Source: EURLEX
Language: en
Format: md

|  |  |  |  |
| --- | --- | --- | --- |
| 17.12.2013 | EN | Official Journal of the European Union | C 369/57 |

---

REPORT

on the annual accounts of the Fuel Cells and Hydrogen Joint Undertaking for the financial year 2012, together with the Joint Undertaking’s reply

2013/C 369/07

CONTENTS

|  |  |  |
| --- | --- | --- |
|  | Paragraph | Page |
| Introduction … | 1-5 | 58 |
| Information in support of the statement of assurance … | 6 | 58 |
| Statement of assurance … | 7-14 | 58 |
| Opinion on the reliability of the accounts … | 12 | 59 |
| Opinion on the legality and regularity of the transactions underlying the accounts … | 13 | 59 |
| Comments on budgetary and financial management … | 15-18 | 59 |
| Implementation of the budget … | 15-16 | 59 |
| Calls for proposals … | 17-18 | 59 |
| Other matters … | 19-23 | 60 |
| Internal audit function and the Commission’s Internal Audit Service … | 19 | 60 |
| Monitoring and reporting of research results … | 20-22 | 60 |
| Follow-up of previous observations … | 23 | 60 |

INTRODUCTION

|  |  |
| --- | --- |
| 1. | The Fuel Cells and Hydrogen Joint Undertaking (FCH Joint Undertaking), located in Brussels, was set up in May 2008[(1)](#ntr1-C_2013369EN.01005701-E0001) for the period up to 31 December 2017. |

|  |  |
| --- | --- |
| 2. | The objectives of the FCH Joint Undertaking include supporting research, technological development and demonstration activities in the Member States and countries associated with the Seventh Framework Programme[(2)](#ntr2-C_2013369EN.01005701-E0002) through coordination with industry and research organisations, with a focus on developing market applications and hence facilitating additional industrial efforts towards the rapid deployment of fuel cells and hydrogen technologies[(3)](#ntr3-C_2013369EN.01005701-E0003). |

|  |  |
| --- | --- |
| 3. | The founding members of the Joint Undertaking are the European Union, represented by the Commission, and the European Fuel Cell and Hydrogen Joint Technology Initiative Industry Grouping. The Research Grouping N.ERGHY became a member in July 2008. |

|  |  |
| --- | --- |
| 4. | The maximum EU contribution to the FCH Joint Undertaking, to cover running costs and research activities, is 470 million euro from the budget of the Seventh Framework Programme, of which the proportion earmarked for running costs must not exceed 20 million euro. The Industry Grouping is expected to contribute 50 % of the running costs and should contribute to the funding of operational activities through in-kind[(4)](#ntr4-C_2013369EN.01005701-E0004) contributions at least equal to the EU financial contribution. |

|  |  |
| --- | --- |
| 5. | The Joint Undertaking was granted its financial autonomy on 15 November 2010. |

INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE

|  |  |
| --- | --- |
| 6. | The audit approach taken by the Court comprises analytical audit procedures, testing of transactions at the level of the Joint Undertaking and an assessment of key controls of the supervisory and control systems. This is supplemented by evidence provided by the work of other auditors (where relevant) and an analysis of management representations. |

STATEMENT OF ASSURANCE

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
| 7. | Pursuant to the provisions of Article 287 of the Treaty on the Functioning of the European Union (TFEU), the Court has audited:   |  |  | | --- | --- | | (a) | the annual accounts of the Fuel Cells and Hydrogen Joint Undertaking, which comprise the financial statements[(5)](#ntr5-C_2013369EN.01005701-E0005) and the reports on the implementation of the budget[(6)](#ntr6-C_2013369EN.01005701-E0006) for the financial year ended 31 December 2012; and |  |  |  | | --- | --- | | (b) | the legality and regularity of the transactions underlying those accounts. | |

The management’s responsibility

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
| 8. | In accordance with Articles 33 and 43 of Commission Regulation (EC, Euratom) No 2343/2002[(7)](#ntr7-C_2013369EN.01005701-E0007), the management is responsible for the preparation and fair presentation of the annual accounts of the Joint Undertaking and the legality and regularity of the underlying transactions.   |  |  | | --- | --- | | (a) | The management’s responsibilities in respect of the Joint Undertaking's annual accounts include designing, implementing and maintaining an internal control system relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error, selecting and applying appropriate accounting policies on the basis of the accounting rules adopted by the Commission’s accounting officer[(8)](#ntr8-C_2013369EN.01005701-E0008), and making accounting estimates that are reasonable in the circumstances. The Director approves the annual accounts of the Joint Undertaking after its accounting officer has prepared them on the basis of all available information and established a note to accompany the accounts in which he declares, inter alia, that he has reasonable assurance that they present a true and fair view of the financial position of the Joint Undertaking in all material respects. |  |  |  | | --- | --- | | (b) | The management’s responsibilities in respect of the legality and regularity of the underlying transactions and compliance with the principle of sound financial management consist of designing, implementing and maintaining an effective and efficient internal control system comprising adequate supervision and appropriate measures to prevent irregularities and fraud and, if necessary, legal proceedings to recover funds wrongly paid or used. | |

