# C_2013365EN.01012001.xml

| 13.12.2013 | EN | Official Journal of the European Union | C 365/120 |
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13.12.2013

EN

Official Journal of the European Union

C 365/120

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REPORT

REPORT

on the annual accounts of the European Food Safety Authority for the financial year 2012, together with the Authority’s replies

2013/C 365/17

INTRODUCTION

INTRODUCTION

| 1. | The European Food Safety Authority (hereinafter ‘the Authority’, aka ‘EFSA’), which is located in Parma, was established by Regulation (EC) No 178/2002 of the European Parliament and of the Council (1). The Authority’s main tasks are to supply the scientific information needed for Union legislation to be drawn up concerning food and food safety, to collect and analyse data that allow risks to be identified and monitored and to provide independent information on these risks (2). |
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1.

The European Food Safety Authority (hereinafter ‘the Authority’, aka ‘EFSA’), which is located in Parma, was established by Regulation (EC) No 178/2002 of the European Parliament and of the Council (1). The Authority’s main tasks are to supply the scientific information needed for Union legislation to be drawn up concerning food and food safety, to collect and analyse data that allow risks to be identified and monitored and to provide independent information on these risks (2).

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INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE

INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE

| 2. | The audit approach taken by the Court comprises analytical audit procedures, direct testing of transactions and an assessment of key controls of the Authority’s supervisory and control systems. This is supplemented by evidence provided by the work of other auditors (where relevant) and an analysis of management representations. |
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2.

The audit approach taken by the Court comprises analytical audit procedures, direct testing of transactions and an assessment of key controls of the Authority’s supervisory and control systems. This is supplemented by evidence provided by the work of other auditors (where relevant) and an analysis of management representations.

STATEMENT OF ASSURANCE

STATEMENT OF ASSURANCE

| 3. | Pursuant to the provisions of Article 287 of the Treaty on the Functioning of the European Union (TFEU), the Court has audited:






  (a) | the annual accounts of the Authority, which comprise the financial statements (3) and the reports on the implementation of the budget (4) for the financial year ended 31 December 2012, and |
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3.

Pursuant to the provisions of Article 287 of the Treaty on the Functioning of the European Union (TFEU), the Court has audited:

(a)

the annual accounts of the Authority, which comprise the financial statements (3) and the reports on the implementation of the budget (4) for the financial year ended 31 December 2012, and

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| (b) | the legality and regularity of the transactions underlying those accounts. |
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(b)

the legality and regularity of the transactions underlying those accounts.

The management’s responsibility

The management’s responsibility

| 4. | In accordance with Articles 33 and 43 of Commission Regulation (EC, Euratom) No 2343/2002 (5), the management is responsible for the preparation and fair presentation of the annual accounts of the Authority and the legality and regularity of the underlying transactions:






  (a) | The management’s responsibilities in respect of the Authority's annual accounts include designing, implementing and maintaining an internal control system relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies on the basis of the accounting rules adopted by the Commission’s accounting officer (6); making accounting estimates that are reasonable in the circumstances. The Director approves the annual accounts of the Authority after its accounting officer has prepared them on the basis of all available information and established a note to accompany the accounts in which he declares, inter alia, that he has reasonable assurance that they present a true and fair view of the financial position of the Authority in all material respects. |
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4.

In accordance with Articles 33 and 43 of Commission Regulation (EC, Euratom) No 2343/2002 (5), the management is responsible for the preparation and fair presentation of the annual accounts of the Authority and the legality and regularity of the underlying transactions:

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(a)

The management’s responsibilities in respect of the Authority's annual accounts include designing, implementing and maintaining an internal control system relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies on the basis of the accounting rules adopted by the Commission’s accounting officer (6); making accounting estimates that are reasonable in the circumstances. The Director approves the annual accounts of the Authority after its accounting officer has prepared them on the basis of all available information and established a note to accompany the accounts in which he declares, inter alia, that he has reasonable assurance that they present a true and fair view of the financial position of the Authority in all material respects.

