# C_2011366EN.01003901.xml

| 15.12.2011 | EN | Official Journal of the European Union | C 366/39 |
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15.12.2011

EN

Official Journal of the European Union

C 366/39

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REPORT

on the annual accounts of the European Agency for the Management of Operational Cooperation at the External Borders of the Member States for the financial year 2010, together with the Agency's replies

2011/C 366/08

INTRODUCTION

INTRODUCTION

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

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

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| 2. | The Agency's 2010 budget amounted to 93 million euro compared with 89 million euro the previous year. The number of staff employed by the Agency at the end of the year was 279 as compared with 226 the previous year. |
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2.

The Agency's 2010 budget amounted to 93 million euro compared with 89 million euro the previous year. The number of staff employed by the Agency at the end of the year was 279 as compared with 226 the previous year.

STATEMENT OF ASSURANCE

STATEMENT OF ASSURANCE

| 3. | Pursuant to the provisions of Article 287(1), second subparagraph, of the Treaty on the Functioning of the European Union, the Court has audited the annual accounts (3) of the Agency, which comprise the ‘financial statements’ (4) and the ‘reports on the implementation of the budget’ (5) for the financial year ended 31 December 2010, and the legality and regularity of the transactions underlying those accounts. |
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3.

Pursuant to the provisions of Article 287(1), second subparagraph, of the Treaty on the Functioning of the European Union, the Court has audited the annual accounts (3) of the Agency, which comprise the ‘financial statements’ (4) and the ‘reports on the implementation of the budget’ (5) for the financial year ended 31 December 2010, and the legality and regularity of the transactions underlying those accounts.

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| 4. | This Statement of Assurance is addressed to the European Parliament and the Council in accordance with Article 185(2) of Council Regulation (EC, Euratom) No 1605/2002 (6). |
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4.

This Statement of Assurance is addressed to the European Parliament and the Council in accordance with Article 185(2) of Council Regulation (EC, Euratom) No 1605/2002 (6).

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The Director's responsibility

The Director's responsibility

| 5. | As authorising officer, the Director implements the revenue and expenditure of the budget in accordance with the financial rules of the Agency, under his own responsibility and within the limits of the authorised appropriations (7). The Director is responsible for putting in place (8) the organisational structure and the internal management and control systems and procedures relevant for drawing up final accounts (9) that are free from material misstatement, whether due to fraud or error, and for ensuring that the transactions underlying those accounts are legal and regular. |
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5.

As authorising officer, the Director implements the revenue and expenditure of the budget in accordance with the financial rules of the Agency, under his own responsibility and within the limits of the authorised appropriations (7). The Director is responsible for putting in place (8) the organisational structure and the internal management and control systems and procedures relevant for drawing up final accounts (9) that are free from material misstatement, whether due to fraud or error, and for ensuring that the transactions underlying those accounts are legal and regular.

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The Court's responsibility

The Court's responsibility

| 6. | The Court's responsibility is to provide, on the basis of its audit, a statement of assurance as to the reliability of the annual accounts of the Agency and the legality and regularity of the transactions underlying them. |
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6.

The Court's responsibility is to provide, on the basis of its audit, a statement of assurance as to the reliability of the annual accounts of the Agency and the legality and regularity of the transactions underlying them.

| 7. | The Court conducted its audit in accordance with the IFAC and ISSAI (10) International Auditing Standards and Codes of Ethics. Those standards require the Court to comply with ethical requirements and to plan and perform the audit so as to obtain reasonable assurance as to whether the accounts are free of material misstatement and whether the underlying transactions are legal and regular. |
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7.

The Court conducted its audit in accordance with the IFAC and ISSAI (10) International Auditing Standards and Codes of Ethics. Those standards require the Court to comply with ethical requirements and to plan and perform the audit so as to obtain reasonable assurance as to whether the accounts are free of material misstatement and whether the underlying transactions are legal and regular.

