Statement of assurance
Date: 2003-10-08
Institutions: European Court of Auditors
Subjects: auditing, budgetary control, consolidated account, general budget (EU)

C 316/106

EN

Official Journal of the European Union

29.12.2003

STATEMENT OF ASSURANCE

(2003/C 316/02)

Pursuant

to the provisions of Article 248 of

the Court has examined the
I.
consolidated annual accounts (1) of
the financial year ended
31 December 2002. It carried out its audit in accordance with its own audit policies and standards,
which are based on international standards that have been adapted to the Community context.
Through its audit, the Court has obtained a reasonable basis for the opinion expressed below. In
the case of own resources the scope of the Court's audit work was limited (2).

the European Communities for

the Treaty,

Reliability of the accounts

II.
In the Court's opinion, the consolidated annual accounts of the European Communities and the
notes to them were drawn up in accordance with the provisions of the Financial Regulation of
21 December 1977 and with the accounting principles, rules and methods set out in the annexes to
the consolidated financial statements (3). Except for the effects of the observations in paragraphs (a)
to (d) and the remark in paragraph III, they faithfully reflect the revenue and expenditure of the
Communities for the year and their financial position at the year-end:

(a)

in the absence of sufficient budgetary appropriations, 820 million euro of legal commitments
are included amongst the off-balance sheet commitments;

(b) the called-up part (240 million euro) of the Commission's commitment (520 million euro) to
the capital of the Galileo joint undertaking does not appear as such on the assets side of the
balance sheet;

(c)

the transitional accounts entered on the assets side of the balance sheet in the sum of 91,1
million euro and in the sum of 714,9 million euro on the liabilities side should be redistributed
amongst the various other balance sheet or revenue and expenditure (operating) account
headings according to the nature of their individual components;

(d)

in the absence of effective internal control procedures for miscellaneous revenue and advances,
the Court cannot be certain that the transactions relating to the sundry debtors item have been
correctly and completely recorded.

III. As has been the case in the past, the origin of the Court's observations lies in the Community
accounting system, which was not designed to ensure that the assets are fully recorded. In this
context, the Court notes that on 17 December 2002 the Commission adopted an action plan for
the modernisation of the European Communities' accounting system. The action plan is supposed
to become fully effective as from the 2005 financial year.

Legality and regularity of the underlying transactions

In view of the results of its audits, the Court is of the opinion that the transactions underlying
IV.
the consolidated annual accounts of the European Communities, taken as a whole, are legal and
regular in respect of the revenue, commitments, administrative expenditure and pre-accession aid,
although in the latter case the supervisory systems and controls are particularly in need of
strengthening.

(1) Namely ‘Revenue and expenditure account: execution of the budget' and ‘Consolidated balance sheet', which

make up Volume I of the annual accounts of the European Communities, 2002 financial year.

(2) Firstly, the Court's audits focus on macroeconomic statistics for which the underlying data cannot be audited
directly, and secondly, they cannot possibly cover the imports that have not been subject to customs
supervision.

(3) See Annex 1, Volume 1, of the final accounts of the European Communities, financial year 2002.

29.12.2003

EN

Official Journal of the European Union

C 316/107

V. As regards other payments, the Court established that:

(a)

(b)

(c)

(d)

in the case of EAGGF Guarantee Section, the payments were, again, materially affected by
errors. Arable crops are less exposed to the risk of error than animal premiums, whereas the
other categories of expenditure, which are not subject to the integrated administration and
control system (IACS), are exposed to greater risk, as well as being subject to less efficient
controls;

in the case of the structural measures, in spite of an improvement in the supervisory systems
and controls, especially at Commission level, the same types of error occurred at Member State
level with the same frequency as in previous years;

in the case of internal policies, the transactions are still affected by significant errors in terms of
legality and regularity. In the case of the research framework programmes, these errors are
likely to persist if the rules governing the programmes are not revised;

in the case of the external actions, the irregularities noted in the past are persisting at local
level. As a result of a process of management decentralisation that
the
supervisory systems and controls do not yet provide the Commission with assurance of the
legality and regularity of the payments at the level of the bodies responsible for implementing
development projects.

is still ongoing,

8 and 9 October 2003

Juan Manuel FABRA VALLÉS

President

European Court of Auditors

12, rue Alcide De Gasperi, L-1615 Luxembourg