# C_2007309EN.01002401.xml

| 19.12.2007 | EN | Official Journal of the European Union | C 309/24 |
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19.12.2007

EN

Official Journal of the European Union

C 309/24

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REPORT

REPORT

on the annual accounts of the European Environment Agency for the financial year 2006 together with the Agency's replies

(2007/C 309/05)

CONTENTS

| 1-2 | INTRODUCTION |
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1-2

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

| 7-8 | OBSERVATIONS |
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7-8

Tables 1 to 4

The Agency's replies

The Agency's replies

INTRODUCTION

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

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

1

| 2. | Table 1 summarises the Agency's competences and activities. Key data summarised from the financial statements drawn up by the Agency for the financial year 2006 is presented in Tables 2, 3 and 4 for information purposes. |
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2.

Table 1 summarises the Agency's competences and activities. Key data summarised from the financial statements drawn up by the Agency for the financial year 2006 is presented in Tables 2, 3 and 4 for information purposes.

Table 1

Tables 2, 3 and 4

STATEMENT OF ASSURANCE

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

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

2

| 4. | The Agency's accounts for the financial year ended 31 December 2006 (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. |
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4.

The Agency's accounts for the financial year ended 31 December 2006 (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.

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

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

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

  Reliability of the accountsThe Agency's accounts for the financial year ended 31 December 2006 are, in all material respects, reliable.Legality and regularity of the underlying transactionsThe transactions underlying the Agency's annual accounts, taken as a whole, are legal and regular.The observations which follow do not call the Court's Statement into question. |
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6.

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

Reliability of the accountsThe Agency's accounts for the financial year ended 31 December 2006 are, in all material respects, reliable.Legality and regularity of the underlying transactionsThe transactions underlying the Agency's annual accounts, taken as a whole, are legal and regular.The observations which follow do not call the Court's Statement into question.

Reliability of the accountsThe Agency's accounts for the financial year ended 31 December 2006 are, in all material respects, reliable.Legality and regularity of the underlying transactionsThe transactions underlying the Agency's annual accounts, taken as a whole, are legal and regular.The observations which follow do not call the Court's Statement into question.

OBSERVATIONS

| 7. | More than 30 % of the commitments for the year had to be carried forward. This proportion reached more than 50 % for operational expenditure (Title III and assigned revenue). Some of the carryovers were not justified: during the last two months of 2006, the Agency made commitments of 1,3 million euro for which the corresponding payment appropriations were carried forward to 2007. An audit of a sample (4) of these carryovers showed that all of them concerned activities to be performed in 2007. Thus, the budgetary principle of annuality was not strictly applied. |
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7.

More than 30 % of the commitments for the year had to be carried forward. This proportion reached more than 50 % for operational expenditure (Title III and assigned revenue). Some of the carryovers were not justified: during the last two months of 2006, the Agency made commitments of 1,3 million euro for which the corresponding payment appropriations were carried forward to 2007. An audit of a sample (4) of these carryovers showed that all of them concerned activities to be performed in 2007. Thus, the budgetary principle of annuality was not strictly applied.

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| 8. | In breach of the principle of segregation of duties, the same authorising officer by sub delegation not only performed ex-ante checks but also managed access rights to the IT system for budgetary accounting. |
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8.

In breach of the principle of segregation of duties, the same authorising officer by sub delegation not only performed ex-ante checks but also managed access rights to the IT system for budgetary accounting.

ex-ante

This report was adopted by the Court of Auditors in Luxembourg at its meeting of 27 September 2007.

For the Court of Auditors

Hubert WEBER

President

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(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 29 May 2007 and received by the Court on 3 July 2007.

3

(4)  Value of the sample: approximately 500 000 euro.

