2017 Annual Activity Report - European Commission · 378 7 46,5 249 10 54,8 -34,1% 42,8%...

2017

Annual Activity Report

Paymaster's Office (PMO)

Ref. Ares(2018)2250765 - 27/04/2018

PMO_aar_2017_ final of 99

Table of Contents

PMO IN BRIEF 3

EXECUTIVE SUMMARY 4

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

SUMMARY OF SECTION 1 – WHAT WE DELIVERED) .............................................................................................................. 4 B) KEY PERFORMANCE INDICATORS (KPIS) ......................................................................................................................... 9 C) KEY CONCLUSIONS ON FINANCIAL MANAGEMENT AND INTERNAL CONTROL (EXECUTIVE SUMMARY OF SECTION 2.1) ................... 11 D) INFORMATION TO THE COMMISSIONER ........................................................................................................................ 12

1. KEY RESULTS AND PROGRESS TOWARDS THE ACHIEVEMENT OF GENERAL AND SPECIFIC OBJECTIVES OF THE PMO 13

1.1 ENSURING AT ALL TIMES THE CORRECT AND TIMELY HANDLING OF ALL TYPES OF TRANSACTIONS ....................................... 13 1.2 OFFERING BETTER QUALITY OF CUSTOMER SERVICE ................................................................................................. 14 1.3 DEEPENING INTER-INSTITUTIONAL SYNERGIES ........................................................................................................ 16

2. ORGANISATIONAL MANAGEMENT AND INTERNAL CONTROL 18

2.1 FINANCIAL MANAGEMENT AND INTERNAL CONTROL ................................................................................................ 18 2.1.1 CONTROL RESULTS ........................................................................................................................................... 19 2.1.2 AUDIT OBSERVATIONS AND RECOMMENDATIONS ................................................................................................... 26 2.1.3 ASSESSMENT OF THE EFFECTIVENESS OF THE INTERNAL CONTROL SYSTEMS .................................................................. 28 2.1.4 CONCLUSIONS AS REGARDS ASSURANCE ................................................................................................................ 29 2.1.5 DECLARATION OF ASSURANCE ............................................................................................................................ 30

DECLARATION OF ASSURANCE 31

2.2 OTHER ORGANISATIONAL MANAGEMENT DIMENSIONS ............................................................................................ 32 2.2.1 HUMAN RESOURCE MANAGEMENT ...................................................................................................................... 32 2.2.2 BETTER REGULATION (ONLY FOR DGS MANAGING REGULATORY ACQUIS) .................................................................... 32 2.2.3 INFORMATION MANAGEMENT ASPECTS ................................................................................................................ 32 2.2.4 EXTERNAL COMMUNICATION ACTIVITIES ............................................................................................................... 33

ANNEXES 34

ANNEX 1: STATEMENT OF THE RESOURCES DIRECTOR .............................................................................................. 34 ANNEX 2: REPORTING – HUMAN RESOURCES, BETTER REGULATION, INFORMATION MANAGEMENT AND EXTERNAL

COMMUNICATION ....................................................................................................................................................... 35 ANNEX 3: DRAFT ANNUAL ACCOUNTS AND FINANCIAL REPORTS ................................................................................ 38 ANNEX 4: MATERIALITY CRITERIA ......................................................................................................................... 71 ANNEX 5: INTERNAL CONTROL TEMPLATE(S) FOR BUDGET IMPLEMENTATION (ICTS) .................................................... 72 ANNEX 10: SPECIFIC ANNEXES RELATED TO "FINANCIAL MANAGEMENT" ....................................................................... 83 ANNEX 12: PERFORMANCE TABLES ........................................................................................................................ 87


PMO IN BRIEF

The mission of the PMO is to provide a high quality and user friendly service to current and former staff of the European Commission and many of the other EU institutions and

agencies. It does so by promptly and accurately establishing and paying entitlements and claims, providing clear and relevant information and ensuring efficient and effective

controls. The PMO ensures the:

establishment of individual financial rights for staff, pensioners and rights holders;

payment of salaries, pensions and related entitlements;

reimbursement of health insurance, mission and expert claims;

delivery of EU laissez-passer and handling of third-county visas for staff.

In addition, PMO calculates contributions on salaries for taxes, pensions, medical insurance, insurance and unemployment. This applies, as appropriate, to Commission

staff, pensioners, but also to other bodies which have delegated to PMO their management and collection. PMO charges back the services it provides to external

services or bodies through a charge-back mechanism based on Service Level Agreements.

In order to achieve their respective goals, the Offices have a certain degree of autonomy for reasons of economy and quality of service. The PMO has a specific management and

supervision structure:

• The Director is the authorising officer by delegation and has the responsibility of

producing a declaration of assurance and an annual activity report;

• The activities of the PMO are supervised by a Management Board, chaired by the

Director General of DG HR and composed of eight members representing the main stakeholders and clients of the Office;

PMO operates a number of corporate IT systems for the management and calculations of

rights, entitlements and expenses and is dependent on its single solution provider, DG DIGIT, for their development and maintenance. In September 2017, PMO established an

IT Task Force. The role of the Task Force is to drive forward the development of PMO's IT tools in order to ensure business continuity and increased efficiencies in the future.

Further to assuming the role of Authorising Officer for the respective budget line, in 2017

PMO also took over the administrative responsibility of the Secretariat of the OLAF Supervisory Committee.

With regard to its relations with its clients/users, a feedback system in PMO Contact was introduced in 2017, where "smileys" indicate the level of satisfaction from the interaction

with the service: green smiling, yellow indifferent and red frowning faces – with the green smileys remaining at a constant 75%.


EXECUTIVE SUMMARY

The Annual Activity Report is a management report of the Director of the PMO 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

Treaties1.

a) Key results and progress towards the achievement of

general and specific objectives of the PMO

As an administrative support service, the Paymaster's Office (PMO) is not in the frontline

for delivering on the ten priorities of the Juncker Commission. However, it has a fundamental role to play in ensuring that the institution is capable of mobilising all its

strengths behind these priorities. In particular, PMO contributes to the following general

objective 11 of the Commission: "To help achieve the overall political objectives, the Commission will effectively and efficiently manage and safeguard assets and resources,

and attract and develop the best talents."

The mission of the Office for the Administration and Payment of Individual Entitlements (PMO) is to provide a high quality and user-friendly service by determining entitlements

correctly, making payments promptly, providing clear and relevant information, and carrying out efficient and effective checks.

It determines and manages the entitlements of active and retired Commission staff and

other rights holders in the Commission and many other EU institutions and agencies; it ensures that staff are paid and reimburses their expenses.

PMO has three operational objectives: To correctly establish, calculate and pay salaries and pensions

To ensure prompt and accurate reimbursement of medical, mission and expert expenses

To provide swift, good quality and relevant information and ensure high quality client services

PMO’s workload is increasing constantly and the main challenge in 2017 remained to maintain efficiency and effectiveness in various processes with a view to offering a better

service to all. As an illustration of the work load, in 2017, PMO established individual rights of more than 37.000 agents from the Commission, the European External Action

Service, the European Court of Auditors and EU agencies and paid 43.000 salaries every month; it also reimbursed 2,9 million medical claims, 140.000 missions claims and

60.000 expert files.

The following achievements are particularly worth highlighting:

Handling time of requests: The reimbursement of medical expenses continues with

the positive progress already witnessed in 2016. The average time needed for reimbursement remained within the target, with over 80% of the claims reimbursed

within 20 days. Helpdesk services for active and retired staff are organised in Brussels, Ispra and Luxembourg to meet staff for questions regarding medical reimbursements.. The average time taken to reimburse expenses of experts attending Commission

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


meetings was reduced to 7 days in 2017, compared to 8 days in 2016. In November 2017, PMO became business owner for the AGM tool (Advanced Gateway to Meetings) for

the organisation of meetings. The Corporate Management Board has recognised AGM as the standard solution for the management of experts. Full roll out to all DGs is foreseen

by the end of 2018, which will yield significant efficiency gains.

Regarding the requests for transfer IN of pension rights from national schemes, a task force of 5 people was recruited towards the end of 20172 for a period of 2 years in order

to reduce the backlog since 2010 and has already helped consolidate 700 files.

Communication with current and former staff and affiliates: The PMO Contact

Call Centre and PMO Contact Online answered more than 3,300 phone calls and 8,300 online queries per month on average, which represents an increase of 6% and a decrease

of 5% respectively. The average waiting time for callers has increased, while the average time taken to reply to online queries fell from 8 to 7 days. In parallel the percentage of

the tickets processed outside the deadline of 15 working days remained stable at 13% in 2017. Communication with active and retired staff on matters relating to pay and

benefits remains important, with 9 newsletters sent to active staff in 2017. In parallel,

the PMO published articles in 6 editions of pensioners' reviews and held information sessions (PMO tours) for Agencies and the European External Action Service (EEAS) staff.

Special focus on the modernisation of Information Systems for the PMO and

its clients. The IT tool MiPS for the management of mission expenses was updated to the latest Commission graphical standard during 2017 and major work was started in

order to develop the platform to be compliant with the new Guide to missions and authorised travel. The deployment of MiPS was successfully implemented at the Court of

Auditors and at the Community Fisheries Control Agency (CFCA). Regarding the

Transcode interface (Sysper-NAP)3, it is now in production mode for the agencies of REA (Research Executive Agency) and CHAFEA (Consumers, Health, Agriculture and Food

Executive Agency) as well as the Mediator. The quality of interinstitutional data was consolidated in 2017, as several ad-hoc developments were initiated, advanced or

completed. In parallel, the "negative list" of misaligned files has also been heavily reduced, with remaining cases to be settled with new developments in Transcode.

Effectiveness and efficiency of operational structure: the continuous update of

operations continued in 2017, with an overall increase in efficiency as a result, and more

flexibility and quality of service to clients.

The next page shows the evolution of activities over the years 2016-2017. All data were extracted from PMO databases.

2 Not included in table of p. 6

3 Automated process to transfer the Human Resources Management Systems data to the Payroll engine

Activities Short description

2016 2017 Evolution

Number of files

Human resour-

-ces

Total spent

(MEUR)

Number of files

Human resour-

ces

Total spent

(MEUR)

Files HR

Establish individual rights NEW INDICATOR: Staff members managed4 n.a. 65

2.988,8

37.656

66

3.054,5

n.a. 7,7%

Calculation and payment of

salaries per month

42.677 63 43.068 64 0,9% 7,9%

Calculation and payment of

pensions per month

Establishment of rights and payment of

pensions and other indemnities to all former staff under Staff Regulations and CEOS.

22.854 45 1.684,5 23.734 47 1.744,8 3,9% 8,9%

Manage transfers of pension rights

Management of transfers of pension rights from external schemes towards the Pension Scheme of the European Union's Institutions.

4.037 23 -133,15 5.498 18 -121.4 36,2% -8,7%

Manage severance grants and transfers ‘OUT’ of pension rights

Management and payment of severance grants

378 7 46,5 249 10 54,8 -34,1% 42,8%

Establishment of rights and payment of capitals representing acquired pension rights towards external pension schemes, and

severance grants for all former staff linked to termination of service.

548 570 4,0%

Calculation and payment of unemployment allowances

Establishment of rights and payment of unemployment benefits for former temporary and contract staff.

1.522 9 15,4 1.554

5 17,0 2,1% -11,1%

Calculation and

reimbursement of sickness insurance expenses (JSIS)

Calculation and reimbursement of sickness /

accident insurance expenses.

2.974.826 213

292,1 2.860.854

324,0 -3,8%

8,5%

4 PMO decided to change the method to give a more accurate indicator (i.e. number of staff whose rights are managed by PMO, extracted from the pay engine "NAP"). It has not

been possible to develop a reliable and automatic method to count the number of entitlements created and modified.

5 Transfer IN and OUT, amount not included in the total operational expenditure



2016 2017 Evolution

Number of files

Human

resour-

-ces

Total spent

(MEUR)

Number of files

Human

resour-

ces

Total spent

(MEUR)

Files HR

2346

3,5%5 Calculation and reimbursement of accident

insurance expenses

2.011 13

7 1.854 6 -7.8%

Calculation and

reimbursement of mission expenses

Calculation and reimbursement of mission

expenses.

133.221 47 80,6 139.529 40,5 80,5 4,7% -6,4%

Emission of visas Issuing visa for staff going on mission or

taking up duties in EU delegation.

4.076 5 -0,1 3.780 5 -0,1 -7,3% 0

Enrolment and Issuance of

Laissez-passer

Manage the full operational process of EU

Laissez-passer (from the reception of applications and the registration of biometric and biographical data to the delivery of the

Laissez-passer to applicants

2.927 6 2.037

5 -30,4% -16,7%

Calculation and

reimbursement of experts’ expenses

Reimbursement of travel and / or residence

expenses for government and private experts’ called in the various working groups of the Commission, and the costs associated with the holding of these meetings.

61.843 17 31,5 60.679 17,5 31,6 -1,9% 11,8%

Manage daily allowances for SNEs

Manage daily allowances for SNEs. 1.730 1 38,8 1.581 1 37,2 -8,6% 0

Other 1 2,1 68 7,4 n.a.

Total operational activities 3.252.6509 5.134,6 3.182.643 5.351,5 -2.1%

6 Total sickness/accident insurance

7 Amounts spent by the Commission is included in JSIS, the rest is paid by insurance companies and is not included in this table

8 OLAF Supevisory Committee (new)



2016 2017 Evolution

Number of files

Human

resour-

-ces

Total spent

(MEUR)

Number of files

Human

resour-

ces

Total spent

(MEUR)

Files HR

Total operating expenditure 43,6 46,2

Operational activities headcount 515 519 0,8%

Horizontal activities headcount (overhead) 33 31 -6,1%

Total 548 550 0,4% Source: Business Intelligence, PMO. Human Resources in FTEs cutoff date: October 2017

9 Excludes new indicator

b) Key Performance Indicators (KPIs)

The most relevant key performance indicators are presented below:

TARGET RESULT in 2017

1. Average time taken

to treat claims

Average time needed to handle reimbursement claims (in

days)

2. Correct establishment

of entitlements,

correct calculation

and payment of

salaries and pensions

Error rate of < 1 % of the amount paid annually.

< 1 %

3. Achievement of the IT

strategy - percentage

of programmed

project milestones

implemented on time

85% of IT milestones timely implemented

75% of milestones planned for 2017 achieved. For further

details: cf. reference in Heading Part I – 1.3 and Annex 12 §3.

4. Average time taken to

reply to enquiries

through the:

• ‘PMO Contact Call

Centre’

• ‘PMO Contact

Online’

0

5

10

15

20

25

2016Results

2017Target

2017Results

2018Target

2019Target

2020Target

Medical claims

Missions claims

Expert claims

0,001,002,003,004,005,006,007,008,009,00

Average waiting timeon the phone (inminutes)

Average time to replyto PMO contactonline enquiries (inworking days)


5. Effectively and

efficiently manage

and safeguard assets

and resources, and

attract and develop

the best talents.

Staff engagement index: Increase from 2016 (59)

No further information – last staff survey in 2016.


c) Key conclusions on Financial management and Internal control (executive summary of section 2.1)

In accordance with the governance arrangements of the European Commission, the PMO conducts 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/principles, 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/principles. The PMO has assessed the internal control

systems during the reporting year and has concluded that the internal control standards/principles are implemented and function as intended. Please refer to AAR

section 2.1.3 for further details.

In addition, the PMO 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, in her capacity as Authorising Officer by Delegation has signed the Declaration of

Assurance.


d) Information to the Commissioner

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

Commissioner on management matters, the main elements of this report and assurance declaration, have been brought to the attention of Commissioner

Oettinger, responsible for Budget and Human Resources.


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

The mission of the Office for the Administration and Payment of Individual Entitlements (PMO) is to provide a high quality and user-friendly service by determining entitlements

correctly, making payments promptly, providing clear and relevant information, and carrying out efficient and effective checks.

It determines and manages the entitlements of active and retired Commission staff and other rights holders in the Commission and many other EU institutions and agencies; it

ensures that staff are paid accordingly and reimburses their expenses.

PMO has three operational objectives:

expenses; and

provide swift, good quality and relevant information and ensure high quality

client services.

