EN Official Journal of the European Union C 324/53

REPORT

on the annual accounts of the European Centre for the Development of Vocational Training for the 2003 financial year together with the Centre's replies

(2004/C 324/08)

CONTENTS

1 INTRODUCTION

2-5 THE COURT'S OPINION

6-12 OBSERVATIONS

Tables 1 to 4

The Centre's replies

INTRODUCTION

1. The European Centre for the Development of Vocational Training (the Centre) was established by Council Regulation (EEC) No 337/75 (1). Its core mandate is to serve the development of vocational training at Community level. In order to achieve this objective, it has the task of compiling and disseminating documentation on vocational training systems. The Centre's powers and activities are summarised, on the basis of information submitted by the Centre, in Table 1.

THE COURT'S OPINION

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

3. The Court has examined the Centre's annual accounts for the financial year ended 31 December 2003. In accordance with Article 12a(1) of Council Regulation (EEC) No 337/75, the Centre’s budget was implemented on the responsibility of its Director. This responsibility includes the drawing-up and presentation of the accounts (3), in accordance with the internal financial provisions provided for in Article 12 of the same Regulation. The Court of Auditors is required under Article 248 of the Treaty establishing the European Community to audit those accounts.

4. The Court performed its audit in accordance with its auditing policies and standards, which have been adapted from generally accepted international auditing standards to reflect the specific nature of the Community context. It examined the accounting documents and applied the audit procedures that it considered necessary in that context.

5. The Court has thus obtained reasonable assurance that the annual accounts for the financial year ended 31 December 2003 are reliable and that the underlying transactions, taken as a whole, are legal and regular. The content of the following observations does not call the audit opinion expressed by the Court in this report into question.

OBSERVATIONS

6. The implementation of the appropriations for the financial year 2003, and of the appropriations carried over from the previous year, is set out in Table 2. The Centre's revenue and expenditure account and balance sheet for the 2003 financial year are presented in summary form in Tables 3 and 4.

7. In 2003 the Centre received Phare subsidies and contributions from third countries (4) amounting to 791 844 euro. Contrary to the principles of budgetary unity and accuracy, the Centre did not use an amending budget to include the amount of these 2003 subsidies in its budget.

8. The Centre's new financial regulation and the detailed rules for its implementation were adopted by the Management Board on 31 March 2003. These rules (5) specify that a new internal audit system is to be set up. Changes to the Centre's financial organisation and its accounting system were not yet complete at the end of the year.

9. In accordance with Article 28(2)(e) of the Centre's financial regulation, the accounting officer is to validate the systems laid down by the authorising officer to supply or justify accounting information. There has been no such validation.

10. The Centre has set up a ‘contracts unit’ to ensure that contracts to be awarded for studies are correct, but this unit is not informed about the procedures that are under way until the selection reports have been signed. It is unable to do anything to prevent irregularities at the initial stages (choice of procedure, examination of invitations to tender and publicity measures). Extending this unit's powers appears especially necessary insofar as a study of various files has brought to light inconsistencies and formal errors in the management of contract award procedures.

11. In 2003 the Centre had a list of potential contractors following a call for expressions of interest (CEI) which was issued in 2000. This list was drawn up and centralised under the authority of the permanent Chairman of the Evaluation Boards. By means of this list, the Centre was able to launch a restricted procedure among the potential contractors on the list, without the need to publish or declare selection criteria, up to a maximum value of around 163 000 euro (6). Five files on restricted procedures using CEIs were examined. In three cases (total contract value: 79 800 euro) giving rise to payments in 2003, the successful contractors did not appear on this list and no explanation was given for this situation. In view of this finding, the relevance of the existence of such a list of contractors could be called into question. The Court notes, moreover, that as the list has not been updated, the Centre gives a somewhat inconsistent picture of its selection procedures.

12. On examination, recruitment files and a number of individual files were found to have formal and documentary shortcomings which prevented the necessary transparency with regard to the decisions taken on recruitment and the financial impact of those decisions when calculating pay.

