EN Official Journal of the European Union C 332/89

REPORT

on the annual accounts of the European Monitoring Centre for Drugs and Drug Addiction for the financial year 2004 together with the Monitoring Centre's replies

(2005/C 332/13)

CONTENTS

1-2 INTRODUCTION

3-6 THE COURT'S OPINION

7-10 OBSERVATIONS

Tables 1 to 4

The Monitoring Centre's replies

INTRODUCTION

1. The European Monitoring Centre for Drugs and Drug Addiction (hereinafter called ‘the Monitoring Centre’) was established by Council Regulation (EEC) No 302/93 of 8 February 1993 (1). Its main task is to collect data on drugs and drug addiction in order to prepare and publish information that is objective, reliable and comparable at European level. The information is intended to provide a basis for analysing demand for drugs and ways of reducing both it and drug-market-related events in general. Table 1 summarises the Monitoring Centre's competences and activities on the basis of information it has supplied.

2. For information, the annual accounts drawn up by the Monitoring Centre for the financial year 2004 are summarised 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 Centre's accounts, as required by Article 248 of the Treaty establishing the European Community.

4. The Centre's accounts for the financial year ended 31 December 2004 (3) were drawn up by its Executive Director, pursuant to Article 11 of Regulation (EEC) No 302/93, 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 Centre'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 Centre'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. More than a hundred transfers of appropriations were made during the financial year 2004; the transfers made from certain items were compensated for by transfers in the opposite direction. Amendments on this scale make the management of the Monitoring Centre very cumbersome and show that the necessary rigour is not being applied to compliance with the budgetary principle of specification.

8. The checks carried out on the implementation of contracts revealed a number of anomalies (4). Although, considered individually, these anomalies do not call into question the regularity of the transactions concerned, their frequency (5) should induce the Monitoring Centre to strengthen its internal control system.

9. No reconciliations between bank balances and the accounts are carried out and the errors in the amounts to be paid are not always detected. Moreover, the accounting officer's instructions to the bank are not countersigned by a second person. As this is a high-risk area, internal control procedures should be strengthened without delay.

10. The data concerning fixed assets are compiled with the aid of electronic calculation sheets, which does not guarantee the integrity of the data recorded. A reliable computer system must be used to monitor the fixed assets.

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 36, 12.2.1993. This Regulation has been amended by Regulation (EC) No 3294/94 of 22.12.1994 (OJ L 341, 30.12.1994, p. 7) and Regulation (EC) No 1651/2003 of 18.6.2003 (OJ L 245, 29.9.2003, p. 30).

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

(3) These accounts were drawn up on 11 August 2005 and received by the Court on 19 September 2005.

(4) In particular, six cases of purchases being made without a contract using just an order form, commencement of work for one contract before the commitment operations, inadequate checks on one contractor's invoices, amendments to contracts without the addition of new clauses (checks covered a total of 360 000 euro, i.e. 27 % of purchases made within the framework of Title II).

(5) An examination of the 13 contracts in the sample revealed that all except one contained at least one anomaly; altogether no fewer than 23 anomalies were detected.

Table 1 European Monitoring Centre for Drugs and Drug Addiction (Lisbon) Areas of Community competence deriving from the Treaty Competencies of the Monitoring Centre as defined in Council Regulation (EC) No 302/93 Governance Resources made available to the Monitoring Centre in 2004 (2003 data) Products and services supplied in 2004 The Community complements the Member States' action in reducing drugs-related health damage, including information and prevention. (Article 152(1) of the Treaty) Objectives To provide the European Union and its Member States with reliable information at European level concerning drugs and drug addiction and their consequences. The Monitoring Centre should give priority to analysing: 1. the demand and reduction of the demand for drugs; 2. national and Community strategies and policies; 3. international cooperation and the geopolitics of supply; 4. control of the trade in narcotics, psychotropic substances and drug precursors; 5. the implications of drug use for producer, consumer and transit countries, including money-laundering. Tasks — To collect and analyse data. — To make enquiries and carry out preparatory actions. — To ensure that European-level data is more reliable. — To publish reliable information. — To improve coordination between the national and Community actions. — To promote the incorporation of drug-related data into international programmes. 1. The Management Board: Comprises one representative from each Member State, two representatives of the Commission and two qualified scientists appointed by the European Parliament. It approves the work programme and general annual report and adopts the budget. 2. Director: Appointed by the Management Board on the Commission's proposal. 3. Scientific Committee: Delivers opinions. It is made up of one representative from each Member State. The Management Board may also appoint a maximum of six other members on the basis of their specific qualifications. 4. External audit: European Court of Auditors. 5. Discharge: European Parliament on the Council's recommendation. Final Budget: 12,2 million euro (10,5 million euro), Community subsidy: 96 % (89 %). Staff numbers as at 31 December 2004: Number of posts in establishment plan: 77 (63). Posts occupied: 61 (54). + 22 (18) other staff (auxiliary contracts, contract staff and employment-agency staff) Total staff: 83 (72) assigned to the following duties: — operational tasks: 54,5 (46,5), — administrative and IT support tasks: 20 (18), — mixed tasks: 8,5 (7,5). Network: The Monitoring Centre runs a computerised network for the collection and exchange of information called the ‘‘European Information Network on Drugs and Drugs Addiction’’ (Reitox); this network connects the national drug-information networks, the specialist centres in the Member States and the information systems of international organisations working with the Monitoring Centre. Publications: — Annual report on the state of the drug problem in the European Union (20 language versions, publication and interactive website) — Bulletin of statistics and interactive website containing over 100 tables — General report of activities (annual, EN) — Newsletter, Drugnet Europe (4 issues in five languages, 20 products) — Policy briefings, Drugs in Focus (3 issues, 21 languages, 63 products) — Country situation summaries — for the 25 Member States (interactive website) — Publications in the EMCDDA series: 1 Monograph, 2 Risk assessments, 1 Insights — Snapshot 2004 — report and 10 thematic papers — publication and website — Scientific studies (20) — Presentation brochure (in the ten new languages) — Complete restructuring of main website Source: Information forwarded by the Monitoring Centre.