PMO’s workload is increasing constantly and the main challenge in 2017 remained to

achieve greater efficiency and effectiveness in various processes with a view to offering a better service to all. In 2017, PMO established individual rights of more than 37.000

agents from the Commission, the European External Action Service, the European Court of Auditors and EU agencies. It paid more than 43.000 salaries and about 24.000

pensions every month; it also reimbursed nearly 2,9 million medical claims, 140.000 missions claims and treated more than 60 000 expert files.

While as an administrative support service the Paymaster's Office (PMO) is not in the frontline for delivering on the ten priorities of the Juncker Commission, it has a

fundamental role to play ensuring that the institution can mobilise all its strengths behind

these priorities. In particular, PMO contributes to the following general objective 11 of the Commission: "To help achieve the overall political objectives, the Commission will

effectively and efficiently manage and safeguard assets and resources, and attract and develop the best talents."

Offering a correct and timely payment of salaries, pensions and other related

entitlements, a swift reimbursement of health insurance, mission and expert claims, a smooth delivery of EU laissez-passer and visas, and more generally accessible and

customer-friendly services, is essential to allow the Commission – and increasingly other

– staff to carry out their duties unhindered.

1.1 Ensuring at all times the correct and timely handling of all types of transactions

All targets related to the specific objectives have been met. Further details on the main outputs related to this objective can be found in Annex 12, item 1.1.

Indicators linked to the correct establishment, calculation and payment of entitlements

and reimbursements continue to show a low rate of Article 90 complaints, below the maximum set as a target of 10% and a financial error rate, detailed in Part 2 of the

report, below 1%.

The reimbursement of medical expenses, continues with the positive progress

already witnessed in 2016. The average time needed for reimbursement remains within


the target at 13 days. The number of claims that were handled in less than 30 days also remained within target at 95% in 2017, of which over 80% were reimbursed within 20

days.

The average time taken to reimburse Commission officials’ mission expenses was further reduced, despite an increase of almost 5% in the number of claims processed.

The average reimbursement duration remains at 7 days in 2017, with more than 95 % of claims being processed by the 15 day target deadline. The overall processing time for

claims from staff in other institutions tends to be longer, depending on how long it takes

for the relevant institution to make the final payment.

The average time taken to reimburse expenses of experts attending Commission

meetings has been reduced in 2017 to an average of 7 days, compared to 8 days in 2016. In November 2017, PMO became business owner for the AGM tool (Advanced

Gateway to Meetings) for the organisation of meetings. The Corporate Management Board has recognised AGM as the standard solution for the management of experts. Full

roll out to all DGs is foreseen by the end of 2018, which will yield significant efficiency gains.

Further details regarding the main outputs related to this objective can be found in Annex 12, § 1.

1.2 Offering better quality of customer service

Staff satisfaction with the quality of PMO's services can be improved. The PMO aimed in 2017 to maintain efficiency and effectiveness in various processes while focusing on

improving the service to current and former staff and affiliates. A feedback system in PMO Contact was introduced in 2017, where “smileys” indicate the level of satisfaction

from the interaction with the service: green smiling, yellow indifferent and red frowning

faces- with the green smileys remaining at a constant of 75%.

The PMO Contact Call Centre and PMO Contact Online answered more than 3.300

phone calls and 8.300 online queries per month on average, which represents an increase of 6% and a decrease of 5% respectively. The average waiting time for callers

has increased, while the average time taken to reply to online queries fell from 8 to 7 working days. In parallel, the percentage of the tickets processed outside the deadline of

15 working days remained stable at 13% in 2017. PMO is currently examining where to

strategically target some additional resources to improve its responsiveness to its clients.

The PMO continues to invest in communication with active and retired staff on matters relating to pay and benefits. Since January 2017, PMO contributes to HR Staff Matters

Newsletter, with 9 editions sent to active staff in 2017. In addition, PMO published 6 articles in the pensioners’ reviews, and organised two information sessions (PMO Info

Tours) for staff working in Agencies and for EEAS staff working in delegations. A helpdesk service for active and retired staff is organised in Brussels, Ispra and

Luxembourg to meet staff for any question regarding medical reimbursements.

With a view to further improving the quality of customer service, the Ispra Settlements Office launched an initiative in 2017 to organise closer collaboration with the AIACE10

sections (in the Members States managed by the Ispra Settlements office). In May

10 International Association of Former Staff of the European Union


2017, a seminar for the JSIS11 "ambassadors" of AIACE, focused on issues encountered by the JSIS members in AIACE, exchanging good practices, and working together on

better communication between AIACE and JSIS. Social Services of DG HR of Ispra and Brussels participated in the seminar and contributed to the discussion of common issues

linked to health problems of the retired colleagues. The AIACE sections of France, Italy, Portugal, Spain, The Netherlands, United Kingdom and a representative of the AIACE

International participated, along with the PMO Director. The initiative was highly appreciated by the AIACE colleagues, with a proposal to continue such enhanced

collaboration.

On December 12th 2017 PMO organised an important conference on disability which was attended by almost 300 colleagues from all Institutions. The main objective was to

improve the services offered – including the creation of a new single point of contact in DG HR and a Centre of Excellence in the PMO/JSIS. The conference brought together the

Belgian Service Publique Fédéral (SPF) and various organisations from Brussels, Wallonia and Flanders offering support to parents with children with a disability. They also

provided information on the possibilities available to those caring for someone with either a physical or psychological disability.

Following this conference, monthly sessions are organised by PMO with the presence of

SPF to listen to the concerns of colleagues in order to ensure that administrative files are dealt with in the most efficient way possible. Colleagues from the Disability team in the

newly created Centre of Excellence have already visited ERCEA12 and in 2018 a training session for parents of children with autism will be organised.

In 2017, the PMO launched an internal project to enhance the consistency and excellence of the operation of the JSIS across the three units which implement it in

Brussels, Luxemboug and Ispra. The One JSIS project identifies centres of excellence for the various tasks and enhances co-ordination across the three offices.

The PMO always looks for value for money in the provision of mission and medical services. Through its calls for expressions of interest, it tries to secure better recognition

for JSIS members and reduced hospital rates from medical providers, and high quality mission services at the best prices from airlines, hotels and car hire companies.

To simplify and modernise the rules and procedures, a new Guide to missions and

authorised travel was adopted on 27th September 2017 and will take effect on 28th March 2018. Trainings and both internal and external communication are foreseen.

Further details on the main outputs related to this objective can be found in Annex 12,

§2.

1.3 Deepening inter-institutional synergies

Inter-institutional service provision based on Service Level Agreements (SLA) offers

opportunities for overall improvements in administrative efficiency. The PMO extends its service to other institutions when there is a mutual understanding in favour of closer

cooperation. On 18 December 2017, PMO signed a SLA with the Court of Auditors, which

now includes issions as well as rights and obligations upon entering and leaving the service, the payment of pensions for Members and the handling of transfer of pension

rights.

11 Joint Sickness Insurance Scheme

12 European Research Council Executive Agency


In 2017, the PMO became the system owner for AGM, which was adopted by the

Corporate Management Board as a standard solution. It will be rolled out to all DGs during 2018 and will replace the APEX tool which PMO used up to now to reimburse

expert expenses.

The deployment of the IT application for mission expenses, MiPS, to other institutions and agencies continued with the Court of Auditors and the CFCA agency.

PMO ran its annual two-day generic training session for all agencies and on-site training sessions for individual agencies.

The extension of services to other institutions required all systems underpinning the

functioning of the PMO activities to absorb new activities. The IT systems were further developed in the light of this objective. In 2017, efforts continued to (i) streamline

procedures and business processes which underpin the organisation; (ii) extend the coverage of information systems especially for individual pecuniary rights; (iii) roll-out

aspects of new systems (Payment Factory and PMO Contact); (iv) analysing the

possibility to replace ageing systems in a timely manner (New payroll application); (v) develop the inter-institutional dimension of eServices (Payment Factory, Sysper-rights).

PMO achieved 75% of the planned IT developments, below the expected target of 85%.

This was mainly due to delays in the following projects:

project (an HR/PMO common project) the delay was due to three primary reasons:

using a custom-made solution instead of the drupal platform

underestimating the complexity of the project (incl. many other systems involved, two partners with different needs etc)

Loss of one ressource which was not rapidly replaced

development of the security plan was delayed by DIGIT due to the complexity of

the business impact. New deadlines have since been set.

The graph below shows the evolution of the number of tasks to be implemented (closed)

in 2017. More details on each IT project is in Annex 12 (§3).


Source: Business Intelligence, PMO

0

20

40

60

80

100

120

Percentages of completion compared to planned developments for 2017


2. ORGANISATIONAL MANAGEMENT AND INTERNAL CONTROL

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. The reports produced are:

the reports by AOSDs;

tor, including the results of

internal control monitoring at Service level;

-ante/a posteriori13/ex-post controls;

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

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 of

PMO.

2.1.1 Control results

The administrative Offices' core business consists in providing support to the Commission and other institutions and agencies. Hence, the PMO's expenditure is exclusively

administrative in nature and it is implemented under centralised direct management.

The main activities of the PMO are the establishment and payment of salaries, pensions and associated entitlements, and the reimbursement of expense claims. Decisions taken

on entitlements - linked to salaries & pensions - often have important and long term financial implications. The PMO's work is characterised by the variety and complexity of

the legal and regulatory framework that underlies the payment conditions, by the large

number of claims processed and by the shared responsibility with other services.

Some tasks are entrusted to other Commission DGs and Services14 where they are

managed under the same Commission rules, implying that the PMO can rely on the other

DG’s control systems. As per the specific rules of co-delegation of budget, these DGs and Services report on the implementation of the budget and the related internal control

13 Contrôle pour les droits ayant fait l'objet d'un paiement anticipé ou provisoire sur base d'événements futurs

14 DG HR (Co-delegation for building security; EUR 491.000); DEVCO (Co-delegation for salaries and related

entitlements for Commission staff in Delegations, EUR 5,8 million); DIGIT (Co-delegation for IT systems,

hardware, support; EUR 1,3 million); OIB (Co-delegation for building related expenditure (water, gas, etc.);

EUR 4,0 million); OIL (Co-delegation for building related expenditure (water, gas, etc.); EUR 1,2 million).


system in their own Annual Activity Report. No problems regarding the delegations were signalled to the PMO by the concerned entities.

To illustrate the weight of the different operational domains and related controls, this table show the total payments8 made per main type of PMO activity.

PMO expenditure 2017 Expenditure

(KEUR) Percentage

Salaries and other entitlements 3.091,7 57,8%

Post activity (pensions, unemployment

and other entitlements)

1.816,5

33,9%

Total "salaries, post-activity and

associated entitlements" (domain/ ICT 1)

4.908,2 91,7%

Joint Sickness Insurance Scheme

(JSIS) 324,0 6,1%

Missions 80,5 1,5%

Experts and candidates 31,6 0,6%

Total of "reimbursement of

medical, expert and mission claims" (domain/ ICT 2)

436,1 8,1%

Other 7,2 0,1%

Total 5.351,5 100 %

Source: budget implementation, PMO

PMO revenues and income 2017 Revenues

(EUR million) Percentage

Contributions (taxes, pension) 999,2 72,9%

Contributions (JSIS, unemployment, insurance) – extra-budgetary managed

348,1 25,4%

Total of contributions (ICT 3) 1.347,3 98,3%

Charge-back of services to other

Institutions and bodies (ICT 4) 10,6 0,8%

Other 12,3 0,9%

Total 1.370,2 100 %

Source: budget implementation, PMO


The presentation of the Internal Control Templates (ICT) for the areas listed above is provided in Annex 5.

Coverage of the Internal Control Objectives and their related main indicators

Control effectiveness as regards legality and regularity

The PMO 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 commitments as well as

the nature of the payments concerned. The control objective is to ensure that the residual error rate does not exceed 2 % (cf. materiality criteria in annex 4).

Ex-ante and ex-post control – key indicators

The PMO control strategy – more details can be found in Annex 5 – is based on the principle that the establishment of an entitlement or the request for reimbursement is

examined by a case handler who compares the submitted documents to the relevant eligibility criteria. Every decision is taken under supervision of a verifying agent and/or

head of sector, except for some allowances where the review of some lower risk and less

complex files is performed by the verifying agent/head of sector on a sample basis, due to the high number of declarations received. Depending on the complexity of the claim, a

more detailed analysis will be carried out to arrive at a sound decision.

Every error found is corrected. Given the repetitiveness of the main PMO activities, this leads to a continuous adjustment and improvement of the internal control system.

Corrective measures are taken when an error is linked to a system weakness. Such measures involve training, reallocation of files, tighter verification or focused ex-post

checks.

The results of ex-post controls are analysed and they too may result in corrective

measures. When the result of an ex-post control indicates a need to take further action, a detailed action plan is formulated.

Details on the results of controls are provided in Annex 10 and the conclusions are

presented below.

Every transaction in Salaries, Post Activity & Associated Entitlements is subject to

ex-ante verification (100 % control). All errors are corrected retroactively and the results of corrections influence the accuracy of future transactions. The ex-ante controls

revealed no material errors.

The results for ex-ante controls in the area of medical, expert and mission claims

show that the total financial error rate of the ex-ante controls remains below the materiality threshold of 2 %, fixed by the Court of Auditors, as shown in the table below.

As the samples taken are considered as representative of the total population, it is possible to extrapolate the error rate. Extrapolating to the overall population, minus the

population controlled and corrected, the residual error rate is calculated 0.43% for this

domain (2).

Scope ex-

ante

control

# files

verified

Total amount

verified

(EUR)

% Value

Total of

population covered

Financial

error rate

2017

Financial

error rate

2016

Reimbursement of medical,

8.625 27.247.638,61 6,25% 0,43% 0,26%


expert and mission claims -

domain 2 Source: reports on ex ante controls, PMO

The table below gives an overview of the results of the ex-post controls carried out

during the year.

Scope ex-post

control (expenditure areas)

# files

verified

Total

amount verified (euro)

% Value

Total of population covered

Financial

error rate 2017

Financial

error rate 2016

Financial

error rate 2015

Salaries, post-activity and associated entitlements -domain 1

190 19.660.557,26 0,40 % 0,08% 0,17 % 0,09 % estimated

Reimbursement of medical, expert and mission claims - domain 2

1.616 2.497.003,83 0,57 % 0,20 % 0,86 % 0,58 % estimated

Source: reports on ex post controls, PMO

For Salaries, Post Activity & Associated Entitlements, the results of the ex-post controls show a total financial error rate estimated at 0.08% (total financial error/total

amount verified), lower than past years.

For reimbursement of medical, expert and mission claims, the total financial error rate of all ex-post controls, of which many are targeted to the higher risk areas, remains

well below the materiality threshold of 2%; confirming the accuracy and quality of

transactions processing by the PMO and the effectiveness of the ex-ante controls. The overall ex-post financial error rate remains at 0.20%. As it was focused on high risk

areas, it cannot be extrapolated to the overall population.

Overall conclusion

The overall conclusion on the basis of all controls carried out by the PMO units throughout 2017 confirms the high quality of internal control and the global financial

error rate remaining largely below 2 % (cf. materiality criteria in Annex 4).

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

level, the PMO estimated overall amounts at risk and their estimated future corrections are consolidated.

For the PMO, the estimated overall amount at risk at payment for the 2017

payments made is EUR 5,8 million and the overall amount at risk for revenue and income is EUR 0,05 million (overcharge). This is the AOD's best,

conservative estimation of the amount of relevant expenditure during the year

(EUR 5.043 million) and revenue and income (EUR 1.022,1 million) 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 proportion of the underlying error will be detected and corrected in successive

years (in line with the provisions in the Staff Regulations). The nature of PMO activities, payment of salaries, post-activity and reimbursement of claims, makes for an

easy recovery of found errors, as corrections can be deducted from monthly salary or

pension payments, with a relatively stable population (staff and their families). This implies that corrections made following the identification of errors have a positive impact

not only on the past but also in the future. The future corrections for those 2017


payments made are estimated at zero. No historic information is available for revenue and income.

Based on the above, the estimated overall amount at risk at closure is equal to

the overall amount at risk at payment, EUR 5,8 million, as detailed in the table below.

