# C_2009304EN.01010001.xml

| 15.12.2009 | EN | Official Journal of the European Union | C 304/100 |
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15.12.2009

EN

Official Journal of the European Union

C 304/100

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REPORT

REPORT

on the annual accounts of the European GNSS Supervisory Authority for the financial year 2008, together with the Authority’s replies

2009/C 304/19

CONTENTS

CONTENTS

| | Paragraph | Page |
| --- | --- | --- |
| INTRODUCTION ... | 1-2 | 101 |
| STATEMENT OF ASSURANCE ... | 3-16 | 101 |
| COMMENTS ON THE BUDGETARY AND FINANCIAL MANAGEMENT ... | 17-18 | 102 |
| Table ... | 103 |
| The Authority’s replies ... | 106 |

Paragraph

Paragraph

Page

Page

INTRODUCTION ...

1-2

101

STATEMENT OF ASSURANCE ...

3-16

101

COMMENTS ON THE BUDGETARY AND FINANCIAL MANAGEMENT ...

17-18

102

Table ...

103

The Authority’s replies ...

The Authority’s replies

106

INTRODUCTION

INTRODUCTION

| 1. | The European GNSS (Global Navigation Satellite System) Supervisory Authority (hereinafter ‘the Authority’), located in Brussels, was set up as a Community agency by Council Regulation (EC) No 1321/2004 of 12 July 2004 (1) to manage the public interests relating to the European GNSS programmes and to act as the regulatory authority for the programme during the deployment and operational phases of the Galileo Programme. Regulation (EC) No 683/2008 of the European Parliament and of the Council of 9 July 2008 (2) reduced the responsibilities of the Authority to the control of the security of Galileo systems and to the preparation of their commercialisation. The Commission may possibly entrust specific tasks to the Authority (3). |
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1.

The European GNSS (Global Navigation Satellite System) Supervisory Authority (hereinafter ‘the Authority’), located in Brussels, was set up as a Community agency by Council Regulation (EC) No 1321/2004 of 12 July 2004 (1) to manage the public interests relating to the European GNSS programmes and to act as the regulatory authority for the programme during the deployment and operational phases of the Galileo Programme. Regulation (EC) No 683/2008 of the European Parliament and of the Council of 9 July 2008 (2) reduced the responsibilities of the Authority to the control of the security of Galileo systems and to the preparation of their commercialisation. The Commission may possibly entrust specific tasks to the Authority (3).

1

2

3

| 2. | The Authority’s 2008 adopted budget amounted to 22,7 million euro compared with 436,5 million euro the previous year. The number of staff employed by the Authority at the end of the year was 52 as compared to 49 the previous year. |
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2.

The Authority’s 2008 adopted budget amounted to 22,7 million euro compared with 436,5 million euro the previous year. The number of staff employed by the Authority at the end of the year was 52 as compared to 49 the previous year.

STATEMENT OF ASSURANCE

STATEMENT OF ASSURANCE

| 3. | Pursuant to the provisions of Article 248 of the Treaty the Court has audited the annual accounts (4) of the Authority, which comprise the ‘financial statements’ (5) and the ‘reports on implementation of the budget’ (6) for the financial year ended 31 December 2008 and the legality and regularity of the transactions underlying those accounts. |
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3.

3.

Pursuant to the provisions of Article 248 of the Treaty the Court has audited the annual accounts (4

5

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| 4. | 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 (7). |
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4.

4.

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 (7

The Director’s responsibility

The Director’s responsibility

| 5. | As authorising officer, the Director implements the revenue and expenditure of the budget in accordance with the financial rules of the Authority under his own responsibility and within the limits of authorised appropriations (8). The Director is responsible for putting in place (9) the organisational structure and the internal management and control systems and procedures relevant for drawing up final accounts that are free from material misstatement, whether due to fraud or error, and for ensuring that the transactions underlying those accounts are legal and regular. |
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5.

5.

As authorising officer, the Director implements the revenue and expenditure of the budget in accordance with the financial rules of the Authority under his own responsibility and within the limits of authorised appropriations (8

9

The Court’s responsibility

The Court’s responsibility

| 6. | The Court’s responsibility is to provide, on the basis of its audit, a statement of assurance as to the reliability of the annual accounts of the Authority and the legality and regularity of the transactions underlying them. |
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6.

