Report on the financial statements of the European Centre for the Development of Vocational Training for the financial year 2001, together with the Centre's replies
Date: 2002-10-10
Institutions: European Court of Auditors
Subjects: Cedefop, financial control, financial year, report

C 326/42

EN

Official Journal of the European Communities

27.12.2002

on the financial statements of the European Centre for the Development of Vocational Training
for the financial year 2001, together with the Centre’s replies

REPORT

(2002/C 326/06)

CONTENTS

Paragraph

Page

THE COURT’S OPINION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

MAIN OBSERVATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Budgetary implementation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Financial statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Application of the financial provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Centre’s mandate and resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1-4

5-16

5-8

9-10

11-12

13-16

Tables 1 to 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Centre’s replies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

43

43

43

43

43

44

45

49

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Official Journal of the European Communities

C 326/43

THE COURT’S OPINION

1.
This report is addressed to the Council and the European
Parliament in accordance with Article 12 of Council Regulation
(EEC) No 337/75 (1), as amended by Council Regulation (EEC)
No 1946/93 (2).

The Court has examined the financial statements of the
2.
European Centre for the Development of Vocational Training for
the financial year ended 31 December 2001. In accordance with
Article 18(1) of Council Regulation (EEC) No 1416/76 (3), as
amended by Council Regulation (EEC) No 1948/93 (4), the Cen-
tre’s budget was implemented on the responsibility of its manage-
ment board. This responsibility includes the drawing-up and pre-
sentation of the financial statements (5), in accordance with the
internal financial provisions provided for in Articles 65, 67 and
68 of Council Regulation (EEC) No 1948/93, amending Council
Regulation (EEC) No 1416/76. The Court of Auditors is required
under Article 248 of the Treaty establishing the European Com-
munity to audit those accounts.

3.
The Court performed its audit in accordance with its audit-
ing standards and policies. These have been adapted from gener-
ally accepted international auditing standards to reflect the spe-
cific characteristics of the Community context. The Court carried
out such tests of the accounting records and applied such 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 reason-
able assurance that the annual accounts for the financial year
ended 31 December 2001 are reliable and that the underlying
transactions, taken as a whole, are legal and regular.

MAIN OBSERVATIONS

Final appropriations for the financial year totalled 13,5
6.
million euro, almost all of which were committed. Payments in
respect of the appropriations of the financial year amounted to
10,6 million euro; 2,8 million euro were carried over to the fol-
lowing financial year. The appropriations carried over to 2002
concerned mainly operating appropriations (Title III), amounting
to 2,2 million euro, i.e. over 40 % of the appropriations commit-
ted. The Centre should pursue its efforts to increase the quality
and monitoring of the planning of its activities.

7.
Appropriations carried over from 2000 to the financial
year 2001 amounted to 2,5 million euro, 2,3 million of which
were disbursed.

8.
The accounting system’s possibilities regarding electronic
signatures should be fully exploited (electronic signatures should
be an option open not only to the Accounting Officer and admin-
istrative staff but also to the Authorising Officers) in order to
uphold the principle of the separation of duties.

Financial statements

9.
The revenue and expenditure account and balance sheet
published by the Centre in its activity report for the financial year
2001 are presented in summary form in Tables 2 and 3.

10.
The Centre does not depreciate its fixed assets. It should
apply the valuation and depreciation rules adopted by the Com-
mission (7) so that the book values faithfully reflect the real value
of the goods which form part of its assets.

Budgetary implementation

Application of the financial provisions

Table 1 (6) shows the implementation of the appropria-
5.
tions for the financial year 2001 and the appropriations carried
over from the previous financial year.

11.
The Centre has an imprest account with a ceiling of
2 000 000 euro. This figure is still too high. Moreover, there is no
limit to the amount of individual payments that may be made.