Taking into account the conclusions of the review of the elements supporting assurance, it is possible to conclude that the internal controls systems implemented by the PMO

provide sufficient assurance to adequately manage the risks relating to the legality and

regularity of the underlying transactions. Furthermore, it is also possible to conclude that the internal control systems provide sufficient assurance with regard to the achievement

of the other internal control objectives.


Table X - Estimated overall amount at risk at closure

PMO

"payments

made" (FY;

m€)

minus newa

prefinancing

[plus

retentions

madeb] (in

FY; m€)

plus clearedc

prefinancing

[minus

retentions

releasedb and

deductions of

expenditure

made by MS]

(in FY; m€)

= "relevant

expenditure"d

(for the FY; m€)

Average Error

Rate (weighted

AER; %)

estimated

overall

amount at

risk at

payment

(FY; m€)

Average

Recoveries

and

Corrections

(adjusted

ARC; %)

estimated

future

corrections

[and

deductions]

(for FY; m€)

estimated

overall

amount at

risk at

closuree

(m€)

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

Management

of salaries,

post-activity

and related

entitlements

4.908,2 N/A N/A 4.908,2 0,08% 3,9mEUR

and 0,08%

of (5)

3,9mEUR

Management

of medical,

expert and

mission

claims

436,1 N/A N/A 436,1 0,44% 1,9 mEUR

and 0,44%

of (5)

1,9mEUR

Overall

payments,

total as per

Annex 315

5.043 5.403 0,08% EUR 5,8

million

and

0,08% of

(5)

0 5,8mEUR

Contributions 1.347,3 0,0%

Charge back 10,6 1,42% 0,05

Overall

revenue and

income,

total as per

Annex 316

1.022,1 N/A N/A 1.022,1 0,005% 0,005

million

0,005

million

15 See footnote 1 to explain the difference between operational activities and the total reported in annex 3, table 2

16 See footnote 2

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Cost-effectiveness and efficiency

Based on an assessment of the most relevant key indicators and control results, the PMO has assessed the cost-effectiveness and the efficiency of the control

system and reached a positive conclusion.

The main benefits of control can be expressed in non-financial terms: an efficient and effective internal control system allows for accurate management of incoming claim and

definition of entitlements at the source, avoiding errors with a long term impact. It also

ensures compliance with regulatory provisions. Since a quantitative estimation of the volume of errors prevented and detected is not available, it is only possible to quantify a

part of the related benefits, other than the amounts recovered as a result of these controls.

In consequence, 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 PMO has defined efficiency measures for the controls associated

with the core processes.

For controls related to the "establishment/modification of salaries, post-activity and

related entitlements' (cf. Annex 5 – ICT 1), the operational activity of which represents 91.7 % of operational expenditure, the investment in control resources is difficult to

determine as controls are embedded in day-to-day management of all files. Hence, the evaluation of control efficiency needs to be evaluated over time, through comparison of

the efficiency in files managed per staff member. The table produced in the Executive Summary, § a, compares the overall evolution of the workload (expressed in number of

files) and the evolution in staff (expressed in Full Time Equivalents - FTE). The overall

evolution of operational activity shows a decrease of 2.1% in the number of files as compared to last year, while the average staff in FTE remains stable in comparison to the

previous year, with a slight increase of 0.4%.

The mission of PMO consists in a large part of control activities related to the regulatory

requirements. For these purposes, it encourages control on a permanent basis and many controls are processed by the IT systems in place. An overall estimation of the cost of

control for ex-ante controls, ex post controls carried out in PMO (including for JSIS) and for the financial verification is roughly estimated at EUR 2,9 million, which corresponds to

0,06% of total payments made by PMO (EUR 5.351,5 million). The unique nature of the

PMO's activity, consisting mainly of recurrent mass payments of wages and pensions, explains why a limited number of transactions cover a vast amount of payments. The

method of calculation of the cost of control was changed last year, to take into account the costs of ex ante controls in particular.

To reach an absolute conclusion as of the relative efficiency of the controls, it is

preferable to analyse the evolution of these efficiency indicators over time. However, the results of the efficiency indicators from the previous and current year give the assurance

that control management is efficient.

See also internal control templates in annex 5.

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Fraud prevention and detection

As programmed in the Commission’s overall anti-fraud strategy17, the PMO has developed and implemented its own anti-fraud strategy since 2013, on the basis

of the methodology provided by OLAF18. After analysis and pending the adoption of revised guidelines from OLAF, PMO issued in December 2017 a revised anti-fraud

strategy to elaborate the updated risk typology and provide information on the strategic

objectives it focuses on, as well as an action plan covering implementation of the strategy in 2018-2022.

The implementation of the strategy has been monitored twice a year, either in

management meetings or in ad-hoc meetings on specific cases. The legal sector created in 2015 at the PMO, ascertains the appropriate treatment of all potential cases (transfer

to OLAF and IDOC19 of cases and appropriate follow-up of cases transferred to PMO by OLAF or IDOC). Appropriate recoveries were performed on the cases to follow up (two

cases - 6.762,35 and 9.615,36 EUR offset recovered and 13.883,03 EUR prevented from

being unduly paid). In addition, the regular ex-post supervision carried out, as well as specific anti-fraud

related checks are included. The authorising officers by sub-delegation (AOSD) report twice per year on their activities to the Director with the obligation to explicitly mention

any anomalies that occurred. No material issues were reported. The degree of implementation of the anti-fraud strategy, internal control results and the evaluation of

the yearly risk analysis exercise covering also fraud-related risks, give reasonable

assurance that the fraud risk is sufficiently managed and mitigated. Other control objectives: safeguarding of assets and information, reliability of

reporting

Due to the nature of the activities carried out by the PMO, there is particular interest in

the management of information. To obtain sufficient assurance that all data processed is accurate and sufficiently protected, specific measures have been created and specific

indicators are closely supervised.

ranting of access to the Information Systems is centralised and a yearly

verification of all persons being granted access is carried out.

-to-day basis. No exceptions

were registered during the year.

was

created, based on the number of article 90 complaints that are upheld. The indicator for 2017 is 6.57% (against a target set below 10 %) of all complaints

received. However, the decision to uphold an article 90 complaint does not necessarily indicate that an error was committed when taking the initial decision.

17 COM(2011) 376 24.06.2011

18 European Anti-Fraud Office

19 Investigation and Disciplinary Office of the Commission

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The reimbursement of medical claims in the framework of the Joint Sickness Insurance Scheme (JSIS) and the payment of unemployment benefits result in additional control

objectives for the related JSIS fund and the Unemployment Fund. Hence, disregarding the fact that the PMO is not responsible for either fund, a number of control actions are

carried out by the Office:

r, resulting in a clean audit opinion in the previous years, including the most recent

audit report on financial year 2016;

evolution of the Unemployment Fund is carefully followed by the PMO with different services of the Commission (DG HR and DG BUDG). The fund increased

to almost EUR 20 million at the end of 2017. The evolution of this fund is reported to all stakeholders and addressed in an inter-DG working group.

In conclusion, both funds are submitted to follow-up controls set up by the PMO,

revealing no material issues.

2.1.2 Audit observations and recommendations

This section reports and assesses the observations, opinions and conclusions reported by 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.

The PMO is audited by both internal and external independent auditors: the Commission

Internal Audit Service (IAS) and the European Court of Auditors (ECA).

2.1.2.1 Audits carried out by the IAS

By 31 January 2018, the IAS had completed one audit on IT programme and project management in the HR family, which resulted in two recommendations rated 'very

important'. The IAS recommended that DG HR, as principal auditee during this audit,

strengthen its existing governance arrangements through a revision of the mandate of the HRMIS Steering Committee as well as the development of governance frameworks

for both data governance and IT service governance. With regard to IT project management, the IAS recommended to DG HR to strengthen its IT project management

process.

The recommendations from this audit also emphasise the opportunities to increase the

effectiveness and efficiently of IT governance, project and programme management. DG

HR, in close collaboration with the other stakeholders, has defined an action plan that sufficiently answers the IAS' recommendations.

By end 2017 there were five other outstanding recommendations that relate to:

Audit on effectiveness of the management of absenteeism in the Offices, which

resulted in one recommendation rated 'very important'.

The IAS recommended that PMO identify a reference sickness absence rate for the

Office, taking into consideration information on the sickness absence at the

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Commission and Family level. PMO is relying on input by DG HR and the delivery by DG HR of relevant data and tools.

An audit on the charge-back process, for which two recommendations rated “very important” are still outstanding relating to the availability of a catalogue of services

and to revisiting the calculation method of the total average staff cost. PMO has been working on both of these recommendations. The revised chargeback methodology

will be finalised in 2018.

Audit on PMO management of accidents' insurance: the IAC recommended

designing, developing and implementing an effective monitoring system of accident

files. Following a first follow-up, there was still insufficient information for IAS to assess progress to adequately mitigate the risk. PMO subsequently provided

evidence as to recording accident files in the ASSMAL2 system.

An audit on the implementation of the budget of the OLAF Supervisory Committee,

which resulted in two recommendations for the PMO. The report was classified by its originator as confidential. No further details can be provided in this document.

Following a first follow-up, the IAS could not close the recommendation on budget execution, as not all actions have been implemented. PMO has agreed to provide

further elements to IAS in 2018.

An Audit on IT programme and project management in the HR family, for which two recommendations rated "very important" are still outstanding, as presented

above.

Regarding the implementation of audit recommendations, the PMO is not entirely

independent due to reliance on DG HR developments on data and tools on absenteeism. The impact of the delay observed in implementing the very important recommendations

on the chargeback process, the accidents' insurance and the budget implementation of the OLAF Supervisory Committee is not judged by management as impeding its

assurance, as the majority has already been implemented and the current workflows are

maintained with an appropriate level of control.

The overall conclusion of management is that the level of progress in all internal control related aspects is satisfactory and that the outstanding recommendations have no

material impact on the global assurance.

2.1.2.2 IAS opinion

The Internal Auditor concluded on the state of internal control in PMO.

Based on all work undertaken by the IAS in the period 2015-2017, namely,

• Audit on effectiveness of the management of absenteeism in the Offices

(2015) • Audit on the charge back process (2016)

• Audit on the governance, planning, monitoring and implementation of the budget line of the OLAF Supervisory Committee (2016)

• Audit on IT programme and project management in the HR family (2017)

and taking into account that:

• management has adopted action plans to implement recommendations made by the IAS in 2015-2017 and accepted by management and which the

IAS considers adequate to address the residual risks identified by the auditors,

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• the implementation of these plans is monitored through reports by management and follow-up audits by the IAS,

• management has assessed a number of action plans as implemented which have not yet been followed up by the IAS, and,

• management has not rejected any 'critical' and/or 'very important' recommendations.

The Director of the IAS concluded that the internal control systems audited are partially

effective since a number of 'very important' recommendations remain to be addressed, in

line with the agreed action plans. The residual risks related to these recommendations may affect one or several internal control principles and/or components. Particular

attention should be given to the impact of the delays observed in implementing two "very important" recommendations on the management of accident insurance files and the

management of absenteeism.

2.1.2.3 Court of Auditors

In the context of DAS 2017 (launched in the second half of 2017), PMO has replied to questions and requests for additional information from the Court. At the end of March

2018, the final report from the Court has not been received yet.

2.1.2.4 Conclusion The audit work and opinions by both internal and external auditors reveals that the

internal control system in place at the PMO gives reasonable assurance regarding the achievement of the business objectives.

2.1.3 Assessment of the effectiveness of the internal

control systems

The PMO 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.

The inherent risks to which the PMO is exposed are related to the main fields of activity:

The establishment of entitlements requires profound knowledge and experience

of the staff regulations and legality and regularity criteria. A decision on an entitlement has recurring material financial implications for a long period

(depending on the nature of the entitlement);

A reimbursement claim can result from a decision made by another service

(recruitment, mission, leave, etc.) or from an individual request from a staff member. The vast number of claims, the shared responsibility with other services

and the varying complexity are also inherent risks to the achievement of PMO

objectives.

The Internal Control Template and the related control indicators are attached in Annex 5.

The PMO has assessed the internal control systems during the reporting year and has concluded that the internal control standards are implemented and

functioning as intended.

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This assessment was based on interviews with all PMO units together with individual contributions received, and consolidated globally for PMO as a whole. The evaluation of

the internal control standards did not reveal material issues with regards to the reasonable assurance given by the Director. The implementation of the standards shows

no deterioration compared to previous years.

Following a 2016 IAS audit detailed in part 2.1.2.1, PMO is in the process of reviewing its

charge back process which will be documented clearly to ensure transparency.

PMO keeps an up-to-date register of all its exceptions and non-compliance events, which

are dully notified to the Director, registered in Ares and published on MyIntracomm.

During 2017, no exceptions were registered. The registry of exceptions did not register any internal control weaknesses.

Further to this, the yearly risk analysis exercise, carried out by the Internal Control Coordinator, enabled the Office to update its risk registry and helped to prioritise the

Internal Control Standards for 2017. The risk analysis shows that the main risks are sufficiently managed by the Internal Control System. The exercise reiterated the critical

risk raised in 2016 regarding the high dependency of the PMO on IT applications and on its main provider DIGIT as well as on data quality.

In 2017, four sensitive posts are still occupied by the same staff member for a period

surpassing the five year threshold due to resource constraints. A risk analysis, already performed in 2015, revealed that the most cost-efficient solution was to not remove the

persons but add a level of supplementary review by management.

Finally, the results of ex-ante and ex-post controls carried out throughout the PMO in

2017 confirm that the total error rate remains consistently low. The ex-post results also provide assurance on the effectiveness of the ex-ante controls. The PMO continues to

invest in improving its control strategy using the control results. The low rate of errors found in ex-post controls proves internal control is effective and results only in a

relatively small number of errors to be corrected. This is supported by the low percentage

of error established year after year by the Court of Auditors and the error rates found in both ex-ante and ex-post control at PMO.

In conclusion, the internal control standards are effectively implemented.

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.

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, in her capacity as Authorising Officer by

Delegation has signed the Declaration of Assurance.

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2.1.5 Declaration of Assurance

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DECLARATION OF ASSURANCE

I, the undersigned,

Director of PMO

In my capacity as authorising officer by delegation

Declare that the information contained in this report gives a true and fair view20.

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.

Confirm that I am not aware of anything not reported here which could harm the

interests of the Office or those of the Commission .

Place …………….., date ………………

…………………………………..…

(signature)

Veronica GAFFEY

20 True and fair in this context means a reliable, complete and correct view on the state of affairs in the

DG/Executive Agency.

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2.2 Other organisational management dimensions

2.2.1 Human resource management

The Commision adopted in 2016 the Communication “Synergies and Efficiencies in the

Commission – New ways of working”, which foresees the centralisation of several support functions, including the HR, mail clerk and ‘gestionnaire des biens’ functions. On

16/02/2017, PMO was involved in the 2 pilot exercises, leading to a suppression of the local HR unit. A new HR Business correspondent team was created (2 people) to work on

the PMO HR strategic issues while the AMC (Account Management Center) in DG HR was

providing support to PMO management and staff on all HR functions. A new "SPOC" function (single point of contact) was created in each DG to allow OIB to work on this

centralisation of "gestionniare des biens" functions.

Throughout 2017, the PMO HR BC team worked in close cooperation with the AMC in order to increase the costumer service given to PMO staff and PMO management on HR

issues. Regarding the OIB pilot exercise, it ends on 01/01/2018 but the "spoc" functions should be reviewed by OIB.

The PMO pays particular attention to internal mobility, to ensure an adequate talent pool and to promote staff engagement. A significant number of experienced staff is expected

to retire in the coming years, requiring adequate succession planning to ensure business continuity for key functions. Ensuring the right person in the right place at the right time,

internal mobility, nurturing of a sufficiently deep talent pool and staff engagement are, therefore, the major pillars of the PMO's human resources and internal communication

policies.

Annex 2 gives detailed information on the achievements of PMO's objectives and output

for 2017.

(Post and/or person)

ABB Activity Officials and

temporary staff

Contractual

agents

Other external

personnel

Total

Administration 164(1) 411(2) 19 594

(1) 164 job quotas available in Sysper on 31/12/2017: 37 AD and 127 AST posts. (2) 411 contractual agents on 31/12/2017. 219 paid on budgetary appropriations,

185 paid on earmarked revenues.

