Commission Regulation (EC, Euratom) No 2343/2002 of 23 December 2002 on the framework Financial Regulation for the bodies referred to in Article 185 of Council Regulation (EC, Euratom) No 1605/2002 on the Financial Regulation applicable to the general budget of the European Communities
Date: 2002-12-23
Institutions: European Commission
Subjects: Community body, EU expenditure, financial regulation, general budget (EU), implementation of the budget, management accounting, public contract

L 357/72

EN

Official Journal of the European Communities

31.12.2002

COMMISSION REGULATION (EC, Euratom) No 2343/2002

of 23 December 2002

on the framework Financial Regulation for the bodies referred to in Article 185 of Council Regula-
tion (EC, Euratom) No 1605/2002 on the Financial Regulation applicable to the general budget of
the European Communities

TITLE I

SUBJECT MATTER . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . 74

TITLE II

Chapter 1

Chapter 2

Chapter 3

Chapter 4

Chapter 5

Chapter 6

Chapter 7

Chapter 8

TITLE III

Chapter 1

Chapter 2

TITLE IV

Chapter 1

Chapter 2

Section 1

Section 2

Section 3

Section 4

BUDGETARY PRINCIPLES . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . 75

Principles of unity and of budget accuracy . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . 75

Principle of annuality . . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . 75

Principle of equilibrium . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . 76

Principle of unit of account .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . 77

Principle of universality . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . 77

Principle of specification . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . 77

Principle of sound financial management .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . 78

Principle of transparency . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . 78

ESTABLISHMENT AND STRUCTURE OF THE BUDGET . . . .. . . . . . . . .. . . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . 78

ESTABLISHMENT OF THE BUDGET . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . 78

Structure and presentation of the budget .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . 79

IMPLEMENTATION OF THE BUDGET . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . 80

General provisions . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . 80

Financial actors . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . 80

Principle of segregation of duties . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . 80

Authorising officer . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . 80

Accounting officer . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . 81

Imprest administrator . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . 82

Chapter 3

Liability of the financial actors . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . 82

Section 1

Section 2

Section 3

General rules . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . 82

Rules applicable to authorising officers by delegation and subdelegation . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . 82

Rules applicable to accounting officers and imprest administrators . . . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . 83

Chapter 4

Revenue operations . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . 83

Section 1

Section 2

Section 3

Section 4

Section 5

Section 6

General provisions . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . 83

Estimate of amounts receivable . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . 83

Establishment of amounts receivable .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . 83

Authorisation of recovery . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . 84

Recovery . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . 84

Specific provisions applicable to fees and charges . . .. . . . . . . . .. . . . . . . . .. . . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . 84

Chapter 5

Expenditure operations . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . 85

Section 1

Section 2

Section 3

Section 4

Section 5

Chapter 6

Chapter 7

Commitment of expenditure . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . 85

Validation of expenditure . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . 85

Authorisation of expenditure . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . 86

Payment of expenditure . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . 86

Time limits for expenditure operations . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . 86

Information Technology Systems . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . 86

Internal auditor . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . 86

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TITLE V

PROCUREMENT . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . 87

TITLE VI

GRANTS AWARDED BY THE COMMUNITY BODY . . . . . . . . .. . . . . . . . .. . . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . 87

TITLE VII

Chapter 1

Chapter 2

Section 1

Section 2

Section 3

PRESENTATION OF THE ACCOUNTS AND ACCOUNTING . . . . . . . .. . . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . 87

Presentation of the accounts . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . 87

Accounting . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . 88

Common provisions . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . 88

General accounts . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . 88

Budgetary accounts . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . 89

Chapter 4

Property inventories .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . 89

TITLE VIII

Chapter 1

Chapter 2

EXTERNAL AUDIT AND DISCHARGE . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . 89

External audit .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . 89

Discharge . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . 89

TITLE IX

TRANSITIONAL AND FINAL PROVISIONS . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . 90

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to Council Regulation (EC, Euratom) No 1605/
2002 of 25 June 2002 on the Financial Regulation applicable
to the general budget of the European Communities, and in
particular Article 185(1) thereof (1),

Having regard to the opinion of the European Parliament (2),

Having regard to the opinion of the Council (3),

Having regard to the opinion of the Court of Auditors (4),

Whereas:

(1)

(2)

The Community bodies set up to assume the burden of
carrying out certain Community activities have legal
personality and hence their own budget governed by
specific financial rules.

In order to guarantee a certain degree of consistency in
these rules compared with Regulation (EC, Euratom) No
1605/2002 (hereinafter ‘the general Financial Regula-
tion’) and pursuant to Article 185(1) of that Regulation,
this framework Financial Regulation must lay down the
rules governing the establishment, implementation and
scrutiny of the budget of the said Community bodies
which actually receive grants charged to the Community
budget (hereinafter ‘Community bodies’).
It is on the
basis of this framework Financial Regulation that each of
those Community bodies will adopt its own financial
rules, which, as indicated in the abovementioned Article
185, may depart from the framework Financial Regula-
tion in accordance with the specific management needs
of
those bodies, but only with the Commission's
consent.

(3)

Like the general Financial Regulation, this framework
Financial Regulation confines itself to stating the broad
principles and basic rules governing the whole of the

(1) OJ L 248, 15.9.2002, p. 1.
(2) Not yet published in the Official Journal.
(3) Not yet published in the Official Journal.
(4) Not yet published in the Official Journal.

(4)

(5)

(6)

(7)

(8)

budgetary sector concerned, while detailed provisions
may subsequently be adopted by these bodies in order to
make their financial rules easier to read.

For the purposes of establishing and implementing the
budget, the four fundamental principles of budgetary
law (unity, universality, specification, annuality), and the
principles of equilibrium, unit of account, sound finan-
cial management and transparency must be reasserted.

the accounting officer,

It is necessary to define the powers and responsibilities
of
the internal auditor and
authorising officers. The last mentioned are fully respon-
sible for all revenue and expenditure operations executed
under their authority and must be held accountable for
their actions, including, where necessary, through disci-
plinary proceedings.

Like the institutions, these Community bodies must not
be allowed to raise loans, in accordance with Article 14
of the general Financial Regulation.

function within the Community
The internal audit
bodies must be performed by the Commission's internal
auditor, who will therefore act as the guarantor of the
the system and its working
overall consistency of
methods in accordance with Article 185(3) of
the
general Financial Regulation.

The timetable for establishing the budget, presenting the
accounts and granting discharge must be aligned on the
equivalent provisions of the general Financial Regulation,
and the authority responsible for granting the Commu-
nity bodies discharge will now be the same as for the
general budget (Article 185(2) of the general Financial
Regulation).

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(9)

(10)

(11)

(12)

(13)

(14)

The accounting rules applied by the Community bodies
must allow for consolidation with the accounts of the
institutions, and to this end they must be adopted by the
Commission's accounting officer
in accordance with
Article 133 of the new general Financial Regulation.

In accordance with Article 46 of the general Financial
Regulation,
establishment plan must now be
submitted to the budgetary authority for approval.

the

Each body could have access to the panel referred to in
Article 66(4) of the general Financial Regulation set up
by the Commission to examine irregularities so that a
similar assessment can be made of identical cases.

Since they receive a grant charged to the Community
budget, the Community bodies must strictly observe the
same requirements as the institutions in the award of
public contracts and grants, in so far as such contracts
and grants are authorised by the Instruments setting up
those bodies; in this respect a reference to the relevant
provisions of
the general Financial Regulation will
suffice.

