# C_2008311EN.01002001.xml

| 5.12.2008 | EN | Official Journal of the European Union | C 311/20 |
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5.12.2008

EN

Official Journal of the European Union

C 311/20

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REPORT

REPORT

on the annual accounts of the European Aviation Safety Agency for the financial year 2007 together with the Agency's replies

(2008/C 311/04)

CONTENTS

| 1-2 | INTRODUCTION |
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1-2

| 3-6 | STATEMENT OF ASSURANCE |
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3-6

| 7-10 | OBSERVATIONS |
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7-10

Tables 1 to 4

The Agency's replies

The Agency's replies

INTRODUCTION

| 1. | The European Aviation Safety Agency (hereinafter called ‘the Agency’) was established by Regulation (EC) No 1592/2002 of the European Parliament and of the Council of 15 July 2002 (1). The Agency's tasks are to maintain a high level of civil aviation safety, to ensure the proper development of civil aviation safety, to establish certification specifications and to provide certification of aeronautical products. |
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1.

The European Aviation Safety Agency (hereinafter called ‘the Agency’) was established by Regulation (EC) No 1592/2002 of the European Parliament and of the Council of 15 July 2002 (1). The Agency's tasks are to maintain a high level of civil aviation safety, to ensure the proper development of civil aviation safety, to establish certification specifications and to provide certification of aeronautical products.

1

| 2. | Table 1 summarises the Agency's competences and activities. Key data summarised from the financial statements drawn up by the Agency for the financial year 2007 are presented in Tables 2, 3 and 4 for information purposes. |
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2.

Table 1 summarises the Agency's competences and activities. Key data summarised from the financial statements drawn up by the Agency for the financial year 2007 are presented in Tables 2, 3 and 4 for information purposes.

Table 1

Tables 2, 3 and 4

STATEMENT OF ASSURANCE

| 3. | This Statement of Assurance is addressed to the European Parliament and the Council in accordance with Article 185(2) of Council Regulation (EC, Euratom) No 1605/2002 (2); it was drawn up following an examination of the Agency's accounts, as required by Article 248 of the Treaty establishing the European Community. |
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3.

This Statement of Assurance is addressed to the European Parliament and the Council in accordance with Article 185(2) of Council Regulation (EC, Euratom) No 1605/2002 (2); it was drawn up following an examination of the Agency's accounts, as required by Article 248 of the Treaty establishing the European Community.

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| 4. | The Agency's accounts for the financial year ended 31 December 2007 (3) were drawn up by its Executive Director, pursuant to Article 49 of Regulation (EC) No 1592/2002, and sent to the Court, which is required to give a statement of assurance on their reliability and on the legality and regularity of the underlying transactions. |
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4.

The Agency's accounts for the financial year ended 31 December 2007 (3) were drawn up by its Executive Director, pursuant to Article 49 of Regulation (EC) No 1592/2002, and sent to the Court, which is required to give a statement of assurance on their reliability and on the legality and regularity of the underlying transactions.

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| 5. | The Court conducted its audit in accordance with the IFAC and ISSAI (4) International Auditing Standards and Codes of Ethics, in so far as these are applicable in the European Community context. The audit was planned and performed to obtain reasonable assurance that the accounts are reliable and that the underlying transactions are legal and regular. |
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5.

The Court conducted its audit in accordance with the IFAC and ISSAI (4) International Auditing Standards and Codes of Ethics, in so far as these are applicable in the European Community context. The audit was planned and performed to obtain reasonable assurance that the accounts are reliable and that the underlying transactions are legal and regular.

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| 6. | The Court has thus obtained a reasonable basis for the Statement set out below:

  Reliability of the accountsThe Agency's accounts for the financial year ended 31 December 2007 are, in all material respects, reliable.Legality and regularity of the underlying transactionsThe transactions underlying the Agency's annual accounts, taken as a whole, are legal and regular.The observations which follow do not call the Court's Statement into question. |
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6.

The Court has thus obtained a reasonable basis for the Statement set out below:

Reliability of the accountsThe Agency's accounts for the financial year ended 31 December 2007 are, in all material respects, reliable.Legality and regularity of the underlying transactionsThe transactions underlying the Agency's annual accounts, taken as a whole, are legal and regular.The observations which follow do not call the Court's Statement into question.

