No C 139/20 Official  Journal  of the European  Communities 5. 6. 79 
Opinion  of the Court  of Auditors  relating  to the Financial  Regulation  of 21 December  1977 
applicable  to the general  budget  of the European  Communities 
THE  COURT  OF  AUDITORS  OF  THE  EUROPEAN 
COMMUNITIES, 
Having  regard  to  Article  78  (i)  of  the  Treaty 
establishing  the  European  Coal  and  Steel  Community, 
Article  209  of the  Treaty  establishing  the  European 
Economic  Community  and  Article  183  of the  Treaty 
establishing  the European  Atomic  Energy  Community, 
Having  regard  to the  opinion  of the  President  of the 
Council  of 14 November  1977  on the  provisions  of the 
Financial  Regulation  relating  to the Court  of Auditors, 
Having  regard  to the  partial  opinion  of the  Court  of 
Auditors  on Articles  85 to 91 (auditing  of accounts)  of 
the draft  Financial  Regulation  forwarded  by  the 
President  of the Council  in a letter  of 2 December  1977 
reserving  expressly  the subsequent  opinion  of the Court 
of Auditors  on the draft  Financial  Regulation, 
Having  regard  to the  Financial  Regulation  of 21 
December  1977  laying  down  the  revision  of the  whole 
of the  provisions  of the  said  Regulation  as soon  as the 
additional  opinion  of the Court  of Auditors  is available, 
Having  regard  to Article  108  (2)  of the  Financial 
Regulation  of 21 December  1977  which  stipulates  that 
the provisions  of  the  said  Regulation  shall  be 
re-examined,  in accordance  with  the  procedures  laid 
down  to this  end  by the  Treaties,  after  the  Court  of 
Auditors  has  drawn  up an opinion  in respect  of them, 
HAS  ADOPTED  THE  FOLLOWING  OPINION: 
Firstly  the  Court  considers  that  the  word  'approval'  of 
the Regulation  should  be completed  by  the  phrase 
'considering  the opinion  of the  Court  of Auditors'  and 
that consequently  there  is no  reason  for  keeping 
'whereas'  referring  to the partial  opinion  already  given. 
TITLE  I 
General  principles 
Article  1 
The Court  states  that  Article  1, third  subparagraph, 
does  not restrict  in any  way  the institutions'  expenditure activities.  Consequently,  the  provision  should  be 
completed  by the following: 
'The  abovementioned  expenditure  may  not  involve 
activities  other  than  those  arising  from  the  tasks 
conferred  upon  the  institutions  by the  Treaties  or 
the acts  adopted  by virtue  of the latter.' 
Article  10 
The Court  considers  that  in addition  to the  provisions 
contained  in  the  Financial  Regulation,  specific 
legislation  on  the  application  of the  EUA  to the 
measures  adopted  by the  European  Communities  is in 
the process  of  being  drawn  up.  Therefore  the 
fragmentary  nature  of the  normative  system  of EUA 
underlines  the need  for coordination  in this  subject. 
In addition  to this  general  requirement,  the  Court 
considers  that  the  idea  of 'sum  of the  amounts' 
contained  in paragraph  1 should  be replaced  by the 
more  precise  'whole  of the  amounts',  contained  in the 
draft  Regulation  on EUA. 
Moreover  the Court  considers  that  the present  provision 
should  be completed  by the introduction  of a periodical 
adjustment  mechanism  of the  sums  referred  to in this 
Article. 
With  regard  to the  determination  of the  value  of EUA 
by the  Commission  it would  seem  preferable  to delete 
the note  at the  foot  of the page  which  merely  refers  to 
'OJ No  C 21,  30.  1. 1976'  (incomplete  reference  since 
the initial  communication  from  the  Commission  was 
amended  on several  occasions)  and  to point  out  directly 
in the  text  that  'the  calculating  method  should  be 
covered  by  appropriate  provisions  taken  by  the 
Commission  and  published  in the Official  Journal  of the 
European  Communities'. 
