# C_2005332EN.01008901.xml

| 28.12.2005 | EN | Official Journal of the European Union | C 332/89 |
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28.12.2005

EN

Official Journal of the European Union

C 332/89

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REPORT

REPORT

on the annual accounts of the European Monitoring Centre for Drugs and Drug Addiction for the financial year 2004 together with the Monitoring Centre's replies

(2005/C 332/13)

CONTENTS

| 1-2 | INTRODUCTION |
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1-2

| 3-6 | THE COURT'S OPINION |
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3-6

| 7-10 | OBSERVATIONS |
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7-10

Tables 1 to 4

The Monitoring Centre's replies

The Monitoring Centre's replies

INTRODUCTION

| 1. | The European Monitoring Centre for Drugs and Drug Addiction (hereinafter called ‘the Monitoring Centre’) was established by Council Regulation (EEC) No 302/93 of 8 February 1993 (1). Its main task is to collect data on drugs and drug addiction in order to prepare and publish information that is objective, reliable and comparable at European level. The information is intended to provide a basis for analysing demand for drugs and ways of reducing both it and drug-market-related events in general. Table 1 summarises the Monitoring Centre's competences and activities on the basis of information it has supplied. |
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1.

The European Monitoring Centre for Drugs and Drug Addiction (hereinafter called ‘the Monitoring Centre’) was established by Council Regulation (EEC) No 302/93 of 8 February 1993 (1). Its main task is to collect data on drugs and drug addiction in order to prepare and publish information that is objective, reliable and comparable at European level. The information is intended to provide a basis for analysing demand for drugs and ways of reducing both it and drug-market-related events in general. Table 1 summarises the Monitoring Centre's competences and activities on the basis of information it has supplied.

1

Table 1

| 2. | For information, the annual accounts drawn up by the Monitoring Centre for the financial year 2004 are summarised in Tables 2, 3 and 4. |
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2.

For information, the annual accounts drawn up by the Monitoring Centre for the financial year 2004 are summarised in Tables 2, 3 and 4.

Tables 2, 3 and 4

THE COURT'S OPINION

| 3. | The Court's opinion is addressed to the European Parliament and the Council in accordance with Article 185(2) of Council Regulation (EC, Euratom) No 1605/2002 (2); it was drawn up following an examination of the Centre's accounts, as required by Article 248 of the Treaty establishing the European Community. |
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3.

The Court's opinion is addressed to the European Parliament and the Council in accordance with Article 185(2) of Council Regulation (EC, Euratom) No 1605/2002 (2); it was drawn up following an examination of the Centre's accounts, as required by Article 248 of the Treaty establishing the European Community.

2

| 4. | The Centre's accounts for the financial year ended 31 December 2004 (3) were drawn up by its Executive Director, pursuant to Article 11 of Regulation (EEC) No 302/93, and sent to the Court, which is required to give its opinion on their reliability and on the legality and regularity of the underlying transactions. |
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4.

The Centre's accounts for the financial year ended 31 December 2004 (3) were drawn up by its Executive Director, pursuant to Article 11 of Regulation (EEC) No 302/93, and sent to the Court, which is required to give its opinion on their reliability and on the legality and regularity of the underlying transactions.

3

| 5. | The Court conducted an audit in accordance with its policies and standards, which are based on international auditing standards that have been adapted to the Community context. The audit was planned and performed to obtain reasonable assurance that the accounts are reliable and the underlying transactions are legal and regular. |
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5.

The Court conducted an audit in accordance with its policies and standards, which are based on international auditing standards that have been adapted to the Community context. The audit was planned and performed to obtain reasonable assurance that the accounts are reliable and the underlying transactions are legal and regular.

| 6. | The Court has obtained a reasonable basis for the opinion expressed below. |
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6.

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

Reliability of the accountsThe Centre's accounts for the financial year ended 31 December 2004 are, in all material respects, reliable.Legality and regularity of the underlying transactionsThe transactions underlying the Centre's annual accounts, taken as a whole, are legal and regular.The observations which follow do not call the Court's opinion into question.

