# C_2006312EN.01008601.xml

| 19.12.2006 | EN | Official Journal of the European Union | C 312/86 |
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19.12.2006

EN

Official Journal of the European Union

C 312/86

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REPORT

REPORT

on the annual accounts of the European Monitoring Centre for Drugs and Drug Addiction for the financial year 2005 together with the Centre's replies

(2006/C 312/15)

CONTENTS

| 1-2 | INTRODUCTION |
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1-2

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

| 7-13 | OBSERVATIONS |
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7-13

Tables 1 to 4

The Centre's replies

The Centre's replies

INTRODUCTION

| 1. | The European Monitoring Centre for Drugs and Drug Addiction (hereinafter the Centre) was established by Council Regulation (EEC) No 302/93 of 8 February 1993 (1). Its main task is to collect data on drugs and drug addiction in order to prepare and publish information that is objective, reliable and comparable at European level. The information is intended to provide a basis for analysing the demand for drugs and ways of reducing both it and, in general, phenomena associated with the drug market. |
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1.

The European Monitoring Centre for Drugs and Drug Addiction (hereinafter the Centre) was established by Council Regulation (EEC) No 302/93 of 8 February 1993 (1). Its main task is to collect data on drugs and drug addiction in order to prepare and publish information that is objective, reliable and comparable at European level. The information is intended to provide a basis for analysing the demand for drugs and ways of reducing both it and, in general, phenomena associated with the drug market.

1

| 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 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 Centre'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 Centre's accounts, as required by Article 248 of the Treaty establishing the European Community.

2

| 4. | The Centre's accounts for the financial year ended 31 December 2005 (3) were drawn up by its Director, pursuant to Article 11 of Regulation (EEC) No 302/93, and sent to the Court, which is required to give its opinion on their reliability and on the legality and regularity of the underlying transactions. |
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4.

The Centre's accounts for the financial year ended 31 December 2005 (3) were drawn up by its Director, pursuant to Article 11 of Regulation (EEC) No 302/93, and sent to the Court, which is required to give its opinion on their reliability and on the legality and regularity of the underlying transactions.

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 Statement below. |
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6.

The Court has thus obtained a reasonable basis for the Statement 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 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 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 utilisation rate of commitment appropriations is greater than 90 %, whereas the corresponding rate for payment appropriations is only 85 %. Expenditure on administration shows a high carry-over rate of almost 40 %. This situation is the result of concentrating purchases in the latter part of the year, which has concomitant risks for the quality of acquisition procedures. The Centre should manage its procurement policy better, in order to avoid carrying over appropriations, which makes management more cumbersome. |
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7.

The utilisation rate of commitment appropriations is greater than 90 %, whereas the corresponding rate for payment appropriations is only 85 %. Expenditure on administration shows a high carry-over rate of almost 40 %. This situation is the result of concentrating purchases in the latter part of the year, which has concomitant risks for the quality of acquisition procedures. The Centre should manage its procurement policy better, in order to avoid carrying over appropriations, which makes management more cumbersome.

| 8. | For the purposes of management, the Centre has prepared an activity-based budget. This initiative must be taken further with a view to improved performance monitoring and evaluation of its effectiveness by introducing analytical accounts so that the cost of the Centre's various activities can be ascertained. |
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8.

For the purposes of management, the Centre has prepared an activity-based budget. This initiative must be taken further with a view to improved performance monitoring and evaluation of its effectiveness by introducing analytical accounts so that the cost of the Centre's various activities can be ascertained.

| 9. | In its previous report, the Court noted that only the accounting officer's signature was needed for the bank accounts, and the Centre undertook to implement a countersigning system. As at February 2006, no such system had yet been introduced. |
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9.

In its previous report, the Court noted that only the accounting officer's signature was needed for the bank accounts, and the Centre undertook to implement a countersigning system. As at February 2006, no such system had yet been introduced.

| 10. | The fixed asset inventory systems are not included in the general accounts. Without a reliable labelling system, the traceability of the assets entered in the inventory cannot be assured. |
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10.

The fixed asset inventory systems are not included in the general accounts. Without a reliable labelling system, the traceability of the assets entered in the inventory cannot be assured.

| 11. | There are deficiencies in the staff recruitment procedures. In one selection procedure, the selection board was not composed in accordance with the parity principle established in the Staff Regulations (4). In another case, the successful candidate had not obtained the best assessment in the selection procedure. |
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11.

