Annual Activity Report - European Commission · 2020. 1. 31. · [Chafea]_aar_2014_ Page 6 of 93...

2014

Annual Activity Report

Consumers Health, Agriculture and Food Executive Agency

Ref. Ares(2015)1396341 - 30/03/2015

[Chafea]_aar_2014_ of 93


Table of Contents

INTRODUCTION 4

THE AGENCY IN BRIEF.......................................................................................................................................................... 4 THE YEAR IN BRIEF .............................................................................................................................................................. 5

EXECUTIVE SUMMARY 6

KEY PERFORMANCE INDICATORS ........................................................................................................................................... 6 IMPLEMENTATION OF THE AGENCY’S WORK PROGRAMME HIGHLIGHTS OF THE YEAR..................................................................... 10 KEY CONCLUSIONS ON RESOURCE MANAGEMENT AND INTERNAL CONTROL EFFECTIVENESS (EXECUTIVE SUMMARY ON PART 2 AND 3) ..... 12 INFORMATION TO THE COMMISSIONERS ............................................................................................................................... 12

1. POLICY ACHIEVEMENTS 13

1.1 ACHIEVEMENT OF GENERAL AND SPECIFIC OBJECTIVES .......................................................................................... 13 1.1.1 POLICY AREA: CONSUMER PROTECTION ............................................................................................................ 14 1.1.2 POLICY AREA: HEALTH ................................................................................................................................... 22 1.1.3 ABB ACTIVITY : BETTER TRAINING FOR SAFER FOOD INITIATIVE ............................................................................. 30 1.2 EXAMPLE OF EU-ADDED VALUE AND RESULTS/IMPACTS OF PROJECTS IMPLEMENTED WITH EU CO- FINANCING ............... 32 1.3 ECONOMY AND EFFICIENCY OF SPENDING AND NON-SPENDING ACTIVITIES. .............................................................. 34 1.3.1 EFFICIENCY GAINS THROUGH THE USE OF IT SYSTEMS FOR GRANT MANAGEMENT ...................................................... 34 1.3.2 EXCHANGE OF OFFICIALS ................................................................................................................................ 35

2. MANAGEMENT OF RESOURCES 36

2.1 MANAGEMENT OF HUMAN AND FINANCIAL RESOURCES BY THE CONSUMERS, HEALTH AND FOOD EXECUTIVE AGENCY. .... 38 2.2 ASSESSMENT OF AUDIT RESULTS AND FOLLOW-UP OF AUDIT RECOMMENDATIONS ..................................................... 56

3. ASSESSMENT OF THE EFFECTIVENESS OF THE INTERNAL CONTROL SYSTEMS 57

4. MANAGEMENT ASSURANCE 60

4.1 REVIEW OF THE ELEMENTS SUPPORTING ASSURANCE ........................................................................................... 60 4.2 OVERALL CONCLUSION ON ASSURANCE AND RESERVATIONS (IF APPLICABLE) ............................................................. 60

DECLARATION OF ASSURANCE 63

ANNEXES 64

ANNEX 1: STATEMENT OF THE RESOURCES DIRECTOR 65

ANNEX 2: HUMAN AND FINANCIAL RESOURCES 66

ANNEX 3: DRAFT ANNUAL ACCOUNTS AND FINANCIAL REPORTS 68

ANNEX 4: MATERIALITY CRITERIA 69

ANNEX 5: INTERNAL CONTROL TEMPLATE(S) FOR BUDGET IMPLEMENTATION (ICTS) 71

ANNEX 6: IMPLEMENTATION THROUGH NATIONAL OR INTERNATIONAL PUBLIC-SECTOR BODIES AND BODIES GOVERNED BY PRIVATE LAW WITH A PUBLIC SECTOR MISSION (IF APPLICABLE) 90

ANNEX 7: EAMR OF THE UNION DELEGATIONS (DG DEVCO ONLY) 91

ANNEX 8: DECENTRALISED AGENCIES (IF APPLICABLE) 92

ANNEX 9: PERFORMANCE INFORMATION INCLUDED IN EVALUATIONS 93

ANNEX 10: SPECIFIC ANNEXES RELATED TO "MANAGEMENT OF RESOURCES" (PART 2) 93

ANNEX 11: SPECIFIC ANNEXES RELATED TO "ASSESSMENT OF THE EFFECTIVENESS OF THE INTERNAL CONTROL SYSTEMS" (PART 3) 93


INTRODUCTION

The Agency in brief An executive agency is a Community body with a public service role. It is an autonomous legal entity and enjoys the most extensive legal capacity accorded to legal persons under national law of the Member States. The Agency is, at the same time, politically and budgetary dependent from the European Commission since it exercises its tasks under the supervision of the latter. The current Consumers, Health, Agriculture and Food Executive Agency (Chafea) is one of the six EU Executive Agencies that was set up on the basis of the provisions of the Council Regulation (EC) N° 58/2003. The Agency (initially PHEA: "Executive Agency for the Public Health Programme") was set up in December 2004 with a view to perform tasks linked to the implementation of the Community action in the field of Public Health. In 2008, the Commission extended the lifetime and mandate of the Agency, and renamed it into the "Executive Agency for Health and Consumers" (EAHC). The Consumers, Health and Food Executive Agency (Chafea) became the legal successor of EAHC on the 1.1.2014.Finally, the Consumers, Health, Agriculture and Food Executive Agency was established on the 17.12.2014 following the adoption of the Commission implementing decision 2014/927/EU.

The Agency performs operational tasks of executive nature (do not entail political choices) under the supervision of the European Commission that is exercised by the Agency’s parent Directorate Generals.

The Agency is managed by a Steering Committee and a Director. The Members of the Steering Committee serve as Officials in the Agency's Parent Directorate General (DG SANCO) and other horizontal Directorates General of the European Commission. In 2014 the Agency employed 50 staff allocated within three Units (Health Unit, Consumer and Food Safety Unit and Administration Unit).

In 2014, the Agency was responsible for implementing delegated tasks that made part of the following programmes: the Consumer Programme 2014-2020, the Health Programme 2014-2020, the Food Safety Training measures covered by Regulation (EC) No 882/2004 and Directive 2000/29/EC as well as the implementation of the legacy of the following programmes: the Public Health Programme 2008-2013, the Consumer Programme 2007-2013, the food safety training measures covered by Regulation (EC) No 882/2004, Directive 2000/29/EC, Decision C(2012) 1548 and Regulation (EC) No 1905/2006, the management of the operating grant agreement covering year 2014 that was signed between the Agency and ANEC, the European consumer voice in standardisation, governed by Regulation (EU) No 1025/2012.The overall budget managed by the Agency in 2014 amounted to 138 M Euro including commitment and payment appropriations.

The Agency's operating (administrative) budget is fully subsidised from the EU Budget. In 2014, it amounted to 7,24 M Euro.


The year in brief 2014 was the first year of implementation of the programmes under the multi annual financial framework 2014-2020. The objectives pursued by the new programmes were shaped on the basis of the principle of complementarity of EU action as well as the promotion of coordination between the authorities of the Members States responsible for Health and Consumer issues. Consequently, the EU types of intervention were tailored to the objectives that the co-funded actions (in the case of grants) needed to contribute to.

The Agency completed a step forward with regards to its grant management processes and procedures as electronic submission of proposals became possible for the first time; the Agency, in cooperation with the Commission services, tailored the IT platform and other parameters of the Horizon 2020 Programmes to the needs of the current Health and Consumer Programmes. Thus, the applications received in response to the 2014 call for proposals launched by the Agency were submitted and evaluated via the SEP (Submission-Evaluation Portal) and Compass application of the Horizon 2020 portal.

Finally the Agency further advanced with regards to the management of the new information provision and promotion measures concerning agricultural products implemented in the internal market and in third countries. The new regulation serving as legal basis for the execution of the promotion actions was adopted in 20141 and will enter into force at the end of 2015; following the conclusions of the cost benefit analysis that was concluded in 20132 the delegated Commission decision of 19.12.20143 added to the tasks delegated to the Agency part of the Agri - promotion actions referred to in Regulation 1144/2014; with the same delegation act the Directorate General for Agriculture and Rural Development became the third parent DG of Chafea, along with DG SANCO and JUST.

1 Regulation (EU) No 1144/2014 of the European Parliament and of the Council of 22 October 2014 on information provision and promotion measures concerning agricultural products implemented in the internal market and in third countries repealing Regulation (EC) No 3/2008

2 Cost Benefit Analysis for the delegation of certain tasks regarding the implementation of Union Programmes 2014-2020 to the Executive Agencies (Final Report 19 August 2013).

3Commission Decision C(2014)9594


EXECUTIVE SUMMARY The Annual Activity Report is a management report of the Director of the Consumers Health, Agriculture and Food Executive Agency to the College of Commissioners. It is the main instrument of management accountability within the Commission and constitutes the basis on which the Commission takes its responsibility for the management of resources by reference to the objectives set in the management plan and the efficiency and effectiveness of internal control systems, including an overall assessment of the costs and benefits of controls.

Key Performance Indicators The graphs below provide information in relation to key performance indicators that are included in the Agency's Annual Work Programme of 2014; they provide information on core aspects of the Agency’s operation; some of them derive from regulatory provisions that the Agency has to comply with.

A. Level of Budget Implementation (commitment and payment appropriations)

100% of the credits whose management was entrusted to the Agency were committed; 100% of the available payment appropriations were disbursed via 373 payment transactions pertaining to the management of the programmes delegated to the Agency.

B. Time to contract

Time to contract refers to the number of days that elapses between the award decision issued by the authorizing officer by delegation and the signature of the legal commitment (grant agreement or service contract); the target date is 60 days from the award decision in the case of service contracts signed following the launch of public procurement procedures; the respective target for grant agreements is 3 months from the notification of the successful applicants of the results following the evaluation of


their proposals. As illustrated in the graph below, the average time to contract with regards to procurement contracts has considerably decreased since 20134. At the time of the drafting of this report most of the legal commitments (grant agreements) had not reached the signature phase; that is due to the comparatively later publication of the respective call for proposals that was due to the late adoption of the necessary Commission Decision. Nevertheless, it is expected that all grants that were positively evaluated will be signed in less time than 3 months from the notification to successful applicants (the first notification occurred in December 2014).

C. Time to pay

The Agency executed 1.316 (1.294 in 2013) payment transactions within 2014. The average number of days needed for the execution of payments was 7 days regarding payments with 30 days deadline, 20 days regarding payments with 45 days deadline and 26 days regarding payments with 60 days deadline. More than 60% of the 37 late payments reported for 2014 were due to the late transfer of payment credits from the Commission to the Agency at the beginning of the year.

4 It has to be noted that the average time to contract for grant management in 2013 was 54 days; this calculation takes into account the grants that were awarded in 2013 (in response to the call for proposals 2013) but signed within the first months of 2014.


D. Level of residual error rate per ABB activity (ex post controls).

The main objectives of this stage of the control system of the Agency is the correction of errors, irregularities or even fraud that remained undetected at the stage of the controls that precede a payment.

The Agency follows a multiannual approach for the calculation of its residual error rate and net amount at risk. At the end of 2014, the cumulative residual error rate was calculated as being below the 2% materiality threshold; in specific, the % of residual error rates were 1,94% and 1,18% for the Public Health Programme and the Consumers Programme respectively.

E. Level of implementation of agreed actions as follow up to Audit Engagements: 100%

The Agency effectively implemented the totality of the open actions agreed in response to recommendations included following audit reports conducted before the end of 2014 (by IAS, CoA, IAC); one audit report was finalised in 2014 by the Agency’s Internal Audit Capability; the majority of deadlines for the actions included in the agreed action plan were set beyond 2014; nevertheless, those with a deadline set within 2014 were competed and no critical or very important recommendations on issues that could


affect the Agency’s sound operation were pending at the end of 2014. The IAS also closed the last two open recommendations in the context of its follow up audit on IT governance and performance in DG SANCO and EAHC.


Implementation of the Agency’s Work Programme highlights of the year Health represents a constituent ‘action point’ of the EU flagship initiative ‘’Innovation Union’’. The Programme for the Union’s action in the field of health 2014-2020 focuses on a set of well-defined objectives and actions with EU added value. Areas of prioritisation include: the exchange of good practices between the Member states; the support of networks of knowledge sharing or mutual learning; the unlocking of the potential innovation in health as well as the improvement of efficiency by avoiding duplications and optimising the use of the available financial resources. The beneficiaries of the current (third) Health Programme are of the following categories: competent authorities of the EU Member States, non-governmental bodies and health stakeholders (e.g. health professional associations, patients’ organisations) as well as international organisations acting in the sphere of public health.

The management of the current health programme (as well as its predecessors- legacy 1st and 2nd health programmes) by Chafea allowed the co-financing of actions that fall under thematic priorities as well as the operation of entities contributes to the that are active in areas corresponding to the specific objectives of the 3rd EU Health Programmes. At the end of 2014 the following number of proposals has been positively evaluated by the Agency and corresponding number of grants are in the pipeline for signature:

Health Programme 2014-2020 Proposa

ls submitted

Ineligible proposals

Proposals to be funded

Calls for proposals for projects HP-PJ-01-2014 – Priority topic Making use of the potential of innovation for the prevention and management of major chronic diseases (diabetes, cardiovascular diseases…)

23 6 4

HP-PJ-02-2014 - Priority topic Promoting early diagnosis and screening of preventable chronic diseases

6 0 0

HP-PJ-03-2014 – Priority topic Developing innovative approaches to promote the professional reintegration of people with chronic diseases and improving their employability

5 0 1

HP-PJ-04-2014 – Priority topic Supporting the priorities of the European Innovation Partnership on Active and Healthy Ageing --- Support in areas related to adherence, frailty, integrated care and multi-chronic conditions

14 0 6

HP-PJ-05-2014 - Priority topic Financial support for statistical data in the area of medicinal product pricing in Member States

1 0 1

HP-PJ-06-2014 - Priority topic Towards a sustainable health monitoring and reporting system

1 0 1

HP-PJ-07-2014 Priority topic Healthcare associated infections - Prevention and control in nursing homes and long-term care facilities”

0 0 0

Total all priority topics 50 6 13 Calls for proposals for operating grants (Framework Partnership Agreements 2015-2017)

Framework partnership/specific agreements 40+40 8 14 TOTAL 130 14 27


Consumer protection is a constituent element of the EU 2020 flagship initiative ‘A digital Agenda for Europe’. The EU 2020 strategy calls for citizens to be empowered to play a full part in the internal market which requires the strengthening of their ability and confidence to buy goods and services cross border, particularly online. The EU consumer policy aims at ensuring high level of consumer protection by placing the latter at the heart of the internal market; the aim of the Consumer Agenda is to support consumers throughout their life by ensuring safety of products and services made available to them, informing and educating them, strengthening their rights and giving them access to justice and redress. The beneficiaries of the Consumer Programme are dictated from the type of actions provided by the latter: consumer organisations at EU level, bodies established for the coordination of enforcement actions in the field of product safety, bodies designate by the EU Member States to operate as European Consumer Centres, officials of enforcement officials employed by EU national authorities defending the interest of Consumers.

Consumer Programme 2014-2020 Proposals

submitted Ineligible proposals

Proposals to be funded

Calls for proposals for projects Joint actions in the field of product safety 1 0 1

Grants for the functioning of Consumer Organisations at EU level 1 0 1

Grants for the functioning of the European Consumer Centers 30 0 30

Payment of Special Indemnities for the Exchange of Officials programme in the areas of General product safety Directive and Consumer protection Cooperation

60 0 60

TOTAL 92 0 92

The outputs referred to above demonstrate the Agency’s core outputs in response to the tasks delegated under the 2014 annual work programmes5 . The tangible results and overall impact that will be generated under those programmes on individual or cumulative basis will only be demonstrated in the future, following their implementation. Thus, some illustrative examples of results/impact produced from actions co- financed under the previous calls is presented within Part 1 of the present report.

5 Annual Health programme: http://ec.europa.eu/chafea/documents/health/wp2014_en.pdf Annual Consumer programme: http://ec.europa.eu/chafea/documents/consumers/consumer-annual-

work-programme-2014_en.pdf Better Training For Safer Food: http://ec.europa.eu/chafea/documents/food/financing-decision-

2014_en.pdf

http://ec.europa.eu/chafea/documents/health/wp2014_en.pdf

http://ec.europa.eu/chafea/documents/consumers/consumer-annual-work-programme-2014_en.pdf

http://ec.europa.eu/chafea/documents/consumers/consumer-annual-work-programme-2014_en.pdf

http://ec.europa.eu/chafea/documents/food/financing-decision-2014_en.pdf

http://ec.europa.eu/chafea/documents/food/financing-decision-2014_en.pdf


Key conclusions on resource management and internal control effectiveness (executive summary on part 2 and 3) In accordance with the governance statement of the European Commission, the staff of Consumers Health, Agriculture and Food Executive Agency 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, based on international good practice, aimed to ensure the achievement of policy and operational objectives. As required by the Financial Regulation, the Director of the Agency 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 Agency has assessed the effectiveness of its key internal control systems during the reporting year and has concluded that the internal control standards are effectively implemented. Furthermore, the Agency has taken measures to further improve the efficiency of its internal control systems in the area of Processes and Procedures as well as Information and Communication. Please refer to Part 3 for further details.

In addition, the Agency has systematically examined the available control results and indicators 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 Part 2 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 his capacity as Authorising Officer by Delegation has signed the Declaration of Assurance.