This Report was adopted by the Court of Auditors in Luxembourg at its meeting of 29 and 30 September 2004. For the Court of Auditors Juan Manuel FABRA VALLÉS President

(1) OJ L 39, 13.2.1975, p. 1.

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

(3) As required under Article 63 of the Centre's financial regulation, the final accounts for the financial year 2003 were drawn up on 1 September 2004 and forwarded to the Court of Auditors. They were received by the Court on 17 September 2004. A summarised version of these accounts is presented in the tables annexed to this report.

(4) Participation by Norway.

(5) Article 25 of the Centre's new financial regulation.

(6) See Article 128(1) of the Regulation laying down detailed rules for the implementation of the financial regulation.

Table 1 European Centre for the Development of Vocational Training (Thessaloniki) Areas of Community competence deriving from the Treaty Competence of the Centre as specified in Articles 2 and 3 of Council Regulation (EEC) No 337/75 of 10 February 1975 Governance Resources available to the Centre (2002 data) Products and services supplied in 2003 The Community implements a vocational training policy to support and supplement the action of the Member States Action aims to: stimulate cooperation on training between educational or training establishments and firms, develop exchanges of information and experience on issues common to the training systems of the Member States (From Article 150 of the Treaty) The Centre's mandate To assist the Commission in encouraging, at Community level, the promotion and development of vocational training and of in-service training and to contribute to the implementation of a common vocational training policy. Tasks — To compile selected documentation — to contribute to research — to disseminate information — to encourage and support any initiative likely to facilitate a concerted approach; — to provide a forum for all those concerned. 1. Management Board Per Member State: — one Government representative — one representative of employers' organisations — one representative of employees' organisations — three members representing the Commission 2. Director Appointed by the Commission from a list of candidates submitted by the Management Board; carries out the decisions of the Management Board and is responsible for the day-to-day administration of the Centre 3. External audit The European Court of Auditors 4. Discharge Parliament, on the Council's recommendation Final budget 14,7 (14,2) million euro. Community contribution: 98,6 % (96,5 %) Staff numbers at 31 December 2003 Number of posts in establishment plan: 83 (83) Posts occupied: 77+2 (79) +46 (32) other staff (auxiliary contracts, seconded national experts, local employees, temporary replacements) Total staff: 125 (111) Assigned to the following duties: operational: 66 (59) administrative: 38 (33) mixed: 21 (19) Conferences and seminars: 72 Studies: 65 Projects: 23 Participation in: Copenhagen Process e-Learning Programme, Leonardo da Vinci programme, social partners' joint action framework Publications: 68 publications, Cedefop Info, electronic newsletter Circulation of documents: 10 244 on request, 2 346 electronic newsletter subscriptions, 8 523 subscriptions to Cedefop Info Maintenance and development of the Electronic Training Village Participants in the study visits programme: 773 Source:information supplied by the Centre.

Table 2 European Centre for the Development of Vocational Training — Implementation of the budget for the 2003 financial year (million euro) Revenue Expenditure Origin of revenue Revenue entered in the final budget for the financial year Revenue collected Allocation of expenditure Appropriations in the final budget Appropriations carried over from the previous financial year Appropriations available (2003 budget and financial year 2002) entered committed paid carried over cancelled initial paid to be carried over cancelled appropriations committed paid carried over cancelled Community subsidies 14,5 14,5 Title I Staff 8,0 8,0 7,6 0,4 0,0 0,3 0,3 0,0 0,0 8,3 8,3 7,8 0,4 0,1 Financial and other revenue 0,2 0,0 Title II Administration 1,2 1,1 0,8 0,4 0,0 0,3 0,3 0,0 0,0 1,5 1,5 1,1 0,4 0,0 Subsidy from non-Member States p.m. (1) 0,2 Title III Operating activities 5,5 5,5 2,4 3,1 0,0 2,2 1,8 0,0 0,3 7,7 7,7 4,2 3,1 0,3 PHARE assigned revenue (2) 0,6 Assigned revenue PHARE and non-Member States (2) 0,8 0,5 0,2 0,0 0,2 0,1 0,1 0,0 0,2 1,0 0,6 0,4 0,0 Total 14,7 15,3 Total 14,7 15,4 11,3 4,2 0,0 3,1 2,5 0,1 0,4 17,8 18,5 13,8 4,3 0,4 NB:The totals may contain differences due to the effects of rounding. Source:information supplied by the Centre. This table summarises the data provided by the Centre in its own accounts.

