EN Official Journal of the European Union C 15/1

Report on budgetary and financial management in 2007

(2009/C 15/01)

TABLE OF CONTENTS

Report on budgetary and financial management in 2007

1. Introduction

2. Overview of budget implementation in 2007

3. Budget implementation in 2007 by chapter

Annexes

Tables of budget implementation in 2007

Report on budgetary and financial management in 2007

1. INTRODUCTION

This report which, in accordance with Article 122 of the Financial Regulation and Article 185 of the Implementing Rules, accompanies the accounts of the Court of Justice for 2007, gives an account of, inter alia, the rate of implementation of appropriations. In addition, it offers a summary of the transfers of appropriations to and from various budget items carried out in the course of the 2007 financial year.

Chapter 2 of this report gives an overview of budget implementation in 2007 and Chapter 3 examines in more detail the trends in budget lines according to budget chapters.

Lastly, the annexes provide summary tables relating again to budget implementation in 2007.

2. OVERVIEW OF BUDGETARY IMPLEMENTATION IN 2007

2.1. Revenue

The estimated revenue of the Court of Justice for the financial year 2007 was EUR 35 284 000.

As shown in the table below, the established entitlements in 2007 are EUR 36 925 706,78 and are 4,65 % higher than estimated (1).

(EUR) Title Estimated revenue 2007 Established entitlements 2007 % of total 4. Revenue accruing from persons working with the institution 35 184 000,00 35 829 022,63 97,03 5. Revenue accruing from the administrative operation of the institution 90 000,00 926 196,15 2,51 9. Miscellaneous revenue 10 000,00 170 488,00 0,46 Total 35 284 000,00 36 925 706,78 100,00 % 100 % 104,65 %

It can be seen that revenue in title 4 (deductions from the remuneration of members and staff) represents a very high percentage of the total revenue (97,03 %), while revenue in titles 5 and 9 represents less than 3 % of the total.

The annexed table B provides additional data on the whole of the revenue stream (revenue entitlements carried over, revenue entitlements established and revenue entitlements collected).

2.2. Expenditure

2.2.1. Appropriations in the financial year

The appropriations entered in the budget of the Court of Justice for the 2007 financial year were EUR 272 219 390.

As shown in the table below, the budget implementation for 2007 amounts to EUR 265 153 892,05 and represents a rate of use of final appropriations of 97,40 %. It shows an improved use of appropriations as compared with the preceding year (95,19 %).

It can also be noted that, as in previous years, more than three-quarters of the Court of Justice's budget is allocated to expenditure on staff (77,78 % in 2007).

(EUR) Title Appropriations for 2007 financial year Commitments in 2007 financial year % of total 1. Persons working with the institution 212 850 990,00 206 222 384,71 77,78 2. Buildings, furniture, equipment and miscellaneous operating expenditure 59 332 400,00 58 919 744,83 22,22 3. Expenditure resulting from special functions carried out by the institution 36 000,00 11 762,51 — 10. Other expenditure 0,00 0,00 — Total 272 219 390,00 265 153 892,05 100,00 % 100 % 97,40 %

2.2.2. Appropriations carried over

The table below shows the use of appropriations carried over from 2006 to 2007, the total amount being EUR 13 268 673,84, a very large proportion of which (87,53 %) was used.

(EUR) Title Appropriations carried over 2006 to 2007 Payments out of appropriations carried over Cancellations 1. Persons working with the institution 3 406 356,92 2 600 983,50 805 373,42 2. Buildings, furniture, equipment and miscellaneous operating expenditure 9 853 812,83 9 010 545,11 843 267,72 3. Expenditure resulting from special functions carried out by the institution 8 504,09 3 504,09 5 000,00 10. Other expenditure 0,00 0,00 0,00 Total 13 268 673,84 11 615 032,70 1 653 641,14 % 100 % 87,53 % 12,46 %

2.2.3. Transfers of appropriations

In the course of 2007 the Court of Justice made 56 budget transfers representing a total figure of EUR 16 589 975,24.

In accordance with Article 22 of the Financial Regulation, eight transfers of appropriations were the subject of notification to the budgetary authority. Those transfers were of EUR 13 968 000 and correspond to 84,20 % of the total sum transferred in the financial year.

In addition, nine transfers from item to item and 39 transfers from sub-item to sub-item, not notified to the budgetary authority, were made, with a total value of EUR 2 621 975,24, representing 15,80 % of the total sum transferred in the financial year.

The table below provides details of the budget lines affected by the most significant transfers (transfers greater than EUR 250 000).

