# Official Journal C 332/28 D

| | ISSN 1725-2423 |
| --- | --- |
| Official Journal
  of the European Union | C 332 |
| | |
| English edition | Information and Notices | Volume 4828 December 2005 |

ISSN 1725-2423

Official Journal

of the European Union

C 332

English edition

Information and Notices

Volume 4828 December 2005

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| Notice No | Contents | page |
| --- | --- | --- |
| | I   Information |
| | Court of Auditors |
| 2005/C 332/1 | Report on the annual accounts of the European Aviation Safety Agency for the financial year 2004 together with the Agency's replies | 1 |
| 2005/C 332/2 | Report on the annual accounts of the European Medicines Agency for the financial year 2004 together with the Agency's replies | 8 |
| 2005/C 332/3 | Report on the annual accounts of the European Agency for Reconstruction for the financial year 2004 together with the Agency's replies | 15 |
| 2005/C 332/4 | Report on the annual accounts of the European Agency for Safety and Health at Work for the financial year 2004 together with the Agency's replies | 23 |
| 2005/C 332/5 | Report on the annual accounts of the European Maritime Safety Agency for the financial year 2004 together with the Agency's replies | 30 |
| 2005/C 332/6 | Report on the annual accounts of the European Environment Agency for the financial year 2004 together with the Agency's replies | 37 |
| 2005/C 332/7 | Report on the annual accounts of the European Food Safety Authority for the financial year 2004 together with the Authority's replies | 45 |
| 2005/C 332/8 | Report on the annual accounts of the Translation Centre for the Bodies of the European Union for the financial year 2004 together with the Centre's replies | 53 |
| 2005/C 332/9 | Report on the annual accounts of the European Centre for the Development of Vocational Training for the financial year 2004 together with the Centre's replies | 60 |
| 2005/C 332/0 | Report on the annual accounts of Eurojust for the financial year 2004 together with Eurojust's replies | 68 |
| 2005/C 332/1 | Report on the annual accounts of the European Training Foundation for the financial year 2004 together with the Foundation's replies | 75 |
| 2005/C 332/2 | Report on the annual accounts of the European Foundation for the Improvement of Living and Working Conditions for the financial year 2004 together with the Foundation's replies | 82 |
| 2005/C 332/3 | Report on the annual accounts of the European Monitoring Centre for Drugs and Drug Addiction for the financial year 2004 together with the Monitoring Centre's replies | 89 |
| 2005/C 332/4 | Report on the annual accounts of the European Monitoring Centre on Racism and Xenophobia for the financial year 2004 together with the Monitoring Centre's replies | 97 |
| 2005/C 332/5 | Report on the annual accounts of the Community Plant Variety Office concerning the financial year 2004 together with the Office's replies | 105 |
| 2005/C 332/6 | Report on the annual accounts of the Office for Harmonization in the Internal Market for the financial year 2004 together with the Office's replies | 112 |

Notice No

Contents

page

I   Information

Court of Auditors

2005/C 332/1

Report on the annual accounts of the European Aviation Safety Agency for the financial year 2004 together with the Agency's replies

1

2005/C 332/2

Report on the annual accounts of the European Medicines Agency for the financial year 2004 together with the Agency's replies

8

2005/C 332/3

Report on the annual accounts of the European Agency for Reconstruction for the financial year 2004 together with the Agency's replies

15

2005/C 332/4

Report on the annual accounts of the European Agency for Safety and Health at Work for the financial year 2004 together with the Agency's replies

23

2005/C 332/5

Report on the annual accounts of the European Maritime Safety Agency for the financial year 2004 together with the Agency's replies

30

2005/C 332/6

Report on the annual accounts of the European Environment Agency for the financial year 2004 together with the Agency's replies

37

2005/C 332/7

Report on the annual accounts of the European Food Safety Authority for the financial year 2004 together with the Authority's replies

45

2005/C 332/8

Report on the annual accounts of the Translation Centre for the Bodies of the European Union for the financial year 2004 together with the Centre's replies

53

2005/C 332/9

Report on the annual accounts of the European Centre for the Development of Vocational Training for the financial year 2004 together with the Centre's replies

60

2005/C 332/0

Report on the annual accounts of Eurojust for the financial year 2004 together with Eurojust's replies

68

2005/C 332/1

Report on the annual accounts of the European Training Foundation for the financial year 2004 together with the Foundation's replies

75

2005/C 332/2

Report on the annual accounts of the European Foundation for the Improvement of Living and Working Conditions for the financial year 2004 together with the Foundation's replies

82

2005/C 332/3

Report on the annual accounts of the European Monitoring Centre for Drugs and Drug Addiction for the financial year 2004 together with the Monitoring Centre's replies

89

2005/C 332/4

Report on the annual accounts of the European Monitoring Centre on Racism and Xenophobia for the financial year 2004 together with the Monitoring Centre's replies

97

2005/C 332/5

Report on the annual accounts of the Community Plant Variety Office concerning the financial year 2004 together with the Office's replies

105

2005/C 332/6

Report on the annual accounts of the Office for Harmonization in the Internal Market for the financial year 2004 together with the Office's replies

112

| EN | |
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EN

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I Information

Court of Auditors

| 28.12.2005 | EN | Official Journal of the European Union | C 332/1 |
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28.12.2005

EN

Official Journal of the European Union

C 332/1

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REPORT

on the annual accounts of the European Aviation Safety Agency for the financial year 2004 together with the Agency's replies

(2005/C 332/01)

CONTENTS

| 1-2 | INTRODUCTION |
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1-2

| 3-6 | THE COURT'S OPINION |
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3-6

| 7-11 | OBSERVATIONS |
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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 financial year 2004 was the second in which the Agency actually carried out its operating activities. The Agency's tasks are to maintain a high level of civil aviation safety, to ensure the proper functioning and development of civil aviation safety, to establish certification specifications and to provide certification of aeronautical products. Table 1 summarises the competences and activities of the Agency on the basis of information supplied by it. |
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1.

The European Aviation Safety Agency (hereinafter called the Agency) was established by Regulation (EC) No 1592/2002 of the European Parliament and of the Council of 15 July 2002 (1). The financial year 2004 was the second in which the Agency actually carried out its operating activities. The Agency's tasks are to maintain a high level of civil aviation safety, to ensure the proper functioning and development of civil aviation safety, to establish certification specifications and to provide certification of aeronautical products. Table 1 summarises the competences and activities of the Agency on the basis of information supplied by it.

| 2. | For information, the annual accounts drawn up by the Agency for the financial year 2004 are presented in summary form in Tables 2, 3 and 4. |
| --- | --- |

2.

For information, the annual accounts drawn up by the Agency for the financial year 2004 are presented in summary form in Tables 2, 3 and 4.

THE COURT'S OPINION

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

The Court's opinion 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 2004 (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 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 2004 (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 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 obtained a reasonable basis for the opinion expressed below. |
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6.

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

Reliability of the accountsThe Agency's accounts for the financial year ended 31 December 2004 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. | Contrary to the budgetary principle of specificity, the Agency's initial budget and its amending budgets, as published in the Official Journal, do not give a breakdown of appropriations in terms of articles and items, as required by Article 23 of the Agency's financial regulation. |
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7.

Contrary to the budgetary principle of specificity, the Agency's initial budget and its amending budgets, as published in the Official Journal, do not give a breakdown of appropriations in terms of articles and items, as required by Article 23 of the Agency's financial regulation.

| 8. | The revenue and expenditure account for the financial year 2003 showed a loss (4) of 214 000 euro. In accordance with the provisions of the Agency's financial regulation, this outturn ought to have been entered in an amending budget for 2004 (5). |
| --- | --- |

8.

The revenue and expenditure account for the financial year 2003 showed a loss (4) of 214 000 euro. In accordance with the provisions of the Agency's financial regulation, this outturn ought to have been entered in an amending budget for 2004 (5).

| 9. | The budgetary management suffers from a number of anomalies: a lack of any indication in the amending budgets about the transfers carried out or even of any reasons for these transfers, failure to inform the Management Board about the transfers, and payment of advances outside the budget. |
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9.

The budgetary management suffers from a number of anomalies: a lack of any indication in the amending budgets about the transfers carried out or even of any reasons for these transfers, failure to inform the Management Board about the transfers, and payment of advances outside the budget.

| 10. | The Agency has not yet adopted the implementing rules for its financial regulation. Neither has it carried out any risk analysis or prepared any internal control standards. |
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10.

The Agency has not yet adopted the implementing rules for its financial regulation. Neither has it carried out any risk analysis or prepared any internal control standards.

| 11. | The staff selection procedures are not laid down formally and vary from one selection to another without any apparent reason. In order to improve the transparency of the decisions taken in this regard, the Agency needs to formalise its recruitment procedures and make them more consistent. |
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11.

The staff selection procedures are not laid down formally and vary from one selection to another without any apparent reason. In order to improve the transparency of the decisions taken in this regard, the Agency needs to formalise its recruitment procedures and make them more consistent.

This report was adopted by the Court of Auditors in Luxembourg at its meeting of 5 October 2005.

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 23 August 2005 and received by the Court on 19 September 2005.

3

(4)  This loss was due to carry-overs of appropriations that were not covered by the budgetary revenue received.

4

(5)  Article 16(2) of the Agency's financial regulation.

5

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Table 1

European Aviation Safety Agency (Cologne)

| Areas of Community competence deriving from the Treaty | Competences of the Agency 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

  (2003 data) | Products and services |
| --- | --- | --- | --- | --- |
| Common transport policy | Objectives: | Tasks: | 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. |

Areas of Community competence deriving from the Treaty

Competences of the Agency 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

(2003 data)

Products and services

Common transport policy

Objectives:

Tasks:

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; is appointed by the Management Board on a proposal from the Commission. |
| --- | --- |

2.

The Executive Director manages the Agency; 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 and charges and checks made on undertakings. |
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3.

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

| 4. | The Scientific Committee and scientific groups supply the scientific opinions of the Agency. |
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4.

The Scientific Committee and scientific groups supply the scientific opinions of the Agency.

| 5. | External control: European Court of Auditors. |
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5.

External control: European Court of Auditors.

| 6. | Discharge given by the Parliament on a recommendation from the Council. |
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6.

Discharge given by the Parliament on a recommendation from the Council.

Final budget:

Opinions:

‘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)

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

| 1. | to issue opinions addressed to the Commission; |
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1.

to issue opinions addressed to the Commission;

| 2. | to issue certification specifications, including airworthiness codes and acceptable means of compliance, and any guidance material for the application of Community policy; |
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2.

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

| 3. | to take decisions regarding airworthiness and environmental certification; |
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3.

to take decisions regarding airworthiness and environmental certification;

| 4. | to conduct standardisation inspections at the competent authorities of the Member States; |
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4.

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

| 5. | to conduct the necessary investigations in undertakings. |
| --- | --- |

5.

to conduct the necessary investigations in undertakings.

Total budget: 11,3 million euro (4,8 million euro)

Community contribution: 11,1 million euro (98 %) (4,8 million euro)

Contribution of the Federal Republic of Germany: 0,2 million euro (2 %).

Staff numbers as at 31 December 2004:

95 posts in the establishment plan (80)

posts occupied: 84 (1)

+ 18 other posts (16).

Total staff numbers: 102 (17)

assigned to the following tasks:

| — | operational: 36 (1) |
| --- | --- |

—

operational: 36 (1)

| — | administrative: 30 (4) |
| --- | --- |

—

administrative: 30 (4)

| — | mixed: 36 (12). |
| --- | --- |

—

mixed: 36 (12).

| — | 3 opinions concerning amendments to Regulations (EC) Nos 1592/2002, 1702/2003 and 2042/2003; |
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—

3 opinions concerning amendments to Regulations (EC) Nos 1592/2002, 1702/2003 and 2042/2003;

| — | 2 opinions relating to derogations issued by Member States. |
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—

2 opinions relating to derogations issued by Member States.

Rulemaking decisions:

1 amendment to Agency certification specifications.

International cooperation:

5 cooperation agreements made with Brazil, China, Canada, Israel and the Aeronautical Committee of the Commonwealth of Independent States.

Certification decisions:

Type certificates: 35

Supplementary type certificates: 576

Airworthiness directives: 442

European Technical Specifications: 257

Acceptable means of compliance: 86

Major changes: 1 378

Minor changes: 4 472

Major repairs: 320

Minor repairs: 3 252

AFM/RFM (= Flight Manual Revisions): 741

Approval of design organisations: 84

Approval of maintenance organisations (bilateral): 1 559

Approval of maintenance organisations (foreign): 180

Approval of maintenance training organisations: 13

Approval of manufacturing organisations: 1

Source: Information supplied by the Agency.

Table 2

European Aviation Safety Agency — Implementation of the budget for the financial year 2004

| (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
  (2004 budget and financial year 2003) |
| entered | committed | paid | carried over | cancelled | outstanding commitments | paid | cancelled | appropriations | committed | paid | carried over | cancelled |
| Community subsidies | 11 050 | 11 050 | Title I
  Staff | 7 807 | 6 000 | 5 686 | 314 | 1 807 | 30 | 12 | 18 | 7 837 | 6 030 | 5 698 | 314 | 1 825 |
| Other contributions | 287 | 248 | Title II
  Administration | 2 539 | 2 060 | 1 250 | 810 | 479 | 396 | 379 | 17 | 2 935 | 2 456 | 1 629 | 810 | 496 |
| | | | Title III
  Operating activities | 991 | 937 | 673 | 264 | 54 | 2 486 | 1 330 | 1 156 | 3 477 | 3 423 | 2 003 | 264 | 1 210 |
| Total | 11 337 | 11 298 | Total | 11 337 | 8 997 | 7 609 | 1 388 | 2 340 | 2 912 | 1 721 | 1 191 | 14 249 | 11 909 | 9 330 | 1 388 | 3 531 |
| Source: Agency data — This table summarises the data supplied by the Agency in its annual accounts. |

(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

(2004 budget and financial year 2003)

entered

committed

paid

carried over

cancelled

outstanding commitments

paid

cancelled

appropriations

committed

paid

carried over

cancelled

Community subsidies

11 050

11 050

Title I

Staff

7 807

6 000

5 686

314

1 807

30

12

18

7 837

6 030

5 698

314

1 825

Other contributions

287

248

Title II

Administration

2 539

2 060

1 250

810

479

396

379

17

2 935

2 456

1 629

810

496

Title III

Operating activities

991

937

673

264

54

2 486

1 330

1 156

3 477

3 423

2 003

264

1 210

Total

11 337

11 298

Total

11 337

8 997

7 609

1 388

2 340

2 912

1 721

1 191

14 249

11 909

9 330

1 388

3 531

Source: Agency data — This table summarises the data supplied by the Agency in its annual accounts.

Table 3

European Aviation Safety Agency — Revenue and expenditure account for the financial years 2004 and 2003 (1)

| (1000 euro) |
| --- |
| | 2004 | 2003 |
| Operating revenue |
| Community subsidies | 7 777 | 3 725 |
| Other subsidies | 248 | 0 |
| Reimbursement of expenditure | 3 | 0 |
| Other revenue | 350 | 0 |
| Total (a) | 8 378 | 3 725 |
| Operating expenditure |
| Staff | 5 556 | 662 |
| Buildings and related expenditure | 689 | 92 |
| Other administrative expenditure | 743 | 82 |
| Allocation to provisions | 89 | 1 |
| Operating expenditure | 2 081 | 261 |
| Total (b) | 9 158 | 1 098 |
| Operating outturn (c = a – b) | – 780 | 2 627 |
| Financial income (d) | 0 | 0 |
| Financial expenses (e) | 2 | 0 |
| Financial outturn (f = d – e) | –2 | 0 |
| Outturn for the financial year (g = c + f) | – 782 | 2 627 |
| Source: Agency data — This table summarises the data supplied by the Agency in its annual accounts. |

(1000 euro)

2004

2003

Operating revenue

Community subsidies

7 777

3 725

Other subsidies

248

0

Reimbursement of expenditure

3

0

Other revenue

350

0

Total (a)

8 378

3 725

Operating expenditure

Staff

5 556

662

Buildings and related expenditure

689

92

Other administrative expenditure

743

82

Allocation to provisions

89

1

Operating expenditure

2 081

261

Total (b)

9 158

1 098

Operating outturn (c = a – b)

– 780

2 627

Financial income (d)

0

0

Financial expenses (e)

2

0

Financial outturn (f = d – e)

–2

0

Outturn for the financial year (g = c + f)

– 782

2 627

Source: Agency data — This table summarises the data supplied by the Agency in its annual accounts.

Table 4

European Aviation Safety Agency — Balance sheet as at 31 December 2004 and 31 December 2003 (2)

| (1000 euro) |
| --- |
| Assets | 2004 | 2003 | Liabilities | 2004 | 2003 |
| Intangible assets | 69 | 27 | Own capital | | |
| Tangible assets | | | Outturns carried over from previous financial years | 2 627 | 0 |
| | | | Outturn for the financial year | – 782 | 2 627 |
| Computer equipment | 376 | 12 | Subtotal | 1 845 | 2 627 |
| Furniture and vehicles | 285 | 0 | Current liabilities | | |
| Other fittings and equipment | 261 | 0 | Current accounts payable | 549 | 112 |
| Subtotal | 922 | 12 | Sundry accounts payable | 61 | 6 |
| Current assets | | | Amounts owed to Community institutions and bodies | 3 843 | 32 |
| Prefinancing | 70 | 0 | Subtotal | 4 453 | 150 |
| Sundry accounts receivable | 171 | 5 | | | |
| Other accounts receivable | 68 | 5 | | | |
| Amounts owed by Community institutions and bodies | 20 | 1 | | | |
| Subtotal | 329 | 11 | | | |
| Liquid assets | 4 978 | 2 727 | | | |
| Total | 6 298 | 2 777 | Total | 6 298 | 2 777 |
| Source: Agency data — This table summarises the data supplied by the Agency in its annual accounts. |

(1000 euro)

Assets

2004

2003

Liabilities

2004

2003

Intangible assets

69

27

Own capital

Tangible assets

Outturns carried over from previous financial years

2 627

0

Outturn for the financial year

– 782

2 627

Computer equipment

376

12

Subtotal

1 845

2 627

Furniture and vehicles

285

0

Current liabilities

Other fittings and equipment

261

0

Current accounts payable

549

112

Subtotal

922

12

Sundry accounts payable

61

6

Current assets

Amounts owed to Community institutions and bodies

3 843

32

Prefinancing

70

0

Subtotal

4 453

150

Sundry accounts receivable

171

5

Other accounts receivable

68

5

Amounts owed by Community institutions and bodies

20

1

Subtotal

329

11

Liquid assets

4 978

2 727

Total

6 298

2 777

Total

6 298

2 777

Source: Agency data — This table summarises the data supplied by the Agency in its annual accounts.

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(1)  The data for the financial year 2003 have been restated to make them comparable, following the transition to accruals-based accounting.

Source: Agency data — This table summarises the data supplied by the Agency in its annual accounts.

(2)  The data for the financial year 2003 have been restated to make them comparable, following the transition to accruals-based accounting.

Source: Agency data — This table summarises the data supplied by the Agency in its annual accounts.

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THE AGENCY'S REPLIES

| 7. | The Agency has taken into account the Court's observation. The budget for the financial year 2005 and the preliminary draft budget for 2006 were adopted with the breakdown required by the regulations. |
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7.

The Agency has taken into account the Court's observation. The budget for the financial year 2005 and the preliminary draft budget for 2006 were adopted with the breakdown required by the regulations.

| 8. | The Agency has taken into account the loss recorded in 2003 in the revenue and expenditure account for the financial year 2004. As the outturn recorded in 2004 was positive, it ought not to have to be entered in an amending budget. |
| --- | --- |

8.

The Agency has taken into account the loss recorded in 2003 in the revenue and expenditure account for the financial year 2004. As the outturn recorded in 2004 was positive, it ought not to have to be entered in an amending budget.

| 9. | All decisions on transfers in the financial year 2004 were reasoned, with the exception of the first two. The Agency has taken the necessary steps to avoid the situations described by the Court from recurring. |
| --- | --- |

9.

All decisions on transfers in the financial year 2004 were reasoned, with the exception of the first two. The Agency has taken the necessary steps to avoid the situations described by the Court from recurring.

| 10. | The implementing rules for the Agency's financial regulation were adopted by its Management Board on 14 June 2005. A risk manager/internal auditor, whose main task shall be to carry out risk analysis and prepare internal control standards, is being recruited. |
| --- | --- |

10.

The implementing rules for the Agency's financial regulation were adopted by its Management Board on 14 June 2005. A risk manager/internal auditor, whose main task shall be to carry out risk analysis and prepare internal control standards, is being recruited.

| 11. | The Agency will endeavour to improve the transparency of its recruitment procedures, in particular by drawing up manuals of procedure. |
| --- | --- |

11.

The Agency will endeavour to improve the transparency of its recruitment procedures, in particular by drawing up manuals of procedure.

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| 28.12.2005 | EN | Official Journal of the European Union | C 332/8 |
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28.12.2005

EN

Official Journal of the European Union

C 332/8

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REPORT

on the annual accounts of the European Medicines Agency for the financial year 2004 together with the Agency's replies

(2005/C 332/02)

CONTENTS

| 1-2 | INTRODUCTION |
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1-2

| 3-6 | THE COURT'S OPINION |
| --- | --- |

3-6

| 7-9 | OBSERVATIONS |
| --- | --- |

7-9

Tables 1 to 4

The Agency's replies

INTRODUCTION

| 1. | The European Medicines Agency (hereinafter referred to as 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. Table 1 summarises the powers and activities of the Agency on the basis of the information supplied by it. |
| --- | --- |

1.

The European Medicines Agency (hereinafter referred to as 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. Table 1 summarises the powers and activities of the Agency on the basis of the information supplied by it.

| 2. | For information, the annual accounts drawn up by the Agency for the financial year 2004 are summarised in Tables 2, 3 and 4. |
| --- | --- |

2.

For information, the annual accounts drawn up by the Agency for the financial year 2004 are summarised in Tables 2, 3 and 4.

THE COURT'S OPINION

| 3. | The Court's opinion 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.

The Court's opinion 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 2004 (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 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 2004 (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 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 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 Agency's accounts for the financial year ended 31 December 2004 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 Agency's Management Board has set up an Audit Advisory Committee to advise the Executive Director on matters regarding quality assurance and risk-mitigating strategies. The existence of such a body and its operating procedures, including the recruitment procedure for its members, must be provided for, on account of its permanent nature, in the rules which govern the Agency's internal organisation. |
| --- | --- |

7.

The Agency's Management Board has set up an Audit Advisory Committee to advise the Executive Director on matters regarding quality assurance and risk-mitigating strategies. The existence of such a body and its operating procedures, including the recruitment procedure for its members, must be provided for, on account of its permanent nature, in the rules which govern the Agency's internal organisation.

| 8. | The contracts concluded with the banks have been in force for over five years even though the detailed rules for the implementation of the Agency's financial regulation lay down that there should be a new invitation to tender at least once every five years (4). |
| --- | --- |

8.

The contracts concluded with the banks have been in force for over five years even though the detailed rules for the implementation of the Agency's financial regulation lay down that there should be a new invitation to tender at least once every five years (4).

| 9. | The Court notes that the Agency's new financial regulation, as finally adopted after receipt of the Commission's opinion, takes account of the observations which the Court made in its previous report (5). Similarly, the system for managing the Agency's fixed assets has been considerably improved (6). |
| --- | --- |

9.

The Court notes that the Agency's new financial regulation, as finally adopted after receipt of the Commission's opinion, takes account of the observations which the Court made in its previous report (5). Similarly, the system for managing the Agency's fixed assets has been considerably improved (6).

This Report was adopted by the Court of Auditors in Luxembourg at its meeting of 5 October 2005.

For the Court of Auditors

Hubert WEBER

President

---

(1)  OJ L 214, 24.8.1993, p. 1 and OJ L 136, 30.4.2004, p. 1. Pursuant to the latter Regulation the Agency's original name, 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 29 September 2005 and received by the Court on 29 September 2005.

3

(4)  Article 53(3).

4

(5)  See paragraph 7 of the Report for the financial year 2003 (OJ C 324, 30.12.2004, p. 31).

5

(6)  See paragraph 10 of the Report for the financial year 2003).

6

---

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

  (2003 figures) | Products and services

  (2003 figures) |
| --- | --- | --- | --- | --- |
| 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

(2003 figures)

Products and services

(2003 figures)

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 Proprietary Medicinal Products, consisting of two members from each Member State, advises on any question relating to the evaluation of medicinal products for human use. |
| --- | --- |

1.

The Committee for Proprietary Medicinal Products, consisting of two members from each Member State, advises on any question relating to the evaluation of medicinal products for human use.

| 2. | The Committee for Veterinary Medicinal Products, consisting of two members from each Member State, advises on any question relating to the evaluation of veterinary medicinal products. |
| --- | --- |

2.

The Committee for Veterinary Medicinal Products, consisting of two members from each Member State, advises on any question relating to the evaluation of veterinary medicinal products.

| 3. | The Management Board, consisting of two representatives of each Member State, two representatives of the Commission and two representatives appointed by the European Parliament. The Board adopts the work programme and the annual report. |
| --- | --- |

3.

The Management Board, consisting of two representatives of each Member State, two representatives of the Commission and two representatives appointed by the European Parliament. The Board adopts the work programme and the annual report.

| 4. | The Executive Director is appointed by the Management Board on a proposal from the Commission. |
| --- | --- |

4.

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

| 5. | External audit: European Court of Auditors |
| --- | --- |

5.

External audit: European Court of Auditors

| 6. | Discharge is given by the Parliament on a recommendation from the Council. |
| --- | --- |

6.

Discharge is given by the Parliament on a recommendation from the Council.

Final budget:

99,1 million euro (84,2 million euro) including the Community contribution (excluding subsidy for orphan medicines): 24,7 % (22,9 %)

Staff numbers at 31 December 2004:

314 (287) posts provided for in the establishment plan

Posts occupied: 290 (256)

+ 50 (48) other posts (auxiliary contracts, seconded national experts, local staff, employment agency staff)

Total staff: 340 (304)

Assigned to the following duties:

operational: 271 (242)

administrative: 69 (62)

Medicinal products for human use

Applications for marketing authorisations: 51 (39)

Favourable opinions: 34 (39)

Average evaluation time: 187 days (190 days)

Opinions after authorisation: 926 (941)

Pharmacovigilance: 64 186 reports (45 538 reports)

Periodic reliability reports: 253 (276)

Monitoring measures: 948 (1 025)

Scientific opinions: 77 (65)

Procedures for mutual recognition: 7 081(4 080)

Veterinary medicinal products

New applications: 8 (10)

Applications in respect of variants: 40 (64)

Inspection: 93 (76)

Source: Information supplied by the Agency.

Table 2

European Medicines Agency — Implementation of the budget for the financial year 2004

| (1000 euro) |
| --- |
| Revenue | Expenditure |
| Origin of revenue | Revenue entered in the final budget for the financial year | Revenue collected | Allocation of expenditure | Appropriations in the final budget | Appropriations carried over from the previous financial year | Appropriations available
  (2004 budget and financial year 2003) |
| entered | committed | paid | carried over | cancelled | outstanding commitments | paid | cancelled | appropriations | committed | paid | carried over | cancelled |
| Community subsidies (1) | 29 073 | 29 022 | Title I
  Staff | 36 064 | 34 151 | 33 509 | 642 | 1 913 | 534 | 424 | 110 | 36 598 | 34 685 | 33 933 | 642 | 2 023 |
| Own revenue | 67 000 | 67 350 | Title II
  Administration | 23 994 | 23 878 | 12 943 | 10 935 | 116 | 7 265 | 6 749 | 516 | 31 259 | 31 143 | 19 692 | 10 935 | 632 |
| Other revenue | 3 016 | 3 013 | Title III
  Operating activities | 39 031 | 38 686 | 27 512 | 11 174 | 345 | 8 316 | 7 878 | 438 | 47 347 | 47 002 | 35 390 | 11 174 | 783 |
| Total | 99 089 | 99 385 | Total | 99 089 | 96 715 | 73 964 | 22 751 | 2 374 | 16 115 | 15 051 | 1 064 | 115 204 | 112 830 | 89 015 | 22 751 | 3 438 |
| Source: The Agency's data — This table summarises the data provided by the Agency in its annual accounts. |

(1000 euro)

Revenue

Expenditure

Origin of revenue

Revenue entered in the final budget for the financial year

Revenue collected

Allocation of expenditure

Appropriations in the final budget

Appropriations carried over from the previous financial year

Appropriations available

(2004 budget and financial year 2003)

entered

committed

paid

carried over

cancelled

outstanding commitments

paid

cancelled

appropriations

committed

paid

carried over

cancelled

Community subsidies (1)

29 073

29 022

Title I

Staff

36 064

34 151

33 509

642

1 913

534

424

110

36 598

34 685

33 933

642

2 023

Own revenue

67 000

67 350

Title II

Administration

23 994

23 878

12 943

10 935

116

7 265

6 749

516

31 259

31 143

19 692

10 935

632

Other revenue

3 016

3 013

Title III

Operating activities

39 031

38 686

27 512

11 174

345

8 316

7 878

438

47 347

47 002

35 390

11 174

783

Total

99 089

99 385

Total

99 089

96 715

73 964

22 751

2 374

16 115

15 051

1 064

115 204

112 830

89 015

22 751

3 438

Source: The Agency's data — This table summarises the data provided by the Agency in its annual accounts.

Table 3

European Medicines Agency — Revenue and expenditure account for the financial years 2004 and 2003

| (1000 euro) |
| --- |
| | 2004 | 2003 (2) |
| Revenue |
| Fees relating to marketing authorisations | 68 412 | 58 657 |
| Commission subsidy including contributions received from the EEA | 20 529 | 19 786 |
| Community subsidy for orphan medicines | 4 026 | 2 814 |
| Contributions for Community programmes | 0 | 1 208 |
| Administrative revenue | 1 973 | 1 703 |
| Sundry revenue | 1 473 | 1 788 |
| Total (a) | 96 413 | 85 956 |
| Expenditure |
| Staff expenditure | 34 333 | 29 663 |
| Administrative expenditure | 11 224 | 10 835 |
| Operating expenditure | 38 573 | 32 838 |
| Depreciation | 3 650 | 2 364 |
| Other expenses | 280 | 0 |
| Total (b) | 88 060 | 75 700 |
| Operating result (c = a – b) | 8 353 | 10 256 |
| Financial result (e) | 1 160 | 676 |
| Economic outturn (f = c + e) | 9 513 | 10 932 |
| Source: The Agency's data — This table summarises the data provided by the Agency in its annual accounts. |

(1000 euro)

2004

2003 (2)

Revenue

Fees relating to marketing authorisations

68 412

58 657

Commission subsidy including contributions received from the EEA

20 529

19 786

Community subsidy for orphan medicines

4 026

2 814

Contributions for Community programmes

0

1 208

Administrative revenue

1 973

1 703

Sundry revenue

1 473

1 788

Total (a)

96 413

85 956

Expenditure

Staff expenditure

34 333

29 663

Administrative expenditure

11 224

10 835

Operating expenditure

38 573

32 838

Depreciation

3 650

2 364

Other expenses

280

0

Total (b)

88 060

75 700

Operating result (c = a – b)

8 353

10 256

Financial result (e)

1 160

676

Economic outturn (f = c + e)

9 513

10 932

Source: The Agency's data — This table summarises the data provided by the Agency in its annual accounts.

Table 4

European Medicines Agency — Balance sheet at 31 December 2004 and 31 December 2003

| (1000 euro) |
| --- |
| Assets | 2004 | 2003 | Liabilities | 2004 | 2003 |
| Intangible assets | 5 109 | 3 401 | Own capital | | |
| | | | Outturn carried over from previous financial years | 13 767 | 6 872 |
| Fixed assets | | | Economic outturn | 9 513 | 10 932 |
| Plant, machinery and tools | 2 480 | 1 635 | Subtotal | 23 280 | 17 804 |
| Furniture and vehicle fleet | 1 375 | 1 011 | | | |
| Computer equipment | 3 151 | 2 548 | Current liabilities | | |
| Subtotal | 7 006 | 5 194 | Amounts owed in social security charges | 320 | 0 |
| | | | Amounts owed to Community institutions and bodies | 4 910 | 479 |
| Current assets | | | Current liabilities | 13 151 | 11 936 |
| VAT paid and to be recovered | 1 888 | 1 105 | Other accounts payable | 106 | 127 |
| Amounts owed by Community institutions and bodies | 148 | 107 | Advances from customers | 11 250 | 8 845 |
| Sundry accounts receivable | 1 795 | 1 034 | Subtotal | 29 737 | 21 387 |
| Sundry receivables and advances | 2 061 | 64 | | | |
| Subtotal | 5 892 | 2 310 | | | |
| Available assets | 35 010 | 28 286 | | | |
| Total | 53 017 | 39 191 | Total | 53 017 | 39 191 |
| Source: The Agency's data — This table summarises the data provided by the Agency in its annual accounts. |

(1000 euro)

Assets

2004

2003

Liabilities

2004

2003

Intangible assets

5 109

3 401

Own capital

Outturn carried over from previous financial years

13 767

6 872

Fixed assets

Economic outturn

9 513

10 932

Plant, machinery and tools

2 480

1 635

Subtotal

23 280

17 804

Furniture and vehicle fleet

1 375

1 011

Computer equipment

3 151

2 548

Current liabilities

Subtotal

7 006

5 194

Amounts owed in social security charges

320

0

Amounts owed to Community institutions and bodies

4 910

479

Current assets

Current liabilities

13 151

11 936

VAT paid and to be recovered

1 888

1 105

Other accounts payable

106

127

Amounts owed by Community institutions and bodies

148

107

Advances from customers

11 250

8 845

Sundry accounts receivable

1 795

1 034

Subtotal

29 737

21 387

Sundry receivables and advances

2 061

64

Subtotal

5 892

2 310

Available assets

35 010

28 286

Total

53 017

39 191

Total

53 017

39 191

Source: The Agency's data — This table summarises the data provided by the Agency in its annual accounts.

---

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

Source: The Agency's data — This table summarises the data provided by the Agency in its annual accounts.

(2)  The data for the financial year 2003 have been reprocessed to make them comparable to those of 2004.

Source: The Agency's data — This table summarises the data provided by the Agency in its annual accounts.

---

THE AGENCY'S REPLIES

| 7. | The Audit Advisory Committee is a consultative body and has no operational role in the internal organisation of the Agency. On 4 February 2005 the Management Board of the agency adopted the Terms of Reference of the Audit Advisory Committee which include the mission statement of this committee as well as the rules of proceedings. |
| --- | --- |

7.

