# C_2006312EN.01005401.xml

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

EN

Official Journal of the European Union

C 312/54

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REPORT

REPORT

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

(2006/C 312/10)

CONTENTS

| 1-2 | INTRODUCTION |
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1-2

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

| 7-12 | OBSERVATIONS |
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7-12

Tables 1 to 4

The Centre's replies

The Centre's replies

INTRODUCTION

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

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

1

2

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

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

Table 1

Tables 2, 3 and 4

STATEMENT OF ASSURANCE

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

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

3

| 4. | The Centre's accounts for the financial year ended 31 December 2005 (4) were drawn up by its Director, pursuant to Article 23 of Regulation (EC) No 851/2004, and sent to the Court, which is required to give a statement of assurance on their reliability and on the legality and regularity of the underlying transactions. |
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4.

The Centre's accounts for the financial year ended 31 December 2005 (4) were drawn up by its Director, pursuant to Article 23 of Regulation (EC) No 851/2004, and sent to the Court, which is required to give a statement of assurance on their reliability and on the legality and regularity of the underlying transactions.

4

| 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. |
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5.

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

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

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

Reliability of the accountsThe Centre's accounts for the financial year ended 31 December 2005 are, in all material respects, reliable.Legality and regularity of the underlying transactionsThe transactions underlying the Centre's annual accounts, taken as a whole, are legal and regular.The observations which follow do not call the Court's statement into question.

Reliability of the accountsThe Centre's accounts for the financial year ended 31 December 2005 are, in all material respects, reliable.Legality and regularity of the underlying transactionsThe transactions underlying the Centre's annual accounts, taken as a whole, are legal and regular.The observations which follow do not call the Court's statement into question.

OBSERVATIONS

| 7. | The implementation of the budget for the financial year 2005 was marked by a low rate of commitment (84 %) and a substantial rate of carry-over (35 % overall and almost 90 % for operating expenditure). This situation was in part due to problems inherent in the Centre's start-up period. In future, the Centre should be vigilant concerning the risk of mobilising resources unnecessarily, in particular by ensuring strict programming of its activities. |
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7.

The implementation of the budget for the financial year 2005 was marked by a low rate of commitment (84 %) and a substantial rate of carry-over (35 % overall and almost 90 % for operating expenditure). This situation was in part due to problems inherent in the Centre's start-up period. In future, the Centre should be vigilant concerning the risk of mobilising resources unnecessarily, in particular by ensuring strict programming of its activities.

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

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

| 9. | Requests to the Commission for the payment of subsidies should be justified by a forecast of cash needs (5). The Centre had no system for producing such forecasts. |
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9.

Requests to the Commission for the payment of subsidies should be justified by a forecast of cash needs (5). The Centre had no system for producing such forecasts.

5

| 10. | The Centre's financial regulation stipulates that the authorising officer should make a budgetary commitment before entering into a legal commitment vis-à-vis third parties. However, no budgetary commitments were made for the Centre's expenditure in 2005 prior to the legal commitment. During the same period, all the Centre's payments were made by the accounting officer without the authorising officer having issued any payment orders (6). |
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10.

The Centre's financial regulation stipulates that the authorising officer should make a budgetary commitment before entering into a legal commitment vis-à-vis third parties. However, no budgetary commitments were made for the Centre's expenditure in 2005 prior to the legal commitment. During the same period, all the Centre's payments were made by the accounting officer without the authorising officer having issued any payment orders (6).

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| 11. | Contrary to the provisions of the regulations, the Centre's accounts were not kept by the double-entry method during 2005, thus creating risks of errors. |
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11.

Contrary to the provisions of the regulations, the Centre's accounts were not kept by the double-entry method during 2005, thus creating risks of errors.

| 12. | There were shortcomings in the documentation of the Centre's staff selection procedures (lack of formalisation of decisions on the appointment and composition of selection boards, lack of final report by selection boards on their work). During this period when it is recruiting its core staff, the Centre should be particularly attentive to strict application of its selection procedures. |
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12.

There were shortcomings in the documentation of the Centre's staff selection procedures (lack of formalisation of decisions on the appointment and composition of selection boards, lack of final report by selection boards on their work). During this period when it is recruiting its core staff, the Centre should be particularly attentive to strict application of its selection procedures.

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

For the Court of Auditors

Hubert WEBER

President

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(1)  OJ L 142, 30.4.2004, p. 1.

1

(2)  The task of paying the salaries continued to be carried out by the Commission on the basis of a delegation of powers issued by the Director.

2

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

3

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

4

(5)  Article 50 of the Centre's financial regulation.

5

(6)  Article 66 of the Centre's financial regulation.

6

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Table 1

European Centre for Disease Prevention and Control

| Area of Community competence deriving from the Treaty | Competences of the Centre as specified in Council Regulation (EC) No 851/2004 | Governance | Resources available to the Centre | Products and services supplied in 2005 |
| --- | --- | --- | --- | --- |
| A high level of human health protection shall be ensured in the definition and implementation of all Community policies and activities. Community action, which shall complement national policies, shall be directed towards improving public health, preventing human illness and diseases, and obviating sources of danger to human health. Such action shall cover the fight against the major health scourges, by promoting research into their causes, their transmission and their prevention, as well as health information and education.

