Annexes to the Annual Activity Report

Transcription

1 Ref. Ares(2017) /04/ Annexes to the Annual Activity Report Paymaster's Office (PMO)

2 Table of Contents ANNEX 1: STATEMENT OF THE HEAD OF UNIT RESPONSIBLE FOR RESOURCES... 3 ANNEX 2: REPORTING HUMAN RESOURCES, BETTER REGULATION, INFORMATION MANAGEMENT AND EXTERNAL COMMUNICATION... 4 ANNEX 3: DRAFT ANNUAL ACCOUNTS AND FINANCIAL REPORTS... 7 ANNEX 4: MATERIALITY CRITERIA ANNEX 5: INTERNAL CONTROL TEMPLATES FOR BUDGET IMPLEMENTATION (ICTS) ANNEX 10: SPECIFIC ANNEXES RELATED TO "FINANCIAL MANAGEMENT" ANNEX 12: PERFORMANCE TABLES... 49

3 ANNEX 1: Resources Statement of the Head of Unit responsible for I declare that in accordance with the Commission s communication on clarification of the responsibilities of the key actors in the domain of internal audit and internal control in the Commission 1, I have reported my advice and recommendations to the Director on the overall state of internal control in the Service. I hereby certify that the information provided in Section 2 of the present AAR and in its annexes is, to the best of my knowledge, accurate and complete. Brussels, date 27 April 2017 [signed] Jean-Pierre Vanderstraeten 1 Communication to the Commission: Clarification of the responsibilities of the key actors in the domain of internal audit and internal control in the Commission; SEC(2003)59 of Page 3 of 61

4 ANNEX 2: Reporting Human Resources, Better Regulation, Information Management and External Communication Human Resources Objective 1: The Office deploys effectively its resources in support of the delivery of the Commission's priorities and core business, has a competent and engaged workforce, which is driven by an effective and gender-balanced management and which can deploy its full potential within supportive and healthy working conditions. Indicator 1: Percentage of female representation in middle management Source of data: SEC(2015)336; Commission data (DG HR) Baseline (2015) Target (2020) Latest known results (2016) 37.5 % The PMO-specific target (30 %) already being achieved, the PMO aims to at least maintain the percentage of representation already achieved in % Indicator 2: Percentage of staff who feel that the Commission cares about their well-being Source of data: Commission staff survey 18 % 2014 Commission average (35 %) 24% Indicator 3: Staff engagement index Source of data: Commission staff survey 58 % 70 % 59% Objective 2: Recruit, train, assess, motivate and retain highly qualified staff and continue to develop, implement, monitor and adapt an effective internal communication strategy. Indicator 1: Implementation rate of "Optimisation of Working Conditions Action Plan" Baseline (2015) Target (2020) Latest known results (2016) N/A 100 % 95% 95% of the optimisation of working conditions action plan was implemented. The action plan will be updated in 2017 with new actions and targets to take into account the new ways of working currently implemented across the Commission in Human Resources domain, Communication Domain, Finance Domain and Logistic domain. Indicator 2: Ratio between vacancies published/vacancies filled (including vacancies without prior publication) 55 % > 80% 70% Indicator 3: Reduce rate of absenteeism: Following an IAS audit, the identification of a reference sickness absence rate (for PMO) and regular monitoring of these statistics were intended by end-2016, on the basis of input by DG HR and the delivery by DG HR of relevant data and tools. 1st semester Target to be determined in relation with the other offices and DG HR On hold due to Human Resources synergies Page 4 of 61

5 2015: 6.83% Main outputs in 2016: Quarterly follow-up of the absenteeism statistics and patterns and efficiencies 6.8% for the 6 first months and 6.9% for the entire year Recurrent problems with the IT tools during 2016 prevented PMO to get valid data before September The data was discussed in management meeting in October 2016 and problematic cases were discussed with the medical service and the head(s) of unit concerned. The follow up is ongoing. Identification of specific factors of influence for which DG HR will be asked to produce relevant data On hold due to Human Resources synergies and efficiencies Description Indicator Target Latest known results Description Indicator Target Result Increase the number of timely HR related information sessions for PMO staff Number of information sessions organised 4 sessions 7 sessions Reinforce PMO's management culture at all levels with particular attention on how to provide feedback, to deal with conflicts and underperformance and to ensure a respectful environment Assess training needs of all staff involved in management functions PMO management culture reinforced Improvement of managerial soft skills: first set of training provided on how to handle difficult conversations. Assessment of training needs ongoing. Mapping of all management training followed is done. Specific trainings on collaborative space and conflict management have been organised end 2016 to prepare staff to the open space. Improve conditions working % staff satisfaction with working environment Increase Progress report on the implementation of PMO's action plan "optimisation of working conditions" revealed good progress on all fronts. Next progress report scheduled for early The Brussels PMO services will move to another building early This move also implies a change in the way PMO works as the new setting will be in open plan. Careful attention is being paid to the material conditions of this move with full participation of staff and total transparency Page 5 of 61

