REPORT on the 1993 accounts and management of the European Foundation for the improvement of living and working conditions (Dublin Foundation) accompanied by the replies of the Foundation (94/C 387/01)

1. INTRODUCTION 1.1. The Court of Auditors has examined the accounts and financial management of the Dublin Foundation for the financial year 1993, in accordance with the provisions of the relevant regulations (1).

1.2. Available appropriations for the financial year 1993 amounted to 11,5 Mio ECU. Commitments entered into gave rise to 8,3 Mio ECU in payments and 2,9 Mio in carry-overs to the financial year 1994, the balance of 0,3 Mio ECU having been cancelled. Appropriations carried over from the previous year gave rise to 1,7 Mio ECU in payments and 0,2 Mio ECU in cancellations. The Annex attached to this report gives an analysis by chapter of the utilization of the appropriations for the year and for those carried over from 1992.

2. FOLLOW UP OF PREVIOUS OBSERVATIONS

Separation of duties

2.1. The inadequate segregation of duties between the authorizing officer and the accounting officer referred to in the Court's 1992 Annual Report (2) persists. The Foundation expects a new computerized accounting system will in future ensure that imprest account payments are authorized by the Financial Controller before they are entered into the accounting system and that proper separation of duties will ensue. However, the new system is unlikely to be operational before the end of 1994.

Imprest Account

2.2. Payments made through the imprest account increased from 29,5 % in 1992 to 40 % (excluding salaries) in 1993. Despite the Court's previous criticism of such heavy use of the imprest system (see paragraph 2.2 of the Court's 1992 Annual Report (3)) the Financial Controller of the Commission (who has responsibility for the Foundation) has decided that the Foundation (and the Berlin Centre) should make even greater use of it by increasing the ceiling from 2 000 ECU to 10 000 ECU per transaction.

Irish Government subsidy

2.3. The third and final tranche of IRL 100 000 (124 719,23 ECU) for the financing of the new building was paid in May 1993 and has been treated in the same way as the previous two i.e. recorded net of associated expenditure in the Balance Sheet (see paragraphs 3.8 and 3.9 of the Court's 1992 Annual Report (4). Such treatment continues to breach Article 4 of the Financial Regulation which states that no revenue shall be collected unless credited to an article in the statement of revenue and expenditure.

3. BUDGETARY IMPLEMENTATION AND THE REVENUE AND EXPENDITURE ACCOUNT

Transfer of appropriations

3.1. The value of transfers of appropriations (net figures) between different budget lines (articles and items) carried out in 1993 amounted to 2 227 600 ECU or 19 % of the budget. More than 1 Mio ECU (46 %) of these transfers were made in the last quarter of 1993. For 14 budget lines showing negative transfers of 182 000 ECU at the end of the year the amounts are net and are composed of both negative and positive transfers, 622 500 ECU positive and 804 500 ECU negative: similarly for budget lines with a positive net figure of 408 800 ECU (992 300 ECU positive plus 583 500 ECU negative).

Carry-overs and cancellations of appropriations

3.2. For the budget as a whole, 73 % of payment appropriations were used, but only 54 % were used for Title 3 'operating expenditure'. The Annex shows the carry-overs from the 1993 budget by Title. Carry-overs for Title 3 amounted to 43 % of initial appropriations. For the budget line 'studies and pilot schemes relating to living and working conditions' 71 % of initial appropriations were carried over. During the last quarter of 1993 approximately 400 000 ECU was transferred to the budget line 'publication of results of studies' and committed; the total carry-over for this budget line was 460 908 ECU.

3.3. Although only 2,6 % (299 056 ECU) of the 1993 appropriations were cancelled, the high level of carry-overs (an increase from 1,9 Mio ECU (17,6 %) in 1992 to 2,8 Mio ECU (25 %) in 1993) combined with the high volume of transfers (see 3.1) raises doubts about the principle of annuality.

