# C_2016380EN.01014701.xml

| 14.10.2016 | EN | Official Journal of the European Union | C 380/147 |
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THE COURT’S STATEMENT OF ASSURANCE PROVIDED TO THE EUROPEAN PARLIAMENT AND THE COUNCIL — INDEPENDENT AUDITOR’S REPORT

(2016/C 380/02)

| I.
We have audited:
(a)
the consolidated accounts of the European Union which comprise the consolidated financial statements( 1 ) and the aggregated reports on the implementation of the budget( 2 ) for the financial year ended 31 December 2015, approved by the Commission on 11 July 2016, and (b)
the legality and regularity of the transactions underlying those accounts, as required by Article 287 of the Treaty on the Functioning of the European Union (TFEU). Management’s responsibility
II.
In accordance with Articles 317 to 318 of the TFEU and the Financial Regulation, the Commission is responsible for the preparation and fair presentation of the consolidated accounts of the European Union on the basis of internationally accepted accounting standards for the public sector and for the legality and regularity of the transactions underlying them. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of financial statements that are free from material misstatement, whether due to fraud or error. The Commission bears the ultimate responsibility for the legality and regularity of the transactions underlying the accounts of the European Union (Article 317 of the TFEU). Auditor’s responsibility
III.
Our responsibility is to provide, on the basis of our audit, the European Parliament and the Council with a statement of assurance as to the reliability of the accounts and the legality and regularity of the transactions underlying them. We conducted our audit in accordance with the IFAC International Standards on Auditing and Codes of Ethics and the INTOSAI International Standards of Supreme Audit Institutions. These standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance as to whether the consolidated accounts of the European Union are free from material misstatement and the transactions underlying them are legal and regular. IV.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated accounts and the legality and the regularity of the transactions underlying them. The procedures selected depend on the auditor’s judgment, including an assessment of the risks of material misstatement of the consolidated accounts and of material non-compliance of the underlying transactions with the requirements of the legal framework of the European Union, whether due to fraud or error. In making those risk assessments, internal control relevant to the preparation and fair presentation of the consolidated accounts and legality and regularity of underlying transactions, is considered in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made, as well as evaluating the overall presentation of the consolidated accounts. | | I. | We have audited:
(a)
the consolidated accounts of the European Union which comprise the consolidated financial statements( 1 ) and the aggregated reports on the implementation of the budget( 2 ) for the financial year ended 31 December 2015, approved by the Commission on 11 July 2016, and (b)
the legality and regularity of the transactions underlying those accounts, as required by Article 287 of the Treaty on the Functioning of the European Union (TFEU). | (a) | the consolidated accounts of the European Union which comprise the consolidated financial statements( 1 ) and the aggregated reports on the implementation of the budget( 2 ) for the financial year ended 31 December 2015, approved by the Commission on 11 July 2016, and | (b) | the legality and regularity of the transactions underlying those accounts, | | II. | In accordance with Articles 317 to 318 of the TFEU and the Financial Regulation, the Commission is responsible for the preparation and fair presentation of the consolidated accounts of the European Union on the basis of internationally accepted accounting standards for the public sector and for the legality and regularity of the transactions underlying them. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of financial statements that are free from material misstatement, whether due to fraud or error. The Commission bears the ultimate responsibility for the legality and regularity of the transactions underlying the accounts of the European Union (Article 317 of the TFEU). | | III. | Our responsibility is to provide, on the basis of our audit, the European Parliament and the Council with a statement of assurance as to the reliability of the accounts and the legality and regularity of the transactions underlying them. We conducted our audit in accordance with the IFAC International Standards on Auditing and Codes of Ethics and the INTOSAI International Standards of Supreme Audit Institutions. These standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance as to whether the consolidated accounts of the European Union are free from material misstatement and the transactions underlying them are legal and regular. | | IV. | An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated accounts and the legality and the regularity of the transactions underlying them. The procedures selected depend on the auditor’s judgment, including an assessment of the risks of material misstatement of the consolidated accounts and of material non-compliance of the underlying transactions with the requirements of the legal framework of the European Union, whether due to fraud or error. In making those risk assessments, internal control relevant to the preparation and fair presentation of the consolidated accounts and legality and regularity of underlying transactions, is considered in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made, as well as evaluating the overall presentation of the consolidated accounts. |
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| | I. | We have audited:
(a)
the consolidated accounts of the European Union which comprise the consolidated financial statements( 1 ) and the aggregated reports on the implementation of the budget( 2 ) for the financial year ended 31 December 2015, approved by the Commission on 11 July 2016, and (b)
the legality and regularity of the transactions underlying those accounts, as required by Article 287 of the Treaty on the Functioning of the European Union (TFEU). | (a) | the consolidated accounts of the European Union which comprise the consolidated financial statements( 1 ) and the aggregated reports on the implementation of the budget( 2 ) for the financial year ended 31 December 2015, approved by the Commission on 11 July 2016, and | (b) | the legality and regularity of the transactions underlying those accounts, | | | | | | | | | | |
| (a) | the consolidated accounts of the European Union which comprise the consolidated financial statements( 1 ) and the aggregated reports on the implementation of the budget( 2 ) for the financial year ended 31 December 2015, approved by the Commission on 11 July 2016, and | | | | | | | | | | | | | | | |
| (b) | the legality and regularity of the transactions underlying those accounts, | | | | | | | | | | | | | | | |
| | II. | In accordance with Articles 317 to 318 of the TFEU and the Financial Regulation, the Commission is responsible for the preparation and fair presentation of the consolidated accounts of the European Union on the basis of internationally accepted accounting standards for the public sector and for the legality and regularity of the transactions underlying them. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of financial statements that are free from material misstatement, whether due to fraud or error. The Commission bears the ultimate responsibility for the legality and regularity of the transactions underlying the accounts of the European Union (Article 317 of the TFEU). | | | | | | | | | | | | | | |
| | III. | Our responsibility is to provide, on the basis of our audit, the European Parliament and the Council with a statement of assurance as to the reliability of the accounts and the legality and regularity of the transactions underlying them. We conducted our audit in accordance with the IFAC International Standards on Auditing and Codes of Ethics and the INTOSAI International Standards of Supreme Audit Institutions. These standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance as to whether the consolidated accounts of the European Union are free from material misstatement and the transactions underlying them are legal and regular. | | | | | | | | | | | | | | |
| | IV. | An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated accounts and the legality and the regularity of the transactions underlying them. The procedures selected depend on the auditor’s judgment, including an assessment of the risks of material misstatement of the consolidated accounts and of material non-compliance of the underlying transactions with the requirements of the legal framework of the European Union, whether due to fraud or error. In making those risk assessments, internal control relevant to the preparation and fair presentation of the consolidated accounts and legality and regularity of underlying transactions, is considered in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made, as well as evaluating the overall presentation of the consolidated accounts. | | | | | | | | | | | | | | |

