EN Official Journal of the European Union C 324/91

REPORT

on the annual accounts of the European Monitoring Centre on Racism and Xenophobia for the 2003 financial year together with the Monitoring Centre's replies

(2004/C 324/13)

CONTENTS

1 INTRODUCTION

2-5 THE COURT'S OPINION

6-14 OBSERVATIONS

Tables 1 to 4

The Monitoring Centre's replies

INTRODUCTION

1. The European Monitoring Centre on Racism and Xenophobia (‘the Centre’) was established by Council Regulation (EC) No 1035/97 of 2 June 1997 (1). The Centre’s primary tasks are to provide the Union and the Member States with reliable information on racism, xenophobia and anti-semitism in the Union and to cooperate with the Council of Europe in these areas. Table 1 is based on information forwarded by the Centre and gives a brief overview of its responsibilities and activities.

THE COURT’S OPINION

2. This 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).

3. The Court has examined the annual accounts of the Centre for the financial year ended 31 December 2003. In accordance with Article 12(8) of Council Regulation (EC) No 1035/97, the budget was implemented on the Director’s responsibility. This responsibility includes the drawing-up and presentation of the accounts (3), in accordance with the internal financial provisions adopted under Article 12(12) of Council Regulation (EC) No 1035/97. The Court of Auditors is required under Article 248 of the Treaty establishing the European Community to examine these accounts.

4. The Court performed its audit in accordance with its auditing policies and standards. These 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 it considered necessary in that context.

5. The Court thus obtained reasonable assurance that the annual accounts for the financial year ended 31 December 2003 are reliable. Subject to the matter described in paragraph 13, the Court obtained reasonable assurance that the underlying transactions, taken as a whole, are legal and regular.

OBSERVATIONS

6. The implementation of the appropriations of the financial year 2003 and the appropriations carried over from the previous financial year is shown in Table 2 (4). The Centre’s balance sheet and revenue and expenditure account for the financial year 2003 are summarised in Tables 3 and 4.

7. The level of carry-overs of appropriations under Title III, Operating activities, remained high, but was lower than the previous year (36 % in 2003 and 40 % in 2002). The Court once again (5) draws the Centre’s attention to the necessity of observing the principle of annuality more fully when planning and monitoring its activities.

8. Of the appropriations carried over from the financial year 2002 to the financial year 2003 (1,5 million euro), 20 % were cancelled at the year-end. This is a large percentage, showing that the justification for the automatic carry-overs of 2002 appropriations was poor, especially in the case of provisional commitments. Carry-overs of appropriations must be strictly limited to obligations duly contracted at the close of the financial year.

9. On 3 March 2003 the Centre signed a convention with the Commission concerning the establishment of an information network for the candidate countries in central and eastern Europe. The project receives funding via Phare subsidies totalling 845 000 euro. In accordance with Article 4 of the convention the Centre received an advance of 676 000 euro (80 %) in 2003. Contrary to the principles of budget unity (6), the Centre did not use an amending budget to include the amount of the 2003 Phare subsidy in its budget.

10. As the Court has already pointed out, in its 2002 Report (7), the Centre should establish an efficient system for managing and monitoring revenue to be collected. A system of that type would avoid the delays that were observed in the issue of recovery orders and the recovery of VAT.

11. As of 31 December 2003 the recovery orders relating to the Austrian authorities’ reimbursement of rent for the period May to August 2003 (37 017 euro) had not been drawn up.

12. An amount of 333 474 euro of VAT paid in 2000 has still not been recovered. If exchange-rate differences are taken into account, the total is understated by 19 242 euro. The Centre must step up its efforts to obtain the VAT reimbursement. Furthermore, the VAT accounts are not regularly analysed and justified. As an example, one VAT reimbursement of around 78 000 euro had not been included as budget revenue and remained as an entry in a suspense account.

13. In 2003 the Centre placed three contracts (for a total of 181 078 euro) with the same supplier, through the negotiated procedure, even though each of the contracts exceeded the 13 800 euro ceiling that applies to that procedure and the conditions that allow the limit to be exceeded were inapplicable.

14. The Centre invited applications from internal candidates for two recruitments. In one case there was only one applicant, and in the other only two. In view of the Centre’s size, this type of procedure limits competition between candidates.

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 151, 10.6.1997, p. 6.

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

(3) As required by Article 12(10) of Council Regulation (EC) No 1035/97 the accounts for all the Centre’s revenue and expenditure for the financial year 2003 were drawn up on 9 September 2004 and forwarded to the Court of Auditors, which received them on 24 September 2004. A summarised version of those accounts is presented in the tables annexed to this report.

(4) All the tables in the Report were drawn up on the basis of the most exact values possible for the data used. Figures have been rounded, for presentational purposes, which may produce minor differences in totals. A dash indicates a non-existent or zero value and 0,0 indicates a value below the rounding threshold.

(5) See paragraph 7 of the 2002 report (OJ C 319, 30.12.2003, p. 70).

(6) See Articles 4 to 6 on the principle of unity and budget accuracy and Article 19(3) of the Centre’s financial regulation.

(7) See paragraph 9 of the Report concerning the 2002 financial year (OJ C 319, 30.12.2003, p. 70).