Revenue

3.4. The EU subsidy for the Foundation for 1993 was 11 240 000 ECU. The amounts actually requested and received were 2 Mio ECU on 19 March 1993, 2 Mio ECU on 5 July 1993 and 6 563 971 ECU on 24 September 1993 making a total of 10 563 971 ECU. The balance of 676 029 ECU represents the 1992 year end surplus. As in previous years this pattern of funding is not consistent with Article 26 of the Foundation's financial regulation which requires payment to be made 'by the fifteenth day of each quarter . . . and in accordance with actual requirements'. In the Foundation's view this pattern reflects its actual cash requirements, in which case the Financial Regulation should be amended accordingly.

4. THE BALANCE SHEET

Fixed Assets

4.1. The balance sheet entry for Furniture (1 140 884,14 ECU) is derived from the listing produced by the computerized inventory system which is independent of the accounting system. In theory this system should take into account all items declared obsolete (and therefore written off) and all disposals. An examination of Article 500, proceeds of the sale of movable and immovable property, revealed that this was not the case. The time lag between the recording of disposals in the accounts and updating the inventory is too long. Particular attention needs to be paid to reconciling the two systems at the year end. The Foundation should ensure that all disposals and obsolete items have been deducted for 1993 and should amend the balance sheet entry accordingly.

5. FINANCIAL MANAGEMENT

Scope of the audit

5.1. The audit focused on the follow up of the Court's previous Report on financial management (Report on the 1986 Accounts) and on a review of the Foundation's urban environment project, an element of which was the organization of a conference on Urban Innovations held in Seville (6 to 8 October 1993). The audit was carried out against the background of decisions by the European Council in October 1993 to establish a number of new institutions in different countries of the EU, some of whose remit - notably protection of the environment, and health and safety at work - impinge on the work hitherto carried out by the Foundation.

5.2. The Report on the 1986 Accounts made the following observations:

(a) In 1984 the European Parliament split the Foundation's operational budget 40:60 between living and working conditions. (Only in 1993 was this somewhat artificial allocation abolished by the European Parliament.)

(b) There was no clear link between the annual budget and the work programme - the latter was only costed after the budget had been set.

(c) Project monitoring and control should be improved by the introduction of a system for planning and controlling all interrelated aspects in the life of a project. Staff costs are not allocated to projects.

(d) The Foundation should explore other ways of raising revenue especially through co-financing.

The extent to which progress has been made on each of these issues is dealt with under the corresponding headings below.

The Annual Programme

5.3. The Annual Programme of work is approved by the Administrative Board in November in advance of the approval of the budget of the Foundation by the Council and the Parliament in December. The amounts finally assigned to projects each year are included in the financial estimates presented to the Administrative Board but are not published in either the Annual Work Programme or the four-year programme.

Project Management

5.4. The number of projects active at any one time continues to expand. This has increased from 21 in 1986 to 32 in 1993 whilst the number of project managers has expanded from five to nine over the same period. The Director has introduced the concept of coordinators who are research managers primus inter pares. Their precise role has not yet been defined. Changes in the nature of the project themselves and the consequent workload mean that less time is available to project managers to pay as much attention as they would like to the careful specification of project objectives and to the detailed planning and execution of the projects. There is a risk that spreading limited resources over a continually expanding area may undermine the quality and utility of the Foundation's 'research' work.

5.5. Although there is no project budget as such, a forecast is made of the costs of contracts, meetings, interpretation and translation. Each month all entries against the corresponding items are scanned and manually entered on a control form for each project. The totals for each item within the project are added to the cumulative spend and are typed onto the 'Project forecasts, orders and variances' form which is sent to the project managers. Since the costs of interpretation and translation are neither planned nor influenced by them, the project managers' monitoring role is effectively confined to expenditure under the contracts and meetings headings.

5.6. Although project managers' man-days are estimated at the planning stage, actual time spent on each project is not recorded. There is consequently no mechanism for assigning salary costs to projects. Mission costs are not allocated to projects unless they relate to temporary staff. Man-days and mission costs can be significant. For example, one project manager went to the USA for nine months in the context of a project on the elderly where the estimated mission costs alone amounted to 32 168 ECU. The cost of printing and publications is not assigned to particular projects although there is a method that would enable this to be done. The recorded cost of a project is thus far below its actual cost. In the absence of a more accurate picture of the real costs the current financial monitoring of projects is of limited value.

