Deliberazione n.6/2013. Audit su Annual Progress Report del CERN. SEZIONE DI CONTROLLO PER GLI AFFARI COMUNITARI ED INTERNAZIONALI

Transcription

1 Deliberazione n.6/2013. Audit su Annual Progress Report del CERN. SEZIONE DI CONTROLLO PER GLI AFFARI COMUNITARI ED INTERNAZIONALI IL COLLEGIO PER L ATTIVITA DI CONTROLLO SUL CERN composto dai Magistrati: Dott. Giuseppe COGLIANDRO Dott. Michele COSENTINO Dott. Carlo MANCINELLI Presidente Consigliere Consigliere Vista la decisione del 29 marzo 2011 del Consiglio di Presidenza con la quale è stato deliberato di affidare alla Sezione di controllo per gli affari comunitari ed internazionali l organizzazione delle funzioni di External auditor presso il CERN; Vista l ordinanza n. 2/2012 con la quale è stato istituito, nell ambito della suddetta Sezione, un apposito Collegio per la citata attività di revisione; Visti i principi INTOSAI; Visti i principi internazionali di Audit applicabili all attività di certificazione dalle Istituzioni Superiori di Controllo (International Standards of Supreme Audit Institutions ISSAI), richiamati dalla Dichiarazione di Lima; Visti i principi internazionali di Audit (International Standards on Auditing ISA) emessi dall International Auditing and Assurance Standards Board (IAASB), organo dell International Federation of Accountants (IFAC); Visti i principi contabili internazionali per il settore pubblico (International Public Sector Accounting Standards IPSAS) che richiamano i principi contabili internazionali (International accounting standards IAS); Considerato che, con lettera formale del Presidente del Council del CERN, è stato chiesto all External Auditor dell Organizzazione di svolgere anche l attività di audit sull Annual Progress Report del CERN, documento introdotto nel 2008, il cui scopo è quello di confrontare, per attività, i risultati ottenuti rispetto agli obiettivi concordati dal

2 Consiglio e anche di confrontare le spese effettive, per obiettivo e attività, con le risorse di pianificazione; Considerato che l attività di audit sull Annual Progress Report del CERN, pur non dando luogo ad un ulteriore certificazione di bilanci, fornisce tuttavia una relazione di audit finale, chiamato Assessment and comments by the External Auditors on the Annual Progress Report ; Viste le determinazioni assunte dall apposito Collegio nella seduta del 23 maggio 2013 in merito alle risultanze dell attività istruttoria sul Rapporto di attività CERN per l anno 2012 (Annual Progress Report 2012); Considerato concluso il relativo audit ; DELIBERA di approvare l allegata relazione finale (Assessment and comments by the External Auditors on the Annual Progress Report 2012) riguardante l attività di audit sull Annual Progress Report 2012 del CERN. Roma 23 maggio 2013 IL PRESIDENTE F.to Giuseppe Cogliandro F.to Consigliere Michele Cosentino F.to Consigliere Carlo Mancinelli (relatore) Depositata in Segreteria il 18 luglio 2013 Il Dirigente F.to Maria Teresa Macchione

3 CERN/FC/5738 Original: English 1 June 2013 ORGANISATION EUROPEENNE POUR LA RECHERCHE NUCLÉAIRE CERN EUROPEAN ORGANIZATION FOR NUCLEAR RESEARCH Action to be taken Voting Procedure For Discussion FINANCE COMMITTEE 344 th Meeting 19 June For Discussion COUNCIL 167 rd Session 21 June ASSESSMENT AND COMMENTS BY THE EXTERNAL AUDITORS ON THE ANNUAL PROGRESS REPORT 2012

