Report on the financial statements of the European Monitoring Centre for Drugs and Drug Addiction (EMCDDA - Lisbon) for the financial year ended 31 December 1998, together with the Monitoring Centre's replies
Date: 1999-10-07
Institutions: European Court of Auditors
Subjects: European Monitoring Centre for Drugs and Drug Addiction, financial control, financial year, management audit, report

C 372/44

EN

Official Journal of the European Communities

22.12.1999

on the financial statements of the European Monitoring Centre for Drugs and Drug Addiction
(EMCDDA(cid:151)Lisbon) for the financial year ended 31 December 1998, together with the Monitoring
Centre(cid:146)s replies

REPORT

(1999/C 372/08)

CONTENTS

Paragraph
reference

THE COURT(cid:146)S OPINION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1-4

MAIN OBSERVATIONS ON THE IMPLEMENTATION OF THE BUDGET OF THE MONITORING
CENTRE FOR DRUGS AND DRUG ADDICTION FOR THE FINANCIAL YEAR ENDED 31
DECEMBER 1998. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Budgetary accounts and appropriations carried over . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Contracts/national focal points of the network (Reitox). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Imprest accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Publication of budget . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5-9

5-6

7

8

9

Tables 1 and 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Monitoring Centre(cid:146)s replies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Page

45

45

45

45

45

45

47

49

22.12.1999

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Official Journal of the European Communities

C 372/45

THE COURT(cid:146)S OPINION

(Excel) during 1998. The new SI 2 system is to be introduced as
of the financial year 1999. The general accounts will continue to
be kept by means of the Cubic software.

1. This report is addressed to the Management Board of the
European Monitoring Centre for Drugs and Drug Addiction in
conformity with Article 11(11) of Council Regulation (EEC) No
302/93 (1).

2. The Court has examined the financial statements of the Euro-
pean Monitoring Centre for Drugs and Drug Addiction for the
financial year ended 31 December 1998. In accordance with
Article 11(8) of Regulation (EEC) No 302/93, the budget was
implemented under the responsibility of the Director. This respon-
sibility included the drawing-up and presentation of the financial
statements (2) in accordance with the internal financial provisions,
as provided for in Article 11(12) of Regulation (EEC) No 302/93,
as modified by Article 1 of Regulation (EC) No 3294/94 (3). The
Court of Auditors is required under Article 248 of the Treaty
establishing the European Community to examine these accounts.

3. The Court performed its audit in accordance with its auditing
policies and standards. These have been adapted from generally
accepted international auditing standards to reflect the specific
characteristics of the Community context. Accordingly, the Court
carried out such tests of the accounting records and other audit-
ing procedures as it deemed necessary in the circumstances. By
means of this audit, the Court obtained a reasonable basis for the
opinion expressed below.

6. ECU 2,4 million in appropriations was carried forward from
1998 to 1999 (25 % of the Monitoring Centre(cid:146)s final budget).
They mainly concerned Title III of the budget: ECU 0,4 million
was for consultations, studies, surveys and training, ECU 0,2 mil-
lion regarded publications of a general character and ECU 0,6 mil-
lion concerned direct support for the focal points. The main rea-
son for these carry-overs was the budgetary authority(cid:146)s delay in
freeing the reserve of ECU 2 million.

Contracts/national focal points of the network (Reitox)

7. Many of the contracts had been allocated by private treaty or
restricted invitation to tender. Because of the delay in launching
the procedures, the contracts for 14 specific Reitox measures (out
of the 20 undertaken during 1998) were signed during the last
two months of the financial year.

4. This examination has enabled the Court to obtain reasonable
assurance that the annual accounts for the financial year ended on
31 December 1998 are reliable and that the underlying transac-
tions, taken as a whole, are legal and regular.

Imprest accounts

MAIN OBSERVATIONS ON THE IMPLEMENTATION OF THE
BUDGET OF THE EUROPEAN MONITORING CENTRE FOR
DRUGS AND DRUG ADDICTION FOR THE FINANCIAL YEAR
ENDED 31 DECEMBER 1998

Budgetary accounts and appropriations carried forward

8. The Centre continued to carry out a significant part of its
expenditure via an imprest account. Thus, 22 % of the payments
for the financial year were carried out by imprest account (ECU
1,6 million out of ECU 7,2 million). The Court once again recom-
mends that the Centre should wind down its use of imprest
accounts.

5. Due to delays in the introduction of the SI 2 system, the bud-
getary accounts continued to be kept by means of a spreadsheet

Publication of the budget

(1) OJ L 36, 12.2.1993, p. 1.
(2) As required under Article 11(10) of Council Regulation (EEC) No
302/93, the accounts for all the Monitoring Centre(cid:146)s revenue and
expenditure for the financial year 1998 were drawn up on 26 May
1999 and forwarded to the Centre(cid:146)s Management Board, the Commis-
sion and the Court of Auditors. These accounts were received by the
Court on 31 May 1999. A summarised version of these accounts is
presented in the tables attached to this report.

