Report on the financial statements of the Translation Centre for the bodies of the European Union (TCBEU - Luxembourg) for the financial year ended 31 December 1998, together with the Centre's replies
Date: 1999-10-07
Institutions: European Court of Auditors
Subjects: Community body, financial control, financial year, management audit, report, translation

C 372/20

EN

Official Journal of the European Communities

22.12.1999

on the financial statements of the Translation Centre for the bodies of the European Union
(TCBEU(cid:151)Luxembourg) for the financial year ended 31 December 1998, together with the Centre(cid:146)s
replies

REPORT

(1999/C 372/04)

CONTENTS

Paragraph
reference

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

1 to 4

MAIN OBSERVATIONS ON THE IMPLEMENTATION OF THE BUDGET OF THE TRANSLATION
CENTRE FOR BODIES OF THE EUROPEAN UNION FOR THE FINANCIAL YEAR ENDED 31
DECEMBER 1998. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5 to 8

Budget . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cash position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Analytical accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Premises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5

6

7

8

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

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

Page

21

21

21

21

21

21

23

25

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Official Journal of the European Communities

C 372/21

THE COURT(cid:146)S OPINION

1. This report is addressed to the Management Board of the
Translation Centre for the bodies of the European Union in con-
formity with Article 14(4) of Council Regulation (EC) No
2965/94 (1).

2. The Court has examined the financial statements of the Trans-
lation Centre for the bodies of the European Union for the finan-
cial year ended 31 December 1998. In accordance with Article
14(1) of Council Regulation (EC) No 2965/94, the budget was
implemented at the responsibility of the Director. This responsi-
bility included the drawing-up and presentation of the financial
statements (2) in accordance with the internal financial provisions,
as provided for in Article 15 of Regulation (EC) No 2965/94. The
Court of Auditors is required under Article 248 of the Treaty
establishing the European Community to audit these accounts.

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

4. This examination has enabled the Court to obtain reasonable
assurance 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.

MAIN OBSERVATIONS ON THE IMPLEMENTATION OF THE BUD-
GET OF THE TRANSLATION CENTRE FOR THE BODIES OF THE
EUROPEAN UNION FOR THE FINANCIAL YEAR ENDED 31
DECEMBER 1998

so that the allocations for the translation work to be entrusted by
the various bodies and institutions to the TCBEU under the regu-
lations or by virtue of contracts can be accurately identified. The
main advantage of this would be to make it possible to carry out
a reconciliation of the expenditure forecast of the client bodies
with the corresponding revenue forecast of the TCBEU, and thus
to correct certain discrepancies detected in 1998 and to draw up
more realistic budgets in the future.

Cash position

6. Since the Centre has never provided its Management Board
with the quarterly cash position forecasts laid down by its Finan-
cial Regulation, it has not been possible to establish whether the
level of the TCBEU(cid:146)s cash account is appropriate in view of actual
needs. However, the Court observes that covering the Centre(cid:146)s
obligations in a prudent manner does not justify the large amount
of cash available nor the fact that it has almost doubled (from
ECU 5,9 million as at 31 December 1997 to ECU 10,7 million as
at 31 December 1998).

Analytical accounts

7.
In view of the considerable variations seen between the cost
price of one page of translation, as set out in the draft budget esti-
mates (ECU 76 per page) and as given by the data in the Centre(cid:146)s
revenue and expenditure account for the financial year 1998 (ECU
65 per page (3)), the Court reiterates its previous recommenda-
tion (4) that the TCBEU set up analytical accounts in order to be
able to establish, by body and by type of work, the real cost of the
various services that it provides.

Budget

Premises

5.
It is recommended that the Centre should obtain from all the
bodies concerned the information which it requires in order to
improve the planning of the work to be carried out by the Centre,

(1) OJ L 314, 7.12.1994, p. 1.
(2) As required under Article 14(3) of Council Regulation (EC) No
2965/94, the accounts for all the Centre(cid:146)s revenue and expenditure
for the financial year 1998 were drawn up on 24 March 1999 and
forwarded to the Centre(cid:146)s Management Board, the Commission and
the Court of Auditors. These accounts were received by the Court on
26 March 1999. A summarised version of these financial statements
is presented in the tables attached to this report.

8. There was no change during 1998 in the situation observed
by the Court in 1997 (5): the TCBEU is still occupying premises
made available by the Luxembourg authorities, but no agreement
has been made between the parties on the basic tenancy condi-
tions applicable to these premises (amount of any possible rent,
surface area and facilities rented, duration of the lease, etc.).

(3) See paragraph 4 of the (cid:145)Analysis of financial management(cid:146) chapter in

the (cid:145)Revenue and expenditure account(cid:146).

