# Official Journal C 312/2006

| | ISSN 1725-2423 |
| --- | --- |
| Official Journal
  of the European Union | C 312 |
| | |
| English edition | Information and Notices | Volume 4919 December 2006 |

ISSN 1725-2423

Official Journal

of the European Union

C 312

English edition

Information and Notices

Volume 4919 December 2006

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| Notice No | Contents | page |
| --- | --- | --- |
| | I   Information |
| | Court of Auditors |
| 2006/C 312/1 | Report on the annual accounts of the European Network and Information Security Agency for the financial year 2005 together with the Agency's replies | 1 |
| 2006/C 312/2 | Report on the annual accounts of the European Aviation Safety Agency for the financial year 2005 together with the Agency's replies | 6 |
| 2006/C 312/3 | Report on the annual accounts of the European Medicines Agency for the financial year 2005 together with the Agency's replies | 12 |
| 2006/C 312/4 | Report on the annual accounts of the European Agency for Reconstruction for the financial year 2005 together with the Agency's replies | 18 |
| 2006/C 312/5 | Report on the annual accounts of the European Agency for Safety and Health at Work for the financial year 2005 together with the Agency's replies | 24 |
| 2006/C 312/6 | Report on the annual accounts of the European Maritime Safety Agency for the financial year 2005 together with the Agency's replies | 30 |
| 2006/C 312/7 | Report on the annual accounts of the European Environment Agency for the financial year 2005 together with the Agency's replies | 36 |
| 2006/C 312/8 | Report on the annual accounts of the European Food Safety Authority for the financial year 2005 together with the Authority's replies | 42 |
| 2006/C 312/9 | Report on the annual accounts of the Translation Centre for the Bodies of the European Union for the financial year 2005 together with the Centre's replies | 48 |
| 2006/C 312/0 | Report on the annual accounts of the European Centre for Disease Prevention and Control for the financial year 2005 together with the Centre's replies | 54 |
| 2006/C 312/1 | Report on the annual accounts of the European Centre for the Development of Vocational Training for the financial year 2005 together with the Centre's replies | 60 |
| 2006/C 312/2 | Report on the annual accounts of Eurojust for the financial year 2005 together with Eurojust's replies | 67 |
| 2006/C 312/3 | Report on the annual accounts of the European Training Foundation for the financial year 2005 together with the Foundation's replies | 73 |
| 2006/C 312/4 | Report on the annual accounts of the European Foundation for the Improvement of Living and Working Conditions for the financial year 2005 together with the Foundation's replies | 80 |
| 2006/C 312/5 | Report on the annual accounts of the European Monitoring Centre for Drugs and Drug Addiction for the financial year 2005 together with the Centre's replies | 86 |
| 2006/C 312/6 | Report on the annual accounts of the European Monitoring Centre on Racism and Xenophobia for the financial year 2005 together with the Centre's replies | 93 |
| 2006/C 312/7 | Report on the annual accounts of the Community Plant Variety Office for the financial year 2005 together with the Office's replies | 99 |
| 2006/C 312/8 | Report on the annual accounts of the Office for Harmonisation in the Internal Market for the financial year 2005 together with the Office's replies | 106 |

Notice No

Contents

page

I   Information

Court of Auditors

2006/C 312/1

Report on the annual accounts of the European Network and Information Security Agency for the financial year 2005 together with the Agency's replies

1

2006/C 312/2

Report on the annual accounts of the European Aviation Safety Agency for the financial year 2005 together with the Agency's replies

6

2006/C 312/3

Report on the annual accounts of the European Medicines Agency for the financial year 2005 together with the Agency's replies

12

2006/C 312/4

Report on the annual accounts of the European Agency for Reconstruction for the financial year 2005 together with the Agency's replies

18

2006/C 312/5

Report on the annual accounts of the European Agency for Safety and Health at Work for the financial year 2005 together with the Agency's replies

24

2006/C 312/6

Report on the annual accounts of the European Maritime Safety Agency for the financial year 2005 together with the Agency's replies

30

2006/C 312/7

Report on the annual accounts of the European Environment Agency for the financial year 2005 together with the Agency's replies

36

2006/C 312/8

Report on the annual accounts of the European Food Safety Authority for the financial year 2005 together with the Authority's replies

42

2006/C 312/9

Report on the annual accounts of the Translation Centre for the Bodies of the European Union for the financial year 2005 together with the Centre's replies

48

2006/C 312/0

Report on the annual accounts of the European Centre for Disease Prevention and Control for the financial year 2005 together with the Centre's replies

54

2006/C 312/1

Report on the annual accounts of the European Centre for the Development of Vocational Training for the financial year 2005 together with the Centre's replies

60

2006/C 312/2

Report on the annual accounts of Eurojust for the financial year 2005 together with Eurojust's replies

67

2006/C 312/3

Report on the annual accounts of the European Training Foundation for the financial year 2005 together with the Foundation's replies

73

2006/C 312/4

Report on the annual accounts of the European Foundation for the Improvement of Living and Working Conditions for the financial year 2005 together with the Foundation's replies

80

2006/C 312/5

Report on the annual accounts of the European Monitoring Centre for Drugs and Drug Addiction for the financial year 2005 together with the Centre's replies

86

2006/C 312/6

Report on the annual accounts of the European Monitoring Centre on Racism and Xenophobia for the financial year 2005 together with the Centre's replies

93

2006/C 312/7

Report on the annual accounts of the Community Plant Variety Office for the financial year 2005 together with the Office's replies

99

2006/C 312/8

Report on the annual accounts of the Office for Harmonisation in the Internal Market for the financial year 2005 together with the Office's replies

106

| | Corrigenda |
| --- | --- |
| 2006/C 312/9 | Corrigendum to European Aviation Safety Agency – Publication of the final accounts for the financial year 2005 (OJ C 266, 31.10.2006) | 112 |

Corrigenda

2006/C 312/9

Corrigendum to European Aviation Safety Agency – Publication of the final accounts for the financial year 2005 (OJ C 266, 31.10.2006)

112

| EN | |
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EN

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I Information

Court of Auditors

| 19.12.2006 | EN | Official Journal of the European Union | C 312/1 |
| --- | --- | --- | --- |

19.12.2006

EN

Official Journal of the European Union

C 312/1

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REPORT

on the annual accounts of the European Network and Information Security Agency for the financial year 2005 together with the Agency's replies

(2006/C 312/01)

CONTENTS

| 1-2 | INTRODUCTION |
| --- | --- |

1-2

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

3-6

| 7-8 | OBSERVATIONS |
| --- | --- |

7-8

Tables 1 to 4

The Agency's replies

INTRODUCTION

| 1. | The European Network and Information Security Agency (hereinafter the Agency) was created by Regulation (EC) No 460/2004 of the European Parliament and of the Council of 10 March 2004 (1). It became fully autonomous in the second half of 2005. The Agency's main task is to enhance the capability of the Community to prevent and respond to network and information security problems by building on national and Community efforts. In principle its mandate expires in 2009. |
| --- | --- |

1.

The European Network and Information Security Agency (hereinafter the Agency) was created by Regulation (EC) No 460/2004 of the European Parliament and of the Council of 10 March 2004 (1). It became fully autonomous in the second half of 2005. The Agency's main task is to enhance the capability of the Community to prevent and respond to network and information security problems by building on national and Community efforts. In principle its mandate expires in 2009.

| 2. | Table 1 summarises the Agency's competences and activities. Key information from the financial statements drawn up by the Agency for the financial year 2005 is presented in Tables 2, 3 and 4. |
| --- | --- |

2.

Table 1 summarises the Agency's competences and activities. Key information from the financial statements drawn up by the Agency for the financial year 2005 is presented in Tables 2, 3 and 4.

STATEMENT OF ASSURANCE

| 3. | This Statement is addressed to the European Parliament and the Council in accordance with Article 185(2) of Council Regulation (EC, Euratom) No 1605/2002 of 25 June 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. |
| --- | --- |

3.

This Statement is addressed to the European Parliament and the Council in accordance with Article 185(2) of Council Regulation (EC, Euratom) No 1605/2002 of 25 June 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.

| 4. | The Agency's accounts for the financial year ended 31 December 2005 (3) were drawn up by its Executive Director, pursuant to Article 17 of Regulation (EC) No 460/2004, 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. |
| --- | --- |

4.

The Agency's accounts for the financial year ended 31 December 2005 (3) were drawn up by its Executive Director, pursuant to Article 17 of Regulation (EC) No 460/2004, 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.

| 5. | The Court conducted its audit in accordance with its policies and standards, which are based on international auditing standards that have been adapted to the Community context. The audit was planned and performed to obtain reasonable assurance that the accounts are reliable and the underlying transactions are legal and regular. |
| --- | --- |

5.

The Court conducted its audit in accordance with its policies and standards, which are based on international auditing standards that have been adapted to the Community context. The audit was planned and performed to obtain reasonable assurance that the accounts are reliable and the underlying transactions are legal and regular.

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

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 2005 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 implementation of the budget for the financial year 2005 was marked by a low rate of commitment (70 %) and a substantial rate of carry-over (more than 40 % overall and up to almost 80 % for operating expenditure). This situation was in part due to problems inherent in the Agency's start-up period and to the fact that it did not start becoming operational until the second half of 2005. In future, the Agency should be vigilant concerning this risk, in particular by ensuring strict programming of its activities. |
| --- | --- |

7.

The implementation of the budget for the financial year 2005 was marked by a low rate of commitment (70 %) and a substantial rate of carry-over (more than 40 % overall and up to almost 80 % for operating expenditure). This situation was in part due to problems inherent in the Agency's start-up period and to the fact that it did not start becoming operational until the second half of 2005. In future, the Agency should be vigilant concerning this risk, in particular by ensuring strict programming of its activities.

| 8. | The Court noted that no activity-based management had been brought in, despite the Agency's financial regulation making provision for its introduction, on the lines of that applied to the general budget, with a view to improving the monitoring of performance. In this context, achieving the Agency's aims should not mean merely carrying out a series of tasks. It should rather be seen as contributing to the goals laid down in its basic Regulation. The Agency's work programme should, in principle, express this contribution in operational and measurable terms. |
| --- | --- |

8.

The Court noted that no activity-based management had been brought in, despite the Agency's financial regulation making provision for its introduction, on the lines of that applied to the general budget, with a view to improving the monitoring of performance. In this context, achieving the Agency's aims should not mean merely carrying out a series of tasks. It should rather be seen as contributing to the goals laid down in its basic Regulation. The Agency's work programme should, in principle, express this contribution in operational and measurable terms.

This report was adopted by the Court of Auditors in Luxembourg at its meeting of 28 September 2006.

For the Court of Auditors

Hubert WEBER

President

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(1)  OJ L 77, 13.3.2004, p. 1.

1

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

2

(3)  These accounts were drawn up on 1 July 2006 and received by the Court on 7 July 2006.

3

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Table 1

European Network and Information Security Agency

| Areas of Community competence | Competences of the Agency
  (Council Regulation (EC) No 460/2004 of 10 March 2004) | Governance | Resources made available to the Agency | Products and services supplied |
| --- | --- | --- | --- | --- |
| The representatives of the Member State governments have, by common agreement, adopted a statement on the creation of a European Network and Information Security Agency. The Agency should operate as a point of reference and establish confidence by virtue of its independence, the quality of the advice it delivers and the information it disseminates, the transparency of its procedures and methods of operating, and its diligence in performing the tasks assigned to it.

  (Council Decision of 19 February 2004, taken on the basis of Article 251 of the Treaty) | Objectives:







  — | enhance the capability of the Community, the Member States and businesses to prevent network and information security problems, |

Areas of Community competence

Competences of the Agency

(Council Regulation (EC) No 460/2004 of 10 March 2004)

Governance

Resources made available to the Agency

Products and services supplied

The representatives of the Member State governments have, by common agreement, adopted a statement on the creation of a European Network and Information Security Agency. The Agency should operate as a point of reference and establish confidence by virtue of its independence, the quality of the advice it delivers and the information it disseminates, the transparency of its procedures and methods of operating, and its diligence in performing the tasks assigned to it.

(Council Decision of 19 February 2004, taken on the basis of Article 251 of the Treaty)

Objectives:

—

enhance the capability of the Community, the Member States and businesses to prevent network and information security problems,

| — | provide assistance and advice to the Commission and the Member States on issues related to network and information security, |
| --- | --- |

—

provide assistance and advice to the Commission and the Member States on issues related to network and information security,

| — | develop a high level of expertise on the basis of national and Community experience, |
| --- | --- |

—

develop a high level of expertise on the basis of national and Community experience,

| — | assist the Commission in the preparatory work for updating and developing Community legislation in the field of network and information security. |
| --- | --- |

—

assist the Commission in the preparatory work for updating and developing Community legislation in the field of network and information security.

Tasks:

| — | collect appropriate information to analyse current and emerging risks, |
| --- | --- |

—

collect appropriate information to analyse current and emerging risks,

| — | provide the European Parliament, the Commission and European or national bodies with advice, |
| --- | --- |

—

provide the European Parliament, the Commission and European or national bodies with advice,

| — | facilitate cooperation between the Commission and the Member States in the development of common methodologies to prevent network and information security issues, |
| --- | --- |

—

facilitate cooperation between the Commission and the Member States in the development of common methodologies to prevent network and information security issues,

| — | track the development of standards for products and services on network and information security, |
| --- | --- |

—

track the development of standards for products and services on network and information security,

| — | cooperate with third countries and international organisations to promote a common global approach to network and information security issues, |
| --- | --- |

—

cooperate with third countries and international organisations to promote a common global approach to network and information security issues,

| — | express its own conclusions independently. |
| --- | --- |

—

express its own conclusions independently.

1. Management Board

Composition

| — | one representative of each Member State, |
| --- | --- |

—

one representative of each Member State,

| — | three representatives from the Commission, |
| --- | --- |

—

three representatives from the Commission,

| — | three representatives, appointed by the Council, without the right to vote, each representing one of the following groups: |
| --- | --- |

—

three representatives, appointed by the Council, without the right to vote, each representing one of the following groups:

| — | the information and communication technologies industry, |
| --- | --- |

—

the information and communication technologies industry,

| — | consumer groups, |
| --- | --- |

—

consumer groups,

| — | academic experts in network and information security. |
| --- | --- |

—

academic experts in network and information security.

Task

Adopt the Agency's annual work programme and its annual report.

2. Executive Director

Appointed by the Management Board on a proposal from the Commission.

3. External audit

Court of Auditors.

4. Internal audit

The Commission's Internal Auditor.

5. Discharge authority

Parliament on a recommendation from the Council.

2005 final budget:

6,3 million euro (100 % Community subsidy).

Staff numbers at 31 December 2005:

38 posts in the establishment plan

posts occupied: 35

+15 other staff (seconded national experts)

Total staff: 50

assigned to the following duties:

operational: 22

administrative: 28

Working groups:

Three working groups were set up in 2005 and finished their work: Risk Management, Awareness Raising and CERTS.

Publications:

| — | one annual report |
| --- | --- |

—

one annual report

| — | ENISA Quaterly Newsletter: 3 issues |
| --- | --- |

—

ENISA Quaterly Newsletter: 3 issues

Cooperation with Member States and the other institutions:

(number of events organised jointly):

| — | Member States: 2 seminars and 7 events organised in the Member States |
| --- | --- |

—

Member States: 2 seminars and 7 events organised in the Member States

Other products/services:

| — | Who's Who on Network and Information Security |
| --- | --- |

—

Who's Who on Network and Information Security

| — | 1 CD-ROM ‘ENISA inventory of CERT activities in Europe’ |
| --- | --- |

—

1 CD-ROM ‘ENISA inventory of CERT activities in Europe’

| — | 1 CD-ROM ‘Raising Awareness in Information Security, Insight and Guidance for Member States’ |
| --- | --- |

—

1 CD-ROM ‘Raising Awareness in Information Security, Insight and Guidance for Member States’

Source: Information supplied by the Agency.

EUROPEAN NETWORK AND INFORMATION SECURITY AGENCY

Source: Agency data — These tables summarise the data supplied by the Agency in its annual accounts.

Table 2

Implementation of the budget for the financial year 2005

| (1000 euro) |
| --- |
| Revenue | Expenditure |
| Source of revenue | Revenue entered in the final budget for the financial year | Revenue received | Allocation of expenditure | Final budget appropriations |
| entered | committed | paid | carried over | cancelled |
| Community subsidies | 6 346 | 4 400 | Title I
  Staff | 2 375 | 1 764 | 1 490 | 257 | 628 |
| | | | Title II
  Administration | 2 483 | 1 772 | 453 | 1 065 | 965 |
| | | | Title III
  Operating activities | 1 488 | 1 004 | 196 | 790 | 502 |
| Total | 6 346 | 4 400 | Total | 6 346 | 4 540 | 2 139 | 2 112 | 2 095 |

(1000 euro)

Revenue

Expenditure

Source of revenue

Revenue entered in the final budget for the financial year

Revenue received

Allocation of expenditure

Final budget appropriations

entered

committed

paid

carried over

cancelled

Community subsidies

6 346

4 400

Title I

Staff

2 375

1 764

1 490

257

628

Title II

Administration

2 483

1 772

453

1 065

965

Title III

Operating activities

1 488

1 004

196

790

502

Total

6 346

4 400

Total

6 346

4 540

2 139

2 112

2 095

Table 3

Revenue and expenditure account for the financial year 2005

| (1000 euro) |
| --- |
| Operating revenue |
| Community subsidies | 4 251 |
| Total (a) | 4 251 |
| Operating expenditure |
| Staff | 1 040 |
| Administration | 1 594 |
| Operating activities | 517 |
| Total (b) | 3 151 |
| Operating result (c = a — b) | 1 100 |

(1000 euro)

Operating revenue

Community subsidies

4 251

Total (a)

4 251

Operating expenditure

Staff

1 040

Administration

1 594

Operating activities

517

Total (b)

3 151

Operating result (c = a — b)

1 100

Table 4

Balance sheet at 31 December 2005

| (1000 euro) |
| --- |
| Assets |
| Fixed assets | 344 |
| Receivables | 13 |
| Cash and cash equivalents | 2 510 |
| Total | 2 867 |
| Liabilities |
| Accumulated surplus/deficit | 0 |
| Economic result for the year | 1 100 |
| Current liabilities | 1 767 |
| Total | 2 867 |

(1000 euro)

Assets

Fixed assets

344

Receivables

13

Cash and cash equivalents

2 510

Total

2 867

Liabilities

Accumulated surplus/deficit

0

Economic result for the year

1 100

Current liabilities

1 767

Total

2 867

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THE AGENCY'S REPLIES

| 7. | The Agency became operational only in September 2005. Being understaffed, and having limited time available, it proved very difficult to improve the budget implementation rates. The management will take necessary action and it is expected to have higher execution rates for the budget implementation of 2006. |
| --- | --- |

7.

The Agency became operational only in September 2005. Being understaffed, and having limited time available, it proved very difficult to improve the budget implementation rates. The management will take necessary action and it is expected to have higher execution rates for the budget implementation of 2006.

| 8. | Having less than 12 months of operational activity, the Agency lacks the necessary resources in order to introduce and apply effectively an Activity Based Management system. It is true that Activity Based Management would improve dramatically the measurability of the Agency's work. The management will endeavour to have it in place as soon as the Agency is in a position to dedicate the necessary resources for an Activity Based Management system to be developed. |
| --- | --- |

8.

Having less than 12 months of operational activity, the Agency lacks the necessary resources in order to introduce and apply effectively an Activity Based Management system. It is true that Activity Based Management would improve dramatically the measurability of the Agency's work. The management will endeavour to have it in place as soon as the Agency is in a position to dedicate the necessary resources for an Activity Based Management system to be developed.

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| 19.12.2006 | EN | Official Journal of the European Union | C 312/6 |
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19.12.2006

EN

Official Journal of the European Union

C 312/6

---

REPORT

on the annual accounts of the European Aviation Safety Agency for the financial year 2005 together with the Agency's replies

(2006/C 312/02)

CONTENTS

| 1-2 | INTRODUCTION |
| --- | --- |

1-2

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

3-6

| 7-11 | OBSERVATIONS |
| --- | --- |

7-11

Tables 1 to 4

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. |
| --- | --- |

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.

| 2. | Table 1 summarises the competences and activities of the Agency. Key information from the financial statements drawn up by the Agency for the financial year 2005 is presented in Tables 2, 3 and 4. |
| --- | --- |

2.

Table 1 summarises the competences and activities of the Agency. Key information from the financial statements drawn up by the Agency for the financial year 2005 is presented in 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. |
| --- | --- |

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.

| 4. | The Agency's accounts for the financial year ended 31 December 2005 (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. |
| --- | --- |

4.

The Agency's accounts for the financial year ended 31 December 2005 (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.

| 5. | The Court conducted an audit in accordance with its policies and standards, which are based on international auditing standards that have been adapted to the Community context. The audit was planned and performed to obtain reasonable assurance that the accounts are reliable and the underlying transactions are legal and regular. |
| --- | --- |

5.

The Court conducted an audit in accordance with its policies and standards, which are based on international auditing standards that have been adapted to the Community context. The audit was planned and performed to obtain reasonable assurance that the accounts are reliable and the underlying transactions are legal and regular.

| 6. | The Court has thus obtained a reasonable basis for the statement expressed below. |
| --- | --- |

6.

The Court has thus obtained a reasonable basis for the statement expressed below.

Reliability of the accountsThe Agency's accounts for the financial year ended 31 December 2005 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 opinion into question.

OBSERVATIONS

| 7. | The utilisation rate for commitment and payment appropriations was less than 80 %. This situation is due to the low rate of implementation of commitment and payment appropriations (69 % and 32 % respectively) for operating expenditure. The cancellation rate for appropriations for the financial year is also high (ranging from 7 % to more than 30 % depending on the title of the expenditure and the nature of the appropriations). Cancellation rates for appropriations carried over from the previous year are also high. This situation should prompt the Agency to improve and step up the monitoring of its planning so as to ensure that resources are not mobilised unnecessarily. |
| --- | --- |

7.

The utilisation rate for commitment and payment appropriations was less than 80 %. This situation is due to the low rate of implementation of commitment and payment appropriations (69 % and 32 % respectively) for operating expenditure. The cancellation rate for appropriations for the financial year is also high (ranging from 7 % to more than 30 % depending on the title of the expenditure and the nature of the appropriations). Cancellation rates for appropriations carried over from the previous year are also high. This situation should prompt the Agency to improve and step up the monitoring of its planning so as to ensure that resources are not mobilised unnecessarily.

| 8. | The appropriations under one budget heading were amended by 1,2 million euro but the Agency submitted no documents to justify this reduction. |
| --- | --- |

8.

The appropriations under one budget heading were amended by 1,2 million euro but the Agency submitted no documents to justify this reduction.

| 9. | The Court notes the failure to introduce activity-based management even though the Agency's Financial Regulation provides for its introduction, along the lines applied to the general budget, so as to allow better monitoring of performance. In this respect, the realisation of the Agency's objectives must not be reduced to the implementation of a series of tasks but should be appraised in terms of its contribution to the objectives established in its basic Regulation. The Agency's work programme should, in principle, express this contribution in operational and measurable terms. |
| --- | --- |

9.

The Court notes the failure to introduce activity-based management even though the Agency's Financial Regulation provides for its introduction, along the lines applied to the general budget, so as to allow better monitoring of performance. In this respect, the realisation of the Agency's objectives must not be reduced to the implementation of a series of tasks but should be appraised in terms of its contribution to the objectives established in its basic Regulation. The Agency's work programme should, in principle, express this contribution in operational and measurable terms.

| 10. | The Management Board did not adopt minimal internal-control standards. Management and internal-control systems and procedures were not always described. The risks linked to financial transactions were not analysed. The initiation and operational verification of payment functions were not always separate in 2005. The procedures introduced by the authorising officers to guarantee the accuracy and exhaustiveness of the financial information they submit to the accounting officer were not validated. At the end of 2005, the Agency still did not have a system for ensuring that the fees which it charges its clients for the services it provides were sufficient to cover the cost of those services. |
| --- | --- |

10.

The Management Board did not adopt minimal internal-control standards. Management and internal-control systems and procedures were not always described. The risks linked to financial transactions were not analysed. The initiation and operational verification of payment functions were not always separate in 2005. The procedures introduced by the authorising officers to guarantee the accuracy and exhaustiveness of the financial information they submit to the accounting officer were not validated. At the end of 2005, the Agency still did not have a system for ensuring that the fees which it charges its clients for the services it provides were sufficient to cover the cost of those services.

| 11. | The principle of open competition was not observed in certain cases: the Agency used the negotiated procedure for one 250 000 euro contract with an employment agency. For security services, the Agency renewed the contract it had signed in 2004 (value: 85 557 euro) by direct agreement and without justification. In another case, the Agency invited only four tenderers to submit a bid even though there were five names on the list drawn up following a call for expressions of interest. |
| --- | --- |

11.

The principle of open competition was not observed in certain cases: the Agency used the negotiated procedure for one 250 000 euro contract with an employment agency. For security services, the Agency renewed the contract it had signed in 2004 (value: 85 557 euro) by direct agreement and without justification. In another case, the Agency invited only four tenderers to submit a bid even though there were five names on the list drawn up following a call for expressions of interest.

This report was adopted by the Court of Auditors in Luxembourg at its meeting of 28 September 2006.

For the Court of Auditors

Hubert WEBER

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 2006 and received by the Court on 3 July 2006.

3

---

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 of 15 July 2002 | Governance | Resources made available to the Agency | 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 of 15 July 2002

Governance

Resources made available to the Agency

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, |
| --- | --- |

—

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, |
| --- | --- |

—

to take decisions regarding airworthiness and environmental certification,

| — | to conduct standardisation inspections at the competent authorities of the Member States, |
| --- | --- |

—

to conduct standardisation inspections at the competent authorities of the Member States,

| — | to conduct the necessary investigations in undertakings. |
| --- | --- |

—

to conduct the necessary investigations in undertakings.

1. The Management Board

consisting of one representative of each Member State 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.

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.

5. Discharge authority

the Parliament on a recommendation from the Council.

Final budget for 2005:

Total budget: 36,5 million euro, including:

revenue from fees and charges: 8,6 million euro

Community subsidy: 18,6 million euro

200 posts in the establishment plan

posts occupied: 132

+21 other posts

Total staff: 153

assigned to the following tasks:

| — | operational: 86 |
| --- | --- |

—

operational: 86

| — | administrative: 38 |
| --- | --- |

—

administrative: 38

| — | mixed: 29 |
| --- | --- |

—

mixed: 29

Opinions:

| — | four opinions concerning amendments to Regulations Nos 1592/2002, 1702/2003 and 2042/2003, |
| --- | --- |

—

four opinions concerning amendments to Regulations Nos 1592/2002, 1702/2003 and 2042/2003,

| — | one opinion concerning the acceptance of navigation database suppliers, |
| --- | --- |

—

one opinion concerning the acceptance of navigation database suppliers,

| — | five opinions on opt-outs requested by EASA Member States. |
| --- | --- |

—

five opinions on opt-outs requested by EASA Member States.

Rulemaking decisions:

| — | one amendment of CS 25 certification specifications, |
| --- | --- |

—

one amendment of CS 25 certification specifications,

| — | one amendment of Acceptable Means of Compliance and Guidance Material for Regulation No 2042/2003. |
| --- | --- |

—

one amendment of Acceptable Means of Compliance and Guidance Material for Regulation No 2042/2003.

International cooperation:

| — | two new cooperation agreements with China regarding Eurocopter and Dassault products, |
| --- | --- |

—

two new cooperation agreements with China regarding Eurocopter and Dassault products,

| — | extension of the cooperation agreement with the Aeronautical Committee of the Commonwealth of Independent States. |
| --- | --- |

—

extension of the cooperation agreement with the Aeronautical Committee of the Commonwealth of Independent States.

Certification decisions:

| | Type certificates: 78 |
| --- | --- |

Type certificates: 78

| | Supplementary type certificates: 900 |
| --- | --- |

Supplementary type certificates: 900

| | Airworthiness directives: 490 |
| --- | --- |

Airworthiness directives: 490

| | European Technical Specifications: 249 |
| --- | --- |

European Technical Specifications: 249

| | Acceptable means of compliance: 116 |
| --- | --- |

Acceptable means of compliance: 116

| | Major changes: 693 |
| --- | --- |

Major changes: 693

| | Minor changes: 2 369 |
| --- | --- |

Minor changes: 2 369

| | Major repairs: 192 |
| --- | --- |

Major repairs: 192

| | Minor repairs: 1 384 |
| --- | --- |

Minor repairs: 1 384

| | AFM/RFM (= Flight Manual Revisions): 334 |
| --- | --- |

AFM/RFM (= Flight Manual Revisions): 334

| | Approval of design organisations: 55 |
| --- | --- |

Approval of design organisations: 55

| | Approval of maintenance organisations (bilateral): 85 |
| --- | --- |

Approval of maintenance organisations (bilateral): 85

| | Approval of maintenance organisations (foreign): 113 |
| --- | --- |

Approval of maintenance organisations (foreign): 113

| | Approval of maintenance training organisations: 11 |
| --- | --- |

Approval of maintenance training organisations: 11

| | Approval of manufacturing organisations: 4 |
| --- | --- |

Approval of manufacturing organisations: 4

Standardisation inspections (number of countries by type):

| | Approval of manufacturing organisations: 7 countries |
| --- | --- |

Approval of manufacturing organisations: 7 countries

| | Approval of maintenance organisations: 19 countries |
| --- | --- |

Approval of maintenance organisations: 19 countries

Source: Information supplied by the Agency.

EUROPEAN AVIATION SAFETY AGENCY

Source: Agency data — These tables summarise the data supplied by the Agency in its annual accounts.

Table 2

Implementation of the budget for the financial year 2005

| (1000 euro) |
| --- |
| Revenue | Expenditure |
| Origin of revenue | Revenue entered in the final budget for the financial year | Revenue collected | Allocation of expenditure | Final budget appropriations | Appropriations carried over from the previous financial year | Appropriations available
  (2005 and 2004) |
| entered | committed | paid | carried over | cancelled | outstanding commitments | paid | cancelled | appropriations | committed | paid | carried over | cancelled |
| Community subsidies | 22 138 | 18 930 | Title I
  Staff | 16 192 | 13 968 | 13 754 | 214 | 2 224 | 314 | 212 | 102 | 16 506 | 14 282 | 13 966 | 214 | 2 326 |
| Own revenue | 8 000 | 8 569 | Title II
  Administration | 3 691 | 3 428 | 2 646 | 782 | 263 | 810 | 732 | 78 | 4 501 | 4 238 | 3 378 | 782 | 341 |
| Other revenue | 1 443 | 1 472 | Title III
  Operating activities | | | | | | | | | | | | | |
| CA | 20 098 | 13 865 | 0 | 0 | 6 233 | 0 | 0 | 0 | 20 098 | 13 865 | 0 | 0 | 6 233 |
| PA | 11 698 | 0 | 4 656 | 5 611 | 1 431 | 264 | 237 | 27 | 11 962 | 0 | 4 893 | 5 611 | 1 458 |
| Total | 31 581 | 28 971 | Total CA | 39 981 | 31 261 | 0 | 996 | 8 720 | 1 124 | 944 | 180 | 41 105 | 32 385 | 0 | 996 | 8 900 |
| Total PA | 31 581 | 0 | 21 056 | 6 607 | 3 918 | 1 388 | 1 181 | 207 | 32 969 | 0 | 22 237 | 6 607 | 4 125 |
| CA: commitment appropriations, PA: payment appopriations. |

(1000 euro)

Revenue

Expenditure

Origin of revenue

Revenue entered in the final budget for the financial year

Revenue collected

Allocation of expenditure

Final budget appropriations

Appropriations carried over from the previous financial year

Appropriations available

(2005 and 2004)

entered

committed

paid

carried over

cancelled

outstanding commitments

paid

cancelled

appropriations

committed

paid

carried over

cancelled

Community subsidies

22 138

18 930

Title I

Staff

16 192

13 968

13 754

214

2 224

314

212

102

16 506

14 282

13 966

214

2 326

Own revenue

8 000

8 569

Title II

Administration

3 691

3 428

2 646

782

263

810

732

78

4 501

4 238

3 378

782

341

Other revenue

1 443

1 472

Title III

Operating activities

CA

20 098

13 865

0

0

6 233

0

0

0

20 098

13 865

0

0

6 233

PA

11 698

0

4 656

5 611

1 431

264

237

27

11 962

0

4 893

5 611

1 458

Total

31 581

28 971

Total CA

39 981

31 261

0

996

8 720

1 124

944

180

41 105

32 385

0

996

8 900

Total PA

31 581

0

21 056

6 607

3 918

1 388

1 181

207

32 969

0

22 237

6 607

4 125

CA: commitment appropriations, PA: payment appopriations.

Table 3

Revenue and expenditure account for the financial years 2005 and 2004

| (1000 euro) |
| --- |
| | 2005 | 2004 |
| Operating revenue |
| Community subsidies | 17 416 | 7 777 |
| Other subsidies/revenue | 13 053 | 601 |
| Total (a) | 30 469 | 8 378 |
| Operating expenditure |
| Staff | 13 636 | 5 557 |
| Administration | 4 016 | 1 521 |
| Operations | 11 660 | 2 081 |
| Total (b) | 29 312 | 9 159 |
| Operating result (c = a — b) | 1 157 | – 781 |
| Other income (d) | 41 | 0 |
| Other charges (e) | –14 | –1 |
| Economic result (f = c + d + e) | 1 184 | – 782 |

(1000 euro)

2005

2004

Operating revenue

Community subsidies

17 416

7 777

Other subsidies/revenue

13 053

601

Total (a)

30 469

8 378

Operating expenditure

Staff

13 636

5 557

Administration

4 016

1 521

Operations

11 660

2 081

Total (b)

29 312

9 159

Operating result (c = a — b)

1 157

– 781

Other income (d)

41

0

Other charges (e)

–14

–1

Economic result (f = c + d + e)

1 184

– 782

Table 4

Balance sheet as at 31 December 2005 and 31 December 2004

| (1000 euro) |
| --- |
| | 2005 | 2004 |
| Assets |
| Tangible assets | 1 531 | 991 |
| Current assets | 8 816 | 329 |
| Cash | 11 746 | 4 978 |
| Total | 22 093 | 6 298 |
| Liabilities |
| Total outturns for previous financial years | 1 845 | 2 627 |
| Outturn for the year | 1 184 | – 782 |
| Current liabilities | 19 064 | 4 453 |
| Total | 22 093 | 6 298 |

(1000 euro)

2005

2004

Assets

Tangible assets

1 531

991

Current assets

8 816

329

Cash

11 746

4 978

Total

22 093

6 298

Liabilities

Total outturns for previous financial years

1 845

2 627

Outturn for the year

1 184

– 782

Current liabilities

19 064

4 453

Total

22 093

6 298

---

THE AGENCY'S REPLIES

| 7. | The utilisation of commitment appropriations was less than forecast due to recruitment difficulties. The low rate of implementation of payment appropriations for operational activities is due essentially to the fact that the national authorities did not invoice the Agency during the first year of the implementation of Commission Regulation (EC) No 488/2005. |
| --- | --- |

7.

The utilisation of commitment appropriations was less than forecast due to recruitment difficulties. The low rate of implementation of payment appropriations for operational activities is due essentially to the fact that the national authorities did not invoice the Agency during the first year of the implementation of Commission Regulation (EC) No 488/2005.

| 8. | The sum of EUR 1,2 million had been erroneously entered under normal appropriations and had to be transferred under assigned revenue appropriations. The Agency will ensure that the Management Board is informed of any future changes made to the budget. |
| --- | --- |

8.

The sum of EUR 1,2 million had been erroneously entered under normal appropriations and had to be transferred under assigned revenue appropriations. The Agency will ensure that the Management Board is informed of any future changes made to the budget.

| 9. | In 2006 the Agency introduced an integrated management project for certification activities, including a detailed monitoring of the Agency's activities as well as the adaptation of the financial system to allow the drawing up of analytical accounts. This project is expected to be operational as of 2008. In the meantime, the Agency is endeavouring to establish a closer link between its budget and its operational objectives and, in this connection, the 2007 budget will be presented by activities. |
| --- | --- |

9.

In 2006 the Agency introduced an integrated management project for certification activities, including a detailed monitoring of the Agency's activities as well as the adaptation of the financial system to allow the drawing up of analytical accounts. This project is expected to be operational as of 2008. In the meantime, the Agency is endeavouring to establish a closer link between its budget and its operational objectives and, in this connection, the 2007 budget will be presented by activities.

| 10. | On 2 June 2006, the Management Board adopted internal-control standards based on the standards applied by the Commission and on the ISO 9000 standards. A quality assurance programme aimed at implementing these standards was launched in March 2006. The description of systems and procedures and the risk analysis will be developed in this context. The anomaly raised by the Court concerning the separation of functions has been corrected. The implementation in 2006 of computer links between the operational and financial systems should improve the quality assurance of the financial information submitted by the authorising officers to the accounting officer. The current recasting of Commission Regulation (EC) No 488/2005 on fees and charges will enable the Agency to cover the costs of certification activities. |
| --- | --- |

10.

On 2 June 2006, the Management Board adopted internal-control standards based on the standards applied by the Commission and on the ISO 9000 standards. A quality assurance programme aimed at implementing these standards was launched in March 2006. The description of systems and procedures and the risk analysis will be developed in this context. The anomaly raised by the Court concerning the separation of functions has been corrected. The implementation in 2006 of computer links between the operational and financial systems should improve the quality assurance of the financial information submitted by the authorising officers to the accounting officer. The current recasting of Commission Regulation (EC) No 488/2005 on fees and charges will enable the Agency to cover the costs of certification activities.

| 11. | Over the first months following its transfer to Cologne in November 2004, the Agency was unable to apply the normal purchasing procedures for goods and services due to the time limits and a human resources deficit. Since it has been in a position to set up a specialised purchasing unit, the regulatory processes have been applied. |
| --- | --- |

11.

Over the first months following its transfer to Cologne in November 2004, the Agency was unable to apply the normal purchasing procedures for goods and services due to the time limits and a human resources deficit. Since it has been in a position to set up a specialised purchasing unit, the regulatory processes have been applied.

---

| 19.12.2006 | EN | Official Journal of the European Union | C 312/12 |
| --- | --- | --- | --- |

19.12.2006

EN

Official Journal of the European Union

C 312/12

---

REPORT

on the annual accounts of the European Medicines Agency for the financial year 2005 together with the Agency's replies

(2006/C 312/03)

CONTENTS

| 1-2 | INTRODUCTION |
| --- | --- |

1-2

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

3-6

| 7-11 | OBSERVATIONS |
| --- | --- |

7-11

Tables 1 to 4

The Agency's replies

INTRODUCTION

| 1. | The European Medicines Agency (hereinafter the Agency) was created by Council Regulation (EEC) No 2309/93 of 22 July 1993, which was replaced by Regulation (EC) No 726/2004 of the European Parliament and of the Council of 31 March 2004 (1). The Agency operates through a network and coordinates the scientific resources made available by the national authorities in order to ensure the evaluation and supervision of medicinal products for human or veterinary use. |
| --- | --- |

1.

The European Medicines Agency (hereinafter the Agency) was created by Council Regulation (EEC) No 2309/93 of 22 July 1993, which was replaced by Regulation (EC) No 726/2004 of the European Parliament and of the Council of 31 March 2004 (1). The Agency operates through a network and coordinates the scientific resources made available by the national authorities in order to ensure the evaluation and supervision of medicinal products for human or veterinary use.

| 2. | Table 1 summarises the Agency's competences and activities. Key information from the financial statements drawn up by the Agency for the financial year 2005 is presented in Tables 2, 3 and 4. |
| --- | --- |

2.

Table 1 summarises the Agency's competences and activities. Key information from the financial statements drawn up by the Agency for the financial year 2005 is presented in Tables 2, 3 and 4.

STATEMENT OF ASSURANCE

| 3. | This Statement 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. |
| --- | --- |

3.

This Statement 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.

| 4. | The Agency's accounts for the financial year ended 31 December 2005 (3) were drawn up by its Executive Director, pursuant to Article 68 of Regulation (EC) No 726/2004, 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. |
| --- | --- |

4.

The Agency's accounts for the financial year ended 31 December 2005 (3) were drawn up by its Executive Director, pursuant to Article 68 of Regulation (EC) No 726/2004, 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.

| 5. | The Court conducted an audit in accordance with its policies and standards, which are based on international auditing standards that have been adapted to the Community context. The audit was planned and performed to obtain reasonable assurance that the accounts are reliable and the underlying transactions are legal and regular. |
| --- | --- |

5.

The Court conducted an audit in accordance with its policies and standards, which are based on international auditing standards that have been adapted to the Community context. The audit was planned and performed to obtain reasonable assurance that the accounts are reliable and the underlying transactions are legal and regular.

| 6. | The Court has thus obtained a reasonable basis for the Statement below. |
| --- | --- |

6.

The Court has thus obtained a reasonable basis for the Statement below.

Reliability of the accountsThe Agency's accounts for the financial year ended 31 December 2005 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. | As regards the implementation of the budget, the utilisation rates for commitment appropriations (94 %) and payment appropriations (82 %) were on the whole high. For administrative expenditure (Title II), however, the utilisation rate for commitment appropriations was less than 90 %, and more than 40 % of the commitments made were carried over to the following financial year. |
| --- | --- |

7.

As regards the implementation of the budget, the utilisation rates for commitment appropriations (94 %) and payment appropriations (82 %) were on the whole high. For administrative expenditure (Title II), however, the utilisation rate for commitment appropriations was less than 90 %, and more than 40 % of the commitments made were carried over to the following financial year.

| 8. | The access rights to the computer system did not always correspond to the delegations in force. In 2005, a member of staff, who had had no delegation since 2004, still had the corresponding access rights to the computer system. |
| --- | --- |

8.

The access rights to the computer system did not always correspond to the delegations in force. In 2005, a member of staff, who had had no delegation since 2004, still had the corresponding access rights to the computer system.

| 9. | From the end of 2004, the Agency has managed funds (4) collected from other Agencies and bodies to finance a common support service to develop their financial management information systems. Up to 2005, these funds were not presented in the Agency's annual accounts, as was the case with other Agencies which managed the funds in earlier years following a rotational system. |
| --- | --- |

9.

From the end of 2004, the Agency has managed funds (4) collected from other Agencies and bodies to finance a common support service to develop their financial management information systems. Up to 2005, these funds were not presented in the Agency's annual accounts, as was the case with other Agencies which managed the funds in earlier years following a rotational system.

| 10. | Anomalies were found in the course of checks on the award of contracts, especially as regards IT contracts. There were no formal decisions concerning the appointment of evaluation committees. The rules governing the hierarchical independence of committee members were not observed. Evaluation committee meetings were held in the absence of some of the members, without any formal justification for their absence. |
| --- | --- |

10.

Anomalies were found in the course of checks on the award of contracts, especially as regards IT contracts. There were no formal decisions concerning the appointment of evaluation committees. The rules governing the hierarchical independence of committee members were not observed. Evaluation committee meetings were held in the absence of some of the members, without any formal justification for their absence.

| 11. | The Court again notes that the contracts concluded with the banks have been in force for over six years even though the detailed rules for the implementation of the Agency's financial regulation lay down that there should be a new call for tenders at least once every five years. |
| --- | --- |

11.

The Court again notes that the contracts concluded with the banks have been in force for over six years even though the detailed rules for the implementation of the Agency's financial regulation lay down that there should be a new call for tenders at least once every five years.

This report was adopted by the Court of Auditors in Luxembourg at its meeting of 28 September 2006.

For the Court of Auditors

Hubert WEBER

President

---

(1)  OJ L 214, 24.8.1993, p. 18 and OJ L 136, 30.4.2004, p. 1. Pursuant to the latter Regulation the Agency's original name, the European Agency for the Evaluation of Medicinal Products, was changed to European Medicines Agency.

1

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

2

(3)  These accounts were drawn up on 27 June 2006 and received by the Court on 27 July 2006.

3

(4)  Approximately 400 000 euro.

4

---

Table 1

European Medicines Agency (London)

| Areas of Community competence deriving from the Treaty | Competences of the Agency
  Regulation (EC) No 726/2004 of the European Parliament and of the Council of 31 March 2004 | Governance | Resources made available to the Agency in 2005 (2004) | Products and Services in 2005 (2004) |
| --- | --- | --- | --- | --- |
| A high level of human health protection shall be ensured in the definition and implementation of all Community policies and activities.
  Community action, which shall complement national policies, shall be directed towards improving public health, preventing human illness and diseases and obviating sources of danger to human health. (...)