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| (b) | The management’s responsibilities in respect of the legality and regularity of the underlying transactions and compliance with the principle of sound financial management consist of designing, implementing and maintaining an effective and efficient internal control system comprising adequate supervision and appropriate measures to prevent irregularities and fraud and, if necessary, legal proceedings to recover funds wrongly paid or used. |
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(b)

The management’s responsibilities in respect of the legality and regularity of the underlying transactions and compliance with the principle of sound financial management consist of designing, implementing and maintaining an effective and efficient internal control system comprising adequate supervision and appropriate measures to prevent irregularities and fraud and, if necessary, legal proceedings to recover funds wrongly paid or used.

The auditor’s responsibility

The auditor’s responsibility

| 5. | The Court’s responsibility is, on the basis of its audit, to provide the European Parliament and the Council (7) with a statement of assurance as to the reliability of the annual accounts and the legality and regularity of the underlying transactions. The Court conducts its audit in accordance with the IFAC International Standards on Auditing and Codes of Ethics and the INTOSAI International Standards of Supreme Audit Institutions. These standards require the Court to plan and perform the audit to obtain reasonable assurance as to whether the annual accounts of the Authority are free from material misstatement and the transactions underlying them are legal and regular. |
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5.

The Court’s responsibility is, on the basis of its audit, to provide the European Parliament and the Council (7) with a statement of assurance as to the reliability of the annual accounts and the legality and regularity of the underlying transactions. The Court conducts its audit in accordance with the IFAC International Standards on Auditing and Codes of Ethics and the INTOSAI International Standards of Supreme Audit Institutions. These standards require the Court to plan and perform the audit to obtain reasonable assurance as to whether the annual accounts of the Authority are free from material misstatement and the transactions underlying them are legal and regular.

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| 6. | The audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the accounts and the legality and regularity of the underlying transactions. The procedures selected depend on the auditor’s judgement, which is based on an assessment of the risks of material misstatement of the accounts and material non-compliance by the underlying transactions with the requirements in the legal framework of the European Union, whether due to fraud or error. In assessing these risks, the auditor considers any internal controls relevant to the preparation and fair presentation of the accounts, as well as the supervisory and control systems that are implemented to ensure the legality and regularity of underlying transactions, and designs audit procedures that are appropriate in the circumstances. The audit also entails evaluating the appropriateness of accounting policies, the reasonableness of accounting estimates and the overall presentation of the accounts. |
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6.

The audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the accounts and the legality and regularity of the underlying transactions. The procedures selected depend on the auditor’s judgement, which is based on an assessment of the risks of material misstatement of the accounts and material non-compliance by the underlying transactions with the requirements in the legal framework of the European Union, whether due to fraud or error. In assessing these risks, the auditor considers any internal controls relevant to the preparation and fair presentation of the accounts, as well as the supervisory and control systems that are implemented to ensure the legality and regularity of underlying transactions, and designs audit procedures that are appropriate in the circumstances. The audit also entails evaluating the appropriateness of accounting policies, the reasonableness of accounting estimates and the overall presentation of the accounts.

| 7. | The Court considers that the audit evidence obtained is sufficient and appropriate to provide a basis for its statement of assurance. |
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7.

The Court considers that the audit evidence obtained is sufficient and appropriate to provide a basis for its statement of assurance.

Opinion on the reliability of the accounts

Opinion on the reliability of the accounts

| 8. | In the Court’s opinion, the Authority’s annual accounts present fairly, in all material respects, its financial position as at 31 December 2012 and the results of its operations and its cash flows for the year then ended, in accordance with the provisions of its Financial Regulation and the accounting rules adopted by the Commission’s accounting officer. |
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8.

In the Court’s opinion, the Authority’s annual accounts present fairly, in all material respects, its financial position as at 31 December 2012 and the results of its operations and its cash flows for the year then ended, in accordance with the provisions of its Financial Regulation and the accounting rules adopted by the Commission’s accounting officer.

