1 Bio-based Industries Joint Undertaking (BBI JU) Report on Budgetary and Financial Management 2017 This report is provided in accordance with in accordance with the Statutes of the BBI JU annexed to Council Regulation (EU) No 560/2014 and with [Article 31] of the Financial Rules of the BBI JU.
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
1
Bio-based Industries Joint Undertaking (BBI JU)
Report on Budgetary and Financial Management 2017
This report is provided in accordance with in accordance with the Statutes of the BBI JU annexed to
Council Regulation (EU) No 560/2014 and with [Article 31] of the Financial Rules of the BBI JU.
C2 reactivation of unused appropriations from operational expenditure
4 450 657 328 920 4 450 657 2 774 974
Of which from 2015
1 353 523 328 920 1 353 523 328 920
Of which from 2016
3 097 134 3 097 134
3 The additional operational payment appropriations were deemed to be received without an EFTA contribution 4 The reactivations of the administrative surplus from prior years (both the amounts included in the original budget and the additional amounts in the amended budget) are all shown at the level of “C2 reactivation of unused appropriations from administrative expenditure” for clarity. The allocation to individual titles/chapters is detailed in the statement of expenditure
8
HEADING VOTED BUDGET 15.12.2016 AMENDMENTS/ TRANSFERS DESCRIPTION FINAL BUDGET
SUB-TOTAL REACTIVATIONS
6 150 657 2 028 920 6 996 906 3 103 894
Other administrative revenue
22 560 22 560 22 560 22 560
GRAND TOTAL 92 421 059 76 254 922 868 809 15 796 324 0 93 289 868 92 051 246
II – Statement of expenditure: Title Chapter
HEADING VOTED BUDGET 15/12/2016 AMENDMENTS TRANSFERS FINAL BUDGET
Below is a table showing the list of individual credit transfers (CAs and PAs) by budget item, by
title. The majority of the credit transfers were made to reallocate budget wherever it was needed to
enable new commitments to be made, existing commitments to be boosted and additional payment
appropriations to be made available in the case of unexpected or larger-than-foreseen payment
requirements. All of the credit transfers were between items within a title, with the exception of an
amount of € 152 725 of C2 commitment appropriations transferred from Title 1 to Title 2, mainly to
the communications budget line, to enable substantial payments related to the 2017 Stakeholder
Forum event in early December 2017. The transfer, made from several Title 1 lines, was below the
10% threshold permitted by Article 10 of the BBI JU Financial Regulations.
In view of the reactivated surplus from 2017, there was no risk of exhausting the budget. However
the aim, as of around June 2017, when the reactivated C2 credits became available following a
budgetary amendment, was to attempt to execute all of the C2 payment and commitment
appropriations (which should be used in priority), so that the inevitable year-end surplus, or most
of it, would be in C1.
The exercise was successful overall, with only € 88 251 left in C2 commitment appropriations
(resulting mainly from year-end decommitments of budget deemed unnecessary for 2017) and
10
€ 28 006 left in payment appropriations. These appropriations will be reactivated via a budgetary
amendment in 2018, to be executed in priority.
COMMITMENT APPROPRIATIONS
Budget line Fund source Initial Transfers Amended Credit Available Com
Amount
A-1100 C1 2 544 200 - 157 000 2 387 200
A-1100 C2 - 189 249 1 389 249 1 200 000
A-1110 C1 157 000 157 000
A-1110 C2 84 674 9 266 93 940
A-1120 C2 - 3 330 3 330 0
A-1200 C1 51 200 51 200
A-1200 C2 - 30 053 34 753 4 700
A-1201 C2 - 10 215 10 215 0
A-1300 C1 95 000 95 000
A-1300 C2 - 27 455 64 349 36 894
A-1400 C1 9 092 9 092
A-1400 C2 6 306 6 306
A-1401 C1 87 900 87 900
A-1401 C2 43 644 43 644
A-1402 C1 70 800 70 800