Like the institutions, the Community bodies may, for the
performance of the tasks entrusted to them, employ
external private sector bodies only where necessary and
not for tasks involving any public service mission or any
use of discretionary powers of judgement, in order to
guarantee that each body is accountable for the imple-
mentation of its budget and adheres to the objectives
assigned to it on its creation.

In support of their requests for payment of the Commu-
nity subsidy, Community bodies must submit a cash-
flow forecast, and the funds paid by the Communities in
respect of that subsidy must bear interest for the benefit
of the Communities.

(15)

(16)

(17)

(18)

There must be specific provisions organising the collec-
tion of fees and charges, which are one of the resources
of these bodies.

In view of the statutory requirements arising from the
instruments setting up Community bodies, the procedure
for presenting the accounts should be adapted and
provision made for the management board to give its
opinion on the accounts.

The new budget structure adopted in the general finan-
cial regulation must also be used by the Community
bodies in so far as this is justified by the nature of their
activities.

The only provisions of the general Financial Regulation
that must be included in this Regulation are those which
are relevant to the Community bodies.

In particular this Regulation must therefore not include
the provisions relating to areas of activity that have no
connection with the Community bodies,
the various
methods of implementation embodying the concept of
externalisation and the information on the budget to be
sent to the European Parliament and the Council. Addi-
tionally, only some of the categories of assigned revenue
in the general Financial Regulation should be taken into
consideration and, finally, the procedure for transfers of
appropriations and establishment of the budget must be
less detailed and less complex,

HAS ADOPTED THIS DECISION:

TITLE I

SUBJECT MATTER

Article 1

This Regulation spells out the essential rules which the financial
rules of each Community body may depart from only where
their specific operating needs so require and with the Commis-
sion's prior consent in accordance with Article 185 of Council
Regulation (EC, Euratom) No 1605/2002 (hereinafter
‘the
general Financial Regulation’).

Article 2

For the purposes of this Regulation:

2.

‘Management board’ shall mean the main internal body of
the Community body that is responsible for taking decisions
on financial and budgetary matters, irrespective of the name
given to it in the constituent instrument of the Community
body;

3.

‘Director’ shall mean the person responsible for imple-
menting the decisions of the management board and the
Community body's budget as authorising officer, irrespective
of the title given to him/her in the constituent instrument of
the Community body;

4.

instrument’

‘Constituent
shall mean the instrument of
Community law governing the main aspects of the creation
and operation of the Community body;

1.

‘Community body’ shall mean any body referred to in
Article 185(1) of the general Financial Regulation;

5.

‘Budgetary authority’ shall mean the European Parliament
and the Council of the European Union.

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TITLE II

BUDGETARY PRINCIPLES

Article 3

Article 8

The establishment and implementation of the budget of the
Community body (hereinafter referred to as ‘the budget’) shall
comply with the principles of unity and budget accuracy,
annuality, equilibrium, unit of account, universality, specifica-
as
tion,
provided for in this Regulation.

sound financial management

and transparency

CHAPTER 1

Principles of unity and of budget accuracy

Article 4

The budget is the instrument which, for each financial year,
forecasts and authorises the revenue and expenditure consid-
ered necessary for the Community body.

Article 5

The budget shall comprise:

(a) own revenue consisting of all fees and charges which the
Community body is authorised to collect by virtue of the
tasks entrusted to it, and any other revenue;

(b) revenue made up of any financial contributions of the host

Member States;

(c) a subsidy granted by the European Communities;

(d) revenue assigned to specific items of expenditure in accor-

dance with Article 19(1);

(e) the expenditure of the Community body, including admin-

istrative expenditure.

Article 6

No revenue shall be collected and no expenditure effected

1.
unless booked to a heading in the budget.

An appropriation must not be entered in the budget if it

2.
is not for an item of expenditure considered necessary.

No expenditure may be committed or authorised in

3.
excess of the appropriations authorised by the budget.

CHAPTER 2

Principle of annuality

Article 7

1.
The budget shall contain differentiated and non-differen-
tiated appropriations, which shall consist of commitment
appropriations and payment appropriations.

2.
Commitment appropriations shall cover the total cost of
the legal commitments entered into during the current financial
year.

3.
Payment appropriations shall cover payments made to
honour the legal commitments entered into in the current
financial year and/or earlier financial years.

4.
Administrative appropriations shall be non-differentiated.
Administrative expenditure arising from contracts covering
periods that extend beyond the financial year, either in accor-
dance with local practice or relating to the supply of equip-
ment, shall be charged to the budget of the financial year in
which it is effected.

Article 9

The revenue of

1.
the Community body referred to in
Article 5 shall be entered in the accounts for the financial year
on the basis of the amounts collected during the financial year.

The revenue of the Community body shall give rise to an

2.
equivalent amount of payment appropriations.

3.
The appropriations authorised in the budget for a given
year may be used solely to cover expenditure committed and
paid in that financial year, and to cover amounts due against
commitments from preceding financial years.

Commitments shall be entered in the accounts on the
the legal commitments entered into up to 31

4.
basis of
December.

5.
Payments shall be entered in the accounts for a financial
year on the basis of the payments effected by the accounting
officer by 31 December of that year at the latest.

Article 10

Appropriations which have not been used at the end of
for which they were entered shall be

1.
the financial year
cancelled.

The appropriations entered in the budget shall be authorised
for one financial year which shall run from 1 January to 31
December.

However, they may, by decision of the management board
taken not later than 15 February, be carried over to the next
financial year only, in accordance with the paragraphs 2 to 8.

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Appropriations relating to staff expenditure may not be

2.
carried over.

appropriations not

and non-differentiated

Appropriations for commitment of differentiated appro-
3.
priations
yet
committed at the close of the financial year may be carried
over in respect of amounts corresponding to commitment
appropriations for which most of the preparatory stages of the
commitment procedure,
to be defined in the rules imple-
menting the financial regulation of each Community body,
have been completed by 31 December; these amounts may
then be committed up to 31 March of the following year.

existing commitments or

4.
Appropriations for payment of differentiated appropria-
tions may be carried over in respect of amounts needed to
cover
linked to
commitment appropriations carried over, when the appropria-
tions provided for the relevant headings in the budget for the
following financial year do not cover
requirements. The
Community body shall first use the appropriations authorised
for the current financial year and shall not use the appropria-
tions carried over until the former are exhausted.

commitments

Non–differentiated appropriations corresponding to obli-
5.
gations duly contracted at the close of the financial year shall
be carried over automatically to the following financial year
only.

Appropriations

carried over which have not been
6.
committed by 31 March of year N+1 shall be automatically
cancelled.

Appropriations carried over in this way shall be identified in
the accounts.

7.
The appropriations available at 31 December arising from
the assigned revenue referred to in Article 19 shall be carried
over automatically.

appropriations on the corresponding budget heading for the
current financial year. They may not apply to new expenditure
of a kind not yet approved in principle in the last budget duly
adopted.

Expenditure which must be paid in advance, for example
2.
rents, may give rise to payments from 1 December onwards to
be charged to the appropriations for the following financial
year.

Article 14

1.
If the budget of the Community body has not been finally
adopted at the beginning of the financial year, the following
rules shall apply to commitment and payment of expenditure
which it has been possible to book to a specific heading in the
budget as part of
the last budget duly
adopted.

implementation of

2.
Commitments may be made per chapter up to a
maximum of one quarter of the total appropriations authorised
in the chapter in question for the previous financial year, plus
one twelfth for each month which has elapsed.

Payments may be made monthly per chapter up to a maximum
of one twelfth of the appropriations authorised in the chapter
in question for the previous financial year.