Opinion on the legality and regularity of the transactions underlying the accounts

Opinion on the legality and regularity of the transactions underlying the accounts

| 9. | In the Court’s opinion, the transactions underlying the annual accounts for the year ended 31 December 2012 are legal and regular in all material respects. |
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9.

In the Court’s opinion, the transactions underlying the annual accounts for the year ended 31 December 2012 are legal and regular in all material respects.

| 10. | The comments which follow do not call the Court’s opinions into question. |
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10.

The comments which follow do not call the Court’s opinions into question.

COMMENTS ON THE RELIABILITY OF THE ACCOUNTS

COMMENTS ON THE RELIABILITY OF THE ACCOUNTS

| 11. | The validation of the accounting systems by the Authority’s accounting officer covers the central ABAC and SAP systems, but not the local systems and the reliability of data exchanges between central and local systems. This represents a risk as to the reliability of accounting data. |
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11.

The validation of the accounting systems by the Authority’s accounting officer covers the central ABAC and SAP systems, but not the local systems and the reliability of data exchanges between central and local systems. This represents a risk as to the reliability of accounting data.

COMMENTS ON INTERNAL CONTROLS

COMMENTS ON INTERNAL CONTROLS

| 12. | Following high level risk assessments carried out by an external consultant in 2012 and by the Commission’s Internal Audit Service in February 2013 a number of potential critical risks were identified in the operation of the Authority’s internal controls, particularly in the areas of data management, business continuity and IT security. The Authority started a comprehensive self-assessment of its internal control system in 2012. The process is ongoing and implementation of corrective actions is planned for 2013. |
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12.

Following high level risk assessments carried out by an external consultant in 2012 and by the Commission’s Internal Audit Service in February 2013 a number of potential critical risks were identified in the operation of the Authority’s internal controls, particularly in the areas of data management, business continuity and IT security. The Authority started a comprehensive self-assessment of its internal control system in 2012. The process is ongoing and implementation of corrective actions is planned for 2013.

COMMENTS ON BUDGETARY MANAGEMENT

COMMENTS ON BUDGETARY MANAGEMENT

| 13. | The overall level of appropriations committed was 99 %. The level of committed appropriations carried over was however high for title II (administrative expenditure) at 2,3 million euro (22 % of title II appropriations) and title III (operational expenditure) at 5,6 million euro (30 % of title III appropriations). For title II, carry-overs amounting to 1,1 million euro were made in conformity with EFSA’s management plan or were related to payments suspended for reasons beyond the Authority’s control. In case of title III, carry-overs of 2,1 million were made in conformity with EFSA’s management plan and an amount of 0,83 million euro was carried-over for reasons beyond the Authority’s control. |
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13.

The overall level of appropriations committed was 99 %. The level of committed appropriations carried over was however high for title II (administrative expenditure) at 2,3 million euro (22 % of title II appropriations) and title III (operational expenditure) at 5,6 million euro (30 % of title III appropriations). For title II, carry-overs amounting to 1,1 million euro were made in conformity with EFSA’s management plan or were related to payments suspended for reasons beyond the Authority’s control. In case of title III, carry-overs of 2,1 million were made in conformity with EFSA’s management plan and an amount of 0,83 million euro was carried-over for reasons beyond the Authority’s control.

FOLLOW-UP OF PREVIOUS YEAR’S COMMENTS

FOLLOW-UP OF PREVIOUS YEAR’S COMMENTS

| 14. | An overview of the corrective actions taken in response to the Court’s previous year’s comments is provided in Annex I. |
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14.

An overview of the corrective actions taken in response to the Court’s previous year’s comments is provided in Annex I.

Annex I

This Report was adopted by Chamber IV, headed by Dr Louis GALEA, Member of the Court of Auditors, in Luxembourg at its meeting of 17 September 2013.

For the Court of Auditors

Vítor Manuel da SILVA CALDEIRA

President

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(1)  OJ L 31, 1.2.2002, p. 1.