4

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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

  (2005) | Main products and services supplied in 2006 |
| --- | --- | --- | --- | --- |
| 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

  To set up a European environment information and observation network to provide the Community and the Member States with objective, reliable and comparable information at European level enabling them to:






  (a) | take the requisite measures 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

(2005)

Main products and services supplied in 2006

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

To set up a European environment information and observation network to provide the Community and the Member States with objective, reliable and comparable information at European level enabling them to:

(a)

take the requisite measures to protect the environment;

| (b) | assess the results of such measures; |
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(b)

assess the results of such measures;

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

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

Tasks

| — | To provide the Community and the Member States with the objective information necessary for framing and implementing sound and effective environmental policies; |
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—

To provide the Community and the Member States with the objective information necessary for framing and implementing sound and effective environmental policies;

| — | to record, collate and assess data on the state of the environment and to report on the quality of and pressures on the environment within the territory of the Community; |
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—

to record, collate and assess data on the state of the environment and to report on the quality of and pressures on the environment within the territory of the Community;

| — | to help ensure that environmental data at European level are comparable and, if necessary, to encourage by appropriate means improved harmonisation of methods of measurement; |
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—

to help ensure that environmental data at European level are comparable and, if necessary, to encourage by appropriate means improved harmonisation of methods of measurement;

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

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

| — | to publish a report on the state of, trends in and prospects for the environment every five years; |
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—

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

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

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

| — | to stimulate the development of methods of assessing the cost of damage to the environment and the costs of environmental preventive, protection and restoration policies. |
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—

to stimulate the development of methods of assessing the cost of damage to the environment and the costs of environmental preventive, protection and restoration policies.

1.   Management Board

Consisting of:

| — | one representative per Member State, |
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—

one representative per Member State,

| — | two representatives of the Commission, |
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—

two representatives of the Commission,

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

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.

5.   External audit

European Court of Auditors.

6.   Discharge Authority

Parliament on a recommendation by the Council.

Final budget

37,1 million euro (32,1 million euro)

Community subsidy: 75 % (84 %).

Staff numbers at 31 December 2006

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

Posts occupied: 110 (107)

+47 (34) other posts (auxiliary contracts, seconded national experts, local and employment-agency staff)

Total staff numbers: 115 (115)

assigned to the following tasks:

| — | operational: 72 (72) |
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—

operational: 72 (72)

| — | administrative: 42 (42) |
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—

administrative: 42 (42)

| — | mixed: 1 (1) |
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—

mixed: 1 (1)

Launch of Prelude (PRospective Environmental analysis of Land Use Development in Europe).

Update of the European Pollutant Emission Register (EPER).

Publication of reports on, inter alia, transport and the environment, agriculture and the environment, energy and the environment, bioenergy, air quality, greenhouse gas emissions, the state of Europe's coasts, urban spread and the management of natural resources.

Seminars organised under the Presidency of the Council.

Assistance with data harmonisation.

Management of the Eionet (European Environment Information and Observation Network).

Source: Information supplied by the Agency.

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

Table 2

European Environment Agency (Copenhagen) — Implementation of the budget for the financial year 2006

| (1000 euro) |
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| 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 |
| entered | committed | paid | carried over | cancelled | available | paid | cancelled |
| Community subsidies | 27 650 | 27 650 | Title I
  Staff | 16 013 | 16 013 | 15 692 | 308 | 13 | 508 | 386 | 122 |
| Other subsidies | 5 264 | 5 115 | Title II
  Administration | 2 926 | 2 912 | 2 623 | 283 | 19 | 895 | 836 | 59 |
| Other revenue | 4 200 | 1 798 | Title III
  Operating activities | 13 975 | 13 971 | 8 681 | 5 290 | 4 | 4 069 | 3 671 | 398 |
| Earmarked revenue | 4 200 | 781 | 356 | 3 844 | — | 2 167 | 931 | 115 |
| Total | 37 114 | 34 563 | Total | 37 114 | 33 677 | 27 352 | 9 725 | 36 | 7 639 | 5 824 | 694 |
| Source: Data supplied by the Agency — This table summarises the data provided by the Agency in its annual accounts. Revenue collected and payments are estimated on a cash basis. |

(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

entered

committed

paid

carried over

cancelled

available

paid

cancelled

Community subsidies

27 650

27 650

Title I

Staff

16 013

16 013

15 692

308

13

508

386

122

Other subsidies

5 264

5 115

Title II

Administration

2 926

2 912

2 623

283

19

895

836

59

Other revenue

4 200

1 798

Title III

Operating activities

13 975

13 971

8 681

5 290

4

4 069

3 671

398

Earmarked revenue

4 200

781

356

3 844

—

2 167

931

115

Total

37 114

34 563

Total

37 114

33 677

27 352

9 725

36

7 639

5 824

694

Source: Data supplied by the Agency — This table summarises the data provided by the Agency in its annual accounts. Revenue collected and payments are estimated on a cash basis.