TITLE  II 
Presentation  and  structure  of the budget 
Article  15 
The Court  notes  that  paragraph  2 lays  down  the 
classification  of revenue  and  expenditure  under  titles, 
chapters,  articles  and  items  and  that  paragraph  3 
5. 6. 79 Official  Journal  of the European  Communities No C 139/21 
stipulates  that  the  budgetary  nomenclature  shall  be 
decided  in respect  of the apportionment  of the revenue 
and expenditure  under  separate  titles,  chapters  and 
articles,  during  the budgetary  procedure. 
In the light  of these  provisions,  it is not obvious  if the 
appointment  under  items  is included  in the budgetary 
nomenclature  and  if it represents  a restriction  above  all 
with  regard  to the transfers  under  Article  21. 
In the Court's  opinion  the provisions  in question  require 
explanation. 
TITLE  III 
Implementation  of the budget 
Article  18 
The Court  considers  that  the  rule  preventing  the 
delegation  of powers  with  regard  to the  decision  to 
ignore  the authority  of the Financial  Controller  should 
be completed  by a reference  to Articles  23 and  24 which 
also deal  with  decisions  of the same  type. 
Article  20 
Article  20,  fourth  subparagraph,  lays  down  that  the 
assistant  accounting  officers  shall  be appointed  'under 
the same  conditions'  as the accounting  officer,  without 
the details  being  given  of the procedure  to be followed 
for their  nomination  (for  example,  on the  basis  of a 
proposal  drawn  up by the accountant  etc.). 
The Court  stresses  the  need  here  for  more  specific 
legislation  on the  subject,  all the  more  since  it is a 
question  of officials  subject  to direct  authority  and 
unlike  the  provisions  laid  down  for  the  financial 
controllers  there  is no mention  of the detailed  rules  for 
the implementation  of the  establishment  of particular 
rules  on this  subject. 
Similarly,  in order  to have  adequate  information  on the 
measures  adopted  by the institutions  with  regard  to the 
accounting  officers  themselves,  the  provisions  of the 
present  article  should  be completed  in a similar  way  to 
those  laid  down  for the financial  controllers  (Article  19, 
fourth  subparagraph). 
Article  24 (2) 
The Court  recommends  inserting  the  word  'reasoned' 
before  the words  'proposal  for cancellation'. Article  32 (3) 
The Court  proposes  the omission  of the phrase  'in terms 
of actual  needs'  which  may  appear  as a condition  for 
the exact  accounting  of  commitments  and 
authorizations. 
Article  37 (2),  second  subparagraph 
This  subparagraph  should  read  as follows: 
'However,  the  documents  relating  to transactions 
not finally  closed  shall  be kept  for longer  than  this 
period  and  until  the close  of the year  following  that 
of the closure  of the said  transactions.' 
TITLE  IV 
Conclusion  of contracts,  inventories,  accountancy 
Article  SO  (2) 
In order  to give  the invitations  to tender  the  required 
publicity  in the  Communities,  the  Court  considers  it 
necessary  to publish  them  in the  supplement  to the 
Official  Journal  of the European  Communities,  as  the 
notice  of contracts  and  the concessions  for public  works 
and supplies  in accordance  with  Council  Directive 
71/305/EEC  of 26 July  1971  completed  by Council 
Directive  72/277/EEC  of 26 July  1972  and  Directive 
77/62/EEC  of 21 December  1976. 
Article  52 
Contracts  may  be made  by private  treaty  under  point  (c) 
where  the  automatic  public  tendering  or discretionary 
tendering  procedures  do not  give  any  result  or where 
the prices  quoted  are not acceptable. 
It could  be  stated  that  under  these  circumstances 
contracts  may  only  be made  by private  treaty  if the 
initial  market  conditions  have  not  been  fundamentally 
amended. 
Article  57 
This  Article  lays  down  the  possibility  of recourse  to a 
simplified  procedure  (simple  invoice  or memo)  for 
certain  'contracts  for the supply  of goods  and  services'. 
Whereas,  under  Article  50 (1),  third  subparagraph,  the 
simplified  procedure  is only  intended  for the 'purchases' 
No C 139/22 Official  Journal  of the European  Communities 5. 6. 79 
and there  is thus  a discrepancy  in the wording  of the 
two Articles. 
Article  58 
The Court  states  that  the  measures  with  which  the 
institutions  must  comply  should  not  only  be those  in 
respect  of public  works,  as mentioned  in the Article,  but 
those  in respect  of supply  contracts  (Council  Directive 
77/62/EEC  of 21 December  1976). 
