# C_2005332EN.01007501.xml

| 28.12.2005 | EN | Official Journal of the European Union | C 332/75 |
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28.12.2005

EN

Official Journal of the European Union

C 332/75

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REPORT

REPORT

on the annual accounts of the European Training Foundation for the financial year 2004 together with the Foundation's replies

(2005/C 332/11)

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 Foundation's replies

The Foundation's replies

INTRODUCTION

| 1. | The European Training Foundation (hereinafter called ‘the Foundation’) was created by Council Regulation (EEC) No 1360/90 of 7 May 1990 (1). The Foundation's purpose is to support the reform of vocational training in the European Union's partner countries. As such, it assists the Commission in the implementation of various programmes (Phare, Tacis, Cards and Meda). Table 1 summarises the competences and activities of the Foundation on the basis of the information supplied by it. |
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1.

The European Training Foundation (hereinafter called ‘the Foundation’) was created by Council Regulation (EEC) No 1360/90 of 7 May 1990 (1). The Foundation's purpose is to support the reform of vocational training in the European Union's partner countries. As such, it assists the Commission in the implementation of various programmes (Phare, Tacis, Cards and Meda). Table 1 summarises the competences and activities of the Foundation on the basis of the information supplied by it.

1

Table 1

| 2. | For information, the annual accounts drawn up by the Foundation 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 Foundation 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 Foundation'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 Foundation's accounts, as required by Article 248 of the Treaty establishing the European Community.

2

| 4. | The Foundation'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 1360/90, 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 Foundation'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 1360/90, 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 accountsExcept for the situation described in paragraph 8, the Foundation'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 Foundation's annual accounts, taken as a whole, are legal and regular.

Reliability of the accountsExcept for the situation described in paragraph 8, the Foundation'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 Foundation's annual accounts, taken as a whole, are legal and regular.

OBSERVATIONS

| 7. | The Tempus programmes, which are managed by the Foundation under a Commission mandate, are not shown in the Foundation's budget. This situation does not comply with the principles of unity and budget accuracy (4), as the Court has pointed out before on several occasions (5). |
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7.

The Tempus programmes, which are managed by the Foundation under a Commission mandate, are not shown in the Foundation's budget. This situation does not comply with the principles of unity and budget accuracy (4), as the Court has pointed out before on several occasions (5).

4

5

| 8. | The Foundation sets out the financial information concerning these programmes (6) in an annex to its annual accounts. Managing these programmes is, however, an integral part of the Foundation's work and takes up a significant part of its human and material resources. The Foundation's accounts, which are supposed, amongst other things, to faithfully reflect its revenue and expenditure, cannot simply exclude the expenditure incurred within the framework of these programmes. |
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8.

The Foundation sets out the financial information concerning these programmes (6) in an annex to its annual accounts. Managing these programmes is, however, an integral part of the Foundation's work and takes up a significant part of its human and material resources. The Foundation's accounts, which are supposed, amongst other things, to faithfully reflect its revenue and expenditure, cannot simply exclude the expenditure incurred within the framework of these programmes.

6

| 9. | The Foundation's budget published in the Official Journal specifies the revenue and expenditure by title and chapter only, without further subdividing them into articles and items as required by the budgetary principle of specification (7). Moreover, it does not contain an establishment plan (8). |
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9.

The Foundation's budget published in the Official Journal specifies the revenue and expenditure by title and chapter only, without further subdividing them into articles and items as required by the budgetary principle of specification (7). Moreover, it does not contain an establishment plan (8).

7

8

| 10. | The revenue and expenditure account for the financial year 2003 shows a loss of 1,3 million euro. This balance should have been entered in an amending budget for the financial year 2004 (9). |
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10.

The revenue and expenditure account for the financial year 2003 shows a loss of 1,3 million euro. This balance should have been entered in an amending budget for the financial year 2004 (9).

9

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 131, 23.5.1990.

1

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

2

(3)  These accounts were drawn up on 18 August 2005 and received by the Court on 22 September 2005.