  (Article 152 of the Treaty) | Objectives:







  — | to coordinate the scientific resources that the Member States' authorities make available to the Agency for the authorisation and supervision of medicinal products for human and veterinary use, |

Areas of Community competence deriving from the Treaty

Competences of the Agency

Regulation (EC) No 726/2004 of the European Parliament and of the Council of 31 March 2004

Governance

Resources made available to the Agency in 2005 (2004)

Products and Services in 2005 (2004)

A high level of human health protection shall be ensured in the definition and implementation of all Community policies and activities.

Community action, which shall complement national policies, shall be directed towards improving public health, preventing human illness and diseases and obviating sources of danger to human health. (...)

(Article 152 of the Treaty)

Objectives:

—

to coordinate the scientific resources that the Member States' authorities make available to the Agency for the authorisation and supervision of medicinal products for human and veterinary use,

| — | to provide the Member States and the institutions of the European Union with scientific advice on medicinal products for human or veterinary use. |
| --- | --- |

—

to provide the Member States and the institutions of the European Union with scientific advice on medicinal products for human or veterinary use.

Tasks:

| — | to coordinate the scientific evaluation of medicinal products which are subject to Community marketing authorisation procedures, |
| --- | --- |

—

to coordinate the scientific evaluation of medicinal products which are subject to Community marketing authorisation procedures,

| — | to coordinate the supervision of medicinal products which have been authorised within the Community; (pharmacovigilance), |
| --- | --- |

—

to coordinate the supervision of medicinal products which have been authorised within the Community; (pharmacovigilance),

| — | to advise on the maximum limits for residues of veterinary medicinal products which may be accepted in foodstuffs of animal origin, |
| --- | --- |

—

to advise on the maximum limits for residues of veterinary medicinal products which may be accepted in foodstuffs of animal origin,

| — | to coordinate verification of compliance with the principles of good manufacturing practice, good laboratory practice and good clinical practice, |
| --- | --- |

—

to coordinate verification of compliance with the principles of good manufacturing practice, good laboratory practice and good clinical practice,

| — | to record the status of marketing authorisations granted for medicinal products. |
| --- | --- |

—

to record the status of marketing authorisations granted for medicinal products.

1. The Committee for Medicinal Products for Human Use, consisting of one member and one alternate from each Member State, advises on any question relating to the evaluation of medicinal products for human use.

2. The Committee for Medicinal Products for Veterinary Use, consisting of one member and one alternate from each Member State, advises on any question relating to the evaluation of veterinary medicinal products.

3. The Committee for Orphan Medicinal Products, consisting of one member and one alternate from each Member State, advises on any question relating to the evaluation of orphan medicinal products.

4. The Committee on Herbal Medicinal Products, consisting of one member and one alternate from each Member State, advises on any question relating to the evaluation of herbal medicinal products.

5. The Management Board consisting of one member and one alternate from each Member State, two representatives of the Commission, two representatives appointed by the European Parliament, two representatives from patients organisations, one representative from doctors organisations and one representative from veterinarians organisations. The Board adopts the work programme and the annual report.

6. The Executive Director is appointed by the Management Board on a proposal from the Commission.

7. External audit: European Court of Auditors and Internal Audit Service.

8. Discharge authority: Parliament on a recommendation from the Council.

Final budget for 2005:

111,8 million euro (99,4 million euro)

Community contribution (excluding subsidy for orphan medicines): 22,7 % (24,7 %)

Staff numbers at 31 December 2005:

379 (314) posts provided for in the establishment plan

Posts occupied: 337,5 (290)

+34 (50) other posts (auxiliary contracts, seconded national experts, local staff, employment agency staff)

Total staff: 371,5 (340)

Assigned to the following duties:

| | Operational: 302,5 (271) |
| --- | --- |

Operational: 302,5 (271)

| | Administrative: 69 (69) |
| --- | --- |

Administrative: 69 (69)

Medicinal Products for Human Use

| — | Applications for marketing authorisations: 43 (51) |
| --- | --- |

—

Applications for marketing authorisations: 43 (51)

| — | Favourable opinions: 24 (34) |
| --- | --- |

—

Favourable opinions: 24 (34)

| — | Average evaluation time: 203 days (187 days) |
| --- | --- |

—

Average evaluation time: 203 days (187 days)

| — | Opinions after authorisation: 1 148 (926) |
| --- | --- |

—

Opinions after authorisation: 1 148 (926)

| — | Pharmacovigilance: 91 565 reports (64 186 reports) |
| --- | --- |

—

Pharmacovigilance: 91 565 reports (64 186 reports)

| — | Periodic reliability reports: 279 (253) |
| --- | --- |

—

Periodic reliability reports: 279 (253)

| — | Scientific opinions: 135 (77) |
| --- | --- |

—

Scientific opinions: 135 (77)

| — | Procedures for mutual recognition: 8 451 (7 081) |
| --- | --- |

—

Procedures for mutual recognition: 8 451 (7 081)

Medicinal Products for Veterinary Use

| — | New applications: 11 (8) |
| --- | --- |

—

New applications: 11 (8)

| — | Applications in respect of variants: 70 (40) |
| --- | --- |

—

Applications in respect of variants: 70 (40)

| — | Inspections: 114 (93) |
| --- | --- |

—

Inspections: 114 (93)

Orphan Medicinal Products

| — | Applications: 118 (108) |
| --- | --- |

—

Applications: 118 (108)

| — | Favourable opinions: 88 (75) |
| --- | --- |

—

Favourable opinions: 88 (75)

Source: Information supplied by the Agency.

EUROPEAN MEDICINES AGENCY

Source: Agency data — These tables summarise the data supplied by the Agency in its annual accounts.

Table 2

Implementation of the budget for the financial year 2005

| (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 | Appropriations carried over from the previous financial year | Appropriations for the financial year plus appropriations carried over from the previous financial year |
| entered | committed | paid | carried over | cancelled | available | paid | cancelled | available | committed | paid | carried over | cancelled |
| Community subsidies (1) | 31 180 | 33 734 | Title I
  Staff | 41 356 | 39 307 | 38 608 | 700 | 2 048 | 642 | 536 | 106 | 41 998 | 39 949 | 39 144 | 700 | 2 154 |
| Own revenue | 77 455 | 71 895 | Title II
  Administration | 27 105 | 24 047 | 15 974 | 10 041 | 1 090 | 10 935 | 10 590 | 345 | 38 040 | 34 982 | 26 564 | 10 041 | 1 435 |
| Other revenue | 3 200 | 3 767 | Title III
  Operating activities | 43 374 | 42 000 | 33 907 | 8 092 | 1 375 | 11 174 | 10 523 | 651 | 54 548 | 53 174 | 44 430 | 8 092 | 2 026 |
| Total | 111 835 | 109 396 | Total | 111 835 | 105 354 | 88 489 | 18 833 | 4 513 | 22 751 | 21 649 | 1 102 | 134 586 | 128 105 | 110 138 | 18 833 | 5 615 |

(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

Appropriations carried over from the previous financial year

Appropriations for the financial year plus appropriations carried over from the previous financial year

entered

committed

paid

carried over

cancelled

available

paid

cancelled

available

committed

paid

carried over

cancelled

Community subsidies (1)

31 180

33 734

Title I

Staff

41 356

39 307

38 608

700

2 048

642

536

106

41 998

39 949

39 144

700

2 154

Own revenue

77 455

71 895

Title II

Administration

27 105

24 047

15 974

10 041

1 090

10 935

10 590

345

38 040

34 982

26 564

10 041

1 435

Other revenue

3 200

3 767

Title III

Operating activities

43 374

42 000

33 907

8 092

1 375

11 174

10 523

651

54 548

53 174

44 430

8 092

2 026

Total

111 835

109 396

Total

111 835

105 354

88 489

18 833

4 513

22 751

21 649

1 102

134 586

128 105

110 138

18 833

5 615

Table 3

Revenue and expenditure account for the financial years 2005 and 2004

| (1000 euro) |
| --- |
| | 2005 | 2004 |
| Operating revenue |
| Community subsidies | 28 957 | 24 556 |
| Revenue | 77 679 | 71 857 |
| Total (a) | 106 636 | 96 413 |
| Operating expenditure |
| Staff | 40 057 | 34 333 |
| Administration | 22 459 | 15 154 |
| Operating activities | 41 999 | 38 573 |
| Total (b) | 104 515 | 88 060 |
| Operating result (c = a — b) | 2 121 | 8 353 |
| Other income (d) | 2 257 | 1 160 |
| Other charges (e) | 0 | 0 |
| Economic result (f = c + d — e) | 4 378 | 9 513 |

(1000 euro)

2005

2004

Operating revenue

Community subsidies

28 957

24 556

Revenue

77 679

71 857

Total (a)

106 636

96 413

Operating expenditure

Staff

40 057

34 333

Administration

22 459

15 154

Operating activities

41 999

38 573

Total (b)

104 515

88 060

Operating result (c = a — b)

2 121

8 353

Other income (d)

2 257

1 160

Other charges (e)

0

0

Economic result (f = c + d — e)

4 378

9 513

Table 4

Balance sheet at 31 December 2005 and 2004

| (1000 euro) |
| --- |
| | 2005 | 2004 |
| Assets |
| Fixed assets | 17 437 | 12 115 |
| Receivables | 5 490 | 5 892 |
| Cash accounts | 29 934 | 35 010 |
| Total | 52 861 | 53 017 |
| Liabilities |
| Results accumulated from previous financial years | 23 280 | 13 767 |
| Economic result for the year | 4 378 | 9 513 |
| Current liabilities | 25 203 | 29 737 |
| Total | 52 861 | 53 017 |

(1000 euro)

2005

2004

Assets

Fixed assets

17 437

12 115

Receivables

5 490

5 892

Cash accounts

29 934

35 010

Total

52 861

53 017

Liabilities

Results accumulated from previous financial years

23 280

13 767

Economic result for the year

4 378

9 513

Current liabilities

25 203

29 737

Total

52 861

53 017

---

(1)  Including subsidies received from the European Economic Area.

---

THE AGENCY'S REPLIES

| 7. | The high carry-over 2004-2005 on Title 2 is mainly due to the Telematics expenditure programme, which accounts for 80 % of the carry-overs. The Telematics carry-overs were high because this programme comprises a number of large and complex multi-annual projects covering the whole EU that stretched from 2004 through into 2005. |
| --- | --- |

7.

The high carry-over 2004-2005 on Title 2 is mainly due to the Telematics expenditure programme, which accounts for 80 % of the carry-overs. The Telematics carry-overs were high because this programme comprises a number of large and complex multi-annual projects covering the whole EU that stretched from 2004 through into 2005.

| 8. | Security access has been rectified and all delegated authorising officers were instructed that they must take care to sign the right transaction (in SI2) based on the delegation decision and that they must act with due diligence in this regard. |
| --- | --- |

8.

Security access has been rectified and all delegated authorising officers were instructed that they must take care to sign the right transaction (in SI2) based on the delegation decision and that they must act with due diligence in this regard.

| 9. | The CSS expenditure for 2006 will be included in the EMEA budget with the first Amending Budget and the costs will be charged to the members. Disclosure of the CSS activities in 2005 has been made in note 4 of the EMEA 2005 Accounts. |
| --- | --- |

9.

The CSS expenditure for 2006 will be included in the EMEA budget with the first Amending Budget and the costs will be charged to the members. Disclosure of the CSS activities in 2005 has been made in note 4 of the EMEA 2005 Accounts.

| 10. | The composition of evaluation committees, often made up of more than three persons, is based on the principle that bids should be evaluated by persons both independent and with appropriate expertise. In any case, a minimum of three persons participate to the meetings and the minutes for each meeting are distributed for discussion and approval. In the future, the Agency will request that minutes include a justification in case of absence of a member. |
| --- | --- |

10.

The composition of evaluation committees, often made up of more than three persons, is based on the principle that bids should be evaluated by persons both independent and with appropriate expertise. In any case, a minimum of three persons participate to the meetings and the minutes for each meeting are distributed for discussion and approval. In the future, the Agency will request that minutes include a justification in case of absence of a member.

| 11. | In 2006, the Agency has launched a tender for banking services. The delay mentioned by the Court is due to the fact that over the last years, the financial system of the Agency has been overhauled and it would have been too disruptive to implement a change of bank. |
| --- | --- |

11.

In 2006, the Agency has launched a tender for banking services. The delay mentioned by the Court is due to the fact that over the last years, the financial system of the Agency has been overhauled and it would have been too disruptive to implement a change of bank.

---

| 19.12.2006 | EN | Official Journal of the European Union | C 312/18 |
| --- | --- | --- | --- |

19.12.2006

EN

Official Journal of the European Union

C 312/18

---

REPORT

on the annual accounts of the European Agency for Reconstruction for the financial year 2005 together with the Agency's replies

(2006/C 312/04)

CONTENTS

| 1-2 | INTRODUCTION |
| --- | --- |

1-2

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

3-6

| 7-11 | OBSERVATIONS |
| --- | --- |

7-11

Tables 1 to 4

The Agency's replies

INTRODUCTION

| 1. | The European Agency for Reconstruction (hereinafter the Agency) was established by Council Regulation (EC) No 1628/96 (1), as amended by Council Regulation (EC) No 2068/2004 (2). When it was set up in 2000, the Agency was responsible for managing the EU's aid programmes in Kosovo. Its mandate was later extended to Serbia and Montenegro and the former Yugoslav Republic of Macedonia. The Agency's head office is in Thessalonica and it has operational centres in Belgrade, Podgorica, Pristina and Skopje. It implements programmes to foster institution-building and good governance, to promote the development of a market economy and essential infrastructure and to consolidate civil society. Its mandate is scheduled to end on 31 December 2006 (3). |
| --- | --- |

1.

The European Agency for Reconstruction (hereinafter the Agency) was established by Council Regulation (EC) No 1628/96 (1), as amended by Council Regulation (EC) No 2068/2004 (2). When it was set up in 2000, the Agency was responsible for managing the EU's aid programmes in Kosovo. Its mandate was later extended to Serbia and Montenegro and the former Yugoslav Republic of Macedonia. The Agency's head office is in Thessalonica and it has operational centres in Belgrade, Podgorica, Pristina and Skopje. It implements programmes to foster institution-building and good governance, to promote the development of a market economy and essential infrastructure and to consolidate civil society. Its mandate is scheduled to end on 31 December 2006 (3).

| 2. | Table 1 summarises the Agency's competences and activities. Key information from the financial statements drawn up by the Agency for the financial year 2005 is presented in Tables 2, 3 and 4. |
| --- | --- |

2.

Table 1 summarises the Agency's competences and activities. Key information from the financial statements drawn up by the Agency for the financial year 2005 is presented in 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 (4). It was drawn up following an examination of the Agency's accounts, as required by Article 248 of the Treaty establishing the European Community. |
| --- | --- |

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 (4). It was drawn up following an examination of the Agency's accounts, as required by Article 248 of the Treaty establishing the European Community.

| 4. | The Agency's accounts for the financial year ended 31 December 2005 (5) were drawn up by its Director, pursuant to Article 8(2) of Council Regulation (EC) No 2667/2000 (6), and sent to the Court, which is required to give its opinion on their reliability and on the legality and regularity of the underlying transactions. |
| --- | --- |

4.

The Agency's accounts for the financial year ended 31 December 2005 (5) were drawn up by its Director, pursuant to Article 8(2) of Council Regulation (EC) No 2667/2000 (6), and sent to the Court, which is required to give its opinion on their reliability and on the legality and regularity of the underlying transactions.

| 5. | The Court conducted an audit in accordance with its policies and standards, which are based on international auditing standards that have been adapted to the Community context. The audit was planned and performed to obtain reasonable assurance that the accounts are reliable and the underlying transactions are legal and regular. |
| --- | --- |

5.

The Court conducted an audit in accordance with its policies and standards, which are based on international auditing standards that have been adapted to the Community context. The audit was planned and performed to obtain reasonable assurance that the accounts are reliable and the underlying transactions are legal and regular.

| 6. | The Court has thus obtained a reasonable basis for the Statement below. |
| --- | --- |

6.

The Court has thus obtained a reasonable basis for the Statement below.

Reliability of the accountsThe Agency's accounts for the financial year ended 31 December 2005 are, in all material respects, reliable.Legality and regularity of underlying transactionsExcept for the cases referred to in paragraph 9, the transactions underlying the Agency's annual accounts, taken as a whole, are legal and regular.

OBSERVATIONS

| 7. | The role and tasks of the internal auditor are not sufficiently defined and do not always correspond to the duties assigned to this post (7). The internal audit work carried out in 2005 is not formally reported to management. |
| --- | --- |

7.

The role and tasks of the internal auditor are not sufficiently defined and do not always correspond to the duties assigned to this post (7). The internal audit work carried out in 2005 is not formally reported to management.

| 8. | Following the Court’s observations raised in the 2003 and 2004 annual reports, the Agency took measures to improve the way contracts are awarded. This resulted in increased transparency in various areas; for instance, important decisions made during the evaluation process which affect the contract award are better documented. This in turn has improved the overall discipline over the evaluation and contract award procedures. |
| --- | --- |

8.

Following the Court’s observations raised in the 2003 and 2004 annual reports, the Agency took measures to improve the way contracts are awarded. This resulted in increased transparency in various areas; for instance, important decisions made during the evaluation process which affect the contract award are better documented. This in turn has improved the overall discipline over the evaluation and contract award procedures.

| 9. | Notwithstanding the above, the Court noted several cases where anomalies were due to the fact that the selection criteria chosen are unrealistic as they are ill-suited to the circumstances in which the Agency is operating. |
| --- | --- |

9.

Notwithstanding the above, the Court noted several cases where anomalies were due to the fact that the selection criteria chosen are unrealistic as they are ill-suited to the circumstances in which the Agency is operating.

| 10. | The Court welcomes the progress made in the area of tendering and encourages the Agency to further intensify its efforts in order to ensure that the contracts awarded fully comply with all regulatory provisions. |
| --- | --- |

10.

The Court welcomes the progress made in the area of tendering and encourages the Agency to further intensify its efforts in order to ensure that the contracts awarded fully comply with all regulatory provisions.

| 11. | In its 2004 report the Court noted, in a review of operations entrusted to the United Nations Mission in Kosovo (UNMIK), an absence of adequate financial control by the Agency in making payments and serious difficulties in closing operations, mainly due to an absence of adequate accounts for the projects and of sufficient justification for the expenditure. Although the Agency made significant efforts in 2005 to resolve the situation, the problems for closing operations remained. The audits carried out by private audit firms on behalf of the Agency on a number of projects confirmed that funds had to be recovered from beneficiaries, an issue the Agency has not yet addressed. These problems could be resolved if the Agency ensured that the terms of the agreement applicable to the management of these funds were complied with (8). |
| --- | --- |

11.

In its 2004 report the Court noted, in a review of operations entrusted to the United Nations Mission in Kosovo (UNMIK), an absence of adequate financial control by the Agency in making payments and serious difficulties in closing operations, mainly due to an absence of adequate accounts for the projects and of sufficient justification for the expenditure. Although the Agency made significant efforts in 2005 to resolve the situation, the problems for closing operations remained. The audits carried out by private audit firms on behalf of the Agency on a number of projects confirmed that funds had to be recovered from beneficiaries, an issue the Agency has not yet addressed. These problems could be resolved if the Agency ensured that the terms of the agreement applicable to the management of these funds were complied with (8).

This report was adopted by the Court of Auditors in Luxembourg at its meeting of 28 September 2006.

For the Court of Auditors

Hubert WEBER

President

---

(1)  OJ L 204, 14.8.1996, p. 1.

1

(2)  OJ L 358, 3.12.2004, p. 2.

2

(3)  Article 1(4) of Regulation (EC) No 2068/2004.

3

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

4

(5)  These accounts were drawn up on 11 July 2006 and received by the Court on 21 July 2006.

5

(6)  OJ L 306, 7.12.2000, p. 7.

6

(7)  He also advises the management.

7

(8)  Financial and Administrative Framework Agreement (29 April 2003).

8

---

Table 1

European Agency for Reconstruction (Thessalonica)

| Areas of Community competence deriving from the Treaty | Competences of the Agency as defined in Council Regulation (EC) No 2667/2000 of 5 December 2000 | Governance | Resources available to the Agency in 2005

  (2004) | Activities and services provided in 2005 |
| --- | --- | --- | --- | --- |
| The Community shall carry out, within its spheres of competence, economic, financial and technical cooperation measures with third countries. Such measures shall be complementary to those carried out by the Member States and consistent with the development policy of the Community.

  (Article 181a) | Objectives:

  To provide EU assistance:






  (i) | for reconstruction and the return of refugees and displaced persons; |

Areas of Community competence deriving from the Treaty

Competences of the Agency as defined in Council Regulation (EC) No 2667/2000 of 5 December 2000

Governance

Resources available to the Agency in 2005

(2004)

Activities and services provided in 2005

The Community shall carry out, within its spheres of competence, economic, financial and technical cooperation measures with third countries. Such measures shall be complementary to those carried out by the Member States and consistent with the development policy of the Community.

(Article 181a)

Objectives:

To provide EU assistance:

(i)

for reconstruction and the return of refugees and displaced persons;

| (ii) | to promote sound administration, stronger institutions and the rule of law; |
| --- | --- |

(ii)

to promote sound administration, stronger institutions and the rule of law;

| (iii) | to support the development of a market economy and investment in essential physical infrastructure and environmental measures; |
| --- | --- |

(iii)

to support the development of a market economy and investment in essential physical infrastructure and environmental measures;

| (iv) | to support social development and consolidate civil society. |
| --- | --- |

(iv)

to support social development and consolidate civil society.

Application:

The agency manages the principal aid programmes in Serbia and Montenegro (Republic of Serbia, Kosovo and Republic of Montenegro) and in the Former Yugoslav Republic of Macedonia (FYROM). Beneficiaries may include States, bodies under UN administration, federated regional and local bodies, public and semi -public bodies, both sides of industry, business support organisations, cooperatives, mutual companies, charities, foundations and NGOs.

Tasks:

| — | to advise the Commission of priority needs, |
| --- | --- |

—

to advise the Commission of priority needs,

| — | to devise programmes for reconstruction and the return of refugees and displaced persons, |
| --- | --- |

—

to devise programmes for reconstruction and the return of refugees and displaced persons,

| — | to take every possible step to implement EU assistance. |
| --- | --- |

—

to take every possible step to implement EU assistance.

1. Governing Board

Comprises one representative from each Member State, two representatives from the Commission and an observer from the European Investment Bank.

2. Director

Appointed by the Governing Board on a proposal from the Commission.

Operational Centres in Belgrade, Pristina, Podgorica and Skopje with a high level of management autonomy.

3. External control

Court of Auditors.

4. Discharge Authority

The Parliament following a recommendation from the Council.

Final Budget:

307,5 million euro (374,6 million euro)

Staff at 31 December 2005:

114 (114) TA posts listed in the establishment plan

TA posts occupied: 88 (88)

Other posts:

Local staff: 170 (195) posts of which 162 (173) were occupied.

Contract staff: 28 (0) posts of which 26 (0) were occupied.

Total staff: 276 (261)

Responsible for

Operational tasks: 169 (184)

Administrative tasks: 107* (77)

* includes all staff in Administration, Finance, and IT.

By operational centre (main developments):

KOSOVO: a) Start-up grants, loans, training and business advice for small businesses; b) Assistance for vulnerable persons, including minorities and returnees; c) Management of loans provided earlier from EAR credit schemes; d) Rehabilitation of the heating sub-station in Mitrovica; e) Another six bridges reopened between Pristina and the border crossing with FYROM; f) Support in the areas of JHA and public administration reform.

SERBIA: a) Draft laws in public administration reform; b) Supply of equipment to border police; c) Rehabilitation and supply of equipment to courts; d) Rehabilitation programme for hospitals; e) New jobs created due to loans from the Revolving Credit Fund; f) Training support for enterprises; g) Regional training centres for adults; h) Conclusion of rehabilitation of Sloboda bridge (Danube, Novi Sad) and of the Horgos border crossing point with Hungary; i) Renovation of municipal infrastructures; j) Reform of the statistics office; k) Support for foreign direct investment management; l) Support for active labour measures to secure employment and reduce unemployment; m) Support for European integration activities; n) Support for vulnerable groups such as refugees and internally-displaced persons.

MONTENEGRO: a) Completion of waste management master plan; b) Border crossing with Croatia completed within the framework of assistance with integrated border management; c) Central IT database of the Ministry of the Interior; d) Agency for Human Resources Management, regional centres for vocational education and training; e) New Roads Directorate and transport laws; f) Electric utility unbundling/restructuring, energy efficiency strategy.

FYROM: a) Assistance with the strengthening and creation of new public administration institutions (internal audit function, Data Protection Agency); b) Police reform; c) Strengthening of veterinary and phytosanitary services; d) Assistance with decentralisation of competences to municipalities; e) Upgrade of municipal infrastructure; f) Training of civil servants, mainly ethnic Albanians, to become public servants; g) New jobs created and jobs preserved due to loans to SMEs from the Revolving Credit Fund.

Source: Information submitted by the Agency.

EUROPEAN AGENCY FOR RECONSTRUCTION

Source: Agency data — These tables summarise the data provided by the Agency in its annual accounts.

Table 2

Implementation of the budget for the financial year 2005

| (1000 euro) |
| --- |
| Revenue | Expenditure |
| Source of revenue | Revenue entered in the final budget for the financial year | Revenue collected | Allocation of expenditure | Available appropriations | Appropriations carried over from the previous financial year |
| entered | committed | paid | carried over | cancelled | balance for commitment | commitments carried over | paid | cancelled | outstanding commitments |
| Community subsidies | 306 200 | 97 800 | Title I
  Staff | 18 481 | 17 155 | 16 660 | 495 | 1 360 | — | 317 | 283 | 34 | — |
| Other grants and counterpart funds | 0 | 1 637 | Title II
  Administration | 6 831 | 5 299 | 4 799 | 500 | 1 532 | — | 1 073 | 1 011 | 62 | — |
| Remaining funds | 1 312 | 1 312 | Title III
  Operating activities | 282 200 | 78 551 | 18 879 | 59 672 | 0 | 203 649 | 345 342 | 186 474 | 13 307 | 145 561 |
| Miscellaneous revenue (re-use) | p.m. | 617 | Sub-total | 307 512 | 101 005 | 40 338 | 60 667 | 2 892 | 203 649 | 346 732 | 187 768 | 13 403 | 145 561 |
| | | | Appropriations carried over from 2004 | 309 139 | 143 049 | 34 040 | 166 090 | 4 749 | 170 838 | 0 | 0 | 0 | 0 |
| Total | 307 512 | 101 366 | Total | 616 651 | 244 054 | 74 378 | 226 757 | 7 641 | 374 487 | 346 732 | 187 768 | 13 403 | 145 561 |

(1000 euro)

Revenue

Expenditure

Source of revenue

Revenue entered in the final budget for the financial year

Revenue collected

Allocation of expenditure

Available appropriations

Appropriations carried over from the previous financial year

entered

committed

paid

carried over

cancelled

balance for commitment

commitments carried over

paid

cancelled

outstanding commitments

Community subsidies

306 200

97 800

Title I

Staff

18 481

17 155

16 660

495

1 360

—

317

283

34

—

Other grants and counterpart funds

0

1 637

Title II

Administration

6 831

5 299

4 799

500

1 532

—

1 073

1 011

62

—

Remaining funds

1 312

1 312

Title III

Operating activities

282 200

78 551

18 879

59 672

0

203 649

345 342

186 474

13 307

145 561

Miscellaneous revenue (re-use)

p.m.

617

Sub-total

307 512

101 005

40 338

60 667

2 892

203 649

346 732

187 768

13 403

145 561

Appropriations carried over from 2004

309 139

143 049

34 040

166 090

4 749

170 838

0

0

0

0

Total

307 512

101 366

Total

616 651

244 054

74 378

226 757

7 641

374 487

346 732

187 768

13 403

145 561

Table 3

Revenue and expenditure account for the financial year 2005 (1)

| (1000 euro) |
| --- |
| | 2005 |
| Operating revenue |
| Community subsidies | 261 009 |
| Other subsidies/revenue | 1 832 |
| Total (a) | 262 841 |
| Operating expenditure |
| Staff | 15 727 |
| Administration | 7 212 |
| Operating activities | 243 442 |
| Total (b) | 266 381 |
| Economic result (c = a — b) | –3 540 |

(1000 euro)

2005

Operating revenue

Community subsidies

261 009

Other subsidies/revenue

1 832

Total (a)

262 841

Operating expenditure

Staff

15 727

Administration

7 212

Operating activities

243 442

Total (b)

266 381

Economic result (c = a — b)

–3 540

Table 4

Balance sheet at 31 December 2005 and 31 December 2004 (2)

| (1000 euro) |
| --- |
| | 2005 | 2004 |
| Assets |
| Fixed assets | 1 276 | 1 652 |
| Long-term assets | 40 002 | 61 619 |
| Receivables | 164 859 | 118 118 |
| Cash accounts | 57 917 | 223 860 |
| Total | 264 054 | 405 249 |
| Liabilities |
| Cumulative surplus/deficit | 166 840 | 166 840 |
| Economic result for the year | –3 540 | 0 |
| Commission advances | 74 169 | 205 933 |
| Current liabilities | 26 585 | 32 476 |
| Total | 260 054 | 405 249 |

(1000 euro)

2005

2004

Assets

Fixed assets

1 276

1 652

Long-term assets

40 002

61 619

Receivables

164 859

118 118

Cash accounts

57 917

223 860

Total

264 054

405 249

Liabilities

Cumulative surplus/deficit

166 840

166 840

Economic result for the year

–3 540

0

Commission advances

74 169

205 933

Current liabilities

26 585

32 476

Total

260 054

405 249

---

(1)  Data for the financial year 2004 are not shown as they are not comparable with data for 2005 because of the change in the accounting principles applied.

(2)  Data for the financial year 2004 have been restated to allow for comparison with those for 2005.

---

THE AGENCY'S REPLIES

| 7. | The Agency has been a pioneer in establishing an Internal Audit Capability, a function that does not yet exist in most of the Agencies. The role and responsibilities (as per Article 38.4 of the FR) follow the evolution of the Commission's approach to the subject. The new regulatory framework will lead to a further formalisation of this work. This function, however, contributed to the improvement of the internal controls in the Agency. |
| --- | --- |

7.

The Agency has been a pioneer in establishing an Internal Audit Capability, a function that does not yet exist in most of the Agencies. The role and responsibilities (as per Article 38.4 of the FR) follow the evolution of the Commission's approach to the subject. The new regulatory framework will lead to a further formalisation of this work. This function, however, contributed to the improvement of the internal controls in the Agency.

| 8. | The Agency appreciates the acknowledgements of the improvements. |
| --- | --- |

8.

The Agency appreciates the acknowledgements of the improvements.

| 9. | Further refinements of the selection criteria are being continuously implemented in order to have consistently realistic and verifiable criteria in tender documents. This also facilitates the preparation of compliant offers by tenderers. |
| --- | --- |

9.

Further refinements of the selection criteria are being continuously implemented in order to have consistently realistic and verifiable criteria in tender documents. This also facilitates the preparation of compliant offers by tenderers.

| 11. | To the extent that this was allowed by the applicable provisions of the Financial and Administrative Framework Agreement between the EC and the UN, and by the administrative situation on the ground, the Agency followed a stricter approach that often led to refusing or delaying payments in the absence of adequate justification or proof of expenditure. Audit reports are rendered obligatory, and the UNMIK or other UN instances concerned are firmly reminded that final payments on accomplished projects will only be made up to the amount certified by a valid external audit. For advanced funds which have not been used in accordance with the provisions of the relevant grant agreement, the recovery process has been launched. |
| --- | --- |

11.

To the extent that this was allowed by the applicable provisions of the Financial and Administrative Framework Agreement between the EC and the UN, and by the administrative situation on the ground, the Agency followed a stricter approach that often led to refusing or delaying payments in the absence of adequate justification or proof of expenditure. Audit reports are rendered obligatory, and the UNMIK or other UN instances concerned are firmly reminded that final payments on accomplished projects will only be made up to the amount certified by a valid external audit. For advanced funds which have not been used in accordance with the provisions of the relevant grant agreement, the recovery process has been launched.

---

| 19.12.2006 | EN | Official Journal of the European Union | C 312/24 |
| --- | --- | --- | --- |

19.12.2006

EN

Official Journal of the European Union

C 312/24

---

REPORT

on the annual accounts of the European Agency for Safety and Health at Work for the financial year 2005 together with the Agency's replies

(2006/C 312/05)

CONTENTS

| 1-2 | INTRODUCTION |
| --- | --- |

1-2

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

3-6

| 7-10 | OBSERVATIONS |
| --- | --- |

7-10

Tables 1 to 4

The Agency's replies

INTRODUCTION

| 1. | The European Agency for Safety and Health at Work (hereinafter referred to as the Agency) was established by Council Regulation (EC) No 2062/94 of 18 July 1994 (1). The Agency's task is to collect and disseminate information on national and Community priorities in the field of safety and health at work, to support national and Community organisations involved in the formulation and implementation of policy and to provide information on preventive measures. |
| --- | --- |

1.

The European Agency for Safety and Health at Work (hereinafter referred to as the Agency) was established by Council Regulation (EC) No 2062/94 of 18 July 1994 (1). The Agency's task is to collect and disseminate information on national and Community priorities in the field of safety and health at work, to support national and Community organisations involved in the formulation and implementation of policy and to provide information on preventive measures.

| 2. | Table 1 summarises the Agency's competences and activities. Key information from the financial statements drawn up by the Agency for the financial year 2005 is presented in Tables 2, 3 and 4. |
| --- | --- |

2.

Table 1 summarises the Agency's competences and activities. Key information from the financial statements drawn up by the Agency for the financial year 2005 is presented in Tables 2, 3 and 4.

STATEMENT OF ASSURANCE

| 3. | This Statement is addressed to the European Parliament and the Council in accordance with Article 185(2) of Council Regulation (EC, Euratom) No 1605/2002 of 25 June 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. |
| --- | --- |

3.

This Statement is addressed to the European Parliament and the Council in accordance with Article 185(2) of Council Regulation (EC, Euratom) No 1605/2002 of 25 June 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.

| 4. | The Agency's accounts for the financial year ended 31 December 2005 (3) were drawn up by its Director, pursuant to Article 14 of Regulation (EC) No 2062/94, 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. |
| --- | --- |

4.

The Agency's accounts for the financial year ended 31 December 2005 (3) were drawn up by its Director, pursuant to Article 14 of Regulation (EC) No 2062/94, 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.

| 5. | The Court conducted an audit in accordance with its policies and standards, which are based on international auditing standards that have been adapted to the Community context. The audit was planned and performed to obtain reasonable assurance that the accounts are reliable and the underlying transactions are legal and regular. |
| --- | --- |

5.

The Court conducted an audit in accordance with its policies and standards, which are based on international auditing standards that have been adapted to the Community context. The audit was planned and performed to obtain reasonable assurance that the accounts are reliable and the underlying transactions are legal and regular.

| 6. | The Court has thus obtained a reasonable basis for the statement expressed below. |
| --- | --- |

6.

The Court has thus obtained a reasonable basis for the statement expressed below.

Reliability of the accountsThe Agency's accounts for the financial year ended 31 December 2005 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 commitment rate for appropriations entered in the budget for the financial year 2005 was over 90 %. Nevertheless, the carry-over rate remained high for operating expenditure (Title III), at 30 %, whereas the cancellation rate for appropriations carried over was close to 15 %. Such a situation should prompt the Agency to improve its programming and adhere to it more strictly. The management of the budget shows a high number of transfers of appropriations between budget lines. The supporting documentation for these transfers is inadequate. Moreover, no control mechanism has been put in place to check that the rules and limits applicable to transfers are observed. |
| --- | --- |

7.

The commitment rate for appropriations entered in the budget for the financial year 2005 was over 90 %. Nevertheless, the carry-over rate remained high for operating expenditure (Title III), at 30 %, whereas the cancellation rate for appropriations carried over was close to 15 %. Such a situation should prompt the Agency to improve its programming and adhere to it more strictly. The management of the budget shows a high number of transfers of appropriations between budget lines. The supporting documentation for these transfers is inadequate. Moreover, no control mechanism has been put in place to check that the rules and limits applicable to transfers are observed.

| 8. | Implementation of the internal control system was not yet complete in 2005. The Governing Board has not adopted any internal control standards. The questionnaires used for ex ante verification of commitments and payments do not cover the operational aspects. There is no risk analysis and there are no checklists to meet the needs of authorising officers and staff who perform operational checks. |
| --- | --- |

8.

Implementation of the internal control system was not yet complete in 2005. The Governing Board has not adopted any internal control standards. The questionnaires used for ex ante verification of commitments and payments do not cover the operational aspects. There is no risk analysis and there are no checklists to meet the needs of authorising officers and staff who perform operational checks.

| 9. | The general implementing provisions concerning the recruitment of staff to the Agency do not specify the criteria and formalities to be observed at the various stages in the selection of candidates. A review of one recruitment procedure showed that the choices made had not been adequately documented (only a final summary report was drawn up and signed by the members of the selection board). Decisions taken in this area must be rigorously documented in order to ensure the transparency and impartiality of the decisions made. |
| --- | --- |

9.

The general implementing provisions concerning the recruitment of staff to the Agency do not specify the criteria and formalities to be observed at the various stages in the selection of candidates. A review of one recruitment procedure showed that the choices made had not been adequately documented (only a final summary report was drawn up and signed by the members of the selection board). Decisions taken in this area must be rigorously documented in order to ensure the transparency and impartiality of the decisions made.

| 10. | The Court's examination of public procurement procedures showed that often no supporting evidence was given for the tender evaluation committee's assessments of the quality of the bids. Furthermore, the evaluation reports are signed only by the authorising officer responsible and not by all the members of the tender evaluation committee. In order that the principle of transparency may be respected, decisions taken during a tendering procedure must be rigorously documented. |
| --- | --- |

10.

The Court's examination of public procurement procedures showed that often no supporting evidence was given for the tender evaluation committee's assessments of the quality of the bids. Furthermore, the evaluation reports are signed only by the authorising officer responsible and not by all the members of the tender evaluation committee. In order that the principle of transparency may be respected, decisions taken during a tendering procedure must be rigorously documented.

This report was adopted by the Court of Auditors in Luxembourg at its meeting of 28 September 2006.

For the Court of Auditors

Hubert WEBER

President

---

(1)  OJ L 216, 20.8.1994, p. 1. The Regulation was last amended by Council Regulation (EC) No 1112/2005 of 24 June 2005 (OJ L 184, 15.7.2005, p. 5).

1

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

2

(3)  These accounts were drawn up on 29 June 2006 and received by the Court on 4 July 2006.

3

---

Table 1

European Agency for Safety and Health at Work (Bilbao)

| Areas of Community competence deriving from the Treaty | Competences of the Agency as defined in the Council Regulation
  (Council Regulation (EC) No 2062/94 of 18 July 1994 as last amended by Council Regulation (EC) No 1112/2005 of 24 June 2005) | Governance | Resources made available to the Agency in 2005

  (2004) | Products and services supplied |
| --- | --- | --- | --- | --- |
| Social provisions

  The Community and the Member States (...) shall have as their objectives (...) improved living and working conditions, so as to make possible their harmonisation while the improvement is being maintained (...).
  With a view to achieving the objectives of Article 136, the Community shall support and complement the activities of the Member States in the following fields: (a) improvement in particular of the working environment to protect workers' health and safety; (b) working conditions; (...)

  (Extracts from Articles 136 and 137 of the Treaty) | Objectives:







  — | In order to improve the working environment, as regards the protection of the safety and health of workers as provided for in the Treaty and successive Community strategies and action programmes concerning health and safety at the workplace, the aim of the Agency shall be to provide the Community bodies, the Member States, the social partners and those involved in the field with the technical, scientific and economic information of use in the field of safety and health at work. |

Areas of Community competence deriving from the Treaty

Competences of the Agency as defined in the Council Regulation

(Council Regulation (EC) No 2062/94 of 18 July 1994 as last amended by Council Regulation (EC) No 1112/2005 of 24 June 2005)

Governance

Resources made available to the Agency in 2005

(2004)

Products and services supplied

Social provisions

The Community and the Member States (...) shall have as their objectives (...) improved living and working conditions, so as to make possible their harmonisation while the improvement is being maintained (...).

With a view to achieving the objectives of Article 136, the Community shall support and complement the activities of the Member States in the following fields: (a) improvement in particular of the working environment to protect workers' health and safety; (b) working conditions; (...)

(Extracts from Articles 136 and 137 of the Treaty)

Objectives:

—

In order to improve the working environment, as regards the protection of the safety and health of workers as provided for in the Treaty and successive Community strategies and action programmes concerning health and safety at the workplace, the aim of the Agency shall be to provide the Community bodies, the Member States, the social partners and those involved in the field with the technical, scientific and economic information of use in the field of safety and health at work.

Tasks:

| — | to collect, analyse and disseminate information on national and Community priorities and on research, |
| --- | --- |

—

to collect, analyse and disseminate information on national and Community priorities and on research,

| — | to promote cooperation and the exchange of information, including information on training programmes, |
| --- | --- |

—

to promote cooperation and the exchange of information, including information on training programmes,

| — | to supply the Community bodies and the Member States with information they require to formulate and implement policies, in particular as regards the impact on small and medium-sized enterprises, |
| --- | --- |

—

to supply the Community bodies and the Member States with information they require to formulate and implement policies, in particular as regards the impact on small and medium-sized enterprises,

| — | to make available information on preventive activities, |
| --- | --- |

—

to make available information on preventive activities,

| — | to contribute to the development of strategies and Community action programmes, |
| --- | --- |

—

to contribute to the development of strategies and Community action programmes,

| — | to set up a network comprising national focal points and topic centres. |
| --- | --- |

—

to set up a network comprising national focal points and topic centres.

1. Governing Board

Composition

| — | 1 representative of the Government of each Member State, |
| --- | --- |

—

1 representative of the Government of each Member State,

| — | 1 representative of the employers' organisations of each Member State, |
| --- | --- |

—

1 representative of the employers' organisations of each Member State,

| — | 1 representative of the employees' organisations of each Member State, |
| --- | --- |

—

1 representative of the employees' organisations of each Member State,

| — | 3 representatives of the Commission. |
| --- | --- |

—

3 representatives of the Commission.

Task

To adopt the Agency's work programme, budget and annual general report.

2. The Director

Appointed by the Governing Board on a proposal from the Commission.

3. Committees

Obligatory consultation of the Commission and the Advisory Committee on Safety and Health at Work in respect of the work programme.

4. External audit

Court of Auditors.

5. Discharge authority

Parliament on a recommendation by the Council.

Final budget:

| — | 13,7 million euro (10,7 million euro) |
| --- | --- |

—

13,7 million euro (10,7 million euro)

Including:

| — | Community subsidy, DG Employment: 96 % (98 %) |
| --- | --- |

—

Community subsidy, DG Employment: 96 % (98 %)

| — | Community subsidy, DG Enlargement: 3 % (0 %) |
| --- | --- |

—

Community subsidy, DG Enlargement: 3 % (0 %)

Staff at 31 December:

40 (38) posts in the establishment plan,

of which, posts filled: 32 (29)

20 (22) other posts (auxiliary contracts, seconded national experts, local staff and employment-agency staff).

Total staff: 52 (51)

assigned to

operational tasks: 35 (34)

administrative tasks: 9 (9)

mixed tasks: 8 (8)

Building the links — Networking:

| — | further development of focal point network (implementation of 2nd generation network), |
| --- | --- |

—

further development of focal point network (implementation of 2nd generation network),

| — | institutional capacity building in Candidate Countries (PHARE programme). |
| --- | --- |

—

institutional capacity building in Candidate Countries (PHARE programme).

Communicating Information:

| — | European Week 2005 campaign on Noise finishing with a European summit in Bilbao, |
| --- | --- |

—

European Week 2005 campaign on Noise finishing with a European summit in Bilbao,

| — | 3rd generation web-based information services on occupational safety and health, |
| --- | --- |

—

3rd generation web-based information services on occupational safety and health,

| — | launch of global occupational safety and health portal, |
| --- | --- |

—

launch of global occupational safety and health portal,

| — | targeted campaign programme for EU 10. |
| --- | --- |

—

targeted campaign programme for EU 10.

Developing knowledge:

| — | information products for national and European Week campaigns 2005 (on Noise) and 2006 (on Young People), |
| --- | --- |

—

information products for national and European Week campaigns 2005 (on Noise) and 2006 (on Young People),

| — | information products on good practice in agriculture, |
| --- | --- |

—

information products on good practice in agriculture,

| — | risk Observatory information products (e.g. reports on noise, MSD and stress, web information on construction and agriculture, among other topics; identification of emerging biological and chemical risks). |
| --- | --- |

—

risk Observatory information products (e.g. reports on noise, MSD and stress, web information on construction and agriculture, among other topics; identification of emerging biological and chemical risks).

Source: Information provided by the Agency.

