Source: EURLEX
Language: en
Format: md

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| 16.12.2011 | EN | Official Journal of the European Union | C 368/8 |

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REPORT

on the annual accounts of the Clean Sky Joint Undertaking for the financial year 2010, together with the replies of the Joint Undertaking

2011/C 368/02

INTRODUCTION

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| 1. | The Clean Sky Joint Undertaking, located in Brussels, was set up in December 2007[(1)](#ntr1-C_2011368EN.01000801-E0001) for a period of 10 years. |

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| 2. | The objective of the Clean Sky Joint Undertaking is to accelerate the development, validation and demonstration of clean air-transport technologies in the EU for earliest possible deployment[(2)](#ntr2-C_2011368EN.01000801-E0002). The research activities coordinated by the Joint Undertaking are divided into six technological areas or ‘Integrated Technology Demonstrators’ (ITDs). |

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| 3. | The Founding Members of the Joint Undertaking are the European Union, represented by the Commission, and industrial partners as the leaders of the ITDs, together with the associate members of the ITDs. |

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| 4. | The maximum EU contribution to the Clean Sky Joint Undertaking to cover running costs and research activities is 800 million euro to be paid from the budget of the Seventh Research Framework Programme[(3)](#ntr3-C_2011368EN.01000801-E0003). Other Members of the Joint Undertaking are to contribute resources at least equal to the EU contribution, including in-kind contributions. |

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| 5. | The Joint Undertaking started working autonomously on 16 November 2009. |

STATEMENT OF ASSURANCE

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| 6. | Pursuant to the provisions of Article 287(1) of the Treaty on the Functioning of the European Union, the Court has audited the annual accounts[(4)](#ntr4-C_2011368EN.01000801-E0004) of the Clean Sky Joint Undertaking, which comprise the ‘financial statements’[(5)](#ntr5-C_2011368EN.01000801-E0005) and the ‘reports on the implementation of the budget’[(6)](#ntr6-C_2011368EN.01000801-E0006) for the financial year ended 31 December 2010, and the legality and regularity of the transactions underlying those accounts. |

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| 7. | This Statement of Assurance is addressed to the European Parliament and the Council in accordance with Article 185(2) of Council Regulation (EC, Euratom) No 1605/2002[(7)](#ntr7-C_2011368EN.01000801-E0007). |

The Director’s responsibility

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| 8. | As authorising officer, the Director implements the revenue and expenditure of the budget in accordance with the Joint Undertaking’s financial rules, under his own responsibility and within the limits of the authorised appropriations[(8)](#ntr8-C_2011368EN.01000801-E0008). The Director is responsible for putting in place[(9)](#ntr9-C_2011368EN.01000801-E0009) the organisational structure and the internal management and control systems and procedures relevant for drawing up final accounts[(10)](#ntr10-C_2011368EN.01000801-E0010) 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

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| 9. | 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 Joint Undertaking and the legality and regularity of the transactions underlying them. |

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| 10. | The Court conducted its audit in accordance with the IFAC and ISSAI[(11)](#ntr11-C_2011368EN.01000801-E0011) International Auditing Standards and Codes of Ethics. Those standards require the Court to comply with ethical requirements and to plan and perform the audit so as to obtain reasonable assurance as to whether the accounts are free of material misstatement and whether the underlying transactions are legal and regular. |

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| 11. | The Court’s audit involves performing procedures to obtain audit evidence of the amounts and disclosures in the accounts and of the legality and the regularity of the transactions underlying them. The procedures selected, including its assessment of the risks of material misstatement of the accounts or of illegal or irregular transactions, whether due to fraud or error, depend on its audit judgement. In making those risk assessments, internal controls relevant to the entity’s preparation and presentation of accounts are considered in order to design audit procedures that are appropriate in the circumstances. The Court’s audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the accounts. |

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| 12. | The Court considers 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

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| 13. | In the Court’s opinion, the annual accounts of the Joint Undertaking fairly present, 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 rules. |

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

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| 14. | In the Court’s opinion, the transactions underlying the annual accounts of the Joint Undertaking for the financial year ended 31 December 2010 are, in all material respects, legal and regular. |

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| 15. | The comments which follow in paragraphs 16-25 do not call the Court’s opinions into question. |

COMMENTS ON THE BUDGETARY AND FINANCIAL MANAGEMENT

Implementation of the budget

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| 16. | The structure and presentation of the 2010 budget were not in line with the requirements of the Council Regulation setting up the Joint Undertaking nor with its financial rules[(12)](#ntr12-C_2011368EN.01000801-E0012). |

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| 17. | The final budget included commitment appropriations of 168 million euro and payment appropriations of 129 million euro. While the utilisation rate for commitment appropriations was 96 %, the rate for payment appropriations was only 58 %. This reflects the significant delays in the implementation of the activities as compared with the initial plan[(13)](#ntr13-C_2011368EN.01000801-E0013). The low implementation of the budget is also reflected in the cash balance, which stood at 53 million euro at the end of the year (41 % of the available payment appropriations in 2010). |

Internal control systems

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| 18. | The Joint Undertaking has not completely implemented its internal controls and financial information systems during 2010. In particular, further work is needed on the ex-ante control procedures applied for the validation of cost claims. These are important elements of the Joint Undertaking’s system of internal control. |

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| 19. | The Court noted that in those cases where a Member or an associate did not submit the required audit certificate[(14)](#ntr14-C_2011368EN.01000801-E0014), the Joint Undertaking correctly did not accept the cost claims. However, in four cases the Joint Undertaking, when validating the cost claims, did not take into account exceptions included in the audit certificates. |

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| 20. | The limited review of the IT controls showed that the Joint Undertaking has an adequate level of IT governance and practice for its size and mission, but the formalisation of policies and procedures, however, is lagging behind in certain areas[(15)](#ntr15-C_2011368EN.01000801-E0015). |

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| 21. | The Accounting Officer of the Clean Sky Joint Undertaking validated the financial and accounting systems (ABAC and SAP). However, the underlying business processes which provide financial information were not validated, in particular the system providing financial information about the validation of the cost claims. |

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| 22. | In October 2010, the Joint Undertaking adopted a comprehensive strategic internal audit plan for the period 2010-2012. It is noted, however, that some of the key processes, such as the ex-ante validation of the cost claims, are scheduled to be examined in 2011 and that the ex-post audits, a key control which aims to assess the legality and regularity of the underlying transactions, are not planned to start until 2011. |

OTHER MATTERS

Protection of Intellectual Property

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| 23. | As at the end of 2010, the Joint Undertaking had not yet completed the internal procedures to supervise the application of the provisions included in the consortium and grant agreements regarding the protection, use and dissemination of research results. |

Internal audit function and the Commission’s Internal Audit Service

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| 24. | In its previous report, the Court pointed out the need to clarify the provision in the Statutes of the Joint Undertaking on the role of the Commission’s internal auditor. Although 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, the Commission and the Joint Undertaking have taken action to ensure that the respective operational roles of the Commission’s Internal Audit Service and the Joint Undertaking’s internal auditing function are clearly defined. |

Lack of host State agreement

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| 25. | As previously reported by the Court, according to the Council Regulation setting up the Joint Undertaking, a host agreement should be concluded between the Joint Undertaking and Belgium concerning office accommodation, privileges and immunities and other support to be provided by Belgium. However, as at the end of 2010, no such agreement had been signed. |

This Report was adopted by Chamber IV, headed by Mr Igors LUDBORŽS, Member of the Court of Auditors, in Luxembourg at its meeting of 25 October 2011.

For the Court of Auditors

Vítor Manuel da SILVA CALDEIRA

President

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