Reliability of the accountsThe Agency's accounts for the financial year ended 31 December 2007 are, in all material respects, reliable.Legality and regularity of the underlying transactionsThe transactions underlying the Agency's annual accounts, taken as a whole, are legal and regular.The observations which follow do not call the Court's Statement into question.

OBSERVATIONS

| 7. | The Agency's 2007 budget amounted to 72 million euro, as compared with 66 million euro the previous year. The Agency's budget is financed by fees and charges levied on certifications and approvals issued or amended by the Agency and by a contribution from the Commission. |
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7.

The Agency's 2007 budget amounted to 72 million euro, as compared with 66 million euro the previous year. The Agency's budget is financed by fees and charges levied on certifications and approvals issued or amended by the Agency and by a contribution from the Commission.

| 8. | The 2007 establishment plan consisted of 467 temporary posts, which was an increase of 139 posts compared with the 2006 plan. As the appropriations for staff expenditure did not cover actual staff costs, the Agency reduced its recruitments and agreed with the Commission to reduce the number of posts to a maximum of 342, of which 333 were filled at the year end. However, the establishment plan was not amended accordingly. The Agency should carefully check the consistency of the expenditure forecasts that are to be presented for adoption by the budgetary authority. |
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8.

The 2007 establishment plan consisted of 467 temporary posts, which was an increase of 139 posts compared with the 2006 plan. As the appropriations for staff expenditure did not cover actual staff costs, the Agency reduced its recruitments and agreed with the Commission to reduce the number of posts to a maximum of 342, of which 333 were filled at the year end. However, the establishment plan was not amended accordingly. The Agency should carefully check the consistency of the expenditure forecasts that are to be presented for adoption by the budgetary authority.

| 9. | According to the new fees and charges regulation (5) applicable from 1 June 2007, the Agency considered 14,9 million euro as assigned revenue to cover future certification costs. This amount, however, is overestimated as it also includes fees levied under the rules of the former regulation. |
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9.

According to the new fees and charges regulation (5) applicable from 1 June 2007, the Agency considered 14,9 million euro as assigned revenue to cover future certification costs. This amount, however, is overestimated as it also includes fees levied under the rules of the former regulation.

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| 10. | In one procurement procedure, the absence of clear and complete information on the award criteria and their respective weightings, on the one hand, and the financial evaluation method, on the other hand, led to a situation of non-transparency for the bidders. In three other cases (6) the restricted procedure after a call for expressions of interest was applied although the overall value of the services to be awarded exceeded the threshold requiring an open procedure. |
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10.

In one procurement procedure, the absence of clear and complete information on the award criteria and their respective weightings, on the one hand, and the financial evaluation method, on the other hand, led to a situation of non-transparency for the bidders. In three other cases (6) the restricted procedure after a call for expressions of interest was applied although the overall value of the services to be awarded exceeded the threshold requiring an open procedure.

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This report was adopted by the Court of Auditors in Luxembourg at its meeting of 24 and 25 September 2008.

For the Court of Auditors

Vítor Manuel da SILVA CALDEIRA

President

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(1)  OJ L 240, 7.9.2002, p. 1.

1

(2)  OJ L 248, 16.9.2002, p. 1.

2

(3)  These accounts were drawn up on 30 June 2008 and received by the Court on 2 July 2008.

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(4)  International Federation of Accountants (IFAC) and International Standards of Supreme Audit Institutions (ISSAI).

4

(5)  Commission Regulation (EC) No 593/2007 of 31 May 2007 (OJ L 140, 1.6.2007, p. 3).

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(6)  Approximate total value: 2,5 million euro over four years.

6

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Table 1

European Aviation Safety Agency (Cologne)

| Areas of Community competence deriving from the Treaty | The Agency's powers as defined in Regulation (EC) No 1592/2002 of the Parliament and of the Council | Governance | Resources made available to the Agency in 2007

  (Data for 2006) | Products and services |
| --- | --- | --- | --- | --- |
| Common transport policy:

  The Council may, acting by a qualified majority, decide whether, to what extent and by what procedure appropriate provisions may be laid down for sea and air transport.

  (Article 80 of the Treaty) | Objectives

  To maintain a high uniform level of civil aviation safety in Europe and to ensure the proper functioning and development of civil aviation safety. | Measures to be adopted by the Agency







  — | To issue opinions to the Commission. |

Areas of Community competence deriving from the Treaty

The Agency's powers as defined in Regulation (EC) No 1592/2002 of the Parliament and of the Council

Governance

Resources made available to the Agency in 2007

(Data for 2006)

Products and services

Common transport policy:

The Council may, acting by a qualified majority, decide whether, to what extent and by what procedure appropriate provisions may be laid down for sea and air transport.

