Commission Delegated Regulation (EU) 2019/715 of 18 December 2018 on the framework financial regulation for the bodies set up under the TFEU and Euratom Treaty and referred to in Article 70 of Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council

• CELEX: Delegated Regulation (EU) 2019/715
• Articles: 114

Article 1 Subject matter

This Regulation lays down the essential financial rules for bodies which are set up by the Union under the Treaty on the Functioning of the European Union and the Treaty establishing the European Atomic Energy Community and which have legal personality and receive contributions charged to the Union budget (‘Union bodies’).

On the basis of this Regulation each Union body is to adopt its own financial rules. The Union body's financial rules shall not depart from this Regulation except where its specific needs so require and with the Commission's prior consent.

Article 2 Definitions

For the purposes of this Regulation, the following definitions shall apply:

—

‘constituent act’ means the instrument of Union law governing the main aspects of the setting up and operation of the Union body,

—

‘management board’ means the main internal body of the Union body that is responsible for taking decisions on financial and budgetary matters, irrespective of the name given to it in the constituent act,

—

‘director’ means the person responsible for implementing the decisions of the management board and the budget of the Union body as authorising officer, irrespective of the title given to that person in the constituent act,

—

‘executive board’ means the internal body of the Union body that assists the management board and whose responsibilities and rules of procedures are, in principle, set out in the constituent act irrespective of the name given to this body in the constituent act.

Article 2 of Regulation (EU, Euratom) 2018/1046 shall apply mutatis mutandis .

Article 3 Periods, dates and time limits

Unless otherwise provided, Council Regulation (EEC, Euratom) No 1182/71  ( 7 ) shall apply to the deadlines set out in this Regulation.

Article 4 Protection of personal data

This Regulation is without prejudice to the requirements of Regulations (EU) 2018/1725  ( 8 ) and (EU) 2016/679  ( 9 ) .

Article 5 Respect for budgetary principles

The budget of the Union body shall be established and implemented in accordance with the principles of unity, budgetary accuracy, annuality, equilibrium, unit of account, universality, specification, sound financial management and transparency as set out in this Regulation.

Article 6 Scope of the budget of the Union body

1.   For each financial year, the budget of the Union body shall forecast and authorise all revenue and expenditure considered necessary for the Union body. It shall comprise the revenue and expenditure of the Union body, including administrative expenditure.

2.   The budget of the Union body shall contain the following:

(a)

non-differentiated appropriations;

(b)

where justified by operational needs, differentiated appropriations, which consist of commitment appropriations and payment appropriations.

3.   The appropriations authorised for the financial year shall consist of:

(a)

appropriations consisting of the annual contribution granted by the Union;

(b)

appropriations arising from own revenue consisting of all fees and charges which the Union body is authorised to collect by virtue of the tasks entrusted to it, and any other revenue;

(c)

appropriations consisting of any financial contributions from the host Member States;

(d)

appropriations provided following the receipt of revenue assigned during the financial year to specific items of expenditure in accordance with Article 20(1);

(e)

appropriations carried over from the preceding financial years.

4.   Revenue consisting of fees and charges shall only be assigned in exceptional and duly justified cases provided for in the constituent act.

5.   Commitment appropriations shall cover the total cost of the legal commitments entered into during the financial year, subject to Article 75(2).

6.   Payment appropriations shall cover payments made to honour the legal commitments entered into in the financial year or preceding financial years.

7.   Paragraphs 3 and 5 of this Article shall not prevent appropriations being committed globally or budgetary commitments being made in annual instalments as respectively provided for in point (b) of Article 74(1) and in Article 74(2).

Article 7 Contribution agreements, grant agreements and financial framework partnerships

1.   Contribution agreements and grant agreements may be exceptionally concluded between the Commission and a Union body provided that the following conditions are met:

(a)

the constituent act of the Union body or a basic act expressly provides for such possibility;

(b)

the conclusion of such an agreement is duly justified by the special nature of the action and specific expertise of the Union body;

(c)

the tasks to be implemented by the Union body under the agreement satisfy the following criteria:

(i)

fall within the scope of the Union body's objectives and the tasks are compatible with the Union body's mandate as set out in the constituent act;

(ii)

the tasks do not form part of the tasks assigned to the Union body in the constituent act and financed by the annual contribution granted to it by the Union.

2.   Where contribution agreements and grant agreements referred in paragraph 1 and service-level agreements are concluded for services offered by the Union body to the Commission, the Commission may establish a financial framework partnership agreement with the Union body in line with Article 130 of Regulation (EU, Euratom) 2018/1046.

3.   The choice by the Commission of the Union body shall take due account of the cost efficiency of entrusting those tasks.

4.   Where the Commission exceptionally signs a contribution agreement with the Union body, the rules applicable to indirect management laid down in Titles V and VI of Regulation (EU, Euratom) 2018/1046 shall apply to the Union body in respect of funds allocated to that agreement and Articles 105 and 106 of this Regulation shall not apply.

5.   The tasks referred to under paragraph 1 should be included in the Single Programming Document of the Union body, referred to in Article 32, for information purposes only. Information on the agreements referred to under paragraph 2 shall be included in the consolidated annual activity report referred to in Article 48.

6.   The authorising officer shall inform the management board before signing any agreement referred to in paragraph 2.

Article 8 Specific rules on the principles of unity and budgetary accuracy

1.   All revenue and expenditure shall be booked to a budget line in the budget of the Union body.

2.   No expenditure may be committed or authorised in excess of the appropriations authorised by the budget of the Union body.

3.   An appropriation may be entered in the budget of the Union body only if it is for an item of expenditure considered necessary.

4.   Interest generated by pre-financing payments made from the budget of the Union body shall not be due to the Union body except as otherwise provided in the contribution agreements referred to in Article 7.

Article 9 Definition

The appropriations entered in the budget of the Union body shall be authorised for a financial year that shall run from 1 January to 31 December.

Article 10 Budgetary accounting for revenue and appropriations

1.   The Union body's revenue of a financial year, as referred to in Article 6, shall be entered in the accounts for that financial year on the basis of the amounts collected during that financial year.

