Source: EURLEX
Language: en
Format: md

|  |  |  |  |
| --- | --- | --- | --- |
| 16.12.2014 | EN | Official Journal of the European Union | C 452/58 |

---

REPORT

on the annual accounts of the SESAR Joint Undertaking for the financial year 2013, together with the Joint Undertaking’s replies

(2014/C 452/07)

CONTENTS

|  |  |  |
| --- | --- | --- |
|  | Paragraph | Page |
| Introduction | 1-5 | 59 |
| Information in support of the statement of assurance | 6 | 59 |
| Statement of assurance | 7-14 | 59 |
| Opinion on the reliability of the accounts | 12 | 60 |
| Opinion on the legality and regularity of the transactions underlying the accounts | 13 | 60 |
| Comments on budgetary and financial management | 15-18 | 61 |
| Implementation of the budget | 15 | 61 |
| Multilateral Framework Agreement (MFA) | 16-18 | 61 |
| Other matters | 19-27 | 61 |
| Legal framework | 19-20 | 61 |
| Internal audit function and the Commission’s Internal Audit Service | 21 | 61 |
| Monitoring and reporting of research results | 22-23 | 61 |
| Conflicts of interest | 24 | 62 |
| The Commission’s Second Interim Evaluation | 25-26 | 62 |
| Follow-up of previous observations | 27 | 62 |

INTRODUCTION

|  |  |  |
| --- | --- | --- |
|  | 1. | The SESAR Joint Undertaking (SJU), located in Brussels, was set up in February 2007[(1)](#ntr1-C_2014452EN.01005801-E0001) in order to manage the technological component of the SESAR (Single European Sky Air Traffic Management Research) project. |

|  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  | 2. | The SESAR project aims to modernise air traffic management (ATM) in Europe and is divided into three phases:   |  |  | | --- | --- | | (a) | A ‘definition phase’ (2004-2007) led by the European Organisation for the Safety of Air Navigation (Eurocontrol), with co-financing from the European Union budget through the Trans-European Networks — Transport programme. The outcome was the European ATM Master Plan, which defines the content and describes the development and deployment of the next generation of ATM systems. |  |  |  | | --- | --- | | (b) | A two-term ‘development phase’ (term 1: 2008-2016 funded by the 2008-2013 programming period; term 2: 2017-2024 funded by the 2014-2020 programming period) managed by the SJU and leading to the production of new technological systems, components and operational procedures as defined in the European ATM Master Plan. |  |  |  | | --- | --- | | (c) | A ‘deployment phase’ (2014-2024) to be led by industry and stakeholders for the large-scale production and implementation of the new ATM infrastructure. | |

|  |  |  |
| --- | --- | --- |
|  | 3. | The SJU was designed as a public-private partnership. The founding members are the European Union represented by the Commission, and Eurocontrol, represented by its Agency. Following a call for expressions of interest, fifteen public and private enterprises from the air navigation industry became members of the Joint Undertaking. They comprise aircraft manufacturers, ground and airborne equipment manufacturers, air navigation service providers and airport authorities. |

|  |  |  |
| --- | --- | --- |
|  | 4. | The budget for the development phase of the SESAR project is 2,1 billion euro, to be provided in equal parts by the EU, Eurocontrol and the participating public and private partners. The EU contribution is funded from the Seventh Research Framework Programme and the Trans-European Networks — Transport programme. Around 90 % of the funding from Eurocontrol and the other stakeholders is in the form of in-kind contributions. |

|  |  |  |
| --- | --- | --- |
|  | 5. | The SESAR JU started to work autonomously on 10 August 2007. |

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 SESAR Joint Undertaking, which comprise the financial statements[(2)](#ntr2-C_2014452EN.01005801-E0002) and the reports on the implementation of the budget[(3)](#ntr3-C_2014452EN.01005801-E0003) for the financial year ended 31 December 2013, and |  |  |  | | --- | --- | | (b) | the legality and regularity of the transactions underlying those accounts. | |   The management’s responsibility   |  |  |  |  |  |  |  | | --- | --- | --- | --- | --- | --- | --- | |  | 8. | In accordance with Articles 39 and 50 of Commission Delegated Regulation (EU) No 1271/2013[(4)](#ntr4-C_2014452EN.01005801-E0004), 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[(5)](#ntr5-C_2014452EN.01005801-E0005), 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[(6)](#ntr6-C_2014452EN.01005801-E0006) 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 the opinions set out below. |   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 2013 and the results of its operations and 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 2013 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 2013 budget adopted by the Administrative Board included commitment appropriations of 64,3 million euro and payment appropriations of 105,4 million euro. The utilisation rates for commitment and payment appropriations were 99,6 % and 94,7 % respectively. |