EUROPEAN AGENCY FOR SAFETY AND HEALTH AT WORK

Source: Data compiled by the Agency. These tables summarise the data supplied by the Agency in its annual accounts.

Table 2

Implementation of the budget for the financial year 2005

| (1000 euro) |
| --- |
| Revenue | Expenditure |
| Source of revenue | Revenue entered in the final budget for the financial year | Revenue collected | Expenditure allocation | Final budget appropriations | Appropriations carried over from the previous financial year | Appropriations for the financial year and carried over from the previous financial year |
| final | committed | paid | carried over | cancelled | available | paid | cancelled | available | committed | paid | carried over | cancelled |
| Community subsidies | 13 200 | 12 208 | Title I
  Staff | 4 579 | 3 796 | 3 435 | 75 | 1 069 | 60 | 42 | 18 | 4 639 | 3 856 | 3 477 | 75 | 1 087 |
| Phare | 358 | 340 | Title II
  Administration | 1 501 | 1 406 | 1 052 | 331 | 118 | 248 | 187 | 61 | 1 749 | 1 654 | 1 239 | 331 | 179 |
| Other revenue | 180 | 217 | Title III
  Operating activities | 7 300 | 7 090 | 4 589 | 2 213 | 498 | 2 549 | 2 224 | 325 | 9 849 | 9 639 | 6 813 | 2 213 | 823 |
| | | | Phare | 358 | 172 | 133 | 225 | — | 0 | 0 | — | 358 | 172 | 133 | 225 | — |
| Total | 13 738 | 12 765 | Total | 13 738 | 12 464 | 9 209 | 2 844 | 1 685 | 2 857 | 2 453 | 404 | 16 595 | 15 321 | 11 662 | 2 844 | 2 089 |

(1000 euro)

Revenue

Expenditure

Source of revenue

Revenue entered in the final budget for the financial year

Revenue collected

Expenditure allocation

Final budget appropriations

Appropriations carried over from the previous financial year

Appropriations for the financial year and carried over from the previous financial year

final

committed

paid

carried over

cancelled

available

paid

cancelled

available

committed

paid

carried over

cancelled

Community subsidies

13 200

12 208

Title I

Staff

4 579

3 796

3 435

75

1 069

60

42

18

4 639

3 856

3 477

75

1 087

Phare

358

340

Title II

Administration

1 501

1 406

1 052

331

118

248

187

61

1 749

1 654

1 239

331

179

Other revenue

180

217

Title III

Operating activities

7 300

7 090

4 589

2 213

498

2 549

2 224

325

9 849

9 639

6 813

2 213

823

Phare

358

172

133

225

—

0

0

—

358

172

133

225

—

Total

13 738

12 765

Total

13 738

12 464

9 209

2 844

1 685

2 857

2 453

404

16 595

15 321

11 662

2 844

2 089

Table 3

Revenue and expenditure account for the financial year 2005 (1)

| (1000 euro) |
| --- |
| | 2005 |
| Operating revenue |
| Community subsidies | 13 673 |
| Other subsidies/revenue | 92 |
| Total (a) | 13 765 |
| Operating expenses |
| Staff | 3 312 |
| Administration | 1 679 |
| Operating activities | 8 584 |
| Total (b) | 13 575 |
| Operating result (c = a — b) | 190 |
| Other income (d) | 0 |
| Other charges (e) | 7 |
| Economic result (f = c + d — e) | 183 |

(1000 euro)

2005

Operating revenue

Community subsidies

13 673

Other subsidies/revenue

92

Total (a)

13 765

Operating expenses

Staff

3 312

Administration

1 679

Operating activities

8 584

Total (b)

13 575

Operating result (c = a — b)

190

Other income (d)

0

Other charges (e)

7

Economic result (f = c + d — e)

183

Table 4

Balance sheet at 31 December 2005 and 2004 (2)

| (1000 euro) |
| --- |
| | 2005 | 2004 |
| Assets |
| Fixed Assets | 339 | 325 |
| Receivables | 596 | 426 |
| Cash and cash equivalents | 3 392 | 3 117 |
| Total | 4 327 | 3 868 |
| Liabilities |
| Accumulated surplus/deficit | 1 637 | 1 637 |
| Economic result for the year | 183 | 0 |
| Current liabilities | 2 507 | 2 231 |
| Total | 4 327 | 3 868 |

(1000 euro)

2005

2004

Assets

Fixed Assets

339

325

Receivables

596

426

Cash and cash equivalents

3 392

3 117

Total

4 327

3 868

Liabilities

Accumulated surplus/deficit

1 637

1 637

Economic result for the year

183

0

Current liabilities

2 507

2 231

Total

4 327

3 868

---

(1)  Data for the financial year 2004 are not shown as they are not comparable with the data for 2005 because of the change in the accounting principles applied.

(2)  Data for the financial year 2004 have been restated to allow comparison with those for 2005.

---

THE AGENCY'S REPLIES

| 7. | The Agency is in the process of improving its financial management. Its global carry-over rate has been reduced from 27 % in 2004 to 20 % in 2005 and cancellation of carry-overs has been reduced from nearly 900 000 euros in 2004 to about 400 000 euros in 2005. Concerning the transfer of appropriations, the Agency is taking measures to improve its budget management. |
| --- | --- |

7.

The Agency is in the process of improving its financial management. Its global carry-over rate has been reduced from 27 % in 2004 to 20 % in 2005 and cancellation of carry-overs has been reduced from nearly 900 000 euros in 2004 to about 400 000 euros in 2005. Concerning the transfer of appropriations, the Agency is taking measures to improve its budget management.

| 8. | Internal Control Standards have been adopted by the Governing Board in March 2006. Operational verification of transactions is done by each unit in accordance with the nature of the operation. This procedure will be formalized. The Agency is developing a systematic approach to risk analysis. |
| --- | --- |

8.

Internal Control Standards have been adopted by the Governing Board in March 2006. Operational verification of transactions is done by each unit in accordance with the nature of the operation. This procedure will be formalized. The Agency is developing a systematic approach to risk analysis.

| 9. | For each competition the criteria for the pre-selection of candidates to be interviewed are agreed by a Selection Committee nominated by the Director. Nevertheless, the Agency is taking measures to improve the documentation of the selection processes. |
| --- | --- |

9.

For each competition the criteria for the pre-selection of candidates to be interviewed are agreed by a Selection Committee nominated by the Director. Nevertheless, the Agency is taking measures to improve the documentation of the selection processes.

| 10. | The Agency is taking measures to improve the documentation of contract processes. |
| --- | --- |

10.

The Agency is taking measures to improve the documentation of contract processes.

---

| 19.12.2006 | EN | Official Journal of the European Union | C 312/30 |
| --- | --- | --- | --- |

19.12.2006

EN

Official Journal of the European Union

C 312/30

---

REPORT

on the annual accounts of the European Maritime Safety Agency for the financial year 2005 together with the Agency's replies

(2006/C 312/06)

CONTENTS

| 1-2 | INTRODUCTION |
| --- | --- |

1-2

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

3-6

| 7-12 | OBSERVATIONS |
| --- | --- |

7-12

Tables 1 to 4

The Agency's replies

INTRODUCTION

| 1. | The European Maritime Safety Agency (hereinafter called the Agency) was set up by Regulation (EC) No 1406/2002 of the European Parliament and of the Council of 27 June 2002 (1). The Agency's tasks are to ensure a high level of maritime safety and prevention of pollution by ships, to provide the Commission and the Member States with technical assistance, to monitor the implementation of Community legislation and to evaluate its effectiveness. |
| --- | --- |

1.

The European Maritime Safety Agency (hereinafter called the Agency) was set up by Regulation (EC) No 1406/2002 of the European Parliament and of the Council of 27 June 2002 (1). The Agency's tasks are to ensure a high level of maritime safety and prevention of pollution by ships, to provide the Commission and the Member States with technical assistance, to monitor the implementation of Community legislation and to evaluate its effectiveness.

| 2. | Table 1 summarises the Agency's competences and activities. Key information from the financial statements drawn up by the Agency for the financial year 2005 is presented in Tables 2, 3 and 4. |
| --- | --- |

2.

Table 1 summarises the Agency's competences and activities. Key information from the financial statements drawn up by the Agency for the financial year 2005 is presented in Tables 2, 3 and 4.

STATEMENT OF ASSURANCE

| 3. | This Statement is addressed to the European Parliament and the Council in accordance with Article 185(2) of Council Regulation (EC, Euratom) No 1605/2002 of 25 June 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. |
| --- | --- |

3.

This Statement is addressed to the European Parliament and the Council in accordance with Article 185(2) of Council Regulation (EC, Euratom) No 1605/2002 of 25 June 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.

| 4. | The Agency's accounts for the financial year ended 31 December 2005 (3) were drawn up by its Executive Director, pursuant to Article 18 of Regulation (EC) No 1406/2002, and sent to the Court, which is required to give a Statement of Assurance as to their reliability and the legality and regularity of the underlying transactions. |
| --- | --- |

4.

The Agency's accounts for the financial year ended 31 December 2005 (3) were drawn up by its Executive Director, pursuant to Article 18 of Regulation (EC) No 1406/2002, and sent to the Court, which is required to give a Statement of Assurance as to their reliability and the legality and regularity of the underlying transactions.

| 5. | The Court conducted an audit in accordance with its policies and standards, which are based on international auditing standards that have been adapted to the Community context. The audit was planned and performed to obtain reasonable assurance that the accounts are reliable and the underlying transactions are legal and regular. |
| --- | --- |

5.

The Court conducted an audit in accordance with its policies and standards, which are based on international auditing standards that have been adapted to the Community context. The audit was planned and performed to obtain reasonable assurance that the accounts are reliable and the underlying transactions are legal and regular.

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

6.

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

Reliability of the accountsThe Agency's accounts for the financial year ended 31 December 2005 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 implementation of the budget for the financial year 2005 was affected by delays observed in staff recruitment, as shown by the commitment rate of less than two-thirds of the budgeted appropriations under Title I (staff expenditure). This situation had repercussions on the utilisation of appropriations for administrative expenditure (Title II, with two-thirds of appropriations committed) and, in particular, on the utilisation of appropriations for operating activities (Title III), with a payment rate of only 33 %. |
| --- | --- |

7.

The implementation of the budget for the financial year 2005 was affected by delays observed in staff recruitment, as shown by the commitment rate of less than two-thirds of the budgeted appropriations under Title I (staff expenditure). This situation had repercussions on the utilisation of appropriations for administrative expenditure (Title II, with two-thirds of appropriations committed) and, in particular, on the utilisation of appropriations for operating activities (Title III), with a payment rate of only 33 %.

| 8. | The Court notes that activity-based management has not been brought in, even though the Agency's financial regulation made provision for its introduction, on the model that was applied to the general budget with a view to better monitoring of performance. In this context, achieving the Agency's aims should not mean merely carrying out a set of tasks. It should rather be assessed in terms of contribution to the goals laid down in the Agency's basic Regulation. The Agency's work programme should, in principle, express this contribution in operational and measurable terms. |
| --- | --- |

8.

The Court notes that activity-based management has not been brought in, even though the Agency's financial regulation made provision for its introduction, on the model that was applied to the general budget with a view to better monitoring of performance. In this context, achieving the Agency's aims should not mean merely carrying out a set of tasks. It should rather be assessed in terms of contribution to the goals laid down in the Agency's basic Regulation. The Agency's work programme should, in principle, express this contribution in operational and measurable terms.

| 9. | The computerised accounting system for the general accounts allows direct changes to be made to accounting records without corrective journal entries. This situation involves significant risks from the point of view of the integrity of the accounts and should be rectified as soon as possible. Moreover, the register of liabilities to be entered in the balance sheet should be checked more carefully: they are actually overestimated by at least 92 000 euro (i.e. almost 10 % of current liabilities) corresponding to goods and services not yet received at 31 December 2005. |
| --- | --- |

9.

The computerised accounting system for the general accounts allows direct changes to be made to accounting records without corrective journal entries. This situation involves significant risks from the point of view of the integrity of the accounts and should be rectified as soon as possible. Moreover, the register of liabilities to be entered in the balance sheet should be checked more carefully: they are actually overestimated by at least 92 000 euro (i.e. almost 10 % of current liabilities) corresponding to goods and services not yet received at 31 December 2005.

| 10. | The documentation of transactions, a prerequisite for a valid system of internal control, shows some weaknesses. Files which relate to commitments and payments are often incomplete or confused, which makes transactions difficult to trace. It is also difficult to monitor contracts entered into by the Agency. Information is dispersed across several lists. It is difficult to ascertain the total number of contracts concluded during the financial year and the number of contracts in progress. The system of control must be tightened up, beginning with the adoption of minimum standards for administrative and control procedures, including the nature and organisation of data. |
| --- | --- |

10.

The documentation of transactions, a prerequisite for a valid system of internal control, shows some weaknesses. Files which relate to commitments and payments are often incomplete or confused, which makes transactions difficult to trace. It is also difficult to monitor contracts entered into by the Agency. Information is dispersed across several lists. It is difficult to ascertain the total number of contracts concluded during the financial year and the number of contracts in progress. The system of control must be tightened up, beginning with the adoption of minimum standards for administrative and control procedures, including the nature and organisation of data.

| 11. | Contract clauses which provide for pre-financing are not standardised with regard to the provision of bank guarantees. Thus, for four contracts for approximately equivalent sums, a guarantee was required in two cases but not in the other two. In two cases, moreover, the advance payments provided for were made, although the guarantees were invalid. |
| --- | --- |

11.

Contract clauses which provide for pre-financing are not standardised with regard to the provision of bank guarantees. Thus, for four contracts for approximately equivalent sums, a guarantee was required in two cases but not in the other two. In two cases, moreover, the advance payments provided for were made, although the guarantees were invalid.

| 12. | There are various shortcomings in the management of public procurement. For one contract made up of several lots, the composition of the tender evaluation committee did not comply with the regulatory requirements (4). In addition, the file concerning the awarding of one lot contained incomplete documentation (5). |
| --- | --- |

12.

There are various shortcomings in the management of public procurement. For one contract made up of several lots, the composition of the tender evaluation committee did not comply with the regulatory requirements (4). In addition, the file concerning the awarding of one lot contained incomplete documentation (5).

This report was adopted by the Court of Auditors in Luxembourg at its meeting of 28 September 2006.

For the Court of Auditors

Hubert WEBER

President

---

(1)  OJ L 208, 5.8.2002, p. 1.

1

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

2

(3)  These accounts were drawn up on 16 June 2006 and received by the Court on 3 July 2006.

3

(4)  The tender evaluation committee consisted of members of the same unit, although the applicable provisions laid down that at least two organisational entities should be represented on tender evaluation committees.

4

(5)  In respect of lot 3, the enterprise chosen had not submitted documentary evidence of its technical capacity to carry out the required tasks.

5

---

Table 1

European Maritime Safety Agency (temporary headquarters in Brussels, planned relocation to Lisbon)

| Areas of Community competence deriving from the Treaty | Competence of the Agency as defined in Regulation (EC) No 1406/2002 of the European Parliament and of the Council of 27 June 2002 as amended by Regulations (EC) No 1644/2003 of 22 July 2003 and No 724/2004 of 31 March 2004 | Governance | Resources made available to the Agency

  (2004) | Products and services supplied
  2005 |
| --- | --- | --- | --- | --- |
| 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 ensure a high, uniform and effective level of maritime safety and prevention of pollution by ships, |

Areas of Community competence deriving from the Treaty

Competence of the Agency as defined in Regulation (EC) No 1406/2002 of the European Parliament and of the Council of 27 June 2002 as amended by Regulations (EC) No 1644/2003 of 22 July 2003 and No 724/2004 of 31 March 2004

Governance

Resources made available to the Agency

(2004)

Products and services supplied

2005

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 ensure a high, uniform and effective level of maritime safety and prevention of pollution by ships,

| — | to provide the Member States and the Commission with technical and scientific assistance, |
| --- | --- |

—

to provide the Member States and the Commission with technical and scientific assistance,

| — | to monitor the implementation of Community legislation in this field and to evaluate the effectiveness of the measures in place, |
| --- | --- |

—

to monitor the implementation of Community legislation in this field and to evaluate the effectiveness of the measures in place,

| — | to introduce operational methods for combating pollution in European waters. |
| --- | --- |

—

to introduce operational methods for combating pollution in European waters.

Tasks:

| — | to assist the Commission in drawing up Community legislation and in its implementation, |
| --- | --- |

—

to assist the Commission in drawing up Community legislation and in its implementation,

| — | to monitor the overall functioning of the Community port State control regime, which may include visits to the Member States, |
| --- | --- |

—

to monitor the overall functioning of the Community port State control regime, which may include visits to the Member States,

| — | to provide the Commission with technical assistance for the port State control of ships, |
| --- | --- |

—

to provide the Commission with technical assistance for the port State control of ships,

| — | to work with the Member States on developing technical solutions and to provide technical assistance related to the implementation of Community legislation, |
| --- | --- |

—

to work with the Member States on developing technical solutions and to provide technical assistance related to the implementation of Community legislation,

| — | to promote cooperation between riparian States in the shipping areas concerned, |
| --- | --- |

—

to promote cooperation between riparian States in the shipping areas concerned,

| — | to develop and operate any information system necessary, |
| --- | --- |

—

to develop and operate any information system necessary,

| — | to facilitate cooperation between the Member States and the Commission in the development of a common methodology for investigating maritime accidents, |
| --- | --- |

—

to facilitate cooperation between the Member States and the Commission in the development of a common methodology for investigating maritime accidents,

| — | to provide the Commission and the Member States with reliable information on maritime safety and on pollution by ships, |
| --- | --- |

—

to provide the Commission and the Member States with reliable information on maritime safety and on pollution by ships,

| — | to assist the Commission and the Member States in the identification and pursuit of ships making unlawful discharges, |
| --- | --- |

—

to assist the Commission and the Member States in the identification and pursuit of ships making unlawful discharges,

| — | to monitor the classification societies recognised by the EU and to issue the corresponding reports to the Commission, |
| --- | --- |

—

to monitor the classification societies recognised by the EU and to issue the corresponding reports to the Commission,

| — | to assist the Commission with the input for and implementation of tasks relating to the Directive on marine equipment, |
| --- | --- |

—

to assist the Commission with the input for and implementation of tasks relating to the Directive on marine equipment,

| — | to provide the Commission with data on the introduction of the Directive on ship waste reception facilities in European ports. |
| --- | --- |

—

to provide the Commission with data on the introduction of the Directive on ship waste reception facilities in European ports.

1. Administrative Board

Composition

One representative per Member State, four representatives of the Commission, four representatives, without the right to vote, from the professional sectors concerned.

Tasks

| — | to adopt the budget and the work programme, |
| --- | --- |

—

to adopt the budget and the work programme,

| — | to examine requests from Member States for assistance. |
| --- | --- |

—

to examine requests from Member States for assistance.

2. Executive Director

Appointed by the Administrative Board on a proposal from the Commission.

3. External audit

Court of Auditors.

4. Discharge Authority

Parliament on a recommendation from the Council.

Final budget for 2005:

35,3 million euro (13,3 million euro)

Community contribution: 100 % (100 %)

Total staff at 31 December 2005:

95 (55) posts in the establishment plan

No of posts occupied: 80 (34)

+20 (9) other posts (auxiliary contracts, seconded national experts, local staff, employment-agency staff)

Total staff numbers: 100 (43)

assigned to the following duties:

| — | operational tasks: 65 (27) |
| --- | --- |

—

operational tasks: 65 (27)

| — | administrative tasks: 27 (13) |
| --- | --- |

—

administrative tasks: 27 (13)

| — | mixed tasks: 8 (3) |
| --- | --- |

—

mixed tasks: 8 (3)

Number of specifications and guideline documents: 29

Inspections/Audits: 40

Investigations: 10

Seminars: 22

Source: Information supplied by the Agency.

EUROPEAN MARITIME SAFETY AGENCY

Source: Agency data — These tables summarise the data provided by the Agency in its annual accounts.

Table 2

Implementation of the budget for the financial year 2005

| (1000 euro) |
| --- |
| Revenue | Expenditure |
| Origin of revenue | Revenue entered in the final budget for the financial year | Revenue received | Allocation of expenditure | Final budget appropriations for the financial year | Available appropriations
  (appropriations for the financial year plus appropriations carried over from the previous financial year) | Available appropriations
  (appropriations for the financial year and appropriations carried over from the previous financial year) |
| entered | committed | paid | carried over | cancelled | available | paid | cancelled | available | committed | paid | carried over | cancelled |
| Community subsidies | 35 360 | 16 060 | Title I
  Staff (NDA) | 9 788 | 6 224 | 6 063 | 161 | 3 564 | 143 | 62 | 81 | 9 931 | 6 366 | 6 124 | 161 | 3 645 |
| Other revenue | 0 | 8 | Title II
  Administration (NDA) | 2 898 | 1 939 | 1 598 | 333 | 967 | 684 | 640 | 44 | 3 582 | 2 623 | 2 237 | 333 | 1 011 |
| | | | Title III
  Operating activities (DA) | | | | | | | | | | | | | |
| — CA | 22 674 | 21 551 | 0 | 0 | 1 124 | | | | 22 674 | 21 551 | 0 | 0 | 1 124 |
| — PA | 22 674 | 0 | 7 515 | 0 | 15 159 | | | | 22 674 | 0 | 7 515 | 0 | 15 159 |
| Total | 35 360 | 16 068 | Total CA | 35 360 | 29 714 | 0 | 494 | 5 655 | 827 | 702 | 125 | 36 187 | 30 540 | | 494 | 5 780 |
| Total PA | 35 360 | 0 | 15 176 | 494 | 19 690 | 827 | 702 | 125 | 36 187 | | 15 876 | 494 | 19 815 |
| NDA | : | non-differentiated appropriations (commitment appropriations equal payment appropriations). |
| DA | : | differentiated appropriations (commitment and payment appropriations may differ). |
| CA | : | commitment appropriations in a system of differentiated appropriations. |
| PA | : | payment appropriations in a system of differentiated appropriations. |

(1000 euro)

Revenue

Expenditure

Origin of revenue

Revenue entered in the final budget for the financial year

Revenue received

Allocation of expenditure

Final budget appropriations for the financial year

Available appropriations

(appropriations for the financial year plus appropriations carried over from the previous financial year)

Available appropriations

(appropriations for the financial year and appropriations carried over from the previous financial year)

entered

committed

paid

carried over

cancelled

available

paid

cancelled

available

committed

paid

carried over

cancelled

Community subsidies

35 360

16 060

Title I

Staff (NDA)

9 788

6 224

6 063

161

3 564

143

62

81

9 931

6 366

6 124

161

3 645

Other revenue

0

8

Title II

Administration (NDA)

2 898

1 939

1 598

333

967

684

640

44

3 582

2 623

2 237

333

1 011

Title III

Operating activities (DA)

— CA

22 674

21 551

0

0

1 124

22 674

21 551

0

0

1 124

— PA

22 674

0

7 515

0

15 159

22 674

0

7 515

0

15 159

Total

35 360

16 068

Total CA

35 360

29 714

0

494

5 655

827

702

125

36 187

30 540

494

5 780

Total PA

35 360

0

15 176

494

19 690

827

702

125

36 187

15 876

494

19 815

NDA

:

non-differentiated appropriations (commitment appropriations equal payment appropriations).

DA

:

differentiated appropriations (commitment and payment appropriations may differ).

CA

:

commitment appropriations in a system of differentiated appropriations.

PA

:

payment appropriations in a system of differentiated appropriations.

Table 3

Revenue and expenditure account for the financial year 2005 (1)

| (1000 euro) |
| --- |
| | 2005 |
| Operating revenue |
| Community subsidies | 15 656 |
| Total (a) | 15 656 |
| Operating expenditure |
| Staff | 6 099 |
| Administration | 2 194 |
| Operating activities | 2 925 |
| Total (b) | 11 218 |
| Operating result (c = a — b) | 4 438 |
| Other income (d) | 0 |
| Other charges (e) | 3 |
| Economic result (f = c + d — e) | 4 435 |

(1000 euro)

2005

Operating revenue

Community subsidies

15 656

Total (a)

15 656

Operating expenditure

Staff

6 099

Administration

2 194

Operating activities

2 925

Total (b)

11 218

Operating result (c = a — b)

4 438

Other income (d)

0

Other charges (e)

3

Economic result (f = c + d — e)

4 435

Table 4

Balance sheet at 31 December 2005 and 31 December 2004 (2)

| (1000 euro) |
| --- |
| | 2005 | 2004 |
| Assets |
| Fixed assets | 524 | 206 |
| Receivables | 5 456 | 138 |
| Cash accounts | 8 866 | 9 754 |
| Total | 14 846 | 10 098 |
| Liabilities |
| Accumulated surplus | 2 750 | 0 |
| Economic result for the year | 4 435 | 2 750 |
| Current liabilities | 7 661 | 7 348 |
| Total | 14 846 | 10 098 |

(1000 euro)

2005

2004

Assets

Fixed assets

524

206

Receivables

5 456

138

Cash accounts

8 866

9 754

Total

14 846

10 098

Liabilities

Accumulated surplus

2 750

0

Economic result for the year

4 435

2 750

Current liabilities

7 661

7 348

Total

14 846

10 098

---

(1)  The data for the financial year 2004 have not been presented since they are not comparable with the 2005 data because of the change in the accounting methods applied.

(2)  The data for the financial year 2004 have been restated to make them comparable with the 2005 data.

---

THE AGENCY'S REPLIES

| 7. | The implementation of the budget for the financial year 2005 did suffer from delays in recruitment. A recruitment plan has been established in order to prevent similar delays in 2006. For Titles II and III the payment rates should be higher in 2006, especially for anti-pollution for which contracts have already been signed and payments scheduled. |
| --- | --- |

7.

The implementation of the budget for the financial year 2005 did suffer from delays in recruitment. A recruitment plan has been established in order to prevent similar delays in 2006. For Titles II and III the payment rates should be higher in 2006, especially for anti-pollution for which contracts have already been signed and payments scheduled.

| 8. | An activity-based budget management document was presented at the Agency's Administrative Board meeting in June 2006. This document describes the different activities of the Agency and relates them to the corresponding budgets. This initial activity-based management approach will be refined during the second half of 2006. |
| --- | --- |

8.

An activity-based budget management document was presented at the Agency's Administrative Board meeting in June 2006. This document describes the different activities of the Agency and relates them to the corresponding budgets. This initial activity-based management approach will be refined during the second half of 2006.

| 9. | Since April 2006, the Agency has been using ABAC, the Commission's accounting system, which does not allow accounting records to be changed without corrective journal entries. Following the Court's observation, particular attention will be given to the register of liabilities to be entered into the balance sheet within the framework of the procedure for processing the automatic carry-overs for 2006-2007. |
| --- | --- |

9.

Since April 2006, the Agency has been using ABAC, the Commission's accounting system, which does not allow accounting records to be changed without corrective journal entries. Following the Court's observation, particular attention will be given to the register of liabilities to be entered into the balance sheet within the framework of the procedure for processing the automatic carry-overs for 2006-2007.

| 10. | Following an observation by the Court, the Agency's financial service has revised the control lists, in particular in the field of commitments, payments and the award of contracts. A control list of the supporting documents to be included in a contract award file will be made available to the staff concerned. The database concerning the monitoring of contracts concluded by the Agency will be updated as soon as possible. These various actions should result in a strengthening of internal control. |
| --- | --- |

10.

Following an observation by the Court, the Agency's financial service has revised the control lists, in particular in the field of commitments, payments and the award of contracts. A control list of the supporting documents to be included in a contract award file will be made available to the staff concerned. The database concerning the monitoring of contracts concluded by the Agency will be updated as soon as possible. These various actions should result in a strengthening of internal control.

| 11. | Following an observation by the Court, harmonisation of the processing of advance payments and associated guarantees will be introduced. New contract models are being used in order to prevent guarantees received from no longer being valid when payments are modified. |
| --- | --- |

11.

Following an observation by the Court, harmonisation of the processing of advance payments and associated guarantees will be introduced. New contract models are being used in order to prevent guarantees received from no longer being valid when payments are modified.

| 12. | The call for tenders for anti-pollution services was highly complex and had involved five committees composed of 24 experts from the Agency. Because of the specificity of this contract, it was impossible to include external experts, who were replaced by independent observers in the final evaluation committee. It is true that one company selected had not provided a list of similar projects which it had carried out, but this request was only conditional. The technical committee made a substantive error in stating that the company did not fulfil the requirements. This error was corrected at the final stage by the evaluation and selection committee, however the reasons for this correction were not included in the file. |
| --- | --- |

12.

The call for tenders for anti-pollution services was highly complex and had involved five committees composed of 24 experts from the Agency. Because of the specificity of this contract, it was impossible to include external experts, who were replaced by independent observers in the final evaluation committee. It is true that one company selected had not provided a list of similar projects which it had carried out, but this request was only conditional. The technical committee made a substantive error in stating that the company did not fulfil the requirements. This error was corrected at the final stage by the evaluation and selection committee, however the reasons for this correction were not included in the file.

---

| 19.12.2006 | EN | Official Journal of the European Union | C 312/36 |
| --- | --- | --- | --- |

19.12.2006

EN

Official Journal of the European Union

C 312/36

---

REPORT

on the annual accounts of the European Environment Agency for the financial year 2005 together with the Agency's replies

(2006/C 312/07)

CONTENTS

| 1-2 | INTRODUCTION |
| --- | --- |

1-2

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

3-6

| 7-11 | OBSERVATIONS |
| --- | --- |

7-11

Tables 1 to 4

The Agency's replies

INTRODUCTION

| 1. | The European Environment Agency (hereinafter called the Agency) was established by Council Regulation (EEC) No 1210/90 of 7 May 1990 (1). It is responsible for setting up an observation network that provides the Commission, the Member States and, more generally, the public with reliable information on the state of the environment. This information should, in particular, enable the European Union and the Member States to take action to safeguard the environment and assess the effectiveness of such action. |
| --- | --- |

1.

The European Environment Agency (hereinafter called the Agency) was established by Council Regulation (EEC) No 1210/90 of 7 May 1990 (1). It is responsible for setting up an observation network that provides the Commission, the Member States and, more generally, the public with reliable information on the state of the environment. This information should, in particular, enable the European Union and the Member States to take action to safeguard the environment and assess the effectiveness of such action.

| 2. | Table 1 summarises the Agency's competences and activities. Key Information from the financial statements drawn up by the Agency for the financial year 2005 is presented in Tables 2, 3 and 4. |
| --- | --- |

2.

Table 1 summarises the Agency's competences and activities. Key Information from the financial statements drawn up by the Agency for the financial year 2005 is presented in 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. |
| --- | --- |

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.

| 4. | The Agency's accounts for the financial year ended 31 December 2005 (3) were drawn up by its Executive Director, pursuant to Article 13 of Regulation (EEC) No 1210/90, and sent to the Court, which is required to give its opinion on their reliability and on the legality and regularity of the underlying transactions. |
| --- | --- |

4.

The Agency's accounts for the financial year ended 31 December 2005 (3) were drawn up by its Executive Director, pursuant to Article 13 of Regulation (EEC) No 1210/90, and sent to the Court, which is required to give its opinion on their reliability and on the legality and regularity of the underlying transactions.

| 5. | The Court conducted an audit in accordance with its policies and standards, which are based on international auditing standards that have been adapted to the Community context. The audit was planned and performed to obtain reasonable assurance that the accounts are reliable and the underlying transactions are legal and regular. |
| --- | --- |

5.

The Court conducted an audit in accordance with its policies and standards, which are based on international auditing standards that have been adapted to the Community context. The audit was planned and performed to obtain reasonable assurance that the accounts are reliable and the underlying transactions are legal and regular.

| 6. | The Court has thus obtained a reasonable basis for the opinion expressed below. |
| --- | --- |

6.

The Court has thus obtained a reasonable basis for the opinion expressed below.

Reliability of the accountsThe Agency's accounts for the financial year ended 31 December 2005 are, in all material respects, reliable.Legality and regularity of 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 committed nearly all the appropriations in its budget for the financial year 2005. Nevertheless, it is noted that the carry-over rate (over 30 %) for commitments for its operating activities (Title III) is high. The Agency should ensure a reduction in carry-overs, whose volume hampers the management of the following year's appropriations, which subsequently creates delays in implementation or even increases them. |
| --- | --- |

7.

The agency committed nearly all the appropriations in its budget for the financial year 2005. Nevertheless, it is noted that the carry-over rate (over 30 %) for commitments for its operating activities (Title III) is high. The Agency should ensure a reduction in carry-overs, whose volume hampers the management of the following year's appropriations, which subsequently creates delays in implementation or even increases them.

| 8. | There is no description of the internal control systems. The authorising officers have not provided a formal description of the systems that they use for supplying and substantiating accounts information and the accounting officer has therefore still not been able to validate them. |
| --- | --- |

8.

There is no description of the internal control systems. The authorising officers have not provided a formal description of the systems that they use for supplying and substantiating accounts information and the accounting officer has therefore still not been able to validate them.

| 9. | There are shortcomings in the authorising officer's annual activity report. This report does not supply adequate information on the results of the year's activities in relation to the objectives established, the associated risks, the use of resources and the functioning of the internal control systems. |
| --- | --- |

9.

There are shortcomings in the authorising officer's annual activity report. This report does not supply adequate information on the results of the year's activities in relation to the objectives established, the associated risks, the use of resources and the functioning of the internal control systems.

| 10. | During the audit of the procedures for the recruitment of temporary staff, it was observed that certain internal provisions concerning the joint nature of the selection committees and the inalterability of the selection criteria adopted beforehand did not comply with the provisions of the conditions of employment of other servants of the Communities. |
| --- | --- |

10.

During the audit of the procedures for the recruitment of temporary staff, it was observed that certain internal provisions concerning the joint nature of the selection committees and the inalterability of the selection criteria adopted beforehand did not comply with the provisions of the conditions of employment of other servants of the Communities.

| 11. | In the procurement field, the Court found shortcomings in respect of evaluation criteria. There is no specific information on how information on prices should be taken into account. This situation leads to unjustified discrepancies in the appraisal of tenders (4). |
| --- | --- |

11.

In the procurement field, the Court found shortcomings in respect of evaluation criteria. There is no specific information on how information on prices should be taken into account. This situation leads to unjustified discrepancies in the appraisal of tenders (4).

This report was adopted by the Court of Auditors in Luxembourg at its meeting of 28 September 2006.

For the Court of Auditors

Hubert WEBER

President

---

(1)  OJ L 120, 11.5.1990

1

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

2

(3)  These accounts were drawn up on 21 June 2006 and received by the Court on 3 July 2006.

3

(4)  This was the case for a contract worth 87 000 euro.

4

---

Table 1

European Environment Agency (Copenhagen)

| Areas of Community competence deriving from the Treaty | Competences of the Agency as defined in Council Regulation (EEC) No 1210/90 of 7 May 1990 | Governance | Resources made available to the Agency

  (2004) | Products and services supplied in 2005 |
| --- | --- | --- | --- | --- |
| Environment policy

  Community policy on the environment shall aim at a high level of protection taking into account the diversity of situations in the various regions of the Community. It shall be based on the precautionary principle and on the principles that preventive action should be taken, that environmental damage should as a priority be rectified at source and that the polluter should pay. (...) In preparing its policy (...), the Community shall take account of available scientific and technical data (...)

  (Article 174 of the Treaty) | Objectives:

  Setting up of a European environment information and observation network to provide the Community and the Member States with reliable information so that they are able to:






  (a) | take the requisite action to protect the environment; |

Areas of Community competence deriving from the Treaty

Competences of the Agency as defined in Council Regulation (EEC) No 1210/90 of 7 May 1990

Governance

Resources made available to the Agency

(2004)

Products and services supplied in 2005

Environment policy

Community policy on the environment shall aim at a high level of protection taking into account the diversity of situations in the various regions of the Community. It shall be based on the precautionary principle and on the principles that preventive action should be taken, that environmental damage should as a priority be rectified at source and that the polluter should pay. (...) In preparing its policy (...), the Community shall take account of available scientific and technical data (...)

(Article 174 of the Treaty)

Objectives:

Setting up of a European environment information and observation network to provide the Community and the Member States with reliable information so that they are able to:

(a)

take the requisite action to protect the environment;

| (b) | evaluate its implementation; |
| --- | --- |

(b)

evaluate its implementation;

| (c) | ensure that the public is well informed about the state of the environment. |
| --- | --- |

(c)

ensure that the public is well informed about the state of the environment.

Tasks:

| — | to supply the Community and the Member States with the requisite information, |
| --- | --- |

—

to supply the Community and the Member States with the requisite information,

| — | to record and evaluate data on the state of the environment and to report on its quality, |
| --- | --- |

—

to record and evaluate data on the state of the environment and to report on its quality,

| — | to ensure that environmental data are comparable at European level, |
| --- | --- |

—

to ensure that environmental data are comparable at European level,

| — | to promote the incorporation of European environmental data into international programmes, |
| --- | --- |

—

to promote the incorporation of European environmental data into international programmes,

| — | to publish a report every five years on the state of, changes in and outlook for the environment; |
| --- | --- |

—

to publish a report every five years on the state of, changes in and outlook for the environment;

| — | to encourage the development of environmental forecasting techniques and methods of assessing the cost of damage caused to the environment, and the exchange of information on damage-prevention technology. |
| --- | --- |

—

to encourage the development of environmental forecasting techniques and methods of assessing the cost of damage caused to the environment, and the exchange of information on damage-prevention technology.

| — | to encourage the development of methods of assessing the cost of damage caused to the environment and the costs of prevention, protection and restoration policies for the environment. |
| --- | --- |

—

to encourage the development of methods of assessing the cost of damage caused to the environment and the costs of prevention, protection and restoration policies for the environment.

1. Management Board

Consisting of:

| — | one representative per Member State, |
| --- | --- |

—

one representative per Member State,

| — | two representatives of the Commission, |
| --- | --- |

—

two representatives of the Commission,

| — | two scientists appointed by the European Parliament. |
| --- | --- |

—

two scientists appointed by the European Parliament.

Task

To adopt the work programme and ensure it is implemented.

2. Executive Director

Appointed by the Management Board on a proposal from the Commission.

3. Advisory Forum

Consisting of one representative per Member State, it advises the Executive Director.

4. Scientific Committee

Consisting of qualified figures in the field of the environment appointed by the Management Board.

5. External audit

European Court of Auditors.

6. Discharge Authority

Parliament on a recommendation by the Council.

Final budget for 2005

32,1 million euro (31,1 million euro)

Community subsidy: 84 % (87 %).

Staff numbers at 31 December 2005

Number of posts in the establishment plan: 115 (115) posts

Posts occupied: 107 (102)

+34 (15) other posts (auxiliary contracts, seconded national experts, local and employment-agency staff)

Total staff numbers: 115 (115)

assigned to the following tasks:

| — | operational: 72 (72) |
| --- | --- |

—

operational: 72 (72)

| — | administrative: 42 (42) |
| --- | --- |

—

administrative: 42 (42)

| — | mixed: 1 (1) |
| --- | --- |

—

mixed: 1 (1)

| — | launch of the report on the state of, trends in and prospects for the environment entitled ‘The European environment: state and outlook 2005’, |
| --- | --- |

—

launch of the report on the state of, trends in and prospects for the environment entitled ‘The European environment: state and outlook 2005’,

| — | implementation of base indicators concerning the state of the environment as an operational part of the AEE's environmental information system, |
| --- | --- |

—

implementation of base indicators concerning the state of the environment as an operational part of the AEE's environmental information system,

| — | launch of the process of ‘Streamlining European 2010 Biodiversity Indicators’, |
| --- | --- |

—

launch of the process of ‘Streamlining European 2010 Biodiversity Indicators’,

| — | launch of two new topic centres on biodiversity and resource and waste management, |
| --- | --- |

—

launch of two new topic centres on biodiversity and resource and waste management,

| — | seminars organised under the Presidency of the Council, |
| --- | --- |

—

seminars organised under the Presidency of the Council,

| — | assistance in harmonising data, |
| --- | --- |

—

assistance in harmonising data,

| — | management of the EIONET network (European Environment Information and Observation Network). |
| --- | --- |

—

management of the EIONET network (European Environment Information and Observation Network).

Source: Information supplied by the Agency.

EUROPEAN ENVIRONMENT AGENCY

Source: Information supplied by the Agency — These tables summarise the data provided by the Agency in its annual accounts.

Table 2

Implementation of the budget for the financial year 2005

| (1000 euro) |
| --- |
| Revenue | Expenditure |
| Origin of Revenue | Revenue entered in the final budget for the financial year | Revenue collected | Allocation of expenditure | Appropriations under the final budget | Appropriations carried over from the previous financial year | Appropriations for the financial year and the previous financial year |
| entered | committed | paid | carried over | cancelled | available | paid | cancelled | available | committed | paid | carried over | cancelled |
| Community subsidies | 26 900 | 26 900 | Title I
  Staff | 14 468 | 14 468 | 13 958 | 508 | 2 | 436 | 319 | 117 | 14 904 | 14 904 | 14 277 | 508 | 119 |
| Other subsidies | 4 444 | 7 438 | Title II
  Administration | 3 857 | 3 856 | 2 960 | 895 | 2 | 396 | 346 | 50 | 4 253 | 4 252 | 3 306 | 895 | 52 |
| Other revenue | p.m | 218 | Title III
  Operating activities | 13 019 | 13 018 | 8 942 | 4 069 | 8 | 4 853 | 4 647 | 206 | 17 872 | 17 871 | 13 589 | 4 069 | 214 |
| Earmarked revenue | 800 | 745 | Earmarked revenue | 800 | 720 | 277 | 523 | 0 | 2 208 | 536 | 28 | 3 008 | 2 928 | 813 | 2 167 | 28 |
| Total | 32 144 | 35 301 | Total | 32 144 | 32 062 | 26 137 | 5 995 | 12 | 7 893 | 5 848 | 401 | 40 037 | 39 955 | 31 985 | 7 639 | 413 |

(1000 euro)

Revenue

Expenditure

Origin of Revenue

Revenue entered in the final budget for the financial year

Revenue collected

Allocation of expenditure

Appropriations under the final budget

Appropriations carried over from the previous financial year

Appropriations for the financial year and the previous financial year

entered

committed

paid

carried over

cancelled

available

paid

cancelled

available

committed

paid

carried over

cancelled

Community subsidies

26 900

26 900

Title I

Staff

14 468

14 468

13 958

508

2

436

319

117

14 904

14 904

14 277

508

119

Other subsidies

4 444

7 438

Title II

Administration

3 857

3 856

2 960

895

2

396

346

50

4 253

4 252

3 306

895

52

Other revenue

p.m

218

Title III

Operating activities

13 019

13 018

8 942

4 069

8

4 853

4 647

206

17 872

17 871

13 589

4 069

214

Earmarked revenue

800

745

Earmarked revenue

800

720

277

523

0

2 208

536

28

3 008

2 928

813

2 167

28

Total

32 144

35 301

Total

32 144

32 062

26 137

5 995

12

7 893

5 848

401

40 037

39 955

31 985

7 639

413

Table 3

Economic outturn account for the financial year 2005 (1)

| (1000 euro) |
| --- |
| | 2005 |
| Operating revenue |
| Community subsidies | 26 900 |
| Other subsidies/revenue | 5 633 |
| Total (a) | 32 533 |
| Operating expenditure |
| Staff | 13 423 |
| Administration | 5 321 |
| Operations | 15 618 |
| Total (b) | 34 362 |
| Operating result (c = a — b) | –1 829 |
| Other income (d) | 29 |
| Other charges (e) | –7 |
| Economic result (f = c + d + e) | –1 807 |

(1000 euro)

2005

Operating revenue

Community subsidies

26 900

Other subsidies/revenue

5 633

Total (a)

32 533

Operating expenditure

Staff

13 423

Administration

5 321

Operations

15 618

Total (b)

34 362

Operating result (c = a — b)

–1 829

Other income (d)

29

Other charges (e)

–7

Economic result (f = c + d + e)

–1 807

Table 4

Balance sheet at 31 December 2005 and 2004 (2)

| (1000 euro) |
| --- |
| | 2005 | 2004 |
| Assets |
| Fixed assets | 2 105 | 1 710 |
| Receivables | 2 661 | 5 839 |
| Cash | 4 491 | 1 181 |
| Total | 9 257 | 8 730 |
| Liabilities |
| Accumulated surplus/deficit | 6 050 | 6 050 |
| Economic result for the year | –1 808 | 0 |
| Current liabilities | 5 015 | 2 680 |
| Total | 9 257 | 8 730 |

(1000 euro)

2005

2004

Assets

Fixed assets

2 105

1 710

Receivables

2 661

5 839

Cash

4 491

1 181

Total

9 257

8 730

Liabilities

Accumulated surplus/deficit

6 050

6 050

Economic result for the year

–1 808

0

Current liabilities

5 015

2 680

Total

9 257

8 730

---

(1)  The data for the financial year 2004 are not shown because they are not comparable with those for 2005 due to a change in accounting methods.