2.2.2 Better regulation (only for DGs managing regulatory acquis)

Not applicable

2.2.3 Information management aspects

The Commission continues to follow the corporate strategy for data, knowledge and

information management adopted in October 2016. The strategy establishes a corporate framework while leaving room for DGs to develop and implement their own approaches

tailored to their unique needs.

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PMO has always kept and will continue to keep the number of registered documents that are not filed to a strict minimum. To achieve this, reports are produced and sent to the

DMO correspondents in the Units.

2.2.4 External communication activities

External communication for PMO relates to communication for the staff in general (from the Commission, other Institutions, retirees, etc.). There is no communication to EU

citizens and as a result no indicator from the Eurobarometer metrics.

In terms of external communication to staff and pensioners, PMO aims to provide high-

quality information, tailored to their specific needs. For example, PMO published information for retired people in 'VOX' and 'Info Senior', the newsletters of the

associations of retired staff. Information published on the different media is regularly updated. Requests for information and questions asked via PMO contact were handled

effectively (see part I on key results relating to specific objective 2 on "Offering better quality of customer service").

In terms of internal communication, PMO informed the staff of the Office about the

subjects that concern them, aiming to promote within the office a strong team spirit and

commitment to providing quality service.

Please refer to Annex 2 and 12 for further details.

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ANNEXES

ANNEX 1: Statement of the Resources Director

I declare that in accordance with the Commission’s communication on clarification of the

responsibilities of the key actors in the domain of internal audit and internal control in

the Commission21, I have reported my advice and recommendations to the Director-

General/Executive Director on the overall state of internal control in PMO.

I hereby certify that the information provided in Section 2 of the present AAR and in its

annexes is, to the best of my knowledge, accurate and complete.”

Date …

[signed]

Jean-Pierre Vanderstraeten

21 Communication to the Commission: Clarification of the responsibilities of the key actors in the domain

of internal audit and internal control in the Commission; SEC(2003)59 of 21.01.2003.

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ANNEX 2: Reporting – Human Resources, Better Regulation, Information Management and External

Communication

This annex is the annex of section 2.2 "Other organisational management dimensions".

Objective 1: The Office deploys effectively its resources in support of the

delivery of the Commission's priorities and core business, has a competent and

engaged workforce, which is driven by an effective and gender-balanced

management and which can deploy its full potential within supportive and

healthy working conditions.

Indicator 1: Female representation at middle management level

--- New indicator and target set in July -2017

Baseline (n.a.) Target (2020)

The college adopted on 19/07/2017 a

renewed approach to its commitment to

reach at least 40% female managers by the

end of 2019 and has adopted quantitative

targets of first female appointments to be

made per Directorate-General and service at

middle management level.

The new target of first female appointment to

be made by PMO by end of 2019 is 1.

Latest known results

n.a.

1 by end 2019

Indicator 2: Staff engagement index

Source of data: Commission staff survey (latest one: 2016)

58 % 70% 59% (2016)

Objective 2: Recruit, train, assess, motivate and retain highly qualified staff and

continue to develop, implement, monitor and adapt an effective internal

communication strategy.

Indicator 1: Implementation rate of "Optimisation of Working Conditions Action

Plan"

Baseline (2015) Target (2020)


(2017)

N/A 100% 100%

The maximum

telework, flexitime

and other working

conditions are

implemented in all

PMO units.

Indicator 2: Ratio between vacancies published/vacancies filled (including

vacancies without prior publication)

55% > 80% 95%

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Indicator 3: Reduce rate of absenteeism:

Following an IAS audit, the identification of a reference sickness absence rate (for PMO)

and regular monitoring of these statistics were intended by end-2016, on the basis of

input by DG HR and the delivery by DG HR of relevant data and tools

1st semester

2015: 6.83%

100% 95%

Quarterly follow-up of the absenteeism

statistics and patterns

7.3%

Identification of specific factors of influence

for which DG HR will be asked to produce

relevant data

(relying on DG HR to

produce relevant

data)

Main outputs in 2017:

Description Indicator Target Result

Reinforce PMO's management culture at

all levels with particular attention on how to

provide feedback, to deal with conflicts and

underperformance and

to ensure a respectful environment

Assess training needs of all staff

involved in management

functions

PMO management

culture reinforced

Improvement of managerial

soft skills

Assessment of training needs in ongoing.

Mapping of all

management training followed is done.

Information on

Specific trainings on conflict management;

resilience, how to work in a collaborative

space, underperformance,

etc.. have been done.

Improve working

conditions

% staff satisfaction

with working environment

Increase 100% of the

possibilities of telework / flexitime

and working formulas are offered to the staff

in order to reconcile their professional and

private life. Telework

has been increased to face the adaptation to

the new environment for staff in Brussels

(open-space). Trainings have been

performed on how to work in an open

space.

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Information management

Objective: Information and knowledge in your Office is shared and reusable by

other DGs. Important documents are registered, filed and retrievable

Indicator 1: Percentage of registered documents that are not filed (ratio)

Source of data: Hermes-Ares-Nomcom (HAN) statistics

Baseline

(2014)

Target

(2020)


(2017)

0.04 % 0.05 % 0.05%

Indicator 2: Number of HAN files readable/accessible by all units in the Office

Source of data: HAN statistics

Due to the nature of PMO activities, close to 95 % of all HAN files contain personal data.

Hence, the PMO only grants access to these sensitive documents on a 'need to know'

basis.

There are 5,43 % HAN files readable/ accessible by all units in the Office.

Indicator 3: Number of HAN files shared with other DGs

Source of data: HAN statistics

Due to the nature of PMO activities, close to 95 % of all HAN files contain personal data.

Hence, the PMO only grants access to these sensitive documents on a 'need to know'

basis. As a result, 4,11 % of HAN files are shared with other DGs.

Communication

External communication for the Office corresponds to communication for the staff in general (from the Commission, other Institutions, retirees, etc.). There is no

communication to the EU citizens and as a result no indicator relating to the Eurobarometer metrics.

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ANNEX 3: Draft annual accounts and financial reports

AAR 2017 Version 4

Annex 3 Financial Reports - DG PMO - Financial Year 2017

Table 1 : Commitments

Table 2 : Payments

Table 3 : Commitments to be settled

Table 4 : Balance Sheet

Table 5 : Statement of Financial Performance

Table 5 Bis: Off Balance Sheet

Table 6 : Average Payment Times

Table 7 : Income

Table 8 : Recovery of undue Payments

Table 9 : Ageing Balance of Recovery Orders

Table 10 : Waivers of Recovery Orders

Table 11 : Negotiated Procedures (excluding Building Contracts)

Table 12 : Summary of Procedures (excluding Building Contracts)

Table 13 : Building Contracts

Table 14 : Contracts declared Secret

The accounting situation presented in the Balance Sheet and Statement of Financial

Performance does not include the accruals and deferrals calculated centrally by the

services of the Accounting Officer.

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Additional comments

Note : The figures are those related to the provisional Annex 3 Financial Reports - DG PMO

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accounts and not yet audited by the Court of Auditors Report printed on 15/02/2018

TABLE 1: OUTTURN ON COMMITMENT APPROPRIATIONS IN 2017 (in Mio €)

Commitment appropriations

authorised

Commitments made

%

1 2 3=2/1

Title 01 Economic and financial affairs

01 01 01 Administrative expenditure of the 'Economic and financial affairs' policy area

3.265194 3.262414 99.91 %

Total Title 01 3.265194 3.262414 99.91%

Title 02 Internal market, industry, entrepreneurship and SMEs

02 02 01 Administrative expenditure of the 'Internal market, industry, entrepreneurship and SMEs' policy area

5.273883 5.27342293 99.99 %

Total Title 02 5.273883 5.27342293 99.99%

Title 03 Competition

03 03 01 Administrative expenditure of the 'Competition' policy area

4.542059 4.54098935 99.98 %

Total Title 03 4.542059 4.54098935 99.98%

Title 04 Employment, social affairs and inclusion

04 04 01 Administrative expenditure of the 'Employment, social affairs and inclusion' policy area

4.242732 4.06144836 95.73 %

Total Title 04 4.242732 4.06144836 95.73%

Title 05 Agriculture and rural development

05 05 01 Administrative expenditure of the 'Agriculture and rural development' policy area

3.39556313 3.38832316 99.79 %

Total Title 05 3.39556313 3.38832316 99.79%

Title 06 Mobility and transport

06 06 01 Administrative expenditure of the 'Mobility and transport' policy area

2.44610879 2.3779647 97.21 %

Total Title 06 2.44610879 2.3779647 97.21%

Title 07 Environment

07 07 01 Administrative expenditure of the 'Environment' policy area

3.949495 3.94918617 99.99 %

Total Title 07 3.949495 3.94918617 99.99%

Title 08 Research and innovation

08 08 01 Administrative expenditure of the 'Research and innovation' policy area

0.333599 0.19903706 59.66 %

Total Title 08 0.333599 0.19903706 59.66%

Title 09 Communications networks, content and technology

09 09 01 Administrative expenditure of the 'Communications networks, content and technology' policy area

3.42373739 3.42373739 100.00 %

Total Title 09 3.42373739 3.42373739 100.00%

Title 11 Maritime affairs and fisheries

11 11 01 Administrative expenditure of the 'Maritime affairs and fisheries' policy area

2.46528908 2.46528908 100.00 %

Total Title 11 2.46528908 2.46528908 100.00%


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Title 12 Financial stability, financial services and capital markets union

12 12 01 Administrative expenditure of the 'Financial stability, financial services and capital markets union' policy area

2.56395503 2.47816578 96.65 %

Total Title 12 2.56395503 2.47816578 96.65%

Title 13 Regional and urban policy

13 13 01 Administrative expenditure of the 'Regional and urban policy' policy area

2.175349 2.175349 100.00 %

Total Title 13 2.175349 2.175349 100.00%

Title 14 Taxation and customs union

14 14 01 Administrative expenditure of the 'Taxation and customs union' policy area

3.357826 3.357826 100.00 %

Total Title 14 3.357826 3.357826 100.00%

Title 15 Education and culture

15 15 01 Administrative expenditure of the 'Education and culture' policy area

2.74261064 2.73497929 99.72 %

Total Title 15 2.74261064 2.73497929 99.72%

Title 16 Communication

16 16 01 Administrative expenditure of the 'Communication' policy area

15.966782 15.963135 99.98 %

Total Title 16 15.966782 15.963135 99.98%

Title 17 Health and food safety

17 17 01 Administrative expenditure of the 'Health and food safety' policy area

6.85388243 6.77310843 98.82 %

Total Title 17 6.85388243 6.77310843 98.82%

Title 18 Migration and home affairs

18 18 01 Administrative expenditure of the 'Migration and home affairs' policy area

3.00160454 2.87077909 95.64 %

Total Title 18 3.00160454 2.87077909 95.64%

Title 19 Foreign policy instruments

19 19 01 Administrative expenditure of the 'Foreign policy instruments' policy area

2.080828 2.080828 100.00 %

Total Title 19 2.080828 2.080828 100.00%

Title 20 Trade

20 20 01 Administrative expenditure of the 'Trade' policy area

2.47675506 2.47675506 100.00 %

Total Title 20 2.47675506 2.47675506 100.00%

Title 21 International cooperation and development

21 21 01 Administrative expenditure of the 'International cooperation and development' policy area

1.93293962 1.93293962 100.00 %

Total Title 21 1.93293962 1.93293962 100.00%

Title 22 Neighbourhood and enlargement negotiations

22 22 01 Administrative expenditure of the 'Neighbourhood and enlargement negotiations' policy area

1.757469 1.75720863 99.99 %

Total Title 22 1.757469 1.75720863 99.99%


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Title 23 Humanitarian aid and civil protection

23 23 01 Administrative expenditure of the 'Humanitarian aid and civil protection' policy area

2.536137 2.536137 100.00 %

Total Title 23 2.536137 2.536137 100.00%

Title 24 Fight against fraud

24 24 01 Administrative expenditure of the 'Fight against fraud' policy area

0.203342 0.19623 96.50 %

Total Title 24 0.203342 0.19623 96.50%

Title 25 Commission's policy coordination and legal advice

25 25 01 Administrative expenditure of the 'Commission's policy coordination and legal advice' policy area

28.43988136 27.9882376 98.41 %

Total Title 25 28.43988136 27.9882376 98.41%

Title 26 Commission's administration

26 26 01 Administrative expenditure of the 'Commission's administration' policy area

153.2003331 138.187457 90.20 %

Total Title 26 153.2003331 138.187457 90.20%

Title 27 Budget

27 27 01 Administrative expenditure of the 'Budget' policy area

3.24616687 2.91564733 89.82 %

Total Title 27 3.24616687 2.91564733 89.82%

Title 28 Audit

28 28 01 Administrative expenditure of the 'Audit' policy area

0.6854048 0.60857836 88.79 %

Total Title 28 0.6854048 0.60857836 88.79%

Title 29 Statistics

29 29 01 Administrative expenditure of the 'Statistics' policy area

5.537416 5.537416 100.00 %

Total Title 29 5.537416 5.537416 100.00%

Title 30 Pensions and related expenditure

30 30 01 Administrative expenditure of the 'Pensions and related expenditure' policy area

1808.827874 1799.52137 99.49 %

Total Title 30 1808.827874 1799.52137 99.49%

Title 31 Language services

31 31 01 Administrative expenditure of the 'Language services' policy area

10.657536 10.1074776 94.84 %

Total Title 31 10.657536 10.1074776 94.84%

Title 32 Energy

32 32 01 Administrative expenditure in the 'Energy' policy area

2.778099 2.77645302 99.94 %

Total Title 32 2.778099 2.77645302 99.94%

Title 33 Justice and consumers

33 33 01 Administrative expenditure of the 'Justice and consumers' policy area

3.738037 3.71807213 99.47 %

Total Title 33 3.738037 3.71807213 99.47%

Note : The figures are those related to the provisional Annex 3 Financial Reports - DG PMO accounts and not yet audited by the Court of Auditors Report printed on 15/02/2018

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Title 34 Climate action

34 34 01 Administrative expenditure in the 'Climate action' policy area

1.62088837 1.61142592 99.42 %

Total Title 34 1.62088837 1.61142592 99.42%

Title XX Administrative Expenditure allocated to policy areas

XX XX 01 Administrative Expenditure allocated to policy areas

2207.487021 2132.75983 96.61 %

Total Title XX 2207.487021 2132.75983 96.61%

Total DG PMO 4307.205798 4206.00722 97.65 %

* Commitment appropriations authorised include, in addition to the budget voted by the legislative authority, appropriations carried over from the previous exercise, budget amendments as well as miscellaneous commitment appropriations for the period (e.g. internal and external assigned revenue).