(1) OJ L 39, 13.2.1975, p. 1.
(2) OJ L 181, 23.7.1993, p. 11.
(3) OJ L 164, 24.6.1976, p. 1.
(4) OJ L 181, 23.7.1993, p. 15.
(5) As required under Article 1 of Council Regulation (EEC) No 1948/93,
amending Council Regulation (EEC) No 1416/76, the accounts for all
the Centre’s revenue and expenditure for the financial year 2001 were
drawn up on 29 March 2002 and forwarded to the Commission and
the Court of Auditors. These accounts were received by the Court on
4 April 2002. A summarised version of these financial statements is
published in the tables annexed to this report.

(6) All the tables in this report were drawn up on the basis of the most
exact values possible for the data used. For presentation purposes, the
figures were rounded up or down, which may produce minor differ-
ences in the totals. A dash indicates a non-existent or nil value and
0,0 indicates a value below the rounding threshold.

12.
The Centre should continue its efforts to apply purchas-
ing procedures more strictly as has already been pointed out on
several occasions in previous reports (8). Thus two contracts (9)
(for a global amount of 64 600 euro) were concluded directly
with the suppliers of the services without observing the relevant
rules.

(7) Commission Regulation (EC) No 2909/2000 of 29 December 2000

(OJ L 336, 30.12.2000, p. 75).

(8) See paragraph 11 of the report for the financial year 2000 (OJ C 372,

28.12.2001).

(9) Contracts 2001/055, (43 000 euro) and 2000/300 (21 600 euro).

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The Centre’s mandate and resources

13.
An analysis was carried out of the consistency between
the tasks assigned to the Centre and the organisation of its finan-
cial and human resources and its activities as shown in the bud-
get, its programme of activities and its organisation chart in order
to check if it was appropriate and transparent enough. Article 2
of Regulation (EEC) No 337/75 assigns five tasks to the Centre: to
compile documentation on systems and developments in the area
of vocational training; to contribute to the development and coor-
dination of research in these fields; to disseminate all useful docu-
mentation and information; to encourage a concerted approach
to vocational training problems and, in particular, to achieve the
mutual recognition of certificates and other documents attesting
completion of vocational training and to provide a forum for all
those concerned. Table 4 summarises the results of this analysis.

In order to carry out its tasks, the Centre receives a sub-
14.
sidy from the Commission which forms the bulk of its budgetary
revenue. This revenue is intended to cover its administrative
expenditure and operating expenditure arising from its pro-
gramme of activities. The headings over the budgetary items relat-
ing to operating expenditure do not, however, correspond to those

of the tasks assigned to the Centre. Moreover, the activity report
does not clearly indicate the link between the operating activities
described and the Centre’s tasks. This absence of link with the
tasks may also be seen in the organisation chart of staff assigned
to operating activities.

15.
These inconsistencies between, on the one hand, the tasks
laid down by the Centre’s Regulation and, on the other hand, the
distribution of its financial resources, the organisation of its
activities and the allocation of its human resources result in the
FIBUS system not being able to establish a link between the Cen-
tre’s tasks and the implementation of its programme of activities
as the latter is reflected in the implementation of its budget.

16.
The Centre should take care to ensure greater consistency
between the tasks assigned to it by the basic legislation and the
distribution of the financial and human resources granted to it.
The practical organisation of its activities should also reflect the
Centre’s objectives more closely. In order to make its activity more
transparent and to be able to audit the effectiveness of its manage-
ment, a recognisable link between the Centre’s objectives and the
organisation and the implementation of its activities should be
established.

This report was adopted by the Court of Auditors in Luxembourg at its meeting of 10 October 2002.

