On Tuesday 14 November, the European Court of Auditors (ECA) published an audit report on European Joint Undertakings (JUs), European public-private partnerships with legal person status funded under the European framework programmes for research and innovation (Horizon Europe for the 2021-2027 period and Horizon 2020 for the 2014-2020 period) and Digital Europe. The Court provides an unqualified audit opinion on the reliability of the accounts of nine JUs examined this year and on the legal and regulatory compliance of the transactions underlying the accounts belonging to the nine JUs. However, the ECA provides observations to remedy certain weaknesses related to the implementation of the JUs’ research and innovation programmes.
First of all, the ECA has noted that several JUs are still involved in numerous projects approved under programmes linked to previous multiannual financial frameworks (MFFs), the European long-term budgetary framework. For example, the Innovative Health Initiative (IHI) has yet to implement payments from the “FP7” framework programme, under the multiannual financial framework covering the 2007-2013 period, for projects that have not yet been completed. The ECA warns that more and more joint undertaking employees are simultaneously managing projects funded under several MFFs. According to the ECA, this could affect the effectiveness of the JUs’ internal controls, their management of funding and delay the implementation of new programmes.
The auditors also note that two JUs - Circular Bio-Based Europe and EuroHPC – will not have achieved their targets for individual contributions by the end of the Horizon 2020 programme implementation period.
Furthermore, the Court points out that the JUs did not provide sufficient legal information on the contributions made by JU members at the end of the financial year.
In addition, the rate of implementation of the operational budget (the payment of subsidies to beneficiaries) of the JUs for 2022 was lower than in previous years, due in particular to the consequences of the Covid-19 crisis and Russian aggression against Ukraine.
In its audit of subsidy payments, the ECA noted the risk of errors, particularly for small and medium-sized enterprises and new beneficiaries. They mainly concern the calculation of staffing costs (the Court acknowledges that the complexity of this calculation has increased with Horizon 2020) and equipment costs.
Finally, the ECA notes that half of the JUs did not have a structured risk-based approach for ex-ante controls of Horizon 2020 grants. Most JUs have also not yet developed a risk-based ex-post audit approach for Horizon 2020 grant payments.
Finally, the JUs seem to show a number of weaknesses in the use of the enhanced monitoring tool, a tool designed to help grant managers assess the risks of projects or beneficiaries.
Link to the report: https://aeur.eu/f/9k0 (Original version in French by Émilie Vanderhulst)