Report on budgetary and financial management. ENISA - Financial Year 2013 Version May

Transcription

1 Report on budgetary and financial management ENISA - Financial Year 2013 Version May

2 Table of Contents 1. Introduction 3 2. Finance and Accounting functions 3 3. Budgetary principles 3 4. Budget Union contribution 2013 C1 funds... 5 Initial Budget 2013 of ENISA (appropriations MFF )... 5 Establishment of an operational office in Athens... 5 Additional budget request for Athens office Budget execution... 7 Budget execution of Initial Budget 2013 of ENISA (appropriations MFF )... 7 Budget execution of additional funds received in 2013 for Athens office refurbishment works Revenue of the Agency Amending Budgets / Budgetary Transfers Payments executed Carry forward and carry-over of commitment appropriations Analysis of Budgetary Management by Type of Expenditure Page 2

3 1. Introduction The present report is drawn on the basis of Article 93 of the Financial Regulation of ENISA, adopted by its Management Board on 07 February , in conformity with the Commission Delegated Regulation (EU) No 1271/2013 of 30 September 2013 on the framework financial regulation for the bodies referred to in Article 208 of Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council. 2. Finance and Accounting functions The Finance and Accounting functions are assumed by the Finance, Accounting & Procurement Section within the Administration & Support Department of ENISA. The key objectives of Finance, Accounting & Procurement Section are the following: Ensure that the Budgetary and Financial Reporting Management systems perform properly Execute the budget of the Agency and monitor its financial performance Ensure compliance of financial transactions and procurement procedures to the Financial Regulation of ENISA and the relevant applicable regulations, rules and guidelines Provide horizontal support to the Core Operations Department of the Agency regarding financial and procurement matters Provide relevant and reliable information to the users of the Financial Statements 3. Budgetary principles The establishment and implementation of ENISA Budget are governed by the following basic principles, as stipulated in Title II of its Financial Regulation (hereinafter ENISA FR ): (a) Unity and Budget Accuracy (Art 6-9 ENISA FR): All expenditure and revenue must be incorporated in a single budget document, must be booked on a budget line and expenditure must not exceed authorised appropriations; 1 Management Board Decision No MB/2014/1 WP of 07 February Page 3

4 (b) Annuality (Art ENISA FR):: The appropriations entered in the budget of the Agency are authorised for one financial year, running from 01 January to 31 December; (c) Equilibrium (Art ENISA FR): The revenue and expenditure shown in the budget must be in balance (estimated revenue must equal payment appropriations); (d) Unit of account (Art 21 ENISA FR): The budget is drawn up and implemented in euro and the accounts are presented in euro; (e) Universality (Art ENISA FR): This principle comprises two rules: the rule of non-assignment, meaning that budget revenue must not be earmarked for specific items of expenditure (total revenue must cover total expenditure); the gross budget rule, meaning that revenue and expenditure are entered in full in the budget without any adjustment against each other; (f) Specification (Art ENISA FR): Each appropriation is assigned to a specific purpose and a specific objective; (g) Sound Financial Management (Art ENISA FR): Budget appropriations are used in accordance with the principle of sound financial management, namely in accordance with the principles of economy, efficiency and effectiveness; (h) Transparency (Art 31 ENISA FR): The budget is established and implemented and the accounts presented in compliance with the principle of transparency - the budget and amending budgets are published in the Official Journal of the European Union. Page 4