| V.
For revenue, our examination of value added tax and gross national income-based own resources takes as its starting point the relevant macroeconomic aggregates on which these are calculated, and assesses the Commission’s systems for processing these until the contributions of the Member States have been received and recorded in the consolidated accounts. For traditional own resources, we examine the accounts of the customs authorities and analyse the flow of duties until the amounts are received by the Commission and recorded in the accounts. VI.
For expenditure, we examine payment transactions when expenditure has been incurred, recorded and accepted. This examination covers all categories of payments (including those made for the purchase of assets) other than advances at the point they are made. Advance payments are examined when the recipient of funds is required to provide or provides justification for their proper use and the advance payment is cleared or becomes recoverable. VII.
We consider that the audit evidence obtained is sufficient and appropriate to provide a basis for our opinions. | | V. | For revenue, our examination of value added tax and gross national income-based own resources takes as its starting point the relevant macroeconomic aggregates on which these are calculated, and assesses the Commission’s systems for processing these until the contributions of the Member States have been received and recorded in the consolidated accounts. For traditional own resources, we examine the accounts of the customs authorities and analyse the flow of duties until the amounts are received by the Commission and recorded in the accounts. | | VI. | For expenditure, we examine payment transactions when expenditure has been incurred, recorded and accepted. This examination covers all categories of payments (including those made for the purchase of assets) other than advances at the point they are made. Advance payments are examined when the recipient of funds is required to provide or provides justification for their proper use and the advance payment is cleared or becomes recoverable. | | VII. | We consider that the audit evidence obtained is sufficient and appropriate to provide a basis for our opinions. |
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| | V. | For revenue, our examination of value added tax and gross national income-based own resources takes as its starting point the relevant macroeconomic aggregates on which these are calculated, and assesses the Commission’s systems for processing these until the contributions of the Member States have been received and recorded in the consolidated accounts. For traditional own resources, we examine the accounts of the customs authorities and analyse the flow of duties until the amounts are received by the Commission and recorded in the accounts. | | | | | | | |
| | VI. | For expenditure, we examine payment transactions when expenditure has been incurred, recorded and accepted. This examination covers all categories of payments (including those made for the purchase of assets) other than advances at the point they are made. Advance payments are examined when the recipient of funds is required to provide or provides justification for their proper use and the advance payment is cleared or becomes recoverable. | | | | | | | |
| | VII. | We consider that the audit evidence obtained is sufficient and appropriate to provide a basis for our opinions. | | | | | | | |