The limit of the appropriations provided for in the statement of
estimates of revenue and expenditure may not be exceeded.

At the request of the director, if the continuity of action
3.
by the Community body and management needs so require,
the management board may simultaneously authorise two or
more provisional twelfths for both commitments and payments
over and above those automatically made available by the
provisions of paragraphs 1 and 2.

The appropriations available corresponding to assigned revenue
carried over must be used first.

The additional twelfths shall be authorised in full and shall not
be divisible.

Article 11

Where amounts are decommitted, as a result of total or partial
non-implementation of
for which they were
the actions
earmarked, in any financial year after that in which the appro-
priations were committed, the appropriations concerned shall
be cancelled.

CHAPTER 3

Principle of equilibrium

Article 15

Article 12

The appropriations entered in the budget may be committed
with effect from 1 January, once the budget has become defini-
tive.

The budget revenue and payment appropriations must be

1.
in balance.

2.
Commitment appropriations may not exceed the amount
of the Community subsidy, plus own revenue and any other
revenue referred to in Article 5.

Article 13

3.

The Community body may not raise loans.

1.
As from 15 November of each year, routine administra-
tive expenditure may be committed in advance against the
appropriations provided for the following financial year. Such
commitments may not, however, exceed one quarter of the

4.
Funds paid to the Community body shall constitute for its
budget a balancing subsidy which shall count as prefinancing
within the meaning of Article 81(1)(b)(i) of the general Finan-
cial Regulation.

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Article 16

1.
If the balance of the outturn account within the meaning
of Article 81 is positive, it shall be repaid to the Commission
up to the amount of the Community subsidy paid during the
year. The part of the balance exceeding the amount of the
Community subsidy paid during the year shall be entered in
the budget for the following financial year as revenue.

The difference between the Community subsidy entered in the
general budget and that actually paid to the body shall be
cancelled.

2.
If the balance of the outturn account provided for in
Article 81 is negative, it shall be entered in the budget for the
following financial year.

3.
The revenue or payment appropriations shall be entered
in the budget during the budgetary procedure using the letter
of amendment procedure or, while budget implementation is
under way, by means of an amending budget.

CHAPTER 4

Principle of unit of account

Article 17

The budget shall be drawn up and implemented in euro and
the accounts shall be presented in euro.

However, for cash-flow purposes, the accounting officer and, in
the case of imprest accounts, imprest administrators, shall be
authorised to carry out operations in national currencies as laid
down in the financial rules of each Community body.

CHAPTER 5

Principle of universality

Article 18

Total revenue shall cover total payment appropriations, subject
to Article 19. All revenue and expenditure shall be entered in
to
full without any adjustment against each other, subject
Article 21.

Article 19

The following items of revenue shall be used to finance

1.
specific items of expenditure:

(a) revenue earmarked for a specific purpose, such as income

from foundations, subsidies, gifts and bequests;

(b) contributions to the Community body's activities from
Member States, non-member countries or miscellaneous
bodies, in so far as this is provided for in the agreement
concluded between the Community body and the Member
States, non-member countries or bodies in question.

All items of revenue within the meaning of paragraph 1
2.
shall cover all direct or indirect expenditure incurred by the
activity or purpose in question.

3.
The budget shall carry headings to accommodate the cate-
gories of assigned revenue referred to in paragraph 1 and wher-
ever possible shall indicate the amount.

Article 20

1.
The Director may accept any donation made to the
Community body, such as foundations, subsidies, gifts and
bequests.

2.
Acceptance of donations which may involve some finan-
cial charge shall be subject to the prior authorisation of the
management board, which shall take a decision within two
months of the date on which the request is submitted to it. If
the management board fails to take a decision within that
period, the donation shall be deemed accepted.

Article 21

1.
The financial regulation of each Community body shall
specify the cases where certain amounts may be deducted from
requests for payment, invoices or statements, which shall then
be passed for payment of the net amount.

Discounts,
refunds and rebates on invoices and payment
requests shall not be recorded as revenue of the Community
body.

2.
The cost of products or services provided to the Commu-
nity body shall be charged to the budget for the full ex-tax
amount, where they incorporate taxes refunded:

(a) either by the Member States pursuant to the Protocol on
the Privileges and Immunities of the European Commu-
nities, provided that it applies to the Community body;

(b) or by a Member State or non-member country on the basis

of other relevant agreements.

Any national taxes temporarily borne by the Community body
under the first subparagraph shall be entered in a suspense
account until they are refunded by the State concerned.

Any negative balance shall be entered in the budget as

3.
expenditure.

4.
Adjustments may be made in respect of exchange differ-
ences occurring in the implementation of the budget. The final
gain or loss shall be included in the balance for the year.

CHAPTER 6

Principle of specification

Article 22

The appropriations in their entirety shall be earmarked for
specific purposes by title and chapter; the chapters shall be
further subdivided into articles and items.

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Article 23

The director may make transfers from one article to

1.
another within each chapter.

He/she shall inform the management board as soon as possible
of the transfers made pursuant to the first paragraph.

2.
The director may make transfers from one title to another
and from one chapter to another within a total limit of 10 % of
the appropriations for the financial year. Beyond this limit, he/
she may propose to the management board transfers of appro-
priations from one title to another or from one chapter to
another within a title. The management board shall have one
month in which to oppose such transfers; after this time limit
they shall be deemed to be adopted.

3.
Proposals for transfers and transfers carried out under this
Article shall be accompanied by appropriate and detailed
supporting documents showing the implementation of appro-
priations and estimates of requirements up to the end of the
financial year, both for the headings to be credited and for
those from which the appropriations are drawn.

Article 24

Appropriations may be transferred only to budget head-
1.
ings for which the budget has authorised appropriations or
carries a token entry (p.m.).

2.
Appropriations corresponding to assigned revenue may
be transferred only if they are used for the purpose to which
the revenue is assigned.

CHAPTER 7

Principle of sound financial management

The principle of economy requires that the resources used
2.
by the Community body for the pursuit of its activities shall be
made available in due time, in appropriate quantity and quality
and at the best price.

The principle of efficiency is concerned with the best relation-
ship between resources employed and results achieved.

The principle of effectiveness is concerned with attaining the
specific objectives set and achieving the intended results.

Specific, measurable, achievable,

3.
relevant and timed
objectives shall be set for all sectors of activity covered by the
budget. Achievement of those objectives shall be monitored by
performance indicators for each activity and information shall
be provided to the management board by the director. This
information shall be provided annually and at the latest in the
documents accompanying the preliminary draft budget.

In order to improve decision-making, the Community
4.
body shall regularly carry out ex ante and ex post evaluations
of programmes or activities. Such evaluations shall be applied
to all programmes and activities which entail
significant
spending and evaluation results shall be sent to the manage-
ment board.

CHAPTER 8

Principle of transparency

Article 26

Article 25

1.
Budget appropriations shall be used in accordance with
the principle of sound financial management, that is to say, in
accordance with the principles of economy, efficiency and
effectiveness.

1.
The budget shall be drawn up and implemented and the
accounts presented in compliance with the principle of trans-
parency.

2.
The budget and amending budgets, as finally adopted,
shall be published in the Official Journal of the European Commu-
nities within two months of their adoption.

TITLE III

ESTABLISHMENT AND STRUCTURE OF THE BUDGET

CHAPTER 1

Establishment of the budget

The estimate of revenue and expenditure of the Commu-

3.
nity body shall include:

Article 27

(a) an establishment plan setting the number of permanent
and temporary posts authorised within the limits of the
budget appropriations, by grade and by category;

1.
The budget shall be established in accordance with the
provisions of the constituent instrument of that Community
body.