There are deficiencies in the staff recruitment procedures. In one selection procedure, the selection board was not composed in accordance with the parity principle established in the Staff Regulations (4). In another case, the successful candidate had not obtained the best assessment in the selection procedure.

4

| 12. | At the end of 2004, a member of staff was sent on a long-term (two-year) mission to Brussels. It has not been possible to ascertain the purpose of this mission, which had cost around 70 000 euro (in pay and allowances) by the end of 2005, and the person concerned did not have a heavy workload. When the mission was terminated, he was seconded to the Commission, yet the Centre continued to pay his salary. |
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12.

At the end of 2004, a member of staff was sent on a long-term (two-year) mission to Brussels. It has not been possible to ascertain the purpose of this mission, which had cost around 70 000 euro (in pay and allowances) by the end of 2005, and the person concerned did not have a heavy workload. When the mission was terminated, he was seconded to the Commission, yet the Centre continued to pay his salary.

| 13. | A number of anomalies were revealed in the course of checks on procurement and contracting procedures. In two cases, the earliest date for the receipt of bids after the date of the invitation to tender was not adhered to. In one supplementary contract procedure, the value of the works exceeded the ceilings laid down in the regulations. In two cases audited, there was no formal decision concerning the appointment of the members of the committee responsible for opening the bids or the members of the evaluation committee. Lastly, in one case the contract value was clearly under-estimated, which infringed the principle of the equal treatment of tenderers. |
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13.

A number of anomalies were revealed in the course of checks on procurement and contracting procedures. In two cases, the earliest date for the receipt of bids after the date of the invitation to tender was not adhered to. In one supplementary contract procedure, the value of the works exceeded the ceilings laid down in the regulations. In two cases audited, there was no formal decision concerning the appointment of the members of the committee responsible for opening the bids or the members of the evaluation committee. Lastly, in one case the contract value was clearly under-estimated, which infringed the principle of the equal treatment of tenderers.

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 36, 12.2.1993 This Regulation was amended by Regulations (EC) No 3294/94 of 22 December 1994 (OJ L 341, 30.12.1994, p. 7.) and (EC) No 1651/2003 of 18 June 2003 (OJ L 245, 29.9.2003, p. 30).

1

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

2

(3)  These accounts were drawn up on 15 June 2006 and received by the Court on 13 July 2006.

3

(4)  Article 12 of the Rules applicable to other servants.

4

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Table 1

European Monitoring Centre for Drugs and Drug Addiction (Lisbon)

| Areas of Community competence deriving from the Treaty | Competences of the Centre as defined in Council Regulation (EEC) No 302/93 | Governance | Resources available to the Centre in 2005

  (2004) | Products and services supplied in 2005 |
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| The Community complements the Member States' action in reducing drugs-related health damage, including information and prevention.

  (Article 152(1) of the Treaty) | Objectives:

  to provide the Union and its Member States with reliable information at European level concerning drugs and drug addiction and their consequences.
  The Monitoring Centre should give priority to analysing:






  1. | The demand and reduction of the demand for drugs; |

Areas of Community competence deriving from the Treaty

Competences of the Centre as defined in Council Regulation (EEC) No 302/93

Governance

Resources available to the Centre in 2005

(2004)

Products and services supplied in 2005

The Community complements the Member States' action in reducing drugs-related health damage, including information and prevention.

(Article 152(1) of the Treaty)

Objectives:

to provide the Union and its Member States with reliable information at European level concerning drugs and drug addiction and their consequences.

The Monitoring Centre should give priority to analysing:

1.

The demand and reduction of the demand for drugs;

| 2. | National and Community strategies and policies; |
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2.

National and Community strategies and policies;

| 3. | International cooperation and the geopolitics of supply; |
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3.

International cooperation and the geopolitics of supply;

| 4. | Control of the trade in narcotics, psychotropic substances and drug precursors; |
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4.

Control of the trade in narcotics, psychotropic substances and drug precursors;

| 5. | The implications of drug use for producer, consumer and transit countries, including money laundering. |
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5.

The implications of drug use for producer, consumer and transit countries, including money laundering.

Tasks:

| — | to collect and analyse data, |
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—

to collect and analyse data,

| — | to make enquiries and carry out preparatory actions, |
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—

to make enquiries and carry out preparatory actions,

| — | to ensure that European-level data are more reliable, |
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—

to ensure that European-level data are more reliable,

| — | to publish reliable information, |
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—

to publish reliable information,

| — | to improve coordination between national and Community actions, |
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—

to improve coordination between national and Community actions,

| — | to promote the incorporation of drug-related data into international programmes. |
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—

to promote the incorporation of drug-related data into international programmes.