5.7. The project managers should be held responsible for monitoring and controlling all identifiable costs of their projects, including staff, mission and publication costs. Each coordinator should monitor performance for his unit and take corrective action as necessary. Enhanced financial data would also help when making decisions on the allocation of resources to projects. To this end there should also be lifetime monitoring of projects, rather than annual as at present, and the project/contract numbering system should not be changed every year as is currently the case. Financial data should form a part of the work programmes, i.e. the programme sheets should contain a section on financial aspects. Furthermore, the Annual Report should contain details of project costs for the year and since inception - at present only the value of contracts awarded during the year is shown.

Project Evaluation

5.8. The Foundation's project evaluation procedure was adopted by the Administrative Board in 1986. The objectives provided for in the procedure make no reference to value for money considerations and financial aspects are completely ignored.

5.9. The meetings to evaluate projects or more specifically the end products are normally held in Brussels. They are attended by representatives of all the various groups represented on the Board (directing staff, Commission, member governments, employers and employees) and by other experts as appropriate. A summary of these discussions is prepared by the research manager and is incorporated in the preface of the report. Evaluation reports are appended to the Director's quarterly progress report which is presented to the Board.

5.10. The most recent quarterly progress report at the time of audit related to the first quarter of 1993 but it did not contain any evaluation reports. Examination of an earlier evaluation report (September 1992) showed that 11 people attended the meeting held in Brussels (eight from outside Belgium). The only documented outcome of this meeting consists of two paragraphs, in which there is no reference to the cost of the project. In the view of the Court, each project should be evaluated independently taking into account the original objectives, and the results of the evaluations should be used to inform the choice of researchers contracted to work on subsequent projects.

Other sources of income

5.11. Since 1986 sales of publications have increased tenfold from 3 193 ECU to 31 886 ECU for the year 1992/93. All sales are through the Publications Office's outlets. In some cases the Foundation co-publishes with commercial publishers who pay the costs of printing, or it licenses organizations to publish at no cost to the Foundation. The Foundation estimates the value of 'savings' due to co-publishing to be 60 to 80 000 ECU per year. When the conference centre is not being used for Foundation purposes it is available for hire : income for the year amounted to some 7 500 ECU.

The Seville Conference

Background

5.12. The Foundation organized this conference in the context of its project on 'Innovations for the improvement of the urban environment' initiated in 1993. The objectives of the project are to highlight 'innovative visions, practices and actions towards urban sustainability . . . to mobilize the social partners for the achievement of the sustainable city of the 21st century'. Phase one includes an overview of innovative projects throughout the EU. The results of this overview were presented at the conference which was attended by one of the Court's staff as an observer. The Court recognizes that this was only one of several conferences organized by the Foundation outside Ireland and may not therefore be typical in every respect.

Budgeting and Cost Control

5.13. Since the Foundation allocates its budget to 'projects', there was no specific budget for the Conference. The urban innovation project of which the Conference formed a part, had an initial 1993 allocation of 150 000 ECU which was increased during the year to 179 219 ECU. The costs of the Conference are estimated by the Foundation to have amounted to 91 000 ECU. This does not include Foundation staff time, travel and subsistence costs of Foundation staff attending the Conference (7 000 ECU) and the costs of publishing the main report (20 000 ECU). A single estimate is made to cover both meeting costs and interpretation costs, even though expenditure on the latter can be significant; for this Conference it was 9 789 ECU. High costs were also incurred in the provision of meals to the participants - the subsidy per head amounted to more than 100 IRL (125 ECU). Had the conference taken place at the Foundation, the catering costs would have been about half those actually incurred. The Foundation has made an internal comparison of costs between Seville and two other conferences. This shows the travel and accommodation costs (including meals) per participant paid for by the Foundation are respectively 15 % and 37 % higher for Seville. Contrary to normal practice the standard Meeting Organization request form which requires details of estimated costs was not completed for Seville.