(2)  The data for 2004 have been adapted to make them comparable to those for the financial year 2005

---

THE AGENCY'S REPLIES

| 7. | The percentage carry-over has been reduced progressively in recent years and dropped to 31 % for Title III in 2005. Given that most of our Title III contracts for example with topic centres allow work until the end of the calendar year with final deliveries and payments of up to 30 % in the following year, it is difficult to reduce Title III carryover much further than currently achieved. |
| --- | --- |

7.

The percentage carry-over has been reduced progressively in recent years and dropped to 31 % for Title III in 2005. Given that most of our Title III contracts for example with topic centres allow work until the end of the calendar year with final deliveries and payments of up to 30 % in the following year, it is difficult to reduce Title III carryover much further than currently achieved.

| 8. | The internal control systems are under continuous development. It is recognised that the authorising officers have not provided a formal description of the systems they use and this will be done as soon as possible within the development and documentation of our system. |
| --- | --- |

8.

The internal control systems are under continuous development. It is recognised that the authorising officers have not provided a formal description of the systems they use and this will be done as soon as possible within the development and documentation of our system.

| 9. | EEA has tried for 2003 and 2004 to accommodate the requirements of the annual activity report within the Annual Report required under EEA's founding regulation. EEA has not been able to do so and hence from 2005 onwards it produces separate reports. The two 2005 reports were sent to the Court and others on 15 June 2006. |
| --- | --- |

9.

EEA has tried for 2003 and 2004 to accommodate the requirements of the annual activity report within the Annual Report required under EEA's founding regulation. EEA has not been able to do so and hence from 2005 onwards it produces separate reports. The two 2005 reports were sent to the Court and others on 15 June 2006.

| 10. | As from 2006, the Staff Committee has been requested to appoint an equal number of representatives in accordance with article 3 of annex III of the Staff Regulations. The selection criteria laid down in the notice of competition are explicitly now the sole criteria for selection of candidates. |
| --- | --- |

10.

As from 2006, the Staff Committee has been requested to appoint an equal number of representatives in accordance with article 3 of annex III of the Staff Regulations. The selection criteria laid down in the notice of competition are explicitly now the sole criteria for selection of candidates.

| 11. | From the start of 2006 for all procurement procedures, the Agency explains and documents in more detail the way price is taken into account (for example the formula used for scoring price and the evaluation criteria). |
| --- | --- |

11.

From the start of 2006 for all procurement procedures, the Agency explains and documents in more detail the way price is taken into account (for example the formula used for scoring price and the evaluation criteria).

---

| 19.12.2006 | EN | Official Journal of the European Union | C 312/42 |
| --- | --- | --- | --- |

19.12.2006

EN

Official Journal of the European Union

C 312/42

---

REPORT

on the annual accounts of the European Food Safety Authority for the financial year 2005 together with the Authority's replies

(2006/C 312/08)

CONTENTS

| 1-2 | INTRODUCTION |
| --- | --- |

1-2

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

3-6

| 7-13 | OBSERVATIONS |
| --- | --- |

7-13

Tables 1 to 4

The Authority's replies

INTRODUCTION

| 1. | The European Food Safety Authority (hereinafter the Authority) was established by Regulation (EC) No 178/2002 of the European Parliament and of the Council of 28 January 2002 (1). Its main tasks are to supply the scientific information needed for Community legislation to be drawn up, to collect and analyse data that allow risks to be identified and monitored and to provide independent information on these risks. |
| --- | --- |

1.

The European Food Safety Authority (hereinafter the Authority) was established by Regulation (EC) No 178/2002 of the European Parliament and of the Council of 28 January 2002 (1). Its main tasks are to supply the scientific information needed for Community legislation to be drawn up, to collect and analyse data that allow risks to be identified and monitored and to provide independent information on these risks.

| 2. | Table 1 summarises the Authority's competences and activities. Key information from the financial statements drawn up by the Authority for the financial year 2005 is presented in Tables 2, 3 and 4. |
| --- | --- |

2.

Table 1 summarises the Authority's competences and activities. Key information from the financial statements drawn up by the Authority for the financial year 2005 is presented in Tables 2, 3 and 4.

STATEMENT OF ASSURANCE

| 3. | This Statement 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 Authority's accounts, as required by Article 248 of the Treaty establishing the European Community. |
| --- | --- |

3.

This Statement 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 Authority's accounts, as required by Article 248 of the Treaty establishing the European Community.

| 4. | The Authority's accounts for the financial year ended 31 December 2005 (3) were drawn up by its Executive Director, pursuant to Article 44 of Regulation (EC) No 178/2002, 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. |
| --- | --- |

4.

The Authority's accounts for the financial year ended 31 December 2005 (3) were drawn up by its Executive Director, pursuant to Article 44 of Regulation (EC) No 178/2002, 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.

| 5. | The Court conducted an audit in accordance with its policies and standards, which are based on international auditing standards that have been adapted to the Community context. The audit was planned and performed to obtain reasonable assurance that the accounts are reliable and the underlying transactions are legal and regular. |
| --- | --- |

5.

The Court conducted an audit in accordance with its policies and standards, which are based on international auditing standards that have been adapted to the Community context. The audit was planned and performed to obtain reasonable assurance that the accounts are reliable and the underlying transactions are legal and regular.

| 6. | The Court has thus obtained a reasonable basis for the statement expressed below. |
| --- | --- |

6.

The Court has thus obtained a reasonable basis for the statement expressed below.

Reliability of the accountsThe Authority's accounts for the financial year ended 31 December 2005 are, in all material respects, reliable.Legality and regularity of the underlying transactionsExcept for the situation described in paragraph 12, the transactions underlying the Authority's annual accounts, taken as a whole, are legal and regular.

OBSERVATIONS

| 7. | The financial year 2005 was marked by a significant under-implementation of the budget: only 80 % of commitment and payment appropriations were used. This shows that the Authority should make a serious effort to improve the use it makes of the appropriations with which it is entrusted to achieve its objectives. |
| --- | --- |

7.

The financial year 2005 was marked by a significant under-implementation of the budget: only 80 % of commitment and payment appropriations were used. This shows that the Authority should make a serious effort to improve the use it makes of the appropriations with which it is entrusted to achieve its objectives.

| 8. | The Budgetary Authority had amended the establishment plan attached to the Authority's draft 2005 budget, as adopted by its Management Board, in particular by significantly amending the distribution of available posts between each grade. These amendments should have resulted in a reduction of the appropriations earmarked for expenditure on salaries and even for operating expenditure. This reduction was not made and enabled the Authority to restore the grades initially provided for in the draft budget in respect of 19 posts without informing the Budgetary Authority, by the expedient of drawing up a supplementary and amending budget. |
| --- | --- |

8.

The Budgetary Authority had amended the establishment plan attached to the Authority's draft 2005 budget, as adopted by its Management Board, in particular by significantly amending the distribution of available posts between each grade. These amendments should have resulted in a reduction of the appropriations earmarked for expenditure on salaries and even for operating expenditure. This reduction was not made and enabled the Authority to restore the grades initially provided for in the draft budget in respect of 19 posts without informing the Budgetary Authority, by the expedient of drawing up a supplementary and amending budget.

| 9. | The Court noted the failure to introduce activity-based management although this is laid down by the Authority's financial regulation, along the lines of what was applied to the general budget with a view to improving performance monitoring. In this respect the achievement of the Authority's objectives should be assessed in terms of its contribution to the goals set out in its basic regulation. The Authority's work programme should, in principle, express this contribution in operational and measurable terms. |
| --- | --- |

9.

The Court noted the failure to introduce activity-based management although this is laid down by the Authority's financial regulation, along the lines of what was applied to the general budget with a view to improving performance monitoring. In this respect the achievement of the Authority's objectives should be assessed in terms of its contribution to the goals set out in its basic regulation. The Authority's work programme should, in principle, express this contribution in operational and measurable terms.

| 10. | The Authority did not carry out a risk analysis or formally lay down the internal control systems and procedures it follows. In several cases the Court also noted shortcomings in expenditure control (supporting documents missing, unjustified requests for additional services) (4). |
| --- | --- |

10.

The Authority did not carry out a risk analysis or formally lay down the internal control systems and procedures it follows. In several cases the Court also noted shortcomings in expenditure control (supporting documents missing, unjustified requests for additional services) (4).

| 11. | With regard to recruitment, the Authority rejected candidates on the basis of criteria other than those provided for in the vacancy notices and, in addition, did not observe the regulatory provisions concerning the grades of selection board members in relation to the posts to be filled. Candidate selection requires strict application of the relevant criteria and an effective check on whether the documents submitted by candidates in support of their applications offer genuine proof. |
| --- | --- |

11.

With regard to recruitment, the Authority rejected candidates on the basis of criteria other than those provided for in the vacancy notices and, in addition, did not observe the regulatory provisions concerning the grades of selection board members in relation to the posts to be filled. Candidate selection requires strict application of the relevant criteria and an effective check on whether the documents submitted by candidates in support of their applications offer genuine proof.

| 12. | A considerable number of anomalies were revealed during the audits carried out on the award and conclusion of contracts. In a great many of the cases examined, the Court was unable to check that the statutory minimum number of tenderers had been invited to take part in the contracts procedure. The Court noted that the application of the selection criteria was not systematically documented. In several cases, rules for the appointment of evaluation committees had not been applied. In the case of one framework contract, the clauses had not been observed. The frequency of these anomalies is such that the Authority needs to tighten up its internal control system in this area. |
| --- | --- |

12.

A considerable number of anomalies were revealed during the audits carried out on the award and conclusion of contracts. In a great many of the cases examined, the Court was unable to check that the statutory minimum number of tenderers had been invited to take part in the contracts procedure. The Court noted that the application of the selection criteria was not systematically documented. In several cases, rules for the appointment of evaluation committees had not been applied. In the case of one framework contract, the clauses had not been observed. The frequency of these anomalies is such that the Authority needs to tighten up its internal control system in this area.

| 13. | The buildings intended to house the Authority permanently are still not available. The Authority was thus obliged to rent and fit out temporary premises (cost in 2005: approximately 3,5 million euro). When the Authority takes possession of its new premises, it will again have to bear installation costs. The Authority, together with the Commission, should clarify this situation with the national authorities, in particular with a view to any financial compensation. Pending a solution, this should be taken into account when drawing up the budgetary estimates. |
| --- | --- |

13.

The buildings intended to house the Authority permanently are still not available. The Authority was thus obliged to rent and fit out temporary premises (cost in 2005: approximately 3,5 million euro). When the Authority takes possession of its new premises, it will again have to bear installation costs. The Authority, together with the Commission, should clarify this situation with the national authorities, in particular with a view to any financial compensation. Pending a solution, this should be taken into account when drawing up the budgetary estimates.

This report was adopted by the Court of Auditors in Luxembourg at its meeting of 28 September 2006.

For the Court of Auditors

Hubert WEBER

President

---

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

1

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

2

(3)  These accounts were drawn up on 20 June 2006 and received by the Court on 29 June 2006.

3

(4)  For example, the provisions governing mission expenses are not systematically observed, which results in unjustified payments.

4

---

Table 1

European Food Safety Authority (Parma)

| Areas of Community competence deriving from the Treaty | Competences of the Authority
  (Regulation (EC) No 178/2002 of the European Parliament and of the Council of 28 January 2002) | Governance | Resources made available to the Authority in 2005

  (2004) | Products and services supplied |
| --- | --- | --- | --- | --- |
| Free movement of goods (Article 37 of the Treaty)
  Contribution to a high level of protection of health, safety and protection of the environment and of consumers, taking account of any new development based on scientific facts (Article 95 of the Treaty)
  Common trade policy (Article 133 of the Treaty)
  Public health (Article 152(4)(b) of the Treaty) | Objectives:







  — | to provide scientific opinions and scientific and technical support for the Community's legislation and policies which have a direct or indirect impact on food and feed safety, |

Areas of Community competence deriving from the Treaty

Competences of the Authority

(Regulation (EC) No 178/2002 of the European Parliament and of the Council of 28 January 2002)

Governance

Resources made available to the Authority in 2005

(2004)

Products and services supplied

Free movement of goods (Article 37 of the Treaty)

Contribution to a high level of protection of health, safety and protection of the environment and of consumers, taking account of any new development based on scientific facts (Article 95 of the Treaty)

Common trade policy (Article 133 of the Treaty)

Public health (Article 152(4)(b) of the Treaty)

Objectives:

—

to provide scientific opinions and scientific and technical support for the Community's 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, |
| --- | --- |

—

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, |
| --- | --- |

—

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. |
| --- | --- |

—

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

Tasks:

| — | to issue scientific opinions and studies, |
| --- | --- |

—

to issue scientific opinions and studies,

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

—

to promote uniform risk assessment methodologies,

| — | to assist the Commission, |
| --- | --- |

—

to assist the Commission,

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

—

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

| — | to identify and characterise emerging risks, |
| --- | --- |

—

to identify and characterise emerging risks,

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

—

to establish a network of organisations operating in similar fields,

| — | to provide scientific and technical assistance in crisis management, |
| --- | --- |

—

to provide scientific and technical assistance in crisis management,

| — | to improve international cooperation, |
| --- | --- |

—

to improve international cooperation,

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

—

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

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

—

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

1. Management Board

Composition

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

Duties

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

2. 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;

3. Advisory Forum

Composition

One representative per Member State,

Duties

To advise the Executive Director;

4. Scientific Committee and scientific panels:

To draw up the Authority's scientific opinions

5. External audit

Court of Auditors

6. Discharge authority Parliament, on the Council's recommendation.

Final budget:

36,9 million euro (29,1 million euro); Community contribution: 100 % (100 %)

Staff numbers as at 31 December:

Number of posts in establishment plan: 194 (138)

Posts occupied: 124 (102)

+36 (37) other posts (auxiliary contracts, seconded national experts, local staff)

Total staff: 160 (139)

Assigned to the following duties:

| — | operational: 104 (83) |
| --- | --- |

—

operational: 104 (83)

| — | administrative: 56 (56) |
| --- | --- |

—

administrative: 56 (56)

Of the 301 requests for scientific opinions made to the EFSA in 2005 (which represents an increase of 65 % compared with 2004), 163 opinions were adopted and published. They covered many areas including aromatic plants, genetically modified organisms (with the WHO), bovine spongiform encephalopathy (BSE) or transmissible spongiform encephalopathy (TSE). In addition the Authority published its first annual report on animal diseases and other important publications on the determination of risk in the food sector.

The communication of risks and, in general, the activities of the communication department saw a 40 % increase in the number of communications to the public in 2005. Consultations of the EFSA's website also doubled in 2005. The coordination of the communication of risks was stepped up through the advisory forum and workshops organised.

The networking of the EFSA with interested parties, national authorities and institutional counterparts intensified through the setting-up of a forum for interested parties. The Advisory Forum met five times with a view to working as a network with the national authorities on specific topics such as coordination in the event of a crisis scenario or increasing the use of the extranet linking the national authorities, the Commission and the EFSA.

As regards the assessment of the EFSA in 2005, the final consultants' report was published on the EFSA's website by the Management Board which submitted its recommendations at the end of June 2006.

Source: Information supplied by the Authority.

EUROPEAN FOOD SAFETY AUTHORITY

Source: Authority data — These tables summarise the data supplied by the Authority in its annual accounts.

Table 2

Implementation of the budget for the financial year 2005

| (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 | Appropriations carried over from the previous financial year (1) | Appropriations for the financial year and carried over from the previous financial year |
| entered | committed | paid | carried over | cancelled | available | paid | cancelled | available | committed | paid | carried over | cancelled |
| Community subsidies | 36 857 | 31 537 | Title I
  Staff | 16 354 | 14 571 | 14 024 | 546 | 1 784 | 389 | 312 | 77 | 16 743 | 14 960 | 14 336 | 546 | 1 861 |
| Own revenue | | | Title II
  Administration | 6 446 | 5 591 | 3 306 | 2 285 | 855 | 1 477 | 1 307 | 170 | 7 923 | 7 068 | 4 613 | 2 285 | 1 025 |
| Other revenue | | | Title III
  Operating activities | 14 057 | 9 300 | 5 824 | 3 477 | 4 756 | 3 818 | 2 003 | 1 815 | 17 875 | 13 118 | 7 827 | 3 477 | 6 571 |
| Total | 36 857 | 31 537 | Total | 36 857 | 29 462 | 23 154 | 6 308 | 7 395 | 5 684 | 3 622 | 2 062 | 42 541 | 35 146 | 26 776 | 6 308 | 9 457 |

(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

Appropriations carried over from the previous financial year (1)

Appropriations for the financial year and carried over from the previous financial year

entered

committed

paid

carried over

cancelled

available

paid

cancelled

available

committed

paid

carried over

cancelled

Community subsidies

36 857

31 537

Title I

Staff

16 354

14 571

14 024

546

1 784

389

312

77

16 743

14 960

14 336

546

1 861

Own revenue

Title II

Administration

6 446

5 591

3 306

2 285

855

1 477

1 307

170

7 923

7 068

4 613

2 285

1 025

Other revenue

Title III

Operating activities

14 057

9 300

5 824

3 477

4 756

3 818

2 003

1 815

17 875

13 118

7 827

3 477

6 571

Total

36 857

31 537

Total

36 857

29 462

23 154

6 308

7 395

5 684

3 622

2 062

42 541

35 146

26 776

6 308

9 457

Table 3

Revenue and expenditure account for the financial years 2005 and 2004

| (1000 euro) |
| --- |
| | 2005 | 2004 |
| Operating revenue |
| Community subsidies | 27 405 | 20 591 |
| Other subsidies/revenue | 0 | 0 |
| Total (a) | 27 405 | 20 591 |
| Operating expenditure |
| Staff | 13 012 | 7 564 |
| Administration | 6 436 | 5 788 |
| Operating activities | 8 718 | 6 431 |
| Total (b) | 28 166 | 19 783 |
| Operating result (c = a — b) | – 761 | 808 |
| Other income (d) | 0 | 0 |
| Other charges (e) | –7 | –33 |
| Economic result (f = c + d + e) | – 768 | 775 |

(1000 euro)

2005

2004

Operating revenue

Community subsidies

27 405

20 591

Other subsidies/revenue

0

0

Total (a)

27 405

20 591

Operating expenditure

Staff

13 012

7 564

Administration

6 436

5 788

Operating activities

8 718

6 431

Total (b)

28 166

19 783

Operating result (c = a — b)

– 761

808

Other income (d)

0

0

Other charges (e)

–7

–33

Economic result (f = c + d + e)

– 768

775

Table 4

Balance sheet at 31 December 2005 and 2004

| (1000 euro) |
| --- |
| | 2005 | 2004 |
| Assets |
| Fixed assets | 1 588 | 1 071 |
| Short-term receivables | 299 | 5 025 |
| Cash accounts | 10 879 | 3 201 |
| Total | 12 766 | 9 297 |
| Liabilities |
| Results accumulated from previous financial years | 4 452 | 3 677 |
| Economic result of the year | – 768 | 775 |
| Short-term debts | 9 082 | 4 845 |
| Total | 12 766 | 9 297 |

(1000 euro)

2005

2004

Assets

Fixed assets

1 588

1 071

Short-term receivables

299

5 025

Cash accounts

10 879

3 201

Total

12 766

9 297

Liabilities

Results accumulated from previous financial years

4 452

3 677

Economic result of the year

– 768

775

Short-term debts

9 082

4 845

Total

12 766

9 297

---

(1)  In the table showing the overall implementation of the budget which it publishes in its own annual report the Authority does not include implementation of non-automatic carry-overs of appropriations.

---

THE AUTHORITY'S REPLIES

| 7. | In 2006, EFSA has reinforced its budget monitoring by organising regular reviews, a mid-year budget execution analysis and forecasts and will continue to strengthen the planning of its activities aiming at reaching a full budget execution. |
| --- | --- |

7.

In 2006, EFSA has reinforced its budget monitoring by organising regular reviews, a mid-year budget execution analysis and forecasts and will continue to strengthen the planning of its activities aiming at reaching a full budget execution.

| 8. | Considering that by amending EFSA 2005 Establishment Plan, the Budgetary Authority reduced a certain number of posts which were already occupied in 2004, the Authority had to meet its legal obligation towards those agents and maintain their posts in conformity with its Financial Regulation and modify this Plan. |
| --- | --- |

8.

Considering that by amending EFSA 2005 Establishment Plan, the Budgetary Authority reduced a certain number of posts which were already occupied in 2004, the Authority had to meet its legal obligation towards those agents and maintain their posts in conformity with its Financial Regulation and modify this Plan.

| 9. | Activity Based Management will be progressively implemented by EFSA as it is an essential tool to perform its activities efficiently. In its 2007 work program, the Authority will clearly define its priorities within the framework of its founding Regulation and other applicable EU legislation and will describe the key initiatives to meet them. Further improvements on performance indicators and other management tools will also be undertaken in order to measure the results of its activities. |
| --- | --- |

9.

Activity Based Management will be progressively implemented by EFSA as it is an essential tool to perform its activities efficiently. In its 2007 work program, the Authority will clearly define its priorities within the framework of its founding Regulation and other applicable EU legislation and will describe the key initiatives to meet them. Further improvements on performance indicators and other management tools will also be undertaken in order to measure the results of its activities.

| 10. | EFSA has adopted internal control standards in July 2005 and continues its efforts in order to fully implement them. In addition, the Authority plans to perform a risk analysis for 2007. |
| --- | --- |

10.

EFSA has adopted internal control standards in July 2005 and continues its efforts in order to fully implement them. In addition, the Authority plans to perform a risk analysis for 2007.

| 11. | As a priority in 2006, the Authority has taken measures in order to strengthen the controls around recruitment procedures and reinforce their transparency and will continue its efforts to guarantee observance of the rules in force. |
| --- | --- |

11.

As a priority in 2006, the Authority has taken measures in order to strengthen the controls around recruitment procedures and reinforce their transparency and will continue its efforts to guarantee observance of the rules in force.

| 12. | The Authority will ensure that internal control systems of the procurement procedures are strengthened in order to fully comply with the rules in force. In 2006, specific trainings on tendering procedures will be organised and better systems implemented to reinforce the controls on such procedures have been set-up. |
| --- | --- |

12.

The Authority will ensure that internal control systems of the procurement procedures are strengthened in order to fully comply with the rules in force. In 2006, specific trainings on tendering procedures will be organised and better systems implemented to reinforce the controls on such procedures have been set-up.

| 13. | The Authority has brought to the attention of the Budgetary Authorities and the Commission the cost of EFSA premises and will keep them informed on the progress of its final seat project. |
| --- | --- |

13.

The Authority has brought to the attention of the Budgetary Authorities and the Commission the cost of EFSA premises and will keep them informed on the progress of its final seat project.

---

| 19.12.2006 | EN | Official Journal of the European Union | C 312/48 |
| --- | --- | --- | --- |

19.12.2006

EN

Official Journal of the European Union

C 312/48

---

REPORT

on the annual accounts of the Translation Centre for the Bodies of the European Union for the financial year 2005 together with the Centre's replies

(2006/C 312/09)

CONTENTS

| 1-2 | INTRODUCTION |
| --- | --- |

1-2

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

3-6

| 7-10 | OBSERVATIONS |
| --- | --- |

7-10

Tables 1 to 4

The Centre's replies

INTRODUCTION

| 1. | The Translation Centre for the Bodies of the European Union (hereinafter the Centre) was established by Council Regulation (EC) No 2965/94 (1). The Centre's role is to provide the EU bodies, and any other EU institutions and bodies which call upon its services, with the translation services necessary for their activities. |
| --- | --- |

1.

The Translation Centre for the Bodies of the European Union (hereinafter the Centre) was established by Council Regulation (EC) No 2965/94 (1). The Centre's role is to provide the EU bodies, and any other EU institutions and bodies which call upon its services, with the translation services necessary for their activities.

| 2. | Table 1 summarises the Centre's competences and activities. Key information from the financial statements drawn up by the Centre for the financial year 2005 is presented in Tables 2, 3 and 4. |
| --- | --- |

2.

Table 1 summarises the Centre's competences and activities. Key information from the financial statements drawn up by the Centre for the financial year 2005 is presented in Tables 2, 3 and 4.

STATEMENT OF ASSURANCE

| 3. | This Statement 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 Centre's accounts, as required by Article 248 of the Treaty establishing the European Community. |
| --- | --- |

3.

This Statement 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 Centre's accounts, as required by Article 248 of the Treaty establishing the European Community.

| 4. | The Centre's accounts for the financial year ended 31 December 2005 (3) were drawn up by its Director, pursuant to Article 14 of Regulation (EC) No 2965/94, and sent to the Court, which is required to give its opinion on their reliability and on the legality and regularity of the underlying transactions. |
| --- | --- |

4.

The Centre's accounts for the financial year ended 31 December 2005 (3) were drawn up by its Director, pursuant to Article 14 of Regulation (EC) No 2965/94, and sent to the Court, which is required to give its opinion on their reliability and on the legality and regularity of the underlying transactions.

| 5. | The Court conducted an audit in accordance with its policies and standards, which are based on international auditing standards that have been adapted to the Community context. The audit was planned and performed to obtain reasonable assurance that the accounts are reliable and the underlying transactions are legal and regular. |
| --- | --- |

5.

The Court conducted an audit in accordance with its policies and standards, which are based on international auditing standards that have been adapted to the Community context. The audit was planned and performed to obtain reasonable assurance that the accounts are reliable and the underlying transactions are legal and regular.

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

6.

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

Reliability of the accountsThe Centre's accounts for the financial year ended 31 December 2005 are, in all material respects, reliable.Legality and regularity of the underlying transactionsThe transactions underlying the Centre'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. | For the financial year 2005, the overall rate of implementation for commitment appropriations was over 90 % and the same was true for payment appropriations. Nevertheless, under-utilisation was noted with regard to expenditure on administration (Title II), less than 75 % of the appropriations for which were committed, and 24 % of commitments were carried over. Furthermore, for the same expenditure, more than 50 % of the total commitments carried over from the previous year were cancelled. Such a situation indicates a qualitative weakness in the programming of administrative expenditure. |
| --- | --- |

7.

For the financial year 2005, the overall rate of implementation for commitment appropriations was over 90 % and the same was true for payment appropriations. Nevertheless, under-utilisation was noted with regard to expenditure on administration (Title II), less than 75 % of the appropriations for which were committed, and 24 % of commitments were carried over. Furthermore, for the same expenditure, more than 50 % of the total commitments carried over from the previous year were cancelled. Such a situation indicates a qualitative weakness in the programming of administrative expenditure.

| 8. | The appropriations for freelance translators' fees of seven million euro, more than a quarter of the budget, are committed in the form of several global commitments. These commitments, as such, are subject to ex ante verification and subsequently give rise to specific commitments to many individual service-providers. However, these specific commitments, for amounts which may not be negligible, are not subject to ex ante verification. In view of the associated risks, these specific commitments should also be subject to ex ante verification. |
| --- | --- |

8.

The appropriations for freelance translators' fees of seven million euro, more than a quarter of the budget, are committed in the form of several global commitments. These commitments, as such, are subject to ex ante verification and subsequently give rise to specific commitments to many individual service-providers. However, these specific commitments, for amounts which may not be negligible, are not subject to ex ante verification. In view of the associated risks, these specific commitments should also be subject to ex ante verification.

| 9. | The Centre is responsible for administering and developing a database (IATE) in conjunction with the EU Institutions, which meet part of the costs. The agreement on the division of costs associated with IATE says nothing about intellectual property rights. This omission must be rectified so that account can be taken of its value in the assets of the Institutions concerned. |
| --- | --- |

9.

The Centre is responsible for administering and developing a database (IATE) in conjunction with the EU Institutions, which meet part of the costs. The agreement on the division of costs associated with IATE says nothing about intellectual property rights. This omission must be rectified so that account can be taken of its value in the assets of the Institutions concerned.

| 10. | In its Annual Report on the Centre for the financial year 2004, the Court made an observation concerning the long-standing conflict between the Commission and the Centre about the Centre's payment of the employer's portion of pension contributions for its staff. The Court reiterates its call for this conflict to be settled as soon as possible. |
| --- | --- |

10.

In its Annual Report on the Centre for the financial year 2004, the Court made an observation concerning the long-standing conflict between the Commission and the Centre about the Centre's payment of the employer's portion of pension contributions for its staff. The Court reiterates its call for this conflict to be settled as soon as possible.

This report was adopted by the Court of Auditors in Luxembourg at its meeting of 28 September 2006.

For the Court of Auditors

Hubert WEBER

President

---

(1)  OJ L 314, 7.12.1994, p. 1.

1

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

2

(3)  These accounts were drawn up on 6 July 2006 and received by the Court on 11 July 2006.

3

---

Table 1

Translation Centre for the Bodies of the European Union (Luxembourg)

| Areas of Community competence | Competences of the Centre
  Council Regulation (EC) No 2965/94 of 28 November 1994 | Governance | Resources made available to the Centre in 2005

  (2004) | Products and services provided during the financial year 2005

  (2004) |
| --- | --- | --- | --- | --- |
| The representatives of the Member States' governments adopted by mutual agreement a declaration concerning the creation, under the aegis of the Commission's translation departments in Luxembourg, of a Translation Centre for the bodies of the Union, which would provide the necessary translation services for the operation of the bodies and services whose seats were established by the Decision of 29 October 1993.

  (Council Decision taken on the basis of Article 235 of the Treaty) | Objectives:

  to provide the necessary translation services for the operation of the following bodies:






  — | the European Environment Agency, |

Areas of Community competence

Competences of the Centre

Council Regulation (EC) No 2965/94 of 28 November 1994

Governance

Resources made available to the Centre in 2005

(2004)

Products and services provided during the financial year 2005

(2004)

The representatives of the Member States' governments adopted by mutual agreement a declaration concerning the creation, under the aegis of the Commission's translation departments in Luxembourg, of a Translation Centre for the bodies of the Union, which would provide the necessary translation services for the operation of the bodies and services whose seats were established by the Decision of 29 October 1993.

(Council Decision taken on the basis of Article 235 of the Treaty)

Objectives:

to provide the necessary translation services for the operation of the following bodies:

—

the European Environment Agency,

| — | the European Training Foundation, |
| --- | --- |

—

the European Training Foundation,

| — | the European Monitoring Centre for Drugs and Drug Addiction, |
| --- | --- |

—

the European Monitoring Centre for Drugs and Drug Addiction,

| — | the European Medicines Agency, |
| --- | --- |

—

the European Medicines Agency,

| — | the European Agency for Health and Safety at Work, |
| --- | --- |

—

the European Agency for Health and Safety at Work,

| — | the Office for Harmonisation in the Internal Market (Trademarks and Designs), |
| --- | --- |

—

the Office for Harmonisation in the Internal Market (Trademarks and Designs),

| — | the European Police Office (Europol) and the Europol Drugs Unit. |
| --- | --- |

—

the European Police Office (Europol) and the Europol Drugs Unit.

The bodies set up by the Council other than the above may use the Centre's services. The institutions and bodies of the European Union which already have their own Translation Services may, if need be, call upon the Centre's services on a voluntary basis. The Centre plays a full part in the work of the Interinstitutional Translation Committee.

Tasks:

| — | to make arrangements for cooperation with the bodies and institutions, |
| --- | --- |

—

to make arrangements for cooperation with the bodies and institutions,

| — | to participate in the work of the Interinstitutional Translation Committee. |
| --- | --- |

—

to participate in the work of the Interinstitutional Translation Committee.

1. Management Board

Composition

| — | one representative per Member State, |
| --- | --- |

—

one representative per Member State,

| — | two representatives from the Commission, |
| --- | --- |

—

two representatives from the Commission,

| — | one representative from each body or institution calling upon the Centre's services. |
| --- | --- |

—

one representative from each body or institution calling upon the Centre's services.

Task

Adopts the Centre's annual work programme and annual report.

2. Director

Appointed by the Management Board on a proposal from the Commission.

3. External audit

Court of Auditors.

4. Internal audit

Commission's internal auditor.

5. Discharge authority

Parliament on a recommendation from the Council.

Final budget

27,9 million euro (29,8 million euro)

Staff as at 31 December 181 (181) posts listed in the establishment plan

posts occupied: 163 (150)

+12 (15) other posts

Total staff: 175 (165)

Assigned to:

| — | operational duties: 114 (119) |
| --- | --- |

—

operational duties: 114 (119)

| — | administrative duties: 57 (52) |
| --- | --- |

—

administrative duties: 57 (52)

| — | mixed duties: 4(4) |
| --- | --- |

—

mixed duties: 4(4)

Number of pages translated

505 438 (377 999)

Number of pages by languages

| — | official languages: 501 475 (373 270) |
| --- | --- |

—

official languages: 501 475 (373 270)

| — | other languages: 3 963 (4 729) |
| --- | --- |

—

other languages: 3 963 (4 729)

Number of pages per customer

| — | bodies: 496 665 (366 055) |
| --- | --- |

—

bodies: 496 665 (366 055)

| — | institutions: 8 773 (11 944) |
| --- | --- |

—

institutions: 8 773 (11 944)

Number of pages translated freelance: 226 822 (146 342)

Source: Information supplied by the Centre.

TRANSLATION CENTRE FOR THE BODIES OF THE EUROPEAN UNION

Source: Data compiled by the Centre. These tables summarise the data supplied by the Centre in its annual accounts.

Table 2

Implementation of the budget for the financial year 2005

| (1000 euro) |
| --- |
| Revenue | Expenditure |
| Source of revenue | Revenue entered in the final budget for the financial year | Revenue received | Allocation of expenditure | Final budget appropriations | Appropriations carried over from the previous financial year | Appropriations for the financial year and carried over from the previous financial year |
| entered | committed | paid | carried over | cancel-led | available | paid | cancelled | available | committed | paid | carried over | cancelled |
| Own revenue | 24 166 | 30 356 | Title I
  Staff | 14 117 | 13 410 | 13 305 | 106 | 707 | 122 | 100 | 22 | 14 239 | 13 532 | 13 404 | 106 | 729 |
| Other revenue | 0 | 94 | Title II
  Administration | 4 235 | 3 112 | 2 358 | 755 | 1 123 | 642 | 583 | 59 | 4 877 | 3 754 | 2 941 | 755 | 1 181 |
| Interest | 300 | 428 | Title III
  Operating activities | 7 645 | 7 309 | 6 018 | 1 291 | 336 | 990 | 987 | 2 | 8 634 | 8 298 | 7 005 | 1 291 | 338 |
| Balance for the previous financial year | 3 497 | 0 | Title X
  Reserve | 1 966 | 0 | 0 | 0 | 1 966 | 0 | 0 | 0 | 1 966 | 0 | 0 | 0 | 1 966 |
| Total | 27 963 | 30 879 | Total | 27 963 | 23 831 | 21 681 | 2 152 | 4 132 | 1 754 | 1 670 | 83 | 29 716 | 25 584 | 23 350 | 2 152 | 4 214 |

(1000 euro)

Revenue

Expenditure

Source of revenue

Revenue entered in the final budget for the financial year

Revenue received

Allocation of expenditure

Final budget appropriations

Appropriations carried over from the previous financial year

Appropriations for the financial year and carried over from the previous financial year

entered

committed

paid

carried over

cancel-led

available

paid

cancelled

available

committed

paid

carried over

cancelled

Own revenue

24 166

30 356

Title I

Staff

14 117

13 410

13 305

106

707

122

100

22

14 239

13 532

13 404

106

729

Other revenue

0

94

Title II

Administration

4 235

3 112

2 358

755

1 123

642

583

59

4 877

3 754

2 941

755

1 181

Interest

300

428

Title III

Operating activities

7 645

7 309

6 018

1 291

336

990

987

2

8 634

8 298

7 005

1 291

338

Balance for the previous financial year

3 497

0

Title X

Reserve

1 966

0

0

0

1 966

0

0

0

1 966

0

0

0

1 966

Total

27 963

30 879

Total

27 963

23 831

21 681

2 152

4 132

1 754

1 670

83

29 716

25 584

23 350

2 152

4 214

Table 3

Revenue and expenditure account for the financial years 2005 and 2004

| (1000 euro) |
| --- |
| | 2005 | 2004 |
| Operating revenue |
| Community subsidies | 0 | 0 |
| Other subsidies/revenue | 30 780 | 23 573 |
| Total (a) | 30 780 | 23 573 |
| Operating expenditure |
| Staff | 13 200 | 11 929 |
| Administration | 3 547 | 2 734 |
| Operating activities | 7 397 | 5 919 |
| Provisions | 1 849 | 1 410 |
| Total (b) | 25 993 | 21 992 |
| Operating result (c = a — b) | 4 787 | 1 581 |
| Other income (d) | 429 | 2 618 |
| Other charges (e) | –4 | –7 |
| Economic result (f = c + d + e) | 5 212 | 4 192 |

(1000 euro)

2005

2004

Operating revenue

Community subsidies

0

0

Other subsidies/revenue

30 780

23 573

Total (a)

30 780

23 573

Operating expenditure

Staff

13 200

11 929

Administration

3 547

2 734

Operating activities

7 397

5 919

Provisions

1 849

1 410

Total (b)

25 993

21 992

Operating result (c = a — b)

4 787

1 581

Other income (d)

429

2 618

Other charges (e)

–4

–7

Economic result (f = c + d + e)

5 212

4 192

Table 4

Balance sheet at 31 December 2005 and 2004

| (1000 euro) |
| --- |
| | 2005 | 2004 |
| Assets |
| Fixed Assets | 699 | 895 |
| Stock | 279 | 0 |
| Receivables | 6 184 | 6 368 |
| Cash accounts | 27 392 | 19 903 |
| Total | 34 554 | 27 166 |
| Liabilities |
| Accumulated surplus/deficit | 18 594 | 14 403 |
| Economic result for the year | 5 212 | 4 192 |
| Long-term liabilities | 9 330 | 7 481 |
| Current liabilities | 1 418 | 1 090 |
| Total | 34 554 | 27 166 |

(1000 euro)

2005

2004

Assets

Fixed Assets

699

895

Stock

279

0

Receivables

6 184

6 368

Cash accounts

27 392

19 903

Total

34 554

27 166

Liabilities

Accumulated surplus/deficit

18 594

14 403

Economic result for the year

5 212

4 192

Long-term liabilities

9 330

7 481

Current liabilities

1 418

1 090

Total

34 554

27 166

---

THE CENTRE'S REPLIES

| 7. | The lack of regularity in requests for translation, together with a marked increase in the field of Community trade marks, created a climate of instability throughout 2005, forcing the Centre to postpone a number of projects provided for under Title 2. |
| --- | --- |

7.

The lack of regularity in requests for translation, together with a marked increase in the field of Community trade marks, created a climate of instability throughout 2005, forcing the Centre to postpone a number of projects provided for under Title 2.

| 8. | The Centre will take the Court's observation into account when migrating from SI2 to ABAC (this migration is scheduled for 2007) to establish new financial circuits. |
| --- | --- |

8.

The Centre will take the Court's observation into account when migrating from SI2 to ABAC (this migration is scheduled for 2007) to establish new financial circuits.

| 9. | The Centre will ask the Interinstitutional Committee for Translation and Interpretation to resolve the issue of ownership of the IATE database. |
| --- | --- |

9.

The Centre will ask the Interinstitutional Committee for Translation and Interpretation to resolve the issue of ownership of the IATE database.

| 10. | At its meeting of 22 March 2006, the Management Board of the Centre adopted an opinion in which it reiterated that it was ‘well aware of the importance of settling this matter once and for all and calls on the European Commission to agree, together with the Centre, to an arbitration procedure in order to reach a settlement’. The Centre will keep the Court apprised of any developments in this matter. |
| --- | --- |

10.

At its meeting of 22 March 2006, the Management Board of the Centre adopted an opinion in which it reiterated that it was ‘well aware of the importance of settling this matter once and for all and calls on the European Commission to agree, together with the Centre, to an arbitration procedure in order to reach a settlement’. The Centre will keep the Court apprised of any developments in this matter.

---

| 19.12.2006 | EN | Official Journal of the European Union | C 312/54 |
| --- | --- | --- | --- |

19.12.2006

EN

Official Journal of the European Union

C 312/54

---

REPORT

on the annual accounts of the European Centre for Disease Prevention and Control for the financial year 2005 together with the Centre's replies

(2006/C 312/10)

CONTENTS

| 1-2 | INTRODUCTION |
| --- | --- |

1-2

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

3-6

| 7-12 | OBSERVATIONS |
| --- | --- |

7-12

Tables 1 to 4

The Centre's replies

INTRODUCTION

| 1. | The European Centre for Disease Prevention and Control (hereinafter the Centre) was created by Regulation (EC) No 851/2004 of the European Parliament and of the Council of 21 April 2004 (1). Its main tasks are to collect and disseminate data on the prevention and control of human disease and to provide scientific opinions on this subject. It is also required to coordinate the European networking of bodies operating in this field. The Centre became autonomous as of the second half of 2005 (2). |
| --- | --- |

1.

The European Centre for Disease Prevention and Control (hereinafter the Centre) was created by Regulation (EC) No 851/2004 of the European Parliament and of the Council of 21 April 2004 (1). Its main tasks are to collect and disseminate data on the prevention and control of human disease and to provide scientific opinions on this subject. It is also required to coordinate the European networking of bodies operating in this field. The Centre became autonomous as of the second half of 2005 (2).

| 2. | Table 1 summarises the Centre's competences and activities. Key information from the financial statements drawn up by the Centre for the financial year 2005 is presented in Tables 2, 3 and 4. |
| --- | --- |

2.

Table 1 summarises the Centre's competences and activities. Key information from the financial statements drawn up by the Centre for the financial year 2005 is presented in Tables 2, 3 and 4.

STATEMENT OF ASSURANCE

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

3.

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

| 4. | The Centre's accounts for the financial year ended 31 December 2005 (4) were drawn up by its Director, pursuant to Article 23 of Regulation (EC) No 851/2004, 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. |
| --- | --- |

4.

The Centre's accounts for the financial year ended 31 December 2005 (4) were drawn up by its Director, pursuant to Article 23 of Regulation (EC) No 851/2004, 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.

| 5. | The Court conducted an audit in accordance with its policies and standards, which are based on international auditing standards that have been adapted to the Community context. The audit was planned and performed to obtain reasonable assurance that the accounts are reliable and the underlying transactions are legal and regular. |
| --- | --- |

5.

The Court conducted an audit in accordance with its policies and standards, which are based on international auditing standards that have been adapted to the Community context. The audit was planned and performed to obtain reasonable assurance that the accounts are reliable and the underlying transactions are legal and regular.

| 6. | The Court has thus obtained a reasonable basis for the statement expressed below. |
| --- | --- |

6.

The Court has thus obtained a reasonable basis for the statement expressed below.

Reliability of the accountsThe Centre's accounts for the financial year ended 31 December 2005 are, in all material respects, reliable.Legality and regularity of the underlying transactionsThe transactions underlying the Centre'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 implementation of the budget for the financial year 2005 was marked by a low rate of commitment (84 %) and a substantial rate of carry-over (35 % overall and almost 90 % for operating expenditure). This situation was in part due to problems inherent in the Centre's start-up period. In future, the Centre should be vigilant concerning the risk of mobilising resources unnecessarily, in particular by ensuring strict programming of its activities. |
| --- | --- |

7.

The implementation of the budget for the financial year 2005 was marked by a low rate of commitment (84 %) and a substantial rate of carry-over (35 % overall and almost 90 % for operating expenditure). This situation was in part due to problems inherent in the Centre's start-up period. In future, the Centre should be vigilant concerning the risk of mobilising resources unnecessarily, in particular by ensuring strict programming of its activities.

| 8. | The Court noted that no activity-based management had been brought in, despite the Centre's financial regulation making provision for its introduction, on the lines of that applied to the general budget, with a view to improving the monitoring of performance. In this context, achieving the Centre's aims should not mean merely carrying out a series of tasks. It should rather be seen as contributing to the goals laid down in its basic Regulation. The Centre's work programme should, in principle, express this contribution in operational and measurable terms. |
| --- | --- |

8.

The Court noted that no activity-based management had been brought in, despite the Centre's financial regulation making provision for its introduction, on the lines of that applied to the general budget, with a view to improving the monitoring of performance. In this context, achieving the Centre's aims should not mean merely carrying out a series of tasks. It should rather be seen as contributing to the goals laid down in its basic Regulation. The Centre's work programme should, in principle, express this contribution in operational and measurable terms.

| 9. | Requests to the Commission for the payment of subsidies should be justified by a forecast of cash needs (5). The Centre had no system for producing such forecasts. |
| --- | --- |

9.

Requests to the Commission for the payment of subsidies should be justified by a forecast of cash needs (5). The Centre had no system for producing such forecasts.

| 10. | The Centre's financial regulation stipulates that the authorising officer should make a budgetary commitment before entering into a legal commitment vis-à-vis third parties. However, no budgetary commitments were made for the Centre's expenditure in 2005 prior to the legal commitment. During the same period, all the Centre's payments were made by the accounting officer without the authorising officer having issued any payment orders (6). |
| --- | --- |

10.