Table 2 European Monitoring Centre for Drugs and Drug Addiction — Implementation of the budget for the financial year 2004 (1000 euro) Revenue Expenditure Source of revenue Revenue entered in the final budget for the financial year Revenue collected Allocation of expenditure Final appropriations for the financial year Appropriations carried over from previous financial years entered committed paid carried over cancelled available committed paid cancelled Commission subsidy 11 730 11 730 Title I Subsidy from Norway 514 514 Staff (NDA) 6 171 5 998 5 831 122 218 80 80 61 18 Miscellaneous revenue 0 33 Title II Phare assigned revenue 0 211 Administration (NDA) 1 479 1 444 1 088 356 35 267 267 210 57 Title III Operating activities (DA) 1 469 1 452 1 299 170 — CA 4 594 4 509 — — 85 — — — — — PA 4 594 — 2 342 1 260 992 — — — — Assigned revenue — — — — — 223 218 201 22 12 244 12 488 Total CA 12 244 11 951 Total PA 12 244 9 262 1 737 1 245 2 039 2 016 1 771 267 NDA: non-differentiated appropriations (commitment appropriations are equal in amount to payment appropriations). DA: differentiated appropriations (commitment appropriations may differ in amount from payment appropriations). CA: commitment appropriations in the context of differentiated appropriations. PA: payment appropriations in the context of differentiated appropriations. Source: Information supplied by the Monitoring Centre — This table summarises the data provided by the Monitoring Centre in its annual accounts.

Table 3 European Monitoring Centre for Drugs and Drug Addiction — Revenue and expenditure accounts for the financial years 2004 and 2003 (1000 euro) 2004 2003 (1) Revenue Subsidies from the Commission 11 730 9 300 Subsidies from Norway 514 421 Assigned revenue 211 335 Miscellaneous revenue 33 67 Total revenue (a) 12 488 10 122 Budgetary expenditure for the financial year Staff — Title I of the budget Payments 5 832 5 189 Appropriations carried over 122 80 Administration — Title II of the budget Payments 1 088 555 Appropriations carried over 356 267 Operating activities — Title III of the budget (except assigned revenue) Payments against payment appropriations for the financial year 2 342 2 057 Appropriations carried over 1 260 1 469 Assigned revenue (Phare and third countries) 201 500 Total expenditure (b) 11 200 10 117 Outturn for the financial year (a – b) 1 288 5 Balance carried over from the previous financial year 295 1 626 Appropriations carried over and cancelled 245 (2) 221 Sums for re-use from the previous financial year not used 15 21 Refunds to the Commission –3 –1 584 Refunds to Norway 81 Exchange-rate differences –1 6 Balance for the financial year 1 920 295 Source: Information supplied by the Monitoring Centre — This table summarises the data provided by the Monitoring Centre in its annual accounts.

Table 4 European Monitoring Centre for Drugs and Drug Addiction — Balance sheet as at 31 December 2004 and 31 December 2003 (1000 euro) Assets 2004 2003 Liabilities 2004 2003 Fixed assets Fixed capital Intangible assets 129 94 Own capital 2 950 3 057 Buildings 3 559 3 559 Balance for the financial year 1 920 295 Equipment and furniture 165 157 Subtotal 4 870 3 352 Transport equipment 50 50 Current liabilities Computer equipment 716 659 Phare carry-overs — 223 Depreciation –1 713 –1 496 Appropriations carried over against Titles I, II and III 1 737 1 815 Subtotal 2 906 3 023 Sundry accounts payable 54 18 Stocks Recovery orders 0 55 Office supplies 0 34 Subtotal 1 791 2 111 Subtotal 0 34 Suspense accounts Revenue for re-use 25 — Long-term assets Deferred revenue — 123 Staff loans 23 0 Subtotal 25 123 Subtotal 23 0 Current assets Phare 26 Other advances 8 78 Recoverable VAT 47 94 Sundry accounts receivable 32 66 Subtotal 113 238 Cash accounts Bank accounts 3 640 2 291 Cash 4 Subtotal 3 644 2 291 Total 6 686 5 586 Total 6 686 5 586 Source: Information supplied by the Monitoring Centre — This table summarises the data provided by the Monitoring Centre in its annual accounts. (1) The data for the financial year 2003 have been processed again to enable use of the assigned revenue to be traced. (2) Does not take into account cancellations of Phare appropriations carried over and not used (22 000 euro). Source: Information supplied by the Monitoring Centre — This table summarises the data provided by the Monitoring Centre in its annual accounts.