The Audit Advisory Committee is a consultative body and has no operational role in the internal organisation of the Agency. On 4 February 2005 the Management Board of the agency adopted the Terms of Reference of the Audit Advisory Committee which include the mission statement of this committee as well as the rules of proceedings.

| 8. | The Agency has had to implement a wide-ranging reform of the Financial Regulation and Accounting procedures over the last few years. It was considered prudent not to seek a change in the main bank at the same time due to the integration of our systems with this bank's electronic payment system. Now that the Agency is in the final stage of implementing the new Financial Regulation, a call for tender will be launched in the last quarter of this year. However it should be noted that substantial reductions in bank transfer costs have been achieved through direct negotiations with the bank and automation of payments. Also placements of funds are subject to individual bids from up to three banks based on the market rates on a particular day. |
| --- | --- |

8.

The Agency has had to implement a wide-ranging reform of the Financial Regulation and Accounting procedures over the last few years. It was considered prudent not to seek a change in the main bank at the same time due to the integration of our systems with this bank's electronic payment system. Now that the Agency is in the final stage of implementing the new Financial Regulation, a call for tender will be launched in the last quarter of this year. However it should be noted that substantial reductions in bank transfer costs have been achieved through direct negotiations with the bank and automation of payments. Also placements of funds are subject to individual bids from up to three banks based on the market rates on a particular day.

| 9. | The Agency notes with satisfaction that these points, mentioned in the Court's report on the 2003 accounts, have been resolved. |
| --- | --- |

9.

The Agency notes with satisfaction that these points, mentioned in the Court's report on the 2003 accounts, have been resolved.

---

| 28.12.2005 | EN | Official Journal of the European Union | C 332/15 |
| --- | --- | --- | --- |

28.12.2005

EN

Official Journal of the European Union

C 332/15

---

REPORT

on the annual accounts of the European Agency for Reconstruction for the financial year 2004 together with the Agency's replies

(2005/C 332/03)

CONTENTS

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

1-2

| 3-6 | THE COURT'S OPINION |
| --- | --- |

3-6

| 7-14 | OBSERVATIONS |
| --- | --- |

7-14

Tables 1 to 4

The Agency's replies

INTRODUCTION

| 1. | The European Agency for Reconstruction (hereinafter called the Agency) was established pursuant to Council Regulation (EC) No 1628/96 (1). This Regulation was replaced by Council Regulation (EC) No 2068/2004 (2). The Agency, which was actually set up in February 2000, was initially responsible for managing the EU's aid programmes in Kosovo. Following three extensions to its mandate in 2001, 2002 and 2004, its operations now also cover Serbia and Montenegro and the former Yugoslav Republic of Macedonia. The Agency's head office is in Thessaloniki 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. Table 1 summarises the Agency's powers and activities based on information provided by the Agency itself. |
| --- | --- |

1.

The European Agency for Reconstruction (hereinafter called the Agency) was established pursuant to Council Regulation (EC) No 1628/96 (1). This Regulation was replaced by Council Regulation (EC) No 2068/2004 (2). The Agency, which was actually set up in February 2000, was initially responsible for managing the EU's aid programmes in Kosovo. Following three extensions to its mandate in 2001, 2002 and 2004, its operations now also cover Serbia and Montenegro and the former Yugoslav Republic of Macedonia. The Agency's head office is in Thessaloniki 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. Table 1 summarises the Agency's powers and activities based on information provided by the Agency itself.

| 2. | For information purposes the annual accounts drawn up by the Agency for the financial year 2004 are summarised in Tables 2, 3 and 4. |
| --- | --- |

2.

For information purposes the annual accounts drawn up by the Agency for the financial year 2004 are summarised in Tables 2, 3 and 4.

THE COURT'S OPINION

| 3. | The Court's opinion 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 Agency's accounts, as required by Article 248 of the Treaty establishing the European Community. |
| --- | --- |

3.

The Court's opinion 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 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 2004 (4) were drawn up by its Director, pursuant to Article 8(2) of Council Regulation (EC) No 2667/2000 (5), 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 2004 (4) were drawn up by its Director, pursuant to Article 8(2) of Council Regulation (EC) No 2667/2000 (5), 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 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 accountsExcept for the issue mentioned in paragraph 9, the Agency's accounts for the financial year ended 31 December 2004, in all material respects, are reliable.Legality and regularity of underlying transactionsExcept for the issue mentioned in paragraph 11, the transactions underlying the Agency's accounts, taken as a whole, are legal and regular.

OBSERVATIONS

| 7. | Although significant funds were maintained throughout the year (6), the Agency has no active treasury management policy in place; considerable amounts are maintained on current bank accounts without their earnings being checked by the Agency. |
| --- | --- |

7.

Although significant funds were maintained throughout the year (6), the Agency has no active treasury management policy in place; considerable amounts are maintained on current bank accounts without their earnings being checked by the Agency.

| 8. | Reconciliations between bank accounts and the Agency's accounting records are not regularly carried out. With the introduction of accruals accounting in 2005, it is even more relevant that bank accounts be reconciled with the accounting records on a monthly basis. |
| --- | --- |

8.

Reconciliations between bank accounts and the Agency's accounting records are not regularly carried out. With the introduction of accruals accounting in 2005, it is even more relevant that bank accounts be reconciled with the accounting records on a monthly basis.

| 9. | In the absence of effective internal control procedures for long-term receivables the Court cannot be certain that the transactions relating to counterpart funds, credit line schemes and special funds have been completely recorded. |
| --- | --- |

9.

In the absence of effective internal control procedures for long-term receivables the Court cannot be certain that the transactions relating to counterpart funds, credit line schemes and special funds have been completely recorded.

| 10. | One of the main problems the Agency faces is the difficulty in recruiting agents capable of carrying out the difficult tasks with which it is entrusted. The policy of renewing the mandate of the Agency for short periods of time increases this problem as very few individuals with the required profile will relocate under these circumstances. |
| --- | --- |

10.

One of the main problems the Agency faces is the difficulty in recruiting agents capable of carrying out the difficult tasks with which it is entrusted. The policy of renewing the mandate of the Agency for short periods of time increases this problem as very few individuals with the required profile will relocate under these circumstances.

| 11. | In its 2003 report (7), the Court noted anomalies which had affected decisions in awarding contracts. In 2004 this situation was again observed. Tenders are the subject of formal procedures which constitute the main guarantee against unequal treatment between tenderers. It is therefore essential to ensure that procedures are strictly applied. Many of the difficulties encountered were due to the fact that criteria set in calls for tender were open to interpretation because they were unsuited to the practical situation. The Agency should thus be particularly attentive when setting selection criteria to avoid unrealistic requirements which would later lead to interpretation and ineffective procedures. |
| --- | --- |

11.

In its 2003 report (7), the Court noted anomalies which had affected decisions in awarding contracts. In 2004 this situation was again observed. Tenders are the subject of formal procedures which constitute the main guarantee against unequal treatment between tenderers. It is therefore essential to ensure that procedures are strictly applied. Many of the difficulties encountered were due to the fact that criteria set in calls for tender were open to interpretation because they were unsuited to the practical situation. The Agency should thus be particularly attentive when setting selection criteria to avoid unrealistic requirements which would later lead to interpretation and ineffective procedures.

| 12. | A review of operations entrusted to the United Nations Mission in Kosovo (UNMIK) was carried out. It has covered all 16 operations still open in the Agency's accounts totalling 30,7 million euro (2004 payments 2,5 million euro). In those cases where UNMIK is directly managing the contracts, the Agency made payments without exercising adequate financial control. The frequent absence of audit trail requires an in-depth review of the applicability of the agreement (8) signed between the Commission and the United Nations. |
| --- | --- |

12.

A review of operations entrusted to the United Nations Mission in Kosovo (UNMIK) was carried out. It has covered all 16 operations still open in the Agency's accounts totalling 30,7 million euro (2004 payments 2,5 million euro). In those cases where UNMIK is directly managing the contracts, the Agency made payments without exercising adequate financial control. The frequent absence of audit trail requires an in-depth review of the applicability of the agreement (8) signed between the Commission and the United Nations.

| 13. | In the cases of funds where UNMIK was acting on behalf of the local government departments, the management of these operations was entirely left to these departments. The Agency has not paid sufficient attention to the proper financial organisation of the beneficiaries because it assumed this was the legal responsibility of UNMIK and was then faced with serious difficulties in closing the operations mainly due to an absence of adequate accounts for the projects and of sufficient justification for the expenditure. |
| --- | --- |

13.

In the cases of funds where UNMIK was acting on behalf of the local government departments, the management of these operations was entirely left to these departments. The Agency has not paid sufficient attention to the proper financial organisation of the beneficiaries because it assumed this was the legal responsibility of UNMIK and was then faced with serious difficulties in closing the operations mainly due to an absence of adequate accounts for the projects and of sufficient justification for the expenditure.

| 14. | Concerning supporting documentation for payments, a standardised system of dealing with payment requests needs to be adopted and criteria set on the kind of supporting evidence that is necessary for a payment to be made. |
| --- | --- |

14.

Concerning supporting documentation for payments, a standardised system of dealing with payment requests needs to be adopted and criteria set on the kind of supporting evidence that is necessary for a payment to be made.

This report was adopted by the Court of Auditors in Luxembourg at its meeting of 10 November 2005.

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)  OJ L 248, 16.9.2002, p. 1.

3

(4)  These accounts were drawn up on 13 October 2005 and received by the Court on 18 October 2005.

4

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

5

(6)  The bank account balance at 31 December 2004 was 158 million euro — see Table 4.

6

Table 4

(7)  Issued on 10 December 2004.

7

(8)  Financial and Administrative Framework Agreement (FAFA) signed between the European Commission and the United Nations on 29 April 2003.

8

---

Table 1

European Agency for Reconstruction (Thessaloniki)

| Areas of EU responsibility according to the Treaty | The Agency's powers as defined in Council Regulation (EC) No 2667/2000 of 5 December 2000 | Governance | Resources made available to the Agency

  (data for 2003) | Activities and services provided in 2004 |
| --- | --- | --- | --- | --- |
| | Objectives | Application | Tasks | Governing Board Comprises one representative from each Member State, two representatives from the Commission and an observer from the European Investment Bank.

  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.

  External control European Court of Auditors

  Discharge authority the Parliament following a recommendation from the Council. | Final budget | Overall figures |
| 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) | To provide EU assistance:






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

Areas of EU responsibility according to the Treaty

The Agency's powers as defined in Council Regulation (EC) No 2667/2000 of 5 December 2000

Governance

Resources made available to the Agency

(data for 2003)

Activities and services provided in 2004

Objectives

Application

Tasks

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

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.

External control European Court of Auditors

Discharge authority the Parliament following a recommendation from the Council.

Final budget

Overall figures

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)

To provide EU assistance:

(i)

for reconstruction, 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.

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.

| — | 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.

374,6 million euro (358,6 million euro) including an EU grant of 96,7 % (97,4 %)

Staff as at 31 December 2004:

114 (120) posts listed in the establishment plan

posts occupied: 88 (94)

other posts — local staff: 195 (201) posts of which 173 (173) were occupied

Total staff: 261 (267)

Responsible for

operational tasks: 184

administrative tasks: 77

Appropriations:

Contracted:

Paid:

374,6 million euro

299 million euro

292,8 million euro

By operational centre:

KOSOVO: (a) start-up grants, loans, training and business advice to small businesses; (b) legal assistance to vulnerable persons; (c) loans provided from the EAR credit schemes; (d) substantial and complex repairs to the fire damaged thermal power plant Kosovo B; (e) rehabilitation of the ‘Sunny Hill’ district heating sub-station in Pristina; (f) six bridges reopened between Pristina and the border crossing with FYROM.

SERBIA: (a) draft laws in Public Administration Reform; (b) training programmes for special police bodies; (c) rehabilitation programme for hospitals; (d) new jobs created due to loans from the Revolving Credit Fund; (e) training support to enterprises; (f) overhaul of thermal power plants; (g) regional training centres for adults; pilot schools rehabilitated and supplied with IT equipment; (h) works on the Sloboda bridge and the Horgos border crossing point with Hungary.

MONTENEGRO: (a) specialised training to border police and to civil servants; (b) central IT database of the Ministry of Interior; (c) Agency for Human Resources Management, regional centres for vocational education and training; (d) veterinary laboratory; (e) new Roads Directorate and transport laws; (f) master plans for wastewater and solid waste; (g) Electric Utility unbundling/restructuring, energy efficiency strategy.

FYROM: (a) 90 % of Internally Displaced Persons returned to their pre-conflict homes; (b) training of mainly ethnic Albanians to become public servants; (c) new jobs created and jobs preserved due to loans to SMEs from the Revolving Credit Fund; Agency for Entrepreneurship Promotion and SME Observatory set up; (d) three new institutes developed and their staff trained.

Source: Information supplied by the Agency.

Table 2

European Agency for Reconstruction — Implementation of the budget for the financial year 2004

| (million euro) |
| --- |
| Revenue | Expenditure |
| Source of revenue | Revenue entered in the final budget for the financial year | Revenue received | 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 grants | 362,3 | 232,3 | Title I
  Staff | 18,8 | 17,6 | 17,3 | 0,3 | 1,3 | — | 0,3 | 0,2 | 0,1 | — |
| Other grants and counterpart funds | 0,4 | 5,6 | Title II
  Administration | 7,1 | 6,2 | 5,1 | 1,1 | 0,9 | — | 1,2 | 1,1 | 0,1 | — |
| Re-use credits (C5) from previous years | 0,0 | 0,0 | Reuse credits (C5) from previous years | 0,4 | 0,1 | 0,1 | 0,0 | 0,2 | 0,0 | — | — | — | — |
| Remaining funds | 11,9 | 0,0 | Title III
  Operating activities | 348,7 | 139,4 | 23,2 | 116,2 | 0,0 | 209,2 | 345,4 | 200,3 | 6,7 | 138,4 |
| Miscellaneous revenues (re-use) | p.m. | 1,1 | Sub-total | 375,0 | 163,3 | 45,7 | 117,6 | 2,4 | 209,2 | 346,9 | 201,6 | 6,8 | 138,4 |
| | | | Appropriations carried over from 2003 | 239,1 | 135,7 | 45,5 | 90,3 | 4,1 | 99,4 | — | — | — | — |
| Total | 374,6 | 239,0 | Total | 614,1 | 299,0 | 91,2 | 207,9 | 6,5 | 308,6 | 346,9 | 201,6 | 6,8 | 138,4 |
| NB: Discrepancies in totals are due to the effects of rounding.

  Source: The Agency's data — This table summarises the data provided by the Agency in its annual accounts. |

(million euro)

Revenue

Expenditure

Source of revenue

Revenue entered in the final budget for the financial year

Revenue received

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 grants

362,3

232,3

Title I

Staff

18,8

17,6

17,3

0,3

1,3

—

0,3

0,2

0,1

—

Other grants and counterpart funds

0,4

5,6

Title II

Administration

7,1

6,2

5,1

1,1

0,9

—

1,2

1,1

0,1

—

Re-use credits (C5) from previous years

0,0

0,0

Reuse credits (C5) from previous years

0,4

0,1

0,1

0,0

0,2

0,0

—

—

—

—

Remaining funds

11,9

0,0

Title III

Operating activities

348,7

139,4

23,2

116,2

0,0

209,2

345,4

200,3

6,7

138,4

Miscellaneous revenues (re-use)

p.m.

1,1

Sub-total

375,0

163,3

45,7

117,6

2,4

209,2

346,9

201,6

6,8

138,4

Appropriations carried over from 2003

239,1

135,7

45,5

90,3

4,1

99,4

—

—

—

—

Total

374,6

239,0

Total

614,1

299,0

91,2

207,9

6,5

308,6

346,9

201,6

6,8

138,4

NB: Discrepancies in totals are due to the effects of rounding.

Source: The Agency's data — This table summarises the data provided by the Agency in its annual accounts.

Table 3

European Agency for Reconstruction — Revenue and expenditure account for the financial years 2004 and 2003 (1)

| (1000 euro) |
| --- |
| | 2004 | 2003 |
| Revenue |
| EC subsidy | 231 909 | 274 221 |
| Recovery of expenses (reuse Title III) | 1 229 | 1 318 |
| Revenues from administrative operations (reuse Titles I and II) | 181 | 199 |
| Other operating revenue | 6 113 | 28 413 |
| Total operating revenue | 239 432 | 304 151 |
| Expenditure |
| Administrative expenses |
| — Staff expenses | 17 575 | 17 333 |
| — Other administrative expenses | 6 290 | 6 475 |
| Operational expenses |
| — Centralised direct management | 268 965 | 297 168 |
| Total administrative and operational expenditure | 292 830 | 320 976 |
| Surplus/(Deficit) from operating activities | –53 398 | –16 825 |
| Extraordinary gains | 738 | 0 |
| Extraordinary losses | –1 269 | –4 118 |
| Economic result of the year | –53 929 | –20 943 |
| NB: Any discrepancies in totals are due to the effects of rounding.

  Source: The Agency's data — This table summarises the data provided by the Agency in its annual accounts. |

(1000 euro)

2004

2003

Revenue

EC subsidy

231 909

274 221

Recovery of expenses (reuse Title III)

1 229

1 318

Revenues from administrative operations (reuse Titles I and II)

181

199

Other operating revenue

6 113

28 413

Total operating revenue

239 432

304 151

Expenditure

Administrative expenses

— Staff expenses

17 575

17 333

— Other administrative expenses

6 290

6 475

Operational expenses

— Centralised direct management

268 965

297 168

Total administrative and operational expenditure

292 830

320 976

Surplus/(Deficit) from operating activities

–53 398

–16 825

Extraordinary gains

738

0

Extraordinary losses

–1 269

–4 118

Economic result of the year

–53 929

–20 943

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

Source: The Agency's data — This table summarises the data provided by the Agency in its annual accounts.

Table 4

European Agency for Reconstruction — Balance sheet as at 31 December 2004 and 31 December 2003 (2)

| (1000 euro) |
| --- |
| Assets | 2004 | 2003 | Liabilities | 2004 | 2003 |
| Fixed assets | | | Fixed capital | | |
| Fixed assets at net book value | 1 652 | 1 771 | Own capital (3) | 63 270 | 1 771 |
| Subtotal | 1 652 | 1 771 | Accumulated surplus | 150 332 | 204 261 |
| Long-term receivables | | | Subtotal | 213 602 | 206 032 |
| Counterpart funds, credit line schemes and special funds | 61 619 | 0 | Current liabilities | | |
| Subtotal | 61 619 | 0 | Employee benefits | 28 | 0 |
| Current receivables | | | Current payables | 9 619 | 6 067 |
| Current receivables | 1 761 | 135 | Other accounts payable | 37 | 515 |
| Subtotal | 1 761 | 135 | | | |
| Cash accounts | | | Subtotal | 9 684 | 6 582 |
| Cash and cash equivalents | 158 254 | 210 708 | | | |
| Subtotal | 158 254 | 210 708 | | | |
| Total | 223 286 | 212 614 | Total | 223 286 | 212 614 |
| NB: Any discrepancies in totals are due to the effects of rounding.

  Source: The Agency's data — This table summarises the data provided by the Agency in its annual accounts. |

(1000 euro)

Assets

2004

2003

Liabilities

2004

2003

Fixed assets

Fixed capital

Fixed assets at net book value

1 652

1 771

Own capital (3)

63 270

1 771

Subtotal

1 652

1 771

Accumulated surplus

150 332

204 261

Long-term receivables

Subtotal

213 602

206 032

Counterpart funds, credit line schemes and special funds

61 619

0

Current liabilities

Subtotal

61 619

0

Employee benefits

28

0

Current receivables

Current payables

9 619

6 067

Current receivables

1 761

135

Other accounts payable

37

515

Subtotal

1 761

135

Cash accounts

Subtotal

9 684

6 582

Cash and cash equivalents

158 254

210 708

Subtotal

158 254

210 708

Total

223 286

212 614

Total

223 286

212 614

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

Source: The Agency's data — This table summarises the data provided by the Agency in its annual accounts.

---

(1)  The figures for 2003 have been adjusted from those previously presented to reflect a change in accounting practices.

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

Source: The Agency's data — This table summarises the data provided by the Agency in its annual accounts.

(2)  The figures for 2003 have been adjusted from those previously presented to reflect a change in accounting practices.

(3)  Own capital is calculated as the sum of Fixed assets and Long-term receivables.

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

Source: The Agency's data — This table summarises the data provided by the Agency in its annual accounts.

---

THE AGENCY'S REPLIES

| 7. | The funds available in the Agency's bank accounts are commensurate with its disbursement needs, taking into account that payments may reach peaks of 45 million euro in a single month and that there was in December 2004 a total outstanding amount of 345 million euro to be paid on contracted funds. Disruption in treasury due to delays in receiving the requested tranches of the EC subsidy also needs to be avoided. The Agency follows a treasury policy in line with the Commission's practice. Following the Court's observation, guidance from DG Budget will be sought. Recovery orders are issued to ensure proper recording in the accounts. In 2004, 2,9 million euro was earned on the EAR bank accounts. |
| --- | --- |

7.

The funds available in the Agency's bank accounts are commensurate with its disbursement needs, taking into account that payments may reach peaks of 45 million euro in a single month and that there was in December 2004 a total outstanding amount of 345 million euro to be paid on contracted funds. Disruption in treasury due to delays in receiving the requested tranches of the EC subsidy also needs to be avoided. The Agency follows a treasury policy in line with the Commission's practice. Following the Court's observation, guidance from DG Budget will be sought. Recovery orders are issued to ensure proper recording in the accounts. In 2004, 2,9 million euro was earned on the EAR bank accounts.

| 8. | Bank reconciliations were frequently carried out by the Agency before the introduction of the new double entry computerised accounting tool in mid-2004. The Agency agrees to perform them on a monthly basis. |
| --- | --- |

8.

Bank reconciliations were frequently carried out by the Agency before the introduction of the new double entry computerised accounting tool in mid-2004. The Agency agrees to perform them on a monthly basis.

| 9. | In accordance with its commitments taken in the context of the 2003 discharge procedure, the Agency has entered in the final 2004 accounts the original value of the investment less a provision for bad debts for all counterpart funds and credit line schemes and the unspent amount for special funds. All of these activities have undergone or are undergoing external audits in 2005. The Agency considers that the accounts provide a fair and complete view of the EAR long term receivables. Any minor adaptation needed will be made in the 2005 balance. |
| --- | --- |

9.

In accordance with its commitments taken in the context of the 2003 discharge procedure, the Agency has entered in the final 2004 accounts the original value of the investment less a provision for bad debts for all counterpart funds and credit line schemes and the unspent amount for special funds. All of these activities have undergone or are undergoing external audits in 2005. The Agency considers that the accounts provide a fair and complete view of the EAR long term receivables. Any minor adaptation needed will be made in the 2005 balance.

| 11. | The Agency operates under difficult circumstances in a demanding environment and is fully aware of the risk involved in managing substantial amounts of assistance under such conditions. It therefore established an elaborated procurement system with clear division of tasks amongst its operational, procurement and finance staff. The EAR has taken appropriate measures to address the issues raised by the Court in its annual report for 2003 finalised and published end of 2004; thus the improvements could not be visible in 2004 but will be appreciated in the context of the audit for the 2005 exercise. The EAR in particular provided central guidance to the actors involved in calls for tenders across the Agency and improved the coherence of applicable standards and approaches. Such efforts will continue in order to ensure that the relevant recommendations of the Court are complied with. |
| --- | --- |

11.

The Agency operates under difficult circumstances in a demanding environment and is fully aware of the risk involved in managing substantial amounts of assistance under such conditions. It therefore established an elaborated procurement system with clear division of tasks amongst its operational, procurement and finance staff. The EAR has taken appropriate measures to address the issues raised by the Court in its annual report for 2003 finalised and published end of 2004; thus the improvements could not be visible in 2004 but will be appreciated in the context of the audit for the 2005 exercise. The EAR in particular provided central guidance to the actors involved in calls for tenders across the Agency and improved the coherence of applicable standards and approaches. Such efforts will continue in order to ensure that the relevant recommendations of the Court are complied with.

| 12. | The Agency attempts by all means to ensure that UNMIK respects its relevant obligations. The EAR's policy is to insist in particular on receiving in due time and form the reports provided for in the contracts, and to reject them if inappropriate. No further payments are made without checking the financial data and documents required. The EAR also funds audits at the most appropriate stage of implementation, normally in view of, or immediately after, the closure of a contract. These audits are ‘subject to the internal and external auditing procedures laid down in the Financial Regulations, rules and directives of the United Nations’ as stipulated in Article 1(a) of the FAFA. |
| --- | --- |

12.

The Agency attempts by all means to ensure that UNMIK respects its relevant obligations. The EAR's policy is to insist in particular on receiving in due time and form the reports provided for in the contracts, and to reject them if inappropriate. No further payments are made without checking the financial data and documents required. The EAR also funds audits at the most appropriate stage of implementation, normally in view of, or immediately after, the closure of a contract. These audits are ‘subject to the internal and external auditing procedures laid down in the Financial Regulations, rules and directives of the United Nations’ as stipulated in Article 1(a) of the FAFA.

| 13. | The terms of the EAR grant agreements with UNMIK are clear on the respective shares of responsibility. UNMIK is the responsible organisation regarding government departments. Conscious of the difficulties mentioned, the Agency provided technical and financial advice in the framework of certain grant agreements. This practice will be further extended in future. The Agency's final payments to UNMIK are conditional to the respect of financial requirements, based on reports by independent auditors. |
| --- | --- |

13.

The terms of the EAR grant agreements with UNMIK are clear on the respective shares of responsibility. UNMIK is the responsible organisation regarding government departments. Conscious of the difficulties mentioned, the Agency provided technical and financial advice in the framework of certain grant agreements. This practice will be further extended in future. The Agency's final payments to UNMIK are conditional to the respect of financial requirements, based on reports by independent auditors.

| 14. | The Agency uses a workflow (financial circuit) with two verifications prior to authorisation and standard checklists. An Instruction Note with the detailed procedure for processing invoices was updated in mid-2004. Efforts to further strengthen and standardise these rules will continue. |
| --- | --- |

14.

The Agency uses a workflow (financial circuit) with two verifications prior to authorisation and standard checklists. An Instruction Note with the detailed procedure for processing invoices was updated in mid-2004. Efforts to further strengthen and standardise these rules will continue.

---

| 28.12.2005 | EN | Official Journal of the European Union | C 332/23 |
| --- | --- | --- | --- |

28.12.2005

EN

Official Journal of the European Union

C 332/23

---

REPORT

on the annual accounts of the European Agency for Safety and Health at Work for the financial year 2004 together with the Agency's replies

(2005/C 332/04)

CONTENTS

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

1-2

| 3-6 | THE COURT'S OPINION |
| --- | --- |

3-6

| 7-9 | OBSERVATIONS |
| --- | --- |

7-9

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. Table 1 summarises the Agency's competences and activities based on information provided by the Agency. |
| --- | --- |

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. Table 1 summarises the Agency's competences and activities based on information provided by the Agency.

| 2. | For information, the annual accounts drawn up by the Agency for the financial year 2004 are summarised in Tables 2, 3 and 4. |
| --- | --- |

2.

For information, the annual accounts drawn up by the Agency for the financial year 2004 are summarised in Tables 2, 3 and 4.

THE COURT'S OPINION

| 3. | The Court's opinion 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.

The Court's opinion 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 2004 (3) were drawn up by its Executive Director, pursuant to Article 14 of Regulation (EC) No 2062/94, 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 Agency's accounts for the financial year ended 31 December 2004 (3) were drawn up by its Executive Director, pursuant to Article 14 of Regulation (EC) No 2062/94, 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 obtained a reasonable basis to support the following opinion. |
| --- | --- |

6.

The Court has obtained a reasonable basis to support the following opinion.

Reliability of the accountsThe Agency's accounts for the financial year ended 31 December 2004 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 Agency has not yet put in place detailed rules for the implementation of its new financial regulation or provided for internal control procedures based on risk analysis (4). |
| --- | --- |

7.

The Agency has not yet put in place detailed rules for the implementation of its new financial regulation or provided for internal control procedures based on risk analysis (4).

| 8. | Four framework contracts signed more than four years ago were used in 2004 for contracts amounting in total to 208 000 euro. Article 117 of the detailed rules for the implementation of the Financial Regulation (5) applicable to the general budget limits the duration of such contracts to four years. |
| --- | --- |

8.

Four framework contracts signed more than four years ago were used in 2004 for contracts amounting in total to 208 000 euro. Article 117 of the detailed rules for the implementation of the Financial Regulation (5) applicable to the general budget limits the duration of such contracts to four years.

| 9. | The revenue and expenditure account for the financial year 2003 shows, before economic adjustments, a loss of 1 987 000 euro connected with the implementation of the Agency's budget. This balance ought to have been included in an amending budget for the financial year 2004 (6). |
| --- | --- |

9.

The revenue and expenditure account for the financial year 2003 shows, before economic adjustments, a loss of 1 987 000 euro connected with the implementation of the Agency's budget. This balance ought to have been included in an amending budget for the financial year 2004 (6).

This report was adopted by the Court of Auditors in Luxembourg at its meeting of 5 October 2005.

For the Court of Auditors

Hubert WEBER

President

---

(1)  OJ L 216, 20.8.1994, p. 1. Regulation amended by Council Regulation (EC) No 1654/2003 of 18 June 2003 (OJ L 245, 29.9.2003, p. 38).

1

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

2

(3)  These accounts were drawn up on 6 September 2005 and received by the Court on 19 September 2005.

3

(4)  Article 38 of the Agency's financial regulation.

4

(5)  Commission Regulation (EC, Euratom) No 2342/2002 of 23 December 2002 (OJ L 357, 31.12.2002). The provisions of this regulation apply to the Agency on the basis of Article 74 of Commission Regulation (EC, Euratom) No 2343/2002 of 23 December 2002 laying down the financial framework for the bodies mentioned in Article 185 of the Financial Regulation applicable to the general budget.

5

(6)  Article 16 of the Agency's financial regulation.

6

---

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) | Governance | Resources made available to the Agency in 2004

  (2003 data) | Products and services supplied in 2004 |
| --- | --- | --- | --- | --- |
| Social provisions | Objectives | Tasks | 1. Administrative Board | Final budget: | Development of the network |
| 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) | — | To provide the Community bodies, the Member States and those involved in the field with information of use in the field of safety and health at work in order to encourage improvements, especially in the working environment, as regards the protection of the safety and health of workers. |

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)

Governance

Resources made available to the Agency in 2004

(2003 data)

Products and services supplied in 2004

Social provisions

Objectives

Tasks

1. Administrative Board

Final budget:

Development of the network

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)

—

To provide the Community bodies, the Member States and those involved in the field with information of use in the field of safety and health at work in order to encourage improvements, especially in the working environment, as regards the protection of the safety and health of workers.

| — | To collect and disseminate information on national and Community priorities and on research; |
| --- | --- |

—

To collect 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 from and to third countries and international organisations; |
| --- | --- |

—

to make available information from and to third countries and international organisations;

| — | to provide information on preventive activities; |
| --- | --- |

—

to provide information on preventive activities;

| — | to contribute to the development of future Community action programmes; |
| --- | --- |

—

to contribute to the development of future 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.

Composition

| — | 1 representative of each Member State; |
| --- | --- |

—

1 representative 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 Administrative Board on a proposal from the Commission.

3. Committees

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

4. External audit

European Court of Auditors.

5. Discharge authority

Parliament on a recommendation by the Council.

10,7 million euro (14,6 million euro)

including:

| — | Community subsidy, DG Employment: 98 % (92 %) |
| --- | --- |

—

Community subsidy, DG Employment: 98 % (92 %)

| — | Community subsidy, DG Enlargement: 0 % (7 %) |
| --- | --- |

—

Community subsidy, DG Enlargement: 0 % (7 %)

| — | miscellaneous revenue: 2 % (1 %) |
| --- | --- |

—

miscellaneous revenue: 2 % (1 %)

Staff at 31 December 2004:

38 (33) posts in the establishment plan,

of which, posts filled: 29 (29)

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

Total staff: 51 (54)

assigned to

operational tasks: 34 (34)

administrative tasks: 9 (12)

mixed tasks: 8 (8)

Approximately 850 partners through national focal points, four expert groups, three topic centres, participation of PHARE and EFTA countries.

Dissemination of information

| — | European Week for Safety and Health at work: ‘building safety’; |
| --- | --- |

—

European Week for Safety and Health at work: ‘building safety’;

| — | participation in 67 exhibitions/conferences, |
| --- | --- |

—

participation in 67 exhibitions/conferences,

| — | electronic media: bi-monthly newsletter to 24 000 subscribers, website (2,9 million visitors) |
| --- | --- |

—

electronic media: bi-monthly newsletter to 24 000 subscribers, website (2,9 million visitors)

| — | publications (3,3 million copies of publications distributed): 7 information reports, 14 fact sheets, 1 issue of the ‘Forum’ magazine, 24 press releases. |
| --- | --- |

—

publications (3,3 million copies of publications distributed): 7 information reports, 14 fact sheets, 1 issue of the ‘Forum’ magazine, 24 press releases.

Third programme for SMEs (2003-2004): 40 projects finalised.

Source: Information provided by the Agency.

Table 2

European Agency for Safety and Health at Work — Implementation of the budget for the financial year 2004

| (1000 euro) |
| --- |
| Revenue | Expenditure |
| Source of revenue | Revenue entered in the final budget for the financial year | Revenue collected | Expenditure allocation | Appropriations in the final budget | Appropriations carried over from the previous financial year | Available appropriations
  (2004 budget and financial year 2003) |
| entered | committed | paid | carried over | cancelled | outstanding commitments | paid | cancelled | appropriations | committed | paid | carried over | cancelled |
| Community subsidies | 10 588 | 9 542 | Title I
  Staff | 4 347 | 3 708 | 3 379 | 60 | 908 | 87 | 67 | 20 | 4 434 | 3 795 | 3 446 | 60 | 928 |
| Other subsidies | 180 | 66 | Title II
  Administration | 1 373 | 1 241 | 966 | 248 | 159 | 186 | 158 | 28 | 1 559 | 1 427 | 1 124 | 248 | 187 |
| Other revenue | 0 | 111 | Title III
  Operating activities | 5 048 | 5 019 | 2 407 | 2 549 | 92 | 5 858 | 5 019 | 839 | 10 906 | 10 877 | 7 426 | 2 549 | 931 |
| PHARE revenue | 0 | 121 | PHARE expenditure | — | — | — | — | — | 502 | 358 | 144 | 502 | 502 | 358 | 0 | 144 |
| Total | 10 768 | 9 840 | Total | 10 768 | 9 968 | 6 752 | 2 857 | 1 159 | 6 633 | 5 602 | 1 031 | 17 401 | 16 601 | 12 354 | 2 857 | 2 190 |
| NB: Variations in totals are due to the effects of rounding.