6 as far as communication is concerned. Information management Objective: Information and knowledge in your Office is shared and reusable by other DGs. Important documents are registered, filed and retrievable Indicator 1: Percentage of registered documents that are not filed (ratio) Source of data: Hermes-Ares-Nomcom (HAN) statistics Baseline (2014) Target (2020) 0.04 % 0.05 % 0.06% Latest known results (2016) Indicator 2: Number of HAN files readable/accessible by all units in the Office Source of data: HAN statistics Due to the nature of PMO activities, close to 95 % of all HAN files contain personal data. Hence, the PMO only grants access to these sensitive documents on a 'need to know' basis. There are 3.56% HAN files readable/ accessible by all units in the Office. Indicator 3: Number of HAN files shared with other DGs Source of data: HAN statistics Due to the nature of PMO activities, close to 95 % of all HAN files contain personal data. Hence, the PMO only grants access to these sensitive documents on a 'need to know' basis. As a result, only 0.21% of HAN files are shared with other DGs. Communication External communication for the Office corresponds to communication for the staff in general (from the Commission, other Institutions, retirees, etc.). There is no communication to the EU citizens and as a result no indicator relating to the Eurobarometer metrics. Page 6 of 61

7 ANNEX 3: Draft annual accounts and financial reports AAR 2016 Version 2 Annex 3 Financial Reports - DG PMO - Financial Year 2016 Table 1 : Commitments Table 2 : Payments Table 3 : Commitments to be settled Table 4 : Balance Sheet Table 5 : Statement of Financial Performance Table 5 Bis: Off Balance Sheet Table 6 : Average Payment Times Table 7 : Income Table 8 : Recovery of undue Payments Table 9 : Ageing Balance of Recovery Orders Table 10 : Waivers of Recovery Orders Table 11 : Negotiated Procedures (excluding Building Contracts) Table 12 : Summary of Procedures (excluding Building Contracts) Table 13 : Building Contracts Table 14 : Contracts declared Secret Note : The figures are those related to the provisional Annex 3 Financial Reports - DG PMO accounts and not yet audited by the Court of Auditors Report printed on 16/03/2017 Page 7 of 61

8 TABLE 1: OUTTURN ON COMMITMENT APPROPRIATIONS IN 2016 (in Mio ) Commitment appropriations authorised Commitments made % 1 2 3=2/ Title 01 Economic and financial affairs Administrative expenditure of the 'Economic and financial affairs' policy area % Total Title % Title 02 Internal market, industry, entrepreneurship and SMEs Administrative expenditure of the 'Internal market, industry, entrepreneurship and SMEs' policy area % Total Title % Title 03 Competition Administrative expenditure of the 'Competition' policy area % Total Title % Title 04 Employment, social affairs and inclusion Administrative expenditure of the 'Employment, social affairs and inclusion' policy area % Total Title % Title 05 Agriculture and rural development Administrative expenditure of the 'Agriculture and rural development' policy area % Total Title % Title 06 Mobility and transport Administrative expenditure of the 'Mobility and transport' policy area % Total Title % Title 07 Environment Administrative expenditure of the 'Environment' policy area % Total Title % Title 08 Research and innovation Administrative expenditure of the 'Research and innovation' policy area % Total Title % Title 09 Communications networks, content and technology Administrative expenditure of the 'Communications networks, content and technology' policy area % Total Title % Title 11 Maritime affairs and fisheries Administrative expenditure of the 'Maritime affairs and fisheries' policy area % Total Title % Title 12 Financial stability, financial services and capital markets union Administrative expenditure of the 'Financial stability, financial services and capital markets union' policy % area Note : The figures are those related to the provisional Annex 3 Financial Reports - DG PMO accounts and not yet audited by the Court of Auditors Report printed on 16/03/2017 Page 8 of 61

9 TABLE 1: OUTTURN ON COMMITMENT APPROPRIATIONS IN 2016 (in Mio ) Commitment appropriations authorised Commitments made % 1 2 3=2/1 Total Title % Title 13 Regional and urban policy Administrative expenditure of the 'Regional and urban policy' policy area % Total Title % Title 14 Taxation and customs union Administrative expenditure of the 'Taxation and customs union' policy area % Total Title % Title 15 Education and culture Administrative expenditure of the 'Education and culture' policy area % Total Title % Title 16 Communication Administrative expenditure of the 'Communication' policy area % Total Title % Title 17 Health and food safety Administrative expenditure of the 'Health and food safety' policy area % Total Title % Title 18 Migration and home affairs Administrative expenditure of the 'Migration and home affairs' policy area % Total Title % Title 19 Foreign policy instruments Administrative expenditure of the 'Foreign policy instruments' policy area % Total Title % Title 20 Trade Administrative expenditure of the 'Trade' policy area % Total Title Title 21 International cooperation and development Administrative expenditure of the 'International cooperation and development' policy area Note : The figures are those related to the provisional Annex 3 Financial Reports - DG PMO accounts and not yet audited by the Court of Auditors Report printed on 16/03/ % % Total Title % Title 22 Neighbourhood and enlargement negotiations Administrative expenditure of the 'Neighbourhood and enlargement negotiations' policy area % Total Title % Title 23 Humanitarian aid and civil protection Administrative expenditure of the 'Humanitarian aid and civil protection' policy area % Page 9 of 61

