# C_2009254EN.01000101.xml

| 23.10.2009 | EN | Official Journal of the European Union | C 254/1 |
| --- | --- | --- | --- |

23.10.2009

EN

Official Journal of the European Union

C 254/1

---

REPORT BY THE EXTERNAL AUDITOR ON THE COURT OF AUDITORS’ ACCOUNTS FOR THE FINANCIAL YEAR 2008

REPORT BY THE EXTERNAL AUDITOR ON THE COURT OF AUDITORS’ ACCOUNTS FOR THE FINANCIAL YEAR 2008

(2009/C 254/01)

NOTE TO READERS

Without prejudice to the provisions of Article 248 of the Treaty establishing the European Community, which gives the Court of Auditors responsibility for auditing all of the Community’s revenue and expenditure, and the provisions of Article 276 of the said Treaty on the granting of the discharge, the Court of Auditors has had its revenue and expenditure accounts audited by an external auditor every year since the close of the financial year 1987.

The reports which the external auditor of the Court of Auditors drew up in respect of the Court’s accounts for the financial years 1987 to 1991 were sent only to the Chairman of the European Parliament’s Budgetary Control Committee.

Pursuant to a decision taken by the Members of the Court of Auditors at the Court meeting of 8 July 1993, the external auditor’s reports have since been published in the Official Journal of the European Union, starting with the report on the financial year 1992.

Official Journal of the European Union

For the Court of Auditors

Eduardo RUIZ GARCÍA

Secretary-General of the European Court of Auditors

---

FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2008

CONTENTS

Report of the Independent Auditor

Balance sheet

Economic outturn account

Cash flow statement

Statement of changes in equity

Accounting policies and notes to the financial statements

| 1. | General |
| --- | --- |

1.

General

| 2. | Significant accounting policies and presentation of the financial statements |
| --- | --- |

2.

Significant accounting policies and presentation of the financial statements

| 3. | Notes to the balance sheet |
| --- | --- |

3.

Notes to the balance sheet

| 4. | Notes to the economic outturn account |
| --- | --- |

4.

Notes to the economic outturn account

| 5. | Off balance sheet |
| --- | --- |

5.

Off balance sheet

Independent Assurance report

Independent Auditor’s report

To the Management of

European Court of Auditors

We have audited the accompanying financial statements of the European Court of Auditors, which comprise the balance sheet as at 31 December 2008, the economic outturn account, statement of changes in equity and cash flow statement for the year then ended and a summary of significant accounting policies and other explanatory notes.

Managements’ responsibility for the financial statements

The management of the European Court of Auditors are responsible for the preparation and fair presentation of these financial statements in accordance with Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002, the Commission Regulation (EC, Euratom) No 2342/2002 of 23 December 2002 laying down detailed rules for the implementation of the said Council Regulation, and the European Court of Auditors’ Accounting Rules. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor’s responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing as adopted by the ‘Institut des Réviseurs d'Entreprises’. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the Auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the Auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control.

An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Management of the European Court of Auditors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, these financial statements give a true and fair view of the financial position of the European Court of Auditors as of 31 December 2008 and of its financial performance and its cash flows for the year then ended in accordance with Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 and Commission Regulation (EC, Euratom) No 2342/2002 of 23 December 2002 laying down detailed rules for the implementation of the said Council Regulation and the European Court of Auditors’ Accounting Rules.

Luxembourg, 26 June 2009.

PricewaterhouseCoopers SARL

Réviseur d'entreprises

Represented by

Marianne WEYDERT

Balance sheet as of 31 December 2008

The accompanying notes form an integral part of these financial statements.

| (EUR) |
| --- |
| Assets | Note | 31 December 2008 | 31 December 2007 |
| Intangible fixed assets | 3.1. | 417 792 | 209 449 |
| Tangible fixed assets | 3.2. | 35 080 585 | 33 283 667 |
| Long-term receivables | | 525 | 550 |
| Total non-current assets | | 35 498 902 | 33 493 666 |
| Short-term receivables | 3.3. | 1 455 781 | 1 679 772 |
| Cash and cash equivalents | 3.4. | 1 488 625 | 2 012 791 |
| Total current assets | | 2 944 406 | 3 692 563 |
| Total assets | | 38 443 308 | 37 186 229 |

(EUR)

Assets

Note

31 December 2008

31 December 2007

Intangible fixed assets

3.1.

417 792

209 449

Tangible fixed assets

3.2.

35 080 585

33 283 667

Long-term receivables

525

550

Total non-current assets

35 498 902

33 493 666

Short-term receivables

3.3.

1 455 781

1 679 772

Cash and cash equivalents

3.4.