(EUR) Budget lines where the initial funding was altered > EUR 250 000 Line Heading Initial Appropriations Transfers Final Appropriations 102 Temporary allowances 2 393 000 - 375 000 2 018 000 1200.00 Basic salaries 130 687 000 -8 245 152 122 441 848 1200.01 Family allowances 10 456 190 -1 252 240 9 203 950 1200.02 Expatriation allowances 20 910 000 -1 207 000 19 703 000 1406.2 Other freelance interpreters 1 958 000 365 000 2 323 000 1406.4 Freelance proofreaders 93 000 340 000 433 000 1406.5 Supplementary translation services 6 800 000 - 362 794 6 437 206 1612 Further training 1 088 000 350 000 1 438 000 1654 Early Childhood Centre and other crèches 1 231 000 325 000 1 556 000 2000 Rent 12 175 000 - 314 000 11 861 000 2001 Lease purchase 8 500 000 10 340 000 18 840 000 2024 Consumption of energy 1 287 000 600 000 1 887 000 2100 Purchase, servicing and maintenance of equipment and software 1 795 000 1 150 000 2 945 000 2102 External services for operation, creation and servicing of software and systems 7 192 400 1 034 000 8 226 400 10100 Provisional appropriations 2 500 000 -2 500 000 0

3. BUDGET IMPLEMENTATION IN 2007 BY CHAPTER

TITLE 1 — Persons working with the institution

The final budget funding of title 1 for the financial year 2007 is EUR 212 850 990, which represents almost 80 % of the total budget of the Court of Justice. Those appropriations were committed to the extent of EUR 206 222 384,71, in other words a rate of implementation of 96,89 % as compared with 94,15 % in 2006. The expenditure in this title has increased by 9,32 % as compared with 2006 (as against a 7,62 % increase in 2006).

Chapter 10 — Members of the institution

(a) Use of appropriations

The final appropriations in this chapter, amounting to EUR 28 988 800, were committed to the extent of EUR 27 224 797,50, or 93,91 %.

(b) Significant alterations to the initial funding

Transfers No 6 and 12:

from Item 1002 — Rights connected with entering the service = - 100 000 euro from Article 102 — Temporary allowances = - 375 000 euro to Item 10300 — Retirement pensions = + 175 000 euro to Item 2001 — Lease purchase = + 300 000 euro

On the three-yearly renewal of the terms of office of the members of the Court of First Instance, only four new members were appointed, whereas the 2007 budget estimates had been drawn up on the basis of the renewal of the terms of office of seven members. In addition, the death of two former members of the Court of Justice, who were also in receipt of temporary allowances, further restricted the use of those Article 102 appropriations. There has thus also been a saving in Item 1002 in respect of travel expenses and removal expenses of members of the institution on their entering the service or leaving the institution and in respect of installation and resettlement allowances.

The availability of those appropriations allowed additions to be made to Item 10300 — Retirement pensions (the unforeseeable retirement of three former members of the institution) and to Item 2001 — Lease purchase (see remarks on chapter 20).

Chapter 12 — Officials and temporary staff

(a) Use of appropriations

The final appropriations in this chapter, amounting to EUR 166 634 190, were committed to the extent of EUR 162 762 848,36, or 97,68 %.

The appropriations in this chapter for 2007 were marked by the enlargement to include Bulgaria and Romania, for which 115 new posts had been entered in the establishment plan. In addition, 15 other posts had been obtained to deal with current activity.

The financial year 2007 was therefore marked by a significant level of recruitment (306 officials and temporary staff taking account of new posts and normal turnover). The budgetary authority was kept regularly informed of progress and difficulties in relation to recruitment, particularly on the EUR-10 and EUR-2 enlargements (reports of June 2007, October 2007 and January 2008).

Despite continuing efforts by the Court to fill the posts granted in relation to the two recent enlargements, the recruitment of officials has on occasion been difficult because reserve lists from open competitions were not available or did not contain a sufficient number of successful candidates. More significant difficulties were encountered in relation to IT posts and interpreter posts. Those particular difficulties, and also the fact that the increase in recruitment in connection with enlargement was more gradual than estimated when the budget estimates were made in the first quarter of 2006, explain the surplus appropriations which could be released from chapter 12 in 2007 (see point (b) below).

