WRITTEN QUESTION E-2804/03 by Elisabeth Jeggle (PPE-DE) to the Commission. Urbs Asia Contract No Ala/95-21-b7-3010/39.
Date: 2003-09-19
Institutions: European Parliament, Provisional data
Subjects: Asia, Baden-Württemberg, audit, auditing, budgetary amendment, cooperation policy, local authority, project management, urbanisation

C 88 E/116

Official Journal of the European Union

EN

8.4.2004

(2004/C 88 E/0122)

WRITTEN QUESTION E-2804/03

by Elisabeth Jeggle (PPE-DE) to the Commission

(19 September 2003)

Subject: Urbs Asia Contract No Ala/95-21-b7-3010/39

The town of Schelklingen is the Commission’s partner in the above development aid programme with the
town of Cagayan de Oro (the Philippines). The auditor which the municipal authorities had originally
intended to employ to check the final accounts of the project is no longer available and, since this was the
Schelkingen supervisory authority, its services would have been free of charge.

The Schelklingen municipal authorities are therefore obliged to find and commission a new project
auditor. Initial estimates put the cost of this at approximately EUR 15 000 per inspection, so that the three
inspections required by contract would amount to EUR 45 000. Since no provision was made for this
expenditure and it cannot be paid for out of the municipal budget, savings will have to be made in the
projects’ budget.

In view of the above, will the Commission say:

1. Can it suggest an economical, unbureaucratic way for the municipal authorities of the town of
Schelkingen to carry out the three final project audits, without restricting the projects financially?

2. Can it retrospectively authorise the cost of final project audit?

3. Will it help solve the problem by permitting the necessary costs of the final project audits to be paid

for out of the project budget?

Answer given by Mr Patten on behalf of the Commission

(23 October 2003)

1.
According to Commission procedures applicable to this grant contract, projects accounts must be
audited on an annual basis. The audit firm must be an independent body, not a city internal department.
The City of Schelklingen is invited to inform the Commission of the proposed change (including name,
address and status of substitute) before recruiting the new audit firm.

To increase the audit budget provided for in the contract budget, a request for a budget modification
2.
must be sent to the Commission (and approved by them) prior to enforcing the changes. The modification
can consist for instance of reallocating the contingency costs to the audit costs. Terms of the contract in
the General Conditions indicate the conditions under which a budget may be reallocated.

3.
Yes. However, as stated above, a budget modification may be necessary. The Beneficiary must submit
a detailed budget amendment request to the Commission. The amendment request should consist of the
indication of the modified budget items for audit costs. Other budget items to be decreased to enable the
reallocation of funds must be specified with the corresponding modified figures. The modifications must
not result in jeopardising the final outcome of the project as defined in the grant contract.

The Beneficiary is invited to contact the relevant Commission services for further assistance in this matter.