5 4. Budget The budget of the Agency includes revenue and expenditure appropriations. Revenues of the Agency consist of the contribution from the Union budget, voluntary contributions of Member States, assigned revenue, and contributions from third countries participating to the work of the Agency. The expenditure appropriations are distributed in three Titles. Title 1 covers staff expenditure such as salaries, training and costs associated to recruitment procedures and staff welfare. Title 2 covers the costs associated to the functioning of the Agency such as running costs, infrastructure, equipment and IT costs. Title 3 corresponds to the Agency s operational activities Union contribution 2013 C1 funds Initial Budget 2013 of ENISA (appropriations MFF ) The Budget of ENISA for 2013 was ,00 EUR, as adopted by the Management Board of ENISA and approved by the Budgetary Authority in 2012, including an amount of ,00 EUR as part of the EFTA countries contribution to the EU Budget. The appropriations of 2013 were in line with the Multi annual Financial Framework of the Union (MFF) An amount of ,00 EUR was put, on Commission s proposal, in the reserve of the European Union Budget 2013, dependent on the adoption of a new Regulation on ENISA. The reserve was released after the entry into force of the Regulation (EU) No 526/2013 of the Parliament and the Council of 21 May 2013, establishing the European Union Agency for Network and Information Security and repealing Regulation (EC) 460/2004. Establishment of an operational office in Athens The European Parliament ITRE Committee adopted amendments in the Commission s proposal 2 for a Regulation of the EP and the Council on the European Network and Information Security Agency on 6 February The paragraph 3a of the Article 22 was amended as follows: 3a. The Agency shall have its seat in Greece. It shall have its headquarters in Heraklion, Crete. Staff engaged in the operational implementation of the Agency's mandate shall be based in a branch office located in Athens. In this regard, the Hellenic Ministry of Development, Competitiveness, Infrastructure, Transport and Networks sent a Verbal Note on 26 September 2012, informing the Agency of its intention to make available to ENISA an appropriate office space in the metropolitan Athens area, to serve as a branch office of ENISA and host the operational department of the Agency. This offer, 2 COM(2010)0521 C7-0302/ /0275(COD) 3 Page 5

6 accepted by ENISA on the same date, was in line with the findings of an EP (ITRE) report 4 titled: The role of ENISA in contributing to a coherent and enhanced structure of network and information security in the EU and internationally. The Hellenic Ministry of Development, Competitiveness, Infrastructure, Transport and Networks offered to cover the annual rental cost of the new office in Athens in full, by contributing to ENISA budget the relevant amount. The contribution of the Hellenic Republic, which covers the annual rent of ENISA premises in Heraklion and Athens, is included in ENISA annual budget as external assigned revenue ( R0 appropriations ). The lease contract for the new office in Marousi, Athens, was signed on 25 January The building was made available to ENISA on 01 February 2013 in order to start preparatory works with a view to moving in staff and equipment. The final removal of staff and equipment took place on 28 February 2013 and the office was operational as of 01 March Article 26(4) of Regulation (EU) No 526/2013 of the Parliament and the Council of 21 May 2013, establishing the European Union Agency for Network and Information Security and repealing Regulation (EC) 460/2004, provides that: A branch office established in the metropolitan area of Athens shall be maintained in order to improve the operational efficiency of the Agency. Additional budget request for Athens office The new building in Marousi, Athens, was leased in order to host the Core Operations Department of the Agency, and therefore needed to provide for adequate office space as well as meeting, reception, catering and archiving facilities. The Agency identified certain needs for upgrading offered facilities and infrastructure, which would be addressed with a building refurbishment project. The planned refurbishment would contribute to the adjustment of the building to the actual needs of the Department hosted. ENISA requested to the Budgetary Authority an additional amount of ,00 EUR to fund the refurbishment of its new office in Athens (building / works project) following the adoption of an Amending Budget 01/2013 by ENISA Management Board on 21 March The request of ENISA was processed by the Commission and the Budgetary Authority services and the requested amount was made available to ENISA by the Commission on 04 November Thereafter ENISA had to launch a call for tenders for the new office refurbishment project and award a contract, which was according to the Financial Regulation and applicable procurement rules impossible to be concluded by the 31 December IP/A/ITRE/ST/ , Recommendation no 9, page 75. Page 6

