Report by the Court of Auditors on the audit of the operational efficiency of the management of the European Central Bank for the financial year 2001, together with the European Central Bank's replies
Date: 2002-09-12
Institutions: European Court of Auditors
Subjects: European Central Bank, European Court of Auditors, audit, financial year, management accounting, report

25.10.2002

EN

Official Journal of the European Communities

C 259/1

I

(Information)

COURT OF AUDITORS

REPORT BY THE COURT OF AUDITORS

on the audit of the operational efficiency of the management of the European Central Bank for the
financial year 2001, together with the European Central Bank’s replies

(2002/C 259/01)

CONTENTS

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

THE EFFICIENCY OF THE MANAGEMENT IN 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Budgetary reviews . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Internal audit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1-3

4-9

4-6

7-9

The European Central Bank’s replies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2

2

2

3

4

Paragraph

Page

C 259/2

EN

Official Journal of the European Communities

25.10.2002

INTRODUCTION

1. The Court is mandated to examine ‘the operational efficiency
of the management of the European Central Bank (ECB)’ (1). The
Court has published three reports for the financial years 1998,
1999 and 2000 (2). In these reports the Court has reviewed
budgetary management and monitoring, the internal audit sys-
tems, the project management and monitoring systems and human
resources management; the Court also focused on management
issues of particular interest, namely the renting of premises for the
ECB and two special projects (3).

(b) the Executive Board of the ECB is the executive body of the
ECB; its main responsibilities are to implement monetary
policy in the euro area and to manage the ECB. Current prac-
tice is for the Executive Board to meet at least once a week.

THE EFFICIENCY OF THE MANAGEMENT IN 2001

In 2001, the Court reviewed budgetary management and

2.
internal audit.

Budgetary reviews

3. The ECB has been accorded legal personality under inter-
national public law. Within the ECB:

(a) the Governing Council is the supreme decision-making body
of the ECB; its main responsibility is to formulate the mon-
etary policy of the euro area; it is also the budgetary author-
ity of the ECB;

4.
In November 2000, the Governing Council approved an ini-
tial budget of 336 million euro for 2001 (see Table 1) (4). The final
budget amounted to 511 million euro (plus 52 %, 175 million
euro above the initial budget). The final expenditure amounted to
431 million euro or 84 % of the revised budget. The largest
expenses were 118 million euro on the banknote contingency
reserve, 106 million for staff and staff related expenditure and
78 million for consultancy and external costs (mainly related to
the Euro 2002 information campaign).

Table 1

The ECB’s budget in 2000 and 2001

Purpose

Initial
budget

Revised
budget
September

Business units

Projects

Contingency reserve

Banknote contingency
reserve

Total

Source: European Central Bank.

190

77

—

—

267

168

54

5

—

227

2000

Actual

163

37

—

—

200

(Mio EUR)

2001

% of
revised
budget

% of
initial
budget

Initial
budget

Revised
budget
September

Actual at
31
December

% of
revised
budget

% of initial
budget

97

69

—

—

88

86

48

0

—

75

244

92

—

—

336

229

119

—

163

511

210

104

—

117

431

92

87

—

72

84

86

113

—

—

128

(1) Article 27(2) of Protocol on the Statute of the European System of
Central Banks and of the European Central Bank annexed to the EC
Treaty.

(2) Reports by the Court of Auditors on the audit of the operational effi-
ciency of the management of the European Central Bank for the
financial years 1998 (OJ C 133, 12.5.2000), 1999 (OJ C 47, 13.2.2001)
and 2000 (OJ C 341, 4.12.2001).

(3) The ‘Disaster Standby Site’ and the ‘Euro 2002 Information Cam-
paign’ see Report by the Court of Auditors on the audit of the opera-
tional efficiency of the management of the European Central Bank for
the financial year 2000, paragraphs 8 to10 and 13 to21 (OJ C 341,
4.12.2001).

(4) The budget is financed through income earned by the ECB.

25.10.2002

EN

Official Journal of the European Communities

C 259/3

5. During 2001, six supplementary budgets were approved. One
budget transfer and a mid-year review were also adopted. At the
same time a new budget-reporting scheme reducing the number
of yearly budget monitoring reports from four to two was intro-
duced. Forty-five million euro were carried over to the ECB’s 2002
budget (8 million euro are related to projects and 37 million euro
to the Banknote Contingency Reserve). There is no written rule
covering such carry-overs. The accounts show an overall under-
spending of 16 %. The ECB Business Units underspending
amounted to 8 %, ECB projects underspending to 13 % and the
ECB Banknote Contingency Reserve to 28 %.

6. The year 2001 was a crucial year for the ECB as it assumed the
responsibility for the launch of the fiduciary euro. Budget revi-
sions and underspending are thus understandable if related to this
unique historical event. The Court recommends that the ECB
adopt rules on carryovers.

in 1999 and stating that ‘all parts of the institution may be subject
to internal auditing (…). The Directorate Internal Audit has been
established as an independent appraisal function with the role of
examining and evaluating the activities of the ECB’.

8. The ECB Audit Charter was established in accordance with
international standards. At the end of 2001, the Directorate was
made up of 19 permanent employees in two distinct divisions: 13
in the ECB division and 6 in the ESCB division. The ESCB divi-
sion is responsible for the coordination of audits made by the
National Central Banks within the framework of the European
System of Central Banks. The ECB division is responsible for audits
concerning the ECB services.

Internal audit

7. The role and the obligations of Internal Audit are summarised
in the ECB Audit Charter approved by the ECB Executive Board

9. During its audit, the Court evaluated audits regarding the
Bank’s operational efficiency carried out by the Directorate Inter-
nal Audit. The Court has obtained reasonable assurance that the
Directorate is properly independent and that its performance is in
accordance with professional standards.

This report was adopted by the Court of Auditors in Luxembourg at its meeting of 12 September 2002.

For the Court of Auditors

Juan Manuel FABRA VALLÉS

President

C 259/4

EN

Official Journal of the European Communities

25.10.2002

THE EUROPEAN CENTRAL BANK’S REPLIES

The European Central Bank (ECB) welcomes the report of the European Court of Auditors and takes note of
the various points raised by the Court.

Paragraph 6:

The ECB conducted a first and very limited budget carry-forward exercise from the financial year 2001 to the
financial year 2002. The guiding principles for the first implementation of this exercise were approved by the
Executive Board in early 2002. At the same time, the Executive Board concluded that, for future years, a
formalisation of the carry-forward practice should be considered, on the basis of experience gained and after
further consideration of the tools required to support a carry-forward routine, e.g. a centralised system for the
registration of financial commitments. The ECB notes the European Court of Auditors’ support for this initia-
tive.