1. The Management Board

Comprises one representative from each Member State, two representatives of the Commission and two qualified scientists appointed by the European Parliament.

It approves the work programme and general annual report and adopts the budget.

2. Director

Appointed by the Management Board at the Commission's proposal.

3. Scientific Committee

Delivers opinions. It is made up of one representative from each Member State. The Management Board may also appoint a maximum of six other members on the basis of their specific qualifications.

4. External control

Court of Auditors

5. Discharge authority

European Parliament on the Council's recommendation.

Final budget

12,8 million euro (12,2 million euro). Community contribution: 96 % (96 %).

Staff numbers as at 31 December 2005:

Number of posts in establishment plan: 77 (77)

Posts occupied: 58 (61)

+25 (22) other staff (auxiliary contracts, contract staff and temporary replacements)

Total staff: 83 (83)

Assigned to the following duties:

operational: 50,5 (54,5)

administrative and IT support: 25 (20)

mixed: 7,5 (8,5)

Network

The Centre runs a computerised network for the collection and exchange of information called the ‘European Information Network on Drugs and Drug Addiction’ (Reitox); this network connects national drug information networks, specialist centres in the Member States and the information systems of international organisations working with the Centre.

Publications:

| — | Annual report on the state of the drug problem in Europe (22 language versions, publication and interactive website) |
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—

Annual report on the state of the drug problem in Europe (22 language versions, publication and interactive website)

| — | Annual report on selected issues (EN, publication and interactive website) |
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—

Annual report on selected issues (EN, publication and interactive website)

| — | Statistical bulletin and interactive website containing over 200 tables, 100 graphs and PDF files |
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—

Statistical bulletin and interactive website containing over 200 tables, 100 graphs and PDF files

| — | General activity report (annual, EN) |
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—

General activity report (annual, EN)

| — | Drugnet Europe newsletter (4 issues, two of them in five languages and two in EN, 12 products) |
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—

Drugnet Europe newsletter (4 issues, two of them in five languages and two in EN, 12 products)

| — | Technical and scientific studies and articles (28) |
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—

Technical and scientific studies and articles (28)

Other websites:

Set-up/updating/content development:

| — | Country situation summaries |
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—

Country situation summaries

| — | Country data profiles |
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—

Country data profiles

| — | Drug treatment overviews |
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—

Drug treatment overviews

| — | European legal database on drugs |
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—

European legal database on drugs

| — | Evaluation instruments bank |
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—

Evaluation instruments bank

| — | Exchange on drug demand reduction action |
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—

Exchange on drug demand reduction action

Promotional brochures (3 products)

Media products (110 miscellaneous products)

Participation in international conferences/meetings (75)

Organisation of technical and scientific meetings (24)

Source: Information supplied by the Centre.

EUROPEAN MONITORING CENTRE FOR DRUGS AND DRUG ADDICTION

Source: Centre data — These tables summarise the data provided 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 for the financial year | Appropriations carried over from the previous financial year | Available appropriations
  (appropriations for the financial year plus appropriations for the previous financial year) |
| entered | committed | paid | carried over | cancelled | available | paid | cancelled | available | committed | paid | carried over | cancelled |
| Community subsidies | 12 000 | 12 000 | Title I
  Staff (NDA) | 6 194 | 5 932 | 5 762 | 154 | 279 | 122 | 101 | 21 | 6 316 | 6 054 | 5 863 | 154 | 300 |
| Own revenue | 516 | 516 | Title II
  Administration (NDA) | 1 791 | 1 720 | 1 070 | 650 | 71 | 356 | 332 | 24 | 2 147 | 2 076 | 1 402 | 650 | 95 |
| Other revenue | | 8 | Title III
  Operating activities (DA) | | | | | | | | | | | | | |
| — CA | 4 531 | 4 298 | | | 233 | | | | 4 531 | 4 298 | | | 233 |
| — PA | 4 531 | | 4 085 | | 446 | 1 260 | 66 | 1 194 | 5 791 | | 4 151 | | 1 640 |
| Allocated revenue (Phare) | 300 | 190 | Allocated revenue (Phare) | 300 | 49 | 16 | 284 | | | | | 300 | 49 | 16 | 284 | |
| Total | 12 816 | 12 714 | Total CA | 12 816 | 11 999 | | 1 088 | 583 | 478 | | 45 | 13 294 | 12 477 | | 1 088 | 628 |
| Total PA | 12 816 | | 10 933 | 1 088 | 796 | 1 738 | 499 | 1 239 | 14 554 | | 11 432 | 1 088 | 2 035 |
| NDA | : | non-differentiated appropriations (commitment appropriations equal payment appropriations). |
| DA | : | differentiated appropriations (commitment appropriations and payment appropriations may differ). |
| CA | : | commitment appropriations in a system of differentiated appropriations. |
| PA | : | payment appropriations in a system of differentiated appropriations. |