1 488 625

2 012 791

Total current assets

2 944 406

3 692 563

Total assets

38 443 308

37 186 229

| (EUR) |
| --- |
| Liabilities | Note | 31 December 2008 | 31 December 2007 |
| Capital | | –22 012 092 | –13 098 711 |
| Accumulated deficit | | –13 098 711 | –11 418 315 |
| Economic result of the year — profit+/loss– | | –8 913 381 | –1 680 396 |
| Employee benefits | 3.5. | 52 533 398 | 41 867 460 |
| Other long-term liabilities | 3.6. | 175 000 | 175 000 |
| Total non-current liabilities | | 52 708 398 | 42 042 460 |
| Provisions for risks and charges | 3.7. | — | — |
| Accounts payable | 3.8. | 7 747 002 | 8 242 480 |
| Total current liabilities | | 7 747 002 | 8 242 480 |
| Total liabilities | | 38 443 308 | 37 186 229 |

(EUR)

Liabilities

Note

31 December 2008

31 December 2007

Capital

–22 012 092

–13 098 711

Accumulated deficit

–13 098 711

–11 418 315

Economic result of the year — profit+/loss–

–8 913 381

–1 680 396

Employee benefits

3.5.

52 533 398

41 867 460

Other long-term liabilities

3.6.

175 000

175 000

Total non-current liabilities

52 708 398

42 042 460

Provisions for risks and charges

3.7.

—

—

Accounts payable

3.8.

7 747 002

8 242 480

Total current liabilities

7 747 002

8 242 480

Total liabilities

38 443 308

37 186 229

Economic outturn account for the year ended 31 December 2008

| (EUR) |
| --- |
| | Note | 2008 | 2007 |
| Funds transferred from the Commission to other institutions | 4.1. | 97 366 264 | 90 474 401 |
| Revenues from administrative operations | 4.2. | 17 487 342 | 16 339 509 |
| Other operating revenue | 4.3. | 143 540 | 210 887 |
| Total operating revenue | | 114 997 147 | 107 024 797 |
| Staff expenses | 4.4. | –88 868 529 | –84 209 144 |
| Fixed asset related expenses | 3.1.-3.2. & 4.5. | –3 307 315 | –3 426 683 |
| Other administrative expenses | 4.6. | –19 074 703 | –21 386 771 |
| Operational expenses | | –74 871 | –32 486 |
| Total operating expenses | | – 111 325 418 | – 109 055 084 |
| Surplus/(deficit) from operating activities | | 3 671 729 | –2 030 287 |
| Financial revenues | 4.7. | 193 432 | 105 517 |
| Financial expenses | 4.8. | –15 067 | –15 096 |
| Movement in pensions (– expense, + revenue) | 3.5. & 4.9. | –12 763 475 | 259 470 |
| Surplus/(deficit) from non operating activities | | –12 585 110 | 349 891 |
| Economic result of the year | | –8 913 381 | –1 680 396 |
| The accompanying notes form an integral part of these financial statements. |

(EUR)

Note

2008

2007

Funds transferred from the Commission to other institutions

4.1.

97 366 264

90 474 401

Revenues from administrative operations

4.2.

17 487 342

16 339 509

Other operating revenue

4.3.

143 540

210 887

Total operating revenue

114 997 147

107 024 797

Staff expenses

4.4.

–88 868 529

–84 209 144

Fixed asset related expenses

3.1.-3.2. & 4.5.

–3 307 315

–3 426 683

Other administrative expenses

4.6.

–19 074 703

–21 386 771

Operational expenses

–74 871

–32 486

Total operating expenses

– 111 325 418

– 109 055 084

Surplus/(deficit) from operating activities

3 671 729

–2 030 287

Financial revenues

4.7.

193 432

105 517

Financial expenses

4.8.

–15 067

–15 096

Movement in pensions (– expense, + revenue)

3.5. & 4.9.

–12 763 475

259 470

Surplus/(deficit) from non operating activities

–12 585 110

349 891

Economic result of the year

–8 913 381

–1 680 396

The accompanying notes form an integral part of these financial statements.

Cash flow statement for the year ended 31 December 2008

| (EUR) |
| --- |
| | 2008 | 2007 |
| Economic result of the year | –8 913 381 | –1 680 396 |
| Operating activities — Adjustments |
| Amortisation (intangible fixed assets) | 131 022 | 55 323 |
| Depreciation (tangible fixed assets) | 2 073 498 | 3 321 950 |
| Increase/(decrease) in provisions for risks and liabilities | 0 | –80 789 |
| Increase/(decrease) in value reduction for doubtful debt | 1 790 | 0 |
| (Increase)/decrease in long-term receivables | 25 | – 475 |
| (Increase)/decrease in short-term receivables | 219 123 | 309 862 |
| (Increase)/decrease in receivables EC entities | 3 078 | 3 144 |
| Increase/(decrease) in other long-term liabilities | 0 | –26 995 |
| Increase/(decrease) in accounts payable | – 545 311 | 1 192 756 |
| Increase/(decrease) in liabilities related to consolidated EC | 49 834 | 49 208 |
| (Gains)/losses on sale of property, plant and equipment | 1 360 | 666 205 |
| Net cash flow from operating activities | –6 978 962 | 3 809 793 |
| Cash flows from investing activities |
| Purchase of tangible and intangible fixed assets (–) | –5 439 210 | –1 362 613 |
| Proceeds from tangible and intangible fixed assets (+) | 1 228 068 | 38 030 |
| Net cash flow from investing activities | –4 211 142 | –1 324 583 |
| Increase/(decrease) in Employee benefits | 10 665 938 | –2 279 511 |
| Net increase/(decrease) in cash and cash equivalents | – 524 166 | 205 699 |
| Cash and cash equivalents at the beginning of the period | 2 012 791 | 1 807 092 |
| Cash and cash equivalents at the end of the period | 1 488 626 | 2 012 791 |
| The accompanying notes form an integral part of these financial statements. |