Reliability of the accountsThe Centre's accounts for the financial year ended 31 December 2004 are, in all material respects, reliable.Legality and regularity of the underlying transactionsThe transactions underlying the Centre's annual accounts, taken as a whole, are legal and regular.The observations which follow do not call the Court's opinion into question.

OBSERVATIONS

| 7. | More than a hundred transfers of appropriations were made during the financial year 2004; the transfers made from certain items were compensated for by transfers in the opposite direction. Amendments on this scale make the management of the Monitoring Centre very cumbersome and show that the necessary rigour is not being applied to compliance with the budgetary principle of specification. |
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7.

More than a hundred transfers of appropriations were made during the financial year 2004; the transfers made from certain items were compensated for by transfers in the opposite direction. Amendments on this scale make the management of the Monitoring Centre very cumbersome and show that the necessary rigour is not being applied to compliance with the budgetary principle of specification.

| 8. | The checks carried out on the implementation of contracts revealed a number of anomalies (4). Although, considered individually, these anomalies do not call into question the regularity of the transactions concerned, their frequency (5) should induce the Monitoring Centre to strengthen its internal control system. |
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8.

The checks carried out on the implementation of contracts revealed a number of anomalies (4). Although, considered individually, these anomalies do not call into question the regularity of the transactions concerned, their frequency (5) should induce the Monitoring Centre to strengthen its internal control system.

4

5

| 9. | No reconciliations between bank balances and the accounts are carried out and the errors in the amounts to be paid are not always detected. Moreover, the accounting officer's instructions to the bank are not countersigned by a second person. As this is a high-risk area, internal control procedures should be strengthened without delay. |
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9.

No reconciliations between bank balances and the accounts are carried out and the errors in the amounts to be paid are not always detected. Moreover, the accounting officer's instructions to the bank are not countersigned by a second person. As this is a high-risk area, internal control procedures should be strengthened without delay.

| 10. | The data concerning fixed assets are compiled with the aid of electronic calculation sheets, which does not guarantee the integrity of the data recorded. A reliable computer system must be used to monitor the fixed assets. |
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10.

The data concerning fixed assets are compiled with the aid of electronic calculation sheets, which does not guarantee the integrity of the data recorded. A reliable computer system must be used to monitor the fixed assets.

This report was adopted by the Court of Auditors in Luxembourg at its meeting of 5 October 2005.

For the Court of Auditors

Hubert WEBER

President

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(1)  OJ L 36, 12.2.1993. This Regulation has been amended by Regulation (EC) No 3294/94 of 22.12.1994 (OJ L 341, 30.12.1994, p. 7) and Regulation (EC) No 1651/2003 of 18.6.2003 (OJ L 245, 29.9.2003, p. 30).

1

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

2

(3)  These accounts were drawn up on 11 August 2005 and received by the Court on 19 September 2005.

3

(4)  In particular, six cases of purchases being made without a contract using just an order form, commencement of work for one contract before the commitment operations, inadequate checks on one contractor's invoices, amendments to contracts without the addition of new clauses (checks covered a total of 360 000 euro, i.e. 27 % of purchases made within the framework of Title II).

4

(5)  An examination of the 13 contracts in the sample revealed that all except one contained at least one anomaly; altogether no fewer than 23 anomalies were detected.

5

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Table 1

European Monitoring Centre for Drugs and Drug Addiction (Lisbon)

| Areas of Community competence deriving from the Treaty | Competencies of the Monitoring Centre as defined in Council Regulation (EC) No 302/93 | Governance | Resources made available to the Monitoring Centre in 2004

  (2003 data) | Products and services supplied in 2004 |
| --- | --- | --- | --- | --- |
| The Community complements the Member States' action in reducing drugs-related health damage, including information and prevention.

