- For the Horizon2020 programme, contributions from private partners were not always at the agreed level
- Some Joint Undertakings accumulated unused EU funding due to delays in project implementation
- Errors in declaring personnel or equipment costs persist
The European Court of Auditors (ECA) has given the green light to the 2023 accounts of the EU’s Joint Undertakings (JUs) – the EU’s public-private partnerships for research and innovation. However, the auditors point to some areas requiring extra care, such as securing contributions from private partners up to the agreed levels.
Joint Undertakings are partnerships between the European Commission, industry and research, and – in some cases – intergovernmental organisations and participating states. The JUs financed by funds from the EU’s research and innovation programmes (the Horizon 2020, Horizon Europe, and Digital Europe programmes, a total of €17 billion of EU funding) are expected to raise additional contributions (in-kind and other financial contributions) of €21.1 billion from partners to implement research and innovation projects valued at around €38.1 billion.
“We have approved the accounts of the EU’s Joint Undertakings for another year, confirming a positive trend”, said Ildikó Gáll-Pelcz, the ECA Member responsible for the annual audit. “As Joint Undertakings contribute to Europe’s competitiveness, further efforts will enhance their value for money.”
As in previous years, the auditors highlighted significant risks to Fusion for Energy (F4E), the Joint Undertaking responsible for Europe’s contribution to the International Thermonuclear Experimental Reactor (ITER) megaproject. F4E is financed by Euratom and participating member states, and is supposed to substantially update the ITER project milestones, given the significant technical changes and cost increases so far. According to the auditors, revising the milestones will have a considerable impact on cost estimatesfor completing delivery obligations for the ITER project, which F4Eestimated – on the basis ofpast milestones –to be €21.2 billion.The auditors also warn that F4E’s high degree of reliance on external service providers entails significant risks in the long run (i.e. poor knowledge retention and reduced workforce efficiency).
The auditors also note that both Circular Bio-Based Europe (CBE) and European High-Performance Computing (EuroHPC) failed to achieve their targets for private-member in-kind contributions to Horizon 2020 projects. For EuroHPC in particular, the auditors point to a significant risk of it not attaining its private-member contribution targets within the Horizon and Digital Europe programmes, and recommend that they be reassessed. In addition, Clean Aviation (CA), Chips, and EuroHPC had requested additional EU financial contributions that were significantly above their cash needs. This practice not only steers EU financial resources away from other EU activities, but also indicates poor cash management, note the auditors.
The audit of a sample of Horizon 2020 grant payments again revealed systemic errors in the declaration of personnel and equipment costs. The main errors were incorrectly calculated hourly rates and incorrect declarations (such as including hours worked outside the reporting period or project, declaring ineligible bonuses or equipment costs, and declaring deductible value-added tax).
Smart Networks and Services and Global Health EDCTP3 achieved financial autonomy in the last quarter of 2023, and were audited by the ECA for the first time this year. Both faced challenges in presenting their first annual accounts (e.g. separate disclosure of financial resources managed by the European Commission and those managed by the JU).
Background information
A full list of the Joint Undertakings, together with individual audit findings, can be found in the annual report on theECA website. In 2023, the JUs operating under the EU research and innovation programmes shared a total payment budget of €3.3 billion (2022: €2 billion) and employed 299 staff (2022: 257 staff). F4E’s total payment budget was €0.6 billion (2022: €0.8 billion) and employed 426 staff (2022: 436).
Read the report