# C_2012388EN.01000801.xml

| 15.12.2012 | EN | Official Journal of the European Union | C 388/8 |
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15.12.2012

EN

Official Journal of the European Union

C 388/8

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REPORT

on the annual accounts of the Office of the Body of European Regulators for Electronic Communications for the financial year 2011, together with the Office’s replies

2012/C 388/02

INTRODUCTION

INTRODUCTION

| 1. | The Office of the Body of European Regulators for Electronic Communications (BEREC), hereinafter "the Office", which is located in Riga, was established by Regulation (EC) No 1211/2009 of the European Parliament and of the Council (1). The Office’s task is, under guidance of the Board of Regulators, to collect and analyse information on electronic communications and to disseminate among National Regulatory Authorities regulatory best practices such as common approaches, methodologies or guidelines on the implementation of the EU regulatory framework (2). |
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1.

The Office of the Body of European Regulators for Electronic Communications (BEREC), hereinafter "the Office", which is located in Riga, was established by Regulation (EC) No 1211/2009 of the European Parliament and of the Council (1). The Office’s task is, under guidance of the Board of Regulators, to collect and analyse information on electronic communications and to disseminate among National Regulatory Authorities regulatory best practices such as common approaches, methodologies or guidelines on the implementation of the EU regulatory framework (2).

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| 2. | The Commission granted financial autonomy to the Office on 12 September 2011. Therefore the audited period for the financial year 2011 runs from 12 September to 31 December 2011. |
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2.

The Commission granted financial autonomy to the Office on 12 September 2011. Therefore the audited period for the financial year 2011 runs from 12 September to 31 December 2011.

INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE

INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE

| 3. | The audit approach taken by the Court comprises analytical audit procedures, direct testing of transactions and an assessment of key controls of the Office’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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3.

The audit approach taken by the Court comprises analytical audit procedures, direct testing of transactions and an assessment of key controls of the Office’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

| 4. | Pursuant to the provisions of Article 287 of the Treaty on the Functioning of the European Union, the Court has audited the annual accounts (3) of the Office, which comprise the “financial statements” (4) and the “reports on the implementation of the budget” (5) for the financial year ended 31 December 2011, and the legality and regularity of the transactions underlying those accounts. |
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4.

Pursuant to the provisions of Article 287 of the Treaty on the Functioning of the European Union, the Court has audited the annual accounts (3) of the Office, which comprise the “financial statements” (4) and the “reports on the implementation of the budget” (5) for the financial year ended 31 December 2011, and the legality and regularity of the transactions underlying those accounts.

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The Management’s responsibility

The Management’s responsibility

| 5. | As authorising officer, the Director implements the revenue and expenditure of the budget in accordance with the financial rules of the Office, under his own responsibility and within the limits of the authorised appropriations (6). The Director is responsible for putting in place (7) the organisational structure and the internal management and control systems and procedures relevant for drawing up final accounts (8) that are free from material misstatement, whether due to fraud or error, and for ensuring that the transactions underlying those accounts are legal and regular. |
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5.

As authorising officer, the Director implements the revenue and expenditure of the budget in accordance with the financial rules of the Office, under his own responsibility and within the limits of the authorised appropriations (6). The Director is responsible for putting in place (7) the organisational structure and the internal management and control systems and procedures relevant for drawing up final accounts (8) that are free from material misstatement, whether due to fraud or error, and for ensuring that the transactions underlying those accounts are legal and regular.

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The Auditor’s responsibility

The Auditor’s responsibility

| 6. | The Court’s responsibility is to provide, on the basis of its audit, the European Parliament and the Council (9) with a statement of assurance as to the reliability of the annual accounts of the Office and the legality and regularity of the transactions underlying them. |
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6.

The Court’s responsibility is to provide, on the basis of its audit, the European Parliament and the Council (9) with a statement of assurance as to the reliability of the annual accounts of the Office and the legality and regularity of the transactions underlying them.

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| 7. | The Court conducted 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 that the Court plans and performs the audit to obtain reasonable assurance as to whether the annual accounts of the Office are free of material misstatement and the transactions underlying them are legal and regular. |
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7.

