Report on budgetary and financial management

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1 Report on budgetary and financial management FINANCIAL YEAR 2016 VERSION 1.0 INTERIM 31 MARCH European Union Agency For Network And Information Security

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3 About ENISA The European Union Agency for Network and Information Security (ENISA) is a centre of network and information security expertise for the EU, its member states, the private sector and Europe s citizens. ENISA works with these groups to develop advice and recommendations on good practice in information security. It assists EU member states in implementing relevant EU legislation and works to improve the resilience of Europe s critical information infrastructure and networks. ENISA seeks to enhance existing expertise in EU member states by supporting the development of cross-border communities committed to improving network and information security throughout the EU. More information about ENISA and its work can be found at Authors ENISA The European Union Agency for Network and Information Security Contact Please use ED@enisa.europa.eu 03

4 Table of Contents 1. Introduction 5 General Information 5 Finance and Accounting functions 5 Budgetary principles 5 2. Budget 7 Budget contributions 2016 C1 & R0 funds 7 Budget execution Budget execution of C1 funds Budget execution of R0 funds - External Assigned revenue Budget execution of appropriations carried forward from 2015 (C8) Overall execution Revenue of the Agency Amending Budget / Budgetary Transfers Payments executed Carry forward of commitment appropriations Analysis of Budgetary Management by Type of Expenditure 13 04

5 1. Introduction General Information 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. Finance and Accounting functions The Finance and Accounting functions are assumed by the Finance, Accounting & Procurement Unit within the Stakeholder Relations and Administration Department of ENISA. The key objectives of Finance, Accounting & Procurement Unit are the following: Ensure that the Budgetary and Financial Reporting Management systems are reliable and accurate. Monitor Agency s budget management in order to reach the expected economy, efficiency and effectiveness based on the established FR and benchmarking objectives referred by the Court of Auditors. Ensure compliance of financial transactions and procurement procedures to the Financial Regulation of ENISA and legal framework. Provide horizontal services to the Agency needs regarding financial, accounting and procurement matters. Provide relevant and reliable Financial Statements to relevant stakeholders. Budgetary principles The establishment and implementation of ENISA appropriations 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; 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; 1 Management Board Decision No MB/2014/1 WP of 07 February

6 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. 06

7 2. Budget The Agency s budget includes revenue and expenditure appropriations. Agency revenues consist of the contribution from the Union budget, voluntary contributions of Member States, assigned revenue, and contributions from EU third countries participating to the work of the Agency. The expenditure appropriations are distributed in three Titles. Title 1 covers staff expenditure such as, but not limited to, salaries, trainings, costs associated to recruitment procedures, staff welfare, etc. Title 2 covers the costs associated to the Agency s operations such as, but not limited to, running costs, infrastructure, equipment and IT costs. Title 3 corresponds to the Agency s direct operational activities. Budget contributions 2016 C1 & R0 funds The ENISA s initial Budget for 2016 was set to EUR , including the EFTA countries contributions, the rent subsidy received from Hellenic Authorities and administrative revenues. The ENISA s budget was amended in December 2016, by means of a Management Board Decision (Amending Budget 01/2016), in order to: i. Apply a decrease to the amount of revenue item 200 related to the contributions from Associated Countries due to the difference of EUR ,00 between the amount provisionally budgeted (EUR ,00) and the final amount (EUR ,00) which was cashed by ENISA. ii. iii. Apply a decrease to the amount of revenue item 300, Subsidy from the Ministry of Transports of Greece (external assigned revenue, R0 funds), due to the difference of EUR ,32 between the amount provisionally budgeted for (EUR ,00, equal to the maximum amount provided for in the decision of the Hellenic Authorities to finance the lease of ENISA premises), and the final amount of EUR ,68 that ENISA was bound to pay as an annual lease for its premises, according to the valid lease agreements for its offices. The decrease in the revenues of ENISA is directly linked to the rent expenditure, leading to a respective decrease of EUR ,32 in item 2000, Rent of buildings, on the Expenditure side of the Budget. Apply an increase of EUR ,48 in the revenue item 400, Administrative Operations. The final amount of revenue from Administrative Operations consists of: a. Interest received (EUR 913,48) from funds in banks, for the period between 01/01 and 01/10/2016 2, which according to Article 58 of the FR of ENISA, shall not be returned to the Union budget. 2 The interest which will be generated from the EU subsidy during the period 01/10 to 31/12/2016 (last quarter of the year) will be included in the Budget 2017, as it will only become known and available to ENISA on 04/01/