For the Court of Auditors

Juan Manuel FABRA VALLÉS

President

Implemenation of the budget for the financial year 2001

Table 1

Revenue

Revenue entered
in the final
budget for the
financial year

Source of revenue

Revenue received

Allocation of
expenditure

Expenditure

(Mio EUR)

Final budget appropriations

Appropriations carried over from the
previous financial year

Appropriations available
(2001 budget and financial year 2000)

entered

commit-
ted

paid

carried
over

cancelled

commitments
outstanding

paid

cancelled

appro-
priations

commit-
ted

paid

carried
over

cancelled

EC subsidies

13,2

Other subsidies

0,2

Financial
revenue

0,2

13,5

Total

13,2

0,2

0,1

13,5

Title I
Staff

Title II
Administration

Title III
Operating
activities

7,5

7,5

7,2

0,3

0,0

1,0

1,0

0,7

0,3

0,0

5,0

5,0

2,8

Total

13,5

13,5

10,6

2,2

2,8

0,0

0,0

NB: Any discrepancies in totals are due to the effects of rounding.
Source: Centre data — These tables summarise the data supplied by the Centre in its own financial statements.

0,2

0,2

2,1

2,5

0,2

0,0

7,7

7,7

7,4

0,3

0,2

0,0

1,2

1,2

0,9

0,3

1,9

2,3

0,1

0,1

7,1

7,1

4,7

16,0

16,0

13,0

2,2

2,8

0,0

0,0

0,0

0,1

.

.

2
7
1
2
2
0
0
2

E
N

O

f
f
i
c
i
a
l

J
o
u
r
n
a
l

o
f

t
h
e

E
u
r
o
p
e
a
n
C
o
m
m
u
n
i
t
i
e
s

C
3
2
6
/
4
5

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Official Journal of the European Communities

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Revenue and expenditure account for the financial years 2001 and 2000

Table 2

2001

2000

(1 000 EUR)

Revenue
Own revenue
Commission subsidies
Revenue from previous financial years
Sundry revenue
Earmarked revenue (Phare + third parties)
Financial revenue

Expenditure
Staff — Title I of the budget
Payments
Appropriations carried over

Administration — Title II of the budget
Payments
Appropriations carried over

Operating activities — Title III of the budget
Payments
Appropriations carried over

Earmarked revenue (third parties)
Payments
Appropriations carried over

Total revenue (a)

13 200
724
0
402
104

14 430

7 231
266

700
323

2 720
2 059

277
453

Total expenditure (b)

14 029

Out-turn for the financial year (a-b) (1)

Balance carried over from the previous financial year
Cancelled appropriations carried over from the previous financial year
Appropriations to be carried over, allocated revenue
Appropriations for re-use from the financial year 2000, not utilised
Repayments to the Commission
Exchange-rate differences

Balance for the financial year

401

– 228
349
0
12
0
– 2

532

11 502
2 165
18
205
122

14 011

6 881
282

781
210

2 793
2 041

41
191

13 220

791

– 520
232
—
—
– 697
– 34

– 228

(1) The negative balance of the out-turn and own capital does not constitute a capital loss. It results from the application of the financial regulation in respect of revenue (only

revenue collected) and expenditure (payments plus appropriations carried over).

NB: Any discrepancies in totals are due to the effects of rounding.
Source: European Centre for the Development of Vocational Training.

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Balance sheet as at 31 December 2001 and 31 December 2000

Table 3

Assets

2001

2000

Liabilities

2001

2000

(1 000 EUR)

Fixed assets
Buildings
Financial fixed assets, guarantee
Equipment and furniture

Stock

Current assets
Other subsidies receivable
Other advances
VAT to be recovered
Sundry accounts receivable

Cash accounts
Bank accounts
Cash
Imprest account

Subtotal

Subtotal

5 953
5
3 095

9 053

28

184
93
42
37

356

4 116
6
173

Subtotal

4 295

5 606
—
2 974

8 585

16

—
56
310
26

392

3 896
9
229

4 134

Fixed capital
Own capital
Balance for the financial year

9 080
532

8 601
– 228

Subtotal

9 612

8 373

Current liabilities
Automatic carry-overs of appropriations
Sundry accounts payable
VAT /Other taxes

3 100
19
98

2 724
12
409

Subtotal

3 217

3 144

Suspense accounts
Payments in progress
Sums to be reused
Deferred revenue
Suspense account
Other subsidies

338
348
36
—
184

906

1 286
298
23
2
2

1 610

Suspense accounts

3

—

Subtotal

Total assets

13 735

13 127

Total liabilities

13 735

13 127

NB: Any discrepancies in totals are due tot he effects of rounding.
Source: Centre data — These tables summarise the data supplied by the Centre in its own financial statements.

