What changed between the draft committee report and the plenary report

Changed:F. Whereas the UK and Switzerland are no longer associated with the F4E’sJoint Undertaking’s ITER activities noror with the members of F4E;Joint Undertaking;

Changed:G. whereas, to increase transparency, the Joint Undertaking should disclose in its annual accounts, relevant information regarding members’ contributions at programme level; whereas, for each programme under which they operate, the Joint Undertaking should present per member category up to the year-end, all relevant information including the legal contribution targets set for the respective programme, the volume of contributions received, and the volume of legal commitments; whereas the Joint Undertaking should continue to improve transparency;

Changed:1. Notes that the report of the Court of Auditors (the ‘Court’) on the Joint Undertaking’s annual accounts for the financial year of 2022 (the ‘Court’s report’) finds the annual accounts for the financial year of 2022 to present fairly, in all material respects, itsthe financial position of the Joint Undertaking at 31 December 2022 and the results of its operations, its cash flows, and the changes in net assets for the yearfinancial thenyear ended,2022, in accordance with its financialFinancial regulationRegulation and with the accounting rules adopted by the Commission’s accounting officer; notes, in addition, the fact that the underlying transactions to the accounts for the financial year 2022 are, in all material respects, legal and regular;

Changed:2. Underlines that the Court draws attention to the fact that F4Ethe Joint Undertaking disclosed in the 2022 annual accounts its estimate of the total cost for completing its delivery obligations for the ITER project (“Estimate(estimate at Completion”),completion), assessed at EUR 19.119,1 billion (in 2022 values), consisting of the total payments made up to the end of 2022, amounting to EUR 9.29,2 billion and the estimate of the future payments, assessed at EUR 9.99,9 billion (in 2022 values);

Changed:3. Notes, however, that the 2022 Estimateestimate at Completioncompletion is still based on 2016 milestone and cost assumptions and that these estimates will be subject to significant revision, once the new ITER project baseline and requirements are finalised, approved by the ITER Council, and formally communicated to F4E;the Joint Undertaking;

Changed:4. Acknowledges that, during 2022, F4Ethe Joint Undertaking experienced strong inflationary effects, initially due to COVID-19 induced supply chain issues and then (after February 2022) due to theRussia’s war inof aggression against Ukraine; is worried that the estimated impact of these on the totalJoint F4EUndertaking’s Estimatetotal estimate at Completioncompletion amounts to EUR 144M144 million (2008 values) per the latest assessment; notes in addition that this Estimateestimate at Completioncompletion increase is expected to materialise as additional expenditure in the years 2023-2026; notes, moreover, that this inflationary effect is clear in raw material prices, both in existing contracts and tenders received in 2022, and is likely to continue in the future depending on the developing international situation;

Changed:5. Notes with concern that Russia is a member of the ITER-IO, with the obligations to deliver several components for the ITER project to the ITER assembly site in France (Cadarache) and to provide annual contributions to the ITER-IO; stresses that this situation presents a high risk of delays and higher costs for the ITER project; insists on the need to develop solutions in order to mitigate these risks appropriately; considers that any decision taken should safeguard Union's strategic interests and policy priorities;

Changed:6. Is aware that, in November 2022, the 31st ITER Council agreed on a baseline update and in its 32nd meeting of 21-22 June 2023 it commissioned the ITER Director-Generaldirector-general to present a proposal for the updated ITER baseline for review and approval in 2024;

Changed:7. Notes with concern that the risk to budget management was categorised as medium for F4Ethe Joint Undertaking because of new risks of further delays and cost increases to the ITER project, related to the planned new baseline, delivery problems due to the sanctions on Russia, and delays of the French Nuclear Safety Authority in approving design changes occurring during the assembly process;

Changed:8. NotesWelcomes that the EUUnion budget for the 2014-2020 period was fully implemented in commitments at the end of 2020; notes, moreover, that the payment plan for the outstanding commitments is aligned with the delivery plan: EUR 232.2232,2 million for 2022 and EUR 150 million for 2023 and the other remaining payments will materialise in the following years;

Changed:9. Notes that for the Multiannual Financial Framework (MFF) period 2021-2027, the European Council has agreed a budget for the Euratom contribution to ITER amounting to a total value of EUR 5 614 million (in current values) of which EUR 5 560 million (in current values) of direct contribution to the project; notes, in addition, that the ITER Host State and Membership contributions will be added to this figure, subject to the final decision by the relevant Budgetarybudgetary Authorities;authorities;

Changed:10. Notes that F4E’sthe GoverningJoint BoardUndertaking’s governing board (GB) originally adopted the F4EJoint Undertaking’s 2022 budget for EUR 854.49854,49 million in commitment appropriations and EUR 845.45845,45 million in payment appropriations and that it was modified in two amendments in the GB meetings of July and December 2022;

