Amended proposal for a Council Regulation amending the Financial Regulation and separating the internal audit function from the ex ante financial control function (Article 24, paragraph 5, of the Financial Regulation) (presented by the Commission pursuant to Article 250 (2) of the EC Treaty)
Date: 2000-10-31
Institutions: European Commission
Subjects: EU institution, administrative reform, financial control, financial regulation

C 62 E/294

EN

Official Journal of the European Communities

27.2.2001

Amended proposal for a Council Regulation amending the Financial Regulation and separating the
internal audit function from the ex ante financial control function (Article 24, paragraph 5, of the
Financial Regulation)

(2001/C 62 E/20)

COM(2000) 693 final (cid:16) 2000/0135(CNS)

(Submitted by the Commission pursuant to Article 250 (2) of the EC Treaty on 8 November 2000)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European
Community, and in particular Article 279 thereof,

Having regard to the Treaty establishing the European Coal and
Steel Community, and in particular Article 78h thereof,

Having regard to the Treaty establishing the European Atomic
Energy Community, and in particular Article 183 thereof,

Having regard to the proposal from the Commission,

financial controller and the annual
internal audit report
illustrating the main lessons to be learned from ex ante
control and internal audit in the previous year.

(6) All the institutions in respect of their own sections of the
budget, shall ensure that the financial controller has the
resources and independence required to perform his ex
ante control
functions in accordance with Article 24 of
the Financial Regulation,

HAS ADOPTED THIS REGULATION:

Article 1

Having regard to the opinion of the European Parliament,

Article 24 of the Financial Regulation is amended as follows:

Having regard to the opinion of the Court of Auditors,

1. The second paragraph is replaced by the following:

Whereas:

(1) The accumulation of the internal audit function and the
control ex ante by the financial controller under Article 24,
paragraph 5, second sentence of the Financial Regulation
may give rise to a dispersal of the two functions without
necessarily ensuring the right balance between the two.

(2) Pending the adoption of

the Financial Regulation,

the
internal audit
function should be separated from the
financial controller’s other functions as soon as possible.
The result of this would be that the financial controller
including ex
will continue to fulfil his present functions,
ante control, but not that of internal audit, which will be
performed by an internal auditor
the
financial controller.

independent of

(3) Given, however, the volume of budget appropriations, the
staff responsible for management and control and the
limited number of transactions of certain European insti-
tutions (within the meaning of the Financial Regulation),
which are therefore subject to fewer management risks, this
separation should be compulsory only for the European
Parliament, the Council and the Commission.

(4) The internal auditor will enjoy the same benefits and
prerogatives as those granted to the financial controller
in Article 24 of the Financial Regulation and will report,
as does the financial controller, to his institution, and to it
alone.

(5) In order to enhance the transparency of budget implemen-
tation and to facilitate the exchange of good practices
between institutions, each institution will send to the
other institutions the annual report drawn up by the

=He shall carry out his duties in accordance with the prin-
ciples laid down in Article 2 and the provisions of Article
22(3). He shall report to his institution on any problem he
the management of Community
uncovers
finances. He shall produce an annual report on his work
which his institution shall
to the other insti-
tutions.>;

regarding

transmit

2. The fifth paragraph is replaced by the following:

=Monitoring shall be carried out by that official by means of
inspection of the files relating to expenditure and revenue
and, if necessary, on the spot.>

Article 2

An Article 24a is added:

=Article 24a

The European Parliament,

1.
the Council and the
Commission shall each appoint an internal auditor who
is independent of
the financial controller. He shall be
appointed in each institution in the same way as the
in order to be able to exercise
financial controller and,
his duties, shall have access to the same information as
the financial controller as set out in the second sentence
of the fourth paragraph and the fifth and sixth paragraphs
of Article 24. In the performance of his duties the internal
auditor shall be accountable only to the institution which
appointed him; he shall report directly to that institution
and shall enjoy the same guarantees as are granted to the
financial controller in accordance with the second, eighth
and ninth paragraphs of Article 24.

27.2.2001

EN

Official Journal of the European Communities

C 62 E/295

The internal audit shall include an evaluation of the effec-
tiveness of the management and control systems designed
to ensure the regularity of operations. These duties shall
be exercised in accordance with the implementing rules
provided for in Article 139.

Each institution shall send to the other institutions
3.
its annual internal audit report showing the number and
nature of
the main recommen-
dations to which they have given rise and the action
taken on these recommendations.

the audits performed,

The internal auditor may be neither authorising officer
nor accounting officer.

Justice,

The Court of

2.
the
Economic and Social Committee, the Committee of the
Regions and the Ombudsman may each appoint an
internal auditor in accordance with paragraph 1.

the Court of Auditors,

If no internal auditor is appointed, the financial controller
shall perform the institution’s internal audit in accordance
with the implementing rules provided for in Article 139.

4.
Each institution shall consider whether the recom-
mendations made in the internal audit reports of the other
institutions can apply to its own management and control
systems.>

Article 3

This Regulation shall enter into force on the seventh day
following its publication in the Official Journal of the European
Communities.

This Regulation shall be binding in its entirety and directly
applicable in all Member States.