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Bio-based Industries Joint Undertaking (BBI JU) Report on Budgetary and Financial Management 2016 This report is provided in accordance with in accordance with the Statutes of the BBI JU annexed to Council Regulation (EU) No 560/2014 and with [Article 31] of the Financial Rules of the BBI JU.
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Bio-based Industries Joint Undertaking (BBI JU)
Report on Budgetary and Financial Management 2016
This report is provided in accordance with in accordance with the Statutes of the BBI JU annexed to Council Regulation (EU) No 560/2014 and with [Article 31] of the Financial Rules of the BBI JU.
TABLE OF CONTENTS
1 Introduction ................................................................................................................... 3
2 Overview of the budget ................................................................................................. 4 2.1 Budgetary principles ................................................................................................ 4 2.2 Initial amending and final budgets ........................................................................... 4 2.3 Budget implementation .......................................................................................... 16 2.3.1 Budget implementation at a glance ............................................................... 16 2.3.2 Overall BBI JU implementation ..................................................................... 17 2.3.3 Highlights of the budgetary implementation .................................................. 23 2.4 Revenue .................................................................................................................. 9
3 Multi-annual overview (operational expenditure) ......................................................... 24
4 Evolution of outstanding commitments .................................................................................. 25
5 Budgetary outturn ........................................................................................................ 26
6 Financial situation and main achievements ................................................................. 27
7 Glossary on terms, abbreviations and acronyms ......................................................... 29
1. INTRODUCTION The Bio-Based Industries Joint Undertaking (BBI JU) is a Public-Private Partnership between the European Union – represented by the European Commission (EC) - and the Bio-based Industries Consortium (BIC). Operating under Horizon 2020, BBI JU is driven by the Strategic Innovation and Research Agenda (SIRA1). BIC is a non-profit organisation that was created to represent the industry group that supports the BBI JU. Its members cover the entire bio-based value chain and consist of large industries, small and medium-sized enterprises (SMEs), regional clusters, European trade associations, and European Technology Platforms. The aim of BIC is to ensure and promote the technological and economic development of the bio-based industries in Europe. Any interested stakeholders along the bio-based value chain may apply for membership. It applies general principles of openness and transparency regarding membership, ensuring a wide industrial involvement. BIC developed the SIRA based on extensive consultation with public and private stakeholders. The SIRA describes the main technological and innovation challenges that need to be overcome in order to develop sustainable and competitive bio-based industries in Europe and identifies research, demonstration and deployment activities to be carried out by a Joint Technology Initiative on Bio-based Industries, the BBI JU. The Commission Communication of 13 February 2012 entitled "Innovating for Sustainable Growth: A Bioeconomy for Europe", and in particular its Action Plan, calls for a public-private partnership to support the establishment of sustainable and competitive bio-based industries and value chains in Europe. In view of the move towards a post-petroleum society, the Communication aims to integrate better biomass producing and processing sectors in order to reconcile food security and natural resource scarcity and environmental objectives with the use of biomass for industrial and energy purposes. The Commission Communication of 10 October 2012 entitled "A Stronger European Industry for Growth and Economic Recovery" confirms the strategic importance of bio-based industries for the future competitiveness of Europe, as identified in the Commission Communication of 21 December 2007 entitled "A lead market initiative for Europe", and stresses the need for the BBI Initiative. On 6 May 2014, the Council adopted Regulation (EU) No 560/2014 establishing the Bio-based Industries Joint Undertaking (BBI Regulation). According to Article 19 of the Regulation, the Commission was responsible for the establishment and initial operation of the BBI Joint Undertaking until it reached the operational capacity to implement its own budget on 26 October 2015.
1 http://biconsortium.eu/sites/biconsortium.eu/files/downloads/BIC_BBI_SIRA_web.pdf
BBI JU Objectives BBI JU’s mission is to implement the Strategic Innovation and Research Agenda (SIRA) developed by the Bio-based Industry Consortium (BIC) and endorsed by the European Commission on behalf of the European Union (EU). BBI JU operates its programme as the catalyst to enable the EU and industry to align their strategy and vision while respecting the principles of openness, transparency and excellence required for funding under the Horizon 2020 framework programme, through the annual calls for proposals organised by BBI JU. BBI JU’s objective, and that of its founding partners, is to contribute to the development of a sustainable and competitive bio-based industry in Europe based on advanced biorefineries that source their biomass sustainably; and in particular to demonstrate technologies that:
enable new chemical building blocks, new materials, and new consumer products
from European biomass and which replace the need for fossil based inputs;
develop business models that integrate economic actors along the whole value chain
from supply of biomass to biorefinery plants to consumers of bio-based materials,
chemicals and fuels, including through creating new cross-sector interconnections
and supporting cross industry clusters; and
set up flagship biorefinery plants that deploy the technologies and business models
for bio-based materials, chemicals and fuels and demonstrate cost and performance
improvements to levels that are competitive with fossil based alternatives.
The objective of the BBI JU should be achieved by means of supporting research and innovation activities by using resources from the public and private sectors. To this end, the BBI JU should organise calls for proposals for supporting research, demonstration and deployment activities. The maximum EU contribution to the BBI JU operations, under the Horizon 2020 research and innovation framework programme covering the period 2014-2020, is € 975 000 000 including EFTA appropriations (of which up to € 29.25 million is for administrative expenditure). Members of the JU other than the Union are expected to make a total contribution of at least € 2.730 million over the 10 year period, of which € 182.5 million is the minimum financial contribution to operational costs. In addition in-kind contributions of at least € 1.755 million should be incurred by them in implementing additional activities outside the work plan of the JU and contributing to its objectives. The total administrative costs of the BBI Joint Undertaking shall not exceed € 58 500 000 and will be covered by means of financial contributions divided equally on an annual basis between the Union and the members other than the Union (BIC). If part of the contribution for administrative costs is not used, it may be made available to cover the operational costs of the BBI Joint Undertaking. The financial reporting of the BBI JU is governed by the provisions of the Financial Rules of the BBI JU2, which take into account the particular needs to combine public and private funding. The presented financial information deals with the period 1st January to 31st December 2016.
2 Adopted by the Governing Board decision 14 October 2014, and amended by the Governing Board decision of 23
December 2015.
2. OVERVIEW OF THE BUDGET 2.1 Budgetary principles As set out in Chapter 2 of the BBI JU Financial Rules, the budget of BBI JU was established and implemented in accordance with the principles unity, budget accuracy, annuality, equilibrium, unit of account, universality, specification, sound financial management and transparency.
