(Article 131(2) of the Financial Rules of the Innovative Medicines Initiative Joint Undertaking)

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1 Annual report of the Executive Director to the Discharge on measures taken in the light of the Discharge s recommendations of 2012 in respect of the implementation of the budget of 2010 (Article 131(2) of the Financial Rules of the Innovative Medicines Initiative Joint Undertaking) IMI/OUT/ /12/2012

2 1 Introduction Article 131(1) of the Financial Rules of the Innovative Medicines Initiative Joint Undertaking (IMI JU) states: The Executive Director shall take all appropriate steps to act on the observations accompanying the European Parliament s discharge decision and on the comments accompanying the recommendation for discharge adopted by the Council. Article 131(2) also stipulates that: At the request of the European Parliament or the Council, the Executive Director shall report on the measures taken in the light of these observations and comments. He/she shall send a copy thereof to the Commission and the Court of Auditors. This report provides an overview of the measures taken by IMI JU in the light of observations and comments made by the Discharge on 10 May 2012 in respect of the implementation of the budget of 2010 [C7 0300/ /2241(DEC)]. 2 European Parliament's observations and measures taken by IMI JU C7 0300/ /2241(DEC) Budget and Financial Management 3.5 Calls on the Joint Undertaking and its members to take appropriate actions to ensure a timely definition of the scientific priorities and call topics and to enable the budget to be balanced in future financial years. The IMI Scientific Research Agenda (SRA) was revised and approved by the Governing Board in July 2011 to reflect the advances and changes in industry. The SRA is a multiannual plan that sets out the research priorities that are translated into Calls for proposals. It has served as a platform from which five new Calls (Calls 4, 5, 6, 7 and 8) were launched since July The increased frequency of the Calls and the shortened timeframes required from the launch of each Call to the signature of the Grant Agreements (with the introduction of simplified and streamlined operational procedures), have significantly improved budget execution with commitments and payments for operational costs reaching 79% and 87% respectively in 2011 and with both expected to be closer to 100% for the year Page 2 of 14

3 Evaluation of contributions in kind 3.7 Urges the Joint Undertaking and its Governing Board to update the discharge authority on: the ongoing consultations on the methodology to be used for the evaluation of in-kind contributions by member companies of EFPIA in the Joint Undertaking's projects; and The methodology to be used for the evaluation of in-kind contributions by member companies of EFPIA in IMI JU projects was approved by the Governing Board on 11 November 2011 with the revision of the model Grant Agreement. Individual reports on in-kind contributions since the launch of the first projects in 2009 were submitted in first quarter of 2012 and are now being regularly submitted in accordance with the agreed annual reporting cycle of each project. the submission of individual reports on the in-kind contributions following the approval by the Governing Board of the revised model grant agreement. Procurement Procedures 3.9 Encourages the Joint Undertakings to continue to resort as often as possible to joint procurement procedures. IMI JU pro-actively identifies joint procurement initiatives with other Joint Undertakings or with the European Commission in order to benefit from cost savings and synergies. Apart from Information Technology and Audit services, IMI JU has entered into joint procurement arrangements for other services and works including office rental, interim services, internet and telephony services Urges the Joint Undertaking to regularly update its list of contracts awarded on its website. The list of awarded contracts is annually updated on the IMI JU website ( Page 3 of 14

