2016 annual activity report - european commissions mission 1 is to support eu policies with ......

2016

Annual Activity Report

JOINT RESEARCH CENTRE

Ref. Ares(2017)1877780 - 07/04/2017

jrc_aar_2016_final of 54

Table of Contents

THE DG IN BRIEF 3

EXECUTIVE SUMMARY 5

A) KEY RESULTS AND PROGRESS TOWARDS THE ACHIEVEMENT OF GENERAL AND SPECIFIC OBJECTIVES OF THE DG (EXECUTIVE SUMMARY

OF SECTION 1) .............................................................................................................................................................. 5

B) KEY PERFORMANCE INDICATORS (KPIS) ......................................................................................................................... 6

C) KEY CONCLUSIONS ON FINANCIAL MANAGEMENT AND INTERNAL CONTROL (EXECUTIVE SUMMARY OF SECTION 2.1) ................... 11

D) INFORMATION TO THE COMMISSIONER(S) .................................................................................................................... 11

1. KEY RESULTS AND PROGRESS TOWARDS THE ACHIEVEMENT OF GENERAL AND SPECIFIC OBJECTIVES OF

THE DG 12

1.1 COMMISSION GENERAL OBJECTIVE 1: "A NEW BOOST FOR JOBS, GROWTH AND INVESTMENT" ..................................... 18

1.2 COMMISSION GENERAL OBJECTIVE 3: "A RESILIENT EUROPEAN ENERGY UNION WITH A FORWARD-LOOKING CLIMATE

CHANGE POLICY" ........................................................................................................................................................ 19

1.3 COMMISSION GENERAL OBJECTIVE 4: "A DEEPER AND FAIRER INTERNAL MARKET WITH A STRENGTHENED INDUSTRIAL

BASE" 20

1.4 COMMISSION GENERAL OBJECTIVE 9: "A STRONGER GLOBAL ACTOR" ....................................................................... 21

1.5 COMMISSION GENERAL OBJECTIVES 1, 3, 4 AND 9 ................................................................................................. 22

2. ORGANISATIONAL MANAGEMENT AND INTERNAL CONTROL 24

2.1 FINANCIAL MANAGEMENT AND INTERNAL CONTROL ................................................................................................ 24

2.1.1 CONTROL RESULTS ........................................................................................................................................... 25

2.1.2 AUDIT OBSERVATIONS AND RECOMMENDATIONS.................................................................................................... 40

2.1.3 ASSESSMENT OF THE EFFECTIVENESS OF THE INTERNAL CONTROL SYSTEMS .................................................................. 45

2.1.4 CONCLUSIONS AS REGARDS ASSURANCE ................................................................................................................ 47

2.1.5 DECLARATION OF ASSURANCE ............................................................................................................................ 48

DECLARATION OF ASSURANCE 48

2.2 OTHER ORGANISATIONAL MANAGEMENT DIMENSIONS ............................................................................................ 49

2.2.1 HUMAN RESOURCE MANAGEMENT ...................................................................................................................... 49

2.2.2 BETTER REGULATION (ONLY FOR DGS MANAGING REGULATORY ACQUIS) .................................................................... 50

2.2.3 INFORMATION MANAGEMENT ASPECTS ................................................................................................................ 50

2.2.4 EXTERNAL COMMUNICATION ACTIVITIES ............................................................................................................... 50

2.2.5 INFRASTRUCTURE ............................................................................................................................................. 51

2.2.6 INITIATIVES TO IMPROVE ECONOMY AND EFFICIENCY OF FINANCIAL AND NON-FINANCIAL ACTIVITIES ................................. 52


THE DG IN BRIEF

As the European Commission's science and knowledge service, the Joint Research

Centre's mission1 is to support EU policies with independent evidence throughout the

whole policy cycle. Its work has a direct impact on the lives of citizens by contributing

with its research outcomes to a healthy and safe environment, secure energy supplies,

sustainable mobility and consumer health and safety.

The JRC draws on over 50 years of scientific experience and continually builds its

expertise. Located across five different countries, the JRC hosts specialist laboratories

and unique research facilities and is home to thousands of scientists working to support

EU policy.

While most of our scientific work serves the policy Directorates-General of the European

Commission, we address key societal challenges while stimulating innovation and

developing new methods, tools and standards. We share know-how with the Member

States, the scientific community and international partners. The JRC collaborates with

over a thousand organisations worldwide whose scientists have access to many JRC

facilities through various collaboration agreements. The JRC is a key player in supporting

successful investment in knowledge and innovation foreseen by the Horizon 2020 Work

Programme, the EU’s programme for research and innovation.

Horizon 2020 sets out the overall objective for the JRC non-nuclear work as follows: to

provide customer-driven scientific and technical support to Union policies, while flexibly

responding to new policy demands. The JRC contributes to the overall objective of

Horizon 2020 with its long-standing scientific expertise, modelling capacity, foresight

studies; work on standards, infrastructure and e-infrastructures.

The JRC's nuclear work, funded by the EURATOM Research and Training Programme, has

as its objective the pursuit of research, knowledge management and training activities

with an emphasis on nuclear safety, security and safeguards; thus we contribute to the

transition to a carbon-free economy in a safe, efficient and secure way.

The JRC’s portfolio of activities is fully in line with the political guidelines of the President

Juncker, Horizon 2020/Euratom Research and Training Programme and the Europe 2020

Strategy, and JRC supports the initiatives of the other European Commission Directorates

General (DGs) with whom it collaborates closely in virtually all key policy areas.

Moreover, the JRC continues to deliver on its existing longer term obligations (i.e. as

specified in existing EU legislation and contracts).

As part of the JRC's Strategy 2030, the JRC has gone through a major reorganisation in

2016. It is now organised in six scientific directorates, two horizontal directorates

responsible for knowledge management and competence centres, respectively, as well as

two horizontal directorates with corporate responsibilities, i.e. one for strategy and work

programme coordination and the other for resources.

The new competence centres offer skills in microeconomic evaluation, composite

indicators, text mining and tools for innovation monitoring and thus can be applied across

economic sectors. The knowledge centres provide the engine houses for systemic

reviews, data analytics and visualisation in the fields of territorial policies, migration and

demography and disaster risk management.

Given the geographic dispersal of the JRC and the technical nature of its work, the JRC

policy is to place local decision-making responsibility with the operational services.

1 https://ec.europa.eu/jrc/en/about/jrc-in-brief. This link also contains a video providing

further information about the JRC.


Therefore JRC scientific unit heads are nominated as sub-delegated authorising officers

for the budget lines specifically related to their research projects.

Unlike other Directorates General of the Commission, the JRC manages scientific

infrastructures and nuclear facilities.


EXECUTIVE SUMMARY

The Annual Activity Report is a management report of the Director-General of the JRC to

the College of Commissioners. Annual Activity Reports are the main instrument of

management accountability within the Commission and constitutes the basis on which

the College takes political responsibility for the decisions it takes as well as for the

coordinating, executive and management functions it exercises, as laid down in the

Treaties2.

a) Key results and progress towards the achievement of

general and specific objectives of the DG (executive

summary of section 1)

In 2016, JRC's knowledge and research contributed to many policy areas, notably in

supporting the Commission's climate and energy packages for energy security, transition

to low carbon emissions and clean energy. Similarly, the JRC helped to strengthen the

three pillars of the Digital Single Market Strategy and develop tools and perform analyses

for achieving a deeper and fairer Economic and Monetary Union.

In terms of performance indicators, the JRC showed progress in implementing its support

for the Commission General Objectives 1, 3, 4 and 9 including the associated specific

objectives of the JRC Strategic Plan 2016-20 and the JRC Management Plan 2016,

respectively, thereby implementing its objectives. The positive evolution of the JRC's

impact contributed to the implementation of Horizon 2020 and to progress in terms of

indicators related to the General Commission Objectives; nine out of 10 selected

Commission-wide impact indicators relevant to the JRC show trends towards

achievement of their targets.

Most importantly in terms of shaping the JRC's organisational set-up for future

challenges, in April 2016, Commissioner Navracsics approved the new JRC Strategy

2030. It sets out a long-term perspective for the JRC in creating, managing and making

sense of collective scientific knowledge for better EU policies. One of the initiatives of the

strategy is to set up knowledge and competence centres. By bringing together experts,

competences, tools, skills, data and knowledge and working with DGs across the

Commission, the centres can tailor the supply of sound scientific advice and knowledge,

by better understanding the political needs. With three competence centres and three

knowledge centres now up and running, the JRC has taken an important step and

achieved a major objective in 2016, moving the JRC into the new directions defined by its

Strategy.

As part of the JRC Strategy's focus on managing knowledge, in 2016, JRC actively

contributed to the implementation of the Commission's new corporate data, information

and knowledge management policy. The Modelling Inventory and Knowledge

Management System (known as MIDAS: an inventory of models used by the Commission

for policy support) has been scaled up from a JRC tool to a Commission-wide tool. In

addition, two important initiatives related to knowledge management and the European

Semester have been launched: The 'Connected European Semester' project, launched in

October 2016, with the objective of enhancing collaborative working, using the

'Connected' platform for the 27 European Semester country teams and the "Connected

Country Knowledge", a pilot project to improve the sharing of country-specific knowledge

within the Commission with the aim of improving the Commission's analysis of the

2 Article 17(1) of the Treaty on European Union.


situation of each Member State, primarily for the purposes of the European Semester

(details in chapter 2.6 on increasing efficiency).

The EU Policy Lab launched in 2016 provides a collaborative and experimental space for

innovative policy design by helping people chart paths to the future, under different

scenarios. In 2016, it was used for policy making by DG SANTE and DG AGRI.

The new strategy not only focusses the JRC's work on political priorities, it also promotes

a strategic approach in targeting fit-for-purpose partnerships, bringing long-term added

value. In 2016, for example, arrangements were established with the US Department of

Energy, the US Geological Survey, the National Academy of Sciences of Ukraine and the

Central European University. The new Collaborative Doctoral Partnership firmly anchors

the JRC with the best educational institutions in the EU and Horizon 2020 countries and

in the field of Nuclear Decommissioning and Environmental Remediation, the JRC

launched an initiative to provide vocational and hands-on training to encourage more

students and professionals to enter this domain.

Regional cooperation remains a high priority for the JRC. Within the framework of the

Smart Specialisation Platform, which helps regions to develop, implement and review

their research and innovation strategies, new platforms were launched during 2016 for

energy, industrial modernisation and agri-food. These platforms play a vital role in

promoting common investment projects, by providing tailored advice and helping regions

to cooperate in a structured way. To help boost regional development further, the JRC

continued to support to the implementation of the EU Strategy for the Danube Region.

b) Key Performance Indicators (KPIs)

The JRC system of core indicators

The JRC plans, monitors3 and evaluates its scientific policy support process as well as its

strategic and horizontal support functions on the basis of a set of core indicators,

reflecting impacts, productivity and efficiency, and using the balanced scorecard concept

along the three perspectives 'Outputs and Impacts', 'Organisational Efficiency' and

'Working Environment'.

The core indicators are related to general and specific objectives of the Strategic and

Management Plans. Based on a bi-monthly JRC dashboard monitoring system (Tableau de Bord) the JRC set of core indicators serves for checking if the organisation stays on

course with respect to its priorities and in particular the implementation of its SP and MP

targets. The JRC core indicators of the SP 2016-2020 and of the MP 2016 are

summarised in the "JRC core indicators" table (Annex 14), and their evolution is

discussed in more detail under the respective general and/or specific objectives.

Many of the core indicators can be decomposed and aggregated in many different ways,

according to e.g. work programme structure, or according to JRC directorates.

The 5 selected key performance indicators in the SPP context

In the context of the Commission's SPP reporting and in line with the standing

instructions for the Annual Activity Report, the JRC has selected five indicators -

hereafter to be referred to as SPP key performance indicators, SPP KPI, (see

Figures B-1 to B-4 below) from the larger set of JRC core and auxiliary indicators, which

cover both the non-nuclear and nuclear direct actions of the JRC, as well as aspects of

3 Both short and long term.


internal control:

SPP KPI Nr 1 "Policy-support impact": This indicator is based on JRC’s annual

internal peer-review ‘Productivity and Impact Evaluation (PRIME). Based on a

comprehensive set of criteria, this indicator counts the cases where JRC work sublimated

at the level of policy making, i.e. cases where JRC policy support becomes part or even

the basis of European policy making and implementation. In other words, it assesses the

impact of JRC’s policy support work4.

With some 430 policy impacts in 2016, this indicator shows a positive trend and has

exceeded its target (see Fig. B-1 below). Qualitative and illustrative examples of the

policy support and the resulting impacts are given in Part 1 and Annex 15, respectively

of this document. The target has been established on the basis of time series analysis

taking into account resource evolution scenarios. The JRC is closely monitoring this

indicator and its target.

Figure B-1: Time series of the indicator "Policy support impact". The indicator has been selected from Perspective 1 'Outputs and Impacts' of JRC's set of core indicators

SPP KPI Nr 2 "Proportion of peer-reviewed publications in the top 10% most

cited journals". This indicator monitors the JRC's scientific excellence. It reflects the

degree to which JRC publishes (often jointly with external scientists) the results of its

research in articles of highly cited peer-reviewed scientific journals (in particular journals

ranked amongst the top 10% most cited journal by SJR5). Although the indicator has

exceeded its set target, it is too early to make any judgements; longer time series are

needed.

4 The term impact refers to counts of tangible instances of utility or added value of JRC’s policy support work for

a policy DG. The quantitative values are elaborated in PRIME, JRC's annual internal evaluation exercise based on a set of impact categories ('Anticipation, conception, adoption of EU policy', 'Implementation, monitoring, evaluation of EU policy', 'Ad-hoc support (including crisis management)', 'EU and global standardisation and int. harmonisation', 'Support to specific countries/regions and int. bodies'. The tangibility of the occurrence of an added value is gauged against a set of detailed criteria.