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| 8. | The Court's audit involves performing procedures to obtain audit evidence of the amounts and disclosures in the accounts and of the legality and regularity of the transactions underlying them. The procedures selected, including its assessment of the risks of material misstatement of the accounts or of illegal or irregular transactions, whether due to fraud or error, depend on its audit judgement. In making those risk assessments, internal controls relevant to the entity's preparation and presentation of accounts are considered in order to design audit procedures that are appropriate in the circumstances. The Court's audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the accounts. |
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8.

The Court's audit involves performing procedures to obtain audit evidence of the amounts and disclosures in the accounts and of the legality and regularity of the transactions underlying them. The procedures selected, including its assessment of the risks of material misstatement of the accounts or of illegal or irregular transactions, whether due to fraud or error, depend on its audit judgement. In making those risk assessments, internal controls relevant to the entity's preparation and presentation of accounts are considered in order to design audit procedures that are appropriate in the circumstances. The Court's audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the accounts.

| 9. | The Court believes that the audit evidence obtained is sufficient and appropriate to provide a basis for the opinions set out below. |
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9.

The Court believes that the audit evidence obtained is sufficient and appropriate to provide a basis for the opinions set out below.

Opinion on the reliability of the accounts

Opinion on the reliability of the accounts

| 10. | In the Court's opinion, the Agency's Annual Accounts (11) fairly present, in all material respects, its financial position as of 31 December 2010 and the results of its operations and its cash flows for the year then ended, in accordance with the provisions of its Financial Regulation. |
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10.

In the Court's opinion, the Agency's Annual Accounts (11) fairly present, in all material respects, its financial position as of 31 December 2010 and the results of its operations and its cash flows for the year then ended, in accordance with the provisions of its Financial Regulation.

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Opinion on the legality and the regularity of the transactions underlying the accounts

Opinion on the legality and the regularity of the transactions underlying the accounts

| 11. | In the Court's opinion, the transactions underlying the annual accounts of the Agency for the financial year ended 31 December 2010 are, in all material respects, legal and regular. |
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11.

In the Court's opinion, the transactions underlying the annual accounts of the Agency for the financial year ended 31 December 2010 are, in all material respects, legal and regular.

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

The comments which follow do not call the Court's opinions into question.

COMMENTS ON THE BUDGETARY AND FINANCIAL MANAGEMENT

COMMENTS ON THE BUDGETARY AND FINANCIAL MANAGEMENT

| 13. | An amount of 26,5 million euro, representing 28 % of the available budget, was carried forward to 2011. Only 12 million euro of this amount was matched by accruals. This situation is at odds with the principle of annuality. |
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13.

An amount of 26,5 million euro, representing 28 % of the available budget, was carried forward to 2011. Only 12 million euro of this amount was matched by accruals. This situation is at odds with the principle of annuality.

| 14. | Weaknesses were noted in the system for reconciling suppliers' statements with the corresponding records at the Agency. |
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14.

Weaknesses were noted in the system for reconciling suppliers' statements with the corresponding records at the Agency.

| 15. | The Agency's accounting system has still to be validated by the Accounting Officer, as required by the Financial Regulation. |
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15.

The Agency's accounting system has still to be validated by the Accounting Officer, as required by the Financial Regulation.

This Report was adopted by Chamber IV, headed by Mr Igors LUDBORŽS, Member of the Court of Auditors, in Luxembourg at its meeting of 13 September 2011.

For the Court of Auditors

Vítor Manuel da SILVA CALDEIRA

President

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

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

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Annex

(3)  These accounts are accompanied by a report on the budgetary and financial management during the year which gives inter alia an account of the rate of implementation of the appropriations, with summary information on the transfers of appropriations among the various budget items.

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(4)  The financial statements include the balance sheet and the economic outturn account, the cash-flow table, the statement of changes in capital and the annex to the financial statements, which includes a description of the main accounting policies and other explanatory information.

