# C_2009304EN.01003801.xml

| 15.12.2009 | EN | Official Journal of the European Union | C 304/38 |
| --- | --- | --- | --- |

15.12.2009

EN

Official Journal of the European Union

C 304/38

---

REPORT

REPORT

on the annual accounts of the European Agency for the Management of Operational Cooperation at the External Borders of the Member States for the financial year 2008, together with the Agency’s replies

2009/C 304/08

CONTENTS

CONTENTS

| | Paragraph | Page |
| --- | --- | --- |
| INTRODUCTION ... | 1-2 | 39 |
| STATEMENT OF ASSURANCE ... | 3-12 | 39 |
| COMMENTS ON THE BUDGETARY AND FINANCIAL MANAGEMENT ... | 13-17 | 40 |
| OTHER MATTERS ... | 18 | 40 |
| Table ... | 41 |
| The Agency’s replies ... | 42 |

Paragraph

Paragraph

Page

Page

INTRODUCTION ...

1-2

39

STATEMENT OF ASSURANCE ...

3-12

39

COMMENTS ON THE BUDGETARY AND FINANCIAL MANAGEMENT ...

13-17

40

OTHER MATTERS ...

18

40

Table ...

41

The Agency’s replies ...

The Agency’s replies

42

INTRODUCTION

INTRODUCTION

| 1. | The European Agency for the Management of Operational Cooperation at the External Borders of the Members States (hereinafter ‘the Agency’), located in Warsaw, was created by Council Regulation (EC) No 2007/2004 of 26 October 2004 (1). The Agency’s main task is to coordinate the Member States activities in the field of the management of external borders (support for operational cooperation, technical and operational assistance, risk analysis) (2). |
| --- | --- |

1.

The European Agency for the Management of Operational Cooperation at the External Borders of the Members States (hereinafter ‘the Agency’), located in Warsaw, was created by Council Regulation (EC) No 2007/2004 of 26 October 2004 (1). The Agency’s main task is to coordinate the Member States activities in the field of the management of external borders (support for operational cooperation, technical and operational assistance, risk analysis) (2).

1

2

| 2. | The Agency’s 2008 budget amounted to 71,2 million euro compared with 42,2 million euro the previous year. The number of staff employed by the Agency at the end of the year was 185 as compared with 132 the previous year. |
| --- | --- |

2.

The Agency’s 2008 budget amounted to 71,2 million euro compared with 42,2 million euro the previous year. The number of staff employed by the Agency at the end of the year was 185 as compared with 132 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 (3) of the Agency, which comprise the ‘financial statements’ (4) and the ‘reports on implementation of the budget’ (5) for the financial year ended 31 December 2008 and the legality and regularity of the transactions underlying those accounts. |
| --- | --- |

3.

3.

Pursuant to the provisions of Article 248 of the Treaty the Court has audited the annual accounts (3

4

5

| 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 (6). |
| --- | --- |

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 (6

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 Agency under his own responsibility and within the limits of authorised appropriations (7). The Director is responsible for putting in place (8) the organisational structure and the internal management and control systems and procedures relevant for drawing up final accounts (9) 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. |
| --- | --- |

5.

5.

As authorising officer, the Director implements the revenue and expenditure of the budget in accordance with the financial rules of the Agency under his own responsibility and within the limits of authorised appropriations (7

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 Agency and the legality and regularity of the transactions underlying them. |
| --- | --- |

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 Agency 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. |
| --- | --- |

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. |
| --- | --- |

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. |
| --- | --- |

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 Agency’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. |
| --- | --- |

10.

10.

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

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

| 11. | In the Court’s opinion, the transactions underlying the annual accounts of the Agency for the financial year ended 31 December 2008 are, in all material respects, legal and regular. |
| --- | --- |

11.

11.

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

| 12. | The comments which follow do not call the Court’s opinions into question. |
| --- | --- |

12.

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

| 13. | In 2008, the budget increased by 29 million euro, nearly 69 % compared with the previous year. Considering that an equivalent amount of appropriations (30,3 million euro) had to be carried forward and that 13 million euro of appropriations had to be cancelled, the Agency did not have the capacity to cope with such a significant increase of its budget. |
| --- | --- |

13.