Subject Matter and Presentation

5.14. Young planners from each member country were selected by the research manager to prepare national reports on urban innovations. The approval of the government representatives on the Administrative Board was sought in each case.

5.15. The Foundation invited the young planners to give an oral presentation of their reports. These presentations were of variable quality, and in some cases were undesirably curtailed in order to make time available for other material of questionable relevance to the theme of the Conference such as a session dedicated to the EXPO 92 (Cartuja) project which had already been covered in sufficient detail during the opening address and was also the subject of a visit.

5.16. Although there was a General Rapporteur charged with the presentation of Conclusions and Recommendations arising from the Conference, no time was made available in the programme for consideration of the lessons to be drawn from the material presented, and the General Rapporteur's summing-up made no attempt to cover these matters. There was no evaluation at the end of the Conference of the material presented and the results. Given that the Conference absorbed more than half of the 1993 budget for the urban innovation project, it is regrettable that a more effective outcome was not achieved.

6. CONCLUSIONS

6.1. The forthcoming establishment of a number of new institutions in different parts of the EU, with remits closely related to that of the Foundation, presents a major challenge to all those concerned in the management of the Foundation. Its role and responsibilities require to be reconsidered and redefined, so as to distinguish them from those of the Commission on the one hand and those of the new institutions on the other. Only if this can be done effectively can the Foundation make its proper contribution to the work of the EU, while avoiding duplication of work with other EU institutions in the Member States.

6.2. Some progress has been made in diversifying revenue sources but the Court's 1986 criticisms of the Foundation's project monitoring system still apply. The Court looks to the Foundation to ensure on a continuing basis that the programme is managed so as to make best use of its limited resources. To assist the staff in this task, improvements should be made in the project costing and control system, including the allocation of staff and publication costs. The evaluation procedure should be reviewed. Where projects extend beyond a single year, the total costs over the whole period should be taken into consideration from the outset in order to ensure that the projects selected will make the best contribution towards the Foundation's objectives.

This report was adopted by the Court of Auditors in Luxembourg at its meeting of 24 November 1994.

For the Court of Auditors

André J. MIDDELHOEK

President

(1) Council Regulation (EEC) No 1365/75 on the creation of the Foundation OJ L 139, 30. 5. 1975 as amended by Council Regulation (EEC) No 1947/93 OJ L 181, 23. 7. 1993.

Council Regulation (EEC) No 1417/76 of 1 June 1976 on the financial provisions applying to the Foundation, OJ L 164, 24. 6. 1976 as amended by Council Regulation (EEC) No 1949/93 of 30 June 1993 OJ L 181, 23. 7. 1993.(2) Report on the accounts and management of the European Foundation for the improvement of living and working conditions (Dublin Foundation) for the financial year 1992. OJ C 28, 31. 1. 1994.

ANNEX

Dublin Foundation - Financial year 1993 - Utilization of available appropriations "(1 000 ECU) "" ID="1">1. Staff expenditure > ID="2">4 600 > ID="3">4 318 (93,9) > ID="4">140 (3) > ID="5">141 (3) > ID="6">68 > ID="7">53 (77,9) > ID="8">15 (22) "> ID="1">2. Administrative expenditure > ID="2">1 400 > ID="3">1 038 (74,1) > ID="4">341 (24) > ID="5">21 (0,7) > ID="6">331 > ID="7">293 (88,5) > ID="8">37 (11,2) "> ID="1">3. Operational (1) expenditure > ID="2">5 500 > ID="3">2 989 (54,3) > ID="4">2 374 (43,2) > ID="5">136 (2,5) > ID="6">1 502 > ID="7">1 351 (89,9) > ID="8">151 (10,1) "> ID="1">Total > ID="2">11 500 > ID="3">8 345 (72,6) > ID="4">2 855 (24,8) > ID="5">299 (2,6) > ID="6">1 901 > ID="7">1 697 (89,3) > ID="8">203 (10,7) "">

(1) The distinction between living and working conditions is no longer made: there is a single Chapter where previously there were two.