  (Article 152 of the Treaty) | Objectives:

  Strengthen Europe's defences against infectious diseases; specifically, to identify, assess and communicate current and emerging threats to human health from communicable diseases.
  Therefore the Centre shall operate dedicated surveillance networks, provide scientific opinions, operate the early warning and response system and provide scientific and technical assistance and training. | Tasks:







  — | operate dedicated disease surveillance networks and enhance networking activities. The Centre has a specific role in data collection, validation, analysis and dissemination, |

Area of Community competence deriving from the Treaty

Competences of the Centre as specified in Council Regulation (EC) No 851/2004

Governance

Resources available to the Centre

Products and services supplied in 2005

A high level of human health protection shall be ensured in the definition and implementation of all Community policies and activities. Community action, which shall complement national policies, shall be directed towards improving public health, preventing human illness and diseases, and obviating sources of danger to human health. Such action shall cover the fight against the major health scourges, by promoting research into their causes, their transmission and their prevention, as well as health information and education.

(Article 152 of the Treaty)

Objectives:

Strengthen Europe's defences against infectious diseases; specifically, to identify, assess and communicate current and emerging threats to human health from communicable diseases.

Therefore the Centre shall operate dedicated surveillance networks, provide scientific opinions, operate the early warning and response system and provide scientific and technical assistance and training.

Tasks:

—

operate dedicated disease surveillance networks and enhance networking activities. The Centre has a specific role in data collection, validation, analysis and dissemination,

| — | provide authoritative expert advice and scientific opinions and studies in communicable diseases, |
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—

provide authoritative expert advice and scientific opinions and studies in communicable diseases,

| — | operate the Early Warning and Response System (EWRS). Develop procedures for identifying emerging health threats, |
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—

operate the Early Warning and Response System (EWRS). Develop procedures for identifying emerging health threats,

| — | strengthen Member States' capacity in preparedness planning and in training, |
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—

strengthen Member States' capacity in preparedness planning and in training,

| — | inform the general public and interested parties of its work. |
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—

inform the general public and interested parties of its work.

1. Management Board

One member designated by each Member State, two members designated by the European Parliament and three representatives of the Commission.

The Board adopts the Centre's annual programme and budget and follows their implementation.

2. Director

Appointed by the Management Board on the basis of a list of candidates proposed by the Commission.

3. Advisory Forum

A representative of each Member State and three non-voting representatives of the Commission.

The Forum is to assure the scientific excellence of the work and the independence of the activities and opinions of the Centre.

4. External Audit

Court of Auditors.

5. Discharge authority

Parliament on a recommendation from the Council.

2005 final budget

4,85 million euro, including a Community subsidy of 98 %

Staff numbers

Posts in the establishment plan: 29

posts occupied: 22

+20 other posts.

Total staff: 42

assigned to the following duties:

operational: 17

administrative: 25

| — | Protocols developed for evaluating networks, |
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—

Protocols developed for evaluating networks,

| — | planning document prepared for future strategy for surveillance activities in Europe, |
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—

planning document prepared for future strategy for surveillance activities in Europe,

| — | scientific panels established for all 6 disease groups listed in Decision 2119/98/EC, |
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scientific panels established for all 6 disease groups listed in Decision 2119/98/EC,

| — | expert opinions and guidelines prepared on avian influenza, |
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—

expert opinions and guidelines prepared on avian influenza,

| — | responsibility for the EWRS (102 public health events reported and reviewed), |
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—

responsibility for the EWRS (102 public health events reported and reviewed),

| — | protocols and guidelines developed for mobilising outbreak assistance teams, |
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—

protocols and guidelines developed for mobilising outbreak assistance teams,

| — | 2 outbreak assistance missions, |
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—

2 outbreak assistance missions,

| — | procedure for coordination of public health threats defined and in place (Commission, Member States, WHO), |
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—

procedure for coordination of public health threats defined and in place (Commission, Member States, WHO),

| — | 21 weekly epidemiological reports disseminated through the Eurosurveillance journal. |
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—

21 weekly epidemiological reports disseminated through the Eurosurveillance journal.

Source: Information supplied by the Centre.

EUROPEAN CENTRE FOR DISEASE PREVENTION AND CONTROL

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

Table 2

Implementation of the budget for the financial year 2005

| (1000 euro) |
| --- |
| Revenue | Expenditure |
| Source of revenue | Revenue entered in the final budget for the financial year | Revenue received | Allocation of expenditure | Final budget appropriations |
| entered | committed | paid | carried over | cancelled |
| Community subsidies (1) | 4 852 | 3 402 | Title I
  Staff | 2 531 | 2 282 | 1 895 | 362 | 274 |
| | | | Title II
  Administration | 1 238 | 1 174 | 638 | 535 | 65 |
| | | | Title III
  Operating activities | 1 083 | 610 | 70 | 541 | 472 |
| Total | 4 852 | 3 402 | Total | 4 852 | 4 066 | 2 603 | 1 438 | 811 |

(1000 euro)

