4.3.81 Official Journal of the European Communities No C 45/3 
II 
(Preparatory Acts) 
COURT OF AUDITORS 
OPINION OF THE COURT OF AUDITORS 
on the draft financial regulation applicable to the fitth European Development Fund 
THE COURT OF AUDITORS OF THE 
EUROPEAN COMMUNITIES, 
Having regard to the Treaty estabishing the 
European Economic Community and in particular 
Article 206a thereof; 
Having regard to the Council Decision of 28 October 
1980 to consult the Court of Auditors on the draft 
financial regulation applicable to the fifth European 
Development Fund, which is the subject of document 
COM (80) 578 final; 
I. The legal instruments of the EDF as Community 
legislation 
£>5,4Whereas the ACP—EEC Convention of 31 
October 1979 was signed by all the ACP States, the 
Member States of the Community and the Council of 
the Communities; 
Whereas the Convention was concluded by reference 
to the Treaty estabilshing the European Economic 
Community; 
Whereas by a Council Regulation of 25 November 
1980 the ACP-EEC Convention and the protocols 
annexed thereto were approved in the name of the 
Community by express reference to Article 238 of the 
EEC Treaty; 
Whereas the new Article 206a of the EEC Treaty no 
longer mentions the revenue and expenditure of the 
budget, but expressly instructs the Court to examine 
'all revenue and expenditure of the Community' and 
'of all bodies set up by the Community insofar as the 
relevant constituent instrument does not preclude 
such examination'; Whereas in accordance with the Internal Agreement 
on the financing and administration of Community 
aid, signed on 20 November 1979, discharge of the 
financial management of the Fund is given to the 
Commission by the European Parliament. 
THE COURT: 
1. cannot accept that the exercise of its powers be 
restricted by secondary legislation, such as the 
draft financial regulation submitted for opinion, 
which would be contrary to the clear terms of the 
Treaty as ratified under the provisions of Article 
236 of the Treaty. 
II. The EDF expenditure as Community expenditure 
Whereas the financial operations of the EDF are in 
fact Community expenditure since they pursue the 
same development objectives as all the other measures 
in the general budget for the benefit of associated or 
non-associated countries, are managed by 
Community bodies and are subject to the power of 
discharge of the Parliament; 
Whereas, by reason of the fact that the expenditure 
of the EDF is Community expenditure, regard must 
be had to the principle of the unity of Community 
expenditure and whereas this principle is impaired 
when the activities connected with the 
implementation of Community policy on development 
cooperation in favour of ACP countries employ 
instruments which are different from those applied to 
all the other measures for the benefit of developing 
countries, governed by the Financial Regulation of 21 
December 1977 applicable to the general budget of 
the European Communities; 
No C 45/4 Official Journal of the European Communities 4.3.81 
Whereas derogations from the Financial Regualtion 
applicable to the general budget of the Communities 
should be limited to those strictly necessary to take 
account of the special character of the ACP-EEC 
Convention. 
