EN Official Journal of the European Union C 388/142

REPORT

on the annual accounts of the Europol Pension Fund for the financial year 2011, together with the Fund’s replies

2012/C 388/24

INTRODUCTION

1. The Europol Pension Fund (hereinafter "the Fund"), which is located in The Hague, was established by Article 37, Appendix 6, of the former Staff Regulations of the European Police Office, The Hague (Europol). Rules on the implementation of the Fund were established by Council Act of 12 March 1999 (1) and amended by Council Decision of 28 June 2011 (2). The objective of the Fund is to finance and pay pensions for staff already employed by Europol before it became an EU Agency on 1 January 2010.

INFORMATION IN SUPPORT OF THE STATEMENT OF ASSURANCE

2. The audit approach taken by the Court comprises analytical audit procedures, direct testing of transactions and an assessment of the Fund’s internal controls. This is supplemented by evidence provided by the work of other auditors (where relevant) and an analysis of management representations.

STATEMENT OF ASSURANCE

3. Pursuant to the provisions of Article 287 of the Treaty on the Functioning of the European Union and Article10(4) of the Council’s Decision of 28 June 2011 the Court has audited the annual accounts of the Fund (3) and the legality and regularity of the transactions underlying those accounts.

The Management’s responsibility

4. The Director of Europol and the Fund’s Management Board have joint responsibility for the management of the Fund and for putting in place the relevant organisational structure, internal management and control systems and procedures for drawing up the final accounts. The Fund’s Management Board has sole responsibility for the preparation of the final accounts and for making sure that these are free from material misstatement, whether due to fraud or error and for ensuring that the transactions underlying those accounts are legal and regular.

The Auditor’s responsibility

5. The Court’s responsibility is to provide, on the basis of its audit, the European Parliament and the Council (4) with a statement of assurance as to the reliability of the annual accounts of the Fund and the legality and regularity of the transactions underlying them.

6. The Court conducted its audit in accordance with the IFAC International Standards on Auditing and Codes of Ethics and the INTOSAI International Standards of Supreme Audit Institutions. These standards require that the Court plans and performs the audit to obtain reasonable assurance as to whether the annual accounts of the Fund are free of material misstatement and the transactions underlying them are legal and regular.

7. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the accounts and the legality and regularity of the transactions underlying them. The procedures are selected based on the auditor’s judgment, including an assessment of the risks of material misstatement of the accounts and of material non-compliance of the underlying transactions with the requirement of the legal framework of the Fund, whether due to fraud or error. In assessing those risks, the auditor considers internal controls relevant to the preparation and fair presentation of the accounts and supervisory and control systems implemented to ensure legality and regularity of underlying transactions, in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and reasonableness of accounting estimates made, as well as evaluating the overall presentation of the accounts.

8. The Court considers 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

9. In the Court’s opinion, the Fund’s Annual Accounts (5) present fairly, in all material respects, its financial position as of 31 December 2011 and the results of its operations and its cash flows for the year then ended, in accordance with the provisions of the Council Act of 12 March 1999 as amended by Council Decision 28 June 2011 and Directive 610 of the Dutch financial reporting rules and the International Financial Reporting Standards (IFRS).

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

10. In the Court’s opinion, the transactions underlying the annual accounts of the Fund for the financial year ended 31 December 2011 are legal and regular in all material respects.

Emphasis of Matter

11. The Court draws attention to Note 2.6 to the Fund’s Annual Report 2011. The Fund’s Management Board prepared the accounts on a going concern basis. However, by 1 July 2015 there will be no active participants. A high number of pension right transfers and severance grant payments are expected in the near future, substantially reducing the Fund’s activities, assets and pension liabilities. The Fund’s Board and Europol’s Management Board are currently assessing options for the future of the Fund, one of which is liquidation shortly after 1 July 2015.

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

OTHER COMMENTS

13. The Court noted shortfalls in the procedure offered by Europol to its staff to exit the fund. When the Office became a full European Agency in 2010, it asked its staff no longer contributing to the fund (6) to exit from the Fund by either receiving a severance grant (SG) or by transfering the accumulated pension rights (TPR) to alternative pension schemes (e.g. PMO, national pension schemes, private companies). However no deadline was set for staff to take the decision.

14. At year end the Fund had net financial assets of 16 million euro, of which of 15,98 million euro was held in one bank.

15. The Management Board has not yet prepared procedures for the annual verification of pensioners’ entitlements, including proof that the pensioners are still alive. In 2011, the six people benefiting from pensions at that time were requested to provide a confirmation of their place of residence, only one replied.

This report was adopted by Chamber IV, headed by Mr. Louis GALEA, Member of the Court of Auditors, in Luxembourg at its meeting of 5 September 2012. For the Court of Auditors Vítor Manuel da SILVA CALDEIRA President

(1) Document 5397/99 on the Council’s public register: http://register.consilium.europa.eu/).

(2) OJ L 179, 7.7.2011, p. 5.

(3) The accounts comprise the balance sheet, the statement of income and expenses, the cash flow statement and the explanatory notes.

(4) Article 185(2) of Council Regulation (EC, Euratom) No 1605/2002 (OJ L 248, 16.9.2002, p. 1).

(5) The Final Annual Accounts were drawn up on 10 July 2012 and received by the Court on 12 July 2012.

(6) Now covered by the EU Staff Regulation.