COMMENTS OF THE FOUNDATION ON THE DRAFT REPORT OF THE COURT OF AUDITORS ON THE 1993 ACCOUNTS

Separation of duties Item 2.1 The Foundation notes that the Court points out that the complete separation of duties is dependant on the installation of a new computerized accounting system, the design of which is still under examination by the Commission.

Imprest Account Item 2.2 With regard to the limit of 10 000 ECU per transaction it should be noted that the Foundation's Imprest Account is subject to one overall limit of 900 000 IRL.

Irish Government subsidy Item 2.3 As explained to the Court in previous replies relating to the financing of the new building, the practice followed by the Foundation was orally recommended by the Commission and was similar to that followed on two separate occasions by CEDEFOP in Berlin when the Berlin Senate made its contribution to CEDEFOP buildings.

Carry-overs and cancellations of appropriations Items 3.2 and 3.3 (a) The budget line 'studies and pilot schemes relating to living and working conditions' relates primarily to study contracts initiated as part of the current year's work programme for delivery over the following period of some 12 months. For these a first payment of 30 % is made when the contract is signed; the Foundation is however committed to the whole amount. The automatic carry-over to the following year, is in full accordance with Article 6 1 (d) of the Financial Regulation.

(b) The transfer and commitments re. the budget line 'publication of results of studies' were made in order to optimize the efficient use of finance available, in accordance with the provisions of the financial regulations; the funds were mainly used for tasks performed by the Office of Publications on behalf of the Foundation for delivery of the results of the current year's work programme as they become available to plan.

(c) Strict observance of annuality is followed by the Foundation in the context of the Council Regulation establishing the Foundation which requires that estimates for the following year be adopted by 31 March of the previous year and that the first outline of the Work Programme is drawn up by 1 July of the previous year. The Board adopts the programme at end November, two to three weeks before the subsidy by the Budgetary Authority is fixed. For over 10 years, now the percentage of carry-overs utilized has always been in the region of 90 %.

Revenue Item 3.4 The Foundation has again brought to the Commission's attention the matter of the incorrect timing of subsidy payments. It is understood that measures are now being taken to resolve this problem.

Fixed Assets Item 4.1 The two systems were fully reconciled at the year end. Steps have been taken to reduce the time required to record disposals in the inventory system. Year end balance sheet entries for inventories will consequently reflect disposals which took place during the financial year.

Scope of the audit Item 5.1 (a) It is noted that apart from the follow up to its report on the 1986 accounts, the Court focussed its audit on one event (the Seville Conference) which, as explained to the Court, for several reasons, was particularly atypical in the Foundation's activities. The conference was innovative and exploratory, bringing together young planners, experienced experts and policy-makers. It formed part of a continuing programme which has been further taken forward in 1994, building on the lessons drawn from Seville and previous conferences. The programme is only one of several addressing urban issues.

(b) The Court refers to the decisions by the European Council of 29 October 1993 to establish new agencies. The Foundation's programme was formulated with the knowledge of developments regarding these agencies and in consultation with relevant Commission representatives and others in order to ensure complementarity of Foundation work with the activities of the agencies as they become defined.

The Annual Programme Item 5.3 The financial estimates approved by the Administrative Board and submitted to the Budgetary Authorities are supported by details of the annual finance required for the Foundation to advance each activity in line with its four-year programme. These estimates are adjusted when the final decisions of the Budgetary Authority are known; the budget of the Foundations is published in the Official Journal.

Project Management Item 5.4 The establishment of group coordinators was seen as a necessary and natural evolution of a growing Research Section facing increasing demands for advice and information and with a need to integrate into the organization, Detached National Experts, stagiaires and other temporarily employed staff.

The agreed objectives of the new groups were to provide a structure by which common interests could be identified in developing the Foundation's Work Programme; requirements for support staff could be determined; representation of each group and their different interests at meetings could be realized in an efficient way; other functions in the Foundation could identify and develop efficient links with the Research group.