5 SJR: Scimago Journal & Country Rank: http://www.scimagojr.com/journalrank.php

NB. Values for 2007, 2008 and 2009 were calculated with a different

method and are therefore not comparable

Policy support impact

Impact of policy support

235270 269

311

338372

438

150

200

250

300

350

400

450

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Indicator target for year NIndicator value for year NYear N

Legend:


Figure B-2: Time series of the indicator "Proportion of peer-reviewed publications in the top 10% most cited journals". The indicator has been selected from Perspective 1 'Outputs and Impacts' of JRC's set of core indicators

SPP KPI Nr 3 "International collaborations": The indicator 'International

collaborations' measures the proportion of peer-reviewed scientific articles jointly

produced with scientists from non-EU countries. With 20.5%, this indicator shows a

decrease compared to the previous year (24%). It is slightly outside target range of

24% ±3% newly defined last year, but inside the multi-annual range of fluctuations. It is

too early to draw any conclusions from a singular event.

Figure B-3: Time series of the indicator "International collaborations". The indicator has been selected from Perspective 1 'Outputs and Impacts' of JRC's set of core indicators

SPP KPI Nr 4 "Weighted average of overall customer satisfaction": As one of the

results of the work programme cycle review 2015-2016, the JRC has designed a new

approach to collection of information on customer satisfaction, replacing a decentralized

by a centralized approach. In the context of the reorganisation of the JRC in 2016, the

phasing-in of the new customer satisfaction process has been advanced to 2017. Its

launch is imminent (April 2017). As a consequence, there is no indicator value for 2016.

Scientific excellence Proportion of peer-reviewed publications in the top 10%

most cited journals

36%45%

0%

20%

40%

60%

80%

100%

2015 2016

Indicator target for year NIndicator value at end of year N

Year N = publication year

Legend:

Scientific collaboration and networking

International collaborations

20%

17% 19%21%

19% 18%

24% 24% 24%21%

0%

10%

20%

30%

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Indicator target for year NIndicator value for year NYear N

Legend:


SPP KPI Nr 5 "Implementation of Internal Control Standards in the JRC": The

fifth SPP key performance indicator is linked to the achievement of the internal control

objective.

The indicator's numerical value represents the weighted average of the results of a

survey that was carried out in the reporting year to assess the staff perception of the

degree of implementation of the Internal Control Standards in the JRC and to appraise if

the internal control systems are effective.

In 2016, the indicator's value was 3.4, which is slightly lower than the target set and the

2015's value of 3.5. However, there is a 6% improvement for this indicator when

compared to the 3.2 achieved in both 2014 and 2013. This evidences a rather stable

situation with respect to staff perception of the degree of implementation of the internal

control standards in the JRC. The average score as well as the breakdown of the results

for each question of the survey is given in Figure B-4 below.

Based on the survey results as well as on the analysis and the overall conclusion reported

in Part 2 of this report, there is reasonable assurance that, overall, the JRC has suitable

internal controls in place and working as intended; risks are being appropriately

monitored and mitigated; and necessary improvements and reinforcements are being

implemented.

Implementation of

Internal Control

Standards in the JRC

Definition: Average of

scores (range between 1

("Fully Disagree") and 5

("Fully Agree")),

obtained from the

annual survey carried

out to assess the staff

perception of the degree

of implementation of the

Internal Control

Standards in the JRC

and to appraise if the

internal control systems

are effective.

Source: JRC internal

indicator

Results

Average score 2016: 3.4 (Target for 2016: 3.5)

Average score 2015: 3.5

Figure B-4: Average score and breakdown of the SPP KPI Nr 5 "Implementation of Internal Control Standards in the JRC". This indicator was selected from Objective 2, in Part 2B of the JRC SP 2016-2020

4.15

3.87

3.37

4.06

3.40

3.55

3.24

3.01

2.94

3.56

3.39

3.42

3.47

3.68

3.50

4.10

3.85

3.22

3.91

3.30

3.46

2.72

2.94

3.02

3.44

3.29

3.22

3.19

3.36

3.42

0.0 1.0 2.0 3.0 4.0 5.0

1.Mission

2.Ethical and organisational values

3. Staf allocation and mobility

4. Staff appraisal and development

5. Objectives and performance indicators

6. Risk Management

7. Operational Structure

8. Processes and Procedures

9. Management supervision

10. Business continuity

11. Document management

12. Information and communication

13. Accounting and Financial reporting

14. Evaluation of Activities

15. Assessment of Internal Control

Systems

Score per Internal Control Standard

2015 2016


Conclusion:

- KPIs 1, 2 and 3 show positive evolutions or stability at high levels. Being

representative of JRC's outputs and impacts, they provide assurance of the overall

progress of the JRC as a scientific policy support organisation.

- KPI 5 on internal control provides assurance of the rather stable high level of

awareness of the internal control standards.


c) Key conclusions on Financial management and

Internal control (executive summary of section 2.1)

In accordance with the governance statement of the European Commission, the JRC and

its staff conduct its operations in compliance with the applicable laws and regulations,

working in an open and transparent manner and meeting the expected high level of

professional and ethical standards.

The Commission has adopted a set of internal control standards, based on international

good practice, aimed to ensure the achievement of policy and operational objectives. The

financial regulation requires that the organisational structure and the internal control

systems used for the implementation of the budget are set up in accordance with these

standards. The JRC has assessed the internal control systems during the reporting year

and has concluded that the internal control standards are implemented and function as

intended. Please refer to AAR section 2.1.3 for further details.

In addition, the JRC has systematically examined the available control results and

indicators, including those aimed to supervise entities to which it has entrusted budget

implementation tasks, as well as the observations and recommendations issued by

internal auditors and the European Court of Auditors. These elements have been

assessed to determine their impact on the management's assurance as regards the

achievement of control objectives. Please refer to Section 2.1 for further details.

In conclusion, management has reasonable assurance that, overall, suitable controls are

in place and working as intended; risks are being appropriately monitored and mitigated;

and necessary improvements and reinforcements are being implemented. The Director

General, in his capacity as Authorising Officer by Delegation has signed the Declaration of

Assurance.

d) Information to the Commissioner(s)

In the context of the regular meetings during the year between the DG and the

Commissioners on management matters, also the main elements of this report and

assurance declaration have been brought to the attention of the Commissioner for

Education and Culture, Youth and Sports, Tibor Navracsics, who is also responsible for

the JRC.


1. KEY RESULTS AND PROGRESS TOWARDS

THE ACHIEVEMENT OF GENERAL AND

SPECIFIC OBJECTIVES OF THE DG6

Commission services address societal needs, and the JRC supports the Commission to

put its actions on a sound scientific footing. Pursuing the vision “to play a central role in

creating, managing and making sense of collective scientific knowledge for better EU

policies” the JRC supports the General Objectives and the work programme of the

Commission. This is also embodied in the mission of the JRC: "As the science and knowledge service of the Commission our mission is to support EU policies with independent evidence throughout the whole policy cycle". It does this through its rolling

bi-annual JRC Work Programme with Key Orientations (KOs) developed in consultation

with partner DGs in the Commission. This process ensures both, that the KOs match the

Commission's priorities, and that the JRC also continues its scientific support to EU policy

makers related to legal and/or contractual obligations. Moreover, the JRC responds to

urgent and emerging requests for scientific and technical support.

This intervention logic is displayed in Figure 1-1.

The implementing specifications are formulated in the current legal bases as follows:

• In line with the stipulations of specific objective 17 of Horizon 2020, the

JRC provides demand-driven scientific and technical support to Union

policies, while flexibly responding to new policy demands.

• Moreover, in line with the stipulations of the Euratom Research and

Training Programme (specific objectives 9-13) the JRC has the objective to

improve nuclear safety, security and radiation protection, and to contribute

to the long-term decarbonisation of the energy system in a safe, efficient

and secure way.

The JRC's Work Programme 2016-2017 is the third under Horizon 2020, and has a rolling

two-year timeframe.

Managing knowledge and competences were a central point of the JRC Strategy 2030

adopted in 2016. The strategy dedicates a chapter focused on Knowledge and

Competences centres. In 2016, JRC actively contributed to the implementation of the

Commission's new corporate data, information and knowledge management policy. The

Modelling Inventory and Knowledge Management System (known as MIDAS: an

inventory of models used by the Commission for policy support) has been extended from

a JRC tool to a Commission-wide tool. In addition, two important initiatives related to

knowledge management and the European Semester have been launched: The

'Connected European Semester' project, launched in October 2016, with to enhance

collaborative working, using the 'Connected' platform for the 27 European Semester

country teams and the "Connected Country Knowledge", a pilot project to improve the

sharing of country-specific knowledge within the Commission with the aim of improving

the Commission's analysis of the situation of each Member State, primarily for the

purposes of the European Semester (details in chapter 2.6 on increasing efficiency).

Finally, JRC is running three knowledge centres on Territorial Policies, on Disaster and

Risk Management, and on Migration and Demography and three competence centres on

Micro-economic evaluation, on Composite indicators and scoreboards, and on Text

mining. Activities and achievements related to information management are described in

6 See footnote 2.


Part 2 of the present report.

The Scientific Advice Mechanism (SAM) was formally established (as Commission

Decision C(2015)6946) in October 2015. It aims is to provide the Commission with

independent scientific advice on specific policy issues, where such advice is critical to the

development of EU policies or legislation. Close co-operation between the JRC and the

SAM Unit (in RTD) was established in 2016, notably via: being a member of the SAM

inter-service group; seconding three JRC staff members to the SAM Unit; providing

Information Notes, expert advice and participating in meetings on the SAM-HLG topics (in

2016, on CO2 emissions from vehicles under real-world driving conditions and

cybersecurity); Developing the Agenda for the 2nd International Network of Government

Science Advice Conference, hosted by the Commission in Brussels on 29th - 30th

September 2016; Collaborating on the preparation of the concept for the Science Meets

Parliament event (8 November, 2016) entitled "Science for better European evidence-

informed policy-making: The role of regions."; Sharing of relevant JRC tools, namely, TIM

(Technology Innovation Monitor) and EMM (Europe Media Monitor) to members of the

RTD-SAM;

Achievement of general and specific objectives

The JRC, through the provision of scientific and technical support to numerous policy

DGs, contributes both, directly and indirectly to the achievement of the Commission

general objectives (CGO).

That is, the JRC' activities fall in the area of contribution.

The JRC supports nearly all CGOs of the Commission President's Agenda for Jobs,

Growth, Fairness and Democratic Change, as well as the Commission Work Programme

2016. In line with the standing instructions, the JRC Strategic Plan 2016-2020 as well as

its Management Plan 2016 focus on JRC's contribution to the Commission General

Objectives (CGO) 1, 3, 4 and 9, with JRC specific objectives (SOs), 1.1-1.9, 3.1-3.3, 4.1-

4.3 and 9.1-9.3, respectively (Table 1-1).

Throughout 2016 JRC's support of Commission services has been underpinned by the

qualitative and quantitative achievements of SOs 1, 3, 4 and 9. Over 1500 policy related

outputs were produced throughout 2016. 96% of the policy related deliverables planned

for release in 2016 have been achieved.

With some 430 occurrences of tangible specific policy impacts, the JRC has exceeded the

short term target and it's approaching the long term target. Moreover, nine out of 10

selected Commission-wide impact indicators show trends towards achievement of their

targets, while the other one is stagnating. Moreover, the positive evolution of JRC's

impact contributed to the implementation of Horizon 2020.

Impact from policy support was distributed over the full range of JRC partners and

stakeholders. In line with the JRC’s mission most of the impacts happen within or

through the Commission. Impact at the level of other partners or stakeholders was in

relation to Commission policies, confirming a close link between JRC work and EU

policies.

Paragraphs 1.1-1.4 below describe in more detail the activities, achievements and

impacts of the JRC throughout 2016. On top of that, these paragraphs also demonstrate

the EU added value of JRC's activities, which can be summarized and categorized as

follows:

- coordination gains (e.g. EU-wide coordination of scientific facilitation of a

stakeholder consultation process in the context of the Industrial Emissions

Directive or in enabling European-wide crisis centre coordination);

- legal certainty by e.g. developing reference materials and measurements and


standards for food and feed safety, the environment and health;

- training for Member States enforcement laboratories;

- providing technical support to Candidate Countries;

- encouraging trust of the citizen in the legislator e.g. GMO testing of imported

foodstuffs; developing safe and secure approaches for nuclear waste; supporting

nuclear safeguards; providing knowledge for the public regarding radio-activity in

the environment.

Besides the EU added value deriving from direct support to European policy makers, the

JRC produces added value also for the European Union by supporting international

organisations e.g. the Organisation for Economic Co-operation and Development (OECD),

the World Bank, the International Atomic Energy Agency (IAEA) and International

Standards Organisation (ISO).

By combining such evaluation information with resource information, the Commission’s

performance criteria and senior management requirements are satisfied.

In 2016, the JRC demonstrated again that its scientific policy support is based on

excellent scientific research, as illustrated by the set of scientific performance and impact

indicators (see specific objective 11 in section 1.5 below).

In 2016, the Policy Support Coordination Directorate (renamed "Strategy and Work

Programme Coordination", following the JRC reorganisation on 01/07/2016) continued to

enhance its role as the interface between the JRC scientific directorates and the partner

DGs, as well as its role in strengthening the inter-Institution and stakeholder relations.

This is reflected in specific objective 10 (see paragraph 1.5 of the present report).

While the present report outlines for formal reasons the relations between four CGOs and

the JRC KOs, in specific objectives 10 and 11, quantitative information for the main

indicators is given for the entire JRC, hence covering the support to nine of the

Commission's priorities, as well as support cutting across all CGOs (i.e. JRC horizontal

policy area 11 "Cross-cutting activities").

Organisational: 2016 was also an important year regarding organisational aspects.

Most notably, the JRC strategy 2030 was adopted and launched. There are five main

objectives, i.e. 1) to be A manager of priority-driven knowledge and competences; 2) to

be A strategic partner at the core of the Commission; 3) creating One JRC – anticipating the emerging issues, understanding complexities and breaking silos; 4) being Fully policy relevant and world class in knowledge generation; and 5) A people-centric, leaner and more efficient organisation. While many achievements are integrated in the presentation of activities in the various

parts of the present report, a more comprehensive perspective is provided here for issues

relevant to Part 1 relevant issues.

One of the most visible aspects of launching and implementing the JRC Strategy was the

reorganisation, which took place in summer 2016 resulting in the creation of two new

directorates, one for each Knowledge and Competence Management, respectively. These

will complement JRC research work by 'managing' knowledge from other sources.