(b) Significant alterations to the initial funding

Transfers No 4, 8 and 13:

from Item 1200 — Remunerations and allowances = -10 630 000 euro to Sub-item 14062 — Other freelance interpreters = + 365 000 euro to Item 1612 — Further training = + 350 000 euro to Item 1654 — Early Childhood Centre and crèches = + 325 000 euro to Item 2024 — Energy Consumption = + 600 000 euro to Item 2001 — Lease purchase = +8 000 000 euro to Item 2102 — External services for operation, creation and servicing of software and systems = + 990 000 euro

The available funds thus released were used for various budget reinforcements on which the relevant remarks are provided below under the various chapters concerned.

Chapter 14 — Other staff and external services

(a) Use of appropriations

Generally, the final appropriations in this chapter, amounting to EUR 13 168 900 were committed to the extent of EUR 12 370 922,97, or 93,94 %.

Two items in this chapter represent more than 93 % of the final appropriations. Those are Item 1400 — Other staff, where the rate of implementation was 98,83 %, and Item 1406 — External services in the linguistic field, where the rate of implementation was 93,54 %.

The accession of Bulgaria and Romania in 2007 and the addition of two new official languages necessarily increased external services in the linguistic field (expenditure on translation and interpreting), and the rates of implementation of those appropriations have clearly risen as compared with the previous financial year.

(b) Significant alterations to the initial funding

Transfer No 8:

Sub-item 14062 — Other freelance interpreters = + 365 000 euros

The increased appropriations coming from chapter 12 made possible the funding of increased recourse to external resources for interpreting, justified both by the increase in activity and by the significant difficulties in recruitment of interpreters due to insufficient competition lists.

Chapter 16 — Other expenditure relating to persons working with the institution

(a) Use of appropriations

The final appropriations in this chapter, amounting to EUR 4 059 100, were committed to the extent of EUR 3 863 815,88, or 95,19 %.

Two items in this chapter represent more than 73 % of the final appropriations. Those are Item 1612 — Further training, where the rate of implementation was 91,92 %, and Item 1654 — Early Childhood Centre, where the rate of implementation was 100 %.

As regards expenditure on further training, the workload measured in training days amounted to 21 111 days and 5 549 persons attended. There was a significant increase in the number of training days allocated to specific IT applications. In fact, two significant projects reached fruition in 2007 and required the introduction of presentations and/or training aimed at users of the systems (the Internal Gateway (‘Portail interne’) application for court business and the SAP integrated financial and budgetary management system).

As regards expenditure on the Early Childhood Centre, the increase is directly linked to the increased staff numbers arising from the successive enlargements (greater use of crèches and day care centres for children of staff from new Member States). Those activities are organised and managed in an interinstitutional framework to take maximum advantage of economies of scale resulting from the sharing of resources.

(b) Significant alterations to the initial funding

Transfer No 4:

Item 1612 — Further training = + 350 000 euro

This transfer of appropriations from chapter 12 made possible an increase in funding devoted to further training to deal with the following factors:

— greater number of language training courses due to large-scale recruitment following the recent enlargements,

— increase in the hourly rate charged for some courses as a result of the entry into force of a new interinstitutional contract,

— introduction of an IT training plan as a result of the launch of a new financial management application (SAP-SOS II).

Transfer No 8:

Item 1654 — Early Childhood Centre = + 325 000 euro

This budget item corresponds entirely to the funding of interinstitutional activities, of which the managing institutions are, first, the Parliament for the crèches, and second, the Commission, for the day-care centre/study centre. Those managing institutions were faced with a significant increase in their activities because of the two recent phases of enlargement, which affected the requirements for accommodation and external staff, and made necessary an increase in appropriations funded from chapter 12.

TITLE 2 — Buildings, furniture, equipment and miscellaneous operating expenditure

The final budget funding in title 2 for the 2007 financial year is EUR 59 332 400 and that funding represents almost 22 % of the total budget of the Court of Justice. Those appropriations were committed to the extent of EUR 58 919 744,83, which is a rate of implementation of 99,30 % as against 99,40 % in 2006. The expenditure in this title has increased by 18,70 % as compared with 2006 (as against a 30,69 % increase in 2006).

Chapter 20 — Buildings and associated costs

(a) Use of appropriations

The final appropriations in this chapter, amounting to EUR 38 882 000, were committed to the extent of EUR 38 709 427,33, or 99,56 %. Expenditure in this title has increased by 32,32 % as compared with 2006, which is due to the acceleration of the project for the renovation of the Palais and the extension of the Court's buildings, a project which is essential to meet the challenge of the two successive enlargements. Occupation of the new buildings is forecast for 2008.

Within this chapter, the final appropriations to Articles 200 — Buildings, and 202 — Buildings-related costs represent respectively 82 % (EUR 31 995 000) and 18 % (EUR 6 887 000) of the total appropriations.