2.2 Initial, amending and final budgets The budget of the BBI JU is divided into 3 titles as follows: Title 1: Staff expenses (includes salaries and allowances, recruitment costs, training, missions, socio-medical and representation costs) Title 2: Administrative expenses (includes the general infrastructure and running costs such as building rental, IT costs, office furniture and equipment, communications and meetings, and other miscellaneous administrative costs) Title 3: Operational expenses (for the implementation of the activities and tasks assigned to BBI JU in accordance with its establishing Council Regulation) Fund sources used for the budget include funds from the current year (C1), funds carried over from previous years and reactivated under the N+3 rule applicable to Joint Undertakings (C2), funds carried over from the previous year as budgetary RAL (C8) and internal assigned revenue (C4). The budgetary execution discussed in this report is that of the amended budget (so including the surplus carried over from prior years) after transfers between budget lines, though for the administrative budget, the comparison with the notional execution of the original budget will often also be given for clarity. The Governing Board adopted the original budget for BBI JU on 16 December 2015, for the global amount of € 194 295 870 in commitment appropriations (CAs) and € 67 196 187 in payment appropriations (PAs).
There were three amendments to the 2016 budget approved by the Governing Board, as follows:
In accordance with the BBI JU Financial Rules (Article 10 (2)), as decided by the Executive Director, internal transfers were also implemented in order to better allocate the resources needed for the running costs. Please see below the original and amended budgets, including the transfers: I - Statement of revenue:
VOTED BUDGET
16.12.2015 AMENDMENTS/
TRANSFERS DESCRIPTION FINAL BUDGET
Heading CA PA CA PA CA PA
EU contribution
158 082 500 62 095 038 187 036 903 63 307 677
of which Administrative
3
1 946 263 1 946 263 1 108 111 1 212 639
Unused appropriations from prior years reactivated under N+3
3 054 374 3 158 902
3 The total administrative amendments (carried-over unused appropriations) are shown on the EC net administrative
contribution line for facility. In reality there is an EFTA element included (2.73% of EC contribution), and 50% of the total is deemed to be executed by industry.
1st
amendment Voted on 7 March, 2016, approved the reactivation in the 2016 budget of €28 954 403 of unused commitment appropriations from prior years, under the N+3 rule applicable to Joint Undertakings, broken down as follows:
Administrative expenditure 2015 € 1 108 111 Operational expenditure 2014 € 1 846 292 Operational expenditure call 2015.1 € 26 000 000 € 28 954 403
The administrative surplus arose as a result mainly of the over-budgeting of the 2015 staff-related costs. It was not re-absorbed in 2016, and discussions are currently underway on how best to absorb the surplus, as of 2018.
2nd
amendment Voted on 16 September, 2016, was to include footnotes to the budget tables, explaining that the budget (CAs and PAs) for the expert evaluators of BBI JU’s 2016 call would be implemented by the REA on BBI JU’s behalf.
3rd
amendment The third amendment, voted on 7 December was raised to include a forecast payment schedule in the AWP, and to mention the unused surplus on the 2016 appropriations used by the REA on behalf of BBI for the payment of expert-evaluators, which needed to be paid back to BBI (via RTD) and reabsorbed in its budget.
of which Operational
4
156 136 237 60 148 775 27 846 292
Unused appropriations from prior years reactivated under N+3
188 245 048 60 148 775
EFTA contribution
4 315 652 1 695 195
4 315 652 1 695 195
of which Administrative
53 133 53 133
53 133 53 133
of which Operational
4 262 519 1 642 062
4 262 519 1 642 062
Industry (financial) contribution
2 943 315 2 193 315 2 943 315 2 193 315
of which Administrative (incl. 2/6 compensation for 2014)
2 193 315 2 193 315
2 193 315 2 193 315
of which Operational
750 000 0 00 750 000
TOTAL REVENUES
165 341 467 65 983 548 28 954 403 1 212 639 194 295 870 67 196 187
II – Statement of expenditure:
VOTED BUDGET 16/12/2016
AMENDMENTS TRANSFERS FINAL BUDGET
Title Heading CA PA CA PA CA PA CA PA
Chapter
1 Staff Expenditure
2 473 200 2 473 200 883 869 930 135 0 00 -65 000 3 357 069 3 338 335
1 1 Staff in active employment
2 277 000 2 277 000 689 572 701 572 -13 048 12 596 2 953 523 2 991 168
1 2
Staff recruitment /Miscellaneous expenditure
21 500 21 500 139 239 144 392 -10 339 -59 754 150 400 106 139
1 3 Mission and duty travels
118 200 118 200 50 598 53 365 -50 598 -29 652 118 200 141 913
1 4
Other staff costs (socio-medical structure)
51 000 51 000 1 960 27 853 61 131 12 279 114 091 91 133
1 5
Entertainment and representation expenses
5 500 5 500 2 500 2 952 12 855 -469 20 855 7 982
2 Other administrative
1 719 511 1 719 511 224 242 282 504 0 00 63 816 1 943 753 2 065 831
4 The total operational amendments (carried-over unused appropriations) are shown on the EC net administrative
contribution line for facility. In reality there is an EFTA element included (2.73% of net EC contribution).
expenditure
2 0
Rental of buildings and associated costs
312 200 312 200 1 977 1 977 -41 046 67 693 273 133 381 871
2 1 Administrative information technology
125 500 125 500 30 655 70 432 16 705 -11 837 172 860 184 095
2 2
Movable property and associated costs
5 300 5 300 49 799 49 799 20 201 79 982 75 300 135 081
2 3 Current administrative expenditure
28 200 28 200 689 14 324 -11 789 -9 350 17 100 33 174
2 4 Telecommunications and postal charges
18 800 18 800 5 788 9 700 -4 188 -1 743 20 400 26 757
2 5 Expenditure on formal meetings
100 900 100 900 69 488 47 021 -97 488 -49 257 72 900 98 665
2 6
External communication, information, publicity
295 600 295 600 60 845 83 553
106 105 5 025 462 550 384 177
2 7 Studies 105 000 105 000 5 000 5 000 11 500 -16 000 121 500 94 000
2 8 Experts contracts and evaluations
728 011 728 011
698 -698 728 011 728 011
3 Operational expenditure
161 148 756 61 790 837 27 846 292
1 184 188 995 048 61 792 021
TOTAL EXPENDITURE
165 341 467 65 983 548 28 954 403 1 212 639 0 00 0 00 194 295 870
67 196 187
Below is a table showing the list of individual credit transfers (CAs and PAs) by chapter. The majority of the credit transfers were made to reallocate budget wherever it was needed to enable new commitments to be made, existing commitments to be boosted and additional payment appropriations to be made available in the case of unexpected or larger-than-foreseen payment requirements. All of the credit transfers were between chapters within a title, with the exception of one transfer of C2 payment appropriations, ref. BBI.112, for € 65 000, from Title 1 to Title 2, to enable the payment of the building and rental charges for the 4th quarter of 2016, which were higher than anticipated. The transfer was below the 10% threshold permitted by Article 10 of the BBI JU Financial Regulations. In view of the reactivated surplus from 2015, there was no risk of exhausting the budget. However the aim, as of around April 2016, when the reactivated C2 credits became available following a budgetary amendment, was to attempt to execute all of the C2 payment and commitment appropriations (which should be used in priority), so that the year-end surplus, or most of it, would be in C1. With this aim in mind, the following transfers were made to reallocate the C2 appropriations with a view to facilitating (and accelerating) their execution (highlighted in the tables below): BBI.110: reallocation of C2 commitment appropriations from various budget lines in Titles 1 and 2, grouping Title 1 appropriations on BL A01100 (total € 140 551) and Title 2 appropriations on BL A02000 (total € 12 932), with the aim of converting the execution on
existing commitments on these lines from C1 to C2.