In 2008, the budget increased by 29 million euro, nearly 69 % compared with the previous year. Considering that an equivalent amount of appropriations (30,3 million euro) had to be carried forward and that 13 million euro of appropriations had to be cancelled, the Agency did not have the capacity to cope with such a significant increase of its budget.

| 14. | Amongst the 26,8 million euro of commitments for operational expenditures (title III) carried forward 0,85 million euro related to elapsed operations which should have been decommitted. |
| --- | --- |

14.

Amongst the 26,8 million euro of commitments for operational expenditures (title III) carried forward 0,85 million euro related to elapsed operations which should have been decommitted.

| 15. | More than 17 million euro were paid out in 2008 on the basis of unilateral grant decisions signed only by the Agency. This type of instrument was not foreseen, in the rules in force for Agencies. Article 75(2) of Commission Regulation (EC, Euratom) No 652/2008 of 9 July 2008 (12) requires that grants must be covered by written agreements between the Agency and the beneficiary. Moreover, these decisions were frequently signed by the Agency after the activities have commenced or have even been completed. |
| --- | --- |

15.

More than 17 million euro were paid out in 2008 on the basis of unilateral grant decisions signed only by the Agency. This type of instrument was not foreseen, in the rules in force for Agencies. Article 75(2) of Commission Regulation (EC, Euratom) No 652/2008 of 9 July 2008 (12) requires that grants must be covered by written agreements between the Agency and the beneficiary. Moreover, these decisions were frequently signed by the Agency after the activities have commenced or have even been completed.

12

| 16. | Legal commitments were entered into before the corresponding budgetary commitments. By the end of the year 49 ex-post commitments (13) were registered in the register of exceptions. This high number of exceptions shows a recurrent problem in the Agency’s commitment system. |
| --- | --- |

16.

Legal commitments were entered into before the corresponding budgetary commitments. By the end of the year 49 ex-post commitments (13) were registered in the register of exceptions. This high number of exceptions shows a recurrent problem in the Agency’s commitment system.

13

| 17. | The implementing rules to the Staff Regulations have not yet been adopted. For the recruitment procedures audited, the selection criteria and the threshold scores for passing to the next stage of the selection process had not been decided upon before the start of the evaluation process and the recruitment files were not always complete. This situation did not ensure transparent and non-discriminatory procedures. |
| --- | --- |

17.

The implementing rules to the Staff Regulations have not yet been adopted. For the recruitment procedures audited, the selection criteria and the threshold scores for passing to the next stage of the selection process had not been decided upon before the start of the evaluation process and the recruitment files were not always complete. This situation did not ensure transparent and non-discriminatory procedures.

OTHER MATTERS

OTHER MATTERS

| 18. | The Agency did not prepare a multiannual work programme and its annual work programme did not correspond to its budget. Budget modifications were made without a revision of the work programme even when the impact was significant. The introduction of an activity based budgeting system would make it easier to establish a clear link between the work programme and the financial forecasts. |
| --- | --- |

18.

The Agency did not prepare a multiannual work programme and its annual work programme did not correspond to its budget. Budget modifications were made without a revision of the work programme even when the impact was significant. The introduction of an activity based budgeting system would make it easier to establish a clear link between the work programme and the financial forecasts.

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 Agency for the Management of Operational Cooperation at the External Borders (Warsaw)

| Areas of Community competence deriving from the Treaty | Competences of the Agency as defined in Council Regulation (EC) No 2007/2004 | Governance | Resources made available to the Agency in 2008

  (Data for 2007) | Products and services supplied in 2008 |
| --- | --- | --- | --- | --- |
| The Community policy in this area aims at developing common standards and procedures with regard to carrying out checks on persons crossing the external borders of the Member States; furthermore measures should be taken to ensure cooperation between the relevant departments of the administrations of the Member States in the areas covered by this title, as well as between the Member States and the Commission.

  (Articles 62(2)(a) and 66 of the Treaty) | Objectives

  Frontex was established with a view to improving the integrated management of the external borders of the Member States of the EU.
  Frontex must:






  (a) | Facilitate and render more effective the application of existing and future Community measures relating to the management of external borders. |

Areas of Community competence deriving from the Treaty

Competences of the Agency as defined in Council Regulation (EC) No 2007/2004

Governance

Resources made available to the Agency in 2008

(Data for 2007)

Products and services supplied in 2008

The Community policy in this area aims at developing common standards and procedures with regard to carrying out checks on persons crossing the external borders of the Member States; furthermore measures should be taken to ensure cooperation between the relevant departments of the administrations of the Member States in the areas covered by this title, as well as between the Member States and the Commission.