7 4.2. Budget execution Budget execution of Initial Budget 2013 of ENISA (appropriations MFF ) In terms of budget execution, the expenditure appropriations corresponding to the Union contribution allocated to ENISA within the Multiannual Financial Framework (MFF) , i.e. the initial Budget of ENISA of ,00 EUR, were committed at a rate of 99,72% on 31/12/2013 compared to 100% on 31/12/2012, as shown in Table 1 below. The remaining commitment appropriations, i.e. 0.28% of initial budget which was not committed by 31/12/2013, were not cancelled, but carried over to 2014 (non-automatic carry over), as explained below for an investment in IT infrastructure in Athens office, topping up the non-automatic carry-over of the additional funds received for Athens office refurbishment. The overall performance demonstrates the capacity of the Agency to efficiently use the entrusted funds, in order to implement its annual Work Programme as well as manage its administrative expenditure and investments. The respective payment rate on initial expenditure appropriations as included in the MFF was 91,32% in 2013 compared to 91,45% in 2012, which demonstrates that the capacity of the Agency to finalise its annual activities as well as execute the relevant payments within the year of reference was maintained. The procurement planning which was moved forward to the end of the preceding year (2012) and enabled the launch of projects related to the Work Programme in early 2013, highly contributed to the improvement of the payment rate of appropriations of the year (C1). Budget execution of additional funds received in 2013 for Athens office refurbishment works In addition to the MFF contribution, ENISA was granted the amount of EUR late in 2013, which resulted in the funds being carried over to 2014 for commitment (nonautomatic carry over). The rate of commitment of total appropriations received in 2013 from Union contribution, i.e ,00 EUR was 94,41% on 31/12/2013, while the remaining amount (i.e ,00 EUR or 5,59 %), related to the refurbishment works and infrastructure investments in the new office in Marousi, Athens, was carried over to 2014 by decision MB/2014/02 WP of the Management Board adopted on 07 February Following a call for tenders for the refurbishment works, which concluded to the award of a contract, and the signature of another contract for upgrading internet connectivity infrastructure (Dark Fibre), ENISA finally committed ,00 EUR, and the total amount of Budget 2013 which Page 7

8 remained uncommitted and should therefore be cancelled was EUR, representing 0,01% of the total Budget The table below demonstrates a detailed analysis of the commitments and payments made in 2013, including the appropriations carried over by decision of the Management Board for the refurbishment works. Table 1 Analysis of Union contribution appropriations (C1 funds) execution Appropriations MFF Additional appropriations Amending Budget 1/2013 Total Appropriations - EU Budget subsidy , , , ,00 Commitments on C1 appropriations at 31 December , ,00 0, ,00 % on appropriations 100,00% 99,72% 0,00% 94,41% Payments at 31 December , ,79 0, ,79 % on appropriations 91,45% 91,32% 0,00% 86,46% Budget Carried Forward (automatic) to following year , ,21 0, ,21 % on appropriations 8,55% 8,40% 0,00% 7,95% Budget Carried Over (nonautomatic) 0, , , ,00 % on appropriations 0,00% 0,28% 100,00% 5,59% Commitments on nonautomatic Carry Over (made between 01 January and 31 March 2014) 0, , , ,00 % on appropriations 0,00% 100,00% 99,77% 99,78% Final total Commitments on Budget , , ,00 % on appropriations 100,00% 99,77% 99,99% 5 Budget commitment validated and contract awarded for the refurbishment project for EUR on 17/03/2014. Budget commitment validated and contract awarded for upgraded internet connectivity (Dark Fibre) for EUR on 07/03/2014. Total amount committed in 2014 on amounts carried over from 2013, based on MB decision: EUR. Page 8

9 The adopted Amending Budget 01/2013 was ensuring the availability of funds in order to cover the additional needs occurred by the move to Athens and was requesting to the Budgetary Authority an additional amount of ,00 EUR to fund the refurbishment of its new office in Athens. - Staff expenditure (Title 1) was increased by ,00 to cover the statutory obligation of the Agency to the staff transferred to Athens, welling from the Staff Regulation, in the form of removal costs, installation allowances etc. - Building, Equipment and other operating expenditure (Title 2) was increased by ,00 EUR to cover the investments in infrastructure and services necessary for the smooth operation of Athens office. - Operating expenditure (Title 3) was decreased by ,00 EUR in order to ensure the availability of funds in Title 1 and Title 2 Following the adoption of the Amending Budget 01/2013, the Agency took all the necessary actions in terms of procurement planning in order to invest the additional funds timely and efficiently. As the decision of the budgetary authority regarding the allocation of additional funds would need time, the Agency had to proceed with a partial implementation of the Amending Budget 01/2013 in order to cover the statutory obligations of the Agency to the staff transferred to Athens and the most urgent and indispensable projects and running costs related with the operation of the Athens Building. On 04 of November 2013 the Agency was formally informed that its request for additional funds was approved. Immediately, all the necessary procurement procedures were launched in order to invest the funds to the respective projects as was approved by the Budgetary Authority. According to the Financial Regulation and the applicable procurement rules it was impossible, at such a late stage of the year, these projects to be concluded by the 31 December However, ENISA managed to complete the most of the preparatory stages of the commitment procedures before 31 December 2013 and to carry over the appropriations in Page 9