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

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






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

Areas of Community competence deriving from the Treaty

Competencies of the Monitoring Centre as defined in Council Regulation (EC) No 302/93

Governance

Resources made available to the Monitoring Centre in 2004

(2003 data)

Products and services supplied in 2004

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

(Article 152(1) of the Treaty)

Objectives

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

The Monitoring Centre should give priority to analysing:

1.

the demand and reduction of the demand for drugs;

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

national and Community strategies and policies;

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

international cooperation and the geopolitics of supply;

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

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

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

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

Tasks

| — | To collect and analyse data. |
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—

To collect and analyse data.

| — | To make enquiries and carry out preparatory actions. |
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—

To make enquiries and carry out preparatory actions.

| — | To ensure that European-level data is more reliable. |
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—

To ensure that European-level data is more reliable.

| — | To publish reliable information. |
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—

To publish reliable information.

| — | To improve coordination between the national and Community actions. |
| --- | --- |

—

To improve coordination between the national and Community actions.

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

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

| 1. | The Management Board: Comprises one representative from each Member State, two representatives of the Commission and two qualified scientists appointed by the European Parliament. It approves the work programme and general annual report and adopts the budget. |
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1.

The Management Board: Comprises one representative from each Member State, two representatives of the Commission and two qualified scientists appointed by the European Parliament. It approves the work programme and general annual report and adopts the budget.

| 2. | Director: Appointed by the Management Board on the Commission's proposal. |
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2.

Director: Appointed by the Management Board on the Commission's proposal.

| 3. | Scientific Committee: Delivers opinions. It is made up of one representative from each Member State. The Management Board may also appoint a maximum of six other members on the basis of their specific qualifications. |
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3.

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

| 4. | External audit: European Court of Auditors. |
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4.

External audit: European Court of Auditors.

| 5. | Discharge: European Parliament on the Council's recommendation. |
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5.

Discharge: European Parliament on the Council's recommendation.

Final Budget:

12,2 million euro (10,5 million euro), Community subsidy: 96 % (89 %).

Staff numbers as at 31 December 2004:

Number of posts in establishment plan: 77 (63).

Posts occupied: 61 (54).

+ 22 (18) other staff (auxiliary contracts, contract staff and employment-agency staff)

Total staff: 83 (72) assigned to the following duties:

| — | operational tasks: 54,5 (46,5), |
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—

operational tasks: 54,5 (46,5),

| — | administrative and IT support tasks: 20 (18), |
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—

administrative and IT support tasks: 20 (18),

| — | mixed tasks: 8,5 (7,5). |
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—

mixed tasks: 8,5 (7,5).

Network:

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

Publications:

| — | Annual report on the state of the drug problem in the European Union (20 language versions, publication and interactive website) |
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—

Annual report on the state of the drug problem in the European Union (20 language versions, publication and interactive website)

| — | Bulletin of statistics and interactive website containing over 100 tables |
| --- | --- |

—

Bulletin of statistics and interactive website containing over 100 tables

| — | General report of activities (annual, EN) |
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—

General report of activities (annual, EN)

| — | Newsletter, Drugnet Europe (4 issues in five languages, 20 products) |
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—

Newsletter, Drugnet Europe (4 issues in five languages, 20 products)

| — | Policy briefings, Drugs in Focus (3 issues, 21 languages, 63 products) |
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—

Policy briefings, Drugs in Focus (3 issues, 21 languages, 63 products)

| — | Country situation summaries — for the 25 Member States (interactive website) |
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—

Country situation summaries — for the 25 Member States (interactive website)

| — | Publications in the EMCDDA series: 1 Monograph, 2 Risk assessments, 1 Insights |
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—

Publications in the EMCDDA series: 1 Monograph, 2 Risk assessments, 1 Insights

| — | Snapshot 2004 — report and 10 thematic papers — publication and website |
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—

Snapshot 2004 — report and 10 thematic papers — publication and website

| — | Scientific studies (20) |
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—

Scientific studies (20)

| — | Presentation brochure (in the ten new languages) |
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—

Presentation brochure (in the ten new languages)

| — | Complete restructuring of main website |
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—

Complete restructuring of main website

Source: Information forwarded by the Monitoring Centre.