A-1402 C2 - 14 268 49 268 35 000
A-1500 C1 10 000 10 000
A-1500 C2 - 6 473 13 222 6 749
TOTAL TITLE 1 2 868 192 - 152 725 1 579 958 4 295 425
A-2000 C1 307 001 307 001
A-2000 C2 165 389 3 219 168 608
Other revenue C4 22 560 22 560
A-2010 C1 15 000 15 000
11
Budget line Fund source Initial Transfers Amended Credit Available Com
Amount
A-2100 C1 45 100 45 100
A-2100 C2 - 30 494 35 494 5 000
A-2101 C1 178 000 178 000
A-2101 C2 8 708 1 253 9 961
A-2200 C1 14 000 14 000
A-2200 C2 - 11 082 11 082
A-2300 C1 25 000 25 000
A-2300 C2 - 3 661 8 661 5 000
A-2303 C1 17 000 17 000
A-2303 C2
A-2400 C1 9 000 9 000
A-2400 C2 - 3 050 4 550 1 500
A-2500 C1 115 700 - 10 000 105 700
A-2500 C2 - 25 032 37 332 12 300
A-2600 C1 205 000 - 21 000 184 000
A-2600 C2 296 183 59 158 355 342
A-2601 C1 100 000 100 000
A-2601 C2 37 736 27 581 65 316
A-2602 C1 120 000 10 000 130 000
A-2602 C2 - 23 684 23 684 0
A-2603 C1 100 000 6 000 106 000
A-2603 C2
A-2700 C1 100 000 100 000
A-2700 C2 - 64 600 87 360 22 760
A-2800 C1 668 300 668 300
A-2800 C2 - 191 988 219 249 27 260
A-2800 C2 428 175 428 175
A-2900 C1 83 900 83 900
12
Budget line Fund source Initial Transfers Amended Credit Available Com
Amount
A-2900 C2 - 1 700 19 494 17 794
TOTAL TITLE 2 2 088 001 152 725 988 852 3 229 578
B3-000 C1
B3-100 C2
B3-200 C1
B3-200 C2
B3-300 C1 81 314 209 81 314 209
B3-300 C2 4 450 657 4 450 657
TOTAL TITLE 3 81,314,209 0 4,450,657 85 764 866
TOTAL 86 270 402 0 7 019 466 93 289 868
PAYMENT APPROPRIATIONS
Budget line Fund source Initial Transfers Amendments Credit Available Pay
Amount
A-1100 C1 2 544 200 - 157 000 2 387 200
A-1100 C2 67 803 1 431 920 1 499 723
A-1110 C1 157 000 157 000
A-1110 C2 6 778 9 266 16 044
A-1120 C2 - 831 831
A-1200 C1 51 200 51 200
A-1200 C2 1 774 339 2 113
A-1201 C1
A-1201 C2 - 10 215 10 215
A-1300 C1 95 000 95 000
A-1300 C2 - 68 714 89 412 20 698
A-1400 C1 9 092 9 092
A-1400 C2 - 3 144 7 193 4 049
A-1401 C1 87 900 87 900
13
Budget line Fund source Initial Transfers Amended Credit Available Com
Amount
A-1401 C2 34 818 1 786 36 604
A-1402 C1 70 800 70 800
A-1402 C2 - 28 168 39 530 11 361
A-1500 C1 10 000 10 000
A-1500 C2 - 102 102
TOTAL TITLE 1 2 868 192 0 1 590 593 4 458 785
A-2000 C1 307 001 307 001
A-2000 C2 192 432 41 886 234 318
Other revenue C4 22 560 22 560
A-2010 C1
A-2010 C2 8 801 8 801
A-2100 C1 45 100 45 100
A-2100 C2 - 83 115 83 115
A-2101 C1 178 000 178 000
A-2101 C2 19 467 331 19 798
A-2200 C1 14 000 14 000
A-2200 C2 - 66 790 76 863 10 073
A-2300 C1 25 000 25 000
A-2300 C2 59 2 900 2 959
A-2303 C1 17 000 17 000
A-2303 C2 - 7 601 10 500 2 900
A-2400 C1 9 000 9 000
A-2400 C2 - 13 110 13 926 816
A-2500 C1 115 700 115 700
A-2500 C2 - 8 883 61 571 52 688
A-2600 C1 205 000 205 000
A-2600 C2 89 360 121 957 211 317
14
Budget line Fund source Initial Transfers Amended Credit Available Com
Amount
A-2601 C1 100 000 100 000
A-2601 C2 145 344 533 145 878
A-2602 C1 120 000 120 000
A-2602 C2 - 19 375 29 375 10 000
A-2603 C1 100 000 100 000
A-2603 C2
A-2700 C1 100 000 100 000
A-2700 C2 - 64 600 94 000 29 400
A-2800 C1 668 300 668 300
A-2800 C2 - 191 988 647 423 455 435
A-2900 C1 83 900 83 900
A-2900 C2
TOTAL TITLE 2 2 088 001 0 1 206 941 3 294 942
B3-000 C1 69 269 809 -47 946 688 21 323 121
B3-100 C2
B3-200 C1 62 645 478 62 645 478
B3-200 C2 328 920 328 920
B3-300 -14 698 790 14 698 790 0
TOTAL TITLE 3 69 269 809 328 920 14 698 790 84 297 519
TOTAL 74 226 002 328 920 17 496 324 92 051 246
15
2.3 Budget implementation
2.3.1 Budget implementation at a glance
2.3.2 Overall BBI JU implementation Operational expenditure – general comments
One call was launched in 2017. A total amount of € 85 764 866 was budgeted for this call, consisting of the following amounts: € 81 314 209 of voted commitment appropriations as well as € 1 353 523 of unused CAs from 2015 and € 3 097 134 of unused CAs from 2016.
