Opinion No 10/2002

on a Commission proposal for amendment of the constituent acts of Community Bodies following the adoption of the New Financial Regulation

(pursuant to the second subparagraph of Article 248(4) of the EC Treaty)

(2002/C 285/02)

THE COURT OF AUDITORS OF THE EUROPEAN COMMUNITIES

Having regard to the Treaty establishing the European Community, and in particular, the second subparagraph of Article 248(4), thereof,

Having regard to a request by the European Commission, of 18 July 2002, for an opinion of the Court on a proposal for amendment of the constituent acts of Community Bodies (document COM(2002)406 final),

HAS ADOPTED THE FOLLOWING OPINION:

1. The proposal covers the following areas with regard to the bodies referred to in Article 185(1) of the new Financial Regulation applicable to the general budget of the European Communities(1) (hereinafter called The EC Financial Regulation):

- appointment and renewal of the mandate of the Director of the body,

- internal audit,

- procedure for adopting the financial rules of the body,

- preparation and adoption of the budget and of the establishment plan,

- submission of the annual accounts and the discharge procedure,

- adoption of annual report on the activities of the body,

- application of Regulation No 1049/2001 to documents of the bodies.

2. The provisions for the nomination of a director of the body allow in particular the possibility of renewing his mandate in a procedure not open to other candidates. It is provided that such a prolongation of mandate can only be proposed by the Commission and that it is the administrative board of the body which will take the final decision. In the Court's opinion, such a procedure would lead to increased dependency of the director of the body on those in the Commission responsible for proposing the prolongation of his mandate.

3. As far as internal audit is concerned the relevant provision repeats literally the provision laid down in Article 185(3) of the EC Financial Regulation. The Court sees no reason to repeat a provision which is already laid down in a legislative text having the same legal value.

4. The proposal does not provide for consultation of the Court of Auditors before adopting or modifying the financial regulation of the bodies. In the future only the Commission will be consulted. In the explanatory memorandum the following justification is given by the Commission: "Competence for the adoption of each Agency's individual Financial Regulation will rest with the respective body's management board or equivalent (after the Commission has been consulted). This will harmonise the individual procedures considerably. Currently, responsibility for adopting each body's Financial Regulation rests either with the Council or with the management board or equivalent, with or without the involvement of the Commission and the Court of Auditors in the process. These disparities are simply historical accidents in the development of the agencies, and are not objectively justified". This explanation is incorrect as far as the role of the Court is concerned. Currently all the founding acts of the Community bodies require the Court's opinion before the adoption of their financial regulation(2).

The Court regrets that the proposal gives little importance to the financial regulation of Community bodies by depriving them of the consultative service of the Court. In the opinion of the Court, the Commission given the nature of its function does not have the role of being the financial conscience of the Communities and of ensuring the respect of the principles of budgetary law and public accounting as far as the financial rules of the Community bodies are concerned.

5. As far as the preparation of the budget is concerned it is foreseen that:

- the Administrative Board shall, by 15 February, prepare an estimate of revenue and expenditure on a proposal of a draft drawn by the Director,

- the Administrative Board shall by 31 March, transmit this estimate together with a draft establishment plan to the European Commission,

- these statements shall be transmitted by the Commission to the European Parliament and to the Council and the budget authority decides on the subsidy and the establishment plan,

- the Administrative Board shall adopt the definitive budget of the body before the beginning of the budget year.

The Court has no comment on this matter.

6. With regard to the submission of the accounts and the discharge procedure the proposal provides as follows:

- by 1 March, following each financial year, the accounting officer of the body sends the provisional accounts to the Commission's accounting officer together with a report on the budgetary and financial management of the year,

- by 31 March the Commission's accounting officer transmits the body's provisional accounts together with the report on budgetary and financial management to the Court of Auditors. The report on budgetary and financial management is also sent to the Council and to the Parliament,

- the Director draws up the final accounts after having received the Court of Auditors' observations on the provisional accounts pursuant to Article 129 of the EC Financial Regulation,

- the Administrative Board of the body delivers an opinion on these final accounts,

- by 1 July the Director transmits the final accounts to the European Parliament, to the Council, to the Commission and to the Court of Auditors together with the opinion of the Administrative Board,

- by 30 September the Director sends the Court of Auditors a reply to the observations of the Court. He also sends this reply to the Administrative Board,

- the European Parliament, on a recommendation from the Council acting by a qualified majority, shall, before 30 April of year N + 2, give a discharge to the Director in respect of the implementation of the budget for year N.