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(2)  Annex II summarises the Authority’s competences and activities. It is presented for information purposes.

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Annex II

(3)  These include the balance sheet and the economic outturn account, the cash flow table, the statement of changes in net assets and a summary of the significant accounting policies and other explanatory notes.

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(4)  These comprise the budgetary outturn account and the annex to the budgetary outturn account.

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(5)  OJ L 357, 31.12.2002, p. 72.

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(6)  The accounting rules adopted by the Commission’s accounting officer are derived from the International Public Sector Accounting Standards (IPSAS) issued by the International Federation of Accountants or, where relevant, the International Accounting Standards (IAS)/International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board.

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(7)  A 185(2) of Council Regulation (EC, Euratom) No 1605/2002 (OJ L 248, 16.9.2002, p. 1).

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ANNEX I

Follow-up of previous year’s comments

| Year | Court’s comment | Status of corrective action
  (Completed / Ongoing / Outstanding / N/A) |
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| 2011 | This high number of budget transfers indicates weaknesses in budget planning and implementation and is at odds with the principle of specification. | Ongoing |
| 2011 | The Authority purchased a new headquarters building in December 2011 for 36,8 million euro which will be paid by quarterly instalments over 25 years, resulting in interest payments of 18,5 million euro. The Court questions whether a more economic alternative could have been sought from the budgetary authorities in accordance with the principle of sound financial management and ensuring full respect of the Financial Regulation. | Ongoing (The Commission did not accept to provide additional funds to repay loan in full). |
| 2011 | There is room for improving the transparency of recruitment procedure. Questions for written tests and interviews were set after the examination of the applications by the selection board and declarations on confidentiality and absence of conflict of interest were signed by the selection board members only during, not before the evaluation of candidates’ applications. | Ongoing (New recruitment guidelines were put in place in March 2012 to remedy these weaknesses in the future). |

Year

Court’s comment

Status of corrective action

(Completed / Ongoing / Outstanding / N/A)

2011

This high number of budget transfers indicates weaknesses in budget planning and implementation and is at odds with the principle of specification.

Ongoing

2011

The Authority purchased a new headquarters building in December 2011 for 36,8 million euro which will be paid by quarterly instalments over 25 years, resulting in interest payments of 18,5 million euro. The Court questions whether a more economic alternative could have been sought from the budgetary authorities in accordance with the principle of sound financial management and ensuring full respect of the Financial Regulation.

Ongoing (The Commission did not accept to provide additional funds to repay loan in full).

2011

There is room for improving the transparency of recruitment procedure. Questions for written tests and interviews were set after the examination of the applications by the selection board and declarations on confidentiality and absence of conflict of interest were signed by the selection board members only during, not before the evaluation of candidates’ applications.

Ongoing (New recruitment guidelines were put in place in March 2012 to remedy these weaknesses in the future).

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ANNEX II

European Food Safety Authority (Parma)

Competences and activities

| Areas of Union competence deriving from the Treaty | Collection of information







  — | Common agricultural policy (Article 38 of the Treaty on the Functioning of the European Union (TFEU)). |
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Areas of Union competence deriving from the Treaty

Collection of information

—

Common agricultural policy (Article 38 of the Treaty on the Functioning of the European Union (TFEU)).

| — | Functioning of the Internal Market (Article 114 TFEU). |
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—

Functioning of the Internal Market (Article 114 TFEU).

| — | Public health (Article 168 TFEU). |
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—

Public health (Article 168 TFEU).

| — | Common trade policy (Article 206 TFEU). |
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—

Common trade policy (Article 206 TFEU).