0, %

20, %

40, %

60, %

80, %

100, %

120, %

% Outturn on commitment appropriations

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TABLE 2: OUTTURN ON PAYMENT APPROPRIATIONS IN 2017 (in Mio €)

Chapter Payment

appropriations authorised *

Payments made %

1 2 3=2/1

Title 01 Economic and financial affairs


9.79596982 7.43276855 75.88 %

Total Title 01 9.79596982 7.43276855 75.88%

Title 02 Internal market, industry, entrepreneurship and SMEs


22.53844064 19.15298463 84.98 %

Total Title 02 22.53844064 19.15298463 84.98%

Title 03 Competition


5.98523524 6.32485798 105.67 %

Total Title 03 5.98523524 6.32485798 105.67%

Title 04 Employment, social affairs and inclusion


23.09535781 15.11985043 65.47 %

04 03 Employment, Social Affairs and Inclusion 0.47156614 0.47203218 100.10 %

Total Title 04 23.56692395 15.59188261 66.16%

Title 05 Agriculture and rural development


15.9731707 12.45800232 77.99 %

05 04 Rural development 0.7 0.20544662 29.35 %

Total Title 05 16.6731707 12.66344894 75.95%

Title 06 Mobility and transport


13.74976595 11.19730708 81.44 %

06 02 European transport policy 1.02797844 1.0179691 99.03 %

Total Title 06 14.77774439 12.21527618 82.66%

Title 07 Environment


5.14827153 6.40644451 124.44 %

Total Title 07 5.14827153 6.40644451 124.44%

Title 08 Research and innovation


143.7425512 140.7250622 97.90 %

Total Title 08 143.7425512 140.7250622 97.90%

Title 09 Communications networks, content and technology


58.03374351 54.45170652 93.83 %

09 02 Digital single market 0.14241703 0.14241703 100.00 %

Total Title 09 58.17616054 54.59412355 93.84%


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Title 10

10 10 01 Administrative expenditure of the 'Direct research' policy area

292.5689758 284.4269693 97.22 %

Total Title 10 292.5689758 284.4269693 97.22%

Title 11 Maritime affairs and fisheries


3.29161201 6.7116785 203.90 %

11 06 European Maritime and Fisheries Fund (EMFF) 0 1.16671555

Total Title 11 3.29161201 7.87839405 239.35%

Title 12 Financial stability, financial services and capital markets union


4.24073769 4.10605493 96.82 %

Total Title 12 4.24073769 4.10605493 96.82%

Title 13 Regional and urban policy


3.70942207 9.89039903 266.63 %

Total Title 13 3.70942207 9.89039903 266.63%

Title 14 Taxation and customs union


5.5250341 5.86013504 106.07 %

Total Title 14 5.5250341 5.86013504 106.07%

Title 15 Education and culture


4.11319108 7.34094108 178.47 %

Total Title 15 4.11319108 7.34094108 178.47%

Title 16 Communication


18.9992591 18.62764188 98.04 %

Total Title 16 18.9992591 18.62764188 98.04%

Title 17 Health and food safety


17.60694511 13.54430424 76.93 %

17 03 Public health 0.2872782 0.2905305 101.13 %

Total Title 17 17.89422331 13.83483474 77.31%

Title 18 Migration and home affairs


7.68636998 7.89591664 102.73 %

18 02 Internal security 0.1 0.02421344 24.21 %

Total Title 18 7.78636998 7.92013008 101.72%


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Title 19 Foreign policy instruments


2.70664261 7.58499372 280.24 %

19 03 Common foreign and security policy (CFSP) 0 0.01078288

19 04 Election observation missions (EU EOMs) 0 0.34666987

Total Title 19 2.70664261 7.94244647 293.44%

Title 20 Trade

20 20 01 Administrative expenditure of the 'Trade' policy area 3.82926276 6.83011552 178.37 %

Total Title 20 3.82926276 6.83011552 178.37%

Title 21 International cooperation and development


8.01810182 82.28497417 1026.24 %

Total Title 21 8.01810182 82.28497417 1,026.24%

Title 22 Neighbourhood and enlargement negotiations


9.71252913 42.87211672 441.41 %

Total Title 22 9.71252913 42.87211672 441.41%

Title 23 Humanitarian aid and civil protection


12.11010552 7.81049629 64.50 %

Total Title 23 12.11010552 7.81049629 64.50%

Title 24 Fight against fraud


0.64731976 41.17227196 6360.42 %

Total Title 24 0.64731976 41.17227196 6,360.42%

Title 25 Commission's policy coordination and legal advice


31.98487762 29.12344332 91.05 %

Total Title 25 31.98487762 29.12344332 91.05%

Title 26 Commission's administration


224.8473249 205.0963589 91.22 %

Total Title 26 224.8473249 205.0963589 91.22%

Title 27 Budget

27 27 01 Administrative expenditure of the 'Budget' policy area 3.5656634 3.16093811 88.65 %

Total Title 27 3.5656634 3.16093811 88.65%

Title 28 Audit

28 28 01 Administrative expenditure of the 'Audit' policy area 0.6854048 0.60740633 88.62 %

Total Title 28 0.6854048 0.60740633 88.62%

Title 29 Statistics

29 29 01 Administrative expenditure of the 'Statistics' policy area 13.65027144 10.64069756 77.95 %

Total Title 29 13.65027144 10.64069756 77.95%


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Title 30 Pensions and related expenditure


1808.827874 1799.521366 99.49 %

Total Title 30 1808.827874 1799.521366 99.49%

Title 31 Language services


15.57104699 13.99091768 89.85 %

Total Title 31 15.57104699 13.99091768 89.85%

Title 32 Energy

32 32 01 Administrative expenditure in the 'Energy' policy area 14.95793313 13.24809346 88.57 %

32 02 Conventional and renewable energy 0.015 0.00828051 55.20 %

32 03 Nuclear energy 3.025 2.57170011 85.01 %

Total Title 32 17.99793313 15.82807408 87.94%

Title 33 Justice and consumers


5.1187034 5.35407729 104.60 %

33 04 Consumer programme 0.22930218 0.22930218 100.00 %

Total Title 33 5.34800558 5.58337947 104.40%

Title 34 Climate action


2.29726636 2.56435541 111.63 %

Total Title 34 2.29726636 2.56435541 111.63%

Title XX Administrative Expenditure allocated to policy areas

XX XX 01

Administrative Expenditure allocated to policy areas 2207.519021 2132.956001 96.62 %

Total Title XX 2207.519021 2132.956001 96.62%

Total DG PMO 5027.851945 5042.977708 100.30 %

* Payment appropriations authorised include, in addition to the budget voted by the legislative authority, appropriations carried over from the previous exercise, budget amendments as well as miscellaneous payment appropriations for the period (e.g. internal and external assigned revenue). Note : The figures are those related to the provisional Annex 3 Financial Reports - DG PMO accounts and not yet audited by the Court of Auditors Report printed on 15/02/2018

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0, %

1000, %

2000, %

3000, %

4000, %

5000, %

6000, %

7000, %

="% Outturn on payment appropriations"

of 99

TABLE 3 : BREAKDOWN OF COMMITMENTS TO BE SETTLED AT 31/12/2017 (in Mio €)

2017 Commitments to be settled Commitments to

be settled from

Total of commitments to be

settled at end

Total of commitments to be settled at end

Chapter Commitments 2017

Payments 2017 RAL 2017 % to be settled financial years previous to 2017

of financial year 2017


1 2 3=1-2 4=1-2/1 5 6=3+5 7

Title 01 : Economic and financial affairs


3.26 2.18 1.08 33.17 % 0.00 1.08 1.57

Total Title 01 3.26 2.18 1.08 33.17% 0 1.08 1.57

Title 02 : Internal market, industry, entrepreneurship and SMEs


5.27 4.06 1.21 23.03 % 0.00 1.21 1.22

Total Title 02 5.27 4.06 1.21 23.03% 0 1.21 1.22

Title 03 : Competition


4.54 3.57 0.97 21.31 % 0.00 0.97 1.19

Total Title 03 4.54 3.57 0.97 21.31% 0 0.97 1.19

Title 04 : Employment, social affairs and inclusion


4.06 3.29 0.78 19.08 % 0.00 0.78 0.85

Total Title 04 4.06 3.29 0.78 19.08% 0 0.78 0.85

Title 05 : Agriculture and rural development


3.39 2.93 0.46 13.54 % 0.00 0.46 0.49

Total Title 05 3.39 2.93 0.46 13.54% 0 0.46 0.49

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be settled from


settled at end






1 2 3=1-2 4=1-2/1 5 6=3+5 7

Title 06 : Mobility and transport


2.38 1.56 0.82 34.46 % 0.00 0.82 0.95

Total Title 06 2.38 1.56 0.82 34.46% 0 0.82 0.95

Title 07 : Environment


3.95 3.51 0.44 11.09 % 0.00 0.44 0.60

Total Title 07 3.95 3.51 0.44 11.09% 0 0.44 0.60

Title 08 : Research and innovation


0.20 0.20 0.00 0.00 % 0.00 0.00 0.00

Total Title 08 0.20 0.20 0.00 0.00% 0 0.00 0.00

Title 09 : Communications networks, content and technology


3.42 1.87 1.56 45.45 % 0.00 1.56 1.31

Total Title 09 3.42 1.87 1.56 45.45% 0 1.56 1.31

Title 11 : Maritime affairs and fisheries


2.47 2.19 0.28 11.33 % 0.00 0.28 0.37

Total Title 11 2.47 2.19 0.28 11.33% 0 0.28 0.37


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be settled from


settled at end






1 2 3=1-2 4=1-2/1 5 6=3+5 7

Title 12 : Financial stability, financial services and capital markets union


2.48 1.18 1.30 52.32 % 0.00 1.30 1.44

Total Title 12 2.48 1.18 1.30 52.32% 0 1.30 1.44

Title 13 : Regional and urban policy


2.18 1.56 0.61 28.23 % 0.00 0.61 0.51

Total Title 13 2.18 1.56 0.61 28.23% 0 0.61 0.51

Title 14 : Taxation and customs union


3.36 1.48 1.88 55.91 % 0.00 1.88 1.71

Total Title 14 3.36 1.48 1.88 55.91% 0 1.88 1.71

Title 15 : Education and culture


2.73 2.25 0.48 17.71 % 0.00 0.48 0.62

Total Title 15 2.73 2.25 0.48 17.71% 0 0.48 0.62

Title 16 : Communication


15.96 15.92 0.05 0.29 % 0.00 0.05 0.05

Total Title 16 15.96 15.92 0.05 0.29% 0 0.05 0.05


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be settled from


settled at end






1 2 3=1-2 4=1-2/1 5 6=3+5 7

Title 17 : Health and food safety


6.77 5.45 1.33 19.58 % 0.00 1.33 1.31

Total Title 17 6.77 5.45 1.33 19.58% 0 1.33 1.31

Title 18 : Migration and home affairs


2.87 1.93 0.94 32.66 % 0.00 0.94 0.37

Total Title 18 2.87 1.93 0.94 32.66% 0 0.94 0.37

Title 19 : Foreign policy instruments


2.08 2.01 0.07 3.47 % 0.00 0.07 0.09

Total Title 19 2.08 2.01 0.07 3.47% 0 0.07 0.09

Title 20 : Trade

20 20 01 Administrative expenditure of the 'Trade' policy area

2.48 1.95 0.53 21.38 % 0.00 0.53 0.65

Total Title 20 2.48 1.95 0.53 21.38% 0 0.53 0.65

Title 21 : International cooperation and development


1.93 1.22 0.71 36.64 % 0.00 0.71 0.76

Total Title 21 1.93 1.22 0.71 36.64% 0 0.71 0.76

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be settled from


settled at end






1 2 3=1-2 4=1-2/1 5 6=3+5 7

Title 22 : Neighbourhood and enlargement negotiations


1.76 1.74 0.02 1.09 % 0.00 0.02 0.13

Total Title 22 1.76 1.74 0.02 1.09% 0 0.02 0.13

Title 23 : Humanitarian aid and civil protection


2.54 1.95 0.58 23.03 % 0.00 0.58 0.75

Total Title 23 2.54 1.95 0.58 23.03% 0 0.58 0.75

Title 24 : Fight against fraud


0.20 0.19 0.00 0.82 % 0.00 0.00 0.04

Total Title 24 0.20 0.19 0.00 0.82% 0 0.00 0.04

Title 25 : Commission's policy coordination and legal advice


27.96 26.77 1.18 4.23 % 0.00 1.18 1.63

Total Title 25 27.96 26.77 1.18 4.23% 0 1.18 1.63

Title 26 : Commission's administration


138.19 135.73 2.46 1.78 % 0.00 2.46 5.25

Total Title 26 138.19 135.73 2.46 1.78% 0 2.46 5.25

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be settled from


settled at end






1 2 3=1-2 4=1-2/1 5 6=3+5 7

Title 27 : Budget

27 27 01 Administrative expenditure of the 'Budget' policy area

2.92 2.64 0.28 9.53 % 0.00 0.28 0.19

Total Title 27 2.92 2.64 0.28 9.53% 0 0.28 0.19

Title 28 : Audit

28 28 01 Administrative expenditure of the 'Audit' policy area

0.61 0.61 0.00 0.19 % 0.00 0.00 0.00

Total Title 28 0.61 0.61 0.00 0.19% 0 0.00 0.00

Title 29 : Statistics

29 29 01 Administrative expenditure of the 'Statistics' policy area

5.54 3.56 1.98 35.77 % 0.00 1.98 1.79

Total Title 29 5.54 3.56 1.98 35.77% 0 1.98 1.79

Title 30 : Pensions and related expenditure


1799.52 1799.52 0.00 0.00 % 0.00 0.00 0.00

Total Title 30 1799.52 1799.52 0.00 0.00% 0 0.00 0.00

Title 31 : Language services


10.11 9.83 0.27 2.71 % 0.00 0.27 0.27

Total Title 31 10.11 9.83 0.27 2.71% 0 0.27 0.27


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be settled from


settled at end






1 2 3=1-2 4=1-2/1 5 6=3+5 7

Title 32 : Energy

32 32 01 Administrative expenditure in the 'Energy' policy area

2.78 2.06 0.72 25.90 % 0.00 0.72 0.56

Total Title 32 2.78 2.06 0.72 25.90% 0 0.72 0.56

Title 33 : Justice and consumers


3.72 3.05 0.67 17.99 % 0.00 0.67 0.62

Total Title 33 3.72 3.05 0.67 17.99% 0 0.67 0.62

Title 34 : Climate action


1.61 1.17 0.44 27.46 % 0.00 0.44 0.51

Total Title 34 1.61 1.17 0.44 27.46% 0 0.44 0.51

Title XX : Administrative Expenditure allocated to policy areas

XX XX 01 Administrative Expenditure allocated to policy areas

2132.76 2132.76 0.00 0.00 % 0.00 0.00 0.00

Total Title XX 2132.76 2132.76 0.00 0.00% 0 0.00 0.00

Total DG PMO 4205.97 4181.88 24.09 0.57 % 0 24.09 27.80

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0,00

0,50

1,00

1,50

2,00

2,50

3,00

="Breakdown of Commitments remaining to be settled (in Mio EUR)"

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TABLE 4 : BALANCE SHEET PMO

BALANCE SHEET 2017 2016

A.I. NON CURRENT ASSETS

4,352,013.70

5,083,912.69

A.I.1. Intangible Assets

4,352,013.70

5,083,912.69

A.I.6. Non-Cur Exch Receiv & Non-Ex Recoverab

-

-

A.II. CURRENT ASSETS

18,766,516.19

11,576,074.18

A.II.3. Curr Exch Receiv &Non-Ex Recoverables

18,748,634.47

11,558,201.96

A.II.6. Cash and Cash Equivalents

17,881.72

17,872.22

ASSETS

23,118,529.89

16,659,986.87

P.I. NON CURRENT LIABILITIES

-

-

P.I.1. Non-Current Pension &other Empl Benef

-

-

P.II. CURRENT LIABILITIES

(88,089,954.05)

(2,873,340,828.45)

P.II.2. Current Provisions

(9,330,164.00)

(1,963,150.00)

P.II.4. Current Payables

(78,613,598.32)

(2,778,816,531.93)

P.II.5. Current Accrued Charges &Defrd Income

(146,191.73)

(92,561,146.52)

LIABILITIES

(88,089,954.05)

(2,873,340,828.45)

NET ASSETS (ASSETS less LIABILITIES)

(64,971,424.16)

(2,856,680,841.58)

P.III.2. Accumulated Surplus/Deficit 9,495,654,895.07

7,014,893,574.28

Non-allocated central (surplus)/deficit* -9,430,683,470.91

(4,158,212,732.70)

TOTAL 0.00 0.00

It should be noted that the balance sheet and statement of financial performance presented in Annex 3 to this Annual Activity Report, represent only the assets, liabilities, expenses and revenues that are under the control of this Directorate General. Significant amounts such as own resource revenues and cash held in Commission bank accounts are not included in this Directorate General's accounts since they are managed centrally by DG Budget, on whose balance sheet and statement of financial performance they appear. Furthermore, since the accumulated result of the Commission is not split amongst the various Directorates General, it can be seen that the balance sheet presented here is not in equilibrium. Additionally, the figures included in tables 4 and 5 are provisional since they are, at this date, still subject to audit by the Court of Auditors. It is thus possible that amounts included in these tables may have to be adjusted following this audit. Note : The figures are those related to the provisional Annex 3 Financial Reports - DG PMO

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TABLE 5 : STATEMENT OF FINANCIAL PERFORMANCE PMO

STATEMENT OF FINANCIAL PERFORMANCE 2017 2016

II.1 REVENUES -850183646.9 -815389383.9

II.1.1. NON-EXCHANGE REVENUES -827652503.2 -797752527.1

II.1.1.5. RECOVERY OF EXPENSES -707.99

II.1.1.6. OTHER NON-EXCHANGE REVENUES -827,652,503.22 -797,751,819.12

II.1.2. EXCHANGE REVENUES -22531143.69 -17636856.82

II.1.2.1. FINANCIAL INCOME -24.09 49.70

II.1.2.2. OTHER EXCHANGE REVENUE -22,531,119.60 -17,636,906.52

II.2. EXPENSES 3287761463 3296150705

II.2. EXPENSES 3287761463 3296150705

II.2.10.OTHER EXPENSES 122,422,142.28 99,661,937.65

II.2.2. EXP IMPLEM BY COMMISS&EX.AGENC. (DM) 6,239,587.25 6,249,934.99

II.2.6. STAFF AND PENSION COSTS 3,158,867,830.18 3,189,861,455.27

II.2.8. FINANCE COSTS 231,902.99 377,376.81

STATEMENT OF FINANCIAL PERFORMANCE 2,437,577,815.79 2,480,761,320.79

It should be noted that the balance sheet and statement of financial performance presented in Annex 3 to this Annual Activity Report, represent only the assets, liabilities, expenses and revenues that are under the control of this Directorate General. Significant amounts such as own resource revenues and cash held in Commission bank accounts are not included in this Directorate General's accounts since they are managed centrally by DG Budget, on whose balance sheet and statement of financial performance they appear. Furthermore, since the accumulated result of the Commission is not split amongst the various Directorates General, it can be seen that the balance sheet presented here is not in equilibrium. Additionally, the figures included in tables 4 and 5 are provisional since they are, at this date, still subject to audit by the Court of Auditors. It is thus possible that amounts included in these tables may have to be adjusted following this audit.