Since  the  said  measures  differ  in several  places  from 
those  laid  down  by  this  section  of the  Financial 
Regulation,  the Court  proposes  to amend  the initial  part 
of this  Article  in the following  way:  'On  the awarding 
of contracts  referred  to in this  Financial  Regulation  each 
institution,  without  prejudice  to the  provisions  laid 
down  by this  Regulation,  shall  comply  etc.  .. .'. 
Article  61, third  subparagraph 
The making  available  without  charge  by the institutions 
of immovable  property  or large  installations  should  be 
provided  with  adequate  restrictions;  for example,  such 
availability  should  be made  subject  to the utilization  of 
immovable  property  or large  installations,  by  the 
beneficiary  who  shall  contribute  to the realization  of the 
objectives  of the  institutions  (research,  distribution  of 
knowledge  etc.).  The  Court  should  also  be informed  of 
the operations  of this  kind  in order  to be able  to ensure 
the observance  of the principle  of the soundness  of the 
financial  management. 
TITLE  V 
Responsibilities  of  authorizing  officers,  financial 
controllers,  accounting  officers  and  administrators  of 
advance  funds 
Article  68 
The Court  notes  that  amongst  the cases  in which  the 
authorizing  officer  may  be  rendered  liable  to 
disciplinary  action  for non-observance  of this  regulation 
beside  the  omission  and  the  delay  in the  issuing  of 
recovery  orders,  the omission  or the delay  in the issuing 
of payment  orders,  which  both  may  give  rise to cases  of 
civil liability  for  the  institution  in respect  of third 
parties. 
Article  70 (1),  second  subparagraph 
The accounting  officers  and  assistant  accounting 
officers  shall  render  themselves  liable  to disciplinary action  as regards  any  loss  or deterioration  of the 
monies,  assets  and  documents  in their  charge  where 
such  a loss  or deterioration  result  from  intentional  or 
serious  negligence  on their  part. 
The liabilities  of accounting  officers  as stockholders  is 
thus limited  to the cases  of fraud  or serious  mistake,  i.e. 
practically  the  same  system  as that  applicable  to the 
whole  of the officials  on the basis  of Article  22 of the 
Staff  Regulations  (including  the accounting  officers  in 
their  capacity  as paying  agents)  which  lays  down  the 
making  good  of  any  damage  suffered  by  the 
Communities  as a result  of 'serious  misconduct'. 
It seems  on the contrary,  considering  the special  nature 
of their  duty  that  the accounting  officers  should  have  a 
greater  liability  also  covering  the cases  of light  fault  and 
more  than  the accountants  receiving  advantages  which 
are not  recognized  by other  officials,  i.e. an insurance 
against  financial  risks  and  a guarantee  fund. 
Article  70 (2) 
The comments  drawn  up with  regard  to the accounting 
officers  also  apply  to the administrators  of advances  by 
reason  of the  nature  of the  liability  which  they  are 
required  to take. 
TITLE  VI 
Presenting  and  auditing  accounts 
Article  78 
The second  subparagraph  of the Article,  in laying  down 
that the tasks  delegated  to officials  of the Court  must  be 
specified  and  be limited  to the time  necessary  for their 
completion,  could  impede  the auditing  activities  since  it 
is difficult  to predetermine  the subject  and  the length  of 
the audit. 
The second  subparagraph  of Article  78 should  be 
deleted  since  it conflicts  with  the exercise  of the Court's 
power  to organize  its services. 
Articles  79 and  80 
The reference  to Articles  18 and  19 of Regulation  (EEC) 
No 2891/77  is wrong;  it should  be Articles  17 and  18 
of the same  Regulation. 
5. 6. 79 Official  Journal  of the European  Communities No C 139/23 
TITLE  XI 
Transitional  and  final  provisions 
Article  106 
The implementing  measures  for  the  Financial 
Regulation  often  complete  those  of the Regulation  itself 
and it is thus  important  that  the  Court  of Auditors 
should  be able  to participate  in their  formulation,  like 
the Community  institutions,  who  are  called  upon  to 
give their  prior  opinion  on the said  measures. The Court  also  considers  that  these  implementing 
measures  should  provide  for special  rules  applicable  to 
the Financial  Controller  in  order  to  ensure  the 
implementation  of the  responsibility  of these  officials 
(Articles  19 and  69 of the Financial  Regulation). 
