Opinion No 10/2002 on a Commission proposal for amendment of the constituent acts of Community Bodies following the adoption of the New Financial Regulation
Date: 2002-09-25
Institutions: European Court of Auditors
Subjects: Community body, financial management, financial regulation, general budget (EU), implementation of the budget

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on a Commission proposal for amendment of the constituent acts of Community Bodies following
the adoption of the New Financial Regulation

OPINION No 10/2002

(pursuant to the second subparagraph of Article 248(4) of the EC Treaty)

(2002/C 285/02)

THE COURT OF AUDITORS OF THE EUROPEAN COMMUNITIES

Having regard to the Treaty establishing the European Commu-
nity, and in particular, the second subparagraph of Article 248(4),
thereof,

Having regard to a request by the European Commission, of
18 July 2002, for an opinion of the Court on a proposal for
amendment of the constituent acts of Community Bodies (docu-
ment COM(2002)406 final),

HAS ADOPTED THE FOLLOWING OPINION:

The proposal covers the following areas with regard to
1.
the bodies referred to in Article 185(1) of the new Financial
Regulation applicable to the general budget of the European
Communities (1) (hereinafter called The EC Financial Regulation):

— appointment and renewal of the mandate of the Director of

the body,

— internal audit,

— procedure for adopting the financial rules of the body,

— preparation and adoption of the budget and of the establish-

ment plan,

— submission of the annual accounts and the discharge proce-

dure,

— adoption of annual report on the activities of the body,

— application of Regulation No 1049/2001 to documents of

the bodies.

2.
The provisions for the nomination of a director of the
body allow in particular the possibility of renewing his mandate
in a procedure not open to other candidates. It is provided that
such a prolongation of mandate can only be proposed by the
Commission and that it is the administrative board of the body
which will take the final decision. In the Court’s opinion, such a
procedure would lead to increased dependency of the director of
the body on those in the Commission responsible for proposing
the prolongation of his mandate.

3.
As far as internal audit is concerned the relevant provision
repeats literally the provision laid down in Article 185(3) of the
EC Financial Regulation. The Court sees no reason to repeat a
provision which is already laid down in a legislative text having
the same legal value.

(1) OJ L 248, 16.9.2002, p. 1.

4.
The proposal does not provide for consultation of the
Court of Auditors before adopting or modifying the financial
regulation of the bodies. In the future only the Commission will
be consulted. In the explanatory memorandum the following jus-
tification is given by the Commission: ‘Competence for the adop-
tion of each Agency’s individual Financial Regulation will rest
with the respective body’s management board or equivalent (after
the Commission has been consulted). This will harmonise the
individual procedures considerably. Currently, responsibility for
adopting each body’s Financial Regulation rests either with the
Council or with the management board or equivalent, with or
without the involvement of the Commission and the Court of
Auditors in the process. These disparities are simply historical
accidents in the development of the agencies, and are not objec-
tively justified’. This explanation is incorrect as far as the role of
the Court is concerned. Currently all the founding acts of the
Community bodies require the Court’s opinion before the adop-
tion of their financial regulation (2).

(2) Article 12(1) of Regulation (EEC) No. 337/75 of 10 February 1975
(The European Centre for the Development of Vocational Training,
Thessaloniki).
Article 16 of Regulation (EEC) No 1365/75 of 26 May 1975 (The
European Foundation for the Improvement of Living and Working
Conditions, Dublin).
Article 14 of Regulation (EEC) No 1210/90 of 7 May 1990 (The Euro-
pean Environment Agency, Copenhagen).
Article 12 of Regulation (EEC) No 1360/90 of 7 May 1990 (The Euro-
pean Training Foundation, Turin).
Article 11(12) of Regulation (EEC) No 302/93 of 8 February 1993
(The European Monitoring Centre for Drugs and Drug Addiction, Lis-
bon).
Article 57(11) of Regulation (EEC) No 2309/93 of 22 July 1993 (The
European Agency for the Evaluation of Medicinal Products, London).
Article 15 of Regulation (EC) No 2062/94 of 18 July 1994 (The Euro-
pean Agency for Safety and Health at Work, Bilbao).
Article 15 of Regulation (EC) No 2965/94 of 28 November 1994 (The
Translation Centre for the Bodies of the EU, Luxembourg).
Article 12(12) of Regulation (EC) No 1035/97 of 2 June 1997 (The
European Monitoring Centre on Racism and Xenophobia, Vienna).
Article 9 of Regulation (EC) No 2667/2000 of 5 December 2000 (The
European Agency for Reconstruction, Thessaloniki).
Article 25(9) of Regulation 178/2002 of 28 January 2002 (The Euro-
pean Food Safety Authority).
Article 52 of Regulation (EC) No 1592/2002 of 15 July 2002 (The
European Aviation Safety Authority).
Article 21 of Regulation (EC) No 1406/2002 of 27. June 2002 (The
European Maritime Safety Agency).
Article 37 of Council Decision (2002/187/JHA) of 28 February 2002
(Eurojust).
Article 138 of Regulation (EC No 40/94 of 20 December 1993 (The
Office for Harmonization in the Internal Market, Alicante).
Article 112 of Regulation (EC) No 2100/94 of 27 July 1994 (The
Community Plant Variety Office, Angers).

