10.1.2013   

EN

Official Journal of the European Union

C 6/56

1.

The Fuel Cells and Hydrogen Joint Undertaking (FCH Joint Undertaking) located in Brussels, was set up in May 2008 (1) for the period up to 31 December 2017.

2.

The objectives of the FCH Joint Undertaking include supporting research, technological development and demonstration activities in the Member States and countries associated with the Seventh Framework Programme (2) in a coordinated manner, together with industry and research organisations, in order to focus on developing market applications and hence facilitating additional industrial efforts towards a rapid deployment of fuel cells and hydrogen technologies (3).

3.

The Members of the Joint Undertaking are the European Union, represented by the Commission, the New Energy World Industry Grouping (NEW-IG) and the Research community (N.ERGHY).

4.

The maximum EU contribution to the FCH Joint Undertaking to cover running costs and research activities is 470 million euro financed from the budget of the Seventh Framework Programme, of which the proportion earmarked for running costs must not exceed 20 million euro. New-IG should contribute 50 % of the running costs and N.ERGHY should contribute 1/12 of the running costs and should contribute to operational costs through in-kind (4) contributions at least equal to the financial contribution of the Union.

5.

The Joint Undertaking was granted its financial autonomy on 15 November 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 (5) of the Fuel Cells and Hydrogen Joint Undertaking, which comprise the ‘financial statements’ (6) and the ‘reports on the implementation of the budget’ (7) 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 (8).

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 (9). The Director is responsible for putting in place (10) the organisational structure and the internal management and control systems and procedures relevant for drawing up final accounts (11) 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 (12) 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.

An ex-post audit strategy was adopted by the Governing Board in January 2011 and is a key control for assessing the legality and regularity of the underlying transactions (13). Only eight of twelve ex-post audits were completed as of September 2012 covering 4,8 million euro (27 % of all cost claims received by the FCH Joint Undertaking in 2011). Six of the audits did not present material errors but the other two detected significant errors (14), the larger of which (764 000 euro) has been corrected in the following year.

16.

In the Court’s opinion, except for the effects of the matters described in paragraph 15, the transactions underlying the annual accounts of the Joint Undertaking for the year ended 31 December 2011 are, in all material respects, legal and regular.

17.

The comments which follow in paragraphs 18 to 27 do not call the Court’s opinions into question.

18.

The 2011 final budget included commitment and payment appropriations amounting to 117 million euro and 60 million euro respectively. The utilisation rates for the available commitment and payment appropriations were 99,8 % and 87,9 % respectively. An amount of 112 million euro representing commitment appropriations available for operational activities (Title III of the budget) was implemented through a global commitment relating to the 2011 call for proposals.

19.

The budgetary procedure outlined in the FCH Joint Undertaking’s financial rules (15) was not followed; the derogation granted by the Commission to enter cancelled appropriations in the estimates of revenue and expenses for the following three years was misinterpreted. The Joint Undertaking chose to use payment appropriations amounting to 3,3 million euro (16) (representing payment appropriations carried over from 2010 to 2011) even though 6,3 million euro in payment appropriations authorised for the current financial year were still available (17). As a consequence of the FCH Joint Undertaking’s interpretation of the budgetary procedure, the budgetary outturn of the year is incorrect, as 6,3 million euro (18) in payment appropriations carried over from 2011 to 2012 were not included in the calculation. Furthermore, the budgetary outturn account for 2010 does not reflect the 3,3 million euro in payment appropriations carried over from 2010 to 2011.

20.

Unused global commitments from 2010 amounting to 10,4 million euro and with a final date of implementation at 31 December 2011, were not decommitted by the end of 2011 but were decommited in January 2012.

21.

The calls for proposals organised in 2008, 2009 and 2010 resulted in signed grant agreements totalling 183,4 million euro (19), and in 2011 a fourth call for proposals was launched amounting to 111,6 million euro, which represents 41 % and 25 % respectively of the maximum EU contribution to the Joint Undertaking for research activities (20). The evaluation of the call was finalised in 2011 and the selected projects are currently in the negociation process. In January 2012 a fifth call for proposals was launched amounting to 79 million euro, a further 18 % of the maximum EU contribution. This shows satisfactory progress in budget implementation.

22.

At the end of 2011, the underlying business processes had been validated by the Accounting Officer (21) as required by the Joint Undertaking’s financial rules. In her report a number of weaknesses (22) were identified and will be followed up by the Accounting Officer in 2012.

23.

The method for evaluating the level of the in-kind contribution (23) has been finalised (24) and was jointly assessed by the Internal Audit Service (IAS) and the Internal Audit Capability (IAC) in April 2012 (25). The aggregated level of in-kind contributions validated by the Authorising Officer as at 8 February 2012 (the cut-off date used for the preparation of the 2011 Provisional Accounts) was 347,6 million euro. The assessment report concluded that this amount should be reduced by 0,93 million euro (26) euro (or 0,3 %).

24.

At the end of December 2011 the balance on the FCH Joint Undertaking’s bank account was 9,2 million euro (27). Between the months of August 2011 and December 2011 the FCH JU’s cash balance ranged between approximately 30 million euro and 60 million euro. The Joint Undertaking is expected to implement all the measures necessary to minimise the cash balances held on account to the levels that are required.

25.

During 2011, the Joint Undertaking set up a Business Continuity Plan and made progress on the formalisation of the IT security policies. The Business Continuity plan including a disaster recovery plan was adopted by the FCH JU on 12 June 2012.

26.

The financial rules of the Joint Undertaking have not yet been amended to include the provision referring to the powers of the Commission’s Internal Auditor (28).

27.

The Host State Agreement (29) between the Joint Undertaking and the Belgian authorities concerning office accommodation, privileges and immunities and other support to be provided was signed on 3 February 2012.