Changed:11. Notes that the final available appropriations, including the carry-over from the previous year wereamount to EUR 981.18981,18 million in commitment appropriations (EUR(compared to EUR 1 069.9069,9 in 2021) and EUR 844.02 million in payment appropriations (EUR(compared 764.8to EUR 764,8 in 2021);

Changed:12. Notes that the execution rate of F4E’sthe Joint Undertaking’s final available budget stood at 72% in commitments and 91% in payments (99.7%(compared to 99,7% and 97.4%97,4% respectively in 2021); notes that, the low implementation rates resulted from the slowdown of operational activities at the level of both the ITER-IO and F4E,the Joint Undertaking, mainly due to the aftermath of the COVID-19 crisis,pandemic, theRussia’s war of aggression against Ukraine, and recent technical design issues concerning the current assembly phase of the ITER project;

Changed:13. Notes, moreover, that the Joint Undertaking reduced the operational payments budget by EUR 92 million by means of an amended budget, and in addition, transferred EUR 9.59,5 million from its operational payments budget to the administrative budget (salaries), to finance the F4EJoint Undertaking’s pension fund obligations to the Commission;

Changed:14. Underlines that the Court considered that there are weaknesses in the implementation of the F4E’sJoint Undertaking’s administrative budget, due to the fact that this budget is set up as non-dissociated appropriations; notes that, as a result, administrative commitments based on administrative contracts and obligations for which payments that have not been made at the year end, may be carried over for payment to the following year;

Changed:15. Notes with concern that, at the end of 2022, for TittleTitle 2 - Infrastructure and Operating Expenditure, the implementation rate was 63% when considering the new 2022 administrative payment budget only, and 69% when also considering the unused administrative payment budget of previous years reactivated in 2022 for implementation, and the cancellation rate of commitment carried over from the previous year was high with an average of 20%;

Changed:16. Notes that, as offrom 31 December 2022, the occupied staff posts at F4Ethe Joint Undertaking included 46 Officials,officials, 224 Temporarytemporary Agentsagents and 164 Contractcontract Agents;agents; notes, in addition, that F4Ethe Joint Undertaking relied on the support of 12.512,5 interim staff (in FTE) and three Secondedseconded Nationalnational Experts;experts;

Changed:17. Notes, in addition, that a total of 11 newcomers (six Temporarytemporary Agentsagents and four Contractcontract Agentsagents and one Secondedseconded Nationalnational Expert)expert) took up duties in 2022 and that four staff members of staff (all Contractcontract Agents)agents) became Temporarytemporary Agentsagents on the basis of selection procedures;

Removed:18. Underlines that the Court considered that the F4E’s senior management situation has remained unstable and in a significant state of transition at the end of 2022 with the departure of the director in June 2022, and the appointment of the head of the Broader Approach Department as ITER-IO Director-General in September 2022, resulting in personnel changes for four of the JU’s seven senior management positions;

Added:18. Notes that the Joint Undertaking has slightly improved the gender imbalance; notes from the consolidated annual activity report, as regards gender balance, that around 38% were female and 62% male in the Joint Undertaking’s workforce; suggests that the Joint Undertaking continues to improve gender imbalance and strives for a balanced geographical balance in this respect;

Removed:19. Echoes the Court’s concern that this situation presents a risk to F4E’s sound management and continuity, at a time when experienced senior management staff will be required to implement the new ITER baselines, which have a significant impact on F4E’s activities;

Added:19. Underlines that the Court considered that the Joint Undertaking’s senior management situation has remained unstable and in a significant state of transition at the end of 2022 with the departure of the director in June 2022, and the appointment of the head of the broader approach department as ITER-IO director-general in September 2022, resulting in personnel changes for four of the Joint Undertaking’s seven senior management positions;

Changed:21.22. Notes, from the Consolidated Annual Activity Report 2022, that the implementation of the actions in the Anti-Fraudanti-fraud Actionaction Planplan has been systematically followed up using a dedicated database (RAPID) which documents further progress as regards the implementation of anti-fraud actions in 2022;

Changed:22.23. Notes, with satisfaction, that throughout the year, the Anti-Fraudanti-fraud and Ethicsethics Officerofficer provided information and support on fraud prevention matters to staff involved in procurement, contracts management, finance, and human resources management and that Anti-fraudanti-fraud awareness-raising events were organised for F4Ethe Joint Undertaking’s staff and management, including training sessions for newcomers; notes that the implementation status was reported at Auditaudit Committeecommittee meetings, and, in addition, the F4EJoint Undertaking’s internal network of fraud correspondents was kept informed individually and in the context of the regular Assurance Network meetings;

Changed:23.24. Notes with appreciation that rules, procedures, processes, and best practices related to Ethicsethics and Conflictconflict of Interestinterest Preventionprevention &and Managementmanagement were communicated to staff, notably through the F4EJoint ManualUndertaking’s onmanual theon F4Eits intranet;