The Centre's financial regulation stipulates that the authorising officer should make a budgetary commitment before entering into a legal commitment vis-à-vis third parties. However, no budgetary commitments were made for the Centre's expenditure in 2005 prior to the legal commitment. During the same period, all the Centre's payments were made by the accounting officer without the authorising officer having issued any payment orders (6).

| 11. | Contrary to the provisions of the regulations, the Centre's accounts were not kept by the double-entry method during 2005, thus creating risks of errors. |
| --- | --- |

11.

Contrary to the provisions of the regulations, the Centre's accounts were not kept by the double-entry method during 2005, thus creating risks of errors.

| 12. | There were shortcomings in the documentation of the Centre's staff selection procedures (lack of formalisation of decisions on the appointment and composition of selection boards, lack of final report by selection boards on their work). During this period when it is recruiting its core staff, the Centre should be particularly attentive to strict application of its selection procedures. |
| --- | --- |

12.

There were shortcomings in the documentation of the Centre's staff selection procedures (lack of formalisation of decisions on the appointment and composition of selection boards, lack of final report by selection boards on their work). During this period when it is recruiting its core staff, the Centre should be particularly attentive to strict application of its selection procedures.

This report was adopted by the Court of Auditors in Luxembourg at its meeting of 28 September 2006.

For the Court of Auditors

Hubert WEBER

President

---

(1)  OJ L 142, 30.4.2004, p. 1.

1

(2)  The task of paying the salaries continued to be carried out by the Commission on the basis of a delegation of powers issued by the Director.

2

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

3

(4)  These accounts were drawn up on 29 June 2006 and received by the Court on 4 July 2006.

4

(5)  Article 50 of the Centre's financial regulation.

5

(6)  Article 66 of the Centre's financial regulation.

6

---

Table 1

European Centre for Disease Prevention and Control

| Area of Community competence deriving from the Treaty | Competences of the Centre as specified in Council Regulation (EC) No 851/2004 | Governance | Resources available to the Centre | Products and services supplied in 2005 |
| --- | --- | --- | --- | --- |
| A high level of human health protection shall be ensured in the definition and implementation of all Community policies and activities. Community action, which shall complement national policies, shall be directed towards improving public health, preventing human illness and diseases, and obviating sources of danger to human health. Such action shall cover the fight against the major health scourges, by promoting research into their causes, their transmission and their prevention, as well as health information and education.

  (Article 152 of the Treaty) | Objectives:

  Strengthen Europe's defences against infectious diseases; specifically, to identify, assess and communicate current and emerging threats to human health from communicable diseases.
  Therefore the Centre shall operate dedicated surveillance networks, provide scientific opinions, operate the early warning and response system and provide scientific and technical assistance and training. | Tasks:







  — | operate dedicated disease surveillance networks and enhance networking activities. The Centre has a specific role in data collection, validation, analysis and dissemination, |

Area of Community competence deriving from the Treaty

Competences of the Centre as specified in Council Regulation (EC) No 851/2004

Governance

Resources available to the Centre

Products and services supplied in 2005

A high level of human health protection shall be ensured in the definition and implementation of all Community policies and activities. Community action, which shall complement national policies, shall be directed towards improving public health, preventing human illness and diseases, and obviating sources of danger to human health. Such action shall cover the fight against the major health scourges, by promoting research into their causes, their transmission and their prevention, as well as health information and education.

(Article 152 of the Treaty)

Objectives:

Strengthen Europe's defences against infectious diseases; specifically, to identify, assess and communicate current and emerging threats to human health from communicable diseases.

Therefore the Centre shall operate dedicated surveillance networks, provide scientific opinions, operate the early warning and response system and provide scientific and technical assistance and training.

Tasks:

—

operate dedicated disease surveillance networks and enhance networking activities. The Centre has a specific role in data collection, validation, analysis and dissemination,

| — | provide authoritative expert advice and scientific opinions and studies in communicable diseases, |
| --- | --- |

—

provide authoritative expert advice and scientific opinions and studies in communicable diseases,

| — | operate the Early Warning and Response System (EWRS). Develop procedures for identifying emerging health threats, |
| --- | --- |

—

operate the Early Warning and Response System (EWRS). Develop procedures for identifying emerging health threats,

| — | strengthen Member States' capacity in preparedness planning and in training, |
| --- | --- |

—

strengthen Member States' capacity in preparedness planning and in training,

| — | inform the general public and interested parties of its work. |
| --- | --- |

—

inform the general public and interested parties of its work.

1. Management Board

One member designated by each Member State, two members designated by the European Parliament and three representatives of the Commission.

The Board adopts the Centre's annual programme and budget and follows their implementation.

2. Director

Appointed by the Management Board on the basis of a list of candidates proposed by the Commission.

3. Advisory Forum

A representative of each Member State and three non-voting representatives of the Commission.

The Forum is to assure the scientific excellence of the work and the independence of the activities and opinions of the Centre.

4. External Audit

Court of Auditors.

5. Discharge authority

Parliament on a recommendation from the Council.

2005 final budget

4,85 million euro, including a Community subsidy of 98 %

Staff numbers

Posts in the establishment plan: 29

posts occupied: 22

+20 other posts.

Total staff: 42

assigned to the following duties:

operational: 17

administrative: 25

| — | Protocols developed for evaluating networks, |
| --- | --- |

—

Protocols developed for evaluating networks,

| — | planning document prepared for future strategy for surveillance activities in Europe, |
| --- | --- |

—

planning document prepared for future strategy for surveillance activities in Europe,

| — | scientific panels established for all 6 disease groups listed in Decision 2119/98/EC, |
| --- | --- |

—

scientific panels established for all 6 disease groups listed in Decision 2119/98/EC,

| — | expert opinions and guidelines prepared on avian influenza, |
| --- | --- |

—

expert opinions and guidelines prepared on avian influenza,

| — | responsibility for the EWRS (102 public health events reported and reviewed), |
| --- | --- |

—

responsibility for the EWRS (102 public health events reported and reviewed),

| — | protocols and guidelines developed for mobilising outbreak assistance teams, |
| --- | --- |

—

protocols and guidelines developed for mobilising outbreak assistance teams,

| — | 2 outbreak assistance missions, |
| --- | --- |

—

2 outbreak assistance missions,

| — | procedure for coordination of public health threats defined and in place (Commission, Member States, WHO), |
| --- | --- |

—

procedure for coordination of public health threats defined and in place (Commission, Member States, WHO),

| — | 21 weekly epidemiological reports disseminated through the Eurosurveillance journal. |
| --- | --- |

—

21 weekly epidemiological reports disseminated through the Eurosurveillance journal.

Source: Information supplied by the Centre.

EUROPEAN CENTRE FOR DISEASE PREVENTION AND CONTROL

Source: Centre data — These tables summarise the data supplied by the Centre in its annual accounts.

Table 2

Implementation of the budget for the financial year 2005

| (1000 euro) |
| --- |
| Revenue | Expenditure |
| Source of revenue | Revenue entered in the final budget for the financial year | Revenue received | Allocation of expenditure | Final budget appropriations |
| entered | committed | paid | carried over | cancelled |
| Community subsidies (1) | 4 852 | 3 402 | Title I
  Staff | 2 531 | 2 282 | 1 895 | 362 | 274 |
| | | | Title II
  Administration | 1 238 | 1 174 | 638 | 535 | 65 |
| | | | Title III
  Operating activities | 1 083 | 610 | 70 | 541 | 472 |
| Total | 4 852 | 3 402 | Total | 4 852 | 4 066 | 2 603 | 1 438 | 811 |

(1000 euro)

Revenue

Expenditure

Source of revenue

Revenue entered in the final budget for the financial year

Revenue received

Allocation of expenditure

Final budget appropriations

entered

committed

paid

carried over

cancelled

Community subsidies (1)

4 852

3 402

Title I

Staff

2 531

2 282

1 895

362

274

Title II

Administration

1 238

1 174

638

535

65

Title III

Operating activities

1 083

610

70

541

472

Total

4 852

3 402

Total

4 852

4 066

2 603

1 438

811

Table 3

Revenue and expenditure account for the financial year 2005

| (1000 euro) |
| --- |
| | 2005 |
| Operating revenue |
| Community subsidies | 2 646 |
| Other subsidies/revenue | 0 |
| Total (a) | 2 646 |
| Operating expenditure |
| Staff | 171 |
| Administration | 1 185 |
| Operating activities | 326 |
| Total (b) | 1 682 |
| Operating result (c = a – b) | 964 |
| Other income (d) | 0 |
| Other charges (e) | 11 |
| Economic result (f = c + d – e) | 953 |

(1000 euro)

2005

Operating revenue

Community subsidies

2 646

Other subsidies/revenue

0

Total (a)

2 646

Operating expenditure

Staff

171

Administration

1 185

Operating activities

326

Total (b)

1 682

Operating result (c = a – b)

964

Other income (d)

0

Other charges (e)

11

Economic result (f = c + d – e)

953

Table 4

Balance sheet at 31 December 2005

| (1000 euro) |
| --- |
| | 2005 |
| Assets |
| Fixed assets | 245 |
| Receivables | 320 |
| Cash and cash equivalents | 2 059 |
| Total | 2 624 |
| Liabilities |
| Accumulated surplus/deficit | 0 |
| Economic result for the year | 953 |
| Current liabilities | 1 671 |
| Total | 2 624 |

(1000 euro)

2005

Assets

Fixed assets

245

Receivables

320

Cash and cash equivalents

2 059

Total

2 624

Liabilities

Accumulated surplus/deficit

0

Economic result for the year

953

Current liabilities

1 671

Total

2 624

---

(1)  Including the appropriations managed by the Commission.

---

THE CENTRE'S REPLIES

| 7. | The main causes of the relatively low budget execution and the high percentage of the carry-over appropriations were related to the start-up phase of the Centre. ECDC is rapidly progressing and is focusing on its planning for the best possible use of the funds allocated to it during 2006. |
| --- | --- |

7.

The main causes of the relatively low budget execution and the high percentage of the carry-over appropriations were related to the start-up phase of the Centre. ECDC is rapidly progressing and is focusing on its planning for the best possible use of the funds allocated to it during 2006.

| 8. | The basis for an activity based planning has been established in the second half of 2005. During 2006, the Centre is gradually putting in place the necessary reporting systems and processes to assure reliable and transparent activity based reporting. |
| --- | --- |

8.

The basis for an activity based planning has been established in the second half of 2005. During 2006, the Centre is gradually putting in place the necessary reporting systems and processes to assure reliable and transparent activity based reporting.

| 9. | The Centre did not have an adequate system for monitoring cash needs during 2005 for reasons relating to its start up phase. As of February 2006, basic projections on cash needs were introduced, and as the Centre further develops its reporting systems the cash flow projections will be further refined. |
| --- | --- |

9.

The Centre did not have an adequate system for monitoring cash needs during 2005 for reasons relating to its start up phase. As of February 2006, basic projections on cash needs were introduced, and as the Centre further develops its reporting systems the cash flow projections will be further refined.

| 10. | The situation described by the Court was initially caused by an absence of relevant ICT tools at the disposal of the Centre. The setting up of a financial system was prepared for in 2005 and it became fully operational in early 2006. No automated payment orders could be produced in 2005 due to the absence of ICT budget system. Nevertheless payments were only processed after the assurance that relevant information, authorisations and signatures were in place. From 2006 onwards, payment orders are systematically processed and approved for to all payments. |
| --- | --- |

10.

The situation described by the Court was initially caused by an absence of relevant ICT tools at the disposal of the Centre. The setting up of a financial system was prepared for in 2005 and it became fully operational in early 2006. No automated payment orders could be produced in 2005 due to the absence of ICT budget system. Nevertheless payments were only processed after the assurance that relevant information, authorisations and signatures were in place. From 2006 onwards, payment orders are systematically processed and approved for to all payments.

| 11. | In the start up period of 2005, ECDC did not dispose of a computerised accounting system. During 2006 the Centre installed all the necessary software and is now operating a fully computerised accounting system. |
| --- | --- |

11.

In the start up period of 2005, ECDC did not dispose of a computerised accounting system. During 2006 the Centre installed all the necessary software and is now operating a fully computerised accounting system.

| 12. | Following the Court's remark, the recruitment processes are now more extensively documented and consistently formalised. A strong Human Resources recruitment capacity has been prioritised as to assure that, in the build up phase of the Centre, the recruitment process is transparent and rigorous. |
| --- | --- |

12.

Following the Court's remark, the recruitment processes are now more extensively documented and consistently formalised. A strong Human Resources recruitment capacity has been prioritised as to assure that, in the build up phase of the Centre, the recruitment process is transparent and rigorous.

---

| 19.12.2006 | EN | Official Journal of the European Union | C 312/60 |
| --- | --- | --- | --- |

19.12.2006

EN

Official Journal of the European Union

C 312/60

---

REPORT

on the annual accounts of the European Centre for the Development of Vocational Training for the financial year 2005 together with the Centre's replies

(2006/C 312/11)

CONTENTS

| 1-2 | INTRODUCTION |
| --- | --- |

1-2

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

3-6

| 7-14 | OBSERVATIONS |
| --- | --- |

7-14

Tables 1 to 4

The Centre's replies

INTRODUCTION

| 1. | The European Centre for the Development of Vocational Training (hereinafter the Centre) was established by Council Regulation (EEC) No 337/75 (1). Its core mandate is to serve the development of vocational training at Community level. In order to achieve this objective, it has the task of compiling and disseminating documentation on vocational training systems. |
| --- | --- |

1.

The European Centre for the Development of Vocational Training (hereinafter the Centre) was established by Council Regulation (EEC) No 337/75 (1). Its core mandate is to serve the development of vocational training at Community level. In order to achieve this objective, it has the task of compiling and disseminating documentation on vocational training systems.

| 2. | The Centre's competences and activities are summarised in Table 1. Key information from the financial statements drawn up by the Centre for the financial year 2005 is presented in Tables 2, 3 and 4. |
| --- | --- |

2.

The Centre's competences and activities are summarised in Table 1. Key information from the financial statements drawn up by the Centre for the financial year 2005 is presented in Tables 2, 3 and 4.

STATEMENT OF ASSURANCE

| 3. | This statement 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 Centre's accounts, as required by Article 248 of the Treaty establishing the European Community. |
| --- | --- |

3.

This statement 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 Centre's accounts, as required by Article 248 of the Treaty establishing the European Community.

| 4. | The Centre's accounts for the financial year ended 31 December 2005 (3) were drawn up by its Director, pursuant to Article 12 a of Regulation (EEC) No 337/75, and sent to the Court, which is required to provide a statement concerning their reliability and the legality and regularity of the underlying transactions. |
| --- | --- |

4.

The Centre's accounts for the financial year ended 31 December 2005 (3) were drawn up by its Director, pursuant to Article 12 a of Regulation (EEC) No 337/75, and sent to the Court, which is required to provide a statement concerning their reliability and the legality and regularity of the underlying transactions.

| 5. | The Court conducted its audit in accordance with its policies and standards, which are based on international auditing standards that have been adapted to the Community context. The audit was planned and performed to obtain reasonable assurance that the accounts are reliable and the underlying transactions are legal and regular. |
| --- | --- |

5.

The Court conducted its audit in accordance with its policies and standards, which are based on international auditing standards that have been adapted to the Community context. The audit was planned and performed to obtain reasonable assurance that the accounts are reliable and the underlying transactions are legal and regular.

| 6. | The Court has thus obtained a reasonable basis for the following statement: |
| --- | --- |

6.

The Court has thus obtained a reasonable basis for the following statement:

Reliability of the accountsThe Centre's accounts for the financial year ended 31 December 2005 are, in all material respects, reliable.Legality and regularity of the underlying transactionsSubject to the reservation concerning the situation described in paragraph 13, the transactions underlying the Centre's annual accounts, taken as a whole, are legal and regular.The Court would also like to draw attention to the observation in paragraph 11.

OBSERVATIONS

| 7. | The Centre's budget for the financial year 2005 shows a utilisation rate of 90 % of commitment appropriations and approximately 85 % of payment appropriations. However, the appropriations for operating activities were under-utilised (cancellations of 15 % of commitment appropriations, 20 % of payment appropriations and 15 % of appropriations carried over), in particular after the reorganisation of the procedures for awarding contracts. The Centre must fine-tune the programming of its work and ensure that it is monitored more rigorously. In this connection, the Court notes that activity-based management has not been introduced, even though the Centre's financial regulation provides for this form of management with a view to improved performance monitoring. |
| --- | --- |

7.

The Centre's budget for the financial year 2005 shows a utilisation rate of 90 % of commitment appropriations and approximately 85 % of payment appropriations. However, the appropriations for operating activities were under-utilised (cancellations of 15 % of commitment appropriations, 20 % of payment appropriations and 15 % of appropriations carried over), in particular after the reorganisation of the procedures for awarding contracts. The Centre must fine-tune the programming of its work and ensure that it is monitored more rigorously. In this connection, the Court notes that activity-based management has not been introduced, even though the Centre's financial regulation provides for this form of management with a view to improved performance monitoring.

| 8. | The accounting software (FIBUS) used by the Centre does not allow expired commitments to be blocked and the procedure for the electronic signing of payment orders does not comply with the provisions currently in force. Operations cannot easily be traced within the FIBUS system. The Centre should remedy the shortcomings identified and consider replacing its present accounting software as soon as possible with the new system proposed by the Commission for the Agencies. |
| --- | --- |

8.

The accounting software (FIBUS) used by the Centre does not allow expired commitments to be blocked and the procedure for the electronic signing of payment orders does not comply with the provisions currently in force. Operations cannot easily be traced within the FIBUS system. The Centre should remedy the shortcomings identified and consider replacing its present accounting software as soon as possible with the new system proposed by the Commission for the Agencies.

| 9. | Some of the accounting officer's duties are performed by departments for which the authorising officer is responsible. Closure adjustments of around 700 000 euro were thus made in the accounts on the initiative of the authorising departments, but these departments did not document them. Application of the principle of the segregation of the duties of authorising officer and accounting officer would have prevented such a situation. |
| --- | --- |

9.

Some of the accounting officer's duties are performed by departments for which the authorising officer is responsible. Closure adjustments of around 700 000 euro were thus made in the accounts on the initiative of the authorising departments, but these departments did not document them. Application of the principle of the segregation of the duties of authorising officer and accounting officer would have prevented such a situation.

| 10. | The Centre has neither made a risk analysis to date, nor defined the nature and frequency of ex post checks, and there are no descriptions of the management procedures and internal control systems. In 2005, the accounting officer had still not validated the financial information systems. |
| --- | --- |

10.

The Centre has neither made a risk analysis to date, nor defined the nature and frequency of ex post checks, and there are no descriptions of the management procedures and internal control systems. In 2005, the accounting officer had still not validated the financial information systems.

| 11. | In 2000, the Centre set up an appeals committee to deal with staff complaints. In one case, this committee, acting beyond its powers, granted allowances that were not envisaged in the rules in force. In order to ensure that there are no more cases of this kind in future, the Director should reserve the power to revise and, if necessary, revoke these decisions. |
| --- | --- |

11.

In 2000, the Centre set up an appeals committee to deal with staff complaints. In one case, this committee, acting beyond its powers, granted allowances that were not envisaged in the rules in force. In order to ensure that there are no more cases of this kind in future, the Director should reserve the power to revise and, if necessary, revoke these decisions.

| 12. | In 2005, an important management post was filled via an internal selection procedure when an external procedure would have provided a wider range of candidates. Actually only one candidate participated in the selection and was appointed to the post. Moreover, two of the criteria adopted for the evaluation of applications (4) were not applied strictly enough to ensure the quality of the selection in question. The Court reiterates the observation made in its previous annual report on the need for the Centre to tighten up its recruitment procedures. |
| --- | --- |

12.

In 2005, an important management post was filled via an internal selection procedure when an external procedure would have provided a wider range of candidates. Actually only one candidate participated in the selection and was appointed to the post. Moreover, two of the criteria adopted for the evaluation of applications (4) were not applied strictly enough to ensure the quality of the selection in question. The Court reiterates the observation made in its previous annual report on the need for the Centre to tighten up its recruitment procedures.

| 13. | The Court examined six contracts that were concluded in the financial year 2005. All but one were affected by irregularities (5). In two of the cases examined, the competition rules had not been observed (6). The Court takes note of the steps taken by the Centre during the last quarter of 2005 to remedy the weaknesses found in its organisation and tender procedures. |
| --- | --- |

13.

The Court examined six contracts that were concluded in the financial year 2005. All but one were affected by irregularities (5). In two of the cases examined, the competition rules had not been observed (6). The Court takes note of the steps taken by the Centre during the last quarter of 2005 to remedy the weaknesses found in its organisation and tender procedures.

| 14. | The Centre has set up 17 internet and intranet sites using different types of technology. The management of these sites and the IT systems supporting them is fragmented, i.e. some systems are managed by the IT department, others by operational departments and others, lastly, by consultants. This fragmentation engenders technical risks and excessive costs. |
| --- | --- |

14.

The Centre has set up 17 internet and intranet sites using different types of technology. The management of these sites and the IT systems supporting them is fragmented, i.e. some systems are managed by the IT department, others by operational departments and others, lastly, by consultants. This fragmentation engenders technical risks and excessive costs.

This report was adopted by the Court of Auditors in Luxembourg at its meeting of 28 September 2006.

For the Court of Auditors

Hubert WEBER

President

---

(1)  OJ L 39, 13.2.1975, p. 1.

1

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

2

(3)  These accounts were drawn up on 30 June 2006 and received by the Court on 4 July 2006.

3

(4)  Studies (Philosophy and international relations) unrelated to the post and professional experience directly related to the post 50 % less than was required in the vacancy notice; in addition, the professional experience of the person appointed was only partly related to the tasks to be performed.

4

(5)  Failure to justify the chosen procedure or say why the tenderers invited to submit tenders were selected, plus inadequate documentation thereof.

5

(6)  Translation services (376 000 euro) and IT services (146 000 euro).

6

---

Table 1

European Centre for the Development of Vocational Training (Thessaloniki)

| Areas of Community competence deriving from the Treaty | Competence of the Centre as specified in Articles 2 and 3 of Council Regulation (EEC) No 337/75 of 10 February 1975 | Governance | Resources made available to the Centre in 2005 (2004) | Products and services supplied in 2005 (2004) |
| --- | --- | --- | --- | --- |
| The Community implements a vocational training policy to support and supplement the action of the Member States as regards the content and organisation of vocational training.
  Action aims to:






  — | facilitate adaptation to industrial changes, in particular through vocational training and retraining, |

Areas of Community competence deriving from the Treaty

Competence of the Centre as specified in Articles 2 and 3 of Council Regulation (EEC) No 337/75 of 10 February 1975

Governance

Resources made available to the Centre in 2005 (2004)

Products and services supplied in 2005 (2004)

The Community implements a vocational training policy to support and supplement the action of the Member States as regards the content and organisation of vocational training.

Action aims to:

—

facilitate adaptation to industrial changes, in particular through vocational training and retraining,

| — | improve initial and continuing vocational training in order to facilitate vocational integration and reintegration into the labour market, |
| --- | --- |

—

improve initial and continuing vocational training in order to facilitate vocational integration and reintegration into the labour market,

| — | facilitate access to vocational training and encourage mobility of instructors and trainees and particularly young people, |
| --- | --- |

—

facilitate access to vocational training and encourage mobility of instructors and trainees and particularly young people,

| — | stimulate cooperation on training between educational or vocational training establishments and firms, |
| --- | --- |

—

stimulate cooperation on training between educational or vocational training establishments and firms,

| — | develop exchanges of information and experience on issues common to the training systems of the Member States. |
| --- | --- |

—

develop exchanges of information and experience on issues common to the training systems of the Member States.

(From Article 150 of the Treaty)

The Centre's mandate:

In its capacity as a European Union reference centre for vocational training and education, Cedefop provides political decision-makers, researchers and professionals with information aimed at developing a clearer understanding of current trends that will thus enable them to reach more soundly based decisions with a view to future action.

Cedefop assists the European Commission in promoting and developing vocational training and education at Community level.

Tasks:

| — | to compile selected documentation and produce a data analysis, |
| --- | --- |

—

to compile selected documentation and produce a data analysis,

| — | to contribute to research development and coordination, |
| --- | --- |

—

to contribute to research development and coordination,

| — | to utilise and disseminate relevant information, |
| --- | --- |

—

to utilise and disseminate relevant information,

| — | to encourage and support a concerted approach to matters relating to the development of vocational training, |
| --- | --- |

—

to encourage and support a concerted approach to matters relating to the development of vocational training,

| — | to provide a forum for a broad and diverse public. |
| --- | --- |

—

to provide a forum for a broad and diverse public.

1. Management Board

Per Member State:

| — | one Government representative, |
| --- | --- |

—

one Government representative,

| — | one representative of employers' organisations, |
| --- | --- |

—

one representative of employers' organisations,

| — | one representative of employees' organisations. |
| --- | --- |

—

one representative of employees' organisations.

Three members representing the Commission, and observers from the associated countries (Norway and Iceland).

2. Director

Appointed by the Commission from a list of candidates submitted by the Management Board; carries out the decisions of the Management Board and is responsible for the day-to-day administration of the Centre.

3. Internal control

Commission's Internal Audit Service.

4. External audit

European Court of Auditors.

5. Discharge

Parliament, on the Council's recommendation.

Final budget:

17,1 million euro (16,6 million euro)

Community subsidy: 96 % (99 %)

Staff numbers at 31 December:

Number of posts in establishment plan: 91 (88)

Posts occupied: 85 (81)

Other staff: contract staff, seconded national experts.

Total staff: 123

assigned to the following duties:

operational: 85

administrative: 33

mixed: 5.

Conferences and seminars: 90 (90) with an average of 24 participants.

Studies: 26 (2004: 55 (not comparable)). Studies on the same project with various contributors (under different contracts) have been counted as one study.

Projects: 29 (2 of which administrative) plus 20 virtual communities (1 of which administrative) (2004: 38 (not comparable)).

Participation in:

Maastricht follow-up, Education and Training 2010 programme, Leonardo da Vinci programme, social partners' joint action framework, Advisory Committee for Vocational Training, Directors-General for Vocational Training, Education and Training 2010 Coordination Group.

Publications: 60 (62).

3 issues of Cedefop info (3),

| 1. | 4 issues of the European journal on vocational training (3). |
| --- | --- |

1.

4 issues of the European journal on vocational training (3).

| 2. | Circulation of documents: | 8 582 (10 293) on request, |
| --- | --- | --- |

2.

Circulation of documents:

8 582 (10 293) on request,

| | 2 462 (2 034) subscriptions to the European journal, |
| --- | --- |

2 462 (2 034) subscriptions to the European journal,

| | 7 493 (8 460) subscriptions to Cedefop info. |
| --- | --- |

7 493 (8 460) subscriptions to Cedefop info.

Electronic publications:

| — | 3 160 (2 427) subscriptions to ETV newsletter, |
| --- | --- |

—

3 160 (2 427) subscriptions to ETV newsletter,

| — | 60 440 (53 167) registered ETV users, |
| --- | --- |

—

60 440 (53 167) registered ETV users,

| — | 3 366 490 (3 306 920) ETV page views. |
| --- | --- |

—

3 366 490 (3 306 920) ETV page views.

| 3. | 7 553 registered members in the virtual communities.
  762 (730) participants in the study visits programme. |
| --- | --- |

3.

7 553 registered members in the virtual communities.

762 (730) participants in the study visits programme.

Source: Information supplied by the Centre.

EUROPEAN CENTRE FOR THE DEVELOPMENT OF VOCATIONAL TRAINING

Source: Information supplied by the Centre — These tables summarise the data provided by the Centre in its annual accounts.

Table 2

Implementation of the budget for the financial year 2005

| (1000 euro) |
| --- |
| Revenue | Expenditure |
| Source of revenue | Revenue entered in the final budget for the financial year | Revenue received | Allocation of expenditure | Final budget appropriations for the financial year | Appropriations carried over from the previous financial year | Appropriations for the financial year and carried over from the previous financial year |
| entered | committed | paid | carried over | cancelled | available | paid | cancelled | available | committed | paid | carried over | cancelled |
| Community subsidies | 16 418 | 16 418 | Title I
  Staff (NDA) | 9 468 | 9 075 | 8 862 | 213 | 393 | 466 | 395 | 72 | 9 934 | 9 541 | 9 257 | 213 | 465 |
| Title II
  Administration (NDA) | 1 372 | 1 158 | 865 | 334 | 214 | 542 | 503 | 39 | 1 914 | 1 700 | 1 368 | 334 | 253 |
| Other revenue | 140 | 36 | Title III
  Operating activities (DA) | | | | | | | | | | | | | |
| — CA | 5 578 | 4 774 | 0 | 71 | 804 | 0 | 0 | 0 | 5 578 | 4 774 | 0 | 71 | 804 |
| — PA | 5 718 | | 4 585 | 0 | 1 133 | 0 | 0 | 0 | 5 718 | 0 | 4 585 | 0 | 1 133 |
| Assigned revenue (Phare) | 535 | 535 | Assigned revenue (Phare and others) | 535 | 283 | 68 | 467 | 0 | 312 | 175 | 93 | 847 | 596 | 243 | 467 | 93 |
| Total | 17 093 | 16 989 | Total CA | 16 953 | 15 290 | 0 | 1 085 | 1 411 | 1 320 | 0 | 204 | 18 273 | 16 611 | 0 | 1 085 | 1 615 |
| Total PA | 17 093 | 0 | 14 381 | 1 014 | 1 740 | 1 320 | 1 073 | 204 | 18 413 | 0 | 15 543 | 1 014 | 1 944 |
| NDA | : | non-differentiated appropriations (commitment appropriations are equal in amount to payment appropriations). |
| DA | : | differentiated appropriations (commitment appropriations may differ in amount from payment appropriations). |
| CA | : | commitment appropriations in the context of differentiated appropriations. |
| PA | : | payment appropriations in the context of differentiated appropriations. |

(1000 euro)

Revenue

Expenditure

Source of revenue

Revenue entered in the final budget for the financial year

Revenue received

Allocation of expenditure

Final budget appropriations for the financial year

Appropriations carried over from the previous financial year

Appropriations for the financial year and carried over from the previous financial year

entered

committed

paid

carried over

cancelled

available

paid

cancelled

available

committed

paid

carried over

cancelled

Community subsidies

16 418

16 418

Title I

Staff (NDA)

9 468

9 075

8 862

213

393

466

395

72

9 934

9 541

9 257

213

465

Title II

Administration (NDA)

1 372

1 158

865

334

214

542

503

39

1 914

1 700

1 368

334

253

Other revenue

140

36

Title III

Operating activities (DA)

— CA

5 578

4 774

0

71

804

0

0

0

5 578

4 774

0

71

804

— PA

5 718

4 585

0

1 133

0

0

0

5 718

0

4 585

0

1 133

Assigned revenue (Phare)

535

535

Assigned revenue (Phare and others)

535

283

68

467

0

312

175

93

847

596

243

467

93

Total

17 093

16 989

Total CA

16 953

15 290

0

1 085

1 411

1 320

0

204

18 273

16 611

0

1 085

1 615

Total PA

17 093

0

14 381

1 014

1 740

1 320

1 073

204

18 413

0

15 543

1 014

1 944

NDA

:

non-differentiated appropriations (commitment appropriations are equal in amount to payment appropriations).

DA

:

differentiated appropriations (commitment appropriations may differ in amount from payment appropriations).

CA

:

commitment appropriations in the context of differentiated appropriations.

PA

:

payment appropriations in the context of differentiated appropriations.

Table 3

Revenue and expenditure account for the financial year 2005 (1)

| (1000 euro) |
| --- |
| | 2005 |
| Operating revenue |
| Community subsidies | 15 020 |
| Other subsidies/revenue | 290 |
| Total (a) | 15 310 |
| Operating expenditure |
| Staff | 9 091 |
| Administration | 1 962 |
| Operating activities | 5 021 |
| Total (b) | 16 074 |
| Operating result (c = a – b) | – 764 |
| Other income (d) | 0 |
| Other expenses (e) | 4 |
| Economic result (f = c + d – e) | – 768 |

(1000 euro)

2005

Operating revenue

Community subsidies

15 020

Other subsidies/revenue

290

Total (a)

15 310

Operating expenditure

Staff

9 091

Administration

1 962

Operating activities

5 021

Total (b)

16 074

Operating result (c = a – b)

– 764

Other income (d)

0

Other expenses (e)

4

Economic result (f = c + d – e)

– 768

Table 4

Balance sheet at 31 December 2005 and 2004 (2)

| (1000 euro) |
| --- |
| | 2005 | 2004 |
| Assets |
| Fixed assets | 5 359 | 5 702 |
| Receivables | 369 | 182 |
| Cash and cash equivalents | 3 344 | 1 948 |
| Total | 9 072 | 7 832 |
| Liabilities |
| Cumulative outturn for previous financial years | 5 856 | 5 856 |
| Result for the year | – 768 | 0 |
| Current liabilities | 3 984 | 1 976 |
| Total | 9 072 | 7 832 |

(1000 euro)

2005

2004

Assets

Fixed assets

5 359

5 702

Receivables

369

182

Cash and cash equivalents

3 344

1 948

Total

9 072

7 832

Liabilities

Cumulative outturn for previous financial years

5 856

5 856

Result for the year

– 768

0

Current liabilities

3 984

1 976

Total

9 072

7 832

---

(1)  The data for the financial year 2004 are not presented because, following the change in accounting methods, they cannot be compared with the data for the financial year 2005.

(2)  The data for the financial year 2004 have been restated for the purpose of comparison with those for the financial year 2005.

---

THE CENTRE'S REPLIES

| 7. | The Centre takes note of the Court's observation. In the last quarter of 2005, the Centre took prompt measures to ensure the strict application of the rules governing procurement procedures, and it strictly limited the use of negotiated procedures. Those measures and the weaknesses of the procurement service affected the level of budget execution. While ensuring the regularity of procedures, the Centre has progressed in improving its planning and will introduce activity based budgeting. |
| --- | --- |

7.

The Centre takes note of the Court's observation. In the last quarter of 2005, the Centre took prompt measures to ensure the strict application of the rules governing procurement procedures, and it strictly limited the use of negotiated procedures. Those measures and the weaknesses of the procurement service affected the level of budget execution. While ensuring the regularity of procedures, the Centre has progressed in improving its planning and will introduce activity based budgeting.

| 8. | The Centre is considering replacing Fibus with the software proposed by the Commission. However, ABAC, is still in the pilot phase. The Centre is following developments closely through its participation in ICTAC, CSS and the agencies' accountants network. |
| --- | --- |

8.

The Centre is considering replacing Fibus with the software proposed by the Commission. However, ABAC, is still in the pilot phase. The Centre is following developments closely through its participation in ICTAC, CSS and the agencies' accountants network.

| 9. | Steps have already been taken to reorganise the Finance/Procurement Service and this will also ensure the clearer separation of functions called for by the Court. The Centre is aware that the correct procedure is for the authorising officers (by delegation) to propose the adjustments in question to the accountant. The Centre is working to improve the situation. |
| --- | --- |

9.

Steps have already been taken to reorganise the Finance/Procurement Service and this will also ensure the clearer separation of functions called for by the Court. The Centre is aware that the correct procedure is for the authorising officers (by delegation) to propose the adjustments in question to the accountant. The Centre is working to improve the situation.

| 10. | Validation of parts of the financial system took place at the beginning of 2006. The documentation of procedures will need to be completed before further progress can be made on the validation of the system. The Centre will implement regular risk assessment. This will be supported by the Internal Auditor whose recruitment is currently under way. |
| --- | --- |

10.

Validation of parts of the financial system took place at the beginning of 2006. The documentation of procedures will need to be completed before further progress can be made on the validation of the system. The Centre will implement regular risk assessment. This will be supported by the Internal Auditor whose recruitment is currently under way.

| 11. | The Centre takes note of the remarks of the Court. The appeals committee has been established by the Governing Board as an organ distinct from the director for dealing with complaints to increase objectivity. This has been a valuable tool and increased the trust of staff. The Centre considers that it is correct in law and that it is a reasonable use of the power to designate appointing authorities which belongs to every organisation under the staff regulation. The Court refers to one individual case: the Appeals Committee gave a fully reasoned decision in which is explained that it was awarding a sum ex aequo et bono. This is frequently done by the Community Courts and by the Appointing Authorities of the other institutions. However, the Centre has requested an official opinion and assessment by the legal services of the European Commission. |
| --- | --- |

11.

The Centre takes note of the remarks of the Court. The appeals committee has been established by the Governing Board as an organ distinct from the director for dealing with complaints to increase objectivity. This has been a valuable tool and increased the trust of staff. The Centre considers that it is correct in law and that it is a reasonable use of the power to designate appointing authorities which belongs to every organisation under the staff regulation. The Court refers to one individual case: the Appeals Committee gave a fully reasoned decision in which is explained that it was awarding a sum ex aequo et bono. This is frequently done by the Community Courts and by the Appointing Authorities of the other institutions. However, the Centre has requested an official opinion and assessment by the legal services of the European Commission.

| 12. | The recruitment had been started in June 2005 with an internal phase in compliance with the Statute. In order to foster competition, the Centre has decided end of 2005 to favour the running of internal/interistitutional and external phases, to increase publicity and to apply EPSO standards for selection. Concerning the two criteria mentioned, the jurisprudence states that it is the responsibility of the jury to appreciate if criteria correspond to the level requested. |
| --- | --- |

12.

The recruitment had been started in June 2005 with an internal phase in compliance with the Statute. In order to foster competition, the Centre has decided end of 2005 to favour the running of internal/interistitutional and external phases, to increase publicity and to apply EPSO standards for selection. Concerning the two criteria mentioned, the jurisprudence states that it is the responsibility of the jury to appreciate if criteria correspond to the level requested.

| 13. | The Centre has revised and tightened up all procurement and award procedures and taken the necessary measures to adapt the organisation. Checks safeguard that procedures are conducted in a regular way. Specific measures such as suspension of payments and special audits have been taken in regard to former procedures and contracts which have been criticised by the Court or the IAS to contain risks. |
| --- | --- |

13.

The Centre has revised and tightened up all procurement and award procedures and taken the necessary measures to adapt the organisation. Checks safeguard that procedures are conducted in a regular way. Specific measures such as suspension of payments and special audits have been taken in regard to former procedures and contracts which have been criticised by the Court or the IAS to contain risks.

| 14. | The Centre agrees with the remarks of the Court. In order to solve the problem the Centre has already reorganised the respective services. |
| --- | --- |

14.

The Centre agrees with the remarks of the Court. In order to solve the problem the Centre has already reorganised the respective services.

---

| 19.12.2006 | EN | Official Journal of the European Union | C 312/67 |
| --- | --- | --- | --- |

19.12.2006

EN

Official Journal of the European Union

C 312/67

---

REPORT

on the annual accounts of Eurojust for the financial year 2005 together with Eurojust's replies

(2006/C 312/12)

CONTENTS

| 1-2 | INTRODUCTION |
| --- | --- |

1-2

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

3-6

| 7-11 | OBSERVATIONS |
| --- | --- |

7-11

Tables 1 to 4

Eurojust's replies

INTRODUCTION

| 1. | Eurojust was set up by Council Decision 2002/187/JHA (1) with a view to stepping up the fight against serious organised crime. Its objective is to improve the coordination of investigations and prosecutions covering the territories of several Member States of the European Union, as well as that of non-member States. |
| --- | --- |

1.

Eurojust was set up by Council Decision 2002/187/JHA (1) with a view to stepping up the fight against serious organised crime. Its objective is to improve the coordination of investigations and prosecutions covering the territories of several Member States of the European Union, as well as that of non-member States.

| 2. | Table 1 summarises Eurojust's competences and activities. Key information from the financial statements drawn up by Eurojust for the financial year 2005 is presented in Tables 2, 3 and 4. |
| --- | --- |

2.

Table 1 summarises Eurojust's competences and activities. Key information from the financial statements drawn up by Eurojust for the financial year 2005 is presented in Tables 2, 3 and 4.

STATEMENT OF ASSURANCE

| 3. | This statement is addressed to the European Parliament and the Council pursuant to Article 36 of Decision 2002/187/JHA. |
| --- | --- |

3.

This statement is addressed to the European Parliament and the Council pursuant to Article 36 of Decision 2002/187/JHA.

| 4. | Eurojust's accounts for the financial year ended 31 December 2005 (2) were drawn up by its Administrative Director, pursuant to Article 36 of Decision 2002/187/JHA, 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. |
| --- | --- |

4.

Eurojust's accounts for the financial year ended 31 December 2005 (2) were drawn up by its Administrative Director, pursuant to Article 36 of Decision 2002/187/JHA, 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.

| 5. | The Court conducted an audit in accordance with its policies and standards, which are based on international auditing standards that have been adapted to the 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. |
| --- | --- |

5.

The Court conducted an audit in accordance with its policies and standards, which are based on international auditing standards that have been adapted to the 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.

| 6. | The Court has thus obtained a reasonable basis for the statement expressed below. |
| --- | --- |

6.

The Court has thus obtained a reasonable basis for the statement expressed below.

Reliability of the accountsEurojust's accounts for the financial year ended 31 December 2005 are, in all material respects, reliable.Legality and regularity of the underlying transactionsThe transactions underlying Eurojust'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. | A review of the implementation of the budget showed that 90 % of the appropriations granted for the year had been committed. The overall rate of payment against the year's commitments was 84 %. Nevertheless, the utilisation rate of appropriations for operating activities (Title III) was low: only 80 % of the commitment appropriations for the financial year were used and a third of commitments had to be carried over. For the same expenditure, more than 15 % of the commitments carried over to the year had to be cancelled. These findings suggest that a qualitative improvement in the programming of operating expenditure is needed in order to avoid mobilising resources unnecessarily. The College decided to authorise a non-automatic carryover of appropriations for a total of 285 484 euro. Such carryovers are permitted only if most of the stages preparatory to the act of commitment have been completed before the end of the financial year and this was not the case. |
| --- | --- |

7.

A review of the implementation of the budget showed that 90 % of the appropriations granted for the year had been committed. The overall rate of payment against the year's commitments was 84 %. Nevertheless, the utilisation rate of appropriations for operating activities (Title III) was low: only 80 % of the commitment appropriations for the financial year were used and a third of commitments had to be carried over. For the same expenditure, more than 15 % of the commitments carried over to the year had to be cancelled. These findings suggest that a qualitative improvement in the programming of operating expenditure is needed in order to avoid mobilising resources unnecessarily. The College decided to authorise a non-automatic carryover of appropriations for a total of 285 484 euro. Such carryovers are permitted only if most of the stages preparatory to the act of commitment have been completed before the end of the financial year and this was not the case.

| 8. | Eurojust still does not have its own financial regulation and, this being the case, has continued to apply the framework financial regulation for the Community bodies (3). At the end of 2005, the Commission had still not issued an opinion concerning the draft regulation submitted by Eurojust in May of the same year. |
| --- | --- |

8.

Eurojust still does not have its own financial regulation and, this being the case, has continued to apply the framework financial regulation for the Community bodies (3). At the end of 2005, the Commission had still not issued an opinion concerning the draft regulation submitted by Eurojust in May of the same year.

| 9. | The inventory of fixed assets is managed using a spreadsheet, which does not allow the integrity of the data to be guaranteed. Assets cannot always be traced because information about where they are located is lacking. No exhaustive physical inventory of fixed assets has been made since Eurojust was set up. |
| --- | --- |

9.

The inventory of fixed assets is managed using a spreadsheet, which does not allow the integrity of the data to be guaranteed. Assets cannot always be traced because information about where they are located is lacking. No exhaustive physical inventory of fixed assets has been made since Eurojust was set up.

| 10. | The Management Board has still not adopted any internal control standards. Formalisation of operating and accounting procedures is mostly lacking. In 2005, the checklists describing the checks to be carried out on budgetary commitments relating to important operating procedures (procurement, and recruitment) were insufficiently developed. |
| --- | --- |

10.

The Management Board has still not adopted any internal control standards. Formalisation of operating and accounting procedures is mostly lacking. In 2005, the checklists describing the checks to be carried out on budgetary commitments relating to important operating procedures (procurement, and recruitment) were insufficiently developed.

| 11. | Some anomalies were found in respect of public procurement procedures and contract management, in particular the absence of guidelines on the weightings applied to award criteria, and confusion between the selection criteria and the criteria for awarding contracts. Framework contracts have, moreover, exceeded the timelimits laid down in the regulatory provisions. |
| --- | --- |

11.

Some anomalies were found in respect of public procurement procedures and contract management, in particular the absence of guidelines on the weightings applied to award criteria, and confusion between the selection criteria and the criteria for awarding contracts. Framework contracts have, moreover, exceeded the timelimits laid down in the regulatory provisions.