(EUR)

2008

2007

Economic result of the year

–8 913 381

–1 680 396

Operating activities — Adjustments

Amortisation (intangible fixed assets)

131 022

55 323

Depreciation (tangible fixed assets)

2 073 498

3 321 950

Increase/(decrease) in provisions for risks and liabilities

0

–80 789

Increase/(decrease) in value reduction for doubtful debt

1 790

0

(Increase)/decrease in long-term receivables

25

– 475

(Increase)/decrease in short-term receivables

219 123

309 862

(Increase)/decrease in receivables EC entities

3 078

3 144

Increase/(decrease) in other long-term liabilities

0

–26 995

Increase/(decrease) in accounts payable

– 545 311

1 192 756

Increase/(decrease) in liabilities related to consolidated EC

49 834

49 208

(Gains)/losses on sale of property, plant and equipment

1 360

666 205

Net cash flow from operating activities

–6 978 962

3 809 793

Cash flows from investing activities

Purchase of tangible and intangible fixed assets (–)

–5 439 210

–1 362 613

Proceeds from tangible and intangible fixed assets (+)

1 228 068

38 030

Net cash flow from investing activities

–4 211 142

–1 324 583

Increase/(decrease) in Employee benefits

10 665 938

–2 279 511

Net increase/(decrease) in cash and cash equivalents

– 524 166

205 699

Cash and cash equivalents at the beginning of the period

2 012 791

1 807 092

Cash and cash equivalents at the end of the period

1 488 626

2 012 791

The accompanying notes form an integral part of these financial statements.

Statement of changes in equity for the year ended 31 December 2008

| (EUR) |
| --- |
| Capital | Accumulated deficit | Economic result of the year | Capital (total) |
| Balance as of 31 December 2007 | –11 418 315 | –1 680 396 | –13 098 711 |
| Allocation of the economic result of previous year | –1 680 396 | 1 680 396 | — |
| Economic result of the year | | –8 913 381 | –8 913 381 |
| Balance as of 31 December 2008 | –13 098 711 | –8 913 381 | –22 012 092 |
| The accompanying notes form an integral part of these financial statements. |

(EUR)

Capital

Accumulated deficit

Economic result of the year

Capital (total)

Balance as of 31 December 2007

–11 418 315

–1 680 396

–13 098 711

Allocation of the economic result of previous year

–1 680 396

1 680 396

—

Economic result of the year

–8 913 381

–8 913 381

Balance as of 31 December 2008

–13 098 711

–8 913 381

–22 012 092

The accompanying notes form an integral part of these financial statements.

ACCOUNTING POLICIES AND NOTES TO THE FINANCIAL STATEMENTS

1.   General

The European Court of Auditors (hereafter the Court) was established by the Treaty of Brussels of 22 July 1975 and started operating as an external Community audit body in October 1977, with its headquarters in Luxembourg.

Mission of the European Court of Auditors

The Court is the EU Institution established by the Treaty to carry out the audit of EU finances. As the EU’s external auditor it contributes to improving EU financial management and acts as the independent guardian of the financial interests of the citizens of the European Union.

The Court renders audit services through which it assesses the collection and spending of EU funds. It examines whether financial operations have been properly recorded and disclosed, legally and regularly executed and managed so as to ensure economy, efficiency and effectiveness. The Court communicates the results of its audits in clear, relevant and objective reports. It also provides its opinion on financial management issues.

The Court promotes accountability and transparency and assists the European Parliament and Council in overseeing the implementation of the EU budget, particularly during the discharge procedure. The Court is committed to being an efficient organisation at the forefront of developments in public audit and administration.

The financial year of the Court runs from 1 January to 31 December.

2.   Significant accounting policies and presentation of the financial statements

2.1.   Basis of presentation

The accounts of the Court are drawn up in accordance with the provisions of Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities and with the Commission Regulation (EC, Euratom) No 2342/2002 of 23 December 2002 laying down detailed rules for the implementation of the said financial Council Regulation.

The financial statements are prepared in accordance with the Accounting Rules of the European Communities, which have been inspired by International Public Sector Accounting Standard (IPSAS). These Accounting Rules are adopted by the Accounting Officer of the Commission after a consultation of the other institutions.