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TABLE 5bis : OFF BALANCE SHEET PMO

OFF BALANCE 2017 2016

OB.2. Contingent Liabilities 0 -5714593

OB.2.7. CL Amounts relating to legal cases 0.00 -5,714,593.00

OB.3. Other Significant Disclosures 0

OB.3.2. Comm against app. not yet consumed 0.00

OB.4. Balancing Accounts 0 5714593

OB.4. Balancing Accounts 0.00 5,714,593.00

OFF BALANCE 0.00 0.00

It should be noted that the balance sheet and statement of financial performance presented in Annex 3 to this Annual Activity Report, represent only the assets, liabilities, expenses and revenues that are under the control of this Directorate General. Significant amounts such as own resource revenues and cash held in Commission bank accounts are not included in this Directorate General's accounts since they are managed centrally by DG Budget, on whose balance sheet and statement of financial performance they appear. Furthermore, since the accumulated result of the Commission is not split amongst the various Directorates General, it can be seen that the balance sheet presented here is not in equilibrium. Additionally, the figures included in tables 4 and 5 are provisional since they are, at this date, still subject to audit by the Court of Auditors. It is thus possible that amounts included in these tables may have to be adjusted following this audit.


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TABLE 6: AVERAGE PAYMENT TIMES FOR 2017 - DG PMO

Legal Times

Maximum Payment

Time (Days)

Total Number of Payments

Nbr of Payments

within Time Limit

Percentage

Average Payment

Times (Days)

Nbr of Late

Payments

Percentage

Average Payment

Times (Days)

30 166419 135917 81.67 % 10.09 30502 18.33 % 74.79

45 7174 7161 99.82 % 6.83 13 0.18 % 60.62

60 1412 1393 98.65 % 6.59 19 1.35 % 82.74

90 5 4 80.00 % 17.75 1 20.00 % 132

Total Number of Payments

175010 144475 82.55 % 30535 17.45 %

Average Net Payment Time

21.22 9.9 74.79

Average Gross Payment Time

21.22 9.9 74.79

Suspensions

Average Report

Approval Suspensio

n Days

Average Payment

Suspension Days

Number of Suspende

d Payments

% of Total Number

Total Number

of Payment

s

Amount of Suspende

d Payments

% of Total Amount

Total Paid Amount

175010 303,269,908.72

Late Interest paid in 2017

DG GL

Account Description Amount (Eur)

PMO 65010000 Interest expense on late payment of charges

198.31

198.31


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TABLE 7 : SITUATION ON REVENUE AND INCOME IN 2017

Revenue and income recognized Revenue and income cashed from Outstanding

Chapter Current year RO Carried over RO Total Current Year RO Carried over RO Total balance

1 2 3=1+2 4 5 6=4+5 7=3-6

40 MISCELLANEOUS TAXES AND DEDUCTIONS 550,027,032.63 113,682.32 550,140,714.95 549,225,393.32 113,682.32 549,339,075.64 801,639.31

41 CONTRIBUTIONS TO THE PENSION SCHEME

405,120,441.89 190,481.22 405,310,923.11 404,198,621.80 190,481.22 404,389,103.02 921,820.09

42 OTHER CONTRIBUTIONS TO THE PENSION SCHEME

44,040,976.20 0 44,040,976.20 42,408,401.80 0 42,408,401.80 1,632,574.40

52 REVENUE FROM INVESTMENTS OR LOANS GRANTED, BANK AND OTHER INTEREST

24.09 0 24.09 24.09 0 24.09 0

57 OTHER CONTRIBUTIONS AND REFUNDS IN CONNECTION WITH THE ADMINISTRATIVE OPERATION OF THE INSTITUTION

23,817,915.53 312,203.87 24,130,119.40 23,390,122.09 292,166.01 23,682,288.10 447,831.30

58 MISCELLANEOUS COMPENSATION -169,666.56 182,689.99 13,023.43 -169,666.56 169,666.56 0 13,023.43

59 OTHER REVENUE ARISING FROM ADMINISTRATIVE MANAGEMENT

-672,325.00 672,325.00 0 -672,325.00 672,325.00 0 0

90 MISCELLANEOUS REVENUE -65,509.53 0 -65,509.53 -65,509.53 0.00 -65,509.53 0

Total DG PMO 1,022,098,889.25 1,471,382.40 1,023,570,271.65 1,018,315,062.01 1,438,321.11 1,019,753,383.12 3,816,888.53


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TABLE 8 : RECOVERY OF PAYMENTS (Number of Recovery Contexts and corresponding Transaction Amount)

Total undue payments recovered

Total transactions in recovery context(incl. non-qualified)

% Qualified/Total RC

Year of Origin (commitment) Nbr RO Amount Nbr RO Amount Nbr RO Amount

2015 1 557.00

2016 77 255,302.82

2017 33 33090.35

No Link 4633 314,738,485.74

Sub-Total 4744 315,027,435.91

EXPENSES BUDGET Error Irregularity OLAF Notified Total undue payments

recovered

Total transactions in recovery context(incl.

non-qualified)

% Qualified/Total RC

Nbr Amount Nbr Amount Nbr Amount Nbr Amount Nbr Amount Nbr Amount

INCOME LINES IN INVOICES 99 161,489.01

NON ELIGIBLE IN COST CLAIMS

CREDIT NOTES 12 8,993.35

Sub-Total 111 170,482.36

GRAND TOTAL 4855 315,197,918.27


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TABLE 9: AGEING BALANCE OF RECOVERY ORDERS AT 31/12/2017 FOR PMO

Number at 01/01/2017

Number at 31/12/2017

Evolution Open Amount

(Eur) at 01/01/2017

Open Amount (Eur) at

31/12/2017 Evolution

2004 1 1 0.00 % 6,312.00 6,312.00 0.00 %

2005 1 1 0.00 % 247.62 247.62 0.00 %

2006 2 1 -50.00 % 3,936.89 370.00 -90.60 %

2008 2 2 0.00 % 25,496.96 25,496.96 0.00 %

2010 3 2 -33.33 % 122,349.38 13,754.90 -88.76 %

2011 4 2 -50.00 % 1,096,562.47 254,570.91 -76.78 %

2012 5 5 0.00 % 71,017.89 63,867.89 -10.07 %

2013 2 1 -50.00 % 28,491.17 17,710.53 -37.84 %

2014 5 3 -40.00 % 13,719.99 13,396.20 -2.36 %

2015 11 5 -54.55 % 92,590.76 83,502.90 -9.82 %

2016 92 10 -89.13 % 6,771,609.34 321,120.74 -95.26 %

2017 116 16,531,505.98

128 149 16.41 % 8,232,334.47 17,331,856.63 110.53 %


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TABLE 10 : RECOVERY ORDER WAIVERS IN 2017 >= EUR 100.000

No data to be reported

TABLE 11 : CENSUS OF NEGOTIATED PROCEDURES – DG PMO - 2017


TABLE 12 : SUMMARY OF PROCEDURES OF DG PMO EXCLUDING BUILDING CONTRACTS


TABLE 13 : BUILDING CONTRACTS


TABLE 14 :CONTRACTS DECLARED SECRET


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ANNEX 4: Materiality criteria

Quintessential to the PMO's activities are the correct implementation of the staff

regulations regarding entitlements and reimbursement of several categories of expenditure.

An entitlement or reimbursement can result from a decision made by another service (recruitment, mission, leave, etc.) or from an individual request from the relevant staff

member (following a certain event: marriage, child, sickness, pension,…). Any such entitlement or reimbursement is trusted to case handlers who then proceed to a

verification of the eligibility of the entitlement and the underlying documents. After such

verification, the entitlement/documents are encoded. These case handlers are under supervision and – depending on the complexity of the file – under verification by the

verifier and/or the Appointing Authority (AIPN).

Information systems make all necessary calculations and prepare batch files that are

then transferred for payment to the Commission's accounting system (ABAC). These mass payments are initiated and verified by case handlers. The verification and validation

is carried out by the authorising officers by sub delegation. Only less recurrent or particular files can be introduced directly in ABAC based on a paper file.

The main inherent weaknesses result from the nature of the activities, residing in the

very high number of individual transactions (e.g. reimbursement of medical claims and missions) processed, on the one hand, and mass transactions (e.g. salary and pension

payments), on the other hand.

A quantifiable weakness in the control and supervisory systems would be defined as

material when ex-ante or ex-post controls detect structural and pervasive errors regarding eligibility and calculation. The level of materiality is defined at 2 %, based on

the error rate applied by the Court of Auditors. If the residual risk of error on legality and regularity of all underlying transactions is higher than 2 %, a reservation will be made.

A non-quantifiable weakness would be defined as material when an elevated risk of

errors or abuse in entitlements is identified with no material financial impact but with serious reputational consequences for the Commission.

PMO_aar_2017_draft of 99

ANNEX 5: Internal Control Template(s) for budget implementation (ICTs)

The internal control structures of the operational units were reviewed in 2014 and work well, with continuous fine tuning when necessary. In

2018, the PMO will implement the new Communication on the Revision of the Internal Control Framework. This may lead to further fine tuning. In addition, in 2018, the adaptation of the mission rules to the new Guide to missions will imply a review in the control strategy In the table below, the "Depth" of the control has 4 identified levels, defined as follows:

1.Minimal administrative / arithmetic control with no reference to supporting documents reference to underlying documents. 2. Control with reference to corroborative information incorporating an element of independent oversight (e.g. audit certificate or other verification), but no reference to underlying documents. 3. Control with reference to fully independent corroborative information (e.g. database which justifies certain elements of the claim, 3rd party or Commission

assessment of milestones achieved, etc.) 4. Control with reference to and including access to the underlying documentation available at the stage of the process in question, for all inputs and outputs (e.g. timesheets, invoices, physical verification, etc.); i.e. control of the same intensity of transaction testing as those carried out by the ECA as part of the DAS.

ICT 1: Management (establishment/modification & payment) of salaries, post-activity and related entitlements.

Stage 1: Establishment/modification of salaries, post-activity and related entitlements

Main control objectives: Ensuring that salaries, post-activity and related entitlements are correctly established, fraud prevention and detection.

It concerns carrying out mass salary/pension payments to a relatively stable population. Every establishment or modification of an entitlement (mainly related to salaries and pensions) is subjected to a 100 % ex-ante control. The initiating operational staff member opening the file

performs a full verification in order to correctly establish/modify the entitlements. A verifying staff member provides a supplementary layer of control in all cases, except for some very specific cases (allowances where review of some lower risk and less complex files is performed by the

verifying agent on a sample basis, due to the high number of declarations received). The increasing quality of ex-ante control in this field, results

in continuous decrease of amounts recovered in ex-post controls carried out in the entitlements area (except for targeted controls on risky areas). The benefit of the internal control lies in the prevention of errors in the establishment or modification that would have a long lasting material

financial impact.

To confirm a beneficiary's continued right to entitlements, granted on a provisional basis, the PMO must receive the validity of related supporting

documents. They are controlled via a posteriori controls. These checks complement the ex-ante controls.

It is also worth noting that the nature of PMO activities, payment of salaries, post-activity and reimbursement of claims, makes for an easy

recovery of found errors, as corrections can be deducted from monthly salary, pension payments.


Main risks

It may happen (again) that…

Mitigating controls

How to determine

coverage frequency and depth

How to estimate the

costs and benefits of controls

Control

indicators

Salaries, post-activity and related entitlements

are not correctly established or modified,

resulting in recurring incorrect wage

payments to staff: • Determination of

entitlements not

compliant with staff regulations and not

paid on time; • Risk of fraud, litigation

and bad reputation due to non-compliance with

rules in force (FR & IR, Staff Regulations,

accounting, etc).

EX-ANTE:

• All transactions are submitted to ex-ante controls;

• All entitlements (100%) are subject to ex-

ante control by the initiating agent. • Four eyes principle, except for some specific

allowances. • All found errors are corrected, in principle

without exception. Should an exception be made, an exception note is established;

• Delegation of powers (AOSD, AIPN) published;

• Supplementary technical controls are made

using IT applications.

EX-POST: • Risk-based ex-post controls are carried out

on the basis of a risk analysis, taking into account materiality and risk probability

criteria. • In addition random controls are performed.

• All ex-post controls are reported based on a

harmonised template. • Specific ex-post controls aimed at revealing

potential fraudulent transactions are carried out.

Coverage ex-ante:

All transactions Frequency:

Continuously Depth: Level 2

Coverage ex post:

Sample-based on all transactions or specific

target on risky areas Frequency: annual

basis Depth: Level 2

Costs:

Ex-ante: All personnel involved in operational

transactions

Benefits (qualitative): Reduced risk of

litigation, compliance with regulation,

transactions processed

accurately and in time; Errors, fraud and

potential litigations are prevented or

minimized.

Ex-ante and ex-

post reports; Degree of

implementation

of ex-post planning;

Exception reporting


Stage 2 - Financial transactions

Expenditure implementation (commitment, validation, authorization and payment of expenditure)

Main control objectives: legality and regularity (compliance with Staff Regulation, FR & RAP), fraud prevention and detection.

Main risks It may happen (again)

that…

Mitigating controls How to determine

coverage, frequency

and depth

How to estimate the costs and benefits of

controls

Control indicators

• Amounts paid exceed

what is determined as per staff regulations and

financial regulation;

• Risk of fraud, litigation and bad reputation due

to non-compliance with rules in force (FR & IR,

Staff Regulations, accounting, etc).

• All transactions are submitted to ex-ante

controls; • Four eyes principle: 2 people are involved

in each financial transaction: initiating and verifying agents;

• Close monitoring of every step in the

payment process; • Supplementary technical controls are made

using IT applications • Centralised financial circuit for payments

and commitments; • ABAC for financial transactions;

• Accounting controls are carried out regularly (monthly, quarterly and yearly, depending

on type of transactions).

Coverage:

All financial transactions Depth (intensity): -

Level 3

Costs: All personnel involved in

financial transactions & accounting staff

Benefits: Sound financial

management and

respect of contractual deadlines.

Errors, fraud and potential litigations are

prevented or minimized.