There were 17 proposals retained out of a total of 149 proposals received, with a total requested
funding of € 85 764 866.
Revenue
•100% of EU revenue collected (operations and admininstrative). 100% of BICfunds to administrative costs collected. (Of the EU contribution € 396 000 was notactually received but was transferred to the REA by RTD for the expert-evaluatorsof Call 2017)
Commitments
•100% for operations, 59% for admin (including execution of evaluations costs byREA)
Payments
•99% for operations, 54% for admin (including execution of evaluations costs byREA)
16
Total budget expenditure in figures
Please find below a detail of the budgetary implementation (for both commitment and payment appropriations) for 2017:
The budgetary outturn for a financial year corresponds to the total revenues actually cashed during
the year plus appropriations carried over from previous years minus total payments made during
the year, minus appropriations (both automatic and non-automatic) carried over to the following
year.
Below is the budget result as reflected in the BBI JU's annual accounts for 2017, taking into account
the implementation by REA, on behalf of BBI, of part of the BBI's administrative budget for the
expert evaluators of Call 2017 :
RESULT OF THE IMPLEMENTATION OF THE BUDGET
EUR '000
2017 2016 Revenue for the financial year 88 947 65 487 Payments against current year appropriations (87 990) (64 377) Adjustment for REA transactions 365
Budget result 1 322 1 110
The revenues for the financial year are composed of the following: EC contribution € 83 871 693
Of which administrative € 2 285 155 Of which operational € 81 586 538 EFTA contribution € 1 687 819
Of which administrative € 55 758 Of which operational €1 632 061 BIC contribution € 3 365 280
Of which administrative € 2 615 280 Of which operational €750 000 Other revenues (recoveries) 22 560 TOTAL € 88 947 352
The payments for the financial year are composed of the following: Title 1 (staff-related) € 2 178 053 Title 2 (general administrative) € 2 001 706 Title 3 (operational) € 83 810 862 TOTAL € 87 990 621
The annual accounts also contain a reconciliation of the economic result with the budget result as
shown above. The economic result is adjusted for accrual items (such as depreciation) and
budgetary items (such as fixed asset acquisitions and members cash contributions).
30
RECONCILIATION OF ECONOMIC RESULT WITH BUDGET RESULT
EUR '000
2017 2016
ECONOMIC RESULT OF THE YEAR (105 936) (45 088)
Adjustment for accrual items (items not in the budgetary result
but included in the economic result)
Adjustments for accrual cut-off (net) 79 717 42 521
Unpaid invoices at year end but booked in expenses 9 18
Depreciation of intangible and tangible assets 14 10
Other individually immaterial (1) 2
Adjustment for budgetary items (item included in the budgetary result but not in the economic result)
Members' cash contributions collected in the year 88 925 65 487
Asset acquisitions (less unpaid amounts) (9) (51)
New pre-financing paid in the year and remaining open as at 31 December
(61 760) (61 791)
Payments made from non-budget lines
Payment appropriations carried over to following year Other individually immaterial
1
Adjustment for expert-evaluator transactions managed directly by REA 365
BUDGET RESULT OF THE YEAR 1 322 1 110
The amount indicated for the “accrual cutoff” (net) is composed of the following items:
Accrued project costs € 57 974 372
Accrued IKOP € 21 565 513
Staff unpaid leave accrual €37 973
Administrative accruals €149 229
Deferred charges -€10 537
TOTAL € 79 716 550
31
6. FINANCIAL SITUATION AND MAIN ACHIEVEMENTS The budget
The 2017 BBI JU administrative budget was still impacted in terms of execution by the surplus of
unused budget from prior years (mainly 2016). BBI JU made considerable efforts to consume these
previous years’ appropriations in priority in line with BBI’s financial rules, reaching an almost full
consumption. For what concerns the accumulated surplus outstanding at the end of 2017, the BBI
JU Governing Board decided that most of it (for an amount of €2 000 000) will be reabsorbed in
2019. This should also allow BBI in future years to show a budgetary performance based on
execution compared to the actual voted budget.