10 Table 2 Analysis of Carry Overs 2013 (relation to Athens office project) Appropriations MFF Final Budget Execution Automatic Non automatic Carry Over Total % on Final Budget % related to refurbish ment % not related to refurbish ment Title , , ,43 0, ,43 3,5% 0,0% 3,5% Title , , , , ,52 59,1% 50,5% 8,6% Title , , ,26 0, ,26 10,7% 0,0% 10,7% Budget , , , , ,21 13,5% 7,8% 5,8% For 2013, the total amount carried over to 2014 represents 13,5% of the final budget. However, it is important to distinguish the percentage of the appropriations that were carried over in order to cover the refurbishment works necessary to bring the new office of Athens to the appropriate operational condition. The analysis of Table 2 shows that the appropriations carried over related to the investments in infrastructure and works in Athens office represent the 50,5% of the total Title 2 appropriations, which is justifiable from the fact that the additional amount of EUR was made available on 4 November Therefore, the amount of carry overs not related to the above mentioned project is limited to 8,6% of Title 2 appropriations which is considered as regular. In order to compare the 2013 performance of the Agency regarding the rate of appropriations carried over with the one of past years it is important to take into account the net rate, after having excluded the portion of carry overs related to the Athens office project. The appropriations carried over in order to cover the traditional operational needs represent only 5,8% of the final appropriations in 2013, while respective percentage of the carry overs in 2012 was 8,5% of the total appropriations. The comparison of the two rates shows that the Agency demonstrates a capacity to decrease the amounts carried over and to finalise the projects within the same budgetary year. Page 10

11 External Assigned revenue R0 funds ENISA budget was further increased by ,00 EUR by means of Amending Budget 02/2013, adopted by the Management Board on 17 December 2013, in order to incorporate the rent contribution granted by the Greek Government to ENISA, for covering its premises lease requirements in Greece, in the revenue and expenditure appropriations of the Budget The amount was by nature classified as external assigned revenue, according to Art 23(2) of ENISA FR. It was granted to ENISA, by means of Decision of the Minister of Development, Transport and Networks, signed on 16 September 2013, in order to cover the annual rent payable for the premises of ENISA in its seat, Heraklion, as well as the office in Marousi, Athens, where the Core Operations Department of the Agency started its operations on 1 March Overall execution The execution of the budget was in line with the ENISA FR. Internal control systems, including exante verification of all transactions, have been properly applied by the Agency services in order to ensure sound financial management and adherence to the principles of efficiency and economy. ENISA has put into place appropriate financial management systems in order to manage all its revenue and expenditure Revenue of the Agency Revenues are funds made available to the Agency by different sources to cover administrative and operational expenditure for a year. The budget revenue and payment appropriations of the Agency should be in balance. Due to the fact that the Agency uses non-differentiated appropriations for both administrative and operational activities, the commitment and payment expenditure appropriations are also in balance. The table below outlines the breakdown of the revenue of 2013, including the Amending Budgets adopted: Page 11

12 Table Revenue EU subsidy - initial , EU subsidy Amending Budget 1/ , EU subsidy - total ,00 - EFTA countries contribution ,00 - Other contributions Greek Government Amending Budget 2/ ,00 - Administrative operations p.m. Total , Amending Budgets / Budgetary Transfers The following table summarises the Budget transfers and the Amending Budget (AB) 1/2013 effects on the initial Budget 2013: Table summary of transfers and AB 1/2013 effect Initial Budget Transfers Amending Budget 1/2013 Transfers Amending Budget 1/2013 New amount New Title ,70 0, ,00 0, ,70 Title ,00 0, , , ,00 Title ,30 0, ,00 0, ,30 Total ,00 0,00 0, , ,00 Page 12