Information to the Commissioners The main elements of this report and assurance declaration have been brought to the attention of the Agency's Steering Committee and to the parent DG Director General, who has taken these into consideration in their reporting to Commissioner Vytenis Andriukaitis, responsible for the Health and Food Safety Portfolio and Commissioner Vera Jurova, responsible for the Consumers portfolio.


1. POLICY ACHIEVEMENTS6

1.1 Achievement of general and specific objectives Within this section, the Agency reports on the achievement of its core actions provided for in its Annual Work Programme for 2014; they mainly concern grant and procurement management procedures as well as dissemination activities of the results linked to the co-financed actions. These actions are provided for in the annual Commission Implementing Decisions (annual work programmes) providing the necessary content details for the execution of the multi-annual programmes whose management has been entrusted to the Agency. These work programmes mention the specific objectives, thematic priorities as well as policy areas where the Commission intends to award co- financing or seeks to acquire an in depth knowledge basis so as to better shape its policy in the relevant domain (procurement procedures). As such the grant and procurement management procedures launched by the Agency directly contribute to the achievement of the general and specific objectives of the multi-annual programmes of its parent Directorate Generals. Being in direct contact with applicants, beneficiaries and service providers, the Agency ensures an effective and efficient implementation (spending) of the EU appropriations that have been entrusted to it.

As succinctly mentioned in the executive summary of the present report, an important change that affected the implementation of the actions included in both the 2014 Health and Consumer Work Programmes occurred with the introduction of the Horizon 2020 IT grant management tools; the newly introduced IT system supports the electronic submission of applications, the adaptation of the proposals and the signature of the ensuing grants, project implementation and financial management of the actions. The IT system required adaptation and further development work to meet the needs of the two Programmes including the adaptation of model grant agreements and the call documentation (application forms, guides to applicants).

Within that dynamic context of operational changes, the Agency succeeded to implement its work programme efficiently and in its entirety as all actions that have been provided for were concluded; whereas the majority of the grant agreements and contracts will be signed at the beginning of 2015 the majority of procurement contracts deriving from procurement procedures launched in 2014 were awarded within the same year.

6 See footnote 1.


1.1.1 Policy area: Consumer Protection

The Agency published two calls for proposals (organisation of joint actions by the Member States in the area of product safety, and the award of an operating grant for organisations representing Consumer interests at European level); it sent two invitations for the submission of proposals for the award of specific grants for the implementation of activities by the European Consumer Centres and the exchange of officials executing tasks relevant to consumer protection. Seventeen public procurement procedures covering both open calls for tenders and specific request for services were launched in response to the provisions of the consumer annual work programme; all those actions underpin the four specific objectives defined in the consumer programme 2014-2020, namely, consumer safety, consumer information and education, ensure consumer rights via redress and cooperation initiatives. A number of additional procurement procedures not initially foreseen were requested after the establishment of the new Commission the most important being the preparation of a study for the identification of cross border obstacles to the digital single market and where they matter more

The narrative part that is cited under each table includes information of actions undertaken by the Agency and results that are considered highlights of the year 2014.


General objective: ensure a high level of consumer protection, empower consumers and place consumers at the heart of the internal

market, within the framework of an overall strategy for smart, sustainable and inclusive growth.

Specific objective: 1 Safety: to consolidate and enhance product safety through effective

market surveillance throughout the Union.

⌧ Spending programme Non-spending

Result indicator: Percentage of RAPEX notifications (Rapid Alert System for Dangerous Consumer products) entailing at least one reaction by other Member States Baseline

(843 notifications) 2010: 43%

Milestone

2017: 45%

Current Situation

42% (2014)

37% in 2013

34% in 2012

46% in 2011

43% in 2010

Target

Increase by 10% by 2020: 47.5%

Result indicator: Ratio number of reactions/number of RAPEX notifications (serious risks)% (source RAPEX)

Baseline

2010: 1.07

Milestone

2017: 1.15

Current Situation

1,28 (2014)

0,90 in 2013

0,88 in 2012

1,32 in 2011

1,07 in 2010

Target:

Increase of 15% by 2020: 1.23

Main outputs in 2014: Contribution of the Agency to the achievement of the above objective

Description: Number of outputs

Signature of a grant agreement for the implementation of a joint action in the area of General Product Safety Directive

1 joint action covering five safety product fields

Launch of the procedure and payment of special indemnities for the exchange of officials employed by authorities in the EU Member States performing tasks relevant to the General Product Safety Directive

19 exchanges of officials

The EU co- financed joint action on the General Product Safety Directive (GPSD), aims at exchanging and implementing best practices between the competent authorities of the participating Member States and improving EU cross-border cooperation. The enhanced cooperation raises quality level of EU consumer protection that related to product


safety. Several product safety activities were carried in the framework of grant agreements signed between the Agency and PROSAFE7 during 2014. These activities involved sampling and testing of products, follow-up of results and other relevant market surveillance procedures and practices for the following product categories: childcare articles, toys, chemicals in clothing, CO and smoke detectors, children's kick scooters and ladders.

The Agency is supporting exchanges of enforcement officials employed by competent authorities of Member States. The exchanges give them the opportunity of a hands-on experience and knowledge sharing of the practical implementation of Directive 2001/95 EC (General Product Safety) and Regulation 2006/2004 (Consumer Protection Cooperation) in another Member State. The mechanism for the co-financing of these exchanges changed in 2014. The EU funding is provided through special indemnities which replaced the burdensome procedure of grant award compared to the relation between requested inputs and outputs. In 2014, as a means of encouraging higher participation, interested officials from member states were able to participate throughout the year and not only within a shorter interval that is normally the case in the context of call for proposals. By the end of the year, 60 applications were received; 19 for GPSD exchanges (pointing to a slight increase in comparison to 2013 participation). The majority of the applications originated from Member States that joined the EU after 2004.

7 Prosafe stands for Product Safety Forum of Europe; it is a non-profit professional organisation for market surveillance authorities and officers from throughout the EEA. Its primary objective is to improve the safety of users of products and services in Europe. Prosafe coordinates and implements the tests on product safety provided for in the agreed joint actions.


General objective: ensure a high level of consumer protection, empower consumers and place consumers at the heart of the internal

market, within the framework of an overall strategy for smart, sustainable and inclusive growth

Specific objective 2:Consumer information and education and support to consumer organisations: to improve consumers' education,

information and awareness of their rights, to develop the evidence base for consumer policy and to provide support to consumer

organisations including taking into account the specific needs of vulnerable consumers


Result indicator 1: Average percentage of consumers' correct answers to three questions about basic consumer rights (source: Consumer Conditions Scoreboard) Baseline (2012) 52%

Milestone(2017) 55%

Current Situation(2014) 43%

Target (2020) 57%

Result indicator: 2Number of complaint bodies and number of countries submitting complaints to the European Consumer Complaints Registration System (ECCRS) (source: ECCRS)

Baseline

33 complaint bodies from 7 countries (2012)

Milestone

50 complaint bodies from 14 countries (2017)

Current Situation

37 complaint bodies from 13 countries

Target

70 complaint bodies from 20 countries

(2020)

Result Indicator 3: Consumers’ knowledge of basic consumer rights (9th consumer conditions scoreboard)

Baseline (2012) 11,7%

Milestone(2017) 12,5%

Current Situation(2014) 9%

Target (2020) 15%



1.Award of Grants for the functioning of consumer organisation at EU level

2.Launch of procurement procedures for the conduct of Market studies (Framework Contract Implementation)

3.Launch of procurement procedure for the award of a service contract for the provision of capacity building actions (Framework Contract Implementation)

4. Launch of procurement procedure for the award of a service contract for consumer satisfaction screening, the creation of a consumer education interactive platform and the conduct of behavioural economic studies (Framework Contract Implementation).

1. 1 Framework Partnership Agreement / 1 Specific Grant Agreement (Operating Grant )

2. 4 Requests for specific services

3. 1 request for specific services

4. 5 requests for specific services

The Framework Partnership Agreement that was signed with the European Consumer Organisation (BEUC) for the support of its operation expired in 2014. The Agency re launched a call for proposals for establishing Framework Partnership Agreement


covering three years 2015-2018; the latter allows the signature of annual (operating) grant agreements the first one being for year 2015. The new Framework Partnership Agreement will be awarded to the EU-level consumer organisation BEUC. The main task of BEUC8 is to represent its members at European level and defend the interests of all Europe’s consumers. Few examples of initiatives carried out by BEUC within 2014 with added value at European level include: the appointment of BEUC as member of the TTIP Advisory Group set up by DG Trade, representing European consumer's interests during TTIP negotiations9; awareness raising activities carried out by both BEUC and its members supporting collective switching of consumers in the EU energy sector ; co-ordinated enforcement actions against insufficient after-sales service concerning certain model of Sony mobile phones which resulted in improvement of the company’s after-sales service in a number of Member States.

In order to allow for an informed analysis of the problems faced by consumers within EU, the Agency launched the procurement procedures for the conduct of several surveys on consumer related issues and market studies; the information acquired following the implementation of these contracts will shed light to different issues affecting the functioning of the internal market from a consumers' perspective; they cover issues such as insurances; consumer patterns in the food choices and eating habits; marketing monitoring survey of 42 different consumer markets ; guarantees; consumer detriment in the EU. Following the announcement of the political priorities of the new Junker Commission, the Agency was requested to launch a market study on identifying the main cross-border obstacles to the Digital Single Market. The results of this study will serve as basis for future policy recommendations.

The objective for an enhanced consumer information and education was further promoted through the organisation of capacity building activities with the provision of local consumer related trainings in Member States with a lower level of consumer confidence. The creation and maintenance of an interactive information platform for consumer professionals (Consumer Champion) offered a web networking platform and the provision of e-learning courses on general consumer law. Training and expert courses were organised both at European and local level in Croatia (topics of Consumer Advice, Working with Media, Consumer Law), Czech Republic and Poland (Collective Energy Switching). An e-learning module on general consumer law is available in five EU languages (EN, CZ, PL, RO, HR). Another e-learning course on Energy was released in English at the end of 2014 and it is being translated to other EU languages. As mentioned above, the aim of these capacity building actions is to support consumers in Member States where consumer confidence level is lower.

Consumer education is becoming an area of interest and concern in many European countries. The Consumer Programme funded the creation of a portal site for secondary

8 BEUC acts as the umbrella group in Brussels for its members; its main task is to represent them at European level and defend the interests of all Europe’s consumers

9 TTIP stands for Transatlantic Trade and Investment Partnership, a free trade agreement currently being negotiated between the European Union and the United States; for more please consult: http://ec.europa.eu/trade/policy/in-focus/ttip/documents-and-events/index_en.htm#/economic-benefits

http://ec.europa.eu/trade/policy/in-focus/ttip/documents-and-events/index_en.htm#/economic-benefits

http://ec.europa.eu/trade/policy/in-focus/ttip/documents-and-events/index_en.htm#/economic-benefits


school teachers across the EU – Consumer Classroom. The portal provides the teachers with over 950 ready-to-use teaching sources on consumer education originating from all EU Member States. The platform helps teachers to share knowledge with students, allows participation in inter-school projects and becoming part of a dynamic web community. Since its launch in March 2013, the portal was visited by over 500.000 users. At the end of 2014, there were over 21 000 registered, including more than 13 000 teachers and 181 experts. During 2014 the growth of the platform was significant due to on-line promotional activities carried out in all EU Member states. The portal also offers Inter-school competitions where schools from different Member States can prepare a common project on consumer relevant topic. The theme of the 2014 Inter-School Competition was On-line Shopping. The competition was won by partner schools from Austria and Lithuania. The winning team was given a prize to visit the European Capital Brussels and get acquainted with the work of the European Union Institutions.

Finally, in 2014, the Agency launched the Consumer information campaign in Croatia which aims at raising awareness about consumer rights in the new Member State. The campaign focuses on the issues that are identified as the most problematic for Croatian consumers such as online shopping, telecommunications, and consumer credits.

General objective: ensure a high level of consumer protection,

empower consumers and place consumers at the heart of the internal market, within the framework of an overall strategy for smart,

sustainable and inclusive growth Specific objective: 3

Rights and redress: to develop and reinforce consumer rights in particular through smart regulatory action and improving access to simple, efficient, expedient action and low-cost redress including

alternative dispute resolution.


Result indicator: Percentage of Consumers who took action in response to a problem encountered in the past 12 months

Baseline

83% (2010)

(source: 9th Consumer Conditions Scoreboard)

Milestone

86% (2017)

Current Situation

76% (source: Eurobarometer 2014)

Target

90% (2020)


Description Number of outputs

Launch of procurement procedure for the award of service contract for the provision of a study related to Consumer Protection Cooperation (CPC)

Signature of a service contract for the conduct of a market study aimed at collecting data and providing analysis on misleading “free” trials and subscription traps for consumers in the European Union.

The market study will collect data and analysis with regards to misleading ‘free’ trials and practices that are subscription parts for the consumers in the European Union.


General objective: ensure a high level of consumer protection, empower consumers and place consumers at the heart of the

internal market, within the framework of an overall strategy for smart, sustainable and inclusive growth

Specific objective: 4 Enforcement: to support enforcement of consumer rights by

strengthening cooperation between national enforcement bodies and supporting consumers with advice


Result indicator 1: Level of information flow and cooperation within the CPC Network:

• Number of requests to exchange information between CPC authorities • Number of requests for enforcement measures between CPC authorities • Number of alerts with the CPC network

Baseline

• 129

• 142

• 63 respectively

(CPC Network Database)

Milestone (2017)

• 156

• 172

• 76

(2017)

Current Situation

• 132

• 125

• 68

(2014)

Target

Increase of 30% by 2020



Result indicator 2: % of enforcement requests handled within 12 months within CPC network

Baseline

50% for reference period 2007-2010 (latest known

result 43% in 2013)

Milestone

55%

Current Situation

53%

Target

60% by 2020

Result indicator 3: % of information requests handled within 3 months within the CPC network

Baseline

33% (reference period 2007-2010)

Milestone

37% (2017)

Current situation

51%

Target

50% by 2020

Result indicator 4: Number of contacts with consumers handled by the European Consumer Centres (ECC) (Source: ECC)

Baseline

71.000 in 2010

Milestone

88.750 (2017)

Current situation

93.741 (2014)

Target

Increase of 50% by 2020 (to 106.500)

Result indicator: Number of visits to the website of the ECCs (source: ECC-Net evaluation report)


Baseline

1.670.000 (2011)

Milestone

2.488.300 (2017)

Current situation

3.000.000 (2013)

Target

Increase of 70% (to 2.839.000) in

2020



Award of Grants for the operation of the 30 European Consumer Centres (ECC).

Award of the second phase of implementation of the service contract for the provision of services related to the functioning of the ECCs

Award of Grants for the implementation of Joint Action between Member States in the area of Consumer Protection Cooperation

Launch of the procedure and payment of special indemnities for the exchange of officials performing tasks relevant to CPC

30 Framework Partnership Agreements

30 Specific Grant Agreements

1st phase duration extended; 2nd phase to start in beginning of 2015

Replaced with the conduct of one market study on free trials referred to under the previous objective

41 applications for CPC exchange

In 2014, the Agency initiated the procedure for signing Framework Partnership Agreements (FPAs) with the entities forming the European Consumer Centres Network. Primarily, the FPA allows for a solid strategic planning with regards to the ECCs operation; it stabilises the efficiency aspects of grant management as it is not anymore necessary to submit and evaluate a proposal per year per Member State (for the time of duration of the FPA, in this case three years).

The procedure was set-up in two steps: at a first stage, an invitation was sent to the Member States in order to designate the ECC hosting bodies that would qualify to submit an application for funding; the designation had to comply with rules ensuring transparency and equal treatment. The invitation to submit proposals for Framework Partnership Agreements covers the period 2015-2017; at a second stage (following the award of the framework partnership agreements) the Agency co- finances the activities performed by the ECCs via signature of specific grant agreements that cover activities carried out by the latter on annual basis. During the course of 2014, the Agency managed the implementation of the first phase of a service contract providing for support mechanism to the ECC-Network so as to improve the visibility and the impact of the ECCs collective work.

Finally, as succinctly mentioned above, the Agency launched a procedure for providing special indemnities to exchanges of officials of EU member states. Within that context, 41 exchanges of officials working in the consumer protection cooperation area took/are to take place. As in the case of GPSD, the majority of the applications come from the EU Member States that joined the EU after 2004.


1.1.2 Policy area: Health

2014 was the year of entry into force of the 3rd Programme of the Union’s action in the field of Health (2014-2020). The implementation of the 2014 annual work plan has been challenging since not only were there important changes with regards to the legal instruments used for the co- financing of the activities but also Chafea employed online IT tools for the proposals' submission, evaluation and grant agreement preparation for the first time.

In specific, two calls for proposals (one for projects and one for operating grants) were launched in June 2014; the deadline for submission of proposals closed in September 2014. 13 projects have been recommended for funding but the signature of the corresponding grants will take place in the first quarter of 2015 due to the late publication of the Calls.

In addition, 14 applicant organisations (NGO/Network of experts) were selected for funding via operating grants leading to the signature of 14 Framework Partnership Agreements (FPAs). Non-Governmental Organisations or expert networks active in the field of health will receive co- financing to cover costs for the implementation of the organisation's multiannual work programme (2015-2017) via the signature of Framework Partnership Agreement (FPA) with Chafea. Specific Grant Agreements will be signed to allow for the annual co-financing. With the use of the new IT tools, Chafea was able to sign the majority of FPAs electronically in less than 3 months following the closure of the call for proposals.