Table 3

European Environment Agency (Copenhagen) — Economic outturn account for the financial years 2006 and 2005

| (1000 euro) |
| --- |
| | 2006 | 2005 |
| Operating revenue |
| Community subsidies | 27 650 | 26 900 |
| Other subsidies | 5 673 | 5 633 |
| Other revenue (1) | 2 277 | 0 |
| Total (a) | 35 601 | 32 533 |
| Operating expenditure |
| Staff expenditure | 14 500 | 13 423 |
| Fixed asset-related expenditure | 795 | 621 |
| Other administrative expenditure | 4 843 | 4 700 |
| Operational expenditure | 15 000 | 15 618 |
| Total (b) | 35 138 | 34 363 |
| Surplus/deficit from operating activities (c = a – b) | 462 | –1 830 |
| Financial operations income (e) | 72 | 29 |
| Financial operations expenditure (f) | 7 | 7 |
| Surplus/(deficit) from non-operating activities (g = e – f) | 66 | 22 |
| Economic result for the year (h = c + g) | 528 | –1 808 |

(1000 euro)

2006

2005

Operating revenue

Community subsidies

27 650

26 900

Other subsidies

5 673

5 633

Other revenue (1)

2 277

0

Total (a)

35 601

32 533

Operating expenditure

Staff expenditure

14 500

13 423

Fixed asset-related expenditure

795

621

Other administrative expenditure

4 843

4 700

Operational expenditure

15 000

15 618

Total (b)

35 138

34 363

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

462

–1 830

Financial operations income (e)

72

29

Financial operations expenditure (f)

7

7

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

66

22

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

528

–1 808

Table 4

European Environment Agency (Copenhagen) — Balance sheet at 31 December 2006 and 2005

| (1000 euro) |
| --- |
| | 2006 | 2005 |
| Non-current assets |
| Intangible fixed assets | 330 | 456 |
| Tangible fixed assets | 1 866 | 1 649 |
| Current assets |
| Short-term pre-financing (2) | 1 151 | 598 |
| Short-term receivables | 2 611 | 1 581 |
| Long-term receivables | 494 | 482 |
| Cash and cash equivalents (3) | 6 097 | 4 491 |
| Total assets | 12 548 | 9 258 |
| Current liabilities |
| Accounts payable | 7 779 | 5 016 |
| Total liabilities | 7 779 | 5 016 |
| Net assets |
| Accumulated surplus/deficit | 4 242 | 6 050 |
| Economic result for the year | 528 | –1 808 |
| Total net assets | 4 770 | 4 242 |
| Total liabilities and net assets | 12 548 | 9 258 |

(1000 euro)

2006

2005

Non-current assets

Intangible fixed assets

330

456

Tangible fixed assets

1 866

1 649

Current assets

Short-term pre-financing (2)

1 151

598

Short-term receivables

2 611

1 581

Long-term receivables

494

482

Cash and cash equivalents (3)

6 097

4 491

Total assets

12 548

9 258

Current liabilities

Accounts payable

7 779

5 016

Total liabilities

7 779

5 016

Net assets

Accumulated surplus/deficit

4 242

6 050

Economic result for the year

528

–1 808

Total net assets

4 770

4 242

Total liabilities and net assets

12 548

9 258

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(1)  Recovery of building taxes 2000-2004 (905 000 euro).

(2)  Primarily pre-financing given to European Topic Centres.

(3)  Recovery of building taxes 2000-2004 (905 000 euro).

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THE AGENCY 'S REPLIES

The higher carry-over rate into 2007 was mainly caused by extraordinary events in 2006 which required us to delay interim payments to topic centres until we were satisfied with deliveries. The late commitments mentioned were due to the obligation to have license agreements in place before 1 January each year to maintain continuity and to the time required to define and negotiate costs and time schedules for complex, new work. The Agency will continue its efforts to reduce the carry-over rate in this context.

The risks linked to the situation described have been evaluated by the management and mitigating controls put in place. The remaining risk level is considered as acceptable. This situation will be re-evaluated within a review of sensitive posts to be performed in mid-2007.

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