  Source: The Agency's data — This table summarises the data provided by the Agency in its annual accounts. |

(1000 euro)

Revenue

Expenditure

Source of revenue

Revenue entered in the final budget for the financial year

Revenue collected

Expenditure allocation

Appropriations in the final budget

Appropriations carried over from the previous financial year

Available appropriations

(2004 budget and financial year 2003)

entered

committed

paid

carried over

cancelled

outstanding commitments

paid

cancelled

appropriations

committed

paid

carried over

cancelled

Community subsidies

10 588

9 542

Title I

Staff

4 347

3 708

3 379

60

908

87

67

20

4 434

3 795

3 446

60

928

Other subsidies

180

66

Title II

Administration

1 373

1 241

966

248

159

186

158

28

1 559

1 427

1 124

248

187

Other revenue

0

111

Title III

Operating activities

5 048

5 019

2 407

2 549

92

5 858

5 019

839

10 906

10 877

7 426

2 549

931

PHARE revenue

0

121

PHARE expenditure

—

—

—

—

—

502

358

144

502

502

358

0

144

Total

10 768

9 840

Total

10 768

9 968

6 752

2 857

1 159

6 633

5 602

1 031

17 401

16 601

12 354

2 857

2 190

NB: Variations in totals are due to the effects of rounding.

Source: The Agency's data — This table summarises the data provided by the Agency in its annual accounts.

Table 3

European Agency for Safety and Health at Work — Revenue and expenditure account for the financial years 2004 and 2003

| (1000 euro) |
| --- |
| | 2004 | 2003 |
| Revenue |
| Community subsidies | 9 542 | 11 641 |
| Other subsidies | 66 | 66 |
| Other revenue | 111 | 157 |
| PHARE revenue | 121 | 824 |
| Total revenue (a) | 9 840 | 12 688 |
| Expenditure |
| Staff — Title I of the budget |
| Payments | 3 379 | 3 245 |
| Appropriations carried over | 60 | 87 |
| Administration — Title II of the budget |
| Payments | 966 | 1 146 |
| Appropriations carried over | 248 | 186 |
| Operating activities — Title III of the budget |
| Payments (1) | 2 426 | 2 559 |
| Appropriations carried over | 2 549 | 5 859 |
| PHARE expenditure |
| Payments | 0 | 548 |
| Appropriations carried over | 0 | 502 |
| Total expenditure (b) | 9 628 | 14 131 |
| Outturn for the financial year (c = a – b) (2) | 212 | –1 443 |
| Balance carried over from the previous financial year | –1 987 | –1 108 |
| Appropriations carried over and cancelled | 887 | 766 |
| Sums to be reused from the previous financial year and not used | 0 | 1 |
| RO (PHARE II) appropriations not used | 144 | 0 |
| Payments against commitment cancelled in 2002 | 0 | – 191 |
| Exchange-rate differences | 0 | 4 |
| PHARE amount to be refunded to the Commission | –39 | 0 |
| Adjustment entries | 2 | –16 |
| Outturn for the financial year before economic adjustments (d) | – 779 | –1 987 |
| Budget revenue to be recovered | 0 | 850 |
| Other revenue to be recovered | 0 | 3 |
| Acquisitions of fixed assets | 58 | 207 |
| Depreciation | – 175 | – 186 |
| Stock | –6 | 0 |
| Scrapping of fixed assets | –91 | 0 |
| Depreciation | 88 | 0 |
| Miscellaneous expenditure | –34 | –1 |
| Economic adjustments (e) | – 161 | 873 |
| Balance for the financial year (d + e) | – 940 | –1 113 |
| NB: Variations in totals are due to the effects of rounding.

  Source: The Agency's data — This table summarises the data provided by the Agency in its annual accounts. |

(1000 euro)

2004

2003

Revenue

Community subsidies

9 542

11 641

Other subsidies

66

66

Other revenue

111

157

PHARE revenue

121

824

Total revenue (a)

9 840

12 688

Expenditure

Staff — Title I of the budget

Payments

3 379

3 245

Appropriations carried over

60

87

Administration — Title II of the budget

Payments

966

1 146

Appropriations carried over

248

186

Operating activities — Title III of the budget

Payments (1)

2 426

2 559

Appropriations carried over

2 549

5 859

PHARE expenditure

Payments

0

548

Appropriations carried over

0

502

Total expenditure (b)

9 628

14 131

Outturn for the financial year (c = a – b) (2)

212

–1 443

Balance carried over from the previous financial year

–1 987

–1 108

Appropriations carried over and cancelled

887

766

Sums to be reused from the previous financial year and not used

0

1

RO (PHARE II) appropriations not used

144

0

Payments against commitment cancelled in 2002

0

– 191

Exchange-rate differences

0

4

PHARE amount to be refunded to the Commission

–39

0

Adjustment entries

2

–16

Outturn for the financial year before economic adjustments (d)

– 779

–1 987

Budget revenue to be recovered

0

850

Other revenue to be recovered

0

3

Acquisitions of fixed assets

58

207

Depreciation

– 175

– 186

Stock

–6

0

Scrapping of fixed assets

–91

0

Depreciation

88

0

Miscellaneous expenditure

–34

–1

Economic adjustments (e)

– 161

873

Balance for the financial year (d + e)

– 940

–1 113

NB: Variations in totals are due to the effects of rounding.

Source: The Agency's data — This table summarises the data provided by the Agency in its annual accounts.

Table 4

European Agency for Safety and Health at Work — Balance sheet at 31 December 2004 and 31 December 2003

| (1000 euro) |
| --- |
| Assets | 2004 | 2003 | Liabilities | 2004 | 2003 |
| Fixed assets | | | Own capital | | |
| Computer software | 66 | 95 | Own capital (3) | 431 | 431 |
| IT equipment | 90 | 136 | Budget outturn for the financial year | 1 207 | – 879 |
| Fittings and furniture | 169 | 215 | Adjustment outturn | – 161 | 873 |
| Subtotal | 325 | 445 | Balance for the previous financial year | –1 113 | –1 108 |
| Stocks | | | Subtotal | 364 | – 683 |
| Office supplies | 0 | 6 | Current liabilities | | |
| Subtotal | 0 | 6 | Non-automatic carry-overs | 0 | 135 |
| Current assets | | | Automatic carry-overs | 2 857 | 6 498 |
| Community subsidies | 809 | 1 035 | Commission | 145 | 282 |
| Sundry accounts receivable | 19 | 62 | Sundry accounts payable | 67 | 128 |
| Subtotal | 828 | 1 097 | Payroll deductions | 0 | 73 |
| Cash accounts | | | Subtotal | 3 069 | 7 117 |
| Bank and cash | 2 305 | 4 889 | Provisions for risks and charges | | |
| Cash | 3 | 1 | Cases pending | 34 | 0 |
| Subtotal | 2 308 | 4 890 | Subtotal | 34 | 0 |
| Suspense accounts | | | Suspense accounts | | |
| Advances | 6 | 6 | Revenue for re-use | 0 | 11 |
| Subtotal | 6 | 6 | Subtotal | 0 | 11 |
| Total | 3 467 | 6 445 | Total | 3 467 | 6 445 |
| NB: Variations in totals are due to the effects of rounding.

  Source: The Agency's data — This table summarises the data provided by the Agency in its annual accounts. |

(1000 euro)

Assets

2004

2003

Liabilities

2004

2003

Fixed assets

Own capital

Computer software

66

95

Own capital (3)

431

431

IT equipment

90

136

Budget outturn for the financial year

1 207

– 879

Fittings and furniture

169

215

Adjustment outturn

– 161

873

Subtotal

325

445

Balance for the previous financial year

–1 113

–1 108

Stocks

Subtotal

364

– 683

Office supplies

0

6

Current liabilities

Subtotal

0

6

Non-automatic carry-overs

0

135

Current assets

Automatic carry-overs

2 857

6 498

Community subsidies

809

1 035

Commission

145

282

Sundry accounts receivable

19

62

Sundry accounts payable

67

128

Subtotal

828

1 097

Payroll deductions

0

73

Cash accounts

Subtotal

3 069

7 117

Bank and cash

2 305

4 889

Provisions for risks and charges

Cash

3

1

Cases pending

34

0

Subtotal

2 308

4 890

Subtotal

34

0

Suspense accounts

Suspense accounts

Advances

6

6

Revenue for re-use

0

11

Subtotal

6

6

Subtotal

0

11

Total

3 467

6 445

Total

3 467

6 445

NB: Variations in totals are due to the effects of rounding.

Source: The Agency's data — This table summarises the data provided by the Agency in its annual accounts.

---

(1)  This sum includes payments made from the appropriations to be re-used in 2004 (18 573 euro).

(2)  Calculated in accordance with the principles of Article 15 of Council Regulation (EC, Euratom) No 1150/2000 of 22 May 2000 (OJ L 130, 31.5.2000, p. 8).

NB: Variations in totals are due to the effects of rounding.

Source: The Agency's data — This table summarises the data provided by the Agency in its annual accounts.

(3)  The amount of own capital, fixed at 31 December 2003, corresponds to the sum of the gross value of fixed assets at 31 December 2002 minus historical depreciation for the period 1996 to 2002, plus the variation in the value of stock between 31 December 2002 and 31 December 2003 and the adjustments on the valuation, recognition and downgrading of fixed assets.

NB: Variations in totals are due to the effects of rounding.

Source: The Agency's data — This table summarises the data provided by the Agency in its annual accounts.

---

THE AGENCY'S REPLIES

| 7. | Draft detailed rules for the implementation of the new financial regulation were sent to the Commission on 30 May 2005 for comments before submission to the Administrative Board.
  The Agency's internal control procedures were drawn up on the basis of guidelines handed down by the Commission, and will be gradually adapted in accordance with the conclusions of the forthcoming report of the Commission's Internal Audit Service and the risk analysis to be undertaken by the Agency. |
| --- | --- |

7.

Draft detailed rules for the implementation of the new financial regulation were sent to the Commission on 30 May 2005 for comments before submission to the Administrative Board.

The Agency's internal control procedures were drawn up on the basis of guidelines handed down by the Commission, and will be gradually adapted in accordance with the conclusions of the forthcoming report of the Commission's Internal Audit Service and the risk analysis to be undertaken by the Agency.

| 8. | These four service contracts will all be the subject of a call for tenders in 2005. |
| --- | --- |

8.

These four service contracts will all be the subject of a call for tenders in 2005.

| 9. | The cumulative negative budget outturn for the financial year 2004 will be entered in the 2005 budget. |
| --- | --- |

9.

The cumulative negative budget outturn for the financial year 2004 will be entered in the 2005 budget.

---

| 28.12.2005 | EN | Official Journal of the European Union | C 332/30 |
| --- | --- | --- | --- |

28.12.2005

EN

Official Journal of the European Union

C 332/30

---

REPORT

on the annual accounts of the European Maritime Safety Agency for the financial year 2004 together with the Agency's replies

(2005/C 332/05)

CONTENTS

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

1-2

| 3-6 | THE COURT'S OPINION |
| --- | --- |

3-6

| 7-9 | OBSERVATIONS |
| --- | --- |

7-9

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). It began its operational activities in 2003. 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. Table 1 summarises the Agency's competences and activities on the basis of information it has supplied. |
| --- | --- |

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). It began its operational activities in 2003. 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. Table 1 summarises the Agency's competences and activities on the basis of information it has supplied.

| 2. | For information, the annual accounts drawn up by the Agency for the financial year 2004 are summarised in Tables 2, 3 and 4. |
| --- | --- |

2.

For information, the annual accounts drawn up by the Agency for the financial year 2004 are summarised in Tables 2, 3 and 4.

THE COURT'S OPINION

| 3. | The Court's opinion 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.

The Court's opinion 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 2004 (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 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 2004 (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 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 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 Agency's accounts for the financial year ended 31 December 2004 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. | According to Article 31 of the Agency's financial regulation, a distinction has to be made in the Agency's budget between commitment appropriations and payment appropriations. This distinction between types of appropriations is not in evidence in the Agency's budget for the financial year 2004. During the year in question, the Agency nevertheless managed part of its operating appropriations according to the rules applicable to differentiated appropriations. However, the accounts relating to the Agency's implementation of its budget are not suited to presenting differentiated appropriations. The Agency must adapt its budget and the presentation of its accounts to the kind of appropriations it is managing. |
| --- | --- |

7.

According to Article 31 of the Agency's financial regulation, a distinction has to be made in the Agency's budget between commitment appropriations and payment appropriations. This distinction between types of appropriations is not in evidence in the Agency's budget for the financial year 2004. During the year in question, the Agency nevertheless managed part of its operating appropriations according to the rules applicable to differentiated appropriations. However, the accounts relating to the Agency's implementation of its budget are not suited to presenting differentiated appropriations. The Agency must adapt its budget and the presentation of its accounts to the kind of appropriations it is managing.

| 8. | The appropriations carried over from the previous financial year which were not used by the end of the year were not cancelled. Moreover, an analysis of the implementation of the budget shows a low level of execution of payments (4), and a substantial volume of carry-overs of appropriations to the following year (5). Such practices do not comply with the budgetary principles of accuracy and annuality (6). |
| --- | --- |

8.

The appropriations carried over from the previous financial year which were not used by the end of the year were not cancelled. Moreover, an analysis of the implementation of the budget shows a low level of execution of payments (4), and a substantial volume of carry-overs of appropriations to the following year (5). Such practices do not comply with the budgetary principles of accuracy and annuality (6).

| 9. | The share of carry-overs of appropriations that is to be regarded as expenditure for the financial year is evaluated on the basis of declarations made by the authorising officers by delegation. These declarations have to be drawn up in such a way as to enable the accounting officer to correctly appraise the Agency's actual expenditure, which has not often been the case. Furthermore, the files concerning commitments and payments are frequently incomplete and operations carried out on the basis of provisional commitments cannot be properly traced. The internal control system needs to be strengthened in order to remedy its shortcomings. |
| --- | --- |

9.

The share of carry-overs of appropriations that is to be regarded as expenditure for the financial year is evaluated on the basis of declarations made by the authorising officers by delegation. These declarations have to be drawn up in such a way as to enable the accounting officer to correctly appraise the Agency's actual expenditure, which has not often been the case. Furthermore, the files concerning commitments and payments are frequently incomplete and operations carried out on the basis of provisional commitments cannot be properly traced. The internal control system needs to be strengthened in order to remedy its shortcomings.

This report was adopted by the Court of Auditors in Luxembourg at the Court meeting of 5 October 2005.

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 15 June 2005 and received by the Court on 22 July 2005.

3

(4)  Overall, the rate of payment for commitments for the year is 62 %; for operating expenditure (Title III), this rate falls to 17 %.

4

(5)  Overall, the rate of carry-over is 39 %; for operating expenditure (Title III), this rate is 85 %.

5

(6)  Articles 9 and 10 of the Agency's financial regulation.

6

---

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 Regulation (EC) No 1644/2003 of 22 July 2003 and No 724/2004 of 31 March 2004 | Governance | Resources made available to the Agency in 2004

  (2003 data) | Products and services supplied in 2004 |
| --- | --- | --- | --- | --- |
| 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 Regulation (EC) No 1644/2003 of 22 July 2003 and No 724/2004 of 31 March 2004

Governance

Resources made available to the Agency in 2004

(2003 data)

Products and services supplied in 2004

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 examine requests from Member States for assistance.

2. Executive Director

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

3. External audit

European Court of Auditors.

4. Discharge Authority

Parliament on a recommendation from the Council.

Final budget:

13,3 million euro (4,5 million euro) Community contribution: 100 % (100 %)

Total staff at 31 December 2004:

55 (40) posts in the establishment plan

No of posts occupied: 34 (8)

+ 9 (7) other posts

(auxiliary contracts, seconded national experts, local staff, employment-agency staff)

Total staff numbers: 43 (15)

assigned to the following duties:

operational tasks: 27 (7)

administrative tasks: 13 (4)

mixed tasks: 3 (4)

Number of specifications and guideline documents: 18

Inspections: 12

Investigations: 5

Seminars: 10

Source: Data sent by the Agency.

Table 2

European Maritime Safety Agency — Budgetary implementation for the financial year 2004

| (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 | Available appropriations (2004 budget and financial year 2003) |
| entered | committed | paid | carried over | cancelled | Outstanding commitments | paid | cancelled | Appropriations | committed | paid | carried over | cancelled |
| Community subsidies | 13 340 | 12 800 | Title I
  Personnel | 8 170 | 3 736 | 3 594 | 143 | 4 434 | 66 | 13 | 53 | 8 236 | 3 802 | 3 607 | 143 | 4 487 |
| Other revenue | | 5 | Title II
  Administration | 1 630 | 1 319 | 635 | 684 | 311 | 315 | 267 | 48 | 1 945 | 1 634 | 902 | 684 | 359 |
| Title III
  Operating activities | 3 540 | 2 448 | 437 (1) | 2 074 | 1 092 | 155 | 5 (2) | 150 | 3 695 | 2 603 | 442 | 2 074 | 1 242 |
| Total | 13 340 | 12 805 | Total | 13 340 | 7 503 | 4 666 | 2 901 | 5 837 | 536 | 285 | 251 | 13 876 | 8 039 | 4 951 | 2 901 | 6 089 |
| NB: Variations in totals are due to the effects of rounding.

  Source: Agency data — This table summarises the data supplied by the Agency in its annual accounts. |

(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

Available appropriations (2004 budget and financial year 2003)

entered

committed

paid

carried over

cancelled

Outstanding commitments

paid

cancelled

Appropriations

committed

paid

carried over

cancelled

Community subsidies

13 340

12 800

Title I

Personnel

8 170

3 736

3 594

143

4 434

66

13

53

8 236

3 802

3 607

143

4 487

Other revenue

5

Title II

Administration

1 630

1 319

635

684

311

315

267

48

1 945

1 634

902

684

359

Title III

Operating activities

3 540

2 448

437 (1)

2 074

1 092

155

5 (2)

150

3 695

2 603

442

2 074

1 242

Total

13 340

12 805

Total

13 340

7 503

4 666

2 901

5 837

536

285

251

13 876

8 039

4 951

2 901

6 089

NB: Variations in totals are due to the effects of rounding.

Source: Agency data — This table summarises the data supplied by the Agency in its annual accounts.

Table 3

European Maritime Safety Agency — Revenue and expenditure account for the financial years 2004 and 2003

| (1000 euro) |
| --- |
| | 2004 | 2003 (3) |
| Revenue |
| Community subsidies | 12 800 | 2 630 |
| Other revenue | 5 | 2 |
| Total budget revenue (a) | 12 805 | 2 632 |
| Expenditure |
| Staff — Title I of the budget |
| Payments | 3 594 | 647 |
| Appropriations carried over | 143 | 66 |
| Administration — Title II of the budget |
| Payments | 635 | 238 |
| Appropriations carried over | 684 | 315 |
| Operating activities — Title III of the budget |
| Payments | 437 | 13 |
| Appropriations carried over | 2 074 | 155 |
| Total budget expenditure (b) | 7 567 | 1 434 |
| Balance (c = a – b) | 5 238 | 1 198 |
| Appropriations carried over and cancelled | 251 | — |
| Exchange-rate differences | –1 | 0 |
| Balance of the budget implementation for the financial year (d) | 5 488 | 1 198 |
| Variation in automatic carry-overs of appropriations and invoices to be received | 2 089 | 399 |
| Variation in investments for the financial year | 242 | 11 |
| Variation in debts (Commission) | –5 489 | –1 198 |
| Depreciation for the financial year | –43 | –3 |
| Variation in advances to suppliers | 56 | — |
| Outturn of the economic adjustments for the financial year (e) | 2 343 | 407 |
| NB: Variations in totals are due to the effects of rounding.

  Source: Agency data — This table summarises the data supplied by the Agency in its annual accounts. |

(1000 euro)

2004

2003 (3)

Revenue

Community subsidies

12 800

2 630

Other revenue

5

2

Total budget revenue (a)

12 805

2 632

Expenditure

Staff — Title I of the budget

Payments

3 594

647

Appropriations carried over

143

66

Administration — Title II of the budget

Payments

635

238

Appropriations carried over

684

315

Operating activities — Title III of the budget

Payments

437

13

Appropriations carried over

2 074

155

Total budget expenditure (b)

7 567

1 434

Balance (c = a – b)

5 238

1 198

Appropriations carried over and cancelled

251

—

Exchange-rate differences

–1

0

Balance of the budget implementation for the financial year (d)

5 488

1 198

Variation in automatic carry-overs of appropriations and invoices to be received

2 089

399

Variation in investments for the financial year

242

11

Variation in debts (Commission)

–5 489

–1 198

Depreciation for the financial year

–43

–3

Variation in advances to suppliers

56

—

Outturn of the economic adjustments for the financial year (e)

2 343

407

NB: Variations in totals are due to the effects of rounding.

Source: Agency data — This table summarises the data supplied by the Agency in its annual accounts.

Table 4

European Maritime Safety Agency — Balance sheet at 31 December 2004 and 31 December 2003

| (1000 euro) |
| --- |
| Assets | 2004 | 2003 | Liabilities | 2004 | 2003 (4) |
| Fixed assets | | | Own capital | | |
| Computer software | 30 | 11 | Outturn carried over | 2 750 | 407 |
| Equipment and machinery | 27 | 0 | Subtotal | 2 750 | 407 |
| Computer equipment | 193 | 0 | | | |
| Depreciation | –44 | –3 | | | |
| Subtotal | 206 | 8 | | | |
| Current assets | | | Long-term debt | | |
| | | | Budgetary balance to be repaid (2004) | 5 488 | 1 198 |
| Sundry accounts receivable | 38 | 2 | Subtotal | 5 488 | 1 198 |
| Recoverable VAT | 2 | 0 | | | |
| Advances to staff | 19 | 17 | Current liabilities | | |
| Advances to Community bodies | 1 | 1 | Budgetary balance to be repaid (2003) | 1 198 | |
| Advances to suppliers | 56 | 0 | Invoices to be received | 413 | 137 |
| Advances to Social Security (ONSS) | 22 | 0 | Sundry accounts payable | 249 | 29 |
| Subtotal | 138 | 20 | Subtotal | 1 860 | 167 |
| Cash accounts | | | | | |
| Bank accounts | 9 754 | 1 744 | | | |
| Subtotal | 9 754 | 1 744 | | | |
| Total | 10 098 | 1 772 | Total | 10 098 | 1 772 |
| NB: Variations in totals are due to the effects of rounding.

  Source: Agency data — This table summarises the data supplied by the Agency in its annual accounts. |

(1000 euro)

Assets

2004

2003

Liabilities

2004

2003 (4)

Fixed assets

Own capital

Computer software

30

11

Outturn carried over

2 750

407

Equipment and machinery

27

0

Subtotal

2 750

407

Computer equipment

193

0

Depreciation

–44

–3

Subtotal

206

8

Current assets

Long-term debt

Budgetary balance to be repaid (2004)

5 488

1 198

Sundry accounts receivable

38

2

Subtotal

5 488

1 198

Recoverable VAT

2

0

Advances to staff

19

17

Current liabilities

Advances to Community bodies

1

1

Budgetary balance to be repaid (2003)

1 198

Advances to suppliers

56

0

Invoices to be received

413

137

Advances to Social Security (ONSS)

22

0

Sundry accounts payable

249

29

Subtotal

138

20

Subtotal

1 860

167

Cash accounts

Bank accounts

9 754

1 744

Subtotal

9 754

1 744

Total

10 098

1 772

Total

10 098

1 772

NB: Variations in totals are due to the effects of rounding.

Source: Agency data — This table summarises the data supplied by the Agency in its annual accounts.

---

(1)  EMSA's operating appropriations are managed as differentiated appropriations. An amount of 64 419 euro in payment appropriations for the financial year was used to pay outstanding commitments relating to differentiated appropriations from the preceding financial year.

(2)  All the commitment appropriations carried over were paid using the appropriations for the financial year, except for a payment of 4 953 euro.

NB: Variations in totals are due to the effects of rounding.

Source: Agency data — This table summarises the data supplied by the Agency in its annual accounts.

(3)  The data for the financial year 2003 have been restated in order to comply with the principle of accruals-based accounting.

NB: Variations in totals are due to the effects of rounding.

Source: Agency data — This table summarises the data supplied by the Agency in its annual accounts.

(4)  The data for the financial year 2003 have been restated in order to comply with the principle of accruals-based accounting.

NB: Variations in totals are due to the effects of rounding.

Source: Agency data — This table summarises the data supplied by the Agency in its annual accounts.

---

THE AGENCY'S REPLIES

| 7. | The Agency managed part of its operating appropriations according to the rules applicable to differentiated appropriations. It is in contact with the Commission with a view to drawing up appropriate presentation models for its budget data. |
| --- | --- |

7.

The Agency managed part of its operating appropriations according to the rules applicable to differentiated appropriations. It is in contact with the Commission with a view to drawing up appropriate presentation models for its budget data.

| 8. | Following the Court's observation, the Agency cancelled the appropriations carried over which were not used. Due to a lack of operational managerial staff, it was only possible to launch the calls for tenders in the autumn, which explains the low rate of payment observed and, consequently, the high rate of carry-overs. |
| --- | --- |

8.

Following the Court's observation, the Agency cancelled the appropriations carried over which were not used. Due to a lack of operational managerial staff, it was only possible to launch the calls for tenders in the autumn, which explains the low rate of payment observed and, consequently, the high rate of carry-overs.

| 9. | From the financial year 2005 the carry-overs to be taken into account will be examined on the basis of invoices and not on the basis of declarations made by the authorising officers. The Agency is in the process of strengthening its internal control system in order to ensure better traceability of its operations, in particular by standardising book-keeping procedures. |
| --- | --- |

9.

From the financial year 2005 the carry-overs to be taken into account will be examined on the basis of invoices and not on the basis of declarations made by the authorising officers. The Agency is in the process of strengthening its internal control system in order to ensure better traceability of its operations, in particular by standardising book-keeping procedures.

---

| 28.12.2005 | EN | Official Journal of the European Union | C 332/37 |
| --- | --- | --- | --- |

28.12.2005

EN

Official Journal of the European Union

C 332/37

---

REPORT

on the annual accounts of the European Environment Agency for the financial year 2004 together with the Agency's replies

(2005/C 332/06)

CONTENTS

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

1-2

| 3-6 | THE COURT'S OPINION |
| --- | --- |

3-6

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

7-10

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. The 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. Table 1 summarises the Agency's competences and activities on the basis of information it has supplied. |
| --- | --- |

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. The 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. Table 1 summarises the Agency's competences and activities on the basis of information it has supplied.

| 2. | For information, the annual accounts drawn up by the Agency for the financial year 2004 are summarised in Tables 2, 3 and 4. |
| --- | --- |

2.

For information, the annual accounts drawn up by the Agency for the financial year 2004 are summarised in Tables 2, 3 and 4.

THE COURT'S OPINION

| 3. | The Court's opinion 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.

The Court's opinion 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 2004 (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 2004 (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 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 Agency's accounts for the financial year ended 31 December 2004 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. | At the end of 2004, all the available appropriations in the budget, i.e. 427 189 euro, were transferred to two budget headings under Title III of the budget (operating expenditure) and on the date of the transfer were committed for two operations to be carried out in 2005 (4). Such a practice is not in accordance with the principle of annuality (5). Furthermore, with regard to the transfers made from Title I (staff expenditure), they contravene the provisions which prohibit the carrying over of appropriations relating to staff expenditure. |
| --- | --- |

7.

At the end of 2004, all the available appropriations in the budget, i.e. 427 189 euro, were transferred to two budget headings under Title III of the budget (operating expenditure) and on the date of the transfer were committed for two operations to be carried out in 2005 (4). Such a practice is not in accordance with the principle of annuality (5). Furthermore, with regard to the transfers made from Title I (staff expenditure), they contravene the provisions which prohibit the carrying over of appropriations relating to staff expenditure.

| 8. | The Agency does not conduct a full annual check on the assets to be entered in its inventory. The audit of fixed assets brought to light omissions from the inventory, which, in particular, make it impossible to establish where some assets are located. |
| --- | --- |

8.

The Agency does not conduct a full annual check on the assets to be entered in its inventory. The audit of fixed assets brought to light omissions from the inventory, which, in particular, make it impossible to establish where some assets are located.

| 9. | The analysis of amendments to various contracts (total value: 107 000 euro) highlighted several shortcomings: amendments which were not justified for one of the reasons stipulated in the financial regulation (6), the use of a framework contract no longer in force (7), and the value provided for by an amendment was excessive compared with the value stipulated in the initial contract (8). |
| --- | --- |

9.

The analysis of amendments to various contracts (total value: 107 000 euro) highlighted several shortcomings: amendments which were not justified for one of the reasons stipulated in the financial regulation (6), the use of a framework contract no longer in force (7), and the value provided for by an amendment was excessive compared with the value stipulated in the initial contract (8).

| 10. | The agreement on the location of the Agency's headquarters and the protocol on the privileges and immunities of the European Communities provide that it shall be exempt from all national, regional and municipal taxes. In November 2004, the Agency was obliged to pay approximately 906 000 euro in taxes for the period from 2000 to 2004. Applying the accounting principle of prudence (9), the Agency has not recorded this sum in its balance sheet as recoverable; an explanatory note concerning this payment appears in the revenue and expenditure account. In this instance, the Court recommends that the Agency should obtain reimbursement of all unwarranted payments. |
| --- | --- |

10.

The agreement on the location of the Agency's headquarters and the protocol on the privileges and immunities of the European Communities provide that it shall be exempt from all national, regional and municipal taxes. In November 2004, the Agency was obliged to pay approximately 906 000 euro in taxes for the period from 2000 to 2004. Applying the accounting principle of prudence (9), the Agency has not recorded this sum in its balance sheet as recoverable; an explanatory note concerning this payment appears in the revenue and expenditure account. In this instance, the Court recommends that the Agency should obtain reimbursement of all unwarranted payments.

This report was adopted by the Court of Auditors in Luxembourg at its meeting of 5 October 2005.

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 30 June 2005 and received by the Court on 28 September 2005.

3

(4)  Commitments EEA 52051 and EEA 52049.

4

(5)  Article 6 of the Agency's financial regulation.

5

(6)  Contracts Nos 2601/B/2005 (EEA 51948 — 15 195 euro) and 3473/B/2004 ((EEA 51971 — 29 800 euro).

6

(7)  Contract No 2240/B/2004 (EEA 51995 — 23 301 euro).

7

(8)  Contracts Nos 3473/B/2004 (EEA 51921 — 49 372 euro) and 3476/B/2004 (EEA 51976 — 38 906 euro).

8

(9)  Article 78 of the Agency's financial regulation.

9

---

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

  (2003 data) | Products and services supplied in 2004 |
| --- | --- | --- | --- | --- |
| 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

(2003 data)

Products and services supplied in 2004

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.

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.

Tasks

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

33,6 million euro (27,5 million euro)

Community subsidy: 81 % (77 %).

Staff numbers at 31 December 2004

Number of posts in the establishment plan: 115 (111) posts

Posts occupied: 102 (95)

+ 15 (16) other posts (auxiliary contracts, seconded national experts, local and employment-agency staff).

Total staff numbers: 115 (111)

assigned to the following tasks:

| — | operational: 72 (69); |
| --- | --- |

—

operational: 72 (69);

| — | administrative: 42 (41); |
| --- | --- |

—

administrative: 42 (41);

| — | mixed: 1 (1). |
| --- | --- |

—

mixed: 1 (1).

| — | Support work and provision of indicators for the Synthesis report on sustainable development; |
| --- | --- |

—

Support work and provision of indicators for the Synthesis report on sustainable development;

| — | indicators concerning the state of the environment; |
| --- | --- |

—

indicators concerning the state of the environment;

| — | analysis and estimation of greenhouse gas emissions (1990-2020); |
| --- | --- |

—

analysis and estimation of greenhouse gas emissions (1990-2020);

| — | finalisation of the Kiev report (state of the environment in candidate Central and Eastern European countries); |
| --- | --- |

—

finalisation of the Kiev report (state of the environment in candidate Central and Eastern European countries);

| — | three seminars organised under the Presidency of the Council; |
| --- | --- |

—

three seminars organised under the Presidency of the Council;

| — | provision of environmental indicators in specific fields (transport sector in candidate countries, Danube region — Black Sea); |
| --- | --- |

—

provision of environmental indicators in specific fields (transport sector in candidate countries, Danube region — Black Sea);

| — | 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.

Table 2

European Environment Agency — Implementation of the budget for the financial year 2004

| (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 | Available appropriations
  (2004 budget and financial year 2003) |
| entered | committed | paid | carried over | cancelled | entered | committed | paid | cancelled | available | committed | paid | carried over | cancelled |
| Community subsidies | 27 200 | 27 200 | Title I
  Staff | 12 955 | 12 908 | 12 449 | 501 | 5 | 315 | 315 | 190 | 124 | 13 270 | 13 223 | 12 639 | 501 | 129 |
| Other subsidies | 6 412 | 3 455 | Title II
  Administration | 3 845 | 3 845 | 3 451 | 394 | 0 | 395 | 395 | 319 | 76 | 4 240 | 4 240 | 3 770 | 394 | 76 |
| Other revenue | 0 | 128 | Title III
  Operating activities | 16 812 | 14 425 | 9 548 | 7 264 | 1 | 7 008 | 7 008 | 6 701 | 307 | 23 820 | 21 433 | 16 249 | 7 264 | 308 |
| Total | 33 612 | 30 783 | Total | 33 612 | 31 178 | 25 448 | 8 159 | 6 | 7 718 | 7 718 | 7 210 | 507 | 41 330 | 38 896 | 32 658 | 8 159 | 513 |
| NB: Variations in totals are due to the effects of rounding.

  Source: Information supplied by the Agency — This table summarises the data provided by the Agency in its annual accounts. |

(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

Available appropriations

(2004 budget and financial year 2003)

entered

committed

paid

carried over

cancelled

entered

committed

paid

cancelled

available

committed

paid

carried over

cancelled

Community subsidies

27 200

27 200

Title I

Staff

12 955

12 908

12 449

501

5

315

315

190

124

13 270

13 223

12 639

501

129

Other subsidies

6 412

3 455

Title II

Administration

3 845

3 845

3 451

394

0

395

395

319

76

4 240

4 240

3 770

394

76

Other revenue

0

128

Title III

Operating activities

16 812

14 425

9 548

7 264

1

7 008

7 008

6 701

307

23 820

21 433

16 249

7 264

308

Total

33 612

30 783

Total

33 612

31 178

25 448

8 159

6

7 718

7 718

7 210

507

41 330

38 896

32 658

8 159

513

NB: Variations in totals are due to the effects of rounding.