The Court conducted 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 that the Court plans and performs the audit to obtain reasonable assurance as to whether the annual accounts of the Office are free of material misstatement and the transactions underlying them are legal and regular.

| 8. | An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the accounts and the legality and regularity of the transactions underlying them. The procedures are selected based on the auditor’s judgment, including an assessment of the risks of material misstatement of the accounts and of material non-compliance of the underlying transactions with the requirement of the legal framework of the European Union, whether due to fraud or error. In assessing those risks, the auditor considers internal controls relevant to the preparation and fair presentation of the accounts and supervisory and control systems implemented to ensure legality and regularity of underlying transactions, in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and reasonableness of accounting estimates made, as well as evaluating the overall presentation of the accounts. |
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8.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the accounts and the legality and regularity of the transactions underlying them. The procedures are selected based on the auditor’s judgment, including an assessment of the risks of material misstatement of the accounts and of material non-compliance of the underlying transactions with the requirement of the legal framework of the European Union, whether due to fraud or error. In assessing those risks, the auditor considers internal controls relevant to the preparation and fair presentation of the accounts and supervisory and control systems implemented to ensure legality and regularity of underlying transactions, in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and reasonableness of accounting estimates made, as well as evaluating the overall presentation of the accounts.

| 9. | The Court considers that the audit evidence obtained is sufficient and appropriate to provide a basis for the opinions set out below. |
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9.

The Court considers that the audit evidence obtained is sufficient and appropriate to provide a basis for the opinions set out below.

Opinion on the reliability of the accounts

Opinion on the reliability of the accounts

| 10. | In the Court’s opinion, the Office’s Annual Accounts (10) present fairly, in all material respects, its financial position as of 31 December 2011 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 (11). |
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10.

In the Court’s opinion, the Office’s Annual Accounts (10) present fairly, in all material respects, its financial position as of 31 December 2011 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 (11).

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

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

| 11. | In the Court’s opinion, the transactions underlying the annual accounts of the Office for the financial year ended 31 December 2011 are legal and regular in all material respects. |
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11.

In the Court’s opinion, the transactions underlying the annual accounts of the Office for the financial year ended 31 December 2011 are legal and regular in all material respects.

| 12. | The comments which follow do not call the Court’s opinions into question. |
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12.

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

COMMENTS ON BUDGETARY AND FINANCIAL MANAGEMENT

COMMENTS ON BUDGETARY AND FINANCIAL MANAGEMENT

| 13. | The Office’s 2011 budget adopted by the Management Committee disclosed appropriations by Titles and Chapters only and was not subdivided into articles and items. This situation is at odds with the principle of specification. |
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13.

The Office’s 2011 budget adopted by the Management Committee disclosed appropriations by Titles and Chapters only and was not subdivided into articles and items. This situation is at odds with the principle of specification.

| 14. | The Court identified 21 cases with a total value of 94 120 euro in which appropriations carried over to 2012 did not correspond to legal commitments. These carryovers were therefore irregular. |
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14.

The Court identified 21 cases with a total value of 94 120 euro in which appropriations carried over to 2012 did not correspond to legal commitments. These carryovers were therefore irregular.

COMMENTS ON KEY CONTROLS OF THE OFFICE’S SUPERVISORY AND CONTROL SYSTEMS

COMMENTS ON KEY CONTROLS OF THE OFFICE’S SUPERVISORY AND CONTROL SYSTEMS

| 15. | The Office had not yet adopted and implemented all the internal control standards. Notably, no central register of invoices and no register of exceptions was introduced. |
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15.

The Office had not yet adopted and implemented all the internal control standards. Notably, no central register of invoices and no register of exceptions was introduced.

OTHER COMMENTS

OTHER COMMENTS

| 16. | The Office needs to improve the transparency of recruitment procedures. Questions for oral and written tests were not set before the applications were examined by the selection board, there was no decision of the Appointing Authority to appoint the selection board and the grade of the members of the selection board was not indicated. |
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16.

The Office needs to improve the transparency of recruitment procedures. Questions for oral and written tests were not set before the applications were examined by the selection board, there was no decision of the Appointing Authority to appoint the selection board and the grade of the members of the selection board was not indicated.

This Report was adopted by Chamber IV, headed by Dr Louis GALEA, Member of the Court of Auditors, in Luxembourg at its meeting of 5 September 2012.

For the Court of Auditors

Vítor Manuel da SILVA CALDEIRA

President

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(1)  OJ L 337, 18.12.2009, p. 1.

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

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Annex

(3)  These accounts are accompanied by a report on the budgetary and financial management during the year which gives further information on budget implementation and management.

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(4)  The financial statements 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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(5)  The budget implementation reports comprise the budget outturn account and its annex.

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(6)  Article 33 of Commission Regulation (EC, Euratom) No 2343/2002 (OJ L 357, 31.12.2002, p. 72).

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(7)  Article 38 of Regulation (EC, Euratom) No 2343/2002.

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(8)  The rules concerning the presentation of the accounts and accounting by the Agencies are laid down in Chapters 1 and 2 of Title VII of Regulation (EC, Euratom) No 2343/2002 as last amended by Regulation (EC, Euratom) No 652/2008 (OJ L 181, 10.7.2008, p. 23) and are integrated as such in the Financial Regulation of the Office.