This report was adopted by the Court of Auditors in Luxembourg at its meeting of 28 September 2006.

For the Court of Auditors

Hubert WEBER

President

---

(1)  Decision of 28 February 2002 setting up Eurojust (OJ L 63, 6.3.2002, p. 1).

1

(2)  These accounts were drawn up on 29 June 2006 and received by the Court on 7 July 2006.

2

(3)  Commission Regulation (EC, Euratom) No 2343/2002 of 23 December 2002 (OJ L 357, 31.12.2002, p. 72).

3

---

Table 1

Eurojust (The Hague)

| Areas of competence stipulated in the Treaty on European Union | Eurojust's competences as defined in the Council Decision of 28 February 2002 (2002/187/JHA) | Governance | Resources made available to Eurojust 2005 (2004) | Activities and services provided 2005 (2004) |
| --- | --- | --- | --- | --- |
| Third pillar body created by Council Decision.
  The Union's objective is to provide citizens with a high level of safety within an area of freedom, security and justice.
  The Council encourages cooperation through Eurojust by enabling it to facilitate proper coordination between the Member States' national prosecuting authorities. (Articles 29 and 31)
  Eurojust's main areas of responsibility are the same as Europol's, i.e. the fight against terrorism, organised crime, in particular drug-trafficking, illegal immigration, illicit vehicle trafficking, trafficking in human beings, the counterfeiting of money, trafficking in radioactive substances, computer crime, acts detrimental to the Union's financial interests and money-laundering. | Objectives:


  Article 3


  Eurojust Decision







  — | to stimulate and improve the coordination, between the competent national authorities of the Member States, of investigations and prosecutions, |

Areas of competence stipulated in the Treaty on European Union

Eurojust's competences as defined in the Council Decision of 28 February 2002 (2002/187/JHA)

Governance

Resources made available to Eurojust 2005 (2004)

Activities and services provided 2005 (2004)

Third pillar body created by Council Decision.

The Union's objective is to provide citizens with a high level of safety within an area of freedom, security and justice.

The Council encourages cooperation through Eurojust by enabling it to facilitate proper coordination between the Member States' national prosecuting authorities. (Articles 29 and 31)

Eurojust's main areas of responsibility are the same as Europol's, i.e. the fight against terrorism, organised crime, in particular drug-trafficking, illegal immigration, illicit vehicle trafficking, trafficking in human beings, the counterfeiting of money, trafficking in radioactive substances, computer crime, acts detrimental to the Union's financial interests and money-laundering.

Objectives:

Article 3

Eurojust Decision

—

to stimulate and improve the coordination, between the competent national authorities of the Member States, of investigations and prosecutions,

| — | to improve cooperation, in particular by facilitating the exchange of information, mutual legal assistance and the implementation of extradition requests, |
| --- | --- |

—

to improve cooperation, in particular by facilitating the exchange of information, mutual legal assistance and the implementation of extradition requests,

| — | to support the competent authorities of the Member States in order to render their investigations and prosecutions more effective, |
| --- | --- |

—

to support the competent authorities of the Member States in order to render their investigations and prosecutions more effective,

| — | to provide support with procedures involving a Member State and a non-member State, |
| --- | --- |

—

to provide support with procedures involving a Member State and a non-member State,

| — | to provide support with procedures involving a Member State and the Community. |
| --- | --- |

—

to provide support with procedures involving a Member State and the Community.

Tasks:

Articles 5, 6 and 7

Eurojust Decision

To organise cooperation between the various national legal systems, Eurojust acts:

| — | through its national members, or |
| --- | --- |

—

through its national members, or

| — | as a College. |
| --- | --- |

—

as a College.

If the competent authorities of the Member State concerned decide not to respond to the requests which Eurojust has issued as a College, they notify Eurojust of their reasons.

1. The College is responsible for the organisation and operation of Eurojust.

2. The College is composed of national members seconded by each Member State in accordance with its legal system, being prosecutors, judges or police officers of equivalent competence.

3. The College elects its President from among the national members.

4. The Joint Supervisory Body checks the processing of personal data.

5. The Administrative Director is unanimously appointed by the College.

6. External audit: the European Court of Auditors.

7. Discharge is given by the Parliament on the Council's recommendation.

2005 final budget:

13 million euro (9,3 million euro)

Community subsidy: 100 % (100 %)

Staff as at 31 December 2005:

87 (76) posts listed in the establishment plan,

posts occupied: 70 (52)

+15 (13) other staff (2 seconded national experts, local staff, 13 employment-agency staff)

Total staff: 85 (65)

assigned to the following duties:

operational tasks: 31 (27)

administrative tasks: 41 (26)

mixed tasks 13 (12)

Number of meetings:

73 (52)

Bilateral cases:

462 (272)

Multilateral cases:

124 (109)

Total number of cases:

588 (381)

Fraud:

14 % (20 %)

Drug-trafficking:

16 % (20 %)

Terrorism:

3 % (7 %)

Murder:

5 % (7 %)

Smuggling:

not available %

Trafficking in human beings:

4 % (4 %)

Money-laundering:

6 % (7 %)

Other:

52 % (35 %)

Source: Information supplied by Eurojust.

EUROJUST

Source: Eurojust data — These tables summarise the data supplied by Eurojust in its annual accounts.

Table 2

Implementation of the budget for the financial year 2005

| (1000 euro) |
| --- |
| Revenue | Expenditure |
| Source of revenue | Revenue entered under the final budget for the financial year | Revenue received | Allocation of expenditure | Appropriations under the final budget | Appropriations carried over from the previous financial year | Appropriations for the current financial year and carried over from the previous financial year |
| final | committed | paid | carried over | cancelled | available | paid | cancelled | available | committed | paid | carried over | cancelled |
| Community subsidies | 13 000 | 13 000 | Title I
  Staff | 5 419 | 5 196 | 5 084 | 112 | 223 | 88 | 83 | 5 | 5 507 | 5 284 | 5 167 | 112 | 228 |
| Other revenue | | 8 | Title II
  Administration | 3 380 | 3 207 | 2 591 | 723 | 66 | 434 | 426 | 8 | 3 814 | 3 641 | 3 017 | 723 | 74 |
| | | | Title III
  Operating activities | 4 201 | 3 377 | 2 276 | 1 280 | 645 | 345 | 291 | 54 | 4 546 | 3 722 | 2 567 | 1 280 | 699 |
| Total | 13 000 | 13 008 | Total | 13 000 | 11 780 | 9 951 | 2 115 | 934 | 867 | 800 | 67 | 13 867 | 12 647 | 10 751 | 2 115 | 1 001 |

(1000 euro)

Revenue

Expenditure

Source of revenue

Revenue entered under the final budget for the financial year

Revenue received

Allocation of expenditure

Appropriations under the final budget

Appropriations carried over from the previous financial year

Appropriations for the current financial year and carried over from the previous financial year

final

committed

paid

carried over

cancelled

available

paid

cancelled

available

committed

paid

carried over

cancelled

Community subsidies

13 000

13 000

Title I

Staff

5 419

5 196

5 084

112

223

88

83

5

5 507

5 284

5 167

112

228

Other revenue

8

Title II

Administration

3 380

3 207

2 591

723

66

434

426

8

3 814

3 641

3 017

723

74

Title III

Operating activities

4 201

3 377

2 276

1 280

645

345

291

54

4 546

3 722

2 567

1 280

699

Total

13 000

13 008

Total

13 000

11 780

9 951

2 115

934

867

800

67

13 867

12 647

10 751

2 115

1 001

Table 3

Revenue and expenditure account for the financial year 2005 (1)

| (1000 euro) |
| --- |
| | 2005 |
| Operating revenue |
| Community subsidies | 11 991 |
| Other subsidies/revenue | 59 |
| Total (a) | 12 050 |
| Operating expenditure |
| Staff | 5 149 |
| Administration | 3 308 |
| Operating activities | 2 054 |
| Total (b) | 10 511 |
| Operating result (c = a – b) | 1 539 |
| Other income (d) | 0 |
| Other charges (e) | 3 |
| Economic result (f = c + d – e) | 1 536 |

(1000 euro)

2005

Operating revenue

Community subsidies

11 991

Other subsidies/revenue

59

Total (a)

12 050

Operating expenditure

Staff

5 149

Administration

3 308

Operating activities

2 054

Total (b)

10 511

Operating result (c = a – b)

1 539

Other income (d)

0

Other charges (e)

3

Economic result (f = c + d – e)

1 536

Table 4

Balance sheet at 31 December 2005 and 2004 (2)

| (1000 euro) |
| --- |
| | 2005 | 2004 |
| Assets |
| Fixed assets | 1 773 | 1 455 |
| Receivables | 159 | 152 |
| Cash and cash equivalents | 3 130 | 2 082 |
| Total | 5 062 | 3 689 |
| Liabilities |
| Accumulated surplus/deficit | 1 842 | 1 669 |
| Economic result for the year | 1 536 | 173 |
| Current liabilities | 1 684 | 1 847 |
| Total | 5 062 | 3 689 |

(1000 euro)

2005

2004

Assets

Fixed assets

1 773

1 455

Receivables

159

152

Cash and cash equivalents

3 130

2 082

Total

5 062

3 689

Liabilities

Accumulated surplus/deficit

1 842

1 669

Economic result for the year

1 536

173

Current liabilities

1 684

1 847

Total

5 062

3 689

---

(1)  The figures for the financial year 2004 are not given because they are not comparable to the 2005 figures because of a change in the accounting methods used.

(2)  The data for the financial year 2004 have been restated to allow for comparison with those for 2005.

---

EUROJUST'S REPLIES

| 7. | Eurojust would like to emphasize that its volume of activity depends heavily on the number of cases referred by the Member States. Therefore, the programming of allocation of its resources has a highly indicative and approximate character. Moreover, the allocation in December 2004 of 2 million euro for Eurojust's operational activities has had a negative impact on our level of execution on title 3.
  Eurojust will apply strictly the applicable regulation in its future decisions relating to the non-automatic carry-over procedure. |
| --- | --- |

7.

Eurojust would like to emphasize that its volume of activity depends heavily on the number of cases referred by the Member States. Therefore, the programming of allocation of its resources has a highly indicative and approximate character. Moreover, the allocation in December 2004 of 2 million euro for Eurojust's operational activities has had a negative impact on our level of execution on title 3.

Eurojust will apply strictly the applicable regulation in its future decisions relating to the non-automatic carry-over procedure.

| 8. | The consultations with the Commission on Eurojust's draft financial regulation have been concluded and the agreed text has been adopted by the College on 20 April 2006. |
| --- | --- |

8.

The consultations with the Commission on Eurojust's draft financial regulation have been concluded and the agreed text has been adopted by the College on 20 April 2006.

| 9. | Eurojust prioritised the setting up of an asset inventory system to meet the accounting obligations. An exhaustive inventory database is currently being implemented. |
| --- | --- |

9.

Eurojust prioritised the setting up of an asset inventory system to meet the accounting obligations. An exhaustive inventory database is currently being implemented.

| 10. | The Authorising Officer has submitted standards of internal control based on the ones adopted by the Commission to the College of Eurojust for adoption during the last quarter of 2006.
  In 2006, on the basis of its experience, Eurojust has started to improve the checklists in use for its main budgetary operations. |
| --- | --- |

10.

The Authorising Officer has submitted standards of internal control based on the ones adopted by the Commission to the College of Eurojust for adoption during the last quarter of 2006.

In 2006, on the basis of its experience, Eurojust has started to improve the checklists in use for its main budgetary operations.

| 11. | Eurojust has improved its tender procedures in view to make a clearer distinction between selection and award criteria. None of the contracts mentioned by the Court will be used after the permitted four-year period. |
| --- | --- |

11.

Eurojust has improved its tender procedures in view to make a clearer distinction between selection and award criteria. None of the contracts mentioned by the Court will be used after the permitted four-year period.

---

| 19.12.2006 | EN | Official Journal of the European Union | C 312/73 |
| --- | --- | --- | --- |

19.12.2006

EN

Official Journal of the European Union

C 312/73

---

REPORT

on the annual accounts of the European Training Foundation for the financial year 2005 together with the Foundation's replies

(2006/C 312/13)

CONTENTS

| 1-2 | INTRODUCTION |
| --- | --- |

1-2

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

3-6

| 7-11 | OBSERVATIONS |
| --- | --- |

7-11

Tables 1 to 4

Foundation's replies

INTRODUCTION

| 1. | The European Training Foundation (hereinafter called the Foundation) was created by Council Regulation (EEC) No 1360/90 of 7 May 1990 (1). The Foundation's purpose is to support the reform of vocational training in the European Union's partner countries. As such, it assists the Commission in the implementation of various programmes (PHARE, TACIS, CARDS and MEDA). |
| --- | --- |

1.

The European Training Foundation (hereinafter called the Foundation) was created by Council Regulation (EEC) No 1360/90 of 7 May 1990 (1). The Foundation's purpose is to support the reform of vocational training in the European Union's partner countries. As such, it assists the Commission in the implementation of various programmes (PHARE, TACIS, CARDS and MEDA).

| 2. | Table 1 summarises the competences and activities of the Foundation. Key information, taken from the financial statements drawn up by the Foundation for the financial year 2005, is presented in Tables 2, 3 and 4. |
| --- | --- |

2.

Table 1 summarises the competences and activities of the Foundation. Key information, taken from the financial statements drawn up by the Foundation for the financial year 2005, is presented in 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 Foundation's accounts, as required by Article 248 of the Treaty establishing the European Community. |
| --- | --- |

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 Foundation's accounts, as required by Article 248 of the Treaty establishing the European Community.

| 4. | The Foundation's accounts for the financial year ended 31 December 2005 (3) were drawn up by its Executive Director, pursuant to Article 11 of Regulation (EEC) No 1360/90, and sent to the Court, which is required to deliver a Statement of Assurance on the reliability and on the legality and regularity of the underlying transactions. |
| --- | --- |

4.

The Foundation's accounts for the financial year ended 31 December 2005 (3) were drawn up by its Executive Director, pursuant to Article 11 of Regulation (EEC) No 1360/90, and sent to the Court, which is required to deliver a Statement of Assurance on the reliability and on the legality and regularity of the underlying transactions.

| 5. | The Court conducted an audit in accordance with its policies and standards, which are based on international auditing standards that have been adapted to the Community context. The audit was planned and performed to obtain reasonable assurance that the accounts are reliable and the underlying transactions are legal and regular. |
| --- | --- |

5.

The Court conducted an audit in accordance with its policies and standards, which are based on international auditing standards that have been adapted to the Community context. The audit was planned and performed to obtain reasonable assurance that the accounts are reliable and the underlying transactions are legal and regular.

| 6. | The Court has obtained a reasonable basis for the opinion expressed below. |
| --- | --- |

6.

The Court has obtained a reasonable basis for the opinion expressed below.

Reliability of the accountsThe Foundation's accounts for the financial year ended 31 December 2005 are, in all material respects, reliable.Legality and regularity of the underlying transactionsThe transactions underlying the Foundation'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. | Although the commitment rate for the appropriations for the financial year is high (practically 100 % for the Foundation's own activities), the Foundation's attention is drawn to the high rate (over 40 %) of carry-overs of commitments for operating activities (Title III). A similar situation prevails for the implementation of MEDA and Tempus activities. The Foundation should ensure that it programmes its activities better. |
| --- | --- |

7.

Although the commitment rate for the appropriations for the financial year is high (practically 100 % for the Foundation's own activities), the Foundation's attention is drawn to the high rate (over 40 %) of carry-overs of commitments for operating activities (Title III). A similar situation prevails for the implementation of MEDA and Tempus activities. The Foundation should ensure that it programmes its activities better.

| 8. | As in previous years, and in infringement of its financial regulation, the Foundation only published a summary of its budget in the Official Journal. The budget nomenclature lacks balance: two items contain amounts that represent nearly 10 % of its budget. Moreover, most of the budget headings for operating expenditure (Title III) are broken down in a detailed manner at item level according to the destination principle. The level of detail is such as to require numerous transfers. Furthermore, a lack of coordination between the financial unit and the operational units leads to additional transfers. |
| --- | --- |

8.

As in previous years, and in infringement of its financial regulation, the Foundation only published a summary of its budget in the Official Journal. The budget nomenclature lacks balance: two items contain amounts that represent nearly 10 % of its budget. Moreover, most of the budget headings for operating expenditure (Title III) are broken down in a detailed manner at item level according to the destination principle. The level of detail is such as to require numerous transfers. Furthermore, a lack of coordination between the financial unit and the operational units leads to additional transfers.

| 9. | The final accounts have been characterised by delays and difficulties to establish them in compliance with existing rules. |
| --- | --- |

9.

The final accounts have been characterised by delays and difficulties to establish them in compliance with existing rules.

| 10. | The Foundation has still not finished introducing its system of internal control. There is no complete description of the systems of internal control or even a formal account of the procedures used. There is no analysis of operational risks and the ex-post checks have still not been set up. Moreover, the accounting officer has not yet validated the accounts information and inventory systems. Generally speaking, the supervision and control of operations and financial and budgetary reports are inadequate. Given the risks associated with this situation, the Foundation should make it a priority to resolve it. |
| --- | --- |

10.

The Foundation has still not finished introducing its system of internal control. There is no complete description of the systems of internal control or even a formal account of the procedures used. There is no analysis of operational risks and the ex-post checks have still not been set up. Moreover, the accounting officer has not yet validated the accounts information and inventory systems. Generally speaking, the supervision and control of operations and financial and budgetary reports are inadequate. Given the risks associated with this situation, the Foundation should make it a priority to resolve it.

| 11. | Shortcomings in the field of documentation were found in two staff selection procedures: the rejection of applicants without justification in the files (4) and the lack of information on the criteria used for selecting the candidates in the pre-selection phase. |
| --- | --- |

11.

Shortcomings in the field of documentation were found in two staff selection procedures: the rejection of applicants without justification in the files (4) and the lack of information on the criteria used for selecting the candidates in the pre-selection phase.

This report was adopted by the Court of Auditors in Luxembourg at its meeting of 28 September 2006.

For the Court of Auditors

Hubert WEBER

President

---

(1)  OJ L 131, 23.5.1990.

1

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

2

(3)  These accounts were drawn up on 30 August 2006 and received by the Court on 14 September 2006.

3

(4)  No documentation was found in the files on the reasons for which candidates were not invited for interviews.

4

---

Table 1

European Training Foundation (Turin)

| Areas of Community competence deriving from the Treaty | Competences of the Foundation
  Council Regulation (EEC) No 1360/90 of 7 May 1990 | Governance | Resources made available to the Foundation

  (2004 data) | Products and services supplied |
| --- | --- | --- | --- | --- |
| ‘The Community shall carry out, within its spheres of competence, economic, financial and technical cooperation measures with third countries. Such measures shall be complementary to those carried out by the Member States and consistent with the development policy of the Community’.

  (Article 181 A) | Objectives:







  — | to contribute to the development of the professional training systems of Central and Eastern Europe and the independent states of the former Soviet Union benefiting from the programme to assist economic reform and recovery in the New Independent States and Mongolia and of non- Member Mediterranean countries benefiting from financial and technical accompanying measures for the reform of their economic and social structures, |

Areas of Community competence deriving from the Treaty

Competences of the Foundation

Council Regulation (EEC) No 1360/90 of 7 May 1990

Governance

Resources made available to the Foundation

(2004 data)

Products and services supplied

‘The Community shall carry out, within its spheres of competence, economic, financial and technical cooperation measures with third countries. Such measures shall be complementary to those carried out by the Member States and consistent with the development policy of the Community’.

(Article 181 A)

Objectives:

—

to contribute to the development of the professional training systems of Central and Eastern Europe and the independent states of the former Soviet Union benefiting from the programme to assist economic reform and recovery in the New Independent States and Mongolia and of non- Member Mediterranean countries benefiting from financial and technical accompanying measures for the reform of their economic and social structures,

| — | to promote the coordination of the assistance given to eligible countries. |
| --- | --- |

—

to promote the coordination of the assistance given to eligible countries.

Tasks:

in accordance with the general guidelines laid down by the Community, the ETF operates in the field of training, covering, professional, initial and lifelong training and the retraining of young people and adults via the following tasks:

| — | assistance in defining training needs and priorities via the implementation of technical assistance measures in the training field and via cooperation with the appropriate designated bodies in the eligible countries, |
| --- | --- |

—

assistance in defining training needs and priorities via the implementation of technical assistance measures in the training field and via cooperation with the appropriate designated bodies in the eligible countries,

| — | acts as a clearing house to provide the Community, its Member States and the non-Member States concerned information on current initiatives and future needs in the training field and provides a framework for channelling offers of assistance |
| --- | --- |

—

acts as a clearing house to provide the Community, its Member States and the non-Member States concerned information on current initiatives and future needs in the training field and provides a framework for channelling offers of assistance

1. Governing Board

| — | one representative of each Member State, |
| --- | --- |

—

one representative of each Member State,

| — | three representatives of the Commission, |
| --- | --- |

—

three representatives of the Commission,

| — | chaired by the Commission. |
| --- | --- |

—

chaired by the Commission.

2. Director

| — | appointed by the Governing Board on a proposal from the Commission. |
| --- | --- |

—

appointed by the Governing Board on a proposal from the Commission.

3. Advisory Forum

| — | appointed by the Governing Board, |
| --- | --- |

—

appointed by the Governing Board,

| — | two experts from each Member State, |
| --- | --- |

—

two experts from each Member State,

| — | two experts from each eligible country, |
| --- | --- |

—

two experts from each eligible country,

| — | two experts from the social partners at European level. |
| --- | --- |

—

two experts from the social partners at European level.

4. External audit

Court of Auditors.

5. Internal audit

Commission's internal audit department.

6. Discharge

European Parliament on a recommendation from the Council.

Final budget for 2005

26,3 (18,5) million euro divided up into 18,5 (17,6) million euro funded by a Commission subsidy and 7,45 (0,9) million euro funded by other bodies as assigned revenue.

Staff numbers as at 31 December 2005

| — | 104 (104) posts in the establishment plan, of which 97 (99) posts occupied, |
| --- | --- |

—

104 (104) posts in the establishment plan, of which 97 (99) posts occupied,

| — | 22 (17) other staff (auxiliaries, local staff, contract staff) employed to carry out the tasks of temporary staff being recruited or cope with exceptional workloads. |
| --- | --- |

—

22 (17) other staff (auxiliaries, local staff, contract staff) employed to carry out the tasks of temporary staff being recruited or cope with exceptional workloads.

| — | Total staff: 119 (116) assigned to the following duties:






  — | operational tasks: 68 (67), |
| --- | --- | --- |

—

Total staff: 119 (116) assigned to the following duties:

—

operational tasks: 68 (67),

| — | administrative tasks: 33 (32), |
| --- | --- |

—

administrative tasks: 33 (32),

| — | mixed tasks: 18 (17). |
| --- | --- |

—

mixed tasks: 18 (17).

Activities

The assistance supplied by the Foundation covers a large range of technical fields including: initial vocational training, lifelong learning, continuing (adult) education, human resource development in companies, employment policies, training of unemployed people, poverty alleviation and social inclusion and training to encourage local development.

Support for the commission:

In 2005, 127 new requests for support were received from the Commission. The majority came from the delegations (35 %), followed by AIDCO (21 %), DG EAC (16 %), DG ELARG (9 %) and DG RELEX (7 %). This included 18 analyses of the situation in the ENPI countries. The Commission's rate of satisfaction with the ETF's response was 97 %.

The most frequent applications were those in the field of programming, followed by policies and contributions in the preparation of European Neighbourhood Instruments, the identification of projects and follow-up.

Information and analysis:

Country sector studies, statistics on education, policy advice to countries.

Innovation and development support projects. As a centre of expertise, the ETF contributes towards the setting up of development projects in order to test innovatory approaches allowing partner countries to carry out reforms of their education and vocational training systems.

Technical assistance to DG EAC for the implementation of the Tempus programme.

Assistance Conventions with CARDS, MEDA and Tacis for the Tempus programme: this assistance covers the whole cycle of the project. It includes the selection, management and follow-up of contracts and information and communication, including general administrative support. IT tools such as online applications and report forms have greatly facilitated the administrative management of the various project cycles.

Source: Information provided by the Foundation.

EUROPEAN TRAINING FOUNDATION

Source: Information supplied by the Foundation — These tables summarise the data provided by the Foundation in its annual accounts.

Table 2

Budgetary implementation for the financial year 2005

| (1000 euro) |
| --- |
| Revenue | Expenditure |
| Origin of Revenue | Revenue entered in the final budget for the financial year | Revenue collected | Allocation of expenditure | Appropriations under the final budget | Appropriations carried over from the previous financial year | Appropriations for the financial year and the previous financial year |
| entered | committed | paid | carried over | cancelled | available | paid | carried over | cancelled | available | committed | paid | carried over | cancelled |
| Community subsidies | 18 500 | 18 500 | Title I
  Staff | 11 942 | 11 787 | 11 310 | 478 | 154 | 123 | 110 | 0 | 13 | 12 065 | 11 910 | 11 420 | 478 | 167 |
| Own resources | 759 | 0 | Title II
  Administration | 1 568 | 1 559 | 1 232 | 326 | 10 | 247 | 227 | 0 | 20 | 1 815 | 1 806 | 1 459 | 326 | 30 |
| Other revenue | 0 | 34 | Title III
  Operating activities | 4 990 | 4 744 | 2 818 | 1 925 | 247 | 1 168 | 813 | 0 | 355 | 6 158 | 5 912 | 3 631 | 1 925 | 602 |
| Italian authorities — earmarked revenue | 1 131 | 479 | Title IV
  Italian Ministry | 479 | 357 | 123 | 356 | 0 | 651 | 342 | 309 | 0 | 1 130 | 1 008 | 465 | 665 | 0 |
| MEDA-ETE — earmarked revenue | 5 000 | 2 500 | Title V
  MEDA-ETE Conventions | 5 000 | 2 604 | 135 | 4 865 | 0 | 0 | 0 | 0 | 0 | 5 000 | 2 604 | 135 | 4 865 | 0 |
| TEMPUS — earmarked revenue | 1 323 | 1 739 | Title VI
  TEMPUS Conventions | 2 363 | 1 327 | 677 | 1 686 | 0 | 0 | 0 | 0 | 0 | 2 363 | 1 327 | 677 | 1 686 | 0 |
| Total | 26 713 | 23 252 | Total | 26 342 | 22 378 | 16 295 | 9 636 | 411 | 2 189 | 1 492 | 309 | 388 | 28 531 | 24 567 | 17 787 | 9 945 | 799 |

(1000 euro)

Revenue

Expenditure

Origin of Revenue

Revenue entered in the final budget for the financial year

Revenue collected

Allocation of expenditure

Appropriations under the final budget

Appropriations carried over from the previous financial year

Appropriations for the financial year and the previous financial year

entered

committed

paid

carried over

cancelled

available

paid

carried over

cancelled

available

committed

paid

carried over

cancelled

Community subsidies

18 500

18 500

Title I

Staff

11 942

11 787

11 310

478

154

123

110

0

13

12 065

11 910

11 420

478

167

Own resources

759

0

Title II

Administration

1 568

1 559

1 232

326

10

247

227

0

20

1 815

1 806

1 459

326

30

Other revenue

0

34

Title III

Operating activities

4 990

4 744

2 818

1 925

247

1 168

813

0

355

6 158

5 912

3 631

1 925

602

Italian authorities — earmarked revenue

1 131

479

Title IV

Italian Ministry

479

357

123

356

0

651

342

309

0

1 130

1 008

465

665

0

MEDA-ETE — earmarked revenue

5 000

2 500

Title V

MEDA-ETE Conventions

5 000

2 604

135

4 865

0

0

0

0

0

5 000

2 604

135

4 865

0

TEMPUS — earmarked revenue

1 323

1 739

Title VI

TEMPUS Conventions

2 363

1 327

677

1 686

0

0

0

0

0

2 363

1 327

677

1 686

0

Total

26 713

23 252

Total

26 342

22 378

16 295

9 636

411

2 189

1 492

309

388

28 531

24 567

17 787

9 945

799

Table 3

Economic outturn account for the financial year 2005 (1)

| (1000 euro) |
| --- |
| | 2005 |
| Operating revenue |
| Community subsidies | 18 484 |
| Other subsidies/revenue | 7 842 |
| Total (a) | 26 326 |
| Operating expenditure |
| Staff | 11 785 |
| Administration | 2 091 |
| Operations | 12 237 |
| Total (b) | 26 113 |
| Outturn on operations (c = a – b) | 213 |

(1000 euro)

2005

Operating revenue

Community subsidies

18 484

Other subsidies/revenue

7 842

Total (a)

26 326

Operating expenditure

Staff

11 785

Administration

2 091

Operations

12 237

Total (b)

26 113

Outturn on operations (c = a – b)

213

Table 4

Balance sheet at 31 December 2005 and 2004 (2)

| (1000 euro) |
| --- |
| | 2005 | 2004 |
| Assets |
| Fixed assets | 3 426 | 3 630 |
| Stocks | 37 | 76 |
| Receivables | 1 440 | 1 697 |
| Cash | 23 665 | 23 170 |
| Total | 28 568 | 28 573 |
| Liabilities |
| Accumulated surplus/deficit | 3 458 | 3 458 |
| Economic result for the year | 213 | |
| Long term liabilities | 205 | 205 |
| Current liabilities | 24 692 | 24 910 |
| Total | 28 568 | 28 573 |

(1000 euro)

2005

2004

Assets

Fixed assets

3 426

3 630

Stocks

37

76

Receivables

1 440

1 697

Cash

23 665

23 170

Total

28 568

28 573

Liabilities

Accumulated surplus/deficit

3 458

3 458

Economic result for the year

213

Long term liabilities

205

205

Current liabilities

24 692

24 910

Total

28 568

28 573

---

(1)  The data for the financial year 2004 are not shown because they are not comparable with those for 2005 due to a change in accounting methods.

(2)  The data for 2004 have been adapted to make them comparable to those for the financial year 2005.

---

THE AGENCY'S REPLIES

| 7. | Most of the amount carried forward (i.e. 83 %) is related to commitments corresponding to activities completed in 2005 for which requests for payments have not been received in due time. As far as the Tempus and the MEDA activities are concerned, the rate on carry over is adversely affected since the corresponding conventions are not annual and do not coincide with the financial year. |
| --- | --- |

7.

Most of the amount carried forward (i.e. 83 %) is related to commitments corresponding to activities completed in 2005 for which requests for payments have not been received in due time. As far as the Tempus and the MEDA activities are concerned, the rate on carry over is adversely affected since the corresponding conventions are not annual and do not coincide with the financial year.

| 8. | Following preceding Court's remarks, the 2006 budget has been published in the Official Journal of the European Union (OJ L 67, 8.3.2006) in full detail including the establishment plan. ETF intends to review, within the regulatory requirements, its budget structure at the occasion of the 2007 budget procedure to address some of the identified weaknesses. |
| --- | --- |

8.

Following preceding Court's remarks, the 2006 budget has been published in the Official Journal of the European Union (OJ L 67, 8.3.2006) in full detail including the establishment plan. ETF intends to review, within the regulatory requirements, its budget structure at the occasion of the 2007 budget procedure to address some of the identified weaknesses.

| 9. | For the future, ETF will take appropriate measures to remedy to the situation described by the Court. |
| --- | --- |

9.

For the future, ETF will take appropriate measures to remedy to the situation described by the Court.

| 10. | ETF is aware that the Accounting Officer needs to validate the accounts information and inventory systems. In the meantime, ETF accounting officer will work on the validation of systems on the basis of the methodology used in the Commission. |
| --- | --- |

10.

ETF is aware that the Accounting Officer needs to validate the accounts information and inventory systems. In the meantime, ETF accounting officer will work on the validation of systems on the basis of the methodology used in the Commission.

| 11. | Since 2004, ETF has introduced a comprehensive format for the selection board reports which makes information such as individual notes taken by individual panel members — redundant. ETF will study the possibility to give more information on the selection phase. |
| --- | --- |

11.

Since 2004, ETF has introduced a comprehensive format for the selection board reports which makes information such as individual notes taken by individual panel members — redundant. ETF will study the possibility to give more information on the selection phase.

---

| 19.12.2006 | EN | Official Journal of the European Union | C 312/80 |
| --- | --- | --- | --- |

19.12.2006

EN

Official Journal of the European Union

C 312/80

---

REPORT

on the annual accounts of the European Foundation for the Improvement of Living and Working Conditions for the financial year 2005 together with the Foundation's replies

(2006/C 312/14)

CONTENTS

| 1-2 | INTRODUCTION |
| --- | --- |

1-2

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

3-6

| 7-10 | OBSERVATIONS |
| --- | --- |

7-10

Tables 1 to 4

The Foundation's replies

INTRODUCTION

| 1. | The European Foundation for the Improvement of Living and Working Conditions (hereinafter referred to as the Foundation) was set up by Council Regulation (EEC) No 1365/75 of 26 May 1975 (1). Its aim is to contribute to the planning and establishment of better living and working conditions in the European Union by increasing and disseminating knowledge which is relevant to this subject. |
| --- | --- |

1.

The European Foundation for the Improvement of Living and Working Conditions (hereinafter referred to as the Foundation) was set up by Council Regulation (EEC) No 1365/75 of 26 May 1975 (1). Its aim is to contribute to the planning and establishment of better living and working conditions in the European Union by increasing and disseminating knowledge which is relevant to this subject.

| 2. | Table 1 summarises the Foundation's competences and activities. Key information from the financial statements drawn up by the Foundation for the financial year 2005 is presented in Tables 2, 3 and 4. |
| --- | --- |

2.

Table 1 summarises the Foundation's competences and activities. Key information from the financial statements drawn up by the Foundation for the financial year 2005 is presented in 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 Foundation's accounts, as required by Article 248 of the Treaty establishing the European Community. |
| --- | --- |

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 Foundation's accounts, as required by Article 248 of the Treaty establishing the European Community.

| 4. | The Foundation's accounts for the financial year ended 31 December 2005 (3) were drawn up by its Director, pursuant to Article 16 of Regulation (EEC) No 1365/75, and sent to the Court, which is required to provide a statement on their reliability and on the legality and regularity of the underlying transactions. |
| --- | --- |

4.

The Foundation's accounts for the financial year ended 31 December 2005 (3) were drawn up by its Director, pursuant to Article 16 of Regulation (EEC) No 1365/75, and sent to the Court, which is required to provide a statement on their reliability and on the legality and regularity of the underlying transactions.

| 5. | The Court conducted an audit in accordance with its policies and standards, which are based on international auditing standards that have been adapted to the Community context. The audit was planned and performed to obtain reasonable assurance that the accounts are reliable and the underlying transactions are legal and regular. |
| --- | --- |

5.

The Court conducted an audit in accordance with its policies and standards, which are based on international auditing standards that have been adapted to the Community context. The audit was planned and performed to obtain reasonable assurance that the accounts are reliable and the underlying transactions are legal and regular.

| 6. | The Court has thus obtained a reasonable basis for the statement below. |
| --- | --- |

6.

The Court has thus obtained a reasonable basis for the statement below.

Reliability of the accountsThe Foundation's accounts for the financial year ended 31 December 2005 are, in all material respects, reliable.Legality and regularity of the underlying transactionsThe transactions underlying the Foundation'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 utilisation rates for the commitment appropriations entered in the budget for the financial year are very high; in addition, the cancellation rate for appropriations carried over is very low. Nevertheless, carry-over rates in respect of commitments for administrative expenditure (Title II) and operating activities (Title III) remain high at 37 % and 44 % respectively. |
| --- | --- |

7.

The utilisation rates for the commitment appropriations entered in the budget for the financial year are very high; in addition, the cancellation rate for appropriations carried over is very low. Nevertheless, carry-over rates in respect of commitments for administrative expenditure (Title II) and operating activities (Title III) remain high at 37 % and 44 % respectively.

| 8. | In 1998, the Foundation recorded a budgetary loss of 2,4 million euro. Inasmuch as the Foundation did not need the appropriations carried over at that time, the Commission did not take these carry-overs into consideration when it paid over the grants. Over time, this loss has been partially offset by the Foundation's various revenues and came to 1 million euro at the end of 2005. In the meantime, the Commission has challenged the necessity of covering a loss due to the non-cancellation of appropriations which, in the end, were not used. The Foundation and the Commission should continue their efforts to clarify this situation. |
| --- | --- |

8.

In 1998, the Foundation recorded a budgetary loss of 2,4 million euro. Inasmuch as the Foundation did not need the appropriations carried over at that time, the Commission did not take these carry-overs into consideration when it paid over the grants. Over time, this loss has been partially offset by the Foundation's various revenues and came to 1 million euro at the end of 2005. In the meantime, the Commission has challenged the necessity of covering a loss due to the non-cancellation of appropriations which, in the end, were not used. The Foundation and the Commission should continue their efforts to clarify this situation.

| 9. | Achieving the Foundation's objectives should be seen as contributing to the goals laid down in the Foundation's basic regulation. The Foundation's work programme should express this contribution in operational and measurable terms. |
| --- | --- |

9.

Achieving the Foundation's objectives should be seen as contributing to the goals laid down in the Foundation's basic regulation. The Foundation's work programme should express this contribution in operational and measurable terms.

| 10. | There is no comprehensive document analysing the risks arising from the financial and operational aspects of the Foundation's activities. Moreover, there was no validation of the procedures introduced by the Authorising Officers in order to ensure the accuracy and the exhaustivity of the financial information they send to the Accounting Officer, except as regards the data-processing aspects. |
| --- | --- |

10.

There is no comprehensive document analysing the risks arising from the financial and operational aspects of the Foundation's activities. Moreover, there was no validation of the procedures introduced by the Authorising Officers in order to ensure the accuracy and the exhaustivity of the financial information they send to the Accounting Officer, except as regards the data-processing aspects.

This report was adopted by the Court of Auditors in Luxembourg at its meeting of 28 September 2006.

For the Court of Auditors

Hubert WEBER

Président

---

(1)  OJ L 139, 30.5.1975, p. 1.

1

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

2

(3)  These accounts were drawn up on 30 June 2006 and received by the Court on 4 July 2006.

3

---

Table 1

European Foundation for the Improvement of Living and Working Conditions (Dublin)

| Areas of Community competence deriving from the Treaty | Competences of the Foundation as defined in Council Regulation (EEC) No 1365/75 of 26 May 1975 | Governance | Resources available to the Foundation (2004 data) | Products and services provided |
| --- | --- | --- | --- | --- |
| ‘The Community and the Member States, having in mind fundamental social rights, ... shall have as their objectives... improved living and working conditions, ... the Community shall support and complement the activities of the Member States in the following fields; ... b) working conditions; c) social security and the social protection of workers; d) protection of workers where their employment contract is terminated; e) the information and consultation of workers; f) representation and the collective defence of the interests of workers and employers, including co-determination; g) conditions of employment for third-country nationals; h) the integration of persons excluded from the labour market; i) equality between men and women...’

  (Articles 136 and 137 of the Treaty) | Objectives:

  The aim of the Foundation shall be to contribute to the establishment of better living and working conditions by increasing and disseminating knowledge which is relevant to this subject. In particular, it is required to consider the following areas:






  — | man at work, |

Areas of Community competence deriving from the Treaty

Competences of the Foundation as defined in Council Regulation (EEC) No 1365/75 of 26 May 1975

Governance

Resources available to the Foundation (2004 data)

Products and services provided

‘The Community and the Member States, having in mind fundamental social rights, ... shall have as their objectives... improved living and working conditions, ... the Community shall support and complement the activities of the Member States in the following fields; ... b) working conditions; c) social security and the social protection of workers; d) protection of workers where their employment contract is terminated; e) the information and consultation of workers; f) representation and the collective defence of the interests of workers and employers, including co-determination; g) conditions of employment for third-country nationals; h) the integration of persons excluded from the labour market; i) equality between men and women...’

(Articles 136 and 137 of the Treaty)

Objectives:

The aim of the Foundation shall be to contribute to the establishment of better living and working conditions by increasing and disseminating knowledge which is relevant to this subject. In particular, it is required to consider the following areas:

—

man at work,

| — | organisation of work and particularly job design, |
| --- | --- |

—

organisation of work and particularly job design,

| — | problems peculiar to certain categories of workers, |
| --- | --- |

—

problems peculiar to certain categories of workers,

| — | long-term aspects of the improvement of the environment, |
| --- | --- |

—

long-term aspects of the improvement of the environment,

| — | the distribution of human activities in space and in time. |
| --- | --- |

—

the distribution of human activities in space and in time.

Tasks:

| — | to foster the exchange of information and experience in these fields, |
| --- | --- |

—

to foster the exchange of information and experience in these fields,

| — | to facilitate contact between universities, study and research institutes, economic and social administrations and organisations, |
| --- | --- |

—

to facilitate contact between universities, study and research institutes, economic and social administrations and organisations,

| — | to carry out studies or to conclude study contracts and to provide assistance for pilot projects, |
| --- | --- |

—

to carry out studies or to conclude study contracts and to provide assistance for pilot projects,

| — | to cooperate as closely as possible with existing specialised institutes. |
| --- | --- |

—

to cooperate as closely as possible with existing specialised institutes.

1. Administrative Board

| — | from each Member State: one government representative, one representative from employers' organisations and one workers' representative, |
| --- | --- |

—

from each Member State: one government representative, one representative from employers' organisations and one workers' representative,

| — | 3 representatives from the Commission. |
| --- | --- |

—

3 representatives from the Commission.

2. Director appointed by the Commission from a list of candidates submitted by the Administrative Board, he implements the decisions of the Administrative Board and directs the Foundation.

3. The Committee of Experts is composed of 15 members appointed by the Council on a proposal from the Commission, gives opinions in particular on the work programme.

4. External audit

Court of Auditors.

5. Discharge given by the Parliament on a recommendation by the Council.

Final budget 2005:

19,3 million euro (18,1 million euro)

Of which a Community subsidy of: 98,8 % (99,6 %)

Staff in December 2005:

94 (91) posts provided for in the establishment plan, of which 82 (74) were occupied

Other staff: Seconded National Experts and employment agency staff: 12 (16)

Total staff employed: 94 (90)

Operating activities: 54 (53)

Administrative: 33 (32)

Mixed: 7 (5)

Living Conditions:

| — | analytical reports on quality of life in Europe, |
| --- | --- |

—

analytical reports on quality of life in Europe,

| — | database on age management in companies, |
| --- | --- |

—

database on age management in companies,

| — | reports on labour supply in care services for children and older people, |
| --- | --- |

—

reports on labour supply in care services for children and older people,

| — | studies on organisation of time over working life. |
| --- | --- |

—

studies on organisation of time over working life.

Working Conditions:

| — | European Working Conditions Observatory (EWCO: news articles, survey reports and comparative topic reports), |
| --- | --- |

—

European Working Conditions Observatory (EWCO: news articles, survey reports and comparative topic reports),

| — | EWCO co-hosted EU presidency conference with Luxembourg government, June 2005, |
| --- | --- |

—

EWCO co-hosted EU presidency conference with Luxembourg government, June 2005,

| — | annual review of working conditions in the EU, 2004-2005, |
| --- | --- |

—

annual review of working conditions in the EU, 2004-2005,

| — | fieldwork for 4th European Working Conditions Survey (sample of 30 000 workers in 31 countries). |
| --- | --- |

—

fieldwork for 4th European Working Conditions Survey (sample of 30 000 workers in 31 countries).

Industrial Relations:

| — | European Industrial Relations Observatory (EIRO), |
| --- | --- |

—

European Industrial Relations Observatory (EIRO),

| — | circulation of reports and articles on EIRonline, |
| --- | --- |

—

circulation of reports and articles on EIRonline,

| — | various reports. |
| --- | --- |

—

various reports.

European Monitoring Centre on Change (EMCC):

| — | two in-depth sector studies, |
| --- | --- |

—

two in-depth sector studies,

| — | Various case files, |
| --- | --- |

—

Various case files,

| — | sector future series: seven industry sectors have been covered, |
| --- | --- |

—

sector future series: seven industry sectors have been covered,

| — | organisation of and participation in various seminars. |
| --- | --- |

—

organisation of and participation in various seminars.

Transversal Themes:

| — | various general and country reports. |
| --- | --- |

—

various general and country reports.

Information and communication:

| — | the Foundation has organised 71 conferences and taken part in 95 conferences and seminars. Excluding translations, the Foundation has produced 178 publications and circulated 10 newsletters. |
| --- | --- |

—

the Foundation has organised 71 conferences and taken part in 95 conferences and seminars. Excluding translations, the Foundation has produced 178 publications and circulated 10 newsletters.

Source: Information supplied by the Foundation.

EUROPEAN FOUNDATION FOR THE IMPROVEMENT OF LIVING AND WORKING CONDITIONS

Source: Data supplied by the Foundation — These tables summarise the data provided by the Foundation in its annual accounts.

