Report

on the financial statements of the European Monitoring Centre for Drugs and Drug Addiction (EMCDDA - Lisbon) for the financial year ended 31 December 1998, together with the Monitoring Centre's replies

(1999/C 372/08)

CONTENTS

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The Court's opinion

1. This report is addressed to the Management Board of the European Monitoring Centre for Drugs and Drug Addiction in conformity with Article 11(11) of Council Regulation (EEC) No 302/93(1).

2. The Court has examined the financial statements of the European Monitoring Centre for Drugs and Drug Addiction for the financial year ended 31 December 1998. In accordance with Article 11(8) of Regulation (EEC) No 302/93, the budget was implemented under the responsibility of the Director. This responsibility included the drawing-up and presentation of the financial statements(2) in accordance with the internal financial provisions, as provided for in Article 11(12) of Regulation (EEC) No 302/93, as modified by Article 1 of Regulation (EC) No 3294/94(3). The Court of Auditors is required under Article 248 of the Treaty establishing the European Community to examine these accounts.

3. The Court performed its audit in accordance with its auditing policies and standards. These have been adapted from generally accepted international auditing standards to reflect the specific characteristics of the Community context. Accordingly, the Court carried out such tests of the accounting records and other auditing procedures as it deemed necessary in the circumstances. By means of this audit, the Court obtained a reasonable basis for the opinion expressed below.

4. This examination has enabled the Court to obtain reasonable assurance that the annual accounts for the financial year ended on 31 December 1998 are reliable and that the underlying transactions, taken as a whole, are legal and regular.

Main observations on the implementation of the budget of the European Monitoring Centre for Drugs and Drug Addiction for the financial year ended 31 December 1998

Budgetary accounts and appropriations carried forward

5. Due to delays in the introduction of the SI 2 system, the budgetary accounts continued to be kept by means of a spreadsheet (Excel) during 1998. The new SI 2 system is to be introduced as of the financial year 1999. The general accounts will continue to be kept by means of the Cubic software.

6. ECU 2,4 million in appropriations was carried forward from 1998 to 1999 (25 % of the Monitoring Centre's final budget). They mainly concerned Title III of the budget: ECU 0,4 million was for consultations, studies, surveys and training, ECU 0,2 million regarded publications of a general character and ECU 0,6 million concerned direct support for the focal points. The main reason for these carry-overs was the budgetary authority's delay in freeing the reserve of ECU 2 million.

Contracts/national focal points of the network (Reitox)

7. Many of the contracts had been allocated by private treaty or restricted invitation to tender. Because of the delay in launching the procedures, the contracts for 14 specific Reitox measures (out of the 20 undertaken during 1998) were signed during the last two months of the financial year.

Imprest accounts

8. The Centre continued to carry out a significant part of its expenditure via an imprest account. Thus, 22 % of the payments for the financial year were carried out by imprest account (ECU 1,6 million out of ECU 7,2 million). The Court once again recommends that the Centre should wind down its use of imprest accounts.

Publication of the budget

9. In breach of the requirement laid down in Article 13 of its Financial Regulation, the Centre did not publish either its budget or organisation chart in the Official Journal of the European Communities.

This report was adopted by the Court of Auditors in Luxembourg at the Court meeting of 22 and 23 September 1999.

For the Court of Auditors

Jan O. KARLSSON

President

(1) OJ L 36, 12.2.1993, p. 1.

(2) As required under Article 11(10) of Council Regulation (EEC) No 302/93, the accounts for all the Monitoring Centre's revenue and expenditure for the financial year 1998 were drawn up on 26 May 1999 and forwarded to the Centre's Management Board, the Commission and the Court of Auditors. These accounts were received by the Court on 31 May 1999. A summarised version of these accounts is presented in the tables attached to this report.

(3) OJ L 341, 30.12.1994, p. 7.

Table 1

Balance sheet for the financial years 1998 and 1997

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Table 2

Revenue and expenditure account for the financial years 1998 and 1997

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Replies from the EMCDDA

Points 1 to 4

The EMCDDA welcomes the Court of Auditors' observation that the annual accounts for the financial year ended 31 December 1998 are reliable and that the underlying transactions, taken as a whole, are legal and regular.

Point 5

The EMCDDA introduced the SI 2 system in January 1999, at the same time as the European Commission, as soon as it was made available to the EMCDDA following its adaptation to the agencies.

Point 6

No comments on this point.

Point 7

Of the EMCDDA's contracts 26 % were allocated by private treaty and 55 % by restricted invitations to tender following calls for expression of interest, in accordance, in all cases, with the legislation applicable to the EMCDDA.

The timetable for the signature of contracts for the specific Reitox projects was conditioned notably by the late lifting of the ECU 2000 000 reserve placed on the EMCDDA's budget for 1998 by the European Parliament.

Point 8

The EMCDDA supports the Court of Auditors' recommendation that the use of imprest accounts should be progressively wound down.

Point 9

In order to minimise publication costs, the EMCDDA had requested the Court of Auditors' opinion on a possible amendment to its Financial Regulation to replace the publication in the Official Journal of the European Communities by an electronic publication via the Monitoring Centre's Internet site. Following the Court of Auditors' negative reply of 24 March 1999, the procedure for publication in the Official Journal of the European Communities was launched, while maintaining the electronic publication via the Internet.