Competences of the Authority

(Regulation (EC) No 178/2002 of the European Parliament and of the Council)

Objectives

| — | To provide scientific opinions and scientific and technical support for the legislation and policies which have a direct or indirect impact on food and feed safety; |
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—

To provide scientific opinions and scientific and technical support for the legislation and policies which have a direct or indirect impact on food and feed safety;

| — | to provide independent information on risks relating to food safety; |
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—

to provide independent information on risks relating to food safety;

| — | to contribute to the achievement of a high level of protection of human life and health; |
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—

to contribute to the achievement of a high level of protection of human life and health;

| — | to collect and analyse data needed to allow characterisation and monitoring of risks. |
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—

to collect and analyse data needed to allow characterisation and monitoring of risks.

Tasks

| — | To issue scientific opinions and studies; |
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—

To issue scientific opinions and studies;

| — | to promote uniform risk-assessment methodologies; |
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—

to promote uniform risk-assessment methodologies;

| — | to assist the Commission; |
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—

to assist the Commission;

| — | to search for, analyse and summarise the requisite scientific and technical data; |
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—

to search for, analyse and summarise the requisite scientific and technical data;

| — | to identify and characterise emerging risks; |
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—

to identify and characterise emerging risks;

| — | to establish a network of organisations operating in similar fields; |
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—

to establish a network of organisations operating in similar fields;

| — | to provide scientific and technical assistance in crisis management; |
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—

to provide scientific and technical assistance in crisis management;

| — | to improve international cooperation; |
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—

to improve international cooperation;

| — | to provide the public and interested parties with reliable, objective and easily comprehensible information; |
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—

to provide the public and interested parties with reliable, objective and easily comprehensible information;

| — | to take part in the Commission’s rapid alert system. |
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—

to take part in the Commission’s rapid alert system.

Governance

Management Board

Composition

14 members appointed by the Council (in cooperation with the European Parliament and the Commission) and one representative of the Commission.

Task

To adopt the work programme and the budget and ensure that they are implemented.

Executive Director

Appointed by the Management Board on the basis of a list of candidates proposed by the Commission, following a hearing before the European Parliament.

Advisory Forum

Composition

One representative per Member State.

Task

To advise the Executive Director.

Scientific Committee and scientific panels

To draw up the Authority’s scientific opinions.

External audit

European Court of Auditors.

Internal audit

EFSA’S Internal Audit unit.

European Commission’s Internal Audit Service (IAS).

Discharge authority

European Parliament acting on recommendation by the Council.

Resources made available to the Authority in 2012 (2011)

Budget

78,3 (78,8) million euro of which 100 % (100 %) is a European Union subsidy.

Staff as at 31 December 2012

Posts in the establishment plan: 355 (355), of which occupied:

| — | staff (temporary staff and officials): 342 (334) |
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staff (temporary staff and officials): 342 (334)

| — | other staff (contractual, seconded national experts): 124 (109). |
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other staff (contractual, seconded national experts): 124 (109).

Total staff (including nine offer letters sent as per 31.12.2012): 466 (443), of which for:

| — | operational duties: 383 (326) |
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—

operational duties: 383 (326)

| — | administrative duties: 83 (117). |
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administrative duties: 83 (117).

Products and services 2012 (2011)

Scientific outputs and supporting publications 2012 (2011)

Activity 1:   Provision of scientific opinions and advice and risk assessment approaches

| — | Guidance of the Scientific Committee/Scientific Panel: 4 (9) |
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—

Guidance of the Scientific Committee/Scientific Panel: 4 (9)

| — | Opinion of the Scientific Committee/Scientific Panel: 46 (38) |
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—

Opinion of the Scientific Committee/Scientific Panel: 46 (38)

| — | Scientific Report of EFSA: 9 (3) |
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Scientific Report of EFSA: 9 (3)

| — | Statement of EFSA: 2 (3) |
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Statement of EFSA: 2 (3)

| — | Statement of the Scientific Committee/Scientific Panel: 4 (4) |
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Statement of the Scientific Committee/Scientific Panel: 4 (4)

Total scientific outputs activity 1 = 65 (57)

Activity 2:   Evaluation of products, substances and claims subject to authorisation

| — | Conclusion on Pesticides Peer Review: 60 (54) |
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Conclusion on Pesticides Peer Review: 60 (54)

| — | Guidance of EFSA: 0 (2) |
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—