2.   The revenue of the Union body shall give rise to an equivalent amount of payment appropriations.

3.   Commitments shall be entered in the accounts for a financial year on the basis of the legal commitments entered into up to 31 December of that year. However, the global budgetary commitments referred to in point (b) of Article 74(1) shall be entered in the accounts for a financial year on the basis of the budgetary commitments up to 31 December of that year.

4.   Payments shall be entered in the accounts for a financial year on the basis of the payments made by the accounting officer by 31 December of that year.

5.   Where a constituent act provides that clearly defined tasks are financed separately or where the Union body implements agreements concluded in accordance with Article 7, the Union body shall have specific budget lines on the revenue and expenditure operations. The Union body shall clearly identify each group of tasks in its resource programming included in the single programming document drawn up pursuant to Article 32.

Article 11 Commitment of appropriations

1.   The appropriations entered in the budget of the Union body may be committed with effect from 1 January, once the budget of the Union body has been definitively adopted.

2.   As of 15 October of the financial year, routine administrative expenditure may be committed in advance against the appropriations provided for the following financial year, provided that the expenditure has been approved in the last budget of the Union body duly adopted, and only up to a maximum of one quarter of the appropriations decided upon by the management board on the corresponding budget line for the current financial year.

Article 12 Cancellation and carry-over of appropriations

1.   Appropriations which have not been used by the end of the financial year for which they were entered shall be cancelled, unless they are carried over in accordance with paragraphs 2 and 4.

2.   The following appropriations may be carried over by a decision taken pursuant to paragraph 3, but only to the following financial year:

(a)

commitment appropriations and non-differentiated appropriations, for which most of the preparatory stages of the commitment procedure have been completed by 31 December of the financial year. Such appropriations may be committed up to 31 March of the following financial year, with the exception of non-differentiated appropriations related to building projects which may be committed up to 31 December of the following financial year;

(b)

payment appropriations which are needed to cover existing commitments or commitments linked to commitment appropriations carried over, where the payment appropriations provided for in the relevant budget lines for the following financial year are insufficient.

With regard to point (b) of the first subparagraph, the Union body shall first use the appropriations authorised for the current financial year and shall not use the appropriations carried over until the former are exhausted.

3.   The management board or, where the constituent act allows it, the executive board, shall take its decision on carry-overs as referred to in paragraph 2 by 15 February of the following financial year.

4.   Appropriations shall be automatically carried over in respect of:

(a)

appropriations corresponding to internal assigned revenue. Such appropriations may be carried over only to the following financial year and may be committed up to 31 December of that year, with the exception of the internal assigned revenue from lettings and the sale of buildings and land referred to in point (e) of Article 20(3) which may be carried over until it is fully used;

(b)

appropriations corresponding to external assigned revenue. Such appropriations shall be fully used by the time all the operations relating to the programme or action to which they are assigned have been carried out or they may be carried over and used for the succeeding programme or action.

5.   Appropriations for staff expenditure shall not be carried over. For the purposes of this Article, staff expenditure comprises remuneration and allowances for the staff of Union bodies who are subject to the Staff Regulations.

6.   Non-differentiated appropriations legally committed by the end of the financial year shall be paid until the end of the following financial year.

Article 13 Detailed provisions on cancellation and carryover of appropriations

1.   The commitment appropriations and the non-differentiated appropriations referred to in point (a) of the first subparagraph of Article 12(2) may be carried over only if the commitments could not be made before 31 December of the financial year for reasons not attributable to the authorising officer and if the preparatory stages are sufficiently advanced to make it reasonable to expect that the commitment will be made by no later than 31 March of the following financial year, or, in relation to building projects, by 31 December of the following financial year.

2.   Appropriations carried over in accordance with point (a) of Article 12(2) which have not been committed by 31 March of the following financial year or up to 31 December of the following year for amounts relating to building projects shall be automatically cancelled.

3.   Appropriations carried over which have been cancelled shall be identified in the accounts.

Article 14 Decommitment of appropriations

1.   Where budgetary commitments are decommitted in any financial year after the year in which they were made as a result of total or partial non-implementation of the actions for which they were earmarked, the appropriations corresponding to such decommitments shall be cancelled.

2.   This Article shall not apply to external assigned revenue referred to in Article 20(2).

Article 15 Rules applicable in the event of late adoption of the budget of the Union body

1.   If the budget of the Union body has not been definitively adopted at the beginning of the financial year, the rules set out in paragraphs 2 to 6 shall apply.

2.   Commitments may be made per chapter up to a maximum of one quarter of the total appropriations authorised in the relevant chapter of the budget of the Union body for the preceding financial year plus one-twelfth for each month that has elapsed.

The limit of the appropriations provided for in the statement of estimates of revenue and expenditure shall not be exceeded.

Payments may be made monthly per chapter up to a maximum of one twelfth of the appropriations authorised in the relevant chapter of the budget of the Union body for the preceding financial year. However, that sum shall not exceed one twelfth of the appropriations provided for in the same chapter of the statement of estimates of revenue and expenditure.

3.   The appropriations authorised in the relevant chapter of the budget of the Union body for the preceding financial year, as referred to in paragraph 2, shall be understood as referring to the appropriations voted in the budget of the Union body, including by amending budgets, and after adjustment for the transfers made during that financial year.

4.   If the continuity of Union body action and management needs so require, the management board may, at the request of the director, authorise expenditure in excess of one provisional twelfth but not exceeding a total of four provisional twelfths, except in duly justified cases, both for commitments and for payments over and above those automatically made available in accordance with paragraph 2.

The additional twelfths shall be authorised in full and shall not be divisible.

5.   If, for a given chapter, the authorisation of four provisional twelfths granted in accordance with paragraph 4 is not sufficient to cover the expenditure necessary to avoid a break in continuity of action by the Union body in the area covered by the chapter in question, authorisation may exceptionally be given by the management board, at the request of the director, to exceed the amount of the appropriations entered in the corresponding chapter of the budget of the Union body for the preceding financial year. However, the overall total of the appropriations available in the budget of the Union body of the preceding financial year or in the statement of estimates of revenue and expenditure, as proposed, shall in no circumstances be exceeded.

Article 16 Definition and scope

1.   Revenue and payment appropriations shall be in balance.

2.   Commitment appropriations may not exceed the amount of the Union contribution, plus own revenue and any other revenue referred to in Article 6.