10 TABLE 1: OUTTURN ON COMMITMENT APPROPRIATIONS IN 2016 (in Mio ) Commitment appropriations authorised Commitments made % 1 2 3=2/1 Total Title % Title 24 Fight against fraud Administrative expenditure of the 'Fight against fraud' policy area % Total Title % Title 25 Commission's policy coordination and legal advice Administrative expenditure of the 'Commission's policy coordination and legal advice' policy area % Total Title % Title 26 Commission's administration Administrative expenditure of the 'Commission's administration' policy area % Total Title % Title 27 Budget Administrative expenditure of the 'Budget' policy area % Total Title % Title 28 Audit Administrative expenditure of the 'Audit' policy area % Total Title % Title 29 Statistics Administrative expenditure of the 'Statistics' policy area % Total Title % Title 30 Pensions and related expenditure Administrative expenditure of the 'Pensions and related expenditure' policy area 1, , % Total Title 30 1, , % Title 31 Language services Administrative expenditure of the 'Language services' policy area % Total Title % Title 32 Energy Administrative expenditure in the 'Energy' policy area % Total Title Title 33 Justice and consumers Administrative expenditure of the 'Justice and consumers' policy area Note : The figures are those related to the provisional Annex 3 Financial Reports - DG PMO accounts and not yet audited by the Court of Auditors Report printed on 16/03/ % % Total Title % Title 34 Climate action Administrative expenditure in the 'Climate action' policy area % Total Title % Page 10 of 61

11 TABLE 1: OUTTURN ON COMMITMENT APPROPRIATIONS IN 2016 (in Mio ) Commitment appropriations authorised Commitments made % 1 2 3=2/1 Title XX XX XX 01 2, , % Total Title XX 2, , % Total DG PMO 4, , % * Commitment appropriations authorised include, in addition to the budget voted by the legislative authority, appropriations carried over from the previous exercise, budget amendments as well as miscellaneous commitment appropriations for the period (e.g. internal and external assigned revenue). Note : The figures are those related to the provisional Annex 3 Financial Reports - DG PMO accounts and not yet audited by the Court of Auditors Report printed on 16/03/2017 Page 11 of 61

12 TABLE 2: OUTTURN ON PAYMENT APPROPRIATIONS IN 2016 (in Mio ) Chapter Title 01 Economic and financial affairs Administrative expenditure of the 'Economic and financial affairs' policy area Payment appropriations authorised * Payments made % 1 2 3=2/ % Total Title % Title 02 Internal market, industry, entrepreneurship and SMEs Administrative expenditure of the 'Internal market, industry, entrepreneurship and SMEs' policy area % Total Title % Title 03 Competition Administrative expenditure of the 'Competition' policy area % Total Title % Title 04 Employment, social affairs and inclusion Administrative expenditure of the 'Employment, social affairs and inclusion' policy area % Total Title % Title 05 Agriculture and rural development Administrative expenditure of the 'Agriculture and rural development' policy area % Total Title % Title 06 Mobility and transport Administrative expenditure of the 'Mobility and transport' policy area % Total Title % Title 07 Environment Administrative expenditure of the 'Environment' policy area % Total Title % Title 08 Research and innovation Administrative expenditure of the 'Research and innovation' policy area % Total Title % Title 09 Communications networks, content and technology Administrative expenditure of the 'Communications networks, content and technology' policy area % Total Title % Title 11 Maritime affairs and fisheries Administrative expenditure of the 'Maritime affairs and fisheries' policy area % Total Title % Title 12 Financial stability, financial services and capital markets union Administrative expenditure of the 'Financial stability, financial services and capital markets union' policy area Note : The figures are those related to the provisional Annex 3 Financial Reports - DG PMO accounts and not yet audited by the Court of Auditors Report printed on 16/03/2017 Page 12 of % Total Title %

13 TABLE 2: OUTTURN ON PAYMENT APPROPRIATIONS IN 2016 (in Mio ) Chapter Payment appropriations authorised * Payments made % 1 2 3=2/ Title 13 Regional and urban policy Administrative expenditure of the 'Regional and urban policy' policy area % Total Title % Title 14 Taxation and customs union Administrative expenditure of the 'Taxation and customs union' policy area % Total Title % Title 15 Education and culture Administrative expenditure of the 'Education and culture' policy area % Total Title % Title 16 Communication Administrative expenditure of the 'Communication' policy area % Total Title % Title 17 Health and food safety Administrative expenditure of the 'Health and food safety' policy area % Total Title % Title 18 Migration and home affairs Administrative expenditure of the 'Migration and home affairs' policy area % Total Title % Title 19 Foreign policy instruments Administrative expenditure of the 'Foreign policy instruments' policy area % Total Title % Title 20 Trade Administrative expenditure of the 'Trade' policy area % Total Title % Title 21 International cooperation and development Administrative expenditure of the 'International cooperation and development' policy area % Total Title % Title 22 Neighbourhood and enlargement negotiations Administrative expenditure of the 'Neighbourhood and enlargement negotiations' policy area % Total Title % Title 23 Humanitarian aid and civil protection Administrative expenditure of the 'Humanitarian aid and civil protection' policy area % Total Title % Note : The figures are those related to the provisional Annex 3 Financial Reports - DG PMO accounts and not yet audited by the Court of Auditors Report printed on 16/03/2017 Page 13 of 61