The preparation of the direct grants for the 8 joint actions started in November 2014 for the co- financing of common actions to be carried out between EU Member States and third countries that participate in the Programme. Four direct grants with international organisations are also expected to be finalized in the first half of 2015.

Finally, 32 procurement procedures were launched, of which 6 were open calls for tenders.

The narrative part that is cited under each table includes information of actions undertaken by the Agency and results that are considered highlights of the year 2014.


Relevant general objective: complement, support and add value to the policies of the member states, improve the health of the Union citizens and reduce health inequalities by promoting health, encouraging innovation in health, increasing the sustainability of health systems and protecting Union citizens from cross-border health threats. Specific objective 1: In order to promote health, prevent diseases and foster supportive environments for healthy lifestyle: Identify, disseminate and promote the up-take of evidence-based and good practices for cost-effective disease prevention and health promotion.

⌧ Spending programme

Result indicator 1: Number of validated best practices for cost-effective prevention measures identified and disseminated (source: Health for growth programme 2014 - 2020)

Milestone Current Situation Baseline

(2013)

0

2015 7

2018 23

2014 n/a10

Target

(2020)

28

Result indicator 2: Number of Member States involved in projects of promoting health and preventing diseases (source: Health for Growth Programme 2014-2020)

Milestone Current Situation Baseline (2013) 0 (2015)

7 (2018)

23 2014 1711

Target

(2020) 28

Result Indicator 3: Number of EU countries with a national initiative on the reduction of saturated fat (source: White Paper on a strategy for Europe on Nutrition, Overweight and Obesity related health issues – COM (2007)279 final)

Milestone Current Situation Baseline 2013) 12 (2015)

18 (2018)

24 2014

21

Target

(2020) 28

Result Indicator 4: Number of EU countries in which a European accreditation scheme for breast cancer service is implemented (Source: Programme Statement attached to the Budget 2014)

Milestone Current Situation Baseline (2013) 0

(2017) 10

2014 No data available

Target

(2020) 28


Description Indicator

10 Given that the statistical monitoring system is still being finalised, this indicator cannot be reported on in 2014. However, this indicator has been revised in the parent DGs annual Management Plan 2015 to "the number of Member States involved in health promotion and disease prevention using evidence-based and good practices through measures and actions taken at the appropriate level in Member States". It will be reported on in the annual activity report 2015.

11 There are organisations from 17 Member States participating in the relevant project proposals that have been proposed for co-funding by the evaluation committee. However, the respective grant agreements were not signed at the end of 2014.


Award of grants (projects, joint actions, direct grant agreements with international organisations and service contracts

4 projects, 3 joint actions, 5 service contracts, 2 direct grants with international organisations, 14 operating grants

Joint Action: European Partnership for Action against Cancer (EPAAC)

The European Partnership for Action against Cancer, coordinated by the National Institute of Public Health of Slovenia, involved a big part of the European cancer community and brought together the efforts of different stakeholders in the area of cancer control. It was able to mobilise a critical mass of knowledge and expertise in support of Member States efforts to collectively address issues that few were able to handle on their own, working in areas such as guides for National cancer plans, early detection and screening, prevention of the disease and the set-up of indicators.

Equally importantly, it served as the key anchor and hub for the exchange of experience and best practices across the EU, feeding into several other actions co-funded by the Health programme such as CANCON on Quality Improvement in Comprehensive Cancer Control, BENCHCAN on benchmarking cancer care and RarecareNet on rare cancers.

Joint action: Alzheimer Cooperative valuation in Europe (ALCOVE)

Coordinated by the Haute Autorité de Santé, this was the first major effort of EU collaboration on Alzheimer and related disorders, capitalising on and sharing individual Member States’ experience and knowledge in this area. The Joint Action established an independent and scientifically robust European network to inform and advise all the actors involved, be they decision-makers, health care professionals, individuals living with dementia and their carers.

With a view to promote quality of life and autonomy for patients, ALCOVE presented concrete operational proposals in several key areas, such as: improving knowledge about dementia prevalence; ensuring early, accurate and accessible diagnosis; ensuring a long-term care cycle for persons living with dementia and their carers; and reducing the inappropriate use of antipsychotics.

Relevant general objective: complement, support and add value to the policies of the member states, improve the health of the Union citizens and reduce health inequalities by promoting health, encouraging innovation in health, increasing the sustainability of health systems and protecting Union citizens from cross-border health threats. Specific objective 2: In order to protect citizens for serious cross border health threats: Identify and develop coherent approaches and promote their implementation for better preparedness and coordination in health emergencies;

⌧ Spending programme

Result indicator 1: Number of Member States integrating the developed common approaches in the design of their preparedness plans [source: Commission Staff Working paper impact assessment accompanying the Decision of the European Parliament and Council on serious cross-border threats to health)


(2013)

0

(2015)

4

(2017)

14

2014

0

Target

(2020)

28



Description Indicator Award of grants (projects, joint actions, direct grant agreements with international organisations and service contracts)

1 joint action, 3 service contracts

Project: Cost-effectiveness assessment of European influenza human pandemic alert and response strategy (FLURESP)

FLURESP aimed at redefining and updating human pandemic alert and response scenarios at the EU level, integrating the results and lessons learnt from the 2009 flu pandemic. Composed by key experts in the flu alert and response strategies, in public health and in health economics, the consortium provided an extensive assessment of current strategies; described and clustered possible response strategies; and assessed and ranked these strategies using both multi-criteria and cost-effectiveness approaches.

The project broke new ground by providing an integrated approach, which will support Member States to select the most appropriate and efficient public health response, including improved inter-sectorial collaboration and cross border coordination in responding to health emergencies.

Project: Promotion of Immunization for Health Professionals in Europe (HProImmune)

The project developed a toolkit for the promotion of immunizations among Health Care Workers (HCWs). The toolkit was developed in English and translated into several languages incl. Greek, German, Lithuanian, Polish, Italian and Romanian and then pilot tested among primary care practices and hospitals in 6 countries.

The pool of knowledge created on the immunization behaviour of HCWs (best practices, barriers and enablers) has significant EU added value as a basis for any future immunization promotion activity and the development of hospital and even national immunization action plans, with direct potential impact on EU citizens. Collaboration is on-going after the end of the project with the ECDC and WHO-Europe with the aim of producing the toolkit in more languages and testing it on a larger scale.

Response to Ebola crisis

Responding to the Ebola crisis, Chafea, in collaboration with DG SANCO, produced a video addressed to the general public in the EU Member States and in the WHO European region. Available in 22 EU official languages, the video explains to public at large in Europe that although Ebola is a serious and contagious disease, "there is no reason to worry".


Relevant general objective(s): complement, support and add value to the policies of the member states, improve the health of the Union citizens and reduce health inequalities by promoting health, encouraging innovation in health, increasing the sustainability of health systems and protecting Union citizens from cross-border health threats. Specific objective 3: In order to support public health capacity building and contribute to innovative, efficient and sustainable health systems: Identify and develop common tools and mechanisms at EU level to address shortages of resources, both human and financial and facilitate the voluntary uptake of innovations in public health intervention and prevention strategies.

� Spending programme

Result indicator 1: Number of Health Technology Assessments produced per year (source: Programme Statement attached to the budget 2014).

Milestone Current Situation Baseline (2013)

2 (2015) 6

(2017) 10

2014 9

Target

(2020)

50

Result indicator 2: Number of MS using the tools and mechanisms identified in order to contribute to effective results in their health systems – guidelines on patient summary sset of data (source: Health Programme 2014-2020)


0 (2015)

5 (2017)

12 2014

0 (14 countries joined the working group to prepare the implementation of the guidelines, no countries yet technically implementing)

Target (2020)

28

Main outputs in 2014: contribution of the Agency to the achievement of the above objective

Description Number of outputs Award of grants (projects, joint actions, direct grant agreements with international organisations and service contracts

8 projects, 2 joint actions, 8 service contracts, 1 Direct grant with international organisations

Joint Action: eHealth Governance Initiative (JA-EHGov)

Several European countries are in the process of initiating or rolling out large-scale eHealth investments and implementation programs. In parallel, there is a rising awareness that the challenges in successfully implementing such programs are common and that there is significant EU added value in collaborating to ensure interoperability of such efforts at the European level. This is the main rationale behind the political commitment translated by the eHealth Governance Initiative, setup in the framework of the Directive on patients’ rights in cross border healthcare.

The JA-EHGov is the main support tool for this platform of cooperation. Bringing together more than 25 Member States, it has become a de facto bridge between policy dialogue and technical collaboration for all major developments in the ehealth area, whether initiated from a public health or technological perspective. Ensuring coherence and complementarity between all major projects in this area, even if co-funded through other spending programmes, the JA has significantly contributed to key milestones in the European dimension of ehealth such as in the patient summary information, overall interoperability and eprescription areas.


Project: Promoting better health for mothers and babies through routine European monitoring of perinatal health and healthcare (EURO-PERISTAT Action)

EURO-PERISTAT developed a high quality, innovative, internationally recognized and sustainable European perinatal health surveillance system. Coordinated by INSERM, this network composed of clinicians, epidemiologists and statisticians, provides an accurate picture of the in-country and intra-EU differences in perinatal mortality and underlying social and geographical inequalities.

Following up on previous projects that developed the data collection methods, the current funding has been dedicated to data quality issues, through appropriate continuous quality improvement methods, and on improving the quality and breadth of the selected indicators. As a result, the second European Perinatal Health Report with 2010 data was produced and broadly disseminated to policy-makers and other stakeholders.

Service contract: Review and mapping of the continuous professional development and lifelong learning for health professionals in the EU

A skilled and motivated health workforce is an important factor underpinning the sustainability of healthcare systems. The objective of the study was therefore to explore the full potential of continuous professional development (CPD) and life-long learning (LLL) of health professionals, also in light of the mobility of the health workforce across the EU.

The study provided a comprehensive comparative account of related models and practices for doctors, nurses, dentists, midwives and pharmacists in the EU-28 and the EFTA/EEA countries and how these are structured and financed. The study further developed key policy recommendations. At the national level, MS should allow all health professionals to undertake CPD, by addressing the main barriers identified in relation to lack of time and resources; at the EU level, it is recommended that the European Commission support the inclusion of CPD in health workforce planning and forecasting, as well the exchange of best practices in this area between stakeholders.


Relevant general objective: complement, support and add value to the policies of the member states, improve the health of the Union citizens and reduce health inequalities by promoting health, encouraging innovation in health, increasing the sustainability of health systems and protecting Union citizens from cross-border health threats. Specific objective 4: In order to facilitate access to better and safer healthcare for union citizens: Increase access to medical expertise and information for specific conditions also beyond national borders, facilitate the application of the results of research and develop tools for the improvement of healthcare quality and patient safety through, inter alia, actions contributing to the improvement of health literacy.

� Spending programme

Result indicator 1: The number of Member States having adopted and implemented a national strategy for the prevention and control of health-care associated infections (HAI), and from 2014, monitor forthcoming ECDC indicators for hospitals for the prevention of HAI (source: Commission report (COM (2012) 658 final) on the implementation of the Council Recommendation 2009/C 151/01)


9 (2015)

15

(2018)

20

2014

Not yet available

Target

(2020)

28

Result indicator 2: The number of functioning European Reference Networks (source: Health programme 2014-2020).


(2013)

0 (2015)

2

(2018)

10

2014

0

Target

(2020)

22

Result Indicator 3: Share of population worried to suffer an adverse event while receiving healthcare (source: Programme Statement attached to budget 2014).


(2013)

50% (2015)

45%

(2017)

40%

2014 Indicator has been

dropped

Target

(2020)

30%

Result indicator 4: The number of Member States having implemented the provisions of the Council recommendation of 09/06/2009 on patient safety including the prevention and control of healthcare associated infections 2009/C 151/01. (source: Report from the Commission to the Council on the basis of Member States’ reports on the implementation of the Council Recommendation on patient safety, including the prevention and control of healthcare associated infections (COM(2012) 658 final)


(2013)

9 (2014)

19

(2017)

25

2014 18

Target

(2020)

28

Result indicator 5: Number of members of European Reference Networks (Health programme 2014 - 2020).


(2013)

0 (2015)

26

(2017)

120

2014 0

Target

(2020)

266

Main outputs in 2014: contribution of the Agency to the achievement of the above objective

Description Number of outputs

Award of grants (projects, joint actions, direct grant agreements with international organisations and service contracts

2 joint actions, 2 service contracts, 1 direct grant with international organisations


Joint Action: European Union Network for Patient Safety and Quality of Care (PaSQ)

Following up on a successful project completed in 2010, this Joint Action brings together the competent authorities of all EU Member States responsible for patient safety and quality of care, as well as all stakeholders involved. PASQ has built an important database of 400 agreed and validated good practices which are accessible to healthcare professionals and to the public through a mutual learning web platform. It has further built an exchange mechanism through which more than 30 training events have been carried out throughout the EU, involving healthcare professionals, as well as patient organisations.

It also promoted the actual implementation of Safe Clinical Practices in selected Health Care Organisations: four (4) Safe Clinical Practices (SCPs) have been selected for implementation in more than 150 health care organisations (hospitals and primary care practices) across 17 EU Member States. In addition, the impact of these practices will be measured after one full year of implementation.

Service contract: Reference compendia for the application of a single European coding system for human tissues and cells

This service contract, implemented by the Italian national transplantation Centre (CNT), was an essential step in the implementation of the single EU Coding system for human tissues and cells (T&C) and therefore EU legislation in this area (article 25 of the Directive 2004/23/EC1 on Tissues and Cells).

To allow for rapid tracing in case of need such a coding system needs to be understood, shared and used by all national competent authorities (NCAs) as well as by all tissue establishments (TEs) in the EU. CNT developed thus not only the Tissue Establishment (TE) and Product reference compendia, but also the necessary manual explaining how to use the codes to enable stakeholders, tissue bankers and tissue transplantation professionals to code/decode information on the main characteristics and properties of tissues and cells, ensuring thus proper identification of the donor and rapid traceability of all donated tissues and cells across the EU.


1.1.3 ABB activity : Better Training for Safer Food Initiative

Better Training for Safer Food (BTSF) is an initiative of the Agency's parent DG (DG SANCO) that aims at implementing an EU training strategy in the areas of food law, feed law, animal health and animal welfare rules, as well as plant health rules addressed mainly to officials of the competent authorities of the EU Member States and to certain extend to third countries participants. It aims at delivering high-value training courses with the assistance of service providers that have been awarded service contracts by the Agency following the evaluation of tenders submitted in response to open public procurement procedures launched by the latter. All the steps of the procedure leading to the signature of the contracts are managed by the Agency. The contractors are requested to organise the training activities in several training locations spread all over the Member States, ensuring a good and broad coverage of the European Union. In terms of development of comprehensive training topics the main challenge is to bring together the best expertise on the subject (via the selection of best tutors) and implement an optimal pedagogical approach. The subjects for the training courses are selected according to the current needs in the Member States. These needs depend largely on the actual epidemiological situation in the EU as well on the actual state of play regarding the change of the veterinary and food safety legislation or other overall EU valid implementing acts i.e. safeguard measures, transitory measures against certain pests etc.

During 2014, BTSF has continued to progress and expand not only in terms of number of activities, training subjects and participation levels, but also in terms of quality of the training offered to the participants. The Agency put into practice a more diverse and flexible approach so as to ensure the provision of the highest possible quality of trainings through the adaptation of the trainings’ methodology taking into account of new developments and the needs that were brought forward by the BTSF stakeholders.

Significant progress was done for the setting up of an e-learning strategy aimed at expanding and diversifying the training opportunities and the gradual introduction of sustained training missions for Member states specifically tailored to cover specific training needs. There are 10 e-learning training modules providing basic level training. Additional positive results were achieved with the implementation of the training activities related to DG DEVCO and DG TRADE programmes: one consisting in training and capacity building actions aimed at transferring sanitary and phytosanitary (SPS) know-how to developing countries, the other providing training to enable third countries to participate effectively in International Standard Setting Bodies.

The following actions and results are highlights of the year 2014, as they contribute directly to achieving the objectives of DG SANCO.


Specific objectives: Ensure food is safe and wholesome and maintain a high level of animal health and welfare and plant protection enhancing the knowledge of competent authority control staff to allow better production, processing and placing on the market of safe food and health animals and plants


Result indicators: Satisfaction rate as attributed by those followed a training under the Better Training for Safer Food programme; steady state of annual participation

Baseline

85% (2013)

6100 part.

Milestone

Steady 85%

>/ 6.100 part.

Current situation

Steady 85 %

>/ 6.100 part.

Target

85% or higher by 2015

>/ 6.100 part.



Procurement contracts for organising training activities in the following areas:

- food and feed, animal health and welfare, and plant health

- Conference of food crime

- Workshops for Milan EXPO 2015

5 open call for tender and one request for specific services were launched

5 contracts extended for a period of 2 years

1 specific contract signed in implementation of existing Framework Contract

Currently, the Agency is running 34 contracts that allowed the organisation of 165 training sessions whose duration was ranging between 3 and 4 days; those trainings took place within and outside the European Union (Asia, Latin America etc). In 2014, specific care was given to organise training activities on essential key programmes such as "Hazard Analysis and Critical Control Points" (HACCP, 11 workshops organised, 275 participants), "Audit systems and internal auditing" (9 workshops organised, 270 participants), "EU quality schemes" (13 workshops, 455 participants), "Animal welfare" (9 workshops, 495 participants). The training activities on the "Enforcement in sanitary and phytosanitary fields" were established with the organisation of 13 sustained technical training missions (STMs), which are missions aimed at assisting national and local control authorities on the field, reaching in average 25 participants for each STM.