13 The table below summarises the Budget transfers and the Amending Budget (AB) 2/2013 effect: Table summary of transfers and AB 2/2013 effect Budget (AB 1/2013) Transfers 3 to 8 Amending Budget 2/2013 Transfers Amending Budget 2/2013 New amount Transfer 9 New Title , ,43-283,69 0, , ,58 Title , , , , , ,40 Title , , ,21 0, , ,02 Total ,00 0,00 0, ,00 0, , Payments executed The table below outlines the breakdown of the payments made in 2013, broken down by source of funds. Payments on appropriations 2013 (C1 2012) ,79 Payments on appropriations carried forward from 2012 (C8 2012) Payments on appropriations related to external assigned revenue (R0 2013) , ,40 Total paid in ,73 Page 13

14 4.6. Carry forward and carry-over of commitment appropriations The commitment appropriations corresponding to the EU subsidy (C1 appropriations), which were not consumed by payments at the end of 2013, were either carried forward (automatic carry forward to C8 appropriations 2014) or carried-over by decision of the Management Board (nonautomatic carry-over to C3 appropriations 2014) to The carry-over was necessary in order to cover the cost of activities for which the contract was not signed before the 31 December 2013, due to the late availability of funds related to the new Athens office refurbishment project. The commitment appropriations corresponding to the subsidy from the Greek Government for the lease of ENISA premises in Greece (external assigned revenue R0 appropriations) which were not paid by 31 December 2013, are automatically carried over to 2014 (R0 appropriations). The funds carried forward or over to 2014, out of a total budget of ,00 EUR, are detailed below: Title Carried forward (to C8 2014) EU subsidy Carried over (to C3 2014) EU subsidy Carried over (to R0 2014) External Assigned Revenue Total carried forward/over to 2014 Title 1 Staff ,43 0,00 0, ,43 Title 2 Administration , , , ,12 Title 3 Operations ,26 0,00 0, ,26 Total carried forward from 2013 to , , , ,81 ENISA did not cancel any appropriations by the end of the year (cancellation rate 0,00%). However, an amount of EUR, or 0,01% of the Budget 2013, was cancelled following the award of the contract for the refurbishment works in Athens office, in March The total cancelled appropriations that were carried forward from 2012 to 2013 (C8 appropriations of 2013) but were not finally paid in 2013, was ,70 EUR (representing 7,93% of the total appropriations carried forward to 2013). Page 14

15 4.7. Analysis of Budgetary Management by Type of Expenditure Title 1: Expenditure relating to ENISA staff Chapter 11. Staff in active employment , , ,32 The establishment plan of ENISA for 2013 foresaw 47 Temporary Agent (TA) posts. The planned staffing of the Agency, as described in the European Union Budget 2013, included also 14 Contract Agent (CA) and 5 Seconded National Expert (SNE) posts. Out of these posts, 3 TA and 1 CA, which were new in 2013, were dependent on the adoption of the Regulation extending the mandate of ENISA beyond The new Regulation finally entered into force on 19 June 2013, therefore the posts became available to ENISA beyond that date. At year end, 45 Temporary Agent (TA) posts were occupied (including two recruitments of 2013 with date of entry in service of the appointed staff 16/01/2014 and 01/03/2014 respectively), and two TA posts were vacant. In addition to TA posts, 13 out of 14 Contract Agent (CA) and 3 out of 5 SNE authorised posts were occupied at the end of Chapter 12. Recruitment Expenditure , , ,99 This appropriation is to cover travel expenditures incurred for interviewing candidates, the travel expenses of staff (including members of their families) on taking up duties and at the end of contract, the installation allowances for staff obliged to change residence after taking up their duty, the removal costs of staff obliged to change residence after taking up duty, and the costs of daily subsistence allowances. In 2013, Core Operations Department staff was re-located to ENISA new operational office in Athens (as of 01 March 2013). Page 15