As regards Article 200 — Buildings, expenditure in Item 2000 — Rent amounted to EUR 11 857 785 (99,97 % rate of implementation) and expenditure in Item 2001 — Lease purchase amounted to EUR 18 840 000 (100 % rate of implementation). Expenditure on the latter item is very largely assigned to prepayments, on the basis of contracts signed with the Luxembourg authorities, in respect of ongoing building projects (principally the new Palais project). Those substantial prepayments enable the institution to reduce the financial impact of the nouveau Palais in future financial years.

As regards Article 202 — Buildings-related costs, the expenditure concerned is mainly on cleaning and maintenance, energy consumption and security/surveillance of the buildings, amounting to EUR 6 503 786 (98 % rate of implementation), expenditure which is directly linked to the surface areas used which are in direct correlation with increased staff numbers.

(b) Significant alterations to the initial funding

Transfer No 3:

from Item 2000 — Rent = - 150 000 euro from Item 2008 — Studies and technical assistance = - 100 000 euro to Subitem 20070 — Fitting out of premises = + 250 000 euro

Taking account of requirements to cover expenditure until the end of the year, a surplus was released in Items 2000 and 2008, which was used to finance the fitting out of the new computer room on the back-up site in the Euroforum building.

Transfer No 8:

Item 2024 — Energy consumption = + 600 000 euro

The funding for energy consumption had to be increased to meet the rise in energy prices and the increase in the number of offices to be heated/air-conditioned as a result of the significant increase in staff numbers. Those appropriations came from chapter 12.

Transfer Nos 15, 16 and 17:

Item 2000 — Rent = - 164 000 euro Item 20070 — Fitting-out of premises = -50 000 euro Item 2008 — Studies and technical assistance = - 126 000 euro

A precise estimation, at the end of 2007, of the requirements to cover expenditure until the end of the year on those three budget items made possible the releasing of surplus appropriations, which enabled Item 2001 to be increased by EUR 500 000 (see remarks below).

Transfer No 2 (refer to chapter 100):

Item 2001 — Lease purchase = +1 500 000 euro

Transfer Nos 11, 12, 13, 15, 16 and 17 (refer to chapters 10 and 12):

Item 2001 — Lease purchase = +8 840 000 euro

Those increases to Item 2001 were distributed as follows:

— EUR 840 000 in relation to the lease-purchase contract for the buildings annexed to the Palais (Thomas More, Erasmus and Annex C buildings),

— EUR 9 500 000 in relation to the lease-purchase contract for the new Palais.

As a result of that increase, it was possible to assign a total of EUR 17 850 000 to prepayments on the Court's major buildings project.

That substantial amount will enable the institution to reduce the financial impact of the new Palais on future financial years, by reducing both interest paid on the advance funding and the amount of borrowings (which is to be consolidated at the end of 2008 by the EIB and the BCEE when all the buildings are delivered) and, consequently, the interest to be paid until 2026.

That transaction is thus entirely in accord with the wishes of the two arms of the budgetary authority as to the broad lines of the buildings projects of the Community institutions.

Chapter 21 — Data processing, equipment and movable property

(a) Use of appropriations

The final appropriations in this chapter, amounting to EUR 14 517 400, were committed to the extent of EUR 14 353 802,46, or 98,87 %.

Within this chapter, more than 80 % of the appropriations are devoted to the IT field. In this field, more than three-quarters of the available resources were allocated to the regular renewal of the stock of hardware, the servicing of existing systems, to current operations and to support, the remainder being devoted to new projects. During 2007, 12 new IT applications were brought into service, which had a significant impact on the resources needed for servicing, on software licences and on support for those systems, which are essential to the operation of the institution.

(b) Significant alterations to the initial funding

Transfer No 2:

Item 2100 — Purchase, servicing and maintenance of equipment and software = +1 000 000 euros

The appropriations intended for this item had been entered in the reserve in chapter 100 by the budgetary authority when the 2007 budget was approved. The Parliament had made the releasing of those appropriations conditional on submission of a report on the impact of the creation of the Civil Service Tribunal in terms of costs of buildings, staff and other expenses. The submission of that report in February 2007 made it possible to release the appropriations.

Transfer No 4:

Item 2102 — External services for software and systems = + 990 000 euro

That increase in appropriations, coming from chapter 12, made it possible to respond to urgent requirements (extending users' support availability times, development of IT solutions for judicial business and recourse to subcontractors due to specific problems in recruiting IT staff).

