EN Official Journal of the European Union C 324/68

REPORT

on the annual accounts of the European Training Foundation for the 2003 financial year together with the Foundation's replies

(2004/C 324/10)

CONTENTS

1 INTRODUCTION

2-5 THE COURT'S OPINION

6-11 OBSERVATIONS

Tables 1 to 4

The Foundation's replies

INTRODUCTION

1. The European Training Foundation (hereinafter called the Foundation) was created by Council Regulation (EEC) No 1360/90 of 7 May 1990 (1). The Foundation's purpose is to support the reform of vocational training in the European Union's partner countries. As such, it assists the Commission in the implementation of various programmes (Phare, Tacis, Cards, Meda). Table 1 summarises the powers and activities of the Foundation on the basis of information supplied by it.

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 Foundation for the financial year ended 31 December 2003. In accordance with Article 11(1) of Council Regulation (EEC) No 1360/90, the budget was implemented on the responsibility of the Director. This responsibility includes the drawing-up and presentation of the accounts (3) in accordance with the internal financial provisions adopted on the bases of Article 12 of the same regulation. The Court of Auditors is required under Article 248 of the Treaty establishing the European Community to examine these accounts.

4. The Court carried out the audit in accordance with its auditing policies and standards, which are adapted from international standards to reflect the Community context.

5. The Court has thus obtained reasonable assurance that the annual accounts for the year ended 31 December 2003 are reliable and that the underlying transactions, taken as a whole, are legal and regular. The content of the following observations does not call the opinion expressed by the Court in this report into question.

OBSERVATIONS

6. Table 2 shows the implementation of appropriations for the 2003 financial year and of appropriations carried over from the previous financial year. The Foundation's revenue and expenditure account and the balance sheet for the financial year 2003 are summarised in Tables 3 and 4.

7. On the basis of agreements concluded with the Commission, the Foundation manages Tempus programmes which also include technical assistance. In 2003, the Foundation made payments of 23,1 million euro on behalf of the Commission for those programmes and, on 31 December 2003, the balance of the relevant bank accounts amounted to 24,2 million euro. About 20 % of the staff employed by the Foundation work full-time on these programmes. As the Court mentioned in previous reports (4), no data relating to these programmes appear in the budget or in the balance sheet; the Foundation presents the relevant financial information in an annex to its annual accounts. This does not comply with the budgetary principles of unity and accuracy (5).

8. In 2003 the Foundation concluded two agreements with donors (total amount 0,5 million euro). These agreements are correctly disclosed in the accounts but the Foundation did not produce a supplementary and amending budget.

9. Due to payment delays by the Commission, the Foundation was unable to meet its financial commitments. The Foundation had to make in November 2003 a temporary transfer of 1 million euro from bank accounts dedicated to the Tempus programme to its own bank accounts. This operation was done without informing either the Governing Board, or the Commission.

10. In accordance with Article 43(1) of the Foundation's financial regulation, the accounting officer is required to validate the systems put in place by the authorising officer on accounting information. This validation did not take place during the financial year.

11. An analysis of five selection procedures showed that the process for selecting candidates for the interview (pre-selection phase) is not formalised in a transparent way. In many cases the selection criteria are neither laid down before the interview, nor is their use documented in the files.

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 131, 23.5.1990

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

(3) As required under Article 83(3) of the Foundation's financial regulation, the final accounts for the financial year 2003 were drawn up on September 8 2004 and forwarded to the Court of Auditors, which received them on September 20 2004. A summarised version of the accounts is presented in the tables annexed to this report.

(4) Paragraph 9 of the report concerning the financial year 2002 (OJ C 319, 30.12.2003, p. 48), see also paragraph 8 of the report concerning the financial year 2001 (OJ C 326, 27.12.2002, p. 51) and paragraph 11 of the report concerning the financial year 1999 (OJ C 373, 27.12.2000, p. 34).

(5) Article 6 of the Foundation's financial regulation.

Table 1 European Training Foundation (Torino) Competences following the Treaty Competences following the Council's Regulation (CEE) No 1360/90 of 7 May 1990 Governance Means available to the Foundation (figures for 2002) Products The Community shall carry out, within its spheres of competence, economic, financial and technical cooperation measures with third countries. Such measures shall be complementary to those carried out by the Member States and consistent with the development policy of the Community. (Article 181 A) Objectives — Contribute to the provision of training assistance to the countries of Central and Eastern Europe and Mongolia, to some countries of the Balkans area and to the countries and territories eligible to the MEDA programmes — Promote the coordination of the assistance given to eligible countries. Tasks — Assistance to define the needs and priorities for training — Provision of informations on initiatives and future needs — Financing pilots projects — Implementation of programmes of the Commission in eligible countries. Governing board — One representative of each Member State. — Two representatives of the Commission Director — Appointed by the Governing board on a proposal of the Commission Advisory forum — Appointed by the Governing board, — Two experts from each Member State, — Two experts from each eligible country, — Two experts from the social partners at European level, Financial external control European Court of Auditors Discharge European Parliament on recommendation of the Council. Budget: EUR 17,2 mio (EUR 16,8 mio) entirely financed by the Commission. Staff at 31 of december 2003: — 104 (130) posts in the establishment plan of which 99 (94) posts occupied — 31 (35) other employees (auxiliaries, national experts, interimaires) Total staff occupied: 130 (129) of which employed for: — operational tasks: 80 (78) — administrative tasks: 35 (33) — mixed tasks: 15 (18). Assistance to the Commission: ETF support covers a wide range of areas including: initial vocational education; lifelong learning; continuing (adult) training; human resource development in companies; employment policies; training of unmployed people; poverty alleviation and social inclusion and training to encourage local development. Network of observatories in eligible countries: Country sector studies, statistics on education, policy advice to countries. Technical Assistance conventions with Cards, Meda and Tacis for Tempus scheme covering: — Joint European Projects (JEP): applications received 507; funded 129 — Structural and Complementary Measures (SCM) applications received 36; funded 12 — Individual Mobility Grants applications received 1 246; funded 286. Management of activities of Tempus covers the standard functions of contract management, desk monitoring and overall support to projects in progress. 1 149 annual grants were issued to run Tempus projects and 255 reports were assessed. Several hundred Tempus projects received support and advice. Source:Information provided by the Foundation.