Changed:24.25. Welcomes the fact that, from 2022 on, all F4Eof the Joint Undertaking’s staff have been obliged to issue a General Declaration of Interest every year; the issuing and assessment of the declarations is now managed through a newly created digitalised F4EJoint ConflictUndertaking’s conflict of Interestinterest Register,register, improving follow-up and traceability, and thereby the prevention and management of its conflicts of interest at F4E;interest;

Changed:25.26. Notes with concern that the Court considers that the F4E’sJoint Undertaking’s contract management has weaknesses that have seriously affected the achievement of contract’s objectives and – if not addressed - may also affect other operational activities of F4E,Joint Undertaking, considering the significant amendments to ongoing complex contracts that may be required, resulting from the updated baseline of the ITER project;

Changed:26.27. Notes, in particular, that the contract signed in 2013 amounting to EUR 500 million for the design, equipment, and installation of the ITER nuclear and non-nuclear buildings; in December 2020, F4EJoint Undertaking and ITER-IO, reacting to concerns and dissatisfaction with the contractor’s progress and efficiency related to the work still outstanding on the non-nuclear buildings, assessed with the help of external legal experts, the potential consequences of alternative procurement strategies such as the retendering of equipment services or transfer of the remaining work to other contractors; notes that in February 2021, the contractor submitted a cost claim totalling EUR 150 million for nuclear design and equipment services, followed in September 2021 by another cost claim of EUR 30 million for the remaining work on the non-nuclear buildings; based on legal experts’ risk analysis and feedback, the JU’sJoint Undertaking’s director settled with the contractor only the first cost claim for an amount of EUR 75 million, and the contractor opened a dispute for the unsettled second cost claim;

Changed:27.28. Points out that, according to the Court, the analysis of the documentation on the contract’s implementation revealed weaknesses in the JU’sJoint Undertaking’s management of this contract, in particular, the Court underlined the JU’sJoint Undertaking’s inability to notify material non-compliance in the contractor’s programming, leading to different interpretations and disagreement between the parties about the scope of the work, timelines and project requirements; moreover, the legal experts concluded that, because of the way the relevant clauses were worded, the JUJoint Undertaking could not terminate the contract with a view to executing the de-scoped work itself or arranging for it to be executed by other contractors; regrets that due to the absence of project records by F4E,records, the JUJoint Undertaking could not clearly establish the contractor’s liabilities;

Changed:28.29. Observes that, the Consolidatedconsolidated Annualannual Activityactivity Reportreport 2022, states that F4Ethe Joint Undertaking continues to implement a recognised, mature and well-functioning internal control system; notes, however, that F4EJoint Undertaking recognises that the changes in the top management (Director(director and Seniorsenior Managers)managers) that are taking place since mid-2022 have a direct impact on the implementation of some of the actions as well as on F4E’sthe Joint Undertaking’s organisational culture, and that the visibility of full implementation of initiatives may take some time;

Changed:29.30. Acknowledges that, in applying the principle of prudence, two deficiencies in relation to the Externalexternal Serviceservice Providersproviders (Human(human Resources,resources, Competencecompetence and Continuity)continuity) and Workloadworkload and Wellbeingwellbeing of staff have been classified as major by the Joint Undertaking;

Changed:30.31. Notes, in addition, that F4Ethe SeniorJoint ManagementUndertaking’s senior management is continuously monitoring the actions launched in those areas identified as having major deficiencies and consider that F4EJoint Undertaking has significantly mitigated the related risks and has formulated concrete action plans to address outstanding concerns, hence justifying the removal of the 2021 reservation in 2022;

Changed:31.32. Notes that “observations” in the Joint Undertakings specific annual reports are in fact “not timed recommendations” by the Court; notes that ECAthe annuallyCourt follows-upfollows up on those observations annually by assessing their status as “open” or “closed”;

Changed:32.33. Notes that from the five (5) observations issued by the Court on 2019 (2) and 2021 (3) only two (2) are closed;

Changed:33.34. Notes that the open observation for 2019 (1) is on the excessive use of contracted or insourced resources (around 62% in 2019), which presents significant risks for the Joint Undertaking, concerning the retention of key competences, unclear accountability, possible judicial disputes, and lower staff efficiency due to decentralised management;

Changed:34.35. Notes that, in 2022, the JUJoint Undertaking created a working group to assess the high use of external resources with the objective to better plan and justify their need;

Changed:35.36. Notes that, for 2021, the open observations refer to (i) the lack of evidence of efficiency and of positive impact on the system of the regular annual assessments by external experts and intensive internal audits covering most of the JU’sJoint Undertaking’s critical areas of its activities; which resulted in an increase of the administrative burden and (ii) the deterioration of the working environment at the Joint Undertaking and the disproportionate use of external staff resources, increasing challenges and risks for the working environment;

Changed:36.37. Notes that, in 2022, following two recommendations from the 10th annual assessment report on human resources management, the Joint Undertaking’s Governing BoardGB approved an action plan for their implementation.