EN Official Journal of the European Union C 324/83

REPORT

on the annual accounts of the European Monitoring Centre for Drugs and Drug Addiction for the 2003 financial year together with the Monitoring Centre's replies

(2004/C 324/12)

CONTENTS

1 INTRODUCTION

2-5 THE COURT'S OPINION

6-11 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 objective 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 competencies and activities on the basis of information received from 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 Monitoring Centre for the financial year ended 31 December 2003. In accordance with Article 11 of Council Regulation (EEC) No 302/93, the budget was implemented on the responsibility of the Director. This responsibility included the drawing-up and presentation of the accounts (3) in accordance with the internal financial provisions adopted under the same article. The Court of Auditors is required under Article 248 of the Treaty establishing the European Community to audit these accounts.

4. The Court carried out its audit in accordance with its auditing policies and standards, which have been adapted from generally accepted international auditing standards to reflect the specific nature of the Community context. The Court carried out such tests on the accounting records and applied such other procedures as it deemed necessary in the circumstances.

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 observations which follow do not call into question the audit opinion expressed by the Court in this report.

OBSERVATIONS

6. The implementation of the appropriations for the 2003 financial year and of the appropriations carried over from the previous financial year is shown in Table 2. The Monitoring Centre's revenue and expenditure account and balance sheet for the financial year 2003 are presented in summary form in Tables 3 and 4.

7. The duties of Authorising Officer for the greater part of the Monitoring Centre's budget (Titles I and II) and of the ex ante Controller for the entire budget are performed by just one person, who also carries out the duties of Head of Administration and of Quality Control. This combination of responsibilities significantly undermines internal control, which is based in particular on the principle of segregation of duties.

8. Following the adoption of its new financial regulation (4), the Monitoring Centre issued in-house instructions for checking commitments, payments and recoveries. However, the files do not contain documents enabling the Authorising Officer to obtain assurance that all these instructions have actually been followed.

9. Article 42(1)(e) of the Monitoring Centre's financial regulation provides that the Accounting Officer should validate the systems laid down by the Authorising Officer and intended to provide or substantiate accounting information. This validation had still not been carried out at the end of the 2003 financial year.

10. Under its annual work programme, the Monitoring Centre concludes contracts with national centres. The deadline for the performance of these contracts is fixed at 31 December. The contracts for the 2003 programme (1,5 million euro in total) were not signed until July 2003. In May 2004, no final payments had yet been made in respect of the scheduled work and no additional clauses extending the length of the contracts had been signed. Moreover, the 2004 programme contracts had already been concluded. As regards renewal of these types of contract, due consideration should be given to the real progress achieved in the work requested the year before and to an evaluation of its quality.

11. In its reply (5) to the Court's annual report concerning the 2002 financial year, the Monitoring Centre stated that a physical inventory would be carried out by the end of 2003. This had still not been done by the end of the first quarter of 2004. In addition, there is still no document that clearly defines the responsibilities and procedures regarding the inventory.

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 36, 12.2.1993. Regulation amended by Regulation (EC) No 3294/94 of 22 December 1994 (OJ L 341, 30.12.1994, p. 7) and Regulation (EC) No 1651/2003 of 18 June 2003 (OJ L 245, 29.9.2003).

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

(3) As required under Article 82 of Commission Regulation (EC) No 2343/2002, the Monitoring Centre's final accounts for the 2003 financial year were drawn up on 15 September 2004 and forwarded to the Court of Auditors. They were received by the Court on 21 September 2004. A summarised version of these accounts is presented in the tables annexed to this report.

(4) Adopted by the Management Board at the meeting of 15 to 17 January 2003.

(5) OJ C 319, 30.12.2003, p. 68, paragraph 11.

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 2003 (2002 data) Products and services supplied in 2003 The Community complements the Member States' action in reducing drugs-related health damage, including information and prevention. (Article 152 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 the following: (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 (1) To collect and analyse the data (2) To make enquiries and carry out preparatory actions (3) To ensure that European-level data are more reliable (4) To publish reliable information (5) To improve coordination between the national and Community actions (6) 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: Court of Auditors. 5. Discharge: European Parliament on the Council's recommendation. Budget: 10,45 million euro (10,36 million euro) Community subsidy: 89 % (87 %) Staff numbers as at 31 December 2003: Number of posts in establishment plan: 63 (59) Posts occupied: 54 (57) +18 (16) other staff (auxiliary contracts, seconded national experts, local staff, employment-agency staff) Total staff: 72 (73) assigned to the following duties: operational: 46,5 (46) administrative: 18 (19) mixed: 7,5 (8) 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 General report of activities (annual) Bi-monthly newsletter (Drugnet Europe) Bi-monthly briefings (Drugs in focus). Source:information supplied by the Monitoring Centre.