(Article 80 of the Treaty)

Objectives

To maintain a high uniform level of civil aviation safety in Europe and to ensure the proper functioning and development of civil aviation safety.

Measures to be adopted by the Agency

—

To issue opinions to the Commission.

| — | To issue certification specifications, including airworthiness codes and acceptable means of compliance, and any guidance material for the application of Community policy. |
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—

To issue certification specifications, including airworthiness codes and acceptable means of compliance, and any guidance material for the application of Community policy.

| — | To take decisions regarding airworthiness and environmental certification. |
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—

To take decisions regarding airworthiness and environmental certification.

| — | To conduct standardisation inspections of the competent authorities in the Member States. |
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—

To conduct standardisation inspections of the competent authorities in the Member States.

| — | To conduct the necessary investigations on company premises. |
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—

To conduct the necessary investigations on company premises.

| 1. | The Management Board consisting of one representative of each MemberState and one representative of the Commission, sets up an advisory body of interested parties. |
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1.

The Management Board consisting of one representative of each MemberState and one representative of the Commission, sets up an advisory body of interested parties.

| 2. | The Executive Director manages the Agency and is appointed by the Management Board on a proposal from the Commission. |
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2.

The Executive Director manages the Agency and is appointed by the Management Board on a proposal from the Commission.

| 3. | The Board of Appeal rules on the Agency's decisions concerning certification, fees, charges and checks at undertakings. |
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3.

The Board of Appeal rules on the Agency's decisions concerning certification, fees, charges and checks at undertakings.

| 4. | External control
  Court of Auditors. |
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4.

Court of Auditors.

| 5. | Discharge authority
  Parliament acting on a recommendation of the Council. |
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5.

Parliament acting on a recommendation of the Council.

Final budget

Total budget: 72 (66,8) million euro, including:

Revenue from fees and charges:

55,8 (33,2) million euro (65 %)

Community subsidy: 26,5 (31,4) million euro (31 %)

Contribution from the Federal Republic of Germany (Ministry of Transport) and City of Cologne: 0,3 (1,2) million euro.

Staff at 31 December 2007

467 (328) temporary staff in the establishment plan

posts occupied: 333 (276)

other staff: 29 (33) seconded national experts, contract and auxiliary staff

Total staff

362 (309) assigned to the following tasks:

| — | operational: 277 (227) |
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—

operational: 277 (227)

| — | administrative: 57 (57) |
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—

administrative: 57 (57)

| — | mixed: 28 (25) |
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—

mixed: 28 (25)

Opinions

5 opinions concerning amendments to Regulations (EC) No 1592/2002, (EC) No 1702/2003 and (EC) No 2042/2003.

Rulemaking decisions

17 amendments of certification: Specifications (15) and Acceptable Means of Compliance and Guidance Material (2).

International cooperation

| — | 7 Working Arrangements with China (5), New Zealand (1) and Albania (1). |
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—

7 Working Arrangements with China (5), New Zealand (1) and Albania (1).

| — | Amendments to Working Arrangements with Interstate Aviation Committee (USA) and JCAB (Japan). |
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—

Amendments to Working Arrangements with Interstate Aviation Committee (USA) and JCAB (Japan).

| — | Memorandum of Understanding with COCESNA/ACSA. |
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—

Memorandum of Understanding with COCESNA/ACSA.

Certification decisions at 31 December 2007

Type certificates: 29

Supplementary type certificates: 879

Airworthiness directives: 380

European technical specifications: 198

Acceptable means of compliance: 87

Major changes: 1 193

Minor changes: 2 655

Major repairs: 245

Minor repairs: 156

Aircraft flight manual (AFM): 430

Approval of flight conditions (PTF): 508

Approval of design organisations: 429

Approval of maintenance organisations (bilateral): 1 380

Approval of maintenance organisations (foreign): 224

Approval of maintenance training organisations: 24

Approval of manufacturing organisations: 16

Standardisation inspections (number of countries by type) at 31 December 2007

In the field of maintenance (MAST): 28

In the field of production (POAST): 12

Source: Information supplied by the Agency.