8 b. The amount of EUR ,00 received in 2016 on a cost recovery basis, for assisting the EU Agency BEREC Office in fulfilling its obligation under Articles 46 and 47 of its Financial Regulation, on execution of ex-post controls. c. The amount of EUR 3.750,00 received in 2016 on a cost recovery basis, for providing BEREC Office with back-up services for storing the BEREC Office electronic data. iv. Transfer from Title I to Title II the amount of EUR ,22 and from Title III to Title II the amount of EUR ,16, in order to facilitate the funding of Title II activities, which may not have been accounted for initially, but were deemed essential (e.g. Refurbishment of additional office in Athens, Software System for Stakeholders Relation Management and Events Managements). The refurbishment of additional office space in Athens is deemed essential in order to ensure proper working condition for the staff members who will joint ENISA Athens office. v. Demonstrate in a transparent view, in a separate column, the effect of the transfers authorised by the Executive Director (ED) during the year 2016, pursuant to Article 27(4) of the FR of ENISA, after the adoption of the Initial Budget 2016 by the Management Board. Following its amendment, the final budget of ENISA for the year 2016 was EUR , 16 EUR. Budget execution Budget execution of C1 funds In terms of budget execution, the expenditure appropriations corresponding to the Union contribution allocated to ENISA i.e. the Budget of ENISA of EUR ,48, were committed at a rate of 98,47% on 31/12/2016. Additionally, the Management Board approved the non-automatic carry-over of the remaining 1,53% for the refurbishment of additional office space in Athens. The non-automatic carry over added to the committed appropriations at year-end show that the appropriations of the year 2016 will be used at 100% rate. The high commitment rate shows the already proven capacity of the Agency to fully implement its annual appropriations. ENISA did not cancel any C1 appropriations by the end of the year (cancellation rate 0,00%). The overall performance demonstrates the already proven 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. The respective payment rate on EU subsidy funded expenditure appropriations was 89,18% in 2016 compared to 92,89% in 2015 and to 85,61% in 2014, 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 in a high rate. The procurement planning which was moved forward to the end of the preceding year (2015) and enabled the launch of projects related to the Work Programme in early 2016, highly contributed to the high payment rate of appropriations of the year (C1). 08

9 2.2.2 Budget execution of R0 funds - External Assigned revenue ENISA s budget contained the amount of ,68 EUR related to the rent subsidy granted by Hellenic Authorities to ENISA, for covering its premises lease requirements in Greece. The amount was registered in the revenue and expenditure appropriations of the Budget 2016, as external assigned revenue, according to Art 23(2) of ENISA FR. It was granted to ENISA, by means of Decisions of the Minister of Development, Transport and Networks, 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. The table below demonstrates a detailed analysis of the commitments and payments made in Table 1 Analysis of the appropriations (C1 & R0) execution Appropriations Appropriations Total Budget of ENISA From EU Budget subsidy (C1-Funds) From Hellenic Authorities subsidy (rent) (R0-Funds) 2016 Appropriations , , ,16 Commitments at 31 December ,48 * , ,27 % on appropriations 98,47% 91,67% 98,09% Payments at 31 December , , ,95 % on appropriations 89,18% 91,67% 89,32% *A part of the amount of the Hellenic Authorities Subsidy for the rent of the month of December 2016 (EUR ,42) was transferred to ENISA bank account only on when ENISA offices were closed due to Christmas Holidays, for that reason the respected amount was not inscribed in ABAC and was not committed. The remaining part of the Hellenic Authorities Subsidy for December 2016 (EUR 2.963,47) was transferred to ENISA Bank Account only on The amount of EUR ,89 was cashed, committed and paid in January Budget execution of appropriations carried forward from 2015 (C8) The appropriations carried forward from 2015 to 2016 were paid at a rate of 94,28% (93,95% in 2015), which shows that the carry forward was substantiated by legal commitments (contracts). Table 2 Analysis of the appropriations C8 execution Appropriations Carried forward from 2015 (C8 ) Appropriations - EU Budget subsidy ,54 Payments at 31 December ,61 % on appropriations carried forward 94,28% 09

10 2.2.4 Overall execution The execution of the budget was in line with the ENISA FR. Internal control systems, including ex-ante verification of 100% of the transactions as well as application of ex-post verification controls on a sample basis, based on a methodology established, have been properly applied by the Agency services in order to ensure sound financial management and compliance to the principles of efficiency, effectiveness and economy. ENISA has put into place appropriate financial management systems and controls 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 2016, including the Amending Budget adopted: Table Revenue EU subsidy - initial , EU subsidy AB 1/2016 0, EU subsidy - total ,00 - EFTA countries contribution ,00 - EFTA countries contribution AB 1/ , EFTA countries contribution - total ,00 - Other contributions Hellenic Authorities Initial Budget ,00 - Other contributions Hellenic Authorities AB 1/ ,32 Other contributions Hellenic Authorities Total ,68 - Administrative operations Initial Budget ,00 - Administrative operations - AB 1/ ,48 - Administrative operations - Total ,48 Total ,16 10

11 2.2.6 Amending Budget / Budgetary Transfers The following table summarises the Budget transfers and the Amending Budget (AB) 1/2016 effect on the initial Budget 2016: Table summary of transfers and AB 1/2016 effect Initial Budget Transfers Revenue Amending New 1-8 B2016 approved by ED appropriations' AB 01/2016 Budget 1/2016 Transfers Appropriations 2016 (AB 01/2016) Title , ,03 0, , ,75 Title , , , , ,00 Title , ,57 0, , ,41 Total ,00 0, ,84 0, ,16 The table below summarises the effect of the Budget transfer no 9 approved by the Executive Director after the adoption of the AB 01/2016 to the final budget execution: Table Summary of transfers effect on final budget execution New Appropriations 2016 (AB 01/2016) Transfers 9 B2016 approved by ED Final Budget Execution 2016 Title , , ,57 Title , , ,01 Title , ,58 Total ,16 0, ,16 11