3.   For bodies for which the revenue is constituted by fees and charges in addition to the Union contribution, fees should be set at a level such as to avoid a significant accumulation of surplus. Where a significant positive or negative budget result, within the meaning of Article 99, becomes recurrent, the level of the fees and charges shall be revised.

4.   The Union body shall not raise loans within the framework of the budget of the Union body.

5.   The Union contribution to the Union body shall constitute for the budget of the Union body a balancing contribution and may be divided into a number of payments.

6.   The Union body shall implement rigorous cash management, taking due account of assigned revenue, in order to ensure that its cash balances are limited to duly justified requirements. With its payment requests it shall submit detailed and updated forecasts on its real cash requirements throughout the year, including information on assigned revenue.

Article 17 Balance from financial year

1.   If the budget result within the meaning of Article 99 is positive, it shall be repaid to the Commission up to the amount of the contribution paid during the year. The part of the budget result exceeding the amount of the Union contribution paid during the year shall be entered in the budget of the Union body for the following financial year as revenue.

The first subparagraph shall also apply when the revenue of the Union body is constituted by fees and charges in addition to the Union contribution.

The difference between the contribution entered in the budget and that actually paid to the Union body shall be cancelled.

2.   In exceptional cases, where the constituent act provides that the revenues arising from fees and charges are assigned to particular items of expenditure, the Union body may carry-over the balance of fees and charges as assigned revenue for the activities related to the provision of the services for which the fees are due.

3.   If the budget result within the meaning of Article 99 is negative, it shall be entered in the budget of the Union body for the following financial year as payment appropriations or, where appropriate, offset against positive budget result of the Union body in the following financial years.

Where the fees and charges are assigned revenue the negative result related to this assigned revenue can be offset against the accumulated surplus from previous years, if available.

4.   The revenue or payment appropriations shall be entered in the budget of the Union body during the budgetary procedure using the letter of amendment procedure set out in Article 42 of Regulation (EU, Euratom) 2018/1046 or, while implementation of the budget of the Union body is under way, by means of an amending budget.

An estimate of the budget result from year N – 1 will be provided by the Union body no later than 31 January of the year N. This information shall be duly taken into account by the Commission when assessing the financial needs of the Union body for the year N + 1.

Article 18 Use of euro

1.   The budget shall be drawn up and implemented in euro and the accounts shall be presented in euro. However, for the cash-flow purposes referred to in Article 49, the accounting officer and, in the case of imprest accounts, the imprest administrators, and, for the needs of the administrative management of the Union body, the authorising officer responsible, shall be authorised to carry out operations in other currencies.

2.   Without prejudice to specific provisions laid down in sector-specific rules, or in specific contracts, grant agreements, contribution agreements and financing agreements, conversion by the authorising officer responsible shall be made using the daily euro exchange rate published in the C series of the Official Journal of the European Union of the day on which the payment order or recovery order is drawn up by the authorising department.

If no such daily rate is published, the authorising officer responsible shall use the one referred to in paragraph 3.

3.   For the purposes of the accounts provided for in Articles 82, 83 and 84 of Regulation (EU, Euratom) 2018/1046 conversion between the euro and another currency shall be made using the monthly accounting exchange rate of the euro. That accounting exchange rate shall be established by the accounting officer of the Commission by means of any source of information regarded as reliable, based on the exchange rate on the penultimate working day of the month preceding that for which the rate is established.

4.   Currency conversion operations shall be carried out in such a way as to avoid having a significant impact on the level of the Union co-financing or a detrimental impact on the budget. Where appropriate, the rate of conversion between the euro and other currencies may be calculated using the average of the daily exchange rate in a given period.

Article 19 Scope

Without prejudice to Article 20, total revenue shall cover total payment appropriations. Without prejudice to Article 24, all revenue and expenditure shall be entered in full without any adjustment against each other.

Article 20 Assigned revenue

1.   External assigned revenue and internal assigned revenue shall be used to finance specific items of expenditure.

2.   The following shall constitute external assigned revenue:

(a)

financial contributions from Member States and third countries, including in both cases their public agencies, entities or natural persons, to certain activities of the Union body insofar as this is provided for in the agreement concluded between the Union body and the Member States, third countries or the public agencies, entities or natural persons in question;

(b)

financial contributions from international organisations;

(c)

revenue earmarked for a specific purpose, such as income from foundations, subsidies, gifts and bequests;

(d)

financial contributions, not covered by point (a), to the Union bodies' activities from third countries or non-Union bodies;

(e)

revenue from agreements referred to in Article 7;

(f)

internal assigned revenue referred to in paragraph 3, to the extent that it is ancillary to the other revenue referred to in points (a) to (c) of this paragraph;

(g)

revenue from fees and charges referred to in Article 6(3).

3.   The following shall constitute internal assigned revenue:

(a)

revenue from third parties in respect of goods, services or work supplied at their request, with the exception of fees and charges referred to in point (b) of Article 6(3);

(b)

revenue arising from the repayment, in accordance with Article 62, of amounts wrongly paid;

(c)

proceeds from the supply of goods, services and works for Union institutions or other Union bodies;

(d)

insurance payments received;

(e)

revenue from lettings and from the sale of buildings and land;

(f)

revenue arising from subsequent reimbursement of taxes pursuant to point (b) of Article 27(3) of Regulation (EU, Euratom) 2018/1046.

4.   Assigned revenue shall be carried over and transferred in accordance with the provisions of points (a) and (b) of Article 12(4) and Article 27.

5.   Without prejudice to point (f) of the second paragraph, the relevant constituent act may also assign the revenue for which it provides to specific items of expenditure. Unless specified otherwise in the relevant constituent act, such revenue shall constitute internal assigned revenue.

6.   All items of revenue within the meaning of points (a) to (c) of paragraph 2 and points (a) and (c) of paragraph 3 shall cover all direct or indirect expenditure incurred by the activity or purpose in question.

7.   The budget of the Union body shall include lines to accommodate external assigned revenue and internal assigned revenue and wherever possible shall indicate the amount.

Assigned revenue may be included in the estimate of revenue and expenditure only for the amounts that are certain at the date of the establishment of the estimate.