Table 2

European Aviation Safety Agency (Cologne) — Implementation of the budget for the financial year 2007

| (1000 euro) |
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| Revenue | Expenditure |
| Source of revenue | Revenue entered in the final budget for the financial year | Revenue collected | Allocation of expenditure | Final budget appropriations | Appropriation carried forward from the previous financial year |
| entered | committed | paid | carried over | cancelled | available | paid | cancelled |
| Own revenue | 42 800 | 40 967 | Title I
  Staff | 33 624 | 33 086 | 32 152 | 934 | 538 | 286 | 243 | 43 |
| Community subsidies | 26 530 | 26 530 |
| Other subsidies and revenue | 1 879 | 2 593 | Title II
  Administration | 9 819 | 9 564 | 7 968 | 1 596 | 255 | 2 585 | 2 504 | 81 |
| | | | Title III
  Operating activities | 27 766 | 27 155 | 9 956 | 17 199 | 611 | 16 381 | 14 238 | 2 143 |
| Assigned revenue from fees and charges | p.m. | 14 865 | Assigned revenue from fees and charges | p.m. | 14 865 | 0 | 14 865 | 0 | 0 | 0 | 0 |
| Other assigned revenue | 836 | 326 | Other assigned revenue | 836 | 326 | 326 | 500 | 10 | 0 | 0 | 0 |
| Total | 72 045 | 85 281 | Total | 72 045 | 84 996 | 50 402 | 35 094 | 1 414 | 19 252 | 16 985 | 2 267 |
| N.B.: Any discrepancies in totals are due to the effects of rounding.

  Source: Information supplied by the Agency. These tables summarise the data supplied by the Agency in its financial statements. |

(1000 euro)

Revenue

Expenditure

Source of revenue

Revenue entered in the final budget for the financial year

Revenue collected

Allocation of expenditure

Final budget appropriations

Appropriation carried forward from the previous financial year

entered

committed

paid

carried over

cancelled

available

paid

cancelled

Own revenue

42 800

40 967

Title I

Staff

33 624

33 086

32 152

934

538

286

243

43

Community subsidies

26 530

26 530

Other subsidies and revenue

1 879

2 593

Title II

Administration

9 819

9 564

7 968

1 596

255

2 585

2 504

81

Title III

Operating activities

27 766

27 155

9 956

17 199

611

16 381

14 238

2 143

Assigned revenue from fees and charges

p.m.

14 865

Assigned revenue from fees and charges

p.m.

14 865

0

14 865

0

0

0

0

Other assigned revenue

836

326

Other assigned revenue

836

326

326

500

10

0

0

0

Total

72 045

85 281

Total

72 045

84 996

50 402

35 094

1 414

19 252

16 985

2 267

N.B.: Any discrepancies in totals are due to the effects of rounding.

Source: Information supplied by the Agency. These tables summarise the data supplied by the Agency in its financial statements.

Table 3

European Aviation Safety Agency (Cologne) — Economic outturn account for the financial years 2007 and 2006

| (1000 euro) |
| --- |
| | 2007 | 2006 |
| Operating revenue |
| Fees and charges | 44 167 | 35 173 |
| Community subsidies | 24 166 | 26 401 |
| Other subsidies | 1 608 | 2 021 |
| Other revenue | 559 | 340 |
| Total (a) | 70 500 | 63 935 |
| Operating expenditure |
| Staff expenditure | 31 070 | 23 778 |
| Fixed asset related expenditure | 1 392 | 573 |
| Other administrative expenditure | 10 008 | 6 436 |
| Operational expenditure | 22 360 | 27 798 |
| Total (b) | 64 830 | 58 586 |
| Surplus/(deficit) from operating activities (c = a – b) | 5 670 | 5 349 |
| Financial operations revenue (e) | 605 | 263 |
| Financial operations expenditure (f) | 17 | 19 |
| Surplus/(deficit) from non-operating activities (g = e – f) | 588 | 244 |
| Economic result for the year (h = c + g) | 6 258 | 5 593 |
| Source: Data supplied by the Agency. This table summarises the data provided by the Agency in its annual accounts. These accounts are drawn up on a accrual basis. |

(1000 euro)

2007

2006

Operating revenue

Fees and charges

44 167

35 173

Community subsidies

24 166

26 401

Other subsidies

1 608

2 021

Other revenue

559

340

Total (a)

70 500

63 935

Operating expenditure

Staff expenditure

31 070

23 778

Fixed asset related expenditure

1 392

573

Other administrative expenditure

10 008

6 436

Operational expenditure

22 360

27 798

Total (b)

64 830

58 586

Surplus/(deficit) from operating activities (c = a – b)

5 670

5 349

Financial operations revenue (e)

605

263

Financial operations expenditure (f)

17

19

Surplus/(deficit) from non-operating activities (g = e – f)

588

244

Economic result for the year (h = c + g)

6 258

5 593

Source: Data supplied by the Agency. This table summarises the data provided by the Agency in its annual accounts. These accounts are drawn up on a accrual basis.