BBI.125: transfer of C2 payment appropriations from chapter 21 to chapter 20 (total € 15 000) to enable a payment regularisation to convert C1 execution to C2.
The exercise was partially successful, with only € 3 498 left in C2 payment appropriations. For the commitment appropriations € 531 698 was left, mainly from Title 1. These appropriations will be reactivated, along with the C1 surplus, via a budgetary amendment in early 2017, and executed in priority.
COMMITMENT APPROPRIATIONS
Budget line Fund
source Initial Transfers BBI ref
Approval by Executive Director
Amount Amended Credit Available
Com Amount
A-1100 C1 2,277,000.00 -101,500.00 BBI.66 26/01/2016 -16,000.00 2,175,500.00
BBI.70 02/02/2016 -40,000.00
BBI.74 25/02/2016 -10,000.00
BBI.76 25/02/2016 -25,000.00
BBI.80 04/03/2016 -5,000.00
BBI.154 16/12/2016 -5,500.00
-101,500.00
A-1100 C2 85,951.43 BBI.108 01/09/2016 -20,000.00 676,071.91 762,023.34
BBI.146 06/12/2016 -30,000.00
BBI.110 14/09/2016 140,551.43
BBI.130 14/10/2016 -4,600.00
85,951.43
A-1110 C1 16,000.00 BBI.66 26/01/2016 16,000.00 16,000.00
A-1120 C1 0.00 0.00
A-1120 C2 -13,500.00 BBI.110 14/09/2016 -13,500.00 13,500.00 0.00
A-1200 C1 2,600.00 50,300.00 BBI.70 02/02/2016 40,000.00 52,900.00
BBI.80 04/03/2016 5,000.00
BBI.136 22/11/2016 -200.00
BBI.154 16/12/2016 5,500.00
50,300.00
A-1200 C2 -60,638.77 BBI.110 14/09/2016 -65,238.77 139,238.77 78,600.00
BBI.130 14/10/2016 4,600.00
-60,638.77
A-1201 C1 18,900.00 18,900.00
A-1300 C1 118,200.00 118,200.00
A-1300 C2 -50,598.18 BBI.110 14/09/2016 -50,598.18 50,598.18 0.00
A-1400 C1 9,555.00 -655.00 BBI.136 22/11/2016 -655.00 8,900.00
A-1400 C2 -1,960.48 BBI.110 14/09/2016 -1,960.48 1,960.48 0.00
A-1401 C1 5,985.00 5,985.00
A-1402 C1 35,460.00 33,500.00 BBI.74 25/02/2016 10,000.00 68,960.00
BBI.76 25/02/2016 25,000.00
BBI.100 17/08/2016 -1,500.00
33,500.00
A-1402 C2 30,246.00 BBI.108 01/09/2016 20,000.00 0.00 30,246.00
BBI.146 06/12/2016 17,000.00
BBI.110 14/09/2016 -6,754.00
30,246.00
A-1500 C1 5,500.00 2,355.00 BBI.100 17/08/2016 1,500.00 7,855.00
BBI.136 22/11/2016 855.00
2,355.00
A-1500 C2 10,500.00 BBI.146 06/12/2016 13,000.00 2,500.00 13,000.00
BBI.110 14/09/2016 -2,500.00
10,500.00
TOTAL TITLE 1
0.00
A-2000 C1 215,250.00 38,000.00 BBI.116 22/09/2016 50,000.00 253,250.00
BBI.171 21/12/2016 -22,000.00
BBI.123 12/10/2016 10,000.00
38,000.00
A-2000 C2 10,954.18 BBI.106 25/08/2016 -1,977.42 1,977.42 12,931.60
BBI.110 14/09/2016 12,931.60
10,954.18
A-2010 C1 96,950.00 -90,000.00 BBI.116 22/09/2016 -50,000.00 6,950.00
BBI.123 12/10/2016 -10,000.00
BBI.144 05/12/2015 -20,000.00
BBI.140 23/11/2016 -10,000.00
-90,000.00
A-2100 C1 37,695.00 12,874.50 BBI.138 22/11/2016 1,874.50 50,569.50
BBI.72 17/02/2016 1,000.00
BBI.140 23/11/2016 10,000.00
12,874.50
A-2100 C2 6,704.85 BBI.98 13/07/2016 10,000.00 30,655.30 37,360.15
BBI.106 25/08/2016 -3,295.15
6,704.85
A-2101 C1 87,805.00 -2,874.50 BBI.138 22/11/2016 -1,874.50 84,930.50
BBI.72 17/02/2016 -1,000.00
-2,874.50
A-2200 C1 5,300.00 70,000.00 BBI.68 27/01/2016 70,000.00 75,300.00
A-2200 C2 -49,799.08 BBI.98 13/04/2016 -10,000.00 49,799.08 0.00
BBI.106 25/08/2016 -33,000.08
BBI.110 14/09/2016 -6,799.00
-49,799.08
A-2300 C1 17,700.00 -1,600.00 BBI.169 21/12/2016 -1,600.00 16,100.00
A-2300 C2 -689.03 BBI.106 25/08/2016 -689.03 689.03 0.00
A-2303 C1 10,500.00 -9,500.00 BBI.171 21/12/2016 -9,500.00 1,000.00
A-2400 C1 18,800.00 1,600.00 BBI.169 21/12/2016 1,600.00 20,400.00
A-2400 C2 -5,788.21 BBI.106 25/08/2016 -5,788.21 5,788.21 0.00
A-2500 C1 100,900.00 -28,000.00 BBI.92 08/04/2016 -30,000.00 72,900.00
BBI.119 10/10/2016 2,000.00
-28,000.00
A-2500 C2 -69,487.61 BBI.106 25/08/2016 -63,405.01 69,487.61 0.00
BBI.110 14/09/2016 -6,082.60
-69,487.61
A-2600 C1 220,300.00 -30,000.00 BBI.68 27/01/2016 -70,000.00 190,300.00
BBI.82 04/03/2016 -3,000.00
BBI.92 08/04/2016 30,000.00
BBI.148 06/12/2016 13,000.00
-30,000.00
A-2600 C2 -53,345.10 BBI.104 24/08/2016 -45,000.00 60,845.10 7,500.00
BBI.106 25/08/2016 -8,345.10
-53,345.10
A-2601 C1 32,250.00 3,000.00 BBI.82 04/03/2016 3,000.00 35,250.00
A-2601 C2 166,450.00 BBI.104 24/08/2016 45,000.00 0.00 166,450.00
BBI.106 25/08/2016 121,500.00
BBI.110 14/09/2016 -50.00
166,450.00
A-2602 C1 43,050.00 20,000.00 BBI.144 05/12/2016 20,000.00 63,050.00
A-2602 C2 0.00 0.00 0.00
A-2700 C1 105,000.00 16,500.00 BBI.119 10/10/2016 -2,000.00 121,500.00
BBI.148 06/12/2016 -13,000.00
BBI.171 21/12/2016 31,500.00
16,500.00
A-2700 C2 -5,000.00 BBI.106 25/08/2016 -5,000.00 5,000.00 0.00
A-2800 C1 728,011.00 728,011.00
A-2800 C2 0.00 0.00 0.00
TOTAL TITLE 2
0.00
B3-000 C1 161,148,756.00 -161,148,756.00 0.00
B3-100 C2 0.00 341,071.35 341,071.35
B3-200 C1 161,148,756.00 161,148,756.00
B3-200 C2 27,505,221.00 27,505,221.00
TOTAL Sum: 165,341,467.00 0.00 28,954,403.44 194,295,870.44
PAYMENT APPROPRIATIONS
Budget line Fund
source Initial Transfers BBI ref
Approval by
Executive Director
Amount Amendments Credit
Available Pay Amount
A-1100 C1 2,277,000.00 -111,001.94 BBI.70 02/02/2016 -40,000.00 2,165,998.06
BBI.74 25/02/2016 -10,000.00
BBI.76 25/02/2016 -25,000.00
BBI.80 04/03/2016 -5,000.00
BBI.88 06/04/2016 -5,059.94
BBI.90 06/04/2016 -4,442.00
BBI.154 16/12/2016 -5,500.00