(Articles 62(2)(a) and 66 of the Treaty)

Objectives

Frontex was established with a view to improving the integrated management of the external borders of the Member States of the EU.

Frontex must:

(a)

Facilitate and render more effective the application of existing and future Community measures relating to the management of external borders.

| (b) | Ensure the coordination of Member States′ actions in the implementation of those measures, thereby contributing to an efficient, high and uniform level of control on persons and surveillance of the external borders of the Member States. |
| --- | --- |

(b)

Ensure the coordination of Member States′ actions in the implementation of those measures, thereby contributing to an efficient, high and uniform level of control on persons and surveillance of the external borders of the Member States.

| (c) | Provide the Commission and the Member States with the necessary technical support and expertise in the management of the external borders and promote solidarity between Member States. |
| --- | --- |

(c)

Provide the Commission and the Member States with the necessary technical support and expertise in the management of the external borders and promote solidarity between Member States.

Main tasks

| 1. | to coordinate operational cooperation between Member States in the field of management of external borders; |
| --- | --- |

1.

to coordinate operational cooperation between Member States in the field of management of external borders;

| 2. | to assist Member States on training of national border guards and establish common training standards; |
| --- | --- |

2.

to assist Member States on training of national border guards and establish common training standards;

| 3. | to carry out risk analysis; |
| --- | --- |

3.

to carry out risk analysis;

| 4. | to follow up on the development of research in control and surveillance; |
| --- | --- |

4.

to follow up on the development of research in control and surveillance;

| 5. | to assist Member States in circumstances requiring increased technical and operational assistance; |
| --- | --- |

5.

to assist Member States in circumstances requiring increased technical and operational assistance;

| 6. | to provide Member States with the necessary support in organising joint return operations. |
| --- | --- |

6.

to provide Member States with the necessary support in organising joint return operations.

1 —   Management Board

Composed of:

| — | one representative of each Member State, |
| --- | --- |

—

one representative of each Member State,

| — | two representatives from the Commission, |
| --- | --- |

—

two representatives from the Commission,

| — | one representative per Schengen associated country (Norway, Iceland) with a limited right to vote. |
| --- | --- |

—

one representative per Schengen associated country (Norway, Iceland) with a limited right to vote.

2 —   Executive Director

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

3 —   External audit

European Court of Auditors.

4 —   Discharge Authority

Parliament acting on recommendation by the Council.

Budget

71,2 million euro (42,2 million euro)

| — | Community contribution 68,0 million euro – (41 million euro) |
| --- | --- |

—

Community contribution 68,0 million euro – (41 million euro)

Staff numbers at 31 December 2008

| — | Establishment plan: 94 (49) |
| --- | --- |

—

Establishment plan: 94 (49)

| — | Occupied: 75 (48) |
| --- | --- |

—

Occupied: 75 (48)

Other posts:

Contract staff planned 50 (20)

Contract staff occupied 44 (18)

SNE’s planned: 70 (67)

SNE’s occupied: 66 (61)

Total staff number: 185 (132)

Assigned to the following tasks:

| — | operational: 112 (103) |
| --- | --- |

—

operational: 112 (103)

| — | administrative: 73 (29) |
| --- | --- |

—

administrative: 73 (29)

Risk Analysis has produced assessments, quarterly reports, weekly evaluations, briefings, notes and other information papers.

On the Operational Cooperation side, 30 joint operations and 10 return operations were organised. Seven pilot projects were launched.

Training has continued with 192 activities involving 3 200 border guards.

Research & Development activities produced reports, bulletins, studies, 48 conferences and 6 projects were initiated.

Cooperation with Non-EU countries included the conclusion of working arrangements with Albania, Serbia, Montenegro, Bosnia and Herzegovina, the USA, Brazil, Croatia, Moldova, Georgia and the former Yugoslav Republic of Macedonia. A cooperation Plan with the Russian Federation was signed.