4 Call for Proposals and Projects Negotiations 3.14 Calls on the Joint Undertaking to inform the discharge authority about the verification mechanisms that it implements to ensure the full independence of experts and observers and therefore to mitigate the risks of conflict of interests during evaluation. Experts by nature and by background have different interests that need to be assessed. All experts are screened by IMI scientific staff before being appointed. They must also complete a Declaration of Interest Form each time they are requested to provide their expertise (e.g. experts evaluators, reviewers or independent observers) and are also bound to alert IMI should a conflict of interest be identified during an evaluation session or a rise. All experts Declarations of Interest are duly registered in a dedicated register. During evaluations and reviews, experts only take consensual decisions which are never the outcome of a single individual decision but resulting from a multidisciplinary input by different experts with different interests. In addition, members of the legal team attend all IMI evaluations and reviews sessions to address any potential situation of conflict of interest that may arise during the process. Apart from such built-in preventive measures, independent observers are also appointed to observe and monitor the evaluation and selection of proposals and report back on any detected risk or occurrence of potential conflict of interest Asks the Joint Undertaking to inform the discharge authority of the level of implementation of each of the measures included in the action plan for Call 3 which was based on the Independent Observers' Report of the Evaluation of Stage 2 of the Second Call. Detailed independent information and comments from the Independent Observers on the progress made in each area are published on IMI website. IMI 7th Call for proposals (2012) - Independent Observers' Report of Stage 1 IMI 6th Call for proposals (2012) - Independent Observers' Report of Stage 1 IMI 5th Call for proposals (2012) - Independent Observers' Report of Stage 2 - Independent Observers' Report of Stage 1 IMI 4th Call for proposals (2011) - Independent Observers' Report of Stage 2 - Independent Observers' Report of Stage 1 Page 4 of 14

5 IMI 3rd Call for proposals (2010) - Independent Observers' Report of Stage continued - Independent Observers' Report of Stage 2 All the recommendations and actions identified as a result of the Call 2 Stage 2 Report by the Independent Observers in September 2010 were addressed. Additional actions were also adopted in response to new recommendations from Independent Observers for the subsequent Calls 3, 4, 5, 6 and 7 during 2011 and Calls on the Joint Undertaking to develop an Action Plan with concrete measures and deadlines to prevent conflicts of interest and strengthen transparency and to provide it to the discharge authority. IMI is in the process of finalising a comprehensive independence policy to manage potential conflicts of interests covering all aspects of IMI JU s operations and procedures. It will include both preventive and corrective elements and a systematic approach will be applied to ensure consistency in its application and adequate execution and follow-up. Internal control systems Urges the Joint Undertaking to complete its internal controls and financial information systems. Internal controls based on a clearly defined framework of 16 Internal Control Standards have been further strengthened and are continuously monitored through supervisory controls and internal checks. The Internal Control Standards (ICS) Action Plan is reviewed twice a year. A self-assessment exercise was carried out in 2012 by the Internal Control Coordinator and is currently being updated for Calls on the Joint Undertaking in particular, to establish and document important elements of its internal control system like the accounting procedures and controls relating to the closure of accounts and the recognition and measurement of the operational expenditure. The current procedures and methodologies governing the accounting and budgeting processes follow instructions from the European Commission (Directorate-General for Budget). Internal processes are also being reviewed in order to strengthen the accurate and timely reporting of operational expenditure. Page 5 of 14

6 3.18 Calls on the Joint Undertaking and in particular its Accounting Officer to formalise and validate the underlying business processes in due time as required by the financial rules and calls on the Joint Undertaking to explain this delay to the discharge authority. The validation exercise was concluded by June 2011, which is 18 months after the autonomy of IMI JU. This timeframe was essential in order to ensure that the systems and processes to be validated had reached a sufficient level of maturity and execution to allow for a meaningful and useful exercise. A second follow-up exercise was concluded in September 2012 to update the results and also validate any changes to the systems and work practices Urges the Joint Undertaking to develop an Action Plan with concrete measures and deadlines to speed up the formalisation of policies and procedures in in strategic IT planning and monitoring cycle, IT Risk management and Business Continuity Plan and Disaster Recovery Plan and to report the progress achieved to the discharge authority. Systems and procedures related to IT Risk management, business continuity and disaster recovery have been formalised and put in place. With regard to IT planning and monitoring, priorities are currently set on an annual basis in IMI JU s Annual Implementation Plan and reported in Annual Activity Reports. A multi-annual strategic IT plan is also being developed with other Joint Undertakings, with a specific focus on common infrastructures. Page 6 of 14