BBI.66 26/01/2016 -16,000.00
-111,001.94
A-1100 C2 123,596.23 BBI.128 14/10/2016 143,596.23 676,071.91 799,668.14
BBI.108 01/09/2016 -20,000.00
123,596.23
A-1110 C1 16,000.00 BBI.66 26/01/2016 16,000.00 16,000.00
A-1120 C1 9,501.94 BBI.88 06/04/2016 5,059.94 9,501.94
BBI.90 06/04/2016 4,442.00
9,501.94
A-1120 C2 -25,500.00 BBI.128 14/10/2016 -25,500.00 25,500.00 0.00
A-1200 C1 2,600.00 50,300.00 BBI.70 02/02/2016 40,000.00 52,900.00
BBI.80 04/03/2016 5,000.00
BBI.136 22/11/2016 -200.00
BBI.154 16/12/2016 5,500.00
50,300.00
A-1200 C2 -110,053.75 BBI.112 16/09/2016 -35,000.00 144,392.45 34,338.70
BBI.128 14/10/2016 -75,053.75
-110,053.75
A-1201 C1 18,900.00
18,900.00
A-1300 C1 118,200.00
118,200.00
A-1300 C2 -29,652.37 BBI.128 14/10/2016 -29,652.37 53,365.22 23,712.85
A-1400 C1 9,555.00 -655.00 BBI.136 22/11/2016 -655.00 8,900.00
A-1400 C2 -6,073.68 BBI.128 14/10/2016 -6,073.68 9,191.48 3,117.80
A-1401 C1 5,985.00
5,985.00
A-1402 C1 35,460.00 33,500.00 BBI.74 25/02/2016 10,000.00 68,960.00
BBI.76 25/02/2016 25,000.00
BBI.100 17/08/2016 -1,500.00
33,500.00
A-1402 C2 -14,492.00 BBI.112 16/09/2016 -30,000.00 18,662.00 4,170.00
BBI.128 14/10/2016 -4,492.00
BBI.108 01/09/2016 20,000.00
-14,492.00
A-1500 C1 5,500.00 2,355.00 BBI.136 22/11/2016 855.00 7,855.00
BBI.100 17/08/2016 1,500.00
2,355.00
A-1500 C2 -2,824.43 BBI.128 14/10/2016 -2,824.43 2,952.00 127.57
TOTAL TITLE 1
-65,000.00
A-2000 C1 215,250.00 10,000.00 BBI.123 12/10/2016 10,000.00 225,250.00
A-2000 C2 77,693.44 BBI.112 16/09/2016 65,000.00 1,977.42 79,670.86
BBI.125 12/10/2016 15,000.00
BBI.134 22/10/2016 -2,306.56
77,693.44
A-2010 C1 96,950.00 -20,000.00 BBI.123 12/10/2016 -10,000.00 76,950.00
BBI.140 23/11/2016 -10,000.00
-20,000.00
A-2100 C1 37,695.00 38,000.00 BBI.72 17/02/2016 1,000.00 75,695.00
BBI.78 26/02/2016 10,000.00
BBI.86 17/03/2016 40,000.00
BBI.96 10/06/2016 -5,000.00
BBI.132 25/10/2016 -10,000.00
BBI.140 23/11/2016 10,000.00
BBI.151 14/12/2016 -2,000.00
BBI.158 19/12/2016 -6,000.00
38,000.00
A-2100 C2 -32,836.73 BBI.125 12/10/2016 -15,000.00 70,431.57 37,594.84
BBI.156 16/12/2016 -17,836.73
-32,836.73
A-2101 C1 87,805.00 -17,000.00 BBI.72 17/02/2016 -1,000.00 70,805.00
BBI.78 26/02/2016 -10,000.00
BBI.86 17/03/2016 -40,000.00
BBI.96 10/06/2016 5,000.00
BBI.102 24/08/2016 11,000.00
BBI.132 25/10/2016 10,000.00
BBI.151 14/12/2016 2,000.00
BBI.158 19/12/2016 6,000.00
-17,000.00
A-2200 C1 5,300.00 70,000.00 BBI.68 27/01/2016 70,000.00 75,300.00
A-2200 C2 9,982.32 BBI.114 21/09/2016 -1,183.78 49,799.08 59,781.40
BBI.142 24/11/2016 -5,000.00
BBI.156 16/12/2016 17,836.73
BBI.160 19/12/2016 -1,670.63
9,982.32
A-2300 C1 17,700.00 0.00
17,700.00
A-2300 C2 -9,349.96 BBI.134 22/11/2016 -9,349.96 14,323.55 4,973.59
A-2303 C1 10,500.00 0.00
10,500.00
A-2400 C1 18,800.00 0.00
18,800.00
A-2400 C2 -1,742.67 BBI.134 22/11/2016 -8,562.38 9,700.00 7,957.33
BBI.150 14/12/2016 8,158.80
BBI.160 19/12/2016 -1,339.09
-1,742.67
A-2500 C1 100,900.00 -30,000.00 BBI.92 08/04/2016 -30,000.00 70,900.00
A-2500 C2 -19,256.62 BBI.134 22/11/2016 -19,256.62 47,021.43 27,764.81
A-2500 C8
0.00
A-2600 C1 220,300.00 -66,000.00 BBI.68 27/01/2016 -70,000.00 154,300.00
BBI.82 04/03/2016 -3,000.00
BBI.92 08/04/2016 30,000.00
BBI.173 21/12/2016 -23,000.00
-66,000.00
A-2600 C2 16,214.35 BBI.134 22/11/2016 25,000.00 61,345.10 77,559.45
BBI.160 19/12/2016 -8,785.65
16,214.35
A-2601 C1 32,250.00 26,000.00 BBI.82 04/03/2016 3,000.00 58,250.00
BBI.173 21/12/2016 23,000.00
26,000.00
A-2601 C2 22,440.80 BBI.134 22/11/2016 19,475.52 447.07 22,887.87
BBI.142 24/11/2016 5,000.00
BBI.150 14/12/2016 -2,034.72
22,440.80
A-2602 C1 43,050.00 0.00
43,050.00
A-2602 C2 6,369.75 BBI.150 14/12/2016 -5,425.62 21,760.47 28,130.22
BBI.160 19/12/2016 11,795.37
6,369.75
A-2700 C1 105,000.00 -11,000.00 BBI.102 24/08/2016 -11,000.00 94,000.00
A-2700 C2 -5,000.00 BBI.134 22/11/2016 -5,000.00 5,000.00 0.00
A-2800 C1 728,011.00
728,011.00
A-2800 C2 -698.46 BBI.150 14/12/2016 -698.46 698.46 0.00
TOTAL TITLE 2
63,816.22
B3-000 C1 61,790,837.00
0.00 61,790,837.00
B3-100 C2 1,183.78 BBI.114 21/09/2016 1,183.78 0.00 1,183.78
B3-200 C1
0.00 0.00
B3-200 C2
0.00 0.00
TOTAL TITLE 3
1,183.78
TOTAL Sum: 65,983,548.00 0.00
1,212,639.21 67,196,187.21
2.3 Budget implementation
2.3.1 Budget implementation at a glance
2.3.2 Overall BBI JU implementation Operational expenditure – general comments
One call was launched in 2016. A total amount of € 188 995 048 was budgeted for this call, consisting of the following amounts: € 161 148 756 of voted commitment appropriations, € 27 505 221 of unused CAs from 2014 and 2015, €339 888 reactivated from Call 2015.1 and retained for Call 2015.2 but not used.
Revenue
•100% of EU revenue collected (operations and admin). 100% of BIC funds to administrative costs collected. (Of the EU contribution €500 000 was not actually received but was transferred to the REA by RTD for the expert-evaluators of Call 2016)
Commitments
•98% for operations, 61% for admin (including execution of evaluations costs by REA)
Payments
•100% for operations, 56% for admin (including execution of evaluations costs by REA)
2016 voted CAs: 85%
2014 and 2015 unused CAs
15%