6.

The Court’s responsibility is to provide, on the basis of its audit, a statement of assurance as to the reliability of the annual accounts of the Authority and the legality and regularity of the transactions underlying them.

| 7. | The Court conducted its audit in accordance with the IFAC and ISSAI (10) International Auditing Standards and Codes of Ethics. Those standards require that the Court complies with ethical requirements and plans and performs the audit to obtain reasonable assurance about whether the accounts are free from material misstatement and whether the underlying transactions are legal and regular. |
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7.

7.

The Court conducted its audit in accordance with the IFAC and ISSAI (10

| 8. | The Court’s audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the accounts and about the legality and regularity of the transactions underlying them. The procedures selected depend on its audit judgement including the assessment of the risks of material misstatement of the accounts or of illegal or irregular transactions, whether due to fraud or error. In making those risk assessments internal control relevant to the entity’s preparation and presentation of accounts is considered in order to design audit procedures that are appropriate in the circumstances. The Court’s audit also includes evaluating the appropriateness of accounting policies used and, the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the accounts. |
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8.

8.

The Court’s audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the accounts and about the legality and regularity of the transactions underlying them. The procedures selected depend on its audit judgement including the assessment of the risks of material misstatement of the accounts or of illegal or irregular transactions, whether due to fraud or error. In making those risk assessments internal control relevant to the entity’s preparation and presentation of accounts is considered in order to design audit procedures that are appropriate in the circumstances. The Court’s audit also includes evaluating the appropriateness of accounting policies used and, the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the accounts.

| 9. | The Court believes that the audit evidence obtained is sufficient and appropriate to provide a basis for the opinions set out below. |
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9.

9.

The Court believes that the audit evidence obtained is sufficient and appropriate to provide a basis for the opinions set out below.

Opinion on the reliability of the accounts

Opinion on the reliability of the accounts

| 10. | In the Court’s opinion, the Authority’s Annual Accounts (11) present fairly, in all material respects, its financial position as of 31 December 2008 and the results of its operations and its cash flows for the year then ended, in accordance with the provisions of its Financial Regulation. |
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10.

10.

In the Court’s opinion, the Authority’s Annual Accounts (11

Emphasis of matter

Emphasis of matter

| 11. | The Court draws attention to the matters described in paragraph 12.The Court’s opinion on the reliability of the accounts is not qualified in respect of this matter. |
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11.

11.

The Court draws attention to the matters described in paragraph 12.The Court’s opinion on the reliability of the accounts is not qualified in respect of this matter.

| 12. | In spite of the entry into force on 25 July 2008 of Regulation (EC) No 683/2008 of the European Parliament and of the Council, no activities or assets had been transferred to the Commision by the end of 2008. The Authority has decided to present (12) the results of its activities without taking into account the fact that the Authority’s management of the Galileo and EGNOS programmes would be discontinued after the finalisation of the transfer of assets and funds to the Commission foreseen at the end of the first quarter of 2009. |
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12.

In spite of the entry into force on 25 July 2008 of Regulation (EC) No 683/2008 of the European Parliament and of the Council, no activities or assets had been transferred to the Commision by the end of 2008. The Authority has decided to present (12) the results of its activities without taking into account the fact that the Authority’s management of the Galileo and EGNOS programmes would be discontinued after the finalisation of the transfer of assets and funds to the Commission foreseen at the end of the first quarter of 2009.

12

Opinion on the legality and the regularity of the transactions underlying the accounts

Opinion on the legality and the regularity of the transactions underlying the accounts

| 13. | In the Court’s opinion, the transactions underlying the Authority’s annual accounts for the financial year ended 31 December 2008 are, in all material respects, legal and regular. |
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13.

13.

In the Court’s opinion, the transactions underlying the Authority’s annual accounts for the financial year ended 31 December 2008 are, in all material respects, legal and regular.

Emphasis of matter

Emphasis of matter

| 14. | The Court draws attention to the matter described in paragraph 15. The Court’s opinion on the legality and regularity of the transactions underlying the Authority’s annual accounts is not qualified in respect of this matter. |
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14.