Table 1 European Monitoring Centre on Racism and Xenophobia (Vienna) Areas of Community competence deriving from the Treaty Competence of the Centre as defined in the Council Regulation (Council Regulation (EC) No 1035/97 of 2 June 1997) Governance Resources available to the Centre in 2003 (2002 figures) Products and services supplied in 2003 Collection of information — The Commission may, within the limits and under conditions laid down by the Council in accordance with the provisions of this Treaty, collect any information and carry out any checks required for the performance of the tasks entrusted to it. (Article 284) Objectives — To provide the Community and its Member States with objective, reliable and comparable data at European level on the phenomena of racism, xenophobia and anti-Semitism — Close cooperation with the Council of Europe in order to avoid duplication and obtain added value Tasks — To study the extent and development of the phenomena of racism and xenophobia — To collect and analyse information, via the European Racism and Xenophobia Information Network (RAXEN) in particular — To carry out scientific surveys — To encourage widespread dissemination of such information — To formulate opinions for the Community and its Member States — To develop indicators and criteria to improve the comparability of data — To publish an annual report on the situation regarding racism and xenophobia. 1. Management Board Composition One independent person appointed by each Member State, one independent person appointed by the European Parliament, one independent person appointed by the Council of Europe and a representative of the Commission. Duties To adopt the work programme and the general annual report. 2. Executive Board Composition — Chairman of the Management Board — representative of the Council of Europe — representative of the Commission — one other member of the Management Board (optional) 3. Director Appointed by the Management Board on a proposal from the Commission. 4. External audit Court of Auditors 5. Discharge authority Parliament on a recommendation from the Council Final budget: 6,575 million euro (6,170 million euro) including Community contribution 98,9 % (98,9 %): Staff numbers at 31 December 2003: 30 (28) posts in establishment plan, posts occupied: 26 (26) +4 (5) other staff (auxiliary contracts, seconded national experts, local and agency staff) Total staff: 30 (31) Assigned to the following duties: operational: 17 (19) administrative: 8 (8) mixed: 5 (4) Non-budgetary: Phare programme: 845 million euro (– million euro), staff: 4 (–) RAXEN: number of contributions through 15 national focal points: 165 number of meetings: 3 +22 reports in the PHARE programme framework and 3 meetings RESEARCH REPORTS: number of reports: 12 number of meetings: 3 Cooperation With The Member States And The Other Institutions (number of events organised jointly): — Member States: 19 — Commission: 2 — European Parliament: 2 — Council of Europe: 4 Source:Information supplied by the Centre.

Table 2 European Monitoring Centre on Racism and Xenophobia — Implementation of the budget for the 2003 financial year (million euro) Revenue Expenditure Source of revenue Revenue entered in the final budget for the financial year Revenue received Allocation of expenditure Final budget appropriations Appropriations carried over from the previous financial year Available appropriations (2003 budget and financial year 2002) entered committed paid carried over cancelled commitments outstanding paid cancelled appropriations committed paid carried over cancelled Community subsidies 6,5 5,6 Title I Staff 2,8 2,7 2,6 0,1 0,1 0,2 0,1 0,1 3,0 2,9 2,7 0,1 0,2 Other revenue 0,1 0,2 Title II Administration 0,6 0,5 0,4 0,1 0,1 0,1 0,0 0,0 0,6 0,6 0,4 0,1 0,1 Title III Operating activities 3,2 2,8 1,7 1,2 0,4 1,2 1,0 0,2 4,4 4,0 2,7 1,2 0,5 Total 6,6 5,8 Total 6,6 6,0 4,7 1,3 0,6 1,5 1,2 0,3 8,1 7,5 5,9 1,3 0,9 NB:Totals may include differences due to rounding. Source:Data supplied by the Centre. These tables summarise the data supplied by the Centre in its own accounts.

Table 3 European Monitoring Centre on Racism and Xenophobia — Revenue and expenditure account for the financial years 2003 and 2002 (1000 euro) 2003 2002 Revenue Community subsidies 7 318 4 320 Other revenue 374 Financial revenue 21 43 PHARE revenue 676 Total revenue (a) 8 389 4 363 Expenditure Staff — Title I of the budget Payments 2 618 2 416 Appropriations carried over 64 187 Administration — Title II of the budget Payments 412 377 Appropriations carried over 51 60 Operating activities — Title III of the budget Payments 1 678 1 686 Appropriations carried over 1 162 1 234 PHARE expenditure Payments 377 Appropriations carried over 694 Total expenditure (b) 7 055 5 960 Outturn for the financial year (a – b) 1 334 –1 597 Balance carried over from the previous financial year –1 579 –8 Appropriations carried over, cancelled 301 52 Appropriations for re-use from the previous financial year, not used 38 151 Exchange-rate differences 5 2 Amounts refunded to the Commission – 179 Balance for the financial year 98 –1 579 NB:Totals may include differences due to rounding. Source:Data supplied by the Centre. These tables summarise the data supplied by the Centre in its own accounts.

Table 4 European Monitoring Centre on Racism and Xenophobia — Balance sheet at 31 December 2003 and 31 December 2002 (1000 euro) ASSETS 2003 2002 LIABILITIES 2003 2002 Fixed assets Own capital Computer software 72 70 Own capital 108 183 Computer equipment 148 140 Balance for the financial year 98 –1 579 Equipment and furniture 250 235 Subtotal 207 –1 396 Depreciation – 362 – 262 Current liabilities Subtotal 108 183 Automatic carry-overs 1 277 1 482 Current assets Sundry accounts payable 275 225 Community subsidies 23 13 VAT to be paid 454 507 Advances 0 1 PHARE liabilities 694 Sundry accounts receivable 77 66 Subtotal 2 700 2 214 Recoverable VAT 456 541 PHARE subsidy 169 0 Subtotal 725 621 Cash accounts Suspense accounts and adjustment accounts Bank accounts 2 073 113 Sums to be reused 99 Subtotal 2 073 113 Subtotal 0 99 Total 2 906 917 Total 2 906 917 NB:Totals may include differences due to rounding. Source:Data supplied by the Centre. The tables summarise the data supplied by the Centre in its own accounts.