12 2.2.7 Payments executed The table below outlines the breakdown of the payments made in 2016, broken down by source of funds. Payments on appropriations 2016 (C1 2016) ,16 Payments on internal assigned revenue (C4 2016) 2.237,99 Payments on internal assigned revenue carried over (C8 2016) 3.127,28 Payments on appropriations carried forward from 2015 (C8 2016) ,33 Payments on external assigned revenue (R0 2016) ,79 Total paid in , Carry forward of commitment appropriations The commitment appropriations corresponding to the EU subsidy (C1 appropriations), which were not consumed by payments at the end of 2016, were carried forward (automatic carry forward to C8 appropriations 2017). The appropriations corresponding to the EU subsidy (C1 appropriations), which were not committed by the end of 2016, were carried over (non-automatic carry over to C3 appropriations in 2017). The commitment appropriations corresponding to the subsidy from the Hellenic Authorities Government for the lease of ENISA premises in Greece (external assigned revenue R0 appropriations) which were not paid by 31 December 2016, were carried forward (automatic carry forward to R0 appropriations 2017). The funds carried forward to 2017, out of a total budget of EUR ,16 (C1 & C3 & R0), are detailed below: Title Carried forward Carried Over Carried Forward Total carried over (C to C8 2017) (C to C3 (R to R0 2017) to 2017 EU subsidy 2017) Subsidy from Hellenic EU subsidy Authorities Title 1 Staff ,17 0,00 0, ,17 Title 2 Administration Title 3 Operations , , , , ,77 0,00 0, ,77 12

13 Total carried , , , ,21 forward from 2016 to 2017 The total cancelled appropriations carried forward from 2015 to 2016 (C8 appropriations of 2016) but finally not paid in 2016, was EUR , Analysis of Budgetary Management by Type of Expenditure Title 1: Expenditure relating to ENISA staff Chapter 11. Staff in active employment , , ,92 The ENISA s establishment plan for 2016 foresaw 48 Temporary Agent (TA) posts. The planned staffing of the Agency, as described in the European Union Budget 2016, included also, external staff, 33 Contract Agent (CA) and 3 Seconded National Expert (SNE) posts. At year end, 31/12/2016, 44 Temporary Agent (TA) posts were occupied and four TA posts were vacant. In addition, 24 out of 33 Contract Agent (CA) and 1 out of 3 SNE authorised posts were occupied at the end of Chapter Budget Recruitment Expenditure 2016 Commitments 2016 Payments , , ,05 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. 13

14 Chapter 13. Socio - medical services and training , , ,89 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 staff training. Chapter 14. Temporary Assistance , , ,54 This appropriation is intended to cover the costs of the EC management costs, other welfare expenditure, schooling & education expenditure, the costs of temporary assistance in order to replace statutory and external staff on exceptional circumstances (interim services and traineeships) and expenditure of contracting consultants for administrative purposes (e.g. legal advice, improvement of working environment and internal procedures). Title 2: Buildings, equipment and other administrative expenditure Chapter 20. Buildings and associated costs , ,99 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 ( ,68 EUR from assigned revenue granted by the Hellenic Authorities) of the Athens office. Chapter 21. Movable Property and associated costs 14

15 81.448, , ,73 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 , , ,85 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 , , ,17 This appropriation is intended to cover the costs of purchasing hardware and software, the maintenance costs related to hardware and software, as well as consultancy costs. Title 3: Operational activities Chapter 30. Activities related to meetings and missions , , ,69 This appropriation is intended to cover expenses dedicated to the activities related to Meetings (Permanent Stakeholders Group, Working Groups, Management Board, Executive Board, Executive Director and other Operational Meetings), Staff missions, and Representation activities. Staff missions expenditure accounts for 83,42% of the total committed appropriations in chapter

16 Chapter 32. Horizontal Operational Activities , , ,36 This appropriation is intended to cover the cost of the communication plan of the Agency, the costs of publications, the costs of developing, hosting and maintaining the web site of the Agency and other Operational IT applications, and the costs of translation services. Additionally, this appropriation is intended to cover expenses dedicated to activities related to events. Chapter 36. Core operational activities , , ,76 This appropriation is intended to cover the costs of activities of the Operations of the Agency, related to the strategic objective to: - develop and maintain a high level of expertise of EU actors, taking into account evolutions in network and information security by improving the expertise related to critical information infrastructure, improving the expertise on Network and Information Security (NIS) threats, developing expertise related to NIS in research & development (R&D) and innovation. - assist the Member States and the EU institutions and bodies in enhancing capacity building throughout the EU. -assist the Member states and the EU institutions and bodies in developing and implementing the policies necessary to meet the legal and regulatory requirements of NIS. -enhance cooperation both between the Member States of the EU and between related NIS communities. 16

17 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

Report on budgetary and financial management

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