4 CERN/FC/ ASSESSMENT AND COMMENTS BY THE EXTERNAL AUDITORS ON THE ANNUAL PROGRESS REPORT 2012 INTRODUCTION The Annual Progress Report (APR) is a key document in the new governance of the Organization (CERN/2777), introduced in 2008, and we appreciate that the External Auditors are included in the review process of this document and are given an opportunity to discuss it with the Management and to provide suggestions on it. These suggestions include the information needed to form the basis for future Efficiency Audits of selected activities of the Organization, as also directly requested to us by the former President of the Council, Prof. Akesson, in March Comparing the APR 2012 with annual progress reports of previous years, we acknowledge, again this year, further substantial improvements of the document, in particular in terms of readability and link with other key documents such us the MTP (Medium Term Plan) and the Annual Accounts, and in terms of transparency of information provided and accuracy of the figures provided. Therefore, this year we will not introduce new suggestions, but we only follow-up suggestion of previous years. After constructive discussions with the CERN Management on significant issues, we are pleased to provide, in a follow-up table (Annex 1), the summary of all our comments and/or suggestions, jointly with the Management s reply.

5 CERN/FC/ Annex 1 Follow-up of the 2008, 2009, 2010 and 2011 suggestions We acknowledge that the Management has implemented most of our suggestions and we have summarized our further comments in a grid which shows the Management s replies to them and the state of implementation of their planned action. In this Annex, we followed up our past suggestions and we report on their implementation status. When our suggestions have been correctly and timely implemented, we have classified them as closed, whereas, in the case where a suggestion is still waiting for full implementation, we have classified it as in progress.

6 CERN/FC/ ) Suggestions and Comments on previous Annual Progress Reports The followings are the reported suggestions and comments and the related Management s reply, after discussion and agreement with the Management. Each suggestion followed up maintains the numbering given in that specific year. Ref. N Corte dei Conti Financial Years 2011 Standard/Fact Suggestion Management's Reply Implementation 1/ #3 Expenses by Activity As also stated in the APR 2010, while most of the categories of expenses related to scientific research and experiments are now in depth examined with an analysis of the goals, achievements, risks and future prospects, we would like to highlight that, although we acknowledge some improvements, other categories of expenses, such as general facilities and logistics, and administration, are not fully analysed in details. Therefore, as last year, we suggest enhancing the analysis of the above mentioned categories of Expenses, specifying better the categories and/or the activities and sub-activities with a direct and clear link with goals, achievements and future prospects. The overall activity breakdown proposed by the Management was accepted by Council. In the APR 2012, even more details were provided than in previous Annual Progress Reports for these activities. The Management considers the current level of details and information sufficient, also in view of keeping the report concise and readable. 2/2011 Expenses by Activity In the APR 2011 on page 9, Figure 1 Summary of Revenues and Expenses by Activity under the heading Balance there is an indication of the 60 MCHF utilised for the recapitalization of the Pension Fund. Due to the fact that this recapitalization is introduced in the APR for the first year, we would have expected a more detailed description on the effect of the annual balance, such as which programmes have been delayed or abandoned, and a direct link with the MTP explaining the effect in the longer term. 3/ #4 2009#4 Revenues by Activity In APR 2010, we suggested to enhance the description and review of certain Revenues categories, such us external revenues for the new amphitheatre, financial revenues, knowledge and technology transfer and sales and miscellaneous, with particular regard to deviations from budget and to goals, achievements and We suggest improving the level of information with a detailed description over the effect of the Pension Fund additional funding on the future prospects over research programmes. For a better understanding of revenues a with regard to objectives, achievements and future prospects in the longer term we furthermore suggest to continue enhancing descriptions and detailed analysis of Revenues; for instance, The APR 2012 includes the reference to the Council decision in 2010 introducing this annual payment. There is no impact on the programmes but a delay in the period to repay the LHC debts as shown in the MTP towards 2020 as explained in the MTP documents and by Management to Council in 2010, 2011 and The June version of the APR will highlight this link with reference to the pages concerned. Significant efforts were made in the APR 2012 to explain the revenue headings and variations in more detail. Based on last year s assessment, this has been further detailed. The Management considers the current level of analyses Closed Closed