The Court draws attention to the matter described in paragraph 15. The Court’s opinion on the legality and regularity of the transactions underlying the Authority’s annual accounts is not qualified in respect of this matter.

| 15. | Regulation (EC) No 683/2008 came into force on 25 July 2008 which implied that the Authority was no longer responsible for the management of the Galileo and EGNOS programmes. Despite this, the Commission transferred 95 million euro to the Authority’s bank account on 24 December 2008 (13). No proper amending budget was established. |
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15.

15.

Regulation (EC) No 683/2008 came into force on 25 July 2008 which implied that the Authority was no longer responsible for the management of the Galileo and EGNOS programmes. Despite this, the Commission transferred 95 million euro to the Authority’s bank account on 24 December 2008 (13

| 16. | The comments which follow do not call the Court’s opinions into question. |
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16.

16.

The comments which follow do not call the Court’s opinions into question.

COMMENTS ON THE BUDGETARY AND FINANCIAL MANAGEMENT

COMMENTS ON THE BUDGETARY AND FINANCIAL MANAGEMENT

| 17. | The very significant reduction of the Authority’s budget adopted in 2008, from 436,5 million euro in 2007 to the budget of 22,7 million euro was linked to the entry into force on 25 July 2008 of Regulation (EC) No 683/2008 of the European Parliament and of the Council. According to this Regulation the Commission is responsible for the management of the funds and the implementation of the European satellite navigation programmes (EGNOS and Galileo). No activities or assets had been transferred to the Commission by the end of 2008 and the new split of responsibilities between the Commission and the Authority was not reflected in their respective annual accounts. |
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17.

The very significant reduction of the Authority’s budget adopted in 2008, from 436,5 million euro in 2007 to the budget of 22,7 million euro was linked to the entry into force on 25 July 2008 of Regulation (EC) No 683/2008 of the European Parliament and of the Council. According to this Regulation the Commission is responsible for the management of the funds and the implementation of the European satellite navigation programmes (EGNOS and Galileo). No activities or assets had been transferred to the Commission by the end of 2008 and the new split of responsibilities between the Commission and the Authority was not reflected in their respective annual accounts.

| 18. | As a consequence, the Authority’s accounts show an amount of 58,4 million euro as prefinancings received from the Commission. This amount should have been considered as a debt towards the Commission. Moreover, the accounts should not include 55,6 million euro of payables to the European Space Agency which result from the European Communities contributions to the Galileo IOV and EGNOS programmes which are of the Commission’s responsibility. |
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18.

As a consequence, the Authority’s accounts show an amount of 58,4 million euro as prefinancings received from the Commission. This amount should have been considered as a debt towards the Commission. Moreover, the accounts should not include 55,6 million euro of payables to the European Space Agency which result from the European Communities contributions to the Galileo IOV and EGNOS programmes which are of the Commission’s responsibility.

This report was adopted by the Court of Auditors in Luxembourg at its meeting of 8 October 2009.

For the Court of Auditors

Vítor Manuel da SILVA CALDEIRA

President

Table

European GNSS Supervisory Authority (Brussels)

| Areas of Community competence deriving from the Treaty | The Authority’s powers as defined in Council Regulation (EC) No 1321/2004 and as amended by Regulation (EC) No 683/2008 of the European Parliament and of the Council | Governance | Resources made available to the Authority in 2008

  (Data 2007) | Products and services 1.1.2008 to 8.7.2008 |
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| Competitiveness for growth and employment. | Objectives







  — | To manage the public interests relating to the European GNSS programmes. |

Areas of Community competence deriving from the Treaty

The Authority’s powers as defined in Council Regulation (EC) No 1321/2004 and as amended by Regulation (EC) No 683/2008 of the European Parliament and of the Council

Governance

Resources made available to the Authority in 2008

(Data 2007)

Products and services 1.1.2008 to 8.7.2008

Competitiveness for growth and employment.

Objectives

—

To manage the public interests relating to the European GNSS programmes.

| — | To be the regulatory authority for the European GNSS programmes. |
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—

To be the regulatory authority for the European GNSS programmes.

Tasks

The Authority shall:

| (a) | ensure security accreditation and the operation of the Galileo security centre; |
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(a)

ensure security accreditation and the operation of the Galileo security centre;

| (b) | contribute to the preparation of the commercialisation of the systems, including the necessary market analysis; |
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(b)

contribute to the preparation of the commercialisation of the systems, including the necessary market analysis;

| (c) | accomplish other tasks that may be entrusted to it by the Commission. |
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(c)

accomplish other tasks that may be entrusted to it by the Commission.