The operational budget shows a very efficient execution, also maximising the consumption of
unused appropriations from previous years, both in payment and commitment appropriations.
Other financial highlights BBI JU continued to improve its internal procedures, in particular fine-tuning the tendering and
signature of procurement contracts under the administrative budget. An extended use of framework
contracts, Memoranda of understanding and Service level agreements was put in place in order to
maximise the use of existing resources.
Concerning the operational budget, BBI JU performed its first payments of grants periodic reports.
Operational and financial staff took advantage of internal and corporate trainings in order to execute
these operations via efficiently the corporate H2020 IT tools.
Overall BBI JU as an organisation is progressing well towards its maturity, solidifying its knowledge
and practices in the financial domain. Preparation, planning and execution are consistently
improving and this is shown in the budgetary results.
32
7. GLOSSARY
Term Definition ABAC This is the name given to the Commission’s
accounting system, which since 2005 has been enriched by accrual accounting rules. Apart from the cash-based budget accounts, the Commission produces accrual-based accounts which recognise revenue when
earned, rather than when collected. Expenses are recognised when incurred rather than when paid. This contrasts with cash basis budgetary accounting that recognises transactions and other events only when cash
is received or paid.
Accounting The act of recording and reporting financial transactions, including the creation of the transaction, its recognition, processing, and summarisation in the financial statements.
Administrative appropriations Administrative appropriations cover the running costs of the Institutions and entities (staff, buildings, office equipment).
Adjustment Amending budget or transfer of funds from
one budget item to another
Adopted budget Draft budget becomes the adopted budget as soon as it is approved by the Budgetary
Authority.
Cf. Budget.
Agencies EU bodies having a distinct legal personality, and to whom budget implementing powers may be delegated under strict conditions. They are subject to a distinct discharge from
the discharge authority.
Amending budget Decision adopted during the budget year to amend (increase, decrease, transfer) aspects of the adopted budget of that year.
Annuality The budgetary principle according to which expenditure and revenue is programmed and authorised for one year, starting on 1 January
and ending on 31 December.
Appropriations Budget funding. The budget forecasts both commitments (legal pledges to provide finance, provided that certain conditions are fulfilled) and payments (cash or bank transfers to the beneficiaries). Appropriations for commitments and payments often differ —
differentiated appropriations — because multiannual programmes and projects are usually fully committed in the year they are decided and are paid over the years as the
33
implementation of the programme and project progresses. Non-differentiated appropriations
apply to administrative expenditure, for agricultural market support and direct payments and commitment appropriations equal payment appropriations.
Assigned revenue External/Internal
Dedicated revenue received to finance specific items of expenditure.
Main sources of external assigned revenue are financial contributions from third countries to programmes financed by the Union. Main sources of internal assigned revenue is revenue from third parties in respect of goods, services or work supplied at their request; (c)
revenue arising from the repayment of
amounts wrongly paid and revenue from the sale of publications and films, including those on an electronic medium. The complete list of items constituting assigned revenue is given in the Financial Regulation Art.21.2.
Authorising Officer (AO) The AO is responsible in each institution for authorising revenue and expenditure operations in accordance with the principles of sound financial management and for ensuring that the requirements of legality and
regularity are complied with.
Budget Annual financial plan, drawn up according to budgetary principles, that provides forecasts and authorises, for each financial year, an estimate of future costs and revenue and
expenditures and their detailed description
and justification, the latter included in budgetary remarks.
Budget result The difference between income received and amounts paid, including adjustments for carry-overs, cancellations and exchange rate differences. The resulting amount will have to
be reimbursed to the funding authority as provided in the Financial Regulation for Agencies.
Budget implementation Consumption of the budget through expenditure and revenue operations.
Budget item / Budget line / Budget position As far as the budget structure is concerned, revenue and expenditure are shown in the budget in accordance with a binding nomenclature which reflects the nature and
purpose of each item, as imposed by the budgetary authority. The individual headings
(title, chapter, article or item) provide a formal description of the nomenclature.
Budgetary authority Institutions with decisional powers on budgetary matters: the European Parliament and the Council of Ministers
Budgetary commitment A budgetary commitment is a reservation of appropriations to cover for subsequent expenses.
Cancellation of appropriations Unused appropriations that may no longer be used.
34
Carryover of appropriations Exception to the principle of annuality in so far as appropriations that could not be used in a given budget year may, under strict
conditions, be exceptionally carried over for use during the following year.