In accordance with its

2.
the
Community body shall send the Commission an estimate of its
revenue and expenditure and the general guidelines underlying
that estimate, together with its work programme, by 31 March
each year at the latest.

instrument,

constituent

(b) where there is a change in the number of persons in post, a

statement justifying the request for new posts;

(c) a quarterly estimate of cash payments and receipts;

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(d) information on the achievement of all previously set objec-
tives for the various activities as well as new objectives
measured by
shall be
consulted and referred to as evidence of the likely merits of
a proposed budget amendment.

evaluation results

indicators;

4.
As part of the procedure for adopting the general budget,
the Commission shall send the Community body's statement of
estimates to the budgetary authority and propose the amount
of the subsidy for the Community body and the number of
staff it considers that the body needs.

The budgetary authority shall adopt the establishment
5.
plan of the Community body and any subsequent amendment
thereto in accordance with Article 32(1).

The budget and the establishment plan shall be adopted
6.
by the management board. They become definitive after final
adoption of
the
subsidy and the establishment plan and if necessary the budget
and the establishment plan shall be adjusted accordingly.

the general budget setting the amount of

Article 28

Any amendment to the budget,
including the establishment
plan, shall be the subject of an amending budget adopted by
the same procedure as the initial budget, in accordance with
the provisions of the constituent instrument and Article 27.

CHAPTER 2

Structure and presentation of the budget

Article 29

The budget shall comprise a statement of revenue and a state-
ment of expenditure.

Article 31

The budget shall show:

1.

in the statement of revenue:

(a) the estimated revenue of the Community body for the

financial year in question;

(b) the estimated revenue for the preceding financial year

and the revenue for year n – 2;

(c) appropriate remarks on each revenue line;

2.

in the statement of expenditure:

(a) the commitment and payment appropriations for the

financial year in question;

(b) the commitment and payment appropriations for the
preceding financial year, and the expenditure committed
and the expenditure paid in year n – 2;

(c) a summary statement of the schedule of payments due
in subsequent financial years to meet budget commit-
ments entered into in earlier financial years;

(d) appropriate remarks on each subdivision.

Article 32

1.
The establishment plan referred to in Article 27 shall
show next to the number of posts authorised for the financial
year, the number authorised for the preceding year and the
number of posts actually filled.

It shall constitute an absolute limit for the Community body;
no appointment may be made in excess of the limit set.

However, save in the case of grades A 1, A 2 and A 3, the
management board may modify the establishment plan by up
to 10 % of posts authorised, subject to two conditions:

(a) that the volume of staff appropriations corresponding to a

full financial year is not affected;

Article 30

(b) that the limit of the total number of posts authorised by

the establishment plan is not exceeded.

In so far as it is justified by the nature of the Agency's activities,
the statement of expenditure must be set out on the basis of a
nomenclature with a classification by purpose. This nomencla-
ture shall be determined by the Community body and shall
make a clear distinction between administrative appropriations
and operating appropriations.

2.
By way of derogation from the second subparagraph of
paragraph 1, the effects of part-time work authorised by the
appointing authority in accordance with the Staff Regulations
may be offset by other appointments.

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TITLE IV

IMPLEMENTATION OF THE BUDGET

2.
Technical expertise tasks and administrative, preparatory
or ancillary tasks involving neither the exercise of public
authority nor the use of discretionary powers of judgement
may be entrusted by contract to external private-sector entities
or bodies, where this proves to be indispensable.

CHAPTER 1

General provisions

Article 33

The director shall perform the duties of authorising officer. He/
she shall implement the revenue and expenditure of the budget
in accordance with the financial rules of the Community body,
on his/her own responsibility and within the limits of the
appropriations authorised.

CHAPTER 2

Financial actors

Article 34

S e c ti on 1

1.
The director may delegate his/her powers of budget
implementation to staff of the Community body covered by the
regulations and rules applicable to officials and other servants
of the European Communities (hereinafter referred to as the
‘Staff Regulations’),
in accordance with the conditions laid
down by the financial rules, within the meaning of Article 185
of the general Financial Regulation, adopted by the manage-
ment board. Those so empowered may act only within the
limits of the powers expressly conferred upon them.

The delegatee may subdelegate the powers received as
2.
provided for in the rules for implementing this Regulation
referred to in Article 99. Each act of subdelegation shall require
the explicit agreement of the director.

Article 35

All financial actors within the meaning of Chapter 2 of
1.
this title shall be prohibited from taking any measures of
budget implementation which may bring their own interests
into conflict with those of the Community body. Should such a
case arise,
in question must refrain from such
measures and refer the matter to the competent authority.

the actor

2.
There is a conflict of interests where the impartial and
objective exercise of the functions of an actor in the implemen-
tation of the budget or an internal auditor is compromised for
reasons involving family, emotional
life, political or national
affinity, economic interest or any other shared interest with the
beneficiary.

The competent authority referred to in paragraph 1 shall
3.
be the immediate superior of the member of staff concerned. If
the member of staff is the director, the competent authority
shall be the management board.

Article 36

The budget shall be implemented by the director in the

1.
departments placed under his/her authority.

Principle of segregation of duties

Article 37

The duties of authorising officer and accounting officer shall be
segregated and mutually incompatible.

S e c ti on 2

Authorising officer

Article 38

1.
The authorising officer shall be responsible for imple-
menting revenue and expenditure in accordance with the prin-
ciples of sound financial management and for ensuring that the
requirements of legality and regularity are complied with.

2.
To implement expenditure, the authorising officer shall
make budget commitments and legal commitments, shall vali-
date expenditure and authorise payments and shall undertake
the preliminaries for the implementation of appropriations.

3.
Implementation of revenue shall comprise drawing up
estimates of amounts receivable, establishing entitlements to be
recovered and issuing recovery orders. It shall involve waiving
established entitlements where appropriate.

4.
The authorising officer shall put in place, in compliance
with the minimum standards adopted by the management
board on the basis of equivalent standards laid down by the
Commission for its own departments, and having due regard to
the risks associated with the management environment and the
nature of the action financed, the organisational structure and
the internal management and control systems and procedures
including where
suited to the performance of his/her duties,
appropriate ex post verifications.

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The authorising officer shall establish within his/her depart-
ments an expertise and advice function designed to help him/
her control the risks involved in his/her activities.

5.
Before an operation is authorised, the operational and
financial aspects shall be verified by members of staff other
than the one who initiated the operation. Initiation and the ex
ante and ex post verification of an operation shall be separate
functions.

6.
The authorising officer shall conserve the supporting
documents relating to operations carried out for a period of
five years from the date of the decision granting discharge in
respect of implementation of the budget.

Article 39

Initiation of an operation as referred to in Article 38(5)
1.
the operations which are
shall be understood to mean all
preparatory to the adoption of
the acts implementing the
budget by the authorising officers responsible referred to in
Articles 33 and 34.

2.
Ex ante verification of an operation as referred to in
Article 38(5) shall be understood to mean all the ex ante checks
put in place by the authorising officer responsible in order to
verify the operational and financial aspects.

3.
Each operation shall be subject of at least one ex ante
verification. The purpose of this verification shall be to ascer-
tain that:

(a) the expenditure is in order and conforms to the relevant

provisions;

(b) the principle of sound financial management referred to in

Article 25 has been applied.