Reactivations Call 2015.1
0%
Total amount of call 2016
There were 29 proposals retained out of a total of 103 eligible proposals received, with a total
requested funding of € 185 602 866.
Of the balance of unused appropriations (€ 3 392 182) an amount of € 3 097 134 (based on an estimated outcome from the call evaluations) was decommitted in 2016 and will be reactivated in 2017, via a budgetary amendment, to supplement the 2017 call. The balance remaining once the actual total requested funding was known (€ 293 865) will be decommitted in 2017 and reactivated in 2018. Total budget expenditure in figures
Please find below a detail of the budgetary implementation for 2016:
EXPENDITURE (Commitment appropriations)
Amended budget 2016
Executed Budget 2016
% Carry over to
2017 (C8)
Available for future use
(N+3 rule) (C2)
Title 1 - Staff expenditure 3 357 069 1 807 295 53.84% 88 636 1 549 774
11 Salaries & allowances 2 953 523 1 555 009
52.65%
14 529 1 398 514
12 Expenditure relating to Staff recruitment
150 400 114 945 76.43% 28 000 35 455
13 Mission expenses 118 200 54 593 46.19% 4 117 63 607
14 Socio-medical infrastructure (inc training)
114 091 74 948 65.69% 41 786 39 143
15 Receptions, events and representation
20 855 7 800 37.40% 204 13 055
Title 2 - Infrastructure and operating expenditure
1 943 753 1 448 619 74.53% 244 323 495 134
20 Rental of buildings and associated costs
273 131 263 035 96,30% - 10 096
21 Information, communication technology and data processing
172 860 150 692 87.18% 45 937 22 168
22 Movable property and associated costs
75 300 64 218 85.28% 6 000 11 082
23 Current administrative expenditure
17 100 8 439 49.35% 2 300 8 661
24 Postage / Telecommunications
20 400 15 850 77.70% 6 931 4 550
25 Expenditure on formal meetings
72 900 37 094 50.88%
35 806
26 External communication information and publishing
462 550 366 388 79.21% 149 015 96 112
27 Studies 121 500 34 140 28.10% 34 140 87 360
28 Experts contracts and evaluations
728 012 508 763 69.88% - 212 248
Title 3 - Operational expenditure
188 995 048 185 602 866 98.21% 335 082 603 3 392 162
30 Previous years’ calls 0 00 0 00 149 525 730 0 00
31 Addition to Call 2015.2 341 071 0 00 0 00% 341 071
32 Call 2016 188 653 977 185 602 866 98.38% 185 556 843 3 051 111
TOTAL 194 295 870 188 858 779 97.20% 335 415 561 5 437 070
53.84% 52.65%
76.43%
46.19%
65.69%
37.40%
0%
20%
40%
60%
80%
100%
Budget execution in Title 1 2016 commitment consumption (%)
74.53%
96.30% 87.18% 85.28%
49.35%
77.70%
50.88%
79.22%
28.10%
69.88%
0%
20%
40%
60%
80%
100%
Budget execution in Title 2 2016 commitment consumption (%)
EXPENDITURE (Payment appropriations)
Budget 2016 Executed Budget
2016 %
Available for future use (N+3
rule) (C2)
Title 1 - Staff expenditure 3 338 335 1 747 743 51.35%
1 590 592
11 Salaries & allowances 2 991 168 1 549 151 51.79%
1 442 017
12 Expenditure relating to Staff recruitment
106 139 95 585 90.06%
10 554
13 Mission expenses 141 913 52 501 37.00%
89 412
14 Socio-medical infrastructure (inc training)
91 133 42 625 46.77%
29 608
15 Receptions, events and representation
7 982 7 881 98.73%
2,952
Title 2 - Infrastructure and operating expenditure
2 065 831 1 309 625 63.39%
756 206
20 Rental of buildings and associated costs
381 871 263 035 68.88%
118 836
21 Information, communication technology and data processing
184 095 177 599 96.47%
6 496
22 Movable property and associated costs
135 081 58 218 43.10%
76 863
23 Current administrative expenditure
33 174 19 773 59.60%
13 401
24 Postage / Telecommunications
26 757 12 831 47.95%
13 926
25 Expenditure on formal meetings
98 665 37 094 37.60%
61 571
26 External communication information and publishing
384 177 232 312 60.47%
151 865
27 Studies 94 000
0.00%
94 000
28 Experts contracts and evaluations
728 011 508 763 69.88%
219 248
Title 3 - Operational expenditure
61 792 021 61 792 021 100.00%
-
30 Previous years’ calls 61 792 021 61 792 021 100.00%
31 Addition to Call 2015.2 0 00
32 Call 2016 0 00
TOTAL 67 196 187 64 849 389 96.51%
2 346 614
52.35% 51.79%
90.06%
37.00%
67.51%
98.73%
0.00%
20.00%
40.00%
60.00%
80.00%
100.00%
Budget execution in Title 1 2016 payments consumption (%)
63.39% 68.88%
96.47%
43.10%
59.60% 47.95%
37.60%
60.47%
0.00%
69.88%
0.00%
20.00%
40.00%
60.00%
80.00%
100.00%
120.00%
Budget execution in Title 2 2016 payments consumption (%)
Administrative expenditure
The 2016 administrative budget was prepared on the assumption that by the beginning of the year: i) all 22 BBI JU staff would be recruited and operational and ii) all necessary furniture and equipment (and office supplies for the whole team) would be purchased. In reality several staff members (7) joined during the course of the year, with 3 left to be recruited in 2017 (one of these being a replacement for a departing staff member). The administrative surplus brought forward from 2015 was €1.1 million in CAs and €1.2 million in Pas, with 75% of this accounted for by Title 1. The overall surplus at the end of the year was €2 million in CAs and €2.3 million in PAs, demonstrating that the original surplus was not absorbed at all, and in fact an additional surplus was created by the 2016 execution.