2.2.   Valuation of foreign currency balances and transactions

Monetary items denominated in currencies other than EUR are translated into EUR at the exchange rate effective at the reporting date. Non-monetary items carried at a historical cost denominated in a currency other than EUR are reported using the exchange rate at the date of acquisition. Non-monetary items carried at a fair value denominated in a currency other than EUR are reported using the exchange rates that existed when the values were determined.

2.3.   Intangible and tangible fixed assets

The intangible and tangible fixed assets are stated at historical cost less depreciation/amortisation and impairment. Low value items below EUR 420 are accounted as expenses during the year of acquisition. Assets delivered during the accounting year but not paid at year-end are reported as ‘under construction’. Depreciation/amortisation is calculated by the straight-line method, starting the month of acquisition and charged over their estimated useful lives, as follows:

| Intangible (licences for computer software) | 4 years |
| --- | --- |
| Buildings | 25 years |
| Plant, machinery and tools | 4, 8 years |
| Furniture and vehicle fleet | 4, 8, 10 years |
| Computer hardware | 4 years |
| Fittings specific to leased buildings | the duration of the lease |
| Other fixtures and fittings | 6 years |

Intangible (licences for computer software)

4 years

Buildings

25 years

Plant, machinery and tools

4, 8 years

Furniture and vehicle fleet

4, 8, 10 years

Computer hardware

4 years

Fittings specific to leased buildings

the duration of the lease

Other fixtures and fittings

6 years

2.4.   Employee benefits

Employee benefits represent the future pension rights of the Members of the Court. Under Article 19 of Council Regulation (EEC, Euratom, ECSC) No 2290/77 of 18 October 1977 determining the emoluments of the Members of the Court of Auditors (OJ L 268, 20.10.1977, p. 1), the benefits provided for in this pension scheme are entered in the budget of the Communities and the Member States jointly guarantee their payment.

The amounts guaranteed by the Member States are based, on the one hand, on the Accounting Rule No 12 ‘Employee benefits’ adopted by a decision of the Commission’s accounting officer pursuant to Article 133 of the Financial Regulation applicable to the general budget of the European Communities, and, on the other hand, on the basis of an actuarial analysis carried out by the experts of the specialised unit at Eurostat.

2.5.   Provisions for liabilities and charges

Provisions for liabilities and charges are intended to cover losses or debts the nature of which is clearly defined and which, at the date of the balance sheet are either likely to be incurred or certain to be incurred but uncertain as to their amount or as to the date on which they will arise.

3.   Notes to the balance sheet

3.1.   Intangible fixed assets

The movements in intangible fixed assets during the year 2008 were:

| (EUR) |
| --- |
| | Gross book value 1 January 2008 | Additions | Disposals | Other changes | Gross book value 31 December 2008 | Accumulated depreciation 31 December 2008 | Net book value 31 December 2008 |
| Computer Software | 290 514 | 339 366 | — | — | 629 880 | – 212 088 | 417 792 |
| Total | 290 514 | 339 366 | 0 | 0 | 629 880 | – 212 088 | 417 792 |

(EUR)

Gross book value 1 January 2008

Additions

Disposals

Other changes

Gross book value 31 December 2008

Accumulated depreciation 31 December 2008

Net book value 31 December 2008

Computer Software

290 514

339 366

—

—

629 880

– 212 088

417 792

Total

290 514

339 366

0

0

629 880

– 212 088

417 792

3.2.   Tangible fixed assets

The movements in tangible fixed assets during the year 2008 were:

| (EUR) |
| --- |
| | Gross book value 1 January 2008 | Additions | Disposals | Transfer between headings | Gross book value 31 December 2008 | Accumulated depreciation 31 December 2008 | Net book value 31 December 2008 |
| Land | 776 630 | — | — | — | 776 630 | — | 776 630 |
| Buildings | 52 074 987 | — | — | — | 52 074 987 | –24 039 665 | 28 035 322 |
| Plant, machinery and tools | 1 256 222 | 3 815 | –1 566 | –1 126 868 | 131 603 | – 101 469 | 30 134 |
| Computer hardware | 4 362 412 | 706 392 | – 816 204 | –65 458 | 4 187 142 | –3 034 323 | 1 152 819 |
| Furniture and vehicle fleet | 1 715 569 | 274 711 | – 237 754 | 290 074 | 2 042 600 | –1 318 473 | 724 127 |
| Other fixtures and fittings | 1 043 800 | 37 171 | –83 856 | 902 252 | 1 899 367 | –1 615 568 | 283 799 |
| Assets under construction | 90 048 | 4 077 754 | –90 048 | — | 4 077 754 | — | 4 077 754 |
| Total | 61 319 668 | 5 099 843 | –1 229 428 | 0 | 65 190 083 | –30 109 498 | 35 080 585 |

(EUR)