(4) OJ C 393, 29.12.1997, paragraph 1.6, p. 47 and OJ C 406, 28.12.1998,

paragraph 1.6, p. 33.

(5) OJ C 406, 28.12.1998, paragraph 1.13, p. 34.

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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 9 September 1999.

For the Court of Auditors

Jan O. KARLSSON

President

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Table 1

Balance sheet as at 31 December 1998 and 1997

Assets

1998

1997

Liabilities

1998

1997

(ECU 1 000)

Fixed assets
Equipment and furniture
Computer equipment
Intangible fixed assets

Current assets
Balance of advances to be received
Sundry accounts receivable

Subtotal

95
220
46

361

977
10

71
156
48

275

693
(cid:151)

Fixed capital
Own capital
Net result

Current liabilities
Automatic carry-overs
Advances received
Balance of advances to be received
Sundry accounts payable

Subtotal

987

693

Subtotal

Cash accounts
Bank accounts
Imprest accounts

10 711
2

Subtotal

10 713

5 915
2

5 917

Suspense accounts
Revenue for reuse

361
5 062

275
2 666

Subtotal

5 423

2 941

2 461
2 843
977
344

6 625

3 007
(cid:151)
693
241

3 941

13

3

Source: Prepared by the Court of Auditors on the basis of data provided by the Centre.

Total assets

12 061

6 885

Total liabilities

12 061

6 885

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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

(cid:151)
14 743
245
3

300
9 809
(cid:151)
118

Total revenue

14 991

10 227

Revenue

Contribution from the general budget
Own revenue
Bank interest
Sundry revenue

Expenditure

Staff expenditure (cid:151) Title I of the budget
Payments
Appropriations carried over

9 702
1 079

675
1 382

Buildings, equipment and various admin. expenditure items (cid:151) Title II of the budget
Payments
Appropriations carried over

Total expenditure

12 838

Out-turn for the financial year

Balance carried over from the previous financial year
Repayment of the excess received under previous financial years
Appropriations carried over from the previous financial year, which lapsed
Exchange rate differences

Source: Prepared by the Court of Auditors on the basis of data provided by the Centre.

Balance for the financial year

2 153

2 666
(cid:150) 653
880
16

5 062

5 217
2 171

441
836

8 665

1 562

464
(cid:151)
649
(cid:150) 9

2 666

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Official Journal of the European Communities

C 372/25

REPLIES OF THE TRANSLATION CENTRE

Budget

Analytical accounts

In accordance with Article 4 of Council Regulation (EC) No
2965/94 setting up a Translation Centre for the bodies of the
European Union, a representative of each of the bodies, agencies,
offices and institutions has a seat on the Management Board and
participates in the budget procedure. These representatives inform
the management of the Centre of their estimated requirements at
Management Board meetings. To complement this procedure, the
Centre will put in place a written consultation procedure, in order
to avoid discrepancies and draw up more realistic budgets. Nev-
ertheless, as the bodies and institutions have their own budget
approval and implementation procedures, the Centre is not in a
position to guarantee, by itself, either the consistency of the data
or whether they are realistic.

Cash position

The large amount of cash in hand results from the fact that the
Centre was still in its start-up phase. During this period, require-
ments and the amount of contributions were uncertain. The
Translation Centre will provide its Management Board with the
cash position forecasts laid down in its Financial Regulation and
will take appropriate measures to guarantee that obligations are
covered in a prudent manner.

As indicated in the reply to the report on the financial year ended
31 December 1997, the Centre is aware of the utmost importance
attaching to the establishment of an effective accounting system
for expenditure, which should be incorporated into the account-
ing system for the budget (SI 2) and the general accounts. In col-
laboration with other agencies, the Centre introduced the SI 2 sys-
tem during the first quarter of 1999; general and analytical
accounts modules are currently being developed. The Centre is to
strengthen the finance section, in order to ensure that it can
respond more efficiently to information needs.

Premises

As regards the (cid:145)Nouvel HØmicycle(cid:146) building, the Luxembourg
authorities did not submit a draft tenancy agreement to the Cen-
tre until 29 October 1998. The Centre(cid:146)s ACPC had a number of
comments to make on this draft, which were forwarded to the
Luxembourg authorities on 17 December 1998. The Centre is still
waiting for a response. Furthermore, on 10 February 1999, the
Centre submitted to the same authorities draft headquarters and
security agreements to be concluded between the Centre and the
Grand Duchy of Luxembourg. Finally, the Centre wrote to the
Luxembourg authorities on 26 March 1999, reminding them of
these outstanding matters.