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The Court regrets that the proposal gives little importance to the
financial regulation of Community bodies by depriving them of
the consultative service of the Court. In the opinion of the Court,
the Commission given the nature of its function does not have the
role of being the financial conscience of the Communities and of
ensuring the respect of the principles of budgetary law and public
accounting as far as the financial rules of the Community bodies
are concerned.

— by 30 September the Director sends the Court of Auditors a
reply to the observations of the Court. He also sends this
reply to the Administrative Board,

— the European Parliament, on a recommendation from the
Council acting by a qualified majority, shall, before 30 April
of year N + 2, give a discharge to the Director in respect of
the implementation of the budget for year N.

As far as the preparation of the budget is concerned it is

5.
foreseen that:

— the Administrative Board shall, by 15 February, prepare an
estimate of revenue and expenditure on a proposal of a draft
drawn by the Director,

— the Administrative Board shall by 31 March, transmit this
estimate together with a draft establishment plan to the
European Commission,

— these statements shall be transmitted by the Commission to
the European Parliament and to the Council and the budget
authority decides on the subsidy and the establishment plan,

— the Administrative Board shall adopt the definitive budget of

the body before the beginning of the budget year.

The Court has no comment on this matter.

With regard to the submission of the accounts and the dis-

6.
charge procedure the proposal provides as follows:

— by 1 March, following each financial year, the accounting
officer of the body sends the provisional accounts to the
Commission’s accounting officer together with a report on
the budgetary and financial management of the year,

— by 31 March the Commission’s accounting officer transmits
the body’s provisional accounts together with the report on
budgetary and financial management to the Court of Audi-
tors. The report on budgetary and financial management is
also sent to the Council and to the Parliament,

— the Director draws up the final accounts after having received
the Court of Auditors’ observations on the provisional
accounts pursuant to Article 129 of the EC Financial Regula-
tion,

— the Administrative Board of the body delivers an opinion on

these final accounts,

— by 1 July the Director transmits the final accounts to the
European Parliament, to the Council, to the Commission and
to the Court of Auditors together with the opinion of the
Administrative Board,

As far as the provisional accounts are concerned, these provisions
make explicit what is already provided for in the EC Financial
Regulation. Nevertheless, the Court takes the opportunity to recall
its doctrine on the subject as pointed out in its Opinion No
2/2001 (1):

‘The provisional financial statements are exhaustive and con-
sistent documents, and are duly drafted by the stipulated
deadlines. They are provisional only in that the Commission
has not yet formally adopted them and that they may, where
appropriate, be subject to corrections proposed by the Court.
However, the Court’s task cannot under any circumstances
involve helping the Commission to draft the final consoli-
dated financial statements. This responsibility, of an admin-
istrative and accounting nature, lies solely with the Commis-
sion and is incompatible with the Court’s external control
responsibility.’

7.
As far as the annual activity reports of the Community
bodies are concerned, the Court finds it astonishing that the dead-
line for delivering these reports is set on 15 June of the year N + 1.
Such a delay of almost six months following the end of the year
in question is too long. As a consequence, the Court will not be
able to take into account these annual activity reports as the Court
is required to transmit its observations concerning the accounts
and the management of Community bodies by 15 June at the lat-
est.

8.
The Court recalls that the Commission, in its proposal for
a Commission Regulation on the Framework Financial Regulation
for the bodies referred to in Article 185 of the EC Financial Regu-
lation, has proposed a provision (2) for suspending the Director
from his duties as authorising officer. The Court agrees that such
a procedure should be established as a safeguard mechanism.
However, it is difficult to imagine a situation where the Director
is suspended from his duties as authorising officer while continu-
ing to assume his other tasks as Director of the Community body.

The Court suggests therefore that a provision concerning a pos-
sible suspension of the Director be inserted in the constituent acts

(1) OJ C 162, 5.6.2001, p. 1, comments on Article 118.
(2) Article 46 of SEC (2002) 836 final of 17 July 2002.

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of Community Bodies rather than in the Framework Financial
Regulation. Such a provision could read as follows: ‘In order to
avoid serious consequences for the interests of the Community

body, the management board may decide to suspend the Director
from his duties. It shall appoint a provisional Director who shall
remain in office until the board has taken a final decision.’

This Opinion was adopted by the Court of Auditors in Luxembourg at its meeting of 25 and 26 September
2002.

For the Court of Auditors

Juan Manuel FABRA VALLÉS

President