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

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(10)  The Final Annual Accounts were drawn up on 3 July 2012 and received by the Court on 3 July 2012. The Final Annual Accounts, consolidated with those of the Commission, are published in the Official Journal of the European Union by 15 November of the following year. These can be found on the following website http://eca.europa.eu or http://www.berec.europa.eu/.

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Official Journal of the European Union

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

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ANNEX

Office of the Body of European Regulators for Electronic Communications (Riga)

Competences and activities

| Areas of Union competence deriving from the Treaty


  (Article 114 of the Treaty on the Functioning of the European Union) | Article 114 of the Treaty on the Functioning of the European Union






  — | Approximation of laws in the field of electronic communications |
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Areas of Union competence deriving from the Treaty

(Article 114 of the Treaty on the Functioning of the European Union)

Article 114 of the Treaty on the Functioning of the European Union

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Approximation of laws in the field of electronic communications

Competences of the Office

(Regulation (EC) No 1211/2009 of the European Parliament and of the Council)

The Office's powers as defined in Regulation (EC) No 1211/2009 of the European Parliament and of the Council.

The Office referred to in Article 6 shall provide administrative and professional support services to BEREC.

It shall perform its functions under the guidance of the Board of Regulators.

Governance

The Office comprises:

| (a) | a Management Committee; |
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(a)

a Management Committee;

| (b) | an Administrative Manager, |
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(b)

an Administrative Manager,

which share between themselves all administrative and financial responsibilities, including. the responsibilities for the staff.

However, only the Management Committee is responsible for appointment of staff (art. 7(4));

The guidance on the services and products to be provided by the Office is provided by the Board of Regulators, as specified in “Products and services in 2011”.

Resources made available to the Office in 2011

Final Budget: 1,8 million euro (amended budget 1/2011)

Financial autonomy obtained on 12 September 2011.

Staff as at 31 December 2011: 18

Products and services in 2011

Under the guidance of the Board of Regulators, the Office has provided the following services:

| — | Professional and administrative support services to BEREC, |
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Professional and administrative support services to BEREC,

| — | Collection of information from NRAs and exchange and transmission of information, |
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Collection of information from NRAs and exchange and transmission of information,

| — | Dissemination of regulatory best practices among NRAs within the EU and to third parties, |
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Dissemination of regulatory best practices among NRAs within the EU and to third parties,

| — | Assistance to the Chair in the preparation of the work of the Board of Regulators and the Management Committee of the Office, |
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Assistance to the Chair in the preparation of the work of the Board of Regulators and the Management Committee of the Office,

| — | Support to the Expert Working Groups set up by the Board of Regulators. |
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Support to the Expert Working Groups set up by the Board of Regulators.

Source: Information supplied by the Office.

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THE OFFICE’S REPLIES

| 13. | BEREC Office will discontinue this practice. The 2012 Budget, which is already subdivided into articles and items, will be approved by the Management Committee at the detailed level and published in our website in September 2012. |
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13.

BEREC Office will discontinue this practice. The 2012 Budget, which is already subdivided into articles and items, will be approved by the Management Committee at the detailed level and published in our website in September 2012.

| 14. | The start-up phase made it difficult to forecast correctly the carry-forwards. A close follow-up of the budget implementation is in place now. Instructions will be given at the end of the year 2012 and relevant information collected from the units in order to decommit unused commitments. |
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14.

The start-up phase made it difficult to forecast correctly the carry-forwards. A close follow-up of the budget implementation is in place now. Instructions will be given at the end of the year 2012 and relevant information collected from the units in order to decommit unused commitments.

| 15. | The current Implementation Plan for ICS is defining the implementation deadlines for different standards during the period from November 2011 until January 2013. The registration of invoices and the recording of exceptions are implemented since 18 June 2012 with impact on further registrations in 2012. Preparation of relevant Administrative Instructions is in progress. |
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15.

The current Implementation Plan for ICS is defining the implementation deadlines for different standards during the period from November 2011 until January 2013. The registration of invoices and the recording of exceptions are implemented since 18 June 2012 with impact on further registrations in 2012. Preparation of relevant Administrative Instructions is in progress.

| 16. | The Office has followed the same procedures as DG INFSO until ECA findings in May 2012. As from June 2012 the Office has updated its Guidelines for recruitment procedures in order to address these findings. |
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16.

The Office has followed the same procedures as DG INFSO until ECA findings in May 2012. As from June 2012 the Office has updated its Guidelines for recruitment procedures in order to address these findings.

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