10.1.2013   

EN

Official Journal of the European Union

C 6/18

1.

The European Joint Undertaking for the implementation of the Joint Technology Initiative on Nanoelectronics (ENIAC Joint Undertaking), located in Brussels, was set up in December 2007 (1) for a period of 10 years.

2.

The main objective of the Joint Undertaking is to define and implement a ‘Research Agenda’ for the development of key competences for nanoelectronics across different application areas in order to strengthen European competitiveness and sustainability, and allow the emergence of new markets and societal applications (2).

3.

The Founding Members of the Joint Undertaking are the European Union represented by the Commission, the Member States Belgium, Estonia, France, Germany, Greece, Ireland, Italy, the Netherlands, Poland, Portugal, Spain, Sweden and the United Kingdom, and the Association for European Nanoelectronics Activities (AENEAS). Other Member States and associated countries, as well as any other country or legal entity capable of making a substantial financial contribution to the achievement of the Joint Undertaking’s objectives, may become members of the ENIAC Joint Undertaking.

4.

The maximum EU contribution to the ENIAC Joint Undertaking to cover running costs and research activities is 450 million euro to be paid from the budget of the Seventh Framework Programme (3). AENEAS is to make a maximum contribution of 30 million euro to the running costs of the Joint Undertaking. ENIAC Member States are to make in-kind contributions to the running costs (by facilitating the implementation of projects), and to provide financial contributions of at least 1,8 times the EU contribution. In-kind contributions are also to be provided by research organisations participating in projects. The organisations participating in the research projects must make in-kind contributions at least equal to the contribution of the Commission and the Member States.

5.

The Joint Undertaking was granted its financial autonomy on 26 July 2010.

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.

7.

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) of the ENIAC Joint Undertaking, which comprise the ‘financial statements’ (5) and the ‘reports on the implementation of the budget’ (6) for the financial year ended 31 December 2011 and the legality and regularity of the transactions underlying those accounts.

8.

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).

9.

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). The Director is responsible for putting in place (9) the organisational structure and the internal management and control systems and procedures relevant for drawing up final accounts (10) 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.

10.

The Court’s responsibility is to provide, on the basis of its audit, a statement of assurance as to the reliability of the Joint Undertaking’s annual accounts and the legality and regularity of the transactions underlying them.

11.

The Court conducted its audit in accordance with the IFAC and ISSAI (11) International Auditing Standards and Codes of Ethics. Those standards require the Court to comply with ethical and professional requirements and to plan and perform the audit so as to obtain reasonable assurance as to whether the accounts are free from material misstatement and whether the underlying transactions are legal and regular.

12.

The Court’s audit involves performing procedures to obtain audit evidence of the amounts and disclosures in the accounts and of the legality and 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.

13.

The Court considers that the audit evidence obtained is sufficient and appropriate to provide a basis for the opinions set out below.

14.

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 2011 and the results of its operations and its cash flows for the year then ended, in accordance with the provisions of its financial rules.

15.

The ex post audit strategy (12) of the Joint Undertaking was adopted by a Governing Board decision on 18 November 2010 and is a key control (13) for assessing the legality and regularity of the underlying transactions. The payments made in 2011 relating to certificates of acceptance of costs issued by the National Funding Authorities (NFAs) of the Member States amounted to 6,8 million euro, which represents 45 % of the total operational payments. The implementation of the ex post audit strategy started in 2011.

16.

The audit of project cost claims has been delegated to the NFAs of the Member States. The administrative agreements signed with the NFAs do not include the practical arrangements for the ex post audits. By the end of the audit (September 2012), the Joint Undertaking had not received sufficient information relating to the audit strategies of the NFAs (14) and was not in a position to assess whether the ex post audit strategy provides sufficient assurance with respect to the legality and regularity of the underlying transactions (15). Furthermore, no ex post audits had been carried out by the NFAs on the grants paid up to the end of 2011.

17.

The information available on the implementation of the Joint Undertaking’s ex post audit strategy is not sufficient to conclude whether this key control is functioning effectively.

18.

In the Court’s opinion, except for the possible effects of the matter described in the basis for a qualified opinion in paragraphs 15 to 17, the transactions underlying the annual accounts of the Joint Undertaking for the financial year ended 31 December 2011 are, in all material respects, legal and regular.

19.