14 TABLE 2: OUTTURN ON PAYMENT APPROPRIATIONS IN 2016 (in Mio ) Chapter Payment appropriations authorised * Payments made % 1 2 3=2/1 Title 24 Fight against fraud Administrative expenditure of the 'Fight against fraud' policy area % Total Title % Title 25 Commission's policy coordination and legal advice Administrative expenditure of the 'Commission's policy coordination and legal advice' policy area % Total Title % Title 26 Commission's administration Administrative expenditure of the 'Commission's administration' policy area % Total Title % Title 27 Budget Administrative expenditure of the 'Budget' policy area % Total Title % Title 28 Audit Administrative expenditure of the 'Audit' policy area % Total Title % Title 29 Statistics Administrative expenditure of the 'Statistics' policy area % Total Title % Title 30 Pensions and related expenditure Administrative expenditure of the 'Pensions and related expenditure' policy area 1, , % Total Title 30 1, , % Title 31 Language services Administrative expenditure of the 'Language services' policy area % Total Title % Title 32 Energy Administrative expenditure in the 'Energy' policy area % Total Title % Title 33 Justice and consumers Administrative expenditure of the 'Justice and consumers' policy area % Total Title % Title 34 Climate action Administrative expenditure in the 'Climate action' policy area % Total Title % Title XX XX XX 01 2, , % Page 14 of 61

15 TABLE 2: OUTTURN ON PAYMENT APPROPRIATIONS IN 2016 (in Mio ) Chapter Payment appropriations authorised * Payments made % 1 2 3=2/1 Total Title XX 2, , % Total DG PMO 4, , % * Payment appropriations authorised include, in addition to the budget voted by the legislative authority, appropriations carried over from the previous exercise, budget amendments as well as miscellaneous payment appropriations for the period (e.g. internal and external assigned revenue). Note : The figures are those related to the provisional Annex 3 Financial Reports - DG PMO accounts and not yet audited by the Court of Auditors Report printed on 16/03/2017 Page 15 of 61

16 Chapter TABLE 3 : BREAKDOWN OF COMMITMENTS TO BE SETTLED AT 31/12/2016 (in Mio ) Commitments Commitments to be settled Commitments to be settled from Payments 2016 RAL 2016 % to be settled financial years previous to 2016 Total of commitments to be settled at end of financial year 2016 (incl corrections) Total of commitments to be settled at end of financial year 2015 (incl. corrections) 1 2 3=1-2 4=1-2/1 5 6= Administrative expenditure of the 'Economic and financial affairs' policy area Title 01 : Economic and financial affairs % Total Title % Administrative expenditure of the 'Internal market, industry, entrepreneurship and SMEs' policy area Title 02 : Internal market, industry, entrepreneurship and SMEs % Total Title % Title 03 : Competition Administrative expenditure of the 'Competition' policy area % Total Title % Title 04 : Employment, social affairs and inclusion Administrative expenditure of the 'Employment, social affairs and inclusion' policy area % Total Title % Title 05 : Agriculture and rural development Administrative expenditure of the 'Agriculture and rural development' policy area % Total Title % Administrative expenditure of the 'Mobility and transport' policy area Title 06 : Mobility and transport % Total Title % Page 16 of 61

17 TABLE 3 : BREAKDOWN OF COMMITMENTS TO BE SETTLED AT 31/12/2016 (in Mio ) Chapter 2016 Commitments to be settled Commitments t o Commitments 2016 be settled from Payments 2016 RAL 2016 % to be settled financial years previous to 2016 Total of commitments to be settled at end of financial year 2016 (incl corrections) Total of commitments to be settled at end of financial year 2015 (incl. corrections) 1 2 3=1-2 4=1-2/1 5 6= Administrative expenditure of the 'Environment' policy area Title 07 : Environment % Total Title % Title 08 : Research and innovation Administrative expenditure of the 'Research and innovation' policy area % Total Title % Title 09 : Communications networks, content and technology Administrative expenditure of the 'Communications networks, content and technology' policy area % Total Title % Title 11 : Maritime affairs and fisheries Administrative expenditure of the 'Maritime affairs and fisheries' policy area % Total Title % Administrative expenditure of the 'Financial stability, financial services and capital markets union' policy area Title 12 : Financial stability, financial services and capital markets union % Total Title % Title 13 : Regional and urban policy Administrative expenditure of the 'Regional and urban policy' policy area % Total Title % Title 14 : Taxation and customs union Page 17 of 61

18 TABLE 3 : BREAKDOWN OF COMMITMENTS TO BE SETTLED AT 31/12/2016 (in Mio ) Chapter Commitments Commitments to be settled Commitments to be settled from Payments 2016 RAL 2016 % to be settled financial years previous to 2016 Total of commitments to be settled at end of financial year 2016 (incl corrections) Total of commitments to be settled at end of financial year 2015 (incl. corrections) 1 2 3=1-2 4=1-2/1 5 6= Administrative expenditure of the 'Taxation and customs union' policy area % Total Title % Title 15 : Education and culture Administrative expenditure of the 'Education and culture' policy area % Total Title % Title 16 : Communication Administrative expenditure of the 'Communication' policy area % Total Title % Title 17 : Health and food safety Administrative expenditure of the 'Health and food safety' policy area % Total Title % Title 18 : Migration and home affairs Administrative expenditure of the 'Migration and home affairs' policy area % Total Title % Title 19 : Foreign policy instruments Administrative expenditure of the 'Foreign policy instruments' policy area % Total Title % Title 20 : Trade Administrative expenditure of the 'Trade' policy area % Page 18 of 61