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

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

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

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

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

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

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(11)  The Final Annual Accounts were drawn up on 14 June 2011 and received by the Court on 8 July 2011. The Final Annual Accounts can be found on the following website http://eca.europa.eu or http://www.frontex.europa.eu/budget_and_finance/

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ANNEX

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

Competences and activities

| Areas of Union competence deriving from the Treaty


  (Articles 74 and 77 of TFEU) | The Council shall adopt measures to ensure administrative cooperation between the relevant departments of the Member States in the([domains described hereafter), as well as between those departments and the Commission.
  The Union shall develop a policy with a view to:
  (...)






  (b) | carrying out checks on persons and efficient monitoring of the crossing of external borders; |
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Areas of Union competence deriving from the Treaty

(Articles 74 and 77 of TFEU)

The Council shall adopt measures to ensure administrative cooperation between the relevant departments of the Member States in the([domains described hereafter), as well as between those departments and the Commission.

The Union shall develop a policy with a view to:

(...)

(b)

carrying out checks on persons and efficient monitoring of the crossing of external borders;

| (c) | the gradual introduction of an integrated management system for external borders. |
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(c)

the gradual introduction of an integrated management system for external borders.

Competences of the Agency

(Council Regulation (EC) No 2007/2004)

Objectives

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

Frontex must:

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

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

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

Main tasks

| — | To coordinate operational cooperation between Member States in the field of the management of external borders, |
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To coordinate operational cooperation between Member States in the field of the management of external borders,

| — | to assist Member States in training of national border guards and establish common training standards, |
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to assist Member States in training of national border guards and establish common training standards,

| — | to carry out risk analysis, |
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to carry out risk analysis,

| — | to follow up on the development of research in control and surveillance, |
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to follow up on the development of research in control and surveillance,

| — | to assist Member States in circumstances requiring increased technical and operational assistance, |
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to assist Member States in circumstances requiring increased technical and operational assistance,

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

Governance

1 —   Management Board

Composed of:

| — | 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,

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

2 —   Executive Director

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

3 —   External audit

Court of Auditors.

4 —   Discharge Authority

Parliament, acting on a recommendation from the Council.

Resources made available to the Agency in 2010 (2009)

Budget

93,2 (88,8) million euro

of which Commission subsidy: 89,1 (85) million euro

Staff at 31 December 2010

| — | Establishment plan: 143 (117), Occupied: 139 (100) |
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Establishment plan: 143 (117), Occupied: 139 (100)

Other posts:

| | Contract staff planned: 79 (68), occupied: 79 (60) |
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Contract staff planned: 79 (68), occupied: 79 (60)

| | SNE's planned: 76 (70), occupied: 76 (66) |
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SNE's planned: 76 (70), occupied: 76 (66)

Total staff number: 294 (226)

Assigned to the following occupied tasks:

| — | operational: 203 (157) |
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operational: 203 (157)

| — | administrative: 91 (69) |
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administrative: 91 (69)

Products and services in 2010 (2009)

Risk Analysis has produced 10 long–term strategic assessments, four quarterly reports, 160 analytical products supporting Joint Operations (including Weekly Briefings), 47 reports of other types, including briefings for Frontex Management and contributions to other organisations or institutions. four regular FRAN meetings and four regional Expert Meetings were organised. The Frontex Risk Analysis Network as well as regional networks for information exchange were further developed. 14 training sessions were implemented within the framework of Frontex Borders Analytical Community Project with the total participation of 232 MS and RAU analysts.

In 2010, the Joint Operations Unit (JOU) has organised 17 joint operations, carried out under five Programmes, nine pilot projects (PP), 40 joint return operations and four conferences. Moreover, the Rapid Border Intervention Team (RABIT) Operation was implemented in Greece. The total number of days in operation has increased by 27 % to 6 471. JOU has also contributed to the establishment of PP Frontex Operational Office in Piraeus.

In the framework of the three programmes comprising 18 projects, the Training Unit has organised 176 activities in 2010 with the participation of 4 015 attendees (training experts, trainees, etc.); a total of approximately 11 000 man-days were invested by the stakeholders in training activities.