All BTSF projects are closely monitored on a daily basis as the Agency was offering a constant, year on, helpdesk for all the contracts. The analysed results and gathered findings are transmitted to the appropriate services of the Parent DG for further consideration. As a means of quality assurance, the Agency’s staff members are performing on the spot visits to assess quality aspects of the trainings organized by its contractors. 11 on the spot visits were performed by the agency in 2014. Additionally, policy officers from the parent DG (SANCO) regularly attend the training sessions. The Agency uses a specific questionnaire to assess each contractor's performance this “back to office” type questionnaire represents a key means of ensuring quality and value for money with regards to the services provided by the contractors.


1.2 Example of EU-added value and results/impacts of projects implemented with EU co- financing Consumer Programme: on line Consumer Support when abroad

The network of European Consumer Centres provides information to consumers on EU rights when shopping in a country different of that where the consumer has its usual residence. The network covers 28 EU Member States, Iceland and Norway. In 2013, the services of the network were used by over 80.000 consumers. More than 32.000 complaints were collectively handled, the majority of which are related to on-line purchases. The trend increased in 2014. The network developed joint projects which aim at providing evidence, tips and practical information on topics of interest for the European consumers including guarantees, e-commerce, timeshare, etc. In 2014, it developed a unique mobile application ECC-Net: Travel App. The application helps consumers to cope with difficult situations on their holiday abroad and to express their consumer rights in the language of the country of their destination. The ECC-Net Travel App provides legal information and language support in 23 EU languages plus Norwegian and Icelandic. The topics covered include: retail purchases, car rental, hotel accommodation, medical treatment, air and rail transport as well as bus and maritime travel. A ‘useful information’ section encompasses important phone numbers and contact details necessary in case of emergencies or every day needs. The app is free of charge and works offline to avoid the roaming trap. It is available for mobile devices with iOS, Android and Microsoft Windows operating systems. There were over 30.000 downloads of the App since its launch in July 2014. The very fact of the creation and co-financing of the network by the European Union allows for an effective exercise of consumer rights within the internal market; unless the network was set up and operating under clear cooperation modalities at European level it would be very hard (if not impossible) for a consumer residing in a member state to claim rights against a trader/ service provider established in another member state via a single contact point and free of charge. Within the course of 2014, 93.741 consumers chose to seek advice and support from an ECC. The European Consumer Centers cooperate with the national consumer organizations, authorities and the Consumer Ombudsmen; this platform of cooperation allows for synergies among a European (cross border) and national level on consumer protection issues. Additionally, the information provided to the European Commission by the European Consumer Centres as a result of the discharge of their cross border tasks allows the former to obtain substantive information regarding aspects of the internal market that appear to be problematic from a consumer point of view and would, eventually, require to be addressed at EU level.

Health Programme: Ebola outbreak

Health threats are, by nature, transnational. The Quality Assurance Exercises and Networking on the Detection of Highly Infectious Pathogens (QUANDHIP) is one of the EU co- financed Joint Action among EU member states; the latter allows the cooperation of national laboratories whose aim is to assist Member States in case of emergence of highly infectious pathogens since 2011. Among the activities aiming at strengthening of laboratory capacities from 2011 to 2014 were the organization of External Quality Assurance Exercises (EQAE) on diagnostics of Filoviruses (Ebola and Marburg), collection of detailed information on diagnostic capabilities in EU Member States, and distribution of a molecular kit for diagnosis of Filoviruses (in April 2014). The


network cooperation became a component of a joint European response in the context of the Ebola outbreak. All of the EU level 3 and level 4 laboratories joined forces to improve diagnostic capabilities through activities that included the drawing up of operational preparedness plans, the purchase of material (diagnostic kits), the training of staff and the conduct of external quality assurance exercises. More than 220 samples were tested across the network, while the latter provided skilled staff for similar laboratory activities in West Africa (Guinea, Liberia). This experience is extremely important as it becomes a reference for response at European level in case of similar occurrences.

Better Training for Safer Food: Training Missions in support of food and feed emergency situations

In the Food and Feed Safety area, trainings are designed with high flexibility allowing a quick response to threats emerging in animal health or food law area. In 2014, sustained training missions (STM) were organized and delivered in different Member States that were affected by severe summer floods; guidelines tailored to the actual situation were developed to help particular MS to fight against the imminent threat coming from the carcases of drowned animals; another set of ad hoc STMs were organized in the Member States bordering to the Non-EU countries at the East - mostly to Ukraine and Belarus –for issues related to African Swine fever during which more than 300 concerned officials benefited from.


1.3 Economy and efficiency of spending and non-spending activities. According to the financial regulation (art 30), the principle of economy required that the resources used by the Agency in the pursuit of its activities shall be made available in due time, in appropriate quantity and quality and the best price. The principle of efficiency concerns the best relationship between resources employed and results achieved.

The respect of these principles is continuously pursued through the implementation of internal procedures and predefined practices. These procedures ensure that activities are executed in an efficient manner (e.g. the different workflows contribute to the efficient cooperation between staff, units, etc…) and according to the principle of economy (e.g. the procurement rules ensure procurement in optimal conditions).

The Agency is continuously fine-tuning its internal arrangements in order to improve the efficiency and economy of its operations. The following two initiatives show how these principles are implemented in Chafea.

1.3.1 Efficiency gains through the use of IT systems for grant management The Agency assumed concrete action to increase the effectiveness and efficiency of the actions entrusted to it; in specific, the proposal submission under both the Health and Consumer programmes was made electronically via the use of the Horizon 2020 IT platform for grant management. Both the proposal submission and their subsequent evaluation were carried out within a secure system without use of paper documents. All contacts with applicants and future beneficiaries are centralised; the system allows to avoid cumbersome and lengthy procedures that were unavoidable in the past when the main beneficiary of a project had to obtain documents and information from the part of all co- beneficiaries before and during the signature and during the implementation of a co- financed action.

Approximately 60 man days were saved during the evaluation and submission phase, which were already carried out in 2014. The introduction of the online IT tools for the proposals' submission, evaluation, contracting and monitoring has significant potential for savings. It is calculated that the resources required for the evaluation stage of the proposals will be reduced by72% after the comparison of time consumption data among 2014 and the previous years (reference 2013). However, this year’s savings were offset by the significant upfront investment for the customization of the IT tools to the needs of Chafea, as well as the changes in Chafea internal processes and procedures. Hence these savings will be only fully realized at the end of 2015. Despite the high resource investment necessitated for the phasing in of the new IT tools the paperless workflow has significantly reduced the overall time to contract; 79% of framework partnership agreements were concluded in less than three months from the closure of the call in this first year of the system’s operation. The ensuing specific grant agreements are expected to be signed in less than 5 months from the closure of the call and the same is expected for the project grants.


1.3.2 Exchange of officials The activity aims at allowing officials of EU member states to profit from a professional experience in the authority of another member state responsible for issues of product safety/ EU cooperation on Consumer related issues. The cumbersome procedure of grant management for amounts that hardly exceeded 5.000€ gave its place to a less complex payment that follows the completion of the mission of each participating national official. The payment of special indemnities on the basis of predefined allowances (per country) replaced the reimbursement of eligible costs (in the form of flat rates); The abolition of the procedure that necessitated the preparation of call for proposals, evaluation, budget commitment, payment of pre-financing and calculation of balance payment liberated resources that were redeployed to core rather than administrative tasks. The freed resources represent a 5,5 % of the operational resources devoted to the management of the Consumer programme delegated to the Agency.


2. MANAGEMENT OF RESOURCES 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 system on a continuous basis and by internal and external auditors. Its results are documented and reported to the Director of the Agency and its Steering Committee. The reports produced are:

The reports of the Authorising Officers by delegation who have received a sub- delegation regarding payments' authorisation (operational and administrative budget);

• The annual report of the Financial Verifying Officer (FVO); FVO verifies financial aspects of all (100%) budgetary transactions priory to their authorisation by the Agency’s authorising officer;

• The results of the controls performed by the Advisory Committee for Procurement and Contracts (ACPC) of the Agency; the ACPC is mandated to issue an opinion on each public procurement procedures launched by the Agency12 before the Authorising Officer assumes its decision to award/not award a contract;

• The contribution of the Internal Control Coordinator (ICC), including the results of internal control monitoring at Agency level;

• The results of the controls performed by the ex-post control function;

• The opinion of and observations from the Internal Audit Capability (IAC);

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

• The observations and recommendations reported by the European Court of Auditors (ECA).

This section reports the control results and other relevant elements that support managements' assurance on the achievement of the internal control objectives13. It is structured in two separate sections: (1) the Director’s assessment of its own activities for the management of its resources and (2) the assessment of the results of internal and external audits, including the implementation of audit recommendations14.

12 With a value equal or above the Directive’s thresholds (currently 130.000€) 13 Effectiveness, efficiency and economy of operations; reliability of reporting; safeguarding of assets and

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

14 The heading 'assessment of the activities carried out by other entities to which the DG has entrusted budget implementation tasks' is naturally non applicable for the Executive Agency being itself the entity to which the Commission has entrusted budget implementation tasks.


Being Executive Agency, Chafea implements the financial appropriations through direct management mode provided for in article 58 of the EU Financial Regulation. In 2014, the Agency was responsible for the management of the third Health Programme 2014-2020, the Consumer programme 2014-2020 and the food safety training measures covered by Regulation (EC) No 882/2004, Directive 2000/29/EC, Decision C(2012) 1548 and Regulation (EC) No 1905/2006 as well as the legacy actions co- financed under the EU Health Programme 2008-2013 and the Consumer Programme 2007-2013. The programme's implementation entailed the use the available credits for the award of grants (cost-shared projects) and public procurement contracts (for the provision of services requested by the European Commission). The budget appropriations managed in 2014 were as follows:

Programme Commitment Appropriations 2014

Payment Appropriations 2014

Health Programme € 45,15M € 32,95M

Consumer Programme € 16,56M € 13,53M

Better Training for Safer Food Initiative15

€ 15,39M € 14,67M

The Agency was responsible for the launch and management of calls for proposals pertaining to the Health and Consumer Programs; two and four call for proposals were launched in implementation of the Health and Consumer Programme respectively; additionally, the Agency launched 59 public procurement procedures for the provision of intellectual services. The later were mainly related to the acquisition of studies providing input to the policy making of the Agency's parent DG and the provision of training courses on food safety rules for the employees of national authorities of the EU Member States dealing with food controls16.

Programme Number of procurement procedures launched

Number of calls for proposals

Public Health Programme 32 2

Consumer Programme 17 2

Better Training for Safer Food Initiative

10 N/A

15 Relevant appropriations are the sum of Titles 17 04, 20 02 and 21 02 presented in Annex 3 of the present report

16 For more detailed information regarding the scope of those procurement procedures please refer to Part I of the present document


As an autonomous EU body, the Agency has its own operating (administrative) budget for which it receives an annual subsidy from the EU. In 2014 it amounted to € 7,24 million. The budget covers the running costs of the Agency including staff expenditure, office related costs, IT services and programme support including payment of experts assisting the evaluation of the programmes’ results, communication and dissemination activities. The Agency’s Director is authorising officer (AO) with regards to the implementation of the Agency's operating budget.

2.1 Management of human and financial resources by the Consumers, Health and Food Executive Agency. This section reports and assesses the elements identified by management that support the assurance on the achievement of the internal control objectives. Annex 5 of the present report outlines the main risks together with the control processes aimed to mitigate them in detail; the indicators used to measure the performance of the control system are also included therein.

Human Resources – Chafea

Objective: recruit, train, assess, motivate and retain highly qualified staff that allow for effective and efficient operation of the Agency as well as promoting of equal opportunities within the Agency.

Indicator Target 2014 Current situation (as achieved)

Occupation rate maintained above target 95% 96%17

% of women in AD or equivalent positions 50% 20%

mandatory trainings completed by staff members within one year from their entry into force

100% 71%

Timely completion of staff performance assessment

100% 100%

Although two AD positions are filled by women (20%) it was not possible to reach the percentage of 50%, given the low number of management positions in an Agency of the size of Chafea (50 staff members in total). The staff establishment plan foresaw 50 posts for 2014. At the end of the year the Agency employed 48 staff. Three staff members left the Agency in the course of 2014 and an identical number was recruited and took office in 2014. Staff turnover was 6% (9% in 2013).

Control effectiveness as regards legality and regularity

The Agency has set up internal control processes aimed to ensure the adequate management of the risks relating to the legality and regularity of the underlying transactions, taking into account the multiannual character of programmes it manages

17 At 31.12.2014


as well as the nature of the payments concerned. As set with the materiality criteria referred to in Annex 4 of the present report the control objective is considered to be achieved if a) the residual error rate does not exceed 2% of the annual payment authorisations per ABB (Activity Based Budging) activity b) no significant internal control weaknesses were reported/detected , c) no significant and/or repetitive errors occurred d) no critical issues pertaining to the Agency’s control systems audited were reported by the Internal Audit Capability, the Court of Auditors or OLAF (provided that the audit coverage of the year was satisfactory) and that e) no other event that resulted in a reputational detriment occurred.

Grant management under direct management mode (art. 58 of the Financial Regulation)

Overall, the actions receiving co- financing under the Consumer and Health Programmes have a duration varying between one and three years. The majority is implemented by public and academic organisations, NGO's but also private entities. The beneficiaries are located in different countries within Europe (sometimes, outside the EU too). Applications are evaluated on the basis of pre announced selection and award criteria that are specified in the annual Commission decision that serves as basis for the ensuing budgetary commitment and authorisations. Those criteria aim at selecting the proposals that optimally contribute to the attainment of the objectives set by the programmes. The system aims at ensuring that the best proposals bringing an optimal EU added value will be co-financed from the EU budget. To mitigate the risks inherent to the evaluation process (detailed in Annex 5 of the present report) the Agency developed and implemented procedures to ensure that the best proposals are chosen in a competent, objective, impartial and transparent manner. Those procedures are designed with due account of the applicable regulatory provisions (EU financial regulation, personal data protection regulation, other EC decisions etc) and the Internal Control Standards for effective management adopted by the Commission. The Agency’s operation is supervised by the European Commission through the Agency's parent DG (DG SANCO). The grants awarded under the third Health Program and the second Consumer Program take the form of reimbursement of a specified proportion of eligible costs that were actually incurred by the beneficiary; the cost reimbursement is subject to a preliminary budget estimate that is submitted with the proposal and subsequently annexed to the grant agreement. The calculation and verification of eligible costs bears a relatively high risk of errors minding that beneficiaries differ in their legal status, are located in a wide range of Member States where different legal orders apply and operate on the basis of their own internal control system (e.g. with regards to accounting practices, documentation of working inputs/outputs etc). Taking those specificities into account, the Agency put in place an internal control system that allows for a close monitoring of the overall evolution and each co- financed project. In specific, the controls ensuring a sound follow up are essentially based on the technical deliverables and reporting provided by the beneficiaries of the co- financed actions. In addition, the Agency's staff participates in events or workshops where project deliverables are publicly presented and further disseminated.

With regards to payment execution, the Agency verifies the eligibility of the costs declared by the beneficiaries through desk controls performed on the basis of supporting documents. Following the completion of the co- financed action and the receipt of the final cost claim and supporting documents of costs categories predefined


in the grant agreement the Agency executes the balance payments. Following the completion of co-financed actions Agency performs ex-post audits at the beneficiaries' premises (on the spot audits) covering a percentage of payments authorised during previous years. During the first years of the programmes’ implementation, focus was put on controlling beneficiaries that were recipients of EU funds for the execution of projects bearing a high risk. Gradually the number of those randomly selected has increased so as to build up a representative sample; as a result, a proportionally larger number of randomly selected projects is ex-post audited (complementary to the risk based approach that has been followed since the first years of the Programme's execution); the results of this ex-post controls allow to draw conclusions regarding the residual error rate affecting the whole population following a multiannual approach. The results allow the Agency's management to make an informed decision whether a reservation needs to be made on the basis of the materiality criteria that were set.