Table 2

European Monitoring Centre for Drugs and Drug Addiction — Implementation of the budget for the financial year 2004

| (1000 euro) |
| --- |
| Revenue | Expenditure |
| Source of revenue | Revenue entered in the final budget for the financial year | Revenue collected | Allocation of expenditure | Final appropriations for the financial year | Appropriations carried over from previous financial years |
| entered | committed | paid | carried over | cancelled | available | committed | paid | cancelled |
| Commission subsidy | 11 730 | 11 730 | Title I | | | | | | | | | |
| Subsidy from Norway | 514 | 514 | Staff (NDA) | 6 171 | 5 998 | 5 831 | 122 | 218 | 80 | 80 | 61 | 18 |
| Miscellaneous revenue | 0 | 33 | Title II | | | | | | | | | |
| Phare assigned revenue | 0 | 211 | Administration (NDA) | 1 479 | 1 444 | 1 088 | 356 | 35 | 267 | 267 | 210 | 57 |
| | | | Title III | | | | | | | | | |
| | | | Operating activities (DA) | | | | | | 1 469 | 1 452 | 1 299 | 170 |
| | | | — CA | 4 594 | 4 509 | — | — | 85 | — | — | — | — |
| | | | — PA | 4 594 | — | 2 342 | 1 260 | 992 | — | — | — | — |
| | | | Assigned revenue | — | — | — | — | — | 223 | 218 | 201 | 22 |
| | 12 244 | 12 488 | Total CA | 12 244 | 11 951 | | | | | | | |
| Total PA | 12 244 | | 9 262 | 1 737 | 1 245 | 2 039 | 2 016 | 1 771 | 267 |
| NDA: non-differentiated appropriations (commitment appropriations are equal in amount to payment appropriations).
  DA: differentiated appropriations (commitment appropriations may differ in amount from payment appropriations).
  CA: commitment appropriations in the context of differentiated appropriations.
  PA: payment appropriations in the context of differentiated appropriations.

  Source: Information supplied by the Monitoring Centre — This table summarises the data provided by the Monitoring Centre in its annual accounts. |

(1000 euro)

Revenue

Expenditure

Source of revenue

Revenue entered in the final budget for the financial year

Revenue collected

Allocation of expenditure

Final appropriations for the financial year

Appropriations carried over from previous financial years

entered

committed

paid

carried over

cancelled

available

committed

paid

cancelled

Commission subsidy

11 730

11 730

Title I

Subsidy from Norway

514

514

Staff (NDA)

6 171

5 998

5 831

122

218

80

80

61

18

Miscellaneous revenue

0

33

Title II

Phare assigned revenue

0

211

Administration (NDA)

1 479

1 444

1 088

356

35

267

267

210

57

Title III

Operating activities (DA)

1 469

1 452

1 299

170

— CA

4 594

4 509

—

—

85

—

—

—

—

— PA

4 594

—

2 342

1 260

992

—

—

—

—

Assigned revenue

—

—

—

—

—

223

218

201

22

12 244

12 488

Total CA

12 244

11 951

Total PA

12 244

9 262

1 737

1 245

2 039

2 016

1 771

267

NDA: non-differentiated appropriations (commitment appropriations are equal in amount to payment appropriations).

DA: differentiated appropriations (commitment appropriations may differ in amount from payment appropriations).

CA: commitment appropriations in the context of differentiated appropriations.

PA: payment appropriations in the context of differentiated appropriations.

Source: Information supplied by the Monitoring Centre — This table summarises the data provided by the Monitoring Centre in its annual accounts.