Overview by title Title 1 – Staff-related costs
Commitment appropriations
Final budget (EUR) Original budget (EUR
Executed Budget year 2016 (EUR)
Execution final budget
Execution original budget
3,357,069 2,473,200 1,807,295 53.84% 73.08%
Payment appropriations
Final budget (EUR) Original budget (EUR
Executed Budget year 2016 (EUR)
Execution final budget
Execution original budget
3,338,335 2,473,200 1,747,743 52.35% 70.67%
Title 2 – Infrastructure and operating expenditure
Commitment appropriations
Final budget (EUR) Original budget (EUR)
Executed Budget year 2016 (EUR)
Execution final budget
Execution original budget
1,943,753 1,719,511 1,448,619 74.53% 84.25%
Payment appropriations
Final budget (EUR) Original budget (EUR
Executed Budget year 2016 (EUR)
Execution final budget
Execution original budget
2,065,831 1,719,511 1,309,625 63.39% 76.16%
54%
73% 75%
84%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Execution final budget Execution original budget
Budget execution - committment appropriations
Title 1 Title 2
52%
71%
63%
76%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Execution final budget Execution original budget
Budget execution - payment appropriations
title 1 Title 2
2.3.3 Highlights of the budgetary execution
1. Commitment appropriations:
Operational: A potential 98% execution relating to the 2016 published call,
based on the ranking list. An amount of €3 098 317 was decommitted from the
global commitment to be reactivated in 2017, and a further balance of €293
865 will be decommitted in 2017 (and reactivated in 2018)
Administrative:
I. for staff expenditure only 54% was executed over the year due to the large surplus carried over from 2015. Execution of the original budget would be 73%, which means that this budget was also too high (because of the assumption that all BBI JU staff would be in place at the beginning of 2016)
II. for infrastructure there was a 75% execution. Building rental execution (96%), IT costs (87%) office furniture (85%) and communications costs (79%) were strong, but other costs were affected by the surplus carried over from 2015, with execution ranging from 28% on studies/audits, to around 78% for postage and telecommunications. € 472 740 of the total budget was committed by the REA Agency on behalf of BBI for call evaluations costs. Execution of the original budget would be 84%.
2. Payment appropriations:
Operational: 100% execution, being the grant pre-financings for the two 2015 calls.
Administrative:
I. for staff expenditure execution was 52% for the reason given in 1.I above. Execution of the original budget would be 71% (see point 1.I above).
II. for infrastructure the overall implementation was 63%. IT costs execution was strong (96%), but most other costs were affected by the surplus brought forward from 2015, with execution ranging from 38% (formal meetings) to 70% (experts’ evaluations). Execution of the original budget would be 76%.
Unused administrative appropriations are to be transferred to 2017 (N+3 rule) via a budgetary
amendment.
2.4 Revenue
The funding of the BBI JU budget 2016 was as follows (in EUR):
Heading Voted income appropriations (EUR)
Amended income appropriations (EUR)
Cashed in 2016 (EUR)
Outstanding balance (EUR)
EU contribution¹ 63 790 233 65 004 056 63 320 705 1 683 351
of which Administrative 1 999 396 3 212 035 1 528 684 1 683 351
of which Operational 61 790 837 61 792 021 61 792 021 0 00
Industry (financial) contribution 2 193 315 2 193 315 1 528 684 664 631
of which Administrative (incl. 2/6 compensation for 2014)
2 193 315 2 193 315 1 528 684 664 631
Other revenues (recoveries) 3 950 3 950 0 00 3 950
TOTAL REVENUES 65 987 498 67 201 321 64 849 389 2 351 932
¹ Includes EFTA at 2.73%
EU contribution
This is the annual subsidy which the BBI JU receives from the European Commission for the BBI JU Programme as foreseen in the Council Regulation (Article 3 (1)) establishing the BBI Joint Undertaking. The subsidy covers both operational and administrative costs up to a total of € 975 000 000 over the 10 year programme.
Industry contribution
Each year the JU sends out debit notes to its industry member (BIC) for its contribution to the administrative costs (usually paid in 2 instalments). In accordance with Article 12 (2) of the Statutes, the administrative costs are to be shared equally between the EC and private members, and over the whole programme shall not exceed € 58 500 000. Due to the fact that the industry (BIC) financial contribution to administrative expenditure was not paid in 2014 because it was not technically feasible to receive the money on the BBI budget lines, a funding agreement was signed between the BBI JU and BIC to enable the recovery of the unpaid amount in 3 instalments covering 2015, 2016 and 2017, with two-sixths being added to the 2016 contribution.
Assigned revenue
There was no assigned revenue in 2016.
3. MULTI-ANNUAL OVERVIEW For what concerns the multi-annual overview of operational budget implementation, BBI will face new challenges in the next years. While until the end of 2016 the operations on the operational budget were limited to commitments and pre-financing payments related to grant management, from 2017 onwards BBI will deal with the reception of cost claim and the implementation of interim and final payments. The amount of these payments will increase in time due to the size of 2015 and 2016 calls. Here below an estimation of the operations to be performed by BBI JU in 2017.