Indicators to measure effectiveness as regards legality and regularity of grant management:

The key control indicators pertaining to the effective management of procedures relating to the award of Grants18 are as follows:

Stages of Internal Control Procedure 2013 201419

A. Programming Evaluation and Selection

HP: 100% (2 calls) HP: 100%

(2 calls)

% of calls successfully concluded (number of calls provided for in the annual work programme)

CP: 100% CP: 100%

HP: 10021% HP: 10022% % of Budget amount of the work programme awarded20

CP: 96.14% CP: 96.76%

Complaints23 submitted by applicants CP: 0 HP: 13

18 HP stands for Health Programme, CP stands for Consumer Programme; no grants are awarded under the BTSF Initiative

19 Data were provided for year 2013 not as a basis for comparison but as reference regarding the evolution of a given situation

20 The percentage is calculated on the basis of the credits available with the launch of the call against the amount finally awarded

21 As the proposals submitted were evaluated in November, no award decision had been signed by the end of the year; the percentage uses a reference the amount included in the evaluation report (amount recommended for funding)

22 Same as previous footnote 23 The term of complaint is used in broader terms; it is a formal expression of dissatisfaction of

interested parties/ applicants on the way the procedure is organised and conducted (e.g. via the launch of complaint/ request for review provided for in the Commission's code of good administrative behaviour, Regulation 58/2003, Ombudsman etc); nevertheless, the term complaint does not comprise simple requests for further information addressed to the Agency


HP: 164 HP: 130 Number of proposals received against expected/ in relation to the previous year

CP: 99 CP: 6324

B. Evaluation, Ranking and Selection of Proposals (Award)

HP: 0 HP: 5 Number of experts excluded as being in a conflict of Interest Situation

CP: N/A25 CP:N/A

Number of applicants that successfully challenged the results of the evaluation/ number of litigation procedures initiated

none none

Number of incompliances with applicable rules/guidelines that necessitated an exception to be register (ICS8)

none none

C. Contracting phase: transformation of the awarded proposals to grant agreements.

HP:100% HP:7926% % of the awarded grants that led to the signature of grant agreements

CP:100% CP:N/A27

D. Monitoring of execution of the grant agreements.

HP: 8,01% HP: 2,8% Budget amount of errors detected over authorised payments (% of cost rejected over those claimed)

CP: 4,24% CP: 5,9%

HP:7 HP: 1 Number of penalties28 imposed

CP: 0 CP: 0

E. ex post control implementation and follow up.

HP: 0,83% HP: 1,94% Residual error rate (if possible) as % of the payment appropriations executed during the year.

CP: 0,37% CP: 1,18%

24 Up to 2013 the ‘’exchange of officials’’ activity was co- financed via the signature of grant agreements; the new Consumer programme provided for special indemnities; thus the number of applications that gave raise to relevant exchanges (60) is not taken into account for the calculation of this number

25 No external experts assisted the evaluation of proposals under the Consumer programme 26 Only the Framework Partnership Agreements reached the stage of award at the end of 2014 and they

are used as basis for this calculation; 11 out of 14 were signed before the end of 2014; the three remaining are expected to be signed within the deadline provided for in the FR (3 months from notification to the beneficiary)

27 Due to the fact that publication of the call occurred later in the year 2014 (deadlines closed in October 2014), no proposal that was positively evaluated reached the stage of grant signature

28 The term 'penalties' refers to reduction of the EC contribution because the action was poorly, partially or not timely implemented


The results of the ex-post controls performed after the execution of a final payment of a given contract provide information on the quality (effectiveness) of the ex- ante controls as well as the basis for the assessment of the Agency’s financial exposure in terms of amount at risk for the activities concerned; its volume will determine if a reservation is needed considering the materiality criteria set out in Annex 4 of the present report.

Because of the multi-annual nature of the programmes managed by the Agency, errors can only be detected and corrections can only be made at a later stage of the project’s multiannual life cycle (e.g. finalisation of a three year project, audit performed during the fourth year and corrections made during the fifth year); thus the Agency’s ex-post control strategy follows a multiannual approach in the sense that results of controls performed in consecutive years are taken into account so as to calculate a cumulative residual error rate based on the parts of the budget audited/corrected and non audited/uncorrected as achieved gradually, over the years.

The ex-post controls strategy of the Agency combines risk-based and random sampling.

Risk-based audits are implemented annually with a view to maximising recovery of undue payments, gearing Agency’s resources towards efficiency and effectiveness of financial corrections. These audits target transactions and beneficiaries assessed as belonging to a high risk category of beneficiaries. High risk transactions are selected through analyses carried out each year, on the basis of several pre-defined qualitative and quantitative risk criteria with the involvement of Agency staff. Risk analyses conducted over the past years pointed to the conclusion that a maximum one transaction out of five is to be considered as high risk (i.e. 20% of the total transaction population).

Besides its risk-based sampling, the Agency started to develop a random sample of audited grants, with a view to ultimately obtaining a statistically representative sample of the entire transaction populations since 2011. Given the limited (financial and human) resources of the Agency, this representative sample of audits is being progressively and cumulatively built over several years.

Audit methodology and coverage

Each year and for each of the two programmes audited, risk-based projects are initially selected and are supplemented, in a second step, by a number of projects that is randomly selected. In 2014, 6 projects were randomly selected that raised the aggregated (since 2011) random sample of audits respectively; in specific at the end of 2014, the cumulated size of the random sample reached 22 audits for the Public Health Programme and 12 for the Consumers Programme.

The audit coverage was 6.43% for the Public Health Programme and 52.35% for the Consumers Programme.

Error rate estimation

Given that the random samples are not yet fully representative of the entire population of grants, the error rates (detected and residual) are conservatively estimated by taking


the weighted average of the error rates of the risk-based (20%) and of the random-based sample (80%).

The residual error rate at the end of 2014 is calculated as follows:


Key indicators (ex-post controls 2008-2014)

Public HealthProgramme Consumers Programme

1 Number of ex-post controls (2008- 2014) [(1)=(2)+(3)+(4)] 88 35

2 Finalised ex-post controls (2008-2014) 54 13

3 Number of ex-post controls finalized in 2014 17 12

4 Number of ex-post controls on-going in 2014 17 10

5 Total value of EC Contribution for grants ofwhich final payment was executed in 2014 (as from the start of the grant)

€31.284.037,08 €8.736.901,56

6 Amount controlled ex-post in 2014 (total value of risk based and randomly selected) €2.011.621,22 €4.574.015,92

7 Audit coverage [(7)=(6)/(5)*100] 6,43% 52,35%

8 % Accepted (and paid) costs ex-ante not audited [(8)=100%-(7)] 93,57% 47,65%

9 Ineligible costs – detected error amountin2014

10 Risk based (year 2014) €31.815,33 €10.830,78

11 Random based (moving average over the years) €78.061,57 €15.957,80

12 Final EC Contribution (Risk based - (year 2014) ) €793.872,18 €4.326.819,21

13 Final EC Contribution (Random based –cumulative value since 2011) €5.433.979,07 €1.134.301,62

14 Detected error rate 15 Risk based ( (year 2014) [(15)=(10)/(12)*100 4,01% 0,25%

16 Random based (moving average over theyears) [(16)=(11)/(13)*100] 1,44% 1,41%

17 Combined risk based and random based detected error rate [(17)=(15)*20%+(16)*80%]

1,95% 1,18%

18 Errors corrected and recoveries sent out19 Risk based (year 2014) €0,00 €0,00

20 Random based (cumulative since 20111) €31.063,72 €0,00

21 Errors to be corrected 22 Risk based €31.815,33 €10.830,7823 Random based €46.997,85 €15.957,80

24 Residual error rate [(24)=(25)*20%+(26)*80% 1,94% 1,18%

25 Risk based (year 2014) 4,01% 0,25%

26 Random based (moving average over the years) 1,42% 1,41%

27 Gross amount at risk (27)=(5)*17 €610.276,16 €102.705,3228 Net Amount at risk (28)=(27)-(19+20) €610.276,16 €102.705,32


29 Actual Financial exposure= percentage ofnet amount at risk over authorised payments of the year per ABB activity

1,95% 1,18%

Award and management of Public Procurement Procedures: Service contracts signed under the Public Health Programme, the Consumer Programme and the Better Training for Safer Food Initiative.

The Agency launches procurement procedures provided for in the annual Commission Decisions adopted in execution of the multiannual Health and Consumer programmes (2014-2020). These decisions serve as financing decisions that need to precede any commitment of expenditure regarding procurement29. The Agency is responsible for the drafting and publication of the tender documentation in accordance with the provisions of Title V of the EU financial regulation. The tasks performed include (indicatively): the detailed definition of the service requested (terms of reference), the definition of eligibility, selection and award criteria as well as the method of award of each procurement contract; the opening and evaluation of the tenders received; the information of the economic operators that submitted a tender on the evaluation results; the preparation and execution of the budgetary commitment files that precede the signature of the service contracts; the assessment of the deliverables and the execution of payments on the basis of the contractual provisions.

The totality of the procurement contracts awarded by the Agency is attributed on the basis of the best value for money award method. That is to say that both the quality and the financial characteristics of the tender are assessed (on the basis of preannounced relative weightings described as award criteria) in order to rank the offers submitted and, eventually, decide which corresponds best to the requested service.

The control activities performed by the Agency before and after the launch of each procurement procedure aim at ensuring that the rules and principles provided for in the EU financial regulation are complied with; in other words, the Agency is responsible for ensuring transparency, proportionality, equal treatment and non- discrimination of the economic operators participating in the tendering procedure; the compliance with the regulatory provisions remains an end in itself; it is a straightforward assumption that the organisation of a sound procedure prevents risks of litigation; the choice of the contractor offering the best value for money ensures that the Agency will obtain the requested services in conformity with the agreed terms (quality) and within the prescribed deadlines. The service contracts awarded by the Agency are executed by service providers (private or public) established in the EU.

All procurement procedures that are of a value equal or above EUR 130.000 are subject to control by the Agency’s Advisory Committee on Public procurement (ACPC). It has to be noted that all procurement procedures, including those that do not exceed the 130.000€ threshold, are verified by the legal department of the Agency prior to their

29 Art 84 of the Financial Regulation applicable to the EU Budget and art. 94 of its Rules of Application.


launch. In practice, procurement procedures that do not require the opinion of the ACPC as a result of their volume are rarely launched. As a result, the ACPC issues an opinion for all open procedures (representing more than 99% of the open procurement procedures) managed by the Agency on yearly basis. In any case the Authorising Officer may always request an opinion from the ACPC, if he/she considers that an additional assurance is needed before the award of a given service contract, irrespective from its value. On the basis of all the above, the Agency considers that the ACPC threshold of 130.000 € does not confine the coverage of ex- ante control provided by the latter.

The opinion of the ACPC reviews the procedure of evaluation of the offers submitted; it aims at ensuring that the latter was organised in conformity with the internal guidelines and that evaluators soundly implemented the selection and award criteria announced with the tender. During 2014, the Agency’s ACPC examined 23 procurement procedures and issued respective number of opinions.

The contract implementation stage encompasses controls ensuring that what has been agreed is actually delivered. The duration of service contracts may vary from a number of months to two years. Minding the nature of the services (mainly comprising studies supporting the policy making of the Agency's parent Directorate General) it is of outmost importance to ensure quality and timeliness of the agreed deliverables. Thus, the Agency is responsible to safeguard that the contractor(s) follow the agreed working methodology so as to ensure that deliverables satisfy the quality standards set with the contract.

Public procurement contracts entail payments due against invoices whose volume is set within the signed contract. Pre-financing for public procurement contracts remains exceptional and, whenever provided, represents a low percentage of the agreed price and is meant to cover high start-up costs necessary for the service delivery. Payments are executed after the receipt and approval of the contractual deliverables. 100% of payment transactions related to procurement are subject to both operational and financial verification. The acceptance of technical deliverables implies that the invoice becomes payable and that the payment is executed in full respect of the contractual terms.

Indicators to measure effectiveness as regards legality and regularity of procurement management:

Stages of Internal Control Procedure 201330 2014

A. Planning and definition of needs

HP:0 HP:1 out of/32 Number of procurement procedures that were cancelled during the year

CP:0 CP:0

30 Data were provided for year 2013 not as a basis for comparison but as reference regarding the evolution of a given situation


BTSF:0 BTSF:0

HP:0 HP:0

CP: 0 CP: 0

Number of contracts that were discontinued due to lack of use

BTSF: 0 BTSF: 0

B. Evaluation of the offers submitted and award

HP:1 HP: 0

CP: 1 CP: 1

Number of 'open' procurement procedures where only one or no offers received 31 32

BTSF: 9 BTSF: 1

HP: 0 HP: 0

CP: 0 CP: 0

Number of complaints or litigation cases filed following the communication of the evaluation's results.

BTSF: 0 BTSF: 0

HP: 0 HP: 0

CP: 0 CP: 0

Number of negative opinions issued by the Advisory Committee for Procurement Contracts

BTSF: 0 BTSF: 0

HP: 0 HP: 0

CP: 0 CP: 0

Number of incompliances with applicable rules/guidelines that necessitated an exception to be registered (ICS8)

BTSF: 0 BTSF: 0

C. Supervisory measures during contract implementation

HP: 100% HP: 96%

CP: 100% CP: 94,7%

% of service contracts executed as provided within the applicable contractual terms without the imposition of penalties/termination(contracts with penalties/termination vs. open contracts)

BTSF:100% BTSF:100%

Number of incompliances with applicable rules/contractual HP: 0 HP: 0

31 The numbers for 2013 do not include information concerning those procurement procedures that were launched in the end of 2013 for which no opening took place until now.

32 Concerning the BTSF calls for procedures, in 2013 the results of the BTSF market study analysed the reasons for which low number of offers are received in relation to this highly specialised procurement procedure; the results of this study mainly identify the specific characteristics of the market and nature of the services requested as the main reason for that.


CP: 0 CP: 0 provisions that necessitated an exception/ non compliance event to be registered (ICS 8)

BTSF: 0 BTSF: 0

HP: 0 HP: 0

CP: 0 CP: 0

Number/amount of liquidated damages

BTSF: 0 BTSF: 0

HP: 0 HP: 0

CP: 0 CP: 0

Amounts associated with errors detected related to fraud, irregularities, errors) in % over the total checked

BTSF: 0 BTSF: 0

In conclusion, the analysis of the above available control results, the assessment their relative impact on legality regularity has not unveiled any significant weakness which could have a material impact as regards the legality and regularity of the financial operations, sound financial management of the appropriations entrusted to the Agency as well as fraud occurrence. Thus, the Agency considers it possible to conclude with reasonable assurance that the control objective regarding legality and regularity of its operation is complied with.

Control efficiency and cost-effectiveness.

The principle of efficiency concerns the best relationship between resources employed and results achieved. The principle of economy requires that the resources used by the institution in the pursuit of its activities shall be made available in due time, in appropriate quantity and quality and at the best price. This section outlines the indicators used to monitor the efficiency of the control systems, including an overall assessment of the costs and benefits of controls.

Benefits pertaining to the different stages of grant management:

The following indicators monitor the relative cost/time efficiency of the Agency's activity in relation to Grant Management:

Efficiency Indicators Result

Financial Impact of the adjustment phase33 (evaluation and adjustment phase)

the number N/A at the time of the drafting of the report since adaptation phase was on-going

HP: 3.623 Average cost for preparation and publication of the call per awarded grant

CP: 1.271€

33 Refer to par. 5 art 204 of the Rules of Application of the EU Financial Regulation


HP: 4.589 € Average cost for evaluation procedure per awarded grant

CP: 1.609 €

HP: 1,22% % of the cost of the above described procedures over the annual amount disbursed in Grants

CP: 1,20%

Time to inform applicants34 100% of applicants were informed in less than 3 months from the submission of their applications

HP: 100% of grants committed in 2014 were within the FR deadlines;

% of grant agreements committed and signed within the deadline provided by the Financial Regulation

CP: no data available for 2014 since all calls was closed only in October 2014

Average time to pay (% of payments within the legal deadlines)

≥96,5% of the payments executed within the legal deadline

Average number of running projects per staff (number of ongoing projects/total number of staff

10,6 grants/staff member (239:22.5FTE)

% of costs of ex-post controls over the amount disbursed for the grants over the year

0,48% (182.400€/ 37.971.232,67)

Success ratio of recovery orders launched following results of ex-post controls

100%

Number of ex-post audit results whose implementation is pending

0

Benefits from controls Prevented35 (or dissuasive) Detected36 Corrected37

A. Programming Evaluation and Selection of Proposals (Award) 162.492€

B. Contracting and Monitoring phase of grant agreements (up to final payment).

3.622.730,67

34 According to par. 2 of art. 128 of the Financial Regulation applicants shall be informed of the outcome of the evaluation within a maximum of six months from the final date of submission of complete proposals

35 Benefits under 'prevented' take into account benefits deriving from the controlling activities up to the moment of the grant agreement signature;

36 Benefits under 'detected' encompass benefits deriving from the controlling activities up to the final payment execution;

37 Benefits under 'corrected' refer to amounts that were recovered following the results of ex-post controls;


C. ex post control implementation and follow up. 31.063,72€

Value of benefits (€) 3.622.730,67 31.063,72€

Total benefits €: 3.816.286,39€

It has to be noted that the benefits go beyond those expressed in monetary terms (quantifiable) and they are broader than the purely financial ones. The controls performed during the preparatory phase allow for the next stages of the procedure (evaluation, award, grant adaptation and signature of the agreement) to occur; in specific, the quality of the call documentation (eligibility, selection, award criteria), the completeness of the information that is requested through the application forms (information on the operational and financial status of the applicants) will facilitate a transparent evaluation, ensuring equal treatment of the applicants; the applicants will be properly guided to define all the important parameters of the action for which co- financing is requested and, in their turn, evaluators will consider accurate and complete information so as to reach a sound evaluation conclusion. A sound evaluation will ensure that proposals best contributing to the attainment of the objectives of the Health and Consumer Programmes will benefit from EU co- financing. Additionally, the model grant agreements to be used at the end of the adaptation procedure must include the provisions safeguarding the EU financial interests. Their drafting is also part of the same preparatory stage.

