EN Official Journal of the European Union C 332/60

REPORT

on the annual accounts of the European Centre for the Development of Vocational Training for the financial year 2004 together with the Centre's replies

(2005/C 332/09)

CONTENTS

1-2 INTRODUCTION

3-6 THE COURT'S OPINION

7-11 OBSERVATIONS

Tables 1 to 4

The Centre's replies

INTRODUCTION

1. The European Centre for the Development of Vocational Training (hereinafter ‘the Centre’) was established by Council Regulation (EEC) No 337/75 (1). Its core mandate is to serve the development of vocational training at Community level. In order to achieve this objective, it has the task of compiling and disseminating documentation on vocational training systems. The Centre's competences and activities are summarised, on the basis of information submitted by the Centre, in Table 1.

2. For information, the annual accounts drawn up by the 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 12a of Regulation (EEC) No 337/75, 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 transactionsExcept for the situations described in paragraph 10, the transactions underlying the Centre's annual accounts, taken as a whole, are legal and regular.

OBSERVATIONS

7. The Centre's financial regulation provides that a distinction must be made in the budget between commitment appropriations and payment appropriations, but this was not done in the budget published for the financial year 2004. Nonetheless, during the financial year in question the Centre managed its operating appropriations in accordance with the rules governing differentiated appropriations. This approach enabled it to reduce the volume of carry-overs of appropriations to the following financial year and thus to give a more accurate picture of its assets. For forthcoming financial years the Centre still needs to adapt its budget to the type of appropriations it is managing.

8. The Centre provides its staff with a canteen on its premises. Separate accounts are kept for the canteen's purchases and sales (4). These accounts are not subjected to the controls provided for in the financial regulation, and are also not included in the Centre's annual accounts. The Centre should rectify this situation.

9. The revenue and expenditure account for the financial year 2003 showed a loss of 993 310 euro. Pursuant to the provisions of the Centre's financial regulation, this result should have been entered in an amending budget for the financial year 2004 (5).

10. In the case of one multiple framework contract, the Centre selected as its first choice a service provider whose financial bid (amount: 150 000 euro) did not meet the conditions laid down in the specifications (6). Compared with the bid of the service provider chosen in second place (amount: 94 500 euro), this choice cost the Centre 55 500 euro more, or over 50 %. More generally, a considerable number of contracts concluded by the Centre with consultants within the framework of its activity programmes were awarded on the basis of negotiated procedures. The competition rules were not always strictly applied in many of the procedures examined by the Court.

11. The recruitment files examined revealed inconsistencies in the procedures applied and the documents requested in each case. Such inconsistencies could be avoided by adopting a guide on recruitment procedures designed to ensure that they are transparent. The Court's examination of the files of individual members of staff also showed that the staff's financial entitlements are not monitored on a systematic basis. Monitoring would ensure that payments (family allowances, etc.) were no longer made to staff in cases where the grounds for entitlement no longer existed.

This report was adopted by the Court of Auditors in Luxembourg at its meetings of 5 October and 7 December 2005. For the Court of Auditors Hubert WEBER President

(1) OJ L 39, 13.2.1975, p. 1.

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

(3) These accounts were drawn up on 12 September 2005 and received by the Court on 13 September 2005.

(4) The canteen's revenue and expenditure for the financial year 2004 amounted to 137 000 euro and 133 500 euro respectively.

(5) Article 35 of the Centre's financial regulation.

(6) Contract 2004-FWC14/RP/D/CMC/VCPOD/013/04).

Table 1 European Centre for the Development of Vocational Training (Thessaloniki) Areas of Community competence deriving from the Treaty Competence of the Centre as specified in Articles 2 and 3 of Council Regulation (EEC) No 337/75 of 10 February 1975 Governance Resources made available to the Centre (2003 data) Products and services supplied in 2004 (2003 data) The Community implements a vocational training policy to support and supplement the action of the Member States as regards the content and organisation of vocational training. Action aims to: — facilitate adaptation to industrial changes, in particular through vocational training and retraining; — improve initial and continuing vocational training in order to facilitate vocational integration and reintegration into the labour market; — facilitate access to vocational training and encourage mobility of instructors and trainees and particularly young people; — stimulate cooperation on training between educational or training establishments and firms; — develop exchanges of information and experience on issues common to the training systems of the Member States. (From Article 150 of the Treaty) The Centre's mandate In its capacity as a European Union reference centre for vocational training and education, Cedefop provides political decision-makers, researchers and professionals with information aimed at developing a clearer understanding of current trends that will thus enable them to reach more soundly based decisions with a view to future action. Cedefop assists the European Commission in promoting and developing vocational training and education at Community level. Tasks — To compile selected documentation and produce a data analysis; — to contribute to research development and coordination; — to utilise and disseminate relevant information; — to encourage and support a concerted approach to matters relating to the development of vocational training; — to provide a forum for a broad and diverse public. 1. Management Board Per Member State: — one Government representative; — one representative of employers' organisations; — one representative of employees' organisations. Three members representing the Commission, and observers from the associated countries (Norway and Iceland). 2. Director Appointed by the Commission from a list of candidates submitted by the Management Board; carries out the decisions of the Management Board and is responsible for the day-to-day administration of the Centre. 3. Internal control Commission's Internal Audit Service. 4. External audit European Court of Auditors. 5. Discharge Parliament, on the Council's recommendation. Budget: 16,6 million euro (14,7 million euro). Community contribution: 97 % (99 %) Staff numbers at 31 December 2004: Number of posts in establishment plan: 88 (83) Posts occupied: 81 (79) + 56 (46) other staff (auxiliary contracts, seconded national experts, local employees and employment agency staff) Total staff: 137 (125), assigned to the following duties: operational: 74 (66) administrative: 40 (38) mixed: 23 (21) Conferences and seminars: 90 (72) Studies: 55 (65) Projects: 38 (23) Participation in: Copenhagen Process, e-learning Programme, Leonardo da Vinci Programme, social partners' joint action framework. Publications: 62 (28) publications 3 issues of Cedefop info, 3 issues of the European vocational training review. Circulation of documents: 10 293(10 244) on request, 2 034(2 346) electronic newsletter subscriptions, 8 460(8 523) subscriptions to Cedefop info. Maintenance and development of the 'European Training Village' site, on which over 53 000 people are registered, with virtual communities of 8 000 participants. Participants in the study visits programme: 730 (773) Source: Information supplied by the Centre.