Source: Information supplied by the Agency — This table summarises the data provided by the Agency in its annual accounts.

Table 3

European Environment Agency — Revenue and expenditure account for the financial years 2004 and 2003

| (1000 euro) |
| --- |
| | 2004 | 2003 |
| Revenue |
| EC subsidy | 28 658 | 28 723 |
| Other subsidies | 1 998 | 1 080 |
| Bank interest | 128 | 89 |
| Total revenue (A) | 30 784 | 29 891 |
| Expenditure |
| Total expenditure for Title I |
| Payments | 12 447 | 11 123 |
| Payments — Assigned revenue | 2 | |
| Appropriations carried over | 435 | 315 |
| Appropriations carried over — Assigned revenue | 66 | |
| Total expenditure for Title II |
| Payments (1) | 3 451 | 2 447 |
| Appropriations carried over | 394 | 395 |
| Total expenditure for Title III |
| Payments | 9 534 | 5 997 |
| Payments — Assigned revenue | 14 | |
| Appropriations carried over | 4 845 | 7 008 |
| Appropriations carried over — Assigned revenue | 2 419 | |
| Total expenditure (B) | 33 606 | 27 284 |
| Net result for the year (A – B) | –2 822 | 2 607 |
| Appropriations carried over and cancelled | 507 | 295 |
| Refunds carried over and cancelled | 0 | 36 |
| Balance carried over from the previous year | –4 190 | –7 427 |
| Assigned revenue cancelled | 98 | 322 |
| Exchange-rate differences | 3 | –4 |
| Regularisation regarding previous years | 43 | –18 |
| Balance carried forward | –6 360 | –4 190 |
| NB: Variations in totals are due to the effects of rounding.

  Source: Information supplied by the Agency — This table summarises the data provided by the Agency in its annual accounts. |

(1000 euro)

2004

2003

Revenue

EC subsidy

28 658

28 723

Other subsidies

1 998

1 080

Bank interest

128

89

Total revenue (A)

30 784

29 891

Expenditure

Total expenditure for Title I

Payments

12 447

11 123

Payments — Assigned revenue

2

Appropriations carried over

435

315

Appropriations carried over — Assigned revenue

66

Total expenditure for Title II

Payments (1)

3 451

2 447

Appropriations carried over

394

395

Total expenditure for Title III

Payments

9 534

5 997

Payments — Assigned revenue

14

Appropriations carried over

4 845

7 008

Appropriations carried over — Assigned revenue

2 419

Total expenditure (B)

33 606

27 284

Net result for the year (A – B)

–2 822

2 607

Appropriations carried over and cancelled

507

295

Refunds carried over and cancelled

0

36

Balance carried over from the previous year

–4 190

–7 427

Assigned revenue cancelled

98

322

Exchange-rate differences

3

–4

Regularisation regarding previous years

43

–18

Balance carried forward

–6 360

–4 190

NB: Variations in totals are due to the effects of rounding.

Source: Information supplied by the Agency — This table summarises the data provided by the Agency in its annual accounts.

Table 4

European Environment Agency — Balance sheet at 31 December 2004 and 31 December 2003

| (1000 euro) |
| --- |
| Assets | 2004 | 2003 | Liabilities | 2004 | 2003 |
| Fixed assets | | | Fixed capital | | |
| Buildings (deposit) | 432 | 425 | Own capital | 1 838 | 1 265 |
| Furniture | 483 | 541 | Revenue and Expenditure balance | –6 360 | –4 190 |
| IT equipment | 891 | 266 | | | |
| Subtotal | 1 806 | 1 232 | Subtotal | –4 522 | –2 925 |
| Stock (office supplies) | 32 | 33 | Current liabilities | | |
| | | | General cash carried forward | 0 | 1 856 |
| | | | New Member countries | 0 | 1 066 |
| Current assets | | | Earmarked projects | 0 | 1 269 |
| Sums to be recovered | | | | | |
| Commission | 0 | 1 856 | Automatic carry-overs | 5 674 | 7 717 |
| PHARE contribution | 0 | 1 066 | Automatic carry-overs (assigned revenue) | 2 708 | 1 135 |
| Other subsidies to be received | 0 | 1 269 | Carry-over of sums to be reused (appropriations for the year) | 93 | 212 |
| VAT recoverable | 889 | 232 | Carry-over of sums to be reused (appropriations for the previous year) | 197 | 0 |
| Sundry debtors | 109 | 127 | Social security and payroll | 142 | 417 |
| Recovery orders | 42 | 65 | Recovery orders | 38 | 65 |
| Prepayments | 271 | 0 | | | |
| Subtotal | 1 310 | 4 614 | Subtotal | 8 852 | 13 737 |
| Bank accounts and cash | | | | | |
| Bank accounts | 1 142 | 4 892 | | | |
| Imprest accounts | 39 | 40 | | | |
| Total | 4 329 | 10 811 | Total | 4 329 | 10 811 |
| NB: Variations in totals are due to the effects of rounding.

  Source: Information supplied by the Agency — This table summarises the data provided by the Agency in its annual accounts. |

(1000 euro)

Assets

2004

2003

Liabilities

2004

2003

Fixed assets

Fixed capital

Buildings (deposit)

432

425

Own capital

1 838

1 265

Furniture

483

541

Revenue and Expenditure balance

–6 360

–4 190

IT equipment

891

266

Subtotal

1 806

1 232

Subtotal

–4 522

–2 925

Stock (office supplies)

32

33

Current liabilities

General cash carried forward

0

1 856

New Member countries

0

1 066

Current assets

Earmarked projects

0

1 269

Sums to be recovered

Commission

0

1 856

Automatic carry-overs

5 674

7 717

PHARE contribution

0

1 066

Automatic carry-overs (assigned revenue)

2 708

1 135

Other subsidies to be received

0

1 269

Carry-over of sums to be reused (appropriations for the year)

93

212

VAT recoverable

889

232

Carry-over of sums to be reused (appropriations for the previous year)

197

0

Sundry debtors

109

127

Social security and payroll

142

417

Recovery orders

42

65

Recovery orders

38

65

Prepayments

271

0

Subtotal

1 310

4 614

Subtotal

8 852

13 737

Bank accounts and cash

Bank accounts

1 142

4 892

Imprest accounts

39

40

Total

4 329

10 811

Total

4 329

10 811

NB: Variations in totals are due to the effects of rounding.

Source: Information supplied by the Agency — This table summarises the data provided by the Agency in its annual accounts.

---

(1)  Includes 905 823 euro of property taxes paid to the Danish government. The Agency is of the opinion that the amount should be refunded. The issue is currently being negotiated with the Danish government.

NB: Variations in totals are due to the effects of rounding.

Source: Information supplied by the Agency — This table summarises the data provided by the Agency in its annual accounts.

---

THE AGENCY'S REPLIES

| 7. | Indeed two commitments were made towards the end of the year and after a final 2004 budget transfer. The resources were allocated to projects that had been defined initially in the 2004 management plan, but start of the projects was delayed due to uncertainties on budget requirements for ongoing recruitments. We are continuing to improve our budget management and execution and hence to better conform with the principle of annuality. |
| --- | --- |

7.

Indeed two commitments were made towards the end of the year and after a final 2004 budget transfer. The resources were allocated to projects that had been defined initially in the 2004 management plan, but start of the projects was delayed due to uncertainties on budget requirements for ongoing recruitments. We are continuing to improve our budget management and execution and hence to better conform with the principle of annuality.

| 8. | The observation is correct and the result of lacking resources in a period of considerable rebuilding and refurbishing of the EEA facilities. Annual control will get due attention from 2005 onwards. |
| --- | --- |

8.

The observation is correct and the result of lacking resources in a period of considerable rebuilding and refurbishing of the EEA facilities. Annual control will get due attention from 2005 onwards.

| 9. | We recognise these insufficiencies and will avoid such in future. We will in particular ensure that, for future contracts, any amendments are strictly limited to less than 50 % of the initial contract amount (rather than indicative tender amount) and that framework contracts are less than four years old before using them. |
| --- | --- |

9.

We recognise these insufficiencies and will avoid such in future. We will in particular ensure that, for future contracts, any amendments are strictly limited to less than 50 % of the initial contract amount (rather than indicative tender amount) and that framework contracts are less than four years old before using them.

| 10. | The Agency is strenuously pursuing reimbursement of taxes inappropriately charged by the City of Copenhagen for 2000 to 2004. We are in dialogue with the city and the Danish Protocol Office and have informed DG Environment and the Secretary-General. The Commission Legal Services are considering legal proceedings against Denmark. |
| --- | --- |

10.

The Agency is strenuously pursuing reimbursement of taxes inappropriately charged by the City of Copenhagen for 2000 to 2004. We are in dialogue with the city and the Danish Protocol Office and have informed DG Environment and the Secretary-General. The Commission Legal Services are considering legal proceedings against Denmark.

---

| 28.12.2005 | EN | Official Journal of the European Union | C 332/45 |
| --- | --- | --- | --- |

28.12.2005

EN

Official Journal of the European Union

C 332/45

---

REPORT

on the annual accounts of the European Food Safety Authority for the financial year 2004 together with the Authority's replies

(2005/C 332/07)

CONTENTS

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

1-2

| 3-6 | THE COURT'S OPINION |
| --- | --- |

3-6

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

7-12

Tables 1 to 4

The Authority's replies

INTRODUCTION

| 1. | The European Food Safety Authority (hereinafter called 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. The Authority's competences and activities are summarised in Table 1 on the basis of information supplied by it. |
| --- | --- |

1.

The European Food Safety Authority (hereinafter called 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. The Authority's competences and activities are summarised in Table 1 on the basis of information supplied by it.

| 2. | For information, the annual accounts drawn up by the Authority for the financial year 2004 are summarised in Tables 2, 3 and 4. |
| --- | --- |

2.

For information, the annual accounts drawn up by the Authority for the financial year 2004 are summarised in Tables 2, 3 and 4.

THE COURT'S OPINION

| 3. | The Court's opinion 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.

The Court's opinion 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 2004 (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 its opinion 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 2004 (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 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 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 Authority's accounts for the financial year ended 31 December 2004 are, in all material respects, reliable.Legality and regularity of the underlying transactionsExcept for the situation described in paragraphs 9 to 11, the transactions underlying the Authority's annual accounts, taken as a whole, are legal and regular.

OBSERVATIONS

| 7. | Valuation of the part of the carry-overs of appropriations that is to be treated as expenditure when calculating the economic outturn for the financial year is based on the declarations of the authorising officers by delegation. These declarations must be drawn up in such a way as to enable the accounting officer to assess the Authority's actual expenses, which has not often been the case. |
| --- | --- |

7.

Valuation of the part of the carry-overs of appropriations that is to be treated as expenditure when calculating the economic outturn for the financial year is based on the declarations of the authorising officers by delegation. These declarations must be drawn up in such a way as to enable the accounting officer to assess the Authority's actual expenses, which has not often been the case.

| 8. | There are significant weaknesses in the management of fixed assets, in particular as regards the identification of the items to be entered in the inventory (4). Moreover, the methods used to compile the physical inventory are unsatisfactory. |
| --- | --- |

8.

There are significant weaknesses in the management of fixed assets, in particular as regards the identification of the items to be entered in the inventory (4). Moreover, the methods used to compile the physical inventory are unsatisfactory.

| 9. | As regards the recruitment of staff, decisions relating to the rejection of applicants are not substantiated and the final reports on the selection procedures are often incomplete or even, in the case of auxiliary staff, non-existent. The computer application used during the first stages of the selection procedure for candidates does not guarantee the integrity of the data recorded. The grading of the staff recruited is often not substantiated or certified by supporting documents. |
| --- | --- |

9.

As regards the recruitment of staff, decisions relating to the rejection of applicants are not substantiated and the final reports on the selection procedures are often incomplete or even, in the case of auxiliary staff, non-existent. The computer application used during the first stages of the selection procedure for candidates does not guarantee the integrity of the data recorded. The grading of the staff recruited is often not substantiated or certified by supporting documents.

| 10. | Auxiliary staff were recruited without a selection procedure. Furthermore, persons who had delivered attestations in favour of certain candidates also acted as members of the selection board for these candidates. Attestations had been delivered in favour of two people stating that they were going to be recruited as temporary staff, although the Appointing Authority had reached no decision in this connection. In one case, a successful candidate who was not appointed was recruited directly to a different post. |
| --- | --- |

10.

Auxiliary staff were recruited without a selection procedure. Furthermore, persons who had delivered attestations in favour of certain candidates also acted as members of the selection board for these candidates. Attestations had been delivered in favour of two people stating that they were going to be recruited as temporary staff, although the Appointing Authority had reached no decision in this connection. In one case, a successful candidate who was not appointed was recruited directly to a different post.

| 11. | One contract was concluded on the basis of two bids, even though the financial regulation stipulates that there should be at least three tenderers for contracts to the value in question (5). In another case, the Chairman of an Evaluation Committee was a former employee of the company which won the contract. The members of this Committee included a direct subordinate of its Chairman. In one last case, a contract was concluded by direct negotiation without any of the conditions laid down by the provisions being observed (6). |
| --- | --- |

11.

One contract was concluded on the basis of two bids, even though the financial regulation stipulates that there should be at least three tenderers for contracts to the value in question (5). In another case, the Chairman of an Evaluation Committee was a former employee of the company which won the contract. The members of this Committee included a direct subordinate of its Chairman. In one last case, a contract was concluded by direct negotiation without any of the conditions laid down by the provisions being observed (6).

| 12. | The Authority must make every effort to improve the transparency of its decisions on staff recruitment and the award of contracts in order to guarantee observance of the rules in force and to avoid all suspicion of bias. |
| --- | --- |

12.

The Authority must make every effort to improve the transparency of its decisions on staff recruitment and the award of contracts in order to guarantee observance of the rules in force and to avoid all suspicion of bias.

This Report was adopted by the Court of Auditors in Luxembourg at its meetings of 5 October and 7 December 2005.

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 1 August 2005 and received by the Court on 17 August 2005.

3

(4)  Article 103 of Commission Regulation (EC, Euratom) No 2342/2002 of 23 December 2002 laying down detailed rules for the implementation of the Financial Regulation applicable to the general budget (OJ L 357, 31.12.2002, p. 1).

4

(5)  Amount: 8 400 euro. Article 129(2) of Commission Regulation (EC, Euratom) No 2342/2002 of 23 December 2002 laying down detailed rules for the implementation of the Financial Regulation applicable to the general budget (OJ L 357, 31.12.2002).

5

(6)  Article 126 of Commission Regulation (EC, Euratom) No 2342/2002 of 23 December 2002 laying down detailed rules for the implementation of the Financial Regulation applicable to the general budget (OJ L 357, 31.12.2002).

6

---

Table 1

European Food Safety Authority (Parma)

| Areas of 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 2004

  (2003 data) | Products and services supplied in 2004 |
| --- | --- | --- | --- | --- |
| 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 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 2004

(2003 data)

Products and services supplied in 2004

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

European Court of Auditors.

6. Discharge authority

Parliament, on the Council's recommendation.

Final budget:

29,1 million euro (12,6 million euro)

Community contribution: 100 % (100 %)

Staff numbers as at 31 December 2004:

Number of posts in establishment plan: 138 (49)

Posts occupied: 102 (27)

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

Total staff: 139 (63)

Assigned to the following duties:

| — | operational: 83 (33) |
| --- | --- |

—

operational: 83 (33)

| — | administrative: 56 (30) |
| --- | --- |

—

administrative: 56 (30)

158 opinions were adopted and published in 2004. They covered many areas including aromatic plants, genetically modified organisms (with the WHO), bovine spongiform encephalopathy (BSE) or transmissible spongiform encephalopathy (TSE).

Two scientific symposia on specific topics, the development of scientific expertise within the Authority, the identification of emerging risks and the placing on the network and gathering of scientific data were organised.

The Advisory Forum met four 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.

Source: Information supplied by the Authority.

Table 2

European Food Safety Authority — Implementation of the budget for the financial year 2004

| (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 | Available appropriations (2003 budget and carry-over from financial year 2002) |
| entered | committed | paid | carried over (1) | cancelled | entered | paid | cancelled | entered | committed | paid | carried over | cancelled |
| Community subsidies | 29 092 | 18 000 | Title I
  Staff | 11 509 | 8 641 | 8 251 | 390 | 2 868 | 149 | 140 | 9 | 11 658 | 8 790 | 8 391 | 390 | 2 876 |
| Other subsidies | 0 | 0 | Title II
  Administration | 5 633 | 5 094 | 3 617 | 1 477 | 539 | 1 189 | 1 058 | 130 | 6 822 | 6 283 | 4 676 | 1 477 | 669 |
| Other revenue | 0 | 0 | Title III
  Operating activities | 11 950 | 7 517 | 4 051 | 3 818 | 4 081 | 2 894 | 2 019 | 875 | 14 844 | 10 411 | 6 071 | 3 818 | 4 956 |
| Total | 29 092 | 18 000 | Total | 29 092 | 21 252 | 15 919 | 5 684 | 7 488 | 4 233 | 3 219 | 1 014 | 33 325 | 25 485 | 19 139 | 5 684 | 8 502 |
| NB: Variations in totals are due to the effects of rounding.

  Source: The Authority's data — This table summarises the data provided by the Authority in its own annual accounts. |

(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

Available appropriations (2003 budget and carry-over from financial year 2002)

entered

committed

paid

carried over (1)

cancelled

entered

paid

cancelled

entered

committed

paid

carried over

cancelled

Community subsidies

29 092

18 000

Title I

Staff

11 509

8 641

8 251

390

2 868

149

140

9

11 658

8 790

8 391

390

2 876

Other subsidies

0

0

Title II

Administration

5 633

5 094

3 617

1 477

539

1 189

1 058

130

6 822

6 283

4 676

1 477

669

Other revenue

0

0

Title III

Operating activities

11 950

7 517

4 051

3 818

4 081

2 894

2 019

875

14 844

10 411

6 071

3 818

4 956

Total

29 092

18 000

Total

29 092

21 252

15 919

5 684

7 488

4 233

3 219

1 014

33 325

25 485

19 139

5 684

8 502

NB: Variations in totals are due to the effects of rounding.

Source: The Authority's data — This table summarises the data provided by the Authority in its own annual accounts.

Table 3

European Food Safety Authority — Revenue and expenditure account for the financial years 2004 and 2003

| (1000 euro) |
| --- |
| | 2004 | 2003 (2) |
| Operating revenue | 20 591 | 10 171 |
| Total operating revenue | 20 591 | 10 171 |
| Administrative expenditure |
| Staff expenditure | –7 564 | –3 213 |
| Buildings and related expenditure | –4 192 | – 781 |
| Other expenditure | –1 263 | – 536 |
| Depreciation and reduction in value of consolidated entities | – 333 | – 204 |
| Operating expenditure | –6 431 | –2 159 |
| Total operating expenditure | –19 783 | –6 894 |
| Operating profit/loss | 808 | 3 277 |
| Revenue from financial operations | 0 | 1 |
| Expenditure from financial operations | –7 | –3 |
| Profit/(loss) on financial operations | –6 | –2 |
| Current profit/loss | 802 | 3 275 |
| Extraordinary revenue | | 402 |
| Extraordinary expenditure | –27 | |
| Extraordinary profit/loss | –27 | 402 |
| Economic outturn for the financial year | 775 | 3 677 |
| NB: Variations in totals are due to the effects of rounding.

  Source: The Authority's data — This table summarises the data provided by the Authority in its own annual accounts. |

(1000 euro)

2004

2003 (2)

Operating revenue

20 591

10 171

Total operating revenue

20 591

10 171

Administrative expenditure

Staff expenditure

–7 564

–3 213

Buildings and related expenditure

–4 192

– 781

Other expenditure

–1 263

– 536

Depreciation and reduction in value of consolidated entities

– 333

– 204

Operating expenditure

–6 431

–2 159

Total operating expenditure

–19 783

–6 894

Operating profit/loss

808

3 277

Revenue from financial operations

0

1

Expenditure from financial operations

–7

–3

Profit/(loss) on financial operations

–6

–2

Current profit/loss

802

3 275

Extraordinary revenue

402

Extraordinary expenditure

–27

Extraordinary profit/loss

–27

402

Economic outturn for the financial year

775

3 677

NB: Variations in totals are due to the effects of rounding.

Source: The Authority's data — This table summarises the data provided by the Authority in its own annual accounts.

Table 4

European Food Safety Authority — Balance sheet at 31 December 2004 and at 31 December 2003

| (1000 euro) |
| --- |
| Assets | 2004 | 2003 | Liabilities | 2004 | 2003 (3) |
| A. Fixed assets | | | A. Own capital | | |
| Intangible assets | | | Balance carried over | 3 677 | |
| Computer programmes | 423 | 362 | Economic outturn for the financial year | 775 | 3 677 |
| Tangible assets | | | Total | 4 452 | 3 677 |
| Computer equipment | 1 035 | 701 | C. Liabilities | | |
| Furniture and mobile equipment | 151 | 106 | Liabilities of a maximum of one year | | |
| Depreciation | – 537 | – 204 | Salary liabilities | 13 | 8 |
| | | | Fiscal and social liabilities | 77 | |
| Total | 1 071 | 965 | Consolidated Entities (CE) (4) | 2 069 | 146 |
| B. Current assets | | | Expenditure to be allocated and revenue to be carried over | 2 686 | 1 535 |
| Stocks | | | | | |
| Receivables of a maximum of one year | | | | | |
| Advance financing | 323 | | | | |
| Staff | 50 | | | | |
| Current receivables | 1 | 1 | | | |
| Other receivables | 36 | 40 | | | |
| Consolidated Entities (CE) (4) | 4 568 | | | | |
| Expenditure to be carried over and revenue accrued | 47 | 2 | | | |
| Available assets | | | | | |
| Bank accounts | 3 202 | 4 342 | | | |
| Imprest accounts | | 15 | | | |
| Total | 8 226 | 4 400 | Total | 4 845 | 1 688 |
| Total assets | 9 297 | 5 365 | Total liabilities | 9 297 | 5 365 |
| NB: Variations in totals are due to the effects of rounding.

  Source: The Authority's data — This table summarises the data provided by the Authority in its own annual accounts. |

(1000 euro)

Assets

2004

2003

Liabilities

2004

2003 (3)

A. Fixed assets

A. Own capital

Intangible assets

Balance carried over

3 677

Computer programmes

423

362

Economic outturn for the financial year

775

3 677

Tangible assets

Total

4 452

3 677

Computer equipment

1 035

701

C. Liabilities

Furniture and mobile equipment

151

106

Liabilities of a maximum of one year

Depreciation

– 537

– 204

Salary liabilities

13

8

Fiscal and social liabilities

77

Total

1 071

965

Consolidated Entities (CE) (4)

2 069

146

B. Current assets

Expenditure to be allocated and revenue to be carried over

2 686

1 535

Stocks

Receivables of a maximum of one year

Advance financing

323

Staff

50

Current receivables

1

1

Other receivables

36

40

Consolidated Entities (CE) (4)

4 568

Expenditure to be carried over and revenue accrued

47

2

Available assets

Bank accounts

3 202

4 342

Imprest accounts

15

Total

8 226

4 400

Total

4 845

1 688

Total assets

9 297

5 365

Total liabilities

9 297

5 365

NB: Variations in totals are due to the effects of rounding.

Source: The Authority's data — This table summarises the data provided by the Authority in its own annual accounts.

---

(1)  Including non-automatic carry-overs of appropriations (see Management Board Decision of 18 January 2005).

NB: Variations in totals are due to the effects of rounding.

Source: The Authority's data — This table summarises the data provided by the Authority in its own annual accounts.

(2)  The data for the financial year 2003 have been restated to make them comply with the principle of accruals-based accounting.

NB: Variations in totals are due to the effects of rounding.

Source: The Authority's data — This table summarises the data provided by the Authority in its own annual accounts.

(3)  The data for the financial year 2003 have been restated to make them comply with the principle of accruals-based accounting.

(4)  Community institutions and bodies.

NB: Variations in totals are due to the effects of rounding.

Source: The Authority's data — This table summarises the data provided by the Authority in its own annual accounts.

---

THE AUTHORITY'S REPLIES

| 7. | The Authority will ensure that the system implemented, intended to inform the accountanting officer of expenditure for the financial year, is more accurate and reliable. |
| --- | --- |

7.

The Authority will ensure that the system implemented, intended to inform the accountanting officer of expenditure for the financial year, is more accurate and reliable.

| 8. | The Authority will carry out a full check of its inventory in November 2005, once the move to Parma is complete. The method used involves entering goods in the inventory as soon as they are received or, at the latest, at the time of payment of the goods. |
| --- | --- |

8.

The Authority will carry out a full check of its inventory in November 2005, once the move to Parma is complete. The method used involves entering goods in the inventory as soon as they are received or, at the latest, at the time of payment of the goods.

| 9. | Selection procedures have been strengthened in order to improve their transparency, as well as that of the recruitment decisions. The shortcomings observed by the Court were due to the speed with which the Authority had to be set up. The computer application referred to by the Court is now only used as a database. |
| --- | --- |

9.

Selection procedures have been strengthened in order to improve their transparency, as well as that of the recruitment decisions. The shortcomings observed by the Court were due to the speed with which the Authority had to be set up. The computer application referred to by the Court is now only used as a database.

| 10. | Since September 2004 a simplified selection procedure has been organised for the recruitment of auxiliary staff. Members of the selection board are obliged to state if a candidate is known to them at the time of the interviews for selection. The Authority is examining measures to minimise the risk of bias in selection boards. An attestation of recruitment as temporary staff was issued for two successful candidates for posts to be filled once the budget allowed it, namely six months later. |
| --- | --- |

10.

Since September 2004 a simplified selection procedure has been organised for the recruitment of auxiliary staff. Members of the selection board are obliged to state if a candidate is known to them at the time of the interviews for selection. The Authority is examining measures to minimise the risk of bias in selection boards. An attestation of recruitment as temporary staff was issued for two successful candidates for posts to be filled once the budget allowed it, namely six months later.

| 11. | In order to adhere more closely to the rules governing the award of contracts, the Authority has taken various measures and has set up an internal network aimed at improving understanding of the rules in force and at training the relevant staff. As regards the cases described by the Court, the composition of Evaluation Committees is determined by EFSA in accordance with the general principles in use and depending on the number of people able to carry out a technical evaluation, which is limited in a small institution such as ours. The conclusion of a contract by direct negotiation was due to a complication in planning. Since then, the service has been the subject of a procurement procedure. |
| --- | --- |

11.

In order to adhere more closely to the rules governing the award of contracts, the Authority has taken various measures and has set up an internal network aimed at improving understanding of the rules in force and at training the relevant staff. As regards the cases described by the Court, the composition of Evaluation Committees is determined by EFSA in accordance with the general principles in use and depending on the number of people able to carry out a technical evaluation, which is limited in a small institution such as ours. The conclusion of a contract by direct negotiation was due to a complication in planning. Since then, the service has been the subject of a procurement procedure.

| 12. | The Authority has always sought to comply with the rules in force and will contine its efforts in terms of equal treatment and transparency in both its recruitment and public procurement policy. |
| --- | --- |

12.

The Authority has always sought to comply with the rules in force and will contine its efforts in terms of equal treatment and transparency in both its recruitment and public procurement policy.

---

| 28.12.2005 | EN | Official Journal of the European Union | C 332/53 |
| --- | --- | --- | --- |

28.12.2005

EN

Official Journal of the European Union

C 332/53

---

REPORT

on the annual accounts of the Translation Centre for the bodies of the European Union for the financial year 2004 together with the Centre's replies

(2005/C 332/08)

CONTENTS

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

1-2

| 3-6 | THE COURT'S OPINION |
| --- | --- |

3-6

| 7-9 | OBSERVATIONS |
| --- | --- |

7-9

Tables 1 to 4

The Centre's replies

INTRODUCTION

| 1. | The Translation Centre for the bodies of the European Union (hereinafter called 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. Table 1 summarises the Centre's competences and activities on the basis of information it has supplied. |
| --- | --- |

1.

The Translation Centre for the bodies of the European Union (hereinafter called 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. Table 1 summarises the Centre's competences and activities on the basis of information it has supplied.

| 2. | For information, the annual accounts drawn up by the Centre for the financial year 2004 are summarised in Tables 2, 3 and 4. |
| --- | --- |

2.

For information, the annual accounts drawn up by the Centre for the financial year 2004 are summarised in Tables 2, 3 and 4.

THE COURT'S OPINION

| 3. | The Court's opinion 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.

The Court's opinion 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 2004 (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 2004 (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 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 Centre's accounts for the financial year ended 31 December 2004 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 opinion into question.

OBSERVATIONS

| 7. | The dispute over rent between the Centre and the Luxembourg authorities was resolved in 2004. Consequently there was no longer any need for the balance-sheet provision that had been created to cover the risks arising from this dispute (4). In order to remove this provision, the Centre, by means of an amending budget, increased its expenditure by the amount of the provision and at the same time offset this by entering a negative amount in a provision heading. This operation calls for the following two remarks:






  (a) | the entry in the budget of amounts which did not correspond to the requirements of the financial year does not comply with the principle of budgetary accuracy; |
| --- | --- | --- |

7.

The dispute over rent between the Centre and the Luxembourg authorities was resolved in 2004. Consequently there was no longer any need for the balance-sheet provision that had been created to cover the risks arising from this dispute (4). In order to remove this provision, the Centre, by means of an amending budget, increased its expenditure by the amount of the provision and at the same time offset this by entering a negative amount in a provision heading. This operation calls for the following two remarks:

(a)

the entry in the budget of amounts which did not correspond to the requirements of the financial year does not comply with the principle of budgetary accuracy;

| (b) | the Centre's recording of the provision in its revenue and expenditure account would have sufficed from the point of view of the legality and transparency of the transaction. |
| --- | --- |

(b)

the Centre's recording of the provision in its revenue and expenditure account would have sufficed from the point of view of the legality and transparency of the transaction.

| 8. | The Centre cancelled appropriations for the financial year 2004 amounting to 8,8 million euro. Even if 4,1 million euro of these cancellations concerned provisions, the volume of the remaining cancellations is still too high (16 % of expenditure appropriations). |
| --- | --- |

8.

The Centre cancelled appropriations for the financial year 2004 amounting to 8,8 million euro. Even if 4,1 million euro of these cancellations concerned provisions, the volume of the remaining cancellations is still too high (16 % of expenditure appropriations).

| 9. | The conflict, which is already an old one, over the payment by the Centre to the Commission of employer's contributions in respect of its employees’ pension rights has not yet been resolved. In order to deal with the financial uncertainty resulting from this conflict, the Centre created provisions which, at the end of 2004, amounted to 7,5 million euro, or more than a quarter of its balance sheet total. As the Court pointed out in its previous report (4), the Centre must step up its efforts to settle this dispute and thus liquidate this provision. |
| --- | --- |

9.

The conflict, which is already an old one, over the payment by the Centre to the Commission of employer's contributions in respect of its employees’ pension rights has not yet been resolved. In order to deal with the financial uncertainty resulting from this conflict, the Centre created provisions which, at the end of 2004, amounted to 7,5 million euro, or more than a quarter of its balance sheet total. As the Court pointed out in its previous report (4), the Centre must step up its efforts to settle this dispute and thus liquidate this provision.

This report was adopted by the Court of Auditors in Luxembourg at its meeting of 5 October 2005.

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 29 August 2005 and received by the Court on 26 September 2005.

3

(4)  See paragraph 8 of the report for the financial year 2003 (OJ C 324, 30.12.2004, p. 47).

4

---

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 2004

  (2003 data) | Products and services provided during the financial year 2004

  (2003 data) |
| --- | --- | --- | --- | --- |
| 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 2004

(2003 data)

Products and services provided during the financial year 2004

(2003 data)

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

European Court of Auditors.

4. Internal audit

Commission's internal auditor.

5. Discharge authority

Parliament on a recommendation from the Council.

Final budget

29,8 million euro (29,0 million euro).

Staff as at 31 December 2004

181 posts (158) listed in the establishment plan,

posts occupied: 150 (132)

+ 15 (15) other posts

Total staff: 165 (147)

Assigned to:

| — | operational duties: 109 (95) |
| --- | --- |

—

operational duties: 109 (95)

| — | administrative duties: 52 (48) |
| --- | --- |

—

administrative duties: 52 (48)

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

—

mixed duties: 4 (4)

Number of pages translated

374 106(238 399)

Number of pages per language

| — | official languages: 369 377(221 127) |
| --- | --- |

—

official languages: 369 377(221 127)

| — | other languages: 4 729(17 272) |
| --- | --- |

—

other languages: 4 729(17 272)

Number of pages per customer

| — | bodies: 362 162(215 992) |
| --- | --- |

—

bodies: 362 162(215 992)

| — | institutions: 11 944(22 407) |
| --- | --- |

—

institutions: 11 944(22 407)

Number of pages translated freelance: 146 350(94 355)

Source: Information supplied by the Centre.

Table 2

Translation Centre for the bodies of the European Union — Implementation of the budget for the financial year 2004

| (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 available (2004 budget and 2003 financial year) |
| entered | committed | paid | carried over | cancelled | outstanding commitments | paid | cancelled | appropriations | committed | paid | carried over | cancelled |
| Revenue paid by the bodies and institutions | 25 169 | 19 489 | Title I
  Staff | 14 921 | 11 937 | 11 815 | 122 | 2 984 | 104 | 64 | 40 | 15 025 | 12 041 | 11 879 | 122 | 3 024 |
| Financial income | 250 | 387 | Title II
  Administration | 6 414 | 2 990 | 2 349 | 641 | 3 424 | 619 | 541 | 78 | 7 033 | 3 609 | 2 890 | 641 | 3 502 |
| Miscellaneous income | p.m. | 23 | Title III
  Operating activities | 7 949 | 6 074 | 5 084 | 990 | 1 875 | 493 | 487 | 6 | 8 442 | 6 567 | 5 571 | 990 | 1 881 |
| Balance for the previous financial year | 4 405 | — | Title X
  Reserve and provisions | 540 | — | — | — | 540 | — | — | — | 540 | — | — | — | 540 |
| Total | 29 824 | 19 899 | Total | 29 824 | 21 001 | 19 248 | 1 753 | 8 823 | 1 216 | 1 092 | 124 | 31 040 | 22 217 | 20 340 | 1 753 | 8 947 |
| Source: Data compiled by the Centre. This table summarises the data supplied by the Centre in its own annual accounts. |

(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 available (2004 budget and 2003 financial year)

entered

committed

paid

carried over

cancelled

outstanding commitments

paid

cancelled

appropriations

committed

paid

carried over

cancelled

Revenue paid by the bodies and institutions

25 169

19 489

Title I

Staff

14 921

11 937

11 815

122

2 984

104

64

40

15 025

12 041

11 879

122

3 024

Financial income

250

387

Title II

Administration

6 414

2 990

2 349

641

3 424

619

541

78

7 033

3 609

2 890

641

3 502

Miscellaneous income

p.m.