The benefits deriving from this control stage may not be quantified but are of self-proved undeniable importance; unless these controlling activities were put in place, it would be highly unlikely that the Agency awards the grants to the most valuable proposals and ensure legality and regularity of the underlying transactions.

ii) Costs pertaining to the four stages of grant management38:

Costs of controls Officials and Temporary Agents Contracts Agents

Other (external) Inputs

Total costs

A. Programming Evaluation and Selection of proposals up to the award

108.900€(0.825FTE

*132.000) +108.900€(0.825FTE

*132.000)

175.000€ (2,5 FTE*70.000)

+175.000€ (2,5 FTE*70.000)

133. 839,67€

B. Contracting and Monitoring phase of grant agreements up to final payment

74.000€ (0.56* 132.000)+ 369.600€(2,8*132.000)

118.300€ ( 1.69*70.000)+ 591.500€(8,45*70.000)

38 The Agency adopts the ‘full cost approach’ proposed with note Ares(2014)3051191; thus, direct, indirect and overhead costs are taken into account for the relevant calculations.


execution

C. ex post control and follow up.

26400€ (0.2* 132.000€)

56.000€ (80%FTE CA) 100.000€

Total Costs 687.800€ 1.115.800€ 233.839,67 2.037.440

Overall indicator: Total cost of control of grant management process/total expenditure grant management for the year

2.037.440/ 37 971 232,67=5,3%

Conclusion on control efficiency and cost effectiveness as regards grant management:

The Agency quantified the costs of the resources and inputs required for carrying out the controls described in annex 5 and estimates, as far as possible, their benefits in terms of the amount of errors and irregularities prevented, detected and corrected by these controls. To reach a conclusion as of the relative efficiency of the controls, it is necessary to analyse the evolution of these efficiency indicators over time. With regards to efficiency, it will be possible to draw solid conclusions following their evolution over time.

As succinctly mentioned above, there are a number of non-quantifiable benefits resulting from the controls operated during the initial control stages of grant management including this of the programming phase aimed to ensure that the co-financed projects will optimally contribute to the achievement of the policy objectives as well as the deterrent effect of the ex- ante and ex post controls. The Agency considers that the necessity of these controls is undeniable as the totality of the appropriations would be at risk in case they would not be in place.

Thus, it may be concluded that the controls carried out by the Agency regarding grant management during the reporting year were cost effective, as the estimated quantifiable benefits exceed the cost at a ratio of 1:1,87

Benefits pertaining to the different stages of procurement management :

The following indicators monitor the efficiency and cost effectiveness of the Agency's activities in relation to Procurement Management:

Efficiency indicators Result

HP: 3.523€ Average cost for preparation and Publication of the call per awarded procurement contract

CP/BTSF: 3.511 €

Average cost for evaluation procedure per awarded HP: 4.463 €


procurement contract CP/BTSF: 4.447 €

HP: 3,87% % of the cost of the procedure over the annual amount disbursed under Procurement

CP/BTSF: 2,03%

HP:100% % of service contracts committed and signed within the deadline provided by the Financial Regulation

CP/BTSF:100%

Average time to pay (% of payments within the legal deadlines)

96,5% of the payments executed within the legal deadline

Average number of running service contract per staff (number of open service contracts/ number of staff managing them)

4,3 (97:22.5)

Assessment of the costs and benefits regarding procurement management.

i) Benefits pertaining to the three stages of procurement management:

Benefits from controls Prevented (or dissuasive)

Detected Corrected


28.267.543 €39


Non quantifiable

C. Supervisory measures during contract implementation.

Non quantifiable

Value of benefits (€) 28.267.543€

Total benefits €: 28.267.543€

ii) Costs pertaining to the three stages of procurement management:

Costs of controls Officials and Temporary Agents

Contracts Agents Other (external) Inputs

Total costs

39 This amount equals to the commitment appropriations for 2014 regarding procurement. This amount is considered as a benefit (though not quantifiable) deriving from the performed controls.



110.880€(0,84FTE*132.000)

177.450(2.5FTE*70.000)

N/A


185.625€(1,4FTE*132.000)

297.500€(4,25FTE*70.000)

N/A

C. Supervisory measures during contract implementation.

372.240€(2,82FTE*132.000)

590.100€(8.43*70.000)

N/A

Total Costs 668.745€ 1.065.050 €1.733.795

Overall Indicator (total costs of controls of process/total expenditure executed during the year (payments made)

1.733.795/23 301 256,51=7,4%

Conclusion on control efficiency and cost effectiveness as regards procurement management- Overall assessment of the costs and benefits of controls:

The Agency quantified the costs of the resources and inputs needed in order to carry out the controls described in Annex 5 of the present report; as not all benefits can be expressed in monetary terms, the benefits deriving from those controlling processes in terms of the amount of errors and irregularities prevented, detected and corrected were estimated.

As mentioned under point B above, payments related to service contract execution are made against invoices on the basis of a predetermined price; the concept of cost eligibility is not relevant for procurement procedures; thus, unless the provision of the agreed service is unsatisfactory (entailing the imposition of contractual penalties from the part of the Agency) it is unlikely that controls will result in quantifiable benefits. It becomes self-evident that the controls performed before the launch of each call for tender are intended to guarantee that the principles applicable to EU public procurement are complied with (namely: transparency, proportionality, equal treatment and non-discrimination); by ensuring that those principles are complied with, the Agency ensures the efficient spending of the available appropriations, in line with the objectives set in the Commission Work Programmes; as a result, it eliminates the risk of litigation that is a per se problematic situation that also bears reputational risks. Additionally, the controls allowing for a proper definition of the requested service ensure that the available appropriations are awarded to economic operators offering the best value for money. The Agency considers that the necessity of these controls is undeniable: in a different situation, the totality of the appropriations would be at risk either because the 'best value for money' would not be guaranteed or because the risk of litigation (before or after the award of a service contract) would rise. Thus benefits deriving from those controls are estimated to almost 100% of the budget available for commitment.


Overall assessment of the costs and benefits of controls:

The Agency quantified the costs of the resources and inputs required for carrying out the controls described in annex 5 and estimates, as far as possible, their benefits in terms of the amount of errors and irregularities prevented, detected and corrected by these controls.

Overall, during the reporting year the controls carried out by the Agency for the management of the budget appropriations were cost effective as the estimated quantifiable benefits exceeded the cost in a proportion of 1:16,30

Fraud prevention and detection

The Agency is accountable for the sound implementation of both is operational and administrative budgets in the context of an effective and efficient internal control system. The Agency’s internal control system is designed to provide reasonable assurance on the prevention, detection, correction and follow up of fraud and irregularities. The system’s anti- fraud components seek to prevent situations of conflict of interest, presuppose procedures to monitor relevant control results and the proper follow up of any fraud related suspicion. As a principle, the controls with an anti-fraud deterrent are embedded in the general internal control framework that has been designed and implemented by the Agency over the years.

The Agency has developed its anti-fraud strategy as foreseen in the Commission’s overall anti-fraud strategy40 in 2013; the latter is accompanied by an action plan including actions and indicators providing assurance that the fraud risks are properly mitigated.

The Anti- Fraud strategy is valid for 2 years; the majority of the actions provided therein (for 2014) were implemented. The most important being:

Objective Action (status) Indicator

Enhance the general anti-fraud culture of the Agency’s staff

Agency staff to follow training on fraud prevention

100% staff dealing with budget implementation tasks (75% of the Agency staff)

Draft policy applicable at Agency level for the management of internal conflict of interest

Policy in place Cases of conflict of interest detected in implementation of the policy; no such cases detected in 2014

Preparation of a list with ‘red flags’ available to the Agency staff

List available Level of familiarisation of the Agency’s staff with its content

Creation of inventory including the main findings resulting from ex post controls

List available List available and regularly updated

40 COM(2011) 376 24.06.2011.


As stated above, the controls aimed at preventing and detecting fraud are not different from those intended to ensure the legality and regularity of the transactions regularly controlled (the unintentional errors). Still, the Agency screens the population of beneficiaries and projects in order to identify those at a higher risk of fraud and subjects them to in depth controls (implementation of ex-post audits).


2.2 Assessment of audit results and follow-up of audit recommendations This section reports and assesses the observations and conclusions reported by auditors 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 Agency is audited by both internal and external independent auditors: its internal audit capability (IAC), the Commission internal audit service (IAS) and the European Court of Auditors (ECA).

During the period of reference, the IAS completed one follow up audit audits on IT governance and performance in DG SANCO and EAHC. The follow up audit concluded that the agreed actions were adequately and effectively implemented. As a result, no actions in relation to the audits performed by IAS are pending.

During 2014, the European Court of Auditors concluded its annual audit on the Agency's reliability of accounts and legality and regularity of the underlying transactions (financial year 2013). In the Court’s opinion, the Agency’s annual accounts present fairly, in all material aspects, its financial position as at December 2013; moreover the Court issued the opinion that the transactions underlying the annual accounts are legal and regular in all material aspects. The comments included in the same report of the Court of Auditors raised no significant issue. Finally, the ECA observations did not include previously undisclosed issues related to transactions, control systems or the management representations in the AAR.

Furthermore, the IAC carried out one audit assignment, in accordance with its multiannual audit planning, which covers the Agency’s management processes, on a risk basis, over a period of three years. The audit had under its scope the document management processes and procedures in the Agency. None of the findings included in the audit report raised issues that are considered critical for the assurance provided in relation to the audited areas. Consequently, the IAC expressed the opinion that the internal control system in place provides reasonable assurance regarding the achievement of the business objectives set up for the processes audited. That is to say that the audited aspects of the internal control system that have been put in place operate effectively and mitigate the risks that are inherent to the concerned operations.

Management has accepted all the IAC recommendations. An action plan has been prepared by the agency in response to the first audit whereas one is expected in response to the second one. The various management measures included in these action plans have been or are being implemented as foreseen.

As a result of the assessment of the risks underlying the auditors' observations together with the management measures taken in response the management of the Agency believes that the recommendations issued do not raise any assurance implications and are being implemented as part of the on-going continuous efforts in terms of further improvements. Still, inter alia taking into account some of the audit results, ICS 8 has been selected as priority ICS for further improvement of its effectiveness (see below).


3. ASSESSMENT OF THE EFFECTIVENESS OF THE INTERNAL CONTROL SYSTEMS

The Agency has adopted a set of internal control standards, based on international good practice, aimed to ensure the achievement of policy and operational objectives. In addition, as regards financial management, compliance with these standards is a compulsory requirement.

The agency 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 Agency has assessed the effectiveness of its key internal control systems continuously during the year; a standard item on Internal Control is introduced in the agenda of the Agency's management within its bi monthly meeting agenda. The Internal Control Coordinator participates in those management meetings and the Heads of Units are bringing forward any instance of important control failure that falls within their area of competence; in 2015, the Agency put in place a procedure for the reporting of internal control weaknesses of critical or less critical significance; all staff members became more aware of their role and individual responsibility for maintaining an optimally effective internal control system that contributes to ensure that the Agency’s strategic and operational objectives will be attained. The Agency’s management made an overall assessment regarding the effectiveness and efficiency of the operation of the Agency’s internal Control System. This assessment was built around the system’s six building blocks: Mission and Values, Human Resources, Planning and Risk Management, Information and Financial Reporting, Operations and Control Activities and Evaluation and Audit. In overall the results of the assessment pointed to the following conclusions:

No instances of inadequate/ ineffective controls exposed the Agency to key risks; knowledge and skills were available throughout the year for the sound execution of all significant operational areas; the Agency has in place a sound internal control system ensuring that key risks are mitigated; thus, none of the operational areas covered by the six building blocks necessitate a major improvement.

Since no instances of inadequate or ineffective controls occurred, the respective improvements required are of rather minor nature;

Even if the effective implementation of each internal control standard adds value to its overall operation a number of them is of critical importance for the effective and efficient discharge of its tasks; processes and procedures is one of them; as a result the Agency, needs to keep allocating resources to the improvement of its operating system minding the changes that naturally occur but also the need for simplification.

In specific, the management assessed the results of individual control results; the latter provide the basis for assessing the effectiveness and efficiency of various aspects of its internal control system by reviewing the following sources of information:

• An analysis of the types, nature and impact of the operations/ transactions that


were included in the register of exceptions; the latter did not reveal any structural weaknesses of the system; the rather small number of cases (in total: five cases) of ‘one off’ nature were reported/ ex- ante authorised.

• An analysis of the feedback provided through the report of the authorising officers by sub- Delegation pertaining to authorisations executed in relation to the budget lines for which they hold responsibility (ICS 7); none of the Authorising Officers by sub delegation reported material deficiencies related to the controls performed before the authorisation of payments. No situations that could create reputational risks were identified.

• An analysis of the annual opinion of the IAC of the Agency regarding the state of internal control; an analysis of the results of the follow- up audits that were performed and closed during the year(ICS 8, 16);

• An analysis of the results of the risk assessment review performed with the participation of the Agency's Staff (bottom up review), its action plan as well as the level of implementation of the action plan supporting the Agency’s Anti- Fraud Strategy (ICS 6); As mentioned in Layer2 of the present report, the Executive Agency implements the programmes' appropriations through the direct management mode provided for in article 58 of the EU Financial Regulation. As far as its main operations are concerned (grant management and procurement management) the Agency has to deal with the types or risks that are presented in Annex 5 of the present document. In 2013, went through a thorough risk assessment exercise enabling the Agency to ‘redefine’ its risk environment with due account of the upcoming changes plausible to affect its operation. The results of this risk assessment were reviewed and validated by the Agency's management in 2014 and an updated action plan was prepared with a view to eliminate or reduce the risks within a tolerable level. The level of execution of those actions adds a positive assurance element with regards to the effectiveness of risk management in the Agency.

• Results of assessments of horizontal services pertaining to document management (ICS 11);

• Reports of the Advisory Committee of Procurement and Contracts that reviews the soundness, legality and regularity of all procurement procedures launched by the Agency with a value higher than 130.000 (ICS 8);the committee did not issue any negative opinion as a result of material mistakes affecting the 23 procurement procedures that were reviewed;

• Reviews of reports issued by the European Data Protection Supervisor (EDPS) on the state of personal data protection in the EU Institutions and agencies (ICS 8) as well as its opinion on requests for prior checks41 submitted by the Agency. The Agency took into account the EDPS comments in the areas of public procurement and the conduct of

41 Accrding to article 27 of Regulation 45/2001 on the protection of individuals with regards to the processing of personal data by the Community Institutions, processing operations likely to present specific risks to the rights and freedoms of data subjects by virtue of their nature, their scope or their purposes shall be subject to prior checking by the European Data Protection Supervisor.


administrative inquiries and disciplinary procedures as well as the set-up of an inter- executive agency disciplinary board.

• Actions implemented by the Agency within the year providing assurance on the level of staff awareness regarding the Agency's ethical and organisational values (ICS 2). All newly recruited staff have followed training on ethics and integrity; the Agency set up a policy with regards to the management of cases of internal (relevant to its staff) conflict of interest.

Prioritised ICS

In 2014, the Agency has prioritised the following Internal Control Standards: ICS 8 on the processes and procedures used for the implementation and control of its activities and ICS 12 on Information and Communication.

In response to the former, the Agency put in place a procedure for the reporting of the internal control weaknesses provided for in the baseline requirements of the relevant internal control standard. The roles of the different actors of the control chain was presented in the context of the Agency’s operating environment; the procedure clarified the individual responsibility to inform the management on effectiveness and efficiency deficiencies or legality issues that can be spotted at the time of execution of their ‘business as usual’ tasks; on the other hand, it underscored the possibility of the staff members to make proposals for the ICS system improvement. Naturally, the guidance made the necessary distinctions between the ‘control weaknesses’ reporting and other distinct case possible but far more serious control deficiencies such as the suspicion of fraudulent behaviour or irregularities. Being a spending body, it is implied that the inherent risk of the core Agency’s activities are associated with the internal control objective of sound financial management; the efficiency aspect of the agency’s operation has been reinforced since 2014 was the year of introduction of the e- grant management system for all programmes managed by the Agency. The transition from the ‘traditional’ (paper based) to the new (electronic) management system required a proportionally high investment of resources; eventually, it is expected to result in important efficiency gains that will rise with time.

Year 2014 was characterized by a significant effort to promote information on the 3rd Health Programme and disseminate results of projects that received co- financing under past calls. The agency participated in 18 national information days co-organized with the national Focal Points (NFPs) on the new Health Programme and the implementation of the 2014 work plan. Dissemination events and workshops were held on issues such as health inequalities, health security, integrated care and rare diseases. Information material was produced on 12 thematic areas which were translated in all EU languages. Finally, two cluster meetings one on HIV/AIDS and another on patient safety and quality of care were held in Athens and Rome respectively where relevant EU activity was presented to the European press.

In conclusion, the internal control standards are effectively implemented, in other words that the controls that are in place are working as intended and manage the risks effectively. The identification of control weaknesses and the reflection on measures to improve the organisation's performance is a continuous management preoccupation. As a conclusion, no ineffective controls came to management's attention that would have exposed it to serious risks.


4. MANAGEMENT ASSURANCE This section reviews the assessment of the elements reported in Parts 2 and 3 and draw conclusions supporting of the declaration of assurance and namely, whether it should be qualified with reservations.

4.1 Review of the elements supporting assurance The information reported in Parts 2 and 3 stems from the results of management and auditor monitoring contained in the reports and other information sources listed. 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 the Agency.