3

(4)  Article 6(1) and (2) of the Foundation's financial regulation.

4

(5)  Paragraph 9 of the report for the financial year 2002 (OJ C 319, 30.12.2003, p. 48), paragraph 8 of the report for the financial year 2001 (OJ C 326, 27.12.2002, p. 51) and paragraph 11 of the report for the financial year 1999 (OJ C 373, 27.12.2000, p. 34).

5

(6)  The total for payments made in 2004 for the implementation of the Tempus programmes was 9,3 million euro.

6

(7)  Article 22 of the Foundation's financial regulation.

7

(8)  Article 27(3) of the Foundation's financial regulation.

8

(9)  Article 16 of the Foundation's financial regulation.

9

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Table 1

European Training Foundation (Turin)

| Areas of Community competence deriving from the Treaty | Competences of the Foundation
  Council Regulation (EEC) No 1360/90 of 7 May 1990 | Governance | Resources made available to the Foundation in 2004

  (2003 data) | Products and services supplied during the financial year 2004 |
| --- | --- | --- | --- | --- |
| ‘The Community shall carry out, within its spheres of competence, economic, financial and technical cooperation measures with third countries. Such measures shall be complementary to those carried out by the Member States and consistent with the development policy of the Community’.

  (Article 181 A) | Objectives







  — | To contribute to the provision of training assistance to the countries of Central and Eastern Europe and Mongolia, to some countries of the Balkans area and to the countries and territories eligible for the Meda programmes; |

Areas of Community competence deriving from the Treaty

Competences of the Foundation

Council Regulation (EEC) No 1360/90 of 7 May 1990

Governance

Resources made available to the Foundation in 2004

(2003 data)

Products and services supplied during the financial year 2004

‘The Community shall carry out, within its spheres of competence, economic, financial and technical cooperation measures with third countries. Such measures shall be complementary to those carried out by the Member States and consistent with the development policy of the Community’.

(Article 181 A)

Objectives

—

To contribute to the provision of training assistance to the countries of Central and Eastern Europe and Mongolia, to some countries of the Balkans area and to the countries and territories eligible for the Meda programmes;

| — | To promote the coordination of the assistance given to eligible countries. |
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—

To promote the coordination of the assistance given to eligible countries.

Tasks

| — | Assistance in defining training needs and priorities; |
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—

Assistance in defining training needs and priorities;

| — | Provision of information on initiatives and future needs; |
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—

Provision of information on initiatives and future needs;

| — | Financing pilot projects; |
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—

Financing pilot projects;

| — | Implementation of Commission programmes in eligible countries. |
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—

Implementation of Commission programmes in eligible countries.

Governing Board

| — | one representative of each Member State |
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—

one representative of each Member State

| — | two representatives of the Commission |
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—

two representatives of the Commission

Director

| — | appointed by the Governing Board on a proposal from the Commission |
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—

appointed by the Governing Board on a proposal from the Commission

Advisory Forum

| — | appointed by the Governing Board |
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—

appointed by the Governing Board

| — | two experts from each Member State |
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—

two experts from each Member State

| — | two experts from each eligible country |
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—

two experts from each eligible country

| — | two experts from the social partners at European level |
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—

two experts from the social partners at European level

External audit

European Court of Auditors

Discharge

European Parliament on a recommendation from the Council

Budget

18,4 million euro (17,2 million euro) fully financed by the Commission

Staff numbers as at 31 December 2004

| — | 104 (104) posts in the establishment plan, of which 99 (99) posts occupied |
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—

104 (104) posts in the establishment plan, of which 99 (99) posts occupied

| — | 31 (31) other posts (auxiliaries, national experts, employment agency staff). |
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—

31 (31) other posts (auxiliaries, national experts, employment agency staff).