Reliability of the accounts

| Opinion on the reliability of the accounts
VIII.
In our opinion, the consolidated accounts of the European Union for the year ended 31 December 2015 present fairly, in all material respects, the financial position of the Union as at 31 December 2015, the results of its operations, its cash flows, and the changes in net assets for the year then ended, in accordance with the Financial Regulation and with accounting rules based on internationally accepted accounting standards for the public sector. | | VIII. | In our opinion, the consolidated accounts of the European Union for the year ended 31 December 2015 present fairly, in all material respects, the financial position of the Union as at 31 December 2015, the results of its operations, its cash flows, and the changes in net assets for the year then ended, in accordance with the Financial Regulation and with accounting rules based on internationally accepted accounting standards for the public sector. |
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| | VIII. | In our opinion, the consolidated accounts of the European Union for the year ended 31 December 2015 present fairly, in all material respects, the financial position of the Union as at 31 December 2015, the results of its operations, its cash flows, and the changes in net assets for the year then ended, in accordance with the Financial Regulation and with accounting rules based on internationally accepted accounting standards for the public sector. | |

Legality and regularity of the transactions underlying the accounts

Revenue

| Opinion on the legality and regularity of revenue underlying the accounts
IX.
In our opinion, revenue underlying the accounts for the year ended 31 December 2015 is legal and regular in all material respects. | | IX. | In our opinion, revenue underlying the accounts for the year ended 31 December 2015 is legal and regular in all material respects. |
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| | IX. | In our opinion, revenue underlying the accounts for the year ended 31 December 2015 is legal and regular in all material respects. | |

Payments

| Basis for adverse opinion on the legality and regularity of payments underlying the accounts
X.
Expenditure recorded in 2015 under the multi-annual financial framework headings covering operational spending( 3 ) is materially affected by error. Our estimated level of error for payments underlying the accounts is 3,8 %.Our overall conclusion is driven by the higher estimated level of error for spending on a reimbursement basis( 4 ) and is corroborated by the Commission’s analysis of amounts at risk presented in the annual management and performance report for the EU budget. Adverse opinion on the legality and regularity of payments underlying the accounts
XI.
In our opinion, because of the significance of the matters described in the basis for adverse opinion on the legality and regularity of payments underlying the accounts paragraph, the payments underlying the accounts for the year ended 31 December 2015 are materially affected by error. | | X. | Expenditure recorded in 2015 under the multi-annual financial framework headings covering operational spending( 3 ) is materially affected by error. Our estimated level of error for payments underlying the accounts is 3,8 %.Our overall conclusion is driven by the higher estimated level of error for spending on a reimbursement basis( 4 ) and is corroborated by the Commission’s analysis of amounts at risk presented in the annual management and performance report for the EU budget. | | XI. | In our opinion, because of the significance of the matters described in the basis for adverse opinion on the legality and regularity of payments underlying the accounts paragraph, the payments underlying the accounts for the year ended 31 December 2015 are materially affected by error. |
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| | X. | Expenditure recorded in 2015 under the multi-annual financial framework headings covering operational spending( 3 ) is materially affected by error. Our estimated level of error for payments underlying the accounts is 3,8 %.Our overall conclusion is driven by the higher estimated level of error for spending on a reimbursement basis( 4 ) and is corroborated by the Commission’s analysis of amounts at risk presented in the annual management and performance report for the EU budget. | | | | |
| | XI. | In our opinion, because of the significance of the matters described in the basis for adverse opinion on the legality and regularity of payments underlying the accounts paragraph, the payments underlying the accounts for the year ended 31 December 2015 are materially affected by error. | | | | |

| Other information
XII.
The Financial Statement Discussion and Analysis is not a part of the financial statements. The information given in the Financial Statement Discussion and Analysis is consistent with the financial statements. | | XII. | The Financial Statement Discussion and Analysis is not a part of the financial statements. The information given in the Financial Statement Discussion and Analysis is consistent with the financial statements. |
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| | XII. | The Financial Statement Discussion and Analysis is not a part of the financial statements. The information given in the Financial Statement Discussion and Analysis is consistent with the financial statements. | |

14 July 2016 Vítor Manuel da SILVA CALDEIRA President European Court of Auditors 12, rue Alcide De Gasperi, Luxembourg, LUXEMBOURG

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( 1 )  The consolidated financial statements comprise the balance sheet, the statement of financial performance, the cashflow statement, the statement of changes in net assets and a summary of significant accounting policies and other explanatory notes (including segment reporting).

( 2 )  The aggregated reports on implementation of the budget comprise the aggregated reports on implementation of the budget and explanatory notes.

( 3 )  These headings (1 to 4) are covered by chapters 5 to 8 of our 2015 annual report.

( 4 )  82,7 billion euro. We provide further information in paragraphs 1.21 to 1.24 of our 2015 annual report.

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