Table 4

European Aviation Safety Agency (Cologne) — Balance sheet at 31 December 2007 and 2006

| (1000 euro) |
| --- |
| | 2007 | 2006 |
| Non-current assets |
| Intangible assets | 274 | 268 |
| Tangible fixed assets | 1 542 | 1 719 |
| Current assets |
| Short-term prefinancing | 0 | 0 |
| Stocks | 0 | 0 |
| Short-term receivables | 21 820 | 13 881 |
| Cash and cash equivalents | 36 659 | 24 056 |
| Total assets | 60 295 | 39 924 |
| Current liabilities |
| Provision for risks and charges | 797 | 639 |
| Accounts payable | 44 618 | 30 663 |
| Total liabilities | 45 415 | 31 302 |
| Net assets | 14 880 | 8 622 |
| Reserves |
| Accumulated surplus/deficit | 8 622 | 3 029 |
| Economic result for the year | 6 258 | 5 593 |
| Net capital | 14 880 | 8 622 |
| Source: Data supplied by the Agency. This table summarises the data provided by the Agency in its annual accounts. These accounts are drawn up on a accrual basis. |

(1000 euro)

2007

2006

Non-current assets

Intangible assets

274

268

Tangible fixed assets

1 542

1 719

Current assets

Short-term prefinancing

0

0

Stocks

0

0

Short-term receivables

21 820

13 881

Cash and cash equivalents

36 659

24 056

Total assets

60 295

39 924

Current liabilities

Provision for risks and charges

797

639

Accounts payable

44 618

30 663

Total liabilities

45 415

31 302

Net assets

14 880

8 622

Reserves

Accumulated surplus/deficit

8 622

3 029

Economic result for the year

6 258

5 593

Net capital

14 880

8 622

Source: Data supplied by the Agency. This table summarises the data provided by the Agency in its annual accounts. These accounts are drawn up on a accrual basis.

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THE AGENCY'S REPLIES

| 8. | During the two first years of the implementation of the fees and charges regulations, the revenue of the Agency was insufficient to cover its forecasted overall costs. For the sake of prudence, the Agency decided to slow down recruitment. This was reflected in the Staff Policy Plan 2008-2010 which has been agreed with the Commission. |
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8.

During the two first years of the implementation of the fees and charges regulations, the revenue of the Agency was insufficient to cover its forecasted overall costs. For the sake of prudence, the Agency decided to slow down recruitment. This was reflected in the Staff Policy Plan 2008-2010 which has been agreed with the Commission.

| 9. | The year 2007 was a transition phase for which both old and new fees and charges regulations were applied. The calculation of the assigned revenue from fees and charges complies with Article 64(5) of the basic Regulation (EC) No 216/2008 that stipulates that fees collected in 2007 shall be assigned revenues. Indeed, the basic Regulation does not foresee that fees collected under the former regulation have to be excluded. The detail of the calculations was presented to the Budget Committee of the Management Board (28 May 2008). |
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9.

The year 2007 was a transition phase for which both old and new fees and charges regulations were applied. The calculation of the assigned revenue from fees and charges complies with Article 64(5) of the basic Regulation (EC) No 216/2008 that stipulates that fees collected in 2007 shall be assigned revenues. Indeed, the basic Regulation does not foresee that fees collected under the former regulation have to be excluded. The detail of the calculations was presented to the Budget Committee of the Management Board (28 May 2008).

| 10. | The Agency is fully aware of the necessity to comply strictly with the procurement rules of the Commission. It will pay particular attention to clearly informing the potential bidders on the award criteria and their evaluation. |
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10.

The Agency is fully aware of the necessity to comply strictly with the procurement rules of the Commission. It will pay particular attention to clearly informing the potential bidders on the award criteria and their evaluation.

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