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Document 52014TA1216(02)
Report on the annual accounts of the ARTEMIS Joint Undertaking for the financial year 2013, together with the Joint Undertaking’s replies
Report on the annual accounts of the ARTEMIS Joint Undertaking for the financial year 2013, together with the Joint Undertaking’s replies
Report on the annual accounts of the ARTEMIS Joint Undertaking for the financial year 2013, together with the Joint Undertaking’s replies
IO C 452, 16.12.2014, p. 8–16
(BG, ES, CS, DA, DE, ET, EL, EN, FR, HR, IT, LV, LT, HU, MT, NL, PL, PT, RO, SK, SL, FI, SV)
16.12.2014 |
EN |
Official Journal of the European Union |
C 452/8 |
REPORT
on the annual accounts of the ARTEMIS Joint Undertaking for the financial year 2013, together with the Joint Undertaking’s replies
(2014/C 452/02)
CONTENTS
|
Paragraph |
Page |
Introduction |
1-5 |
9 |
Information in support of the statement of assurance |
6 |
9 |
Statement of assurance |
7-18 |
9 |
Opinion on the reliability of the accounts |
12 |
10 |
Basis for a qualified opinion on the legality and regularity of the transactions underlying the accounts |
13-16 |
11 |
Qualified opinion on the legality and regularity of the transactions underlying the accounts |
17 |
11 |
Comments on budgetary and financial management |
19-22 |
11 |
Implementation of the budget |
19-21 |
11 |
Calls for proposals |
22 |
12 |
Other matters |
23-33 |
12 |
Legal framework |
23 |
12 |
Internal audit function and the Commission’s Internal Audit Service |
24-27 |
12 |
Monitoring and reporting of research results |
28 |
12 |
Conflicts of interest |
29-30 |
13 |
The Commission’s Second Interim Evaluation |
31-32 |
13 |
Follow-up of previous observations |
33 |
13 |
INTRODUCTION
1. |
The ARTEMIS Joint Undertaking, located in Brussels, was set up in December 2007 (1) for a period of ten years and has worked autonomously since 2009. |
2. |
The main objective of the Joint Undertaking is to define and implement a ‘research agenda’ for the development of key technologies for embedded computing systems 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 ARTEMIS Joint Undertaking were the European Union, represented by the Commission, certain EU Member States (Belgium, Denmark, Germany, Estonia, Ireland, Greece, Spain, France, Italy, Hungary, the Netherlands, Austria, Portugal, Romania, Slovenia, Finland, Sweden and the United Kingdom) and ARTEMIS-IA, an association representing companies and other research organisations active in the field of embedded computing systems in Europe. In 2009, the Czech Republic, Cyprus, Latvia and Norway also became members of the Joint Undertaking, and Poland followed suit in 2012. |
4. |
The maximum EU contribution to the Joint Undertaking, to cover running costs and research activities, is 420 million euro to be paid from the budget of the Seventh Framework Programme (3). In addition, ARTEMIS-IA is to make a maximum contribution of 30 million euro to the running costs, while the ARTEMIS Member States are to make in-kind contributions to the running costs (by facilitating the implementation of projects) and provide financial contributions of at least 1,8 times the EU contribution. In-kind contributions are also to be provided by the research organisations participating in projects. |
5. |
The ARTEMIS and ENIAC Joint Undertakings (4) were merged to create the Electronic Components and Systems for European Leadership Joint Technology Initiative (ECSEL JTI) (5). In addition to combining the ARTEMIS initiative on embedded systems and the ENIAC initiative on nano-electronics, ECSEL JTI will incorporate research and innovation on smart systems. ECSEL JTI started in June 2014 and will run for 10 years. Nevertheless, this report has been produced on a going-concern principle. |
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
The management’s responsibility
The auditor’s responsibility
Opinion on the reliability of the accounts
Basis for a qualified opinion on the legality and regularity of the transactions underlying the accounts
Qualified opinion on the legality and regularity of the transactions underlying the accounts
|
18. |
The comments which follow do not call the Court’s opinions into question. |
COMMENTS ON BUDGETARY AND FINANCIAL MANAGEMENT
Implementation of the budget
19. |
The initial 2013 budget included commitment appropriations amounting to 68,9 million euro. At the end of the year the Governing Board adopted an amending budget reducing commitment appropriations to 32,6 million euro. While the utilisation rate for operational commitment appropriations was 99,4 % (after the reduction), the rate for payment appropriations was only 69 %. |
20. |
The programme manager’s budget implementation estimates for the end of 2013 and the actual payments under the different calls were as follows (in percentage):
|
21. |
The low budget implementation rate is mainly due to the lengthy and complex process for the financial closure of projects. |
Calls for proposals
22. |
The Council Regulation setting up the Joint Undertaking envisaged a maximum total budget of 410 million euro to cover operational expenditure. The current amount of appropriations committed for the calls for proposals accounts for 201 million euro, or 49 % of the total budget. |
OTHER MATTERS
Legal framework
23. |