4.
The purpose of ex post verifications of documents and,
where appropriate, on-the-spot verifications shall be to verify
that operations financed by the budget have been correctly
implemented and in particular that the criteria referred to in
paragraph 3 have been complied with. These verifications may
be organised on a sample basis using risk analysis.

The officials or other staff responsible for the verifications
5.
referred to in paragraphs 2 and 4 shall be different from those
performing the tasks referred to in paragraph 1 and shall not
be their subordinates.

All staff responsible for scrutinising the management of
6.
financial operations must have the necessary professional skills.
They shall respect a specific code of professional standards
adopted by the Community body and based on standards laid
down by the Commission for its own departments.

Article 40

1.
The authorising officer shall report to the management
board on the performance of his/her duties in the form of an
annual activity report (hereinafter ‘authorising officer's report’),
together with financial and management
information. This
report shall indicate the results of his/her operations by refer-
ence to the objectives set, the risks associated with these opera-

tions, the use made of the resources provided and the way the
internal control system functions. The internal auditor within
the meaning of Article 71 shall take note of the annual activity
report and any other pieces of information identified.

By no later than 15 June each year, the management
2.
board shall send the budgetary authority and the Court of
Auditors an analysis and an assessment of the authorising offi-
cer's annual report on the previous financial year. This analysis
and assessment shall be included in the annual report of the
Community body,
in accordance with the provisions of the
constituent instrument.

Article 41

Any member of staff involved in the financial management and
control of transactions who considers that a decision he/she is
required by his/her superior to apply or to agree to is irregular
or contrary to the principles of sound financial management or
the professional rules he/she is required to observe shall inform
the Director in writing and,
if the latter fails to take action
within a reasonable period, the panel referred to in Article
47(4) and the management board. In the event of any illegal
activity, fraud or corruption which may harm the interests of
the Community, he/she shall inform the authorities and bodies
designated by the applicable legislation.

Article 42

Where powers of budget
implementation are delegated or
subdelegated in accordance with Article 34, Article 38(1), (2)
and (3) shall apply mutatis mutandis to the authorising officers
by delegation or subdelegation.

S e c ti on 3

Accounting officer

Article 43

1.
The management board shall appoint an accounting
officer, covered by the Staff Regulations, who shall be respon-
sible in the Community body for:

(a) proper implementation of payments, collection of revenue
and recovery of amounts established as being receivable;

(b) preparing and presenting the accounts in accordance with

Title VII;

(c) keeping the accounts in accordance with Title VII;

(d) implementing, in accordance with Title VII, the accounting
rules and methods and the chart of accounts in accordance
with the provisions
the Commission's
accounting officer;

adopted by

(e) laying down and validating the accounting systems and
where appropriate validating systems laid down by the
authorising officer to supply or justify accounting informa-
tion;

(f) treasury management.

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The accounting officer shall obtain from the authorising
2.
officer, who shall guarantee its reliability, all the information
necessary for the production of accounts which give a true
image of the Community body's assets and of budget imple-
mentation.

3.
Subject to paragraph 4 of this Article and Article 44, the
accounting officer is alone empowered to manage monies and
other assets. He/she shall be responsible for their safekeeping.

The accounting officer may delegate certain tasks to
4.
subordinates subject to the Staff Regulations, where this is
indispensable for the performance of his/her duties.

The instrument of delegation shall

5.
entrusted to the delegatees and their rights and obligations.

lay down the tasks

S e c ti o n 4

Imprest administrator

Article 44

Where it proves indispensable for the payment of small sums
and for the collection of other revenue referred to in Article 5,
imprest accounts may be set up which shall be endowed by the
accounting officer and shall be placed under the responsibility
of imprest administrators designated by him/her.

The maximum amount of each item of expenditure or revenue
that can be paid by the imprest administrator to third parties
may not exceed a certain amount to be specified by each
Community body for each item of expenditure or revenue.

CHAPTER 3

Liability of the financial actors

S e c ti o n 1

General rules

Article 45

1. Without prejudice to any disciplinary action, authorising
officers by delegation and subdelegation may at any time have
their delegation or subdelegation withdrawn temporarily or
definitively by the authority which appointed them.

The authorising officer may at any time withdraw his/her
agreement to a specific subdelegation.

to any disciplinary

2. Without prejudice
the
accounting officer may at any time be suspended temporarily
or definitively from his/her duties by the management board.
The management board shall appoint an interim accounting
officer.

action,

3. Without prejudice to any disciplinary action,
imprest
administrators may at any time be suspended temporarily or
definitively from their duties by the accounting officer.

Article 46

1.
The provisions of this chapter are without prejudice to
the criminal-law liability which the authorising officer and the
persons referred to in Article 45 may incur as provided in the
applicable national law and in the provisions in force on the
protection of the Communities' financial interests and on the
fight against corruption involving officials of the Communities
or officials of Member States.

2.
Each authorising officer, accounting officer or imprest
administrator shall be liable to disciplinary action and payment
of compensation as laid down in the Staff Regulations, without
prejudice to Articles 47, 48 and 49. In the event of illegal
activity, fraud or corruption which may harm the interests of
the Community, the matter will be referred to the authorities
and bodies designated by the applicable legislation.

S e c ti on 2

Rules applicable to authorising officers by delegation and
subdelegation

Article 47

The authorising officer shall be liable to payment of
1.
compensation as laid down in the Staff Regulations. Accord-
ingly, he/she may be required to make good, in whole or in
part, any damage suffered by the Communities as a result of
serious misconduct on his/her part in the course of or in
connection with the performance of his/her duties, in particular
if he/she determines entitlements to be recovered or issues
recovery orders, commits expenditure or signs a payment order
without complying with this Financial Regulation and its imple-
menting rules.

The same shall apply where, through serious misconduct, he/
she fails to draw up a document establishing an amount recei-
vable or if he/she fails to issue a recovery order or is, without
late in issuing it, or if he/she fails to issue a
justification,
payment order or is late in issuing it, thereby rendering the
agency liable to civil action by third parties.

An authorising officer by delegation or subdelegation
2.
who considers that a decision falling under his/her responsi-
bility is irregular or contrary to the principles of sound finan-
cial management shall
inform the delegating authority in
writing.
the delegating authority then gives a reasoned
instruction in writing to the authorising officer by delegation
or subdelegation to implement the decision in question, the
latter must implement it and may not be held liable.

If

3.
In the event of delegation, the authorising officer shall
continue to be responsible for the effectiveness of the internal
management and control systems put in place and for the
choice of the authorising officer by delegation.

if any, should be,

The panel set up by the Commission to determine
4.
irregularity has occurred and what the
whether a financial
consequences,
in accordance with Article
66(4) of the general Financial Regulation, may exercise the
same powers in respect of the Community body as it does in
respect of Commission departments, if the management board
so decides.

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If it does not so decide, the management board shall set up a
functionally independent panel that is specialised in this field.

On the basis of the opinion of this panel, the director shall
decide whether to initiate disciplinary proceedings or proceed-
ings for the payment of compensation. If the panel detects
systemic problems, it shall send a report with recommendations
to the authorising officer and to the Commission's internal
auditor. If the opinion implicates the director, the panel shall
to the management board and the Commission's
send it
internal auditor.

5.
Any member of staff may be required to make good, in
whole or in part, any damage suffered by the Community body
as a result of serious misconduct on his/her part in the course
of or in connection with the performance of his/her duties.

The appointing authority shall take a reasoned decision, after
completing the formalities laid down by the Staff Regulations
with regard to disciplinary matters.