Total staff: 130 (130) assigned to the following duties:

| — | operational tasks: 82 (80) |
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—

operational tasks: 82 (80)

| — | administrative tasks: 35 (35) |
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—

administrative tasks: 35 (35)

| — | mixed tasks: 13 (15) |
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—

mixed tasks: 13 (15)

Activities

The ETF covers a wide range of areas including: initial vocational training, lifelong learning, continuing (adult) education, human resource development in companies, employment policies, training of unemployed people, poverty alleviation and social inclusion and training to encourage local development. There were 169 applications in 2004 as against 143 in 2003, most of which were from the Delegations (35 %), followed by AIDCO (21 %), DG EAC (16 %), DG ELARG (9 %) and DG RELEX (7 %). The most frequent applications were those in the field of programming (42 applications), followed by advice on policies and contributions in the preparation of European Neighbourhood Instruments (28), identification of projects (19) and follow-up (18).

Network of observatories in eligible countries: country sector studies, statistics on education, policy advice to countries.

Development projects:

As a centre of expertise, the ETF contributes to the setting-up of development projects in order to test innovatory approaches allowing partner countries to carry out reforms of their education and vocational training systems.

Technical assistance Conventions with Cards, Meda and Tacis for the Tempus programme.

This assistance covers the whole cycle of the project. It includes the selection, management and follow-up of contracts and information and communication, including general administrative support. IT tools such as online applications and report forms have greatly facilitated the administrative management of the various project cycles.

Source: Information provided by the Foundation.

Table 2

European Training Foundation — Implementation of the budget for the financial year 2004

| (1000 euro) |
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| Revenue | Expenditure |
| Source of revenue | Revenue entered in the final budget for the financial year | Revenue received | Allocation of expenditure | Final budget appropriations | Appropriations carried over from the previous financial year | Appropriations available |
| entered | committed | paid | carried over | cancelled | commitments outstanding | paid | carried over | cancelled | Appropriations | committed | paid | carried over | cancelled |
| Community subsidies | 17 600 | 17 600 | Title I
  Staff | 11 494 | 11 245 | 11 122 | 123 | 249 | 329 | 307 | 0 | 22 | 11 823 | 11 574 | 11 429 | 123 | 271 |
| Earmarked revenue | 800 | 800 | Title II
  Administration | 1 470 | 1 460 | 1 213 | 247 | 10 | 310 | 301 | 0 | 9 | 1 780 | 1 770 | 1 514 | 247 | 19 |
| Other revenue | 0 | 80 | Title III
  Operating activities | 4 636 | 4 617 | 3 449 | 1 168 | 19 | 1 087 | 914 | 0 | 173 | 5 723 | 5 704 | 4 363 | 1 168 | 192 |
| | | | Earmarked revenue | 800 | 800 | 260 | 540 | 0 | 286 | 174 | 112 | 0 | 1 086 | 1 086 | 434 | 652 | 0 |
| Total | 18 400 | 18 480 | Total | 18 400 | 18 122 | 16 044 | 2 078 | 278 | 2 012 | 1 696 | 112 | 204 | 20 412 | 20 134 | 17 740 | 2 190 | 482 |
| NB: Variations in totals are due to the effects of rounding.

  Source: Foundation data — This table summarises the data supplied by the Foundation in its annual accounts. |

(1000 euro)

Revenue

Expenditure

Source of revenue

Revenue entered in the final budget for the financial year

Revenue received

Allocation of expenditure

Final budget appropriations

Appropriations carried over from the previous financial year

Appropriations available

entered

committed

paid

carried over

cancelled

commitments outstanding

paid

carried over

cancelled

Appropriations

committed

paid

carried over

cancelled

Community subsidies

17 600

17 600

Title I

Staff

11 494

11 245

11 122

123

249

329

307

0

22

11 823

11 574

11 429

123

271

Earmarked revenue

800

800

Title II

Administration

1 470

1 460

1 213

247

10

310

301

0

9

1 780

1 770

1 514

247

19

Other revenue

0

80

Title III

Operating activities

4 636

4 617

3 449

1 168

19

1 087

914

0

173

5 723

5 704

4 363

1 168

192

Earmarked revenue

800

800

260

540

0

286

174

112

0

1 086

1 086

434

652

0

Total

18 400

18 480

Total

18 400

18 122

16 044

2 078

278

2 012

1 696

112

204

20 412

20 134

17 740

2 190

482

NB: Variations in totals are due to the effects of rounding.