The new Financial Regulation applicable to the general budget of the Union (14) was adopted on 25 October 2012 and took effect on 1 January 2013 (15). However the model financial regulation for public-private partnership bodies referred to in Article 209 of the new Financial Regulation did not enter into force until 8 February 2014 (16). Because of the merger into ECSEL Joint Undertaking, the financial rules of the Joint Undertaking have not been amended to reflect these changes. |
Internal audit function and the Commission’s Internal Audit Service
24. |
Article 6.2 of the Council Regulation setting up the ARTEMIS Joint Undertaking stipulates that the Joint Undertaking shall have an internal audit capability. However, as at the end of 2013, this had not been set up. |
25. |
The mission charter of the Commission’s Internal Audit Service (IAS) was adopted by the Governing Board on 25 November 2010. However, the financial rules of the Joint Undertaking have not been amended to include the provision of the Framework Regulation referring to the powers of the Commission’s Internal Auditor. |
26. |
In 2013, the IAS audited the adequacy and effectiveness of ARTEMIS’ internal control system with regard to the management of experts. The audit concluded that the current internal control system provides reasonable assurance regarding the achievement of the business objectives set up by ARTEMIS for the management of experts. It also made several important recommendations regarding the adoption of a comprehensive confidentiality policy, the sensitivity of the programme officer's post and the rules for allocation of workload for the remote evaluators. |
27. |
The ARTEMIS, Clean Sky, ENIAC, FCH and IMI Joint Undertakings, were the subject of an IT risk assessment by the IAS of their shared IT infrastructures (17). |
Monitoring and reporting of research results
28. |
The Seventh Framework Programme (FP7) Decision (18) establishes a monitoring and reporting system related to the protection, dissemination and transfer of research results. The Joint Undertaking has developed procedures to monitor the protection and dissemination of research results at different project stages, but this monitoring requires further development to fully meet the provisions of the Decision (19). |
Conflicts of interest
29. |
The Joint Undertaking does not have a comprehensive written procedure to deal with conflicts of interest. |
30. |
There is a need for a clear definition of what should be considered a conflict of interest, a database regularly updated to include all information related to conflicts of interest, a procedure for managing them and a mechanism for dealing with breaches of the policy. |
The Commission’s Second Interim Evaluation (20)
31. |
The Commission’s Second Interim Evaluation, carried out from September 2012 to February 2013, assessed the ARTEMIS and ENIAC Joint Undertakings in terms of relevance, effectiveness, efficiency and research quality. |
32. |
The report was issued in May 2013 and contained several recommendations to the ARTEMIS Joint Undertaking, in particular regarding the efficiency of project reviews, measures to be taken to improve the match of the project portfolio to strategic European aims, and the appropriate metrics for measuring the impact and success of ARTEMIS projects. |
Follow-up of previous observations
33. |
The Disaster Recovery Plan for the Joint Undertakings for the common IT infrastructure has not yet been approved. In the meantime, the ARTEMIS Joint Undertaking has adopted measures at its own level in order to deal with emergency situations. |
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
(1) Council Regulation (EC) No 74/2008 of 20 December 2007 on the establishment of the ARTEMIS Joint Undertaking to implement a Joint Technology Initiative in Embedded Computing Systems (OJ L 30, 4.2.2008, p. 52).
(2) The Annex summarises the Joint Undertaking’s competences and activities. It is presented for information purposes.
(3) The Seventh Framework Programme, adopted by Decision No 1982/2006/EC of the European Parliament and of the Council (OJ L 412, 30.12.2006, p. 1), brings all the research-related EU initiatives together under one roof and plays a crucial role in achieving the goals of growth, competitiveness and employment. It is also a key pillar for the European Research Area.
(4) The ENIAC Joint Undertaking was set up by Council Regulation (EC) No 72/2008 of 20 December 2007 (OJ L 30, 4.2.2008, p. 21) to define and implement a ‘research agenda’ for the development of key competences for nanoelectronics.
(5) The ECSEL Joint Undertaking was set up by Council Regulation (EU) No 561/2014 of 6 May 2014 (OJ L 169, 7.6.2014, p. 152).
(6) These include the balance sheet and the economic outturn account, the cash-flow table, the statement of changes in net assets, a summary of the significant accounting policies and other explanatory notes.
(7) These comprise the reports on implementation of the budget, a summary of budgetary principles and other explanatory notes.
(8) OJ L 357, 31.12.2002, p. 72.
(9) The accounting rules adopted by the Commission’s accounting officer are derived from the International Public Sector Accounting Standards (IPSAS) issued by the International Federation of Accountants or, where relevant, the International Accounting Standards (IAS)/International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board.
(10) Article 185(2) of Council Regulation (EC, Euratom) No 1605/2002 (OJ L 248, 16.9.2002, p. 1).
