Sittings · Document

DRAFT REPORT (2023/2173(DEC)) 2023-12-14

On discharge in respect of the implementation of the budget of the Clean Aviation Joint Undertaking for the financial year 2022

Committee on Budgetary Control · Rapporteur: Michal Wiezik

PR_DEC_JointUndertakings

1. PROPOSAL FOR A EUROPEAN PARLIAMENT DECISION

on discharge in respect of the implementation of the budget of the Clean Aviation Joint Undertaking for the financial year 2022

(2023/2173(DEC))

– having regard to the final annual accounts of the Clean Aviation Joint Undertaking for the financial year 2022,

– having regard to the Court of Auditors’ annual report on the EU Joint Undertakings for the financial year 2022, together with the Joint Undertakings’ replies,

– having regard to the statement of assurance as to the reliability of the accounts and the legality and regularity of the underlying transactions provided by the Court of Auditors for the financial year 2022, pursuant to Article 287 of the Treaty on the Functioning of the European Union,

– having regard to the Council’s recommendation of February 2024 on discharge to be given to the Joint Undertaking in respect of the implementation of the budget for the financial year 2022 (00000/2024 – C90000/2024),

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

– having regard to Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial rules applicable to the general budget of the Union, amending Regulations (EU) No 1296/2013, (EU) No 1301/2013, (EU) No 1303/2013, (EU) No 1304/2013, (EU) No 1309/2013, (EU) No 1316/2013, (EU) No 223/2014, (EU) No 283/2014, and Decision No 541/2014/EU and repealing Regulation (EU, Euratom) No 966/2012, and in particular Article 71 thereof,

– having regard to Council Regulation (EU) 2021/2085 of 19 November 2021 establishing the Joint Undertakings under Horizon Europe and repealing Regulations (EC) No 219/2007, (EU) No 557/2014, (EU) No 558/2014, (EU) No 559/2014, (EU) No 560/2014, (EU) No 561/2014 and (EU) No 642/2014, and in particular Article 26 thereof,

– having regard to Commission Delegated Regulation (EU) 2019/887 of 13 March 2019 on the model financial regulation for public-private partnership bodies referred to in Article 71 of Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council,

– having regard to Rule 100 of and Annex V to its Rules of Procedure,

– having regard to the opinions of the Committee on Transport and Tourism and the Committee on Industry, Research and Energy,

– having regard to the report of the Committee on Budgetary Control (A90000/2024),

1. Grants the Executive Director of the Clean Aviation Joint Undertaking discharge in respect of the implementation of the Joint Undertaking’s budget for the financial year 2022 / Postpones its decision on granting the Executive Director of the Clean Aviation Joint Undertaking discharge in respect of the implementation of the Joint Undertaking’s budget for the financial year 2022;

2. Sets out its observations in the resolution below;

3. Instructs its President to forward this decision and the resolution forming an integral part of it to the Executive Director of the Clean Aviation Joint Undertaking, the Council, the Commission and the Court of Auditors, and to arrange for their publication in the Official Journal of the European Union (L series).

2. PROPOSAL FOR A EUROPEAN PARLIAMENT DECISION

on the closure of the accounts of the Clean Aviation Joint Undertaking for the financial year 2022

(2023/2173(DEC))

– having regard to the final annual accounts of the Clean Aviation Joint Undertaking for the financial year 2022,

– having regard to the Court of Auditors’ annual report on the EU Joint Undertakings for the financial year 2022, together with the Joint Undertakings’ replies,

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

– having regard to Rule 100 of and Annex V to its Rules of Procedure,

– having regard to the opinions of the Committee on Transport and Tourism and the Committee on Industry, Research and Energy,

– having regard to the report of the Committee on Budgetary Control (A90000/2024),

1. Approves the closure of the accounts of the Clean Aviation Joint Undertaking for the financial year 2022 / Postpones the closure of the accounts of the Clean Aviation Joint Undertaking for the financial year 2022;

2. Instructs its President to forward this decision to the Executive Director of the Clean Aviation Joint Undertaking, the Council, the Commission and the Court of Auditors, and to arrange for its publication in the Official Journal of the European Union (L series).

3. MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION

with observations forming an integral part of the decision on discharge in respect of the implementation of the budget of the Clean Aviation Joint Undertaking for the financial year 2022

(2023/2173(DEC))

– having regard to its decision on discharge in respect of the implementation of the budget of the Clean Aviation Joint Undertaking for the financial year 2022,

– having regard to Rule 100 of and Annex V to its Rules of Procedure,

– having regard to the opinions of the Committee on Transport and Tourism and the Committee on Industry, Research and Energy,

– having regard to the report of the Committee on Budgetary Control (A90000/2024),

A. whereas the Clean Aviation (CA) JU, located in Brussels, was set up in November 2021 under the Horizon Europe programme for the period ending on 31 December 2031; whereas the CA JU replaced and succeeded the Joint Undertaking for the implementation of the Joint Technology Initiative in Aeronautics, that was set up in December 2007 under the Seventh Research Framework Programme (FP7) for a period of ten years (Clean Sky 1) and extended in May 2014 under the Horizon 2020 programme for a period until 31 December 2024 (Clean Sky 2);

B. whereas the CA JU is a public-private partnership focusing on research and innovation for transforming aviation towards a sustainable and climate neutral future; whereas its founding members are the EU, represented by the Commission, and the organisations from the aviation sector listed in the Annex I of the Single Basic Act; whereas, in addition, CA JU has associated members selected by calls for expression of interest;

C. whereas, to increase transparency, the Joint Undertaking should disclose in its annual accounts, relevant information regarding members’ contributions at programme level; whereas, for each programme under which they operate, the Joint Undertaking should present per member category up to the year-end, all relevant information including the legal contribution targets set for the respective programme, the volume of contributions received, and the volume of legal commitments;

Budgetary and financial management

1. Notes from the report of the Courts of Auditors (the ‘Court’s report’) that the annual accounts of the Joint Undertaking for the financial year ended on 31 December 2022 present fairly, in all material respects, the financial position of the Joint Undertaking at 31 December 2022, the results of its operations, its cash flows, and the changes in net assets for the year then ended, in accordance with its Financial Regulation and with the accounting rules adopted by the Commission’s accounting officer; notes that the underlying transactions to the accounts are legal and regular in all material respects;

2. Notes that the Joint Undertaking’s final available budget for 2022 (including re-entered unused appropriations of previous years, assigned revenues, and reallocations to the next year) comprised commitment appropriations of EUR 411.2 million (EUR 182.6 million in 2021) and payment appropriations of EUR 415.3 million (EUR 189.9 million in 2021);

3. Notes that the changes in the size of the JU’s budget largely depend on the implementation phase of the multiannual research and innovation programmes; notes that, in 2022, the JU started with the implementation of the Horizon Europe programme, therefore, the 2022 budget includes the commitment budget for the first Horizon Europe calls planned for 2022, and the payment budget for the related pre-financing payments;

4. Notes that in its 2022 annual accounts, the amounts of contributions recognised per member category (EU and private members) differ significantly from each other; notes that this is because EU cash contributions are validated and recognised when paid to the JU at the beginning of the project implementation, but members’ in-kind contributions are only recognised after validation of the costs incurred and declared for project implementation; notes that the Court considers that the gap between the recognised amount of cash contributions on the one hand and in-kind contributions on the other hand, was addressed in a suboptimal way in the JU’s 2022 annual accounts by not providing information on the JU members’ legal commitments at year end;

5. Notes, regarding the Horizon 2020 programme, that, at the end of 2022, the JU had fully committed EUR 1 716 million of the maximum EU operational contribution for signed grant agreements under the programme and that of this committed amount, around EUR 70.1 million (or 4.1 %) remains to be paid in the coming years for projects yet to be completed; notes, as well, that the private members had legally committed to provide in-kind contributions to the JU’s operational activities of EUR 968.3 million, and in-kind contributions to additional activities of EUR 1 223.1 million or 101.6 % of the minimum target of EUR 2 154.9 million; notes, furthermore, that these committed amounts were fully reported at the end of 2022;

6. Notes that, for Horizon 2020 activities, the JU received no new operational commitment appropriations, as the JU had finished its last call for proposals by the end of 2020; notes that the implementation rate for the operational payment appropriations was 78 % (2021: 83 %);

7. Notes that for a considerable number of ongoing Horizon 2020 projects, the technical activities were delayed or reduced due to COVID-19 and the war of aggression against Ukraine, and that, therefore, these projects had to be amended or prolonged and final payments postponed to 2023;