Article 21 Structure to accommodate assigned revenue and provision of corresponding appropriations

1.   The structure to accommodate assigned revenue in the budget of the Union body shall comprise:

(a)

in the statement of revenue, a budget line to receive the revenue;

(b)

in the statement of expenditure, the budget remarks, including general remarks, showing which budget lines may receive the appropriations corresponding to the assigned revenue which are made available.

In the case referred to in point (a) of the first subparagraph, a token entry ‘pro memoria’ shall be made and the estimated revenue shall be shown for information in the remarks.

2.   The appropriations corresponding to assigned revenue shall be made available automatically, both as commitment appropriations and as payment appropriations, when the revenue has been received by the Union body.

3.   By way of exception from paragraph 2, where assigned revenue stems from the implementation of a contribution agreement concluded pursuant to Article 7, the total amount of commitment appropriations may be made available upon entry into effect of the agreement concerned provided that the basic act with regard to the funds being delegated to the Union body provides for the possibility to make use of annual instalments.

Article 22 Donations

1.   The director may accept any donation made to the Union body, such as foundations, subsidies, gifts and bequests.

2.   Acceptance of a donation of a value of EUR 50 000 or more which involves a financial charge or any type of obligation, including follow-up costs, exceeding 10 % of the value of the donation made, shall be subject to the prior authorisation of the management board or, where the constituent act allows it, of the executive board. The management board or executive board, as applicable, shall take a decision within two months of the date on which the request for authorisation is submitted to it. If the management board or, where the constituent act allows it, the executive board fails to take a decision within that period, the donation shall be deemed accepted.

3.   The director shall, at the request of the management board or, where the constituent act allows it, the executive board, analyse, estimate and duly explain the financial charges, including follow-up costs, and any other obligations as referred to in paragraph 1 that the acceptance of the donation entails.

Article 23 Corporate Sponsorship

Article 26 of Regulation (EU, Euratom) 2018/1046 shall not apply to Union bodies.

Article 24 Rules on deductions and exchange rates adjustments

Article 27 of Regulation (EU, Euratom) 2018/1046 shall apply mutatis mutandis.

Article 25 General provisions

1.   Appropriations shall be earmarked for specific purposes by title and chapter. The chapters shall be further subdivided into articles and lines.

2.   In the budget of the Union body, appropriations may only be transferred to lines for which the budget of the Union body has authorised appropriations or which carry a token entry ‘pro memoria’.

3.   The limits referred to in Article 26 shall be calculated at the time the request for transfer is made and with reference to the appropriations provided in the budget of the Union body, including amending budgets.

4.   The amount to be taken into consideration for the purposes of calculating the limits referred to in Article 26 shall be the sum of the transfers to be made on the line from which transfers are being made, after adjustment for earlier transfers made.

Article 26 Transfers

1.   The director may transfer appropriations:

(a)

from one title to another up to a maximum of 10 % of the appropriations for the financial year shown on the line from which the transfer is made;

(b)

from one chapter to another and within each chapter without limit.

2.   Beyond the limit referred in paragraph 1, the director may propose transfers of appropriations from one title to another to the management board or, where the constituent act allows it, to the executive board. The management board or, where the constituent act allows it, the executive board shall have two weeks to oppose the proposed transfers. After that time limit, the proposed transfers shall be deemed to be adopted.

3.   Proposals for transfers and transfers carried out under paragraphs 1 and 2 shall be accompanied by appropriate and detailed supporting documents showing the implementation of appropriations and estimates of requirements up to the end of the financial year, both for the headings to be credited and for those from which the appropriations are drawn.

4.   The authorising officer shall inform the management board as soon as possible of all transfers made. The authoring officer shall inform the European Parliament and the Council of all transfers carried out under paragraph 2.

Article 27 Specific rules on transfers

Appropriations corresponding to assigned revenue may be transferred only if such revenue is used for the purpose for which it is assigned.

Article 28 Performance and principles of economy, efficiency and effectiveness

1.   Appropriations shall be used in accordance with the principle of sound financial management, and thus be implemented respecting the following principles:

(a)

the principle of economy which requires that the resources used by the Union body in the pursuit of its activities shall be made available in due time, in appropriate quantity and quality and at the best price;

(b)

the principle of efficiency which concerns the best relationship between the resources employed, the activities undertaken and the achievement of objectives;

(c)

the principle of effectiveness which concerns the extent to which the objectives pursued are achieved through the activities undertaken.

2.   In line with the principle of sound financial management, the use of appropriations shall focus on performance and for that purpose:

(a)

objectives for programmes and activities shall be established ex ante ;

(b)

progress in the achievement of objectives shall be monitored with performance indicators;

(c)

progress in, and problems with, the achievement of those objectives shall be reported to the European Parliament and the Council in accordance with point (d) of the first subparagraph of Article 32(5) and with point (b) of the first subparagraph of Article 48(1).

3.   Specific, measurable, attainable, relevant and time-bound objectives as referred to in paragraphs 1 and 2 and relevant, accepted, credible, easy and robust indicators shall be defined where relevant. The indicators used to monitor the achievement of the objectives shall cover all sectors. The director shall provide the relevant information to the management board annually. It shall be included in the Single Programming Document referred to in Article 32.

4.   The Union body shall carry out a benchmarking exercise referred to in Article 38 of this Regulation.

The benchmarking exercise shall include:

(a)

a review of the efficiency of the Union body's horizontal services,

(b)

a cost-benefit analysis of sharing services or transferring them entirely to another Union body or the Commission.

When carrying out the benchmarking exercise referred to in the first and the second subparagraph the Union body shall make necessary arrangements to avoid any conflict of interests.

Article 29 Evaluations

1.   Programmes and activities that entail significant spending shall be subject to ex-ante and retrospective evaluations (‘evaluation’), which shall be proportionate to the objectives and expenditure.

2.   Ex-ante evaluations supporting the preparation of programmes and activities shall be based on evidence, if available, on the performance of related programmes or activities and shall identify and analyse the issues to be addressed, the added value of Union involvement, objectives, expected effects of different options and monitoring and evaluation arrangements.

3.   Retrospective evaluations shall assess the performance of the programme or activity, including aspects such as effectiveness, efficiency, coherence, relevance and EU added value. Retrospective evaluations shall be based on the information generated by the monitoring arrangements and indicators established for the action concerned. They shall be undertaken periodically and in sufficient time for the findings to be taken into account in ex-ante evaluations or impact assessments that support the preparation of related programmes and activities.

