# C_2006312EN.01003601.xml

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

EN

Official Journal of the European Union

C 312/36

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REPORT

REPORT

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

(2006/C 312/07)

CONTENTS

| 1-2 | INTRODUCTION |
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1-2

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

| 7-11 | OBSERVATIONS |
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7-11

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 Information from the financial statements drawn up by the Agency for the financial year 2005 is presented in Tables 2, 3 and 4. |
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2.

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

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 2005 (3) were drawn up by its Executive Director, pursuant to Article 13 of Regulation (EEC) No 1210/90, and sent to the Court, which is required to give its opinion on their reliability and on the legality and regularity of the underlying transactions. |
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4.

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

3

| 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 opinion expressed below. |
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6.

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

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

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

OBSERVATIONS

| 7. | The agency committed nearly all the appropriations in its budget for the financial year 2005. Nevertheless, it is noted that the carry-over rate (over 30 %) for commitments for its operating activities (Title III) is high. The Agency should ensure a reduction in carry-overs, whose volume hampers the management of the following year's appropriations, which subsequently creates delays in implementation or even increases them. |
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7.

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

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

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

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

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

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

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

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

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

4

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

For the Court of Auditors

Hubert WEBER

President

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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 21 June 2006 and received by the Court on 3 July 2006.

3

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

4

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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

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

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

  (Article 174 of the Treaty) | Objectives:

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






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

Areas of Community competence deriving from the Treaty

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

Governance

Resources made available to the Agency

(2004)

Products and services supplied in 2005

Environment policy

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

(Article 174 of the Treaty)

Objectives:

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

(a)

take the requisite action to protect the environment;

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

evaluate its implementation;

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

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, |
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—

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, |
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—

to ensure that environmental data are comparable at European level,

| — | 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 every five years on the state of, changes in and outlook for the environment; |
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—

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. |
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—

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

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

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

1. Management Board

Consisting of:

| — | one representative per Member State, |
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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.

Task

To adopt the work programme and ensure it is implemented.

2. Executive Director

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

3. Advisory Forum

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

4. Scientific Committee

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

5. External audit

European Court of Auditors.

6. Discharge Authority

Parliament on a recommendation by the Council.

Final budget for 2005

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

Community subsidy: 84 % (87 %).

Staff numbers at 31 December 2005

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

Posts occupied: 107 (102)

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

Total staff numbers: 115 (115)

assigned to the following tasks:

| — | operational: 72 (72) |
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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 the report on the state of, trends in and prospects for the environment entitled ‘The European environment: state and outlook 2005’, |
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—

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

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

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

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

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

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

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

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

seminars organised under the Presidency of the Council,

| — | assistance in harmonising data, |
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—

assistance in harmonising data,

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

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

Source: Information supplied by the Agency.

EUROPEAN ENVIRONMENT AGENCY

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

Table 2

Implementation of the budget for the financial year 2005

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

(1000 euro)

Revenue

Expenditure

Origin of Revenue

Revenue entered in the final budget for the financial year

Revenue collected

Allocation of expenditure

Appropriations under the final budget

Appropriations carried over from the previous financial year

Appropriations for the financial year and the previous financial year

entered

committed

paid

carried over

cancelled

available

paid

cancelled

available

committed

paid

carried over

cancelled

Community subsidies

26 900

26 900

Title I

Staff

14 468

14 468

13 958

508

2

436

319

117

14 904

14 904

14 277

508

119

Other subsidies

4 444

7 438

Title II

Administration

3 857

3 856

2 960

895

2

396

346

50

4 253

4 252

3 306

895

52

Other revenue

p.m

218

Title III

Operating activities

13 019

13 018

8 942

4 069

8

4 853

4 647

206

17 872

17 871

13 589

4 069

214

Earmarked revenue

800

745

Earmarked revenue

800

720

277

523

0

2 208

536

28

3 008

2 928

813

2 167

28

Total

32 144

35 301

Total

32 144

32 062

26 137

5 995

12

7 893

5 848

401

40 037

39 955

31 985

7 639

413

Table 3

Economic outturn account for the financial year 2005 (1)

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

(1000 euro)

2005

Operating revenue

Community subsidies

26 900

Other subsidies/revenue

5 633

Total (a)

32 533

Operating expenditure

Staff

13 423

Administration

5 321

Operations

15 618

Total (b)

34 362

Operating result (c = a — b)

–1 829

Other income (d)

29

Other charges (e)

–7

Economic result (f = c + d + e)

–1 807

Table 4

Balance sheet at 31 December 2005 and 2004 (2)

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

(1000 euro)

2005

2004

Assets

Fixed assets

2 105

1 710

Receivables

2 661

5 839

Cash

4 491

1 181

Total

9 257

8 730

Liabilities

Accumulated surplus/deficit

6 050

6 050

Economic result for the year

–1 808

0

Current liabilities

5 015

2 680

Total

9 257

8 730

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

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

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THE AGENCY'S REPLIES

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

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

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

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

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

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

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

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

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

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

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