—

having regard to the final annual accounts of the European Joint Undertaking for ITER and the Development of Fusion Energy for the financial year 2010,

—

having regard to the Court of Auditors’ report on the annual accounts of the European Joint Undertaking for ITER and the Development of Fusion Energy for the financial year 2010, together with the replies of the Joint Undertaking (1),

—

having regard to the conclusions of the European Parliament Joint Delegation of the Committee on Budgets and the Committee on Budgetary Control to ITER in Cadarache of 16-18 May 2011,

—

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

—

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

—

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

—

having regard to Council Decision 2007/198/Euratom of 27 March 2007 establishing the European Joint Undertaking for ITER and the Development of Fusion Energy and conferring advantages upon it (3), and in particular Article 5 thereof,

—

having regard to the Financial Regulation of the European Joint Undertaking for ITER and the Development of Fusion Energy, adopted by decision of 22 October 2007 of the Joint Undertaking’s Governing Board (hereinafter ‘ITER Financial Regulation’),

—

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

—

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

—

having regard to the report of the Committee on Budgetary Control (A7-0113/2012),

A.

whereas the European Joint Undertaking for ITER and the Development of Fusion Energy (‘the Joint Undertaking’) was set up in March 2007 for a period of 35 years,

B.

whereas the Court of Auditors states that it has obtained reasonable assurances that the annual accounts for the financial year 2010 are reliable and that the underlying transactions are legal and regular,

C.

whereas the ITER Financial Regulation is based on the framework Financial Regulation, which was recently amended to bring it into line with changes made to the general Financial Regulation,

D.

whereas on 9 October 2008 the Court of Auditors delivered Opinion No 4/2008 on the ITER Financial Regulation,

E.

whereas the Joint Undertaking started to work autonomously on 18 March 2008,

F.

whereas at the creation of the Joint Undertaking the indicative total resources deemed necessary for the period 2007 to 2014 were EUR 9 653 000 000,

G.

whereas the final budget of the Joint Undertaking for the financial year 2010 included commitment appropriations of EUR 444 100 000 and payment appropriations of EUR 241 700 000,

1.

Notes that in January 2010 the Governing Board accepted the resignation of the Joint Undertaking’s first Director;

2.

Notes with concern that the Court of Auditors draws attention to the requirement for substantially increased resources for the ITER project compared to the indicative total resources deemed necessary for the period 2007-2014;

3.

Notes that the budget of the Joint Undertaking for the financial year 2010 was initially adopted for the collective amount of EUR 447 440 000 in commitment appropriations and EUR 254 900 000 in payment appropriations; understands from the Joint Undertaking’s Final Accounts that its 2010 budget has been amended twice; acknowledges in particular that the purpose of the two amending budgets was fourfold:

4.

Takes note from comments by the Joint Undertaking that it has implemented 99,9 % of its 2010 budget in terms of commitment appropriations; is however concerned with the delays in implementing activities which resulted in a utilisation rate for payment appropriations of only 63,4 %;

5.

Acknowledges with concern that carry-overs from 2009 amounted to EUR 106 800 000 in commitment appropriations and EUR 52 200 000 in payment appropriations and that these appropriations are mainly accruing from the ITER host state and assigned to the ITER construction;

6.

Notes from the Joint Undertaking’s Final Accounts that in 2010 cancelled commitment and payment appropriations for administrative expenditure amounted to EUR 1 090 550,73 while cancelled payment appropriations for operational expenditure amounted to EUR 50 713 452,82;

7.

Underlines with concern the high cash balance, which amounted to EUR 78 800 000 at the end of the year representing 26,8 % of the available payment appropriations in 2010;

8.

Notes from the Joint Undertakings’ 2010 Annual Activity Report (AAR) that a total of 44 procurement contracts were awarded for a total value of EUR 826 000 000; notes, in particular, that 42 operational procurement procedures were initiated, 43 procurement evaluations were completed and 43 procurement contracts were signed; also establishes from the AAR that the Joint Undertaking issued a total of five administrative procurement procedures, awarded seven administrative procurement contracts for a total value of EUR 6 000 000 and signed six procurement contracts;

9.

Ascertains that a total of 16 grant procedures were issued, 21 evaluations were completed, 23 agreements were awarded and 29 agreements were signed;

10.

Acknowledges that the Court of Auditors tested a sample of nine procurement and six grant award procedures; is concerned that, out of the nine procurement procedures audited, three of them received only one offer; is furthermore concerned that for the grants, the average number of proposals received was only one per call; urges the Joint Undertaking to develop an Action Plan with concrete measures and deadlines to maximise competition and to follow the value-for-money principle in the call preparation, publication, evaluation and contract management phases;

11.

Notes that the controls applied by the Joint Undertaking before payments are made under grant agreements are not sufficiently documented to provide assurance regarding compliance with the financial requirements and the eligibility of the underlying costs; underlines that the Internal Auditor of the Joint Undertaking has also noted that the ex-ante control approach for payments of cost claims is not effective and not well prepared to process cost claims; calls on the Joint Undertaking to take the necessary measures to reinforce controls before payments are executed and to keep the discharge authority informed on this matter;

12.

Notes that the list of contracts and grant beneficiaries is not publicly available on the Joint Undertaking’s website and is concerned by this lack of transparency; calls, therefore, on the Joint Undertaking to follow the examples set by the Joint Undertakings Clean Sky, FCH, IMI and SESAR and to update its website with a complete list of contracts and grants beneficiaries for 2010 as well as for the previous financial years;

13.

Notes with concern that the Joint Undertaking’s internal control systems have not yet been fully established and implemented as required by its Financial Regulation; further regrets that concerns have been voiced on the financial circuits and the separation of duties; recognises that a new organisational structure became operational on 1 January 2011; notes however that the responsibility for the financial circuits has still not been fully assigned and that Joint Undertaking’s key posts were still vacant;

14.

Calls on the Joint Undertaking to validate the business processes that provide financial information to the accounting systems (ABAC and SAP); further urges the Joint Undertaking to put in place an appropriate tool for the management of the operational contracts integrated with the budget and financial reporting systems;

15.

Appreciates that the Joint Undertaking set up an Audit Committee reporting directly to the Governing Board as requested by the discharge authority;

16.

Notes that the Joint Undertaking has started to develop an ex-post audit strategy aiming to assess the legality and regularity of the underlying transactions, to be implemented in 2012; underlines that the Joint Undertaking started to work autonomously on March 2008;

17.

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

18.

Notes however that 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;

19.

Considers it to be essential that the deadline for paying membership contributions is respected by all Members of the Joint Undertaking; notes that measures were approved by the Governing Board for interest to be levied on Annual Membership Contribution in the event of late payment;

20.

Recognises that, although a host agreement on the site and support, privileges and immunities was signed between the Kingdom of Spain and the Joint Undertaking, the permanent premises were yet not made available to the Joint Undertaking; notes however that the Joint Undertaking occupies temporary premises sponsored by the Kingdom of Spain;

21.

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

22.

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

23.

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

24.

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

25.

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

26.

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

27.

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

28.

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

29.

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

30.

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