19 TABLE 3 : BREAKDOWN OF COMMITMENTS TO BE SETTLED AT 31/12/2016 (in Mio ) Chapter Commitments Commitments to be settled Commitments to be settled from Payments 2016 RAL 2016 % to be settled financial years previous to 2016 Total of commitments to be settled at end of financial year 2016 (incl corrections) Total of commitments to be settled at end of financial year 2015 (incl. corrections) 1 2 3=1-2 4=1-2/1 5 6=3+5 7 Total Title % Title 21 : International cooperation and development Administrative expenditure of the 'International cooperation and development' policy area % Total Title % Title 22 : Neighbourhood and enlargement negotiations Administrative expenditure of the 'Neighbourhood and enlargement negotiations' policy area % Total Title % Title 23 : Humanitarian aid and civil protection Administrative expenditure of the 'Humanitarian aid and civil protection' policy area % Total Title % Title 24 : Fight against fraud Administrative expenditure of the 'Fight against fraud' policy area % Total Title % Title 25 : Commission's policy coordination and legal advice Administrative expenditure of the 'Commission's policy coordination and legal advice' policy area % Total Title % Title 26 : Commission's administration Administrative expenditure of the 'Commission's administration' policy area % Page 19 of 61

20 TABLE 3 : BREAKDOWN OF COMMITMENTS TO BE SETTLED AT 31/12/2016 (in Mio ) Chapter Commitments Commitments to be settled Commitments to be settled from Payments 2016 RAL 2016 % to be settled financial years previous to 2016 Total of commitments to be settled at end of financial year 2016 (incl corrections) Total of commitments to be settled at end of financial year 2015 (incl. corrections) 1 2 3=1-2 4=1-2/1 5 6=3+5 7 Total Title % Title 27 : Budget Administrative expenditure of the 'Budget' policy area % Total Title % Title 28 : Audit Administrative expenditure of the 'Audit' policy area % Total Title % Title 29 : Statistics Administrative expenditure of the 'Statistics' policy area % Total Title % Title 30 : Pensions and related expenditure Administrative expenditure of the 'Pensions and related expenditure' policy area 1, % Total Title 30 1, % Title 31 : Language services Administrative expenditure of the 'Language services' policy area % Total Title % Title 32 : Energy Administrative expenditure in the 'Energy' policy area % Total Title % Page 20 of 61

21 TABLE 3 : BREAKDOWN OF COMMITMENTS TO BE SETTLED AT 31/12/2016 (in Mio ) Chapter Commitments Commitments to be settled Commitments to be settled from Payments 2016 RAL 2016 % to be settled financial years previous to 2016 Total of commitments to be settled at end of financial year 2016 (incl corrections) Total of commitments to be settled at end of financial year 2015 (incl. corrections) 1 2 3=1-2 4=1-2/1 5 6= Administrative expenditure of the 'Justice and consumers' policy area Title 33 : Justice and consumers % Total Title % Title 34 : Climate action Administrative expenditure in the 'Climate action' policy area % Total Title % Title XX : XX XX 01 2, % Total Title XX 2, % Total DG PMO 3, % Note : The figures are those related to the provisional Annex 3 Financial Reports - DG PMO accounts and not yet audited by the Court of Auditors Report printed on 16/03/2017 Page 21 of 61

22 Note : The figures are those related to the provisional Annex 3 Financial Reports - DG PMO accounts and not yet audited by the Court of Auditors Report printed on 16/03/2017 Page 22 of 61