Table 2 European Training Foundation — 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 Appropriations available entered committed paid carried over cancelled commitments outstanding paid cancelled Appropriations committed paid carried over cancelled Community subsidies 17,2 18,1 Title I Staff 11,2 11,1 10,8 0,3 0,1 0,2 0,2 0,0 11,4 11,3 11,0 0,3 0,1 Other subsidies 0,0 0,5 Title II Administration 1,4 1,4 1,1 0,3 0,0 0,6 0,5 0,1 2,0 2,0 1,6 0,3 0,1 Other revenue (1) 0,0 Title III Operating activities 4,6 4,5 3,4 1,1 0,1 2,6 2,3 0,3 7,2 7,1 5,7 1,1 0,4 Earmaked revenues (1) 0,5 0,5 0,2 0,3 0,0 0,3 0,3 0,0 0,8 0,5 0,5 0,3 0,0 Total 17,2 18,6 Total 17,7 17,5 15,5 2,0 0,2 3,7 3,3 0,4 21,4 20,9 18,8 2,0 0,6 NB:Any discrepancies in totals are due to the effects of rounding. Source:Foundation data. This table summarise the data supplied by the Foundation in its own accounts.

Table 3 European Training Foundation — Revenue and expenditure account for the financial years 2003 and 2002 (2) (1000 euro) 2003 2002 Revenue Commission subsidies 18 100 13 179 Other donors 523 — Miscellaneous revenue 17 23 Financial revenue — 140 Total revenue (a) 18 640 13 342 Expenditure Staff — Title I of the budget Payments 10 771 10 153 Appropriations carried over 329 215 Administration — Title II of the budget Payments 1 076 805 Appropriations carried over 310 559 Operating activities — Title III of the budget Payments 3 396 2 307 Appropriations carried over 1 087 2 591 Earmarked revenues Payments 237 — Appropriations carried over 286 — Total expenditure (b) 17 492 16 631 Outturn for the financial year(a – b) 1 148 –3 289 Balance carried over from the previous financial year –2 155 4 055 Appropriations carried over and cancelled 375 424 Reimbursements to the Commission – 703 –3 352 Exchange-rate differences 17 6 Balance for the financial year –1 318 –2 155 Source:Foundation data. This table summarise the date supplied by the Foundation in its own accounts.

Table 4 European Training Foundation — Balance sheet at 31 December 2003 and 31 December 2002 (3) (1000 euro) Assets 2003 2002 Liabilities 2003 2002 Intangible fixed assets (4) Fixed capital Occupational rights 5 000 5 000 Own capital 3 852 4 059 Software licences 146 — Balance for the financial year –1 318 –2 155 Depreciation –1 611 –1 333 Subtotal 2 534 1 904 Subtotal 3 535 3 667 Current liabilities Tangible fixed assets Automatic carry-overs of appropriations 1 726 3 366 Equipment and furniture 273 618 Automatic carry-overs of earmarked revenues 286 273 Computer equipment 1 438 1 235 Other contributors 30 85 Depreciation –1 444 –1 521 Sundry accounts payable 1 28 Subtotal 267 332 Deferred revenue 83 3 537 Stocks Subtotal 2 126 7 289 Office equipment 50 60 Subtotal 50 60 Current assets Commission subsidy receivable 0 3 366 Other advances 4 2 Recovery orders 43 171 Sundry accounts receivable 39 30 Subtotal 86 3 569 Cash accounts Bank accounts 719 1 524 Imprest account 3 41 Subtotal 722 1 565 Total 4 660 9 193 Total 4 660 9 193 Source:Foundation data. This table summarise the date supplied by the Foundation in its own accounts. (1) Earmarked revenues have not been included in the budget (see paragraph 8 of the report). NB:Any discrepancies in totals are due to the effects of rounding. Source:Foundation data. This table summarise the data supplied by the Foundation in its own accounts. (2) The revenue and expenditure account and balance sheet only take account of the Foundation's specific activities: they do not include programmes managed on behalf of the Commission. Source:Foundation data. This table summarise the date supplied by the Foundation in its own accounts. (3) The revenue and expenditure account and balance sheet only take account of the Foundation's specific activities: they don't include programmes managed on behalf of the Commission. (4) The Foundation paid to the owner of its building five millions euros for its renovation. This payment gives the Foundation the right to use the building for one euro per year during 30 years from 1995 on. This item has been taken into account for the first time in 2003. The figure for year 2002 has been restated accordingly. Source:Foundation data. This table summarise the date supplied by the Foundation in its own accounts.