Table 2

Implementation of the budget for the financial year 2005

| (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 | Appropriations carried over from the previous financial year | Available appropriations
  (current financial year and previous financial year) |
| entered | committed | paid | carried over | cancelled | outstanding commitments | paid | cancelled | appropriations | committed | paid | carried over | cancelled |
| Community subsidies (1) | 19 060 | 19 060 | Title I
  Staff | 8 974 | 8 971 | 8 815 | 157 | 3 | 134 | 127 | 7 | 9 108 | 9 105 | 8 942 | 157 | 10 |
| Other revenue | 220 | 163 | Title II
  Administration | 1 382 | 1 382 | 875 | 507 | 0 | 503 | 481 | 22 | 1 885 | 1 885 | 1 356 | 507 | 22 |
| | | | Title III
  Operating activities | 8 924 | 8 922 | 4 967 | 3 954 | 2 | 2 526 | 2 484 | 42 | 11 450 | 11 448 | 7 451 | 3 954 | 44 |
| Total | 19 280 | 19 223 | Total | 19 280 | 19 275 | 14 657 | 4 618 | 5 | 3 163 | 3 092 | 71 | 22 443 | 22 438 | 17 749 | 4 618 | 76 |

(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

Appropriations carried over from the previous financial year

Available appropriations

(current financial year and previous financial year)

entered

committed

paid

carried over

cancelled

outstanding commitments

paid

cancelled

appropriations

committed

paid

carried over

cancelled

Community subsidies (1)

19 060

19 060

Title I

Staff

8 974

8 971

8 815

157

3

134

127

7

9 108

9 105

8 942

157

10

Other revenue

220

163

Title II

Administration

1 382

1 382

875

507

0

503

481

22

1 885

1 885

1 356

507

22

Title III

Operating activities

8 924

8 922

4 967

3 954

2

2 526

2 484

42

11 450

11 448

7 451

3 954

44

Total

19 280

19 223

Total

19 280

19 275

14 657

4 618

5

3 163

3 092

71

22 443

22 438

17 749

4 618

76

Table 3

Revenue and expenditure account for the financial year 2005 (2)

| (1000 euro) |
| --- |
| | 2005 |
| Operating revenue |
| Community subsidies | 18 600 |
| Other subsidies/revenue | 366 |
| Total (a) | 18 966 |
| Operating expenditure |
| Staff | 8 035 |
| Administration | 2 692 |
| Operating activities | 8 581 |
| Total (b) | 19 308 |
| Operating result (c = a – b) | – 342 |
| Other income (d) | 0 |
| Other charges (e) | 9 |
| Economic result (f = c + d – e) | – 351 |

(1000 euro)

2005

Operating revenue

Community subsidies

18 600

Other subsidies/revenue

366

Total (a)

18 966

Operating expenditure

Staff

8 035

Administration

2 692

Operating activities

8 581

Total (b)

19 308

Operating result (c = a – b)

– 342

Other income (d)

0

Other charges (e)

9

Economic result (f = c + d – e)

– 351

Table 4

Balance sheet at 31 December 2005 and 31 December 2004 (3)

| (1000 euro) |
| --- |
| | 2005 | 2004 |
| Assets |
| Fixed assets | 2 800 | 3 121 |
| Receivables | 1 044 | 1 007 |
| Cash | 3 244 | 1 649 |
| Total | 7 088 | 5 777 |
| Liabilities |
| Cumulative results of previous years | 4 444 | 4 515 |
| Result for the year | – 351 | –71 |
| Current liabilities | 2 995 | 1 333 |
| Total | 7 088 | 5 777 |

(1000 euro)

2005

2004

Assets

Fixed assets

2 800

3 121

Receivables

1 044

1 007

Cash

3 244

1 649

Total

7 088

5 777

Liabilities

Cumulative results of previous years

4 444

4 515

Result for the year

– 351

–71

Current liabilities

2 995

1 333

Total

7 088

5 777

---

(1)  Including European Economic Area subsidies.

(2)  Data for the financial year 2004 are not shown as they are not comparable with the year 2005 because of the change in the accounting principles applied.

(3)  Data for the financial year 2004 have been restated to allow comparison with those for 2005.

---

THE FOUNDATION'S REPLIES

| 7. | The Foundation has undertaken considerable efforts in the past to reduce the number of carry-overs. Given the very nature of the Foundation's work, it is, however, a challenge to keep it in balance with the principle of sound financial management, which requires that suppliers not be paid before agreed milestones of the work have been reached. |
| --- | --- |

7.

The Foundation has undertaken considerable efforts in the past to reduce the number of carry-overs. Given the very nature of the Foundation's work, it is, however, a challenge to keep it in balance with the principle of sound financial management, which requires that suppliers not be paid before agreed milestones of the work have been reached.

| 8. | In 2006, the Foundation and the Commission came to an agreement on the nature and solution of the problem. It is acknowledged by all parties that the Foundation did not at any time spend more money than the amount approved by the Budgetary Authority. The Foundation will gradually reduce the accumulated imbalance to zero within four years. |
| --- | --- |

8.

In 2006, the Foundation and the Commission came to an agreement on the nature and solution of the problem. It is acknowledged by all parties that the Foundation did not at any time spend more money than the amount approved by the Budgetary Authority. The Foundation will gradually reduce the accumulated imbalance to zero within four years.

| 9. | The Foundation is currently developing two tools in order to set goals that are measurable and to subsequently monitor its performance: a project-management system linked to a financial forecasting software system and a performance-monitoring system, using a balanced scorecard, both to be introduced in 2007. |
| --- | --- |

9.

The Foundation is currently developing two tools in order to set goals that are measurable and to subsequently monitor its performance: a project-management system linked to a financial forecasting software system and a performance-monitoring system, using a balanced scorecard, both to be introduced in 2007.

| 10. | The Foundation does carry out a risk analysis at both project and unit level, documented in the project plans and annual management plans. It is currently developing a comprehensive risk-management approach at Foundation level. |
| --- | --- |

10.

The Foundation does carry out a risk analysis at both project and unit level, documented in the project plans and annual management plans. It is currently developing a comprehensive risk-management approach at Foundation level.

---

| 19.12.2006 | EN | Official Journal of the European Union | C 312/86 |
| --- | --- | --- | --- |

19.12.2006

EN

Official Journal of the European Union

C 312/86

---

REPORT

on the annual accounts of the European Monitoring Centre for Drugs and Drug Addiction for the financial year 2005 together with the Centre's replies

(2006/C 312/15)

CONTENTS

| 1-2 | INTRODUCTION |
| --- | --- |

1-2

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

3-6

| 7-13 | OBSERVATIONS |
| --- | --- |

7-13

Tables 1 to 4

The Centre's replies

INTRODUCTION

| 1. | The European Monitoring Centre for Drugs and Drug Addiction (hereinafter the Centre) was established by Council Regulation (EEC) No 302/93 of 8 February 1993 (1). Its main task is to collect data on drugs and drug addiction in order to prepare and publish information that is objective, reliable and comparable at European level. The information is intended to provide a basis for analysing the demand for drugs and ways of reducing both it and, in general, phenomena associated with the drug market. |
| --- | --- |

1.

The European Monitoring Centre for Drugs and Drug Addiction (hereinafter the Centre) was established by Council Regulation (EEC) No 302/93 of 8 February 1993 (1). Its main task is to collect data on drugs and drug addiction in order to prepare and publish information that is objective, reliable and comparable at European level. The information is intended to provide a basis for analysing the demand for drugs and ways of reducing both it and, in general, phenomena associated with the drug market.

| 2. | Table 1 summarises the Centre's competences and activities. Key information from the financial statements drawn up by the Centre for the financial year 2005 is presented in Tables 2, 3 and 4. |
| --- | --- |

2.

Table 1 summarises the Centre's competences and activities. Key information from the financial statements drawn up by the Centre for the financial year 2005 is presented in 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 Centre's accounts, as required by Article 248 of the Treaty establishing the European Community. |
| --- | --- |

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 Centre's accounts, as required by Article 248 of the Treaty establishing the European Community.

| 4. | The Centre's accounts for the financial year ended 31 December 2005 (3) were drawn up by its Director, pursuant to Article 11 of Regulation (EEC) No 302/93, and sent to the Court, which is required to give its opinion on their reliability and on the legality and regularity of the underlying transactions. |
| --- | --- |

4.

The Centre's accounts for the financial year ended 31 December 2005 (3) were drawn up by its Director, pursuant to Article 11 of Regulation (EEC) No 302/93, and sent to the Court, which is required to give its opinion on their reliability and on the legality and regularity of the underlying transactions.

| 5. | The Court conducted an audit in accordance with its policies and standards, which are based on international auditing standards that have been adapted to the Community context. The audit was planned and performed to obtain reasonable assurance that the accounts are reliable and the underlying transactions are legal and regular. |
| --- | --- |

5.

The Court conducted an audit in accordance with its policies and standards, which are based on international auditing standards that have been adapted to the Community context. The audit was planned and performed to obtain reasonable assurance that the accounts are reliable and the underlying transactions are legal and regular.

| 6. | The Court has thus obtained a reasonable basis for the Statement below. |
| --- | --- |

6.

The Court has thus obtained a reasonable basis for the Statement below.

Reliability of the accountsThe Centre's accounts for the financial year ended 31 December 2005 are, in all material respects, reliable.Legality and regularity of underlying transactionsThe transactions underlying the Centre'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 utilisation rate of commitment appropriations is greater than 90 %, whereas the corresponding rate for payment appropriations is only 85 %. Expenditure on administration shows a high carry-over rate of almost 40 %. This situation is the result of concentrating purchases in the latter part of the year, which has concomitant risks for the quality of acquisition procedures. The Centre should manage its procurement policy better, in order to avoid carrying over appropriations, which makes management more cumbersome. |
| --- | --- |

7.

The utilisation rate of commitment appropriations is greater than 90 %, whereas the corresponding rate for payment appropriations is only 85 %. Expenditure on administration shows a high carry-over rate of almost 40 %. This situation is the result of concentrating purchases in the latter part of the year, which has concomitant risks for the quality of acquisition procedures. The Centre should manage its procurement policy better, in order to avoid carrying over appropriations, which makes management more cumbersome.

| 8. | For the purposes of management, the Centre has prepared an activity-based budget. This initiative must be taken further with a view to improved performance monitoring and evaluation of its effectiveness by introducing analytical accounts so that the cost of the Centre's various activities can be ascertained. |
| --- | --- |

8.

For the purposes of management, the Centre has prepared an activity-based budget. This initiative must be taken further with a view to improved performance monitoring and evaluation of its effectiveness by introducing analytical accounts so that the cost of the Centre's various activities can be ascertained.

| 9. | In its previous report, the Court noted that only the accounting officer's signature was needed for the bank accounts, and the Centre undertook to implement a countersigning system. As at February 2006, no such system had yet been introduced. |
| --- | --- |

9.

In its previous report, the Court noted that only the accounting officer's signature was needed for the bank accounts, and the Centre undertook to implement a countersigning system. As at February 2006, no such system had yet been introduced.

| 10. | The fixed asset inventory systems are not included in the general accounts. Without a reliable labelling system, the traceability of the assets entered in the inventory cannot be assured. |
| --- | --- |

10.

The fixed asset inventory systems are not included in the general accounts. Without a reliable labelling system, the traceability of the assets entered in the inventory cannot be assured.

| 11. | There are deficiencies in the staff recruitment procedures. In one selection procedure, the selection board was not composed in accordance with the parity principle established in the Staff Regulations (4). In another case, the successful candidate had not obtained the best assessment in the selection procedure. |
| --- | --- |

11.

There are deficiencies in the staff recruitment procedures. In one selection procedure, the selection board was not composed in accordance with the parity principle established in the Staff Regulations (4). In another case, the successful candidate had not obtained the best assessment in the selection procedure.

| 12. | At the end of 2004, a member of staff was sent on a long-term (two-year) mission to Brussels. It has not been possible to ascertain the purpose of this mission, which had cost around 70 000 euro (in pay and allowances) by the end of 2005, and the person concerned did not have a heavy workload. When the mission was terminated, he was seconded to the Commission, yet the Centre continued to pay his salary. |
| --- | --- |

12.

At the end of 2004, a member of staff was sent on a long-term (two-year) mission to Brussels. It has not been possible to ascertain the purpose of this mission, which had cost around 70 000 euro (in pay and allowances) by the end of 2005, and the person concerned did not have a heavy workload. When the mission was terminated, he was seconded to the Commission, yet the Centre continued to pay his salary.

| 13. | A number of anomalies were revealed in the course of checks on procurement and contracting procedures. In two cases, the earliest date for the receipt of bids after the date of the invitation to tender was not adhered to. In one supplementary contract procedure, the value of the works exceeded the ceilings laid down in the regulations. In two cases audited, there was no formal decision concerning the appointment of the members of the committee responsible for opening the bids or the members of the evaluation committee. Lastly, in one case the contract value was clearly under-estimated, which infringed the principle of the equal treatment of tenderers. |
| --- | --- |

13.

A number of anomalies were revealed in the course of checks on procurement and contracting procedures. In two cases, the earliest date for the receipt of bids after the date of the invitation to tender was not adhered to. In one supplementary contract procedure, the value of the works exceeded the ceilings laid down in the regulations. In two cases audited, there was no formal decision concerning the appointment of the members of the committee responsible for opening the bids or the members of the evaluation committee. Lastly, in one case the contract value was clearly under-estimated, which infringed the principle of the equal treatment of tenderers.

This report was adopted by the Court of Auditors in Luxembourg at its meeting of 28 September 2006.

For the Court of Auditors

Hubert WEBER

President

---

(1)  OJ L 36, 12.2.1993 This Regulation was amended by Regulations (EC) No 3294/94 of 22 December 1994 (OJ L 341, 30.12.1994, p. 7.) and (EC) No 1651/2003 of 18 June 2003 (OJ L 245, 29.9.2003, p. 30).

1

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

2

(3)  These accounts were drawn up on 15 June 2006 and received by the Court on 13 July 2006.

3

(4)  Article 12 of the Rules applicable to other servants.

4

---

Table 1

European Monitoring Centre for Drugs and Drug Addiction (Lisbon)

| Areas of Community competence deriving from the Treaty | Competences of the Centre as defined in Council Regulation (EEC) No 302/93 | Governance | Resources available to the Centre in 2005

  (2004) | Products and services supplied in 2005 |
| --- | --- | --- | --- | --- |
| The Community complements the Member States' action in reducing drugs-related health damage, including information and prevention.

  (Article 152(1) of the Treaty) | Objectives:

  to provide the Union and its Member States with reliable information at European level concerning drugs and drug addiction and their consequences.
  The Monitoring Centre should give priority to analysing:






  1. | The demand and reduction of the demand for drugs; |

Areas of Community competence deriving from the Treaty

Competences of the Centre as defined in Council Regulation (EEC) No 302/93

Governance

Resources available to the Centre in 2005

(2004)

Products and services supplied in 2005

The Community complements the Member States' action in reducing drugs-related health damage, including information and prevention.

(Article 152(1) of the Treaty)

Objectives:

to provide the Union and its Member States with reliable information at European level concerning drugs and drug addiction and their consequences.

The Monitoring Centre should give priority to analysing:

1.

The demand and reduction of the demand for drugs;

| 2. | National and Community strategies and policies; |
| --- | --- |

2.

National and Community strategies and policies;

| 3. | International cooperation and the geopolitics of supply; |
| --- | --- |

3.

International cooperation and the geopolitics of supply;

| 4. | Control of the trade in narcotics, psychotropic substances and drug precursors; |
| --- | --- |

4.

Control of the trade in narcotics, psychotropic substances and drug precursors;

| 5. | The implications of drug use for producer, consumer and transit countries, including money laundering. |
| --- | --- |

5.

The implications of drug use for producer, consumer and transit countries, including money laundering.

Tasks:

| — | to collect and analyse data, |
| --- | --- |

—

to collect and analyse data,

| — | to make enquiries and carry out preparatory actions, |
| --- | --- |

—

to make enquiries and carry out preparatory actions,

| — | to ensure that European-level data are more reliable, |
| --- | --- |

—

to ensure that European-level data are more reliable,

| — | to publish reliable information, |
| --- | --- |

—

to publish reliable information,

| — | to improve coordination between national and Community actions, |
| --- | --- |

—

to improve coordination between national and Community actions,

| — | to promote the incorporation of drug-related data into international programmes. |
| --- | --- |

—

to promote the incorporation of drug-related data into international programmes.

1. The Management Board

Comprises one representative from each Member State, two representatives of the Commission and two qualified scientists appointed by the European Parliament.

It approves the work programme and general annual report and adopts the budget.

2. Director

Appointed by the Management Board at the Commission's proposal.

3. Scientific Committee

Delivers opinions. It is made up of one representative from each Member State. The Management Board may also appoint a maximum of six other members on the basis of their specific qualifications.

4. External control

Court of Auditors

5. Discharge authority

European Parliament on the Council's recommendation.

Final budget

12,8 million euro (12,2 million euro). Community contribution: 96 % (96 %).

Staff numbers as at 31 December 2005:

Number of posts in establishment plan: 77 (77)

Posts occupied: 58 (61)

+25 (22) other staff (auxiliary contracts, contract staff and temporary replacements)

Total staff: 83 (83)

Assigned to the following duties:

operational: 50,5 (54,5)

administrative and IT support: 25 (20)

mixed: 7,5 (8,5)

Network

The Centre runs a computerised network for the collection and exchange of information called the ‘European Information Network on Drugs and Drug Addiction’ (Reitox); this network connects national drug information networks, specialist centres in the Member States and the information systems of international organisations working with the Centre.

Publications:

| — | Annual report on the state of the drug problem in Europe (22 language versions, publication and interactive website) |
| --- | --- |

—

Annual report on the state of the drug problem in Europe (22 language versions, publication and interactive website)

| — | Annual report on selected issues (EN, publication and interactive website) |
| --- | --- |

—

Annual report on selected issues (EN, publication and interactive website)

| — | Statistical bulletin and interactive website containing over 200 tables, 100 graphs and PDF files |
| --- | --- |

—

Statistical bulletin and interactive website containing over 200 tables, 100 graphs and PDF files

| — | General activity report (annual, EN) |
| --- | --- |

—

General activity report (annual, EN)

| — | Drugnet Europe newsletter (4 issues, two of them in five languages and two in EN, 12 products) |
| --- | --- |

—

Drugnet Europe newsletter (4 issues, two of them in five languages and two in EN, 12 products)

| — | Technical and scientific studies and articles (28) |
| --- | --- |

—

Technical and scientific studies and articles (28)

Other websites:

Set-up/updating/content development:

| — | Country situation summaries |
| --- | --- |

—

Country situation summaries

| — | Country data profiles |
| --- | --- |

—

Country data profiles

| — | Drug treatment overviews |
| --- | --- |

—

Drug treatment overviews

| — | European legal database on drugs |
| --- | --- |

—

European legal database on drugs

| — | Evaluation instruments bank |
| --- | --- |

—

Evaluation instruments bank

| — | Exchange on drug demand reduction action |
| --- | --- |

—

Exchange on drug demand reduction action

Promotional brochures (3 products)

Media products (110 miscellaneous products)

Participation in international conferences/meetings (75)

Organisation of technical and scientific meetings (24)

Source: Information supplied by the Centre.

EUROPEAN MONITORING CENTRE FOR DRUGS AND DRUG ADDICTION

Source: Centre data — These tables summarise the data provided by the Centre in its annual accounts.

Table 2

Implementation of the budget for the financial year 2005

| (1000 euro) |
| --- |
| Revenue | Expenditure |
| Source of revenue | Revenue entered in the final budget for the financial year | Revenue received | Allocation of expenditure | Final budget appropriations for the financial year | Appropriations carried over from the previous financial year | Available appropriations
  (appropriations for the financial year plus appropriations for the previous financial year) |
| entered | committed | paid | carried over | cancelled | available | paid | cancelled | available | committed | paid | carried over | cancelled |
| Community subsidies | 12 000 | 12 000 | Title I
  Staff (NDA) | 6 194 | 5 932 | 5 762 | 154 | 279 | 122 | 101 | 21 | 6 316 | 6 054 | 5 863 | 154 | 300 |
| Own revenue | 516 | 516 | Title II
  Administration (NDA) | 1 791 | 1 720 | 1 070 | 650 | 71 | 356 | 332 | 24 | 2 147 | 2 076 | 1 402 | 650 | 95 |
| Other revenue | | 8 | Title III
  Operating activities (DA) | | | | | | | | | | | | | |
| — CA | 4 531 | 4 298 | | | 233 | | | | 4 531 | 4 298 | | | 233 |
| — PA | 4 531 | | 4 085 | | 446 | 1 260 | 66 | 1 194 | 5 791 | | 4 151 | | 1 640 |
| Allocated revenue (Phare) | 300 | 190 | Allocated revenue (Phare) | 300 | 49 | 16 | 284 | | | | | 300 | 49 | 16 | 284 | |
| Total | 12 816 | 12 714 | Total CA | 12 816 | 11 999 | | 1 088 | 583 | 478 | | 45 | 13 294 | 12 477 | | 1 088 | 628 |
| Total PA | 12 816 | | 10 933 | 1 088 | 796 | 1 738 | 499 | 1 239 | 14 554 | | 11 432 | 1 088 | 2 035 |
| NDA | : | non-differentiated appropriations (commitment appropriations equal payment appropriations). |
| DA | : | differentiated appropriations (commitment appropriations and payment appropriations may differ). |
| CA | : | commitment appropriations in a system of differentiated appropriations. |
| PA | : | payment appropriations in a system of differentiated appropriations. |

(1000 euro)

Revenue

Expenditure

Source of revenue

Revenue entered in the final budget for the financial year

Revenue received

Allocation of expenditure

Final budget appropriations for the financial year

Appropriations carried over from the previous financial year

Available appropriations

(appropriations for the financial year plus appropriations for the previous financial year)

entered

committed

paid

carried over

cancelled

available

paid

cancelled

available

committed

paid

carried over

cancelled

Community subsidies

12 000

12 000

Title I

Staff (NDA)

6 194

5 932

5 762

154

279

122

101

21

6 316

6 054

5 863

154

300

Own revenue

516

516

Title II

Administration (NDA)

1 791

1 720

1 070

650

71

356

332

24

2 147

2 076

1 402

650

95

Other revenue

8

Title III

Operating activities (DA)

— CA

4 531

4 298

233

4 531

4 298

233

— PA

4 531

4 085

446

1 260

66

1 194

5 791

4 151

1 640

Allocated revenue (Phare)

300

190

Allocated revenue (Phare)

300

49

16

284

300

49

16

284

Total

12 816

12 714

Total CA

12 816

11 999

1 088

583

478

45

13 294

12 477

1 088

628

Total PA

12 816

10 933

1 088

796

1 738

499

1 239

14 554

11 432

1 088

2 035

NDA

:

non-differentiated appropriations (commitment appropriations equal payment appropriations).

DA

:

differentiated appropriations (commitment appropriations and payment appropriations may differ).

CA

:

commitment appropriations in a system of differentiated appropriations.

PA

:

payment appropriations in a system of differentiated appropriations.

Table 3

Revenue and expenditure account for the financial year 2005 (1)

| (1000 euro) |
| --- |
| | 2005 |
| Operating revenue |
| Community subsidies | 10 592 |
| Other subsidies/revenue | 312 |
| Total (a) | 10 904 |
| Operating expenditure |
| Staff | 5 843 |
| Administration | 2 269 |
| Operating activities | 4 181 |
| Total (b) | 12 293 |
| Operating result (c = a – b) | –1 389 |
| Other income (d) | 0 |
| Other charges (e) | 35 |
| Economic result (f = c + d – e) | –1 424 |

(1000 euro)

2005

Operating revenue

Community subsidies

10 592

Other subsidies/revenue

312

Total (a)

10 904

Operating expenditure

Staff

5 843

Administration

2 269

Operating activities

4 181

Total (b)

12 293

Operating result (c = a – b)

–1 389

Other income (d)

0

Other charges (e)

35

Economic result (f = c + d – e)

–1 424

Table 4

Balance sheet at 31 December 2005 and 31 December 2004 (2)

| (1000 euro) |
| --- |
| | 2005 | 2004 |
| Assets |
| Fixed assets | 2 989 | 3 058 |
| Stocks | | |
| Receivables and long-term assets | 224 | 619 |
| Liquid assets | 3 005 | 3 644 |
| Total | 6 218 | 7 321 |
| Liabilities |
| Cumulative results of previous years | 4 296 | 4 296 |
| Result for the year | –1 424 | 0 |
| Long-term liabilities | | |
| Current liabilities | 3 346 | 3 025 |
| Total | 6 218 | 7 321 |

(1000 euro)

2005

2004

Assets

Fixed assets

2 989

3 058

Stocks

Receivables and long-term assets

224

619

Liquid assets

3 005

3 644

Total

6 218

7 321

Liabilities

Cumulative results of previous years

4 296

4 296

Result for the year

–1 424

0

Long-term liabilities

Current liabilities

3 346

3 025

Total

6 218

7 321

---

(1)  Data for the financial year 2004 are not shown as they are not comparable with data for 2005 because of the change in the accounting methods applied.

(2)  Data for the financial year 2004 have been restated to make them comparable with the 2005 data.

---

THE CENTRE'S REPLIES

| 7. | The Monitoring Centre has taken note of the Court's observation and has taken steps to improve the planning of its calls for tenders, spreading them more evenly over the year. The Monitoring Centre will continue its efforts which, in 2005, allowed it to increase the rate of utilisation of payment appropriations compared with 2004 levels (from 77 % to 85 %), especially with regard to administrative expenditure (Title II). |
| --- | --- |

7.

The Monitoring Centre has taken note of the Court's observation and has taken steps to improve the planning of its calls for tenders, spreading them more evenly over the year. The Monitoring Centre will continue its efforts which, in 2005, allowed it to increase the rate of utilisation of payment appropriations compared with 2004 levels (from 77 % to 85 %), especially with regard to administrative expenditure (Title II).

| 8. | The Monitoring Centre has taken note of the Court's observation and will continue to develop its activity-based management system. In place since 2001, this system calculates the cost of the Monitoring Centre's projects and programmes, though strictly speaking it is not an analytical accounting system. |
| --- | --- |

8.

The Monitoring Centre has taken note of the Court's observation and will continue to develop its activity-based management system. In place since 2001, this system calculates the cost of the Monitoring Centre's projects and programmes, though strictly speaking it is not an analytical accounting system.

| 9. | On 22 March 2006, the Monitoring Centre implemented a double signature system for the management of its bank accounts. |
| --- | --- |

9.

On 22 March 2006, the Monitoring Centre implemented a double signature system for the management of its bank accounts.

| 10. | From 2006, the Monitoring Centre has established an automatic link between budgetary and general accounting. Reconciliation between the accounts and the inventory is scheduled for the month of January following the end of the relevant financial year. In addition, in July 2006 the Monitoring Centre completed a physical check of its inventory items. The results of this check were entered in a dedicated computer system. |
| --- | --- |

10.

From 2006, the Monitoring Centre has established an automatic link between budgetary and general accounting. Reconciliation between the accounts and the inventory is scheduled for the month of January following the end of the relevant financial year. In addition, in July 2006 the Monitoring Centre completed a physical check of its inventory items. The results of this check were entered in a dedicated computer system.

| 11. | Pending a final agreement with the Commission on the rules for implementing the Staff Regulations, the Monitoring Centre will continue to apply the principles governing Community recruitment procedures to all its selection procedures. As its staff complement is relatively small, the Monitoring Centre ensures at all times that a representative of the Staff Committee participates in the selection committees as a full member. In future, the Monitoring Centre will state explicit reasons why it selected the successful candidate if the selection deviates from the ranking drawn up by the selection committee. |
| --- | --- |

11.

Pending a final agreement with the Commission on the rules for implementing the Staff Regulations, the Monitoring Centre will continue to apply the principles governing Community recruitment procedures to all its selection procedures. As its staff complement is relatively small, the Monitoring Centre ensures at all times that a representative of the Staff Committee participates in the selection committees as a full member. In future, the Monitoring Centre will state explicit reasons why it selected the successful candidate if the selection deviates from the ranking drawn up by the selection committee.

| 12. | The Monitoring Centre terminated the mission with effect from 31 May 2005. At the end of 2005, the Monitoring Centre decided, in accordance with Article 38 of the Staff Regulations, to second the staff member in question to the Commission for a duration of nine months, without the possibility of extension. As agreed with the Commission, the salary of this staff member would be paid by the Monitoring Centre. |
| --- | --- |

12.

The Monitoring Centre terminated the mission with effect from 31 May 2005. At the end of 2005, the Monitoring Centre decided, in accordance with Article 38 of the Staff Regulations, to second the staff member in question to the Commission for a duration of nine months, without the possibility of extension. As agreed with the Commission, the salary of this staff member would be paid by the Monitoring Centre.

| 13. | The Monitoring Centre has taken note of the Court's remarks and has taken the following steps in particular:






  — | to improve the planning of its calls for tenders, above all to keep emergency cases to a minimum, |
| --- | --- | --- |

13.

The Monitoring Centre has taken note of the Court's remarks and has taken the following steps in particular:

—

to improve the planning of its calls for tenders, above all to keep emergency cases to a minimum,

| — | to provide a more structured use of framework contracts, |
| --- | --- |

—

to provide a more structured use of framework contracts,

| — | to formalise the appointment of members of the tender opening and evaluation committees, |
| --- | --- |

—

to formalise the appointment of members of the tender opening and evaluation committees,

| — | to provide greater support to authorising officers by delegation and to managers in the awarding of contracts and the granting of subsidies. |
| --- | --- |

—

to provide greater support to authorising officers by delegation and to managers in the awarding of contracts and the granting of subsidies.

The Monitoring Centre believes that the supplementary contract referred to by the Court actually involved recurring services which could be the subject of an additional contract without the ceilings laid down for supplementary contracts. The above measures should reduce — or even eliminate — this type of contract.

---

| 19.12.2006 | EN | Official Journal of the European Union | C 312/93 |
| --- | --- | --- | --- |

19.12.2006

EN

Official Journal of the European Union

C 312/93

---

REPORT

on the annual accounts of the European Monitoring Centre on Racism and Xenophobia for the financial year 2005 together with the Centre's replies

(2006/C 312/16)

CONTENTS

| 1-2 | INTRODUCTION |
| --- | --- |

1-2

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

3-6

| 7-12 | OBSERVATIONS |
| --- | --- |

7-12

Tables 1 to 4

The Centre's replies

INTRODUCTION

| 1. | The European Monitoring Centre on Racism and Xenophobia (hereinafter the Centre) was established by Council Regulation (EC) No 1035/97 of 2 June 1997 (1). The Centre's primary tasks are to provide the Union and the Member States with reliable information on racism, xenophobia and anti-Semitism in the Union and to cooperate with the Council of Europe in these areas. |
| --- | --- |

1.

The European Monitoring Centre on Racism and Xenophobia (hereinafter the Centre) was established by Council Regulation (EC) No 1035/97 of 2 June 1997 (1). The Centre's primary tasks are to provide the Union and the Member States with reliable information on racism, xenophobia and anti-Semitism in the Union and to cooperate with the Council of Europe in these areas.

| 2. | Table 1 summarises the Centre's competences and activities. Key information from the financial statements drawn up by the Centre for the financial year 2005 is shown in Tables 2, 3 and 4. |
| --- | --- |

2.

Table 1 summarises the Centre's competences and activities. Key information from the financial statements drawn up by the Centre for the financial year 2005 is shown in Tables 2, 3 and 4.

STATEMENT OF ASSURANCE

| 3. | This Statement 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 Centre's accounts, as required by Article 248 of the Treaty establishing the European Community. |
| --- | --- |

3.

This Statement 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 Centre's accounts, as required by Article 248 of the Treaty establishing the European Community.

| 4. | The Centre's accounts for the financial year ended 31 December 2005 (3) were drawn up by its Director, pursuant to Article 12 of Regulation (EC) No 1035/97, and sent to the Court, which is required to provide a statement of assurance on their reliability and on the legality and regularity of the underlying transactions. |
| --- | --- |

4.

The Centre's accounts for the financial year ended 31 December 2005 (3) were drawn up by its Director, pursuant to Article 12 of Regulation (EC) No 1035/97, and sent to the Court, which is required to provide a statement of assurance on their reliability and on the legality and regularity of the underlying transactions.

| 5. | The Court conducted its audit in accordance with its policies and standards, which are based on international auditing standards that have been adapted to the Community context. The audit was planned and performed to obtain reasonable assurance that the accounts are reliable and the underlying transactions are legal and regular. |
| --- | --- |

5.

The Court conducted its audit in accordance with its policies and standards, which are based on international auditing standards that have been adapted to the Community context. The audit was planned and performed to obtain reasonable assurance that the accounts are reliable and the underlying transactions are legal and regular.

| 6. | The Court has thus obtained a reasonable basis for the statement expressed below. |
| --- | --- |

6.

The Court has thus obtained a reasonable basis for the statement expressed below.

Reliability of the accountsThe Centre's accounts for the financial year ended 31 December 2005 are, in all material respects, reliable.Legality and regularity of the underlying transactionsThe transactions underlying the Centre'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. | Although the rate of commitment for the appropriations for the financial year 2005 was over 90 %, it was found that more than 50 % of the commitments for administrative expenditure were carried over and that in general there was a high rate of cancellation of the appropriations carried over (between 15 % and 25 %, depending on the title). This situation shows that there is still a need for the Centre to improve its expenditure planning and the way it monitors the implementation of this expenditure. Transfers between budget headings need to be justified and documented in accordance with the provisions in force. |
| --- | --- |

7.

Although the rate of commitment for the appropriations for the financial year 2005 was over 90 %, it was found that more than 50 % of the commitments for administrative expenditure were carried over and that in general there was a high rate of cancellation of the appropriations carried over (between 15 % and 25 %, depending on the title). This situation shows that there is still a need for the Centre to improve its expenditure planning and the way it monitors the implementation of this expenditure. Transfers between budget headings need to be justified and documented in accordance with the provisions in force.

| 8. | The Court noted that no activity-based management had been brought in, despite the Centre's financial regulation making provision for its introduction, on the lines of that applied to the general budget, with a view to improving the monitoring of performance. In this context, achieving the Centre's aims should not mean merely carrying out a series of tasks. It should rather be seen as contributing to the goals laid down in its basic Regulation. The Centre's work programme should, in principle, express this contribution in operational and measurable terms. |
| --- | --- |

8.

The Court noted that no activity-based management had been brought in, despite the Centre's financial regulation making provision for its introduction, on the lines of that applied to the general budget, with a view to improving the monitoring of performance. In this context, achieving the Centre's aims should not mean merely carrying out a series of tasks. It should rather be seen as contributing to the goals laid down in its basic Regulation. The Centre's work programme should, in principle, express this contribution in operational and measurable terms.

| 9. | The Centre had no system for planning and managing its equipment acquisitions. Furthermore, it did not make any cyclical checks on its inventory, although this would have improved the inventory's reliability. |
| --- | --- |

9.

The Centre had no system for planning and managing its equipment acquisitions. Furthermore, it did not make any cyclical checks on its inventory, although this would have improved the inventory's reliability.

| 10. | The Centre's internal control system suffered from various shortcomings. The financial circuits set up by the authorising officer had not been described. The systems whereby the authorising officer and his delegatees supplied information to the accounting officer had in particular not been validated by the latter. The principle of the segregation of duties was not applied strictly, especially between the duties of initiation and verification. Furthermore, for commitments the lists of ex ante verifications should include sound financial management criteria. |
| --- | --- |

10.

The Centre's internal control system suffered from various shortcomings. The financial circuits set up by the authorising officer had not been described. The systems whereby the authorising officer and his delegatees supplied information to the accounting officer had in particular not been validated by the latter. The principle of the segregation of duties was not applied strictly, especially between the duties of initiation and verification. Furthermore, for commitments the lists of ex ante verifications should include sound financial management criteria.

| 11. | The rule whereby members of the selection boards must always be of a grade equivalent to or higher than that of the post to be filled was not always complied with. |
| --- | --- |

11.

The rule whereby members of the selection boards must always be of a grade equivalent to or higher than that of the post to be filled was not always complied with.

| 12. | The invitations to tender issued by the Centre do not offer much by way of explanation as regards the minimum quality of bids and the weighting of price factors. As a result of this situation, an adequate level of transparency cannot be guaranteed and risks are entailed as regards the quality of the products and services to be provided. Barring a specific reason to the contrary, the price-quality ratio method should be used as it ensures that the goods and services to be purchased are of the highest possible quality. |
| --- | --- |

12.

The invitations to tender issued by the Centre do not offer much by way of explanation as regards the minimum quality of bids and the weighting of price factors. As a result of this situation, an adequate level of transparency cannot be guaranteed and risks are entailed as regards the quality of the products and services to be provided. Barring a specific reason to the contrary, the price-quality ratio method should be used as it ensures that the goods and services to be purchased are of the highest possible quality.

This report was adopted by the Court of Auditors in Luxembourg at its meeting of 28 September 2006.

For the Court of Auditors

Hubert WEBER

President

---

(1)  OJ L 151, 10.6.1997, p. 6.

1

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

2

(3)  These accounts were drawn up on 3 May 2006 and received by the Court on 29 June 2006.

3

---

Table 1

European Monitoring Centre on Racism and Xenophobia (Vienna)

| Areas of Community competence deriving from the Treaty | Competences of the Centre as specified in the Council Regulation
  (Council Regulation (EC) No 1035/97 of 2 June 1997) | Governance | Resources made available to the Centre (2004) | Products and services supplied |
| --- | --- | --- | --- | --- |
| Collection of information

  The Commission may, within the limits and under conditions laid down by the Council in accordance with the provisions of this Treaty, collect any information and carry out any checks required for the performance of the tasks entrusted to it.

  (Article 284) | Objectives:







  — | to provide the Community and its Member States with objective, reliable and comparable data at European level on the phenomena of racism, xenophobia and anti-Semitism, |

Areas of Community competence deriving from the Treaty

Competences of the Centre as specified in the Council Regulation

(Council Regulation (EC) No 1035/97 of 2 June 1997)

Governance

Resources made available to the Centre (2004)

Products and services supplied

Collection of information

The Commission may, within the limits and under conditions laid down by the Council in accordance with the provisions of this Treaty, collect any information and carry out any checks required for the performance of the tasks entrusted to it.

(Article 284)

Objectives:

—

to provide the Community and its Member States with objective, reliable and comparable data at European level on the phenomena of racism, xenophobia and anti-Semitism,

| — | close cooperation with the Council of Europe in order to avoid duplication and obtain added value. |
| --- | --- |

—

close cooperation with the Council of Europe in order to avoid duplication and obtain added value.

Tasks:

| — | to study the extent and development of the phenomena of racism and xenophobia, |
| --- | --- |

—

to study the extent and development of the phenomena of racism and xenophobia,

| — | to collect and analyse information, via the European Racism and Xenophobia Information Network (RAXEN), |
| --- | --- |

—

to collect and analyse information, via the European Racism and Xenophobia Information Network (RAXEN),

| — | to carry out scientific surveys, |
| --- | --- |

—

to carry out scientific surveys,

| — | to encourage widespread dissemination of such information, |
| --- | --- |

—

to encourage widespread dissemination of such information,

| — | to formulate opinions for the Community and its Member States, |
| --- | --- |

—

to formulate opinions for the Community and its Member States,

| — | to develop indicators and criteria to improve the comparability of data, |
| --- | --- |

—

to develop indicators and criteria to improve the comparability of data,

| — | to publish an annual report on the situation regarding racism and xenophobia. |
| --- | --- |

—

to publish an annual report on the situation regarding racism and xenophobia.

1. Management Board

Composition:

one independent person appointed by each Member State, one independent person appointed by the European Parliament, one independent person appointed by the Council of Europe and a representative of the Commission.

Duties:

to adopt the work programme and the general annual report. To adopt the final budget and the establishment plan. To give an opinion on the final accounts.

2. Executive Board

Composition:

| — | Chairman of the Management Board, |
| --- | --- |

—

Chairman of the Management Board,

| — | one representative of the Council of Europe, |
| --- | --- |

—

one representative of the Council of Europe,

| — | one representative of the Commission, |
| --- | --- |

—

one representative of the Commission,

| — | two other members of the Management Board. |
| --- | --- |

—

two other members of the Management Board.

3. Director

Appointed by the Management Board on a proposal from the Commission.

4. External audit

European Court of Auditors.

5. Internal control

The Commission's Internal Audit Service.

6. Discharge authority

Parliament on a recommendation from the Council.

2005 final budget:

8,279 million euro (7,9 million euro) including Community contribution: 100 % (98,7 %).

Staff numbers at 31 December 2005:

37 (34) posts in the establishment plan,

posts occupied: 35 (30)

+4 (4) other staff (auxiliary contracts, seconded national experts, local and employment-agency staff)

Total staff: 41 (34)

assigned to the following duties:

operational: 24 (21)

administrative: 13 (8)

mixed: 4 (5).

RAXEN:

Number of contributions through the 25 national focal points: 400

Number of meetings: 5

RESEARCH REPORTS:

Number of reports: 13

Number of meetings: 7

Annual Reports: 2

EUMC Newsletter: 5

Equal Voices: 2

COOPERATION WITH THE MEMBER STATES AND THE OTHER INSTITUTIONS (number of events organised jointly):

| — | Member States: 4 |
| --- | --- |

—

Member States: 4

| — | Commission: 14 |
| --- | --- |

—

Commission: 14

| — | European Parliament: 8 |
| --- | --- |

—

European Parliament: 8

| — | COR: 3 |
| --- | --- |

—

COR: 3

| — | EESC: 3 |
| --- | --- |

—

EESC: 3

| — | Council of Europe: 10 |
| --- | --- |

—

Council of Europe: 10

| — | OSCE: 3 |
| --- | --- |

—

OSCE: 3

| — | UN: 3 |
| --- | --- |

—

UN: 3

| — | Inter-agency: 3 |
| --- | --- |

—

Inter-agency: 3

| — | NRT: 6 |
| --- | --- |

—

NRT: 6

| — | ERT: 1 |
| --- | --- |

—

ERT: 1

Source: Information supplied by the Centre.

EUROPEAN MONITORING CENTRE ON RACISM AND XENOPHOBIA

Source: Data supplied by the Centre. These tables summarise the data supplied by the Centre in its annual accounts.

Table 2

Implementation of the budget for the financial year 2005

| (1000 euro) |
| --- |
| Revenue | Expenditure |
| Source of revenue | Revenue entered in the final budget for the financial year | Revenue received | Allocation of expenditure | Final budget appropriations for the financial year | Appropriations carried over from the previous financial year | Available appropriations
  (appropriations for the financial year and for the previous financial year) |
| final | committed | paid | carried over | cancelled | outstanding commitments | paid | cancelled | appropriations | committed | paid | carried over | cancelled |
| Community subsidies (1) | 8 189 | 8 189 | Title I
  Staff | 3 152 | 3 078 | 3 008 | 70 | 74 | 85 | 71 | 14 | 3 237 | 3 163 | 3 079 | 70 | 88 |
| Allocated revenue (Phare) | 90 | 90 | Title II
  Administration | 1 222 | 1 132 | 551 | 581 | 91 | 37 | 30 | 7 | 1 259 | 1 169 | 581 | 581 | 98 |
| Other revenue | 0 | 151 | Title III
  Operating activities | 3 815 | 3 398 | 2 731 | 667 | 416 | 745 | 556 | 189 | 4 560 | 4 143 | 3 287 | 667 | 605 |
| | | | Allocated revenue (Phare and other) | 90 | 0 | 0 | 90 | 0 | 0 | 0 | 0 | 90 | 0 | 0 | 90 | 0 |
| Total | 8 279 | 8 430 | Total | 8 279 | 7 608 | 6 290 | 1 408 | 581 | 867 | 657 | 210 | 9 146 | 8 475 | 6 947 | 1 408 | 791 |

(1000 euro)

Revenue

Expenditure

Source of revenue

Revenue entered in the final budget for the financial year

Revenue received

Allocation of expenditure

Final budget appropriations for the financial year

Appropriations carried over from the previous financial year

Available appropriations

(appropriations for the financial year and for the previous financial year)

final

committed

paid

carried over

cancelled

outstanding commitments

paid

cancelled

appropriations

committed

paid

carried over

cancelled

Community subsidies (1)

8 189

8 189

Title I

Staff

3 152

3 078

3 008

70

74

85

71

14

3 237

3 163

3 079

70

88

Allocated revenue (Phare)

90

90

Title II

Administration

1 222

1 132

551

581

91

37

30

7

1 259

1 169

581

581

98

Other revenue

0

151

Title III

Operating activities

3 815

3 398

2 731

667

416

745

556

189

4 560

4 143

3 287

667

605

Allocated revenue (Phare and other)

90

0

0

90

0

0

0

0

90

0

0

90

0

Total

8 279

8 430

Total

8 279

7 608

6 290

1 408

581

867

657

210

9 146

8 475

6 947

1 408

791

Table 3

Revenue and expenditure account for the financial year 2005 (2)

| (1000 euro) |
| --- |
| | 2005 |
| Operating revenue |
| Community subsidies | 7 466 |
| Other subsidies/revenue | 14 |
| Total (a) | 7 480 |
| Operating expenditure |
| Staff | 2 729 |
| Administration | 1 029 |
| Operating activities | 3 304 |
| Total (b) | 7 062 |
| Economic result (c = a – b) | 418 |

(1000 euro)

2005

Operating revenue

Community subsidies

7 466

Other subsidies/revenue

14

Total (a)

7 480

Operating expenditure

Staff

2 729

Administration

1 029

Operating activities

3 304

Total (b)

7 062

Economic result (c = a – b)

418

Table 4

Balance sheet at 31 December 2005 and 2004 (3)

| (1000 euro) |
| --- |
| | 2005 | 2004 |
| Assets |
| Fixed assets | 152 | 123 |
| Receivables | 361 | 366 |
| Cash and cash equivalents | 2 832 | 1 279 |
| Total | 3 345 | 1 768 |
| Liabilities |
| Cumulative results for previous years | 725 | 725 |
| Result for the year | 418 | 0 |
| Current liabilities | 2 202 | 1 043 |
| Total | 3 345 | 1 768 |

(1000 euro)

2005

2004

Assets

Fixed assets

152

123

Receivables

361

366

Cash and cash equivalents

2 832

1 279

Total

3 345

1 768

Liabilities

Cumulative results for previous years

725

725

Result for the year

418

0

Current liabilities

2 202

1 043

Total

3 345

1 768

---

(1)  Including subsidies on behalf of the European Economic Area.

