening Report, July 2013.




(12)


 
   Proposal for a Regulation of the European Parliament and of the Council amending the Staff Regulations of Officials and the Conditions of Employment of Other Servants of the European Union, COM(2011) 890, 13.12.2011.




(13)


 
   Proposal for a Regulation of the European Parliament and of the Council laying down the rules for the participation and dissemination in ‘Horizon 2020 — the Framework Programme for Research and Innovation (2014-2020)’, COM(2011) 810.




(14)


 
   This is in line with the European Court of Auditors’ recommendation that the Commission improve coherence in FP7 management. European Court of Auditors, Special Report No 2/2013, Has the Commission ensured efficient implementation of the seventh framework programme for research?.




(15)


 
   Opinion No 6/2012 on the proposal for a Regulation of the European Parliament and of the Council laying down the rules for the participation and dissemination in ‘Horizon 2020 — the Framework Programme for Research and Innovation (2014-2020)’.




(16)


 
   The Strategy applies to the research DGs and EAs managing the research programme. JUs have their own ex post audit strategies which are intended to be harmonised with the Commission’s ex post control strategy.




(17)


 
   Ares(2010)659124.




(18)


 
   Ares(2011)1039870.




(19)


 
   Establishing a common audit service solely for Horizon 2020 means that the DGs and EAs involved in the management of other programmes will have to maintain external audit operations for these programmes.




(20)


 
   Proposal for a Regulation of the European Parliament and of the Council establishing Horizon 2020 - The Framework Programme for Research and Innovation (2014-2020), COM(2011) 809 final.




(21)


 
   Communication from the Commission on Horizon 2020 — The Framework Programme for Research and Innovation, COM(2011) 808.




(22)


 
   European Court of Auditors, Special Report No 2/2013, Has the Commission ensured efficient implementation of the seventh framework programme for research?.




(23)


 
   Partnership between the Research DGs and DIGIT. Development of Seventh Research Framework Programme Information Systems, 10 July 2006.




(24)


 
   Council Regulation (EC) No 58/2003, Article 24(2).




(25)


 
   Working Arrangements convened between Commissioner Grybauskaitė and Reimer Böge MEP, Chairman of the European Parliament Budget Committee, of 16 October 2007.




(26)


 
   Including draft amending budget No 4/2013.