23

Title III

Operating activities

7 949

6 074

5 084

990

1 875

493

487

6

8 442

6 567

5 571

990

1 881

Balance for the previous financial year

4 405

—

Title X

Reserve and provisions

540

—

—

—

540

—

—

—

540

—

—

—

540

Total

29 824

19 899

Total

29 824

21 001

19 248

1 753

8 823

1 216

1 092

124

31 040

22 217

20 340

1 753

8 947

Source: Data compiled by the Centre. This table summarises the data supplied by the Centre in its own annual accounts.

Table 3

Translation Centre for the bodies of the European Union — Revenue and expenditure account for the financial years 2004 and 2003

| (1000 euro) |
| --- |
| | 2004 | 2003 |
| Operating revenue |
| Invoicing for the financial year | 23 423 | 22 075 |
| Miscellaneous revenue | 150 | 223 |
| Total (a) | 23 573 | 22 298 |
| Operating expenditure |
| Staff | 11 929 | 10 347 |
| Buildings, equipment and sundry operating expenditure | 2 734 | 2 095 |
| Operational expenditure | 5 919 | 3 618 |
| Allocation to provisions | 1 410 | 2 195 |
| Total (b) | 21 992 | 18 255 |
| Operating result (c = a – b) | 1 581 | 4 043 |
| Financial income |
| Bank interest | 387 | 387 |
| Exchange-rate gain | 1 | 1 |
| Total (d) | 388 | 388 |
| Financial expenses |
| Bank charges | 7 | 10 |
| Total (e) | 7 | 10 |
| Financial result (f = d – e) | 381 | 378 |
| Result for ordinary activities (g = c + f) | 1 962 | 4 421 |
| Exceptional income (h) | 2 230 | 19 |
| Exceptional expenses (i) | 0 | 9 |
| Exceptional result (j = h – i) | 2 230 | 10 |
| Result for the financial year (g + j) | 4 192 | 4 431 |
| Source: Data compiled by the Centre. This table summarises the data supplied by the Centre in its own annual accounts. |

(1000 euro)

2004

2003

Operating revenue

Invoicing for the financial year

23 423

22 075

Miscellaneous revenue

150

223

Total (a)

23 573

22 298

Operating expenditure

Staff

11 929

10 347

Buildings, equipment and sundry operating expenditure

2 734

2 095

Operational expenditure

5 919

3 618

Allocation to provisions

1 410

2 195

Total (b)

21 992

18 255

Operating result (c = a – b)

1 581

4 043

Financial income

Bank interest

387

387

Exchange-rate gain

1

1

Total (d)

388

388

Financial expenses

Bank charges

7

10

Total (e)

7

10

Financial result (f = d – e)

381

378

Result for ordinary activities (g = c + f)

1 962

4 421

Exceptional income (h)

2 230

19

Exceptional expenses (i)

0

9

Exceptional result (j = h – i)

2 230

10

Result for the financial year (g + j)

4 192

4 431

Source: Data compiled by the Centre. This table summarises the data supplied by the Centre in its own annual accounts.

Table 4

Translation Centre for the bodies of the European Union — Balance sheet at 31 December 2004 and 31 December 2003

| (1000 euro) |
| --- |
| Assets | 2004 | 2003 | Liabilities | 2004 | 2003 |
| Intangible assets | 466 | 760 | Own capital | | |
| Tangible assets | | | Reserves | 9 761 | 8 330 |
| Furniture and vehicles | 155 | 219 | Outturns carried over from previous financial years | 4 642 | 1 642 |
| IT equipment | 274 | 398 | Economic outturn | 4 192 | 4 431 |
| Fixed assets under construction and advances paid | 0 | 35 | Subtotal | 18 595 | 14 403 |
| Subtotal | 429 | 652 | Provisions for risks and liabilities (1) | 7 481 | 8 601 |
| Current assets | | | Current liabilities | | |
| VAT paid and recoverable from the Member States | 3 | 3 | Supplier debts | 832 | 784 |
| Amounts owed by Community institutions and bodies | 6 363 | 2 676 | Sundry accounts payable | 1 | 162 |
| Sundry accounts receivable | 2 | 10 | Sundry liabilities | 1 | 5 |
| Subtotal | 6 368 | 2 689 | Advances to customers | 256 | 500 |
| Disposable assets | 19 903 | 20 354 | Subtotal | 1 090 | 1 451 |
| Total | 27 166 | 24 455 | Total | 27 166 | 24 455 |
| Source: Data compiled by the Centre. This table summarises the data supplied by the Centre in its own annual accounts. |

(1000 euro)

Assets

2004

2003

Liabilities

2004

2003

Intangible assets

466

760

Own capital

Tangible assets

Reserves

9 761

8 330

Furniture and vehicles

155

219

Outturns carried over from previous financial years

4 642

1 642

IT equipment

274

398

Economic outturn

4 192

4 431

Fixed assets under construction and advances paid

0

35

Subtotal

18 595

14 403

Subtotal

429

652

Provisions for risks and liabilities (1)

7 481

8 601

Current assets

Current liabilities

VAT paid and recoverable from the Member States

3

3

Supplier debts

832

784

Amounts owed by Community institutions and bodies

6 363

2 676

Sundry accounts payable

1

162

Sundry accounts receivable

2

10

Sundry liabilities

1

5

Subtotal

6 368

2 689

Advances to customers

256

500

Disposable assets

19 903

20 354

Subtotal

1 090

1 451

Total

27 166

24 455

Total

27 166

24 455

Source: Data compiled by the Centre. This table summarises the data supplied by the Centre in its own annual accounts.

---

(1)  For 2004 these provisions cover any payment of the employer's share of pension contributions for the Centre's employees.

Source: Data compiled by the Centre. This table summarises the data supplied by the Centre in its own annual accounts.

---

THE CENTRE'S REPLIES

| 7. | Given the importance of this matter, the Centre introduced this operation in an amending budget for the sake of transparency and in order to inform the Management Board thereof as soon as possible, without waiting for the accounts to be closed. It should be noted that the outturn for the financial year was unaffected by the application of this approach. |
| --- | --- |

7.

Given the importance of this matter, the Centre introduced this operation in an amending budget for the sake of transparency and in order to inform the Management Board thereof as soon as possible, without waiting for the accounts to be closed. It should be noted that the outturn for the financial year was unaffected by the application of this approach.

| 8. | The Centre takes note of the Court's observation and will seek to improve its budgetary estimates. |
| --- | --- |

8.

The Centre takes note of the Court's observation and will seek to improve its budgetary estimates.

| 9. | As stated in the Centre's reply in relation to the Court's observations on the accounts for 2003, the Centre made follow-up contact with the Commission on 23 November 2004. The Directorate-General for Personnel and Administration stated its position in a note of 17 May 2005, and the full file will be submitted for decision to the Centre's Management Board at its meeting of 20 October 2005. |
| --- | --- |

9.

As stated in the Centre's reply in relation to the Court's observations on the accounts for 2003, the Centre made follow-up contact with the Commission on 23 November 2004. The Directorate-General for Personnel and Administration stated its position in a note of 17 May 2005, and the full file will be submitted for decision to the Centre's Management Board at its meeting of 20 October 2005.

---

| 28.12.2005 | EN | Official Journal of the European Union | C 332/60 |
| --- | --- | --- | --- |

28.12.2005

EN

Official Journal of the European Union

C 332/60

---

REPORT

on the annual accounts of the European Centre for the Development of Vocational Training for the financial year 2004 together with the Centre's replies

(2005/C 332/09)

CONTENTS

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

1-2

| 3-6 | THE COURT'S OPINION |
| --- | --- |

3-6

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

7-11

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. The Centre's competences and activities are summarised, on the basis of information submitted by the Centre, in Table 1. |
| --- | --- |

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. The Centre's competences and activities are summarised, on the basis of information submitted by the Centre, in Table 1.

| 2. | For information, the annual accounts drawn up by the Centre for the financial year 2004 are summarised in Tables 2, 3 and 4. |
| --- | --- |

2.

For information, the annual accounts drawn up by the Centre for the financial year 2004 are summarised in Tables 2, 3 and 4.

THE COURT'S OPINION

| 3. | The Court's opinion 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.

The Court's opinion 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 2004 (3) were drawn up by its Executive Director, pursuant to Article 12a of Regulation (EEC) No 337/75, 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 2004 (3) were drawn up by its Executive Director, pursuant to Article 12a of Regulation (EEC) No 337/75, 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 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 Centre's accounts for the financial year ended 31 December 2004 are, in all material respects, reliable.Legality and regularity of the underlying transactionsExcept for the situations described in paragraph 10, the transactions underlying the Centre's annual accounts, taken as a whole, are legal and regular.

OBSERVATIONS

| 7. | The Centre's financial regulation provides that a distinction must be made in the budget between commitment appropriations and payment appropriations, but this was not done in the budget published for the financial year 2004. Nonetheless, during the financial year in question the Centre managed its operating appropriations in accordance with the rules governing differentiated appropriations. This approach enabled it to reduce the volume of carry-overs of appropriations to the following financial year and thus to give a more accurate picture of its assets. For forthcoming financial years the Centre still needs to adapt its budget to the type of appropriations it is managing. |
| --- | --- |

7.

The Centre's financial regulation provides that a distinction must be made in the budget between commitment appropriations and payment appropriations, but this was not done in the budget published for the financial year 2004. Nonetheless, during the financial year in question the Centre managed its operating appropriations in accordance with the rules governing differentiated appropriations. This approach enabled it to reduce the volume of carry-overs of appropriations to the following financial year and thus to give a more accurate picture of its assets. For forthcoming financial years the Centre still needs to adapt its budget to the type of appropriations it is managing.

| 8. | The Centre provides its staff with a canteen on its premises. Separate accounts are kept for the canteen's purchases and sales (4). These accounts are not subjected to the controls provided for in the financial regulation, and are also not included in the Centre's annual accounts. The Centre should rectify this situation. |
| --- | --- |

8.

The Centre provides its staff with a canteen on its premises. Separate accounts are kept for the canteen's purchases and sales (4). These accounts are not subjected to the controls provided for in the financial regulation, and are also not included in the Centre's annual accounts. The Centre should rectify this situation.

| 9. | The revenue and expenditure account for the financial year 2003 showed a loss of 993 310 euro. Pursuant to the provisions of the Centre's financial regulation, this result should have been entered in an amending budget for the financial year 2004 (5). |
| --- | --- |

9.

The revenue and expenditure account for the financial year 2003 showed a loss of 993 310 euro. Pursuant to the provisions of the Centre's financial regulation, this result should have been entered in an amending budget for the financial year 2004 (5).

| 10. | In the case of one multiple framework contract, the Centre selected as its first choice a service provider whose financial bid (amount: 150 000 euro) did not meet the conditions laid down in the specifications (6). Compared with the bid of the service provider chosen in second place (amount: 94 500 euro), this choice cost the Centre 55 500 euro more, or over 50 %. More generally, a considerable number of contracts concluded by the Centre with consultants within the framework of its activity programmes were awarded on the basis of negotiated procedures. The competition rules were not always strictly applied in many of the procedures examined by the Court. |
| --- | --- |

10.

In the case of one multiple framework contract, the Centre selected as its first choice a service provider whose financial bid (amount: 150 000 euro) did not meet the conditions laid down in the specifications (6). Compared with the bid of the service provider chosen in second place (amount: 94 500 euro), this choice cost the Centre 55 500 euro more, or over 50 %. More generally, a considerable number of contracts concluded by the Centre with consultants within the framework of its activity programmes were awarded on the basis of negotiated procedures. The competition rules were not always strictly applied in many of the procedures examined by the Court.

| 11. | The recruitment files examined revealed inconsistencies in the procedures applied and the documents requested in each case. Such inconsistencies could be avoided by adopting a guide on recruitment procedures designed to ensure that they are transparent. The Court's examination of the files of individual members of staff also showed that the staff's financial entitlements are not monitored on a systematic basis. Monitoring would ensure that payments (family allowances, etc.) were no longer made to staff in cases where the grounds for entitlement no longer existed. |
| --- | --- |

11.

The recruitment files examined revealed inconsistencies in the procedures applied and the documents requested in each case. Such inconsistencies could be avoided by adopting a guide on recruitment procedures designed to ensure that they are transparent. The Court's examination of the files of individual members of staff also showed that the staff's financial entitlements are not monitored on a systematic basis. Monitoring would ensure that payments (family allowances, etc.) were no longer made to staff in cases where the grounds for entitlement no longer existed.

This report was adopted by the Court of Auditors in Luxembourg at its meetings of 5 October and 7 December 2005.

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 12 September 2005 and received by the Court on 13 September 2005.

3

(4)  The canteen's revenue and expenditure for the financial year 2004 amounted to 137 000 euro and 133 500 euro respectively.

4

(5)  Article 35 of the Centre's financial regulation.

5

(6)  Contract 2004-FWC14/RP/D/CMC/VCPOD/013/04).

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

  (2003 data) | Products and services supplied in 2004

  (2003 data) |
| --- | --- | --- | --- | --- |
| 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

(2003 data)

Products and services supplied in 2004

(2003 data)

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 training establishments and firms; |
| --- | --- |

—

stimulate cooperation on training between educational or 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; |
| --- | --- | --- |

1.

Management Board

Per Member State:

—

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. |
| --- | --- |

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. |
| --- | --- |

3.

Internal control

Commission's Internal Audit Service.

| 4. | External audit

  European Court of Auditors. |
| --- | --- |

4.

External audit

European Court of Auditors.

| 5. | Discharge

  Parliament, on the Council's recommendation. |
| --- | --- |

5.

Discharge

Parliament, on the Council's recommendation.

Budget:

16,6 million euro (14,7 million euro).

Community contribution: 97 % (99 %)

Staff numbers at 31 December 2004:

Number of posts in establishment plan: 88 (83)

Posts occupied: 81 (79)

+ 56 (46) other staff (auxiliary contracts, seconded national experts, local employees and employment agency staff)

Total staff: 137 (125),

assigned to the following duties:

operational: 74 (66)

administrative: 40 (38)

mixed: 23 (21)

Conferences and seminars: 90 (72)

Studies: 55 (65)

Projects: 38 (23)

Participation in:

Copenhagen Process, e-learning Programme, Leonardo da Vinci Programme, social partners' joint action framework.

Publications:

62 (28) publications

3 issues of Cedefop info,

3 issues of the European vocational training review.

Circulation of documents:

10 293(10 244) on request, 2 034(2 346) electronic newsletter subscriptions, 8 460(8 523) subscriptions to Cedefop info.

Maintenance and development of the 'European Training Village' site, on which over 53 000 people are registered, with virtual communities of 8 000 participants.

Participants in the study visits programme: 730 (773)

Source: Information supplied by the Centre.

Table 2

European Centre for the Development of Vocational Training — Implementation of the budget for the financial year 2004

| (1000 euro) |
| --- |
| Revenue | Expenditure |
| Source of revenue | Revenue entered in the final budget for the financial year | Revenue received | Allocation of expenditure | Appropriations for the financial year | Appropriations carried over from the previous financial year |
| entered | committed | paid | carried over | cancelled | available | committed | paid | carried over | cancelled |
| Commission subsidy | 15 800 (1) | 13 700 | Title I | | | | | | | | | | |
| Miscellaneous revenue | 72 | 42 | Staff (NDA) | 9 243 | 9 045 | 8 579 | 466 | 197 | 443 | 0 | 393 | 0 | 50 |
| Phare assigned revenue | 315 | 277 | Title II | | | | | | | | | | |
| Third-country assigned revenue | 359 | 359 | Administration (NDA) | 1 395 | 1 310 | 768 | 542 | 85 | 358 | 0 | 352 | 0 | 6 |
| Other assigned revenue | 0 | 88 | Title III | | | | | | | | | | |
| | | | Operating activities (DA) | | | | | | | | | | |
| | | | — CA | 5 234 | 5 234 | — | — | — | — | — | — | — | — |
| | | | — PA | 3 062 | — | 2 508 | — | 554 | 3 138 | — | 2 702 | — | 436 |
| | | | Assigned revenue | 724 | 724 | 415 | 309 | 0 | 382 | 382 | 319 | 63 | — |
| | 16 546 | 14 466 | Total CA | 16 596 | 16 313 | — | — | 282 | 1 183 | 382 | — | — | 56 |
| Total PA | 14 424 | — | 12 270 | 1 317 | 836 | 4 321 | — | 3 766 | 63 | 492 |
| 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.

  Source: Information supplied by the Centre — This table summarises the data provided by the Centre in its annual accounts. |

(1000 euro)

Revenue

Expenditure

Source of revenue

Revenue entered in the final budget for the financial year

Revenue received

Allocation of expenditure

Appropriations for the financial year

Appropriations carried over from the previous financial year

entered

committed

paid

carried over

cancelled

available

committed

paid

carried over

cancelled

Commission subsidy

15 800 (1)

13 700

Title I

Miscellaneous revenue

72

42

Staff (NDA)

9 243

9 045

8 579

466

197

443

0

393

0

50

Phare assigned revenue

315

277

Title II

Third-country assigned revenue

359

359

Administration (NDA)

1 395

1 310

768

542

85

358

0

352

0

6

Other assigned revenue

0

88

Title III

Operating activities (DA)

— CA

5 234

5 234

—

—

—

—

—

—

—

—

— PA

3 062

—

2 508

—

554

3 138

—

2 702

—

436

Assigned revenue

724

724

415

309

0

382

382

319

63

—

16 546

14 466

Total CA

16 596

16 313

—

—

282

1 183

382

—

—

56

Total PA

14 424

—

12 270

1 317

836

4 321

—

3 766

63

492

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.

Source: Information supplied by the Centre — This table summarises the data provided by the Centre in its annual accounts.

Table 3

European Centre for the Development of Vocational Training — Revenue and expenditure account for the financial years 2004 and 2003

| (1000 euro) |
| --- |
| | 2004 | 2003 |
| Revenue |
| Commission subsidies | 13 700 | 14 500 |
| Assigned revenue | 724 | 792 |
| Miscellaneous revenue | 42 | 3 |
| Total revenue (a) | 14 466 | 15 295 |
| Budgetary expenditure for the financial year |
| Staff — Title I of the budget |
| Payments | 8 579 | 7 554 |
| Appropriations carried over | 466 | 443 |
| Administration — Title II of the budget |
| Payments | 768 | 778 |
| Appropriations carried over | 542 | 358 |
| Operating activities — Title III of the budget (except for assigned revenue) |
| Payments against payment appropriations for the financial year | 2 508 | 2 381 |
| Payments against outstanding commitments at 31.12.2003 | 2 702 | |
| Appropriations carried over | | 3 138 |
| Assigned revenue (PHARE and third countries) |
| Payments | 415 | 546 |
| Appropriations carried over | 309 | 246 |
| Total expenditure (b) | 16 289 | 15 444 |
| Outturn for the financial year (a – b) | –1 823 | – 149 |
| Balance carried over from the previous financial year | – 993 | – 545 |
| N-1 appropriations carried over and cancelled (Title I and II non-differentiated appropriations) | 56 | 399 |
| Neutralisation of N-1 carry-over for Title III connected with changeover to differentiated appropriations | 3 138 | — |
| Sums for re-use from the previous financial year not used | 1 | 10 |
| Refunds to the Commission | 0 | – 716 |
| Exchange-rate differences | –4 | 8 |
| Balance for the financial year | 375 | – 993 |
| Source: Information supplied by the Centre — This table summarises the data provided by the Centre in its annual accounts. |

(1000 euro)

2004

2003

Revenue

Commission subsidies

13 700

14 500

Assigned revenue

724

792

Miscellaneous revenue

42

3

Total revenue (a)

14 466

15 295

Budgetary expenditure for the financial year

Staff — Title I of the budget

Payments

8 579

7 554

Appropriations carried over

466

443

Administration — Title II of the budget

Payments

768

778

Appropriations carried over

542

358

Operating activities — Title III of the budget (except for assigned revenue)

Payments against payment appropriations for the financial year

2 508

2 381

Payments against outstanding commitments at 31.12.2003

2 702

Appropriations carried over

3 138

Assigned revenue (PHARE and third countries)

Payments

415

546

Appropriations carried over

309

246

Total expenditure (b)

16 289

15 444

Outturn for the financial year (a – b)

–1 823

– 149

Balance carried over from the previous financial year

– 993

– 545

N-1 appropriations carried over and cancelled (Title I and II non-differentiated appropriations)

56

399

Neutralisation of N-1 carry-over for Title III connected with changeover to differentiated appropriations

3 138

—

Sums for re-use from the previous financial year not used

1

10

Refunds to the Commission

0

– 716

Exchange-rate differences

–4

8

Balance for the financial year

375

– 993

Source: Information supplied by the Centre — This table summarises the data provided by the Centre in its annual accounts.

Table 4

European Centre for the Development of Vocational Training — Balance sheet at 31 December 2004 and 31 December 2003

| (1000 euro) |
| --- |
| Assets | 2004 | 2003 | Liabilities | 2004 | 2003 |
| Fixed assets | | | Fixed capital | | |
| Intangible fixed assets | 183 | 14 | Own capital | 5 702 | 5 704 |
| Buildings | 5 059 | 5 179 | Balance for the financial year | 375 | – 993 |
| Equipment and furniture | 455 | 471 | Subtotal | 6 077 | 4 711 |
| Financial fixed assets, guarantee | 5 | 5 | Current liabilities | | |
| Subtotal | 5 702 | 5 669 | Assigned revenue not received | — | 315 |
| Stocks | | | Appropriations carried over against Titles I, II and III | 1 008 | 3 939 |
| Office supplies | — | 35 | Appropriations carried over against assigned revenue | 372 | 382 |
| Subtotal | — | 35 | Sundry accounts payable | 89 | 86 |
| Long-term assets | | | VAT/other taxes | 91 | 90 |
| Staff loans | — | 3 | Bank interest to be returned to the EU | 148 | 64 |
| Subtotal | — | 3 | Subtotal | 1 708 | 4 876 |
| Current assets | | | Suspense accounts | | |
| Commission | — | 315 | Sums to be reused | — | 157 |
| Other advances | 26 | 37 | Subtotal | — | 157 |
| Recoverable VAT | 34 | 34 | | | |
| Sundry accounts receivable | 74 | 81 | | | |
| Subtotal | 134 | 467 | | | |
| Cash accounts | | | | | |
| Banks | 1 905 | 3 532 | | | |
| Cash | 3 | 5 | | | |
| Imprest account | 41 | 33 | | | |
| Subtotal | 1 949 | 3 570 | | | |
| Total | 7 785 | 9 744 | Total | 7 785 | 9 744 |
| Source: Information supplied by the Centre — This table summarises the data provided by the Centre in its annual accounts. |

(1000 euro)

Assets

2004

2003

Liabilities

2004

2003

Fixed assets

Fixed capital

Intangible fixed assets

183

14

Own capital

5 702

5 704

Buildings

5 059

5 179

Balance for the financial year

375

– 993

Equipment and furniture

455

471

Subtotal

6 077

4 711

Financial fixed assets, guarantee

5

5

Current liabilities

Subtotal

5 702

5 669

Assigned revenue not received

—

315

Stocks

Appropriations carried over against Titles I, II and III

1 008

3 939

Office supplies

—

35

Appropriations carried over against assigned revenue

372

382

Subtotal

—

35

Sundry accounts payable

89

86

Long-term assets

VAT/other taxes

91

90

Staff loans

—

3

Bank interest to be returned to the EU

148

64

Subtotal

—

3

Subtotal

1 708

4 876

Current assets

Suspense accounts

Commission

—

315

Sums to be reused

—

157

Other advances

26

37

Subtotal

—

157

Recoverable VAT

34

34

Sundry accounts receivable

74

81

Subtotal

134

467

Cash accounts

Banks

1 905

3 532

Cash

3

5

Imprest account

41

33

Subtotal

1 949

3 570

Total

7 785

9 744

Total

7 785

9 744

Source: Information supplied by the Centre — This table summarises the data provided by the Centre in its annual accounts.

---

(1)  This is the amount published in the Official Journal and represents the total amount of commitment appropriations allocated to Cedefop in the Commission's budget. In the annual accounts published by the Centre, it preferred to report the amount of the corresponding payment appropriations (13 700 000 euro).

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.

Source: Information supplied by the Centre — This table summarises the data provided by the Centre in its annual accounts.

---

THE CENTRE'S REPLIES

| 7. | Cedefop will take the measures necessary to ensure that its budget is presented correctly in future. |
| --- | --- |

7.

Cedefop will take the measures necessary to ensure that its budget is presented correctly in future.

| 8. | The accounts of the canteen are kept separately for all current expenditure and revenue. They are recorded in a cash-book and are subject to controls, notably by the Greek tax authorities as regards VAT. However, the Centre takes good note of the Court's remark and will explore what possibilities exist to rectify the situation, for example through the use of the imprest accounts. |
| --- | --- |

8.

The accounts of the canteen are kept separately for all current expenditure and revenue. They are recorded in a cash-book and are subject to controls, notably by the Greek tax authorities as regards VAT. However, the Centre takes good note of the Court's remark and will explore what possibilities exist to rectify the situation, for example through the use of the imprest accounts.

| 9. | Cedefop will take the necessary measures to avoid a recurrence of such situations in future. |
| --- | --- |

9.

Cedefop will take the necessary measures to avoid a recurrence of such situations in future.

| 10. | During its work, the Evaluation Committee based itself principally on the cost per day and not on the total cost of the required work, which led to the situation described by the Court. Cedefop will draft instructions for members of evaluation committees to ensure that they take good account of all the elements mentioned in calls for tenders, which will allow their work to be more transparent. In the case of the negotiated procedures, the Centre takes note of the comments made by the Court. The Centre has already put in place an action plan which aims to remedy the shortcomings identified. The new director took up her duties on 16 October 2005. Since then no more negotiated procedures with less than three candidates have been started and great care has been taken to ensure regularity in the tendering procedures. |
| --- | --- |

10.

During its work, the Evaluation Committee based itself principally on the cost per day and not on the total cost of the required work, which led to the situation described by the Court. Cedefop will draft instructions for members of evaluation committees to ensure that they take good account of all the elements mentioned in calls for tenders, which will allow their work to be more transparent. In the case of the negotiated procedures, the Centre takes note of the comments made by the Court. The Centre has already put in place an action plan which aims to remedy the shortcomings identified. The new director took up her duties on 16 October 2005. Since then no more negotiated procedures with less than three candidates have been started and great care has been taken to ensure regularity in the tendering procedures.

| 11. | The preparation of a guide on recruitment procedures is one of the objectives for 2005. A periodical review of the entitlements to allowances of Cedefop's staff was introduced in 2005. |
| --- | --- |

11.

The preparation of a guide on recruitment procedures is one of the objectives for 2005. A periodical review of the entitlements to allowances of Cedefop's staff was introduced in 2005.

---

| 28.12.2005 | EN | Official Journal of the European Union | C 332/68 |
| --- | --- | --- | --- |

28.12.2005

EN

Official Journal of the European Union

C 332/68

---

REPORT

on the annual accounts of Eurojust for the financial year 2004 together with Eurojust's replies

(2005/C 332/10)

CONTENTS

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

1-2

| 3-6 | THE COURT'S OPINION |
| --- | --- |

3-6

| 7-9 | OBSERVATIONS |
| --- | --- |

7-9

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. Table 1 summarises Eurojust's competences and activities on the basis of information provided by Eurojust. |
| --- | --- |

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. Table 1 summarises Eurojust's competences and activities on the basis of information provided by Eurojust.

| 2. | For information, the annual accounts drawn up by Eurojust for the financial year 2004 are summarised in Tables 2, 3 and 4. |
| --- | --- |

2.

For information, the annual accounts drawn up by Eurojust for the financial year 2004 are summarised in Tables 2, 3 and 4.

THE COURT'S OPINION

| 3. | The Court's opinion is addressed to the European Parliament and the Council pursuant to Article 36 of Council Decision 2002/187/JHA. |
| --- | --- |

3.

The Court's opinion is addressed to the European Parliament and the Council pursuant to Article 36 of Council Decision 2002/187/JHA.

| 4. | The Agency's accounts for the financial year ended 31 December 2004 (2) were drawn up by its Administrative Director, pursuant to Article 36 of Council Decision 2002/187/JHA, 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 2004 (2) were drawn up by its Administrative Director, pursuant to Article 36 of Council Decision 2002/187/JHA, 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 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 accountsEurojust's accounts for the financial year ended 31 December 2004 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 opinion into question.

OBSERVATIONS

| 7. | In 2004, Eurojust still did not have its own financial regulation (3) and, in these circumstances, continued to apply the framework financial regulation for Community bodies (4). |
| --- | --- |

7.

In 2004, Eurojust still did not have its own financial regulation (3) and, in these circumstances, continued to apply the framework financial regulation for Community bodies (4).

| 8. | The last amending budget adopted by the College of Eurojust forecast revenue and expenditure of 8,3 million euro. In practice, Eurojust implemented a budget of 9,3 million euro (5), which was neither formally adopted by the College nor published in the Official Journal, and hence contravened the provisions in force (6). |
| --- | --- |

8.

The last amending budget adopted by the College of Eurojust forecast revenue and expenditure of 8,3 million euro. In practice, Eurojust implemented a budget of 9,3 million euro (5), which was neither formally adopted by the College nor published in the Official Journal, and hence contravened the provisions in force (6).

| 9. | A member of staff who was appointed as the accounting officer on the departure of the titular accounting officer retained his role as the authorising officer by delegation. Since May 2004 he has been carrying out, at the same time and for the same expenditure, the duties of the authorising officer and the accounting officer (7). In this instance, the Court must point out the fundamental nature of the principle of the segregation of the duties of authorising officer and accounting officer and asks Eurojust to take the utmost care to ensure that this principle is adhered to. |
| --- | --- |

9.

A member of staff who was appointed as the accounting officer on the departure of the titular accounting officer retained his role as the authorising officer by delegation. Since May 2004 he has been carrying out, at the same time and for the same expenditure, the duties of the authorising officer and the accounting officer (7). In this instance, the Court must point out the fundamental nature of the principle of the segregation of the duties of authorising officer and accounting officer and asks Eurojust to take the utmost care to ensure that this principle is adhered to.

This report was adopted by the Court of Auditors in Luxembourg at its meeting of 5 October 2005.

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 15 July 2005 and received by the Court on 5 August 2005.

2

(3)  In April 2005, the Commission had still not issued an opinion on the draft submitted by Eurojust.

3

(4)  Commission Regulation (EC, Euratom) No 2343/2002 of 23 December 2002 (OJ L 357, 31.12.2002, p. 72).

4

(5)  This sum corresponds to Eurojust's initial budget and the subsidy to Eurojust entered in the Commission's budget.

5

(6)  Articles 4 and 26 of Regulation (EC, Euratom) No 2343/2002.

6

(7)  This situation continued beyond the end of the financial year 2004.

7

---

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

  (2003 data) | Activities and services provided (2003 data) |
| --- | --- | --- | --- | --- |
| 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

(2003 data)

Activities and services provided (2003 data)

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. |
| --- | --- |

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 a prosecutor, judge or police officer of equivalent competence. |
| --- | --- |

2.

The College is composed of national members seconded by each Member State in accordance with its legal system, being a prosecutor, judge or police officer of equivalent competence.

| 3. | The College elects its President from among the national members. |
| --- | --- |

3.

The College elects its President from among the national members.

| 4. | The Joint Supervisory Body checks the processing of personal data. |
| --- | --- |

4.

The Joint Supervisory Body checks the processing of personal data.

| 5. | The Administrative Director is unanimously appointed by the College. |
| --- | --- |

5.

The Administrative Director is unanimously appointed by the College.

| 6. | External audit: the Court of Auditors. |
| --- | --- |

6.

External audit: the Court of Auditors.

| 7. | Discharge is given by the Parliament on the Council's recommendation. |
| --- | --- |

7.

Discharge is given by the Parliament on the Council's recommendation.

Final budget:

9,3 million euro (8 million euro)

Community subsidy: 100 % (100 %)

Staff as at 31 December 2004:

76 (53) posts listed in the establishment plan,

posts occupied: 52 (28)

+ 13 (15) other staff (auxiliary contracts, seconded national experts, local staff, 12 agency staff)

Total staff: 65 (43)

carrying out

operational tasks: 27 (18)

administrative tasks: 26 (20)

mixed tasks: 12 (5)

Number of meetings:

52 (26)

Bilateral cases:

272 (222)

Multilateral cases:

109 (78)

Total number of cases:

381 (300)

Fraud:

20 % (22 %)

Drug-trafficking:

20 % (22 %)

Terrorism:

7 % (6 %)

Murder:

7 % (4 %)

Smuggling:

not available % (3 %)

Trafficking in human beings:

4 % (4 %)

Money-laundering:

7 % (8 %)

Other:

35 % (31 %)

Source: Information supplied by Eurojust.

Table 2

Eurojust — Implementation of the budget for the financial year 2004

| (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 | Available appropriations (2004 budget and the financial year 2003) |
| entered | committed | paid | carried over | cancelled | outstanding commitments | paid | cancelled | appropriations | committed | paid | carried over | cancelled |
| Community subsidies | 9 300 | 9 300 | Title I
  Staff | 4 198 | 4 132 | 4 044 | 88 | 66 | 177 | 177 | 0 | 4 375 | 4 309 | 4 221 | 88 | 66 |
| Miscellaneous revenue | 0 | 2 | Title II
  Administration | 3 563 | 3 547 | 3 112 | 435 | 16 | 1 009 | 593 | 416 | 4 572 | 4 556 | 3 705 | 435 | 432 |
| | | | Title III
  Operating activities | 1 539 | 1 465 | 1 120 | 345 | 74 | 77 | 77 | 0 | 1 616 | 1 542 | 1 197 | 345 | 74 |
| Total | 9 300 | 9 302 | Total | 9 300 | 9 144 | 8 276 | 868 | 156 | 1 263 | 847 | 416 | 10 563 | 10 407 | 9 123 | 868 | 572 |
| Source: Eurojust data. This table summarises the data supplied by Eurojust in its annual accounts. |

(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

Available appropriations (2004 budget and the financial year 2003)

entered

committed

paid

carried over

cancelled

outstanding commitments

paid

cancelled

appropriations

committed

paid

carried over

cancelled

Community subsidies

9 300

9 300

Title I

Staff

4 198

4 132

4 044

88

66

177

177

0

4 375

4 309

4 221

88

66

Miscellaneous revenue

0

2

Title II

Administration

3 563

3 547

3 112

435

16

1 009

593

416

4 572

4 556

3 705

435

432

Title III

Operating activities

1 539

1 465

1 120

345

74

77

77

0

1 616

1 542

1 197

345

74

Total

9 300

9 302

Total

9 300

9 144

8 276

868

156

1 263

847

416

10 563

10 407

9 123

868

572

Source: Eurojust data. This table summarises the data supplied by Eurojust in its annual accounts.