(11) The general financing agreement between the European Commission and the Joint Undertaking states that ‘the Joint Undertaking, in its competent board, adopts its ex post audit strategy with the aim of providing reasonable assurance on the legality and regularity of the underlying transactions’ and ‘the ex post audit strategy shall be based on examination of procedures and of a sample of transactions for all or a sample of beneficiaries and shall, in particular, adequately reflect the risks involved’.
(12) Article 12 of Regulation (EC) No 74/2008 states that ‘The ARTEMIS Joint Undertaking shall ensure that the financial interests of its members are adequately protected by carrying out or commissioning appropriate internal and external controls’ and ‘The ARTEMIS Joint Undertaking shall carry out on-the-spot checks and financial audits among the recipients of the ARTEMIS Joint Undertaking's public funding. These checks and audits shall be performed either directly by the ARTEMIS Joint Undertaking or by ARTEMIS Member States on its behalf. ARTEMIS Member States may carry out any other checks and audits among the recipients of their national funding as they deem necessary and shall communicate the results to the ARTEMIS Joint Undertaking.’
(13) According to the ex post audit strategy adopted by the ARTEMIS Governing Board, the Joint Undertaking must assess at least once a year whether the information received from the ARTEMIS Member States provides sufficient assurance as to the regularity and legality of the executed transactions.
(14) Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council of 25 October 2012 on the financial rules applicable to the general budget of the Union and repealing Council Regulation (EC, Euratom) No 1605/2002 (OJ L 298, 26.10.2012, p. 1).
(15) Article 214 of Regulation No 966/2012 with the exemptions referred to.
(16) Commission Delegated Regulation (EU) No 110/2014 of 30 September 2013 on the model financial regulation for public-private partnership bodies referred to in Article 209 of Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council (OJ L 38, 7.2.2014, p. 2).
(17) The final report dated 22 November 2013 noted the need to formalise IT security policy and include detailed procedures/controls in future contracts with IT service providers.
(18) Article 7 of Decision No 1982/2006/EC of the European Parliament and the Council of 18 December 2006 concerning the Seventh Framework Programme of the European Community for research, technological development and demonstration activities (2007-2013) states that the Commission shall continually and systematically monitor the implementation of the Seventh Framework Programme and its specific programmes and regularly report and disseminate the results of this monitoring.
(19) See the observation referring to the integration of results achieved in research projects into the Commission communication and dissemination system, included in the 2012 Annual Progress Report from the Commission to the European Parliament and the Council on the activities of the Joint Technology Initiative Joint Undertakings, (SWD (2013) 539 final).
(20) Second Interim Evaluation of the ARTEMIS and ENIAC Joint Technology Initiatives of May 2013.
ANNEX
ARTEMIS Joint Undertaking (Brussels)
Competences and activities
Areas of Union competence deriving from the Treaty (Articles 187and 188 of the Treaty on the Functioning of the European Union) |
Decision No 1982/2006/EC of the European Parliament and of the Council of 18 December 2006 concerning the Seventh Framework Programme provides for a Community contribution to the establishment of long-term public-private partnerships in the form of Joint Technology Initiatives which could be implemented through Joint Undertakings within the meaning of Article 187 of the Treaty. Council Regulation (EC) No 74/2008 of 20 December 2007 on the establishment of the ‘ARTEMIS Joint Undertaking’ to implement a Joint Technology Initiative. |
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Competences of the Joint Undertaking (Council Regulation (EC) No 74/2008) |
Objectives
|
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Governance |
The JU’s governing body is the Governing Board. The executive team is led by an Executive Director, while industry (which includes large and small enterprises, as well as academia and research institutes) is represented by the ARTEMIS Industry Association (ARTEMIS-IA). ARTEMIS-IA provides the chairperson of the Governing Board and the members of the Industry and Research Committee (IRC), which is responsible for the technical work programme. The public sector (participating Member States and the European Commission) are individually represented on the Governing Board and the Public Authorities Board (PAB), which is responsible for financial matters. |
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Resources available to the Joint Undertaking in 2013 |
Budget 3 0 3 43 708 euro for commitments. 3 0 0 00 000 euro for payments (operational). Staff at 31 December 2013 15 posts provided for in the establishment plan (8 temporary staff and 7 contract staff); 13 posts were occupied and assigned as follows: operational activities (8); administrative tasks (5); mixed tasks (0). |
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Activities and services provided in 2013 |
See the Joint Undertaking’s annual activity report for 2013 at http://www.artemis-ju.eu/reference_documents |
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Source: Information supplied by the ARTEMIS Joint Undertaking. |
THE JOINT UNDERTAKING’S REPLIES
14. 15. 16. |
ARTEMIS submits a common action plan with ENIAC to mitigate this qualified opinion:
|
29. 30. |
We thank the Court for raising this point and it will be addressed in the procedures of the ECSEL Joint Undertaking |