(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 for the financial year

Appropriations carried over from the previous financial year

Available appropriations

(appropriations for the financial year plus appropriations for the previous financial year)

entered

committed

paid

carried over

cancelled

available

paid

cancelled

available

committed

paid

carried over

cancelled

Community subsidies

12 000

12 000

Title I

Staff (NDA)

6 194

5 932

5 762

154

279

122

101

21

6 316

6 054

5 863

154

300

Own revenue

516

516

Title II

Administration (NDA)

1 791

1 720

1 070

650

71

356

332

24

2 147

2 076

1 402

650

95

Other revenue

8

Title III

Operating activities (DA)

— CA

4 531

4 298

233

4 531

4 298

233

— PA

4 531

4 085

446

1 260

66

1 194

5 791

4 151

1 640

Allocated revenue (Phare)

300

190

Allocated revenue (Phare)

300

49

16

284

300

49

16

284

Total

12 816

12 714

Total CA

12 816

11 999

1 088

583

478

45

13 294

12 477

1 088

628

Total PA

12 816

10 933

1 088

796

1 738

499

1 239

14 554

11 432

1 088

2 035

NDA

:

non-differentiated appropriations (commitment appropriations equal payment appropriations).

DA

:

differentiated appropriations (commitment appropriations and payment appropriations may differ).

CA

:

commitment appropriations in a system of differentiated appropriations.

PA

:

payment appropriations in a system of differentiated appropriations.

Table 3

Revenue and expenditure account for the financial year 2005 (1)

| (1000 euro) |
| --- |
| | 2005 |
| Operating revenue |
| Community subsidies | 10 592 |
| Other subsidies/revenue | 312 |
| Total (a) | 10 904 |
| Operating expenditure |
| Staff | 5 843 |
| Administration | 2 269 |
| Operating activities | 4 181 |
| Total (b) | 12 293 |
| Operating result (c = a – b) | –1 389 |
| Other income (d) | 0 |
| Other charges (e) | 35 |
| Economic result (f = c + d – e) | –1 424 |

(1000 euro)

2005

Operating revenue

Community subsidies

10 592

Other subsidies/revenue

312

Total (a)

10 904

Operating expenditure

Staff

5 843

Administration

2 269

Operating activities

4 181

Total (b)

12 293

Operating result (c = a – b)

–1 389

Other income (d)

0

Other charges (e)

35

Economic result (f = c + d – e)

–1 424

Table 4

Balance sheet at 31 December 2005 and 31 December 2004 (2)

| (1000 euro) |
| --- |
| | 2005 | 2004 |
| Assets |
| Fixed assets | 2 989 | 3 058 |
| Stocks | | |
| Receivables and long-term assets | 224 | 619 |
| Liquid assets | 3 005 | 3 644 |
| Total | 6 218 | 7 321 |
| Liabilities |
| Cumulative results of previous years | 4 296 | 4 296 |
| Result for the year | –1 424 | 0 |
| Long-term liabilities | | |
| Current liabilities | 3 346 | 3 025 |
| Total | 6 218 | 7 321 |

(1000 euro)

2005

2004

Assets

Fixed assets

2 989

3 058

Stocks

Receivables and long-term assets

224

619

Liquid assets

3 005

3 644

Total

6 218

7 321

Liabilities

Cumulative results of previous years

4 296

4 296

Result for the year

–1 424

0

Long-term liabilities

Current liabilities

3 346

3 025

Total

6 218

7 321

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(1)  Data for the financial year 2004 are not shown as they are not comparable with data for 2005 because of the change in the accounting methods applied.

(2)  Data for the financial year 2004 have been restated to make them comparable with the 2005 data.

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THE CENTRE'S REPLIES

| 7. | The Monitoring Centre has taken note of the Court's observation and has taken steps to improve the planning of its calls for tenders, spreading them more evenly over the year. The Monitoring Centre will continue its efforts which, in 2005, allowed it to increase the rate of utilisation of payment appropriations compared with 2004 levels (from 77 % to 85 %), especially with regard to administrative expenditure (Title II). |
| --- | --- |

7.