As part of this process, the JRC has created and operated specific Knowledge Centres

(KCs) – so far on Territorial Policies, on Disaster and Risk Management, and on Migration and Demography - and it plans to expand their scope in 2017. These are virtual entities,

bringing together experts and knowledge from different locations inside and outside the

Commission. Their objective is to inform policy makers in a transparent, tailored and

independent manner, about the status and findings of the latest scientific evidence.


In addition to Knowledge Centres, which are structured around policy challenges, the JRC

created and operates Competence Centres (CC), centred on analytical tools which can be

applied in any policy area. These Centres bring together, in one place, all in-house

expertise in the use of these tools.

CCs offer a number of services. For example, they can a) advise a policy DG on the

choice of the most appropriate tools; b) work with the policy DG to apply the tools to the

policy problem at hand, c) provide training courses in the use of the tools for policy

making; d) develop new tools; and e) help to benchmark and validate tools used across

the Commission, to improve their comparability and robustness.

In 2016, Competence Centres on Micro-economic evaluation, on Composite indicators and scoreboards and on Text mining were operational.

The JRC must also respond to the growing demand for country-based knowledge, in view

of the progressive strengthening of the European Semester. Hence, in 2016 the JRC

started to tag knowledge produced or managed by the JRC in such a way that it can be

easily retrieved, both thematically and geographically (at national or at sub-national

level).

As a further consequence of the JRC Strategy related reorganisation, all scientific

directorates were reorganised so as to match the new two tier structure of knowledge

production and knowledge-/competence management. Finally the functions of the

Directorate for Ispra Site Management were integrated in the Directorate for Resources

and the revised Directorate for Nuclear Safety and Security. As a result of this

reorganisation, the number of directorates could be kept constant.

As one of the first tasks of the JRC Strategy, an indicator set was developed which allows

monitoring the implementation of the strategy along the five dimensions spanned by the

strategic objectives.

External Factors: The impact of the JRC's scientific policy support work can be shown at

numerous levels. The most immediate impacts are at the level of European policy

makers. It is at that level, where the most direct effects beyond JRC's control, i.e.

external factors can be found. If for any reason, the JRC's support is not taken into

account, then despite the research done, no impacts will occur, no utility will result, and

hence this will not contribute to the policy impact indicator.

Such cases occur occasionally, and are generally beyond the JRC's control.

The JRC's contribution to policy making and its wider societal impact might be affected by

changes in the external environment, i.e. unexpected changes in the political and social

context.

The achievement of the JRC's main organisational objectives depends strongly on

detecting and/or anticipating such external factors.

Risks: No risks have materialized throughout 2016.

Conclusion: For the JRC, the distinction between policy-related outputs and expenditure

outputs is not relevant as all policy-related outputs are expenditure outputs, given that

the JRC activities are funded by a spending programme (Horizon 2020). Taking into

account the above descriptions of achievements, indicator developments and in particular

impacts, the AOD's professional assessment concludes that the JRC has contributed to

policy achievements and generated EU added value as was outlined in the SP and MP

2016.


Figure 1-1: Logical model outlining JRC's intervention logic


Table 1-1. Selected Commission general objectives and corresponding JRC

specific objectives


1.1 Commission General Objective 1: "A New Boost For

Jobs, Growth And Investment"

Specific objectives 1.1 to 1.9 (contributing to H2020 Specific Objective 17):

A well-informed European policy-making, appropriately and timely supported by the JRC

through the provision of high quality and innovative scientific and technical studies, tools,

data, materials, models and standards, in the following areas:

(Specific objective 1.1) Agriculture and Rural Development

(Specific objective 1.2) Education, Culture, Youth and Sport

(Specific objective 1.3) Environment

(Specific objective 1.4) Maritime Affairs and Fisheries

(Specific objective 1.5) Health and Food Safety

(Specific objective 1.6) Regional Policy

(Specific objective 1.7) Research, Science and Innovation

(Specific objective 1.8) Transport

(Specific objective 1.9) Employment, social affairs, skills and labour mobility

Collective and coordinated efforts at the European level are needed to put Europe on the

path to economic recovery. In 2016, the EC focused on addressing current market

failures, mobilising private investments and ensuring that adequate skills for jobs are

available to EU citizens. Sustainable development and the shift towards a circular

economy were also prominent in 2016.

In this context, the JRC continued to contribute to boosting jobs, growth and investment

by means of a number of initiatives in its different areas of expertise. A new Knowledge

Centre for Territorial Policies was launched and Smart Specialisation Platforms (S3P)

were developed to help EU regions perform better. JRC’s economic studies, modelling

tools and screening methodologies contributed to identifying key challenges and

opportunities and informing policy in a very diverse set of sectors such as agriculture,

trade, employment and health. The launch of competence frameworks contributed to

streamlining EU citizens’ skills and competences.

Some examples of the large number of achievements and impacts of the JRC in this area

are described in detail in Annex 15. These examples relate to:

- Smart Specialisation Platforms support Regional Cooperation and Investment

- Rio Country Reports identify Key Research and Innovation (R&I) Challenges

- JRC Launches Knowledge Centre for Territorial Policies

- Competence Frameworks to improve Education and Learning

- Collaborative Economy: A Research Agenda for Policy Support

- Key Enabling Technologies for Growth and Jobs

- Attracting R&D Investment from Multinationals

- Scoreboard Shows that R&D Investment in EU is growing faster than global and

US Trends

- Screening Methodology helps to identify Endocrine Disruptors


- Agro-Economic Modelling Tools inform a more sustainable Agriculture Policy

- First-Ever global Soil Biodiversity Atlas

- European Atlas of Forest Tree Species Launched

- Science for policy report on delivering on EU Food Safety and Nutrition in 2050 -

Future challenges and policy preparedness

1.2 Commission General Objective 3: "A Resilient

European Energy Union with A Forward-Looking

Climate Change Policy"

Specific objectives 3.1 to 3.3 (contributing to H2020 Specific Objective 17 and to

EURATOM Research & Training Programme Specific Objectives 9, 10, 11, 12 and 13):




(Specific objective 3.1) Climate Action

(Specific objective 3.2) Energy

(Specific objective 3.3) Safe, secure and sustainable use of the nuclear energy

Ensuring a secure, affordable and climate-friendly energy supply for Europe is the raison d'être of the Energy Union Strategy and an important investment in Europe's future

prosperity. Throughout 2016, the European Commission (EC) continued to deliver on its

climate and energy objectives with the adoption of three important packages: on energy

security measures in February; on accelerating the transition to low-carbon emissions in

July; and on managing the transition to a clean energy in December.

Energy and climate policies are ever-more intertwined and these packages also support

the EU's commitments under the Paris Agreement (COP21). Naturally, in 2016 the JRC

continued to increase its involvement in developing and implementing the EU's climate

and energy policies. Beyond its contribution to legislative proposals, the JRC advised EU

negotiators at the Marrakech summit (COP22) and presented its most recent work to

inform related debates in the broader scientific and policy arenas.



- Paris pledges insufficient to meet 2°C, according to the JRC experts

- Covenant of Mayors – a local approach to Global Warming

- Global CO2 Emissions from fossil fuels and industrial processes stall

- Independent Greenhouse Gas Verification

- Improving air quality in urban areas

- Helping to increase the share of biofuels in transport

- Sustainable Energy Security

- Upcoming climate hazards will hit Europe’s industry, transport and energy

infrastructure hard

- Nuclear safety: Enhancing nuclear safeguards efficiency and effectiveness by


developing innovative methods and tools for the inspectorates DG ENER and IAEA

- Promoting education and training for Nuclear Decommissioning

- Driving Europe’s transition to a Low-Carbon Economy

- New Commission online tool to measure car journey fuel costs and CO2 emissions

- EU leaders in solar energy capacity, but there are fewer new installations

- Clean energy for all Europeans

- LULUCF in the EU 2030 climate targets

1.3 Commission General Objective 4: "A Deeper And Fairer Internal Market With A Strengthened

Industrial Base"

Specific objectives 4.1 to 4.3 (contributing to H2020 Specific Objective 17):




(Specific objective 4.1) Internal Market, Industry, Entrepreneurship and SME

(Specific objective 4.2) Intellectual Property Rights

(Specific objective 4.3) Customs policy and the fight against fraud

The EU has the largest Single Market in the world. The reforms set out in the Single

Market Strategy seek to unlock its full potential and create the right conditions for the

sustainable competitiveness of the European economy.

In 2016, the JRC contributed to this ambitious objective via a number of activities.

Research into raw-material-dependent sectors aimed to help transform strategic EU

industries into more resilient ones. Standardisation and streamlining work in ICT,

transport, the steel industry, and alcohol denaturants contributed to the continuous

improvement of integration into the Single Market, which should enable job creation,

economic growth, increased competitiveness, innovation and industrial leadership.

Last but not least, the environmental dimension of sustainable competitiveness was not

left behind, with the JRC contributing to new, more stringent emission requirements for

industrial and chemical installations.



- Supply of raw materials critical to strategic EU industries

- Scientific input critical to standardisation across all sectors

- Reducing harmful emissions from industrial and chemical installations

- European harmonisation of the complete denaturing of alcohol


1.4 Commission General Objective 9: "A Stronger Global

Actor"

Specific objectives 9.1 to 9.3 (contributing to H2020 Specific Objective 17 and to

EURATOM Research & Training Programme Specific Objectives 9, 10, 11, 12 and 13):




(Specific objective 9.1) Global Safety and Security

(Specific objective 9.2) International Cooperation and Development

(Specific objective 9.3) Associated and Neighbourhood Countries

In an increasingly connected, contested and complex world, the coherence of the EU’s

external action and the Commission's ability to use all available instruments consistently

are becoming ever more important. Challenges such as migration, access to resources,

and climate change call for an effective international presence of the EU. This is all the

more essential considering that few of the EU's internal policy objectives can be met in

isolation of their external context. The EU should also take every opportunity to advance

its humanistic values on the global stage.

As in previous years, the JRC is taking an active role in supporting the EC as a stronger

global actor by contributing to a significant variety of activities in areas such as global

safety and security, crisis management, disaster-risk reduction, and the monitoring of

natural and man-made hazards.



- JRC tools support EU Commitments to address humanitarian crises

- JRC and international partners join forces to assess food insecurity

- From food security to energy security in sub-Saharan Africa

- Support to strengthening technical capacities in nuclear safety and security at

European and international levels

- Enhancement of both EU Member States and international partners capabilities in

the area of strategic trade control

- Launch of the multi-temporal Global Human Settlement Database

- Mapping long-term global surface water occurrence

- Satellite images reveal full extent of destruction following Italy’s earthquake


1.5 Commission General Objectives 1, 3, 4 and 9

Specific objective 107: In order to ensure the most relevant and timely scientific support

to the European policy-making, the JRC will effectively and efficiently coordinate its

activities related to the management of the JRC WP cycle, of the relations with policy DGs

and other policy and scientific stakeholders and knowledge management.

In 2016, the achievements in the area of policy support coordination were numerous.

The JRC Work programme 2017-2018 was elaborated and, as an important element of

quality control and priority setting, the draft Work Programme was scrutinized by the Ex-

ante assessment, the JRC's annual internal ex-ante evaluation exercise, complementing

the internal ex-post Productivity and Impact Evaluation (PRIME).

IT integrated support to the Work Programme has been strengthened through a number

of initiatives increasing effectiveness and efficiency (see chapter 2.6 for more details).

Besides the management of the planning, execution, reporting and evaluation cycle of

the work programme, the JRC also strengthened links with partner DGs, a few examples

are cited hereunder.

Regarding the Sustainable Development Goals (SDGs), the JRC is mapping all related

Commission initiatives and reports/assessments to prove online access to information to

all EU citizens and other external stakeholders. There has also been ongoing work in

terms of setting up a Community of practice for the Commission to break the sectorial

silos.

Regarding the European Development Days (EDDs) the JRC has contributed as every

year to give visibility to JRC activities supporting development cooperation but also

building capacity of Young leaders from developing countries and other stakeholders by

organising Policy labs and organising a High level panel on migration and development

together with the Parliament.

In 2016, the Modelling Inventory and Knowledge Management System (known as

MIDAS: an inventory of models used by the Commission for policy support) has been

extended from a JRC tool to a Commission-wide tool.

Two important initiatives related to knowledge management and the European Semester

have been launched (details in chapter 2.6 on increasing efficiency).

The JRC has also reinforced inter-institutional engagement with the EP and the

Committee of Regions (COR), as well as the EU Presidencies (Slovakia). The JRC flagship

initiatives Science meets Parliaments/Regions broadened the scope of engagement with

the EP and national parliaments, as well as with the COR, enjoying international

recognition.

Cooperation with key partner countries and international organisations was further

strengthened through the development of structured collaboration (in the non-nuclear

area) with key partner countries and international organisations.

On 31 March 2016, a new Strategic Approach to the JRC Education and Training was

approved.

7 SO10 and SO 11 relate to the following four Commission General objectives: 1 - A New Boost for Jobs,

Growth and Investment; 3 - A Resilient Energy Union with a Forward-Looking Climate Change Policy; 4 - A Deeper and Fairer Internal Market with a Strengthened Industrial Base; 9 - Europe as a Stronger Global Actor


In order to allow best use of JRC Research Infrastructures (RI), an approach on their

opening up to the public was developed and approved.

Specific objective 117: To ensure the highest quality of its policy support, the JRC will

effectively and efficiently maintain scientific excellence in its core competences

70% of JRC scientific publications are published in peer-reviewed journals and

proceedings, an indicator value exceeding its target; 45% of JRC's peer-reviewed articles

are published in the top 10% most cited journals thereby exceeding the set target; and

72.3% of JRC's peer-reviewed publications result from collaborations with scientists from

other organisations, thereby meeting the set target range. Regarding international

collaborations, 20.5% of JRC's peer-reviewed publications are co-authored with

organisations from countries outside the European Research Area. The latter indicator is

lower than in previous years, but still within the range of fluctuation.

Moreover, with nearly 700 peer-reviewed publications (listed in SCI-e and SSCI)8, the

JRC is well in line with its targets achieving the JRC objectives under Horizon 2020.

The indicators newly introduced in the JRC SP 2016-2020 result from discussions in the

context of an IAS audit.