8. Notes, as regards Horizon Europe, that, in 2022, the Commission made cash contributions of EUR 178 million and that the JU almost fully used the operational contribution of EUR 176 million for pre-financing payments related to the first grant agreements concluded under that programme;

9. Notes that, at the end of 2022, the implementation rate for the JU’s administrative payment budget (Title 2) was low at 54 %; notes that, according to the JU’s report on budgetary and financial management, this was mainly due to IT and communication services provided during the last quarter of 2022 and to be paid in 2023, and reduced costs for the services provided by the Commission;

Procurement and staff

10. Notes, from the CA JU 2022 Consolidated Annual Activity Report, that in 2022, the CA JU published two open tender procedures of which the first one was launched to cover its own needs and the second one was launched on behalf of six Joint Undertakings as an inter-institutional call for tenders (Managed IT Services); note in addition, that, at the beginning of 2022, the CAJU awarded and signed eleven inter-institutional framework service contracts in communication being a result of the inter-institutional open tender procedure launched on behalf of three Joint Undertakings in 2021;

11. Notes that the JU establishment plan for 2022 contained a total of 44 statutory staff (TA, CA and SNE) with 40 posts filled at the end of the 2022; notes that the two SNEs posts were not filled in because the establishment plan for 2023 foresees only 41 posts and no SNEs;

Management and control systems

12. Notes that, for Horizon 2020 and Horizon Europe expenditure, the Common Audit Service of the Commission’s DG RTD performed the ex-post audits; notes that for Horizon 2020 expenditure (clearings and final payments), the JU reported a representative error rate of 1.6 % and a residual error rate of 0.4 % and that for the Horizon Europe programme, ex-post audits have yet to be carried out, as the first interim payments are only expected in 2024;

13. Notes that to assess the operational payment controls of the JU, the Court audited randomly sampled Horizon 2020 payments made in 2022, at the level of the final beneficiaries: notes that, for one case, the Court found and quantified a serious error resulting from over claimed personnel cost because the beneficiary submitted a cost declaration based on budgeted staff costs;

14. Notes that, at the end of 2022, the Joint Undertaking had developed and implemented a complete risk-based approach to ex-ante controls in line with the CIC guidance, considering the JU-specific risk circumstances; notes, to this end, that the JU identified the most relevant risk criteria and designed, based on them, a risk-based monitoring approach; notes that such an approach allowed the JU to assess the risk level of each project and beneficiary during the main phases of project implementation, such as grant agreement preparation, grant agreement amendment, reporting, and payment; notes, in this regard, that the JU also drew up internal guidelines on their risk-based approach and trained and guided its staff on applying it properly and consistently;

15. Notes that the Court’s detailed analysis of a sample of the JU’s reinforced monitoring cases revealed several weaknesses, which prevented their effective and efficient monitoring; notes that upon expiry of the defined due date, the reinforced monitoring flag was neither renewed nor closed and that the risk level was not reassessed by the officer after the implementation of the control actions;

16. Agrees with the Court that the Joint Undertaking should ensure that all reinforced monitoring actions are accompanied by specific control actions targeting the identified risks, and that they are followed-up at a pre-defined deadline;

17. Stresses, as does the Court, the importance for the JU to implement their specific risk-based approach to grant management has increased under Horizon Europe;

18. Underlines that the beneficiary and/or project structure of the Joint Undertaking is changing significantly under the Horizon Europe programme, such as the increased number of SMEs, newcomers and larger consortia, as well as the requirement to only use open call procedures for Horizon Europe activities and that, as a result, the risk factors identified in previous programmes may no longer be relevant and new risk factors may emerge;

Follow-up of previous years’ observations

19. Notes that “observations” in the Joint Undertakings specific annual reports are in fact “not timed recommendations” by the Court; notes that ECA annually follows-up on those observations by assessing their status as “open” or “closed”;

20. Notes that out of the three Court’s observations (one in 2020 and two on 2022), two are closed: notes that the open observation refers to the use of interim staff, which the Joint Undertaking justifies with the limitations of the fixed staff establishment plan and the workload caused by the parallel implementation of the Horizon 2020 and Horizon Europe programmes.