Cooperation with EUROPOL and other relevant organisations and the European Commission has continued and has been strengthened.

Source: Information supplied by the Agency.

THE AGENCY’S REPLIES

| 13. | The increase of 29 million euro left limited time to implement the additional activities. Substantial progress is expected in the level of utilisation of appropriations in 2009 and the coming years. |
| --- | --- |

13.

The increase of 29 million euro left limited time to implement the additional activities. Substantial progress is expected in the level of utilisation of appropriations in 2009 and the coming years.

| 14. | The Agency takes note of the Court’s comment. Corrections were made to the final annual financial statements. The Agency will also take additional measures to reinforce controls on commitments to be carried forward. |
| --- | --- |

14.

The Agency takes note of the Court’s comment. Corrections were made to the final annual financial statements. The Agency will also take additional measures to reinforce controls on commitments to be carried forward.

| 15. | A new Framework Partnership Agreement (FPA) was drafted in cooperation with the border authorities of the Member States. New FPAs are being signed with all border authorities that will participate in Frontex coordinated joint operations. The new system is expected to be in force by mid-2009 onwards. If in exceptional circumstances a grant is signed after activities have commenced, it will be entered in the register of exceptions (see point 16). |
| --- | --- |

15.

A new Framework Partnership Agreement (FPA) was drafted in cooperation with the border authorities of the Member States. New FPAs are being signed with all border authorities that will participate in Frontex coordinated joint operations. The new system is expected to be in force by mid-2009 onwards. If in exceptional circumstances a grant is signed after activities have commenced, it will be entered in the register of exceptions (see point 16).

| 16. | The introduction of measures to reduce the number of exceptions in 2008 has led to a significant decrease in the number of exceptions registered. In the period from January-end of May 2009, compared to the same period last year, there is a reduction of 50 % in the number of exceptions. |
| --- | --- |

16.

The introduction of measures to reduce the number of exceptions in 2008 has led to a significant decrease in the number of exceptions registered. In the period from January-end of May 2009, compared to the same period last year, there is a reduction of 50 % in the number of exceptions.

| 17. | The adoption of missing Implementing Rules to the Staff Regulation has been set up as a priority objective for 2009. At the end of 2009 Frontex shall have the most important implementing rules to the staff regulation adopted. For the recruitment corrective actions have been taken in 2009. |
| --- | --- |

17.

The adoption of missing Implementing Rules to the Staff Regulation has been set up as a priority objective for 2009. At the end of 2009 Frontex shall have the most important implementing rules to the staff regulation adopted. For the recruitment corrective actions have been taken in 2009.

| 18. | Frontex Regulation does not foresee a multiannual programme. However, in June 2009, the Frontex Management Board has agreed on a Multiannual Plan for the period 2010-2013.
  In addition, Frontex and the Management Board have drafted a proposal to the EC to introduce in its founding regulation a provision related to the implementation of a Strategy/Multiannual Plan. |
| --- | --- |

18.

Frontex Regulation does not foresee a multiannual programme. However, in June 2009, the Frontex Management Board has agreed on a Multiannual Plan for the period 2010-2013.

In addition, Frontex and the Management Board have drafted a proposal to the EC to introduce in its founding regulation a provision related to the implementation of a Strategy/Multiannual Plan.

Additional efforts have also been made to ensure consistency between the annual work programme, the budget and the establishment plan.

---

(1)  OJ L 349, 25.11.2004, p. 1.

1

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

2

Table

(3)  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.

3

(4)  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.

4

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

5

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

6

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

7

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

8

(9)  The rules concerning the presentation of the accounts and accounting by the Agencies are laid down in Chapter 1 of Title VII of Regulation (EC, Euratom) No 2343/2002 as last amended by Commission Regulation (EC, Euratom) No 652/2008 of 9 July 2008 (OJ L 181, 10.7.2008, p. 23) and are integrated as such in the Financial Regulation of the Agency.

9

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

10

(11)  The Final Annual Accounts were drawn up on 25 June 2009 and received by the Court on 2 July 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.frontex.europa.eu/finance/

11

Official Journal of the European Union

(12)  OJ L 181, 10.7.2008, p. 23.

12

(13)  With a total value of more than 1 million euro.

13

---