Regarding the effectiveness of the Internal Control system of the Agency the management has reasonable assurance that the latter works as intended and that any control failures are spotted and corrected in due time before they evolve in structural deficiencies. No weaknesses with significant impact came to the management's attention that may have an impact on the declaration of assurance. The results of the ex- ante (covering 100% of the operational and administrative appropriations) and ex post controls performed point to the conclusion that errors did not exceed the materiality criteria set by the management. The IAC opinion on the state of control was positive whereas the IAS closed the all its open recommendations after the conduct of one follow up audit (provided for in its annual audit programme). The Agency implemented the actions supporting its first Anti- Fraud Strategy.

4.2 Overall conclusion on assurance and reservations (if applicable) Applying the residual error rate for the respective ABB Activities we derive to the following conclusion with regards to weighted average error rate for the annual expenditure and the resulting amount at risk:

Grant payments 2014

Procurement payments 2014

Amount at risk (absolute value)

Amount at risk (% upon annual payments)

Detected error rate:1,95%

Error rate:0,00% ABB Health

29.446.134 3.621.715

574.200 (574.200/

33.067.849)

1,73%

Detected error rate:1,18%

Error rate: 0,00% ABB Consumer

8.525.099€ 5.013.592

100.596 (100.596/

13.538.628)


0,74%

14.665.949 ABB BTSF 0,00

Error rate: 0,00%

0€ 0,00%

6,620.000 € Chafea Administrative Budget (7,24M)

0,00

Error rate: 0,00%

0€ 0,00%

Total: 674.796€

The AOD estimates that the error rate related to procurement payment is close to 0% as the payments were executed on the basis of predefined prices agreed within the service contracts and upon acceptance of the agreed deliverables; there were no contract terminations during the year that could trigger a recovery procedure in relation to a proportion of the price that was (already) paid to the contractor; additionally, no important instances of poor contract implementation occurred that would require considerable reduction of the agreed price. Thus, the overall sound implementation of the service contracts for which payments were executed during the year, provides with reasonable assurance that the error rate that is likely to affect the activity area of procurement is, if not equal, close to 0%.

The same are valid for the payments made out of the Agency’s administrative budget; they cover legal obligations for services required in support of the programmes delegated to the Agency (translations, ex-post control services etc) but also the Agency’s staff expenditure and infrastructure costs. given the fact that the Agency’s operating expenditure is audited by the European Court of Auditors on annual basis without resulting in any material findings, the Agency considers the risk of error equally low (around 0.1%). payments are made upon predefined cost per type/volume of service.

Chafea weighted average error rate

The weighted average error rate calculated as follows: annual amount at risk/ overall amount of payments

674.796€ (amount at risk) /67.892.489 (amount of payments 2014) = 0,99% The results above demonstrate that the risk relating to the legality and regularity of the expenditure authorised during the reporting year (2014) represents less than 2% of the payment appropriations;

The Agency’s internal control strategy foresees the implementation of further controls


during subsequent years aimed to detect and correct these errors. It is not possible to identify the specific errors and amounts which will be effectively corrected in the coming years, yet the implementation of these corrective controls since 2009 have resulted on average in recoveries and financial corrections representing 2,3 % of the average payments over the same period. Applied to the 2014 payments made, this implies a potential amount of EUR 1.574.867€42 as the best available indication of the corrective capacity of the ex-post controls systems implemented by the Agency.

The application of the corrective capacity indicator over the annual payments demonstrates that the agency has an average capacity that amounts to: 1.574.867 € which is higher than the gross amount at risk of 674.796€.

Taking into account the conclusions of the review of the elements supporting assurance and the expected corrective capacity of the controls to be implemented in subsequent years, it is possible to conclude that the internal control system put in place by Chafea provides sufficient assurance that risks related to the legality and regularity of the underlying transactions are adequately managed. Furthermore, it is also possible to conclude that the internal control systems provide sufficient assurance with regards to the achievement of the other internal control objectives.

42 Of which 1.409.267 € relates to the operational budget.


DECLARATION OF ASSURANCE

I, the undersigned,

Director of the Consumers, Health, Agriculture and Food Executive Agency

In my capacity as "authorising officer for the operating (administrative) budget and authorising officer by delegation for the operational budget"

Declare that the information contained in this report gives a true and fair view43.

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 work of the internal audit capability, the observations of the Internal Audit Service and the lessons learnt from the reports of the Court of Auditors for years prior to the year of this declaration.

Confirm that I am not aware of anything not reported here which could harm the interests of the Consumers, Health, Agriculture and Food Executive Agency or those of the Commission".

Luxembourg 27.3.2015 (signed electronically)

Luc Briol

43 True and fair in this context means a reliable, complete and correct view on the state of affairs in the Executive Agency.


ANNEXES


ANNEX 1: Statement of the Head of Administration of chafea44 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 Commission45, I have reported my advice and recommendations to the Director of the Executive Agency on the overall state of internal control in the Executive Agency.

I hereby certify that the information provided in Parts 2 and 3 of the present AAR and in its annexes is, to the best of my knowledge, accurate and exhaustive.”

Date 30.3.2015

(signed electronically)

Robert Geeraerts

44 The role of the Internal Control Coordinator of Chafea is performed by its Head of Administration. 45 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


ANNEX 2: Human and Financial resources

Code ABB Activity ABB Activity Human Resources by ABB activity External Personnel Total

Establishment Plan posts Contract Agents

Establishment Plan posts Temporary Agents

Public Health 23,77 6,9 8,8 39,47

Consumer Protection 8,67 2,5 3,2 14,37

Better training for Safer Food Initiative

5,55 1,6 2 9,15

Total 38 11 14 63


Second table:

ABB Activity

Operational expenditure Administrative expenditure

Total

commitments payments commitments payments commitments Payments

(mio €) (mio €) (mio €) (mio €) (mio €) (mio €)

HP 45,15 32,95 4,14 4,14 49,29 37,09

CP 16,56 13,53 1,66 1,66 18,22 15,19

BTSF 15,39 14,67 1,12 1,12 16,51 15,79


ANNEX 3: Draft annual accounts and financial reports

(Annex 3 attached as a separate PDF report)


ANNEX 4: Materiality criteria

Quantitative criteria upon which Chafea assesses the overall impact of a weakness for defining significant weaknesses:

a) significant and/or repetitive occurrence of errors

The weakness points to significant and repetitive errors affecting the legality and regularity of the executed operations; the errors in the underlying transactions may be detected at any stage of the control/supervision procedures. In such cases, the Agency will consider both the qualitative and quantitative aspects of the detected error (s); in relation to the quality aspect, the nature, scope duration but also any existing mitigating corrective actions will be taken into account; in relation to the quantity aspect, the Agency will seek to estimate the financial impact of the detected error (exposure or amount at risk).

b) the potential total financial impact (residual error rate) (value of errors in the transactions) exceeds 2% of the total budget paid per ABB activity during the reporting period.

The potential total financial impact is calculated by applying the average rate of adjustments to the advantage of the Agency resulting from all audits finalised for the programme so far to the amount of un-audited payments for the programme in the year of the annual declaration.

However, the defined materiality thresholds will only be applied if the number of grants audited is sufficiently representative for the overall amount of grants managed by the Agency. This is to say, that the sample of audited contracts should cover at least 5% of the total number of open contracts at the end of the preceding year to the annual declaration.

Qualitative criteria upon which the Agency assesses the overall impact of a weakness:

a) Significant internal control system weakness

The controls may detect (major) system weaknesses that indicate deficiencies at the stage of the design of the internal control system, affecting its effectiveness. This type of weakness may be detected at any stage of the procedure (assessment of the effectiveness of the Internal Control System (ICS-15), the management's risk assessment (ICS-6), following audits performed by the Internal Audit Capability of the Agency, ex-post audits, or audits performed by the Court of Auditors. These systemic weaknesses are assessed both on their qualitative and quantitative aspects. As far as the quality aspect is concerned, the nature, scope duration but also any existing mitigating corrective actions will be taken into account; the financial impact of the control system weaknesses will consider the portion of the budget managed by the Agency that is considered at risk.

b) Insufficient audit coverage and/or inadequate information from Internal Control Systems


This problematic situation is considered to occur in case the Agency is not in place to identify control weaknesses due to the fact that not enough controls/audits were performed (low level of control data). In addition, the Agency is not in position of compensatory evidence from other sources (Court of Auditors, Internal Audit Service).

c) Critical Issues reported by the European Court of Auditors, the Internal Audit Service, the Agency's Internal Audit Capability or OLAF.

The criticality is considered not only in relation to the qualification of the Auditors; findings (critical recommendations) but also in relation to the level of significance that other findings may have on the assurance; in that respect, recommendations that were classified as 'very important' are also taken into account, especially if the implementations of actions that mitigate the identified risks are overdue.

The existence of non-mitigated critical recommendations will justify a reservation only if: a) the underlying weakness falls into the area covered by the declaration of assurance of the Agency's Director, b) the Agency's Director accepts that the current Internal Control System does not address the identified weakness appropriately and c) considers that the materiality threshold (reputational, financial) is exceeded.

d) Assessment of reputational events

A significant reputational event that occurred during the year may lead to a reservation if the impact of the event has an impact on the elements constituting the declaration of assurance. This may be considered even for cases that the financial impact of the event is below the 'materiality thresholds'. It is clarified that only the reputational 'events' may be considered not the risks that, by definition, represent threats that have not been materialized. The impact of the reputational event is measured as the impact on the Agency's reputation that it characterized as a loss of confidence by its stakeholders. The Agency's stakeholders include the following: the Council, the Parliament, the Court of Auditors, its parent DG and the rest of Commission's services, the participants of the programs managed by it, its staff (actual and potential), media as well as the general public. Reputational events that may relate with the Agency's operation may refer to failure to prove regulatory compliance, insufficient management capacity, and inadequate control system, risk management, failure to meet the stakeholders' expectations, communication failures, and situations of alleged (internal) fraud.

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

Stage 1: Programming, evaluation and selection of proposals

A. Preparation, adoption and publication of the Annual Work Program and Calls for Proposals

Main control objectives: Ensure that the Agency selects proposals that contribute the most towards the achievement of the Programs' general and specific objectives; ensure that call for proposals procedure is organised and conducted in compliance with the applicable rules; ensure that control system does not allow fraud to occur.

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

a. The annual work programme (serving as financing decision) and the subsequent calls for proposals do not adequately reflect policy objectives, priorities; the eligibility selection and award criteria are not adequate/ poorly defined and may not ensure a proper evaluation. b. delays occur in adopting the Annual Work Programme serving as financing decision/annual work programme is published later than 31.3.of year N. c. late publication of the calls for proposals may result in

a. The annual work programme that serves as financing decision is adopted by the European Commission following an inter service consultation; the Agency, in line with its remit, provides technical input and helps the Commission to define on clear criteria that will contribute to the clarity of the call text and allow for the smooth evaluation of the proposals, in line with the provisions of the FR. b. the Agency liaises with the responsible Commission departments from the outset of the programme's preparation and is in a position

Coverage/Frequency: 100%- all calls for proposals launched by the Agency are checked for compliance with the financing decision and the applicable regulatory procedures. a. If risk materialises, grants that will be awarded will not contribute to the attainment of the Program's annual objectives; applicants may launch complaints to the European Ombudsman (reputational risk) or legal proceedings before the Court. d. all submitted applications

Costs: % of the FTE of staff involved in the procedure (full cost approach). Benefits: budgetary amount of the call (s) with significant errors detected and corrected.

Effectiveness: a. budget amount of the work programmes concerned; b. number of complaints received by applicants due to non-clarity of the call text; c. number of proposals received over number expected and/or in relation to the previous year (s). Efficiency: a. average cost per call and/or selected proposal; b.% of costs (FTEs) over annual amounts disbursed in grants; c. time to publication of selection results.




short deadlines for the submission of applications; this, in its turn, may not allow for proposals of a satisfactory level of quality to be submitted. As a result, the attainment of the program's objectives may not be optimal or even jeopardised. d. accumulation and duplication of grants is not prevented appropriately

to launch calls for proposals at the day of the adoption of the annual work programme (serving as financing decision). d. COMPASS/SYGMA (IT tools used by the Agency for proposal submission and grant management provide the Agency with information on the EU grants that the applicant benefits from; the latter is also explicitly requested to declare other applications submitted at the stage of the application procedure (last 3 years)

Stage 2: Evaluation, Ranking and selection (award of proposals)

Main control objectives: Ensure that the most promising projects for meeting the policy objectives are among the proposals selected (effectiveness); the evaluation and award procedure conform with the applicable rules (legality and regularity); the control system in place does not allow for fraud to occur (especially conflict of interest).



a. The evaluation, ranking and selection of proposals are not

a. The evaluation is conducted on the basis of detailed rules

100% of the proposals submitted are evaluated on

Costs: cost of staff involved in the evaluation and selection of

Effectiveness: a. % of proposals that successfully




carried out in accordance with the established procedures, the policy objective and/ or the announced eligibility, selection and award criteria. Unauthorised persons gain access to the electronic exchange system for grant evaluation and management; confidentiality, integrity and personal data protection of the information included in the system is not adequately protected. b. Members of the opening and/or evaluation committee do not have the technical expertise to properly assess the submitted applications and/or are in situations of conflict of interest. c. External experts that participate in the technical assessment of the proposals (but not as members of the evaluation committee) are in situations of conflict of interest (selection process biased)46. d. The preannounced selection and award criteria are not

that are stipulated in the guide for applicants (publicly available via the applicants’ Horizon 2020 portal); the evaluators appointed by the AOD, apart from their technical experience, are appointed on the basis of knowledge regarding rules applicable to grants. The Agency used the same grant management system as for Horizon 2020 programmes; the latter is designed to authorise access only to applicants (receiving/using authentication data) and authorised EU staff via the corporate (ECAS) Commission authentication system; integrity of the documents is preserved since audit trail exists for each change whose effectuation is allowed by the system (person/time). b. the members of the evaluation committee are officials of the DG whose programme is managed by the Agency (DG SANCO) and DGs with objectives that relate to

the basis of the eligibility, selection and award criteria; 100% of the proposals are examined by experts to review their technical merit; 100% of the EU staff, external experts that are involved in the evaluation sign declaration of non- conflict of interest; random checks are performed (on the basis of risk analysis) to verify the accurateness of the declarations.

proposals; cost of appointment of experts. Benefits: amount redirected to better projects (deserving projects otherwise non selected+ non deserving that could have been selected).

challenged the evaluation results/ award decision; b. number of experts excluded as being in a conflict of interest situation; c. number of litigation procedure (s) initiated; d. number of Supervisory control failures (led to exception report); Efficiency Indicators: a. Average cost per awarded proposal giving rise to a grant; % of cost of the procedure over annual amount disbursed in grants; b. Time to inform applicants on evaluation/award results;

46 Outside experts assist the evaluation committee by decision of the Authorising Officer in relation to the Public Health Programme (RAP art. 204).




adequately and consistently applied for the evaluation of proposals. e. Unauthorised persons may have access to systems and confidential documents (content of the proposals). f. Eligible and effective projects are not selected; g. The applicants do not have sufficient sources of funding to maintain their activity throughout the period during which the action is carried out; h. The applicants do not have the professional competences and qualifications required to complete the proposed action or work programme. i. The action is not clearly defined in the grant application j. The grant application does not contain all information and supporting documents required for the evaluation. k. A grant is awarded for an action that has been already started without the beneficiary demonstrating a special need for this or a grant has been awarded retroactively for an action already completed.

those of DG SANCO (e.g. DG RTD). Naturally, these officials are at the best position to understand if the actions included in the proposals received by the Agency are plausible to meet the policy objectives concerned. All members of the evaluation committee sign a declaration of non- conflict of interest. c. The Agency selects its experts from an AMI list; the experts CVs are checked for any professional/personal instances that might be considered conflictual; the experts are requested to sign a declaration of non-conflict of interest before their appointment; both the names of the selected experts and those of their employers' are checked against the applicants that submitted a proposal in response of the Agency's call for proposals; in case it is found that an expert was employed by an applicant, this expert was excluded from the assessment of all proposals submitted in response to the specific call topic (this is relevant for the calls for projects that are divided in seven different thematic categories (topics))




d. The technical content of each proposal is evaluated by three external experts; their assessment is reflected in a consensus report that 'merges' their technical assessment. The consensus report is constructed on the basis of the announced award criteria- the evaluation committee applies the same criteria for the overall assessment of all the submitted proposals. e. all proposals are both received and managed electronically within the SEP,SYGMA platforms; access (internally) is granted to authorised staff members via the Corporate Commission authentication system. External people (applicants) are granted access via authentication logs provided by the system.; only staff responsible with the administrative management of the proposals, the experts (for the proposals attributed to them) and the evaluators have access to the proposal and the supporting documentation f. the eligibility of the applicants is a straightforward criterion to be verified; the effectiveness of the proposals highly depends on the proper




specification on the action as well as organisation and planning issues; the application form that needs to be filled in by the applicants requests the applicant to elaborate how those issues will be confronted. Adjustment may be requested by the AO on the basis of art. 204 of the RAP. g. each applicant is assessed for financial viability according to specified parameters so as to ensure that applicants will be operational during the period of the action implementation (assessment is made by Research Executive Agency but the decision regarding the viability lays with the Agency’s AO). h. selection criteria assess professional competence of the applicant organisation/ individuals that will deal with the action on the basis of supporting documents; random checks are made regarding the accuracy of the information provided in the proposals. i. the basic elements of the action as well as deliverables are part of the elements of the application form that need to be filled in; the adaptation phase ensures that all




information pertinent for the implementation of the actions is included in the description. j. In line with the principle of proportionality the AO may request the applicants to clarify supporting documents (art 204 RAP) or request for missing documents with due observance of the principle of equal treatment. If documents that are indispensable for the assessment of the applications are missing the system does not allow the submission of the proposal; the same goes in case necessary documents requested from the successful applicants (adjustment phase). The system alerts the manager of a project in case of missing documents and sends automatically generated alerts. k. retroactivity of grants is not, in principle, allowed. In exceptional cases the AO may decide to do so and this will be stipulated in the grant agreement; the absolute necessity of this deviation is assessed before the AO authorises the retroactivity. The evaluation committee performs checks regarding the 'deliverables' announced with the application form;


Stage 3: Contracting phase: transformation of the awarded proposals to grant agreements

Main control objectives: ensure that grants are signed within the deadlines so that selected actions are promptly initiated (effectiveness, efficiency), ensure that grant agreements are in line with the provisions of the relevant call for proposals and the applicable rules (FR)



a. The description of the tasks included in the grant agreement include tasks that are not in line with the award decision and do not contribute to the attainment of the program's objectives. b. Budget foreseen overestimates the costs that are necessary to carry out the action. c. Grants are not signed within the prescribed deadlines; this may cause delays regarding the action implementation. d. Beneficiary lacks the operational and financial capacity to carry out the agreed action; e. Action is not clearly defined in the grant agreement. f. Financial risks connected with pre-financing but grant

a. The adaptation phase that follows the award decision may only result to changes that were proposed by the evaluation committee (par. 5 of art. 204 RAP)- the Project officers who are in charge of the adaptation use the evaluation's recommendations a guiding principles; thus it is unlikely that an action receiving a grant because of its conformity with the programme's objectives. b. budget is 'adapted' to the final version of the action's work programme; detailed budget including personnel, subcontracting and other direct costs per applicant/beneficiary is calculated before the signature of the grant agreement; this calculation uses as basis the work packages that constitute the core of the co- financed action/work programme.