Multilateral Framework Agreement (MFA)

|  |  |  |
| --- | --- | --- |
|  | 16. | At 31 December 2013, the SJU development phase consisted of project work by 16 members (including Eurocontrol) on programme activities involving more than 100 private and public entities and subcontractors. Of the 358 SESAR programme projects under the 3rd MFA, 333 (93 %) were being implemented or had been completed. |

|  |  |  |
| --- | --- | --- |
|  | 17. | Of the 595 million euro in co-financing contributions payable by the European Union and Eurocontrol to the other 15 members under the 3rd MFA, 100 % had been committed and 55 % (316 million euro) had been paid out at 31 December 2013, while the remaining 45 % (279 million euro) is expected to be paid by 31 December 2016. |

|  |  |  |
| --- | --- | --- |
|  | 18. | In 2013 the Joint Undertaking concluded its 4th MFA, which came into force on 1 January 2014 for the remaining three years of the Joint Undertaking’s operating life[(7)](#ntr7-C_2014452EN.01005801-E0007). |

OTHER MATTERS

Legal framework

|  |  |  |
| --- | --- | --- |
|  | 19. | On 13 December 2013 the SJU’s Administrative Board, in agreement with the Commission, adopted on a provisional basis the SJU Financial Rules for the 2014-2020 programming period, pursuant to Commission Delegated Regulation (EU) No 1271/2013 of 30 September 2013 on the framework financial regulation for the bodies referred to in Article 208 of Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council, with effect from 1 January 2014. |

|  |  |  |
| --- | --- | --- |
|  | 20. | The SJU’s Financial Rules are subject to the forthcoming opinions and decision of the Commission, particularly in relation to the continuation of derogations of funding that were in place in the previous programming period. |

Internal audit function and the Commission’s Internal Audit Service

|  |  |  |
| --- | --- | --- |
|  | 21. | In accordance with the IAS/IAC coordinated strategic audit plan for the SJU for 2012-2014, the IAS carried out a limited review of the closing procedure applicable to grant management projects[(8)](#ntr8-C_2014452EN.01005801-E0008) and a risk assessment of information technology (IT), and the IAC carried out a compliance audit of procurement and contract management[(9)](#ntr9-C_2014452EN.01005801-E0009) and a review of the ABAC Workflow authorisations in 2013. |

Monitoring and reporting of research results

|  |  |  |
| --- | --- | --- |
|  | 22. | In 2013 the SJU continued to implement its policy on the monitoring and reporting of research results through the publication on 31 May 2013 of its Annual Report on the Joint Undertaking’s monitoring of the implementation of the Intellectual Property provisions in all financial years prior to 2013, and through its Administrative Board’s adoption on 30 October 2013 of the foreground list compiled and the related ownership status for all financial years prior to 2013. |

|  |  |  |
| --- | --- | --- |
|  | 23. | In addition, the SJU disseminated research foreground by making available detailed information on deliverables and their processes to the relevant stakeholders on its extranet, and by publishing general summary details of 2013 deliverables in its 2013 annual activity report. |

Conflicts of interest

|  |  |  |
| --- | --- | --- |
|  | 24. | The SJU has put in place specific measures to prevent conflicts of interest with respect to its three key stakeholders: Administrative Board members, employees and experts. These are adequately documented in a comprehensive written procedure, which was updated in 2012. |

The Commission’s Second Interim Evaluation
[(10)](#ntr10-C_2014452EN.01005801-E0010)

|  |  |  |
| --- | --- | --- |
|  | 25. | The Commission’s Second Interim Evaluation was carried out from October 2013 to March 2014 and assessed the Joint Undertaking in terms of implementation of the regulation, working methods, results obtained and general financial situation. |

|  |  |  |
| --- | --- | --- |
|  | 26. | The report contains two main recommendations, the first one on the need to better address the specific information and communication needs of Member States which are different from the more technical needs of the Joint Undertaking members[(11)](#ntr11-C_2014452EN.01005801-E0011); the second one on the need to continue efforts to improve the rate of completion of the Joint Undertaking’s annual goals (as stated in its Annual Work Programme) which increased from approximately 60 % in 2010 to 82 % by the end of 2012. |

Follow-up of previous observations

|  |  |  |
| --- | --- | --- |
|  | 27. | The improvements as regards the ex-ante control area have been implemented. |

This Report was adopted by Chamber IV, headed by Mr Milan Martin CVIKL, Member of the Court of Auditors, in Luxembourg at its meeting of 21 October 2014

For the Court of Auditors

Vítor Manuel da SILVA CALDEIRA

President

---

[Top](#document1)