1 —   Administrative Board

Composition

| — | one representative per Member State, |
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—

one representative per Member State,

| — | one representative from the Commission. |
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—

one representative from the Commission.

Tasks

| — | Appoints the Director, |
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—

Appoints the Director,

| — | adopts the annual work programme, |
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—

adopts the annual work programme,

| — | adopts the budget, |
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—

adopts the budget,

| — | adopts the annual report on the activities and prospects of the Authority. |
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—

adopts the annual report on the activities and prospects of the Authority.

2 —   Executive Director

Appointed by the Administrative Board.

3 —   System Safety and Security Committee

Composed of one representative per Member State and one representative from the Commission.

4 —   External audit

Court of Auditors.

5 —   Discharge authority

European Parliament on a recommendation by the Council.

Budget

22,7 million euro (436,5 million euro)

Staff at 31 December 2008

50 (46) establishment plan posts of which filled: 49 (39) + 10 (3) other servants (contract agents ad seconded national agents and interim staff)

Number of staff

52 (49) of which assuming:

| — | operational tasks: 31 (30), |
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—

operational tasks: 31 (30),

| — | administrative tasks: 13 (11), |
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—

administrative tasks: 13 (11),

| — | mixed tasks: 8 (8). |
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—

mixed tasks: 8 (8).

Galileo system

| — | Management of the Configuration Control Board, control of the coherence of the Mission Requirements Document (MRD) and the System Requirements Document (SRD), coordination with ESA and the European Commission, |
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—

Management of the Configuration Control Board, control of the coherence of the Mission Requirements Document (MRD) and the System Requirements Document (SRD), coordination with ESA and the European Commission,

| — | definition and procurement of tools for modelling and analysis of RNSS signals, |
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—

definition and procurement of tools for modelling and analysis of RNSS signals,

| — | analysis of intra and inter-system interference and link budgets, |
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—

analysis of intra and inter-system interference and link budgets,

| — | follow-up of the project management by ESA for the IOV, |
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—

follow-up of the project management by ESA for the IOV,

| — | assistance to the Commission in the supervision of the deployment phase and on frequency coordination, |
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—

assistance to the Commission in the supervision of the deployment phase and on frequency coordination,

| — | system certification — selection, nomination and supervision of the Galileo certification bodies, |
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—

system certification — selection, nomination and supervision of the Galileo certification bodies,

| — | designing of the Galileo safety case, |
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—

designing of the Galileo safety case,

| — | preparation of ICAO Standards and Recommended Practices (SARPS) for Galileo. |
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—

preparation of ICAO Standards and Recommended Practices (SARPS) for Galileo.

EGNOS system

| — | Control of the Mission Requirements Document, assessment and approval of new requirements, coordination with ESA and the EGNOS Service Provider, |
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—

Control of the Mission Requirements Document, assessment and approval of new requirements, coordination with ESA and the EGNOS Service Provider,

| — | follow-up of the Operational Qualification Review, |
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—

follow-up of the Operational Qualification Review,

| — | preparation of the monitoring of the EGNOS system performance, |
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—

preparation of the monitoring of the EGNOS system performance,

| — | implementation of the extension to the Mediterranean region, |
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—

implementation of the extension to the Mediterranean region,

| — | supervision of the completion of the EGNOS Design Safety Case and EGNOS Operations Safety Case, |
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—

supervision of the completion of the EGNOS Design Safety Case and EGNOS Operations Safety Case,

| — | supervision of the process for the certification of the service provider, |
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—

supervision of the process for the certification of the service provider,

| — | extension of the system certification to other domains of utilisation than the civil aviation. |
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—

extension of the system certification to other domains of utilisation than the civil aviation.

Programmes

| — | Support to the European Commission in the implementation of the EGNOS and Galileo programmes, |
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—

Support to the European Commission in the implementation of the EGNOS and Galileo programmes,

| — | establisment of the EGNOS Service Provision contract and monitoring of its implementation, |
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—

establisment of the EGNOS Service Provision contract and monitoring of its implementation,

| — | definition of EGNOS’ performance indicators and of various elements of the EGNOS services, |
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—

definition of EGNOS’ performance indicators and of various elements of the EGNOS services,

| — | EGNOS third party liability — protection of the GSA and Community exposure to liability stemming from the provision of EGNOS signals in space, in line with the European GNSS liability policy. |
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—

EGNOS third party liability — protection of the GSA and Community exposure to liability stemming from the provision of EGNOS signals in space, in line with the European GNSS liability policy.