4.   The director shall prepare an action plan to follow-up on the conclusions of the evaluations referred to in paragraph 3 and report on its progress to the Commission in the consolidated annual activity report referred to in Article 48 and regularly to the Management Board.

5.   The management board shall scrutinise the implementation of the action plan referred to in paragraph 4.

Article 30 Internal control of budget implementation

1.   Pursuant to the principle of sound financial management, the budget of the Union body shall be implemented in compliance with effective and efficient internal control.

2.   For the purposes of the implementation of the budget of the Union body, internal control shall be applied at all levels of management and shall be designed to provide reasonable assurance of achieving the following objectives:

(a)

effectiveness, efficiency and economy of operations;

(b)

reliability of reporting;

(c)

safeguarding of assets and information;

(d)

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

(e)

adequate management of the risks relating to the legality and regularity of the underlying transactions, taking into account the multiannual character of programmes as well as the nature of the payments concerned.

3.   Effective internal control shall be based on best international practices and on the Internal Control Framework laid down by the Commission for its own departments and shall include, in particular, the following elements:

(a)

segregation of tasks;

(b)

an appropriate risk management and control strategy that includes control at recipient level;

(c)

avoidance of conflicts of interests;

(d)

adequate audit trails and data integrity in data systems;

(e)

procedures for monitoring effectiveness and efficiency;

(f)

procedures for follow-up of identified internal control weaknesses and exceptions;

(g)

periodic assessment of the sound functioning of the internal control system.

4.   Efficient internal control shall be based on the following elements:

(a)

the implementation of an appropriate risk management and control strategy coordinated among appropriate actors involved in the control chain;

(b)

the accessibility for all appropriate actors in the control chain of the results of controls carried out;

(c)

reliance, where appropriate, on independent audit opinions, provided that the quality of the underlying work is adequate and acceptable and that it was performed in accordance with agreed standards;

(d)

the timely application of corrective measures including, where appropriate, dissuasive penalties;

(e)

the elimination of multiple controls;

(f)

the improvement of the cost-benefit ratio of controls.

5.   Where the Union body runs also offices away from the main seat, the internal control system shall be designed in order to mitigate the specific risks of the activities of those offices.

Article 31 Publication of accounts and budgets

1.   The budget of the Union body shall be established and implemented and the accounts presented in accordance with the principle of transparency.

2.   A summary of the budget of the Union body and any amending budget of the Union body, as definitively adopted, shall be published in the Official Journal of the European Union within three months of their adoption.

The summary shall show the aggregated figures for each Title of the budget of the Union body, the establishment plan and an estimate of the number of contract staff expressed in full-time equivalents for which appropriations are budgeted, and seconded national experts. It shall also indicate the equivalent information for the previous financial year.

3.   The budget of the Union body including the establishment plan and any amending budgets of the Union body, as definitively adopted, as well as an indication of the number of contract staff expressed in full-time equivalents for which appropriations are budgeted, and of the number of seconded national experts, shall be transmitted for information to the European Parliament and the Council, the Court of Auditors and the Commission, and shall be published on the website of the Union body within four weeks of their adoption.

4.   The Union body shall make available on its website, no later than 30 June of the year following the financial year in which the funds were legally committed, information on the recipients of funds financed from the budget of the Union body, including experts contracted pursuant to Article 93 of this Regulation, in accordance with Article 38 of Regulation (EU, Euratom) 2018/1046 and following a standard presentation. The published information shall be easily accessible, transparent and comprehensive. The information shall be made available with due observance of the requirements of confidentiality and security, in particular the protection of personal data laid down in Regulation (EU) 2018/1725.

Article 32 Single programming document

1.   In accordance with Article 40 of Regulation (EU, Euratom) 2018/1046 the Union body shall send by 31 January each year to the Commission, the European Parliament and the Council its draft single programming document, as endorsed by its Management Board, containing:

(a)

a multiannual work programme;

(b)

an annual work programme;

(c)

an estimate of its revenue and expenditure;

(d)

a resources programming document;

(e)

information on its building policy;

(f)

strategy for cooperation with third countries and/or international organisations;

(g)

strategy for achieving efficiency gains and synergies;

(h)

strategy for the organisational management and internal control systems including their anti-fraud strategy as last updated and an indication of measures to prevent recurrence of cases of conflict of interest, irregularities and fraud, in particular where weaknesses, reported under Article 48 or paragraph 6 of Article 78, have led to critical recommendations.

The strategies referred to in the first subparagraph shall be assessed annually and updated as necessary.

The single programming document shall be drawn up taking into account guidelines set by the Commission.

2.   The multiannual work programme shall set out the overall strategic programming for the years N + 1 to N + 3, including the objectives, expected results and performance indicators to monitor the achievement of the objectives and the results.

This overall strategic programming shall also show, per activity, the indicative financial and human resources considered necessary to attain the objectives set and shall also demonstrate the contribution of the Union body to the achievement of the EU political priorities.

This strategic programming will be updated where appropriate, and in particular, to address the outcome of the overall evaluations referred to in the constituent act.

3.   The annual work programme shall set out for the year N + 1:

(a)

the expected outputs that will contribute to the achievement of the objectives set in the overall strategic programming;

(b)

a description of the activities to be financed together with an indication of the amount of financial and human resources, showing the number of officials, temporary and contract staff as defined in the Staff Regulations, as well as Seconded National Experts.

It shall clearly indicate which tasks of the Union body have been added, changed or deleted in comparison with the adopted annual work programme of the previous financial year. Evaluation results shall be taken into account as evidence of the likely merits of an increase or decrease of the proposed budget of the Union body in comparison with its budget of the previous financial year.

The annual work programme shall be coherent with the multiannual programme referred to in paragraph 2.

Any substantial amendment to the annual work programme shall be adopted by the same procedure as the initial work programme, in accordance with the provisions of the constituent act.

The management board may delegate the power to make non-substantial amendments to the annual work programme to the authorising officer of the Union body.