The coordinator's role was clearly defined at the outset as being:

- to facilitate the working of the group as a team,

- to represent the group at management meetings,

- to manage the secretarial resources of the group.

It is the view of the Foundation that the new structure ensures greater quality and utility in Foundation work in response to changes in demands on the Foundation since 1986.

Items 5.5, 5.6 and 5.7 (i) The Foundation introduced in 1993 a new forecast and project monitoring system and appointed a staff member to develop and implement it, reporting to the Deputy Director who is responsible for monitoring and controlling the cost of the Work Programme against budget, including translation and all other costs. Individual projects are monitored by project managers and reported on a monthly basis. This division of responsibility reflects the nature of the Foundation's activities. The Foundation's management is satisfied that the approach gives a good overview of the financial aspects of the implementation of the work programme and that sufficient information is available to ensure regular and thorough monitoring of costs. The systems supporting this approach are being continually refined.

(ii) Man-days are estimated in project sheets in a proportionate way as a control mechanism for the programme managers in planning the distribution of their annual workload. For this purpose, the system works well. However, the research managers activities are not confined to project management. The principle tasks of the Foundation are to provide information and advice to the Community institutions on foreseeable objectives and guidelines by forwarding in particular scientific information and technical data. Satisfying requests for each information may require project managers to draw on several projects, past work or relate to sources outside the Foundation. This means that recording only time on current projects would be inappropriate. The Foundation will consider whether some other form of time recording would assist the management of Foundation work.

(iii) The same mission may involve a programme manager in conferences, dissemination, administrative work as well as contract work: to assign mission costs to projects would be artificial. Thus the series of missions to the USA referred to by the Court had an important staff training dimension; concerned four, then current, projects in the Foundation's programme; was an important element in the definition of the future programme and involved establishing contact with a range of experts who subsequently contributed at no additional cost, to the work of the Foundation.

(iv) The cost of publication will in the future be recorded in the cost of projects. Life-time monitoring of projects will become possible as the Foundation has now adopted an invariable project numbering system. However, depending on the complexity of the issues, projects over a long period of time may not be discrete (they may be merged or divided). For this reason the Court's suggestion regarding the annual report does not seem appropriate.

Project Evaluation Items 5.8, 5.9 and 5.10 (i) In the light of the Court's comments the Director will invite the Administrative Board to indicate what financial information might be useful for its consideration in the different evaluation procedures. The evaluation procedure described by the Court is that for evaluation of consolidated reports; it is not a 'project evaluation' procedure.

(ii) The format of the reports from these meetings evaluating consolidated reports was redefined at the end of 1992 (the report of September 1992 predated this). The main outcome of the meetings is obviously the decision to publish the report being evaluated, it having been agreed or amended. The Court might note that in advance of evaluation of the consolidated report by the Board, all reports relating to study contracts are assessed by the research managers, a written assessment prepared (including reference to financial considerations where necessary) and accepted by the Directorate before final payment. The results of these evaluation processes provides a basic source of information for selecting contractors for subsequent work.

Other sources of income Item 5.12 The Foundation started in 1993 a scheme for detached national experts to work at the Foundation. The first started in September 1993 and three more started in 1994. Their salaries have been paid by their employer of origin, offsetting costs which may otherwise be incurred by contracting work out.

The Seville Conference Budgeting and cost control Item 5.13 (i) The general approach to expenditure control and the revision of estimates within the overall budget totals is described above under project management (5.5 to 5.7).

(ii) The Foundation decides on the venues for its meetings, to achieve the most economic solution, while allowing for other considerations and benefits, e.g. the opportunity to more widely disseminate Foundation work in the Member States. This latter consideration may involve a balancing of costs.

(iii) The Foundation recognizes that in Seville the costs of meals were above average, they resulted from urgent decisions which had to be taken following organizational problems with local authorities. It was only in these exceptional circumstances that they were authorized. Against this, at no cost to the Foundation, the city offered the two first venues for the meeting and the Employers' Association the third venue and provided other facilities.