Gross book value 1 January 2008

Additions

Disposals

Transfer between headings

Gross book value 31 December 2008

Accumulated depreciation 31 December 2008

Net book value 31 December 2008

Land

776 630

—

—

—

776 630

—

776 630

Buildings

52 074 987

—

—

—

52 074 987

–24 039 665

28 035 322

Plant, machinery and tools

1 256 222

3 815

–1 566

–1 126 868

131 603

– 101 469

30 134

Computer hardware

4 362 412

706 392

– 816 204

–65 458

4 187 142

–3 034 323

1 152 819

Furniture and vehicle fleet

1 715 569

274 711

– 237 754

290 074

2 042 600

–1 318 473

724 127

Other fixtures and fittings

1 043 800

37 171

–83 856

902 252

1 899 367

–1 615 568

283 799

Assets under construction

90 048

4 077 754

–90 048

—

4 077 754

—

4 077 754

Total

61 319 668

5 099 843

–1 229 428

0

65 190 083

–30 109 498

35 080 585

The ‘Transfer between headings’ are reclassifications of assets from one category to another on 1 January 2008.

‘Assets under construction’ are usually assets delivered but not yet invoiced at year end. When the invoice is received, the related assets will appear in the additions under the correct asset category and ‘disposals’ under ‘assets in construction’.

Assets under construction are also major building projects still in process at year-end which was the case as at 31 December 2008 for the new building K3 (studies), the health and safety works for building K1 and a new conference room.

3.3.   Short-term receivables

Short-term receivable

| (EUR) |
| --- |
| | 31 December 2008 | 31 December 2007 |
| Current receivables mainly due to the transfer of national pension rights by staff | 504 166 | 628 778 |
| Deferred charges for building rentals and IT contracts | 614 114 | 560 782 |
| Sundry receivables mainly related to payroll and mission advances | 335 446 | 485 079 |
| Receivable from EC entities (Publications Office) | 2 055 | 5 133 |
| Total | 1 455 781 | 1 679 772 |

(EUR)

31 December 2008

31 December 2007

Current receivables mainly due to the transfer of national pension rights by staff

504 166

628 778

Deferred charges for building rentals and IT contracts

614 114

560 782

Sundry receivables mainly related to payroll and mission advances

335 446

485 079

Receivable from EC entities (Publications Office)

2 055

5 133

Total

1 455 781

1 679 772

3.4.   Cash and cash equivalents

Cash and cash equivalents

| (EUR) |
| --- |
| | 31 December 2008 | 31 December 2007 |
| Imprest account | 1 000 | 1 000 |
| Current bank account | 1 487 625 | 2 011 791 |
| Total | 1 488 625 | 2 012 791 |

(EUR)

31 December 2008

31 December 2007

Imprest account

1 000

1 000

Current bank account

1 487 625

2 011 791

Total

1 488 625

2 012 791

3.5.   Employee benefits

The calculation for future pension payments obligations is computed net of the taxes recovered on the future pension payments. The tax rate is updated based on the effective average tax rate during the last 3 years.

Pension liability and effect of the tax rate

| (EUR) |
| --- |
| | 31 December 2008 | 31 December 2007 |
| Gross amount | 63 730 921 | 50 871 762 |
| Tax rate (%) | 17,57 % | 17,70 % |
| Taxes | 11 197 523 | 9 004 302 |
| Amount net of taxes | 52 533 398 | 41 867 460 |
| | | |
| Variation in 2008 of net pension liability | 10 665 938 | |

(EUR)

31 December 2008

31 December 2007

Gross amount

63 730 921

50 871 762

Tax rate (%)

17,57 %

17,70 %

Taxes

11 197 523

9 004 302

Amount net of taxes

52 533 398

41 867 460

Variation in 2008 of net pension liability

10 665 938

The employee benefits liability is calculated based on entitlements earned by Members pursuant to different rights acquired, such as life pensions and transitional allowances, as well as on beneficiary status categories assigned.

For the year 2008 Eurostat was for the first time responsible for the calculation of the liability. The actuarial commitment was calculated in conformity with EC accounting rule 12 ‘Employee benefits’.

The 2008 increase of EUR 10,7 million net of taxes arises primarily from the:

| — | inclusion for the first time in 2008 of the earned transitional allowance benefits of active Members of the Court in the calculation of the liability, reflecting a change in accounting method to comply with accounting rule 12, which amounted to EUR 4,7 million, |
| --- | --- |

—

inclusion for the first time in 2008 of the earned transitional allowance benefits of active Members of the Court in the calculation of the liability, reflecting a change in accounting method to comply with accounting rule 12, which amounted to EUR 4,7 million,

| — | the normal evolution of the employee benefits liability, due to, for example, changes in the interest rate and life tables, and the addition of new beneficiaries and benefits, which amounted to EUR 4,5 million, and |
| --- | --- |

—

the normal evolution of the employee benefits liability, due to, for example, changes in the interest rate and life tables, and the addition of new beneficiaries and benefits, which amounted to EUR 4,5 million, and

| — | changes and corrections to the staff database (marital status etc.). |
| --- | --- |

—

changes and corrections to the staff database (marital status etc.).