4.   The estimate of revenue and expenditure of the Union body, supported by the general guidelines underlying that estimate, shall include:

(a)

an estimate of revenue broken down by Title; indicating fees and charges separately, where appropriate;

(b)

an estimate of expenditure (commitment and payment appropriations), broken down by expenditure Title and Chapter;

(c)

quarterly estimate of cash payments and receipts;

(d)

an establishment plan setting the number of permanent and temporary posts by grade and by function group authorised within the limits of the budget appropriations requested for year N + 1. Where there is a change in the number of establishment plan posts requested for year N + 1, a statement justifying the request for new posts shall be provided;

The same information shall be provided on the number of contract staff and seconded national experts and shall be expressed in full-time equivalents.

5.   The resources programming shall include qualitative and quantitative information on the human resource and budgetary matters for the reporting purposes, in particular:

(a)

an estimate of the budget result from the year N – 1 as referred to in Article 17;

(b)

information on contribution in kind granted by the host Member State to the Union body for year N – 1;

(c)

information on the number of officials, temporary and contract staff as defined in the Staff Regulations as well as seconded experts for year N – 1 and for year N.

(d)

information on the achievement of all previously set objectives for the various activities for year N – 1, showing the actual use of the human and financial resources by the end of year split between activities.

The resource programming document shall be updated annually.

6.   Information on the building policy of the Union body shall include:

(a)

for each building, including of offices away from the main seat, the expenditure and surface area covered by the appropriations of the corresponding lines in the budget of the Union body;

(b)

the expected evolution of the global programming of surface area and premises for the coming years with a description of the building projects in planning phase which are already identified;

(c)

the final terms and costs, as well as relevant information regarding project implementation of new building projects previously submitted to the European Parliament and the Council under the procedure established in Article 266 of Regulation (EU, Euratom) 2018/1046 and not included in the preceding year's working documents.

7.   The Commission shall send its opinion on the draft Single Programming Document to the Union body in a timely manner in any case not later than 1st July of the year N.

If the Union body does not fully take into account the Commission's opinion, it shall provide the Commission with adequate explanations.

8.   The final single programming document shall be adopted by the management board.

9.   The Union body shall send any later updated version of the single programming document, notably to reflect the Commission's opinion and the outcome of the annual budgetary procedure, to the Commission, the European Parliament and the Council.

Article 33 Establishment of the budget

1.   The budget of the Union body shall be established in accordance with the provisions of the constituent act.

2.   As part of the procedure for adoption of the budget, the Commission shall send the Union body's statement of estimates to the European Parliament and the Council and propose the amount of the contribution for the Union body and the number of staff it considers the Union body needs.

The Commission shall provide the draft establishment plan of the Union bodies and an estimate of the number of contract staff and of seconded national experts expressed in full-time equivalents for which appropriations are proposed as soon as the Commission has established the draft budget.

3.   The European Parliament and the Council shall adopt the establishment plan of the Union body and any subsequent amendments thereto, in accordance with Article 34.

4.   After adoption of the draft budget by the Commission, the single programming document shall be adopted by the management board. It shall become definitive after final adoption of the Union budget setting the amount of the contribution and the establishment plan. If necessary the budget of the Union body and its establishment plan shall be adjusted accordingly.

5.   When proposing to entrust new tasks to a Union Body, the Commission shall, without prejudice to the legislative procedures for the modification of the constituent act, submit to the European Parliament and to the Council the necessary information to assess the impact of the new tasks on the resources of the Union body so as to review, where necessary, its financing and its staffing level.

Article 34 Amending budgets

Any amendment to the budget of the Union body, including to the establishment plan, beyond the modifications authorized under Articles 26(1) and 38(1) of this Regulation, shall be the subject of an amending budget adopted by the same procedure as the initial budget of the Union body, in accordance with the provisions of the constituent act and Article 32 of this Regulation.

Amending budgets shall be accompanied by statements of reasons and the information on the implementation of the budget for the preceding and current financial years available at the time of their establishment.

Article 35 Structure of the budget of the Union body

The budget of the Union body shall consist of a statement of revenue and a statement of expenditure.

Article 36 Budget nomenclature

As far as it is justified by the nature of the Union body's activities, the statement of expenditure must be set out on the basis of a nomenclature with a classification by purpose. That nomenclature shall be determined by the Union body and shall make a clear distinction between administrative appropriations and operational appropriations.

The budget nomenclature shall comply with the principles of specification, sound financial management and transparency. It shall provide the clarity and transparency necessary for the budgetary process, facilitating the identification of the main objectives as reflected in the relevant legal bases, making choices on political priorities possible and enabling efficient and effective implementation.

Article 37 Presentation of the budget of the Union body

The budget of the Union body shall show:

(a)

in the statement of revenue:

(i)

the estimated revenue of the Union body for the financial year concerned (‘year N’);

(ii)

the estimated revenue for the preceding financial year and the revenue for year N – 2;

(iii)

appropriate remarks on each revenue line.

(b)

in the statement of expenditure:

(i)

the commitment and payment appropriations for year N;

(ii)

the commitment and payment appropriations for the preceding financial year, and the expenditure committed and the expenditure paid in year N – 2 — the latter also expressed as a percentage of the budget of the Union body of year N;

(iii)

a summary statement of the schedule of payments due in subsequent financial years to meet budget commitments entered into in earlier financial years;

(iv)

appropriate remarks on each subdivision.

Article 38 Rules on the establishment plans for staff

1.   The establishment plan referred to in Article 32(4) shall show next to the number of posts authorised for the financial year, the number authorised for the preceding year and the number of posts actually filled. It shall constitute an absolute limit for the Union body. No appointment may be made in excess of the limit set.

However, save in the case of grades AD 16, AD 15, AD 14 and AD 13, the management board may modify the establishment plan by up to 10 % of posts authorised, subject to the following conditions:

(a)

the volume of staff appropriations corresponding to a full financial year is not affected;

(b)

the limit of the total number of posts authorised by the establishment plan is not exceeded;

(c)

the Union body has taken part in a benchmarking exercise with other Union bodies as initiated by the Commission's staff screening exercise.

2.   By derogation from the second subparagraph of paragraph 1, the effects of part-time work authorised by the appointing authority in accordance with the Staff Regulations may be offset by other appointments. Where a staff member requests the withdrawal of the authorisation before expiry of the granted period, the Union body shall take appropriate measures to respect the limit referred to in point (b) of the second subparagraph of paragraph 1 as soon as possible.