Source: Foundation data — This table summarises the data supplied by the Foundation in its annual accounts.

Table 3

European Training Foundation — Revenue and expenditure account for the financial years 2004 and 2003 (1)

| (1000 euro) |
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| | 2004 | 2003 |
| Revenue |
| Commission subsidies | 17 600 | 18 100 |
| Other donors | 800 | 523 |
| Miscellaneous revenue | 80 | 17 |
| Total revenue (a) | 18 480 | 18 640 |
| Expenditure |
| Staff — Title I of the budget |
| Payments | 11 122 | 10 771 |
| Appropriations carried over | 123 | 329 |
| Administration — Title II of the budget |
| Payments | 1 213 | 1 076 |
| Appropriations carried over | 247 | 310 |
| Operating activities — Title III of the budget |
| Payments | 3 449 | 3 396 |
| Appropriations carried over | 1 168 | 1 087 |
| Earmarked revenue |
| Payments | 260 | 237 |
| Appropriations carried over | 540 | 286 |
| Total expenditure (b) | 18 122 | 17 492 |
| Outturn for the financial year (a – b) | 358 | 1 148 |
| Balance carried over from the previous financial year | –1 318 | –2 155 |
| Appropriations carried over and cancelled | 204 | 375 |
| Reimbursements to the Commission | 0 | – 703 |
| Exchange-rate differences | –3 | 17 |
| Balance for the financial year | – 759 | –1 318 |
| Source: Foundation data — This table summarises the data supplied by the Foundation in its annual accounts. |

(1000 euro)

2004

2003

Revenue

Commission subsidies

17 600

18 100

Other donors

800

523

Miscellaneous revenue

80

17

Total revenue (a)

18 480

18 640

Expenditure

Staff — Title I of the budget

Payments

11 122

10 771

Appropriations carried over

123

329

Administration — Title II of the budget

Payments

1 213

1 076

Appropriations carried over

247

310

Operating activities — Title III of the budget

Payments

3 449

3 396

Appropriations carried over

1 168

1 087

Earmarked revenue

Payments

260

237

Appropriations carried over

540

286

Total expenditure (b)

18 122

17 492

Outturn for the financial year (a – b)

358

1 148

Balance carried over from the previous financial year

–1 318

–2 155

Appropriations carried over and cancelled

204

375

Reimbursements to the Commission

0

– 703

Exchange-rate differences

–3

17

Balance for the financial year

– 759

–1 318

Source: Foundation data — This table summarises the data supplied by the Foundation in its annual accounts.

Table 4

European Training Foundation — Balance sheet at 31 December 2004 and 31 December 2003 (2)

| (1000 euro) |
| --- |
| Assets | 2004 | 2003 | Liabilities | 2004 | 2003 |
| Intangible fixed assets | | | Fixed capital | | |
| Occupational rights | 5 000 | 5 000 | Own capital | 3 516 | 3 852 |
| Software licences | 174 | 146 | Balance for the financial year | – 759 | –1 318 |
| Depreciation | –1 809 | –1 611 | Subtotal | 2 757 | 2 534 |
| Subtotal | 3 365 | 3 535 | Current liabilities | | |
| Tangible fixed assets | | | Automatic carry-overs of appropriations | 1 538 | 1 726 |
| Equipment and furniture | 287 | 273 | Automatic carry-overs of earmarked revenue | 652 | 286 |
| Computer equipment | 1 189 | 1 438 | Other contributors | 134 | 30 |
| Depreciation | –1 325 | –1 444 | Sundry accounts payable | 1 | 1 |
| Subtotal | 151 | 267 | Deferred revenue | 43 | 83 |
| Stocks | | | Subtotal | 2 368 | 2 126 |
| Office equipment | 0 | 50 | | | |
| Subtotal | 0 | 50 | | | |
| Current assets | | | | | |
| Other advances | 2 | 4 | | | |
| Recovery orders | 24 | 43 | | | |
| Sundry accounts receivable | 0 | 39 | | | |
| Subtotal | 26 | 86 | | | |
| Cash accounts | | | | | |
| Bank accounts | 1 580 | 719 | | | |
| Imprest account | 3 | 3 | | | |
| Subtotal | 1 583 | 722 | | | |
| Total | 5 125 | 4 660 | Total | 5 125 | 4 660 |
| Source: Foundation data — This table summarises the data supplied by the Foundation in its annual accounts. |

