EN Official Journal of the European Union C 332/1

REPORT

on the annual accounts of the European Aviation Safety Agency for the financial year 2004 together with the Agency's replies

(2005/C 332/01)

CONTENTS

1-2 INTRODUCTION

3-6 THE COURT'S OPINION

7-11 OBSERVATIONS

Tables 1 to 4

The Agency's replies

INTRODUCTION

1. The European Aviation Safety Agency (hereinafter called the Agency) was established by Regulation (EC) No 1592/2002 of the European Parliament and of the Council of 15 July 2002 (1). The financial year 2004 was the second in which the Agency actually carried out its operating activities. The Agency's tasks are to maintain a high level of civil aviation safety, to ensure the proper functioning and development of civil aviation safety, to establish certification specifications and to provide certification of aeronautical products. Table 1 summarises the competences and activities of the Agency on the basis of information supplied by it.

2. For information, the annual accounts drawn up by the Agency for the financial year 2004 are presented in summary form in Tables 2, 3 and 4.

THE COURT'S OPINION

3. The Court's opinion is addressed to the European Parliament and the Council in accordance with Article 185(2) of Council Regulation (EC, Euratom) No 1605/2002 (2); it was drawn up following an examination of the Agency's accounts, as required by Article 248 of the Treaty establishing the European Community.

4. The Agency's accounts for the financial year ended 31 December 2004 (3) were drawn up by its Executive Director, pursuant to Article 49 of Regulation (EC) No 1592/2002, and sent to the Court, which is required to give its opinion on their reliability and on the legality and regularity of the underlying transactions.

5. The Court conducted an audit in accordance with its policies and standards, which are based on international auditing standards that have been adapted to the Community context. The audit was planned and performed to obtain reasonable assurance that the accounts are reliable and the underlying transactions are legal and regular.

6. The Court has obtained a reasonable basis for the opinion expressed below.

Reliability of the accountsThe Agency's accounts for the financial year ended 31 December 2004 are, in all material respects, reliable.Legality and regularity of the underlying transactionsThe transactions underlying the Agency's annual accounts, taken as a whole, are legal and regular.The observations which follow do not call the Court's opinion into question.

OBSERVATIONS

7. Contrary to the budgetary principle of specificity, the Agency's initial budget and its amending budgets, as published in the Official Journal, do not give a breakdown of appropriations in terms of articles and items, as required by Article 23 of the Agency's financial regulation.

8. The revenue and expenditure account for the financial year 2003 showed a loss (4) of 214 000 euro. In accordance with the provisions of the Agency's financial regulation, this outturn ought to have been entered in an amending budget for 2004 (5).

9. The budgetary management suffers from a number of anomalies: a lack of any indication in the amending budgets about the transfers carried out or even of any reasons for these transfers, failure to inform the Management Board about the transfers, and payment of advances outside the budget.

10. The Agency has not yet adopted the implementing rules for its financial regulation. Neither has it carried out any risk analysis or prepared any internal control standards.

11. The staff selection procedures are not laid down formally and vary from one selection to another without any apparent reason. In order to improve the transparency of the decisions taken in this regard, the Agency needs to formalise its recruitment procedures and make them more consistent.

This report was adopted by the Court of Auditors in Luxembourg at its meeting of 5 October 2005. For the Court of Auditors Hubert WEBER President

(1) OJ L 240, 7.9.2002, p. 1.

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

(3) These accounts were drawn up on 23 August 2005 and received by the Court on 19 September 2005.

(4) This loss was due to carry-overs of appropriations that were not covered by the budgetary revenue received.

(5) Article 16(2) of the Agency's financial regulation.