The disclosure departs from the presentation laid out in the EC accounting rule 12 ‘Employee benefits’ due to the fact that the necessary detailed actuarial calculations were not provided by Eurostat.

3.6.   Long-term liabilities

The amount of EUR 175 000 is contractually due at the termination of the rental of the building K9.

3.7.   Provision for risks and charges

The amount corresponding to the value, net of taxes, of untaken holidays owed to staff was considered in the past as ‘Provision for risks and charges’. From 2008, untaken annual leave are considered as ‘accrued charges’ (and not provisions). In the balance sheet as at 31 December 2007, the amount of EUR 1 927 531 was shown under ‘Provisions for risks and charges’. It is now reclassified as ‘Accrued charges’ and shown in ‘Accounts payable’:

Provisions for risks and charges as of 31 December 2007

| (EUR) |
| --- |
| | 31 December 2007 |
| Provision for risks and charges in balance sheet 31.12.2007 | 1 927 531 |
| Reclassification provisions for risks and charges | –1 927 531 |
| Provision for risks and charges in balance sheet 31.12.2007 after reclassification | 0 |

(EUR)

31 December 2007

Provision for risks and charges in balance sheet 31.12.2007

1 927 531

Reclassification provisions for risks and charges

–1 927 531

Provision for risks and charges in balance sheet 31.12.2007 after reclassification

0

Accounts payable as of 31 December 2007

| (EUR) |
| --- |
| | 31 December 2007 |
| Accounts payable in balance sheet 31.12.2007 | 6 314 949 |
| Reclassification provisions for risks and charges | 1 927 531 |
| Accounts payable in balance sheet 31.12.2007 after reclassification | 8 242 480 |

(EUR)

31 December 2007

Accounts payable in balance sheet 31.12.2007

6 314 949

Reclassification provisions for risks and charges

1 927 531

Accounts payable in balance sheet 31.12.2007 after reclassification

8 242 480

3.8.   Accounts payable

Account payable

| (EUR) |
| --- |
| | 31 December 2008 | 31 December 2007 |
| Accrued charges consist of expenses incurred but not yet invoiced. The amount of the untaken holidays is also included here for both 2007 and 2008 (see Note 3.7 above) | 6 672 098 | 7 177 873 |
| Sundry payables related to staff | 427 175 | 522 592 |
| Current payables to suppliers | 540 605 | 484 724 |
| Accounts payable against consolidated EC entities mainly to the European Council and Parliament | 107 124 | 57 291 |
| Total | 7 747 002 | 8 242 480 |

(EUR)

31 December 2008

31 December 2007

Accrued charges consist of expenses incurred but not yet invoiced. The amount of the untaken holidays is also included here for both 2007 and 2008 (see Note 3.7 above)

6 672 098

7 177 873

Sundry payables related to staff

427 175

522 592

Current payables to suppliers

540 605

484 724

Accounts payable against consolidated EC entities mainly to the European Council and Parliament

107 124

57 291

Total

7 747 002

8 242 480

4.   Notes to the economic outturn account

4.1.   ‘Funds transferred from the Commission to other institutions’: the amount corresponds to the monthly calls for funds made by the Court to the Commission to replenish its bank account.

4.2.   ‘Revenues from administrative operations’: for the most part, this heading is made up of deductions from the salaries of Members and staff in respect of tax and social contributions.

4.3.   ‘Other operating revenue’ arises among others from the sales of publications by the Publications Office.

4.4.   ‘Staff expenses’: the salaries of Members and staff of the Court represent 96 % of this amount. The rest includes the salaries of the contractual agents and temporary staff.

4.5.   The ‘fixed assets related expenses’ consist of the depreciation/amortisation of the tangible and intangible assets.

4.6.   The most significant items of the ‘other administrative expenses’:

| — | buildings’ rental and associated charges, |
| --- | --- |

—

buildings’ rental and associated charges,

| — | IT and telecommunications, |
| --- | --- |

—

IT and telecommunications,

| — | missions expenses, |
| --- | --- |

—

missions expenses,

| — | cleaning and security services. |
| --- | --- |

—

cleaning and security services.

4.7.   ‘Financial revenues’ consists of bank interest earned on the Court’s current account.

4.8.   ‘Financial expenses’ are bank charges levied on the Court’s current account.