8 The indicator can be broken down into two sub-populations: one sub-population covers the indicator "Number

of peer-reviewed publications in high impact journals" (related to the JRC non-nuclear direct actions); another sub-population represents the indicator "Number of peer-reviewed publications" (related to the JRC nuclear direct actions). These two breakdowns are used in the Programme Statements


2. ORGANISATIONAL MANAGEMENT AND

INTERNAL CONTROL

This section answers to the question how the achievements described in the previous

section were delivered by the JRC. This section is divided in two subsections.

The first subsection reports the control results and all other relevant information that

support management's assurance on the achievement of the financial management and

internal control objectives. It includes any additional information necessary to establish

that the available evidence is reliable, complete and comprehensive; appropriately

covering all activities, programmes and management modes relevant for the JRC.

The second subsection deals with the other components of organisational management:

human resources, information management, external communication and infrastructure.

2.1 Financial management and internal control

Assurance is an objective examination of evidence for the purpose of providing an

assessment of the effectiveness of risk management, control and governance processes.

This examination is carried out by management, who monitors the functioning of the

internal control systems on a continuous basis, and by internal and external auditors. Its

results are explicitly documented and reported to the Director-General. The reports

produced are:

- Assurance Statements from Sub-delegated Authorising Officers;

- The reports from Authorising Officers in other DGs managing budget appropriations in

cross-delegation;

- The contribution of the Internal Control Coordinator (ICC), including the results of

internal control monitoring at DG level;

- The reports of the Ex-post supervisory controls performed on a sample of the JRC's

financial and procurement transactions;

- The limited conclusion of the internal auditor on the state of control, and the

observations and recommendations reported by the Internal Audit Service (IAS);

- The observations and the recommendations reported by the European Court of

Auditors (ECA).

These reports result from a systematic analysis of the evidence available. This approach

provides sufficient guarantees as to the completeness and reliability of the information

reported and results in a complete coverage of the budget delegated to the Director-

General of the JRC.

This section reports the control results and other relevant elements that support

management's assurance. It is structured into (a) Control results, (b) Audit observations

and recommendations, (c) Effectiveness of the internal control system, and resulting in

(d) Conclusions as regards assurance.


2.1.1 Control results

This section reports and assesses the elements identified by management that support

the assurance on the achievement of the internal control objectives9. The JRC's

assurance building and materiality criteria are outlined in the AAR Annex 4. Annex 5

outlines the main risks together with the control processes aimed to mitigate them and

the indicators used to measure the performance of the control systems. Annex 10

provides extensive reporting on the components of financial management and internal

control.

The JRC finances its research activities through the voted budget and supplementary

credits as presented in the below table detailing the JRC's financing sources for 2016.

In addition, the JRC finances its research activities through the following activities:

• Contractual activities (formerly called competitive activities), in line with the

Council Decision C126 of 26 April 1994 on the role of the JRC that requires

that additional revenue be generated through contractual activities (up to 15%

of the institutional budget10). The reader is referred to Annex 10.3 for more

information on the JRC's 'Revenue Operations'.

• Scientific support activities to other Commission services may be implemented

by means of 'Cross-sub-delegations' under which the JRC receives the right to

use budgetary resources of other Directorates-General and Services of the

Commission. The reader is referred to Annex 10.1 for more details on Cross-

sub delegations and Co-delegations.

9 Effectiveness, efficiency and economy of operations; reliability of reporting; safeguarding of assets and

information; prevention, detection, correction and follow-up of fraud and irregularities; and adequate management of the risks relating to the legality and regularity of the underlying transactions, taking into account the multiannual character of programmes as well as the nature of the payments (FR Art 32).

10 The institutional budget means "budget for JRC (direct actions) under the Framework Programme for

Research"


ABB Activities Description Payment appropriations

(in EUR)

10 01 and 10 02 Horizon 2020 (2014-2020) - The EU Framework Programme for Research and Innovation

261 141 820

10 01 and 10 03

Euratom (2014-2018) - Research and Training Programme of European Atomic Energy Community complementing the Horizon 2020 Framework Programme

110 303 863

10 05

Decommissioning - The Decommissioning Programme pursuant to Article 8 of the Euratom Treaty

20 850 000

EFTA States Contribution

2 311 326

Voted Budget (total of above 4 headings) 394 607 009

External assigned revenue

Supplementary Credits from Association Agreements to H2020 and Euratom

9 946 488

Contractual Income 88 789 344

Internal assigned revenue 4 137 248

Co- and Cross-delegations received11

Co-delegations 10 970 367

Cross delegations

13 422 415

Grand Total Financing sources 2016 in payments1213 521 872 871

Table 2.1-1: Financing sources for 2016

Table 2.1-2: Financing sources in payment appropriations:

In 2016, the JRC had EUR 20 850 000 (representing 4% of its total financing sources in

11 Details on co and cross-delegations can be found in Annex 10.1

12 This total does not include appropriations carried over from previous exercises nor the HFR appropriations.

13 This total includes the salary budgets of the JRC staff (officials, contract staff and SNEs).

75%

19%

1%

5%

Voted Budget (incl.

EFTA)

External assigned

revenue

Internal assigned

revenue

Co- and Cross-

delegations

received


payments) allocated to Decommissioning activities. The JRC's decommissioning and

waste management (D&WM) programme was started in 1999 under the coverage of

COM(1999)114 "Communication from the Commission to the European Parliament and

the Council – Historical liabilities resulting from nuclear activities carried out at the JRC

under the Euratom Treaty – Decommissioning of obsolete nuclear installations and waste

management". As also explained in Annex 13 of this report, this programme aims to

dismantle former, obsolete EURATOM nuclear installations (historical liabilities) so as to

plan for (and execute in the future) the long-term dismantling of installations which are

still in use (future liabilities). Four JRC sites are involved i.e. Ispra, Karlsruhe, Petten and

Geel.

During 2016, the JRC received cross sub-delegated authority to use the budgetary

resources of other Directorates General and services of the Commission. Such

authorisations are linked to specific research projects or actions. The JRC has also

provided sub-delegations to other DGs of the European Commission. In addition, the JRC

has put in place Horizontal and Vertical co-delegations14 (art. 3.2 of the Internal Rules)

with other Directorate Generals of the European Commission. The services and amounts

concerned for sub-delegations (both cross and co-delegations) are summarised in Annex

10.1 to this report. Being a Commission service itself, the JRC is required to implement

the appropriations subject to the same rules, responsibilities and accountability

arrangements and therefore payments related to the sub-delegations received are

subject to the same financial circuits and controls in place. Statements of assurance on

the effective and sound use of these funds were received or provided to the Directors-

General concerned. Around 58% of the JRC's financing sources is dedicated to staff

costs. It is important to note that the salary payments are authorised and carried out by

the Paymaster's Office (PMO) as part of Vertical co-delegations.

Operational activities

All JRC's operational activities, both expenditure and revenue, are carried out under

direct management mode which has been assessed as having a relatively low inherent

risk. The risks are effectively mitigated by means of controls as detailed in Annex 5.

The JRC carries out its expenditure operations through procurement operations. An

internal control template (ICT) covering JRC's procurement is available in Annex 5 of this

AAR. The type of procurement procedures carried out by the JRC during 2016 is

described in Annex 10.2.

The JRC has a mandate to carry out revenue generating operations through contractual

activities (formerly called competitive activities), which may be defined as the provision

by the JRC of scientific and technical services to other bodies both within the European

Institutions and for third parties. Annex 10.3 provides details on the JRC's mandate, the

type of contractual contracts and information on the contracts signed during 2016.

The additional income generated through contractual activities is used for purchasing

scientific equipment and services, hiring temporary staff, and for financing part of the

JRC's infrastructure used for these tasks. An ICT covering the JRC's income from

contractual activities is available in Annex 5 of this AAR.

The financial circuits in the JRC15 are based on the "four eyes principle", which ensure

that, before any operation is authorised, all aspects of the operation (both operational

and financial) are verified by at least one member of staff other than the person who

14 In accordance with Art. 3.2 of the Internal Rules (Decision C(2015) 1423 final of 05/03/2015 on the Internal Rules on the implementation of the general budget of the European Union (European Commission section) for the attention of the Commission department)

15 JRC Financial Circuits and Segregation of Duties (Ref. Ares(2015)3238388)


initiated the operation. The JRC has 3 types of financial circuits models in place which

are described in detail in Annex 10.4 of this report. The type of financial circuits chosen is

determined by the nature of the financial transaction which is undertaken, as well as by

geographical considerations. Circuit 1 is the model which is used for the majority of

transactions at the JRC, in which there is a clear segregation between the operational

and financial roles, respectively, and financial agents are hierarchically independent from

the authorising officer. Transactions relating to decommissioning, scientific activities and

income-generating activities fall under the financial circuit 1. In any event, all staff

having the role of financial agents are based in the Financial Units of the Resources

Directorate.

The main indicators and/or conclusions on each control objective for the JRC's

operational activities are summarised in the following overall conclusion table:

Activity Legality &

Regularity

Cost-Effectiveness

of controls

Anti-Fraud

Strategy

(AFS)

Other control

objectives:

Safeguarding

of assets

Procurement

in direct

management

mode

Average error

rate16 below

0.5%

Positive conclusion

(Costs/total

payments

executed =

6.56%)

Area covered

by the AFS

Positive

conclusion

Revenue

Average error

rate below

0.5%

Positive conclusion

(Costs/total

contractual project

proposal =

0.36%)

Area covered

by the AFS

Positive

conclusion

Table 2.1-3 Overall conclusion table

Coverage of the Internal Control Objectives and their related main

indicators

2.1.1.1. Control effectiveness as regards legality and regularity

The JRC has set up internal control processes aimed to ensure the adequate

management of the risks relating to the legality and regularity of the underlying

transactions, taking into account the multiannual character of programmes as well as the

nature of the payments and revenue concerned.

The control objective is to ensure that the JRC has reasonable assurance that the total

amount of any financial operation authorised during the reporting year, which would not

be in conformity with the applicable contractual or regulatory provisions, does not exceed

2% of the authorised payments concerned. In order to reach this conclusion, the JRC

reviewed the results of the key controls in place (as described below). For each item,

materiality is assessed in accordance with Annex 4.

The main risks together with the control processes aimed to mitigate them and the

indicators used to measure the performance of the control systems, are outlined in

Annex 5.

16 For the estimation of the Average error rate the reader is referred to Table 2.1.1.1-2


Procurement in direct management mode

Financial management and control of 'Procurement in direct management mode' (Annex

5 ICT N°1) is grouped around three main stages: 1) Procurement (from the assessment

of needs to the selection of the suppliers - award decision), 2) Financial transactions

(from establishing the financial commitment to payment and contract monitoring) and 3)

Supervisory measures (including ‘ex post’ controls and management checks). In addition

to the controls performed during the financial circuits, the JRC has made use of five main

supervisory measures (including associated indicators) to assess the legality and

regularity of its work:

• Exception reporting,

• The Public Procurement Advisory Group,

• Accounting controls,

• Ex-Post Supervisory controls,

• The Assurance Statements from Sub Delegated Authorising Officers.

Exception reporting

Control overrides or deviations from standard policies and procedures are tracked and

recorded as reports in the ‘register of exceptions’. When signalling an exception17 or a

non-compliance event18, managers are required to report on any envisaged corrective

measures and/or follow-up actions. The follow up of the exceptions and other non-

compliance events is part of the regular reporting of the authorising officers by sub

delegation to the authorising officer by delegation. The 'register of exceptions' is

regularly reviewed to determine whether the frequency or the nature of the exceptions

registered should prompt a revision of the JRC's procedures.

In total 85 exceptions and non-compliance events were recorded in the central register in

the JRC in 2016. Only 15 of these were classified as exceptions, being the majority non-

compliance events, i.e. errors. The exceptions were linked to deviations from standard

financial and procurement procedures which cannot be directly associated with a material

loss. They were mainly associated with decisions to deviate from the original contract

provisions i.e. extension of contract duration or derogation to procedures. Decisions

taken by the management which led to exceptions were justified in terms of operational

objectives, e.g. business continuity. The non-compliance events were in their vast

majority associated with saisine a posteriori situations where the budgetary commitment

was made after the legal commitment.

To put the exception reporting into context, the JRC dealt in 2016 with 30 798

transactions and most of them were payments: 23 872. The exceptions and non-

compliance events amount to 0.28% of the total number of transactions, meeting the

target set in the Management Plan (less than 1% of transactions subject to exception).

The reporting year showed a decrease of 6% in the number of non-compliance events

registered.

The Public Procurement Advisory Group (PPAG)

The Public Procurement Advisory Group (PPAG) is a consultative body providing support

for the correct application of tendering procedures. It is regarded as a key ex-ante

control for the JRC which ensures the respect of the procurement principles. The PPAG

must be consulted with regard to procurement files for high value contracts

(≥ EUR 500 000) and for some negotiated procedure contracts based on Article 134 (1)

RAP. In addition, contracts between EUR 60 000 and EUR 500 000 and contracts deriving

from some negotiated procedures (for additional services/works, repetition of similar

17 An exception constitutes a conscious decision to act against the procedures. 18 A non-compliance event may be detected after the event, when the rules have already been broken

and it generally originates from errors or weaknesses in the control system.


services/works, additional supplies and for all cases based on Articles 135 (1), 136a RAP

and 136 (1) (a) and (b) RAP are also submitted to the PPAG for advise, on the basis of a

sampling system using a risk-based method.

In 2016, 78 files were screened by the PPAG, representing a value of approximately EUR

205 Million. In the vast majority of cases, 75 files (96%), this scrutiny resulted in a

favourable opinion being issued, which confirms the positive trend in the past years and

the level of quality of the JRC's procurement procedures submitted to the PPAG.

There were, however, 3 files for which an unfavourable opinion was issued. The

unfavourable opinions were associated to weak definition of the technical specifications,

minimum requirements not met, potential distortion of competition and potential

problems which might arise during the contract execution. The errors are generally

rectified by the cancellation and re-launch of the procedure based on the specific

recommendations from the PPAG and indeed 2 procurement procedures were re-

launched upon recommendation of the PPAG. However, for 1 case out of the 3, the

Authorising Officer considered that none of the PPAG remarks were indicative of a

significant legal or reputational risk and decided to overrule the PPAG's opinion by

awarding the contract by means of a "passer-outre". There were as well 4 files which

were suspended for further analysis. In all the 4 cases the suspended opinions became

favourable ones as final outcome.