100% of the awarded grant agreements are 'adapted' on the basis of the recommendation of the evaluation committee; 100% of the grants under signature are monitored for meeting the target commitment/signature deadlines; 100% grants signed are filtered for the necessity of a financial guarantee

Costs: cost of staff involved in the contracting procedure Benefits: value of grant agreements compared to the awarded ones following the adaptation phase

Effectiveness: % of the awarded grant agreements that led to the signature of a grant agreement (and evaluation committee proposals accepted). Efficiency: % of grant agreements committed and signed within the target and regulatory provided deadline.




agreement does not require the beneficiary to lodge a guarantee in advance.

c. in line with the Key Performance Indicators announced in the Agency's work programme, the Agency has put in place monitoring system that allows for continuous supervision regarding the internal target deadlines set for the commitment execution. The electronic submission and grant management system (SEP/SYGMA) produces statistics related to all efficiency indicators (time to inform applicants /time to grant); the same goes for the payment deadlines. d. the operational and financial capacity of the applicant has been assessed at the time of the evaluation of the proposals; the Agency; reinforced monitoring in case of high- risk beneficiaries is performed; the model grant agreement that is signed with a beneficiary includes a term enabling the Agency to terminate the contract in case of substantial change to the beneficiary's legal, financial or technical situation. e. a technical annex is part of the grant agreement; the annex describes all important implementation aspects of




action with due account of the comments provided by the evaluation committee; the technical annex is verified by the responsible staff member regarding its conformity with the comments of the evaluation committee; thus, it is ensured that the co-financed action is properly defined. f. before the signature of each grant agreement on the basis of an ad hoc risk assessment, the Agency includes a clause regarding the necessity to lodge a guarantee as a prerequisite for the pre-financing instalment;

Stage 3: Monitoring of execution of the signed grant agreements; monitoring of the operational, financial and reporting aspects related to grant management

Main control objectives: ensure that the operational results (deliverables) from the projects are of a good value and meet the objectives and conditions stipulated in the grant agreement (effectiveness& efficiency); ensure that the related financial operations comply with the regulatory and contractual provisions (legality and regularity); controls prevent fraud to occur; appropriate accounting of the operations is ensured (reliability of reporting, safeguarding of assets and information)



a. actions foreseen in the grant agreements are not totally (or partially) carried out in accordance with the technical description and

a. project officers in charge of the project closely monitor implementation and alert beneficiaries/ Agency’s management in case of delays;

100% of the projects co- financed are controlled both in respect to their technical implementation and the corresponding spending

Costs: estimation of staff costs involved in the management of running grant agreements. Benefits: a. budget value of

Effectiveness: a. budget amount of errors detected (over authorised payments). b. number of penalties imposed.




requirements foreseen. b. non- eligible costs are reimbursed or the Agency reimburses eligible costs in excess of the overall grant ceiling. c. the beneficiary unduly obtains financial profit as a result from systemic errors, irregularities, fraud or breach of obligations. d. the agreed action is not carried out properly or is not carried out timely. e. changes to contracts are not properly documented or authorised. f. applicable requirements for dissemination of results are not respected. g. data entry in electronic grant management/ ABAC is inaccurate, EWS is neglected. h. supporting documents are lost, lack of audit trail. i. action requires the award of procurement contracts that exceed 60.000€ and the beneficiary does not abide to the applicable public procurement rules.

b. the types of eligible costs make part of the provisions of the grant agreement; they are further specified in the final budget that makes part of the grant agreement; the request of payments are scrutinised by the project officers and financial officers that act as operational initiators; OVA and ex- ante verifying officer make part of the control chain; c. the requests for payments are backed up with supporting documents that are provided for in the guidelines for interim/final payments (certificates, audit reports, etc). On the spot checks may be considered in case of risky projects. Project officers (OIA), financial officers (FIA) OVA, FVA make part of the control chain before payment is authorised; d. the evolution of all projects is monitored by the project officer in charge; non optimal evolution of co- financed actions results in enhanced monitoring and enforcement of relevant grant agreement provisions (e.g. payment suspension). e. all pertinent changes regarding the action implementation make part of an amendment via letter or

before payment is authorised (in accordance with predefined financial circuits). On the spot checks may be organised for projects that are considered riskier; depth defined according to situation. Imposition of contractual penalties is envisaged on the basis of the grant agreement provisions.

the costs claimed by the beneficiaries but rejected by the OIA/OVA/FVA. b. Budget value of penalties. c. Benefits from steering the GA implementation.

Efficiency: a. time to pay; b. Cost/benefit ratio regarding controls on payments, (evolution over time)




contract; beneficiaries are reminded by the Agency on their contractual obligation to promptly report changes that are envisaged during kick of meeting of the action. amendments are processed through the electronic grant management system; f. the Agency has set up a dissemination policy regarding the results of the actions that have received EU co-funding; A project data basis is available on the Agency's website where projects and results can be consulted- furthermore, the Agency informs its parent DG on the project's deliverables via a special note. g. ABAC users are trained and follow ABAC user's guidelines- in depth training has been provided to the Agency’s staff responsible for the evaluation of applications and management of the ensuing grant agreements (SEP/COMPASS).information regarding the new system’s functionalities were provided by the Agency to external parties in the context of special ‘information days’. h. all documents from proposal submission until final payment of a co-financed action are




stored in the e- grant management system and an audit trail for each action/person performing it via the system. i. rules that the beneficiary needs to comply with in relation to procurement make part of the provisions of the grants agreement; if these rules are not respected the Agency may consider the expenditure incurred as ineligible.

Stage 4: Ex-post controls: ex-post control methodology, implementation and follow up.

Main control objectives: measuring effectiveness of ex-ante controls by the results of the ex-post controls; detect and correct errors or fraudulent actions; (legality and regularity- anti-fraud) assess systemic deficiencies of the ex- ante control system based on the results of the ex-post controls (sound financial management); ensure that the audit results from the ex-post controls lead to effective recoveries (legality &regularity, anti-fraud strategy); ensure appropriate accounting of the recoveries made (reliability of reporting);



a. The ex-ante controls (as such may not be able to prevent, detect and correct all erroneous payments or attempted fraud; b. Inadequate audit methodology due to lack of expertise of auditors and inadequate audit procedures results in errors, irregularities or fraud not being detected;

a. The ex-post control strategy aims at detecting possible errors which were not detected at the stage of the ex-ante control chain and draws assessment on the effectiveness of ex- ante controls;

Ex-post controls aim at verifying the eligibility and the accuracy of cost items as well as the compliance of cost statements established by the beneficiaries with legal provisions of the grant agreements. The ex-post control strategy consists of annual planning of the number

Costs: Staff involved: 1.0 FTE (80% CA and 20% TA) plus the price of the contract for external audit services. Benefits: Direct benefit: budget value of

Effectiveness:representative error rate (if possible): Efficiency: % of costs for audits over the amount disbursed in grants for the year; Success ratio of recovery




c. The ex post controls focus on the detection of external errors (made by the beneficiaries) and do not consider any internal errors made by the staff or embedded systematically in the own organisation; d. Errors, irregularities and cases of fraud detected are not addressed or not addressed timely; e. Lessons learnt from the audit results are not exploited so as to reinforce the general internal control system; f. unwarranted assurance is being provided in the AAR (incorrectly estimated error rates,);

b. The ex-post control function is outsourced; the audit firms performing the audits are chosen through a competitive procurement procedure either from DG BUDG Framework Contracts or by FWC signed with the Agency and (multiple) contractors. The audit firms are chosen (also) due to their expertise in the domain; the auditors perform ex-post control covering standardised items described in an audit work programme. c. The nature of the errors detected, allow the agency to assess if it was in a position to have detected the error at the time of the ex-ante control procedure; financial and operational initiators/verifiers that performed the given ex ante controls are informed on the concrete cases; if errors point to structural deficiencies, the Agency addresses the situation at management level; d. the ex-post controls are carried out within a predetermined timeframe; the contradictory procedure is organised according to predefine procedure and deadlines; once the findings of the auditors’ report are approved, follow up is ensured

of on-the-spot audits the definition of a sample of transactions (calculation of residual error rate) and selection of transactions that are considered risky;. The ex-post controls strategy has a twofold approach: i- random sampling of transactions which aims at building over several years a representative sample of the entire population of transactions per programme managed; the aim is to, enable the Agency to draw statistically valid conclusions regarding the whole (homogeneous) population ii- risk-based sampling targeted to the transactions identified by the responsible operational and financial initiators, as bearing a higher level of risk (e.g. shortcomings during implementation, discrepancies between estimated/actual costs).

errors detected by the auditors for the year 2014, which will lead to recoveries; Indirect benefit: Equally important are the educational and the deterrent effects of ex-post controls towards the beneficiaries, which lead to the prevention of errors and irregularities that would have occurred without the mitigating effects of the ex-post controls.

Using the risk and random sample the authorising officer benefits from increased assurance on the error rate over the total population.

orders launched; Ratio between annual cost of controls and benefits; Number or value of audit results whose implementation is pending;




by the Agency's ex-post control team (initiation of recovery procedure). e. Results of the ex-post controls are discussed at management level so as to ensure that follow-up of (structural) deficiencies is ensured at appropriate level. An annual ex-post control report depicts the main results of the audits' findings and is used as reference for the lessons learnt). f. the ex-post control methodology is based on the relevant EC guidelines issued by DG Budg. Thus, the risk that results of non-reliability of the ex-post control results is considered low.


Procurement Direct Management

Stage 1: Planning and definition of needs

Main control objectives: Ensure that the Agency organises the procurement procedures in an effective, efficient and economic manner; the procedures organised comply with the applicable provisions (EU Financial Regulation)



a. The needs are not well defined (operationally and economically) and that the decision to procure was inappropriate to meet the operational objectives; b. The best offer/s are not submitted due to the poor definition of the tender specifications c. Calls for tenders are launched late in the year and the possible tenderers do not have enough time to prepare their offers (even though deadline within the legally provided limits)

a. the definition of procurement procedures to be launched during the year is part of the annual work programme; the Agency, in cooperation with the parent DG drafts detailed tender specifications including eligibility, selection and award criteria; separate not with justification regarding the a)maximum price and b) procurement procedure is submitted to the AO before the launch is approved. b. the tender specifications prepared are checked by the legal department of the Agency to verify clarity, consistency and relevance of the selection and award criteria; the AO approves the final text of the tender specifications. c. the calls for tenders launched by the Agency comply with the deadlines for tender submission provided by the legislation; the Agency

100% of the procurements launched are part of the annual work programme that is implemented by the Agency; 100% of the envisaged procurements include a justification on the announced maximum price before they are authorised; 100% of procurements are checked by the legal department for compliance with public procurement rules;

Costs: Staff involved Benefits: limit risk of litigation and cancellation of procurement procedure

Effectiveness: Number of projected tender cancelled; Number of contract discontinued due to lack of use (poor planning); N° of ‘open 'procurement procedures where only one or no offers were received; N° of requests for clarification regarding the tender. Efficiency: Estimated average cost of a procurement procedure per awarded procurement contract.




provides for longer deadlines whenever feasible, especially if the starting date for the task execution allows for it.

Stage 2: Evaluation of the offers submitted and award

Main control objectives: Ensure an effective and efficient evaluation with due regard of the applicable regulatory provisions (legality& regularity); ensure that fraudulent behaviour pertaining to the submission of tenders is detected and corrective action is assumed (exclusion of candidates from participation).



a. The most economically advantageous offer not being selected, due to a biased, inaccurate or biased evaluation process; b. members of the opening/evaluation committee are in situations of conflict of interest; c. Facts related to misappropriation of facts presented by the tenderers with their applications are not detected; d. Contracts are awarded to entities not having the necessary professional and/or financial capacities.

a. the evaluation procedure is organised according to predefined rules, announced in the call for tender documentation. Following the evaluation, the offer assessed as the most economically advantageous is scrutinised by an independent Committee (Advisory Committee for Procurement and Contracts) this committee is issuing an opinion to the AO to award or not the service contract, after examining all aspects related to the legality and regularity of the whole procedure. There is a standstill period that allows the interested parties to express any comments relating to the soundness of the procedure;

100% of the contracts exceeding the price of 125.000 euro are scrutinised by the ACPC committee for conformity with the applicable provisions. 100% of the documentation submitted with the offers is checked by the Unit in charge (exclusion, selection, award criteria). Further cross checks are performed and/ or clarifications required in case of non-substantiated references included in the tender.

Costs: Staff involved Benefits: difference between the chosen and the most onerous offer; Benefits: amount of contracts for which the control prevented the risk of litigation/ or fraud; Benefits: avoid contracting with excluded economic operators; Benefits: amount of procurements challenged during the standstill period;

Effectiveness: Numbers of ‘valid’ complaints or litigation cases filed. Efficiency: Cost of successful tender minus cost of the most onerous one (or average cost); Average cost of a tendering Procedure;




b. The members of the opening and the evaluation committee are appointed by the AO; all of them are required to sign a declaration of non- conflict of interest in relation to the evaluated procedure. c. Supporting documentation is requested together with the offer (CVs, activity reports, references, information on exclusion criteria); the Agency performs random checks concerning the accurateness of the information provided with the administrative part of the tender and requires additional information in case this is considered necessary. d. each call for tender includes selection criteria requiring the minimum professional and financial qualifications that tenderers should have in order to be able to submit a technical offer. Those criteria are set in proportionality with the requested service.

Stage 3: Supervisory measures during contract implementation

Main control objectives: Ensure that contract execution follows the provisions of the signed contracts (legality and regularity); ensure that payments are executed in compliance with the applicable rules; any weakness in the procedure or attempt document


misrepresentation is detected and corrected (legality and regularity& fraud prevention);



a. The services foreseen are not totally or partially provided in accordance with the technical description foreseen in the contract; the amount paid exceed that due in accordance with the applicable contractual and regulatory provisions; b. error, irregularity or fraud is not prevented, detected or corrected by ex- ante control prior to payment;

a. the execution of each service contract is monitored from the technical point of view; deliverables clearly defined in the contract are due within predefined deadlines; in case of late delivery or delivery of poor results the agency imposes the contractual penalties provided for in the service contract (reduction of the agreed price, liquidated damages) and may also terminate a contract; all deliverables are assessed for their conformity with the tender specifications before a payment is authorised (payments are linked with the execution of deliverables); b. given that procurement contracts are signed with predetermination of the price (that is sue without further control once the deliverables are properly provided) errors are not easy to occur; importance is attributed to the assessment of the deliverables so that the contractor is not paid the agreed price unless what is agreed is executed.

100% of the payments linked to services contracts are verified before the payment authorisation;

Costs: Staff involved+ cost for the contracts for the year. Benefits: amount of overpayments prevented by the controls; amounts detected and associated with fraud and error/ systematic weaknesses corrected

Effectiveness: % error rate prevented (amount of errors/irregularities averted over total payments) Number of control failures; Number/amount of liquidated damages. Efficiency: Average cost per open project. % cost over annual amount disbursed; Time-to-payment; Late interest payment and damages paid by the Agency.

ANNEX 6: Implementation through national or international public-sector bodies and bodies governed by private law with a public sector mission (if applicable) N/A

91

ANNEX 7: EAMR of the Union Delegations (DG DEVCO only)

92

ANNEX 8: Decentralised agencies (if applicable) N/A

93

ANNEX 9: Performance information included in evaluations

ANNEX 10: Specific annexes related to "Management of Resources" (Part 2)

ANNEX 11: Specific annexes related to "Assessment of the effectiveness of the internal control systems" (Part 3) (if needed - free format)

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