Commitment appropriations Commitment appropriations cover the total cost of legal obligations (contracts, grant agreements/decisions) that could be signed in
the current financial year. Art. 7 FR: Commitment appropriations cover the total cost in the current financial year of legal obligations (contracts, grant agreements/decisions) entered into for operations extending over more than one
year.
De-commitment Cancellation of a reservation of appropriations
Differentiated appropriations Differentiated appropriations are used to
finance multiannual operations; they cover, for the current financial year, the total cost of the legal obligations entered into for operations whose implementation extends over more than one financial year. Art. 7 FR: Differentiated appropriations are entered for
multiannual operations. They consist of commitment appropriations and payment appropriations.
Earmarked revenue Revenue earmarked for a specific purpose,
such as income from foundations, subsidies,
gifts and bequests, including the earmarked revenue specific to each institution. (Cf. Assigned revenue)
Economic result Impact on the balance sheet of expenditure and revenue based on accrual accounting
rules.
Entitlements established Entitlements are recovery orders that the European Union must establish for collecting income.
Exchange rate difference The difference resulting from currency exchange rates applied to the transactions concerning countries outside the euro area, or from the revaluation of assets and liabilities in
foreign currency at the closure.
Expenditure Term used to describe spending the budget from all types of funds sources.
Financial regulation (FR) Adopted through the ordinary legislative
procedure after consulting the European Court of Auditors, this regulation lays down the rules for the establishment and implementation of the general budget of the European Union. (OJ L 298, 26.10.2012)
35
Funds Source Type of appropriations (e.g.: C1, C2, etc.)
Grants Direct financial contributions, by way of donation, from the budget in order to finance either an action intended to help achieve an objective part of an EU policy or the functioning of a body which pursues an aim of general European interest or has an objective
forming part of an EU policy.
Implementation Cf. Budget implementation
Income Cf. Revenue
Joint Undertakings (JUs) A legal EU-body established under the TFEU.
The term can be used to describe any collaborative structure proposed for the "efficient execution of Union research,
technological development and demonstration programmes".
Lapsing appropriations Unused appropriations to be cancelled at the end of the financial year. Lapsing means the
cancellation of all or part of the authorisation to make expenditures and/or incur liabilities which is represented by an appropriation.
Legal base (basic act) The legal base or basis is, as a general rule, a law based on an article in the Treaty giving
competence to the Community for a specific policy area and setting out the conditions for
fulfilling that competence including budget implementation. Certain Treaty articles authorise the Commission to undertake certain actions, which imply spending, without
there being a further legal act.
Legal commitment A legal commitment establishes a legal obligation towards third parties.
Non-differentiated appropriations Non-differentiated appropriations are for operations of an annual nature. (Art. 9 FR). In the EU-Budget non-differentiated appropriations apply toadministrative expenditure, for agricultural market support and direct payments
Operational appropriations Operational appropriations finance the different policies, mainly in the form of grants or procurement.
Outstanding commitment Legal commitments having not fully given rise to liquidation by payments. Cf. RAL.
Outturn Cf. Budget result
Payment A payment is a cash disbursement to honour legal obligations.
36
Payment appropriations Payment appropriations cover expenditure due in the current year, arising from legal
commitments entered in the current year and/or earlier years (Art. 7 FR).
RAL Sum of outstanding commitments. Outstanding commitments (or RAL, from the French ‘reste à liquider’) are defined as the amount of appropriations committed that have not yet been paid. They stem directly from the
existence of multiannual programmes and the dissociation between commitment and payment appropriations. (Cf. Outstanding commitments).
Recovery The recovery order is the procedure by which
the Authorising officer (AO) registers an entitlement by the Commission in order to retrieve the amount which is due. The entitlement is the right that the Commission has to claim the sum which is due by a debtor, usually a beneficiary.
Result Cf. Outturn
Revenue Term used to describe income from all sources
financing the budget.
Rules of application Detailed rules for the implementation of the financial regulation. They are set out in a Commission regulation adopted after consulting all institutions and cannot alter the
financial regulation upon which they depend.
Surplus Positive difference between revenue and expenditure (see Budget result) which has to be returned to the funding authority as
provided in the Financial Regulation.
Transfer Transfers between budget lines imply the relocation of appropriations from one budget line to another, in the course of the financial year, and thereby they constitute an exception
to the budgetary principle of specification. They are, however, expressly authorised by the Treaty on the Functioning of the European Union under the conditions laid down in the Financial Regulation. The FR identifies
different types of transfers depending on whether they are between or within budget
titles, chapters, articles or headings and require different levels of authorization.