Table 3

Eurojust — Revenue and expenditure accounts for the financial years 2004 and 2003 (1)

| (1000 euro) |
| --- |
| | 2004 | 2003 |
| Operating revenue |
| Community subsidies | 8 726 | 6 441 |
| Miscellaneous revenue | 397 | 12 |
| Total (a) | 9 123 | 6 453 |
| Operating expenditure |
| Purchases of goods and services | 4 476 | 3 228 |
| Staff costs | 4 142 | 2 112 |
| Depreciation | 332 | 211 |
| Total (b) | 8 950 | 5 551 |
| Outturn for the financial year (a – b) | 173 | 902 |
| Source: Eurojust data — This table summarises the data supplied by Eurojust in its annual accounts. |

(1000 euro)

2004

2003

Operating revenue

Community subsidies

8 726

6 441

Miscellaneous revenue

397

12

Total (a)

9 123

6 453

Operating expenditure

Purchases of goods and services

4 476

3 228

Staff costs

4 142

2 112

Depreciation

332

211

Total (b)

8 950

5 551

Outturn for the financial year (a – b)

173

902

Source: Eurojust data — This table summarises the data supplied by Eurojust in its annual accounts.

Table 4

Eurojust — Balance sheet at 31 December 2004 and 31 December 2003 (2)

| (1000 euro) |
| --- |
| Assets | 2004 | 2003 | Liabilities | 2004 | 2003 |
| Intangible assets | 134 | 62 | Own capital | | |
| | | | Results carried over from previous years | 1 718 | 815 |
| Tangible assets | | | Economic outturn | 173 | 902 |
| Equipment, machinery and tools | 145 | 114 | Subtotal | 1 891 | 1 717 |
| Furniture and vehicles | 726 | 492 | | | |
| Computer equipment | 449 | 460 | Provisions for risks and charges | 0 | 396 |
| Subtotal | 1 320 | 1 066 | | | |
| | | | Current liabilities | | |
| Long-term assets | 1 | 1 | Payable to the Commission | 1 298 | 698 |
| | | | Other liabilities | 13 | 10 |
| Stocks | 30 | 0 | Payable to suppliers | 517 | 305 |
| | | | Subtotal | 1 828 | 1 013 |
| Current assets | | | | | |
| Current assets | 135 | 232 | | | |
| Sundry accounts receivable | 17 | 34 | | | |
| Subtotal | 152 | 266 | | | |
| Disposable assets | 2 082 | 1 731 | | | |
| Total | 3 719 | 3 126 | Total | 3 719 | 3 126 |
| Source: Eurojust data —This table summarises the data supplied by Eurojust in its annual accounts. |

(1000 euro)

Assets

2004

2003

Liabilities

2004

2003

Intangible assets

134

62

Own capital

Results carried over from previous years

1 718

815

Tangible assets

Economic outturn

173

902

Equipment, machinery and tools

145

114

Subtotal

1 891

1 717

Furniture and vehicles

726

492

Computer equipment

449

460

Provisions for risks and charges

0

396

Subtotal

1 320

1 066

Current liabilities

Long-term assets

1

1

Payable to the Commission

1 298

698

Other liabilities

13

10

Stocks

30

0

Payable to suppliers

517

305

Subtotal

1 828

1 013

Current assets

Current assets

135

232

Sundry accounts receivable

17

34

Subtotal

152

266

Disposable assets

2 082

1 731

Total

3 719

3 126

Total

3 719

3 126

Source: Eurojust data —This table summarises the data supplied by Eurojust in its annual accounts.

---

(1)  The data for the financial year 2003 have been restated to take account of a change in methodology.

Source: Eurojust data — This table summarises the data supplied by Eurojust in its annual accounts.

(2)  The data for the financial year 2003 have been restated to take account of a change in methodology.

Source: Eurojust data —This table summarises the data supplied by Eurojust in its annual accounts.

---

EUROJUST REPLIES

| 7. | Eurojust awaits the Commission's prior consent before adopting its own financial regulation in accordance with Article 37(1) of the Eurojust decision. |
| --- | --- |

7.

Eurojust awaits the Commission's prior consent before adopting its own financial regulation in accordance with Article 37(1) of the Eurojust decision.

| 8. | Eurojust tried to follow as closely as possible the structure given in the European Parliament decision concerning its budget. As a consequence, Eurojust presented for formal adoption to the College a budget decision covering the budget concerning EU 15 and informing it of a further increase of one million euros due to the enlargement and informing it where these appropriations would be allocated once released. In the future, Eurojust will ensure it presents as complete a budget as possible to the College. |
| --- | --- |

8.

Eurojust tried to follow as closely as possible the structure given in the European Parliament decision concerning its budget. As a consequence, Eurojust presented for formal adoption to the College a budget decision covering the budget concerning EU 15 and informing it of a further increase of one million euros due to the enlargement and informing it where these appropriations would be allocated once released. In the future, Eurojust will ensure it presents as complete a budget as possible to the College.

| 9. | The situation referred to began in June 2004 when the accountant resigned unexpectedly. At this time, no reserve list existed and the only statutory member of staff with the necessary experience to assume the responsibilities of the accountant was the authorising in question. It should be noted however that the risk due to this ‘force majeure’ situation has been reduced by limiting the capacity to act as authorising officer to transactions of up to 1 000 euro. In the meantime, Eurojust has successfully completed a recruitment procedure for an accountant. It recognises the importance of the segregation of duties and will avoid such a situation arising in future. |
| --- | --- |

9.

The situation referred to began in June 2004 when the accountant resigned unexpectedly. At this time, no reserve list existed and the only statutory member of staff with the necessary experience to assume the responsibilities of the accountant was the authorising in question. It should be noted however that the risk due to this ‘force majeure’ situation has been reduced by limiting the capacity to act as authorising officer to transactions of up to 1 000 euro. In the meantime, Eurojust has successfully completed a recruitment procedure for an accountant. It recognises the importance of the segregation of duties and will avoid such a situation arising in future.

---

| 28.12.2005 | EN | Official Journal of the European Union | C 332/75 |
| --- | --- | --- | --- |

28.12.2005

EN

Official Journal of the European Union

C 332/75

---

REPORT

on the annual accounts of the European Training Foundation for the financial year 2004 together with the Foundation's replies

(2005/C 332/11)

CONTENTS

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

1-2

| 3-6 | THE COURT'S OPINION |
| --- | --- |

3-6

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

7-10

Tables 1 to 4

The 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). Table 1 summarises the competences and activities of the Foundation on the basis of the information supplied by it. |
| --- | --- |

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). Table 1 summarises the competences and activities of the Foundation on the basis of the information supplied by it.

| 2. | For information, the annual accounts drawn up by the Foundation for the financial year 2004 are summarised in Tables 2, 3 and 4. |
| --- | --- |

2.

For information, the annual accounts drawn up by the Foundation for the financial year 2004 are summarised in Tables 2, 3 and 4.

THE COURT'S OPINION

| 3. | The Court's opinion 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.

The Court's opinion 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 2004 (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 give its opinion 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 2004 (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 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 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 accountsExcept for the situation described in paragraph 8, the Foundation's accounts for the financial year ended 31 December 2004 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.

OBSERVATIONS

| 7. | The Tempus programmes, which are managed by the Foundation under a Commission mandate, are not shown in the Foundation's budget. This situation does not comply with the principles of unity and budget accuracy (4), as the Court has pointed out before on several occasions (5). |
| --- | --- |

7.

The Tempus programmes, which are managed by the Foundation under a Commission mandate, are not shown in the Foundation's budget. This situation does not comply with the principles of unity and budget accuracy (4), as the Court has pointed out before on several occasions (5).

| 8. | The Foundation sets out the financial information concerning these programmes (6) in an annex to its annual accounts. Managing these programmes is, however, an integral part of the Foundation's work and takes up a significant part of its human and material resources. The Foundation's accounts, which are supposed, amongst other things, to faithfully reflect its revenue and expenditure, cannot simply exclude the expenditure incurred within the framework of these programmes. |
| --- | --- |

8.

The Foundation sets out the financial information concerning these programmes (6) in an annex to its annual accounts. Managing these programmes is, however, an integral part of the Foundation's work and takes up a significant part of its human and material resources. The Foundation's accounts, which are supposed, amongst other things, to faithfully reflect its revenue and expenditure, cannot simply exclude the expenditure incurred within the framework of these programmes.

| 9. | The Foundation's budget published in the Official Journal specifies the revenue and expenditure by title and chapter only, without further subdividing them into articles and items as required by the budgetary principle of specification (7). Moreover, it does not contain an establishment plan (8). |
| --- | --- |

9.

The Foundation's budget published in the Official Journal specifies the revenue and expenditure by title and chapter only, without further subdividing them into articles and items as required by the budgetary principle of specification (7). Moreover, it does not contain an establishment plan (8).

| 10. | The revenue and expenditure account for the financial year 2003 shows a loss of 1,3 million euro. This balance should have been entered in an amending budget for the financial year 2004 (9). |
| --- | --- |

10.

The revenue and expenditure account for the financial year 2003 shows a loss of 1,3 million euro. This balance should have been entered in an amending budget for the financial year 2004 (9).

This report was adopted by the Court of Auditors in Luxembourg at its meeting of 5 October 2005.

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 18 August 2005 and received by the Court on 22 September 2005.

3

(4)  Article 6(1) and (2) of the Foundation's financial regulation.

4

(5)  Paragraph 9 of the report for the financial year 2002 (OJ C 319, 30.12.2003, p. 48), paragraph 8 of the report for the financial year 2001 (OJ C 326, 27.12.2002, p. 51) and paragraph 11 of the report for the financial year 1999 (OJ C 373, 27.12.2000, p. 34).

5

(6)  The total for payments made in 2004 for the implementation of the Tempus programmes was 9,3 million euro.

6

(7)  Article 22 of the Foundation's financial regulation.

7

(8)  Article 27(3) of the Foundation's financial regulation.

8

(9)  Article 16 of the Foundation's financial regulation.

9

---

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 in 2004

  (2003 data) | Products and services supplied during the financial year 2004 |
| --- | --- | --- | --- | --- |
| ‘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 provision of training assistance to the countries of Central and Eastern Europe and Mongolia, to some countries of the Balkans area and to the countries and territories eligible for the Meda programmes; |

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 in 2004

(2003 data)

Products and services supplied during the financial year 2004

‘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 provision of training assistance to the countries of Central and Eastern Europe and Mongolia, to some countries of the Balkans area and to the countries and territories eligible for the Meda programmes;

| — | To promote the coordination of the assistance given to eligible countries. |
| --- | --- |

—

To promote the coordination of the assistance given to eligible countries.

Tasks

| — | Assistance in defining training needs and priorities; |
| --- | --- |

—

Assistance in defining training needs and priorities;

| — | Provision of information on initiatives and future needs; |
| --- | --- |

—

Provision of information on initiatives and future needs;

| — | Financing pilot projects; |
| --- | --- |

—

Financing pilot projects;

| — | Implementation of Commission programmes in eligible countries. |
| --- | --- |

—

Implementation of Commission programmes in eligible countries.

Governing Board

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

—

one representative of each Member State

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

—

two representatives of the Commission

Director

| — | appointed by the Governing Board on a proposal from the Commission |
| --- | --- |

—

appointed by the Governing Board on a proposal from the Commission

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

External audit

European Court of Auditors

Discharge

European Parliament on a recommendation from the Council

Budget

18,4 million euro (17,2 million euro) fully financed by the Commission

Staff numbers as at 31 December 2004

| — | 104 (104) posts in the establishment plan, of which 99 (99) posts occupied |
| --- | --- |

—

104 (104) posts in the establishment plan, of which 99 (99) posts occupied

| — | 31 (31) other posts (auxiliaries, national experts, employment agency staff). |
| --- | --- |

—

31 (31) other posts (auxiliaries, national experts, employment agency staff).

Total staff: 130 (130) assigned to the following duties:

| — | operational tasks: 82 (80) |
| --- | --- |

—

operational tasks: 82 (80)

| — | administrative tasks: 35 (35) |
| --- | --- |

—

administrative tasks: 35 (35)

| — | mixed tasks: 13 (15) |
| --- | --- |

—

mixed tasks: 13 (15)

Activities

The ETF covers a wide range of areas 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. There were 169 applications in 2004 as against 143 in 2003, most of which were from the Delegations (35 %), followed by AIDCO (21 %), DG EAC (16 %), DG ELARG (9 %) and DG RELEX (7 %). The most frequent applications were those in the field of programming (42 applications), followed by advice on policies and contributions in the preparation of European Neighbourhood Instruments (28), identification of projects (19) and follow-up (18).

Network of observatories in eligible countries: country sector studies, statistics on education, policy advice to countries.

Development projects:

As a centre of expertise, the ETF contributes to 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 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.

Table 2

European Training Foundation — Implementation of the budget for the financial year 2004

| (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 available |
| entered | committed | paid | carried over | cancelled | commitments outstanding | paid | carried over | cancelled | Appropriations | committed | paid | carried over | cancelled |
| Community subsidies | 17 600 | 17 600 | Title I
  Staff | 11 494 | 11 245 | 11 122 | 123 | 249 | 329 | 307 | 0 | 22 | 11 823 | 11 574 | 11 429 | 123 | 271 |
| Earmarked revenue | 800 | 800 | Title II
  Administration | 1 470 | 1 460 | 1 213 | 247 | 10 | 310 | 301 | 0 | 9 | 1 780 | 1 770 | 1 514 | 247 | 19 |
| Other revenue | 0 | 80 | Title III
  Operating activities | 4 636 | 4 617 | 3 449 | 1 168 | 19 | 1 087 | 914 | 0 | 173 | 5 723 | 5 704 | 4 363 | 1 168 | 192 |
| | | | Earmarked revenue | 800 | 800 | 260 | 540 | 0 | 286 | 174 | 112 | 0 | 1 086 | 1 086 | 434 | 652 | 0 |
| Total | 18 400 | 18 480 | Total | 18 400 | 18 122 | 16 044 | 2 078 | 278 | 2 012 | 1 696 | 112 | 204 | 20 412 | 20 134 | 17 740 | 2 190 | 482 |
| NB: Variations in totals are due to the effects of rounding.

  Source: Foundation data — This table summarises the data supplied by the Foundation in its annual accounts. |

(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 available

entered

committed

paid

carried over

cancelled

commitments outstanding

paid

carried over

cancelled

Appropriations

committed

paid

carried over

cancelled

Community subsidies

17 600

17 600

Title I

Staff

11 494

11 245

11 122

123

249

329

307

0

22

11 823

11 574

11 429

123

271

Earmarked revenue

800

800

Title II

Administration

1 470

1 460

1 213

247

10

310

301

0

9

1 780

1 770

1 514

247

19

Other revenue

0

80

Title III

Operating activities

4 636

4 617

3 449

1 168

19

1 087

914

0

173

5 723

5 704

4 363

1 168

192

Earmarked revenue

800

800

260

540

0

286

174

112

0

1 086

1 086

434

652

0

Total

18 400

18 480

Total

18 400

18 122

16 044

2 078

278

2 012

1 696

112

204

20 412

20 134

17 740

2 190

482

NB: Variations in totals are due to the effects of rounding.

Source: Foundation data — This table summarises the data supplied by the Foundation in its annual accounts.

Table 3

European Training Foundation — Revenue and expenditure account for the financial years 2004 and 2003 (1)

| (1000 euro) |
| --- |
| | 2004 | 2003 |
| Revenue |
| Commission subsidies | 17 600 | 18 100 |
| Other donors | 800 | 523 |
| Miscellaneous revenue | 80 | 17 |
| Total revenue (a) | 18 480 | 18 640 |
| Expenditure |
| Staff — Title I of the budget |
| Payments | 11 122 | 10 771 |
| Appropriations carried over | 123 | 329 |
| Administration — Title II of the budget |
| Payments | 1 213 | 1 076 |
| Appropriations carried over | 247 | 310 |
| Operating activities — Title III of the budget |
| Payments | 3 449 | 3 396 |
| Appropriations carried over | 1 168 | 1 087 |
| Earmarked revenue |
| Payments | 260 | 237 |
| Appropriations carried over | 540 | 286 |
| Total expenditure (b) | 18 122 | 17 492 |
| Outturn for the financial year (a – b) | 358 | 1 148 |
| Balance carried over from the previous financial year | –1 318 | –2 155 |
| Appropriations carried over and cancelled | 204 | 375 |
| Reimbursements to the Commission | 0 | – 703 |
| Exchange-rate differences | –3 | 17 |
| Balance for the financial year | – 759 | –1 318 |
| Source: Foundation data — This table summarises the data supplied by the Foundation in its annual accounts. |

(1000 euro)

2004

2003

Revenue

Commission subsidies

17 600

18 100

Other donors

800

523

Miscellaneous revenue

80

17

Total revenue (a)

18 480

18 640

Expenditure

Staff — Title I of the budget

Payments

11 122

10 771

Appropriations carried over

123

329

Administration — Title II of the budget

Payments

1 213

1 076

Appropriations carried over

247

310

Operating activities — Title III of the budget

Payments

3 449

3 396

Appropriations carried over

1 168

1 087

Earmarked revenue

Payments

260

237

Appropriations carried over

540

286

Total expenditure (b)

18 122

17 492

Outturn for the financial year (a – b)

358

1 148

Balance carried over from the previous financial year

–1 318

–2 155

Appropriations carried over and cancelled

204

375

Reimbursements to the Commission

0

– 703

Exchange-rate differences

–3

17

Balance for the financial year

– 759

–1 318

Source: Foundation data — This table summarises the data supplied by the Foundation in its annual accounts.

Table 4

European Training Foundation — Balance sheet at 31 December 2004 and 31 December 2003 (2)

| (1000 euro) |
| --- |
| Assets | 2004 | 2003 | Liabilities | 2004 | 2003 |
| Intangible fixed assets | | | Fixed capital | | |
| Occupational rights | 5 000 | 5 000 | Own capital | 3 516 | 3 852 |
| Software licences | 174 | 146 | Balance for the financial year | – 759 | –1 318 |
| Depreciation | –1 809 | –1 611 | Subtotal | 2 757 | 2 534 |
| Subtotal | 3 365 | 3 535 | Current liabilities | | |
| Tangible fixed assets | | | Automatic carry-overs of appropriations | 1 538 | 1 726 |
| Equipment and furniture | 287 | 273 | Automatic carry-overs of earmarked revenue | 652 | 286 |
| Computer equipment | 1 189 | 1 438 | Other contributors | 134 | 30 |
| Depreciation | –1 325 | –1 444 | Sundry accounts payable | 1 | 1 |
| Subtotal | 151 | 267 | Deferred revenue | 43 | 83 |
| Stocks | | | Subtotal | 2 368 | 2 126 |
| Office equipment | 0 | 50 | | | |
| Subtotal | 0 | 50 | | | |
| Current assets | | | | | |
| Other advances | 2 | 4 | | | |
| Recovery orders | 24 | 43 | | | |
| Sundry accounts receivable | 0 | 39 | | | |
| Subtotal | 26 | 86 | | | |
| Cash accounts | | | | | |
| Bank accounts | 1 580 | 719 | | | |
| Imprest account | 3 | 3 | | | |
| Subtotal | 1 583 | 722 | | | |
| Total | 5 125 | 4 660 | Total | 5 125 | 4 660 |
| Source: Foundation data — This table summarises the data supplied by the Foundation in its annual accounts. |

(1000 euro)

Assets

2004

2003

Liabilities

2004

2003

Intangible fixed assets

Fixed capital

Occupational rights

5 000

5 000

Own capital

3 516

3 852

Software licences

174

146

Balance for the financial year

– 759

–1 318

Depreciation

–1 809

–1 611

Subtotal

2 757

2 534

Subtotal

3 365

3 535

Current liabilities

Tangible fixed assets

Automatic carry-overs of appropriations

1 538

1 726

Equipment and furniture

287

273

Automatic carry-overs of earmarked revenue

652

286

Computer equipment

1 189

1 438

Other contributors

134

30

Depreciation

–1 325

–1 444

Sundry accounts payable

1

1

Subtotal

151

267

Deferred revenue

43

83

Stocks

Subtotal

2 368

2 126

Office equipment

0

50

Subtotal

0

50

Current assets

Other advances

2

4

Recovery orders

24

43

Sundry accounts receivable

0

39

Subtotal

26

86

Cash accounts

Bank accounts

1 580

719

Imprest account

3

3

Subtotal

1 583

722

Total

5 125

4 660

Total

5 125

4 660

Source: Foundation data — This table summarises the data supplied by the Foundation in its annual accounts.

---

(1)  The revenue and expenditure account and balance sheet only take account of the Foundation's specific activities: they do not include programmes managed on behalf of the Commission.

Source: Foundation data — This table summarises the data supplied by the Foundation in its annual accounts.

(2)  The revenue and expenditure account and balance sheet only take account of the Foundation's specific activities: they do not include programmes managed on behalf of the Commission.

Source: Foundation data — This table summarises the data supplied by the Foundation in its annual accounts.

---

THE FOUNDATION'S REPLIES

| 7-8. | The implementation from 2005 onward by the Agency of the modernised EU accounting practices solves the difficulty reported by the Court. Ever since the Court highlighted its concerns, ETF has analysed the alternatives to integrate TEMPUS funds into its budget. Due to the characteristics of the mandate given to ETF and the applicable financial rules, no satisfactory solution could be found to integrate them in ETF budget. In consequence, ETF's 2004 accounts were presented the way used the preceding years. Nevertheless, ETF managed these funds with the same rigour as its own budget, and their use has been reported in an annex to ETF accounts as well as in the Commission's accounts. |
| --- | --- |

7-8.

The implementation from 2005 onward by the Agency of the modernised EU accounting practices solves the difficulty reported by the Court. Ever since the Court highlighted its concerns, ETF has analysed the alternatives to integrate TEMPUS funds into its budget. Due to the characteristics of the mandate given to ETF and the applicable financial rules, no satisfactory solution could be found to integrate them in ETF budget. In consequence, ETF's 2004 accounts were presented the way used the preceding years. Nevertheless, ETF managed these funds with the same rigour as its own budget, and their use has been reported in an annex to ETF accounts as well as in the Commission's accounts.

| 9. | The costs of publishing the details of the budget in the OJ were felt to be disproportionate for an agency with an annual budget of less then 20 million euro. ETF took care to give to the readers all the necessary indications to obtain a fully detailed electronic version of its budget. |
| --- | --- |

9.

The costs of publishing the details of the budget in the OJ were felt to be disproportionate for an agency with an annual budget of less then 20 million euro. ETF took care to give to the readers all the necessary indications to obtain a fully detailed electronic version of its budget.

| 10. | The ETF has taken measures to avoid such a situation in the future. |
| --- | --- |

10.

The ETF has taken measures to avoid such a situation in the future.

---

| 28.12.2005 | EN | Official Journal of the European Union | C 332/82 |
| --- | --- | --- | --- |

28.12.2005

EN

Official Journal of the European Union

C 332/82

---

REPORT

on the annual accounts of the European Foundation for the Improvement of Living and Working Conditions for the financial year 2004 together with the Foundation's replies

(2005/C 332/12)

CONTENTS

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

1-2

| 3-6 | THE COURT'S OPINION |
| --- | --- |

3-6

| 7-9 | OBSERVATIONS |
| --- | --- |

7-9

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. Table 1 summarises the Foundation's competences and activities on the basis of information it has supplied. |
| --- | --- |

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. Table 1 summarises the Foundation's competences and activities on the basis of information it has supplied.

| 2. | For information, the annual accounts drawn up by the Agency for the financial year 2004 are summarised in Tables 2, 3 and 4. |
| --- | --- |

2.

For information, the annual accounts drawn up by the Agency for the financial year 2004 are summarised in Tables 2, 3 and 4.

THE COURT'S OPINION

| 3. | The Court's opinion 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.

The Court's opinion 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 2004 (3) were drawn up by its Executive Director, pursuant to Article 16 of Council Regulation (EEC) No 1365/75, 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 Foundation's accounts for the financial year ended 31 December 2004 (3) were drawn up by its Executive Director, pursuant to Article 16 of Council Regulation (EEC) No 1365/75, 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 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 2004 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 opinion into question.

OBSERVATIONS

| 7. | Analysis of the appropriations carried over to the 2005 financial year shows that 37 % of the commitments carried over were entered into in December 2004. The majority relate to contracts for studies to be carried out in 2005. This practice demonstrates a lack of consistency between the Foundation's annual work programme, on the one hand, and the budget estimates, on the other. |
| --- | --- |

7.

Analysis of the appropriations carried over to the 2005 financial year shows that 37 % of the commitments carried over were entered into in December 2004. The majority relate to contracts for studies to be carried out in 2005. This practice demonstrates a lack of consistency between the Foundation's annual work programme, on the one hand, and the budget estimates, on the other.

| 8. | The physical inventory was not exhaustive as no inventory was made of IT equipment. No organisation manual and no annual verification programme have yet been established (4). |
| --- | --- |

8.

The physical inventory was not exhaustive as no inventory was made of IT equipment. No organisation manual and no annual verification programme have yet been established (4).

| 9. | The revenue and expenditure account for the financial year 2003 shows a loss of 1,3 million euro. This amount should have been recorded in an amending budget for the financial year 2004 (5). |
| --- | --- |

9.

The revenue and expenditure account for the financial year 2003 shows a loss of 1,3 million euro. This amount should have been recorded in an amending budget for the financial year 2004 (5).

This report was adopted by the Court of Auditors in Luxembourg at its meeting of 5 October 2005.

For the Court of Auditors

Hubert WEBER

President

---

(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 7 June 2005 and received by the Court on 29 July 2005.

3

(4)  Article 224 of the detailed rules for the implementation of the general Financial Regulation.

4

(5)  Article 16(2) of the Foundation's financial regulation.

5

---

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 (2003 data) | Products and services provided during the financial year 2004 |
| --- | --- | --- | --- | --- |
| ‘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 (2003 data)

Products and services provided during the financial year 2004

‘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, |
| --- | --- | --- |

1.

Administrative Board

—

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. |
| --- | --- |

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. |
| --- | --- |

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: European Court of Auditors. |
| --- | --- |

4.

External audit: European Court of Auditors.

| 5. | Discharge given by the Parliament on a recommendation by the Council. |
| --- | --- |

5.

Discharge given by the Parliament on a recommendation by the Council.

Final budget:

18,1 million euro (16,8 million euro)

Of which Community subsidy: 99,6 % (98,3 %)

Staff as at 31 December 2004:

91 (88) posts provided for in the establishment plan, of which: 74 (76) were occupied

Other staff: Seconded National Experts and employment agency staff: 16 (16)

Total staff employed: 90 (92)

Operational activities: 53 (60)

Administrative: 32 (28)

Mixed: 5 (4)

Living conditions

| — | Publications: ‘Perception of living conditions in an enlarged Europe’, ‘Quality of life in Europe’, ‘Employment and disabilities: back to work strategies’, analysis and dissemination of statistical data, study relating to time management over the course of life. |
| --- | --- |

—

Publications: ‘Perception of living conditions in an enlarged Europe’, ‘Quality of life in Europe’, ‘Employment and disabilities: back to work strategies’, analysis and dissemination of statistical data, study relating to time management over the course of life.

Working conditions

| — | European Working Conditions Observatory. |
| --- | --- |

—

European Working Conditions Observatory.

| — | Reports on ageing and employment, various reports (part-time working, harassment), preparation for the 2005 survey. |
| --- | --- |

—

Reports on ageing and employment, various reports (part-time working, harassment), preparation for the 2005 survey.

Industrial relations

| — | European Industrial Relations Observatory (EIRO). |
| --- | --- |

—

European Industrial Relations Observatory (EIRO).

| — | Circulation of reports and articles about EIRonline. |
| --- | --- |

—

Circulation of reports and articles about EIRonline.

| — | Bi-monthly publication of EIRobserver. |
| --- | --- |

—

Bi-monthly publication of EIRobserver.

| — | Various reports. |
| --- | --- |

—

Various reports.

European Monitoring Centre on Change (EMCC)

| — | 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 41 conferences and taken part in 95 conferences and seminars. Excluding translations, the Foundation has produced 162 publications and circulated 10 newsletters. |
| --- | --- |

—

The Foundation has organised 41 conferences and taken part in 95 conferences and seminars. Excluding translations, the Foundation has produced 162 publications and circulated 10 newsletters.

Source: Information supplied by the Foundation.

Table 2

European Foundation for the Improvement of Living and Working Conditions — Implementation of the budget for the financial year 2004

| (1000 euro) |
| --- |
| Revenue | Expenditure |
| Origin of revenue | Revenue entered in the final budget for the financial year | Revenue collected | Expenditure allocation | Appropriations in the final budget | Appropriations carried over from the previous financial year | Available appropriations
  (appropriations for the current financial year and appropriations carried over from the previous financial year) |
| entered | committed | paid | carried over | cancelled | outstanding commitments | paid | cancelled | appropriations | committed | paid | carried over | cancelled |
| Community subsidies | 18 000 | 18 000 | Title I
  Staff | 8 738 | 8 738 | 8 606 | 132 | 0 | 108 | 97 | 11 | 8 846 | 8 846 | 8 703 | 132 | 11 |
| Other subsidies | 0 | 0 | Title II
  Administration | 1 762 | 1 756 | 1 267 | 489 | 6 | 224 | 207 | 17 | 1 986 | 1 980 | 1 474 | 489 | 23 |
| Other revenue | 80 | 86 | Title III
  Operating activities | 7 580 | 7 578 | 5 056 | 2 522 | 2 | 2 817 | 2 811 | 6 | 10 397 | 10 395 | 7 867 | 2 522 | 8 |
| Total | 18 080 | 18 086 | Total | 18 080 | 18 072 | 14 929 | 3 143 | 8 | 3 149 | 3 115 | 34 | 21 229 | 21 221 | 18 044 | 3 143 | 42 |
| Source: The Foundation's data — This table summarises the data provided by the Foundation in its annual accounts. |

(1000 euro)

Revenue

Expenditure

Origin of revenue

Revenue entered in the final budget for the financial year

Revenue collected

Expenditure allocation

Appropriations in the final budget

Appropriations carried over from the previous financial year

Available appropriations

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

entered

committed

paid

carried over

cancelled

outstanding commitments

paid

cancelled

appropriations

committed

paid

carried over

cancelled

Community subsidies

18 000

18 000

Title I

Staff

8 738

8 738

8 606

132

0

108

97

11

8 846

8 846

8 703

132

11

Other subsidies

0

0

Title II

Administration

1 762

1 756

1 267

489

6

224

207

17

1 986

1 980

1 474

489

23

Other revenue

80

86

Title III

Operating activities

7 580

7 578

5 056

2 522

2

2 817

2 811

6

10 397

10 395

7 867

2 522

8

Total

18 080

18 086

Total

18 080

18 072

14 929

3 143

8

3 149

3 115

34

21 229

21 221

18 044

3 143

42

Source: The Foundation's data — This table summarises the data provided by the Foundation in its annual accounts.

Table 3

European Foundation for the Improvement of Living and Working Conditions — Revenue and expenditure accounts for the financial years 2004 and 2003

| (1000 euro) |
| --- |
| | 2004 | 2003 |
| Revenue |
| Commission subsidies | 18 000 | 17 090 |
| Miscellaneous revenue | 5 | 40 |
| Revenue from services rendered | 81 | 42 |
| Total revenue (a) | 18 086 | 17 172 |
| Expenditure |
| Staff — Title I of the budget |
| Payments | 8 606 | 8 927 |
| Appropriations carried over | 132 | 109 |
| Administration — Title II of the budget |
| Payments | 1 267 | 968 |
| Appropriations carried over | 489 | 224 |
| Operating activities — Title III of the budget |
| Payments | 5 056 | 3 733 |
| Appropriations carried over | 2 522 | 2 817 |
| Total expenditure (b) | 18 072 | 16 778 |
| Outturn for the financial year (a – b) | 14 | 394 |
| Balance carried over from the previous financial year | –1 296 | –1 836 |
| Appropriations carried over and cancelled | 34 | 118 |
| Sums from the previous financial year for re-use and not used | 18 | 19 |
| Phare revenue collected | 0 | 639 |
| Phare revenue to be collected | 0 | 361 |
| Phare expenditure | 0 | –1 000 |
| Other adjustments | 10 | 0 |
| Exchange-rate differences | –4 | 9 |
| Balance for the financial year | –1 224 | –1 296 |
| Source: The Foundation's data — This table summarises the data provided by the Foundation in its annual accounts. |

(1000 euro)

2004

2003

Revenue

Commission subsidies

18 000

17 090

Miscellaneous revenue

5

40

Revenue from services rendered

81

42

Total revenue (a)

18 086

17 172

Expenditure

Staff — Title I of the budget

Payments

8 606

8 927

Appropriations carried over

132

109

Administration — Title II of the budget

Payments

1 267

968

Appropriations carried over

489

224

Operating activities — Title III of the budget

Payments

5 056

3 733

Appropriations carried over

2 522

2 817

Total expenditure (b)

18 072

16 778

Outturn for the financial year (a – b)

14

394

Balance carried over from the previous financial year

–1 296

–1 836

Appropriations carried over and cancelled

34

118

Sums from the previous financial year for re-use and not used

18

19

Phare revenue collected

0

639

Phare revenue to be collected

0

361

Phare expenditure

0

–1 000

Other adjustments

10

0

Exchange-rate differences

–4

9

Balance for the financial year

–1 224

–1 296

Source: The Foundation's data — This table summarises the data provided by the Foundation in its annual accounts.