Article 39 Budget implementation in accordance with the principle of sound financial management

1.   The director shall perform the duties of authorising officer. He or she shall implement the revenue and expenditure of the budget in accordance with the financial rules of the Union body and the principle of sound financial management under his or her own responsibility and within the limits of the appropriations authorised.

2.   Without prejudice to the responsibilities of the authorising officer as regards prevention and detection of fraud and irregularities, the Union body shall participate in fraud prevention activities of the European Anti-fraud Office.

Article 40 Information on transfers of personal data for audit purposes

In any call made in the context of grants, procurement or prizes implemented in direct implementation, potential beneficiaries, candidates, tenderers and participants shall, in accordance with Regulation (EU) 2018/1725 be informed that, for the purposes of safeguarding the financial interests of the Union, their personal data may be transferred to internal audit services, to the European Court of Auditors, or to the European Anti-Fraud Office and between authorising officers of the Union bodies, the Commission and the executive agencies.

Article 41 Delegation of budget implementation powers

1.   The director may delegate the powers of budget implementation to staff of the Union body covered by the Staff Regulations, in accordance with the conditions laid down in the financial rules of the Union body adopted by the management board. Those so empowered may act only within the limits of the powers expressly conferred upon them.

2.   The delegatee may subdelegate the powers received with the explicit agreement of the director.

Article 42 Conflict of interests

1.   Financial actors within the meaning of Chapter 3 of this Title and other persons, including the members of the Management Board, involved in budget implementation and management, including acts preparatory thereto, audit or control shall not take any action that may bring their own interests into conflict with those of the Union body. They shall also take appropriate measures to prevent a conflict of interest from arising in the functions under their responsibility and to address situations which may objectively be perceived as a conflict of interest.

Where there is a risk of a conflict of interest, the person in question shall refer the matter to the competent authority. The competent authority shall confirm in writing, whether a conflict of interest is found to exist. In that case, the competent authority shall ensure that the person concerned ceases all activities in the matter. The competent authority shall take any further appropriate action.

2.   For the purposes of paragraph 1, a conflict of interest exists where the impartial and objective exercise of the functions of a financial actor or other person, as referred to in paragraph 1, is compromised for reasons involving family, emotional life, political or national affinity, economic interest or any other direct or indirect personal interest.

3.   The competent authority referred to in paragraph 1 shall be the director. If the member of staff concerned is the director, the competent authority shall be the management board or, where the constituent act allows it, the executive board. In case of a conflict of interest involving a member of the management board, the competent authority shall be the management board, exclusive of the member concerned.

4.   The Union body shall adopt rules on the prevention and management of conflict of interests and shall publish annually on its website the declaration of interests of the management board members.

Article 43 Method of implementation of the budget of the Union body

1.   The budget of the Union body shall be implemented by the director in the departments placed under his or her authority.

2.   In order to facilitate the implementation of their appropriations, Union bodies may conclude service-level agreements as referred to in Article 59 of Regulation (EU, Euratom) 2018/1046.

3.   Technical expertise tasks and administrative, preparatory or ancillary tasks not involving the exercise of public authority or the use of discretionary powers of judgement may be entrusted by contract to external private-sector entities, where this proves to be indispensable.

Article 44 Segregation of duties

The duties of authorising officer and accounting officer shall be segregated and mutually exclusive.

The Union body shall provide each financial actor with the resources required to perform his or her duties and a charter describing in detail his or her tasks, rights and obligations.

Article 45 Powers and duties of authorising officer

1.   The authorising officer shall be responsible for implementing revenue and expenditure in accordance with the principle of sound financial management, including through ensuring reporting on performance and for ensuring compliance with the requirements of legality and regularity and equal treatment of recipients of Union funds.

2.   The authorising officer shall put in place the organisational structure and the internal control systems suited to the performance of the duties of authorising officer, in accordance with the minimum standards or principles adopted by the management board or, where the constituent act allows it, by the executive board, on the basis of the Internal Control Framework laid down by the Commission for its own departments and having due regard to the risks associated with the management environment, including where applicable specific risks associated to decentralized offices, and the nature of the actions financed.

The establishment of such structure and systems shall be supported by a comprehensive risk analysis, which takes into account their cost-effectiveness and performance considerations.

The authorising officer may establish within his or her departments an expertise and advice function to help him or her control the risks involved in his or her activities.

3.   To implement expenditure, the authorising officer shall make budgetary and legal commitments, shall validate expenditure and authorise payments and shall undertake the preliminary steps for the implementation of appropriations.

4.   To implement revenue, the authorising officer shall draw up estimates of amounts receivable, establish entitlements to be recovered and issue recovery orders. Where appropriate, the authorising officer shall waive established entitlements.

5.   In order to prevent errors and irregularities before the authorization of operations and to mitigate risks of non-achievement of objectives, each operation shall be subject at least to an ex ante control relating to the operational and financial aspects of the operation, on the basis of a control strategy which takes risk and cost-effectiveness into account.

The extent in terms of frequency and intensity of the ex ante controls shall be determined by the authorising officer taking into account the results of prior controls as well as risk-based and cost-effectiveness considerations, on the basis of his or her own risk analysis. In case of doubt, the authorising officer responsible for validating the relevant operations shall, as part of the ex ante control, request complementary information or perform an on-the-spot control in order to obtain reasonable assurance.

6.   For the purpose of controls, a series of similar individual transactions relating to routine expenditure on salaries, pensions, reimbursement of mission expenses and medical expenses may be considered by the authorising officer to constitute a single operation.

7.   For a given operation, the verification shall be carried out by staff other than those who initiated the operation. The staff who carry out the verification shall not be subordinate to the members of staff who initiated the operation.

8.   The authorising officer may put in place ex post controls to detect and correct errors and irregularities of operations after they have been authorized. Such controls may be organised on a sample basis according to risk and shall take account of the results of prior controls as well as cost-effectiveness and performance considerations.

9.   The ex post controls shall be carried out by staff other than those responsible for the ex ante controls. The staff responsible for the ex post controls shall not be subordinate to the members of staff responsible for the ex ante controls.

The ex post controls may take the form of financial audits at the premises of the beneficiaries.

The rules and modalities, including timeframes, for carrying out audits of the beneficiaries shall be clear, consistent and transparent, and shall be made available when signing the grant agreement.