4.9.   ‘Movements in pension’ includes:

Movements in pension

| (EUR) |
| --- |
| | 2008 |
| Pension payments of the year | –2 097 537 |
| Variation of members' net pension liability | –10 665 938 |
| Total | –12 763 475 |

(EUR)

2008

Pension payments of the year

–2 097 537

Variation of members' net pension liability

–10 665 938

Total

–12 763 475

5.   Off balance sheet

5.1.   Contingent assets

The following bank guarantees have been given by suppliers following contractual obligations:

Bank guarantee received

| (EUR) |
| --- |
| | 2008 |
| Travel agency | 50 000 |
| Car pool leasing | 75 000 |
| Insurance company | 1 361 |
| Telecommunications | 20 000 |
| Total | 146 361 |

(EUR)

2008

Travel agency

50 000

Car pool leasing

75 000

Insurance company

1 361

Telecommunications

20 000

Total

146 361

5.2.   Commitments for future funding

Commitments for future fundings

| (EUR) |
| --- |
| | 31 December 2008 |
| K7 building | 2 455 000 |
| K8 building | 2 229 333 |
| K9 building | 7 384 000 |
| Brussels 'Antenne' | 54 000 |
| Foyer européen — Maison de l'Europe | 50 565 |
| Subtotal | 12 172 898 |
| Operating lease for cars and copy machines | 640 251 |
| Other (Cetrel, ...) | 89 698 |
| Subtotal | 12 902 847 |
| Commitments against appropriations not yet consumed — RAL ('Restant à liquider') — after deduction of accruals for 2008 | 7 548 508 |
| Total | 20 451 355 |

(EUR)

31 December 2008

K7 building

2 455 000

K8 building

2 229 333

K9 building

7 384 000

Brussels 'Antenne'

54 000

Foyer européen — Maison de l'Europe

50 565

Subtotal

12 172 898

Operating lease for cars and copy machines

640 251

Other (Cetrel, ...)

89 698

Subtotal

12 902 847

Commitments against appropriations not yet consumed — RAL ('Restant à liquider') — after deduction of accruals for 2008

7 548 508

Total

20 451 355

5.3.   The Court’s buildings projects

The Court occupied its headquarters building (the ‘K1’ building) in 1988 and purchased it and the land it stands on outright in 1990. In 1999, the Court signed a framework agreement with the Luxembourg State through which it was given the right to use a second parcel of land for 49 years (renewable once) for the construction of an extension (the ‘K2’ building) in return for a payment of one euro.

The Court has decided to go ahead with the construction of a second extension, the ‘K3’ building, and because of different arrangements for carrying out the project, the Luxembourg State and the Court concluded a new framework agreement on 22 February 2008.

As regards the two pieces of land relative to the two extensions mentioned above, the State has sold these to the Court for a symbolic one euro. For its part, should the Court ever consider ceding one or other of the buildings to a third party other than a Community body or institution, the Court will return the land to the ownership of the State in return for a symbolic one euro, the latter disposing also of an option to buy the building at a price to be determined by an independent expert. In case the State decides not to exercise this option, it would provide a right to use the land to the purchasers of the building.

The ‘K2’ building was occupied in November 2003. Construction work for the ‘K3’ building is scheduled to commence towards the end of 2009.

5.4.   Potential liability for litigations

None.

Independent Assurance report

To the Management of the

European Court of Auditors

We have examined that the financial resources assigned by the European Commission to the European Court of Auditors (hereafter the Court) have been used for their intended purposes and that the control procedures put in place by the authorising officers provide the necessary guarantees to ensure the compliance of financial operations with the applicable rules and regulations for the financial resources made available and used for the period from 1 January 2008 to 31 December 2008.

The maintenance of books and records and the establishing and maintaining of appropriate controls are the responsibility of the Management of the Court. Our responsibility is to express our opinion based on our examination.

We conducted our examination in accordance with the International Standard on Assurance Engagements ‘Assurance Engagements other than Audits or Reviews of Historical Financial Information’ (ISAE 3000) as adopted by the ‘Institut des Réviseurs d’Entreprises’. This standard requires that we plan and perform our examination such that misuse of the resources materially affecting the books of the Court are detected with reasonable assurance. Our work consisted primarily of examining on a test and sample basis, evidence supporting the fact that:

| — | the resources assigned to the Court have been used for their intended purposes; |
| --- | --- |

—

the resources assigned to the Court have been used for their intended purposes;

| — | the control procedures put in place provide the necessary guarantees to ensure the compliance of financial operations with the applicable rules and regulations. |
| --- | --- |

—

the control procedures put in place provide the necessary guarantees to ensure the compliance of financial operations with the applicable rules and regulations.

The criteria used for our examination are the following rules and regulations:

| — | Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget (hereafter the Budget) of the European Communities (hereafter the Financial Regulation); |
| --- | --- |

—

Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget (hereafter the Budget) of the European Communities (hereafter the Financial Regulation);

| — | Commission Regulation (EC, Euratom) No 2342/2002 of 23 December 2002 laying down detailed rules for the implementation of Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities (hereafter the Implementing Rules); |
| --- | --- |

—

Commission Regulation (EC, Euratom) No 2342/2002 of 23 December 2002 laying down detailed rules for the implementation of Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities (hereafter the Implementing Rules);

| — | Decision No 36/2007 of the European Court of Auditors relating to the Internal Rules for the implementation of its Budget adopted on 12 July and 19 July 2007. These provisions form part of the procedures established by the Treaties, or agreements made by virtue thereof, which concern the operational process linked to the implementation of the Budget. |
| --- | --- |

—

Decision No 36/2007 of the European Court of Auditors relating to the Internal Rules for the implementation of its Budget adopted on 12 July and 19 July 2007. These provisions form part of the procedures established by the Treaties, or agreements made by virtue thereof, which concern the operational process linked to the implementation of the Budget.