Adopted  on 8 June  1978. 
Michael  N. MURPHY 
President  of the Court  of Auditors 
Opinion  of the  Court  of Auditors  on the  draft  Council  Regulation  (ECSC,  EEC,  Euratom) 
on the procedure  for applying  the European  unit  of account  (EUA)  to the legal  acts  adopted 
by the institutions  of the European  Communities 
THE  COURT  OF  AUDITORS  OF  THE  EUROPEAN 
COMMUNITIES, 
Having  regard  to  Article  78  (i)  of  the  Treaty 
establishing  the  European  Coal  and  Steel  Community, 
Article  209  of the  Treaty  establishing  the  European 
Economic  Community  and  Article  183  of the  Treaty 
establishing  the European  Atomic  Energy  Community, 
Having  regard  to the  request  of the  President  of the 
Council  of 23 January  1978  for an opinion  on the orig-
inal draft  and  the  amended  draft  of a Council  Regu-
lation  on the  procedure  for applying  the European  unit 
of account  (EUA)  to the legal  acts  adopted  by the insti-
tutions  of the European  Communities  (Docs  R/23  60/76 
(final  622)  and  R/1229/77  (final  326)), 
Whereas  an opinion  of the Court  has  been  requested  on 
the texts  officially  proposed  by the  Commission  and, 
therefore,  with  regard  to the  text  of the  draft,  the 
opinion  can  only  apply  to  the  draft  Regulation 
submitted  to the  Court,  even  if it does  not  reflect 
entirely  present  thinking  on the  subject;  whereas  this 
implies  that  a fresh  opinion  of the  Court  should  be 
requested  if significant  amendments  are  made  to this 
draft  Regulation; 
Whereas  the  Court,  in expressing  its opinion,  considers 
it should  take  particular  account  of those  aspects  of the 
legislation  relating  to the EUA  which  have  repercussions 
on the  exercise  of the  Court's  external  audit,  especially 
in view  of the provisions  of Sections  I and  II of the draft 
Regulation; 
Whereas,  with  regard  to the  structure  of the  draft 
Regulation,  Section  I deals  with  the  utilization  of the 
EUA  as an instrument  of budgetary  management  while 
Section  II provides  for  the  use  of the  EUA  as an 
instrument  for  settling  the  rights  and  financial obligations  of the  Communities,  whereas  such  a plan 
appears  illogical  since  accounting  is nothing  but  the 
pure  and  simple  expression  in EUA  of the  rights  and 
obligations  of the  Communties;  whereas  it would  thus 
be preferable  to transpose  the order  in which  these  two 
sections  of the draft  Regulation  appear; 
Whereas  Article  4 (2)  of the  draft  lays  down  that 
payment  orders  made  out  in EUA  shall  be executed  by 
transfers  in EUA  with  effect  as a full  discharge,  this 
principle,  even  if its application  is limited,  constitutes  a 
fundamental  element  of the  proposed  legislation  owing 
to it? repercussions  outside  the Community  institutions 
and it would  therefore  be advisable  to emphasize  its 
value  with  a view  to subsequent  developments  in the 
direction  of  the  generalization  which  would  be 
desirable,  of the  use  of the  EUA  from  the stage  of the 
commitment  up to the  stage  of the  discharge  of the 
obligation, 
HAS  ADOPTED  THE  FOLLOWING  OPINION: 
The Court  considers  first  of all  that  it would  be 
appropriate  to complete  the preamble  to the Regulation 
by the  phrase:  'Having  regard  to the  opinion  of the 
Court  of Auditors'. 
Article  1 (Definition  of  the EUA) 
The Court  is of the  opinion  that  the  definition  of the 
EUA  in the  Article  should  be harmonized  with  the 
provisions  of Article  10 of the  Financial  Regulation  of 
21 December  1977  applicable  to the  general  budget  of 
the European  Communities,  in order  to avoid  the 
fragmentation  likely  to result  from  the  adoption  of 
separate  Regulations.