(1000 euro)

Assets

2004

2003

Liabilities

2004

2003

Intangible fixed assets

Fixed capital

Occupational rights

5 000

5 000

Own capital

3 516

3 852

Software licences

174

146

Balance for the financial year

– 759

–1 318

Depreciation

–1 809

–1 611

Subtotal

2 757

2 534

Subtotal

3 365

3 535

Current liabilities

Tangible fixed assets

Automatic carry-overs of appropriations

1 538

1 726

Equipment and furniture

287

273

Automatic carry-overs of earmarked revenue

652

286

Computer equipment

1 189

1 438

Other contributors

134

30

Depreciation

–1 325

–1 444

Sundry accounts payable

1

1

Subtotal

151

267

Deferred revenue

43

83

Stocks

Subtotal

2 368

2 126

Office equipment

0

50

Subtotal

0

50

Current assets

Other advances

2

4

Recovery orders

24

43

Sundry accounts receivable

0

39

Subtotal

26

86

Cash accounts

Bank accounts

1 580

719

Imprest account

3

3

Subtotal

1 583

722

Total

5 125

4 660

Total

5 125

4 660

Source: Foundation data — This table summarises the data supplied by the Foundation in its annual accounts.

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(1)  The revenue and expenditure account and balance sheet only take account of the Foundation's specific activities: they do not include programmes managed on behalf of the Commission.

Source: Foundation data — This table summarises the data supplied by the Foundation in its annual accounts.

(2)  The revenue and expenditure account and balance sheet only take account of the Foundation's specific activities: they do not include programmes managed on behalf of the Commission.

Source: Foundation data — This table summarises the data supplied by the Foundation in its annual accounts.

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THE FOUNDATION'S REPLIES

| 7-8. | The implementation from 2005 onward by the Agency of the modernised EU accounting practices solves the difficulty reported by the Court. Ever since the Court highlighted its concerns, ETF has analysed the alternatives to integrate TEMPUS funds into its budget. Due to the characteristics of the mandate given to ETF and the applicable financial rules, no satisfactory solution could be found to integrate them in ETF budget. In consequence, ETF's 2004 accounts were presented the way used the preceding years. Nevertheless, ETF managed these funds with the same rigour as its own budget, and their use has been reported in an annex to ETF accounts as well as in the Commission's accounts. |
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7-8.

The implementation from 2005 onward by the Agency of the modernised EU accounting practices solves the difficulty reported by the Court. Ever since the Court highlighted its concerns, ETF has analysed the alternatives to integrate TEMPUS funds into its budget. Due to the characteristics of the mandate given to ETF and the applicable financial rules, no satisfactory solution could be found to integrate them in ETF budget. In consequence, ETF's 2004 accounts were presented the way used the preceding years. Nevertheless, ETF managed these funds with the same rigour as its own budget, and their use has been reported in an annex to ETF accounts as well as in the Commission's accounts.

| 9. | The costs of publishing the details of the budget in the OJ were felt to be disproportionate for an agency with an annual budget of less then 20 million euro. ETF took care to give to the readers all the necessary indications to obtain a fully detailed electronic version of its budget. |
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9.

The costs of publishing the details of the budget in the OJ were felt to be disproportionate for an agency with an annual budget of less then 20 million euro. ETF took care to give to the readers all the necessary indications to obtain a fully detailed electronic version of its budget.

| 10. | The ETF has taken measures to avoid such a situation in the future. |
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10.

The ETF has taken measures to avoid such a situation in the future.

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