Accounting Controls

The main aim of accounting controls is to assure the quality and reliability of the

accounts and underlying transactions through methodical checks on the accounting

records (data) and timely communication and correction of the errors. The controls

carried out in 2016 have followed the Annual Accounting Quality Plan. The controls

performed are additional to the ex-ante controls performed by Financial Verifying Agents

and Sub Delegated Authorising Officers on each transaction, in compliance with the

Financial Regulation.

The controls on the General Ledger (GL) account of invoices were performed on a

sample19 of payment transactions equivalent to 66.4% of the monetary value of the

invoices and internal documents registered by the JRC. The total number of accounting

errors is 252, i.e. 1.69 % of the sample. These errors were of an accounting

reclassification nature and did not lead to irregular payments. Considering that all errors

found have been corrected, the overall estimated error rate is 1.16 %, thus confirming

the reliability of the JRC's accounts.

Two recommendations raised in the context of DG BUDG's validation of local systems

report are still open, which however do not have an impact on the reliability of the

accounts.

Ex-post Supervisory Controls

As part of its control strategy, to determine whether there had been material losses (e.g.

due to errors) and whether financial rules and procedures were respected, the JRC

periodically carries out checks on the accuracy and regularity of its ex-ante controls, via

ex-post controls on a sample of financial transactions20.

In 2016, ex-post controls were carried out on 120 sampled payments21 and 59 associated

19 Using a risk-based sampling methodology.

20 Using a representative stratified sampling methodology. 21 Includes payments carried out by JRC using cross sub-delegations received and excludes payments

done by the Paymaster's Office (PMO) (mainly related to salaries and business travel), and 'Hors

Budget' Payments i.e. payments made to consolidate accounting data.


procurement files related to legal commitments (including specific contracts on

framework contracts) entered in the course of the year. The procurement procedures are

also subject to the ex-ante verification of the PPAG and during the reporting year

procurement procedures of approximately EUR 205 Million were screened by the PPAG.

Whilst a variety of formal errors were noted, no systematic errors or weaknesses in the

JRC's control system were observed and no procurement issues were identified. The

findings relate mainly to a lack of available supporting documents and saisine a posteriori situations where the budgetary commitment was made after the legal commitment. As a

result no quantifiable errors were detected (detected error rate of 0%), confirming the

trend of the past years and indicating that there are no issues concerning the JRC's

procurement and payments activities. The ex-post findings have been discussed with the

units concerned and an agreement on both the findings and the corrective actions was

reached.

Details of the 2016 ex-post controls exercise can be found in the table below.

Sampled

Transactions

Sample size:

number

Sample

size: value

(EUR)

% of total

value of

transactions

Detected error

rate (% of total)

Payments 120 21 552 994 10.13% 0%

Procurement 59 4 763 032 2.29% 0%

Table 2.1.1.1-1 Results of 2016 ex-post controls

Since the detected error rate is 0%, the JRC estimated its Average Error Rate (AER)

by taking a most conservative and prudent approach and estimating it to be at 0.5% i.e.

using the European Court of Auditors' (ECA) average error rate for administrative

expenditure.

The Assurance Statements from Sub Delegated Authorising Officers

Assurance statements were provided by the JRC's sub delegated authorising officers in

compliance with the reporting requirements detailed in the "Charter of tasks and

responsibilities of authorising officers by sub delegation"22. The 120 officers concerned

include all of the JRC Directors, most of the Unit Heads and other key decision-making

staff. All officers provided an assurance statement and all of them have assured the

Director General that in exercising their duties:

• they have effectively managed the risks associated with their activities;

• they were not aware of any matters of importance which might compromise the sound

management of appropriations or prevent the attainment of objectives;

• they have filed under their authority exceptions/non-compliance events linked to not

respecting standard procedures, rules and regulations, if any;

• a request for written confirmation23 has never been formulated;

• they have not noted incidents which could damage the reputation of the organisation.

Almost 80% of the officers have participated in the trainings in internal control and risk

management, and the rest have committed to participate during 2017. Only 8 officers, 3

of whom newly appointed, have not yet participated in the financial training on the

expenditure lifecycle and the majority are expected to participate in 2017.

During 2016, 11 authorising officers ceased to act as such, out of whom 4 left the JRC (2

on retirement); 18 new were appointed. All provided their assurance statements in due

22 With particular reference to sections 4.1, 4.3 and 4.8. 23 In accordance with the requirements of Article 66(8) of the Financial Regulation.


time. Out of the 32 staff members that declared taking up new functions and duties in

2016: 24 declared that they have received a complete report in writing on the situation,

risks and problems related to their functions and 8 reported not to have received such a

formal handover report, of whom 7 took up an entirely new function, so there was no

predecessor. The 1 officer who did not receive a formal handover note was however

briefed orally about his assignment.

Revenue operations through competitive activities

The JRC generates income through providing, under contract, scientific and technical

services to customers both within and outside the European Institutions. All income and

expenses for contractual activities are subject to ex-ante controls and to the JRC financial

circuits, involving a segregation of duties between the initiating and verifying functions.

Financial management and control of the JRC's revenue operations through contractual

activities (Annex 5 ICT N°2) is grouped around three phases: 1) Contract proposal

(assessment and valuation of proposal), 2) Contract preparation (from signature of

contract to forecast of revenue24) and 3) Contract implementation (including financial

management of the contract).

Revenue operations are also subject to the same legality and regularity indicators which

are applied to payment and procurement transactions (as mentioned above under the

description on the Procurement controls), i.e. exception reporting, PPAG controls for

supplies/services procured for carrying out contractual activities, accounting controls, ex-

post controls on related payments and procurement, and the AOSD statements. None of

these controls unveiled errors with impact on compliance of the revenue transactions.

During 2016, as a result of the JRC's financial circuits, 14% of the forecast of revenue

transactions and 7% of recovery orders25 (i.e. invoices) have been subject to correction.

These errors did not materialise due to the effectiveness of the ex-ante controls carried

out. Approximately half of the corrections resulted following the JRC reorganisation i.e.

transactions corrected to reflect the new structure of the budget lines.

Support to Commission services is the main source of income and recovery orders issued

to these services are subject to verification and approval. Furthermore, the paying

Commission services can perform additional verification or audits on financial reports

submitted by the JRC. With respect to indirect actions an independent auditor verifies

the financial statements prior to submission for reimbursement. During 2016, the

independent auditor certified 16 financial statements submitted to the policy DGs, for a

total amount of EUR 11 million. None of these independent controls unveiled errors with

impact on legality and regularity of the revenue transactions.

According to the Financial Regulation, the appropriations inscribed for Administrative

Arrangements with other Commission Services are valid for 5 years. In 2016,

commitment appropriations of EUR 63 million have been generated. During the same

period EUR 56.8 million payment appropriations have been inscribed. The actual costs

incurred for the ongoing administrative arrangements in 2016 are estimated at EUR 57.2

million. The remaining appropriations in commitment and payments have to be used

within the next 4 years and any unspent appropriation will be cancelled at the beginning

of 2021. The JRC monitors the annual utilisation of these funds through a specific

reporting tool.

It can be concluded that the controls carried out on the contractual activities contribute

to the legality and regularity of the JRC's revenue operations.

24 Forecast of Revenue (FOR) transactions are estimate of amounts receivable in the context of the JRC's

contractual activities, resulting in provision of commitment appropriations (FR Art. 183.2).

25 The term 'recovery orders' for the JRC contractual activities refers to the issuing of invoices to its customers and it is not related to the recovery orders issued to recover erroneous amounts due.


Conclusion on the assessment as regards legality and regularity

In conclusion, based on the analysis of the results of the above-mentioned control

sources, no significant weakness has been unveiled which could have a material impact

as regards the legality and regularity of the procurement and revenue operations.

Therefore, it is possible to conclude that the internal controls systems implemented by

the JRC provide sufficient assurance to adequately manage the risks relating to the

legality and regularity of the underlying transactions.

In the context of the protection of the EU budget, at the Commission's corporate level,

the DGs' estimated overall amounts at risk and their estimated future corrections are

consolidated.

For the JRC, the estimated overall amount at risk for the 2016 payments made is EUR

2.4 million, (despite the fact that the detected error rate was 0%, the JRC estimated its

Average Error Rate (AER) to be 0.5%, the latter being the ECA's average error rate for

administrative expenditure). This is the AOD's best, conservative estimation of the

amount of relevant expenditure, including the salary payments authorised by the

Paymasters' Office, during the year (EUR 476 million26) not in conformity with the

applicable contractual and regulatory provisions at the time the payment is made.

This expenditure will be subsequently subject to ex-post controls and a sizeable

proportion of the underlying error will be detected and corrected in successive years. The

conservatively estimated future corrections27 for those 2016 payments made are EUR

0.09 million. This is the amount of errors that the JRC conservatively estimates to

identify and correct from controls that it will implement in successive years.

The difference between those two amounts leads to the estimated overall amount at risk

at closure of EUR 2.3 million28.

Details of the JRC's estimated overall amount at risk at closure and estimated future

corrections can be found in the table 2.1.1.1-2 below.

26 The authorised payments of JRC amount to EUR 213 million, which is different from the payments shown in

Annex 3 of EUR 476 million due to the fact that the latter value includes payments carried out by JRC using cross sub-delegations received and also payments done by the Paymaster's Office (PMO) (mainly related to salaries and business travel), and 'Hors Budget' Payments i.e. payments made to consolidate accounting data.

27 Even though based on the 7 years historic average of recoveries and financial corrections (ARC), which is the best available indication of the corrective capacity of the ex-post control systems implemented by the DG over the past years, the AOD has adjusted this historic average for coding errors.

28 The estimated overall amount at risk at closure, when excluding salary payments done by the PMO amounts to EUR 1.03 million.


JRC Payments made in 201629

(EUR)

Minus New prefinancing

(EUR)

Plus Cleared prefinancing

= "relevant expenditure" for 2016

(EUR)

Average Error Rate (weighted AER; %)30

estimated overall amount at risk at payment

(EUR)

Average Recoveries and Corrections (adjusted ARC; %)

estimated future corrections(EUR)

estimated overall amount at risk at closure (EUR)

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)

Programme Budget line,

or other relevant level

As per ABAC DWH BO report on

prefinancing

As per ABAC DWH BO report on

prefinancing

= (2)-(3)+(4) Detected error rates, or

equivalent estimates

= (5) x (6) based on 7Y-avg historic

ARC (as per ABAC DWH BO

report on corrective capacity)

= (5) x (8)

= (7) – (9)

Total – excluding

salary payments

authorised by PMO

212 834 869

(1 070 915)

2 462 821

214 226 775

0.5%

1 071 134

0.02%

42 845

1 028 288

Total - including

salary payments

authorised by PMO (As per AAR annex 3,

table 2)

475 656 771

(1 070 915)

2 462 821

477 048 677

0.5%

2 385 243

0.02%

95 410

2 289 833

Table 2.1.1.1-2 Estimated overall amount at risk at closure

29 The authorised payments of JRC amount to EUR 213 million, which is different from the payments shown in Annex 3 of EUR 476 million due to the fact that the latter value includes

payments carried out by JRC using cross sub-delegations received and payments done by the Paymaster's Office (PMO) (mainly related to salaries and business travel), and 'Hors Budget' Payments i.e. payments made to consolidate accounting data.

30 Since the detected error rate is 0%, the JRC estimated its Average Error Rate (AER) by taking a most conservative and prudent approach and estimating it to be at 0.5% i.e. using the ECA's average error rate for administrative expenditure.


2.1.1.2 Cost-effectiveness and efficiency

Based on an assessment of the most relevant key indicators and control results, the JRC

has assessed the cost-effectiveness and the efficiency of the control system and reached

a positive conclusion.

The principle of efficiency concerns the best relationship between resources employed

and results achieved. The principle of economy requires that the resources used by the

institution in the pursuit of its activities shall be made available in due time, in

appropriate quantity and quality and at the best price. This section outlines the indicators

used to monitor the efficiency of the control systems, including an overall assessment of

the cost-effectiveness of controls.

Procurement in direct management mode

The JRC has produced an estimation of the costs of control of the three main stages

related to 'Procurement in direct management mode'31. The criteria for the calculation

and the indicators used are shown in in Annex 5 ICT N°1.

However, since a quantitative estimation of the volume of errors prevented and detected

is not available, it is not possible to quantify the related benefits, other than the EUR 535

187 recovered as a result of these controls (Annex 3, Table 8). The main benefit is that

the controls performed ensure that errors are detected and corrected and that potential

litigations or contestations from tenderers are kept to a minimum.

In consequence, as it is not possible to determine the cost-effectiveness of controls by

comparing costs with benefits, it is necessary to consider the efficiency indicators

retained. To do so, the JRC has defined efficiency measures for the controls associated

with the three main stages:

- For Procurements, an estimated EUR 5 981 582 were invested in controlling 392

procurement procedures for contracts with a total value of EUR 283 022 229.

Thus 2.11% of the total contract value was dedicated to control. This covers all

types of procurement, ranging from low-value contracts, for example purchase of

low-value laboratory equipment, to high value extremely complicated contracts

such as in the area of satellite images. The cost of control on procurement has

decreased by 5.96% compared to last year despite an increase in the number of

procurement procedures closed during the year. The decrease is mainly due to the

fact that the contract value of the procurement procedures closed during the year

was lower and a certain number of procedures were of a less complex nature.

The procurement procedures are to a large extent a regulatory requirement which

cannot be curtailed. In addition, the JRC considers that the necessity of these

controls is undeniable, because as shown by the risks outlined in annex 5 (ICT

N°1), a significant proportion of the appropriations would be at risk in case they

would not be in place.

- For financial circuits an estimated EUR 7 897 832 were invested in controlling 30

798 financial transactions worth EUR 212 834 86932. Thus 3.71% of the total

payment amount was dedicated to control. Despite the increase of 2.98% in the

average cost of staff, the overall cost invested in controlling financial transactions

has decreased by 17.17% which is complemented by the fact that the number of

financial transactions decreased by 9.97% compared to last year. Each financial

31 The costs of control have been estimated using DG Budget's guidance on the minimum set of cost-efficiency

indicators. 32 Excluded: payments done by the Paymaster's Office (PMO) (mainly related to salaries and business travel),

and 'Hors Budget' Payments i.e. payments made to consolidate accounting data.


transaction costs an estimated EUR 256, which is 8% less when compared to

2015.