10.   Authorising officers and staff responsible for budget implementation shall have the necessary professional skills. They shall respect a specific code of professional standards adopted by the Union body and based on standards laid down by the Commission for its own departments.

11.   If a member of staff, involved in the financial management and control of transactions, considers that a decision he or she is required by his or her superior to apply or to agree to is irregular or contrary to the principles of sound financial management or the professional rules which that member of staff is required to observe, he or she shall inform the director who shall, if the information is given in writing, reply in writing. If the director fails to take action within a reasonable time given the circumstances of the case and in any event within a month or confirms the initial decision or instruction and the member of staff believes that such confirmation does not constitute a reasonable response to his or her concern, the member of staff shall inform the relevant panel referred to in Article 143 of Regulation (EU, Euratom) 2018/1046 and the management board in writing.

12.   In the event of any illegal activity, fraud or corruption which may harm the interests of the Union, a member of staff or other servant, including national experts seconded to the Union body, shall inform their immediate superior, the director or the management board of the Union body or the European Anti-Fraud Office or the European Public Prosecutor's Office directly. Contracts with external auditors carrying out audits of the financial management of the Union body shall provide for an obligation of the external auditor to inform the director or, if the latter may be involved, the management board of any suspected illegal activity, fraud or corruption that may harm the interests of the Union.

Article 46 Delegation of budget implementation

Where powers of budget implementation are delegated or subdelegated in accordance with Article 41, the relevant provisions of Article 45 shall apply mutatis mutandis to the authorising officers by delegation or subdelegation.

Article 47 Keeping of supporting documents by authorizing officers

1.   The authorising officer shall set up paper-based or electronic systems for the keeping of original supporting documents relating to budget implementation. Such documents shall be kept for at least five years from the date on which the European Parliament grants discharge for the financial year to which the documents relate.

2.   Documents relating to operations not definitively closed shall be kept for longer than provided for in paragraph 1, namely until the end of the year following that in which the operations are closed.

3.   Personal data contained in supporting documents shall, where possible, be deleted when those data are not necessary for budgetary discharge, control and audit purposes. Article 88 of Regulation (EU) 2018/1725 shall apply to the conservation of data.

Article 48 Consolidated Annual Activity Report

1.   The authorising officer shall report to the management board on the performance of his or her duties in a form of a consolidated annual activity report containing:

(a)

information on:

(i)

the achievement of the objectives and results set in the Single Programming Document referred to in Article 32 through the reporting on the set of Performance Indicators;

(ii)

the action plan to follow-up on the conclusions of the evaluations referred to in paragraph 3 of Article 29 and the report on its progress in accordance with Article 29(4);

(iii)

the implementation of the body's annual work programme, budget and staff resources referred to in Article 32(5)(c);

(iv)

the contribution of the Union body to the achievement of the Union political priorities;

(v)

organisational management and on the efficiency and effectiveness of the internal control systems including the implementation of the body's anti-fraud strategy, the summary of number and type of internal audits carried out by the internal auditor, the internal audit capabilities, the recommendations made and the action taken on these recommendations and on the recommendations of previous years, as referred to in Articles 82 and 83;

(vi)

any observations of the Court of Auditors and the actions taken on these observations;

(vii)

the agreements referred to in Article 7;

(viii)

the service-level agreements referred to in Article 43;

(ix)

the acts of delegation and subdelegation referred to in Article 41.

(b)

a declaration of the authorising officer stating whether he or she has a reasonable assurance that unless otherwise specified in any reservations related to defined areas of revenue and expenditure:

(i)

the information contained in the report presents a true and fair view;

(ii)

the resources assigned to the activities described in the report have been used for their intended purpose and in accordance with the principle of sound financial management;

(iii)

the control procedures put in place give the necessary guarantees concerning the legality and regularity of the underlying transactions.

The consolidated annual activity report shall indicate the results of the operations by reference to the objectives set and performance considerations, the risks associated with the operations, the use made of the resources provided and the efficiency and effectiveness of the internal control systems, including an overall assessment of the costs and benefits of controls.

The consolidated annual report shall be submitted to the management board for the assessment.

2.   No later than 1 July each year the consolidated annual activity report together with its assessment shall be sent by the management board to the Court of Auditors, to the Commission, to the European Parliament and the Council.

3.   Additional reporting requirements may be provided in the constituent act in duly justified cases, in particular when it is required by the nature of the field in which the body operates.

Article 49 Powers and duties of the accounting officer

The management board shall appoint an accounting officer who shall be responsible in the Union body for:

(a)

properly implementing payments, collecting revenue and recovering amounts established as being receivable;

(b)

preparing and presenting the accounts in accordance with Title X;

(c)

keeping the accounts in accordance with Title X;

(d)

implementing the accounting rules and the chart of accounts in accordance with the provisions adopted by the Commission's accounting officer;

(e)

laying down and validating the accounting systems and, where appropriate, validating systems laid down by the authorising officer to supply or justify accounting information;

(f)

treasury management.

With respect to the tasks referred to in point (e) of the first subparagraph, the accounting officer shall be empowered to verify at any time compliance with the validation criteria.

Article 50 Appointment and termination of duties of the accounting officer

1.   The management board shall appoint an accounting officer, covered by the Staff Regulations, who shall be completely independent in the performance of his or her duties. The accounting officer shall be chosen by the management board on the grounds of his or her particular competence as evidenced by diplomas or by equivalent professional experience.

2.   Two or more Union bodies may appoint the same accounting officer. In such case, they shall make the necessary arrangements in order to avoid any conflict of interest.

Union bodies may also agree with the Commission that the accounting officer of the Commission shall also act as accounting officer of the Union body.

Union bodies may also entrust the accounting officer of the Commission with part of the tasks of an accounting officer of the Union body, taking into account the cost-benefit analysis referred to in Article 28.

3.   A trial balance shall be drawn up without delay in the event of termination of the duties of the accounting officer.

The trial balance accompanied by a hand-over report shall be transmitted by the accounting officer who is terminating his or her duties or, if it is not possible, by a member of staff in his or her department to the new accounting officer.

The new accounting officer shall sign the trial balance in acceptance within one month from the date of transmission and he or she may make reservations.

The hand-over report shall also contain the result of the trial balance and any reservations made.