Security

| — | Security accreditation of the systems, |
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—

Security accreditation of the systems,

| — | assisting the Commission in preparing the operation of the GNSS Security Monitoring Centre (GSMC), |
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—

assisting the Commission in preparing the operation of the GNSS Security Monitoring Centre (GSMC),

| — | research and development to ensure compliance of GNSS service with security requirements of safety critical applications, |
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—

research and development to ensure compliance of GNSS service with security requirements of safety critical applications,

| — | definition of the specifications and instructions for manufacturing PRS receivers and of guidelines for the implementation of PRS management rules in the Member States. |
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—

definition of the specifications and instructions for manufacturing PRS receivers and of guidelines for the implementation of PRS management rules in the Member States.

Market development

| — | Recommendations and actions regarding the development of markets for EGNOS and Galileo, |
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—

Recommendations and actions regarding the development of markets for EGNOS and Galileo,

| — | assessment of the environment in which satellite navigation applications can develop, propose strategies and encourage market take up: definition of market development tools. |
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—

assessment of the environment in which satellite navigation applications can develop, propose strategies and encourage market take up: definition of market development tools.

Research and development

| — | Management of projects under the Sixth Framework Programme and Seventh Framework Programme for research, |
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—

Management of projects under the Sixth Framework Programme and Seventh Framework Programme for research,

| — | implementation/update of a web-based knowledge management and dissemination tool. |
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—

implementation/update of a web-based knowledge management and dissemination tool.

Source: Information supplied by the Authority.

THE AUTHORITY’S REPLIES

| 17 and 18. | The activities were transferred with effect on 1 January 2009, as requested by the Commission. The scope of assets to be transferred was endorsed by the Authority’s Administrative Board on 19 March 2009, but the modalities of the transfer could not be agreed with the Commission before the end of June. The GSA has requested the Commission, on 3 July 2009, to formally confirm its acceptance of the transfer of assets with effect on 31 July 2009. |
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17 and 18.

The activities were transferred with effect on 1 January 2009, as requested by the Commission. The scope of assets to be transferred was endorsed by the Authority’s Administrative Board on 19 March 2009, but the modalities of the transfer could not be agreed with the Commission before the end of June. The GSA has requested the Commission, on 3 July 2009, to formally confirm its acceptance of the transfer of assets with effect on 31 July 2009.

Therefore, the presentation of the accounts 2008 was affected by the above and could not reflect the changes that should take place after the balance sheet date.

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(1)  OJ L 246, 20.7.2004, p. 1.

1

(2)  OJ L 196, 24.7.2008, p. 1.

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(3)  The Table summarises the Authority’s competences and activities. It is presented for information purposes.

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Table

(4)  These accounts are accompanied by a report on the budgetary and financial management during the year which gives inter alia an account of the rate of implementation of the appropriations with summary information on the transfers of appropriations among the various budget items.

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(5)  The financial statements include the balance sheet and the economic outturn account, the cash-flow table, the statement of changes in capital and the annex to the financial statements which includes the description of the significant accounting policies and other explanatory information.

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(6)  The budget implementation reports comprise the budget outturn account and its annex.

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

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(8)  Article 33 of Commission Regulation (EC, Euratom) No 2343/2002 of 23 December 2002 (OJ L 357, 31.12.2002, p. 72).

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(9)  Article 38 of Regulation (EC, Euratom) No 2343/2002.

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(10)  International Federation of Accountants (IFAC) and International Standards of Supreme Audit Institutions (ISSAI).

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(11)  The Final Annual Accounts were drawn up on 16 June 2009 and received by the Court on 19 June 2009. The Final Annual Accounts, consolidated with those of the Commission are published in the Official Journal of the European Union by 15 November of the following year. These can be found on the following website http://eca.europa.eu or http://www.gsa.europa.eu

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Official Journal of the European Union

(12)  ‘Principal events and key points’, page 3 of the Authority’s Annual Accounts.

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(13)  See, also, Note 8 to the Authority’s Annual Accounts, page 17.

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