7 3.20 Urges the Joint Undertaking to implement the ex-post audit strategy without delay by carrying out on-the-spot checks and financial audits among the participants of the Research Activities funded by the Joint Undertaking. Requests an annual report on the implementation of the ex-post audit strategy drawn up by its Executive Director with the conclusions of such audits, the recommendations made and the financial corrections imposed. The ex-post audit strategy is being fully implemented with the continual launch, conduct, completion and follow-up of on-the-spot checks and audits of participants. Fifty-one audits have been concluded and another nine are in the process of being finalised. A further forty-two ex-post audits are scheduled to be launched throughout The degree of implementation of the ex-post strategy is also systematically reported in the Annual Activity Report of IMI JU which is sent to the discharge authority and the European Court of Auditors by 15 June of each year. Internal Audit 3.25 Calls on the Joint Undertaking to inform the discharge authority about the state of preparation and implementation of the strategic audit plan for the period A Coordinated IAS-IAC Strategic Audit Plan for was endorsed by the Governing Board on 3 November The first internal audit was launched in Page 7 of 14

8 3.28 Requires the Joint Undertaking to communicate to the discharge authority the measures adopted, with their implementation timeframe, to address the recommendations of the interim review that was carried out in terms of Article 11(2) of the Joint Undertaking's Founding Regulation (EC) No 73/2008 and to provide regular updates on the progress achieved. Performance Recommendations of the interim review 1. Continuously improve stakeholder involvement in IMI-supported research projects IMI JU Actions and timelines Simplification and streamlining of the call cycle, application and evaluation process, documents for submission, guides and reporting processes. Measures were put in place and implemented from A shorter time interval between the launch of Calls for proposals and the initiation of projects has been achieved. Several Calls launched each year, from 2012 with Calls launched as soon as a Topic has been identified. The revised Grant Agreement, approved on 11 November 2011, further encouraged and facilitated participation in IMI projects by clarifying several pending issues. The Financial Guidelines issued in January 2012 provided additional guidance to participants. Two help desks, one for SMEs and another for guidance and support on intellectual property (IP) rights were established and made fully operational in % of participants in IMI projects are SMEs Impressive mobilisation of SME in IMI s 5 th Call. Interaction with SMEs in IMI projects has also been increased with a survey. Page 8 of 14

9 IMI JU also interacts with pan- European umbrella associations representing SME to promote and communicate the activities of IMI, encourage increased engagement of SMEs in IMI and to share knowledge and data. The IP Guidance note was more widely communicated to targeted audiences. Guidance to consortia on IP issues during preparation of full project proposals and during negotiations. Continuous support is also given to projects on IP issues continued Introduction in 2012 of non-eu EFPIA in-kind contributions as matching contributions for research activities in areas with high public health need. Increased participation of Patient Organisations in IMI projects. 2. Continuously ensure EFPIA and Commission commitment to IMI s success and sustainability Simplification task force set up in 2011 with the European Commission and EFPIA led to the simplification and streamlining of IMI processes, including the forms of future Calls. Active role by the Hever Group which gathers the global R&D heads of the major pharmaceutical companies to define and identify gaps in IMI s strategy that should be addressed in the near future. IMI JU support and participation in the ongoing assessments, consultations and legislative debate on Horizon 2020 and the future of public private partnerships in this sector. Page 9 of 14

10 3. Ensure excellence and exploit new ways to support IMI scientific objectives Revised Scientific Research Agenda, approved in July 2011, has provided a new framework and set the scene for more frequent Calls with large-scale, game-changing projects. Coordination with other similar initiatives was strengthened in 2011 through the signature of memoranda of understanding with the Clinical Path Institute (C-Path) and the Juvenile Diabetic Research Foundation (JRDF) continued Launch of a new Call for proposals in August 2012 to provide funding for new scientific opportunities in ongoing IMI JU collaborative projects. Increased interactions in with regulatory authorities, the European Medicines Agency and the Food and Drug Administration to gain particular insights on potential Call topics. Greater involvement in of the States Representatives Group (SRG) in the consultation process preceding each Call. Increased sharing of information and statistics on IMI achievements with the SRG. 4. Improve IMI communication A comprehensive communication strategy was developed and approved in 2011 and updated for Communication publications and activities were increased in 2011 and 2012 to generate interest and improve visibility via different channels among different stakeholders and to harness the involvement of academic teams, small and medium sized enterprises, regulatory agencies and patients organisations. Page 10 of 14