23 TABLE 4 : BALANCE SHEET PMO BALANCE SHEET A.I. NON CURRENT ASSETS A.I.1.IntangibleAssets A.I.6. Non-Cur Exch Receiv & Non-Ex Recov A.II. CURRENT ASSETS A.II.3.Curr Exch Receiv &Non-Ex Recoveral 5,083, ,083, ,576, ,558, ,815, ,815, ,396, ,376, A.II.6. Cash and Cash Equivalents 17, , ASSETS 16,659, ,212,442.8 P.I. NON CURRENT LIABILITIES P.I.I.Non-CurrentPension &other Empl Ber P.II. CURRENT LIABILITIES ,873,340, ,547,698, P.II.2.CurrentProvisions P.II.4. Current Payables P.II.5. Current Accrued Charges &Defrd Incc -1,963, ,778,816, ,561, ,654, ,462,633, ,719, LIABILITIES -2,873,340, ,547,698, NET ASSETS (ASSETS less LIABILITIES) -2,856,680, ,532,486, P.MI.2. Accumulated Surplus / Deficit 7,014,893, ,588,106, Non-allocated central (surplus)/deficit* -4,158,212, ,055,620, TOTAL It should be noted that the balance sheet and statement of financial performance presented in Annex 3 to this Annual Activity Report, represent only the assets, liabilities, expenses and revenues that are under the control of this Directorate General. Significant amounts such as own resource revenues and cash held in Commission bank accounts are not included in this Directorate General's accounts since they are managed centrally by DG Budget, on whose balance sheet and statement of financial performance they appear. Furthermore, since the accumulated result of the Commission is not split amongst the various Directorates General, it can be seen that the balance sheet presented here is not in equilibrium. Additionally, the figures included in tables 4 and 5 are provisional since they are, at this date, still subject to audit by the Court of Auditors. It is thus possible that amounts included in these tables may have to be adjusted following this audit. Note: The items booked under Intangible Assets (net amount of EUR 5 million) concern internally generated intangible assets (in-house developed Information Systems) capitalised in 2012 and 2014 and being amortised. They relate to IT software for JSIS and pensions. 96% of Current Payables relate to a liaison account under the control of PMO for which associated cash payments are managed centrally by DG Budget through another account. The actual liability is the net amount between those two accounts. Note : The figures are those related to the provisional Annex 3 Financial Reports - DG PMO accounts and not yet audited by the Court of Auditors Report printed on 16/03/2017 Page 23 of 61

24 TABLE 5 : STATEMENT OF FINANCIAL PERFORMANCE PMO STATEMENT OF FINANCIAL PERFORMANCE II.1 REVENUES -815,389, ,337, II.1.1. NON-EXCHANGE REVENUES -797,752, ,914,062.1 II RECOVERY OF EXPENSES II OTHER NON-EXCHANGE REVEN -797,751, ,914, II.1.2. EXCHANGE REVENUES -17,636, ,423, II FINANCIAL INCOME II OTHER EXCHANGE REVENUE -17,636, ,423, II.2. EXPENSES 3,296,150, ,201,124, II.2. EXPENSES 3,296,150, ,201,124, II.2.10.OTHER EXPENSES 99,661, ,847, II.2.2. EXP IMPLEM BY COMMISS&EX.AC 6,249, ,139, II.2.6. STAFF AND PENSION COSTS 3,189,861, ,073,737, II.2.8. FINANCE COSTS 377, , STATEMENT OF FINANCIAL PERFORMANCE 2,480,761, ,426,787, It should be noted that the balance sheet and statement of financial performance presented in Annex 3 to this Annual Activity Report, represent only the assets, liabilities, expenses and revenues that are under the control of this Directorate General. Significant amounts such as own resource revenues and cash held in Commission bank accounts are not included in this Directorate General's accounts since they are managed centrally by DG Budget, on whose balance sheet and statement of financial performance they appear. Furthermore, since the accumulated result of the Commission is not split amongst the various Directorates General, it can be seen that the balance sheet presented here is not in equilibrium. Additionally, the figures included in tables 4 and 5 are provisional since they are, at this date, still subject to audit by the Court of Auditors. It is thus possible that amounts included in these tables may have to be adjusted following this audit. Note : The figures are those related to the provisional Annex 3 Financial Reports - DG PMO accounts and not yet audited by the Court of Auditors Report printed on 16/03/2017 Page 24 of 61

25 TABLE 5bis : OFF BALANCE SHEET PMO OFF BALANCE OB.2. Contingent Liabilities -5,714,593 0 OB.2.7.CL Amounts relating to legal ca -5,714, OB.3. Other Significant Disclosures 0-45,695, OB.3.2. Commagainstapp. not yet con ,695, OB.4. Balancing Accounts 5,714,593 45,695, OB.4. Balancing Accounts 5,714, ,695, OFF BALANCE It should be noted that the balance sheet and statement of financial performance presented in Annex 3 to this Annual Activity Report, represent only the assets, liabilities, expenses and revenues that are under the control of this Directorate General. Significant amounts such as own resource revenues and cash held in Commission bank accounts are not included in this Directorate General's accounts since they are managed centrally by DG Budget, on whose balance sheet and statement of financial performance they appear. Furthermore, since the accumulated result of the Commission is not split amongst the various Directorates General, it can be seen that the balance sheet presented here is not in equilibrium. Additionally, the figures included in tables 4 and 5 are provisional since they are, at this date, still subject to audit by the Court of Auditors. It is thus possible that amounts included in these tables may have to be adjusted following this audit. Note : The figures are those related to the provisional Annex 3 Financial Reports - DG PMO accounts and not yet audited by the Court of Auditors Report printed on 16/03/2017 Page 25 of 61