Year 2014 2015 2016 2017
Total awarded grants € 49 653 707.65 € 179 036 974.45 € 185 602 866.04 € 85 264 866.16
Pre-financing € - € 17 713 972.46 € 61 790 836.75 € 50 262 213.47
Interim payments € - € - € - € 19 336 515.53
Final payments € - € - € - € -
4. EVOLUTION OF OUTSTANDING COMMITMENTS
The table below shows the evolution of the budgetary RAL ("reste à liquider") brought forward from
2015, by budget title. The operational balance outstanding at the end of 2016, includes the
RAC ("reste à contracter") on the total L1 commitment raised for the 2016 call, for which all
grants will be committed (L2) and signed in 2017. The administrative RAL at the end of 2016
is expected to be executed (paid) in the first quarter of 2017.
Budget Title
Carry forward
(RAL) from 2015 (EUR)
Commitments made during 2016 (EUR)
De-commitments of RAL (EUR)
Payments (EUR)
Commitments outstanding at end 2016 (EUR)
Administrative Title 1 49 752 1 807 295 -20 669 1 747 743 88 635
Administrative Title 2 127 753 1 448 619 -22 423 1 309 625 244 324
Operational Title 3 212 330 232 188 995 048 -4 450 657 61 792 021 335 082 603
TOTAL 212 507 737 192 250 962 -4 493 749 64 849 389 335 415 562
5. BUDGETARY OUTTURN
The budgetary outturn for a financial year corresponds to the total revenues actually cashed during the year plus appropriations carried over from previous years minus total payments made during the year, minus appropriations (both automatic and non-automatic) carried over to the following year. Below is the budget result as reflected in the BBI JU's annual accounts for 2016:
RESULT OF THE IMPLEMENTATION OF THE BUDGET
EUR '000
2016 2015 Revenue for the financial year 65 487 1 932
Payments against current year appropriations (64 377) (385) Payment appropriations carried over to year N+1 (1 542) Unused payment appropriations carried over from year N-1 – Budget result N-1 Budget result 1 110 5 The revenues for the financial year are composed of the following: EC contribution € 61 608 325
Of which administrative € 1 459 550 Of which operational € 60 148 775 EFTA contribution € 1 681 908
Of which administrative € 39 845 Of which operational €1 642 062 BIC contribution € 2 193 315 Other revenues (recoveries) € 3 950 TOTAL € 65 487 498
The payments for the financial year are composed of the following: Title 1 (staff-related) € 1 747 742 Title 2 (general administrative) € 836 885 Title 3 (operational) € 61 792 021 TOTAL € 64 376 648
The annual accounts also contain a reconciliation of the economic result with the budget result as shown above. The economic result is adjusted for accrual items (such as depreciation) and budgetary items (such as fixed asset acquisitions and members cash contributions).
RECONCILIATION OF ECONOMIC RESULT WITH BUDGET RESULT
EUR '000
2016 2015
ECONOMIC RESULT OF THE YEAR (45 088) 6 873
Adjustment for accrual items (items not in the budgetary result but included in the economic result)
Adjustments for accrual cut-off (net) 42 521 10 474
Unpaid invoices at year end but booked in expenses 18 -
Depreciation of intangible and tangible assets 10 3
Other individually immaterial 2 -
Adjustment for budgetary items (item included in the budgetary result but not in the economic result)
Members' cash contributions collected in the year 65 487 -
Asset acquisitions (less unpaid amounts) (51) (11)
New pre-financing paid in the year and remaining open as at 31 December
(61 791) (17 714)
Payment appropriations carried over to following year (1 542)
Unused carried over payment appropriations from previous year -
Payment appropriations carried over on migration - 1 927
JUs: Budget result N-1 -
Other individually immaterial 2 (5)
BUDGET RESULT OF THE YEAR 1 110 5
The amount indicated for the “accrual cutoff” (net) is composed of the following items: Accrued project cost € 26 622 050
Accrued IKOP € 15 380 206
Staff unpaid leave € 28 889
Administrative accruals € 499 927
Deferred charges - € 10 065
Total € 42 521 007
6. FINANCIAL SITUATION AND MAIN ACHIEVEMENTS The budget The 2016 administrative budget has been managed by BBI JU following its autonomy (in late 2015) and still reflects some aspects inherited from the start-up phase of the organisation. In particular the surplus deriving from an over-budgeting of 2015 and 2016 costs (particularly Title 1) is heavily impacting the execution of the 2016 administrative budget. This situation is currently under discussion and will be addressed in future years, after taking into account the 2017 execution, which is based on a more realistic budget. For the operational budget, execution is showing satisfactory progress with a consistent consumption of commitment (and payment) appropriations, including the unused appropriations from previous calls.
Other financial 2016 has been a year of consolidation of BBI financial and budgetary activities, following the financial autonomy from the European Commission reached towards the end of 2015. BBI JU carried out an effective recruitment process, which also reinforced the Administration and Finance unit during the year. The increase in resources resulted in a general improvement of the performance (e.g. time to pay, budget consumption), a consistent budget implementation strategy (with respect to both the operational and administrative budgets), the elaboration of internal guidelines for routine operations, training of financial staff and establishment of internal methodologies on the accounting side. These actions strengthened the overall performance of BBI JU during 2016, as shown by the progress of the KPIs, and constitute a solid basis on which to further improve and tackle in 2017 any issues encountered in 2016. In particular a strategy has been drafted in respect of the consumption of the administrative budget surplus and an improved budget forecast methodology has been elaborated. As 2016 was the first full year of its budgetary and financial activities, BBI JU accumulated very relevant experience and awareness about procedures and timelines. This factor, together with a relevant and collaborative contact network with the EC services, the Court of Auditors and the other EU Agencies and JUs, will lead to further improvements and fine-tuning of current practices resulting in a more efficient performance.
7. GLOSSARY
Term Definition ABAC This is the name given to the Commission’s
accounting system, which since 2005 has been enriched by accrual accounting rules. Apart from the cash-based budget accounts, the Commission produces accrual-based accounts which recognise revenue when
earned, rather than when collected. Expenses are recognised when incurred rather than when paid. This contrasts with cash basis budgetary accounting that recognises transactions and other events only when cash
is received or paid.
Accounting The act of recording and reporting financial transactions, including the creation of the transaction, its recognition, processing, and summarisation in the financial statements.
Administrative appropriations Administrative appropriations cover the running costs of the Institutions and entities (staff, buildings, office equipment).
Adjustment Amending budget or transfer of funds from
one budget item to another
Adopted budget Draft budget becomes the adopted budget as soon as it is approved by the Budgetary
Authority.
Cf. Budget.
Agencies EU bodies having a distinct legal personality, and to whom budget implementing powers may be delegated under strict conditions. They are subject to a distinct discharge from
the discharge authority.
Amending budget Decision adopted during the budget year to amend (increase, decrease, transfer) aspects of the adopted budget of that year.
Annuality The budgetary principle according to which expenditure and revenue is programmed and authorised for one year, starting on 1
January and ending on 31 December.