THE COURT: 
2. regrets that the Financial Regulation applicable to 
the fourth EDF was not amended following the 
adoption on .21 December 1977 of a new Financial 
Regulation applicable to the general budget of the 
Communities, contrary to the Council declaration 
of 1976 whereby it was agreed that in the event 
that, following the entry into force of the 'Treaty 
amending certain financial provisions of the 
Treaties establishing the European Communities 
and the Treaty establishing a single Council and a 
single Commission of the European Communities,' 
amendments were made to the provisions of the 
Financial Regulation applicable to the general 
budget of the European Communities in respect of 
the presenting and auditing of accounts, section 
IX of the Financial Regulation applicable to the 
fourth EDF would be adapted accordingly; 
3. considers that certain provisions of the draft 
financial regulation are inadequate and that this 
draft should be both harmonized with the 
Financial Regulation applicable to the general 
budget of the Communities, from which it departs 
on numerous occasions, and supplemented by 
special provisions, having regard for the special 
character of the European Development Fund; 
in particular: 
(a) with regard to harmonization with the 
Financial Regulation applicable to the general 
budget of the Communities: 
— the provisions relating to the accounts 
(Articles 40 and 41 of the draft financial 
regulation) should be supplemented by 
definitions similar to those in the Financial 
Regulation applicable to the general budget 
of the Communities (Article 5 (3) and (4), 
Articles 63, 64, 65, 66 and 67); 
(b) with regard to the special character of the 
Fund: 
— provision should be made for the supp­
orting documents referred to in Article 21 
(4) of the draft financial regulation to be 
kept until the end of the year following 
that in which the Fund is finally closed. III. The audit powers of the Court of Auditors in respect 
of EDF operations, having regard for special character of 
the ACP-EEC Convention 
Whereas in a statement annexed to the 'Treaty 
amending certain financial provisions of the Treaty' 
published in the Official Journal of the European 
Communities of 31 December 1977 'it is agreed that 
the Court of Auditors shall have jurisdiction to audit 
the operations of the European Development Fund'; 
Whereas this power is versted in the Court by virtue 
of a Treaty ratified by the Member States; 
Whereas the audit power of the Court is exercised in 
accordance with the provisions of Article 206a of the 
Treaty and there can be no question therefore of its 
being reduced or qualified by a subsequent act, 
internal agreement, financial regulation or other 
measure; 
Whereas the audit methods to be used by the Court 
must necessarily reflect the special character of the 
ACP—EEC Convention; 
Whereas account should be taken in particular of the 
principle of division of responsibility between donors 
and recipients of Community financing, in pursuit of 
the aim of increasing the responsibilities of the ACP 
States in the administration and management of the 
aid; 
Whereas, however, regard for such aspects cannot 
exempt the activities of the bodies of the Community 
as principal authorizing officer, financial controller 
and accounting officer from the audit of the Court of 
Auditors upon the criteria and in accordance with the 
provisions laid down in Article 206a of the Treaty. 
THE COURT: 
4. finds that the section 'Presenting and Auditing 
Accounts' in Articles 66 and 67 of the draft regu­
lation, fails to recognize the full extent of the audit 
powers vested in the Court of Auditors by virtue 
of the Treaty of 22 July 1975; 
5. notes in particular that Article 67 of the draft 
financial regulation limits its audit power to those 
operations of the European Development Fund 
managed by the Commission, whereas the 
operations that are financed from the resources of 
the Fund but managed by the European 
4.3.81 Official Journal of the European Communities No C 45/5 
Investment Bank which represent an appreciable 
share of the EDF expenditure, are, by the terms of 
this Article, exempt from both its audit and the 
Parliament's power of discharge; definition of the revenue and expenditure account 
and the balance sheet in the manner of Articles 73, 
75 and 76 of the Financial Regulation applicable to 
the general budget of the Communities, 
6. considers that it is essential to make provision in 
Article 66 (1) of the draft financial regulation for 
the submission of the revenue and expenditure 
account, the analysis of the financial management, 
and the balance sheet to the authorities giving 
discharge and the Court of Auditors; 
7. considers it necessary, as in paragraph 2 of Article 
80 of the Financial Regulation applicable to the 
general budget of the Communities, to make 
provision in Article 67 (2) of the draft financial 
regulation for the Court of Auditors to inspect the 
bodies created by the Community for the 
implementation of the Lome Convention and the 
decision on the association of the OCT; 
8. considers that it would be advisable to add to 
Article 66 (1) of the draft financial regulation a 9. considers that it would be advisable, by analogy 
with Article 82 of the Financial Regulation 
applicable to the general budget of the 
Communities, to supplement Article 67 of the draft 
financial regulation as follows: 
(a) to add to paragraph 4, first subparagraph: 'in 
particular all the information available from 
inspections carried out by the Commission in 
accordance with the requirements of 
Community legislation in the departments 
responsible for the management of the 
Community's finances and for effecting 
expenditure on its behalf; 
(b) to add to paragraph 4, second subparagraph: 
'all inventories, all lists of posts in the 
departments which the latter deems necessary'. 
This opinion was adopted by the Court of Auditors at its meeting of 9 December 1980. 
For the Court of Auditors 
of the European Communities 
Marcel MART 
Member of the Court of Auditors