7 CERN/FC/ Ref. N Corte dei Conti Financial Years 2011 Standard/Fact Suggestion Management's Reply Implementation risks. In APR 2011, we acknowledge a further improvement of the descriptions and analysis of Revenue s categories. KTT and Outreach should be treated separately, with a better descriptions of objectives and future prospects, and EU Contributions - already with a good level of description and with clear self-explaining tables should be enhanced in the descriptions about risks and future prospects and longer term with a better link with the MTP. by revenue heading adequate. This applies even more as more than 95% of all revenues are regular contributions from CERN s Member States. 5/2011 Efficiency Audits: Objectives and Key Performance Indicators are needed We have performed a review of key performance indicators in the APR s activity Administration (reference page 22 and 23 of the APR) and we found that although key performance indicators were utilized by the Management for internal monitoring of efficiency and effectiveness mainly for the internally set objectives (operational objectives), in certain case they were not directly linked with Council s objectives. Moreover, other revenues, that, for historical reason, are grouped under expenses also need an increased level of details We are aware that Management is committed to implement performance indicators and we suggest continuing to re-enforce the link between key performance indicators, Council and operational objectives. A document on CERN s scientific efficiency, its technological impact, training output, service to its users and costs with respect to other comparable organisations was presented in March 2013 answering a direct request from Council. It will remain difficult to include any key performance indicators in the APR. 6/2011 Benchmarking as a corroborative tool for assessing the achievement of objectives We are aware that Management, following the ITIL best practices for Service Management, has started developing a project of monitoring processes, that can also be used for future benchmarking. We welcome and we suggest going on with this project. Progress has been made and is reported in the APR. With respect to 2011, the HR and FP services are entered into the service management. Work is on-going to include more IT and technical infrastructure services in the future.

8 CERN/FC/ Date of issuance Corte dei Conti Financial Years 2008/2009/2010 Standard/Fact Suggestion CERN Management Reply Corte dei Conti Assessment FY /2008 In the Report on CERN Governance (CERN/2777-annex I) it is stated that ( ) Results-Based Budgeting is thus a result-driven budgeting process in which: - programme formulation and resources justification involve a set of predefined objectives, expected results, outputs, inputs and performance indicators which constitute a logical framework ( ). Activities in the APR section II Progress Report (page 4-15) are not linked with performance Indicators. 2009#6 The Council requested since 2008 that information in the APR should form the basis for future Efficiency Audits of selected activities of the Organization. Performance Indicators should be linked with the progress achieved and clearly defined in a table (as proposed in abovementioned point 3). When assessing economy, efficiency and effectiveness, which are the essence of performance audits, of certain activities and/or scientific projects considered crucial by the Council, internal data (and consequently the Key Performance Indicators KPI) ought to be sufficient and reliable and, thus, an exhaustive and detailed set of information is required. Therefore, for measuring the performance of a given activity, and especially in order to provide more assurance to the Council on results obtained, it should be envisaged that Management, for corroborating its achievements, not only KPIs are predominantly internal management instruments. For the 2012 Annual Progress Report, key statistics on health and safety, incidents, training and development, trainees as well as scientific publications are part of the executive summary, with KPI numbers being tabled in the fact sheets and explained in more detail under the chapter Additional Information. The Management is not against efficiency audits and answered on various occasions to specific requests of Council, FC and SACA and benchmarking items. The APR is supposed to be a concise and readable document. The Management will therefore continue to answer requests on benchmarking, efficiency studies and comparisons outside the APR in a timely manner to the committees concerned.

9 CERN/FC/ Date of issuance Corte dei Conti Financial Years 2008/2009/2010 Standard/Fact Suggestion CERN Management Reply Corte dei Conti Assessment FY 2012 shows in the APR internal KPI data, but also uses benchmarking techniques wherever and whenever possible, also for comparing them with internal KPI. 1/2010 In the Report on CERN Governance (CERN/2777-annex V par.2) it is stated that The achievement shall be broken down following the structure of the Budget document and be compared to the planned goals and objectives ( ). Certain categories are not compared to planned goals and objectives. For instance no goals are mentioned on page 18 of APR 2010 (activities classified as general facilities and logistics and informatics ), on page 22 (centralized expenses), on page 24 ( linear collider detector R&D), page 26 ( Other R&D computing detectors -), page 28 (LHC machine upgrade). We suggest enhancing the analysis of such categories of Expenses, specifying in a better way the categories and/or activities and sub-activities with a direct and clear link with goals, achievements and future prospects. Identical structure of the Final Budget 2012 and the APR Closed.