16 Chapter 13. Socio - medical services and training , , ,83 This appropriation is intended to cover the costs of annual medical inspections and of reviewing the health and safety at work conditions, and the costs of language and other training courses for the staff. Chapter 14. Temporary Assistance , , ,00 This appropriation is intended to cover the costs of the EC management costs, special assistance grants, other welfare expenditure, the costs of temporary assistance (interim services) and expenditure of contracting consultants for administrative purposes (e.g. legal advice). Title 2: Buildings, equipment and other administrative expenditure Chapter 20. Buildings and associated costs , , ,68 This appropriation is intended to cover rent, insurance, utilities, cleaning and up keeping services, the fitting-out of the premises and repairs in the building, and miscellaneous expenditure on buildings connected with security and safety, in particular contracts governing building surveillance. The largest part of the expenses is related to rent ( ,00 EUR from assigned revenue granted by the Greek Government) and the refurbishment of the new Athens office project ( ,00 EUR). This latter amount represents the difference between the Budget and the Commitment made which, as explained above, is due to the need for a non-automatic carry-over to 2014 in order to finalise the procedure leading to the award of a contract to the successful Page 16

17 bidder for the refurbishment project. The amount was committed before the 31 March 2014, except for EUR which was cancelled. As regards the rent subsidy granted by the Greek Government, the reimbursement of an amount of ,60 EUR by the Greek Government to ENISA and the subsequent payment of this amount to the beneficiary were pending on 31/12/2013, and actually executed on 24 March 2014, due to administrative delays not attributable to ENISA. The Agency executes payments to the lessors of its premises only after due reception of the respective funds by the Greek Government. Chapter 21. Movable Property and associated costs , , ,76 This appropriation is intended to cover expenditure of acquiring technical equipment, technical services, and maintenance and repairs of equipment. Equipment includes furniture, technical equipment and vehicles owned by the Agency, as well as books purchased to equip the library of the Agency. Chapter 22. Current Administrative expenditure , , ,39 This chapter covers stationary and office supplies, post, telecommunication and bank charges, damages, departmental removals and associated handling costs. Chapter 23. Information and Communication Technology , , ,77 This appropriation is intended to cover the costs of purchasing ICT hardware and software, the maintenance costs related to hardware and software, as well as consultancy costs. An amount of Page 17

18 24.934,00 EUR, which is the total difference between 2013 Budget and Commitments made, was carried-over by decision of the Management Board to 2014 and committed before 31 March 2014, for an investment in IT infrastructure in the new Athens office, for which investment it was not possible to award the contract to the selected successful bidder before 31 December 2013 for administrative reasons. Title 3: Operational activities Chapter 30. Activities related to meetings and missions , , ,89 The appropriation is intended to cover expenses dedicated to the activities related to Meetings (PSG, Working Groups, Management Board, Executive Director and other Operational Meetings), Staff missions, and Representation activities. Staff missions expenditure accounts for 68% of the total committed appropriations. Chapter 32. Horizontal Operational Activities , , ,80 This appropriation is intended to cover the cost of conferences and joint events, the communication plan of the Agency, the costs of publications, the costs of developing, hosting and maintaining the web site of the Agency, and the costs of translation services. Chapter 36. Core operational activities , , ,76 Page 18

19 This appropriation is intended to cover the costs of activities of the Corer Operations Department of the Agency, related to support of CERT operation and cooperation, as well as stakeholders collaboration activities, including cooperation of communities that deal with improving pan- European or international NIS. It is covering the costs of activities related to development of policies and practices, which will contribute to strengthening pan-european CIIP and Resilience, as well as the costs of activities related to development in the area of NIS Technology. Page 19

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21 ENISA European Union Agency for Network and Information Security Science and Technology Park of Crete (ITE) Vassilika Vouton, , Heraklion, Greece Athens Office 1 Vass Sofias & Meg. Alexandrou Marousi , Athens, Greece PO Box 1309, Heraklion, Greece Tel: info@enisa.europa.eu Page 21