In particular, the following Internal Rules have been used as criteria:

| — | Article 7 — Signatures — ‘Each of the parties involved in the drafting, control and registration of operations to establish and recover revenue or to commit sums and make payments shall sign and date their involvement.’ |
| --- | --- |

—

Article 7 — Signatures — ‘Each of the parties involved in the drafting, control and registration of operations to establish and recover revenue or to commit sums and make payments shall sign and date their involvement.’

| — | Article 9 — Building projects — ‘Before the Court gives its approval to any contractual undertaking concerning such a project, the service responsible shall submit and explanatory document justifying the compatibility of the project with the financial framework.’ |
| --- | --- |

—

Article 9 — Building projects — ‘Before the Court gives its approval to any contractual undertaking concerning such a project, the service responsible shall submit and explanatory document justifying the compatibility of the project with the financial framework.’

| — | Article 16 — Making payments — ‘The accounting officer shall execute the payment orders defined in Article 80 of the Financial Regulation after he has checked the mandatory details described in Article 103(1) and Article 104 of the Implementing Rules.’ |
| --- | --- |

—

Article 16 — Making payments — ‘The accounting officer shall execute the payment orders defined in Article 80 of the Financial Regulation after he has checked the mandatory details described in Article 103(1) and Article 104 of the Implementing Rules.’

| — | Article 23.1 — Transfers of appropriations — ‘Pursuant to Article 21 of the Financial Regulation, appropriations shall be earmarked for specific purposes by title and chapter; the chapters shall be further subdivided into articles and items.’ |
| --- | --- |

—

Article 23.1 — Transfers of appropriations — ‘Pursuant to Article 21 of the Financial Regulation, appropriations shall be earmarked for specific purposes by title and chapter; the chapters shall be further subdivided into articles and items.’

| — | Article 23.2 — Transfers of appropriations — ‘All requests for transfer shall explain why the appropriations are insufficient. The request for transfer shall be signed by the responsible director.’ |
| --- | --- |

—

Article 23.2 — Transfers of appropriations — ‘All requests for transfer shall explain why the appropriations are insufficient. The request for transfer shall be signed by the responsible director.’

| — | Article 24 — Carry-overs of appropriations — ‘The responsible authorising officer shall prepare a listing showing the available balance of commitments; this balance, shall be adjusted in the budgetary accounts by taking into consideration the appropriations to be cancelled, and shall show the appropriations to be carried forward.’ |
| --- | --- |

—

Article 24 — Carry-overs of appropriations — ‘The responsible authorising officer shall prepare a listing showing the available balance of commitments; this balance, shall be adjusted in the budgetary accounts by taking into consideration the appropriations to be cancelled, and shall show the appropriations to be carried forward.’

| — | Article 26 — Property inventories — ‘The inventory of tangible assets shall be kept in a database.’ |
| --- | --- |

—

Article 26 — Property inventories — ‘The inventory of tangible assets shall be kept in a database.’

| — | Article 27 — Minimum management and internal control procedures — ‘The management and internal control procedures are drawn up by the authorising officers in accordance with the minimum internal control standards adopted by the Court. Each budget operation is handled (...) by the person responsible for ex-ante verification. (...) If the person responsible for ex-ante verification establishes that the operation in question satisfies the requirements of Article 47(3) of the Implementing Rules, he validates it and documents this validation.’ |
| --- | --- |

—

Article 27 — Minimum management and internal control procedures — ‘The management and internal control procedures are drawn up by the authorising officers in accordance with the minimum internal control standards adopted by the Court. Each budget operation is handled (...) by the person responsible for ex-ante verification. (...) If the person responsible for ex-ante verification establishes that the operation in question satisfies the requirements of Article 47(3) of the Implementing Rules, he validates it and documents this validation.’

We believe our examination provides a reasonable basis for our opinion.

Based on our work described in this report, nothing has come to our attention that causes us to believe that in all material respects and based on the criteria described above:

| (a) | the resources assigned to the Court have not been used for their intended purposes; |
| --- | --- |

(a)

the resources assigned to the Court have not been used for their intended purposes;

| (b) | the control procedures in place do not provide the necessary guarantees to ensure the compliance of financial operations with the applicable rules and regulations. |
| --- | --- |

(b)

the control procedures in place do not provide the necessary guarantees to ensure the compliance of financial operations with the applicable rules and regulations.

Our report is solely for the purpose set forth in the first paragraph and for your information and is not to be used for any other purpose or to be distributed to any other parties, except for publication in the European Official Journal.

Luxembourg, 26 June 2009.

PricewaterhouseCoopers SARL.

Réviseur d’entreprises

Represented by

Marianne WEYDERT

---