Table 4

European Foundation for the Improvement of Living and Working Conditions — Balance sheet as at 31 December 2004 and 31 December 2003

| (1000 euro) |
| --- |
| Assets | 2004 | 2003 | Liabilities | 2004 | 2003 |
| Fixed assets | | | Fixed capital | | |
| Intangible fixed assets | 11 | 27 | Own capital | 3 068 | 4 389 |
| Buildings | 14 426 | 15 682 | Revaluation reserve | 12 094 | 12 094 |
| Furniture and vehicles | 98 | 142 | Balance for the financial year | –1 224 | –1 296 |
| Computer equipment | 190 | 107 | Subtotal | 13 938 | 15 187 |
| Technical and other equipment | 431 | 518 | Current liabilities | | |
| | | | Automatic carry-overs of appropriations | 3 143 | 3 150 |
| Subtotal | 15 156 | 16 476 | Bank interest to be reimbursed to the Commission | 48 | 0 |
| Stocks | | | PHARE liabilities | 0 | 329 |
| Office supplies | 6 | 7 | Miscellaneous | 8 | 0 |
| Subtotal | 6 | 7 | Subtotal | 3 199 | 3 479 |
| Current assets | | | Suspense accounts | | |
| Commission PHARE receivables | 100 | 361 | Sums to be re-used | 0 | 22 |
| Advances | 1 | 2 | Deferred revenue | 6 | 2 |
| VAT to be recovered | 230 | 281 | Payments in progress | 5 | 0 |
| Recovery orders to be collected | 6 | 5 | Subtotal | 11 | 24 |
| Sundry accounts receivable | 0 | 41 | | | |
| Subtotal | 337 | 690 | | | |
| Cash accounts | | | | | |
| Banks | 1 634 | 1 331 | | | |
| Cash | 3 | 3 | | | |
| Imprest account | 12 | 183 | | | |
| Subtotal | 1 649 | 1 517 | | | |
| Total | 17 148 | 18 690 | Total | 17 148 | 18 690 |
| Source: The Foundation's data — This table summarises the data provided by the Foundation in its annual accounts. |

(1000 euro)

Assets

2004

2003

Liabilities

2004

2003

Fixed assets

Fixed capital

Intangible fixed assets

11

27

Own capital

3 068

4 389

Buildings

14 426

15 682

Revaluation reserve

12 094

12 094

Furniture and vehicles

98

142

Balance for the financial year

–1 224

–1 296

Computer equipment

190

107

Subtotal

13 938

15 187

Technical and other equipment

431

518

Current liabilities

Automatic carry-overs of appropriations

3 143

3 150

Subtotal

15 156

16 476

Bank interest to be reimbursed to the Commission

48

0

Stocks

PHARE liabilities

0

329

Office supplies

6

7

Miscellaneous

8

0

Subtotal

6

7

Subtotal

3 199

3 479

Current assets

Suspense accounts

Commission PHARE receivables

100

361

Sums to be re-used

0

22

Advances

1

2

Deferred revenue

6

2

VAT to be recovered

230

281

Payments in progress

5

0

Recovery orders to be collected

6

5

Subtotal

11

24

Sundry accounts receivable

0

41

Subtotal

337

690

Cash accounts

Banks

1 634

1 331

Cash

3

3

Imprest account

12

183

Subtotal

1 649

1 517

Total

17 148

18 690

Total

17 148

18 690

Source: The Foundation's data — This table summarises the data provided by the Foundation in its annual accounts.

---

THE FOUNDATION'S REPLIES

| 7. | Due to unforeseen circumstances, a significant surplus became available in some budget lines and was utilised in December to commence work on research activities relevant for 2004 and 2005. Moreover in order to increase the synergy between Foundation activities, it was decided to use a single tender in 2005 for all services for observatories. As a consequence some of the relevant existing contracts had to be extended in December to bridge the time between the conclusion of those contracts and that foreseen for commencement of a new 2005 contract. |
| --- | --- |

7.

Due to unforeseen circumstances, a significant surplus became available in some budget lines and was utilised in December to commence work on research activities relevant for 2004 and 2005. Moreover in order to increase the synergy between Foundation activities, it was decided to use a single tender in 2005 for all services for observatories. As a consequence some of the relevant existing contracts had to be extended in December to bridge the time between the conclusion of those contracts and that foreseen for commencement of a new 2005 contract.

| 8. | Procedures have now changed to provide for registration in the inventory on the basis of Delivery Dockets.
  The updating of the financial procedures manual is scheduled for completion in September 2005 and will incorporate an annual programme for verification of inventory items. |
| --- | --- |

8.

Procedures have now changed to provide for registration in the inventory on the basis of Delivery Dockets.

The updating of the financial procedures manual is scheduled for completion in September 2005 and will incorporate an annual programme for verification of inventory items.

| 9. | The 1,3 million euro represents sums due for payment by the Commission to the Foundation. The Commission was contacted during 2004 with regard to establishing an amending budget and has indicated it will examine the issue in 2005. |
| --- | --- |

9.

The 1,3 million euro represents sums due for payment by the Commission to the Foundation. The Commission was contacted during 2004 with regard to establishing an amending budget and has indicated it will examine the issue in 2005.

---

| 28.12.2005 | EN | Official Journal of the European Union | C 332/89 |
| --- | --- | --- | --- |

28.12.2005

EN

Official Journal of the European Union

C 332/89

---

REPORT

on the annual accounts of the European Monitoring Centre for Drugs and Drug Addiction for the financial year 2004 together with the Monitoring Centre's replies

(2005/C 332/13)

CONTENTS

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

1-2

| 3-6 | THE COURT'S OPINION |
| --- | --- |

3-6

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

7-10

Tables 1 to 4

The Monitoring Centre's replies

INTRODUCTION

| 1. | The European Monitoring Centre for Drugs and Drug Addiction (hereinafter called ‘the Monitoring 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 demand for drugs and ways of reducing both it and drug-market-related events in general. Table 1 summarises the Monitoring Centre's competences and activities on the basis of information it has supplied. |
| --- | --- |

1.

The European Monitoring Centre for Drugs and Drug Addiction (hereinafter called ‘the Monitoring 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 demand for drugs and ways of reducing both it and drug-market-related events in general. Table 1 summarises the Monitoring Centre's competences and activities on the basis of information it has supplied.

| 2. | For information, the annual accounts drawn up by the Monitoring Centre for the financial year 2004 are summarised in Tables 2, 3 and 4. |
| --- | --- |

2.

For information, the annual accounts drawn up by the Monitoring Centre for the financial year 2004 are summarised in Tables 2, 3 and 4.

THE COURT'S OPINION

| 3. | The Court's opinion 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.

The Court's opinion 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 2004 (3) were drawn up by its Executive 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 2004 (3) were drawn up by its Executive 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 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 Centre's accounts for the financial year ended 31 December 2004 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 opinion into question.

OBSERVATIONS

| 7. | More than a hundred transfers of appropriations were made during the financial year 2004; the transfers made from certain items were compensated for by transfers in the opposite direction. Amendments on this scale make the management of the Monitoring Centre very cumbersome and show that the necessary rigour is not being applied to compliance with the budgetary principle of specification. |
| --- | --- |

7.

More than a hundred transfers of appropriations were made during the financial year 2004; the transfers made from certain items were compensated for by transfers in the opposite direction. Amendments on this scale make the management of the Monitoring Centre very cumbersome and show that the necessary rigour is not being applied to compliance with the budgetary principle of specification.

| 8. | The checks carried out on the implementation of contracts revealed a number of anomalies (4). Although, considered individually, these anomalies do not call into question the regularity of the transactions concerned, their frequency (5) should induce the Monitoring Centre to strengthen its internal control system. |
| --- | --- |

8.

The checks carried out on the implementation of contracts revealed a number of anomalies (4). Although, considered individually, these anomalies do not call into question the regularity of the transactions concerned, their frequency (5) should induce the Monitoring Centre to strengthen its internal control system.

| 9. | No reconciliations between bank balances and the accounts are carried out and the errors in the amounts to be paid are not always detected. Moreover, the accounting officer's instructions to the bank are not countersigned by a second person. As this is a high-risk area, internal control procedures should be strengthened without delay. |
| --- | --- |

9.

No reconciliations between bank balances and the accounts are carried out and the errors in the amounts to be paid are not always detected. Moreover, the accounting officer's instructions to the bank are not countersigned by a second person. As this is a high-risk area, internal control procedures should be strengthened without delay.

| 10. | The data concerning fixed assets are compiled with the aid of electronic calculation sheets, which does not guarantee the integrity of the data recorded. A reliable computer system must be used to monitor the fixed assets. |
| --- | --- |

10.

The data concerning fixed assets are compiled with the aid of electronic calculation sheets, which does not guarantee the integrity of the data recorded. A reliable computer system must be used to monitor the fixed assets.

This report was adopted by the Court of Auditors in Luxembourg at its meeting of 5 October 2005.

For the Court of Auditors

Hubert WEBER

President

---

(1)  OJ L 36, 12.2.1993. This Regulation has been amended by Regulation (EC) No 3294/94 of 22.12.1994 (OJ L 341, 30.12.1994, p. 7) and Regulation (EC) No 1651/2003 of 18.6.2003 (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 11 August 2005 and received by the Court on 19 September 2005.

3

(4)  In particular, six cases of purchases being made without a contract using just an order form, commencement of work for one contract before the commitment operations, inadequate checks on one contractor's invoices, amendments to contracts without the addition of new clauses (checks covered a total of 360 000 euro, i.e. 27 % of purchases made within the framework of Title II).

4

(5)  An examination of the 13 contracts in the sample revealed that all except one contained at least one anomaly; altogether no fewer than 23 anomalies were detected.

5

---

Table 1

European Monitoring Centre for Drugs and Drug Addiction (Lisbon)

| Areas of Community competence deriving from the Treaty | Competencies of the Monitoring Centre as defined in Council Regulation (EC) No 302/93 | Governance | Resources made available to the Monitoring Centre in 2004

  (2003 data) | Products and services supplied in 2004 |
| --- | --- | --- | --- | --- |
| 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 European 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

Competencies of the Monitoring Centre as defined in Council Regulation (EC) No 302/93

Governance

Resources made available to the Monitoring Centre in 2004

(2003 data)

Products and services supplied in 2004

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 European 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 is more reliable. |
| --- | --- |

—

To ensure that European-level data is more reliable.

| — | To publish reliable information. |
| --- | --- |

—

To publish reliable information.

| — | To improve coordination between the national and Community actions. |
| --- | --- |

—

To improve coordination between the 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. |
| --- | --- |

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 on the Commission's proposal. |
| --- | --- |

2.

Director: Appointed by the Management Board on 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. |
| --- | --- |

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 audit: European Court of Auditors. |
| --- | --- |

4.

External audit: European Court of Auditors.

| 5. | Discharge: European Parliament on the Council's recommendation. |
| --- | --- |

5.

Discharge: European Parliament on the Council's recommendation.

Final Budget:

12,2 million euro (10,5 million euro), Community subsidy: 96 % (89 %).

Staff numbers as at 31 December 2004:

Number of posts in establishment plan: 77 (63).

Posts occupied: 61 (54).

+ 22 (18) other staff (auxiliary contracts, contract staff and employment-agency staff)

Total staff: 83 (72) assigned to the following duties:

| — | operational tasks: 54,5 (46,5), |
| --- | --- |

—

operational tasks: 54,5 (46,5),

| — | administrative and IT support tasks: 20 (18), |
| --- | --- |

—

administrative and IT support tasks: 20 (18),

| — | mixed tasks: 8,5 (7,5). |
| --- | --- |

—

mixed tasks: 8,5 (7,5).

Network:

The Monitoring Centre runs a computerised network for the collection and exchange of information called the ‘‘European Information Network on Drugs and Drugs Addiction’’ (Reitox); this network connects the national drug-information networks, the specialist centres in the Member States and the information systems of international organisations working with the Monitoring Centre.

Publications:

| — | Annual report on the state of the drug problem in the European Union (20 language versions, publication and interactive website) |
| --- | --- |

—

Annual report on the state of the drug problem in the European Union (20 language versions, publication and interactive website)

| — | Bulletin of statistics and interactive website containing over 100 tables |
| --- | --- |

—

Bulletin of statistics and interactive website containing over 100 tables

| — | General report of activities (annual, EN) |
| --- | --- |

—

General report of activities (annual, EN)

| — | Newsletter, Drugnet Europe (4 issues in five languages, 20 products) |
| --- | --- |

—

Newsletter, Drugnet Europe (4 issues in five languages, 20 products)

| — | Policy briefings, Drugs in Focus (3 issues, 21 languages, 63 products) |
| --- | --- |

—

Policy briefings, Drugs in Focus (3 issues, 21 languages, 63 products)

| — | Country situation summaries — for the 25 Member States (interactive website) |
| --- | --- |

—

Country situation summaries — for the 25 Member States (interactive website)

| — | Publications in the EMCDDA series: 1 Monograph, 2 Risk assessments, 1 Insights |
| --- | --- |

—

Publications in the EMCDDA series: 1 Monograph, 2 Risk assessments, 1 Insights

| — | Snapshot 2004 — report and 10 thematic papers — publication and website |
| --- | --- |

—

Snapshot 2004 — report and 10 thematic papers — publication and website

| — | Scientific studies (20) |
| --- | --- |

—

Scientific studies (20)

| — | Presentation brochure (in the ten new languages) |
| --- | --- |

—

Presentation brochure (in the ten new languages)

| — | Complete restructuring of main website |
| --- | --- |

—

Complete restructuring of main website

Source: Information forwarded by the Monitoring Centre.

Table 2

European Monitoring Centre for Drugs and Drug Addiction — Implementation of the budget for the financial year 2004

| (1000 euro) |
| --- |
| Revenue | Expenditure |
| Source of revenue | Revenue entered in the final budget for the financial year | Revenue collected | Allocation of expenditure | Final appropriations for the financial year | Appropriations carried over from previous financial years |
| entered | committed | paid | carried over | cancelled | available | committed | paid | cancelled |
| Commission subsidy | 11 730 | 11 730 | Title I | | | | | | | | | |
| Subsidy from Norway | 514 | 514 | Staff (NDA) | 6 171 | 5 998 | 5 831 | 122 | 218 | 80 | 80 | 61 | 18 |
| Miscellaneous revenue | 0 | 33 | Title II | | | | | | | | | |
| Phare assigned revenue | 0 | 211 | Administration (NDA) | 1 479 | 1 444 | 1 088 | 356 | 35 | 267 | 267 | 210 | 57 |
| | | | Title III | | | | | | | | | |
| | | | Operating activities (DA) | | | | | | 1 469 | 1 452 | 1 299 | 170 |
| | | | — CA | 4 594 | 4 509 | — | — | 85 | — | — | — | — |
| | | | — PA | 4 594 | — | 2 342 | 1 260 | 992 | — | — | — | — |
| | | | Assigned revenue | — | — | — | — | — | 223 | 218 | 201 | 22 |
| | 12 244 | 12 488 | Total CA | 12 244 | 11 951 | | | | | | | |
| Total PA | 12 244 | | 9 262 | 1 737 | 1 245 | 2 039 | 2 016 | 1 771 | 267 |
| 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.

  Source: Information supplied by the Monitoring Centre — This table summarises the data provided by the Monitoring Centre in its annual accounts. |

(1000 euro)

Revenue

Expenditure

Source of revenue

Revenue entered in the final budget for the financial year

Revenue collected

Allocation of expenditure

Final appropriations for the financial year

Appropriations carried over from previous financial years

entered

committed

paid

carried over

cancelled

available

committed

paid

cancelled

Commission subsidy

11 730

11 730

Title I

Subsidy from Norway

514

514

Staff (NDA)

6 171

5 998

5 831

122

218

80

80

61

18

Miscellaneous revenue

0

33

Title II

Phare assigned revenue

0

211

Administration (NDA)

1 479

1 444

1 088

356

35

267

267

210

57

Title III

Operating activities (DA)

1 469

1 452

1 299

170

— CA

4 594

4 509

—

—

85

—

—

—

—

— PA

4 594

—

2 342

1 260

992

—

—

—

—

Assigned revenue

—

—

—

—

—

223

218

201

22

12 244

12 488

Total CA

12 244

11 951

Total PA

12 244

9 262

1 737

1 245

2 039

2 016

1 771

267

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.

Source: Information supplied by the Monitoring Centre — This table summarises the data provided by the Monitoring Centre in its annual accounts.

Table 3

European Monitoring Centre for Drugs and Drug Addiction — Revenue and expenditure accounts for the financial years 2004 and 2003

| (1000 euro) |
| --- |
| | 2004 | 2003 (1) |
| Revenue |
| Subsidies from the Commission | 11 730 | 9 300 |
| Subsidies from Norway | 514 | 421 |
| Assigned revenue | 211 | 335 |
| Miscellaneous revenue | 33 | 67 |
| Total revenue (a) | 12 488 | 10 122 |
| Budgetary expenditure for the financial year |
| Staff — Title I of the budget |
| Payments | 5 832 | 5 189 |
| Appropriations carried over | 122 | 80 |
| Administration — Title II of the budget |
| Payments | 1 088 | 555 |
| Appropriations carried over | 356 | 267 |
| Operating activities — Title III of the budget (except assigned revenue) |
| Payments against payment appropriations for the financial year | 2 342 | 2 057 |
| Appropriations carried over | 1 260 | 1 469 |
| Assigned revenue (Phare and third countries) | 201 | 500 |
| Total expenditure (b) | 11 200 | 10 117 |
| Outturn for the financial year (a – b) | 1 288 | 5 |
| Balance carried over from the previous financial year | 295 | 1 626 |
| Appropriations carried over and cancelled | 245 (2) | 221 |
| Sums for re-use from the previous financial year not used | 15 | 21 |
| Refunds to the Commission | –3 | –1 584 |
| Refunds to Norway | 81 | |
| Exchange-rate differences | –1 | 6 |
| Balance for the financial year | 1 920 | 295 |
| Source: Information supplied by the Monitoring Centre — This table summarises the data provided by the Monitoring Centre in its annual accounts. |

(1000 euro)

2004

2003 (1)

Revenue

Subsidies from the Commission

11 730

9 300

Subsidies from Norway

514

421

Assigned revenue

211

335

Miscellaneous revenue

33

67

Total revenue (a)

12 488

10 122

Budgetary expenditure for the financial year

Staff — Title I of the budget

Payments

5 832

5 189

Appropriations carried over

122

80

Administration — Title II of the budget

Payments

1 088

555

Appropriations carried over

356

267

Operating activities — Title III of the budget (except assigned revenue)

Payments against payment appropriations for the financial year

2 342

2 057

Appropriations carried over

1 260

1 469

Assigned revenue (Phare and third countries)

201

500

Total expenditure (b)

11 200

10 117

Outturn for the financial year (a – b)

1 288

5

Balance carried over from the previous financial year

295

1 626

Appropriations carried over and cancelled

245 (2)

221

Sums for re-use from the previous financial year not used

15

21

Refunds to the Commission

–3

–1 584

Refunds to Norway

81

Exchange-rate differences

–1

6

Balance for the financial year

1 920

295

Source: Information supplied by the Monitoring Centre — This table summarises the data provided by the Monitoring Centre in its annual accounts.

Table 4

European Monitoring Centre for Drugs and Drug Addiction — Balance sheet as at 31 December 2004 and 31 December 2003

| (1000 euro) |
| --- |
| Assets | 2004 | 2003 | Liabilities | 2004 | 2003 |
| Fixed assets | | | Fixed capital | | |
| Intangible assets | 129 | 94 | Own capital | 2 950 | 3 057 |
| Buildings | 3 559 | 3 559 | Balance for the financial year | 1 920 | 295 |
| Equipment and furniture | 165 | 157 | Subtotal | 4 870 | 3 352 |
| Transport equipment | 50 | 50 | Current liabilities | | |
| Computer equipment | 716 | 659 | Phare carry-overs | — | 223 |
| Depreciation | –1 713 | –1 496 | Appropriations carried over against Titles I, II and III | 1 737 | 1 815 |
| Subtotal | 2 906 | 3 023 | Sundry accounts payable | 54 | 18 |
| Stocks | | | Recovery orders | 0 | 55 |
| Office supplies | 0 | 34 | Subtotal | 1 791 | 2 111 |
| Subtotal | 0 | 34 | Suspense accounts | | |
| | | | Revenue for re-use | 25 | — |
| Long-term assets | | | Deferred revenue | — | 123 |
| Staff loans | 23 | 0 | Subtotal | 25 | 123 |
| Subtotal | 23 | 0 | | | |
| Current assets | | | | | |
| Phare | 26 | | | | |
| Other advances | 8 | 78 | | | |
| Recoverable VAT | 47 | 94 | | | |
| Sundry accounts receivable | 32 | 66 | | | |
| Subtotal | 113 | 238 | | | |
| Cash accounts | | | | | |
| Bank accounts | 3 640 | 2 291 | | | |
| Cash | 4 | | | | |
| Subtotal | 3 644 | 2 291 | | | |
| Total | 6 686 | 5 586 | Total | 6 686 | 5 586 |
| Source: Information supplied by the Monitoring Centre — This table summarises the data provided by the Monitoring Centre in its annual accounts. |

(1000 euro)

Assets

2004

2003

Liabilities

2004

2003

Fixed assets

Fixed capital

Intangible assets

129

94

Own capital

2 950

3 057

Buildings

3 559

3 559

Balance for the financial year

1 920

295

Equipment and furniture

165

157

Subtotal

4 870

3 352

Transport equipment

50

50

Current liabilities

Computer equipment

716

659

Phare carry-overs

—

223

Depreciation

–1 713

–1 496

Appropriations carried over against Titles I, II and III

1 737

1 815

Subtotal

2 906

3 023

Sundry accounts payable

54

18

Stocks

Recovery orders

0

55

Office supplies

0

34

Subtotal

1 791

2 111

Subtotal

0

34

Suspense accounts

Revenue for re-use

25

—

Long-term assets

Deferred revenue

—

123

Staff loans

23

0

Subtotal

25

123

Subtotal

23

0

Current assets

Phare

26

Other advances

8

78

Recoverable VAT

47

94

Sundry accounts receivable

32

66

Subtotal

113

238

Cash accounts

Bank accounts

3 640

2 291

Cash

4

Subtotal

3 644

2 291

Total

6 686

5 586

Total

6 686

5 586

Source: Information supplied by the Monitoring Centre — This table summarises the data provided by the Monitoring Centre in its annual accounts.

---

(1)  The data for the financial year 2003 have been processed again to enable use of the assigned revenue to be traced.

(2)  Does not take into account cancellations of Phare appropriations carried over and not used (22 000 euro).

Source: Information supplied by the Monitoring Centre — This table summarises the data provided by the Monitoring Centre in its annual accounts.

---

THE MONITORING CENTRE'S REPLIES

| 7. | The final budget of the EMCDDA was adopted only in May 2004 owing to enlargement. Therefore, it was necessary to make numerous transfers in order to ensure the implementation of the EMCDDA's work programme. |
| --- | --- |

7.

The final budget of the EMCDDA was adopted only in May 2004 owing to enlargement. Therefore, it was necessary to make numerous transfers in order to ensure the implementation of the EMCDDA's work programme.

| 8. | The EMCDDA has implemented the following measures in order to improve the management of its contracts:






  — | a more precise procurement planning in terms of defining requirements, |
| --- | --- | --- |

8.

The EMCDDA has implemented the following measures in order to improve the management of its contracts:

—

a more precise procurement planning in terms of defining requirements,

| — | training for managers, |
| --- | --- |

—

training for managers,

| — | the development of standard contract forms, |
| --- | --- |

—

the development of standard contract forms,

| — | the clarification of the internal procedures used for commitments, |
| --- | --- |

—

the clarification of the internal procedures used for commitments,

| — | the introduction of checklists for payments and other budgetary operations. |
| --- | --- |

—

the introduction of checklists for payments and other budgetary operations.

| 9. | In order to take account of the Court's observation, the EMCDDA put in place a monthly reconciliation procedure in September 2005, providing for the signature of the Accounting Officer and submission to the Authorising Officer. The EMCDDA will implement a countersigning system as soon as possible. |
| --- | --- |

9.

In order to take account of the Court's observation, the EMCDDA put in place a monthly reconciliation procedure in September 2005, providing for the signature of the Accounting Officer and submission to the Authorising Officer. The EMCDDA will implement a countersigning system as soon as possible.

| 10. | The implementation of a new, more effective, inventory system made it necessary to use calculation sheets in order to ensure continuity of management. The closure of inventory 2005 will be based on this new system. |
| --- | --- |

10.

The implementation of a new, more effective, inventory system made it necessary to use calculation sheets in order to ensure continuity of management. The closure of inventory 2005 will be based on this new system.

---

| 28.12.2005 | EN | Official Journal of the European Union | C 332/97 |
| --- | --- | --- | --- |

28.12.2005

EN

Official Journal of the European Union

C 332/97

---

REPORT

on the annual accounts of the European Monitoring Centre on Racism and Xenophobia for the financial year 2004 together with the Monitoring Centre's replies

(2005/C 332/14)

CONTENTS

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

1-2

| 3-6 | THE COURT'S OPINION |
| --- | --- |

3-6

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

7-10

Tables 1 to 4

The Monitoring Centre's replies

INTRODUCTION

| 1. | The European Monitoring Centre on Racism and Xenophobia (‘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. Table 1 summarises the Centre's competencies and activities on the basis of information it has supplied. |
| --- | --- |

1.

The European Monitoring Centre on Racism and Xenophobia (‘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. Table 1 summarises the Centre's competencies and activities on the basis of information it has supplied.

| 2. | For information purposes the annual accounts drawn up by the Centre for the financial year 2004 are summarised in Tables 2, 3 and 4. |
| --- | --- |

2.

For information purposes the annual accounts drawn up by the Centre for the financial year 2004 are summarised in Tables 2, 3 and 4.

THE COURT'S OPINION

| 3. | The Court's opinion 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.

The Court's opinion 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 2004 (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 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 2004 (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 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 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 Centre's accounts for the financial year ended 31 December 2004 are, in all material respects, reliable.Legality and regularity of the underlying transactionsExcept for the situations described in points 9 and10, the transactions underlying the Centre's annual accounts, taken as a whole, are legal and regular.]

OBSERVATIONS

| 7. | The cancellations of the appropriations carried over from the previous financial year remained at the same level (20 %) as last year. There is a need for the Centre to improve the way carry-overs are established (4). |
| --- | --- |

7.

The cancellations of the appropriations carried over from the previous financial year remained at the same level (20 %) as last year. There is a need for the Centre to improve the way carry-overs are established (4).

| 8. | Internal control standards have been developed. These standards have not yet been formally adopted by the Centre's Management Board as required by its Financial Regulation (5). A risk analysis should be carried out in order to assess their relevance. The ex-ante verification checklists should be improved and filled in all cases. |
| --- | --- |

8.

Internal control standards have been developed. These standards have not yet been formally adopted by the Centre's Management Board as required by its Financial Regulation (5). A risk analysis should be carried out in order to assess their relevance. The ex-ante verification checklists should be improved and filled in all cases.

| 9. | The Centre annually carries out a tendering procedure for selecting 25 national focal points under RAXEN (6). Contrary to the Centre's rules for the implementation of its financial regulation (7), the relative weighting to be applied in order to determine the most economically advantageous offers were included neither in the procurement notice nor the tender documents. One out of the 25 contracts (8) was not awarded to the offer identified as being the most economically advantageous. |
| --- | --- |

9.

The Centre annually carries out a tendering procedure for selecting 25 national focal points under RAXEN (6). Contrary to the Centre's rules for the implementation of its financial regulation (7), the relative weighting to be applied in order to determine the most economically advantageous offers were included neither in the procurement notice nor the tender documents. One out of the 25 contracts (8) was not awarded to the offer identified as being the most economically advantageous.

| 10. | In the case of one contract for the provision of administrative services (9) the documents relating to the tendering procedure used could not be traced. In another similar case, the services were directly awarded although, there was no reason justifying such procedure (10). In a last case (11), the contract was not awarded to the lowest bidder. |
| --- | --- |

10.

In the case of one contract for the provision of administrative services (9) the documents relating to the tendering procedure used could not be traced. In another similar case, the services were directly awarded although, there was no reason justifying such procedure (10). In a last case (11), the contract was not awarded to the lowest bidder.

This report was adopted by the Court of Auditors in Luxembourg at its meeting of 5 October 2005.

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 27 June 2005 and received by the Court on 19 September 2005.

3

(4)  Notwithstanding the above the level of carry-over of appropriations under Title III, ‘Operating activities’ significantly decreased (from 36 % in 2003 to 19 % in 2004). This is the result of a more detailed assessment at year end to identify which obligations will give rise to payments in the following financial year.

4

(5)  See Article 38(4) of the Centre's financial regulation.

5

(6)  See Table 1.

6

(7)  Article 116(3) of the Centre's Regulation laying down detailed rules for the implementation of its Financial Regulation.

7

(8)  Amounting to 70 000 euro in total.

8

(9)  Maintenance of photocopiers amounting to approximately 25 000 euro.

9

(10)  Security of the building amounting to approximately 92 000 euro.

10

(11)  Printing of Annual Report amounting to approximately 35 000 euro.

11

---

Table 1

European Monitoring Centre on Racism and Xenophobia (Vienna)

| Areas of Community competence deriving from the Treaty | Competence 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 in 2004

  (2003 data) | Products and services supplied in 2004 |
| --- | --- | --- | --- | --- |
| Free circulation of goods and persons.
  Freedom of establishment. | 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

Competence 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 in 2004

(2003 data)

Products and services supplied in 2004

Free circulation of goods and persons.

Freedom of establishment.

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), and in particular: |
| --- | --- |

—

To collect and analyse information, via the European Racism and Xenophobia Information Network (RAXEN), and in particular:

| — | 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.

Final budget: 7,9 million euro (6,6 million euro) including Community contribution: 99 % (99 %).

Staff numbers at 31 December 2004:

34 (30) posts in establishment plan,

posts occupied: 30 (26)

+ 4 (4) other staff (auxiliary contract, seconded national experts, local and employment-agency staff).

Total staff: 34 (30)

Assigned to the following duties:

operational: 21 (17)

administrative: 8 (8)

mixed: 5 (5).

ORAXEN:

number of contributions through the 25 national focal points:

389 number of meetings:

41 meetings for the external evaluators of ORAXEN,

2 meetings to draw up guidelines for the special study on Roma.

Research reports:

number of reports: 9

number of meetings: —

Annual Report: 2

EUMC News: 2

Cooperation with the Member States and the other institutions (number of events organised jointly):

| — | Member States: 7 |
| --- | --- |

—

Member States: 7

| — | Commission: 5 |
| --- | --- |

—

Commission: 5

| — | European Parliament: 3 |
| --- | --- |

—

European Parliament: 3

| — | COR: 3 |
| --- | --- |

—

COR: 3

| — | Council of Europe: 2 |
| --- | --- |

—

Council of Europe: 2

| — | OSCE: 7 |
| --- | --- |

—

OSCE: 7

| — | UN: 4 |
| --- | --- |

—

UN: 4

| — | Inter-agency: 3 |
| --- | --- |

—

Inter-agency: 3

| — | NRT:4 |
| --- | --- |

—

NRT:4

| — | ERT:1 |
| --- | --- |

—

ERT:1

Source: Information sent by the Centre.

Table 2

European Monitoring Centre on Racism and Xenophobia — Implementation of the budget for the financial year 2004

| (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 | Available appropriations
  (2004 budget and financial year 2003) |
| entered | committed | paid | carried over | cancelled | commitments outstanding | paid | cancelled | appropriations | committed | paid | carried over | cancelled |
| Community subsidies | 7 800 | 5 675 | Title I
  Staff | 3 316 | 2 730 | 2 645 | 85 | 586 | 64 | 47 | 17 | 3 380 | 2 794 | 2 692 | 85 | 604 |
| Other revenue | 100 | 558 | Title II
  Administration | 746 | 484 | 447 | 37 | 262 | 51 | 34 | 17 | 797 | 535 | 481 | 37 | 279 |
| Title III
  Operating activities | 3 838 | 3 097 | 2 352 | 745 | 741 | 1 162 | 955 | 207 | 5 000 | 4 259 | 3 307 | 745 | 947 |
| Total | 7 900 | 6 233 | Total | 7 900 | 6 311 | 5 444 | 867 | 1 589 | 1 277 | 1 036 | 241 | 9 177 | 7 588 | 6 480 | 867 | 1 830 |
| NB: Totals may include differences due to rounding.

  Source: Data supplied by the Centre — This table summarises the data supplied by the Centre in its annual accounts. |

(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

Available appropriations

(2004 budget and financial year 2003)

entered

committed

paid

carried over

cancelled

commitments outstanding

paid

cancelled

appropriations

committed

paid

carried over

cancelled

Community subsidies

7 800

5 675

Title I

Staff

3 316

2 730

2 645

85

586

64

47

17

3 380

2 794

2 692

85

604

Other revenue

100

558

Title II

Administration

746

484

447

37

262

51

34

17

797

535

481

37

279

Title III

Operating activities

3 838

3 097

2 352

745

741

1 162

955

207

5 000

4 259

3 307

745

947

Total

7 900

6 233

Total

7 900

6 311

5 444

867

1 589

1 277

1 036

241

9 177

7 588

6 480

867

1 830

NB: Totals may include differences due to rounding.

Source: Data supplied by the Centre — This table summarises the data supplied by the Centre in its annual accounts.

Table 3

European Monitoring Centre on Racism and Xenophobia — Revenue and expenditure account for the financial years 2004 and 2003

| (1000 euro) |
| --- |
| | 2004 | 2003 |
| Revenue |
| Community subsidies | 5 675 | 7 318 |
| Other revenue | 455 | 374 |
| Financial revenue | 21 | 21 |
| Phare subsidy | 82 | 676 |
| Total revenue (a) | 6 233 | 8 389 |
| Expenditure |
| Staff — Title I of the budget |
| Payments | 2 645 | 2 618 |
| Appropriations carried over | 85 | 64 |
| Administration — Title II of the budget |
| Payments | 447 | 412 |
| Appropriations carried over | 37 | 51 |
| Operating activities — Title III of the budget |
| Payments | 2 352 | 1 678 |
| Appropriations carried over | 745 | 1 162 |
| Assigned revenue (Phare and other) |
| Payments | 7 | 376 |
| Appropriations carried over | 0 | 694 |
| Total expenditure (b) | 6 318 | 7 055 |
| Outturn for the financial year (a – b) | –85 | 1 334 |
| Balance carried over from the previous financial year | 98 | –1 579 |
| Appropriations carried over, cancelled | 241 | 301 |
| Appropriations for re-use from the previous financial year, not used | 0 | 37 |
| Amounts due written off | –23 | 0 |
| Exchange-rate differences | 0 | 5 |
| Balance for the financial year | 231 | 98 |
| NB: Totals may include differences due to rounding.