26 TABLE 6: AVERAGE PAYMENT TIMES FOR DG PMO Legal Times Maximum Payment Time (Days) Total Number of Payments Nbr of Payments within Time Limit Percentage Average Nbr of Late Payment Times Percentage Payments (Days) Average Payment Times (Days) % % % % % % Total Number of Payments Average Net Payment Time Average Gross Payment Time % % % Target Times Target Payment Time (Days) Total Number of Payments Nbr of Payments within Target Time Percentage Average Nbr of Late Payment Times Percentage Payments (Days) Average Payment Times (Days) % % 35.2 Total Number of Payments Average Net Payment Time Average Gross Payment Time % % Suspensions Average Report Approval Suspension Days Average Payment Suspension Days Number Suspended Payments of % of Total Number Total Number Payments Amount of Suspended Payments of % of Total Amount Total Paid Amount ,649, Note: 90% of late payments (19% of total payments) are related to the payment of experts, where PMO is dependent on other Commission DGs providing supporting documents. Based on PMO management statistics, the average time for reimbursement of experts, from the date the documents reach PMO, was less than 20 days in 97,4 % of the cases in Note : The figures are those related to the provisional Annex 3 Financial Reports - DG PMO accounts and not yet audited by the Court of Auditors Report printed on 16/03/2017 Page 26 of 61

27 TABLE 7 : SITUATION ON REVENUE AND INCOME IN 2016 Revenue and income recognized Revenue and income cashed from Outstanding Chapter Current year RO Carried over RO Total Current Year RO Carried over RO Total balance 1 2 3= =4+5 7= MISCELLANEOUS TAXES AND DEDUCTIONS 522,874, , ,062, ,760, , ,948, , CONTRIBUTIONS TO THE PENSION SCHEME 411,185, , ,423, ,997, , ,234, , OTHER CONTRIBUTIONS TO THE PENSION SCHEME 40,342, ,342, ,342, ,342, REVENUE FROM INVESTMENTS OR LOANS GRANTED, BANK AND OTHER INTEREST OTHER CONTRIBUTIONS AND REFUNDS IN 57 CONNECTION WITH THE ADMINISTRATIVE OPERATION OF THE INSTITUTION 21,265, , ,557, ,983, , ,244, , MISCELLANEOUS COMPENSATION 0 182, , , OTHER REVENUE ARISING FROM ADMINISTRATIVE MANAGEMENT 0 672, , , MISCELLANEOUS REVENUE 904, , , , Total DG PMO 996,571, ,572, ,143, ,987, , ,674, ,469, Note : The figures are those related to the provisional Annex 3 Financial Reports - DG PMO accounts and not yet audited by the Court of Auditors Report printed on 16/03/2017 Page 27 of 61

28 TABLE 8 : RECOVERY OF PAYMENTS (Number of Recovery Contexts and corresponding Transaction Amount) Total undue payments recovered Total transactions in recovery context (incl. non-qualified) % Qualified/Total RC Year of Origin (commitment) Nbr RO Amount Nbr RO Amount Nbr RO Amount , , No Link ,339, Sub-Total ,675,267.8 EXPENSES BUDGET INCOME LINES IN INVOICES Error Irregularity OLAF Notified Total undue payments recovered Total transactions in recovery context (incl. non-qualified) % Qualified/Total RC Nbr Amount Nbr Amount Nbr Amount Nbr Amount Nbr Amount Nbr Amount , NON ELIGIBLE IN COST CLAIMS CREDIT NOTES 9 61, Sub-Total , GRAND TOTAL 5, ,878, Note : The figures are those related to the provisional Annex 3 Financial Reports - DG PMO accounts and not yet audited by the Court of Auditors Report printed on 16/03/2017 Page 28 of 61

29 TABLE 9: AGEING BALANCE OF RECOVERY ORDERS AT 31/12/2016 FOR PMO Number 01/01/2016 at Number 31/12/2016 at Evolution Open Amount (Eur) at Open Amount (Eur) at 01/01/ /12/2016 Evolution % 6, , % % % % 16, , % % 25, , % % 122, , % % 1,103, ,096, % % 152, , % % 44, , % % 37, , % % 2,810, , % ,772, % 4,319, ,233, % Note : The figures are those related to the provisional Annex 3 Financial Reports - DG PMO accounts and not yet audited by the Court of Auditors Report printed on 16/03/2017 Page 29 of 61

30 TABLE 10 : RECOVERY ORDER WAIVERS IN 2016 >= EUR Waiver Central Key Linked RO Central Key RO Accepted Amount (Eur) LE Account Group Commission Decision Comments Total DG Number of RO waivers TABLE 11 : CENSUS OF NEGOTIATED PROCEDURES - DG PMO Negotiated Procedure Legal base Number of Procedures Amount ( ) Total No data to be reported Note : The figures are those related to the provisional Annex 3 Financial Reports - DG PMO accounts and not yet audited by the Court of Auditors Report printed on 16/03/2017 Page 30 of 61

31 TABLE 12 : SUMMARY OF PROCEDURES OF DG PMO EXCLUDING BUILDING CONTRACTS Internal Procedures > 60,000 Procedure Type Count Amount ( ) Restricted Procedure (Art RAP) 2 11,370, TOTAL 2 11,370, TABLE 13 : BUILDING CONTRACTS No data to be reported TABLE 14 : CONTRACTS DECLARED SECRET No data to be reported Note : The figures are those related to the provisional Annex 3 Financial Reports - DG PMO accounts and not yet audited by the Court of Auditors Report printed on 16/03/2017 Page 31 of 61