S e c ti o n 3

Rules

applicable

to

accounting
administrators

officers

and

imprest

Article 48

An accounting officer may be liable to disciplinary action and
payment of compensation, as laid down in the Staff Regula-
tions, in particular where:

(a) he/she loses or damages monies, assets and documents in
his/her keeping or causes them to be lost or damaged by
his/her negligence;

(b) he/she alters bank accounts or postal giro accounts without

notifying the authorising officer in advance;

(c) he/she recovers or pays amounts which are not in confor-
mity with the corresponding recovery or payment orders;

(d) he/she fails to collect revenue due.

CHAPTER 4

Revenue operations

S e c ti on 1

General provisions

Article 50

The Community body shall present to the Commission requests
the Community subsidy,
for payment of all or part of
supported by a cash-flow forecast, under terms and at intervals
agreed with the Commission.

Article 51

The funds paid to the Community body by the Commission by
way of the subsidy shall bear interest for the benefit of the
general budget.

S e c ti on 2

Estimate of amounts receivable

Article 52

An estimate of the amount receivable shall first be made by the
authorising officer responsible in respect of any measure or
situation which may give rise to or modify an amount owing
to the Community body.

S e c ti on 3

Establishment of amounts receivable

Article 53

Establishment of an amount receivable is the act by which

1.
the authorising officer or authorising officer by delegation:

Article 49

(a) verifies that the debt exists;

An imprest administrator may be liable to disciplinary action
and payment of compensation, as laid down in the Staff Regu-
lations, in particular where:

(a) he/she loses or damages monies, assets and documents in
his/her keeping or causes them to be lost or damaged by
his/her negligence;

(b) he/she cannot provide proper supporting documents for

the payments he/she has made;

(c) he/she makes payments

to persons other

than those

entitled;

(d) he/she fails to collect revenue due.

(b) determines or verifies the reality and the amount of the

debt;

(c) verifies the conditions in which the debt is due.

Any amount receivable that is identified as being certain,
2.
of a fixed amount and due must be established by a recovery
order given to the accounting officer, accompanied by a debit
note sent to the debtor. Both of these documents shall be
drawn up and sent by the authorising officer responsible.

3. Without prejudice to the provisions laid down in the
rules, contract or agreement applicable, any debt not repaid on
the due date laid down in the debit note shall bear interest in
accordance with the detailed rules for implementation of the
general Financial Regulation.

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In duly substantiated cases, certain routine revenue items

4.
may be established provisionally.

Provisional establishment shall cover the recovery of several
individual amounts which need not therefore be established
individually.

nity body. Such an adjustment shall be by decision of the
authorising officer responsible and shall be suitably substan-
tiated.

Article 56

Before the end of the financial year, the authorising officer shall
amend the amounts established provisionally to ensure that
they correspond to the amounts receivable actually established.

1.
Upon actual recovery of the sum due, the accounting
officer shall make an entry in the accounts and shall inform the
authorising officer responsible.

S e c ti o n 4

Authorisation of recovery

Article 54

The authorisation of recovery is the act whereby the author-
ising officer responsible instructs the accounting officer, by
issuing a recovery order,
to recover an amount receivable
which he/she has established.

S e c ti o n 5

Recovery

Article 55

1.

Amounts wrongly paid shall be recovered.

2.
The accounting officer shall act on recovery orders for
amounts receivable duly established by the authorising officer
or authorising officer responsible. He/she shall exercise due dili-
gence to ensure that the Community body receives its revenue
and shall see that its rights are safeguarded.

3. Where the authorising officer responsible is planning to
waive recovery of an established amount receivable, he/she
shall ensure that the waiver is in order and complies with the
principle of sound financial management.

Such a waiver shall be by decision of the authorising officer,
which must be substantiated. The authorising officer may not
delegate such a decision.

The waiver decision shall state what action has been taken to
secure recovery and the points of law and fact on which it is
based.

4.
The authorising officer responsible shall cancel an estab-
lished amount receivable when the discovery of a mistake as to
a point of law or fact reveals that the amount had not been
correctly established. Such cancellation shall be by decision of
the authorising officer
responsible and shall be suitably
substantiated.

The authorising officer

responsible shall adjust

5.
the
amount of an established debt upwards or downwards when
the discovery of a factual error entails the alteration of the
amount of the debt, provided that this correction does not
involve the loss of the established entitlement of the Commu-

A receipt shall be issued in respect of all cash payments

2.
made to the accounting officer.

Article 57

1.
If actual recovery has not taken place by the due date
stipulated in the debit note, the accounting officer shall inform
the authorising officer responsible and immediately launch the
procedure for effecting recovery by any means offered by the
law, including, where appropriate, by offsetting and, if this is
not possible, by enforced recovery.

The accounting officer shall recover amounts by offsetting
2.
them against equivalent claims that the Community body has
on any debtor who himself or herself has a claim on the
Community body that is certain, of a fixed amount and due,
provided that offsetting is legally possible.

Article 58

in collaboration with the authorising
The accounting officer,
officer responsible, may allow additional time for payment only
at the written request of the debtor, with due indication of the
reasons, provided that the following two conditions are met:

(a) the debtor undertakes to pay interest at the rate specified
the detailed rules for implementation of the general Finan-
cial Regulation for the entire additional period allowed,
starting from the date on which the payment was originally
due;

(b) in order to safeguard the rights of the Community body,
the debtor provides a financial guarantee covering both the
principal sum and the interest.

S e c ti on 6

Specific provisions applicable to fees and charges

Article 59

1. Where the Community body collects fees and charges
referred to in Article 5(a), an overall provisional estimate of
such fees and charges shall be made at the beginning of each
financial year.

As a general rule, the Community body shall provide
2.
services by virtue of the tasks entrusted to it only after the
corresponding fee or charge has been paid in its entirety.

3.
If, by way of exception, a service has been provided
without prior payment of the corresponding charge or fee,
sections 3, 4 and 5 of this chapter shall apply.

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CHAPTER 5

Expenditure operations

Article 60

Every item of expenditure shall be committed, validated,

1.
authorised and paid.

Every commitment of expenditure shall be preceded by a

2.
financing decision.

The work programme of the Community body shall be
3.
equivalent to a financing decision for the activities it covers,
provided that they are clearly identified and the underlying
criteria are spelled out precisely.

Administrative

4.
without a prior financing decision.

appropriations may be

implemented

S e c ti o n 1

Commitment of expenditure

Article 61

1.
The budget commitment is the operation reserving the
appropriations necessary to cover subsequent payments to
honour a legal commitment.

2.
The legal commitment is the act whereby the authorising
officer responsible enters into or establishes an obligation
which results in a charge for the budget.

The budget commitment is individual when the benefi-

3.
ciary and the amount of the expenditure are known.

4.
The budget commitment is global when at least one of
the elements necessary to identify the individual commitment
is still not known.

The budget commitment

5.
is
intended to cover routine administrative expenditure and either
the amount or
the final beneficiaries are not definitively
known.

is provisional when it

At the end of the periods referred to in the first subparagraph,
the unused balance of
these budget commitments shall be
decommitted by the authorising officer responsible.

3.
The legal commitments entered into for actions extending
over more than one financial year and the corresponding
budget commitments shall, save in the case of staff expenditure,
have a final date for implementation set in compliance with the
principle of sound financial management.

Any parts of such commitments which have not been executed
six months after that final date shall be decommitted in accor-
dance with Article 11.

Article 63

When adopting a budget commitment, the authorising officer
responsible shall ensure that:

(a) the expenditure has been charged to the correct item in the

budget;

(b) the appropriations are available;

(c) the expenditure conforms to the applicable provisions, in
particular those of the constituent instrument, the financial
rules of each Community body and all acts adopted
pursuant to them;

(d) the principle of sound financial management is complied

with.