The Pooled Resources Unit (PRU) implemented nine projects in 2010 to improve the effectiveness of Frontex operations. At the end of 2010, PRU coordinated the deployment of the RABIT Operation 2010 in Greece (567 officers deployed, 19 186 man-days, 68 items of equipment, 5 371 days in operation).

The Frontex Situation Centre provided situation monitoring delivering 500 situation reports, early alerts notices, and 14 mission awareness reports to internal and external customers. Daily Newsletters were delivered to 350 accounts, amongst which were many external portals which, in turn, provided distribution to many more external clients. The Frontex Situation Centre, as the single point of contact for information exchange, managed about 20 000 correspondence items and implemented the Frontex-One-Stop-Shop (FOSS), a web-based information portal, being used by 30 countries and 900 users. Next to intensive Eurosur programme support, other project management activities — aiming to automate information exchange, situation and media monitoring and reporting services — were initiated.

In 2010, the Research & Development Unit (R&D) organised 32 meetings. It participated in approximately 110 internal and external workshops, conferences and working meetings. R&D produced 10 reports, three publications and one guideline document. The unit initiated five new projects and continued with projects from 2008 and 2009. Four studies were commissioned in 2010 (to be completed in 2011) and four contracts were signed regarding Eurosur and the intelligence and communications project.

Cooperation with third countries included the conclusion of a working arrangement with the Canada Border Services Agency and a memorandum with the Coordination Service of CIS Border Troop Commanders Council. Cooperation Plans with Croatia, Ukraine, US and Belarus were also signed. Increased participation of all third country partners in Frontex coordinated activities was achieved.

Cooperation with EU Bodies and international organisations has been further developed. By the end of 2010, working arrangements (WAs) had been signed with Europol, Interpol, the SGC Sitcen, Cepol, IOM, ICMPD, UNHCR, EMSA, CFCA and FRA. A Memory of understanding has been signed with DG JLS for the development of ICONet and a coordination mechanism Council document was agreed with CCWP. The implementation of the cooperation plan is proceeding with Europol and the IOM. Discussions have started with the Democratic Control of Armed Forces (DCAF), the EU Joint Research Centre (JRC) and Eurojust as well as with the International Civil Aviation Authority on the signature of WAs to be completed in 2011.

Source: Information supplied by the Agency.

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THE AGENCY'S REPLIES

| 13. | The permanent or long-time nature of Frontex's joint operations makes unavoidable that the execution of the corresponding commitments extends beyond the year end.
  Nevertheless, Frontex will continue to decrease as much as possible the volume of carried forward appropriations by strengthening its monitoring of joint activities in order to adjust the grants as early as possible. |
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13.

The permanent or long-time nature of Frontex's joint operations makes unavoidable that the execution of the corresponding commitments extends beyond the year end.

Nevertheless, Frontex will continue to decrease as much as possible the volume of carried forward appropriations by strengthening its monitoring of joint activities in order to adjust the grants as early as possible.

| 14. | Most of the public entities do not have centralised accounting systems and some of them do not implement accrual based accounting, making difficult the process of vendor balances' reconciliation.
  Frontex will take contact with the national authorities to try to implement alternative procedures in view to reconcile its balances with those of its suppliers. |
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14.

Most of the public entities do not have centralised accounting systems and some of them do not implement accrual based accounting, making difficult the process of vendor balances' reconciliation.

Frontex will take contact with the national authorities to try to implement alternative procedures in view to reconcile its balances with those of its suppliers.

| 15. | Frontex started a Business Process Mapping project for financial processes in the beginning of 2011. The description of the majority of the financial processes has been effected during the first half of 2011 The validation will be completed during the second half of 2011. |
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15.

Frontex started a Business Process Mapping project for financial processes in the beginning of 2011. The description of the majority of the financial processes has been effected during the first half of 2011 The validation will be completed during the second half of 2011.

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