Revenue

Expenditure

Source of revenue

Revenue entered in the final budget for the financial year

Revenue received

Allocation of expenditure

Final budget appropriations

entered

committed

paid

carried over

cancelled

Community subsidies (1)

4 852

3 402

Title I

Staff

2 531

2 282

1 895

362

274

Title II

Administration

1 238

1 174

638

535

65

Title III

Operating activities

1 083

610

70

541

472

Total

4 852

3 402

Total

4 852

4 066

2 603

1 438

811

Table 3

Revenue and expenditure account for the financial year 2005

| (1000 euro) |
| --- |
| | 2005 |
| Operating revenue |
| Community subsidies | 2 646 |
| Other subsidies/revenue | 0 |
| Total (a) | 2 646 |
| Operating expenditure |
| Staff | 171 |
| Administration | 1 185 |
| Operating activities | 326 |
| Total (b) | 1 682 |
| Operating result (c = a – b) | 964 |
| Other income (d) | 0 |
| Other charges (e) | 11 |
| Economic result (f = c + d – e) | 953 |

(1000 euro)

2005

Operating revenue

Community subsidies

2 646

Other subsidies/revenue

0

Total (a)

2 646

Operating expenditure

Staff

171

Administration

1 185

Operating activities

326

Total (b)

1 682

Operating result (c = a – b)

964

Other income (d)

0

Other charges (e)

11

Economic result (f = c + d – e)

953

Table 4

Balance sheet at 31 December 2005

| (1000 euro) |
| --- |
| | 2005 |
| Assets |
| Fixed assets | 245 |
| Receivables | 320 |
| Cash and cash equivalents | 2 059 |
| Total | 2 624 |
| Liabilities |
| Accumulated surplus/deficit | 0 |
| Economic result for the year | 953 |
| Current liabilities | 1 671 |
| Total | 2 624 |

(1000 euro)

2005

Assets

Fixed assets

245

Receivables

320

Cash and cash equivalents

2 059

Total

2 624

Liabilities

Accumulated surplus/deficit

0

Economic result for the year

953

Current liabilities

1 671

Total

2 624

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(1)  Including the appropriations managed by the Commission.

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THE CENTRE'S REPLIES

| 7. | The main causes of the relatively low budget execution and the high percentage of the carry-over appropriations were related to the start-up phase of the Centre. ECDC is rapidly progressing and is focusing on its planning for the best possible use of the funds allocated to it during 2006. |
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7.

The main causes of the relatively low budget execution and the high percentage of the carry-over appropriations were related to the start-up phase of the Centre. ECDC is rapidly progressing and is focusing on its planning for the best possible use of the funds allocated to it during 2006.

| 8. | The basis for an activity based planning has been established in the second half of 2005. During 2006, the Centre is gradually putting in place the necessary reporting systems and processes to assure reliable and transparent activity based reporting. |
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8.

The basis for an activity based planning has been established in the second half of 2005. During 2006, the Centre is gradually putting in place the necessary reporting systems and processes to assure reliable and transparent activity based reporting.

| 9. | The Centre did not have an adequate system for monitoring cash needs during 2005 for reasons relating to its start up phase. As of February 2006, basic projections on cash needs were introduced, and as the Centre further develops its reporting systems the cash flow projections will be further refined. |
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9.

The Centre did not have an adequate system for monitoring cash needs during 2005 for reasons relating to its start up phase. As of February 2006, basic projections on cash needs were introduced, and as the Centre further develops its reporting systems the cash flow projections will be further refined.

| 10. | The situation described by the Court was initially caused by an absence of relevant ICT tools at the disposal of the Centre. The setting up of a financial system was prepared for in 2005 and it became fully operational in early 2006. No automated payment orders could be produced in 2005 due to the absence of ICT budget system. Nevertheless payments were only processed after the assurance that relevant information, authorisations and signatures were in place. From 2006 onwards, payment orders are systematically processed and approved for to all payments. |
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10.

The situation described by the Court was initially caused by an absence of relevant ICT tools at the disposal of the Centre. The setting up of a financial system was prepared for in 2005 and it became fully operational in early 2006. No automated payment orders could be produced in 2005 due to the absence of ICT budget system. Nevertheless payments were only processed after the assurance that relevant information, authorisations and signatures were in place. From 2006 onwards, payment orders are systematically processed and approved for to all payments.

| 11. | In the start up period of 2005, ECDC did not dispose of a computerised accounting system. During 2006 the Centre installed all the necessary software and is now operating a fully computerised accounting system. |
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11.

In the start up period of 2005, ECDC did not dispose of a computerised accounting system. During 2006 the Centre installed all the necessary software and is now operating a fully computerised accounting system.

| 12. | Following the Court's remark, the recruitment processes are now more extensively documented and consistently formalised. A strong Human Resources recruitment capacity has been prioritised as to assure that, in the build up phase of the Centre, the recruitment process is transparent and rigorous. |
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12.

Following the Court's remark, the recruitment processes are now more extensively documented and consistently formalised. A strong Human Resources recruitment capacity has been prioritised as to assure that, in the build up phase of the Centre, the recruitment process is transparent and rigorous.

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