32 ANNEX 4: Materiality criteria Quintessential to the PMO's activities are the correct implementation of the staff regulations regarding entitlements and reimbursement of several categories of expenditure. An entitlement or reimbursement can result from a decision made by another service (recruitment, mission, leave, etc.) or from an individual request from the relevant staff member (following a certain event: marriage, child, sickness, pension, ). Any such entitlement or reimbursement is trusted to case handlers who then proceed to a verification of the eligibility of the entitlement and the underlying documents. After such verification, the entitlement/documents are encoded. These case handlers are under supervision and depending on the complexity of the file under verification by the verifier and/or the Appointing Authority (AIPN). Information systems make all necessary calculations and prepare batch files that are then transferred for payment to the Commission's accounting system (ABAC). These mass payments are initiated and verified by case handlers. The verification and validation is carried out by the authorising officers by sub delegation. Only less recurrent or particular files can be introduced directly in ABAC based on a paper file. The main inherent weaknesses result from the nature of the activities, residing in the very high number of individual transactions (e.g. reimbursement of medical claims and missions) processed, on the one hand, and mass transactions (e.g. salary and pension payments), on the other hand. A quantifiable weakness in the control and supervisory systems would be defined as material when ex-ante or ex-post controls detect structural and pervasive errors regarding eligibility and calculation. The level of materiality is defined at 2 %, based on the error rate applied by the Court of Auditors. If the residual risk of error on legality and regularity of all underlying transactions is higher than 2 %, a reservation will be made. A non-quantifiable weakness would be defined as material when an elevated risk of errors or abuse in entitlements is identified with no material financial impact but with serious reputational consequences for the Commission. Page 32 of 61

33 ANNEX 5: Internal Control Templates for budget implementation (ICTs) In the table below, the "Depth" of the control has 4 identified levels, defined as follows: 1.Minimal administrative / arithmetic control with no reference to supporting documents reference to underlying documents. 2. Control with reference to corroborative information incorporating an element of independent oversight (e.g. audit certificate or other verification), but no reference to underlying documents. 3. Control with reference to fully independent corroborative information (e.g. database which justifies certain elements of the claim, 3rd party or Commission assessment of milestones achieved, etc.) 4. Control with reference to and including access to the underlying documentation available at the stage of the process in question, for all inputs and outputs (e.g. timesheets, invoices, physical verification, etc.); i.e. control of the same intensity of transaction testing as those carried out by the ECA as part of the DAS. ICT 1: Management (establishment/modification & payment) of salaries, post-activity and related entitlements. Stage 1: Establishment/modification of salaries, post-activity and related entitlements Main control objectives: Ensuring that salaries, post-activity and related entitlements are correctly established, fraud prevention and detection. It concerns carrying out mass salary/pension payments to a relatively stable population. Every establishment or modification of an entitlement (mainly related to salaries and pensions) is subjected to a 100 % ex-ante control. The initiating operational staff member opening the file performs a full verification in order to correctly establish/modify the entitlements. A verifying staff member provides a supplementary layer of control in all cases, except for some very specific cases (allowances where review of some lower risk and less complex files is performed by the verifying agent on a sample basis, due to the high number of declarations received). The increasing quality of ex-ante control in this field, results in continuous decrease of amounts recovered in ex-post controls carried out in the entitlements area (except for targeted controls on risky areas). The benefit of the internal control lies in the prevention of errors in the establishment or modification that would have a long lasting material financial impact. To confirm a beneficiary's continued right to entitlements, granted on a provisional basis, the PMO must receive the validity of related supporting documents. They are controlled via a posteriori controls. These checks complement the ex-ante controls. It is also worth noting that the nature of PMO activities, payment of salaries, post-activity and reimbursement of claims, makes for an easy recovery of found errors, as corrections can be deducted from monthly salary, pension payments. Page 33 of 61

34 Main risks It may happen (again) that Mitigating controls How to determine coverage frequency and depth How to estimate the costs and benefits of controls Control indicators Salaries, post-activity and related entitlements are not correctly established or modified, resulting in recurring incorrect wage payments to staff: Determination of entitlements not compliant with staff regulations and not paid on time; Risk of fraud, litigation and bad reputation due to non-compliance with rules in force (FR & IR, Staff Regulations, accounting, etc). EX-ANTE: All transactions are submitted to ex-ante controls; All entitlements (100%) are subject to exante control by the initiating agent. Four eyes principle, except for some specific allowances. All found errors are corrected, in principle without exception. Should an exception be made, an exception note is established; Delegation of powers (AOSD, AIPN) published; Supplementary technical controls are made using IT applications. EX-POST: Risk-based ex-post controls are carried out on the basis of a risk analysis, taking into account materiality and risk probability criteria. In addition random controls are performed. All ex-post controls are reported based on a harmonised template. Specific ex-post controls aimed at revealing potential fraudulent transactions are carried out. Coverage ex-ante: All transactions Frequency: Continuously Depth: Level 2 Coverage ex post: Sample-based on all transactions or specific target on risky areas Frequency: annual basis Depth*: Level 2 Costs: Ex-ante: All personnel involved in operational transactions Benefits (qualitative): Reduced risk of litigation, compliance with regulation, transactions processed accurately and in time; Errors, fraud and potential litigations are prevented or minimized. Ex-ante and expost reports; Degree of implementation of ex-post planning; Exception reporting Page 34 of 61