Table 3

European Monitoring Centre for Drugs and Drug Addiction — Revenue and expenditure accounts for the financial years 2004 and 2003

| (1000 euro) |
| --- |
| | 2004 | 2003 (1) |
| Revenue |
| Subsidies from the Commission | 11 730 | 9 300 |
| Subsidies from Norway | 514 | 421 |
| Assigned revenue | 211 | 335 |
| Miscellaneous revenue | 33 | 67 |
| Total revenue (a) | 12 488 | 10 122 |
| Budgetary expenditure for the financial year |
| Staff — Title I of the budget |
| Payments | 5 832 | 5 189 |
| Appropriations carried over | 122 | 80 |
| Administration — Title II of the budget |
| Payments | 1 088 | 555 |
| Appropriations carried over | 356 | 267 |
| Operating activities — Title III of the budget (except assigned revenue) |
| Payments against payment appropriations for the financial year | 2 342 | 2 057 |
| Appropriations carried over | 1 260 | 1 469 |
| Assigned revenue (Phare and third countries) | 201 | 500 |
| Total expenditure (b) | 11 200 | 10 117 |
| Outturn for the financial year (a – b) | 1 288 | 5 |
| Balance carried over from the previous financial year | 295 | 1 626 |
| Appropriations carried over and cancelled | 245 (2) | 221 |
| Sums for re-use from the previous financial year not used | 15 | 21 |
| Refunds to the Commission | –3 | –1 584 |
| Refunds to Norway | 81 | |
| Exchange-rate differences | –1 | 6 |
| Balance for the financial year | 1 920 | 295 |
| Source: Information supplied by the Monitoring Centre — This table summarises the data provided by the Monitoring Centre in its annual accounts. |

(1000 euro)

2004

2003 (1)

Revenue

Subsidies from the Commission

11 730

9 300

Subsidies from Norway

514

421

Assigned revenue

211

335

Miscellaneous revenue

33

67

Total revenue (a)

12 488

10 122

Budgetary expenditure for the financial year

Staff — Title I of the budget

Payments

5 832

5 189

Appropriations carried over

122

80

Administration — Title II of the budget

Payments

1 088

555

Appropriations carried over

356

267

Operating activities — Title III of the budget (except assigned revenue)

Payments against payment appropriations for the financial year

2 342

2 057

Appropriations carried over

1 260

1 469

Assigned revenue (Phare and third countries)

201

500

Total expenditure (b)

11 200

10 117

Outturn for the financial year (a – b)

1 288

5

Balance carried over from the previous financial year

295

1 626

Appropriations carried over and cancelled

245 (2)

221

Sums for re-use from the previous financial year not used

15

21

Refunds to the Commission

–3

–1 584

Refunds to Norway

81

Exchange-rate differences

–1

6

Balance for the financial year

1 920

295

Source: Information supplied by the Monitoring Centre — This table summarises the data provided by the Monitoring Centre in its annual accounts.

Table 4

European Monitoring Centre for Drugs and Drug Addiction — Balance sheet as at 31 December 2004 and 31 December 2003

| (1000 euro) |
| --- |
| Assets | 2004 | 2003 | Liabilities | 2004 | 2003 |
| Fixed assets | | | Fixed capital | | |
| Intangible assets | 129 | 94 | Own capital | 2 950 | 3 057 |
| Buildings | 3 559 | 3 559 | Balance for the financial year | 1 920 | 295 |
| Equipment and furniture | 165 | 157 | Subtotal | 4 870 | 3 352 |
| Transport equipment | 50 | 50 | Current liabilities | | |
| Computer equipment | 716 | 659 | Phare carry-overs | — | 223 |
| Depreciation | –1 713 | –1 496 | Appropriations carried over against Titles I, II and III | 1 737 | 1 815 |
| Subtotal | 2 906 | 3 023 | Sundry accounts payable | 54 | 18 |
| Stocks | | | Recovery orders | 0 | 55 |
| Office supplies | 0 | 34 | Subtotal | 1 791 | 2 111 |
| Subtotal | 0 | 34 | Suspense accounts | | |
| | | | Revenue for re-use | 25 | — |
| Long-term assets | | | Deferred revenue | — | 123 |
| Staff loans | 23 | 0 | Subtotal | 25 | 123 |
| Subtotal | 23 | 0 | | | |
| Current assets | | | | | |
| Phare | 26 | | | | |
| Other advances | 8 | 78 | | | |
| Recoverable VAT | 47 | 94 | | | |
| Sundry accounts receivable | 32 | 66 | | | |
| Subtotal | 113 | 238 | | | |
| Cash accounts | | | | | |
| Bank accounts | 3 640 | 2 291 | | | |
| Cash | 4 | | | | |
| Subtotal | 3 644 | 2 291 | | | |
| Total | 6 686 | 5 586 | Total | 6 686 | 5 586 |
| Source: Information supplied by the Monitoring Centre — This table summarises the data provided by the Monitoring Centre in its annual accounts. |