The comments which follow in paragraphs 20 to 33 do not call the Court’s opinions into question.

20.

The 2011 final budget included commitment and payment appropriations amounting to 66 million euro and 35 million euro respectively. The utilisation rates for the available commitment and payment appropriations were 97 % and 48 % (16) respectively. Out of the 63,6 million euro commitment appropriations available for operational activities, 20,1 million euro were implemented as a global commitment for the first 2011 call for proposals and 42,2 million euro were implemented as a global commitment for the second 2011 call for proposals.

21.

A lack of adequate procedures and control weaknesses were detected in the decommitment of unused appropriations. Appropriations which should have been implemented by the end of 2010 and appropriations which should have been implemented by the end of 2011 were decommitted in January 2012. The unused global commitment of 2,8 million euro on the operational activities budget line for 2010 with a final date of implementation of 31 December 2011 was not decommitted.

22.

The calls for proposals organised in 2008, 2009 and 2010 resulted in signed grant agreements totalling 107,9 million euro, which represent 25 % of the maximum EU contribution to the Joint Undertaking for research activities (17). In 2011, two calls for proposals were launched amounting to 62,3 million euro, but the signature of the grant agreements was ongoing. In 2012, two more calls for proposals were launched amounting to 84,5 million euro. During 2013, calls for proposals with a budget of 185,3 million euro (42 %) would have to be launched in order to fully use the available EU contribution of 440 million euro.

23.

The Joint Undertaking has not yet fully implemented effective and efficient internal controls and financial information systems. This resulted in significant errors and delays in the financial reporting that were corrected before the adoption of the final accounts.

24.

The Accounting Officer of the Joint Undertaking validated the financial and accounting systems (ABAC and SAP) on 20 December 2010. However, the underlying business processes which provide financial information, in particular the one providing financial information on the validation and payment of the cost claims received from the NFAs, were not validated during 2011.

25.

Article 6(2) of the Council Regulation setting up ENIAC stipulates that the Joint Undertaking shall have an internal audit capability. However, at the end of 2011, this important element of the internal control system had not yet been set up.

26.

In 2011, the Commission’s Internal Audit Service carried out a risk assessment exercise. Based on the results of the risk assessment, the strategic audit plan for 2012-2014 was presented to the Governing Board for adoption on 22 November 2011.

27.

The mission charter of the Commission’s Internal Audit Service was adopted by the Governing Board on 18 November 2010. However, the financial rules of the Joint Undertaking have not yet been amended to include the provision of the Framework Regulation (18) referring to the powers of the Commission’s internal auditor.

28.

The statutes of the ENIAC Joint Undertaking stipulate that the financial contributions from ENIAC Member States are to amount in total to at least 1,8 times (19) the EU’s financial contribution, while the Joint Undertaking’s grants can reach a maximum of 16,7 % of the total eligible costs of the projects. For the first five calls for proposals, the financial contribution from ENIAC Member States amounted to 1,55 times the EU’s financial contribution.

29.

Contrary to the Statutes of ENIAC Joint Undertaking (20), Greece is using EU structural funds to cover its national contributions to the Greek beneficiaries of the ENIAC projects (21) instead of providing national funding. The Joint Undertaking accepted the continuation of the Greek participation in ENIAC projects but no funding is being provided by the Joint Undertaking to the Greek beneficiaries, as co-financing with another source of EU funding is not allowed (22).

30.

According to Articles 19(4) of the Statutes of the Joint Undertaking and Article 40 of its Financial Rules, the Executive Director is required to draw up an annual activity report. The annual activity report shall indicate the results of the operations by reference to the objectives set, the risks associated with these operations, the use made of the resources provided and the efficiency and effectiveness of the internal control system. It shall also confirm that the information contained in the report presents a true and fair view except as otherwise specified in any reservations related to defined areas of revenue and expenditure.

31.

The annual activity report does not include an assessment of the efficiency and effectiveness of the internal control system. The annual activity report includes the following weaknesses:

32.

During 2011 the Joint Undertaking set up a Business Continuity Plan and made progress on the formalisation of the IT security policies. Further work is required to finalise the Disaster Recovery Plan.

33.

The Host State Agreement (23) between the Joint Undertaking and the Belgian authorities concerning office accommodation, privileges and immunities and other support to be provided was signed on 2 February 2012.