  Source: Data supplied by the Centre — This table summarises the data supplied by the Centre in its annual accounts. |

(1000 euro)

2004

2003

Revenue

Community subsidies

5 675

7 318

Other revenue

455

374

Financial revenue

21

21

Phare subsidy

82

676

Total revenue (a)

6 233

8 389

Expenditure

Staff — Title I of the budget

Payments

2 645

2 618

Appropriations carried over

85

64

Administration — Title II of the budget

Payments

447

412

Appropriations carried over

37

51

Operating activities — Title III of the budget

Payments

2 352

1 678

Appropriations carried over

745

1 162

Assigned revenue (Phare and other)

Payments

7

376

Appropriations carried over

0

694

Total expenditure (b)

6 318

7 055

Outturn for the financial year (a – b)

–85

1 334

Balance carried over from the previous financial year

98

–1 579

Appropriations carried over, cancelled

241

301

Appropriations for re-use from the previous financial year, not used

0

37

Amounts due written off

–23

0

Exchange-rate differences

0

5

Balance for the financial year

231

98

NB: Totals may include differences due to rounding.

Source: Data supplied by the Centre — This table summarises the data supplied by the Centre in its annual accounts.

Table 4

European Monitoring Centre on Racism and Xenophobia — Balance sheet at 31 December 2004 and 31 December 2003

| (1000 euro) |
| --- |
| Assets | 2004 | 2003 | Liabilities | 2004 | 2003 |
| Fixed assets | | | Own capital | | |
| Computer software | 82 | 72 | Own capital | 123 | 108 |
| Computer equipment | 206 | 148 | Balance for the financial year | 231 | 98 |
| Furniture and other equipment | 252 | 250 | Subtotal | 354 | 206 |
| Depreciation | – 417 | – 362 | Current liabilities | | |
| Subtotal | 123 | 108 | Automatic carry-overs of appropriations | 866 | 1 277 |
| Current assets | | | Automatic carry-overs of assigned revenue and Phare | 41 | 694 |
| Community subsidies | 0 | 23 | Taxes and other related expenditure | 113 | 454 |
| Recoverable VAT | 159 | 456 | EC Commission | 214 | 0 |
| Phare subsidy | 0 | 169 | Sundry accounts payable | 111 | 275 |
| Sundry accounts receivable | 138 | 77 | Subtotal | 1 345 | 2 700 |
| Subtotal | 297 | 725 | | | |
| Cash accounts | | | | | |
| Bank accounts | 1 279 | 2 073 | | | |
| Subtotal | 1 279 | 2 073 | | | |
| Total | 1 699 | 2 906 | Total | 1 699 | 2 906 |
| NB: Totals may include differences due to rounding.

  Source: Data supplied by the Centre — This table summarises the date supplied by the Centre in its annual accounts. |

(1000 euro)

Assets

2004

2003

Liabilities

2004

2003

Fixed assets

Own capital

Computer software

82

72

Own capital

123

108

Computer equipment

206

148

Balance for the financial year

231

98

Furniture and other equipment

252

250

Subtotal

354

206

Depreciation

– 417

– 362

Current liabilities

Subtotal

123

108

Automatic carry-overs of appropriations

866

1 277

Current assets

Automatic carry-overs of assigned revenue and Phare

41

694

Community subsidies

0

23

Taxes and other related expenditure

113

454

Recoverable VAT

159

456

EC Commission

214

0

Phare subsidy

0

169

Sundry accounts payable

111

275

Sundry accounts receivable

138

77

Subtotal

1 345

2 700

Subtotal

297

725

Cash accounts

Bank accounts

1 279

2 073

Subtotal

1 279

2 073

Total

1 699

2 906

Total

1 699

2 906

NB: Totals may include differences due to rounding.

Source: Data supplied by the Centre — This table summarises the date supplied by the Centre in its annual accounts.

---

THE MONITORING CENTRE'S REPLIES

| 7. | The EUMC has taken measures to reduce the level of carry-overs at the year end. The EUMC continues to improve controls so as to ensure that the amounts carried over reflect more accurately the value of outstanding obligations. |
| --- | --- |

7.

The EUMC has taken measures to reduce the level of carry-overs at the year end. The EUMC continues to improve controls so as to ensure that the amounts carried over reflect more accurately the value of outstanding obligations.

| 8. | The Internal Audit Capability has presented internal control standards to the Executive Board in February 2005, in view of their formal adoption in October 2005 after examination. A risk analysis is being carried out. The Internal Audit Capability has reviewed the existing checklists. More relevant checklists integrated into SI2 will be put in place before the end of 2005. |
| --- | --- |

8.

The Internal Audit Capability has presented internal control standards to the Executive Board in February 2005, in view of their formal adoption in October 2005 after examination. A risk analysis is being carried out. The Internal Audit Capability has reviewed the existing checklists. More relevant checklists integrated into SI2 will be put in place before the end of 2005.

| 9. | EUMC is reviewing its procedures and new ones will be issued before the end of 2005 to avoid the repetition of the situations described by the Court. |
| --- | --- |

9.

EUMC is reviewing its procedures and new ones will be issued before the end of 2005 to avoid the repetition of the situations described by the Court.

| 10. | The directly awarded contract concerned security services which were considered to be sensitive and therefore not fit for a general invitation to tender. In 2005, the EUMC has launched a call for tender in order to test this specific market. |
| --- | --- |

10.

The directly awarded contract concerned security services which were considered to be sensitive and therefore not fit for a general invitation to tender. In 2005, the EUMC has launched a call for tender in order to test this specific market.

---

| 28.12.2005 | EN | Official Journal of the European Union | C 332/105 |
| --- | --- | --- | --- |

28.12.2005

EN

Official Journal of the European Union

C 332/105

---

REPORT

on the annual accounts of the Community Plant Variety Office concerning the financial year 2004 together with the Office's replies

(2005/C 332/15)

CONTENTS

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

1-2

| 3-6 | THE COURT'S OPINION |
| --- | --- |

3-6

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

7-8

Tables 1 to 4

The Office's replies

INTRODUCTION

| 1. | The Community Plant Variety Office (hereinafter referred to as ‘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. Table 1 summarises the Office's competencies and activities on the basis of information it has supplied. |
| --- | --- |

1.

The Community Plant Variety Office (hereinafter referred to as ‘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. Table 1 summarises the Office's competencies and activities on the basis of information it has supplied.

| 2. | For information, the annual accounts drawn up by the Office for the financial year 2004 are summarised in Tables 2, 3 and 4. |
| --- | --- |

2.

For information, the annual accounts drawn up by the Office for the financial year 2004 are summarised in Tables 2, 3 and 4.

THE COURT'S OPINION

| 3. | This opinion is addressed to the Administrative Council of the Office, pursuant to Article 111 of Council Regulation (EC) No 2100/94. |
| --- | --- |

3.

This opinion is addressed to the Administrative Council of the Office, pursuant to Article 111 of Council Regulation (EC) No 2100/94.

| 4. | The Office's accounts for the financial year ended 31 December 2004 (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 its opinion 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 2004 (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 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 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 Office's accounts for the financial year ended 31 December 2004 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 opinion into question.

OBSERVATIONS

| 7. | As regards operating appropriations, the Office's budget has adopted the system of differentiated appropriations, which distinguishes between commitment appropriations and payment appropriations. However, the presentation of its accounts does not take the type of appropriations that are managed by it into consideration. |
| --- | --- |

7.

As regards operating appropriations, the Office's budget has adopted the system of differentiated appropriations, which distinguishes between commitment appropriations and payment appropriations. However, the presentation of its accounts does not take the type of appropriations that are managed by it into consideration.

| 8. | In 2004, the Office took into account for the first time the annual depreciation on its premises. However, it has not taken account of the depreciation that it ought to have made since it acquired the premises, namely, that relating to the period 2000-2003 (3). |
| --- | --- |

8.

In 2004, the Office took into account for the first time the annual depreciation on its premises. However, it has not taken account of the depreciation that it ought to have made since it acquired the premises, namely, that relating to the period 2000-2003 (3).

This report was adopted by the Court of Auditors in Luxembourg at its meeting of 5 October 2005.

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 4 July 2005 and received by the Court on 11 July 2005.

2

(3)  If the historical depreciation of the Office's building had been taken into account the total amount for depreciation entered in the balance sheet would have increased from 525 000 euro to approximately 900 000 euro. To compensate, the amount of own capital would have fallen by an equivalent amount from 2 508 000 euro to approximately 2 135 000 euro.

3

---

Table 1

Community Plant Variety Office (Angers)

| Areas of Community competence deriving from the Treaty | Competencies of the Office as defined in Council Regulation (EC) No 2100/94 of 27 July 1994 | Governance | Resources available to the Office in 2004

  (2003 data) | Products and services supplied in 2004

  (2003 data) |
| --- | --- | --- | --- | --- |
| 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

Competencies of the Office as defined in Council Regulation (EC) No 2100/94 of 27 July 1994

Governance

Resources available to the Office in 2004

(2003 data)

Products and services supplied in 2004

(2003 data)

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. |
| --- | --- |

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 and their alternates. |
| --- | --- |

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 and 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. |
| --- | --- |

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. | Control by the Commission: 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. |
| --- | --- |

4.

Control by the Commission: 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: European Court of Auditors |
| --- | --- |

5.

External control: European Court of Auditors

| 6. | Discharge given to the President by the Administrative Council |
| --- | --- |

6.

Discharge given to the President by the Administrative Council

Budget:

11,3 million eur (11,1 million eur)o, including Community contribution: 0 % (0 %)

Staff numbers as at 31 December 2004:

Number of posts in establishment plan: 38 (35)

Posts occupied: 36 (34)

+ 4 (1) other posts (auxiliary contracts, national experts on secondment, local staff, employment agency staff)

Total staff: 40 (35)

Assigned to the following duties:

operational: 16 (13)

administrative: 18 (16)

mixed: 6 (6)

Applications heard: 2 651(2 516)

Rights granted: 2 178(1 869)

Community rights in force at the end of the year: 10 191(8 764)

In an IFOP poll, 90 % of the Office's clients expressed overall satisfaction. This included 51 % who were very or extremely satisfied.

Source: Data submitted by the Office

Table 2

Community Plant Variety Office — Implementation of the budget for the financial year 2004

| (1000 euro) |
| --- |
| Revenue | Expenditure |
| Origin of revenue | Revenue entered in the final budget for the financial year | Revenue collected | Expenditure allocation | Appropriations in the final budget | Appropriations carried over from the previous financial year | Available appropriations
  (2004 budget and 2003 financial year) |
| entered | committed | paid | carried over | cancelled | outstanding commitments | paid | cancelled | carried over | appropriations | committed | paid | carried over | cancelled |
| Own revenue | 7 484 | 8 358 | Title I
  Staff | 3 733 | 3 673 | 3 635 | 38 | 60 | 28 | 28 | 0 | 0 | 3 761 | 3 701 | 3 663 | 38 | 60 |
| Administrative revenue | 15 | 30 | Title II
  Administration | 2 031 | 1 570 | 861 | 705 | 465 | 195 | 138 | 57 | 0 | 2 226 | 1 765 | 999 | 705 | 522 |
| Miscellaneous revenue | 0 | 0 | Title III
  Operating activities | 5 534 | 4 629 | 494 | 4 127 | 913 | 7 127 | 3 011 | 405 | 3 711 | 12 661 | 11 756 | 3 505 | 7 838 | 1 318 |
| Financial revenue | 350 | 370 | | | | | | | | | | | | | | | |
| Deficit reserve | 3 449 | | | | | | | | | | | | | | | | |
| Total | 11 298 | 8 758 | Total | 11 298 | 9 872 | 4 990 | 4 870 | 1 438 | 7 350 | 3 177 | 462 | 3 711 | 18 648 | 17 222 | 8 167 | 8 581 | 1 900 |
| NB: Variations in totals are due to the effects of rounding.

  Source: The Office's data — This table summarises the data provided by the Office in its annual accounts. |

(1000 euro)

Revenue

Expenditure

Origin of revenue

Revenue entered in the final budget for the financial year

Revenue collected

Expenditure allocation

Appropriations in the final budget

Appropriations carried over from the previous financial year

Available appropriations

(2004 budget and 2003 financial year)

entered

committed

paid

carried over

cancelled

outstanding commitments

paid

cancelled

carried over

appropriations

committed

paid

carried over

cancelled

Own revenue

7 484

8 358

Title I

Staff

3 733

3 673

3 635

38

60

28

28

0

0

3 761

3 701

3 663

38

60

Administrative revenue

15

30

Title II

Administration

2 031

1 570

861

705

465

195

138

57

0

2 226

1 765

999

705

522

Miscellaneous revenue

0

0

Title III

Operating activities

5 534

4 629

494

4 127

913

7 127

3 011

405

3 711

12 661

11 756

3 505

7 838

1 318

Financial revenue

350

370

Deficit reserve

3 449

Total

11 298

8 758

Total

11 298

9 872

4 990

4 870

1 438

7 350

3 177

462

3 711

18 648

17 222

8 167

8 581

1 900

NB: Variations in totals are due to the effects of rounding.

Source: The Office's data — This table summarises the data provided by the Office in its annual accounts.

Table 3

Community Plant Variety Office — Revenue and expenditure account for the financial years 2004 and 2003

| (1000 euro) |
| --- |
| | 2004 | 2003 |
| Revenue |
| Own revenue | 8 358 | 8 199 |
| Miscellaneous revenue | 30 | 156 |
| Financial revenue | 371 | 401 |
| Total revenue (a) | 8 759 | 8 757 |
| Expenditure |
| Staff — Title I of the budget |
| Payments | 3 635 | 3 245 |
| Appropriations carried over | 38 | 99 |
| Administration — Title II of the budget |
| Payments | 861 | 583 |
| Appropriations carried over | 705 | 195 |
| Operating activities — Title III of the budget |
| Payments | 494 | 1 179 |
| Appropriations carried over | 4 175 | 4 863 |
| Total expenditure (b) | 9 908 | 10 164 |
| Out-turn for the financial year (a – b) | –1 149 | –1 407 |
| Balance carried over from the previous financial year | 12 825 | 13 977 |
| Appropriations carried over and cancelled | 462 | 249 |
| Exchange-rate differences | 0 | 0 |
| Future provision | 0 | 6 |
| Extraordinary income | 127 | 0 |
| Extraordinary charges | –43 | 0 |
| Balance for the financial year | 12 222 | 12 825 |
| NB: Variations in totals are due to the effects of rounding.

  Source: The Office's data — This table summarises the data provided by the Office in its annual accounts. |

(1000 euro)

2004

2003

Revenue

Own revenue

8 358

8 199

Miscellaneous revenue

30

156

Financial revenue

371

401

Total revenue (a)

8 759

8 757

Expenditure

Staff — Title I of the budget

Payments

3 635

3 245

Appropriations carried over

38

99

Administration — Title II of the budget

Payments

861

583

Appropriations carried over

705

195

Operating activities — Title III of the budget

Payments

494

1 179

Appropriations carried over

4 175

4 863

Total expenditure (b)

9 908

10 164

Out-turn for the financial year (a – b)

–1 149

–1 407

Balance carried over from the previous financial year

12 825

13 977

Appropriations carried over and cancelled

462

249

Exchange-rate differences

0

0

Future provision

0

6

Extraordinary income

127

0

Extraordinary charges

–43

0

Balance for the financial year

12 222

12 825

NB: Variations in totals are due to the effects of rounding.

Source: The Office's data — This table summarises the data provided by the Office in its annual accounts.

Table 4

Community Plant Variety Office — Balance sheet at 31 December 2004 and 31 December 2003

| (1000 euro) |
| --- |
| Assets | 2004 | 2003 | Liabilities | 2004 | 2003 |
| Fixed assets | | | Own capital | | |
| Computer software | 110 | 77 | Own capital | 2 508 | 2 538 |
| Buildings | 2 460 | 2 427 | | | |
| Computer equipment | 260 | 218 | Reserve | 12 825 | 13 977 |
| Equipment and furniture | 203 | 161 | Balance for the financial year | – 603 | –1 152 |
| Depreciation | – 525 | – 345 | Subtotal | 14 730 | 15 363 |
| | | | Current liabilities | | |
| | | | Outstanding commitments in respect of carry-overs from 2002 | 3 711 | 2 145 |
| Subtotal | 2 508 | 2 538 | Automatic carry-overs | 4 869 | 5 156 |
| Indemnities and guarantees | 3 | 3 | Suppliers | 0 | 1 |
| Current assets | | | Advances from customers & sundry accounts payable | 125 | 194 |
| Recovery orders | 19 | 3 | VAT to be paid | 216 | 216 |
| Sundry accounts receivable | 11 | 29 | Deductions from salaries | 83 | 9 |
| VAT to be recovered | 434 | 371 | Subtotal | 9 004 | 7 721 |
| Subtotal | 464 | 403 | | | |
| Cash accounts | | | | | |
| Banks | 20 684 | 20 065 | | | |
| Imprest account | 75 | 75 | | | |
| Subtotal | 20 759 | 20 140 | | | |
| Total | 23 734 | 23 084 | Total | 23 734 | 23 084 |
| NB: Variations in totals are due to the effects of rounding.

  Source: The Office's data — This table summarises the data provided by the Office in its annual accounts. |

(1000 euro)

Assets

2004

2003

Liabilities

2004

2003

Fixed assets

Own capital

Computer software

110

77

Own capital

2 508

2 538

Buildings

2 460

2 427

Computer equipment

260

218

Reserve

12 825

13 977

Equipment and furniture

203

161

Balance for the financial year

– 603

–1 152

Depreciation

– 525

– 345

Subtotal

14 730

15 363

Current liabilities

Outstanding commitments in respect of carry-overs from 2002

3 711

2 145

Subtotal

2 508

2 538

Automatic carry-overs

4 869

5 156

Indemnities and guarantees

3

3

Suppliers

0

1

Current assets

Advances from customers & sundry accounts payable

125

194

Recovery orders

19

3

VAT to be paid

216

216

Sundry accounts receivable

11

29

Deductions from salaries

83

9

VAT to be recovered

434

371

Subtotal

9 004

7 721

Subtotal

464

403

Cash accounts

Banks

20 684

20 065

Imprest account

75

75

Subtotal

20 759

20 140

Total

23 734

23 084

Total

23 734

23 084

NB: Variations in totals are due to the effects of rounding.

Source: The Office's data — This table summarises the data provided by the Office in its annual accounts.

---

THE OFFICE'S REPLIES

| 7. | The necessary changes will be made to the presentation of the Office's budgetary accounts. |
| --- | --- |

7.

The necessary changes will be made to the presentation of the Office's budgetary accounts.

| 8. | The necessary corrections will be made within the framework of the move to accrual accounting, which must be carried out for the financial year 2005. |
| --- | --- |

8.

The necessary corrections will be made within the framework of the move to accrual accounting, which must be carried out for the financial year 2005.

---

| 28.12.2005 | EN | Official Journal of the European Union | C 332/112 |
| --- | --- | --- | --- |

28.12.2005

EN

Official Journal of the European Union

C 332/112

---

REPORT

on the annual accounts of the Office for Harmonization in the Internal Market for the financial year 2004 together with the Office's replies

(2005/C 332/16)

CONTENTS

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

1-2

| 3-6 | THE COURT'S OPINION |
| --- | --- |

3-6

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

7-10

Tables 1 to 4

The Office's replies

INTRODUCTION

| 1. | The Office for Harmonization in the Internal Market (hereinafter called ‘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. The Office's duties and activities are summarised, on the basis of information submitted by the Office, in Table 1. |
| --- | --- |

1.

The Office for Harmonization in the Internal Market (hereinafter called ‘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. The Office's duties and activities are summarised, on the basis of information submitted by the Office, in Table 1.

| 2. | For information, the annual accounts drawn up by the Office for the financial year 2004 are summarised in Tables 2, 3 and 4. |
| --- | --- |

2.

For information, the annual accounts drawn up by the Office for the financial year 2004 are summarised in Tables 2, 3 and 4.

THE COURT'S OPINION

| 3. | This opinion is addressed to the Office's Budget Committee pursuant to Article 137 of Council Regulation (EC) No 40/94. |
| --- | --- |

3.

This opinion 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 2004 (2) were drawn up by its President, pursuant to Article 119 of Regulation (EC) No 40/94, 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 Office's accounts for the financial year ended 31 December 2004 (2) were drawn up by its President, pursuant to Article 119 of Regulation (EC) No 40/94, 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 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 Office's accounts for the financial year ended 31 December 2004, in all material respects, are 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 opinion into question.

OBSERVATIONS

| 7. | The revenue received between 21 and 31 December 2004, i.e. 2,3 million euro, was entered in the accounts as revenue for the financial year 2005, in breach of the principle of the annual nature of the budget. |
| --- | --- |

7.

The revenue received between 21 and 31 December 2004, i.e. 2,3 million euro, was entered in the accounts as revenue for the financial year 2005, in breach of the principle of the annual nature of the budget.

| 8. | In its 2003 Annual Report (3), the Court drew attention to the need for rigorous evaluation of appropriations to be carried over. The checks carried out for the financial year 2004 showed that a total of 515 000 euro was carried over unnecessarily, which also conflicts with the principle of the annual nature of the budget. |
| --- | --- |

8.

In its 2003 Annual Report (3), the Court drew attention to the need for rigorous evaluation of appropriations to be carried over. The checks carried out for the financial year 2004 showed that a total of 515 000 euro was carried over unnecessarily, which also conflicts with the principle of the annual nature of the budget.

| 9. | The Office has not made provision in its 2004 balance sheet for two legal disputes, the potential financial impact of which cannot be considered negligible. |
| --- | --- |

9.

The Office has not made provision in its 2004 balance sheet for two legal disputes, the potential financial impact of which cannot be considered negligible.

| 10. | There are still failings in the inventory system (4). The lists of assets entered in the accounts as fixed assets had not been reconciled with the inventories, and discrepancies were found. Beginning in 2004 the Office includes computer licences and software in its fixed assets. However, the corresponding fixed assets have been understated by some 550 000 euro as a result of the use of incorrect criteria for determining the value of the computer licences and software. |
| --- | --- |

10.

There are still failings in the inventory system (4). The lists of assets entered in the accounts as fixed assets had not been reconciled with the inventories, and discrepancies were found. Beginning in 2004 the Office includes computer licences and software in its fixed assets. However, the corresponding fixed assets have been understated by some 550 000 euro as a result of the use of incorrect criteria for determining the value of the computer licences and software.

This report was adopted by the Court of Auditors in Luxembourg at its meeting of 5 October 2005.

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 2005 and received by the Court on 29 June 2005.

2

(3)  Paragraph 7 of the Report concerning the financial year 2003 (OJ C 324, 30.12.2004, p. 107).

3

(4)  Paragraph 10 of the Report concerning the financial year 2003 (OJ C 324, 30.12.2004, p. 107).

4

---

Table 1

Office for Harmonization in the Internal Market (Alicante)

| Area of Community competence deriving from the Treaty | Competence of the Office as specified in Council Regulation (EC) No 40/94 of 20 December 1993 | Governance | Resources available to the Office

  (2003 data) | Products and services supplied in 2004

  (2003 data) |
| --- | --- | --- | --- | --- |
| 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

Competence of the Office as specified in Council Regulation (EC) No 40/94 of 20 December 1993

Governance

Resources available to the Office

(2003 data)

Products and services supplied in 2004

(2003 data)

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 |
| --- | --- | --- |

1.

Administrative Board

—

One representative of each Member State

| — | One representative of the Commission |
| --- | --- |

—

One representative of the Commission

| — | 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 |
| --- | --- | --- |

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 |
| --- | --- | --- |

3.

Budget Committee

—

One representative of each Member State and one representative of the Commission and their alternates

| — | To adopt the budget and the financial regulation, grant discharge to the President and determine the cost of search reports |
| --- | --- |

—

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; |
| --- | --- | --- |

4.

Decisions in connection with procedures

Decisions are taken by:

(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

  European Court of Auditors |
| --- | --- |

5.

External audit

European Court of Auditors

| 6. | Discharge authority

  The Office's Budget Committee |
| --- | --- |

6.

Discharge authority

The Office's Budget Committee

Final budget

190 million euro (157 million euro). Community contribution: 0 % (0 %)

Staff numbers as at 31 December 2004

Number of posts in establishment plan: 675 (675)

Posts occupied: 648 (650)

+ 41 (31) other staff (auxiliary contracts, seconded national experts, local employees and temporary replacements)

Total staff: 689 (681)

Assigned to the following duties:

| — | operational: 524 (423) |
| --- | --- |

—

operational: 524 (423)

| — | administrative: 165 (245) |
| --- | --- |

—

administrative: 165 (245)

| — | mixed: 0 (13) |
| --- | --- |

—

mixed: 0 (13)

Trade marks

Number of applications: 59 592(57 637)

Number of registrations: 31 310(34 290)

Number of cases of oppositions: 10 773(9 929)

Number of cases settled: 9 172(9 396)

Appeals to the Boards of Appeal: 1 208(719)

Average time for registration (excluding opposition or appeal):

| — | before publication: 12 months (12 months) |
| --- | --- |

—

before publication: 12 months (12 months)

| — | between publication and registration: 6 months (6 months) |
| --- | --- |

—

between publication and registration: 6 months (6 months)

Designs

Designs received: 55 000(37 084)

Designs registered: 57 765(24 801)

Source: Information submitted by the Office.

Table 2

Office for Harmonization in the Internal Market — Implementation of the budget for the financial year 2004

| (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 available (2004 budget and financial year 2003) |
| entered | committed | paid | carried over | cancelled | commitments outstanding | paid | cancelled | appropriations | committed | paid | carried over | cancelled |
| Fees | 113 838 | 126 308 | Title I
  Staff | 58 174 | 55 100 | 53 665 | 1 001 | 3 508 | 1 169 | 793 | 375 | 59 343 | 56 269 | 54 458 | 1 001 | 3 884 |
| Other revenue | 3 933 | 4 347 | Title II
  Administration | 29 625 | 27 232 | 18 324 | 8 890 | 2 410 | 7 891 | 7 111 | 780 | 37 516 | 35 123 | 25 436 | 8 890 | 3 190 |
| Outturn for the previous financial year | 72 353 | 72 353 | Title III
  Operating activities | 40 870 | 32 795 | 16 455 | 16 323 | 8 092 | 9 262 | 8 589 | 673 | 50 132 | 42 057 | 25 044 | 16 323 | 8 765 |
| Title X
  Reserve | 61 455 | 0 | 0 | 0 | 61 455 | 0 | 0 | 0 | 61 455 | 0 | 0 | 0 | 61 455 |
| Total | 190 124 | 203 008 | Total | 190 124 | 115 127 | 88 444 | 26 214 | 75 465 | 18 322 | 16 493 | 1 828 | 208 446 | 133 449 | 104 938 | 26 214 | 77 293 |
| NB: Variations in totals are due to the effects of rounding.

  Source: Office data — This table summarises the data supplied by the Office in its annual accounts. |

(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 available (2004 budget and financial year 2003)

entered

committed

paid

carried over

cancelled

commitments outstanding

paid

cancelled

appropriations

committed

paid

carried over

cancelled

Fees

113 838

126 308

Title I

Staff

58 174

55 100

53 665

1 001

3 508

1 169

793

375

59 343

56 269

54 458

1 001

3 884

Other revenue

3 933

4 347

Title II

Administration

29 625

27 232

18 324

8 890

2 410

7 891

7 111

780

37 516

35 123

25 436

8 890

3 190

Outturn for the previous financial year

72 353

72 353

Title III

Operating activities

40 870

32 795

16 455

16 323

8 092

9 262

8 589

673

50 132

42 057

25 044

16 323

8 765

Title X

Reserve

61 455

0

0

0

61 455

0

0

0

61 455

0

0

0

61 455

Total

190 124

203 008

Total

190 124

115 127

88 444

26 214

75 465

18 322

16 493

1 828

208 446

133 449

104 938

26 214

77 293

NB: Variations in totals are due to the effects of rounding.

Source: Office data — This table summarises the data supplied by the Office in its annual accounts.

Table 3

Office for Harmonization in the Internal Market — Revenue and expenditure account for the financial years 2004 and 2003

| (1000 euro) |
| --- |
| | 2004 | 2003 |
| Revenue |
| Own revenue | 127 465 | 107 056 |
| Financial revenue | 3 190 | 3 460 |
| Total revenue (a) | 130 655 | 110 516 |
| Budgetary expenditure for the financial year |
| Staff — Title I of the budget |
| Payments | 53 665 | 47 416 |
| Appropriations carried over | 1 001 | 1 168 |
| Administration — Title II of the budget |
| Payments | 18 324 | 16 366 |
| Appropriations carried over | 8 890 | 7 891 |
| Operating activities — Title III of the budget |
| Payments | 16 455 | 14 137 |
| Appropriations carried over | 16 323 | 9 262 |
| Total expenditure (b) | 114 658 | 96 240 |
| Outturn for the financial year (a – b) | 15 997 | 14 276 |
| Other expenditure/provisions for the year |
| Provision for procedural expenditure | 1 398 | 1 094 |
| Subtotal | 1 398 | 1 094 |
| Balance carried over from the previous financial year | 72 353 | 55 368 |
| Appropriations carried over and cancelled | 1 828 | 1 506 |
| Sums for re-use from the previous financial year not used | 0 | 115 |
| Exchange-rate differences and extraordinary revenue | –7 | –6 |
| Balance for the financial year | 91 569 | 72 353 |
| NB: Variations in totals are due to the effects of rounding.

  Source: Office data — This table summarises the data supplied by the Office in its annual accounts. |

(1000 euro)

2004

2003

Revenue

Own revenue

127 465

107 056

Financial revenue

3 190

3 460

Total revenue (a)

130 655

110 516

Budgetary expenditure for the financial year

Staff — Title I of the budget

Payments

53 665

47 416

Appropriations carried over

1 001

1 168

Administration — Title II of the budget

Payments

18 324

16 366

Appropriations carried over

8 890

7 891

Operating activities — Title III of the budget

Payments

16 455

14 137

Appropriations carried over

16 323

9 262

Total expenditure (b)

114 658

96 240

Outturn for the financial year (a – b)

15 997

14 276

Other expenditure/provisions for the year

Provision for procedural expenditure

1 398

1 094

Subtotal

1 398

1 094

Balance carried over from the previous financial year

72 353

55 368

Appropriations carried over and cancelled

1 828

1 506

Sums for re-use from the previous financial year not used

0

115

Exchange-rate differences and extraordinary revenue

–7

–6

Balance for the financial year

91 569

72 353

NB: Variations in totals are due to the effects of rounding.

Source: Office data — This table summarises the data supplied by the Office in its annual accounts.

Table 4

Office for Harmonization in the Internal Market — Balance sheet at 31 December 2004 and 31 December 2003

| (1000 euro) |
| --- |
| Assets | 2004 | 2003 | Liabilities | 2004 | 2003 |
| Fixed assets | | | Fixed capital | | |
| Buildings | 27 915 | 26 747 | Own capital | 27 656 | 27 920 |
| Equipment and furniture | 3 800 | 3 828 | Balance for the financial year | 91 569 | 72 353 |
| Transport equipment | 97 | 115 | Subtotal | 119 225 | 100 273 |
| Computer equipment | 12 606 | 11 241 | Long-term debt | | |
| Intangible assets | 373 | 24 | Long-term creditors | 25 | 24 |
| Depreciation | –17 135 | –14 035 | Subtotal | 25 | 24 |
| Subtotal | 27 656 | 27 920 | Current liabilities | | |
| Current assets | | | Automatic carry-overs of appropriations | 26 214 | 18 322 |
| Suppliers and missions | 173 | 200 | Advances from clients | 26 582 | 29 395 |
| Sundry accounts receivable | 90 | 107 | Amount outstanding | 37 | 52 |
| Subtotal | 263 | 307 | Sundry accounts payable | 228 | 757 |
| Cash accounts | | | Provision for procedural expenditure | 12 246 | 13 644 |
| Banks | 156 406 | 134 239 | Subtotal | 65 307 | 62 170 |
| Cash | 232 | 1 | | | |
| Subtotal | 156 638 | 134 240 | | | |
| Total | 184 557 | 162 467 | Total | 184 557 | 162 467 |
| NB: Variations in totals are due to the effects of rounding.

  Source: Office data — This table summarises the data supplied by the Office in its annual accounts. |

(1000 euro)

Assets

2004

2003

Liabilities

2004

2003

Fixed assets

Fixed capital

Buildings

27 915

26 747

Own capital

27 656

27 920

Equipment and furniture

3 800

3 828

Balance for the financial year

91 569

72 353

Transport equipment

97

115

Subtotal

119 225

100 273

Computer equipment

12 606

11 241

Long-term debt

Intangible assets

373

24

Long-term creditors

25

24

Depreciation

–17 135

–14 035

Subtotal

25

24

Subtotal

27 656

27 920

Current liabilities

Current assets

Automatic carry-overs of appropriations

26 214

18 322

Suppliers and missions

173

200

Advances from clients

26 582

29 395

Sundry accounts receivable

90

107

Amount outstanding

37

52

Subtotal

263

307

Sundry accounts payable

228

757

Cash accounts

Provision for procedural expenditure

12 246

13 644

Banks

156 406

134 239

Subtotal

65 307

62 170

Cash

232

1

Subtotal

156 638

134 240

Total

184 557

162 467

Total

184 557

162 467

NB: Variations in totals are due to the effects of rounding.

Source: Office data — This table summarises the data supplied by the Office in its annual accounts.

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THE OFFICE'S REPLIES

| 7. | The problem highlighted by the Court was due to the constraints of the computer system used. The implementation of the new general accounting system should prevent this situation from recurring. |
| --- | --- |

7.

The problem highlighted by the Court was due to the constraints of the computer system used. The implementation of the new general accounting system should prevent this situation from recurring.

| 8. | The Office will continue its efforts in this domain. To this end, for the close of the financial year 2005, measures have already been taken to improve the evaluation of any carry-overs required. |
| --- | --- |

8.

The Office will continue its efforts in this domain. To this end, for the close of the financial year 2005, measures have already been taken to improve the evaluation of any carry-overs required.

| 9. | The Office takes note of the Court's observation. In one case, the Office believes that when the accounts were closed it was not in a position to assess the probability of having to pay compensation. |
| --- | --- |

9.

The Office takes note of the Court's observation. In one case, the Office believes that when the accounts were closed it was not in a position to assess the probability of having to pay compensation.

| 10. | Since February 2005 a system integrating the inventory and the accounting systems has been in place. This has enabled the inventory and the fixed-assets accounts to be reconciled fully. Since 2005, the Office has been applying IPSAS standards for the valuation of computer licences and software. |
| --- | --- |

10.

Since February 2005 a system integrating the inventory and the accounting systems has been in place. This has enabled the inventory and the fixed-assets accounts to be reconciled fully. Since 2005, the Office has been applying IPSAS standards for the valuation of computer licences and software.

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