The Monitoring Centre has taken note of the Court's observation and has taken steps to improve the planning of its calls for tenders, spreading them more evenly over the year. The Monitoring Centre will continue its efforts which, in 2005, allowed it to increase the rate of utilisation of payment appropriations compared with 2004 levels (from 77 % to 85 %), especially with regard to administrative expenditure (Title II).

| 8. | The Monitoring Centre has taken note of the Court's observation and will continue to develop its activity-based management system. In place since 2001, this system calculates the cost of the Monitoring Centre's projects and programmes, though strictly speaking it is not an analytical accounting system. |
| --- | --- |

8.

The Monitoring Centre has taken note of the Court's observation and will continue to develop its activity-based management system. In place since 2001, this system calculates the cost of the Monitoring Centre's projects and programmes, though strictly speaking it is not an analytical accounting system.

| 9. | On 22 March 2006, the Monitoring Centre implemented a double signature system for the management of its bank accounts. |
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9.

On 22 March 2006, the Monitoring Centre implemented a double signature system for the management of its bank accounts.

| 10. | From 2006, the Monitoring Centre has established an automatic link between budgetary and general accounting. Reconciliation between the accounts and the inventory is scheduled for the month of January following the end of the relevant financial year. In addition, in July 2006 the Monitoring Centre completed a physical check of its inventory items. The results of this check were entered in a dedicated computer system. |
| --- | --- |

10.

From 2006, the Monitoring Centre has established an automatic link between budgetary and general accounting. Reconciliation between the accounts and the inventory is scheduled for the month of January following the end of the relevant financial year. In addition, in July 2006 the Monitoring Centre completed a physical check of its inventory items. The results of this check were entered in a dedicated computer system.

| 11. | Pending a final agreement with the Commission on the rules for implementing the Staff Regulations, the Monitoring Centre will continue to apply the principles governing Community recruitment procedures to all its selection procedures. As its staff complement is relatively small, the Monitoring Centre ensures at all times that a representative of the Staff Committee participates in the selection committees as a full member. In future, the Monitoring Centre will state explicit reasons why it selected the successful candidate if the selection deviates from the ranking drawn up by the selection committee. |
| --- | --- |

11.

Pending a final agreement with the Commission on the rules for implementing the Staff Regulations, the Monitoring Centre will continue to apply the principles governing Community recruitment procedures to all its selection procedures. As its staff complement is relatively small, the Monitoring Centre ensures at all times that a representative of the Staff Committee participates in the selection committees as a full member. In future, the Monitoring Centre will state explicit reasons why it selected the successful candidate if the selection deviates from the ranking drawn up by the selection committee.

| 12. | The Monitoring Centre terminated the mission with effect from 31 May 2005. At the end of 2005, the Monitoring Centre decided, in accordance with Article 38 of the Staff Regulations, to second the staff member in question to the Commission for a duration of nine months, without the possibility of extension. As agreed with the Commission, the salary of this staff member would be paid by the Monitoring Centre. |
| --- | --- |

12.

The Monitoring Centre terminated the mission with effect from 31 May 2005. At the end of 2005, the Monitoring Centre decided, in accordance with Article 38 of the Staff Regulations, to second the staff member in question to the Commission for a duration of nine months, without the possibility of extension. As agreed with the Commission, the salary of this staff member would be paid by the Monitoring Centre.

| 13. | The Monitoring Centre has taken note of the Court's remarks and has taken the following steps in particular:






  — | to improve the planning of its calls for tenders, above all to keep emergency cases to a minimum, |
| --- | --- | --- |

13.

The Monitoring Centre has taken note of the Court's remarks and has taken the following steps in particular:

—

to improve the planning of its calls for tenders, above all to keep emergency cases to a minimum,

| — | to provide a more structured use of framework contracts, |
| --- | --- |

—

to provide a more structured use of framework contracts,

| — | to formalise the appointment of members of the tender opening and evaluation committees, |
| --- | --- |

—

to formalise the appointment of members of the tender opening and evaluation committees,

| — | to provide greater support to authorising officers by delegation and to managers in the awarding of contracts and the granting of subsidies. |
| --- | --- |

—

to provide greater support to authorising officers by delegation and to managers in the awarding of contracts and the granting of subsidies.

The Monitoring Centre believes that the supplementary contract referred to by the Court actually involved recurring services which could be the subject of an additional contract without the ceilings laid down for supplementary contracts. The above measures should reduce — or even eliminate — this type of contract.

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