(1000 euro)

Assets

2004

2003

Liabilities

2004

2003

Fixed assets

Fixed capital

Intangible assets

129

94

Own capital

2 950

3 057

Buildings

3 559

3 559

Balance for the financial year

1 920

295

Equipment and furniture

165

157

Subtotal

4 870

3 352

Transport equipment

50

50

Current liabilities

Computer equipment

716

659

Phare carry-overs

—

223

Depreciation

–1 713

–1 496

Appropriations carried over against Titles I, II and III

1 737

1 815

Subtotal

2 906

3 023

Sundry accounts payable

54

18

Stocks

Recovery orders

0

55

Office supplies

0

34

Subtotal

1 791

2 111

Subtotal

0

34

Suspense accounts

Revenue for re-use

25

—

Long-term assets

Deferred revenue

—

123

Staff loans

23

0

Subtotal

25

123

Subtotal

23

0

Current assets

Phare

26

Other advances

8

78

Recoverable VAT

47

94

Sundry accounts receivable

32

66

Subtotal

113

238

Cash accounts

Bank accounts

3 640

2 291

Cash

4

Subtotal

3 644

2 291

Total

6 686

5 586

Total

6 686

5 586

Source: Information supplied by the Monitoring Centre — This table summarises the data provided by the Monitoring Centre in its annual accounts.

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(1)  The data for the financial year 2003 have been processed again to enable use of the assigned revenue to be traced.

(2)  Does not take into account cancellations of Phare appropriations carried over and not used (22 000 euro).

Source: Information supplied by the Monitoring Centre — This table summarises the data provided by the Monitoring Centre in its annual accounts.

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THE MONITORING CENTRE'S REPLIES

| 7. | The final budget of the EMCDDA was adopted only in May 2004 owing to enlargement. Therefore, it was necessary to make numerous transfers in order to ensure the implementation of the EMCDDA's work programme. |
| --- | --- |

7.

The final budget of the EMCDDA was adopted only in May 2004 owing to enlargement. Therefore, it was necessary to make numerous transfers in order to ensure the implementation of the EMCDDA's work programme.

| 8. | The EMCDDA has implemented the following measures in order to improve the management of its contracts:






  — | a more precise procurement planning in terms of defining requirements, |
| --- | --- | --- |

8.

The EMCDDA has implemented the following measures in order to improve the management of its contracts:

—

a more precise procurement planning in terms of defining requirements,

| — | training for managers, |
| --- | --- |

—

training for managers,

| — | the development of standard contract forms, |
| --- | --- |

—

the development of standard contract forms,

| — | the clarification of the internal procedures used for commitments, |
| --- | --- |

—

the clarification of the internal procedures used for commitments,

| — | the introduction of checklists for payments and other budgetary operations. |
| --- | --- |

—

the introduction of checklists for payments and other budgetary operations.

| 9. | In order to take account of the Court's observation, the EMCDDA put in place a monthly reconciliation procedure in September 2005, providing for the signature of the Accounting Officer and submission to the Authorising Officer. The EMCDDA will implement a countersigning system as soon as possible. |
| --- | --- |

9.

In order to take account of the Court's observation, the EMCDDA put in place a monthly reconciliation procedure in September 2005, providing for the signature of the Accounting Officer and submission to the Authorising Officer. The EMCDDA will implement a countersigning system as soon as possible.

| 10. | The implementation of a new, more effective, inventory system made it necessary to use calculation sheets in order to ensure continuity of management. The closure of inventory 2005 will be based on this new system. |
| --- | --- |

10.

The implementation of a new, more effective, inventory system made it necessary to use calculation sheets in order to ensure continuity of management. The closure of inventory 2005 will be based on this new system.

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