Table 2 European Centre for the Development of Vocational Training — 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 received Allocation of expenditure Appropriations for the financial year Appropriations carried over from the previous financial year entered committed paid carried over cancelled available committed paid carried over cancelled Commission subsidy 15 800 (1) 13 700 Title I Miscellaneous revenue 72 42 Staff (NDA) 9 243 9 045 8 579 466 197 443 0 393 0 50 Phare assigned revenue 315 277 Title II Third-country assigned revenue 359 359 Administration (NDA) 1 395 1 310 768 542 85 358 0 352 0 6 Other assigned revenue 0 88 Title III Operating activities (DA) — CA 5 234 5 234 — — — — — — — — — PA 3 062 — 2 508 — 554 3 138 — 2 702 — 436 Assigned revenue 724 724 415 309 0 382 382 319 63 — 16 546 14 466 Total CA 16 596 16 313 — — 282 1 183 382 — — 56 Total PA 14 424 — 12 270 1 317 836 4 321 — 3 766 63 492 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 Centre — This table summarises the data provided by the Centre in its annual accounts.

Table 3 European Centre for the Development of Vocational Training — Revenue and expenditure account for the financial years 2004 and 2003 (1000 euro) 2004 2003 Revenue Commission subsidies 13 700 14 500 Assigned revenue 724 792 Miscellaneous revenue 42 3 Total revenue (a) 14 466 15 295 Budgetary expenditure for the financial year Staff — Title I of the budget Payments 8 579 7 554 Appropriations carried over 466 443 Administration — Title II of the budget Payments 768 778 Appropriations carried over 542 358 Operating activities — Title III of the budget (except for assigned revenue) Payments against payment appropriations for the financial year 2 508 2 381 Payments against outstanding commitments at 31.12.2003 2 702 Appropriations carried over 3 138 Assigned revenue (PHARE and third countries) Payments 415 546 Appropriations carried over 309 246 Total expenditure (b) 16 289 15 444 Outturn for the financial year (a – b) –1 823 – 149 Balance carried over from the previous financial year – 993 – 545 N-1 appropriations carried over and cancelled (Title I and II non-differentiated appropriations) 56 399 Neutralisation of N-1 carry-over for Title III connected with changeover to differentiated appropriations 3 138 — Sums for re-use from the previous financial year not used 1 10 Refunds to the Commission 0 – 716 Exchange-rate differences –4 8 Balance for the financial year 375 – 993 Source: Information supplied by the Centre — This table summarises the data provided by the Centre in its annual accounts.

Table 4 European Centre for the Development of Vocational Training — Balance sheet at 31 December 2004 and 31 December 2003 (1000 euro) Assets 2004 2003 Liabilities 2004 2003 Fixed assets Fixed capital Intangible fixed assets 183 14 Own capital 5 702 5 704 Buildings 5 059 5 179 Balance for the financial year 375 – 993 Equipment and furniture 455 471 Subtotal 6 077 4 711 Financial fixed assets, guarantee 5 5 Current liabilities Subtotal 5 702 5 669 Assigned revenue not received — 315 Stocks Appropriations carried over against Titles I, II and III 1 008 3 939 Office supplies — 35 Appropriations carried over against assigned revenue 372 382 Subtotal — 35 Sundry accounts payable 89 86 Long-term assets VAT/other taxes 91 90 Staff loans — 3 Bank interest to be returned to the EU 148 64 Subtotal — 3 Subtotal 1 708 4 876 Current assets Suspense accounts Commission — 315 Sums to be reused — 157 Other advances 26 37 Subtotal — 157 Recoverable VAT 34 34 Sundry accounts receivable 74 81 Subtotal 134 467 Cash accounts Banks 1 905 3 532 Cash 3 5 Imprest account 41 33 Subtotal 1 949 3 570 Total 7 785 9 744 Total 7 785 9 744 Source: Information supplied by the Centre — This table summarises the data provided by the Centre in its annual accounts. (1) This is the amount published in the Official Journal and represents the total amount of commitment appropriations allocated to Cedefop in the Commission's budget. In the annual accounts published by the Centre, it preferred to report the amount of the corresponding payment appropriations (13 700 000 euro). 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 Centre — This table summarises the data provided by the Centre in its annual accounts.