Accounting errors are identified and

corrected at an early

stage

Financial error rate

payment delay

Exception reporting

number of OLAF cases followed-up

ECA recommendations

IAS and IAC audit recommendations

Accounting quality

AOSD reports (include financial

issues)


Stage 3 - Supervisory measures

Main control objectives: legality and regularity (FR, IR, ICS), detection and correction of weaknesses

Main risks


Mitigating controls

How to determine

coverage, frequency and depth

How to estimate the


Control indicators

• Risk of fraud, litigation and reputational

damage due to non-

compliance with legal provisions.

• The ex-ante controls (as such) fail to prevent,

detect and correct erroneous payments.

• The errors, irregularities and cases of fraud

detected are not

addressed or not addressed within a

reasonable timeframe.

• The list of exceptions, open audit

recommendations, sensitive files, results of ex-post controls (incl. anti-fraud) and

synthesis of the significant AOSD concerns are registered in a centralised registry.

• Three times a year, a session with senior management is organised to take

appropriate action to address all

outstanding audits and related recommendations and take stock of results

of ex-post controls. • The sensitive files (incl. litigation and

suspected fraud cases) are discussed bilaterally with the Direction on an ad-hoc

basis. • Follow-up on implementation of discharge

recommendations is duly followed.

• Compliance with Internal Control Standards is monitored regularly;

• Risk management; • Monitoring of sensitive functions.

• The internal control coordinator follows the implementation of controls and assists the

operational units in maintaining a high quality of reporting.

Coverage:

Based on results of tests/ audits/ risks

Frequency: ad-hoc and three times a year

Depth (intensity): Level 3

Costs: Internal control team

and concerned management

Benefits: Issues are followed up

and addressed; Processes and

procedures improved;

Continuous improvement of the

internal control system.

Contributes to the reasonable assurance.

percentage of AOS reports awaited;

percentage of audit

recommendations; implemented on

time by the units; Number of ICS not

fully compliant or

ineffective; Anti-fraud

indicators Risk assessment

results and related mitigating actions.


ICT 2: Management (including payment) of medical, expert and mission claims

Stage 1: Management of medical, expert and mission claims

Main control objectives: Ensuring that medical, expert and mission claims are correctly established. The activity of the PMO mainly concerns carrying out mass salary/pension payments and reimbursement of medical, expert/ candidate and mission claims to a relatively stable population.

It is also worth noting that the nature of PMO activities, payment of salaries, pensions and reimbursement of claims, makes for an easy recovery

of found errors, as corrections can be deducted from monthly salary, pension payments.

Main risks

It may happen

(again) that…

Mitigating controls

How to determine

coverage frequency

and depth*

How to estimate the

costs and benefits of

controls

Control indicators

Medical, mission and

expert reimbursement claims are not correctly

established, resulting in

incorrect reimbursements to

staff: • Reimbursement of

expert/mission/medical expenditure not legal

and regular; • Risk of fraud, litigation

and bad reputation due


Staff Regulations, accounting, etc).

EX-ANTE:


controls, using a statistically representative sample allowing for an extrapolated error

rate to be defined for the whole population of transactions;

• The ex-ante controls carried out on Mission, Expert and Medical expenditure are

submitted to an ex-post control to confirm their quality;

• Four eyes principle: 2 people are involved in

each transaction: initiating and verifying agents, both at operational and financial

level; • All found errors are corrected, in principle

without exception. Should an exception be made, an exception note is established;

• Delegation of powers (AOSD, AIPN) published;

• Supplementary technical controls are made

using relevant IT applications

Coverage:

All transactions Frequency: daily

Depth: Level 3

Costs ex ante:

All personnel involved in

operational transactions

Ex-ante and ex-

post reports;

Degree of implementation

of ex-post planning;

Exception reporting


Main risks


Mitigating controls

How to determine

coverage frequency and depth*

How to estimate the


Control

indicators

EX-POST:

• Ex-post controls are carried out on the basis of a risk analysis, taking into account

materiality and risk probability criteria, plus on a random basis.

• All ex-post controls are reported based on a harmonised template

• Specific ex-post controls aimed at revealing potential fraudulent transactions are carried

out.

Benefits (qualitative): Reduced risk of

litigation, compliance with regulation,

transactions processed accurately and in time;

Errors, fraud and

potential litigations are prevented or

minimized.


Stage 2 - Financial transactions

Expenditure implementation (commitment, validation, authorization and payment of expenditure)

Main control objectives: legality and regularity (compliance with Staff Regulation, FR & RAP), fraud prevention and detection.


that… Mitigating controls

How to determine coverage, frequency

and depth


controls Control indicators

• Amounts paid exceed

what is determined in the financial regulation;

• Risk of fraud, litigation and bad reputation due


Staff Regulations,

accounting, etc).


controls; • Four eyes principle: 2 people are involved

in each financial transaction: initiating and verifying agents;

• Close monitoring of every step in the

payment process; • Supplementary technical controls are made

using IT applications • Centralised financial circuit for payments

and commitments for expert and mission claims, and a fully decentralised financial

circuit for payments of medical claims. • ABAC for financial transactions;

• Accounting controls are carried out regularly

(monthly, quarterly and yearly, depending on type of transactions).

Coverage:




Costs: All personnel involved in

financial transactions &

accounting staff Benefits:

Sound financial management and

respect of contractual

deadlines. Errors, fraud and

potential litigations

are prevented or minimized.

Accounting errors are identified and

corrected at an early stage

Financial error rate payment delay

Exception reporting

number of OLAF cases followed-up

ECA

recommendations IAS and IAC audit

recommendations Accounting quality

AOSD reports (include financial

issues)


Stage 3 - Supervisory measures

Main control objectives: legality and regularity (FR, IR, ICS), detection and correction of weaknesses


that…

Mitigating controls How to determine

coverage, frequency

and depth


controls

Control indicators

• Risk of fraud, litigation

and reputational

damage due to non- compliance with legal

provisions. • The ex-ante controls (as

such) fail to prevent, detect and correct

erroneous payments. • The errors, irregularities

and cases of fraud

detected are not addressed or not

addressed timely

The list of exceptions, open audit

recommendations, sensitive files, results of ex-post controls (incl. anti-fraud) and

synthesis of the significant AOSD concerns

are registered in a centralised registry. • Three times a year, a session with senior

management is organised to take appropriate action to address all

outstanding audits and related recommendations and take stock of results

of ex-post controls. • The sensitive files (incl. litigation and

suspected fraud cases) are discussed

bilaterally with the Direction on an ad-hoc basis.

• Follow-up on implementation of discharge recommendations is duly followed.

• Compliance with Internal Control Standards is monitored regularly;

• Risk management; • Monitoring of sensitive functions.

• The internal control coordinator follows the

implementation of controls and assists the operational units in maintaining a high

quality of reporting.

Coverage:




Costs:

Internal control team and concerned

management Benefits:

Issues are followed up

and addressed; Processes and

procedures improved; Continuous

improvement of the internal control

system. Contributes to the

reasonable assurance.

percentage of AOS reports awaited;

percentage of

audit recommendations;

implemented on time by the units;

Number of ICS not fully compliant or

ineffective; Anti-fraud

indicators;

Risk assessment results and related

mitigating actions.


ICT 3: Revenue Collection - Establishment and recovery of contributions

Establishment/recovery of contributions (pension, tax, unemployment, JSIS,

insurance)

Main control objectives: Ensuring that contributions are correctly calculated and paid

by relevant parties (e.g. staff, other Institutions, Agencies, depending on the extent of their SLA with PMO); Effectiveness, efficiency and economy; Compliance (legality and

regularity); Sound financial management

Main risks It may happen

(again) that…

Mitigating

controls

How to

determine coverage,

frequency

and depth

How to

estimate the costs and

benefits of

controls

Control

indicators

Risk on accuracy of

contributions

Risk on

accuracy of billing

(enquiries, complaints from

staff & other bodies)

Risk on accuracy of

accounting

Percentage of

contributions

based on Staff

Regulations entered in

PMO IT systems

calculating salaries (NAP)

Technical & financial

controls

Checks by external

parties paying the

contributions

(e.g. Staff, other

Institutions, Agencies)

Accounting controls

European Court of

Auditors'

audit For JSIS,

independent audit by an

external auditor.

For the unemploymen

t fund, inter-

DG working group with HR

and DG BUDG.

100% Coverage;

automatic

Monthly

At each

payment period

Twice a year Yearly

Yearly

Regular and ad-hoc

monitoring

Costs: Estimation of

staff involved

Benefits: correctness of

contributions, payments by

third parties.

- Unpaid

recovery orders

- Claims by staff

- Errors detected


ICT 4: Revenue Collection - Charge back mechanism

Establishment/recovery of charges for services provided, as per Service-Level

agreement

Main control objectives: Ensuring that services are correctly charged backed according

to SLAs/ Agreements and paid by relevant parties (e.g. other Institutions, Agencies); Effectiveness, efficiency and economy; Compliance (legality and regularity); Sound

financial management

Main risks It may happen

(again) that…

Mitigating

controls

How to

determine coverage,

frequency

and depth

How to

estimate the costs and

benefits of

controls

Control

indicators

Equal

treatment of

clients not ensured

Lack of

transparency of the

charge-back mechanism

Breach of the "no profit/

loss" principle

Non respect

of the corporate

reporting

requirements/ lack of

management information

of the clients

Lack of extensive

documentati

on may lead to errors and

business continuity of

this aspect of the process

Accuracy of

billing

(enquiries, complaints

from clients)

The actual level

of resources invested in the

delivery of

services is followed up (IT

tools, regular screening of the

staff, management

meetings).

Checks by external parties

receiving the debit notes.

Controls / documentation

have been

developed in 2017 following

the IAS audit and the

corporate charge back guidelines.

100% Coverage:

The forecast for the costs/

revenues of

PMO in year N is prepared in

January N-1 on the basis of

current SLAs and

assumptions in the context of

the draft

budget.

Calculation of a down

payment in April N

Final cost for

year N is

known in the first quarter

N+1 once all expenditure

items are known

Meeting the demand for

services, whilst ensuring costs

are kept within

the targets defined in the

MP. The costs

impossible to identify as a

single, stand-alone action, as

they depend on

the overall PMO activity and

allocation of resources.

- Unpaid

recovery orders

- Claims by

clients - Errors

detected

Ex-ante control – verification of

amount to be

Costs: Estimation of

staff involved


Main risks

It may happen

(again) that…

Mitigating controls

How to determine

coverage,

frequency and depth

How to estimate the

costs and

benefits of controls

Control indicators

charged against

SLA and actual use of services

issued from PMO IT business

intelligence tools.

All calculated

amounts are

sent to clients under the form

of a pre-information

letter.

All debit notes or payments are

checked before

being issued/ after being

received.

IAS audit in 2016

Benefits: reduce number of

questions and appeals made by

clients relating to the debit notes

received

Smoother

compensation process ensuring

that funds are rapidly

reconstituted and allow for the

continuity of activities

Recovery

Introduction of

SLAs introducing

clear rules and guidelines on

payments.

Issuance of

recovery orders

according to agreements

(once or twice

a year)

Benefits: SLAs

reduce

discussions on their

implementation

Average recovery

delay for external

bodies


ANNEX 10: Specific annexes related to "Financial Management"

This annex gives more details on the overall conclusion given in sections 2.1.1 and in descriptions of internal controls in annex 5. The presentation of the control results is split

between domain 1 – salaries, post activity and associated entitlements and domain 2 – reimbursement of claims.

Ex-ante control in 'salaries, post-activity and associated entitlements'

Salaries and associated entitlements

In 2017, the ex-ante controls linked to entitlements were further improved.

To confirm a beneficiary's continued right to entitlements, granted on a provisional basis, the PMO must receive and verify the validity of related supporting documents via a

posteriori controls22. These checks complement the ex-ante controls. The PMO thus relies on up-to-date and accurate information provided. For different reasons, staff members

do not always transmit the relevant information on time leading to possible inaccurate amounts being paid.

Bearing in mind the conclusions of the Court of Auditors regarding the 'allowances of like nature received from other sources' and the professional situation of the spouse, the PMO

created the possibility for staff members to declare changes in the professional situation

of the spouse in SysPer. Since 2016 all household allowances based on spouse’s income have been granted on a provisional basis and a systematic follow-up of the family

situation will be performed before expiry of the recovery period established under the Staff Regulations. Additionally, actions of communication towards staff were reinforced

and a proactive notification system in the IT tool system Sysper is being developed.

Post-Activity (Pensions, unemployment and other entitlements)

Every pension file opened is submitted to detailed ex-ante scrutiny organised on two levels. Firstly, each file is verified in detail (establishment of the entitlement) and

secondly, another control is carried out by the financial team at the payment level. These

controls help keeping the error rate below the materiality level. The estimated error rate is around (to be completed)

Conclusion for ex-ante controls in Salaries, Post Activity & Associated Entitlements: Every transaction is subject to ex-ante verification (100 % control). All

errors are corrected retroactively and the results of corrections favourable influence the accuracy of future transactions. The ex-ante controls revealed no material errors.

22 A posteriori controls are associated with payments that were carried out on the basis of limited ex-ante

controls i.e. before the documents attesting to a beneficiary's entitlement had been received. These controls

may be considered as the 'finalisation' of ex-ante controls. The adjustments made, pursuant to the a

posteriori controls are considered as 'regularisations' and not 'errors'.


Ex-post control in 'salaries, post-activity and associated entitlements'

Ex-post control activities are twofold: random ex post controls are complemented by

risk-based controls on selected areas most susceptible to material financial errors. As a result, it is not possible to extrapolate the financial error rate to all PMO expenditure and

the results represent a pessimistic view of the situation.

Scope ex-post control (expenditure areas)

Number of files verified

Total amount verified (euro)

% Value Total of sub-population checked


2017


2016

Financial error rate 2015

Salaries and associated

entitlements

128 17.209.070 0,56% 0,09% 0,17% 0,09%

Post-Activity 106 2.451.487 0,13% 0 0 0,01%

Total (estimated % on total of

domain 1) 134 19.660.557 0,40% 0,08% 0,17%

0,09% estimated

Conclusion for ex-post controls in 'salaries, post-activity and associated

entitlements': The table above provides an overview of the ex-post controls carried out on a random sampling. It shows a total financial error rate estimated at 0.08%, lower to

past years.

Ex-ante control in reimbursement of medical, expert and mission claims

The ex-ante control in the area of reimbursement of claims (medical, mission and expert) is based on statistical random sampling, leading to a representative error rate that can

be extrapolated to the entire population of claims.

Medical claims

The very low error rate in past years has allowed the PMO to revise its control strategy,

increasing the cost-efficiency of internal control in the JSIS. In 2017, the ex-ante control in the area of reimbursement of medical claims is fixed at 0.4 % of the files calculated

the previous day, based on an elaborated sampling method which takes account of the files having the highest financial impact. In addition, JSIS carries out ex-ante controls,

following the same sampling method, on the complementary reimbursement in cases of accidents and medical claims of EU personnel in Delegations.

A supplementary ex-ante conformity control concerning claims processed 'on line' on the basis of scanned documents instead of paper originals is performed on a daily basis,

composed of 0.4 % of claims processed the previous day.

Mission claims

A complete verification is performed for those missions which are considered as having a

higher risk (e.g. long term missions, combined with leave, with advance payment, etc.). In addition, every day, a random ex-ante sample on all types of missions is taken for

control, representing 2.4 % of the files handled the previous day.

Expert and candidate claims

Every day an ex-ante sample (3.5 % of the files handled on the previous day compared to 5% before) is taken for control using financial value and random cases: the first part


being 1.5 % of the total number of claims with the highest financial amount in euro, the second part being 2 % randomly selected claims.

Scope ex-ante

control

Number

of files verified

Total amount

verified (EUR)

%

Value Total of

sub- populat

ion checked

Financial error

rate 2017

Financial error

rate 2016

Financial error

rate 2015

Medical Claims

(Reimbursements) 2.288 23.511.698,43 7,26% 0,40% 0,13% 0,48%

Mission claims (Reimbursements)

4.493 2.098.652,40 2,61% 0,64% 0,61% 0,41%

Expert claims

(Reimbursements) 1.844 1.767.870,76 5,59% 1,00% 0,96% 1,15%

Total (estimated % on total of

domain 2)

8.625 27.378.698,43 6,28% 0,46% 0,26%

Conclusion for ex-ante controls in the area of medical, expert and mission

claims: The results show that the total financial error rate of the ex-ante controls remains well below the materiality threshold of 2 %, set forward by the Court of

Auditors.