Guidance of EFSA: 0 (2)

| — | Guidance of the Scientific Committee/Scientific Panel: 7 (17) |
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—

Guidance of the Scientific Committee/Scientific Panel: 7 (17)

| — | Opinion of the Scientific Committee/Scientific Panel: 241 (298) |
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—

Opinion of the Scientific Committee/Scientific Panel: 241 (298)

| — | Scientific Report of EFSA: 1 (1) |
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—

Scientific Report of EFSA: 1 (1)

| — | Statement of the Scientific Committee/Scientific Panel: 7 (9) |
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—

Statement of the Scientific Committee/Scientific Panel: 7 (9)

| — | Statement of EFSA: 4 (3) |
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Statement of EFSA: 4 (3)

Total scientific outputs activity 2 = 320 (384)

Activity 3:   Data Collection, scientific cooperation and networking

| — | Guidance of EFSA: 1 (3) |
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—

Guidance of EFSA: 1 (3)

| — | Statement of EFSA: 4 (0) |
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—

Statement of EFSA: 4 (0)

| — | Reasoned Opinion: 114 (88) |
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—

Reasoned Opinion: 114 (88)

| — | Scientific Report of EFSA: 12 (16) |
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—

Scientific Report of EFSA: 12 (16)

Total scientific outputs activity 3 = 131 (107)

Supporting Publications

| — | Event report: 11 (8) |
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—

Event report: 11 (8)

| — | External Scientific Report: 74 (37) |
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—

External Scientific Report: 74 (37)

| — | Technical report: 77 (65) |
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—

Technical report: 77 (65)

Total Supporting Publications = 162 (110)

Total outputs = 678 (658)

| — | Scientific outputs supported by communication activities: 9,5 % (35 %) |
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Scientific outputs supported by communication activities: 9,5 % (35 %)

| — | Public consultations: 39 (78) |
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—

Public consultations: 39 (78)

| — | Web visits: 4,4 (3,5) million |
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—

Web visits: 4,4 (3,5) million

| — | Highlights subscribers: 30 309(27 933) |
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—

Highlights subscribers: 30 309(27 933)

| — | Media coverage: 9 194(9 397) |
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—

Media coverage: 9 194(9 397)

| — | Media queries: 893 (1 086) |
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—

Media queries: 893 (1 086)

| — | Press releases: 25 (15) |
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—

Press releases: 25 (15)

| — | Web News stories: 60 (63) |
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—

Web News stories: 60 (63)

| — | Interviews: 111 (126) |
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Interviews: 111 (126)

Source: Information supplied by the Authority.

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THE AUTHORITY’S REPLIES

| 11. | The risk mentioned by the Court did not materialise in the use of inaccurate data by EFSA’s Accounting Officer. The Authority will however integrate its local systems in the validation process by its Accounting Officer. |
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11.

The risk mentioned by the Court did not materialise in the use of inaccurate data by EFSA’s Accounting Officer. The Authority will however integrate its local systems in the validation process by its Accounting Officer.

| 12. | As part of its management and internal control procedures the Authority carries out on a regular basis high level risk assessments so as to identify and adopt adequate mitigation measures to potential risks. This exercise is a key internal control put in place to increase the likelihood of achieving the Authority’s objectives. The Authority will continue enhancing such preventive risk-based management approach. |
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12.

As part of its management and internal control procedures the Authority carries out on a regular basis high level risk assessments so as to identify and adopt adequate mitigation measures to potential risks. This exercise is a key internal control put in place to increase the likelihood of achieving the Authority’s objectives. The Authority will continue enhancing such preventive risk-based management approach.

| 13. | The Authority will continue to improve the monitoring of the budget execution in order to keep the carry-over in line with the budget execution objectives set for the operational activities. |
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13.

The Authority will continue to improve the monitoring of the budget execution in order to keep the carry-over in line with the budget execution objectives set for the operational activities.

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