Appropriations Budget funding. The budget forecasts both commitments (legal pledges to provide finance, provided that certain conditions are fulfilled) and payments (cash or bank transfers to the beneficiaries). Appropriations
for commitments and payments often differ — differentiated appropriations — because multiannual programmes and projects are usually fully committed in the year they are decided and are paid over the years as the
implementation of the programme and project progresses. Non-differentiated appropriations apply to administrative
expenditure, for agricultural market support and direct payments and commitment appropriations equal payment appropriations.
Assigned revenue External/Internal
Dedicated revenue received to finance specific items of expenditure. Main sources of external assigned revenue
are financial contributions from third countries to programmes financed by the Union. Main sources of internal assigned revenue is revenue from third parties in respect of goods, services or work supplied at their
request; (c) revenue arising from the
repayment of amounts wrongly paid and revenue from the sale of publications and films, including those on an electronic medium. The complete list of items constituting assigned revenue is given in the Financial
Regulation Art.21.2.
Authorising Officer (AO) The AO is responsible in each institution for authorising revenue and expenditure operations in accordance with the principles of sound financial management and for ensuring that the requirements of legality
and regularity are complied with.
Budget Annual financial plan, drawn up according to budgetary principles, that provides forecasts
and authorises, for each financial year, an estimate of future costs and revenue and
expenditures and their detailed description and justification, the latter included in budgetary remarks.
Budget result The difference between income received and amounts paid, including adjustments for carry-overs, cancellations and exchange rate
differences. The resulting amount will have to be reimbursed to the funding authority as provided in the Financial Regulation for Agencies.
Budget implementation Consumption of the budget through
expenditure and revenue operations.
Budget item / Budget line / Budget position As far as the budget structure is concerned, revenue and expenditure are shown in the
budget in accordance with a binding nomenclature which reflects the nature and purpose of each item, as imposed by the
budgetary authority. The individual headings (title, chapter, article or item) provide a formal description of the nomenclature.
Budgetary authority Institutions with decisional powers on budgetary matters: the European Parliament and the Council of Ministers
Budgetary commitment A budgetary commitment is a reservation of appropriations to cover for subsequent expenses.
Cancellation of appropriations Unused appropriations that may no longer be used.
Carryover of appropriations Exception to the principle of annuality in so
far as appropriations that could not be used in a given budget year may, under strict conditions, be exceptionally carried over for use during the following year.
Commitment appropriations Commitment appropriations cover the total
cost of legal obligations (contracts, grant agreements/decisions) that could be signed in the current financial year. Art. 7 FR: Commitment appropriations cover the total cost in the current financial year of legal obligations (contracts, grant
agreements/decisions) entered into for
operations extending over more than one year.
De-commitment Cancellation of a reservation of appropriations
Differentiated appropriations Differentiated appropriations are used to finance multiannual operations; they cover, for the current financial year, the total cost of the legal obligations entered into for operations whose implementation extends
over more than one financial year. Art. 7 FR: Differentiated appropriations are entered for multiannual operations. They consist of commitment appropriations and payment
appropriations.
Earmarked revenue Revenue earmarked for a specific purpose, such as income from foundations, subsidies, gifts and bequests, including the earmarked revenue specific to each institution. (Cf. Assigned revenue)
Economic result Impact on the balance sheet of expenditure and revenue based on accrual accounting rules.
Entitlements established Entitlements are recovery orders that the European Union must establish for collecting income.
Exchange rate difference The difference resulting from currency
exchange rates applied to the transactions concerning countries outside the euro area,
or from the revaluation of assets and liabilities in foreign currency at the closure.
Expenditure Term used to describe spending the budget from all types of funds sources.
Financial regulation (FR) Adopted through the ordinary legislative procedure after consulting the European Court of Auditors, this regulation lays down the rules for the establishment and
implementation of the general budget of the European Union. (OJ L 298, 26.10.2012)
Funds Source Type of appropriations (e.g.: C1, C2, etc.)
Grants Direct financial contributions, by way of donation, from the budget in order to finance either an action intended to help achieve an
objective part of an EU policy or the functioning of a body which pursues an aim of general European interest or has an objective forming part of an EU policy.
Implementation Cf. Budget implementation
Income Cf. Revenue
Joint Undertakings (JUs) A legal EU-body established under the TFEU.
The term can be used to describe any collaborative structure proposed for the "efficient execution of Union research, technological development and demonstration programmes".
Lapsing appropriations Unused appropriations to be cancelled at the end of the financial year. Lapsing means the cancellation of all or part of the authorisation to make expenditures and/or incur liabilities which is represented by an appropriation.
Legal base (basic act) The legal base or basis is, as a general rule,
a law based on an article in the Treaty giving competence to the Community for a specific policy area and setting out the conditions for fulfilling that competence including budget implementation. Certain Treaty articles
authorise the Commission to undertake certain actions, which imply spending, without there being a further legal act.
Legal commitment A legal commitment establishes a legal
obligation towards third parties.
Non-differentiated appropriations Non-differentiated appropriations are for operations of an annual nature. (Art. 9 FR). In the EU-Budget non-differentiated appropriations apply toadministrative
expenditure, for agricultural market support and direct payments
Operational appropriations Operational appropriations finance the different policies, mainly in the form of
grants or procurement.
Outstanding commitment Legal commitments having not fully given rise to liquidation by payments. Cf. RAL.
Outturn Cf. Budget result
Payment A payment is a cash disbursement to honour legal obligations.
Payment appropriations Payment appropriations cover expenditure due in the current year, arising from legal commitments entered in the current year and/or earlier years (Art. 7 FR).
RAL Sum of outstanding commitments. Outstanding commitments (or RAL, from the
French ‘reste à liquider’) are defined as the amount of appropriations committed that have not yet been paid. They stem directly from the existence of multiannual programmes and the dissociation between commitment and payment appropriations.
(Cf. Outstanding commitments).
Recovery The recovery order is the procedure by which the Authorising officer (AO) registers an entitlement by the Commission in order to retrieve the amount which is due. The
entitlement is the right that the Commission has to claim the sum which is due by a debtor, usually a beneficiary.
Result Cf. Outturn
Revenue Term used to describe income from all sources financing the budget.
Rules of application Detailed rules for the implementation of the
financial regulation. They are set out in a Commission regulation adopted after consulting all institutions and cannot alter the financial regulation upon which they depend.
Surplus Positive difference between revenue and
expenditure (see Budget result) which has to be returned to the funding authority as provided in the Financial Regulation.
Transfer Transfers between budget lines imply the
relocation of appropriations from one budget line to another, in the course of the financial year, and thereby they constitute an exception to the budgetary principle of specification. They are, however, expressly
authorised by the Treaty on the Functioning of the European Union under the conditions
laid down in the Financial Regulation. The FR identifies different types of transfers depending on whether they are between or within budget titles, chapters, articles or headings and require different levels of authorization.