- 93.3% of the invoices received in 2016 were paid within the contractual time

limits according to the financial regulation, a value slightly lower than the 2015

and 2014 payment delays rate. The decrease compared to the 94% of the last

two years is mainly due to the JRC's reorganisation which took place at the end of

June and which had a significant impact on the related budget lines in July 2016.

Nonetheless constant efforts are made to ensure that the vast majority of the

payments are made within the legal time limits.

- For supervisory measures an estimated EUR 89 936 were invested in controlling

179 financial transactions worth EUR 26 316 026. Thus 0.34% of the total values

of transactions checked ex post were dedicated to control. Each transaction or

procedure checked ex post costs an estimated EUR 502, which is in line with the

cost of a transaction or procedure checked last year and is considered as

reasonable.

The overall cost of control related to 'Procurement in direct management mode' in 2016

was EUR 13 969 350, which represent 6.56% of the total payments executed by the JRC

during the year. The overall cost of control decreased by 12.54% compared to 2015

which is complemented by the decrease of 22.13% in the value of payments despite the

increase of 2.98% in the average cost of staff.

The benefits of control in non-financial terms cover: rejection of unjustified purchases,

better value for money, deterrents efficiency gains, limiting the risk of litigation and

fraud, respect of contractual provisions, system improvements and, as mentioned above,

compliance with regulatory provisions.

Revenue operations through contractual activities

The costs of controls incurred for the three main phases of the JRC's revenue operations

through contractual activities have been estimated. The criteria for the calculation and

the indicators used are shown in in Annex 5 ICT N°2. As mentioned in the previous

section, it is not possible to quantify all of the costs and benefits of controls. Estimating

the intangible benefits is particularly problematic. The JRC has, nonetheless adopted the

following efficiency indicators for the controls associated with the three stages of the

revenue process:

- For the contract proposal phase, an estimated EUR 42 435 were invested in

assessing the risk and reviewing 246 contractual project proposals with a total

value of EUR 88 800 235. Thus 0.05% of the total contractual project proposal

value was dedicated to carrying out a risk assessment and management review,

with a cost of EUR 173 per proposal. For Support to Commission contracts an

additional 0.06% of the total contractual project proposal value is incurred for

high level management review. The Third party work (TPW) type of contracts

incurred an additional 0.02% of the total contract value for requesting up-front

payments. The latter additional cost has led effectively to no default on TPW

contracts.

- For the contract preparation phase, an estimated EUR 21 218 were invested in

reviewing the contract wording and ensuring these are in line with standard

clauses, which represents 0.02% of the total value of the signed contractual

contracts with a cost of EUR 86 per contract. For the financial circuits carried out

on forecasting of revenue, an estimated EUR 31 826 was invested in controlling

246 forecasts of revenue (FORs) worth EUR 88 800 230. Thus 0.04% of the total

forecast of revenue amount was dedicated to control with an estimated cost of

EUR 129 per FOR transaction.

- For the contract implementation phase, an estimated EUR 89 916 were invested in

monitoring budget consumption of the contractual contracts and reviewing the

recovery orders (ROs) issued, which represents 0.11% of the RO values. The

contractual cashing indicator (as a percentage of the institutional budget) has


increased from 18.87% of last year to 24.11%, which is significantly higher than

the target of 15% and clearly evidencing the efficiency of the controls performed.

An independent auditor carries out audits on Framework Programme (FP)

contracts with a reimbursable value higher than EUR 375 000. Each audit has a

fixed cost of EUR 1 500 and the total costs of the audits amounted to EUR 24 000

representing 0.21% of the value of contractual projects audited.

The overall cost of control related to 'Revenue operations from contractual activities' in

2016 was EUR 266 319, which represents 0.30% of total contractual project proposal

value for the year. The overall cost of control indicator has dropped from last year's

indicator value of 0.36%, despite the increase of 6% in the number of contractual project

proposals.

JRC considers that the necessity of the controls performed on revenue operations process

is undeniable, as they are a regulatory requirement. Furthermore, the JRC considers that

these controls are necessary in order to mitigate the risks outlined in annex 5 (ICT N°2).

The benefits of control in non-financial terms cover: accepting only project proposals

which have an acceptable level of risk, which are in line with the JRC work programme

and which meet customer expectations, sound financial management, deterrents

efficiency gains, limiting the risk of litigation, respect of contractual provisions, system

improvements and, as mentioned above, compliance with regulatory and research

programme provisions.

Conclusion on cost-effectiveness and efficiency

The JRC concludes positively on the cost-effectiveness and efficiency of the control

system after carrying out an analysis of the evolution of the efficiency and cost-

effectiveness indicators from 2015 to 2016, and took into account also the results

obtained in 2014.

The JRC will elaborate and implement the necessary measures to continue analysing the

evolution of these efficiency and cost-effectiveness indicators over time and/or to

compare them with relevant benchmarks. The differentiation and/or intensity of controls

depending on the type of transaction is also foreseen in the ongoing JRC's Finance and

Procurement Simplification action plan which will be implemented during the course of

2017 and beyond. This is in line with the requirements of Art.66.2 of the Financial

Regulation.

2.1.1.3 Fraud prevention and detection

The JRC has developed and implemented its own anti-fraud strategy (AFS) since 2013,

elaborated on the basis of the methodology provided by OLAF. The update of the JRC's

anti-fraud strategy will take place in 2017.

The implementation of the AFS and its complementary action plan is monitored regularly

throughout the year and reported to the JRC's Internal Control Coordinator (ICC). The

actions which have not been fully implemented will be taken into account in the JRC's

updated anti-fraud strategy. The update of the JRC's anti-fraud strategy has been

carried forward to 2017 due to internal resources constraints and other priorities. It is

important to note that the current action plan is still ongoing and monitored and as part

of the JRC annual risk assessment exercise, no new fraud risks have been identified.

In principle, the controls aimed at preventing and detecting fraud are similar to those

intended to ensure the legality and regularity of the transactions. Still, each year the

JRC assesses the risk of fraud in the context of its process-based risk management

exercise. Activities and operations that are assessed to be potentially vulnerable to a

higher risk of fraud are subjected to more in-depth monitoring and control.


The main focus of the action plan is on the reinforcement of the anti-fraud component in

the organisation's business processes and on an awareness-raising campaign, including

training, in the area of anti-fraud and ethics. During 2016 the awareness-raising

campaign included the aspect of 'scientific integrity' which features as a key value in the

JRC Strategy 2030.

As part of the annual assessment of the implementation of the Internal Control

Standards within the JRC, with respect to the ethical climate, the anti-fraud awareness of

staff was measured against a target of 4, using the rating scale of 1 for fully disagree to

5 for fully agree or equivalent. The results from the annual assessment demonstrated a

rating of 4.15 for all staff, 4.57 for management and 3.91 for staff (other than

management). Compared to last year, the 2016 the results evidenced an increase in the

anti-fraud awareness of 1.75% for all staff and 2.97% for staff (other than management)

and a slight decrease of 0.43% for management. The results clearly show a rather

positive evolution and impact of the anti-fraud and ethics awareness campaign ongoing

at the JRC.

During the reporting year, 5 cases were reported to IDOC out of which 3 were moved by

IDOC to OLAF for investigation and the other 2 are currently being assessed by IDOC but

do not have an impact on the JRC assurance. OLAF did not initiate any case concerning

the JRC.

In conclusion, the anti-fraud measures already in place, including the controls performed

through ex-ante and ex-post controls, did not identify any cases of fraud or potential

fraud in 2016.

2.1.1.4 Other control objectives: safeguarding of assets

The JRC is spread over 6 sites in 5 different Member States with a total number of fixed

assets of about 54 000 with a value of EUR 214 million (as reported in the JRC's Balance

Sheet in Annex 3, Table 4). The fixed assets are ranging from simple office furniture to

complex scientific and laboratory equipment, including nuclear facilities and buildings.

The following measures are put in place to counterbalance the main risks potentially

affecting the JRC sites, i.e. accidents, unauthorised access, intentional acts against safety

and security including against the protection of sensitive documents. Regular safety

inspections are being carried out on JRC sites regarding laboratory facilities and

hazardous materials, by the JRC itself, external consultants and visits by national

authorities. Organisational measures are implemented to ensure that access to JRC sites

and critical assets are controlled. Personal security clearances are issued to those staff

required to deal with classified information. Certification of laboratories and institutes to

internationally recognised quality management standards helps to offset risks and ensure

compliance with norms and regulations.

The JRC assets comply with the following criteria: a) acquisition value above EUR 420; b)

controlled by the JRC, c) expected to be used during more than one reporting period.

Items with an acquisition value below the EUR 420 threshold are booked as expenses in

the accounts. Nevertheless the JRC records them in the Inventory System (ABAC

ASSETS) in order to have control over sensitive items.

The organisation of asset management in the JRC is determined by the nature of the

activities. There is a management centre per operational site, having functions as

Inventoried Items Manager/Gestionnaire des Biens Inventoriés (IIM/GBI). Each site has a

Write-Off Committee that supervises the site asset management activities and issues an

annual activity report. The JRC asset manager and the JRC accountant provide support

and coordination to the operational sites and liaise with the Commission Services in

matters concerning asset management.

The regulations (ref. art. 250 of the RAP and art. 157 of the FR) stipulate that physical

localisation checks of the inventoried items shall be carried out at least on a three-year

basis, which is respected.


The JRC owns stock with a value of EUR 54 million (as reported in the JRC's Balance

Sheet in Annex 3, Table 4).

The JRC site in Geel produces reference materials for sale. A specific IT tool, PROFIT, is

used for the management of stock and sales of reference materials. The valuation of the

JRC stock is carried out, according to International Public Sector Accounting Standards

(IPSAS) rules at the net realizable value, which is estimated to be lower than the

production cost. The stocktaking in 2016 was carried out in accordance with the

approved sampling procedure using a method which was not subject to a finding from ECA during their Statement of Assurance (DAS) audits.

The JRC has a stock of nuclear fissile materials for research purposes in its sites in Geel,

Karlsruhe and Ispra. A dedicated accounting tool is used to ensure that that all

requirement of the Euratom agency are met and which guarantees the correctness of the stock movements of these materials.

The Central Workshop Store in Ispra manages a stock of raw-materials that is used in the

scientific laboratories and for site management purposes.

Based on an assessment of the controls in place on the safeguarding of the JRC's assets,

management considers that the control results are complete and reliable and that the

control objective is achieved.


2.1.2 Audit observations and recommendations

This section reports and assesses the observations, opinions and conclusions reported by

the auditors in their reports as well as the limited conclusion of the Internal Auditor on

the state of control, which could have a material impact on the achievement of the

internal control objectives, and therefore on assurance, together with any management

measures taken in response to the audit recommendations.

IAS and former IAC audits

During 2016, the IAS issued two audit reports: one on the Management of Intra-Muros

Contractors33 and one on Competitive Activities. A third audit was performed on IT

Security on JRC ICT Systems for which the audit report was issued in January 2017.

The 3 audits resulted into the formulation of 9 recommendations, out of which 4 were

rated as very important and no critical recommendations (Table 2.1.2-1). The JRC has

drawn up the relative action plans in order to address the auditors' recommendations.

The action plans for the 2 audits, 'Management of Intra-Muros Contractors' and 'IT

Security on JRC ICT Systems' were assessed favourably by the auditors. The action plan

to address the recommendations from the audit report on Competitive Activities is still

under discussion with the IAS.

The audit on the IT Security on JRC ICT Systems was concluded with the introduction

of 4 very important recommendations namely: Nr. 1) Management oversight of IT

Security; Nr. 2) IT security considerations built into the design of new IT systems as well

into the maintenance of existing systems; Nr. 3) Deployment of security reference

configurations and monitoring of new vulnerabilities and Nr. 4) Inventory of JRC IT

systems and their security dependencies. The JRC's milestones for reporting and close

coordination with the IAS were established. The IAS reported in its conclusions on the

state of internal control that the combined effect of these 4 very important

recommendations leads it to conclude that the controls currently in place do not provide

sufficient assurance that IT Security risks are adequately mitigated. The JRC has taken

the auditors' conclusion into serious consideration while preparing its action plan and

defined 28 precise actions in order to effectively and timely tackle the identified risks.

This action plan was endorsed by the IAS.

New Audits

Nr of Recommendations by Rating

Critical Very

Important Important

Management of Intra-Muros Contractors 0 0 1

Competitive Activities 0 0 4

IT Security on JRC ICT Systems34 0 4 0

Total 0 4 5

Grand Total 9

Table 2.1.2-1: Recommendations in new audit reports

33 The audit on Management on Intra-Muros Contractors was a corporate one which

included the JRC and other Commission services.

34 Finalised in January 2017


IAS Follow-up audits

During the reporting period the IAS performed follow-up audits on audits issued by the

former IAC (see tables 2.1.2-2 and 2.1.2-3). Below is an illustration of the most

important developments in the follow-up audits domain, specifically for those audits

having very important recommendations:

I) The audit on Nuclear Decommissioning and Waste Management Programme

(NDWMP) - Financial Aspects, encompassing all JRC nuclear decommissioning

activities, was issued by the former IAC in June 2015 and included 4 very important

recommendations, namely n° 1, 235, 3 and 5 and 2 important ones, n° 436 and 637.

During the follow-up performed by the IAS, recommendations numbers 2 and 4 were

assessed as fully implemented whereas recommendation number 5, considered as

partially implemented, was reopened and downgraded to "important". Recommendation

number 6 was closed as obsolete. Consequently there are 2 very important and 1

important recommendation still pending implementation:

N° 1) The auditors observed that delays in the Programme are the major cause of

financial risk and requested the JRC to coordinate an in-depth review of the

decommissioning budget. During the reporting period, the JRC set out a specific schedule

per site in order to review its Nuclear Decommissioning and Waste Management

Programme (NDWMP) Strategy of nuclear sites and the related budget, paying special

attention to the assessment of fixed costs and the improvement of estimates. The major

part of the budget estimates has already been concluded. More specifically: the budget

estimates for Geel and Ispra were finalised; the Karlsruhe budget review is ongoing and

is anticipated to be finalised by the end of first quarter 2017. For the site in Petten a full

review is anticipated by the end of 2017.