Table 1 European Aviation Safety Agency (Cologne) Areas of Community competence deriving from the Treaty Competences of the Agency as defined in Regulation (EC) No 1592/2002 of the Parliament and of the Council of 15 July 2002 Governance Resources made available to the Agency (2003 data) Products and services Common transport policy Objectives: Tasks: 1. The Management Board, consisting of one representative of each Member State and one representative of the Commission, sets up an advisory body of interested parties. 2. The Executive Director manages the Agency; is appointed by the Management Board on a proposal from the Commission. 3. The Board of Appeal rules on the Agency's decisions concerning certification, fees and charges and checks made on undertakings. 4. The Scientific Committee and scientific groups supply the scientific opinions of the Agency. 5. External control: European Court of Auditors. 6. Discharge given by the Parliament on a recommendation from the Council. Final budget: Opinions: ‘The Council may, acting by a qualified majority, decide whether, to what extent and by what procedure appropriate provisions may be laid down for sea and air transport.’ (Article 80 of the Treaty) To maintain a high uniform level of civil aviation safety in Europe and to ensure the proper functioning and development of civil aviation safety. 1. to issue opinions addressed to the Commission; 2. to issue certification specifications, including airworthiness codes and acceptable means of compliance, and any guidance material for the application of Community policy; 3. to take decisions regarding airworthiness and environmental certification; 4. to conduct standardisation inspections at the competent authorities of the Member States; 5. to conduct the necessary investigations in undertakings. Total budget: 11,3 million euro (4,8 million euro) Community contribution: 11,1 million euro (98 %) (4,8 million euro) Contribution of the Federal Republic of Germany: 0,2 million euro (2 %). Staff numbers as at 31 December 2004: 95 posts in the establishment plan (80) posts occupied: 84 (1) + 18 other posts (16). Total staff numbers: 102 (17) assigned to the following tasks: — operational: 36 (1) — administrative: 30 (4) — mixed: 36 (12). — 3 opinions concerning amendments to Regulations (EC) Nos 1592/2002, 1702/2003 and 2042/2003; — 2 opinions relating to derogations issued by Member States. Rulemaking decisions: 1 amendment to Agency certification specifications. International cooperation: 5 cooperation agreements made with Brazil, China, Canada, Israel and the Aeronautical Committee of the Commonwealth of Independent States. Certification decisions: Type certificates: 35 Supplementary type certificates: 576 Airworthiness directives: 442 European Technical Specifications: 257 Acceptable means of compliance: 86 Major changes: 1 378 Minor changes: 4 472 Major repairs: 320 Minor repairs: 3 252 AFM/RFM (= Flight Manual Revisions): 741 Approval of design organisations: 84 Approval of maintenance organisations (bilateral): 1 559 Approval of maintenance organisations (foreign): 180 Approval of maintenance training organisations: 13 Approval of manufacturing organisations: 1 Source: Information supplied by the Agency.

Table 2 European Aviation Safety Agency — Implementation of the budget for the financial year 2004 (1000 euro) Revenue Expenditure Origin of revenue Revenue entered in the final budget for the financial year Revenue collected Allocation of expenditure Final budget appropriations Appropriations carried over from the previous financial year Appropriations available (2004 budget and financial year 2003) entered committed paid carried over cancelled outstanding commitments paid cancelled appropriations committed paid carried over cancelled Community subsidies 11 050 11 050 Title I Staff 7 807 6 000 5 686 314 1 807 30 12 18 7 837 6 030 5 698 314 1 825 Other contributions 287 248 Title II Administration 2 539 2 060 1 250 810 479 396 379 17 2 935 2 456 1 629 810 496 Title III Operating activities 991 937 673 264 54 2 486 1 330 1 156 3 477 3 423 2 003 264 1 210 Total 11 337 11 298 Total 11 337 8 997 7 609 1 388 2 340 2 912 1 721 1 191 14 249 11 909 9 330 1 388 3 531 Source: Agency data — This table summarises the data supplied by the Agency in its annual accounts.

Table 3 European Aviation Safety Agency — Revenue and expenditure account for the financial years 2004 and 2003 (1) (1000 euro) 2004 2003 Operating revenue Community subsidies 7 777 3 725 Other subsidies 248 0 Reimbursement of expenditure 3 0 Other revenue 350 0 Total (a) 8 378 3 725 Operating expenditure Staff 5 556 662 Buildings and related expenditure 689 92 Other administrative expenditure 743 82 Allocation to provisions 89 1 Operating expenditure 2 081 261 Total (b) 9 158 1 098 Operating outturn (c = a – b) – 780 2 627 Financial income (d) 0 0 Financial expenses (e) 2 0 Financial outturn (f = d – e) –2 0 Outturn for the financial year (g = c + f) – 782 2 627 Source: Agency data — This table summarises the data supplied by the Agency in its annual accounts.

Table 4 European Aviation Safety Agency — Balance sheet as at 31 December 2004 and 31 December 2003 (2) (1000 euro) Assets 2004 2003 Liabilities 2004 2003 Intangible assets 69 27 Own capital Tangible assets Outturns carried over from previous financial years 2 627 0 Outturn for the financial year – 782 2 627 Computer equipment 376 12 Subtotal 1 845 2 627 Furniture and vehicles 285 0 Current liabilities Other fittings and equipment 261 0 Current accounts payable 549 112 Subtotal 922 12 Sundry accounts payable 61 6 Current assets Amounts owed to Community institutions and bodies 3 843 32 Prefinancing 70 0 Subtotal 4 453 150 Sundry accounts receivable 171 5 Other accounts receivable 68 5 Amounts owed by Community institutions and bodies 20 1 Subtotal 329 11 Liquid assets 4 978 2 727 Total 6 298 2 777 Total 6 298 2 777 Source: Agency data — This table summarises the data supplied by the Agency in its annual accounts. (1) The data for the financial year 2003 have been restated to make them comparable, following the transition to accruals-based accounting. Source: Agency data — This table summarises the data supplied by the Agency in its annual accounts. (2) The data for the financial year 2003 have been restated to make them comparable, following the transition to accruals-based accounting. Source: Agency data — This table summarises the data supplied by the Agency in its annual accounts.