S e c ti on 2

Validation of expenditure

Article 64

Validation of expenditure is the act whereby the authorising
officer responsible:

(a) verifies the existence of the creditor's entitlement;

(b) verifies the conditions in which payment is due;

(c) determines or verifies the reality and the amount of the

claim.

The provisional budget commitment shall be implemented
legal
either by the conclusion of one or more individual
commitments giving rise to an entitlement
to subsequent
payments or, in exceptional cases relating to expenditure on
staff management, directly by payments.

Article 62

1.
In respect of any measure which may give rise to expen-
diture chargeable to the budget, the authorising officer respon-
sible must first make a budget commitment before entering
into a legal obligation with third parties.

Individual

2.
legal commitments relating to individual or
provisional budget commitments shall be concluded by 31
December of year n.

Article 65

Validation of

1.
shall be based on
any expenditure
supporting documents attesting the creditor's entitlement, on
the basis of a statement of services actually rendered, supplies
actually delivered or work actually carried out, or on the basis
of other documents justifying payment.

2.
The validation decision shall be expressed by the signing
of a ‘passed for payment’ voucher by the authorising officer
responsible.

3.
In a non-computerised system, ‘passed for payment’ shall
take the form of a stamp incorporating the signature of the
authorising officer
In a computerised system,
‘passed for payment’ shall take the form of validation using the
personal password of the authorising officer responsible.

responsible.

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S e c ti o n 3

Authorisation of expenditure

Article 66

1.
Authorisation of expenditure is the act whereby the
authorising officer responsible, by issuing a payment order,
instructs the accounting officer to pay an item of expenditure
which he/she has validated.

2.
The payment order shall be dated and signed by the
authorising officer responsible, then sent to the accounting
officer. The supporting documents shall be kept by the author-
ising officer responsible in accordance with Article 38(6).

3. Where appropriate,
to the
accounting officer shall be accompanied by a document certi-
fying that
the goods have been entered in the inventories
referred to in Article 90(1).

the payment order

sent

S e c ti o n 4

Payment of expenditure

Article 67

Payment shall be made on production of proof that the
1.
relevant action has been carried out in accordance with the
provisions of the basic act within the meaning of Article 49 of
the general Financial Regulation or the contract or grant agree-
ment, and shall cover one of the following operations:

(a) payment of the entire amount due;

(b) payment of the amount due in any of the following ways:

(i) prefinancing, which may be divided into a number of

payments;

(ii) one or more interim payments;
(iii) payment of the balance of the amounts due.

Prefinancing shall count in full or in part against the interim
payments.

The entire prefinancing and interim payments shall count
against the payment of balances.

A distinction shall be made in the accounts between the
2.
different types of payment referred to in paragraph 1 at the
time they are made.

Article 68

Payment of expenditure shall be made by the accounting officer
within the limits of the funds available.

S e c ti o n 5

Time limits for expenditure operations

Article 69

The validation, authorisation and payment of expenditure must
be carried out within the time limits specified in, and in accor-
dance with the provisions of, the detailed rules for implementa-
tion of the general Financial Regulation.

CHAPTER 6

IT systems

Article 70

Where revenue and expenditure operations are managed by
means of computer systems, documents may be signed by a
computerised or electronic procedure.

CHAPTER 7

Internal auditor

Article 71

1.
The Community body shall have an internal auditing
function which must be performed in compliance with the rele-
vant international standards.

2. Without prejudice to Article 38(4)
the Commission's
internal auditor shall exercise, the same powers with respect to
the Community bodies as with respect to Commission depart-
ments.

Article 72

1.
The internal auditor shall advise the Community body on
dealing with risks, by issuing independent opinions on the
quality of management and control systems and by issuing
recommendations for improving the conditions of implementa-
tion of operations and promoting sound financial management.

He/she shall be responsible:

(a) for assessing the suitability and effectiveness of internal
management systems and the performance of departments
in implementing programmes and actions by reference to
the risks associated with them; and

(b) for assessing the suitability and quality of

the internal
control systems applicable to every budgetary implementa-
tion operation.

2.
The internal auditor shall perform his/her duties on all
the Community body's activities and departments. He/she shall
enjoy full and unlimited access to all information required to
perform his/her duties.

The internal auditor shall report

3.
to the management
board and the Director on his/her findings and recommenda-
tions. They shall ensure that action is taken on recommenda-
tions resulting from audits.

internal audit report setting out,

The internal auditor shall submit to the Community body
4.
an annual
the
number and type of internal audits conducted, the recommen-
dations made and the action taken on these recommendations.
This annual report shall also mention any systemic problems
detected by the specialised panel set up under Article 66(4) of
the general Financial Regulation.

inter alia,

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Each year

the Community body shall

send to the
5.
authority responsible for discharge and to the Commission, a
report drawn up by its director summarising the number and
type of internal audits conducted by the internal auditor, the
recommendations made and the action taken on these recom-
mendations.

Article 73

The responsibility of the internal auditor for action taken in the
performance of his/her duties shall be determined in accor-
dance with Article 87 of the general Financial Regulation.

TITLE V

PROCUREMENT

Article 74

As regards procurement, the relevant provisions of the general Financial Regulation and the detailed rules
for implementing that Regulation shall apply.

TITLE VI

GRANTS AWARDED BY THE COMMUNITY BODY

Article 75

Where the Community body may award grants in accordance with its constituent instrument, the relevant
provisions of the general Financial Regulation and the detailed rules for implementing that Regulation shall
apply.

TITLE VII

PRESENTATION OF THE ACCOUNTS AND ACCOUNTING

CHAPTER 1

Article 78

Presentation of the accounts

The financial statements shall be drawn up in accordance with
the generally accepted accounting principles specified in the
detailed rules for implementing the general Financial Regula-
tion, namely:

Article 76

(a) going concern basis;

The annual accounts of the Community body shall comprise:

(b) prudence;

(a) the financial statements of the Community body;

(c) consistent accounting methods;

(b) the reports on implementation of

the budget of

the

Community body.

(d) comparability of information;

The accounts of the Community body shall be accompanied by
a report on budgetary and financial management during the
year.

Article 77

The accounts must comply with the rules and be accurate and
comprehensive and present a true and fair view:

(a) as regards the financial statements, of the assets and liabil-
ities, charges and income, entitlements and obligations not
shown as assets or liabilities and cash flow;

(b) as regards reports on budgetary implementation, of revenue

and expenditure operations.

(e) materiality;

(f) no netting;

(g) reality over appearance;

(h) accrual-based accounting.

Article 79

In accordance with the principle of

1.
accrual-based
accounting, the financial statements shall show the charges and
income for the financial year, regardless of the date of payment
or collection.

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The value of assets and liabilities shall be determined in
2.
accordance with the valuation rules
laid down by the
accounting methods provided for in Article 132 of the general
Financial Regulation.

Article 80

The financial statements shall be presented in euro and

1.
shall comprise:

(a) the balance sheet and the economic outturn account, which
represent the assets and liabilities and financial situation
and the economic outturn at 31 December of the previous
year; they shall be presented in accordance with the struc-
ture laid down by the Council Directive on the annual
accounts of certain types of companies, but with account
being taken of the specific nature of the Community body's
activities;

(b) the

cash-flow table

showing amounts

collected and

disbursed during the year and the final treasury position;

(c) the statement of changes in capital presenting in detail the
increases and decreases during the year in each item of the
capital accounts.