N° 3) In order to face the dwindling practical and regulatory support of the Italian

authorities to the programme development, senior management has been recommended

to design an action of internal fine-tuning of the relationship between the JRC and the

Italian authorities. A communication strategy to effectively improve interactions with

both authorities and stakeholders was defined in 2016, discussed during the 5th High

Level Steering Committee meeting and is currently being fine-tuned before official

endorsement.

N° 5) As human resources are essential for the long-term success of the NDWMP, the

JRC was advised to define a staffing strategy covering mid-term needs (5-10 years). The

staffing strategy for the Ispra site (the major nuclear JRC site) was completed. By the

end of 2016, the IAS reopened this recommendation by suggesting the extension of the

adopted strategy to the rest of the nuclear sites and downgraded the recommendation to

"important". A staffing strategy document covering needs and expected development at

all sites concerned with be finalised in 2017.

Finally, the IAS has announced in its audit planning for 2017 a new audit on NDWMP

implementation.

The actions taken so far ensure that the open recommendations do not have an impact

on the achievement of the internal control objectives.

II) The audit follow-up on the Intellectual Property Rights (IPR) concluded into

reopening one very important recommendation namely on the non-infringement of prior

existing copyrights or other IPR from third parties before the final approval for

publication. In order to achieve a more robust check on non-infringement of intellectual

property rights on articles to be published, as suggested by the IAS, the JRC is in the

process of introducing an explicit requirement for checking the IPR issue by the approval

35 Procurement delays.

36 Analysis of future decommissioning liabilities on plans proposing investments in nuclear infrastructure.

37 JRC should clarify with Direzione Tecnica and Commissione Tecnologie Nucleari e Radioprotezione of UNI which requirements of the future standard 11510 are realistically achievable for the Ispra Site Nuclear Decommissioning Programme, on top of the existing regulatory requirements.


actors (combined with author's self-declaration already implemented) to be introduced in

the publishing procedure and in the supporting tool (PUBSY).

Consequently, this overdue very important recommendation does not have an impact on

the achievement of the internal control objectives.

III) The audit follow-up on Decommissioning: Risk and project management at the

Ispra site concluded that 2 recommendations out of which 1 very important should

reopen. The very important recommendation, assessed as partially implemented,

referred to the definition of a full strategy for guaranteeing a pool of qualified project

leaders, comprising a plan for their training and motivation, and ensuring adequate back-

ups. The requested remedial actions were implemented (training plan and the back-up

scheme) and the recommendation was submitted to the IAS for review.

Consequently, this reopened very important recommendation does not have an impact

on the achievement of the internal control objectives.

Overall, 14 follow-up audits were carried out by the IAS during 2016, half of which

concluded in closing all pending recommendations of these audits, thus 24

recommendations. Out of the 24 recommendations, 8 had been rated as very important.

Desirable recommendations were not reviewed.

IAS Follow-Up Audits resulting into closure Date of

issue

Nr of rec.

reviewed by

IAS

1. Review of Corporate Networks Oct. 2011 3

2. Assets Management March 2013 1

3. Business continuity May 2013 7

4. Management and sharing of scientific and

technical knowledge (incl. Decommissioning) June 2014 7

5. Third-Party Liability June 2014 1

6. Portfolio on Buildings Dec.2014 1

7. Safety and Security Oct. 2011 4

Total 24

Table 2.1.2-2: Follow-up audits resulting into closure

The other 7 audit follow-ups were conducted only on those recommendations that the

JRC reported as completed (Table 2.1.2-3). Out of the 34 reviewed recommendations 28

were deemed by the IAS to have been effectively implemented. Out of the 28 closed, 9

had been rated as very important. Desirable recommendations were not reviewed.

IAS Follow-Up Audits closing a

number of recommendations

Date of

issue

Nr of rec.

reviewed

by IAS

Nr of

closed rec.

by IAS

1. Intellectual Property Rights Jan.2013 8 7

2. Procurement management Nov. 2014 2 2

3. Document management

March

2014 6 6

4. Nuclear Decommissioning and Waste

Management - Financial Aspects June 2015 3 2

5. SPP/ABM Oct. 2015 3 1

6. Decommissioning – Risk and Project

Management at the Ispra site June 2012 8 6

7. Management of expert groups Nov.2012 4 4

Total 34 28

Table 2.1.2-3: Follow-up audits closing a number of recommendations


Consequently, at the end of 2016/beginning of 2017, 52 recommendations were closed

by the IAS as result of follow-up audits, thus more than 90% of the reviewed ones.

Implementation of action plans

As regards the implementation of a very important recommendation issued by the IAS in

October 2015 on Strategic Planning and Programming/Activity Based

Management (SPP/ABM), for which a complete follow-up has not been carried out yet,

a number of actions were/are being undertaken in order reinforce the quality control on

the SPP Cycle. In particular, the indicators system was centralised under one Unit and

indicator guidelines were drafted clarifying the roles and responsibilities of the process

owners and of the coordinating unit. The indicators set used in the planning documents

(SP/MP) has been modified in response to the IAS recommendation regarding the

consistency and completeness of indicators and targets (to the extent possible, taking

into account that the structure and content of the planning documents are largely

dependent on the SG standing instructions). Discussions with DG RTD were concluded

regarding the calculation of the indicator 'Number of peer-reviewed publications in high

impact journals' as recommended by the IAS.

This recommendation is expected to be implemented by the end of the first quarter of

2017 and therefore does not have an impact on the achievement of the internal control

objectives as the necessary remedial actions are being undertaken.

Conclusion

To conclude, based on all work undertaken by the IAS during 2016, the latter expressed

in its limited conclusion of the Internal auditor on the state of internal control that the

internal control systems audited are overall working satisfactorily although a number of

very important findings remain to be addressed in line with the agreed action plans (as

described above). As requested, particular attention has been given to the impact of the

delay observed concerning the 4 very important recommendations analysed above as I-

III (all of which overdue for more than 12 months from their original due date). As

described above, remedial actions have been undertaken by JRC management,

implementation of these action plans is ongoing and is regularly monitored. In addition,

particular attention is being given to the combined effect of the 4 very important

recommendations identified during the recent IAS audit on IT security. As described

above, the IAS has just endorsed the JRC action plan.

ECA audits

As part of the Statement of Assurance for 2016 (DAS 2016), the ECA reviewed 4 JRC

transactions. With respect to these transactions 3 preliminary findings have been

communicated to the JRC confirming no errors or remarks from the ECA. For the other

transaction the review is currently ongoing.

In the context of DAS 2015 (finalised during the first half of 2016), the ECA had reviewed

3 transactions (payments and related procurement procedures) of the JRC. For 1 of

these transactions, a non-quantifiable finding was issued by the ECA.

The JRC is continuing its contribution as associated DG, together with other Commission

services, in the implementation of the recommendations to the following ECA special

report (SR):

• How do the EU institutions and bodies calculate, reduce and offset their

greenhouse gas emissions? (SR n°14/2014).


• Can the EU's Centres of Excellence initiative contribute effectively to mitigating

chemical, biological, radiological and nuclear risks (CBRN) from outside the EU?

(SR n°17/2014).

The ECA has started its preparatory work for a follow-up audit of SR n°17/2014.

In 2016, the JRC was involved in the following 2 special reports published by the ECA:

• The EU institutions can do more to facilitate access to their public

procurement (SR n°17/2016). No recommendations were addressed to the

JRC.

• The Land Parcel Identification System: a useful tool to determine the

eligibility of agricultural land - but its management could be further

improved? (SR n°25/2016). Recommendation 5, 'Improving the

representativeness of the Quality Assessment (QA) samples', has been specifically

addressed to the JRC. The implementation of this recommendation is already in

progress and on track for successful conclusion.

Conclusion on the assessment of audit results

An effective follow-up to all audit recommendations is foreseen in the JRC management

system. The audit follow-up activities are regularly monitored and reported upon to JRC

management.

As a result of the assessment of the risks underlying the auditors' observations together

with the management measures taken in response, the JRC management has come to

the conclusion that the recommendations issued do not raise any assurance implications

and are being implemented as part of the on-going continuous efforts in terms of further

improvements.


2.1.3 Assessment of the effectiveness of the internal control systems

The Commission has adopted a set of internal control standards, based on international

good practice, aimed to ensure the achievement of policy and operational objectives. In

addition, as regards financial management, compliance with these standards is a

compulsory requirement.

The JRC has put in place the organisational structure and the internal control systems

suited to the achievement of the policy and control objectives, in accordance with the

standards and having due regard to the risks associated with the environment in which it

operates.

In line with the Commission Internal Control Standard 15 (ICS 15), the JRC performed an

annual review of its implementation of the Commission’s set of Internal Control

Standards; this involved an analysis of the effectiveness and compliance of the

standards. It was based on a review by the Internal Control Coordinator (ICC) staff using

evidence from a variety of sources including: interviews and declarations from relevant

key functions responsible for the implementation of the ICS, results from risk

assessments carried out during the year, supervisory reports, audit results from IAS and

the ECA, annual survey to assess the staff perception of the degree of implementation of

the ICS, results from the Commission's staff satisfaction survey, JRC exceptions register

and results of the ex-post controls. This has led to the ‘top-down’ assessment of the

JRC's internal control status at the end of the reporting year, with respect to both the ICS

compliance and the effectiveness of the control arrangements in place. Furthermore, the

‘bottom-up’ information on internal control issues received through the Assurance

Statements from Sub-delegated Authorising Officers has been checked for confirmation

or any counter-indications. Finally, the IAS's Opinion on the state of internal control in

JRC has been taken into account as well.

The functioning of the internal control system has been closely monitored throughout the

year by the systematic registration of exceptions (under ICS 8). No internal control

weaknesses (ICS 12) were reported during the year. The underlying causes behind these

exceptions have been analysed and corrective and alternative mitigating controls have

been implemented when necessary.

The analysis carried out and described above has enabled the JRC to conclude that

overall the JRC's internal control system is satisfactory. Further enhancing the

effectiveness of the JRC's control arrangements in place is an on-going effort in line with

the principle of the continuous improvement of management procedures. As a result, the

following activities are ongoing and will be given again focus during 2017:

• Ongoing staff competence mapping linked to the JRC strategic areas (ICS 3). The

core business and activity area mapping, which had started mid-2015, were

completed in 2016 and targeted JRC administrative support directorates and

units. Taking stock of recommendations and lessons learnt a proposal is being

drafted to suggest a way forward for the implementation of competence at JRC

level that will specifically target its knowledge production and knowledge

management staff, and which sets the ground for a renewed approach that can be

carried forward in the coming years.

• As regards Business Continuity (ICS10), a full Business Impact Analysis (BIA) is

ongoing following the major reorganization of the JRC which took place in 2016.

An updated JRC corporate Business Continuity Plan has been approved during the

first quarter of 2017.

• Ongoing actions taking into account the risks linked to IT security (ICS 12) and

which are being extended to include the recommendations from the recently

published IAS audit on IT security in JRC ICT systems. The reader is also referred

to 2.1.2 above.


The IAS, in its report to the Director-General of the JRC observed delays in implementing

the 4 very important recommendations on the following audits: (1) Nuclear

Decommissioning and Waste Management programme – financial aspects, (2)

Decommissioning: risk and project management at the Ispra site and (3) Intellectual

property rights management. In addition the IAS's opinion also refers to the combined

effect of the 4 very important recommendations which led it to conclude that the controls

currently in place do not provide sufficient assurance that IT Security risks are

adequately mitigated. However, this has no impact either on assurance or on the overall

conclusion of the state of the JRC internal control.

Concerning the overall state of the internal control system, generally the JRC complies

with the three assessment criteria for effectiveness: • Staff having the required knowledge and skills;

• Systems and procedures designed and implemented to manage the key risks effectively;

• No instances of ineffective controls that have exposed the DG to the organisation's key risks.

The JRC has assessed the internal control systems during the reporting year and has

concluded that the internal control standards are implemented and functioning as

needed. In addition the JRC is taking measures to further improve the effectiveness of

its internal control systems as described above.


2.1.4 Conclusions as regards assurance

This section reviews the assessment of the elements reported above (in Sections 2.1.1,

2.1.2 and 2.1.3) and draws conclusions supporting the declaration of assurance and

whether it should be qualified with reservations.

The information reported in Section 2 stems from the results of management and auditor

monitoring contained in the reports listed. These reports result from a systematic

analysis of the evidence available. The following elements provide sufficient guarantees

as to the completeness and reliability of the information reported and results in a

comprehensive coverage of the budget delegated to the Director-General of the JRC:

• JRC's internal controls systems provide sufficient assurance to adequately manage

the risks relating to the legality and regularity of the underlying transactions;

• JRC has implemented appropriate ex-ante and ex-post controls, to the extent that

they remain cost-effective;

• JRC has put has put in place suitable control measures to limit risks of error and

prevent, detect and correct fraud and irregularities;

• Recommendations issued by the JRC's auditing bodies do not raise any assurance

implications and are being implemented as part of the on-going continuous efforts

in terms of further improvements.

• JRC's internal control systems provide sufficient assurance with regards to the

achievement of the other internal control objectives;

• Resources were used for the intended purposes, sound financial management was

applied, and the non-omission of significant information was ensured;

On 18 February 2017, the JRC organised a meeting with participation from various actors

involved in reaching a conclusion towards the reasonable declaration of assurance, e.g.

the Director of Resources, the Director for Strategy and Work Programme Coordination,

the Internal Control Correspondent, the Evaluation function, the ex-post and exception

reporting owner and other JRC key actors. The purpose of this meeting was to analyse

and to discuss in detail the evidence collected based on the elements supporting

assurance. The group concluded that a) there are improvement areas ongoing which will

be given again focus during 2017 (as mentioned in section 2.1.3 above), which have

been brought to the attention of the Director General, and b) that on the basis of the

analyses made and on the information available, no evidence justifying a reservation

could be found.

Overall Conclusion

In conclusion, management has reasonable assurance that, overall, suitable controls are

in place and working as intended; risks are being appropriately monitored and mitigated;

and necessary improvements and reinforcements are being implemented. The Director

General, in his capacity as Authorising Officer by Delegation has signed the Declaration of

Assurance


2.1.5 Declaration of Assurance

Declaration of Assurance

I, the undersigned,

Director-General of the Joint Research Centre

In my capacity as authorising officer by delegation

Declare that the information contained in this report gives a true and fair view38.