Chapter 23 — Current administrative expenditure

Use of appropriations

The final appropriations in this chapter, amounting to EUR 2 204 500, were committed to the extent of EUR 2 182 329,99, or 98,99 %.

More than 80 % of appropriations in this chapter were allocated to two types of expenditure:

— expenditure in Article 230 — Stationery, office supplies and various consumables, which were EUR 1 196 800 (99,98 % rate of implementation),

— and expenditure in Article 236 — Postal charges, which were EUR 630 000 (100 % rate of implementation).

Chapter 25 — Expenditure on meetings and conferences

Use of appropriations

The final appropriations in this chapter, amounting to EUR 721 900, were committed to the extent of EUR 672 545,68, or 93,16 %.

2007 was marked by a major ceremonial event, namely organisation of a symposium on the 50th anniversary of the signature of the Treaties of Rome which brought together at the Court the Presidents of the supreme courts and constitutional courts of the Member States of the European Union. Of other events of note, there must be mentioned the formal sittings which followed the enlargement of the European Union on the accession of Bulgaria and Romania. In addition, both official visits to the Court and visits by the Court to the Member States increased in 2007.

Chapter 27 — Information: acquisition, archiving, production and distribution

(a) Use of appropriations

The final appropriations in this chapter, amounting to EUR 3 006 600, were committed to the extent of EUR 3 001 639,37, or 99,84 %.

The appropriations in this chapter are intended for two types of expenditure:

— expenditure in Article 272 — Documentation, library and archiving expenditure, which amounted to EUR 992 600 (rate of implementation 100 %),

— expenditure in Article 274 — Production and distribution, which amounted to EUR 2 009 039 (rate of implementation 99,75 %).

As regards the library, 2007 has again been marked by the continuing development of electronic tools (electronic periodicals, CD-ROMs and online legal databases made available to users). In addition, the library has continued to extend its stock devoted to the legal systems of the Member States which acceded to the European Union in 2004. It has done the same in respect of the sections devoted to the Bulgarian and Romanian legal systems.

As regards expenditure on production and distribution, that relates essentially to expenditure on publication in the Official Journal (various language versions of judgments, opinions and orders of the courts) and production of general publications (case-law reports in the various language versions etc.), work which is carried out in a framework of interinstitutional cooperation with the Publications Office. In the early months of 2007 production of the new brochure on the Civil Service Tribunal in the 22 languages of the Union was completed. In addition, in connection with the accession of Romania and Bulgaria, almost all existing brochures were updated and translated into the two new official languages of the European Union (Bulgarian and Romanian).

(b) Significant alterations to the initial funding

Transfer No 11:

Sub item 27410 — General publications = - 200 000 euro

In accordance with the rules in force, it was possible to cover the funding of the current needs of publication as a priority by the use of assigned revenue which was particularly substantial in 2007. Accordingly, the Court had surplus appropriations which were transferred in favour of Item 2001 — Lease purchase.

TITLE 3 — Expenditure resulting from special functions carried out by the institution

Chapter 37 — Expenditure relating to certain institutions and bodies

The final budgetary funding of title 3 consists solely of appropriations in chapter 37 for Item 3710 — Court expenses. For 2007, those appropriations were EUR 36 000 and were committed to the extent of EUR 11 762,51, namely a 32,67 % rate of implementation.

As regards expenditure to cover lawyers' fees and other expenses, for which the Court is liable where legal aid is granted, estimating such expenditure is difficult and implementation varies greatly from year to year.

TITLE 10 — Other expenditure

Chapter 100 — Provisional appropriations

The final budgetary funding in title 10 for 2007 was EUR 2 500 000.

Significant alterations to the initial funding

Transfer No 2:

Chapter 100 — Provisional appropriations = -2 500 000 euro

That funding was entered in the reserve in chapter 100 by the budgetary authority when the 2007 budget was approved. The Parliament made the release of those appropriations conditional on submission of a report on the impact of the creation of the Civil Service Tribunal in terms of costs of buildings, staff and other expenses, a report which was submitted in February 2007.

The transfer therefore made it possible to release all of the appropriations in favour of Items 2001 — Lease purchase, and 2100 — Purchase, servicing and maintenance of equipment and software.

(1) That difference is reduced to 2,9 % if account is taken of assigned revenue available for reemployment which, in accordance with budgetary practice, is presented as a token entry (‘p.m’. or pour memoire)’ when the initial budget is drawn up but which is duly taken into account in that same budget via a deduction from the budget items concerned.