(3) OJ L 341, 30.12.1994, p. 7.

9.
In breach of the requirement laid down in Article 13 of its
Financial Regulation, the Centre did not publish either its budget
or organisation chart in the Official Journal of the European Com-
munities.

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Official Journal of the European Communities

22.12.1999

This report was adopted by the Court of Auditors in Luxembourg at the Court meeting of 22 and 23
September 1999.

For the Court of Auditors

Jan O. KARLSSON

President

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Official Journal of the European Communities

C 372/47

Table 1

Balance sheet for the financial years 1998 and 1997

Assets

1998

1997

Liabilities

1998

1997

(ECU 1 000)

Fixed assets

3 518

3 409

Stocks
Office equipment

Current assets
Commission subsidy
Sundry debtors
Payments on specific subsidies (2)
VAT to be recovered

Cash accounts
Bank
Imprest account
Transfers in progress
Cash accounts

29

570
403
10
4

987

3 230
527
(cid:150) 47
0

3 710

12

2 668
207

172

3 047

1 209
800
(cid:150) 1 820
1

190

Subtotal

Subtotal

Fixed capital
Own capital (1)
Balance for the financial year

3 547
1 287

3 421
(cid:150) 1 569

Subtotal

4 834

1 852

Current liabilities
Commission
Non-automatic carry-overs of appropriations
Automatic carry-overs of appropriations
Sundry accounts due
VAT
VAT reuse accounts

570
280
2 112
405
4
39

Subtotal

3 410

2 668

1 930
21
172
15

4 806

Total assets

8 244

6 658

Total liabilities

8 244

6 658

(1) The amount corresponds to that of fixed assets and stocks excluding the refurbishing of the building (about ECU 1 million).
(2) Appropriations allocated on the basis of specific subsidies (various seminars).
Source: Prepared by the Court of Auditors on the basis of the Monitoring Centre(cid:146)s data.

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Official Journal of the European Communities

22.12.1999

Revenue and expenditure account for the financial years 1998 and 1997

Table 2

(ECU 1 000)

1998

1997

Revenue

Commission subsidy
Miscellaneous revenue
Bank interest

Expenditure

Staff (cid:151) Title I
Payments
Appropriations carried forward

Total revenue

Buildings, equipment and sundry operating expenditure (cid:151) Title II
Payments
Appropriations carried forward

Operating expenditure (cid:151) Title III
Payments
Appropriations carried forward
Non-automatic carry-overs

Out-turn for the financial year

Balance carried over from the previous year
Adjustment to out-turn from previous year (1)
Appropriations carried forward and cancelled
Exchange-rate differences

Total expenditure

9 695
154
123

9 972

2 751
138

805
430

1 305
1 544
280

7 253

2 719

(cid:150) 1 569
0
137
0

3 632
90

3 722

2 517
6

884
43

829
1 881

6 160

(cid:150) 2 438

885
(cid:150) 81
92
(cid:150) 27

(1) Amount included in the subsidies to be received under the financial year 1997 but not subsequently collected.
Source: Prepared by the Court of Auditors on the basis of the Monitoring Centre(cid:146)s data.

Balance for the financial year

1 287

(cid:150) 1 569

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REPLIES FROM THE EMCDDA

Points 1 to 4

The EMCDDA welcomes the Court of Auditors(cid:146) observation that
the annual accounts for the financial year ended 31 December
1998 are reliable and that the underlying transactions, taken as a
whole, are legal and regular.

The timetable for the signature of contracts for the specific Reitox
projects was conditioned notably by the late lifting of the ECU
2 000 000 reserve placed on the EMCDDA(cid:146)s budget for 1998 by
the European Parliament.

Point 5

Point 8

The EMCDDA introduced the SI 2 system in January 1999, at the
same time as the European Commission, as soon as it was made
available to the EMCDDA following its adaptation to the agencies.

The EMCDDA supports the Court of Auditors(cid:146) recommendation
that the use of imprest accounts should be progressively wound
down.

Point 6

No comments on this point.

Point 7

Of the EMCDDA(cid:146)s contracts 26 % were allocated by private treaty
and 55 % by restricted invitations to tender following calls for
expression of interest, in accordance, in all cases, with the legisla-
tion applicable to the EMCDDA.

Point 9

In order to minimise publication costs, the EMCDDA had requested
the Court of Auditors(cid:146) opinion on a possible amendment to its
Financial Regulation to replace the publication in the Official Jour-
nal of the European Communities by an electronic publication via the
Monitoring Centre(cid:146)s Internet site. Following the Court of Audi-
tors(cid:146) negative reply of 24 March 1999, the procedure for publica-
tion in the Official Journal of the European Communities was launched,
while maintaining the electronic publication via the Internet.