11 Outreach was extended in 2011 and 2012 to new stakeholders across Europe through IMI events and external events. Ongoing increased communication efficiency through engaged multipliers, ambassadors and network organisations as well as target audience communication approach. Sharp increase in coverage on IMI projects in the specialised and scientific press. Sustained increase in web presence in 2011 and continued 5. Reinforce and streamline decision making and wellfunctioning processes Office re-location in January 2011 with better facilities and required space to operate. Re-organisation of the Executive Office, the consolidation of operations, as well as the engagement and re-deployment of additional staff in 2011 to better address organisational and stakeholder demands. Achievement of the authorised maximum staff complement in 2011 and Consolidation, adaptation and further development of information technology environments and tools in 2011for better coordination with the Governing Board, EFPIA, EC, SRG and the Scientific Committee. 6. Ensure best use of IMI results and IMI sustainability A knowledge management working group was set up in Q and a list of activities has been carried out in 2011 and Page 11 of 14

12 IMI JU subscribed to the Clinical Data Interchange Standards Consortium (CDISC) to ensure data standards homogenisation in IMI Projects. Joint meeting with C-Path and the Food and Drug Administration of the US on 1 December 2011 on transatlantic collaboration. IMI-CDISC training and workshops in 2011 and The successful organisation of Stakeholder Forums in 2011 and 2012 to engage stakeholders in discussions on IMI activities continued Interim reviews have been systematically undertaken for all Call 1 projects between 2011 and 2012 and results are being used to support the projects. 7. Develop monitoring and evaluation processes Key Performance Indicators (KPI) framework was identified and endorsed by the Governing Board in KPI targets for 2012 were approved by the Governing Board in Q First KPI measurements were presented in the 2011 Annual Activity Report. IMI is promoted through different channels as the most attractive programme in Europe and advantage is taken to raise awareness on success stories and testimonies of on-going projects. Publication and promotion of early achievements of the projects throughout 2011 and 2012, including events and publications. Page 12 of 14

13 Lack of host State agreement 3.29 Requests that the Joint Undertaking should rapidly conclude a host agreement with Belgium concerning office accommodation, privileges and immunities and other support to be provided by Belgium to it as provided by its Founding Regulation (EC) No 73/2008. Host agreement with Belgium was signed on 2 February Horizontal observations on the Joint Undertakings 3.35 Recommends that information is included in the Joint Undertakings Annual Activity Reports on the monitoring and review of their respective ongoing projects. IMI JU s Annual Activity Report for 2012 will include more detailed information on the outcomes of the interim review and the progress being achieved by the different projects Calls on the Joint Undertakings to inform the discharge authority on the verification mechanisms which exist in their respective structures to enable a proper management and prevention of conflicts of interest. The prevention and management of conflicts of interest is of paramount importance, as reflected in Article 21 of the Statutes annexed to the Regulation. Several implementing measures have been put in place in IMI JU s operational processes to prevent such risks from occurring. Indeed, any individual involved in the activities of IMI JU has to comply with well-established and enforced prescriptive rules. IMI JU has recently undergone a comprehensive internal review of its procedures and processes in place for the prevention and management of Conflict of Interest. The revised consolidated policy document on the proper management and prevention of conflicts of interest is currently in the final stages of development and will be sent to the European Parliament once endorsed by the Governing Board. Page 13 of 14

14 3.37 Recommends that the Joint Undertakings, as relatively small structures and geographicallyconcentrated, should pool their resources where possible. The five Joint Undertakings operating from the same building in Brussels are already exploiting synergies and pooling resources through the joint procurement of a number of goods, works or services as well as joint calls for recruitment and the sharing of meeting rooms, expertise and other resources. In additional there is regular coordination and consultations on common strategic and operational issues at Executive Director level, as well as functional and administrative levels. Page 14 of 14

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