Ex-post control in reimbursement of medical, expert and mission claims

All ex-post control activities are risk-based to serve two purposes: on the one hand, to control the quality of the ex-ante controls and on the other hand to allow for resources to

be dedicated to the few areas identified in the risk analysis as most susceptible to

material financial errors. As these controls are meant to single out specific risks in often small subpopulations, it is not possible to extrapolate of the financial error rate to all

expenditure.

The table below provides an overview of the ex-post controls carried out in 2017.

Scope ex-post control

(expenditure areas)

Number of

files verified

Total amount

verified (EUR)

% Value Total

population checked

Financial error

rate 2017


2016


2015

Missions 232 311.295,57 0,39% 0,44% 1,15% 0,21%

Experts/

candidates 243 774.029,91 2,45% 0,10% 1,50% 0,12%

JSIS – Joint Sickness

Insurance Scheme

1.141 1.411.678,35 0,44% 0,20% 0,79% 0,91%


Total (estimated %

on total of

domain 2)

1.616 2.497.003,83 0,57% 0,20% 0,86% 0,58%

estimated

The results of the ex-post control are encouraging as the error rates even in these more

error prone samples remain below 2 %. In addition to the representative error rate calculated in the ex-ante control well below the 2 % threshold, overall control results

give a high degree of assurance.

Conclusion for ex-post controls in reimbursement of medical, expert and

mission claims: The total financial error rate of all ex-post controls, of which many are targeted to the higher risk areas, remains well below the materiality threshold of 2 %;

confirming the accuracy and quality of transactions processing by the PMO and the effectiveness of the ex-ante controls. The overall ex-post financial error rate, taking into

consideration it was focused on high risk areas, remains at 0,20%.

Ex-post control in the financial unit

The financial transactions23 are managed by the PMO's Budget and internal control Unit in

Brussels. All transactions are subject to ex-ante controls.

A wide-ranging ex-post control exercise was carried out covering 41 different types of

transactions so as to cover all activities managed by the budgetary sector. 75 transactions were selected and reviewed on the basis of a risk analysis. No financial

errors were identified.

Scope ex-post

controls

N° of files

verified

Total amount

verified

% Value Total population

checked


2017


2016

41 different types of

financial transactions

67 EUR 337

million 6,70% 0.00 % 0.00 %

23 Except for expert reimbursements - PMO.5 Luxembourg- and the medical claim reimbursements that fall

under the responsibility of the settlements offices in Luxembourg, Ispra and Brussels.


ANNEX 12: Performance tables

1. OPERATIONAL RESULTS

While as an administrative support service the Paymaster's Office (PMO) is not in the frontline for delivering on the ten priorities of the Juncker Commission, it has a

fundamental role to play to ensure that the institution is capable of mobilising all its

strengths behind these priorities.

In particular, PMO contributes to the following general objective of the Commission:

General objective 11: To help achieve the overall political objectives, the

Commission will effectively and efficiently manage and safeguard assets and resources, and attract and develop the best talents.

Non programme-based

Impact indicator: Staff engagement index in the Commission

Source of the data: European Commission Staff Survey

Baseline (2015) Actual (2017) Target 2020

58% 2016: 59% 70%

Offering a correct and timely payment of salaries, pensions and other related

entitlements, a swift reimbursement of health insurance, mission and expert claims, a smooth delivery of EU laissez-passer and visas, and more generally accessible and

customer-friendly services, is essential to allow the Commission – and increasingly other – staff to carry out their duties unhindered.

The pursuit of the following specific objectives has contributed to achieving this

objective:

1. Ensuring at all times the correct and timely handling of all types of transactions

Baseline Target

2016 2017 target

2017 actual

2018 2019 2020

1. Number of Article 90

complaints upheld. [2016: 8.27 %]

< 10 % 6.57% < 10 % < 10 % < 10 %

2. Financial error rate

of the amount paid annually. [2016: < 1 %]

< 1 % < 1 % < 1 % < 1 % < 1 %


Baseline Target

2016 2017 target

2017 actual

2018 2019 2020

1 Average time

needed to handle reimbursement claims (in

days)

Medical claims [2016: 10 days]

15 13 15 15 15

Missions claims

[2016: 8 days]

10 7 10 10 10

Expert claims [2016: 8 days]

20 7 20 15 15

2. Financial error rate

of the amount paid annually. [2016 < 1 %]

< 1 % < 1 % < 1 % < 1 % < 1 %

In addition, the positive evolution regarding the processing of inward transfers of pension entitlements has been maintained in 2017. Substantial efforts were made to further

reduce the backlog created by an avalanche of inward transfers from national schemes in 2010.

2. Offering better quality of customer service

Baseline Target

2016 2017

target

2017

actual

2018 2019 2020

Average waiting time on the phone – PMO Contact Call

Centre (in minutes)

[2016: 4.55 minutes]

< 2

4.55 < 2 < 2 < 2

Average time taken to reply

to enquiries through the ‘PMO Contact Online’ (in

working days) [2016: 8 days]

< 7

7 < 6 < 5 < 4

Improve overall customer

satisfaction (overall satisfac-tion index with services

provided by PMO: 5.92 )

↗ 74% ↗ ↗


Provide prompt, good quality and relevant

information and ensure high quality client services across the board

Non spending

Main outpouts 2017

Description Indicator Latest known results (31/12/2017)

Target 2017

PMO Service Charter – communication to

staff

Full implementation

of an ad-hoc communication

campaign

70% Contacts points have been

updated and their visibility improved. The publication of a

service charter is suspended.

Assess staff

satisfaction with content of PMO

Newsletters

Survey drafted 0%

Project suspended following the creation of an HR

corporate newsletter to which the PMO will contribute.

Survey

initiated

Assess staff satisfaction with PMO

roadshows

Analysis carried out, survey

tools and indicator

defined

100% In 2017, there was 1

roadshow for the attention of Agencies staff located in

Brussels. 90 people attended this event. For the first time

the survey was launched

online but had a too low response rate to be valid.

Definition of targets and

indicators, roll-out

Set up a Helpdesk

"Entitlements & Salaries"

Creation

helpdesk

100%

The PMO.1 helpdesk "Entitlements & Salaries" has

been operational since March

2016.

Helpdesk

operational


3. Deepening inter-institutional synergies

The table below show the percentage of achievement of IT planned developments for the

year 2017 in comparison with targets.

Baseline Target

2016 2017

target

2017

actual

2018 2019 2020

Timely implemented programmed project milestones [2016: 71 %]

85 % 75% 85 % 85 % 85 %

Achievement of the IT strategy: complete the planned developments in due time

Non spending

Main outputs 2017

Description Indicator Latest known results (31/12/2017)/ achievement of

2017 target

Target 2017

Future Payroll solution

Analysis of the possible

solutions to replace the

current system (NAP)

Organisation of

Interinstitutional workshop on the future

of the NAP

Degree of

completio

n of the analysis

Done/not done

70% (delayed as new FWC has

been negotiated with current

external supplier in 2017)

100%

Decision

on the

future of the

payroll informati

on system

NAP (current pay. solut.)

Define the security plan

Degree of completio

n of the action

90% (signed by PMO SSO. To be validated by our service provider

DIGIT)

Achievement of

planned action

SysPer-Rights

Define the security plan (identify assets,

establish risk levels)

Extend the coverage

by developing a front and back office for

Taking up duty, Mobility and Divorce.

Improvement of front

Degree of achievem

ent of planned

developments and

Overall 60% (delays due to change

of priorities and DIGIT resources

issue)

- delayed from DIGIT and HR.

Identified assets and risk levels

- not done

- 100% for EDU, 90% for PAD

Achievement of

planned developm

ents and actions


Achievement of the IT strategy: complete

the planned developments in due time

Non spending

Main outputs 2017

Description Indicator Latest known results

(31/12/2017)/ achievement of 2017 target

Target

2017

and back office for professional and school

declarations

Improvement of

SYSPER computation of travel allowances

(thorough analysis, review business

analysis, training of file

handlers, writing of guides)

Implementation of proactive notifications,

Removals, Divorce, Visibility of rights,

Taking up Duty

Improve management

processes/control

through SLA based accesses & revised

validation workflow

ECA instance merging

(i.e. within the COM and inter-institutional

instance)

Implement transcode

for all Executive

agencies and launch FVO calculation

- Implement tools to improve project

management and helpdesk (2nd level)

with DIGIT (Confluence, RTC, etc.)

actions

- 50% done (analysis, guides and training done. DIGIT delayed)

- only done front & back office for

Removals. Rest is delayed

- done for SLA, 90% for workflow

- done

- done

- done

SysPer-Pensioners (common project DG HR

and PMO)

Front Office

deployment of 3 modules

Back Office

Degree of

completion of the

analysis and

execution

65% (one of the 3 modules was not deployed)

Achievem

ent of planned

actions.




Non spending

Main outputs 2017



Target

2017

(management of rights, etc…)

of the initiation

phase.

PABS (IT application relating to pensions)

Define the security

plan

Implementation of:

o Simple calculation of pension d'ancienneté

and pension d'invalidité

o Simple calculation Pension de survie

o More complex

pensions calculations

Flex replacement

(subrogation module)

Degree of

achievement of

planned developm

ents and actions

100%

100%

100%

75% (one iteration lacking)

100%

Achievem

ent of planned

actions

AssMal2 and JSIS Online (IT application for medical

expenses)

ACC/CHC Corrections Tarification – tests in

November 2016 Direct Billing Invoices

– analysis ongoing + running in production

Accident File – analysis ongoing + running in

production

Assmal1 decommissioning

- New technology

Degree of

achievement of

planned developm

ents and actions

100%

100%

Achievem

ent of planned

actions




Non spending

Main outputs 2017



Target

2017

(Angular2 vs Flex) – first development with

Angular of Accident File

100%

80% (UAT test ongoing (target

date 31/03/2018)

100%

MiPS (IT application for

staff missions)

Finish back office

improvements in

relation to budgetary control and execution

Continue deployment to new customers

Implement new missions guide

Modernisa

tion process

started

and degree of

achievement of

planned developm

ents

80 %

90%

100%

Modernisa

tion process

started

and achievem

ent of planned

developments

Payment Factory

Define the security

plan

Future suspense

accounts management

eUI migration

Degree of

achievement of

planned developm

ents and

Global development of the foreseen

activities: 85%

Achievem

ent of planned

developments and

actions




Non spending

Main outputs 2017



Target

2017

(interface)

PF web service SOA

implementation

ABAC SOA integration

Development of the new Input Area for

upstream applications

Debt management

foundation: pre-

analysis and scope assessment

actions

PMO CONTACT (IT portal

for questions)

Finalisation of the

development of the

professional portal

Shift from project

mode to service mode

Implementtaion of the

feedback module

Degree of achievem

ent of

planned developm

ents and actions

100 %

Achievement of

planned

developments and

actions

Staff Matter Portal (SMP)

(ex e-SEP) (common project DG HR and PMO)

Perform the technical analysis

Setting up of foundations (i.e.

architecture, platform, etc.)

Perform the

development initiation phase

Implementation of the information portal

Implementation of the

Degree of

achievement of

planned developm

ents

100%

100%

100%

90%

Achievem

ent of planned

developments




Non spending

Main outputs 2017



Target

2017

ticketing.staff

Implementation of the

ticketing.pro

70%

40%

Business Intelligence (BI) & Reporting

Maintain all PMO's

reporting projects (Prepare conversion of

all PMO Full Client Reports (More than

1000). (MAINT and OPS)

Add new strategic and business needs for

existing environments

(MAINT) Finalize and put into

production the AGM, PABS, JIRA data

warehouse projects as well as the standard

reports. (DEV) Redesign and

implement the new

data warehouse project Sickness

Insurance to SIDM. (DEV)

Implement the declaration workflows

sysper in the Individual Rights

reporting environment.

(DEV) - Support to PMO

repositories users, operation on repository

security, Managing architecture and ETL

(OPS)

Degree of

achievem

ent of planned

developments

100%

100%

80%

80%

Achievem

ent of

planned developm

ents




Non spending

Main outputs 2017



Target

2017

0% (postponed -> Sysper (IS new workflows) have not been

implemented)

100%

AGM (IT application for

management of expert meetings, comitology

meetings with related

reimbursement of experts' expenses and other

related expenses)

Close follow-up on the

development of the Information System for

Experts

Rollout of

the

solution to all

Commission and

Agencies

95%

Achievem

ent of

planned developm

ents

2. ORGANISATIONAL MANAGEMENT

Overarching objective: The Authorising Officer by Delegation should have

reasonable assurance that resources have been used 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 including prevention, detection, correction and follow-up

of fraud and irregularities.


Objective 1: Effective and reliable internal control system giving the necessary

guarantees concerning the legality and the regularity of the underlying

transactions.

Indicator 1: Estimated residual error rate

Source of data: PMO AAR

Baseline (2014) Results Target (2020)

0.81 % of commitment

appropriations

0,08% < 1 %

Indicator 2: Estimated overall amount at risk for the year for the entire budget

under the PMO's responsibility.


Baseline (2014) Results Target (2020)

EUR 30 million EUR 5,8 million,

<1% of

commitment

appropriations

< 1 % of commitment

appropriations

Indicator 3: Estimated future corrections

The low degree of financial corrections recovered by PMO is a sign of strength of the

internal control. The low rate of errors found in ex-post and a posteriori verification

proves internal control is effective and results only in a relatively small number of errors

to be corrected. This is supported by the low percentage of error established year after

year by the Court of Auditors and the error rates found in both ex-ante and ex-post

control at PMO.

Objective 2: Effective and reliable internal control system in line with sound

financial management.

Indicator 1: conclusion reached on cost effectiveness of controls


Baseline (2016) Results 2017 Target (2020)

Yes Yes Yes

Indicator 2: calculating the cost of controls over expenditure invested in

controlling financial transactions (ratio FTE resources/total amount verified)


Baseline (2016) Results

2017

Target (2020)

< 0.1 % dedicated to control 0,06% < 0.1 %

Indicator 3: Average delay to recover undue payment: % of recovery orders

established within 5 working days after pre-information deadline.

Baseline (2016) Results

2017

Target (2020)

95% 95% 95 %

Indicator 4: Timely publication of monthly statistics and regular report to the

Management board


15th of every month 15th of every

month

15th of every month


Indicator 5: Number of critical/very important IAS recommendations overdue

for more than 12 months


1 very important

recommendation

1 0

Indicator 6: Number of open discharge recommendations


0 0 0

Objective 3: Minimisation of the risk of fraud through application of effective

anti-fraud measures, integrated in all activities of the PMO, based on the

Office's anti-fraud strategy (AFS) aimed at the prevention, detection and

reparation of fraud.

Indicator 1: Updated PMO anti-fraud strategy, elaborated on the basis of the

methodology provided by OLAF

Source of data: PMO AFS

Baseline Result 2017 Target (2020)

2015: 95 % of anti-fraud

strategy implemented

Updated strategy

published in

2017

Strategy to elaborate the updated

risk typology and provide

information on the strategic

objectives it focuses on

Indicator 2: percentage of OLAF and IDOC final case reports (transmitted to

PMO) for which follow-up has been established.

Baseline Result 2017 Target (2020)

100 % transmitted 100% followed

up.

100 % transmitted

The Authorising Officer by Delegation should have the reasonable

assurance that resources has been used 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 including

detection, prevention, correction and follow-up of fraud and irregularities.

Non spending

Objective 2: Effective and reliable internal control system in line with sound financial management.

Main outcome

Description Indicator Results 2017

Target 2017

Financial transactions: continue

to ensure all financial

transactions are initiated and validated within the deadlines.

All financial

transactions are

initiated and validated within the

deadlines

82,6% 100 %

Budgetary situation: monitor on a quarterly basis the budgetary

execution of the operational

budget

% of budget execution

(payments) with

respect to budget appropriations.

100.3% > 99 %

Control: continue to implement Degree of revised Achieved 75 % adopted


the reinforced effective control

strategy. Continue the adoption and implementation of revised

internal control strategies in the units concerned with

determination of entitlements.

internal control

strategies adopted and implemented in

the operational units.

and implemented.

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