State that I have reasonable assurance that the resources assigned to the activities

described in this report have been used for their intended purpose and in accordance

with the principles of sound financial management, and that the control procedures put

in place give the necessary guarantees concerning the legality and regularity of the

underlying transactions.

This reasonable assurance is based on my own judgement and on the information at my

disposal, such as the results of the self-assessment, ex-post controls, the limited

conclusion of the Internal Auditor on the state of control and the lessons learnt from the

reports of the Court of Auditors for years prior to the year of this declaration.

Confirm that I am not aware of anything not reported here which could harm the

interests of the institution.

Brussels, 7 April 2017

Signed

Vladimir Šucha

38 True and fair in this context means a reliable, complete and correct view on the state of affairs in the

DG.


2.2 Other organisational management dimensions

This section covers also the missing component 'Better Regulation (only for DGs managing regulatory acquis'.

For an extensive reporting on all components, please refer to Annex 2.

2.2.1 Human resource management

Recruitment, development and care of staff are central to the JRC in accordance with the

adoption in 2016 of the JRC Strategy 2030, especially in chapter 10 'A people-centred

organisation'.

The JRC believes that mapping competences can provide management with an overview

of its staff for strategic decision-making. The Competence Mapping Project was started in

the context of the JRC organisational development activities (dashboard), people centric

– competence development with a goal to develop and implement a comprehensive JRC

competence mapping system, which would provide an overview (database) of

competences currently available in the JRC. It would cover the following needs:

• Identify, unveil and exploit the JRC's human resource potential

• Support selective searches, competency reports and who does what queries

• Support HR planning.

This project, which targeted administrative support directorates and units, was concluded

in 2016 with a proposal on the taxonomy to be used (adapted OECD Fields of Science

taxonomy) as well as a prototype for a semi-automatic competence mapping using

PUBSY registrations. Based on an agreed ad hoc JRC taxonomy, the results of the

analysis were shared in graphical format as part of the Review of Support Services

presentations. Taking stock of lessons learnt and recommendations a proposal is being

drafted to suggest a way forward for the implementation of a competence at JRC level

that will specifically target its knowledge production and knowledge management staff,

and sets the ground for a renewed approach that can be carried forward in the coming

years.

In 2016, the JRC has contributed actively to the implementation of the Commission-wide

HR actions of staff engagement and their well-being programme. JRC organised a

number of fit@work related events and trainings across the different sites. A

webstreaming of conferences from Brussels was ensured for the remote sites. JRC sites

participated actively in the European week of Sport.

Regarding equal opportunities, the talent management programme to improve the

female representation in middle management positions was implemented by the

organisation of three workshops during 2016 with the participation of 61 female

colleagues. The workshops received very positive feedback as the majority of the

participants confirmed that this programme helps them to make a decision on whether or

not to pursue a management position in the future. They also indicated that they would

recommend this programme to other colleagues.

It should be also mentioned the even further progress which was made in the women

representation in senior management in the JRC with the appointment of two female

deputy directors-general.

In order to increase staff engagement, JRC implemented the talent management

programme as mentioned above.

Being recognised for exceptional effort improves staff morale and helps create a better

working environment. To recognise the achievements of staff, the JRC Annual Awards for


Excellence are given for outstanding work carried out at the JRC in line with its mission,

vision and values. The awards were given following a JRC-wide call procedure and

internal evaluation.

On the Connected platform a specific space was created "JRC Recognition of

Achievements" and is dedicated to celebrate contributions made by JRC staff members

across all areas of work.

The results of the Staff Satisfaction Survey were followed up rigorously. The Director-

General wrote a personal blog about the results and the follow-up. Following his call for

action, ten working/reflection groups were created, 6 geographic groups for the

respective sites and 4 thematic groups to follow the most problematic issues identified in

the Staff Satisfaction Survey. A dedicated space was created on Connected where the

reports of the groups have been published and are currently being analysed.

2.2.2 Better regulation (only for DGs managing

regulatory acquis)

N/A

2.2.3 Information management aspects

The JRC's Document Management Policy and Strategy is implemented on the basis of a

detailed yearly action plan, fostering an increased e-Domec compliance of the JRC

document and files lifecycle, developing a service oriented and networking approach with

all stakeholders, and implementing a specific training and communication plan at all

levels in the organisation.

In 2016, IAS assessed that six important recommendations concerning document

management addressed to the JRC were adequately and effectively implemented and

were subsequently closed.

The ICS survey carried out at the end of 2016 indicated a significant improvement in the

staff perception of ICS 11 Document Management. From the survey it has resulted that

staff perceive ICS 11 as the 3rd best implemented standard.

However, the adjourned implementation of a document management correspondent

function in all JRC services in 2016 has delayed the timely achievement of the ambitious

objective of 75% compliance measured on the basis of a composite indicator

comprehensive of all aspects of e-Domec, also anticipating Data, Information and

Knowledge Management at the Commission. The JRC Management Plan 2017 commits to

this ambition based on sustained effort by all concerned stakeholders.

2.2.4 External communication activities

The JRC promoted direct engagement with its partners, stakeholders and the wider public

through numerous events and outreach activities. The following few examples highlight

these activities with a specific forward-looking dimension.

JRC Open Day

At the JRC Open Day, 7 600 visitors, representing 81 different nationalities, took a closer

look at the activities of the JRC in Ispra. Thousands more visited the JRC stand at the

Commission’s Open Day in Brussels, which took place on the same day. The JRC Open

Day was an opportunity to show EU citizens the science behind better EU policymaking in

a fun and engaging way through demonstrations, lab tours, presentations and games. An

important objective of the event was to trigger the interest of children and students in a


future scientific career.

Science meets Parliaments, Science meets Regions

Over two days in November, the Science meets Regions and Science meets Parliaments

events gathered around 200 participants in Brussels from a wide range of stakeholders,

including academia, public authorities and politicians.

Both events aimed at strengthening the role of evidence-based policymaking at regional

and national level respectively, and to bridge the gap between the science and

policymaking worlds. Science meets Regions was co-hosted by the JRC and the European

Committee of Regions. Science meets Parliaments was organised by the JRC in

cooperation with the European Parliament's Science and Technology Options Assessment

(STOA) panel.

Given the enthusiasm of the participants, both events will be repeated in 2017.

2.2.5 Infrastructure

Infrastructure development

Unlike other DGs, the JRC owns and manages buildings and related infrastructure on all

its sites except Brussels. Therefore, this unique task and responsibility receives full senior

management attention. JRC strategy 2030 includes a specific chapter 11 "Infrastructure

fit for purpose". The strategy envisages the development, for the first time, of a single,

consolidated, multi-year plan for the development of its infrastructure across all its sites

and Directorates.

For what concerns the offices buildings, the Directives on Energy Efficiency and Energy

Performance of Buildings remain the legal basis when setting objectives within budget

constraints.

The major infrastructures delivered as scheduled in 2016 on the Ispra site have been the

delivery of building 27b, fully refurbished in energy-class A, with "very good" level

according to BREEAM39 certification. Together with the final phase of refurbishment of

building 18p, it contributes to reach and slightly surpass the set annual target for Ispra

site. On the Geel site, the Linac accelerator flight path cabins were refurbished as well as

building 60. Both areas do fulfil the Belgian energy performance standards. In Petten,

2016 saw the completion of an energy efficient A+ (NL Energy Performance Rating

minimum required under 2015 Building Regulations) new Smart Grid Showcase

Laboratory building 311.

The JRC Infrastructure Development governance structure has been fully implemented

with the new organisational structure of JRC on 01/07/2016. In line with the JRC

Strategy 2030, more specifically its chapter 11, infrastructure development is now

centralised in the Resources Directorate under the supervision of a single Senior

Manager.

Decommissioning and Waste Management Programme

The review of the JRC Decommissioning budget has been partly performed in 2016 and

will be finished in February 2017. It has been performed as follows: review of budget for

39 Sustainability assessment method for masterplanning projects, infrastructure and buildings


Geel was done in the third quarter of 2016; for Ispra, in the fourth quarter of 2016 and

Karlsruhe will be ready in the first quarter of 2017.

Main outputs for 2016 broken down according to the four relevant JRC sites can be found

in Annex 13.

Supplementary research programme for the High Flux Reactor in Petten

The new HFR Supplementary Research Programme (2016-2019) was prepared for

discussion and adoption in the Council. The process was delayed due the late financial

data input from the Member States that are to finance it (NL and FR). It is now expected

to be adopted early 2017.

The bi-annual Report from the Commission to the Council and the European Parliament

on the operation and research activities of the High Flux Reactor for the period 2014-

2015 was prepared but has not yet been released due to the lack of financial data for the

year 2014-2015, that was not provided by NRG (NL) operator of the reactor. It is

expected to be adopted once the JRC receives the financial data (in 2017).

2.2.6 Initiatives to improve economy and efficiency of financial and non-financial activities

1. In the context of the WP cycle review, the JRC is starting to plan the integration of

relevant tools to improve efficiency (mainly through avoiding the duplication of

information entry, leading also to lower maintenance cost for the separate tools).

Moreover, the JRC is planning to further develop the JRC Project Browser (JPB)

and the JRC Publications Repository (Pubsy) to meet the new needs identified by

the WP cycle review working group (detailed planning, monitoring, project

management, delivery of outputs, customer satisfaction survey). It is therefore

intended to re-use JPB/Pubsy and further extend them, instead of building a brand

new tool (or tools) from scratch, which would be more expensive and longer

(generating delays of all sorts).

In 2016, the JRC Project Browser (JPB) has been further developed to include HR

and Budget planning (this part of the system became operational in 2016).

Moreover a development to manage HR and Budget ceilings / checks in WP

planning has been started.

The development of a basic WP deliverable monitoring module has also been

launched (due to be operational 2Q 2017).

2. Discussions are ongoing with DG Environment about the customization of the JRC

tool "Project Browser" (JPB) for use in DG ENV.

In 2016, the development of EKB (Environment Knowledge Browser) was

launched. The tool is developed for DG ENV, DG RTD, DG CLIMA, ESTAT, EEA

based on the JRC's JPB technology. The new system is due to be operational 2Q

2017.

3. For the library activities, the possibility of making common use (with other DGs,

e.g. DG RTD) of commercial publications databases and analytical tools was

foreseen to lead to lower licenses costs, whilst the training on the tools is less


costly as well. However, the administrative costs related to organising this

common use diminish the benefits of the approach.

At the same time, the possibility of having access to electronic journals shared

with other DGs, e.g. DG EAC is being explored.

Effective sharing access to electronic journals is currently limited by the poor

performance of the Library Management Software (LMS) in use at the different EC

Libraries, i.e. Aleph. Improvement is expected in the context of the migration to a

modern LMS, planned by DG EAC by Q4 2017 following a successful CFT.

4. Negotiations with various providers of textual data (publications, news, patents

are ongoing to defragment their contractual relationships with the Commission

(e.g. Elsevier, Thomson Reuters). The goal is to channel all contracts between

these providers and the Commission into one contract for each provider and to

increase value for money by increasing number of users and reduce

administrative burden while maintaining total price of the contracts.

Negotiations led by DG RTD have been abandoned due to the minimum or null

discount offered by the suppliers, in respect of an increased administrative

workload needed to manage internally a unique license. A new procurement

procedure should aim to encompass the difficulties encountered in the

negotiations (a) by widening the number of competitors (b) by extending the

number of users to eventually include other European Institutions. The mandate

of the Contracting Authority in such procedure should be agreed and endorsed at

Commission level.

5. JRC is developing a tool to visualise and analyse funding proposals. Among others,

this tool will allow to evaluate the impact of past funding, objectify decision-

making for funding decision to be made, help detect fraudulent proposals, spot

resubmission and double funding within or between funding programmes.

The whole Cordis dataset (EU grants from FP5 to H2020) has been added to the

TIM technology products (http://www.timanalytics.eu/).

This allows exploring FP data as single dataset or in combination with patents and

publications. TIM uses text mining techniques to allow for the detection of similar

grants/proposals, helping users to spot resubmission, plagiarism, or double

funding.

Collaboration with DG CNCT: A specific pilot system has been put together with

the Corda dataset from FP7 project of DG Connected.

Collaboration with DG RTD: TIM was used to provide statistics on (e.g.

multidisciplinary aspect of FP projects, connectivity of organisations) for the

interim evaluation of H2020.

6. The JRC is leading a pilot project to improve the sharing of country-specific

knowledge within the Commission with the aim of improving the Commission's

analysis of the situation of each Member State, primarily for the purposes of the

European Semester. Using the latest knowledge management tools and

techniques should also give rise to some efficiency gains in the time spent to

access useful knowledge and in collaborating across the Commission in this area.

The pilots cover BE and IT.


• Connected European Semester

The 'Connected European Semester' project, launched in October 2016,

aims to enhance collaborative working, using the 'Connected' platform for

the 27 European Semester country teams at the heart of the EU's

economic surveillance and monitoring programme. The aim is to improve

the effectiveness, efficiency and engagement of the teams.

The SG took the decision to extend collaborative working to 27 European

Semester country teams, based on the results of two successful pilot

projects, run by the JRC for the Belgian and Italian country teams in Spring

2016.

After three months of activity, over +/-500 Semester users have migrated

their daily work to the collaborative platform. Activity levels are

encouraging. New collaborative working practices are emerging, with use

of the new tool becoming more familiar.

A full review of the Connected European Semester project - with qualitative

and quantitative analysis - will be published in March 2017, after the

publication of the Commission's country reports.

• Connected Country Knowledge

The JRC is leading a pilot project to improve the sharing of country-specific

knowledge within the Commission with the aim of improving the

Commission's analysis of the situation of each Member State, primarily for

the purposes of the European Semester. Using the latest knowledge

management tools and techniques should also give rise to some efficiency

gains in the time spent to access useful knowledge and in collaborating

across the Commission in this area. Collaborative spaces on Connected

have been set-up by the JRC, which developed a dedicated taxonomy

("categories" and "tags" on Connected) as well as guidelines for users in

the spaces. Each country-specific space is moderated by a Community

Manager from DG COMM working in the country's respective Commission

Representation. DG GROW has recently joined the initiative and will

contribute with the wealth of its country-specific knowledge.

The pilot currently covers Belgium and Italy. The plan is to extend it to 8

additional MS by the end of 2017.

2016 annual activity report - european commissions mission 1 is to support eu policies with ......

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