Table 3 European Centre for the Development of Vocational Training — Revenue and expenditure account for the financial years 2003 and 2002 (1000 euro) 2003 2002 Revenue Commission subsidies 14 500 12 135 Revenue from previous financial years 0 25 Miscellaneous revenue 3 3 Assigned revenue (Phare and third countries) 792 333 Financial revenue 0 50 Total revenue (a) 15 295 12 546 Budgetary expenditure for the financial year Staff — Title I of the budget Payments 7 554 7 570 Appropriations carried over 443 298 Administration — Title II of the budget Payments 778 767 Appropriations carried over 358 345 Operating activities — Title III of the budget (except for assigned revenue) Payments 2 381 2 491 Appropriations carried over 3 138 2 189 Assigned revenue (Phare and third countries) Payments 546 0 Appropriations carried over 246 187 Total expenditure (b) 15 444 13 847 Outturn for the financial year (a – b) – 149 –1 301 Balance carried over from the previous financial year – 545 532 Appropriations carried over and cancelled 399 215 Sums for reuse from the previous financial year not used 10 8 Refunds to the Commission – 716 0 Exchange-rate differences 8 1 Balance for the financial year – 993 – 545 Source:information supplied by the Centre. This table summarises the data provided by the Centre in its own accounts.

Table 4 European Centre for the Development of Vocational Training — Balance sheet at 31 December 2003 and 31 December 2002 (1000 euro) Assets 2003 2002 Liabilities 2003 2002 Fixed assets (3) Fixed capital Intangible fixed assets 14 0 Own capital 5 704 6 007 Buildings 5 179 5 351 Balance for the financial year – 993 – 545 Equipment and furniture 471 616 Subtotal 4 711 5 462 Financial fixed assets, guarantee 5 5 Long-term liabilities Subtotal 5 669 5 972 Liabilities on assigned revenue 0 277 Stocks Subtotal 0 277 Office equipment 35 35 Current liabilities Subtotal 35 35 Liabilities on assigned revenue not received 315 661 Long-term assets Appropriations carried over against Titles I, II and III 3 939 2 832 Staff loans 3 9 Appropriations carried over against assigned revenue 382 238 Commission subsidy 0 277 Recoverable amounts 0 1 615 Subtotal 3 286 Sundry accounts payable 86 121 Current assets VAT/other taxes 90 73 Commission 315 2 276 Bank interest to be returned to the EU 64 0 Other advances 37 94 Subtotal 4 876 5 540 Recoverable VAT 34 23 Suspense accounts Sundry accounts receivable 81 124 Current payments 0 226 Subtotal 467 2 517 Sums to be reused 157 229 Cash accounts Subtotal 157 455 Bank accounts (4) 3 532 2 830 Cash 5 4 Imprest account 33 90 Subtotal 3 570 2 924 Total 9 744 11 734 Total 9 744 11 734 Source:information supplied by the Centre. This table summarises the data provided by the Centre in its own accounts. (1) p.m.: token entry (2) Phare assigned revenue was not entered in the Centre's initial budget and did not give rise to an amending budget (see paragraph 7 of the report). NB:The totals may contain differences due to the effects of rounding. Source:information supplied by the Centre. This table summarises the data provided by the Centre in its own accounts. (3) Fixed assets are shown net. The figures for 2002 have therefore been recalculated for purposes of comparison. (4) The substantial volume of funds in bank accounts at the end of the financial year is due to the payments made by the Commission to finance transactions for which the appropriations were carried over to the following financial year. Source:information supplied by the Centre. This table summarises the data provided by the Centre in its own accounts.