2.
The annex to the financial statements shall supplement
and comment on the information presented in the statements
referred to in paragraph 1 and shall supply all the additional
information prescribed by internationally accepted accounting
practice where such information is relevant to the Community
body's activities.

Article 81

The budgetary implementation reports shall be presented in
euro. They shall comprise:

(a) the budgetary outturn account, which sets out all budget
operations for the year in terms of revenue and expendi-
ture; the structure in which it is presented shall be the same
as that of the budget itself;

(b) the annex to the budgetary outturn account, which shall
supplement and comment on the information given in that
account.

Article 82

shall

accounting officer

send to the Commission's
The
accounting officer by no later than 1 March of the following
year its provisional accounts,
together with the report on
budgetary and financial management during the year, referred
to in Article 76(7) of this Regulation, so that the Commission's
accounting officer can consolidate the accounts as provided for
in Article 128 of the general Financial Regulation.

Article 83

1.
In accordance with Article 129(1) of the general Financial
Regulation, the Court of Auditors shall, by 15 June at the latest,
make its observations on the provisional accounts of each insti-
tution and each body referred to in Article 185 of the general
Financial Regulation.

2.
On receiving the Court of Auditors' observations on the
provisional accounts of the Community body, the Director shall
draw up the final accounts of the Community body, under his/
her own responsibility, and send them to the management
board, which shall give an opinion on these accounts.

The director shall send the final accounts, together with
3.
the opinion of the management board, to the Commission's
accounting officer and to the Court of Auditors, the European
Parliament and the Council, by 1 July of the following year at
the latest.

The final accounts of

4.
the Community body shall be
published in the Official Journal of the European Communities on
31 October of the following financial year.

The director shall send the Court of Auditors a reply to
5.
the observations made in its annual report by 30 September at
the latest.

CHAPTER 2

Accounting

S e c ti on 1

Common provisions

Article 84

1.
The accounting system of the Community body is the
system serving to organise the budgetary and financial informa-
tion in such a way that figures can be input, filed and regis-
tered.

The accounts

2.
shall consist of general accounts and
budgetary accounts. These accounts shall be kept in euro on
the basis of the calendar year.

3.
The figures in the general accounts and the budgetary
accounts shall be adopted at the close of the budget year so
that the accounts referred to in Chapter 1 can be drawn up.

Notwithstanding paragraphs 2 and 3,

4.
officer may keep analytical accounts.

the authorising

Article 85

The accounting rules and methods and the harmonised chart of
accounts to be applied by the Community body shall be
adopted by the Commission's accounting officer in accordance
with Article 133 of the general Financial Regulation.

S e c ti on 2

General accounts

Article 86

The general accounts shall record, in chronological order using
the double entry method, all events and operations which affect
the economic and financial situation and the assets and liabil-
ities of the Community body.

Article 87

1. Movements on the accounts and the balances shall be
entered in the accounting ledgers.

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All accounting entries,

to the
2.
accounts, shall be based on supporting documents, to which
they shall refer.

including adjustments

The accounting system must be such as to leave a trail

3.
for all accounting entries.

Article 88

The accounting officer of the Community body shall, after the
close of the budgetary year and up to the date of presentation
of the final accounts, make any adjustments which, without
involving disbursement or collection in respect of that year, are
necessary for a true and fair presentation of the accounts in
compliance with the rules.

S e c ti o n 3

Budgetary accounts

Article 89

For the purposes of paragraph 1, the budgetary accounts
2.
shall record all budgetary revenue and expenditure operations
provided for in Title IV of this Regulation.

CHAPTER 4

Property inventories

Article 90

1.
The Community body shall keep inventories showing the
quantity and value of all the tangible, intangible and financial
assets constituting Community property in accordance with a
model drawn up by the accounting officer of the Commission.

The Community body shall check that entries in the inventory
correspond to the actual situation.

The budget accounts shall provide a detailed record of

1.
budgetary implementation.

The sale of movable property shall be advertised in

2.
appropriate manner.

TITLE VIII

EXTERNAL AUDIT AND DISCHARGE

CHAPTER 1

External audit

Article 91

The Court of Auditors shall scrutinise the accounts of the
Community body in accordance with Article 248 of the EC
Treaty.

CHAPTER 2

Discharge

Article 94

Article 92

The European Parliament, upon a recommendation from
1.
the Council, 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.

The Community body shall send the Court of Auditors
1.
the budget, as finally adopted. It shall
inform the Court of
Auditors, as soon as possible, of all decisions and acts adopted
pursuant to Articles 10, 14, 19 and 23.

If the date provided for in paragraph 1 cannot be met,
inform the

2.
the European Parliament or the Council shall
director of the reasons for the postponement.

The Community body shall send the Court of Auditors

2.
the internal financial rules it adopts.

3.
The Court of Auditors shall be informed of the appoint-
ment of authorising officers, accounting officers and imprest
administrators and of delegation decisions under Article 34,
Article 43(1) and (4) and Article 44.

If the European Parliament postpones the decision giving
3.
a discharge,
to take
the director shall make every effort
measures, as soon as possible, to remove or facilitate removal
of the obstacles to that decision.

Article 93

The scrutiny carried out by the Court of Auditors shall be
governed by Articles 139 to 144 of the general Financial Regu-
lation.

1.
The discharge decision shall cover the accounts of all the
revenue and expenditure of the Community body, the resulting
balance and the assets and liabilities of the Community body
shown in the financial statement.

Article 95

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the European
2. With a view to granting the discharge,
Parliament shall, after the Council has done so, examine the
accounts and financial statements of the Community body. It
shall also examine the annual report made by the Court of
Auditors,
the
Community body, any relevant special reports by the Court of
Auditors in respect of the financial year in question and the
Court of Auditors' statement of assurance as to the reliability of
the accounts and the legality and regularity of the underlying
transactions.

together with the replies of

the director of

Article 96

1.
The director shall take all appropriate steps to act on the
Parliament's
observations
the
discharge decision and on the comments accompanying the
recommendation for discharge adopted by the Council.

accompanying

European

The director shall submit to the European Parliament, at
3.
the latter's request,
in the same manner as provided for in
Article 146(3) of the general Financial Regulation, any informa-
tion required for the smooth application of
the discharge
procedure for the year in question.

2.
At the request of the European Parliament or the Council,
the director shall report on the measures taken in the light of
these observations and comments. He/she shall send a copy
thereof to the Commission and the Court of Auditors.

TITLE IX

TRANSITIONAL AND FINAL PROVISIONS

Article 97

Article 99

The time limits referred to in Article 83 shall apply for the first
time in respect of budgetary year 2005.

The management board shall, as far as is necessary, adopt
detailed rules for implementing the financial regulation of the
Community body, on a proposal from its director.

For earlier years these time limits shall be:

(a) 15 September for Article 83(3);

(b) 30 November for Article 83(4);

(c) 31 October for Article 83(5).

Article 98

Article 100

Once this Regulation has entered into force, each body referred
to in Article 185 of the general Financial Regulation shall adopt
a new financial regulation in view of its entry into force for 1
January 2003 or, in any event, within six months of the date
on which it falls within the scope of the said Article 185,
following the granting of a subsidy charged to the general
budget.

The European Parliament, the Council and the Commission
shall be empowered to obtain any necessary information or
explanations regarding budgetary matters within their fields of
competence.

Article 101

This Regulation shall enter into force on the 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.

Done at Brussels, 23 December 2002.

For the Commission

Franz FISCHLER

Member of the Commission