(2)  The data for the financial year 2004 are not shown as they are not comparable with those for 2005 because of a change in the accounting methods used.

(3)  The data for the financial year 2004 have been restated to make them comparable with those for 2005.

---

THE CENTRE'S REPLIES

| 7. | The high rate of the administrative appropriations carried forward is due to the fact that the Procurement Section was created late in 2005. Tenders were launched after this, in order to ensure the legality of the procedures. A procedure has been put in place to decrease the level of cancelled carry-overs. Future budgetary transfers will be fully documented. |
| --- | --- |

7.

The high rate of the administrative appropriations carried forward is due to the fact that the Procurement Section was created late in 2005. Tenders were launched after this, in order to ensure the legality of the procedures. A procedure has been put in place to decrease the level of cancelled carry-overs. Future budgetary transfers will be fully documented.

| 8. | The Annual Work Programme 2006 has been prepared in a format which meets the needs of Article 40 of the Framework FR, setting the key activities, objectives, tasks, output, performance indicators, and outcome/impact of the work of the Centre. Consequently, the Annual Activity Report for year 2006 will be drawn corresponding to the structure of the Work Programme thus providing the required performance indicators and performance review based on quantifiable data. |
| --- | --- |

8.

The Annual Work Programme 2006 has been prepared in a format which meets the needs of Article 40 of the Framework FR, setting the key activities, objectives, tasks, output, performance indicators, and outcome/impact of the work of the Centre. Consequently, the Annual Activity Report for year 2006 will be drawn corresponding to the structure of the Work Programme thus providing the required performance indicators and performance review based on quantifiable data.

| 9. | An inventory management application has been procured and is currently configured and installed. An inventory count is planned to be performed in the last quarter of the year, as soon as the application has been installed and the preparatory works have been finalised. |
| --- | --- |

9.

An inventory management application has been procured and is currently configured and installed. An inventory count is planned to be performed in the last quarter of the year, as soon as the application has been installed and the preparatory works have been finalised.

| 10. | In February 2006, the financial workflows were changed to improve internal controls over transactions and adhere to the requirements of the FR. The abovementioned changes have been documented in a series of Instruction Notes signed by the Director, after consultation of the Accounting Officer and the Internal Auditor of the EUMC. The new workflows were tested in a test SI2 universe and the validation of the test is documented. |
| --- | --- |

10.

In February 2006, the financial workflows were changed to improve internal controls over transactions and adhere to the requirements of the FR. The abovementioned changes have been documented in a series of Instruction Notes signed by the Director, after consultation of the Accounting Officer and the Internal Auditor of the EUMC. The new workflows were tested in a test SI2 universe and the validation of the test is documented.

| 11. | Whilst the EUMC's staffing table foresees a total of only 37 posts, it is very difficult and, in some cases impossible, to constitute boards with agents having at least the same grade of the position to be filled. |
| --- | --- |

11.

Whilst the EUMC's staffing table foresees a total of only 37 posts, it is very difficult and, in some cases impossible, to constitute boards with agents having at least the same grade of the position to be filled.

| 12. | The Centre will consider improving the clarity of information provided in the call for tenders and shall apply the method of ‘price/quality’ ratio where it is deemed to be appropriate. |
| --- | --- |

12.

The Centre will consider improving the clarity of information provided in the call for tenders and shall apply the method of ‘price/quality’ ratio where it is deemed to be appropriate.

---

| 19.12.2006 | EN | Official Journal of the European Union | C 312/99 |
| --- | --- | --- | --- |

19.12.2006

EN

Official Journal of the European Union

C 312/99

---

REPORT

on the annual accounts of the Community Plant Variety Office for the financial year 2005 together with the Office's replies

(2006/C 312/17)

CONTENTS

| 1-2 | INTRODUCTION |
| --- | --- |

1-2

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

3-6

| 7-10 | OBSERVATIONS |
| --- | --- |

7-10

Tables 1 to 4

The Office's replies

INTRODUCTION

| 1. | The Community Plant Variety Office (hereinafter the Office) was created by Council Regulation (EC) No 2100/94 of 27 July 1994 (1). Its main task is to register and examine applications for the grant of Community industrial property rights for plant varieties and to ensure that the necessary technical examinations are carried out by the competent offices in the Member States. |
| --- | --- |

1.

The Community Plant Variety Office (hereinafter the Office) was created by Council Regulation (EC) No 2100/94 of 27 July 1994 (1). Its main task is to register and examine applications for the grant of Community industrial property rights for plant varieties and to ensure that the necessary technical examinations are carried out by the competent offices in the Member States.

| 2. | Table 1 summarises the Office's competences and activities. Key information from the financial statements drawn up by the Office for the financial year 2005 is presented in Tables 2, 3 and 4. |
| --- | --- |

2.

Table 1 summarises the Office's competences and activities. Key information from the financial statements drawn up by the Office for the financial year 2005 is presented in Tables 2, 3 and 4.

STATEMENT OF ASSURANCE

| 3. | This Statement is addressed to the Administrative Council of the Office in accordance with Article 111 of Council Regulation (EC) No 2100/94. |
| --- | --- |

3.

This Statement is addressed to the Administrative Council of the Office in accordance with Article 111 of Council Regulation (EC) No 2100/94.

| 4. | The Office's accounts for the financial year ended 31 December 2005 (2) were drawn up by its President, pursuant to Article 112 of Regulation (EC) No 2100/94, 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. |
| --- | --- |

4.

The Office's accounts for the financial year ended 31 December 2005 (2) were drawn up by its President, pursuant to Article 112 of Regulation (EC) No 2100/94, 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.

| 5. | The Court conducted an audit in accordance with its policies and standards, which are based on international auditing standards that have been adapted to the Community context. The audit was planned and performed to obtain reasonable assurance that the accounts are reliable and the underlying transactions are legal and regular. |
| --- | --- |

5.

The Court conducted an audit in accordance with its policies and standards, which are based on international auditing standards that have been adapted to the Community context. The audit was planned and performed to obtain reasonable assurance that the accounts are reliable and the underlying transactions are legal and regular.

| 6. | The Court has thus obtained a reasonable basis for the statement expressed below. |
| --- | --- |

6.

The Court has thus obtained a reasonable basis for the statement expressed below.

Reliability of the accountsThe Office's accounts for the financial year ended 31 December 2005 are, in all material respects, reliable.Legality and regularity of the underlying transactionsThe transactions underlying the Office'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 Office's budget for the financial year 2005 does not observe the principle of equilibrium between revenue and payment appropriations. As regards the implementation of the budget, the overall level of utilisation of the payment appropriations for the financial year was 85 %. The same appropriations gave rise to cancellations for operating activities (9 %) and especially administrative expenditure (20 %). These factors show that the Office should improve the planning and follow-up of its work to prevent appropriations from being needlessly mobilised. |
| --- | --- |

7.

The Office's budget for the financial year 2005 does not observe the principle of equilibrium between revenue and payment appropriations. As regards the implementation of the budget, the overall level of utilisation of the payment appropriations for the financial year was 85 %. The same appropriations gave rise to cancellations for operating activities (9 %) and especially administrative expenditure (20 %). These factors show that the Office should improve the planning and follow-up of its work to prevent appropriations from being needlessly mobilised.

| 8. | In 2005, numerous difficulties affected the production of the annual accounts, and it was not possible to supply full accounts within the regulatory deadlines. The Office does not have reliable tools to reconcile the data in its financial management systems (budgetary and general accounting, register of plant varieties). This situation increases the risks of errors in the accounts. |
| --- | --- |

8.

In 2005, numerous difficulties affected the production of the annual accounts, and it was not possible to supply full accounts within the regulatory deadlines. The Office does not have reliable tools to reconcile the data in its financial management systems (budgetary and general accounting, register of plant varieties). This situation increases the risks of errors in the accounts.

| 9. | General implementing rules governing the recruitment and grading of staff should be adopted (3) to guarantee the objective and transparent assessment of candidates. An examination of recruitment procedures revealed that the criteria for assessing candidates were not determined beforehand. |
| --- | --- |

9.

General implementing rules governing the recruitment and grading of staff should be adopted (3) to guarantee the objective and transparent assessment of candidates. An examination of recruitment procedures revealed that the criteria for assessing candidates were not determined beforehand.

| 10. | Anomalies were found in the award of contracts. In three of the 12 evaluation procedures that were examined, the deadline for delivery, although adopted as a criterion for awarding contracts, was not taken into consideration when selecting the successful bids (4). Two framework contracts were concluded for a maximum period of five years although this period may not exceed four years. |
| --- | --- |

10.

Anomalies were found in the award of contracts. In three of the 12 evaluation procedures that were examined, the deadline for delivery, although adopted as a criterion for awarding contracts, was not taken into consideration when selecting the successful bids (4). Two framework contracts were concluded for a maximum period of five years although this period may not exceed four years.

This report was adopted by the Court of Auditors in Luxembourg at its meeting of 28 September 2006.

For the Court of Auditors

Hubert WEBER

President

---

(1)  OJ L 227, 1.9.1994, p. 27.

1

(2)  These accounts were drawn up on 21 June 2006 and received by the Court on 4 July 2006.

2

(3)  Article 110 of the Staff Regulations of officials and Article 12(5) of the Conditions of Employment of Other Servants.

3

(4)  Article 117(1) of the implementing rules for the Financial Regulation (for the decentralised bodies, the procedures for awarding contracts are governed by the general Financial Regulation and its implementing rules (Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 (OJ L 248, 16.9.2002), and Commission Regulation (EC, Euratom) No 2342/2002 of 23 December 2002 (OJ L 357, 31.12.2002)).

4

---

Table 1

Community Plant Variety Office (Angers)

| Areas of Community competence deriving from the Treaty | Competences of the Office as defined in Council Regulation (EC) No 2100/94 of 27 July 1994 | Governance | Resources made available to the Office in 2005

  (2004) | Products and services supplied in 2005

  (2004) |
| --- | --- | --- | --- | --- |
| Free movement of goods

  Prohibitions or restrictions justified on grounds of the protection of industrial and commercial property shall not constitute a means of arbitrary discrimination or a disguised restriction on trade between the Member States.

  (Extract from Article 30 of the Treaty) | Objectives:

  to apply the system of Community plant variety rights as the sole and exclusive form of Community industrial property rights for plant varieties. | Tasks:







  — | to decide whether to refuse or grant applications for Community plant variety rights, |

Areas of Community competence deriving from the Treaty

Competences of the Office as defined in Council Regulation (EC) No 2100/94 of 27 July 1994

Governance

Resources made available to the Office in 2005

(2004)

Products and services supplied in 2005

(2004)

Free movement of goods

Prohibitions or restrictions justified on grounds of the protection of industrial and commercial property shall not constitute a means of arbitrary discrimination or a disguised restriction on trade between the Member States.

(Extract from Article 30 of the Treaty)

Objectives:

to apply the system of Community plant variety rights as the sole and exclusive form of Community industrial property rights for plant varieties.

Tasks:

—

to decide whether to refuse or grant applications for Community plant variety rights,

| — | to decide on objections, |
| --- | --- |

—

to decide on objections,

| — | to decide on appeals, |
| --- | --- |

—

to decide on appeals,

| — | to decide on the revocation or cancellation of a Community plant variety right. |
| --- | --- |

—

to decide on the revocation or cancellation of a Community plant variety right.

1. The President directs the Office. He is appointed by the Council from a list of candidates proposed by the Commission after obtaining the opinion of the Administrative Council.

2. The Administrative Council oversees the Office's work programme and draws up rules governing the Office's working methods. It is composed of one representative of each Member State and one representative of the Commission, plus their alternates.

3. Decisions regarding the grant of Community plant variety rights are adopted by committees composed of three members of staff of the Office and by the Board of Appeal in appeal proceedings.

4. The Commission's control: review of the legality of acts by the President for which Community legislation provides no judicial review by any other body, as well as the legality of acts by the Administrative Council in respect of the Office's budget.

5. External control: Court of Auditors.

6. Discharge Authority: Administrative Council.

Final budget

13,4 (11,3) million euro

Staff numbers as at 31 December:

Number of posts in establishment plan: 40 (38)

Posts occupied: 40 (36)

+5 (4) other posts (auxiliary contracts, national experts on secondment, local staff, employment agency staff)

Total staff: 45 (40)

Assigned to the following duties:

Applications heard: 2 734 (2 651)

Rights granted: 2 178 (2 178)

Community rights in force at 31.12.2005: 11 231 (10 191)

operational:

19 (16)

administrative:

20 (8)

mixed:

6 (6)

Source: Information supplied by the Office.

COMMUNITY PLANT VARIETY OFFICE

Source: Office data — These tables summarise the data supplied by the Office in its annual accounts.

Table 2

Implementation of the budget for the financial year 2005

| (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 | Appropriations carried over from the previous financial year | Appropriations available
  (appropriations of the financial year and previous financial year) |
| entered | committed | paid | carried over | cancelled | available | paid | cancelled | available | committed | paid | carried over | cancelled |
| Own revenue | 13 113 | 8 848 | Title I
  Staff (NDA) | 4 307 | 4 284 | 4 237 | 47 | 23 | 38 | 32 | 6 | 4 345 | 4 322 | 4 269 | 47 | 29 |
| Community subsidies | 0 | 0 |
| Other revenue | 333 | 654 | Title II
  Administration (NDA) | 3 608 | 2 846 | 2 190 | 630 | 762 | 705 | 583 | 122 | 4 313 | 3 551 | 2 773 | 630 | 884 |
| | | | Titre III
  Operating activities (DA) | | | | | | | | | | | | | |
| — CA | 5 531 | 5 320 | 0 | 0 | 211 | 0 | 0 | 0 | 5 531 | 5 320 | 0 | 0 | 211 |
| — PA | 4 414 | 0 | 4 002 | 0 | 412 | 0 | 0 | 0 | 4 414 | 0 | 4 002 | 0 | 412 |
| Total | 13 446 | 9 502 | Total CE | 13 446 | 12 450 | 0 | 677 | 996 | 743 | 0 | 128 | 14 189 | 13 193 | 0 | 677 | 1 124 |
| Total CP | 12 329 | 0 | 10 429 | 677 | 1 197 | 743 | 615 | 128 | 13 072 | 0 | 11 044 | 677 | 1 325 |
| NDA | : | non-differentiated appropriations (commitment appropriations equal payment appropriations). |
| DA | : | differentiated appropriations (commitment appropriations may differ from payment appropriations). |
| CA | : | commitment appropriations in a system of differentiated appropriations. |
| PA | : | payment appropriations in a system of differentiated appropriations. |

(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

Appropriations carried over from the previous financial year

Appropriations available

(appropriations of the financial year and previous financial year)

entered

committed

paid

carried over

cancelled

available

paid

cancelled

available

committed

paid

carried over

cancelled

Own revenue

13 113

8 848

Title I

Staff (NDA)

4 307

4 284

4 237

47

23

38

32

6

4 345

4 322

4 269

47

29

Community subsidies

0

0

Other revenue

333

654

Title II

Administration (NDA)

3 608

2 846

2 190

630

762

705

583

122

4 313

3 551

2 773

630

884

Titre III

Operating activities (DA)

— CA

5 531

5 320

0

0

211

0

0

0

5 531

5 320

0

0

211

— PA

4 414

0

4 002

0

412

0

0

0

4 414

0

4 002

0

412

Total

13 446

9 502

Total CE

13 446

12 450

0

677

996

743

0

128

14 189

13 193

0

677

1 124

Total CP

12 329

0

10 429

677

1 197

743

615

128

13 072

0

11 044

677

1 325

NDA

:

non-differentiated appropriations (commitment appropriations equal payment appropriations).

DA

:

differentiated appropriations (commitment appropriations may differ from payment appropriations).

CA

:

commitment appropriations in a system of differentiated appropriations.

PA

:

payment appropriations in a system of differentiated appropriations.

Table 3

Revenue and expenditure account for the financial year 2005 (1)

| (1000 euro) |
| --- |
| | 2005 |
| Operating revenue |
| Revenue | 7 885 |
| Total (a) | 7 885 |
| Operating expenditure |
| Staff | 4 226 |
| Administration | 1 485 |
| Operating activities | 3 972 |
| Total (b) | 9 683 |
| Operating outturn (c = a — b) | –1 798 |
| Other income (d) | 367 |
| Other charges (e) | 0 |
| Economic result (f = c + d — e) | –1 431 |

(1000 euro)

2005

Operating revenue

Revenue

7 885

Total (a)

7 885

Operating expenditure

Staff

4 226

Administration

1 485

Operating activities

3 972

Total (b)

9 683

Operating outturn (c = a — b)

–1 798

Other income (d)

367

Other charges (e)

0

Economic result (f = c + d — e)

–1 431

Table 4

Balance sheet at 31 December 2005 (2)

| (1000 euro) |
| --- |
| | 2005 |
| Assets |
| Fixed assets | 3 513 |
| Short-term receivables | 897 |
| Cash accounts | 19 111 |
| Total | 23 521 |
| Liabilities |
| Results accumulated from previous financial years | 17 621 |
| Economic result of the year | –1 431 |
| Short-term debts | 7 331 |
| Total | 23 521 |

(1000 euro)

2005

Assets

Fixed assets

3 513

Short-term receivables

897

Cash accounts

19 111

Total

23 521

Liabilities

Results accumulated from previous financial years

17 621

Economic result of the year

–1 431

Short-term debts

7 331

Total

23 521

---

(1)  The figures for the financial year 2004 are not given since they are not comparable to those for the financial year 2005 due to a change in the accounting methods applied.

(2)  The figures for the financial year 2004 are not given since they are not comparable to those for 2005 due to a change in the accounting methods applied.

---

THE OFFICE'S REPLIES

| 7. | Once again, the 2005 budget was drawn up in accordance with the principle of equilibrium between revenue and commitment appropriations. The 2006 budget is in line with the principle of equilibrium between payment appropriations and revenue. The implementation of the expenditure provided for depends in part on economic factors which are out of the Office's control. With that in mind, the Office's consistent policy has been to allow room for manoeuvre to prevent having to call on the budgetary authority too often. |
| --- | --- |

7.

Once again, the 2005 budget was drawn up in accordance with the principle of equilibrium between revenue and commitment appropriations. The 2006 budget is in line with the principle of equilibrium between payment appropriations and revenue. The implementation of the expenditure provided for depends in part on economic factors which are out of the Office's control. With that in mind, the Office's consistent policy has been to allow room for manoeuvre to prevent having to call on the budgetary authority too often.

| 8. | The situation described by the Court is the result of accidental factors. The Office will take steps to ensure that in the future, the presentation of accounts is entirely in line with standards and implemented within the time limits laid down. |
| --- | --- |

8.

The situation described by the Court is the result of accidental factors. The Office will take steps to ensure that in the future, the presentation of accounts is entirely in line with standards and implemented within the time limits laid down.

| 9. | The Office is currently acquiring automated tools for data alignment. Although some alignments are still carried out manually, the risk of error mentioned by the Court has yet to materialise. |
| --- | --- |

9.

The Office is currently acquiring automated tools for data alignment. Although some alignments are still carried out manually, the risk of error mentioned by the Court has yet to materialise.

| 10. | The general implementing provisions are currently under discussion by the Commission and the agencies for adoption in the near future. As regards recruitment procedures, the Office will ensure that the application of the evaluation criteria used in vacancy notices is documented. |
| --- | --- |

10.

The general implementing provisions are currently under discussion by the Commission and the agencies for adoption in the near future. As regards recruitment procedures, the Office will ensure that the application of the evaluation criteria used in vacancy notices is documented.

| 11. | The Office will remind the evaluation committees of the need to comply fully with the specified criteria. The CPVO has taken note of the comments made and will ensure that the regulations are complied with in full. |
| --- | --- |

11.

The Office will remind the evaluation committees of the need to comply fully with the specified criteria. The CPVO has taken note of the comments made and will ensure that the regulations are complied with in full.

---

| 19.12.2006 | EN | Official Journal of the European Union | C 312/106 |
| --- | --- | --- | --- |

19.12.2006

EN

Official Journal of the European Union

C 312/106

---

REPORT

on the annual accounts of the Office for Harmonisation in the Internal Market for the financial year 2005 together with the Office's replies

(2006/C 312/18)

CONTENTS

| 1-2 | INTRODUCTION |
| --- | --- |

1-2

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

3-6

| 7-11 | OBSERVATIONS |
| --- | --- |

7-11

Tables 1 to 4

The Office's replies

INTRODUCTION

| 1. | The Office for Harmonisation in the Internal Market (hereinafter the Office) was set up by Council Regulation (EC) No 40/94 (1) of 20 December 1993. Its mandate is to implement the Community legislation on trade marks and designs, which gives undertakings uniform protection throughout the entire area of the European Union. |
| --- | --- |

1.

The Office for Harmonisation in the Internal Market (hereinafter the Office) was set up by Council Regulation (EC) No 40/94 (1) of 20 December 1993. Its mandate is to implement the Community legislation on trade marks and designs, which gives undertakings uniform protection throughout the entire area of the European Union.

| 2. | Table 1 summarises the Office's competences and activities. Key information from the financial statements drawn up by the Office for the financial year 2005 is presented in Tables 2, 3 and 4. |
| --- | --- |

2.

Table 1 summarises the Office's competences and activities. Key information from the financial statements drawn up by the Office for the financial year 2005 is presented in Tables 2, 3 and 4.

STATEMENT OF ASSURANCE

| 3. | This Statement is addressed to the Office's Budget Committee pursuant to Article 137 of Council Regulation (EC) No 40/94. |
| --- | --- |

3.

This Statement is addressed to the Office's Budget Committee pursuant to Article 137 of Council Regulation (EC) No 40/94.

| 4. | The Office's accounts for the financial year ended 31 December 2005 (2) were drawn up by its President, pursuant to Article 119 of Council Regulation (EC) No 40/94, 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. |
| --- | --- |

4.

The Office's accounts for the financial year ended 31 December 2005 (2) were drawn up by its President, pursuant to Article 119 of Council Regulation (EC) No 40/94, 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.

| 5. | The Court conducted its audit in accordance with its policies and standards, which are based on international auditing standards that have been adapted to the Community context. The audit was planned and performed to obtain reasonable assurance that the accounts are reliable and the underlying transactions are legal and regular. |
| --- | --- |

5.

The Court conducted its audit in accordance with its policies and standards, which are based on international auditing standards that have been adapted to the Community context. The audit was planned and performed to obtain reasonable assurance that the accounts are reliable and the underlying transactions are legal and regular.

| 6. | The Court has thus obtained a reasonable basis for the statement expressed below. |
| --- | --- |

6.

The Court has thus obtained a reasonable basis for the statement expressed below.

Reliability of the accountsThe Office's accounts for the financial year ended 31 December 2005 are, in all material respects, reliable.Legality and regularity of the underlying transactionsThe transactions underlying the Office'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. | As regards budgetary implementation, the overall implementation rates for commitment and payment appropriations for the financial year were 95 % and 80 % respectively. However, the consumption of appropriations was lower for administrative expenditure (Title II): around 10 % of the appropriations for this and the previous financial year were cancelled and one third of the commitments for this financial year were carried over. This situation should prompt the Office to improve the forecasting and planning of its administrative expenditure so as to avoid mobilising funds unnecessarily. |
| --- | --- |

7.

As regards budgetary implementation, the overall implementation rates for commitment and payment appropriations for the financial year were 95 % and 80 % respectively. However, the consumption of appropriations was lower for administrative expenditure (Title II): around 10 % of the appropriations for this and the previous financial year were cancelled and one third of the commitments for this financial year were carried over. This situation should prompt the Office to improve the forecasting and planning of its administrative expenditure so as to avoid mobilising funds unnecessarily.

| 8. | The segregation of the duties of initiation and verification of budgetary operations was not completely guaranteed. Indeed, the audit showed that dozens of commitments and several hundred payments had both been initiated and validated by one and the same employee. |
| --- | --- |

8.

The segregation of the duties of initiation and verification of budgetary operations was not completely guaranteed. Indeed, the audit showed that dozens of commitments and several hundred payments had both been initiated and validated by one and the same employee.

| 9. | In 2005, the Administrative Board had still not adopted any minimum internal control standards. Furthermore, the authorising officers had not yet formalised the management and internal control procedures and systems that they were applying. This being so, the accounting officer was not in a position to validate the systems intended to provide him with information. |
| --- | --- |

9.

In 2005, the Administrative Board had still not adopted any minimum internal control standards. Furthermore, the authorising officers had not yet formalised the management and internal control procedures and systems that they were applying. This being so, the accounting officer was not in a position to validate the systems intended to provide him with information.

| 10. | An examination of a procedure for recruiting temporary staff showed some shortcomings: lack of a formal decision appointing selection boards, failure to specify the deadline for the submission of applications, lack of systematic use of evaluation scales, no minutes of selection board meetings, recruitment of two candidates where the vacancy notice specified only one recruitment. |
| --- | --- |

10.

An examination of a procedure for recruiting temporary staff showed some shortcomings: lack of a formal decision appointing selection boards, failure to specify the deadline for the submission of applications, lack of systematic use of evaluation scales, no minutes of selection board meetings, recruitment of two candidates where the vacancy notice specified only one recruitment.

| 11. | The audit work on procurement and contract management revealed some anomalies: a lack of precision in the contract notices as to the nature of the contracts being published (works or supplies) (3), failure to adequately justify the use of the negotiated procedure for a contract extension (4), incomplete documentation of the procedure or inadequate application of the selection and evaluation criteria provided for in the contract notices (5), award of four specific contracts for a duration that overran the expiry date of the corresponding framework contracts by 11 months. |
| --- | --- |

11.

The audit work on procurement and contract management revealed some anomalies: a lack of precision in the contract notices as to the nature of the contracts being published (works or supplies) (3), failure to adequately justify the use of the negotiated procedure for a contract extension (4), incomplete documentation of the procedure or inadequate application of the selection and evaluation criteria provided for in the contract notices (5), award of four specific contracts for a duration that overran the expiry date of the corresponding framework contracts by 11 months.

This report was adopted by the Court of Auditors in Luxembourg at its meeting of 28 September 2006.

For the Court of Auditors

Hubert WEBER

President

---

(1)  OJ L 11, 14.1.1994

1

(2)  These accounts were drawn up on 28 February 2006 and received by the Court on 5 July 2006.

2

(3)  One case detected.

3

(4)  Extension involving a sum of 2 million euro.

4

(5)  In the case of four contracts.

5

---

Table 1

Office for Harmonisation in the Internal Market (Alicante)

| Area of Community competence deriving from the Treaty | Competences of the Office as specified in Council Regulation (EC) No 40/94 of 20 December 1993 | Governance | Resources available to the Office (2004) | Products and services supplied in 2005 |
| --- | --- | --- | --- | --- |
| Free movement of goods:

  prohibitions or restrictions justified on grounds of the protection of industrial and commercial property must not constitute a means of arbitrary discrimination or a disguised restriction on trade between Member States.

  (From Article 30 of the Treaty)

  Restrictions on freedom to provide services within the Community are prohibited in respect of nationals of Member States who are established in a State of the Community other than that of the person for whom the services are intended.

  (From Article 49 of the Treaty) | Objectives:

  to implement the Community legislation on trade marks and designs, which gives undertakings the right to uniform protection throughout the entire area of the European Union | Tasks:







  — | to receive and enter applications for registration, |

Area of Community competence deriving from the Treaty

Competences of the Office as specified in Council Regulation (EC) No 40/94 of 20 December 1993

Governance

Resources available to the Office (2004)

Products and services supplied in 2005

Free movement of goods:

prohibitions or restrictions justified on grounds of the protection of industrial and commercial property must not constitute a means of arbitrary discrimination or a disguised restriction on trade between Member States.

(From Article 30 of the Treaty)

Restrictions on freedom to provide services within the Community are prohibited in respect of nationals of Member States who are established in a State of the Community other than that of the person for whom the services are intended.

(From Article 49 of the Treaty)

Objectives:

to implement the Community legislation on trade marks and designs, which gives undertakings the right to uniform protection throughout the entire area of the European Union

Tasks:

—

to receive and enter applications for registration,

| — | to examine the conditions for entry in the Register and compatibility with Community legislation, |
| --- | --- |

—

to examine the conditions for entry in the Register and compatibility with Community legislation,

| — | to search at the industrial property offices of the Member States for any pre-existing national trade marks, |
| --- | --- |

—

to search at the industrial property offices of the Member States for any pre-existing national trade marks,

| — | to publish applications, |
| --- | --- |

—

to publish applications,

| — | to examine any opposition by third parties, |
| --- | --- |

—

to examine any opposition by third parties,

| — | to register or reject applications, |
| --- | --- |

—

to register or reject applications,

| — | to examine applications for revocation or invalidity, |
| --- | --- |

—

to examine applications for revocation or invalidity,

| — | to handle appeals against decisions. |
| --- | --- |

—

to handle appeals against decisions.

1. Administrative Board

Composition:

| — | one representative of each Member State, |
| --- | --- |

—

one representative of each Member State,

| — | one representative of the Commission. |
| --- | --- |

—

one representative of the Commission.

Task:

| — | to advise the President on matters for which the Office is responsible, |
| --- | --- |

—

to advise the President on matters for which the Office is responsible,

| — | to prepare lists of candidates (Article 120) for President, Vice-Presidents and chairmen and members of the Boards of Appeal. |
| --- | --- |

—

to prepare lists of candidates (Article 120) for President, Vice-Presidents and chairmen and members of the Boards of Appeal.

2. President of the Office

Appointed by the Council from a list of at most three candidates which has been prepared by the Administrative Board.

3. Budget Committee

Composition:

one representative of each Member State and one representative of the Commission and their alternates,

Task:

to adopt the budget and the financial regulation, grant discharge to the President and determine the cost of search reports.

4. Decisions in connection with procedures

Decisions are taken by:

| (a) | the Examiners; |
| --- | --- |

(a)

the Examiners;

| (b) | the Opposition Divisions; |
| --- | --- |

(b)

the Opposition Divisions;

| (c) | the Administration of Trade Marks and Legal Division; |
| --- | --- |

(c)

the Administration of Trade Marks and Legal Division;

| (d) | the Cancellation Divisions; |
| --- | --- |

(d)

the Cancellation Divisions;

| (e) | the Boards of Appeal. |
| --- | --- |

(e)

the Boards of Appeal.

5. External audit

The Court of Auditors.

6. Discharge authority

The Office's Budget Committee.

2005 final budget

218 million euro (177 million euro) including a Community subsidy: 0 % (0 %)

Staff numbers as at 31 December 2005

Number of posts in establishment plan: 675 (675)

Posts occupied: 611 (648)

+78 (41) other staff (auxiliary contracts, seconded national experts, local staff, employment-agency staff)

Total staff: 689 (689)

assigned to the following duties:

| — | production: 548 (524) |
| --- | --- |

—

production: 548 (524)

| — | support: 141 (165) |
| --- | --- |

—

support: 141 (165)

Trade marks:

Number of applications: 64 112

Number of registrations: 60 570

Number of cases of opposition: 17 216

of which cases settled: 12 856

Appeals to the Boards of Appeal: 1 505

Average time for registration (excluding opposition or appeal):

| — | before publication: 10 months |
| --- | --- |

—

before publication: 10 months

| — | between publication and registration: 11 months |
| --- | --- |

—

between publication and registration: 11 months

Designs

Designs received: 63 700

Designs registered: 67 887

Source: Information sent by the Office.

Office for Harmonisation in the Internal Market

Source: Office data — These tables summarise the data supplied by the Office in its annual accounts.

Table 2

Office for Harmonisation in the Internal Market — Implementation of the budget for the financial year 2005

| (1000 euro) |
| --- |
| Revenue | Expenditure |
| Source of revenue | Revenue entered in the final budget for the financial year | Revenue received | Allocation of expenditure | Final budget appropriations | Appropriations carried over from the previous financial year | Appropriations for the financial year and for the previous financial year |
| entered | committed | paid | carried over | cancelled | available | paid | cancelled | available | committed | paid | carried over | cancelled |
| Own revenue | 133 533 | 157 600 | Title I
  Staff | 58 165 | 57 072 | 55 680 | 995 | 1 491 | 1 001 | 669 | 332 | 59 166 | 58 073 | 56 349 | 995 | 1 823 |
| Other revenue | 404 | 905 | Title II
  Administration | 32 477 | 29 352 | 19 658 | 9 685 | 3 134 | 8 890 | 7 894 | 996 | 41 367 | 38 242 | 27 552 | 9 685 | 4 130 |
| Interest | 3 100 | 4 387 | Title III
  Operating activities | 38 669 | 36 884 | 22 613 | 14 226 | 1 829 | 16 323 | 16 198 | 125 | 54 992 | 53 207 | 38 811 | 14 226 | 1 954 |
| Balance from the previous financial year | 81 353 | 90 171 | Title X
  Reserve | 89 079 | 0 | 0 | 0 | 89 079 | 0 | 0 | 0 | 89 079 | 0 | 0 | 0 | 89 079 |
| Total | 218 390 | 253 063 | Total | 218 390 | 123 308 | 97 951 | 24 906 | 95 533 | 26 214 | 24 761 | 1 453 | 244 604 | 149 522 | 122 712 | 24 906 | 96 986 |

(1000 euro)

Revenue

Expenditure

Source of revenue

Revenue entered in the final budget for the financial year

Revenue received

Allocation of expenditure

Final budget appropriations

Appropriations carried over from the previous financial year

Appropriations for the financial year and for the previous financial year

entered

committed

paid

carried over

cancelled

available

paid

cancelled

available

committed

paid

carried over

cancelled

Own revenue

133 533

157 600

Title I

Staff

58 165

57 072

55 680

995

1 491

1 001

669

332

59 166

58 073

56 349

995

1 823

Other revenue

404

905

Title II

Administration

32 477

29 352

19 658

9 685

3 134

8 890

7 894

996

41 367

38 242

27 552

9 685

4 130

Interest

3 100

4 387

Title III

Operating activities

38 669

36 884

22 613

14 226

1 829

16 323

16 198

125

54 992

53 207

38 811

14 226

1 954

Balance from the previous financial year

81 353

90 171

Title X

Reserve

89 079

0

0

0

89 079

0

0

0

89 079

0

0

0

89 079

Total

218 390

253 063

Total

218 390

123 308

97 951

24 906

95 533

26 214

24 761

1 453

244 604

149 522

122 712

24 906

96 986

Table 3

Revenue and expenditure account for the financial year 2005 (1)

| (1000 euro) |
| --- |
| | 2005 |
| Operating revenue |
| Own revenue | 156 944 |
| Other subsidies/revenue | 823 |
| Total (a) | 157 767 |
| Operating expenditure |
| Staff | 56 278 |
| Administration | 28 610 |
| Operating activities | 35 850 |
| Total (b) | 120 738 |
| Operating result (c = a – b) | 37 029 |
| Other income (d) | 4 451 |
| Other charges (e) | 38 |
| Economic result (f = c + d – e) | 41 442 |

(1000 euro)

2005

Operating revenue

Own revenue

156 944

Other subsidies/revenue

823

Total (a)

157 767

Operating expenditure

Staff

56 278

Administration

28 610

Operating activities

35 850

Total (b)

120 738

Operating result (c = a – b)

37 029

Other income (d)

4 451

Other charges (e)

38

Economic result (f = c + d – e)

41 442

Table 4

Balance sheet at 31 December 2005 and 2004 (2)

| (1000 euro) |
| --- |
| | 2005 | 2004 |
| Assets |
| Fixed assets | 27 456 | 28 125 |
| Receivables | 2 196 | 3 233 |
| Cash and cash equivalents | 208 020 | 156 638 |
| Total | 237 672 | 187 996 |
| Liabilities |
| Accumulated surplus/deficit | 132 575 | 132 575 |
| Economic result for the year | 41 442 | 0 |
| Non-current liabilities | 613 | 784 |
| Current liabilities | 63 042 | 54 637 |
| Total | 237 672 | 187 996 |

(1000 euro)

2005

2004

Assets

Fixed assets

27 456

28 125

Receivables

2 196

3 233

Cash and cash equivalents

208 020

156 638

Total

237 672

187 996

Liabilities

Accumulated surplus/deficit

132 575

132 575

Economic result for the year

41 442

0

Non-current liabilities

613

784

Current liabilities

63 042

54 637

Total

237 672

187 996

---

(1)  The data for the financial year 2004 are not presented as they are not comparable with those for 2005 because of the change in the accounting methods applied.

(2)  The data for the financial year 2004 have been restated in order to make them comparable with those for 2005.

---

THE OFFICE'S REPLIES

| 7. | The Office will continue its efforts to improve the management of its budgetary credits. For the whole of its budget the Office managed to reduce the level of cancellations of carried over appropriations (from 10 % in 2004 to 6 % in 2005). |
| --- | --- |

7.

The Office will continue its efforts to improve the management of its budgetary credits. For the whole of its budget the Office managed to reduce the level of cancellations of carried over appropriations (from 10 % in 2004 to 6 % in 2005).

| 8. | Following the Court's remark, in 2006 the Office has put into place procedures in order to minimize the cases in which a budgetary operation is treated by the same person acting as line manager and authorising officer. |
| --- | --- |

8.

Following the Court's remark, in 2006 the Office has put into place procedures in order to minimize the cases in which a budgetary operation is treated by the same person acting as line manager and authorising officer.

| 9. | The internal control standards were adopted by the Budget Committee with a decision of 5 May 2006. The Office will take all the appropriate measures to implement these standards. |
| --- | --- |

9.

The internal control standards were adopted by the Budget Committee with a decision of 5 May 2006. The Office will take all the appropriate measures to implement these standards.

| 10. | Following the Court's remark, the Office will take appropriate measures to reinforce its recruitment procedures by improving their formalisation and documentation. |
| --- | --- |

10.

Following the Court's remark, the Office will take appropriate measures to reinforce its recruitment procedures by improving their formalisation and documentation.

| 11. | Following the Court's remark, the Office will take all the appropriate measures to correct the insufficiencies detected by better formalizing and documenting its procedures in this area. |
| --- | --- |

11.

Following the Court's remark, the Office will take all the appropriate measures to correct the insufficiencies detected by better formalizing and documenting its procedures in this area.

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Corrigenda

| 19.12.2006 | EN | Official Journal of the European Union | C 312/112 |
| --- | --- | --- | --- |

19.12.2006

EN

Official Journal of the European Union

C 312/112

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CORRIGENDA

Corrigendum to European Aviation Safety Agency – Publication of the final accounts for the financial year 2005

(Official Journal of the European Union C 266 of 31 October 2006)

(2006/C 312/19)

Financial tables 1 and 2 relating to the European Aviation Safety Agency published on pages 11 and 12 of the
  Official Journal of the European Union C 266 of 31 October 2006, are hereby cancelled and replaced by the following:

Source: Agency data — These tables summarise the data supplied by the Agency in its annual accounts.’

‘Table 1

Implementation of the budget for the financial year 2005

| (1000 euro) |
| --- |
| Revenue | Expenditure |
| Origin of revenue | Revenue entered in the final budget for the financial year | Revenue collected | Allocation of expenditure | Final budget appropriations | Appropriations carried over from the previous financial year | Appropriations available
  (2005 and 2004) |
| entered | committed | paid | carried over | cancelled | outstanding commitments | paid | cancelled | appropriations | committed | paid | carried over | cancelled |
| Community subsidies | 22 138 | 18 930 | Title I
  Staff | 16 192 | 13 968 | 13 754 | 214 | 2 224 | 314 | 212 | 102 | 16 506 | 14 282 | 13 966 | 214 | 2 326 |
| Own revenue | 8 000 | 8 569 | Title II
  Administration | 3 691 | 3 428 | 2 646 | 782 | 263 | 810 | 732 | 78 | 4 501 | 4 238 | 3 378 | 782 | 341 |
| Other revenue | 1 443 | 1 472 | Title III
  Operating activities | | | | | | | | | | | | | |
| CA | 20 098 | 13 865 | 0 | 0 | 6 233 | 0 | 0 | 0 | 20 098 | 13 865 | 0 | 0 | 6 233 |
| PA | 11 698 | 0 | 4 656 | 5 611 | 1 431 | 264 | 237 | 27 | 11 962 | 0 | 4 893 | 5 611 | 1 458 |
| Total | 31 581 | 28 971 | Total CA | 39 981 | 31 261 | 0 | 996 | 8 720 | 1 124 | 944 | 180 | 41 105 | 32 385 | 0 | 996 | 8 900 |
| Total PA | 31 581 | 0 | 21 056 | 6 607 | 3 918 | 1 388 | 1 181 | 207 | 32 969 | 0 | 22 237 | 6 607 | 4 125 |
| CA: commitment appropriations, PA: payment appopriations. |

(1000 euro)

Revenue

Expenditure

Origin of revenue

Revenue entered in the final budget for the financial year

Revenue collected

Allocation of expenditure

Final budget appropriations

Appropriations carried over from the previous financial year

Appropriations available

(2005 and 2004)

entered

committed

paid

carried over

cancelled

outstanding commitments

paid

cancelled

appropriations

committed

paid

carried over

cancelled

Community subsidies

22 138

18 930

Title I

Staff

16 192

13 968

13 754

214

2 224

314

212

102

16 506

14 282

13 966

214

2 326

Own revenue

8 000

8 569

Title II

Administration

3 691

3 428

2 646

782

263

810

732

78

4 501

4 238

3 378

782

341

Other revenue

1 443

1 472

Title III

Operating activities

CA

20 098

13 865

0

0

6 233

0

0

0

20 098

13 865

0

0

6 233

PA

11 698

0

4 656

5 611

1 431

264

237

27

11 962

0

4 893

5 611

1 458

Total

31 581

28 971

Total CA

39 981

31 261

0

996

8 720

1 124

944

180

41 105

32 385

0

996

8 900

Total PA

31 581

0

21 056

6 607

3 918

1 388

1 181

207

32 969

0

22 237

6 607

4 125

CA: commitment appropriations, PA: payment appopriations.

Table 2

Revenue and expenditure account for the financial year 2005 and 2004

| (1000 euro) |
| --- |
| | 2005 | 2004 |
| Operating revenue |
| Community subsidies | 17 416 | 7 777 |
| Other subsidies/revenue | 13 053 | 601 |
| Total (a) | 30 469 | 8 378 |
| Operating expenditure |
| Staff | 13 636 | 5 557 |
| Administration | 4 016 | 1 521 |
| Operations | 11 660 | 2 081 |
| Total (b) | 29 312 | 9 159 |
| Operating result (c = a – b) | 1 157 | – 781 |
| Other income (d) | 41 | 0 |
| Other charges (e) | –14 | –1 |
| Economic result (f = c + d + e) | 1 184 | – 782 |

(1000 euro)

2005

2004

Operating revenue

Community subsidies

17 416

7 777

Other subsidies/revenue

13 053

601

Total (a)

30 469

8 378

Operating expenditure

Staff

13 636

5 557

Administration

4 016

1 521

Operations

11 660

2 081

Total (b)

29 312

9 159

Operating result (c = a – b)

1 157

– 781

Other income (d)

41

0

Other charges (e)

–14

–1

Economic result (f = c + d + e)

1 184

– 782

---