As far as the provisional accounts are concerned, these provisions make explicit what is already provided for in the EC Financial Regulation. Nevertheless, the Court takes the opportunity to recall its doctrine on the subject as pointed out in its Opinion No 2/2001(3): "The provisional financial statements are exhaustive and consistent documents, and are duly drafted by the stipulated deadlines. They are provisional only in that the Commission has not yet formally adopted them and that they may, where appropriate, be subject to corrections proposed by the Court. However, the Court's task cannot under any circumstances involve helping the Commission to draft the final consolidated financial statements. This responsibility, of an administrative and accounting nature, lies solely with the Commission and is incompatible with the Court's external control responsibility."

7. As far as the annual activity reports of the Community bodies are concerned, the Court finds it astonishing that the deadline for delivering these reports is set on 15 June of the year N + 1. Such a delay of almost six months following the end of the year in question is too long. As a consequence, the Court will not be able to take into account these annual activity reports as the Court is required to transmit its observations concerning the accounts and the management of Community bodies by 15 June at the latest.

8. The Court recalls that the Commission, in its proposal for a Commission Regulation on the Framework Financial Regulation for the bodies referred to in Article 185 of the EC Financial Regulation, has proposed a provision(4) for suspending the Director from his duties as authorising officer. The Court agrees that such a procedure should be established as a safeguard mechanism. However, it is difficult to imagine a situation where the Director is suspended from his duties as authorising officer while continuing to assume his other tasks as Director of the Community body.

The Court suggests therefore that a provision concerning a possible suspension of the Director be inserted in the constituent acts of Community Bodies rather than in the Framework Financial Regulation. Such a provision could read as follows: "In order to avoid serious consequences for the interests of the Community body, the management board may decide to suspend the Director from his duties. It shall appoint a provisional Director who shall remain in office until the board has taken a final decision."

This Opinion was adopted by the Court of Auditors in Luxembourg at its meeting of 25 and 26 September 2002.

For the Court of Auditors

Juan Manuel Fabra Vallés

President

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

(2) Article 12(1) of Regulation (EEC) No. 337/75 of 10 February 1975 (The European Centre for the Development of Vocational Training, Thessaloniki).

Article 16 of Regulation (EEC) No 1365/75 of 26 May 1975 (The European Foundation for the Improvement of Living and Working Conditions, Dublin).

Article 14 of Regulation (EEC) No 1210/90 of 7 May 1990 (The European Environment Agency, Copenhagen).

Article 12 of Regulation (EEC) No 1360/90 of 7 May 1990 (The European Training Foundation, Turin).

Article 11(12) of Regulation (EEC) No 302/93 of 8 February 1993 (The European Monitoring Centre for Drugs and Drug Addiction, Lisbon).

Article 57(11) of Regulation (EEC) No 2309/93 of 22 July 1993 (The European Agency for the Evaluation of Medicinal Products, London).

Article 15 of Regulation (EC) No 2062/94 of 18 July 1994 (The European Agency for Safety and Health at Work, Bilbao).

Article 15 of Regulation (EC) No 2965/94 of 28 November 1994 (The Translation Centre for the Bodies of the EU, Luxembourg).

Article 12(12) of Regulation (EC) No 1035/97 of 2 June 1997 (The European Monitoring Centre on Racism and Xenophobia, Vienna).

Article 9 of Regulation (EC) No 2667/2000 of 5 December 2000 (The European Agency for Reconstruction, Thessaloniki).

Article 25(9) of Regulation 178/2002 of 28 January 2002 (The European Food Safety Authority).

Article 52 of Regulation (EC) No 1592/2002 of 15 July 2002 (The European Aviation Safety Authority).

Article 21 of Regulation (EC) No 1406/2002 of 27. June 2002 (The European Maritime Safety Agency).

Article 37 of Council Decision (2002/187/JHA) of 28 February 2002 (Eurojust).

Article 138 of Regulation (EC No 40/94 of 20 December 1993 (The Office for Harmonization in the Internal Market, Alicante).

Article 112 of Regulation (EC) No 2100/94 of 27 July 1994 (The Community Plant Variety Office, Angers).

(3) OJ C 162, 5.6.2001, p. 1, comments on Article 118.

(4) Article 46 of SEC (2002) 836 final of 17 July 2002.