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Organisation and structure

Budget — Operating expenditure (Title III)
Operating documentation
Information
Research
Pilot studies and projects
Study visits

Activities according to the Work Programme
Reports on ongoing training
Responsibilities of the information firm
Information of social partners
Description of the training systems
Vocational training at regional level
Vocational training for the disabled
Training of instructors
Programme of study visits
Professional mobility and qualifications
Support to the Commission

Staff assigned to operating activities
Training process

Development of skills
Validation of skills
Training systems
Socio-economic aspects

Labour market and guidance
Costs and benefits
Economic sectors

Exchanges, research and networks

Study visits
Forums and networks
Coordination of research
Dissemination of information
Information and publication
Electronic village

Table 4

Objectives

Objectives

Documenta-
tion

Research

Information

Concerted
action

Meeting

X

X
X

X
X
X

X

X

X
X
X

X

X
X

X

X

X

X
X
X
X
X
X

X

X

X

X

X

X
X

X

X
X

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THE CENTRE’S REPLIES

We note that the Court has obtained reasonable assurance
4.
that the annual accounts for the financial year ended 31 Decem-
ber 2001 are reliable and that the underlying transactions, taken
as a whole, are legal and regular.

not be repeated. The Centre will study opportunities for using
electronic tools for market procedures while fully respecting the
financial provisions in this matter.

The Centre will follow the Court’s suggestions to reinforce

6.
the quality and follow-up to the programming of activities.

8.
Regarding electronic signatures, the Centre’s IT section is
currently undertaking the relevant training to the staff concerned.

Concerning the separation of tasks, this is currently ensured as,
at present, the hard copy ‘paper’ document has ultimate validity.
Whilst it was the case, in 2001, that not all authorising officers
signed in FIBUS, this is now the practice.

10.
The Centre will adapt its provisions while adapting the
new Financial Regulation within the framework of the new provi-
sions for decentralised bodies which are currently being adopted.

11.
At the meeting of the Management Board on 14 and
15 November 2002, the Centre will table a new draft decision on
the creation of an imprest account and limiting its ceiling to EUR
100 000, which corresponds to expenditure in the year 2001.

Concerning contract 2001/0055 (EUR 43 000), a
12.
restricted call for tenders was, in fact, carried out albeit electroni-
cally (e-mail). Of the five potential tenderers contacted, only one
submitted an offer which was accepted.

Concerning contract 2001/0063 (EUR 21 600), it is correct that
no market sounding was performed.

This fact, and the reasons for doing so, were explicitly stated in
the initial ad hoc note to Financial Control requesting commit-
ment and draft-contract approval. Further clarification was sub-
sequently requested and supplied. The Centre has concluded that
a better programming of work would help to avoid urgencies and
to respect the rules.

13 to 16.
the activities described in the Centre’s annual report.

The Court’s analysis shows wide convergence with

In line with the action plan approved by its Management Board
as follow-up to the external evaluation, the Centre introduced, as
of early 2002, a new organisational structure which is based on
its main activities. The Centre has also set up a working group on
activity-based budgeting which will refine its activity-based-budget
approach for 2003.

The 2003 work programme will be the first one within the
framework of the new 2003 to 2006 medium-term priorities.
That work programme will give clear indications of activities and
outputs for the working areas based on the Centre’s basic tasks.

Also in 2003, the Centre will, via an acti-track system, ensure
maximum transparency of the time spent on specific activities.

The Centre’s contract management section has already informed
the horizontal unit concerned that such practices (market-
sounding by e-mail only) are contrary to existing rules and must

The Centre expresses its gratitude for the proactive support of the
Court in this approach.