Table 2 European Monitoring Centre for Drugs and Drugs Addiction — Implementation of the budget for the 2003 financial year (million euro) Revenue Expenditure Origin of revenue Revenue entered in the final budget for the financial year Revenue collected Expenditure allocation Appropriations in the final budget Appropriations carried over from the previous financial year Available appropriations (2003 budget and financial year 2002) entered committed paid carried over cancelled outstanding commitments paid cancelled appropriations committed paid carried over cancelled Community subsidies 9,3 9,3 Title I Staff 5,4 5,3 5,2 0,1 0,0 0,1 0,1 0,0 5,5 5,4 5,3 0,1 0,0 Phare subsidies 0,5 0,3 Title II Administration 0,9 0,9 0,6 0,3 0,1 0,5 0,5 0,0 1,4 1,4 1,0 0,3 0,1 Other subsidies 0,4 0,4 Title III Operating expenditure 4,0 4,0 2,3 1,7 0,0 1,0 0,8 0,2 5,0 5,0 3,1 1,7 0,2 Other revenue 0,0 0,1 Total 10,2 10,1 Total 10,2 10,2 8,1 2,0 0,1 1,6 1,4 0,2 11,8 11,8 9,5 2,0 0,3 NB:The totals may contain differences due to rounding. Source:Data from the Monitoring Centre. These tables summarise the data provided by the Monitoring Centre in its own accounts.

Table 3 European Monitoring Centre for Drugs and Drug Addiction — Revenue and expenditure account for the financial years 2003 and 2002 (1000 euro) 2003 2002 Revenue Commission subsidies 9 300 9 000 Subsidies from Norway 421 413 Phare subsidies 334 735 Other revenue 67 133 Total revenue (a) 10 122 10 280 Expenditure Staff — Title I of the budget Payments 5 240 4 951 Appropriations carried over 88 80 Administration — Title II of the budget Payments 558 632 Appropriations carried over 272 509 Operating expenditure — Title III of the budget Payments 2 281 2 525 Appropriations carried over 1 679 1 001 Total expenditure (b) 10 117 9 698 Outturn for the financial year (a – b) 5 582 Balance carried over from the previous financial year 1 626 639 Appropriations carried over and cancelled 221 392 Sums for reuse from the previous financial year not used 21 9 Refunds to the Commission –1 584 — Exchange-rate differences 6 3 Balance for the financial year 295 1 626 NB:The totals may include differences due to rounding. Source:Data from the Monitoring Centre.

Table 4 European Monitoring Centre for Drugs and Drug Addiction — Balance sheet at 31 December 2003 and 31 December 2002 (1000 euro) Assets 2003 2002 Liabilities 2003 2002 Fixed assets Fixed capital Intangible fixed assets 94 66 Own capital 3 057 2 797 Buildings 3 559 3 559 Balance for the financial year 295 1 626 Equipment and furniture 157 152 Computer equipment 659 785 Vehicles 50 74 Depreciation –1 496 –1 867 Subtotal 3 352 4 423 Current liabilities Subtotal 3 023 2 768 Automatic carry-overs 1 815 1 377 Stocks 34 28 Non-automatic carry-overs — 212 Phare carry-overs 223 — Current assets Sundry accounts payable 18 18 Recoverable VAT 94 84 Recovery orders (1) 55 101 Sundry accounts receivable 66 18 Advances 78 — Subtotal 238 101 Subtotal 2 111 1 709 Cash accounts Suspense accounts Bank accounts 2 291 3 474 Sums to be reused — 265 Imprest account 0 4 Deferred revenue 123 4 Subtotal 123 269 Subtotal 2 291 3 478 Suspense accounts 0 24 Total 5 586 6 400 Total 5 586 6 400 NB:The totals may include differences due to rounding. Source:Data from the Monitoring Centre. These tables summarise the data provided by the Monitoring Centre in its own accounts. (1) Recovery orders issued, but not yet collected, that have not yet resulted in the entering of appropriations for reuse. NB:The totals may include differences due to rounding. Source:Data from the Monitoring Centre. These tables summarise the data provided by the Monitoring Centre in its own accounts.