The auditor’s responsibility

|  |  |
| --- | --- |
| 9. | The Court’s responsibility is, on the basis of its audit, to provide the European Parliament and the Council[(9)](#ntr9-C_2013369EN.01005701-E0009) with a statement of assurance as to the reliability of the annual accounts and the legality and regularity of the underlying transactions. The Court conducts its audit in accordance with the IFAC International Standards on Auditing and Codes of Ethics and the INTOSAI International Standards of Supreme Audit Institutions. These standards require the Court to plan and perform the audit to obtain reasonable assurance as to whether the annual accounts of the Joint Undertaking are free from material misstatement and the underlying transactions are legal and regular. |

|  |  |
| --- | --- |
| 10. | The audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the accounts and the legality and regularity of the underlying transactions. The procedures selected depend on the auditor’s judgement, which is based on an assessment of the risks of material misstatement of the accounts and material non-compliance by the underlying transactions with the requirements in the legal framework of the European Union, whether due to fraud or error. In assessing these risks, the auditor considers any internal controls relevant to the preparation and fair presentation of the accounts, as well as the supervisory and control systems that are implemented to ensure the legality and regularity of underlying transactions, and designs audit procedures that are appropriate in the circumstances. The audit also entails evaluating the appropriateness of accounting policies, the reasonableness of accounting estimates and the overall presentation of the accounts. |

|  |  |
| --- | --- |
| 11. | The Court considers that the audit evidence obtained is sufficient and appropriate to provide a basis for its statement of assurance. |

Opinion on the reliability of the accounts

|  |  |
| --- | --- |
| 12. | In the Court’s opinion, the Joint Undertaking’s annual accounts present fairly, in all material respects, its financial position as at 31 December 2012 and the results of its operations and its cash flows for the year then ended, in accordance with the provisions of its financial rules and the accounting rules adopted by the Commission’s accounting officer. |

Opinion on the legality and regularity of the transactions underlying the accounts

|  |  |
| --- | --- |
| 13. | In the Court’s opinion, the transactions underlying the annual accounts for the year ended 31 December 2012 are, in all material respects, legal and regular. |

|  |  |
| --- | --- |
| 14. | The following comments do not call the Court’s opinions into question. |

COMMENTS ON BUDGETARY AND FINANCIAL MANAGEMENT

Implementation of the budget

|  |  |
| --- | --- |
| 15. | The final 2012 budget adopted by the Governing Board reported commitment appropriations of 83,3 million euro and payment appropriations of 56,9 million euro. The utilisation rates for commitment and payment appropriations were 99,4 % and 83,1 % respectively. |

|  |  |
| --- | --- |
| 16. | The provisional 2012 budget outturn account reported a total budget outturn of 8,2 million euro, with receipts comprising member contributions and other sources of revenue of 56,3 and 2,0 million euro respectively, plus the previous year’s budget outturn of 7,5 million euro, netted against payments of 55,2 million euro and carryovers of 2,4 million euro. Year-end cash and cash equivalents amount to 12,3 million euro. |

Calls for proposals

|  |  |
| --- | --- |
| 17. | At 31 December 2012, the FCH Joint Undertaking programme consisted of 103 grant agreements resulting from four annual calls (2008-2011), with a further 28 grant agreements anticipated from the recently completed 2012 call. |

|  |  |
| --- | --- |
| 18. | The calls for proposals organised in 2008, 2009, 2010 and 2011 resulted in grant agreements totalling 295 million euro, and in 2012 a fifth call for proposals was launched for 78 million euro. These amounts represent 67 % and 18 % respectively of the maximum EU contribution to the Joint Undertaking for research activities. In January 2013, a sixth call was launched for the remaining amount (68,5 million euro). |

OTHER MATTERS

Internal audit function and the Commission’s Internal Audit Service

|  |  |
| --- | --- |
| 19. | In accordance with the IAS/IAC coordinated strategic audit plan for the FCH Joint Undertaking for 2011-2013, the FCH JU internal audit capability carried out an audit on ex ante controls for eligibility of declared costs and related payments[(10)](#ntr10-C_2013369EN.01005701-E0010) and performed various consultancy services, including preparation and participation in the communication campaigns of FCH JU on financial control and audit matters. |

Monitoring and reporting of research results

|  |  |
| --- | --- |
| 20. | The Seventh Framework Programme (FP7) establishes a monitoring and reporting system covering the protection, dissemination and transfer of research results. |

|  |  |
| --- | --- |
| 21. | In the grant agreements signed with members and other beneficiaries, the Joint Undertaking has included specific provisions governing intellectual property rights and the dissemination of research activities. Implementation of these provisions is monitored by the Joint Undertaking at different stages of the funded projects. |

|  |  |
| --- | --- |
| 22. | Now that the first projects have been completed, the FCH Joint Undertaking’s monitoring of the implementation of the plan for the use and dissemination of foreground could be improved, either through the information system set up by the Commission in accordance with Article 27 of Regulation (EC) No 1906/2006 of the European Parliament and of the Council[(11)](#ntr11-C_2013369EN.01005701-E0011) to allow for the entire FP7 to be monitored in an efficient and coherent manner, or through an equivalent tool. |

Follow-up of previous observations

|  |  |
| --- | --- |
| 23. | In 2012 the business continuity plan and disaster recovery plan were finalised. |

This Report was adopted by Chamber IV, headed by Dr Louis GALEA, Member of the Court of Auditors, in Luxembourg at its meeting of 22 October 2013.

For the Court of Auditors

Vítor Manuel da SILVA CALDEIRA

President

---

[Top](#document1)