(iv) The Foundation is conscious of different costs for different venues for its meetings. Based on analysis of more than 600 participants, the average costs per participant in a meeting (usually two days duration and including travel, daily allowance, meals, interpretation and other miscellaneous expenditure) is 650 ECU in Brussels (and other central locations), 850 ECU in Dublin and 1 000 ECU in other peripheral locations. In the event, the actual cost of the three-day conference for 80 participants in Seville: 76 215 ECU compared with the cost of a two-day conference, also for 80 participants, which took place in Dublin: 66 965 ECU. This is well in line with the above-mentioned averages.

Subject Matter and Presentation Item 5.15 The principal purposes of this Conference were to provide for an exchange of knowledge among the young planners, other experts in the field and those responsible for policy; to help the young planners learn from the experience and put their contribution in context; and assist the Foundation with development of its programme.

Item 5.16 The General Rapporteur, at the end of the conference, sought to pull together the most immediate relevant messages from the dense sessions of the conference. As had been planned, the research manager afterwards had extensive discussions with key participants in order to ensure that the lessons were fully digested and reflected in the final proceedings which have since been published.

The project on 'Innovations in the urban environment' did not end with the Seville Conference. On the contrary, the main and most effective outcome of the conference is reflected in the development of the project within the 1994 Work Programme of the Foundation.

Conclusions Item 6.1 (i) The aims and tasks of the Foundation are set out in Council Regulation (EEC) No 1365/75 of May 1975. These have not been altered in the course of the establishment of new agencies and other organizations of the European Union, the aims and responsibilities of which are distinct from those of the Foundation.

(ii) Complementarity of Foundation work to that of the Commission is assured by representation of Commission officials from DGs V, XI and XII on the Foundation's Board, by detailed discussion of the programme annually between senior staff of the Fundation and the responsible Directors in the Commission and by mutual involvement of each in the project steering and advisory bodies of the other. (All advisory groups covering Foundation programmes provide for representation from the Commission. Conversely Foundation staff are on some 12 or more Commission working groups.)

(iii) The Foundation is confident that complementarity of its work with the new agencies can be achieved, at it has since its inception with CEDEFOP. Specifically, several provisions for close links with the Foundation are made in the regulation for the new European Agency for Health and Safety at Work. Prior to the agency becoming operational, the Foundation has maintained regular contact with the relevant units in DG V. The Foundation was requested by the European Parliament in 1993 (and again in 1994) to carry out preliminary studies in advance of the establishment of this Agency. There is agreement between the appropriate Directorate of DG V and the Foundation on proposals to be put to the two Boards for how these and related activities might be transferred to the new agency.

(iv) The Foundation has had continuing discussions with the task force group concerned with the new Environment Agency regarding the likely relationship between the Foundation's programme and that of the agency. The Foundation's work being of a socio-economic nature, is clearly distinct from the main thrust of the Agency's work.

(v) More generally, the Board of the Foundation, in November 1993, agreed to examine the Foundation's tasks in the light of: the conclusions of the meeting of the Council of Ministers of October 1993; the Green Paper on the future of European Social Policy, the responses to the questions it raised and the conclusions of the resultant White Paper 'European Social Policy: a way forward for the Union'; the establishment of new agencies; enlargement of the European Union; and other new demands on the Foundation. The 1995 Work Programme will take account of these considerations.

Item 6.2 The Foundation has been actively developing its financial planning, budgeting, monitoring and control procedures in recent years in response to its rapidly growing operations and in the light of previous proposals of the Court. It is clear that over this period the growth in output has far exceeded the increase in resources. It will continue to develop its procedures. The Court refers in its report to the evaluation procedure for consolidated reports. It should be noted that the Foundation has a number of different evaluative processes, which are being constantly reviewed and refined. The Foundation, in preparing its annual programmes, already estimates the costs of projects for future years within the frame of the Four-Year Programme. The Foundation would welcome discussion with the Court as to what further practical steps could be taken to improve efficiency within the resources available.