# CE2004088EN.01011601.xml

| 8.4.2004 | EN | Official Journal of the European Union | CE 88/116 |
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8.4.2004

EN

Official Journal of the European Union

CE 88/116

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(2004/C 88 E/0122)

WRITTEN QUESTION E-2804/03

by Elisabeth Jeggle (PPE-DE) to the Commission

(19 September 2003)

Subject:   Urbs Asia Contract No Ala/95-21-b7-3010/39

Subject:

The town of Schelklingen is the Commission's partner in the above development aid programme with the town of Cagayan de Oro (the Philippines). The auditor which the municipal authorities had originally intended to employ to check the final accounts of the project is no longer available and, since this was the Schelkingen supervisory authority, its services would have been free of charge.

The Schelklingen municipal authorities are therefore obliged to find and commission a new project auditor. Initial estimates put the cost of this at approximately EUR 15 000 per inspection, so that the three inspections required by contract would amount to EUR 45 000. Since no provision was made for this expenditure and it cannot be paid for out of the municipal budget, savings will have to be made in the projects' budget.

In view of the above, will the Commission say:

| 1. | Can it suggest an economical, unbureaucratic way for the municipal authorities of the town of Schelkingen to carry out the three final project audits, without restricting the projects financially? |
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1.

Can it suggest an economical, unbureaucratic way for the municipal authorities of the town of Schelkingen to carry out the three final project audits, without restricting the projects financially?

| 2. | Can it retrospectively authorise the cost of final project audit? |
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2.

Can it retrospectively authorise the cost of final project audit?

| 3. | Will it help solve the problem by permitting the necessary costs of the final project audits to be paid for out of the project budget? |
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3.

Will it help solve the problem by permitting the necessary costs of the final project audits to be paid for out of the project budget?

Answer given by Mr Patten on behalf of the Commission

(23 October 2003)

(23 October 2003)

| 1. | According to Commission procedures applicable to this grant contract, projects accounts must be audited on an annual basis. The audit firm must be an independent body, not a city internal department. The City of Schelklingen is invited to inform the Commission of the proposed change (including name, address and status of substitute) before recruiting the new audit firm. |
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1.

According to Commission procedures applicable to this grant contract, projects accounts must be audited on an annual basis. The audit firm must be an independent body, not a city internal department. The City of Schelklingen is invited to inform the Commission of the proposed change (including name, address and status of substitute) before recruiting the new audit firm.

| 2. | To increase the audit budget provided for in the contract budget, a request for a budget modification must be sent to the Commission (and approved by them) prior to enforcing the changes. The modification can consist for instance of reallocating the contingency costs to the audit costs. Terms of the contract in the General Conditions indicate the conditions under which a budget may be reallocated. |
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2.

To increase the audit budget provided for in the contract budget, a request for a budget modification must be sent to the Commission (and approved by them) prior to enforcing the changes. The modification can consist for instance of reallocating the contingency costs to the audit costs. Terms of the contract in the General Conditions indicate the conditions under which a budget may be reallocated.

| 3. | Yes. However, as stated above, a budget modification may be necessary. The Beneficiary must submit a detailed budget amendment request to the Commission. The amendment request should consist of the indication of the modified budget items for audit costs. Other budget items to be decreased to enable the reallocation of funds must be specified with the corresponding modified figures. The modifications must not result in jeopardising the final outcome of the project as defined in the grant contract.
  The Beneficiary is invited to contact the relevant Commission services for further assistance in this matter. |
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3.

Yes. However, as stated above, a budget modification may be necessary. The Beneficiary must submit a detailed budget amendment request to the Commission. The amendment request should consist of the indication of the modified budget items for audit costs. Other budget items to be decreased to enable the reallocation of funds must be specified with the corresponding modified figures. The modifications must not result in jeopardising the final outcome of the project as defined in the grant contract.

The Beneficiary is invited to contact the relevant Commission services for further assistance in this matter.

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